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Dated 5th July 1999
(1) ELLEN DOHERTY
(2) LEISURE TRAVEL GROUP LIMITED
SALE AGREEMENT
relating to a life interest under the Ellen Doherty Settlement 1997
---Wacks Caller---
Steam Packet House
76 Cross Street
Manchester
M2 4JU
Tel: 0161 957 8888
Fax: 0161 957 8899
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SALE AGREEMENT
DATE: 5th July 1999
PARTIES:
(1) ELLEN DOHERTY of 5 Woodlands Way, Alkrington, Middleton, Manchester, M24
1WL; ("ED"); and
(2) LEISURE TRAVEL GROUP LIMITED (Company No. ___) whose registered office is
situated at _____________ ("the Purchaser").
RECITALS
A. Miss Ellie's World Travel Limited is a private limited company
incorporated in England under the Companies Act 1985 under number 2000814
("the Company").
B. The Ellen Doherty Settlement 1997 ("the Trust") is registered as the
holder of 46,999 ordinary shares of (pound)1 each, fully paid within the
share capital of the Company (the "Trusts Shareholding") which according
to the Articles of Association of the Company entitle it to all dividends
declared in respect of the current financial period.
C. ED is entitled as a right to receive the income from the Trust during her
lifetime. This includes inter alia, the right to receive dividends
payable in respect of the Trusts Shareholding.
D. ED is a director of the Company and believes (but without any implied
warranty or representation) that there is over (pound)400,000 in
Distributable Profits for year ended 31st March 1999 within the Company
which is capable of being declared as dividends to the shareholders of
the Company and that in view of current profitablity this figure should
increase significantly during the current financial year.
E. ED, as the beneficiary of the Trust has the right to receive all such
dividends as may be paid for the period ended 31st March 1999 to the
Trustees in relation to the Trusts Shareholding.
F. The parties agree that as no Audited Accounts are available for the
Company in respect of the year ended 31st March 1999 and given that the
Company is likely to retain a proportion of its profits for investment in
the future, ED shall sell to the Purchaser her anticipated entitlement
under the Interest (as hereinafter defined) in the Trust in respect of
the right to receive any dividend declared by the company, on the terms
and conditions set out in this Agreement.
NOW IT IS HEREBY AGREED as follows:
1. Interpretation
1.1 In this Agreement the following words and expressions have the following
meanings unless they are inconsistent with the context:
"Audited Accounts" means the Company's audited accounts (as
defined for the purposes of part VIII
Companies Act 1985) for the financial year in
question including the notes to those
accounts and the associated directors report,
such accounts having been prepared on the
same accounting basis and principles as the
previous years audited accounts;
"Distributable Profits" means the amount of Shareholder's Funds
contained within the balance sheet of the
Company's Audited Accounts;
"Escrow Account" the client account of Wacks Caller;
"The Interest" means ED's rights to receive any dividends
paid to the Trust by the Company in respect
of the Trust's shareholding in the Company;
"Miss Ellie Profits" the after tax profits of the Company as shown
by the Audited Accounts for the year ended
31st March 2000 before deducting
any expenditure or liability incurred by the
Company or one of its subsidiaries unless it
was:
(i) agreed with ED; or
(ii) contained or provided for in a budget
agreed with ED; or
(iii) in the ordinary course of business of
the Company as conducted before today.
"Shares" means 50,000 issued ordinary shares of
(pound)1 each of the Company being the whole
of the issued share capital of the Company.
1.2 Clause headings in this Agreement are for ease of reference only and do
not affect the construction of any provision.
1.3 Except where the context otherwise requires words denoting the singular
include the plural and vice versa, words denoting any one gender include
all genders and words denoting persons include corporations and vice
versa.
1.4 Unless otherwise stated, a reference to a clause or sub-clause is a
reference to a clause or a sub-clause of this Agreement.
2. Agreement for Sale
2.1 Subject to the terms and conditions of this Agreement ED shall sell and
Purchase the interest free from all liens, charges and encumbrances and
with all rights attaching to it, with effect from the date of this
Agreement for the consideration set out in clause 3.
3. Purchase Consideration
3.1 The purchase consideration for the Interest shall be the aggregate of:-
3.1.1 the sum of(pound)30,000 payable in cash to ED at completion; and
3.1.2 a sum equal to the lesser of (pound)265,000 and the sum shown in
the Audited Accounts as
"profits on ordinary activities after taxation" of the Company for
the year ended 31st March 1999 such payment to be without
prejudice to any set off or counterclaim in respect of ED's
anticipated dividend from the Company for the year ending 31 March
1999;
3.1.3 such sum as equals the Miss Ellie Profits as shown by the
Audited Accounts for the year ended 3lst March 2000 and
paid in accordance with clause 5.
4. Completion
4.1 Completion of the purchase of the Interest shall take place at the
offices of the Purchaser's Solicitors as soon as practicable after
execution of this Agreement and in any event by 9th July 1999. Upon
receipt by ED of consideration set out in clause 3.1.1 above, ED shall
procure that the Trustees shall deliver to the Purchaser a duly executed
mandate instructing the Company to pay all dividends due under the
Interest directly to the Purchaser, and that a Meeting of the Trustees
will be held at which the mandate referred to in this clause 4.1 shall be
approved.
4.2 The Purchaser shall satisfy the initial part of the consideration for the
Interest, as set out in Clauses 3.1.1, and 3.1.2 by the payment to ED's
Solicitors in cleared funds of those amounts.
4.3 The Purchaser shall satisfy the consideration set out in clauses 3.1.2
and 3.1.3 respectively (less any payments on account made in accordance
with clause 5) by the payment to ED's Solicitors within 14 days of the
signature by the auditors of the Audited Accounts of the Company for the
years ended 31st March 1999 and ending 31st March 2000 respectively and
the Purchaser agrees to use is best endeavours to adopt the Audited
Accounts for the year ended 31st March 2000 as soon as practicable and in
any event prior to 30th September 2000.
5. Payments on Account
5.1 The parties will procure that a copy of each set of management accounts
of the Company will be delivered to the Trustees (it being the duty of ED
so to do whilst she remains a director of the Company) which shall be
accompanied at the end of each calendar quarter by a statement of the
estimate of the Company of the Miss Ellie Profits as at the end of that
quarter.
5.2 The Purchaser shall within 14 days of receipt by it of each set of
quarterly management accounts in accordance with clause 5.1 pay into the
Escrow Account an amount equal to that quarters' Miss Ellie Profits (as
adjusted in accordance with the definition above) as shown by that set of
quarterly management accounts (less in each case the aggregate of the
payments (if any) previously made under this sub-clause) being an amount
of the consideration payable under clause 3.1.3.
5.3 Payments to the Escrow Account under this clause shall be made by means
of telegraphic transfer to the Vendor's Solicitors.
5.4 Interest accruing on money in the Escrow Account shall be paid to the
party to whom that money is paid pursuant to the terms of this Agreement.
6. Warranties by ED
6.1 ED warrants that she is entitled to transfer the full beneficial
ownership of the Interest to the Purchaser on the terms of this Agreement
without the consent of any third party.
6.2 ED warrants that the Audited Accounts of the Company as at 31st March
1999 will reveal net assets (the "1999 Assets") not materially less in
value than those comprised to the unaudited management accounts of the
Company as at 30th September 1998 (the "1998 Assets") and in the event of
the 1999 Assets being materially less the damages payable by ED to the
Purchaser shall be (pound)1 for every (pound)1 by which the 1999 Assets
are materially less than the 1998 Assets and that those assets in Balance
Sheet as at 31 March 1999 comprise assets of a materially similar nature
to those in the said management accounts.
7. General
7.1 The Purchaser agrees that in consideration of today entering into this
Agreement it shall not prior to the signature of the Audited Accounts to
31st March 2000, and shall procure that so far as it is able no third
party shall change the accounting reference date of the Company or change
the Company's auditors PROVIDED ALWAYS that if the Purchaser wishes to
change the said accounting reference date it shall be obliged to produce
accounts to 31st March 2000 to the same standards and policies as the
Audited Accounts as if 31st March 2000 was the actual accounting
reference date.
7.2 The Purchaser further agrees that (subject to ED complying with her
service agreement with the Company in all material respects) it shall
allow ED to continue to exercise day to day control over the affairs of
the Company and that ED shall be permitted, without interference by the
Purchaser or at all, to conduct the business of the Company as she
reasonably sees fit in accordance with her service agreement with the
Company and will not change any bank mandate of the Company pending
payment under clause 3.1.2 save for the addition of Mr Richard Smith as
an additional signatory on the basis that no cheque shall be signed or
instruction Given to the Company's bankers until payment has been made
under clause 3.1.2 without the consent of ED. In the event of a breach of
this clause 7.2, and ED shall have terminated her service agreement with
the Company, the consideration payable under 3.1.3 shall be
(pound)150,000.
7.3 The Purchaser and ED shall use all reasonable endeavours to maximise the
Miss Ellie Profits.
7.4 This Agreement constitutes the entire agreement between the parties
hereto with respect of the matters dealt with herein and supersedes any
previous agreement between the parties hereto in relation to such
matters. Each of the parties hereto hereby acknowledges that in entering
into this agreement it has not relied on any representation or warranty
save as expressly set out herein or in any document referred to herein.
No variation of this agreement shall be valid or effective unless made by
one or more instruments in writing signed by such of the parties hereto
which would be affected by such variation.
7.5 The constitution, validity and performance of this agreement shall be
governed by the laws of England and the parties hereby irrevocably agree
that they will submit to the non-exclusive jurisdiction of the English
Courts.
AS WITNESS the hands of the parties the day and year first before written.
Signed by )
ELLEN DOHERTY ) /s/ ELLEN DOHERTY
in the presence of )
Signed by )
LEISURE TRAVEL GROUP ) /s/ Illegible
LIMITED, acting by:- )
Director