SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) July 2, 1998
Berry Plastics Corporation
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 33-75706-02 35-1813706
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
101 Oakley Street
Evansville, Indiana 47710
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code (812) 424-2904
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On July 2, 1998, NIM Holdings Limited, a newly formed wholly-owned subsidiary
of Berry Plastics Corporation (the "Registrant") and a company incorporated in
England and Wales ("NIM Holdings"), acquired all of the outstanding capital
stock of Norwich Injection Moulders Limited, a company incorporated in England
and Wales (the "Company"). Pursuant to the terms of the Agreement for the
Sale and Purchase of the Entire Issued Share Capital of Norwich Injection
Moulders Limited dated as of July 2, 1998 (the "Agreement"), among NIM
Holdings the Registrant and the shareholders of the Company (including James
E. Barlow, Trevor D. Johnson and Alan R. Sandell and trusts established by the
foregoing), the aggregate purchase price paid was 8.49 million English pounds,
which consisted of cash and the payment of existing indebtedness. A copy of
the Agreement is filed as Exhibit 2.1 hereto, and such document is hereby
incorporated by reference herein.
The Registrant used the proceeds of a new revolving credit facility
and term loan established in the United Kingdom, as well as the proceeds of
term loan facility in the United States, to finance the acquisition. The
facilities were provided by NationsBank, N.A. and other lenders.
The property, plant and equipment acquired has been and will continue
to be used primarily for the manufacture of plastic products, including
injection molded overcaps and closures.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) and (b) The financial statements and pro forma financial
information that are required to be included herein are not so
included, and such statements and information shall be filed not
later than September 15, 1998.
(c) Exhibits
EXHIBIT NO. DOCUMENT
2.1 Agreement for the Sale and Purchase of the Entire
Issued Share Capital of Norwich Injection Moulders
Limited dated as of July 2, 1998, among the
Shareholders of Norwich Injection Moulders Limited,
NIM Holdings Limited and Berry Plastics Corporation.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly causedthis report to be signed on its behalf by the
undersigned hereunto duly authorized.
BERRY PLASTICS CORPORATION
By: /s/ James M. Kratochvil
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
Dated: July 30, 1998
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE
2.1 Agreement for the Sale and Purchase of the Entire
Issued Share Capital of Norwich Injection Moulders
Limited dated as of July 2, 1998, among the
Shareholders of Norwich Injection Moulders Limited,
NIM Holdings Limited and Berry Plastics Corporation.
DATED 2ND JULY 1998
JE BARLOW AND OTHERS (1)
NIM HOLDINGS LIMITED (2)
BERRY PLASTICS CORPORATION (3)
___________________________________________
AGREEMENT FOR THE SALE AND PURCHASE
OF THE ENTIRE ISSUED
SHARE CAPITAL OF
NORWICH INJECTION MOULDERS LIMITED
______________________________________________
CONFORMED COPY
Ref: MO2/18485.2.1
Browne Jacobson
Aldwych House
81 Aldwych
London
WC2B 4HN
Telephone: (0171) 404 1546
Fax: (0171) 836 3882
DX: 37960 Kingsway
Email : [email protected]
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INDEX
<TABLE>
<CAPTION>
<S> <C> <C>
CLAUSES PAGE NO.
1. Interpretation 1
2. Sale and Purchase 7
3. Consideration 8
4. Completion 9
5. Warranties 11
6. Restrictive Covenants 13
7. Guarantee 15
8. Costs 16
9. Announcements 16
10. Interest 16
11. Notices 16
12. General 18
13. Governing Law 19
<CAPTION>
<S> <C> <C>
SCHEDULES
1. The Vendors 20
2. Details of the Company 22
3. Particulars of the Property 24
4. Warranties:
<CAPTION>
<S> <C> <C> <C>
1. Schedules 1 & 2; Capital 26
2. Accounts 26
3. Vendors' Capacity 27
4. Insiders' Interests 27
5. Information Supplied 28
6. Records 28
7. Debtors 28
8. Stocks 28
9. Plant and the Computer System 29
10. Intellectual Property 31
11. Property 32
12. Employees 37
13. Pensions 39
14. Contracts and Customers 41
15. Insurance 44
16. Finance and Working Capital 44
17. Company Law and Authorities 45
18. Insolvency, etc. 45
19. Legal Compliance 46
20. Licences 47
21. Default 47
22. Litigation 47
23. Events since the Accounts Date 47
24. Effects of this Agreement 49
25. Taxation 49
26. Environment 55
<CAPTION>
<S> <C> <C>
5. Form of Resignations 58
6. Form of Acknowledgement 59
7. Form of Power of Attorney 60
8. Tax Covenant 62
9 Adjustment of Consideration 80
10 Provision Regarding Retention Fund 84
11 Limitation of Liability 86
12 Provisions regarding NAV Escrow 89
13 Covenant relating to Asbestos related 91
claims
</TABLE>
DATE: 2nd July 1998
PARTIES:
(1) THE PERSONS whose names and addresses are set out in Schedule 1
(2) NIM HOLDINGS LIMITED (3558202) whose registered office is at Aldwych
House, 81 Aldwych, London WC2B 4HN
(3) BERRY PLASTICS CORPORATION, a Delaware corporation of 101 Oakley
Street, Evansville, Indiana, 47710 0959, USA
IT IS AGREED as follows:
1 INTERPRETATION
In this Agreement (including the Schedules):
1.1 the following words and expressions shall have the following
meanings:
EXPRESSION MEANING
<TABLE>
<CAPTION>
<S> <C>
"Accounting Standards" all Statements of Standard Accounting Practice
adopted and all Financial Reporting Standards
issued by the Accounting Standards Board or such
body as may be prescribed under section 256(1) of
the Companies Act
"Accounts" the Company's audited balance sheet as at, and the
profit and loss account for the financial year
ended on, the Accounts Date together with the
directors' report, the auditors' report, cash flow
statements and notes
"Accounts Date" 31{st} October 1997
"Borrowings" any liabilities or indebtedness in respect of:
I) moneys borrowed (including overdrafts) or
raised;
I) any debenture, bond, note or loan stock;
I) the capital element of all leases (whether in
respect of land, buildings, plant, machinery,
equipment or otherwise) entered into primarily
as a method of raising finance or refinancing
the acquisition of the leased asset;
I) receivables sold or discounted;
I) the sale price of any asset to the extent
paid before the time of sale or delivery by
the person liable to effect such sale or
delivery where the advance payment is arranged
primarily as a method of raising finance or
financing or refinancing the manufacture,
assembly, acquisition or holding of the asset
to be sold;
I) the acquisition cost of any asset to the
extent payable after the time of acquisition
or possession where the deferred payment is
arranged primarily as a method of raising
finance or financing or refinancing the
acquisition of the asset acquired
and shall include any fees or prepayment penalties
related to the prepayment of any such liabilities
or indebtedness other than any such penalties
payable in respect of the prepayment of any
capital leases or hire purchase agreements (not
being imposed by the relevant lessor or hirer
pursuant to any change of control provisions in
the relevant agreement or lease) and penalties
related to indebtedness to Barclays Bank Plc which
can/could be avoided by prepayment on 9{th} July
1998
"Business Day" a day (other than a Saturday) on which banks are
open for the transaction of all normal sterling
banking business in the City of London
"CAA 1990" Capital Allowances Act 1990
"Clearing Bank" a bank which is a member of CHAPS and Town
Clearing Company Limited
"Companies Act" the Companies Act 1985
"Company" Norwich Injection Moulders Limited, registered
number (964668)
"Completion" completion of the sale and purchase of the Shares
"Computer System" all computer hardware, software and networks owned
or used by the Company including all arrangements
relating to provision of maintenance and support,
security, disaster recovery, facilities management
bureau and on-line services to the Company
"Disclosure Letter" the letter (together with any schedules and
appendices thereto and any annexures specified in
it) dated the same date as this Agreement from the
Vendors delivered to the Purchaser prior to the
execution of this Agreement and expressed to be
the Disclosure Letter
"Encumbrance" any interest or equity of any person (including,
without limitation, any right to acquire, option
to acquire or right of pre-emption), any mortgage,
charge, pledge, lien, assignment, hypothecation,
security interest, title retention or any other
security agreement or arrangement affecting the
property of any kind (or rights in it) but
excluding any unsecured guarantee or indemnity
"Guarantor" Berry Plastics Corporation
"holding company" the meaning given in section 736 of the Companies
Act
"ICTA" Income and Corporation Taxes Act 1988
"Indebtedness Statement" a statement in the agreed form as to the amount of
the Company's Borrowings and cash balances that
have been taken into account in calculating the
consideration payable under clause 3.1
"Insider" any Vendor, or present director of the Company or
any person who is or was at the relevant time
connected with the Vendor or any such director
"Intellectual Property Rights" all and any rights in patents, petty patents,
utility models, trade or service marks (whether
registered or unregistered), trade names,
copyrights, registered designs, unregistered
design rights, applications for any of the
foregoing and the right to apply for any of the
foregoing in any part of the world, discoveries,
confidential information, know-how and all or any
other intellectual property whether or not
registered or capable of registration
"Management Accounts" the unaudited management accounts of the Company
for the period from the Accounts Date to the
Management Accounts Date
"Management Accounts Date" 31{st} March 1998
"NAV Estimate" an estimate in agreed form of the Net Assets (as
defined in Schedule 9) of the Company on the date
of Completion;
"NAV Escrow" an escrow account to be opened on Completion in
the joint names of the Vendors' Solicitors and the
Purchaser's Solicitors and which is to be dealt
with in accordance with Schedule 12.
"the Pension the Norwich Injection Moulders Limited Executive
Schemes" Pension Plan, the Norwich Injection Moulders
Limited Staff Pension Scheme (also known as the
Norwich Injection Moulders Limited Individual
Pension Scheme) and the Norwich Injection Moulders
Limited Discretionary Pension Plan
"Planning Acts" every law now or (where the context requires)
formerly in force in England and Wales and (in the
case of any law applying to particular localities)
having application to the locality of the Property
in relation to town and country planning and
development control including without prejudice to
the generality of the foregoing the Local
Government Planning and Land Act 1980, the Town &
Country Planning Act 1990, the Planning (Listed
Buildings and Conservation Areas) Act 1990, the
Planning (Consequential Provisions) Act 1990, the
Planning (Hazardous Substances) Act 1990 and the
Planning & Compensation Act 1991 and any order
made thereunder and any amendments made thereto
from time to time in each case prior to the date
hereof
"Property" the property particulars of which are set out in
Schedule 3 (and if more than one each such
property and each and every part of such property)
"Purchaser" NIM Holdings Limited
"Purchaser's Browne Jacobson, Aldwych House, 81 Aldwych, London
Solicitors" WC2B 4HN
"Shares" all of the issued shares in the capital of the
Company
"Subsidiary" the meaning given in section 736 of the Companies
Act
"Stocks" stocks (as defined in Statement of Standard
Accounting Practice Number 9) of the Company
including but not limited to raw materials,
components, work in progress, finished goods and
consumables.
"Taxation" the meaning given in Schedule 8
"Taxation Authority" any taxing or other authority, whether of the
United Kingdom of elsewhere, competent to impose
any liability to Taxation
"TCGA" Taxation of Chargeable Gains Act 1992
"Tax Covenant" a deed of covenant in the form set out in Schedule
8
"VATA" Value Added Tax Act 1994
"the Vendors" the persons whose names and addresses are set out
in Schedule 1 (and "Vendor" shall be construed
accordingly)
"Vendors' Solicitors" Eversheds of Holland Court, The Close, Norwich NR1
4DX
"Warranties" the warranties, representations and undertakings
set out in clause 5 and Schedule 4;
"Warrantors" J E Barlow, TD Johnson and AR Sandell
</TABLE>
<PAGE>
1.2 section 839 ICTA applies as it applies in that Act to determine
whether one person is connected with another;
1.3 the Schedules form part of this Agreement and shall be of full
force and effect as though their terms were set out in the body
of this Agreement;
1.4 all covenants obligations or liabilities on the part of two or
more persons are given or made jointly and severally;
1.5 any reference to a person shall be construed to include a
reference to a body corporate, unincorporated association and a
partnership;
1.6 headings used in this Agreement are for convenience only and
shall not affect its construction;
1.7 references to clauses or Schedules are (unless otherwise stated
to the contrary) references to clauses of and Schedules to this
Agreement and references to paragraphs are to paragraphs in the
Schedule in which such references appear;
1.8 whenever a document is referred to in this Agreement as being
"in the agreed form" it shall be in the form agreed and
initialled by or on behalf of the Vendors and the Purchaser;
1.9 references to statutory provisions shall be construed as
including:
1.9.1 references to the provisions of any earlier statute which
are directly or indirectly amended, consolidated or re-
enacted by such provisions;
1.9.2 references to those provisions as amended or re-enacted
or modified from time to time prior to the date hereof;
and
1.10 in construing this Agreement the interpretation of general
words shall not be restricted by being followed by words
indicating a particular class of acts, matters or things or
being followed by particular examples.
2 SALE AND PURCHASE
2.1 Each of the Vendors shall sell with full title guarantee and
the Purchaser shall purchase the number of the Shares specified
opposite that Vendor's name in Schedule 1.
2.2 Each of the Shares shall be sold free from any Encumbrance and
with all rights attaching to it including the right for the
Purchaser to receive and retain any dividends or other
distributions declared made or paid after the date of this
Agreement.
2.3 Each of the Vendors waives all rights of pre-emption or any
other right as regards transfer in respect of the Shares
(howsoever conferred).
2.4 The Purchaser shall not be obliged to complete the purchase of
any of the Shares unless the purchase of all of the Shares is
completed simultaneously.
2.5 Completion of the purchase of some of the Shares shall not
affect the rights of the Purchaser with respect to the others.
2.6 Each of the Warrantors hereby terminates the shareholders
agreement relating to the Company among themselves dated 26{th}
July 1996 (as amended by an agreement dated 27{th} February
1998).
3 CONSIDERATION
3.1 The aggregate consideration for the sale of the Shares shall be
<pound-sterling>8,310,823.39 (eight million, three hundred and
ten thousand, eight hundred and twenty three Pounds)
apportioned amongst the Vendors and classes of shares as set
out opposite their names in Schedule 1 but subject to
adjustment after Completion as provided in Schedule 9.
3.2 Subject to clause 3.4 of the said aggregate consideration 90%
of such sum shall be paid on Completion and 10% of such sum
("the Retention Fund") shall be dealt with in accordance with
the provisions set out in Schedule 10.
3.3 The sum of <pound-sterling>8,310,823.39 has been calculated on
the basis of the following formula:
<pound-sterling>8,310,823.39 = <pound-sterling>8,490,000 + x - y
Where:
x = cash in hand and in the bank accounts of the Company as set out
in the Indebtedness Statement on the date of Completion; and
y = the aggregate of the Company's Borrowings as set out in the
Indebtedness Statement on the date of Completion.
3.4 If the NAV Estimate is greater than <pound-sterling>3,623,457
the excess shall on Completion be paid by the Purchaser to the
NAV Escrow. If the NAV Estimate is less than
<pound-sterling>3,623,457 the shortfall shall be deducted from
that part of the aggregate consideration payable to the Vendors
on Completion under Clause 3.2 and shall be paid on Completion
into the NAV Escrow. The amount paid into the NAV Escrow shall
be dealt with in accordance with the provisions set out in
Schedule 12.
3.5 Any sum payable to the Vendors either on Completion or in
accordance with the provisions set out in Schedule 10 shall be
paid in cash by way of (either) single banker's draft drawn on
a Clearing Bank in favour of the Vendors' Solicitors or by such
other method as may be agreed between the parties. The
Vendors' Solicitors are authorised to receive the Consideration
on behalf of the Vendors and payment to them will be a good and
sufficient discharge to the Purchaser and the Purchaser will
not be further concerned as to the application of the moneys so
paid.
3.6 If any of the Retention Fund shall become payable to the
Purchaser by way of compensation or indemnity in accordance
with the provisions of Schedule 10 the consideration shall be
abated by the amount so payable and any rights of the Purchaser
to such compensation or indemnity shall be reduced by the
amount of such abatement, but without prejudice to the right of
the Purchaser to recover the excess of any compensation or
indemnity or any costs or expenses from the Vendors to the
extent not recovered out of the Retention Fund.
4 COMPLETION
4.1 The sale and purchase of the Shares will be completed at the
offices of the Vendors' solicitors immediately after both the
signing and exchanging of this Agreement, when:
4.1.1 the Vendors will produce and deliver to the Purchaser:
<PAGE>
duly executed transfers of the Shares in favour of the
Purchaser (or as it shall direct) together with all
relevant share certificates (or in the case of any lost
certificates an indemnity satisfactory to the
Purchaser) and such waivers or consents as the
Purchaser may require to enable it or its nominees to
be registered as the holder of the Shares;
(a) written resignations from James Edward Barlow as a
director of the Company and from Janet Barlow as
company secretary in the form set out in Schedule 5;
(b) a letter from Lovewell Blake resigning their position
as auditors of the Company, acknowledging that they
have no claim whatsoever against the Company and
containing the statement required by section 394 of the
Companies Act;
(c) the certificate of incorporation, any certificates of
incorporation on change of name, the common seal (if
any) and the statutory books and registers of the
Company (in each case complete and up to date);
(d) all papers, books, records, keys, credit cards and
other property (if any) of the Company which is in the
possession or under the control of any person who
resigns as an officer of the Company in accordance with
this clause;
(e) bank statements in respect of each account of the
Company as at 30{th} June 1998 and full bank
reconciliation statements from the date of the bank
statements down to the date of Completion;
(f) duly executed powers of attorney relating to the
exercise of rights in respect of the Shares in the form
set out in Schedule 7;
(g) all the title deed and supporting documents in
relation to the Property;
(h) a duly executed resignation in agreed form from
Pauline Sandell terminating her employment by the
Company;
4.1.2 the Vendors and the Purchaser shall each execute and
exchange copies of the Tax Covenant;
4.1.3 the Vendors and the Purchaser shall each sign the
Indebtedness Statement and exchange the NAV Estimate;
4.1.4 each of the Vendors shall:
<PAGE>
repay and procure that any spouse or child of such
Vendor or any company of which such Vendor (and/or any
such spouse or child) has control, as "control" is
defined in section 840 ICTA, shall repay all monies
owed to the Company whether due for payment or not;
(i) deliver to the Purchaser an acknowledgement in the
form set out in Schedule 6;
4.1.5 the Vendors shall procure that Alan Sandell,Trevor
Johnson and Adrian Atkins shall enter into service
agreements with the Company in the agreed form;
4.1.6 the Vendors shall procure that a duly convened meeting of
the directors of the Company is held at which:
<PAGE>
the transfers referred to in clause 4.1.1 (subject to
stamping if not previously effected) are approved for
registration in the Company's register of members;
(j) any persons nominated by the Purchaser are appointed
as additional directors of the Company and any person
nominated by the Purchaser is appointed as secretary of
the Company;
(k) the resignations of the resigning director and
secretary are accepted; and
(l) all existing instructions to the bankers of the
Company are revoked and new instructions given to such
bankers as the Purchaser may nominate in such form as
the Purchaser shall direct;
4.1.7 the Purchaser will pay in accordance with clause 3 that
part of the Consideration which is payable to the Vendors
on Completion and as regards the Retention Fund and the
NAV Escrow the Purchaser and the Vendors shall take all
such steps and give all such written instructions as are
necessary or desirable to give effect to the provisions of
Schedules 10 and 12 .
5 WARRANTIES
5.1 The Warrantors warrant and represent to the
Purchaser in the terms of the Warranties.
5.2 However, the Purchaser shall not be entitled to
claim that any fact or combination of facts contrary to any of
the Warranties constitutes a breach of any of the Warranties if
and to the extent that such fact or combination of facts has
been fairly disclosed in the Disclosure Letter.
5.3 The Warrantors:
5.3.1 agree that the Purchaser is entering into this Agreement
in reliance upon the Warranties and that, save as provided
in clause 5.2, no information of the Purchaser (whether
actual or constructive) shall affect its right to bring a
claim under the Warranties or shall operate to reduce the
amount recoverable in respect of the Warranties;
5.3.2 undertake to disclose immediately to the Purchaser
anything which comes to the notice of any of them which
shows that the Warranties are or may be untrue or
misleading;
5.3.3 shall indemnify the Purchaser against any reasonable
costs (including legal costs) or expenses which the
Purchaser may incur, either before or after the
commencement of any action, as a result of any of the
Warranties being untrue or misleading; and
5.3.4 agree with the Purchaser to waive any right which any of
them may have in respect of any misrepresentation,
inaccuracy or omission in any information or advice
supplied or given by the Company or its officers and
employees on which or on whom any of the Warrantors may
have relied before agreeing to any term of this Agreement
including, without limitation, the Tax Covenant or
authorising any statement in the Disclosure Letter.
5.4 Without restricting the rights of the Purchaser or
the ability of the Purchaser to claim damages on any basis
available to it, the Warrantors undertake to the Purchaser
that:
5.4.1 if there is a breach of paragraph 7.1 of Schedule 4
(Debtors) the Warrantors shall, (provided that the
Purchaser has used all reasonable endeavours towards
recovery by the Purchaser in the four month period stated
in that paragraph and appropriated any general payment on
account of a debtor's indebtedness to debts to which
paragraph 7.1 relates in priority to other debts) pay on
demand to the Purchaser in cash an amount equal to the
aggregate of the sums (if any) which remain outstanding in
respect of the debts which are the subject of the said
Warranty provided that, upon such payment by the
Warrantors, the Purchaser shall, if requested so to do,
procure the assignment of such debts (to the extent to
which sums remain outstanding in respect of them) to the
Warrantors or such one or more of them as shall have made
payment to the Purchaser in accordance with this clause
5.4.1 (the costs and expenses relating to such assignment
being borne by the assignee(s)); and
5.4.2 if any of the Warranties other than the Warranty in
paragraph 7.1 of Schedule 4, is proved to be untrue or
misleading the Warrantors shall pay on demand to the
Purchaser the amount necessary to put the Company into the
position which would have existed if the Warranty had been
true or not misleading.
5.5 In determining damages in respect of the Warranties
the Purchaser shall not be required to cause the Company to be
wound up or to rely on the limited liability of the Company in
mitigation of its loss, but shall be deemed for this purpose to
be under a duty to maintain the Company as a going concern and
to make good any deficiency in its assets.
5.6 Without prejudice and subject to the provisions of
paragraph 2.6 of Schedule 11, which shall for all purposes take
precedence over the provisions of this clause 5.6. each of the
Warranties shall be construed as a separate and independent
Warranty and (save where expressly provided to the contrary in
this Agreement) shall not be limited or restricted by reference
to or inference from the terms of any other Warranty or any
other term of this Agreement.
5.7 In this Agreement, unless otherwise specified,
where any Warranty refers to the knowledge, information or
belief (or similar expression) of the Warrantors, each
Warrantor is deemed to have such knowledge, information or
belief which that Warrantor would have obtained had that
Warrantor made all due and careful enquiries into the subject
matter of that Warranty and the knowledge, information or
belief of one of the Warrantors shall be imputed to the other
Warrantors.
5.8 The Purchaser acknowledges that:-
5.8.1 this Agreement sets forth the entire agreement between
the parties with respect to the subject matter covered by
it and supersedes and replaces all prior communications,
drafts, representations, warranties, stipulations,
undertakings and agreements of whatsoever nature, whether
oral or written, between the parties relating thereto;
5.8.2 it does not enter into this Agreement in reliance on any
warranty, representation, undertaking, stipulation or
agreement other than those contained in this Agreement;
5.8.3 its only remedies in respect of any fact or matter which
renders any of the Warranties incorrect or is inconsistent
with any of them are in breach of contract in respect of
the Warranties concerned;
5.8.4 it has no right to rescind this Agreement either for
breach of contract or for negligent or innocent
misrepresentation;
5.8.5 without prejudice to the generality of the foregoing, the
Purchaser waives any right or remedy it may have against
the Warrantors, in respect of any statement (whether oral
or written) of fact or opinion whatsoever, including any
untrue or misleading statement, Warranty or
representation, expressed or implied, made to the
Purchaser or its agents, officers or employees during the
negotiation of or otherwise in connection with this
Agreement save for any Warranty, representation or
undertaking expressly contained in this Agreement; and
5.8.6 the Consideration has been agreed by the Vendors and the
Purchaser having regard (inter alia) to the provisions of
this clause 5.8
provided that the provisions of this clause 5.8 shall not
exclude any liability which the Warrantors would otherwise have
to the Purchaser or any right which the Purchaser may have to
rescind this Agreement in respect of any statements made
fraudulently by the Warrantors prior to the execution of this
Agreement.
5.9 Notwithstanding any other provisions of this Agreement the
liability of the Warrantors hereunder shall be limited in
accordance with the provisions of Schedule 11.
<PAGE>
6 RESTRICTIVE COVENANTS
6.1 For the purpose of assuring to the Purchaser the
full benefit of the Company and in consideration of the
agreement of the Purchaser to buy the Shares on the terms of
this Agreement, each of the Warrantors undertakes to the
Purchaser that without the written consent of the Purchaser
(which in the case of Alan R Sandell and Trevor D Johnson shall
be deemed to have been given by the Purchaser for any acts or
omissions required by their service agreements with the
Company) such Warrantor shall not, whether directly or
indirectly and whether alone or in conjunction with, or on
behalf of any other person and whether as partner, shareholder,
director, manager, consultant, agent or employee or in any
other capacity whatsoever:
6.1.1 for a period of five years immediately following the date
of Completion, canvass or solicit orders or facilitate the
canvassing of or the soliciting of orders from any person
who at any time during the 12 months immediately preceding
the date of Completion was:
(a) a customer or client of the Company; or
(b) negotiating with the Company for the supply by the
Company of goods or services
where the orders are for goods or services which are competitive
with those supplied by the Company at any time during the
12 months immediately preceding the date of Completion;
6.1.2 for a period of five years immediately following the date
of Completion, accept the custom of any person who at any
time during the 24 months immediately preceding the date of
Completion was:
(a) a customer or client of the Company; or
(b) negotiating with the Company for the supply by the
Company of goods or services
where the custom involves the supply of goods or services which
are competitive with those supplied by the Company at any
time during the 12 months immediately preceding the date
of Completion;
6.1.3 for a period of five years immediately following the date
of Completion, canvass, solicit or entice away from the
Company any supplier to the Company who had supplied goods
and/or services to the Company at any time during the 12
months immediately preceding the date of Completion if
such solicitation or enticement causes or would cause such
supplier to cease supplying, or materially to reduce its
supply of, those goods and/or services to the Company;
6.1.4 for a period of 5 years immediately following the date of
Completion work or be engaged or (save as the holder of
shares or other securities in any company which are
quoted, listed or otherwise dealt in on a recognised stock
exchange or other securities market and which confer not
more than 1 per cent of the votes which could be cast at a
general meeting of the company concerned) concerned or
interested in or provide technical, commercial or
professional advice to any trade or business which
operates in the United Kingdom and which manufactures or
supplies goods and/or services which are competitive with
those supplied by the Company at any time during the 12
months immediately preceding the date of Completion;
6.1.5 for a period of five years immediately following the date
of Completion, canvass, solicit or entice away from the
Company any person employed in a managerial, supervisory,
technical, sales or administrative post by, or who was a
consultant to, the Company at the date of Completion or at
any time during the period of six months immediately
preceding the date of Completion;
6.1.6 for a period of 5 years immediately following the date of
Completion in connection with any business carried on by
such Warrantor use the words "Injection" or "Moulders" or
for a period of 10 years immediately following the date of
Completion use the name "Norwich", in conjunction with
either "Injection" or "Moulders" or any colourable
imitation thereof or any names or words similar to or
likely to be confused therewith; or
6.1.7 attempt, or knowingly assist or procure any other person,
to do any of the foregoing things.
6.2 For the purposes of this clause, "Confidential
Information" means trade secrets or confidential information
belonging or relating to the Company and including, without
limitation, information or secrets relating to business or
manufacturing methods and processes, development plans, inventions,
research and development activities, designs, drawings, sources and
supplies of materials used, the identity of customers and potential
customers, prices, margins, special arrangements with customers of
and suppliers to the Company, pricing strategy and marketing
strategy, product and future product details, computer systems and
computer software. Each of the Warrantors undertakes to the
Purchaser that such Warrantor shall not divulge or communicate to
any other person (other than to any officer or employee of the
Company who needs that knowledge in the discharge of duties)
Confidential Information, shall not use or attempt to use any such
Confidential Information for the Warrantor's own benefit or for the
benefit of any other person and shall use all reasonable endeavours
to prevent the publication or disclosure of any Confidential
Information.
6.3 Each of the Warrantors acknowledges that each of
the undertakings contained in clauses 6.1 and 6.2 is reasonable and
for the proper protection of the business of the Company and further
acknowledges that damages may not be an adequate remedy to the
Purchaser for breach of those undertakings.
6.4 The restrictions on the Warrantors contained in
clause 6.2 shall not apply to any information which is or becomes
generally available to the public on a non-confidential basis
through no act or default on the part of any Warrantor.
6.5 Each undertaking contained in clauses 6.1 and 6.2
shall be construed as a separate undertaking and if any one or more
of such undertakings or any part of an undertaking is held to be
against the public interest or unlawful or in any way an
unreasonable restraint of trade, the remaining undertakings or
remaining part of the undertaking shall continue in full force and
effect and shall bind the Warrantors.
7 GUARANTEE
7.1 In consideration of the Vendors entering into this
Agreement with the Purchaser the Guarantor hereby irrevocably
and unconditionally, as a primary obligor, undertakes and
guarantees the due and punctual payment of all sums now or
subsequently payable by the Purchaser to the Vendors under this
Agreement or the Tax Covenant when the same shall become due
and undertakes with the Vendors that if the Purchaser shall
default in the payment of any sum under this Agreement or under
the Tax Covenant the Guarantor will forthwith on demand by the
Vendors pay such sum to the Vendors.
7.2 The guarantee undertaking contained in clause 7.1
is a continuing guarantee and shall remain in force until all
sums payable by the Purchaser under this Agreement have been
fully paid.
7.3 The Guarantor shall not be discharged by time or
any other concessions given to the Purchaser or any third party
by the Vendors or by anything the Vendors may do or omit to do
or by any other dealing or thing which, but for this provision,
would or might discharge the Guarantor.
8 COSTS
Each party hereto shall pay its own costs and expenses of and incidental
to the negotiation preparation and execution of this Agreement and
all documents ancillary to this Agreement, except where otherwise
expressly stated in this Agreement.
9 ANNOUNCEMENTS
No party shall make or permit any person connected with it to make any
announcement disclosure or statement concerning the material terms
and conditions of this sale and purchase on or after Completion
except as required by law or the rules of any exchange or other body
to which such party is subject, or with the written approval of the
other parties, such approval not to be unreasonably withheld or
delayed, but the Purchaser and its investors and affiliates shall be
entitled to notify customers, suppliers and other persons having
business relationships with it or the Company of the fact of the
sale and purchase and to notify its shareholders, financiers and
potential investors of the financial terms of the sale and purchase.
10 INTEREST
If any of the Warrantors become liable to pay the Purchaser or the
Company any sum pursuant to this Agreement, whether a liquidated sum
or by way of damages or otherwise, such Vendor shall be liable to
pay interest on such sum from the due date for payment at the annual
rate of 2% above the base lending rate from time to time of Royal
Bank of Scotland Plc accruing on a daily basis until payment is
made, whether before or after judgment.
<PAGE>
11 NOTICES
11.1 In order to be effective, any notice, demand or
other communication to be served under or pursuant to this
Agreement shall be in writing and shall be served upon any
party to this Agreement by:
11.1.1 posting by first class post (for inland mail); or
11.1.2 posting by airmail (for overseas mail); or
11.1.3 delivery by hand; or
11.1.4 sending by facsimile transmission
to the party to be served at its address or facsimile number given
below or at such other address or number in the United Kingdom
as it may from time to time notify in writing to the other
parties to this Agreement as being the recipient's address or
number for service provided that in the case of a company it
may instead (at the option of the sender) be addressed to its
registered office and in the case of the Vendors, notice may be
served at the address of the Vendors' Solicitors (marked for
the attention of A Croome Esq):
The Purchaser : NIM Holdings Limited
Address: C/o Berry Plastics Corporation, 101 Oakley Street,
Evansville, Indiana 47710-0959, USA
Facsimile Number: 00 1 812 421 9604
Marked for the attention of: Martin R. Imbler
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
with copies to: i.) Berry Plastics Corporation,
101 Oakley Street
Evansville
Indiana 47710-0959
USA
Facsimile No: 00 1 812 421 9604
Attention: Martin R.Imbler
ii) First Atlantic Capital Ltd
135 East 57{th} Street
29{th} Floor
New York, New York 10022
USA
Facsimile No: 00 1 212 750 0954
Attention: Roberto Buaron
</TABLE>
but so that any notice served by facsimile transmission shall
be confirmed by the sender in writing served not later than the
second Business Day after the date of the facsimile
transmission.
11.2 A notice or demand given in accordance with clause
11 shall be deemed to have given or made as follows
11.2.1 if served by hand shall be deemed duly served when left
at the address for service unless such delivery occurs on
a day which is not a Business Day or after 5pm on a
Business Day, in which case it shall be deemed duly served
on the next following Business Day; or
11.2.2 if served by inland mail it shall be deemed duly served
on the second Business Day or if by overseas mail the
fifth Business Day after posting; and
11.2.3 if sent by facsimile transmission it shall be deemed to
have been served at the time of transmission (provided
that where such transmission occurs on a day which is not
a Business Day or after 5pm on a Business Day, service
will be deemed to occur on the next following Business
Day)
and in proving service of the same it shall be sufficient to prove,
in the case of a letter, that such letter was properly stamped
or franked first class or airmail (as relevant) addressed and
placed in the post and, in the case of a facsimile
transmission, that such facsimile was transmitted to the
facsimile number of the addressee referred to above.
11.3 Any demand, notice or communication will be deemed
to have been given to the personal representatives of a
deceased Vendor notwithstanding that no grant of representation
has been made in respect of such Vendor's estate, if the notice
is addressed either:
11.3.1 to the deceased Vendor by name; or
11.3.2 to such Vendor's personal representatives by title
either at the proper address of the Vendor pursuant to
Clause 11.1 or at such other address as may have been
notified by them in writing to the sender as being their
address for service,
and is otherwise served in accordance with the foregoing provisions.
11.4 The Guarantor irrevocably appoints the Purchaser's
Solicitors as its agent to accept service of legal proceedings
in connection with all matters arising out of this Agreement
and the transactions contemplated by it.
<PAGE>
12 GENERAL
12.1 This Agreement shall be binding on and shall continue for the
benefit of each party's successors (as the case may be).
12.2 Notwithstanding Completion each of the agreements, covenants,
obligations, warranties, indemnities and undertakings contained
in this Agreement shall, except in so far as fully performed at
Completion, continue in full force and effect.
12.3 None of the rights of the Purchaser arising out of this
Agreement shall be varied or restricted by the giving of any
time or other indulgence to any person but shall only be
affected by a specific waiver or release by the Purchaser and
any such waiver or release shall be specific to the matters and
the Vendor to whom it relates, shall not be deemed to be a
waiver of any subsequent breach or default and shall in no way
affect the other terms of this Agreement.
12.4 All the rights and remedies expressly provided for by this
Agreement shall not exclude any rights or remedies provided by
law.
12.5 This Agreement may be executed in any number of counterparts by
the different parties hereto or on separate counterparts, each
of which when executed and delivered shall constitute one and
the same instrument.
12.6 Any variation of this Agreement shall be binding only if it is
recorded in a written document signed by or on behalf of all the
parties.
12.7 The Vendors may not assign in whole or in part the benefit or
burden of this Agreement. The Purchaser may assign the benefit
of the Warranties and of the Tax Covenant.
13 GOVERNING LAW
This Agreement shall be governed by and construed in all respects in
accordance with English law and the parties submit to the exclusive
jurisdiction of the English Courts.
IN WITNESS of these matters this document has been executed as a deed and
delivered on the date set out at the beginning of this Agreement.
<PAGE>
SCHEDULE 1
THE VENDORS
<TABLE>
<CAPTION>
Name and Address NUMBER AND CLASS OF SHARES TO BE SOLD
<CAPTION>
<S> <C> <C> <C> <C>
"B" 1p "C" 1P "D" 1P AMOUNT OF CONSIDERATION
Ordinary ORDINARY ORDINARY RECEIVABLE
James Edward BARLOW
Coppertops
Colby Road
Banningham
Norwich
Norfolk NR11 7DY 106 4,394 439,400 45% of the
consideration referred to in
clause 3.3
Trevor David JOHNSON
Thorpe Row Farm House
Herne Lane, Thorpe Row
Dereham
Norfolk NR19 1QE
1,100 - - 11% of the
consideration referred to in
clause 3.3
Alan Robert SANDELL
Scarrow Barn
Thurgarton
Norwich
Norfolk NR11 7HR 44 1,356 135,600 14% of the
consideration referred to in
clause 3.3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
James Edward Barlow and Jan
Barlow (As Trustees)
Coppertops
Colby Road
Banningham
Norwich 15% of the
Norfolk NR11 7DY 1,500 - - consideration referred to in
clause 3.3
Alan SANDELL and Pauline
SANDELL (As Trustees)
Scarrow Barn
Thurgarton
Norwich
Norfolk NR11 7HR
1,500 - - 15% of the consideration
referred to in clause 3.3
</TABLE>
<PAGE>
SCHEDULE 2
DETAILS OF THE COMPANY
<TABLE>
<CAPTION>
Name of Company : Norwich Injection Moulders Limited
<CAPTION>
Registered number : 964668
<CAPTION>
Registered office : Stanford Tuck Road
North Walsham
Norfolk NR28 0JY
<CAPTION>
Date of incorporation : 23 October 1969
<CAPTION>
Place of incorporation : England and Wales
<CAPTION>
Status of Company : private company limited by shares
<CAPTION>
Authorised share capital : <pound-sterling>5,850, divided into 4,250 "B" ordinary shares
of 1p each, 5,750 "C" ordinary shares of 1p each
and 575,000 "D" ordinary shares of 1p each
<CAPTION>
Issued share capital : as authorised share capital above
<S> <C>
<CAPTION>
Directors' full names : James Edward BARLOW
Trevor David JOHNSON
Alan Robert SANDELL
<CAPTION>
Secretary's full name : Janet BARLOW
<CAPTION>
Accounting reference date: 31 October
<CAPTION>
Auditors : Lovewell Blake
<CAPTION>
Bankers : Barclays Bank Plc
Bank accounts - details:
Charges, mortgages: 1. Debenture dated 23 March 1992 with Barclays
Bank plc over the undertaking and all property and
assets present and future including goodwill, book
debts uncalled capital, buildings, fixtures, fixed
plant and machinery
2. Chattels Mortgage dated 29 December 1994 with
Forward Trust limited over one new Uniloy Model
54-3 injection blow moulding machine Serial
Number: 4583.
3. Chattels mortgage dated 4 March 1996 with
Forward Trust Limited over one new MMC 4 Rotary
Indexing Type Lining Machine Serial Number: 104-
337
<S> <C>
VAT registration number: 105 6096 87
</TABLE>
<PAGE>
SCHEDULE 3
PARTICULARS OF THE PROPERTY
<TABLE>
<CAPTION>
<S> <C>
1.
TENURE Freehold
DESCRIPTION Land in North Walsham Industrial Estate, Norfolk
registered with title no. NK 89303
MORTGAGES OR CHARGES See debenture dated 23{rd} March 1992 detailed at
Schedule 2
LEASES/LICENCES TO WHICH SUBJECT None
EXISTING USE Light Industrial
2.
TENURE Leasehold
DESCRIPTION 25 Concorde Road, Norwich
MORTGAGES OR CHARGES See debenture dated 23{rd} March 1992 detailed at
Schedule 2
LEASES/LICENCES TO WHICH SUBJECT Underlease dated 17 October 1997 made between Norwich
Injection Moulders Limited (1) and Norwich City
Council (2)
EXISTING USES Light Industrial. Current use restricted by licence
to underlet and change of use dated 29 September
1997.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
3.
TENURE Freehold
DESCRIPTION Land at North Walsham Industrial Estate, Norfolk
(registered with title No.NK215741)
MORTGAGES OR CHARGES See debenture dated 23{rd} March 1992 detailed at
Schedule 2
LEASES/LICENCES TO WHICH SUBJECT None
EXISTING USE Undeveloped
</TABLE>
<PAGE>
SCHEDULE 4
WARRANTIES
(CLAUSE 5)
1 SCHEDULES 1 & 2; CAPITAL
1.1 The information contained in Schedules 1 and 2 is true,
complete and accurate in all respects.
1.2 The Shares are fully paid and the Vendors are the only holders
of Shares.
1.3 There are no agreements or arrangements in force which grant to
any person any right to call for the allotment or issue of any
share or loan capital of the Company or to convert any stock or
security into share capital of the Company.
1.4 The Company does not have any interest, nor at any time in the
period of six years ended on the date of this Agreement has it
had any interest, in the share or loan capital of any body
corporate.
1.5 There is not, nor is there any agreement or arrangement to
create, any Encumbrance affecting any of the Shares and no
claim has been made by any person to be entitled to any of the
foregoing.
1.6 None of the Vendors or the Company has received any application
or notice of any intended application for the rectification of
the register of members of the Company.
2 ACCOUNTS
2.1 The Accounts and the audited accounts of the Company for the
preceding financial period:
2.1.1 comply with the Companies Act;
2.1.2 have been prepared in accordance with the historical cost
convention, with generally accepted accounting principles
and practices in the United Kingdom and all applicable
Accounting Standards and all applicable abstracts issued
by the Urgent Issues Task Force Committee of the
Accounting Standards Board;
2.1.3 have been prepared using the same bases and policies as
were used in preparing the audited accounts of the Company
in respect of the three financial years immediately
preceding that to which the Accounts relate;
2.1.4 show a true and fair view of the state of affairs of the
Company as at the Accounts Date and of its results for the
financial year ended on the Accounts Date;
2.1.5 attribute a value to the Stocks which does not exceed the
lower of cost or net realisable value as at the Accounts
Date, after wholly writing off all redundant and obsolete
Stocks and writing down appropriately any damaged or slow
moving Stocks; and
2.1.6 are not affected by any extraordinary or exceptional item
(save as disclosed in the Accounts).
2.2 The results shown by the audited profit and loss accounts of
the Company for the two financial years immediately preceding
that to which the Accounts relate have not (save as disclosed
therein) been affected by any extraordinary or exceptional item
rendering the profits or losses for the period covered by those
accounts unusually high or low.
2.3 The Management Accounts:
2.3.1 have been prepared on a basis consistent with the
Company's management accounts prepared since the Accounts
Date ; and
2.3.2 have been carefully prepared using accounting policies
consistent with those used in the preparation of the
Accounts .
3 VENDORS' CAPACITY
The Vendors have the necessary power and authority to enter into and
perform this Agreement and sell and transfer or procure the transfer
of the Shares and this Agreement constitutes valid and binding
obligations of the Vendors in accordance with its terms.
4 INSIDERS' INTERESTS
4.1 There is not outstanding and there has not at any time during
the period of three years ended on the date of this Agreement
been:
4.1.1 any loan, guarantee or indemnity given by the Company in
favour of any Insider or in favour of any other person in
respect of any liability of any Insider;
4.1.2 any loan, guarantee or indemnity given by any Insider in
favour of the Company or in favour of any other person in
respect of any liability of the Company; or
4.1.3 any other contract to which the Company is or was a party
and in which any Insider is or was interested in any way
whatsoever (excluding any contract of employment between
the Company and any of its officers details of which are
set out in the Disclosure Letter).
4.2 No Insider has any interest, direct or indirect, in any trade
or business which competes with the Company's business.
5 INFORMATION SUPPLIED
5.1 The specific disclosures contained in paragraphs 4.1.3 to 25.36
of the Disclosure Letter are not misleadingand have been
carefully and diligently prepared .
5.2 The documents annexed to the Disclosure Letter are complete and
accurate copies of the original document of which they purport
to be a copy.
5.3 The Warrantors have not deliberately concealed any fact or
circumstance relating to the affairs of the Company which they
believe would influence the decision of the Purchaser to enter
into this Agreement.
6 RECORDS
6.1 The accounting records of the Company are up to date and fully
comply with the provisions of sections 221 and 222 of the
Companies Act.
6.2 The Company's records systems and information, and the means of
access to them, are exclusively owned by it and under its
direct control.
7 DEBTORS
7.1 Except to the extent to which provision or reserve has been
made in the Accounts or is made in the Completion Accounts
referred to in Schedule 9, all debts owed to the Company which
are reflected in the Accounts or which have arisen since the
Accounts Date, either have been realised in full or will be
realised in full in the normal course of collection not later
than four months from the date of Completion. The amount of
approximately <pound-sterling>40,000 payable by Sanmex as
referred to at paragraph 7.1 of the Disclosure Letter will be
paid in full by no later than 30{th} April 1999.
7.2 None of the debts recorded in the books of the Company have
been outstanding for more than four months from its due date of
payment.
7.3 The Company has not made any loan or other arrangement with any
person as a result of which it is, or may be, owed any money
other than trade debts incurred in the ordinary course of
business and cash at bank.
7.4 None of the debts of the Company have been the subject of any
factoring or, invoice discounting, by the Company and the
Company is not entitled to the benefit of any debt otherwise
than as the original creditor.
8 STOCKS
8.1 The amount of Stocks held by the Company:
8.1.1 is not abnormally high or low in relation to the current
trading requirements of the Company; and
8.1.2 is adequate for the Company's present requirements.
8.2 The Stocks held by the Company:
8.2.1 are not obsolete or slow moving, except to the extent
they are written off in the Accounts;
8.2.2 which were given a value in drawing up the Accounts and
which are still held by the Company do not have a
realisable value which is less than that which was
ascribed to them in drawing up the Accounts;
8.2.3 are in good condition and fit for their purpose;
8.2.4 insofar as they consist of finished goods and packaging,
comply with all representations and warranties, whether
express or implied, including those as to their
specification, conformity with description and fitness for
purpose;
8.2.5 insofar as they consist of finished goods, comply with
all legal and regulatory requirements, including those of
the United Kingdom and the European Union;
8.2.6 are in the beneficial ownership of the Company free from
any Encumbrance;
8.2.7 do not include goods which have been returned by a
customer; and
8.2.8 do not include goods, or components for goods, which are
not sold in the ordinary course of the Company's business.
8.3 Since the Accounts Date:
8.3.1 the amount of Stocks has not abnormally increased or
decreased;
8.3.2 there have been no price reductions or discounts on the
sale of Stocks; and
8.3.3 Stocks have not been realised at less than they were
reflected in the Accounts.
9 PLANT AND THE COMPUTER SYSTEM
9.1 The plant, machinery, tools, vehicles, equipment and furniture
used in connection with the business of the Company:
9.1.1 are in a safe state of repair and condition and
satisfactory working order and have been regularly and
properly maintained;
9.1.2 are not surplus to the requirements of the Company's
business;
9.1.3 are capable and to the best of the Warrantors knowledge,
information and belief will (subject to normal wear and
tear) remain capable throughout the respective periods of
time during which they are each written down to a nil
value (in accordance with the rates of depreciation
adopted in the Accounts) of meeting the needs for which
they were designed or purchased;
9.1.4 are legally and beneficially owned by the Company free
from any Encumbrance;
9.1.5 are not the subject of any agreement for lease, hire,
hire purchase or sale on deferred terms;
9.1.6 are in the possession or under the control of the
Company;
9.1.7 are situated in the United Kingdom; and
9.1.8 are completely and accurately recorded in the plant
register, a copy of which is annexed to the Disclosure
Letter.
9.2 Full details of all elements of the Computer System, including
all licences and service agreements relating to it to which the
Company is a party have been disclosed to the Purchaser in the
Disclosure Letter.
9.3 The Computer System:
9.3.1 is in full operating order without material downtime or
errors and is fulfilling present requirements of the
Company and will to the best of the Warrantors knowledge,
information and belief fulfil the foreseeable requirements
of the Company;
9.3.2 has adequate security, back-ups, duplication, hardware
and software support and maintenance (including emergency
cover) and trained personnel to ensure, as judged by
reference to the business of the Company as carried on at
Completion:
9.3.2.1 that breaches of security, errors and breakdowns
are kept to a minimum; and
9.3.2.2 that no material disruption will be caused to the
Company or any material part in the event of a breach
of security, error or breakdown.
9.4 The acquisition of the Company by the Purchaser shall not
affect the rights of the Company to have full and unrestricted
access to use each element of the Computer System in the manner
in which such element has been used prior to Completion.
9.5 The Company is not in breach of any arrangements pursuant to
which any element of the Computer System has been made
available by any third party. In addition, the Company has not
received notice of and the Warrantors are not aware of any
circumstances which would enable any third party to terminate
such arrangements.
9.6 A true copy of the Company's internal Millennium compliance
review is disclosed at disclosure document number Volume 3, XI
A (a).
10 INTELLECTUAL PROPERTY
10.1 All Intellectual Property Rights used or required by the
Company in connection with its business are in full force and
effect.
10.2 As regards the Intellectual Property Rights owned by or
licensed to the Company:
10.2.1 details of them are set out in the Disclosure Letter;
10.2.2 they are in the sole beneficial ownership of the
Company;
10.2.3 each of them is valid and enforceable; and
10.2.4 where registerable, the Company is registered as the
sole proprietor.
10.3 The Company has not carried on and does not carry on its
business in such a way as to infringe any Intellectual Property
Rights or moral rights of any person.
10.4 The Company has not received any notices from any third party
in the last three years alleging any infringement of such
party's Intellectual Property Rights.
10.5 The Company has not served on any third party in the last three
years any notice alleging infringement of the Company's
Intellectual Property Rights.
10.6 None of the Intellectual Property Rights owned or licensed by
the Company are being (or are threatened to be) used, claimed,
opposed or attacked by any person or are subject to any claim
or potential claim for compensation pursuant to sections 40 and
41 of the Patents Act 1977 or otherwise.
10.7 No right or licence has been granted (or agreement to grant
right or licence made) under which any person is or will be
permitted to use in any manner or do anything which would or
might otherwise infringe any of the Intellectual Property
Rights owned by the Company.
10.8 The Disclosure Letter contains full details of all licences and
other agreements relating to Intellectual Property Rights to
which the Company is a party. Such agreements are valid,
subsisting and enforceable in accordance with their terms and
the Company is not in breach of any of their provisions.
10.9 The Company is not aware of any, nor to the information,
knowledge and belief of any of the Vendors is there any, breach
of any of the agreements referred to at paragraph 10.6 by any
of the other parties thereto.
11 PROPERTY
11.1 The Property comprises all the properties owned, occupied or
otherwise used by the Company and the particulars of the
Property shown in Schedule 3 are true, complete (insofar as
they relate to the headings in Schedule 3), and accurate in all
respects.
11.2 The written replies given by the Vendors' Solicitors to the
Purchaser's Solicitors' written enquiries concerning the
Property are true complete and accurate in all respects.
11.3 The Company is the legal and beneficial owner of the Property
and the Company has a good and marketable title to the Property
for the estate and interest stated in Schedule 3 and has vacant
possession of the Property.
11.4 There is not and, for so long as the Company has had an
interest in the Property, has not been in relation to the
Property in force any policy relating to defective title or
restrictive covenant indemnity and to the knowledge,
information or belief of the Warrantors no such policy has been
in force prior to the Company having had an interest in the
Property.
11.5 The Property and its deeds are free from any mortgage,
debenture, charge, rent-charge, lien or other encumbrance
securing the repayment of monies or other obligation or
liability of any person.
11.6 The Property is not subject to any outgoings other than
uniform business rates, water rates and insurance premiums and
(where appropriate) rent and service charges.
11.7 There are no current proposals for any increase in the rateable
value of the Property and no appeal has been lodged or is
pending in respect of the rateable value.
11.8 All buildings on the Property have been occupied (within the
meaning of section 65(2) Local Government Finance Act 1988)
continuously since completion of their construction and used
for the purpose for which they were constructed or for which
they have been adapted or converted and all rates have been
paid in full up to the date of this Agreement.
11.9 To the best of the Warrantors' knowledge, information and
belief, the Property is not affected byany covenants,
reservations, conditions, exceptions, stipulations, easements,
profits a prendre, wayleaves, licences, franchises, grants,
restrictions, overriding interests, rights of common or other
rights vested in third parties or any contract to create or
claim made by any person to be entitled to any of the
foregoing.
11.10 To the best of the Warrantors' knowledge, information and
belief there is not any outstanding breach or alleged breach of
any such matter referred to in paragraph 11.9..
11.11 There is not, nor has there been within the 3 years prior to
the date of this Agreement any dispute or complaint whether
actual or threatened with any neighbour, tenant, landlord or
other person relating to the extent, use, enjoyment or
occupation of the Property or with respect to boundary walls
and fences or any means of access to the Property or with
regard to any actual or alleged agreement, or other matter
described in paragraph 11.9 affecting or relating to the
Property.
11.12 The Property is not subject to any option, right of pre-
emption whether exercisable by the Vendors, the Company, a
tenant of the Property or otherwise and the Property is not
subject to any contract to dispose of any interest therein
which has not been completed.
11.13 The use of the Property for the purposes stated in Schedule 3
corresponds to the use to which it is in fact put or (where the
Property is not presently in use) to the use to which it was
last in fact put.
11.14 To the best of the Warrantors' knowledge, information and
belief, planning permission has been obtained or is deemed to
have been granted for the purposes of the Planning Acts with
respect to the construction of all buildings and other
structures on the Property and the present use of the Property
and the use of plant and machinery in connection with such use
and no permission has been given on a temporary or personal
basis or subject to any conditions which may affect the
continued occupation and use of the Property for its present
use and no permission has been suspended or called in and no
application for planning permission is awaiting a decision.
11.15 To the best of the Warrantors' knowledge, information and
belief building regulation consents have been obtained with
respect to all works of construction, alterations and
improvements to the Property.
11.16 To the best of the Warrantors' knowledge, information and
belief compliance is being made and has at all times been made
during the Company's period of ownership in all respects with
planning permissions, orders, and regulations issued under the
Planning Acts and building regulation consents and bye-laws for
the time being in force with respect to the Property.
11.17 All development charges, monetary claims and liabilities under
the Planning Acts or other such legislation have been
discharged and no such liability contingent or otherwise is
outstanding.
11.18 All necessary Industrial Development Certificates have been
obtained with respect to the Property.
11.19 To the best of the Warrantors' knowledge, information and
belief compliance has been made with all applicable statutory
and bye-law requirements with respect to the Property including
without limitation with the requirements as to fire
precautions, under Public Health Acts 1936 - 1961, Control of
Pollution Act 1974, regulations made under the Health and
Safety at Work etc Act 1974, the Highways Act 1980, the
Buildings Act 1984 and the Water Industry Act 1991.
11.20 To the best of the Warrantors' knowledge, information and
belief there is no outstanding and unobserved or unperformed
obligation with respect to the Property necessary to comply
with the requirements (whether formal or informal) of any
competent body exercising statutory or delegated powers.
11.21 To the best of the Warrantors' knowledge, information and
belief the Property is not affected by any requirement relating
to it or its use which although not registered in the Register
of Local Land Charges is capable of registration in that
Register.
11.22 To the best of the Warrantors' knowledge, information and
belief there are not in force or required to be in force any
licences, whether under the Licensing Act 1964 or otherwise,
which apply to the Property.
11.23 To the best of the Warrantors' knowledge, information and
belief there are no compulsory purchase notices, orders or
resolutions affecting the Property nor to the best of such
knowledge, information and belief are there any circumstances
likely to lead to any being made.
11.24 To the best of the Warrantors' knowledge, information and
belief there are no closing, demolition or clearance orders,
enforcement notices or stop notices affecting the Property nor
to the best of the Warrantors' knowledge, information and
belief are there any circumstances likely to lead to any being
made.
11.25 To the best of the Warrantors' knowledge, information and
belief the Property is not:
11.25.1 listed as being of special historic or architectural
importance or located in an area which is designated as a
Conservation Area under section 69 Planning (Listing
Buildings and Conservation Areas) Act 1990;
11.25.2 located in an area or subject to circumstances
rendering it particularly susceptible to flooding;
11.25.3 located in an area affected by mining, clay working,
brine pumping subsidence or limestone mining subsidence;
11.25.4 located in an area affected by underground railways and
is not bounded by overground railways; and
11.25.5 bounded or crossed by any river, stream, canal or
drain.
11.26 There are appurtenant to the Property all rights and easements
necessary for their present use and enjoyment and in
particular:
11.26.1 every means of access to the Property is obtained
directly from roads which have been taken over by the
local or other highway authority and which are
maintainable at the public expense and no means of access
to any of the Property is shared with any other party nor
subject to restriction nor to rights of determination by
any other party; and
11.26.2 the Property is served by water, drainage, electricity
and gas services all of which are connected to the mains
by media located entirely on or under the Property the
passage and provision of such services is uninterrupted
and there is no likely interruption of such passage or
provision.
11.27 To the best of the Warrantors' knowledge, information and
belief, without making any enquiry or commissioning any survey
all of the buildings on the Property are in good and
substantial condition and are fit for the purposes for which
they are presently used.
11.28 The Disclosure Letter fully and accurately sets out details of
all insurance policies relating to the Property.
11.29 The Property is insured at normal premium rates in its full
reinstatement value and against third party and public
liabilities to an adequate extent, no additional premiums are
payable or anticipated and there are no unusual exclusions
excesses or conditions imposed upon such policies.
11.30 All premiums payable in respect of insurance policies relating
to the Property which have become due have been duly paid and
to the best of the Warrantors' knowledge, information and
belief, no circumstances have arisen which would vitiate or
permit the insurers to avoid such policies or alter the terms
on which such policies are issued or to increase the premiums
payable and there are no interests noted on such policies.
11.31 There is annexed to the Disclosure Letter the details of all
leases, tenancies or other rights of occupation in respect of
the Property whether granted by or to the Company and any
contract to grant the same including but without limitation:
11.31.1 details of any lease superior to that held by the
Company known to the Warrantors and of any sub-lease or
other right of occupation granted by any tenant of the
Company or other occupant of the Property of which the
Warrantors are aware;
11.31.2 all provisions relating to use, alterations, repairs,
decorations, sharing of facilities, assignment,
underletting, parting with or sharing of possession and
termination;
11.31.3 details of any side letters, collateral contracts,
licences, consents, waivers or approvals given by the
Company (or to the best of the Warrantors' knowledge,
information and belief its predecessors in title) in
respect of any covenant or other obligation;
11.31.4 details of any waiver or the reservation of the right
of waiver of the exempt treatment of the Property for
Value Added Tax whether by the Company or by any landlord
of the Company (as appropriate); and
11.31.5 details of any rights to break or renew the term.
11.32 In respect of such leases, tenancies or other rights of
occupation as referred to in paragraph 11.31:
11.32.1 all rents, insurance premiums, service charges and
other amounts payable by or (as the case may be)
receivable by the Company are fully paid up-to-date;
11.32.2 to the best of the Warrantors' knowledge, information
and belief (without having made any enquiry or having
commissioned any survey or physical inspection) there is
no breach or alleged breach of any covenant or other
provision nor any exercise of any right of restraint,
forfeiture or entry whether by any of the Vendors the
Company or any other party;
11.32.3 to the best of the Warrantors' knowledge, information
and belief no obligation necessary to comply with any
notice or other requirement given by the landlord under
any leases of the Property is outstanding and unobserved
or unperformed;
11.32.4 there are no rent reviews under any of the leases or
tenancies in progress.
11.33 The Company has not at completion any actual, contingent or
future ascertained or unascertained liability to any person
firm or company in respect of or relating to any lease and/or
licence of any of the Property.
11.34 The Company has not at any time assigned or otherwise disposed
of any property comprised in a lease which is not a New
Tenancy for the purposes of the Landlord and Tenant (Covenants)
Act 1995.
11.35 The Company is not a guarantor under the terms of an
Authorised Guarantee Agreement entered into pursuant to the
Landlord and Tenant (Covenants) Act 1995.
11.36 Since 1st January 1996 whenever the Company has assigned or
otherwise disposed of any reversionary interest in a leasehold
property a release from the landlord's covenants has been
obtained from the tenant or tenants pursuant to the Landlord
and Tenant (Covenants) Act 1995.
12 EMPLOYEES
12.1 Full particulars are set out in the Disclosure Letter of:
12.1.1 the identities, dates of commencement of employment (or
appointment to office) dates of birth and remuneration of
all the employees and officers of the Company;
12.1.2 the terms of any existing contracts of service with the
directors of the Company;
12.1.3 the terms of all existing contracts with employees of
the Company whose emoluments exceed <pound-sterling>25,000
per annum or, in the case of fluctuating amounts, have
exceeded an average of <pound-sterling>25,000 per annum
over the three financial years ending on the Accounts
Date;
12.1.4 all terms of employment of general application;
12.1.5 the terms of all consultancy agreements with the
Company; and
12.1.6 the number of employees of the Company.
12.2 No amounts are owing to any present or former officers or
employees of the Company except for salary which has accrued in
respect of the calendar month in which this Agreement is
executed or for business expenses incurred during the same
month.
12.3 There are no agreements or other arrangements (whether or not
legally binding) between the Company and any trade union or
other body representing employees and the Company has not
entered into any recognition agreement with a trade union nor
has it done any act which might be construed as such.
12.4 There is no agreement or understanding (contractual or
otherwise) between the Company and any employee or ex employee
with respect to:
12.4.1 his or her employment;
12.4.2 ceasing to be employed; or
12.4.3 retirement
12.5 which is not included in the written terms of the employee's
employment or previous employment (as the case may be).
12.6 During the period to which the Accounts relate and since the
Accounts Date, no change has been made in the terms of
employment of any employee or officer of the Company.
12.7 No negotiations for any increase in the emoluments or benefits
of any officer or employee of the Company are current.
12.8 All subsisting contracts of service to which the Company is a
party are terminable by the Company without compensation (other
than under the Employment Rights Act 1996 by giving the minimum
period of notice specified in section 86 of that Act).
12.9 The Company is not, and has not within the twelve months
preceding the date of this Agreement been, involved in any
industrial dispute and there are no facts known to the
Warrantors which suggest that there may be an industrial
dispute involving the Company.
12.10 No past or present employee or officer of the Company has any
claim against the Company for loss of office or arising out of
the termination of his office or employment (including any
redundancy payment) and there is no event which would or might
give rise to any such claim.
12.11 Details of any claims made in the six years prior to the date
of this Agreement for compensation for alleged injury or
illness caused in the course of employment with the Company are
set out in the Disclosure Letter.
12.12 The Company has not established, nor is intending or
negotiating to establish, any share or share option scheme or
arrangement, or profit sharing bonus, commission, or other
incentive scheme for all or any of its employees.
12.13 There is no early retirement scheme applicable to any employee
of the Company.
12.14 The Company has neither introduced nor intends to introduce
any short time working scheme or any redundancy scheme under
which payments greater than those required by statute may be
payable.
12.15 None of the products or services supplied by the Company are
produced or provided by outworkers.
12.16 The Company has not acquired any undertaking or part of one
such that the Transfer of Undertakings (Protection of
Employment) Regulations 1981 apply, or may apply, thereto.
12.17 The Company has in relation to each of its employees (and, so
far as is relevant, to each of its former employees) complied
with the requirements of all statutes, regulations, codes of
conduct and collective agreements;
13 PENSIONS
13.1 Other than the Pension Schemes there are no agreements,
arrangements, customs or practices (whether legally enforceable
or not) in operation at the date of this Agreement for the
payment of or contribution towards any pensions, allowances,
lump sums or other like benefits on retirement or on death or
during periods of sickness or disablement for the benefit of
any Insider or employee or former employee of the Company or
for the benefit of the dependants of any such persons nor has
any proposal been announced to establish any such agreement or
arrangement.
13.2 Full details of the Pension Schemes are included in or attached
to the Disclosure Letter including, without limitation:
13.2.1 copies of all current agreements trust deeds and rules;
13.2.2 copies of the current explanatory booklets issued to
employees of the Company who are or may become members of
the Pension Schemes;
13.2.3 copies of any announcement to employees of the Company
relating to pension matters, in respect of benefit
improvements or other amendments not yet incorporated into
the documentation of the Pension Schemes;
13.2.4 particulars of the assets of the Pension Schemes by
reference to the categories listed in Schedule 3 of the
Occupational Pension Schemes (Disclosure of Information)
Regulations 1986 including particulars of any self
investment; and
13.2.5 a list of the Pension Schemes' active members, with all
particulars relevant to their membership of the Pension
Schemes and necessary to establish their entitlement to
benefits.
13.3 No discretion or power has been exercised under the Pension
Schemes in respect of employees or directors, former employees
and former directors of the Company to:
13.3.1 augment benefits;
13.3.2 admit to membership a director or employee who would not
otherwise have been eligible for admission to membership;
13.3.3 provide in respect of a member a benefit which would not
otherwise be provided in respect of such member; or
13.3.4 pay a contribution into it which would not otherwise
have been paid.
13.4 The Pension Schemes hold no securities issued by, properties
leased to or occupied by and has made no loans which are at the
date of this Agreement outstanding to, the Company or any
Insider.
13.5 There are no charges over any of the assets of the Pension
Schemes.
13.6 All members of the Pension Scheme have received full formal
written notification of all changes to the benefit structure of
the Pension Scheme made since it was established.
13.7 There has been no breach of the trusts of the Pension Schemes
and to the best of the Warrantors' knowledge, information and
belief there are no actions, suits or claims (other than
routine claims for benefits) outstanding pending or threatened
against the trustees or administrator of the Pension Schemes or
against any of the Vendors or the Company or any other employer
which participates in the Pension Schemes in respect of any
act, event, omission or other matter arising out of or in
connection with the Pension Schemes and to the knowledge,
information and belief of the Warrantors there are no
circumstances which may give rise to any such claim.
13.8 The Pension Schemes are approved by the Board of Inland Revenue
for the purposes of Chapter I of Part XIV of ICTA and to the
knowledge, information or belief of the Warrantors there are no
circumstances which might give the Inland Revenue reason to
withdraw such approval.
13.9 The Pension Schemes are not contracted-out schemes for the
purposes of the Pension Schemes Act 1993.
13.10 All contributions which are payable by the Company in
accordance with the provisions of the Pension Schemes and all
contributions due from its members have been duly made and to
the best of the Warrantors' knowledge, information and belief
the Company has fulfilled all its obligations under it.
13.11 The benefits which are prospectively and contingently payable
under the provisions of the Pension Schemes are solely such as
can be provided by the funds available for each of its members.
13.12 No augmentations to existing benefits have been made under the
provisions of the Pension Schemes and no additional benefits
have been granted without its actuary's confirmation in each
case that such augmentation or addition can be borne by it
within the existing funding rate without detriment to the
benefit of its other members or the payment of any additional
contributions which its actuary considers necessary to secure
such augmented or additional benefits.
13.13 The Pension Schemes have been administered in accordance with:
13.13.1 the preservation requirements within the meaning of
section 69 Pension Schemes Act 1993;
13.13.2 the equal access requirements within the meaning of
section 118 Pension Schemes Act 1993;
13.13.3 all relevant provisions of the Pensions Act 1995 and
any regulation made pursuant to that Act; and
13.13.4 all relevant provisions of the law of the European
Communities.
13.14 Each of the Pension Schemes is a "relevant ear-marked scheme"
and "wholly insured" as defined in Regulation 1 of the
Occupational Pension Schemes (Scheme Administration)
Regulations 1996 and Regulation 10 of the Occupational Pension
Schemes (Investment) Regulations 1996 respectively.
13.15 The pensions as currently paid by the Company to Mr and Mrs
Morrison, details of which are contained in the Disclosure
Letter, satisfy in full the Company's obligation to pay
pensions to Mr and Mrs Morrison pursuant to the agreements
between the Company and Mr and Mrs Morrison dated 25{th}
November 1983 and 1{st} June 1987 subject to an obligation to
pay to Mrs Morrison a sum equal to four ninth's of the pension
currently paid to Mr Morrison for such period as she shall
survive him.
14 CONTRACTS AND CUSTOMERS
14.1 The Company is not, a party to any contract, transaction, or
arrangement which:
14.1.1 is a contract of an unusually or abnormally onerous
nature, or outside the ordinary and proper course of
business;
14.1.2 is otherwise than by way of bargain at arm's length;
14.1.3 is of a long-term nature (that is, unlikely to have been
fully performed, in accordance with its terms, more than
six months after the date on which it was entered into or
undertaken);
14.1.4 is considered by the Warrantors to be likely to result
in a loss to the Company;
14.1.5 cannot based on the Company's existing capability
readily be fulfilled or performed by the Company on time
or without undue or unusual expenditure of money or
effort;
14.1.6 involves payment by or to the Company by reference to
fluctuations in the index of retail prices, or any other
index, or in the rate of exchange for currency;
14.1.7 provides for payment to or by the Company in any
currency other than Sterling;
14.1.8 is a forward contract or option for the sale or purchase
of any commodity or currency;
14.1.9 involves or is likely to involve an aggregate
consideration payable by the Company in excess of
<pound-sterling>100,000 or involves the supply of goods
and services by the Company with a net sales value in
excess of <pound-sterling>75,000;
14.1.10 restricts its freedom to engage in any activity or
business or confines its activity or business to a
particular place;
14.1.11 is a guarantee or contract of indemnity by virtue of
which it is under any actual or contingent liability;
14.1.12 by reason of the sale of the Shares or any provision of
this Agreement, gives any other contracting party the
right to terminate or vary the contract or create or
increase any obligation or liability of the Company;
14.1.13 is a distributorship or agency contract or arrangement
whether or not legally binding;
14.1.14 means that the Company is, or has agreed to become, a
member of any joint venture, consortium or partnership or
other unincorporated association;
14.1.15 involves the Company in any actual or contingent
liability in respect of property which it has previously
occupied or in which it had an interest including without
limitation in respect of any leasehold land assigned or
disposed of by it;
14.1.16 involves the Company in the payment of a finder's fee
or commission relating to the sale of the Shares; or
14.1.17 requires the consent of any third party to the sale of
the Shares.
14.2 The Company is not party to any contract where:
14.2.1 notice of termination has been given or received by the
Company or which the Warrantors have (without having made
any enquiry) reason to believe will be terminated (or not
renewed on any renewal date or the expiry of a fixed term)
by any other party to it; and
14.2.2 the liability or prospective liability of the Company is
guaranteed by any person.
14.3 The Company is not in breach of any contract to which it is a
party, and to the best of the Warrantors' knowledge,
information and belief no other party to any such contract is
in breach of it. To the knowledge, information or belief of the
Warrantors there are no grounds for the termination,
rescission, avoidance or repudiation of any contract by the
Company or any other party to any such contract.
14.4 No offer, quote or tender given or made by the Company outside
of the ordinary course of its business on or before the date of
this Agreement is capable of giving rise to a contract by the
unilateral act of a third party.
14.5 The Company has not accepted any obligation (other than an
obligation arising under statute to service, repair or maintain
or take back any goods or products that would apply after the
goods or products have been delivered by it.
14.6 The Company has not waived the rights under any contract to
which the Company is now a party.
14.7 In the period of twelve months prior to the date of this
Agreement, no customer of the Company providing income of more
than <pound-sterling>250,000 in such period:
14.7.1 has ceased to trade with the Company;
14.7.2 has materially reduced the amount of business which it
carries on with the Company; or
14.7.3 has materially changed the terms on which it carries on
business with the Company,
and no indication has been received by the Company or the Vendors
that there will or is likely to be any such cessation,
reduction or change.
14.8 In the period of twelve months prior to the date of this
Agreement, no substantial supplier of the Company:
14.8.1 has ceased to trade with the Company;
14.8.2 has materially reduced the amount of business which it
carries on with the Company; or
14.8.3 has materially changed the terms on which it carries on
business with the Company,
and no indication has been received by the Company or the
Warrantors that there will or is likely to be any such
cessation, reduction or change.
15 INSURANCE
15.1 The Disclosure Letter sets out full details of the Company's
insurance policies in effect in relation to its business and
assets.
15.2 The Company has at all times effected such insurances as are
required by law.
15.3 All premiums due in relation to the Company's insurances
detailed in the Disclosure Letter have been paid and to the
best of the Warrantors' knowledge, information and belief there
are no circumstances which might lead to any liability under
such insurance being avoided by the insurers or the premiums
being increased.
15.4 There is no claim outstanding under any policy of insurance nor
to the knowledge, information or belief of any of the
Warrantors are there circumstances likely to give rise to a
claim.
16 FINANCE AND WORKING CAPITAL
16.1 The total amount borrowed by the Company from its bankers does
not exceed its facilities and the total amount borrowed by the
Company from whatsoever source does not exceed any limitation
on its borrowing contained in its articles of association, or
in any debenture or loan stock, trust deed or other document.
16.2 Full and accurate details of all overdrafts, loans or other
financial facilities outstanding or available to the Company
are set out in the Disclosure Letter. Nothing has been done
whereby the continuance of any such facilities in full force
and effect might be affected or prejudiced.
16.3 The Disclosure Letter contains a statement of all the bank
accounts of the Company
16.4 No circumstances have arisen which could, with the giving of
notice or lapse of time or both, entitle a provider of finance
to the Company (other than on a normal overdraft facility) to
call in the whole or any part of the monies advanced or to
alter the terms of a facility or to enforce a security and no
provider of finance to the Company on overdraft facility has
demanded repayment or indicated that the existing facility will
be withdrawn or reduced or not renewed or that any terms
thereof will be altered to the disadvantage of the Company.
16.5 The Company has not engaged in any borrowing or financing
transaction or arrangement which does not appear as borrowings
in its statutory accounts.
16.6 No grants, subsidies and allowances have been applied for or
received by the Company from any government, authority, body or
agency (whether supra national, national, regional or local)
which may at any time be repaid or repayable.
17 COMPANY LAW AND AUTHORITIES
17.1 The memorandum and articles of association of the Company in
the form annexed to the Disclosure Letter are complete and
accurate and have embodied in them or annexed to them copies of
all resolutions and agreements as are referred to in section
380 of the Companies Act, and all amendments to them (if any)
were duly and properly made.
17.2 The register of members and the other statutory books of the
Company are up to date, have been properly kept and contain an
accurate and complete record of the matters with which they
should deal and no notice that any of them is incorrect or
should be rectified has been received by the Company or any of
the Vendors.
17.3 All such resolutions, returns and other documents required to
be delivered to the Registrar of Companies have been duly
delivered and are true and accurate and no such resolutions,
returns or other documents have been filed in the period of 14
days prior to the date of this Agreement.
17.4 None of the activities of the Company is ultra vires the
Company.
17.5 No person is or has been a shadow director, as defined by the
Companies Act, of the Company for any period who has not for
all purposes been a director throughout the same period.
17.6 No power of attorney given by the Company is in force.
18 INSOLVENCY, ETC.
18.1 No order has been made or petition presented or resolution
passed for the winding up of the Company or for an
administration order in respect of the Company.
18.2 No administrative receiver and/or manager has been appointed to
the Company's business or assets or any part thereof.
18.3 No distress, execution or other process which remains
undischarged has been levied on the assets of the Company.
18.4 The Company has not stopped payment to its creditors and is not
insolvent within the meaning of section 123 of the Insolvency
Act 1986 and the Company has not received a written demand in
accordance with section 123(1)(a) of the Insolvency Act 1986.
18.5 No voluntary arrangement has been approved under Part I of the
Insolvency Act 1986 and no compromise or arrangement has been
sanctioned under section 425 of the Companies Act in respect of
the Company.
18.6 No disqualification order has at any time been made pursuant to
the provisions of the Company Directors Disqualification Act
1986 against any officer of the Company or any person who is
not such an officer who takes part in the management of the
Company.
18.7 The Company has not been a party to any transaction at an
undervalue for the purpose of section 238 or section 239 of the
Insolvency Act 1986 nor has it given or to the best of the
Warrantors knowledge, information and belief received any
preference for the purposes of section 239 or section 340 of
the Insolvency Act 1986, in either case within a period of 2
years ending on the date of this Agreement.
18.8 To the knowledge, information or belief of the Warrantors there
are no facts which are likely to give rise to any of the events
or circumstances referred to in paragraphs 18.1 to 18.7.
19 LEGAL COMPLIANCE
19.1 Neither the Company, nor any of its officers, agents or
employees (during the course of their duties in relation to the
Company) have committed, or omitted to do, any act or thing the
commission or omission of which is, in contravention of any
act, order, regulation or the like in the United Kingdom the
European Union or anywhere else the Company carries on its
business and which is lilely to have a material adverse effect
on the Company.
19.2 Without limiting the generality of the foregoing, the Company
has not done or omitted to do any act or thing in contravention
of the provisions of the Restrictive Trade Practices Acts 1976
and 1977, the Fair Trading Act 1973, the Competition Act 1980,
Articles 85 and 86 of the Treaty of Rome, the Resale Prices Act
1976, the Trade Descriptions Act 1968, the Consumer Credit Act
1974, the Consumer Protection Act 1987, the Companies Act, the
Financial Services Act 1986 and the Banking Act 1987 and which
is likely to have a material adverse effect on the Company
19.3 There has not been within the six years prior to the date of
this Agreement and there is not to the best of the Warrantors'
knowledge, information and belief pending or in existence any
investigation or enquiry by, or on behalf of, any governmental
or other body into the affairs of the Company.
20 LICENCES
The Company has all licences and consents required for the carrying on of
its business and is not in breach of the terms or conditions of such
licences and consents and there are no pending or (to the knowledge,
information or belief of the Warrantors) threatened proceedings
which might in any material adverse way affect such licences and
consents. To the knowledge, information or belief of the
Warrantors there is no reason why any of them should be suspended,
threatened or revoked or be invalid. Copies of all such licences
and consents are attached to the Disclosure Letter.
21 DEFAULT
Since the Accounts Date to the best of the Warrantors' knowledge
information and belief the Company has not manufactured, sold or
supplied or agreed to manufacture, sell or supply any products
and/or services which were, at the date of sale or have since proved
to be, in any respect faulty, defective or dangerous, or which did
not on the date of sale comply in any respect with any warranties or
representations, expressly or impliedly made by it, or with
customers' specifications or with all applicable statutes,
regulations, orders or standards.
22 LITIGATION
22.1 Apart from normal debt collection for amounts not exceeding an
aggregate of
<pound-sterling>10,000, neither the Company nor any person for
whose acts or defaults in the matter it may be contractually or
vicariously liable is involved in any civil criminal or
arbitration proceedings or reference of any dispute to an
expert and to the knowledge, information or belief of the
Warrantors (i) no such proceeding is pending or threatened
against the Company or any such person and (ii) there are no
facts likely to give rise to such proceedings or reference.
22.2 There is no unsatisfied judgment or unfulfilled order
outstanding against the Company and the Company is not party to
any undertaking or assurance given to a court, tribunal or any
other person in connection with the determination or settlement
of any claim or proceedings.
23 EVENTS SINCE THE ACCOUNTS DATE
Since the Accounts Date:
23.1 the business of the Company has been carried on in the ordinary
and usual course and in the same manner, including nature and
scope, as in the financial year ended on the Accounts Date;
23.2 there has been no material adverse change in the financial or
trading position or prospects of the Company including, without
limitation, any decrease in turnover (whether by value or by
volume) or in the gross or net profits margins, or in
liabilities (actual or contingent) or expenses (direct or
indirect) of the Company as compared with the corresponding
months in the financial year ended on the Accounts Date;
23.3 there has been no reduction in the value of the net assets of
the Company determined in accordance with the same accounting
policies as those applied in the Accounts (on the basis that
each of the assets of the Company is valued at a figure no
greater than the value attributed to it in the Accounts or, in
the case of any of the said assets acquired by the Company
after the Accounts Date, at a figure no greater than cost);
23.4 the business has not been adversely affected by the loss of any
contract or customer or source or supply or by any other factor
not affecting similar businesses to a like extent;
23.5 the Company has not acquired, or agreed to acquire, any
tangible asset, single Intellectual Property Right or
investment having a value in excess of <pound-sterling>25,000
or tangible assets (excluding Stocks), Intellectual Property
Rights, or investments having an aggregate value in excess of
<pound-sterling>40,000;
23.6 the Company has not disposed of, or agreed to dispose of, any
tangible asset (excluding Stocks), any single Intellectual
Property Right or investment either having a value reflected in
the Accounts in excess of <pound-sterling>15,000 or acquired
since the Accounts Date;
23.7 the Company has not borrowed any money or raised any money in
the nature of borrowings except for borrowings on overdraft in
the ordinary course of business from Barclays Bank Plc within
the Company's existing overdraft facility with that bank as set
out in the Disclosure Letter;
23.8 no distributions within the meaning of section 209 ICTA have
been declared paid or made save as provided for in the
Accounts;
23.9 no items of Stocks, which are reflected in the Accounts as
finished goods or items purchased for resale and which are
still held by the Company, have been sold for less than their
value as reflected in the Accounts;
23.10 no debtor has been released by the Company on terms that the
debtor pays less than the face value of the debt, no debt has
been subordinated, written down or written off, provided
against (in whole or in part), factored or assigned, the
Company has not agreed to do any of the foregoing and no debt
in excess of <pound-sterling>5,000 has proved to be
irrecoverable;
23.11 no provision or reserve included in the Accounts has proved to
be inadequate in the light of subsequent circumstances and
there are no circumstances known to the Warrantors which
indicate that any such provision or reserve may prove to be
inadequate;
23.12 the Company has not changed its accounting reference date;
23.13 no payment has been made by the Company to, or benefit
conferred (directly or indirectly) on, any of the Vendors or
any Insider, save as specified in the Disclosure Letter; and
23.14 the Company has not incurred any fees or expenses in
connection with the transaction contemplated by this Agreement
and has incurred no liability to KPMG in connection with such
transaction or to Lovewell Blake other than, in the case of
Lovewell Blake work carried out in its capacity as the
Company's auditor.
24 EFFECTS OF THIS AGREEMENT
24.1 To the knowledge, information or belief of the Vendors without
having made any enquiry the acquisition of the Shares will not
affect the Company's relationship with its suppliers and
customers.
24.2 No brokers or finders fee is payable by the Company to any
party in respect of the transaction contemplated by this
Agreement.
25 TAXATION
RETURNS, DEDUCTIONS, DISPUTES
25.1 In the six years preceding the Accounts Date the Company has
duly and punctually paid all Taxation which it has become
liable to pay and is under no liability to pay any penalty,
interest, surcharge or fine in connection with any Taxation.
25.2 In the six years preceding the Accounts Date the Company has
within any applicable time limits made all such returns,
carried out all necessary registrations, provided all
information requested by any Taxation Authority by means of
full and accurate disclosure of all facts and material
circumstances and maintained all such records in relation to
Taxation as are required to be made or provided or maintained
by the Company.
25.3 In the six years preceding the Accounts Date the Company has
properly operated any and all systems of deduction of Taxation
on payments which it has made or has been treated as having
made to its employees and payment of National Insurance
contributions and social security contributions and has
complied with all its reporting obligations to all Taxation
Authorities or other appropriate authorities in all
jurisdictions and in connection with the benefits provided for
existing or former officers employees and directors of the
Company.
25.4 The Company is not involved in any dispute in relation to
Taxation and there are no circumstances known to the Warrantors
likely to give rise to such dispute.
25.5 In the six years preceding the Accounts Date no Taxation
Authority has investigated the Company or given notification
that it intends to commence investigation and there are no
circumstances known to the Warrantors likely to give rise to an
investigation.
25.6 In the six years preceding the Accounts Date the Company has
made all deductions in respect of or on account of any Taxation
from any payments made by it which it is obliged to make and
has accounted in full (where payment has already become due) to
the relevant Taxation Authority for all amounts so deducted.
25.7 There is set out in the Disclosure Letter with express
reference to this warranty full details of all matters relating
to Taxation in respect of which the Company (whether alone or
jointly with any other person) has an outstanding entitlement
or obligation:
25.7.1 to make any claim (including a supplementary claim) for
relief from Taxation or to make any claim for repayment of
any amount of tax paid or to make any election for one
type of relief or one basis system or method of taxation
as opposed to another where such claim or election is
taken into account in the preparation of the Accounts;
25.7.2 to make any appeal (including a further appeal) against
an assessment to Taxation; and
25.7.3 to make any application for the postponement of payment
of Taxation.
BASE VALUES, CAPITAL GAINS
25.8 The Company has sufficient records relating to past events to
calculate the liability to Taxation or relief which would arise
on any disposal or on the realisation of any asset owned at the
Accounts Date or acquired since that date but before
Completion.
25.9 The value attributed to each asset of the Company in, or for
the purposes of, the Accounts as at the Accounts Date is such
that on any disposal thereof for a consideration equal to such
value (and disregarding any right to claim any allowance or
relief) no liability to Taxation in respect of any gain
(including any gain deemed to arise for Taxation purposes) will
arise.
25.10 No liability to Taxation will arise on the disposal by the
Company of any asset acquired since the Accounts Date for a
consideration equal to the consideration actually given for the
acquisition.
25.11 The Company has not made a claim under sections 152-158 (roll
over relief), 175 (replacement of business assets by members of
a group), 247 (roll over relief on compulsory acquisition)
TCGA.
25.12 The Company has not since the Accounts Date appropriated any
asset forming part of its trading stock for any purpose.
25.13 No election has been made under section 35(5) TCGA (assets
held on 31 March 1982) in respect of any assets of the Company.
STAMP DUTY
25.14 There is no instrument which is necessary to establish the
Company's title to any right or asset which is liable to stamp
duty but which has not been duly stamped or which would attract
stamp duty if brought within the relevant jurisdiction.
25.15 The Company is not and has never been part of a group of
companies as defined in section 170 TCGA
TAXATION LIABILITIES AND RELIEFS
25.16 To the best of the Warrantors' knowledge, information and
belief other than as provided for or noted in the Accounts no
event transaction act or omission has occurred which could
result in the Company becoming liable to pay or to bear or to
make reimbursement or indemnity in respect of any Taxation
which is primarily or directly chargeable against or
attributable to any person firm or company other than the
Company.
25.17 The Company has not been party to any transaction or
arrangement which could give rise to a liability to Taxation
where the consideration received or given by the Company was
or, in respect of any transaction or arrangement entered into
before the date of this Agreement, will be greater or less than
that which would have been received or given if the transaction
had been carried out on an arm's length basis.
25.18 The Company is not liable to Taxation (and has not been and
will not be denied any relief) by reason of any interest or
other payment by the Company being treated by any Taxation
Authority as a distribution or other such similar payment.
25.19 The Disclosure Letter contains full details of all claims for
the set-off of the Company's advance corporation tax ("ACT")
against the Company's liability to corporation tax made within
the last six years and the Company is not liable to make any
payment for ACT surrendered or otherwise made available to it.
25.20 The Company has not:
25.20.1 been a party to, involved in, or connected with any
exchange of securities whether or not (by virtue of
section 135 TCGA) section 127 TCGA applied to the
exchange;
25.20.2 carried out or been involved in or connected with any
reorganisation or scheme of reconstruction or amalgamation
whether or not (by virtue of section 126 or 136 TCGA)
section 127 TCGA applied to such reorganisation or scheme
of reconstruction or amalgamation;
25.20.3 carried out or been involved in or connected with any
scheme of reconstruction or amalgamation involving a
transfer of business assets whether or not section 139
TCGA applied to the transfer;
25.20.4 made or received any exempt distribution within the
meaning of section 213 ICTA, and has at no time been a
relevant company in relation to an exempt distribution for
the purposes of that section or concerned in an exempt
distribution for the purposes of section 214 ICTA; or
25.20.5 made a purchase of its own shares to which section
219(1) ICTA applies.
VALUE ADDED TAX
25.21 The Company is registered for the purposes of value added tax
and has not been required by the Commissioners of Customs &
Excise to give security under paragraph 4 (power to require
security and production of evidence) of Schedule 11 VATA
(administration collection and enforcement).
25.22 The Company has maintained and obtained accounts, records,
invoices and other documents (as the case may be) appropriate
or requisite for the purposes of value added tax which are
complete, correct and up to date.
25.23 The Company has not at any time been treated as a member of
any group of companies for the purposes of section 43 VATA
(group of companies) and has not applied for treatment as such
a member.
25.24 The Company has never received a surcharge liability notice
under section 59 VATA (default surcharge) or a penalty
liability notice under section 64 VATA (persistent
misdeclarations).
25.25 The Company is not, nor in the two years prior to Completion
has been, in arrears with any payments or returns or
notifications under any statutory provisions, directions,
conditions or notices relating to value added tax, or liable to
forfeiture or penalty or interest or surcharge or to the
operation of any penalty, interest or surcharge provision.
25.26 The Company has not made any supplies that are exempt supplies
or would be exempt supplies if supplied within the United
Kingdom.
25.27 The Disclosure Letter sets out full details of any claim for
bad debt relief under section 36 VATA (bad debts) made and
which remain outstanding or which may be made by the Company
and if written off would give rise to a right to claim relief.
25.28 The Company is not and has not agreed to become an agent,
manager or factor for the purposes of section 47 VATA (agents)
of any person who is not resident in the United Kingdom.
25.29 The Company has not incurred any liability in respect of value
added tax (whether to H.M. Customs and Excise or to any other
person) by reason of the provisions of paragraph 2(1) Schedule
10 VATA and there are no circumstances whereby the Company
could become so liable as a result of a person making an
election under that paragraph.
25.30 Neither the Company nor any relevant associate (within the
meaning of paragraph 3(7) Schedule 10 VATA) has made any
election under paragraph 2(1) Schedule 10 VATA in respect of
any land in, over or in respect of which the Company has any
interest, right or licence to occupy and the Company is not
aware of any intention to make such an election.
25.31 There is set out in the Disclosure Letter with express
reference to this warranty full details of any agreement or
arrangement regarding group registration for value added tax
which the Company has entered into.
GIFTS
25.32 There is no unsatisfied liability to capital transfer tax or
inheritance tax attached or attributable to the assets of the
Company or the shares of the Company and neither the assets nor
the shares are subject to any Inland Revenue charge as
mentioned in section 237 Inheritance Tax Act 1984.
25.33 No person has the power under section 212 Inheritance Tax Act
1984 to raise any capital transfer tax or inheritance tax by
the sale or mortgage of or by a terminable charge on any of the
Company's assets.
CAPITAL ALLOWANCES
25.34 There are set out in the Disclosure Letter details of all
capital allowances, first year allowances and industrial
building allowances claimed in respect of the accounting period
of the Company ended on the Accounts Date in respect of each
asset or pool of assets for which separate computations of
capital allowances first year allowances or industrial
buildings allowances as appropriate are required to be made or,
as a result of any election, are made.
25.35 The book value of each of the assets or pool of assets of the
Company in or adopted for the purpose of the Accounts does not
exceed the written down value of such asset or pool of assets
for the purposes of CAA 1990.
25.36 No balancing charge pursuant to CAA 1990 (or other legislation
relating to any capital allowances) will be made on the Company
on any disposal of any or all such assets for a consideration
equal to or less than the value of such asset or assets in the
Accounts.
25.37 The Company has not incurred any expenditure on the provision
of any capital allowance bearing asset for leasing.
25.38 The Company has not made any election under section 37 CAA
1990 (short life assets) nor is it taken to have made any such
election under section 37(8)(c) CAA 1990.
25.39 No transaction has been entered into by virtue of which
sections 75 (restrictions on capital allowances) or 157 CAA
1990 (connected parties) are applicable.
25.40 Since the Accounts Date nothing has happened as a result of
which:
25.40.1 there may be made against the Company a balancing
charge under the Capital Allowances Act 1968 or under the
CAA 1990;
25.40.2 any disposal value may be brought into account under
section 24 CAA 1990 (writing down allowances and balancing
adjustments);
25.40.3 there may be any recovery of excess relief within
sections 46 or 47 CAA 1990 (recovery of excess relief); or
25.40.4 a relevant event may occur within the meaning of
section 138 CAA 1990 (scientific research).
25.41 There is not and to the best of the Warrantors' knowledge,
information and belief there are no circumstances which could
give rise to any dispute between the Company and any other
person as to the entitlement to capital allowances under
sections 51 - 59 CAA 1990 (fixtures).
25.42 None of the assets for which a capital allowance has been made
to the Company or has been claimed by the Company has been
disposed of or ceased to be used for the purpose of its trade
since the Accounts Date.
25.43 None of the assets, expenditure on which has qualified for a
capital allowance under the CAA 1990 Part I (industrial
buildings), has at any time since such expenditure was incurred
been used otherwise than as an industrial building or structure
as defined in section 18 CAA 1990.
25.44 In the six years preceding the Accounts Date the Company has
complied with sections 203 - 203L ICTA (pay as you earn) and
the regulations made thereunder in respect of all payments
within the meaning of those sections and with the Social
Security (Contributions) Regulations 1979 in respect of all
earnings which are subject to those regulations.
25.45 No officer or employee of the Company participates in any
scheme of the Company approved under Schedule 9 ICTA (approved
share option and profit sharing schemes) or is a beneficiary or
potential beneficiary of a qualifying employee share ownership
trust of the Company as defined in Schedule 5 Finance Act 1989
(employee share ownership trusts).
25.46 The Company has not issued shares to which Part III, Chapter
II Finance Act 1988 (unapproved employee share schemes)
applies.
25.47 No remuneration for or in respect of the services of a
director or an employee has been paid to any person other than
the director or employee.
25.48 The Company has not since the Accounts Date entered into or
been a party to any transaction which will or may give rise to
a liability to Taxation other than any Taxation arising in the
ordinary course of business.
25.49 The Company is not under any obligation to make any payment of
interest or other similar type of payment which will not be
wholly allowable as a deduction in computing its taxable
profits in the accounting period (or other relevant period) in
which such amount is treated as an expense in the accounts of
the Company or (if earlier) in which such amount is paid.
25.50 The Company is not liable and has not been liable to Taxation
in any jurisdiction other than the United Kingdom.
25.51 The Company is and at all times has been resident in the
United Kingdom for the purposes of Taxation and has not been
resident outside the United Kingdom for any double Taxation
arrangements.
25.52 The Company has not made any repayment of share capital or
issued any share capital as paid up otherwise than by the
receipt of new consideration.
25.53 The Company is not and has never been a close investment
holding company within the meaning of section 13A ICTA (close
investment holding companies).
26 ENVIRONMENT
26.1 In this paragraph:
26.1.1 "Environmental Law" means all laws (whether statutory or
common, civil or criminal), regulations, codes of
practice, circulars, guidance notes and the like (whether
in the United Kingdom or elsewhere but having force in the
United Kingdom) concerning:
26.1.2 the control and prevention of pollution of land,
water or the atmosphere;
26.1.3 the release, discharge, spillage, deposit, emission
or other escape of Hazardous Substances;
26.1.4 noise, odour or other nuisances;
26.1.5 the production, transportation, storage, treatment,
recycling or disposal of waste; and
26.1.6 the conditions of the workplace and the protection
of human health and life;
26.2.1 "Environmental Licences" means all permits, licences,
authorisations, consents or other approvals required by
any Environmental Law to be obtained in connection with
the carrying on of the business, activities and operations
of the Company or the use of any Relevant Property;
26.2.2 "Hazardous Substance" means any natural or artificial
substance (whether in solid or liquid form or in the form
of a gas or vapour) which may either alone or in
combination with any other substance be harmful to man or
to the life or health of any other living organisms or to
the environment; and
26.2.3 "Relevant Property" means any premises now or previously
owned, leased, occupied, or controlled by the Company.
26.3 There are annexed to the Disclosure Letter copies
of the Environmental Licenses obtained by the Company.
26.4 The Company has obtained all requisite
Environmental Licences and has at all times complied with the
terms and conditions of those licences and to the best of the
Warrantors' knowledge, information and belief without undue
effort and expenditure on the part of the Company, can continue
to so comply.
26.5 The Company has at all times complied with all
applicable Environmental Law.
26.6 The Company has not received any notice or other
communication from which it appears that it may be or is
alleged to be in violation of any Environmental Law or
Environmental Licence, or that any Environmental Licence may be
subject to modification, suspension or revocation and there are
no circumstances known to the Warrantors likely to give rise to
any such violation or modification, suspension or revocation.
26.7 The Company has not used, disposed of, generated,
stored, transported, dumped, released, deposited or buried or
emitted any Hazardous Substance at, on, from or under any
Relevant Property.
26.8 So far as the Warrantors are aware without having
commissioned any environmental survey or audit in respect of
Relevant Property no other person has used, disposed of,
generated, stored, transported, dumped, released, deposited,
buried or emitted any Hazardous Substance at, on, from or under
any Relevant Property.
26.9 The Company has not disposed of any Hazardous
Substance in such a way that its disposal constituted, a breach
of any Environmental Law.
26.10 Full details of any environmental assessment, audit, review or
investigation conducted by or on behalf of the Company are
contained in or annexed to the Disclosure Letter.
26.11 To the knowledge, information or belief of the Warrantors, but
without having made any enquiries the warranties in paragraphs
26.3 to 26.8 inclusive would be true if they were given in
respect of any other person who owns or occupies or carries on
business on property which adjoins the Property and if they
related to activities carried on by such person on such
property.
26.12 Full details are set out in the Disclosure Letter of :
26.12.1 any remedial work, including the cost of that work,
carried out at any Relevant Property to ensure compliance
with any Environmental Law; and
26.12.2 all expenditure which to the knowledge, information or
belief of the Vendors is now required to be incurred by
the Company to comply with any applicable Environmental
Law or any condition attaching to any Environmental
Licence.
<PAGE>
SCHEDULE 5
FORM OF RESIGNATION OF DIRECTOR/SECRETARY
(clause 4.1.1(c))
To : The Directors
Norwich Injection Moulders Limited 1998
Dear Sirs
NORWICH INJECTION MOULDERS LIMITED ("THE COMPANY")
I hereby resign from my office as Director/the Secretary of the Company
and acknowledge that I have no claim whatsoever against the Company in
respect of loss of office or employment, redundancy or unfair dismissal
save in respect of accrued remuneration of the current month and that I
have no other claim or right of action against the Company whatsoever.
SIGNED BY [NAME]
AS A DEED
in the presence of:
Witness's Signature:
Name:
Address:
<PAGE>
SCHEDULE 6
FORM OF ACKNOWLEDGEMENT
(CLAUSE 4.1.4 (B))
To : The Directors
NIM Holdings Limited
1998
Dear Sirs
NORWICH INJECTION MOULDERS LIMITED ("THE COMPANY")
In consideration of your today agreeing to complete the purchase of the
entire issued share capital of the Company I/we hereby acknowledge that:
13. I/we and the persons who are connected with me/us have no claim
against the Company save in respect of salary to date for the
current month; and
14. there are no agreements or arrangements under or as a result of
which the Company has any actual, contingent or future obligation to
or in respect of me/us or any persons who are connected with me/us
including, without limitation, any obligation under any guarantee
entered into by the Company.
Section 839 Income and Corporation Taxes Act 1988 applies as it applies
in that Act to determine whether one person is connected with another.
IN WITNESS of these matters this document is executed as a deed and
delivered on the date stated at the beginning of this document.
SIGNED BY [NAME]
AS A DEED
in the presence of:
Witness's signature:
Name:
Address:
<PAGE>
SCHEDULE 7
FORM OF POWER OF ATTORNEY
(clause 4.1.1.(g))
THIS POWER OF ATTORNEY is made the day of 1998
by [NAME] ("the Grantor")
RECITAL:
The Grantor is the registered holder of [NUMBER AND DESCRIPTION] shares
("the Shares") in the capital of Norwich Injection Moulders Limited ("the
Company") and has sold the Shares.
1 GRANT
The Grantor irrevocably appoints [NEWCO LIMITED] ("the Purchaser") to be
its attorney to do all or any of the matters and things set out in
paragraph 4 of this Power.
2 IRREVOCABLE APPOINTMENT
This Power of Attorney is executed to secure the interest of the
Purchaser in the Shares and shall accordingly be irrevocable.
3 RATIFICATION AND NON INTERFERENCE
The Grantor undertakes:
3.1 to ratify everything done by the Purchaser under this power of
attorney; and
3.2 not to exercise or attempt to exercise any rights attached to
the Shares which are exercisable by the Purchaser under this
power of attorney.
4 MATTERS COVERED
The matters and things referred to in paragraph 1 are:
4.1 to exercise all voting and other rights attaching to the
Shares;
4.2 to execute a form of proxy in favour of such person or persons
as the Purchaser thinks fit to attend and vote as the Grantor's
proxy at any general meeting of the members or any separate
class meeting of any class of members of the Company in respect
of the Shares in such manner as the Purchaser may decide;
4.3 to exercise all rights to call for or requisition any such
general or separate class meeting of the Company;
4.4 to consent to the convening and holding of any such general or
separate class meeting of the Company and the passing of the
resolutions to be submitted at any such meeting on short
notice; and
4.5 to settle the terms of and consent and agree to any resolutions
of the Company dealt with by written resolution whether
pursuant to the Company's articles of association, the
Companies Act 1985 or otherwise howsoever.
5. CESSATION
This Power of Attorney shall cease to have any effect on the
earlier of the shares being registered as held by the Purchaser
in the Company's register of members or the expiry of 12 months
from the date hereof.
SIGNED BY [NAME]
AS A DEED
in the presence of:
Witness's Signature:
Name:
Address:
<PAGE>
SCHEDULE 8
Tax Covenant
DATE: 1998
PARTIES:
(1) THE PERSONS whose names and addresses are set out in the Schedule to
this Deed (together referred to as the "Warrantors")
(2) NIM HOLDINGS LIMITED ("the Purchaser" which expression shall be
deemed to include its successors in title and assigns) whose
registered office is at Aldwych House, 81 Aldwych, London, WC2B 4HN.
RECITAL:
This Deed is entered into pursuant to an agreement of the same date as
this ("the Agreement") between the Vendors (1) and the Purchaser (2)
whereby the Vendors have agreed to sell and the Purchaser has agreed to
purchase the whole of the share capital of Norwich Injection Moulders
Limited (registered number 964668) (the "Company") on the terms and
conditions set out therein.
IT IS AGREED as follows:
1. INTERPRETATION
In this Deed:
1.1the following words and expressions shall have the same meanings as in
the Agreement:
<TABLE>
<CAPTION>
<S> <C>
"Accounts"
"Accounts Date"
"Auditors"
"Business Day"
"Completion"
"Completion Accounts"
"Completion Accounts Date"
"ICTA"
"Net Assets"
"Shares"
"TCGA"
"Vendors"
<CAPTION>
the following words and expressions shall have the following meanings
<CAPTION>
<S> <C>
"Saving" means the reduction or elimination of any
liability of the Company to make an actual
payment of Taxation in respect of which the
Warrantors would not have been liable under
clause 2, by the use of any Relief arising as a
result of a Taxation Liability or other
liability in respect of which the Warrantors
have made a payment under clause 2
</TABLE>
1.2 "Claim" means any notice demand assessment letter or other document
issued or action taken by or on behalf of any authority, body or
person whether in the United Kingdom or elsewhere, including but not
limited to the United Kingdom Inland Revenue and Customs and Excise
Authorities, whereby it appears that the Company is or may be
subject to a Taxation Liability (as defined below);
1.3 "Event" means any event whatsoever including but not limited to any
transaction, action or omission whether or not the Company is a
party thereto, the death of any person, the earning, accrual or
receipt of any income, profits, or gains, the incurring for any
Taxation purpose of any loss or expenditure, the declaration, paying
or making of any dividend or other distribution, any change in the
residence of any person for any Taxation purpose, and the entry into
and/or Completion of the Agreement and any Event which is deemed to
have occurred or is treated as having occurred for the purposes of
Taxation Legislation provided such Taxation Legislation was in force
at Completion;
1.4 "Purchaser's Group" means the Purchaser and any companies within the
same group of companies as the Purchaser for the purposes of section
170 of TCGA at the time when the matter falls to be considered for
the purposes of this Deed;
1.5 "Surrender Agreement" means an agreement such as is described in
clause 1.9.5;
1.6 "Relief" means any relief, allowance, exemption, set off or
deduction in profits, income or gains of any description or credit
against, or right to repayment of, Taxation including repayment
supplement granted by or pursuant to any Taxation Legislation;
1.7 "Taxation" means:
1.7.1 all taxes, duties, charges, levies, deductions or withholdings
whenever imposed and whether of the United Kingdom or elsewhere
including without limitation income tax, (including income tax
required to be deducted or withheld from or accounted for in
respect of any payment) capital gains tax, inheritance tax,
corporation tax, advance corporation tax, liabilities in
respect of the Pay As You Earn system, any charge to tax
arising pursuant to section 419 ICTA, stamp duty, stamp duty
reserve tax, value added tax, customs duties, excise duties,
other import duties, withholding tax, national insurance,
social security and other similar contributions;
1.7.2 any interest, penalty, fine and surcharge related to or
arising in connection with any of the matters specified in the
preceding sub-paragraphs;
1.8 "Taxation Legislation" means any statute, statutory instrument,
regulation or legislative provision wheresoever enacted providing
for, imposing or relating to Taxation and shall include any statute,
enactment, law, statutory instrument, order, regulation or provision
which amends extends consolidates or replaces the same or which has
been amended extended consolidated or replaced by the same;
1.9 "Taxation Liability" means any liability of the Company to make a
payment of or in respect of Taxation whether or not the same is the
primary liability of the Company and whether or not the Company has
or may have a right of reimbursement against any other person and
shall further include:
1.9.1 any Taxation which is assessed on any person other than
the Company whether or not the Taxation is assessed in the
name of the Company or the Purchaser and which, or an
amount equivalent to which, is recoverable by that person
from the Company pursuant to the provisions of the
Taxation Legislation;
1.9.2 the loss or set-off of any Relief which was treated as an
asset of the Company in the Accounts (where but for such
set off the Company would have had an actual liability to
Taxation in respect of which the Purchaser would have been
able to have made a claim against the Vendors under this
Deed);
1.9.3 the loss or set-off of any Relief which was taken into
account in computing any provision for deferred tax which
appears in the Accounts or would have appeared in the
Accounts but for the presumed availability of such Relief
(a "Notional Taxation Liability");
1.9.4 the set-off of any Relief available to the Company or any
member of the Purchaser's Group, which Relief arises
principally as a result of an Event after Completion, in
circumstances where but for such set-off there would have
been a Taxation Liability in respect of which the
Warrantors would have been liable to make a payment under
clause 2 of this Deed: and, for the purposes of clauses
1.9.2, 1.9.3, and 1.9.4, the amount of the Relief so set-
off or which would otherwise have been obtained shall be
treated for the purposes of this Deed as a Taxation
Liability of the Company provided that if such Relief
would operate as a deduction from or as a set-off against
income, profits or gains the Taxation Liability which is
deemed to have arisen shall be equal to the amount of
Taxation which would, on the basis of the rates of
Taxation current at the date of such set-off, have
otherwise been saved; provided also that the Taxation
Liability which arises or is deemed to arise pursuant to
this clause 1.9.4 shall not exceed the liability of the
Warrantors to make a payment under this Deed which would
have resulted had such a Relief not been set-off.
1.9.5 the liability of the Company under any agreement entered
into on or before Completion to make a payment to another
person in respect of Reliefs surrendered or otherwise made
available to the Company under Part X, Ch IV ICTA or in
respect of advance corporation tax surrendered or
otherwise made available to the Company;
1.9.6 any inheritance tax which:
1.9.6.1 is at Completion a charge on any of the Shares or
assets of the Company or gives rise to a power to
sell, mortgage or charge any of the Shares or assets
of the Company; or
1.9.6.2 after Completion becomes a charge on or gives rise
to a power of sale, mortgage or charge over any of
the Shares or assets of the Company; and, for the
purposes of clauses 1.9.6.1 and 1.9.6.2, in
determining whether such a charge on or such a power
over any of the Shares or assets of the Company
exists at any time the fact that any inheritance tax
is not yet payable or may be paid by instalments
shall be disregarded and the total liability for such
Taxation shall be treated as falling due, and a
charge or power of sale as arising in relation to
that total liability, on the date of the chargeable
transfer in respect of which such Taxation becomes
payable or arises and the provisions of section 213
of the Inheritance Tax Act 1984 shall not apply
thereto;
1.9.6.3 arises as a result of a transfer of value
occurring on or before Completion (whether or not in
conjunction with the death of any person whenever
occurring) which increased or decreased the value of
the estate of a Company;
1.10 a reference to income or profits or gains earned, accrued,
received or arising shall include income or profits or gains
deemed pursuant to any Taxation Legislation to have been or
treated or regarded as earned, accrued, received or arising;
1.11 any reference to a transaction or Event occurring in the
ordinary course of business of the Company shall specifically
exclude any of the following Events:
1.11.1 any distribution within the meaning of Part VI ICTA
(company distributions, tax credits) or within Section 418
ICTA (expenses treated as distributions);
1.11.2 any event in respect of which the consideration (if any)
actually received is different from the consideration
deemed to have been received for any Taxation purpose;
1.11.3 any Event which gives rise to a Taxation Liability in
respect of deemed (as opposed to actual) income, profits
or gains;
1.11.4 a disposal or deemed disposal of capital assets;
1.11.5 the Company ceasing, or being deemed to cease, to be a
member of any group of companies or associated with any
other company for any Taxation purpose;
1.11.6 any Event which gives rise to a Taxation Liability under
Section 126 and Schedule 23 Finance Act 1995 (obligations
imposed on UK representatives);
1.11.7 any Event which gives rise to a Taxation Liability under
Part XVII ICTA (tax avoidance);
1.11.8 any Event which gives rise to a Taxation Liability
primarily chargeable against or attributable wholly or
partly to or recoverable wholly or partly from any other
person;
1.11.9 an Event in respect of which a Taxation Liability arises
as a result of a failure by the Company to deduct or
account for Taxation; and
1.11.10 the release or waiver of all or part of a debt.
1.12 headings used in this Deed are for convenience only and shall
not affect its construction;
1.13 references to clauses are (unless otherwise indicated to the
contrary) references to clauses of this Deed;
1.14 any reference to a person shall be construed to include a
reference to a body corporate, unincorporated association and
a partnership;
1.15 references to any statute or statutory provisions shall,
unless the context requires otherwise, be construed as
including references to a corresponding earlier statute or the
corresponding provisions of any earlier corresponding statute
(whether repealed or not) which is directly or indirectly
amended, consolidated, extended or which is replaced by such
provisions, or re-enacted in such provisions; and
1.16 in construing this Deed the interpretation of general words
shall not be restricted by being followed by words indicating
a particular class of acts, matters or things or being
followed by particular examples.
2 COVENANT TO PAY
2.1 Subject to clause 3 the Warrantors hereby jointly and severally
covenant with the Purchaser that the Warrantors will pay to the
Purchaser an amount equal to:
2.1.1 any Taxation Liability arising as a result of, or by
reference to, any Event which occurred on or before, or
was pursuant to any Taxation Legislation in force at
Completion deemed to occur on or before, Completion or in
respect of, or with reference to, any income profits or
gains earned, accrued or received on or before, or in
respect of a period ending on or before, Completion;
2.1.2 any Notional Tax Liability of the Company;
2.1.3 any Taxation Liability which arises under section 132
Finance Act 1988 (liability of other persons for unpaid
tax) or sections 190 or 191 TCGA (tax on one group member
recoverable from another) as a result of the combined
effect of two or more Events the first of which occurred
on or before Completion;
2.1.4 any Taxation Liability which arises with respect to the
period prior to Completion by reference to any supplies
made or deemed to be made for the purposes of value added
tax by any member of a VAT group other than the Company or
to the late payment of any value added tax by the
representative member of the VAT group or to any return
required to be submitted by the representative member of
the VAT group;
2.1.5 any Taxation Liability arising from any such payment or
deemed payment as constitutes a chargeable payment for the
purposes of section 214 ICTA (chargeable payments
connected with exempt distributions) which occurs or is
deemed to occur after Completion;
2.1.6 any Taxation Liability which falls within clause 1.9.5;
2.1.7 all reasonable losses, payments, claims, demands,
expenses, and other liabilities incurred by the Company or
incurred by any member of the Purchaser's Group:
2.1.7.1 arising out of or in connection with any Claim;
2.1.7.2 in connection with any Taxation Liability referred
to in clauses 2.1.1 to 2.1.6; or
2.1.7.3 in connection with any action reasonably taken to
avoid resist or settle any Taxation Liability
referred to in clauses 2.1.1 to 2.1.6 or otherwise
taking or defending any action under this Deed and
2.1.8 any Taxation Liability which arises as a result of the
declaration by the Company of a stock dividend on the
22{nd} May 1998;
2.2 The Purchaser shall be entitled to make a claim under this Deed in
respect of a Taxation Liability notwithstanding that such Taxation
Liability has been paid or discharged whether before or after
Completion.
3 LIMITATIONS ON COVENANT
Subject to 3.16 below the Covenant in clause 2 shall not apply to any
Taxation Liability or other liability to the extent that such
Taxation Liability or other liability:
3.1 is the subject of a specific reserve or specific provision in
the Accounts or the Completion Accounts;
3.2 arises or is increased as a result of a change in legislation
or Taxation Legislation (including but not limited to an
increase in rates of Taxation) occurring after Completion;
3.3 was discharged on or before the Completion Accounts Date and
the discharge of such Taxation Liability or other liability was
taken account of in the balance sheet of the Accounts or the
Completion Accounts;
3.4 is for an amount in respect of which payment has already been
received by the Purchaser or the Company whether from the
Warrantors or a third party (other than the Purchaser or any
other member of the same group of companies as the Purchaser);
3.5 would not have arisen but for a change in the published
practice of any authority or body first announced after
Completion;
3.6 would not have arisen but for a voluntary act, transaction or
omission of the Company after Completion:
3.6.1 otherwise than pursuant to a legally binding obligation
entered into by the Company on or before Completion or
imposed on the Company by any Taxation Legislation coming
into force before Completion;
3.6.2 which the Purchaser was aware or ought reasonably to have
been aware would give rise to the Taxation Liability or
other Liability in question;
3.6.3 otherwise than in the ordinary course of business of the
Company; and
3.6.4 other than with the clearly expressed consent or at the
request of any of the Warrantors;
3.7 relates to any fine, penalty, surcharge or interest arising by
reason of any failure or
delay on the part of the Company in paying over to the relevant
tax authority
any payment made
hereunder by the Warrantors or in keeping preserving,
maintaining or submitting any account records form return or
computation after Completion;
3.8 would not have arisen or would have been reduced but for a
failure or omission on the part of the Purchaser or the Company
to make any election or claim any Relief the making or claiming
of which was taken into account in computing any
provision or reserve for tax
in the Accounts; and which was specifically disclosed against
warranty 25.34 of Schedule 4 to the Agreement;
3.9 arises by reason of a voluntary disclaimer by the Company after
Completion of the whole or any part of any allowance to which
it is entitled under Part II of the Capital Allowances Act 1990
or by reason of the revocation by the Company after Completion
of any claim for relief made (whether provisionally or
otherwise) prior to Completion; and which was specifically
disclosed against warranty 25.34 of Schedule 4 to the
Agreement;
3.10 would not have arisen but for a cessation of or any change in
the nature or conduct of any trade carried on by the Company
being a cessation or change occurring on or after Completion;
3.11 arises or is increased (and in either case only to the extent
if any that it so arises or as the case may be, is increased)
as a direct result of any failure by the Purchaser or the
Company to comply with any of their respective obligations
under the terms of this Deed;
3.12 would not have been a liability borne by the Warrantors had
paragraphs 1 and 2.1 to 2.4 inclusive of Schedule 11 of the
Agreement been set out in full in this Deed and the words " the
Tax Covenant" had been replaced by the words "this Deed" and
the words "this Agreement" had been replaced by the words "the
Agreement";
3.13 arises or is increased as a result of any change in the
accounting policy or practice or in the accounting reference
date of the Company after Completion;
3.14 is a balancing charge arising pursuant to the Capital
Allowances Act 1990 on any disposal by the Company after
Completion other than a disposal of assets to which any of
section 36,37 or 38A of the said Act apply; or
3.15 results from the provision or reserve for corporation tax in
the accounts prepared pursuant to Schedule 9 being insufficient
by reason of the effective tax rate being higher than 28%. For
this purpose the effective tax rate is the corporation tax
charge for the accounting period (relating to the profits of
such period) during which 30{th} June 1998 falls, divided by
the profit before tax in the audited accounts for the same
accounting period, expressed as a percentage;
3.16 none of the limitations in this clause 3 other than clauses
3.1, 3.4 3.7 and the limitation created by reference in clause
3.12 to paragraphs 1 and 2.4 only of Schedule 11 to the
Agreement shall apply to any Taxation Liability under clauses
2.1.8.
4 DEDUCTIONS AND WITHHOLDINGS
4.1 All sums payable by the Warrantors under this Deed will be paid
free and clear of all deductions or withholdings whatsoever,
whether or not arising from any set-off or counterclaim unless
the deduction or withholding is required by law. If any such
deduction or withholding is required by law, the Warrantors
shall be obliged to pay such additional amount as shall be
required to ensure that the net amount received hereunder by
the Purchaser after such deduction or withholding has been made
will equal the amount which would have been received by the
recipient had no such deduction or withholding been required by
law.
4.2 If any sum payable by the Warrantors under this Deed shall be
subject to Taxation in the hands of the recipient, otherwise
than by a withholding or a deduction referred to in clause 4.1
the Warrantors shall pay such an additional amount to ensure
that the net receipt of the Purchaser is the same as if the
amount of tax so payable were treated as a withholding or
deduction under the terms of clause 4.1
5 DUE DATE FOR PAYMENT
5.1 The Warrantors shall make payment under clause 2 on the date
following five Business Days after service of a notice
containing a written demand in respect of a Claim for which the
Warrantors are liable under this Deed, save that in any case
involving the Company in making an actual payment of Taxation
or an actual payment pursuant to a Surrender Agreement the
Warrantors shall make payment on the later of:
5.1.1 the date previously referred to in clause 5.1; and
5.1.2 the date falling five clear Business Days before the
Company is finally due to make such payment.
5.2 The Warrantors shall make payment in respect of any liability
under clause 4.1 on the date on which the Warrantors are liable
to make the deductions or withholdings and in respect of any
liability under clause 4.2, on the date falling five Business
Days after service of a notice containing a written demand for
such payment.
5.3 Any sums not paid on a date established by reference to the
preceding provisions of clause 5 ("the Due Date") shall bear
interest at the annual rate of two per centum (2%) above the
base lending rate from time to time of Barclays Bank Plc
whether before or after judgment, accruing on a daily basis
until payment is made and compounded at three monthly
intervals. Such interest shall be paid within five clear
Business Days of a demand for such by the Purchaser.
6 CONDUCT OF CLAIMS
6.1 Each of the following provisions of this clause 6 shall apply
to regulate the conduct of claims under this Deed, provided
that the provisions of this clause, other than clause 6.2,
shall not take effect if in respect of any Claim which is
notified to the Warrantors in accordance with clause 6.2 it
reasonably appears to the Purchaser that the Vendors or the
Company (in the case of the Company prior to Completion) has
committed acts or omissions which may constitute fraud or
wilful default; and further provided that the Warrantors shall
not take any action in resisting a Claim which the Purchaser or
the Company (after consultation with the Vendors) reasonably
considers would prejudice any right or interest of any of them
or of the Purchaser's Group.
6.2 The Purchaser shall give written notice to the Warrantors of
any Claim in respect of a Taxation Liability for which the
Warrantors could become liable under this Deed as soon as
reasonably practicable provided that failure to give such
notice shall not reduce, extinguish or otherwise affect the
liability of the Warrantors to the Purchaser.
6.3 Subject to clause 6.4, on service of a written notice of their
intention on the Purchaser by the Warrantors within the period
of ten Business Days following service of a notice under clause
6.2 the Warrantors shall:
6.3.1 at their own expense and subject to the provisions of
this Deed be entitled to resist any such Claim in the name
of the Company or the Purchaser; and
6.3.2 as soon as reasonably practicable at their own expense be
provided with or have made available to them by the
Company all information and documents relating to the
Company as are reasonably necessary for the purpose of
such resistance and the Purchaser undertakes to procure
such provision by the Company provided that, for the
avoidance of doubt, this Purchaser's undertaking shall
continue for the period during which the Warrantors are
resisting the Claim.
6.4 The Warrantors shall not be entitled to resist or continue to
resist a Claim under clause 6.3 beyond the giving of notice of
intention to make an appeal against a Claim or, if necessary to
avoid the expiration of any period described by clause 6.6.5
below, the making of an appeal unless:
6.4.1 the Company or the Purchaser (as the case may be) is
first indemnified and secured to its reasonable
satisfaction against all reasonable costs and expenses
which may be properly incurred in relation to any such
Claim;
6.4.2 the Company and the Purchaser are at all times kept fully
informed of all matters relating thereto and are each
supplied with a copy of all correspondence, advice and
documents relating thereto;
6.4.3 the appointment of professional advisers in respect
thereof is approved in advance by the Purchaser, such
approval not to be unreasonably withheld or delayed;
6.4.4 all communication, written or otherwise, relating thereto
intended to be sent to the Inland Revenue, H.M. Customs
and Excise or other statutory or governmental authority or
body is approved in advance by the Purchaser, such
approval not to be reasonably withheld or delayed; and
6.4.5 any proposed settlement or compromise of such Claim or
any step to be taken in the conduct of such dispute which
might affect the amount thereof or the future Taxation
Liability of the Company or the Purchaser or any member of
the Purchaser's Group is approved by the Purchaser in
advance such approval not to be reasonably withheld or
delayed.
6.5 Notwithstanding the terms of clause 6.3 the Company shall not
be obliged to appeal any decision beyond the first appellate
body unless the Warrantors have produced to the Purchaser an
opinion of a senior Counsel of not less than 10 years'
standing, and practising in the relevant area of law that it
would be reasonable to lodge such an appeal.
6.6 The Company or the Purchaser (as the case may be) shall be at
liberty without reference to and to the exclusion of the
Warrantors to admit, compromise, settle, discharge or otherwise
deal with any Claim after whichever is the earliest of:
6.6.1 the expiry of a period of ten Business Days following the
service of notice of that Claim on the Warrantors pursuant
to clause 6.2 (whether or not such notice was given as
soon as reasonably practical) if during that period the
Warrantors have not notified the Purchaser (as the case
may be) of their wish to resist the Claim;
6.6.2 the service of notice on the Purchaser by the Warrantors
to the effect that they do not wish to resist the Claim;
6.6.3 the expiry of a period of ten Business Days following the
service of notice by the Purchaser (stating such
reasonable steps as the Purchaser wishes the Warrantors to
take to properly and effectively resist the claim) on the
Warrantors (they having taken over the conduct of a Claim)
to the effect that the Warrantors are not properly and
effectively conducting the resistance of that Claim if
during that period the Warrantors do not take such steps
as notified by the Purchaser as are reasonably practicable
during that period;
6.6.4 the failure by the Warrantors to satisfy in any material
respect any of the provisions of clause 6.4; and
6.6.5 if appropriate, the expiration of any period prescribed
by the Taxation Legislation for the making of an appeal
against the Claim and/or Taxation Liability in question
provided that notice was given by the Purchaser pursuant
to clause 6.2 (with respect to such Claim or Taxation
Liability) not less than ten clear Business Days prior to
such expiration
but, for the avoidance of doubt, not otherwise.
6.7 The Warrantors shall be bound to accept for the purposes of
this Deed any admission, compromise, settlement or discharge of
any Taxation Liability and the outcome of any proceedings
relating thereto, properly made or arrived at in accordance
with the provisions of clause 6.6.
7 SAVINGS
7.1 If (at the Warrantors' request and expense) the Auditors
determine that the Company has obtained a Saving, the Purchaser
will as soon as reasonably practicable thereafter repay to the
Warrantors the lesser of:-
7.1.1 the amount of the Saving (as determined by the Auditors);
and
7.1.2 the amount paid by the Warrantors under clause 2 in
respect of the Liability to Taxation or other liability
which gave rise to the Saving less any part of that amount
previously repaid to the Warrantors under any provision of
this Deed or otherwise.
7.2 In determining whether the Company has obtained a Saving, the
Auditors will act as experts and not as arbitrators and their
determination will (in the absence of manifest error) be
conclusive and binding on the parties
8 RECOVERY FROM OTHER PERSONS
8.1 If, in the event of any payment becoming due from the
Warrantors pursuant to clause 2 the Company either is
immediately entitled at the due date for the making of that
payment to recover from any other person (including without
limitation any taxation authority but excluding the Purchaser,
and any other member of the same group of companies as the
Purchaser) any amount in respect of Taxation Liability or other
liability of the Company in respect of which the Warrantors
have made or are liable to make a payment under clause 2, or at
some subsequent date becomes entitled to make such recovery the
Purchaser shall account to the Warrantors for, or in a case
where payment has not been made under this deed any payment due
from the Warrantors shall be reduced by the lesser of:-
8.1.1 the amount so recovered (less any losses, costs, damages
and expenses reasonably incurred by the Company, the
Purchaser or any other member of the same group of
companies as the Purchaser as a result of the recover of
that amount); and
8.1.2 the amount paid or payable by the Warrantors under clause
2 in respect of the Taxation Liability or other liability
in question less any part of such amount previously repaid
to the Warrantors under any provision of this Deed or
otherwise.
8.2 If the Purchaser becomes aware that the Company is entitled to
recover any amount mentioned in clause 8.1, the Purchaser will
as soon as reasonably practicable give notice of that fact to
the Warrantors and provided that the Warrantors indemnify and
secure the Company, the Purchaser and all other members of the
same group of companies as the Purchaser to the reasonable
satisfaction of the Purchaser against all costs and expenses
which may be incurred thereby, the Purchaser will procure that
the Company, at the Warrantors' cost and expense, takes such
action as the Warrantors may reasonably request to effect such
recovery.
8.3 The action which the Warrantors may request the Company to take
under clause does not include:
8.3.1 any action which the Purchaser after consulting with the
Warrantors reasonably considers to be materially
prejudicial to the business or Taxation affairs of the
Company, the Purchaser or any other member of the same
group of companies as the Purchaser or to which the
Purchaser objects on any other reasonable ground; or
8.3.2 allowing the Warrantors to undertake the conduct of any
action necessary to effect recovery of the amount in
question.
8.3.3 If the amount mentioned in clause 8.1.1 exceeds the
amount mentioned in clause 8.1.2, the amount of the excess
shall be set against (and so shall reduce or eliminate)
any liability of the Warrantors under clause 2 which
arises after such recovery.
9 OVER PROVISIONS
9.1 If (at the request and expense of the Warrantors) the Auditors
certify that any provision in the Accounts or the Completion
Accounts for any Taxation has proved to be an over-provision
the Purchaser shall as soon as reasonably practicable
thereafter repay to the Warrantors the lesser of:
9.1.1 the amount over-provided (as certified by the Auditors);
and
9.1.2 the aggregate amount (if any) paid by the Warrantors
under clause 2 prior to the certification of the over-
provision less any part of such amount previously repaid
to the Warrantors under any provision of this Deed or
otherwise.
9.2 If upon certification of an over-provision by the Auditors
pursuant to clause 9.1, the amount mentioned in clause 9.1 .1
exceeds the amount mentioned in clause 9.1.2, the amount of the
excess shall be set against (and so shall reduce or eliminate)
any liability of the Warrantors under clause 2 which arises
after such certification, as and when such liability arises.
9.3 Upon the Company or the Purchaser becoming aware that there has
or probably has been an over-provision within the meaning of
clause 9.1, the Purchaser shall as soon as reasonably
practicable give notice of that fact to the Warrantors.
9.4 In certifying any over-provision pursuant to clause 9.1, the
Auditors shall act as experts and not as arbitrators and their
certificate shall (in the absence of manifest error) be
conclusive and binding on all concerned.
10 SECTION 767A INDEMNITY
10.1 The Purchaser covenants with and undertakes to the Warrantors
to pay to the relevant taxation authority on behalf of the
Warrantors an amount equal to any Taxation which is assessed
under section 767A ICTA on any of the Vendors by reason of
Taxation assessed on the Company for an accounting period
beginning before Completion being unpaid other than any
Taxation the liability for which falls upon the Warrantors
pursuant to clause 2 subject to Clause 3.
10.2 The covenant contained in clause 10.1 will apply to any
reasonable costs and expenses incurred by the Warrantors in
connection with any such Taxation such amount to be paid to the
Warrantors.
10.3 The due date for payment of any amount payable pursuant to
clause 10.1 will be the later of the date falling five Business
Days before the party assessed under section 767A ICTA is
obliged to pay the corporation tax in question and the date
falling five Business Days after the Warrantors have served
notice on the Purchaser demanding such payment. Any such
payment not made on or before the due date for payment pursuant
to this clause will carry interest at the rate of two per cent
above the base lending rate of Barclays Bank plc from the due
date to the date of payment.
11 REPAYMENTS OF TAXATION
11.1 If the Company or any member of the Purchaser's Group receives
any repayment of Taxation which relates to a period prior to
the Accounts Date and which has not been taken into account in
the Accounts, and which does not arise as a result of the set-
off or utilisation of a relief which arises principally as a
result of an Event occurring after Completion including without
limitation both an actual repayment and a credit to be offset
against any other liability to Taxation, (other than a
liability to Taxation for which the Warrantors would be liable
under this Deed) the Purchaser will as soon as is reasonably
practicable thereafter repay to the Warrantors the lesser of:
11.1.1 the amount of the repayment of Taxation; and
11.1.2 the aggregate amount (if any) paid by the Warrantors
under Clause 2 less any part of that amount previously
paid to the Warrantors under any provision of this Deed or
otherwise.
11.2 If upon receipt of a repayment of Taxation pursuant to Clause
11.1 the amount mentioned in Clause 11.1.1exceeds the amount
mentioned in 11.1.2 the excess will be set against (and so will
reduce or eliminate) any liability of the Warrantors under
Clause 2 then outstanding or which arises after such
determination, in the latter case as and when such liability
arises.
12 VENDOR PROTECTION
12.1 If any potential claim shall arise by reason of a liability of
the Company which is contingent only, then the Warrantors shall
not be under any obligation to make any payment in respect of
such claim until such time as the contingent liability ceases
to be contingent and becomes actual.
12.2 The Purchaser confirms to the Warrantors that it is not aware
at the date of this Deed, after discussion with its accountants
and solicitors, of any matter or thing which in its reasonable
opinion will or may give rise to any claim under this Deed;
provided for the avoidance of doubt that a matter shall not be
deemed to be known to the Purchaser by reason of it being known
to any of the Warrantors.
13 GENERAL
All payments by the Warrantors under this Deed will be treated as
repayments by the Warrantors of the consideration paid for the
Shares pursuant to the Agreement, provided that this clause 13 will
not operate in any way to limit the liability of the Warrantors
under this Deed.
14 SEVERABILITY
In the event that any liability of the Warrantors under this Deed shall
be found to be void but would be valid if the application thereof to
a particular Claim or Taxation Liability were limited or deleted or
omitted, such liability shall apply with such modification as may be
necessary to make it valid and effective.
15 NOTICES
The provisions of clause 11 of the Agreement (Notices) shall apply to
this Deed.
16 MISCELLANEOUS
16.1 All the rights and remedies expressly provided for by this Deed
shall not exclude any rights or remedies provided by law.
16.2 None of the rights of the Purchaser arising out of this Deed
shall be varied or restricted by the giving of any time or
other indulgence to any person but shall only be affected by a
specific waiver or release by the Purchaser and any such waiver
or release shall be specific to the matters to which and the
Vendor to whom it relates, shall not be deemed to be a waiver
of any subsequent breach or default and shall in no way affect
the other terms of this Deed.
17 GOVERNING LAW
This Deed shall be governed by and construed in all respects in
accordance with English law and the parties submit to the exclusive
jurisdiction of the English Courts.
IN WITNESS of these matters this document has been executed as a deed and
delivered on the date set out at the beginning of this deed.
<PAGE>
SCHEDULE
The Warrantors
NAME AND ADDRESS
James Edward BARLOW
Coppertops
Colby Road
Banningham
Norwich
Norfolk NR11 7DY
Trevor David JOHNSON
Thorpe Row Farm House
Herne Lane
Thorpe Row
Dereham
Norfolk NR19 1QE
Alan Robert SANDELL
Scarrow Barn
Thurgaton
Norwich
Norfolk NR11 7HR
<PAGE>
SIGNED AS A DEED by
JAMES EDWARD BARLOW
in the presence of:
Witness's signature:
Name:
Address:
SIGNED AS A DEED by
TREVOR DAVID JOHNSON
in the presence of:
Witness's signature:
Name:
Address:
SIGNED AS A DEED by
ALAN ROBERT SANDELL
in the presence of:
Witness's signature:
Name:
Address:
EXECUTED AS A DEED by
NIM HOLDINGS LIMITED
acting by:
Director _______________________
Director ________________________
<PAGE>
SCHEDULE 9
ADJUSTMENT OF CONSIDERATION
1. INTERPRETATION
In this Schedule the following expressions have the following
meanings:-
EXPRESSION MEANING
"the Completion Accounts" the accounts prepared in accordance with
paragraph 2
"Net Assets" means (subject to the provisions of
paragraph 2) the aggregate value of all
fixed and current assets of the Company
(excluding the cash in hand and at bank set
out in the Indebtedness Statement) minus
the aggregate value of all of the Company's
liabilities and provisions (including
provisions in accordance with SSAP 18 in
respect of contingent liabilities) and
excluding the Company's Borrowings set out
in the Indebtedness Statement
"the Provisional Consideration" the aggregate consideration for the
Shares of <pound-sterling>8,310,823.39
as stated in clause 3
"the Purchaser's Accountants" Ernst & Young
"the Vendors' Accountants" KPMG
2. COMPLETION ACCOUNTS
2.1 The parties shall procure that forthwith after Completion (to
the extent not already done), accounts for the Company shall be
prepared and reported on in accordance with the provisions of
this Schedule.
2.2 The Completion Accounts shall consist of a balance sheet of the
Company as at the close of business on the day before the date
of Completion.
2.3 The Completion Accounts shall (subject as hereinafter
provided):-
2.3.1 be prepared as if the period from the Accounts Date to
the date of Completion were a financial period of the
Company;
2.3.2 be prepared in accordance with the historical cost
convention, with generally accepted accounting
principles in the United Kingdom and all applicable
Accounting Standards;
2.3.3 show a true and fair view of the assets and
liabilities of the Company as at the date of Completion
and of the profits of the Company for the period ended
on the date of Completion; and
2.3.4 adopt bases and policies of accounting applied for the
purposes of the Accounts.
2.4 In preparing the Completion Accounts:-
2.4.1 a physical stock take shall be carried out on the date of
Completion;
2.4.2 provision shall be made for corporation tax at the rate
of 28% of the profit before tax of the Company for the
period from the Accounts Date to 30{th} June 1998 and
(subject to paragraph 2.4.3 below) no further provision
for corporation tax shall be made;
2.4.3 to the extent that it is not capable of being set off
against the liability of the Company for corporation
tax for the current financial year or any previous
financial year, full provision shall be made for the
advance corporation tax payable on any distribution
declared or paid before Completion;
2.4.4 provision shall only be made for the pension
payable by the Company to Mr and Mrs Morrison to the
extent that payment thereof is overdue at Completion;
and
2.4.5 any fees of Ernst & Young in connection with any of
the matters contemplated by this Agreement including
compliance with chapter VI of the Companies Act shall
be ignored.
3. PROCEDURE
3.1 The Purchaser shall procure that within 60 days after the date
of Completion the Purchaser's Accountants shall deliver a final
draft of the Completion Accounts to the Vendors' Accountants
for consideration on behalf of the Vendors. Unless the
Vendors' Accountants shall notify the Purchaser's Accountants
in writing within 21 days after receipt of such draft that they
do not accept that such draft complies with paragraph 2 the
Vendors shall be deemed to have accepted such draft as
complying with paragraph 2.
3.2 If within the period of 21 days referred to in paragraph 3.1
the Vendors' Accountants shall notify the Purchaser's
Accountants in writing that they do not accept that the said
draft complies with paragraph 2 then the Purchaser's
Accountants and the Vendors' Accountants shall use their best
endeavours to reach agreement upon the adjustments required to
the said draft to meet the objections of the Vendors'
Accountants.
3.3 When the Vendors' Accountants accept or are deemed to accept
that the said draft complies with paragraph 2 and certifying
the Purchaser's Accountants shall sign a report to the effect
that the Completion Accounts comply with paragraph 2 and
certifying Net Assets and any Completion Accounts /Net Assets
so reported on /certified shall be the Completion Accounts /Net
Assets for the purposes of this Agreement and shall be final
and binding on the parties.
3.4 In the event that the Vendors' Accountants and the Purchaser's
Accountants are unable to reach agreement as aforesaid any
matter in dispute shall be referred to the decision of a single
independent chartered accountant or an independent firm of
chartered accountants (in either case, "the Independent
Accountant") to be agreed upon between the Vendors and the
Purchaser within a period of 30 days after expiry of the 21 day
period referred to in paragraph 3.2 or (in default of such
agreement) to be selected (at the instance of either of them)
by the President for the time being of the Institute of
Chartered Accountants in England and Wales. The Independent
Accountant (whose costs shall be paid as the Independent
Accountant shall direct) shall act as expert (and not as
arbitrator) and the decision of the Independent Accountant in
respect of such disputed matters shall(in the absence of
manifest error) be final and binding on the parties. In giving
such decision the Independent Accountant shall state what
adjustments (if any) are to be made to the said draft in order
that it shall comply with paragraph 2.
4. ADJUSTMENT OF CONSIDERATION
4.1 When the Completion Accounts have become final and binding
(whether under paragraph 3.3 or by virtue of a decision of the
Independent Accountant) the Provisional Consideration shall
forthwith:-
4.1.1 be increased by the amount (if any) by which the Net
Assets are greater than <pound-sterling>3,623,457; or
(as the case may be); or
4.1.2 be reduced by the amount (if any) by which the Net
Assets are less than <pound-sterling>3,623,457.
4.2 The amount of any increase or reduction in the Provisional
Consideration shall be paid by the Purchaser or the Vendors (as
the case may be) within 14 days after the Completion Accounts
have become final and binding as aforesaid and any amount not
paid when due shall carry interest on the amount to be paid at
the annual rate of two per cent above the base lending rate
from time to time of Barclays Bank Plc from the date of
Completion until the date of actual payment (as well after
judgment as before).
5. Subject to the due performance of paragraph 4 the Purchaser shall
have no claim against the Vendors under the Agreement in respect of
any liability or deficiency to the extent that the same is taken
into account in the Completion Accounts but (save as aforesaid)
preparation and acceptance of the Completion Accounts by the
Purchaser shall be without prejudice to any claim which the
Purchaser may have against the Vendors in respect of any breach of
the Warranties.
6. All sums payable under this Schedule shall be paid in cash by way of
a banker's draft drawn on a Clearing Bank (and in case of sums
payable to the Vendors shall be paid to the Vendors' Solicitors and
payment to them will be a good and sufficient discharge to the
Purchaser and the Purchaser will not be concerned as to the
application of moneys so paid).
<PAGE>
SCHEDULE 10
PROVISIONS REGARDING RETENTION FUND
1. The Retention Fund shall be paid on Completion by the Purchaser to
the Vendors' solicitors and Purchaser's solicitors jointly ("the
Retention Fund Holder") who shall hold the Retention Fund on trust
for the Vendors and Purchaser on the following terms and be
irrevocably instructed by the Vendors and the Purchaser:-
1.1 to place the Retention Fund in a deposit account in the
name of the Retention Fund Holder with Cheltenham &
Gloucester and, subject to paragraphs 1.3 and 1.4, to
retain the same in such account;
1.2 subject as provided in paragraph 1.3 and 1.4, to pay the
Retention Fund to the Vendors' Solicitors in accordance
with clause 1.4 at the expiration of 18 months from the
date of Completion;
1.3 to pay one half of the amount originally paid into the
Retention Fund to the Vendors' Solicitors on the first
anniversary of Completion (or if that is not a Business
Day on the first Business Day thereafter) provided that no
payment shall be made out of the Retention Fund pursuant
to this paragraph 1.3 if, prior to the first anniversary
of the date of Completion, the Retention Fund Holder shall
have received written notice from the Purchaser
certifying that it has made a claim for compensation or
indemnity under the Warranties or Tax Covenant from the
Vendors which it is entitled to bring in accordance with
the provisions of the Agreement, containing details of the
subject matter and amount of such claim and a summary of
the breach alleged to give rise to such claim, if as a
result of the payment to the Vendors' Solicitors, the
balance of the Retention Fund after such payment would not
exceed the amount claimed by the Purchaser. In such case,
the amount to be paid to the Vendors' Solicitors on the
first anniversary of Completion (or if that is not a
Business Day on the first Business Day thereafter) shall
be such amount, (if any) as results in the balance
remaining in the Retention Fund being equal to the amount
of the Purchaser's claim or claims for compensation or
indemnity;
1.4 if at any time or from time to time prior to the
expiration of the said period of 18 months the Retention
Fund Holder shall receive written notice from the
Purchaser certifying that any claim for compensation or
indemnity under the Warranties or Tax Covenant has been
admitted by the Vendors including any payment to the
Purchaser pursuant to paragraph 4 of Schedule 9
(Adjustment of Consideration), or awarded by any Court of
competent jurisdiction from which there is no appeal or
from which no appeal is made within applicable time limits
to pay to the Purchaser the amount so admitted or awarded
(including any costs which may be admitted or awarded in
favour of the Purchaser) and/or (as the case may be)
retain the amount in dispute pending the determination or
award in respect of the claim, and, subject thereto, to
pay the balance, if any, of the Retention Fund to the
Vendors' Solicitors as aforesaid;
1.5 where (i) a claim has been notified pursuant to paragraph
1.3 resulting in more than half of the Retention Fund
being retained beyond the first anniversary of Completion
and (ii) the amount of the Purchaser's claim is awarded,
determined or agreed at less than the amount originally
notified, to pay (forthwith upon such award, determination
or agreement being communicated to them in writing by the
Vendors and Purchaser jointly, the giving of such
communication not to be unreasonably withheld or delayed
following any such award, determination or agreement) to
the Vendors Solicitors the difference between the sum
released to the Vendors' Solicitors on the first
anniversary of Completion and the sum which would then
have been released had the Purchaser's original claim been
for the lesser amount awarded determined or agreed;
1.6 to pay any interest received by the Retention Fund Holder
on the Retention Fund (less any tax thereon for which the
Retention Fund Holder may be accountable and any charges
and expenses incurred by the Retention Fund Holder) to the
Vendors and/or to the Purchaser in accordance with
paragraph 1.4 at the expiration of the period referred to
in paragraph 1.2 in proportion to the amounts (other than
in respect of costs) paid to them under this Schedule
provided that to the extent that any amount payable to the
Purchaser by the Retention Fund Holder incorporates
interest on the amount of compensation or indemnity
claimed such claim for compensation or indemnity shall be
disregarded in calculating the proportion of interest
earned on the Retention Fund that is payable to the
Vendors and/or to the Purchaser.
<PAGE>
SCHEDULE 11
LIMITATION OF LIABILITY
1. In this Schedule "the Vendors" means the Vendors in their capacities
as such and also as Warrantors and under the Tax Covenant as
covenantors and "claim" means any claim which would (but for the
provisions of this Schedule) be capable of being made against the
Vendors (or any of them) in respect of any liability for breach of
the Warranties and/or under the Tax Covenant.
2. Notwithstanding the provisions of this Agreement and of the Tax
Covenant:
2.1 the aggregate liability of the Vendors in respect of all
claims shall be limited to the aggregate consideration
paid by the Purchaser for the the Shares pursuant to this
Agreement;
2.2 the Vendors will be under no liability in respect of any
claim where the amount for which the Vendors would be
liable under such claim is less than <pound-sterling>1,000;
2.3 the Vendors will be under no liability in respect of any
claim (of or greater than the amount specified in paragraph
2.2) unless the amount of their liability in respect of
such claim is (when aggregated with their liability in
respect of any other such claim or claims made by the
Purchaser) in excess of <pound-sterling>62,500 in which
event the Vendors will (subject to the other provisions of
this Agreement) be liable for the whole amount of such
liability and not merely for the excess;
2.4 the Vendors will be under no liability in respect of any
claim unless written particulars of the claim (giving full
details of the specific matter in respect of which such
claim is made) shall have been given to the Vendors within
a period of 18 months from the date of this Agreement or
(in the case only of any claim relating to Taxation) on or
before 31 December 2004;
2.5 the Vendors will have no liability in respect of any
claim:
2.5.1 to the extent that it arises or is increased as a
result of an increase in rates of taxation after the
Accounts Date, or the passing of any legislation (or
making of any subordinate legislation) with
retrospective effect or any provision or reserve in
the Accounts being insufficient by reason of any
increase in rates of taxation after the Accounts
Date;
2.5.2 if it would not have arisen but for anything
voluntarily done or (where the omission could
reasonably have been avoided) omitted to be done
after Completion by the Purchaser or the Company or
any of their respective agents or successors in title
which the Purchaser or the Company, as the case may
be, would not have done or omitted to do if it did
not have the benefit of the Warranties or the Tax
Covenant;
2.5.3 to the extent that it relates to any loss for which
the Purchaser or the Company is indemnified by
insurance, or for which it would have been so
indemnified if at the relevant time there had been
maintained valid and adequate insurance cover of a
type in force in relation to the Company at the date
of this Agreement;
2.5.4 to the extent that it relates to:
2.5.4.1 any matter specifically provided for, or
specifically disclosed, in the Accounts and in
such case only to the extent of such provision
or disclosure; or
2.5.4.2 any liability for Taxation arising out of the
ordinary course of business of the Company after
the Accounts Date;
2.5.5 to the extent that it arises as a result of any
change in the accounting policy or practice or in the
accounting reference date of the Company after
Completion;
2.5.6 to the extent that the amount of the claim
corresponds to an increase in the value of the assets
of the Purchaser or the Company resulting from the
reduction in its liability to Taxation.
2.6 payment of any claim shall to the extent of such payment
satisfy and preclude any other claim which is capable of
being made in respect of the same subject matter;
Provided always that sub-paragraphs 2.1, 2.2, and 2.3 above
shall be of no effect with regard to paragraph 1, 3, 4 and 7.1
of Schedule 4.
3. Upon the Purchaser becoming aware that matters have arisen which
will or are likely to give rise to a claim, the Purchaser will:
3.1 as soon as reasonably practicable notify the Vendors in
writing of the potential claim and of the matters which
will or are likely to give rise to such claim;
3.2 not make any admission of liability, agreement or
compromise with any person, body or authority in relation
to the potential claim without prior consultation with the
Vendors;
3.3 at all times disclose in writing to the Vendors all
information and documents relating to the potential claim
or the matters which will or are likely to give rise to
such claim and, if requested by the Vendors, give the
Vendors and their professional advisers reasonable access
to the personnel of the Purchaser and/or the Company as the
case may be and to any relevant premises, chattels,
accounts, documents and records within the power,
possession or control of the Purchaser and/or the Company
to enable the Vendors and their professional advisers to
interview such personnel, and to examine such claim,
premises, chattels, accounts, documents and records and to
take copies or photographs thereof at their own expense;
and
3.4 where the claim relates to breach of the Warranties take
such action as the Vendors may reasonably require
(including the appointment of solicitors nominated by the
Vendors) to avoid, resist, contest or compromise the
potential claim or the matters which will or are likely to
give rise to such claim, subject to the Purchaser being
indemnified to its reasonable satisfaction against costs
and expenses incurred in taking such action.
4. Nothing herein shall in any way diminish the Purchaser's or the
Company's common law duty to mitigate its loss.
5. If any potential claim shall arise by reason of a liability of the
Company which is contingent only, then the Vendors shall not be
under any obligation to make any payment in respect of such claim
until such time as the contingent liability ceases to be contingent
and becomes actual provided that this paragraph shall not operate to
limit the Vendors' liability in respect of any contingent claim
notified within the time limits specified in paragraph 2.4 above.
6. The provisions of this Schedule apply notwithstanding any other
provision of this Agreement or its Schedules to the contrary and
will not cease to have effect in consequence of any rescission or
termination by the Purchaser of any other provisions of this
Agreement but shall not apply in respect of any claim based on the
fraud, dishonesty or wilful misstatement or wilful omission by or on
behalf of any of the Vendors.
<PAGE>
SCHEDULE 12
PROVISION RELATING TO NAV ESCROW
1. The amount payable pursuant to clause 3.4 into the NAV Escrow shall
be paid on Completion to the Vendors' Solicitors and Purchaser's
Solicitors jointly (the `Escrow Agent') who shall hold the NAV
Escrow on trust for the Vendors and the Purchaser and shall be
irrevocably instructed by the Vendors and the Purchaser:
1.1 to place the NAV Escrow in a deposit account in the name of the
Escrow Agent with Cheltenham & Gloucester and deal with it as
follows:
1.1.2 if the NAV Estimate is greater than
<pound-sterling>3,623,457 the NAV Escrow shall be dealt
with as follows:
a) if the Net Assets are equal to or exceed the NAV
Estimate, the NAV Escrow shall be paid to the
Vendors;
b) if the Net Assets exceed <pound-sterling>3,623,457
but are less than the NAV Estimate, the amount of
such excess shall be paid to the Vendors and the
balance shall be paid to the Purchaser;
c) if the Net Assets are less than
<pound-sterling>3,623,457, the NAV Escrow shall be
paid to the Purchaser;
1.1.3 If the NAV Estimate is less than <pound-sterling>3,623,457
the NAV Escrow shall be dealt with as follows:
a) if the Net Assets are less than or equal to the NAV
Estimate, the NAV Escrow shall be paid to the
Purchaser;
b) if the Net Assets exceed the NAV Estimate but are
less than <pound-sterling>3,623,457, the amount of
such excess shall be paid to the Vendors and the
balance shall be paid to the Purchaser;
c) if the Net Assets are more than
<pound-sterling>3,623,457 the NAV Escrow shall be paid
to the Vendors.
1.2 to make payments out of the NAV Escrow on the date on which
payment of any increase or reduction in the Provisional
Consideration (as defined in Schedule 9) is due to be made
under paragraph 4.2 of Schedule 9.
1.3 to pay any interest received by the Escrow Agent on the NAV
Escrow (less any tax thereon for which the Escrow Agent may be
accountable and any charges and expenses incurred by the Escrow
Agent) to the Vendors and/or the Purchaser in accordance with
paragraph 1.1 on the date it makes payment under paragraph 1.2
in proportion to the amounts paid to them under this Schedule.
2. The provisions of this Schedule and of clause 3.4 shall operate
without prejudice to the provisions of Schedule 9 and clause
3.1.
<PAGE>
SCHEDULE 13
COVENANT RELATING TO ASBESTOS RELATED CLAIMS
1. INTERPRETATION
In this Schedule the following expressions have the following
meanings:
Expression Meaning
<TABLE>
<CAPTION>
<S> <C>
"Asbestos Liability" Any liability incurred by the Company in consequence
of:
i) Any claim by any individual that he has
suffered damage to his health by reason of
exposure to asbestos incorporated in the
Concorde Road Property or
ii) Any legal requirement arising after the
date hereof that the Company remove and dispose
of any such asbestos incorporated in the
Concorde Road Property to the extent that the
Company is unable to require Norwich City
Council or any other tenant of the Concorde Road
Property to effect and or pay for such removal
and disposal.
"Concorde Road The Company's leasehold property at 25 Concorde Road,
Property" Norwich as more particularly referred to in Schedule 3.
</TABLE>
2. COVENANT
2.1 The Warrantors warrant and represent to the Purchaser that:
<TABLE>
<CAPTION>
<S> <C>
2.1.1 the Company has not itself and to the best of the
Warrantors' information or belief, no other party has done
any act likely to disrupt any asbestos incorporated in the
Company's leasehold property at 25 Concorde Road, Norwich;
and
2.1.2 the Company has not received notice of any claim from any
person alleging injury, loss or damage suffered as a
result of exposure to asbestos.
<CAPTION>
2.2 The Warrantors joint and severally covenant to pay to the Purchaser
an amount equal to any Asbestos Liability.
2.3 The provisions of paragraphs 2.1, 2.2, 2.3, 2.5.2, 2.5.3, 2.6, 3, 5
and 6 of Schedule 11 shall apply to the Warrantors' obligations
under paragraphs 2.1 and 2.2 of this Schedule as if set out in this
Schedule in full and subject also to the proviso that the
Warrantors shall be under no liability in respect of any claim
under the above covenant and representation unless written
particulars of the claim and giving full details of the Asbestos
Liability shall have been given to the Warrantors on or before 31{st}
December 2004.
2.4 The said provisions of Schedule 11 shall apply as though:
<CAPTION>
2.4.1 the reference therein to "the Vendors" were to "the
Warrantors";
2.4.2 "claim" meant any claim which but for the provisions of that
Schedule would be capable of being made under this para. 2;
and
2.4.3 the words "or the representation and covenant set out in
paras. 2.1 and 2.2 of Schedule 13" were added at the end of
para. 2.5.2 of Schedule 11.
</TABLE>
3. UNDERTAKING BY PURCHASER
The Purchaser undertakes to procure that the Company uses reasonable
endeavours to require Norwich City Council or any other tenant for
the time being of the Concorde Road Property to effect and or pay
for any such removal and disposal as is referred to in the
definition of Asbestos Liability above.
<PAGE>
ATTESTATIONS
SIGNED AS A DEED by
JAMES EDWARD BARLOW
in the presence of: SGD. J.E BARLOW
Witness's signature: sgd. A.G Evans
Name: AG Evans
Address: Eversheds, Norwich
SIGNED AS A DEED by
ALAN ROBERT SANDELL
in the presence of: SGD. A. R. SANDELl
Witness's signature: sgd. AG Evans
Name: AG Evans
Address: Eversheds, Norwich
SIGNED AS A DEED by
TREVOR DAVID JOHNSON
in the presence of: SGD. T.D. JOHNSON
Witness's signature: sgd. AG Evans
Name: AG Evans
Address: Eversheds, Norwich
SIGNED AS A DEED by
JAN BARLOW BY HER ATTORNEY
in the presence of SGD. J. E. BARLOW
Witness's signature: sgd. AG Evans
Name: AG Evans
Address: Eversheds, Norwich
SIGNED AS A DEED by
PAULINE SANDELL BY HER ATTORNEY
in the presence of SGD J. E. BARLOW
Witness's signature: sgd. AG Evans
Name: AG Evans
Address: Eversheds, Norwich
<PAGE>
EXECUTED AS A DEED by
NIM HOLDINGS LIMITED
acting by:
Director SGD. J KRATOCHVIl
Director SGD. M IMBLEr
EXECUTED AS A DEED by SGD. J KRATOCHVIL
BERRY PLASTICS CORPORATION
acting by: SGD. M IMBLER
<PAGE>
