SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
Amendment No. 1 to
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 17, 1998
REINHOLD INDUSTRIES,INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 0-18434 13-2596288
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
12827 EAST IMPERIAL HWY SANTA FE SPRINGS, CA 90670
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (562) 944-3281
N/A
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE>
Item 2. Acquisition or Disposition of Assets
On April 24, 1998 (the "Closing Date"), NP Aerospace Limited ("NP
Aerospace"), a wholly owned subsidiary of Reinhold Industries, Inc.
("Reinhold"), purchased from Courtaulds Aerospace Limited ("CAL"), a U.K.
Corporation, which is a wholly owned subsidiary of Courtaulds plc, a U.K.
Corporation, certain assets (consisting of Accounts Receivable, Inventory,
Machinery and Equipment, Land and Intellectual Property and Patents) and assumed
certain liabilities of the Ballistic and Performance Composites Division of CAL
pursuant to an Asset Sale Agreement dated as of April 17, 1998 (the
"Agreement").
Under the terms of the Agreement, on the Closing Date, Reinhold, as the
Guarantor for NP Aerospace, became obligated to pay to Courtaulds plc net
consideration (the "Purchase Consideration") consisting of (a) Two Million Two
Hundred Thousand pounds sterling (pound sterling 2,200,000) cash on the Closing
Date and (b) within 120 days following the end of each of the calendar years
1998 through 2001, a cash amount equal to 25% of the Pre-tax Profit on the light
armored vehicle business only, the maximum aggregate amount of which shall not
exceed Twenty Million pounds sterling (pound sterling 20,000,000).
On the Closing Date, Reinhold paid to Courtaulds plc the Two Million
Two Hundred Thousand pounds sterling (pound sterling 2,200,000) ($3,706,340
based on an exchange rate of $1.6847) cash due on the Closing Date and will make
additional payments in the future as required by the Agreement.
The source of the funds for a portion of the Purchase Consideration due
on the Closing Date was a Five Year Loan and Security Agreement with The CIT
Group Credit/Finance ("CIT") in the amount of Four Million Dollars ($4,000,000)
at an interest rate of prime plus 1.75%. The term portion of the loan in the
amount of Two Million Two Hundred Sixty-Eight Thousand Dollars ($2,268,000) was
received from CIT. The remainder of the CIT credit facility is a revolver of One
Million Seven Hundred Thirty-Two Thousand Dollars ($1,732,000), which has not
been used at this time. The remaining portion of the purchase consideration not
funded by the CIT loan was funded by Reinhold's cash on hand. Future payments
required by the Agreement are expected to be financed from operating cash flows.
Reinhold is a custom manufacturer of advanced composite components and
sheet molding compounds for a variety of aerospace, defense and commercial
applications. The Ballistic and Performance Composites Division is a
manufacturer of various products, including compression molded products for the
lighting, automotive and communications industries, compression molded military
helmets, light armored vehicles and various structural composites products.
<PAGE>
It is anticipated that the Ballistic and Performance Composites
Division, which was renamed NP Aerospace, will continue to occupy its present
facility in Coventry, England.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
a) Financial Statements of Business Acquired.
Ballistics Division of Courtaulds plc
Non-statutory financial statements
31 March 1998
<PAGE>
kpmg
KPMG
2 Cornwall Street
Birmingham
B3 2DL
Independent auditors' report
To the members of Reinhold Industries Inc.
We have audited the accompanying balance sheets of the Ballistics division of
Courtaulds plc (the division) as of 31 March 1997 and 1998 and the profit and
loss account, statement of total recognised gains and losses, reconciliation of
movements in divisional net assets and cash flow statement for the years ended
31 March 1997 and 1998.
Basis of opinion
We conducted our audits in accordance with Auditing Standards issued by the
Auditing Practices Board in the United Kingdom and generally accepted in the
United States. An audit includes the examination, on a test basis, of evidence
relevant to the amounts and disclosures in the financial statements. It also
includes an assessment of the significant estimates and judgements made by
divisional management in the preparation of the financial statements, and of
whether the accounting policies are appropriate to the division's circumstances,
consistently applied and adequately disclosed.
We planned and performed our audits so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
Opinion
In our opinion the accompanying financial statements present fairly, in all
material respects, the financial position of the Ballistics division of
Courtaulds plc as of 31 March 1997 and 1998 and the profits and cash flows of
the division for the years ended 31 March 1997 and 1998 in conformity with
generally accepted accounting principles in the United Kingdom.
KPMG 24 June 1998
Chartered Accountants
Registered Auditors
<PAGE>
<TABLE>
Profit and loss account
for the year ended 31 March 1998
<CAPTION>
Continuing operations
1998 1997 1997 1997
Pre Exceptional
exceptional charges
Total charges (note 3) Total
(BP)000 (BP)000
Note
<S> <C> <C> <C> <C> <C>
Turnover 2 10,029 10,344 - 10,344
Cost of sales (9,400) (10,709) (633) (11,342)
------ ------- ---- -------
Gross profit/(loss) 629 (365) (633) (998)
Distribution costs (114) (123) - (123)
Selling, marketing and administration (676) (806) - (806)
expenses
------ ------- ---- -------
Operating loss 5 (161) (1,294) (633) (1,927)
------- ----
Net interest income 4 370 377
Loss on disposal of tangible fixed assets (9) (214)
------ -------
Profit/(loss) on ordinary activities 11 200 (1,764)
====== =======
<FN>
BP = Pounds Sterling
Movements in reserves are disclosed in note 11.
In both the current and preceding year there were no recognised gains or losses
other than the profit for the year, and no material difference between the
reported profit/(loss) on ordinary activities to the respective historical cost
profit(loss) for the year.
</FN>
</TABLE>
<PAGE>
<TABLE>
Balance sheet
at 31 March 1998
<CAPTION>
Note 1998 1997
(BP)000 (BP)000 (BP)000 (BP)000
<S> <C> <C> <C> <C>
Fixed assets
Tangible assets 7 2,095 2,726
----- -----
2,095 2,726
Current assets
Stocks 8 1,191 1,916
Debtors 9 1,883 1,708
Cash at bank and in hand 5,749 4,668
------ ------
8,823 8,292
Creditors: amounts falling due within one year 10 (1,460) (1,760)
------ ------
Net current assets 7,363 6,532
Divisional net assets 11 9,458 9,258
===== =====
<FN>
BP = Pounds Sterling
</FN>
</TABLE>
<PAGE>
<TABLE>
Cash flow statement
for the year ended 31 March 1998
<CAPTION>
Note 1998 1997
(BP)000 (BP)000
<S> <C> <C> <C>
Cash flow from operating activities 12a 721 (633)
Returns on investments and servicing of finance 12b 370 377
Taxation - -
Capital expenditure 12c (10) 7
----- -----
Cash before financing 1,081 (249)
Financing - -
----- -----
Increase/(decrease) in cash 1,081 (249)
----- -----
Reconciliation of net cash flow to movement in net
cash
Increase/(decrease) in cash 1,081 (249)
----- -----
Increase/(decrease) in net cash resulting from cash flow 1,081 (249)
Net cash at 31 March 1997 4,668 4,917
----- -----
Net cash at 31 March 1998 12d 5,749 4,668
----- -----
<FN>
BP = Pounds Sterling
</FN>
</TABLE>
<PAGE>
Notes
(forming part of the financial statements)
Amounts in Pounds Sterling 000's, except number of employees
1 Principal accounting policies
The following accounting policies have been applied consistently in dealing with
items which are considered material in relation to the division's financial
statements:
Basis of accounting
The financial statements have been prepared in accordance with applicable
Accounting Standards in the United Kingdom under the historical cost accounting
rules modified to include the revaluation of certain land and buildings.
Depreciation
Depreciation is provided so as to write off the cost or valuation less the
estimated residual value of tangible fixed assets, other than freehold land
which is not depreciated, on a straight line basis over the estimated useful
economic lives of the assets concerned at the following annual rates:
Freehold buildings - 10 to 20 years
Plant, fixtures and equipment - 3 to 10 years
Stock and long term contracts
Stock is stated at the lower of cost plus applicable factory overhead and net
realisable value using the first in first out valuation method.
The amount of profit attributable to the stage of completion of a long term
contract is recognised when the outcome of the contract can be foreseen with
reasonable certainty. Turnover for such contracts is stated at cost appropriate
to their stage of completion plus attributable profits, less amounts recognised
in previous years. Provision is made for any losses as soon as they are
foreseen. Contract work in progress is stated at cost incurred, less those
transferred to the profit and loss account, after deducting foreseeable losses
and payments on account not matched with turnover. Amounts recoverable on
contracts are included within debtors and represent turnover recognised in
excess of payments on account.
Taxation
The division via its inclusion in the trading results and performance of
Courtaulds plc is subject to United Kingdom taxation rules and regulations.
However the division itself is not directly subject to taxation and therefore no
balances have been included in these financial statements in relation to United
Kingdom taxation.
Foreign currencies
Transactions denominated in foreign currencies are recorded using the rates of
exchange ruling at the date of the transaction. Year end debtor and creditor
balances which are payable in foreign currencies are translated into sterling
using the rates of exchange ruling at the balance sheet date (or forward
contract rates if applicable) and any differences arising are dealt with through
the profit and loss account.
<PAGE>
Notes (continued)
Amounts in Pounds Sterling 000's, except number of employees
1 Principal accounting policies (continued)
Pension costs
The division participates in pension schemes operated by the Courtaulds Plc
group for the benefit of its employees. The funds of the schemes are
administered by trustees, are separate from the group and an independent actuary
completes valuations every three years. In accordance with the actuary's
recommendations, the contributions may be adjusted so as to secure the benefits
set out in the rules and augmentation of pensions at that time. The pension cost
charged in the profit and loss account is calculated by the actuary so as to
spread the cost of pensions over the employees' working lives.
Leased assets
Rentals payable under operating leases are charged against profits on a straight
line basis over the period of the lease.
Where tangible fixed assets are financed by leasing arrangements which give
rights approximating to ownership, the assets are treated as if they had been
purchased and the capital element of the financing commitment included in
creditors. The rentals payable in respect of such assets are apportioned between
interest, which is charged to the profit and loss account, and capital repayment
which reduces the outstanding creditor.
Turnover
Turnover represents the amounts (excluding United Kingdom value added tax)
derived from the provision of goods and services to customers during the year.
2 Turnover (by destination)
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
United Kingdom 6,837 6,215
Exports:
Other European Union countries 2,433 3,549
Rest of Europe 172 24
Rest of the world 587 556
------ ------
10,029 10,344
====== ======
</TABLE>
The division is engaged in the design and manufacture of composite material
based products. Turnover is attributable to this activity which is considered to
be a single class of business. All turnover originated from the United Kingdom.
<PAGE>
Notes (continued)
Amounts in Pounds Sterling 000's, except number of employees
3 Exceptional item
The exceptional charge relates to the write off of certain fixed asset and stock
balances related to the vehicles activity of the division following the loss of
a large sales order.
4 Net interest income
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Interest receivable 372 378
Interest payable (2) (1)
--- ---
370 377
=== ===
</TABLE>
5 Profit/(loss) on ordinary activities
<TABLE>
<CAPTION>
1998 1997
Profit/(loss) on ordinary activities is stated after charging
<S> <C> <C>
Depreciation 632 955
Auditors' remuneration 11 15
Operating leases:
Hire of plant and equipment 58 40
Research and development 268 290
=== ===
</TABLE>
6 Staff numbers and costs
The average number of persons employed by the division during the year, analysed
by category, was as follows:
<TABLE>
<CAPTION>
Number of employees
1998 1997
<S> <C> <C>
Management, sales and marketing 7 11
Production 149 184
--- ---
156 195
=== ===
</TABLE>
The aggregate payroll costs of these persons were as follows:
<TABLE>
<S> <C> <C>
Wages and salaries 2,323 3,402
Social security costs 193 253
Other pension costs (note 15) 94 111
----- -----
2,610 3,766
===== =====
</TABLE>
<PAGE>
Notes (continued)
Amounts in Pounds Sterling 000's, except number of employees
7 Tangible assets
<TABLE>
<CAPTION>
Freehold Plant and Fixtures Total
land and machinery and
buildings fittings
<S> <C> <C> <C> <C>
Cost or valuation
At beginning of year 810 6,813 1,722 9,345
Additions for year - 5 5 10
Disposals - (6) (42) (48)
--- ----- ----- -----
At end of year 810 6,812 1,685 9,307
=== ===== ===== =====
Depreciation
At beginning of year 139 4,991 1,489 6,619
Charge for year 76 453 103 632
Disposals - (5) (34) (39)
--- ----- ----- -----
At end of year 215 5,439 1,558 7,212
=== ===== ===== =====
Net book value
At 31 March 1998 595 1,373 127 2,095
=== ===== ===== =====
At 31 March 1997 671 1,822 233 2,726
=== ===== ===== =====
</TABLE>
The historical cost and net book value of freehold land and buildings can be
analysed as follows:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Cost 1,287 1,287
Depreciation (843) (758)
----- -----
Historical cost net book value 444 529
===== =====
</TABLE>
The valuation was carried out by the directors of Courtaulds plc on 31 March
1996 using open market value on an existing use basis and in accordance with the
guidance notes on the valuation of assets published by the Royal Institute of
Chartered Surveyors.
The cost or valuation of freehold land not subject to depreciation was 60,000 at
31 March 1998 (1997: 60,000).
Commitments
The company had no capital commitments at 31 March 1998 (1997: nil).
<PAGE>
Notes (continued)
Amounts in Pounds Sterling 000's, except number of employees
8 Stocks
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Raw materials 407 1,009
Work in progress 236 240
Finished goods 548 667
----- -----
1,191 1,916
===== =====
</TABLE>
9 Debtors
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Trade debtors 1,788 1,396
Other debtors, prepayments and accrued income 95 312
----- -----
1,883 1,708
===== =====
</TABLE>
10 Creditors: amounts falling due within one year
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Trade creditors 907 1,049
Amounts owed to parent undertaking 324 502
Other taxes and social security 94 -
Accruals 135 209
----- -----
1,460 1,760
===== =====
</TABLE>
11 Reconciliation of movement in divisional net assets
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Profit/(loss) for the financial year 200 (1,764)
----- ------
200 (1,764)
Opening divisional net assets 9,258 11,022
----- ------
Closing divisional net assets 9,458 9,258
===== ======
</TABLE>
<PAGE>
Notes (continued)
Amounts in Pounds Sterling 000's, except number of employees
12 Notes to the cash flow statement
(a) Reconciliation of operating loss to net cash flow from operating
activities
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C> <C> <C>
Operating loss (161) (1,927)
Depreciation charge 632 955
Change in working capital:
Stocks 725 762
Debtors (175) (43)
Creditors and provisions (300) (380)
---- ----
250 339
---- ------
Net cash flow from operating activities 721 (633)
==== ======
</TABLE>
(b) Returns on investments and servicing of finance
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Interest received 372 378
Interest paid (2) (1)
--- ---
370 377
=== ===
</TABLE>
(c) Capital expenditure
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Purchase of tangible fixed assets (10) -
Sale of tangible fixed assets - 7
--- --
(10) 7
=== ==
</TABLE>
(d) Analysis of net cash
<TABLE>
<CAPTION>
At 31 March Cash flow At 31 March
1997 1998
<S> <C> <C> <C>
Cash at bank and in hand 4,668 1,081 5,749
===== ===== =====
</TABLE>
<PAGE>
Notes (continued)
Amounts in Pounds Sterling 000's, except number of employees
13 Leasing commitments
At 31 March 1998 the annual commitments under operating leases were as follows:
<TABLE>
<CAPTION>
1998 1997
Land and Other Land and Other
buildings buildings
Operating leases which expire:
<S> <C> <C> <C>
Within one year - 8 - 29
Within two to five years - - - 2
--- --- --- ---
- 8 - 31
=== === === ===
</TABLE>
14 Contingent liabilities
The division had given guarantees in the normal course of business amounting
to 62,800 at 31 March 1998 (1997: nil).
15 Pensions
The division participates in a group pension scheme where the benefits are
specified by the rules of the scheme. The scheme's assets are independent of the
group's finances. The scheme is funded by contributions partly from the
employees and partly from the division at rates determined by the independent
actuaries. The scheme was valued by consulting actuaries as at 31 March 1998.
This showed that the actuarial value of the assets more than covered the
benefits accrued to members after allowing for expected increases in pensionable
remuneration.
16 Related party transactions
Courtaulds plc incurs certain central staff support and related costs on behalf
of the division. These costs which are then recharged to the division amounted
90,000 and 241,000 in the years ended 31 March 1998 and 1997 respectively.
17 Sale of the trade and certain assets and liabilities of the Ballistics
division
On 17 April 1998 Courtaulds Plc sold the trade and certain of the assets and
liabilities of its Ballistics division to NP Aerospace Limited, an entity which
is wholly owned by Reinhold Industries Inc.. NP Aerospace Limited paid
Courtaulds Plc an initial consideration of 2,200,000 which is subject to
amendment depending upon the level of working capital at the acquisition date.
The working capital acquired by Reinhold includes all current assets and
liabilities except for the cash balances, certain trade debts, all intergroup
debtors and creditors, and all tax liabilities. In addition deferred
consideration is payable by NP Aerospace dependent upon the profitability of the
vehicle operations of the division.
<PAGE>
Notes (continued)
Amounts in Pounds Sterling 000's, except number of employees
18 Summary of differences between United Kingdom and United States
generally accepted accounting principles
The division's financial statements are prepared in accordance with generally
accepted accounting principles (GAAP) applicable in the United Kingdom which
differ in certain respects from those applicable in the United States. The
effect of such differences on profit(loss) on ordinary activities and divisional
net assets relate to the following matter:
Revaluation of land and buildings: UK GAAP allows the periodic revaluation
of land and buildings. The directors of Courtaulds plc revalued the land
and buildings of the division on 31 March 1996 as described in foot note 7.
Under US GAAP such revaluations of property would not be reflected in the
financial statements.
Reconciliation of profit on ordinary activities under United Kingdom GAAP to net
income in accordance with US GAAP:
<TABLE>
<CAPTION>
1998 1997
Years ended 31 March:
<S> <C> <C>
Profit on ordinary activities in accordance with UK GAAP 200 (1,764)
Adjustments
- - depreciation adjustment in respect of revalued land and
buildings (9) (11)
--- ------
Net income(loss) in accordance with US GAAP 191 (1,775)
=== ======
</TABLE>
Cumulative effect on divisional net assets of differences between UK and US
GAAP:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Divisional net assets in accordance with UK GAAP 9,458 9,258
Adjustments
- - Revaluation of land and buildings (151) (142)
----- -----
Divisional net assets in accordance with US GAAP 9,307 9,116
===== =====
</TABLE>
<PAGE>
b) Pro forma Financial Information
PRO FORMA FINANCIAL INFORMATION
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma condensed combined financial statements
as of March 31, 1998 and for the three months ended March 31, 1998 and the year
ended December 31, 1997 are filed herewith:
Unaudited Pro Forma Condensed Combined Balance Sheet
Unaudited Pro Forma Condensed Combined Statements of Operations
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
The following unaudited pro forma condensed combined statements of
operations for the three months ended March 31, 1998 and the year ended December
31, 1997 give effect to the acquisition of substantially all of the assets and
the assumption of certain of the liabilities of Courtaulds Aerospace Limited
("CAL"), a wholly owned subsidiary of Courtaulds plc, by NP Aerospace Limited, a
wholly owned subsidiary of Reinhold Industries, Inc.("the Company"), as if the
transaction had occurred at the beginning of each respective period rather than
the actual date of April 24, 1998. The pro forma information is based on the
historical financial statements of CAL and the Company giving effect to the
transaction under the purchase method of accounting and the assumptions and
adjustments set forth in the accompanying notes to the unaudited pro forma
condensed combined financial statements.
The unaudited pro forma condensed combined statements of operations do not
necessarily represent the results of operations of the Company as if the
acquisition had actually occurred on the date indicated or which may be obtained
in the future. The unaudited pro forma condensed combined financial statements
presented should be read in conjunction with the financial statements and
related notes of the Company included in the Annual Report (Form 10-K) filed on
March 13, 1998 with the Securities and Exchange Commission.
<PAGE>
<TABLE>
REINHOLD INDUSTRIES, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998
(Amounts in thousands, except per share data)
<CAPTION>
Pro Forma Pro Forma
Reinhold NPA(a) Adjustments Combined
-------- ------ ----------- ---------
<S> <C> <C> <C> <C>
Net sales $4,300 $4,214 $- $8,514
Cost of goods sold 3,128 4,186 (272)(f) 7,042
----- ----- ----- -----
Gross profit 1,172 28 272 1,472
Selling, general and administrative expenses 742 153 - 895
----- ----- ----- -----
Operating income 430 (125) 272 577
Interest income (expense), net 36 183 (228)(c) (9)
----- ----- ----- -----
Income before income taxes 466 58 44 568
Income tax provision 14 - 36 (g,h) 50
----- ----- ----- -----
Net income $ 452 $ 58 $ 8 $ 518
===== ===== ===== =====
Basic and diluted earnings per share $ 0.23 $ 0.26
===== =====
Weighted average common shares 1,999 1,999
===== =====
<FN>
See accompanying notes to unaudited pro forma condensed combined financial
statements
</FN>
</TABLE>
<PAGE>
<TABLE>
REINHOLD INDUSTRIES, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
MARCH 31, 1998
(Amounts in thousands)
<CAPTION>
Pro Forma Pro Forma
Reinhold NPA(a) Adjustments Combined
-------- ------ ----------- ---------
ASSETS
Current assets
<S> <C> <C> <C> <C>
Cash and cash equivilents $ 3,216 $ 9,486 $ (9,486)(d) $ 3,216
Marketable securities 500 - - 500
Accounts receivable 1,846 3,107 (715)(d) 4,238
Inventories 1,780 1,965 - 3,745
Other current assets 902 - - 902
------ ------ ------- ------
Total current assets 8,244 14,558 (10,201) 12,601
Property, plant and equipment, net 4,450 3,457 (3,127)(e) 4,780
Other assets 910 - - 910
------ ------ ------- ------
TOTAL ASSETS $13,604 $18,015 $(13,328) $18,291
====== ======= ======= ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 808 $ 2,409 (497)(d) $ 2,720
Accrued expenses 569 - - 569
------ ------ ------- ------
Total current liabilities 1,377 2,409 (497) 3,289
Long term pension liability 592 - - 592
Other long term liabilities 1,843 - - 1,843
Stockholders' equity
Common stock
Authorized - 1,480,000 Class A shares
and 1,020,000 Class B shares Issued
and outstanding - 978,956 Class A shares
and 1,020,000 Class B shares 20 - - 20
Additional paid-in capital 7,791 - - 7,791
Retained earnings 2,500 15,606 (12,831) 5,275
Accumulated other comprehensive income (519) - - (519)
------ ------ ------- ------
Net stockholders' equity 9,792 15,606 (12,831) 12,567
------ ------ ------- ------
TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY $13,604 $18,015 $(13,328) $18,291
====== ====== ======= ======
<FN>
See accompanying notes to unaudited pro forma condensed combined financial
statements
</FN>
</TABLE>
<PAGE>
<TABLE>
REINHOLD INDUSTRIES, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
(Amounts in thousands, except per share data)
<CAPTION>
Pro Forma Pro Forma
Reinhold NPA(a) Adjustments Combined
-------- ------ ----------- ---------
<S> <C> <C> <C> <C>
Net sales $16,232 $16,548 $ - $32,780
Cost of goods sold 11,533 15,698 (1,010)(f) 26,221
------ ------ ----- ------
Gross profit 4,699 850 1,010 6,559
Selling, general and administrative expenses 3,104 1,116 - 4,220
------ ------ ----- ------
Operating income 1,595 (266) - 2,339
Interest income (expense), net 103 596 (802)(b) (103)
------ ------ ----- ------
Income before income taxes 1,698 330 208 2,236
Income tax provision 51 - 188 (g,h) 239
------ ------ ----- ------
Net income $ 1,647 $ 330 $ 20 $ 1,997
====== ====== ===== ======
Basic and diluted earnings per share $ 0.82 $ 1.00
====== ======
Weighted average common shares 1,999 1,999
====== ======
<FN>
See accompanying notes to unaudited pro forma condensed combined financial
statements
</FN>
</TABLE>
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(In Thousands)
(a) The pro forma condensed financial statements include the financial results
of the Company's wholly-owned subsidiary, NP Aerospace Limited ("NPA"), located
in Coventry, U.K. The base currency of NPA is the Pound Sterling. The pro forma
balance sheet of NPA was translated into US Dollars at the approximate rate in
effect on that date while the pro forma statement of operations was translated
at the average rate in effect during the period presented as follows:
Translation Rate
Balance Sheet - March 31, 1998 0.606
Statement of Operations - March 31, 1998 0.606
Statement of Operations - December 31, 1997 0.606
(b) Represents the elimination of interest income on cash in banks not purchased
by the Company ($596) and estimated interest expense ($206) on the proceeds of a
term debt loan with The CIT Group Credit/Finance to fund the asset purchase at
an interest rate of 10.25%.
(c) Represents the elimination of interest income on cash in banks not purchased
by the Company ($183) and estimated interest expense ($45) on the proceeds of a
term debt loan with The CIT Group Credit/Finance to fund the asset purchase at
an interest rate of 10.25%.
(d) Represents the elimination of assets/liabilities not purchased.
(e) Represents the application of negative goodwill against property, plant and
equipment generated as a result of the purchase.
(f) Represents the reduction in depreciation expense as a result of the
application of negative goodwill.
(g) Represents the related income tax effect of the pro forma adjustments
utilizing a statutory tax rate of 35%.
(h) Represents the application of the statutory income tax rate applied against
income before income taxes as no such amounts were recorded in the statement of
operations of Courtaulds Aerospace Limited.
<PAGE>
c) Exhibits
2. * Asset Sale Agreement dated as of April 17, 1998 by and
between NP Aerospace Limited (Purchaser), Reinhold Industries,
Inc. (Guarantor) and Courtaulds plc (Vendor) relating to the
purchase of certain assets and the assumption of certain
liabilities of the Ballistic and Performance Composites
Division of Courtaulds Aerospace Ltd.
99.** Press release dated April 28, 1998 announcing the asset
purchase of the Ballistic and Performance Composites Business
of Courtaulds Aerospace Ltd. by Reinhold Industries, Inc.
- ----------------------
* Material omitted pursuant to request for confidential treatment and filed
separately.
** Previously Filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
REINHOLD INDUSTRIES, INC.
(Registrant)
Date: June 30, 1998 By: /s/ Brett R. Meinsen
Brett R. Meinsen
Vice President -
Finance & Administration
THIS AGREEMENT is made on April 17,1998 BETWEEN:-
(1) COURTAULDS PLC No. 128124 whose registered office is at 50 George
---------------
Street, London W1A 2BB ("the Vendor");
(2) COURTAULDS AEROSPACE LIMITED No. 230220 whose registered office is at
72 Lockhurst Lane, Coventry, CV6 5RS ("CAL", CAL and the Vendor being
together referred to as "the Companies");
(3) NP AEROSPACE LIMITED No. 34724080 whose registered office is at Equity
House, 7 Rowchester Court, Whittall Street, Birmingham B4 6D ("the
Purchaser"); and
(4) REINHOLD INDUSTRIES INC. incorporated under the laws of the State of
-------------------------
Delaware whose corporate offices are at 12827 East Imperial Hwy, Santa
Fe Springs, CA 90670 ("the Guarantor").
1. DEFINITIONS AND INTERPRETATION
(1) In this Agreement unless the context otherwise requires the
following expressions shall have the following respective
meanings:-
"the Accounting Policies" the principal accounting
principles, policies and
practices used by CAL or
the Vendor in preparing the
Accounts, as set out in
Document 4.1 in the Agreed
Bundle referred to in the
Disclosure Letter;
"the Accounts" the balance sheet of the
Business at the Accounts
Date and the profit and
loss account of the
Business for the year
ended on the Accounts Date,
in the form initialled
between the parties for the
purposes of identification;
"the Accounts Date" 31 March 1997;
<PAGE>
"Adjustment" the amount by which the
Working Capital exceeds or
falls short of pound
sterling 2,244,000;
"Agreed Bundle" the bundle of agreed
documents initialled by the
parties for identification
and annexed to the
Disclosure Letter;
"Agreed Form" in a form agreed by and
signed by or on behalf of
the Vendor or CAL and the
Purchaser;
"the Assumed the Creditors, all
Liabilities" obligations of the Business
at the Effective Time under
the Contracts and all other
liabilities and obligations
expressly agreed to be
assumed by the Purchaser
under the terms of Clauses
6(5), 6(6) and 7(4)(d);
"the Business" the business of the
manufacture, distribution
and sale of Defence
Products(armoured vehicles,
vehicle armour, helmets,
body armour and technical
mouldings including
mouldings with Stealth
capability) and Composite
Products (seat-backs,
composite medical couches
and composite trade
mouldings), as carried on
by the Vendor at the
Completion Date from the
Properties, and references
to the Business include
references to the Sale
Assets;
"business day" a day on which banks
generally are open in the
City of London for the
transaction of normal
banking business;
"Completion" the completion of the sale
and purchase of the
Business under the
provisions of Clause 11;
<PAGE>
"the Completion Date" the date on which
Completion actually takes
place;
"the Initial Consideration" the purchase price to be
paid for the Business as
provided in Clause 3(1);
"Consultation Plan" the statement in the Agreed
Form of the procedures to
be implemented in respect
of, and the information to
be supplied between the
date of this Agreement and
the Completion Date to, the
Employees, for the purposes
of announcing the sale and
purchase hereunder to such
employees and of compliance
with Regulation 10 of the
Regulations;
"the Contracts" all contracts, agreements,
engagements and orders
(including without
limitation (a) the leasing,
contract hire,hire purchase
or other similar contracts
listed in Documents 6.23,
6.56, and 6.90 to 6.93 in
the Agreed Bundle(b) * and
(c) all sale and purchase
contracts and orders)
entered into by or on
behalf of the Vendor prior
to the Effective Time in
relation exclusively to the
Business, which and to the
extent that such remain to
be performed in whole or in
part by the Vendor or CAL
at the Effective Time but
excluding the Excluded
Contracts;
"the Courtaulds Scheme" the Courtaulds Pension
Scheme;
- ---------------------------------
* Material omitted pursuant to request for confidential treatment and filed
separately.
<PAGE>
"the Creditors" all trade and sundry
creditors and accounts
payable of the Business
whether due or accrued at
the Effective Time
(including without
limitation (a) accrued
obligations to the
Employees in respect of all
salaries, wages, bonuses
and other emoluments, and
associated accrued related
PAYE liabilities, National
Insurance and pension
contributions with respect
only to the salary or wages
month (or if relevant such
shorter period) in which
the Effective Time takes
place and (b) the
Intra-Group Creditors);
"the Debts" or all trade debts in respect
"Debtors" of goods or services
invoiced or despatched by
the Vendor or CAL in
respect of the Business
prior to the Effective
Time, all other debts or
receivables owing to the
Vendor or CAL at the
Effective Time in respect
of all non-trading
transactions of the
Business, and all accrued
trade and sundry
prepayments, payments in
advance and accrued
repayments accruing to the
Vendor in respect of the
Business at the Effective
Time, always excluding the
Swedish Debts;
"the Deferred the deferred consideration
Consideration" to be calculated and paid
by the Purchaser pursuant
to Clause 4;
"Deferred Years" the following four years(i)
the year commencing on the
Completion Date and ending
on 31 December 1998
(inclusive), (ii) the year
commencing on 1 January
1999 and ending on 31
December 1999 (inclusive)
(iii) the year commencing
on 1 January 2000 and
ending on 31 December 2000
(inclusive), and (iv) the
year commencing on 1
<PAGE>
January 2001 and ending on
31 December 2001
(inclusive), and "Deferred
Year" shall be interpreted
accordingly.
"the Disclosure the letter in Agreed Form
Letter" from the Vendor to the
Purchaser on the date
of this Agreement,
including without
limitation any document
attached thereto or
specified therein as being
deemed to be incorporated
therein;
"Effective Time" the close of business on
the Completion Date;
* *
"the Employees" only those employees
employed in the Business
particulars of whom are
set out in the Second
Schedule, excluding any
person whose employment
shall have been terminated
(by resignation or
otherwise) prior to the
Effective Time;
"Environmental Laws" all laws,statutes, bye-laws
or regulations of the
United Kingdom or any part
thereof relating to
pollution or protection of
the environment, including
laws relating to emissions,
seepages, spillages,
discharges, escapes,
releases or threatened
escapes or released of
pollutants, contaminants,
chemicals or toxic or
hazardous substances,
wastes, materials or noise
into the environment or
otherwise relating to the
manufacture, processing,
distribution, use, keeping,
treatment, disposal,
deposit, storage, transport
or handling of the same;
- ---------------------------------
* Material omitted pursuant to request for confidential treatment and filed
separately.
<PAGE>
"Environmental any penalties, costs,
Liabilities" claims, actions, damages,
losses, liabilities and
expenses (including legal
expenses) arising from the
presence, escape, discharge
or emission of any
pollutants, contaminants,
chemicals or toxic or
hazardous substances,
wastes, materials, or from
any breach of, or from any
breach of any licence or
consent required by, any
Environmental Laws, arising
from the carrying on by any
member of the Vendor's
Group from time to time of
the Business or any other
business at the Property;
"the Equipment" all plant, equipment,
machinery, vehicles,
furniture and fixtures and
fittings owned by the
Vendor or CAL and used
exclusively in connection
with the Business at the
Completion Date, including
but not limited to the key
items of plant and
equipment listed in Part 1
of the Third Schedule but
always excluding the
Excluded Equipment;
"event" includes any act omission
transaction or
circumstances(including any
of such matters provided
for under this Agreement);
"the Excluded Assets" the Excluded Equipment, the
Swedish Debts, the premises
the subject of the Site 2
Lease and the Site 3 Lease,
the benefit of the Excluded
Contracts, the names and/or
trade marks"Courtaulds" and
"Courtaulds Aerospace" in
any form and in conjunction
with any other word, the
Courtaulds "C" Mark logo
<PAGE>
and any other trade or
brand names, trade marks or
logos of the Vendor or CAL
(or rights to use the same)
(apart from the Name and
the Trademarks and the
unregistered trademarks
"Ceramid" and "Guardian"
which are to be sold to the
Purchaser hereunder), all
stationery stocks bearing
the "Courtaulds" name or"C"
Mark, all cash in hand,
bank balances and accrued
interest of the Business on
the Effective Time
(provided that for this
purpose cheques and
lodgements received or
despatched but not cleared
at the Effective Time will
be treated as debits/
credits at the Effective
Time for the purposes of
determining the bank
balance(s) of the Business
being for the a ccount of
the Vendor), any amounts
repayable in respect of
Taxation attributable to
the period prior to the
Effective Time and any
intellectual property
exclusively relating to the
former activities of CAL in
respect of the manufacture
and sale of electronic
enclosures;
"Excluded Contracts" the contracts listed in the
Fourth Schedule;
"Excluded Equipment" the items of plant
equipment, machinery,
vehicles, furniture and
fixtures and fittings
listed or described in Part
2 of the Third Schedule,
which are to be excluded
from the sale to the
Purchaser;
"Excluded any liabilities for or
Liabilities" under Taxation (including
deferred taxation) which
arises from the carrying on
of the Business prior to
the Effective Time,save for
PAYE and National Insurance
contributions to the extent
expressly included in the
<PAGE>
definition of Creditors and
for accrued MOD commercial
exploitation royalties in
respect of products or
processes listed in the
Disclosure Letter;
"the Goodwill" the goodwill of the
Business including (so far
as the Vendor is able to
transfer the same but
always excluding the
Excluded Assets) the
exclusive right for the
Purchaser to represent
itself as carrying on the
Business in continuation
of and in succession to the
Vendor;
"Initial Payment" the sum of (pound sterling)
2,200,000 to be paid by the
Purchaser to the Vendor on
Completion in accordance
with Clause 11(5);
"Intellectual (a) all rights of the
Property" Vendor or CAL to
the unregistered
trademarks
"Ceramid",
"Guardian" and
"Natplas" to the
extent such are
transferable to
the Purchaser and
all such rights
and interests
owned by the
Vendor or CAL in
technical
specifications,
drawings and
designs and
related
intellectual
property rights
used by the Vendor
exclusively in the
course of carrying
on the Business,
always subject to
rights of the MOD
or other third
parties as
disclosed in the
Disclosure Letter;
"Intra-Group Creditors" all accounts payable and
accrued sundry expenses
outstanding as at the
Effective Time between the
Business and other
operations within the
Vendor or CAL and/or other
members of the Vendor's
<PAGE>
Group in respect of goods
and/or services supplied to
the Business in the
ordinary course of conduct
of the Business prior to
the Effective Time;
"MOD" HM Ministry of Defence;
"the Name" the rights of the Vendor
or CAL to the name"National
Plastics" to the extent
such are transferable to
the Purchaser;
"the Patents" the rights of the Vendor or
CAL to use and to transfer
the patents or pending
applications for patents
short details of which are
set out in the Sixth
Schedule;
"Pre-tax Profit" the net operating profit
of the Purchaser's business
in respect of Vehicles,
calculated as follows:-
(a) total invoiced
sales, fees,
charges and other
revenue in respect
of (i) the sale,
hire, leasing or
other transfer of
rights in or
possession of
Vehicles, (ii) the
sale or provision
of parts or other
goods relating to
or for use in, on
or in conjunction
with Vehicles
and/or (iii) the
provision of
repair,
maintenance,
refitting or other
services in
relation to
Vehicles,
excluding Value
Added Tax, subject
as provided in
Clause 4(12), LESS
(b) (i) the cost of
direct materials,
direct labour and
direct production
<PAGE>
overhead incurred
exclusively with
respect to the
goods or services
referred to in (a)
above, (ii) sales,
distribution and
administration
expenses incurred
by the Purchaser
exclusively in
relation to the
goods or services
referred to in (a)
above and (iii) in
respect of
production, sales,
distribution
and/or
administration
expenses incurred
by the Purchaser
in relation to
both goods or
services referred
to in (a) above
and other goods or
services sold by
the Purchaser, a
fair apportionment
to the goods or
services referred
to in (a) above of
such shared
expenses and
therefore
calculated before
income taxes
(Provided that the
expression "a fair
apportionment"
shall mean
apportioned to the
goods or services
referred to in (a)
above applying the
same principles
and policies as to
apportionment of
costs and expenses
between different
activities of the
Business under the
ownership of the
Purchaser as shall
have been applied
by the Vendor or
CAL in respect of
the different
activities of the
Business prior to
the date of this
Agreement),
all as calculated applying
accounting principles and
policies consistently
applied in respect of the
Business in preparing the
statutory accounts of CAL
prior to the date of this
Agreement, to the extent
applicable to a statement
limited to the matters to
be covered in the above
sub-paragraphs (a) and (b);
and LESS
(c) a due apportionment of the
total administrative head
office costs of the
Guarantor which are not
directly attributable to
any particular business(es)
or company(ies) in the
Purchaser's Group (which
costs shall include without
limitation general public
compliance costs which are
not so directly
attributable and 50% of the
interest charges, up to a
maximum of US Dollars
100,000 for any Deferred
Year, incurred by the
Guarantor relating to the
acquisition of the
Business). The words "due
apportionment" shall mean a
pro rata calculation where
the numerator shall be the
total of the Purchaser's
sales relating to Vehicles
in the relevant Deferred
Year and the denominator
shall be the total sales of
the Purchaser's Group
(including all sales of the
Business) in the relevant
Deferred Year. A deduction
under this sub-paragraph
(c) for the purpose of
calculating Pre-Tax Profit
shall be supported by a
written certificate from
the Guarantor's statutory
auditors certifying in
respect of the Deferred
Year concerned:-
(i) the amount of
the total
administrative
head office costs
of the Guarantor
which are not
directly
attributable to
any particular
business(es) or
company(ies) in
the Purchaser's
Group, and their
main constituents
including public
compliance costs
and interest
charges relating
to the acquisition
of the Business;
and
<PAGE>
(ii) total sales of the
Purchaser relating
to Vehicles and
total sales of the
Purchaser's Group
for the purpose of
calculating the
due apportionment;
"the Property" the freehold property
known as "Site 1" occupied
by the Business at 473
Foleshill Road Coventry
more particularly described
in Part 1 of the First
Schedule;
"the Property Replies" the written replies given
by the Vendor's Solicitors
to enquiries raised by the
Purchaser's solicitors in
respect of the Property,
copies of which are
contained in Document 3.9
in the Agreed Bundle
referred to in the
Disclosure Letter;
"the Properties" the Property, Site 2 and
Site 3;
"the Property Transfer" the transfer of the
freehold interest in the
Property in the Agreed Form
to be entered into on
Completion;
"the Purchaser's KPMG, Birmingham;
Accountants"
"Purchaser's Group" the Guarantor and all
subsidiaries of that
company from time to time;
"Purchaser's Solicitors" Gateley Wareing of Equity
House, 7 Rowchester Court,
Whittall Street, Birmingham
B4 6D;
"the Records" all sales and purchase
records and accounts, lists
of customers and suppliers,
P.A.Y.E. and National
<PAGE>
Insurance records and VAT
returns for the seven years
ending on Completion and
other information documents
and papers of the Vendor or
CAL at the Properties, to
the extent that such are in
existence and in the
possession of the Vendor or
CAL and relate exclusively
to the Business, excluding
the Excluded Records;
"the Excluded Records" financial information and
records maintained by the
Vendor or CAL for central
accounting purposes, which
shall be retained by the
Vendor or CAL, and also
excluding all records
relating to the Excluded
Contracts, Excluded Assets
and the Excluded
Liabilities;
"the Regulations" the Transfer of
Undertakings (Protection of
Employment)Regulations 1981
(as amended);
"Revenue" all fiscal authorities
(national or local) whether
of the United Kingdom or
elsewhere;
"the Sale Assets" the assets comprised in the
Business to be sold and
purchased hereunder as
referred to in Clause 2(1);
"Site 2" the premises or area
known as "Site 2" occupied
by the Business at 256
Foleshill Road, Coventry,
more particularly described
in the Site 2 Lease;
"Site 3" the premises or area
known as "Site 3" occupied
by the Business at 256
Foleshill Road, Coventry,
more particularly described
in the Site 3 Lease;
"Site 2 Lease" the Lease of Site 2 in the
Agreed Form to be entered
<PAGE>
into on Completion between
Trackwell and the
Purchaser;
"Site 3 Lease" the Lease of Site 3 in the
Agreed Form to be entered
into on Completion between
Trackwell and the
Purchaser;
"the Stock" all stock (including but
not limited to all finished
products, CAV 100 vehicles
on hire or loan, work in
progress, samples, raw
materials, fuel and other
consumable stores and
sundry stores) owned (or
purchased subject to
reservation of title) by
the Vendor or CAL and held
as the trading stock of the
Business at the Effective
Time(but excluding, for the
avoidance of doubt,finished
stock owned by third
parties as described in the
Disclosure Letter);
"the Swedish Debts" (a) the total receivables
of (pound sterling)
433,760.42 in respect
of invoice numbers set
out below:-
<TABLE>
<CAPTION>
INVOICE NO. AMOUNT
<S> <C>
825914 (pound sterling ) 52,469.69
824658 (pound sterling ) 86,982.72
825563C (pound sterling )(86,323.76)
(pound sterling ) 53,128.65
825914 (pound sterling )114,659.04
826034 (pound sterling ) 79,075.20
826120 (pound sterling ) 82,452.37
826283 (pound sterling )104,445.16
----------
(pound sterling )433,760.42
</TABLE>
<PAGE>
outstanding in respect of
supplies of helmets, PLUS
(b) any accrued receivable
for, and the entitlement to
and the right to invoice
for, the inflation increase
due under the terms of
supply in respect of the
invoiced prices listed
above (which inflation
increases have been accrued
in the books of the
Business at a total value
of (pound sterling )42,128
though the actual invoiced
value may differ);
"Taxation" all forms of taxation,
duties, levies, imposts,
charges, withholdings,
contributions and rates
whenever created or imposed
and whether of the United
Kingdom or elsewhere
including any penalty fine
or interest which is
incidental to or arises in
respect of any of the above
and including amounts which
represent or are equivalent
to or are deemed to be
taxation;
"Third Party Tooling" tooling and equipment paid
for and owned by customers
of the Business which is in
the possession of the
Vendor or CAL at the
Properties and is used by
the Business for the
purposes of fulfilling
orders for product for
supply to such customers;
"Total Consideration" the total of the
Consideration and the
Deferred Consideration.
"Trackwell" Trackwell Limited a wholly-
owned subsidiary of the
Vendor;
"the Trademarks" the rights as the Vendor
has to use and to transfer
the trademarks or pending
<PAGE>
applications for trademarks
details of which are set
out in the Fifth Schedule;
"VAT" Value Added Tax;
"Vehicle"
(i) any type or
variant or
derivation of
either the CAV 100
or any other
armoured vehicle
as manufactured or
sold by the
Business prior to
the Effective Time
(whether based on
a Land Rover
chassis, Mercedes
chassis or
otherwise); and/or
(ii) any other armoured
vehicle or
component(s)
thereof designed
or manufactured
using any of the
Sale Assets,
which in each case may be
manufactured now or in the
future by or on behalf of
any member of the
Purchaser's Group, and
"Vehicles" shall be
interpreted accordingly;
"the Vendor's Price Waterhouse of York
Accountants" House, York Street,
Manchester, M2 4WS;
"Vendor's Group" the Vendor and all
subsidiaries of that
company from time to time;
"Vendor's Solicitors" Warner Cranston of
Pickfords Wharf, Clink
Street, London SE1 9DG;
"Warranties" the warranties contained or
referred to in Clause 14
and the Seventh Schedule;
<PAGE>
"Working Capital" the aggregate value of the
Stock and the Debts LESS
the Creditors at the
Effective Time, all as
calculated in accordance
with the provisions of
Clause 5; and
"the Working Capital the statement of Working
Statement" Capital of the Business as
as at the Effective Time,
prepared in accordance with
the provisions of Clause 5.
(2) Any reference to any Clause or Schedule (other than to a
schedule to a statutory provision) is a reference to a Clause
of or Schedule to this Agreement and the schedules form part
of and are deemed to be incorporated in this Agreement.
(3) Any reference to a statute or statutory provision includes a
reference to that provision as amended, re-enacted or replaced
from time to time and any former statutory provision replaced
(with or without modification) by the provision referred to.
(4) Any reference to persons includes a reference to firms,
corporations or unincorporated associations.
(5) Any reference to the singular includes a reference to the
plural and vice versa and any reference to the masculine
includes a reference to the feminine.
(6) Any agreement, warranty, representation, indemnity, covenant
or undertaking on the part of two or more persons shall be
deemed to be given or made by such persons jointly and
severally.
(7) Words and expressions defined in the Companies Act 1985 as in
force at the date of this Agreement bear the same respective
meanings in this Agreement.
(8) Headings and titles are used for ease of reference only and
do not affect the interpretation of this Agreement.
<PAGE>
(9) A reference to an SSAP is a reference to a Statement of
Standard Accounting Practice published by the Consultative
Committee of Accounting Bodies of England and Wales.
(10) In interpreting this Agreement the ejusdem generis rule of
construction shall not apply and accordingly general words
introduced by the word "other" shall not be given a
restrictive meaning by reason of the fact that they are
preceded by words indicating a particular class of acts,
matters or things, and general words shall not be given a
restrictive meaning by reason of the fact that they are
followed by particular examples intended to be embraced by the
general words.
(11) If any statement in this Agreement (including the Schedules)
is qualified by the expression "to the best of the Vendor's
information or belief" or "so far as the Vendor is aware" or
any similar expression, that expression shall mean the actual
knowledge of R Haynes and P Hendrick on the basis of having
made reasonable enquiry into the subject matter hereof of
relevant senior managers in central functions in the Vendor,
of the following relevant senior managers in the Business - R
Medwell, M Linton, R Turner, and of Yunus Patel.
2. SALE AND PURCHASE
(1) The Vendor shall with full title guarantee sell and assign or
procure the sale and assignment of and the Purchaser relying
on the Warranties and the other undertakings and covenants of
the Vendor contained herein shall purchase on a going concern
basis with effect from the Effective Time and subject to
matters disclosed in the Disclosure Letter and, in relation to
the Property only, to the encumbrances or other adverse
interests specified in Part 2 of the First Schedule and
otherwise upon the terms and conditions and for the
Consideration hereinafter referred to:-
(a) the Property;
(b) the Equipment;
<PAGE>
(c) the Stock;
(d) the Debts;
(e) the Goodwill;
(f) the Name and the Trademarks;
(g) the Patents;
(h) the Intellectual Property;
(i) the benefit (but subject to the burden) of the
Contracts;
(j) the Records; and
(k) any other asset or rights (including but not limited
to such rights as the Vendor has to use any software
used on computer hardware used exclusively in the
Business) owned by the Vendor or CAL and used
exclusively in the conduct of the Business, always
excluding the Excluded Assets.
(2) Other than the grant of rights of occupation in Site 2 and
Site 3 in accordance with the Site 2 Lease and the Site 3
Lease respectively, the Vendor shall not sell to the Purchaser
and the Purchaser shall not purchase from the Vendor any
tangible or intangible real property, assets or rights of the
Vendor not included in the Sale Assets. Without limiting the
foregoing, there shall not be sold, assigned, transferred or
delivered hereunder any of the Excluded Assets.
(3) The Vendor shall sell or procure the sale of the Property to
the Purchaser on and subject to the terms and conditions
specified in Part 3 of the First Schedule.
(4) All the Equipment shall, for the avoidance of doubt, be at the
risk of the Purchaser from the Effective Time. In the case of
<PAGE>
Equipment situated at Site 2 or Site 3 at the Effective Time,
the dismantling thereof and its removal from Site 2 or Site 3
(as the case may be) and its loading, carriage to and
reinstallation at the Property or any other location, at any
time after the Effective Time, shall be entirely at the risk
of the Purchaser.
3. CONSIDERATION
(1) The consideration to be paid by the Purchaser for the Sale
Assets shall be as follows:-
(a) the Initial Payment which shall be paid by the
Purchaser to the Vendor in full on Completion; and
(b) the Adjustment shall be payable (or repayable) after
Completion (whether by the Vendor or the Purchaser,
as the case may be) in accordance with Clause 5(5).
(2) The Initial Payment as adjusted by the Adjustment shall
represent the separate agreed prices for the respective Sale
Assets as set out in the Eighth Schedule.
(3) The Initial Payment and the Adjustment shall be paid in full
free of any deduction, set-off, withholding or counterclaim
whatsoever.
4. DEFERRED CONSIDERATION
(1) As deferred consideration for the Sale Assets on the basis
stated in the Eighth Schedule, the Purchaser shall pay to the
Vendor deferred consideration equal to 25% of Pre-tax Profit
in each of the Deferred Years which, subject as provided in
any other provision in this Clause 4, shall be paid in four
separate annual installments and shall otherwise be determined
and paid subject to the following provisions of this Clause
4(1) and Clauses 4(2) to (10).
(2) Subject always to Clause 23(3), the Deferred Consideration
shall be interest free.
<PAGE>
(3) Any payment of the Deferred Consideration under this Clause 4
shall be made in full free of any deduction, set-off,
withholding or counterclaim on any account whatsoever by the
Purchaser.
(4) The maximum aggregate Deferred Consideration which may require
to be paid by the Purchaser to the Vendor under Clause 4(1)
shall be (pound sterling )20,000,000.
(5) The Purchaser shall deliver or procure the delivery to the
Vendor not later than 90 days after the end of each Deferred
Year ("the Relevant Deferred Year"), a certificate from the
statutory auditors of the Purchaser certifying to the Vendor
for the purposes of this Clause the amount of Pre-tax Profit
for the Relevant Deferred Year. Payment of the Deferred
Payment in respect of the Relevant Deferred Year shall be made
by the Purchaser to the Vendor by whichever is the earlier of
30 days after issue of such certificate and 120 days after the
end of the Relevant Deferred Year.
(6) Until discharge of the Purchaser's obligations in respect of
the Deferred Consideration the Purchaser and the Guarantor
shall ensure that the Vendor and its authorised
representatives, on reasonable notice and during normal
business hours, shall have full access to, and may examine and
take copies of, all records, books, accounts, correspondence,
agreements or other documents of or relating to the business,
finances and transactions of the Purchaser with respect to the
matters covered within sub-paragraphs (a) and (b) of the
definition of Pre-tax Profits, and the Purchaser and the
Guarantor shall give all reasonable co-operation to the Vendor
or its representatives in connection therewith (subject to
reasonable costs being paid by the Vendor in the event that
the Purchaser provides positive services such as photocopying.
(7) In the event of any dispute between the parties concerning the
amount of the payment to be paid by the Purchaser under Clause
4(1) for any Deferred Year, which cannot be resolved by
whichever is the earlier of 120 days after the end of the
Deferred Year concerned or 30 days after delivery to the
Vendor of the certificate for that Deferred Year under Clause
4(5), the Vendor and/or the Purchaser may immediately refer
the dispute for final determination to an independent
<PAGE>
Chartered Accountant agreed between the parties or in default
of agreement to be appointed by the President for the time
being of the Institute of Chartered Accountants in England and
Wales who shall be instructed to issue his final determination
within 30 days. Such independent accountant shall act as an
expert and not as an arbitrator, and in the absence of
manifest error, his decision shall be final and binding on the
parties. His fees shall be born by the parties in equal
proportions.
(8) The Purchaser shall supply to the Vendor quarterly reports at
the start of January, April, July and October in each
Deferred Year, in such basic detail as the Vendor may
reasonably require, providing the following information:-
(a) an update of orders for supply of Vehicles accepted
by the Purchaser, progress in manufacturing and
supplying those orders and expected deliveries to be
made and sales proceeds to be received by the
purchaser in the following quarter; and
(b) an update as to the Purchaser's efforts, negotiations
and progress in obtaining contracts for the sale for
sales of Vehicles for use in Indonesia and any
material development in the preceding quarter
concerning the negotiation and conclusion of such
contracts and concerning the receipt of payment
thereunder.
(9) The amount of the Deferred Consideration or any amount
thereof for the time being accrued but unpaid together with
any interest due under Clause 23(3) shall become immediately
payable in the event of any of the following events occurring:
(a) a petition being presented (which is not withdrawn
before advertisement) or notice being given of a
resolution for the winding up or liquidation of the
Purchaser except for the purpose of a solvent
reconstruction or amalgamation the terms of which
have previously been approved in writing by the
Vendor such approval not to be unreasonably withheld
or delayed;
<PAGE>
(b) an encumbrancer taking possession or a receiver being
appointed over the whole or any material part of the
undertaking or assets of the Purchaser;
(c) a warrant of distress or execution being levied or
enforced upon or sued out against any material part
of the property or assets of the Purchaser;
(d) the Purchaser being unable to pay its debts within
the meaning of Section 123 of the Insolvency Act
1986; and
(e) the Purchaser ceasing or threatening to cease to
carry on any substantial part of its business, except
as part of a solvent reconstruction or amalgamation
the terms of which have previously been approved in
writing by the Vendor such approval not to be
unreasonably withheld or delayed.
(10) In recognition of the Vendor's rights to the Deferred
Consideration, the Purchaser and the Guarantor hereby
undertake to the Vendor that neither they nor any other member
of the Purchaser's Group will, individually or collectively,
effect, engage in, carry out, authorise or support, directly
or indirectly, any of the following matters or transactions,
other than as required by law or (in relation to sub-clauses
(a) and (b)) in accordance with Clauses 7(4) or 7(5) of this
Agreement, or with the prior written consent of the Vendor,
during the period commencing on the Completion Date and ending
on full discharge by the Purchaser of its payment of the
Deferred Consideration under Clause 4(1):-
(a) any sales, loans, guarantees, payments or any other
transactions with respect to (i) the sale, hire,
leasing or other transfer of rights in or possession
of Vehicles, (ii) the sale or provision of parts or
other goods relating to or for use in, on or in
conjunction with Vehicles and/or (iii) the provision
of repair, maintenance, refitting or other services
in relation to Vehicles, made otherwise than in the
ordinary course of business or otherwise than on
arm's length terms;
<PAGE>
(b) the incurring of costs and expenses to be taken into
account in determining Pre-tax Profit with respect to
(i) the sale, hire, leasing or other transfer of
rights in or possession of Vehicles, (ii) the sale or
provision of parts or other goods relating to or for
use in, on or in conjunction with Vehicles and/or
(iii) the provision of repair, maintenance, refitting
or other services in relation to Vehicles, under or
pursuant to transactions made otherwise than in the
ordinary course of business or otherwise than on
arm's length terms;
(c) the sale, charge (other than as may already be
charged for the purposes of supporting the funding
for the purchase of the Business), nomination or
other disposition by the Guarantor of any of the
shares owned by the Guarantor in the Purchaser or any
interest therein other than for the purposes of a
bona fide reconstruction the terms of which have been
approved by the Vendor, such approval not to be
unreasonably withheld;
(d) except where the costs involved are excluded by the
Purchaser from the calculation of Pre-tax Profit, the
payment of fees or any other remuneration, exceeding
(in any financial year)(pound sterling ) 50,000 in
aggregate in respect of the Purchaser, to or for the
benefit of any Director or shareholder of any member
of the Purchaser or to any of the Guarantor or any
person connected with (within the meaning of section
839 of the Taxes Act) any of such Directors,
shareholders or the Guarantor, provided that this
sub-clause shall not apply to reasonable salary
payments and other reasonable emoluments made in
consideration of bona fide full-time employment for
the Purchaser;
(e) any sale, transfer, lease or other disposition of
title to or possession of the whole, or substantially
the whole, or a material part, of the undertaking
and assets of the Purchaser concerning (i) the sale,
hire, leasing or other transfer of rights in or
possession of Vehicles, (ii) the sale or provision
of parts or other goods relating to or for use in, on
or in conjunction with Vehicles or (iii)the provision
of repair, maintenance, refitting or other services
<PAGE>
in relation to Vehicles, or the entry into any
transaction which is part of a series of
transactions being or to be entered into with the
intention of such a sale, transfer, lease, hire or
other disposition,
Provided that the Vendor shall not unreasonably
withhold its consent to such a sale if the parties
hereto can negotiate terms to reflect the loss or
potential loss by the Vendor of Deferred
Consideration under Clause 4(1), including but not
limited to payment to the Vendor of a part of the
consideration received by the Purchaser on the
proposed sale or appropriate terms for continuation
of the payments based on Pre-tax Profits achieved by
the buyer from the Purchaser over the balance of the
Deferred Years;
(f) the conduct or transaction by any member of the
Purchaser's Group other than the Purchaser of (i) the
sale, hire, leasing or other transfer of rights in or
possession of Vehicles, (ii) the sale or provision of
parts or other goods relating to or for use in, on or
in conjunction with Vehicles and/or (iii) the
provision of repair, maintenance, refitting or other
services in relation to Vehicles;
(g) without prejudice to sub-clause (f) above the
transfer to or conduct or transaction by any member
of the Purchaser's Group other than the Purchaser of
any part of the activities of the Business relating
to Vehicles;
(h) without prejudice to sub-clause (f) above, the
diversion away from the Purchaser of any business,
income, contract or custom relating to (i) the sale,
hire, leasing or other transfer of rights in or
possession of Vehicles, (ii) the sale or provision of
parts or other goods relating to or for use in, on or
in conjunction with Vehicles and/or (iii) the
provision of repair, maintenance, refitting or other
services in relation to Vehicles, by or at the
request or instigation of any of any member of the
Purchaser's Group; and
<PAGE>
(i) any change in the auditors of the Purchaser from the
Purchaser's Auditors other than to another of the
largest 7 accounting firms in the United Kingdom as
at the date of change.
(11) Notwithstanding the definition of Pre-tax Profit, in
calculating Pre-tax Profit there shall, without prejudice to
any other rights of the Vendor under this Agreement, be
disregarded:-
(a) any reduction in the sales of the Purchaser
attributable to business or income in relation to:-
(i) the sale, hire, leasing or other transfer of
rights in or possession of Vehicles,
(ii) the sale or provision of parts or other
goods relating to or for use in, on or in
conjunction with Vehicles and/or
(iii) the provision of repair, maintenance,
refitting or other services in relation
to Vehicles,
having been diverted away from the Purchaser by or at
the request or instigation of any of any member of
the Purchaser's Group;
(b) any reduction in the sales of the Purchaser, or
any increase in any amount to be deducted from
gross sales for the purposes of calculating Pre-
tax Profit, in consequence of any breach by any
member of the Purchaser's Group of any of the
provisions of this Agreement.
5. WORKING CAPITAL
(1) As soon as practicable after the Effective Time the Vendor
shall prepare a draft Working Capital Statement, stating the
Working Capital as at the Effective Time. The Working Capital
Statement shall be prepared, and therefore the Stock, Debts
and Creditors, shall be valued, as follows:-
<PAGE>
(a) applying first the Accounting Policies, and then
(b) in respect of any matter which is not provided for in
the Accounting Policies, applying accounting
principles and practices consistently applied in
respect of the Business in the statutory accounts of
CAL, and then
(c) in respect of any matter which is not provided for in
the Accounting Policies or such accounting policies
and principles consistently applied, applying
generally accepted accounting principles and
practices in the United Kingdom to the extent
applicable to a statement limited to the matters to
be covered by the Working Capital Statement,
Provided always that any items of Stock comprising Vehicles
which were in existence at the Accounts Date and were
accounted for in the Accounts shall be valued in the Working
Capital Statement at the same value as was applied in the
Accounts, excluding any adjustment in value which may be
necessary to reflect any physical loss or damage or
modification to any of such Vehicles since the Accounts Date.
The Purchaser shall promptly give to the Vendor all assistance
and information that the Vendor may reasonably request for the
purposes of preparing the draft Working Capital Statement. The
Working Capital Statement shall include a list of all the
Creditors and Debtors valued in the Statement.
(2) On the next day following Completion Date, the parties shall
jointly carry out a physical stock-take of all the Stock, and
representatives of the Vendor's Accountants and the
Purchaser's Accountants shall be entitled to be present at
such stock-take and participate therein. The results of the
physical stock-take shall be recorded on stock sheets to be
signed by respective representatives of the Vendor and the
Purchaser at the conclusion of the stock-take. In respect of
Stocks not at the Properties, the valuation shall be based on
a physical stock-take where practicable or on stock
certification from the holders or the shippers thereof (as the
<PAGE>
case may be) as at the Effective Time.
(3) The Vendor shall issue the draft Working Capital Statement to
the Purchaser not later than 30 business days after the
Completion Date, together with a reasonable level of
supporting details and schedules reflecting the Vendor's
assumptions and calculations. The Purchaser shall complete its
review of the draft Working Capital Statement and notify the
Vendor of any areas of dispute as soon as practicable
thereafter, and in the event of any such dispute, the parties
shall use all reasonable endeavours to reach agreement
thereon. The draft Working Capital Statement shall be deemed
to have been approved by the Purchaser if the Purchaser fails
to notify the Vendor in writing of any objection to its
contents within 15 business days of their receipt from the
Vendor.
(4) In the event that any objection notified by the Purchaser has
not been resolved within 10 business days of the notification
of such objection, either the Vendor or the Purchaser may
immediately refer the dispute for final determination to an
independent Chartered Accountant agreed between the parties or
in default of agreement to be appointed by the President for
the time being of the Institute of Chartered Accountants in
England and Wales who shall be instructed to issue his final
determination within 30 days. Such independent accountant
shall act as an expert and not as an arbitrator, and in the
absence of manifest error, his decision shall be final and
binding on the parties. His fees shall be borne by the parties
in equal proportions.
(5) To the extent the Working Capital (as finally agreed or
determined hereunder) shall be greater or less than
(pound sterling) 2,244,000, the Purchaser shall pay to the
Vendor, or the Vendor shall repay to the Purchaser(as the case
may be) the Adjustment, within 10 business days of the Working
Capital Statement being approved or agreed between the parties
or the independent accountant issuing his final determination
under Clause 5(4).
6. THE CONTRACTS
(1) The Purchaser shall as from the Effective Time perform and
<PAGE>
fulfil all the Contracts save that where any Contract contains
a prohibition on assignment or requires the written consent of
any other contracting party for the satisfaction of any
requirement or condition for its assignment or novation then
this Agreement shall not operate so as to transfer the benefit
of such agreement or any rights thereunder and in that event:-
(a) the Vendor and the Purchaser shall use their
respective reasonable endeavours to procure such an
assignment or novation;
(b) unless and until any such Contract is assigned or
novated the Purchaser shall as the Vendor's agent
perform and discharge all liabilities and obligations
arising under such Contract at the risk and cost of
the Purchaser;
(c) the Purchaser shall reimburse to the Vendor any costs
and expenses incurred by the Companies after the
Completion Date in connection with the performance or
discharge of any Contract by the Companies and shall
on behalf of the Vendor discharge any liabilities in
each case arising as a result of such performance and
discharge by the Purchaser on behalf of the Vendor
and shall provide all reasonable facilities and
assistance to the Vendor free of charge for such
purpose; and
(d) unless and until any such Contract is assigned or
novated the Vendor shall hold the benefit of the same
on trust for the Purchaser absolutely and the Vendor
shall exercise its rights in respect of such
agreement as the Purchaser may reasonably direct or
approve and not otherwise and shall account to the
Purchaser for all sums received thereunder and shall
to the extent permitted under the terms thereof be
deemed to have granted the Purchaser a licence free
of charge to exercise all rights of the Vendor
thereunder.
(2) The Purchaser shall indemnify and keep indemnified the Vendor
against all costs claims expenses and liabilities which may
arise in connection with the Contracts after the Effective
Time, except to the extent that any of the same shall have
<PAGE>
arisen out of any breach of any of the Contracts by the Vendor
or CAL at or before the Effective Time where and to the extent
that liability in respect of such breach is not included as a
Creditor in the Working Capital Statement.
(3) Notwithstanding the provisions of Clause 6(1) the Purchaser
shall when required so to do by the Vendor at the Purchaser's
own expense (but not so that the Purchaser shall be obliged to
the Vendor to pay any fee or incur any cost or provide or
procure the provision of any security or guarantee to any
person with whom the Vendor has entered into any Contracts)
enter into agreements for novation with the Vendor and the
persons with whom the Vendor has entered into such Contracts
whereby:-
(a) the Purchaser undertakes with such persons to perform
such Contracts and to be bound by the terms thereof
in every way as if the Purchaser was from the date of
such novation party thereto in lieu of the Vendor;
(b) such persons release and discharge the Vendor from
all claims and demands whatsoever in respect thereof
save for the liability for any breaches prior to the
Effective Date and which are not being assumed by the
Purchaser hereunder; and
(c) such persons accept the obligations of the Purchaser
in every way as if the Purchaser was named in such
Contracts as party thereto in place of the Vendor and
until such novation the Purchaser shall indemnify and
keep indemnified the Vendor against any losses costs
damages or liabilities under or arising from the
Contracts.
(4) The Vendor shall close out all forward foreign exchange
contracts and arrangements entered into and arranged by the
Courtaulds Group Treasury Department relating to the Business
that are outstanding at the Completion Date, and any profit or
loss resulting therefrom will be for the account of the
Purchaser. The Vendor shall promptly account to the Purchaser
for the amount of any such profit, and the Purchaser shall
promptly account to the Vendor for the amount of any such
loss, in respect of such contracts once closed. The Vendor
<PAGE>
shall at the request of the Purchaser and on its behalf open
new foreign exchange contracts with a major UK clearing bank
to be nominated by the Purchaser in the same currencies and
amounts and for the same maturity dates as the original
contracts and arrangements which have been closed out pursuant
to this clause.
(5) Without prejudice to the foregoing provisions of this Clause
6, the Purchaser shall (so far and to the extent that the same
shall constitute legally binding obligations on the part of
the Vendor, or any member of the Vendor's Group, at the date
of this Agreement) observe and fulfill the provisions of the
Exhibit contained in Document 6.94 in the Agreed Bundle
referred to in the Disclosure Letter, and shall indemnify and
keep the Vendor and CAL indemnified against any losses,
damages, charges or expenses whatsoever which to the extent
aforesaid may arise from any breach by any member of the
Purchaser's Group of the terms of that Exhibit after the
Effective Time.
(6) *
- ---------------------------------
* Material omitted pursuant to request for confidential treatment and filed
separately.
<PAGE>
(7) For the purposes of this Agreement including without
limitation this Clause 6, but without prejudice to any other
provision of this Agreement, any sale or purchase commitment
or agreement recorded in the books of the Business as a
contractual commitment owed by the Business to another
operation or business of the Vendor or CAL (or vice-versa)
shall be treated as a legally binding obligation even though
the Business and such other operation or business may not be
separate legal entities.
(8) On Completion, the Purchaser will deliver to the Vendor a
guarantee (or similar document) in the Agreed Form issued in
favour of the Vendor or its Bankers by a major UK clearing
bank, in a form reasonably acceptable to the Vendor,
indemnifying the Vendor and/or CAL fully against any liability
arising in respect of the performance bond outstanding at
Completion in relation to the Business and contained in
Document 6.85 in the Agreed Bundle.
7. DEBTORS, CREDITORS AND ASSUMED LIABILITIES
(1) The Debts shall be included in the sale and purchase hereby
agreed. In the event the Vendor or CAL receives payment of any
of the Debts after the Effective Time it will forthwith
account to the Purchaser (by forwarding the cheque or making
payment as appropriate) for the payment received.
(2) The Purchaser shall after the Effective Time assume, pay and
discharge all the Creditors (including for the avoidance of
doubt Intra-Group Creditors), and shall pay each amount owing
to Creditors within the normal payment period operated by the
Business for the Creditor concerned as operated in the
ordinary course of the Business prior to the Effective Time,
provided that a payment to a Creditor may be delayed or
reduced for so long and to the extent only that such payment
<PAGE>
or discharge is the subject of a bona fide dispute with the
Creditor. The Purchaser shall render the Vendor a written
report at the start of each month after the Effective Time
setting out the details of all sums paid out in respect of
Creditors in the preceding month. The Purchaser's undertaking
to pay, satisfy and discharge the Creditors under this Clause
7(2) shall apply in respect of the actual liability in respect
of any Creditor listed and valued in the Working Capital
Statement, whether the actual liability is greater or less
than the amount stated, valued or provided for in the Working
Capital Statement. However the Purchaser's obligation to pay,
satisfy and discharge the Creditors under this Clause 7(2)
shall not apply in respect of, and the Purchaser shall not be
liable to pay, any Creditor which shall not have been listed
and valued in the Working Capital Statement.
(3) In the event of any failure by the Purchaser to pay any
Creditor in full in accordance with Clause 7(2), and in any
event if all the Creditors (save for those (and only for so
long as they are) the subject of a dispute referred to in
Clause 7(2)) have not been discharged in full within 70 days
after the Effective Time for items purchased on open terms or
within the stated payment periods for Letters of Credit, the
Vendor shall be entitled as agent for the Purchaser, and
subject to giving the Purchaser at least 3 business days prior
written notice thereof before doing so, to discharge any
outstanding Creditors at such time. Without prejudice to any
other provision of this Agreement, the Purchaser shall
immediately repay to the Vendor any sum so paid on its behalf.
(4) The following provisions shall apply to claims in respect of
defective goods or services supplied by the Vendor or CAL in
the course of the Business at or prior to the Effective Time,
excluding claims which are the subject of Clause 7(5):-
(a) the Purchaser shall, upon the request of the Vendor
or CAL, give reasonable assistance to the Vendor or
CAL, at the Vendor's or CAL's cost but limited to the
Purchaser's reasonable actual costs (where the term
"costs" in this sub-clause (a) means the cost of all
materials, direct labour and manufacturing
overheads, excluding administration, sales and
<PAGE>
marketing and research and development expenses)
of providing such assistance, in the handling and/or
settlement by it of claims by customers in respect of
defective goods or services supplied by the Vendor
or CAL in the course of the Business at or prior
to the Effective Time Provided that such limitation
to the Purchaser's reasonable actual costs (as
defined above) shall not apply to the extent that the
actual costs incurred by the Purchaser in dealing
with such claims by customers in respect of past
supplies in the course of the Business shall exceed
(pound sterling )75,000 in aggregate. In that event,
and in respect of the excess over (pound sterling)
75,000, the Purchaser may charge a profit margin of
10% in addition to its reasonable actual costs
referred to above. The Vendor will pay any costs due
under this clause within 20 days of receipt of the
Purchaser's invoice;
(b) any work performed by the Purchaser for the Vendor or
CAL under this Clause 7(4) shall be as the Vendor's
or CAL's sub-contractor;
(c) (i) the Purchaser shall notify the Vendor as
soon as it receives any claim or notice from
a customer alleging defective supply by the
Vendor or CAL at or prior to the Effective
Time ("a Customer Claim") in the course of
the Business and the parties shall consult
with each other as to how to deal with such
claim or notice. The Vendor shall have
conduct of the defence or any proceedings
or claims or complaints from any customers
alleging defective supply by the Vendor or
CAL at or prior to the Effective Time, and
the Purchaser shall not make any admission
of liability or settle or compromise any
such claim or complaint without the prior
written consent of the Vendor;
(ii) if the Vendor and/or CAL indemnify and
secure the Purchaser to its reasonable
satisfaction against any losses, fines,
penalties, interest charges, costs and
expenses the Purchaser shall take such
action as the Vendor and/or CAL may
reasonably request to avoid, dispute,
resist, appeal, compromise or defend a
<PAGE>
Customer Claim.
(d) the Purchaser shall have no liability, and the
Vendor shall indemnify the Purchaser and keep the
Purchaser indemnified, in respect of any claims the
subject of this Clause 7(4) in respect of defective
goods or services supplied in the course of the
Business at or prior to the Effective Time, except
that neither CAL nor the Vendor shall have any
liabilities to the Purchaser in respect of such
claims, and accordingly the Purchaser shall indemnify
the Vendor and CAL in respect of any such claims,
after whichever is the later, in respect of any
particular claim, of the end of the express
contractual warranty period in relation to the supply
concerned and the first anniversary of the Effective
Time save in respect of any claim notified to the
Vendor by the Purchaser in accordance with this
Agreement or by the customer concerned prior to the
relevant earliest date.
(5) Without prejudice to Clause 7(4), the Purchaser shall provide
the following assistance as the Vendor's or CAL's
sub-contractor for the purpose of remedying defects in the CAV
100 Vehicles supplied to the MOD for use in Northern Ireland:-
(a) the Purchaser shall on the Vendor's or CAL's request
carry out stripping, reworking and refitting work in
order to correct the existing rust problem on the
residual CAV 100 Vehicles which have yet to be
subject to this repair work, and shall ensure that
suitably qualified personnel from the Business are
made available to the Vendor or CAL for this purpose;
(b) this work by the Purchaser shall be provided in
accordance with the quality and other requirements to
which the Vendor or CAL are subject, as disclosed in
Document 6.118 in the Agreed Bundle referred to in
the Disclosure Letter;
(c) in payment for its work under Clause 7(5)(a), CAL or
the Vendor shall pay to the Purchaser a sum
representing the aggregate of the direct labour or
<PAGE>
sub-contracting cost to the Purchaser reasonably
incurred in relation to the work and the cost of any
reasonable disbursements and necessary raw materials
plus a sum equal to 7.5% of such sums and the Vendor
shall keep the Purchaser wholly indemnified in
respect of the same;
(d) the Purchaser shall at all times comply with all
reasonable requests by CAL or its insurers concerning
the timing, nature or any other aspect of the
rectification work; and
(e) the Purchaser shall notify the Vendor with basic
details as soon as practicable of any claim received
after Completion for repairs covered by this Clause.
(6) The following provisions shall apply in respect of
the subject matter of Clause 7(5):-
(a) the Purchaser shall carry out the stripping,
re-working and/or refitting work concerned at the
lowest reasonably available cost at the time, with
respect (and without limitation) to the amount of
direct manufacturing overhead, labour cost,
disbursements and raw materials required to completed
the work;
(b) the Purchaser shall, in respect of any work carried
out, keep and maintain a full and accurate written
record, consistent with existing established work
practices as operated by the Vendor or CAL, of work
done, and shall for this purpose keep copies of any
relevant correspondence, invoices and other records
reasonably necessary to establish in detail the work
done;
(c) the Purchaser shall on request from the Vendor or CAL
provide copies of any of such records and
documentation referred to in sub-clause (b) and on
the Vendor's request provide all reasonable
co-operation to the Vendor's or CAL's insurers and
<PAGE>
their representatives in respect of any claim being
made by the Vendor or CAL in respect of the work
done, which shall include without limitation
providing to such insurers or their representatives
copies of, and reasonable access to inspect, such
records and documentation.
(7) Without prejudice to Clauses 6(2) and 7(2) to 7(4), the
Purchaser shall assume pay and discharge all the Assumed
Liabilities and shall indemnify and hold harmless the Vendor
fully at all times for and against all actions, proceedings,
costs, claims, demands or liabilities whatsoever arising out
of or in connection therewith.
(8) For the purposes of this Agreement including without limitation
Clause 5:-
(a) those amounts treated in the books of the Business as
trade or other debts owed by the Business to another
operation or business of the Vendor or CAL shall be
deemed to be actual debts, and therefore Creditors,
even though the Business and each such other business
or operation within the Vendor are not separate legal
entities;
(b) all amounts treated in the books of the Business as
trade or other debts owed to the Business by another
operation or business of the Vendor or CAL shall be
deemed to be actual debts, and therefore Debts, even
though the Business and each such other business or
operation are not separate legal entities.
(9) Accrued VAT liability of the Business due to H.M. Customs &
Excise in respect of the period to the Effective Time shall
not be included in the Working Capital Statement and shall be
the liability of the Vendor, and any accrued VAT refund due to
the Business from H.M. Customs & Excise in respect of the
period to the Effective Time shall not be included in the
Working Statement and shall be for the benefit of the Vendor.
The terms of Clause 5 and the definitions of Creditors and
Debts shall be subject to this Clause 7(9).
(10) Any accrued liability of the Business in respect of the
<PAGE>
rectification work referred to in Clause 7(5) shall not be
included in the Working Capital Statement and shall be the
liability of the Vendor, and any accrued receivable concerning
sums due from the Vendor's or CAL's insurers in relation to
such work shall not be included in the Working Statement and
shall be for the benefit of the Vendor or CAL. The terms of
Clause 5 and the definitions of Creditors and Debts shall be
subject to this Clause 7(9).
7A SWEDISH DEBTS
(1) The Swedish Debts are expressly excluded from the sale and
purchase hereunder. The Vendor and the Purchaser however
accept the following provisions in relation to the Swedish
Debts:-
(a) the Purchaser shall as agent for the Vendor use all
reasonable endeavours to collect the Swedish Debts
promptly as soon as practicable following the
Effective Time in a manner consistent with the manner
and level of diligence used in collection of such
debts by the Vendor in the ordinary course of the
Business prior to the Effective Time;
(b) all proceeds of the Swedish Debts collected by the
Purchaser shall belong to the Vendor and shall (if
not received in the account referred to below) be
paid by the Purchaser to the Vendor forthwith on
receipt (by forwarding the cheque received or making
payment as appropriate).
The current arrangement, where payments from Swedish
FMV are paid into a Swedish bank account maintained
by the Vendor or CAL, shall be retained for receipt
of the proceeds of the Swedish Debts. The Vendor
shall make arrangements that the Vendor and the
Purchaser will be notified forthwith when any
proceeds of the Swedish Debts are received in that
account and for the appropriate commission payments
to be made out of such proceeds to Akers Krutbruk as
required under the relevant Contract;
(c) the Purchaser shall co-operate regarding invoicing of
<PAGE>
the inflation adjustments referred to in the
definition of the Swedish Debts on or as close as
practicable to the dates when such adjustments are
due to be made . If requested by the Vendor the
Purchaser shall invoice (on the due dates) such
amounts in its own name but on behalf of the Vendor,
and in such event the terms of this Clause 7A shall
apply mutatis mutandis to the collection of such
invoices;
(d) the Purchaser shall not without the prior written
consent of the Vendor effect or agree any assignment,
settlement, compromise, variation or release
whatsoever of any entitlement or claim or proceedings
in respect of any of the Swedish Debts
*
- ---------------------------------
* Material omitted pursuant to request for confidential treatment and filed
separately.
<PAGE>
7B ELECTRICAL WORKS
(1) In respect of the Specified Works, the Purchaser shall consult
with the Vendor in relation thereto and shall comply with all
reasonable requests of the Vendor in order to minimise the
costs thereof. In particular, the Purchaser shall obtain not
less than two competitive quotations in relation to the costs
for completion of the Specified Works from contractors of
<PAGE>
repute and shall submit the same to the Vendor (to Mr Rodney
Haynes or equivalent) for its consideration. After 5 days of
submission to the Vendor of the quotes, the Purchaser shall
contract with such supplier as the Purchaser reasonably
considers appropriate to commence the works.
(2) Upon completion of the Specified Works to the reasonable
satisfaction of the Purchaser, the Purchaser shall determine
the aggregate Costs incurred by the Purchaser in relation
thereto Subject to receipt of reasonable evidence of the Costs
incurred and of any necessary invoice from the Purchaser, the
Vendor shall within 20 days reimburse the Costs to the
Purchaser subject to a maximum reimbursement of
(pound sterling )150,000.
(3) For the purposes of this Clause 7B, the following expressions
shall have the meanings set opposite them:-
"Costs" all costs and expenses
invoiced at any time to
the Purchaser by the
chosen contractor(s) in
respect of the carrying
out of the Specified
Works;
"the Specified Works" the works required to be
completed in respect of
Site 1, described in the
Document 3.11 in the
Agreed Bundle
8. EMPLOYEES
(1) The Vendor and the Purchaser hereby agree and acknowledge that
the contracts of employment of each of the Employees shall not
be terminated but shall continue to have effect as if
originally made between each such Employee and the Purchaser
in accordance with and save as may be otherwise provided by
the Regulations.
(2) The Purchaser shall provide to the Vendor such information
within its actual possession at such times as the Vendor shall
request so as to enable the Vendor to carry out its duties
<PAGE>
under and to enable full and proper consultation to take place
in accordance with the requirements of the Regulations and to
carry out the Consultation Plan. The Vendor and the Purchaser
shall comply in all material respects with the provisions in
the Consultation Plan relating to the information to be
provided or matters to be done by it hereunder.
(3) The Purchaser has not made and will not without the specific
prior written consent of the Vendor make between the date
hereof and the Completion Date, directly or indirectly, any
representations or statements (whether oral, written or
otherwise) to or about any of the Employees in any way
connected with or concerning the sale and purchase of the
Business or employment with the Vendor or the Purchaser.
(4) The Purchaser and the Companies will not between the date
hereof and the Completion Date do any act, the result of which
is reasonably likely to result in industrial action by or a
dispute with all or any of the Employees, or in litigation
against the Vendor or the Purchaser by all or any of the
Employees, or any trade union or staff association
representing them Provided that the Purchaser shall not be
liable under this Clause 8(4) or any other provision of this
Clause 8 in relation to any acts or omissions by it which are
in accordance with the requirements placed upon it under the
Consultation Plan. The Companies shall not without the prior
written consent of the Purchaser, make between the date hereof
and the Completion Date, directly or indirectly, any
representations or statements (whether oral, written or
otherwise) to or about any of the Employees in any way
connected with or concerning the sale and purchase of the
Business or employment with the Purchaser, other than in each
case substantially in accordance with the provisions of the
Consultation Plan or with the requirements affecting it under
Regulation 10 of the Regulations
(5) The Purchaser shall indemnify the Vendor and keep it
indemnified against all liabilities, claims, proceedings,
damages, costs and expenses (including legal costs) incurred
by the Vendor in relation to the Employees which arises from
any breach by the Purchaser of the terms of Clause 8(2), 8(3)
or 8(4) or which may arise out of or in connection with any
claim for breach of a legal duty or obligation (contractual,
<PAGE>
statutory or otherwise and including but not limited to any
claims for a protective award) arising from any action or
omission of the Purchaser on or after the Effective Time in
respect of the Employees or any other employee of the
Business. This indemnity shall include without limitation the
liability in respect of the 10 redundancies referred to in
Section B12.10 of the Disclosure Letter.
(6) The Vendor shall indemnify the Purchaser and keep it
indemnified against all liabilities, claims, proceedings,
damages, costs and expenses (including legal costs) incurred
by the Purchaser in relation to the Employees or any other
employee of the Business (not being an Employee) which may
arise out of or in connection with any claim for breach of a
legal duty or obligation (contractual, statutory or otherwise
and including any claim for a protective award) in respect of
the Employees arising from any action or omission of the
Vendor prior to the Effective Time.
(7) If any contract of employment of any person other than an
Employee has effect or is alleged to have effect as if
originally made between the Purchaser and any such employee by
operation of the provisions of Regulations 5 or 6 of the
Regulations in relation to the sale and purchase hereunder:-
(a) the Purchaser shall upon becoming aware of the actual
or alleged application of such Regulation 5 or 6 to
any such contract inform the Vendor;
(b) the Vendor and the Purchaser shall consult in good
faith as to the appropriate steps to be taken in
relation to such contract; and
(c) if, within 30 days of notification to the Vendor
under (a) above, the Vendor and the Purchaser fail to
reach agreement as to the steps to be taken, the
Vendor may offer to re-employ the relevant employee
(in which case the Vendor shall indemnify the
Purchaser against all or any claims, demands, costs
or liabilities incurred by or made against the
Purchaser (if any) by or on behalf of such employee)
<PAGE>
but, failing such offer within a further 14 days,
the Purchaser may terminate the relevant contract
(if any) and the Vendor shall indemnify the Purchaser
against all costs, claims, demands and liabilities
arising out of such termination or which would not
have been incurred but for such employment.
(8) The Purchaser undertakes to the Vendor, directly and for the
benefit of each of the Employees, that the Purchaser shall, in
respect of any Employee who may be dismissed by the Purchaser
(or any company associated with the Purchaser) by reason of
redundancy in the period between the Completion Date and 31
December 1998, comply with the redundancy terms practised by
the Vendor as described in Document 12.5 in the Agreed Bundle
as if those terms were contractual and binding upon the
Purchaser (or such associated company) as the employer of the
Employee(s) concerned. Should the Purchaser default in its
obligation under this Clause 8(8), and the Vendor, at its
discretion, decides to pay any or all of the above entitlement
to any of the employees concerned made redundant by the
Purchaser, the Purchaser shall pay the amount concerned to the
Vendor in full.
(9) The Vendor shall pay and otherwise indemnify the Purchaser
in respect of all payments (both contractual, statutory and
under Courtaulds' terms), including any payments in respect of
unfair dismissal but always excluding wages or salary and
associated costs up to date of termination, which may be
incurred by the Purchaser in the case of the redundancy of
either Janice Alger or Shirley Balder, whichever shall be the
case, on 31 May 1998. The parties have agreed that the
aforementioned redundancy shall be handled by the staff of the
Vendor on behalf of the Purchaser, and all communications with
and payments to the individual concerned relating to the
redundancy shall be at the direction of the Vendor
9. PENSIONS
The Vendor and the Purchaser agree to perform the provisions of the
Ninth Schedule relating to pensions.
<PAGE>
10. PROPERTY
The Vendor and the Purchaser agree to perform the provisions of Parts
2 and 3 of the First Schedule relating to the Property.
11. COMPLETION
(1) Completion shall take place at the offices of the Vendor's
Solicitors at 11 am on 24 April 1998 (or such other time as
may be agreed in writing between the parties) when the events
set out in the following provisions of this Clause 11 shall
take place.
(2) The Vendor shall effect delivery to the Purchaser on the
Effective Time of those Sale Assets capable of being
transferred by delivery and of the Third Party Tooling, which
delivery shall be deemed to take place at the premises where
they are being used or stored.
(3) The Vendor shall:-
(a) with effect from the Effective Time convey assign or
otherwise vest in the Purchaser benefit and title to
such of the Sale Assets as are not capable of being
transferred by delivery and deliver to the Purchaser
possession of and title to all the other Sale Assets
transferable by delivery;
(b) procure that CAL shall enter into and deliver to the
Purchaser the Property Transfer and deliver to the
Purchaser all documents and/or deeds of title
relating to the Sale Assets in the Vendor's
possession, provided that any such documents and/or
deeds of title as are situated at the Properties
shall be delivered to the Purchaser where they are
situated.
(4) The Vendor shall procure that Trackwell shall and the
Purchaser shall enter into the Site 2 Lease and the Site 3
Lease.
<PAGE>
(5) The Purchaser shall:-
(a) pay the Initial Payment to the Vendor by telegraphic
transfer to the Vendor's bank account at Barclays
Bank plc, 54 Lombard Street, London ECP3 3AH, sort
code 20-00-00T, Account number 8031 2339; and
(b) deliver to the Vendor duly executed guarantee and/or
other financial bond or instrument required pursuant
to Clause 6(5).
12. CONDUCT OF BUSINESS PENDING COMPLETION
(1) The Companies covenant and agree that, from and after the date
of this Agreement and until the Completion, except as
otherwise specifically consented to or approved by Purchaser
in writing or as may be provided for in this Agreement or be
reasonably necessary to give effect to any provision of this
Agreement or be a natural consequence of the operation of the
terms of this Agreement:-
(a) the Vendor or CAL (as the case may be) shall carry on
the Business in all material respects in the ordinary
course of business as the Business has previously
been carried on;
(b) the Companies shall not grant any general or uniform
or individual increase in the rates of pay of the
Employees, nor grant any material general or uniform
or individual increase in the benefits under any
bonus or pension plan or other contract or commitment
with respect to any Employee;
(c) the Companies shall not enter into any material
contract or commitment or engage in any material
transaction outside the ordinary course of the
Business as previously carried on;
(d) other than pursuant to this Agreement, the Companies
shall not sell or otherwise dispose of any capital
asset used in the Business (excluding any of the
<PAGE>
Excluded Assets) other than in the ordinary course of
business;
(e) the Companies shall maintain the current insurances
held in respect of the Business;
(f) the Companies shall not enter into any material
transaction or commitment with respect to the
Business with any person connected with (within the
meaning of section 839 of the Taxes Act) the Vendor
or any other member of the Vendor's Group or any
director or officer of the Vendor or any other member
of the Vendor's Group, other than trading among or
with members of the Vendor's Group entered into in
the ordinary course of business consistent with past
practice.
13. RECORDS
(1) The Vendor or CAL shall on the Completion Date deliver the
Records to the Purchaser and if any of the same are not in the
possession of the Vendor deliver a letter specifying their
whereabouts and authorising the Purchaser to take possession
of the same and the Purchaser shall thenceforth be entitled to
custody and use thereof for the purposes of carrying out the
Business.
(2) The Vendor and CAL shall each at all reasonable times and on
reasonable notice (wherever practicable) have free access to
the Records as it shall require for taxation and accounting
and other reasonable purposes but relating only to periods up
to the close of business on the Effective Time.
(3) The Purchaser shall at all reasonable times and on reasonable
notice (wherever practicable) have free access to the Excluded
Records that it shall require for taxation, accounting and
other reasonable purposes relating to the conduct of the
Business after to the Effective Time.
(4) The Purchaser shall procure that personnel of the Purchaser
reasonably required by the Vendor or CAL shall provide to the
<PAGE>
Vendor or CAL free of charge such information and assistance
as the Vendor or CAL may reasonably request in connection with
the preparation of the Vendor's or CAL's accounts for the year
1997/98 in accordance with the Vendor's reporting requirements
and timetables, and in connection with the Vendor's tax
returns in respect of the Business in relation to any period
up to the Effective Time.
(5) The Purchaser hereby agrees not to destroy such of the Records
as are required to be kept pursuant to statute until the
expiry of the period prescribed by statute.
(6) On the Vendor's request, the Purchaser shall supply to the
Vendor an internal Courtaulds Group VAT return in the Vendor's
normal form in respect of the period from the close of the
last relevant VAT period to the Effective Time.
14. WARRANTIES AND LIABILITY LIMITATIONS
(1) The Vendor hereby warrants to the Purchaser that, subject only
as and to the extent disclosed, reserved or qualified in the
Disclosure Letter or expressly reserved or qualified in this
Agreement, each of the Warranties is at the time of execution
of this Agreement true and accurate.
(2) Each of the Warranties is separate and independent.
(3) The Vendor shall be under no liability in respect of any
breach of the Warranties unless the Vendor shall have been
given written notice by the Purchaser of the breach concerned
prior to 30 June 1999 with respect to breach of any Warranty
other than relating to Taxation and the seventh anniversary of
Completion with respect to breach of any Warranty relating to
Taxation.
(4) The aggregate liability of the Vendor in respect of all claims
under this Agreement shall not in any event exceed the
Consideration.
(5) The liability of the Vendor or CAL in respect of any claim or
claims under this Agreement other than claims under Clauses 7,
7A, 7B 8(9), 16(3) or any claims relating to Asbestos as
referred to in Clause 16(1):-
<PAGE>
(i) shall not arise in respect of any individual claim in
respect of which the amount to which the Purchaser
would otherwise be entitled is less than (pound
sterling )7,500; and
(ii) shall not arise except to the extent that the amount
of all claims thereunder when aggregated (or which
would have been made but for the operation of this
Clause 13(5)) exceeds (pound sterling )55,000 in
which case all such claims and not just the excess
may be claimed.
(6) The Purchaser shall reimburse to the Vendor an amount equal to
any sum paid by the Vendor under any of the Warranties which
is subsequently recovered by or paid to the Purchaser by any
third party less any reasonable costs and expenses incurred by
the Purchaser in obtaining payment of that sum.
(7) The limitations on liability contained in Clauses 14(3),14(4),
14(5), 14(6) shall not apply in the case of fraud.
(8) The Purchaser shall have no claim under this Agreement:-
(a) (save in respect of Clause 7, 7A and 7B) unless and
then only to the extent that particulars of the
claim, specifying the matter giving rise to the claim
and giving such adequate information to identify the
claim as are in the Purchaser's possession and is
reasonable for the Purchaser to provide, has been
given to the Vendor as soon as reasonably practicable
and in any event within 40 business days of the
Purchaser becoming aware of the matter giving rise to
the claim;
(b) to the extent that the matter giving rise to a claim
is the subject of a claim under some other provision
of this Agreement and such claim has been satisfied
in the same or a greater amount;
(c) in respect of any matter or liability to the extent
that a specific provision, allowance or reserve in
respect thereof is made in the Working Capital
<PAGE>
Statement and that provision, allowance or reserve is
taken into account in reducing the Working Capital;
(d) in respect of any breach of the Warranties of which
the Purchaser or the Guarantor had actual knowledge
at Completion sufficient to understand the basic
nature and scope of the breach;
(e) to the extent that such liability would not have
arisen but for:-
(i) a change in or coming into force of any
legislation or government or governmental
order or rule after the date of this
Agreement;
(ii) any voluntary act, omission, transaction or
arrangement after the Effective Time of the
Purchaser or any person connected with the
Purchaser (applying for this purpose Section
533 of the Taxes Act to determine whether
any person is connected with another)
otherwise than in the ordinary course of
business of the Business as presently
carried on; or
(iii) any claim, election, surrender or disclaimer
made or notice or consent given or any other
thing done after Completion by the Purchaser
or by any person connected with the
Purchaser under the provisions of any
enactment or regulation relating to
Taxation.
(9) Notwithstanding anything to the contrary in this Agreement,
neither the Vendor or CAL shall have any liability to the
Purchaser or the Guarantor hereunder in relation to any
Environmental Liabilities save to the extent that such
liability arises in respect of the Warranties set out in
Paragraphs 15.1 to 15.4 of the Warranties.
(10) No Warranties shall apply to the Properties other than
Paragraphs 3.1 to 3.4 (inclusive) of the Warranties.
<PAGE>
(11) If the Purchaser shall be in receipt of any claim, or any fact
or circumstance comes to the notice of the Purchaser, which
may constitute or give rise to a liability of the Vendor
pursuant to any of the Warranties or under any indemnity or
other provision of this Agreement, the Purchaser shall
forthwith notify the Vendor in accordance with Clause 14(7)(a)
and shall not make any admission of liability or settle or
comprise any such claim and (subject to being indemnified
under the terms of this Agreement or, in the absence of such
any indemnity in the circumstances concerned, to being
indemnified to its reasonable satisfaction against all costs
and expenses incurred or which it may incur) shall:-
(a) inform and keep the Vendor and CAL informed in
respect of such claim and provide reasonable access
at reasonable times to all relevant accounts,
documents and records within its power, possession or
control to enable the Vendor or CAL and its
professional advisers to examine such claim and to
take copies thereof;
(b) take such action as the Vendor or CAL or its
solicitor may reasonably request including attending
any hearing to give evidence of fact and belief to
avoid, dispute, resist, appeal, compromise or defend
any such claim, including (without limitation)
affording the Vendor or CAL care and control of any
discussions, negotiations or legal proceedings
relating to the same if it so requires; and
(c) if so required by the Vendor in writing within 7 days
following their being notified as provided in this
Clause 13(10) retain solicitors chosen by the Vendor
to proceed on behalf of the Purchaser in accordance
with the reasonable instructions of the Vendor as
provided in sub-clause (a) above and give to such
solicitors all and every assistance and information
as they may reasonably require.
(12) The amount of any successful claim against the Vendor or CAL
under the Warranties or for breach of this Agreement shall be
deemed to constitute a reduction in the Consideration.
<PAGE>
(13) Where a breach of the Warranties or a claim under any
indemnity by the Vendor under this Agreement shall be in
respect of a matter where the Purchaser shall be insured
against any loss or damage arising from it the Purchaser shall
not make any claim against the Vendor for breach of any such
Warranty or under such indemnity without first making a claim
(which the Purchaser shall use reasonable endeavours to
expedite) against its insurers for compensation for the loss
or damage suffered. Any sum received by the Purchaser from
such insurers in relation to such breach or claim (less the
Purchaser's out-of-pocket expenses in making the claim and
less reasonable compensation to the Purchaser for the
increased premium cost (if any) to the Purchaser arising from
making the claim) shall pro tanto reduce the Vendor's
liability to the Purchaser thereunder, or if subsequently
received, be repaid to the Vendor up to the amount paid by the
Vendor in respect of such breach or claim. For the avoidance
of doubt this Clause 14(12) shall not prevent the Purchaser
from making a claim under the Warranties in relation to a
matter which is the subject of this Clause and pursuing that
claim in parallel with any claim required to be made under
this Clause.
(14) Notwithstanding anything in this Agreement to the contrary,
any liability of the Vendor or CAL under the Warranties or
under any express indemnity by the Vendor or CAL under this
Agreement shall be reduced to the extent that the loss or
damage suffered by the Purchaser in respect of which a claim
is made is the result of any failure by the Purchaser after
Completion to take reasonable steps to mitigate the effect of
the breach of Warranty or loss or damage concerned.
(15) The Purchaser accepts (a) that (without prejudice to any claim
under an express indemnity in this Agreement) the sole remedy
available to the Purchaser in respect of any breach of this
Agreement shall be in damages and (b) that the Purchaser shall
have no right to rescind this Agreement following the
execution hereof and that any such right is hereby expressly
excluded.
(16) Except in the case of fraud, dishonesty or wilful concealment
on the part of a relevant Employee, the Vendor agrees with the
Purchaser as trustee for the Employee concerned to waive any
rights or claims which it may have in respect of any
<PAGE>
misrepresentation in or omission from any information or
advice supplied or given by such Employee in connection with
the giving of the Warranties or the preparation of the
Disclosure Letter, Provided that this waiver shall only apply
for so long as the Employee concerned remains an Employee of a
company in the Purchaser's Group.
15. REPRESENTATIONS AND UNDERTAKINGS BY THE PURCHASER AND THE GUARANTOR
(1) The Purchaser and the Guarantor each warrants and undertakes to the
Vendor as follows:
(a) the Purchaser has full corporate power to carry on
the Business;
(b) the Purchaser will at Completion be registered for
VAT;
(c) the Purchaser and the Guarantor each has full
corporate power and authority to enter into and
perform its obligations under this Agreement and
the other documents to be executed pursuant hereto
and the signing of this Agreement or any of such
documents does not violate any provision of the
Purchaser's Memorandum and Articles of Association or
any order arbitration award judgement or decree (in
any such case, of a competent court) to which the
Purchaser is a party or by which it is bound nor does
the signing of this Agreement and the performance of
its obligations hereunder by the Guarantor contravene
or require the consent of any bank or the third party
to the giving of the guarantee under the terms of
Clause 17;
(d) the Boards of Directors of each of the Purchaser and
the Guarantor have has taken all action required by
law, their respective Memorandum and Articles of
Association or corporate statutes or otherwise to
authorise the signing and performance of this
Agreement by or on behalf of the Purchaser and the
Guarantor respectively.
<PAGE>
(2) The Purchaser and the Guarantor further undertake to the
Vendor that:-
(a) neither the Purchaser, the Guarantor nor any member
of the Purchaser's Group will at any time after the
Effective Time, directly or indirectly, and whether
on packaging documentation or otherwise, make any use
whatsoever in its business of any name containing the
word "Courtaulds"or any other name or word resembling
the same, or of the 0Courtaulds "C" Mark logo, and
the Purchaser will at all times procure that any
company controlled by them will not carry on any such
business under such name or logo. Notwithstanding the
foregoing, the Purchaser shall be permitted to use
supplies of packaging materials contained in Stocks,
containing the word "Courtaulds" or the "C"Mark Logo,
for such short period after Completion as may be
necessary to enable the Purchaser to replace such
packaging materials or make temporary arrangements,
such as use of labels, to obscure the said name or
logo, provided that the Purchaser shall use its best
endeavours to conclude use of such materials
containing the said name or logo as soon as
practicable after Completion and shall in any event
cease all such use within thirty (30) days after
Completion; and
(b) neither the Purchaser, the Guarantor nor any member
of the Purchaser's Group will at any time after the
Effective Time make use of or disclose to any third
party any commercial, technical or design information
of a secret or confidential nature relating to any
retained business of the Vendor (including
information about its customers or suppliers).
16. INDEMNITIES
(1) Subject, for the avoidance of doubt, to Clause 14(8), the
Vendor shall be responsible for all liabilities or obligations
of the Business (excluding the Assumed Liabilities and any
other obligations which may be agreed to be assumed by the
Purchaser under the express terms of this Agreement but
including the Excluded Liabilities) arising in respect of
<PAGE>
periods up to and including the Effective Time and accordingly
the Vendor hereby indemnifies and shall keep the Purchaser
indemnified from and against any liabilities or obligations of
the Business incurred or arising prior to the Effective Time
and not agreed to be assumed by the Purchaser pursuant to the
terms of this Agreement.
For the avoidance of doubt the indemnity under this Clause
16(1) shall include any claim or liability by or in respect of
any Employee or former employee of the Business or their
estates, dependants or relatives relating to any illness or
condition arising from exposure to asbestos in the course of
the Business or any part or predecessor of the Business prior
to the Effective Time.
(2) The Purchaser shall pay and satisfy and discharge the Assumed
Liabilities in accordance with and subject to the provisions
of this Agreement, shall observe perform and fulfil the
obligations of the Vendor falling due for performance after
the Effective Time under the Contracts and shall be
responsible for all other liabilities or obligations of the
Business arising in respect of periods after the Effective
Time and accordingly the Purchaser hereby indemnifies the
Vendor and shall keep the Vendor indemnified from and against
any liabilities or obligations of the Business incurred or
arising after the Effective Time or assessed against the
Vendor as a consequence of any failure of the Purchaser so to
pay satisfy and discharge or so to perform and observe and
fulfil the Assumed Liabilities or any such other liabilities
or obligations of the Business.
(3) The Vendor shall indemnify the Purchaser against any liability
for income tax, national insurance, interest and or penalties
that have been or may be incurred in respect of the membership
of any of the Employees prior to the Effective Time of any PRP
scheme run by any member of the Vendor's Group.
17. GUARANTEE
(1) The Guarantor:-
(a) shall guarantee the due performance by the Purchaser
<PAGE>
(notwithstanding any legal limitation on or
incapacity of or other such circumstances relating to
the Purchaser) of the undertakings, agreement and
other obligations on the part of the Purchaser under
this Agreement;
(b) hereby waives any rights which it may have to require
the Vendor to proceed first against or claim payment
from the Purchaser and the Guarantor agrees and
accepts that it shall be deemed to be liable as a
principal as if it had entered into such undertakings
and obligations as primary obligor jointly and
severally with the Purchaser;
(c) acknowledge that it shall not be released by time or
indulgence being given to or any arrangements or
alterations of terms being made with the Purchaser or
with the Guarantor or by any release or dealing by
the Vendor (other than an express release of this
guarantee) or by the invalidity of any such
undertaking, agreement or other obligation.
(2) The guarantee under this Clause 17 shall be a continuing and
irrevocable guarantee and indemnity.
(3) As a separate and independent stipulation, the Guarantor
agrees that any moneys expressed to be payable by the
Purchaser under this Agreement which may not be recoverable
from the Purchaser by reason of any legal limitation,
disability or incapacity on or of the Purchaser or any other
fact or circumstance (whether or not known to the Vendor)
shall nevertheless be recoverable from or otherwise payable by
the Guarantor as though the same had been incurred by it and
it was the sole or principal debtor in respect thereof under
the terms of this Agreement and shall be paid by it on demand
on or after the date when it would otherwise have been payable
by the Purchaser in accordance with this Agreement.
18. RESTRICTIONS
(1) In order to transfer to the Purchaser the full benefit of the
Goodwill the Vendor covenants with the Purchaser that it will
not and shall procure that each member of the Vendor's Group
will not:-
<PAGE>
(a) at any time during the period of 5 years after the
Effective Time either on its own account or otherwise
directly or indirectly, in competition with the
Business, carry on a business, in any country of the
World to which the Business has made any material
sales of any of the Restricted Products in the period
of 2 years prior to the date of this Agreement, which
manufactures or supplies any of the Restricted
Products (as defined below) in competition with the
Business as carried on by any member of the
Purchaser's Group;
(b) except by means of public advertisement, for a period
of 12 months after the Completion Date, without the
prior written consent of the Purchaser, either on its
own account or otherwise and whether directly or
indirectly solicit or endeavour to entice away from
the Purchaser any Employee who was engaged in
managerial work at the Effective Time;
(c) at any time after the Effective Time, except as
contemplated by or for the purposes of giving effect
to any provision of this Agreement, represent itself
or hold itself out as being in any way connected with
or interested in the Business;
(d) use or disclose, publish or communicate to any other
person, firm or company any commercial or technical
information of a secret or confidential nature which
relates exclusively to the Business without the
prior written consent of the Purchaser, and this
Clause 18(1)(d) shall continue to bind the Vendor
without limit as to time Provided that this shall not
prevent the Vendor or CAL using or disclosing such
information for its normal accounting, taxation or
management purposes or in the ordinary course of any
other business of the Vendor to the extent such
information also relates to such other business; or
(e) use the name "National Plastics" or the Trademarks or
any names capable of confusion therewith as a
corporate business or trading name in any business
carrying on the manufacture, marketing or sale of
Restricted Products.
<PAGE>
(2) Subject always to the provisions of Clause 18(1)(d) above, the
provisions of Clause 18(1)(a) above shall not prevent the
Companies and any other members of the Vendor's Group from
time to time from:-
(a) continuing to operate and develop any other existing
business in the Vendor's Group in accordance with the
practice of that business or the Vendor's Group prior
to the date of this Agreement; or
(b) holding a minority interest of less than 20% of any
class of shares or other securities in any company
which may be from time to time engaged in the
manufacture or sale of any of the Restricted
Products; or
(c) acquiring, and subsequently operating or holding an
interest in, any company, business, firm or
undertaking or group thereof carrying on, or engaged
or interested in, an activity in breach of Clause
18(1)(a) ("a competing business") Provided further
that such part of the turnover of the competing
business representing sales in Restricted Products as
dealt in by the Business at the date of this
Agreement accounts for not more than 30% of the
aggregate turnover of the total operations and/or
entities so acquired.
(3) In this Clause 18, the term "Restricted Products" means any of
the following products as dealt in by the Business before the
Effective Time:-
(a) manufacture of composite vehicle armour and vehicles
incorporating such armour;
(b) military helmets manufactured from composite
materials.
(c) body armour for military or defence forces purposes;
(d) composite mouldings with stealth and signature
reduction characteristics;
<PAGE>
(e) composite seat-backs for aeroplanes; and
(f) composite medical couches
in each case being of the kind of such products as
manufactured by the Business while under the ownership of any
member of the Vendor's Group.
(4) The restrictions contained in Clause 18(1)(d)shall not apply:-
(a) to any information which is now or hereafter becomes
public knowledge save by a breach of that sub-clause;
or
(b) to any information which is subsequently received by
the Vendor from a third party, or independently
developed, other than as a result of a breach of duty
of confidence owed to the Purchaser; or
(c) to any information which is required to be disclosed
by a process of law by a competent regulatory body.
(5) Each of the undertakings in this Clause 18 is separate and
independent and may be severed from the remainder to the
intent that the validity of any one or more of such
undertaking does not in any way affect the validity of any
other.
(6) While the restrictions contained in this Clause 18 are
considered by the Vendor and the Purchaser to be reasonable in
all circumstances it is recognised that restrictions of the
nature in question may be unenforceable and accordingly if any
such restriction shall be adjudged to be void and
unenforceable as going beyond what is reasonable in the
circumstances for the protection of the interests of the
Purchaser but would be valid if part of the wording thereof
was deleted or the period thereof was reduced or the area
dealt with thereby reduced in scope such restriction shall
apply with such modifications as may be necessary to make them
valid and effective.
<PAGE>
(7) The Vendor undertakes that it shall prior to the Effective
Time procure that any company within the Vendor's Group with
the words "National Plastics" in its name shall resolve to
change its name to a name not including the words "National
Plastics" or any colourable imitation thereof and shall on
Completion deliver to the Purchaser evidence of such name
change(s).
19. FURTHER ASSURANCE
The Vendor shall execute and procure to be executed by other members of
the Vendor's Group from time to time after Completion all such deeds
and documents as the Purchaser shall reasonably require in order to
perfect the right title and interest of the Purchaser in and to the
Sale Assets hereby agreed to be sold and pending the execution of such
deeds and documents the Vendor shall hold the legal estate in such Sale
Assets in trust for the Purchaser.
20. EXCLUSION OF OTHER WARRANTIES AND REPRESENTATIONS
(1) Without prejudice to the terms of Section 7 in the Warranties
but otherwise notwithstanding any other provision of this
Agreement, the Vendor does not warrant that the Trademarks are
valid or will be granted or that the use of the Trademarks by
the Vendor does not, or that the use by the Purchaser thereof
will not, infringe any trademark or other rights of any third
party in any part of the World.
(2) This Agreement, together with the documents referred to herein
to be executed on Completion, shall constitute the entire
understanding and agreement between the parties to it relating
to the sale and purchase of the Business, and, apart from the
Warranties and the express provisions of this Agreement and
those documents, no representations, warranties or
undertakings, written or oral, express or implied, statutory
or otherwise (including but not limited to the warranties or
conditions as to satisfactory quality, fitness for purpose,
compliance with sample or description and reasonable care and
skill, but not including the implied warranty or condition as
to title), made by or on behalf of the Vendor to any other of
<PAGE>
the parties in connection with or arising out of the
acquisition of the Business, or during any prior discussions
or negotiations relating thereto shall give rise to any
liability on the part of the Vendor, save that this Clause
20(2) shall not exclude any liability for a fraudulent
misrepresentation.
(3) The Purchaser hereby accepts and confirms that the Purchaser
has not been influenced to enter into this Agreement by any
statements of fact or opinion other than such as are contained
in this Agreement, such statements being subject to all
matters disclosed in the Disclosure Letter.
21. VALUE ADDED TAX
(1) All amounts expressed in this Agreement as being payable by
the Purchaser are expressed exclusive of any VAT which may be
chargeable thereon and any VAT payable shall be paid by the
Purchaser to the Vendor forthwith the issue at any time of a
VAT invoice. However the parties hereto shall use all
reasonable endeavours to secure as far as possible that
pursuant inter-alia to Article 5(1) of the Value Added Tax
(Special Provisions) Order 1992, the sale of the Sale Assets
is treated as neither a supply of goods nor a supply of
services for the purposes of VAT.
(2) If notwithstanding the foregoing provisions, the Commissioners
of Customs & Excise determine that VAT is payable on any part
of the supply from the Vendor to the Purchaser hereunder, the
Purchaser shall pay the amount of any such VAT to the Vendor,
in addition to any relevant payment pursuant to Clause 3(1) or
Clause 4(1), within 10 business days of the delivery to the
Purchaser of the relevant tax invoices in respect thereof.
<PAGE>
22. ANNOUNCEMENTS
Except if and insofar as required by The Stock Exchange no announcement
shall be made by any party either before or after Completion in
relation to any of the transactions provided for in this Agreement
without the prior consent of, in the case of an announcement by the
Vendor or CAL, the Purchaser and in respect of an announcement by the
Purchaser, the Vendor, which consent shall not be unreasonably
withheld.
23. GENERAL
(1) Any variation of this Agreement shall be binding only if it is
recorded in a document signed by or on behalf of the parties
to this Agreement. Agreement by the Vendor to a variation
shall be deemed to constitute agreement also by CAL, and vice
versa.
(2) Each party shall pay its own costs in relation to the
negotiations leading up to the sale of the Business and to the
preparation, execution and carrying into effect of this
Agreement and of all other documents referred to in it. The
Purchaser shall be responsible for all stamp duty or stamp
duty reserve tax which may be payable in respect of the
transfer of Sale Assets to the Purchaser.
(3) Interest shall be due at the rate of 4% per annum above the
Base Rate of National Westminster Bank plc from time to time
from the due date until the actual date of payment (as well
before as after judgement) in respect of any payment under
this Agreement which is late or in default.
(4) No provision of this Agreement or of any agreement or
arrangement of which it forms part by virtue of which the
agreement constituted by all the foregoing is subject to
registration (if such be the case) under the Restrictive Trade
Practices Act 1976 shall take effect until the day after
particulars of such agreement have been furnished to the
Director General of Fair Trading pursuant to the terms of
Section 24 of that Act and the parties hereto irrevocably
authorise the Vendor to furnish such particulars to the said
Director General from time to time.
<PAGE>
(5) This Agreement is personal to parties hereto and no benefit,
right or obligation of a party hereunder may be assigned by
that party without the prior written consent of the other
party provided that the Vendor and/or CAL may assign any of
its rights and obligations under this Agreement to any member
of the Vendor's Group.
(6) Subject always to Clause 23(5), this Agreement shall be
binding upon and enure for the benefit of the personal
representatives of or other successors in title to the parties
hereto.
(7) No failure on the part of any party hereto to exercise, and no
delay on its part in exercising, any right under this
Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any right under this Agreement
preclude any other further exercise thereof or the exercise of
any other right. The rights and remedies provided in this
Agreement are cumulative.
(8) This Agreement shall remain in full force and effect
notwithstanding Completion in respect of obligations remaining
to be performed thereafter.
24. COMMUNICATIONS
(1) All communications between the parties with respect to this
Agreement shall be delivered by hand or sent by pre-paid post
(first class if inland, airmail if overseas) or facsimile
telecopier to the address of the addressee as set out in this
Agreement, or to such other address or facsimile number in
Great Britain as the addressee may from time to time have
notified for the purposes of this Clause.
(2) Communications shall be deemed to have been received if
delivered by hand, on the day of delivery, or if sent by first
class post, two business days after posting exclusive of the
day of posting, or if sent by facsimile telecopier, at the
time of transmission or, if the time of transmission is not
during the addressee's normal business hours, at 9.30 a.m. on
the next business day.
(3) Communications under this Agreement:-
<PAGE>
(a) to the Vendor and/or CAL shall be addressed to:
The Company Secretary, Courtaulds plc, 50 George
Street, London W1A 2BB;
(b) to the Purchaser shall be addressed to:
The Managing Director, NP Aerospace Limited, 473
Foleshill Road, Coventry, West Midlands, and
(c) to the Guarantor shall be addressed to:
Chief Executive Officer, Reinhold Industries Inc.
of 12827 East Imperial Hwy, Santa Fe Springs, CA
90670,
or such alternative addressee(s) as the relevant party may
notify to the other parties for this purpose.
(4) In proving service:-
(a) by delivery by hand, it shall be necessary only to
produce a receipt for the communication signed by or
on behalf of the addressee;
(b) by post, it shall be necessary only to prove that the
communication was contained in an envelope which was
duly addressed and posted in accordance with this
Clause;
(c) by facsimile telecopier, it shall be necessary only
for the communication or a confirmatory letter to
have been delivered by hand or sent by first class
post on the same day but failure of the addressee to
receive such confirmation shall not invalidate the
relevant communication deemed given by facsimile
telecopier.
<PAGE>
24. PROPER LAW
This Agreement shall be governed by the Law of England and Wales.
IN WITNESS whereof this Agreement was executed on the date first above written.
<PAGE>
LIST OF SCHEDULES
No. Description
1. The Properties
2. The Employees
3. The Equipment and Excluded Equipment
4. The Excluded Contracts
5. The Trademarks
6. The Patents
7. The Warranties
8. Prices for the Sale Assets
9. Pensions
<PAGE>
FIRST SCHEDULE
PART 1
THE PROPERTY
ALL THAT Freehold land together with the buildings erected thereon at 473
Foleshill Road Coventry West Midlands as the same is registered at HM Land
Registry with Absolute Title under Title Number WM567469
PART 2
SALE CONDITIONS RELATING TO THE PROPERTY
1. SALE AND PURCHASE
On the Completion Date the Vendor shall in consideration of the sum
allocated as the consideration for the Property in the Eighth Schedule
transfer (or procure the transfer by CAL of) the freehold interest in
the Property to the Purchaser who shall accept such transfer
2. VACANT POSSESSION
The Property is sold with vacant possession at the Completion Date.
3. DEDUCTION OF TITLE TO THE PROPERTY
Title to the Property has been deduced prior to the date hereof in
accordance with Section 110 of the Land Registration Act 1925
4 MATTERS AFFECTING THE PROPERTY
4.1 The Property is sold subject to and where appropriate with the benefit
of the following matters (so far as the same are subsisting and capable
of affecting the Property):
<PAGE>
4.1.1 all matters contained or referred to in the entries on the
Register and filed plan of Title Number WM567469
4.1.2 all Local Land Charges and other matters whenever registered
or registerable (whether registered or not) by any local or
other authority
4.1.3 all easements quasi easements and all other rights and
privileges affecting the Property
4.2 The Purchaser shall be deemed to purchase with full knowledge of all
matters referred to in this paragraph 4 and shall not raise any
objection thereto or requisition thereon (save for any arising from the
replies to final searches at HM Land Registry)
5. PROPERTY REPLIES
The Purchaser hereby acknowledges and admits that the Purchaser has not entered
into this Agreement in relation to the Property in reliance wholly or partly on
any statement other than the Property Replies or the Warranties in Paragraphs
3.1 to 3.4 of the Seventh Schedule.
6. TITLE GUARANTEE
The Vendor shall sell (or shall procure that CAL shall sell) with Full Title
Guarantee but expressly subject to all matters as are referred to in Condition
3.1.2 of the Standard Conditions of Sale (Third Edition)
7. DUPLICATE PROPERTY TRANSFER
The Property Transfer shall be prepared and executed by the Purchaser in
duplicate and the Purchaser shall arrange for the duplicate to be stamped and
denoted at the Purchaser's expense and returned to the Vendor's Solicitors
<PAGE>
8. STANDARD CONDITIONS
The Standard Conditions of Sale (Third Edition) are deemed to be incorporated in
this Agreement in so far as they are applicable to a sale by private treaty and
are not inconsistent with the other conditions (including this condition) of
this Agreement and are to be construed as follows:
8.1 References to "the Seller" shall be deemed to be references
to the Vendor or CAL and references to the "the Buyer" shall
be deemed to be references to the Purchaser
8.2 The contract rate is the same rate of interest applicable to
late payment of any sums due under this Agreement under the
provisions of Clause 21(3)
8.3 Standard Conditions 1.3, 2.2, 2.3, 5.1.1, 5.1.2, 6.1, 6.2,
6.7, 6.8, 7, 8 and 9 shall be deleted
9. COMPLETION
Completion shall take place in accordance with the provisions of Clause 11.
10. BUILDINGS 14 AND 23
10.1 The Vendor shall procure that the Purchaser shall be entitled as
Licensee as from the Completion Date to use the following areas of
buildings at 256 Foleshill Road, Coventry:
10.1.1 The existing storage area in Building 14 until 31st May 1998 and
10.1.2 The existing archive storage area in Building 23 until 31st May 1998
and
10.1.3 The area currently occupied by plant and equipment (including telephone
switch and file server) in Courtaulds Engineering Pharmaceutical
Engineering and Technology office block, being Building Number 21A
until the 30th September 1998
<PAGE>
10.2 Occupation as Licensee under paragraph 10.1 of this Part II shall be
subject to the following conditions:-
10.2.1 The Purchaser shall abide by such reasonable requirements as to access
and use of the areas as Trackwell Limited shall from time to time
stipulate including requirements as to access times and security
measures and
10.2.2 The Purchaser shall before the termination dates referred to in
paragraph 10.1 of this Part II remove stored items and plant and
equipment from the areas and shall make good any damage caused to the
areas or any adjoining buildings and
10.2.3 The Purchaser shall indemnify and keep indemnified the Vendor and
Trackwell Limited against any claims damage or losses arising from the
Purchaser's use of the said areas or from such removal and
10.2.4 Trackwell Limited and the Vendor shall not be liable for any loss
damage or injury to the goods of the Purchaser so stored or sited or to
any person resorting to the said areas and
10.2.5 The Licence to Use hereby granted is personal to the Purchaser
PART 3
SITE 2 LEASE AND THE SITE 3 LEASE
1. Subject to the grant of the Court Order referred to in Paragraph 2 of
this Part 3 the Vendor shall procure that Trackwell Limited shall
execute and deliver to the Purchaser on the Completion Date the Site 2
Lease and the Site 3 Lease and the Purchaser shall sign and deliver to
the Vendor on the Completion Date the duplicate of the Site 2 Lease and
of the Site 3 Lease.
2. The Purchaser shall and the Vendor shall procure that Trackwell shall
use all reasonable endeavours to obtain prior to the Completion Date
the grant by a Court of competent jurisdiction of a Court Order
<PAGE>
authorising the inclusion in each of the Site 2 Lease and the Site 3
Lease of provisions excluding security of tenure under Section 24 to 28
inclusive of the Landlord and Tenant Act 1954 (as amended).
3. If the Court Order in respect of Site 2 or Site 3 shall not have not
been granted by the Completion Date the completion of the Site 2 Lease
and for the Site 3 Lease (as the case may be) shall be delayed until
seven days after the grant of the Court Order relating to that Site.
4. If the said Court Order shall not have been granted by the Completion
Date in respect of Site 2 and/or Site 3 the Purchaser shall be entitled
from the Completion Date up to whichever is the earlier of the
completion of the Lease for that Site or the expiry of 23 weeks after
the Completion Date to occupy the Site in question as Licensee but on
the same terms in other respects as contained in the Site 2 Lease or
the Site 3 Lease as the case may be as fully as if the same had been
granted on the Completion Date.
<PAGE>
SECOND SCHEDULE
EMPLOYEES
<PAGE>
<TABLE>
ADMT EMPLOYEES IN ALPHABETICAL ORDER
-------------------------------------------
Date: 31 March 1998 Page 1
EMP..........
<CAPTION>
Status Bus
Emp Name Type Unit
--------------------- ------- ------
<S> <C> <C> <C>
426941 Alger J.M. AFTP ADM
434816 Atkinson D. AFTP VH
434817 Baker S. AFTP VH
436534 Bansal R.S. AFTP SE
436689 Bansal S.K. AFTP SE
436702 Bazeley J.B. AFTP HE
436703 Beck F.A. AFTP SE
436474 Birdee M.S. AFTP HE
436704 Birk S.S. AFTP HE
436705 Boyce R. AFTP VH
431117 Boyle P.J. AFTP SE
416771 Cantes M.J. AFTP DE
436509 Carroll L. AFTP SE
436707 Cheema J.S. AFTP HE
430970 Cheese M.J. AFTP TM
433016 Clarke G.D. AFTP SE
434550 Cobb W.G. AFTP TM
436708 Cole E. AFTP TM
427988 Collins V.E. AFTP SE
429111 Cooksley J.A. AFTP SE
436709 Corbett P.R. AFTP VH
430059 Dalney I.D. AFTP SE
436616 Davies C. AFTP SE
436711 Davis P.T. AFTP TM
436712 Dawson F. AFTP HE
436476 Day J.L. AFTP HE
436713 Deasy J. AFTP VH
436503 Eastham D.P. AFTP HE
436715 Edwards S.A. AFTP TM
431028 Evans G. AFTP SE
436717 Evans J. AFTP TM
436718 Friswell N.M. AFTP HE
436719 Frost W.S. AFTP HE
435599 Gallemore T.B. AFTP TM
436690 Gibbs R.P. AFTP SE
437505 Giles J.L. AFTP ADM
434546 Gill Y. AFTP TM
427558 Gilpin M.B. AFTP SE
428350 Godfrey D.G. AFTP TM
436477 Goode N. AFTP HE
434561 Greenway-cole A. AFTP DE
429130 Gutteridge S.M. AFTP SE
436721 Hall M.J. AFTP TM
436628 Harris K.L. AFTP SE
436478 Hartland A.E. AFTP HE
436722 Hayer K.S. AFTP TM
436723 Hayre M.S. AFTP TM
436629 Heighington B.A. AFTP SE
436409 Hennessy-Dempster AFTP HE
436725 Ho H.V. AFTP TM
436726 Hopkin K. AFTP TM
<FN>
ADMT,ACTIVE,ALPHABETICALLY
</FN>
</TABLE>
<PAGE>
<TABLE>
ADMT EMPLOYEES IN ALPHABETICAL ORDER
-------------------------------------------
Date: 31 March 1998 Page 2
EMP..........
<CAPTION>
Status Bus
Emp Name Type Unit
--------------------- ------- ------
<S> <C> <C> <C>
Howell E.R. AFTP TM
Innocent P.J. AFTP HE
Jeffs D. AFTP TM
Jenkins K.C. AFTP HE
Jones A.J. AFTP HE
Jones A.M. AFTP DE
Jones P. AFTP SE
Joshi H. AFTP TM
Kaila K.S. AFTP HE
Kaila P.S. AFTP VH
Kaur D. AFTP SE
Kaur K. AFTP SE
Kelly G.J. AFTP TM
Krishan K. AFTP TM
Last J. AFTP SE
Lee I. AFTP DE
Linton M.A. AFTP VH
Long W.J. AFTP SE
Mace G. AFTP VH
Martin L. AFTP ADM
Matthews N.W. AFTP HE
Matwijiwskyj P. AFTP TM
McGuinness J. AFTP SE
Mcafee D.J. AFTP DE
Mccrindle T. AFTP HE
Medwell R.T. AFTP ADM
Messam S.A. AFTP TM
Middleton J. AFTP HE
Milbourne T. AFTP TM
Millward M.J. AFTP SE
Modi A.N. AFTP TM
Moore B.G. AFTP HE
Moore J. AFTP SE
Newton M. AFTP HE
Ogrady B.F. AFTP TM
Oldroyd M. AFTP DE
Pabla J.S. AFTP TM
Parekh B. AFTP HE
Parish M. AFTP TM
Patel B. AFTP TM
Patel S.R. AFTP TM
Paterson I.F. AFTP ADM
Paul C. AFTP TM
Powell G.S. AFTP DE
Prasad D. AFTP TM
Prestidge R. AFTP HE
Preston J.H. AFTP SE
Purchase C.L. AFTP TM
Quirke J. AFTP TM
Ray S.S. AFTP HE
<FN>
ADMT,ACTIVE,ALPHABETICALLY
</FN>
</TABLE>
<PAGE>
<TABLE>
ADMT EMPLOYEES IN ALPHABETICAL ORDER
-------------------------------------------
Date: 31 March 1998 Page 3
EMP..........
<CAPTION>
Status Bus
Emp Name Type Unit
--------------------- ------- ------
<S> <C> <C> <C>
436332 Reaney K.T. AFTP SE
427788 Rowan J.H.C. AFTP DE
436216 Sahota B. AFTP SE
433614 Saund R. AFTP HE
425494 Schofield R. AFTP DE
434728 Shergill B. AFTP ADM
434545 Shield T.M. AFTP TM
436765 Simms M.A. AFTP TM
436766 Simms W.R. AFTP TM
436767 Singh M. AFTP VH
436314 Stansfield D.A. AFTP SE
436769 Stew C. AFTP TM
436770 Stilgoe J.W. AFTP HE
431721 Sudiwala B. AFTP DE
436771 Taylor R. AFTP TM
436772 Tromans K. AFTP SE
436508 Turner M.D. AFTP HE
410417 Turner R.F. AFTP DE
437138 Upton G.R. AFTP SE
433709 Virdee B.K. AFTP SE
436482 Virk H.S. AFTP HE
432376 Walker I.J. AFTP SE
435603 Weaver K. AFTP TM
436774 Whelan M.B. AFTP TM
436483 Williams A. AFTP HE
436775 Williams A.P. AFTP TM
436777 Wooden A. AFTP TM
<FN>
ADMT,ACTIVE,ALPHABETICALLY
</FN>
</TABLE>
<PAGE>
<TABLE>
AFTT EMPLOYEES IN ALPHABETICAL ORDER
-------------------------------------------
Date: 31 March 1998 Page 1
EMP..........
<CAPTION>
Status
Emp Name Emp No Type
- -------------------- -------- -------
<S> <C> <C>
Curran A. 437136 AFTT
Miller B. 437494 AFTT
Pickering J. 437324 AFTT
Sloan L.M. 437137 AFTT
Walker B. 437524 AFTT
Williams T.M. 437326 AFTT
<FN>
ADMT.TEMPS
</FN>
</TABLE>
<PAGE>
<TABLE>
APTT EMPLOYEES IN ALPHABETICAL ORDER
-------------------------------------------
Date: 31 March 1998 Page 1
EMP..........
<CAPTION>
Status
Emp Name Emp No Type
- -------------------- -------- -------
<S> <C> <C>
Mccloskey P. 436742 APTP
Savage M. 436763 APTP
Pointer M. APTT
<FN>
ADMT.APTT
</FN>
</TABLE>
<PAGE>
THIRD SCHEDULE
Part 1
KEY ITEMS OF EQUIPMENT
Part 2
EXCLUDED EQUIPMENT
<PAGE>
<TABLE>
COMBINED
List of major items of Plant and Machinery
- ------------------------------------------
<CAPTION>
ASSET VOUCH YEAR DESCRIPTION LOCATION COST ACC DEP'N NBV
NO NO BOUGHT 31/3/98 31/3/98
<S> <C> <C> <C> <C> <C> <C> <C>
3 91/92 DIFFENBACHER PRESSES SITE 1 613279.00 362139.50 251139.50
89003 405/707 89/90 AUTOCLAVE SITE 3 COMP 220292.39 176233.91 44058.48
89001 7213 89/90 SIMPLEKAMP PRESS SITE 3 COMP 219999.68 219999.98 0.00
5 92/93 CNC ROUTER SITE 1 208395.00 121396.50 86998.50
91066 93/94 TESTING FACILITY SITE 3 COMP 165506.00 165506.00 0.00
34 92/93 MANIPULATORS SITE 2 162545.00 89972.50 72572.50
38 92/93 ABRASIVE WATER JET SITE 1 117835.00 68717.50 49117.50
2388 89/90 X-Y TABLE SITE 1 116389.00 93111.20 23277.80
91/92 CNC ROUTER SITE 3 COMP 104160.69 62496.42 41664.27
87047 7071 87/88 SUB STATION SITE 3 COMP 98127.00 98127.00 0.00
202 87/88 INJ PRESS EDS 1600/650 SITE 1 95903.00 95903.00 0.00
7 92/93 SHAPE CUTTER- XY TABLE SITE 1 95556.00 53286.00 42270.00
9403 94/95 ROBOT SITE 3 COMP 93336.00 62149.62 31186.38
492 92/93 STEAM GENERATOR SITE 1 93244.00 46622.00 46622.00
44 86/87 WATER JET CUTTER SITE 1 87480.00 87480.00 0.00
37 92/93 3D TESTING SITE 1 80727.00 45863.50 34863.50
9401 93/94 WATER JET UNIT COMP SITE 1 79288.08 31715.23 47572.85
2490 91/92 CONV OF P59 FOR S2 GLASS SITE 1 66298.00 39778.80 26519.20
189 89/90 MOD PRESS 100 SITE 1 64082.00 51265.60 12816.40
9403 94/95 PRESS SITE 3 COMP 61007.99 18302.40 42705.59
7273 85/86 BONE CRAVEN 1000T INJ PRESS SITE 1 57967.00 57967.00 0.00
44 86/87 CONV 3 TANL CREW PRESSES SITE 1 57386.00 57386.00 0.00
111 80/81 BUCHAN 260T PRESS SITE 1 53178.00 53178.00 0.00
133 87/88 SPRINKLER SYS PHASE 1 SITE 1 51778.00 51778.00 0.00
9 91/92 PAINT SPRAYER SITE 2 50000.00 29100.00 20900.00
203 87/88 INJ PRESS BA750/315 CD SITE 1 49317.00 49317.00 0.00
304 94/95 HELMET SPRAY EQUIP DG10 VARIO SITE 3 HELMET 44099.98 13229.99 30869.99
108 80/81 BIPEL 150/60 SIDE RAM PRESS SITE 1 42367.00 42367.00 0.00
8 92/93 SHOT BLASTER SITE 2 41000.00 23700.00 17300.00
9513 94/95 REFURB 4 OFFBIP PRESS SITE 3 HELMET 40633.16 12189.95 28443.21
6 92/93 PRESS CTRL SITE 1 38524.00 22762.00 15762.00
1 91/92 SHEET CUTTER SITE 1 35930.00 21464.00 14466.00
88045 7047 88/89 SMALL AUTOCLAVE SITE 3 COMP 35232.63 31709.37 3523.26
100 84/85 STEAM&WATER P31,33,35,36,37HELSITE 1 35080.00 35080.00 0.00
9512 94/95 XY CUTTER SITE 3 COMP 35000.00 10500.00 24500.00
9602 95/96 COMBI-UNIT BOOTH/OVEN SITE 3 HELMET 34578.50 6915.70 27662.80
1887 87/88 INSTRON 6025 SITE 1 34328.00 34328.00 0.00
1 92/93 SHEET CUTTER NO.2 SITE 1 34019.00 20411.40 13607.60
2387 88/89 GUYSON RX5900 CABINET SITE 1 33878.00 30490.20 3387.80
592 92/93 SUPL INSTL PLANT HEAT OFFICE SITE 1 33805.00 16902.50 16902.50
2588 88/89 ARSBURG ALLROUNDER INJ PRESS SITE 1 30766.00 30766.00 0.00
985 83/84 58 EX EXCO 800T PRESS SITE 1 30629.00 30629.00 0.00
9611 95/96 AIR COMP SYS SITE 3 GENERA 29193.00 5838.60 23354.40
9 57/58 BALANCE 1957 SITE 1 28510.00 28510.00 0.00
9510 94/95 PRESS SITE 3 HELMET 27885.54 8365.66 19519.88
9 58/59 BALANCE 1958 SITE 1 27559.00 27559.00 0.00
177 85/86 BALLISTIC TEST RIG SITE 1 27492.00 27492.00 0.00
9604 95/96 SWAD HELMUT IMPRV PU SPRAY EQ SITE 3 HELMET 27000.26 5400.05 21600.21
19 92/93 COMPRESSOR SITE 1 27000.00 16500.00 10500.00
</TABLE>
<PAGE>
<TABLE>
EXCLUDED ASSETS: FIXTURES & FITTINGS
- ------------------------------------------
<CAPTION>
ASSET VOUCH YEAR DESCRIPTION LOCATION COST ACC DEP'N NBV
NO NO BOUGHT 31/3/98 31/3/98
<S> <C> <C> <C> <C> <C> <C> <C>
49 7003 87/88 FACTORY PARTITIONS SITE 3 COMP 48799.90 48799.90 0.00
80 7077 88/89 HIGH BAY SPRINKLER SYSTEM SITE 3 COMP 11667.10 10500.39 1166.71
80 7077 88/89 ADDITIONAL SPRINKLER SITE 3 COMP 6975.00 6277.50 697.50
80 7077 88/89 ADDITIONAL SPRINKLER SITE 3 COMP 5425.00 4882.50 542.50
80 7077 88/89 SPRINKLER PROTECTION SITE 3 COMP 9663.50 8697.15 966.35
80 7077 88/89 CENTRAL HEATING SYSTEM SITE 3 COMP 2815.45 2533.91 281.54
80 7077 88/89 LIGHTING SITE 3 COMP 2516.40 2264.76 251.64
80 7077 88/89 LIGHT UNITS SITE 3 COMP 51.95 46.76 5.19
80 7077 88/89 GREY CARPET TILES SITE 3 COMP 2050.00 0.00 0.00
80 7077 88/89 INSTALL NEW MAINS CABLE SITE 3 COMP 5200.00 4680.00 520.00
80 7077 88/89 TEL CONNECTION CHARGE SITE 3 COMP 2565.00 2308.50 256.50
80 7077 88/89 ELECTRIC WIRING & ALTERATION SITE 3 COMP 4172.00 3754.80 417.20
80 7077 88/89 B20 INSTALL CHARGE SITE 3 COMP 190.00 171.00 19.00
80 7077 88/89 2 DP DESKS SWIVEL ARMCHAIR SITE 3 COMP 606.90 546.21 60.69
89 7232 88/89 TRENCH FOR PORTAKABIN SITE 3 COMP 754.34 678.91 75.43
89 7232 88/89 HOT WATER TANK IN B19 TOILET SITE 3 COMP 97.00 87.30 9.70
89 7232 88/89 POWER DISTRIBUTION IN HIGH BAY SITE 3 COMP 20058.00 18052.20 2005.80
89 7232 88/89 RELAGGING OF WATER MAIN SITE 3 COMP 116.33 104.70 11.63
89 7232 88/89 INSTALLATION OF ELECT. SUPP B19 SITE 3 COMP 3920.00 3528.00 392.00
89 7232 88/89 SEE 7077 SITE 3 COMP 21230.60 19107.54 2123.06
89 7232 88/89 VALVES FOR GAS SUPPLY TO PWRHSE SITE 3 COMP 687.41 618.67 68.74
89 7232 88/89 REMOVAL ASBESTOS SITE 3 COMP 1600.00 1440.00 160.00
89 7232 88/89 GAS SUPPLY SITE 3 COMP 460.50 414.45 46.05
89 7232 88/89 APPLIC 1 RE ELECTRICAL CARCASSING SITE 3 COMP 965.00 868.00 97.00
89 7232 88/89 APPLIC 2 RE ELECTRICAL CARCASSING SITE 3 COMP 2006.60 1805.94 200.66
89 7232 88/89 APPLIC 2 RE ELECTRICAL CARCASSING SITE 3 COMP 524.40 471.96 52.44
89 7232 88/89 INSTALL U160 GAS METER & PIPE SITE 3 COMP 5156.00 4640.40 515.60
89 7232 88/89 GABLE END SCREEN B19 SITE 3 COMP 1872.00 1684.80 187.20
89 7232 88/89 SUPPLY/INSTALL PLASTIC STRIP CURT. SITE 3 COMP 692.68 623.42 69.26
89 7232 88/89 GLAZING IN TRIM SHOP SITE 3 COMP 1036.00 932.40 103.60
89 7232 88/89 STRIP CURTAIN IN STORE SITE 3 COMP 846.95 762.26 84.69
89 7232 88/89 6078 LIGHTING SITE 3 COMP 0.00 0.00 0.00
89 7232 88/89 LIGHTING IN HIGH BAY SITE 3 COMP 4326.00 3893.40 432.60
89 7232 88/89 POWERHOUSE/ TOILET 1/3RD SITE 3 COMP 7550.80 6795.72 755.08
89 7232 88/89 ARCHITECT/ENGINEERS FEES SITE 3 COMP 799.50 719.55 79.95
89 7232 88/89 STEAM GENERATOR HOUSING SITE 3 COMP 2816.36 2534.72 281.64
89 7232 88/89 FIRE PROTECT ON LIFT SHAFT SITE 3 COMP 1164.68 1048.22 116.46
89 7232 88/89 LIFT FOUNDATION SITE 3 COMP 1216.65 1094.99 121.66
89 7232 88/89 GOODS LIFT SITE 3 COMP 1661.00 1494.90 166.10
89 7232 88/89 GOODS LIFT SITE 3 COMP 2491.50 2242.35 249.15
89 7232 88/89 GOODS LIFT SITE 3 COMP 12457.50 11211.75 1245.75
89 7232 88/89 FIRE BLANKET SITE 3 COMP 1700.00 1530.00 170.00
89 7232 88/89 PROJECT MANAGEMENT SITE 3 COMP 104.00 93.60 10.40
89 7232 88/89 SUSPENDED CEILING SITE 3 COMP 12736.00 11462.40 1273.60
89 7232 88/89 BONDING/ASSEMBLY:12 BENCHES SITE 3 COMP 3658.00 3292.20 365.80
89 7232 88/89 BONDING/ASSEMBLY:SHELVING SITE 3 COMP 861.40 775.26 86.14
89 7232 88/89 PAINT SPRAY: HOLES IN ASBESTOS SITE 3 COMP 890.00 801.00 89.00
89 7232 88/89 PAINT SPRAY: FIRE DAMPER SITE 3 COMP 163.00 146.70 16.30
89 7232 88/89 CLEAN ROOM PARTITIONING SITE 3 COMP 3663.00 3296.70 366.30
89 7232 88/89 EXTRA DUCTWORK SITE 3 COMP 315.00 283.50 31.50
89 7232 88/89 ADDITIONAL WORK TO DRAIN SITE 3 COMP 495.00 445.50 49.50
89 7232 88/89 INSULATED PANEL FOR OVEN SITE 3 COMP 2674.00 2406.60 267.40
89 7232 88/89 SEAL MEZZANINE FLOOR SITE 3 COMP 750.55 675.50 75.05
89 7232 88/89 NORTH/SOUTH PARTIT 75% GABLE END SITE 3 COMP 5616.00 5054.40 561.60
89 7232 88/89 EXCAVATING CONCRETE FIRE ESCAPE SITE 3 COMP 311.00 279.90 31.50
89 7232 88/89 TOILET & POWERHOUSE B19 SITE 3 COMP 7550.80 6795.72 755.08
89 7232 88/89 INSTALLATION FIR EXIT DOORWAYS SITE 3 COMP 1150.00 1035.00 115.00
89 7232 88/89 CUTTING OF ASBESTOS SITE 3 COMP 1190.00 1071.00 119.00
90 7236 88/89 EXCAVATION FIRE ESCAPE PLINTHS SITE 3 COMP 445.00 400.50 44.50
90 7236 88/89 SUPPLY AND INSTALLATION SITE 3 COMP 36424.00 32781.60 3642.40
90 7236 88/89 CLEAR CEILING TILES SITE 3 COMP 239.00 215.10 23.90
90 7236 88/89 INSTALL FIRELINE BOARD SITE 3 COMP 599.10 539.19 59.91
90 7236 88/89 BLDG 20 PROJECT 21956 DUPLICATE SITE 3 COMP 894.00 804.60 89.40
90 7236 88/89 BLDG 20 PROJECT 21956 SITE 3 COMP 894.00 804.60 89.40
90 88/89 ACCRUAL SITE 3 COMP 3500.00 3500.00 0.00
91 7237 88/89 BLDG 19 PIPEWORK SITE 3 COMP 650.00 585.00 65.00
91 7237 88/89 BLDG 19 PIPEWORK SITE 3 COMP 100.00 90.00 10.00
94 7319 88/89 OVHEAD PROJECTOR & SCREEN SITE 3 COMP 607.00 607.00 0.00
99 7242 88/89 ARMCHAIRS 4 OFF SITE 3 COMP 353.60 318.24 35.36
99 7242 88/89 SYSTEMS DEV CHARGE SITE 3 COMP 1963.00 1766.70 196.30
100 7260 88/89 2 PEDESTALS SITE 3 COMP 183.12 164.80 18.32
</TABLE>
<PAGE>
<TABLE>
EXCLUDED ASSETS:
- ------------------------------------------
<CAPTION>
ASSET VOUCH YEAR DESCRIPTION LOCATION COST ACC DEP'N NBV
NO NO BOUGHT 31/3/98 31/3/98
<S> <C> <C> <C> <C> <C> <C> <C>
87007 7068 87/88 FLOOR CLEANER(NOT WORKING)-MISSING SITE 3 COMP 2964.51 2964.51 0.00
87010 7028 87/88 MEZZANINE FLOOR BLDG 21 SITE 3 COMP 7831.75 7831.75 0.00
87047 7071 87/88 SUB STATION SITE 3 COMP 98127.00 98127.00 0.00
87049 7120 87/88 QUARANTINE STORES SITE 3 COMP 535.83 535.83 0.00
87051 7020 87/88 AIR COMPRESSOR SITE 3 COMP 513.88 513.88 0.00
88019 7299 88/89 PRESSURISE LAYUP ROOM -Equip.Dism. SITE 3 COMP 4000.00 3600.00 400.00
88076 F.C.P.T. 88/89 CLEAN ROOM AIR CONDITION-Equip.DismSITE 3 COMP 6750.00 6750.00 0.00
88087 F.C.P.T. 88/89 INDUST. VACUUMS SITE 3 COMP 173.00 173.00 0.00
89004 7406 89/90 SPRINKLER(POWERHOUSE & TOILETS) SITE 3 COMP 65.00 52.00 13.00
89005 7406 89/90 SPRINKLER SPARE BOX (POWERHOUSE) SITE 3 COMP 165.00 132.00 33.00
89006 7406 89/90 SPRINKLERS(POWERHOUSE & TOILETS) SITE 3 COMP 425.00 340.00 85.00
89021 7429 89/90 O/HEAD CRANE ALARM (BLDG 21) SITE 3 COMP 750.00 600.00 150.00
89047 7482 89/90 FIRE ALARM SYSTEM BLDG 19 SITE 3 COMP 5654.27 4523.41 1130.86
90002 SC7435 90/91 RESITE DUST CONR M/C SITE 3 COMP 275.00 192.50 82.50
25 91/92 WEIGH STATION SITE 2 950.00 570.00 380.00
91013 SC7619 91/92 BAG SEALER - MISSING SITE 3 COMP 2150.00 1290.00 860.00
22 92/93 WATER TEST SITE 2 7157.00 4378.50 2778.50
91018 SC7612 92/93 THERMOCOUPLES SITE 3 COMP 275.00 137.50 137.50
91021 SC7612 92/93 REFURBISH ELECTRICS SITE 3 COMP 1141.00 570.50 570.50
9404/08 93/94 General Labouring-New Seatback CellSITE 3 COM 9015.00 2704.49 4694.32
9403/06 93/94 Electrical Services SITE 3 COM 3527.00 1058.10 1836.59
952 94/95 SEATBACK OFFICES SITE 3 COMP 1289.00 386.70 902.30
9510 23930 94/95 1 Quart Bottle ` SITE 3 HEL 1963.52 589.06 1374.46
9510 24330 94/95 Relocation of Vaporax SITE 3 HEL 11236.00 3370.80 7865.20
9510 24501 94/95 Pipework and 7 drops Site 3 SITE 3 HEL 2369.00 710.70 1658.30
9510 24573 94/95 Electrical Instal-Building 21 SITE 3 HEL 1640.00 492.00 1148.00
9510 25120 94/95 Moving Various Things From Site SITE 3 HEL 740.00 222.00 518.00
9510 25352 94/95 Installation Systems SITE 3 HEL 599.00 179.70 419.30
9510 25356 94/95 Sheet Metal Fabrications & Weld SITE 3 HEL 690.00 207.00 483.00
9510 25634 94/95 Relocation of Vaporax SITE 3 HEL 7865.20 2359.56 5505.64
9510 25635 94/95 Relocation of Vaporax SITE 3 HEL 3370.80 1011.24 2359.56
9510 25831 94/95 Misc. Helmet cell Installation SITE 3 HEL 71.04 21.31 49.73
9510 25835 94/95 Pipework Installation SITE 3 HEL 1152.00 345.60 806.40
9510 26000 94/95 Hydaulic Tank Assembly SITE 3 HEL 4411.00 1323.30 3087.70
9510 26039 94/95 Plywood SITE 3 HEL 234.79 70.44 164.35
9510 26109 94/95 Leyland Floor Paint SITE 3 HEL 129.00 38.70 90.30
9510 26145 94/95 Sheet Metal Fabrication & Welding SITE 3 HEL 4500.00 1350.00 3150.00
9510 26343 94/95 Floor Paint SITE 3 HEL 110.60 33.18 77.42
9510 26416 94/95 Press & Equipment Installation SITE 3 HEL 5000.00 1500.00 3500.00
9510 26419 94/95 Sheet Metal Fabrication & Welding SITE 3 HEL 720.00 216.00 504.00
9510 26422 94/95 Sheet Metal Fabrication & Welding SITE 3 HEL 286.00 85.80 200.20
9510 26432 94/95 OSMA Soil & Vent Systems SITE 3 HEL 13.94 4.18 9.76
9510 26432 94/95 OSMA Soil & Vent Systems SITE 3 HEL 193.73 58.12 135.61
9510 26522 94/95 Collection SITE 3 HEL 263.21 78.96 184.25
9510 26624 94/95 Supply & Installation of Dryer SITE 3 HEL 228.00 68.40 159.60
9510 26914 94/95 Track Bend SITE 3 HEL 1429.25 428.78 1000.48
9510 27264 94/95 Snowrex SITE 3 HEL 1950.00 585.00 1365.00
9510 27313 94/95 New water Supply & Drain SITE 3 HEL 162.50 48.75 113.75
9510 27725 94/95 Screws & Caps SITE 3 HEL 1224.00 367.20 856.80
9510 28129 94/95 Installation SITE 3 HEL 225.00 67.50 157.50
9510 28160 94/95 Water Cooling Sys. & Light. Inst. SITE 3 HEL 3321.00 996.30 2324.70
9510 28475 94/95 SITE 3 HEL 2888.00 866.40 2021.60
9510 28634 94/95 Supp. & Install. of Steam Supp. SysSITE 3 HEL 5266.00 1579.80 3686.20
9510 29086 94/95 Water Drive Unit SITE 3 HEL 4648.00 1394.40 3253.60
9510 29195 94/95 Sealing Ring SITE 3 HEL 16.90 5.07 11.83
9510 29610 94/95 Process Valves SITE 3 HEL 95.78 28.73 67.05
9510 29702 94/95 Erection of Partition SITE 3 HEL 1096.00 328.80 767.20
9510 29609 94/95 Various Supplies SITE 3 HEL 1285.85 385.76 900.10
9510 29708 94/95 Sheet Metal Fabricating & Welding SITE 3 HEL 550.00 165.00 385.00
9510 29715 94/95 Mixing Head SITE 3 HEL 3717.79 1115.34 2602.45
9510 30294 94/95 Swedish Helmet Cell-Elec. Install SITE 3 HEL 2054.00 616.20 1437.80
9510 30293 94/95 Swedish Helmet Cell-Elec. Install SITE 3 HEL 38.00 11.40 26.60
9510 30948 94/95 Swedish Helmet Cell SITE 3 HEL 1006.64 301.99 704.65
9510 30319 94/95 Swedish Helmet Cell-Elec. Install SITE 3 HEL 815.00 244.50 570.50
9510 30314 94/95 Swedish Helmet Cell-Elec. Install SITE 3 HEL 931.00 279.30 651.70
9510 30293 94/95 Swedish Helmet Cell-Elec. Install SITE 3 HEL 739.00 221.70 517.30
9510 30498 94/95 Swedish Helmet Cell SITE 3 HEL 826.64 247.99 578.65
9510 94/95 Capex Accrual Swedish Helmet Cell SITE 3 HEL 19549.00 5864.70 13684.30
9510 95/96 REVERSE ACCRUAL FROM 1994-95 SIEE 3 HELM (14088.00) -2817.60 -11270.40
</TABLE>
<PAGE>
<TABLE>
EXCLUDED ASSETS: LAND AND BUILDINGS
- ------------------------------------------
<CAPTION>
ASSET VOUCH YEAR DESCRIPTION LOCATION COST ACC DEP'N NBV
NO NO BOUGHT 31/3/98 31/3/98
<S> <C> <C> <C> <C> <C> <C> <C>
1 7003 87/88 OFFICE BLDG 21A SITE 3 COMP 157910.69 157910.69 0.00
2 7003 87/88 FACTORY BLDG (BLDG 21) SITE 3 COMP 47402.14 47402.14 0.00
3 7003 87/88 FACTORY BLDG REPAIRS (BLDG 21) SITE 3 COMP 39257.00 35331.30 0.00
4 7003 87/88 SUPPLY & LAY CARPET & MARLEY VINYL SITE 3 COMP 853.00 853.00 0.00
1 7223 88/89 STAIRWAY PARTITION SITE 3 COMP 409.53 368.58 40.95
2 7077 88/89 STAIRWAY PARTITION SITE 3 COMP 830.00 747.00 83.00
4 6066 88/89 WORK AT BLDG 20 SITE 3 COMP 1703.00 1532.70 170.30
10 7003 88/89 CAM OFFICE PROJ 16406R (BLDG 21A) SITE 3 COMP 1014.05 912.65 101.40
11 7003 88/89 REFURB BLDG 21 PROJ 16393 SITE 3 COMP 1220.00 1098.00 122.00
12 7003 88/89 REFURB BLDG 21 PROJ 16393 SITE 3 COMP 758.00 682.20 75.80
13 7003 88/89 REFURB BLDG 21 PROJ 16393 SITE 3 COMP 76.00 68.40 7.60
15 7003 88/89 REFURB BLDG 21 PROJ 16393 SITE 3 COMP 6525.00 5872.50 652.50
15 88/89 ALTER OFFICE DOORS (BLDG 21A) SITE 3 COMP 50.00 45.00 5.00
15 88/89 ROOFLIGHT B20 BAY 4 SITE 3 COMP 470.50 423.45 47.05
15 7003 88/89 REFURB BLDG 21 PROJ 16393 SITE 3 COMP 3305.61 2975.05 330.56
15 7003 88/89 REFURB BLDG 21 PROJ 16393 SITE 3 COMP 5300.42 4770.37 530.05
3 7077 88/89 SUPPLY INST EQUIP BLDG 20 SITE 3 COMP 41126.40 37013.76 4112.64
5 7003 89/90 PROJ 16406R BLDG 21A SITE 3 COMP 2944.00 2355.20 588.80
8 SC7501 90/91 FACTORY REFRESHMENT AREA SITE 3 COMP 4656.35 3259.45 1396.90
12 SC7525 90/91 SUSPENDED CEILING SITE 3 COMP 4283.00 2998.10 1284.90
13 SC7523 90/91 LIGHT IN QA LABORATORY SITE 3 COMP 653.00 457.10 195.90
14 SC7488 90/91 BLDG 19 EXT SITE 3 COMP 155132.12 108592.48 46539.64
15 SC7624 91/92 STORE AREA FOR FLAMMABLE ITEMS SITE 3 COMP 2662.00 1597.20 1064.80
21 92/93 SECURITY FOR LA SITE 2 13933.00 5779.90 8153.10
14 92/93 BLDG SERVICES SITE 2 36259.00 12577.70 23681.30
16 SC7488 92/93 RYTON HEAT VENT RETENTION SITE 3 COMP 942.38 471.19 471.19
17 SC7705 92/93 CONTRIB TO CEL SITE REFURB SITE 3 COMP 60000.00 30000.00 30000.00
18 B9412 93/94 BOUNDRY FENCE SITE 2-3 SITE 3 COMP 25000.00 10000.00 15000.00
9414 93/94 SPRINKLER SYS FOR SITES 2-3 SITES 2 & 3 45055.00 11263.75 33791.25
93/94 TRF SITE 3 COMP (10000.00)-10000.00 0.00
9524 94/95 FOUNDATIONS SEAT BACK CELL SITE 3 COMP 10908.62 2181.72 8726.90
9414 94/95 FIRE WATER TANK BASE SITE 3 HELME 6392.32 1278.47 5113.85
9510 94/95 M/C BASE & DUCTING UNIT SITE 3 HELME 3000.00 600.00 2400.00
9510 94/95 PRE DILING OF SLAB SITE 3 HELME 5950.00 1190.00 4760.00
9510 94/95 BASES DUCTS OF SLAB SITE 3 HELME 24995.00 4999.00 19996.00
9510 94/95 M/C BASES & DUCTING SITE 3 HELME 3000.00 600.00 2400.00
9523 94/95 HELMET PRESS FOUNDATIONS SITE 3 HELME 35000.00 7000.00 28000.00
9414 94/95 FIRE PUMP HOUSE SITES 2 & 3 8333.00 1666.60 6666.40
9523 95/96 HELEMT PRESS FOUNDATION SITE 3 HELM 1949.77 292.47 1657.30
9704 96/97 Site 2 hazard waste storage bund SITE 2 1545.00 154.50 1390.50
Total 747310.13 496874.65 246509.78
</TABLE>
<PAGE>
<TABLE>
EXCLUDED ASSETS: PLANT AND MACHINERY
- ------------------------------------------
<CAPTION>
ASSET VOUCH YEAR DESCRIPTION LOCATION COST ACC DEP'N NBV
NO NO BOUGHT 31/3/98 31/3/98
<S> <C> <C> <C> <C> <C> <C> <C>
9516 ANTEK 95/96 SEAT MOD SITE 3 COMP 510.55 102.11 408.44
88187 ANTEK 88/89 TROLLEY - UNKNOWN SITE 3 COMP 58.94 53.05 5.89
88188 ANTEK 88/89 CABLE TIE GUN - UNKNOWN SITE 3 COMP 40.00 36.00 4.00
88189 ANTEK 88/89 TAPERED TRUCK - UNKNOWN SITE 3 COMP 85.70 77.13 8.57
QUASI PLANT (SEPERATE SHEET) SITE 3 COMP 387604.73 387604.73 0.00
Total 629568.34 552973.74 74346.10
</TABLE>
<PAGE>
<TABLE>
EXCLUDED ASSETS: FIXTURES AND FITTINGS
- ------------------------------------------
<CAPTION>
ASSET VOUCH YEAR DESCRIPTION LOCATION COST ACC DEP'N NBV
NO NO BOUGHT 31/3/98 31/3/98
<S> <C> <C> <C> <C> <C> <C> <C>
102 7275 88/89 ACCRUAL-RADIATORS SITE 3 COMP 200.00 200.00 0.00
103 7278 88/89 ACCRUAL-ELECTRICAL MODIFICATIONS SITE 3 COMP 3600.00 3600.00 0.00
104 7279 88/89 ACCRUAL-EXTRACATION EQUIP SITE 3 COMP 5000.00 5000.00 0.00
105 7295 88/89 ACCRUAL SITE 3 COMP 1000.00 1000.00 0.00
105 7295 88/89 BLDG 20 KITCHEN EXT SUP SITE 3 COMP 989.50 890.55 98.95
108 7317 88/89 ACCRUAL SITE 3 COMP 4900.00 4900.00 0.00
112 7265 88/89 GRUNDIG 2400L-MISSING SITE 3 COMP 238.00 238.00 0.00
112 7265 88/89 GRUNDIG 2080-MISSING SITE 3 COMP 253.00 253.00 0.00
112 7265 88/89 GRUNDIG 535 FOOTCONTROL-MISSING SITE 3 COMP 22.00 22.00 0.00
112 7265 88/89 GRUNDIG 556/514E HEADSET-MISSING SITE 3 COMP 15.60 15.60 0.00
112 7265 88/89 GRUNDIG 670 STENO CASSETTES-MISSINGSITE 3 COMP 31.92 31.92 0.00
114 7236 89/90 KICK PLATES TO FIRE ESCAPE SITE 3 COMP 288.00 230.40 57.60
115 7309 89/90 INSTL FIRE ALARM SITE 3 COMP 240.00 192.00 48.00
115 7309 89/90 POWER LIGHT INSTAL SITE 3 COMP 1586.25 1269.00 317.25
115 7309 89/90 VACUUM LINES SITE 3 COMP 1988.44 1590.75 397.69
115 7309 89/90 MEZZANINE FLOOR SITE 3 COMP 9646.70 7717.36 1929.34
115 7309 89/90 BLDG 21 HEATER SITE 3 COMP 1950.00 1560.00 390.00
116 7232 89/90 WORK DONE BY RSRCH WORKSHOPS SITE 3 COMP 5110.00 4088.00 1022.00
116 7232 89/90 ELECTRICAL WIRING BLDG 19 SITE 3 COMP 2573.70 2058.96 514.74
116 7232 89/90 DOORS BLDG 19 SITE 3 COMP 254.22 203.37 50.85
116 7232 89/90 MALE TOILET DOOR CLOSER BLDG 19 SITE 3 COMP 60.00 48.00 12.00
116 7232 89/90 HEATER CONTROLS BLDG 19 SITE 3 COMP 444.96 355.97 88.99
117 7237 89/90 DRY LINE REAR WALL OF CLEAN ROOM SITE 3 COMP 1085.00 868.00 217.00
117 7237 89/90 FIXING OF SHEETS BLDG 21 SITE 3 COMP 100.00 80.00 20.00
117 7237 89/90 WORKSURFACE 1781-174 SITE 3 COMP 1607.00 1285.60 321.40
119 7254 89/90 2 MICRO TROLLEYS (MISSING) SITE 3 COMP 341.70 273.36 68.34
121 7299 89/90 INSTAL OF PRESSURE SYS LAY-UP RM SITE 3 COMP 943.00 754.40 188.60
121 7299 89/90 ELECTRICAL & PLUMBING WORK LAY-UP SITE 3 COMP 998.24 798.59 199.65
130 7439 89/90 STRUCTURAL MODIFICATIONS LAY-UP RM SITE 3 COMP 1230.00 984.00 246.00
130 7439 89/90 DECORATION & EXT PARTITIONS (ANTEK)SITE 3 COMP 1495.00 1495.00 0.00
130 7439 89/90 AIR BARRIER IN M/C SHOP SITE 3 COMP 369.00 369.00 0.00
130 7439 89/90 INSTALL RADIATORS BLDG 23A SITE 3 COMP 582.92 592.92 0.00
193 FCPT240 89/90 TYPWRITER (MISSING) SITE 3 COMP 646.00 646.00 0.00
194 FCPT245 89/90 FURNITURE FITTINGS - UNKNOWN SITE 3 COMP 263.00 263.00 0.00
195 FCPT247 89/90 FURNITURE FITTINGS - UNKNOWN SITE 3 COMP 299.00 299.00 0.00
196 FCPT248 89/90 FURNITURE FITTINGS - UNKNOWN SITE 3 COMP 487.00 487.00 0.00
198 FCPT327 89/90 OFFICE PARTITIONS - UNKNOWN SITE 3 COMP 928.00 928.00 0.00
190 SC7435 90/91 MEDICAL BAY EQUIP SITE 3 COMP 99.00 69.30 29.70
197 SC7455 90/91 LAST YR'S WIP SITE 3 COMP 396.95 396.95 0.00
198 SC7454 90/91 LAST YR'S WIP SITE 3 COMP 134.20 134.20 0.00
199 SC7485 90/91 LAST YR'S WIP SITE 3 COMP 4338.00 4338.00 0.00
200 SC7533 90/91 REFURB TOILETS BY MEDICAL ROOM SITE 3 COMP 5692.00 5692.00 0.00
201 SC7613 90/91 IMPR FIRE ALARMS SITE 3 COMP 1591.00 954.60 636.40
208 SC7615 90/91 DICTATION EQUIPMENT - MISSING SITE 3 COMP 418.40 418.40 0.00
210 SC7625 90/91 EARTH LINK FOR TELEPHONES SITE 3 COMP 25.00 20.00 5.00
211 SC7625 90/91 1 DDI SET UP SITE 3 COMP 600.00 480.00 120.00
212 SC7625 90/91 60 DDI NO CHARGE SITE 3 COMP 120.00 96.00 24.00
213 SC7625 90/91 12M ACCESS LINE SITE 3 COMP 2750.00 2200.00 550.00
214 SC725 90/91 TELEPHONE SOCKETS SITE 3 COMP 341.00 272.80 68.20
217 CAMHQ3 93/94 RUSTIC OAK TABLE - MISSING SITE 3 COMP 843.50 506.10 337.40
218 SC7706 93/94 FURNITURE- UNKNOWN SITE 3 COMP 2415.94 1449.57 966.37
9520 94/95 SEATBACK OFFICES SITE 3 COMP 3711.00 1113.30 2597.70
9520 95/96 SEATBACK OFFICES SITE 3 COMP 571.15 114.23 456.92
9609 95/96 VENTILATION SYSTEM SEATBACK SITE 3 COMP 14496.00 2899.20 11596.80
Total 380195.86 331075.63 47070.23
</TABLE>
<PAGE>
FOURTH SCHEDULE
EXCLUDED CONTRACTS
1. All contracts of insurance to which the Vendor is a party in relation
to the Business.
2. The Master Hire Agreements between the Vendor or CAL and Bryan Brothers
Contract Hire dated 26 June 1989 relation to vehicles in respect of the
Business (as distinct from the individual contract hire agreements for
vehicles used in the Business which are included in the Contracts).
3. All foreign exchange contracts.
<PAGE>
FIFTH SCHEDULE
TRADEMARKS
<PAGE>
<TABLE>
FIFTH SCHEDULE
<CAPTION>
PAGE 1 17:04:32 30 MAR 1998
Key.......Country........Trademark.Proprietor..........Reg. no...App. no...ClassGoods.........................Renewal due....Status
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
4048 United Kingdom CAMAC Courtaulds Aerospace1540039 1540039 17 Fibre or fabric reinforced 30 JUN 2000 REG
Limited polymer materials and
components made therefrom;
fibre or fabric reinforced
polymer products in sheet,
rods, or block form, ballistic
resistant armour made from
fibre or fabric reinforced
polymer materials; semi-
processed fibre or fabric
reinforced plastics materials.
4075 United Kingdom CAMAC Courtaulds Aerspace1540038 1540038 12 Armoured vehicles; military 30 JUN 2003 REG
vehicles; ballistic resistant
armour bodies, panels and
shields, all for vehicles;
all made of fibre or fabric
reinforced plastics materials;
all included in Class 12; but
not including tyres or inner
tubes
2 Records Processed
</TABLE>
<PAGE>
SIXTH SCHEDULE
PATENTS
<PAGE>
<TABLE>
SIXTH SCHEDULE
<CAPTION>
Courtaulds plc 31 - Schedule of Patents 30 Mar 1998 17:06 Page 1
PPEY
FAM NO. COUNTRY APPLN NO. APPLN DATE PATENT NO. TITLE PATENTEE
<S> <C> <C> <C> <C> <C> <C>
PA2882 Uni. Kingdom [EP] 85307848.3 30 Oct 1985 0184902 Helmet Courtaulds Aerospace Limited
PA2882 Israel 76863 28 Oct 1985 76863 Helmet National Plastics Ltd
PA2882 South Korea 8017/85 29 Oct 1985 77297 Helmet National Plastics Ltd
PA2882 U.S.A. 06/790740 24 Oct 1985 4656674 Helmet National Plastics Ltd
PA3191 United Kingdom 9406609.9 05 Apr 1994 2276933 Hybrid Armour I Courtaulds Aerospace Limited
PA3192 United Kingdom 9406713.9 05 Apr 1994 2276935 Hybrid Armour II Courtaulds Aerospace Limited
PA3194 United Kingdom 9406612.3 05 Apr 1994 2276934 Ceramic Armour Courtaulds Aerospace Limited
PA3195 United Kingdom 9406611.5 05 Apr 1994 2277141 Sandwich Armour Courtaulds Aerospace Limited
REPORT COMPLETED
</TABLE>
SEVENTH SCHEDULE
WARRANTIES
1. THE VENDOR
1.1 (A) Neither the Vendor nor CAL is in voluntary or compulsory
liquidation and no receiver or administrative receiver or trustee has
been appointed over any of the assets employed in the Business, and (B)
the Vendor has full corporate power to carry on the Business as it is
now being carried on.
1.2 No unsatisfied judgement, order or award is outstanding against the
Vendor nor CAL in relation to the Business and no distress or execution
has been levied on, or other process commenced against, any asset of
the Vendor or CAL in relation to the Business.
1.3 The Vendor and CAL each have full corporate power and authority to
enter into and perform its obligations under this Agreement and the
signing of this Agreement does not violate any provision of the
Vendor's or CAL's Memorandum and Articles of Association or any order
arbitration award judgement or decree to which the Vendor or CAL is a
party or by which it is bound.
1.4 The respective Boards of Directors of the Vendor and CAL have taken all
action required by law, their Memorandum and Articles of Association or
otherwise to authorise the signing and performance of this Agreement by
or on behalf of the Vendor and CAL respectively.
1.5 The particulars relating to the Sale Assets set out in the Second,
Third, Fourth, Fifth and Sixth Schedules to this Agreement are true and
accurate in all material respects.
2. SALE ASSETS
2.1 The Vendor or CAL owned at the Accounts Date all the assets included in
the Accounts and particulars of all fixed assets with a cost in excess
of (pound sterling )20,000 acquired or agreed to be acquired by the
Vendor or CAL since the Accounts Date are set out in the Disclosure
Letter.
<PAGE>
2.2 Except for current assets offered for sale or sold in the ordinary
course of trading, the Vendor or CAL has not since the Accounts Date
disposed of any of the assets included in the list of major items of
Equipment set out Part 1 of the Third Schedule or any assets acquired
or agreed to be acquired since the Accounts Date with a cost in excess
of (pound sterling )20,000.
2.3 The Vendor is entitled to sell and will transfer or procure the sale
and transfer of the Sale Assets with full title guarantee on the terms
set out in this Agreement and (with exception of stocks purchased in
the ordinary course of business) no Sale Asset has been acquired on
terms that title does not pass until full payment is made.
2.4 The Vendor's Group has not parted with the ownership, possession or
control of, or disposed or agreed to dispose of, or granted or agreed
to grant any encumbrance or right of pre-emption in respect of, or
offered for sale, its estate or interest in any of the Sale Assets, nor
are any such assets the subject of any factoring arrangements, hire
purchase, conditional sale or conditional credit agreement save (in the
case of Stocks only) in the ordinary course of the Business.
2.5 The Sale Assets, together with the Excluded Assets, comprise all those
assets currently used in the Business as carried on by the Vendor at
the date of this Agreement which are material to the Business.
2.6 Since the Accounts Date the Vendor or CAL has continued to carry out
its usual service and maintenance practices and routines in respect of
the Equipment consistent with its past practice in the Business as set
in the Agreed Bundle as Document 2.3.
3. THE PROPERTY
3.1 So far as the Vendor is aware, the Vendor has not received from a third
party or local authority any written notice, communication or claim of
any nature relating to the Property, which may have a material adverse
effect on the Purchaser's use and enjoyment of the Property.
<PAGE>
3.2 (a) The Property, together with Site 2 and Site 3, comprises all
of the land and premises owned, occupied or otherwise used by
the Vendor or CAL for the purposes of the Business.
(b) The Vendor is in sole and undisputed occupation of the
Property.
3.3 So far as the Vendor is aware, the Property is not subject to any
outgoings other than uniform business rate (except rating surcharge),
water rates and insurance premiums and the Vendor is not at the date of
this Agreement in arrears with any such outgoings.
3.4 The Vendor has not received notification that any planning permission
affecting the Property has been revoked or modified and a period of
three months has expired since the grant of any permission without, so
far as the Vendor is aware, any person making either an application
under Order 53 of the rules of the Supreme Court or an application
under s 288 Town and Country Act 1990, and no application for planning
permission or appeal against the refusal, deemed refusal or conditional
grant of planning permission is awaiting determination.
4. ACCOUNTS AND FINANCIAL
4.1 The Accounts fairly state the position of the Business at the Accounts
Date and the profits or losses of the Business for the year ended on
the Accounts Date. For the purposes of interpreting this Warranty this
Warranty is given only by reference to the Accounting Policies and
otherwise, so far as consistent with the Accounting Policies and with
accounting principles and practices consistently applied by the Vendor
or CAL in the statutory accounts of CAL, generally accepted accounting
principles and practices in the United Kingdom.
4.2 All accounts, books, ledgers, financial and other key records of the
Business are under the ownership or control of the Vendor and include
all records and documents required to be kept by statute. So far as the
Vendor is aware all such records and documents required to be kept by
statute have been maintained in accordance with the law in all material
respects.
<PAGE>
5. PERIOD SINCE THE ACCOUNTS DATE
Since the Accounts Date:-
(a) the Business has been carried on in a normal and proper
manner and so as to maintain the same as a going concern in
all material respects, and
(b) neither the Vendor nor CAL in relation to the Business, has
entered into any unusual contract or commitment or otherwise
departed from its normal course of trading in any material
respect;
(c) save for matters affecting like businesses in a similar way,
there has been no material adverse change in the Business's
financial or trading position taken as a whole; and
(d) no substantial supplier to or customer of the Business has
ceased, or so far as the Vendor is aware notified the Vendor
or CAL that it will cease, purchasing from or supplying to the
Business, or has materially reduced, or so far as the Vendor
is aware notified the Vendor or CAL that it will or is
intending to materially reduce, the level of its purchases
from or supplies to the Business, and for this purpose
"substantial" means a person whose supplies or orders
constitute 5 per cent. or more of the supplies or orders of
the Business;
6. CONTRACTS AND COMMITMENTS
6.1 None of the Contracts:-
(a) was entered into outside the ordinary course of the Business;
or
(b) is incapable of performance with its terms within six months
of the date on which it was entered into or undertaken; or
(c) involves the supply of goods the aggregate sales value of
which will represent in excess of 5 per cent of the turnover
expected by the Vendor for the current financial year for the
Business; or
<PAGE>
(d) is expected so far as the Vendor is aware to result in a loss
on completion of performance
Provided that this sub-clauses (a), (b) and (c) of this Warranty shall
not apply to any Contract the material terms of which are disclosed in
the Disclosure Letter.
6.2 (a) Neither the Vendor nor CAL has received any written notice of
any breach or default by a member of the Vendor's Group of
any of the Contracts which may have a material adverse effect
on the financial or trading position of the Business.
(b) So far as the Vendor is aware no party, to any Contract is in
breach or default of any of the Contracts which may have a
material adverse effect on the financial or trading position
of the Business.
6.3 The signing and completion of this Agreement by the Vendor will not
violate any provision of or result in the acceleration of any
obligation under any material Contract or, under the express terms of
the material Contract concerned, give rise to any right of any party
thereto to terminate, or to the automatic termination of, any of the
Contracts.
6.4 None of the Contracts contains any covenant which will under its terms
limit the freedom of the Purchaser to compete in any line of business
presently conducted by the Business or to compete in any such line of
business in any particular geographical area or otherwise restrict the
Purchaser as to the manner or location in which it may carry on any
part of the Business, Provided that this Warranty shall not apply to
any Contract the material terms of which are disclosed in the
Disclosure Letter.
6.5 Neither the Vendor nor CAL in relation to the Business is a party to
any material contract or arrangement with a member of the Vendor's
Group which is not of an arm's length nature Provided that this
Warranty shall not apply to any Contract the material terms of which
are disclosed in the Disclosure Letter.
<PAGE>
6.6 The Vendor is not in relation to the Business a member of any
partnership or joint venture.
6.7 So far as the Vendor is aware nothing has been done, agreed to be done
or omitted to be done as a result of which either (i) any material
investment or other material grant paid for use in the Business is
liable to be refunded in whole or in part or (ii) any such material
grant for which application has been made will or may not be paid or
may be reduced (whether as a result of the transaction contemplated by
this Agreement or otherwise).
6.8 The copies of the agency and distribution agreements provided to the
Purchaser and identified in Documents [6. to 6.44] in the Agreed Bundle
comprise the only material current such agreements relating to the
Business and so far as the Vendor is aware disclose all the material
current terms of such contracts, and such contracts have not been
materially modified or varied otherwise than as disclosed to the
Purchaser in the Disclosure Letter.
6.9 So far as the Vendor is aware, the Vendor is not obliged to pay any
finders fee or other commission to any person in respect of the sale of
the Business.
6.10 A copy of the standard conditions of sale used by the Business has been
disclosed to the Purchaser. In respect of any Contract which is
material to the Business no obligations (save as provided in such
conditions of sale and/or as may be implied by applicable law) have
been accepted by the Vendor or CAL to service, repair, maintain, take
back or otherwise provide any service after the Effective Time in
respect of defective products supplied by the Business.
7. INTELLECTUAL PROPERTY
7.1 Details of all registered intellectual property (including applications
to register the same) owned by the Vendor or CAL in relation to the
Business and which are material to the operation of the Business are
set out in the Fifth and Sixth Schedules to this Agreement.
<PAGE>
7.2 Details are set out in the Disclosure Letter of all licence and other
agreements relating to intellectual property to which the Vendor or CAL
are a party in relation to the Business (whether as licensor or
licensee). Neither the Vendor nor CAL has received written notice that
it is in breach of any material provision of any such agreement and so
far as the Vendor is aware no third party is in breach of any such
agreement.
7.3 Neither the Vendor nor CAL has received written notice of any claim
that the activities of the Vendor or CAL in relation to the Business
infringe any intellectual property rights of any third party in any
material respect, and neither the Vendor nor CAL pays any royalty or
other payment to any third party in respect of its Intellectual
Property or any processes in respect of the Business.
7.4 The Vendor does not in relation to the Business, carry on business
under a name other than its own corporate name or the Name or a name
which is part of the Intellectual Property.
7.5 None of the computer systems used by the Vendor or CAL exclusively in
relation to the Business is wholly or partly dependent on any other
system or software of or used by a member of the Vendor's Group which
will not transfer to the Purchaser (whether as a transferred asset or a
right to use under the Contracts) under the terms of this Agreement.
7.6 All software used by the Vendor or CAL in its conduct of the Business
is owned by the Vendor or CAL or is the subject of a valid grant of
rights (all material terms which have been disclosed in the Disclosure
Letter) to the Vendor or CAL.
7.7 Other than in the ordinary course of the Business or subject to
appropriate confidentiality undertakings, the Companies have not
disclosed any material Intellectual Property or know-how, trade secrets
or customer lists of the Business to any third party.
7.8 The Companies have not since the Accounts Date other than in the
ordinary course of business to the UK Ministry of Defence assigned or
licensed to any third party or otherwise transferred away from the
Business any intellectual property rights concerning the manufacture of
Vehicles, the absence of rights to which would have a material effect
<PAGE>
on the ability of the Purchaser to operate the Business in the same
manner as such has been operated by the Vendor.
8. COMPLIANCE WITH LAWS AND GOVERNMENTAL PERMITS
8.1 Neither the Vendor nor CAL in relation to the Business, has received
written notice:-
(a) that it has done or omitted to do anything which is a
contravention of any statute, order, regulation or the like
giving rise to any fine, penalty or other liability or
sanction on the part of the Vendor nor CAL; or
(b) that any of the products currently sold by the Business
contravene any UK, European or other laws or regulations,
where the contravention concerned may have a materially adverse
effect on the operation of the Business.
8.2 So far as the Vendor is aware, the Vendor or CAL in relation to the
Business, has all licences (including statutory licences)
authorisations and registrations and consents the absence of which
would materially affect the ability of the Vendor's Group to carry on
the Business. Neither the Vendor nor CAL has received any written
notice of the revocation, suspension or modifications of any of those
licences or consents. So far as the Vendor is aware there is no reason
why any of such permits, licences, permissions and consents may be
revoked or not renewed in the ordinary course.
9. LITIGATION ETC.
9.1 The Vendor is not in relation to the Business engaged in any litigation
or arbitration proceedings in relation to a sum in excess of (pound
sterling )2,000, as plaintiff or defendant and, so far as the Vendor is
aware, there are no such proceedings pending or threatened, either by
or against the Vendor in relation to the Business.
9.2 So far as the Vendor is aware, there is no material dispute with any
revenue, or other official, department in the United Kingdom or
elsewhere, in relation to the affairs of the Business.
<PAGE>
9.3 There is not and has not been in the three years preceding the date of
this Agreement any material dispute with the relevant authorities
relating to tax or social security matters of the Vendor or CAL, in
relation to the Business.
9.4 The Disclosure Letter discloses all claims made by or disputes arising
with customers of the Business since the Accounts Date, of a value in
excess of (pound sterling )20,000, relating to defective products
supplied by the Business.
10. COMPETITION
10.1 Neither the Vendor nor CAL in respect of the Business is prevented by
any judgements from carrying on their business operations or from
competing with any third parties in any areas of business or at any
location.
10.2 Neither the Vendor nor CAL in relation to the Business is a party to
any agreement or arrangement, or has been involved in any business
practice, in respect of which an undertaking has been given by or an
order made against or in relation to it pursuant to any anti-trust or
similar legislation in any jurisdiction in which it carries on business
or has sales.
10.3 Neither the Vendor nor CAL in relation to the Business is a party to
any agreement or arrangement and is not involved in any business
practice in respect of which:
(a) any request for information, statement of objections or
similar matter has been received by the Vendor or CAL from any
court, tribunal, governmental, national or supra-national
authority; or
(b) an application for negative clearance or exemption has been
made by the Vendor or CAL to the Commission of the European
Union; or
(c) any covenants have been given to any third party
preventing the Business completing with any other party in any
part of the World.
<PAGE>
11. INSURANCES
11.1 The Disclosure Letter contains a summary of all insurance policies
maintained by the Vendor or CAL in respect of the Business (the
"Policies"). The premiums related to such insurance coverage are
currently and fully paid. No claim under any Policy in respect of the
Business is outstanding.
11.2 The Disclosure Letter contains an accurate summary of claims under such
policies for sums in excess of (pound sterling )20,000 which have been
made by the Vendor or CAL in respect of the Business in the period of 3
years prior to the date of this Agreement.
12. EMPLOYMENT MATTERS
12.1 All of the Employees are employed by the Vendor in connection with the
Business and no other person other than the Employees is now employed
in connection with the Business by the Vendor or CAL, and as at the
date of this Agreement neither the Vendor nor CAL has made any offer of
employment in respect of the Business which is still outstanding.
12.2 All terms and conditions of employment of the current employees of the
Business are disclosed accurately in all material respects in the
Disclosure Letter, and so far as the Vendor is aware there are
disclosed in the Second Schedule and/or the Disclosure Letter in all
respects accurate particulars of the name, commencement date, age,
position and salary of each of such Employees and whether each Employee
is a member of the Courtaulds Scheme. Save as disclosed in the Second
Schedule and in the Disclosure Letter, there is no remuneration or
other benefits to such Employees or their dependants to which any of
them are legally entitled (whether now or in the future) including
(without limitation) profit sharing, incentive, bonus, commission or
other similar arrangements which relate to the Employees or any of
them.
12.3 There is no outstanding legally binding commitment to increase the
remuneration payable or other benefits provided to any of the Employees
in any material respects.
<PAGE>
12.4 The employment or engagement of each of the Employees may be terminated
by not more than three (3) months notice given at any time without
liability for payment of compensation or damages (other than
compensation payable by law (including without limitation statute,
statutory instrument and regulation)).
12.5 No senior Employee has given, or has been given, notice of termination
of his employment or has given an indication of his intention to
terminate his employment, and no such Employee is the subject of any
disciplinary action, grievance procedure or legal action.
12.6 No trade unions or other organisations are recognised for collective
bargaining purposes in respect of the Business. Neither the Vendor nor
CAL in relation to the Business, is a party to any collective
agreement, dismissal procedures agreement or union membership
agreement.
12.7 So far as the Vendor is aware, no material dispute, claim or proceeding
is subsisting between the Vendor and any Employee or former employee of
the Business, whether arising under contract or common law or statute.
12.8 There is not, and during the twelve months preceding the date of this
Agreement there has not been, any collective industrial action
affecting the Business in any material respect.
12.9 The Vendor or CAL has in respect of all Employees complied in all
material respects with all statutes, regulations, codes of conduct,
collective agreements, terms and conditions of employment, orders and
awards relevant to their conditions of service or to the relations
between the employer and the Employees or any recognised trade union.
12.10 Apart from usual wage or salary payments there are no amounts
outstanding to any of the Employees and no liability has been incurred
by the Vendor in relation to the Employees which remains undischarged
for breach of any contract of service or for redundancy payments,
statutory or otherwise, (including protective awards) or for
compensation or any awards under any employment legislation or
regulations or for wrongful dismissal or unfair dismissal or otherwise
<PAGE>
and no order has been made at any time for the reinstatement or
re-engagement of any of the Employees and no such order is outstanding
in relation to any person formerly employed or engaged in the Business.
12.11 Neither the Vendor nor CAL has agreed to pay any commission, bonus or
other payment to any of the Employees in respect of the sale of the
Business.
13. PENSIONS
13.1 The Courtaulds Scheme is the only arrangement to which the Vendor makes
or could become liable to make payments for providing retirement death,
disability, life assurance or medical benefits, or otherwise to provide
"relevant benefits" within the meaning of section 612 Taxes Act, to or
for any of the Employees or their dependants. No proposal has been
announced to establish any other scheme for providing any such benefits
and neither the Vendor nor CAL provides or has promised to provide any
such benefits in respect of any Employee except under the Courtaulds
Scheme.
13.2 The Courtaulds Scheme is an exempt approved scheme within the meaning
of Chapter 1 Part XIV of the Income and Corporation Taxes Act 1988. The
Employees who are members of the Courtaulds Scheme are contracted out
of the State Earnings Related Pension Scheme by reference to the
Courtaulds Scheme.
13.3 The Courtaulds Scheme complies with and has been managed in accordance
with all applicable laws, regulations and requirements. So far as the
Vendor is aware there has been no failure to comply with any applicable
law, regulation or requirement which would or might result in the loss
of tax approval or qualification of the Courtaulds Scheme.
13.4 The Disclosure Letter contains copies of:-
(a) all trust deeds and rules of the Courtaulds Scheme (including
any draft amendments) and other documents currently
constituting and governing the Courtaulds Scheme;
(b) all explanatory booklets and announcements relating to the
Courtaulds Scheme of current effect; and
<PAGE>
these documents contain details of benefits payable under the
Courtaulds Scheme in respect of the Employees. No power to increase
those benefits or to provide different benefits has been exercised in
respect of the Employees.
13.5 The Vendor has notified the Purchaser of the rate at which
contributions or premiums to the Courtaulds Scheme are paid and the
basis on which they are calculated and whether they are paid in advance
or in arrears. All amounts due to the Courtaulds Scheme in respect of
the Employees have been paid. The Vendor has not made any commitment
which would have the effect of increasing the level of contributions or
premiums to any of Courtaulds Schemes.
13.6 The Courtaulds Scheme has not commenced winding-up or ceased to admit
new members.
13.7 So far as the Vendor is aware, there are no claims outstanding or
threatened against the trustees of the Courtaulds Scheme by or in
respect of any of the Employees.
14. ENVIRONMENTAL MATTERS
14.1 So far as the Vendor is aware neither the Vendor nor CAL is with
respect to the Business in violation of, and the Business as currently
conducted does not violate, in any material respect any Environmental
Law.
14.2 Neither the Vendor nor CAL has received written notice that or alleging
that there exists or has existed in the year preceding the date of this
Agreement any statutory nuisance (as defined in Sections 79-85 of the
Environmental Protection Act 1990) on or arising from the Properties or
any of the other Sale Assets, with respect to or generated by the
Business as currently conducted.
14.3 The Business does not produce or use any substances, or use any
processes in the manufacture or processing of its products, which are
prescribed by the Secretary of State for the Environment, the
Environment Agency or any local authority under any applicable
Environmental Law.
<PAGE>
14.4 Except within the course of regular inspections by the competent
authorities under the respective national laws neither the Vendor nor
CAL in respect of the Business has been the subject of any
environmental audit or investigation by or at the request of any
administrative or regulatory authority and no objections or complaints
relating to environmental matters have been made in writing to the
Vendor or CAL in relation to the Business, by any administrative or
regulatory authorities concerning its conduct.
14.5 The Companies have obtained all licences required by them in relation
to the Business under applicable Environmental Laws in the United
Kingdom, the absence of which would render unlawful the carrying on by
the Vendor or CAL of the Business in the manner in which it is now
carried on.
14.6 Details have been disclosed to the Purchaser of any environmental
investigation, study, audit, test or other report concerning
environmental issues commissioned by the Vendor or CAL from any third
party in relation to the Business or the Property during the last 3
years .
15. TAXATION
15.1 The Purchaser will not by virtue of its purchase of the Sale Assets
from the Vendor under this Agreement become liable for any Taxation
primarily payable by the Vendor, or by any company which is or at any
time has been a member of the same group as the Vendor for any Taxation
purpose, in respect of any period prior to the Effective Time.
15.2 All instruments (other than those which have ceased to have any legal
effect) executed in respect of any Sale Assets have been duly stamped.
<PAGE>
EIGHTH SCHEDULE
CONSIDERATION FOR INDIVIDUAL ASSETS
(1) the Property
- (pound sterling )1 plus 40% of such amount up to a maximum
of(pound sterling )1,325,000 by which the Deferred
Consideration exceeds(pound sterling )44,000;
(2) Equipment
- (pound sterling )1 plus 60% of such amount up to a maximum
of(pound sterling )1,325,000 by which the Deferred
Consideration exceeds(pound sterling )44,000;
(3) Stocks
- The value of such assets as shown in the Working Capital
Statement;
(4) Debts
- The value of such assets as shown in the Working Capital
Statement less (pound sterling )44,000, plus the amount of the
Deferred Consideration up to a maximum of (pound sterling)
44,000;
(5) the benefit of the Contracts and the Records;
- (pound sterling )1
(6) the Trademarks
- (pound sterling )1
(7) the Patents
- (pound sterling) 1 plus such amount up to a maximum of (pound
sterling )50,000 by which the Deferred Consideration exceeds
(pound sterling )1,369,000
(8) the Intellectual Property
- (pound sterling )1
<PAGE>
(9) the Goodwill
- (pound sterling ) 1 plus such amount by which the Deferred
Consideration exceeds(pound sterling )1,419,000
<PAGE>
NINTH SCHEDULE
PENSIONS
1 Interpretation
1.1 For the purposes of this Schedule:-
1.1.1 "Eligible Employees" means those Employees who at
Completion are members of the Vendor's Scheme or who
become members prior to the Transfer Date;
1.1.2 "Transfer Date" means the first anniversary of the
Completion Date or such earlier date as the Vendor
and the Purchaser agree in writing;
1.1.3 "Transitional Period" means the period commencing on
the day immediately after the Completion Date and
ending immediately before the Transfer Date;
1.1.4 "Vendor's Scheme" means the Courtaulds Pension Scheme
or, if the context so requires, its trustees;
1.2 Words and expressions used in Chapter I of Part XIV of the
Income and Corporation Taxes Act 1988 ("the Act"), or in the
Vendor's Scheme, shall have the same meanings in this
Schedule.
1.3 The undertakings by the Purchaser under this Schedule shall be
deemed to be given to the Vendor both for its own benefit and
as agent for the trustees of the Vendor's Scheme.
2 The Vendor's Scheme
2.1 The Vendor shall use its reasonable endeavours to procure
that:
2.1.1 subject to the consent of the Commissioners of Inland
Revenue (which the Vendor shall use its reasonable
endeavours to procure), the Eligible Employees will
be permitted to remain members of the Vendor's Scheme
and the Purchaser will be permitted to participate in
the Vendor's Scheme throughout the Transitional
Period; and
2.1.2 the Vendor's Scheme will be maintained, in relation
to the Eligible Employees, in full force and effect
until after the Transfer Date and, except with the
<PAGE>
consent (such consent not to be unreasonably withheld
or delayed) of the Purchaser:-
2.1.2.1 its provisions will not be amended
in a manner which may materially and
adversely affect any of the Eligible
Employees prior to the Transfer
Date; and
2.1.2.2 no power or discretion will be
exercised in a manner which may
affect materially and adversely the
interests under the Vendor's Scheme
of any Eligible Employee or any
spouse or dependant of such Eligible
Employee; and
2.1.2.3 its provisions will not be amended
in a manner which may materially and
adversely affect the contributions
payable to the Vendor's Scheme by
the Purchaser during the
Transitional Period.
2.2 The Purchaser undertakes that it will:-
2.2.1 pay to the Vendor or Vendor's Scheme (as the Vendor
may direct) contributions in respect of the
Transitional Period, calculated at the rate of 6.35%
per annum of the Fund Earnings (as defined in the
Trust Deed and Rules of the Vendor's Scheme) of the
Eligible Employees;
2.2.2 comply during the Transitional Period in all other
respects with the provisions of the Vendor's Scheme;
2.2.3 not do or omit to do during the Transitional Period
any act or thing whereby the approval of the Vendor's
Scheme as an exempt approved scheme or as a
contracted out scheme would or might be prejudiced;
2.2.4 not increase the Earnings (as defined in the Trust
Deed and Rules of the Vendor's Scheme)of any Eligible
Employee during the Transitional Period by a
percentage exceeding the percentage increase (if any)
in the Index of Retail Prices (All Items) published
by the Central Statistical Office over the
Transitional Period, Provided that, without prejudice
to its liability generally in respect of any breach
of this provision, The Purchaser shall, in the event
and in respect of any breach of this provision and
not later than 14 days after any such increase in
breach of this paragraph shall have taken effect, pay
to the Vendor's Scheme upon demand by the Vendor
such sum as the Vendor's Actuary shall certify as
being necessary to meet the cost to the Vendor's
Scheme of such excess increase; and
<PAGE>
2.2.5 not exercise any power, right or discretion conferred
on the Purchaser by the Vendor's Scheme except on
such terms (whether as to payment of additional
contributions or otherwise) as the Vendor may agree.
2.3 The Vendor and the Purchaser shall take such steps as may be
required of them to procure that the Purchaser holds or is
named in a contracting-out certificate in relation to the
Vendor's Scheme in respect of the Transitional Period and
ceases to hold or be named in such certificate with effect
from the end of such period.
3 Retirement benefits to be provided by the Purchaser
The Purchaser shall procure that retirement benefits are made available
to and in respect of the Eligible Employees under a retirement benefit
scheme or arrangement (referred to in this Schedule as "the Purchaser's
Scheme") in relation to periods after the Transfer Date which shall be
established as approved by the Pension Schemes Office and which shall
have the features and provide the benefits set out in the Annex to this
Schedule.
4 Options for Eligible Employees
The Vendor shall procure that each Eligible Employee will have the
option as at the Transfer Date to transfer his interest in the Vendor's
Scheme either to the Purchaser's Scheme or to another approved pension
policy or to retain his benefits in the Vendor's Scheme, and in each
case the benefits under the Vendor's Scheme will be calculated on a
past service reserve basis, such calculation to be on a basis commonly
used in respect of the withdrawal of participating companies as set out
in Clause 14 of the Trust Deed and Rules of the Vendor's Scheme.
5 No assistance to be given by the Purchaser
The Purchaser undertakes to take no action or assist (whether directly
or indirectly) any Eligible Employee or any other person in any claim
against the Vendor's Scheme which would result in the Vendor's Scheme
having to pay a larger amount than the value referred to in Paragraph 4
above to the Purchaser's Scheme.
<PAGE>
to Ninth Schedule
PROJECT ARGENT
--------------
Summary of Proposed Employee Benefit Schemes
--------------------------------------------
Group Personal Pension Scheme
- -----------------------------
. Contributions:
Employer : 8% of total earnings
Employee : 2% of total earnings
. Benefits; see attached illustration of retirement Benefits
. National Insurance - full Contracted-In rate
Group Death In Service Scheme
- -----------------------------
. Life Assurance Benefit:
Pension Scheme Members : 4 x total earnings
All other permanent employees : 1 x total earnings
. Spouse's Death In Service Pension:
Pension Scheme Members : 20% of total earnings, with
escalation in line with RPI up to
5% to maximum
Group Permanent Health Insurance Scheme
- ---------------------------------------
. Provided for members of Courtaulds Pension Scheme only
. Level Benefit of 50% of total earnings
. Deferred period of 26 weeks
Note
- ----
RPI = Retail Price Index ie price inflation
<PAGE>
<TABLE>
Illustration of Retirement Benefits (B)
Pension at Retirement as percentage of pensionable earnings
(GPPS Benefits with 3% escalation)
<CAPTION>
Age now Estimate of Estimate of Total pension Pension
pension from SERPS at age at age 65 provided from
new scheme at 65 current
age 65 from 10% scheme
contributions
(a) (b) (a)+(b)
% % % %
<S> <C> <C> <C> <C>
25 50 14 64 66
30 41 12 53 53
35 34 11 45 45
40 27 11 38 38
45 20 10 30 30
50 14 9 23 23
55 8 8 16 16
60 4 5 9 9
<FN>
(i) Figures are shown for future service for members at five-year age intervals. Benefits for earlier
service will be in addition, as with the Basic State Pension.
(ii) Figures assume current pensionable earnings of pound sterling 20,000 and that investment returns exceed
earnings increases by 2% per annum. The assumptions used are for illustration purposes and are
not guaranteed. Final benefits will depend on actual experience of Investment returns, earnings
increases etc. The assumptions used are designed to be realistic for a long period in the future.
(iii)All pensions include an allowance for 50% spouse's pension on death in retirement although the
member will have the option in the new scheme whether to purchase a larger single life pension
only. Inland Revenue maximum benefits will apply in all cases.
(iv) Pensions under the new scheme will increase in payment by 3% pa compound.
(v) Benefits relate to men retiring at age 65. For women the SERPS pension would be a smaller
amount but payable from age 60.
(vi) If a member contracts-out, then the pension available from "protected rights" contributions will
replace the SERPS pension.
</FN>
</TABLE>
<PAGE>
SIGNED BY /S/ PAUL A. HENDRICK
- ---------
duly authorised for and on behalf of )
COURTAULDS PLC )
- --------------
in the presence of:- /S/ ADRIAN COOPER
SIGNED BY /S/ DENNIS SMITH
- ---------
duly authorised for and on behalf of )
COURTAULDS AEROSPACE LIMITED )
- ----------------------------
in the presence of:- /S/ ADRIAN COOPER
SIGNED BY /S/ MICHAEL T. FURRY
- ---------
duly authorised for and on behalf of )
NP AEROSPACE LIMITED )
- --------------------
in the presence of:- /S/ ADRIAN COOPER
SIGNED BY /S/ MICHAEL T. FURRY
- ---------
duly authorised for and on behalf of )
REINHOLD INDUSTRIES INC. )
- ------------------------
in the presence of:- /S/ ADRIAN COOPER
