Exhibit 10.12
SHARE ACQUISITION AGREEMENT
Date: 5th September 1995
Parties:
1 `The Vendors': the persons whose names and addresses are set out in
column 1 of Schedule 1.
2 `The Purchaser': PGI Acquisition Company E (a Virginia Corporation)
whose principal place of business is at 0000 Xxxxxx Xxxxxxxxx, Xxxxx
000, Xxxxxxxxx, Xxxxxxxx 00000, XXX.
Recitals:
(A) This is an agreement providing for the sale and purchase of
the entire issued share capital of Spearhead Communications
Limited, a company incorporated in England and Wales and
registered under Company Xx. 0000000 ("xxx Xxxxxxx").
(X) Brief particulars of the Company are set out in Part I of
Schedule 2 and particulars of each of the subsidiaries of the
Company are set out in Part II of Schedule 2 ("the
Subsidiaries").
(C) The Company is the holding company for the Subsidiaries, which
carry on the business of, inter alia, arranging conferences
and exhibitions. The Subsidiaries are the only subsidiaries
and they are all wholly-owned, save for Aberdeen Exhibition
and Conference Centre Limited, in which the Company holds
28.8% in nominal value of the entire issued share capital of
that company.
(D) Prior to the Date hereof the Vendors undertook a
reorganization of the Group of Companies then including the
Subsidiaries, as part of which the Company received a
distribution on liquidation from Interprize Limited (formerly
known as Spearhead Communications Limited) ("SCL") of the
entire issued share capital of Spearhead Exhibitions Limited
following the liquidation of SCL (pursuant to Section 110 of
the Insolvency Act 1986).
(E) Following the reorganization the Vendors have retained an
interest through Stowemar Investments Limited (formerly known
as Stowemar Publications Limited and as Gladecharm Limited) in
the former subsidiaries of SCL, Spearhead Publications Inc.
and its subsidiary International Exhibitions Incorporated,
which carry on the business of publishers and exhibition
organizers and which do not form part of the sale and purchase
pursuant to this Agreement.
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(F) The parties are and, throughout the negotiations leading to
this Agreement, have been aware that in determining to proceed
with the purchase of the Shares for the consideration and upon
the payment/settlement terms provided herein, the Purchaser
will have regard to a number of factors, but in particular
would rely on, inter alia, the Warranties (as qualified by the
Disclosure Letter); the indemnities in the Deed of Indemnity,
the covenants in Clause 7 and, inter alia, Xxxxx Xxxxx and
Xxxxxxxxxxx Xxxxx continuing to manage the business of the
Group on a full-time basis and Xxxxx Weavers continuing to
provide consultancy services to the Group after completion,
each in accordance with the terms of their respective service
or consultancy agreements.
Operative provisions:
1. Interpretation
1.1 In this agreement, including the Recitals and Schedules (which form
part of this agreement ("this Agreement"):
1.1.1 the following words and expressions have the following
meanings, unless they are inconsistent with the context:
`AGREED FORM' the form agreed between the parties on or prior
to the date of this agreement and initialled for the purposes
of identification by their respective solicitors;
`CA' Companies Xxx 0000;
`COMPANIES ACTS' CA, the former Companies Acts (within the
meaning of CA s 735(1)) and the Companies Xxx 0000;
`COMPANY' Spearhead Communications Limited;
`COMPANY'S AUDITORS' Kingston Xxxxx, 146 Xxxxxxxxxxx, Xxxxxx,
XX0X 0XX;
`COMPLETION' completion of the purchase of the Shares in
accordance with clause 4;
`COMPLETION DATE' the date of Completion;
`COMPUTER KNOW-HOW' all computer software
and all information not at present in the public domain
(including, without limitation, that comprised in or derived
from data, disks, tapes, manuals, source codes, flow-charts
and specifications) relating to the use, manufacture,
maintenance or programming of any computer in whatever form
held;
`DEED OF INDEMNITY' a deed in the form set out in Schedule 4;
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`DISCLOSURE LETTER' the disclosure letter of the same date as
this agreement from the Vendors' Solicitors to the Purchaser's
Solicitors;
`GUARANTEE and MORTGAGE OF SHARES' the guarantee and mortgage
over shares in the agreed form to be granted by the Company in
favour of the Vendors on Completion.
`GROUP'/`GROUP COMPANIES' the Company and the Subsidiaries;
`FRS' a financial reporting standard issued by The Accounting
Standards Board Limited or an SSAP;
`INDUSTRIAL PROPERTY RIGHTS' all patents, trade marks and
service marks, rights in designs, trade names, copyrights and
topography rights (whether or not any of them is registered
and including applications for registration of any of them)
and rights under licenses and consents in relation to any such
thing and all rights or forms of protection of a similar
nature or having equivalent or similar effect to any of them
which may subsist in any part of the world;
`KNOW HOW' all information not at present in the public domain
(including, without limitation, that comprised in or derived
from formulae, designs, specifications, drawings, component
lists, manuals, instructions and catalogues) in whatever form
held relating to the business or affairs of any member of the
Group including, without limitation, the production of goods
or the provision of services;
`LAST ACCOUNTS DATE' 31 March, 1994 (being the date to which
the Principal Accounts have been prepared);
`LOAN NOTES' the (pound)1,360,018.47, 1st April 1997 PGI
Acquisition Company E Guaranteed Loan Notes in the agreed
form, to be issued to each of the Vendors, other than X X
Xxxxxxxx, X X Xxxxxxxx, the Espagnol Trust and the Espagna
Trust;
`MARKETING INFORMATION' all information not at present in the
public domain relating to the marketing of any products or
services (including customer names and lists, sales targets,
sales statistics, market share statistics, market surveys and
reports, market research and any advertising or other
promotional material);
`MANAGEMENT ACCOUNTS' the draft audited Group Financial
Statements of Spearhead Exhibitions Limited for the year ended
31st March 1995, of Spearhead Exhibitions Limited in the form
of the copy annexed to the Disclosure Letter;
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`PGI, Inc. GUARANTEE' the guarantee in the agreed form to be
granted by Production Group International, Inc. (the
Purchaser's parent company) in favour of the Vendors on
Completion;
`PLANNING ACTS' as defined in the Town and Country Planning
Xxx 0000, s 336;
`PRINCIPAL ACCOUNTS' the audited balance sheet as at the Last
Accounts Date and audited profit and loss account for the year
ended on the Last Accounts Date of each Subsidiary and the
directors' report and notes thereon;
`PROPERTIES' the property of the Group Companies shortly
described in Schedule 5;
`PURCHASER'S SOLICITORS' Xxxxxx, Xxxxx & Bockius, of 0,
Xxxxxxx Xxxxxxx, Xxxx Xxxx, Xxxxxx, XX0X 0XX;
`RETAINED SUM' the sum of (pound)1,139,981.52 to be retained
from the consideration payable for the Shares to certain of
the Vendors in accordance with clause 3;
`SHARES' the 19,474 Ordinary shares of (pound)1 each in the
capital of the Company comprising the whole of its issued and
allotted share capital;
`STOCK EXCHANGE' The International Stock Exchange of the
United Kingdom and the Republic of Ireland Limited;
`SUBSIDIARY' a subsidiary as defined in CA, s 736;
`SUBSIDIARIES' the companies named in Part 2 of Schedule 2 and
any other Subsidiary of the Company from time to time;
`TAXATION' all forms of taxation including:
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(a) any charge, tax, duty or levy upon income, profits,
chargeable gains or development value, land, any
interest in land or in any other property, or
documents or supplies or other transactions;
(b) income tax, corporation tax, advance corporation tax,
capital gains tax, inheritance tax, value added tax,
stamp duty, stamp duty reserve tax, capital duty,
customs and other import duties, national insurance
contributions, local authority rates and charges or
water rates;
(c) any liability for sums equivalent to any such charge,
tax, duty, levy or rates or for any related penalty,
charge or interest;
`TAXES ACT' Income & Corporation Taxes Xxx 0000;
`TCGA' Taxation of Chargeable Gains Xxx 0000;
`TMA' Taxes Management Xxx 0000;
`TRUSTEE VENDORS' Jorvik Limited and X Xxxxxxxxx, for and on
behalf of each of the Espagnol Trust and the Espagna Trust;
`VENDORS' SOLICITORS' Xxxxxxx, Xxxxxxxxx & Milners, of 0
Xxxxxxx Xxx, Xxxxxx, XX0X 0XX;
`WARRANTIES' the warranties and undertakings of the Vendors
contained in clause 5 and Schedule 3;
`WARRANTORS/COVENANTORS' each of Mr Xxxxx Xxxxx, Xx Xxxxx
Weavers, Xx Xxxxxxxxxxx Xxxxx, Xx Xxxxxx Xxxxxx and Xxx Xxxxx
Xxxxxx;
`WARRANTY CLAIM' any claim made by the Purchaser for breach of
any of the Warranties or any claim made by the Purchaser under
the Deed of Indemnity.
1.2 General Construction
1.2.1 All references to a statutory provision shall be
construed as including references to:
(a) any statutory modification, consolidation or re-enactment
(whether before or after the date of this agreement) for
the time being in force;
(b) all statutory instruments or orders made pursuant to a
statutory provision;
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(c) any statutory provisions of which a statutory provision
is a consolidation, re-enactment or modification;
1.2.2 Any reference to the Vendors includes, where
appropriate, their personal representatives;
1.2.3 A reference to an SSAP is a reference to a statement of
standard accounting practice adopted by The Accounting
Standards Board Limited;
1.2.4 Except where the context otherwise requires words
denoting the singular include the plural and vice versa;
words denoting any one gender include all genders; words
denoting persons include firms and corporations and vice
versa;
1.2.5 Unless otherwise stated, a reference to a clause or sub-
clause or a Schedule is a reference to a clause or a
sub-clause of or a Schedule to this agreement;
1.2.6 Clause headings in this agreement and in the Schedules
are for ease of reference only and do not affect the
construction of any provision;
1.2.7 A document referred to as being in "the agreed terms"
will be in the form of the draft thereof for
identification initialled by the Vendors' Solicitors and
the Purchaser's Solicitors;
1.2.8 Each of the Warranties and each of the guarantees,
indemnities and obligations which is expressed to be an
obligation of the Vendors or the Warrantors or the
Covenantors or of more than one of the Vendors or the
Warrantors or the Covenantors (as the case may be) shall
be a joint and several obligation unless it is expressed
to be an obligation of each of the Vendors or the
Warrantors or the Covenantors (as the case may be) or of
each of one or more of the Vendors or the Warrantors or
the Covenantors (as the case may be), in which case it
shall be a several obligation;
1.2.9 Any of the Warranties which is qualified by the
expression "to the best of the Warrantors' knowledge and
belief" or "so far as the Warrantors' are aware" or any
similar expression shall be deemed to include an
additional statement that the Warrantors have first made
due and careful enquiry;
1.2.10 A person shall be deemed to be connected with another if
that person is connected with another within the meaning
of section 839 of the Taxes Act.
2. Agreement for sale
2.1 Subject to the terms and conditions of this Agreement, the Vendors
(other than the Trustee Vendors) shall sell as beneficial owners and
the Trustee Vendors shall sell as legal owners and registered holders
and the Purchaser shall purchase the Shares free from all liens,
charges and encumbrances and with all rights now or hereafter attaching
accrued or accruing thereto or arising therefrom, with effect from the
date of this Agreement.
2.2 The Purchaser shall be entitled to all dividends and distributions
declared, paid or made by the Company on or after the date hereof.
2.3 Each of the Vendors hereby waives any pre-emption rights he or she may
have in relation to any of the Shares under the articles of association
of the Company or otherwise.
2.4 The Purchaser need not complete the purchase of any of the Shares
unless the purchase of all the Shares is completed simultaneously.
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3. The Consideration and Set-Off
3.1 Subject to adjustment pursuant to this clause 3, the consideration for
the Shares will be the sum of (pound)5,400,000, which will be
apportioned between the Vendors in the manner set out in columns 2, 3
and 4 of Schedule 1 and payable to them as follows:-
3.1.1 (pound)2,900,000 will be paid in cash on the Completion Date
by telegraphic transfer to Vendors' Solicitor's Client
Account.
3.1.2 the Retained Sum will be paid in cash on 1st April 1997 (or on
such later date as may be specified by the Vendors (other than
the Warrantors) giving not less than 14 days prior notice in
writing) by telegraphic transfer to the Vendors (other than
the Warrantors) (in the amounts indicated against each such
Vendor's name in column 3 of Schedule 1) by payment to the
Vendors' Solicitor's Client Account, or such other accounts of
the relevant Vendors as shall be notified to the Purchaser in
writing from time to time.
3.1.3 the Loan Notes will be issued to the Warrantors/Covenantors on
the Completion Date by the Purchaser (in the amounts indicated
against each such person's name in column 4 of Schedule l).
3.3 Without prejudice to any other remedy available to the Purchaser, the
Purchaser shall be entitled to a right of set-off in accordance with
this Clause 3 against any amount payable to the Warrantors pursuant to
the Loan Notes in respect of any Warranty Claims arising on or before
the date for payment under the Loan Notes. The Loan Notes shall include
a right of set-off by the Purchaser in respect of any such Warranty
Claims. Any amount set-off against any payments under the Loan Notes
shall be made pro rata against the amount of the Loan Notes then
outstanding.
3.4 If any claim arises or circumstances come to the notice of the
Purchaser which could give rise to a Warranty Claim, the Purchaser
shall forthwith give notice thereof to the Warrantors or Covenantors
(as the case may be) (specifying in reasonable detail the basis of the
claim and the amount claimed) ("a Loss Notice"). Without prejudice to
the Purchaser's right to issue proceedings or seek injunctive relief in
respect of any Warranty Claim, the Purchaser and the Warrantors shall
use their respective reasonable endeavors to reach an amicable
settlement of each such claim as soon as reasonably practicable
following the issue of any Loss Notice.
3.5 The Purchaser shall be entitled to deduct from any payment under the
Loan Notes an amount equal to the aggregate of:
3.5.1 the amount of any liability relating to any Warranty Claim in
respect of which quantum has been agreed between the parties
or determined in accordance
with clause 3.4 or judgment has been issued in any proceedings
instituted in respect of any Warranty Claim, but in either
case payment has not been made prior to the date scheduled for
payment under the Loan Notes ("an Agreed
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Loss"); and
3.5.2 an amount equal to the Purchaser's reasonable estimate of the
quantum of liability (including reasonable costs and expenses)
for any Warranty Claim in respect of which a Loss Notice has
been served on the Warrantors or Covenantors (as the case may
be) but liability and/or quantum has not been determined prior
to the date scheduled for payment under the Loan Notes ("a
Loss"). Subject always to clause 3.6, the Purchaser shall be
entitled to retain the aggregate amount of any Loss(es) and
shall not be required to make payment to the extent of the
same unless and until such Warranty Claim has been agreed or
determined by judicial process.
3.6 In the event that the Warrantors/Covenantors dispute any Warranty Claim
and/or Loss, subject to the Warrantors/Covenantors producing an opinion
of counsel of not less than five years call (with appropriate
experience in the subject matters of the claim) that the
Warrantors/Covenantors have a valid defence to such Warranty Claim(s)
and/or that the Loss(es) estimated by the Purchaser is/are in excess of
the amount which such counsel reasonably considers would be recoverable
by the Purchaser, the amount of Loss(es) shall be paid into an escrow
account to be held by the Purchaser's Solicitors pending agreement or
determination by judicial process of such Warranty Claim.
3.7 Upon a Warranty Claim being agreed or determined by judicial process
the purchase price for the Shares shall be deemed to have been reduced
by the amount thereof and whichever of the following adjustments as
shall be appropriate will be made:-
3.7.1 if on or after the date for payment under the Loan Notes it is
determined that the amount of a Loss exceeds the Agreed Loss
in respect thereof, the Purchaser will forthwith pay to the
Warrantors/Covenantors the amount of the excess together with
the interest thereon pursuant to clause 3.8, such interest to
be payable in respect of the period from the dated scheduled
for payment under the Loan Notes to the date of actual payment
and to be shared between the Warrantors/Covenantors in
proportion to their respective shares of such excess; or
3.7.2 if the amount of an Agreed Loss (when aggregated with other
Agreed Losses or otherwise) exceeds the amount payable under
the Loan Notes the Warrantors/Covenantors will immediately
repay to the Purchaser the amount of excess together with
interest thereon pursuant to clause 3.7, such interest to be
payable in respect of the period from the Completion Date to
and including the date of actual receipt of such payment
(including such interest) by the Purchaser.
3.8 Subject to clause 3.9, interest payable under clause 3.7 will be paid
by the Purchaser or the Warrantors/Covenantors, as the case may be, in
respect of the relevant period referred to in clause 3.7.1 or clause
3.7.2 at the rate of 1 percentum (1%) over the base rate of Midland
Bank Plc ruling from time to time, the certificate of a duly authorized
officer of such bank as to such base rate to be final and binding on
the parties.
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3.9 If any amount in respect of Loss(es) has been paid into an escrow
account in accordance with clause 3.6, the interest rates referred to
in clause 3.8 shall not apply to such sums. Interest accruing on any
amount held in such escrow account (if any) shall be at the rate
actually earned or such sums whilst in the escrow account will, subject
to deduction of any bank charges and interest follow the principal pro
rata.
4. Completion
4.1 Completion shall take place at the offices of the Purchaser's
Solicitors on the date hereof, as soon as practicable after executing
this Agreement when all the transactions mentioned in the following
sub-clauses shall take place.
4.2 The Vendors shall deliver to the Purchaser:
4.2.1 duly completed and signed stock transfer forms in
favour of the Purchaser or as it may direct in
respect of the Shares together with the relative
share certificates;
4.2.2 duly completed and signed stock transfer forms in
favour of the Purchaser, or as the Purchaser may
direct in respect of any nominee shareholdings in the
subsidiary together with the relative share
certificates;
4.2.3 the Deed of Indemnity duly executed by the
Covenantors;
4.2.4 the statutory books of each Group Company complete
and up-to-date and their certificates of
incorporation and confirmation of the location of the
common seals;
4.2.5 the title deeds relating to the Property;
4.2.6 the appropriate forms to amend the mandates given by
each Group Company to its bankers;
4.2.7 written confirmation from the Vendors (as evidenced
by their execution of this Agreement) that there are
no subsisting guarantees given by any Group Company
in their favour and that after compliance with clause
4.3 none of the Vendors will be indebted to any group
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Company or vice versa;
4.2.8 written confirmation from the Vendors (as evidenced
by their execution of this Agreement) and from
Spearhead Publications Inc, International Exhibitions
Incorporated and Aberdeen Exhibitions and Conference
Centre Limited that all inter-company loan accounts
have been settled and there are no amounts
outstanding due by the Company or any of the
Subsidiaries to such companies; and
4.2.9 written confirmation from Midland Bank Plc of the
balances on each of the Company's and the
Subsidiaries bank accounts made up to a date not more
than seven days prior to Completion together with
reconciliation statements in respect of the same from
the date of such bank statements to the close of
business on the last business day prior to the
Completion Date.
4.3 The Vendors shall repay all monies then owing by them to any Group
Company whether due for payment or not.
4.4 A Board Meeting and Extraordinary General Meeting of the Company shall
be held approving the Company entering into the Guarantee and Mortgage
of Shares and authorizing the giving of financial assistance by the
Company by reason of granting the Company such Guarantee and Mortgage
of Shares in accordance with Sections 151-155CA.
4.5 Board meetings of each Group Company shall be held at which:
4.5.1 such persons as the Purchaser may nominate shall be
appointed additional directors; and
4.5.2 the transfers referred to in clauses 4.2.1 or 4.2.2 (as
the case may be) shall be approved (subject to stamping).
4.6 Upon completion of the matters referred to in clauses 4.2 to 4.4 the
Purchaser will:
4.6.1 transmit the sum of (pound)2,900,000 by telegraphic transfer
to the Vendors' Solicitors client account in satisfaction of
the initial purchase consideration for the Shares, whose
receipt shall constitute valid receipt by each of the Vendors;
4.6.2 issue the Loan Notes to the Warrantors/Covenantors (in the
amounts indicated against each such person's name in column 4
of Schedule 1);
4.6.3 procure that the Company delivers the Guarantee and Mortgage
of Shares to the Vendors, duly executed; and
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4.6.4 procure that Production Group International, Inc. delivers the
PGI, Inc. Guarantee to the Vendors, duly executed.
4.7 The Purchaser may in its absolute discretion waive any requirement
contained in clauses 4.2 to 4.4, and shall not be obliged to complete
the purchase of any of the Shares unless the purchase of all the Shares
is completed in accordance with this Agreement, but may instead rescind
this Agreement without prejudice to any other remedy it may have.
4.8 Following Completion, the Purchaser shall use its reasonable endeavors
to procure the release of the Vendors from all liability arising after
Completion under the guarantees given by them on behalf of the Group
Companies and listed in the Disclosure Letter.
4.9 The Vendors hereby undertake to procure that, within 30 days of the
Completion Date, Spearhead Publications, Inc. effects a change of name
to a name not including the word "Spearhead" or any colorable
alternative and to provide the Purchaser with a copy of the resolution
effecting such change of name together with the Company's restated
Certificate of Incorporation and By-Laws evidencing such change of name
within such 30 day period.
5. Warranties and undertakings by the Vendors/Warrantors
5.1 The Vendors jointly and severally warrant to the Purchaser that:
5.1.1 each of the Vendors have full power and authority to enter
into and perform this Agreement, which will constitute or when
executed will constitute binding obligations on him/her/them
in accordance with its terms;
5.1.2 the Shares constitute the whole of the issued and allotted
share capital of the Company;
5.1.3 there is no pledge, lien or other encumbrance on, over or
affecting the Shares and there is no agreement or arrangement
to give or create any such encumbrance and no claim has been
or will be made by any person to be entitled to any of the
foregoing; and
5.1.4 the Vendors are entitled to transfer the full legal and (with
the exception of the Trustee Vendors) beneficial ownership of
the Shares to the Purchaser on the terms of this Agreement
without the consent of any third party.
5.2 The Warrantors/Covenantors jointly and severally warrant to the
Purchaser that:-
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5.2.1 the information in Schedule 2 relating to the Group Companies
is true and accurate in all respects;
5.2.2 save as set out in the Disclosure Letter, the Warranties in
Schedule 3 and 6 are true and accurate in all respects;
5.2.3 the contents of the Disclosure Letter are true and accurate in
all respects and fully, clearly together with the accompanying
documents and accurately disclose every matter to which they
relate; and
5.2.4 each of the Covenantors have full power and authority to enter
into the Deed of Indemnity, which will constitute or when
executed will constitute a binding obligation on him/her/them
in accordance with its terms.
5.3 Each of the Warrantors undertakes in relation to any Warranty which
refers to the knowledge, information or belief of the Warrantors, that
he has made full enquiry into the subject matter of that Warranty.
5.4 Each of the Warranties is without prejudice to any other Warranty and,
except where expressly stated otherwise, no clause of this Agreement
shall govern or limit the extent or application of any other clause.
5.5 The rights and remedies of the Purchaser in respect of any breach of
the Warranties shall not be affected by Completion, by any
investigation made by it or on its behalf into the affairs of any Group
Company, by its inability to rescind this agreement by reason of clause
9.6, or failing to exercise or delaying the exercise of any right or
remedy, or by any other event or matter, except a specific and duly
authorized written waiver or release, and no single or partial exercise
of any right or remedy shall preclude any further or other exercise.
5.6 None of the information supplied by any Group Company or its
professional advisers to any of the Vendors or their agents,
representatives or advisers in connection with the Warranties and the
contents of the Disclosure Letter, or otherwise in relation to the
business or affairs of any Group Company, shall be deemed a
representation, warranty or guarantee of its accuracy by the Group
Company to the Vendors, and the Vendors waive any claims against the
Group Company which they might otherwise have in respect of it.
5.7 In circumstances where a Warranty Claim is capable of being made either
under the Warranties or the Deed of Indemnity the Purchaser shall be
entitled to bring each such claim, but shall not be entitled to recover
twice in respect of such Warranty Claims in respect of the same loss.
6. Pensions
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6.1 The provisions of Schedule 6 shall apply.
7. Restrictive agreement
7.1 For the purpose of assuring to the Purchaser the full benefit of the
businesses and goodwill of the Group Companies, each of the Vendors
(other than the Trustee Vendors) undertakes by way of further
consideration for the obligations of the Purchaser under this Agreement
as separate and independent agreements that he or she will not alone or
in conjunction with or on behalf of any other person, directly or
indirectly:-
7.1.1 for a period of four (4) years after the Completion Date in
relation to goods dealt in or services provided by any member
of the Group in the course of business during the two (2)
years immediately preceding the date hereof, by letter,
circulars, advertisements or other means canvass, solicit or
encourage the custom of any customer of any member of the
Group in respect of similar goods or services; nor
7.1.2 for a period of two (2) years after the Completion Date,
solicit, endeavour to entice away offer employment to, employ
or offer or conclude any contract for services with, any
person firm or company who to such Vendor's knowledge is or,
during the twelve (12) months immediately preceding the date
hereof, has been an employee (in skilled or managerial work)
of or consultant to any member of the Group; nor
7.1.3 for a period of four (4) years after the Completion Date,
(save as the holder for investment of less than three
percentum (3%) in nominal value of the voting share capital of
a company whose shares are listed on a recognized Stock
Exchange or dealt in on the Unlisted Securities Market
regulated by The Stock Exchange or as an employee or officer
or agent of the Purchaser or any member of the Group) carry on
or be engaged concerned or interested within the United
Kingdom in any business which competes with the business of
any member of the Group; nor
7.1.4 in connection with any business which competes or is likely to
compete with any business carried on by any member of the
Group at the date hereof and/or at the Completion Date, use,
or procure the use of, any business or trade name or
distinctive xxxx, style, or logo used by any member of the
Group at any time during the two (2) years immediately
preceding the date hereof or anything intended or likely to be
confused with any of them including, without limitation, the
word "Spearhead" or any colorable alternative; nor
7.1.5 at any time after the date hereof use any Intellectual
Property, or for four (4) years after the date hereof use any
Computer Know-How or for two (2) years after the date hereof
use any Marketing Information which, in any such case,
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is owned by or which any member of the Group is, or, during
the two (2) years immediately preceding the date hereof has
been expressly licensed to use in connection with its
business; nor
7.1.6 unless requested to do so by the Purchaser or any member of
the Group, disclose to any person any confidential information
(including, without limitation any Marketing Information used
by any member of the Group in connection with its business at
any time during the two (2) years before the date hereof and
any Computer Know-How or Know-How) which is either owned or
used by any or all of them or owned by any other person to
whom any such member owes any duty of secrecy; nor
7.1.7 knowingly do or say anything which may be harmful to the
reputation of any member of the Group or which may lead any
person not to engage in business or to cease to do or to
reduce its business with any member of the Group.
7.2 If any of the covenants in clause 7.1 is found to be against the public
interest or unlawful or in any way an unreasonable restraint of trade
despite the agreement of the parties (all of whom have been
professionally advised in respect thereof) that such covenants
(considered separately or together) are no greater in duration, extent
and application than is necessary to protect the goodwill of the Group
and the value of the Purchaser's investment in the Company resulting
from the purchase of the Shares pursuant to this Agreement; then:
7.2.1 such covenant shall be modified (and shall be deemed to have
been modified ab initio) as necessary to render it valid and
effective; and
7.2.2 the remaining covenants in clause 7.1 shall continue to bind
each of the Vendors as each such covenant is to be construed
as a separate and independent covenant.
8. Warrantors'/Covenantors' protection
8.1 The provisions of Schedule 7 shall apply.
9. General
9.1 No announcement shall be made in respect of the subject matter of this
Agreement unless specifically agreed between the parties or it is an
announcement required by law or the Stock Exchange issued after prior
consultation with the Vendors.
9.2 If this Agreement ceases to have effect the Purchaser will release and
return to each Group Company all documents concerning it provided to
the Purchaser or its advisers in connection with this agreement and
will not use or make available to any other
14
person any information which it or its advisers have been given in
respect of any Group Company and which is not in the public domain.
9.3 If any of the Shares shall at any time be sold or transferred, the
benefit of each of the Warranties may be assigned to the purchaser or
transferee who shall accordingly be entitled to enforce each of the
Warranties against the Warrantors as if he, she, or it were named in
this Agreement as the Purchaser provided always that any such assignee
acknowledges acceptance of the limitations on the Warrantors' liability
in respect of the Warranties.
9.4 This Agreement shall be binding upon each party's successors and
assigns and personal representatives (as the case may be) but, except
as expressly provided, none of the rights of the parties under this
Agreement or the Warranties may be assigned or transferred.
9.5 Subject to clause 9.6, all expenses incurred by or on behalf of the
parties, including all fees of agents, representatives, solicitors,
accountants and actuaries employed by any of them in connection with
the negotiation, preparation or execution of this Agreement or
transactions contemplated by or referred to in this Agreement, shall be
borne solely by the party who incurred the liability and no Group
Company shall have any liability in respect of them.
9.6 The Purchaser's rights to rescind this Agreement are hereby excluded.
9.7 Time shall be of the essence of this Agreement, both as regards the
dates and periods specifically mentioned and as to any dates and
periods which may be substituted by agreement in writing between or on
behalf of the Vendors and the Purchaser.
9.8 No purported variation of this Agreement will be effective unless made
in writing and signed by or on behalf of the Purchaser and on behalf of
the Vendors.
9.9 Any liability to the Purchaser under this Agreement may be released,
compounded or compromised in whole or in part by the Purchaser without
in any way prejudicing or affecting its rights against any other
Vendors or any other liability or obligation of the Vendor in question.
9.10 This Agreement and the other documents referred to herein or in any
such other document together comprise the entire agreement and
understanding between the Parties in connection with the sale and
purchase of the Shares and each of the Parties hereby confirm that it
has not relied on any representation or warranty which is not expressly
stated in this Agreement or in any such other document.
9.11 If any provision of this Agreement is or becomes, illegal, invalid or
unenforceable under the law of jurisdiction, neither the legality,
validity or enforceability of any other provision of this Agreement
under such law nor the legality, validity or
15
enforceability of such provision under the law of any other
jurisdiction will in any way be affected or impaired thereby.
9.12 If this Agreement or any documents forming part of the arrangements
contemplated by this Agreement is subject to registration under the
Restrictive Trade Practices Acts
1976 and 1977 the provisions which render it registrable will not come
into effect until such time as a copy and particulars of this Agreement
and such other documents forming part of the arrangements are furnished
to the Director General of Fair Trading for registration under and
pursuant to such Acts, but all other rights and obligations of the
Parties hereunder will become effective on the date hereof.
9.13 This Agreement may be entered into in any number of counterparts and by
the Parties on separate counterparts each of which when so executed and
delivered shall be an original, but all the counterparts shall together
constitute one and the same instrument.
9.14 Save for an obligation fully performed before or at Completion, this
Agreement will continue in full force and effect after the Completion
Date notwithstanding Completion. Completion shall not constitute a
waiver of any of the Purchaser's rights.
9.15 The Schedules form part of this Agreement and will be as effective as
if they had been set out in the body of this Agreement.
10. Notices
10.1 To be effective all notices, consents, approvals, waivers and requests,
relating to this Agreement must be in writing but may be delivered
personally or sent by first class recorded delivery post, facsimile
transmission or telex to the party to be served at its registered
office for the time being in the case of a company or at his address as
herein stated or as notified from time to time in the case of an
individual PROVIDED THAT any such notice, consent, approval, waiver or
request may instead be delivered to the Solicitors representing the
person to be served. Copies of any notice given by or on behalf of the
Purchaser will be contemporaneously copied to each of the Warrantors.
10.2 A notice, consent, approval or request will be deemed to have been
served as follows:
10.2.1 if delivered personally, at the time of delivery or, if not
delivered during normal business hours on a business day, at
9.30 am on the business day next following the day of
delivery;
10.2.2 if posted, on the second business day after the envelope
containing the same was delivered into the custody of The
Royal Mail or, if such period
16
expires other than on a business day, at 9.30 am on
the next business day thereafter; and
10.2.3 if sent by facsimile transmission or telex, at the
time of despatch or, if outside normal business
hours, at 9.30 am on the business day next following
the day upon which the same was dispatched.
10.3 In proving such service, it will be sufficient to prove that the
personal delivery was made, or that the envelop containing such notice
was properly addressed as a pre-paid first class recorded delivery
letter, or that the facsimile transmission or telex was properly
addressed and dispatched.
11. Remedies
11.1 Any remedy available to the Purchaser for breach of this Agreement
(including, but without limitation, a breach of any of the Warranties)
shall be in addition and without prejudice to all other rights and
remedies available to the Purchaser and the exercise of or failure to
exercise any remedy shall not constitute a waiver by the Purchaser of
any of its rights and remedies.
11.2 If as a result of an act, event, circumstance, transaction or omission
occurring on or before Completion which gives rise, directly or
indirectly, to a breach of any of the Warranties any member of the
Group or any asset of any member of the Group is worth less than it
would otherwise have been or any member of the Group is or will be
under a liability or an increased or substituted liability which would
not have subsisted (to the extend thereof) but for such act, event,
circumstance, transaction or omission the Purchaser may by notice to
any of the Warrantors require any or all of them to make good the same
to any member of the Group or, at the Purchaser's option, to pay the
Purchaser an amount equal to the diminution in the value of the Shares
caused thereby.
17
12. Governing Law
12.1 This Agreement will be governed by and construed in accordance with
English law. The Parties hereby submit to the jurisdiction of the
English Courts and the Vendors hereby irrevocably appoint the Vendors'
Solicitors as their agent to accept service of process.
IN WITNESS WHEREOF the parties have executed this Agreement the day and year
first before written:
EXECUTED by XXXX )
SIRANGELO (President) for and )
on behalf of ) /s/ Xxxx Xxxxxxxxx
PGI ACQUISITION COMPANY E )
in the presence of:
Witness Signature : /s/ Xxxxx Xxxxxxxxx Sheach
Witness Name : 0 Xxxx Xxxxxxxxxx Xxxxxx
Witness Address : Aberdean
EXECUTED by XXXXX )
XXXXXXX XXXXXXX XXXXX ) /s/ Xxxxx Xxxxxxx Xxxxxxx Xxxxx
in the presence of:
Witness Signature : /s/ Xxxxx Xxxxxxxxx Sheach
Witness Name : 0 Xxxx Xxxxxxxxxx Xxxxxx
Witness Address : Aberdean
EXECUTED by XXXXX )
XXXXXX WEAVERS ) /s/ Xxxxx Xxxxxx Weavers
in the presence of:
Witness Signature : /s/ Xxxxx Xxxxxxxxx Sheach
Witness Name : 0 Xxxx Xxxxxxxxxx Xxxxxx
Witness Address : Aberdean
EXECUTED by XXXXXXXXXXX )
XXXXXX XXXXXXX MARKE ) /s/ Xxxxxxxxxxx Xxxxxx Xxxxxxx Marke
in the presence of:
18
Witness Signature : /s/ Xxxxx Xxxxxxxxx Sheach
Witness Name : 0 Xxxx Xxxxxxxxxx Xxxxxx
Witness Address : Aberdean
EXECUTED by XXXXXX )
XXXXX XXXXXX ) /s/ Xxxxxx Xxxxx Xxxxxx
in the presence of:
Witness Signature : /s/ Xxxxx Xxxxxxxxx Sheach
Witness Name : 0 Xxxx Xxxxxxxxxx Xxxxxx
Witness Address : Aberdean
EXECUTED by XXXXX )
XXXXXXXX XXXXXX ) /s/ Xxxxx Xxxxxxxx Xxxxxx
in the presence of:
Witness Signature : /s/ Xxxxx Xxxxxxxxx Sheach
Witness Name : 0 Xxxx Xxxxxxxxxx Xxxxxx
Witness Address : Aberdean
EXECUTED by )
(duly authorized signatory for )
and on behalf of Jorvic Limited) )
and by X. Xxxxxxxxx for and on ) /s/ [SIGNATURE APPEARS HERE]
behalf of ESPAGNOL TRUST )
in the presence of:
EXECUTED by )
(duly authorized signatory for )
and on behalf of Jorvic Limited) )
and by X. Xxxxxxxxx for and on ) /s/ [SIGNATURE APPEARS HERE]
behalf of ESPAGNA TRUST )
in the presence of:
Witness Signature : /s/ Xxxxx Xxxxxxxxx Sheach
Witness Name : 0 Xxxx Xxxxxxxxxx Xxxxxx
Witness Address : Aberdean
19
EXECUTED by )
(duly authorized attorney) )
for and on behalf of XXXX ) /s/ [SIGNATURE APPEARS HERE]
XXXXX XXXXXXXX )
in the presence of:
Witness Signature : /s/ Xxxxx Xxxxxxxxx Sheach
Witness Name : 0 Xxxx Xxxxxxxxxx Xxxxxx
Witness Address : Aberdean
EXECUTED by )
(duly authorized attorney) )
for and on behalf of XXXXXXX ) /s/ [SIGNATURE APPEARS HERE]
XXXXXX XXXXXXXX )
in the presence of:
Witness Signature : /s/ Xxxxx Xxxxxxxxx Sheach
Witness Name : 0 Xxxx Xxxxxxxxxx Xxxxxx
Witness Address : Aberdean
20
====================================================================================================================================
Vendors' Name Number of Consideration
and Address Shares
------------------------------------------------------------------------------------------------------------------------------------
On Completion Retained Sum Loan Notes
------------------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxx Xxxxxxx Xxxxx, 6,845 954,483.00 878,735.75
Ashleigh,
00 Xxxxxxxx Xxxxxx,
Xxxxxx,
Xxxxxx XX00 0XX
------------------------------------------------------------------------------------------------------------------------------------
Jorvik Limited and X Xxxxxxxxx 2,220 341,994.40 284,995.19
(Espagnol Trust)
00 Xxxxxx Xxxxxx, Xxxxxxx,
Xxxx of Man
------------------------------------------------------------------------------------------------------------------------------------
Jorvik Limited and X Xxxxxxxxx 2,220 341,994.40 284,995.19
(Espagna Trust)
00 Xxxxxx Xxxxxx, Xxxxxxx,
Xxxx of Man
------------------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxx Weavers, Dragons, 1,388 213,823.60 178,186.25
Xx. Xxxxxxx Xxxx, Xxxxxxxxxxxxxx,
Xxxx Xxxxxx
------------------------------------------------------------------------------------------------------------------------------------
Xxxx Xxxxx Xxxxxxxx, 3,700 569,990.80 474,992.20
00 Xxxxxxxx Xxxxxxxx,
00 Xxxxxxxx Xxxx,
Xxxx Xxxx
------------------------------------------------------------------------------------------------------------------------------------
21
====================================================================================================================================
Vendors' Name Number of Consideration
and Address Shares
------------------------------------------------------------------------------------------------------------------------------------
On Completion Retained Sum Loan Notes
------------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxx Xxxxxxxx 740 113,998.00 94,998.17
00 Xxxxxxxx Xxxxxxxx
00 Xxxxxxxx Xxxx
Xxxx Xxxx
------------------------------------------------------------------------------------------------------------------------------------
Xxxxxxxxxxx Xxxxxx Xxxxxxx Marke, 1,387 213,669.40 178,057.75
0, Xxx Xxxx Xxxxxx, Xxxxx,
Xxxxxx XX00 0XX
------------------------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxx Xxxxxx 487 72,023.20 62,519.25
Cherry Tree Cottage, Horsham Road
Holmbury, St. Xxxx,
Dorking, Surrey
------------------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxxx Xxxxxx 72,023.20 62,519.25
00 Xxxxxxxx, Xxxx Xxxx,
Xxxxxx, Xxxxxx 487
XX00 0XX
------------------------------------------------------------------------------------------------------------------------------------
Total number of Shares 19,474 2,900,000 1,139,981.75 1,360,018.25
====== ========= ============ ============
====================================================================================================================================
22
SCHEDULE 2
Details of group companies
Part 1: The Company
Company number: 3056668
Date of incorporation: 15 May 1995
Share capital 20,000 Ordinary Shares of(pound)1 each
Authorized: (pound)20,000
Issued (pound)19,474
Registered office: Ocean House, 00 Xxxxxxxx Xxxx,
Xxx Xxxxxx, Xxxxxx, XX0 0XX
Directors: Xxxx Xxxxxxx Xxxxxxx Xxxxxxxx
Xxxxxxxxxxx Xxxxxx Xxxxxxx Xxxxx
Xxxxx Xxxxxxx Xxxxxxx Xxxxx
Secretary: Xxxxxxxxxxx Xxxxxx Xxxxxxx Marke
23
Part 2: The Subsidiaries of the Company
====================================================================================================================================
Name of Subsidiary Registered Share Capital/ Registered Office Shareholders
Number Authorized
Capital
------------------------------------------------------------------------------------------------------------------------------------
Spearhead Exhibitions 1062758 Ordinary/ Ocean House, 50 10,549 the Company
Limited 10,5740 Xxxxxxxx Xxxx, Xxx
Xxxxxxxx Xxxxxx, Xxxxxx XX0 25 DCC Xxxxx
3LU
------------------------------------------------------------------------------------------------------------------------------------
Spearhead Offshore 2330299 100 Ordinary/ Xxxxx Xxxxx, 00 0 Xxxxxxxxx
Xxxxxx Limited 20 Ordinary Kingston Road, New Exhibitions Limited
Xxxxxx, Xxxxxx XX0
0XX 1 DCC Xxxxx
------------------------------------------------------------------------------------------------------------------------------------
Offshore Management 2308214 100 Ordinary/ Ocean House, 50 1 Spearhead
Limited 2 Ordinary Kingston Road, New Exhibitions Limited
Xxxxxx, Xxxxxx XX0
0XX 1 DCC Xxxxx
------------------------------------------------------------------------------------------------------------------------------------
Intelec Exhibitions 2766693 100 Ordinary Ocean House, 50 60 Spearhead
Limited Kingston Road, New Exhibitions Limited
Xxxxxx, Xxxxxx XX0
0XX 40 Strategic Events
Limited
------------------------------------------------------------------------------------------------------------------------------------
IMDEX Asia Limited 3073340 100 Ordinary 0 Xxxxxxx Xxx, 00 Xxxxxxxxx
Xxxxxx XX0X 0XX Exhibitions Limited
50 Xxxxx Marriott
====================================================================================================================================
24
SCHEDULE 3
Warranties
1. Accounts
1.1 The principal accounts
1.1.1 The Principal Accounts were prepared in
accordance with the historical cost convention;
and the bases and policies of accounting
adopted in preparing the Principal Accounts are
the same as those adopted in preparing the
audited accounts of each Group Company in
respect of the three last preceding accounting
periods.
1.1.2 The Principal Accounts:
(a) gave a true and fair view of the assets and
liabilities of each Group Company at the Last
Accounts Date and its profits and/or losses for
the accounting period ended on that date;
(b) comply with the requirements of the Companies
Acts and other relevant statutes;
(c) comply with all FRSs applicable to a United
Kingdom company current for the period in
respect of which the Principal Accounts were
prepared;
(d) are not affected by any extraordinary,
exceptional or non-recurring item;
(e) properly reflect the financial position of each
Group Company as at that date; and
(f) fully disclose as far as material all the
assets of each Group Company as at that date.
1.1.3 As far as the Warrantors are aware no amount
included in the Principal Accounts in respect
of any asset, whether fixed or current,
materially exceeds its purchase price or
production cost (within the meaning of CA Sched
4) or (in the case of current assets) its net
realizable value on the Last Accounts Date.
1.2 Valuation of stock-in-trade and work in progress
25
1.2.1 In the Principal Accounts the stock-in-trade
and work in progress of each Group Company have
been treated in accordance with SSAP 9.
1.2.2 In the Principal Accounts all redundant,
obsolete and slow-moving stock-in-trade has
been written off or written down, as
appropriate.
1.3 Depreciation of fixed assets
1.3.1 In the Principal Accounts for the three
preceding financial years, the fixed assets of
each Group Company have been depreciated in
accordance with SSAP 12.
1.4 Deferred taxation
1.4.1 Where provision for deferred taxation is not
made in the Principal Accounts, full details so
far as material of the amounts of deferred
taxation have been disclosed in the Disclosure
Letter.
1.5 Accounting reference date
1.5.1 The accounting reference date of each Group
Company for the purposes of CA s 224 is 31
March and there has not at any time been any
other date.
1.6 Book debts
1.6.1 Save as disclosed in the Disclosure Letter, no
part of the amounts included in the Principal
Accounts, or subsequently recorded in the
Management Accounts books of any Group Company,
as owing by any debtors:
(i) remains outstanding from any exhibitor in
respect of any exhibition which has been held
or
(ii) in respect of any other debtors, is overdue by
more than twenty six weeks, or has been
released on terms that any debtor pays less
than the full book value of his debt or has
been written off or has proved to any extent to
be irrecoverable or is now regarded by the
relevant Group Company as irrecoverable in
whole or in part.
1.6.2 As far as the Warrantors are aware, the amounts
due from debtors as at Completion (less the
amount of any relevant provision or
26
reserve, determined on the same basis as that
applied in the Principal Accounts and disclosed
in the Disclosure Letter) will be recoverable
in full in the ordinary course of business and
in any event not later than twenty six weeks
after Completion; none of those debts is
subject to any counter-claim or set off, except
to the extent of any such provision or reserve;
and save as disclosed in the Disclosure Letter,
no Group Company has received any notice of
cancellation from the exhibitor in respect of
future exhibitions from exhibitors representing
more than 5% in aggregate of the projected
turnover from such exhibition.
1.7 Books and records
1.7.1 All the accounts, books, ledgers, financial and
other records, of whatsoever kind as required
by CA 221, of each Group Company:
(a) are in its possession;
(b) have been fully properly and accurately kept
and completed; and
(c) do not contain any material inaccuracies or
discrepancies.
1.7.2 The Management Accounts show a true and fair
view of Spearhead Exhibitions Limited's trading
transactions, and its financial, contractual
and trading position for the period for which
they are made up.
2. Corporate matters
2.1 Directors and shadow directors
2.1.1 The only directors of the Group Companies are
the persons whose names are listed in relation
to each Group Company in Schedule 2.
2.1.2 No person is a shadow director (within the
meaning of CA s 741) of a Group Company but is
not treated as one of its directors for all the
purposes of that Act.
2.2 Subsidiaries, associations and branches
2.2.1 No Group Company:
27
(a) is the holder or beneficial owner of or has
agreed to acquire any share or loan capital of
any company (whether incorporated in the United
Kingdom or elsewhere) other than the
Subsidiaries listed in Schedule 2;
(b) has outside the United Kingdom any branch,
agency or place of business, or any permanent
establishment (as that expression is defined in
the relevant double taxation relief order
current at the date of this agreement).
28
2.3 Options over group companies' capital
2.3.1 Except as required by this Agreement, there are
no agreements or arrangements in force which
provide for the present or future issue,
allotment or transfer of or grant to any person
the right (whether conditional or otherwise) to
call for the issue, allotment or transfer of
any share or loan capital of any Group Company
(including any option or right of pre-emption
or conversion).
2.4 New issues of capital
2.4.1 No share or loan capital has been issued or
allotted, or agreed to be issued or allotted,
by any Group Company since the Last Accounts
Date.
2.5 Commissions
2.5.1 No one is entitled to receive from any Group
Company any finder's fee, brokerage or other
commission in connection with the sale and
purchase of the Shares under this agreement.
2.6 Memoranda and articles of association, statutory books and
resolutions
2.6.1 The copy of the memorandum and articles of
association of each Group Company attached to
the Disclosure Letter is accurate and complete
in all respects and has embodied in it or
annexed to it a copy of every such resolution
as is referred to in CA s 380.
2.6.2 The register of members and other statutory
books of each Group Company have been properly
kept and contain an accurate and complete
record of the matters with which they should
deal.
2.6.3 No notice or allegation that any of the
foregoing is incorrect or should be rectified
has been received.
2.6.4 Since the Last Accounts Date no alteration has
been made to the memorandum or articles of
association of any Group Company and no
resolution of any kind of the shareholders of
any Group Company has been passed (other than
resolutions relating to routine business at
annual general meetings).
2.7 Documents filed
2.7.1 As far as the Warrantors are aware, all
returns, particulars, resolutions and documents
required by the Companies Acts or any
29
other legislation to be filed with the
Registrar of Companies, or any other authority,
in respect of each Group Company have been duly
filed and were correct; and due compliance has
been made with all the provisions of the
Companies Acts and other legal requirements in
connection with the formation of each Group
Company, the allotment or issue of shares,
debentures and other securities, the payment of
dividends and the conduct of its business.
2.7.2 All charges in favour of any Group Company have
(if appropriate) been registered in accordance
with the provisions of CA ss 395, 409, 410 and
424.
2.8 Possession of documents
2.8.1 All title deeds relating to the assets of each
Group Company, and an executed copy of all
agreements in force to which any Group Company
is a party, and the original copies of all
other documents which are owned by or which
ought to be in the possession of any Group
Company are in its possession.
2.9 Investigations
2.9.1 No investigations or enquiries by, or on behalf
of, any governmental or other body in respect
of the affairs of any Group Company are pending
or taking place.
2.10 Information disclosed to purchaser correct
2.10.1 All written information given by any of the
Vendors, Vendors' Solicitors or Vendors'
Accountants to the Purchaser, the Purchaser's
Solicitors or the Purchaser's Accountants
relating to the business, activities, affairs,
or assets or liabilities of any Group Company
was, when given, and is now accurate and
comprehensive in all material respects and not
misleading.
2.10.2 There are no material facts or circumstances,
in relation to the assets, business or
financial condition of any Group Company, which
have not been fully and fairly disclosed in
writing to the Purchaser or the Purchaser's
Solicitors, and which, if disclosed, might
reasonably have been expected to affect the
decision of a purchaser to enter into an
agreement substantially on the same terms as
are contained in this Agreement.
3. Taxation
30
3.1 Last Accounts
All liabilities, whether actual, deferred, contingent or
disputed, of each Group Company for tax measured by reference
to income, profits or gains earned, accrued or received on or
before the Last Accounts Date or arising in respect of an event
occurring or deemed to occur on or before the Last Accounts
Date are properly provided for or (as appropriate) disclosed in
the Principal Accounts. All other warranties relating to
specific tax matters set out in this Schedule are made without
prejudice to the generality of this paragraph.
3.2 Position since Last Accounts Date
Since the Last Accounts Date:
3.2.1 no Group Company has been involved in any
transaction which has given or may so far as
the Warrantors are aware give rise to a
liability to tax on any Group Company (or would
have given or might give rise to such a
liability but for the availability of any
relief) other than tax in respect of normal
trading income or receipts of the Group Company
concerned arising from transactions entered
into by it in the ordinary course of business;
3.2.2 no disposal has taken place or other event
occurred which has or may have the effect of
crystallizing a liability to tax which, if such
disposal or event had been planned at the Last
Accounts Date, should have been reflected in
the provision for deferred tax contained in the
Last Accounts; and
3.2.3 no accounting period (as defined in section 12
of the Taxes Act 1988) of any Group Company has
ended as referred to in section 12(3) of that
Act.
3.3 Continuing Commitments
All sums payable under any obligation incurred by any Group
Company prior to Completion and which will continue to bind any
Group Company after Completion have been and will continue
(otherwise than pursuant to a change of law which occurs after
Completion with retrospective effect) to be deductible for the
purposes of corporation tax (or any corresponding tax on
profits in any relevant foreign jurisdiction), either in
computing the profits of any Group Company or in computing the
corporation tax or corresponding tax chargeable on it.
3.4 Returns etc.
Each Group Company has duly, and within any appropriate time
limits, made all returns, given all notices and supplied all
other information required to be supplied to all relevant tax
authorities; all such information was and remains complete and
accurate in all material respects and were made on the proper
basis and do not, and so far as the Vendors are aware are not
likely to, reveal any transactions which may be the subject of
any dispute with any tax authority.
31
3.5 Disputes, investigations
No Group Company is involved in any current dispute with any
tax authority or is or has in the last six years been the
subject of any investigation, audit or non- routine visit by
any tax authority. So far as the Vendors are aware not having
made any specific enquiry of any taxation authority, in
relation to each Group Company there is no planned
investigation audit or non-routine visit by any tax authority
and there are no facts which might cause such an investigation,
audit or non-routine visit by an tax authority to be instituted
and no Group Company has been notified that any such
investigation audit or visit is planned.
3.6 Administration/Pay and File
In relation to each Group Company, the Disclosure Letter gives
full details of:
3.6.1 all determinations made under section 41A of
the Taxes Management Xxx 0000;
3.6.2 all directions reducing any amounts so
determined, pursuant to section 41B of that
Act;
3.6.3 all assessments to tax made by any tax
authority, and any determinations and
directions as aforesaid, which are subject to
appeal or have otherwise not become final at
the date hereof;
3.6.4 all payments of tax, and claims for repayment
of tax, made in respect of any period for which
no assessment to tax has been issued or become
final (and whether made pursuant to section 10
of the Taxes Act or otherwise);
3.6.5 all claims made to group relief which either
relate to an accounting period ended not more
than six years prior to the date hereof or
which have not been agreed or otherwise
determined, or where the losses or other
amounts to which the claim relates have not
been determined; and
3.6.6 all consents of the surrendering company to the
surrender of group relief given or to be given
in circumstances where the claim to group
relief has not become final.
3.7 Outstanding Rights
The Disclosure Letter gives details so far as material of the
rights of each Group Company which have not, at the time of
Completion, been exercised, to
32
make any claim for relief or any election for a basis or method
of tax or type of relief and any rights to make an appeal
against an assessment or an application for postponement of any
tax.
3.8 Withholdings
Each Group Company has made all deductions and retentions of or
on account of tax as it was or is obliged to make and all such
payments of or on account of tax as should have been made to
any tax authority in respect of any such deductions or
retentions.
3.9 Employees/Pensions
All National Insurance contributions and sums payable to the
Inland Revenue under the P.A.Y.E. system and any amounts of a
corresponding nature payable to any foreign tax authority due
and payable by any Group Company up to the date hereof have
been paid and each Group Company has made all such deductions
and retentions as should have been made under section 203 of
the Taxes Act and all regulations made thereunder or under any
comparable laws or regulations of any relevant foreign
jurisdiction.
3.10 Capital Gains
If each Group Company disposed of each of its assets (except
trading stock and work-in-progress) for a consideration equal
to the book value of that asset as shown in or adopted for the
purposes of the Last Accounts to a person not connected with it
and by way of bargain at arm's length, no liability to tax
would arise by reference to any actual or deemed gain and no
Group Company has acquired any such asset (otherwise than from
another Group Company) except by way of bargain at arm's length
and from an unconnected person.
3.11 No allowable loss which might accrue on the disposal by any
Group 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 corporation tax on chargeable gains or any
corresponding tax of any relevant foreign jurisdiction.
3.12 No Group Company has ceased or could (on or after Completion)
as a result of the acquisition contemplated by this Agreement
cease to be a member of a group of companies in circumstances
in which a charge under sections 178 or 179 of the TCGA (deemed
disposal of chargeable assets) has arisen or could arise
(otherwise than as part of a merger to which section 181 of
that Act applies) could apply.
3.13 No Group Company has made any such transfer as is referred to
in section 125 of the TCGA (close company transferring assets
at under value).
33
3.14 Capital Expenditure
If each Group Company disposed of each of its assets, or of any
pool of assets (that is to say all those assets expenditure
relating to which would be taken into account in computing
whether a balancing charge or corresponding tax would arise on
a disposal of any of those assets) for a consideration equal to
their book value as shown in or adopted for the purpose of the
Last Accounts, no balancing charge (or corresponding tax of any
relevant foreign jurisdiction) would arise in respect of any
such asset or pool of assets under any legislation relating to
capital allowances (or corresponding legislation of the
relevant foreign jurisdiction).
3.15 Losses - Major changes etc.
There has been no change in the ownership of any Group Company
nor any major change in the nature or conduct of any trade or
business carried on by any Group Company nor has any other
event or series of events occurred before Completion which
might cause the disallowance of the carry forward or back of
losses or excess charges or the disallowance of the carry
forward or back, set-off or surrender of advance corporation
tax under the provisions of section 768 or 768A of the Taxes
Act (change in ownership of company: disallowance of relief for
trading losses) or sections 245 to 245B (inclusive) of the
Taxes Act (ACT set off), or which might cause a trade to be
disregarded by virtue of paragraph 8 of Schedule 7A to the
TCGA.
3.16 Surrenders
The Disclosure Letter gives full details of any surrender or
claim or agreement to surrender or claim any advance
corporation tax under the provisions of section 240 of the
Taxes Act (surrender of advance corporation tax) or any amount
by way of group relief) by each Group Company, including any
receipt or payment (or any entitlement to receive or obligation
to make a payment) in respect thereof, where such surrender or
claim has not become final and determined for any reason.
3.17 Group Composition
All Group Companies resident in the United Kingdom for tax
purposes together comprise a group for the purposes of Chapter
IV of Part X of the Taxes Act and there are no circumstances or
arrangements as a result of which any Group Company might cease
to form part of such group.
3.18 Close Companies
34
3.18.1 No apportionment under sections 423 to 430
(inclusive) and Schedule 19 to the Taxes Act
has been made or threatened against any Group
Company, and no action has been taken and no
event has occurred which could lead to such an
apportionment being made in relation to any
accounting period of a Group Company beginning
on or before 31 March 1989.
3.18.2 Each Group Company has obtained clearances
under Schedule 19 to the Taxes Act for each
accounting period of that Group Company
beginning on or before 31 March 1989.
3.18.3 Each Group Company has throughout each
accounting period beginning on or before 31
March 1989 been a trading company or a member
of a trading group as defined by paragraph 7 of
Schedule 19 to the Taxes Act.
3.18.5 No Group Company has made any transfers of
value within section 94 of the Inheritance Tax
Xxx 0000.
3.18.6 No Group Company is or has at any time been a
close investment holding company as defined in
section 13A of the Taxes Act.
3.18.7 No Group Company has since 5 April 1965 done
anything so as to give rise to an assessment or
any charge to tax under section 419 (as
extended by section 422) of the Taxes Act
(loans to participators and associates).
3.19 Distributions - General
No Group Company has on or after 6 April 1965:
3.19.1 made any distribution or deemed distribution
within the meanings of section 209, 210 or 418
of the Taxes Act (distributions and deemed
distributions) except as provided for in its
audited accounts;
3.19.2 repaid, redeemed or purchased or agreed to
repay, redeem or purchase any of its share
capital; or
3.19.3 capitalized or agreed to capitalize 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 Taxes Act).
35
3.20 Demergers
No Group Company has been concerned in any exempt distribution
within section 213 to the Taxes Act within the period of six
years preceding Completion (demergers: exempt distributions).
3.21 Residence
Each Group Company is and has at all times been resident in the
United Kingdom for tax purposes and is not and has not been
treated as resident in any other jurisdiction for any tax
purpose (including any double taxation arrangement).
3.22 Treasury Consents
No Group Company has carried out or caused or permitted to be
carried out any of the transactions specified at the relevant
time in section 765(1) of the Taxes Act otherwise than with the
prior consent of H.M. Treasury (and in the case of a special
consent, full particulars of any conditions subject to which
such consent was given are set out in the Disclosure Letter) or
specified at the relevant time in section 765A of the Taxes Act
without having duly provided the required information to the
Inland Revenue.
3.23 Value Added Tax
For the purposes of this section the expression VAT legislation
shall include the Value Added Tax Xxx 0000, the Finance Xxx
0000 and all other enactments in relation to value added tax
and all notices, provisions and conditions made or issued
thereunder including the terms of any agreement reached with
H.M. Commissioners of Customs and Excise or any concession
referred to in the Disclosure Letter.
3.24 In relation to each Group Company:
3.24.1 it is registered for the purposes of value
added tax, has been so registered at all times
that it has been required to be registered by
VAT legislation, and such registration is not
subject to any conditions imposed by or agreed
with H.M. Customs and Excise;
3.24.2 it has complied fully with and observed in all
material respects the terms of VAT legislation;
3.24.3 it has maintained and obtained at all times
complete, correct and up-to-date records,
invoices and other documents (as the case may
be) appropriate or requisite for the purposes
of VAT legislation and has preserved such
records, invoices and other documents in such
form and for such periods as are required by
VAT legislation;
3.24.4 it obtains credit for all input tax (as defined
by Section 24(1) of the Value Added Tax Act
1994) paid or suffered by it;
36
3.24.5 it is not and has not been treated as a member
of a group for the purposes of VAT legislation,
and has not applied for such treatment;
3.24.6 it is not required to make payments on account
of value added tax for which it may become
liable in a prescribed accounting period
(pursuant to The Value Added Tax (Payments on
Account) No.2 Regulations 1992); and
3.24.7 it is not and has not been subject under VAT
legislation to any penalty liability notice,
written warning of failure to comply, surcharge
liability notice or requirement to give
security as a condition of making taxable
supplies.
3.25 In respect of each of the assets of each Group Company (if any)
which is a capital item for the purpose of Part VA of the VAT
(General) Regulations 1985, the Disclosure Letter sets out
accurately:
3.25.1 the capital item affected;
3.25.2 the amount of the total input tax (within the
meaning of the said Regulations) which is
subject to adjustment;
3.25.3 the percentage of that input tax which was
reclaimable on the capital item in the first
interval applicable to it and any adjustments
made or to be made having regard to events
which have occurred up to the date hereof;
3.25.4 the date of acquisition of the capital item and
the number of intervals in the adjustment
period remaining from the date of this
Agreement;
3.25.5 full particulars of all material matters to
date relevant in determining any adjustments.
3.26 Anti-avoidance provisions
No Group Company has been a party to nor otherwise involved in
any transaction, scheme or arrangement to which:
3.26.1 any of the following provisions apply:
(a) section 125 of the Taxes Act (annual payments
for non-taxable consideration);
37
(b) section 341 of the Taxes Act (payments of
interest etc. between related companies);
(c) section 729 to 746 (inclusive) of and Schedule
23A to the Taxes Act (tax avoidance: transfers
of securities, manufactured dividends and
transfer of assets abroad);
(d) sections 770 or 771 of the Taxes Act (sales,
etc. at undervalue or overvalue);
(e) section 786 of the Taxes Act (transactions
associated with loans or credit: connected
persons);
(f) sections 22, 42, 75 or 76 of the Capital
Xxxxxxxxx Xxx 0000 (capital allowances: first
year allowances, assets leased outside the UK,
effect of sales between connected persons, sale
and lease-back, etc);
(g) sections 29 to 34 (inclusive) of the TCGA
(value shifting);
(h) section 106 of the TCGA (disposal of shares and
securities within prescribed period of
acquisition); or
(i) sections 176 or 177 of the TCGA (depreciatory
transactions).
3.26.2 any of the following provisions could apply,
other than where clearances or consents, as
appropriate, have been obtained:
(a) sections 703 to 709 (inclusive) of the Taxes
Act (cancellation of tax advantages from
certain transactions in securities);
(b) section 776 of the Taxes Act (transactions in
land; taxation of capital gains);
(c) section 135 to 139 (inclusive) of the TCGA
(company reconstructions and amalgamations); or
(d) sections 213 to 218 (inclusive) of the Taxes
Act and section 192 of the TCGA (demergers).
4. Finance
4.1 Capital commitments
38
4.1.1 There were no commitments in excess
of(pound)10,000 on capital account outstanding
at the Last Accounts Date and since the Last
Accounts Date no Group Company has made or
agreed to make any capital expenditure, or
incurred or agreed to incur any capital
commitments (in either case exceeding
(pound)10,000) or disposed of or realized any
capital assets or any interest in capital
assets.
4.2 Dividends and distributions
4.2.1 Since the Last Accounts Date no Group Company
has, or is treated as having, declared or paid
any dividend or other distribution (as defined
in Taxes Act Part VI Ch II as extended by Taxes
Act s418).
4.2.2 All dividends or distributions declared, made
or paid by each Group Company have been
declared, made or paid in accordance with its
articles of association and the applicable
provisions of the Companies Acts.
4.3 Bank and other borrowings
4.3.1 Full details of all limits on each Group
Company's bank overdraft facilities are
accurately set out in the Disclosure Letter.
4.3.2 The total amount borrowed by each Group Company
from each of its bankers does not exceed its
respective overdraft facilities.
4.3.3 The total amount borrowed by each Group Company
(as determined under the relevant instrument)
does not exceed any limitation on its borrowing
powers contained in its articles of
association, or in any debenture or other
relevant document.
4.3.4 No Group Company has outstanding, or has agreed
to create or issue, any loan capital; nor has
it factored any of its debts, or engaged in
financing of a type which would not require to
be
shown or reflected in the Last Accounts, or
borrowed any money which it has not repaid,
save for borrowings not exceeding the amounts
shown in the Last Accounts.
4.3.5 No Group Company has since the Last Accounts
Date repaid or become liable to repay any loan
or indebtedness in advance of its stated
maturity.
4.3.6 No Group Company has received notice (whether
formal or informal) from any lenders of money,
requiring repayment or
39
intimating the enforcement of any security; and
there are no circumstances likely to give rise
to any such notice.
4.4 Loans by and debts due to group companies
4.4.1 No Group Company has lent any money which has
not been repaid to it, or owns the benefit of
any debt (whether or not due for payment),
other than debts which have arisen in the
ordinary course of its business.
4.4.2 No Group Company has made any loan or quasi-
loan contrary to the Companies Acts.
4.5 Liabilities
4.5.1 There are no liabilities (including contingent
liabilities) of any Group Company which are
outstanding other than those liabilities
disclosed in the Last Accounts or incurred in
the ordinary and proper course of trading since
the Last Accounts Date.
4.5.2 There has been no exercise, purported exercise
or claim for any charge, lien, encumbrance or
equity over any of the fixed assets of any
Group Company which remains outstanding; and
there is no dispute directly or indirectly
relating to any of its fixed assets.
4.5.3 No Group Company has been the tenant of, or a
guarantor in respect of, any leasehold property
other than the Properties.
4.5.4 The Company has not traded since the date of
its incorporation and has not incurred any
liability (contingent or otherwise) other than
the inter-company debt of (pound)169,160
assumed by it from Interprize Limited.
4.6 Bank accounts
An accurate and complete statement of the bank accounts of each Group Company
made up to a date not more than seven days prior to Completion together with
reconciliation statements in respect of the same have been supplied to the
Purchaser.
4.7 Working capital
Having regard to existing bank and other facilities, each Group Company has
sufficient working capital for the purposes of continuing to carry on its
business in its present form and at its present level of turnover for the period
of twelve months after Completion and for the
40
purposes of executing, carrying out and fulfilling, in accordance with their
terms, all orders, projects and contractual obligations which are binding upon
it and remain outstanding.
4.8 Continuation of facilities
In relation to all debentures, acceptance credits, overdrafts, loans or other
financial facilities outstanding or available to any Group Company (referred to
in this clause as `facilities'):
4.8.1 the Disclosure Letter sets out full details of,
and there are attached to it, accurate copies
of all documents relating to the facilities;
4.8.2 there has been no contravention of or non-
compliance with any provision of any of those
documents;
4.8.3 no steps for the early repayment of any
indebtedness have been taken or threatened;
4.8.4 there have not been nor are there any
circumstances known to the Warrantors whereby
the continuation of any of the facilities might
be prejudiced, or which might give rise to any
alteration in the terms and conditions of any
of the facilities;
4.8.5 none of the facilities is dependent on the
guarantee or indemnity of or any security
provided by a third party other than a Group
Company;
4.8.6 no Warrantor has any knowledge, information or
belief that, as a result of the acquisition of
the Shares by the Purchaser or any other thing
contemplated in this agreement, any of the
facilities might be terminated or mature prior
to its stated maturity.
4.9 Government grants
4.9.1 Full details of all grants, subsidies or
financial assistance applied for or received by
the Group Companies from any governmental
department or agency or any local or other
authority are set out in the Disclosure Letter.
4.9.2 No Group Company has done or omitted to do any
act or thing which could result in all or any
part of any investment grant, employment
subsidy or other similar payment made, or due
to be made, to it becoming repayable or being
forfeited or withheld in whole or in part.
5. Trading
41
5.1 Changes since last accounts date
5.1.1 Since the Last Accounts Date:
(a) the business of each Group Company has been
continued in the ordinary and normal course;
(b) there has been no deterioration in the turnover
or the financial or trading position or
prospects of any Group Company;
(c) no part of the business of any Group Company
has been materially and adversely affected by
any abnormal factor not affecting similar
businesses to a like extent;
(d) each Group Company has paid its creditors in
accordance with its normal practice; and there
are no amounts owing by any Group Company which
have been due for more than three months.
5.1.2 The net realizable assets of each Group Company
are not now less than at the Last Accounts
Date.
5.1.3 The trading prospects of each Group Company
have not been adversely affected as a result of
any event or circumstance arising since the
Last Accounts Date.
5.2 Vendors' other interests and liabilities to group companies
5.2.1 The Vendors do not have any rights or
interests, directly or indirectly, in any
business other than those now carried on by the
Group Companies which are or are likely to be
or become competitive with the businesses of
the Group Companies, save as registered holder
or beneficial owner of any class of securities
of any company which is normally listed on the
Stock Exchange or dealt in on the unlisted
securities market of the Stock Exchange, and in
respect of which a Vendor holds and is
beneficially interested in less than 5 per cent
of any single class of the securities in that
company.
5.2.2 There is no outstanding indebtedness of any
Vendor to a Group Company.
5.3 Effect of sale of shares
42
5.3.1 The Warrantors have no knowledge, information
or belief that after Completion (whether by
reason of an existing agreement or arrangement
or otherwise) or as a result of the proposed
acquisition of the Company by the Purchaser:
(a) any supplier of any Group Company will cease or
be entitled to cease supplying it or may
substantially reduce its supplies to it;
(b) any customer of any Group Company will cease or
be entitled to cease to deal with it or may
substantially reduce its existing level of
business with it;
(c) any Group Company will lose the benefit of any
right or privilege which it enjoys;
(d) any officer or senior employee of a Group
Company will leave and so far as the Warrantors
are aware (not having made any specific
enquiry), no such officer or senior employee
has indicated any intention to do so.
5.3.2 Compliance with the terms of this Agreement
does not and will not:
(a) conflict with, or result in the breach of, or
constitute a default under any agreement or
document to which any Group Company is a party,
or any provision of the memorandum or articles
of association of any Group Company or any
encumbrance, lease, contract, order, judgment,
award, injunction, regulation or other
restriction or obligation of any kind by which
or to which any asset of any Group Company is
bound or subject;
(b) relieve any person from any obligation to any
Group Company, or enable any person to
determine any such obligation or any right or
benefit enjoyed by any Group Company, or to
exercise any right, whether under an agreement
with or otherwise in respect of any Group
Company;
(c) result in the creation, imposition,
crystallization or enforcement of any
encumbrance on any of the assets of any Group
Company;
(d) result in any present or future indebtedness of
any Group Company becoming due and payable or
capable of being declared due and payable prior
to its stated maturity.
43
5.4 Conduct of businesses in accordance with memoranda and articles
of association
5.4.1 Each Group Company has at all times carried on
business and conducted its affairs in
accordance with its memorandum and articles of
association for the time being in force or any
other documents or arrangements relating to the
constitution of each Group Company.
5.4.2 Each Group Company is empowered and duly
qualified to carry on business in all
jurisdictions in which it carries on business.
5.5 Joint ventures and partnership
No Group Company is or has agreed to become a member of any joint venture,
consortium, partnership or other unincorporated association; and no Group
Company is or has agreed to become a party to any agreement or arrangement for
sharing commissions or other income.
5.6 Agreements relating to the management and business
There are no agreements, arrangements or understandings between a Group Company
and any person who is a shareholder or the beneficial owner of any interest in
it, or in any company in which any Group Company is interested, or any Associate
of any such person, relating to the management of any Group Company's business,
or the appointment or removal of directors of any Group Company, or the
ownership or transfer of ownership or the letting of any of the assets of any
Group Company, or the provision, supply or purchase of finance, goods, services
or other facilities to, by or from any Group Company, or in any other respect
relating to its affairs.
5.7 Agency agreements and agreements restricting business
5.7.1 No Group Company is a party to any agency,
distributorship, marketing, purchasing,
manufacturing or licensing agreement or
arrangement, or any restrictive trading or
other agreement or
arrangement pursuant to which any part of its
business is carried on, or which in any way
restricts its freedom to carry on the whole or
any part of its business in the United Kingdom
or elsewhere in such manner as it thinks fit.
5.7.2 No Group Company is bound by any undertaking or
assurances given to any court or governmental
agency.
5.8 Unfair trade and restrictive practices
44
5.8.1 As far as the Warrantors are aware, no Group
Company has committed or omitted to do any act
or thing which could give rise to any fine or
penalty; nor is a Group Company a party to any
agreement, practice or arrangement which:
(a) contravenes the provisions of the Trade
Descriptions Acts 1968 and 1972;
(b) would or might result in a reference of a
consumer trade practice, within the meaning of
the Fair Trading Act 1973 s 13, or be liable to
reference to the Consumer Protection Advisory
Committee under Part II of the said Act;
(c) contravenes the provisions of the Consumer
Credit Xxx 0000;
(d) contravenes or is invalidated (in whole or in
part) by or is subject to registration under
the Restrictive Trade Practices Acts 1976 and
1977;
(e) contravenes any provisions of the Treaty of
Rome;
(f) contravenes any other anti-trust, anti-monopoly
or anti-cartel legislation or regulations.
5.8.2 No Group Company has engaged in any anti-
competitive practice as defined in the
Competition Xxx 0000.
45
5.9 Litigation, disputes and winding up
5.9.1 No Group Company is engaged in any litigation
or arbitration proceedings as plaintiff or
defendant; there are no proceedings pending or
threatened either by or against any Group
Company; and there are no circumstances which
are likely to give rise to any litigation or
arbitration.
5.9.2 There is no dispute with any revenue or other
official department in the United Kingdom or
elsewhere, in relation to the affairs of any
Group Company, and there are no facts which may
(in the reasonable opinion of the Warrantors,
having taken all due professional advice) give
rise to any dispute.
5.9.3 There are no claims pending or threatened or
capable of arising against any Group Company by
an employee or xxxxxxx or third party, in
respect of any accident or injury, which are
not fully covered by insurance.
5.9.4 No order has been made or petition presented or
resolution passed for the winding up of any
Group Company; no distress, execution or other
process has been levied in respect of any Group
Company which remains undischarged; and there
is no unfulfilled or unsatisfied judgment or
court order outstanding against any Group
Company.
5.10 Compliance with statutes
5.10.1 As far as the Warrantors are aware, each Group
Company has conducted and is conducting its
business in accordance with all applicable laws
and regulations whether of the United Kingdom
or elsewhere.
5.10.2 No Group Company carries on (or has, at any
time when not an authorized person under
Chapter III, Financial Services Act l986,
carried on) investment business in the United
Kingdom within the meaning of Financial
Services Xxx 0000, s 1.
5.11 Data protection
No Group Company has received any enforcement or deregistration notice or
transfer prohibition notice under the Data Protection Act 1984 and no individual
has claimed compensation or is entitled to claim from any Group Company under
the Data Protection Xxx 0000.
46
5.12 Documents stamped
All documents which affect the right, title or interest of any Group Company in
or to any of its property, undertaking or assets, or to which a Group Company is
a party, and which attract stamp duty have been duly stamped and no such
documents which are outside the United Kingdom would attract stamp duty if they
were brought into the United Kingdom.
5.13 Business names
No Group Company uses a name for any purpose other than its full corporate name.
5.14 Transactions involving directors
No Group Company has been a party to any transaction to which any of the
provisions of CA s 320 or s 330 may apply.
5.15 Powers of attorney and authority
5.15.1 No power of attorney given by any Group Company
is in force.
5.15.2 No authorities (express or implied) by which
any person may enter into any contract or
commitment to do anything on behalf of a Group
Company are outstanding.
5.16 Licenses and consents
5.16.1 Each Group Company has obtained all necessary
licenses and consents for the proper carrying
on of its business (short particulars of each
license and consent being set out in the
Disclosure Letter) and all the licenses and
consents are valid and subsisting.
5.16.2 No Group Company is in breach of any of the
terms or conditions of any of the licenses or
consents; and there are no factors that might
in any way prejudice the continuation or
renewal of any of them.
5.17 Subsisting contracts
5.17.1 No Group Company is a party to any contract,
transaction or liability which:
(a) is of an unusual or abnormal nature or outside
the ordinary and proper course of business;
47
(b) is of a long-term nature (that is, unlikely to
have been fully performed in accordance with
its terms more than six months after the date
on which it was entered into or undertaken);
(c) is incapable of termination by it in accordance
with its terms on sixty days' notice or less;
(d) is of a loss-making nature (that is, known to
be likely to result in a loss to it on
completion of performance);
(e) cannot readily be fulfilled or performed by it
on time without undue or unusual expenditure or
commitment of money, effort or personnel;
(f) involves or is likely to involve the supply of
goods the aggregate sales value of which will
represent in excess of 10 per cent of its
turnover for the preceding financial year;
(g) is a contract for hire or rent, hire purchase
or purchase by way of credit sale or periodical
payment;
(h) involves or is likely to involve obligations or
liabilities which by reason of their nature or
magnitude ought reasonably to be made known to
an intending purchaser of the Shares.
5.17.3 There is not now outstanding in respect of any
Group Company any agreement for the supply of
services or for agency.
5.18 Defaults by group company
5.18.1 No Group Company is or will by reason of any
event or circumstance which has occurred on or
before Completion with the lapse of time become
(a) in default under any agreement, obligation or
arrangement to which it is a party or in
respect of any other obligations or
restrictions binding upon it being a default
which would be material in the context of its
financial or trading position;
(b) in default under any obligations existing by
reason of membership of any association or
body;
48
(c) liable in respect of any representation or
warranty (whether express or implied) or any
matter giving rise to a duty of care on its
part.
5.18.2 No threat or claim of default under any
agreement, obligation or arrangement has been
made and is outstanding against any Group
Company; and there is nothing whereby any
right, benefit or entitlement may be
prematurely terminated by any other party or
whereby the terms of any agreement, obligation
or arrangement may be worsened.
5.19 Other party's defaults
As far as the Warrantors are aware no party to any agreement with or under an
obligation to any Group Company is in default under it, being a default which
would be material in the context of the Group Company's financial or trading
position; and there are no circumstances likely to give rise to a default.
5.20 Outstanding offers
No offer, tender or the like is outstanding which may be converted into an
obligation of any Group Company by acceptance or other act of some other person.
5.21 Purchases and sales from or to one party
Neither more than 25 per cent of the aggregate amount of all the purchases, nor
more than 25 per cent of the aggregate amount of all the sales, of any Group
Company are obtained or made from or to the same supplier or customer (including
any person in any way connected with such supplier or customer) nor is any
material source of supply to any Group Company, or any material outlet for the
sales of any Group Company, in jeopardy or likely to be in jeopardy.
5.22 Guarantees and indemnities
No guarantee, or agreement for indemnity or for suretyship, given by or for the
accommodation of, a Group Company is outstanding.
5.23 Insider contracts
5.23.1 No contract or arrangement to which any Group
Company is a party and in which any Vendor or
any director of any Group Company is or has
been interested, whether directly or
indirectly, is outstanding or was outstanding
during the past three years.
5.23.2 No Group Company is a party to, and its profits
or financial position during the past three
years have not been affected by, any contract
or arrangement which is not of an entirely
arm's length nature.
5.24 Management reports
There have been no reports, concerning any Group Company, by financial or
management consultants during the past three years.
49
6. Employment
6.1 Employees and terms of employment
6.1.1 Full particulars of the identities, dates of
commencement of employment, or appointment to
office, and terms and conditions of employment
of all the employees and officers of each Group
Company, including without limitation profit
sharing, commission or discretionary bonus
arrangements, are fully and accurately set out
in the Disclosure Letter.
6.1.2 There are no agreements or arrangements
(whether or not legally binding) between any
Group Company and any trade union or other body
representing employees.
6.1.3 No contract of service exists between any Group
Company and a director or employee in relation
to which any relevant requirements of CA s 319
have not been fulfilled.
6.2 Bonus schemes
6.2.1 There are no schemes in operation under which
any employee of any Group Company is entitled
to a commission or remuneration, calculated by
reference to the whole or part of the turnover,
profits or sales of any Group Company.
6.2.2 No Group Company has registered a
profit-related pay scheme under Taxes Act Part
V Chapter III.
6.3 Changes in remuneration
6.3.1 During the period to which the Principal
Accounts relate and since the Last Accounts
Date or (where employment or holding of office
commenced after the beginning of such period)
since the commencing date of the employment or
holding of office:
(a) no change has been made in the rate of
remuneration, emoluments or pension benefits,
of any officer, ex-officer or senior executive
of any Group Company (a senior executive being
a person in receipt of remuneration in excess
of (pound)25,000 per annum);
(b) no change has been made in any other terms of
employment of any officer or senior executive.
50
6.3.2 No Group Company is bound or accustomed to pay
any moneys other than in respect of
remuneration or pension benefits to or for the
benefit of any officer or employee of any Group
Company.
6.3.3 No negotiations for any increase in the
remuneration or benefits of any officer or
employee of any Group Company are current or
likely to take place within six months after
the date of Completion.
6.4 Termination of contracts of employment
6.4.1 All subsisting contracts of service to which
any Group Company is a party are determinable
at any time on three months' notice or less
without compensation (other than compensation
in accordance with the Employment Protection
(Consolidation) Xxx 0000, as amended by the
Employment Act 1982).
6.4.2 No executive of any Group Company, who is in
receipt of remuneration in excess of
(pound)25,000 per annum, and no officer of any
Group Company has given or received notice
terminating his employment, except as expressly
contemplated in this agreement, and no such
executive or officer will be entitled to give
such notice as a result of this agreement.
6.5 Industrial disputes and negotiations
6.5.1 None of the Group Companies or their respective
employees is involved in any industrial
dispute, and there are no facts known or which
would on reasonable enquiry be known to any
Group Company or its directors or to the
Vendors which might suggest that there may be
any industrial dispute involving a Group
Company or that this agreement may lead to any
such industrial dispute.
6.6 Industrial relations agreements
No Group Company has entered into any recognition agreement with a trade union
nor has it done any act which might be construed as recognition.
6.7 Redundancies
No employee will become redundant and be entitled to a redundancy payment as a
result of this Agreement.
6.8 Pensions
51
6.8.1 Apart from the pension scheme referred to in
Schedule 6 (`the Scheme') no Group Company is
under any legal or moral liability or
obligation or a party to any ex-gratia
arrangement or promise to pay pensions,
gratuities, super-annuation allowances or the
like, or otherwise to provide `relevant
benefits' within the meaning of Taxes Act s 612
to or for any of its past or present officers
or employees or their dependents; and there are
no retirement benefit, or pension or death
benefit, or similar schemes or arrangements in
relation to or binding on any Group Company or
to which any Group Company contributes.
6.8.2 Full particulars of the Scheme are contained in
or annexed to the Disclosure Letter including
without limitation true copies of the trust
deeds and latest actuarial report and full and
accurate details of the assets, funding
arrangements and current membership.
6.8.3 The assets, investments or policies held by the
trustees of the Scheme are sufficient to
satisfy the liabilities and obligations (both
current and contingent) which the Scheme has to
its members.
6.8.4 The Scheme is an exempt approved scheme within
the meaning of Taxes Act s 592 and there is no
reason why approval may be withdrawn.
7. Assets
7.1 Ownership of assets
7.1.1 The Group Companies owned at the Last Accounts
Date and had good and marketable title to all
the assets included in the Principal Accounts
and (except for current assets subsequently
sold or realized in the ordinary course of
business) still own and have good and
marketable title to all assets included in the
Principal Accounts (excluding the Properties)
and to all assets acquired since the Last
Accounts Date.
7.1.2 No Group Company has created or granted or
agreed to create or grant any security interest
or other encumbrance in respect of any of the
fixed assets included in the Principal Accounts
(excluding the Properties) or acquired or
agreed to be acquired since the Last Accounts
Date, otherwise than in the ordinary course of
its business.
52
7.1.3 Except as disclosed in the Principal Accounts,
none of the property, assets, undertaking,
goodwill or uncalled capital of any Group
Company (excluding the Properties) is subject
to, and no Group Company has agreed to grant,
any option, charge, lien or encumbrance, or
right of pre-emption.
7.2 Assets sufficient for the business
The assets owned by each Group Company together with assets held under the hire
purchase, leasing or rental agreements listed in the Disclosure Letter comprise
all assets necessary for the continuation of its business substantially in the
same manner as now carried on.
7.3 Insurance
7.3.1 All the stock-in-trade and the assets and
undertakings of each Group Company of an
insurable nature (excluding the Property) are,
and have at all material times been, insured in
amounts representing their full replacement or
reinstatement value against fire and other
risks normally insured against by persons
carrying on the same business as that carried
on by it.
7.3.2 Each Group Company is now and has at all
material times been adequately covered against
accident, damage, injury, third party loss
(including product liability), loss of profits
and other risks normally insured against by
persons carrying on the same business.
7.3.3 All insurance is currently in full force and
effect, and nothing has been done or omitted to
be done which could make any policy of
insurance void or voidable and the Warrantors
have received no intimation from the insurers
that an increase of premium will result from
circumstances occurring prior to Completion.
7.3.4 None of the policies is subject to any special
or unusual terms or restrictions or to the
payment of any premium in excess of the normal
rate.
7.3.5 No claim is outstanding or may be made under
any of the policies and no circumstances exist
which are likely to give rise to such a claim.
7.4 Leased assets
53
No circumstance has arisen or is likely to arise in relation to any asset held
by a Group Company under a lease or similar agreement whereby the rental payable
has been or is likely to be increased.
7.5 Plant in working order
7.5.1 The plant, machinery, vehicles and other
equipment used in connection with the business
of each Group Company:
(a) are in a good and safe state of repair and
condition and satisfactory working order and
have been regularly and properly maintained;
(b) are in its possession and control, and are its
absolute property, save for those items the
subject of the hire purchase, leasing or rental
agreements listed in the Disclosure Letter, or
in respect of which the outstanding payments do
not exceed (pound)2,500;
(c) are not expected to require replacements or
additions at a cost in excess of (pound)5,000
within the next six months;
(d) are all capable and (subject to normal wear and
tear) will remain capable throughout the
respective periods of time during which they
are each written down to a nil value in the
accounts of the Group Companies (in accordance
with normal recognized accountancy principles)
of doing the work for which they were designed
or purchased.
7.5.2 Maintenance contracts are in full force and
effect in respect of all assets of the Group
Companies which it is normal or prudent to have
maintained by independent or specialist
contractors and in respect of all assets which
any Group Company is obliged to maintain or
repair under any leasing or similar agreement;
and all those assets have been regularly
maintained to a good technical standard and in
accordance with safety regulations usually
observed in relation to assets of that
description and in accordance with the terms
and conditions of any applicable leasing or
similar agreement.
7.6 Industrial property rights and trade secrets
7.6.1 All Industrial Property Rights used or required
by any Group Company in connection with its
business are in full force and effect and are
vested in and beneficially owned by it.
54
7.6.2 The Group Companies are the sole beneficial
owners of the Industrial Property Rights listed
in the Disclosure Letter and (where
registration is possible) a Group Company has
been and is registered as proprietor, and each
of those Rights is valid and enforceable, and
none of them is being used, claimed, opposed or
attached by any other person.
7.6.3 No right or license has been granted to any
person by any Group Company to use in any
manner or to do anything which would or might
otherwise infringe any of the Industrial
Property Rights referred to above; and no act
has been done or omission permitted by any
Group Company whereby they or any of them have
ceased or might cease to be valid and
enforceable.
7.6.4 The business of each Group Company (and of any
licensee under a license granted by any Group
Company) as now carried on does not and is not
likely to infringe any Industrial Property
Right of any other person (or would not do so
if the same were valid) or give rise to a
liability to pay compensation pursuant to the
Patents Xxx 0000 ss 40 and 41 and all licenses
to any Group Company in respect of any such
right are in full force and effect.
7.6.5 No Group Company has (otherwise than in the
ordinary and normal course of business)
disclosed or permitted to be disclosed or
undertaken or arranged to disclose to any
person other than the Purchaser any of its
know-how, trade secrets, confidential
information, price lists or lists of customers
or suppliers.
7.6.6 No Group Company is subject to any secrecy
agreement or agreement which may restrict the
use of disclosure of information.
7.6.7 Nothing has been done or omitted by any Group
Company which would enable any licensee under a
license granted by a Group Company to be
terminated or which in any way constitutes a
breach of the terms of any license.
8. Property
8.1 Title
8.1.1 The Property comprises the only property owned,
occupied or otherwise used in connection with
their businesses by the Group Companies. None
of the Group Companies has any liability
(whether actual or contingent) in respect of
any former property occupied by such Company.
55
8.1.2 The Property is occupied or otherwise used by
the Group Companies in connection with their
businesses is occupied or used by right of
ownership or under lease or license, the terms
of which permit the occupation or use.
8.1.3 The Group Companies are the legal and
beneficial owners of the Property.
8.1.4 The information contained in Schedule 5 as to
the tenure of the Property, the principal terms
of the leases or licenses held by the Group
Companies, and the principal terms of the
tenancies and licenses subject to and with the
benefit of which the Property are held is
accurate in all respects.
8.1.5 The Group Companies have a good and marketable
title to the Property.
8.1.6 Any lease of the Property granted for more than
twenty-one years and less than forty years is
either registered at HM Land Registry or not
registered because the reversion to it was not
registered at the time of grant.
56
8.2 Encumbrances
8.2.1 The Property is free from any mortgage,
debenture, charge, rent-charge, lien or any
other encumbrance securing the repayment of
monies or other obligation or liability of any
of the Group Companies or any other person.
8.2.2 The Property is not subject to any outgoings
other than business rates, water rates and
insurance premiums and in the case of leasehold
properties rent and service charges.
8.2.3 The Property is not subject to any restrictive
covenants, stipulations, easements, profits a
prendre, wayleaves, licenses, grants,
restrictions, overriding interests or other
similar rights vested in third parties save as
provided in the lease referred to in
Schedule 5.
8.2.4 Where any of the matters referred to in clauses
8.2.1, 8.2.2 and 8.2.3 have been disclosed in
the Disclosure Letter, the obligations and
liabilities imposed and arising under them have
been observed and performed in all material
respects and any payments in respect of them
due and payable have been duly paid and no
notices have been received specifying any
breach in respect thereof.
8.2.5 The Property is not subject to any option,
right of pre-emption or right of first refusal.
8.3 Planning matters
8.3.1 The use of the Property is the permitted use
for the purposes of the Planning Acts.
8.3.2 Planning permission has been obtained or is
deemed to have been granted for the purposes of
the Planning Acts with respect to the
development of the Property, no permission has
been suspended or called in and no application
for planning permission is awaiting decision.
8.3.3 Building regulation consents have been obtained
with respect to all development, alterations
and improvements to the Property.
8.3.4 The Group Companies have complied and are
complying in all material respects with:
57
(a) planning permissions, orders, and regulations
issued under the Planning Acts, the London
Building Acts and building regulation consents
and by-laws for the time being in force with
respect to the Property;
(b) all agreements under the Town and Country
Xxxxxxxx Xxx 0000 s 52 made or planning
obligations under the Town and Country Xxxxxxxx
Xxx 0000 s 106 undertaken with respect to the
properties; and
(c) all agreements made under the Xxxxxxxx Xxx 0000
s 38 with respect to the Property and no notice
has been received by any Group Company that
such Company has contravened any such
regulation, permission, order or agreement or
is required to take any steps in order to
comply.
8.3.5 The Property is not listed as being of special
historic or architectural importance or located
in a conservation area.
8.3.6 All claims and liabilities under the Planning
Acts or any other legislation have been
discharged and the Warrantors are not aware of
any claim or liability, contingent or otherwise
which is outstanding.
8.4 Statutory obligations
8.4.1 As far as the Warrantors are aware, the Group
Companies have complied and are complying with
all applicable statutory and by-law
requirements with respect to the Property, and
in particular (but without limitation) with the
requirements as to fire precautions and under
the Public Health Acts and the Offices, Shops
and Railway Premises Xxx 0000.
8.4.2 There is no outstanding and unobserved or
unperformed obligation with respect to the
Property necessary to comply with the
requirements (whether formal or informal) of
any competent authority exercising statutory or
delegated powers.
8.4.3 No licenses are required whether under the
Licensing Xxx 0000 or otherwise in relation to
the Property.
8.5 Adverse orders
58
8.5.1 There are no compulsory purchase notices,
orders or resolutions affecting any of the
Property and there are no circumstances likely
to lead to any being made.
8.5.2 There are no closing, demolition or clearance
orders, enforcement notices or stop notices
affecting the Property and there are no
circumstances likely to lead to any being made.
8.6 Condition of the property
8.6.1 The buildings and other structures on the
Property are in good and substantial repair and
fit for the purposes for which they are used.
8.6.2 There are no disputes with any neighboring
owner with respect to boundary walls and fences
or with respect to any easement or right over
or means of access to the Property.
8.6.3 The principal means of access to the Property
is over roads which have been taken over by the
local or other highway authority and which are
maintainable at the public expense and no means
of access to the Property is shared with any
other party nor subject to rights of
determination by any other party.
8.6.4 The Property enjoys the main services of water,
drainage, electricity and gas.
8.6.5 The Property is not located in an area or
subject to circumstances particularly
susceptible to flooding.
8.7 Insurance
8.7.1 The Property is insured for its full
reinstatement values for not less than two
years' loss of rent and against third party and
public liabilities to an adequate extent.
8.7.2 All premiums payable in respect of insurance
policies with respect to the Property which
have become due have been duly paid and no
circumstances have arisen which would vitiate
or permit the insurers to avoid the policies.
8.7.3 The information in the Disclosure Letter with
respect to the insurance policies is accurate
in all respects.
8.8 Leasehold property
59
8.8.1 The relevant Group Company has paid the rent
and observed and performed the covenants on the
part of the tenant and the conditions contained
in any lease (which expressions in this clause
8.8 includes underleases) under which the
Property is held, in all material respects (and
no Group Company has received any notice of non
performance, payment or compliance in respect
of the same) and the last demand (or receipts
for rent if issued) were unqualified, and all
the leases are valid and in full force.
8.8.2 All licenses, consents and approvals required
from the landlords and any superior landlords
under any lease of the Property has been
obtained and the covenants on the part of the
tenant contained in the licenses, consents and
approvals have been duly performed and observed
in all material respects (and no Group Company
has received any notice of non performance,
payment or compliance in respect of the same).
8.8.3 There is no rent review under the lease of the
Property in progress.
8.8.4 No obligation necessary to comply with any
notice or other requirement given by the
landlord under any lease of the Property is
outstanding and unobserved or unperformed.
8.8.5 There is no obligation to reinstate the
Property by removing or dismantling any
alteration made to it by any Group Company or
any predecessor in title to the Group
Companies.
8.9 Tenancies
8.9.1 The Property is not held subject to and with
the benefit of any tenancies (which expression
in this clause 8.9 includes subtenancies) as
set out in Schedule 5 and no others.
8.10 Pollution
8.10.1 None of the Group Companies have permitted or
allowed any hazardous material (including but
not limited to "controlled waste" within the
meaning of Section 61 of the Environmental
Protection Act 1990 ("EPA") ("Hazardous
Material") to be kept on or at the Property,
the presence of which may require work to be
undertaken to restore the property or clean-up
under any applicable law whether on or off the
Premises or the presence of which causes or
threatens to cause nuisance (whether public or
60
private) or which in an uncontained form may
cause pollution of the environment or harm to
human health or detriment to the amenities of
the locality or which is otherwise toxic,
explosive, corrosive, radio-active,
carcinogenic or mutagenic.
8.11 Aberdeen Exhibition and Conference Centre Limited ("AECCL")
8.11.1 Spearhead Exhibitions Limited is the registered
holder and beneficial owner of 28.8% of the
issued share capital of AECCL, free from any
charges, liens or encumbrances, and all of such
shares have been fully paid up. The Company has
not exercised any option to acquire any further
shares in AECCL, nor is it obliged to do so or
will it be obliged to do so with the passage of
time.
8.11.2 In accordance with any Articles of Association
or agreement existing between the shareholders
of AECCL, all consents have been obtained in
respect of the acquisition of the Shares
contemplated by this Agreement.
8.11.3 The Company has not given any guarantee nor
does it act as surety nor will it have any
liability or obligation in respect of or
relating to any liability or obligation
(whether future, actual or contingent) of AECCL
or as a shareholder or by virtue of being
construed as shadow director of AECCL.
61
SCHEDULE 4
Deed of Indemnity
Date: 1995
Parties:
1 `The Covenantors': the persons whose names and
addresses are set out in the Schedule; and
2 `The Purchaser': PGI Acquisition Company E (a
Virginian Corporation) whose principle place of
business is at 0000 Xxxxxx Xxxxxxxxx, Xxxxx
000, Xxxxxxxxx, Xxxxxxxx 00000.
Recital:
This Deed is entered into pursuant to an agreement made between the Covenantors
(and others) and the Purchaser relating to the sale of all the ordinary share
capital of Spearhead Communications Limited (a company incorporated in England
and Wales under registered no. 3056668), whose registered office is at Ocean
House, 00 Xxxxxxxx Xxxx, Xxx Xxxxxx, Xxxxxx, XX0 0XX ("the Company") ("the
Agreement").
Operative provisions:
1 Definitions
In this deed:
1.1 Words and expressions defined in the Agreement shall, except
where otherwise provided or expressly defined below, have the
same meaning in this Deed.
1.2 `TAXATION' means all forms of taxation, duties, imposts and
levies whatsoever and whenever imposed and whether of the
United Kingdom or elsewhere, and without prejudice to the
generality of that expression includes:
1.2.1 income tax, corporation tax, advance
corporation tax, capital gains tax, inheritance
tax, stamp duty, stamp duty reserve tax, rates,
value added tax, customs and other import
duties and national insurance contributions,
any payment whatsoever which the Company may be
or become bound to make to any person as a
result of any enactment relating to taxation
and any other taxes, duties or levies
supplementing or replacing any of the above;
62
1.2.2 all costs, charges, interest, fines, penalties
and expenses incidental, or relating, to any
Taxation.
1.3 Where the context admits, `COMPANY' includes each Group
Company, so that this Deed shall apply to each Group Company as
if it were the Company, and the covenants given by the
Covenantors are expressly given to each Group Company and may
be enforced against the Covenantors by each and every Group
Company acting jointly or severally.
1.4 `RELIEF' includes any relief, allowance, exemption, set-off or
deduction in computing or against profits, income or gains of
any description or from any source, or credit against Taxation.
1.5 `LIABILITY TO TAXATION' means:
(a) any liability to make a payment in respect of
Taxation; and
(b) the use or set-off of any Relief in
circumstances where but for such use or set-
off, the Company would have had an actual
liability to tax in respect of which the
Purchaser would have been able to make a claim
against the Covenantors under this Deed (the
amount of the tax liability for these purposes
being deemed to be equal to the amount of that
actual liability to tax);
1.6 `CLAIM FOR TAXATION' includes any notice, demand, assessment,
letter or other document issues, or action taken, by or on
behalf of the Inland Revenue or Customs and Excise authorities
or any other statutory or governmental authority or body
whatsoever in any part of the world, whereby it appears that
the Company is subject to a liability to Taxation (whether or
not it is primarily payable by the Company and whether or not
the Company has or may have any right of reimbursement).
2 Indemnity
2.1 The Covenantors jointly and severally covenant with the
Purchaser (for itself and as trustee for its successors in
title) to pay the Purchaser an amount equivalent to:
2.1.1 any Liability to Taxation arising in respect
of, by reference to or in consequence of:
(a) any income profits or gains earned accrued or
received on or before Completion; and
(b) any event which occurs or occurred on or before
Completion;
2.1.2 any costs incurred by the Purchaser or the
Company in relation to any demands, actions,
proceedings and claims in respect of
Liabilities to Taxation or Claims for Taxation.
63
2.2 In respect of any payment due from the Covenantors under clause
2.1 the Purchaser may if it is satisfied that it will be or has
been subject to a Liability to Taxation calculate and demand in
writing from the Covenantors from time to time such additional
amount as will ensure that the total amount paid by the
Covenants, less the tax chargeable on this amount, is equal to
the amount that would otherwise be payable under this Deed.
3 Exclusions
3.1 The indemnity in clause 2.1 shall not apply to any Liability to
Taxation or Claim for Taxation:
3.1.1 to the extent that an appropriate provision or
reserve was made in the Principal Accounts (as
such may have been modified or amended by the
Management Accounts); or
3.1.2 for which the Company is or may become liable
wholly or primarily as a result of transactions
in the ordinary course of its business after
the Last Accounts Date; or
3.1.3 to the extent that the Liability or Claim
arises as a result only of the appropriate
provision or reserve in the Principal Accounts
(as such may have been modified or amended by
the Management Accounts) being insufficient by
reason of any increase in rates of Taxation
made after the date of the Agreement with
retrospective effect or of any change in law
SSAPs, or FRSs which is announced and comes
into force after the date of this Agreement
with retrospective effect; or
3.1.4 to the extent that liability is excluded or
limited under the provisions of Schedule 7 to
the Agreement.
3.1.5 where the Liability to Taxation is suffered by
the Company in respect of a Liability to
Taxation of another Company and such latter
Liability to Taxation would not be or have been
subject to a claim under this Deed
3.1.6 to the extent that it has been made good or
otherwise compensated at no expense to the
Purchaser or the Company
3.1.7 which is attributable to the Company ceasing to
be entitled to the Small Companies' rate of
corporation tax
64
3.1.8 to the extent that it would not have arisen but
for the fact that the treatment of any assets
or liabilities, or Taxation attributable to
timing differences in future accounts of the
Company, is different from the treatment in the
Principal Accounts, except where such
difference arises because the Company is
required by law or compliance with SSAPs to
alter its accounting policy
3.1.9 which would not have arisen but for a voluntary
act, omission or transaction of the Company or
the Purchaser carried out or occurring after
the date of this Deed otherwise than in the
normal course of business (unless pursuant to
an obligation incurred prior to the date of
this Deed or taking place with the approval of
all or any of the Covenantors) and which the
Purchaser or the Company was, or ought
reasonably to have been, aware could give rise
to a Liability to Taxation]
3.1.10 to the extent that it corresponds to an
increase in the value of the assets of any
other Company, resulting from a reduction in
its Liability to Taxation
3.1.11 where a Claim for Taxation would not have
arisen but for any change in the accounting
policy or practice of the Purchaser or the
Company introduced or having effect after the
Last Accounts Date except where such change in
accounting policy or practice is required by
law or compliance with SSAPs.
3.1.12 to the extent that the amount by which any
Liability to Taxation for which the Company is
or may be liable to be assessed or accountable
is reduced or extinguished as a result of the
matter giving rise to such claim
3.1.13 if the Purchaser or the Company fails after due
warning to comply with its obligations
contained in paragraph 5 hereof
4 Withholdings
4.1 All sums payable by the Covenantors under this Deed shall be
paid free and clear of all deductions or withholdings unless
the deduction or withholding is required by law, in which event
the Covenantors shall pay such additional amount as shall be
required to ensure that the net amount received by the
Purchaser under this Deed will equal the full amount which
would have been received, had no such deduction or withholding
been required to be made.
4.2 If the Covenantors are required to make any deduction or
withholding as contemplated in clause 4.1 above, they shall
deliver to the Purchaser within 30
65
days after it has made such payment evidence reasonably
satisfactory to the Purchaser that such payment or deduction
has been made and has been or will be accounted for to the
relevant authorities.
4.3 Following receipt of the payment evidence referred to in clause
4.2 above, the Purchaser shall as soon as practicable apply for
any credit or repayment to which it may be entitled. Following
the receipt of any such credit or repayment by the Purchaser,
the Purchaser shall pay such amount to the Covenantors as shall
ensure that the Purchaser is in the same position after making
such payment as if no such deduction or withholding had been
made.
5 Conduct of claims
5.1 The Purchaser or the Company shall notify the Covenantors in
writing within not less than 5 working days of any Claim for
Taxation relevant for the purposes of this Deed, and shall
subject as herein provided take such action as the Covenantors
may reasonably request to dispute, resist appeal or defend the
Claim for Taxation. As soon as practicable after such request
the Purchaser and the Company shall be indemnified and secured
to its reasonable satisfaction by the Covenantors against all
losses, costs, damages, and expenses that are or may be thereby
incurred.
5.2 If the Covenantors do not request the Purchaser or the Company
to take any appropriate action within one month of the notice
to the Covenantors, the Purchaser or the Company shall be free
to satisfy or settle the relevant Claim for Taxation on such
terms as it may in its absolute discretion think fit.
5.3 Subject to Clause 5.2 the Purchaser and the Company shall
ensure that the Covenantors are placed in a position to dispute
on behalf of the Company, any claim for Taxation and shall
render, or cause to be rendered, to the Covenantors, at the
expense of the Covenantors such assistance as the Covenantors,
or a majority of them, may reasonably require in disputing any
Claim for Taxation.
5.4 Subject as aforesaid, the Covenantors shall be entitled on
behalf of the Company, to instruct such solicitors or other
professional advisors as the Covenantors, or a majority of
them, may nominate, to act on behalf of the Covenantors of the
Company to the intent that the conduct and costs and expenses
of the dispute shall be delegated entirely to and be borne
solely by the Covenantors.
5.5 The Company shall permit the Covenantors and their advisors to
have reasonable access to its records and the reasonable
assistance of its employees to enable the Covenantors to carry
out the conduct of disputes in accordance with the foregoing
provisions of this Clause.
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5.6 In connection with the conduct of any dispute relating to a
Claim for Taxation (to which Clause 5.1 applies):
5.6.1 each party shall keep the other parties hereto
fully informed of all relevant matters and the
Covenantors, the Purchaser or the Company as
the case may be, shall promptly forward, or
procure to be forwarded, to the Covenantors,
the Purchaser and the Company as the case may
be, copies of all correspondence and other
written communications pertaining to it;
5.6.2 the appointment of solicitors and other
professional advisors shall be subject to the
approval of the Purchaser and the Company,
which shall not be unreasonably withheld or
delayed;
5.6.3 the Covenantors shall make no settlement or
compromise of the dispute, nor agree any matter
in its conduct which is likely to affect the
amount of the resulting Liability to Taxation,
without the prior written approval of both the
Purchaser and the Company, which shall not be
unreasonably withheld or delayed;
5.6.4 if any dispute arises between the Purchaser or
the Company and the Covenantors as to whether
any Claim for Taxation or Liability to Taxation
should at any time be settled in full, or
contested in whole or in part, the dispute
shall be referred to the determination of a
senior tax counsel, of at least ten years,
standing, appointed by agreement between the
Purchaser, the Company and the Covenantors, or
(if they do not agree) upon the application by
any party to the President for the time being
of the Law Society, whose determination shall
be final. The counsel shall be asked to advise
whether, in his opinion, an appeal against the
Claim or Liability would, on the balance of
probabilities, be likely to succeed and as to
how the costs of the dispute should be
allocated between the Covenantors and the
Company. Only if his opinion is in the
affirmative shall an appeal be made and that
Claim or Liability not then settled. Any
further dispute arising between the
Covenantors, the Company and the Purchaser 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.
6 Dates for and quantum of payments
6.1 The Covenantors shall pay to the Purchaser any amounts payable
under this Deed on or before the date which is the later of the
date which is ten business
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days after demand is made therefore by or on behalf of the
claimant and the fifth business day before the first date on
which the tax becomes recoverable by the relevant tax
authority.
6.2 Where a claim under this Deed relates to the use or set-off of
any Relief, the Covenantors shall pay to the Purchaser the
amount due under this Deed in respect thereof on the later of
the date which is five business days before the first date on
which tax which would not have been payable but for such use or
set-off becomes recoverable by the relevant tax authority and
ten business days after demand is made therefor by or on behalf
of the claimant.
6.3 Any sum not paid by the Covenantors on the due date for payment
specified in this clause 5 shall bear interest (which shall
accrue from day to day after as well as before any judgement
for same) at the rate of 3 percent per annum over the base rate
of Midland Bank plc, from the due date to and including the day
of actual payment of such sum, compounded quarterly. Such
interest shall be paid on the demand of the Purchaser.
6.4 The Purchaser shall make a repayment to the Covenantors
(together with any interest paid by the relevant taxation
authority) to the extent that and on the date on which the
Company receives any repayment of any amount paid in respect of
any Liability to Taxation pursuant to clause 6.1. Any repayment
to the Covenantors pursuant to this clause 6.4 shall not
prejudice the right of the Purchaser to recover from the
Covenantors under this Deed in the event that a further
Liability to Taxation arises, whether in respect of matters to
which the repayment relates or otherwise.
6.5 For the purposes of Clause 6.4:
6.5.1 the Company shall be deemed to receive a
repayment on the date on which the Company
receives a repayment of Taxation or if and when
the Company would have received the repayment
but for a Liability to Taxation in respect of
which the Company is not entitled to be
indemnified under this Deed of if and when the
Company would have received the repayment had
the Liability to Taxation been discharged by a
payment of Taxation or if and when the Company
is able to obtain the benefit of the reduction
in its Liability to Taxation as a result of the
right to repayment;
6.5.2 The interest shall be deemed to have been paid
to the extent that any repayment is deemed to
have been received by the Company and where a
payment has been made by the Covenantors in
circumstances that no corresponding payment has
been made by the Company to the relevant
taxation authority the amount of interest shall
be deemed to be equal to the amount of interest
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which would have been earned on an equal amount
to the repayment, had it been placed on a 7 day
deposit with a clearing bank, for a period
commencing on the date which is the day after
which the payment was received by the Purchaser
from the Covenantors and ending on the day
which is 7 days before the Company receives the
payment.
6.6 Any dispute in relation to the provisions of clauses 6.2, 6.3,
6.4 or 6.5 may be referred, by the Purchaser, the Company or
the Covenantors, to the auditors for the time being of the
Company, acting as experts and not as arbitrators, whose
certificate shall be final and binding upon the parties in the
absence of manifest error.
7. Illegality
If at any time any provision under the Deed is or becomes
illegal, invalid or unenforceable in any respect under the law
of any jurisdiction, neither the legality, validity or
enforceability of the remaining provisions hereof nor the
legality, validity or enforceability of such provision under
the law of any other jurisdiction shall in any way be affected
or impaired thereby.
8. Assignment
The whole or any part of the benefit of this Deed may be
assigned by the Purchaser to the intent that the indemnity
given under this Deed shall ensure for the benefit of their
successors and assigns provided always that any such assignee
acknowledges acceptance of the limitations on the covenantor's
liability in respect of indemnity.
9. Counterparts
This Deed may be executed in any number of counterparts and by
the parties to and on separate counterparts, each of which,
when executed and delivered shall be an original but all the
counterparts together shall constitute one and the same
instrument.
10. General
10.1 The Company shall procure that each other Group Company
performs its obligations under this deed.
10.2 This deed shall be binding on the Covenantors and their
respective successors and personal representatives.
10.3 The provisions of the Agreement relating to notices shall apply
to any notice to be given under, or in connection with, this
Deed.
10.4 The construction, validity and performance of this deed shall
be governed by the laws of England.
IN WITNESS whereof this Deed has been executed the day and year first before
written.
EXECUTED as a DEED and )
delivered by )
Xxxxx Xxxxxxx Xxxxxxx Xxxxx )
in the presence of:-
witness signature:
witness name:
witness address:
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EXECUTED as a DEED and )
delivered by )
Xxxxx Xxxxxx Weavers )
in the presence of:-
witness signature:
witness name:
witness address:
EXECUTED as a )
DEED and )
delivered by )
Xxxxxxxxxxx Xxxxxx Xxxxxxx Marke )
in the presence of:-
witness signature:
witness name:
witness address:
EXECUTED as a )
DEED and )
delivered by )
Xxxxxx Xxxxx Xxxxxx )
in the presence of:-
witness signature:
witness name:
witness address:
EXECUTED as a )
DEED and )
delivered by )
Xxxxx Xxxxxxxx Xxxxxx )
in the presence of:-
witness signature:
witness name:
witness address:
70
EXECUTED as a DEED )
by PGI ACQUISITION )
COMPANY E and DELIVERED )
by (Officer) )
and (Officer) )
71
THE SCHEDULE
Names and addresses of Covenantors
Xxxxx Xxxxxxx Xxxxxxx Xxxxx, Xxxxxxxx, 00 Xxxxxxxx Xxxxxx, Xxxxxx XX00 0XX;
Xxxxx Xxxxxx Weavers, Dragons, St Xxxxxxx Xxxx, Hurstpierpoint, West Sussex;
Xxxxxxxxxxx Xxxxxx Xxxxxxx Marke, 0, Xxx Xxxx Xxxxxx, Xxxxx, Xxxxxx, XX00 0XX;
Xxxxxx Xxxxx Xxxxxx of Cherry Tree Cottage, Horsham Road, Holmbury, St. Xxxx,
Dorking, Surrey; Xxxxx Xxxxxxxx Xxxxxx of 00 Xxxx Xxxx, Xxxx Xxxx, Xxxxxx,
Xxxxxx XX00 0XX.
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SCHEDULE 5
Short particulars of the Property
Leasehold property and details of the lease
1 Description: Office premises at Xxxxx Xxxxx, 00 Xxxxxxxx Xxxx,
Xxx Xxxxxx, Xxxxxx.
Whether registered: No, held under a lease dated 27th September
1994 and made between
1. Sovereign Countries Limited,
2. Spearhead Exhibition Limited and
3. Spearhead Communication Limited
Rent: 53,950 p.a. subject to a review on 29th September 1999
and five yearly thereafter
To whom payable: Lessor
Term: 20 years from 29th September 1994
Covenants: normal commercial lease
73
SCHEDULE 6
Pension arrangements
1. Interpretation
In this Schedule, where the context admits:
1 `Company' means Spearhead Exhibitions Limited;
2 `Pension Scheme' means the retirement benefits scheme known as
The Spearhead Exhibitions Pension Funds which was established
by a Deed dated March 1, 1983 (or the trustees from time to
time of that scheme, as the context requires); and
3 `Relevant Employee' means any past or present employee or
officer of the Company or of any predecessor to all or part of
its business.
2. Warranties and Representations
The Warrantors hereby warrants and represents to and for the benefit of the
Purchaser as follows:
2.1 No Other Pension Arrangements
Save for the Pension Scheme the Company is not a party to nor participates in
nor contributes to any scheme, arrangement or agreement (whether legally
enforceable or not) for the provision of any pension, retirement, death,
incapacity, sickness, disability, accident or other like benefits (including the
payment of medical expenses) for any Relevant Employee or for the widow,
widower, child or dependant of any Relevant Employee.
2.2 No Assurances etc
Neither the Company nor any member of the Group:
2.2.1 has given any undertaking or assurance (whether
legally enforceable or not) to any Relevant
Employee or to any widow, widower, child or
dependant of any Relevant Employee as to the
continuance, introduction,improvement or
increase of any benefit of a kind described in
2.1 above; or
2.2.2 is paying or has in the last three years paid
any benefit of a kind described in 2.1 above to
any Relevant Employee or to any widow, widower,
child or dependant of any Relevant Employee.
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2.3 All Details Disclosed
All material details relating to the Pension Scheme have been disclosed and
include (without limitation) the following:
2.3.1 a true and complete copy of the deed or other
instrument by which the Pension Scheme was
established and all deeds and other instruments
supplemental thereto;
2.3.2 a true and complete copy of all announcements,
explanatory literature and the like of current
effect which have been issued to any Relevant
Employee in connection with the Pension Scheme;
2.3.3 a true and complete copy of the report on the
last actuarial valuation of the Pension Scheme
to be completed prior to the date of this
Agreement and of any subsequent written
recommendations of an actuarial nature;
2.3.4 a true and complete copy of the last audited
accounts of the Pension Scheme to be completed
prior to the date of this Agreement and details
of any material change in the investment policy
of the Pension Scheme since the date as at
which those accounts were made up;
2.3.5 a true and complete copy of all insurance
policies (if any) and annuity contracts (if
any) held for the purposes of the Pension
Scheme and details of any such policies and
contracts (if any) which the Pension Scheme has
agreed to effect;
2.3.6 a true and complete copy of the memorandum and
articles of association of any company which is
a trustee of the Pension Scheme and the names
and addresses of the directors and secretary of
that company;
2.3.7 the names and addressee of the trustees of the
Pension Scheme;
2.3.8 details of all amendments (if any) to the
Pension Scheme which have been announced or are
proposed but which have not yet been formally
made;
2.3.9 details of all discretionary increases (if any)
to pensions in payment or deferment under the
Pension Scheme which have been granted in the
ten years prior to the date of this Agreement
or which are under consideration;
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2.3.10 details of all discretionary practices (if any)
which may have led any person to expect
additional benefits in a given set of
circumstances (by way of example, but without
limitation, on retirement at the behest of the
Company or in the event of redundancy); and
2.3.11 details of the rate at which and basis upon
which the Company currently contributes to the
Pension Scheme, any change to that rate and/or
basis which is proposed or under consideration
and all contributions paid to the Pension
Scheme by the Company in the four years prior
to the date of this Agreement.
2.4 Benefits
All benefits which are not money purchase benefits and which are payable under
the Pension Scheme on the death of any person while in employment to which the
Pension Scheme relates are insured fully under a policy with an insurance
company of good repute and there are no grounds on which that company might
avoid liability under that policy. All other benefits payable under the Pension
Scheme are money purchase benefits. In this sub-clause 'money purchase benefits'
has the same meaning as in the Social Security Xxx 0000, section 84(1).
2.5 Augmentation
No power under the Pension Scheme has been exercised in relation to any Relevant
Employee or, since the date as at which the last actuarial valuation of the
Pension Scheme to be completed prior to the date of this Agreement was
undertaken, in respect of any other person:
2.5.1 to provide terms of membership of the Pension
Scheme (whether as to benefits or
contributions) which differ from those
generally applicable to the members of the
Pension Scheme; or
2.5.2 to provide any benefits which would not but for
the exercise of that power have been payable
under the Pension Scheme; or
2.5.3 to augment any benefits under the Pension
Scheme.
2.6 Contributions and Expenses
Contributions to the Pension Scheme are not paid in arrear and all contributions
and other amounts which have fallen due for payment have been paid punctually.
No fee, charge or expense relating to or in connection with the Pension Scheme
has been incurred but not paid. If any such fee, charge or expense has been paid
by any person other than the Pension Scheme the Pension Scheme has reimbursed
that person if and to the extent that the Pension Scheme is or may become liable
so to do.
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2.7 Company's Obligations
The Company:
2.7.1 has observed and performed those provisions of
the Pension Scheme which apply to it; and
2.7.2 may (without the consent of any person or
further payment) terminate its liability to
contribute to the Pension Scheme at any time
subject only to giving such notice (if any) as
is expressly provided for in the documentation
containing the current provisions governing the
Pension Scheme.
2.8 No Other Employer
The Company is the only employer for the time being participating in the Pension
Scheme. No other employer which has previously participated in the Pension
Scheme has any claim under the Pension Scheme and in respect of any such
employer the period of participation has been terminated and benefits have been
provided in accordance with the provisions of the Pension Scheme.
2.9 Administration
All documents and records in respect of the Pension Scheme are up to date and so
far as the Warrantors are aware complete and accurate in all respects.
2.10 Investments
None of the assets of the Pension Scheme:
2.10.1 is invested in or in any description of
employer-related investments (within the
meaning of the Social Security Xxx 0000,
section 57A); or
2.10.2 save for deposits with banks, building
societies and other financial institutions and
save for any instrument creating or
acknowledging an indebtedness listed on any
stock exchange of repute, is loaned to any
person or company; or
2.10.3 is subject to any encumbrance or agreement or
commitment to give or create any encumbrance.
2.11 No Payment to Employer
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No payment to which the Income and Corporation Taxes Xxx 0000, section 601,
applies has been made out of funds which are or have been held for the purposes
of the Pension Scheme.
2.12 Compliance
The Pension Scheme:
2.12.1 is an exempt approved scheme (within the
meaning of the Income and Corporation Taxes Xxx
0000, section 592);
2.12.2 has properly and punctually accounted to the
Inland Revenue for all and any tax for which
the Pension Scheme is liable or accountable;
2.12.3 is not liable to taxation on any income from or
capital gains on any of the funds which are or
have been held for the purposes of the Pension
Scheme; and
2.12.4 complies with and has at all times been
administered in accordance with all applicable
laws, regulations and requirements (including
those of the Board of Inland Revenue and of
trust laws.
2.13 Litigation
None of the Pension Scheme, the Company [or any member of the Vendor's group] is
engaged or involved in any proceedings which relate to or are in connection with
the Pension Scheme or the benefits thereunder and no such proceedings are
pending or threatened and so far as the Vendor is aware there are no facts
likely to give rise to any such proceedings. In this sub-clause 'proceedings'
includes any litigation or arbitration and also includes any investigation or
determination by the Pensions Ombudsman.
2.14 Indemnities
In relation to the Pension Scheme or the funds which are or have been held for
the purposes thereof neither the Company nor the trustees or administrator of
the Pension Scheme has given an indemnity or guarantee to any person (other than
in the case of the Company any general indemnity in favour of the trustees or
administrator under the documentation governing the Pension Scheme).
3 DAMAGES FOR BREACH OF PENSION WARRANTIES
In determining the damages flowing from any breach of Warranties contained in
clause 2, the Company shall be deemed to be under a liability:
78
3.1 to provide and to continue to provide any benefit of a kind
referred to in that clause which is now provided or has been
announced or is proposed; and
3.2 to maintain and to continue to maintain (without benefits being
reduced) the Pension Scheme and any other arrangements of a
kind described in that clause which are now in existence or are
proposed and any discretionary practices of a kind referred to
in that clause which have hitherto been carried on.
4 POST COMPLETION
4.1 Following Completion the Purchaser will procure that the
Company (or any other subsidiary of the Purchaser which
replaces the Company as principal employer for the purposes of
the Scheme) will not cause any of the Scheme trustees to be
removed pursuant to the powers conferred on it by Clause 16(2)
of the definitive Trust Deed dated 1st March, 1983 and that no
part of the Fund (as defined by the Scheme rules) is used or
applied by way of a loan.
4.2 The Articles of Association of the Company shall be amended
following Completion to provide that the unanimous vote of all
the directors for the time being of the Company is required
prior to any contributions to the Pension Scheme being made by
the Company.
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SCHEDULE 7
Warrantors'/Covenantors' protection provisions
(1) The liability of the Warrantors in relation to the Warranties
shall cease on the second anniversary of the date of this
Agreement and the liability of the Covenantors in relation to
the Deed of Indemnity shall cease on the seventh anniversary of
the date of this Agreement, save as regards any alleged
specific breach of which notice in writing (containing details
of the event or circumstance giving rise to the breach, the
basis upon which the Purchaser is making a claim against the
Warrantors/Covenantors (as the case may be) and the total
amount of liability which results) has been given to the
Warrantors/Covenantors (as the case may be) prior to that
anniversary.
(2) The Warrantors/Covenantors shall not be liable for any Warranty
Claim unless their aggregate liability in respect of all
Warranty Claims (or what would be their liability apart from
this paragraph) exceeds(pound)20,000, in which case the
Purchaser shall be entitled to claim the whole of any such
claims (and not just the excess).
(3) The total liability of the Warrantors/Covenantors under
Warranty Claims shall not in any event exceed(pound)5,400,000.
To the extent that it is able to do so, the Purchaser shall
exercise its right of set-off against the Loan Notes in respect
of any Warranty Claim prior to demanding payment in respect of
such Warranty Claim against the Warrantors/Covenantors (as the
case may be).
(4) The Purchaser warrants to the Warrantors/Covenantors that it is
acquiring the shares as capital assets and not as trading
stock.
(5) The Purchaser shall indemnify the Warrantors/Covenantors
against any liability to taxation arising under any of Section
191 of the Taxation of Chargeable Gains Xxx 0000, Section 132
of the Finance Xxx 0000 and Section 767A of the Taxes Act and
all connected costs, damages or expenses incurred by them or
any of them.
(6) The Purchaser shall indemnify the Vendors against any loss or
depreciation in the benefits derived or to be derived by any
one or more of the Vendors under the Pension Scheme by virtue
of such scheme ceasing to be an exempt approved scheme within
the meaning of Section 592(1) of the Taxes Act or by virtue of
Sub-sections 8(A) to 8(D) (both inclusive) of Section 592 of
the Taxes Act applying to the Pension Scheme where such loss or
depreciation occurs solely by reason of an act done by the
Company or the Purchaser.
(7) The Purchaser will not so long as any of paragraphs (3) to (6)
(inclusive) of this Schedule are applicable or capable of
taking effect cease to control any Group Company without
procuring from the person acquiring control an undertaking in
favour of the Vendors, the Warrantors and the Covenantors (as
appropriate) to be bound by such provisions so far as they
affect that Group Company, to same extent as the Purchaser is
bound.
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