Exhibit 10.33

Dated 3rd November 2008

 

1.     Esterline Technologies Limited

2.     Esterline Technologies Corporation

3.     EMA Holdings UK Limited

4.     Ametek, Inc.

 

 

AGREEMENT

for the sale and purchase

of the entire issued share capital

of Muirhead Aerospace Limited

 

 

CMS Cameron McKenna LLP

Mitre House

160 Aldersgate Street

London EC1A 4DD

 

T +44(0)20 7367 3000

F +44(0)20 7367 2000

 

Execution Copy

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Table of contents

 

1.      Definitions and Interpretation    1 2.      Sale and purchase    9 3.
     Consideration    10 4.      Completion    10 5.      Transitional Services
and Retention Bonus Payments    11 6.      Warranties and undertakings    12 7.
     Limitation of Seller’s liability    14 8.      Protection of goodwill and
trade secrets    14 9.      Termination    16 10.      Third party rights    16
11.      Further assurance    17 12.      Confidentiality; announcements    17
13.      Assignment    18 14.      Waiver; variation; invalidity    18 15.     
Costs and expenses    19 16.      Payments    19 17.      Guarantee    20 18.
     Entire agreement    20 19.      Counterparts    21 20.      Time of the
essence    21 21.      Notices    21 22.      Governing law and jurisdiction   
22 23.      Seller’s Guarantee    23 24.      Purchaser’s Guarantee    23 25.
     Agent for Service    24 Schedule 1 The Companies    26 Part 1    26 Part 2
   27 Part 3    28 Part 4    29 Schedule 2 Properties    30 Part 1 Properties   
30 Part 2 Leases    30 Part 3 Letting Documents    31 Schedule 3 Intellectual
Property    32 Part 1 Registered IP (excluding Licences In)    32 Part 2
Material unregistered IP (excluding Licences In)    34

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Part 3 Licences In - registered    34 Part 4 Licences In - material unregistered
   35 Implied licences from some customers of the Business to use specifications
and design drawings provided by customers to design and manufacture parts for
such customers    35 Schedule 4 Information Technology    36 Part 1 IT Systems
   36 Part 2 Domain names    37 Schedule 5 Completion Obligations    39 1.     
Seller’s Completion obligations    39 2.      Purchaser’s Completion obligations
   40 Schedule 6 Warranties    41 Part 1 General warranties    41 1.      Power
to contract    41 2.      The Company    41 3.      Connected business    42 4.
     Accounts    43 5.      Post-Balance Sheet Date events    44 6.     
Transactions with the Seller, directors and Connected Persons    45 7.     
Finance    46 8.      Environment    47 9.      Health and Safety    49 10.     
Other assets    49 11.      Insurance    50 12.      Litigation    51 13.     
Licences    51 14.      Trading    53 15.      Contracts    56 16.     
Employees    57 17.      Pension Schemes    59 18.      Intellectual Property
Rights    61 19.      Information technology and telecommunications    64 20.
     Legislation    65 21.      Information    65 22.      Properties    65
Part 2 Taxation Warranties    68 23.      General    68 24.      Payment of Tax
   68 25.      Compliance    68 26.      Taxation Claims Reliefs and Liabilities
   69

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27.      Corporation Tax/Capital Allowances    69 28.      Close Companies    70
29.      Tax Avoidance    70 30.      Value Added Tax    70 31.      Share
Schemes/Restricted Securities    70 32.      International    70 33.     
Non-Arm’s Length Transactions    71 34.      Groups of Companies    71 35.     
Stamp Duties    71 36.      Group Payment Arrangements    71 Schedule 7
Limitation of Seller’s liability    72 1.      General limitations    72 2.     
Quantum    72 3.      Time limits    73 4.      Conduct of Claims    73 5.     
Recovery from Third Parties    75 Schedule 8 Working Capital Adjustment    76
Schedule 9 List of documents in the agreed form    79 Schedule 10 Form of
Working Capital Statement    80 Schedule 11 Transitional Services    82

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THIS AGREEMENT is made the 3rd day of November 2008

BETWEEN

 

(1) Esterline Technologies Limited, (registered in England with number 03837209)
whose registered office is at Mitre House, 160 Aldersgate Street, London EC1A
4DD (the “Seller”);

 

(2)

Esterline Technologies Corporation, a company incorporated in the State of
Delaware, USA whose principal office is at City Centre Bellevue, 500 108th
Avenue NE, Suite 1500, Bellevue, WA 98004, USA (the “Seller’s Guarantor”);

 

(3) EMA Holdings UK Limited, (registered in England with number 4600860) whose
registered office is at PO BOX 36, 2 New Star Road, Leicester, Leicestershire
LE4 9JQ (the “Purchaser”); and

 

(4) Ametek, Inc., a company incorporated in the State of Delaware, USA whose
principal office is at 37, North Valley Road, Building 4, Paoli, PA 19301, USA
(the “Purchaser’s Guarantor”).

RECITALS

 

(A) Details of Muirhead Aerospace Limited (“Muirhead”), Advanced Input Devices
(UK) Limited (“AIDL”) and Norcroft Dynamics Limited (“Norcroft”) are set out in
Parts 1, 2 and 3 of Schedule 1.

 

(B) Muirhead is the beneficial owner of the entire issued share capital of AIDL
and the legal and beneficial owner of the entire issued share capital of
Norcroft.

 

(C) The diagram showing the Seller’s group structure at Completion is set out in
Part 4 of Schedule 1.

 

(D) The Seller has agreed to sell the Shares to the Purchaser and the Purchaser
has agreed to purchase the Shares on and subject to the terms and conditions of
this Agreement.

 

(E) The Seller’s Guarantor has agreed to guarantee the obligations of the Seller
under this Agreement.

 

(F) The Purchaser’s Guarantor has agreed to guarantee the obligations of the
Purchaser under this Agreement.

NOW IT IS AGREED as follows:

 

1. Definitions and Interpretation

Defined terms

 

1.1 In this Agreement:

“Accounts” means the audited financial statements of each Company as at the
relevant Balance Sheet Date (comprising a balance sheet, profit and loss
account, notes, auditors’ and directors’ reports and a cashflow statement).
Copies of the Accounts have been initialled by or on behalf of each of the
Parties for the purpose of identification;

“Acquiror’s Business” means a business operated by any company excluded from
clause 8.1 by reason of clause 8.3, to the extent that such business is or may
in any way be in competition with all or any part of the Business;

 

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“Actual Borrowing Amount” means the aggregate amount necessary to repay in full
all External Borrowings of the Companies outstanding as of the Completion Date;

“Actual Cash Balance” means the amount of the Cash at 11.59pm on the day
immediately preceding the Completion Date;

“Actual Working Capital” means the adjusted working capital of the Companies as
shown in the Working Capital Statement as agreed or determined pursuant to
Schedule 8;

“Affiliate” means in relation to any body corporate from time to time (i) a
parent undertaking of such body corporate; or (ii) a subsidiary undertaking of
such body corporate or of any such parent undertaking;

“AID Inc” means Advanced Input Devices Inc, a company incorporated in the State
of Delaware, USA whose principal office address is at Coeur d’Alene, Idaho, USA;

“Agreement” means (subject to sub-clause 18.1 (This Agreement)) this Agreement
including the Recitals and Schedules, but not the Tax Deed;

“Balance Sheet Date” means 31 October 2007 in relation to AIDL and 26 October
2007 in relation to Muirhead and Norcroft;

“Business” means the business of the Companies at the date of Completion;

“Business Day” means a day (other than a Saturday or Sunday) when banks are open
for business in the City of London;

“Cash” means the aggregate fair market value of any cash, bank deposits or cash
equivalents or derivative instruments owned by any Company expressed in pounds
sterling, and taking into account any cheques that have been received by any
Company (as listed in the schedule in the agreed form) and any outstanding but
unpaid cheques issued by any Company, but excluding any amount taken into
consideration in calculating the Inter Company Receivables, less the amount
included in the balance sheets contained in the Accounts in respect of customer
deposits or prepayments;

“CAA” means the Capital Allowances Act 2001;

“CA 85” means the Companies Act 1985;

“Charges” means (a) the charge over 3,581,565 shares in Muirhead in favour of
Wachovia Bank (representing 65% of the issued share capital) in accordance with
an agreement dated 29 May 2007; and (b) the charge over 65 shares in AIDL in
favour of Wachovia Bank in accordance with an agreement dated 11 June 2003;

“Commercial Information” means all information which belongs to the Companies or
is used exclusively by the Companies for the purposes of the Business (or any
aspect of it);

“Companies” means Muirhead, AIDL and Norcroft and each of them is a “Company”;

“Company Expenses” means collectively, the amount of the unpaid fees or expenses
or bonuses (other than Retention Bonuses and Incentive Bonuses) that have been
or will be incurred by the Companies on or prior to the Completion Date (whether
payable before or after Completion) on behalf of the Companies, the Seller,
and/or any member of the Retained Group in connection with the preparation,
negotiation and execution of this Agreement, the consummation or performance of
any of the transactions contemplated by this Agreement including, without
limitation, the fees and expenses of any broker, investment banker or financial
advisor, and any legal, accounting and consulting fees and expenses;

 

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“Competent Authority” means (i) any person (whether autonomous or not) having
legal and/or regulatory authority and/or enforcement powers; (ii) any court of
law or tribunal in any jurisdiction; and/or (iii) any Taxation Authority;

“Completion” means completion of the sale and purchase of the Shares pursuant to
this Agreement;

“Completion Date” means the date of Completion;

“Completion Tax Statement” has the meaning given to it in the Tax Deed;

“Connected Person” means a person connected (within the meaning of section 839
TA 88) with the Seller or with any of the directors (or any former director) of
either Company;

“Consideration” means the consideration payable for the Shares pursuant to
Clause 3 (Consideration);

“Deeds of Assignment” means the agreed form deeds of assignment between
(a) Muirhead and the Seller’s Guarantor, (b) AIDL and AID Inc and (c) AIDL and
the Seller’s Guarantor in relation to the assignment of the ‘Muirhead’,
‘Traxball’ and ‘Traxsys’ trade marks;

“Disclosed” means fairly disclosed (with sufficient details to identify the
nature and scope of the matter disclosed and the specific warranty or warranties
to which it relates) by the Disclosure Letter (and “Disclosure” shall be
construed accordingly);

“Disclosure Letter” means the letter described as such, dated as of the date of
this Agreement and addressed by the Seller to the Purchaser;

“Employee Options” means the share options held by any employee of any Company
(including Graham Payne) in respect of shares in any member of the Retained
Group;

“Encumbrance” means any interest or equity of any person (including any right to
acquire, option or right of pre-emption or conversion) or any mortgage, charge,
pledge, lien, assignment, hypothecation, security interest, title retention or
any other security agreement or arrangement, or any agreement to create any of
the above;

“Environment”, “Environment Agreement”, “Environment Law” and “Environment
Liability” are as defined in paragraph 8 of Part 1 of Schedule 6 (Environment);

“ERA” means the Employment Rights Act 1996;

“Esterline Reorganisation” means the reorganisation of the Retained Group of
companies which occurred prior to Completion as described in the step plan
extracts of which are set out in the document in the agreed form entitled
“Esterline UK Tax Restructuring” and dated 29 October 2008;

“Estimated Working Capital” means £8,036,000 being the bona fide estimate of the
amount of the Actual Working Capital agreed between the Seller and the Purchaser
at Completion as set out in the schedule in agreed form;

“Existing Customer” means any person who at any time during the 12 months
preceding Completion shall have been a customer of a Company;

“Existing Use” is as defined in paragraph 22 of Part 1 of Schedule 6
(Properties);

“External Borrowings” means the aggregate of the amounts (if any) of all
outstanding borrowings and outstanding indebtedness in the nature of borrowings
of any Company, including without limitation any bank debit balances, bonds,
notes, loan stock, debentures or

 

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other debt instruments, any overdraft or finance lease and also accrued interest
on the foregoing items and any premiums, fees, penalties, expenses and other
amounts related thereto, but excluding ordinary trade credit and also excluding
any amount taken into consideration in calculating the Inter-Company Payables
and also excluding any amount owing from one Company to another Company;

“FA” means Finance Act;

“Financial Year” means a financial year within the meaning of section 390
Companies Act 2006;

“FRS” means a financial reporting standard in force at the date of this
Agreement as issued by the Accounting Standards Board Limited;

“Harm” and “Hazardous Matter” are as defined in paragraph 8 of Part 1 of
Schedule 6 (Environment);

“Incentive Bonus” means any and all bonuses payable by any Company to any
officers, employees (in each case excluding Graham Payne) or independent
contractors pursuant to any bonus scheme relating to the financial performance
of any Company for all periods ending on or prior to the Completion Date but
excluding the Retention Bonuses;

“Incentive Bonus Payment Date” means a date on or around 15 December 2008;

“Indemnities” means the indemnities given by the Seller to the Purchaser as set
out in clauses 6.5 and 6.6 and “Indemnity” shall be construed accordingly;

“Intellectual Property Rights” is as defined in paragraph 18 of Part 1 of
Schedule 6 (Intellectual Property Rights);

“Inter-Company Payables” means the aggregate of the amounts (if any) owing,
including in respect of interest accrued on all such amounts, as at the opening
of business on the Completion Date from the Companies to members of the Retained
Group, excluding the Ordinary Trading Items, expressed in pounds sterling;

“Inter-Company Receivables” means the aggregate of the amounts (if any) owing,
including in respect of interest accrued on all such amounts, as at the opening
of business on the Completion Date from members of the Retained Group to the
Companies, excluding the Ordinary Trading Items, expressed in pounds sterling;

“IT Assignment Documents” means the documents in the agreed form for the
transfer of certain software to AIDL from Infor;

“IT Contracts”, “IT Services” and “IT Systems” are as defined in paragraph 19 of
Part 1 of Schedule 6 (Information technology and telecommunications);

“IT(EP)A” means the Income Tax (Earnings and Pensions) Act 2003;

“Know How” is as defined in paragraph 18 of Part 1 of Schedule 6 (Intellectual
Property Rights);

“Lease” means in relation to any Property, if applicable, the lease under which
the Property is held by any Company;

“Letting Documents” means, in relation to any Property, leases, underleases,
tenancies, licences or other agreements or arrangements giving rise to rights of
occupation (in each case as amended) to which the Property is subject;

 

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“Licences In” and “Licences Out” are as defined in paragraph 18 of Part 1 of
Schedule 6 (Intellectual Property Rights);

“Litigation” means any actual or prospective proceedings, whether judicial,
administrative, tribunal, arbitral, criminal or similar and whether or not
subject or intended to be subject to Alternative Dispute Resolution techniques;

“Losses and Expenses” means losses, damages, liabilities, claims, demands, costs
and expenses and all reasonably incurred legal and other professional fees
(including, for the avoidance of doubt in relation to clauses 6.5(b), 6.5(c)
6.5(d) and 6.5(g) any employer’s Class 1 national insurance or other Tax);

“Ordinary Trading Items”: means ordinary trade indebtedness outstanding at
Completion and relating to the period up to Completion only, between the
Companies and members of the Retained Group, but excluding management charges
and other administrative charges or recharges payable by the Companies (which
shall be paid in full prior to Completion);

“Other Property” is as defined in paragraph 8 of Part 1 of Schedule 6
(Environment);

“Parties” means the Purchaser, the Purchaser’s Guarantor, the Seller and the
Seller’s Guarantor (and “Party” shall be construed accordingly);

“Payne Compromise Agreement” means the agreed form compromise agreement between
Muirhead and Graham Payne to be delivered by the Seller duly executed on
Completion;

“Pension Schemes” means agreements or arrangements (whether legally enforceable
or not) for the payment of any pensions, allowances, lump sums or other like
benefits on retirement for the benefit of any present or former director,
officer or employee of any Company or for the benefit of the dependants of any
such persons;

“Permits” is as defined in paragraph 8 of Part 1 of Schedule 6 (Environment);

“Permitted Business” means:

 

  (a) the existing business of Mason Electric in relation to the manufacture and
sale of cursor control devices (other than track balls), save that Mason may not
sell such devices to Existing Customers in respect of applications met by
products supplied (or to be supplied) under existing contracts with those
Existing Customers by AIDL (but, for the avoidance of doubt, where AIDL has an
existing contract with an Existing Customer this prohibition will not prevent
Mason Electric from selling such devices to such Existing Customer in relation
to other applications);

 

  (b) the existing business of BVR Technologies (“BVR”) in relation to the
manufacture and sale of rotary actuation devices and angular position sensors
(including but not limited to linear actuation or rotary actuation products that
utilise BVR’s custom precision planetary gearbox in-house design and
manufacturing capability and/or BVR’s patented Hall effect digital sensing
technologies) for customers other than Existing Customers of the motion business
of Muirhead, provided that:

 

  (i) such business may not manufacture or supply products for the downhole/oil
and gas industry (except to its existing customer Moog); and

 

  (ii) (subject to sub-paragraph (i)) BVR may manufacture and sell products to
any of the following existing customers of BVR in North America only, namely
(1) BAE, (2) Hamilton Sundstrand, (3) Pratt Whitney, (4) Boeing and (5) Parker
Hannifin, provided that BVR may not sell products meeting applications met by
products supplied (or to be supplied) under existing contracts with such
customers by any Company; and

 

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  (c) any motion control business with sales in excess of US$100,000,000 that
may be acquired by any member of the Retained Group from a third party on arm’s
length terms.

“Proceedings” means any proceeding, suit or action (including arbitration)
arising out of or in connection with this Agreement;

“Product” is as defined in paragraph 14 of Part 1 of Schedule 6 (Trading);

“Properties” means the properties of which short particulars are set out in
Schedule 2 (Properties) and the expression “Property” shall mean, where the
context so admits, any one or more or any part of such properties;

“Provisional Consideration” means the provisional consideration payable for the
Shares, as specified in clause 3.1;

“Purchaser’s Solicitors” means CMS Cameron McKenna LLP of Mitre House, 160
Aldersgate Street, London EC1A 4DD (Ref. BHH/DNHE/0Z4060.00050);

“Regulatory Requirements” means any applicable requirement of law, the UK
Listing Authority or the London Stock Exchange plc, or of any person who has
regulatory authority which has the force of law;

“Releases” means the agreed form deeds of release by Wachovia Bank in respect of
the Charges;

“Relief” has the meaning given to it in the Tax Deed;

“Remediation Action” is as defined in paragraph 8 of Part 1 of Schedule 6
(Environment);

“Retained Group” means the Seller and its Affiliates (excluding the Companies)
from time to time;

“Retained Information” means any financial information and/or Tax information
relating to the Companies (and shall include details of policies of insurance
which any Company had the benefit of) which following Completion remains in the
possession or control of the Seller or the Retained Group (but not of the
Purchaser);

“Retention Bonuses” means the retention bonuses payable to the Selected
Employees in relation to the successful completion of the sale by the Seller of
the Companies in accordance with the terms of the Retention Bonus Letters;

“Retention Bonus Letters” means the letters between the Seller’s Guarantor,
Muirhead and each Selected Employee dated on or about 11 July 2008 in relation
to the payment of the Retention Bonuses including the timing and amount of any
such payments, as amended, copies of which have been Disclosed;

“Retention Bonus Payment Date” means a date on which the Retention Bonuses are
due to be paid in accordance with the Retention Bonus Letters;

“Selected Employees” means Dawn Salisbury, Stephen Scaife, Pradeep Sharma,
Stephen Wells, Michael Baker, Simon Coverdale, Wendy Stansfield, Mark Butler,
Anthony Sawyer, Michael Robinson and Robert Furmsten;

“Seller’s Group” means the Retained Group together with the Companies;

“Seller’s Solicitors” means Taylor Wessing LLP of Carmelite, 50 Victoria
Embankment, London EC4Y ODX (Ref: DNK/MPB/EST-9-10);

 

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“Service Termination Dates” means the various dates set out in Schedule 11 for
the termination of the Transitional Services;

“Shares” means the 5,510,101 fully-paid issued ordinary shares in the capital of
Muirhead;

“SSAP” means a statement of standard accounting practice in force at the date of
this Agreement as adopted by the Accounting Standards Board Limited;

“TA 88” means the Income and Corporation Taxes Act 1988;

“Taxation” or “Tax” has the meaning given to it in the Tax Deed;

“Taxation Authority” has the meaning given to it in the Tax Deed;

“Taxation Statute” has the meaning given to it in the Tax Deed;

“Tax Deed” means the deed in the agreed form containing certain Taxation
covenants and indemnities between the Seller and the Purchaser;

“Tax Warranties” means the warranties set out in Part 2 of Schedule 6 (Taxation
Warranties);

“TCGA” means the Taxation of Chargeable Gains Act 1992;

“TMA” means the Taxes Management Act 1970;

“Trade Union” is as defined in section 1 TULRCA;

“Transaction Document” means this Agreement, the Tax Deed or any document or
agreement entered into pursuant to or in connection with this Agreement;

“Transitional Services” means the transitional services to be provided or
procured by the Seller to the Purchaser and/or the Companies as set out in
clause 5 and Schedule 11;

“Traxsys Supply Agreement” means the agreement in the agreed form between AID
Inc and AIDL in relation to the supply of certain products by AIDL to AID Inc
following Completion;

“TULRCA” means the Trade Union and Labour Relations (Consolidation) Act 1992;

“TUPE” means the Transfer of Undertakings (Protection of Employment) Regulations
2006 (and, where the context so requires, the 1981 Regulations defined in those
regulations);

“UK GAAP” means FRSs, SSAPs, the legal principles set out in such of the
regulations referred to in sections 396 and 404 Companies Act 2006 as apply,
rulings and abstracts of the Urgent Issues Task Force of the Accounting
Standards Board Limited and guidelines, conventions, rules and procedures of
accounting practice in the United Kingdom which are regarded as permissible by
the Accounting Standards Board Limited;

“US Dollar” or “USD” means the lawful currency of the United States of America;

“US GAAP” means United States generally accepted accounting principles;

“US GAAP Accounts” means the monthly management reports in the agreed form as at
30 September 2008 (and for the 11 month period then ended);

“VAT” means value added tax or any equivalent Tax that is levied on the supply
of goods or services in any jurisdiction;

“VATA” means the Value Added Tax Act 1994;

 

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“Warranties” means the warranties set out in clause 6 (Warranties) and Schedule
6 (Warranties); and

“Working Capital Statement” means the working capital statement in the form set
out in Schedule 10 as referred to and prepared in accordance with Schedule 8
(Working Capital Adjustment).

Interpretation

 

1.2 In interpreting this Agreement:

 

  1.2.1 reference to any document as being “in the agreed form” shall mean that
it is in the form agreed between the Seller and the Purchaser and signed for the
purposes of identification by or on behalf of the Seller and the Purchaser or
identified as being in the agreed form by an email between or on behalf of the
Seller and the Purchaser.

 

  1.2.2 where any statement is qualified as being limited by any person’s
knowledge (for example, by using expressions such as “so far as he is aware”),
the statement shall be deemed to be given to the best of his knowledge,
information and belief after making reasonable enquiries including, but not
limited to, enquiries of Graham Payne, in relation to Schedule 6 parts 1 to 22,
Pradeep Sharma in relation to parts 1 to 7, 10, 13 and 23 to 27, Phillip Bourne
(for AIDL only) in relation to parts 1 to 7, 10, 13, 16 to 17 and 19 to 22, Dawn
Salisbury (for Muirhead only) in relation to parts 8 to 10, Mick Robertson (for
Traxsys only) in relation to parts 1 to 9, Robert Furmston (for Traxsys only) in
relation to parts 1 to 8 and 10, both Tony Sawyer and Mark Baker (Traxsys only)
in relation to parts 8 to 22, both Simon Covedale and Stephen Wells (Muirhead
only) in relation to parts 11 and parts 14 to 15, Wendy Stansfield in relation
to parts 16 to 17 and both Steven Scaife and Mike Butler (Muirhead only) in
relation to part 18.

 

  1.2.3 the table of contents and headings and sub-headings are for convenience
only and shall not affect the interpretation of this Agreement.

 

  1.2.4 unless the context otherwise requires, words denoting the singular shall
include the plural and vice versa and references to any gender shall include all
other genders. References to any person shall include natural persons, bodies
corporate, unincorporated associations, partnerships, governments, governmental
agencies and departments, statutory bodies or other entities, in each case
whether or not having a separate legal personality, and shall include such
person’s successors.

 

  1.2.5 the words “other”, “include” and “including” shall not connote
limitation in any way.

 

  1.2.6 references to Recitals, Schedules, clauses and sub-clauses are to
(respectively) recitals to, schedules to, and clauses and sub-clauses of, this
Agreement (unless otherwise specified) and references within a Schedule to
paragraphs are to paragraphs of that Schedule (unless otherwise specified).

 

  1.2.7 references to any statute, statutory provision, directive of the Council
of the European Union (whether issued jointly with any other person or under any
other name) or other legislation include a reference to that statute, statutory
provision, directive or legislation as amended, extended, re-enacted,
consolidated or replaced from time to time (whether before or after the date of
this Agreement) and include any order, regulation, instrument or other
subordinate legislation made under the relevant statute, statutory provision,
directive or legislation and in force at the relevant time.

 

  1.2.8 words and expressions used in this Agreement that are defined in:

 

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  (a) provisions of the Companies Act 2006 in force at the date of this
Agreement shall be read as having those meanings; and

 

  (b) provisions of CA 85 shall be read as having those meanings as long as
those provisions are in force, and shall then be read as having the meanings
given to them in the Companies Act 2006.

 

  1.2.9 words and expressions defined in the Tax Deed shall (to the extent they
are not inconsistent with this Agreement) bear those meanings respectively in
this Agreement.

 

  1.2.10 references to any English legal term for any action, remedy, method of
judicial proceeding, legal document, legal status, court, organisation, body,
official or any legal concept, state of affairs or thing shall in respect of any
jurisdiction other than England be deemed to include that which most nearly
approximates in that jurisdiction to the English legal term.

 

  1.2.11 any reference to “writing” or “written” shall include faxes, and any
legible reproduction of words delivered in permanent and tangible form (but not
email).

 

  1.2.12 except as specified in Schedule 10, any amount determined or expressed
in one currency (the “First Currency”) shall, to the extent that it requires in
whole or in part to be expressed in pounds sterling (or any other currency) in
order to give due effect to this Agreement, be deemed for that purpose to have
been converted into the relevant currency at the close of business on the
Business Day immediately preceding the Completion Date. Subject to any
applicable legal requirements governing conversions into that currency, the rate
of exchange shall be the spot rate for the purchase of that other currency with
the First Currency at the time of the deemed conversion as shown in the final
edition of the Financial Times published on the following day.

 

  1.2.13 references to times of the day are (unless otherwise expressly
provided) to London time and references to a day are to a period of 24 hours
running from midnight on the previous day.

 

2. Sale and purchase

Obligation to sell and purchase

 

2.1 Subject to the terms of this Agreement, the Seller shall sell all the Shares
to the Purchaser (together with all rights attaching to them at the date of this
Agreement); and the Purchaser shall purchase the Shares accordingly.

Dividends and distributions

 

2.2 The Purchaser shall be entitled to receive all dividends and distributions
(whether of income or capital) declared, paid or made by either Company on or
after the date of this Agreement.

Sale of all Shares

 

2.3 The Purchaser shall not be obliged to complete the purchase of any of the
Shares unless the purchase of all the Shares is completed simultaneously.

Implied covenants for title

 

2.4 The Seller covenants that it has the right to transfer the legal and
beneficial title to the Shares held by it to the Purchaser in accordance with
this Agreement and is disposing of them free from all Encumbrances.

 

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Part 1 of the Law of Property (Miscellaneous Provisions) Act 1994 shall not
apply to any disposition made under or pursuant to this Agreement.

Waivers of pre-emption

 

2.5 The Seller waives all rights of pre-emption or similar rights over any of
the Shares conferred on it either by the articles of association of Muirhead or
in any other way.

 

3. Consideration

Consideration

 

3.1 The consideration for the sale of the Shares payable on Completion shall be
£40,015,000 (the “Provisional Consideration”). The consideration shall be
adjusted after Completion as provided in clause 3.2 below and in clause 12 of
the Tax Deed.

 

3.2 The Provisional Consideration shall be adjusted after Completion as follows:

 

  3.2.1 if the Actual Working Capital is less than Estimated Working Capital,
the Seller shall pay to the Purchaser the amount of the deficiency;

 

  3.2.2 if the Actual Working Capital is greater than Estimated Working Capital,
the Purchaser shall pay to the Seller the amount of the excess,

in either case within 10 Business Days after the date on which the Working
Capital Statement has been agreed or settled.

Reduction in consideration

 

3.3 Any payment made by the Seller in respect of a breach of the Warranties or
under the Tax Deed or any other payment made by the Seller pursuant to this
Agreement shall (so far as possible) be deemed to reduce the price paid for the
Shares under this Agreement by a matching amount. Any payment made by the
Purchaser to the Seller under this Agreement (other than any payments made
pursuant to Schedule 11) shall (so far as possible) be deemed to increase the
price paid for the Shares under this Agreement by a matching amount.

 

4. Completion

Completion

 

4.1 Completion shall take place at the offices of the Purchaser’s Solicitors (or
wherever else the Parties agree in writing) upon execution and release by all
parties of this Agreement.

 

4.2 At Completion, the Parties shall perform their respective Completion
obligations set out in Schedule 5 (Completion Obligations). Completion shall be
effective as of 12.01am on the Completion Date.

Effect of Completion

 

4.3 Notwithstanding Completion:

 

  4.3.1 each provision of this Agreement (and any other document referred to in
it) not performed at or before Completion but which remains capable of
performance;

 

  4.3.2 the Warranties; and

 

  4.3.3 all covenants and other undertakings contained in or entered into
pursuant to this Agreement

 

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will remain in full force and effect and (except as otherwise expressly
provided) without limit in time.

Pending registration

 

4.4 The Seller declares that for so long as it remains the registered holder of
the Shares after Completion, the Seller will:

 

  4.4.1 hold those Shares and all dividends and other distributions in respect
of them, and all other rights arising out of or in connection with them, in
trust for the Purchaser; and

 

  4.4.2 at all times deal with and dispose of those Shares, and all such
dividends, distributions and rights attaching to them, as the Purchaser may
direct.

 

4.5 The Seller shall procure that for so long as AID Inc remains the registered
holder of the issued share capital of AIDL after completion, it shall procure
that AID Inc shall:

 

  4.5.1 hold those shares and all dividends and distributions in respect of
them, and all other rights arising out of them, in trust for the Companies; and

 

  4.5.2 at all times deal with and dispense of such shares as the Company may
direct.

 

  Company records etc.

 

4.6 During the six years following Completion, the Seller will or will procure
that the Retained Group will maintain in safekeeping and on request promptly
provide the Purchaser with all Retained Information reasonably requested by the
Purchaser. The Seller and the Purchaser undertake at all times to provide the
other promptly on request with all reasonable information known to the Seller or
the Purchaser (as the case may be) in relation to the Company if it is required
for the purposes of complying with Regulatory Requirements.

 

5. Transitional Services and Retention Bonus Payments

 

5.1 In accordance with the provisions of Schedule 11, the Seller agrees to
provide or procure the provision of each of the Transitional Services to the
Companies from the Completion Date until the relevant Service Termination Date.

 

5.2 The Seller shall provide or procure (but as regards persons outside the
Retained Group, only so far as it is able) the provision of the Transitional
Services using reasonable skill, diligence and care, to a standard equivalent to
the standard to which such services were supplied by the Retained Group to the
Companies in the six (6) month period immediately prior to the date of this
Agreement.

 

5.3 The Purchaser shall procure that the Purchaser and/or the relevant Company
shall provide such information, decisions and data as the Seller may reasonably
require for the purposes of the provision of the Transitional Services.

 

5.4 The Seller shall treat as confidential and shall procure that each member of
the Retained Group (and each of its employees) treats as confidential all
information obtained as a result of performing the Transitional Services and the
Seller hereby agrees that no member of the Retained Group (and any of its
employees) shall acquire any rights in respect of any Intellectual Property
generated during the hosting of the website as part of the Transitional
Services.

 

5.5 The Seller shall, in performing the Transitional Services, and the Company
shall, in receiving the Transitional Services, comply in all respects with
applicable data protection legislation.

 

5.6 The Seller shall not have any liability whether in contract or tort (save
for death or personal injury) for any act or omission in the provision of the
Transitional Services to the Purchaser

 

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and/or the relevant Company save to the extent that any loss or damage suffered
by the Purchaser is due to fraud, wilful misconduct or gross negligence by the
Seller or any member of the Retained Group.

 

5.7 Each Party shall allow the other Parties reasonable access on reasonable
prior notice to any relevant documentation and personnel to the extent
reasonably required for such Party to complete its financial year end process.

 

5.8 The Seller shall, five (5) Business Days before each Retention Bonus Payment
Date, pay to the Company or procure the payment to the Company of the relevant
amount of the Retention Bonuses to be paid on that date to each Selected
Employee who is an employee of the relevant Company on the Retention Bonus
Payment Date (and any employer’s class 1 national insurance contributions on
such amounts). At the request of the Seller the Purchaser will confirm which
Selected Employees are so employed on the date of the request.

 

5.9 Subject to receipt of payment under clause 5.8, the Purchaser shall procure
that the relevant Company shall:

 

  5.9.1 pay the amount of the Retention Bonus (as notified by the Seller) to
each relevant Selected Employee on the Retention Bonus Date (net of amounts
withheld in accordance with clause 5.9.2); and

 

  5.9.2 operate PAYE and account for any other Tax deductions (including any
employee’s national insurance contributions) and related employer’s Class 1
national insurance applicable to such Retention Bonuses to the relevant Taxation
Authority within the period required by law.

 

5.10 The Seller shall, five (5) Business Days before the Incentive Bonus Payment
Date, pay to the Purchaser or procure the payment to the Purchaser of the
relevant amount of the Incentive Bonuses to be paid on that date to each person
(other than Graham Payne) entitled to receive an Incentive Bonus (and any
employer’s class 1 national insurance contributions on such amounts).

 

5.11 Subject to receipt of payment under clause 5.10, the Purchaser shall
procure that the relevant Company shall:

 

  5.11.1 pay the amount of the Incentive Bonus (as notified by the Seller) to
each relevant recipient on the Retention Bonus Date (net of amounts withheld in
accordance with clause 5.11.2); and

 

  5.11.2 operate PAYE and account for any other Tax deductions (including any
employee’s national insurance contributions) and related employer’s Class 1
national insurance applicable to such Incentive Bonuses to the relevant Taxation
Authority within the period required by law.

 

6. Warranties and undertakings

 

6.1 The Seller warrants and undertakes to the Purchaser in the terms set out in
Schedule 6 (Warranties) in relation to each Company (and references in the
Warranties to “the Company” shall be construed as a separate reference to each
of the Companies). Each of the Warranties set out in the separate paragraphs of
Schedule 6 (Warranties) shall be separate and independent and (except as
expressly otherwise provided) shall not be limited by reference to any other
Warranty or by anything in this Agreement, the Disclosure Letter or the Tax
Deed.

Investigation by Purchaser

 

6.2 None of the Warranties shall be deemed in any way modified or discharged by
reason of any investigation or inquiry made or to be made by or on behalf of the
Purchaser. No information relating to the Companies that has not been Disclosed
but of which the Purchaser has

 

12

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knowledge (whether actual or constructive) shall prejudice any claim which the
Purchaser shall be entitled to bring or shall operate to reduce any amount
recoverable by the Purchaser under this Agreement.

Information supplied by the Company

 

6.3 The Seller undertakes to the Purchaser to waive any and all claims which the
Seller might otherwise have against the Companies or their respective officers,
employees, or consultants or any of them in respect of any information supplied
to the Seller by or on behalf of a Company in connection with the Warranties,
the Tax Deed and/or the information Disclosed.

Reliance

 

6.4 The Seller accepts that the Purchaser has entered into this Agreement upon
the basis of the Warranties being true and accurate.

Indemnities

 

6.5 The Seller hereby agrees to indemnify and hold the Purchaser harmless in
relation to any and all Losses and Expenses sustained, incurred, paid or
required to be paid by the Purchaser or any Company which arise out of, relate
to or result from:

 

  (a) the existence of any External Borrowings or Inter-Company Payables or
Company Expenses as at the Completion Date and not included within the Working
Capital Statement or the Completion Tax Statement; and/or

 

  (b) the exercise of the Employee Options, except where recovery has been made
from the relevant employee exercising an Employee Option or the relevant amount
was included within the Working Capital Statement or the Completion Tax
Statement; and/or

 

  (c) except to the extent that payment has been made pursuant to clause 5.8 or
5.10, any Incentive Bonuses and any liability under the Retention Bonus Letters;
and/or

 

  (d) any liability to Graham Payne in respect of any Incentive Bonus or under
the retention bonus letter between him, the Seller’s Guarantor and Muirhead
dated 11 July 2008 (as amended); and/or

 

  (e) the Esterline Reorganisation; and/or

 

  (f) (save for ordinary course costs and expenses associated with keeping a
company dormant) any liability of Norcroft to any other person; and/or

 

  (g) any liability of any of the Companies under Section 75 of the Pensions Act
1995 to any Pension Scheme as a result of or pursuant to the obligations under
the share sale agreement between Silvermines Engineering Technology Limited,
Silvermine Group pic, the Seller’s Guarantor and the Seller dated 23 September
1999; and/or

 

  (h) the provisions of Council Directives 77/187/EEC and 2001/23 EEC and any
other applicable provision of law affecting the transfer of employees as a
result of which transfer the Purchaser or any Company has or will have at
Completion a liability (whether actual, contingent or future) to provide an
early retirement benefit which is not an old-age, invalidity or survivor’s
benefit; and/or

 

13

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  (i) any liability of the Companies arising out of any claim against any
Company by either Liebherr – Aerospace Lindenberg GmbH or Bayern Chemie
Gesellschaft fuer flugchemische Antriebe GmbH in relation to the matters set out
in paragraph 5 of the Disclosure Letter against the Warranty in paragraph 12.1
of Schedule 6.

 

6.6 The Seller will indemnify and hold harmless the Purchaser and any person who
is connected or associated with the Purchaser (as those terms are defined in
sections 38 to 51 Pensions Act 2004) in full against any and all Losses and
Expenses sustained, incurred, paid or required to be paid by any such person
relating to the Seller’s Pension Scheme and/or any other occupational pension
scheme (as defined in section 1 Pension Schemes Act 1993) established or
operated by a Company and arising under or in respect of any contribution notice
or financial support direction made by the Pensions Regulator (under sections 38
to 51 Pensions Act 2004).

IT Assignment Documents

 

6.7 The Seller undertakes to pay any outstanding amounts due to procure the
relevant software assignment to AIDL pursuant to the IT Assignment Documents in
accordance with the terms of such documents.

 

7. Limitation of Seller’s liability

Limitations on liability

 

7.1 The Seller’s liability in respect of any claim shall be limited as provided
in Schedule 7 (Limitation of Seller’s liability) provided that such limitations
shall not apply in relation to the Warranties set out in paragraphs 1 (Power to
contract), 2.4 (Share capital of the Company) and 2.5 (Subsidiaries) of Part 1
of Schedule 6 (Warranties).

Exclusions from clause 7

 

7.2 Notwithstanding any other provision of this Agreement, the provisions of
this clause 7 and Schedule 7 (Limitation of Seller’s liability) shall not apply
to any claim made against the Seller in the case of any fraud, dishonesty,
wilful misstatement or wilful omission by or on behalf of the Seller.

 

8. Protection of goodwill and trade secrets

Covenants

 

8.1 As further consideration for the Purchaser agreeing to purchase the Shares
on the terms contained in this Agreement and with the intent of assuring to the
Purchaser the full benefit and value of the goodwill and connections of the
Companies and as a constituent part of the sale of the Shares, the Seller shall
not (and shall procure that none of the Affiliates of the Seller’s Guarantor
shall) directly or indirectly:

 

  8.1.1 until 3 years after Completion, carry on or be employed, engaged,
concerned, interested or in any way assist in the conduct of any business which
is or may in any way be in competition with all or any part of the Business
provided that nothing in this sub-clause 8.1.1 shall prevent the Seller or any
of the Affiliates of the Seller’s Guarantor from:

 

  (a) being engaged in any Permitted Business; or

 

  (b) holding for investment purposes only not more than three per cent of any
class of the issued share or loan capital of any company quoted on a recognised
investment exchange (as defined in the Financial Services and Markets Act 2000);

 

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  8.1.2 until 3 years after Completion:

 

  (a) canvass, solicit or approach or cause to be canvassed, solicited or
approached (in relation to a business which may in any way compete with all or
part of the Business, but excluding any Permitted Business) any Existing
Customer; or

 

  (b) compete against any Company in any open bid or tender process that any
such Company has identified as at the date of Completion and intends to
participate in, provided that Mason Electric may compete against AIDL in any
relevant open bids or tenders for or relating to:

 

  (i) Lockheed-Martin VH71; and/or

 

  (ii) Gulfstream 5-50 upgrade programme; or

 

  (c) compete against any Company for any other opportunity that (under the
principles currently operated by the Seller’s Group) would have been allocated
to that Company;

 

  8.1.3 until 3 years after Completion, offer employment to or offer to conclude
any contract of services with any employees holding executive or managerial
posts or any key technical or sales personnel of any Company or procure or
facilitate the making of such an offer by any person, firm or company or entice
or endeavour to entice any such employees of any Company to terminate their
employment with that Company Provided always that this sub-clause 8.1.3 shall
only apply in relation to persons who were so employed at Completion and who
were still so employed at the time of the relevant breach of this sub-clause
8.1.3;

 

  8.1.4 until 3 years after Completion, employ any employees holding executive
or managerial posts or any key technical or sales personnel of any Company or
procure or facilitate such employment by any person, firm or company at any time
within 6 months after termination of their employment with the Company Provided
always that this sub-clause 8.1.4 shall only apply in relation to persons who
were so employed at Completion;

 

  8.1.5 until 3 years after Completion, procure or permit directly or indirectly
Graham Payne to have any role in a Permitted Business or any Acquiror’s Business
either as an employee, consultant or a director;

 

  8.1.6 at any time after Completion use as a trade or business name or mark,
use as or include in a domain name for any web site, or carry on a business
under a title containing the words “Muirhead” or “Muirhead Avionics” or
“Muirhead Aerospace” or “Traxsys” or “Traxball” or any other word(s) colourably
resembling any such word; or

 

  8.1.7 at any time after Completion disclose to any person whatsoever or use in
connection with any business (whether or not a Permitted Business) or any
Acquiror’s Business (or otherwise use to the detriment of any Company) or
otherwise make use of, or through any failure to exercise all due care and
diligence cause any unauthorised disclosure or use of, any Commercial
Information which is confidential or in respect of which a Company is bound by
an obligation of confidence to a third party or which the Seller is prohibited
under clause 12 (Confidentiality; announcements) from disclosing without the
Purchaser’s consent,

in each case whether on the Seller’s or Affiliate’s own behalf or with or on
behalf of any person except in accordance with a prior waiver given by the
Purchaser (which in the case of clause 8.1.4, shall not be unreasonably
withheld).

 

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8.2 Each undertaking contained in sub-clause 8.1 shall be read and construed
independently of the other undertakings and as an entirely separate and
severable undertaking.

 

8.3 Except in relation to the restrictions contained in clauses 8.1.3, 8.1.4,
8.1.6 and 8.1.7 references in clause 8.1 to Affiliates of the Seller’s Guarantor
shall exclude any company which may acquire (including, for the avoidance of
doubt, by way of a merger) the Seller’s Guarantor, and any Affiliate of such
acquiror which is not (and since the date of this Agreement has never been) a
member of the group comprising the Seller’s Guarantor and its subsidiaries.

Severability of covenants

 

8.4 The undertakings in sub-clause 8.1 (Covenants) are considered by the Parties
to be reasonable in all the circumstances, but if any one or more should for any
reason be held to be invalid, but would have been held to be valid if part of
the wording were deleted, the undertakings shall apply with the minimum
modifications necessary to make them valid and effective.

Information in the public domain

 

8.5 The restriction contained in sub-clause 8.1.7 (Covenants) shall not extend
to any confidential or secret information that may come into the public domain
otherwise than through the default of the Seller or relevant Connected Persons.

 

9. Termination

Accrued liabilities

 

9.1 On termination, the rights and liabilities of the Parties that have accrued
beforehand shall subsist.

Surviving provisions

 

9.2 Except as otherwise expressly provided, this clause and the following
provisions of this Agreement shall survive termination, without limit of time:

 

  9.2.1 clause 1 (Definitions and interpretation);

 

  9.2.2 clause 6 (Warranties);

 

  9.2.3 clause 7 (Limitation on Seller’s liability);

 

  9.2.4 clauses 9 to 16 inclusive; and

 

  9.2.5 clauses 18 to 25 inclusive.

 

10. Third party rights

 

10.1 Nothing in this Agreement is intended to confer on any person any right to
enforce any term of this Agreement which that person would not have had but for
the Contracts (Rights of Third Parties) Act 1999 except:

 

  10.1.1 that the Companies’ officers, employees and consultants shall be
entitled with the Purchaser’s prior written consent to enforce sub-clause 6.3
(Information supplied by the Company); and

 

  10.1.2 that the Companies shall be entitled to enforce clause 5 (Transitional
Services);

 

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     and all other provisions of this Agreement necessary to give due effect to
such rights, but this Agreement may be amended or varied by the Parties in any
way, or terminated, in accordance with its terms without any such person’s
consent.

 

11. Further assurance

 

11.1 The Seller or the Purchaser shall, from time to time on being required to
do so by the other Party acting reasonably, promptly and at the cost and expense
of the other Party do or (so far as it is able) procure the doing of all such
acts and/or execute or procure the execution of all such reasonable documents in
a form satisfactory to the other Party as the other Party may reasonably
consider necessary to give full effect to this Agreement (or to such parts of it
as remain operative after termination).

 

12. Confidentiality; announcements

Prohibition on disclosure

 

12.1 Each of the Seller and the Seller’s Guarantor undertakes with the
Purchaser, and each of the Purchaser and the Purchaser’s Guarantor undertakes
with the Seller, to keep confidential (except as expressly provided in this
Agreement) at all times after the date of this Agreement, and not directly or
indirectly reveal, report, publish, disclose or transfer or use for its own or
any other purposes, any confidential information received or obtained as a
result of entering into or performing, or supplied by or on behalf of another
Party in the negotiations leading to, this Agreement and which relates to:

 

  12.1.1 the negotiations relating to this Agreement;

 

  12.1.2 the subject matter and/or provisions of this Agreement; or

 

  12.1.3 (in the Seller’s case) the Purchaser or the Purchaser’s Guarantor or
(in the Purchaser’s case) the Seller or the Seller’s Guarantor.

Permitted disclosures

 

12.2 The prohibition in sub-clause 12.1 (Prohibition on disclosure) does not
apply if:

 

  12.2.1 the information was in the public domain before it was furnished to the
relevant Party or, after it was furnished to that Party, entered the public
domain otherwise than as a result of (i) a breach by that Party of this clause
or (ii) a breach of a confidentiality obligation by the discloser, where the
breach was known to that Party;

 

  12.2.2 disclosure is necessary in order to comply with Regulatory Requirements
or to obtain tax or other clearances or consents from HM Revenue and Customs or
other relevant Taxation Authority;

 

  12.2.3 disclosure is made pursuant to an announcement permitted under
sub-clause 12.3; or

 

  12.2.4 disclosure is made to such of the Party’s officers, employees, agents,
consultants and professional advisers as are involved in the transactions
contemplated by this Agreement and is restricted to matters necessary for the
proper performance of their duties or services in relation to those transactions

provided that any such information disclosable pursuant to sub-clause 12.2.2
shall be disclosed only to the extent required by Regulatory Requirements and
(unless such consultation is prohibited by Regulatory Requirements) only after
consultation with the Purchaser or the Seller (as the case may be).

 

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Announcements

 

12.3 Except as set out in clause 12.4, no Party shall make any formal press
release or other public announcement in connection with any of the transactions
contemplated by this Agreement unless consent has been received from the other
Parties (such consent not to be unreasonably withheld, delayed or conditioned).

 

12.4 Any Party shall be entitled to make any announcement required by any
applicable Regulatory Requirements (provided that, unless such consultation is
prohibited by Regulatory Requirements, it is made only after consultation with
the other Parties (as the case may be)).

 

13. Assignment

Assignment by Purchaser

 

13.1 Subject to clause 13.2, the Purchaser is permitted to assign the benefit
of, and any of its rights under, this Agreement (including under the Warranties
provided that no assignee shall be entitled to greater damages or other
compensation than that to which the Purchaser would have been entitled had it
not assigned the benefit of the Warranty) together with any cause of action
arising in connection with any of them to its successor in title or, to any of
its Affiliates.

 

13.2 If any assignee under clause 13.1 ceases to be an Affiliate of the
Purchaser then the Purchaser shall procure that it assigns all of its rights as
assignee either to the Purchaser or to an Affiliate of the Purchaser and pending
such assignment the assignee may not exercise any of its rights as assignee.

No assignment by Seller

 

13.3 The Seller may not:

 

  13.3.1 assign, transfer, charge or deal in any way with the benefit of, or any
of its rights under or interest in, this Agreement; or

 

  13.3.2 sub-contract any or all of its obligations under this Agreement

or do any such thing in relation to any document or arrangement expressed to be
supplemental to this Agreement, or which this Agreement expressly preserves or
requires to be executed, except in accordance with a prior written waiver given
by the Purchaser.

Successors in title

 

13.4 This Agreement shall be binding upon and operate for the benefit of the
personal representatives and permitted assigns and successors in title of each
of the Parties and references to the Parties shall be construed accordingly.

 

14. Waiver; variation; invalidity

No waiver by omission, delay or partial exercise

 

14.1 No right, power or remedy provided by law or under this Agreement shall be
waived, impaired or precluded by any delay or omission to exercise it, by any
single or partial exercise of it on an earlier occasion, or by any delay or
omission to exercise, or single or partial exercise of, any other such right,
power or remedy.

Specific waivers to be in writing

 

14.2 Any waiver of any right, power or remedy under this Agreement must be in
writing and may be given subject to any conditions thought fit by the grantor.
No waiver will take effect if the

 

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person seeking the waiver has failed to disclose to the grantor every material
fact or circumstance which (so far as the person seeking the waiver is aware)
has a bearing on its subject matter. Unless otherwise expressly stated, any
waiver shall be effective only in the instance and only for the purpose for
which it is given.

Variations to be in writing

 

14.3 No variation to this Agreement shall be of any effect unless it is agreed
in writing and signed by or on behalf of each Party.

Invalidity

 

14.4 Each of the provisions of this Agreement is severable. If any such
provision is or becomes illegal, invalid or unenforceable in any respect under
the law of any jurisdiction that shall not affect or impair the legality,
validity or enforceability in that jurisdiction of the other provisions of this
Agreement, or of that or any other provision of this Agreement in any other
jurisdiction.

 

15. Costs and expenses

Payment of costs

 

15.1 Except as otherwise stated in this Agreement, each Party shall bear its own
costs and expenses in relation to the negotiation, preparation, execution and
carrying into effect of this Agreement and all other agreements forming part of
the transactions contemplated by this Agreement

Claims by directors etc

 

15.2 The Seller covenants to pay the Purchaser on demand an amount equal to all
Losses and Expenses that the Companies may suffer or incur as a result of any
and all claims that may be made against it by directors that are also officers
of the Seller’s Guarantor by reason of their resignation and/or termination of
their employment in accordance with Schedule 5 (Completion Obligations).

Unauthorised or invalid documents

 

15.3 The Purchaser shall indemnify and hold the Seller harmless, and the Seller
shall indemnify and hold the Purchaser harmless, against any Losses and Expenses
the Party indemnified may suffer or incur as a result of any document delivered
to it pursuant to clause 4.2 (Completion) being unauthorised, invalid or for any
other reason ineffective for its purpose.

 

16. Payments

No deduction etc

 

16.1 Except as otherwise expressly provided in this Agreement, all payments to
be made under this Agreement shall be made in full without any set off or
counterclaim and free from any deduction or withholding except as may be
required by law (in which event such deduction or withholding shall not exceed
the minimum amount required by law and the payer will pay to the payee whatever
additional amount is required for the net amount received to equal what would
have been received if no such deduction or withholding had been required). Any
amount payable in relation to any Warranty shall be increased to the extent
necessary to ensure that the net amount received by the Purchaser shall after
Taxation be equal to that which it would have received had the payment not been
subject to Taxation, save to the extent that Taxation has already been taken
into account in calculating the quantum of the amount payable in relation to the
Warranty.

 

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Payments to Seller’s Solicitors

 

16.2 Where this Agreement provides for any payment to be made to the Seller’s
Solicitors (whether or not the manner of payment is specified) in each case the
Seller irrevocably authorises and instructs the Purchaser to make that payment
to the Seller’s Solicitors, whose receipt shall be an effective discharge of the
Purchaser’s obligation to pay the amount concerned. The Purchaser shall not be
concerned to see to the application or be answerable for the loss or
misapplication of any such amount.

Interest on late payment

 

16.3 If a Party fails to pay any sum payable by it under this Agreement on the
due date for payment, it shall pay interest on such sum for the period from and
including the due date up to the date of actual payment (after as well as before
judgment) at the rate which is the aggregate of 2% per annum and the base rate
from time to time of Barclays Bank pic. The interest will accrue from day to day
on the basis of the actual number of days elapsed and a 365-day year and shall
be payable on demand and compounded monthly in arrears.

 

17. Guarantee

 

17.1 The Purchaser shall use reasonable endeavours to procure that as soon as
practicable following Completion the Seller’s Guarantor is released from the
guarantee given by it in the licence to assign dated 15 November 2002 between
(1) Burry and Knight Limited (2) Devlin Electronics Limited, (3) AIDL and
(4) the Seller’s Guarantor relating to the property at Castleman Crossing
Centre, Ringwood, Hampshire and pending such release will indemnify the Seller’s
Guarantor against any Losses and Expenses arising under such guarantee.

 

18. Entire agreement

This Agreement

 

18.1 In this clause, references to this Agreement include all other written
agreements and arrangements between the Parties, and all other instruments,
which are expressed to be supplemental to this Agreement or which this Agreement
expressly preserves or requires to be executed.

Entire agreement

 

18.2 The Transaction Documents constitute the whole and only agreement and
understanding between the Parties in relation to its subject matter. Subject to
sub-clause 18.6 (Fraud), all previous drafts, agreements, understandings,
undertakings, representations, warranties, promises and arrangements of any
nature whatsoever between the Parties with any bearing on the subject matter of
any Transaction Documents are superseded and extinguished to the extent that
they have such a bearing, except insofar as any such thing is in terms repeated
or otherwise reflected in any Transaction Documents.

 

18.3 The parties have not entered into any Transaction Document in reliance upon
any representation, warranty or promise and no such representation, warranty or
promise or any other term is to be implied in them whether by virtue of any
usage or course of dealing or otherwise except as expressly set out in them.

 

18.4 If a party has given any representation, warranty or promise, then except
to the extent that it has been set out in a Transaction Document, the party to
whom it was given waives any rights or remedies it may have in respect of it.

 

20

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Other remedies

 

18.5 The rights, powers and remedies provided in this Agreement are independent
and cumulative and do not exclude any rights, powers or remedies (express or
implied) which are available as a matter of common law, statute, custom or
otherwise.

Fraud

 

18.6 Nothing in this Agreement shall be read or construed as excluding any
liability or remedy in respect of fraud or fraudulent misrepresentation or
concealment or any resulting right to rescind the Agreement or the Tax Deed.

 

19. Counterparts

 

19.1 This Agreement may be executed in any number of counterparts and by the
Parties on different counterparts. Each counterpart shall constitute an original
of this Agreement but all the counterparts shall together constitute one and the
same Agreement.

 

20. Time of the essence

 

20.1 Time shall be of the essence of this Agreement as regards any time, date or
period mentioned in it. If any such time, date or period (or variation of any of
them) is varied, such varied time, date or period shall be of the essence.

 

21. Notices

Form of notices

 

21.1 Any communication to be given in connection with the matters contemplated
by this Agreement shall except where expressly provided otherwise be in writing
and shall either be delivered by hand or sent by first class pre-paid post or
facsimile transmission. Delivery by courier shall be regarded as delivery by
hand.

Address and facsimile

 

21.2 Such communication shall be sent to the address of the relevant Party
referred to in this Agreement or the facsimile number set out below or to such
other address or facsimile number as may previously have been communicated to
the sending Party in accordance with this clause. Each communication shall be
marked for the attention of the relevant person.

Seller or the Seller’s Guarantor - facsimile number + 1 425 453 2916. For the
attention of the VP Strategy & Technology

Purchaser- facsimile number 01243 861717. For the attention of Allan Imrie.

Purchaser’s Guarantor - facsimile number: +1610 725 8485. For the attention of
Robert Feit/Patrick Farris.

 

21.3 In respect of any notice to be served on:

 

  21.3.1 the Seller or the Seller’s Guarantor, a copy shall be sent or delivered
to the Seller’s Solicitors and marked for the attention of David Kent and Mark
Barron;

 

  21.3.2 the Seller, a copy shall be sent or delivered to the Seller’s
Guarantor;

 

  21.3.3 the Purchaser, a copy shall be sent or delivered to the Purchaser’s
Guarantor; and

 

21

--------------------------------------------------------------------------------

  21.3.4 the Purchaser or the Purchaser’s Guarantor, a copy shall be sent or
delivered to the Purchaser’s Solicitors and marked for the attention of Barney
Hearnden and Danielle Heath.

Deemed time of service

 

21.4 A communication shall be deemed to have been served:

 

  21.4.1 if delivered by hand at the address referred to in sub-clause 21.2
(Address and facsimile) at the time of delivery;

 

  21.4.2 if sent by first class pre-paid post to the address referred to in that
sub-clause, at the expiration of two clear days after the time of posting; and

 

  21.4.3 if sent by facsimile to the number referred to in that sub-clause, at
the time of completion of transmission by the sender.

If a communication would otherwise be deemed to have been delivered outside
normal business hours (being 9:30 a.m. to 5:30 p.m. on a Business Day) in the
time zone of the territory of the recipient under the preceding provisions of
this clause, it shall be deemed to have been delivered at the next opening of
such normal business hours in the territory of the recipient.

Proof of service

 

21.5 In proving service of the communication, it shall be sufficient to show
that delivery by hand was made or that the envelope containing the communication
was properly addressed and posted as a first class pre-paid letter or that the
facsimile was despatched and a confirmatory transmission report received.

Change of details

 

21.6 A Party may notify the other of a change to its name, relevant person,
address or facsimile number for the purposes of sub-clause 21.2 (Address and
facsimile) provided that such notification shall only be effective on:

 

  21.6.1 the date specified in the notification as the date on which the change
is to take place; or

 

  21.6.2 if no date is specified or the date specified is less than five clear
Business Days after the date on which notice is deemed to have been served, the
date falling five clear Business Days after notice of any such change is deemed
to have been given.

Non-applicability to Proceedings

 

21.7 For the avoidance of doubt, the Parties agree that the provisions of this
clause shall not apply in relation to the service of any claim form, application
notice, order, judgment or other document relating to or in connection with any
Proceedings.

 

22. Governing law and jurisdiction

English law

 

22.1 This Agreement shall be governed by and construed in accordance with
English law.

 

22

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Courts of England and Wales

 

22.2 The Parties irrevocably agree that the courts of England and Wales shall
have exclusive jurisdiction to hear and determine or otherwise settle all and
any disputes which may arise out of or in connection with this Agreement.

 

23. Seller’s Guarantee

 

23.1 The Seller’s Guarantor hereby unconditionally and irrevocably guarantees to
the Purchaser the full, due and punctual performance and observation by the
Seller of all the obligations of the Seller under the terms of this Agreement
(the “Seller Obligations”). In the event of any failure by the Seller to perform
or observe such Seller Obligations, the Seller’s Guarantor shall be liable for
the Seller Obligations arising hereunder as if it were a primary obligor.

 

23.2 The obligations of the Seller’s Guarantor under this clause 23:

 

  23.2.1 shall be continuing obligations in respect of all Seller Obligations
which have not been previously discharged by the Seller or the Seller’s
Guarantor and shall not be satisfied, discharged or affected by any change in
the constitution or control of, or the insolvency of, or any liquidation,
winding up or analogous proceedings relating to the Seller;

 

  23.2.2 shall be discharged on an ongoing basis by the due performance by the
Seller or the Seller’s Guarantor of the relevant Seller Obligations, but
otherwise shall not be discharged, prejudiced, lessened, affected or impaired by
any act, omission or circumstance whatsoever which but for this provision might
operate to release or exonerate the Seller from all or any part of such
obligations or in any way discharge, prejudice, lessen, affect or impair the
same; and

 

  23.2.3 shall not be released or diminished by any forbearance, neglect or
delay in seeking performance hereby imposed or any granting of time for such
performance or, except in respect of the variation of the Seller Obligation or
this clause 23 in accordance with this Agreement, any variation of this
Agreement.

 

23.3 The Seller’s Guarantor waives any right it may have to require the
Purchaser first to proceed against or claim payment from the Seller before
claiming under this clause 23.

 

23.4 As a separate and independent stipulation, the Seller’s Guarantor agrees
that any Seller Obligations expressed to be given by the Seller which may not be
enforceable against or recoverable from the Seller by reason of any disability
or incapacity on or on behalf of the Seller shall nevertheless be enforceable
against the Seller’s Guarantor as though the same had been incurred by the
Seller’s Guarantor and the Seller’s Guarantor was the sole and principal obligor
in respect thereof and/or shall be performed or paid by the Seller’s Guarantor
after receiving written notice on or after the time at which such obligation
arises.

 

24. Purchaser’s Guarantee

 

24.1 The Purchaser’s Guarantor hereby unconditionally and irrevocably guarantees
to the Seller the full, due and punctual performance and observation by the
Purchaser of all the obligations of the Purchaser under the terms of this
Agreement (the “Purchaser Obligations”). In the event of any failure by the
Purchaser to perform or observe such Purchaser Obligations, the Purchaser’s
Guarantor shall be liable for the Purchaser Obligations arising hereunder as if
it were a primary obligor.

 

24.2 The obligations of the Purchaser’s Guarantor under this clause 24:

 

  24.2.1 shall be continuing obligations in respect of all Purchaser Obligations
which have not been previously discharged by the Purchaser or the Purchaser’s
Guarantor and shall

 

23

--------------------------------------------------------------------------------

not be satisfied, discharged or affected by any change in the constitution or
control of, or the insolvency of, or any liquidation, winding up or analogous
proceedings relating to the Purchaser;

 

  24.2.2 shall be discharged on an ongoing basis by the due performance by the
Purchaser or the Purchaser’s Guarantor of the relevant Purchaser Obligations,
but otherwise shall not be discharged, prejudiced, lessened, affected or
impaired by any act, omission or circumstance whatsoever which but for this
provision might operate to release or exonerate the Purchaser from all or any
part of such obligations or in any way discharge, prejudice, lessen, affect or
impair the same; and

 

  24.2.3 shall not be released or diminished by any forbearance, neglect or
delay in seeking performance hereby imposed or any granting of time for such
performance or, except in respect of the variation of the relevant Purchaser
Obligation or this clause 24 in accordance with this Agreement, any variation of
this Agreement.

 

24.3 the Purchaser’s Guarantor waives any right it may have to require the
Seller first to proceed against or claim payment from the Purchaser before
claiming under this clause 24.

 

24.4 As a separate and independent stipulation, the Purchaser’s Guarantor agrees
that any Purchaser Obligations expressed to be given by the Purchaser which may
not be enforceable against or recoverable from the Purchaser by reason of any
disability or incapacity on or on behalf of the Purchaser shall nevertheless be
enforceable against the Purchaser’s Guarantor as though the same had been
incurred by the Purchaser’s Guarantor and the Purchaser’s Guarantor was the sole
and principal obligor in respect thereof and/or shall be performed or paid by
the Purchaser’s Guarantor after receiving written notice on or after the time at
which such obligation arises.

 

25. Agent for Service

 

25.1 The Purchaser’s Guarantor irrevocably appoints Blake Lapthorn Tarlo Lyons:
attention Jenny Hayward and Hilary Keeping, Harbour Court, Compass Road, North
Harlow, Portsmouth, PO6 4ST to be its agent for the receipt of service of
process in England. It agrees that any documentation may be effectively served
on it in connection with any Proceedings in England and Wales by service on its
agent.

 

25.2 The Seller’s Guarantor irrevocably appoints Taylor Wessing LLP, of
Carmelite, 50 Victoria Embankment, Blackfriars, London EC4Y ODX (attention: John
Robinson) to be its agent for the receipt of service of process in England. It
agrees that any documentation may be effectively served on it in connection with
any Proceedings in England and Wales by service on its agent.

 

25.3 If any agent referred to in clauses 25.1 and 25.2 (or any replacement agent
appointed pursuant to this clause) at any time ceases for any reason (including
its dissolution) to act as the Purchaser’s Guarantor’s agent for service or the
Seller’s Guarantor’s agent for service as appropriate, the Purchaser’s Guarantor
or the Seller’s Guarantor (as the case may be) shall promptly and irrevocably
appoint another person with an address for service in England and Wales to be
that parties agent for service on the terms of this clause and promptly notify
the other party of the replacement’s name and address. Failing such appointment
and notification, the Seller’s Guarantor or the Purchaser’s Guarantor (as the
case may be) shall be entitled by notice to the other party to appoint such a
replacement (including itself) on the replacement’s standard or usual terms (if
any) for such appointments to act on the Purchaser’s Guarantor or the Seller’s
Guarantor’s behalf (as the case may be) in accordance with this clause. By way
of security, the Purchaser’s Guarantor and the Seller’s Guarantor irrevocably
appoints the other party as its attorney to effect any such appointment.

 

25.4 A copy of any document served on an agent pursuant to this clause shall be
sent by post to the relevant in accordance with clause 21 (Notices), but no
failure or delay in so doing shall prejudice the effectiveness of service of the
documentation.

 

24

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AS WITNESS the hands of the Parties or their duly authorised representatives on
the date first appearing at the head of this Agreement.

 

25

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Schedule 1

The Companies

Part 1

 

Name:

   Muirhead Aerospace Limited

Number:

   560015

Date of incorporation:

   13 January 1956

Registered office:

   Mitre House, 160 Aldersgate Street, London EC1A 4DD

Share capital:

  

- authorised:

   10,000,000 ordinary shares of £1.00 each

- issued:

   5,510,101 ordinary shares of £1.00 each

Shareholder:

  

- name:

   Esterline Technologies Limited

- Shares held:

   5,510,101 ordinary shares of £1.00 each

Directors:

   Robert William Cremin    Robert David George    Larry Albert Kring    Richard
Bradley Lawrence    Graham Payne    Pradeep Kumar Sharma    Stephen Keith Wells

Secretary:

   Mitre Secretaries Limited

Auditors:

   Ernst & Young

Charges:

   None

Subsidiaries:

   Advanced Input Devices (UK) Limited (subject to registration of transfer of
legal title following stamping)    Norcroft Dynamics Limited (subject to
registration of transfer of legal title following stamping)

 

26

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Part 2

 

Name:

   Advanced Input Devices (UK) Limited

Number:

   4436258

Date of incorporation:

   13 May 2002

Registered office:

   Mitre House, 160 Aldersgate Street, London EC1A 4DD

Share capital:

  

- authorised:

   10,000 ordinary shares of £0.01 each

- issued:

   101 ordinary shares of £0.01 each

Shareholder:

  

- name:

   Advanced Input Devices, Inc.

- Shares held:

   101 ordinary shares of £0.01 each

Directors:

   Robert William Cremin    Robert David George    Richard Bradley Lawrence   
Graham Payne    Pradeep Kumar Sharma

Secretary:

   Mitre Secretaries Limited

Auditors:

   Ernst & Young

Charges:

   One charge outstanding: Rent Deposit Deed dated 15 November 2002 in favour of
Burry and Knight Limited. Amount secured: £58,700 plus VAT.

Subsidiaries:

   None

 

27

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Part 3

 

Name:

   Norcroft Dynamics Limited

Number:

   01412224

Date of incorporation:

   29 January 1979

Registered office:

   Mitre House, 160 Aldersgate Street, London EC1A 4DD

Share capital:

  

- authorised:

   106,200 ordinary shares of £0.20 each

- issued:

   106,200 ordinary shares of £0.20 each

Shareholder:

  

- name:

   Esterline Technologies Limited

- Shares held:

   106,200 ordinary shares of £0.20 each

Directors:

   Robert William Cremin    Robert David George    Larry Albert Kring

Secretary:

   Mitre Secretaries Limited

Auditors:

   Ernst & Young

Charges:

   None

Subsidiaries:

   None

 

28

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Part 4

LOGO [g20025g25j38.jpg]

 

29

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Schedule 2

Properties

Part 1

Properties

 

(1)    (2)    (3)    (4)    (5) Description of Property   

Tenure and rent payable (if

leasehold)

   Registered or unregistered    Title number and grade of title (if registered)
   Existing Use Unit 4 Oakfield Road, Penge    Leasehold    Registered   

SGL693858

Title absolute

   Manufacturing/ repair facilities and offices Mallory House, Southall Lane,
Heston    Leasehold    Registered    N/a    Lightweight assembly of avionics
equipment 5 East Portway Industrial Estate, Andover    Leasehold    Registered
  

HP580162,

Title absolute

   Manufacturing and offices Plot l, Castleman Crossway Centre, Ringwood   
Leasehold    Unregistered    N/a    Factory and office premises

Part 2

Leases

 

(1)    (2)    (3)    (4)    (5) Property    Date    Term    Parties    Current
yearly rent Unit 4 Oakfield Road, Penge in the London Borough of Bromley    30
August 2006   

10 years from

1 December 2007

  

Industrial Property Investment Fund

(1)

Muirhead Aerospace Limited

(2)

   £351,000 Mallory House, Navigator Park, Southall Lane, Heston, Middlesex   
12 September 2003   

10 years from

12 September 2003

  

Harlequin Centre (Heston) (No. 1)

Limited and

Harlequin Centre

(Heston) (No. 2)

Limited (1) and

Muirhead

Aerospace Limited

(2)

  

£130,000

(+£3, 000 pa as contribution to landlord’s works)

 

30

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(1)

   (2)    (3)    (4)    (5) Property    Date    Term    Parties    Current
yearly rent 5 East Portway Industrial Estate, Andover    29 November 1976    99
years (commenced on 10 April 1973)    The District Council of Test Valley (1)
and The Croydex Company Limited (2)    £22,570 Plot 1 Castleman Crossing Centre,
Ringwood, Hampshire    4 December 2000    20 years (commenced on 4 December
2000)    Burry and Knight Limited (1) Devlin Electronics Limited (2) Spirent plc
(3)    £72,500

Part 3

Letting Documents

 

(1)

   (2)    (3)    (4)    (5) Property    Date    Term    Parties    Current
yearly rent Electricity Substation, 5 East Portway Industrial Estate, Andover   
23 February 1994   

21 years from

10 October 1994

   The Croydex Company Limited (1) Southern Electric Plc (2)    £1

 

31

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Schedule 3

Intellectual Property

Part 1

Registered IP (excluding Licences In)

List of Granted Patents

 

Patent number   Description

US 6,717,086

  Switch with adjustable bias means    

GB2367947

  A switch    

US 7,133,033

  Actuator for a switch    

GB2341439

  Control Device    

US 6,740,863

  Joystick    

GB2383410

  Joystick    

GB2412715

  Improvements relating to pointing devices    

GB2413620

  Improvements relating to pointing devices    

US6949904

  Power-actuated seat    

 

32

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List of Patent Applications

 

Patent application number

   Description    File Date    Publish Date

0421372.4

   Signal conditioning circuit    24th September 2004    29th March 2006

11/233919

   Signal conditioning circuit    29th October 2005     

11/097544

   Pointing Devices    1st April 2005     

List of Registered Trade Marks

 

Mark

   Country    Status    Class No    App Date    Reg No    Reg Date

TRAXSYS

   Community Trademark    Registered    9, 38, 42    31 October 2003    3501483
   20 April 2005

TRAXSYS

   United States    Registered    9    12 June 2003    2,925,937      8 February
2005

TRAXSYS

   United States    Registered      9    14 July 2003    2,979,017    26 July
2005

TRAXBALL

   Community Trademark      Registered    9    25 February 2005    4310124    4
April 2006

TRAXBALL

   United States    Registered    9    22 September 2004      3083760    18
April 2006

MUIRHEAD

   Community Trademark    Registered    7, 9, 35, 37, 40, 42      30 October
2003    3482734    4 March 2005

MUIRHEAD

VATRIC

   United Kingdom    Registered    7    3 August 1993    1543670    1 September
1995

MUIRHEAD

VATRIC

   United Kingdom    Registered    9    21 January 1992    1488530    10
December 1993

 

33

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Part 2

Material unregistered IP (excluding Licences In)

Copyright in design drawings and specifications created by the Company in
respect of products sold or to be sold to its customers.

Know-how relating to the design, engineering and manufacturing processes
relating to products sold by the Company to its customers.

Part 3

Licences In - registered

 

    Licensor   Licensee   Priority Date   Subject note

1

  Sensopad Technologies Ltd   AID (UK) Ltd trading as Traxis   30 Oct 2001  
PCT/GB0201204
Field Position Sensor
(ret. Only PAD1)

2

  Sensopad Technologies Ltd   AID (UK) Ltd trading as Traxis   5 Feb 2002  
PCT/GB2003/000495
Ball Tracking Device

Notes:

 

1. Family of Patents owned by Sensopad and used by Traxsys

 

  —  

Priority date was 30 October 2001

 

  —  

PCT application number is GB02/01204 PCT publication number is WO03/038379

 

  —  

Granted as EP1442273 (Europe), in DE, FR, IT, ES, NL, SE & GB2374424, also
granted as US7208945, prosecution ongoing in China, Korea, Norway, Australia,
Japan

 

2. Family of Patent Applications: “Ball tracking device”

 

  —  

Priority date was 5 February 2002

 

  —  

PCT application number is GB03/000495 PCT publication number is WO03/067181

 

  —  

Not yet granted, prosecution ongoing in EP, US, Japan & China

Sensopad Technologies Limited has since changed its name to TT Electronics
Limited.

 

34

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Part 4

Licences In - material unregistered

Implied licences from some customers of the Business to use specifications and
design drawings provided by customers to design and manufacture parts for such
customers

Know-how relating to the Sensopad patents set out in Part 3 above.

 

35

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Schedule 4

Information Technology

Part 1

IT Systems

 

(1)

   (2)

AS/400

   Muirhead Motion & Avionics

File & Print Server

   Muirhead Motion & Avionics

Exchange Server

   Muirhead Motion & Avionics

PDM Server

   Muirhead Motion

Domain Controller

   Muirhead Motion & Avionics

SQL Server

   Muirhead Motion & Avionics

NAS Box

   Muirhead Motion & Avionics

Antivirus Server

   Muirhead Motion & Avionics

DCS Server

   Muirhead Motion

Terminal Services Server

   Muirhead Motion & Avionics

Websense Server

   Muirhead Motion & Avionics

PDM Server

   Traxsys Site

Domain Controller

   Traxsys Site

Sytline Server

   Traxsys Site

File & Print Server

   Traxsys Site

Exchange Server

   Traxsys Site

Samsung Telephone system

   Muirhead Motion & Avionics

Eserver 15

   Muirhead Motion & Avionics

 

Product

  Total Licences     Total Installs

Office 97

  247   244

Office Pro 2000

   

Office Pro XP

   

Office Pro 2003

   

Office Pro Plus 2007

   

Project 2000

  62   36

Project Standard 2002

   

Project Pro 2003

   

Project Standard 2003

   

Project Standard 2007

   

Visio Standard 2002

  47   41

Visio Standard 2002

   

Visio Pro 2003

   

Visio Standard 2007

   

LS/400 main production system –

Avionics

       

LS/400 main production system –

Aerospace

       

Sophos antivirus software

  300   300

Websense

       

Virtual Office

  11   11

Linpics system

       

Q-pulse

       

Minitab

  5   5

Sonicwall

       

Sonicwall GAV & IPS

       

Time and Attendance

       

 

36

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Product

  Total Licences   Total Installs

Gumbo Spoolmail and

SpoolAMatic

       

Payroll HRWorks

       

Permissions Analyser

       

Mail Disclaimer Maintenance

       

Mathcad

  5   5

Opera 2d

  3   3

MotorCad

  4   4

Schaffner EPS 9980 emission

software

       

Ultiboard/Multism software

       

PDM

       

Design Space (annual renewal

required)

       

Part 2

Domain names

 

MUIRHEADAEROSPACE.COM

MUIRHEADAVIONICS.COM

TRAXSYS.COM

TRAXSYS.EU

TRAXSYS.CO.UK

TRAXSYS.ORG

TRAXSYS.ORG.UK

Part 3

IT Contracts

Disaster recovery contract with NDR

Maintenance agreement in respect of Samsung Telephone system with Progressive
Communications (supplier)

Line rental for phone and other telecommunications and related support -
Spitfire

Maintenance agreement in respect of Avaya telephone equipment with Comec

Maintenance agreement in respect of the Penge telephone system with Cenreal

 

AS400 software support

  Supplier      

LS/400 main production system - Avionics

  Friedman

LS/400 main production system - Aerospace

  Friedman      

Network support

   

Penge

   

Sophos antivirus software

  Foursys Ltd

Websense

  Foursys Ltd

Virtual Office

  Virtuall Software

Linpics system

  Forward Microsystems

Q-pulse

  Gael Quality Software

 

37

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AS400 software support

  Supplier

Minitab

  Minitab

Sonicwall

  Lan2Lan

Sonicwall

  ISIPITT

Time and Attendance

  Kronos

Gumbo Spoolmail and SpoolAMatic

  Friedman Corporation

Payroll HRWorks

  Wealden

Permissions Analyser

  Share-IT

Mail Disclaimer Maintenance

         

Andover

   

Mathcad

software assurance

  PTC

Opera 2d

  Vector Fields

MotorCad

  Motor Design Ltd

Schaffner EPS 9980 emission software

  Schaffner

Ultiboard/Multism software

  National Instruments

PDM

  NTCADCAM

Design Space

  IDAC/ANSYS

Lan 2 Lan

         

IBM

         

Eserver i5

  IBM

 

38

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Schedule 5

Completion Obligations

 

1. Seller’s Completion obligations

The Seller will be obliged to deliver to the Purchaser (or otherwise make
available to the satisfaction of the Purchaser):

 

  (a) a copy of the minutes of a meeting of the directors of the Seller
authorising the execution by the Seller of this Agreement and the Tax Deed;

 

  (b) transfers of the Shares duly executed by the Seller in favour of the
Purchaser or its nominee(s) together with the relevant share certificates (or,
in lieu of share certificates, indemnities in a form satisfactory to the
Purchaser);

 

  (c) the IT Assignment Documents duly executed by the parties thereto;

 

  (d) agreed form claims or elections under paragraph 66 of Schedule 29 FA 2002
or Section 179A TCGA (as appropriate) to give effect to clause 14 (Joint
elections) of the Tax Deed;

 

  (e) the statutory registers and minute books (properly written up to the time
immediately prior to Completion), the common seal (if any), the certificate of
incorporation and (if applicable) any certificate of incorporation on change of
name of each Company;

 

  (f) the Tax Deed duly executed as a deed by the Seller;

 

  (g) the Traxsys Supply Agreement duly signed by AIDL and AID Inc;

 

  (h) the Deeds of Assignment executed as deeds by the parties thereto;

 

  (i) the Payne Compromise Agreement duly executed by Graham Payne and Muirhead;

 

  (j) the Releases duly executed by Wachovia Bank and the relevant Company;

 

  (k) certificates from each of the banks at which either Company maintains an
account of the amount standing to the credit or debit of all such accounts as at
the close of business on the last Business Day before the Completion meeting;

 

  (1) at its registered office all material records, correspondence, documents,
files, memoranda and other papers belonging to each Company but not kept at any
of the Properties, and shall procure that any other person controlled by the
Seller shall do the same without delay;

 

  (m) the written resignations in the agreed form of all the directors and the
secretary of each Company from their respective offices, such resignations to
take effect from Completion;

 

  (n) irrevocable powers of attorney in the agreed form executed by the Seller
in favour of the Purchaser or its nominee(s) to enable the beneficiary (pending
registration of the transfers of the Shares) to exercise all voting and other
rights attaching to the Shares and to appoint proxies for this purpose; and

 

  (o) a written shareholder resolution to change the name of AIDL to Traxsys
Input Products Limited in agreed form;

and to cause a board meeting of each Company to be held at which:

 

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  (a) the transfers of the Shares will be approved for registration (subject to
their being duly stamped, which shall be at the cost of the Purchaser);

 

  (b) all resignations provided for above will be tendered and accepted so as to
take effect at the close of the meeting;

 

  (c) all persons nominated by the Purchaser (in the case of directors, subject
to any maximum number imposed by the relevant articles of association) will be
appointed additional directors and appointed secretary;

 

  (d) all existing instructions and authorities to bankers will be revoked and
will be replaced with alternative instructions, mandates and authorities in such
form as the Purchaser may require;

 

  (e) the registered office will be changed to P. O. Box 36, 2 New Star Road,
Leicester, LE4 9JQ;

 

  (f) the accounting reference date will be changed to 31 December; and

 

  (g) such other business as the Purchaser may reasonably require will be
conducted.

 

2. Purchaser’s Completion obligations

The Purchaser’s obligations (which are subject to the Seller complying with its
obligations under paragraph 1) are to:

 

  (a) pay to the Seller’s Solicitors by electronic transfer an amount comprising
the Provisional Consideration; and

 

  (b) deliver to the Seller:

 

  (i) a counterpart Tax Deed duly executed by the Purchaser; and

 

  (ii) a copy of the minutes of a meeting of the directors of the Purchaser
authorising the execution by the Purchaser of this Agreement and the Tax Deed
(such copy minutes being in each case certified as correct by the secretary of
the Purchaser).

 

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Schedule 6

Warranties

Part 1

General warranties

 

1. Power to contract

The Seller has full power to enter into and perform this Agreement and the Tax
Deed, each of which constitutes (or will when executed constitute) binding
obligations on the Seller in accordance with their respective terms.

 

2. The Company

Memorandum and articles of association

 

2.1 The copy of the memorandum and articles of association of the Company which
has been Disclosed is true and complete in all respects and has embodied in it
or annexed to it a copy of every such resolution and agreement as is referred to
in section 29(1)(b) Companies Act 2006. The Company has at all times since
carried on its business and affairs in all respects in accordance with its
memorandum and articles of association and all such resolutions and agreements.

Statutory books

 

2.2 The statutory books (including all registers and minute books) of the
Company have been properly kept and contain an accurate and complete record of
the matters which should be dealt with in those books, and no notice or
allegation that any of them is incorrect or should be rectified has been
received.

Statutory returns

 

2.3 The Company has complied with the provisions of the Companies Acts (as
defined in the Companies Act 2006) and the Companies Act 1989 in that all
returns, particulars, resolutions and other documents required to be filed with
or delivered to the Registrar of Companies or to any other authority whatsoever
by the Company have been correctly and properly prepared and so filed or
delivered.

Share capital

 

2.4 The Shares constitute the whole of the issued share capital of Muirhead and
the Seller is the sole beneficial owner of the Shares as set out in part 1
Schedule 1. There is no Encumbrance on, over or affecting any of the Shares or
any unissued shares, debentures or other securities of Muirhead. No claim has
been made by any person to be entitled to the benefit of any such Encumbrance
and no person has the right (exercisable now or in the future and whether
contingent or not) to call for the issue of any share or loan capital of the
Company.

Subsidiaries’ shares

 

2.5 Muirhead is the sole beneficial owner of the entire issued share capital of
AIDL and Norcroft as set out in Schedule 1 and is entitled to be registered as
the legal owner of such shares. There is no Encumbrance on, over or affecting
any of the shares in AIDL or Norcroft or any unissued shares, debentures or
other securities of AIDL or Norcroft. No claim has been made by any person to be
entitled to the benefit of any such Encumbrance and no person has the right
(exercisable now or in the future and whether contingent or not) to call for the
issue of any share or loan capital of AIDL or Norcroft.

 

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Purchase of own shares etc

 

2.6 The Company has at no time:

 

  2.6.1 repaid, redeemed or purchased any of its own shares, or otherwise
reduced its issued share capital or any class of it, or capitalised, in the form
of shares, debentures or other securities or in paying up any amounts unpaid on
any shares, debentures or other securities, any profits or reserves of any class
or description or passed any resolution to do so, or agreed to do any of the
above; or

 

  2.6.2 directly or indirectly provided any financial assistance for the purpose
of the acquisition of its own shares or the shares of any holding company of the
Company or for the purpose of reducing or discharging any liability incurred in
such an acquisition, whether in accordance with sections 155 and 156 CA 85 or
otherwise.

Solvency

 

2.7 The Company is not insolvent as defined by section 123 Insolvency Act 1986:

 

  2.7.1 has not entered into any scheme of arrangement or voluntary or other
arrangement with any of its creditors, nor taken any steps to obtain a
moratorium as set out in Schedule Al of that Act;

 

  2.7.2 no order has ever been made or petition presented or resolution passed
for its winding up and no distress, execution or other process has ever been
levied on its assets;

 

  2.7.3 no administrative or other receiver or manager has been appointed by any
person over the whole or any part of its business or assets, nor has any
petition been presented or application made for the appointment of an
administrator in respect of it; and

 

  2.7.4 there are no circumstances which would entitle any person to present a
petition to wind it up, to appoint an administrator in respect of it or to
appoint an administrative or other receiver or manager over the whole or any
part of its undertaking or assets.

 

2.8 AID Inc was not insolvent or unable to pay its debts within the meaning of
section 123 Insolvency Act 1986 or any equivalent legislation in the United
States of America at the time of (nor did it become so as a result of) the sale
of the shares in AIDL to Muirhead and there are no circumstances that would
entitle a liquidator or administrator (or equivalent office holder) to set aside
the sale by AID Inc of the shares in AIDL to Muirhead.

 

3. Connected business

Connected transactions

 

3.1 The Company:

 

  3.1.1 has not been, nor has agreed to become, the holder or other owner of any
shares, debentures or other securities of any other body corporate (whether
incorporated in the United Kingdom or elsewhere) with the exception of Norcroft
and AIDL;

 

  3.1.2 has not agreed to become a subsidiary of any other body corporate or
under the control of any group of bodies corporate or consortium;

 

  3.1.3 is not, nor has agreed to become, a member of any partnership, joint
venture, consortium or other unincorporated association other than a recognised
trade association or a party to any agreement or arrangement for sharing
commissions or other income; and

 

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  3.1.4 has no branch, place of business or substantial assets outside England
and Wales or any permanent establishment (as that expression is defined in any
relevant Order in Council made pursuant to section 788 TA 88) in any country
outside the United Kingdom.

 

4. Accounts

General

 

4.1 The Accounts have been audited, have been prepared and presented in
accordance with UK GAAP, are consistent with the practice and policies adopted
by the Company or during the three accounting periods ended on the Balance Sheet
Date, comply with the requirements of CA 85 or the Companies Act 2006 (whichever
is applicable) and give a true and fair view of the assets, liabilities and the
financial position (including profits and losses) of the Company as at the
Balance Sheet Date.

Provisions

 

4.2 Without prejudice to the contents of paragraph 4.1 above, the Accounts make
proper provision or reserve for (or where appropriate disclose by way of note)
all material liabilities, contingent liabilities, bad and doubtful debts,
obsolete or slow moving stock and depreciation; and do not include (and the
profits of the Company for the period have not been affected to a material
extent by) any unusual, exceptional or non-recurring items of income or
expenditure, with a value in excess of £100,000.

True and fair view

 

4.3 The profit and loss accounts, balance sheets and reports of the Company
(copies of which have been Disclosed) covering the three years ended on the
Balance Sheet Date, give a true and fair view of the assets, liabilities and
financial position (including profits and losses) of the Company at the relevant
dates, and there were no unusual, exceptional or non-recurring items or
transactions entered into other than in the normal course of trade which
materially affect such accounts or the trend of profits shown by them.

Basis of valuation

 

4.4 The basis of valuation for stock-in-trade, work-in-progress and of
depreciation of fixed assets adopted for the purpose of the Accounts and each of
the accounting periods of the Company for the last three financial years ended
on the Balance Sheet Date has, in all material respects, remained consistent.

Books of account

 

4.5 All accounts, books, ledgers, financial and other necessary records of
whatsoever kind of the Company (including all invoices and other records
required for VAT purposes) have been accurately maintained, are in the
possession of the Company and contain true and accurate records of all matters
(including those required to be entered in them by all applicable legislation)
and no notice or allegation that any of them is incorrect or should be rectified
has been received.

US GAAP Accounts

 

4.6 The US GAAP Accounts have been properly prepared and presented in accordance
with the Company’s accounting records, are in accordance with US GAAP and fairly
and in all material respects state the assets, level of turnover, operating
profit and losses and liabilities of the Company as at that date and for that
period and (except as expressly disclosed in them) do not include any unusual,
exceptional or non-recurring item of income or expenditure.

 

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5. Post-Balance Sheet Date events

 

5.1 Since the Balance Sheet Date:

 

  5.1.1 the Company has carried on its business in the normal course and without
any interruption or alteration in the nature, scope or manner of its business;

 

  5.1.2 the Company has not experienced any material deterioration in its
financial position or prospects or turnover or suffered any diminution of its
assets by the wrongful act of any person and the Company has not had its
business, profitability or so far as the Seller is aware prospects materially
and adversely affected by the loss of any important customer or source of supply
or by any abnormal factor not affecting similar businesses to a like extent and
so far as the Seller is aware there are no facts which are likely to give rise
to any such effects;

 

  5.1.3 the Company has not acquired or disposed of or agreed to acquire or
dispose of any assets or assumed or incurred or agreed to assume or incur any
material liabilities (actual or contingent), or made any payment not provided
for in the Accounts, or entered into any other transaction, otherwise than in
the ordinary course of trading;

 

  5.1.4 the Company has not declared, made or paid any dividend, bonus or other
distribution of capital or income (whether a qualifying distribution or
otherwise) and (excluding fluctuations in overdrawn current accounts with
bankers) no loan or loan capital of the Company has been repaid in whole or in
part or has become due or is liable to be declared due for any reason;

 

  5.1.5 the Company has not made any change to the remuneration, terms of
employment, emoluments or pension benefits of any present or former director,
officer or employee of the Company who on the Balance Sheet Date was entitled to
remuneration in excess of £50,000 per annum and has not appointed or employed
any additional director, officer or employee who is so entitled;

 

  5.1.6 the Company has received payment in full on their due dates of all debts
owing to the Company shown in the Accounts (subject to any provision for bad and
doubtful debts made in the Accounts), and the Company has not released any debts
in whole or in part or written off debts in an amount exceeding £100,000 in the
aggregate;

 

  5.1.7 the Company has not entered into contracts involving capital expenditure
in an amount exceeding £100,000 in the aggregate;

 

  5.1.8 the Company has not become aware that any event has occurred which would
entitle any third party to terminate any contract or any benefit enjoyed by the
Company or to call in any money before the normal due date;

 

  5.1.9 the Company has not purchased stocks in quantities or at prices
materially greater than was the practice of the Company before the Balance Sheet
Date;

 

  5.1.10 the Company has paid its creditors within the times agreed with such
creditors and has no debts outstanding which are overdue for payment by more
than four weeks;

 

  5.1.11 the Company has not created or agreed to create any Encumbrance or
entered into any factoring arrangement, hire-purchase, conditional sale or
credit sale agreement which has not been Disclosed (and there has been no
default by the Company in the performance or observance of any of the provisions
of any such Disclosed Encumbrance, arrangement or agreement);

 

  5.1.12

the Company has not borrowed or raised any money or taken any financial facility
(except such short term borrowings from bankers as are within the amount of any

 

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overdraft facility which was available to the Company at the Balance Sheet Date)
or renegotiated or received any notice from any banker that such banker wishes
to renegotiate any overdraft facility available to the relevant Company at the
Balance Sheet Date;

 

  5.1.13 the Company has not made any material change to the accounting
procedures or principles by reference to which the Accounts were drawn up nor
made any change to its accounting reference date and no accounting period of the
Company has ended since the Balance Sheet Date; and

 

  5.1.14 the Company (including any class of its members) has not passed any
resolution whether in general meeting or otherwise.

 

5.2 Prior to the date of this Agreement, the Seller has procured the repayment
by the Companies of all External Borrowings and Inter-Company Payables.

 

6. Transactions with the Seller, directors and Connected Persons

 

   Loans and debts

 

6.1 There are not outstanding:

 

  6.1.1 any Inter-Company Payables or Inter-Company Receivables

 

  6.1.2 and, save for Ordinary Trading Items, there is not outstanding:

 

  (a) any other indebtedness or other liability (actual or contingent) owing by
the Company to the Seller or any director of the Company or any Connected Person
or owing to the Company by the Seller or any director of the Company or any
Connected Person; or

 

  (b) any guarantee or security for any such indebtedness or liability.

 

   Arrangements with Connected Persons

 

6.2 The Company:

 

  6.2.1 is not, nor has it at any time during the last three years been, a party
to any agreement, arrangement or understanding (whether legally enforceable or
not) in which the Seller, or any director of the Company or any Connected Person
is or has been interested whether directly or indirectly; or

 

  6.2.2 is not a party to, nor have its profits or financial position during the
last three years been affected by, any agreement or arrangement which is not
entirely of an arm’s length nature.

 

   Competitive interests

 

6.3 None of the Seller, the directors of the Company nor any Connected Person,
either individually or with any other person or persons, has any estate, right
or interest, directly or indirectly, in any business other than that now carried
on by the Company which is or is likely to become competitive with any aspect of
the Business of the Company except:

 

  6.3.1 as registered holder or other owner of any class of securities of any
company if such class of securities is listed on any recognised investment
exchange (as defined in the Financial Services and Markets Act 2000) and if such
person (together with Connected Persons and Affiliates) holds or is otherwise
interested in less than three per cent of such class of securities;

 

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  6.3.2 for the Permitted Business and in relation to which the full details of
the existing Permitted Business have been Disclosed,

 

   and the Seller is not itself or with any other person or persons interested
in any way whatsoever in any Intellectual Property Rights used and not wholly
owned by the Company.

 

   Benefits

 

6.4 No Connected Person is entitled to or has claimed entitlement to any
remuneration, compensation or other benefit from the Company.

 

7. Finance

 

   Borrowings

 

7.1 Particulars of all money borrowed by the Company have been Disclosed. The
total amount borrowed by the Company from any source does not exceed any
limitation on its borrowing contained in the articles of association of the
Company or in any debenture or loan stock trust deed or instrument or any other
document binding on the Company and the amount borrowed by the Company from each
of its bankers does not exceed the overdraft facility agreed with such banker.
The Company has no outstanding loan capital.

 

   Debts owed to the Company

 

7.2 All debts owed to the Company are collectable in the ordinary course of
business and each such debt will so far as the Seller is aware realise in full
its face value within three months of its due date for payment. The Company owns
the benefit of no debt (whether present or future) other than debts that have
accrued to it in the ordinary course of business.

 

   Bank accounts

 

7.3 There have been Disclosed:

 

  7.3.1 particulars of the balances on all the bank accounts of the Company as
at a date not more than two days before the date of this Agreement and the
Company has no other bank accounts. Since the date of such particulars there
have been no payments out of any such bank accounts except for routine payments;

 

  7.3.2 all unpresented cheques drawn by the Company, and there are no such
unpresented cheques drawn otherwise than in the normal course of business.

 

   Financial facilities

 

7.4 The Seller has Disclosed full details and true and correct copies of all
documents relating to all debentures, acceptance lines, overdrafts, loans or
other financial facilities outstanding or available to the Company and all
Encumbrances to which any asset of the Company is subject. Neither the Seller
nor the Company has done anything whereby the continuance of any such facility
or Encumbrance in full force and effect might be affected or prejudiced.

 

   Grants

 

7.5 Full details of all grants made to the Company in the last six years, and
all outstanding applications for any such grant, have been Disclosed. No act or
transaction has been effected in consequence of which the Company is or could be
held liable to refund (in whole or in part) any such grant or any loan received
by virtue of any statute, or in consequence of which any such grant or loan for
which application has been made by it will not or may not be paid or will or may
be reduced.

 

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Options and guarantees

 

7.6 The Company is not responsible for the indebtedness of any other person nor
party to any option or pre-emption right or any guarantee, suretyship or any
other obligation (whatever called) to pay, purchase or provide funds for the
payment of, or as an indemnity against the consequence of default in the payment
of, any indebtedness of any other person; and no person has given any guarantee
of or security for any overdraft, loan or loan facility granted to the Company.

Payment of obligations

 

7.7 There has been no delay by the Company in the payment of any material
obligation due for payment.

 

8. Environment

Definitions

 

8.1 In this Agreement:

“Environment” means any and all organisms (including man), ecosystems, property
and the following media: air (including the air within buildings and the air
within other natural or man-made structures, whether above or below ground);
water (including water under or within land or in drains or sewers and coastal
and inland waters); and land (including land under water);

“Environment Agreements” means any and all leases or licences or other
agreements (including agreements of the nature referred to within DETR Circular
01/2006 dated September 2006) which are binding on the Company but only to the
extent that they relate to the protection of the Environment and/or the
prevention of Harm and/or Remediation Action and/or the provision of remedies in
respect of Harm;

“Environment Law” means any and all laws applying as at the date of this
Agreement, whether civil, criminal or administrative and which have as a purpose
or effect the protection of the Environment and/or the prevention of Harm and/or
the carrying out of Remediation Action and/or the provision of remedies in
respect of Harm which are legally binding, including: European Community or
European Union regulations, directives, decisions and recommendations; statutes
and subordinate legislation; regulations, orders and ordinances; Permits; codes
of practice, circulars, guidance notes and the like; common law, local laws and
bye-laws; and judgments, notices, orders, directions, instructions or awards of
any Competent Authority;

“Environment Liability” means liability (including liability in respect of
Remediation Action) on the part of the Company and/or any of its directors or
officers or shareholders under Environment Laws;

“Harm” means harm or damage to, or other interference with, the Environment and
includes, in the case of man, offence caused to any of his senses or harm or
damage to his property;

“Hazardous Matter” means any and all matter (including asbestos), radiation,
electricity, heat, vibration or noise that (alone or in combination) is capable
of causing Harm;

“Other Property” means any and all land or property, other than any Property,
owned, occupied or operated at any time by the Company including any land or
property used for the disposal, reclamation or recycling of Hazardous Matter;

“Permits” means any and all licences, consents, permits, registrations, filings,
exemptions, approvals, authorisations or the like, made or issued pursuant to or
under, or required by, Environment Law in relation to the Properties and/or the
carrying on of the Business;

 

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“Remediation Action” means (i) preventing, limiting, removing, remedying,
cleaning-up, abating or containing the presence or effect of any Hazardous
Matter in the Environment or (ii) carrying out investigative, design and scoping
work and obtaining legal and other professional advice as is reasonably required
in relation to (i).

Compliance with Environment Law

 

8.2 So far as the Seller is aware, each Property and any Other Property has been
used, and the Company has operated, at all times in material compliance with
Environment Law and no work, repairs, remediation, construction, or capital
expenditure over £100,000 is required under any Environment Law.

 

8.3 The Seller has Disclosed all material correspondence between the Company and
the competent authorities in respect of the Environment.

Permits

 

8.4 All Permits necessary under Environment Law for carrying on of the Business
in the manner in which the Business is now carried on have been obtained, full
copies of them have been Disclosed, and all are in full force and effect and
their terms and conditions have been materially complied with. No circumstances
exists which may result in modification, suspension, or revocation of any Permit
or may result in any such Permit not being extended, renewed, granted or (where
necessary) transferred. Renewals of all permits, if required, have been timely
applied for.

Hazardous Matter

 

8.5 As far as the Seller is aware, no Hazardous Matter has been spilled,
deposited, disposed of, discharged, emitted at, on, under or from any Property
and/or the Other Properties on or prior to Completion which may give rise to an
Environment Liability.

Environment Agreements

 

8.6 The Company is, and has at all times been, in compliance with the
Environment Agreements, and has not received notification of any claim or
liability, and does not know of any circumstances likely to give rise to a claim
or liability, under any Environment Agreement.

Storage tanks

 

8.7 No underground storage tanks of any kind, including related pipework, are or
have been located at any time whatsoever on or under any Property.

Notice of claims

 

8.8 At no time in the last three years have the Seller or the Company had
knowledge of or received any notice, claim, demand or other communication which
could give rise to an Environment Liability.

Assessments, audits etc

 

8.9 The Seller has Disclosed and provided to the Purchaser complete copies of
all assessments, audits, reports or investigations relating to the Environment,
Environment Law or Environment Liability in connection with the Properties or
the Other Properties or to the operations of the Company whether in draft form
(but excluding any draft reports superseded by a final version) or final form
which it holds copies of and is entitled to disclose by operation of law.

 

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Other Properties

 

8.10 The Seller has Disclosed the following information in relation to the Other
Properties:

 

  8.10.1 address and current and former uses; and

 

  8.10.2 nature of involvement of the Company, including any former property
interest.

Asbestos

 

8.11 So far as the Seller is aware no claim has been made or other action taken
or threatened by any employee, customer or other individual alleging exposure to
asbestos in any Products manufactured, sold, serviced, repaired or otherwise
handled currently or in the past by the Company and the Seller is not aware of
any circumstance which may reasonably lead to such a claim.

 

9. Health and Safety

Compliance

 

9.1 So far as the Seller is aware, the Business has at all times been conducted
in material compliance with all applicable legislation concerning health and
safety matters and all and any regulations or orders made or issued under any
such legislation and any relevant codes of practice, guidance notes and the like
issued by government agencies which are legally binding (the “Health and Safety
Legislation”).

 

9.2 [Intentionally left blank.]

Properties

 

9.3 No works, repairs, construction, remedial action or expenditure over
£100,000 is required in relation to the Health and Safety Legislation in order
to carry on the Business lawfully at any Property.

Claims

 

9.4 The Seller is not aware of any notice, claim or other communication alleging
any contravention of or actual or potential liability under the Health and
Safety Legislation.

 

10. Other assets

Title

 

10.1 The Company:

 

  10.1.1 has, except insofar as this Warranty is inconsistent with paragraph 22
(Properties) and paragraph 18 (IP) (and except for assets disposed of in the
ordinary course of trading), legal and beneficial title (free from any
Encumbrance, hire or hire purchase agreement or leasing agreement or agreement
for payment on deferred terms) to all of its assets which:

 

  (a) are included in the Accounts; or

 

  (b) have otherwise been Disclosed as being its property; or

 

  (c) were at the Balance Sheet Date used or held for the purposes of its
business; or

 

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  (d) have been acquired by it since the Balance Sheet Date

and all such assets are in its possession and control and are sited within the
United Kingdom.

 

  10.1.2 has not acquired or agreed to acquire any material asset on terms that
title does not pass to it until full payment is made.

 

  10.1.3 owns or has the right to use all the assets used in, related to or
required by the Company in order to carry on its business in the manner in which
it is currently carried on.

Condition of assets

 

10.2 The plant and machinery (including fixed plant and machinery) and all
vehicles and office and other equipment shown in the Accounts or acquired since
the Balance Sheet Date or otherwise used in connection with the Business which
have not been disposed of in the ordinary course of business:

 

  10.2.1 do not so far as the Seller is aware contravene any requirement or
restriction having the force of law;

 

  10.2.2 are in materially good repair and condition and are regularly
maintained;

 

  10.2.3 are so far as the Seller is aware each capable of doing the work for
which they were designed and/or purchased and will each be so capable (subject
to fair wear and tear) during the period of time over which the value of such
assets will be written down to nil in the accounts of the Company;

 

  10.2.4 are not surplus to the Company’s requirements;

 

  10.2.5 are not so far as the Seller is aware dangerous, inefficient, out of
date, unsuitable or in need of renewal or replacement; and

 

  10.2.6 are so far as the Seller is aware free from asbestos,

and the vehicles owned by the Company are so far as the Seller is aware
road-worthy and duly licensed for the purposes for which they are used.

Condition of stock

 

10.3 The Company’s stock-in-trade is in good condition and is capable of being
sold by the Company in the ordinary course of business in accordance with its
current price list without rebate or allowance to a purchaser.

Rental payments

 

10.4 Rentals payable by the Company under any leasing, hire-purchase or other
similar agreement to which it is a party are set out in the Disclosure Letter
and have not been and are not likely to be increased and all such rentals are
fully deductible by the Company for tax purposes.

 

11. Insurance

Extent of insurance

 

11.1 All the assets of the Company that are of an insurable nature are
adequately insured against fire and all relevant risks and the Company is and
has at all material times since 11 October 1999 been adequately covered against
all relevant legal liability and risks (including liability to

 

50

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employees or third parties for personal injury or loss or damage to property,
product liability and loss of profit and liability to third parties in respect
of errors or omissions in the provision of any professional services by the
Company).

Premiums and claims

 

11.2 Particulars of all policies of insurance of the Company now in force have
been Disclosed and such particulars are true and correct and all premiums due on
such policies have been duly paid and all such policies are valid and in force.
So far as the Seller is aware, there are no circumstances and there is no action
which the Company has or has not taken in relation to a claim that would
otherwise be payable under the policy which might lead to a repudiation of any
such policy or to any liability under such insurance being avoided by the
insurers in relation to a claim that would otherwise be payable under the policy
or to the premiums being increased. There is no claim outstanding under any such
policies and so far as the Seller is aware there are no circumstances likely to
give rise to such a claim.

 

12. Litigation

Litigation

 

12.1 The Company:

 

  12.1.1 except as claimant in the collection of debts (not exceeding £100,000
in the aggregate) arising in the ordinary course of trading, is not now engaged
in any Litigation, and no Litigation is in prospect, in either case by the
Company or, so far as the Seller is aware, against the Company or any person for
whose acts or defaults it may be vicariously liable;

 

  12.1.2 has not, in the last five years preceding the date of this Agreement,
been involved in any Litigation with any person who is or was a supplier, or
customer, of importance to the Company or the Business, or where such Litigation
resulted in adverse publicity or loss of goodwill; and,

 

  12.1.3 so far as the Seller is aware, there is no matter or fact in existence
which might give rise to any Litigation involving the Company, including any
which might form the basis of any criminal prosecution against it.

Injunctions, etc

 

12.2 No injunction or order for specific performance has been granted against
the Company which has not been discharged or fully complied with or is otherwise
no longer in force.

Orders and judgments

 

12.3 The Company is not subject to any order or judgment given by any court,
tribunal or governmental agency which is still in force, nor has it given any
undertaking to any court or tribunal or to any third party arising out of any
Litigation.

 

13. Licences

General

 

13.1 The Company has all necessary licences (including statutory licences),
permits, consents and authorities (public and private) for the proper and
effective carrying on of the Business in the manner in which the Business is now
carried on and all such licences, permits, consents and authorities are valid
and subsisting and the Seller knows of no reason why any of them should be
suspended, cancelled or revoked whether in connection with the sale to the
Purchaser or otherwise and, so far as the Seller is aware, there are no factors
that might in any way prejudice

 

51

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the continuance or renewal of any of those licences, permits, consents or
authorities and the Company is not restricted by contract from carrying on any
activity in any part of the world. The Company has obtained all export licences
required for products exported from the United Kingdom.

Financial Services and Markets Act etc

 

13.2 The Company does not carry on or purport to carry on, nor has at any time
since 28th April 1988 carried on or purported to carry on, in the United Kingdom

 

  13.2.1 investment business within the meaning of section 1 Financial Services
Act 1986; or

 

  13.2.2 any regulated activity within the meaning of section 22 Financial
Services and Markets Act 2000,

 

   nor has contravened any provision of either of those Acts.

 

   Data Protection Act 1998

 

13.3

 

  13.3.1 The Company has registered or applied to register itself under the Data
Protection Act 1998 in respect of all registrable personal data held by it, and
all due and requisite fees in respect of such registrations have been paid.

 

  13.3.2 The details contained in such registrations or applications are
correct, proper and suitable for the purpose(s) for which the Company holds or
uses the personal data which are the subject of them, and the contents of all
such registrations or applications have been Disclosed.

 

  13.3.3 All personal data held by the Company has been held by it in accordance
with the data protection principles and there has been no unauthorised
disclosure of such personal data.

 

  13.3.4 The Company has not received any notice or complaint from any
individual or regulatory authority alleging non-compliance with the Data
Protection Act 1998 (including any prohibition or restriction on the transfer of
data) or claiming compensation for an injunction in respect of non-compliance
with the Data Protection Act 1998.

 

  13.3.5 There are no unsatisfied requests to the Company made by data subjects
in respect of personal data held by it, nor any outstanding applications for
rectification or erasure of personal data.

 

  13.3.6 There are no outstanding claims against the Company for compensation
for inaccuracy, loss or unauthorised disclosure of personal data; nor is any
personal data held by the Company inaccurate; nor has it lost or made any
unauthorised disclosure of any such data.

 

  13.3.7 Without prejudice to the specific provisions above, the Company and its
employees have complied in all respects with the requirements of the Data
Protection Acts 1984 and 1998.

 

52

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14. Trading

 

   Definition

 

14.1 In this Agreement, “Product” means any goods, product, apparatus or
equipment which the Company has manufactured, marketed, repaired, supplied or
agreed to supply to any person or put into service and includes a product which
is comprised in another product (whether by virtue of being a component part or
raw material or otherwise).

 

   Tenders, etc

 

14.2 No offer, tender or the like is outstanding (the value of which to the
Company could exceed £100,000 in any year) which is capable of being converted
into an obligation of the Company by an acceptance or other act of some other
person.

 

   Delegation of powers

 

14.3 There are in force no powers of attorney given by the Company other than to
the holder of an Encumbrance (which has been Disclosed) solely to facilitate its
enforcement nor any other authority (express, implied or ostensible) given by
the Company to any person to enter into any contract or commitment or do
anything on its behalf other than any authority of employees to enter into
routine trading contracts in the normal course of their duties.

 

   Consequence of acquisition of Shares by Purchaser

 

14.4 Nothing done in compliance with the terms of this Agreement (including
acquisition of the Shares by the Purchaser) and no change in the management of
the Company will:

 

  14.4.1 cause the Company to lose the benefit of any right or privilege it
presently enjoys or so far as the Seller is aware cause any person who normally
does business with the Company not to continue to do so on the same basis as
previously;

 

  14.4.2 relieve any person of any obligation to the Company (either contractual
or so far as the Seller is aware otherwise) or legally entitle any person to
determine any such obligation or any right or benefit enjoyed by the Company or
to exercise any right, whether under an agreement with, or so far as the Seller
is aware otherwise in respect of, the Company;

 

  14.4.3 conflict with, or result in the breach of, or constitute a default on
the part of the Company or the Seller under (i) any of the terms, conditions or
provisions of any agreement or instrument to which it is now a party; or any
loan to or mortgage created by it; or (ii) its memorandum or articles of
association;

 

  14.4.4 result in any present or future indebtedness of the Company becoming
due and payable or capable of being declared due and payable prior to its stated
maturity;

 

  14.4.5 so far as the Seller is aware cause any director, officer or senior
employee of the Company to leave employment;

 

  14.4.6 conflict with, violate or result in a breach of any law, regulation,
order, decree, claim form or application notice applicable to the Company or the
Seller or entitle any person to receive from the Company any finder’s fee,
brokerage or other commission,

 

   or, so far as the Seller is aware without having made any investigation of
any such client, customer or supplier, will prejudicially affect the attitude or
actions of clients, customers and suppliers with regard to the Company.

 

53

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   The Products

 

14.5 At no time has the Company:

 

  14.5.1 carried on any business other than the Business now carried on by the
Company; or

 

  14.5.2 designed, manufactured, placed on the market, installed, supplied or
put into service any Product which was at the material times not fully compliant
with:

 

  (a) the requirements of all applicable European laws and the laws of any
territory in which such Product has been placed on the market or put into
service;

 

  (b) the terms of any applicable recognised national or international product
standards; or

 

  (c) any representation or warranty (whether express or implied) given in
respect of such Product; or

 

  14.5.3 had knowledge of or received any notice, claim, governmental
enforcement action or other communication from any person alleging any defect
in, or lack of fitness for purpose of, any Product or any contravention of any
applicable law or standard relating to the Products nor requiring the Company to
repair or rectify any defect or default in any Product. So far as the Seller is
aware, there are no circumstances which could give rise to such a notice, claim
or action.

 

   Guarantees and warranties

 

14.6 Except for warranties or guarantees implied by law, every:

 

  14.6.1 guarantee, warranty and/or representation given or made in respect of
articles or trading stock sold or contracted to be sold by the Company; and

 

  14.6.2 liability or obligation to service, maintain, repair, take back or
otherwise do or not do anything in respect of any articles or stock that would
apply after any such article or stock has been delivered by the Company

 

   (the value of which could exceed £100,000) has been Disclosed.

 

   Competition/Anti-trust

 

14.7 The Company is not party to or directly concerned in any agreement,
arrangement, understanding, practice (whether or not legally binding) or conduct
which is:

 

  14.7.1 the subject of an investigation by the Office of Fair Trading or a
reference to the Competition Commission under the provisions of the Enterprise
Act 2002;

 

  14.7.2 infringing Article 81 or Article 82 of the EC Treaty or section 2 or
section 18 of the Competition Act 1998;

 

  14.7.3 in contravention of the Consumer Credit Act 1974, the Trade
Descriptions Act 1968, the Consumer Protection Act 1987 or any other provision
of the Competition Act 1998 not previously mentioned;

 

  14.7.4 otherwise in contravention of the anti-trust legislation, trade
regulation or similar legislation of any jurisdiction in which the Company
conducts business;

 

54

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  14.7.5 the subject of any investigation, inquiry or proceedings by any
competent anti-trust authority or any litigation proceedings in respect of the
anti-trust legislation, trade regulation or similar legislation of any
jurisdiction in which the Company conducts business;

 

  14.7.6 the subject of any threatened or pending investigation, inquiry or
proceedings by any competent anti-trust authority or any threatened or pending
litigation proceedings in respect of the anti-trust legislation of any
jurisdiction in which the Company conducts business;

 

  14.7.7 subject to any existing or pending decisions, judgments, orders or
rulings of or undertakings given to any competent anti-trust authority or other
competent body in any jurisdiction in which the Company conducts business; and

 

   the Company is not in receipt of any payment, guarantee, financial assistance
or other aid from a government or other state body which was not, but should
have been, notified to the European Commission under Article 88 of the EC Treaty
for a decision declaring such aid to be compatible with the common market.

 

   Restrictions on trading

 

14.8 The Company is not and has not been a party to any agreement, arrangement,
understanding or practice restricting its freedom to provide and take goods and
services by such means and from and to such persons and into or from such place
as it may from time to time think fit other than as Disclosed.

 

   Possession of records

 

14.9 All title deeds and agreements to which the Company is a party, and all
other documents owned by it, are in its possession or so held; and none of its
records, systems, controls, data or information is recorded, stored, maintained,
operated or otherwise wholly or partly dependent on or held by any means
(including any electronic, mechanical or photographic process, whether
computerised or not) which (including all means of access to and from them) are
not under the exclusive ownership and direct control of the Company.

 

   Business names

 

14.10 The Company does not use on its letterhead, books or vehicles or otherwise
carry on its business under any name other than its corporate name.

 

   Unlawful acts

 

14.11 None of the Company or its existing officers or, so far as the Seller is
aware, any of its previous officers have been prosecuted for any criminal,
illegal or unlawful act connected with the Company.

 

   Inducements

 

14.12 No officer or employee of the Company has (in connection with the Business
or otherwise) directly or indirectly offered, given, procured or received any
gift, loan, fee, reward, advantage or other consideration which:

 

  14.12.1 is deemed illegal under the Prevention of Corruption Acts 1889 to 1916
and/or Part 12 of the Anti-terrorism, Crime and Security Act 2001, or which has
contravened, or was intended to result in the contravention of, the laws of any
jurisdiction (including in particular but without limitation the US Foreign
Corrupt Practices Act); or

 

55

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  14.12.2 (whether or not it is unlawful) is in the nature of a bribe, influence
payment or kickback or similarly has an ulterior or covert purpose;

 

   or has agreed, conspired or attempted to, or assisted any other person to, do
any such thing.

 

   Previous Business Acquisitions

 

14.13 Other than as Disclosed, the Company has not acquired any business or
material asset from a third party or from any member of the Retained Group.

 

15. Contracts

 

   Material contracts

 

15.1 All contracts to which the Company is a party with a value in excess of
£100,000 in the last twelve months prior to Completion, and all contracts with
the 10 largest customers and 10 largest suppliers of each Company, have been
Disclosed and the Company is not a party to or subject to any agreement,
transaction, obligation, commitment, understanding, arrangement or liability
which:

 

  15.1.1 cannot readily be fulfilled or performed by the Company on time and
without undue or unusual expenditure of money and effort; or

 

  15.1.2 requires the Company to pay any commission, finder’s fee, royalty or
the like; or

 

  15.1.3 is in any way otherwise than in the ordinary and proper course of the
Company’s business.

 

   Performance of contracts

 

15.2

 

  15.2.1 The terms of all the Company’s contracts have been complied with by it
and, so far as the Seller is aware, by the other parties to the contracts in all
material respects and there are no circumstances likely to give rise to a
default by it or (so far as the Seller is aware) by any other party under any
such contract.

 

  15.2.2 There are no outstanding claims, separately or in the aggregate, of
material amounts, against the Company on the part of customers or other persons
in respect of defects in quality or delays in delivery or completion of
contracts or deficiencies of design or performance or otherwise relating to
liability for goods or services sold or supplied by it and no such claims are
threatened or (so far as the Seller is aware) anticipated and (so far as the
Seller is aware) there is no matter or fact in existence in relation to goods or
services currently sold or supplied by it which might give rise to any such
claim.

 

  15.2.3 The Seller has no knowledge of the invalidity of or grounds for
rescission, avoidance or repudiation of any agreement or other transaction to
which it is a party or in relation to which it otherwise purports to have
enforceable rights and it has received no notice of any intention to terminate,
repudiate or disclaim any such agreement or other transaction.

 

   Agency and distribution agreements

 

15.3 The Company is not a party to any subsisting agency or distributorship
agreement with a value in excess of £100,000 in the twelve months prior to
Completion.

 

56

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16. Employees

 

   Particulars of employees

 

16.1 So far as the Seller is aware, the particulars shown in the schedule of
employees that has been Disclosed are true and complete and show in respect of
each director, officer or employee of the Company his date of birth (if
available), the date on which he commenced continuous employment with the
Company for the purposes of the ERA and all remuneration payable and other
benefits provided or which the Company is bound to provide to each such person
and full particulars of all remuneration arrangements (particularly profit
sharing, incentive, bonus and severance arrangements to which the Company is a
party) and each director, office, employee and worker of the Company is
Disclosed.

 

   Contracts of employment

 

16.2 Copies of all written contracts of employment in force between the Company
and any of its directors, officers or employees (and so far as the Seller is
aware any material terms of employment that are not in writing) have been
Disclosed. There are no consultancy, agency or management services agreements in
existence between the Company and any other person, firm or company, and there
are no legally binding agreements between the Company (or any employers’ or
trade association of which the Company is a member) and any recognised Trade
Union or works council or staff association. There are no outstanding pay
negotiations with any employees or recognised Trade Unions.

 

   Benefits

 

16.3 There are no amounts owing to present or former directors, officers or
employees of the Company other than not more than one month’s arrears of
remuneration (including any bonuses, benefits or other employment-related
payments) accrued or due or for reimbursement of business expenses incurred
within a period of three months preceding the date of this Agreement and no
moneys or benefits other than in respect of remuneration or emoluments of
employment are payable to or for the benefit of any present or former director,
officer or employee of the Company, nor any dependant of any present or former
director, officer or employee of the Company.

 

   Liabilities and payments

 

16.4 So far as the Seller is aware and except to the extent (if any) to which
full provision or allowance has been made in the Accounts:

 

  16.4.1 no liability has been incurred or is reasonably anticipated by any
senior member of the Human Resources department of the Company for breach of any
contract of employment or for severance payments or for redundancy payments or
protective awards or for compensation for unfair dismissal or for failure to
comply with any order for the reinstatement or re-engagement of any employee or
for sex or race or disability discrimination or for any other liability
(statutory, contractual or otherwise) accruing from the termination or variation
of any contract of employment or (in respect of any discrimination claims only)
for services;

 

  16.4.2 no gratuitous payment has been made or promised by the Company in
connection with the actual or proposed termination, suspension or variation of
any contract of employment of any present or former director, officer or
employee or any dependant of any present or former director, officer or employee
of the Company; and

 

  16.4.3 the Company has not made or agreed to make any payment to, or provided
or agreed to provide any benefit or change in terms and conditions of employment
for, any of its present or former directors, officers or employees in connection
with the sale and purchase contemplated by this Agreement.

 

57

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   Relevant legislation

 

16.5

 

  16.5.1 The Company has in relation to each of its employees (and so far as
relevant to each of its former employees) complied with:

 

  (a) all material obligations imposed on it by all relevant statutes or
statutory instruments affecting its employment of any persons and all relevant
orders and awards made thereunder and has maintained records regarding the
service, terms and conditions of employment of each of its employees; and

 

  (b) all collective agreements and recognition agreements for the time being
affecting its employees or their conditions of service.

 

  16.5.2 The Company has not been served with any improvement and/or prohibition
notices pursuant to sections 21 and 22 of the Health and Safety at Work etc Act
1974, nor is any prosecution or sentence pending for any (alleged) offence under
that Act.

 

  16.5.3 So far as the Seller is aware, the Company is not in breach of any of
the provisions on the employment of young persons contained in the Health and
Safety (Young Persons) Regulations 1997, the Children (Protection at Work)
Regulations 1998 or the Working Time Regulations 1998 and is not presently being
prosecuted under any of such provisions.

 

  16.5.4 There is no liability awarded by a court or tribunal or claim against
the Company outstanding under the Equal Pay Act 1970, the Sex Discrimination
Acts 1975 and 1986, the Race Relations Act 1976, the Disability Discrimination
Act 1995, ERA, TUPE, the Social Security Contributions and Benefits Act 1992,
TULRCA, the Working Time Regulations 1998, the National Minimum Wage Regulations
1999 or the Part-time Workers (Prevention of Less Favourable Treatment)
Regulations 2000, the Part-time Workers (Prevention of Less Favourable
Treatment) Regulations 2000, the Fixed Term Employees (Prevention of Less
Favourable Treatment) Regulations 2002 or the Employment Act 2002, the
Employment Equality (Sexual Orientation) Regulations 2003, the Employment
Equality (Religion or Belief) Regulations 2003 and the Employment Equality (Age)
Regulations 2006.

 

  16.5.5 Within a period of one year preceding the date of this Agreement, the
Company has not given notice of any redundancies to the Secretary of State or
started consultations with any independent trade union or workers’
representatives under the provisions of Part IV TULRCA or under TUPE nor has it
failed to comply with any such obligation under Part IV TULRCA or under TUPE.

 

   Termination of employment

 

16.6 None of the present directors, officers or employees of the Company has
given or received notice terminating his employment except as expressly
contemplated under this Agreement and Completion of this Agreement will not
entitle any director, officer, employee to terminate his employment or trigger
any entitlement to a severance payment or liquidated damages; and the Company
has complied with all specific recommendations made to it by the Advisory
Conciliation and Arbitration Service and with all awards and declarations made
to it by the Central Arbitration Committee in respect of its employees or any
Trade Union.

 

   Share and other schemes

 

16.7

The Company does not have in existence and is not proposing to introduce, and
none of its directors, officers or employees participates in (whether or not
established by the relevant Company), any employee share option plan, employee
share trust, share incentive scheme, share

 

58

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option scheme or profit sharing scheme for the benefit of all or any of its
present or former directors, officers or employees or the dependants of any of
such persons or any scheme under which any of its present or former directors,
officers or employees is entitled to a commission or remuneration of any other
sort calculated by reference to the whole or part of the turnover, profits or
sales of the Company or any other person, firm or company including any profit
related pay scheme established under Chapter III, Part V TA 88.

 

   Disputes and claims

 

16.8 No:

 

  16.8.1 dispute exists or can reasonably be anticipated (by any senior member
of the Human Resources Department of the Company) between the Company and a
material number or category of its employees or any Trade Union(s) or works
council and, so far as the Seller is aware, there are no wage or other claims
outstanding against the Company by any person who is now or has been a director,
officer or employee of the Company; and

 

  16.8.2 form of official industrial action by the Company’s employees or
workers or any lock out has occurred during the last three years, nor, so far as
the Seller is aware, is any reasonably anticipated by any senior member of the
Human Resources Department of the Company, which has caused, or is likely to
cause, the Company to be materially incapable of carrying on its business in the
normal and ordinary course.

 

   Transfer of undertakings

 

16.9 The Company has not:

 

  16.9.1 been a party to any relevant transfer as defined in TUPE; or

 

  16.9.2 failed to comply with any duty to inform and consult any Trade Union or
employees’ or workers’ representatives under TUPE

 

   within the period of one year preceding the date of this Agreement.

 

   Agreements with Trade Unions

 

16.10 The Company is not a party to any agreement or arrangement with or
commitment to any trade unions or staff association and, so far as the Seller is
aware, no application for collective bargaining – recognition by a recognised
Trade Union is pending in relation to the Company under Schedule Al of TULRCA.

 

17. Pension Schemes

 

   General

 

17.1 All material details of the Pension Schemes, the Company’s obligations in
respect of them, the trustees (where appropriate) and those of the employees who
are members have been Disclosed and no proposal has been announced or made by
the Company to amend any of the Pension Schemes.

 

17.2 Other than as Disclosed, there are no other Pension Schemes for current or
past directors or employees of the Company and no other schemes that the
Company, or any part of it, has ever participated in as an employer.

 

   Benefits, discretions and funding

 

17.3 In relation to each Pension Scheme:

 

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  17.3.1 no power to augment benefits has been exercised;

 

  17.3.2 no discretion has been exercised to admit an employee to membership of
the pension scheme who would not otherwise be eligible;

 

  17.3.3 no discretion has been exercised to provide a benefit which would not
otherwise be provided;

 

  17.3.4 all benefits (other than a refund of contributions with interest where
appropriate) payable under the pension scheme on the death of a member while in
an employment to which the pension scheme relates or during a period of sickness
or disability of a member are fully insured by a policy with an insurance
company of good repute. Each member has been covered for insurance by the
insurance company at its normal rates and on its normal terms for persons in
good health and all premiums payable have been paid;

 

  17.3.5 there are no contributions to the Pension Scheme which are due but
unpaid and have remained unpaid for more than one month and in any event
contributions have been paid which are at least equal to and by the due date
specified in any schedule of contributions or payments applicable under section
58 or 87 Pensions Act 1995; and

 

  17.3.6 other than benefits payable on death as Disclosed, it provides only
money purchase benefits within the meaning of section 181 Pension Schemes Act
1993. None of the Companies have given any assurance, promise or guarantee
(whether oral or written) to any person as to the level or amount of benefit to
be provided and, so far as the Seller is aware, no other person has given such
assurance, promise or guarantee.

 

   Administration

 

17.4 Each Pension Scheme:

 

  17.4.1 is a registered pension scheme under Chapter 2 of Part 4 of the Finance
Act 2004 and, so far as the Seller is aware, there is no reason why such
registered status might be withdrawn under section 157 of that Act;

 

  17.4.2 has not been the subject of any report of wrongdoing or irregularities
by the Companies to the Pensions Regulator and, so far as the Seller is aware,
no other person has made such a report and there are no circumstances which
would justify such a report;

 

  17.4.3 is a scheme in respect of which all actuarial, consultancy, legal and
other fees, charges or expenses have been paid and for which no services have
been provided for which an account or invoice has not been rendered; and

 

  17.4.4 has been, so far as the Seller is aware, administered in accordance
with all applicable laws, regulations and requirements and all applicable
requirements of any governmental body or regulatory authority.

 

   Claims

 

17.5 So far as the Seller is aware, no claim has been threatened or made or
litigation commenced against the trustees or administrator of any Pension Scheme
or against the Company or any other person whom the Company is or may be liable
to indemnify or compensate in respect of any matter arising out of or in
connection with any Pension Scheme. So far as the Seller is aware, there are no
circumstances that may give rise to any such claim or litigation. There are no
unresolved disputes under any Pension Scheme’s internal dispute resolution
procedure.

 

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   Stakeholder pension arrangements

 

17.6 The Company has complied with all obligations imposed by the Welfare Reform
and Pensions Act 1999 and any regulations made under it regarding facilitating
access to all of its relevant employees (as defined in that Act) to a
stakeholder pension arrangement and

 

  17.6.1 there is no obligation on the Company to pay contributions to a
stakeholder pension arrangement in respect of any employee or officer of the
Company; and

 

  17.6.2 there are no claims or actions in progress or pending, nor, so far as
the Seller is aware, any reason for such claims or actions involving any
employee or officer of the Company in connection with a stakeholder pension
arrangement.

 

18. Intellectual Property Rights

 

   Definitions

 

18.1 In this Agreement:

 

   “Intellectual Property Rights” means patents, rights to inventions, copyright
and related rights, trade marks, service marks and trade names, domain names,
rights in get-up, rights to goodwill or to sue for passing off or unfair
competition, rights in designs, rights in computer software, database rights,
rights in confidential information (including Know-How) and any other
intellectual property rights or rights of a similar nature, in each case whether
registered or unregistered, and including all applications (or rights to apply)
for, and renewals or extensions of, such rights and all similar or equivalent
rights or forms of protection which subsist or will subsist now or in the future
in any part of the world;

 

   “Know-How” means all inventions, improvements, modifications, processes,
formulae, models, prototypes and sketches, drawings, plans or specifications or
any other matters made, devised, developed or discovered by the Company, alone
or with one or more others, relating to or otherwise in connection with the
Business;

 

   “Licences In” means licences, agreements, authorisations and permissions
pursuant to which the Company uses, exploits or holds (or is permitted to use,
exploit or hold) any Intellectual Property Rights belonging to any third party;

 

   “Licences Out” means licences, agreements, authorisations and permissions
pursuant to which the Company authorises or permits the use of any Intellectual
Property Rights belonging to or otherwise held by the Company.

 

   Not Licences In or Licences Out

 

18.2 Complete and accurate particulars of all registered Intellectual Property
Rights and all material unregistered Intellectual Property Rights owned, used or
exploited by the Company (other than Intellectual Property Rights used or
exploited by the Company pursuant to Licences In) are set out in Part 1 and Part
2 of Schedule 3 (Intellectual Property) respectively.

 

   Licences In

 

18.3 Complete and accurate particulars of all registered Intellectual Property
Rights and all material unregistered Intellectual Property Rights used or
exploited by the Company pursuant to Licences In (in whatever form and whether
express or implied) are set out in Parts 3 and 4 of Schedule 3 (Intellectual
Property) respectively.

 

   Licenses Out

 

18.4 The Company has not entered into any Licences Out of its Intellectual
Property Rights.

 

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   No other Intellectual Property Rights required

 

18.5 The Company does not require any Intellectual Property Rights other than
those set out in Parts 1, 2, 3 and 4 of Schedule 3 (Intellectual Property) in
order to carry on the Business.

 

   Sole owner or applicant

 

18.6 Except in respect of Intellectual Property Rights used, exploited or held
by the Company pursuant to the Licences In as set out in Parts 3 and 4 of
Schedule 3, the Company is the sole legal and beneficial owner of (or applicant
for) the Intellectual Property Rights used by the Company including, without
limitation, those set out in Part 1 of Schedule 3, free from all Encumbrances.

 

   Valid, subsisting and enforceable

 

18.7 The Intellectual Property Rights owned by the Company, including without
limitation those set out in Part 1 of Schedule 3, are valid, subsisting and
enforceable and nothing has been done or not been done as a result of which any
of them has ceased or might cease to be valid, subsisting or enforceable. In
particular:

 

  18.7.1 all application and renewal fees and other steps required for the
prosecution, maintenance or protection of such rights have been paid on time or
taken;

 

  18.7.2 so far as the Seller is aware, no trade marks, service marks, trade
names, or domain names, identical or similar to any such rights, has been
registered or is being used by any person in the same, or a similar, business to
that of the Company in any country in which the Company has registered or is
using that trade mark, service mark, trade name or domain name;

 

  18.7.3 all confidential information (including Know-How) has been kept
confidential and has not been disclosed to third parties (other than persons who
have signed written confidentiality undertakings in respect of such information,
details of which have been Disclosed);

 

  18.7.4 there are no pending or outstanding claims against the Company for
compensation under the Patents Act 1977 or equivalent legislation worldwide;

 

  18.7.5 there are and have been no claims, challenges, disputes or proceedings,
pending or threatened, in relation to the ownership, validity or use of such
rights.

 

   No omission

 

18.8 Nothing is due to be done within 30 days of Completion the omission of
which would jeopardise the prosecution, maintenance or protection of any of the
Intellectual Property Rights owned or used by the Company (other than
Intellectual Property Rights used or exploited by the Company pursuant to
Licences In) which are registered or the subject of an application for
registration.

 

   Applications

 

18.9 So far as the Seller is aware, there are no factors that would cause any
applications for registration of any Intellectual Property Rights to be
unacceptable to any body to which the application is being made.

 

   Licences In valid etc

 

18.10 The Licences In:

 

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  18.10.1 are valid and binding (so far as the Seller is aware) and nothing has
been done or not been done by the Seller, or, so far as the Seller is aware, by
any third party, as a result of which any of them has ceased or might cease to
be valid;

 

  18.10.2 have not been the subject of any breach or default by the Company or,
so far as the Seller is aware, any party or any event which, with the giving of
notice or lapse of time, would constitute a default by the Company;

 

  18.10.3 are not, and have not been, the subject of any claim, dispute or
proceeding, pending or threatened;

 

  18.10.4 have, where required, been duly recorded or registered; and

 

  18.10.5 have been fully paid up as at the Completion Date,

 

   and the Seller has no reason to believe that there is any cause for any
Licence In to come to an end or be restricted except in accordance with its
terms.

 

   No infringement etc

 

18.11 No Intellectual Property Rights (excluding for the avoidance of doubt any
Licence In) owned or used by the Company now or previously:

 

  18.11.1 have infringed or infringe the Intellectual Property Rights of any
third party; or

 

  18.11.2 have constituted or constitute of any duty of confidence, passing off
or actionable act of unfair competition; or

 

  18.11.3 have given or give rise to any obligation to pay any royalty, damages
or other sum.

 

18.12 So far as the Seller is aware, no activities of the Company or of any
licensee of the Company in respect of the Licences In:

 

  18.12.1 have infringed or infringe the Intellectual Property Rights of any
third party; or

 

  18.12.2 have constituted or constitute any breach of any duty of confidence;
or

 

  18.12.3 have constituted or constitute passing off or actionable act of unfair
competition; or

 

  18.12.4 have given or give rise to any obligation to pay any royalty.

 

   Change of control

 

18.13 No change of control of the Company will result in the termination of, or
materially affect, any of the Intellectual Property Rights set out in Parts 3
and 4 of Schedule 3 (Intellectual Property).

 

   Confidential information

 

18.14 In relation to rights in confidential information comprising Intellectual
Property Rights:

 

  18.14.1 all such confidential information is in the lawful possession of the
Company;

 

  18.14.2 the Company has not disclosed or permitted to be disclosed any such
information (other than to the extent necessary in the ordinary course of
business or for the purpose of disclosure to its professional advisers) to any
person except the Purchaser;

 

  18.14.3 the Company does not own rights in any confidential information which
may be capable of patent protection or which, if disclosed other than subject to
conditions of

 

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     confidentiality, might have a material adverse effect on any business
carried on by the Company;

 

  18.14.4 so far as the Seller is aware, no activity of any third party
constitutes or is likely to constitute any breach of any duty of confidence owed
to the Company; and

 

  18.14.5 no activity of the Company constitutes or is likely to constitute any
breach of any duty of confidence owed by the Company to any third party.

 

19. Information technology and telecommunications

 

   Definitions

 

19.1 In this Agreement:

 

   “IT Contracts” means any agreements, licences or other contractual
arrangements with third parties relating to the IT Systems or IT Services,
including licences of all software, leases of hardware and other procurement of
IT Systems or IT Services;

 

   “IT Services” means any services relating to the IT Systems or to any other
aspect of the Company’s data processing or other technology requirements,
including software development, support or maintenance, consultancy, source code
deposit, recovery and network services, facilities management or hardware
maintenance; and

 

   “IT Systems” means all computer programs (in both source and object code
form), computer hardware and peripherals, telecommunications and network
equipment owned, used, leased or licensed in by or to the Company.

 

   Ownership and control

 

19.2 All IT Systems material to the operation of the Company have been
identified in Part 1 of Schedule 4 (Information Technology).

 

   Operation

 

19.3 So far as the Seller is aware:

 

  19.3.1 all IT Systems are in good working order, function in accordance with
all applicable specifications and have been, and are being, properly and
regularly maintained and replaced;

 

  19.3.2 no part of the IT Systems has materially failed to function or has
otherwise materially interrupted or hindered the operation of the business of
the Company at any time during the 2 years prior to the date of this Agreement;
and

 

  19.3.3 all IT Services are being, and have been, provided in accordance with
all applicable specifications.

 

   Access

 

19.4 The Company has full and unrestricted access to, and use of, the IT Systems
and no third party agreements or consents are required to enable the Company to
continue such access and use following Completion.

 

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   Domain names

 

19.5 The Company is the registrant and beneficial owner of the domain names
specified in Part 2 of Schedule 4 (Information Technology) and those domain
names do not infringe the Intellectual Property Rights of any third party.

 

   Websites

 

19.6 All websites operated by the Company have been created or developed by the
Company or pursuant to IT Contracts that vest the legal and beneficial ownership
of all copyright and all other Intellectual Property Rights in such websites in
the Company and, so far as the Seller is aware, the content of the websites does
not infringe the Intellectual Property Rights of any third party.

 

   IT Contracts

 

19.7 The IT Contracts:

 

  19.7.1 are so far as the Seller is aware valid and binding and nothing has
been done or not been done as a result of which any of them has ceased or might
cease to be valid;

 

  19.7.2 have not been the subject of any breach or default by the Company or,
so far as the Seller is aware, any party and are not otherwise liable to be
adversely affected by the transactions contemplated by this Agreement; and

 

  19.7.3 are not, and have not been, the subject of any claim, dispute or
proceeding, pending or threatened.

 

19.8 The IT Contracts in relation to the software used in the Business are
listed in part 3 of Schedule 4, are licensed to the Company and have been fully
paid up to the Completion Date by the Company.

 

20. Legislation

 

20.1 So far as the Seller is aware the Company is not in breach of, nor has it
received notice of, nor is it aware of, any allegation of breach of, the
requirements of any legislation that is applicable to it.

 

21. Information

 

21.1 The information set out in Schedules 1 to 4 (inclusive) is complete, true,
accurate and not misleading. Insofar as any such information amounts to a
forecast or an expression of opinion, intention or expectation, such information
is, so far as the Seller is aware, fair and honest and made on reasonable
grounds.

 

22. Properties

 

22.1 The Properties comprise all the land owned, controlled, used or occupied by
the Company, and all the estates, interests or rights vested in the Company
relating to any land, at the date of this Agreement.

 

22.2 The Company has no liability (whether actual, contingent or otherwise) as
tenant, assignee, guarantor, covenantor or otherwise arising from or relating to
any estate, interest or right in any land other than the Properties.

 

22.3 The Company’s title to each Property for the estate or interest is as set
out in Schedule 2 and free from any Encumbrances, any agreements for sale or
lease, options or rights of pre-emption.

 

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22.4 Any Letting Documents to which any Property is subject are referred to in
Part 3 of Schedule 2. Otherwise the Company is in actual occupation of each of
the Properties on an exclusive basis and, except by virtue of the Letting
Documents, no person, other than the Company, has any right (actual or
contingent) to possession, occupation or use of or interest in the Properties.

 

22.5 Complete and accurate copies of all Leases and Letting Documents have been
Disclosed and the Company has not received notice or allegation of any breach of
any of the Leases or Letting Documents.

 

22.6 The documents of title relating to each Property consist of original
documents or properly examined abstracts, all of which are in the possession of
the Company or are unconditionally held to its order.

 

22.7 The Property held under the lease dated 4 December 2000 made between Burry
and Knight Limited (1) and Devlin Electronics Limited (2) has a water supply and
discharges effluent via adopted public service media.

 

22.8 The Seller is not aware of any disputes, claims, actions, demands or
complaints which are outstanding in relation to any Property and the Seller is
not aware of any notices materially affecting the Property have been given or
received.

 

22.9 The Property is not subject to any outgoings other than the uniform
business rate or water rates (and sums due under any Lease including rent,
insurance and service charge) and all such payments have been made to date.

 

22.10 The current use of each Property is as set out in column (5) of Part 1
Schedule 2 and the Company is not aware of any enforcement proceedings having
been commenced or notices served and no such proceedings or notices have been
proposed.

 

22.11 The Seller is not aware of any notice or allegation of any breach of any
laws, regulations, restrictions, covenants or obligations from any person.

 

22.12 So far as the Seller is aware, there is no outstanding order, notice or
other requirement of any local or other authority affecting the Property or
involving expenditure in compliance with it nor any circumstances which may
result in any such order or notice being made or served.

 

22.13 In relation to each Property where the Company’s tenure is leasehold:

 

  22.13.1 the current rent payable (being rent only) is set out in Part 1 of
Schedule 2. The last instalment of rent was paid to and was accepted by the
landlord without qualification; and

 

  22.13.2 all steps in rent reviews have been duly taken and no rent reviews are
or should be currently under negotiation or the subject of a reference to an
expert or arbitrator or the courts and, where appropriate, evidence of the
agreement or determination of the current rent has been placed with the
documents of title; and

 

  22.13.3 sections 24 to 28 Landlord and Tenant Act 1954 have not been excluded
in relation to the tenancy created by the Lease.

 

22.14 The lease dated 4 January 1993 between Openmen Limited (1) and Muirhead
Vactric Components Limited (2) was determined by effluxion of time. There are no
outstanding tenant’s liabilities under this lease.

 

22.15 There are no outstanding tenant’s liabilities under the agreement for
lease referred to in paragraph 1.2.10 of the Second Schedule of the lease dated
4 December 2000 made between Burry and Knight Limited (1) and Devlin Electronics
Limited (2).

 

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22.16 The Seller is not aware of any unusual or otherwise onerous conditions
contained in Planning consents 0065823 relating to the Property at Southall and
65823 30/03/1999 relating to the Property at Ringwood which prevent the existing
use of those properties.

 

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Part 2

Taxation Warranties

 

23. General

 

23.1 Provision or reserve has been made in the Accounts in accordance with
UK GAAP for all Taxation liable to be assessed on the Company or for which the
Company is accountable (whether primarily or otherwise) in respect of all
income, profits or gains earned, accrued or received on or before the Balance
Sheet Date or deemed to have been or treated as earned, accrued or received for
Taxation purposes on or before the Balance Sheet Date and/or in respect of any
event occurring or deemed to have occurred on or before the Balance Sheet Date,
including distributions made on or before the Balance Sheet Date or provided for
in the Accounts.

 

23.2 Provision has been made in the Accounts for deferred Taxation in accordance
with UK GAAP.

 

24. Payment of Tax

 

24.1 The Company has properly paid all Taxation prior to Completion which it has
become liable to pay prior to Completion and it has not within the last six
years paid or become liable to pay, nor so far as the Seller is aware are there
any circumstances which may cause it to become liable to pay, any penalty, fine,
surcharge or interest in connection with Taxation.

 

24.2 All payments by the Company to any person which ought to have been made
under deduction or withholding of Taxation have been so made and the Taxation so
deducted or withheld has been properly and punctually accounted to the relevant
Taxation Authority.

 

25. Compliance

 

25.1 In the six years prior to Completion, the Company has made all returns,
claims for relief, applications, notifications, computations, reports, accounts,
statements, registrations and assessments (whether physically in existence or
electronically stored) (“Returns”) it is required by law to make. All Returns
have been properly submitted by the Company within any relevant time limits to
each relevant Taxation Authority and the Returns so far as the Seller is aware
give full disclosure of all material facts and circumstances and so far as the
Seller is aware are not likely to be the subject of any question or dispute with
any Taxation Authority.

 

25.2 In the six years prior to Completion, the Company has prepared, kept and
preserved sufficient records to enable it to make and complete returns for
Taxation purposes and to calculate the liability to Taxation or the amount of a
Relief arising on the disposal of any asset owned at the Balance Sheet Date or
acquired since the Balance Sheet Date but before Completion and otherwise as
required by law.

 

25.3 The Disclosure Letter contains details so far as they affect the Company of
all arrangements with any Taxation Authority current at Completion that are not
based on a strict application of the law relating to Taxation (other than
published extra-statutory concessions, statements of practice and statements of
a similar nature) and so far as the Sellers is aware no such arrangement is
liable to be withdrawn for any reason.

 

25.4 The Company is not in dispute with any Taxation Authority and so far as the
Seller is aware there are no circumstances that exist which are likely to give
rise to any such dispute. No Taxation Authority has, within the past 12 months,
investigated or indicated in writing that it may investigate the Company’s
Taxation affairs and so far as the Seller is aware the Company is not subject to
any ongoing investigation.

 

25.5 All particulars furnished to any Taxation Authority in connection with an
application for any consent or clearance made on behalf of or affecting the
Company during the last six years were made to the appropriate office, section,
department or body and disclosed all material facts,

 

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circumstances and (where appropriate) law material to the decision of the
relevant Taxation Authority and any such consent or clearance given remains
valid and effective and any transaction for which such consent or clearance has
previously been obtained has been carried into effect (if at all) in all
material respects in accordance with the terms of the relevant application,
consent or clearance.

 

26. Taxation Claims Reliefs and Liabilities

 

26.1 In the six years prior to Completion, no Company pursuant to an indemnity,
guarantee or covenant other than in the ordinary course of its trade and
relating to the sale of capital assets subject to the TCGA provisions or shares
has agreed to meet or pay a sum equivalent to or by reference to another
person’s liability to Taxation.

 

26.2 There is no charge referred to in section 237 Inheritance Tax Act 1984
outstanding in respect of any asset of the Company or the Shares.

 

27. Corporation Tax/Capital Allowances

 

27.1 The Disclosure Letter sets out full particulars of all claims and elections
made (or assumed in the Accounts to be made) under Sections 152, 162, 175 or
179B of the TCGA and paragraphs 40, 56, 65 or 67 Schedule 29 Finance Act 2002
insofar as they could affect the chargeable gain or allowable loss which would
arise in the event of a disposal after the Completion Date by the Company of any
of its assets.

 

27.2 The Company has not since the Balance Sheet Date made any distribution
within the meaning of section 209 TA 88 (meaning of “distribution”) save for any
dividend disclosed in the Accounts nor is it bound to make such a distribution.

 

27.3 In the six years prior to Completion, the Company has not at any time
repaid, redeemed or repurchased or agreed to repay, redeem or repurchase or
granted an option under which it may become liable to purchase any shares of any
class of its issued share capital nor has the Company capitalised or agreed to
capitalise in the form of shares or debentures any profits or reserves of any
class or description or otherwise issued or agreed to issue any share capital
other than for receipt of new consideration (within the meaning of Part VI TA
88) or passed or agreed to pass any resolution to do so.

 

27.4 In the six years prior to Completion , no rents, interest, annual payments
or other sums of an income nature paid or payable by the Company or which the
Company is under an existing obligation to pay in the future are or may be
wholly or partially disallowable as deductions, management expenses or charges
in computing profits for the purposes of corporation tax to the extent that they
have been reflected as allowable deductions, management expenses and charges in
tax returns submitted prior to Completion.

 

27.5 Under current law, all expenditure which the Company has incurred in the
six years prior to Completion or may incur under any subsisting commitment on
the provision of machinery, plant or buildings has qualified or will qualify (if
not deductible as a trading expense for trade carried on by the Company) for
writing-down allowances or industrial building allowances (as the case may be)
under CAA to the extent that it has been reflected as qualifying expenditure in
tax returns submitted prior to Completion. In relation to expenditure incurred
but for which no claim has been made a claim made in the Company’s next
corporation tax self assessment return for such allowances in respect of such
expenditure would not be barred by virtue of section 58(4), CAA.

 

27.6 The Company has not in the past six years incurred any long-life asset
expenditure within the meaning of section 90, CAA.

 

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27.7 None of the assets of the Company expenditure on which has qualified for a
capital allowance under Part 3, CAA in the past six years has at any time been
used otherwise than as an industrial building or structure.

 

28. Close Companies

 

28.1 The Company is not nor has it been in the last six years a close company
within the meaning of sections 414 and 415 TA 88.

 

29. Tax Avoidance

 

29.1 The Company has not entered into or so far as the Seller is aware been a
party to any scheme, arrangement or transaction designed wholly or mainly, for
the purpose of avoiding or reducing a liability to Taxation.

 

29.2 The Company has not been party to any arrangements, transaction or series
of transactions which it has or may become liable to notify to any Tax Authority
under any legislation requiring the disclosure of tax avoidance schemes.

 

30. Value Added Tax

 

30.1 Each Company has, throughout the whole of the period beginning three years
before the Balance Sheet Date and ending on the date hereof, been registered and
been eligible to be registered and is a taxable person for the purposes of the
VATA and such registration is not subject to any conditions imposed by or agreed
with HM Revenue and Customs (“HMRC”)

 

30.2 Each Company has complied with the terms of all statutory provisions,
regulations, directions, conditions, notices and agreements with HMRC relating
to VAT. The Company has not been required by HMRC to give security.

 

30.3 All supplies of goods and services made by the Company are taxable supplies
for the purposes of the VATA and all input tax is deductible in accordance with
the provisions of sections 25 and 26 VATA.

 

30.4 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 has no
obligation to make such an election.

 

30.5 The Company does not own any assets which are capital items subject to the
Capital Goods Scheme under Part XV of the VAT Regulations 1995.

 

31. Share Schemes/Restricted Securities

 

31.1 The Company has not established (or is a participant in) any bonus, share
option, profit related pay or other scheme or arrangement, whether or not
approved by HMRC, for the benefit of its current or former officers or employees
or any of them.

 

32. International

 

32.1 The Company was incorporated in and is and for the six years prior to
Completion has been resident only in the United Kingdom for Taxation purposes
and for the purposes of any double taxation agreement. The Company is not liable
to, and has at no time in the past six years incurred any, or is required to be
registered for any Taxation in any jurisdiction other than the United Kingdom or
had a branch outside the United Kingdom or any permanent establishment (as that
expression is defined in the respective double taxation relief orders current at
the date of this Agreement) outside the United Kingdom.

 

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32.2 The Company has not without the prior consent of HM Treasury, or without
having duly provided the required information to HMRC, carried out or agreed to
carry out any transaction (including under section 765 TA 88) which would be
unlawful in the absence of such consent and has, where relevant, complied with
the requirements of section 765 A(2) TA 88 (supply of information on movement of
capital within the EU) and any regulations made or notice given by that section.

 

33. Non-Arm’s Length Transactions

 

33.1 The Company has not in the period of six years ending on the date of this
Agreement been party to any non-arms length transaction or been party to any
transaction or arrangement to which the provisions of section 770A and Schedule
28AA TA 88 may apply. So far as the Seller is aware, the Company will not
receive any payment for an asset or any services or facilities of any kind that
it has supplied or provided or is liable to supply or provide which is less than
the market value of that asset or those services or facilities.

 

33.2 So far as the Sellers are aware, the Company has not at any time within the
last six years transferred any asset for less than market value in circumstances
where the provisions of section 17 TCGA apply to that transfer.

 

34. Groups of Companies

 

34.1 The Company has not in the past six years been a 51 per cent subsidiary of
any person within the meaning of section 838 TA 88 (subsidiaries) other than a
51 per cent subsidiary of AID Inc. or the Seller.

 

34.2 The Company has not at any time during the last six years acquired any
asset from any company which at the time of the acquisition was a member of the
same group of companies as defined in section 170 TCGA;

 

34.3 The Company has not since the Balance Sheet Date ceased to be a member of a
group of companies in such circumstances that a profit or gain was deemed to
accrue to it under section 178 or 179 TCGA;

 

34.4 In the six years prior to Completion, there has been no reallocation of Tax
to the Company from the Seller or a member of the Seller group of companies
pursuant to Sections 171A, 175, 179A or 179B of TCGA or paragraph 66 of Schedule
29 FA 2002 and no amount in consideration of a similar reallocation is owed by a
Company to any other person (other than another Company).

 

35. Stamp Duties

 

35.1 There is no instrument to which the Company is a party and which is
necessary to establish the Company’s rights or the Company’s title to any asset,
which is liable to stamp duty and which has not been duly stamped, or which
would attract stamp duty, interest or penalties if brought into the United
Kingdom.

 

35.2 Within the 3 years ending on the date of this Agreement, the Company has
not made any claim for relief, exemption or deferral of stamp duty, stamp duty
land tax or stamp duty reserve tax.

 

35.3 The Company is not nor may become liable to pay stamp duty land tax after
Completion by reference to any land transaction, as defined in section 43 FA
2003, to which it has been a party prior to Completion.

 

36. Group Payment Arrangements

 

36.1 The Company has not entered into any group payment arrangements under the
provisions of section 36 FA 1998.

 

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Schedule 7

Limitation of Seller’s liability

Subject as provided in clause 7, the following provisions shall apply:

 

1. General limitations

 

1.1 The Seller shall not be liable:

 

  1.1.1 under the Warranties to the extent that the facts which might result in
a claim or possible claim under the Warranties were Disclosed;

 

  1.1.2 under the Indemnities or the Warranties or the Tax Deed to the extent
that the subject of the claim is specifically provided for in the Working
Capital Statement or the Completion Tax Statement;

 

  1.1.3 under this Agreement to the extent that the claim (other than in
relation to the Tax Warranties) arises or is increased:

 

  (a) as a result of an act or omission on the part of the Seller occurring at
the written request of the Purchaser after Completion;

 

  (b) as a result of an act or omission of or at the direction of the relevant
Company or the Purchaser after Completion (otherwise than in the ordinary course
of trading or under a legally binding obligation of the relevant Company created
before Completion or in order to ensure compliance with the law);

 

  (c) wholly or partly as a result of (i) the passing or coming into force of or
any change in any enactment, law, regulation, directive, requirement or any
published practice having legal effect of any government, government department
or agency or regulatory body (including extra-statutory concessions of HM
Revenue and Customs) after Completion, whether or not having retrospective
effect or (ii) except as set out in clause 16.1, any change in the basis or
method of calculation of, or of increase in the rates of, Taxation made or
imposed by legislation after Completion with effect to any period ending before
Completion;

 

  1.1.4 under this Agreement to the extent that the Purchaser has recovered any
amount under the Tax Deed or otherwise under this Agreement in respect of the
same loss, damage or deficiency;

 

  1.1.5 the Seller shall not be liable in respect of any claim under the
Warranties (other than the Tax Warranties) or under the Indemnity in clause
6.5(a) to the extent that the claim arises or is increased as a result of any
change after Completion in the accounting bases, policies, practice or methods
applied in preparing any accounts or valuing assets or liabilities of any
Company from those used in preparing the Accounts unless such change was
required in order to ensure compliance with the law or with UK GAAP.

 

2. Quantum

 

2.1 The liability of the Seller in respect of any claim under the Warranties or
the Indemnity in clause 6.5(i) shall not arise unless and until the amount of
such claim when aggregated with the amount of any other claim made against the
Seller under the Warranties or such Indemnity exceeds £400,000 in which event
all of such claim or claims (and not just the excess) shall be recoverable and
no minimum shall apply to any subsequent claims (but for the avoidance of

 

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doubt this paragraph shall not prevent a claim from being validly notified
pursuant to paragraph 3.1).

 

2.2 The liability of the Seller in respect of any claim under the Warranties
(excluding the Tax Warranties and the Warranties in paragraphs 2.7 (Solvency),
6.1 (Loans and Debts) and 8 (Environment) of Schedule 6) shall not (when
aggregated with the amount of all other such claims) exceed 30% of the
Consideration.

 

2.3 Without prejudice to paragraph 2.2 above, the liability of the Seller in
respect of any claim under this Agreement, the Tax Warranties or under the Tax
Deed shall not (when aggregated with the amount of all other claims under this
Agreement and under the Tax Deed) exceed the amount of the Consideration.

 

3. Time limits

 

3.1 The liability of the Seller in respect of any claim under the Warranties or
under the Tax Deed shall cease:

 

  3.1.1 in the case of any claim the subject matter of which relates to
Taxation, at the close of business on the seventh anniversary of Completion;

 

  3.1.2 in the case of any claim under paragraph 8 (Environment) of Schedule 6,
at the close of business on the fifth anniversary of Completion; and

 

  3.1.3 in the case of any other claim, at the close of business on the day
which falls 18 months after Completion.

except in respect of matters which before that period expires have been the
subject of a bona fide written claim made by or on behalf of the Purchaser to
the Seller.

 

3.2 The Purchaser shall provide to the Seller reasonable details of the factual
matters giving rise to the claim including, where possible, the Purchaser’s best
estimate of the amount of the claim.

 

3.3 Any such claim shall (if it has not previously been satisfied, settled or
withdrawn) be deemed to have been withdrawn unless:

 

  (a) legal proceedings in respect of it have been commenced by both being
issued and served within 9 months of such notification to the Seller; or

 

  (b) the Seller and the Purchaser have agreed in writing to extend the 9 month
period, in which case this paragraph 3.3 shall apply to that claim with the
substitution of that extended period.

 

4. Conduct of Claims

 

4.1 As soon as reasonably practicable after the Purchaser becomes aware of any
claim made or threatened which does or may result in a claim under the
Warranties (other than the Tax Warranties) or the Indemnity in clause 6.5(i),
the Purchaser will notify the Seller of that matter (a “Relevant Matter”)
(indicating the nature of the allegations made). If the Seller is notified of a
Relevant Matter made or threatened to be made against the Purchaser or a Company
(each an “Indemnified Party”), the Seller shall provide the Indemnified Party
with such information and assistance in relation to the matter giving rise such
Relevant Matter as it may reasonably require provided that the Indemnified Party
shall and shall procure that its Affiliates and professional advisers shall keep
confidential all information so provided. If the Seller is restricted from
providing such information due to confidentiality obligations with a third
party, the Seller shall use all reasonable endeavours to procure the release of
such obligation for the purposes of providing the Purchaser or a Company with
the required information.

 

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4.2 Subject to the Purchaser and the relevant Company being indemnified and
secured to the Purchaser’s reasonable satisfaction, the Purchaser shall or shall
procure that the Company shall:

 

  4.2.1 at reasonable intervals keep the Seller informed of the progress of the
Relevant Matter and where the Seller reasonably considers its involvement might
lead to a more beneficial settlement of the Relevant Matter for the Purchaser
and the Company, involve the Seller in discussions, strategy meetings and
contact with the party bringing or threatening the Relevant Matter (without cost
to either the Purchaser or the Company);

 

  4.2.2 (at the cost of the Seller) provide the Seller with copies of such
documentation relating to the Relevant Matter as the Seller may reasonably
request; and

 

  4.2.3 maintain reasonable consultation with the Seller regarding the Relevant
Matter and take its views, insofar as they are reasonable, into account.

 

4.3 Subject to paragraph 4.4, in relation to a claim made or threatened against
the Purchaser or a Company that will or may give rise to liability under any
Indemnity, or any other such claim in respect of which the Seller undertakes to
indemnify and hold harmless the Purchaser as if such claim was the subject of an
Indemnity (each a “Third Party Claim”), the Purchaser shall, subject to the
Purchaser and the relevant Company being indemnified and secured to the
Purchaser’s reasonable satisfaction, and subject to paragraph 4.3.3 below:

 

  4.3.1 take such action as the Seller may reasonably request to:

 

  (a) avoid, dispute or defend; or

 

  (b) appeal or compromise,

 

  the Third Party Claim;

 

  4.3.2 permit the Seller reasonable access at reasonable times to the employees
and premises of the Purchaser to ask reasonable questions provided that the
Seller shall, and shall procure that its professional advisers shall, keep
confidential all matters so examined, and provided that the Purchaser may
require the Seller to pay a reasonable fee for the time of the employees of the
Purchaser spent in connection with such examination;

 

  4.3.3 For the purpose of this clause 4.3:

 

  (i) the appointment of solicitors or other professional advisers shall be
subject to the approval of the Purchaser such approval not to be withheld or
delayed unreasonably;

 

  (ii) the Purchaser shall be kept fully informed of all relevant matters and
shall be entitled to see copies of all correspondence relating to any such
action, negotiations or proceedings; and

 

  (iii) the Seller shall not make any settlement of or compromise the Third
Party Claim nor agree any matter in the conduct of any such action, negotiations
or proceedings which is likely to affect the amount of the claim or the future
liability of the Purchaser without the prior written approval of the Purchaser,
such approval not to be withheld or delayed unreasonably.

 

4.4 The provisions of paragraph 4.3 shall apply to any claim made or threatened
against the Purchaser or a Company that will or may give rise to liability under
the Indemnity in clause 6.5(i) (a “L/B Claim”), in lieu of the provisions of
paragraph 4.2, if the Seller reasonably considers that such L/B Claim will give
rise to a liability on the part of the Seller

 

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notwithstanding paragraph 2.1 above, provided that in exercising its conduct
rights under paragraph 4.3 the Seller shall use reasonable endeavours to
mitigate the relevant Company’s liability in respect of such L/B Claim.

 

4.5 Pending the Seller acquiring rights of conduct in respect of a L/B Claim
pursuant to paragraph 4.4, the Purchaser shall (and shall procure that the
relevant Company shall) use reasonable endeavours to mitigate such Company’s
liability in respect of such L/B Claim.

 

5. Recovery from Third Parties

 

5.1 Where the Purchaser and/or the relevant Company is or is likely to be
entitled to recover from some other person (including any insurer) any sum in
respect of any matter giving rise to a claim for breach of the Warranties (other
than the Tax Warranties), or under any Indemnity, then the Purchaser shall at
the request of the Seller and subject to the Seller giving to the Purchaser
security in terms satisfactory to the Purchaser (acting reasonably) on an
indemnity basis in respect of its costs and expenses, taxes, which may be
incurred (including, in relation to a claim under against any insurer, any
increase in premium on a renewal of the relevant insurance policy) procure that
reasonable steps are taken to enforce such recovery and if any sum is so
recovered then either the amount payable by the Seller in respect of the claim
shall be reduced by an amount equal to the sum so recovered (less the reasonable
costs and expenses of recovering it and any taxation payable by the Purchaser or
the Company as a result of its receipt) or (if an amount shall already have been
paid by the Seller in respect of that claim) there shall be repaid to the Seller
an amount equal to the amount so recovered (less the reasonable costs and
expenses of its recovery and any taxation payable by the Purchaser or the
Company as a result of its receipt) or (if less) the amount of the Seller’s
payment PROVIDED ALWAYS the Purchaser shall not be obliged to take such steps to
recover if to do so would (in the reasonable opinion of the Purchaser) cause
material damage to the goodwill or business of the relevant Company nor shall
the Purchaser’s obligations under this paragraph restrict or delay in any way
the Purchaser’s right to bring a claim against the Seller.

 

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Schedule 8

Working Capital Adjustment

 

1. Preparation of Working Capital Statement

 

1.1 As soon as reasonably practicable after Completion, the Purchaser shall
prepare a draft Working Capital Statement for the Companies in the form set out
in Schedule 10.

 

1.2 The Seller shall procure that the Purchaser has access (without charge),
through its employees, agents and advisers, to all relevant files and/or working
papers (with the right to take copies at the Purchaser’s expense) in their
possession or control (but not in the possession of any Company), to the extent
that they are reasonably required in connection with the preparation of the
Working Capital Statement and subject to the Purchaser providing the Seller’s
advisers with such undertaking as are reasonably requested.

 

1.2 The draft Working Capital Statement shall be prepared as at the opening of
business on the date of Completion in accordance with the principles set out in
this Schedule.

 

1.3 The Purchaser shall procure that the draft Working Capital Statement is
submitted to the Seller for review by the Seller within 60 Business Days after
Completion. The Purchaser shall procure that each Company gives the Seller (and
its respective employees, agents and advisers) without charge access to all
relevant files and/or working papers (with the right to take copies at the
Seller’s expense) in such Company’s possession or control to the extent they are
reasonably required for the purposes of the Seller’s review of the draft Working
Capital Statement and subject to the Seller providing the Purchaser’s advisers
with such undertakings as are reasonably requested.

 

1.4 The Parties shall pay their own respective costs in connection with the
preparation of the Working Capital Statement.

 

1.5 The draft Working Capital Statement shall be deemed to have been accepted as
the Working Capital Statement and no dispute may be raised in relation to it
unless, within 30 Business Days of it being received by the Seller, the Seller
delivers to the Purchaser notice to the contrary specifying (i) the item or
items disputed; (ii) the Seller’s reasons; and (iii) how the draft Working
Capital Statement and the Provisional Consideration should be adjusted (the
“Dispute Notice”). Only those item(s) and amount(s) listed in the Dispute Notice
shall be treated as being in dispute. If the Purchaser and the Seller resolve
the item(s) raised in the Dispute Notice in the 15 Business Days following
receipt of the Dispute Notice, the draft Working Capital Statement (adjusted, if
necessary, as agreed by the Purchaser and the Seller) will be deemed to have
been accepted by the Parties as the Working Capital Statement.

 

1.6 If the Seller and the Purchaser are unable to reach agreement within 15
Business Days of the Dispute Notice, the item(s) and amount(s) in dispute may,
at the written election of the Seller or the Purchaser, be referred to the
decision of PricewaterhouseCoopers or, if they are unwilling or unable to act,
an independent chartered accountant (the “Independent Accountant”) to be
appointed (in default of nomination by agreement between the Seller and the
Purchaser) by the President for the time being of the Institute of Chartered
Accountants in England and Wales on the written application of the Seller or of
the Purchaser (whichever applies first).

 

1.7

The Independent Accountant shall act as an expert and not as an arbitrator and
neither the Arbitration Act 1996 nor any earlier or later enactments on
arbitration shall apply. The Independent Accountant shall be instructed to
adjudicate only upon the matters in dispute, and in no event shall any
determination made by the Independent Accountant award to the Purchaser an
amount greater than that claimed by the Purchaser, or award to the Seller an
amount greater than that claimed by the Seller. The Independent Accountant’s
decision shall (in the absence of manifest error) be final and binding on the
Parties for all the purposes of this Agreement. The draft Working Capital
Statement, as adjusted (if necessary) to reflect the

 

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Independent Accountant’s final and binding decision, will be deemed to have been
accepted by the Parties as the Working Capital Statement.

 

1.8 The costs of the Independent Accountant shall be apportioned between the
Parties as the Independent Accountant shall decide but each Party shall be
responsible for its own costs of presenting its case to the Independent
Accountant.

Basis for preparation of the Working Capital Statement

PART A: Accounting policies, principles, practices, bases and methodologies

The Working Capital Statement for the Companies shall:

 

1. be prepared strictly in accordance with the specific overriding accounting
principles, practices and policies set out in Part B (Specific accounting
principles, practices and policies) of this Schedule;

 

2. subject to paragraph 1 above, be prepared using the accounting principles,
practices and policies of the Companies applied in accordance with bases and
methodologies consistent with the preparation of the US GAAP Accounts; and

 

3. subject to paragraphs 1 and 2 above, be prepared under generally accepted
accounting principles and financial reporting and accounting standards in the
United States of America in issue and applicable at the Completion Date.

PART B: Specific accounting principles, practices and policies

The Working Capital Statement shall be prepared:

 

  1. as if the date to which the Working Capital Statement is made up were the
last day of a financial year;

 

  2. (except as expressly provided in this Agreement) so as to include no
charge, provision, reserve or write-off in respect of any costs, liabilities or
charges to be incurred after the date to which the Working Capital Statement is
made up as a consequence of the change of ownership of the Companies or closure
of any business (or part thereof) which results from the change of ownership
(provided that the valuation of a business, and its assets, shall be conducted
in the context of the relevant business at Completion without taking into
account any change of ownership thereof or the Purchaser’s intentions with
respect to the conduct of any business after Completion);

 

  3. so as to take no account of the costs of the Seller or the Purchaser in
relation to this Agreement (including, without limitation, the costs of the
preparation, delivery, review and resolution of the Working Capital Statement);

 

  4. (except as specified in Schedule 10) such that the rate of exchange for
conversion between relevant currencies and sterling shall be as set out in
clause 1.2.12 of this Agreement;

 

  5. after the day which is the earlier of (i) the completion by the Seller of
its financial reporting requirements or (ii) 14 November 2008, the Purchaser
shall arrange for a physical stock take to take place at the premises of each
Company. The Seller, Graham Payne and Deloittes (the “Seller’s Accountants”)
shall be permitted access to attend at the time the Purchaser determines for the
physical count at each premises and to perform such sample test counts as they
may reasonably request. The following counting procedure shall apply:

 

Andover

   –    Full physical inventory

 

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Penge Motion

   –    Raw materials and sub assemblies – all items with a net book value after
provisions in excess of £1,000

Penge Motion

   –    WIP and finished goods – all items

Penge Avionics

   –    Raw materials and sub assemblies – all items with a net book value after
provisions in excess of £1,000

Penge Avionics

   –    WIP and finished goods – all items

Heathrow Avionics

   –    Raw materials and sub assemblies – all items with a net book value after
provisions in excess of £1,000

Heathrow Avionics

   –    WIP and finished goods – all items

Traxsys

   –    Raw materials and sub assemblies – all items with a net book value after
provisions in excess of £1,000

Traxsys

   –    WIP and finished goods – all items

Items not counted according to this policy will be valued under existing
accounting policies.

 

  6. so as to include (on the same basis as in the calculation of the Estimated
Working Capital) a provision in respect of accrued holiday pay for Graham Payne
(and disregarding for this purpose the Payne Compromise Agreement).

 

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Schedule 9

List of documents in the agreed form

 

1. Tax Deed

 

2. Directors’ resignations (Schedule 5 paragraph 1 (Completion Obligations))

 

3. Powers of attorney (Schedule 5 paragraph 1 (Completion Obligations))

 

4. US GAAP Accounts (clause 1.1 (Definition of “US GAAP Accounts”))

 

5. Schedule of outstanding and unpaid cheques (clause 1.1 (Definition of
“Cash”))

 

6. Deeds of Assignment

 

7. Releases

 

8. Traxsys Supply Agreement

 

9. Resolution to change the name of AIDL

 

10. s.l79 joint elections (Schedule 5 paragraph 1 (Completion Obligations))

 

11. Payne Compromise Agreement

 

12. Estimated Working Capital

 

13. Accounts

 

14. Esterline Reorganisation Step Plan

 

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Schedule 10

Form of Working Capital Statement

Actual Cash Balance

Accounts receivable

Inter Affiliate Receivables

Bad debt provision

Unbilled

Accounts receivable other

Net external

Inventory

Raw materials

Work in progress

Finished goods

Less progress payments

Total

Prepaid expenses

Other current assets

Total current assets

Current Liabilities

Actual Borrowing Amount

Accounts payable

Inter Affiliate Payables

Accrued expenses

Accrued payroll related

Payroll

Total current liabilities

Net Working Capital

Plus Transitional Services:

Life, PHI and BUPA for two months (or for such other period as services
provided)

Salary and wages for Olivier Cuq for two months (or for such other period as
services provided)

Salary and wages and benefits for Richard LaMantia for two months (or for such
other period as services provided)

Plus:

£98,700 being the Purchaser contribution to Retention Bonuses

Actual Working Capital

Notes:

 

•  

Capitalised expressions shall have the meanings given to them in this Agreement.

 

•  

For the avoidance of doubt, Ordinary Trading Items will be included and Tax
liabilities, and any Incentive Bonus payments (including in respect of Graham
Payne) shall be excluded from the Working Capital Statement.

 

•  

The line items Inter Affiliate Receivables and Inter Affiliate Payables shall
respectively include Inter-Company Receivables and Inter-Company Payables as
defined in this Agreement.

 

•  

Accrued amounts due in respect of Transitional Services to be added to working
capital and included in final payment under clause 3 (such payment being deemed
to be made by Purchaser on behalf of the relevant Company).

 

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•  

The amounts included for transitional services shall (where applicable) be
converted into pounds sterling at the average exchange rate for the period
during which such Transitional Services were provided.

 

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Schedule 11

Transitional Services

Services

Non UK Employee Services- payroll and benefits:

The Seller shall provide or procure (but as regards persons outside the Retained
Group, only so far as it is able) the provision of the following services to the
relevant Company:

 

•  

Provision and management of salaried payroll and benefits in relation to Richard
LaMantia (based in the USA) and Olivier Cuq (based in France) (together the
“Non-UK Employees”) (on the same basis as provided as at the date of this
Agreement) for a period of up to 60 days after Completion

The Seller will maintain or procure the maintenance of all necessary personnel
and payroll records and pay any associated payroll tax to the appropriate
government agency or body. The Seller will process the recovery of any
overpayments made during the period up to and including the relevant Services
Termination Date and will liaise with human resources at the relevant Company as
required.

The Seller shall issue to the Company an invoice relating to payments to be
administered by the Seller on the Company’s behalf in relation to PAYE, national
insurance contributions and pensions contributions not less than 5 Business Days
before the date upon which the Seller is obliged to pass such payments on (the
“Payroll Payment Date”). The invoices submitted by the Seller above shall be
settled pursuant to clause 3.2 and Schedule 10 or, to the extent not included in
Schedule 10, in cleared funds by the Company no less than 2 Business Days before
the relevant Payroll Payment Date.

Graham Payne Consultancy Arrangement

The Seller shall procure (so far as it is able) that Graham Payne provides
consultancy services to the Companies as follows:

 

(a) Graham shall perform, on a non-exclusive basis, general management services
for the Companies with a view to ensuring a smooth handover of the Business,
including but not limited to: (i) provision of services relating to the day to
day management of the Business performed in a manner consistent with his
performance and responsibilities during the 6 month period prior to Completion;
and (ii) support in connection with the transitioning of responsibilities to the
manager appointed by the Purchaser; and (iii) introduction of the appointed
manager to key customers and suppliers; and (iv) ensuring continued services (IT
and HR) from the Retained Group in accordance with this Schedule until the
services are transitioned to the Companies (“Consultancy Services”);

 

(b) During the period of the Consultancy Services, Graham shall report directly
to Richard Madamba;

 

(c) Graham shall be required to perform the Consultancy Services for a period of
40 days from Completion (the “Consultancy End Date”) as follows:

 

  (i) Graham will provide the Consultancy Services on a full time basis for a
period of 15 Business Days post Completion (“Initial Period”);

 

  (ii) for the period from the end of the Initial Period until the Consultancy
End Date (“Second Period”), Graham shall provide such reasonable assistance to
the Companies as requested by the Companies or the Purchaser. Provided that this
assistance shall be by telephone or email, and Graham shall not be required to
attend

 

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     the Properties in person other than by prior agreement between Graham and
the Purchaser;

The Purchaser shall procure that Graham is reimbursed promptly for all
reasonable out of pocket expenses properly incurred in providing the Consultancy
Services.

Employee Services – UK Life/Medical Insurance:

Provision and continuation of life, medical and income protection insurance
under the existing policies for all UK employees of the Companies until the
termination date of the relevant existing policy.

Employee Services – Peoplesoft System:

Full access by the relevant Company (to already trained HR personnel) to the
HRIS system “Peoplesoft” licensed by the Retained Group for a period of 60 days
after Completion in relation to the employees of the Companies including access
to review data and download files and data in relation to such employees.

Website Services:

Hosting and management by the Seller (on the same basis as hosted as at the date
of this Agreement (including as to service levels)) for a period of up to 180
days after Completion of the following two websites pending establishment of
alternative hosting arrangements:

muirheadaerospace.com

traxsys.com

This shall include, but shall not be limited to:

 

•  

removal of all branding in relation to and references to the Retained Group as
requested by the Purchaser and inclusion on the website of the Ametek name and
logo and other Ametek corporate branding requirements as provided by the
Purchaser; and

 

•  

inclusion of links to Ametek group or other websites as may reasonably be
required by the Purchaser.

The Purchaser shall procure that the relevant members of its group establish
alternative hosting arrangements for the websites as soon as reasonably
practicable after Completion.

Email Security Services – Postini (Google Message Security) System:

Full use and access, for a period of up to 30 days after Completion, to the
Postini (now Google) software currently used by AIDL and Muirhead.

 

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Signed by Robert W. Cremin

 

)

  

for and on behalf of

 

)

  

ESTERLINE TECHNOLOGIES LIMITED

 

)

  

/s/    Robert W. Cremin

Duly authorised

 

Signed by Robert W. Cremin

 

)

  

for and on behalf of

 

)

  

ESTERLINE TECHNOLOGIES CORPORATION

 

)

  

/s/    Robert W. Cremin

Duly authorised

 

Signed by John J. Molinelli

 

)

  

for and on behalf of

 

)

   /S/    John J. Molinelli

EMA HOLDINGS UK LIMITED

 

)

  

 

Duly authorised

 

Signed by William D. Eginton

 

)

  

for and on behalf of

 

)

   /S/    William D. Eginton

AMETEK, INC

 

)

  

 

Duly authorised

 

84