EXHIBIT 2.1
DATED 16TH DECEMBER 1998
(1) BIG FLOWER LIMITED
- and -
(2) M C G HUNTER AND OTHERS
- and -
(3) COLORGRAPHIC DIRECT RESPONSE LIMITED
- and -
(4) X X XXXXXX AND ANOTHER
--------------------------------------------------------
AGREEMENT
for the sale and purchase of all of the issued shares
of Colorgraphic Direct Response Limited
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ASHURST XXXXXX XXXXX
Xxxxxxxxx Xxxxx
0 Xxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Tel: 0000-000 0000
Fax: 0000-000 0000
XXX/000X00000
CONTENTS
CLAUSE PAGE
1. INTERPRETATION......................................................................................... 1
2. SALE AND PURCHASE...................................................................................... 4
3. COMPLETION............................................................................................. 5
4. WARRANTIES.............................................................................................10
5. PROTECTION OF GOODWILL.................................................................................12
6. CONFIDENTIAL INFORMATION...............................................................................13
7. ANNOUNCEMENTS..........................................................................................14
8. COSTS..................................................................................................15
9. EFFECT OF COMPLETION...................................................................................15
10. FURTHER ASSURANCES.....................................................................................15
11. ENTIRE AGREEMENT.......................................................................................15
12. VARIATIONS.............................................................................................16
13. WAIVER.................................................................................................16
14. INVALIDITY.............................................................................................16
15. NOTICES................................................................................................16
16. COUNTERPARTS...........................................................................................17
17. GOVERNING LAW AND JURISDICTION.........................................................................17
18. ASSIGNMENT.............................................................................................18
19. PERIOD TO COMPLETION...................................................................................18
SCHEDULE 1....................................................................................................20
Particulars relating to the Vendors...........................................................................20
SCHEDULE 2....................................................................................................23
Particulars relating to the Company...........................................................................23
SCHEDULE 3....................................................................................................24
Particulars relating to Subsidiaries..........................................................................24
Particulars relating to Subsidiaries (continued)..............................................................25
SCHEDULE 4....................................................................................................26
Form of Resignation...........................................................................................26
SCHEDULE 5....................................................................................................27
The Warranties................................................................................................27
SCHEDULE 6....................................................................................................62
Warrantors' Limitations on Liability..........................................................................62
SCHEDULE 7....................................................................................................66
The Properties................................................................................................66
SCHEDULE 8....................................................................................................67
Action Pending Completion.....................................................................................67
THIS AGREEMENT is made on 1998
BETWEEN:-
(1) BIG FLOWER LIMITED (No. 3435268) whose registered office is at Xxxxxxxxx
Xxxxx, 0 Xxxxxx Xxxxxx, Xxxxxx XXX 0XX (the "PURCHASER");
(2) The persons whose names and addresses are set out in column 1 of Parts I and
II of Schedule I (together the "VENDORS");
(3) COLORGRAPHIC DIRECT RESPONSE LIMITED whose registered office is at 00 Xx.
Xxxxxx Xxxxxx, Xxxxxx XX0 (xxx "COMPANY"); and
(4) The Vendors named in Parts I and II of Schedule 1 (excluding NatWest
Ventures Nominees) and the persons whose names and addresses are set out in
column (1) of Part III of Schedule I (the "WARRANTORS").
THE PARTIES AGREE AS FOLLOWS:-
1. INTERPRETATION
1.1 In this agreement the following words and expressions and abbreviations have
the following meanings, unless the context otherwise requires:-
"ACCOUNTS DATE" means 30 September 1998;
"ASSOCIATED COMPANY" has the meaning given to it in sections 416 et seq. TA;
"BUSINESS DAY" means a day (excluding Saturdays) on which banks generally are
open in London for the transaction of normal banking business;
"COMPLETION" means the completion of the sale and purchase of the Shares in
accordance with clause 3;
"COMPLETION DATE" means 4 January 1998;
"CONFIDENTIAL INFORMATION" means all information relating to any Group Company's
business, or financial or other affairs (including future plans and targets of
any Group Company) which is not in the public domain and which is confidential;
"DISCLOSURE LETTER" means a letter of today's date together with the attachments
thereto addressed by the Warrantors to the Purchaser disclosing exceptions to
the Warranties;
"ENCUMBRANCE" means any mortgage, charge (fixed or floating), pledge, lien,
hypothecation, trust, right of set off or other third party right or interest
(legal or equitable) including any right of pre-emption, assignment by way of
security, reservation of title or any other security interest of any kind
however created or arising or any other agreement or arrangement (including a
sale and repurchase arrangement) having similar effect;
"GROUP" means the Company and the Subsidiaries and "GROUP COMPANY" means any one
of them;
"INTELLECTUAL PROPERTY" means any and all patents, trade marks, rights in
designs, get-up, trade, business or domain names, copyrights, and topography
rights, (whether registered or not and any applications to register or rights to
apply for registration of any of the foregoing), rights in inventions, know-how,
trade secrets and other confidential information, rights in databases and all
other intellectual property rights of a similar or corresponding character which
may now or in the future subsist in any part of the world;
"JOINT ACCOUNT" means the interest bearing deposit account in the joint names of
the Vendors' Solicitors and the Purchaser's Solicitors at National Westminster
Bank PLC of 00 Xxxxxxxxxxx, Xxxxxx, Sort Code 50-00-00, Account number -;
"LONDON STOCK EXCHANGE" means the London Stock Exchange Limited;
"LOAN NOTES" L- secured Loan Notes 2001 in the agreed form to be
issued by the Purchaser at Completion or the nominal amount of the Loan Notes
for the time being outstanding or as the context may require a specific portion
thereof;
"THE LOAN NOTE ACCOUNT" the interest bearing deposit account in the joint names
of the Loan Note Agents to be operated in accordance with the terms and
conditions set out in Schedule 5 of the Instrument constituting the Loan Notes;
"THE LOAN NOTE AGENTS" XX Xxxxxx & Co, a firm of solicitors of 000 Xxxxx Xxx
Xxxx, Xxxxxx XX0X 0XX and Ashurst Xxxxxx Xxxxx, a firm of solicitors of
Xxxxxxxxx Xxxxx, 0 Xxxxxx Xxxxxx, Xxxxxx XX0X 0XX;
"THE LOAN NOTE AMOUNT" all sums from time to time standing to the credit of the
Loan Note Account;
"LOAN NOTE HOLDER" the registered holder, or holders, for the time being of Loan
Notes;
"NATWEST VENTURES NOMINEES" means NatWest Ventures Nominees Limited, 000
Xxxxxxxxxxx, Xxxxxx XX0X 0XX as nominee for NatWest Ventures Investments Ltd,
NatWest Pensions Trustees Ltd and NatWest Equity Partners Executives Coinvest
Fund;
"NATWEST VENTURES NOMINEES' SOLICITORS" means Wragge & Co of 00 Xxxxxxx Xxx,
Xxxxxxxxxx X0 0XX;
"PERMIT" means a permit, licence, consent, approval, certificate, qualification,
specification, registration and other authorisation necessary in any
jurisdiction for the proper operation of each Group Company's business;
"PROPERTIES" means the properties described in schedule 7 or any part or parts
thereof and "PROPERTY" shall mean any one of them;
"PURCHASER'S GROUP" means the Purchaser, its holding companies and the
subsidiary undertakings from time to time of it and of such holding companies,
all of them and each of them as the context admits;
"PURCHASER'S SOLICITORS" means Ashurst Xxxxxx Xxxxx of Xxxxxxxxx Xxxxx, 0 Xxxxxx
Xxxxxx, Xxxxxx XX0X 0XX;
"RELATED PERSON" means in relation to any party its holding companies and the
subsidiary undertakings and associated companies from time to time of it and any
such holding company, all of them and each of them as the context admits;
"SHARES" means all of the issued shares in the capital of the Company excluding
the 'A' preference shares and 'B' preference shares of L1 each;
"SUBSIDIARY" means a subsidiary undertaking of the Company specified in schedule
3 and "SUBSIDIARIES" means all those subsidiary undertakings;
"TA" means the Income and Corporation Taxes Xxx 0000;
"TAX DEED" means a deed of covenant in the agreed terms;
"VENDORS' SOLICITORS" means XX Xxxxxx & Co of 000 Xxxxx Xxx Xxxx, Xxxxxx XX0X
0XX
"WARRANTIES" means the warranties and representations set out in Clause 4.1 and
in schedule 5.
1.2 In this agreement unless otherwise specified, reference to:-
(a) a "SUBSIDIARY UNDERTAKING" is to be construed in accordance with
section 258 of the Companies Xxx 0000 and a "SUBSIDIARY" or "HOLDING
COMPANY" is to be construed in accordance with section 736 of that
Act;
(b) a document in the "AGREED TERMS" is a reference to that document in
the form approved and for the purposes of identification signed by or
on behalf of each party;
(c) "FA" followed by a stated year means the Finance Act of that year;
(d) "INCLUDES" and "INCLUDING" shall mean including without limitation;
(e) a "PARTY" means a party to this agreement and includes its assignees
(if any) and/or the successors in title to substantially the whole of
its undertaking [and, in the case of an individual, to his or her
estate and personal representatives];
(f) a "PERSON" includes any person, individual, company, firm,
corporation, government, state or agency of a state or any undertaking
(whether or not having separate legal personality and irrespective of
the jurisdiction in or under the law of which it was incorporated or
exists);
(g) a "STATUTE" or "STATUTORY INSTRUMENT" or "ACCOUNTING STANDARD" or any
of their provisions is to be construed as a reference to that statute
or statutory instrument or accounting standard or such provision as
the same may have been amended or re-enacted before the date of this
agreement;
(h) "CLAUSES", "PARAGRAPHS" or "SCHEDULES" are to clauses and paragraphs
of and schedules to this agreement;
(i) "WRITING" includes any methods of representing words in a legible form
other than writing on an electronic or visual display screen or in
other non-transitory form;
(j) words denoting the singular shall include the plural and vice versa
and words denoting any gender shall include all genders;
(k) any statute, statutory instrument, regulation, by-law or other
requirement of English law and to any English legal term for any
action, remedy, method of judicial proceeding, legal document, legal
status, procedure, court, official or any legal concept or doctrine or
other expression shall in respect of any jurisdiction other than
England be deemed to include that which most nearly approximates in
that jurisdiction to the English term;
1.3 The schedules form part of the operative provisions of this agreement and
references to this agreement shall, unless the context otherwise requires,
include references to the schedules.
1.4 The index to and the headings and the descriptive notes in brackets relating
to provisions of taxation statutes in this agreement are for information only
and are to be ignored in construing the same.
1.5 The obligations and liabilities of the Vendors and of the Warrantors under
this agreement shall be several, save where otherwise expressly stated.
1.6 Any question of whether a person is connected with another shall be
determined in accordance with section 839 of the TA (except that in construing
section 839 "CONTROL" has the meaning given by section 840 or section 416 of the
TA so that there is control whenever section 840 or 416 requires) which shall
apply in relation to this agreement as it applies in relation to the TA.
2. SALE AND PURCHASE
2.1 Upon the terms and subject to the conditions of this agreement, the Vendors
shall sell and the Purchaser shall purchase the numbers of Shares of which each
of the Vendors is the registered holder (save for NatWest Ventures Nominees, who
agree to procure the sale by the beneficial owners of the Shares of which
NatWest Ventures Nominees are registered holder) and beneficial owner being set
out opposite each of the Vendors' names in column 2 of schedule 1 with effect
from the commencement of business on the Completion Date (the "ACQUISITION").
Each Vendor hereby severally warrants with the Purchaser as follows:-
(a) that he has the right to dispose of the Shares which he is purporting
to sell; and
(b) that the Shares he is selling are sold free from any Encumbrance (and
in the case of NatWest Ventures Nominees, that it will procure that
title is transferred to the Purchasers free from Encumbrance) and
together with all rights now or hereafter attaching thereto, including
the right to all dividends and other distributions (if any) declared,
made or paid after the Accounts Date.
2.2 The Vendors waive or prior to Completion agree to procure the waiver of any
rights or restrictions conferred upon any of them or any other person which may
exist in relation to the transfer of Shares under the articles of association of
the Company or otherwise.
The Purchaser shall not be obliged to complete the purchase of any of the Shares
unless the Vendors complete the sale of all of the Shares simultaneously, but
completion of the purchase of some Shares shall not affect the rights of the
Purchaser with respect to its rights to the other Shares.
2.3 The consideration for such sale and purchase shall be L27,728,370 to
be satisfied in cash subject to the following provisions of this clause 2
PROVIDED that if the amount required at Completion by the Group to repay all
amounts outstanding to Bank of Scotland excluding interest exceeds (or is less
than) L7,750,000, then such consideration shall be reduced (or increased)
by the excess (or deficit), such adjustment to be apportioned pro rata to the
split for the shares shown in Schedule 1.
2.4 L26,228,370 of the consideration shall be paid in cash on Completion
to be apportioned between the Vendors in the proportions set out in column 3 of
Parts I and II of schedule 1 and the remainder of the consideration shall be
paid into the Joint Account on Completion.
2.4A* That part of the Consideration which would otherwise be payable in cash on
Completion and attributable to the Shares being sold by any Vendor or who so
elects by notice in writing to the Purchaser on or prior to 31 December 1998
shall be satisfied by the issue of Loan Notes at par, such Loan Notes to be
constituted by an Instrument in the Agreed Form.
The Purchaser shall procure the cash sum equal to the amount of the Loan Notes
issued be paid into the Loan Note Account at Completion (instead of to the
Vendors solicitors) and the Purchaser and the Vendors hereby irrevocably
authorise and instruct the Loan Note Agents to operate the Loan Note Account in
accordance with the provisions relating thereto in the Instrument constituting
the Loan Notes.
[*Note: No Vendor elected for Loan Notes and none were issued].
2.4B In the event that any Vendor elects pursuant to clause 4A to have his
consideration (or any part thereof) satisfied in Loan Notes, that consideration
due to that Vendor shall be reduced by the sum of L100,000.
2.5 If the Purchaser shall not have notified the Vendors in writing of any valid
claims under the Warranties or the Tax Deed or Clause 4.9, specifying reasonable
details of the grounds for any such claim, on or before 1 April 2000, the amount
of L1,500,000 in the Joint Account (together with accrued interest earned
thereon) shall be forthwith released to the Vendors' Solicitors to be
apportioned between the Vendors as set out in column 4 of schedule 1. If the
Purchaser shall have so notified the Vendors in writing of any such valid
claim(s), then the amounts so claimed (disregarding, for this purpose, the
provisions of schedule 6 paragraph 2) shall be retained in the Joint Account
pending final determination of such claim(s) and any balance (together with
accrued interest earned on such balance) shall be released to the Vendors'
Solicitors to be apportioned between the Vendors as set out in column 4 of
schedule 1. Upon final determination of the total amount(s) due to the Purchaser
such amounts shall (to the extent that there are funds available in the Joint
Account) be paid
forthwith to the Purchaser. Any payments to the Purchaser from the Joint Account
shall for the avoidance of doubt be without prejudice to the Purchaser's right
to payment of any further amounts which cannot be satisfied from the Joint
Account. Any balance held in the Joint Account after such final determination
and payment to the Purchaser (together with all accrued interest earned thereon)
shall be released to the Vendors' Solicitors to be apportioned between the
Vendors as set out in column 4 of schedule 1 PROVIDED ALWAYS that no payment
shall be made under any circumstances to the Vendors or the Vendors' Solicitors
from the Joint Account before 1 April 2000. For the purposes of this clause 2.5
only and unless otherwise agreed by the Vendors' Solicitors any claim made by
the Purchaser under the Warranties or Tax Deed or clause 4.9 shall be deemed to
be a valid claim but if the Purchaser has not provided to the Vendors'
Solicitors prior to the expiry of the period of 6 months after the date of
notification to the Vendors of the relevant claim an opinion of Queen's Counsel
instructed by or on behalf of the Purchaser to the effect that the Purchaser has
an arguable claim for at least the amount so claimed by the Purchaser in respect
of that claim, then such claim shall cease to be regarded as a valid claim for
the purposes only of this clause 2.5.
2.6 Interest earned on amounts held in the Joint Account shall not be released
other than in accordance with clause 2.5. Any amounts to be released to the
Vendors' Solicitors or the Purchaser's Solicitors shall be subject to deduction
of tax thereon or other amounts (if any) required by law to be deducted in
respect thereof and also after deduction of any bank or other charges arising in
the Joint Account (which shall be charged to the Joint Account).
2.7 The Warrantors and the Purchaser confirm that they have irrevocably
instructed their respective solicitors to operate the Joint Account in
accordance with this clause 2.
3. COMPLETION
3.1 Completion shall take place on the Completion Date.
3.2 On Completion:
3.2.1 the Vendors (excluding NatWest Ventures Nominees) shall deliver to or, if
the Purchaser shall so agree, make available to the Purchaser as may be agreed
between the parties:-
(a) transfers in common form relating to all the Shares duly executed in
favour of the Purchaser (or as it may direct);
(b) share certificates relating to the Shares or lost share certificate
indemnities therefor in the agreed terms;
(c) any waivers or consents by members of any Group Company necessary to
enable the Purchaser or its nominees to be registered as the holders
of the Shares and any shares of Subsidiaries;
(d) resignations in the form set out in schedule 4 duly executed as deeds
of X X Xxxxxxxx and M C G Hunter;
(e) the written resignations of the auditors of each Group Company
containing an acknowledgement that they have no claim against any
Group Company for compensation for loss of office, professional fees
or otherwise and a statement under section 394(1) of the Companies Xxx
0000;
(f) the common seals, certificates of incorporation and statutory books
and share certificate books of each Group Company;
(g) the Tax Deed duly executed by the Warrantors;
(h) all documents relating to the Properties as listed in the Schedule of
such documents referred to in the Disclosure Letter;
(i) duly executed transfers of each share in the Subsidiaries not
registered in the name of any Group Company in favour of the Purchaser
(or as it may direct);
(j) share certificates relating to all of the issued shares in the capital
of each of the Subsidiaries;
(k) the Service Agreements duly executed by the persons named in Clause
3.3(e);
(l) opinions in the agreed terms from lawyers in the British Virgin
Islands and from lawyers in the Netherlands;
(m) the Disclosure Letter duly executed;
(n) a certified copy of any power of attorney in the agreed terms under
which this agreement, the Tax Deed, or any of the transfers or other
documents referred to in this clause is executed by any party;
(o) Subject to the Purchaser procuring that the Group discharges all sums
due thereunder and provides any counter-indemnity (in a form
reasonably acceptable to the Bank of Scotland) in respect of
commitments to third parties on the Group's behalf by the Bank of
Scotland a release in a form reasonably satisfactory to the Purchaser
of the charges granted by any member of the Group in favour of the
Governor and Company of the Bank of Scotland and Lombard North Central
PLC and of any other charges granted by any member of the Group which
have not been released prior to Completion; and
(p) Board Minutes relating to dividends in the agreed terms.
3.2.2 NatWest Ventures Nominees shall deliver to or, if the Purchaser shall so
agree, make available to the Purchaser:-
(a) transfers of its Shares duly executed in favour of the Purchaser (or
as it may direct);
(b) share certificates relating to its Shares or lost share indemnities
therefor in the agreed terms; and
(c) any waivers or consents by members of any Group Company necessary to
enable the Purchaser or its nominees to be registered as the holders
of the Shares and any shares of Subsidiaries.
3.3 At or prior to Completion (and prior to the taking effect of the
resignations of the directors referred to in clause 3.2(d) above) the Vendors
(excluding NatWest Ventures Nominees) shall procure the passing of board
resolutions of each Group Company:-
(a) sanctioning for registration (subject where necessary to due stamping)
the transfers in respect of the Shares and any shares to which clause
3.2(k) refers;
(b) appointing such persons as the Purchaser may specify to be the
directors and secretary of each Group Company;
(c) revoking all mandates to bankers and giving authority in favour of
such persons as the Purchaser may nominate to operate the bank
accounts thereof;
(d) changing the accounting reference date of each Group Company to 31
December,
(e) resolving that the Company or a subsidiary enters into the Service
Agreements with Messrs. X. Xxxxxx, X.X. Xxxxxx and X.X. Xxxxx
respectively;
and of a shareholders' resolution in the Agreed Form.
3.4 The Vendors (excluding NatWest Ventures Nominees) shall procure that at
Completion there is repaid all sums (if any) owing to any Group Company by any
of the Vendors or any of their connected persons (other than another Group
Company) or by the directors of any Group Company and whether or not such sums
are due for repayment; and prior to such repayment or release the Vendors
(excluding NatWest Ventures Nominees) undertake to the Purchaser (on behalf of
themselves and as trustee on behalf of each Group Company) to keep each Group
Company fully indemnified against any failure to make any such repayment or any
liability arising under such guarantee, indemnity, bond, letter of comfort or
Encumbrance.
3.5 Upon compliance by the Vendors with the provisions of clauses 3.2, 3.3 and
3.4 the Purchaser shall:-
(a) provide for the transfer by CHAPS of L21,957,699.10 to the
Vendors' Solicitors at Barclays Bank plc, of 0/0 Xxxxxxx Xxxxxx,
Xxxxxx X0X 0XX, Sort Code 20-36-47, Account No. 00000000 Reference
79/478/C12843.1 and L14,295,572.38 to NatWest Ventures Nominees'
Solicitors, at Lloyds Bank plc, 000 Xxxxxxx Xxx, Xxxxxxxxxx, X0 0XX),
Sort Code 30-00-03 Account No 0000000 and receipt by such banks of
such sums shall be good discharge:-
(i) to the Purchaser in respect of L26,228,370 (being the
amount payable under clause 2.4); and
(ii) as to the remainder (being the amount payable by the Company on
redemption of preference shares under clause 3.5(d)) to the
Company;
(b) provide for the transfer to the Joint Account of the sum of
L1,500,000 and receipt by National Westminster Bank PLC, 15
Bishopsgate of such sum shall be good discharge to the Purchaser;
(c) deliver to the Vendors' Solicitors a counterpart of the Tax Deed duly
executed by the Purchaser; and the certificates for Loan Notes issued
pursuant to clause 2.4A; and a certified copy of the executed Loan
Note Instrument and Minutes of the Purchaser creating it;
(d) procure that the Company redeems in full at par (L1 per share)
the 'A' preference shares and 'B' preference shares of L1 each
registered in the names of the Vendors as set out in Schedule 1 Parts
I and II and that the Company makes payment therefor to such Vendors
in accordance with clause 3.5(a).
3.6 If in any respect the obligations of the Vendors under clause 3.2.1(a), (b),
(c), (d), (e), (g), (h), (i), (j), (k), (l), (m), (n) and (o), clause 3.2.2(a),
(b) and (c) and clause 3.3 (or Purchaser under clause 3.5) are not complied with
on Completion the party not in default may:-
(a) defer Completion to a date not more than 28 days after Completion (and
so that the provisions of this clause 3, apart from this clause
3.6(a), shall apply to Completion as so deferred); or
(b) proceed to Completion so far as practicable (without prejudice to its
rights hereunder); or
(c) terminate this agreement without prejudice to the rights and
liabilities which accrued prior to termination which shall continue to
subsist including those under clauses 7, 8 and 11 to 17 (inclusive),
by means of a notice in writing served by the Vendors' Solicitors on the
Purchaser, if the Purchaser is in default, or served by the Purchaser on the
Vendors' Solicitors if any of the Vendors are in default.
3.7 Each of the Vendors hereby resolves and agrees and notifies the Company
that:-
(a) all 'A' and 'B' preference shares of L1 EACH ("PREFERENCE
Shares") registered in his or its name (as set out in column 2 of
Schedule 1) shall be at Completion redeemed pursuant to article 3.2(a)
and (h) and 4.2(a) and (f) of the articles of association of the
Company, and agrees to deliver to the Company the certificates for
such Preference Shares;
(b) the payment on redemption pursuant to the articles of association of
the Company is agreed to be L1 per share (plus arrears
deficiencies and accruals of dividends up to and including the date of
Completion being in aggregate L344,131.48).
Each of the Vendors holding Preferred Ordinary Shares in the capital of the
Company hereby waives its right to receive any bonus issue of shares
pursuant to Article 5.1(e) of the Company's Articles of Association.
4. WARRANTIES
4.1 The Warrantors jointly and severally warrant with and represent to the
Purchaser in the terms of the Warranties.
4.2 Any information ("GROUP COMPANY INFORMATION") supplied by or on behalf of
any Group Company to the Warrantors or their agents or advisers in connection
with the Warranties, the Disclosure Letter or otherwise in relation to the
business and affairs of any Group Company shall not constitute a representation
or warranty or guarantee as to the accuracy thereof by any Group Company and
each of the Warrantors agrees with the Purchaser (on behalf of itself and as
trustee for each Group Company and their respective directors and employees)
that he hereby irrevocably waives any and all claims which he might otherwise
have against any Group Company or any of their respective directors or employees
in respect thereof and arising out of the accuracy of Group Company Information
and any and all other claims against any Group Company or any such persons in
respect of any cause, matter or thing whatsoever and hereby releases each Group
Company and each such person from any liability or obligation to him whatsoever.
4.3 Each of the Warranties shall be construed as a separate warranty and
representation, and (unless expressly provided to the contrary) shall not be
limited by the terms of any of the other Warranties or by any other term of this
agreement.
4.4 The liability of the Warrantors under the Warranties shall be limited as set
out in schedule 6.
4.5 No information relating to the Group of which the Purchaser has knowledge
(actual or constructive) other than that contained in or referred to in this
agreement and/or included in the Disclosure Letter and save in so far as
disclosed in the reports comprised in the annexures to the Disclosure Letter in
document M10 no investigation by or on behalf of the Purchaser shall prejudice
any claim by the Purchaser under the Warranties or reduce any amount recoverable
thereunder.
4.6 The Warrantors hereby undertake with the Purchaser to pay to the Purchaser
on demand such sums as would, if paid to the Group, indemnify and keep
indemnified the Group against all claims, costs, charges, expenses, liabilities,
losses, actions, demands, proceedings and judgements whatsoever which the Group
may at any time suffer or incur or which may be brought or threatened against
either of them as a direct or indirect result of any computer system (i) used in
the business of the Group not complying with Year 2000 conformity (as defined in
Schedule 5), or (ii) used by any customer or supplier of the Group not so
complying.
4.7 The only Warranties given:
(a) in respect of the Property is the Warranty contained in paragraphs 3.2
and 3.10 and in paragraph 18 of Schedule 5 and each of the other
Warranties shall be deemed not to be given in relation to the
Property;
(b) in respect of Intellectual Property are the Warranties contained in
paragraphs 6 and 11 of Schedule 5 and each of the other Warranties
shall be deemed not to be given in relation to Intellectual Property;
and
(c) in respect of competition, anti-restrictive trade practice or
anti-trust legislation is the Warranty contained in paragraph 15 of
Schedule 5 and each of the other Warranties shall be deemed not to be
given in relation to competition, anti-restrictive trade practice or
anti-trust legislation.
4.8 The Purchaser warrants to the Vendors that:-
(a) the Purchaser has the requisite power and authority to enter into and
perform this Agreement and the other documents which are to be
executed by the Purchaser at the date hereof (the "COMPLETION
DOCUMENTS");
(b) the execution and delivery of, and the performance by the Purchaser of
its obligations under this Agreement and the Completion Documents will
not:-
(i) result in a breach of any provision of the memorandum or articles
of association or by-laws of the Purchaser;
(ii) result in a breach of, or constitute a default under, any
instrument or agreement to which the Purchaser is a party or by
which the Purchaser is bound and which is material in the context
of the transactions contemplated by this Agreement;
(iii) result in a breach of any order, judgement or decree of any
court or governmental agency to which the Purchaser is subject
and which is material in the context of the transactions
contemplated by this Agreement; or
(iv) require the Purchaser to obtain any consent or approval of, or
give any notice to or make any registration with, any
governmental or other authority which has not been obtained,
given or made at the date hereof both on an unconditional basis
and on a basis which cannot be revoked (save pursuant to any
legal or regulatory entitlement to revoke the same other than by
reason of any misrepresentation or misstatement).
4.9 The Warrantors hereby jointly and severally undertake with the Purchaser to
pay from time to time to the Purchaser such sums as would if paid to any member
of the Purchaser's Group, the Company or to a Subsidiary indemnify and keep
indemnified such member, the Company and the Subsidiaries against all losses,
claims, costs, charges, expenses, liabilities, actions, demands, proceedings and
judgements whatsoever which such member, the Company or any Subsidiary may at
any time suffer or incur or which may be brought or threatened against or
incurred by any of them which arise out of or which results from or is
attributable to:-
(i) any actions, claims, demands, proceedings and judgements against
the Company or any Subsidiary or any of their officers or
employees by The Mailforce Group Ltd or any holding company
thereof or any subsidiary of any such holding company, including
in particular pursuant to claim No. 1998 T No. 840 in The High
Court of Justice;
(ii) any actions, claims, demands, proceedings and judgments against
the Company or any Subsidiary by:-
(A) a client or customer of any of the Company's or its Subsidiary's
clients or customers or agents; or
(B) any of the Company's or any Subsidiary's clients or customers or
agents which arises in connection with a claim referred to in (ii)(A)
above.
(iii) matters arising in respect of the Disclosed Scheme (as defined in
paragraph 19 of Schedule 5 of this agreement) as a result of removal
of interim tax approval of the Disclosed Scheme by the Inland
Revenue as a result of the failure to submit definitive documentation
to the Inland Revenue.
The reference in line 1 of clause 4.9 above to the Warrantors shall, in the
case of 4.9(iii) be read as Mr R Xxxxxx and Mr N Xxxxx only.
4.10 Mr C Xxxxxx agrees to procure that PAYE is accounted for to the Inland
Revenue at no cost to the Group in respect of the exercise by him, shortly prior
to Completion, of his option to subscribe for 1,250,000 Ordinary Shares in the
capital of the Company.
4.11 Mr R Xxxxxx and Mr N Xxxxx shall use their reasonable endeavours to procure
that the Disclosed Scheme is granted tax exempt approval by the Inland Revenue
as soon as is practicable following the Completion Date.
4.12 Clause 2.5 of the Tax Deed shall apply to any payment made under clause
4.9, as if that clause 2.5 was expressly incorporated into this agreement.
4.13 Notwithstanding any other clause of this agreement, the Purchaser shall not
be entitled to rescind this agreement after the date hereof in any
circumstances.
1. PROTECTION OF GOODWILL
1.1 Each of the Vendors other than NatWest Ventures Nominees and each of the
Warrantors whose name is set out in Part III of Schedule 1 (the "COVENANTORS")
hereby undertake to procure that (except as otherwise agreed in writing with the
Purchaser) they will not either solely or jointly with any other person (either
on its own account or as the agent of any other person) except as an employee or
director of Colorgraphic Direct Response Ltd or another Group Company:-
(a) for a period of 3 years from Completion carry on or be engaged or
concerned or (except as the holder of shares in a listed company which
confer not more than five per cent. of the votes which can generally
be cast at a general meeting of the company) interested directly or
indirectly in a business which competes in United Kingdom and/or
Germany with the type of business carried on by any member of the
Group at Completion in the United Kingdom and/or Germany;
(b) for a period of 3 years from Completion solicit or accept the custom
of any person in respect of goods or services competitive with those
manufactured or supplied by any member of the Group during the period
of 12 months prior to Completion, such
person having been a customer of any member of the Group in respect of
such goods or services during such period;
(c) for a period of 3 years from Completion induce, solicit or endeavour
to entice to leave the service or employment of any member of the
Group, any person who during the period of 12 months prior to
Completion was an employee of any member of the Group occupying a
senior or managerial position likely (in the opinion of the Purchaser)
to be:-
(i) in possession of confidential information relating to; or
(ii) able to influence the customer relationships or connections
of
any member of the Group;
(d) use any trade name for the purpose of any business (including the
expressions Colorgraphic) used by any member of the Group at any time
during the 3 years immediately preceding the date of this agreement or
any other name similar thereto or capable of being confused with any
such trade name.
1.2 The Covenantors agree that the undertakings contained in this clause 5 are
reasonable and are entered into for the purpose of protecting the goodwill of
the business of each member of the Group.
1.3 Each undertaking contained in this clause 5 is and shall be construed as
separate and severable and if one or more of the undertakings is held to be
against the public interest or unlawful or in any way an unreasonable restraint
of trade or unenforceable in whole or in part for any reason the remaining
undertakings or parts thereof, as appropriate, shall continue to bind the
Covenantors.
1.4 If any undertaking contained in this clause 5 shall be held to be void but
would be valid if deleted in part or reduced in application, such undertaking
shall apply with such deletion or modification as may be necessary to make it
valid and enforceable. Without prejudice to the generality of the foregoing,
such period (as the same may previously have been reduced by virtue of this
clause 5.4) shall take effect as if reduced by six months until the resulting
period shall be valid and enforceable.
1.5 No provision of this agreement, by virtue of which this agreement is subject
to registration (if such be the case) under the Restrictive Trade Practices Act
1976 (unless this agreement is a non-notifiable agreement pursuant to section
27A of that Act), shall take effect until the day after particulars of this
agreement have been furnished to the Director-General of Fair Trading pursuant
to section 24 of that Act. For this purpose the expression "this agreement"
includes any agreement or arrangement of which this agreement forms part and
which is registrable or by virtue of which this agreement is registrable.
2. CONFIDENTIAL INFORMATION
2.1 The Covenantors shall:-
(a) not and shall procure that none of their connected persons or any
director, officer or employee or adviser or agent of their Related
Persons shall use or disclose to any person Confidential Information;
and
(b) use reasonable endeavours to prevent the use or disclosure of
Confidential Information by their connected persons.
2.2 Clause 6.1 does not apply to:-
(a) disclosure of Confidential Information to or at the written request of
the Purchaser;
(b) use or disclosure of Confidential Information required to be disclosed
by law, regulation, any revenue authority or any Stock Exchange;
(c) disclosure of Confidential Information to professional advisers for
the purpose of advising the Covenantors, including advice in
connection with any claim under the terms of the agreement or any
agreement or document referred to herein or contemplated hereby; or
(d) Confidential Information which is in the public domain other than by a
breach by any of the Covenantors of clause 6.1.
3. ANNOUNCEMENTS
3.1 No party shall disclose the making of this agreement nor its terms nor any
other agreement referred to in this agreement (except those matters set out in
the press release in the agreed terms) and each of the parties shall use all
reasonable endeavours to procure that each of its Related Persons and its
professional advisers shall not make any such disclosure without the prior
consent of the other party unless disclosure is:-
(a) to its professional advisers; or
(b) required by law or the rules of any stock exchange or other regulatory
body and disclosure shall then only be made by that party:-
(i) after it has taken all such steps as may be reasonable in the
circumstances to agree the contents of such announcement with the
other parties before making such announcement and provided that
any such announcement shall be made only after notice to the
other parties; and
(ii) to the person or persons and in the manner required by law or any
Stock Exchange or as otherwise agreed between the parties
provided that this clause 7.1 does not apply to announcements,
communications or circulars made or sent by the Purchaser after
Completion to customers, clients or suppliers of any Group
Company to the extent that it informs them of the Purchaser's
acquisition of the Shares or to any announcements containing only
information which has become publicly available.
3.2 The restrictions contained in clause 7.1 shall apply without limit of time
and whether or not this agreement is terminated.
4. COSTS
Each of the parties shall bear its own legal, accountancy and other costs,
charges and expenses connected with the sale and purchase of the Shares.
5. EFFECT OF COMPLETION
5.1 The terms of this agreement (insofar as not performed at Completion and
subject as specifically otherwise provided in this agreement) shall continue in
force after and notwithstanding Completion.
5.2 The remedies of the Purchaser in respect of any breach of any of the
Warranties shall continue to subsist notwithstanding Completion.
6. FURTHER ASSURANCES
6.1 Following Completion the Vendors (other than NatWest Ventures Nominees)
shall from time to time forthwith upon request from the Purchaser at such
Vendors' expense do or procure the doing of all acts and/or execute or procure
the execution of all such documents in a form reasonably satisfactory to the
Purchaser for the purpose of vesting in the Purchaser the full legal and
beneficial title to the Shares;
6.2 Following Completion the Vendors shall from time to time forthwith upon
request from the Purchaser at the Purchaser's expense do or procure the doing of
all reasonable acts and/or execute or procure the execution of all such
documents in a form reasonably satisfactory to the Purchaser for the purpose of
giving the Purchaser the full benefit of this agreement.
7. ENTIRE AGREEMENT
7.1 Each party on behalf of itself and as agent for each of its Related Persons
acknowledges and agrees with the other parties (each such party acting on behalf
of itself and as agent for each of its Related Persons if any) that:-
(a) this agreement together with any other documents referred to in this
agreement (together the "TRANSACTION DOCUMENTS") constitute the entire
and only agreement between the parties relating to the Acquisition;
(b) it has not been induced to enter into any Transaction Document in
reliance upon, nor have they been given, any warranty, representation,
statement, assurance, covenant, agreement, undertaking, indemnity or
commitment of any nature whatsoever other than as are expressly set
out in the Transaction Documents and, to the extent that any of them
have been, it (acting on behalf of itself and as agent on behalf of
each of its Related Persons, if any) unconditionally and irrevocably
waives any claims, rights or remedies which any of them might
otherwise have had in relation thereto;
PROVIDED THAT the provisions of this clause 11 shall not exclude any liability
which any of the parties or, where appropriate, their Related Persons would
otherwise have to any other party or, where appropriate, to any other party's
Related Persons or any right which any of them may have in respect of any
statements made fraudulently by any of them prior to the
execution of this agreement or any rights which any of them may have in respect
of fraudulent concealment by any of them.
8. VARIATIONS
This agreement may be varied only by a document signed by each of the Vendors,
the Warrantors and the Purchaser.
9. WAIVER
9.1 A waiver of any term, provision or condition of, or consent granted under,
this agreement shall be effective only if given in writing and signed by the
waiving or consenting party and then only in the instance and for the purpose
for which it is given.
9.2 No failure or delay on the part of any party in exercising any right, power
or privilege under this agreement shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or privilege preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege.
9.3 No breach of any provision of this agreement shall be waived or discharged
except with the express written consent of the Vendors, the Warrantors and the
Purchaser.
9.4 The rights and remedies herein provided are cumulative with and not
exclusive of any rights or remedies provided by law.
10. INVALIDITY
10.1 If any provision of this agreement is or becomes invalid, illegal or
unenforceable in any respect under the law of any jurisdiction:-
(a) the validity, legality and enforceability under the law of that
jurisdiction of any other provision; and
(b) the validity, legality and enforceability under the law of any other
jurisdiction of that or any other provision,
shall not be affected or impaired in any way.
11. NOTICES
11.1 Any notice, demand or other communication given or made under or in
connection with the matters contemplated by this agreement shall be in writing
and shall be delivered personally or sent by fax or prepaid first class post
(air mail if posted to or from a place outside the United Kingdom):-
IN THE CASE OF THE PURCHASER TO:-
Address Big Flower Ltd, c/o
0 Xxxx 00xx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx Xxxx, 00000, XXX
Fax: 001 212 521 1640
Attention: Xxxx Xxxxxxxx
IN THE CASE OF THE VENDORS TO:- Xxxxx Xxxxxx and Xxxxxxx Xxxxxx
at the addresses in Schedule
1 and copied to X. X. Xxxxxx &
Co (Attention: Xxxxxx Xxxxx)
IN THE CASE OF NATWEST VENTURES Wragge & Co, 00 Xxxxxxx Xxx,
XXXXXXXX XX:- Xxxxxxxxxx X0 0XX
Fax: 0121 214 1099
Attention: Xxxxxx Xxxxxx Xxxxx
and shall be deemed to have been duly given or made as follows:-
(a) if personally delivered, upon delivery at the address of the relevant
party;
(b) if sent by first class post, two Business Days after the date of
posting;
(c) if sent by air mail, five Business Days after the date of posting; and
(d) if sent by fax, when despatched;
provided that if, in accordance with the above provisions, any such notice,
demand or other communication would otherwise be deemed to be given or made
outside 9.00 a.m. - 5.00 p.m. on a Business Day such notice, demand or other
communication shall be deemed to be given or made at 9.00 a.m. on the next
Business Day.
11.2 A party may notify the other party to this agreement of a change to its
name, relevant addressee, address or fax number for the purposes of clause 15.1
provided that such notification shall only be effective on:-
(a) the date specified in the notification as the date on which the change
is to take place; or
(b) if no date is specified or the date specified is less than five
Business Days after the date on which notice is given, the date
falling five Business Days after notice of any such change has been
given.
12. COUNTERPARTS
This agreement may be executed in any number of counterparts which together
shall constitute one agreement. Any party may enter into this agreement by
executing a counterpart and this agreement shall not take effect until it has
been executed by all parties.
13. GOVERNING LAW AND JURISDICTION
13.1 This agreement (and any dispute, controversy, proceedings or claim of
whatever nature arising out of or in any way relating to this agreement or its
formation) shall be governed by and construed in accordance with English law.
13.2 Each of the parties to this agreement irrevocably agrees that the courts of
England shall have exclusive jurisdiction to hear and decide any suit, action or
proceedings, and/or to settle any disputes, which may arise out of or in
connection with this agreement (respectively, "PROCEEDINGS" and "DISPUTES") and,
for these purposes, each party irrevocably submits to the jurisdiction of the
courts of England.
13.3 Each party irrevocably waives any objection which it might at any time have
to the courts of England being nominated as the forum to hear and decide any
Proceedings and to settle any Disputes and agrees not to claim that the courts
of England are not a convenient or appropriate forum for any such Proceedings or
Disputes and further irrevocably agrees that a judgment in any Proceedings or
Disputes brought in any court referred to in this clause 20 shall be conclusive
and binding upon the parties and may be enforced in the courts of any other
jurisdiction.
13.4 Without prejudice to any other permitted mode of service the parties agree
that service of any writ, notice or other document ("DOCUMENTS") for the purpose
of any Proceedings begun in England shall be duly served upon it if delivered
personally or sent by registered post, in the case of any Vendor shown in Part
II of Schedule 1 to X X Xxxxxx & Co of 000 Xxxxx Xxx Xxxx, Xxxxxx XX0X 0XX (xxx:
Xxxxxx Xxxxx C12843.1) or such other person and address in England and/or Wales
as any such Vendor shall notify the Purchaser in writing from time to time.
14. ASSIGNMENT
14.1 It is hereby agreed and declared that the benefit but not the burden of
this agreement may be assigned by the Purchaser to any member of the Purchaser's
Group but prior to any such assignee leaving the Purchaser's Group, the benefit
of this agreement shall be reassigned to another member of the Purchaser's
Group.
15. PERIOD TO COMPLETION
15.1 The Vendors (excluding NatWest Ventures Nominees) and the Warrantors
undertake with the Purchaser that in the period from the date hereof until
Completion to:-
(a) operate the business and activities of each Group Company in their
usual course and use all reasonable efforts between today's date and
the Completion Date as to procure that no act or event shall occur
during that period which would be reasonably expected to result in a
breach of the Warranties upon their repetition immediately prior to
Completion; and
(b) procure that each Group Company shall comply with each of the
undertakings set out in schedule 8.
Nothing done by Mr M Angelson will constitute a breach of this clause 19.1.
15.2 Pending Completion the Purchaser and any person authorised by it shall be
given reasonable access on reasonable notice to the Properties and (subject to
maintaining confidentiality) to all the books and records of each Group Company
and the directors and employees of each Group Company shall be instructed to
give as soon as is reasonably practicable all such information and explanations
as the Purchaser or any such person may reasonably request.
15.3 The Vendors (excluding NatWest Ventures Nominees) and the Warrantors
undertake to the Purchaser that they will disclose forthwith in
writing to the Purchaser any matter or thing which may arise or become
known to any of them after the date hereof which is inconsistent with
any of the Warranties.
IN WITNESS whereof this agreement has been executed on the date first above
written.
SCHEDULE 1
PARTICULARS RELATING TO THE VENDORS
PART I
------------------------------------------------------------------------------------------------------------------------------
Column 1 2 3 4
Names & Addresses of Number of Shares held Cash at Completion Joint Account
the Vendors from Purchaser (for %
Ord and Pref Ord) and
Redemption Money (for A
Pref and B Pref) from Company
(plus dividends) L
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
1. Xxxxxxx Xxxxxx Xxxx 1,769,240 Ord 5,036,047.38 35.890
Hunter 591,380 Pref Ord 1,677,333.34
00 Xxxxxxxxxx Xxxx 1,840,862 A Pref 1,840,862 (+65,438.86)
Highgate 583,938 B Pref 583,938 (+20,757.79)
Xxxxxx X0 0XX 339,138 B Pref 339,138 (+12,055.66)
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
2. Xxxxx Xxxxxx 1,250,000 Ord 3,345,360.29 17.880
Xxx Xxxxxxx
Xxxxxxxxx Xxxx
Xxxxxxxxx
Xxxxxxxxxxx XX0 0XX
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
3. A C R Xxxxxx 188,462 B Pref 188,462 NIL
The Stables (+6,699.44)
Xxxxxx Xxxx
Xxxxxxx
Xxxxxx Xxxxxxxxxx
Xxxxxxxxxxxxxx
XX00 0XX
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
4. S C L Xxxxx 188,462 B Pref 188,462 NIL
The Laurels (+6,699.44)
Xxxxxxx Xxxxxx
Xxx Xxxx
Xxxxxxxx
Xxxxxxxxx XX0 0XX
------------------------------------------------------------------------------------------------------------------------------
PART II
------------------------------------------------------------------------------------------------------------------------------
Column 1 2 3 4
Names & Addresses of Number of Shares held Cash at Completion Joint Account
the Vendors from Purchaser (for %
Ord and Pref Ord) and
Redemption Money (for A
Pref and B Pref) from
Company L
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
5. Adicta Holding BV 538,460 Ord 1,441,074.15 7.705
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
6. Mysildo BV 538,460 Ord 1,441,074.15 7.705
------------------------------------------------------------------------------------------------------------------------------
7. Quadrangle Holding BV 538,460 Ord 1,441,074.15 7.705
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
8. Sandmountain BV 538,460 Ord 1,441,074.15 7.705
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
9. Xxxxxxxx Holding BV 538,460 Ord 1,441,074.15 7.705
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
10. Telope Holding BV 538,460 Ord 1,441,074.15 7.705
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
11. NatWest Ventures 2,100,920 Pref Ord 7,523,184.09 Nil
Nominees Limited 6,539,908 A Pref 6,539,908 (+232,480.29)
000 Xxxxxxxxxxx,
Xxxxxx XX0X 0XX
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
. 5,000,000 Ord 17,027,852.57 100
2,692,300 Pref Ord 9,200,517.43
8,380,770 A Pref 8,380,770 (+297,919.15)
1,300,000 B Pref 1,300,000 (+46,212.33)
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
PART III
------------------------------------------------------------------------------------------------------------------------------
Column 1 2 3 4
Names & Addresses of Number of Shares held Cash at Completion Joint Account
the Vendors from Purchaser (for %
Ord and Pref Ord)
and Redemption Money
(for A Pref and B Pref)
from Company L
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
12. X X Xxxxxx Nil Nil Nil
The Stables
Xxxxxx Xxxx
Xxxxxxx
Xxxxxx Xxxxxxxxxx
Xxxxxxxxxxxxxx
XX00 0XX
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
13. X X Xxxxx Nil Nil Nil
The Laurels
Walkers Acre
Xxx Xxxx
Xxxxxxxx
Xxxxxxxxx XX0 0XX
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
SCHEDULE 2
PARTICULARS RELATING TO THE COMPANY
Authorised 6,500,000 Ordinary shares of 10p each
share capital: 2,692,300 Preferred Ordinary shares of 10p each
8,380,770 A Preference shares of L1 each
1,300,000 B Preference shares of L1 each
Issued share 6,250,000 Ordinary shares of 10p each
capital: 2,692,300 Preferred Ordinary shares of 10p each
8,380,770 A Preference shares of L1 each
1,300,000 B Preference shares of L1 each
Directors: X X Xxxxxx
X X Xxxxxx
X X Xxxxx
X X Xxxxxxxx
C Xxxxxx
Secretary: X X Xxxxxx
Auditors: KPMG
Accounting reference date: 30 September
Registered Office: 00 Xx. Xxxxxx Xxxxxx
Xxxxxx XX0
SCHEDULE 3
PARTICULARS RELATING TO SUBSIDIARIES
Xxxxxx/Hunter Colorfactory Ltd Iceberg Marketing
------------- ---------------- -----------------
Holdings Ltd Ltd
------------ ---
Authorised share 5,000 Ordinary 100,000 Ordinary 2 Ordinary Shares
capital: Shares of L1 each Shares of L1 each of L1 each
US$1,000
comprising of
100,000 Bearer
Shares of
US$0.01 each
Issued share 4,629 Ordinary 100,000 Ordinary 2 Ordinary Shares
capital: Shares of L1 each Shares of L1 each of L1 each
92,580 Bearer
Shares of
US$0.01 each
Directors: X X Xxxxxx M C G Hunter M C G Hunter
X X Xxxxx X X Xxxxx X X Xxxxxx
M C G Hunter X X Xxxxxx X X Xxxxx
X X Xxxxxx
S Xxxxxx
Secretary: X X Xxxxxx X X Xxxxxx X X Xxxxxx
Auditors: KPMG Dormant KPMG
Accounting reference 30 September 30 September 30 September
date:
Registered Office: 00 Xxxxxxxxx Xxxxx 00 Xxxxxxxxx Xxxxx 00 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxxx Leicester Leicester
LE18 2FL LE18 2FL LE18 2FL
PARTICULARS RELATING TO SUBSIDIARIES (CONTINUED)
Colorgraphic Monitor Cobalt Customer
------------ ------- ---------------
(Leicester) Ltd Transactional Solutions Ltd
--------------- ------------- -------------
Mailing Ltd
-----------
Authorised share 400,000 Ordinary L100 Ordinary L100 Ordinary
capital: Shares of L1 each Shares of L1 each Shares of L1 each
Issued share 400,000 Ordinary 1 Ordinary Share 1 Ordinary Share
capital: Shares ofL1 each
Directors: X X Xxxxx X X Xxxxxx X X Xxxxxx
M C G Hunter X X Xxxxx X X Xxxxx
X X Xxxxxx X X Xxxxxx X X Xxxxxx
X X Xxxxxx
Secretary: X X Xxxxxx X X Xxxxxx X X Xxxxxx
Auditors: Pricewaterhouse Newly incorporated Newly incorporated
Coopers 29/6/98 21/7/98
Accounting reference 30 September Incorporated Incorporated
date: 29/6/98 26/6/98
Registered Office: 00 Xxxxxxxxx Xxxxx 00 Xxxxxxxxx Xxxxx 00 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxxx Leicester Leicester
LE18 2FL LE18 2FL XX00 0XX
SCHEDULE 4
FORM OF RESIGNATION
To: The Directors
Colorgraphic Direct Response Limited (the "COMPANY") and each of its
subsidiaries (the "GROUP") [and each of their respective directors
employees agents and advisers]
Date: - 1998
Gentlemen,
I hereby resign as Director and, if applicable, as Secretary, and if applicable,
as employee of the Company (and, if applicable, all other companies in the
Group) with effect from today. I confirm that, as at the date hereof, I have no
claims against the Company or any other company in the Group or any of you in
respect of any cause, matter or thing whatsoever but to the extent any such
claim exists I hereby irrevocably waive such claim and release the Company and
every other company in the Group and each of you from any liability or
obligation whatsoever in respect thereof.
EXECUTED as a DEED )
and DELIVERED by - )
in the presence of: )
----------------------------------
(Witness)
Name:
Address:
Occupation:
SCHEDULE 5
THE WARRANTIES
For the purpose of this schedule 5 Company means Colorgraphic Direct Response
Ltd and includes the Subsidiaries, all of them and each of them as the context
admits.
Any Warranty expressed to be given "to the best of the Vendors' or Warrantors
knowledge and belief" or "so far as the Vendors or Warrantors are aware" or
otherwise qualified by reference to the knowledge of the Vendors or Warrantors
shall be deemed to mean the knowledge, belief or awareness which the Warrantors
(i) actually have; or (ii) would have if they had made all reasonable enquiries.
In this schedule 5 the following words have the following meanings, unless the
context otherwise requires:
"ACCOUNTS" means the audited financial statements of the Group comprising the
consolidated balance sheet, profit and loss account and cash flow statement of
the Group together with the notes thereon, directors' report and auditors'
certificate, as at and for the financial period ended on the Accounts Date;
"ACTIVITIES" means any activity, operation or process carried out by the Company
at any property whether or not currently owned, occupied or used by the Company;
"CAA" means the Capital Xxxxxxxxxx Xxx 0000;
"COMPETENT AUTHORITY" means any person or legal entity (including any government
or government agency) having regulatory authority under Environmental Laws
and/or any court of law or tribunal;
"DISTRIBUTION" means a distribution as defined by sections 209 to 211
(inclusive) of the TA and section 418 of the TA;
"ENVIRONMENT" means any and all organisms (including without limitation man),
ecosystems, property and the following media: air, (including without
limitation, the air within buildings and the air within other natural or
man-made structures whether above or below ground); water (including without
limitation, water under or within land or in drains or sewers and coastal and
inland waters); and land (including without limitation, land under water);
"ENVIRONMENTAL LAWS" means all international, EU, national, federal, state or
local statutes, (which for the avoidance of doubt shall include the Producer
Responsibility Obligations (Packaging Waste) Regulations 1997, section 57 and
schedule 22 of the Environment Xxx 0000 and the guidance and regulations adopted
under those provisions, (save to the extent they impose materially more onerous
obligations and/or the definition of contaminated land is materially wider than
the draft guidance and regulations) by-laws, orders, regulations or other law or
subordinate legislation or common law, all orders, ordinances, decrees or
regulatory codes of practice, circulars, guidance notes and equivalent controls
concerning the protection of human health or which have as a purpose or effect
the protection or prevention of harm to the Environment or health and safety;
"ENVIRONMENTAL LIABILITY" means liability (including, without limitation,
liability in respect of Remedial Action) on the part of the Company under
Environmental Laws;
"ENVIRONMENTAL PERMIT" means any and all licences, consents, permits,
authorisations or similar, made or issued pursuant to or under, or required by,
Environmental Laws in relation to the carrying on by the Company of its
business;
"ERA" means the Employment Rights Xxx 0000;
"FORMER PROPERTY" means any and all land or property, other than the Properties,
owned, occupied or used at any time by the Company;
"HARM" OR "DAMAGE" in relation to the Environment mean harm or damage to health
of living organisms (which in the case of man includes offence caused to any of
his senses or harm to his property) or other interference with ecological
systems of which they form part;
"HAZARDOUS MATTER" means any natural or artificial substance (whether solid,
liquid, gas and whether alone or in combination with any other substance) which
is capable of causing harm to or have a deleterious effect on the Environment;
"ITA" means the Inheritance Tax Xxx 0000;
"REMEDIAL ACTION" means (i) preventing, limiting, removing, remedying, cleaning
up, abating, containing or ameliorating the presence or effect of any Hazardous
Matter in the Environment (including without limitation the Environment at the
Properties) or (ii) carrying out investigative and/or monitoring work and
obtaining legal and other professional advice as is reasonably required in
relation to (i);
"SUBSTANTIAL CUSTOMER" means a customer accounting for more than five per cent.
of the Group's sales in the
financial year ended on the Accounts Date;
"SUBSTANTIAL SUPPLIER" means a supplier accounting for more than five per cent.
of the Group's purchases in the financial year ended on the Accounts Date;
"TAX" OR "TAX" has the meaning ascribed to it in the Tax Deed;
"TAXATION AUTHORITY" means any local, municipal, governmental, state, federal or
fiscal, revenue, customs or excise authority, body, agency or official anywhere
in the world having power or authority in relation to Tax including the Inland
Revenue and HM Customs and Excise;
"TAXATION STATUTES" has the meaning ascribed to it in the Tax Deed;
"TCGA" means the Taxation of Chargeable Gains Xxx 0000;
"TMA" means the Taxes Management Xxx 0000;
"TRANSFER REGULATIONS" means the Transfer of Undertakings (Protection of
Employment) Regulations 1981;
"TULR(C)A" means the Trade Union and Labour Relations (Consolidation) Xxx 0000;
"VATA" means the Value Added Tax Xxx 0000 and "VAT LEGISLATION" means VATA and
all regulations and orders made thereunder;
"YEAR 2000 CONFORMITY" shall have the meaning set out in the document published
with reference number DISC PD2000-1 by the part of the British Standards
Institution called DISC entitled "A Definition of Year 2000 Conformity
Requirements". In construing the meaning of this definition, regard shall be had
to the Amplification of the Definition and Rules set out in the same document.
1. VENDORS' CAPACITY
1.1 AUTHORISATIONS
The Warrantors have obtained all corporate authorisations and all other
applicable governmental, statutory, regulatory or other consents, licences,
waivers or exemptions required to empower them to enter into and to perform the
obligations under this agreement and each document to be executed by them at or
before Completion.
1.2 PROPER EXECUTION
The Vendors' obligations under this agreement and each document to be executed
at or before Completion are or when the relevant document is executed, will be
enforceable in accordance with their terms.
2. THE COMPANY, THE SHARES AND THE SUBSIDIARIES
2.1 INCORPORATION AND EXISTENCE
The Company and each of the Subsidiaries are limited companies incorporated
under English law and have been in continuous existence since incorporation.
2.2 THE SHARES
(a) The Vendors are the only legal and beneficial owners of the Shares.
(b) The Company has not allotted any shares other than the Shares and
the Shares are fully paid or credited as fully paid.
(c) There is no Encumbrance in relation to any of the Shares or unissued
shares in the capital of the Company. No person has claimed to be
entitled to an Encumbrance in relation to any of the Shares and no
Group Company is under any obligation (whether actual or contingent)
to sell, charge or otherwise dispose of any of the Shares or any
interest therein to any person.
(d) Other than this agreement, there is no agreement, arrangement or
obligation requiring the creation, allotment, issue, sale, transfer,
redemption or repayment of, or the grant to a person of the right
(conditional or not) to require the allotment, issue, sale,
transfer, redemption or repayment of, a share in the capital of the
Company (including an option or right of pre-emption or conversion).
2.3 THE SUBSIDIARIES
(a) The Company does not have any subsidiary undertakings other than the
Subsidiaries. Each of the Subsidiaries is a wholly-owned subsidiary
of the Company (unless otherwise indicated in schedule 3) and each
of the shares of each such company has been properly allotted and
issued and is fully paid or credited as fully paid.
(b) There is no Encumbrance in relation to any of the shares or unissued
shares in the capital of any of the Subsidiaries. No person has
claimed to be entitled to an Encumbrance in relation to any of the
shares of any of the Subsidiaries and no Group Company is under any
obligation (whether actual or contingent) to sell, charge or
otherwise dispose of any shares in any of the Subsidiaries or any
interest therein to any person.
(c) Other than this agreement, there is no agreement, arrangement or
obligation requiring the creation, allotment, issue, sale, transfer,
redemption or repayment of, or the grant to a person of the right
(conditional or not) to require the allotment, issue, sale,
transfer, redemption or repayment of, a share in the capital of any
of the Subsidiaries (including an option or right of pre-emption or
conversion).
(d) The Company does not own any shares or stock in the capital of nor
does it have any beneficial or other interest in any company or
business organisation other than the Subsidiaries nor does the
Company control or take part in the management of any other company
or business organisation.
3. ACCOUNTS
3.1 GENERAL
(a) The Accounts show a true and fair view of the:-
(i) state of affairs at the Accounts Date; and
(ii) the profits and losses for the financial year ended on the
Accounts Date
of the Company (or of the Group to the extent that they are consolidated
accounts).
(b) The Accounts have been prepared and audited in accordance with the
standards, principles and practices specified on the face of the
Accounts applied on a consistent basis and subject thereto in
accordance with the law and applicable standards, principles and
practices generally accepted in the United Kingdom consistently
applied.
(c) The Accounts have been prepared on a basis consistent with the basis
upon which all audited accounts of the Company have been prepared in
respect of the three years before the Accounts Date.
3.2 LIABILITIES
The Accounts make full provision or reserve for or disclose all liabilities
(other than in respect of Tax) of the Company whether actual, contingent or
otherwise in accordance with generally accepted accounting principles and
practices used in the United Kingdom.
3.3 EXTRAORDINARY AND EXCEPTIONAL ITEMS
The results shown by the audited profit and loss account of the Company and the
consolidated audited profit and loss accounts of the Group for each of the three
financial years of the Company and the Group ended on the Accounts Date have not
(except as disclosed in those accounts) been affected by an extraordinary,
exceptional or non recurring item or by any other matter making the profits or
losses for a period covered by any of those accounts unusually high or low and
do not include any profit or loss on any transaction between any Vendor or any
Related Person or connected person of any Vendor on the one hand and the Company
on the other.
3.4 VALUATION OF STOCK
In the Accounts:-
(a) stock was valued in the same way as in the two preceding financial
years and on the basis of the lower of cost and net realisable
value; and
(b) all redundant and obsolete stock was written off and full provision
was made for all slow-moving and damaged stock.
3.5 DEPRECIATION
The object of the rates of depreciation and amortisation used in the audited
accounts of the Company and the Group for the three financial years of the
Company and the Group ended on the Accounts Date is to ensure that each fixed
asset of the Company will be written down to nil by the end of its useful life.
3.6 FIXED ASSETS
The value of all of the fixed assets of the Company as shown in the Accounts is
at cost thereof less depreciation deducted from time to time in a consistent
manner and there has been no revaluation of such fixed assets since their
acquisition.
3.7 OFF BALANCE SHEET FINANCING
No member of the Group is engaged in any financing (including the incurring of
any borrowing or any indebtedness in the nature of acceptances or acceptance
credits) of a type which would not be required to be shown or reflected in the
Accounts.
3.8 ACCOUNTING AND OTHER RECORDS
(a) The books of account and all other records of the Company (including
any which it may be obliged to produce under any contract now in
force) are up-to-date in all
material respects, in its possession and are correct in accordance
with the law and applicable standards, principles and practices
generally accepted in the United Kingdom in all material respects.
(b) All deeds and documents (properly stamped where stamping is
necessary for enforcement thereof) belonging to the Company or which
ought to be in the possession of the Company are in the possession
of the Company or under its control.
3.9 ACCOUNTING REFERENCE DATE
The accounting reference date of the Company under section 224 of the Companies
Xxx 0000 is, and during the last six years has always been, 30 September.
3.10 MANAGEMENT ACCOUNTS
The management accounts of the Group for the period from the Accounts Date to
November 1998 (a copy of which are annexed to the Disclosure Letter) have been
prepared on a basis consistent with the Accounts and are true and accurate in
all material respects and give a true and fair view of the state of affairs of
the Group as at such date and of the financial position and results of the Group
for the period from the Accounts Date to such date and comply with the terms of
Warranties 3.2-3.6 (inclusive) above.
3.11 CAPITAL EXPENDITURE
The Group has made capital expenditure in accordance with the items in the list
at document B20 annexed to the Disclosure Letter and such items have been fully
paid for and such payments are reflected in the Accounts.
3.12 BUSINESS PLAN
So far as the Vendors are aware, the Company's "Colorgraphic Business Plan
(issued October 1997 and updated April 1998)" and monthly budgets for years
ending 30 September 1999 and 2000 as annexed to the Disclosure Letter, have been
compiled after due and careful enquiry and on reasonable bases consistent with
the basis upon which the Accounts have been prepared and all assumptions on
which such projections are based, are reasonable assumptions and are disclosed
in such documents or in the Disclosure Letter.
4. CHANGES SINCE THE ACCOUNTS DATE
4.1 GENERAL
Since the Accounts Date:-
(a) the Company has carried on its business in the ordinary course and
so as to maintain the business as a going concern;
(b) there has been no material adverse change in the financial or
trading position or prospects of the Company; and
(c) there has been no material reduction in the value of those fixed
assets specified in the Accounts, to the extent still owned by the
Company other than reductions in value due to market conditions
generally.
4.2 SPECIFIC
Since the Accounts Date:-
(a) the Company has not, other than in the ordinary course of trading:-
(i) disposed of, or agreed to dispose of, an asset with a value in
excess of the budget provided to the Purchaser; or
(ii) assumed or incurred or paid, or agreed to assume or incur a
liability (actual or contingent) which is outside the ordinary
course of business;
and in the case of a disposal or agreement to dispose of an asset for an
amount which is lower than book value or an open market arm's length
value, whichever is the higher;
(b) the Company has not acquired or agreed to acquire an asset for an
amount which is higher than open market arm's length value;
(c) the Group has not made, or agreed to make or incurred, or agreed to
incur, a commitment or connected commitments involving capital
expenditure exceeding in total L250,000;
(d) no Substantial Supplier or Substantial Customer has ceased or
substantially reduced its trade with the Company or has altered the
terms of trade to the Company's disadvantage;
(e) the Company has not declared, paid or made a dividend or other
distribution (including a distribution within the meaning of the TA)
except to the extent provided in the Accounts;
(f) no resolution of the shareholders of the Company has been passed
(except for those representing the ordinary business of an annual
general meeting);
(g) the Company has not repaid or redeemed share or loan capital, or
made (whether or not subject to conditions) an agreement or
arrangement or undertaken an obligation to do any of those things;
(h) the Company has not paid nor is under an obligation to pay any
service, management or similar charges or any interest or amount in
the nature of interest to any other person or incurred any liability
to make such a payment or made any payment to any of the Vendors or
any of their connected persons whatsoever; and
(i) the Company has not incurred or paid any liability for any
financial, legal, accountancy, surveyors, valuers, environmental,
actuaries or other professional advisers fees.
5. ASSETS
5.1 TITLE AND CONDITION
(a) There are no Encumbrances, nor has the Company agreed to create any
Encumbrances, over any part of its undertaking or assets and each
asset used by the Company in the operation of its business (tangible
or intangible) is:-
(i) legally and beneficially owned by the Company; and
(ii) where capable of possession, in the possession of the Company.
(b) The Company owns each asset (tangible or intangible) necessary for
the operation of its business as currently conducted and without
limitation no rights (other than rights as shareholders in the
Company) relating to the business of the Company are owned or
otherwise enjoyed by or on behalf of any of the Vendors of any of
their connected persons.
(c) All plant, machinery, vehicles and equipment owned or used by the
Company are in good condition and working order having regard to age
and have been regularly and properly maintained. None is dangerous,
inefficient, out-of-date, unsuitable or in need of renewal or
replacement or surplus to the Company's requirements.
5.2 HIRE PURCHASE AND LEASED ASSETS
Copies of any xxxx of sale or any hiring or leasing agreement, hire purchase
agreement, credit or conditional sale agreement, agreement for payment on
deferred terms or any other similar agreement to which the Company is a party
are annexed to the Disclosure Letter.
5.3 STOCK
(a) The Company's stock is of satisfactory quality and saleable in the
usual course of its business in accordance with its current price
list.
(b) The Company has not supplied, or agreed to supply, goods which have
been, or will be, defective or which fail, or will fail, to comply
with their terms of sale.
(c) So far as the Vendors are aware no goods in a state ready for supply
by the Company are, or will be, defective or will fail to comply
with terms of sale similar to terms of sale on which similar goods
have previously been sold by the Company.
(d) The Company's level of stock is reasonable having regard to current
and anticipated demand.
(e) The Company has not acquired nor agreed to acquire any material part
of its stock on terms that the property therein does not pass until
full payment is made.
6. INTELLECTUAL PROPERTY
6.1 GENERAL
(a) Save for Intellectual Property licensed to the Company, the Company
does not use any registered Intellectual Property or Intellectual
Property for which a registration has been applied for in connection
with its business and no notice has been received by the Company or
the Vendors alleging that it is not the sole and absolute legal and
beneficial owner of all unregistered Intellectual Property used in
connection with its business.
(b) The Intellectual Property used by the Company in connection with its
business is free from Encumbrances and, in the case of confidential
information, any disclosure obligation and is so far as the Vendors
are aware subsisting, valid, exercisable and enforceable.
6.2 RENEWALS/MAINTENANCE
All registration and renewal fees have been paid in relation to the Intellectual
Property which is registered or applied for in the name of the Company. All
commercially reasonable steps have been taken for the prosecution and
maintenance of such Intellectual Property and all commercially reasonable steps
have been taken for the maintenance and protection of unregistered Intellectual
Property owned by the Company.
6.3 LICENCES
(a) So far as the Vendors are aware there has been no breach nor so far
as the Vendors are aware is there any fact or matter which would or
may create a material breach of any licences, agreements, consents
or undertakings whether currently in existence or being negotiated
necessary for the operation of the business as presently conducted
and neither the Company nor the Vendors nor any of their related
Related Persons is obliged to enter into any such agreement relating
to the business of the Company.
(b) The terms of all licences or rights granted to the Company or which
the Company or the Vendors or any of their Related Persons intends
to enter into for the purposes of the business of the Company or
which are being currently negotiated or other agreement or consents
or undertakings entered into by the Company or the Vendors or any of
their Related Persons relating to the Intellectual Property used in
the business of the Company are set out in the Disclosure Letter and
neither the Company nor the Vendors nor any of their Related Persons
is obliged to enter into any such agreement relating to the business
of the Company. There has been or is no breach nor is there any fact
or matter which would or may create a breach of such licences or
undertakings.
6.4 INFRINGEMENT
(a) So far as the Vendors are aware the use by the Company of any
Intellectual Property used in the business of the Company does not
and is not likely to infringe and the processes or methods employed,
services provided, the business conducted and the products used
manufactured and dealt in or supplied by the Company do not so far
as the Vendors are aware infringe the Intellectual Property of any
other person.
(b) So far as the Vendors are aware no proceedings claims or complaints
have been brought or so far as the Vendors are aware threatened by
any third party or competent authority in relation to the
Intellectual Property owned by or licensed to the Company including
any concerning title subsistence validity or enforceability or grant
of any right or interest in such Intellectual Property.
(c) So far as the Vendors are aware no third party is infringing or
misusing or threatening to infringe or misuse the Intellectual
Property owned by or licensed to the Company.
(d) The Company is not subject to any injunction, undertaking or court
order or order of any other authority of competent jurisdiction not
to use or restricting the use of any Intellectual Property.
6.5 CONFIDENTIAL AGREEMENTS
Save as disclosed, the Company has not and none of the Vendors nor any of their
Related Persons has entered into any confidentiality or other agreement or is
subject to any duty which restricts the free use or disclosure of any
information used in the business of the Company and so far as the Vendors are
aware there is no breach of any such agreement or duty.
7. EFFECT OF SALE
7.1 Neither the execution nor performance of this agreement or any document to
be executed at or before Completion will:-
(a) so far as the Vendors are aware result in the Company losing the
benefit of a Permit or an asset, licence, grant, subsidy, right or
privilege which it enjoys at the date of this agreement in any
jurisdiction; or
(b) conflict with, or result in a breach of, or give rise to an event of
default under, or require the consent of a person under, or enable a
person to terminate, or relieve a person from an obligation under,
an agreement, arrangement or obligation to which the Company is a
party or a legal or administrative requirement in any jurisdiction;
or
(c) so far as the Vendors are aware result in any Substantial Customer
being entitled to or, so far as the Vendors are aware, cease dealing
with the Company or substantially to reduce its existing level of
business or to materially change the terms upon which it deals with
the Company; or
(d) so far as the Vendors are aware result in any Substantial Supplier
being entitled to or, so far as the Vendors are aware, cease
supplying to the Company or substantially to reduce its supplies to
or to materially change the terms upon which it supplies the
Company;
(e) so far as the Vendors are aware and save as set out in this
agreement result in any officer or senior employee leaving the
Company; or
(f) make the Company liable to offer for sale, transfer or otherwise
dispose of or purchase or otherwise acquire any assets, including
shares held by it in other bodies corporate under their articles of
association or any agreement or arrangement.
8. CONSTITUTION
8.1 INTRA XXXXX
The Company has the power under its constitutional documents to carry on its
business as now conducted and the business of the Company has at all times been
carried on intra xxxxx.
8.2 MEMORANDUM AND ARTICLES
The memorandum and articles of association of the Company in the form annexed to
the Disclosure Letter are true and complete and have embodied therein or annexed
thereto copies of all resolutions and agreements as are referred to in section
380 of the Companies Xxx 0000, and all amendments thereto (if any) were duly and
properly made.
8.3 REGISTER OF MEMBERS
The register of members of the Company has been properly kept and contains true
and complete records of the members from time to time of the Company and the
Company has not received any notice or allegation that any of them is incorrect
or incomplete or should be rectified.
8.4 POWERS OF ATTORNEY
The Company has not executed any power of attorney or conferred on any person
other than its directors, officers and employees any authority to enter into any
transaction on behalf of or to bind the Company in any way and which power of
attorney remains in force or was granted or conferred within three years of the
Completion Date.
8.5 STATUTORY BOOKS AND FILINGS
(a) The statutory books of the Company are up to date, in its possession
and are complete in accordance with the law.
(b) All resolutions, annual returns and other documents required to be
delivered to the Registrar of Companies (or other relevant company
registry or other corporate authority in any jurisdiction) have been
properly prepared and filed.
9. INSURANCE
9.1 POLICIES
The Disclosure Letter contains a list of each current insurance and indemnity
policy in respect of which the Company has an interest (together the
"POLICIES"). Each of the Policies is valid and enforceable and is not void or
voidable. So far as the Vendors are aware there are no circumstances which might
make any of the Policies void or voidable or lead any claim under the Policies
to be avoided by the insurers.
9.2 INSURANCE OF ASSETS
The Company has at all material times insured against risks normally insured
against by a prudent person operating the types of business operated by the
Company.
9.3 CLAIMS
No claim is outstanding under any of the Policies and so far as the Vendors are
aware no matter exists which might give rise to a claim under any of the
Policies.
9.4 PREMIUMS
So far as the Vendors are aware the Company has not done or omitted to do
anything which might result in an increase in the premium payable under any of
the Policies.
10. CONTRACTUAL MATTERS
10.1 VALIDITY OF AGREEMENTS
(a) So far as the Vendors are aware there are no grounds for the
invalidity of, or termination, avoidance or repudiation of, an
agreement, arrangement or obligation with any Substantial Customer
or Substantial Supplier ("CONTRACT"). No party with whom the Company
has entered into any Contract has given notice of its intention to
terminate, or has sought to repudiate or disclaim, the Contract.
(b) So far as the Vendors are aware no party with whom the Company has
entered into an agreement or arrangement is in material breach of
the agreement or arrangement. So far as the Vendors are aware no
matter exists which might give rise to such breach.
(c) So far as the Vendors are aware the Company is not in breach of any
agreement or arrangement. So far as the Vendors are aware no matter
exists which might give rise to such breach.
10.2 STANDARD TERMS AND CONDITIONS
A copy of the standard terms and conditions of business of the Company are
annexed to the Disclosure Letter and the Company has not entered into an
agreement or arrangement with a customer or supplier on terms different from
these.
10.3 SUPPLY CONTRACTS
A summary of all material terms of all agreements or arrangements with an
individual supplier or customer for the supply of stock, raw materials, products
or goods to or by the Company which involve or are likely to involve the supply
of goods the aggregate sale value of which will represent in excess of five per
cent. of the turnover for the financial year of the Company ended on the
Accounts Date are contained in the Disclosure Letter and copies annexed to it.
10.4 MATERIAL AGREEMENTS
(a) The Company is not a party to and is not liable under any material
contract, transaction, arrangement or liability which:-
(i) is outside the ordinary course of business;
(ii) is of a long-term nature (that is, unlikely to have been fully
performed, in accordance with its terms, more than six months
after the date on which it was entered into or undertaken);
(iii) is incapable of termination in accordance with its terms, by
the Company, on 60 days' notice or less;
(iv) cannot readily be fulfilled or performed by the Company on
time without undue or unusual expenditure of money, effort or
personnel;
(v) involves payment by the Company by reference to fluctuations
in the index of retail prices, or any other index or in the
rate of exchange for any currency;
(vi) involves an aggregate outstanding expenditure or other
liability by the Group of more than L50,000; or
(vii) restricts its freedom to engage in any activity or business or
confines its activity or business to a particular place;
(b) The Company is not a party to and is not liable under:-
(i) an agreement, arrangement or obligation by which the Company
is a member of a joint venture, consortium, partnership or
association (other than a bona fide trade association); or
(ii) a distributorship, agency, marketing, licensing or management
agreement or arrangement.
10.5 CONTRACTS WITH CONNECTED PERSONS
There is, and during the three years ending on the date of this agreement there
has been, no agreement or arrangement (legally enforceable or not) to which the
Company or any employee of the Company is or was a party and in which any of the
Vendors, a director or former director of any member of the Group or of any of
the Vendors' Related Persons or a person connected with any of them is or was
interested in any way. Save for matters connected with the Service Agreements,
or otherwise arising out of the employment of Xx Xxxxxx, Xx Xxxxxx or Xx Xxxxx,
or matters or claims arising under the terms of this agreement or any agreement
referred to herein or contemplated hereby, the Company does not owe any
obligation or sum to nor does it and neither will it or any of its employees
immediately after Completion have any contractual or other arrangements of any
sort with the Vendors or any of their connected persons and since the Accounts
Date, save for ordinary course matters arising in connection with the holding of
any office in the Company employment matters or rights attaching to the Shares,
no payment or benefit has been made, given or received or agreed to be made
given or received (including, in particular, interest) between or for the
benefit of any of the Vendors or any of the Vendors' Related Persons or a person
connected with any of them on the one hand and the Company or any employee of
the Company on the other hand.
10.6 CONDITIONS AND WARRANTIES IN RESPECT OF GOODS OR SERVICES
Except for a condition or warranty implied by law or contained in its standard
terms of business or otherwise given in the usual course of trading, the Company
has not given a condition or warranty, or so far as the Vendors are aware made a
representation, in respect of goods or services supplied or agreed to be
supplied by it, or accepted an obligation that could give rise to a liability
after the goods or services have been supplied by it.
11. INFORMATION TECHNOLOGY
11.1 INFORMATION TECHNOLOGY
In the twelve months prior to the date hereof so far as the Vendors are aware
the Company has not suffered and so far as the Vendors are aware no other person
has suffered any failures or bugs in or breakdowns of any computer hardware or
software used in connection with the business of the Company which have caused
any substantial disruption or interruption in or to its use and the Vendors are
not aware of any fact or matter which may so disrupt or interrupt or affect the
use of such equipment as it is presently used.
11.2 So far as the Warrantors are aware all computer systems used in the
business of the Company or which the Company is committed to purchase do comply
with Year 2000 Conformity and for those systems which do not comply with Year
2000 Conformity, the Vendors are not aware of any matter which might prevent
such systems achieving Year 2000 Conformity by 1 January 1999.
11.3 So far as the Vendors are aware (no enquiries having been made outside the
Group) computer systems owned or used by any customers or suppliers of the
Company comply with Year 2000 Conformity and will not cease to do so.
11.4 None of the software or technical manuals used by the Company has been
copied wholly or substantially from any material in which the Company does not
own copyright. In particular, the Company does not use any of the material
described in clause 14.1 of the agreement dated 22 January 1996 between
Checkmate Management Limited and Colorgraphic (Leicester) Limited, and has not
used such material since the termination of that agreement.
11.5 All computer systems, excluding software, used in the business of the
Company are owned and operated by and are under the control of the Company and
are not wholly or partly dependent on any facilities which are not under the
ownership, operation or control of the Company. So far as the Vendors are aware,
no action will be necessary to enable such systems to continue to be used in the
business of the Company to the same extent and in the same manner as they have
been used prior to the date hereof.
11.6 The Company is validly licensed to use the software used in its
business and so far as the Vendors are aware no action will be necessary to
enable it to continue to use such software to the same extent and in the same
manner as they have been used prior to the date hereof.
12. LIABILITIES
12.1 BORROWINGS
The total amount borrowed by the Company from its bankers does not exceed the
limits of the applicable facilities and the total amount borrowed by the Company
from whatsoever source does not exceed any limitation on its borrowing contained
in its articles of association, or in any debenture or loan stock deed or other
instrument.
12.2 CONTINUANCE OF FACILITIES
Full and accurate details of all overdrafts, loans or other financial facilities
outstanding or available to the Company are set out in the Disclosure Letter and
whether or not of a type which would be required to be shown in or reflected in
the Accounts (including any indebtedness for moneys borrowed or raised under any
acceptance credit, bond, note, xxxx of exchange or commercial paper, finance
lease, hire purchase agreement, trade bills (other than those on terms normally
obtained) forward sale or purchase agreement or conditional sale agreement or
other transaction having the commercial effect of a borrowing). So far as the
Vendors are aware none of the Vendors' nor any of their Related Persons nor any
member of the Group has done anything whereby the continuance of any such
facilities in full force and effect might be affected or prejudiced.
12.3 BANK ACCOUNTS
A statement of all the bank accounts of the Company and of the credit or debit
balances on such accounts as at a date not more than seven days before the date
of this agreement has been supplied to the Purchaser. The Company does not have
any other bank or deposit accounts (whether in credit or overdrawn) not included
in such statement. Since such statement there have been no payments out of any
such accounts except for routine payments in the ordinary course of business and
the balances on current account are not now substantially different from the
balances shown on such statements.
12.4 GUARANTEES AND INDEMNITIES
(a) The Company is not a party to and is not liable (including
contingently) under a guarantee, indemnity or other agreement to
secure or incur a financial or other obligation with respect to
another person's obligation.
(b) No part of the loan capital, borrowing or indebtedness in the nature
of borrowing of the Company is dependent on the guarantee or
indemnity of, or security provided by, another person other than a
Group Company.
12.5 EVENTS OF DEFAULT
No event has occurred or is subsisting or been alleged or so far as the Vendors
are aware is likely to arise which:-
(a) constitutes an event of default, or otherwise gives rise to an
obligation to repay prior to stated maturity, or to give further
security under an agreement relating to
borrowing or indebtedness in the nature of borrowing (or will do so
with the giving of notice or lapse of time or both);
(b) will lead to an Encumbrance constituted or created in connection
with borrowing or indebtedness in the nature of borrowing, a
guarantee, an indemnity or other obligation of the Company becoming
enforceable (or will do so with the giving of notice or lapse of
time or both); or
(c) with the giving of notice and/or lapse of time constitute or result
in a default or the acceleration of any obligation under any
agreement or arrangement to which the Company is a party or by which
it or any of its properties, revenues or assets is bound.
12.6 GRANTS
The Company is not liable to repay an investment or other grant or subsidy made
to it by any person (including the Department of Trade and Industry or its
predecessor). No matter (including the execution and performance of this
agreement) exists which might entitle a body to require repayment of, or refuse
an application by the Company for, the whole or part of a grant or subsidy.
13. PERMITS
13.1 COMPLIANCE WITH PERMITS
So far as the Vendors are aware, the Company has obtained and complied in all
material respects with the terms and conditions of each Permit.
13.2 STATUS OF PERMITS
So far as the Vendors are aware there are no pending or threatened proceedings
which might in any way affect the validity of the Permits and the Vendors are
not aware of any other reason why any of them should be suspended, threatened or
revoked or be invalid.
14. INSOLVENCY
14.1 WINDING UP
No order has been made, petition presented or resolution passed for the winding
up of the Company or for the appointment of a provisional liquidator to the
Company.
14.2 ADMINISTRATION
No administration order has been made and no petition for an administration
order has been presented in respect of the Company.
14.3 RECEIVERSHIP
No receiver, receiver and manager or administrative receiver has been appointed
of the whole or part of the Company's business or assets.
14.4 COMPROMISES WITH CREDITORS
(a) No voluntary arrangement under section 1 of the Insolvency Xxx 0000
has been proposed or approved in respect of the Company.
(b) No compromise or arrangement under section 425 of the Companies Xxx
0000 has been proposed, agreed to or sanctioned in respect of the
Company.
(c) The Company has not entered into any compromise or arrangement with
its creditors or any class of its creditors generally.
14.5 INSOLVENCY
The Company is not unable to pay its debts within the meaning of section 123 of
the Insolvency Xxx 0000 (but for this purpose ignoring the reference to "if it
is proved to the satisfaction of the court that" in section 123(1)(e) and
123(2)).
14.6 PAYMENT OF DEBTS
The Company has not stopped paying its debts as they fall due.
14.7 DISTRESS ETC.
No distress, execution or other process has been levied on an asset of the
Company.
14.8 UNSATISFIED JUDGMENTS
There is no unsatisfied judgment or court order outstanding against the Company.
14.9 STRIKING OUT
No action is being taken by the Registrar of Companies to strike the Company off
the register under section 652 of the Companies Xxx 0000.
15. LITIGATION AND COMPLIANCE WITH LAW
15.1 LITIGATION
(a) Except for collection of debts in the ordinary course neither the
Company nor a person for whose acts or defaults the Company may be
vicariously liable is involved, or has during the three years ending
on the date of this agreement been involved, in a material civil,
criminal, arbitration, administrative or other proceeding in any
jurisdiction. No civil, criminal, arbitration, administrative or
other proceeding in any jurisdiction is pending or so far as the
Vendors are aware threatened by or against the Company or a person
for whose acts or defaults the Company may be vicariously liable.
(b) So far as the Vendors are aware, no matter exists which might give
rise to a civil, criminal, arbitration, administrative or other
proceeding in any jurisdiction involving
the Company or a person for whose acts or defaults the Company may
be vicariously liable.
(c) There is no outstanding judgment, order, decree, arbitral award or
decision of a court, tribunal, arbitrator or governmental agency in
any jurisdiction against the Company or a person for whose acts or
defaults the Company may be vicariously liable in relation to those
acts or defaults.
15.2 COMPLIANCE WITH LAW
So far as the Vendors are aware the Company has conducted its
business and dealt with its assets in all material respects in
accordance with all applicable legal and administrative requirements
in any jurisdiction.
15.3 INVESTIGATIONS
So far as the Vendors are aware the Company is not and has not been
subject to any investigation, enquiry or disciplinary proceeding
(whether judicial, quasi-judicial or otherwise) in any jurisdiction
and so far as the Vendors are aware none is pending or threatened,
and neither has it received any request for information from, any
court or governmental authority (including any national competition
authority and the Commission of the European Communities and the
EFTA Surveillance Authority) under any anti-trust or similar
legislation in any jurisdiction. So far as the Vendors are aware no
matter exists which might give rise to such an investigation,
enquiry, proceeding or request for information.
15.4 COMPETITION LAW
(a) So far as the Vendors are aware the Company is not nor has been a
party to or concerned in any agreement or arrangement, or conducted
itself (whether by omission or otherwise) in a manner, which:-
(i) could give rise to an investigation by the Office of Fair
Trading or the Monopolies and Mergers Commission under the
Fair Trading Xxx 0000;
(ii) has been or is required to be furnished to the Director
General of Fair Trading pursuant to the Restrictive Trade
Practices Acts 1976 and 1977;
(iii) contravenes the provisions of the Resale Prices Xxx 0000;
(iv) contravenes the provisions of the Trade Descriptions Acts 1968
and 1972;
(v) constitutes an anti-competitive practice within the meaning of
the Competition Xxx 0000;
(vi) constitutes a breach of any relevant undertaking, order,
assurance or other measure made under the Fair Trading Xxx
0000, the Restrictive Trade Practices Acts 1976 and 1977, the
Resale Prices Xxx 0000, the Trade Descriptions Acts 1968 and
1972, or the Competition Xxx 0000;
(vii) infringes Articles 85 and/or 86 of the Treaty of Rome or their
equivalent provisions under the European Economic Area
Agreement or any other anti-trust or similar legislation in
any jurisdiction; or
(viii) is registrable, unenforceable or void (whether in whole or in
part) or renders it liable to civil, criminal or
administrative proceedings by virtue of any anti-trust,
anti-monopoly, anti-cartel, consumer law or any other similar
legislation in any jurisdiction.
(b) The Company has not given an undertaking or written assurance
(whether legally binding or not) to any court or governmental
authority (including any national competition authority and the
Commission of the European Communities and the EFTA Surveillance
Authority) under any anti-trust or similar legislation in any
jurisdiction.
(c) The Company is not subject to an order, regulation or decision made
by any court or governmental authority (including any national
competition authority and the Commission of the European Communities
and the EFTA Surveillance Authority) under any anti-trust or similar
legislation in any jurisdiction.
(d) The Company is not and has not been a party to or concerned in any
agreement, arrangement or concerted practice in respect of which an
application for negative clearance and/or an exemption has been made
to the Commission of the European Communities or the EFTA
Surveillance Authority.
(e) The Company is not in a dominant position in a market in the
European Community or the European Economic Area, or a substantial
part of a market in the European Community or European Economic
Area, for the purposes of Article 86 of the Treaty of Rome and
Article 54 of the European Economic Area Agreement.
(f) The Company has never received, nor is expecting to receive any aid
(in whatever form) from a Member State of the European Communities
or from State resources such as could be regarded as State aid for
the purposes of Articles 92 to 94 of the Treaty of Rome.
15.5 UNLAWFUL PAYMENTS
So far as the Vendors are aware neither the Company nor a person for whose acts
or defaults the Company may be vicariously liable has:-
(a) induced a person to enter into an agreement or arrangement with the
Company by means of an unlawful or immoral payment, contribution,
gift or other inducement;
(b) offered or made an unlawful or immoral payment, contribution, gift
or other inducement to a government official or employee; or
(c) directly or indirectly made an unlawful contribution to a political
activity.
All references to the Company in this paragraph 15 should be deemed to include
the Company's officers, agents and employees.
16. BROKERAGE OR COMMISSIONS
No person is entitled to receive from the Company or any Vendor or Related
Person or a connected person of any of them, a finder's fee, brokerage or
commission or other benefit in connection with this agreement or anything in it
and in particular the Company is not liable to pay or give to any of its
directors, officers, employees, agents and advisers any sum or benefit
whatsoever in connection with the sale of the Shares and no such person has any
interest in such sale.
17. DIRECTORS AND EMPLOYEES
17.1 PARTICULARS OF OFFICERS
The particulars of all employees annexed to the Disclosure Letter show the
names, job title, date of commencement of employment, date of birth and period
of continuous employment (calculated in accordance with chapter 1 of part XIV of
the ERA) of every employee of the Company.
17.2 REMUNERATION AND BENEFITS
The particulars of all employees annexed to the Disclosure Letter show all
remuneration and other benefits:-
(a) actually provided; and
(b) which the Company is bound contractually to provide (whether now or
in the future)
to each officer and employee of the Company and are true and complete and
include particulars of and details of participation in all profit sharing,
incentive, bonus, commission, share option, medical, permanent health insurance,
directors' and officers' insurance, travel, car, redundancy and other benefit
schemes, arrangements and understandings (the "SCHEMES") operated for all or any
employees or former employees of the Company or their dependants whether legally
binding on the Company or not.
17.3 TERMS AND CONDITIONS
(a) The Disclosure Letter contains copies of all the standard terms and
conditions, staff handbooks and policies which apply to employees of
the Company and identifies which terms and conditions apply to which
employees.
(b) There are no terms and conditions in any contract with any director,
officer or employee of the Company pursuant to which such person
will be entitled to receive any payment or benefit or such person's
rights will change as a direct consequence of the transaction
contemplated by this agreement.
(c) There are no service agreements or contracts of employment between
the Company and any of its directors, officers or employees
containing any provision in addition to the matters required to be
contained therein under section 1 of the ERA.
(d) All employees of the Company have received a written statement of
particulars of their employment as required by section 1 of the ERA.
17.4 OPERATION OF THE SCHEMES
(a) The Schemes have at all times been operated in accordance with their
governing rules or terms and all applicable laws and all documents
which are required to be filed with any regulatory authority have
been so filed and all tax clearances and approvals necessary to
obtain favourable tax treatment for the Company and/or the
participants in the Schemes have been obtained and not withdrawn and
no act or omission has occurred which has or could prejudice any
such tax clearance and/or approval.
(b) No past or present director, officer, employee or any dependant
thereof or any other participant in any Scheme has made any claim
against the Company in respect of any Scheme and so far as the
Vendors are aware no event has occurred which could or might give
rise to any such claim.
17.5 NOTICE PERIODS
The terms of employment or engagement of all employees, agents, consultants and
professional advisers of the Company are such that their employment or
engagement may be terminated by not more than twelve weeks' notice given at any
time without liability for any payment including by way of compensation or
damages (except for unfair dismissal or a statutory redundancy payment).
17.6 CHANGES SINCE THE ACCOUNTS DATE
Since the Accounts Date the Company has not made, announced or proposed any
changes to the emoluments or benefits of or any bonus to any of its directors,
officers or employees and the Company is under no obligation to make any such
changes with or without retrospective operation.
17.7 LOANS
There are no amounts owing or agreed to be loaned or advanced by the Company to
any directors, officers and employees of the Company (other than amounts
representing remuneration accrued due for the current pay period, accrued
holiday pay for the current holiday year or for reimbursement of expenses).
17.8 NOTICE OF TERMINATION AND LEAVE OF ABSENCE
(a) In the twelve month period ending on the date of this Agreement, no
director, officer or senior or other key employee of the Company has
given or received notice to terminate his employment, and no
employee is currently under notice of dismissal or serving notice to
terminate his employment.
(b) There are no directors, officers or employees of the Company who are
on secondment, maternity leave or absent on grounds of disability or
other leave of absence (other than normal holidays or absence of no
more than one week due to illness).
17.9 PAYMENT UP TO COMPLETION
All salaries and wages and other benefits of all employees of the Company have,
to the extent due, been paid or discharged in full.
17.10 INDUSTRIAL RELATIONS
(a) No directors, officers or employees of the Company are members of a
trade union, staff association or any other body representing
workers and no such union, association or body is recognised by the
Company for the purposes of collective bargaining.
(b) The Disclosure Letter contains copies of and full details of all
rights and liabilities relating or pursuant to any collective
agreements (whether with a trade union, staff association or any
other body representing workers and whether legally binding or not)
concerning the Company.
(c) Within the three years preceding the date hereof the Company has not
been engaged or involved in any trade dispute (as defined in section
218 of the TULR(C)A) with any employee, trade union, staff
association or any other body representing workers and so far as the
Vendors are aware no event has occurred which could or might give
rise to any such dispute and no industrial action involving
employees of the Company, official or unofficial, is now occurring
or threatened nor has any industrial relations or employment matter
been referred either by the Company or its employees or by any trade
union staff association or any other body representing workers to
ACAS for advice, conciliation or arbitration.
17.11 CLAIMS BY EMPLOYEES
So far as the Vendors are aware no past or present director, officer or employee
of the Company or any predecessor in business has any claim or right of action
against the Company including any claim:-
(a) in respect of any accident or injury which is not fully covered by
insurance; or
(b) for breach of any contract of services or for services; or
(c) for loss of office or arising out of or connected with the
termination of his office or employment
and so far as the Vendors are aware no event or inaction has occurred which
could or might give rise to any such claim.
17.12 ENQUIRIES AND DISCRIMINATION
(a) So far as the Vendors are aware there are no enquiries or
investigations existing, pending or threatened affecting the Company
in relation to any directors, officers or employees by the Equal
Opportunities Commission, the Commission for Racial
Equality or the Health and Safety Executive or any other bodies with
similar functions or powers in relation to workers.
(b) There are no terms or conditions under which any director, officer
or employee of the Company is employed, nor so far as the Vendors
are aware has anything occurred or not occurred prior to Completion
that may give rise to any claim for sex discrimination, race
discrimination, disability discrimination or equal pay either under
domestic United Kingdom or European Law whether by such director,
officer or employee or a prospective director, officer or employee
or otherwise.
17.13 COMPLIANCE WITH LAWS
The Company has complied in all material respects with all relevant provisions
of the Treaty of Rome, EC Directives, statutes, regulations, codes of conduct,
collective agreements, terms and conditions of employment, orders, declarations
and awards relevant to the Company's directors, officers and employees or the
relations between the Company and any trade union, staff association or any
other body representing workers.
17.14 TRANSFER REGULATIONS
The Company has not entered into any agreement and so far as the Vendors are
aware no event has occurred which may involve the Company in the future
acquiring any undertaking or part of one such that the Transfer Regulations may
apply thereto.
17.15 DUTY TO INFORM AND CONSULT
The Vendors and the Company have complied with their obligations to inform and
consult with trade unions and other representatives of workers and to send
notices to the Secretary of State pursuant to sections 188 to 194 of the
TULR(C)A and regulations 10 and 11 of the Transfer Regulations.
17.16 RECORDS
The Company has maintained adequate records regarding the service of its
directors, officers and employees and such records comply with the requirements
of the Data Protection Xxx 0000.
17.17 BUSINESS IS CONDUCTED BY EMPLOYEES
The Company has not entered into any agreement or arrangement for the management
or operation of its business or any part thereof other than with its employees.
18. PROPERTIES
18.1 ALL PROPERTY
The Properties comprise all the freehold and leasehold land owned, used or
occupied by and all the rights vested in the Company.
18.2 NO OTHER LIABILITIES
The Company has no actual or contingent obligations or liabilities (in any
capacity including as principal contracting party or guarantor) in relation to
any lease, licence or other interest in, or agreement relating to, land apart
from the Properties.
18.3 TITLE DEEDS AND DOCUMENTS
The Company has under its control all title deeds and documents relating to the
Properties listed in the schedule of such documents referred to in the
Disclosure Letter.
18.4 NO OVERRIDING INTERESTS
So far as the Vendors are aware the Properties are not subject to any overriding
interests within the meaning of section 70 of the Land Registration Xxx 0000.
18.5 LEASEHOLD PROPERTIES
Each of the Properties which is leasehold is held under the lease brief details
of which are set out in schedule 7.
18.6 OCCUPATIONAL INTERESTS
The Company is in exclusive occupation of each and every part of the Properties.
18.7 REPLIES TO ENQUIRIES
So far as the Vendors are aware all disclosures and replies to enquiries and
requisitions relating to the Properties made or given by or on behalf of the
Vendors or the Company to the Purchaser or its solicitors are now and will at
Completion be complete and correct in all material respects.
18.8 NO LITIGATION
So far as the Vendors are aware the Company is not engaged in any litigation or
arbitration proceedings in connection with any of the Properties and has not
committed any offences in connection with the Properties. There is no cause of
action which has arisen or accrued or law suit or arbitration threatened or
pending against the Company in connection with the Properties and no
circumstances exist which are likely to give rise to any.
19. PENSIONS
19.1 PENSION ARRANGEMENTS DISCLOSED
Save in respect of the Colorgraphic (Leicester) Limited Retirement Benefits
Scheme (the "DISCLOSED SCHEME") no Group Company is under any obligation or
commitment, nor is it a party to any custom or practice, to pay, provide or
contribute towards any "RELEVANT BENEFITS" within the meaning of section 612 of
the TA (ignoring the exception therein) to or in respect of any person and has
not at any time participated in or contributed towards any scheme or arrangement
which has as its purpose or one of its purposes the provision of any such
benefits (other than schemes which have been fully wound up).
19.2 EX GRATIA PENSIONS ETC.
No Group Company has made or proposed, nor will before Completion make or
propose, any voluntary or ex gratia payments to any person in respect of any
relevant benefit (as defined in paragraph 19.1 of this schedule).
19.3 UNDERTAKINGS AND ASSURANCES
No explicit undertaking or assurance (whether legally binding or not) has been
given by the Company to any person as to the continuance, introduction, increase
or improvement of any such benefit or scheme or arrangement as is referred to in
paragraph 19.1 of this schedule (including, for the avoidance of doubt, the
Disclosed Scheme).
19.4 DISCLOSURE OF DOCUMENTS
Details of the Disclosed Scheme have been supplied to the Purchaser or its legal
advisers and in the form of:-
(a) all trust deeds, rules and other documents which have at any time
governed the Disclosed Scheme (including any which have now been
superseded or consolidated);
(b) a list of the Disclosed Scheme's active members, pensioners and
deferred pensioners;
(c) a statement of the basis on which the participating companies and the
members of the Disclosed Scheme contribute thereto
and copies of the above are annexed to the Disclosure Letter.
19.5 PAYMENT OF CONTRIBUTIONS
No contributions or premiums due in respect of the Disclosed Scheme by any
participating company or member of the Disclosed Scheme are unpaid.
19.6 EXEMPT APPROVAL
The Disclosed Scheme is in receipt of interim approval from the Pension Schemes
Office of the Inland Revenue and the Warrantors are not aware of any reason why
such interim approval might be withdrawn or cease to apply.
19.7 CONTRACTING OUT
No employee of any Group Company is in contracted-out employment by reference to
the Disclosed Scheme as defined in the Xxxxxxx Xxxxxxx Xxx 0000.
19.8 INSURANCE OF DEATH BENEFITS
All lump sum death benefits which may be payable under the Disclosed Scheme
(other than a refund of members' contributions with interest where appropriate)
are fully insured with an insurance company.
19.9 LEGAL COMPLIANCE
So far as the Warrantors are aware the Disclosed Scheme has at all times been
administered in accordance with the trusts powers and provisions of their
governing documentation and have been administered in accordance with and comply
with all applicable legislation and the general requirements of trust law and
(without limitation to the foregoing) the applicable provisions of Article 119
Treaty of Rome and the Pensions Xxx 0000.
19.10 NO CLAIMS OR LITIGATION
So far as the Warrantors are aware no claim has been made or threatened against
the trustees or administrator of the Disclosed Scheme or any company
participating therein (including any complaint to the Pensions Ombudsman) in
respect of any act, event, omission or other matter arising out of or in
connection with the Disclosed Scheme (other than routine claims for benefits)
and so far as the Warrantors are aware there are no circumstances which may give
rise to any such claim. No Group Company has given any indemnity to any person
in connection with the Disclosed Scheme.
19.11 MONEY PURCHASE BENEFITS ONLY
In addition to lump sum death in service benefits the Disclosed Scheme provides
only money purchase benefits (as defined in section 181 of the Pension Schemes
Act 1993) and no promise or assurance (oral or written) has been given to any
beneficiary that his or her benefits under that scheme (other than lump sum
death in service benefits) will be calculated by reference to any person's
remuneration or equate (approximately or exactly) to any particular amount.
19.12 FEES AND EXPENSES PAID
All actuarial, consultancy, legal and other fees and charges, and all taxation
and other expenses for which liability has arisen, in respect of the Disclosed
Scheme and whether payable by participating company or by the trustees thereof,
have been paid and no services have been rendered in respect of the Disclosed
Scheme in respect of which an account has not been rendered.
19.13 RECORDS PROPERLY MAINTAINED
So far as the Warrantors are aware the records of the Disclosed Scheme,
including without prejudice to the generality of the foregoing all books of
account and trustees' minutes, have been properly and accurately maintained and
all such records are in the
possession of or under the control of the trustees of the Disclosed Scheme.
Subject to written notification by the Purchaser to the Vendor prior to the date
which is six months after Completion, Xx Xxxxxx and Xx Xxxxx shall meet the
reasonable cost of remedying any default or inaccuracy in the records of the
Disclosed Scheme or the maintenance thereof.
19.14 SCHEME ASSETS
The trustees of each Disclosed Scheme have legal title to all the assets of that
scheme. None of the assets of the Disclosed Schemes constitute "employer-related
investments" for the purposes of section 40 of the Pensions Xxx 0000. There are
no encumbrances over any of the assets of the Disclosed Scheme and all such
assets are either held directly by the trustees of the schemes or by investment
managers (or their nominees) properly appointed by the trustees, and are not
subject to any stock lending arrangements.
19.15 REGULATORY MATTERS
No reports have been made to or fine or penalty has been levied by the
Occupational Pensions Regulatory Authority in relation to any Disclosed Scheme.
20. TAXATION
20.1 RETURNS
The Company has in all material respects made all returns and supplied all
information and given all notices to the Inland Revenue or other Taxation
Authority as required by law within any requisite period and all such returns
and information and notices are correct and accurate in all respects and so far
as the Vendors are aware are not the subject of any dispute and so far as the
Vendors are aware there are no facts or circumstances likely to give rise to or
be the subject of any such dispute.
20.2 CLEARANCES
No action has been taken by the Company in respect of which any consent or
clearance from the Inland Revenue or other Taxation Authority was required
except in circumstances where such consent or clearance was validly obtained and
where any conditions attaching thereto were met.
20.3 PAYMENT OF TAX BY INSTALMENTS
The Company has made no election or arrangement for the payment of Tax by
instalments under section 280 of the TCGA.
PROVISION FOR AND PAYMENT OF TAX
20.4 PAYMENT OF TAX
The Company has paid all Tax to the extent that the same ought to have been paid
and is not liable nor has it within three years prior to the date hereof been
liable to pay any penalty or interest in connection therewith.
20.5 PAY AS YOU EARN
The Company has in the last three years properly operated the PAYE system
deducting Tax as required by law from all payments to or treated as made to or
benefits provided for employees, ex-employees or independent contractors of the
Company (including any such payments within section 134 of the TA) and duly
accounted to the Inland Revenue for Tax so deducted and has complied with all
its reporting obligations to the Inland Revenue in connection with any such
payments made or benefits provided, and no PAYE audit in respect of the Company
has been made by the Inland Revenue within the last two years nor has the
Company been notified that any such audit will be made.
20.6 GIVE AS YOU EARN
Details of any payroll deduction scheme pursuant to section 202 of the TA
operated by the Company are set out in the Disclosure Letter and any such scheme
has been operated in accordance with that section and regulations made
thereunder.
20.7 SECONDARY LIABILITY
So far as the Vendors are aware no transaction or event has occurred in
consequence of which the Company is or may be held liable for any Tax or may be
held liable for or to indemnify any person in respect of any Tax, in either
case, where the Vendors are primarily liable for the Tax in question.
CORPORATION TAX
20.8 TRADING ASSETS
In the event that any asset shown in the Accounts as a fixed asset is disposed
of immediately following Completion the proceeds derived from such asset will
not be treated as a trading receipt for tax purposes.
20.9 DEDUCTIONS
Since the Accounts Date the Company has not made any payment of a revenue nature
exceeding (pound)5,000 or incurred any liability to make any payment (other than
payments of a similar nature and amount to those disclosed in the Company's
corporation tax computations for the
three accounting periods ending on the Accounts Date) which could be disallowed
as a deduction in computing the taxable profits of the Company or as a charge on
the Company's income.
20.10 SALES AT UNDERVALUE/OVERVALUE
So far as the Vendors are aware all transactions entered into by the Company
since the Account Date have been entered into on an arm's length basis and the
consideration (if any) charged or received or paid by the Company on all
transactions entered into by it has been equal to the consideration which might
have been expected to be charged, received or paid (as appropriate) between
independent persons dealing at arm's length and no notice or enquiry pursuant to
Schedule 28AA of the TA or the transfer pricing provisions of any arrangements
made under section 788 of the TA (relief by agreement with other countries) has
been made in connection with any of such transactions.
20.11 APPROPRIATIONS
So far as the Vendors are aware since the Accounts Date the Company has not
appropriated any of its assets to or from trading stock.
20.12 EXCHANGE GAINS AND LOSSES
The Company is not and has not since the Accounts Date been:-
(a) the holder of a qualifying asset;
(b) subject to a qualifying liability; or
(c) party to a currency contract
for the purposes of chapter II of part II of the FA 1993.
20.13 LOAN RELATIONSHIPS
(a) The Company is and has since the Accounts Date been taxed on an
authorised accruals basis of accounting in relation to all loan
relationships which are creditor relationships as defined in section
103 of the FA 1996 and in relation thereto:-
(i) the accruals on which the Company is taxable are computed only by
reference to interest;
(ii) if any such debt were to be repaid at its face value the Company
would not suffer any charge to Tax in excess of Tax on interest
accrued; and
(iii) there is no connection between the Company and the debtor as
mentioned in section 87 of the FA 1996.
(b) The Company obtains and has since the Accounts Date obtained tax
relief on an authorised accruals basis of accounting in relation to
all loan relationships which are
debtor relationships as mentioned in section 103 of the FA 1996 and in
relation to each such relationship:-
(i) the deduction given in computing the taxable profits of the
Company in consequence of that relationship is not less than the
interest accruing for the period concerned;
(ii) the Company would suffer no adverse tax consequences were such
debts to be repaid at face value except that the tax deduction
for interest accrued would cease.
(c) The Company has not since the Accounts Date held or been the debtor
under any deep discount securities as defined in paragraph 1 of
schedule 4 of the TA or any deep gain securities as defined in
paragraph 1 of schedule 11 of the FA 1989 or any relevant discounted
security as mentioned in schedule 13 of the FA 1996.
CAPITAL ASSETS
20.14 CAPITAL ALLOWANCES
So far as the Vendors are aware all necessary conditions for all capital
allowances (as defined in section 832(1) of the TA) claimed by the Company for
accounting periods ending on or after 30 September 1997 were at all material
times satisfied and remain satisfied and the Company has not since the Accounts
Date become liable for any balancing charge.
20.15 FINANCE LEASES
The Company is not and has not been the lessee under any finance leases of plant
or machinery.
DISTRIBUTIONS
20.16 REPAYMENTS OF SHARE CAPITAL
(a) So far as the Vendors are aware the Company has not in the last six
years repaid or agreed to repay or redeemed or agreed to redeem or
purchased or agreed to purchase (or made any contingent purchase
contract within the meaning of section 165 of the Companies Act 1985)
in respect of any of its issued share capital or any class thereof.
Further the Company has not after 6 April 1965 capitalised or agreed
to capitalise in the form of shares, debentures or other securities or
in paying up amounts unpaid on any shares, debentures or other
securities any profits or reserves of any class or description or
passed or agreed to be passed any resolution to do so.
(b) So far as the Vendors are aware the Company has not in the last six
years made (and will not be deemed to have made) any distribution
within the meaning of sections 209 and 210 (bonus issue following
repayment of capital) of the TA since 5 April 1965 except dividends
properly authorised and shown in its Accounts nor is the Company bound
to make any such distribution.
(c) So far as the Vendors area aware the Company has not been party to any
transaction involving an exempt distribution within section 213 of the
TA within the period commencing five years prior to the Accounts Date.
20.17 PAYMENTS TO BE TREATED AS DISTRIBUTIONS
The Company has not since the Accounts Date been subject to any debt or security
where the interest payable thereon fell or falls or could on its assignment fall
to be treated as a distribution for tax purposes.
CHARGEABLE GAINS
20.18 CLAIMS AND ELECTIONS
The Company has not made and is not subject to any claim or election under any
or all of the following:-
(a) section 35 of the TCGA;
(b) sections 152 and 153 of the TCGA; and
(c) section 175 of the TCGA.
20.19 RECONSTRUCTIONS
The Company has not been involved in any share for share exchange or any scheme
of reconstruction or amalgamation such as are mentioned in sections 135 and 136
of the TCGA or section 139 of the TCGA under which shares or debentures have
been or will be issued or assets have been or will be transferred.
ANTI-AVOIDANCE PROVISIONS
20.20 TAX SCHEMES
So far as the Vendors are aware, the Company has not entered into nor been a
party to nor otherwise involved in any marketed tax avoidance scheme other than
one recommended to it by its usual professional advisers.
20.21 TRANSACTIONS IN SECURITIES
So far as the Vendors are aware the Company has not in the last six years become
liable for Tax imposed by the operation of sections 703-709 of the TA (whether
alone or in conjunction with any other provisions of any Taxation Statutes
whatsoever).
20.22 TRANSACTIONS IN LAND
So far as the Vendors are aware the Company has not within the last six years
become liable for Tax imposed by or resulting from the operation of sections
776-778 of the TA (whether alone or in conjunction with any other provisions of
any Taxation Statutes whatsoever).
20.23 SALE AND LEASEBACK OF LAND
So far as the Vendors are aware the Company has not in the last six years
entered into any transaction as is mentioned in sections 34-37 or section 780 of
the TA.
FOREIGN ELEMENT
20.24 TREASURY CONSENTS
The Company has always been resident in the United Kingdom and has never been
resident in any other territory or treated as so resident for the purposes of
any double tax agreement and so far as the Vendors are aware the Company is not
liable for tax in any jurisdiction other than the United Kingdom.
20.25 COMPANY MIGRATION
Since 15 March 1988, no election has been made by the Company as the principal
company as defined in section 187 of the TCGA (postponement of charge on deemed
disposal of assets by company ceasing to be resident in the United Kingdom).
20.26 CONTROLLED FOREIGN COMPANIES
So far as the Vendors are aware the Company does not have an interest in a
controlled foreign company within the meaning of section 747 of the TA such that
all or any of the chargeable profits of the controlled foreign company have been
or will or may be apportioned to the Company.
20.27 GAINS OF NON-RESIDENT COMPANIES
So far as the Vendors are aware the Company does not have any interest in any
company, body of persons or unit trust scheme not resident in the UK where had
that entity been a company resident in the UK it would have been a close
company.
CLOSE COMPANY
20.28 CLOSE COMPANIES - TRANSFERS OF VALUE
The Company has not within the last six years made a transfer of value such as
is specified in section 94(1) (or section 99(2)) of the ITA.
20.29 CLOSE COMPANIES - LOANS TO PARTICIPATORS
The Company has no outstanding loan advance or payment or given any
consideration remaining outstanding falling within sections 419-420 or 422 of
the TA.
20.30 CLOSE COMPANIES - DISTRIBUTIONS
So far as the Vendors are aware the Company has made no payments in the last
three years and conferred no benefits falling to be treated as distributions
under section 418 of the TA.
20.31 CLOSE COMPANIES - SHORTFALL ETC.
The Company is not a close investment-holding company as defined at section 13A
of the TA.
GROUPS OF COMPANIES
20.32 GROUP RELIEF AND CONSORTIUM RELIEF
The Disclosure Letter contains particulars of all arrangements relating to
relief under sections 402-413 of the TA ("GROUP RELIEF") to which the Company is
or has been a party within the last three years.
20.33 ADVANCE CORPORATION TAX
The Disclosure Letter contains particulars of all arrangements for the surrender
under section 240 of the TA of any amount of advance corporation tax in the last
three years.
INHERITANCE TAX
20.34 INHERITANCE TAX
(a) So far as the Vendors are aware the Company is not, and will not
become, liable to be assessed to inheritance tax as donor or donee of
any gift or transferor or transferee of value (actual or deemed) nor
as a result of any disposition, chargeable transfer or transfer of
value (actual or deemed) made by or deemed to be made by any other
person in the last six years.
(b) So far as the Vendors are aware there is no unsatisfied liability to
inheritance tax attached or attributable to the Shares or any asset of
the Company and in consequence no person has the power to raise the
amount of such tax by sale or mortgage of or by a terminable charge on
any of the Shares or assets of the Company as mentioned in section 212
of the ITA and none of the Shares or assets of the Company are subject
to an Inland Revenue charge within section 237 of the ITA.
VALUE ADDED TAX
20.35 VALUE ADDED TAX
(a) The Company is a registered taxable person for the purpose of the VAT
legislation and no circumstances exist whereby the Company would or
might become liable for VAT as an agent or otherwise by virtue of
section 47 of the VATA.
(b) The Company has complied in all material respects with the
requirements and provisions of the VAT legislation and has made and
maintained and will pending Completion make and maintain materially
accurate and up to date records invoices accounts and other documents
required by or appropriate for the purposes of the VAT legislation.
(c) The Company has not made any exempt supplies in consequence of which
it is or will be unable to obtain credit for all input tax paid by it
during any VAT quarter ending after the Accounts Date.
20.36 CAPITAL GOODS SCHEME
There are set out in the Disclosure Letter with express reference to this
Warranty full details of each of the assets of the Company of a kind described
in part XV of the Value Added Tax Regulations 1995 (SI No 2518) (adjustments to
the deduction of input tax on capital items) in relation to which that part
could operate to adjust the amount of input tax deducted.
20.37 LEASES
So far as the Vendors are aware the Company has not at any time after 25
November 1996 granted any lease or entered into any agreement for any lease to
any lessee in circumstances where the lessee is either:-
(a) not registered for VAT; or
(b) carries on activities other than the making of taxable supplies for
the purposes of VATA 1994;
or on terms that:-
(c) permit the lessee to remain as lessee under the lease in circumstances
where that lessee would fall within either (a) or (b) above; or
(d) permit the lessee to assign the lease to any such person as would fall
within (a) or (b); or
(e) permit the lessee to grant a sub-lease to any such person as would
fall within (a) or (b); or
(f) permit the lessee to grant a sub-lease permitting any sub-lessee to
assign or further underlet to any such person as would fall within (a)
or (b);
(g) do not oblige the lessee to indemnify the Company in the event that
the Company is regarded as making exempt supplies of property as a
result of the lessee falling within (a) or (b) above; or
(h) do not oblige the lessee to inform the Company in the event that its
VAT recovery position is such that any supply of property made by the
Company could be regarded as exempt.
STAMP DUTY
20.38 STAMP DUTY
So far as the Vendors are aware all documents in the enforcement of which the
Company is or may be interested have been duly stamped and since the Accounts
Date the Company has not been a
party to any transaction whereby the Company was or is or could become liable to
stamp duty reserve tax.
DEFERRED TAX
20.39 The Accounts make full provision (as that term is defined in paragraph 8
of Part 1 of Statement of Standard Accounting Practice (SSAP) No. 15 "Accounting
for deferred tax") for all deferred tax liabilities of the Company.
21. ENVIRONMENT
21.1 The Company has conducted its business at all times in material compliance
with applicable Environmental Laws.
21.2 No circumstance exists which may result, to the detriment of the Company,
in breach, modification, suspension, or revocation of any Environmental Permit
or may result to the detriment of the Company in any such Environmental Permit
not being extended, renewed, granted or (where necessary) transferred.
21.3 No work or expenditure, including work and expenditure in respect of
upgrading plant or processes, is or so far as the Company is aware or may be
required under the conditions of any Environmental Permits or under any
Environmental Laws (whether or not actually enforced) in order for the Company
to carry on lawfully its business.
21.4 There are no events, states of affairs, conditions, circumstances,
Activities, practices, incidents, or actions (including without limitation the
generation, use, treatment, storage, transport, deposit, disposal, discharge or
management of Hazardous Matter) which have occurred or are occurring or have
been or are in existence at, in, or under the Properties or so far as the
Company is aware at, in or under the Former Property, or which are connected
with the conduct by the Company of its business which may give rise to
Environmental Liability.
21.5 There is no noise or odour nuisance arising from the Properties or
Activities carried on by the Company.
21.6 At no time has the Company had knowledge of and/or received any notice or
claim alleging any actual or potential Environmental Liability.
21.7 No warranties in any paragraph of this schedule 5, other than paragraph 21,
shall apply to any matter arising under Environmental Laws and/or the
Environment and/or Hazardous Matter.
22. INFORMATION
22.1 THE AGREEMENT AND THE DISCLOSURE LETTER
The information set out in schedules 1, 2, 3 and 7 of this agreement and in the
Disclosure Letter excluding paragraphs 1-15 and the Annexures) is true, accurate
and not misleading.
SCHEDULE 6
WARRANTORS' LIMITATIONS ON LIABILITY
23. TIME LIMIT FOR CLAIMS
Save in the case of any liability based upon fraud and including without
limitation fraudulent concealment by any of the Warrantors, the Warrantors shall
not be liable in respect of a claim under the Warranties unless written notice
of such claim setting out such details of the relevant claim as are known to the
Purchaser at the time of serving written notice is served upon the Vendors
Solicitors on behalf of the Warrantors:-
(a) in the case of a claim under the Warranties (other than the Warranties
relating to Tax and Year 2000 Conformity), by not later than 5.00 p.m.
on the date falling 18 months after Completion;
(b) in the case of a claim under the Warranties relating to Year 2000
Conformity by not later than 5.00 p.m. on 1 July 2001; and
(c) in the case of a claim under the Warranties relating to Tax by not
later than 5.00 p.m. on the day falling six years after the end of the
accounting period current at Completion.
24. LIMITATIONS ON AMOUNT
The Purchaser shall not be entitled in any event to damages in respect of any
claim under the Warranties unless and until the aggregate of the amount to which
the Purchaser is entitled in respect of such claims exceeds (pound)200,000
(excluding interest and costs) in which case the Purchaser shall be entitled to
recover the full amount of such claim and not merely the excess.
25. NOTIFICATION PROCEDURE/CONDUCT OF DISPUTES WITH THIRD PARTIES
25.1 If the Purchaser becomes aware of a matter which could give rise to a claim
under this Agreement whether for breach of Warranty, indemnity or otherwise, the
Purchaser shall as soon as reasonably practicable or in any event within 60 days
of it becoming aware thereof give notice to the Vendors' Solicitors in writing
of such claim stating in reasonable detail the nature of the claim and the
amount claimed (detailing to the extent then known the Purchaser's calculation
of the loss alleged to have been suffered by it). If the claim in question is as
a result of or in connection with a liability or alleged liability to a third
party:
(a) subject to paragraph 3.2, the Purchaser shall if requested in writing
by all the Warrantors (and shall procure that the Company shall) take
such action (provided that this will not prejudice the goodwill of the
business of any Group Company) and give such information and
assistance in connection with their respective affairs as the
Warrantors may reasonably request to avoid, dispute, resist, mitigate,
compromise, defend or appeal against any claim in respect thereof and
any adjudication with respect thereto (in the name of the Company if
the Warrantors so request) and to the extent it may lawfully do so
give the Warrantors and their professional advisers
reasonable access to the personnel of the Purchaser and the Company
and to any relevant premises, accounts, documents and records within
the power, possession or control of the Purchaser or Company to enable
the Warrantors and their professional advisers to examine such claims,
premises, accounts, documents and records and to take copies or
photographs thereof on the basis that:-
(i) The Warrantors shall jointly and severally indemnify the
Purchaser and the Group against the reasonable losses, costs and
expenses incurred or suffered as a result of compliance by the
Purchaser with any such request by the Warrantors to avoid,
dispute, resist, mitigate, compromise, defend or appeal such
third party claim or adjudication; and
(ii) any documents or information made available by the Purchaser or
the Company to the Warrantors or their advisers or agents shall
be kept strictly confidential by the Warrantors (except to the
extent that the Warrantors require to use such information or
documents to pursue any claim or to support any defence to any
claim or to seek any professional, expert or other appropriate
advice in connection therewith).
25.2 The Purchaser shall not (and it shall procure that the Company shall not)
accept or pay or compromise, or make any admission in respect of any such
liability or alleged liability to a third party without the prior written
consent of the Warrantors, which shall not be unreasonably withheld or delayed.
25.3 Where the Purchaser and/or the Company are at any time entitled to recover
from some other person any sum in respect of any matter giving rise to a claim
under the Warranties the Purchaser shall, and shall procure that the Company
shall, undertake at the written request of the Warrantors (and subject to the
Purchaser and the Group being indemnified by the Warrantors as provided in
3.1(a)(i) and provided that such recovery will not prejudice the goodwill of the
business of any Group Company) all reasonable steps to enforce such recovery
and, in the event that the Purchaser or the Company shall recover any amount
from such other person, the amount of the claim against the Warrantors shall be
reduced by the amount recovered, less all reasonable costs, charges and expenses
incurred by the Purchaser or the Group Company recovering that sum from such
other person and less any tax on such recovery.
25.4 If any Warrantor pays at any time to the Purchaser an amount pursuant to a
claim in respect of the Warranties and the Purchaser or the Company is or
becomes entitled to recover from some other person any sum in respect of any
matter giving rise to such claim, the Purchaser shall, and shall procure that
any Group Company shall at the written request of all the Warrantors (and
subject to the Purchaser and the Group being indemnified by the Warrantors as
provided in 3.1(a)(i)), assign the action to them, provided that this will not
prejudice the goodwill of the business of any Group Company; and shall forthwith
repay to the Warrantors (pro rata to the amounts paid by them) so much of the
amount paid by the Warrantors to the Purchaser as does not exceed the sum
recovered from such other person less all reasonable costs, charges and expenses
incurred by the Purchaser or the Group Company recovering that sum from such
other person and in obtaining that payment by the Warrantors and less any
applicable tax.
26. LOSS OTHERWISE COMPENSATED
26.1 The Warrantors shall not be liable for breach of any Warranties to the
extent that the subject of the claim has been or is made good without costs to
the Purchaser or the Group.
26.2 In calculating the liability of the Warrantors for any breach of the
Warranties there shall be taken into account the amount by which any taxation
for which the Purchaser or the Company is now or in the future accountable or
liable to be assessed is reduced, increased or extinguished as a result of the
matter giving rise to such liability or as a result of any receipt from the
Warrantors.
26.3 If, in respect of any matter which would give rise to a breach of the
Warranties, the Purchaser or the Company would have been entitled had there been
maintained in force such policies of insurance as were maintained by or on
behalf of the Company immediately prior to Completion or had policies providing
equivalent cover thereto been put in place and maintained ("Adequate Cover") to
claim under any policy of insurance, then the Warrantors liability under the
Warranties shall be reduced by the amount which would have been recovered had
Adequate Cover been maintained.
27. DISCLOSURE/PURCHASER'S KNOWLEDGE
The Warranties shall be qualified to the extent of any matter or thing fairly
disclosed in or by the Disclosure Letter or the documents annexed to the
Disclosure Letter.
28. GENERAL
Any payment made by the Warrantors in respect of a claim shall be deemed to
reduce the consideration payable for the Shares sold by them by the amount of
any such payment.
29. ACTS OF THE PURCHASER
29.1 No claim shall lie against the Warrantors under or in relation to the
Warranties to the extent that such claim is attributable to:-
(a) any voluntary act, omission, transaction or arrangement carried out by
the Purchaser or by a member of the Purchaser's Group on or after
Completion which could reasonably have been avoided and which the
Purchaser was aware could give rise to such a claim other than in the
ordinary course of business of such company as carried on at or prior
to Completion; or
(b) any admission of liability made in breach of the provisions of this
schedule after the date hereof by the Purchaser or on its behalf or by
persons deriving title from the Purchaser or by a member of the
Purchaser's Group on or after Completion.
29.2 The Warrantors shall not be liable for any breach of any Warranty which
would not have arisen but for any reorganisation or change in ownership of any
member of the Purchaser's Group after Completion or any accounting basis on
which any member of the Purchaser's Group values assets or any accounting policy
or practice of any member of the Purchaser's Group which is different from that
adopted or used in the preparation of the Accounts except
insofar as such a change was necessary because the basis, policy or practice was
not in accordance with any legal requirement, SSAPs, financial reporting
standards, Pronouncements of the Urgent issues Task Force UK Exposure Drafts or
generally accepted accounting practice in the United Kingdom in each case in
force at Completion.
30. THE ACCOUNTS
No matter shall be the subject of a claim under the Warranties to the extent
that an identifiable allowance, provision or reserve in respect of such matter
shall have been made in the Accounts or the Management Accounts or has been
included in calculating creditors or deducted in calculating debtors in the
Accounts or the Management Accounts or shall have been otherwise reflected in
the Accounts or the Management Accounts.
31. RETROSPECTIVE LEGISLATION
No liability shall arise in respect of any breach of any of the Warranties to
the extent that liability for such breach occurs or is increased directly or
indirectly as a result of any legislation not in force on or prior to the date
of this Agreement or as a result of the withdrawal of any extra-statutory
concession or other agreement or arrangement currently granted by or made with
any governmental authority or as a result of any change after the date of this
Agreement of any generally accepted interpretation or application of any
legislation.
SCHEDULE 7
THE PROPERTIES
The following leasehold properties demised by the leases brief details of which
are set out below:
00 XXXXXXXXX XXXXX, XXXXXXX, XXXXXXXXXXXXXX
-------------------------------------------
29.1.1996 Lease (1) Xxxxx & Company Ltd (2) Colorgraphic (Leicester) Ltd
0/0 XXXXXXXXX XXXXX, XXXXXXX, XXXXXXXXXXXXXX
--------------------------------------------
8.3.1993 Lease (1) X X Xxxxxx & Son (Developments) Ltd (2) Colographic
(Leicester) Ltd
XXXX 0 XXXXXXXXX XXXXX, XXXX XXXXXX, XXXXXXX, XXXXXXXXX
--------------------------------------------------------
18.3.1997 Lease (1) Culsom (UK) Ltd (2) Xxxxxx Enterprises (Midlands) Ltd (3)
Colorgraphic (Leicester) Ltd
UNITS 3, 4 AND 0 XXXXXXXXX XXXXX, XXXX XXXXXX, XXXXXXX, XXXXXXXXX
-----------------------------------------------------------------
18.3.1997 Lease (1) Culsom (UK) Ltd (2) Xxxxxx Enterprises (Midlands) Ltd (3)
Colorgraphic (Leicester) Ltd
XXXX 0, XXXXXX 00, XXXXXXXXX XXXX, XXXXXX XXXX, COALVILLE, LEICESTERSHIRE
-------------------------------------------------------------------------
16.3.1998 Lease (1) Bardon 22 Ltd (2) Colorgraphic (Leicester) Ltd (3)
Colorgraphic Direct Response Ltd
GROUND FLOOR OFFICE, THE TOOL SHED, XXXX 0X, XXXX XXXX, XXXXXXXX XXXX,
XXXXXXXXXXX, XXXXXXXXX, XXXXXXXXXXXXXXXX
----------------------------------------
16.4.1998 Lease (1) Indexkey Ltd (2) 3H (Properties) Ltd
XXXXX XXXXX, XXXX X, XXXXXXXXX, XXXXXXX XXXX, XXXXXXXXXXX
---------------------------------------------------------
14.12.98 Underlease (1) Eagle Star Life Assurance Co Ltd (2) Colorgraphic
(Leicester) Ltd
XXXX 00, XXXXXXXX XXXX, XXXXXXXX XXXXXX, XXXXXXXXX
--------------------------------------------------
15.7.1998 Lease (1) Bilton (Factory Holdings) Ltd (2) Colorgraphic (Leicester)
Ltd
SCHEDULE 8
ACTION PENDING COMPLETION
Each Group Company shall (unless otherwise agreed in writing by the Purchaser):-
1. not create, allot, issue, acquire, reduce, repay or redeem any share or loan
capital or agree, arrange or undertake to do any of those things, or acquire or
agree to acquire an interest in an undertaking (as defined by section 258 of the
Companies Act 1985);
2. operate its business in the usual way so as to maintain that business as a
going concern;
3. not acquire or dispose of, or agree to acquire or dispose of, an asset except
in the usual course of its trade or assume or incur, or agree to assume or
incur, a liability, obligation or expense (actual or contingent) except in the
usual course of its trade;
4. not make, or agree to make, capital expenditure except as set out in the
Business Plan as described in warranty 3.12 of Schedule 5;
5. not declare, pay or make a dividend or distribution;
6. not pass a shareholders' resolution;
7. not create, or agree to create, an Encumbrance over an asset or redeem, or
agree to redeem, an existing Encumbrance over an asset;
8. continue each Policy (as defined in paragraph 9.1 of schedule 5) and not do
or omit to do anything which would make a Policy void or voidable or might
result in an increase in the premium payable under a Policy or prejudice the
ability to effect equivalent insurance in the future;
9. in relation to each of the Properties:-
9.1 not apply for a Permit or implement a Permit already obtained but not
implemented;
9.2 not change its existing use;
9.3 not terminate, or give a notice to terminate, a lease, tenancy or licence;
9.4 not apply for consent to do something requiring consent under a lease,
tenancy or licence;
9.5 not grant or refuse an application by a tenant, licensee or occupier to do
something requiring its consent under a lease, tenancy or licence;
9.6 not agree a new rent or fee payable under a lease, tenancy or licence;
10. not enter into a long-term, onerous or unusual agreement, arrangement or
obligation (including an agreement, arrangement or obligation of the type
referred to in paragraph 11.6 of schedule 5);
11. not amend or terminate an agreement, arrangement or obligation to which it
is a party;
12. not amend the terms of employment or engagement of a director, other officer
or employee (except in the usual course of its business) or provide, or agree to
provide, a gratuitous payment or benefit to a director, officer or employee (or
any of their dependants) or employ, engage, or terminate the employment or
engagement of, a person;
13. except in the case of payments made under finance instruments disclosed in
the disclosure bundle in accordance with their terms not amend, or agree to
amend, the terms of its borrowing or indebtedness in the nature of borrowing or
create, incur, or agree to create or incur, borrowing or indebtedness in the
nature of borrowing;
14. not give, or agree to give, a guarantee, indemnity or other agreement to
secure, or incur financial or other obligations with respect to, another
person's obligation;
15. not amend or discontinue (wholly or partly) a Disclosed Scheme (as defined
in paragraph 19 of schedule5) or plan, propose or intend to amend, discontinue
(wholly or partly), or exercise a discretion in relation to a Disclosed Scheme;
16. not start litigation or arbitration proceedings;
17. except in the usual course of its trade, not compromise, settle, release,
discharge or compound litigation or arbitration proceedings or a liability,
claim, action, demand or dispute, or waive a right in relation to litigation or
arbitration proceedings;
18. conduct its business in all material respects in accordance with all
applicable legal and administrative requirements in any jurisdiction;
19. not enter into an agreement, arrangement or obligation (legally enforceable
or not) in which any of the Vendors, Warrantors, a Group Company, a director or
former director of a Group Company or a person connected with any of them is
interested;
20. not make a payment out of a bank account except where the payment is in the
usual course of its trade; and
21. keep proper records and make therein true and complete entries of all its
dealings and transactions;
22. co-operate with the Purchaser to:-
22.1 ensure the efficient continuation of management of the Group after
Completion; and
22.2 prepare for the introduction of the Purchaser's normal working procedures
in readiness for Completion.
Executed as a deed by XXXXXXX )
XXXXXX XXXX HUNTER )
Executed as a deed by CLIVE )
XXXXXX )
Executed as a deed by A C R )
TAYLO )
Executed as a deed by S C L XXXXX )
Executed as a deed by R XXXXXX )
Executed as a deed by )
ADICTA HOLDING BV )
Executed as a deed by )
MYSILDO BV )
Executed as a deed by )
QUADRANGLE HOLDING BV )
Executed as a deed by )
SANDMOUNTAIN BV )
Executed as a deed by )
N XXXXX )
Executed as a deed by )
XXXXXXXX HOLDING BV )
Executed as a deed by )
TELOPE HOLDING BV )
Executed as a deed by )
COLORGRAPHIC DIRECT )
RESPONSE LIMITED )
Executed as a deed by )
BIG FLOWER LIMITED )
Executed as a deed by )
NATWEST VENTURE )
NOMINEES LIMITED )
