EXHIBIT 10(k)
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Dated 30th May, 2000
Xxx Xxxxx Xxxxxx Xxxxx
Xxxx Xxxxxxx Xxxxx
and
Oneida U.K. Limited
and
Oneida Ltd
SHARE PURCHASE AGREEMENT
relating to the sale and purchase
of the whole of the issued share capital of
Viners of Sheffield Limited
Agreement for Purchase of Shares
This Agreement is made on 30th May 2000
Between:
(1) The Several Persons named in Part 1 of Schedule 1 (the "Vendors", which
expression shall include the legal personal representatives of any such
persons);
(2) Oneida U.K. Limited whose registered office is at 00 Xxxxx Xxx, Xxxxxxxxx
Xxxxx, Xxxxxxx, Xxxxxxxxx XX0 0XX (the "Purchaser"); and
(3) Oneida Ltd whose registered office is at 000-000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxx Xxxx, 00000 (the "Guarantor").
It is agreed as follows:
1. Interpretation
In this Agreement the headings shall not affect its interpretation and,
unless the context otherwise requires, the provisions in this Clause 1
apply:
1.1 Definitions
"Admitted Claim" means a claim under Warranties and/or the Tax Deed of
Covenant which has been agreed by the Vendors and the Purchaser or which
is the subject of a judgment of the court;
"agreed terms" means, in relation to a document, such document in the
terms agreed between the parties and signed for identification by the
Purchaser's Solicitors and the Vendors' Solicitors with such alterations
as may be agreed in writing between the parties from time to time for any
reason including, without limitation, to take account of any changes
between the date of this Agreement and Completion;
"Audited Accounts" means the audited accounts of the Company and of each
of the Subsidiaries and the audited consolidated group accounts of the
Group for the financial period ended on the Balance Sheet Date;
"Auditors" means BDO Xxxx Xxxxxxx;
"Balance Sheet Date" means 30 April 2000;
"Business Day" means a day on which banks are open for business in London
(excluding Saturdays, Sundays and public holidays);
"Company" means Viners of Sheffield Limited details of which are contained
in Part 3 of Schedule 1;
"CHAPS" means clearing houses automated payment systems;
"Completion" means the completion of the sale and purchase of the Shares
pursuant to Clause 6;
"Completion Accounts" has the meaning given in Clause 8.1;
"Deposit" means the sum of 'L'2,000,000 payable to the Vendors'
Solicitors as stakeholders pending Completion upon the signing hereof in
part payment of the Purchase Price;
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"Disclosures" means the Disclosure Letter and the Disclosure Bundle
together;
"Disclosure Bundle" means the documents annexed to and accompanying the
Disclosure Letter;
"Disclosure Letter" means the letter of even date with this Agreement from
the Vendors to the Purchaser disclosing:
a. information constituting exceptions to the Warranties; and
b. details of other matters referred to in this Agreement;
"Discount Agreement Letter" means the letter in the agreed terms from the
Purchaser to the Vendors confirming that the Vendors may purchase the
products of the Company at cost plus VAT after Completion;
"Employees' Covenants" means the restrictive covenants in the agreed
terms;
"Encumbrance" means any claim, charge, mortgage, security, lien, option,
equity, power of sale or hypothecation or other third party rights,
retention of title, right of pre-emption, right of first refusal or
security interest of any kind;
"Group" or "Group Companies" means the Company and the Subsidiaries and
"Group Company" means any one of them;
"Information Technology" means all computer systems, communications
systems, software and hardware owned, used or licensed by or to any Group
Company;
"Intellectual Property" means trade marks, service marks, trade names,
domain names, logos, get-up, patents, inventions, registered and
unregistered design rights, copyrights, semi-conductor topography rights,
database rights and all similar proprietary rights which may subsist in
any part of the world (including Know-How, as defined in Schedule 3)
including, where such rights are obtained or enhanced by registration, any
registration of such rights and applications and rights to apply for such
registrations and including any such rights as may be comprised in or from
part of Information Technology;
"Losses" means all losses, liabilities, costs (including, without
limitation, proper legal costs), charges and expenses;
"Net Asset Value" means the aggregate of all the assets less the aggregate
of all the liabilities (specifically including but not limited to, all
debt) and provisions as disclosed by the Completion Accounts;
"Payment Account Details" means, in relation to any payment to be made
under or pursuant to this Agreement, the name, account number, sort code,
account location and other details specified by the payee and necessary to
effect payment (whether by cheque, banker's draft, telegraphic or other
electronic means of transfer) to the payee;
"Pension Scheme" means the pension schemes of the Company in force at the
date of this Agreement details of which are set out in the document[s] in
the agreed terms;
"Property" means the premises at 000 Xxxxx Xxxxxxx, XX0 referred to in
clause 10 of Schedule 3;
"Purchaser's Solicitors" means Shearman & Sterling of 0 Xxxxxx Xxxxxx,
Xxxxxx XX0X 0XX;
"Reporting Accountants" means a firm of Chartered Accountants independent
of the Vendors and of the Purchaser to be agreed by the Vendors and the
Purchaser within seven days of a notice by one to the other requiring such
agreement or failing such agreement to be nominated on the application of
either of them by
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or on behalf of the President for the time being of the Institute of
Chartered Accountants in England and Wales;
"Restrictive Covenant Payments" means the payments by the Purchaser to the
Vendors described in Clause 9.2;
"Senior Employee" means an employee of a Group Company who earns a salary
of 'L'20,000 or more per annum;
"Shares" means 50,000 Ordinary Shares of 'L'1 each being the whole of
the issued share capital of the Company;
"Subsidiaries" means the subsidiaries of the Company details of which are
contained in Part 4 of Schedule 1;
"Tax Deed of Covenant" means the deed of covenant against Taxation in the
agreed terms to be entered into at Completion;
"Taxation" and "Transaction" bear the meanings respectively given to them
in the Tax Deed of Covenant;
"Tenancy Agreement" means the tenancy of the Property set out in Schedule
5 to be granted to the Company by the Vendors at Completion;
"Vendors' Solicitors" means Seddons of 0 Xxxxxxx Xxxxxx, Xxxxxx X0X 0XX;
"Warranties" means the warranties and representations set out in Schedule
3 and
"Warranty" means any one of them;
"Warrantors" means Xxx Xxxxx Xxxxxx Xxxxx and Xxxx Xxxxxxx Xxxxx;
1.2 Subordinate Legislation
References to a statutory provision include any subordinate legislation
made from time to time under that provision;
1.3 Modification etc. of Statutes
References to a statute or statutory provision include that statute or
provision as from time to time modified or re-enacted or consolidated
whether before or after the date of this Agreement so far as such
modification or re-enactment or consolidation applies or is capable of
applying to any transactions entered into in accordance with this
Agreement prior to Completion and (so far as liability thereunder may
exist or can arise) shall include also any past statutory provision (as
from time to time modified or re-enacted or consolidated) which such
provision has directly or indirectly replaced;
1.4 Connected Persons
A person shall be deemed to be connected with another if that person is
connected with such other within the meaning of Section 839 of the Income
and Corporation Taxes Xxx 0000;
1.5 Accounts
Any reference to "accounts" shall include the directors' and auditors'
reports, relevant balance sheets and profit and loss accounts and related
notes together with all documents which are or would be required by law to
be annexed to the accounts of the Company concerned to be laid before that
Company in general meeting in respect of the accounting reference period
in question;
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1.6 Companies Xxx 0000
The words "holding company" and "subsidiary" shall have the same meanings
in this Agreement as their respective definitions in the Companies Xxx
0000 as modified by the Companies Xxx 0000.
1.7 Interpretation Xxx 0000
Xxx Xxxxxxxxxxxxxx Xxx 0000 shall apply to this Agreement in the same way
as it applies to an enactment;
1.8 SSAPs etc.
A reference to an SSAP means a statement of standard accounting practice
as adopted by the Accounting Standards Board and published by the
Institute of Chartered Accountants of England and Wales and a reference to
an FRS means a financial reporting standard developed and issued by the
Accounting Standards Board and which may, where directed by the Accounting
Standards Board, supersede an SSAP;
1.9 Clauses, Schedules etc.
References to this Agreement include any Schedules to it and this
Agreement as from time to time amended and references to Clauses and
Schedules are to Clauses of and Schedules to this Agreement;
1.10 Information
Any reference to books, records or other information means books, records
or other information in any form including paper, electronically stored
data, magnetic media, film and microfilm; and
1.11 Headings
Headings shall be ignored in construing this Agreement.
2. Agreement to Sell the Shares
2.1 Sale of Shares
The Vendors (each as to those of the Shares specified against his name in
Part 1 of Schedule 1) shall sell and the Purchaser, relying only on the
several representations, warranties and undertakings contained in this
Agreement, shall purchase the Shares free from all Encumbrances and
together with all rights and advantages now and hereafter attaching
thereto.
2.2 Rights of Pre-emption
The Vendors hereby waive irrevocably any and all rights of pre-emption
over the Shares conferred either by the Articles of Association or other
equivalent document of the Company or in any other way.
3. Consideration
3.1 Amount
The aggregate consideration for the purchase of the Shares (the "Purchase
Price") shall be calculated on the following basis:
i. 'L'8.5 million for the goodwill of the business of the
Company; and
ii. the Net Asset Value as at the close of business on the date of
Completion calculated on the basis set out in clause 8.
which aggregate consideration shall be divisible among the Vendors as set
out in Part 1 of Schedule 1.
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3.2 Satisfaction of the Purchase Price
3.2.1 The Purchase Price shall be satisfied by the payment of cash as
follows.
3.2.1.1 the Deposit; and
3.2.1.2 the sum of 'L'11,500,000 on Completion; and
3.2.1.3 as to any balance calculated pursuant to Clauses 3.2.2 and
3.2.3 and then as provided by Clause 8.3.
3.2.2 If upon the Completion Accounts either becoming final and binding
under clause 8.2.3 or the determination of the Reporting
Accountants being made available for collection by the parties
pursuant to clause 8.2.7, the Net Asset Value is greater than 'L'5
million, the Purchaser shall pay to the Vendors an amount equal to
the excess of the Net Asset Value over 'L'5 million.
3.2.3 If upon the Completion Accounts either becoming final and binding
under clause 8.2.3 or the determination of the Reporting
Accountants being made available for collection by the parties
pursuant to clause 8.2.7, the Net Asset Value is less than 'L'5
million, the Vendors shall pay to the Purchaser an amount equal to
the shortfall.
3.3 After Completion the Purchaser shall make additional payments to the
Vendors upon the terms and subject to the conditions of clause 9.
4. Condition
4.1 Condition Precedent
Completion of this Agreement is conditional upon (and accordingly
beneficial ownership in the Shares will not pass until) the passing at a
general meeting of the Company of a resolution under s320 Companies Xxx
0000 approving the sale by the Company to the Vendors of 2 Jaguar XK8
motor cars, registration numbers WHO60 and 10WHO (the "Cars") at the price
to be agreed with the Company.
4.2 Responsibility for Satisfaction
4.2.1 The Vendors hereby jointly and severally undertake to use all
reasonable endeavours to ensure the satisfaction of the condition
set out in Clause 4.1 as soon as possible. Without prejudice to the
foregoing, it is agreed that all requests and enquiries from any
government, governmental, supranational or trade agency, court or
regulatory body shall be dealt with by the Vendors and the
Purchaser in consultation with each other and each of the Vendors
and the Purchaser shall promptly co-operate with and provide all
necessary information and assistance reasonably required by such
government, agency, court or body upon being requested to do so by
the other.
4.3 Non-Satisfaction
The party responsible for the satisfaction of the condition as specified
in Clause 4.2 shall promptly give notice to the other parties of the
satisfaction of the relevant condition within two Business Days of
becoming aware of the same. If any of the conditions in Clause 4.1 are not
satisfied or waived by the Purchaser on or before 31 July 2000 or such
other date as the parties may agree save as expressly provided in Clause
12.2, the Purchaser may, in its sole discretion, terminate this Agreement
and no party shall have any claim against any other under it, save for any
claim arising from breach of any undertaking contained in Clause 4.2.1.
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5. Action Pending Completion
5.1 Vendors' General Obligations
The Vendors shall procure that, pending Completion and until that event
subject to the terms of the Confidentiality Letter signed by the Guarantor
on November 18th 1999:
5.1.1 each Group Company will carry on business only in the ordinary
course, save insofar as agreed in writing by the Purchaser;
5.1.2 the Purchaser and its agents will, upon reasonable notice, be
allowed access to, and to take copies of, the books and records of
each Group Company including, without limitation, the statutory
books, minute books, leases, licences, contracts, details of
receivables, Intellectual Property, tax records, supplier lists and
customer lists in the possession or control of any Group Company ;
5.1.3 such representatives and advisers as the Purchaser requests may be
designated to work with the Vendors with regard to the management
and operations of the Group Companies. Subject to such
representatives and advisers being reasonably available, the
Vendors will consult, and will cause the Group Companies to
consult, with such representatives and advisers with respect to any
action which may materially affect the business of the Group taken
as a whole. The Vendors will furnish and will cause the Group to
provide to such representatives and advisers such information as
they may reasonably request for this purpose;
5.1.4 each Group Company shall take all reasonable steps to preserve its
assets and, in particular, will maintain in force all insurance
policies and all other such insurances normally kept in force; and
5.1.5 each Group Company shall take all reasonable steps to preserve the
validity of its Intellectual Property.
5.2 Restrictions on the Vendors
Without prejudice to the generality of Clause 5.1, the Vendors shall
collaborate fully with the Purchaser in relation to all material matters
concerning the running of the Group between the date of this Agreement and
Completion and during that period shall procure that each Group Company
shall not save as envisaged by this Agreement without the prior written
consent of the Purchaser such consent not to be unreasonably withheld or
delayed particularly in the case of the orderly running of the business of
the Company in the manner in which it was conducted prior to the date of
this Agreement:
5.2.1 incur or enter into any agreement or commitment involving any
capital expenditure in excess of 'L'25,000 per item and 'L'100,000
in aggregate;
5.2.2 enter into or amend any contract or commitment which is not capable
of being terminated without compensation at any time with three
months' notice or less or which is not in the ordinary course of
business or which involves or may involve total annual expenditure
in excess of 'L'100,000;
5.2.3 in relation to any Property:
i. apply for any planning permission or implement any planning
permission already obtained but not implemented;
ii. carry out any material structural alteration or addition to,
or materially effect any change of use of, such Property;
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iii. terminate or serve any notice to terminate, surrender or
accept any surrender of or waive the terms of any lease,
tenancy or licence which is material in the context of the
relevant Group Company;
iv. agree any new rent or fee payable under any lease, tenancy or
licence which is material in the context of the relevant Group
Company;
v. enter into or vary any agreement, lease, tenancy, licence or
other commitment which is material in the context of the
relevant Group Company;
vi. sell, convey, transfer, assign or charge any Property or grant
any rights or easements over any Property or enter into any
covenants affecting any Property or agree to do any of the
foregoing;
5.2.4 incur any additional borrowings or incur any other indebtedness
otherwise than in the ordinary course of business in excess of
'L'25,000 per item and 'L'100,000 in aggregate;
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5.2.5 save as required by law, make any material amendment to the terms
and conditions of employment (including, without limitation,
remuneration, pension entitlements and other benefits) of any
employee (other than minor increases which the Vendors shall notify
to the Purchaser as soon as reasonably possible), provide or agree
to provide any gratuitous payment or benefit to any such person or
any of their dependants, or dismiss any employee or engage or
appoint any additional employee;
5.2.6 discontinue or amend the Pension Scheme to any material extent or
commence to wind it up or cause it to cease to admit new members or
communicate to any employee any material plan, proposal or
intention to amend, wind up, terminate or exercise any discretion
in relation to the Vendor's Pension Scheme;
5.2.7 pay any benefits under the Vendor's Pension Scheme other than in
accordance with the terms of the documents governing such scheme
and not under any discretionary power;
5.2.8 acquire or agree to acquire or dispose of or agree to dispose of
any material asset or material stocks or enter into or amend any
material contract or arrangement, in each case, involving
consideration, expenditure or liabilities in excess of 'L'100,000;
5.2.9 take steps to procure payment by any debtor generally in advance of
the date on which book and other debts are usually payable in
accordance with the standard terms of business of any Group Company
or (if different) the period extended to any particular debtor in
which to make payment;
5.2.10 delay making payment to any trade creditors generally beyond the
date on which payment of the relevant trade debt should be paid in
accordance with credit periods authorised by the relevant creditors
(or (if different) the period extended by creditors in which to
make payment);
5.2.11 amend, to any material extent, the advertising and promotional
activities, or pricing or purchasing policies, in place at the date
of this agreement;
5.2.12 amend, to any material extent, any of the terms on which goods,
facilities or services are supplied, such supplies being material
in the context of the relevant Group Company except where required
to do so in order to comply with any applicable legal or regulatory
requirement;
5.2.13 enter into any guarantee, indemnity or other agreement to secure
any obligation of a third party or create any Encumbrance over any
of its assets or undertaking;
5.2.14 amend any insurance contract, fail to notify any insurance claim in
accordance with the provisions of the relevant policy or settle any
such claim below the amount claimed;
5.2.15 allot, issue, redeem or repurchase any share or loan capital (or
option to subscribe for the same) of any Group Company;
5.2.16 acquire or agree to acquire any share, shares or other interest in
any company, partnership or other venture;
5.2.17 declare, make or pay any dividend or other distribution to
shareholders;
5.2.18 make any change to its accounting practices or policies or amend
its memorandum or articles of association;
5.2.19 engage in any practice, take any action, fail to take any action or
enter into any transaction which could cause any representation or
warranty of the Vendors to be untrue or result in a breach of any
covenant made by the Vendors in this agreement;
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5.2.20 dispose of any Intellectual Property; and
5.2.21 settle any pending litigation or claims.
6. Completion
6.1 Date and Place
Subject to Clause 4, Completion shall take place at the offices of the
Purchaser's Solicitors on the later of three Business Days following
fulfilment or waiver of the condition set out in Clause 4.1, and at such
other place or on such other date as may be agreed between the Purchaser
and the Vendors and in any event no later than 31st July 2000 provided
that if Completion has not taken place by 16th June 2000 (through no fault
of the Vendors) then interest pursuant to Clause 13.13 shall be payable by
the Purchaser to the Vendors on the amount of the Purchase Price unpaid.
6.2 Obligations on Completion
On Completion the Vendors and the Purchaser shall procure that their
respective obligations specified in Schedule 2 are fulfilled.
6.3 Payment of Price
Against compliance with the foregoing provisions by the Vendors the
Purchaser shall satisfy the purchase consideration in the manner specified
in Clause 3.2.
6.4 Right to Terminate
If the foregoing provisions of this Clause are not materially complied
with by the Vendors by or on the date set for Completion, the Purchaser
shall be entitled (in addition to and without prejudice to all other
rights or remedies available to it including the right to claim damages)
by written notice to the Vendors served on such date:
6.4.1 to elect to terminate this Agreement without liability on the part
of the Purchaser (in which event the Purchaser shall be entitled to
the return of all monies paid under Clause 3 hereof together with
interest earned thereon); or
6.4.2 to effect Completion so far as practicable having regard to the
defaults which have occurred; or
6.4.3 to fix a new date for Completion (not being more than 20 Business
Days after the agreed date for Completion) in which case the
foregoing provisions of this Clause 6.4 shall apply to Completion
as so deferred but provided such deferral may only occur once.
7. Warranties
7.1 Incorporation of Schedule 3
7.1.1 The Vendors jointly and severally warrant and represent to the
Purchaser and its successors in title in the terms set out in
Schedule 3 subject only to:
i. any matter which is fairly disclosed in the Disclosure Letter
and the Disclosure Bundle and any matter expressly referred to
in the Audited Accounts or expressly provided for under the
terms of this Agreement; and
ii. any matter or thing hereafter done or omitted to be done
pursuant to this Agreement or otherwise at the request in
writing or with the approval in writing of the Purchaser.
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7.1.2 The Vendors acknowledge that the Purchaser has entered into this
Agreement in reliance upon the Warranties and on the undertakings
contained in Clause 9. Save as expressly otherwise provided, the
Warranties shall be separate and independent and shall not be
limited by reference to any other paragraph of the said Schedule or
by anything in this Agreement or the Tax Deed of Covenant.
7.2 Limitation of Liability
The provisions of Schedule 4 shall apply.
7.3 Effect of Completion
The Warranties and all other provisions of this Agreement and the Tax Deed
of Covenant insofar as the same shall not have been performed at
Completion shall not be extinguished or affected by Completion, except by
a specific and duly authorised written waiver or release by the Purchaser.
7.4 Information from Group Companies
The Vendors agree with the Purchaser (for itself and as trustee for each
Group Company and their respective officers, employees and agents) to
assign to the Purchaser any rights, remedies or claims which they may have
in respect of any misrepresentation, inaccuracy or omission in or from any
information or advice supplied or given by any Group Company or its
respective officers, employees or agents in connection with assisting the
Vendors in the making of any representation and the giving of the
Warranties or the preparation of the Disclosure Letter and the Tax Deed of
Covenant.
8. Completion Accounts
8.1 The Completion Accounts
The Purchasers shall procure that as soon as practicable following
Completion there shall be drawn up a consolidated balance sheet of the
Group Companies as at Completion and a consolidated profit and loss
account of such companies in respect of the period from the Balance Sheet
Date to Completion (the "Completion Accounts") and that the same are
reviewed by the Purchasers' accountants. The Completion Accounts shall be
drawn up in accordance with accountancy principles generally accepted in
the United Kingdom and (so far as not inconsistent therewith) in
accordance with the principles, methods and bases adopted in drawing up
the Audited Accounts and so as to comply with the Companies Xxx 0000
except that:
8.1.1 The carrying value for short leaseholds shall be based on the
amounts included in the Audited Accounts adjusted only for
additions and depreciation since the Balance Sheet Date. For the
avoidance of doubt no adjustment shall be made as a consequence of
or to reflect the grant of the Tenancy Agreement.
8.1.2 The Completion Accounts shall reflect the notional profit which
would accrue to the Company in respect of forward foreign currency
contracts calculated by reference to the rate of exchange
prevailing at Completion as if those contracts were crystallised at
that date.
8.1.3 Stock provisions (if any) shall be calculated as if the Company was
continuing in business in the same manner and selling the same
product lines in the same style as prevailing at the Balance Sheet
Date.
8.1.4 Any bonus provided for and not paid by reason of Xxxx Xxxxxx and/or
Xxxxxx Xxxx failing to enter into the Employees' Covenants shall be
released in the Completion Accounts.
Subject to the provisions of this clause 8 the amount of the net asset
value shall be as shown by the Completion Accounts.
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8.2 Preparation
8.2.1 The Completion Accounts shall be delivered by the Purchaser to the
Vendors as soon as is practicable following Completion and, in any
event, not later than twenty Business Days after Completion. Prior
to such delivery, the Purchasers shall so far as is practicable
consult with the Vendors with a view to reducing the potential
areas of future disagreement.
8.2.2 If the Vendors do not within twenty Business Days of presentation
to it of the Completion Accounts (and it is acknowledged that the
Vendors shall instruct BDO Xxxx Xxxxxxx ("BDO") to review the
Completion Accounts within such time, and that BDO shall be allowed
access to the Company's records and PricewaterhouseCooper's records
to the extent necessary to enable it to carry out such review) give
notice to the Purchaser that it disagrees with the Completion
Accounts or any item thereof such notice stating the reasons for
the disagreement in reasonable detail (the "Vendors' Disagreement
Notice"), the Completion Accounts shall be final and binding on the
parties for all purposes. If the Vendor gives a valid Vendor's
Disagreement Notice within such twenty Business days, the parties
shall attempt in good faith to reach agreement in respect thereof
and, if they are unable to do so within twenty Business Days of
such notification, the Purchaser may by notice to the Vendors or
the Vendors may by notice to the Purchaser require that the
Completion Accounts be referred to the Reporting Accountants (an
"Appointment Notice").
8.2.3 Within 21 days of the giving of an Appointment Notice, the
Purchaser may by notice to the Vendor indicate that, in the light
of the fact that the Vendor has not accepted the Completion
Accounts in their entirety, the Purchaser wishes the Reporting
Accountants to consider matters relating to the Completion Accounts
in addition to those specified in the Vendors' Disagreement Notice,
such notice stating in reasonable detail the reasons why and in
what respects the Purchaser believes that the Completion Accounts
should be altered (the "Purchaser's Disagreement Notice").
8.2.4 The Reporting Accountants shall be engaged jointly by the parties
on the terms set out in this Clause 8.2 and otherwise on such terms
as shall be agreed; provided that neither party shall unreasonably
(having regard, inter alia, to the provisions of this Clause 8.2)
refuse its agreement to terms proposed by the Reporting Accountants
or by the other party. If the terms of engagement of the Reporting
Accountants have not been settled within 45 days of their identity
having been determined (or such longer period as the parties may
agree) then, unless one party is unreasonably refusing its
agreement to those terms, those accountants shall be deemed never
to have become the Reporting Accountants and new Reporting
Accountants shall be selected in accordance with the provisions of
this Agreement.
8.2.5 Except to the extent that the parties agree otherwise, the
Reporting Accountants shall determine their own procedure but:
a. apart from procedural matters and as otherwise set out in this
Agreement shall determine only:
i. whether any of the arguments for an alteration to the
Completion Accounts put forward in the Purchaser's
Disagreement Notice or the Vendors' Disagreement Notice
is correct in whole or in part; and
ii. if so, what alterations should be made to the Completion
Accounts in order to correct the relevant inaccuracy in
it;
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b. shall apply the principles set out in clause 8.1;
c. shall make their determination pursuant to paragraph (a) above
as soon as is reasonably practicable;
d. the procedure of the Reporting Accountants shall:
i. give the parties a reasonable opportunity to make
written and oral representations to them;
ii. require that each party supply the other with a copy of
any written representations at the same time as they are
made to the Reporting Accountants;
iii. permit each party to be present while oral submissions
are being made by the other party; and
iv. for the avoidance of doubt, the Reporting Accountants
shall not be entitled to determine the scope of their
own jurisdiction.
8.2.6 The determination of the Reporting Accountants pursuant to Clause
8.2.5 (a) shall (i) be made in writing and made available for
collection by the parties at the offices of the Reporting
Accountants at such time as they shall determine and (ii) unless
otherwise agreed by the parties include reasons for each relevant
determination.
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8.2.7 The Reporting Accountants shall act as experts and not as
arbitrators and their determination of any matter falling within
their jurisdiction shall be final and binding on the parties save
in the event of manifest error (when the relevant part of their
determination shall be void and the matter shall be remitted to the
Reporting Accountants for correction). In particular, without
limitation:
a. their determination shall be deemed to be incorporated into
the Completion Accounts, which shall then be final and binding
on the parties save as aforesaid;
b. their determination of any fact which they have found it
necessary to determine for their determination pursuant to
Clause 8.2.5(a) shall be final and binding on the parties for
all purposes including any Warranty claim or alleged or
prospective Warranty claim or any claim or alleged or
prospective claim for indemnification.
8.2.8 The expenses of the Reporting Accountants shall be borne as they
shall direct at the time they make any determination under Clause
8.2.6(a) or, failing such direction, equally between the Purchaser,
on the one hand, and the Vendors, on the other.
8.2.9 The parties shall co-operate with the Reporting Accountants and
comply with their reasonable requests made in connection with the
carrying out of their duties under this Agreement. In particular,
without limitation, the Purchaser shall keep up-to-date and,
subject to reasonable notice, make available to the Vendors'
representatives, the Vendors' accountants and the Reporting
Accountants its books and records relating to the businesses of the
Group Companies during normal office hours during the period from
the appointment of the Reporting Accountants down to the making of
the relevant determination.
8.2.10 Subject to Clause 8.2.11, nothing in this Clause 8.2 shall entitle
a party or the Reporting Accountants access to any information or
document which is protected by legal professional privilege, or
which has been prepared by the other party or its accountants and
other professional advisers with a view to assessing the merits of
any claim or argument.
8.2.11 A party shall not be entitled by reason of Clause 8.2.10 to refuse
to supply such part or parts of documents as contain only the facts
on which the relevant claim or argument is based.
8.2.12 Each party and the Reporting Accountants shall, and shall procure
that its accountants and other advisers shall, keep all information
and documents provided to them pursuant to this Clause 8.2
confidential and shall not use the same for any purpose, except for
disclosure or use in connection with the preparation of the
Completion Accounts, the proceedings of the Reporting Accountants
or another matter arising out of this Agreement or in defending any
claim or argument or alleged claim or argument relating to this
Agreement or its subject matter.
8.3 Payment of balance/Consideration
From and excluding three Business Days of either the Completion Accounts
becoming final and binding under Clause 8.2.2 or the determination of the
Reporting Accountants being made available for collection by the parties
pursuant to Clause 8.2.6, the Purchaser shall pay to the Vendors or, as the case
may be, the Vendors shall pay to the Purchaser, an amount equal to the sums due
under Clauses 3.2.2. or 3.2.3, as the case may be together with interest thereon
calculated from the Completion Date in accordance with Clause 12.8.
14
9. Restrictions on the Vendors
9.1 Restrictions
In consideration of the amounts payable to each Vendor referred to in
Clause 9.2, the Vendors further jointly and severally undertake with the
Guarantor and its successors in title as trustee for itself and the Group
Companies that each Vendor will not in any Relevant Capacity during the
Restricted Period:
9.1.1 directly or indirectly carry on any business (whether carried on
under the name "Viners" or any name likely to be confused
therewith) which is of the same or similar type to the business of
the importation and wholesaling of glassware, tableware and cutlery
(meaning flatware and kitchen knives) (the "Restricted Products")
and which is in competition with the business of any Group Company
as now carried on nor be concerned or interested in any such
business save through the holding or being interested in not more
than 3 per cent of the outstanding share capital of a company the
shares of which are listed on any recognised stock exchange;
9.1.2 in competition with the business of the Guarantor and/or any Group
Company as now carried on enter into any licence agreement with
Royal Doulton (UK) Limited or Wedgewood of the same or similar type
(and for the same products) to the agreements entered into by the
Company with each of Royal Doulton (UK) Limited on 21 December,
1995 (the "RD Agreement") and Wedgwood on 2nd June 1999 (the
"Wedgwood Agreement");
9.1.3 in relation to the Restricted Products and in competition with the
business of any Group Company as now carried on canvass or solicit
the custom of any person, firm or company who has within two years
prior to Completion been a regular customer of any Group Company;
or
9.1.4 save in the case of Xxxxx Xxxxxxxx, induce or seek to induce any
employee of the Guarantor and/or any Affected Employee to become
employed whether as employee, consultant or otherwise by any of the
Vendors whether or not such employee of the Purchaser and/or any
Affected Employee would thereby commit any breach of his contract
of service,
unless the Guarantor has given its prior consent in writing.
9.2
9.2.1 Subject to Clause 9.2.2, the amounts payable to each Vendor under
Clause 9.1 (the "Restrictive Covenant Payments") shall be
'L'1,250,000 which shall be paid over the three year period from
Completion to the third anniversary of the Date of Completion (the
"Third Anniversary Date"), such amounts to be paid quarterly in
arrears. The first quarterly payment being paid three months from
and excluding the date of Completion and the final quarterly
payment being paid three months from and excluding the Third
Anniversary Date.
9.2.2 There shall be deducted from the amounts payable to the Vendors
under Clause 9.2.1, by way of set-off, the amount(s) of any
Admitted Claims that the Purchaser is entitled to recover against
the Vendors hereunder up to an aggregate maximum of 'L'350,000.
9.2.3 If control (meaning an acquisition of more than 51% of its equity)
of the Guarantor and/or the Purchaser and/or the Company is
acquired by a third party at any time during the Restricted Period
then the whole of the then unpaid Restrictive Covenant Payments
shall be forthwith due and payable but upon such payment being
discharged but not otherwise) the provisions of clause 9.1 shall
continue in full force and effect for the whole of the Restricted
Period.
9.3 Method of Payment
Unless otherwise specified to the contrary, wherever in this Agreement
provision is made for the payment by one party to another, such payment
shall be effected by crediting for same day value the account
15
specified in the Payment Account Details of the party entitled to the
payment by way of CHAPS on or before the due date for payment unless the
payee by notice to the payer, not later than three Business Days prior to
the due date for payment, elects to be paid by banker's draft drawn on any
international bank reasonably acceptable to the payer and having an office
in London. Payment of such sum shall be a good discharge to the payer of
its obligation to make such payment and the payer shall not be obliged to
see to the application of the consideration as between the relevant
Vendors (in the case of a payment by the Purchaser).
9.4 Reasonableness of Restrictions
The Vendors agree that they consider that the restrictions contained in
this Clause are no greater than is reasonable and necessary for the
protection of the interest of the Purchaser but if any such restriction
shall be held to be void but would be valid if deleted in part or
reduced in application, such restriction shall apply with such deletion
or modification as may be necessary to make it valid and enforceable.
16
9.5 Interpretation
The following terms shall have the following meanings respectively in this
Clause 9:
9.5.1 "Affected Employee" means any present employee of any Group Company
who (a) has access to trade secrets or other confidential
information of any Group Company or (c) is a Senior Employee.
9.5.2 "Restricted Period" means three years commencing on Completion;
9.5.3 "Relevant Capacity" means for its or his own account or for that of
any person, firm or company (other than the Purchaser, Guarantor
and the Group Companies) or in any other manner and whether through
the medium of any company controlled by it or him (for which
purpose there shall be aggregated with its or his shareholding or
ability to exercise control the shares held or control exercised by
any person connected with the Vendors) or as principal, partner,
director, employee, consultant or agent;
10. Pensions
10.1 The Purchaser shall co-operate in the transfer of the Viners of Sheffield
Plc Executive Pension Plan to the Vendors' nominated Company as soon as
possible after Completion provided that the Vendors shall meet all
necessary costs occasioned thereby.
10.2 The deed of transfer (or other instrument) will:
a. include nothing which will increase the liabilities of the
Company;
b. be subject to Inland Revenue Approval; and
c. contain a provision whereby the members agree not to make any
claim against the Company in relation to the scheme or its
benefits and undertake to reimburse the Company the amounts of
any claims made by third parties.
11. Guarantee of the Purchaser's Obligations
11.1 The Guarantor hereby unconditionally and irrevocably severally guarantees
to the Vendors the full, due and punctual performance and observations by
the Purchaser under the terms of this Agreement. In the event of any
failure by the Purchaser to perform or observe such obligations, the
Guarantor shall be liable for the obligations of the Purchaser arising
hereunder in accordance with the provisions of this Clause 11.1 as if it
were a primary obligor hereunder.
11.2 The obligations of the Guarantor under this Clause:
11.2.1 shall be continuing obligations and shall not be satisfied,
discharged or affected by any intermediate payment or settlement of
account or any change in the constitution or control of, or the
insolvency of, or any liquidation, winding up or analagous
proceedings relating to the Purchaser or any change in the terms,
conditions and undertakings on the part of the Purchaser contained
in this Agreement; and
11.2.2 shall not be discharged, prejudiced, lessened, affected or impaired
by any act, omission or circumstance whatsoever which but for this
provision might operate to release or exonerate the Purchaser from
all or any part of such obligations or in any way discharge,
prejudice, lessen, affect or impair the same.
12. Whole Agreement and Remedies
17
12.1 Whole Agreement
This Agreement contains the whole agreement between the parties relating
to the subject matter of this Agreement at the date hereof to the
exclusion of any terms implied by law which may be excluded by contract
and supersedes any previous written or oral agreement between the parties
in relation to the matters dealt with in this Agreement.
12.2 Remedies
So far as permitted by law and except in the case of fraud, each party
agrees and acknowledges that its only right and remedy in relation to any
representation, warranty or undertaking made or given in connection with
this Agreement shall be for breach of the terms of this Agreement to the
exclusion of all other rights and remedies (including those in tort or
arising under statute).
12.3 Reasonableness of this Clause
Each party to this Agreement confirms it has received independent legal
advice relating to all the matters provided for in this Agreement,
including the provisions of this Clause, and agrees, having considered the
terms of this Clause and the Agreement as a whole, that the provisions of
this Clause are fair and reasonable.
12.4 Interpretation
In Clauses 12.1 to 12.3 "this Agreement" includes the Disclosure Letter,
the Disclosure Bundle and all documents entered into pursuant to this
Agreement.
13. Other Provisions
13.1 Vendors' Liability
Except where provision is specifically made to the contrary, the liability
of each of the Vendors under or pursuant to any of the provisions of this
Agreement shall be joint and several. Any liability to the Purchaser under
this Agreement may in whole or in part be released, compounded or
compromised or time or indulgence given by the Purchaser in its absolute
discretion as regards either of the Vendors under such liability without
in any way prejudicing or affecting its rights against the other Vendor
under the same or a like liability whether joint and several or otherwise.
18
13.2 Announcements
13.2.1 No announcement or circular in connection with the existence or the
subject matter of this Agreement shall be made or issued by or on
behalf of the Vendors or the Purchaser without the prior written
approval of the Vendors and the Purchaser. This shall not affect
any announcement, filing or circular required by law or any
regulatory body (including, but not limited to the Securities and
Exchange Commission) or the rules of any recognised stock exchange
but the party with an obligation to make an announcement or issue a
circular shall consult with the other party/parties insofar as is
reasonably practicable before complying with such an obligation. A
copy of the announcement to be used by the parties hereto upon
Completion in the agreed form is attached as Schedule 6 hereto. The
Purchaser hereby permits the Vendors to disclose the existence of
this Agreement to the extent and at the same time and date as an
announcement thereof is made by the Purchaser in the form attached
in Schedule 6 hereof (the "Completion Announcement").
13.2.2 If Completion does not take place the Purchaser shall forthwith
hand over or procure the handing over of all accounts, records,
documents and papers of or relating to the Vendors and each Group
Company which shall have been made available to it provided that
this shall not apply to information available from public records
or information acquired by the Purchaser otherwise than from the
Vendors or any Group Company or their respective employees,
officers or agents.
13.2.3 The Purchaser shall use its best efforts to ensure that callers to
the Company seeking contact with the Vendors shall be given a
telephone number supplied by the Purchaser by the Vendor for this
purpose.
13.3 Successors and Assigns
13.3.1 Subject to Clause 13.3.2, this Agreement is personal to the parties
to it. Accordingly, neither the Purchaser nor the Vendors may,
without the prior written consent of the others, assign the benefit
of all or any of the other's obligations under this Agreement, nor
any benefit arising under or out of this Agreement.
13.3.2 Except as otherwise expressly provided in this Agreement, the
Purchaser may, without the consent of the Vendors, assign to a
connected company the benefit of all or any of the Vendors'
obligations under this Agreement provided, however, that such
assignment shall not be absolute but shall be expressed to have
effect only for so long as the assignee remains a connected
company. For the purposes of this sub-clause a "connected company"
is a company which is a subsidiary of the party concerned or which
is a holding company of such party or a subsidiary of such holding
company.
13.4 Variation
No variation of this Agreement shall be effective unless in writing and
signed by or on behalf of each of the parties to this Agreement.
13.5 Time of the Essence
Time shall be of the essence of this Agreement both as regards any dates,
and periods mentioned and as regards any dates, and periods which may be
substituted for them in accordance with this Agreement or by agreement in
writing between the parties.
19
13.6 The Purchaser acknowledges that the Vendors are the beneficial owners of
the Shares held by the Company (as the Vendor's nominee) in Elite
Exhibitions Limited ("Elite") and undertakes to the Vendors that upon them
procuring the relevant permissions under or changes to the Articles of
Association of Elite to enable them to do so, the Purchaser will procure
that the Company executes a transfer of the said shares to the Vendors but
at the cost of the Vendors.
13.7 Further Assurance
At any time after the date of this Agreement the Vendors shall and shall
use their proper endeavours to procure that any necessary third party
shall at the cost of the Purchaser execute such documents and do such acts
and things as the Purchaser may reasonably require for the purpose of
giving to the Purchaser the full benefit of all the provisions of this
Agreement.
13.8 On Completion the Vendors will grant and the Purchaser will procure that
the Company accepts the grant of the Tenancy Agreement provided that if
the exclusion order referred to in Clause 8 thereof has not been obtained
by that date, the Vendors will permit the Company to occupy the Property
as bare licensee upon the terms of the Tenancy Agreement and upon the
obtaining of the said exclusion order the parties shall complete the
Tenancy Agreement.
13.9 The Purchaser agrees that 50% of the Vendors' costs of and incidental to
the grant of the Tenancy Agreement and of the preparation of the schedule
of condition to be prepared in respect thereof shall be borne by the
Company.
13.10 With the Purchaser's consent the Vendors will use their proper efforts to
procure that Messrs. Xxxx Xxxxxx and Xxxxxx Xxxx ("PM" and "SD") enter
into the Employees' Covenants as soon as possible after Completion. If PM
and/or SD refuse to do so, the Purchaser will procure that the Company
does not pay the amounts provided in the Audited Accounts (which shall be
added back for the purposes of calculating the net assets in the
Completion Accounts).
13.11 In consideration of the Purchaser agreeing that the Company should not
seek a compromise agreement with Xxxxx Xxxxxxxx upon the termination of
her employment without compensation on Completion, the Vendors will
indemnify and keep indemnified the Company from and against all costs due
to and claims, proceedings, actions, and demands brought by her in respect
of the said employment on the termination thereof.
13.12 Costs
The Vendors shall bear all costs incurred by them and the Group in
connection with the preparation, negotiation and entry into of this
Agreement, the Tax Deed of Covenant and the sale of the Shares. The
Purchaser shall bear all such costs incurred by it.
13.13 Interest
If the Vendors or the Purchaser default in the payment when due of any sum
payable under this Agreement or the Tax Deed of Covenant (howsoever
determined) the liability of the Vendors or the Purchaser (as the case may
be) shall be increased to include interest on such sum from the date when
such payment is due until the date of actual payment (as well after as
before judgment) at a rate per annum of 3 per cent above the base rate
from time to time of Barclays Bank PLC. Such interest shall accrue from
day to day and shall be compounded with monthly rests.
13.14 Notices
13.14.1 Any notice, claim or demand in connection with this Agreement or
with any arbitration under this Agreement shall be in writing in
English (a "Notice") and shall be sufficiently given or served if
delivered or sent:
20
in the case of any of the Vendors to them at their respective
addresses shown at Part 2 of Schedule 1 with a copy to the
Vendors' Solicitors.
Fax: 000 0000 0000
Attention: Xxxxxx Xxxxxx
in the case of the Purchaser to Oneida U.K. Limited at:
00 Xxxxx Xxx, Xxxxxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxxx XX0 0XX
England.
Fax: (0) 000 000 0000
Attention: Xx. Xxxxx Xxxxxx, Director
With a copy to:
Shearman & Sterling
0 Xxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Fax: (0) 00 0000 0000
Attention: Xxxxxxxx Xxxxxxxxx
in the case of the Guarantor to Oneida Ltd at:
000-000 Xxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
XXX
Fax: (000) 000 0000
Attention: General Counsel
21
With a copy to:
Shearman & Sterling
0 Xxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Fax: (0) 00 0000 0000
Attention: Xxxxxxxx Xxxxxxxxx
or to such other address, fax number or addressee as is
notified in writing by the Vendors, the Purchaser or the
Guarantor to the other party(ies) to this Agreement.
13.14.2 Any Notice may be delivered by hand or, sent by messenger,
telegram, telex, fax or prepaid first class post (first class in
the case of service in the United Kingdom and airmail in the case
of international service). Without prejudice to the foregoing,
any Notice shall conclusively be deemed to have been received on
the next working day in the place to which it is sent, if sent by
messenger, telegram, telex or fax, or [60 hours from the time of
posting, if sent by post, or at the time of delivery, if
delivered by hand].
13.14.3 If any party to this Agreement dies, until the party giving
notice has received notice in writing of the grant of probate of
his will or letters of administration of his estate (or
equivalent) any Notice so given shall be as effectual as if he
were still living.
13.15 Invalidity
If any provision in this Agreement shall be held to be illegal, invalid or
unenforceable, in whole or in part, under any enactment or rule of law,
such provision or part shall to that extent be deemed not to form part of
this Agreement but the legality, validity or enforceability of the
remainder of this Agreement shall not be affected.
13.16 Counterparts
This Agreement may be entered into in any number of counterparts, all of
which taken together shall constitute one and the same instrument. Any
party may enter into this Agreement by signing any such counterpart.
13.17 Contract (Rights of Third Parties) Xxx 0000
Except as provided by clause 13.3, no term of this agreement is
enforceable under the Contracts (Rights of Third Parties) Xxx 0000 by a
person who is not a party to this Agreement.
22
13.18 Governing Law and Submission to Jurisdiction
13.18.1 This Agreement and the documents to be entered into pursuant to
it, save as expressly referred to therein, shall be governed by
and construed in accordance with English law.
13.18.2 All the parties irrevocably agree that the courts of England are
to have exclusive jurisdiction to settle any dispute which may
arise out of or in connection with this Agreement and the
documents to be entered into pursuant to it. All the parties
irrevocably submit to the jurisdiction of such courts and waive
any objection to proceedings in any such court on the ground of
venue or on the ground that proceedings have been brought in an
inconvenient forum.
13.19 Appointment of Process Agent
13.19.1 The Purchaser irrevocably appoints Law Debenture Corporate
Services Limited of Xxxxxxx Xxxxx, 00 Xxxxxxx Xxxxxx, Xxxxxx XX0X
0XX as its agent to accept service of process in England in any
legal action or proceedings arising out of this Agreement,
service upon whom shall be deemed completed whether or not
forwarded to or received by the Purchaser.
13.19.2 If such process agent ceases to be able to act as such or to have
an address in England, the Purchaser irrevocably agrees to
appoint a new process agent in England acceptable to the Vendor
and to deliver to the Vendor within 14 days a copy of a written
acceptance of appointment by the process agent.
13.19.3 Nothing in this Agreement shall affect the right to serve process
in any other manner permitted by law or the right to bring
proceedings in any other jurisdiction for the purposes of the
enforcement or execution of any judgment or other settlement in
any other courts.
In witness whereof this Agreement has been duly executed.
SIGNED by
XXX XXXXX XXXXXX XXXXX /s/ X. XXXXX
in the presence of:
Xxxxxx Xxxxxx
5 Portman Sq. W1H ONT
Solicitor
SIGNED by
XXXX XXXXXXX XXXXX /s/ XXXX XXXXX
in the presence of:
Xxxxxx Xxxxxx
As above
SIGNED by /s/ XXXXX X. XXXXXX
on behalf of ONEIDA
U.K. LIMITED
23
in the presence of:
Xxxxxxxx XxxXxxxxx
0 Xxxxxx Xxxxxx
Lawyer
SIGNED by /s/ XXXXX X. XXXXXX
on behalf of ONEIDA LTD
in the presence of:
Xxxxxxxx XxxXxxxxx
0 Xxxxxx Xxxxxx
Lawyer
24
Schedule 1
Part 1
Particulars of Vendors, Shares Sold etc.
(1) (2) (3)
Names and Addresses of Vendors Shares Sold Consideration
Xxx Xxxxx Xxxxxx Xxxxx 25,000 as per clause 3 of the Agreement
Xxxx Xxxxxxx Xxxxx 25,000 as per clause 3 of the Agreement
Part 2
Particulars of Directors of the Company
Full Names Usual Address
Xxx Xxxxx Xxxxxx Xxxxx High Trees
0 Xxxxxx Xxxxxx
Xxxxxxxxxx
Xxxxxx X00 0XX
Xxxx Xxxxxxx Xxxxx The Oak Tree
Florida Close
Xxxxxx Xxxxx
Xxxxxxxxxxxxx XX0 0XX
Part 3
Particulars of the Company
Registered Number: 995820
Registered Office: 0 Xxxxx Xxxxxx, Xxxxxx,
X0X 0XX
Date and place of incorporation: 1 December 1970, London
Secretary: Xxx Xxxxx Xxxxxx Xxxxx
VAT Number: 379622317
Tax District and Reference Number: Euston Park TDO
86230/14688
Accounting Reference Date: 30th April
Auditors: BDO Xxxx Xxxxxxx
Solicitors Seddons
Authorised Share Capital: 'L'50,000 divided into 50,000
Ordinary Shares of 'L'1 each
Issued and fully paid-up Share Capital: 50,000 Ordinary Shares of'L'1 each
Loan Capital: None
25
Part 4
Particulars of the Subsidiaries
Cleveley's Promotions Limited
Registered Number: 1677631
Registered Office: 0 Xxxxx Xxxxxx, Xxxxxx
X0X 0XX
Date and place of incorporation: 4.10.82 England and Wales
Directors: Xxx Xxxxx Xxxxxx Xxxxx, Xxxx
Xxxxxxx Xxxxx
Secretary:
VAT Number: Not registered
Tax District and Reference Number: Euston Park TDO
623/66230/24099
Accounting Reference Date: 30th April
Auditors: BDO Xxxx Xxxxxxx
Solicitors Seddons
Authorised Share Capital: 'L'50,000 divided into 50,000
Ordinary Shares of 'L'1 each
Issued and fully paid-up Share Capital: 50,000 Ordinary Shares of'L'1 each
Loan Capital: None
Shareholders No. of Shares
Viners of Sheffield Limited 50,000
Viners (Hong Kong) Limited
Registerered Number 507836
Registered Office 13F Gloucester Tower
The Landmark,
00 Xxxxxx Xxxxxx,
Xxxxxxx Xxxx Xxxx
Date and place of incorporation 14.5.95 Hong Kong
Directors Xxx Xxxxx Xxxxxx Xxxxx
Xxxx Xxxxxxx Xxxxx
Secretary BCS Limited, 13F Gloucester Tower
The Landmark, 00 Xxxxxx Xxxxxx,
Xxxxxxx Xxxx Xxxx
Nominal Share Capital: 1,000,000 HK Dollars, divided into 1000 Shares of
1 HK Dollar each
Issued and fully paid up Share Capital 100 Shares of 1 HK Dollar each
26
Viners of Sheffield Ltd 99 Shares
Xxxxxxxx Xxxx 1 Share
------------
100 Shares
------------
27
Schedule 2
Completion Obligations
Vendors' and Purchasers Obligations
1. General
On Completion the Vendors shall deliver or make available to the
Purchaser:
1.1 evidence of the due fulfilment of the condition specified in Clause 4.1.
1.2 the Tenancy Agreement duly executed against a counterpart thereof.
1.3 transfers of the Shares duly executed by the registered holders in favour
of the Purchaser or as it may direct accompanied by the relative share
certificates (or an express indemnity in a form satisfactory to the Purchaser in
the case of any certificate found to be missing);
1.4 the written resignations of each of the directors and secretaries of each
Group Company from his office as a director or secretary or employee to take
effect on the date of Completion with acknowledgments signed by each of them in
a form satisfactory to the Purchaser and executed as a deed to the effect that
in respect of the holding of an office or of employment prior to Completion he
has no claim against any Group Company for compensation for loss of office
(whether contractual, statutory or otherwise), unfair dismissal, redundancy or
otherwise except only for any accrued remuneration and reimbursable business
expenses incurred down to the date of Completion and agreeing to take such
action as may be requested by the Purchaser to preclude him from making a
complaint to or bringing proceedings before an industrial tribunal in respect of
the termination of his contract of employment together with all credit cards in
the name of each Group Company issued to any of the persons so resigning;
1.5 the written resignations of the auditors of each Group Company to take
effect on the date of Completion, with acknowledgments signed by each of them in
a form satisfactory to the Purchaser to the effect that they have no claim
against any Group Company save in respect of any unpaid fees and containing the
statement referred to in Section 394 of the Companies Xxx 0000 to the effect
that there are no circumstances connected with their resignation which they
consider should be brought to the notice of the members or creditors of any
Group Company;
1.6 such waivers or consents as the Purchaser may require signed by members of
the Company to enable the Purchaser or its nominees to be registered as holders
of the Shares;
1.7 (for the Purchaser itself and as agent for the Company) the certificates
of incorporation, corporate seals (if any), cheque books, statutory and other
books of each Group Company (duly written up-to-date), the share certificates in
respect of each of the Subsidiaries and transfers of all shares in the
Subsidiaries held by nominees in favour of the Purchaser or as it may direct;
1.8 the Tax Deed of Covenant duly executed by the Covenantors named in it;
1.9 all the financial and accounting books and records of each Group Company
and (for the Purchaser itself and as agent for the Company) all title deeds and
other documentation relating to the Properties;
1.10 (if the Purchaser so requires) irrevocable powers of attorney (in such
form as the Purchaser may reasonably require) executed by each of the holders of
the Shares in favour of the Purchaser to enable the Purchaser (pending
registration of the relevant transfers) to exercise all voting and other rights
attaching to the Shares and to appoint proxies for this purpose;
1.11 evidence satisfactory to the Purchaser that the provisions of sub-
paragraph 5.2 of Schedule 3 ("Arrangements with Connected Persons etc.") have
been duly complied with insofar as they require certain matters to be dealt with
prior to Completion;
28
1.12 bank statements of all bank accounts of all Group Companies as at the
date of Completion;
1.13 the registration certificates for the registered Intellectual Property
owned by any Group Company and all other records relating to the prosecution
and/or maintenance of registered or applied for Intellectual Property owned by
any Group Company; and
1.14 all documents, drawings, records and other materials comprising or
embodying Know-How and designs owned by, or used in connection with the business
of, any Group Company.
1.15 a cheque for the purchase price of the vehicles referred to in 3.1 (unless
satisfied by contra against the payment due under clause 4.1).
2 Board Resolutions of the Group Companies
On Completion the Vendors shall procure the passing of Board Resolutions
of each Group Company inter alia:
2.1 (if so required by the Purchaser) revoking all existing authorities to
bankers in respect of the operation of its bank accounts and giving authority in
favour of such persons as the Purchaser may nominate to operate such accounts;
2.2 accepting the resignations referred to in paragraph 1.4 of this Schedule
and appointing such persons (within the maximum number permitted by the Articles
of Association) as the Purchaser may nominate as directors and secretary;
2.3 approving the registration of the share transfers referred to in
paragraph 1.3 of this Schedule subject only to their being duly stamped;
2.4 accepting the resignations referred to in paragraph 1.4 of this Schedule
and appointing PricewaterhouseCoopers as auditors of each Group Company;
2.5 changing its registered office in accordance with instructions given by
the Purchaser;
2.6 changing its accounting reference date in accordance with instructions
given by the Purchaser;
and shall hand to the Purchaser duly certified copies of such Resolutions.
3. Purchaser's Obligations
The Purchaser will deliver to the Vendors:
3.1 The documents of title (and in particular the Vehicle Registration
Documents) relating to the Cars; and
3.2 The Discount Agreement Letter.
4. The Vendors will procure that the Company (with the Purchaser's consent)
will deliver to the Vendors:
4.1 a remittance for the sums due to the Vendors in discharge of their
Directors' loan accounts (less the price of the Cars); and
4.2 subject to Clause 13.6.2, a counterpart of the Tenancy Agreement.
29
Schedule 3
Warranties Given by the Vendors under Clause 7
1. Authority and Capacity of the Vendors
1.1 Incorporation
The Vendors and the Group Companies are companies duly incorporated and
validly existing under their respective laws of incorporation.
1.2 Authority to Enter into this Agreement etc.
Each of the Vendors has the legal right and full power and authority to
enter into and perform this Agreement and the Tax Deed of Covenant and any
other documents to be executed by the Vendors pursuant to or in connection
with this Agreement which when executed will constitute valid and binding
obligations on each Vendor, in accordance with their respective terms.
1.3 No Breach
The execution and delivery of, and the performance by the Vendors of their
obligations under, this Agreement and the Tax Deed of Covenant and any
other documents to be executed by the Vendors pursuant to or in connection
with this Agreement will not:
1.3.1 result in a breach of any provision of the memorandum or articles
of association of any Vendor or Group Company; or
1.3.2 result in a breach of or give any third party a right to terminate
or modify, or result in the creation of any Encumbrance under any
agreement, licence or other instrument or result in a breach of any
order, judgment or decree of any Court, governmental agency or
regulatory body to which any of the Vendors or Group Companies is a
party or by which any of the Vendors or any of their respective
assets or Group Companies is bound.
1.4 The Shares
The Vendors are entitled to sell and transfer to the Purchaser the full
legal and beneficial ownership of the Shares set opposite their names in
Part 1 of Schedule 1 on the terms of this Agreement without the consent of
any third party. The Shares comprise the whole of the allotted and issued
share capital of the Company, have been properly and validly allotted and
issued and are each fully paid.
1.5 Pre-emption etc.
No person has the right (whether exercisable now or in the future and
whether contingent or not) to call for the allotment, conversion, issue,
sale or transfer of any share or loan capital or any other security giving
rise to a right over the capital of any Group Company under any option or
other agreement (including conversion rights and rights of pre-emption)
and there are no Encumbrances on the shares of any Group Company or any
arrangements or obligations to create any Encumbrances.
2. Accuracy and Adequacy of Information Disclosed to the Purchaser
All information contained in this Agreement and the Disclosure Letter and
the Disclosure Bundle was when given and remains at the date hereof true,
complete and accurate in all respects and not misleading and to the best
of the Vendors' knowledge, information and belief neither of them is aware
of any fact or matter or circumstances not disclosed in writing to the
Purchaser which renders any such information materially untrue, inaccurate
or misleading.
30
3. Accounts and Records
3.1 Latest Accounts
The Audited Accounts have been prepared in accordance with applicable law
and in accordance with accounting principles, standards and practices
generally accepted at the date of this Agreement in the United Kingdom
and, subject thereto, on a basis consistent with that adopted in preparing
the audited accounts for the previous two financial periods so as to give
a true and fair view of the assets, liabilities and state of affairs of
each of the Group Companies and of the Group as a whole at the Balance
Sheet Date and of the profits or losses for the period concerned and as at
that date make:
3.1.1 proper provision for all actual liabilities;
3.1.2 proper provision (or note in accordance with good accountancy
practice) for all contingent liabilities; and
3.1.3 provision reasonably regarded as adequate for all bad and doubtful
debts.
3.2 Valuation of Stock and Work-in-Progress
The stock and work-in-progress were included in the Audited Accounts at
figures not exceeding the amounts which could in the circumstances
existing at the Balance Sheet Date reasonably be expected to be realised
in the normal course of carrying on the businesses of the Group Companies
(net of selling and distribution costs).
3.3 Depreciation of Fixed Assets
In the Audited Accounts and in the accounts of each Group Company for the
three preceding financial years, the fixed assets of each Group Company
have been depreciated in accordance with the accounting policies set out
in the Audited Accounts.
3.4 Exceptional Items
The combined profits of the Group Companies for the 2 years ended on the
Balance Sheet Date as shown by the Audited Accounts and by the audited
accounts of the Group Companies for previous periods delivered to the
Purchaser and the trend of profits thereby shown have not (except as
fairly disclosed in such accounts) been affected by changes or
inconsistencies in accounting practices, by the inclusion of non-recurring
items of income or expenditure, by transactions of an abnormal or unusual
nature or entered into otherwise than on normal commercial terms or by any
other factors rendering such profits for all or any of such periods
exceptionally high or low.
31
3.5 Taxation
3.5.1 Full provision or reserve has been made in the Audited Accounts for
all Taxation liable to be assessed on each Group Company or for
which each is or may become accountable in respect of:
a. profits, gains or income (as computed for Taxation purposes)
arising or accruing or deemed to arise or accrue on or before
the Balance Sheet Date;
b. any Transactions effected or deemed to be effected on or before
the Balance Sheet Date or provided for in the Audited Accounts;
c. distributions made or deemed to be made on or before the Balance
Sheet Date or provided for in the Audited Accounts.
3.5.2 Proper provision or reserve for deferred taxation in accordance
with accounting principles and standards generally accepted at the
date of this Agreement in the United Kingdom has been made in the
Audited Accounts.
3.5.3 Except as disclosed by the Audited Accounts and save insofar as
appropriate provision or disclosure is made in them in a deferred
taxation account for Taxation in respect of any balancing charges
which would arise or accrue in respect of any such machinery and
plant on disposal thereof at the value at which the machinery and
plant are included in the Audited Accounts, the machinery and plant
is not included in the Audited Accounts at such value that if it
were obtained on the disposal or deemed disposal of the machinery
and plant as a whole a balancing charge would arise or accrue.
3.6 Debts
None of the debts receivable or due to any Group Company which are
included in the Audited Accounts or which have subsequently arisen has
been outstanding for more than three months from its due date for payment
or has been released on terms that the debtor has paid less than the full
value of his debt.
3.7 Accounting and other Records
The statutory books, books of account and other records of whatsoever kind
of each Group Company are up-to-date and maintained in accordance with all
applicable legal requirements on a proper and consistent basis and contain
complete and accurate records of all matters required to be dealt with in
such books and all such books and records and all other documents
(including documents of title and copies of all subsisting agreements to
which any Group Company is a party) which are the property of each Group
Company or ought to be in its possession are in its possession (or under
its control) and no notice or allegation that any is incorrect or should
be rectified has been received. All accounts, documents and returns
required by law to be delivered or made to the Registrar of Companies or
any other authority have been duly and correctly delivered or made.
3.8 Changes since Balance Sheet Date
Since the Balance Sheet Date as regards each Group Company:
32
3.8.1 there has been no material adverse change in its financial or
trading position or prospects or turnover and no event, fact or
matter has occurred or is likely to occur which will or is likely
to give rise to any such change;
3.8.2 its business has been carried on in the ordinary course, without
any interruption or alteration in its nature, scope or manner, and
so as to maintain the same as a going concern;
3.8.3 it has not entered into any transaction or assumed or incurred any
liabilities (including contingent liabilities) or made any payment
not provided for in the Audited Accounts otherwise than in the
ordinary course of carrying on its business;
3.8.4 its profits have not been affected by changes or inconsistencies in
accounting treatment, by any non-recurring items of income or
expenditure, by transactions of an abnormal or unusual nature or
entered into otherwise than on normal commercial terms or by any
other factors rendering such profits exceptionally high or low;
3.8.5 its business has not been materially and adversely affected by the
loss of any important customer or source of supply or by any
abnormal factor not affecting similar businesses to a like extent.
For these purposes, an important customer or source of supply in
respect of the Group means one which in either of the two financial
periods immediately preceding the Balance Sheet Date accounted for
5 per cent or more (in the case of a customer) of the turnover of
the Group or (in the case of a source of supply) of the goods,
services or equipment supplied to the Group;
3.8.6 there has been no unusual increase or decrease in the level of its
stock;
3.8.7 no dividend or other distribution has been declared, made or paid
to its members except as provided for in the relevant balance
sheet;
3.8.8 no share or loan capital or any other security giving rise to a
right over the capital has been allotted or issued or agreed to be
allotted or issued;
3.8.9 it has not redeemed or purchased or agreed to redeem or purchase
any of its share capital;
3.8.10 it has not made or received any surrender relating to group relief,
the benefit of advance corporation tax or any surrender of a tax
refund; and
3.8.11 no insurance claims have been refused or settled below the amount
claimed.
4. Legal Matters
4.1 Compliance with Laws
Each of the Group Companies has carried on and is carrying on its business
and operations so that there have been no material breaches of applicable
laws, regulations and bye-laws in each country in which they are carried
on and there have not been and are not any breaches by any Group Company
of its constitutional documents and there has not been and there is no
investigation or enquiry by, or order, decree, decision or judgment of,
any court, tribunal, arbitrator, governmental agency or regulatory body
outstanding or anticipated against any Group Company or any person for
whose acts or defaults they may be vicariously liable, nor are the Vendors
aware of any notice or other communication (official or otherwise) from
any court, tribunal, arbitrator, governmental agency or regulatory body
with respect to an alleged actual or potential violation and/or failure to
comply with any such applicable law, regulation, bye-law or constitutional
document, or requiring it/them to take or omit any action.
33
4.2 Licences and Consents
All licences, consents, authorisations, orders, warrants, confirmations,
permissions, certificates, approvals and authorities ("Licences")
necessary or desirable for the carrying on of the businesses and
operations of each of the Group Companies as now carried on, as previously
carried on and as proposed to be carried on have been obtained, are not
limited in duration, nor subject to onerous conditions, are in full force
and effect and have been and are being complied with. There is no
investigation, enquiry or proceeding outstanding or anticipated which is
likely to result in the suspension, cancellation, modification or
revocation of any of such Licences. Subject to the provisions and
limitations of Clause 5.5 of this Schedule (which shall prevail), none of
such Licences has been breached or is likely to be suspended, cancelled,
refused, modified or revoked (whether as a result of the entry into or
completion of this Agreement or otherwise).
4.3 Litigation
4.31. Since the Balance Sheet Date no claim for damages or otherwise has
been made against any Group Company.
4.3.2 No Group Company (or any person for whose acts or defaults a Group
Company may be vicariously liable) is involved whether as plaintiff
or defendant or other party in any claim, legal action, proceeding,
suit, litigation, prosecution, investigation, enquiry or
arbitration (other than as plaintiff in the collection of debts
arising in the ordinary course of its business [none of which
exceeds'L' ]) and no such claim, legal action, proceeding, suit,
litigation, prosecution, investigation, enquiry or arbitration is
pending or threatened by or against any Group Company (or any
person for whose acts or defaults a Group Company may be
vicariously liable).
4.3.3 To the best of the Vendors' knowledge, information, belief having
made due and careful enquiry of the Group Companies, there are no
investigations, disciplinary proceedings or other circumstances
likely to lead to any such claim or legal action, proceeding, suit,
litigation, prosecution, investigation, enquiry or arbitration.
4.4 Environmental, Health and Safety and Products Liability
4.4.1 For the purposes of this Warranty 4.4:
"Environment" means living organisms including the ecological
systems of which they form part and the following media (alone or
in combination): air (including 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 land under water); and in the case of man
includes his property;
"Environmental Laws" means all the laws of any relevant
jurisdiction (including, without limitation, the laws of the
European Community insofar as they apply to the United Kingdom)
which have as a purpose or effect the protection of, and/or
prevention of harm or damage to, the Environment and/or the
provision of remedies or compensation for harm or damage to the
Environment or which relate to health and safety matters
(including, without limitation, laws relating to workers and public
or consumer health and safety, hygiene, emissions, discharges or
threatened releases of Hazardous Substances into the Environment or
the production, processing, distribution, management, use,
treatment, storage, burial, disposal, transport or handling of any
Hazardous Substances) and all bye-laws, codes, regulations,
guidance notes, decrees, demands or demand letters, injunctions,
judgments, notices or notice demands, orders or plans issued,
promulgated or approved thereunder or in connection therewith; and
34
"Hazardous Substances" means wastes, pollutants, contaminants or
other substances (including without limitation liquids, solids,
gases, ions, living organisms, and noise) that may be harmful to
human health or other life or the Environment or a nuisance to any
person or that may make the use or ownership of any affected land
or property more costly.
4.4.2 Each Group Company has complied with Environmental Laws and has
obtained and complied with the terms of all permits, licences and
other authorisations required under such Environmental Laws.
35
4.4.3 The Vendors are not aware of any civil, criminal, regulatory or
administrative action, claim, investigation or other proceeding or
suit pending or threatened against any Group Company arising from
or relating to Hazardous Substances or Environmental Laws, nor have
the Vendors or any Group Company received written notice of any
complaint, claim, dispute, investigation or other action against
any Group Company arising from or relating to any such matters.
4.4.4 No Group Company has manufactured, sold or supplied products or
services which are, or were, or will or are likely to become, [in
any material respect], faulty, defective or contaminated, or which
do not comply [in any material respect] with any warranties or
representations expressly or impliedly made by any Group Company,
or with any Environmental Laws.
4.4.5 The Vendors are not aware of any circumstances which are sure as to
require expenditure (whether by any Group Company or by any other
person/authority) on cleaning up or decontamainating any sites
owned or occupied by any Group Company in order to prevent, reduce
or mitigate any of the risks referred to in paragraph 4.4 of this
warranty, including investigatory, monitoring, precautionary or
remedial engineering measures.
4.4.6 The Vendors are not aware of any circumstances which might give
rise to a claim against any Group Company in respect of expenditure
for cleaning up or decontaminating any sites formerly owned or
occupied by any Group Company during the period of 5 years prior to
completion.
4.4.7 No notice or other communication has been received from any
relevant authority relating to the physical condition of any site
now formerly owned or occupied by any Group Company nor are the
Vendors aware of any circumstances likely to give rise to the
service of such notice or communications.
4.4.8 No notice or other communication has been received from any
relevant authority as to a proposal for the inclusion of land owned
occupied formerly owned or occupied by any Group Company within any
register of contaminated or potentially contaminated sites and the
Vendors know of no intention on the part of any relevant authority
to give such notice or communication nor of any investigations by
any competent authority which might give rise to such an intention.
4.4.9 No site owned or occupied by any Group Company has been used for
the deposit of controlled waste during the ownership or occupation
of any Group Company and the Vendors are not aware of any such
prior use.
4.5 Insolvency etc.
4.5.1 No order has been made, petition presented, resolution passed or
meeting convened for the winding up (or other process whereby the
business is terminated and the assets of the company concerned are
distributed amongst the creditors and/or shareholders or other
contributories) of any Group Company and there are no cases or
proceedings under any applicable insolvency, reorganisation, or
similar laws in any jurisdiction concerning any Group Company and
no events have occurred which, under applicable laws, would justify
any such cases or proceedings.
4.5.2 No petition has been presented or other proceedings have been
commenced for an administration order to be made (or any other
order to be made by which during the period it is in force, the
affairs, business and assets of the company concerned are managed
by a person appointed for the purpose by a Court, governmental
agency or similar body) in relation to any Group Company, nor has
any such order been made.
4.5.3 No receiver (including an administrative receiver), liquidator,
trustee, administrator, custodian or similar official has been
appointed in any jurisdiction in respect of the whole or any part
of the
36
business or assets of any Group Company and no step has been
taken for or with a view to the appointment of such a person.
4.5.4 No Group Company is insolvent or unable to pay its debts as they
fall due.
5. Trading and Contractual Arrangements
5.1 Capital Commitments
There are no capital commitments entered into or proposed to be entered
into by any of the Group Companies.
5.2 Arrangements with Connected Persons etc.
5.2.1 There is no indebtedness (actual or contingent) nor any indemnity,
guarantee or security arrangement between any Group Company or
Vendor and any current or former employee, current or former
director or any current or former consultant of any Group Company
or any person connected with any of such persons.
5.2.2 No Group Company is or has been party to any contract, arrangement
or understanding with any current or former employee, current or
former director or any current or former consultant of any Group
Company or any person connected with any of such persons, or in
which any such person as aforesaid is interested (whether directly
or indirectly).
5.2.3 [With the exception of the contracts and arrangements details of
which are set out in the Disclosure Letter and which will be
terminated by mutual consent prior to Completion without any
liability for compensation or otherwise on the part of any Group
Company,] there are no existing contracts or arrangements between
or involving any Group Company and any of the Vendors and/or any
director of any Group Company and/or any person connected with any
of them.
5.3 Effect of Sale of the Shares
Neither of the Vendors nor (to the best of the Vendors' knowledge,
information and belief) has any Group Company received any notice of any
customer or supplier threatening to cease business with the Company.
37
5.4 Contracts
5.4.1 No Group Company is, or has been, party to any unusual, long-term
or onerous commitments, contracts or arrangements or any such not
wholly on an arm's length basis in the ordinary course of business.
For these purposes, a long-term contract, commitment or arrangement
is one which is unlikely to have been fully performed in accordance
with its terms more than six months after the date it was entered
into or undertaken or is incapable of termination by the relevant
Group Company on six months' notice or less.
5.4.2 None of the Group Companies:
a. is or has been party to any commitment, contract or
arrangement which is of a loss-making nature (that is, known
to be likely to result in a loss on completion of performance)
or which cannot readily be fulfilled or performed on time
without undue or unusual expenditure of money or effort;
b. is or has been party to any agency, distributorship,
marketing, purchasing, manufacturing or licensing agreement or
arrangement or any agreement or arrangement which restricts
its freedom to carry on its business in any part of the world
in such manner as it thinks fit; or
c. is, or has agreed to become, a member of any joint venture,
consortium, partnership or other unincorporated association.
5.5 Compliance with Agreements
So far as the Vendors are aware, the contracts and agreements listed below
are valid, binding and enforceable obligations of the parties thereto and
the terms thereof have been materially complied with by the Company and by
all the other parties thereto and there are no grounds for rescission,
avoidance or repudiation of any of the said contracts or agreements and no
notice of termination or of intention to terminate has been received in
respect of any thereof. The Contracts and agreements are:
i) the Wedgwood Agreement;
ii) the Royal Doulton Agreement;
iii) the Shop in Shop Concession Agreement with Xxxxx Xxxxxx & Co
Limited dated 26 November 1999; and
iv) the Concession Agreement with House of Fraser (Stores) Limited
dated 10 September 1999.
5.6 Anti-Trust
No Group Company is a party to any agreement, arrangement or concerted
practice or is carrying on any practice which in whole or in part
contravenes or is invalidated by any antitrust, fair trading, consumer
protection or similar legislation in the United Kingdom or in respect of
which any filing, registration or notification is required or is advisable
pursuant to such legislation (whether or not the same has in fact been
made).
5.7 Guarantees etc
Save as disclosed in the Audited Accounts or contained in the Disclosures
there is not outstanding any guarantee, indemnity, suretyship or comfort
(whether or not legally binding) given by or for the benefit of any Group
Company.
38
6. Employees etc
6.1 Employees and Terms of Employment
6.1.1 There are no employees employed in the Group Companies other than
those whose details are set out in the Disclosures.
6.1.2 There is not in existence any written contract of employment with
any director or employee of any Group Company, nor any consultancy
agreements with any Group Company, which cannot be terminated by
three months' notice or less without giving rise to any claim for
damages or compensation (other than a statutory redundancy payment
or statutory compensation for unfair dismissal).
6.1.3 The Disclosures contain full details, in relation to each Group
Company, of:
a. the total number of employees (including those who are on
maternity or paternity leave or absent on the grounds of
disability or other long-term leave of absence, and have or
may have a statutory or contractual right to return to work in
a Group Company);
b. the name, date of commencement of employment, period of
continuous employment, location, salary and other benefits,
grade and age of each employee;
c. where any employee is continuously absent from work for a
period in excess of one month during the last 12 months, the
reason for the absence;
d. the terms of the contract of employment of each employee
entitled to salary at a rate, or an average annual rate over
the last three financial years, in excess of'L'20,000 a year.
6.1.4 There are no proposals to terminate the employment or consultancy
of any employees or consultants of any Group Company or to vary or
amend their terms of employment or consultancy (whether to their
detriment or benefit).
6.1.5 There are no terms of employment for employees at any Group Company
or consultancy agreements with any Group Company or terms of
appointment for directors of any Group Company which provide that a
change in control of any Group Company (however change in control
may be defined in the said document, if at all) shall entitle the
said employee, consultant or director to treat the change in
control as amounting to a breach of the contract or entitling him
to any payment or benefit whatsoever or entitling him to treat
himself as redundant or dismissed or released from any obligation.
6.1.6 No Group Company is party to any consultancy agreement.
6.2 Payments on Termination
Except as disclosed in the Audited Accounts and the Disclosures and during
the 3 years preceding the date of this Agreement:
39
6.2.1 As far as the Vendors are aware (having made due and careful
enquiry) no liability has been incurred by any Group Company for
breach of any contract of employment or consultancy with any
employee or consultant including, without limitation, redundancy
payments, protective awards, compensation for wrongful dismissal or
unfair dismissal or for failure to comply with any order for the
reinstatement or re-engagement of any employee except where payment
has been made in lieu of notice and the relevant employee's
contract did not provide for this; and
6.2.2 no Group Company has made or agreed to make any payment or provided
or agreed to provide any benefit to any employee or former employee
of any Group Company or any dependant of any such employee or
former employee in connection with the proposed termination or
suspension of employment or variation of any contract of employment
of any such employee or former employee.
6.3 Trade Disputes
No Group Company is involved in, and there are no circumstances likely to
give rise to, any industrial or trade dispute or any dispute or
negotiation regarding a claim of material importance with any trade union
or other body (in either case whether or not recognised by any of the
Group Companies for collective bargaining or other negotiating purposes)
representing any of the employees.
6.4 Incentive Schemes
There is not in existence nor is it proposed to introduce any share
incentive, share option, profit sharing, bonus or other incentive
arrangements for or affecting any employees or former employees.
6.5 Pensions
6.5.1 In this paragraph 6.5:-
Vendor's Pension Scheme means each of:
(i) Viners of Sheffield Plc Executive Plan
(ii) Viners of Sheffiled Plc Group Life Assurance Scheme; and
(iii) Viners of Sheffield Ltd Retirement Benefits Scheme
ICTA means Income and Corporation Taxes Xxx 0000.
Relevant Benefits as defined in section 612 of ICTA but with the
omission of the exception in that definition.
Relevant Person means each past and present employee, officer
and director of a Group Company and their
respective spouses and dependants.
6.5.2 Except under the Vendor's Pension Scheme, no agreement, arrangement
or understanding (whether contractual, under trust or otherwise)
exists for the provision of Relevant Benefits for any Relevant
Person in connection with which any Group Company is or may become
legally or morally liable to make any payment and no Group Company
is liable to make contributions to a personal pension scheme in
respect of any Relevant Person.
6.5.3 The Disclosure Letter contains or has annexed to it:-
6.5.3.1 true and complete copies of all the trust deeds, deeds of
participation, rules and other documents containing the
provisions which govern the Vendor's Pension Scheme and of
all booklets and announcements issued to any Relevant
Person about Relevant Benefits or the Vendor's Pension
Scheme;
40
6.5.3.2 a list of the active members of the Vendor's Pension
Scheme with accurate and complete details of age, sex,
salary and employer's and member's contributions and
details of any custom which is not apparent from the
documents concerning the Vendor's Pension Scheme;
6.5.3.3 a copy of any document (in addition to those mentioned in
paragraph 21.5.3.1) in which a Group Company has given any
indemnity or made any agreement or arrangement about any
Relevant Benefits, an occupational pension scheme or a
personal pension scheme.
6.5.4 The documents disclosed to the Purchaser correctly describe the
benefits payable under the Vendor's Pension Scheme and the terms of
membership of it and no undertaking or announcement (whether or not
legally binding) has been given to any Relevant Person about the
continuance, introduction or improvement of any Relevant Benefits
or a change in the terms of membership of the Vendor's Pension
Scheme.
6.5.5 No indemnity, undertaking or guarantee has been given by a Group
Company in connection with any Relevant Benefits, any occupational
pension scheme or any personal pension scheme.
6.5.6 The Vendor's Pension Scheme is an exempt approved scheme and is a
contracted-in scheme in relation to the employees of each Group
Company and nothing has been done or omitted which may result in
the Vendor's Pension Scheme ceasing to have exempt approved status
and it is not a contracted-out scheme.
6.5.7 The Vendor's Pension Scheme has at all times been operated in
accordance with the provisions governing it and with all applicable
laws and fiscal and regulatory requirements and there is not, and
has never been, any unequal treatment in relation to the terms on
which men and women may become members of the Vendor's Pension
Scheme and the terms on which they are treated, and the benefits
payable to them, as members.
6.5.8 All amounts due to the Vendor's Pension Scheme by or in respect of
Relevant Persons have been paid (and were properly calculated) in
accordance with the schedule of contributions for, and the rules
of, the Vendor's Pension Scheme and the law and no transfer
payments to the Vendor's Pension Scheme are outstanding.
6.5.9 There are no claims pending or threatened to the Pensions Ombudsman
or a court against a Group Company or the trustees of the Vendor's
Pension Scheme in resepct of the Vendor's Pension Scheme and no
report has been made to, or investigation conducted by, the
Occupational Pensions Regulatory Authority about a Group Company or
the Vendor's Pension Scheme.
6.5.10 The Vendor's Pension Scheme provides only money purchase benefits
and death benefits which are fully insured at normal rates and all
premiums have been paid by their due dates.
6.6 Share Schemes etc.
41
6.6.1 No Group Company is a participating company in any scheme approved
under Section 185 or 186 and Schedule 9 of the Income and
Corporation Taxes Act 1988 ("ICTA 1988"), nor has any Group Company
established or contributed to a qualifying employee share ownership
trust as defined in Schedule 5 Finance Xxx 0000.
6.6.2 No Group Company has in issue any shares as defined in Section 87
Finance Act 1988 which fall within Chapter 11 Part III Finance Xxx
0000.
6.6.3 No Group Company operates any scheme approved under Section 202
ICTA 1988 or Chapter I I I Part V ICTA 1988.
7. Taxation Matters
7.1 General
7.1.1 The transactions contemplated by this Agreement are carried out by
the Vendors for bona fide commercial reasons and such transactions
do not have as their main object, or one of their main objects, the
obtaining of a taxation advantage.
7.1.2 As far as the Vendors are aware no Group Company has carried out or
been engaged in any transaction or arrangement such that the law
provides that there may be substituted for the amount or value or
the actual consideration given or received (or to be given or
received) by any Group Company any different amount or value for
taxation purposes.
7.1.3 There is set out in the Disclosure Letter with express reference to
this warranty full details of all clearances obtained by or
relating to any Group Company within the last six years pursuant to
any statutory provision, statement of practice relating to taxation
or any press release issued by any taxation authority.
7.1.4 So far as the Vendors are aware no Group Company is liable as agent
or prescribed person for any taxation liability of another person.
7.1.5 No taxation authority has agreed to operate any special arrangement
(being an arrangement which is not based on a strict and detailed
application of the relevant legislation, statements of practice or
extra-statutory concessions published in Inland Revenue guides) in
relation to the affairs of any Group Company.
7.2 Returns, Information and Clearances
7.2.1 (i) All returns, computations, notices and information which are or
have been required to be made or given by each Group Company for
any Taxation purpose or have been made or given within the
requisite periods and on a proper basis and are up-to-date and
correct.
7.2.2 Each Group Company is in possession of sufficient information [or
has reasonable access to such information] to enable it to compute
its liability to Taxation insofar as it depends on any Transaction
occurring on or before Completion.
7.3 Taxation Claims, Liabilities and Reliefs
7.3.1 There are set out in the Disclosure Bundle, with express reference
to this paragraph, details of all matters relating to Taxation in
respect of which each Group Company (either alone or jointly with
any other person) has, or at Completion will have, an outstanding
entitlement to make: any claim (including a supplementary claim)
for relief; any election, including an election for one type of
42
relief, or one basis, system or method of Taxation, as opposed to
another; any appeal or further appeal against an assessment to
Taxation; any application for the postponement of, or payment by
instalments of, Taxation; or to disclaim or require the
postponement of any allowance or relief. Such details are
sufficient to enable the Purchaser to procure that any time limit
to such entitlement expiring within six months after Completion can
be met.
7.3.2 There are no arrangements entered into between any Group Company
and the Inland Revenue pursuant to Section 36 Finance Xxx 0000.
7.3.3 There are set out in the Disclosure Letter, with express reference
to this paragraph, full particulars relating to each Group Company
which is or may be required to pay corporation tax by instalments
by virtue of The Corporation Tax (Instalment Payments) Large
Companies) Regulations 1998 (the "Regulations") including:
a. the name of the Group Company;
b. the total liability (as defined in Paragraph 2(3) of the
Regulations) for the accounting period in which Completion
takes place and the previous accounting period if an
instalment for that accounting period is due;
c. the application of Paragraph 4 of the Regulations (instalment
payments - transitional provisions)
d. the dates instalment payments are due; and
e. the amount of any instalment which will fall due for payment
within three months after Completion.
Nothing has been done which may cause Paragraph 13 of the
Regulations to apply in relation to a Group Company.
7.3.4 No Group Company has taken any action which has had, or will have,
the result of altering, prejudicing or in any way disturbing any
arrangement or agreement which it has previously had with the
Inland Revenue or HM Customs and Excise or other Taxation
Authorities.
43
7.4 Close Companies
7.4.1 The Company is a close company.
7.4.2 No Group Company is or has ever been a close investment holding
company within the meaning of section 13A ICTA 1988 (close
investment holding companies).
7.4.3 No Group Company is, or has ever been, liable to taxation under the
provisions of sections 418 to 422 ICTA 1988 (close companies).
7.4.4 No Group Company has ever made any transfer of the kind described
in section 125 Taxation of Chargeable Gains Xxx 0000 (shares in
close company: transferring of assets at an undervalue).
7.4.5 No Group Company has ever made any transfer of value within the
meaning of the Inheritance Tax Xxx 0000.
7.4.6 Neither the assets owned by nor the shares of any Group Company are
subject to an outstanding Inland Revenue charge as defined in
section 237 Inheritance Tax Act 1984 (imposition of charge).
7.4.7 No circumstances exist, or but for section 204(6) Inheritance Tax
Act 1984 (contingent liability of transferee for unpaid capital
transfer tax or inheritance tax) would exist, such that a power of
sale could be exercised in relation to any assets or shares of any
Group Company pursuant to section 212 Inheritance Tax Act 1984
(powers to raise tax).
7.5 Company Residence
Apart from Viners Hong Kong Limited which is tax resident in Hong Kong
each Group Company has been resident for tax purposes in the United
Kingdom and nowhere else at all times since its incorporation and will be
so resident at Completion.
7.6 Acquisitions from Members of the Same Group
The entry into or Completion of this Agreement will not result in any
profit or gain being deemed to accrue to any Group Company for Taxation
purposes, whether pursuant to Section 179 of the Taxation of Chargeable
Gains Xxx 0000 ("TCGA") or otherwise.
7.7 Replacement of Business Assets
No claim has been made under Section 152, 153, 154 or 175 TCGA or any
other section which would affect the amount of any gain accruing or being
treated as accruing on a disposal of an asset of any Group Company.
7.8 Base Values and Costs of Acquisition
If each of the assets (other than trading stock) or the plant and
machinery taken as a whole of each Group Company was disposed of for a
consideration equal to the book value of that asset or, as appropriate,
plant and machinery in, or adopted for the purpose of, the Audited
Accounts, no liability to corporation tax on chargeable gains or balancing
charge under the Capital Xxxxxxxxxx Xxx 0000 not fully provided for in the
Audited Accounts would arise; and, for the purpose of determining
corporation tax on chargeable gains, there shall be disregarded any relief
and allowances available to the Group Company concerned other than amounts
falling to be deducted under Section 38 of TCGA.
7.9 Rebasing
No Group Company has made a disposal to which Section 35 of TCGA applies.
7.10 PAYE and National Insurance
Each Group Company has properly operated the PAYE and National Insurance
contributions systems by making such deductions as are required by law
from all payments made or deemed to be or treated as made
44
by it or on its behalf, and by duly accounting to the Inland Revenue and
the Department of Social Security for all sums so deducted and for all
other amounts for which it is required to account under the PAYE and
National Insurance contributions systems.
7.11 Depreciatory Transactions and Value Shifting
No asset owned by any Group Company has at any time since its acquisition
by that or any other Group Company or any company which has at any time
been a member of a group (as defined from time to time for any Taxation
purpose) of which the Group Company has at any time been a member been
subjected to a reduction in value such that any allowable loss arising on
its disposal is likely to be reduced or eliminated or any chargeable gain
arising on its disposal is likely to be increased.
7.12 Value Added Tax ("VAT")
7.12.1 Each Group Company has complied fully with all statutory
requirements, orders, provisions, directions or conditions relating
to VAT, including (for the avoidance of doubt) the terms of any
agreement reached with the Commissioners of HM Customs & Excise.
7.12.2 There are set out in the Disclosure Letters, with express reference
to this paragraph, full particulars of each item which a Group
Company uses in the course or furtherance of its business and for
the purposes of that business, otherwise than solely for the
purpose of selling the item, being items to which Part XV of the
Value Added Tax (General) Regulations 1995 applies and in respect
of which the period of adjustment will not have expired by
Completion. Such particulars are sufficient to enable the Group
Companies (or any group of which they will form part for the
purposes of Section 43 of the Value Added Tax Xxx 0000 following
Completion) to comply with their obligations under the said Part
XV.
7.12.3 There are set out in the Disclosure Letter, with express reference
to this paragraph, full particulars of:
a. any land in which a Group Company has an interest and in
relation to which an election has been made to waive exemption
from VAT pursuant to the provisions of Schedule 10 of VATA;
and
b. any buildings or civil engineering works owned by any Group
Company and completed for the purposes of Group 1, Schedule 9
VATA within the last three years.
7.12.4 Each Group Company has not at any time been a member of a Group
Registration made pursuant to Section 43 of VATA (other than a
group registration all of the other members of which were Group
Companies).
7.13 Group Income
There are set out in the Disclosure Letter, with express reference to this
paragraph, details of any group income elections made under Section 247
ICTA to which a Group Company is a party which are in force.
7.14 Finance Leases
No Group Company is or has been the lessor or the lessee under any finance
lease of an asset. For the purposes of this paragraph "finance lease"
means any arrangements for the lease of an asset which fall for the
purposes of the accounts of a Group Company to be treated in accordance
with normal accountancy practice as a finance lease or loan.
45
7.15 Loan Relationships
7.15.1 No Group Company is a party to any loan relationship (as defined in
Chapter II of Part IV Finance Act 1996):
7.15.1.1 which by virtue of its terms may give rise to any debits
or credits for the purposes thereof (other than in
relation to interest, charges or expenses);
7.15.1.2 to which section 92 Finance Xxx 0000 (convertible
securities etc.) or section 93 Finance Xxx 0000
(relationships linked to the value of chargeable assets)
or section 97 Finance Xxx 0000 (manufactured dividends)
applies; or
7.15.1.3 to which any of paragraphs 10, 11, 13 or 15 of Schedule 9
Finance Xxx 0000 (special computational provisions)
apply.
7.15.2 No Group Company has loan relationships where:
7.15.2.1 there is a connection between the parties as defined by
section 87 Finance Act 1996 (accounting method where
parties have a connection); or
7.15.2.2 there has been or will be a release of the amounts
payable under the relationship.
7.15.3 No Group Company is or has been a party to any loan relationships
in respect of which after the Accounts Date any credit is or will
be required to be brought into account under the provisions of
Schedule 15 Finance Xxx 0000.
7.15.4 The Accounts account for all of each Group Company's loan
relationships in accordance with an authorised accruals basis of
accounting complying with section 85 Finance Act 1996 (authorised
accounting methods) and there has been no change in such accounting
method in respect of any loan relationship since the Balance Sheet
Date.
7.16 Stamp Duties
7.16.1 There is no instrument which is necessary to establish the
Company's title to any right or asset which is liable to stamp duty
(or any like duty or tax in a jurisdiction outside the United
Kingdom) which has not been duly stamped or which would attract
stamp duty if brought within the relevant jurisdiction.
7.16.2 The Company has complied in all respects with the provisions of
Part IV Finance Xxx 0000 (stamp duty reserve tax) and with any
regulations made under the same and the Company is not and will not
become liable to pay stamp duty reserve tax by reference to any
agreement which falls within the terms of section 87(1) of that Act
and is entered into after the Accounts Date.
8. Assets (other than the Properties)
8.1 Ownership of the Group Companies
The Company, or (where specified) a Group Company, is the sole beneficial
owner of all the issued or allotted shares of the Subsidiaries listed in
Part 4 of Schedule 1 free from all Encumbrances and all such shares are
fully paid or credited as fully paid.
8.2 Subsidiaries, Associates and Branches
No Group Company:
46
8.2.1 is the holder or beneficial owner of, or has agreed to acquire, any
share or loan capital of any other company (whether incorporated in
the United Kingdom or elsewhere) other than the Subsidiaries set
out in Part 4 of Schedule 1;
8.2.2 has any branch, division, establishment or operations outside the
jurisdiction in which it is incorporated; or
8.2.3 has or has had any associate (that is to say, an entity which falls
to be treated as such for the purposes of FRS 9).
8.3 Title to Assets
All assets (other than the Properties) of each Group Company including all
debts due to each Group Company which are included in the Audited Accounts
or have otherwise been represented as being the property of or due to such
Group Company or at the Balance Sheet Date used or held for the purposes
of its business were at the Balance Sheet Date the absolute property of
such Group Company and (save for those subsequently disposed of or
realised in the ordinary course of trading) all such assets and all assets
and debts which have subsequently been acquired or arisen are the absolute
property of such Group Company and none is the subject of any assignment
or Encumbrance (excepting only liens arising by operation of law in the
normal course of trading) or the subject of any factoring arrangement,
hire purchase, conditional sale or credit sale agreement.
8.4 Sufficiency of Assets
The property, rights and assets owned or leased by each Group Company
comprise all the property, rights and assets necessary or convenient for
the carrying on of the business of each Group Company fully and
effectively in and to the extent to which it is presently conducted and
the Disclosures contain details of any other facilities and services
necessary or convenient for this purpose.
8.5 Insurance
8.5.1 Full particulars of the insurances of the Group Companies are
contained in the Disclosures.
8.5.2 All the assets of each of the Group Companies which are capable of
being insured have at all material times been and are at the date
of this Agreement insured to the full replacement value thereof
against fire and other risks normally insured against by companies
carrying on the same classes of business or owning assets of a
similar nature and each Group Company has at all material times
been and is at the date of this Agreement adequately covered
against accident, physical loss or damage, confiscation or
expropriation of any such assets by any foreign government, third
party liability (including product liability), environmental
liability (to the extent that insurance is reasonably available),
and other risks normally covered by insurance by such companies.
In respect of all such insurances:
47
(a.) all premiums have been duly paid to date;
(b.) all the policies are in full force and effect and no act,
omission, misrepresentation or non-disclosure by or on behalf
of any Group Company has occurred which makes any of these
policies voidable, nor have any circumstances arisen which
would render any of these policies void or unenforceable for
illegality or otherwise, nor has there been any breach of the
terms, conditions and warranties of any of the policies that
would entitle insurers to decline to pay all or any part of
any claim made under the policies;
(c.) there are no special or unusual limits, terms, exclusions or
restrictions in any of the policies and the premiums payable
are not in excess of the normal rates and no circumstances
exist which are likely to give rise to any increase in
premiums;
(d.) details of all claims made during the period of three years
preceding the date of this Agreement are contained in the
Disclosure Letter;
(e.) no claim is outstanding and no circumstances exist which are
likely to give rise to any claim; and
(f.) full details are contained in the Disclosure Letter.
8.6 Plant and Machinery etc.
To best of the Vendors' knowledge, information and belief the plant,
machinery, vehicles and all other equipment owned or used in connection
with the business of each Group Company is in satisfactory working order
and has been regularly and properly maintained and is not dangerous,
obsolete, inefficient or surplus to requirements.
8.7 Absence of Undisclosed Liabilities
There are no material liabilities of the Group Companies other than (i)
liabilities disclosed or provided for in the Audited Accounts; (ii)
liabilities incurred in the ordinary course of business since the Balance
Sheet Date, none of which results in a material adverse change in the
financial or trading position or prospects or turnover of the Group
Companies; or (iii) liabilities disclosed elsewhere in this Agreement.
9. Intellectual Property and Information Technology
9.1 Definitions
For the purposes of this Warranty 9:
9.1.1 "Business IP" means all rights and interest held by the Group
Companies (whether as owner, licensee or otherwise) in Intellectual
Property which at or before Completion is used or is capable of
being used in or in connection with the business of the Group
Companies;
9.1.2 "Know-how" means confidential [and proprietary] industrial and
commercial information and techniques in any form (including paper,
electronically stored data, magnetic media, film and microfilm)
including without limitation drawings, formulae, test results,
reports, project reports and testing procedures, instruction and
training manuals, tables of operating conditions, market forecasts,
lists and particulars of customers and suppliers; and
9.2 Ownership etc.
All Intellectual Property (whether registered or not) including all
pending applications therefor and all Information Technology which has
been, is, or is capable of being used in or in relation to or which are
necessary for the business of each Group Company is (or, where appropriate
in the case of pending applications, will be):
48
9.2.1 legally and beneficially owned by a Group Company or lawfully used
with the consent of the owner under a licence and copies of each
such licence are included in the Disclosure Bundle;
9.2.2 valid and enforceable;
9.2.3 not being infringed or attacked or opposed or misused by any person
and has not, at any time in the past six years been infringed or
misused;
9.2.4 not subject to any Encumbrance or any licence, sub-licence,
assignment or authority in favour of another Group Company) or any
limitation or right of termination (including without limitation,
on any change in the underlying ownership of control of any Group
Company) or any restriction and no Group Company is obliged to
grant any Encumbrance, licence, sub-licence, assignment or
authority in favour of another (except another Group Company); and
9.2.5 as far as the Vendors are aware in the case of rights in such
Intellectual Property as are registered or the subject of
applications for registration each of which is listed and disclosed
in the Disclosure Bundle, and all renewal fees which are due and
steps which are required for their maintenance and protection have
been paid and taken;
and no claims have been made and no applications are pending other than
those applications as listed in the Disclosure Bundle which if pursued or
granted might be material to the truth and accuracy of any of the above.
9.3 Processes etc.
No claims for infringement in respect of the processes employed and the
products and services dealt in and the business conducted by each Group
Company both now and at any time within the last six years have been made
or threatened.
9.4 Licences
The several licences and agreements (including all amendments, novations,
supplements or replacements to those licences and agreements), true copies
of which are attached to the Disclosure Bundle, are in full force and
effect, no notice having been given on either side to terminate them; the
obligations of all parties have been fully complied with; and no disputes
have arisen in respect thereof; and so far as the Vendors are aware where
such licences are of such a nature that they could be registered with the
appropriate authorities and where such registration would have the effect
of strengthening the Group Company's rights they have been so registered.
9.5 Know-how
There has been and is no misuse of Know-how by any Group Company and
neither the Vendors nor any Group Company has made any disclosure of
Know-how to any person other than the Purchaser or another Group Company
except properly and in the ordinary course of business and on the basis
that such disclosure is to be treated as being of a confidential character
and neither the Vendors nor any Group Company is obliged to disclose the
same to any person other than another Group Company.
9.6 No assertion of moral rights
No moral rights have been asserted or are likely to be asserted which
would affect the use of any of the Intellectual Property in the business
of any Group Company.
9.7 Patents
No Group Company owns or claims any patentable invention and no employee
or outside consultant has made any claim against any Group Company for
compensation or ownership in respect of any Intellectual Property, or
threatened any such claim.
49
9.8 Sufficiency of Business IP
The Business IP comprises all the rights and interests in Intellectual
Property necessary or convenient for the carrying on of the business of
each Group Company in and to the extent which it is presently conducted.
9.9 Information Technology
9.9.1 So far as the Vendors are aware, there are not and, in the two
years prior to the date of this Agreement, there have been no bugs
or viruses, logic bombs or other contaminants (including without
limitation, "worms" or "trojan horses") in or failures or
breakdowns of any computer hardware or software or any other
Information Technology equipment used in connection with the
business of any Group Company which have caused any material
disruption or interruption in or to the business of any Group
Company and all Information Technology is in substantially good
working order and functions substantially in accordance with all
specifications set down or agreed in relation thereto.
9.9.2 In the event that the persons providing maintenance or support
services for the Information Technology cease or are unable to do
so, the Group Companies have all the necessary rights and
information, to continue to maintain and support or have a third
party maintain or support the Information Technology.
9.9.3 Each Group Company has in place procedures to prevent unauthorised
access, the introduction of viruses, taking and storing on-site and
off-site back-up copies of the software and data.
9.9.4 The Information Technology and each component of it has the ability
to accurately recognise, manage, accommodate and manipulate
monetary figures expressed in euros (the currency introduced on 1
January 1999 pursuant to the treaty establishing the European
Community), and can and shall have the ability accurately to
convert data for this purpose and shall comply with the rules on
conversion and rounding set out in EC Regulation number 1103/97 or
any legislation adopting or incorporating that Regulation.
9.9.5 Each Group Company is in possession of current ISO9000, ISO9001 and
ISO9002 certifications which are in full force and effect and
neither any Group Company nor the Vendors are aware of any facts or
circumstances which may lead to the cancellation or withdrawal of
such certifications.
9.10 None of the records, systems, information or Know-How of any Group Company
is recorded, stored, operated or otherwise wholly or partly dependent on
or held by any means which is not under the exclusive ownership and direct
control of a Group Company.
9.11 All software used by a Group Company and not the subject of a written
licence from a third party was either (a) written or created by employees
of a Group Company in the ordinary course of their duties or (b) where
written for a Group Company by a third party, has been validly and
effectively assigned to a Group Company.
9.12 All Information Technology used in connection with the business of any
Group Company has been and is being properly and regularly maintained and
all data processed using such Information Technology has been regularly
archived in hard copy form and such hard copies have been properly stored
and catalogued.
9.13 The present capacity of the Information Technology used in connection with
the business of any Group Company is substantially sufficient in order to
satisfy the requirements of such businesses for the next three years.
50
10. Freehold and Leasehold Property
10.1 The Property
10.1.1 The Company occupies the Property on an informal basis as set out
in the Disclosure Letter.
10.1.2 Save as set out in the Disclosures, the Property comprises all of
the premises and land owned, occupied or otherwise used in
connection with the businesses of the Group Companies or in which
the Group Companies have an interest.
10.1.3 No Group Company has any continuing liability in respect of any
leasehold property other than the Property.
10.2
a. The Property enjoys access to and egress from roads which
prior to the date of this Agreement have been adopted by the
appropriate highway authority and are maintainable at the
public expense either directly or the Property has the benefit
of all necessary easements or rights over private land on
terms which do not entitle any person to terminate or curtail
the same.
b. The Property drains into a public sewer and is served by
water, electricity and gas utilities. Either the pipes,
sewers, wires, cables, conduits and other conducting media
serving the Property connect directly to the mains without
passing through land in the occupation or ownership of a third
party or, if they do not, the facilities, easements or rights
necessary for the enjoyment and present use of the Property
are enjoyed on terms which do not entitle any person to
terminate or curtail the same.
c. All rights of light, air and support are enjoyed fully as of
right.
10.3 There are no outstanding actions, disputes, claims or demands between the
Group Company and any third party affecting the Property or any
neighbouring property.
10.4 Town and Country Planning
In relation to each Property and to the best of the Vendors' knowledge,
information and belief:
51
10.4.1 No development at the Property or use of the Property has been
undertaken in breach of the Town and Country Planning legislation
or any other Acts of Parliament or any regulations, bye-laws,
orders, consents or permissions made or given thereunder.
10.4.2 The planning consents and permissions affecting the Property are
either unconditional or are subject only to conditions which are
neither unusual, personal nor temporary and which have been
satisfied or fully observed and performed up to the date of this
Agreement.
10.4.3 There is no agreement affecting the Property made pursuant to
Section 106 of the Town and Country Planning Xxx 0000 or Section 33
of the Local Government (Miscellaneous Provisions) Xxx 0000 or
similar legislation.
10.4.4 There is no pending planning application, planning appeal or other
planning proceedings in respect of the Property or which is likely
to have an adverse effect on the Property.
10.4.5 There is no outstanding statutory or informal notice relating to
the Property or any business carried on thereat or the use thereof.
10.4.6 There is no outstanding monetary claim or liability, in respect of
the Property.
10.4.7
a. None of the buildings, structures or erections on the Property
has been listed under Sections 1 and 2 of the Planning (Listed
Buildings and Conservation Areas) Xxx 0000 (the "Listed
Buildings Act").
b. The local authority has not authorised the service of any
building preservation notice under Section 3 or 4 of the
Listed Buildings Act or any repairs notice under Section 48 of
the Listed Buildings Act in respect of the Property or any
building, structure or erection thereon.
10.5 State and Condition of the Property
In relation to each Property:
10.5.1 A Fire Certificate has been issued in respect of the Property and
there has been no breach of the provisions or conditions contained
therein.
10.5.2 The buildings and other structures on the Property are in good and
substantial repair and fit for the purposes for which they are
presently used.
10.5.3 None of the following has during the occupation of the Company
affected the Property:
a. structural or other defects in the Property or the building of
which the Property is part or in any drains, pipes, wires or
services;
b. flooding;
c. mining activity;
d. subsidence; and
e. rising damp, wet or dry rot or any infestation.
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Schedule 4
Limitation of Liability under Clause 7.3
1. Limitation of Liability
Notwithstanding the provisions of Clauses 7.1 and 7.2, the Vendors shall
not be liable for breach of Warranty (and, in relation to Clauses 1.2, 1.3
and 1.4 of this Schedule 4, for breaches under the Tax Deed):
1.1 Time Limits
in respect of any claim unless notice of such claim is given in writing by
the Purchaser to either Vendor setting out such details as are available
of the specific matter in respect of which the claim is made including an
estimate of the amount of such claim, if practicable, on the earlier of a
period within 28 days following signature by the auditors of the Group
Companies of their audited accounts for the financial period ended 30th
April 2002 and 31 July 2002 except that the limit should be seven years
from Completion in relation to a claim under Warranty - (tax warranties)
of Schedule 3;
1.2 Minimum Claims
in respect of any claim arising from any single circumstance if the amount
of the claim does not exceed 'L'25,000 (save that claims relating to a
series of connected matters shall be aggregated for this purpose) but the
Vendors shall not be liable for a claim in excess of that amount unless
the liability determined in respect of any such claim (excluding interest,
costs and expenses) also exceeds that amount;
1.3 Aggregate Minimum Claims
in respect of any claim unless the aggregate amount of all claims for
which the Vendors would otherwise be liable for breach of Warranty and for
claims under the Tax Deed exceeds 'L'250,000 but if the aggregate
liability in respect of all such claims exceeds that figure then all
claims, including claims previously notified, shall accrue against and be
recoverable from the Vendors;
1.4 Maximum Claims
in respect of any claim to the extent that the aggregate amount of the
liability of the Vendors for all claims made for breach of Warranty and
for claims under the Tax Deed exceed 100 per cent of the purchase
consideration under Clause 3 plus 'L'350,000;
1.5 Set off Against Restrictive Covenant Payments
in respect of any claim to the extent that the amount of such claim may be
set-off against amounts payable to the Vendors under Clause 9.1;
1.6 Contingent Liabilities
in respect of any liability which is contingent unless and until such
contingent liability becomes an actual liability and is due and payable
but this sub-paragraph shall not operate to avoid a claim made in respect
of a contingent liability within the time limit and containing such
details as are specified in paragraph 1.1 above;
1.7 Provisions in the Accounts
in respect of any claim if and to the extent that:
53
1.7.1 proper provision or reserve is made for the matter giving rise to
the claim in the Audited Accounts (and not subsequently released)
or in calculating the Net Asset Value; or
1.7.2 any sum is received by any Group Company which has previously been
written off as irrecoverable in the accounts of the Group Company;
1.8 Voluntary Acts, etc.
in respect of any matter, act, omission or circumstance (or any
combination thereof) (including, for the avoidance of doubt, the
aggravation of a matter or circumstance) to the extent that the same would
not have occurred but for:
1.8.1 Voluntary Acts of Purchaser: any voluntary act, omission or
transaction of the Purchaser or any member of the Purchaser's Group
or any of the Group Companies, or their respective directors,
employees or agents or successors in title, after Completion done
or omitted otherwise than in the ordinary course of business of the
relevant company and in the knowledge that such act, omission or
transaction might give rise to, or increase the extent of, a claim
under this Agreement or the Tax Deed of Covenant or otherwise than
in the ordinary course of business or pursuant to a legally binding
commitment vested on or before Completion and such claim could have
been reasonably foreseeable as a result of such act, omission or
transaction;
1.8.2 Changes in Legislation: the passing of, or any change in, after the
date of this Agreement, any law, rule, regulation or administrative
practice of any government, governmental department, agency or
regulatory body including (without prejudice to the generality of
the foregoing) any increase in the rates of Taxation or any
imposition of Taxation or any withdrawal of relief from Taxation
not actually (or prospectively) in effect at the date of this
Agreement; and
1.8.3 Accounting and Taxation Changes: any change in accounting or
Taxation policy, bases or practice of the Purchaser or any of the
Group Companies introduced or having effect after Completion or any
change in the accounting reference date of the Company made at or
after Completion;
1.8.4 Any act or omission stipulated in this Agreement to be carried out
or omitted.
1.9 Insurance
in respect of any claim to the extent that any Losses arising from such
claim are covered by a policy of insurance in force on the date of this
Agreement and payment is made by the insurer;
1.10 Purchaser's Knowledge
in respect of any claim to the extent that the Purchaser had actual
knowledge of the relevant facts, matters or circumstances, giving rise to
the claim prior to the execution of this Agreement or to the extent that
the matter or matters which would otherwise give rise to a claim are
fairly set out in the Disclosures
PROVIDED THAT nothing this Clause 1.10 shall serve to prejudice the
Purchaser's common law rights.
2. Conduct of Claims
2.1 Notification
If the Purchaser or any Group Company becomes aware of any matter that may
give rise to a claim against the Vendors under this Agreement notice of
that fact shall be given as soon as possible to the Vendors but any
failure to give such notice shall not affect the rights of the Purchaser
except to the extent that the Vendors are prejudiced by such failure.
However subject to Clause 1.6 such failure shall not in any way extend the
time limitations set out in clause 1.1 of this Schedule.
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2.2 Investigation by the Vendors
Without prejudice to the validity of the claim or alleged claim in
question, the Purchaser shall allow, and shall procure that the relevant
Group Companies allow, the Vendors and their accountants and professional
advisers to investigate the matter or circumstance alleged to give rise to
such claim and whether and to what extent any amount is payable in respect
of such claim and for such purpose the Purchaser shall give, and shall
procure that the relevant Group Companies give, subject to their being
paid all reasonable costs and expenses, all such information and
assistance, including access to premises and personnel, and the right to
examine and copy or photograph any assets, accounts, documents and
records, as the Vendors or their accountants or professional advisers may
reasonably request. The Vendors agree to keep all such information
confidential and only to use it for the purpose of the claim in question.
2.3 Third party claim/liability
If the claim in question is for a breach of warranty and is a result of or
in connection with a claim by or liability to a third party then:
2.3.1 no admission of liability shall be made by or on behalf of the
Purchaser or any Group Company and the claim shall not be
compromised, disposed of or settled without the consent of the
Vendors (such consent not to be unreasonably withheld or delayed);
2.3.2 the Vendors shall be entitled at their own expense in their
absolute discretion to take such action as they shall deem
necessary to avoid, dispute, deny, defend, resist, appeal,
compromise or contest such claim or liability (including, without
limitation, making counterclaims or other claims against third
parties) in the name of and on behalf of the Purchaser or the Group
Company concerned and to have the conduct of any related
proceedings, negotiations or appeals; and
2.3.3 the Purchaser will give and procure that the relevant Group Company
gives, subject to their being paid all reasonable costs and
expenses, all such information and assistance, including access to
premises and personnel, and the right to examine and copy or
photograph any assets, accounts, documents and records, for the
purpose of avoiding, disputing, denying, defending, resisting,
appealing, compromising or contesting any such claim or liability
as the Vendors or their professional advisers reasonably request.
2.3.4 Any claim in respect of which notice shall have been given in
accordance with Clause 2.1 above shall be deemed to have been
irrevocably withdrawn and lapsed (not having been previously
satisfied, settled or withdrawn) if proceedings in respect of such
claim have not been issued not later than 12 months after the date
of service of such notice and served upon the Vendors within 24
months of such date.
3. Prior Receipt
If, before the Vendors pay an amount in discharge of any claim for breach
of Warranty, the Purchaser or any Group Company recovers or is entitled to
recover (whether by payment, discount, credit, relief or otherwise) from a
third party a sum which is referable to the subject matter of the claim,
the Purchaser shall procure that before steps are taken against the
Vendors under this Agreement all reasonable steps are taken to enforce
such recovery and any actual recovery (less any reasonable costs incurred
in such recovery) shall pro tanto reduce or satisfy, as the case may be,
such claim.
4. Subsequent Recovery
If the Vendors pay an amount in discharge of any claim for breach of
Warranty and the Purchaser or any Group Company subsequently recovers
(whether by payment, discount, credit, relief or otherwise) from a third
party a sum which is referable to the subject matter of the claim and
which would not otherwise have been received by the Purchaser, the
Purchaser shall pay, or shall procure that the relevant Group Company
pays, to the Vendors an amount equal to (i) the sum recovered from the
third party less any reasonable costs and expenses incurred in obtaining
such recovery or (ii) if less, the amount previously paid by the Vendors
to the Purchaser.
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5. Double Claims
The Purchaser shall not be entitled to recover from the Vendors for breach
of Warranty or the Tax Deed of Covenant more than once in respect of the
same damage suffered, and accordingly the Vendors shall not be liable in
respect of any breach of Warranty if and to the extent that the Losses are
or have been included in a claim under the Tax Deed of Covenant which has
been satisfied, nor shall the Vendors be liable in respect of a claim
under the Tax Deed of Covenant if and to the extent that the Losses are or
have been included in a claim for breach of Warranty which has been
satisfied.
6. Tax
In calculating the liability of the Vendors for any breach of Warranty,
there shall be taken into account the amount (if any) by which any
Taxation for which the Purchaser or any Group Company would otherwise have
been accountable or liable to be assessed is actually reduced or
extinguished as a result of the matter giving rise to such liability.
7. The Warranties and the Covenants given in the Tax Deed of Covenant are
given on the basis of the Company continuing to carry on business and the
Subsidiaries remaining dormant after Completion.
8. Purchaser's Warranty
The Purchaser warrants and represents to the Vendors (upon which warranty
and representation the Vendors rely in entering this Agreement) that the
Purchaser having been given an opportunity to conduct a due diligence
investigation into the business of the Company neither it nor its agents
are aware of any matter or thing as at the date of this Agreement (other
than contained in the Disclosures) which is inconsistent with the Vendors'
Warranties.
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Schedule 5
Tenancy Agreement
57
Schedule 6
Completion Announcement
58