DATED OCTOBER 1, 1999
___________________________________________
AGREEMENT FOR THE
ACQUISITION OF
BUYERSGUIDE LIMITED
BY
XXXXXXXXXXXX.XXX PLC
XxXxxxxx, Xxxxxxxxxx & Xxxx
City Tower
00 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0 X 0XX
Tel: 0000 000 0000
Fax 0000 000 0000
E.mail: kstenning @xxxxxxxxxx.xxx
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CONTENTS
CLAUSE PAGE
SCHEDULE 1
Vendors and their Holdings
SCHEDULE 2
Details of the Companies and their Subsidiaries
SCHEDULE 3
The Properties
SCHEDULE 4
Warranties
SCHEDULE 5
Vendor Protection
SCHEDULE 6
Deed of Indemnity
2
THIS AGREEMENT is made on 1st October 1999
BETWEEN:
1. THE SEVERAL PEOPLE WHOSE NAMES AND ADDRESSES ARE SET OUT IN SCHEDULE 1
(the "Vendors")
2. XXXXXXXXX.XXX.XXX PLC of 00 Xxxxxx Xxxxxx, Xxxxx, Xxxxxxxxx, Xxxxxxx XX00
0XX (the "Purchaser").
RECITALS
A. The Company is a private limited company incorporated in England under the
Companies Xxx 0000. Further details relating to the Company are set out in
Schedule 2.
B. The Vendors are the registered holders of all of the Shares.
C. The Vendors are willing to sell the Shares to the Purchaser on the terms
and subject to the conditions set out in this agreement free from
Encumbrances.
D. The Vendors have made representations to the Purchaser in the terms of the
Warranties to the intent that the Purchaser should rely on such Warranties
in entering into this agreement.
THE PARTIES AGREE AS FOLLOWS:
1. INTERPRETATION
1.1. The following provisions shall have effect for the interpretation of this
agreement.
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1.2. The following words, expressions and abbreviations shall, unless the
context otherwise requires, have the following meanings:-
"AFFILIATE" means, in respect of any body corporate, a
body corporate which is its subsidiary or
holding company, or a company which is a
subsidiary of that holding company, and each
such company.
"ACTIVITIES" means any activities or operation or
process carried out by the Company at
the Properties;
"AGREED FORM" means the form agreed between the
parties on or prior to the date of this
agreement and initialled for the purposes of
identification by their respective
solicitors;
"AUDITORS" means Ernst & Young of Xxxx Xxxxx
Xxxxxxx XX0 0XX
"BUSINESS DAY" means a day (other than Saturday or
Sunday) on which banks generally are
open for business in London;
"CA" means the Companies Xxx 0000;
"CAA 90" means the Capital Xxxxxxxxxx Xxx 0000;
"COMPLETION" means the completion of the sale and
purchase of the Shares in accordance
with clause 5;
"THE COMPANY" means Buyers Guide Limited a corporation
organised and existing under the laws of
England and Wales;
4
"COMPLETION DATE" means the date of this Agreement;
"CONTINGENT CONSIDERATION" means a sum which shall be equal to ten
(10) times the amount, if any, by which (a)
the Pre-tax Income for the twelve (12)
consecutive months ending 31st March 2000
shall as shown by the management accounts of
the Partnership for the period 1 April 1999
until 30 September 1999 after deducting in
respect of the period 1 April 1999 until
Completion the sum of (pound)52,614 and the
Company's 2000 Fiscal Period Financial
Statements for the period to 31 March 2000
exceed (b)(pound)250,000. Such Contingent
Consideration shall be paid in the form of
TownPages Shares, valued at the same per
share price as the Fixed Consideration paid
at Completion pursuant to clause 3.1.
"CONTINGENT TOWNPAGES means the number of TownPages Shares to
SHARES" be issued by the Purchaser to the
Vendors in payment of the Contingent
Consideration, as provided in clause 3.2;
"DIRECTOR" means a director for the time being of
any Company
"DISCLOSURE LETTER" means a letter dated as of the date of this
Agreement together with the attachments
thereto addressed by the Vendors to the
Purchaser disclosing exceptions to the
Warranties;
5
"DISTRIBUTION" means a distribution as defined by
sections 209 to 211 (inclusive) of the
ICTA and section 418 of the ICTA;
"EARNOUT PERIOD" means the period from the Completion
Date until 31st March 2000
"ENCUMBRANCES" means any mortgage, charge (whether fixed or
floating), pledge, lien, security interest
or other third party right or interest
(legal or equitable) over or in respect of
the relevant asset, security or right;
"ENVIRONMENT" means any and all organisations
(including without limitation, man
ecosystems, Properties and the media of
air in buildings, natural or manmade
structures, below or above ground) water
(as defined in Section 104(1) of the
Water Resources Xxx 0000 and within
drains and sewers) and land (including
under any water as described above and
whether above or below surface);
"ENVIRONMENTAL CONSENT" means any consent, approval, permit,
licence order, filing, authorisation,
exemption, registration, permission,
reporting or notice requirement and any
related agreement required under any
Environmental Law;
6
"ENVIRONMENTAL LAWS" means all international, EU, national or
local statutes, which for the avoidance
of doubt shall include section 57 and
schedule 22 of the Environment Xxx 0000
and the guidance and regulations adopted
under those provisions, by-law, 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 which are binding in
relation to the Properties and/or upon
any Company in the relevant jurisdiction
in which any Company has been or is
operating on or before Completion;
"2000 FISCAL PERIOD" means the fiscal period of the Company
which commenced 1 October 1999 and ends
31 March 2000;
"2000 FISCAL YEAR AUDIT" means the audit report of the Company's
Auditors of the 2000 Fiscal Period
Financial Statements;
7
"2000 FISCAL PERIOD
FINANCIAL STATEMENTS" means the financial statements of the
Company as at 31 March 2000 and for the
2000 Fiscal Period (including therein,
the statement of income, balance sheet,
statement of Vendor' equity, (if
appropriate) and statement of cash
flows, all accompanied by appropriate
footnotes prepared in accordance with
GAAP); which 2000 Fiscal Period
Financial Statements shall be audited
and approved as to form and content by
the Auditors.
"GAAP" means generally accepted accounting
principles, consistently applied, as shall
be prevailing from time to time in the
United States, as approved by the American
Institute of Certified Public Accountants;
"ICTA" means the Income and Corporation Taxes
Xxx 0000;
"ITA" means the Inheritance Tax Xxx 0000 and any
reference thereto shall include any
enactment repealed or modified thereby as if
section 275 of the ITA applied in like
manner to this agreement;
8
"INTELLECTUAL PROPERTY" means patents, trade marks, service
marks, rights (registered or
unregistered) in any designs;
applications for any of the foregoing;
trade or business names; copyright
(including rights in computer software)
and topography rights; know-how; secret
formulae and processes; lists of
suppliers and customers and other
confidential and proprietary knowledge
and information; rights protecting
goodwill and reputation; database rights
and rights under licences and consents
in relation to such things and all right
or forms of protection of a similar
nature to any of the foregoing or having
equivalent effect anywhere in the world;
"LAST ACCOUNTS DATE" means 31 March 1999;
"PARTNERSHIP" means the business of an internet based
directory for Councils and others carried on
by the Vendors in partnership until 30th
September 1999.
"PERMITTED TRANSFEREE" means, with respect to each Vendor, such
Vendors' affiliates (as such term is
defined in Rule 405 under the Securities
Act, spouse and descendants (whether
natural or adopted), any trust
established solely for the benefit of
such Vendor and/or such Vendor's spouse
and/or descendants, and any foundation
established by a Vendor or to which such
Vendor is a substantial contributor.
9
"PLANNING ACTS" means the Town and Country Planning Acts
for the time being in force;
"PRE-TAX INCOME" means the net income of the Company for
the 2000 Fiscal Year, after deduction of
all expenses and costs, including all
operating expenses, interest, but before
deduction and provision for taxes on
income of the Company for such Fiscal
Year, all as set forth in the 2000
Fiscal Year Financial Statements;
"PRINCIPAL ACCOUNTS" means the balance sheet as at the
Last Accounts Date and profit and loss
account for the year ended on the Last
Accounts Date for the Partnership
"PROPERTIES" means the leasehold Properties of the
Company shortly described in Schedule 3;
"PURCHASER'S SOLICITORS" means XxXxxxxx Xxxxxxxxxx & Xxxx xx Xxxx
Xxxxx, Xxxxx 0, 00 Xxxxxxxxxx Xxxxxx,
Xxxxxx, XX0X 0XX;
"PURCHASER'S U.S. COUNSEL" means Xxxxxxxxx Traurig, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, XXX;
"SHARES" means the entire issued share capital in
each of the Company
"TAXATION" means all forms of taxation including
but without limitation:
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1. any charge, tax duty or levy upon
income, profits,chargeable gains or
development value, land, any interest
in land or in any other Properties,
or documents or supplies or other
transactions;
2. income tax, corporation tax,
capital gains tax, inheritance
tax, value added tax, stamp duty,
stamp duty reserve tax, capital
duty, customs and other import
duties, national insurance
contributions, general rates,
water rates or other local rates;
3. any liability for sums equivalent to
any such charge, tax, duty, levy or
rates or for any related penalty,
fine or interest;
"TCGA" means the Taxation of Chargeable Gains
Xxx 0000 and any reference thereto shall
include any enactment repealed or
modified thereby;
"TOWNPAGES SHARES" means ordinary share of 1p each in the
capital of the Purchaser
"VATA" means the Value Added Tax Xxx 0000;
"VENDORS' SOLICITORS" means Xxxxx Xxxxxxxxxx & Forth of 0
Xxxxxx Xxxxxx Xxxxxxxxx Xxxx Xxxx XX0
0XX
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"WARRANTIES" means the representations and
warranties, covenants and undertakings
set out in Clause 5 and Schedule 4;
"WARRANTY CLAIM" means any claim made by the Purchaser
for breach of any of the Warranties.
1.3. References to "FA" followed by a stated year means the Finance Act of that
year.
1.4. References to the parties hereto include the respective successors in
title to the whole of their respective undertakings and, in the case of
individuals, to their respective estates and personal representatives.
1.5. References to persons shall include bodies corporate and unincorporated,
associations, partnerships and individuals. Words denoting the singular
shall include the plural and words denoting any gender shall include all
genders.
1.6. References to statutes or statutory provisions include references to
orders or regulations made thereunder and reference to any statute,
provision, order or regulation include references to that statute,
provision, order or regulation as amended, modified, re-enacted or
replaced from time to time whether before or after the date hereof
(subject as otherwise expressly provided herein)and to any previous
statute, statutory provision, order or regulation amended, modified,
re-enacted or replaced by such statute, provision, order or regulation.
1.7. Headings to clauses, paragraphs and descriptive notes in brackets relating
to provisions of taxation statutes are for information only and shall not
form part of the operative provisions of this agreement and shall be
ignored in constituting the same.
1.8. References to recitals, clauses, Annexures, Schedules are to recitals to,
clauses of, Annexures to and Schedules to this agreement. The recitals,
Annexures and Schedules form part of the operative provisions of this
agreement and references to
12
this agreement shall, unless the context otherwise requires, include
references to the Recitals, Annexures and the Schedules.
2. AGREEMENT FOR SALE
2.1. Subject to the terms and conditions of this agreement, the Vendors shall
sell with full title guarantee and the Purchaser shall purchase the Shares
free from all liens, charges
and encumbrances and with all rights attaching to them, with effect from
the date of this agreement.
3. PURCHASE CONSIDERATION
3.1. Fixed Consideration. In consideration for the sale and transfer of all and
not less than all of the Shares from the Vendors to the Purchaser, on the
Completion Date the Purchaser shall pay to the Vendors an amount (the
"Fixed Consideration") which shall be equal to two million five hundred
thousand ((pound)2,500,000) pounds sterling (the "Fixed Consideration
Value").
Such Fixed Consideration shall be payable on Completion by the allotment
and delivery to the Vendors (in such proportion among the two Vendors as
they shall advise the Purchaser of certificates representing that
aggregate number of TownPages Shares (the "Closing TownPages Shares") as
shall be determined by DIVIDING (a) the Fixed Consideration Value, by (b)
the average of the closing price per share of American Depositary Shares
("ADSs") of TownPages, as traded on the American Stock Exchange, Inc. on
the five (5) Business Days immediately prior to the Completion Date, and
as reported in the New York Times or the Wall Street Journal (the
"Completion Date Closing Price"). The US$/(pound) Sterling conversion rate
shall be as set out in clause 3.4.
3.2. Contingent Consideration. In addition to the Fixed Consideration
payable under clause 3.1, not later than 90 days after the end of the 2000
Fiscal Year of the Company, the Purchaser (subject to the rights of set
off created by clause 3.3.2) shall cause to be paid to the Vendors the
Contingent Consideration. Such Contingent
13
Consideration shall be payable by the allotment and delivery to the Vendor
(in such proportion among the two Vendors as they shall advise the
Purchaser in writing not less than ten Business Days prior to payment of
the Contingent Consideration) of certificates representing that aggregate
number of TownPages Shares (the "Contingent TownPages Shares") as shall be
determined by DIVIDING (a) the Contingent Consideration, by (b) the
Completion Date Closing Price.
3.2.1 The Purchaser hereby undertakes with Xxxx Xxxxxx, one of the Vendors
that during the Earnout Period, unless the contrary may be approved,
procured or effected by Xxxx Xxxxxx:
(a) the Purchaser shall not take or procure to be taken any
action calculated or intended to frustrate or prevent the
achieving of the best reasonably obtainable Net Income of
the Company for the 2000 Fiscal Year; provided that, for
the avoidance of doubt (i) during the Earnout Period,
neither the Purchaser nor its affiliates shall charge
management fees, salaries or other general and
administrative overhead expenses to the Company, unless any
such charges so imposed on the Company shall not be
deducted as a Company expensed for the purposes of
calculating the Net Income of the Company for the 2000
Fiscal Year Financial Statements, and (ii) nothing in this
clause shall be taken as requiring the provision of funding
by the Purchaser to the Company;
(b) the business of the Company shall be conducted on a commercial
basis and with a view to achieving realistic budgeted profits
approved by the Board of the Company and without material
change in the method and manner in which it has been conducted
hitherto.
(c) all records and books of account whether relating to the
Contingent Consideration, its method of calculation or
otherwise shall be unauthorised and made available for
inspection at all times reasonably required by the Vendors.
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3.2.2 The Vendors agree that in the event that the Purchaser has issued a
claim against the Vendors in relation to the Warranties at a time
when a payment of Contingent Consideration would be required to be
made to the Vendors under this clause, the Purchaser may until such
claim is determined, settled or otherwise resolved, withhold an
amount equal to the amount of such claim from such payment of
Contingent Consideration and may set off any amount determined,
settled or otherwise agreed or agreed to be owed to it in relation
to such claim against any payment of Contingent Consideration.
3.3. 3.3.1 The Vendors acknowledge and agree that all TownPages Shares
acquired and to be acquired by them have been and will be
acquired for investment purposes only and not with a view toward
the immediate distribution or resale thereof. The Vendors
further acknowledge that each of them is a sophisticated investor
which has had an opportunity to review the Purchaser's prospectus
dated April 30, 1999 and other publicly available information
concerning the Purchaser and ask questions of members of the
Purchaser's management concerning its business, financial
condition and prospects, prior to making a decision to accept the
TownPages Shares. The Vendors further acknowledge that each of
them has been advised by the Purchaser and its United States legal
counsel that neither the Closing TownPages Shares nor the Contingent
TownPages Shares have been registered under the United States
Securities Act of 1933, as amended (the "Securities Act").
Accordingly, such TownPages shares may not be sold, transferred,
hypothecated or assigned (collectively, "Transferred") in the
absence of a registration statement covering such TownPages Shares
declared effective by the United States Securities and Exchange
Commission ("SEC"), or an opinion of legal counsel reasonably
acceptable to the Purchaser to the effect that an exemption from the
registration requirement under the Securities Act shall exist. An
appropriate legend to this effect may be placed on the certificates
evidencing the TownPages Shares.
15
3.3.2 The Purchaser covenants and agrees to use its best efforts to
file with the SEC and cause to be declared effective by the SEC, a
registration statement covering that number of Closing TownPages
Shares as shall, based on the Fixed Consideration Value and the
Completion Date Closing Price, have a market value of five hundred
thousand ((pound)500,000) pounds sterling (the "Registered TownPages
Shares"). In such connection, the Purchaser agrees to file such
registration statement with the SEC not later than 30 days from the
Completion Date and to use its best efforts diligently and promptly
to respond to any comments received from the SEC in respect of such
registration statement so as to cause such registration statement to
be declared effective by the SEC by not later than 60 days from the
initial filing of such registration statement with the SEC. The
Purchaser shall indemnify, defend and hold harmless the Vendors from
any liabilities or claims or legal expenses arising out of such
registration statement, except as the same may relate solely to
information furnished by the Vendors to the Purchaser for inclusion
in such registration statement. Conversely the Vendors shall
indemnify, defend and hold harmless the Purchaser in writing
expressly for from any liabilities or claims or legal expenses
arising out of such registration statement which are related solely
to information furnished by the Vendors to the Purchaser in writing
expressly for inclusion in such registration statement. The
Purchaser shall bear all costs and expenses incident to the
preparation, filing and completion of the registration statement.
3.3.3 Within seven (7) Business Days following the effectiveness of the
registration statement (irrespective of the period of time from the
Completion Date to such effective date) and for a period which shall
expire on a date which shall not be later than ninety (90) days from
the Completion Date (the "Placement Period"), the Purchaser shall
place all or portions of the Registered TownPages Shares through
registered broker/dealers at retail or in block trades at the market
prices then prevailing. All proceeds, net of customary selling
commissions, shall be for the sole account of the Vendors,
including, without
16
limitation, all net proceeds received in excess of five hundred
((pound)500,000) pounds sterling, if any.
3.3.4 If, for any reason, by the end of the Placement Period, the
Purchaser has been unable to effect sales of all of the Registered
TownPages Shares, the Vendors shall have the right to effect sales
of such Registered TownPages Shares, to the fullest extent permitted
by United States securities laws. In the event and to the extent
that the net proceeds from sales of all Registered TownPages shares
shall be less than five hundred ((pound)500,000) pounds sterling,
the Purchaser shall pay to the Vendors in cash the difference
between five hundred ((pound)500,000) pounds sterling and the
aggregate net proceeds received by them from prior sales of all
Registered TownPages Shares.
3.3.5 The remaining Closing TownPages Shares not constituting Registered
TownPages Shares and all Contingent TownPages Shares (collectively,
the "Unregistered TownPages Shares"), shall not be registered under
the Securities Act and may not be sold, transferred, hypothecated or
assigned until a minimum period of 12 months shall have elapsed from
the date(s) of issuance thereof. The Purchaser shall have no
obligation to register such Unregistered TownPages Shares under the
Securities Act.
3.3.6 With a view to making available to the Vendors and their Permitted
Transferees the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the SEC that may
at any time permit a holder of TownPages Shares to sell such
securities to the public without registration, the Purchaser agrees
to (a) make and keep public information available, as those terms
are understood and defined in Rule 144, at all times after the
Purchaser is subject to the reporting requirements of Section 13 of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"); (b) file with the SEC in a timely manner all reports and
other documents required of the Purchase under the Securities Act
and the Exchange Act; and (c) furnish to the Vendors and their
Permitted Transferees, so long as such holder owns any
17
TownPages Shares issued pursuant to this agreement, forthwith upon
request (i) a written statement by the Purchaser that it has
compiled with the reporting requirments of Rule 144, the Securities
Act and the Exchange Act (at any time after one year from the date
of this Agreement), (ii) a copy of the most recent annual or
quarterly report of the Purchaser and such other reports and
documents so filed by the Purchaser and (iii) such other information
as may be reasonably requested in availing any such holder of any
rule or regualtion of the SECwhich permits the selling of any such
securities without registration or pursuant to such form.
3.3.7 The provisions of this sub clause 3.3 shall apply fully and to the
same effect in relation to the Contingent Consideration as they do
to the Fixed Consideration in order to provide the Vendors with a
second sum of (pound)500,000 in cash if so requested.
3.4. For the purposes of calculating the Fixed Consideration and the Contingent
Consideration the US$/(pound) sterling conversion rate shall be the
average of the middle market rate set out in the Financial Times London
edition on the last Three Business days before the payment of the Fixed
Consideration or the Contingent Consideration, as the case may be
3.5. The Purchaser represents and warrants that when issued, delivered in
accordance with the terms of this clause 3 ,all TownPages Shares shall be
duly authorised, validly issued, fully paid and non-assessable.
4. COMPLETION
4.1. Completion shall take place at the offices of the Vendors' Solicitors on
the Completion Date, when subject to clause 4.6 all the transactions
mentioned in the following sub-clauses shall take place.
4.2. The Vendors shall deliver to the Purchaser:-
18
4.2.1 duly completed and signed transfers in favour of the Purchaser or as
it may direct in respect of the Shares together with the relative
share certificates;
4.2.2 the resignation of the existing auditors of the Company confirming
that they have no outstanding claims of any kind and containing a
statement under CA s 394(1) that there are no such circumstances as
are mentioned in that section;
4.2.3 the statutory books of the Company complete and up to date and their
certificate of incorporation and common seals;
4.2.4 the leases relating to the Properties;
4.2.5 written confirmation from the Vendors that there are no subsisting
guarantees given by the Company in their favour or in favour of any
person connected with them and that save as set out in such letter
the Vendors will not be indebted or otherwise obligated to the
Company or vice versa;
4.2.6 the resignation of the Secretary of the Company;
4.2.7 the entry into Service Agreements in the Agreed Form between the
Company and each of the Vendors
4.2.8 an agreement for lease.
4.3. Board meetings of the Company shall be held at which:-
4.3.1 the transfers referred to in clauses 4.2.1 or 4.2.2 (as the case may
be) shall be approved (subject to stamping);
4.3.2 the resignations referred to in clause 4.2.3 and 4.2.7 shall be
submitted and accepted; and
4.3.3 such persons as the Purchaser may nominate shall be appointed
additional directors and as the Secretary.
19
4.4. Upon completion of the matters referred to in clauses 4.2 to 4.3 the
Purchaser shall deliver to the Vendors' Solicitors certificates in respect
of the Town Pages Shares to be allotted at Completion in respect of the
part of the purchase consideration referred to in clause 3.1.
4.5. The Purchaser may in its absolute discretion waive any requirement
contained in clauses 4.2 to 4.3, and shall not be obliged to complete the
purchase of any of the Shares unless the purchase of all the Shares is
completed in accordance with this agreement, but may instead rescind this
agreement without prejudice to any other remedy it may have.
4.6. As soon as reasonably possible after Completion the parties shall use
their respective best endeavours to procure that the Companies shall repay
all sums owing to its directors and to the Vendors and persons connected
with the Vendors and the directors and vice versa.
5. WARRANTIES AND UNDERTAKINGS BY THE VENDORS
5.1. The Vendors jointly and severally represent and warrant to the Purchaser
that:
5.1.1 each of them has and will have full power and authority to enter
into and perform this agreement, which constitute or when executed
will constitute binding obligations on it or them in accordance with
its terms;
5.1.2 the Shares will at Completion constitute the whole of the issued and
allotted share capital of each Company
5.1.3 there are and at Completion will be no encumbrances on, over or
affecting the Shares and there are and at Completion will be no
agreements or arrangements to give or create any such Encumbrance
and no claim has been or will be made by any person to be entitled
to any of the foregoing;
20
5.1.4 the Vendors will be entitled to transfer the full legal and
beneficial ownership of the Shares to the Purchaser on the terms of
this agreement without the consent of any third party;
5.1.5 the information in Schedule 2 relating to the Company is true and
accurate in all respects;
5.1.6 save as set out in the Disclosure Letter or as disclosed in
accordance with clause 5.4, the warranties set forth in Schedule 4
are true and accurate in all material respects at the date of this
agreement;
5.1.7 the contents of the Disclosure Letter and all of the accompanying
documents are true and accurate in all material respects and fairly
disclose every matter to which they relate; and
5.1.8 On the 30th September 1999 the Company acquired all the assets of
the Partnership
5.2. The Vendors jointly and severally undertake in relation to any Warranty
which refers to knowledge, information or belief of the Vendors that they
have made all reasonable enquiry into the subject matter of that Warranty.
5.3. Except where expressly stated otherwise, no clause contained in this
agreement shall govern or limit the extent or application of any other
clause.
5.4. The rights and remedies of the Purchaser in respect of any breach of the
Warranties shall not be affected by Completion, or failing to exercise or
delaying the exercise of any right or remedy except a specific and duly
authorised written or release, and no single or partial exercise of any
right or remedy shall preclude any further or other exercise.
5.5. None of the information supplied by the Company or its professional
advisers prior to the date of this agreement to the Vendors or their
respective agents, representatives or advisors in connection with the
Warranties and the contents of the Disclosure Letter,
21
or otherwise in relation to the business or affairs of the Company,
shall be deemed a representation, warranty or guarantee of its accuracy
by the Company to the Vendors, and the Vendors waive any claim against
the Company which they might otherwise have in respect of it.
5.6. The Purchaser acknowledges that it has not been induced to enter into this
agreement by any representation or warranty other than the Warranties.
6. RESTRICTIVE AGREEMENT
6.1. For the purpose of assuring to the Purchaser the full benefit of the
businesses and goodwill of the Company, each of the Vendors undertakes by
way of further consideration for the obligations of the Purchaser under
this agreement as separate and independent agreements that neither of the
Vendors, nor any person, firm or corporation controlled by any of them
will not:-
6.1.1 at any time after Completion disclose to any person, or themselves
use for any purpose, and they shall use their best endeavours to
prevent the publication or disclosure of, any information concerning
the business, accounts or finances of the Company or any of its
clients or customers transactions or affairs, which may or may have
come to their knowledge;
6.1.2 for a period of not less than three years after Completion for their
own account or for the account or benefit of any other person
directly or indirectly solicit, interfere with or endeavour to
entice away from the Company any person who to their knowledge is
now or has during the three years preceding the date of
this agreement been a client, customer or employee of, or in the
habit of dealing with the Company;
6.1.3 for a period of not less than three years after Completion, without
the Purchaser's prior written consent either alone or jointly with,
or as manager, agent for or employee of any person, directly or
indirectly carry on or be
22
engaged or concerned or interested in the business of an internet
based directory for Councils and others.
7. GENERAL
7.1. No announcement of any kind shall be made in respect of the subject matter
of this agreement unless specifically agreed between the parties or
otherwise as is required by The American Stock Exchange, Inc.
7.2. This agreement shall be binding upon and inure for the benefit of the
successors of the parties but shall not be assignable, save that the
Purchaser may at any time assign all or any part of its rights and
benefits under this agreement, including the Warranties and any cause
of action arising under or in respect of any of them, to any transferee
of the share capital of the Companies or any of them, or to any
Affiliate of the Purchaser who may enforce them as if he had also been
named in this agreement as the Purchaser. Notwithstanding the
foregoing the provisions of clause 3.3 and the Town Pages Shares hereby
allotted may be assigned by any Vendor to its Permitted Transferee(s).
7.3. Save when expressly otherwise provided, all expenses incurred by or on
behalf of the parties, including all fees or agents, representatives,
solicitors, accountants and actuaries employed by any of them in
connection with the negotiation, preparation or execution of this
agreement shall be borne solely by the party who incurred the liability
and no Company shall have any liability in respect of them.
7.4. Time shall be of the essence of this agreement, both as regards the dates
and periods specifically mentioned and as to any dates and periods which
may by agreement in writing between or on behalf of the Vendors and the
Purchaser be substituted for them.
7.5. (A) Any notice or other communication required to be given under this
agreement or in connection with the matters contemplated by it shall,
except where otherwise
23
specifically provided, be in writing in the English language and shall
be addressed as provided in Sub-clause (B) and may be:
(1) personally delivered, in which case it shall be deemed to have been
given upon delivery at the relevant address; or
(2) if within the United Kingdom, sent by first class prepaid post, in
which case it shall be deemed to have been given two Business Days
after the date of posting; or
(3) sent by fax , in which case it shall be deemed to have been given
when despatched ,subject to confirmation of uninterrupted by a
transmission report, provide that any notice despatched by fax after
1700 hours (a the place where such fax is to be received) on any day
shall be deemed to have been received at 0800 on the next Business
Day
(B) The addresses and other details of the parties referred to in Sub-clause
are subject to Sub-Clause (C):
Name: Xxxx Xxxxxx and Xxxx Xxxxxx c/o the Vendors' Solicitors
For the attention of J Xxxxxxxx
Fax number 0000 000 0000
Name: TownPagesNet.com.plc 00 Xxxxxx Xxxxxx, Xxxxx, Xxxxxxxxx
Fax Number 00000 000000
For the attention of the Managing Director
With copy to the Purchaser's Solicitor
Fax number 0000 000 0000
Attention CJW Stenning
(C) Any party to this agreement may notify the other parties to its address or
other details specified in Sub-clause (B), provided that such notification
shall be effective only on the only on the date specified in such notice
or five Business Days after the notice is
24
given, whichever is the later, provided that such new address shall be in
the United Kingdom.
7.6. This Agreement sets out the entire agreement and understanding between the
parties with respect to the subject matter hereof. It is agreed that
neither party has entered into this Agreement in reliance upon any
representation, warrant or undertaking of any other party which is not
expressly set out or referred to in this Agreement.
7.7. The obligations of the Vendors to the Purchaser shall be joint and
several.
7.8. This agreement shall be governed by English law and the parties hereby
agreed to submit to the exclusive jurisdiction of the English courts.
AS WITNESS the hands of the parties hereto or their duly authorised
representative the day and year first before written.
25
SCHEDULE 1
VENDORS' HOLDINGS OF SHARES
BUYERSGUIDE LIMITED
VENDORS NAME AND ADDRESS NO OF ORDINARY SHARES OF(POUND)1 EACH
XXXX XXXXXX 50
00 XXXX XXXX XXXX
XXXXXXX
XXXXXXXXX XXXX XXXX
XXXX XXXXX XXXXXX 50
000 XXXXXXX XXXX
XXXXXXX
XXXXXXXXX XXXX XXXX
26
SCHEDULE 2
DETAILS OF THE COMPANY
BUYERS GUIDE LIMITED
REGISTERED OFFICE 0 XXXXXXX XXXXXXX, XXXXXXXXX XXXX XXXX
DIRECTORS LUCY XXXXXX
XXXX XXXXX XXXXXX
SECRETARY XXXX XXXXX XXXXXX
NUMBER 383 4517
The Company has no Subsidiaries
27
SCHEDULE 3
THE PROPERTIES
LEASEHOLD GRANTED TO BUYERS GUIDE LIMITED
DESCRIPTION TENURE DATE OF EXPIRY OF LEASE
1st and 2nd Floors Agreement for lease
0 Xxxxxxx Xxxxxxx
Xxxxxxx
Xxxxxxxxx xxxx Xxxx
XX0 0XX
1st Floor License
25 York Place Monthly offices
Xxxxx Xxxxxxxxx xxxxxx
Xxxx Xxxxxxxxx
XX0 0XX
28
SCHEDULE 4
WARRANTIES
1. Constitution
2. Accounts
3. Business
4. Directors and Employees
5. Properties
6. The Companies and their Bankers
7. Accuracy of Information
8. Tax
9. Environment Matters
10. Intellectual Properties
11. Information Technology and Millennium Compliance
12. Pensions
29
1. CONSTITUTION
1.1. MEMORANDUM AND ARTICLES
The Memorandum and Articles of Association of the Company in the form of
the copies attached to the Disclosure Letter supplied to the Purchaser are
complete and accurate 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.
1.2. REGISTER OF MEMBERS
The Register of Members of the Company contains true and accurate records
of the members from time to time of the Company and the Company has not
been subject to any application under the Companies Xxx 0000 for
rectification of such register.
1.3. RETURNS
All such resolutions returns and other documents required by the Companies
Xxx 0000 to be delivered to the Registrar of Companies in respect of the
Company have been duly delivered and are true and accurate in all material
respects.
1.4. 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.
30
1.5. SUBSIDIARIES
The Company has no subsidiaries. nor does the Company own any shares or
stock in the capital of nor has any beneficial interest in any other
company or business organisation nor does any Company control or take part
in the management of any other company or business organisation.
2. ACCOUNTS
2.1. PRINCIPAL ACCOUNTS
The Principal Accounts comply with all applicable accounting standards and
have been prepared in accordance with all relevant statutes and with
generally accepted accounting principles and practices and the profit and
loss account reasonably reflects the profits of the Partnership for the
period and the balance sheet fairly discloses the value of the assets of
the Partnership as at its date.
2.2. ACCOUNTING POLICY
The Principal Accounts have been prepared on a basis fully consistent with
the basis upon which all accounts of the Partnership have been prepared.
2.3. STOCK IN TRADE
The Company has no stock in trade
31
2.4. OFF BALANCE SHEET FINANCING
None of the Vendors nor the Company or any company associated in any way
with them has engaged in any financing (including without prejudice to the
generality of the foregoing the incurring of any borrowing or any
indebtedness in the nature of borrowing including without limitation
liabilities in the nature of acceptances or acceptance credits) of a type
of which would not be required to be shown or reflected in the Principal
Accounts.
2.5. ACCOUNTING REFERENCE DATE
The Company has notified the Registrar of Companies 31 March as being its
accounting reference date pursuant to the Companies Xxx 0000.
2.6. BOOKS OF ACCOUNT
The Partnership has properly kept and maintained all necessary books of
account (reflecting in accordance with the accounting principles set out
in the Disclosure Letter and practices all transactions effected by the
Partnership or which they or it is or has been a party) minute books
records register of members and other statutory books. All such documents
contain full and accurate records of all material matters required to be
recorded therein and all deeds and documents (properly stamped where
stamping is necessary for enforcement thereof) belonging to the
Partnership or which ought to be in the possession of the Partnership.
2.7. MANAGEMENT ACCOUNTS
Any management accounts prepared by the Vendors for the Partnership since
the Last Accounts Date were compiled with due care, on the same basis as
the management
32
accounts of the Partnership had been prepared during the previous
accounting period prior to the Last Accounts Date and give a fair
representation of the results of the Partnership from the period from
the Last Accounts Date to the date which they were drawn up and the
state of affairs of the Partnership as at the date to which they were
drawn up.
2.8. No amount included in the Principal Accounts as owing to the Partnership
at the Last Accounts Date has been released for an amount less than the
value at which it was included in the Principal Accounts or is now
regarded by the Vendors as irrecoverable in whole or in part. The
Partnership has not factored or discounted any of its debts or other
receivables or agreed to do so.
3. BUSINESS
3.1. BUSINESS SINCE THE LAST ACCOUNTS DATE
Since the Last Accounts Date the business of the Partnership has been
conducted in the ordinary course of business.
3.2. ACQUISITION AND DISPOSAL OF ASSETS
The Partnership has not since the Last Accounts Date acquired or agreed to
acquire any asset for a consideration which (so far as the Vendors are
aware) is higher than the market value at the time of acquisition and nor
has disposed of or agreed to dispose of any asset for a consideration
which is lower than the market value or the value thereof as shown in its
books at the time of disposal.
33
3.3. CHARGES AND TITLE TO ASSETS
The Partnership has not created or agreed to create or suffered to arise
any Encumbrance over any part of its undertaking or assets and the Company
has and will at Completion have a good title to all the assets included in
the Principal Accounts and to all other assets (tangible or intangible)
used for the purpose of its business at the date hereof and to all assets
acquired since the Last Accounts Date and prior to Completion.
3.4. LEASING ETC AGREEMENTS
Full and accurate details of any hiring or leasing agreements, hire
purchase agreement, credit or conditional sale agreement, agreement for
payment on deferred terms or any other similar agreement to which the
Partnership or the Company is a party are contained in the Disclosure
Letter and copies annexed thereto.
3.5. ONEROUS OBLIGATIONS
Neither the Partnership nor the Company is a party to any contract,
transaction, arrangement or liability which is material and outside the
ordinary course of business of the Partnership or the Company and which:-
3.5.1 is of an unusual or abnormal nature;
3.5.2 is for a fixed term of more than three months;
3.5.3 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);
34
3.5.4 is incapable of termination in accordance with its terms, by the
Partnership or the Company, on 60 days notice or less;
3.5.5 involves payment by the Company by reference of fluctuations in the
index of retail prices, or any other index or in the rate of
exchange for any currency;
3.5.6 involves an aggregate outstanding expenditure by the Company of
more than (pound)25,000;
3.5.7 restricts its freedom to engage in any activity or business or
confines its activity or business to a particular place.
3.6 SUPPLY CONTRACTS
All agreements or arrangements for the supply of services to or by the
Partnership or the Company which involve or are likely to involve the
supply of services the aggregate sale value of which will represent in
excess of ten per cent of the turnover for the preceding financial year of
the Partnership or the Company have been disclosed to the Purchaser in
writing. Neither the Partnership nor Company has been notified of, nor are
the Vendors aware of, any breach of the Partnership's or the Company's
obligations under any contract, transaction or arrangement to which it is
a party or by which it is bound.
3.7 EVENTS OF DEFAULT
3.7.1 No event has occurred or is subsisting which constitutes or results
in or would with the giving of notice and/or lapse of time
constitute or result in default or the acceleration of any
obligation under any agreement or arrangement to which the
Partnership or the Company is a party or by which it or any of its
properties, revenues or assets are bound.
34
3.7.2 Neither the Partnership nor the Company is a party to any agreement
or arrangement which is capable of termination (without liability
for compensation) by any other person on a change in the management
control of the Partnership and/or the Company or by reason of the
sale of the Shares under this agreement.
3.8 GUARANTEES ETC.
Neither the Partnership nor the Company has given any guarantee,
indemnity, warranty or bond incurred any other similar obligation or
created any security for or in respect of liabilities, actual or
contingent, of any other person.
3.9 OPTIONS OVER SHARES ETC.
No share or loan capital has been created or issued or agreed to be
created or issued by the Company and there are no options or other
agreements outstanding which call or give any person the right to call
(whether or not subject to conditions) for the issue of any share or loan
capital of the Company, and neither of the Vendors are under any
obligation of any kind whatsoever whether actual or contingent to sell,
charge or otherwise dispose of any of such shares or any interest therein
to any other person.
3.10 LITIGATION
Save for routine debt collection, neither the Partnership nor the Company
is engaged in any litigation or arbitration, prosecution or other legal
proceedings (whether as plaintiff, defendant or third party) and there are
no such proceedings pending or threatened or any proceedings in respect of
which the Partnership or the Company is or might be liable to indemnify
any other person concerned therein. There are no claims, facts or events
which are likely to give rise to any such proceedings and neither the
Partnership nor the Company is engaged in and has not in the last six
years been engaged in, and no facts or events exist or have occurred which
are likely to
35
cause the Vendors or Company to be involved, in proceedings or enquiries
before any government or municipal board of enquiry or commission or any
other administrative body (whether judicial quasi-judicial or otherwise)
in which any favourable judgement or decision would or might adversely
affect the business of any Company or the value of any of its assets.
3.11 BUSINESS NAME
The Partnership has only carried on business under the following names
Xxxxxx Publishing and the Company has only carried on business under its
corporate name.
3.12 PROPERTIES IN OTHER COMPANIES
Neither the Partnership nor the Company is liable to offer for sale
transfer or otherwise dispose of or purchase or otherwise acquire any
assets, including shares held by it in other bodies corporate under the
partnership agreement or it articles of association (as the case may be)
or agreement or arrangement or to take or suffer any action upon the
happening of any such event.
3.13 INSURANCE
3.13.1 The Partnership and the Company have produced to the
Purchaser all insurance policies in effect in relation to their
businesses and assets and all such policies are in full force and
effect and not voidable;
3.13.2 The Partnership and the Company are now, and have at all
material times been covered against accident, damage, injury,
third party loss (including product liability), loss of profits
and has at all times effected such insurance's as are required by
law;
3.13.3 So far as the Vendors are aware there are no circumstances
which might lead to any liability under such insurance being
avoided by the insurers or the premiums being increased and there
is no claim outstanding under any such
37
policy nor is any Vendor aware of any circumstances likely to
give rise to a claim.
3.14 LICENCES
The Partnership and the Company have all licences, permissions, and so far
as the Vendors are aware, permits, consents and authorisations required
for the carrying on of its business and neither the Partnership nor the
Company is in breach of the terms or conditions of such licences,
permissions, permits, consents and authorisations. So far as the Vendors
aware there are no pending or threatened proceedings which might in any
way affect such licences, permissions, permits, consents and
authorisations and there is no other reason why any of them should be
suspended, threatened or revoked or be invalid.
3.15 GRANTS
Neither the Partnership nor the Company has applied for nor received any
financial assistance from any supranational, national or local agency,
body or authority.
4. DIRECTORS AND EMPLOYEES
4.1 The names of the Directors and Secretary shown in Schedule 2 are true and
complete and no person not named therein is a director of the Company.
4.2 Those particulars of all officers and employees annexed to the
Disclosure Letter show all remuneration and other benefits:- 4.2.1
actually provided; and 4.2.2 which the Company is 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 insurance, permanent health insurance, directors and
officers insurance, travel, car, redundancy and other benefit schemes,
39
arrangements and understandings operated for all or any employees or
former employees of the Partnership and the Company or their dependants
whether legally binding on the Company or not.
4.3 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 Employment Rights Xxx 0000 ("ERA")) of every employee
of the Partnership and the Company.
4.4 The Disclosure Letter or the annexures thereto contains copies of all the
standard terms and conditions, staff handbooks and policies which apply to
employees of the Partnership and the Company and identifies which terms
and conditions apply to which employees.
4.5 There are no service agreements or contracts of employment between the
Partnership and/or the Company and any of its directors or employees
containing any provision in addition to the matters required to be
contained under section 1 of the ERA. All employees of the Company have
received a written statement of particulars of their employment as
required by section 1 of the ERA.
4.6 There are no training schemes, arrangements or proposals, whether past or
present, in respect of which a levy may henceforth become payable by the
Partnership or the Company under the Industrial Training Act 1982 (as
amended) and pending Completion no such schemes, arrangements or proposals
will be established or undertaken.
4.7 Since the Last Accounts Date neither the Partnership nor the Company has
made, announced or proposed any changes to the emoluments or benefits of
or any bonus to any of its directors, offices or employees and neither the
Partnership nor the Company is under an obligation to make any such
changes with or without retrospective operation.
39
4.8 No past or present director, officer or employee currently has any claim
against the Company;
4.8.1 in respect or any accident or injury which is not fully covered
by insurance; or
4.8.2 in breach of contract of services or for services; or
4.8.3 for loss of office or arising out of or connected with the
termination of his office of employment (including any redundancy
payment)
and so far as the Vendors are aware there is no event which would or might
give rise to any such claim.
4.9 The Partnership and the Company have has maintained adequate and suitable
records regarding the service of directors, officers and employees and
such records comply with the requirements of the Data Protection Xxx 0000.
4.10 There are no amounts owing or agreed to be loaned or advanced by the
Vendors or 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).
4.11 No current, director, officer or employee of the Partnership or the
Company has given or received notice to terminate his or her employment.
4.12 Save in accordance with their respective contracts there are no directors,
officers or employees of the Company who are absent on grounds of
disability or other leave of secondment, maternity leave or absence.
40
5. PROPERTIES
5.1. TITLE
5.1.1 The Properties comprise the only Properties owned, occupied or
otherwise used in connection with their business by the Company.
5.1.2 The Properties are occupied or used by right of ownership or under
lease or licence, and the terms of any such lease or licence permit
such occupation or use.
5.1.3 The information contained in Schedule 3 as to the tenure of the
Properties, is true and accurate in all material respects.
5.2 ENCUMBRANCES
5.2.1 The Properties are free from any mortgage, debenture, charge,
rent-charge, lien or other encumbrance securing the repayment of
monies or other obligation or liability of the Company or any other
person.
5.2.2 The Properties are not subject to any outgoings other than general
rates, water rates and insurance premiums and in the case of
leasehold properties rent and service charges.
5.2.3 The Properties are not subject to any restrictive covenants,
stipulations, easements, profits a prendre, wayleaves, licences,
grants, restrictions, overriding interest or other such rights
vested in third parties.
5.2.4 Where any such matters as are referred to in clauses 5.2.1, 5.2.2
and 5.2.3 have been disclosed in the Disclosure Letter, the
obligations and liabilities imposed
41
and arising under them have been fully observed and performed and
any payments in respect of them due and payable have been duly paid.
5.2.5 The Properties are not subject to any option, right of pre-emption
or right of first refusal.
5.3 PLANNING MATTERS
5.3.1 The use of the Properties is the permitted use for the purposes of
the Planning Acts.
5.3.2 The Properties are not listed as being of special historic or
architectural importance or located in a conservation area.
5.3.3 All development charges, monetary claims and liabilities under the
Planning Acts or any other such legislation have been discharged and
no such liability, contingent or otherwise, is outstanding.
5.4 STATUTORY OBLIGATIONS
5.4.1 Compliance has been made with all applicable statutory and by-law
requirements with respect to the Properties and in particular (but
without limitation) with the requirements as to fire precautions and
under the Public Health Acts and the Offices, Shops and Railway
Premises Xxx 0000.
5.4.2 There are no outstanding and unobserved or unperformed obligations
with respect to the Properties necessary to comply with the
requirements (whether formal or informal) of any competent authority
exercising statutory or delegated powers.
42
5.4.3 There are not in force or required to be in force any licences
whether under the Licensing Acts 1964 or otherwise which apply to
the Properties.
5.5 ADVERSE ORDERS
5.5.1 There are no compulsory purchase notices, orders or resolutions
affecting the Properties nor are there any circumstances likely to
lead to any being made.
5.5.2 There are no closing, demolition or clearance orders, enforcement
notice or stop notices affecting the Properties nor so far as the
Vendors are aware are there any circumstances likely to lead to any
being made.
5.6 CONDITION OF THE PROPERTIES
5.6.1 There are no disputes with any adjoining or neighbouring owner with
respect to boundary walls and fences or with respect to any
easement, right or means of access to any of the Properties.
5.6.2 The principal means of access to all of the Properties is over roads
which have been taken over by the local or other highway authority
and which have been taken over by the local or other highway
authority and which are maintainable at the public expense and no
means of access to the Properties is shared with any other party nor
subject to rights of determination by any other party.
5.6.3 The Properties enjoy the main service of water, drainage,
electricity and/or gas.
5.6.4 The Properties are not located in an area or subject to
circumstances particularly susceptible to flooding.
43
5.7 INSURANCE
5.7.1 The Properties are insured in its respective full reinstatement
values for not less than two years loss of rent and against third
party and public liabilities to an adequate extent.
5.7.2 All premiums payable in respect of insurance policies with respect
to the Properties which have become due have been duly paid and no
circumstances have arisen which would vitiate or permit the insurers
to avoid such policies.
5.7.3 The information in the Disclosure Letter with respect to the
insurance policies is up to date and true and accurate in all
respects.
5.8 LEASEHOLD PROPERTIES
5.8.1 The Partnership and the Company have paid the rent and observed and
performed the covenants on the part of the tenant and the
conclusions contained in any leases (which expressions includes
underleases) under which the Properties are held, and the last
demand (or receipts for rent if issued) were unqualified, and all
such leases are valid and in full force.
5.8.2 All licences, consents and approvals required from the landlords and
any superior landlords under any lease of the Properties have been
obtained and the covenants on the part of the tenant contained in
such licences, consents and approvals have been duly performed and
observed.
5.8.3 There is no rent review under the leases any of the Properties
currently in progress.
44
5.8.4 There is not outstanding and unobserved or unperformed any
obligation necessary to comply with any notice or other requirement
given by the landlord under the leases of the Properties.
5.8.5 There is no obligation to reinstate the Properties by removing or
dismantling any alteration made to it by the Partnership or the
Company or any predecessor in title to the Company.
THE COMPANY AND ITS BANKERS
6.1 BORROWINGS
The Company has not borrowed any money
6.2 CONTINUANCE OF FACILITIES
Full and accurate details of all overdrafts, loans, leases or other
financial facilities outstanding or available to the Vendors in connection
with the Partnership have been supplied to the Purchaser and (save for
entry into this agreement) neither the Vendors nor the Company has done
anything whereby the continuance of any such facilities in full force and
effect might be affected or prejudiced.
6.3 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 hereof has been supplied to the Purchaser. The Company has
no 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.
45
TAXATION
7.1 RETURNS
The Partnership have made all returns and supplied all information and
given all notices to the Inland Revenue or other 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
material respects and are not the subject of any dispute and so far as the
Vendors are aware there are no facts or circumstances likely to give rise
to or be the subject of any such dispute.
7.8 PAY AS YOU EARN
Both of the Partnership and the Company have properly operated the PAYE
system and National Insurance Contribution system deducting tax as
required by law from all payments to or treated as made to or benefits
provided for its employees, ex-employees or independent contractors
(including any such payments within section 134 of the ICTA) and duly
accounted to the Inland Revenue in connection with any such payments made
or benefits provided, and so far as the Vendors are aware no PAYE audit or
National Insurance or VAT audit in respect of the Partnership or the
Company has been made by the Inland Revenue, Contributions Agency or H M
Customs & Excise nor has the Partnership or the Company been notified that
any such audit will be made and both of the Partnership and the Company
have complied with all other obligations in respect of National Insurance.
VALUE ADDED TAX
7.52 VALUE ADDED TAX
7.52.1 Each of the Partnership and the Company is a registered
taxable person for the purpose of the VAT legislation. So far as
the Vendors are aware no
46
circumstances exist whereby the Partnership nor the Company
would or become liable for value added tax as an agent or
otherwise by virtue of section 47 of VATA.
7.52.2 Each of the Partnership and the Company has complied in
all respects with the requirements and provisions of VATA and
all regulations and orders made thereunder (the "VAT
legislation") and has made and maintained accurate and
up-to-date records invoices accounts and other documents
required by or necessary for the purposes of VAT legislation and
the Partnership and the Company have at all times punctually
paid and made all payments and returns required thereunder.
7.52.3 without prejudice to the generality of clause 7.53.2)
neither the Partnership nor the Company has:
(i) taken part in conduct involving dishonesty as described in
section 60 of VATA;
(ii) committed any serious misdeclaration or neglect as
described in section 63 of VATA;
(iii) issued unauthorised invoices or failed to do anything
contemplated by section 67 of VATA;
(iv) failed to comply with any regulatory requirements described
in section 69 of VATA;
(v) been notified of any assessment within sections 59 and 74
of VATA or a surcharge notice under section 59 of VATA;
(vi) made any agreement with the Commissioners of Customs and
Excise which agreement has not been put in writing as
contemplated by section 85 of VATA.
7.52.4 Neither the Partnership nor the Company has 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 Last Accounts Date.
47
ENVIRONMENTAL MATTERS
8.1 CONSENTS
Neither the Partnership nor the Company requires any Environmental
Consent, nor has received any notice of any requirement for any
Environmental Consent.
8.2 LIABILITY
Both of the Partnership and the Company are in compliance with all
environmental laws which are currently applicable to their business (other
than breaches which are unintentional, minor or insignificant in effect).
There are no civil criminal arbitration or administrative actions claims
proceedings or suits pending or threatened against the Partnership or the
Company arising from or relating to Environmental Consents or
Environmental Laws and there are no circumstances which may lead to such
actions claims proceedings or suit.
INTELLECTUAL PROPERTY
9.1 The use by each of the Partnership and the Company of its Intellectual
Property does not infringe the rights of any third party, nor so far as
the Vendors are aware does the use by any third party infringe upon the
rights of the Partnership and Company.
9.2 There are no claims or proceedings in existence or threatened in respect
of the use by the Partnership and the Company of its Intellectual Property
and there are no circumstances likely to give rise to any such claims or
proceedings.
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10. INFORMATION TECHNOLOGY AND MILLENNIUM COMPLIANCE
10.1 None of the business systems forming part of the Partnership's or the
Company's Intellectual Property has been copied wholly or substantially
from any other material.
10.2 All the business 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.
10.3 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 Completion.
10.4 The Disclosure Letter sets out or has annexed to it copies of all disaster
recovery agreements used in the course of the business of the Company.
10.5 The performance of the business systems used in the business of the
Company will not be adversely affected by either any changes in and to
data information used therein or any changes to inputs and other
manipulations of data in relation to dates from 1 January 2000 and
thereafter.
10.6 The Disclosure Letter has annexed to it copies of all computer hardware
and software maintenance agreements, all such agreements being in full
force and effect.
PENSIONS
11.1 No Company is under a legal obligation or moral liability or obligation
and is not a party to any ex-gratia arrangement or promise to pay
pensions, gratuities, super-
49
annuation allowances or the like, or otherwise to provide "relevant
benefits" within the meaning of s.612 of the Income and Corporation Taxes
Xxx 0000 to or for any of its past or present officers or employees
or their dependants; and there are no retirement benefit or pension or
death or similar schemes or arrangements in relation to or binding on any
Company or to which any Company contributes.
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SCHEDULE 5
VENDOR PROTECTION
1. INTERPRETATION
1.1 The provisions of this Schedule 5 shall operate to limit or qualify the
liability of the Vendors under or in connection with any term of this
Agreement the Deed of Indemnity and the Warranties ("such liabilities")
and references to "such liabilities" shall be construed accordingly.
1.2 In the Warranties, reference to "material" shall mean material in the
context of the business of the Partnership or the Company as the case may
be as a whole.
2. CAP
2.1 Notwithstanding any other provision hereof the maximum aggregate liability
of the Vendors in respect of all breaches of this Agreement and the
Warranties and the Deed of Indemnity shall not exceed the aggregate of
(pound)2,500,000
3. TIME LIMITS
3.1 Subject to the provisions of paragraph 3.2 of this Schedule, no claim
shall be brought against the Vendors in respect of such liabilities unless
notice in writing of any such claim (specifying in reasonable detail the
nature of the breach and so far as is practicable the amount claimed in
respect thereof) has been given to the Vendors within twelve months of
Completion and any such claim which may have been made shall (if it has
not been previously satisfied settled or withdrawn) be deemed to have been
withdrawn on the expiration of six months from the date of the said notice
unless proceedings in respect thereof shall have been both issued and
served on the Vendors before such expiration.
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3.2 No claim or claims shall be brought against the Vendors in respect of
which the subject matter relates to Taxation unless notice in writing of
any such claim (specifying in reasonable detail the nature of the claim
and so far as practicable the amount claimed in respect thereof) has been
given to the Vendors within six years of Completion and any such claim
which may have been made shall (if it has not been previously satisfied
settled or withdrawn) be deemed to have been withdrawn on the expiration
of six months from the date of the said notice unless proceedings in
respect thereof shall have been both issued and served on the Vendors
before such expiration.
4. SMALL CLAIMS AND THRESHOLD
The Vendors shall not be liable in respect of any Warranty Claim unless:
4.1.1 the liability of the Vendors in respect of the Warranty Claim exceeds
(pound)5,000; and
4.1.2 the aggregate liability of the Vendors in respect of all Warranty Claims
exceeds (pound)100,000, in which case the Vendors shall be liable for the
whole amount and not merely the excess over (pound)100,000
5. NO DOUBLE CLAIMS
5.1 Neither the Purchaser nor the Company shall be entitled to recover damages
in respect of any claim for breach of this Agreement or otherwise obtain
reimbursement or restitution more than once in respect of any one breach
of any of the Warranties contained in the Agreement and so that for this
purpose any recovery by the Purchaser shall be deemed to be a recovery by
any of them and further any recovery in respect of a claim for breach of
any of the Warranties shall satisfy any liability in respect of the
circumstances giving rise to such claim and vice versa.
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6. GENERAL LIMITATIONS
6.1 The Vendors shall not have any liability in respect of such liabilities
and accordingly no claim may be brought in respect thereof if and to the
extent that any one or more of the following provisions may apply:-
6.1.1 such liabilities are wholly or partly attributable to any voluntary
act omission transaction or arrangement of the Purchaser after the
date hereof;
6.1.2 either the Company or the Purchaser is entitled to claim to be
indemnified (and then only to the extent of the indemnity) against
any loss or damage suffered by any of them under the terms of any
insurance policy for the time being in force;
6.1.3 such liabilities arise in connection with any fact, matter or
circumstance fairly disclosed in the Disclosure Letter or in the
schedules to this Agreement;
6.1.4 such liabilities arise in connection with any matter provided for
under the terms of this agreement or arising from the implementation
of the same;
6.1.5 either such liabilities arise in connection with any exceptions or
matters included mentioned provided for or referred to in the
Principal Accounts or the audited accounts for the two previous
accounting periods of each of the Partnership or the Company or in
the notes thereto or the subject matter of the claim giving rise to
such liabilities was taken into account in computing the amount of
any such provision or reserve or is noted therein;
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6.1.6 such liabilities arise wholly or partly out of as a result of or
in connection with:-
6.1.6.1 any change in the nature of the business of the Company (or
in the manner of conducting the same) after the date hereof
which is authorised by the Purchaser pursuant to this
Agreement; or
6.1.6.2 any asset acquired or disposed of by the Company after the
date hereof which is authorised by the Purchaser pursuant to
this Agreement; or
6.1.6.3 any statutory provision not in force at the date hereof or
any change in any statutory provision hereafter or any
decision of the Courts altering the generally accepted
interpretation of any statutory provision or the withdrawal
of any extra statutory concession previously made by or any
change in practice of the Inland Revenue or other taxation
authority or any increase in the rates of Taxation in force
at the date hereof;
6.1.6.4 the passing of a resolution for the winding up of the
Company after the date hereof; or
6.1.6.5 any change in the format, matter, bases, priorities and
principles used in the preparation of the accounts of the
Company from those used and adopted in the Principal
Accounts;
6.1.7 the loss or liability resulting from such liabilities is less than
the aggregate of any over-provision made in the Principal Accounts
in respect of any liability and any undervalue of any asset recorded
in the Principal Accounts.
7. PURCHASER'S COVENANT
7.1 The Purchaser hereby covenants with the Vendors that the Purchaser is not
aware of any material fact, matter or thing as may be inconsistent with
any Warranty or that may give rise to any liability on the part of the
Vendors hereunder.
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8. SUBSEQUENT RECOVERY FROM THIRD PARTY
8.1 The Purchaser shall reimburse to the Vendors forthwith an amount equal to
any sum paid by the Vendors in respect of any claim for such liabilities
which is subsequently recovered by or paid to the Company by any other
person (including but not limited to insurance payments) (less any
reasonable costs and expenses incurred by the Company in making such
recovery).
9. ASSIGNMENT OF CLAIM
9.1 Where having discharged any claim for breach of the Warranties the Vendors
request the assignment to them of any right of the Purchaser or of the
Company to make recovery in whole or in part from any third party, the
Purchaser will assign at Vendors' expense or procure the assignment to the
Vendors of such right and, if the same is not legally capable of effective
assignment, will, subject to being indemnified to the reasonable
satisfaction of the Purchaser pursue such claim on behalf of the Vendors
and deliver over upon receipt to the Vendors all amounts recovered.
10. RELIEFS
10.1 Any such liabilities shall not extend to any part of the loss or damage
suffered by the Purchaser or the Company to the extent that such part
shall be used or shall be capable of being used by the Purchaser or the
Company or any present or future subsidiaries of either of them to offset
in whole or in part any past present or future liability to Taxation.
11. THIRD PARTY CLAIM
11.1 Where the Company or the Purchaser is entitled (whether by reason of
insurance or payment discount or otherwise) to recover from some other
person any sum in respect of Taxation or any other damage or liability the
subject of a claim against the Vendors under this Agreement or for which a
claim could be made hereunder (and whether
55
before or after the Vendor has made payment hereunder) the Purchaser shall
if so required by the Vendors and at the Vendors own cost and expense take
or (as the case may require) procure that the Company takes all steps
(whether by way of a claim against its insurers or otherwise) as the
Vendors may reasonably require to enforce such recovery and shall keep the
Vendors informed to its reasonable satisfaction of the progress of any
action taken. Thereafter any claim against the Vendors shall be limited
(in addition to the limitations on the liability of the Vendors referred
to in this Schedule 5) to the amount by which the loss or damage suffered
by the Purchaser as a result of such breach shall exceed the amount (if
any) so recovered. The Purchaser shall not be entitled to make any claim
in respect of such liabilities if it or the Company fails to act in
accordance with the reasonable instructions of the Vendors in conducting
any claim against a third party.
12. RIGHT TO FIGHT
12.1 The Vendors shall be entitled to require the Purchaser or the Company to
take all such reasonable steps or proceedings as the Vendors may consider
appropriate in order to mitigate any claim in respect of such liabilities
or in respect of the undertakings in this Agreement and the Purchaser
shall procure that the Company shall act in accordance with any such
requirements (subject to the Purchaser and/or the Company being
indemnified by the Vendors against all reasonable costs and expenses
incurred in connection therewith). For the purpose of enabling the Vendors
to remedy a breach or to mitigate or otherwise determine the amount of any
claim or to decide what steps or proceedings should be taken in order to
mitigate any claim the Purchaser shall:-
12.1.1 give notice to the Vendors within fourteen days of any breach or
circumstance giving or likely to give rise to a breach coming to
its notice or to the notice of the Purchaser;
12.1.2 make or procure to be made available to the Vendors or its or his
duly authorised representatives all relevant personnel, books of
accounts, records
56
and correspondence of the Company for the purpose of enabling the
Vendors to ascertain or extract any relevant information; and
12.1.3 make no admission of the fact or amount of any liability on the
part of the Company or the Purchaser without the prior written
consent of the Vendors such consent not to be unreasonably
withheld.
The Purchaser shall not be entitled to make any claim in respect of a
breach of Warranty if it fails to give the said notice or to act in
accordance with the reasonable instructions of the Vendors in conducting
any dispute or negotiation in relation to the claim in accordance with
this paragraph 12.
13. RELIANCE ON STATEMENTS
13.1 No claim shall be made against the Vendors in respect of any warranty
representation indemnity covenant undertaking or otherwise arising out of
or in connection with the sale of the issued share capital of the Company
except where the same is expressly contained in this Agreement and the
Purchaser confirms that it has not relied upon or been induced to enter
into this Agreement by any warranty representation indemnity covenant or
undertaking given by any person which is not expressly contained in this
Agreement.
14. DUTY TO MITIGATE
14.1 Nothing in this Agreement shall be deemed to relieve the Purchaser from
its common law duty to the Vendors to mitigate their loss and without
prejudice to the generality of the foregoing the Purchaser shall take and
shall do all things in its power to procure that the Company shall take
all practicable and reasonable steps to avoid or mitigate any loss or
liability which may give rise to a claim under the Warranties or this
Agreement.
57
DISCHARGE OF CLAIMS
15.1 In the event that the Vendors are liable to the Purchaser for a claim
under the terms of the Agreement, such liability may at the election of
the Purchaser be satisfied by the payment by it to the Purchaser of the
proceeds of the sale of the Unregistered Townpages Shares or by returning
to the Purchaser certificates representing such TownPages Shares then
retained by Vendors having a market value in the amount of such liability
together with an executed stock transfer form in favour of such person or
persons (if any) as the Purchaser may direct.
15.2 Until such time as the Vendor shall be able to sell the Unregistered
TownPages Shares to satisfy any such liability under this Agreement no
proceedings may be taken to effect recovery of any damages awarded under
this agreement and the Purchaser hereby agrees that the Purchaser shall
allow the Vendors such time as is reasonably necessary either to sell
sufficient of the Unregistered TownPages Shares to or return of such
Townpages Shares to the Purchaser in satisfaction of such liability.
SIGNED by )
XXXX XXXXXX )
SIGNED by )
XXXX XXXXXX )
SIGNED by )
)
for and on behalf of )
XXXXXXXXXXXX.XXX PLC )
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