Exhibit
10.1


 


DATED 18 DECEMBER 2009


 


 


(1)  GRACE CONSTRUCTION PRODUCTS LIMITED


 


(2)  CHASE PROTECTIVE COATINGS LIMITED


 


(3)  
DAREX UK LIMITED


 


(4)     CHASE CORPORATION


 


 










 


Asset Purchase Agreement


 










 


 


Mundays LLP


Cedar House


78 Portsmouth Road


Cobham


Surrey KT11 1AN


 


Tel: +44 (0) 1932 590500


Fax: +44 (0) 1932 590220


 


Ref:PW01/8875/27/1654690


 

















 


	
  1.

  	
  Interpretation

  	
  2

  
	
  2.

  	
  Agreement
  to Sell and Purchase

  	
  18

  
	
  3.

  	
  Purchase
  Price and Payment

  	
  20

  
	
  4.

  	
  Set Off

  	
  21

  
	
  5.

  	
  Completion

  	
  21

  
	
  6.

  	
  Warranties

  	
  21

  
	
  7.

  	
  Limitations
  on Claims

  	
  22

  
	
  8.

  	
  Risk and
  Insurance

  	
  23

  
	
  9.

  	
  Apportionments
  and Prepayments

  	
  23

  
	
  10.

  	
  Liabilities
  of the Seller and the Buyer

  	
  24

  
	
  11.

  	
  VAT

  	
  25

  
	
  12.

  	
  Indemnities

  	
  26

  
	
  13.

  	
  The
  Employees

  	
  26

  
	
  14.

  	
  The
  Business Contracts

  	
  30

  
	
  15.

  	
  Future
  Trading and Trade Enquiries

  	
  33

  
	
  16.

  	
  Book
  Debts

  	
  34

  
	
  17.

  	
  Data
  Protection

  	
  35

  
	
  18.

  	
  Restrictive
  Covenants

  	
  35

  
	
  19.

  	
  Confidentiality
  and Announcements

  	
  37

  
	
  20.

  	
  Conduct
  of Indemnity Claims

  	
  39

  
	
  21.

  	
  Guarantees

  	
  41

  
	
  22.

  	
  Further
  Assurance

  	
  42

  
	
  23.

  	
  Assignment

  	
  42

  
	
  24.

  	
  Whole
  Agreement

  	
  42

  
	
  25.

  	
  Variation
  and Waiver

  	
  42

  
	
  26.

  	
  Costs

  	
  43

  
	
  27.

  	
  Notice

  	
  43

  
	
  28.

  	
  Severance

  	
  45

  
	
  29.

  	
  Agreement
  Survives Completion

  	
  45

  
	
  30.

  	
  Third
  Party Rights

  	
  45

  
	
  31.

  	
  Successors

  	
  45

  
	
  32.

  	
  Counterparts

  	
  45

  
	
  33.

  	
  Language

  	
  45

  
	
  34.

  	
  Governing
  Law and Jurisdiction

  	
  46

  
	
  Schedule 1

  	
   

  
	
   

  	
  Completion Amount Apportionments
  Schedule

  	
   

  
	
  Schedule 2

  	
   

  
	
   

  	
  Completion

  	
   

  
	
   

  	
  Part 1 - Completion
  Obligations

  	
   

  
	
   

  	
  Part 2 - Actions and
  Obligations after Completion

  	
   

  
	
  Schedule 3

  	
   

  
	
   

  	
  The Business Contracts

  	
   

  
	
  Schedule 4

  	
   

  
	
   

  	
  Part 1 The
  Transferring Employee — Brian Ramsden

  	
   

  
	
   

  	
  Part 2 The Retiring
  Employee

  	
   

  
	
   

  	
  Part 3 The Toll
  Employees

  	
   

  
	
  Schedule 5

  	
   

  
	
   

  	
  Fixed and Moveable Assets

  	
   

  
	
  Schedule 6

  	
   

  
	
   

  	
  The Business Intellectual
  Property Rights

  	
   

  



 

















 


	
   

  	
  Part 1 — The
  Registered Intellectual Property Rights

  	
   

  
	
   

  	
  Part 2 — The
  Unregistered Intellectual Property Rights

  	
   

  
	
   

  	
  Part 3 — The Shared
  IPR’s

  	
   

  
	
  Schedule 7

  	
   

  
	
   

  	
  Warranties

  	
   

  
	
   

  	
  Part 2 - Intellectual
  Property

  	
   

  
	
   

  	
  Part 3 — Pensions

  	
   

  
	
  Schedule 8

  	
   

  
	
   

  	
  Seller’s Limitations and
  Liability and Conduct of Claims

  	
   

  
	
  Schedule 9

  	
   

  
	
   

  	
  Form of Fair
  Processing Notice

  	
   

  
	
  Schedule 10

  	
   

  
	
   

  	
  Guarantee Provisions

  	
   

  
	
  Schedule 11

  	
  86

  
	
   

  	
  Earn Out Payments

  	
  86

  
	
  Schedule 1The VAT Letter

  	
   

  



 


[Certain schedules to the agreement are omitted from this exhibit as
contemplated by Item 601(b)(2) of Regulation S-K. The registrant will furnish
supplementally to the Commission, upon request, a copy of any omitted
schedule.]


 

















 


DATED:  18
December 2009


 


PARTIES


 


1.                                                GRACE
CONSTRUCTION PRODUCTS LIMITED incorporated and registered in England and Wales with
company number 00614807 whose registered office is at 635 Ajax Avenue, Slough,
Berkshire SL1 4BM (“Seller”);


 


2.                                                CHASE
PROTECTIVE COATINGS LIMITED incorporated and registered in England and Wales with
company number 06329116 whose registered office is at Harbour Road, Rye, East
Sussex TN31 7TE (“Buyer”); and


 


3.                                                DAREX UK LIMITED incorporated and registered
in England and Wales with company number 03445732 whose registered office is at
635 Ajax Avenue, Slough, Berkshire SL1 4BM (“Darex”); and


 


4.                                                CHASE
CORPORATION incorporated and registered in Massachusetts, United States of America
with its principal address at 26 Summer Street, Bridgewater, Massachusetts
02324,  United States of America (“Chase Corp.”).


 


RECITAL


 


A.                                            The
Seller has agreed to sell and transfer, and the Buyer has agreed to purchase,
the Business (together with the Assets) on and subject to the terms and
conditions of this agreement.


 


B.                                              In
consideration of the Buyer (and the relevant Buyer’s Group companies) agreeing
to enter into this agreement and the other documents referred to in this
agreement, Darex has agreed to enter into this agreement and give the guarantee
provided in clause 20.1 and Schedule 10.


 


C.                                              In
consideration of the Seller (and the relevant Seller Group companies) agreeing
to enter into this agreement and the other documents referred to in this
agreement, Chase Corp. has agreed to enter into this agreement and give the
guarantee provided in clause 20.2 and Schedule 10.


 


1

















 


OPERATIVE PROVISIONS


 


1.                                      Interpretation


 


1.1                                 The definitions and rules of
interpretation in clause 1 apply in this agreement.


 


	
  Accounts

  	
  the
  unaudited schedule of fixed assets used in the Business as listed in Schedule
  5 and the unaudited profit and loss account of the Business for the financial
  year ended on the Accounts Date and the unaudited profit and loss account for
  the Business for the period thereafter to 31 August 2009 as contained in
  Data Room Document 20.22 ; 

  
	
   

  	
   

  
	
  Accounts Date

  	
  31 December 2008;

  
	
   

  	
   

  
	
  Agency Contracts

  	
  the
  agreements and arrangements with agents and distributors entered into on or
  prior to the Effective Time by or on behalf of the Seller in connection with,
  and in the ordinary course of, the Business, being the contracts which are
  set out in Part 2 of Schedule 3;

  
	
   

  	
   

  
	
  Agency Warranties

  	
  the warranties set out in paragraph 7 (but only so far as they relate
  to the Agents and the Agency Contracts) and paragraph 10 of Part 1 of
  Schedule 7;

  
	
   

  	
   

  
	
  Agents

  	
  those agents and distributors who are parties to the Agency
  Contracts;

  
	
   

  	
   

  
	
  Assets

  	
  the
  property, rights and assets owned by the Seller and agreed to be sold
  pursuant to clause 2.1;

  
	
   

  	
   

  
	
  Assumed Liabilities 

  	
  the
  obligations of the Seller at and following the Effective Time in relation to
  the Business Contracts (but excluding the Excluded Contract Liabilities);

  
	
   

  	
   

  
	
  Book Debts

  	
  all trade
  and other debts and amounts owing to the Seller at the Effective Time in
  respect of goods or 

  



 


2

















 


	
   

  	
  services
  supplied by the Seller in the course of carrying on the Business prior to the
  Effective Time (whether or not invoiced); 

  
	
   

  	
   

  
	
  Bonus

  	
  means the
  management bonus payable to the Transferring Employee in accordance with the
  terms set out in a letter to the Transferring Employee from the Seller dated
  11 May 2009;

  
	
   

  	
   

  
	
  Business

  	
  means:



  (i)                                     the Pipewrap Business; and

   

  (ii)                                  the Tapes Business



  or any part
  of them;

  
	
   

  	
   

  
	
  Business Contracts

  	
  the Customer
  Contracts and the Agency Contracts;

  
	
   

  	
   

  
	
  Business Day

  	
  a day (other
  than a Saturday, Sunday or public holiday) when banks in London are open for
  business;

  
	
   

  	
   

  
	
  Business Information

  	
  all
  information (whether or not confidential and in whatever form held) owned by
  the Seller which relates wholly or mainly to:



  (a)                        to any part of
  the Business and Assets; or



  (b)                       any products manufactured
  or sold or services rendered by the Business in the 36 months prior to the
  date of this agreement; or



  (c)                        any
  documentation, reports, formulae, designs, specifications, drawings, data,
  manuals or instructions relating to (a) or (b); or



  (d)                       the operations,
  management, administration or financial affairs of the Business (including
  any business plans or forecasts or information relating to future business
  development); or



  (e)                       the
  sale or marketing of any of the products 

  



 


3

















 


	
   

  	
  manufactured or sold or services rendered by the Business in the 36
  months prior to the date of this agreement, including all customer and
  supplier names and lists, sales and marketing information (including targets,
  sales and market share statistics, market surveys and reports on research)
  product and marketing literature and catalogues; or



  (f)                         the Customers or the
  Employees;

  
	
   

  	
   

  
	
  Business Intellectual
  Property Rights

  	
  all the
  Intellectual Property Rights owned, used or held for use by the Seller or any
  member of the Seller Group in, or in connection with, the Business (being all
  those rights set out in Parts 1, 2 and 3 of Schedule 6);

  
	
   

  	
   

  
	
  Business Names

  	
  ServiWrap
  and Servishield or any name including those words or any colourable imitation
  of them but not including the Servicised Mark or any other Seller Mark;

  
	
   

  	
   

  
	
  Buyer Group

  	
  the Buyer,
  its holding company or any holding company of any such holding company and
  all companies and undertakings which are now or in the future become a
  Subsidiary or subsidiary undertaking of the Buyer or any such holding
  company;

  
	
   

  	
   

  
	
  Buyer’s Solicitors

  	
  Mundays LLP
  of Cedar House, 78 Portsmouth Road, Cobham, Surrey KT11 1AN;

  
	
   

  	
   

  
	
  Claim

  	
  a claim
  under the Warranties and a Claim is connected with
  another Claim or Substantiated Claim if they arise out of the occurrence of
  the same event or relate to the same subject matter;

  
	
   

  	
   

  
	
  Companies Act

  	
  the
  Companies Act 2006;

  



 


4

















 


	
  Completion

  	
  the
  completion of the sale and purchase of the Business and the Assets in
  accordance with this agreement;

  
	
   

  	
   

  
	
  Completion Amount

  	
  the sum of
  £5,983,000 exclusive of any VAT that may be applicable (if any), being the
  initial consideration for the Business and the Assets to be paid by the Buyer
  to the Seller in accordance with clause 3.2; 

  
	
   

  	
   

  
	
  Completion Date

  	
  the close of
  business on the date on which Completion takes place pursuant to clause 5;

  
	
   

  	
   

  
	
  Compromise Agreement

  	
  the
  compromise agreement in the agreed form between the Seller and the Buyer and
  the Retiring Employee to be delivered to the Buyer pursuant to paragraph 1(l) of
  Part 1 of Schedule 2 ;

  
	
   

  	
   

  
	
  Connected

  	
  has the
  meaning given in section 839 of the Income and Corporation Taxes Act 1988;

  
	
   

  	
   

  
	
  Creditors

  	
  all trade
  debts and accrued charges owing by the Seller to the trade creditors of the
  Seller in the ordinary course of the Business;

  
	
   

  	
   

  
	
  Customer Cash

  	
  all cash
  sums belonging or referable to Customers, or potential customers, of the
  Business which are held by or deposited with the Seller as deposits for, or
  advance or instalment payments in relation to, any Customer Contract, or so
  held or deposited in relation to any contract or order which any such
  customer may place with the Business in the future;

  
	
   

  	
   

  
	
  Customer Contracts

  	
  all
  contracts, engagements or orders entered into on or prior to the Effective
  Time by or on behalf of the Seller with Customers for the manufacture and
  sale of goods or provision of services by the Seller in connection with, and
  in the ordinary course of, the 

  



 


5

















 


	
   

  	
  Business
  which, at the Effective Time, remain to be performed in whole or in part by
  the Seller, being all the contracts which are set out in Part 1 of
  Schedule 3;

  
	
   

  	
   

  
	
  Customer Data

  	
  the Customer
  personal data (as defined in the DPA
  1998) which form part of the Customer Database;

  
	
   

  	
   

  
	
  Customer Database

  	
  the database
  owned by the Seller for the exclusive purpose of providing products and/or
  services to Customers;

  
	
   

  	
   

  
	
  Customers

  	
  the
  customers and former customers of the Business;

  
	
   

  	
   

  
	
  Data Controller

  	
  as defined
  in section 1 of the DPA 1998; 

  
	
   

  	
   

  
	
  Data Employees

  	
  the Seller’s
  Employees and former Employees; 

  
	
   

  	
   

  
	
  Data Room

  	
  the
  information posted online at https://datasite.merrillcorp.com by Merrill
  Corporation on behalf of the Seller entitled Surf 2009 as at 15 December 2009
  which information shall be copied onto agreed form CDs exchanged between the
  parties at or shortly after Completion and reference to a numbered Data Room Document shall be the document indexed with
  that number in the Data Room as set forth on such CD;

  
	
   

  	
   

  
	
  Demand

  	
  any action,
  award, claim or other legal recourse, complaint, cost, debt, demand, expense,
  fine, liability, loss, outgoing, penalty or proceeding;

  
	
   

  	
   

  
	
  Disclosed

  	
  fully and
  fairly disclosed (with sufficient explanation and detail to identify the
  nature and scope of the matters disclosed) in or under the Disclosure Letter;

  



 


6

















 


	
  Disclosure Letter

  	
  a letter
  from the Seller to the Buyer with the same date as this agreement together
  with the bundle of documents attached to it (Disclosure Bundle), each in the
  agreed form;

  
	
   

  	
   

  
	
  DPA 1998

  	
  the Data
  Protection Act 1998;

  
	
   

  	
   

  
	
  Earn Out Payment(s)

  	
  the earn out
  payments provided for under clause 3.4 (if any);

  
	
   

  	
   

  
	
  Effective Time

  	
  Close of
  business on the Completion Date;

  
	
   

  	
   

  
	
  Employee Data

  	
  the personal data (as defined in the DPA 1998) of the
  Transferring Employees which form part of the Employee Database; 

  
	
   

  	
   

  
	
  Employee Database

  	
  the database
  owned by the Seller in connection with the Transferring Employee;

  
	
   

  	
   

  
	
  Employees

  	
  any or all
  of the Transferring Employee, the Retiring Employee and the Toll Employees;

  
	
   

  	
   

  
	
  Encumbrance

  	
  any
  mortgage, charge (fixed or floating), pledge, lien, hypothecation, guarantee,
  trust, right of set-off or other third party right or interest (legal or
  equitable) including any assignment by way of security, reservation of title
  or other security interest of any kind, howsoever created or arising, or any
  other agreement or arrangement (including a sale and repurchase agreement)
  having similar effect;

  
	
   

  	
   

  
	
  Environmental Laws

  	
  all
  applicable laws, statutes, regulations, secondary legislation, bye-laws,
  common law, directives, treaties and other measures, judgments and decisions
  of any court or tribunal, codes of practice and guidance notes which are
  legally binding and in force as at the date of this agreement in so far as
  they relate to or apply to the environment, including Part IIA of the 

  



 


7
















 


	
   

  	
  Environmental
  Protection Act 1990 and any regulations and guidance made or issued
  thereunder;

  
	
   

  	
   

  
	
  Environmental Loss

  	
  any and all losses, damages, liabilities, claims, costs and expenses
  which arise directly from any Soil or Groundwater Contamination or under
  Environmental Laws (excluding any losses, damages, liabilities, claims, costs
  and expenses which relate to any interruption or disruption to the business
  carried on by the Buyer or the Buyer’s Group or any other losses incidental
  or consequential to Soil or Groundwater Contamination or under applicable
  Environmental Laws);

  
	
   

  	
   

  
	
  Escrow Account

  	
  as defined in the Escrow Agreement;

  
	
   

  	
   

  
	
  Escrow Agreement

  	
  the escrow account agreement between the Seller and the Buyer to be
  entered into on Completion in the agreed form; 

  
	
   

  	
   

  
	
  Excluded Assets

  	
  the assets
  used in the Business set out in clause 2.2 as being excluded from the sale
  pursuant to this agreement; 

  
	
   

  	
   

  
	
  Excluded Contract
  Liabilities

  	
  all
  liabilities of the Seller relating to or arising in connection with:



  (a)                        any breach of a
  Customer Contract which is attributable to any act, neglect, omission or
  default of any member of the Seller Group before Completion; or



  (b)                       any product delivered by
  any member of the Seller Group or any service performed by any member of the
  Seller Group before Completion other than the supply of any products pursuant
  to the Toll Manufacturing Agreement the liability for which shall be upon and
  subject to 

  



 


8

















 


	
   

  	
  the terms of the Toll Manufacturing
  Agreement;

  
	
   

  	
   

  
	
  Excluded Liabilities

  	
  the Excluded
  Contract Liabilities, the Leasing and Hire Agreements, Supplier Contracts and
  all the liabilities or obligations relating to the Business or Assets (other
  than the Assumed Liabilities) and outstanding on, or accrued or referable to
  the period up to and including, the Effective Time or arising by virtue of
  the sale and purchase recorded by this agreement, including any and all
  liabilities in respect of National Insurance, PAYE, VAT or other Taxation attributable
  to the Seller in respect of the Business, the Assets or the Employees
  relating to the period ending on the Effective Time and all bank and other
  overdrafts and loans owing by the Seller;

  
	
   

  	
   

  
	
  Facility

  	
  the Seller’s
  production facility at 635 Ajax Avenue, Slough, Berkshire SL1 4BH UK;

  
	
   

  	
   

  
	
  Fixed and Moveable
  Assets

  	
  all those
  items listed in part a of Schedule 5;

  
	
   

  	
   

  
	
  Goodwill

  	
  the
  goodwill, custom and connection of the Seller in relation to the Business,
  together with the exclusive right for the Buyer and its successors and
  assigns to carry on the Business under the Business Names and to represent
  themselves as now carrying on the Business from Completion and for a period
  of 12 months from Completion as carrying on the Business in succession to the
  Seller in the manner provided under the IP Agreement;

  
	
   

  	
   

  
	
  Group

  	
  the company
  in question, its holding company or any holding company of any such holding
  company and all companies and undertakings which now or in the future become
  a Subsidiary or subsidiary undertaking of the company in question or of any
  such holding

  



 


9

















 


	
   

  	
  company;

  
	
   

  	
   

  
	
  Indemnity Claim

  	
  any claim
  which may be made under the provisions of this agreement or any of the
  documents entered into pursuant to this agreement pursuant to which one party
  (the “Indemnifier”) is to indemnify another party (the “Indemnified Party”)
  in any respect;

  
	
   

  	
   

  
	
  Intellectual Property
  Rights

  	
  patents,
  rights to inventions, copyright and related rights, moral rights, trade marks
  and service marks, trade names and domain names, rights in get-up, rights in
  goodwill or to sue for passing off or unfair competition, rights in designs,
  rights in computer software, database rights and rights in confidential
  information (including know-how and trade secrets) and any other intellectual
  property rights 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
  now subsist or which may in the future subsist in any part of the world;

  
	
   

  	
   

  
	
  IP Agreement

  	
  the
  Intellectual Property Agreement to be entered into between the Seller and the
  Buyer at Completion in the agreed form;

  
	
   

  	
   

  
	
  IT System

  	
  all computer
  hardware (including network and telecommunications equipment) and software
  (including associated preparatory materials, user manuals and other related
  documentation) owned, used, leased or licensed by the Seller (whether or not
  used in the Business);

  



 


10

















 


	
  Know How

  	
  all
  confidential or proprietary industrial and commercial information, know how
  and techniques in any form including without limitation drawings,
  specifications, test results, reports and those set out in any procedures
  owned by the Seller or utilised in any processes methodologies or other
  actions operated by the Seller and which relate to the Business and the
  Assets; 

  
	
   

  	
   

  
	
  Leasing and Hire
  Agreements

  	
  all those
  contracts, engagements or orders entered into on or before the Effective Time
  in relation to the leasing, lease purchase or hire of goods or equipment for
  use in, and in the ordinary course of, the Business which at the Effective
  Time remain to be performed in whole or in part, which have been entered into
  by or for the benefit of the Seller, or the benefits of which are held in
  trust for or have been assigned or subcontracted to the Seller;

  
	
   

  	
   

  
	
  Pipewrap

  	
  means
  self-adhesive products consisting of a carrier film treated with rubberised
  asphalt adhesive with a release liner, moulding putty and primers that, in
  each case, are exclusively for the application to metal pipelines, metal
  pipeline fittings and marine pilings to protect from corrosion;

  
	
   

  	
   

  
	
  Pipewrap Business

  	
  the
  manufacture and sale of Pipewrap as conducted by the Seller at and from the
  Facility during the 12 months prior to the Completion Date; 

  
	
   

  	
   

  
	
  Purchase Price

  	
  the total
  purchase price exclusive of any VAT that may be applicable (if any) to be
  paid for the Business and Assets by the Buyer consisting of the Completion
  Amount and, if any become due and payable, the Earn Out Payments;

  



 


11

















 


	
  Private Label Customer

  	
  the company
  that entered into the agreement with the Seller disclosed as Data Room
  Document 4.2 and any member if its Group;

  
	
   

  	
   

  
	
  Redundancy Payment 

  	
  the amount
  payable to each Employee calculated by multiplying two thirds of the
  Employee’s gross monthly salary by the Employee’s number of completed years
  of service, up to a maximum of 1 year’s gross salary;

  
	
   

  	
   

  
	
  Registered Intellectual
  Property Rights

  	
  the
  registered Intellectual Property Rights used in connection with the Business
  and Assets details of which are specified in Part 1 of Schedule 6;

  
	
   

  	
   

  
	
  Registered Intellectual
  Property Assignments

  	
  the
  assignments of the Registered Intellectual Property Rights from the Seller,
  the Seller’s holding company and the Seller’s ultimate holding company to the
  Buyer in the agreed form and to be entered into at
  Completion;

  
	
   

  	
   

  
	
  Retained Business

  	
  means any
  development and manufacture of Tapes by the Seller at any of its facilities,
  other than the Facility and any sale of Tapes by the Seller other than sales
  of Tapes directly or knowingly through a third party or parties to the
  Private Label Customer for resale by the Private Label Customer to end-users
  in Germany, Austria, Slovenia, Switzerland, Denmark, Belgium, Netherlands and
  Luxembourg under the Private Label Customer’s name;

  
	
   

  	
   

  
	
  Retiring Employee

  	
  the person
  whose details are set out in Part 2 of Schedule 4 and who has entered
  into the Compromise Agreement;

  
	
   

  	
   

  
	
  Seller Executives

  	
  Messrs. Phillipe
  Abecassis, David Goodall, Les Hounslow, Karen Christian, Roger Fieldsend and

  



 


12

















 


	
   

  	
  Mike A.
  James; 

  
	
   

  	
   

  
	
  Seller Group

  	
  the Seller,
  its holding company or any holding company of any such holding company and
  all companies and undertakings which now or in the future become a Subsidiary
  or subsidiary undertakings of the Seller or of any such holding company;

  
	
   

  	
   

  
	
  Seller Marks

  	
  the names
  “Grace,” “Grace Construction Products,” and any other name that includes the
  word “Grace”;

  
	
   

  	
   

  
	
  Seller’s Scheme

  	
  the pension
  scheme known as the Grace UK Pension Plan, established with effect from 24 August 1948
  and which is registered under Chapter 2 of Part 4 of the Finance Act
  2004; 

  
	
   

  	
   

  
	
  Seller’s Solicitors

  	
  Shoosmiths of Apex Plaza, Forbury Road, Reading,
  Berkshire RG1 1SH (ref: Emma Gibson);

  
	
   

  	
   

  
	
  Servicised Mark

  	
  the
  registered and unregistered trade mark and name known as “Servicised” which
  is owned and exclusively held by the Seller;

  
	
   

  	
   

  
	
  Shared IPR

  	
  the Business
  Intellectual Property Rights listed in Part 3 of Schedule 6 and which
  are the subject of the licence back to the Seller under the IP Agreement;

  
	
   

  	
   

  
	
  Soil or Groundwater
  Contamination

  	
  any
  contamination:



  (a)                            in soil or groundwater at or
  under the property at 635, Ajax Avenue, Slough (the “Property”) at
  Completion; or



  (b)                           any other soil or
  groundwater at Completion and resulting from migration from the Property;

  
	
   

  	
   

  
	
  Stock

  	
  the stock-in-trade
  of the Business including raw materials, goods and other assets purchased for
  resale,

  



 


13

















 


	
   

  	
  stores,
  component parts and work-in-progress, together with finished products and
  packaging and promotional material, owned or agreed to be bought by the
  Seller in connection with the Business at the Effective Time (including any
  items which, although subject to reservation of title, are under the control
  of the Seller);

  
	
   

  	
   

  
	
  Subsidiary

  	
  in relation
  to a company wherever incorporated (a holding company) means a subsidiary as defined in section 1159 of the Companies Act
  2006 and any other company which is itself a subsidiary (as so defined) of a
  company which is itself a subsidiary of such holding company. Unless the
  context otherwise requires, the application of this definition to any company
  at any time will apply to the company as it was at that time, and a
  subsidiary undertaking shall be construed in accordance with section 1162 of
  that Act;

  
	
   

  	
   

  
	
  Substantiated Claim

  	
  is a Claim
  in respect of which liability is admitted by the Seller, or which has been
  adjudicated on by a court of competent jurisdiction and no right of appeal
  lies in respect of such adjudication or the parties are prevented by passage
  of time or otherwise from making an appeal;

  
	
   

  	
   

  
	
  Supplier Contracts

  	
  all
  contracts, engagements or orders entered into on or before the Effective Time
  by or on behalf of the Seller for the supply or sale of goods or services to
  the Seller in connection with and in the ordinary course of the Business,
  which at the Effective Time remain to be performed in whole or in part;

  
	
   

  	
   

  
	
  Tapes

  	
  means
  self-adhesive products consisting of a carrier film including high density,
  cross-laminated polyethylene with a paper release liner treated with 

  



 


14

















 


	
   

  	
  rubberised
  asphalt that are no more than one metre wide and that are used exclusively to
  flash joints in walls and windows in residential and commercial structures to
  prevent water and air infiltration;

  
	
   

  	
   

  
	
  Tapes Business

  	
  means
  the manufacture of Tapes at the Facility and the sale of Tapes from the
  Facility exclusively to the Private Label Customer and exclusively for resale
  by the Private Label Customer under the Private Label Customer’s name to
  end-users in Germany, Austria, Slovenia, Switzerland, Denmark, Belgium,
  Netherlands and Luxembourg as conducted by the Seller during the 12 months
  prior to the Completion Date and for the avoidance of doubt not including the
  Retained Business;

  
	
   

  	
   

  
	
  Taxation or Tax

  	
  all forms of
  taxation and statutory, governmental, state, federal, provincial, local,
  government or municipal charges, duties, imposts, contributions, levies,
  withholdings or liabilities wherever chargeable and whether of the UK or any
  other jurisdiction; and any penalty, fine, surcharge, interest, charges or
  costs relating thereto;

  
	
   

  	
   

  
	
  Tax Warranties

  	
  the
  warranties set out in Part 4 of Schedule 7;

  
	
   

  	
   

  
	
  Third Party Consent

  	
  a consent,
  licence, approval, authorisation or waiver required from a third party for
  the conveyance, transfer, assignment or novation in favour of the Buyer of
  any of the Assets in terms acceptable to the Buyer;

  
	
   

  	
   

  
	
  Toll Manufacturing
  Agreement

  	
  the toll
  manufacturing agreement between the Seller and the Buyer to be entered into
  on Completion in the agreed form;

  
	
   

  	
   

  
	
  Toll Employees

  	
  the persons
  who will continue to be employed by the 

  



 


15

















 


	
   

  	
  Seller to
  perform the Toll Manufacturing Agreement being those persons whose names are
  set out in Part 3 of Schedule 4);

  
	
   

  	
   

  
	
  Transaction

  	
  the
  transaction contemplated by this agreement or any part of that transaction;

  
	
   

  	
   

  
	
  Transferring Employee

  	
  the person
  whose details are set out in Part 1 of Schedule 4, being the only person
  whose employment will transfer to the Buyer pursuant to the sale and purchase
  to be effected under this agreement; 

  
	
   

  	
   

  
	
  Transition Obligations
  Agreement

  	
  the
  agreement in the agreed form to be entered into between the Seller and the
  Buyer at Completion for the provision of certain transitional obligations by
  the Seller to the Buyer;

  
	
   

  	
   

  
	
  TUPE

  	
  the Transfer
  of Undertakings (Protection of Employment) Regulations 2006;

  
	
   

  	
   

  
	
  TUPE 1981

  	
  the Transfer
  of Undertakings (Protection of Employment) Regulations 1981;

  
	
   

  	
   

  
	
  Unregistered
  Intellectual Property Rights

  	
  the Know How and any other unregistered Intellectual Property Rights
  used in connection with the Business and Assets and details of which are
  specified in Part 2 of Schedule 6;

  
	
   

  	
   

  
	
  Unused Material

  	
  means all inventory, stock, packaging, labels and raw materials that
  is unused or unsaleable as at the Completion Date and which is not suitable
  for use by the Seller in performing its obligations under the terms of the
  Toll Manufacturing Agreement;

  
	
   

  	
   

  
	
  VAT

  	
  value added
  tax chargeable under the VATA 1994 and any similar replacement or additional
  tax;

  



 


16

















 


	
  VAT Records

  	
  all records
  referred to in section 49 of VATA 1994;

  
	
   

  	
   

  
	
  VATA 1994

  	
  the Value
  Added Tax Act 1994; 

  
	
   

  	
   

  
	
  Warranties

  	
  the
  warranties set out in clause 6 and Schedule 7; 

  



 


1.2                                 Clause, schedule and paragraph
headings do not affect the interpretation of this agreement.


 


1.3                                 A reference to a clause or a
schedule is a reference to a clause of, or schedule to, this agreement. A
reference to a paragraph is to a paragraph of the relevant schedule, and a
reference to an appendix is to the relevant appendix to this agreement.


 


1.4                                 A person
includes a natural person, corporate or unincorporated body (whether or not
having separate legal personality).


 


1.5                                 A reference to a company shall include any company, corporation or other body
corporate, wherever and however incorporated.


 


1.6                                 Words in the singular include
the plural and in the plural include the singular.


 


1.7                                 A reference to one gender
includes a reference to the other gender.


 


1.8                                 A reference to a particular
statute, statutory provision or subordinate legislation is a reference to it as
it is in force from time to time taking account of any amendment or
re-enactment and includes any statute, statutory provision or subordinate
legislation which it amends or re-enacts and subordinate legislation for the
time being in force made under it. Provided that, as between the parties, no
such amendment or re-enactment shall apply for the purposes of this agreement
to the extent that it would impose any new or extended obligation liability or
restriction on, or otherwise adversely affect the rights of, any party.


 


1.9                                 A reference to writing or written
includes faxes but not e-mail.


 


1.10                           Documents in agreed form are documents in the form agreed by the parties
to this agreement and initialled by them or on their behalf for identification.


 


1.11                           A reference in this agreement
to other documents referred to in this agreement
is a reference to the following documents:


 


1.11.1                  the IP Agreement;


 


17
















 


1.11.2         the Registered Intellectual Property
Assignments;


 


1.11.3         the Transition Obligations Agreement;


 


1.11.4         the Toll Manufacturing Agreement; and


 


1.11.5         the Disclosure Letter.


 


1.12            Where the words include(s),
including or in
particular are used in this agreement, they are deemed to have the
words “without limitation” following them.


 


1.13            Any obligation in this agreement on a
person not to do something includes an obligation not to agree or allow that
thing to be done.


 


1.14            Where the context permits, other and otherwise are
illustrative and shall not limit the sense of the words preceding them.


 


1.15            References to any English legal terms, for
any action, remedy, method of judicial proceeding, legal document, legal
status, court, official or any other legal concept or thing shall, in respect
of any jurisdiction other than England, be deemed to include a reference to
what most nearly approximates to the English legal term in that jurisdiction.


 


1.16            References to times of the day are, unless
the context requires otherwise, to London time and references to a day are to a
period of 24 hours running from midnight on the previous day.


 


1.17            Any amount expressed to be in pounds
sterling shall, to the extent that it requires, in whole or in part, to be
expressed in any other currency in order to give full effect to this agreement,
be deemed for that purpose to have been converted into the relevant currency
immediately before the close of business on the date of this agreement (or, if
that is not a Business Day, the Business Day immediately before it). Subject to
any applicable legal requirements governing conversions into that currency, the
rate of exchange shall be Royal Bank of Scotland’s spot rate for the purchase
of that currency with sterling at the time of the deemed conversion.


 


2.                Agreement to Sell and Purchase


 


2.1              Unless expressly provided in this
agreement, the Seller shall sell with full title guarantee and the Buyer in
reliance on the Warranties and with a view to carrying on the business as 


 


18

















 


a going concern, shall purchase free from
all Encumbrances with effect from the Effective Time:


 


2.1.1           the Goodwill;


 


2.1.2           the Fixed and Moveable Assets;


 


2.1.3           the benefit (subject to the provisions of
clause 14) of the Business Contracts;


 


2.1.4           the Business Information;


 


2.1.5           the Business Intellectual Property Rights;


 


2.1.6           all of the Seller’s rights against third
parties, including rights under any warranties, conditions, guarantees or
indemnities or under the Sale of Goods Act 1979, relating to any of the Assets
and the benefit of all sums to which the Seller is entitled from third parties
or insurers in respect of loss or damage to the Assets;


 


2.1.7           the Customer Cash.


 


2.2              The following shall be excluded from the
sale under this agreement:


 


2.2.1           the Excluded Liabilities;


 


2.2.2           the Servicised Mark and the Seller’s Marks;


 


2.2.3           the Creditors;


 


2.2.4           the IT System;


 


2.2.5           the lease of the Facility;


 


2.2.6           any right of action to which the Seller may
be entitled (whether in contract, tort or otherwise) other than pursuant to or
in connection with any Customer Contracts, or the Business Intellectual
Property Rights;


 


2.2.7           all contracts and arrangements relating to
the Business entered into outside the ordinary course of business;


 


2.2.8           all the Seller’s cash-in-hand or at the
bank or at any other financial institution including the Book Debts;


 


19

















 


2.2.9           the Stock;


 


2.2.10         any Tax for which the Seller is liable,
whether or not then due, and any liability for financing charges relating to
the Business;


 


2.2.11         the Seller’s accounts and accounting
records which do not relate exclusively to the Business;


 


2.2.12         the benefit of any and all insurance claims
and repayments arising on or before the Effective Time in relation to the
Business or the Assets;


 


2.2.13         the statutory books and minutes of the
Seller;


 


2.2.14         any letter of credit; and


 


2.2.15         the Supplier Contracts.


 


2.3              The sale and purchase of each of the Assets
is interdependent and shall be completed simultaneously.


 


2.4              The Purchase Price shall be apportioned
between the Assets as shown in Schedule 1.


 


2.5              The Seller agrees that the apportionment of
the Purchase Price between the Assets in Schedule 1 shall not in any way limit
the Buyer’s remedies or any remedies or any amount recoverable by the Buyer in
respect of the Assets.


 


3.                Purchase Price and Payment


 


3.1              The Purchase Price consists of the
Completion Amount and, if any becomes due and payable, the Earn Out Payments.


 


3.2              The Completion Amount (excluding the VAT
payable on the Completion Amount) shall be paid in cash on Completion by the
Buyer by electronic transfer to the client account of the Seller’s Solicitors
at Royal Bank of Scotland plc, 62/63 The City, Threadneedle Street, London EC2R
8LA, account number 21738452, sort code 15 -10- 00, reference EBG.


 


3.3              The Purchase Price shall be deemed to be
reduced by the amount of any payment made to the Buyer for a breach of any
Warranty or under clause 12 (Indemnities) of this Agreement and (without
prejudice to clause 2.5) the reduction shall be allocated as nearly as possible



 


20

















 


to the Assets to which the breach or
indemnity relates or, if that is not practicable or possible, in such manner as
the Buyer shall decide.


 


3.4              The provisions of Schedule 11 shall apply
in relation to the Earn Out Payments, if any.


 


4.                Set Off


 


Neither party shall be entitled to set-off any amounts
owed to it (or any member of its Group) by the other party (or any member of
its Group) under this agreement or any other documents referred to in this
agreement against any amounts payable by it to the other party (or any member
of its Group) under this agreement or any other documents referred to in this
agreement or any other agreement or arrangement with the other party (or any
member of its Group).


 


5.                Completion


 


5.1              Completion shall take place on the
Completion Date:


 


5.1.1           at the offices of the Buyer’s Solicitors;
or


 


5.1.2           at any other place agreed in writing by the
Seller and the Buyer.


 


5.2              At Completion, the Buyer and the Seller
shall each comply with their respective obligations set out in Part 1 of
Schedule 2.


 


5.3              Following Completion, the Buyer and the
Seller shall each comply with their respective obligations set out in Part 2
of Schedule 2.


 


5.4              At and with effect from Completion, the
Seller hereby assigns to the Buyer the Unregistered Intellectual Property
Rights.


 


5.5              All information and data held by the Seller
and the Seller’s Group which describes the Know How and any other Unregistered
Intellectual Property Rights will be provided to the Buyer at and immediately
following Completion.


 


6.                Warranties


 


6.1              The Buyer enters into this agreement on the
basis of and in reliance on, the Warranties.


 


21

















 


6.2              The Seller warrants to the Buyer that each
Warranty is true, accurate and not misleading except as Disclosed.


 


6.3              The Seller agrees that any information
supplied by or on behalf of any of the Employees to the Seller or its advisers
in connection with the Warranties, the information Disclosed in the Disclosure
Letter or otherwise shall not constitute a warranty, representation or
guarantee as to the accuracy of such information in favour of the Seller, and
the Seller hereby undertakes to the Buyer that it waives any and all claims
which it might otherwise have against any of the Employees in respect of such
claims.


 


6.4              Warranties given so far as the Seller is
aware are deemed to be given to the best of the knowledge and belief of the
Seller Executives, having made due and careful enquiry of the Seller’s records
and relevant employees, including without limitation Brian Ramsden.


 


6.5              Each of the Warranties is separate and, unless
expressly provided to the contrary, is not limited by reference to any other
Warranty or anything in this agreement.


 


6.6              No information of which the Buyer and/or
its agents and/or advisers has constructive or imputed knowledge, or which
could have been discovered (whether by investigation made by the Buyer or made
on its behalf), shall prejudice or prevent any Claim or reduce any amount
recoverable thereunder.


 


7.                Limitations on Claims


 


7.1              The liability of the Seller for Claims
shall be subject to the provisions of Schedule 8 which shall be an aggregate
liability with any liability of the Seller under the Toll Manufacturing
Agreement.  Any amounts awarded, or which the Seller agrees to pay, in respect of
any liability (whether in contract, tort or otherwise) for any claims arising
under the Toll Manufacturing Agreement shall be taken into account in
determining whether or not any amount claimed under this Agreement exceeds the
limitation under paragraph 2.2 of Schedule 8.


 


7.2              None of the limitations in Schedule 8 shall
apply:


 


7.2.1           to any other claim under this agreement
(including without limitation breach of clause 2.1 or a claim under the
indemnities set out in clause 12 of this agreement);


 


22

















 


7.2.2           to a Claim that arises or is delayed as a
result of fraud or wilful concealment by the Seller, or any member of the
Seller Group, or any employee or officer (or former employee or officer), agent
or adviser of the Seller or any member of the Seller Group.


 


8.                Risk and Insurance


 


8.1              The Seller has carried on the Business for
its own benefit and at its own risk up to the Effective Time. The Assets shall
be at the risk of the Buyer from the Effective Time.


 


8.2              All profits and receipts of the Business
(other than profits earned or receivable in respect of work-in-progress), all
losses and, subject to clause 9, all outgoings incurred or payable by the
Seller in connection with the Business and referable to the period up to and
including the Effective Time shall belong to, and be paid and discharged by,
the Seller.


 


8.3              All profits and receipts in respect of the
Business Contracts and, subject to clause 9 and clause 12, all losses and
outgoings incurred or payable by the Seller in connection with the Business Contracts
and referable to the period after the Effective Time shall belong to, and be
paid and discharged by, the Buyer.


 


8.4              Nothing in this agreement shall have the
effect of making the Buyer liable in any way under any guarantees or warranties
given by the Seller to any Customer in relation to goods sold or services
rendered by the Seller prior to the Effective Time, the liability for which
shall remain absolutely with the Seller.


 


9.                Apportionments and Prepayments


 


9.1              The periodical charges and periodical
outgoings of the Business Contracts or related to the Assets, being the
non-customer rebates, insurance and all liabilities in relation to salaries,
wages, entitlement to paid holiday, employee bonus or commission, expenses,
National Insurance and pension contributions and liability to Taxation shall be
apportioned on a time basis, so that such part of the relevant charges
attributable to the period ending at the Effective Time shall be borne by the
Seller and such part of the relevant charges attributable to the period
commencing on the day immediately following the Effective Time shall be borne
by the Buyer.  All licence fees,
royalties and other periodical receipts relating to the Business Contracts and
the Assets shall be apportioned between the Seller and the Buyer on a like
basis.


 


23

















 


9.2              Where any product or service is to be
provided by the Buyer under any Business Contract after the Effective Time, but
any payment (whether by way of deposit, prepayment or otherwise) in respect of
the price or cost of such product or service has been received by the Seller
before the Effective Time, the Seller shall pay an amount equal to the amount
of that payment (excluding any amount in respect of VAT for which the Seller is
required to account) to the Buyer and shall hold such sum in trust for the
Buyer until it is paid.


 


9.3              All money or other items belonging to the
Buyer, which are received by the Seller on or after the Effective Time in
connection with the Business Contracts or any of the Assets, shall be held in
trust for the Buyer and shall be paid promptly to the Buyer.


 


9.4              All money or other items belonging to the
Seller, which are received by the Buyer on or after the Effective Time in
connection with the Business Contracts or any of the Assets, shall be held in
trust for the Seller and shall be paid promptly to the Seller save as provided
for in clause 16.5 of this agreement.


 


9.5              Any sum due between the parties pursuant to
this clause 9 shall be paid in cash within five Business Days of receipt:


 


9.5.1           if to the Seller, in the manner
contemplated by clause 3; and


 


9.5.2           if to the Buyer, to such bank account as
the Buyer may notify to the Seller.


 


10.             Liabilities of the Seller and
the Buyer


 


10.1            The Buyer shall:


 


10.1.1         with effect from the Effective Time, assume
responsibility for and indemnify and hold the Seller harmless against the
payment and performance of the Assumed Liabilities; and


 


10.1.2         pay, satisfy or discharge any further
debts, liabilities and obligations incurred by the Buyer in connection with the
Business Contracts after Completion save as provided for in the Toll
Manufacturing Agreement and shall indemnify and hold the Seller harmless
against any and all obligations, liabilities and Demands arising therefrom.


 


10.2            Nothing in this agreement shall pass to the
Buyer, or shall be construed as acceptance by the Buyer of, any liability, debt
or other obligation of the Seller (whether accrued, 


 


24

















 


absolute, contingent, known or unknown) for
anything done or omitted to be done before Completion in the course of or in
connection with the Business or the Assets (save to the extent that any such
liability is included in the Assumed Liabilities) and the Seller shall:


 


10.2.1         indemnify and hold the Buyer harmless
against any and all obligations, liabilities and Demands arising therefrom,
including the Excluded Liabilities; and


 


10.2.2         perform any obligation falling due for
performance or which should have been performed before Completion, including
the Excluded Liabilities.


 


11.             VAT


 


11.1            The
Completion Amount and all other payments made under this agreement shall be
deemed to be exclusive of VAT.


 


11.2            The
Buyer has with the agreement of the Seller submitted a written application to
HM Revenue & Customs (“HMRC”), a copy
of which is contained at Schedule 12 (the “VAT Letter”),
asking for confirmation as to whether the Transaction is a taxable supply for
the purposes of VAT, or the transfer of a going concern under Article 5 of
the VAT (Special Provisions) Order 1995 (a “TOGC”).


 


11.3            The Buyer hereby represents and warrants
that it is registered for VAT under registration number 909 454 016, and shall
provide the Seller with a copy of its registration prior to Completion.


 


11.4            The Seller hereby represents and warrants
that it is a member of a VAT group which has registration number 705 745 042,
and shall provide the Buyer with a copy of its certificate of registration
prior to Completion.


 


11.5            If,
prior to Completion, the Buyer has received written confirmation from HMRC that
on the basis of the VAT Letter the Transaction:


 


11.5.1         does
not constitute a TOGC then the Buyer shall pay the VAT chargeable on the
Completion Amount and the Seller shall issue a valid VAT invoice to the Buyer;
or


 


11.5.2         does
constitute a TOGC, then the Buyer shall provide a copy of HMRC’s determination
to the Seller and no VAT shall be payable by the Buyer and no VAT invoice shall
be issued by the Seller.


 


25

















 


11.6            If,
prior to Completion the Buyer has not received written confirmation from HMRC
as to whether or not the Transaction is a TOGC, then on Completion:


 


11.6.1         the Buyer and the Seller shall each execute
the Escrow Agreement and deliver their signed original to the other; and


 


11.6.2         upon the Escrow Agreement being so executed
and exchanged, the Buyer shall pay £897,450 (being the VAT payable on the
Completion Amount) in to the Escrow Account which shall be dealt with in
accordance with the terms of the Escrow Agreement.


 


12.             Indemnities


 


12.1            The Seller undertakes to indemnify and hold
the Buyer harmless against all Demands (including professional fees and costs)
which may be suffered or incurred by the Buyer and which arise directly or
indirectly in connection with the following matters:


 


12.1.1         all and any Environmental Losses (whether
arising before or after the Effective Time) except to the extent they are the
Buyer’s liability pursuant to the express terms of the Toll Manufacturing
Agreement; and;


 


12.1.2         all and any claims for products sold or
delivered, or services performed by the Seller or for breach of law by the
Seller in relation to the Business prior to the Effective Time.


 


12.2            Any payment made in respect of a claim under
this clause 12 shall include:


 


12.2.1         an amount in respect of all costs and
expenses incurred by the Buyer in relation to the bringing of the claim
(including a reasonable amount in respect of management time); and


 


12.2.2         any amount necessary to ensure that, after
Taxation of the payment, the Buyer is left with the same amount it would have
had if the payment had not been subject to Taxation.


 


13.             The Employees


 


For the purpose of this clause 13:


 


26

















 


“Indemnity Limit” means, for each Employee,
the value of the Redundancy Payment of the particular Employee together with
either proper notice or an amount of salary equivalent to the Employee’s notice
period.


 


13.1            The parties agree that the sale and
purchase pursuant to this agreement will constitute a relevant transfer for the
purposes of TUPE and, accordingly, that it will not itself operate so as to
terminate the contracts of employment of any of the Employees. The parties
further agree that:


 


13.1.1         the Transferring Employee’s contract of
employment shall be transferred to the Buyer pursuant to TUPE with effect from
the Effective Time;


 


13.1.2         the Retiring Employee’s contract of
employment shall not transfer to the Buyer pursuant to TUPE by virtue of the
Retiring Employee objecting to the transfer and entering into the Compromise
Agreement and the Seller undertakes to meet all of its obligations under the
said Compromise Agreement and the Seller shall indemnify and hold the Buyer
harmless from all Demands of the Retiring Employee under the Compromise
Agreement;


 


13.1.3         the Toll Employee’s contracts of employment
shall not be transferred to the Buyer pursuant to TUPE by virtue of the parties
entering into the Toll Manufacturing Agreement and the parties agree to deal
with the Toll Employees and any Demands made by the Toll Employees in the
manner provided for under the Toll Manufacturing Agreement.


 


13.2            The Seller undertakes to the Buyer:


 


13.2.1         that it has complied with, and shall up to
and including the Effective Time, comply with all of its obligations (howsoever
arising) due to or in connection with the Transferring Employee or any body
representing them (or any of the said obligations the Seller would have had
under or in connection with such contracts but for TUPE);


 


13.2.2         that it has paid and shall pay all sums due
to or in relation to the Transferring Employee up to and including the
Effective Time (whether arising under common law, statute, equity or otherwise)
including all salaries, wages, employee bonus or


 


27
















 


	
   

  	
  commission, expenses, National Insurance and
  pension contributions, liability to Taxation, and other sums payable in
  respect of any period up to the Effective Time;

  
	
   

  	
   

  
	
  13.2.3

  	
  that in respect of the Transferring Employee it
  has complied and shall comply in all respects with its obligations under
  regulation 11 of TUPE;

  
	
   

  	
   

  
	
  13.2.4

  	
  that there are no sums owing to or from the
  Transferring Employee other than reimbursement of expenses for the current
  month, wages for the current salary period;

  
	
   

  	
   

  
	
  13.2.5

  	
  that in respect of the Transferring Employee, it
  has complied and shall comply in all respects with regulation 13 of TUPE
  (subject in the case of the Seller’s obligations under Regulation
  13(2)(d) of TUPE to the Buyer providing the information required under
  Regulation 13(4) of TUPE) and that it has provided and shall provide to
  the Buyer such information as the Buyer may request in writing in order to
  verify such compliance;

  
	
   

  	
   

  
	
  13.2.6

  	
  that it has not terminated and shall not terminate
  or take any steps to terminate (constructively or otherwise) the employment
  of the Transferring Employee without the prior written consent of the Buyer;

  
	
   

  	
   

  
	
  13.2.7

  	
  that it has not transferred and shall not transfer
  the Transferring Employee from working within the Business and it has not
  induced and shall not induce the Transferring Employee to resign his
  employment in the Business;

  
	
   

  	
   

  
	
  13.2.8

  	
  that it shall not employ, engage or transfer any
  person who is not an Employee to work in the Business without the prior
  written consent of the Buyer;

  
	
   

  	
   

  
	
  13.2.9

  	
  that it shall pay to the Transferring
  Employee the Bonus on or before 31 March 2010.

  



 


13.3            The Buyer undertakes to the
Seller to comply with its obligation under Regulation 13(4) prior to the
Termination Date.  The Buyer agrees to assist
the Seller in the event that any consultation is required in relation to any
measures proposed by the Buyer.


 


13.4            The Seller shall indemnify and hold the
Buyer harmless, up to the greater of the Indemnity Limit or any tribunal or
court award for each Employee against any payments, penalties, 


 


28

















 


costs, claims, demands, damages, compensation, fines,
awards, losses and expenses (including any legal or other professional fees on
an indemnity basis) and any other liabilities or Demands whatsoever (“Costs”)
arising from any claim or otherwise in respect of:


 


	
  13.4.1

  	
  the employment of the Employees or any other
  person by the Seller on or prior to the Effective Time; or

  
	
   

  	
   

  
	
  13.4.2

  	
  any act or omission of the Seller on or prior to
  the Effective Time in relation to the employment of any person (including the
  termination of their employment); or

  
	
   

  	
   

  
	
  13.4.3

  	
  any failure by the Seller to comply with its
  obligations to inform and consult under Regulations 13 and 14 of TUPE (save
  to the extent that such Costs arise out of the Buyer’s failure to provide
  information under Regulation 13(4) of TUPE);

  
	
   

  	
   

  
	
  13.4.4

  	
  the transfer of the employment or engagement of
  any person other than the Transferring Employee to the Buyer (including for
  the avoidance of doubt the Retiring Employee and the Toll Employees);

  
	
   

  	
   

  
	
  13.4.5

  	
  The Bonus for the Transferring Employee.

  



 


13.5            The Buyer shall
indemnify the Seller against all Costs arising from any claim or otherwise in
respect of:


 


	
  13.5.1

  	
  any liabilities of the Seller that are created or
  increased and that are directly attributable to a negligent or unreasonable
  act or omission of the Buyer or;

  
	
   

  	
   

  
	
  13.5.2

  	
  any failure by the Buyer to comply with its
  obligations to provide information under Regulation 13(4) of TUPE; and

  



 


13.6            If any contract of employment or engagement
or collective agreement not Disclosed (other than in relation to the Employees)
to the Buyer has effect as if originally made between the Buyer and any person
or body or their representatives as a result of the provisions of TUPE or
otherwise:


 


	
  13.6.1

  	
  the Buyer may terminate such contract or
  agreement; and

  
	
   

  	
   

  
	
  13.6.2

  	
  provided that notice of such termination takes
  place within 1 month of the Buyer becoming aware of such contract or
  agreement transferring to it, the Seller shall

  



 


29

















 


	
   

  	
  indemnify and hold the Buyer harmless against all
  Demands (including any liability to Taxation and legal and other professional
  fees and expenses) that the Buyer may suffer, incur, sustain, pay or be put
  to:

  
	
   

  	
   

  
	
   

  	
   13.6.2.1

  	
  by reason of, on account of or arising out of such
  termination; or

  
	
   

  	
   

  	
   

  
	
   

  	
   13.6.2.2

  	
  arising from such contract or collective agreement
  before the Effective Time, if the Buyer does not terminate such contract or
  collective agreement.

  



 


13.7            Without prejudice to the other provisions
of this clause 13, the Seller shall, at its own expense, give the Buyer such
assistance as the Buyer may reasonably require to contest any Demand by any
person employed or engaged in the Business at or before the Effective Time or
their representatives resulting from or in connection with this agreement,
subject always to the Seller’s obligations under the DPA 1998.


 


13.8            The Seller shall, on request by the Buyer
and at the Seller’s expense, provide to the Buyer such information or documents
as the Buyer may reasonably require relating to the terms of employment,
pension and life assurance arrangements, health benefits, welfare or any other
matter concerning the Transferring Employee or any trade union, employee
representative or body of employees or their representatives or relating to
collective agreements or collective or individual grievances in the period
before the Effective Time.


 


13.9            All wages,
salaries, expenses, commission, accrued bonus, sick pay, maternity, paternity
and adoption pay, liabilities in respect of income tax and National Insurance
Contributions and any other periodic outgoings due or accruing (including
contractual holiday pay, lieu days and any arrears in holiday pay) in respect
of the Transferring Employee which relates to any period:


 


	
  13.9.1

  	
  after
  the Completion Date shall be borne by the Buyer; and

  
	
   

  	
   

  
	
  13.9.2

  	
  on or before the Completion Date shall be
  borne by the Seller.

  



 


14.             The Business Contracts


 


14.1            The Seller shall, with effect from the
Effective Time, assign to the order of the Buyer, or procure the assignment to
the order of the Buyer of, all the Business Contracts which are capable of
assignment without a Third Party Consent.


 


30

















 


14.2            If any of the Business Contracts cannot be
assigned or novated without obtaining a Third Party Consent, then the Seller
and the Buyer shall use their respective reasonable endeavours to obtain such
consents.


 


14.3            Insofar as any of the Business Contracts
cannot be assigned or novated to the Buyer without Third Party Consent then
pending such consent or where any of the Business Contracts are incapable of
transfer to the Buyer by assignment, novation or other means then:


 


14.3.1         the Seller shall at the Buyer’s request use
its reasonable endeavours with the co-operation of the Buyer to procure such
assignment or novation;


 


14.3.2         unless and until any such Business Contract
is assigned or novated, the Seller shall for a period of not less than 18
months after Completion continue its corporate existence and shall hold such
Business Contract and any monies, goods or other benefits received thereunder
as trustee for the Buyer and its successors in title absolutely;


 


14.3.3         the Buyer shall (if such sub-contracting is
permissible and lawful under the Business Contract in question), act as the
Seller’s sub-contractor, and to the extent they are Assumed Liabilities perform
all the obligations of the Seller under such Business Contract and, where
sub-contracting is not permissible, the Buyer shall perform such obligations as
agent for the Seller;


 


14.3.4         the Seller shall not from Completion take
any action or otherwise do anything in relation to the Business Contracts
without the Buyer’s prior written consent save in respect of any Business
Contracts the performance of which has been completed in part by the Seller
prior to the Completion and the action or deed solely relates to such partial
performance and without effect or import to any other part of the Business
Contract or its performance by the Buyer;


 


14.3.5         unless and until any such Business Contract
is assigned or novated, the Seller shall (so far as it lawfully may) give all
such reasonable assistance as the Buyer may reasonably require (at the Seller’s
cost) to enable the Buyer to enforce its rights under such Business Contract
and (without limitation) shall, on prior written request, provide access to all
relevant books, documents and other information in relation to such Business
Contract as the Buyer may require from time to time.


 


31

















 


14.4            In addition to the provisions of clause
14.3 the following provisions shall apply in relation to those Business
Contracts which are Agency Contracts:


 


14.4.1         The Seller shall pay to the relevant Agents
(and indemnify and hold the Buyer harmless against any Demands for) commissions
arising under the Agency Contracts in respect of orders placed up to the
Effective Time notwithstanding such commissions may not be due and payable
until after the Effective Time.


 


14.4.2         If the Agency Contract has not been
assigned or novated within 180 days of Completion the Seller may at any time
thereafter give the Buyer 30 days prior written notice of its intention to
terminate the Agency Contract and shall provide the Buyer with a draft of its
intended notice of termination (“Termination Notice”).


 


14.4.3         The Termination Notice shall specify the
name and address of the Agent upon whom it is to be served, details of the
Agency Contract to be terminated and the number of days or months from the date
of the Termination Notice after which the Agency Contract will terminate, which
shall be not less than any Termination Notice period specified in the Agency
Contract or if greater or none is so specified the Termination Notice period
that applies under the governing law of the Agency Contract or such other
notice period as the Buyer and the Seller may agree.


 


14.4.4         The Seller shall co-operate with any reasonable
request made by the Buyer in connection with the content or giving of the
Termination Notice but shall not thereby be obliged to agree to any extension
of the applicable termination notice period under sub-clause 14.4.3.


 


14.4.5         The Seller and the Buyer shall co-operate
to ensure that any obligations on the part of the Seller under the Agency
Contracts or under the governing law of the Agency Contracts which apply upon
their termination are so far as reasonably possible duly satisfied.


 


14.4.6         Without prejudice to any liability on the
part of the Seller to the Buyer for any breach of the Agency Warranties or the
provisions of this clause 14.4 the Buyer’s indemnity under clause 14.8 shall
apply in relation to any Demand made by the Agent by reason of the Seller’s
termination of the Agency Contract and the Buyer shall have the conduct of any
such Demands that may be brought by the Agent in accordance with the provisions
of clause 20; and


 


32

















 


14.4.7         the obligations of the Buyer and the Seller
pursuant to clause 14.3 shall cease in relation to any Agency Contract for
which a Termination Notice is served upon expiry of such Termination Notice.


 


14.5            Nothing in this agreement shall be
construed as an assignment or attempted assignment if such assignment or
attempted assignment would constitute a breach of such Business Contract.


 


14.6            Nothing in this clause 14 or elsewhere in
this agreement shall have the effect of making the Buyer liable in any way
under any guarantees or warranties given by the Seller to any Customer in
relation to goods sold or services rendered by the Seller before the Effective
Time, the liability for which shall remain absolutely with the Seller.


 


14.7            The Seller shall indemnify and hold the
Buyer harmless from and against all Demands of whatsoever nature relating to
and payable in respect of the Business or Assets which are attributable to the
period up to and including the Effective Time, including any act or omission on
the part of the Seller in relation to the Business Contracts or any defects in,
or alleged defects in, goods supplied or services provided prior to the
Effective Time, and in particular any claim under any warranty or under the
Sale of Goods Act 1979 or the Supply of Goods Act 1994.


 


14.8            The Buyer shall indemnify and hold the
Seller harmless from and against all Demands of whatsoever nature relating to
and payable in respect of the Business or Assets which are attributable to the
period after the Effective Time, including any act or omission on the part of
the Buyer in relation to the Assumed Liabilities under Business Contracts or
(subject to the terms of the Toll Manufacturing Agreement) any defects in, or
alleged defects in, goods supplied or services provided after the Effective
Time, and in particular any claim under any warranty or under the Sale of Goods
Act 1979 or the Supply of Goods Act 1994.


 


15.             Future Trading and Trade Enquiries


 


For a period of 18 months following Completion, the Seller shall
promptly refer to the Buyer all enquiries relating to the Business, including
enquiries relating to orders for any stocks, spares, parts, accessories and
other equipment manufactured or sold, or any services provided in connection
with the Business, which the Seller may receive after Completion.


 


33

















 


16.             Book Debts


 


16.1            The Buyer shall not acquire the Book Debts,
which shall remain the property and responsibility of the Seller.


 


16.2            Notwithstanding that the Book Debts are Excluded
Assets, the Buyer shall (at the Seller’s cost) (where such cost is incurred
with a third party) use reasonable endeavours to collect the Book Debts on the
Seller’s behalf (which may include at the Buyer’s sole discretion withholding
further supplies), but the Buyer shall not be bound to withhold further
supplies or take any legal proceedings or other enforcement steps to recover
the same. Any money received by the Buyer in the course of collecting any Book
Debts from a person who is also indebted to the Buyer shall be deemed to have
been paid in or towards the discharge of the oldest Book Debt except to the
extent that the debtor in question has disputed such Book Debt or any aspect of
the order to which it relates.  Nothing
in this clause 16.2 shall oblige the Buyer to take or omit to take any action
which in the reasonable opinion of the Buyer is likely to affect the Goodwill
of the Business.


 


16.3            In order that the Buyer can comply with it
obligations under clause 16.2 the Seller shall at or following Completion
provide the Buyer with full details of the Book Debts so as to enable the Buyer
to pursue recovery.


 


16.4            The Seller shall not seek to recover the
Book Debts directly and shall not do anything to hinder their collection by the
Buyer and, in particular, the Seller shall not assign any of the Book Debts to
any third party. The Seller shall keep the Buyer properly informed of any
payments that may be made to the Seller in respect the Book Debts.


 


16.5            Within five Business Days of the end of
each month, commencing after Completion, the Buyer shall provide the Seller
with a statement of the Book Debts collected in that month (or, in the case of
the first such month, the period between Completion and the end of such month)
and shall remit to the Seller the amounts received during that period.


 


16.6            If it becomes apparent that recovery of any
Book Debt is not likely to be possible within a reasonable period and in any
event within the 3 month period unless legal proceedings are instituted, the
Buyer shall advise the Seller in writing. The Seller shall give 10 days notice
to the Buyer of its intention to take, consider taking, threaten or generally
seek enforcement of its rights to recovery of any unrecoverable Book Debt.


 


34

















 


16.7            The obligations of the Buyer and the Seller
under this clause 16 shall cease absolutely three months after Completion, save
that:


 


	
  16.7.1

  	
  if thereafter any payments are made to the Buyer
  in respect of Book Debts, the Buyer shall remit the same to the Seller; and

  
	
   

  	
   

  
	
  16.7.2

  	
  the Buyer shall (at the Seller’s cost) reasonably
  co-operate in any proceedings brought by the Seller for recovery of any Book
  Debts but for the avoidance of doubt such co-operation shall not include the
  Buyer withholding further supplies, or itself taking or being a party to any
  legal proceedings or other enforcement steps to recover the same.

  



 


17.             Data Protection


 


17.1            Notwithstanding any other provision of this
agreement, the Buyer undertakes that, on receipt of the Customer Database and
the Employee Database on the Completion Date:


 


	
  17.1.1

  	
  it shall duly observe all its obligations as a
  Data Controller under the DPA 1998 which arise in connection with processing
  Customer Data and Employee Data; and

  
	
   

  	
   

  
	
  17.1.2

  	
  it shall send a fair processing notice to each
  Customer identified in the Customer Database and the Transferring Employee in
  the form set out in Schedule 9 within one week of the Completion Date;

  



 


18.             Restrictive Covenants


 


18.1            The Seller covenants that it shall not (and
that it shall procure that no member of the Seller’s Group shall), during the
period of five years beginning with the Completion Date, carry on or be
employed, engaged or interested directly or indirectly (whether by acquisition
or otherwise) in any part of the Business.


 


18.2            The Seller covenants that it shall not (and
that it shall procure that no member of the Seller’s Group shall) during the
period of five years beginning with the Completion Date, deal with or seek the
custom for the supply of:


 


	
  18.2.1

  	
  any Pipewrap products to any person that is at the
  Completion Date, or that has been at any time during the period of 12 months
  immediately preceding that date, an agent, client or customer of any part of
  the Business; or

  



 


35

















 


	
  18.2.2

  	
  any Tapes products to the Private Label Customer.

  



 


18.3            The Seller covenants that it shall not (and
that it shall procure that no member of the Seller’s Group shall), at any time
during the period of five years beginning with the Completion Date:


 


	
  18.3.1

  	
  offer employment to, enter into a contract for the
  services of, or attempt to entice away from the Buyer the Transferring
  Employee;

  
	
   

  	
   

  
	
  18.3.2

  	
  procure, facilitate the making any such offer or
  attempt by any person other than by virtue of providing references in the
  ordinary course.

  



 


18.4            The undertakings in this clause 18 are
intended for the benefit of the Buyer and apply to actions carried out by the
Seller (or any member of the Seller Group) in any capacity, and whether
directly or indirectly, on behalf of the Seller (or any member of the Seller
Group), or on behalf of any other person or jointly with any other person.


 


18.5            The Seller may without being in breach of
this clause 18:


 


	
  18.5.1

  	
  hold for investment purposes only any units of any
  authorised unit trust or not more than 3% of any class of shares or
  securities of any company traded on any recognised stock exchange; or

  
	
   

  	
   

  
	
  18.5.2

  	
  carryout its obligations under the Toll
  Manufacturing Agreement.

  



 


18.6            The provisions of clause 18.2 shall not
apply to the activities of a business acquired by Seller after the Completion
if such acquisition is completed after four years and six months of Completion
or if the Seller closes or divests itself completely of all those parts of the
acquired business whose activities would otherwise be in breach of clause 18.1
or 18.2 within six months after its acquisition.


 


18.7            Each of the covenants in this clause 18 is:


 


	
  18.7.1

  	
  a separate undertaking by the Seller and shall be
  enforceable by the Buyer separately and independently of its right to enforce
  any one or more of the covenants in this clause 18; and

  
	
   

  	
   

  
	
  18.7.2

  	
  considered fair and reasonable by the parties, but
  if any restriction is found to be unenforceable but would be valid if any
  part of it were deleted, or the period or 

  



 


36

















 


	
   

  	
  area of application reduced, the restriction shall
  apply with such modification as may be necessary to make it valid and
  effective to the maximum available period or area as is enforceable under
  law.

  



 


18.8            The consideration for the undertakings
contained in this clause 18 is included in the Completion Amount.


 


18.9            After the Completion, the Buyer and the
Buyer Group shall have no right to use the Seller Marks (except to the extent
they may include any products or packaging supplied by the Seller under the
Toll Manufacturing Agreement) or the Servicised Mark.  The Seller owns and shall continue to own all
Seller Marks, and the Buyer shall have no claim or right in the Seller
Marks.  The Seller and its affiliates
shall retain all rights in the Seller Marks, and shall be entitled to all uses
of the Seller Marks that existed prior to this Agreement, as well as to any and
all future uses of the Seller Marks anywhere throughout the world.


 


19.             Confidentiality and Announcements


 


19.1            Each party undertakes to keep confidential
all the information that it has acquired about the other party and to use such
information only for the purposes contemplated by this agreement.


 


19.2            Except as otherwise provided in this
agreement, the Seller shall, at Completion, deliver up to the Buyer, or as the
Buyer may direct, all records, papers and documents in its possession or under
its control which contain Business Information.


 


19.3            Except as otherwise provided in this
agreement, the Seller undertakes to the Buyer that, at any time after exchange
of this agreement, it shall not, and it shall procure that no member of the
Seller Group, nor their respective consultants, employees or officers shall
(directly or indirectly):


 


	
  19.3.1

  	
  disclose to any person whatsoever or use to the
  detriment of the Buyer, the Buyer’s Group or the Business; or

  
	
   

  	
   

  
	
  19.3.2

  	
  otherwise makes use of; or

  
	
   

  	
   

  
	
  19.3.3

  	
  through any failure to exercise all due care and
  diligence cause any unauthorised disclosure of,

  



 


37
















 


the Business
Information or  Know-How or any other
secret or confidential information concerning the Business or Assets.


 


19.4            No party is required to keep confidential
or to restrict its use of information that:


 


19.4.1         is or becomes public knowledge other than
as a direct or indirect result of being disclosed in breach of this agreement;
or


 


19.4.2         the parties agree in writing is not
confidential; or


 


19.4.3         has been lawfully disclosed to the relevant
party by a third party and that it has acquired free from any obligation of
confidence to any other person.


 


19.5            Either party may disclose any information
that it is otherwise required to keep confidential under this clause 19:


 


19.5.1         to such professional advisers, consultants
and employees or officers of its group as are reasonably necessary to advise on
this agreement, or to facilitate the Transaction, provided that the disclosing
party procures that the people to whom the information is disclosed keep it
confidential as if they were that party; or


 


19.5.2         with the written consent of the other
party; or


 


19.5.3         to the extent that the disclosure is
required:


 


	
  19.5.3.1

  	
  by law; or

  
	
   

  	
   

  
	
  19.5.3.2

  	
  by a regulatory body, tax authority or securities
  exchange including but not limited to all information announcements required
  to be filed by the Buyer from time to time in respect of this agreement by
  the U.S Securities and Exchange Commission; or

  
	
   

  	
   

  
	
  19.5.3.3

  	
  to make any filing with, or obtain any
  authorisation from, a regulatory body, tax authority or securities exchange;
  or

  
	
   

  	
   

  
	
  19.5.3.4

  	
  under any arrangements in place under which
  negotiations relating to terms and conditions of employment are conducted; or

  
	
   

  	
   

  
	
  19.5.3.5

  	
  to protect the disclosing party’s interest in any legal proceedings,

  



 


38

















 


but shall use
reasonable endeavours to consult the other party and to take into account any
reasonable requests it may have in relation to the disclosure before making it.


 


19.6            Each party shall supply the other with any
information about itself, its group or this agreement as the other may
reasonably require for the purposes of satisfying the requirements of a law,
regulatory body or securities exchange to which the requiring party is subject.


 


19.7            No announcement, circular or other
publicity in connection with the subject matter of this agreement (other than
as permitted by this agreement) shall be made prior to Completion by or on
behalf of the Seller or the Buyer without the approval of the other as to its
content, form and manner of publication (such approval not to be unreasonably
withheld or delayed), except that any announcement, circular or other publicity
required to be made or issued by the Seller or the Buyer pursuant to any legal
or regulatory authority may be made or issued by the Seller or the Buyer
without such approval. The Buyer and the Seller shall consult together on the
form of any such announcement, circular or other publicity and the other party
shall promptly provide such information and comment as the party issuing such
announcement, circular or other publicity may from time to time reasonably
request.


 


20.             Conduct of Indemnity Claims


 


20.1            The provisions of this clause 20 shall
apply to any claim made by a third party against the Seller or the Buyer which
is reasonably expected will give rise to an Indemnity Claim (and hereinafter
referred to as an Indemnity Claim).


 


20.2            The Indemnified Party shall within a
reasonable period of time of becoming aware of the same inform the Indemnifier
in writing of any claim by a third party which falls within clause 20.1.  For the avoidance of doubt a delay in giving
such notice shall not discharge the Indemnity Claim but to the extent that such
delay increases the loss, damage or expenses to the Indemnified Party, such
loss, damage or expense shall not be recoverable from the Indemnifier.


 


20.3            Subject to the Indemnified Party being
indemnified and secured to its reasonable satisfaction in accordance with
clause 20.4 and subject to the provisions of sub-clause 20.3.3:


 


39

















 


20.3.1         the Indemnified Party shall take such
action and give such information and assistance as the Indemnifier may
reasonably request in writing to avoid, dispute, resist, mitigate, compromise
or defend any such Indemnity Claim and to appeal against any judgment given in
respect thereof including (without limitation) applying to postpone so far as
legally possible the payment of any Taxation; and


 


20.3.2         on the written request of the Indemnifier,
allow the Indemnifier conduct of any legal proceedings of whatsoever nature
arising out of any such Indemnity Claim (“Proceedings”)
provided that the Indemnifier shall keep the Indemnified Party fully informed
at all times in respect of the Proceedings and take or refrain from taking such
actions as the Indemnified Party may reasonably request from time to time. For
this purpose, the Indemnified Party shall (at the Indemnifier’s expense) give
or procure to be given to the Indemnifier all such reasonable assistance as the
Indemnifier may reasonably require and shall appoint such solicitors and other
professional advisers as the Indemnifier may nominate with the agreement of the
Indemnified Party (such agreement not to be unreasonably withheld or delayed)
to act on behalf of the Indemnified Party in accordance with the Indemnifier’s
instructions.


 


20.3.3         Where any Proceedings are taken over by the
Indemnifier in accordance with sub-clause 20.3.3:


 


	
  20.3.3.1

  	
  the Indemnifier shall keep the Indemnified Party
  fully and promptly informed of the Proceedings; and

  
	
   

  	
   

  
	
  20.3.3.2

  	
  the Indemnifier shall not make any settlement or
  compromise of the Third Party Claim which is the subject of Proceedings, nor
  agree to any matter in the conduct of such Proceedings which may affect the
  amount of the liability in connection with such Indemnity Claim without the
  prior approval of the Indemnified Party, such approval not to be unreasonably
  withheld or delayed, and provided always that, in the event of the
  Indemnified Party refusing approval of such settlement or compromise, the
  Indemnifier shall  have no liability in
  respect of the Indemnity Claim arising therefrom in excess of the figure at
  which they could have settled or compromised the relevant Indemnity Claim and
  the Indemnified Party shall be liable for any costs incurred since

  



 


40

















 


	
   

  	
  the proposed date of settlement or compromise. For
  the avoidance of doubt it shall be reasonable for the Indemnified Party to
  refuse its approval to any settlement or compromise of the Proceedings unless
  the terms of the settlement or compromise are themselves subject to the
  relevant indemnity.

  



 


20.4            Where the Indemnifier takes over the
conduct of any Proceedings pursuant to the provisions of sub-clause 20.3.3 the
Indemnifier shall indemnify and secure the Indemnified Party to its reasonable
satisfaction in respect of all past, present and future costs, charges,
expenses, damages, counterclaims, Taxation and other awards which may be
reasonably and properly incurred or awarded against the Indemnified Party as a
consequence of any actions taken by or at the request of the Indemnifier
pursuant to clause 20.3.


 


21.             Guarantees


 


21.1            Darex unconditionally and irrevocably
guarantees to the Buyer (and any relevant Buyer’s Group company) the due and
complete performance by the Seller (and any relevant Seller  Group company) of all its and those
obligations under this agreement and the other documents referred to in this
agreement in the terms set out in Schedule 10 and in this respect Darex is
referred to as “Guarantor” and the Buyer (and any relevant Buyer’s Group
company) as the “Guaranteed Party” and the Seller (and any relevant Seller
Group company) as the “Principal”.


 


21.2            Chase Corp. unconditionally and irrevocably
guarantees to the Seller (and any relevant Seller Group company) the due and
complete performance by the Buyer (and any relevant Buyer’s  Group company) of all its and those
obligations under this agreement and the other documents referred to in this
agreement in the terms set out in Schedule 10 and in this respect Chase Corp.
is referred to as “Guarantor” and the Seller (and any relevant Seller Group
company) as the “Guaranteed Party” and the Buyer (and any relevant Buyer’s
Group company) as the “Principal”.


 


21.3            Chase Corp. warrants that it has all
requisite power and authority and has taken all necessary corporate actions to
enable it to enter into and perform this agreement which constitutes a binding
obligation on Chase Corp. in accordance with its terms.


 


41

















 


22.             Further Assurance


 


At their own
expense each party shall promptly execute and deliver all such documents, and
do all such things, as may be reasonably required by the other party for the
purpose of giving full effect to the provisions of this agreement.


 


23.             Assignment


 


23.1            Except as otherwise provided in this
agreement, no party may assign, or grant any Encumbrance over or deal in any
way with any of its rights under this agreement or any document referred to in
it.


 


23.2            Each person that has rights under this
agreement is acting on its own behalf.


 


23.3            Each of the Seller and the Buyer may assign
its rights under this agreement (or any document referred to in this agreement)
but not its obligations to, in the case of the Seller to a member of the Seller
Group, or in the case of the Buyer to a member of the Buyer’s Group.


 


24.             Whole Agreement


 


24.1            This agreement, and any documents referred
to in it, constitute the whole agreement between the parties and supersede any
previous arrangement, understanding or agreement between them relating to the
subject matter they cover.


 


24.2            Nothing in this clause 24 operates to limit
or exclude any liability for fraud.


 


25.             Variation and Waiver


 


25.1            A variation of this agreement shall be in
writing and signed by or on behalf of each party.


 


25.2            Any waiver of any right under this
agreement is only effective if it is in writing and signed by the waiving or
consenting party and it applies only in the circumstances for which it is given
and shall not prevent the party who has given the waiver or consent from
subsequently relying on the provision it has waived.


 


25.3            No failure to exercise or delay in
exercising any right or remedy provided under this agreement or by law
constitutes a waiver of such right or remedy or shall prevent any future
exercise in whole or in part thereof.


 


42

















 


25.4            No single or partial exercise of any right
or remedy under this agreement shall preclude or restrict the further exercise
of any such right or remedy.


 


25.5            Unless specifically provided otherwise,
rights arising under this agreement are cumulative and do not exclude rights
provided by law.


 


26.             Costs


 


Unless otherwise provided, all costs and expenses in connection with
the negotiation, preparation, execution and performance of this agreement, and
any documents referred to in it, shall be borne by the party that incurred the
costs.


 


27.             Notice


 


27.1            A notice given under this agreement:


 


27.1.1         shall be in writing in the English language
(or be accompanied by a properly prepared translation into English);


 


27.1.2         shall be sent for the attention of the
person, and to the address, given in this clause 27 (or such other address or
person as the relevant party may notify to the other party); and


 


27.1.3         shall be:


 


27.1.3.1          delivered personally; or


 


27.1.3.2          delivered by commercial courier; or


 


27.1.3.3          sent by pre-paid first-class post or
recorded delivery; or


 


27.1.3.4          (if the notice is to be served by post
outside the country from which it is sent) sent by airmail.


 


27.2            The addresses for service of notice are:


 


27.2.1         Grace Construction Products Limited


 


Address:  635 Ajax Avenue, Slough, Berkshire  SL1 4BH


 


For the attention
of: Jens Ebinghaus


 


43

















 


27.2.2         Chase Protective Coatings Limited


 


Address: Harbour
Road, Rye, East Sussex  TN31 7TE


 


For the attention
of: David Greenman


 


27.2.3         Darex


 


Address:  635 Ajax Avenue, Slough, Berkshire  SL1 4BH


 


For the attention
of: David Michael


 


27.2.4         Chase Corp.


 


Address:  26 Summer Street, Bridgewater, Massachusetts
02324, United States of America


 


For the attention
of: Peter Chase


 


27.3            A notice is deemed to have been received:


 


27.3.1         if delivered personally, at the time of
delivery; or


 


27.3.2         if delivered by commercial courier, at the
time of signature of the courier’s receipt; or


 


27.3.3         if sent by pre-paid first class post or
recorded delivery, 48 hours from the date of posting; or


 


27.3.4         if sent by airmail, five days from the date
of posting; or


 


27.3.5         if deemed receipt under the previous
paragraphs of this clause 27.3 is not within business hours (meaning 9.00 am to
5.30 pm Monday to Friday on a day that is a Business Day), when business next
starts in the place of deemed receipt.


 


27.4            To prove service, it is sufficient to prove
that in the case of post, that the envelope containing the notice was properly
addressed and posted.


 


27.5            For the avoidance of doubt, a notice under
this agreement shall not be valid if sent by e-mail.


 


44

















 


28.             Severance


 


28.1            If any provision of this agreement (or part
of a provision) is found by any court or administrative body of competent
jurisdiction to be invalid, unenforceable or illegal, the other provisions
shall remain in force.


 


28.2            If any invalid, unenforceable or illegal
provision would be valid, enforceable or legal if some part of it were deleted,
the provision shall apply with whatever modification is necessary to give
effect to the commercial intention of the parties.


 


29.             Agreement Survives Completion


 


This agreement
(other than obligations that have already been fully performed) remains in full
force after Completion.


 


30.             Third Party Rights


 


This agreement
and the documents referred to in it are made for the benefit of the parties to
them and their successors and permitted assigns, and are not intended to
benefit, or be enforceable by, anyone else.


 


31.             Successors


 


The rights and
obligations of the parties shall continue for the benefit of and shall be
binding on their respective successors and assigns.


 


32.             Counterparts


 


This agreement
may be executed in any number of counterparts, each of which is an original and
which together have the same effect as if each party had signed the same
document.


 


33.             Language


 


If this agreement
is translated into any language other than English, the English language text
shall prevail.


 


45

















 


34.             Governing Law and Jurisdiction


 


34.1            This agreement and any disputes or claims
arising out of or in connection with its subject matter or formation (including
non-contractual disputes or claims) are governed by and construed in accordance
with the law of England.


 


34.2            The parties irrevocably agree that the
courts of England have exclusive jurisdiction to settle any dispute or claim
that arises out of or in connection with this agreement or its subject matter
or formation (including non-contractual disputes or claims).


 


This agreement has been executed as a deed
and is delivered and takes effect on the date stated at the beginning of it.


 


46
















 


Schedule
11


 


Earn Out Payments


 


1.                                      Definitions


 


In this Schedule 11 the
following definitions shall apply:


 


“Acquired
Person” means a Person designated by Buyer as an Acquired Person by
written notice (specifying the Waterproofing Products with respect to which
such Person is designated an Acquired Person) delivered to Seller promptly
after such Person becomes an Affiliate of Buyer who:


 


(i) becomes an
Affiliate of Buyer after the Completion Date;


 


(ii) is not and has
never been an Earn Out Third Party;


 


(iii) independently
from Buyer, any Affiliate of Buyer and any Earn Out Third Party, developed and
manufactured Waterproofing Product that included, incorporated or otherwise
utilised any formulas which are the same or similar to any of the formulas in
the Earn Out Intellectual Property Rights (such specific Waterproofing Product
is designated “Independent Product”) at least six months before such Person
became an Affiliate of Buyer; and


 


(iv) generated Net
Sales of such Independent Product of more than £25,000 (excluding Net Sales to
Buyer, any Affiliate of Buyer or any Earn Out Third Party) before such Person
became an Affiliate of Buyer.


 


“Acquired
Product” means Independent Product that is manufactured or sold by
an Acquired Person to a Person other than the Buyer, an Affiliate of the Buyer
or an Earn Out Third Party.


 


“Affiliate”
means any company, partnership or other business entity which directly or
indirectly controls, is controlled by, or is under common control with a
specified Person.  Solely for purposes of
this definition, “Control” of a specified Person that is an entity shall mean
the possession of the power to direct or cause the direction of the management
and 


 


86

















 


policies of such Person, whether
through the ownership of voting securities, by contract, or otherwise.


 


“Earn Out
Intellectual Property Rights” means the following formulas but does
not include the related process Know How: 
4000 UK Compound (covered by patent EP0606298-B1); Standard UK Compound
for Pipewrap; and High Temperature UK Compound for Pipewrap.


 


“Earn Out
Product” means:  (i) any
Waterproofing Product which is manufactured or sold by the Buyer, any Affiliate
of the Buyer or any Earn Out Third Party in or from the Buyer’s existing
facility at Harbour Road, Rye, East Sussex (whether or not hereafter owned or
occupied by the Buyer and) and whether or not such Waterproofing Product
includes, incorporates or otherwise utilises the Earn Out Intellectual Property
Rights; and (ii) any Transferred Product; and for the avoidance of any
doubt an Earn Out Product shall not include any existing product or service
sold or provided by the Buyer or any Affiliate of the Buyer to any Person other
than the Buyer or any Affiliate of the Buyer at the date of this agreement
except any such products manufactured or sold by the Buyer or any Affiliate of
the Buyer in or from the Buyer’s facility at Harbour Road, Rye, East Sussex.


 


“Earn Out
Third Party” means a Person other than the Buyer or any Affiliate of
the Buyer that has been assigned, transferred, licensed or otherwise granted
rights with respect to all or any part of the Earn Out Intellectual Property
Rights directly or indirectly by the Buyer or any Affiliate of the Buyer, and
such Earn Out Third Party’s Affiliates.


 


“Net Sales”
means the gross amount invoiced for the sale or lease of any Product less
credits for returns of unused Product and allowances, sales taxes, freight and
other such charges; provided however, that unless an Affiliate of the seller or
lessor of such Product to which any such sale or lease is made is an actual
consumer of such Product, sales of such Product to such Affiliate of the seller
or lessor of such Product shall not be included within such computations, but
resales or leases of such Product by such Affiliate of the seller or lessor of
such Product shall be included as Net Sales.


 


87
















 


“Person”
means any individual, partnership, firm, trust, association, company, limited
liability company, corporation, joint venture, unincorporated organization,
other business entity or governmental authority.


 


“Product”
means Earn Out Product, Acquired Product or Independent Product, as the case
may be.


 


“Transferred
Product” means any Waterproofing Product that includes, incorporates
or utilizes the Earn Out Intellectual Property Rights which is manufactured or
sold from any location other than Rye, East Sussex by the Buyer, any Affiliate
of the Buyer or any Earn Out Third Party; provided however, that Transferred
Product does not include Acquired Product.


 


“Waterproofing
Product” means high density, cross-laminated polyethylene membranes;
low density polyethylene membranes; and aluminium and high density
cross-laminated polyethylene membranes that, in each case, have a release
liner, are treated with rubberized bitumen and are used to prevent water, air,
methane and radon infiltration; provided however, that Waterproofing Product
shall exclude products that are applied as bridge deck membrane and products
that include a saturated inner layer.


 


2.             Earn Out Calculation


 


For a period of five (5) calendar
years commencing 1st January 2010,
the Buyer shall pay the Seller an Earn Out Payment equal to twenty percent
(20%) of Net Sales of Earn Out Products that exceed £1,000,000 in each calendar
year.  Example shall be:


 


Year 1 Net Sales of Earn Out
Product total £900,000, no Earn Out Payment is due;


 


Year 2 Net Sales of Earn Out
Product total £1,500,000, excess is £500,000 and at 20% of the excess the Earn
Out Payment would be £100,000;


 


Year 3 Net Sales of Earn Out
Product total £900,000, no Earn Out Payment is due.


 


Earn Out Payments due under
this Agreement shall be calculated and payable on an annual basis corresponding
to a calendar year.  The calculated Earn
Out Payment for each calendar 


 


88

















 


year shall be paid by the
Buyer to the Seller within ninety (90) days following the end of such calendar
year.


 


3.             Earn Out Accounting


 


An accounting report of the
calculation of the Earn Out Payment by the Buyer shall accompany each Earn Out
Payment in writing and shall be provided within ninety (90) days following the
end of each calendar year even if no Earn Out Payment is payable for that
calendar year. The report shall include the quantity of Earn Out Products sold
or transferred, the Net Sales of Earn Out Product (broken down for each Earn
Out Product and location), the total of Net Sales of Earn Out Product and the
amount of the Earn Out Payment attributable to the Net Sales of Earn Out
Product.  The accounting report shall
include complete information broken down for the Buyer, each Affiliate of the
Buyer (including without limitation each Acquired Person) and each Earn Out
Third Party.  In addition to the annual
accounting report, within 15 days following the end of each calendar quarter,
the Buyer shall provide to the Seller an estimate of the amount of Earn Out
Payment that Buyer reasonably expects will be paid in respect of the current
calendar year based on year-to-date sales (and the related “run rate”) as of
the end of such calendar quarter.


 


4.             Earn Out Audit


 


The Buyer shall keep
records, files and books of account sufficient to:


 


(i)            verify the
accuracy and completeness of the annual accounting report provided pursuant to
paragraph 3 of this Schedule 11; such records, files and books of account shall
be preserved until at least the first anniversary after the end of the relevant
calendar year; and


 


(ii)           support the Buyer’s
designation of any Person as an Acquired Person; such records, files and books
of account shall be preserved until the sixth (6th) anniversary of the
Completion Date.


 


Upon notice to the Buyer
delivered within ninety (90) days of being provided with the accounting report
by the Buyer pursuant to paragraph 3 of this Schedule 11, the Seller shall 


 


89

















 


have the right to carry out
an independent audit of such accounting report, the accuracy of the calculation
of the Earn Out Payment, and, if the Buyer has designated (during or prior to
such calendar year) an Acquired Person, whether such Person is in fact an
Acquired Person.  The independent audit
shall be conducted by a certified public accountant of the Seller’s choice who
is approved by the Buyer (such approval not to be unreasonably withheld or
delayed and the Buyer acknowledges that any “Big 4” accounting firm is deemed
approved) (the “Accountant”).  With the
approval of the Seller, in the Seller’s sole discretion, the Accountant may
retain an independent 3rd party industrial engineering expert (the “Consultant”)
to assist in the audit.  The Consultant
shall be proposed by the Accountant and mutually agreed upon by the Seller and
the Buyer (such approval not to be unreasonably withheld or delayed) The
Accountant and the Consultant shall each be bound by a Confidentiality
Agreement to be given in favour of the Buyer. 
The Buyer agrees to use reasonable endeavours to provide the Accountant
and the Consultant access, upon reasonable notice and during normal business
hours, to the rubberized bitumen blending process and those records, files and
books of account reasonably deemed necessary by the Accountant for the sole
purpose of providing a determination of the accuracy of the accounting report,
the accuracy of the calculation of the Earn Out Payment and whether a Person
designated by Buyer as an Acquired Person is in fact an Acquired Person.  The Accountant and the Consultant shall be
escorted by Buyer personnel while on Buyer’s manufacturing premises and shall
comply with all reasonable health, safety, environmental and security policies
of Buyer while on the Buyer’s premises. 
Such audit shall be at the Seller’s sole expense; provided however, that
in its sole discretion, the Seller may terminate the audit at any time and
discharge the Accountant and the Consultant.


 


The amount of any
underpayment of the Earn Out Payment(s) determined by the Accountant shall
be paid by the Buyer to the Seller within fifteen (15) calendar days following
the Accountant giving the Buyer and the Seller written notice of his or her
determination.  If the amount of any
underpayment of Earn Out Payment for a specific calendar year as determined by
the Accountant exceeds twenty percent (20%) of the amount of Earn Out Payment
actually paid to the Seller for such year prior to the commencement of such
audit, an additional twenty percent (20%) of the amount of the underpayment of
the Earn Out Payment for such calendar year as determined by the Accountant
shall be paid by the Buyer to the Seller as set forth in the preceding
sentence.


 


90

















 


5.             License or Other Transfer


 


The Buyer shall ensure that
each Affiliate of the Buyer (including without limitation any Acquired Person)
and each Earn Out Third Party, if any, agrees to be subject to the terms of
this Schedule 11, including without limitation, the Buyer shall cause each
Affiliate of the Buyer (including without limitation any Acquired Person) and
each Earn Out Third Party to agree to provide the reports provided under
paragraph 3 of this Schedule 11 and to keep the records, files and books of
account, provide such access (including without limitation access to
manufacturing facilities) and to permit such audits as are provided under
paragraph 4 of this Schedule 11.


 


Promptly following any
assignment, transfer, license or other grant of rights with respect to the Earn
Out Intellectual Property Rights directly or indirectly from the Buyer or any
of its Affiliates to any Person or the acquisition of a Person that Buyer
believes may be designated an Acquired Person, the Buyer shall provide to the
Seller written notice of such assignment, transfer, license, grant or
acquisition.


 


91

















 




	
  EXECUTED AS A DEED

  	
   

  	
   

  
	
  by

  	
  /s/ David Michael

  	
   

  	
   

  
	
  for and on behalf of

  	
   

  	
  /s/ David Michael

  
	
  GRACE CONSTRUCTION

  	
   

  	
  Director

  
	
  PRODUCTS LIMITED

  	
   

  	
   

  
	
  in the presence of:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness Signature:

  	
  /s/ Rachel Reeves

  	
   

  	
   

  
	
  Witness Name:

  	
  Rachel Reeves

  	
   

  	
   

  
	
  Witness Address:

  	
  Apex Plaza

  	
   

  	
   

  
	
   

  	
  Reading

  	
   

  	
   

  
	
  Witness Occupation:

  	
  Solicitor

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/  

  
	
   

  	
   

  
	
  EXECUTED AS A DEED

  by

  for and on behalf of

  	
   

  
	
  CHASE PROTECTIVE COATINGS LIMITED

  	
   

  	
  Director

  
	
  in the presence of:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness Signature:

  	
  /s/ Christopher Saunders

  	
   

  	
  Mundays LLP

  
	
  Witness Name:

  	
  Christopher Saunders

  	
   

  	
  Solicitors and Notaries Public

  
	
  Witness Address:

  	
   

  	
   

  	
  Cedar House, 78 Portsmouth Road 

  
	
   

  	
   

  	
   

  	
  Cobham, Surrey KT11 1AN

  
	
  Witness Occupation:

  	
  Solicitor

  	
   

  	
  Tel: +44 (0) 1932 590500

  
	
   

  	
   

  	
   

  	
  Fax: +44 (0) 1932 590220

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXECUTED AS A DEED

  	
   

  	
  /s/ David Michael

  
	
  by

  	
  /s/ David Michael

  	
   

  	
  Director

  
	
  for and on behalf of

  	
   

  	
   

  
	
  DAREX UK LIMITED in
  the presence of:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness Signature:

  	
  /s/ Rachel Reeves

  	
   

  	
   

  
	
  Witness Name:

  	
  Rachel Reeves

  	
   

  	
   

  
					






 


94

















 




	
  Witness Address:

  	
  Apex Plaza

  	
   

  	
   

  
	
   

  	
  Forbury Rd

  	
   

  	
   

  
	
  Witness Occupation:

  	
  Solicitor

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTED AS A DEED

  	
   

  	
   

  
	
  by

  	
  /s/ 

  	
   

  	
  Director

  
	
  for and on behalf of

  	
   

  	
   

  
	
  CHASE CORPORATION in
  the presence of:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness Signature:

  	
  /s/ Terry M. Jones 

  	
   

  	
   

  
	
  Witness Name:

  	
  Terry M. Jones 

  	
   

  	
   

  
	
  Witness Address:

  	
  80 Joe Long Rd

  	
   

  	
   

  
	
   

  	
  Brewster, MA 02631

  	
   

  	
   

  
	
  Witness Occupation:

  	
  Business Exec.

  	
   

  	
   

  
					






 


95