Exhibit 2.1
DATED 29th April 1999
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AGREEMENT
for the sale and purchase of the
share capital of
TVP Group Plc
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l-g
190 Strand
London WC2R 1JN
Tel: 0171 379 0000
Fax: 0171 379 6854
2
Ref: TJC
DATED: 29th April
99
PARTIES:
1. "Vendors": the persons whose names and addresses are set out in Column 1 of
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Schedule 1;
2. "Minority Vendors" the persons whose names and addresses are set out in
Column 2 of Schedule 1;
3. "Purchaser": Four Media Company (UK) Limited (registered in England under
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no. 3755028) whose registered office is at 190 Strand, London WC2R 1JN
OPERATIVE PROVISIONS
1. DEFINITIONS
1.1 In this agreement, including the Schedules other than Schedule 4, the
following words and expressions have the meanings stated, unless they are
inconsistent with the context:
"Agreed Form" a form agreed between the parties, a copy of which has
been initialled for the purpose of identification
by their respective solicitors.
"Associate" (a) (in relation to an individual):
(i) any relative, that is any issue,
spouse, brother, sister or parent;
(ii) any company which is, or may be,
directly or indirectly controlled
(within the meaning given in ICTA s840)
by the individual or
4 any relative, or by a any two or more
of them;
(b) (in relation to a company) any Subsidiary or
holding company of the company, and any other
Subsidiary of any holding company of the company,
"holding company" having the same meaning as in
CA s736;
or this purpose a company is controlled by one or
more persons if he or they exercise more than
fifty per cent of the voting rights in it.
"Business" the business of the Group being video editing and
distribution facilities for the broadcast,
commercial, corporate and entertainment industry.
"CA" Companies Act 1985.
"CAA" Capital Allowances Act 1990.
"Companies Acts" CA, the former Companies Acts (within the meaning of CA
S735iii) and the Companies Act 1989.
"Company" TVP Group Plc incorporated in England and Wales under number
2448588 whose registered office is at Lynton
House, 7-2 Tavistock Square, London WC1H 9LT.
"Company's Auditors" Morley & Scott, Lynton House, 7-12 Tavistock
Square, London WC1 H 9LT,.
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"Completion" completion of the purchase of the Shares in accordance with
clause 7.
"Completion Date" the date of this Agreement.
"Consideration" the aggregate of the Initial Consideration and the
Deferred Consideration.
" Debt" the aggregate amount owed by the Group Companies at the date of
Completion as set out in Appendix 1 in the Agreed
Form.
"Deed of Indemnity" a deed in the form set out in Schedule 4.
"Deferred Consideration" the conditional consideration of up to
(Pounds)500,000 as provided in clause 3.6.
"Disclosure Letter" the disclosure letter, of today's date, from the
Vendors to the Purchaser.
"Earn-Out Target" an EBITDA of (Pounds)1,596,475 for the 12 month period
commencing on the Completion Date subject to
alteration as reasonably agreed between the
parties in the event of a Third Party Acquisition.
"EBITDA" earnings before interest, taxes, depreciation and amortisation
of the Company as reasonably determined by the
parties or in the event of any dispute by the
Company's accountants.
"Encumbrance" any mortgage, charge (whether fixed or floating), pledge,
lien, option, right of pre-emption, right of
retention of title or any other form of security
interest or any obligation (including any
conditional obligation)
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to create any of the same.
"Escrow Account" an account to be opened in the joint name of the
Purchaser's solicitors and Vendor's solicitors for
the benefit of the parties hereto by the Escrow
Agent subject to the provisions of clause 3.6 of
this Agreement.
"Escrow Agent" Lawrence Graham and Harris Segal jointly.
"Escrow Amount" the amount of Deferred Consideration paid into the
Escrow Account (if any) in accordance with clause
3.6 of this Agreement.
"Escrow Instructions" the instructions to the Escrow Agent in the Agreed
Form.
"FA" Finance Act.
"FRS" a financial reporting standard issued or adopted by The Accounting
Standards Board Limited.
"Group Companies or Group" the Company and its Subsidiaries.
"Guarantee" the deed of guarantee from Four Media Company, a Delaware
Corporation to the Vendors in the Agreed Form.
"Guarantor" Four Media Company, a Delaware Corporation.
"ICTA" Income and Corporation Taxes Act 1988.
"Initial Consideration" (Pounds)5,500,000 payable in accordance with
clause 3.1 and 3.3.
"Intellectual Property Rights" a patent, patent application, know-how,
trade or service mark (whether registered or
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unregistered), trade or service mark application,
trade name and logo, registered design, design
right, copyright or other similar intellectual,
industrial or commercial right.
"IHTA" Inheritance Tax Act 1984.
"Last Accounts" the audited balance sheet, as at the Last Accounts Date,
and audited profit and loss account for the year
ended on the Last Accounts Date of each Group
Company, including in the case of the Company the
audited consolidated balance sheet as at that date
and the audited consolidated profit and loss
account for that year, and the directors' report
and notes.
"Last Accounts Date" 31 December 1998 (being the date to which the Last
Accounts were prepared).
"Planning Acts" as defined in the Town and Country Planning Act 1990,
s.336.
"Properties" the properties of the Group Companies shortly described in
Schedule 5.
"Purchaser's Accountants" PricewaterhouseCoopers of 1 Embankment Place,
London.
"Purchaser's Group" the Purchaser, its subsidiaries and subsidiary
undertakings, any holding company of the Purchaser
and all other subsidiaries of any such holding
company.
"Purchaser's Solicitors" Lawrence Graham of 190 Strand, London WC2R 1JN.
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"Shares" the 1,050,000 issued ordinary shares of (Pounds)1 each of the
Company.
"Subsidiary" a subsidiary as defined in CA s736.
"Taxation" the same meaning as in the Deed of Indemnity.
"Third Party Acquisition" means an acquisition by the Purchaser or a
member of the Purchaser's Group of a business,
firm or company in the United Kingdom which
carries on a business which is similar to the
Business.
"TCGA" Taxation of Chargeable Gains Act 1992
"TMA" Taxes Management Act 1970.
"VATA" Value Added Tax Act 1994.
"Vendors' Accountants" Morley & Scott, Lynton House, 7-12 Tavistock
Square, London WC1H 9LT.
"Vendors' Solicitors" Harris Segal of Lynton House, 7-12 Tavistock
Square, London WC1H 9LT
"Warranties" the agreements, obligations, warranties, representations
and undertakings of the Vendors contained in this
agreement including the warranties set out in
Schedule 3.
"Warranty Claim" a claim made by the Purchaser in writing for breach of
any of the Warranties or a claim made by the
Purchaser or a Group Company under the Deed of
Indemnity.
1.2 Unless it is inconsistent with the context a reference to a statutory
provision includes a reference to:
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1.2.1 (any statutory amendment, modification, consolidation or re-
enactment (whether before or after the date of this agreement);
1.2.2 any statutory instruments or subordinate legislation or orders
made pursuant to the statutory provision;
1.2.3 statutory provisions of which the statutory provision is an
amendment, modification, consolidation or re-enactment;
but does not include a substituted provision.
1.3 A reference to the Vendors includes, where appropriate, their personal
representatives.
1.4 A reference to an SSAP is a reference to a statement of standard accounting
practice adopted by The Accounting Standards Board Limited.
1.5 Words denoting the singular include the plural and vice versa; words
denoting one gender include all genders; words denoting persons include
corporations and vice versa.
1.6 Unless otherwise stated, a reference to a clause, sub-clause or Schedule is
a reference to a clause or sub-clause of, or Schedule to, this agreement.
1.7 Clause headings in this agreement and in the Schedules are for ease of
reference only and do not affect the construction of any provision.
1.8 Where clauses or paragraphs in this Agreement and the Schedules contain the
expression "so far as the Vendors are aware" or "to the best of the
Vendors' knowledge" or a phrase having a similar meaning or effect, they
shall be deemed to be followed by the words "having made due and careful
enquiry in every case".
2. AGREEMENT FOR SALE
2.1 Subject to the terms and conditions of this agreement, the Vendors and the
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Minority Vendors shall sell with full title guarantee and the Purchaser
shall purchase the Shares free from all claims or Encumbrances with all
rights attaching to them, with effect from the date of this agreement.
2.2 The Vendors and the Minority Vendors waive any pre-emption rights they may
have in relation to any of the Shares, whether under the articles of
association of the Company or otherwise.
3. purchase consideration
3.1 The Initial Consideration for the Shares shall be paid in cash to the
Vendors or as they shall direct at Completion in accordance with clause
4.7.
3.2 The sum of (Pounds)1 shall be paid into the Escrow Account at Completion in
accordance with clause 4.6.
3.3 Subject to clause 3.5 and 3.6 below the Purchaser shall pay the Deferred
Consideration into the Escrow Account.
3.4 The Vendors shall receive the Consideration in proportion to their holdings
of the Shares.
3.5 If, prior to settlement of any part of the Deferred Consideration, the
Purchaser makes a Warranty Claim, it may set off the aggregate amount
claimed against the Deferred Consideration. A set-off in or towards
satisfaction of a claim made by the Purchaser shall not prejudice or affect
any other rights or remedies for the purpose of recovering any amount due
to it from the Vendors.
3.6 Subject to Completion, the Deferred Consideration shall be payable by the
Purchaser into the Escrow Account as follows:
3.6.1 In the event of the Purchaser or a member of the Purchaser's Group
acquiring a Third Party Acquisition prior to the expiry of the 12
month period from completion the Purchaser shall forthwith pay
(Pounds)250,000 into
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the Escrow Account as part of the Deferred Consideration on
completion of such Third Party Acquisition.
3.6.2 The Purchaser shall pay the balance of the Deferred Consideration
taking into account of the payment, if any, referred to in clause
3.6.1 above, and conditional upon the Company achieving in the 12
month period after Completion the Earn Out Target as soon as
practicable after such 12 month period into the Escrow Account
provided that the Company may at its absolute discretion (and for
the avoidance of doubt the Vendors hereby acknowledge that the
Purchaser has no legal obligation whatsoever so to do if the Earn
Out Target is not achieved in accordance with this clause) pay a
part or all of the Deferred Considation into the Escrow Account if
the Earn Out Target is not achieved.
3.6.3 Subject to sub-clauses 3.6.4 and 3.6.5 below, in the event that
the Deferred Consideration is paid by the Purchaser pursuant to
the provisions of sub-clauses 3.6.1 and 3.6.2 above the Purchaser
undertakes to procure that the Escrow Agents shall pay to the
Vendor the Escrow Amount and any interest accrued thereon (less
any tax that may be deducted therefrom) to the Vendor on the date
being 24 months after the Completion Date.
3.6.4 In the event of a Warranty Claim being made against the Vendors
within 24 months of the date of Completion an amount which is
equivalent to the value of such claim (together with such further
reasonable sum to cover costs estimated by the Purchaser to be
properly incurred in relation to such claim and the interest which
may accrue upon such retention) shall be retained in the Escrow
Account until such claim is settled or lapses in accordance with
the provisions of clause 5.8.
3.6.5 If an amount becomes payable by the Vendors in respect of a
Warranty Claim which has not been fully satisfied by the Vendors
the Escrow
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Agents shall pay the Purchaser the amount of such claim or the
outstanding balance from the Escrow Account together with any
interest which has arisen on such balance.
3.6.6 Sub-Clauses 3.6.4 and 3.6.5 shall not prejudice or affect any
other rights or remedies of the Purchaser for the purpose of
recovering any amount due to it from the Vendors.
4. completion
4.1 Completion shall take place at the offices of the Vendor's Solicitors
immediately following execution of this agreement when, subject to clause
4.7, all the transactions mentioned in sub-clauses 4.2 to 4.5 shall take
place.
4.2 The Vendors shall deliver to the Purchaser:
4.2.1 duly completed and signed transfers in favour of the Purchaser, or
as it directs of the Shares, together with the relative share
certificates;
4.2.2 duly completed and signed transfers in favour of the Purchaser, or
as it directs, of all shares of the Subsidiaries of the Company
not registered in the name of a Group Company, together with the
relative share certificates;
4.2.3 the Deed of Indemnity duly executed by the Vendors;
4.2.4 the resignations of those directors notified by the Purchaser to
the Vendors and the secretary from their respective offices in
each Group Company, with a written acknowledgement from each of
them, executed as a deed in such form as the Purchaser requires,
that he has no claim against the Group Companies in respect of
breach of contract, compensation for loss of office, redundancy or
unfair dismissal or on any other grounds;
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4.2.5 the resignation of the auditors of each Group Company confirming
that they have no outstanding claims and containing a statement
under CA s394 (1) that there are no such circumstances as are
mentioned in that section;
4.2.6 if the Purchaser so requires, a power of attorney executed by each
of the Vendors in favour of the Purchaser empowering the Purchaser
to exercise the Vendors' rights as shareholders of the Company
pending the stamping and registration of the transfers referred to
in clause 4.2.1;
4.2.7 duly executed service agreement between the Vendors and the
Company in Agreed Form;
4.2.8 duly executed Escrow Instructions;
4.3 There shall be delivered or made available to the Purchaser:
4.3.1 the statutory books, books of account and documents of record of
each Group Company, complete and up-to-date, and their
certificates of incorporation and common seals;
4.3.2 the title deeds relating to each of the Properties;
4.3.3 all documents of title relating to investments owned by each Group
Company;
4.3.4 all the current cheque books of each Group Company, together with
current statements of all its bank accounts with a reconciliation
to Completion, and the appropriate forms to amend, in such manner
as the Purchaser requires, the mandates given to the relevant
bank;
4.3.5 written confirmation from each of the Vendors that there are no
subsisting guarantees given by a Group Company in favour of such
Vendors or any of their Associates and that, after compliance with
clause
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4.4, none of the Vendor or their Associates will be indebted to a
Group Company; and
4.3.6 the Guarantee duly executed by the Guarantor.
4.4 Each Vendor shall repay, or procure to be repaid, all monies owing at
Completion to the Group Companies from the directors of any Group Company
and their Associates and from the Vendors and their Associates, whether
due for payment or not.
4.5 Meetings of each Group Company shall be held at which:
4.5.1 such persons as the Purchaser nominates are appointed additional
directors;
4.5.2 (in the case of the Company) the transfers referred to in clause
4.2.1 are approved (subject to stamping);
4.5.3 (in the case of the Subsidiaries of the Company) the transfers
referred to in clause 4.2.2 are approved (subject to stamping);
and
4.5.4 the resignations referred to in clauses 4.2.4 and 4.2.5 are
submitted and accepted
4.6 Upon completion of the matters referred to in clauses 4.2 to 4.5:
4.6.1 the Purchaser shall:
4.6.1.1 deliver to the Purchaser a duly completed copy of the
Escrow Instructions;
4.6.1.2 transfer or procure the transfer by way of electronic
funds transfer to such account as the Vendor's Solicitors
may direct the Initial Consideration and the sum of
(Pounds)1 (in cash) into the Escrow Account.
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4.6.2 On receipt by the Company of sufficient funds from the Purchaser
to repay the Debt, the Vendors shall procure the delivery to the
Purchaser of duly executed releases or discharges by any chargee
in the Agreed Form discharging all mortgages, debentures or
charges entered into by any Group Company and/or affecting its
property, undertakings, assets and goodwill.
4.8 The Purchaser shall not be obliged to complete the purchase of any of the
Shares unless the purchase of all the Shares is completed in accordance
with this agreement.
4.9 The Purchaser may, in its absolute discretion, waive any requirement
contained in clauses 4.2 to 4.6, or may waive any requirement on condition
that all or any of the Vendors give, on Completion, a written undertaking
to the Purchaser in form and substance as it requires. The Vendors shall
duly and punctually comply with any undertaking given by them.
5. WARRANTIES AND INDEMNITY BY THE VENDORS
5.1 The Vendors jointly and severally warrant to the Purchaser that:
5.1.1 each Vendor and Minority Vendor has full power and authority to
enter into and perform this agreement and the Deed of Indemnity
which constitute, or when executed will constitute, binding
obligations on him in accordance with their respective terms;
5.1.2 the Shares constitute the whole of the issued and allotted share
capital of the Company;
5.1.3 no change will be made prior to Completion to any of the rights
attached to the Shares;
5.1.4 there is no pledge, lien or other encumbrance on, over or
affecting the Shares and there is no agreement or arrangement to
give or create any
16
such encumbrance and no claim has been made by
any person to be entitled to any of the foregoing;
5.1.5 the Vendors and the Minority Vendors will be entitled to transfer
the full legal and beneficial ownership of the Shares to the
Purchaser on the terms of this agreement without the consent of a
third party;
5.1.6 the Subsidiaries listed in Schedule 2 are all of the trading
Subsidiaries of the Company;
5.1.7 the information in Schedule 2 relating to the Group Companies is
true and accurate;
5.1.8 the Company or (where specified) a Subsidiary of the Company is
the sole beneficial owner of the shares in the Subsidiaries of the
Company listed in the last column of Part 2 of Schedule 2, free
from encumbrance;
5.1.9 save as fully and fairly set out in the Disclosure Letter, the
Warranties are true and accurate in all respects;
5.1.10 the contents of the Disclosure Letter, and of all accompanying
documents, are accurate in all respects and fully and clearly
disclose every matter to which they relate.
5.2 The Minority Vendors severally warrant to the Purchaser in the terms of
clauses 5.1.1, 5.1.2, 5.1.4 and 5.1.5 above, in respect of the number of
the Shares set opposite their respective names in Column 3 of Schedule 1
provided that in no event will their respective liabilities exceed the sum
of (Pounds)1 in relation to any claim made pursuant to this clause 5.2.
5.3 Each of the Warranties is without prejudice to any other Warranty and,
except where expressly stated otherwise, no warranty governs or limits
the extent or application of any other warranty.
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5.4 The rights and remedies of the Purchaser in respect of a breach of the
Warranties shall not be affected by Completion, by investigations made by
or on behalf of the Purchaser into the affairs of any Group Company, by the
Purchaser rescinding, or failing to rescind, this agreement, or failing to
exercise or delaying the exercise of any right or remedy, or by any other
event or matter, except a specific and duly authorised written waiver or
release, and no single or partial exercise of any right or remedy shall
preclude any further or other exercise.
5.5 None of the information supplied by a Group Company or its professional
advisers to the Vendors, or their agents, representatives or advisers, in
connection with the Warranties and the contents of the Disclosure Letter,
or otherwise in relation to the business or affairs of a Group Company,
shall be deemed a representation, warranty or guarantee of its accuracy by
the Group Company to the Vendors, and the Vendors waive any claims against
the Group Company which they might otherwise have in respect of it.
5.6 The Vendors jointly and severally undertake to the Purchaser (for itself
and as trustee for each Group Member) to indemnify it and each Group
Company against diminution in the value of the assets of, and payment
necessarily made or required to be made by, a Group Company or the
Purchaser as a result of or in connection with, a breach of the Warranties,
or required to put the Group Company in the position in which it would have
been had there been no breach of the Warranties and against any resulting
costs and expenses reasonably incurred by it. This indemnity shall be
without prejudice to other rights and remedies of the Purchaser in relation
to the breach.
5.7 Each of the Vendors undertakes, in relation to any Warranty which refers to
the knowledge, information or belief of the Vendors, that he has made fully
enquiry into the subject matter of that Warranty and that he does not have
the knowledge, information or belief in question.
5.8 Notwithstanding any rule of law or equity to the contrary, any release,
waiver or
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compromise or other arrangement which the Purchaser agrees to or effects in
relation to one of the Vendors in connection with this agreement, and in
particular the Warranties, shall not affect the rights and remedies of the
Purchaser as regards any other of the Vendors.
5.9 The provisions of this sub-clause shall operate to limit the liability of
the Vendors under or in connection with the Warranties the said liability
of the Vendors being hereinafter referred to as "such liabilities".
5.9.1 No claim in respect of any such liabilities shall be made by the
Purchaser in the absence of fraud after expiration of a period of
2 years from the date hereof (or in the case of such liabilities
arising under the covenants of taxation and the warranties set out
in clauses 5.1.1, 5.1.2, 5.1.4 and 5.1.5 above for a period of 7
years from the date hereof) unless during the said respective
period 7 years and 2 years the Vendors give prior written notice
to the Purchaser identifying the nature and substance of the
claim.
5.9.2 The Vendors shall not be liable for any claim in respect of any
such liabilities unless the amount of each and every claim exceeds
(Pounds)10,000 in which case the Vendors shall be liable for the
entire amount and not just the excess.
5.9.3 The aggregate amount of such liabilities shall not exceed the
Consideration together with all costs and expenses incurred by or
on behalf of the Purchaser in relation to any claims made by it.
5.9.4 If either the Purchaser or the Company recovers any sum from any
third party (whether by payment discount set-off or otherwise) as
a direct result of a claim having been made in respect of such
liabilities and the sums so recovered would not have been paid by
the third party to the Purchaser and/or the Company then the
liability of the Vendors shall be reduced by the full amount of
the funds so recovered.
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5.9.5 If the Purchaser and/or the Company makes a warranty claim in
respect of such liabilities the parties shall use all reasonable
endeavours to settle any claim within a period of 15 months of
making such claim. If during the period of 15 months the claim
has neither been agreed, settled or withdrawn and no Court
proceedings have been issued and served on the Vendors then the
claim shall be deemed to have lapsed.
5.9.6 If the Purchaser shall become aware of any claim in respect of
such liabilities it shall use all reasonable endeavours to give
written notice thereof as soon as reasonably practicable and in
any event, within 45 days of becoming so aware, to the Vendors and
shall (provided that the Vendors shall indemnify and secure the
Purchaser and/or the Company to the Purchaser's satisfaction
against any liability for costs damages or expenses which may be
incurred thereby) take such action as the Vendors may reasonably
request to avoid, resist, mitigate or compromise the claim and
provided further that subject to Clause 5.9.1 above, failure to
give notice in accordance with this clause will not preclude the
Purchaser's right to bring a Warranty Claim.
5.9.7 No claim in respect of such liability shall be made to the extent
that the amount of such liabilities in respect of which the claim
is made has been caused or increased by a voluntary omission or
transaction entered into after Completion by the Company at the
direction of the Purchaser or the Purchaser's Group otherwise than
in the ordinary course of business (and without limitation those
matters referred to in clause 5.2 of the Deed of Indemnity shall
not be regarded as being in the ordinary course of the business)
and which such transaction could have reasonably been avoided and
which the Purchaser knew or ought reasonably to have known would
have caused or increased such liabilities.
5.9.8 Without prejudice to the rights and remedies available to the
related insurers no claim in respect of such liability shall be
made to the extent
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that the amount of such claim is fully recovered by the policy of
insurance effected by or for the benefit of the Company net of
expenses and any increase in the insurance premium of the Company
as a result of such claim.
5.9.9 The Purchaser shall not be entitled to recover damages more than
once in respect of any breach of the Warranties provided such
damages are recovered in full.
5.9.10 The Vendors shall not be liable in respect of a claim in respect
of such liabilities:
(a) to the extent that it arises or to the extent that it is
increased as a result of any change in the basis or method
of application or calculation of, or any increase in rates
of taxation after the date of this Agreement or the passing
of any legislation or making or any subordinate legislation
or any change of accounting practise or principles coming
into force after the date of this Agreement in all cases
without retrospective effect;
(b) to the extent that it is provided for and included as a
liability or otherwise disclosed in the Last Accounts;
(c) to the extent that it relates to any liability to taxation
arising in the normal and ordinary course of the business
of the Company since the Last Accounts Date.
(d) to the extent that such liability arises by a change in the
law after the date of this Agreement whether with or
without retrospective effect.
6. assignment and successions
6.1 If any of the Shares are sold or transferred to any member of the
Purchaser's
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Group, the benefit of each of the Warranties may be assigned to the
purchaser or transferee who shall accordingly be entitled to enforce each
of the Warranties against the Vendors as if he were named in this
agreement as the Purchaser.
6.2 This agreement binds each party's successors and assigns and personal
representative (as the case may be).
6.3 The Purchaser shall be entitled to assign the benefits of this Agreement to
any member of the Purchaser's Group.
6.4 Except as expressly provided above, none of the rights of the parties under
this agreement or the Warranties may be assigned or transferred.
7. restrictive agreement
7.1 To assure to the Purchaser the full benefit of the business and goodwill of
the Group Companies, each of the Vendors undertakes by way of further
consideration for the obligations of the Purchaser under this agreement, as
separate and independent agreements, that he will not:
7.1.1 disclose to any person, or himself use for any purpose, and shall
use all reasonable endeavours to prevent the publication or
disclosure of, information concerning the businesses, accounts or
finances of the Group Companies, or their clients' or customers'
transactions or affairs, of which he has knowledge;
7.1.2 for four years after Completion, either on his own account or for
another person, directly or indirectly solicit, interfere with or
endeavour to entice away from a Group Company a person who, to his
knowledge, is, or has during the past two years been, a client,
customer or employee of, or in the habit of dealing with, a Group
Company;
7.1.3 for four years after Completion, either alone or jointly with, or
as manager, agent for or employee of, another person, directly or
indirectly
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carry on or be engaged, concerned or interested within 100 miles
of the Company (a) in the business of the provision of post-
production services to the television, film and video industries;
or (b) in any other business similar to any business now carried
on by a Group Company.
7.2 As regards those of the Vendors who are to enter into service agreements
with the Company (the "Service Agreements"), the provisions of clauses
7.1.2 and 7.1.3 shall continue in force for the period of four years as
stated therein or until the expiry or termination of the restrictions
imposed on such Vendor by the Service Agreements (as extended or varied
from time to time), whichever is the longer.
7.3 The Vendors agree that the covenants and undertakings contained in clause
7.1 are reasonable and are entered into for the purpose of protecting the
goodwill of the business of the Group Companies and that accordingly the
benefit of the covenants and undertakings may be assigned by the Purchaser
and its successors in title without the consent of the Vendors.
7.4 Each covenant and/or undertaking contained in clause 7.1 shall be construed
as a separate covenant or undertaking. If one or more of the covenants
and/or undertakings is held to be against the public interest or unlawful
or in any way an unreasonable restraint of trade, the remaining covenants
and undertakings shall continue to bind the Vendors.
7.5 If any covenant or undertaking contained in clause 7.1 were void but would
be valid if the period of application were reduced or if some part of the
covenant or undertaking were deleted, the covenant or undertaking in
question shall apply with such modification as is necessary to make it
valid.
8. release of the vendors as personal guarantors
8.1 The Purchaser undertakes to use its reasonable endeavours to do all such
acts following Completion as shall be reasonably necessary to release the
Vendors from their current personal guarantees in respect of the leases of
the Properties which the
23
Vendors have given prior to the Completion Date for the benefit of the
Company and notified to the Purchaser in the Agreed Form and the Purchaser
hereby covenants and undertakes that it shall indemnify each of the Vendors
in respect of any claim, costs, damages and penalties which may arise as a
result of such personal guarantees continuing after Completion and under
which a claim is made as a result of the default of the Company or any
Group Company.
9. VEndor's undertaking
9.1 The Vendors shall at their own cost procure that application is made within
14 days from the date of this Agreement for the registration at H.M. Land
Registry of TVP Videodubbing Limited as the registered proprietor of the
leasehold estate created by the lease of premises at 91/101 Oxford Street
described in Schedule 5 and shall use all reasonable endeavours to complete
such registration as soon as shall be practicable.
9.2 The Vendors undertake to indemnify and keep the Purchaser indemnified in
respect of any liability incurred by the Company or the Purchaser which
arises out of:
9.2.1 any alteration to the share capital of the Company within one
month prior to the Completion Date whether such alteration was by
way of an increase of the authorised and issued share capital of
the Company or the issue of shares of the Company by dividend or
otherwise; and
9.2.2 any of the Vendors or Minority Vendors being in breach of any or
all of the Warranties set out in clauses 5.1.1, 5.1.3, 5.1.4 and
5.1.5 of this Agreement.
10. ANNOUNCEMENTS
No announcement shall be made in respect of the subject matter of this
agreement, except as specifically agreed between the parties, unless an
announcement is required by law or the Stock Exchange. An announcement by
the Purchaser shall in any event be issued only after prior consultation
with the Vendors.
24
11. Costs
11.1 Subject to clause 11.2, all expenses incurred by or on behalf of the
parties, including all fees of agents, representatives, solicitors,
accountants and actuaries employed by any of them in connection with the
negotiation, preparation or execution of this agreement, shall be borne
solely by the party who incurred the liability, and no Group Company
shall have any liability in respect of them and the Vendors undertake to
indemnify the Purchaser for any such costs incurred by the Company on
their behalf.
12. communications
12.1 All communications between the parties with respect to this agreement
shall:
12.1.1 be delivered by hand, or sent by post to, the address of the
addressee as set out in this agreement or to such other address
(being in Great Britain) as the addressee notifies for the purpose
of this clause; or
12.1.2 be sent by facsimile transmission or by electronic mail at such
numbers and addresses as notified for the purpose of this clause.
12.2 Communications shall be deemed to have been received as follows:
12.2.1 if sent by post - 3 business days in the country of receipt after
posting;
12.2.2 if delivered by hand - on the day of delivery, if delivered at
least 2 hours before the close of business hours on a business
day, and otherwise on the next business day;
12.2.3 if sent by facsimile transmission or electronic mail - at the
time of transmission, if received at least 2 hours before the
close of business hours on a business day, and otherwise on the
next business day.
For this purpose, a "business day" means a day on which the clearing
banks in the City of London are open or, where relevant clearing banks in
the United States of
25
America are open for business and "business hours" mean between the hours
of 09.00 and 18.00 inclusively local time.
13. INVALIDITY
13.1 If a term in or provision of this agreement is held to be illegal or
unenforceable, in whole or in part, under an enactment or rule of law, it
shall to that extent be deemed not to form part of this agreement and the
enforceability of the remainder of this agreement shall not be affected.
14. COUNTERPARTS
14.1 This agreement may be executed in any number of separate counterparts,
each of which when executed and delivered shall be an original, but all
the counterparts shall together constitute one and the same instrument.
15. PROPER LAW
15.1 The construction, validity and performance of this agreement shall be
governed by the laws of England and the parties submit to the non-
exclusive jurisdiction of the English Courts.
Signed by the parties as a deed on the date of this agreement.
62
IN WITNESS whereof this Agreement has been entered into the day and year first
above written.
SIGNED by Jess A. Brown )
)
for and on )
behalf of Four Media Company )
(UK) Limited )
SIGNED by )
NICHOLAS PAUL PANNAMAN )
)
in the presence of: )
SIGNED by )
SIMON PAUL KAY )
)
in the presence of: )
SIGNED by )
SUSAN PANNAMAN )
)
in the presence of: )
SIGNED by )
JACQUELINE MARY WINSTON )
)
in the presence of: )
SIGNED by NICK PANNAMAN )
as Sole Trustee )
of NP PANNAMAN ACCUMULATION )
AND MAINTENANCE SETTLEMENT )
in the presence of:- )
63
SIGNED by NICK PANNAMAN )
as Sole Trustee )
of SP PANNAMAN ACCUMULATION )
AND MAINTENANCE SETTLEMENT )
in the presence of:- )