EXHIBIT 10.33


 


Dated 14 October 2005


 


 


Mr A.W. Naisbitt


 


Mr G.K. Naisbitt and
Others


 


 


-
and -


 


 


Chase & Sons Limited


 


 


Deed relating to


 


the sale and purchase of
the entire


issued share capital of


Concoat Holdings Limited


 


 


abc


U0792.00017


Ref: ny/jbsd


 





















 


Contents


 


	
  Clause

  	
   

  	
  Page no

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Interpretation

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Sale
  and purchase of the Shares

  	
  6

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Consideration

  	
  6

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Completion

  	
  7

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Retention

  	
  11

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Balance Sheet
  Retention

  	
  11

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Tax
  Retention and Property Retention

  	
  13

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Farnborough
  Property and Farnborough Escrow

  	
  14

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Change
  of name of Concoat Systems Limited

  	
  15

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Indemnities

  	
  16

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Warranties

  	
  17

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Limitation
  on claims

  	
  18

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Confidentiality
  and announcements

  	
  21

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Further
  assurance and availability of information

  	
  21

  
	
   

  	
   

  	
   

  
	
  15.

  	
  Interest

  	
  21

  
	
   

  	
   

  	
   

  
	
  16.

  	
  Continuing
  obligations and assignment

  	
  21

  
	
   

  	
   

  	
   

  
	
  17.

  	
  Costs

  	
  22

  
	
   

  	
   

  	
   

  
	
  18.

  	
  Notices
  and Sellers’ Representatives

  	
  22

  
	
   

  	
   

  	
   

  
	
  19.

  	
  Severability

  	
  22

  
	
   

  	
   

  	
   

  
	
  20.

  	
  Entire
  agreement and variation

  	
  23

  
	
   

  	
   

  	
   

  
	
  21.

  	
  General
  provisions

  	
  23

  
	
   

  	
   

  	
   

  
	
  22.

  	
  Governing
  law and jurisdiction

  	
  23

  
	
   

  	
   

  	
   

  
	
  Schedule
  1 - The Sellers and the Shares

  	
  25

  
	
   

  	
   

  
	
  Schedule
  2 - The Company and the Subsidiary Undertakings

  	
  27

  
	
   

  	
   

  
	
  Schedule
  3 - General Warranties

  	
  30

  
	
   

  	
   

  
	
  Schedule
  4 - Tax Covenant and Warranties

  	
  45

  
	
   

  	
   

  
	
   

  	
  Part A -
  Definitions and Tax Covenant

  	
  45

  
	
   

  	
   

  	
   

  
	
   

  	
  Part B - Tax Warranties

  	
  57

  
	
   

  	
   

  
	
  Schedule
  5 - The Properties

  	
  62

  
	
   

  	
   

  
	
  Schedule
  6 - The Balance Sheets

  	
  64

  
	
   

  	
   

  
	
  Schedule
  7 - Intellectual Property

  	
  66

  
	
   

  	
   

  
	
  Schedule
  8 - Environmental Indemnity

  	
  70

  
	
   

  	
   

  
	
  Schedule
  9 - Restructuring Documents

  	
  72

  
				



 





















 


This Deed is made
on 14 October 2005


 


Between:


 


(1)                                   The
several persons whose names and addresses are set out in column 1 of schedule 1
(the “Sellers”); and


 


(2)                                   Chase
& Sons Limited is a company registered in England and Wales under company
number 5519155 whose registered office is at Alasan House, 2C Albany Park,
Frimley Road, Camberley, Surrey, GU16 7PH (the “Purchaser”),


 


(together
known as the “parties”).


 


Recitals:


 


(A)                             Concoat
Holdings Limited is a company registered in England and Wales under company
number 00967743 whose registered office is at Alasan House, 2C Albany Park,
Frimley Road, Camberley, Surrey, GU16 7PH, United Kingdom (the “Company”). 
At the date hereof the Company has an authorised share capital of
£20,000 divided into 20,000 ordinary shares of £1 each, 10,345 of which have
been allotted and issued and are fully paid. 
Further particulars of the Company and of each of the subsidiary
undertakings of the Company are set out in schedule 2.


 


(B)                               The
Purchaser is a wholly owned subsidiary of Chase Corporation, a company
registered in the state of Massachusetts under number 1359769 whose registered
office is at 26 Summer Street, Bridgewater, Massachusetts, 02324, USA (“Chase”).


 


(C)                               The
Sellers are the beneficial owners and/or the registered holders (as the case
may be) of those numbers of the Shares in the capital of the Company set out
opposite their respective names in schedule 1.


 


(D)                              The
Sellers have agreed to sell and the Purchaser has agreed to purchase all the
Shares on and subject to the terms of this Deed.


 


It is agreed:


 


1.                                      Interpretation


 


1.1                                In this
Deed:


 


“90 Day Aged Balances” has the meaning
given in clause 6.4;


 


“180 Day Aged Balances” has the meaning
given in clause 6.4;


 


“Accounts” means the balance
sheet and profit and loss account of each of the Company and each Group member
as at and for the period ended on the Balance Sheet Date, in each case
including all notes, reports, statements and other documents annexed to them,
whether or not pursuant to any legal requirement;


 


“Affiliate” means, in
relation to any person, a direct or indirect subsidiary undertaking of that
person or a parent undertaking of that person or any other direct or indirect
subsidiary of that parent undertaking or any entity in which any such
undertaking has a controlling interest;


 


“Aged Balances Statements” means the Completion
Aged Balances, the 90 Day Aged Balances and the 180 Day Aged Balances;


 





















 


“Agency Agreement” means the agency
agreement executed by Concoat Limited and Concoat Systems Limited on the date
of this Deed in the agreed terms;


 


“Approved Final Balance Sheet” has
the meaning given in paragraph 3 of schedule 6;


 


“Balance Sheet Date” means 31 August
2005;


 


“Balance Sheet Retention” means the amount
to be retained from the consideration in accordance with clause 3.1(c) and
dealt with in accordance with the provisions of clause 6;


 


“Balance Sheets” has the meaning
given in paragraph 5 of schedule 6;


 


“Business Day” means any day
(except a Saturday or Sunday) on which banks in the City of London are
generally open for business;


 


“Chase” has the meaning given in recital (B);


 


“Company” has the meaning given in recital (A);


 


“Completion” means completion
of the sale and purchase of the Shares pursuant to this Deed in accordance with
its terms;


 


“Completion Aged Balances” has the meaning
given in clause 6.4;


 


“Completion Date” means                     am/pm on the date on which
this Deed is signed;


 


“Controlled Waters” means controlled
waters as defined in the Water Resources Act 1991;


 


“Deed of Covenant” means a deed of
covenant executed by the Sellers, the Purchaser and others in the agreed terms;


 


“Disclosure Letter” means the letter
of the same date as this Deed from the Sellers to the Purchaser listing any
matters which have arisen for the purposes of clause 11.2;


 


“Draft Balance Sheet” has the meaning
given in paragraph 1 of schedule 6;


 


“Draft Working Capital Amount” has
the meaning given in paragraph 1 of schedule 6;


 


“Due Diligence Checklist” means the due
diligence checklist provided by the Sellers’ Solicitors on Completion in the
agreed terms;


 


“Employment Agreement” means the
employment agreement executed by Concoat Limited and Mr D. Greenman in the
agreed terms;


 


“Employment Statutes” means all
legislation (whether of the United Kingdom, any part thereof, or elsewhere),
including without limitation the Treaty establishing the European Community and
any directives made under the authority of that Treaty, relating in any way to
the employment of employees or other workers (whether individually or
collectively) or the terms on which they are employed and including, for the
avoidance of doubt, any such legislation relating to health and safety;


 


“Environment” means air
(including, without limitation, air within buildings and natural or man made
structures above or below ground), water (including territorial and costal and
inland waters, groundwater and water in drains and sewers), land (including
soil and subsoil and land under any water) and any organisms or ecosystems
supported by the air, water or land;


 


“Environmental Laws” means all
applicable laws (including common law) of the United Kingdom or any part
thereof, relating to pollution or protection of the Environment or


 


2





















 


human
health and safety, including laws relating to emissions, seepages, spillages,
discharges, escapes, releases or threatened escapes or releases of pollutants,
contaminants, chemicals or toxic or hazardous substances, wastes, materials or
noise into the Environment or otherwise relating to the manufacture,
processing, distribution, use, keeping, treatment, disposal, deposit, storage,
transport or handling of the same;


 


“Environmental Permit” means any
consent, permission, licence, approval or other authorisation issued pursuant
to any Environmental Law;


 


“Executive Plans” means the 1983 Concoat
Limited Royal & Sun Alliance Executive Pension Plan for Mr D. Greenman and
the 1984 Concoat Limited Royal & Sun Alliance Executive Pension Plan for Mr
G.K. Naisbitt;


 


“Farnborough Escrow” means the amount
to be retained from the consideration in clause 3.1(f) and dealt with in
accordance with the provisions of clause 8;


 


“Farnborough Property” means the
property at Unit B2, Amstrong Mall, Southwood Summit Centre, Farnborough,
Hampshire, GU14 0NR, United Kingdom leased by Concoat Systems Limited;


 


“Final Balance Sheet” has the meaning
given in paragraph 2 of schedule 6;


 


“General Warranties” means those
Warranties set out in schedule 3;


 


“Group” means the Company and each Subsidiary
Undertaking, and “Group member”
means the Company or a Subsidiary Undertaking;


 


“Group Restructuring” means the
restructuring of the Company, Concoat Systems Limited, Concoat Limited and
Synergie (UK) Limited in accordance with the Restructuring Documents;


 


“Hampshire Property” means the
Hampshire property more particularly described in schedule 5;


 


“ICTA 1988” means the Income
and Corporation Taxes Act 1988;


 


“Independent Barrister” means a barrister
of at least 10 years call jointly agreed upon between the parties at any
time or, failing which and on application of either the Sellers or the
Purchaser at any time, by the President, from time to time, of the Law Society
of England and Wales;


 


“Intellectual Property” means all
intellectual property rights in any part of the world and includes patents
(including supplementary protection certificates), utility models, rights in
inventions, registered and unregistered trade and service marks, rights in
business and trade names and get-up, rights in domain names, registered
designs, unregistered rights in designs, semiconductor and topography rights,
copyrights and neighbouring rights, database rights, rights in Know-How and in
each case rights of a similar or corresponding character and all applications
and rights to apply for the protection of any of the foregoing;


 


“Know-How” means trade
secrets, confidential information, know-how, inventions, technical or
commercial knowledge and manufacturing or business processes, methods and
procedures;


 


“Licence Agreement” means a licence to
use the registered Community trade mark number E34271 (CONCOAT) name executed
by Concoat Limited and Concoat Systems Limited at the date of this Deed in the
agreed terms;


 


3





















 


“Losses” means all losses, liabilities, costs
(including without limitation reasonable legal costs and experts’ and
consultants’ fees), charges, expenses, actions, proceedings, claims and
demands;


 


“Money Purchase Plan” means the Concoat
Limited Group Money Purchase Plan;


 


“Planning Acts” means the Town
and Country Planning Act 1990, the Planning (Listed Buildings and Conservation
Areas) Act 1990, the Planning (Hazardous Substances) Act 1990, the Planning
(Consequential Provisions) Act 1990 and the Planning and Compensation Act 1991;


 


“Properties” means the
properties described in schedule 5, and “Property”
means either of the Properties;


 


“Property Retention” means the amount
to be retained from the consideration in accordance with clause 3.1(e) and
dealt with in accordance with the provisions of clause 7;


 


“Purchaser’s Auditors” means PricewaterhouseCoopers
LLP of First Point, Buckingham Gate, Gatwick, RH6 OPP, United Kingdom;


 


“Purchaser’s Group Company” means
the Purchaser, its ultimate holding company and all subsidiaries of that
holding company, and/or any Group member;


 


“Purchaser’s Solicitors” means Lovells of
900 Third Avenue, New York, New York 10022, USA;


 


“Relevant Intellectual Property” means:


 


(a)                                 the
Intellectual Property which is used or exploited or intended to be used or
exploited by or on behalf of a Group member in or in connection with its
business; and


 


(b)                                any
other Intellectual Property which is owned by or as to which a Group member
otherwise has any right, title or interest,


 


other
than Intellectual Property used or exploited by a Group Member in generic,
non-bespoke, ‘shrink-wrapped’ software;


 


“Restructuring Documents” means the
documents listed in schedule 9;


 


“Restructuring Loan” means the loan
from Concoat Limited to Concoat Systems Limited in the amount of £209,962.85;


 


“Retention” means the amount
to be retained from the consideration in accordance with clause 3.1(a) and
dealt with in accordance with the provisions of clause 5;


 


“Retentions” means the
Property Retention, the Balance Sheet Retention, the Tax Retention and the
Retention;


 


“Seller” means each of the individual Sellers taken
separately;


 


“Sellers’ Auditors” means Pridie
Brewster, Chartered Accountants of Mount Manor House, 16 The Mount, Guildford,
Surrey, GU2 4HS, United Kingdom;


 


“Sellers’ Representatives” means both
representatives of the Sellers appointed pursuant to clause 18.3;


 


4





















 


“Sellers’ Schemes” means the Concoat
Limited Death Benefit Scheme, the Concoat Limited Group Money Purchase Plan,
the Executive Plans and the Concoat Limited Stakeholder Scheme set up with
Standard Life;


 


“Sellers’ Solicitors” means Bird &
Bird of 90 Fetter Lane, London, EC4A 1JP, United Kingdom;


 


“Shares” means the shares in the capital of the
Company described in schedule 1, being the entire issued share capital of the
Company;


 


“Subsidiary Undertaking” means a
subsidiary undertaking in respect of which the Company is a parent undertaking,
the full details of each of which are set out in schedule 2, and “Subsidiary Undertakings” means all of
those subsidiary undertakings;


 


“Surrey Property” means the Surrey
property more particularly described in schedule 5;


 


“Tax” has the meaning ascribed to it in part A of
schedule 4 and “Taxation” shall be
construed accordingly;


 


“Tax Covenant” means the
covenant set out in part A of schedule 4;


 


“Tax Retention” means the amount
to be retained from the consideration in accordance with clause 3.1(d) and
dealt with in accordance with the provisions of clause 7;


 


“Tax Warranties” means those
warranties, representations and undertakings set out in part B of schedule 4;


 


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


 


“Tech Shot Licence Agreement” means
the Tech Shot licence agreement duly executed by Concoat Systems Limited as
licensor and Concoat Limited as licensee in the agreed terms;


 


“Trustees” means the
trustees of each of the Trusts;


 


“Trusts” means the A.W. Naisbitt Discretionary
Settlement Trust and the D. Naisbitt Discretionary Settlement Trust;


 


“Undertaking” means the deed of
undertaking duly executed by Concoat Limited and Concoat Systems Limited in the
agreed terms;


 


“Warranties” means the
warranties, representations and undertakings set out in schedule 3 and the Tax
Warranties; and


 


“Working Capital” has the meaning
given in paragraph 6 of schedule 6.


 


1.2                                In this
Deed, unless the context otherwise requires:


 


(a)                                 references
to this Deed or any other document include this Deed or such other document as
varied, modified or supplemented in any manner from time to time;


 


(b)                                references
to any party shall, where relevant, be deemed to be references to or to
include, as appropriate, their respective permitted successors, assigns or
transferees;


 


(c)                                 references
to recitals, clauses and schedules and sub-divisions of them are references to
the recitals and clauses of, and schedules to, this Deed and sub-divisions of
them respectively;


 


5





















 


(d)                                references
to any enactment include references to such enactment as re-enacted, amended or
extended on or before the date of this Deed and any subordinate legislation
made from time to time under it;


 


(e)                                 references
to a “person” include any individual, company, corporation, firm, partnership,
joint venture, association, organisation, institution, trust or agency, whether
or not having a separate legal personality;


 


(f)                                   references
to the one gender include all genders, and references to the singular include
the plural and vice versa;


 


(g)                                any
reference to indemnifying any person against any circumstance includes
indemnifying and holding that person harmless from all actions, claims, demands
and proceedings of any nature from time to time made against that person and
all Losses, damages, payments, awards, costs or expenses made, suffered or
incurred by that person as a consequence of, or which would not have arisen but
for, that circumstance;


 


(h)                                headings
are inserted for convenience only and shall be ignored in construing this Deed;
and


 


(i)                                    the
words and phrases “subsidiary”, “subsidiary undertaking”, “holding company” and
“parent undertaking” have the meanings given to them in the Companies Act 1985.


 


1.3                                The
recitals and schedules to this Deed form part of it.


 


1.4                                Any
reference in this Deed to a document being “in the agreed terms” is to a
document in the terms agreed between the parties and for identification
purposes only signed or initialled by them or on their behalf on or before the
date of this Deed.


 


1.5                                In this
Deed, in relation to any Intellectual Property, reference to “use” includes any
act or thing which would constitute an infringement or unlawful use if done
without the right owner’s permission, “exploit” includes licensing and “licensing”
includes sub-licensing (in each case whether for consideration or otherwise).


 


2.                                      Sale and purchase of the Shares


 


2.1                                On and
subject to the terms of this Deed, the Sellers shall sell with full title
guarantee the Shares set out opposite their respective names in schedule 1 and
the Purchaser shall purchase all the Shares on and with effect from Completion,
in each case free from all charges, liens, equities, encumbrances, claims or
restrictions whatsoever and together with all rights which are now, or at any
time hereafter may become, attached to them (including without limitation the
right to receive all dividends and distributions declared, made or paid on or
after Completion).


 


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


 


2.3                                The
Sellers agree that they hereby waive any rights which may have been conferred
on them under the articles of association of the Company or otherwise or in any
other way to have any of the Shares offered to them for purchase at any time on
or before the transfer of the Shares pursuant to the provisions of this Deed.


 


3.                                      Consideration


 


3.1                                The
total consideration payable by the Purchaser to the Sellers for the Shares
shall be the sum of £5,000,000 adjusted in accordance with this clause 3 and
schedule 6.  The total consideration
shall be satisfied as follows:


 


6





















 


£5,000,000
plus or minus the following amounts, shall be payable in cash on Completion and
divided among the Sellers in the proportions shown in column 4 of schedule 1;


 


(a)                                 minus
£100,000 which shall be dealt with in accordance with the provisions of clause
5 (the “Retention”);


 


(b)                                minus
the Shortfall or plus the Excess:


 


If
and to the extent that the Draft Working Capital Amount is:


 


(i)                                     less
than £607,555, the amount equal to the amount by which the Draft Working Capital
Amount is less than £607,555 shall be the “Shortfall”;
or


 


(ii)                                  more
than £607,555, the amount equal to the amount by which the Draft Working
Capital Amount is more than £607,555 shall be the “Excess”;


 


(c)                                 minus
the sum of:


 


(i)                                     
£5,000,000;


 


(ii)                                   minus
the Shortfall; or


 


(iii)                                plus
the Excess,


 


multiplied
by ten per cent. (10%).  This amount
shall be dealt with in accordance with the provisions of clause 6 (the “Balance Sheet Retention”);


 


(d)                                minus
£124,000 which shall be dealt with in accordance with the provisions of clause
7 (the “Tax Retention”);


 


(e)                                 minus
£30,000 which shall be dealt with in accordance with the provisions of clause 7
(the “Property Retention”); and


 


(f)                                   minus
£183,000 (the “Farnborough Escrow”)
which shall be dealt with in accordance with the provisions of clause 8.


 


3.2                                The
provisions of schedule 6 shall apply to the drawing up and reviewing of the
Balance Sheets and the Draft Working Capital Amount.


 


3.3                                If any
payment is made by the Sellers to the Purchaser in respect of any claim for any
breach by the Sellers of this Deed including, without limitation, any breach of
Warranty or any payment pursuant to any other provisions of this Deed, the
payment shall be made by way of adjustment of the consideration paid by the
Purchaser and the consideration shall be deemed to be reduced by the amount of
such payment.


 


4.                                      Completion


 


4.1                                Completion
shall take place at the Sellers’ Solicitors’ London offices on the Completion
Date or at such other place and/or on such other date or place as may be agreed
between the parties.


 


4.2                                On or
before Completion, the Sellers shall procure that:


 


(a)                                 all
loans due to a Group member from, and all loans due from a Group member to, any
of the Sellers and every other company in the issued share capital of which the
Sellers or any of them or any combination of them have directly or indirectly a
beneficial interest exceeding three per cent. (3%) of the issued share capital
of such company shall be repaid in full (together with all interest accrued
thereon up to and including the Completion Date);


 


7





















 


(b)                                all
loans due to a Group member from, and all loans due from a Group member to,
directors or employees of a Group member shall be repaid in full (together with
all interest accrued thereon up to and including the Completion Date); and


 


(c)                                 all
salaries, directors’ fees, expenses and bonuses (if any) of all directors and
employees of each Group member save for any amounts specifically detailed in
the Disclosure Letter shall be paid up to the last date for payment thereof
prior to the Completion Date.


 


4.3                                On
Completion the Sellers shall cause to be delivered to the Purchaser:


 


(a)                                 duly
executed transfers of all the Shares by the registered holders thereof in favour
of the Purchaser (or as it may direct) together with the share certificates
relating to such shares;


 


(b)                                such
other documents (including any power of attorney under which any document
required to be delivered under this clause 4.3 has been executed and any
waivers or consents) as the Purchaser may require to enable the Purchaser or
its nominees to be registered as holders of the Shares;


 


(c)                                 the
common seal, certificate of incorporation, certificates of incorporation on
change of name and statutory books of each Group member;


 


(d)                                the
Disclosure Letter duly executed by the Sellers in the agreed terms;


 


(e)                                 the
Deed of Covenant duly executed by the covenantors named therein in the agreed
terms;


 


(f)                                   written
resignations (with effect from the end of the relevant board meeting referred
to in clause 4.4) of all directors and the secretary of each Group member,
resigning from their respective offices and employments with each Group member,
in each case executed as deeds in the agreed terms;


 


(g)                                the
Agency Agreement duly executed by Concoat Systems Limited in the agreed terms;


 


(h)                                the
title deeds to the Properties;


 


(i)                                    unconditional
receipts for rent and any additional rents or service charges due in respect of
the Properties;


 


(j)                                    the
documents of title relating to all investments of each Group member (if any);


 


(k)                                 the
certificates of registration for all the Relevant Intellectual Property which
is registered and evidence of all renewals of those registrations;


 


(l)                                    statements
from the bank at which each Group member maintains an account as to the amounts
standing to the credit or debit of each of those accounts at the close of
business on the second Business Day preceding the Completion Date (the “Reconciliation Date”), all current cheque
books and paying-in books for such accounts and a bank reconciliation statement
showing all movements on each of the bank accounts from the close of business
on the Reconciliation Date to Completion;


 


(m)                              irrevocable
powers of attorney in the agreed terms executed by each of the holders of the
Shares in favour of the Purchaser appointing the Purchaser to be its or his
lawful attorney in respect of the Shares;


 


8





















 


(n)                                the
Employment Agreement duly executed by Mr D. Greenman in the agreed terms;


 


(o)                                certified
resolutions of the Trustees approving the transactions contained in this Deed
and the documents referred to herein and authorising the execution thereof by
Mr A.W. Naisbitt and Mrs D. Naisbitt in respect of the A.W. Naisbitt
Discretionary Settlement Trust and by Mr A.W. Naisbitt and Mrs D. Naisbitt in
respect of the D. Naisbitt Discretionary Settlement Trust;


 


(p)                                the
Licence Agreement duly executed by Concoat Systems Limited in the agreed terms;


 


(q)                                share
certificates representing 100 per cent. (100%) of the issued share capital of
Concoat Limited;


 


(r)                                   Concoat
Limited’s share certificate for 100 per cent. (100%) of Synergie (UK) Limited;


 


(s)                                 the
Completion Aged Balances (if not already provided);


 


(t)                                   the
Draft Balance Sheet (if not already provided);


 


(u)                                instructions
from the Sellers to the Purchaser’s Solicitors to direct the Purchaser’s
Solicitors to send an amount of the consideration payable to them on the
Completion Date equal to the outstanding balance of the Restructuring Loan to
Concoat Limited in order to discharge the Restructuring Loan on behalf of
Concoat Systems Limited;


 


(v)                                board
resolution of Concoat Systems Limited to allow the Purchaser to file the change
of name of Concoat Systems Limited;


 


(w)                              written
resolution of the Shareholder of Concoat Systems Limited authorising the change
of name of Concoat Systems Limited;


 


(x)                                  a
schedule of rent and all outgoings for the Hampshire Property up to and
including 25 December 2005;


 


(y)                                the
Restructuring Documents duly executed by the relevant parties in the agreed
terms;


 


(z)                                  the
Tech Shot Licence Agreement duly executed by Concoat Systems Limited in the
agreed terms;


 


(aa)                           the
Undertaking duly executed by Concoat Systems Limited in the agreed terms; and


 


(bb)                         the Due
Diligence Checklist in the agreed terms.


 


4.4                                On
Completion the Sellers shall cause a board meeting of each Group member to be
duly convened and held at which (in as much as such action shall apply to the
relevant Group member):


 


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


 


(b)                                the
existing directors and secretary of each Group company will resign (except for
Mr D. Greenman as a director of Concoat Limited) and such persons as may be
nominated by the Purchaser shall be appointed as directors and secretary of
each Group member (within the maximum number, if any, permitted under the
articles of association of that Group member);


 


9





















 


(c)                                 the
Deed of Covenant, the Agency Agreement, the Undertaking, the Tech Shot Licence
Agreement, the Licence Agreement and the Employment Agreement shall be approved
and executed by each relevant Group member as appropriate;


 


(d)                                all
existing instructions to the Group’s bankers, bank mandate forms and
authorities shall be revoked and shall be replaced with alternative
instructions, bank mandates forms and authorities in such form as the Purchaser
may require;


 


(e)                                 the
registered office of Synergie (UK) Limited shall be changed to Alasan House, 2C
Albany Park, Frimley Road, Camberley, Surrey, GU16 7PH, United Kingdom; and


 


(f)                                   the
repayment of the Restructuring Loan shall be approved.


 


4.5                                On
Completion the Purchaser shall, following compliance by the Sellers with the
foregoing provisions:


 


(a)                                 pay the
sum of £4,176,266 into the account of the Sellers’ Solicitors on account of the
consideration payable to the Sellers for the Shares and any amount due by the
Sellers to the Purchaser pursuant to the Deed of Covenant;


 


(b)                                deliver
to the Sellers’ Solicitors the side letter from Chase to the Sellers duly
executed by Chase in the agreed terms;


 


(c)                                 deliver
to the Sellers’ Solicitors counterparts of the following documents:


 


(i)                                     the
Licence Agreement;


 


(ii)                                  the
Employment Agreement;


 


(iii)                               the
Deed of Covenant;


 


(iv)                              the
Agency Agreement;


 


(v)                                 an
acknowledgement by Concoat Limited of the repayment of the Restructuring Loan;


 


(vi)                              the
Tech Shot Licence Agreement; and


 


(vii)                           the
Undertaking,


 


all
duly executed by the relevant Group member; and


 


(d)                                deliver
to the Sellers’ Solicitors resolutions of the board of directors of the
Purchaser which, amongst other things, approve the terms of this Deed relating
to the purchase of the Shares and the other transactions contemplated by this
Deed.


 


4.6                                The
Sellers’ Solicitors are hereby irrevocably authorised by the Sellers to receive
all amounts expressed to be payable to them pursuant to any provision of this
Deed and the receipt by the Sellers’ Solicitors of each such amount shall be an
absolute discharge to the Purchaser who shall not be concerned to see to the
application of any such amount thereafter.


 


4.7                                At
Completion, the obligations of the parties under the Tax Covenant shall take
effect.


 


4.8                                As soon
as is practicable following Completion the Sellers shall procure the release of
each Group member from any guarantee or other obligation of any nature
undertaken by it securing or otherwise in respect of the obligations of any of
the Sellers with effect from the Completion Date and pending such release shall
indemnify each of the Purchaser and


 


10





















 


each
Group member against any liability, loss, claim or expenses whatsoever or other
obligation.


 


5.                                      Retention


 


5.1                                The
Retention shall be held by the Purchaser.


 


5.2                                If the
Purchaser has not notified the Sellers of any claim under this Deed on or
before 18 months from the Completion Date, the Purchaser shall release the
Retention in full to the Sellers’ Representatives not more than 10 calendar
days following 18 months from the Completion Date.


 


5.3                                If the
Purchaser has notified the Sellers of a claim or claims under this Deed on or
before 18 months from the Completion Date, the Purchaser shall use its reasonable
endeavours to estimate the maximum aggregate amount of such claim(s) (if
capable of estimation) and shall notify the Sellers in writing of the estimated
maximum aggregate amount of such claim(s) or the fact that it or they are
incapable of estimation.


 


5.4                                If such
claim(s) are so estimated, the Purchaser shall procure that the amount by which
the Retention exceeds the estimated (or determined, pursuant to clause 5.8)
maximum aggregate amount of such claim(s) be paid by the Purchaser to the
Sellers’ Representatives not more than 10 calendar days following 18 months
from the Completion Date or (if later) not more than 10 calendar days following
the date on which the last of such claim(s) has been estimated and notified.


 


5.5                                If any
such claim(s) are not admitted by the Sellers, such balance of the Retention
shall be held by the Purchaser until such claim(s) are finally settled or
otherwise determined.


 


5.6                                Upon
the final settlement or determination of such claim(s), the Purchaser shall
procure that the Retention (or the balance thereof) shall be forthwith applied
in or towards the discharge of the amount(s) agreed or determined to be payable
to the Purchaser or a Group member (as the case may be) in respect of such
claim(s) and the residue (if any) remaining after the complete discharge of
such claim(s) shall be released to the Sellers’ Representatives.


 


5.7                                All
amounts of the Retention paid by the Purchaser to the Sellers’ Representatives
shall be paid with interest thereon, such interest to be calculated at the rate
of 4.5 per cent. (4.5%) per annum, calculated on a monthly basis for the period
from the Completion Date up to and including the date of actual payment.


 


5.8                                If the
parties cannot agree the amounts claimed under this clause 5, the matter shall
promptly be referred to an Independent Barrister who shall then determine the
value or amount of the matter or matters in dispute and allocate the costs of
such determination amongst the parties. 
The Independent Barrister shall act as an expert and not as an
arbitrator.  The Independent Barrister’s
decision shall be communicated in writing to the parties within 30 calendar
days of the Independent Barrister’s appointment and shall be (in the absence of
manifest error) final and binding upon the parties.  The parties shall procure that all records,
working papers and other information as may be reasonably required by the
Independent Barrister for the purposes of this clause 5 shall be made available
upon request for them and each of the Purchaser and the Sellers shall generally
render all reasonable assistance, including production and supply of
photocopies of relevant documents to the Independent Barrister, and access
reasonably necessary for the determination of the amounts in dispute.


 


6.                                      Balance Sheet Retention


 


6.1                                The
Balance Sheet Retention shall be held by the Purchaser.


 


11





















 


6.2                                On or
prior to Completion, the Sellers shall provide the Purchaser with the Draft
Balance Sheet.  Thereafter, in accordance
with the provisions of schedule 6, the parties shall agree the Approved Final
Balance Sheet.


 


6.3                                If the
Working Capital in the Approved Final Balance Sheet is:


 


(a)                                 less
than the Draft Working Capital Amount, the Purchaser shall release the amount
by which the Draft Working Capital Amount is more than the Working Capital in
the Approved Final Balance Sheet from the Balance Sheet Retention to the
Purchaser or a Group member (as the case may be), not later than 10 calendar
days following the final determination of the Approved Final Balance Sheet; or


 


(b)                                greater
than the Draft Working Capital Amount, the amount by which the Working Capital
in the Approved Final Balance Sheet exceeds Draft Working Capital Amount, shall
be released from the Balance Sheet Retention by the Purchaser to the Sellers’
Representatives, not later than 10 calendar days following the final
determination of the Approved Final Balance Sheet.


 


6.4                                (a)                                 The
Sellers shall provide the Purchaser with the following Aged Balances
Statements:


 


(i)                                     on Completion
(“Completion Aged Balances”);


 


(ii)                                  90 days
after the Completion Date (“90 Day Aged
Balances”); and


 


(iii)                               180
days after the Completion Date (“180 Day Aged
Balances”),


 


(together
the “Aged Balances Statements”).


 


(b)                                The
Aged Balances Statements shall indicate:


 


(i)                                     the
total value of any accounts receivable balances that are more than 90 days past
invoice date; and


 


(ii)                                  any
inventory that is more than one year old,


 


each
as of the date of that particular statement (together the “Aged Balances”).


 


(c)                                 The
Aged Balances Statements shall exclude any receivables that arise or inventory
that is purchased, as a result of operations subsequent to the Completion Date.


 


6.5                                The
Purchaser shall review the total of the 90 Day Aged Balances 90 days after the Completion
Date.  If the 90 Day Aged Balances is:


 


(a)                                 less
than the Completion Aged Balances then an amount equal to the difference
between the two shall be released from the Balance Sheet Retention by the
Purchaser to the Seller’s Representatives no later than 20 calendar days
following 90 days after Completion; or


 


(b)                                greater
than the Completion Aged Balances then the Purchaser shall not release any
amounts from the Balance Sheet Retention to any party;


 


6.6                                The
Purchaser shall review the total of the 180 Day Aged Balances 180 days after
the Completion Date.  If the 180 Day Aged
Balances is:


 


(a)                                 less
than the balance of the Balance Sheet Retention, then the whole amount of the
180 Aged Balances shall be released from the Balance Sheet Retention by


 


12





















 


the
Purchaser to the Purchaser or a Group member (as the case may be), not later
than 20 calendar days following 180 days after Completion; or


 


(b)                                greater
than the balance of the Balance Sheet Retention


 


(i)                                     then
the whole amount of the 180 Aged Balances shall be released from the Balance
Sheet Retention by the Purchaser to the Purchaser or a Group member (as the
case may be); and


 


(ii)                                  the
Sellers shall pay (on an indemnity basis) an amount equal to the difference
between the Balance Sheet Retention and the total of 180 Day Aged Balances to
the Purchaser,


 


both
no later than 20 calendar days following 180 days after Completion.


 


6.7                                If any
such amounts claimed under this clause 6 are not agreed by the parties, the
Balance Sheet Retention (or any balances remaining after any interim
distributions made under clauses 6.3, 6.5 or 6.6) shall be held by the
Purchaser until such claim(s) are finally settled or otherwise determined.


 


6.8                                Upon
the final settlement or determination of all claim(s) under this clause 6, the
Purchaser shall procure that the Balance Sheet Retention (or the balance
thereof) shall be released to the Sellers’ Representatives no later than 10
calendar days following that date.


 


6.9                                If the
amounts claimed by the Purchaser and agreed to by the Sellers under clauses 5,
6 and 7 are greater than the amounts held in any of the particular Retentions,
the Purchaser may use funds from the other Retentions to settle the outstanding
claims under that clause.


 


6.10                          If the
parties can not agree the amounts claimed under this clause 6, the matter shall
promptly be referred to a firm of independent chartered accountants jointly
agreed upon between the parties at any time or, failing which and on
application of any of the Sellers or the Purchaser at any time, by the
President, from time to time, of the Institute of Chartered Accountants in
England and Wales, which firm (the “Independent
Accountants”) shall then determine the value or amount of the matter
or matters in dispute and allocate the costs of such determination amongst the
parties.  The Independent Accountants
shall act as experts and not as arbitrators. 
Their decision shall be communicated in writing to the parties within 30
calendar days of their appointment and shall be (in the absence of manifest
error) final and binding upon the parties. 
The parties shall procure that all records, working papers and other
information as may be reasonably required by the Independent Accountants for
the purposes of this clause 6 shall be made available upon request for them and
each of the Purchaser and the Sellers shall generally render all reasonable
assistance, including the production and supply of photocopies of relevant
documents to the Independent Accountants, and access reasonably necessary for
the determination of the amounts in dispute.


 


7.                                      Tax Retention and Property
Retention


 


7.1                                The Tax
Retention and Property Retention shall be held by the Purchaser.


 


7.2                                For the
avoidance of doubt the amount of the Tax Retention in no way limits the
potential liability of the Sellers in respect of claims under the relevant
provisions of the Tax Covenant.


 


7.3                                The
provisions of clauses 5.2 to 5.6 and 6.10 of this Deed apply in respect of any
claim or claims under paragraphs 2.1(g) to (j) of the Tax Covenant as if the
term “this Deed” reads “paragraphs 2.1(g) to (j) of the Tax Covenant”, the term
“18 months” reads “three years” and the term “Retention” reads “Tax Retention”.


 


13





















 


7.4                                The
Sellers shall use their best endeavours to have the landlord of the Surrey
Property assess the dilapidations in respect of that property as soon as
possible after Completion.  If the
landlord has not assessed the dilapidations by the expiry of 60 days after
Completion, the parties shall agree on and instruct an independent surveyor
(who shall be an expert in valuation of dilapidations) to assess such
dilapidations.  If the amount of the
dilapidations is:


 


(a)                                 greater
than £30,000 the amount of the Property Retention shall be retained by the
Purchaser and the provisions of clause 10.1(f) apply; or


 


(b)                                less
than £30,000 the amount of the difference shall be released by the Purchaser to
the Sellers and balance (being the amount of the dilapidations) shall be
retained by the Purchaser.


 


7.5                                If the
parties cannot agree on an independent surveyor, the president (or other acting
senior officer for the time being) of the Royal Institution of Chartered
Surveyors shall appoint a surveyor on the request of either party.  The person so appointed shall act as an
independent expert and not as an arbitrator in order to assess the amount of
dilapidations.


 


7.6                                The
independent surveyor’s assessment of dilapidations shall be final and binding
on the parties, except in the case of manifest error.


 


7.7                                The
fees and expenses of any independent surveyor instructed pursuant to this
clause 7, including the cost of his nomination, shall be borne by the Sellers.


 


7.8                                If the
independent surveyor refuses to act, becomes incapable of acting or dies, the
president (or other acting senior officer for the time being) of the Royal
Institution of Chartered Surveyors shall appoint an alternative independent
surveyor as set out in clause 7.5.


 


8.                                      Farnborough Property and
Farnborough Escrow


 


8.1                                Prior
to the third anniversary of this Deed the Sellers shall use their reasonable
endeavours to have Concoat Limited’s guarantee of Concoat Systems Limited’s
obligations pursuant to the lease for the Farnborough Property released.


 


8.2                                The
Farnborough Escrow shall be paid into a designated interest-bearing account
with The Royal Bank of Scotland plc operated by the Sellers’ Solicitors in the
joint names of the Sellers’ Solicitors and the Purchaser’s Solicitors (the “Escrow Account”) on Completion and the
Farnborough Escrow (together with interest accrued thereon) shall be applied in
accordance with the provisions of this clause. 
The instructions given to The Royal Bank of Scotland plc on the setting
up of the Escrow Account shall include an instruction that no sums may be
released from the Escrow Account at any time without the authority of the
Purchaser’s Solicitors and the Sellers’ Solicitors.


 


8.3                                If the
Purchaser has not notified the Sellers of any claim under clause 10.3 of this
Agreement on or before the date that the Farnborough Guarantee is released, the
parties shall procure that the balance of the Farnborough Escrow (together with
accrued interest) shall be released in full to the Sellers’ Solicitors on
behalf of the Sellers on the Business Day next following that date.


 


8.4                                If the
Purchaser has notified the Sellers of a claim or claims under clause 10.3 of
this Agreement on or before the date that the Farnborough Guarantee is
released, the Purchaser shall use its reasonable endeavours to estimate the
maximum aggregate amount of such claim(s) (if capable of estimation) and shall
notify the Sellers in writing of the estimated maximum aggregate amount of such
claim(s) or the fact that it or they are incapable of estimation.


 


14





















 


8.5                                If such
claim(s) are so estimated, the parties shall procure that the amount by which
the Farnborough Escrow exceeds the estimated (or determined, pursuant to clause
8.9) maximum aggregate amount of such claim(s) shall be paid out of the
Farnborough Escrow to the Sellers’ Solicitors on behalf of the Sellers on the
tenth Business Day after the date on which the Farnborough Guarantee is
released or (if later) within 10 days of the date on which the last of such
claim(s) has been estimated and notified.


 


8.6                                If any
such claim(s) are not admitted by the Sellers, the Farnborough Escrow (or the
balance remaining after any interim distribution made under clause 8.5) and all
interest accrued thereon shall be held in the Escrow Account until such
claim(s) are finally settled or otherwise determined.


 


8.7                                Upon
the final settlement or determination of such claim(s), the parties shall
procure that the Farnborough Escrow (or the balance thereof) and all interest
accrued thereon shall be forthwith applied in or towards the discharge of the
amount(s) agreed or determined to be payable to the Purchaser or a Group member
(as the case may be) in respect of such claim(s) and the residue (if any)
remaining after the complete discharge of such claim(s) shall be released to
the Sellers’ Solicitors on behalf of the Sellers.


 


8.8                                The
Sellers and the Purchaser shall promptly give to the Sellers’ Solicitors and
the Purchaser’s Solicitors respectively all such written instructions as are
necessary to give effect to the provisions of this clause.


 


8.9                                If the
parties cannot agree the amounts claimed under this clause 8, the matter shall
promptly be referred to an Independent Barrister who shall then determine the
value or amount of the matter or matters in dispute and allocate the costs of
such determination amongst the parties. 
The Independent Barrister shall act as an expert and not as an
arbitrator.  The Independent Barrister’s
decision shall be communicated in writing to the parties within 30 calendar
days of the Independent Barrister’s appointment and shall be (in the absence of
manifest error) final and binding upon the parties.  The parties shall procure that all records,
working papers and other information as may be reasonably required by the Independent
Barrister for the purposes of this clause 8 shall be made available upon
request for them and each of the Purchaser and the Sellers shall generally
render all reasonable assistance, including production and supply of
photocopies of relevant documents to the Independent Barrister, and access
reasonably necessary for the determination of the amounts in dispute.


 


9.                                      Change of name of Concoat Systems
Limited


 


Mr
G.K. Naisbitt and Mr A.W. Naisbitt shall at the date of this Deed:


 


(a)                                 procure
that Concoat Systems Limited pass a resolution to change its company name to a
name not including the word “Concoat” or any similar term which resolution
shall take effect at the expiry of three years from the date of this Deed; and


 


(b)                                provide
to the Purchaser all the necessary perfected documentation which is required to
be filed at Companies House to change Concoat Systems Limited’s company name,


 


and
hereby authorises the Purchaser to file such documentation at Companies House
on or after the third anniversary of this Deed should Concoat Systems Limited
not already have changed its name by that date.


 


15





















 


10.                                Indemnities


 


10.1                          The
Sellers shall be liable for and will indemnify and hold harmless the Purchaser
and each Group Company from any Losses or obligations of what ever nature
arising out of the following:


 


(a)                                 the
implementation of the Group Restructuring including but not limited to:


 


(i)                                     the
practical implementation of the sale of the equipment business and the share in
Concoat Systems Limited and the Deeds of Novation (as set out in paragraph 5 of
schedule 9);


 


(ii)                                  any
costs in association with the Group Restructuring provided for in the Working
Capital amounts in any of the Balance Sheets;


 


(b)


 


(i)                                     the
termination of the employment of any employee no longer employed by the Group
at the date of this Deed;


 


(ii)                                  the
transfer of employees to Concoat Systems Limited (“Transferred Employees”); and


 


(iii)                               the
resignations of each of the Sellers as directors and/or secretary and/or
employees of the Company and/or the Subsidiary Undertakings (except for David
Greenman as a director of Concoat Limited);


 


(c)                                 all
pension obligations of any Group member arising prior or subsequent to
Completion in respect of:


 


(i)                                     the Transferred
Employees; and


 


(ii)                                  the
substitution of Concoat Systems Limited for Concoat Limited as the trustee and
the principal employer of the 1984 Concoat Limited Royal & Sun Alliance
Executive Pension Plan;


 


(d)                                all
pension obligations of any Group member relating to the Sellers’ Schemes
arising prior to Completion in respect of those employees of Group members who
are not Transferred Employees;


 


(e)                                 Concoat
Limited’s use of and lease in respect of the Hampshire Property with respect to
matters occurring both prior or subsequent to Completion but excluding any
matter which relates to the provisions of schedule 8;


 


(f)                                   Concoat
Limited’s use of and lease of the Surrey Property with respect to matters
occurring on or before Completion including without limitation any
dilapidations assessment in accordance with clause 7.4 over £30,000 but
excluding any matter which relates to the provisions of schedule 8;


 


(g)                                any of
the distribution agreements to which Concoat Limited is a party at the
Completion Date (the “Distribution Agreements”)
being in breach of any provision of EU and/or English law or any Distributor
Agreements being or being recharacterised as an agency arrangement whether such
Losses arise as a result of some act or omission of Concoat Limited or the expiry
or termination of those Distribution Agreements in accordance with their terms
or by the effluxion of time, save that the Sellers shall not be liable and no
claim or claims shall be made against them:


 


16





















 


(i)                                     if the
fact omission circumstance or occurrence giving rise to or forming the basis of
the relevant Losses or obligations has been fairly, fully and clearly disclosed
to the Purchaser in the Disclosure Letter;


 


(ii)                                  to the
extent that the relevant Losses or obligations would not have arisen but for a
change in legislation made after the Completion Date; or


 


(iii)                               to the
extent the relevant Losses or obligations arise as a result any deliberate and
voluntary act of Concoat Limited (other than the termination of, or failure to
renew, a Distribution Agreement where permitted in accordance with its terms)
carried out on or after the Completion Date where such act is outside the
ordinary course of business of Concoat Limited as carried on prior to the Completion
Date;


 


(h)                                the
termination of the distribution agreement between Concoat Limited and Ambex
(the Polish distributor); and


 


(i)                                    the
termination of the EU Consortium Agreement relating to Lead Free Soldering
(Contract Number G1ST-CT-2002050285) entered into on 28 June 2004 between
Betronic Hybrid Circuits B.V., Concoat Limited and others.


 


10.2                          The
provisions of schedule 8 (Environmental Indemnity) apply.


 


10.3                          Mr A.W.
Naisbitt and Mr G.K. Naisbitt shall (jointly and severally) be liable for and
will indemnify and hold harmless the Purchaser and each Group member from any
Losses or obligations of whatever nature arising out of Concoat Systems Limited’s
use and lease of the Farnborough Property and Concoat Limited’s guarantee of
that lease, with respect to matters occurring both prior or subsequent to
Completion.


 


10.4                          Subject
to the provisions of schedule 8, the Purchaser shall be liable for and will
indemnify and hold harmless Mr A.W. Naisbitt from any Losses or obligations of
what ever nature arising out of Concoat Limited’s lease in respect of the
Surrey Property occurring following Completion.


 


11.                                Warranties


 


11.1                          The
Sellers hereby represent, warrant and undertake to the Purchaser (for itself
and as trustee for its successors in title) in the terms of the Warranties
other than the Warranties in paragraph V of the Warranties (Trust Related
Warranties), which are warranted only by the Trustees in their capacity as
trustees of the Trusts.  The Sellers
agree that if any of the Warranties is found to be untrue or incorrect, then,
subject to the provisions of this Deed and without restricting the rights of
the Purchaser to claim damages on any other basis available to it, the Sellers
shall, at the Purchaser’s option, either:


 


(a)                                 pay to
the Purchaser or a Group member (as the Purchaser shall direct) an amount equal
to the amount by which the amount of any liability (whether existing,
prospective or contingent) or the value of any asset (whether existing,
prospective or contingent) of a Group member is respectively greater or less
than it would have been if the Warranty in question had been true and correct,
together with all costs and expenses incurred or sustained by the Purchaser or
a Group member as a result of such breach or in connection with the matter or
circumstance giving rise to that breach; or


 


(b)                                pay to
the Purchaser an amount equal to the amount by which the value of the Shares is
less than it would have been if such Warranty had been true and correct,
together with all costs and expenses incurred or sustained by the Purchaser as
a result of such breach.


 


17





















 


11.2                          The
Warranties are given subject to the matters disclosed in the Disclosure Letter
and in the documents annexed thereto, in each case in sufficient detail to
enable the Purchaser properly to evaluate the same, but no other information of
which the Purchaser may have knowledge (whether before or after the date hereof
and whether actual or constructive) shall prejudice or affect in any way the
Purchaser’s ability to make any claim nor to reduce the amount recoverable, in
respect of any claim arising from any breach of a Warranty.


 


11.3                          Each of
the Warranties set out in each paragraph and each paragraph of schedules 3 and
4 shall be separate and independent and shall not be limited by reference to
any other paragraph or anything in this Deed or the schedules.


 


11.4                          Where
any statement set out in schedules 3 or 4 is expressed to be given or made to
the best of the Sellers’ knowledge or is qualified by reference to the Sellers’
awareness or is qualified in some other manner having substantially the same
effect, such statement shall be deemed to be qualified by the additional
statement that the Sellers have made all reasonable enquiries prior to the date
hereof in respect of the subject matter of the relevant statement and each
Seller shall be deemed to have knowledge of:


 


(a)                                 anything
of which each of the other Sellers has knowledge or are deemed by this clause
to have knowledge; and


 


(b)                                anything
of which he ought reasonably to have knowledge given his particular position in
and responsibilities to the Company.


 


11.5                          The
Sellers undertake to the Purchaser that upon any of them becoming aware of the
actual, impending or threatened occurrence of any event after the date of this
Deed, both before and after Completion, which might reasonably be expected to
cause or constitute a breach of any of the Warranties or to give rise to a
claim under the Tax Covenant, they shall immediately give written notice thereof
to the Purchaser together with reasonable details of the relevant event.


 


11.6                          The
Purchaser has entered into this Deed on the basis of the Warranties and in
reliance on them.  Liability under any
Warranty shall not in any way be modified or discharged by Completion.


 


11.7                          The
Sellers agree with the Purchaser for itself and as trustee for each Group
member and their respective officers and employees to assign to the Purchaser
all the rights, remedies or claims which they have or may have in respect of
any misrepresentations in or omissions from any information or advice supplied
or given by a Group member or its respective officers, employees or agents and
on which the Sellers have relied in giving the Warranties, preparing the
Disclosure Letter and/or entering into this Deed and/or the documents referred
to herein.


 


11.8                          The
Sellers acknowledge and agree that they are not aware of any matter or thing
which is inconsistent with the Warranties or constitutes a breach of any of
them.


 


12.                                Limitation on claims


 


12.1                          The
Purchaser acknowledges and agrees that the Warranties are the only warranties
or other assurances of any kind given by or on behalf of the Sellers and on
which the Purchaser may rely in entering into this Deed.


 


12.2                          The
liability of the Sellers under this Deed shall be limited as follows:


 


(a)                                 the
Sellers shall not be liable in respect of any of breach of the Warranties if
and to the extent that the loss occasioned thereby has been recovered in full
under the Tax Covenant;


 


18





















 


(b)                                no
claim shall be made in respect of any breach or non-fulfilment of any of the
Warranties unless the aggregate amount of all such claims exceeds £20,000
PROVIDED that if such aggregate amount does exceed £20,000, the Sellers’
liability shall not be limited to the excess and the whole amount shall be
recoverable in full; and


 


(c)                                 the
maximum liability of the Sellers in respect of the aggregate of all the claims
made by the Purchaser in respect of any breach of this Deed shall not exceed
£5,000,000.


 


12.3                          The
Purchaser may not bring any claim for breach of the provisions of this Deed
unless written notice of the claim shall have been given to the Sellers
accompanied by reasonable particulars of the claim:


 


(a)                                 in the
case of any claim under any Warranties within 18 months of the date of this
Deed;


 


(b)                                in the
case of any claim under the Tax Covenant or for breach of any Tax Warranties in
accordance with the time limits set out in paragraph 3.1(a) of schedule 4; and


 


(c)                                 excluding
the provisions of schedule 8, in the case of any other claim under this Deed,
20 years from the date of this Deed.


 


Provided
that, unless the Sellers assume conduct of the claim in question in accordance
with the provisions of clause 12.5(c), the liability of the Sellers in respect
of any claim shall absolutely terminate if proceeding in respect of it have not
been commenced with 12 months of service of notice of that claim.


 


12.4                          The
Sellers shall not be liable and no claim or claims shall be made against them
in respect of any claim other than a claim under the Tax Covenant or for breach
of the Tax Warranties:


 


(a)                                 if the
fact omission circumstance or occurrence giving rise to or forming the basis of
the claim has been fairly, fully and clearly disclosed to the Purchaser in the
Disclosure Letter (with the exception of claims made under schedule 8);


 


(b)                                to the
extent that provision or allowance for the matter or liability has been fairly,
fully and clearly made in the Accounts or Approved Final Balance Sheet;


 


(c)                                 to the
extent that the claim would not have arisen but for a change in legislation
made after the date of this Deed (whether relating to taxation, rates of
taxation or otherwise) or the withdrawal of any extra-statutory concession
previously made by the Inland Revenue or other taxing authority (whether or not
the change purports to be effective retrospectively in whole or in part);


 


(d)                                if the
matter giving rise to the claim is clearly provided for under the terms of this
Deed, any agreed form documents or carried out in the implementation of any of
them; or


 


(e)                                 if the
claim arises from any change in accounting policy or practice of the Purchaser
or any Group member introduced or having effect after Completion.


 


12.5                          Subject
to schedule 8, if any claim, other than a claim under the Tax Covenant or for
breach of the Tax Warranties, arises as a result of or in connection with a
liability or alleged liability owed to a third party:


 


(a)                                 the
Purchaser shall not accept, pay or compromise, or make any admission in respect
of, such liability or alleged liability without the prior written consent of
the


 


19





















 


Sellers,
such consent not to be unreasonably withheld having regard to the business
conditions of the Purchaser and the Group members;


 


(b)                                the
Purchaser shall procure that the relevant Group member takes such action to
avoid, dispute, resist, appeal, compromise or contest or prove the liability,
as may reasonably be requested by the Sellers;


 


(c)                                 the
Purchaser may, at the Purchaser’s sole discretion, allow the Sellers at the
Sellers’ expense to have all or any part of the conduct of any appeal, dispute,
compromise or defence of the dispute and of any incidental negotiations; and


 


(d)                                subject
to the provisions of (c) above, the Purchaser shall procure the relevant Group
member to make available to the Sellers such persons and all such assistance
and information as the Sellers may reasonably require for avoiding, disputing,
resisting, appealing, compromising or contesting or proving any such liability
including instructing such professional advisers as the Purchaser may agree to
nominate.


 


12.6                          If in
respect of any matter which could give rise to a breach of the provisions of
this Deed, other than a claim under the Tax Covenant or for breach of the Tax
Warranties, the Purchaser, or Group member is entitled to claim under any
policy of insurance, the Purchaser shall still be entitled to claim against the
Sellers in respect of that matter.  In
such circumstances, the Purchaser or the Group member shall use its reasonable
endeavours to claim against its insurers. 
If the Purchaser or Group member receives a payment from its insurers in
relation to a matter which the Sellers have also made a payment to the Purchaser
or Group member, then the Purchaser or Group member shall reimburse Sellers’
Representatives the lesser of the amount received from the insurers or the
amount received from the Sellers.


 


12.7                          Any
liability of the Sellers other than a claim under the Tax Covenant or for
breach of the Tax Warranties, will take account of any corresponding savings or
benefits actually received by the Purchaser or any Group member as a result of
the circumstances giving rise to the claim for breach of any provision of this
Deed.


 


12.8                          In
respect of the Trustees in their capacity as trustees of the Trusts, all
Warranties are given to the best of the Trustees’ respective knowledge
information and belief, and the liability of such Trustees in their capacity as
Trustee shall be restricted to the trust property in their hands at the time
that a claim is made by the Purchaser.


 


12.9                          Notwithstanding
anything to the contrary in this Deed:


 


(a)                                 the
Trustees shall not be liable under this Deed in respect of any relevant claim
to the extent that their liability exceeds the value of the assets held by them
directly or indirectly as Trustees of the relevant trust; and


 


(b)                                the
Purchaser shall in no circumstances have any right or relevant claim against
the personal assets of any Trustee in their capacity as Trustee in respect of
any liability under this Deed however, nothing in this clause prevents the
Purchaser from claiming against the Trustees in their capacity as Sellers.


 


12.10                    The
limitations on the Sellers’ liability set out in this clause 12 shall not apply
to any claim under the Warranties if the claim involves allegations of any
fraud or wilful concealment on the part of the Sellers or any of them or where
it is proved that the Sellers themselves or any of them withheld any material
disclosure relating to such claim, in each case on or prior to Completion.


 


12.11                    If the
Purchaser becomes aware of a matter which could give rise to a claim under this
Deed, it shall use its reasonable endeavours to give the Sellers notice of the
claim within


 


20





















 


45
days of it becoming aware of such facts. 
However, the Purchaser’s failure to provide such notice does not in any
way impact on the Purchaser’s ability to make a claim, or the validity of such
claim.


 


13.                                Confidentiality and announcements


 


13.1                          For the
purpose of assuring the full benefit of the business and goodwill of each Group
member and in consideration of the Purchaser agreeing to buy the Shares on the
terms of this Deed, each of the Sellers agrees with the Purchaser and its
successors in title as a separate and independent agreement that (save as may
be required by law, any securities exchange or regulatory or governmental body
having jurisdiction over it (including, but not limited to, HM Revenue &
Customs, the Listing Authority, the Panel on Takeovers and Mergers and the
Serious Fraud Office) and whether or not the requirement has the force of law
or any applicable regulatory authority to which the Sellers are subject and
then only to the extent so required) it shall not at any time hereafter divulge
(other than in accordance with clause 13.2) any information in relation to the
affairs or businesses of a Group member and that it shall not do anything to
harm the goodwill of a Group member.


 


13.2                          No
announcement or statement about this Deed or the subject matter of, or any
matter referred to in, this Deed shall be made or issued before, on or after
Completion by or on behalf of any of the parties without the prior written
approval of the other parties, or by the Sellers’ Representatives on behalf of
the Sellers, (such approval not to be unreasonably withheld or delayed)
PROVIDED that nothing shall restrict the making by any party (even in the
absence of agreement by the other parties) of any statement which may be
required by law or called for by the requirements of HM Revenue & Customs,
the UK Listing Authority, any Stock Exchange or any United States regulatory
authority, or any applicable regulatory authority to which the relevant party is
subject but then only to the extent so required.


 


14.                                Further assurance and availability
of information


 


14.1                          All
parties shall execute and deliver all such instruments and other documents and
take all such actions as the other parties may from time to time reasonably
require in order to give full effect to the provisions of this Deed.


 


14.2                          The
Sellers shall cause to be made available to the Purchaser all information in
the possession or under the control of any of them which the Purchaser may from
time to time reasonably require (before or after Completion) relating to the
business and affairs of the Group and upon reasonable notice shall permit the
Purchaser and its representatives to have access to documents containing such
information and to take copies thereof.


 


14.3                          The
Sellers shall at the Purchaser’s request at any time after the Completion Date
give to the Purchaser all reasonable assistance in obtaining any required
consents of the licensors or other contracting parties to the change of control
of each Group member under any licences of software included in the Relevant
Intellectual Property.


 


15.                                Interest


 


If
any amount required to be paid under this Deed is not paid when it is due, such
amount shall bear interest at the rate of 4.5 per cent. (4.5%) per annum
calculated on a monthly basis for the period from the relevant due date for
payment up to and including the date of actual payment, as well after as before
any judgment.


 


16.                                Continuing obligations and
assignment


 


16.1                          Each of
the obligations, warranties, representations, indemnities and undertakings
accepted or given by the Sellers or the Purchaser or any of them under this
Deed or any


 


21





















 


document
referred to herein (“Obligations”)
shall continue in full force and effect notwithstanding Completion taking place
and shall be binding on the respective successors, estates and personal
representatives of the Sellers.


 


16.2                          If the
Shares or any of them are sold or otherwise transferred at any time to an
Affiliate of Chase, the benefit of each of the Obligations shall be capable of
assignment to the relevant purchaser or transferee and if on such sale or
transfer the benefit of the Obligations is so assigned the Purchaser shall also
require the relevant purchaser or transferee to agree with the Sellers and each
of them to be bound by all Obligations and undertakings herein accepted or
given by the Purchaser.


 


17.                                Costs


 


All
parties shall pay their own costs and expenses in relation to the negotiation, preparation,
and implementation of this Deed (and the documents referred to herein),
including the fees and disbursements of their respective legal, accountancy and
other advisers.


 


18.                                Notices and Sellers’
Representatives


 


18.1                          Any
notice or other communication to be given under this Deed shall be in writing,
shall be deemed to have been duly served on, given to or made in relation to a
party if it is left at the authorised address of that party, posted by
registered post addressed to that party at such address, (the number of which
has been notified by the relevant party to the other parties) or sent by
facsimile transmission to a machine situated at such address and shall if:


 


(a)                                 personally
delivered, be deemed to have been received at the time of delivery;


 


(b)                                posted
to an inland address in the United Kingdom, be deemed to have been received on
the second Business Day after the date of posting and if posted to an overseas
address, be deemed to have been received on the fifth Business Day after the
date of posting; or


 


(c)                                 sent by
facsimile transmission, be deemed to have been received upon receipt by the
sender of a facsimile transmission report (or other appropriate evidence) that
the facsimile has been transmitted to the addressee,


 


PROVIDED
that where, in the case of delivery by hand or facsimile transmission, delivery
or transmission occurs after 6.00 pm on a Business Day or on a day which is not
a Business Day, receipt shall be deemed to occur at 9.00 am on the next
following Business Day.


 


18.2                          For the
purposes of this clause the authorised address of each party shall be the
address set out in schedule 1 or such other address as that party may notify to
the others in writing from time to time in accordance with the requirements of
this clause.


 


18.3                          The
Sellers hereby appoint Mr G.K. Naisbitt and Mr D. Greenman as their
representatives who may jointly authorise the making of any request, election,
proposal or consent expressed to be made on behalf of the Sellers or any Seller
to the Purchaser.  The Purchaser shall be
entitled at its sole discretion to have regard only to notices, including
requests, elections or proposals, issued by the Sellers’ Representatives.  Service of any notice or other communication
on both the Sellers’ Representatives shall be deemed to constitute valid
service thereof on all the Sellers.


 


19.                                Severability


 


If
any provision of this Deed (or of any document referred to herein) is held to
be illegal, invalid or unenforceable in whole or in part in any relevant
jurisdiction the legality, validity


 


22





















 


and
enforceability of the remaining provisions of this Deed (or such document)
shall not in any way be affected or impaired thereby.


 


20.                                Entire agreement and variation


 


20.1                          This
Deed (together with any documents referred to herein) contains the entire
agreement and understanding of the parties and supersedes all prior agreements,
understandings or arrangements (both oral and written) relating to the subject
matter of this Deed.


 


20.2                          Each of
the parties acknowledges and agrees that:


 


(a)                                 it does
not enter into this Deed and the documents referred to herein on the basis of
and does not rely, and has not relied, upon any statement or representation
(whether negligent or innocent) or warranty or other provision (in any case
whether oral, written, express or implied) made, given or agreed to by any
person (whether a party to this Deed or not) except those expressly set out or
referred to in this Deed and the documents referred to herein; and


 


(b)                                all
remedies available under English law are available to the parties in respect of
any misrepresentation or untrue statement made to it in relation to this Deed
(including, without limitation, rescission).


 


20.3                          No
variation, supplement, deletion or replacement of or from this Deed or any of
its terms shall be effective unless made in writing and signed by or on behalf
of each party.


 


21.                                General provisions


 


21.1                          The
Purchaser may release or compromise the liability of any of the Sellers
hereunder or grant to any Seller time or other indulgence without affecting the
liability of any other Seller hereunder.


 


21.2                          Any
waiver of a breach of any of the terms of this Deed or of any default hereunder
shall not be deemed to be a waiver of any subsequent breach or default and
shall in no way affect the other terms of this Deed.


 


21.3                          No
failure to exercise and no delay on the part of any party in exercising any
right, remedy, power or privilege of that party under this Deed and no course
of dealing between the parties shall be construed or operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power
or privilege preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. 
The rights and remedies provided by this Deed are cumulative and are not
exclusive of any rights or remedies provided by law.


 


21.4                          All
warranties, representations, indemnities, covenants, agreements and obligations
given or entered into in this Deed by more than one person are given or entered
into jointly and severally.


 


21.5                          This
Deed may be executed in any number of counterparts, each of which when executed
and delivered shall be an original, but all of which when taken together shall
constitute a single instrument.


 


22.                                Governing law and jurisdiction


 


22.1                          This
Deed (together with all documents to be entered into pursuant to it which are
not expressed to be governed by another law) shall be governed by, construed
and take effect in accordance with English law.


 


22.2                          The
courts of England shall have exclusive jurisdiction to settle any claim,
dispute or matter of difference which may arise out of or in connection with
this Deed (including


 


23





















 


without
limitation claims for set-off or counterclaim) or the legal relationships
established by this Deed.


 


22.3                          Each of
the parties hereto agrees that in the event of any action between any of the
parties hereto being commenced in respect of this Deed or any matters arising
under it, the process by which it is commenced, (where consistent with the
applicable court rules) may be served on them in accordance with clause 18 or
(in the case of the Sellers) delivered to the Sellers’ Representatives (who are
irrevocably authorised to receive the same on their behalf).


 


24





















 


Schedule 1


 


The Sellers and the Shares


 


	
  1.       Names
  and addresses of

  the Sellers

  	
   

  	
  2.       Number
  of Shares

  owned by them in the

  Company (indicate

  whether legally or

  beneficially owned)

  	
   

  	
  3.       Number
  of Shares

  to be sold

  	
   

  	
  4.       Cash

  consideration for

  the Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.       Mr A.W. Naisbitt
  and Mrs D. Naisbitt, the Trustees of the A.W. Naisbitt Discretionary
  Settlement Trust each of Gainford Hook Heath Road, Woking, Surrey GU22 0QE

  	
   

  	
  1,000 legally owned

  	
   

  	
  1,000

  	
   

  	
  £

  	
  399,326.60

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.       Mr A.W.
  Naisbitt and Mrs D. Naisbitt, the Trustees of the D. Naisbitt
  Discretionary Settlement Trust each of Gainford Hook Heath Road, Woking,
  Surrey GU22 0QE

  	
   

  	
  1,000 legally owned

  	
   

  	
  1,000

  	
   

  	
  £

  	
  399,326.60

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.       Mrs S.K.
  Greenman of Daveldon, Potters Lane, Woking, Surrey GU23 7AJ

  	
   

  	
  2,000 legally and beneficially owned

  	
   

  	
  2,000

  	
   

  	
  £

  	
  798,653.20

  	
   

  



 


25





















 


	
  1.       Names
  and addresses of

  the Sellers

  	
   

  	
  2.       Number
  of Shares

  owned by them in the

  Company (indicate

  whether legally or

  beneficially owned)

  	
   

  	
  3.       Number
  of Shares

  to be sold

  	
   

  	
  4.       Cash

  consideration for

  the Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.       Mr A.W.
  Naisbitt of Gainford Hook Heath Road, Woking, Surrey GU22 0QE

  	
   

  	
  2,130 legally and 130 beneficially owned

  	
   

  	
  2,130

  	
   

  	
  £

  	
  798,653.20

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.       Mrs D.
  Naisbitt of Gainford Hook Heath Road, Woking, Surrey GU22 0QE

  	
   

  	
  2,050 legally and 50 beneficially owned

  	
   

  	
  2,050

  	
   

  	
  £

  	
  798,653.20

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.       Mr G.K.
  Naisbitt of Old Paddock Cottage, Gaston Lane, South Warnborough, Hampshire
  RG29 1RH

  	
   

  	
  2,110 legally and 110 beneficially owned

  	
   

  	
  2,110

  	
   

  	
  £

  	
  798,653.20

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.       Mr D. Greenman
  of Daveldon, Potters Lane, Woking, Surrey GU23 7AJ

  	
   

  	
  55 legally and beneficially owned

  	
   

  	
  55

  	
   

  	
  £

  	
  0

  	
   

  



 


26





















 


Schedule 2


 


The Company and the Subsidiary Undertakings


 


	
  A.

  	
   

  	
  Concoat Holdings Limited

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Registered number

  	
   

  	
  00967743

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Registered office

  	
   

  	
  Alasan House, 2C Albany Park, Frimley Road, Camberley, Surrey, GU16
  7PH, United Kingdom

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Date of incorporation

  	
   

  	
  5 December 1969

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Class of company

  	
   

  	
  Private, limited by shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Authorised share capital

  	
   

  	
  20,000 ordinary shares of £1 each (£20,000)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Issued share capital

  	
   

  	
  10,345 ordinary shares of £1 each (£10,345)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Directors’/shareholders’ loans

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Directors

  	
   

  	
  Susan Kaye Greenman

  Arthur William Naisbitt

  Doreen Naisbitt

  Graham Kirk Naisbitt

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Secretary

  	
   

  	
  Doreen Naisbitt

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  Accounting reference date

  	
   

  	
  31 March

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  Accountants

  	
   

  	
  Pridie Brewster, Mount Manor House, 16 The Mount, Guildford, Surrey,
  GU2 4HS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  Tax district

  	
   

  	
  Wye Valley

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  Members

  	
   

  	
  (i)      Trustees of the
  A.W. Naisbitt Discretionary Settlement (1000 ordinary shares) 

  (ii)     Trustees of the
  D. Naisbitt Discretionary Settlement (1000 ordinary shares)

  (iii)    Mrs S.K. Greenman
  (2000 ordinary shares)

  (iv)    Mr A.W. Naisbitt
  (2000 ordinary shares legally owned and 130 ordinary shares beneficially
  owned)

  (v)     Mrs D. Naisbitt
  (2000 ordinary shares legally owned and 50 ordinary shares beneficially
  owned)

  (vi)    Mr
  G.K. Naisbitt (2000 ordinary shares legally owned and 110 ordinary
  shares beneficially owned)

  (vii)   Mr
  D. Greenman (55 ordinary shares legally and beneficially owned)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  Mortgages and charges

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  Subsidiary Undertakings

  	
   

  	
  Concoat Limited (96.67% legal owner and 3.33% beneficial owner)

  



 


27





















 


	
  B.

  	
   

  	
  Concoat Limited

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Registered number

  	
   

  	
  01480710

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Registered office

  	
   

  	
  Alasan House, 2C Albany Park, Frimley Road, Camberley, Surrey, GU16
  7PH, United Kingdom

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Date of incorporation

  	
   

  	
  21 February 1980

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Class of company

  	
   

  	
  Private, limited by shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Authorised share capital

  	
   

  	
  30,000 ordinary shares of £1 each (£30,000)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Issued share capital

  	
   

  	
  30,000 ordinary shares of £1 each (£30,000)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Directors’/shareholders’ loans

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Directors

  	
   

  	
  David Greenman

  Arthur William Naisbitt

  Doreen Naisbitt

  Graham Kirk Naisbitt

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Secretary

  	
   

  	
  Doreen Naisbitt

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  Accounting reference date

  	
   

  	
  31 March

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  Accountants

  	
   

  	
  Pridie Brewster, Mount Manor House, 16 The Mount, Guildford, Surrey,
  GU2 4HS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  Tax district

  	
   

  	
  Wye Valley

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  Legal and beneficial owner

  	
   

  	
  Concoat Holdings Limited (96.67% legal and 3.33% beneficial)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  Mortgages and charges

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  Subsidiary Undertakings

  	
   

  	
  Synergie (UK) Limited (100%)

  



 


28





















 


	
  C.

  	
   

  	
  Synergie (UK) Limited

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Registered number

  	
   

  	
  03733679

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Registered office

  	
   

  	
  Mount Manor House, 16 The Mount, Guildford, Surrey, GU2 4HS, United
  Kingdom

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Date of incorporation

  	
   

  	
  16 March 1999

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Class of company

  	
   

  	
  Private, limited by shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Authorised share capital

  	
   

  	
  1,000 ordinary shares of £1 each (£1,000)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Issued share capital

  	
   

  	
  2 ordinary shares of £1 each (£2)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Directors’/shareholders’ loans

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Directors

  	
   

  	
  David Greenman

  Arthur William Naisbitt

  Doreen Naisbitt

  Graham Kirk Naisbitt

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Secretary

  	
   

  	
  Doreen Naisbitt

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  Accounting reference date

  	
   

  	
  31 March

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  Accountants

  	
   

  	
  Pridie Brewster, Mount Manor House, 16 The Mount, Guildford, Surrey,
  GU2 4HS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  Tax district

  	
   

  	
  Wye Valley

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  Members

  	
   

  	
  Concoat Limited (100%)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  Mortgages and charges

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  Subsidiary Undertakings

  	
   

  	
  None

  



 


29





















 


Schedule 3


 


General Warranties


 


Except
where the context otherwise requires the General Warranties shall apply not
only to the Company but also to each Subsidiary Undertaking as if they had been
expressly repeated with respect to each Subsidiary Undertaking, naming it in
place of the Company throughout.


 


In
this schedule:


 


(a)                                 “connected” has the meaning attributed to it by section 839
of the ICTA 1988; and


 


(b)                                “Encumbrance” includes any charge, debenture, mortgage,
pledge, lien, assignment, hypothecation, security interest, title retention or
other security agreement or arrangement.


 


A.           Preliminary


 


The information set out in the recitals and
in schedules 1, 2, 3, 4, 5 and/or disclosed by the Disclosure Letter is true
and accurate in all respects and (so far as the Sellers are aware) there is no
matter which renders any of such information untrue, inaccurate, incomplete or
misleading.


 


B.            The Accounts


 


B.1                             The
copy of the Accounts annexed to the Disclosure Letter is a true and complete
copy.  The Accounts:


 


(a)                                 give a
true and fair view of the financial position and state of affairs of the
Company at the Balance Sheet Date and of its profit or loss for the period to
which they relate;


 


(b)                                have
been prepared in accordance with the best accounting principles, standards and
practices generally accepted in England at the date of this Deed, the Companies
Act 1985 and other applicable statutes and regulations;


 


(c)                                 have
been prepared, unless otherwise expressly stated therein, on a basis consistent
with the basis applied in the corresponding accounts for the preceding three
financial years;


 


(d)                                contain
full provision for or adequate details of all liabilities and capital commitments
of the Company at the Balance Sheet Date, whether actual, contingent,
quantified, disputed or otherwise;


 


(e)                                 contain
full provision for bad and doubtful debts, depreciation, amortisation,
obsolescence of assets and any foreseeable losses; and


 


(f)                                   are not
adversely affected by any extraordinary or non-recurring items unless otherwise
expressly stated therein.


 


B.2                             The
work in progress included in the Accounts has been valued on a basis excluding
profit and including adequate provision for losses which are or could
reasonably be expected on uncompleted contracts.


 


B.3                             All the
assets of the Company are correctly reflected in the Accounts and the values
placed on such assets are not materially in excess of current market values (on
a going


 


30





















 


concern basis) as at the Balance Sheet Date
and no asset of the Company was acquired other than on arm’s length terms.


 


B.4                             The
Company has paid its creditors the amounts in respect of which they were
included in the Accounts.


 


B.5                             The
profits of the Company for the three years ended on the Balance Sheet Date as
shown by the Accounts and the trend of profits thereby shown, have not been
affected to a material extent by inconsistencies of accounting practices, by
the inclusion of non-recurring items of income or expenditure, by transactions
entered into otherwise than on normal commercial terms or by any other factors
rendering such profits for all or any of such periods exceptionally high or
low.


 


B.6                             The
Company is not, and has not during the three years prior to the Balance Sheet
Date been a party to any agreement, arrangement or transaction pursuant to
which the Company is or was entitled to receive a financial advantage or is or
was obliged to incur or bear any costs, liabilities (whether contingent or
otherwise) risks or other expenditure of any nature (including, but not limited
to, any “off-balance sheet” financing arrangements), which is not fully
reflected in the Accounts or has not been fully reflected in the Company’s
accounts for any relevant period.


 


B.7                             The
management accounts of the Company for periods since the Balance Sheet Date,
copies of which are annexed to the Disclosure Letter, have been prepared by the
Company with due care and attention, and show a reasonably accurate view of the
state of affairs and profit or loss of the Company as at and for the period in
respect of which they have been prepared, but it is hereby acknowledged that
they are not prepared on a statutory basis.


 


C.                                    Business since the Balance Sheet
Date


 


C.1                              Since
the Balance Sheet Date:


 


(a)                                 the
Company has carried on its business prudently and in the ordinary and usual
course and so as to maintain the same as a going concern and without any
interruption or alteration in the nature, scope or manner of such business;


 


(b)                                other
than pursuant to the Group Restructuring, the Company has not acquired or
disposed of or agreed to acquire or dispose of any assets or assumed or
incurred or agreed to assume or incur any material liabilities (including
contingent liabilities) otherwise than in the ordinary course of its business
and (in the case of a disposal of the assets) for an amount which is lower than
book value or an open market arm’s length value whichever is the higher;


 


(c)                                 the
business, profitability or prospects of the Company have not been adversely
affected by any factor not affecting similar businesses to a like extent and
(so far as the Sellers are aware) there are no factors which are likely to have
such an effect;


 


(d)                                there
has been no change in the manner or time of payment of creditors, or the issue
of invoices or collection of debts, or policy of reserving for debtors or in
the amount of stock bought or agreed to be bought or in stock;


 


(e)                                 the
Company has not entered into, or agreed to enter into, any commitments
involving capital expenditure exceeding £5,000 in the aggregate;


 


(f)                                   other
than pursuant to the Group Restructuring, the Company has not borrowed or lent
or agreed to borrow or lend any money and no share or loan capital has been


 


31





















 


issued or agreed to be issued by the Company
and no loan or loan capital or preference capital of the Company has been
repaid in whole or part or has become liable to be repaid;


 


(g)                                no resolution
of the Company’s members has been passed, save for those representing the
ordinary business of an annual general meeting, and no dividend or other
distribution has been declared, made or paid by the Company;


 


(h)                                no
substantial supplier to or customer of the Company (being a supplier accounting
for more than five per cent. (5%) of the Company’s purchases or a customer
accounting for more than five per cent. (5%) of the Company’s sales) has ceased
or substantially reduced its trade with the Company or to the best of the
Sellers’ knowledge, information and belief is likely to cease to trade or
substantially reduce its trade with the Company or is likely to seek to alter
the terms of trade to the Company’s disadvantage.


 


D.            Share capital and constitution of the Company


 


D.1                            The
register of members of the Company contains complete and accurate records of
its members from time to time and all issues and transfers of shares in the
capital of the Company have been registered in accordance with the articles of
association of the Company from time to time in force, all such transfers being
duly stamped prior to registration.


 


D.2                             The
Company has not exercised or purported to exercise any lien over any of its
issued share capital.


 


D.3                             There
is no option, right of pre-emption, right or obligation to acquire, redeem or
convert or Encumbrance on, over or affecting the share capital (whether issued
or unissued and whether or not authorised capital) of the Company and neither
have the Sellers or the Company agreed to give or create any of the foregoing
and, so far as the Sellers are aware, no person has claimed to be entitled to
any of the foregoing.


 


D.4                             The
Company has complied with the provisions of the Companies Act 1985 (including,
but not limited to, section 151 of the Companies Act 1985) and is not
liable to pay any fines thereunder and all returns, particulars, resolutions
and other documents required under any legislation to be delivered on behalf of
the Company to the Registrar of Companies or to any other authority whatsoever
have been properly made and delivered.


 


D.5                             The
copy of the memorandum and articles of association annexed to the Disclosure
Letter is up to date, true and complete and has annexed thereto a copy of every
resolution, agreement or other document required to be annexed thereto pursuant
to section 380 of the Companies Act 1985. 
The Company is in possession of all necessary books, records and papers
relating to its assets and business and all such records have been properly and
accurately kept and completed.


 


D.6          The Shares
comprise all the shares in issue in the capital of the Company.


 


E.            Subsidiary undertakings and related operations


 


E.1                               The
Company is not the holder or beneficial owner of any shares or securities of
any other person (whether incorporated in the United Kingdom or elsewhere)
other than the Subsidiary Undertakings and has not agreed to acquire any such
shares or securities.


 


E.2                               The
Company is not and has not agreed to become a member of any partnership, joint
venture, consortium or other incorporated or unincorporated association and has
no branch, agency, place of business or establishment outside the United
Kingdom.


 


32





















 


F.            The Sellers


 


F.1                               No
liability has been incurred, directly or indirectly, by the Company to any
Seller or to any director of the Company (or any person connected with any of
them) or by any Seller (or other such person) to the Company other than in
respect of the normal accrual of directors’ fees, salaries and reasonable
business expenses.


 


F.2                               Other
than the Group Restructuring, there is not outstanding, and there has not at
any time during the last three years been outstanding, any arrangement to which
the Company is a party and in which any Seller or any director or any person
connected with any of them is or has been interested, whether directly or
indirectly.


 


F.3                               No
Seller nor any person connected with any Seller has any interest, directly or
indirectly, in any business, firm or company (other than Concoat Systems
Limited) which has a close trading relationship with or is in competition with
the Company.


 


F.4                               The
Company has not made any gift of any kind to any Seller or to any person
connected with any Seller or sold any property to any Seller or any such person
at a price which is less than the market value thereof.


 


G.            Assets


 


For the avoidance of doubt, the term ‘asset’
when used in this section shall not include any of the Properties.


 


G.1                              The
Company is the absolute owner of and is in actual possession of all the assets
used (or it is licensed to use) in the course of its business with full right
and power to sell those assets it owns in each case with full title
guarantee.  No person has the right to
call for any payment in respect of any of those assets and the Company has not
created or agreed to create any Encumbrance over any part of its undertaking or
assets.


 


G.2                              So far
as the Sellers are aware, no asset used in the course of the Company’s business
and hired, leased or rented by or obtained on hire-purchase by the Company has
been or is liable to be retaken into possession by the owner thereof.


 


G.3                              The
fixed assets owned by the Company or used by it in the course of its business
are in all respects suitable for the conduct of such business, are in good
condition and state of repair, and comply and have complied in all material
respects with all statutes and regulations applicable thereto.


 


G.4                              Details
of the vehicles used by the Company are set out in the Disclosure Letter and
all such vehicles are roadworthy, maintained in a serviceable condition, and
duly licensed and have had their Road Fund Tax paid within the applicable time
limits.


 


G.5                              The
Company’s stock in trade is in good condition and is capable of being sold by
the Company in the ordinary course of its business in accordance with its
current price list without rebate or allowance to a purchaser and is adequate
(and not excessive) in relation to the current trading requirements of its
business.


 


H.            Properties


 


H.1                             The
Properties comprise all of the land and premises owned, occupied or otherwise
used by the Company as described at schedule 5 and subject only to the
matters contained in the documents and deeds listed at schedule 5.


 


33





















 


	
  H.2

  	
   

  	
  The Company has not entered into any
  agreement to acquire or dispose of any land or premises or any interest
  therein which has not been completed.

  
	
   

  	
   

  	
   

  
	
  H.3

  	
   

  	
  The Company is in sole and undisputed
  occupation of the Properties and neither of the Properties are subject to any
  subleases, tenancies or other rights of occupation, in favour of third
  parties and the Company has fully performed and observed all of the covenants
  and conditions on the part of the tenant and so far as the Sellers are aware
  there are no notices relating to them nor are there any outstanding reviews,
  matters or proceedings which are yet to be commenced or concluded.

  
	
   

  	
   

  	
   

  
	
  H.4

  	
   

  	
  The Sellers are not aware, of any material
  outstanding claims, disputes, orders or notices adversely affecting the Properties.

  
	
   

  	
   

  	
   

  
	
  H.5

  	
   

  	
  As far as the Sellers are aware, the
  present use of each of the Properties as stated in schedule 5 and all
  development carried out on them complies fully with the Planning Acts and
  there are no outstanding conditions attached to any planning permissions.

  
	
   

  	
   

  	
   

  
	
  H.6

  	
   

  	
  (a)

  	
   

  	
  As far as the Sellers are aware,
  compliance has been made with all applicable statutory and bye-law
  requirements with respect to the Properties and there is no outstanding
  unobserved or unperformed obligation owed to, or necessary to comply with the
  requirements (whether formal or informal) of, any competent authority
  exercising statutory or delegated powers.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
   

  	
  As far as the Sellers are aware, there are not in force or required to
  be in force any licences whether under the Licensing Act 1964 or otherwise
  which apply to the Properties or their current use.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  H.7

  	
   

  	
  The Sellers have not and shall not assign or sublet the lease for the
  Hampshire Property or otherwise allow a third party to use or occupy the Hampshire
  Property.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  H.8

  	
   

  	
  (a)

  	
   

  	
  As far as the Sellers are aware, the Properties are directly served by
  all means of access, services and other facilities necessary for their
  current use.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
   

  	
  As far as the Sellers are aware, there are no proposed schemes or
  orders affecting any road or highway giving access to the Properties or any
  circumstances likely to lead to any such proposal, scheme or order which
  would adversely affect the use or enjoyment of the Properties.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  H.9

  	
   

  	
  As far as the Sellers are aware, none of the Properties are located in
  an area or subject to circumstances particularly susceptible to flooding nor
  is affected by past or present mining activity.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  H.10

  	
   

  	
  The Company has no existing or contingent liabilities in respect of
  any properties previously occupied by it or in which it owned or held any
  interest or in connection with which it acted as surety.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  H.11

  	
   

  	
  All written replies given on behalf of the Sellers by the Sellers’
  Solicitors to preliminary enquiries raised by the Purchaser’s Solicitors
  relating to the Properties are in all material respects true, complete and
  accurate.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  H.12

  	
   

  	
  So far as the Sellers are aware, the Properties are not subject to:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)

  	
   

  	
  any matters which might adversely affect the value of the Properties
  or the proper use, occupation or enjoyment of the Properties for the purpose
  for which they are now used and all matters which benefit the Properties have
  where necessary been properly protected by registration;

  



 


34





















 


(b)                                any
outgoings other than uniform business rate (except rating surcharge), water
rates and insurance premiums and in the case of leasehold properties, rent and
service charges and the Company is not in arrears with any such outgoings.


 


I.                                        Environmental/health and safety


 


I.1                                  The
Company has complied with all relevant Environmental Laws in relation to the
keeping, treating, transporting, deposit or disposal of any waste at or on or
arising from the Properties.  The Company
has not polluted any soil anywhere on the Properties (nor caused or permitted
the same to be done).


 


I.2                                  So far
as the Sellers are aware there are not now (nor have there ever been) any PCBs
or asbestos on at or in the Properties.


 


I.3                                 So far
as the Sellers are aware the Properties are not now and have never been
utilised as waste disposal sites or waste transfer stations.


 


I.4                                  So far
as the Sellers are aware the Company has all necessary Environmental Permits to
carry out its business and no expenditure in excess of £10,000 in total is
required to be spent to obtain or ensure compliance with any Environmental
Permit (including any improvement programmes) over the next three years.


 


I.5           So far as the
Sellers are aware except in accordance with a valid Environmental Permit there
has been no:


 


(a)                                 disposal
or discharge of waste on or from the Properties;


 


(b)                                emissions,
spills, seepages, releases, escapes or discharges from the Properties into any
Controlled Waters or into any drain, sewer, septic system, waste treatment,
storage or disposal systems servicing or located on the Properties; or


 


(c)                                 emissions,
releases, escapes or discharges into the atmosphere from the Properties or from
any plant, equipment or facilities located at the Properties.


 


I.6                                  So far
as the Sellers are aware there is no contamination of any groundwater
underneath or in the vicinity of the Properties and no remedial action in
relation to such groundwater has been carried out at or in respect of
contamination on or arising from the Properties.


 


I.7                                  With
respect to land in the previous ownership or use of the Company, the Company
has caused no pollution or environmental damage on such land or the surrounding
area and there is no obligation on the Company to clean up such land, nor any
pending or threatened action with respect to environmental damage on or arising
from such land.


 


I.8                                  The
Company has complied with the requirements of the Radioactive Substances Act
1993 (“RSA”) and all other Environmental Laws relating to radioactive
substances or materials and has no outstanding obligations under the RSA or
Environmental Laws and there are no matters or facts in existence which are, or
may be likely to give rise to any obligations under the RSA or any other
Environmental Laws at the Properties.


 


I.9                                  There
are annexed to the Disclosure Letter copies of all applications made for
Environmental Permits and copies of those issued and all relevant information
supporting or relevant to any such applications and Environmental Permits
(including any representations made in support of such) and copies of all
correspondence and other communications with or from any relevant regulatory
body, person or agency responsible for granting or otherwise refusing such
Environmental Permits.


 


35





















 


I.10                            The
Company has not carried on any process without a valid Environmental Permit or
in breach of any conditions attached to any such Environmental Permit.


 


I.11                            The
Company has not in the preceding two years received any complaint or notice
(whether in writing or otherwise) alleging or specifying any breach of or
liability under any Environmental Laws and so far as the Sellers are aware,
there are no claims pending, threatened or anticipated with respect to any
breach or alleged breach of or liability under any Environmental Laws.


 


I.12                            There
are annexed to the Disclosure Letter accurate and complete copies of any
environmental audit reports relating to the Properties and copies of all
sampling and test results obtained from all environmental and/or health samples
and tests taken at and around the Properties, including any obtained or taken
in anticipation or as part of the transaction contemplated by this Deed.


 


I.13                            There
have been no breaches of or liabilities caused or permitted to arise under any
applicable Environmental Laws so far as the Sellers are aware, and there are no
matters whatsoever which have given rise to or are likely to or may give rise
to any claims, actions or obligations whether in nuisance, trespass, negligence
or specifically under the rule in Rylands v Fletcher, or under any other
agreement, legal duty or obligation concerning contamination, decontamination
or other remediation of the Properties or land adjoining or in the vicinity of
the Properties or Controlled Waters at, beneath or in the vicinity of the
Properties, or concerning employee or third party exposure to any product,
material, substance, waste, air or noise emission, hazard or contamination
whatsoever.


 


I.14                            The
Company has complied with all relevant Environmental Laws relating to employee,
contractor and third party health and safety.


 


J.             Insurance


 


J.1                                 The
Company is now, and has at all material times been, adequately covered against
accident, damage, injury, public liability, third party loss (including product
liability), loss of profits and other risks normally covered by insurance by a
prudent company operating in the same business as the Company.


 


J.2           All insurance policies relating to
the assets and business of the Company have been disclosed to the Purchaser and
are summarised in or otherwise disclosed by the Disclosure Letter.


 


J.3                                 So far
as the Sellers are aware there are no circumstances which could lead to any
liability under such insurance being avoided by the insurers or the premiums
being increased and there is no claim outstanding under any such policy and (so
far as the Sellers are aware) there are no circumstances likely to give rise to
such a claim.


 


J.4                                 All
claims made by the Company under its past and present insurances have been
settled in full by the relevant insurers.


 


K.            Commercial agreements and arrangements


 


K.1          The Sellers have
disclosed to the Purchaser in the Disclosure Letter:


 


(a)                                 all
contracts with a term exceeding one year, unusual, abnormal, onerous contracts,
commitments and obligations of the Company now outstanding or which will become
capable of giving rise to a contract by an order or acceptance by another party
or parties whether for the purchase of materials, the sale of goods or
otherwise howsoever;


 


36





















 


(b)                                the
terms of all contracts for the purchase or sale of goods or materials
representing five per cent. (5%) or more by value of respectively the total
annual purchases or sales by the Company;


 


(c)                                 the
terms of all agency, distribution or licence agreements or arrangements to
which the Company is a party;


 


(d)                                a schedule of
material discounts and other special terms or similar arrangements offered or
granted by the Company to its customers and by suppliers to the Company; and


 


(e)                                 full
details of all agreements and arrangements for the importing of goods from
overseas together with full details of arrangements with overseas distributors,
agents and commission houses for such importing.


 


K.2                             The
Company does not have any unmatched open positions with respect to forward
purchases and or sales of any commodity, stock or currency and none of such
open positions could reasonably be expected to involve the Company in a loss.


 


K.3                             Other
than in relation to the Group Restructuring, there are no outstanding
liabilities or commitments on the Company arising from any arrangements for the
disposal of any shares, property or other assets (other than in the ordinary
course of business) previously owned by the Company.


 


K.4                             The
Company has not given any covenants limiting or excluding its right to do
business and/or compete in any area or field (whether limited by reference to a
geographical area or type of business) with any other person.


 


K.5                             Neither
the Company nor any other party to any agreement or arrangement with the
Company is in default to any material extent thereunder.  So far as the Sellers are aware, there are no
circumstances likely to give rise to such a default.


 


K.6                             There
are in force no powers of attorney given by the Company and no person is
entitled or authorised (whether as agent or otherwise) to bind or commit the
Company to any obligations outside the ordinary course of the Company’s
business.


 


K.7                             The
Company is not a party to any agreement or arrangement which is not entirely on
arm’s length terms and its financial position has not been affected by any such
agreement or arrangement during the preceding three years.


 


K.8                             There
is no outstanding liability or obligation in connection with any agreement or
arrangement involving the Company which has ended during the preceding three
years and no liability or payment obligation will arise in connection with any
agreement or arrangement involving the Group upon expiry or termination by the
Company of such agreement or arrangement in accordance with its terms
(including, but not limited to, any liability or obligation arising by virtue
of the Commercial Agents (Council Directive) Regulations 1993 or any analogous
legislation in any relevant territory).


 


L.            Intellectual property


 


L.1                               Except
for Relevant Intellectual Property the subject of a licence in favour of the
Company to the extent disclosed against paragraph L.2(a), the Company is the
sole absolute legal and beneficial owner of the Relevant Intellectual Property
free from Encumbrances.


 


L.2                               In this
paragraph L.2, “IP Arrangements”
means all material licences, permissions, consents, undertakings, settlements,
agreements, restrictions and arrangements relating


 


37





















 


to the Relevant Intellectual Property or
relevant to the use or exploitation thereof in or in connection with the
business of the Company.


 


(a)                                 No
party to any IP Arrangement is or has at any time been materially in default
under it.


 


(b)                                The
acquisition of the Shares by the Purchaser or the compliance with the terms of
this Deed will not cause the Company to lose the benefit of any licence, right
or privilege it presently enjoys under the IP Arrangements and none of the IP
Arrangements require any person’s consent in connection with such acquisition
or compliance.


 


(c)                                 No IP
Arrangements contain any conditions or terms void by virtue of section 44
Patents Act 1977 or any similar provision in any jurisdiction.


 


L.3                               No
employee or director of the Company or any predecessor in title is entitled to
or has claimed any interest in, or any payment or compensation in respect of,
any of the Relevant Intellectual Property and there are no pending applications
for licences of right or compulsory licences of any Relevant Intellectual
Property in any jurisdiction.


 


L.4                               So far
as the Sellers are aware, all the Relevant Intellectual Property is valid,
subsisting and enforceable.


 


L.5                               All
registered Intellectual Property (including domain names) and applications
therefor comprised in the Relevant Intellectual Property is owned by or
exclusively licensed to the Company is listed in the Disclosure letter and is
properly registered in the name of the Company or the relevant licensor who has
granted a licence disclosed against paragraph L.2.  No limitations on its use, enforceability or
ownership have been registered.  All
registry fees in respect thereof have been paid by the due date and no such
fees are due within three months of the Completion Date.


 


L.6                               So far
as the Sellers are aware, the carrying on of the business of the Company in the
manner and on the scale carried on at any time in the two years preceding the
date of this Deed does not and would not infringe or constitute any unlawful
use of any Intellectual Property of any third party.


 


L.7                               As far
as the Sellers are aware in the two years preceding the date of this Deed there
has been:


 


(a)                                 no
infringement or threatened infringement by any person; and


 


(b)                                no use
by any person otherwise than under a voluntary written licence,


 


of any of the Relevant Intellectual Property
owned by or exclusively licensed to the Company.


 


L.8                               None of
the Know-How which is material to the business of the Company is information
subject to any obligation of confidence to another person. All Know-How which
is material to the business is adequately documented and has been kept
confidential. All documents, software and other materials documenting such
Know-How form part of the assets of the Company.


 


L.9                               The
list of Intellectual Property set out at schedule 7 is all the
Intellectual Property of the businesses of the Company.


 


38





















 


M.           Compliance and litigation


 


M.1                          So far
as the Sellers are aware, the Company has conducted its business in all
material respects in accordance with all applicable laws and regulations of the
United Kingdom and any relevant foreign country and supra national authority
(including those intended for health and safety of employees and for the
protection of those owning, using or capable of being affected by goods and/or
services supplied by the Company and those relevant to websites, cross-border
and internet trading) and there is no order, notice, decree or judgment of any
Court or any governmental agency of the United Kingdom or any foreign country
or supra national authority outstanding against the Company which may have a
material adverse effect upon the assets or business of the Company.


 


M.2                          As far
as the Sellers are aware, all necessary licences, registrations, consents, permits
and authorisations (public and private) have been obtained and all necessary
filings and notifications made by the Company to enable the Company to carry on
its business effectively in the places and in the manner in which such business
is now carried on and all such licences, registrations, consents, permits,
filings, notifications and authorisations are valid and subsisting and (so far
as the Sellers are aware) there are no circumstances which can be reasonably
foreseen as likely to lead to any of them being suspended, cancelled or
revoked.


 


M.3                          The
Company is not now engaged in any litigation or arbitration proceedings and
there are no litigation or arbitration proceedings pending or threatened by or
against the Company, no injunction has been granted against the Company, the
Company has given no undertaking to any court or to any third party arising out
of any legal proceedings and (so far as the Sellers are aware) there is no
matter or fact in existence which might give rise to the same or form the basis
of any criminal prosecution against the Company.


 


M.4                          No
order has been made or petition presented or resolution passed for the
appointment of an administrator or receiver in relation to the Company, or for
its winding-up, nor has any distress, execution or other process been levied
against the Company.


 


M.5                          Neither
the Company nor any agreement, arrangement or practice to which it is a party,
has been the subject of any investigation or inquiry by any governmental,
administrative or regulatory body nor, so far as the Sellers are aware, are
there any circumstances which might give rise to the same.


 


M.6                          So far
as the Sellers are aware, the Company has not manufactured, sold or supplied
products which are, or were, or will become, in any material respect faulty or
defective or which do not comply in any material respect with any warranties or
representations expressly or impliedly made by the Company or with all
regulations, standards and requirements applicable in respect thereof.


 


M.7                          The
Company is not subject to any liability or obligation (save as may be implied
by law) to service, repair, maintain, replace or take back any goods supplied
by it.


 


N.            Employees


 


N.1                             The
basis of the remuneration payable to officers, employees and agents (if any) of
the Company at the date hereof whether under a contract of service, a contract
for services or otherwise is the same as that in force at the Balance Sheet
Date and the Company is under no contractual or other obligation to increase
the rates of remuneration of or make any bonus or incentive or other similar
payment to any of its officers, employees or agents at any future date.  There are no amounts owing to any employee
other than remuneration accrued due or reimbursement of business expenses.


 


39





















 


N.2                             There
are no employees of the Company employed under contracts of service which
cannot be terminated on three months’ notice or less without payment of
compensation (other than the statutory rights to payments of compensation under
the Employment Statutes).


 


N.3                             So far
as the Sellers are aware, in respect of all present and former officers and
employees of the Company the Employment Statutes have been duly complied with.


 


N.4                             True
and complete particulars of the total numbers of full-time and part-time
employees as at the Completion Date are specifically disclosed in the
Disclosure Letter.


 


N.5                             The
Company is not liable to make any payment to any employee or former employee by
way of damages (whether for breach of contract or otherwise) or compensation
for loss of office or employment or for redundancy, protective awards, wrongful
dismissal or unfair dismissal or for failure to comply with any order for the
reinstatement or reengagement of any employee or for any other liability
accruing from the termination of any contract of service or for services.


 


N.6                             No past
employee has a statutory right of return to work or has or may have a right to
be reinstated or reengaged.


 


N.7                             The
Company is not engaged or involved in any dispute arising out of, affected by
or otherwise relating to the provisions of the Employment Statutes, and there
are no circumstances known to the Sellers which could give rise to any such
dispute.


 


N.8                             There
has not during the past three years been any actual or threatened strike, work
stoppage, work to rule, lock out or overtime ban which has materially disrupted
the Company’s business nor has there been any material adverse change in
relations with employees or their representatives.


 


N.9                             No
trade union is recognised by the Company for any purpose whatsoever.


 


N.10                       There
is no arrangement in force between the Company and any of the employees in
relation to the payment of trade union subscriptions for membership directly
from the employees’ salary.


 


O.            Pensions


 


O.1                             Apart
from under the Sellers’ Schemes the Company has no obligation (actual or
contingent and whether legally enforceable or not) to provide or contribute to
the provision of any relevant benefit (as defined in section 612 ICTA
1988, but without the exception of benefits payable solely by reason of
accident) or like benefit for or in respect of any of the employees and
officers or former employees and former officers of the Group nor has any
proposal been announced to establish or contribute to any arrangement providing
such benefits.


 


O.2                             Complete
and accurate particulars of the Sellers’ Schemes are set out in the Disclosure
Letter, including (without limitation) true and complete copies or particulars
of each deed, document, resolution, action, practice or other matter which in
relation to the Sellers’ Schemes confers or describes any actual, prospective
or contingent right to benefits thereunder.


 


O.3                             The
Disclosure Letter contains a list of all of the employees and officers of the
Group who are members of or have any rights to benefits under the Sellers’
Schemes.


 


40





















 


O.4                             The
Disclosure Letter includes complete and accurate data pertaining to the
benefits payable or prospectively or contingently payable under the Executive
Plans to and in respect of Mr D. Greenman and Mr G.K. Naisbitt.


 


O.5                             No
discretion or power under the Sellers’ Scheme has been exercised by the
trustees or administrators or the Company or any other party and there is no
obligation to do so in respect of any of the employees, former employees or
officers or former officers of the Group.


 


O.6                            All
amounts due to the trustees or administrators or insurers of the Sellers’
Schemes from the Group or otherwise in respect of any of the employees or
former employees or officers or former officers of the Group have been paid.


 


O.7                            The
Sellers’ Schemes are approved as exempt approved schemes (within the meaning of
Chapter I or Chapter IV of Part XIV ICTA 1988) and nothing has been done
or omitted to be done which will or may result in the Sellers’ Schemes ceasing
to be exempt approved schemes.


 


O.8                            There
is in force, in respect of the Executive Plans, a contracting-out certificate
in relation to the Group and nothing has been done or omitted to be done which
will or may result in any contracting-out certificate being cancelled,
surrendered or varied.


 


O.9                             There
are no actions, claims or suits (other than routine claims for benefits)
outstanding, pending or threatened against the trustees or administrators of
the Sellers’ Schemes or against the Group in respect of any act, event or
omission or other matter arising out of or in connection with the Sellers’
Schemes or otherwise in relation to the provision of any relevant benefit (as
defined in paragraph O.1) and the Seller is not aware of any circumstance which
may give rise to such a claim.


 


O.10                       The
Sellers’ Schemes have at all times been operated in accordance with their
governing documentation and in accordance with all applicable laws and regulatory
requirements (including, without limitation, the requirements of Article 141
of the Treaty establishing the European Community relating to equal benefits
and admission to membership).


 


O.11                       No
event has happened which either has led or will lead to the Sellers’ Schemes
being wound up.


 


O.12                       The
Money Purchase Plan and the Executive Plans only provide and since 1 March 2002
(in the case of the Executive Plans) have only ever provided money purchase
benefits.


 


O.13                       There
is no funding deficit in respect of the final salary benefits promised to Mr D.
Greenman and Mr G.K. Naisbitt under the Executive Plans.


 


O.14                       The
Group has complied in full with its obligations under Welfare Reform and
Pensions Act 1999 to designate a stakeholder scheme for its relevant employees
(as that term is defined in section 3(9) of the above-mentioned Act).


 


P.            Finance


 


P.1                               Other
than sums due to suppliers and otherwise in the normal course of business, the
Company has no borrowings or indebtedness.


 


P.2                               The
Company has not discounted or factored its debts.


 


P.3                               The
Company does not own the benefit of any debt (whether present or future) other
than debts accrued to it in the ordinary course of its business.


 


41





















 


P.4                               The
Company has no outstanding Encumbrance granted in relation to any former
borrowings or indebtedness nor has it agreed to create any Encumbrance or
entered into or agreed to give or enter into any guarantee, suretyship,
indemnity or similar commitment or agreement.


 


Q.            Grants, etc


 


The Company is not subject to any
arrangement for the receipt or repayment of any grant, subsidy or financial
assistance from any government department or agency or any local or other
authority; and if it is so subject, the Company has not done, or omitted to do,
anything which could result in any such grant, subsidy or payment received or
receivable by it becoming repayable or being withdrawn or withheld.


 


R.            Consequences of this Deed


 


R.1                              So far
as the Sellers are aware, the acquisition of the Shares by the Purchaser or the
compliance with the terms of this Deed:


 


(a)                                 will
not cause the Company to lose the benefit of any right or privilege it
presently enjoys or cause any person who normally does business with the
Company not to continue to do so on the same basis as previously;


 


(b)                                will
not relieve any person of any obligation to the Company (whether contractual or
otherwise) or enable any person to determine any such obligation or any right
or benefit enjoyed by the Company or to exercise any right whether under an
agreement with or otherwise in respect of the Company;


 


(c)                                 will
not result in any present or future indebtedness of the Company becoming due or
capable of being declared due and payable prior to its stated maturity; and


 


(d)                                will
not give rise to or cause to become exercisable any right of pre-emption.


 


R.2                              No one
is entitled to receive from the Company any finder’s fee, brokerage, or other
commission in connection with the purchase by the Purchaser of the Shares.


 


S.            Completeness of disclosure and projections


 


S.1                               The
responses contained in the Due Diligence Checklist are true and complete and
have where necessary been supplemented in the light of changing circumstances
and (so far as the Sellers are aware) there is no matter or fact which has not
been disclosed which renders any such information untrue or misleading.


 


T.            Information technology


 


In this paragraph T:


 


“Bespoke Software” means
any software developed wholly or partly by employees of the Company or
commissioned by the Company;


 


“Services” means
computer and telecommunications-related services, including all arrangements
for the provision of data processing; and


 


“Systems” means
the computer systems, computer software and hardware, telecommunications
systems, network infrastructure and related equipment used in the business of
the Company.


 


42





















 


T.1                              The
Systems are of sufficient quality, capacity and processing power to carry out
(in conjunction with the Services currently provided to the Company) the
current data processing and telecommunications requirements of the Company, in
each case in a proper and efficient manner. 
All material components of the Systems are properly documented and
covered by appropriate maintenance and disaster recovery agreements.  No material part of the Systems is currently,
or has in the 12 months prior to the date of this Deed, been inoperative or
prone to material malfunction or error.


 


T.2                              Reasonable
precautions have been taken to preserve the security and integrity of the
Systems and there has not in the three years prior to Completion been any
material, unauthorised modification of any software or data in the Systems or
any fraud committed by use or abuse of the Systems.  So far as the Sellers are aware the Systems
contain no viruses or any code calculated to adversely affect any software or
data.


 


T.3                              In the
12 months prior to the date of this Deed there has been no material failure by
the Company or any other person to meet or comply with the service levels
relating to:


 


(a)                                 the
Systems; or


 


(b)                                any
Services provided by the Company to any person.


 


T.4          The Company has no
Bespoke Software.


 


T.5                              There
is no electronic or digital signature used in the business of the Company.


 


T.6                              The
Systems will in all respects correctly process and recognise the currency
exchange changes and related aspects of European Monetary Union (“EMU”) and will in all material respects
comply with the conversion parameters necessitated by EMU, including, without
limitation, the ability to hold accounting information in more than one
currency.


 


U.            Data protection warranties


 


In this paragraph, “Data Protection Legislation” means all
statutes, existing instruments, common law, regulations, directives, codes of
practice, decisions, recommendations and the like (whether in the United
Kingdom or the European Union or any other relevant jurisdiction) with which
the Company is legally obliged to comply concerning the protection and/or
processing of personal data.


 


U.1                             So far
as the Sellers are aware, the Company has materially complied with all relevant
requirements of the Data Protection Legislation.


 


U.2                             The
Company has not at any time received any notice or allegation from the
Information Commissioner, any similar regulatory authority or any tribunal or
court in any jurisdiction or any other person alleging non-compliance with Data
Protection Legislation in any jurisdiction or requiring the Company to change,
cease using, block or delete any personal data or prohibiting the transfer of
personal data to any place.


 


U.3                             The
Company has not received any notice or allegation from a data subject or any
other person claiming the right to compensation under any Data Protection
Legislation.


 


43





















 


V.            Trust related warranties


 


V.1          The Trustees have
full power and authority and have taken all action necessary to execute and
deliver and to exercise their rights and perform their obligations under this
Deed and each of the documents mentioned herein to which they are a party and
this Deed constitutes valid and binding obligations on each of them in
accordance with its terms.


 


V.2          The Trustees are
entitled to sell and transfer with full title guarantee the Shares set opposite
their respective names in schedule 1 column 2 to the Purchaser.


 


44





















 


Schedule 4


 


Tax Covenant and Warranties


 


Part A - Definitions
and Tax Covenant


 


1.                                      Definitions


 


In this schedule:


 


“Accounts Relief” means
any Relief taken into account in computing and so reducing or eliminating any
provision for Tax (including deferred Tax) which appears in the Approved Final
Balance Sheet or which was taken into account in the Approved Final Balance
Sheet as an asset;


 


“ACT” means
advance corporation tax within the meaning of section 14 of the ICTA 1988;


 


“CAA” means
the Capital Allowances Act 2001 and references to provisions therein include
references to the corresponding provisions in the Capital Allowances Act 1990;


 


“Code” means
the United States Internal Revenue Code of 1986, as amended through the date
hereof;


 


“Demand” means
any document issued or any claim made or action taken whether before or after
the date hereof by or on behalf of any person, authority or body whatsoever
(whether of the United Kingdom or elsewhere in the world) from which it appears
to the Purchaser or the Company that the Company has or may have a Tax
liability;


 


“Event” means
any transaction, act, event or omission of whatever nature;


 


“FA” means
Finance Act;


 


“Group Relief” means:


 


(a)                                 relief
the subject of a surrender or claim pursuant to Chapter IV of Part X of
the ICTA 1988;


 


(b)                                advance
corporation tax the subject of a surrender or claim pursuant to section 240
of the ICTA 1988; and


 


(c)                                 any tax
refund the subject of a surrender or claim pursuant to section 102 of the
FA 1989;


 


“Instalment Regulations” means
the Corporation Tax (Instalment Payments) Regulations 1998;


 


“Overprovision” means
the amount by which any provision in the Approved Final Balance Sheet relating
to Tax (other than a provision for deferred Tax) is overstated (except to the
extent that such overstatement results from the utilisation of an Accounts
Relief or Post-Completion Relief), applying the accounting policies, principles
and practices adopted in relation to the preparation of the Approved Final
Balance Sheet (and ignoring the effect of any change in law made after
Completion);


 


“Post-Completion Relief” means
any Relief which arises to the Purchaser or to the Company as a consequence of
any Event occurring or from income, profits or gains arising after Completion;


 


“Purchaser’s Tax Group” means
the Purchaser and any other company or companies which either are or become
after Completion, or have within the seven years ending at


 


45





















 


Completion, been treated as members of the
same group as, or otherwise connected or associated in any way with, the
Purchaser for any Tax purpose;


 


“Regulations” means
the Value Added Tax Regulations 1995;


 


“Relief” means
any relief, allowance, deduction in computing profits, credit or right to
repayment of Tax (including repayment supplement or interest thereon) granted
by or pursuant to any legislation or otherwise for Tax purposes whether of the
United Kingdom or elsewhere in the world;


 


“Tax” or “Taxes” means any and all forms of taxes,
fees, levies, duties, tariffs, imposts, contributions and other charges of any
kind (together with any and all interest, penalties, fines, charges, additions
to tax and additional amounts imposed with respect thereto) imposed by any
government or taxing authority anywhere in the world or arising under any tax
law or agreement, including without limitation: taxes or other charges on or
with respect to income, franchises, windfall or other profits, gross receipts,
property, sales, use, capital stock, payroll, employment, social security,
disability, workers’ compensation, unemployment compensation, or net worth;
taxes or other charges in the nature of excise, withholding, deductions, ad
valorem, stamp, transfer, value added, or gains taxes, license, registration
and documentation fees; and customs’ duties, tariffs, and similar charges and
whether directly or primarily chargeable against recoverable from or
attributable to the Company or any other person;


 


“VAT” means
value added tax; and


 


“VATA” means
the Value Added Tax Act 1994.


 


1.2                                References
to income or profits or gains shall include any other measure by reference to
which Tax is computed.


 


1.3                                References
to income or profits or gains earned, accrued, arising or received by any
person shall include income or profits or gains which are for the purposes of
any Tax treated as earned, accrued, arising to or received by such person.


 


1.4                                References
to income or profits or gains earned, accrued, arising or received on or before
a particular date (including, without limitation, Completion) or in respect of
a particular period shall include income or profits or gains which are for the
purposes of any Tax treated as earned or accrued, arising or received on or
before that date or in respect of that period.


 


1.5                                References
to the occurrence of Events on or before a particular date (including, without
limitation, Completion) or in respect of a particular period shall include
Events which are for the purposes of any Tax treated as having occurred or
existed at or before that date or in respect of that period.


 


1.6                                References
to the occurrence of any Event on or before Completion shall include the
combined result of two or more Events the first of which shall have occurred
(or pursuant to this paragraph shall be treated as having occurred) on or
before Completion and was not in the ordinary course of business of the Company
and the second or subsequent one or more of which occurs after Completion and
was or were in the ordinary course of business of the Company.


 


1.7                                References
to any Tax liability of the Company shall include among others:


 


(a)                                 liabilities
of the Company to make payments of or in respect of Tax;


 


(b)                                the
denial, loss, use or set off in whole or in part of any Accounts Relief;


 


46





















 


(c)                                 the use
or setting off in whole or in part against income, profits or gains earned,
accrued, arising or received on or before Completion, or Tax thereon, of any
Post-Completion Relief.


 


1.8                                References
to the “Claimant” are references
to whichever of the Purchaser or its successors in title or assigns is making a
claim or receiving a payment pursuant to this schedule.


 


1.9                                References
in this schedule to paragraphs are to paragraphs in Part A of this schedule unless
otherwise stated.


 


1.10                          References
in this schedule to the “Company”
shall mean and include references to the Company and each of the Subsidiary
Undertakings separately as if each Subsidiary Undertaking was referred to
expressly in place of the Company.


 


2.             Covenant


 


2.1                                Subject
as hereinafter expressly provided, the Sellers hereby jointly and severally
covenant on behalf of themselves and their respective legal personal
representatives, with effect from Completion, to pay to the Purchaser an amount
equal to:


 


(a)                                 any Tax
liability or payments on account of Tax imposed on or payable by the Company
which arises whether before, on or after Completion (including Completion
itself), by reference to an Event occurring (or deemed to occur for the
purposes of any Tax) or income profits or gains earned, accrued or received on
or before Completion;


 


(b)                                any
inheritance tax which:


 


(i)                                     is at
Completion a charge on any of the shares or assets of the Company or gives rise
to a power to sell, mortgage or charge any of the shares or assets of the
Company; or


 


(ii)                                  after
Completion becomes a charge on or gives rise to a power to sell, mortgage or
charge any of the shares or assets of the Company, being a liability in respect
of additional inheritance tax payable on the death of any person within seven
years after a transfer of value,


 


and in determining for the purposes of this
paragraph 2.1(b) whether a charge on or power to sell, mortgage or charge
any of the shares or assets of the Company exists at any time, the fact that
the inheritance tax is not yet payable, or may be paid by instalments, shall be
disregarded, and such Tax shall be treated as becoming due, and a charge or
power to sell, mortgage or charge as arising, on the date of the transfer of
value or other date or event on or in respect of which it becomes payable or
arises, and the provisions of section 213 of the Inheritance Tax Act 1984
shall not apply thereto;


 


(c)                                 any Tax
liability of the Company in respect of Tax for which the Company is not
primarily chargeable, which arises by reference to an Event occurring (or
deemed to occur for the purposes of any Tax) or income profits and gains
earned, accrued or received on or before Completion and which arises in consequence
of the failure to discharge such liability on the part of any company which has
at any time (whether before or after Completion) been a member of a group (as
defined from time to time for any Tax purposes) of which the Company has at any
time prior to Completion been a member and, including, without limitation, any
Tax liability arising to the Company pursuant to section 767A or 767AA of
the ICTA, section 190 of the TCGA or section 132 of the Finance Act
1988;


 


47





















 


(d)                                all
costs and expenses properly incurred by the Purchaser and the Company in
connection with any such Tax liability of the Company, or Demand from which it
appears to the Purchaser or the Company that any such Tax liability may arise or
has arisen, or in taking or defending any action under this Tax Covenant;


 


(e)                                 any
liability to pay for Group Relief or to repay, in whole or in part, any payment
previously made for Group Relief pursuant to any arrangement or agreement
entered into prior to Completion to the extent that such liability is not
provided for as a liability in the Approved Final Balance Sheet;


 


(f)                                   the
loss of the right to receive any payment for Group Relief to the extent that
such right to payment is provided for as an asset in the Approved Final Balance
Sheet;


 


(g)                                any Tax
liability of the Company arising directly or indirectly by reference to any of
the Restructuring Documents including but not limited to:


 


(i)                                     any Tax
liability of the Company arising from the sale and purchase of the equipment
business of Concoat Limited as set out in paragraph 4 of schedule 9 not
being considered to have been entered into at arms’ length, or from the
apportionment of the consideration thereunder;


 


(ii)                                  any Tax
liability of the Company arising from the transfer of the entire issued share
capital in Concoat Systems Limited from Concoat Holdings Limited to Mr A.W.
Naisbitt as set out in paragraph 1 of schedule 9 not being considered to
have been entered into at arms’ length;


 


(h)                                any
increased Tax liability arising in the Company as a result of the Company being
considered to have one or more associated companies for the purposes of s. 13
ICTA 1988 in the accounting period ending 31 March 2005;


 


(i)                                    any
deferred tax liability in the Company as at the date of Completion to the
extent that such deferred tax liability is not provided for as a liability in
the Approved Final Balance Sheet;


 


(j)                                    any Tax
liability arising in the Company as a result of payments made by Concoat
Limited to Multicore Solders Limited and/or Multicore Solders (S) PTE Limited
under an Asset Purchase Agreement entered into by those parties and Henkel KGaA
not being deductible for the purposes of calculating the profits of the Company
for corporation tax purposes.


 


2.2                                For the
purposes of this Tax Covenant the amount of a Tax liability of the Company
falling within paragraph 1.7(b) or 1.7(c) of this schedule shall
be taken to be as follows:


 


(a)                                 in the
case of a Tax liability within paragraph 1.7(b):


 


(i)                                     where
such Accounts Relief is a right to repayment of Tax, the amount of the Relief
so denied, lost, used or set off;


 


(ii)                                  where
such Accounts Relief is a deduction from or set off against income, profits or
gains, or Tax thereon, the Tax that would otherwise have been saved for the
accounting period in which the Accounts Relief arose but for such denial, loss,
use or set off; or


 


(iii)                               if in
such accounting period no Tax would otherwise have been saved because of an
insufficiency of income, profits or gains, or Tax thereon, against which such
Accounts Relief could have been offset, the Tax that would otherwise have been
saved for the accounting period or periods in which income, profits or gains,
or Tax thereon, arises or arose, against


 


48





















 


which such Accounts Relief could have been
offset but for such denial, loss, use or set off,


 


and in the case of either of sub-paragraphs
2.2(a)(ii) or 2.2(a)(iii) above, on the assumption that the Accounts
Relief in question would have been offset in priority to any other Relief
available in such period or periods; and


 


(b)                                in the
case of a Tax liability within paragraph 1.7(c), the amount of Tax for which
the Company would, but for such use or setting-off, have been liable and in
respect of which a claim could have been made against the Sellers under this
Tax Covenant.


 


3.             Limitations and exclusions


 


3.1                                The
Sellers shall not be liable under the Tax Covenant or the Tax Warranties in
respect of any Tax liability of the Company (or in respect of any costs and
expenses arising therefrom under paragraph 2.1(d)):


 


(a)                                 unless
the Purchaser has served on the Sellers a written notice giving such details of
the claim as the Purchaser then has on or before the later of (i) the
seventh anniversary of Completion or (ii) (in respect only of a Tax
liability arising under the Code) 180 days following the assessment of such Tax
liability by the relevant taxing authority; or


 


(b)                                to the
extent that provision or reserve was made in the Approved Final Balance Sheet
in respect of such Tax liability, or to the extent that payment or discharge of
such Tax liability was taken into account therein;


 


(c)                                 (except
in relation to any Tax liability arising in respect of the Tax accounting
period in which Completion occurs that is referable to an Event occurring (or
deemed to occur for the purposes of any Tax) or of income profits or gains
earned, accrued or received on or before Completion) to the extent that such
Tax liability arises or is increased by reason of the imposition of or increase
in the rates of Tax as a consequence of any change occurring after Completion
in law, or in published practice or concession of general application, whether
or not the change purports to have retrospective effect, which was not
announced before Completion;


 


(d)                                to the
extent that it would not have arisen but for a change of accounting policy or
practice of the Company after Completion, including without limitation a change
in the accounting reference date of the Company, save for a change to comply
with generally accepted accounting practice in the UK or where relevant with
international financial reporting standards;


 


(e)                                 to the
extent that it would not have arisen but for a voluntary act of the Purchaser
(or person deriving title from it) or the Company after Completion (which, for
the avoidance of doubt, shall not include the presentation for stamp duty or
transfer Tax purposes of any document where discharge of such stamp duty or
transfer Tax is necessary to effect registration in respect of the holding of
an asset or to establish title to an asset or to produce the relevant
instrument as evidence in civil proceedings or in a hearing before an
arbitrator or a referee) which the Purchaser knew would give rise to the Tax
liability, unless such act was carried out:


 


(i)                                     pursuant
to an obligation of the Company incurred prior to Completion; or


 


(ii)                                  in
compliance with any law, regulation or request of any competent authority for
Tax purposes; or


 


(iii)                               with
the agreement or at the request of the Sellers or any of them; or


 


49





















 


(iv)                              in the
ordinary course of business of the Company or the Purchaser;


 


(f)                                   to the
extent that the Purchaser is fully compensated for the relevant Tax Liability
or costs and expenses under any other provision of this Agreement;


 


(g)                                to the
extent that the income, profits or gains giving rise to a Tax liability under
paragraph 2.1 have actually accrued to the Company on or before Completion in
accordance with generally accepted accounting practice in the United Kingdom
and have not been taken into account in the Approved Final Balance Sheet;


 


(h)                                to the
extent that the Tax liability would not have arisen but for:


 


(i)                                     (with
the exception of any elections with respect to the Company pursuant to section 338(g) of
the Code) the making of a claim, election, surrender or disclaimer or the
giving of a notice or consent, after Completion, by the Purchaser or the
Company, unless such act was carried out:


 


(1)                                 pursuant
to an obligation of the Company incurred prior to Completion; or


 


(2)                                 in
compliance with any law, regulation or request of any competent authority for
Tax purposes; or


 


(3)                                 with
the agreement or at the request of the Sellers or any of them; or


 


(4)                                 in the
ordinary course of business of the Company or the Purchaser,


 


or


 


(ii)                                  the
failure or omission on the part of the Company or Purchaser to make such valid
claim, election, surrender or disclaimer or to give any such notice or consent
in circumstances where the making or giving of which was taken into account in
the preparation of the Approved Final Balance Sheet and notified in writing to
the Purchaser prior to Completion;


 


(i)                                    in
respect of stamp duty or stamp duty reserve tax payable on the transfer or
agreement to transfer the Shares pursuant to this Agreement;


 


(j)                                    to the
extent that the Tax liability arises as a result of the failure of the
Purchaser or the Company to comply to a material extent with its obligations
contained in paragraph 4, 6 or 8 of this Tax Covenant;


 


(k)                                 to the
extent that the Tax liability arises or is increased as a result of the Company
becoming a member of the Purchaser’s Tax Group.


 


3.2                                The
limitations set out in paragraph 3.1(a) on the liability of the Sellers in
relation to claims under this Tax Covenant or the Tax Warranties shall not
apply to any claim which involves substantiated allegations, made by any
competent authority for Tax purposes, of any fraudulent act or omission or of
any wilful default on the part of the Company or the Sellers prior to
Completion.


 


4.             Manner of making and conduct of
claims


 


4.1                                If the
Purchaser or the Company shall become aware of any Demand which appears to the
Purchaser to be relevant for the purposes of this Tax Covenant or the Tax
Warranties the Purchaser shall as soon as reasonably practicable (and in any
event within 14 days thereafter) give notice thereof to the Sellers setting out
reasonable details of the Demand


 


50





















 


(including so far as practicable reasonably
sufficient details of such claim, the due date for payment and the amount of
the claim under the Tax Covenant or the Tax Warranties in respect
thereof).  If the Purchaser fails to give
the Sellers prompt notice of a Demand as required by this Section 4.1,
then the Sellers shall not have any obligation to indemnify for any loss
arising out of such Demand to the extent that the loss is increased as a result
of the Sellers being precluded by the failure to give prompt notice from
contesting the Demand in both the administrative and judicial forums.


 


4.2                                If the
Sellers shall, within 14 days of the date of any notice given to them under
paragraph 4.1 of any such Demand, jointly and severally indemnify and secure
the Purchaser and the Company to the Purchaser’s reasonable satisfaction
against all losses, costs, interest, damages and expenses and any further
liability to Tax which may be incurred thereby, then the Purchaser shall
procure that the Company will (except in a case where fraudulent conduct or
wilful default is alleged by any Tax authority) take such action as the Sellers
may reasonably and promptly by written notice request to avoid, dispute,
resist, appeal or compromise any Demand; provided that where the Tax liability
which is the subject of the Demand has to be paid before an appeal can be made
or before any other action requested by the Sellers can be taken, the Purchaser
shall not be obliged to procure the Company to take any such action until the
Sellers shall have paid to the Purchaser, for the purpose of discharging the
Tax liability, an amount equal to the said liability, and in connection with
any action so requested by the Sellers:


 


(a)                                 the
appointment of solicitors and other professional advisers to the Company shall
be subject to the prior written approval of the Purchaser, such approval not to
be unreasonably withheld or delayed;


 


(b)                                the
Sellers shall ensure that no correspondence, pleading or other document is
sent, transmitted, issued, entered into or in any way published in connection
with the relevant Demand by the Sellers or their advisers without the prior
approval of the Purchaser, such approval not to be unreasonably withheld or
delayed;


 


(c)                                 the
Sellers shall submit no computations or returns, nor make any settlement or
compromise of the subject matter of the Demand, nor agree any matter in the
conduct of any dispute in relation thereto which is likely to affect the amount
of the Demand, or the future liability of the Company to Tax, without the prior
written approval of the Purchaser, such approval not to be unreasonably
withheld or delayed;


 


(d)                                if any
dispute arises between the Purchaser and the Sellers as to whether any Demand
should at any time be settled in full, or contested in whole or in part, such
dispute shall be referred for determination to a Barrister, of at least ten
years call at the English Bar with relevant experience, appointed by agreement
between the Purchaser and the Sellers or (if they do not agree) upon the
application by either party to the President for the time being of The Law
Society, whose determination shall be final. 
The Barrister so appointed shall be asked to advise whether, in his
opinion, (acting as an expert and not as an arbitrator), an appeal against the
Demand would, on the balance of probabilities, be likely to succeed and shall
be instructed, if the dispute relates to a Demand issued by a Tax authority
outside the United Kingdom, to obtain such advice from professional advisers of
the relevant jurisdiction as he thinks necessary in order to arrive at his
opinion, and also to determine how the costs of obtaining his opinion should be
allocated between the parties hereto. 
If, but only if, such opinion is in the affirmative shall an appeal be
made and that Demand not then settled. 
Any further dispute arising between the parties as to whether any
further appeal should be pursued following determination of an earlier appeal
(whether or not in favour of the Company) shall be resolved in a similar
manner; and


 


51





















 


(e)                                 save as
otherwise expressly provided herein, the Purchaser shall give and shall procure
that the Company shall give the Sellers all reasonable co-operation and
assistance for the purposes of taking such action as aforesaid.


 


4.3                                If the
Sellers do not request the Purchaser to take any action within 14 days as
aforesaid, or the Purchaser and the Company shall not be indemnified at any
time and secured as provided in paragraph 4.2 or Counsel shall advise (on the
balance of probabilities pursuant to paragraph 4.2(d)) that an appeal against
the relevant Demand is not likely to succeed, or the Sellers otherwise fail to
fulfil their obligations hereunder, the Purchaser and the Company shall be free
to take such action in relation to the Demand as it or they may in its or their
absolute discretion think fit.


 


5.             Payment of claims


 


5.1                                Payments
by the Sellers pursuant to the Tax Covenant shall be made in cleared and
immediately available funds on the days specified in paragraph 5.2 below.


 


5.2                                The
days referred to in paragraph 5.1 are as follows:


 


(a)                                 if the
Tax liability giving rise to a claim under this Tax Covenant involves an actual
payment of Tax by the Company, the day which is the later of five Business Days
after demand is made therefor by or on behalf of the Claimant, and three
Business Days before the date on which that Tax becomes due and payable to the
relevant Tax authority;


 


(b)                                if the
Tax liability giving rise to a claim under this Tax Covenant does not involve
an actual payment of Tax:


 


(i)                                     if
involving the denial, loss, use or setting off in whole or in part of an
Accounts Relief which is a right to repayment of Tax, the day which is the
later of five Business Days after demand is made therefor by or on behalf of
the Claimant, and the day on which such Tax would otherwise have been repaid;


 


(ii)                                  if
involving the denial, loss, use or setting off of any other Accounts Relief
within paragraph 2.2(a), the day which is the later of five Business Days after
demand is made therefor by or on behalf of the Claimant, and the day on which
the Tax that would otherwise have been saved becomes due and payable to the
relevant Tax authority;


 


(iii)                               if
involving the use or setting-off of any Post-Completion Relief within paragraph
2.2(b) the day which is the later of five Business Days after demand is
made therefor by or on behalf of the Claimant, and the day on which the Tax
saved thereby would otherwise have become due and payable to the relevant Tax
authority;


 


(c)                                 if
involving a payment for, or repayment of a payment for, Group Relief, the day
which is the later of five Business Days after demand is made therefor by or on
behalf of the Claimant, and three Business Days before that payment or
repayment is due and payable;


 


(d)                                in any
other case, five Business Days after the date on which demand is made therefor
by or on behalf of the Claimant.


 


5.3                                For the
purposes of this paragraph 5, the date on which an amount of corporation tax
(the “Corporation Tax”) does or
would become due and payable by a company, being the Company or the Purchaser
(the “Relevant Company”), shall be
determined to be:


 


52





















 


(a)                                 in any
accounting period of the Relevant Company ending on or after 1 July 1999
in which the Relevant Company is a “large company” within the meaning of the
Instalment Regulations, the date or dates upon which the Corporation Tax would
be provided to be due and payable by Regulations 4 and 5 of the Instalment
Regulations on the assumption that the Corporation Tax payable by the Relevant
Company is the “total liability” of the Relevant Company for that period within
the meaning of the said Regulations 4 and 5; or


 


(b)                                in any
other accounting period of the Relevant Company, the date which is nine months
following the end of the accounting period.


 


5.4                                For the
purposes of this paragraph 5, references to the day on which an amount of Tax
which is not UK Corporation Tax becomes due and payable to the relevant Tax
authority shall be the last day on which such Tax may by law be paid without
incurring any penalty or liability for interest in respect thereof.


 


6.             Tax returns and computations


 


6.1                                Without
prejudice to paragraph 4, the Sellers or their duly authorised agents shall be
responsible for, and have the conduct of preparing, submitting to and agreeing
with the relevant Tax authorities all Tax returns and computations of the
Company, including (without limitation) claims and/or surrenders by way of
Group Relief, for all Tax accounting periods of the Company ending on or before
Completion and in connection therewith:


 


(a)                                 all
returns, computations, documents and substantive correspondence relating
thereto shall be submitted in draft form by the Sellers to the Purchaser or
their respective duly authorised agents for comment;


 


(b)                                the
Purchaser or its respective duly authorised agent shall comment within 21 days
of such submission but if the Sellers have not received any comments within 21
days, the Purchaser and their respective duly authorised agents shall be deemed
to have approved such draft documents;


 


(c)                                 the
Sellers shall take into account all reasonable comments and suggestions made by
the Purchaser or its respective duly authorised agents;


 


(d)                                the
Sellers and the Purchaser shall each respectively afford (or procure the affordance)
to the other or their duly authorised agents of information and assistance
which may reasonably be required to prepare, submit and agree all such
outstanding Tax returns and computations;


 


(e)                                 the
Sellers and the Purchaser shall as soon as practicable deliver to each other
copies of all correspondence sent to or received from any Tax authority;


 


(f)                                   the
Purchaser undertakes to procure that the Company shall at the request of the
Sellers sign and submit to the relevant Tax authority all such notices of
claim, surrender or consent to surrender (including provisional or protective
notices of claim, surrender or consent to surrender in cases where any relevant
Tax computations have not yet been agreed) and all such other documents and
returns as the Sellers shall reasonably request to give effect to the foregoing
provisions provided that the Purchaser shall not be obliged to procure that the
Company sign and submit any document which in its reasonable opinion it
considers to be wrong, misleading or inaccurate in any material respects.


 


6.2                                The
provisions of paragraph 6.1 (other than paragraph 6.1(f)) shall apply in
respect of the Tax accounting period of the Company in which Completion falls
as if the word “Sellers” reads “Purchaser” and the word “Purchaser” reads “Sellers”
PROVIDED THAT the Sellers shall not have any right to comment on or to receive
copies of correspondence in


 


53





















 


relation to any matter which relates solely
to an Event or Events occurring after Completion and which does not affect the
liability of the Sellers under this Tax Covenant.


 


7.             No witholdings, etc


 


7.1                                All
sums payable by the Sellers under this agreement shall be paid free of and
without any rights of counterclaim or set off, and without deduction or
withholding on any ground whatsoever, save only as may be required by law.  If any such deduction or withholding is
required by law the Sellers shall be obliged to pay to the Claimant such amount
as will ensure that, after any such deduction or withholding has been made, the
Claimant shall have received a sum equal to the amount that the Claimant would
otherwise have received in the absence of any such deduction or withholding.


 


7.2                                If any
competent authority for Tax purposes charges to Tax any sum paid (the “original payment”) to the Claimant
hereunder the Sellers shall be obliged to pay to the Claimant such additional
amount (the “additional payment”)
as will ensure that, after the payment of the Tax so charged on the original
payment and any Tax chargeable on the additional payment, there shall remain a
net sum equal to the amount of the original payment, such additional payment to
be paid five Business Days after the Claimant has served notice that Tax on the
original payment has become due and payable, or would have become due and
payable but for the availability of a Post-Completion Relief or Accounts
Relief.


 


8.             Corresponding savings and refunds


 


8.1                                If any
Tax liability which has resulted in a payment having been made by the Sellers
under this Tax Covenant or for breach of any of the Tax Warranties has given
rise to a Relief (other than an Accounts Relief) for the Company or the
Purchaser which would not otherwise have arisen, then:


 


(a)                                 the
Purchaser shall procure that full details of such Relief are given to the
Sellers as soon as reasonably practicable; and


 


(b)                                to the
extent that the liability of the Purchaser or the Company to make an actual
payment of or in respect of Tax is reduced by reason of such Relief from the
amount that such liability would have been but for the availability of such
Relief, the Purchaser, if so requested by the Sellers, shall, on the date when
the Purchaser or the Company would have been under an obligation to pay the Tax
liability so reduced make a repayment to the Sellers of an amount equal to the
lower of the amount by which such liability is so reduced and the amount of the
payment referred to at the beginning of this paragraph 8.1 made by the Sellers.


 


8.2                                If the
Sellers at any time pay to the Purchaser an amount pursuant to a claim under
this Tax Covenant or under the Tax Warranties and the Purchaser or the Company
is or becomes entitled to recover from some other person (other than the
Company or the Purchaser, but including any Tax authority) any sum in respect
of the matter giving rise to such claim (other than by reason of any Accounts
Relief or Post-Completion Relief), the Purchaser will notify the Sellers of its
entitlement as soon as reasonably practicable after becoming aware of such entitlement
and, if so required by the Sellers, will (and will procure that the Company
will), at the cost of the Sellers and upon the Sellers providing security to
the reasonable satisfaction of the Purchaser against all costs, losses or
damages, which may thereby be incurred, take all reasonable steps to enforce
such recovery (provided that the Company and the Purchaser shall not be obliged
to take any action which they reasonably consider to be prejudicial to their
material commercial interests), keeping the Sellers fully informed of the
progress of any action taken and providing them with copies of all relevant
correspondence and documentation, and such Purchaser shall promptly following
such recovery repay to the Sellers the lesser of:


 


54





















 


(a)                                 to the
extent that the sum recovered relates to the matter giving rise to such claim,
the sum so recovered by such Purchaser or the Company from such other person
(including sums recovered in respect of costs and any interest or repayment
supplement received in respect of the sum recovered (to the extent that the
interest or repayment supplement relates to the period since the payment by the
Sellers to the Purchaser), but less any costs of recovery not previously
reimbursed and less any Tax chargeable on the sum recovered); and


 


(b)                                the
amount referred to above paid by the Sellers to such Purchaser.


 


8.3                                Where
the lesser sum is that described under paragraph 8.2(b), any balance shall be
carried forward and set against any future liability of the Sellers to make
payment under this Tax Covenant or for breach of any of the Tax Warranties.


 


9.             Overprovisions


 


9.1                                If, on
or before the seventh anniversary of Completion, the auditors for the time
being of the Company certify (at the request and expense of the Sellers) that
any provision for Tax in the Approved Final Balance Sheet has proved to be an
Overprovision, then:


 


(a)                                 the
amount of any Overprovision shall first be set off against any payment then due
from the Sellers under this Tax Covenant;


 


(b)                                to the
extent that there is an excess, a refund shall be made to the Sellers of any
previous payment or payments made by the Sellers under this Tax Covenant or the
Tax Warranties (and not previously refunded under this Tax Covenant) up to the
amount of such excess; and


 


(c)                                 to the
extent that such excess as referred to in paragraph 9.1(b) is not
exhausted, the remainder of that excess shall be carried forward and set off
against any future payment or payments which become due from the Sellers under
this Tax Covenant or the Tax Warranties.


 


9.2                                After
the Company’s auditors have produced any certificate under this paragraph 9,
the Sellers or the Purchaser may, at any time before the seventh anniversary of
Completion and at the cost of the requesting party, request the auditors for
the time being of the Company to review that certificate in the light of all
relevant circumstances, including any facts of which they were not or it was
not aware, and which were not taken into account, at the time when such
certificate was produced, and to certify whether, in their opinion, the
certificate remains correct or whether, in light of those circumstances, it
should be amended.


 


9.3                                If the
auditors make an amendment to the earlier certificate and the amount of the
Overprovision is revised, that revised amount shall be substituted for the
previous amount and any adjusting payment that is required shall be made by or
to the Sellers (as the case may be) as soon as reasonably practicable.


 


10.           Miscellaneous


 


10.1                          The
Sellers, after the review and consent by the Purchaser, shall file such
applications and documents as shall permit any Tax to be assessed and paid on
or prior to Completion in accordance with any available pre-sale filing
procedure. Each party to this Agreement shall execute and deliver all
instruments and certificates necessary to enable each other party to comply
with the foregoing.


 


10.2                          All Tax
sharing agreements or similar agreements with respect to or involving the
Company shall be terminated as of Completion and, after Completion, the Company
shall not be bound thereby or have any liability thereunder.


 


55





















 


10.3                          From
and after the date of this Agreement, the Sellers shall not without the prior written
consent of the Purchaser (which may, in its sole and absolute discretion,
withhold such consent) make, or cause or permit to be made, any Tax election
not consistent with prior practices that would materially affect the Company.


 


10.4                          Nothing
in this Agreement will preclude the Purchaser, or any of the direct or indirect
shareholders of the Purchaser, from making elections with respect to the
Company pursuant to section 338(g) of the Code.


 


56





















 


Schedule 4


 


Tax Covenant and Warranties


 


Part B - Tax
Warranties


 


The
Sellers represent and warrant to the Purchaser that the statements contained in
this schedule are correct and complete as of the date of this Agreement
and will be correct and complete as of Completion:


 


1.             Accounts


 


All liabilities for Tax, whether actual,
contingent, deferred, quantified, disputed or otherwise, of the Company
measured by reference to income, profits or gains earned, accrued or received
on or before the Balance Sheet Date, or arising in respect of an Event
occurring on or before that date, are fully provided for or, as appropriate,
disclosed in the Accounts to the extent required by the applicable financial
reporting standard.


 


2.             Position since the Balance Sheet Date


 


Since the Balance Sheet Date:


 


(a)           the Company has
not engaged in any transaction, and no Event has occurred, which has given rise
or will give rise to a liability to Tax (or which, but for the availability of
any Relief, would have given or would give rise to such a liability) other than
Tax in respect of the normal income or receipts of the Company arising from
transactions entered into by it in the ordinary course of business;


 


(b)           the Company has
not made, or incurred any liability to make, any payment in excess of £5,000
which will not be deductible for the purposes of Tax on the income profits or
gains of the Company;


 


(c)           no Event has
occurred in relation to the Company:


 


(i)            that will or may
give rise to a liability to Tax on the disposal (or deemed disposal) of capital
assets; or


 


(ii)           to which the
provisions of any enactment that has or may have the effect of substituting a
different consideration from that actually payable or receivable apply; or


 


(iii)          that has or may
have the effect of crystallising a liability to Tax that, had such Event been
planned or predicted at the Balance Sheet Date, should have been reflected in
the provisions for deferred tax contained in the Accounts; and


 


(d)           no accounting
period of the Company for the purposes of any Tax has ended otherwise than by
effluxion of time.


 


3.             Compliance


 


(a)           All necessary
information, notices, returns, particulars, declarations, entries, claims for
Reliefs, and computations have been properly and duly submitted on time by the
Company to the relevant Tax authority and such submissions are true and
accurate in all material respects, have been prepared on a proper basis, and
are not the subject of any question or dispute nor so far as the Sellers are
aware are likely to become the subject of any material question or dispute
regarding liability or potential liability of the Company to any Tax or
regarding the availability to the Company of any Relief.  All Taxes required to be shown on such
returns


 


57





















 


and reports, or otherwise due, have been
timely paid. No adjustment relating to such returns has been proposed formally
or informally by any Tax authority and, to the knowledge of any Seller, no
basis exists for any such adjustment. There are no pending or, to the knowledge
of any Seller, threatened actions or proceedings for the assessment or
collection of Taxes against the Company.


 


(b)           Except as
disclosed in the Disclosure Letter, the Company has not in the past 7 years
been the subject of any investigation, audit or disclosure by or involving any
investigation unit of any Tax authority, and has not paid or become liable to
pay any penalty, surcharge, fine or interest in respect of Tax, and so far as
the Sellers are aware there are no circumstances that make it likely that the
Company will, in the foreseeable future, be so subject, or will incur any such
liability.  In addition, there are no
requests for information by any Tax authority currently outstanding that could
affect the Taxes of the Company.  There
are no proposed reassessments of any property owned by the Company that could
increase the amount of any Tax to which the Company would be subject. The
Company does not have any income reportable for a period ending after
Completion but attributable to a transaction (e.g., an instalment sale)
occurring in or a change in accounting method made for a period ending on or
prior to Completion which resulted in a deferred reporting of income from such
transaction or from such change in accounting method (other than a deferred
intercompany transaction).


 


4.             The Disclosure
Letter contains full details of all claims, withdrawals of claims,
notifications, disclaimers or elections assumed to have been made for the
purposes of the provisions or reserves for Tax included in the Balance Sheet
that have not actually been made at the date hereof, and of any current
agreements or arrangements between the Company and any Tax authority for its
taxation on any concessionary basis (other than pursuant to published extra-statutory
concessions).


 


5.             All Tax for which
the Company is liable (in so far as such Tax ought to have been paid) has been
paid, the Company has duly deducted all amounts from any payments from which
Tax falls to be deducted at source, and has duly paid or accounted for such
amounts to the relevant Tax authority.


 


6.             Residence/overseas activities


 


The Company is and has always been resident
in the United Kingdom for the purposes of taxation and is not and has never
been resident in any other jurisdiction, or carried on business through a
branch, agency or permanent establishment situated outside the United
Kingdom.  The Company has never been an
agent or permanent establishment of any other person resident outside the
United Kingdom. In addition, the Company is not subject to any accumulated
earnings Tax penalty or personal holding company Tax or similar Tax.  The Company is not owned, directly,
indirectly or by attribution, by a “United States person” (as defined under Section 7701(a)(30)
of the Code).


 


7.             Secondary liabilities


 


(a)           The Company is
not, and so far as any Seller is aware will not become, liable to pay any Tax
or to be deprived of any Relief otherwise available to it, or to make
reimbursement or indemnity in respect of any Tax, for which some other company
or person is or was primarily liable. 
The Company is neither a party to nor is bound by any Tax sharing
agreement.


 


(b)           No charge, lien,
security, interest, encumbrance or other third party right has arisen or, so
far as the Sellers are aware, will arise over an asset of the Company in
respect of unpaid Tax.


 


58





















 


8.             Distributions, etc


 


The Company has not:


 


(a)           made any
distribution or deemed distribution within the meanings of sections 209, 210 or
418 of the ICTA 1988 except as provided for in the Accounts;


 


(b)           repaid, redeemed
or purchased or agreed to repay, redeem or purchase any of its share capital;
or


 


(c)           capitalised or
agreed to capitalise in the form of shares or debentures any profits or
reserves of any class or description, or otherwise issued or agreed to issue
share capital otherwise than wholly for new consideration (as defined in section 254
of the ICTA 1988).


 


9.             Capital allowances


 


The aggregate book value of each of the
assets of the Company, exclusive of any value attributable to an asset in
excess of its cost, on which an entitlement to Industrial Building Allowances
or other allowances in respect of capital expenditure has arisen under the CAA,
in or adopted for the purposes of the Accounts, does not exceed the aggregate
residue of expenditure or written down value attributable to such assets for
the purposes of that Act, and the aggregate book value (exclusive of any value
attributable to an asset in excess of its cost) of plant and machinery
allocated to a pool of plant and machinery on which an entitlement to capital
allowances has arisen under the CAA does not exceed the written-down value of
the qualifying expenditure in respect of each such pool under that Act.


 


10.           Chargeable gains


 


(a)           The book value of
each asset of the Company as shown in or adopted for the purposes of the
Accounts (if such asset was owned at the Balance Sheet Date) or the value of
the consideration actually given for each asset of the Company (if such asset
was acquired since the Balance Sheet Date) is such that if the asset were
disposed of at Completion at its book value as shown in or adopted for the
purpose of the Accounts or for the value of the consideration actually given
for it (as applicable) no chargeable profit or gain for Tax purposes would be
incurred in respect of the asset.


 


(b)           No allowable loss
which might accrue on disposal by the Company of any asset is liable to be
reduced or eliminated, and no chargeable gain is liable to be created or
increased, by virtue of any depreciatory transaction or reduction in value of
that or any related asset for the purposes of any Tax imposed on the gain
arising from the disposal of capital assets.


 


11.           Close company


 


The Company is not, nor has it been in
respect of any accounting period ended within six years prior to the date of
signing of this Agreement, a close company within section 414 of the ICTA
1988.


 


12.           Transfer pricing, thin capitalisation


 


All transactions, agreements and
arrangements to which the Company has been a party have been and are on fully
arm’s length terms. No notice or enquiry has been made by any Tax authority in
connection with any such transactions, agreement or arrangements and no
adjustment has been made by the Company or made or proposed by any Tax
authority for Tax purposes to the terms on which any such transactions,
agreements and arrangements are treated as taking place.


 


59





















 


13.           Group relief, etc


 


(a)           The Disclosure
Letter contains full details of all surrenders, transfers, claims and
agreements for surrenders, transfers or claims for any amounts by way of Group
Relief or for the surrender or transfer to or by the Company of any Relief,
together with details of all payments for Group Relief, or for such surrender
or transfer, made or received, in respect of any accounting period ended within
six years prior to the date of signing this Agreement.


 


(b)           To the extent that
the provision for Tax, including deferred tax, in the Accounts assumes that the
Company will benefit from any such surrender, transfer or claim, it has the
legally enforceable right to the relevant benefit, without any obligation to
make any payment not provided for in the Accounts.  To the extent that the Accounts assume that
the Company will receive payment for any such surrender, transfer or claim, it
has the legally enforceable right to receive that payment, without any
obligation to make any surrender, transfer or claim, the effect of which is not
reflected in the Accounts.


 


14.           Consequences of leaving a group


 


No charge to Tax under section 179 of
the TCGA or otherwise, and no contingent liability pursuant to section 179(6) of
the TCGA, will arise in the Company as a result of entering into this
Agreement, Completion, or any transfers of assets (within the meaning of the
TCGA) to or from the Company within six years prior to the date of signing of
this Agreement.  No elections under section 179A
of the TCGA have been made by the Company within six years prior to the date of
signing of this Agreement to reallocate any charge to Tax under section 179
of the TCGA.


 


15.           Tax clearances


 


(a)           The Disclosure
Letter contains details of all transactions, schemes or arrangements in respect
of which the Company has been a party or has otherwise been involved in respect
of which it has made or at Completion will be entitled to make a statutory
clearance application.


 


(b)           All clearances in
respect of transactions for which any clearance or consent was obtained from
any Tax Authority have been obtained on the basis of full and accurate
disclosure of all material facts and considerations relating thereto, and all
such transactions, schemes or arrangements have been implemented strictly in
accordance with the terms of such clearances.


 


16.           VAT


 


(a)           The Company is
separately registered for VAT purposes, and has never been treated as a member
of a group, under section 43 of the VATA.


 


(b)           The Company:


 


(i)            makes no supplies
other than taxable supplies for the purposes of VAT;


 


(ii)           obtains credit for
all input tax paid or suffered by it;


 


(iii)          is not the grantor
or grantee of any interest in land in respect of which an election has been
made to waive exemption from VAT;


 


(iv)          has no interest in
any capital items to which Regulation 113 of the Regulations applies or could
apply; and


 


60





















 


(v)           has not nor has it
agreed to become an agent, manager or factor of, or fiscal representative of or
for, any person not resident in its jurisdiction for the purpose of the
relevant VAT legislation.


 


17.           Stamp duty, etc


 


17.1         All documents,
which are necessary:


 


(a)           to establish the
title of the Company to any asset; or


 


(b)           to enforce any
rights and in respect of which any stamp duty or other similar tax is payable
(whether as a condition to the validity, registrability or otherwise)


 


have been duly stamped.


 


17.2         No document to
which the Company is a party or is interested which is outside the United
Kingdom would attract stamp duty if it were brought into the United Kingdom.


 


17.3         The Company has
duly paid all stamp duty reserve tax and stamp duty land tax for which it has
at any time been liable.


 


17.4         The Disclosure
Letter contains details of all land transactions, within the meaning of section 43
FA 2003, to which the Company has been a party in respect of which the Company
may have future compliance obligations.


 


17.5         No liability under
section 111 or section 113 FA 2002, or paragraph 3 or paragraph 9 of Schedule 7
FA 2003, will arise as a consequence of the execution or performance of this
Agreement.


 


18.           Miscellaneous


 


In respect of the Company:


 


(a)           there are no Tax
liens on any assets of the Company;


 


(b)           the Company has
not been at any time a member of any partnership or joint venture or the holder
of a beneficial interest in any trust for any period for which the statute of
limitations of any Tax has not expired;


 


(c)           no power of
attorney that is currently in force has been granted with respect to any matter
relating to Taxes that could affect the Company;


 


(d)           the Company has
not filed any elections with the US Internal Revenue Service nor filed any
other claims or elections for US tax purposes;


 


(e)           the Company has
not granted any option in respect of the share capital issued or to be issued
by the Company; and


 


(f)            no liability to
Tax will arise to the Company, directly or indirectly, by reference to or as a
result of the Restructuring Documents having been entered into.


 


61





















 


Schedule 5


 


The Properties


 


Freehold
Properties


 


None


 


Leasehold
Properties


 


	
  Address

  	
   

  	
  Title number

  and class of

  title

  	
   

  	
  Use

  	
   

  	
  Lease details

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Unit 2C, Phase II Albany Park Industrial Estate, Frimley Road,
  Camberley, Surrey

  	
   

  	
  SY520336

  	
   

  	
   

  	
   

  	
  Date: 22 February 1983

   

  Parties: Albany
  Commercial and Industrial Developments Limited (1) and Mobil Polymers
  International Limited (2)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Millfield House, Waterfront Business Park, Fleet Road, Fleet,
  Hampshire

  	
   

  	
   

  	
   

  	
  B1 Office

  	
   

  	
  Date: 23 August 2002

   

  Parties: Helical
  (Fleet) Limited (1) Concoat Limited (2)

  



 


Unit 2C, Phase II Albany Park Industrial Estate,
Frimley Road, Camberley, Surrey


 


1.             Lease dated 22 February 1983.


 


2.             Copy covering
letter and Service Charge Forecast, 1 April 2004 - 31 March 2005.


 


3.             Copy
correspondence relating to Rent Review between Land Securities and A W Naisbitt
dated April 2004 and Memorandum of Rent Review with effect from 25 December 2002.


 


4.             Copy covering
letter and Service Charge Forecast dated 1 April 2003 - 31 March 2004


 


5.             Copy letter from
Lloyds TSB Commercial to AW dated 21 August 2001 relating to charging
structure.


 


6.             Copy letter from
Vail Williams to AW dated 11 March 1999 relating to rent review.


 


7.             Copy letter from
Land Securities Limited to AW dated 8 March 1999 with Memorandum of Rent
Review with effect from 25 December 1997 and letter of receipt from AW.


 


8.             Copy
correspondence between AW and R Lionel and Partners relating to Rent Review, 29
February 1988.


 


9.             Two copy letters
from Herbert Smith to AW relating to Rent Review dated 22 January and 29 February 1988.


 


10.           Copy receipted
Notice of Transfer dated 7 July 1987.


 


62





















 


11.           Copy rent Review
Memorandum with effect from 25th February 1987.


 


12.           Licence to Assign
and Deed of Variation.


 


13.           Copy letter
attaching Completion statement and plan of Albany Park dated 21 May 1987.


 


14.           Copy receipted
Rent Application dated 25 December 1986.


 


15.           Copy Fire Policy
Documents.


 


16.           Copy Services
Expenditure 14 February 1983 - March 1985.


 


17.           Copy letter from
local authority in relation to compliance with planning conditions dated 24 January 1983.


 


18.           Copy letter
relating to landscaping scheme dated 11 October 1982.


 


19.           Copy planning
permission, No. SU/81/126 dated 16 March 1981.


 


20.           Copy planning permission
No. SU/80/665 RD.103 dated 10 December 1980.


 


21.           Copy
correspondence relating to dilapidations


 


22.           Copy Asbestos
report dated 15 November 2004.


 


Millfield House, Waterfront Business Park, Fleet Road,
Fleet, Hampshire


 


1.             Lease dated 23 August 2002.


 


2.             Consent Order
relating to Landlord and Tenant Act 1954.


 


3.             Copy Commercial
Drainage and Water Search result.


 


4.             Copy local land
charges search result.


 


5.             Copy Notice of
Termination dated 23 August 2002 and Landlord’s acknowledgement of
termination.


 


63





















 


Schedule 6


 


The Balance Sheets


 


Part 1


 


1.             The Sellers shall
use their reasonable endeavours to procure that a draft Group balance sheet as
of the Completion Date (the “Draft Balance
Sheet”) is drawn up and provided to the Purchaser as soon as
practicable and in any event by no later than the Completion Date.  The Draft Balance Sheet shall indicate the
amount of working capital in the Group as of the Completion Date (the “Draft Working Capital Amount”) calculated
in accordance with paragraph 6 below.


 


2.             The Sellers shall
use their reasonable endeavours to procure that a final, formally closed, Group
balance sheet as of the Completion Date (the “Final
Balance Sheet”) is drawn up and provided to the Purchaser as soon as
practicable after Completion and in any event by not later than 30 calendar
days after the Completion Date.


 


3.             After receipt of
the Final Balance Sheet from the Sellers, the Purchaser shall complete a final
review of the completeness and accuracy of the Final Balance Sheet. The parties
shall confer on the results of the review and will establish a further Group
balance sheet approved by both parties (the “Approved
Final Balance Sheet”) as soon as practicable after the Completion
Date and in any event by not later than 30 calendar days after receipt of the
Final Balance Sheet from the Sellers.


 


4.             The Purchaser may,
at the Purchaser’s option, require the Sellers to have the Final Balance Sheet
audited by Pridie Brewster before agreeing on the Approved Final Balance Sheet.
The costs of the audit shall be fifty per cent. (50%) for the Sellers’ account
and fifty per cent. (50%) for the Purchaser’s account.


 


5.             The Draft Balance
Sheet, the Final Balance Sheet and the Approved Balance Sheet (together the “Balance Sheets”) shall be prepared by the
parties:


 


(a)           in accordance with
principles, policies and procedures of accounting applied on a basis consistent
with the Accounts; and


 


(b)           subject to
paragraph (a) above, in accordance with UK GAAP.


 


6.             Each of the
Balance Sheets shall include an amount for working capital.  Working Capital (“Working Capital”) shall:


 


(a)           comprise of cash,
stock/inventory trade creditors and debtors, intra-group debt, materials,
pre-payments, hire purchase obligations, Tax (including deferred tax and income
taxes payable), accrued licence fees (including amounts owed to the Purchaser),
accrued employee payroll, pension and vacation entitlements (whether owed to or
by the Group member as the case may be) any expenses of whatever nature arising
out of the Group Restructuring, rent and other outgoings in relation to the
Hampshire Property up to and including 25 December 2005, rent,
service charges and other outgoings in relation to the Surrey Property up to
and including the date of Completion; and


 


(b)           exclude:


 


(i)            the repayment of
the Restructuring Loan; and


 


(ii)           any amounts
attributable to the creation and implementation of the Group Restructuring.


 


64





















 


7.             If the parties
cannot agree the Approved Final Balance Sheet within the time frame set out in
paragraph 3 to this schedule 6, the matter shall promptly be referred to a
firm of independent chartered accountants jointly agreed upon between the
parties at any time or, failing which and on application of any of the Sellers
or the Purchaser at any time, by the President, from time to time, of the
Institute of Chartered Accountants in England and Wales, which firm (the “Independent Accountants”) shall then
determine the value or amount of the matter or matters in dispute and allocate
the cost of such determination amongst the parties.  The Independent Accountants shall act as
experts and not as arbitrators.  Their
decision shall be communicated in writing to the parties within 30 calendar
days of their appointment and shall be (in the absence of manifest error) final
and binding upon the parties.


 


8.             The parties shall
procure that all records, working papers and other information as may be
reasonably required by the other (or by the Independent Accountants, the
Sellers’ Auditors or the Purchaser’s Auditors) for the purposes of this schedule 6
shall be made available upon request for them and each of the Purchaser and
each Seller shall generally render all reasonable assistance, including the
production and supply of photocopies of relevant documents to the Independent
Accountants, and access reasonably necessary for the preparation of the Balance
Sheets.


 


65





















 


Schedule 7


 


Intellectual Property


 


1.             All Preblend and
GEL versions of any of the following:


 


2.             1B12


 


3.             1B18 (Acrylic)


 


4.             1B18EPA (Acrylic)


 


5.             1B18LOC (Acrylic)


 


6.             1B18 Aerosol


 


7.             1B31


 


8.             1B31 EPA


 


9.             1B31 LOC


 


10.           1B31 HS


 


11.           1B31-245


 


12.           1B73HV


 


13.           1B73EPA


 


14.           1B73EPA Aerosol


 


15.           1A33


 


16.           1R32 (Acrylic)


 


17.           1R32A (Acrylic)


 


18.           1R32EPA (Acrylic)


 


19.           1R32 Purge Solvent


 


20.           1R32LOC(Acrylic)


 


21.           1R32LSE (Acrylic)


 


22.           1R32A-2 (Acrylic)


 


23.           1B51


 


24.           Thinner 32A


 


25.           Stripper 1050N


 


26.           Stripper 1080A


 


27.           Stripper 1095


 


28.           Rinse Agent 1095


 


29.           Rinse Agent 1050R


 


66





















 


30.           Stripper 1063


 


31.           Stripper 1020


 


32.           Repair Kits


 


33.           Thinner 503


 


34.           Thinner 521


 


35.           Thinner 535


 


36.           Thinner 600


 


37.           Thinner 701


 


38.           Thinner 604


 


39.           Thinner 54


 


40.           Thinner 32


 


41.           Thinner 32 EPA


 


42.           Thinner 64


 


43.           Thinner 38


 


44.           Thinner 73


 


45.           Thinner 505


 


46.           Thinner 900


 


47.           1R81 (Acrylic)


 


48.           1R1EPA (Acrylic)


 


49.           1R1LSE (Acrylic)


 


50.           1R91 (UR)


 


51.           X-1136 (Acrylic)


 


52.           1A68 (UR)


 


53.           1R92 (UR)


 


54.           1H20 AR1


 


55.           1H20 AR2


 


56.           1H2O AR1 BOV
aerosol


 


57.           1H20 UR3


 


58.           1H20 UR4


 


59.           1H20 UR3 BOV
Aerosol


 


60.           CKB 301 PCB
Cleaning material


 


61.           CKS 301 PCB
Cleaning material


 


67





















 


62.           CKB302 PCB Cleaning
material


 


63.           CKI 301 PCB
Cleaning material


 


64.           CKI 302 PCB
Cleaning material


 


65.           CKI 303 PCB
Cleaning material


 


66.           CKB401 PCB
Cleaning material


 


67.           Synergie PSR 100 LPI Solder Resist


 


68.           Synergie PSR 200
Solder Resist


 


69.           Synergie Solder
Pastes - Repack from another manufacturer


 


70.           Synergie Solder
Fluxes - Repack from another manufacturer


 


(a)           SFF 400


 


(b)           SFS 400


 


(c)           SFR 400


 


(d)           SFF 600


 


(e)           SFS 600


 


(f)            SFR 600


 


(g)           SFF 800


 


(h)           SFS 800


 


(i)            SFR 800


 


71.           Synergie Solder
Wire- Repack from another manufacturer


 


72.           Concoat Temporary
Masks - Repack from another manufacturer


 


73.           Concoat Masking
tape - Repack from another manufacturer


 


74.           Concoat Brushes -
Repack from another manufacturer


 


75.           “Synergie” trade
name


 


76.           R&D
information on all past and present materials development work including:


 


(a)           Laboratory
notebooks


 


(b)           Formulation
records


 


(c)           Manufacturing
instructions


 


(d)           Product
application instructions


 


(e)           All test data on
above materials


 


77.           Community trade
mark number E 341271 (CONCOAT)


 


78.           United Kingdom
trade mark number 2166724 (SYNERGIE)


 


79.           Domain names:
concoat.co.uk, conformalcoating.com, 1H20.com and 1H20.info


 


80.           Solder Wick


 


68





















 


Schedule 8


 


Environmental Indemnity


 


(clause 10.2)


 


1.             In this schedule:


 


“Environmental Agreement” means
an agreement, covenant, guarantee or indemnity entered into or agreed before
Completion under which a Group member has a duty, obligation or liability
(actual, contingent or otherwise) to remediate pollution or contamination of
the Environment or otherwise to restore, pay, compensate or reimburse in
respect of remediation or harm caused by pollution or contamination of the
Environment;


 


“Environmental Condition” means:


 


(a)           the presence of a
Hazardous Substance at, in, on, under or about a Property on or before
Completion including migration or release (whether occurring, in either case,
before or after Completion) from a Property; or


 


(b)           noise, vibration,
radiation, dust, odour or nuisance present at or arising from a Property on or
before Completion; or


 


(c)           a breach of
Environmental Laws by any Group member before Completion requiring corrective
action;


 


“Environmental Matter” means
one or more of the following:


 


(a)           an Environmental
Condition in relation to which, if the relevant regulatory authority was aware
of its existence, the regulatory authority would require Works to be carried
out;


 


(b)           Environmental
Proceedings in relation to:


 


(i)            a breach of
Environmental Laws before Completion by a Group member;


 


(ii)           a Hazardous
Substance present in, on or under a Property or a Former Property on or before
Completion or which has migrated (whether before or after Completion) from it;


 


(iii)          a Hazardous
Substance which has been generated, emitted, released or discharged before
Completion as a result of the activities of a Group member;


 


(iv)          exposure of any
person to a Hazardous Substance before Completion in respect of which a Group
member is responsible or liable; or


 


(c)           a breach of, or
liability under, an Environmental Agreement;


 


“Environmental Proceedings” means
a criminal, civil, judicial, regulatory or administrative proceeding, suit or
action brought, taken or threatened by a relevant authority or any other
person;


 


“Former Property” means
a property owned, occupied or used by a Group member before Completion other
than a Property;


 


69





















 


“Hazardous Substance” means
any waste, pollutant, contaminant or other toxic, radioactive, noxious, flammable,
corrosive or caustic matter (whether, in each case, in solid, liquid or gaseous
form) which is (alone or in combination) capable of causing significant harm to
the Environment or harm to human health;


 


“Indemnified Person” means
an entity which is, or a person who is (or was), on or at any time after
Completion:


 


(a)           a Purchaser’s
Group Company; or


 


(b)           a director,
employee of agent of a Purchaser’s Group Company;


 


“Works” means
one or more of the following:


 


(a)           inspecting,
investigating, assessing, sampling or monitoring works in relation to a
Hazardous Substance;


 


(b)           carrying out of
works to treat, abate, remove, remediate, control or contain the presence,
effect or potential effect of a Hazardous Substance; or


 


(c)           restoring of the
Environment affected by any Hazardous Substance.


 


2.             Indemnity


 


The Sellers must indemnify each Indemnified
Person against:


 


(a)           each loss,
liability and cost suffered or incurred by the Indemnified Person as a result
of an Environmental Matter;


 


(b)           each loss,
liability and cost suffered or incurred by the Indemnified Person as a result
of investigating, disputing or settling a claim (whether actual or potential)
alleging a loss, liability or cost of the type referred in paragraph 2(a); and


 


(c)           each cost suffered
or incurred by the Indemnified Person in enforcing its rights under paragraph
2.


 


3.             Limitations and exclusions


 


3.1           An Indemnified
Person is not entitled to be indemnified under paragraph 2 if the loss, cost or
liability is increased by an act or omission by the Purchaser’s Group Company
after Completion which is outside the ordinary course of its business.


 


3.2           An Indemnified
Person is not entitled to be indemnified under paragraph 2 unless the Purchaser
has notified the Sellers in accordance with paragraph 4 on or before:


 


(a)           the thirtieth
anniversary of the Completion Date in respect of a loss, liability or cost
resulting from Environmental Matter (b)(iv);


 


(b)           six months after
the expiry of claim notification under the relevant Environmental Agreement in
respect of a loss, liability or cost resulting from Environmental Matter (c);
and


 


(c)           the sixth
anniversary of the Completion Date in respect of a loss, liability or cost
resulting from all other Environmental Matters.


 


3.3           An Indemnified
Person is not entitled to be indemnified under paragraph 2 to the extent that
the loss is recovered through insurance.


 


70





















 


4.             Claims procedure


 


4.1           The Purchaser must
give to the Sellers notice as soon as is reasonably practicable of any matter
of which the Purchaser or the Purchaser’s Group Company becomes aware which
gives rise to a claim under paragraph 2.


 


4.2           If Environmental
Proceedings or Works result from a matter to which this schedule applies,
the Purchaser (or such other person as the Purchaser decides) has, in
consultation with the Sellers, conduct of the Environmental Proceedings or
Works.


 


4.3           The Purchaser must
take reasonable measures to make sure that in relation to the Environmental
Proceedings or Works (subject to appropriate arrangements being possible to
maintain commercial confidentiality and privilege):


 


(a)           reasonably
frequent reports are given to the Sellers regarding the progress of the
Environmental Proceedings or Works;


 


(b)           there is
reasonable advance consultation with the Sellers in relation to the
Environmental Proceedings or Works;


 


(c)           the Sellers are
allowed to attend any relevant hearing, site visit or meeting in relation to
the Environmental Proceedings or Works; and


 


(d)           the Sellers are
allowed to be involved in discussions with relevant consultants or contractors
concerning the scope, nature and extent of any Works to be carried out and to
attend any meetings with those consultants or contractors.


 


4.4           The Sellers must
provide the Purchaser or make sure the Purchaser is provided with all
information, assistance, access and facilities, including the availability of
personnel, in relation to the Environmental Proceedings or Works as the
Purchaser may reasonably request.


 


4.5           If the Sellers
have accepted liability the Purchaser must make sure in relation to any
Environmental Proceedings that no settlement or admission of liability is
agreed or made without the Sellers’ prior written consent (not to be
unreasonably withheld or delayed).


 


71





















 


Schedule 9


 


Restructuring Documents


 


1.             Concoat Systems Limited Share Disposal


 


1.1           Concoat Systems
Limited Board Minutes


 


1.2           The Company Board
Minutes


 


1.3           Stamped original
stock transfer form


 


2.             Share-for-Share Exchange


 


2.1           Sale and Purchase
Agreement


 


2.2           Concoat Limited
Board Minutes


 


2.3           The Company Board
Minutes


 


2.4           The Company
Shareholder Resolutions


 


2.5           Stock Transfer
Forms:


 


(a)           Mr D. Greenman’s
160 Concoat Limited shares to be transferred to the Company for 55 the Company
shares


 


(b)           Mr A.W. Naisbitt’s
380 Concoat Limited shares to be transferred to the Company for 130 the Company
shares


 


(c)           Mr D. Naisbitt’s
140 Concoat Limited shares to be transferred to the Company for 50 the Company
shares


 


(d)           Mr G.K. Naisbitt’s
320 Concoat Limited shares to be transferred to the Company for 110 the Company
shares


 


2.6           Form 88(2) Return
of Allotment of Shares


 


2.7           Form 123 -
Notice of Increase in Nominal Capital


 


3.             Appointment of Auditors to the Company and Concoat
Limited


 


3.1           Concoat Limited
Board Minutes


 


3.2           The Company
Shareholder Resolution


 


3.3           The Company Board
Minutes


 


3.4           The Company
Shareholder Resolution


 


4.             Asset Disposal


 


4.1           Concoat Limited
Board Minutes


 


4.2           Concoat Limited
Shareholder Resolutions


 


4.3           Concoat Limited
Statutory Declaration


 


4.4           Concoat Limited
Auditors’ Report


 


4.5           Asset Purchase
Agreement


 


72





















 


4.6           Licence Agreement


 


4.7           IP Assignment


 


4.8           The Company Board
Minutes


 


4.9           The Company Shareholder
Resolutions


 


4.10         The Company
Statutory Declaration


 


4.11         The Company
Auditors’ Report


 


5.             Deeds of novation


 


5.1           Relating to the
Asset Purchase Agreement dated 3 April 2002 between Multicore Solders
Ltd., Multicore Solders (S) PTE Ltd. (as sellers), Henkel KGaA (as the
guarantor) and Concoat Limited (as the purchaser); and


 


5.2           Relating to the
Consignment Stock and Sales Agreement dated 3 April 2002 between Multicore
Solders Ltd., Multicore Solders (S) PTE Ltd. and Concoat Limited.


 


73





















 


Executed by the parties as
a deed:


 


	
  Executed as a deed by the trustees of the A.W. Naisbitt Discretionary

  	
  )

  
	
  Settlement Trust

  	
  ) 

  	
  /s/ A.W. Naisbitt

  	
   

  
	
  in the presence of:

  	
  ) 

  	
  /s/ D. Naisbitt

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Executed as a deed by the trustees of the D. Naisbitt Discretionary

  	
  )

  
	
  Settlement Trust

  	
  ) 

  	
  /s/ A.W. Naisbitt

  	
   

  
	
  in the presence of:

  	
  ) 

  	
  /s/ D. Naisbitt

  	
   

  
							



 


	
  Executed as a deed by Mr D.
  Greenman

  	
  )

  
	
  in the presence of:

  	
  )

  	
  /s/ D. Greenman

  	
   

  



 


	
  /s/ Jacky Scanlan-Dyas

  	
   

  	
   

  
	
  Witness name

  	
   

  
	
   

  	
   

  
	
     Jacky Scanlan-Dyas

  	
   

  	
   

  
	
  Witness address

  	
   

  
	
   

  	
   

  
	
     900 Third Avenue

  	
   

  	
   

  
	
     New York, NY 10012

  	
   

  	
   

  
	
     USA

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness occupation

  	
   

  
	
   

  	
   

  
	
     Solicitor

  	
   

  	
   

  
						



 


74





















 


	
  Executed as a deed by Mrs S.K.
  Greenman

  	
  )

  
	
  in the presence of:

  	
  ) 

  	
  /s/ S. K. Greenman

  	
   

  
	
   

  	
   

  
	
    /s/ Jacky Scanlan-Dyas

  	
   

  	
   

  
	
  Witness name

  	
   

  
	
   

  	
   

  
	
    Jacky Scanlan-Dyas

  	
   

  	
   

  
	
  Witness address

  	
   

  
	
  900 Third Avenue

  	
   

  	
   

  
	
  New York, NY 10012

  	
   

  	
   

  
	
  USA

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness occupation

  	
   

  
	
   

  	
   

  
	
  Solicitor

  	
   

  	
   

  
	
   

  	
   

  
	
  Executed as a deed by Mr A.W.
  Naisbitt

  	
  )

  
	
  in the presence of:

  	
  )

  	
  /s/ A. W. Naisbitt

  	
   

  
	
   

  	
   

  
	
    /s/ Jacky Scanlan-Dyas

  	
   

  	
   

  
	
  Witness name

  	
   

  
	
   

  	
   

  
	
    Jacky Scanlan-Dyas

  	
   

  	
   

  
	
  Witness address

  	
   

  
	
    900 Third Avenue

  	
   

  	
   

  
	
    New York, NY 10012

  	
   

  	
   

  
	
    USA

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness occupation

  	
   

  
	
   

  	
   

  
	
  Solicitor

  	
   

  	
   

  
							



 


75





















 


	
  Executed as a deed by Mrs D.
  Naisbitt

  	
  )

  	
  /s/ D. Naisbitt

  	
   

  
	
  in the presence of:

  	
  )

  
	
   

  	
   

  
	
    /s/ Jacky
  Scanlan-Dyas

  	
   

  	
   

  
	
  Witness name

  	
   

  
	
   

  	
   

  
	
    Jacky Scanlan-Dyas

  	
   

  	
   

  
	
  Witness address

  	
   

  
	
    900 Third Avenue

  	
   

  	
   

  
	
    New York, NY 10012

  	
   

  	
   

  
	
    USA

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness occupation

  	
   

  
	
   

  	
   

  
	
       Solicitor

  	
   

  	
   

  
	
   

  	
   

  
	
  Executed as a deed by Mr G.K.
  Naisbitt

  	
  )

  	
  /s/ G.K. Naisbitt

  	
   

  
	
  in the presence of:

  	
  )

  
	
   

  	
   

  
	
    /s/ Jacky Scanlan-Dyas

  	
   

  	
   

  
	
  Witness name

  	
   

  
	
   

  	
   

  
	
    Jacky Scanlan-Dyas

  	
   

  	
   

  
	
  Witness address

  	
   

  
	
    900 Third Avenue

  	
   

  	
   

  
	
    New York, NY 10012

  	
   

  	
   

  
	
    USA

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness occupation

  	
   

  
	
   

  	
   

  
	
      Solicitor

  	
   

  	
   

  
						



 


76





















 


	
  Executed as a deed by Chase &
  Sons Limited

  	
  )

  	
   

  
	
   

  	
   

  	
  )

  	
   

  
	
  acting by:

  	
  /s/ Peter R. Chase

  	
   

  	
  )

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Director

  	
  /s/ Kenneth L. Dumas

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Director/Secretary

  	
   

  
									



 


77