Exhibit 2.1
DATED 13 MARCH 1998
(1) BIG FLOWER DIGITAL SERVICES LIMITED
- and -
(2) X X XXXX AND OTHERS
- and -
(3) TROYPEAK LIMITED AND PISMO LIMITED
- and -
(4) J. XXXXXX XXXXXXXX GROUP LIMITED
---------------------------------------------
AGREEMENT
for the sale and purchase of all of the
issued shares of Troypeak Limited and Pismo
Limited
---------------------------------------------
ASHURST XXXXXX XXXXX
Xxxxxxxxx Xxxxx
0 Xxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Tel: 0000-000 0000
Fax: 0000-000 0000
XXX/CXG/000X00000
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CONTENTS
CLAUSE
PAGE
1. INTERPRETATION..........................................................1
2. SALE AND PURCHASE.......................................................5
3. COMPLETION.............................................................13
4. VENDORS' WARRANTIES AND INDEMNITIES....................................16
5. PURCHASER'S WARRANTIES.................................................20
6. PROTECTION OF GOODWILL.................................................20
7. CONFIDENTIAL INFORMATION...............................................22
8. ANNOUNCEMENTS..........................................................23
9. COSTS..................................................................23
10. EFFECT OF COMPLETION..................................................23
11. FURTHER ASSURANCES....................................................24
12. ENTIRE AGREEMENT......................................................24
13. VARIATIONS............................................................25
14. WAIVER................................................................25
15. INVALIDITY............................................................25
16. NOTICES...............................................................25
17. COUNTERPARTS..........................................................27
18. GOVERNING LAW AND JURISDICTION........................................27
19. ASSIGNMENT............................................................27
SCHEDULE 1................................................................28
The Vendors...............................................................28
SCHEDULE 2................................................................31
Particulars relating the Companies........................................31
SCHEDULE 3................................................................34
Part I....................................................................34
Particulars relating to the Troypeak Subsidiaries.........................34
Part II...................................................................36
Particulars relating to the Pismo Subsidiaries............................36
SCHEDULE 4................................................................40
[Deleted].................................................................40
SCHEDULE 5................................................................41
The Warranties............................................................41
SCHEDULE 6.................................................................1
Limitations on Warrantors' Liability.......................................1
SCHEDULE 7......................................Error! Bookmark not defined.
Tax Deeds.......................................Error! Bookmark not defined.
SCHEDULE 8......................................Error! Bookmark not defined.
The Properties..................................Error! Bookmark not defined.
SCHEDULE 9......................................Error! Bookmark not defined.
Service Contracts...............................Error! Bookmark not defined.
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THIS AGREEMENT is made on 13 March 1998
BETWEEN:-
(1) BIG FLOWER DIGITAL SERVICES LIMITED (No. 3526757) whose registered
office is at Xxxxxxxxx Xxxxx, 0 Xxxxxx Xxxxxx, Xxxxxx XX0X 0XX (the
"PURCHASER");
(2) The persons whose names and addresses are set out in column 1 of
schedule 1 (together the "VENDORS");
(3) TROYPEAK LIMITED ("TROYPEAK") (No. 3030868) whose registered office is
at X.X. Xxx 00, Xxxxx Xxxxx, Xxxxxxx, Xxxx X00 X0XX and PISMO LIMITED
("PISMO") (No. 2685981) whose registered office is at 00/00 Xxxx Xxxxxx,
Xxxxxx X0X 0XX (together, the "COMPANIES"); and
(4) J. XXXXXX XXXXXXXX GROUP LIMITED ("JWT") (No. 1660783) whose registered
office is at 00, Xxxxxxxx Xxxxxx, Xxxxxx X0X 0XX.
THE PARTIES AGREE AS FOLLOWS:-
1. INTERPRETATION
1.1 In this agreement the following words and expressions and abbreviations
have the following meanings, unless the context otherwise requires:-
"ACCOUNTS DATE" means 30 September 1997 for Troypeak and its Subsidiaries and 31
March 1997 for Pismo;
"ASSOCIATED COMPANY" has the meaning given to it in sections 416 et seq. TA;
"BBH" means BBH Communications Limited (No. 2352341);
"BUSINESS DAY" means a day (excluding Saturdays) on which banks generally are
open in London for the transaction of normal banking business;
"COMPLETION" means the completion of the sale and purchase of the Shares in
accordance with clause 3;
"COMPLETION DATE" means the date hereof;
"CONFIDENTIAL INFORMATION" means all information relating to any Group Company's
business, or financial or other affairs (including future plans and
targets of any Group Company) which is not in the public domain;
"DISCLOSURE LETTERS" means the respective letters of today's date together with
the attachments thereto addressed by the Troypeak Vendors except NatWest
to the
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Purchaser and by the Pismo Vendors to the Purchaser, disclosing
exceptions to the Warranties;
"ENCUMBRANCE" means any mortgage, charge (fixed or floating), pledge, lien,
hypothecation, trust, right of set off or other third party right or
interest (legal or equitable) including any right of pre-emption,
assignment by way of security, reservation of title or any other
security interest of any kind however created or arising or any other
agreement or arrangement (including a sale and repurchase arrangement)
having similar effect;
"GROUP" means, in relation to Troypeak, Troypeak and the Troypeak Subsidiaries
and, in relation to Pismo, means Pismo and the Pismo Subsidiaries and
"GROUP COMPANY" shall be construed accordingly;
"LOAN NOTE INSTRUMENT" means the instrument in agreed terms constituting Loan
Notes, made by the Purchaser and dated the same as this agreement;
"LOAN NOTES" means the redeemable unsecured loan notes to be issued pursuant
to the Loan Note Instrument;
"INTELLECTUAL PROPERTY" means any and all patents, trade marks, rights in
designs, get-up, trade, business or domain names, copyrights, and
topography rights, (whether registered or not and any applications to
register or rights to apply for registration of any of the foregoing),
rights in inventions, know how, trade secrets and other confidential
information, rights in databases and all other intellectual property
rights of a similar or corresponding character which may now or in the
future subsist in any part of the world;
"LONDON STOCK EXCHANGE" means the London Stock Exchange Limited;
"NATWEST" means NatWest Ventures Investments Limited (No. 2106408);
"PERMIT"means a permit, licence, consent, approval, certificate, qualification,
specification, registration and other authorisation and a filing of a
notification report or assessment necessary in any jurisdiction for the
proper and efficient operation of each Group Company's business, its
ownership, possession, occupation or use of an asset or the execution
and performance of this agreement;
"PISMO SUBSIDIARIES" means Matelot Productions Limited and Flitclaim Limited
(proposed to be renamed The Watershed Limited), further details of which
are set out in schedule 3;
"PISMO VENDORS" means those persons listed in part II of schedule 1;
"PROPERTIES" means the properties described in schedule 8 or any part or parts
thereof and "PROPERTY" shall mean any one of them;
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"PURCHASER'S GROUP" means the Purchaser, its holding companies and the
subsidiary undertakings from time to time of it (including Pismo, the
Pismo Group, Troypeak and the Troypeak Group) and of such holding
companies, all of them and each of them as the context admits;
"PURCHASER'S SOLICITORS" means Ashurst Xxxxxx Xxxxx of Xxxxxxxxx Xxxxx, 0 Xxxxxx
Xxxxxx, Xxxxxx XX0X 0XX;
"QUEEN'S COUNSEL" means a Queen's Counsel experienced in advising on warranty
claims who has not previously advised the Purchaser in relation to the
relevant claim and whose identity is approved by the Vendors'
Solicitors, provided that, if neither approval nor objection has been
received within seven days of a request for approval, such approval
shall be deemed to have been given and provided further that if an
objection is made within such seven day period, the Purchaser may
instruct another Queen's Counsel experienced in advising on warranty
claims who has not previously advised the Purchaser in relation to that
claim, without the approval of the Vendors' Solicitors;
"RELATED PERSON" means in relation to any party its holding companies and the
subsidiary undertakings and associated companies from time to time of it
and any such holding company, all of them and each of them as the
context admits;
"SERVICE AGREEMENTS" means service agreements to be entered into on Completion
between Production Response Limited and Pismo Limited and the persons
named in clause 3.2(i) respectively in the form set out in schedule 9;
"SHARES" means all of the issued shares in the capital of Troypeak or of Pismo,
as the case may be;
"SUBSIDIARY" means a subsidiary undertaking of Troypeak or Pismo specified in
schedule 3 and "SUBSIDIARIES" means all those subsidiary undertakings;
"TA" means the Income and Corporation Taxes Xxx 0000;
"TAX DEEDS" means the deeds of indemnity in the form set out in schedule 7;
"TROYPEAK VENDORS" means those persons listed in part I of schedule 1;
"TROYPEAK SUBSIDIARIES" means Production Response Limited and Xxxx Studio
Limited, further details of which are set out in schedule 3;
"VENDORS' SOLICITORS" means Edge & Xxxxxxx of 00, Xxxxxxxxxxx Xxxxx, Xxxxxx XX0X
0XX;
"WARRANTIES" means the warranties and representations set out in schedule 5;
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"WARRANTORS" means all of the Troypeak Vendors except NatWest (in relation to
Troypeak and the Subsidiaries) and all of the Pismo Vendors (in relation
to Pismo);
"WARRANTORS' SOLICITORS" means Edge & Xxxxxxx of 00, Xxxxxxxxxxx Xxxxx, Xxxxxx
XX0X 0XX;
"WPP" means WPP Group plc (No. 1003653).
1.2 In this agreement unless otherwise specified, reference to:-
(a) a "SUBSIDIARY UNDERTAKING" is to be construed in accordance with
section 258 of the Companies Xxx 0000 and a "SUBSIDIARY" or
"HOLDING COMPANY" is to be construed in accordance with section
736 of that Act;
(b) a document in the "AGREED TERMS" is a reference to that document
in the form approved and for the purposes of identification
signed by or on behalf of each party;
(c) "FA" followed by a stated year means the Finance Act of that
year;
(d) "INCLUDES" and "INCLUDING" shall mean including without
limitation;
(e) a "PARTY" means a party to this agreement and includes its
assignees (if any) and/or the successors in title to
substantially the whole of its undertaking [and, in the case of
an individual, to his or her estate and personal
representatives];
(f) a "PERSON" includes any person, individual, company, firm,
corporation, government, state or agency of a state or any
undertaking (whether or not having separate legal personality and
irrespective of the jurisdiction in or under the law of which it
was incorporated or exists);
(g) a "STATUTE" or "STATUTORY INSTRUMENT" or "ACCOUNTING STANDARD" or
any of their provisions is to be construed as a reference to that
statute or statutory instrument or accounting standard or such
provision as the same may have been amended or re-enacted before
the date of this agreement;
(h) "CLAUSES", "PARAGRAPHS" or "SCHEDULES" are to clauses and
paragraphs of and schedules to this agreement;
(i) "WRITING" includes any methods of representing words in a legible
form other than writing on an electronic or visual display screen
or in other non-transitory form;
(j) words denoting the singular shall include the plural and vice
versa and words denoting any gender shall include all genders;
and
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(k) any statute, statutory instrument, regulation, by-law or other
requirement of English law and to any English legal term for any
action, remedy, method of judicial proceeding, legal document,
legal status, procedure, court, official or any legal concept or
doctrine or other expression shall in respect of any jurisdiction
other than England be deemed to include that which most nearly
approximates in that jurisdiction to the English term.
1.3 The schedules form part of the operative provisions of this agreement
and references to this agreement shall, unless the context otherwise
requires, include references to the schedules.
1.4 The index to and the headings and the descriptive notes in brackets
relating to provisions of taxation statutes in this agreement are for
information only and are to be ignored in construing the same.
1.5 The obligations and liabilities of the Troypeak Vendors, except NatWest,
under this agreement shall be joint and several and the obligations and
liabilities of the Pismo Vendors under this agreement shall be joint and
several save where otherwise stated PROVIDED that where any obligation
in this agreement is expressed to be an obligation of the Vendors, then
no Troypeak Vendor shall be liable in respect of any breach by a Pismo
Vendor and vice versa.
1.6 Any question of whether a person is connected with another shall be
determined in accordance with section 839 of the TA (except that in
construing section 839 "CONTROL" has the meaning given by section 840 or
section 416 of the TA so that there is control whenever section 840 or
416 requires) which shall apply in relation to this agreement as it
applies in relation to the TA.
2. SALE AND PURCHASE
2.1 Upon the terms and subject to the conditions of this agreement, the
Troypeak Vendors shall sell and the Purchaser shall purchase the numbers
of Shares in Troypeak of which each of the Troypeak Vendors is the
registered holder and beneficial owner being set out opposite each of
the Troypeak Vendors' names in column 2 of part I of schedule 1, and the
Pismo Vendors shall sell and the Purchaser shall purchase the numbers of
shares in Pismo of which each of the Pismo Vendors is the registered
holder and beneficial owner being set out opposite each of the Pismo
Vendors' names in column 2 of part II of schedule 1 (in each case) with
effect from the commencement of business on the Completion Date.
Each Vendor hereby represents, warrants, covenants and undertakes with the
Purchaser as follows:-
(a) that he has the right to dispose of the Shares which he is
purporting to sell; and
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(b) that the Shares he is selling are sold free from any Encumbrance
and together with all rights now or hereafter attaching thereto,
including the right to all dividends and other distributions (if
any) declared, made or paid after the Accounts Date other than
total dividends of (pound)1,112,000 to the shareholders of Pismo.
2.2 The Vendors waive or agree to procure the waiver of any rights or
restrictions conferred upon any of them or any other person which may
exist in relation to the transfer of Shares under the articles of
association of the Companies or otherwise.
The Purchaser shall not be obliged to complete the purchase of any of the
Shares unless the Vendors complete the sale of all of the Shares
simultaneously, but completion of the purchase of some Shares shall not
affect the rights of the Purchaser with respect to its rights to the
other Shares.
2.3 Subject to clause 2.5 the consideration for such sale and purchase of
shares in Troypeak shall be (pound)6,652,750 and for such sale and
purchase of shares in Pismo shall be (pound)6,934,050 to be apportioned
amongst the Vendors as shown in column 3 of Part I and II of schedule 1.
2.4 The consideration for such sale shall be satisfied at Completion by the
payment in cash to the Vendors' Solicitors on behalf of the Vendors of
the amounts set out opposite their respective names in column 3 of
schedule 1.
2.5 (a) In this clause and clause 2.6:
"ACCOUNTS" means financial statements of Pismo and of Troypeak and of
any subsidiary undertaking of either of them at the end of the relevant
financial year, comprising the balance sheets, profit and loss accounts
together with the notes thereon as at and for the financial period
specified;
"1997 ACCOUNTS" means the audited accounts of Pismo and of Troypeak and
the Subsidiaries as at and for the financial period ended on the 1997
Accounts Date together with the cash flow statements, the directors'
report and auditors' report;
"1998 ACCOUNTS" means the Accounts as at and for the financial period
commencing 1 January 1998 and ending 31 December 1998 prepared in
accordance with clause 2.6;
"1999 ACCOUNTS" means the Accounts as at and for the financial period
commencing 1 January 1999 and ending 31 December 1999 prepared in
accordance with clause 2.6;
"2000 ACCOUNTS" means the Accounts as at and for the financial period
commencing 1 January 2000 and ending 31 December 2000 prepared in
accordance with clause 2.6;
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"1997 ACCOUNTS DATE" means 31 March 1997 in the case of Pismo and 30
September 1997 in the case of Troypeak and the Troypeak Subsidiaries;
"ADJUSTMENT ACCOUNTS" means one or more than one or all of the 1998 1999
and 2000 Accounts (as the context may require);
"ADJUSTMENT PAYMENT DATE" means the date set out for payment of the
Adjustment Payment in clause 2;
"ADJUSTMENT PAYMENT" means the sums payable pursuant to clause 2.5(b);
"ADJUSTMENT VENDORS" means the Troypeak Vendors (except NatWest) and the
Pismo Vendors (except BBH and WPP)
"AGREED RATE" means the base rate from time to time of National
Westminster Bank plc
"AUDITORS" means Coopers & Xxxxxxx;
"PRE-TAX PROFITS" means the profit on ordinary activities before
taxation of each of Pismo, Troypeak and their subsidiary undertakings
(excluding extraordinary or exceptional profits and losses and profits
and losses of a capital nature) for the financial period in question as
drawn from the relevant Adjustment Accounts:-
(i) before crediting interest receivable and similar income,
income from shares in group undertakings, and income from
fixed asset investments (not being participating
interests);
(ii) before deducting interest payable and similar charges;
(iii) before deducting Taxation;
(iv) after adding back any charge for depreciation of goodwill
(whether or not arising on consolidation or combination);
(v) after adding back any charge for the costs of the Auditors
in respect of their work under paragraph 2.6(b) or of the
Auditors or any valuers in respect of the statutory audit
of the Troypeak Group for the period ended 31 December
1997;
(vi) before taking into account (whether by way of a deduction,
provision or otherwise) to the extent that the same shall
have been satisfied, any matter giving rise to a claim
which shall be made under the Warranties or clause 4.11,
provided that any such matter is of a non-recurring
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nature which does not have a lasting effect on the profit
potential to the Group;
(vii) after making such adjustment as is fair and reasonable to
reflect any relevant non arm's length transaction affecting
Pismo, Troypeak and their subsidiary undertakings which
would not have occurred had such companies not been in the
Purchaser's Group or any change in accounting policies and
bases from those adopted in the 1997 Accounts and after
making such deduction as is fair and reasonable to take
account of any sums paid from the Production Response
Limited Employee Benefit Trust to employees, insofar as
bonuses or other remuneration which would otherwise have
become payable to them by the Group are not (as a result of
the payment by such trust) so payable by the Group (taking
into account past policies and practices of the Group);
and combined by applying normal principles of consolidation as if all
the said companies formed a group (less any such Pre Tax Profits as is
attributable to minority interests) and agreed or determined as such
pursuant to clause 2.6;
"1998 PRE-TAX PROFITS" means the Pre-Tax Profits in respect of the
financial period commencing 1 January 1998 and ending 31 December 1998;
"1999 PRE-TAX PROFITS" means the Pre-Tax Profits in respect of the
financial period ending 31 December 1999;
"2000 PRE-TAX PROFITS" means the Pre-Tax Profits in respect of the
financial period ending 31 December 2000;
"3 YEAR PROFITS" means the sum (treating losses as a negative amount) of
the 1998 Pre-Tax Profits, the 1999 Pre-Tax Profits and the 2000 Pre-Tax
Profits;
"VENDORS' ACCOUNT" means the account of the Vendors' Solicitors referred
to in clause 3.5(a);
"VENDORS' REPRESENTATIVE" means either XX Xxxx or XX Xxxxxx and A Tout
or such other person(s) as may be appointed from time to time by service
of a notice in writing on the Purchaser specifying such other person(s)
duly signed by persons who are entitled to a majority of the Adjustment
Payment.
(b) The consideration for the Shares sold by each Adjustment Vendor
shall:
(i) be increased by his percentage of(pound)4,138,000 if the 3
Year Profits are greater than or equal to(pound)X;
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(ii) be increased by his percentage of the sum of (i)
(pound)880,000 and (ii) [(pound)4,138,000 minus
3 YEAR PROFITS - Y
(pound)880,000] multiplied by ------------------
X - Y
if the 3 Year Profits are greater than or equal to (pound)Y
but less Than (pound)X;
(iii) be further increased (in addition to the increase in (i)
above) by his percentage of 16.7 per cent of (3 year Profits
- X) if the 3 Year Profits are greater than (pound)X provided
that the maximum increase under this paragraph (iii) shall be
his percentage of (pound)450,000;
(iv) not be increased at all (or decreased) if the 3 Year Profits
are less than (pound)Y;
PROVIDED that none of the increases set out above will be applicable to
any Adjustment Vendor ("a Departing Vendor") who has ceased to be
employed by Pismo, Troypeak or any subsidiary undertaking of either of
them prior to 31 December 2000, unless that cessation is as a result of
his death, ill health, injury, disability or wrongful dismissal or
termination by due notice by the employing company other than in
circumstances justifying summary dismissal or termination.
One half of the entitlement of any Departing Vendor who has ceased to
have a right to receive any part of the Adjustment Payment will be paid
to the other Adjustment Vendors who have not become Departing Vendors at
the same time and in the same manner as the Adjustment Payment due to
them, apportioned pro rata to the Adjustment Payment which they would
have received ignoring this paragraph.
References to X are to (pound)8,795,000 and to Y are to
(pound)7,745,000.
References above to "his percentage" are to the percentages shown in
column (4) of Parts I and II of Schedule 1.
The figures of X and Y will be amended as agreed between the Purchaser
and the Adjustment Vendors in the event that Pismo or Troypeak acquire
any business or shares in a company after the date hereof, such
amendment to be agreed prior to Pismo or Troypeak making any such
acquisition but so that if no agreement can be reached no amendment will
be made to such figures and the business or company so acquired will be
excluded in calculating the 3 Year Profits.
(c) Any amounts payable pursuant to clause 2.5(b) shall be paid
within five Business Days after the date on which the 3 Year
Profits shall be agreed or determined pursuant to clause 2.6 and
shall be satisfied by the allotment by the Purchaser of such
nominal amount of Loan Notes (to be constituted by an instrument
in the form of the draft in the agreed terms) as equals the
Adjustment Payment to which the relevant Adjustment Vendor would
have been entitled had the Adjustment Payment been satisfied in
cash.
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(d) The Vendors' Representative is irrevocably authorised to act on
behalf of the Vendors for the purpose of giving any consent or
approval pursuant to or approving any amendment of any of the
provisions of this agreement relating to or having a bearing on
the calculation of the amount of the Adjustment Payment or
resolving with the Purchaser any dispute as to the interpretation
of this agreement relating to or having a bearing on the same.
2.6 (a) For the purpose of determining the Pre-Tax Profits the Purchaser
shall cause the Companies and the Subsidiaries to prepare and
deliver to each party and the Auditors, as soon as practicable
following 31 December 2000, but in any event within 2 months
after such date, draft Adjustment Accounts and a draft figure of
the 3 Year Profits. The Adjustment Accounts shall be prepared in
accordance with the Companies Acts and generally accepted
accounting principles and practices in the United Kingdom which
are extant at the time of preparation including in particular
(but without limitation) the Financial Reporting Standards issued
by the ASB and Statements of Standard Accounting Practice issued
by the member bodies of the Consultative Committee of Accounting
Bodies which are extant at the time and, subject to conforming
therewith, on the same bases, adopting the same accounting
practices and using the same accounting principles as the 1997
Accounts.
(b) Immediately following preparation of the relevant draft
Adjustment Accounts by the Companies and the Subsidiaries, the
Purchaser shall instruct the Auditors to review the same and to
determine the 3 Year Profits as soon as possible and in any event
not later than 90 days after the end of the period to which the
relevant Adjustment Accounts relate. The costs of the Auditors
incurred in such review and determination of the draft 3 Year
Profits statement shall be borne by the Purchaser.
(c) Immediately following the Auditors' determination of the 3 Year
Profits and, in any event, prior to 31 March 2000 there shall be
supplied to the Purchaser and the Vendors' Representative a
statement of the 3 Year Profits determined by the Auditors
together with the draft Adjustment Accounts. The Purchaser and
the Vendors' Representative shall have a period of 30 days (the
"PROFIT AGREEMENT PERIOD") in which to review and agree or
dispute the Auditors' determination of the 3 Year Profits.
(d) In the event that the 3 Year Profits have not been agreed by the
termination of the Profit Agreement Period the determination of
the 3 Year Profits shall be referred to an independent firm of
chartered accountants (the "EXPERT") appointed by agreement by
the Vendors' Representative and Purchaser or, in default of
agreement on such appointment within ten Business Days of the
expiry of the Profit Agreement Period, on the application of
either the Purchaser or the Vendors' Representative by the
President for the time being of the Institute of Chartered
Accountants in England and Wales, or his duly appointed deputy.
In such case the Expert shall be one of Coopers & Xxxxxxx, KPMG,
Price Waterhouse, Deloitte & Touche, Ernst & Young and
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Xxxxxx Xxxxxxxx (or their successors in business) but not any of
the foregoing who in the period of 24 months prior to their
appointment have received fees exceeding(pound)10,000 from either
the Purchaser or any Adjustment Vendor unless this restriction is
waived by the party not having paid such fees. In making such
determination the Expert shall act as an expert and not as an
arbitrator and his decision shall (in the absence of manifest
error (and the Expert shall give reasons for his determination))
be final and binding on the parties. Each party shall bear the
costs and expenses of all counsel and other advisers, witnesses
and employees retained by it and the costs and expenses of the
Expert shall be borne by the parties in the proportions he may
direct or, in the absence of direction, equally. Subject to any
rule of law or of any regulatory body or any provision of any
contract or arrangement entered into prior to the date of this
agreement to the contrary, the Purchaser and the Vendors shall
afford as soon as reasonably practicable upon request to the
other and their respective agents and to the Expert all
facilities and access to, in the case of the Vendors their and in
the case of the Purchaser the Companies and Subsidiaries
premises, personal papers, books, accounts, records, returns and
other documents as may be in their or the Companies or the
Subsidiaries (as the case may be) possession or control as may be
required by the Expert to make his determination.
(e) The Adjustment Vendors shall and the Purchaser shall procure that
the Companies and Subsidiaries shall, promptly provide each
other, their respective advisers and the Auditors with all
information (in their respective possession or control) relating
to the operations of the Companies and their subsidiary
undertakings as the case may be, including access at all
reasonable times to all books and records, and all co-operation
and assistance as may be reasonably required to:-
(i) enable the production of the Adjustment Accounts; and
(ii) enable the Auditors (or any independent firm of chartered
accountants appointed pursuant to this clause) to determine
the 3 Year Profits.
(f) In the event that prior to any Adjustment Payment Date the
Purchaser shall have given notice to the Vendors' Representative
of a claim or claims under the Warranties or clause 4 of this
agreement or the Tax Deeds then the following provisions shall
apply, at the sole option of the Purchaser:-
(i) to the extent that the amount of any such claim or claims
shall have been finally determined in accordance with clause
2.6(g) but shall not have been paid by or on behalf of the
Vendors prior to the Adjustment Payment Date, the Purchaser
shall be entitled to treat its obligations hereunder to
satisfy the Adjustment Payment to the Adjustment Vendors as
being reduced by the amount in which the claim or claims have
been finally determined.
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(ii) to the extent that the amount of any such claim or claims
shall not have been finally determined, then the Purchaser
shall be entitled to set off the Purchaser's reasonable
estimate of the aggregate amounts it will recover
(disregarding, for this purpose, the provisions of Schedule 6
paragraph 2) in respect of the claim or claims aforesaid
against the Adjustment Payment. Following final determination
of the claim(s) if the amount of the set-off exceeds the
amount finally determined the excess together with interest
thereon (subject to deduction of tax if required by law) at
the Agreed Rate in respect of the period from the Adjustment
Payment Date down to the date of payment shall be payable in
the manner referred to in clause 2.5(c), within seven days of
such final determination.
All reductions set offs and payments of excess under this paragraph (f)
shall be apportioned amongst the Adjustment Vendors who held shares in
Troypeak or in Pismo as the case may be (as appropriate having regard as
to whether the relevant claim(s) was against the Troypeak Vendors
(except NatWest) or the Pismo Vendors)pro rata to their entitlements to
an Adjustment Payment.
(g) The amount of a claim shall be regarded as finally determined for
the purposes of clause 2.6(f) if either:-
(i) the Vendors' Representative and the Purchaser (or their
respective solicitors) shall so agree in writing; or
(ii) a court has awarded judgment in respect of the amount claimed
and no right of appeal lies in respect of such judgment or
the parties are debarred whether by the passage of time or
otherwise from exercising any such right of appeal.
(h) For the purposes of clause 2.6(f) only and unless otherwise
agreed by the Vendors Representative:-
(i) a claim under the Warranties or Tax Deeds shall be deemed to
have been finally determined in favour of the Adjustment
Vendors unless prior to the Adjustment Payment Date, the
Purchaser provides to the Vendors' Solicitors an opinion of
Queen's Counsel instructed by or on behalf of the Purchaser
to the effect that the Purchaser has an arguable claim for at
least the amount so claimed by the Purchaser in respect of
that claim;
(ii) any claim under the Warranties or Tax Deeds in respect of
which notice shall have been given in accordance with
paragraph 1.1 of schedule 6 shall be deemed to have been
finally determined in favour of the Adjustment Vendors if
legal proceedings in respect of such claim have
Page 18 of 92
not been issued and served not later than the expiry of the
period of six months after the date of the said notice (or 9
months after the date of the said notice, if the claim
relates to tax).
(i) For the avoidance of doubt nothing contained in clause 2.6(f)
shall prejudice the right of the Purchaser to recover against the
Vendors otherwise than pursuant to clause 2.6(f) or to make any
claim against the Vendors in respect of any breach of the
Warranties clause 4 of this agreement and/or under the Tax Deed
whether before or after the Adjustment Payment Date whether in
accordance with the procedure specified in clause 2.6(f) or
otherwise.
(j) The Purchaser shall not be entitled to set off against the
Adjustment Payment otherwise due to the Vendors pursuant to this
agreement the amount of any claims made under this agreement save
in accordance with this clause 2.6.
2.7 (a) The Purchaser acknowledges for the benefit of the Adjustment
Vendors that having regard to the manner in which the
Adjustment Payment is to be calculated the said Vendors have a
legitimate interest in ensuring that the amount of the 3 Year
Profits shall be as great as is fair and reasonable.
Accordingly, the Purchaser agrees with such Vendors that it
will in the period to 31 December 2000 (save with the written
consent of the Vendors Representative (in the case of clause
2.7(a)(ii) or 2.7(a)(iii) such consent not to be unreasonably
withheld)).
(i) refrain from any act the main or sole purpose of which is
to have a material adverse effect on the Group's ability to
achieve 3 Year Profits in excess of (pound)X;
(ii) not sell transfer or otherwise dispose of the whole or part
of the share capital of any Group Company or any interest
therein to any company which is not a member of the
Purchaser's Group (the provisions of this clause 2.7(a)(ii)
also applying to any such transferee mutatis mutandis);
(iii) procure that no Group Company shall:
(A) pass any resolution in general meeting for members'
voluntary winding up nor will steps be taken by any
member of the Purchaser's Group to make any Group
Company subject to any other insolvency proceedings;
(B) enter into any agreements to dispose of the whole or
substantially the whole of its business undertaking
or assets.
3. COMPLETION
3.1 Completion shall take place at the offices of the Purchaser's Solicitors
immediately after the execution of this agreement.
Page 19 of 92
3.2 On Completion the Troypeak Vendors and the Pismo Vendors shall
respectively deliver to or, if the Purchaser shall so agree, make
available to the Purchaser:-
(a) transfers in common form relating to all the Shares in Troypeak
and the Shares in Pismo duly executed in favour of the Purchaser
(or as it may direct);
(b) share certificates relating to the respective Shares;
(c) any waivers or consents by members of any Group Company or other
persons which the Purchaser has specified prior to Completion so
as to enable the Purchaser or its nominees to be registered as
the holders of the Shares and any shares of Subsidiaries;
(d) the written resignations of the auditors of each Group Company
containing an acknowledgement that they have no claim against any
Group Company for compensation for loss of office, professional
fees or otherwise and a statement under section 394(1) of the
Companies Xxx 0000;
(e) the common seals, certificates of incorporation and statutory
books and share certificate books of each Group Company;
(f) the Tax Deeds duly executed by the Vendors (except NatWest);
(g) all land certificates, charge certificates, leases, title deeds
and other documents relating to the Properties (except to the
extent that the same are in the possession of mortgagees pursuant
to mortgages disclosed in schedule 8);
(h) share certificates relating to all of the issued shares in the
capital of each of the Subsidiaries;
(i) the Service Agreements duly executed by Messrs. P.C. Blowes, X.X.
Xxxxx, X.X. Xxxx, X.X. Xxxxxxx, X.X. Xxxxxx, X.X. Xxxxxxx, X.X.
Xxxxx, A. Tout, X. Xxxxx, X.X. Xxxxxxxx and M.B. Xxxxxxx; and
(j) duly executed deed of waiver of dividends by NatWest in the
agreed form.
3.3 At or prior to Completion the Vendors shall procure the passing of board
resolutions of each Group Company:-
(a) sanctioning for registration (subject where necessary to due
stamping) the transfers in respect of the Shares and any shares
to which clause 3.2(k) refers;
(b) appointing such persons as the Purchaser directs to be the
directors and secretary of each Group Company;
Page 20 of 92
(c) revoking all mandates to bankers and giving authority in favour
of the directors appointed under clause 3.3(b) or such other
persons as the Purchaser may nominate to operate the bank
accounts thereof;
(d) resolving that the registered office of each Group Company be
changed as the Purchaser directs;
(e) changing the accounting reference date of each Group Company to
31 December;
(f) resolving that Production Response Limited and Pismo as the case
may be enter into the Service Agreements with the respective
persons named in clause 3.2(i).
3.4 The Vendors shall procure that at Completion:-
(a) there is repaid all sums (if any) owing to any Group Company by
any of the Vendors or any of their connected persons (other than
another Group Company) or by the directors of any Group Company
and whether or not such sums are due for repayment other than
loans to any of the Vendors for the purposes of travel season
tickets of not greater than (pound)1,500 per person, details of
which have been supplied to the Purchaser before the date of this
agreement;
(b) each Group Company is released from any guarantee, indemnity,
bond, letter of comfort or Encumbrance or other similar
obligation given or incurred by it which relates in whole or in
part to debts or other liabilities or obligations, whether actual
or contingent, of any person other than a Group Company save
for:-
(i) any obligations of Production Response Limited to Xxxxxxx
Xxxxxxxxx Xxxxxx and/or Xxxxxxx Xxxxxx in relation to the
Reacta Lease (as defined in Disclosure 4.2(c) of the
Disclosure Letter);
(ii) the indemnity given by Production Response Limited to Real
Time Studios Limited at clause 7.1 of the agreement dated 4
February 1997 between (1) Real Time Studios Limited and (2)
Production Response Limited and any obligations owed to
Messrs Xxxx and Xxxx in relation to the same property the
subject of the said indemnity (being the Store Street
premises) (as previously disclosed and annexed to the
Disclosure Letter);
and prior to such repayment or release the Vendors undertake to the
Purchaser (on behalf of themselves and as trustee on behalf of each
Group Company) to keep each Group Company fully indemnified against any
failure to make any such repayment or any
Page 21 of 92
liability arising under any such guarantee, indemnity, bond, letter of
comfort or Encumbrance.
3.5 Upon compliance by the Vendors with the provisions of clauses 3.2, 3.3
and 3.4 the Purchaser shall:-
(a) provide for the transfer by CHAPS of (pound)13,586,800 to the
Vendors' Solicitors at Barclays Bank plc, of 0-0 Xxxxxxx Xxxxxx,
Xxxxxx X0X 0XX Sort Code 20-05-75, Account No. 00000000 and
receipt by such bank of such sum shall be good discharge to the
Purchaser;
(b) deliver to the Vendors' Solicitors counterparts of the Tax Deeds
duly executed by the Purchaser; and
(c) use reasonable endeavours to procure that each Vendor is released
from the guarantees given or incurred by him relating to a debt
or liability of any Group Company as listed under the Personal
Deed of Guarantee given by the Troypeak Vendors (excluding
NatWest and X. Xxxx) to National Westminster Bank Ltd
guaranteeing the liabilities of Production Response Ltd to a
maximum of (pound)398,290;
and the Purchaser hereby undertakes to keep such Vendors indemnified in
relation to any liability that they may suffer under such guarantee with
effect from Completion.
4. VENDORS' WARRANTIES AND INDEMNITIES
4.1 (a) The Troypeak Vendors, except NatWest, warrant with and represent
to the Purchaser in the terms of the Warranties so that for the
purpose of schedule 5 "COMPANY" means Troypeak and includes the
Troypeak Subsidiaries, all of them and each of them as the
context admits and "GROUP" and "GROUP COMPANY" shall be construed
accordingly;
(b) The Pismo Vendors, except BBH and WPP, warrant with and represent
to the Purchaser in the terms of the Warranties and each of BBH
and WPP severally warrant with and represent to the Purchaser in
the terms of the Warranties in each case, so that for the purpose
of schedule 5 "COMPANY" means Pismo includes the Pismo
Subsidiaries, all of them and each of them as the context admits
and "GROUP" and "GROUP COMPANY" shall be construed accordingly.
4.2 Any information supplied by or on behalf of any Group Company to or on
behalf of the Vendors in connection with the Warranties, the Disclosure
Letter or otherwise in relation to the business and affairs of any Group
Company shall not constitute a representation or warranty or guarantee
as to the accuracy thereof by any Group Company and each of the Vendors
agrees with the Purchaser (on behalf of itself and as trustee for each
Group Company and their respective directors, employees, agents
Page 22 of 92
and advisers) that he hereby irrevocably waives all claims which he
might otherwise have against any Group Company or any of their
respective directors and employees in respect thereof and any and all
other claims in respect of any cause, matter or thing whatsoever and
hereby releases each Group Company and each such person from any
liability or obligation to him whatsoever.
4.3 (a) Without restricting the rights of the Purchaser or the ability of
the Purchaser to claim damages on any basis available to it if
any of the Vendors are in breach of any of the Warranties the
Troypeak Vendors (except NatWest) shall pay to the Purchaser on
demand the amount necessary to put Troypeak and the Troypeak
Subsidiaries into the position which would have existed if the
said Warranties had not been breached.
(b) Without restricting the rights of the Purchaser or the ability of
the Purchaser to claim damages on any basis available to it if
any of the Vendors are in breach of any of the Warranties the
Pismo Vendors shall pay to the Purchaser on demand the amount
necessary to put Pismo and the Pismo Subsidiaries into the
position which would have existed if the said Warranties had not
been breached.
4.4 Any payments made by the Warrantors to the Purchaser in respect of
claims under the Warranties or the Tax Deed shall be treated by the
parties as a reduction in the consideration for the Shares.
4.5 Each of the Warranties shall be construed as a separate warranty and
representation, and (unless expressly provided to the contrary) shall
not be limited by the terms of any of the other Warranties or by any
other term of this agreement.
4.6 The liability of the Warrantors under the Warranties shall only be
limited if and to the extent that the limitations referred to in
schedule 6 apply.
4.7 No information relating to the Group of which the Purchaser has
knowledge (actual or constructive) other than that contained in or
referred to in this agreement and/or included in the Disclosure Letter
and no investigation by or on behalf of the Purchaser shall prejudice
any claim by the Purchaser under the Warranties or reduce any amount
recoverable thereunder.
4.8 The Vendors shall use all reasonable endeavours to give to the Purchaser
all such information and documentation relating to the Group as the
Purchaser shall reasonably require to enable it to satisfy itself as to
whether there has been any breach of the Warranties.
4.9 The Troypeak Vendors (except NatWest) hereby undertake with the
Purchaser to pay from time to time to the Purchaser such sums as would
if paid to any member of the Purchaser's Group, Troypeak or to a
Troypeak Subsidiary indemnify and keep indemnified such member, Troypeak
and the Troypeak Subsidiaries against all losses, claims, costs,
charges, reasonable expenses, liabilities, actions, demands,
Page 23 of 92
proceedings and judgements whatsoever which such member, Troypeak or any
Troypeak Subsidiary may at any time suffer or incur or which may be
brought or threatened against or incurred by any of them which arise
directly or indirectly out of or in connection with or which results
from or is attributable to any activities of Studio Response Limited
whether before or after Completion PROVIDED always that the indemnity in
this clause 4.9 shall not apply to the loss, in respect of periods after
Completion, of fees from Studio Response Limited to Production Response
Ltd in the sum of (pound)2,000 per month and any tax payable thereon.
4.10 (a) In the event that the notifications referred to in (i) below are
made within 12 months of Completion, and if during the period of
12 months from the later of (i) the end of the month in which
Euro RSCG is notified by Production Response Ltd that the
activities of Studio Response Ltd are to terminate (and of the
ceasing of any involvement, direct or indirect, by Troypeak,
Pismo (or any subsidiary undertaking or any director or employee
of any of them or any connected person of any of the foregoing)
in Studio Response Ltd or any company or undertaking carrying on
similar activities for Euro RSCG or any connected person) and
(ii) the end of the month of the actual date of termination so
notified, turnover of Production Response Ltd attributable to
Euro RSCG falls below(pound)400,000, then the consideration for
the Shares in Troypeak attributable to the Troypeak Vendors
(other than NatWest) shall be reduced by an aggregate amount
equal to 120% of the shortfall below(pound)400,000 (such
reduction to be pro rata to their respective shareholdings in
Troypeak).
(b) In the event that the notifications referred to in (i) above are
not made within 12 months of Completion, and if during the period
of 24 months beginning with the end of the month in which
Completion takes place, turnover of Production Response Limited
attributable to Euro RSCG falls below(pound)800,000, then the
consideration for the Shares in Troypeak attributable to the
Troypeak Vendors (other than NatWest) shall be reduced by an
aggregate amount equal to 120 per cent of the shortfall below
(pound)800,000 (such reduction to be pro rata to their respective
shareholdings in Troypeak).
(c) For the purposes of this clause 4.10, turnover means turnover
according to UK GAAP but excluding all invoices which are unpaid
as at 90 days after the end of the last month referred to in (d)
below and all sums relating to value added tax and other relevant
taxes, duties or imposts and all disbursements or expenses paid
or payable by Production Response Ltd and recharged to the
relevant client and after deduction of all commissions,
overriders, discounts and other similar payments or credits).
(d) Any reduction required by this clause 4.10 shall be paid by the
Troypeak Vendors (except NatWest) to the Purchaser, immediately
upon the expiry of the period of 90 days from the end of the last
month of the relevant 12 (in the case of a reduction arising
under paragraph (a) above) or 24 (in the case of a reduction
arising under paragraph (b) above) month period, together with
Page 24 of 92
interest at the Agreed Rate (as defined in clause 2.5) in respect
of the period from the end of the last month of the relevant 12
or 24 month period as aforesaid down to the date of actual
payment.
(e) In the event of any dispute as to the amount of Turnover in the
relevant period, a report of the Auditors (as defined in clause
2.5), acting as expert and not as arbitrator, shall (in the
absence of manifest error) be final and binding on the parties.
4.11 The Troypeak Vendors (except NatWest) hereby undertake with the
Purchaser to pay to the Purchaser) such sums as would, if paid to any
member of Purchasers Group, Troypeak or to a Troypeak Subsidiary,
indemnify and keep indemnified such member, Troypeak and the Troypeak
Subsidiaries against all claims, costs, charges, expenses, liabilities,
actions, demands, proceedings and judgements whatsoever which either:-
(a) constitute or derive from a liability or obligation (actual or
contingent) of Troypeak or a Troypeak Subsidiary as at Completion
(or a payment made prior to Completion (excluding the purchase
price of(pound)100,000 and professional fees of(pound)33,000 plus
VAT)) which Troypeak or any Troypeak Subsidiary may at any time
suffer or incur or which may be brought or threatened against or
incurred by any of them which arise directly or indirectly out of
or in connection with or which results from or is attributable to
the acquisition pursuant to the agreement by Production Response
Ltd made with inter alios Reacta Graphics Ltd on 16 January 1998;
or
(b) comprise payments made voluntarily in order to protect the
goodwill of the business acquired or any of the other assets
acquired pursuant to such agreement of 16 January 1998 or
prospects of such business, or goodwill, assets or prospects of
any business carried on at the date of the said acquisition and
which would not have been made had the said acquisition not taken
place.
This indemnity shall not apply to unfair dismissal claims and related legal
advisors expenses not exceeding (pound)70,000 in aggregate.
Any payment required by this clause 4.11 shall be made by the Troypeak
Vendors (except NatWest) to the Purchaser immediately upon production of
audited accounts for the year ending 31 December 2000 (when the
aggregate amount of the bonuses payable (or deemed payable) has been
determined as described in schedule 6, paragraph 10).
The Troypeak Vendors (except NatWest) will be under no further liability
under this clause 4.11 after any payment due has been made (or, if no
payment is due, after such date of production of audited accounts).
Page 25 of 92
4.12 Clause 2.5 of the Tax Deeds shall apply to any payment made under
clauses 4.9, 4.10 and 4.11 of this agreement, as if that clause 2.5 was
expressly incorporated into this agreement.
5. PURCHASER'S WARRANTIES
The Purchaser represents and warrants to each of the Vendors that each
of the following representations and warranties are true and accurate in
all material respects at the date of this Agreement:-
5.1 The Purchaser has the corporate power and authority to enter into and to
perform its obligations under this Agreement and the execution, delivery
and performance by the Purchaser of this Agreement have been duly
authorised by all necessary action on the part of the Purchaser. This
Agreement constitutes a legal, valid and binding obligation on the
Purchaser, enforceable against it in accordance with its terms.
5.2 Neither the execution, delivery and performance of this Agreement nor
the consummation of the transactions contemplated hereby, nor compliance
by the Purchaser with any of the provisions hereof, will
(a) violate, conflict or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default)
under, or result in the termination of, or result in a right of
termination, under any of the terms, conditions, or provisions of
any of their respective articles of incorporation or bylaws or
any material agreement or other material instrument or material
obligation to which the Purchaser or any of its subsidiaries is a
party; or
(b) subject to compliance with the statutes and regulations referred
to in the next paragraph, to the knowledge of the Purchaser,
violate any material judgment, ruling, order, decree, statute,
rule or regulation applicable to the Purchaser or any of its
subsidiaries or any of their respective properties or assets.
6. PROTECTION OF GOODWILL
6.1 JWT and the Vendors, except NatWest and WPP, (which parties shall, for
the purposes of this clause 6 be referred to as the "COVENANTORS")
hereby severally undertake to procure that (except as otherwise agreed
in writing with the Purchaser) they will not either solely or jointly
with any other person (either on its own account or as the agent of any
other person):-
(a) for a period of 3 years from Completion carry on or be engaged or
concerned or (except as the holder of shares in a listed company
which confer not more than five per cent. of the votes which can
generally be cast at a general meeting of the company) interested
directly or indirectly in a business which competes with the type
of business carried on by any member of the Group at
Page 26 of 92
Completion in the area or areas constituting the market in Great
Britain, Northern Ireland or the Republic of Ireland of any
member of the Group;
(b) for a period of 3 years from Completion solicit or accept the
custom of any person in respect of goods or services competitive
with those manufactured or supplied by any member of the Group
during the period of 12 months prior to Completion, such person
having been a customer of any member of the Group in respect of
such goods or services during such period;
(c) for a period of 3 years from Completion induce, solicit or
endeavour to entice to leave the service or employment of any
member of the Group, any person who during the period of 12
months prior to Completion was an employee of any member of the
Group occupying a senior or managerial position likely (in the
reasonable opinion of the Purchaser) to be:-
(i) in possession of confidential information relating to; or
(ii) able to influence the customer relationships or
connections of any member of the Group;
(d) use any trade name (including the expressions Lifeboat Matey or
Production Response) used by any member of the Group at any time
during the 3 years immediately preceding the date of this
agreement or any other name similar thereto or capable of being
confused with any such trade name;
PROVIDED THAT the restrictions contained in this clause 6.1 shall not apply to
J. Xxxxxx Xxxxxxxx Company (Manchester) Limited or JWT to the extent
that JWT acts as the principal of that company.
6.2 The Covenantors agree that the undertakings contained in this clause 6
are reasonable and are entered into for the purpose of protecting the
goodwill of the business of each member of the Group and that
accordingly the benefit of the undertakings may be assigned by the
Purchaser and its successors in title without the consent of any of the
Covenantors.
6.3 Each undertaking contained in this clause 6 is and shall be construed as
separate and severable and if one or more of the undertakings is held to
be against the public interest or unlawful or in any way an unreasonable
restraint of trade or unenforceable in whole or in part for any reason
the remaining undertakings or parts thereof, as appropriate, shall
continue to bind the Covenantors.
6.4 If any undertaking contained in this clause 6 shall be held to be void
but would be valid if deleted in part or reduced in application, such
undertaking shall apply with such deletion or modification as may be
necessary to make it valid and enforceable. Without prejudice to the
generality of the foregoing, such period (as the same may
Page 27 of 92
previously have been reduced by virtue of this clause 6.4) shall take
effect as if reduced by six months until the resulting period shall be
valid and enforceable.
6.5 No provision of this agreement, by virtue of which this agreement is
subject to registration (if such be the case) under the Restrictive
Trade Practices Act 1976 (unless this agreement is a non-notifiable
agreement pursuant to section 27A of that Act), shall take effect until
the day after particulars of this agreement have been furnished to the
Director-General of Fair Trading pursuant to section 24 of that Act. For
this purpose the expression "this agreement" includes any agreement or
arrangement of which this agreement forms part and which is registrable
or by virtue of which this agreement is registrable.
6.6 The expression "any member of the Group" shall be construed as referring
to Troypeak or any of the Troypeak Subsidiaries, insofar as undertakings
are given by any Troypeak Vendor, and as referring to Pismo or any of
the Pismo Subsidiaries insofar as undertakings are given by any Pismo
Vendor or by JWT.
7. CONFIDENTIAL INFORMATION
7.1 The Vendors on a several basis shall:-
(a) not and shall procure that none of their connected persons or any
director, officer or employee or adviser or agent of their
Related Persons shall use or disclose to any person Confidential
Information; and
(b) use all reasonable endeavours to prevent the use or disclosure of
Confidential Information by any person other than by members of
the Purchaser's Group.
7.2 Clause 7.1 does not apply to:-
(a) disclosure of Confidential Information to or at the written
request of the Purchaser (which shall include disclosure made in
the discharge of a Vendor's duties under a Service Agreement);
(b) use or disclosure of Confidential Information required to be
disclosed by law, regulation, any revenue authority, the London
Stock Exchange or any other recognised stock exchange on which
any party's or their Related Person's shares are listed;
(c) disclosure of Confidential Information to professional advisers
for the purpose of advising the Vendors; or
(d) Confidential Information which is in the public domain other than
by a breach by any of the Vendors of clause 7.1.
Page 28 of 92
8. ANNOUNCEMENTS
8.1 No party shall disclose the making of this agreement nor its terms nor
(except those matters set out in the press release in the agreed terms)
and each of the parties shall procure that each of its Related Persons
and its professional advisers shall not make any such disclosure without
the prior consent of the other party unless disclosure is:-
(a) to its professional advisers; or
(b) required by law or the rules of any stock exchange, any revenue
authority, or other regulatory body and disclosure shall then
only be made by that party:-
(i) after it has taken all such steps as may be reasonable in
the circumstances to agree the contents of such
announcement with the other parties before making such
announcement and provided that any such announcement shall
be made only after notice to the other parties; and
(ii) to the person or persons and in the manner required by law,
the London Stock Exchange or any other recognised stock
exchange on which any party or its Related Person's shares
are listed or as otherwise agreed between the parties
provided that this clause 8.1 does not apply to announcements, communications or
circulars made or sent by the Purchaser after Completion to customers,
clients or suppliers of any Group Company to the extent that it informs
them of the Purchaser's acquisition of the Shares or to any
announcements containing only information which has become generally
available.
8.2 The restrictions contained in clause 8.1 shall apply without limit of
time and whether or not this agreement is terminated.
9. COSTS
Unless expressly otherwise provided in this agreement each of the
parties shall bear its own legal, accountancy and other costs, charges
and expenses connected with the sale and purchase of the Shares.
10. EFFECT OF COMPLETION
10.1 The terms of this agreement (insofar as not performed at Completion and
subject as specifically otherwise provided in this agreement) shall
continue in force after and notwithstanding Completion.
10.2 The remedies of the Purchaser in respect of any breach of any of the
Warranties shall continue to subsist notwithstanding Completion.
Page 29 of 92
11. FURTHER ASSURANCES
Following Completion the Vendors on a several basis shall from time to time
forthwith upon request from the Purchaser and at the Purchaser's
expense, do or procure the doing of all acts and/or execute or procure
the execution of all such documents in a form reasonably satisfactory to
the Purchaser for the purpose of assisting the Purchaser, the Companies
and Subsidiaries with any enquiries from a regulatory agency or
recognised stock exchange and vesting in the:-
(a) Purchaser the full legal and beneficial title to the:
(i) Shares and otherwise giving the Purchaser the full benefit of
this agreement; and
(ii) Intellectual Property used by the Company except where such
Intellectual Property is the subject of licences to the
Company as at the date hereof; and
(b) Company title to the Properties in accordance with paragraph 18.3
of schedule 5 or insofar as any consent or licence may be
required by reason of the transactions set out in this agreement
or otherwise to enable any of the Properties to continue to be
vested with title as aforesaid in the Company when under the
ownership or control of the Purchaser or other person being
entitled for the time being to the benefit of the Warranties.
12. ENTIRE AGREEMENT
Each party on behalf of itself and as agent for each of its Related Persons
acknowledges and agrees with the other parties (each such party acting
on behalf of itself and as agent for each of its Related Persons if any)
that:-
(a) this agreement together with any other documents referred to in
this agreement (together the "TRANSACTION DOCUMENTS") constitute
the entire and only agreement between the parties and their
respective Related Persons, if any, relating to the subject
matter of the Transaction Documents;
(b) neither it nor any of its Related Persons, if any, have been
induced to enter into any Transaction Document in reliance upon,
nor have they been given, any warranty, representation,
statement, assurance, covenant, agreement, undertaking, indemnity
or commitment of any nature whatsoever other than as are
expressly set out in the Transaction Documents and, to the extent
that any of them have been, it (acting on behalf of itself and as
agent on behalf of each of its Related Persons, if any)
unconditionally and irrevocably waives any claims, rights or
remedies which any of them might otherwise have had in relation
thereto;
Page 30 of 92
PROVIDED THAT the provisions of this clause 12 shall not exclude any liability
which any of the parties or, where appropriate, their Related Persons
would otherwise have to any other party or, where appropriate, to any
other party's Related Persons or any right which any of them may have in
respect of any statements made fraudulently by any of them prior to the
execution of this agreement or any rights which any of them may have in
respect of fraudulent concealment by any of them.
13. VARIATIONS
This agreement may be varied only by a document signed by each of the
Vendors and the Purchaser.
14. WAIVER
14.1 A waiver of any term, provision or condition of, or consent granted
under, this agreement shall be effective only if given in writing and
signed by the waiving or consenting party and then only in the instance
and for the purpose for which it is given.
14.2 No failure or delay on the part of any party in exercising any right,
power or privilege under this agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right,
power or privilege preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
14.3 No breach of any provision of this agreement shall be waived or
discharged except with the express written consent of the Vendors and
the Purchaser.
14.4 The rights and remedies herein provided are cumulative with and not
exclusive of any rights or remedies provided by law.
15. INVALIDITY
If any provision of this agreement is or becomes invalid, illegal or
unenforceable in any respect under the law of any jurisdiction:-
(a) the validity, legality and enforceability under the law of that
jurisdiction of any other provision; and
(b) the validity, legality and enforceability under the law of any
other jurisdiction of that or any other provision,
shall not be affected or impaired in any way.
16. NOTICES
16.1 Any notice, demand or other communication given or made under or in
connection with the matters contemplated by this agreement shall be in
writing and shall be
Page 31 of 92
delivered personally or sent by fax or prepaid first class post (air
mail if posted to or from a place outside the United Kingdom):-
IN THE CASE OF THE PURCHASER TO:-
Address Big Flower Digital Services Limited
c/o 0 Xxxx 00xx Xxxxxx
Xxx Xxxx Xxxx 00000
XXX
Fax: 00 1 212 521 1640
Attention: Xxxx Xxxxxxxx
IN THE CASE OF TROYPEAK TO:-
any two of Messrs. X.X. Xxxx, X.X. Xxxxxxx and X.X. Xxxxxx at their
respective addresses set out in schedule 1 or to any other addresses
for such persons which have been notified to the Purchaser in
accordance with clause 16.2.
IN THE CASE OF PISMO TO:-
Mr A. Tout, BBH and WPP at their respective addresses set out in
schedule 1 or to any other addresses for such persons which have been
notified to the Purchaser in accordance with clause 16.2.
and shall be deemed to have been duly given or made as follows:-
(a) if personally delivered, upon delivery at the address of the
relevant party;
(b) if sent by first class post, two Business Days after the date of
posting; and
(c) if sent by air mail, five Business Days after the date of
posting;
provided that if, in accordance with the above provisions, any such notice,
demand or other communication would otherwise be deemed to be given or
made outside 9.00 a.m. - 5.00 p.m. on a Business Day such notice, demand
or other communication shall be deemed to be given or made at 9.00 a.m.
on the next Business Day.
16.2 A party may notify the other party to this agreement of a change to its
name, relevant addressee or address for the purposes of clause 16.1
provided that such notification shall only be effective on:-
(a) the date specified in the notification as the date on which the
change is to take place; or
(b) if no date is specified or the date specified is less than five
Business Days after the date on which notice is given, the date
falling five Business Days after notice of any such change has
been given.
Page 32 of 92
16.3 Any notice or other authority or instruction to be given by the Troypeak
Vendors under this agreement may be given and shall be properly given if
signed by any three of the Troypeak Vendors (excluding NatWest).
17. COUNTERPARTS
This agreement may be executed in any number of counterparts which
together shall constitute one agreement. Any party may enter into this
agreement by executing a counterpart and this agreement shall not take
effect until it has been executed by all parties.
18. GOVERNING LAW AND JURISDICTION
18.1 This agreement (and any dispute, controversy, proceedings or claim of
whatever nature arising out of or in any way relating to this agreement
or its formation) shall be governed by and construed in accordance with
English law.
18.2 Each of the parties to this agreement irrevocably agrees that the courts
of England shall have exclusive jurisdiction to hear and decide any
suit, action or proceedings, and/or to settle any disputes, which may
arise out of or in connection with this agreement (respectively,
"PROCEEDINGS" and "DISPUTES") and, for these purposes, each party
irrevocably submits to the jurisdiction of the courts of England.
18.3 Each party irrevocably waives any objection which it might at any time
have to the courts of England being nominated as the forum to hear and
decide any Proceedings and to settle any Disputes and agrees not to
claim that the courts of England are not a convenient or appropriate
forum for any such Proceedings or Disputes and further irrevocably
agrees that a judgment in any Proceedings or Disputes brought in any
court referred to in this clause 18 shall be conclusive and binding upon
the parties and may be enforced in the courts of any other jurisdiction.
19. ASSIGNMENT
It is hereby agreed and declared that the benefit of this agreement may be
assigned by the Purchaser to any member of the Purchaser's Group
provided that any such assignee shall be bound by the provisions of this
clause 19 mutatis mutandis.
IN WITNESS whereof this agreement has been executed on the date first above
written.
Page 33 of 92
SCHEDULE 1
THE VENDORS
PART I
TROYPEAK LIMITED
============================================================================================
1 2 3 4
Cash Percentage
Column Names & Addresses of Number of Consideration %
the Vendors Shares held (pound)
============================================================================================
1. NatWest Ventures 33,000 2,250,000 NIL
Investments Limited (consisting of
000 Xxxxxxxxxxx Xxxx. X Xxx.
Xxxxxx XX0X 0XX 21,429 &
C Ord. 11,571)
--------------------------------------------------------------------------------------------
2. Xxxxxxxxxxx Xxxxxx 11,000 (A Ord) 594,250 8.44
Xxxx
Bolivia Mount
The Dhoor
Lazayre
Isle of Man IM7 4ED
--------------------------------------------------------------------------------------------
3. Xxxxxx Xxxx Xxxxxx 11,000 (A Ord) 594,250 8.44
The Bungalow
000X Xxxxx Xxx
Xxxxxxxx
Xxxxxxx
Xxxxxxxxx XX00 0XX
--------------------------------------------------------------------------------------------
4. Xxxxxxx Xxxxxxx 286,000 (B Ord) 655,000 6.60
Xxxxxxx
00 Xxxxxxxxxxx Xxxxxx
Xxxxxxxx
Xxxxxx
Xxxxx XX0 0XX
--------------------------------------------------------------------------------------------
5. Xxxxxxx Xxxxx Xxxxx 11,000 (A Ord) 594,250 8.44
00 Xxxxxxxx Xxx
Xxxx Xxxxxxx
Xxxxxxxxx
Xxxx XX0 0XX
--------------------------------------------------------------------------------------------
6. Xxxx Xxxxxxxxxxx 286,000 (B Ord) 655,000 6.60
Blowes
00X Xxxxxxx Xxxx
Xxxx
Xxxxxx XX0 0XX
--------------------------------------------------------------------------------------------
Page 34 of 92
============================================================================================
1 2 3 4
Cash Percentage
Column Names & Addresses of Number of Consideration %
the Vendors Shares held (pound)
============================================================================================
7. Xxxxxx Xxxxxxx Xxxxxxx 286,000 (B Ord) 655,000 6.60
00 Xxxxxxx Xxxx
Xxxxxxxxxx
Xxxxx
Xxxxxx XX00 0XX
--------------------------------------------------------------------------------------------
8. Xxxxxxx Xxxx Xxxxx 286,000 (B Ord) 655,000 6.60
000 Xxxxx Xxxx
Xxxxxx
Xxxxxxxxxxxxx XX0
0XX
--------------------------------------------------------------------------------------------
--------- ----------------
1,210,000 (pound)6,652,750
============================================================================================
Page 35 of 92
PART II
PISMO LIMITED
==============================================================================================
1 2 3 4
Number of
Names & Addresses of Shares held
Column the Vendors (Ordinary Cash Percentage
Shares of Consideration %
(pound)1 each) (pound)
==============================================================================================
1. Xxxx Xxxxx Xxxxxxx 753 (A Ord) 198,787 2.79
The Old Nursery
00 Xxxxxxxxx Xxxx
Xxxxxxxxxx
Xxxxxxxxx XX0 0XX
----------------------------------------------------------------------------------------------
2. Xxxxxxx Xxxxx 3765 (A Ord) 993,938 13.93
Chaffinches Farm
Xxxx Xxxx
Xxxxxxx
Xxxxxxxxxx
Xxxx Xxxxxx
XX00 0XX
----------------------------------------------------------------------------------------------
3. Xxxx Tout 7781 (A Ord) 2,054,138 28.77
Xxxx 0
00 Xxxxxxx Xxxxxxx
Xxxxxx XX0 0XX
----------------------------------------------------------------------------------------------
4. Xxxxx Xxxx Xxxxxxxx 753 (A Ord) 198,787 2.79
0 Xxxxxx Xxxx Xxxxx
Xxxxxxxxx
Xxxxxxxxxx
Xxxxx XX0 0XX
----------------------------------------------------------------------------------------------
5. WPP Group plc* 24 (B Ord) 1,744,200 XXX
Xxxxxxxxxx Xxxxxx
Xxxxx
Xxxx XX00 0XX
----------------------------------------------------------------------------------------------
6. BBH Communications 24 (B Ord) 1,744,200 NIL
Limited+
00 Xxxxxx Xxxxxx
Xxxxxx X0 0XX
----------------------------------------------------------------------------------------------
---------- ----------------
13,100 (pound)6,934,050
========== ================
==============================================================================================
--------
* registered holder is Carteret Holdings Ltd
+ registered holder is Montrane Ltd
Page 36 of 92
SCHEDULE 2
PARTICULARS RELATING THE COMPANIES
TROYPEAK LIMITED
Authorised share capital: (pound)3,000,000 in shares of(pound)1 each:
100,000 CRPB Shares
33,000 A Ordinary Shares
2,772,571 B Ordinary Shares
21,429 Preferred Ordinary Shares
(now Preferred C Ordinary Shares)
11,571 A Preferred Ordinary Shares
(now C Ordinary Shares)
61,429 CRPA Shares
Issued share capital: (pound)1,210,000 in shares of(pound)1 each:
33,000 A Ordinary Shares
1,144,000 B Ordinary Shares
21,429 Preferred Ordinary Shares
(now Preferred C Ordinary Shares)
11,571 A Preferred Ordinary Shares
(now C Ordinary Shares)
Directors: X X Xxxxxx
The Bungalow, 000X Xxxxx Xxx, Xxxxxxxx,
Xxxxxxx, Xxxxxxxxx XX00 0XX
P Blowes
00X Xxxxxxx Xxxx Xxxx, Xxxxxx XX0 0XX
X X Xxxxx
00 Xxxxxxxx Xxx, Xxxx Xxxxxxx, Xxxxxxxxx,
Xxxx XX0 0XX
X X Xxxxxxx
00 Xxxxxxx Xxxx, Xxxxxxxxxx, Xxxxx,
Xxxxxx XX00 0XX
X X Xxxx
Bolivia Mount, The Dhoor, Lazayre,
Isle of Man IM7 4ED
X X Xxxxxxx
00 Xxxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxx,
Xxxxx XX0 0XX
X X Xxxxx
126 Wagon Road,
000 Xxxxxx Xxxx
Xxxxxx,
Xxxxxxxxxxxxx XX0 0XX
Page 37 of 92
Secretary: X X Xxxxxx
Auditors: Xxxxxxx Xxxx
Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxx XX0 0XX
Accounting reference date: 30 September
Registered Office: P O Box 18, Xxxxx House, 00 Xxxxx Xxxxxx,
Xxxxxxx XX00 0XX
Page 38 of 92
PISMO LIMITED
Authorised share capital: (pound)100,000 in shares of(pound)1 each:
52,000 A Ordinary Shares
48,000 B Ordinary Shares
Issued share capital: (pound)13,100 in shares of(pound)1 each:
13,052 A Ordinary Shares
48 B Ordinary Shares
Directors: M B Xxxxxxx
The Old Nursery, 00 Xxxxxxxxx Xxxx,
Xxxxxxxxxx, Xxxxxxxxx XX0 0XX
R Xxxxx
Xxxxxxxxxxx Xxxx, Xxxx Xxxx, Xxxxxxx,
Xxxxxxxxxx, Xxxx Xxxxxx XX00 0XX
A Tout
Xxxx 0, 00 Xxxxxxx Xxxxxxx, Xxxxxx XX0 0XX
X X Xxxxxxxx
0 Xxxxxx Xxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxx,
Xxxxx XX0 0XX
Secretary: A Tout
Auditors: Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxx
Xxx Xxxxxx Entrance
00-00 Xxxxxx Xxxxxx
Xxxxxx X0X 0XX
Accounting reference date: 31 March
Registered Office: 00/00 Xxxx Xxxxxx
Xxxxxx X0X 0XX
Page 39 of 92
SCHEDULE 3
PART I
PARTICULARS RELATING TO THE TROYPEAK SUBSIDIARIES
PRODUCTION RESPONSE LIMITED
Authorised share capital: (pound)50,000: 50,000 Shares of(pound)1 each
Issued share capital: (pound)50,000: 50,000 Shares of(pound)1 each
Directors: X X Xxxx
X X Xxxxxx
E Xxxxxx
X X Xxxxxxx
X X Xxxxx
P Blowes
R Penfold
R Xxxxx
X Xxxx
Secretary: X X Xxxxxx
Auditors: Xxxxxxx Xxxx
Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxx XX0 0XX
Accounting reference date: 30 September
Registered Office: Cartwrights
P O Box 18, Xxxxx House, 00 Xxxxx Xxxxxx,
Xxxxxxx, Xxxx XX00 0XX
Page 40 of 92
XXXX STUDIO LIMITED
Authorised share capital: (pound)100: 100 Ordinary Shares of(pound)1 each
Issued share capital: (pound)2: 2 Ordinary Shares of(pound)1 each
Directors: X X Xxxx
X X Xxxxxxx
X X Xxxxxx
Secretary: X X Xxxxxx
Auditors: Xxxxxxx Xxxx
Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxx XX0 0XX
Accounting reference date: 30 September
Registered Office: Cartwrights
P O Box 18, Xxxxx House, 00 Xxxxx Xxxxxx,
Xxxxxxx, Xxxx XX00 0XX
Page 41 of 92
PART II
PARTICULARS RELATING TO THE PISMO SUBSIDIARIES
MATELOT PRODUCTIONS LIMITED AS AT COMPLETION
Authorised share capital: (pound)100 divided into 100 Ordinary Shares of
(pound)1 each.
Issued share capital: (pound)2 divided into 2 Ordinary Shares of
(pound)1 each.
Directors: Rutland Directors Limited
Secretary: Rutland Secretaries Limited
Auditors: None appointed
Accounting reference date: 31 March.
Registered Office: 00 Xxxxxxxxxxx Xxxxx
Xxxxxx XX0X 0XX
Page 42 of 92
MATELOT PRODUCTIONS LIMITED AFTER COMPLETION
Authorised share capital: (pound)100 divided into 100 Ordinary Shares of
(pound)1 each.
Issued share capital: (pound)90 divided into 90 Ordinary Shares of
(pound)1 each.
Directors: Xxxx Tout Xxxxx Xxxxx
Xxxx 0 000 Xxxxxxxxx Xxxx
00 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxx XX0 0XX Kent M64 6JL
Xxxxxxxx Xxxxx
Xxxxxx Xxxxxxx
Xxxxx Xxxx
Xxxxxxxxx
Xxxx XX00 866
Secretary: Xxxxx Xxxxx
000 Xxxxxxxxx Xxxx
Xxxxxxx
Xxxx X00 0XX
Auditors: Willott Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxx
Xxx Xxxxxx entrance
00-00 Xxxxxx Xxxxxx
Xxxxxx X0X 0XX
Accounting reference date: 31 March.
Registered Office: 00-00 Xxxx Xxxxxx
Xxxxxx X0X 0XX
Page 43 of 92
FLITCLAIM LIMITED (TO BE RENAMED WATERSHED LIMITED) AS AT COMPLETION
Authorised share capital: (pound)1,000 divided into 1,000 Ordinary Shares
of(pound)1 each
Issued share capital: (pound)2 divided into 2 Ordinary Shares of
(pound)1 each
Directors: Xxxx Tout
Xxxx 0
00 Xxxxxxx Xxxxxxx
Xxxxxx XX0 0XX
Secretary: Xxxxx Xxxxx
000 Xxxxxxxxx Xxxx
Xxxxxxx
Xxxx X00 0XX
Auditors: None appointed
Accounting reference date: [ ]
Registered Office: 00/00 Xxxx Xxxxxx
Xxxxxx
X0X 0XX
Page 44 of 92
FLITCLAIM LIMITED (TO BE RENAMED WATERSHED LIMITED) AFTER COMPLETION
Authorised share capital: (pound)1,000 divided into 1,000 Ordinary Shares
of(pound)1 each
Issued share capital: (pound)1,000 divided into 1,000 Ordinary Shares
of(pound)1 each
Directors: Xxxx Tout
Xxxx 0
00 Xxxxxxx Xxxxxxx
Xxxxxx XX0 0XX
Secretary: Xxxxx Xxxxx
000 Xxxxxxxxx Xxxx
Xxxxxxx
Xxxx X00 0XX
Auditors: Willott Kingston Xxxxx
00 Xxxxxx Xxxxxx
Xxxxxx X0X 0XX
Accounting reference date: 31 December
Registered Office: 00/00 Xxxx Xxxxxx
Xxxxxx
X0X 0XX
Page 45 of 92
SCHEDULE 4
[DELETED]
Page 46 of 92
SCHEDULE 5
THE WARRANTIES
Any Warranty expressed to be given "to the best of the Warrantors' knowledge and
belief" or "so far as the Warrantors are aware" or otherwise qualified by
reference to the knowledge of the Warrantors shall not, save where expressed to
the contrary, be qualified in the manner stated unless the Warrantors establish
that they have made such reasonable enquiries to establish the truth and
accuracy of that Warranty as are appropriate in the context of the relevant
Warranty.
In this schedule 5 and schedule 6 the following words have the following
meanings, unless the context otherwise requires:
"ACCOUNTS" means the audited financial statements of each Company, comprising
the balance sheet, profit and loss account and cash flow statements of each
Company, together in each case with the notes thereon, directors' report and
auditors' certificate, as at and for the financial period ended on the Accounts
Date;
"ACTIVITIES" means any activity, operation or process carried out by the Company
at any property whether or not currently owned, occupied or used by the Company;
"CAA" means the Capital Allowances Xxx 0000;
"CLAIM FOR TAX" means any of the following:-
(a) any liability to make a payment of Tax and any claim, assessment,
demand, notice or other document issued or action taken by or on
behalf of any person, authority or body whatsoever and of
whatever country, including any Tax Authority, which claims
payment of Tax;
(b) any non-availability or loss of or reduction of any relief
(including in particular a right to repayment);
"COMPETENT AUTHORITY" means any person or legal entity (including any government
or government agency) having regulatory authority under Environmental Laws
and/or any court of law or tribunal;
"DISTRIBUTION" means a distribution as defined by sections 209 to 211
(inclusive) of the TA and section 418 of the TA;
"ENVIRONMENT" means any and all organisms (including without limitation man),
ecosystems, property and the following media: air, (including without
limitation, the air within buildings and the air within other natural or
man-made structures whether above or below ground); water (including without
limitation, water under or within land or in drains or sewers and coastal and
inland waters); and land (including without limitation, land under water);
"ENVIRONMENTAL LAWS" means all international, EU, national, federal, state or
local statutes, (which for the avoidance of doubt shall include the Producer
Responsibility Obligations (Packaging Waste) Regulations 1997, section 57 and
schedule 22 of the Environment Act
Page 47 of 92
1995 and the guidance and regulations adopted under those provisions,) by-laws,
orders, regulations or other law or subordinate legislation or common law, all
orders, ordinances, decrees or regulatory codes of practice, circulars, guidance
notes and equivalent controls concerning the protection of human health or which
have as a purpose or effect the protection or prevention of harm to the
Environment or health and safety;
"ENVIRONMENTAL LIABILITY" means liability (including, without limitation,
liability in respect of Remedial Action) on the part of the Company and for any
of its directors, officers or shareholders under Environmental Laws;
"ENVIRONMENTAL PERMIT" means any and all licences, consents, permits,
authorisations or similar, made or issued pursuant to or under, or required by,
Environmental Laws in relation to the carrying on by the Company of its
business;
"ERA" means the Employment Rights Xxx 0000;
"FORMER PROPERTY" means any and all land or property, other than the Properties,
owned, occupied or used at any time by the Company;
"HARM" OR "DAMAGE" in relation to the Environment mean harm or damage to health
of living organisms (which in the case of man includes offence caused to any of
his senses or harm to his property) or other interference with ecological
systems of which they form part;
"HAZARDOUS MATTER" means any natural or artificial substance (whether solid,
liquid, gas, noise, ion, vapour, electromagnetic or radiation, including
electricity, heat and vibration, and whether alone or in combination with any
other substance) which is capable of causing harm to or have a deleterious
effect on the Environment, being a nuisance, or which restricts or makes more
costly the use, development, ownership or occupation of any Properties;
"ITA" means the Inheritance Tax Xxx 0000;
"L&T COVENANTS ACT" means the Landlord and Tenant (Covenants) Xxx 0000;
"LEASES" means the leases specified in the Disclosure Letter;
"REMEDIAL ACTION" means (i) preventing, limiting, removing, remedying, cleaning
up, abating, containing or ameliorating the presence or effect of any Hazardous
Matter in the Environment (including without limitation the Environment at the
Properties) or (ii) carrying out investigative work and obtaining legal and
other professional advice as is reasonably required in relation to (i);
"SUBSTANTIAL CUSTOMER" means a customer accounting for more than five per cent.
of the Group's sales in the financial year ended on the Accounts Date;
"SUBSTANTIAL SUPPLIER" means a supplier accounting for more than five per cent.
of the Group's purchases in the financial year ended on the Accounts Date;
"TAX" OR "TAX" means any tax, and any duty, contribution, impost, withholding,
levy or charge in the nature of tax, whether domestic or foreign, and any fine,
penalty, surcharge or interest connected therewith and includes corporation tax,
advance corporation tax, income
Page 48 of 92
tax (including income tax required to be deducted or withheld from or accounted
for in respect of any payment), national insurance and social security
contributions, capital gains tax, inheritance tax, value added tax, customs
excise and import duties, stamp duty, stamp duty reserve tax, insurance premium
tax, air passenger duty, land fill tax, petroleum revenue tax, advance petroleum
revenue tax, gas levy and any other payment whatsoever which any person is or
may be or become bound to make to any person and which is or purports to be in
the nature of taxation;
"TAXATION AUTHORITY" means any local, municipal, governmental, state, federal or
fiscal, revenue, customs or excise authority, body, agency or official anywhere
in the world having or purporting to have power or authority in relation to Tax
including the Inland Revenue and HM Customs and Excise;
"TAXATION STATUTES" means all statutes, statutory instruments, orders
enactments, laws, by-laws, directives and regulations, whether domestic or
foreign decrees, providing for or imposing any Tax;
"TCGA" means the Taxation of Chargeable Gains Xxx 0000;
"TMA" means the Taxes Management Xxx 0000;
"TRANSFER REGULATIONS" means the Transfer of Undertakings (Protection of
Employment) Regulations 1981;
"TULR(C)A" means the Trade Union and Labour Relations (Consolidation) Xxx 0000;
"VATA" means the Value Added Tax Xxx 0000 and "VAT LEGISLATION" means VATA and
all regulations and orders made thereunder;
"YEAR 2000 CONFORMITY" shall have the meaning set out in the document published
with reference number DISC PD2000-1 by the part of the British Standards
Institution called DISC entitled "A Definition of Year 2000 Conformity
Requirements". In construing the meaning of this definition, regard shall be had
to the Amplification of the Definition and Rules set out in the same document.
1. VENDORS' CAPACITY
1.1 AUTHORISATIONS
The Vendors have obtained all corporate authorisations and all other
applicable governmental, statutory, regulatory or other consents,
licences, waivers or exemptions required to empower them to enter into
and to perform its obligations under this agreement and each document to
be executed by them at or before Completion.
Page 49 of 92
1.2 PROPER EXECUTION
The Vendors' obligations under this agreement and each document to be
executed at or before Completion are or when the relevant document is
executed, will be enforceable in accordance with their terms.
2. THE COMPANY, THE SHARES AND THE SUBSIDIARIES
2.1 INCORPORATION AND EXISTENCE
The Company, Montrane Limited and each of the Subsidiaries are limited
companies incorporated under English law and Carteret Holdings Limited
is incorporated under Jersey Law and each have been in continuous
existence since their incorporation.
2.2 THE SHARES
(a) The Vendors are the only legal and beneficial owners of the
Shares.
(b) The Company has not allotted any shares other than the Shares and
the Shares are fully paid or credited as fully paid.
(c) There is no Encumbrance in relation to any of the Shares or
unissued shares in the capital of the Company. No person has
claimed to be entitled to an Encumbrance in relation to any of
the Shares and no Group Company is under any obligation (whether
actual or contingent) to sell, charge or otherwise dispose of any
of the Shares or any interest therein to any person.
(d) Other than this agreement, there is no agreement, arrangement or
obligation requiring the creation, allotment, issue, sale,
transfer, redemption or repayment of, or the grant to a person of
the right (conditional or not) to require the allotment, issue,
sale, transfer, redemption or repayment of, a share in the
capital of the Company (including an option or right of
pre-emption or conversion).
2.3 THE SUBSIDIARIES
(a) The Company does not have any subsidiary undertakings other than
the Subsidiaries. Each of the Subsidiaries is a wholly-owned
subsidiary of the Company (unless otherwise indicated in schedule
3) and each of the shares of each such company has been properly
allotted and issued and is fully paid or credited as fully paid.
(b) There is no Encumbrance in relation to any of the shares or
unissued shares in the capital of any of the Subsidiaries. No
person has claimed to be entitled to an Encumbrance in relation
to any of the shares of any of the Subsidiaries and no Group
Company is under any obligation (whether actual or contingent)
Page 50 of 92
to sell, charge or otherwise dispose of any shares in any of the
Subsidiaries or any interest therein to any person.
(c) Other than this agreement, there is no agreement, arrangement or
obligation requiring the creation, allotment, issue, sale,
transfer, redemption or repayment of, or the grant to a person of
the right (conditional or not) to require the allotment, issue,
sale, transfer, redemption or repayment of, a share in the
capital of any of the Subsidiaries (including an option or right
of pre-emption or conversion).
(d) The Company does not own any shares or stock in the capital of
nor does it have any beneficial or other interest in any company
or business organisation other than the Subsidiaries nor does the
Company control or take part in the management of any other
company or business organisation.
3. ACCOUNTS
3.1 GENERAL
(a) The Accounts show a true and fair view of the:-
(i) assets, liabilities, financial position and state of affairs
at the Accounts Date; and
(ii) the profits and losses for the financial year ended on the
Accounts Date of the Company.
(b) The Accounts have been prepared and audited in accordance with
the standards, principles and practices specified on the face of
the Accounts applied on a consistent basis and subject thereto in
accordance with the law and applicable standards, principles and
practices generally accepted in the United Kingdom consistently
applied.
(c) The Accounts have been prepared on a basis consistent with the
basis upon which all audited accounts of the Company have been
prepared in respect of the three years before the Accounts Date.
3.2 LIABILITIES
The Accounts make full provision or reserve for or disclose all liabilities
(including all contingent or deferred liability to Tax) of the Company
whether actual, contingent or otherwise which would fall to be disclosed
in accordance with UK generally accepted accounting principles.
Page 51 of 92
3.3 EXTRAORDINARY AND EXCEPTIONAL ITEMS
The results shown by the audited profit and loss account of the Company for
each of the three financial years of the Company ended on the Accounts
Date have not (except as disclosed in those accounts) been affected by
an extraordinary, exceptional or non recurring item or by any other
matter making the profits or losses for a period covered by any of those
accounts unusually high or low and do not include any profit any profit
or loss or any transaction between any Vendor or any Related Person or
connected person of any Vendor on the one hand and the Company on the
other.
3.4 VALUATION OF STOCK
In the Accounts:-
(a) stock was valued in the same way as in the two preceding
financial years and on the basis of the lower of cost and net
realisable value; and
(b) all redundant and obsolete stock was written off and full
provision was made for all slow-moving and damaged stock.
3.5 DEPRECIATION
The rates of depreciation and amortisation used in the audited accounts of
the Company for the three financial years of the Company ended on the
Accounts Date were sufficient to ensure that each fixed asset of the
Company will be written down to nil by the end of its useful life.
3.6 FIXED ASSETS
The value of all of the fixed assets of the Company as shown in the Accounts
is at cost thereof less depreciation deducted from time to time in a
consistent manner and there has been no revaluation of such fixed assets
since their acquisition.
3.7 OFF BALANCE SHEET FINANCING
No member of the Group is engaged in any financing (including the incurring
of any borrowing or any indebtedness in the nature of acceptances or
acceptance credits) of a type which would not be required to be shown or
reflected in the Accounts.
3.8 ACCOUNTING AND OTHER RECORDS
(a) The books of account and all other records of the Company
(including any which it may be obliged to produce under any
contract now in force) are up-to-date, in its possession and are
true and complete in accordance with the law and applicable
standards, principles and practices generally accepted in the
United Kingdom.
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(b) All deeds and documents (properly stamped where stamping is
necessary for enforcement thereof) belonging to the Company or
which ought to be in the possession of the Company are in the
possession of the Company.
3.9 ACCOUNTING REFERENCE DATE
The accounting reference date (under section 224 of the Companies Act 1985)
is and has always been 30 September for Troypeak and the Troypeak
Subsidiaries and 31 March for Pismo.
3.10 MANAGEMENT ACCOUNTS
The management accounts of the Company for the period from the Accounts Date
to 31 January 1998 (a copy of which are annexed to the Disclosure
Letter) have been prepared on a basis consistent with the Accounts and
subject to (a) to (f) below are accurate in all material respects and:-
(a) make proper provision or reserve for depreciation, bad or
doubtful debts and other known actual liabilities;
(b) make fair disclosure in notes of all known contingent
liabilities;
(c) do not overvalue assets;
(d) have not (save as disclosed in such Management Accounts) been
affected by any extraordinary, exceptional or non-recurring item
or by any other fact rendering the profits or losses for the
relevant period unusually high or low;
(e) do not include any profit or loss on any transaction between any
of the Vendors or any person connected or associated with them
and the Company, save for such as previously disclosed to the
Purchaser; and
(f) fully accrue all sums which are owed to advertising agencies,
including in particular all commissions, discounts, over-riders
and other similar payments or credits.
Provided that this Warranty 3.10 shall not apply to corporation tax and, in
particular, deferred taxation save that the Management Accounts take
into account UK tax at the rates of 33pc and in relation to Troypeak
only, in addition known capital allowances, addbacks for depreciation
and entertainment expenditure and known disallowable items and general
provisions.
4. CHANGES SINCE THE ACCOUNTS DATE
4.1 GENERAL
Since the Accounts Date:-
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(a) the Company has carried on its business prudently and in the
ordinary and usual course and so as to maintain the business as a
going concern;
(b) there has been no material adverse change in the financial or
trading position or prospects of the Company; and
(c) there has been no material reduction in the value of those fixed
assets specified in the Accounts, to the extent still owned by
the Company.
4.2 SPECIFIC
Since the Accounts Date:-
(a) the Company has not, other than in the ordinary course of
trading:-
(i) disposed of, or agreed to dispose of, an asset; or
(ii) assumed or incurred or paid, or agreed to assume or incur
or pay, a material liability, obligation or expense (actual
or contingent);
and in the case of a disposal or agreement to dispose of an asset for an
amount which is lower than book value or an open market arm's length
value, whichever is the higher;
(b) the Company has not acquired or agreed to acquire an asset for an
amount which is higher than open market arm's length value;
(c) the Companies, together, have not made, or agreed to make,
capital expenditure exceeding in total (pound)60,000 or incurred,
or agreed to incur, a commitment or connected commitments
involving capital expenditure exceeding in total (pound)60,000;
(d) no Substantial Supplier or Substantial Customer has ceased or
substantially reduced its trade with the Company or has altered
the terms of trade to the Company's disadvantage;
(e) the Company has not declared, paid or made a dividend or other
distribution (including a distribution within the meaning of the
TA) except to the extent provided in the Accounts;
(f) no resolution of the shareholders of the Company has been passed
(except for those representing the ordinary business of an annual
general meeting);
(g) the Company has not repaid or redeemed share or loan capital, or
made (whether or not subject to conditions) an agreement or
arrangement or undertaken an obligation to do any of those
things;
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(h) the Company has not repaid any sum in the nature of borrowings in
advance of any due date or made any loan or incurred any
indebtedness (including in each case inter group);
(i) the Company has not paid nor is under an obligation to pay any
service, management or similar charges or any interest or amount
in the nature of interest to any other person or incurred any
liability to make such a payment or made any payment to any of
the Vendors or any of their connected persons whatsoever; and
(j) the Company has not incurred or paid any liability for any
financial, legal, accountancy, surveyors, valuers, environmental,
actuaries or other professional advisers fees.
5. ASSETS
5.1 TITLE AND CONDITION
(a) There are no Encumbrances (other than liens arising in the
ordinary course of business), nor has the Company agreed to
create any Encumbrances, over any part of its undertaking or
assets and each asset used by the Company (tangible or
intangible) is:-
(i) legally and beneficially owned by the Company; and
(ii) where capable of possession, in the possession of the
Company.
(b) The Company owns each asset (tangible or intangible) necessary
for the operation of its business as currently conducted and
without limitation no rights (other than rights as shareholders
in the Company) relating to the business of the Company are owned
or otherwise enjoyed by or on behalf of any of the Vendors of any
of their connected persons.
(c) All plant, machinery, vehicles and equipment owned or used by the
Company are in good condition and working order and have been
regularly and properly maintained. None is dangerous,
inefficient, out-of-date or in need of renewal or replacement or
surplus to the Company's requirements.
5.2 HIRE PURCHASE AND LEASED ASSETS
Copies of any xxxx of sale or any hiring or leasing agreement, hire purchase
agreement, credit or conditional sale agreement, agreement for payment
on deferred terms or any other similar agreement to which the Company is
a party are annexed to the Disclosure Letter.
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5.3 STOCK
(a) The Company's stock is of satisfactory quality and saleable in
the usual course of its business in accordance with its current
price list.
(b) The Company has not supplied, or agreed to supply, goods which
have been defective or which fail, or will fail, to comply with
their terms of sale.
(c) No goods in a state ready for supply by the Company are defective
or will fail to comply with terms of sale similar to terms of
sale on which similar goods have previously been sold by the
Company.
(d) The Company's level of stock is reasonable having regard to
current and anticipated demand.
(e) The Company has not acquired nor agreed to acquire any material
part of its stock on terms that the property therein does not
pass until full payment is made.
5.4 DEBTS
Except to the extent to which specific provision or reserve has been made in
the Accounts, all indebtedness owed to the Company and whether included
in the Accounts or arising since the Accounts Date will be duly paid in
full not later than 6 months from Completion and none of such
indebtedness has been factored, sold or agreed to be sold by the
Company.
6. INTELLECTUAL PROPERTY
6.1 GENERAL
(a) Save for Intellectual Property licensed to the Company, the
Company is the sole and absolute legal and beneficial owner of
all Intellectual Property used in connection with its business
and where appropriate such Intellectual Property is registered in
or applied for in the name of the Company.
(b) The Intellectual Property used by the Company in connection with
its business is free from Encumbrances and, in the case of
confidential information, any disclosure obligation and is
subsisting, valid, exercisable and enforceable.
6.2 RENEWALS/MAINTENANCE
All registration and renewal fees have been paid in relation to the
Intellectual Property which is registered or applied for in the name of
the Company. All steps have been taken diligently for the prosecution
and maintenance of such Intellectual Property and all steps have been
taken diligently for the maintenance and protection of unregistered
Intellectual Property owned by the Company.
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6.3 LICENCES
(a) The terms of all licences or rights which have been granted by
the Company or which the Company or the Vendors or any of their
Related Persons, if applicable, intends to enter into for the
purposes of the business of the Company or which are being
currently negotiated or other agreement or consents or
undertakings entered into by the Company or the Vendors or any of
their Related Persons, if applicable, relating to the
Intellectual Property owned by or licensed to the Company are set
out in the Disclosure Letter and unless disclosed neither the
Company nor the Vendors nor any of their Related Persons, if
applicable, is obliged to enter into any such agreement relating
to the business of the Company. There has been or is no breach by
the Company so far as the Warrantors are aware nor is there any
fact or matter which would or may create a breach of such
licences or undertakings.
(b) The terms of all licences or rights granted to the Company or
which the Company or the Vendors or any of their Related Persons,
if applicable, intends to enter into for the purposes of the
business of the Company or which are being currently negotiated
or other agreement or consents or undertakings entered into by
the Company or the Vendors or any of their Related Persons, if
applicable, relating to the Intellectual Property used in the
business of the Company are set out in the Disclosure Letter and
neither the Company nor the Vendors nor any of their Related
Persons, if applicable, is obliged to enter into any such
agreement relating to the business of the Company. There has been
or is no breach by the Company nor, so far as the Warrantors are
aware, is there any fact or matter which would or may create a
breach of such licences or undertakings.
6.4 INFRINGEMENT
(a) The use by the Company of any Intellectual Property used in the
business of the Company does not and is not likely to infringe
and the processes or methods employed, services provided, the
business conducted and the products used manufactured and dealt
in or supplied by the Company do not nor did they at the time
used manufactured dealt in or supplied infringe the Intellectual
Property of any other person.
(b) No proceedings claims or complaints have been brought or
threatened by any third party or competent authority in relation
to the Intellectual Property owned by or licensed to the Company
including any concerning title subsistence validity or
enforceability or grant of any right or interest in such
Intellectual Property.
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(c) So far as the Warrantors are aware no third party is infringing
or misusing or threatening to infringe or misuse the Intellectual
Property owned by or licensed to the Company.
(d) The Company is not subject to any injunction, undertaking or
court order or order of any other authority of competent
jurisdiction not to use or restricting the use of any
Intellectual Property.
6.5 CONFIDENTIAL AGREEMENTS
Save as disclosed, the Company has not and none of the Vendors nor any of
their Related Persons, if applicable, has entered into any
confidentiality or other agreement or is subject to any duty which
restricts the free use or disclosure of any information used in the
business of the Company and there is no breach of any such agreement or
duty.
7. EFFECT OF SALE
7.1 Neither the execution nor performance of this agreement or any document
to be executed at or before Completion will:-
(a) result in the Company losing the benefit of a Permit or an asset,
licence, grant, subsidy, right or privilege which it enjoys at
the date of this agreement in any jurisdiction; or
(b) conflict with, or result in a breach of, or give rise to an event
of default under, or require the consent of a person under, or
enable a person to terminate, or relieve a person from an
obligation under, an agreement, arrangement or obligation to
which the Company is a party or a legal or administrative
requirement in any jurisdiction; or
(c) result in any Substantial Customer being entitled to cease
dealing or, so far as the Warrantors are aware having made no
enquiry of any Substantial Customers, ceasing to deal with the
Company or substantially to reduce its existing level of business
or to change the terms upon which it deals with the Company; or
(d) result in any Substantial Supplier being entitled to cease
supplying or, so far as the Warrantors are aware having made no
enquiry of any Substantial Supplier, ceasing to supply the
Company or substantially to reduce its supplies to or to change
the terms upon which it supplies the Company;
(e) so far as the Warrantors are aware result in any officer or
senior employee leaving the Company; or
(f) make the Company liable to offer for sale, transfer or otherwise
dispose of or purchase or otherwise acquire any assets, including
shares held by it in other
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bodies corporate under their articles of association or any
agreement or arrangement.
8. CONSTITUTION
8.1 INTRA XXXXX
The Company has the power to carry on its business as now conducted and the
business of the Company has at all times been carried on intra xxxxx.
8.2 MEMORANDUM AND ARTICLES
The memorandum and articles of association of the Company in the form
annexed to the Disclosure Letter are true and complete and have embodied
therein or annexed thereto copies of all resolutions and agreements as
are referred to in section 380 of the Companies Xxx 0000, and all
amendments thereto (if any) were duly and properly made.
8.3 REGISTER OF MEMBERS
The register of members of the Company has been properly kept and contains
true and complete records of the members from time to time of the
Company and the Company has not received any notice or allegation that
any of them is incorrect or incomplete or should be rectified.
8.4 POWERS OF ATTORNEY
The Company has not executed any power of attorney or conferred on any
person other than its directors, officers and employees any authority to
enter into any transaction on behalf of or to bind the Company in any
way and which power of attorney remains in force or was granted or
conferred within three years of the Completion Date.
8.5 STATUTORY BOOKS AND FILINGS
(a) The statutory books of the Company are up to date, in its
possession and are true and complete in accordance with the law.
(b) All resolutions, annual returns and other documents required to
be delivered to the Registrar of Companies (or other relevant
company registry or other corporate authority in any
jurisdiction) have been properly prepared and filed and are true
and complete and the common seal of the Company is in its
possession.
9. INSURANCE
9.1 POLICIES
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The Disclosure Letter contains a list of each current insurance and
indemnity policy in respect of which the Company has an interest
(together the "POLICIES"). Each of the Policies is valid and enforceable
and is not void or voidable. So far as the Warrantors are aware, there
are no circumstances which might make any of the Policies void or
voidable or lead to any claim under the Policies to be avoided by the
insurers.
9.2 INSURANCE OF ASSETS
Each insurable asset of the Company has at all material times been and is at
the date of this agreement insured to its full replacement value against
each risk normally insured against by a prudent person operating the
types of business operated by the Company.
9.3 CLAIMS
No claim is outstanding under any of the Policies and so far as the
Warrantors are aware, no matter exists which might give rise to a claim
under any of the Policies.
9.4 PREMIUMS
The Company has not done or omitted to do anything which might result in an
increase in the premium payable under any of the Policies.
10. CONTRACTUAL MATTERS
10.1 VALIDITY OF AGREEMENTS
(a) Neither the Company nor the Warrantors have any knowledge
(without having made enquiry of any third party) of the
invalidity of, or a ground for termination, avoidance or
repudiation of, an agreement, arrangement or obligation to which
the Company is a party. No party with whom the Company has
entered into an agreement, arrangement or obligation has given
notice of its intention to terminate, or has sought to repudiate
or disclaim, the agreement, arrangement or obligation.
(b) So far as the Warrantors are aware, no party with whom the
Company has entered into an agreement or arrangement is in
material breach of the agreement or arrangement and so far as the
Warrantors are aware, no matter exists which might give rise to
such breach.
(c) The Company is not in breach of any agreement or arrangement so
far as the Warrantors are aware, no matter exists which might
give rise to such breach.
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10.2 STANDARD TERMS AND CONDITIONS
A copy of the standard terms and conditions of business of the Company are
annexed to the Disclosure Letter and the Company has not entered into an
agreement or arrangement with a customer or supplier different from
these.
10.3 SUPPLY CONTRACTS
Full and accurate details of all agreements or arrangements for the supply of
stock, raw materials, products or goods to or by the Company which
involve or are likely to involve the supply of goods the aggregate sale
value of which will represent in excess of five per cent. of the
turnover for the financial year of the Company ended on the Accounts
Date are contained in the Disclosure Letter and copies annexed to it.
10.4 MATERIAL AGREEMENTS
(a) The Company is not a party to and is not liable under any
contract, transaction, arrangement or liability which 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 because it:-
(i) is of an unusual or abnormal nature, or outside the ordinary
and proper course of business;
(ii) 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);
(iii) is incapable of termination in accordance with its terms, by
the Company, on 60 days' notice or less;
(iv) cannot readily be fulfilled or performed by the Company on
time without undue or unusual expenditure of money, effort or
personnel;
(v) involves payment by the Company by reference to fluctuations
in the index of retail prices, or any other index or in the
rate of exchange for any currency;
(vi) involves an aggregate outstanding expenditure or other
liability by the Company of more than (pound)60,000, or
(vii) restricts its freedom to engage in any activity or business or
confines its activity or business to a particular place;
(b) The Company is not a party to and is not liable under:-
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(i) an agreement, arrangement or obligation by which the Company
is a member of a joint venture, consortium, partnership or
association (other than a bona fide trade association); or
(ii) a distributorship, agency, marketing, licensing or management
agreement or arrangement.
10.5 CONTRACTS WITH CONNECTED PERSONS
There is, and during the three years ending on the date of this agreement
there has been, no agreement or arrangement (legally enforceable or not)
to which the Company is or was a party and in which any of the Vendors,
a director or former director of any member of the Group or of any of
the Vendors' Related Persons or a person connected with any of them is
or was interested in any way. The Company does not owe any obligation or
sum to nor does it and neither will it immediately after Completion have
any contractual or other arrangements of any sort with the Vendors or
any of their connected persons and since the Accounts Date no payment or
accrual (including, in particular, interest) has been made between or
for the benefit of any of the Vendors or any of the Vendors' Related
Persons or a person connected with any of them on the one hand and the
Company on the other hand.
10.6 CONDITIONS AND WARRANTIES IN RESPECT OF GOODS OR SERVICES
Except for a condition or warranty implied by law or contained in its standard
terms of business or otherwise given in the usual course of trading, the
Company has not given a condition or warranty, or made a representation,
in respect of goods or services supplied or agreed to be supplied by it,
or accepted an obligation that could give rise to a liability after the
goods or services have been supplied by it.
10.7 Neither BBH nor JWT nor any other advertising agency nor any person
connected with an advertising agency has (or has in the previous 24
months had) any interest, proposed interest or intention to acquire an
interest in the profits of any Group Company or business, or part of the
business, of any Group Company, save as 48 pc shareholders in Pismo and
save in relation to Xxxx Studio Limited and Studio Response Ltd; and no
such agency or connected person receives from any Group Company
discounts commissions or rebates or any other fee calculated otherwise
than by reference to turnover supplied by such person.
10.8 No employee or director of Pismo or Troypeak or any Subsidiary or
connected person of any of them has any interest, direct or indirect, in
Studio Response Ltd or any company or undertaking carrying on similar
activities for Euro RSCG or any connected person.
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11. INFORMATION TECHNOLOGY
11.1 INFORMATION TECHNOLOGY
In the twelve months prior to the date hereof the Company has not suffered
and, so far as the Warrantors are aware without having made enquiry of
any third party, no other person has suffered any failures or bugs in or
breakdowns of any computer hardware or software used in connection with
the business of the Company which have caused any substantial disruption
or interruption in or to its use and the Warrantors do not know, without
having made enquiry of any third party, nor are they aware, of any fact
or matter which may so disrupt or interrupt or affect the use of such
equipment following the acquisition by the Purchaser of the Shares
pursuant to this agreement on the same basis as it is presently used.
11.2 So far as the Warrantors are aware, all computer systems used and
planned to be used in the business of the Company comply with Year 2000
Conformity.
11.3 All computer systems, excluding software, used in the business of the
Company are owned and operated by and are under the control of the
Company and are not wholly or partly dependent on any facilities which
are not under the ownership, operation or control of the Company. No
action will be necessary to enable such systems to continue to be used
in the business of the Company to the same extent and in the same manner
as they have been used prior to the date hereof.
11.4 The Company is validly licensed to use the software used in its business
and no action will be necessary to enable it to continue to use such
software to the same extent and in the same manner as they have been
used prior to the date hereof.
12. LIABILITIES
12.1 BORROWINGS
The total amount borrowed by the Company from its bankers does not exceed
the limits of the applicable facilities and the total amount borrowed by
the Company from whatsoever source does not exceed any limitation on its
borrowing contained in its articles of association, or in any debenture
or loan stock deed or other instrument.
12.2 CONTINUANCE OF FACILITIES
Full and accurate details of all overdrafts, loans or other financial
facilities outstanding or available to the Company as at Completion are
set out in the Disclosure Letter and whether or not of a type which
would be required to be shown in or reflected in the Accounts (including
any indebtedness for moneys borrowed or raised under any acceptance
credit, bond, note, xxxx of exchange or commercial paper, finance lease,
hire purchase agreement, trade bills (other than those on terms normally
obtained) forward sale or purchase agreement or conditional sale
agreement or other transaction
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having the commercial effect of a borrowing) and copies of all documents
relating to such matters are annexed to the Disclosure Letter. None of
the Vendors' nor any of their Related Persons nor any member of the
Group has done anything whereby the continuance of any such facilities
in full force and effect might be affected or prejudiced.
12.3 BANK ACCOUNTS
A statement of all the bank accounts of the Company and of the credit or
debit balances on such accounts as at a date not more than seven days
before the date of this agreement has been supplied to the Purchaser.
The Company does not have any other bank or deposit accounts (whether in
credit or overdrawn) not included in such statement. Since such
statement there have been no payments out of any such accounts except
for routine payments and the balances on current account are not now
substantially different from the balances shown on such statements.
12.4 WORKING CAPITAL
Having regard to existing bank and other facilities, the 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 a period of
12 months from Completion and for the purposes of executing, carrying
out and fulfilling in accordance with their terms all orders, projects
and contractual obligations which have been placed with, or undertaken
by, the Company.
12.5 GUARANTEES AND INDEMNITIES
(a) The Company is not a party to and is not liable (including
contingently) under a guarantee, indemnity or other agreement to
secure or incur a financial or other obligation with respect to
another person's obligation.
(b) No part of the loan capital, borrowing or indebtedness in the
nature of borrowing of the Company is dependent on the guarantee
or indemnity of, or security provided by, another person other
than a Group Company.
12.6 EVENTS OF DEFAULT
No event has occurred or is subsisting or been alleged or so far as the
Warrantors are aware is likely to arise which:-
(a) constitutes an event of default, or otherwise gives rise to an
obligation to repay, or to give security under an agreement
relating to borrowing or indebtedness in the nature of borrowing
(or will do so with the giving of notice or lapse of time or
both);
(b) will lead to an Encumbrance constituted or created in connection
with borrowing or indebtedness in the nature of borrowing, a
guarantee, an
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indemnity or other obligation of the Company becoming enforceable
(or will do so with the giving of notice or lapse of time or
both); or
(c) with the giving of notice and/or lapse of time constitute or
result in a default or the acceleration of any obligation under
any agreement or arrangement to which the Company is a party or
by which it or any of its properties, revenues or assets is
bound.
12.7 GRANTS
The Company is not liable to repay an investment or other grant or subsidy
made to it by any person (including the Department of Trade and Industry
or its predecessor). No matter (including the execution and performance
of this agreement) exists which might entitle a body to require
repayment of, or refuse an application by the Company for, the whole or
part of a grant or subsidy.
13. PERMITS
13.1 COMPLIANCE WITH PERMITS
The Company has obtained and complied with the terms and conditions of each
Permit (full and accurate details of which are contained in the
Disclosure Letter).
13.2 STATUS OF PERMITS
There are no pending or threatened proceedings which might in any way affect
the Permits and the Warrantors are not aware, without having made
enquiry of any third party of any other reason why any of them should be
suspended, threatened or revoked or be invalid.
14. INSOLVENCY
14.1 WINDING UP
No order has been made, petition presented or resolution passed for the
winding up of the Company or for the appointment of a provisional
liquidator to the Company.
14.2 ADMINISTRATION
No administration order has been made and no petition for an administration
order has been presented in respect of the Company.
14.3 RECEIVERSHIP
No receiver, receiver and manager or administrative receiver has been
appointed of the whole or part of the Company's business or assets.
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14.4 COMPROMISES WITH CREDITORS
(a) No voluntary arrangement under section 1 of the Insolvency Xxx
0000 has been proposed or approved in respect of the Company.
(b) No compromise or arrangement under section 425 of the Companies
Xxx 0000 has been proposed, agreed to or sanctioned in respect of
the Company.
(c) The Company has not entered into any compromise or arrangement
with its creditors or any class of its creditors generally.
14.5 INSOLVENCY
The Company is not unable to pay its debts within the meaning of section 123
of the Insolvency Xxx 0000 (but for this purpose ignoring the reference
to "if it is proved to the satisfaction of the court that" in section
123(1)(e) and 123(2)).
14.6 PAYMENT OF DEBTS
The Company has not stopped paying its debts as they fall due.
14.7 DISTRESS ETC.
No distress, execution or other process has been levied on an asset of the
Company.
14.8 UNSATISFIED JUDGMENTS
There is no unsatisfied judgment or court order outstanding against the Company.
14.9 STRIKING OUT
No action is being taken by the Registrar of Companies to strike the
Company off the register under section 652 of the Companies Xxx 0000.
15. LITIGATION AND COMPLIANCE WITH LAW
15.1 LITIGATION
(a) Neither the Company nor a person for whose acts or defaults the
Company may be vicariously liable is involved, or has during the
three years ending on the date of this agreement been involved,
in a material civil, criminal, arbitration, administrative or
other proceeding in any jurisdiction, excluding debt collection
disputes for amounts totalling in aggregate less
than(pound)50,000. No civil, criminal, arbitration,
administrative or other proceeding in any jurisdiction is pending
or threatened by or against the Company or so far as the
Warrantors are aware, a person for whose acts or defaults the
Company may be vicariously liable.
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(b) So far as the Warrantors are aware, no matter exists which might
give rise to a civil, criminal, arbitration, administrative or
other proceeding in any jurisdiction involving the Company or a
person for whose acts or defaults the Company may be vicariously
liable.
(c) There is no outstanding judgment, order, decree, arbitral award
or decision of a court, tribunal, arbitrator or governmental
agency in any jurisdiction against the Company or, so far as the
Warrantors are aware, against a person for whose acts or defaults
the Company may be vicariously liable.
15.2 COMPLIANCE WITH LAW
The Company has conducted its business and dealt with its assets in all
material respects in accordance with all applicable legal and
administrative requirements in any jurisdiction.
15.3 INVESTIGATIONS
The Company is not and has not so far as the Warrantors are aware, been
subject to any investigation, enquiry or disciplinary proceeding
(whether judicial, quasi-judicial or otherwise) in any jurisdiction and
none is pending or threatened, and neither has it received any request
for information from, any court or governmental authority (including any
national competition authority and the Commission of the European
Communities and the EFTA Surveillance Authority) under any anti-trust or
similar legislation in any jurisdiction. So far as the Warrantors are
aware no matter exists which might give rise to such an investigation,
enquiry, proceeding or request for information.
15.4 COMPETITION LAW
(a) The Company is not nor has been a party to or concerned in any
agreement or arrangement, or conducted itself (whether by
omission or otherwise) in a manner, which:-
(i) could give rise to an investigation by the Office of Fair
Trading or the Monopolies and Mergers Commission under the
Fair Trading Xxx 0000;
(ii) has been or is required to be furnished to the Director
General of Fair Trading pursuant to the Restrictive Trade
Practices Acts 1976 and 1977;
(iii) contravenes the provisions of the Resale Prices Xxx 0000;
(iv) contravenes the provisions of the Trade Descriptions Acts
1968 and 1972;
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(v) constitutes an anti-competitive practice within the meaning
of the Competition Xxx 0000;
(vi) constitutes a breach of any relevant undertaking, order,
assurance or other measure made under the Fair Trading Xxx
0000, the Restrictive Trade Practices Acts 1976 and 1977, the
Resale Prices Xxx 0000, the Trade Descriptions Acts 1968 and
1972, or the Competition Xxx 0000;
(vii) infringes Articles 85 and/or 86 of the Treaty of Rome or
their equivalent provisions under the European Economic Area
Agreement or any other anti-trust or similar legislation in
any jurisdiction; or
(viii) is registrable, unenforceable or void (whether in whole or in
part) or renders it liable to civil, criminal or
administrative proceedings by virtue of any anti-trust,
anti-monopoly, anti-cartel, consumer law or any other similar
legislation in any jurisdiction.
(b) The Company has not given an undertaking or written assurance
(whether legally binding or not) to any court or governmental
authority (including any national competition authority and the
Commission of the European Communities and the EFTA Surveillance
Authority) under any anti-trust or similar legislation in any
jurisdiction.
(c) The Company is not subject to an order, regulation or decision
made by any court or governmental authority (including any
national competition authority and the Commission of the European
Communities and the EFTA Surveillance Authority) under any
anti-trust or similar legislation in any jurisdiction.
(d) The Company is not and has not been a party to or concerned in
any agreement, arrangement or concerted practice in respect of
which an application for negative clearance and/or an exemption
has been made to the Commission of the European Communities or
the EFTA Surveillance Authority.
15.5 UNLAWFUL PAYMENTS
Neither the Company nor, so far as the Warrantors are aware, any person for
whose acts or defaults the Company may be vicariously liable has:-
(a) induced a person to enter into an agreement or arrangement with
the Company by means of an unlawful or immoral payment,
contribution, gift or other inducement;
(b) offered or made an unlawful or immoral payment, contribution,
gift or other inducement to a government official or employee; or
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(c) directly or indirectly made an unlawful contribution to a
political activity.
All references to the Company in this paragraph 15 should be deemed to
include the Company's officers, agents and employees.
16. BROKERAGE OR COMMISSIONS
No person is entitled to receive from the Company or any Vendor or
Related Person or a connected person of any of them, a finder's fee,
brokerage or commission or other benefit in connection with this
agreement or anything in it and in particular the Company is not liable
to pay or give to any of its directors, officers, employees, agents and
advisers any sum or benefit whatsoever in connection with the sale of
the Shares and no such person has any interest in such sale.
17. DIRECTORS AND EMPLOYEES
17.1 PARTICULARS OF OFFICERS
The particulars of all employees annexed to the Disclosure Letter show the
names, job title, date of commencement of employment, date of birth and
period of continuous employment (calculated in accordance with Chapter 1
of part XIV of the ERA) of every employee of the Company and contain
details of negotiations which have taken place in the preceding two
years concerning pay for all employees of Pismo and the Pismo
Subsidiaries.
17.2 REMUNERATION AND BENEFITS
The particulars of all employees annexed to the Disclosure Letter show all
remuneration and other benefits:-
(a) actually provided; and
(b) which the Company is currently or conditionally bound to provide
(whether now or in the future)
to each officer and employee of the Company and are true and complete and
include particulars of and details of participation in all profit
sharing, incentive, bonus, commission, share option, medical, permanent
health insurance, directors' and officers' insurance, travel, car,
redundancy and other benefit schemes, arrangements and understandings
(the "SCHEMES") operated for all or any employees or former employees of
the Company or their dependants whether legally binding on the Company
or not.
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17.3 TERMS AND CONDITIONS
(a) The Disclosure Letter contains copies of all the standard terms
and conditions, staff handbooks and policies which apply to
employees of the Company and identifies which terms and
conditions apply to which employees.
(b) There are no terms and conditions in any contract with any
director, officer or employee of the Company pursuant to which
such person will be entitled to receive any payment or benefit or
such person's rights will change as a direct consequence of the
transaction contemplated by this agreement.
(c) There are no service agreements or contracts of employment
between the Company and any of its directors, officers or
employees containing any provision in addition to the matters
required to be contained therein under section 1 of the ERA.
(d) All employees of the Company have received a written statement of
particulars of their employment as required by section 1 of the
ERA.
(e) No employee of Troypeak or the Troypeak Subsidiaries have any
contractual rights whatsoever to an annual increase in salary
and/or any contractual benefits.
17.4 OPERATION OF THE SCHEMES
(a) The Schemes have at all times been operated in accordance with
their governing rules or terms and all applicable laws and all
documents which are required to be filed with any regulatory
authority have been so filed and all tax clearances and approvals
necessary to obtain favourable tax treatment for the Company
and/or the participants in the Schemes have been obtained and not
withdrawn and no act or omission has occurred which has or could
prejudice any such tax clearance and/or approval.
(b) No past or present director, officer, employee or any dependant
thereof or any other participant in any Scheme has made any claim
against the Company in respect of any Scheme and no event has
occurred which could or might give rise to any such claim.
17.5 NOTICE PERIODS
The terms of employment or engagement of all employees, agents, consultants
and professional advisers of the Company are such that their employment
or engagement may be terminated by not more than four weeks' notice
given at any time without liability for any payment including by way of
compensation or damages (except for unfair dismissal or a statutory
redundancy payment).
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17.6 CHANGES SINCE THE ACCOUNTS DATE
Since the Accounts Date the Company has not made, announced or proposed any
changes to the emoluments or benefits of or any bonus to any of its
directors, officers or employees and the Company is under no obligation
to make any such changes with or without retrospective operation.
17.7 LOANS
There are no amounts owing or agreed to be loaned or advanced by the Company
to any directors, officers and employees of the Company (other than
amounts representing remuneration accrued due for the current pay
period, accrued holiday pay for the current holiday year or for
reimbursement of expenses).
17.8 NOTICE OF TERMINATION AND LEAVE OF ABSENCE
(a) No director, officer or employee of the Company has given or
received notice to terminate his employment.
(b) There are no directors, officers or employees of the Company who
are on secondment, maternity leave or absent on grounds of
disability or other leave of absence (other than normal holidays
or absence of no more than one week due to illness).
17.9 PAYMENT UP TO COMPLETION
All salaries and wages and other benefits of all employees of the Company
have, to the extent due, been paid or discharged in full.
17.10 INDUSTRIAL RELATIONS
(a) No directors, officers or employees of the Company are members of
a trade union, staff association or any other body representing
workers and no such union, association or body is recognised by
the Company for the purposes of collective bargaining.
(b) There are no rights and liabilities relating or pursuant to any
collective agreements (whether with a trade union, staff
association or any other body representing workers and whether
legally binding or not) concerning the Company.
(c) Within the three years preceding the date hereof the Company has
not been engaged or involved in any trade dispute (as defined in
section 218 of the TULR(C)A) with any employee, trade union,
staff association or any other body representing workers and no
event has occurred which could or might give rise to any such
dispute and no industrial action involving employees of the
Company, official or unofficial, is now occurring or threatened
nor has
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any industrial relations or employment matter been referred
either by the Company or its employees or by any trade union
staff association or any other body representing workers to ACAS
for advice, conciliation or arbitration.
17.11 CLAIMS BY EMPLOYEES
Nopast or present director, officer or employee of the Company or any
predecessor in business has brought any claim or has any right of action
against the Company including any claim:-
(a) in respect of any accident or injury which is not fully covered
by insurance; or
(b) for breach of any contract of services or for services; or
(c) for loss of office or arising out of or connected with the
termination of his office or employment
and so far as the Warrantors are aware, no event or inaction has occurred
which could or might give rise to any such claim.
17.12 ENQUIRIES AND DISCRIMINATION
(a) There are no enquiries or investigations existing, pending or, so
far as the Warrantors are aware, threatened affecting the Company
in relation to any directors, officers or employees by the Equal
Opportunities Commission, the Commission for Racial Equality or
the Health and Safety Executive or any other bodies with similar
functions or powers in relation to workers.
(b) There are no terms or conditions under which any director,
officer or employee of the Company is employed, nor has anything
occurred or not occurred prior to Completion that may give rise
to any claim for sex discrimination, race discrimination,
disability discrimination or equal pay either under domestic
United Kingdom or European Law whether by such director, officer
or employee or a prospective director, officer or employee or
otherwise.
17.13 COMPLIANCE WITH LAWS
(a) The Company has complied in all material respects with all
relevant provisions of the Treaty of Rome, EC Directives,
statutes, regulations, codes of conduct, collective agreements,
terms and conditions of employment, orders, declarations and
awards relevant to the Company's directors, officers and
employees or the relations between the Company and any trade
union, staff association or any other body representing workers.
(b) There are no training schemes, arrangements or proposals, whether
past or present, in respect of which a levy may henceforth become
payable by the
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Company under the Industrial Training Act 1982 and pending
Completion no such schemes, arrangements or proposals will be
established or undertaken.
17.14 TRANSFER REGULATIONS
The Company has not entered into any agreement and no event has occurred
which may involve the Company in the future acquiring any undertaking or
part of one such that the Transfer Regulations may apply thereto.
17.15 DUTY TO INFORM AND CONSULT
The Vendors and the Company have complied with their obligations to inform
and consult with trade unions and other representatives of workers and
to send notices to the Secretary of State pursuant to sections 188 to
194 of the TULR(C)A and regulations 10 and 11 of the Transfer
Regulations.
17.16 RECORDS
The Company has maintained adequate and suitable records regarding the
service of its directors, officers and employees and such records comply
with the requirements of the Data Protection Xxx 0000.
17.17 BUSINESS IS CONDUCTED BY EMPLOYEES
The Company has not entered into any agreement or arrangement for the
management or operation of its business or any part thereof other than
with its employees.
18. PROPERTIES
18.1 ALL PROPERTY
The Properties comprise all the land and property owned, used or occupied by
and all the rights vested in the Company and all agreements whereby the
Company has any entitlement to income relating to any such land and
property at the date hereof.
18.2 NO OTHER LIABILITIES
The Company has no actual or contingent obligations or liabilities (in any
capacity including as principal contracting party or guarantor) in
relation to any lease, licence or other interest in, or agreement
relating to, land apart from the Properties.
18.3 LEGAL AND BENEFICIAL ENTITLEMENT
The Company is solely legally and beneficially entitled to the Properties
for the term of years granted or periods allowed by the leases and other
agreements brief details of which are set out in Schedule 8
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18.4 TITLE DEEDS AND DOCUMENTS
The Company has under its control all title deeds and documents necessary to
prove its title to the Properties and the same are original documents or
properly examined abstracts.
18.5 NO ENCUMBRANCES
Unless disclosed in schedule 8 the Properties and the title deeds thereto are
not and will not at Completion be subject to any Encumbrance or any
lease or agreement for lease.
18.6 NO DEFAULT
The Company has in all material respects and to the best of its knowledge
and belief (without having made any specific search enquiry or
investigation of any third party having the benefit of such matters or
entitled to enforce them) duly performed, observed and complied with any
covenants, restrictions, exceptions, reservations, conditions,
agreements, statutory and common law requirements, by-laws, orders,
building regulations and other stipulations and regulations affecting
the Properties and the uses of the Properties including the terms of any
lease, underlease, tenancy agreement or agreement to occupy under which
any part of any of the Properties is held and the terms of any agreement
for lease and (without prejudice to the generality of the foregoing) all
outgoings have been paid to date and (in the case of leasehold property)
all rents and (to the extent demanded) service charges have been paid to
date and no notice of any alleged breach of any of the terms of any such
lease or tenancy agreement as aforesaid has been served on the Company.
18.7 REPLIES TO ENQUIRIES
All disclosures and replies to enquiries relating to the Properties made or
given by or on behalf of the Vendors or the Company to the Purchaser or
its solicitors are now believed by the Vendor and the Company to the
best of their knowledge and belief (without having made any specific
search or enquiry of any third party) to be complete and correct in all
material respects.
18.8 FULL DISCLOSURE
Full details of all leases or other agreements relating to occupation of the
Properties have been disclosed in writing to the Purchaser or its
solicitors prior to the date hereof.
18.9 NO LITIGATION
The Company is not engaged in any litigation or arbitration proceedings in
connection with any of the Properties and has not received notice of any
alleged offences and has not to the best of its knowledge and belief
(without having made any specific search or enquiry of any third party)
committed any offences in connection with the Properties. So far as the
Vendor is aware (without having made any specific search or enquiry of
any third party) there is no cause of action which has arisen or accrued
or law suit or
Page 74 of 92
arbitration threatened or pending against the Company in connection with
the Properties and no circumstances exist which are likely to give rise
to any.
18.10 NO VITIATION OF INSURANCE
The Company has not to the best of its knowledge and belief (without having
made any specific search or enquiry of the insurers) done or omitted to
do anything whereby any policy of insurance has or may become void or
voidable and all requisite insurances are in force and all current
premiums which has been demanded by the relevant Landlords of the
Company are fully paid.
18.11 FIRE PRECAUTIONS XXX 0000
The Company has to the best of its knowledge and belief (without having made
any specific search or enquiry of the Fire Officer) complied with its
obligations under the Fire Precautions Xxx 0000 and (where requisite)
has applied for and/or obtained fire certificates thereunder in respect
of all premises owned or occupied by the Company to the extent required
by such Act.
18.12 CLOSURE OF GREAT MARLBOROUGH STREET
All costs, charges, expenses, liabilities and (so far as the Vendors are
aware) losses (being only those losses suffered prior to the date
hereof) in respect of the closure of Pismo's premises at Xxxxx
Xxxxxxxxxxx Xxxxxx, Xxxxxx, X0, the relocation of staff and related
redundancies, restructuring and reorganisation do not exceed
(pound)300,000.
19. PENSIONS
PISMO
"BENEFICIARY" means each present or former director, officers or employee who
has at any time, agreed to provide services to Pismo.
"DEATH IN SERVICE PLAN" means the Lifeboat Matey Death in Service Plan
established by a Declaration of Trust made by Pismo on 23 October 1996.
"EPP" means the Scottish Widows Executive Pension Plans relating to LJ
Keswick, XX Xxxxxxxx, XX Xxxxxx, R Xxxxx, A Tout, MB Xxxxxxx and V
Xxxxxxxx.
"GROUP PLAN" means the Sun Alliance Group Personal Pension Plan ("GPPP10871").
"SUPPLEMENTARY DEATH IN SERVICE PLAN" means the Lifeboat Matey Top Up Benefit
Scheme established by a Declaration of Trust made by Pismo on 23 October
1996.
Page 75 of 92
19.1 PENSION ARRANGEMENTS DISCLOSED
Save in respect of the Death in Service Plan, the EPP, the Group Plan and the
Supplementary Death in Service Plan (the "DISCLOSED PLANS") Pismo is
under no legal obligation or commitment, to pay, provide or contribute
towards any "RELEVANT BENEFITS" within the meaning of section 612 of the
TA or sickness or disability benefits to or in respect of any
Beneficiary and has not at any time participated in or contributed
towards any scheme or arrangement which has as its purpose or one of its
purposes the provision of any such benefits (other than schemes which
have been fully wound up).
19.2 EX GRATIA PENSIONS ETC.
As far as the Warrantors are aware Pismo has not made or proposed any
voluntary payments to any person in respect of any relevant benefit (as
defined in paragraph 19.1 of this schedule).
19.3 UNDERTAKINGS AND ASSURANCES
No legally binding undertaking or assurance has been given by Pismo to any
person as to the continuance, introduction, increase or improvement of
any such benefit or scheme or arrangement as is referred to in paragraph
19.1 of this schedule (including, for the avoidance of doubt, the
Disclosed Plans).
19.4 DISCLOSURE OF DOCUMENTS
Current material details of the EPP as listed below, the Death in Service Plan
and the Supplementary Death in Service Plan have been given to the
Purchaser which are as follows:-
(a) The consent policy documents and letters of the Inland Revenue
approval for the EPP.
(b) The policy document relating to the Death in Service Plan and the
Supplementary Death in Service Plan.
(c) Names of all current members of the Disclosed Plans.
(d) Details of all contributions and premiums currently payable or
being paid by in respect of the members of the Disclosed Plans.
(e) Copies of written confirmation from the Pensions Scheme's Office
of the Inland Revenue of the EPP's and Death in Service Plan's
status as exempt approved schemes within the meaning of section
592 TA.
(f) Names of all companies or other bodies participating in the EPP
or in the Death in Service Plan or the Supplementary Death in
Service Plan.
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(g) A copy of the Declaration of Trust relating to the Death in
Service Plan.
19.5 PAYMENT OF CONTRIBUTIONS
There are no contributions or premiums in relation to the Disclosed Plans
which have fallen due but remain unpaid.
19.6 EXEMPT APPROVAL
As far as the Warrantors are aware the EPP and the Death in Service Plan
are exempt approved schemes within the meaning of section 592(1) of the
TA and there is no reason why such approval might be withdrawn or cease
to apply.
19.7 CONTRACTING OUT
No employee of Pismo is in contracted-out employment as defined in the
Xxxxxxx Xxxxxxx Xxx 0000.
19.8 INSURANCE OF DEATH BENEFITS
All benefits which may be payable under the EPP or Death in Service Plan
(other than a refund of members' contributions with interest where
appropriate) are fully insured with an insurance company. There is no
ground as far as the Warrantors are aware on which the insurance company
concerned might avoid liability under any such policy or contract. Each
Beneficiary as far as the Warrantors are aware has been covered for such
insurance by such insurance company at its normal rates applicable for
their age.
19.9 LEGAL COMPLIANCE
As far as the Warrantors are aware, having made due enquiry of Scottish
Widows, the Disclosed Plans have been administered in accordance with
the trusts powers and provisions of their governing documentation and
have been administered in accordance with and comply with all applicable
legislation and the general requirements of trust law and (without
limitation to the foregoing) the provisions of Article 119 Treaty of
Rome.
19.10 NO CLAIMS OR LITIGATION
As far as the Warrantors are aware no claim has been made or threatened
against the trustees of any of the EPP, the Death in Service Plan or the
Supplementary Death in Service Plan or Pismo (including any complaint to
the Pensions Ombudsman) in respect of any act, event, omission or other
matter arising out of or in connection with the EPP, the Death in
Service Plan or the Supplementary Death in Service Plan (other than
routine claims for benefits) and so far as the Warrantors are aware
there are no circumstances which may give rise to any such claim.
Page 77 of 92
19.11 ACCESS TO MEMBERSHIP
Every Beneficiary who is entitled to membership of the EPP, Death in Service
Plan or Supplementary Death in Service Plan has been invited to join as
of the date on which he became so entitled.
19.12 MONEY PURCHASE BENEFITS ONLY
In addition to lump sum death in service benefits the Disclosed Plans
provide only money purchase benefits (as defined in section 181 of the
Pension Schemes Act 1993).
19.13 TROYPEAK
(a) Save as disclosed in the Disclosure Letter, Troypeak or the
Troypeak Group is under no legal obligation or commitment, to
pay, provide or contribute towards any relevant benefit (as
defined in paragraph 19.1 of this Schedule) or sickness or
disability benefits to or in respect of any Beneficiary and has
not at any time participated in or contributed towards any scheme
or arrangement which has as its purpose or one of its purposes
the provision of any such benefits (other than schemes which have
been fully wound up).
(b) All pension contributions due in respect of any pension scheme,
under any contract of employment in respect of any of the
individuals listed in the Disclosure Letter have been paid up to
date and there are none outstanding.
(c) As far as the Warrantors are aware, neither Troypeak nor the
Troypeak Group have made or have proposed to make any voluntary
payments to any person in respect of any relevant benefit (as
defined in paragraph 19.1 of this schedule).
(d) No legally binding undertaking or assurance has been given by
Troypeak or the Troypeak Group to any person as to the
continuance, introduction, increase or improvement of any such
benefit or scheme or arrangement as is referred to in paragraph
19.13(a) of this schedule.
20. TAXATION
INFORMATION AND RETURNS
20.1 RETURNS
The Company has made all returns and supplied all information and given all
notices to the Inland Revenue or other Taxation Authority as reasonably
requested or required by law within any requisite period and all such
returns and information and notices are correct and accurate in all
respects and are not the subject of any dispute and there
Page 78 of 92
are no facts or circumstances likely to give rise to or be the subject
of any such dispute.
20.2 DISCLOSURES
All statements and disclosures made to any Taxation Authority in connection
with any provision of the Taxation Statutes whatsoever were when made
and remain complete and accurate in all material respects.
20.3 CLEARANCES
No action has been taken by the Company in respect of which any consent or
clearance from the Inland Revenue or other Taxation Authority was
required except in circumstances where such consent or clearance was
validly obtained and where any conditions attaching thereto were met and
will, immediately following Completion, continue to be met.
20.4 TAX DEED
No event has occurred which would or might give rise to a claim under the
Tax Deed upon or after the execution thereof.
PROVISION FOR AND PAYMENT OF TAX
20.5 GENERAL
The Accounts make full provision or reserve in respect of any period ended
on or before the Accounts Date for all Tax assessed or liable to be
assessed on the Company or for which it is accountable at the Accounts
Date whether or not the Company has or may have any right of
reimbursement against any other person including Tax in respect of
property (of whatever nature) income, profits or gains held, earned,
accrued or received by or to any person on or before the Accounts Date
or by reference to any event occurring, act done or circumstances
existing on or before that date including distributions made down to
such date or provided for in the Accounts and proper provision has been
made and shown in the Accounts for deferred Tax in accordance with
generally accepted accounting principles.
20.6 PAYMENT OF TAX
(a) The Company has duly and punctually paid all Tax to the extent
that the same ought to have been paid and is not liable nor has
it within three years prior to the date hereof been liable to pay
any penalty or interest in connection therewith.
(b) The Company has duly deducted Tax from all payments made where
required by applicable legislation and accounted to the relevant
Tax Authority for tax so deducted.
Page 79 of 92
20.7 PAY AS YOU EARN
The Company has properly operated the PAYE system deducting Tax as required
by law from all payments to or treated as made to or benefits provided
for employees, ex-employees or independent contractors of the Company
(including any such payments within section 134 of the TA) and duly
accounted to the Inland Revenue for Tax so deducted and has complied
with all its reporting obligations to the Inland Revenue in connection
with any such payments made or benefits provided, and no PAYE audit or
DSS visit in respect of the Company has been made by the Inland Revenue
nor has the Company been notified that any such audit will be made.
20.8 SECONDARY LIABILITY
No transaction or event has occurred in consequence of which the Company is
or may be held liable for any Tax or deprived of relief or allowances
otherwise available to it in consequence of any Tax or may otherwise be
held liable for or to indemnify any person in respect of any Tax, where
some other company or person is or may become primarily liable for the
Tax in question (whether by reason of any such other company being or
having been a member of the same group of companies or otherwise).
CORPORATION TAX
20.9 CHANGES IN TRADE ETC.
(a) Within the period of three years ending with the date hereof
there has been:-
(i) no major change in the nature or conduct of any trade or
business carried on by the Company within the meaning of
section 245 or 768 of the TA;
(ii) no major change in the nature or conduct of any trade or
business of a company which has surrendered advance
corporation tax to the Company under the provisions of
section 240 of the TA.
(b) Within the period of three years ending with the date hereof
there has been no cessation or discontinuance of any trade or
business carried on by the Company nor has the scale of
activities in any trade or business carried on by the Company
within three years hereof become small or negligible.
(c) Prior to the execution of this agreement no change of ownership
of the Company has taken place such that either or both of
section 245 or 768 of the TA has or may be applied to deny relief
in respect of a loss or losses of the Company or any set off of
advance corporation tax.]
Page 80 of 92
20.10 DEDUCTIONS
The Company has not made any payment or incurred any liability to make any
payment in either case of a revenue nature which could be disallowed as
a deduction in computing the taxable profits of the Company or as a
charge on the Company's income including any payment which could be
disallowed under sections 74 (general rules as to deductions not
allowable), 125 (annual payments for non-taxable consideration), 338-340
(allowance of charges on income), 779-785 (leased assets) or 787
(restriction of relief for payments of interest) of the TA.
20.11 SALES AT UNDERVALUE/OVERVALUE
All transactions entered into by the Company with any person connected with
it have been entered into on an arm's length basis and the consideration
(if any) charged or received or paid by the Company on all transactions
entered into by it has been equal to the consideration which might have
been expected to be charged, received or paid (as appropriate) between
independent persons dealing at arm's length and no notice or enquiry
pursuant to section 770 of the TA or the transfer pricing provisions of
any arrangements made under section 788 of the TA (relief by agreement
with other countries) has been made in connection with any of such
transactions.
20.12 EXCHANGE GAINS AND LOSSES
The Company is not and has not since the Accounts Date been:-
(a) the holder of a qualifying asset;
(b) subject to a qualifying liability; or
(c) party to a currency contract
for the purposes of chapter II of the FA 1993.
20.13 LOAN RELATIONSHIPS
The Company is not party to any loan relationship as defined in Chapter II
of the Finance Act, 1996 which may give rise to any debits or credits
(other than in relation to interest on an accruals basis).
CAPITAL ASSETS
20.14 CAPITAL ALLOWANCES
(a) No balancing charge in respect of any capital allowances claimed
or given would arise if all the assets of the Company were to be
realised for a consideration equal to the amount of the book
value thereof as shown or included in the Accounts.
Page 81 of 92
(b) All necessary conditions for all capital allowances (as defined
in section 832(1) of the TA) claimed by the Company were at all
material times satisfied and remain satisfied and the Company has
not since the Accounts Date become liable for any balancing
charge.
(c) The capital allowances computations for the period ending on the
Accounts Date are complete, correct and annexed to the Disclosure
Letter.
20.15 FINANCE LEASES
The Company is not and has not been the lessee under any leases of
plant or machinery except for the Leases.
DISTRIBUTIONS
20.16 REPAYMENTS OF SHARE CAPITAL
(a) The Company has not at any time after 6 April 1965 repaid or
agreed to repay or redeemed or agreed to redeem or purchased or
agreed to purchase (or made any contingent purchase contract
within the meaning of section 165 of the Companies Act 1985) in
respect of any of its issued share capital or any class thereof.
Further the Company has not after 6 April 1965 capitalised or
agreed to capitalise in the form of shares, debentures or other
securities or in paying up amounts unpaid on any shares,
debentures or other securities any profits or reserves of any
class or description or passed or agreed to be passed any
resolution to do so.
(b) The Company has not made (and will not be deemed to have made)
any distribution within the meaning of sections 209 and 210
(bonus issue following repayment of capital) of the TA since 5
April 1965 except dividends properly authorised and shown in its
Accounts nor is the Company bound to make any such distribution.
(c) The Company has not been party to any transaction involving an
exempt distribution within section 213 of the TA within the
period commencing five years prior to the Accounts Date.
CHARGEABLE GAINS
20.17 SALES AT BOOK VALUE
No chargeable gain or profit (disregarding the effects of any indexation
relief available) would arise if any asset of the Company (other than
trading stock) were to be realised for a consideration equal to the
amount of the book value thereof as shown or included in the Accounts.
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ANTI-AVOIDANCE PROVISIONS
20.18 TAX SCHEMES
The Company has not entered into nor been a party to nor otherwise involved
in any scheme or arrangement designed wholly or partly for the purpose
of avoiding, reducing or deferring Tax.
FOREIGN ELEMENT
20.19 RESIDENCE
The Company is not and never has been liable for tax in any jurisdiction
other than the United Kingdom.
CLOSE COMPANIES
20.20 CLOSE COMPANIES - TRANSFERS OF VALUE
The Company has made no transfer of value such as is specified in section
94(1) (or section 99(2)) of the ITA.
20.21 CLOSE COMPANIES - LOANS TO PARTICIPATORS
The Company has not made any loan advance or payment or given any
consideration falling within sections 419-420 or 422 of the TA.
20.22 CLOSE COMPANIES - DISTRIBUTIONS
The Company has made no payments and conferred no benefits falling to be
treated as distributions under section 418 of the TA.
20.23 CLOSE COMPANIES - SHORTFALL ETC.
The Company is not and never has been a close investment-holding company as
defined at section 13A of the TA.
20.24 CLOSE COMPANIES - TRANSFERS AT UNDERVALUE
The Company has not made a transfer at an undervalue so that section 125 of
the TCGA could apply.
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GROUPS OF COMPANIES
20.25 GROUP COMPANIES
The Company is not, nor has it ever been, a member of a group of companies
as defined by section 170 of the TCGA which contains or contained any
companies other than the Companies.
INHERITANCE TAX
20.26 INHERITANCE TAX
(a) The Company is not, and will not become, liable to be assessed to
inheritance tax as donor or donee of any gift or transferor or
transferee of value (actual or deemed) nor as a result of any
disposition, chargeable transfer or transfer of value (actual or
deemed) made by or deemed to be made by any other person.
(b) There is no unsatisfied liability to inheritance tax attached or
attributable to the Shares or any asset of the Company and in
consequence no person has the power to raise the amount of such
tax by sale or mortgage of or by a terminable charge on any of
the Shares or assets of the Company as mentioned in section 212
of the ITA and none of the Shares or assets of the Company are
subject to an Inland Revenue charge within section 237 of the
ITA.
VALUE ADDED TAX
20.27 VALUE ADDED TAX
(a) The Company is a registered taxable person for the purpose of the
VAT legislation and has not at any time been treated as a member
of a group of companies for such purpose and has not made any
application to be so treated and no circumstances exist whereby
the Company would or might become liable for value added tax as
an agent or otherwise by virtue of section 47 of the VATA.
(b) The Company has complied in all respects with the requirements
and provisions of the VAT legislation and has made and maintained
and will pending Completion make and maintain accurate and up to
date records invoices accounts and other documents required by or
necessary for the purposes of the VAT legislation and the Company
has at all times punctually paid and made all payments and
returns required thereunder.
(c) The Company has not made any exempt supplies in consequence of
which it is or will be unable to obtain credit for all input tax
paid by it during any VAT quarter ending after the Accounts Date.
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20.28 CAPITAL GOODS SCHEME
There are set out in the Disclosure Letter with express reference to this
Warranty full details of each of the assets of the Company of a kind
described in part XV of the Value Added Tax Regulations 1995 (SI No
2518) (adjustments to the deduction of input tax on capital items) in
relation to which that part could operate to adjust the amount of input
tax deducted, including in particular:-
(a) a description (including, in the case of land, or a building or
part of a building the nature of the tenure and the time that the
tenure has to run), the date of acquisition (or, in the case of a
lease, the date of grant) and the price paid and VAT upon the
purchase or acquisition of the capital item in question;
(b) the proportion of the VAT on the purchase price for which credit
has been claimed, including any adjustments made under Part XV,
Value Added Tax Regulations 1995.
STAMP DUTY
20.29 STAMP DUTY
All documents in the enforcement of which the Company is or may be
interested have been duly stamped and since the Accounts Date the
Company has not been a party to any transaction whereby the Company was
or is or could become liable to stamp duty reserve tax.
21. ENVIRONMENT
These Warranties are made on the basis that and the Warrantors acknowledge
that the Purchaser has not searched any public register or made
enquiries of any public body or Competent Authority, its successors in
title and assigns:-
21.1 The Company has conducted its business at all times in compliance with
Environmental Laws.
21.2 So far as the Warrantors are aware, no circumstance exists which may
result, to the detriment of the Company, in breach, modification,
suspension, or revocation of any Environmental Permit or may result in
any such Environmental Permit not being extended, renewed, granted or
(where necessary) transferred.
21.3 So far as the Warrantors are aware, but having taken no positive
measures to confirm the same, no work or expenditure, including work and
expenditure in respect of upgrading plant or processes or the removal or
clean-up of Hazardous Matter, is or may in the foreseeable future be
required under the conditions of any Environmental Permits or under any
Environmental Laws (whether or not actually enforced) in order for the
Company to carry on lawfully its business as carried on at the date
hereof.
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21.4 No storage tanks of any kind, including related underground pipework,
are or have been located so far as the Warrantors are aware, at any time
whatsoever at, on, or under the Properties and/or the Former Property.
21.5 At no time has the Company or any member of the Group had knowledge of
and/or received any written notice, claim, complaint or other
communication alleging, any actual or potential Environmental Liability.
22. INFORMATION
22.1 THE AGREEMENT
The information set out in schedules 1, 2, 3 and 8 of this agreement is
true, complete, accurate and not misleading.
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SCHEDULE 6
LIMITATIONS ON WARRANTORS' LIABILITY
1. TIME LIMIT FOR CLAIMS
1.1 Save in the case of any liability based upon fraud and including without
limitation fraudulent concealment by any of the Warrantors, the
Warrantors shall not be liable in respect of a claim under the
Warranties unless written notice of such claim setting out reasonable
details of the relevant claim is served upon the Warrantors' Solicitors
on behalf of the Warrantors:-
(a) in the case of a claim under the Warranties (other than the
Warranties relating to Tax and Year 2000 Conformity), by not
later than 5.00 p.m. on the second anniversary of Completion;
(b) in the case of a claim under the Warranties relating to Year 2000
Conformity by not later than 5.00 p.m. on 1 July 2001; and
(c) in the case of a claim under Warranties relating to Tax by not
later than (in the case of a claim against Troypeak Vendors
except NatWest) 31 October 2004 and (in the case of a claim
against Pismo Vendors) 30 April 2004.
2. MONETARY LIMIT ON CLAIMS
Save in the case of any liability based upon fraud and including, without
limitation, fraudulent concealment by any of the Warrantors:
(a) the Troypeak Vendors (except NatWest) shall not be liable in
respect of a claim under the Warranties or under the Troypeak Tax
Deed, save for claims made pursuant to clause 2.1(a)(iv) or (v)
of the Troypeak Tax Deed, unless and until the aggregate amount
of all such substantiated claims against them
exceeds (pound)50,000 in which event their liability shall be for
the total amount of such substantiated claims and shall not be
limited to the excess provided that (save in the case of fraud or
fraudulent concealment by any of the Troypeak Vendors (except
NatWest)) the aggregate liability of the Troypeak Vendors (except
NatWest) in respect of all claims under the Warranties and the
Troypeak Tax Deed shall not in any circumstances exceed the
aggregate of (i) 82.35% of(pound)6,652,750 ("Basic Amount") and
(ii) 82.35% of such part of the Adjustment Payment as is actually
due (disregarding clause 2.6(f)-(j)) ("the Due Payment") to the
Troypeak Vendors (except NatWest)
Page 87 of 92
Provided that, before the Due Payment is due, nothing in this
para. (a) shall restrict the bringing and pursuing of any such
claims and proceedings in respect thereof to judgment to
establish liability and (insofar as the principal amount of
claims do not exceed the Basic Amount) to establish quantum and,
insofar as the principal amount of claims exceed the Basic
Amount, the parties will procure that proceedings are stayed by
agreement pending determination of the Due Payment.
(b) the Pismo Vendors shall not be liable in respect of a claim under
the Warranties or the Pismo Tax Deed unless and until the
aggregate amount of all such substantiated claims against them
exceeds(pound)50,000 in which event their liability shall be for
the total amount of such substantiated claims and shall not be
limited to the excess provided that (save in the case of fraud or
fraudulent concealment by any of the Pismo Vendors) the aggregate
liability of the Pismo Vendors in respect of all claims under the
Warranties and the Pismo Tax Deed shall not in any circumstances
exceed the aggregate of (i)(pound)6,934,050 ("the Basic Amount)
and (ii) such part of the Adjustment Payment (disregarding clause
2.6(f)-(j)) as is actually due ("the Due Payment")to the Pismo
Vendors
Provided that, before the Due Payment is due, nothing in this para. (b)
shall restrict the bringing and pursuing of any such claims and
proceedings in respect thereof to judgment to establish liability and
(insofar as the principal amount of claims do not exceed the Basic
Amount) to establish quantum and, insofar as the principal amount of
claims exceed the Basic Amount, the parties will procure that
proceedings are stayed by agreement pending determination of the Due
Payment.
In this paragraph 2 "substantiated" means a claim for which any of the
Warrantors are liable (whether individually, as a contributory or
otherwise), and which is admitted, settled without admission of
liability, or proved or determined in a court of competent jurisdiction.
3. DISCLOSURE
The Vendors, shall not be liable in respect of a claim under the
Warranties to the extent that the same or circumstances giving rise
thereto are fairly disclosed in the Disclosure Letters or are expressly
provided for or noted in the Accounts. No letter, document or other
communication shall be deemed to be disclosed except and to the extent
that the same is referred to in, and a copy attached to, the Disclosure
Letters.
Page 88 of 92
45. No liability (whether in contract, tort or otherwise) shall attach to
the Vendors in respect of any claim under the Warranties to the extent
that:-
(a) the claim or the events giving rise to the claim would not have
arisen but for any voluntary act, omission or transaction of the
Purchaser's Group after Completion which could reasonably have
been avoided otherwise than in the ordinary course of the
business of the Company as at present carried on and which the
Purchaser knew, or ought reasonably to have known, could give
rise to a claim, or which would not have arisen but for any
claim, election or surrender or disclaimer made or omitted to be
made or notice or consent given or omitted to be given by the
Purchaser's Group under the provisions of any statutes relating
to Tax the making or giving of which was taken into account in
computing the provision for taxation in the Accounts and notified
to the Purchaser in writing at least 14 days prior to the date on
which any such thing should have been due under the provisions of
the relevant legislation;
(b) provision or reserve in respect of the matter giving rise to the
claim shall have been made in the Accounts;
(c) the claim occurs wholly or partly out of or the amount thereof is
increased as a result of:-
(i) any change in the accounting principles or practices of the
Purchaser's Group introduced or having effect after the
date of this agreement, unless the same is introduced to
bring the accounting principles and practices into line
with generally accepted accounting principles and practices
in relation to a business of the type carried on by the
Companies; or
(ii) any increase in the rates of taxation made after the date
hereof; or
(iii) any change in law made after the date hereof;
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