CONFORMED COPY
DATED 14TH MAY 1998
(1) COMPASS TRUSTEES LIMITED
- and -
(2) TRANSMEDIA EUROPE INC AND TRANSMEDIA ASIA PACIFIC INC
- and -
(3) GAVIN LOGAN AND JOANNE LOGAN
-------------------------------------
AGREEMENT
for the acquisition of 100% of the issued share capital of
PORKPINE LIMITED
-------------------------------------
Hill Dickinson
34 Cuppin Street
Chester CH1 2BN
Tel: 01244 896600
Fax: 01244 896601
Ref: AGS/SJL/1028949
G:\USERS\KHANLEY\TRANSMED\PORKPIN\AGMT05.DOC
1 DATE AND DESCRIPTION
An agreement for the sale and purchase of shares dated 14th May 1998.
2 PARTIES
2.1 COMPASS TRUSTEES LIMITED, a company incorporated in Jersey (registered
number: 60972) whose registered office is at Cater Allen House,
Commercial Street, St. Helier, Jersey JE4 5XZ, Channel Islands (the
"Seller"); and
2.2 TRANSMEDIA EUROPE INC, a company incorporated under the laws of the
state of Delaware, and TRANSMEDIA ASIA PACIFIC INC, a company
incorporated under the laws of the state of Delaware, whose principal
place of business in the United Kingdom is at 11 St James's Square,
London SW1Y 4LB (each a "Buyer" and, together, the "Buyers"); and
2.3 GAVIN LOGAN, of 42 Princetown Road, Bangor, Co. Down, Northern Ireland
and JOANNE LOGAN, also of 42 Princetown Road, Bangor, Co. Down,
Northern Ireland (each a "Covenantor" and, together, the
"Covenantors").
3 INTERPRETATION
3.1 In this Agreement and the Schedules annexed the following words have
the meanings set out against them:
"Accounting Period" each period of twelve months expiring on 31
March;
"Accounting Standards" the statements of standard accounting
practice and financial reporting standards
issued pursuant to section 256 of the Act by
the Accounting Standards Board Limited or
such other body as may be prescribed
thereunder by the Secretary of State and any
pronouncements of the Urgent Issues Task
Force applying from time to time;
"Accounts" each Group Company's individual accounts (as
that term is used in section 226 of the Act)
and the statement of cashflow and the
Group's group
1
accounts (as that term is used in section
227 of the Act) and the consolidated
statement of cashflow and the other
documents which are required by law to be
annexed to those accounts;
"Act" the Companies Act 1985;
"Additional Consideration" the additional consideration referred to in
clause 11;
"Agreed Form" in the form annexed to this Agreement and
initialled on behalf of the parties to this
Agreement;
"1998 Accounts" the Accounts for the Accounting Period
ending on the Balance Sheet Date and the
Partnership Accounts for the Accounting
Period ending on the Balance Sheet Date;
"Annexure" an annex or annexure to this Agreement;
"Balance Sheet Date 31 March 1998;
"Bank Accounts" the current account numbered 30089082 and
the business reserve account numbered
30089165 operated by the Covenantors in
respect of the Northern Ireland Business at
Ulster Bank plc;
"Board" the board of Directors of the Company as
constituted from time to time;
"Business" the businesses of the Group at the date of
this Agreement including, without
limitation, the business operated by the
Group under the names "Logan Leisure",
"Logan Leisure and Entertainment", "Logan
Leisure Northern Ireland" and "Logan
Entertainment and Leisure (Belfast)";
"Business Day" a day (not being a Saturday, Sunday or
public Holiday in England) on which clearing
banks in the City of London are usually open
for business;
2
"Business Transfer
Agreement" an agreement dated 14th May 1998 between
Gavin Logan and Joanne Logan (1) and the
Company (2) for the acquisition of the
undertaking and assets of the Northern
Ireland Business in the Agreed Form;
"Buyers' Accountants" BDO Stoy Hayward of 8 Baker Street, London
W1M 1DA;
"Buyers' Solicitors" Hill Dickinson of 50 Fountain Street,
Manchester M2 2AS;
"Company" Porkpine Limited, a company incorporated in
Jersey (registered: number 60973) further
details of which appear in Part 1 of
Schedule Two;
"Completion" completion of the sale and purchase of the
Shares in accordance with clause 10;
"Completion Accounts" the accounts to be prepared in accordance
with clause 8;
"Confidential Information" any secrets, trade secrets, knowledge,
know-how or information concerning the
business, finances, dealings, transactions
or affairs of the Group which are for the
time being confidential to the Group
including, without limitation, information
relating to:
(i) the marketing of goods and services,
including, without limitation, Customer
names and lists and other details of
Customers, sales targets, sales statistics,
market share statistics, prices, market
research, reports and surveys, and
advertising or other promotional materials;
or
(ii) future projects, business development or planning,
commercial relationships and negotiations; and
3
(iii)any information received by the Company or the
Subsidiaries or imparted to the Company or the
Subsidiaries by any third party under any obligation
of confidentiality which would prevent its
disclosure;
"Consideration" the consideration referred to in clause 6;
"Consideration Shares" 225,000 shares in the common stock of
Transmedia Europe Inc and 225,000 shares in
the common stock of Transmedia Asia Pacific
Inc;
"Customer" any third party to whom at any time or in
the 24 months immediately preceding that
time the Company or the Subsidiaries or any
employee of the Company or the Subsidiaries
directly or through any intermediary
provides or has provided, or is or was in
negotiation with a view to the provision of,
products or services or to whom the Company
or the Subsidiaries or any employee of the
Company or the Subsidiaries has directly or
through any intermediary made or been
requested to make an offer to provide
products or services;
"Deed of Termination" a deed of termination in respect of the
Escrow Letter in the Agreed Form;
"Directors" the persons listed as directors of the
Company and the Subsidiaries in Parts 1 and
2 of Schedule Two;
"disclosed" fully, fairly and specifically disclosed in
the Disclosure Letter;
"Disclosure Bundle" the bundle of disclosure documents in the
form initialled by or on behalf of each of
the parties for the purposes of
identification;
"Disclosure Letter" the letter of today's date from the Seller
(or its
4
solicitors) to the Buyers (or their
solicitors) in the Agreed Form;
"Encumbrance" includes any interest or equity of any
person (including, without prejudice to the
generality of the foregoing, any right to
acquire, option, restriction or right of
pre-emption) or any mortgage, charge,
pledge, lien, assignment, hypothecation,
security interest, title retention or any
other security agreement or arrangement;
"Escrow Letter" an escrow letter dated 31 March 1998 from
the Seller's Solicitors to the Buyers'
Solicitors;
"Escrow Shares" 200,000 issued ordinary shares of $1 each in
the capital of Transmedia Europe Inc and
200,000 isued ordinary shares of $1 each in
the capital of Transmedia Asia Pacific Inc
which at the date of this Agreement are held
by the Seller's Solicitors in escrow in
accordance with the terms of the Escrow
Letter;
"Floracourt" Floracourt Marketing Limited, a company
incorporated in the Republic of Ireland
(registered number: 244263), further details
of which appear in Part 2 of Schedule Two:
"Floracourt Share" one ordinary share of IR(pound)1 in the
capital of Floracourt registered in the name
of Graduate Nominees Limited at the date of
this Agreement;
"fully indemnified" fully indemnified from and against all
actions, reasonable costs, claims, damages,
demands, expenses, liabilities, losses and
proceedings directly suffered or incurred
but not including any consequential losses
or damages;
"Group" the Company and each Subsidiary;
"Group Company" each of the Company and the Subsidiaries;
"Intellectual Property" (a) patents, trade marks, service marks,
5
registered designs, trade or business names,
unregistered trade marks and service marks,
know-how, copyright, design rights and
inventions;
(b) the sui generis right for the maker of a
database to prevent extraction or
re-utilisation or both of the whole or a
substantial part of the contents of that
database, as described in Directive 96/9/EC
on the legal protection of databases;
(c) rights under licences, consents, orders,
statutes or otherwise in relation to a right
in paragraphs (a) or (b); and
(d) any other intellectual property or
industrial property or similar or analogous
rights (whether or not registered) and all
applications for any intellectual property
rights in respect of which registration is
required, in each case in any jurisdiction;
"Intellectual Property
Right" all Intellectual Property used by a Group
Company in, or in connection with, the
Business;
"Irish Companies Act" in the Republic of Ireland, the Companies
Acts 1963 to 1990 and all orders and
regulations made thereunder or made under
the European Communites Act 1972 and
intended to be construed as one with the
Companies Acts 1963 to 1990;
"Irish Tax Deed" a deed in the form set out in Schedule
Seven;
"Letville" Letville Holdings Limited, a company
incorporated in the Republic of Ireland
(registered number: 244728), further details
of which appear in Part 2 of Schedule Two;
"Letville Share" one ordinary share of IR (pound)1 in the
capital of
6
Letville registered in the name of the
Seller at the date of this Agreement;
"New Auditors" the Buyers' Accountants or such other office
or firm that the Buyers may nominate from
time to time;
"New Escrow Agreement" an agreement so entitled in the Agreed Form;
"New Escrow Letter" a letter in the form set out in the schedule
to the New Escrow Agreement;
"New Escrow Shares" 50,000 shares in the common stock of
Transmedia Europe Inc and 50,000 shares in
the common stock of Transmedia Asia Pacific
Inc;
"Northern Ireland
Business" the business, undertaking and assets of
Logan Leisure and Entertainment (Belfast)
and Logan Leisure Northern Ireland more
particularly described in the Option
Agreement the beneficial interest in which
was, at 31 March 1998, owned by the
Covenantors or any person connected with the
Covenantors;
"Option Agreement" a call option agreement dated May 1997
between the Company (1) and Gavin Logan (2);
"Partnership Accounts" accounts prepared in respect of the Northern
Ireland Business as carried on by the
Covenantors in partnership (or either of the
Covenantors as sole trader) from time to
time and reported on as such by the Seller's
Accountants or such other firm of chartered
accountants as shall report on such accounts
from time to time;
"Promissory Note" a promissory note dated 14th April 1998 made
between the Company (1) and the Covenantors
(trading as Logan Leisure Northern Ireland)
(2);
"Properties" the properties details of which are set out
in Schedule Eight;
7
"Relevant Claim" a claim by the Buyers for breach of
warranty;
"Republic of Ireland
Business" the business, undertaking and assets of the
Group at the date of this Agreement
including, without limitation, the business
operated by the Group in the Republic of
Ireland under the names "Logan Leisure" and
"Logan Leisure and Entertainment";
"Restricted Activities" provision of, or procuring the provision of,
leisure and/or entertainment services in
competition with the Business;
"Restricted Territory" the United Kingdom, the Republic of Ireland
and the Channel Islands;
"Schedule" a schedule to this Agreement;
"Seller's Accountants" Rothwell McHugh & Co of 19 Herbert Street,
Dublin 2, Republic of Ireland;
"Seller's Solicitors" O'Gradys of 5 Upper Fitzwilliam Street,
Dublin 2, Republic of Ireland;
"Service Contract" the service contract in the Agreed Form to
be entered into upon Completion between
Countdown Holdings Plc and Gavin Logan;
"Shares" the ten issued shares of(pound)1 each in the
capital of the Company;
"Subsidiary" Letville, Floracourt or any other subsidiary
of the Company at the date of this
Agreement;
"Taxation" shall have the same meaning in this
Agreement as in the Tax Deed and, to the
extent that such are not co-extensive, the
Irish Tax Deed;
"Taxation Authority" any local, municipal, governmental, state,
federal or other fiscal, revenue, customs or
excise authority, body or official anywhere
in the world including, without limitation,
in the United Kingdom, the Inland Revenue
and the
8
Commissioners for Customs and Excise and, in
the Republic of Ireland, the Revenue
Commissioners and the Customs & Excise;
"Tax Claim" a claim by the Buyers under the Tax Deed or
the Irish Tax Deed;
"Tax Deed" a deed in the form set out in Schedule Six;
"Taxes Act" Income and Corporation Taxes Act 1988;
"TCGA" Taxation of Chargeable Gains Act 1992;
"Tenancy Agreement" a tenancy agreement in respect of Sibthorpe,
37A Leeson Park, Dublin 6, Republic of
Ireland between the Covenantors (1) and
Floracourt (2) in the Agreed Form;
"VATA" in the United Kingdom, the Value Added Tax
Act 1994 and, in a jurisdiction other than
the United Kingdom, any equivalent
legislation;
"Warrantor" the Seller and each of the Covenantors; and
"Warranty" a statement contained in clause 13 and in
Schedule Four and
"Warranties" means all those statements.
3.2 In this Agreement where the context so admits:
3.2.1 words and phrases the definitions of which are contained or
referred to in Part XXVI of the Act and, in relation to the
Republic of Ireland (where appropriate), section 2 of the
Companies Act 1963 shall have the same meanings when used in
this Agreement;
3.2.2 references to statutory provisions (to include those
references to other jurisdictions having regard to clause 3.6)
shall be construed as references to those provisions as
amended or re-enacted or as their application is modified by
other provisions from time to time and shall include
references to any provisions of which they are re-enactments
(whether with or without modification);
9
3.2.3 references to clauses and Schedules are to clauses of and
Schedules to this Agreement unless stated otherwise;
3.2.4 words importing the singular include the plural and vice versa
and words importing any gender include any other gender;
3.2.5 the recitals and Schedules all form part of this Agreement;
3.2.6 all Warranties which are given or made "to the best of the
knowledge information and belief" of the person giving it or
"so far as he is aware" shall be deemed to have been given to
the best of the knowledge information and belief of such
person having made all careful and reasonable enquiries having
regard to the reasonable commercial interests of the Group.
3.3 Any question whether a person is connected with another:
3.3.1 in the United Kingdom and jurisdictions other than the
Republic of Ireland, shall be determined in accordance with
Section 839 of the Taxes Act which shall apply in relation to
this Agreement as it applies in relation to the Taxes Act.
3.3.2 in the Republic of Ireland, shall be determined in accordance
with Section 10 of the Taxes Consolidations Act 1997 which
shall apply to this Agreement as it applies in relation to the
Taxes Consolidation Act 1997.
3.4 Paragraph 14 of Schedule Four shall be construed as if clause 1 of the
Tax Deed and clause 1 of the Irish Tax Deed were incorporated in that
Schedule.
3.5 Reference in Schedule Four to the "Company" shall include reference to
each of the Subsidiaries except where the context otherwise requires.
3.6 References to any English statutory provision, accounting principle or
standard or legal term or concept (including without limitation, those
relating to any action, remedy, method or judicial proceeding,
document, statute, court official, governmental authority or agency)
shall in respect of any jurisdiction other than England be construed as
references to the term or concept which most nearly corresponds to it
in that jurisdiction.
3.7 The index and headings are inserted for convenience only and shall not
affect the construction of this Agreement.
10
4 RECITALS
4.1 The Seller has agreed to sell and the Buyers have agreed to buy the
Shares on the terms of this Agreement.
4.2 The Company will, prior to the date of Completion, have:
4.2.1 completed the purchase of the Letville Share;
4.2.2 procured the transfer to Letville of the Floracourt Share;
4.2.3 completed the acquisition pursuant to the Business Transfer
Agreement of the Northern Ireland Business from the Covenantor
and/or any person connected with the Covenantor, the Option
Agreement having merged with and been extinguished in the
Business Transfer Agreement; and
4.2.4 issued the Promissory Note.
5 SALE OF SHARES
5.1 Subject to the terms of this Agreement the Seller agrees to sell with
full title guarantee and free from all Encumbrances and together with
all rights now or hereafter attaching to the Shares and the Buyers
agree to purchase free from all Encumbrances and together with all
rights now or hereafter attaching thereto the number of Shares as to
Transmedia Europe Inc set out in Schedule One and as to Transmedia Asia
Pacific Inc set out in Schedule One.
5.2 The Buyers shall not be obliged to complete the purchase of any of the
Shares unless:
5.2.1 the purchase of all the Shares is completed simultaneously;
5.2.2 the purchase by the Company of the Letville Share has been
completed;
5.2.3 the transfer to Letville of the Floracourt Share has been
completed;
5.2.4 the purchase by the Company of the entire undertaking and
assets of the Northern Ireland Business has been completed
prior to Completion and the option to acquire the Northern
Ireland Business contained in the Option Agreement has merged
with and been extinguished in the Business Transfer Agreement.
11
5.3. The Seller hereby waives any pre-emption rights it may have relating to
the Shares, whether conferred by the Company's articles of association
or otherwise.
5.4 Gavin Logan hereby acknowledges and the Seller shall procure that the
Company acknowledges that completion of the sale and purchase of the
Northern Ireland Business as contemplated by the Business Transfer
Agreement is deemed to be a waiver of the period of 14 days provided by
the Option Agreement between the exercise date (as defined in the
Option Agreement) and the date on which Completion (as defined in the
Option Agreement) is required to occur.
5.5 The Seller irrevocably authorises the Seller's Solicitors to receive
all sums due to it under this Agreement. Payment of the Consideration
to be paid in cash is to be made to the Seller's Solicitors by
telegraphic transfer or bankers' draft drawn on such bank (being a
member of the Cheque and Credit Company Limited) that the Buyers may
nominate. The receipt of the Seller's Solicitors will constitute a full
and valid discharge to the Buyers and the Buyers will not be required
to enquire as to the application of any such payment.
6 CONSIDERATION
6.1 The consideration for the sale of the Shares and the obligations of the
Seller pursuant to this Agreement is (pound)1,060,000 (one million and
sixty thousand pounds sterling), subject to the following adjustments:
6.1.1 there shall be added an amount, if any, by which the Group's
net current assets (on the assumption that the Group is the
only legal and beneficial owner of the Business at the date of
Completion) as shown in the balance sheet constituting part of
the Completion Accounts is greater than (pound)1,060,000 (one
million and sixty thousand pounds sterling) on the assumption
that the goodwill of the Business is valued at
(pound)1,059,999 (one million and fifty nine thousand nine
hundred and ninety nine pounds sterling) and the fixed assets
of the Business are valued at (pound)1 (one pound sterling);
or
6.1.2 there shall be deducted an amount, if any, by which the
Group's net current assets (on the assumption that the Group
is the only legal and beneficial owner of the Business at the
date of Completion) as shown in the balance sheet constituting
part of the Completion Accounts is less than (pound)1,060,000
(one million and sixty thousand pounds sterling) on the
assumption that the goodwill of the Business is valued at
(pound)1,059,999 (one million and fifty nine
12
thousand nine hundred and ninety nine pounds sterling) and the
fixed assets of the Business are valued at (pound)1 (one pound
sterling).
6.2 The Consideration shall be satisfied in the following manner:
6.2.1 by the issue and allotment to the Seller at Completion of the
Consideration Shares in accordance with clause 7 in
satisfaction of (pound)400,000 (four hundred thousand pounds
sterling) of the price payable under clause 6.1;
6.2.2 by the agreement of the Buyers (through their acquisition of
the entire issued share capital of the Company) to procure the
payment by the Company of the (pound)300,000 (three hundred
thousand pounds sterling) owed by the Company to the
Covenantors under the Promissory Note, such payment to be made
in cash at Completion; and
6.2.3 by the payment by the Buyers to the Seller of (pound)360,000
(three hundred and sixty thousand pounds sterling) at
Completion in cash on account of the balance of the price
payable under clause 6.1.
6.3 Within ten Business Days starting on the day after agreement or
determination of the Completion Accounts in accordance with clause 8:
6.3.1 if the price payable under clause 6.1 exceeds (pound)1,060,000
(one million and sixty thousand pounds sterling), the Buyers
shall pay to the Seller the amount of the excess in cash; or
6.3.2 if the price payable under clause 6.1 does not exceed
(pound)1,060,000 (one million and sixty thousand pounds
sterling), the Seller shall repay to the Buyers the amount of
the shortfall in cash.
6.4 A payment to be made under clause 6 shall be made by banker's draft or
by telegraphic transfer or by banker's draft drawn on such bank (being
a member of the Cheque and Credit Company Limited) that the Buyers may
nominate to an account notified by the party due to receive the payment
to the other party not later than three Business Days before the date
of the payment.
7 CONSIDERATION SHARES
7.1 Upon or as soon as practicable after Completion, the Buyers shall:
7.1.1 cause the name of the Seller to be entered into the register
of shareholdings of
13
Transmedia Europe Inc and Transmedia Asia Pacific Inc (as the
case may be) as the registered holder of the Consideration
Shares; and
7.1.2 instruct its transfer agent to deliver to the Seller
certificates for 175,000 shares in the common stock of
Transmedia Europe Inc and 175,000 shares in the common stock
of Transmedia Asia Pacific Inc (representing a proportion of
the Consideration Shares), such certificates to be delivered
within no more than ten Business Days of Completion; and
7.1.3 instruct its transfer agent to deliver to the Seller
certificates for the New Escrow Shares (representing a
proportion of the Consideration Shares), such certificates to
be delivered within no more than ten Business Days of
Completion.
7.2 As soon as practicable following delivery of such certificates in
accordance with clause 7.1.3:
7.2.1 the Seller shall procure that the certificates for the New
Escrow Shares shall be executed for transfer and all powers of
attorney/stock powers necessary to ensure that the New Escrow
Shares are capable of being transferred forthwith shall be
executed; and
7.2.2 the Seller shall immediately following the execution of the
certificates for the New Escrow Shares and the powers of
attorney/stock powers in the manner referred to in clause
7.2.1 deliver (or procure the delivery of) the certificates
for the New Escrow Shares and all such powers of
attorney/stock powers to the Buyers' Solicitors in their
capacity as Escrow Agent (as defined in the New Escrow
Agreement).
7.3 It is acknowledged by the Seller that it is acquiring the Consideration
Shares for its own account, with no present intention of reselling or
otherwise distributing the same. The Seller understands and agrees that
it may dispose of the Consideration Shares only in compliance with the
United States of America Securities Act of 1933, as amended, and
applicable state securities laws as then in effect. The Seller agrees
to the imprinting, so long as required by law, of a legend on the
certificates representing all of the Consideration Shares to the
following effect:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED
OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THESE SHARES
14
UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF THE
COMPANY'S COUNSEL THAT REGISTRATION IS NOT REQUIRED UNDER SAID
ACT."
7.4 The Seller hereby warrants to the Buyers that it has not entered into
any contracts, undertakings, agreements or arrangements with any party
to sell, transfer or pledge to such party or anyone else the
Consideration Shares and has no present plans or intentions to enter
into such contracts, undertakings, agreements or arrangements.
8 COMPLETION ACCOUNTS
8.1 After Completion the Seller shall (at its cost) ensure that the
Seller's Accountants prepare a consolidated profit and loss account of
the Group for the period starting on the day after the Balance Sheet
Date and ending on the date of Completion and a consolidated balance
sheet of the Group and of the business as at the date of Completion and
all attached notes.
8.2 The profit and loss account, the balance sheet and notes referred to in
clause 8.1 shall be prepared on bases consistent with the 1998 Accounts
using the same accounting principles, policies and practices, and in
accordance with the law and applicable Accounting Standards, principles
and practices generally accepted in the United Kingdom (and where
appropriate) the Republic of Ireland as if they were (in the case of
the Company Accounts) accounts required to be prepared under the Act
and (where appropriate) the Irish Companies Act and (in the case of the
Partnership Accounts) accounts of a partnership trading in the United
Kingdom. In preparing the profit and loss account, balance sheet and
notes, no account is to be taken of an event taking place after
Completion and regard is only to be had to information available to the
parties as at Completion. No revaluation of an asset of a Group Company
or of the Northern Ireland Business made since the Balance Sheet Date
is to be reflected in the balance sheet.
8.3 After Completion, the Buyers shall provide, and shall ensure that each
Group Company provides, to the Seller and the Seller's Accountants
reasonable access to relevant assets, documents and records within
their possession or control for the purpose of preparing the profit and
loss account, balance sheet and notes referred to in clause 8.1.
8.4 The Seller shall ensure that within 60 days starting on the day after
Completion the Seller's Accountants submit to the Buyers' Accountants
the profit and loss account, balance sheet and notes referred to in
clause 8.1, their working papers and a report by the Seller's
Accountants addresssed to the Seller and the Buyers stating whether in
15
their opinion the profit and loss account, balance sheet and notes have
been prepared in accordance with clause 8.2. The Buyers shall ensure
that within 30 days starting on the day after receipt of the profit and
loss account, balance sheet, notes and working papers the Buyers'
Accountants certify whether or not they agree with the profit and loss
account, balance sheet and notes. The Seller shall ensure that the
Buyers' Accountants are given all assistance and access to all
additional information they may reasonably require to enable them to
make their decision.
8.5 If the Buyer's Accountants certify their agreement with the profit and
loss account, balance sheet and notes referred to in clause 8.1, the
profit and loss account, balance sheet and notes constitute the
Completion Accounts. If the Buyers' Accountants certify that they
disagree with the profit and loss account, balance sheet and notes,
clause 8.6 applies and unless the Seller's Accountants and the Buyers'
Accountants agree on the Completion Accounts, the decision of the
independent firm of chartered accountants produced in accordance with
clause 8.6 constitutes the Completion Accounts. If the Buyers'
Accountants do not give the Seller the certificate required by clause
8.4 within the prescribed period, the profit and loss account, balance
sheet and notes referred to in clause 8.1 constitute the Completion
Accounts.
8.6 If within 14 days starting on the day after receipt of the certificate
referred to in clause 8.5 the Seller's Accountants and the Buyers'
Accountants have not agreed on the Completion Accounts or the Seller
and the Buyers have not agreed on the amount of the consideration
payable under clause 6.3, the following provisions apply. Either party
may refer the matter to an independent firm of chartered accountants
agreed by the parties or, in default of agreement within 28 days of the
date of receipt of the certificate, an independent firm of chartered
accountants nominated by the President for the time being of the
Institute of Chartered Accountants in England and Wales (the "Expert"),
on the basis that the Expert is to make a decision on the matter within
28 days starting on the day after receiving the reference. In a
reference, the Expert shall act as an expert and not as an arbitrator.
The decision of the Expert is, in the absence of fraud or manifest
error, final and binding on both parties. The Seller and the Buyers
shall each pay one half of the Expert's costs in respect of a
reference.
9 PRE-COMPLETION
9.1 Pending Completion the Seller and Gavin Logan shall ensure that (save
as otherwise provided under this Agreement) each Group Company complies
with the provisions of Schedule Five.
9.2 Pending Completion the Seller and Gavin Logan shall notify the Buyers
immediately upon becoming aware of any fact, matter or thing which
occurs or arises following the
16
date of this Agreement which might give rise to:
9.2.1 a breach of clause 9.1 or a breach of any of the Warranties
which would give rise to a claim under this Agreement; or
9.2.2 a claim pursuant to the Tax Deed or the Irish Tax Deed.
9.3 The Seller and/or each of the Buyers shall have the right to rescind
this Agreement if, prior to Completion:
9.3.1. the other of them is in breach of any of their respective
obligations pursuant to this Agreement which cannot be
remedied within 21 days of notice of the breach having been
given by the party not in breach to the other or (if earlier)
within 28 days of the breach having occurred; or
9.3.2 there is any material breach of the Warranties.
9.4 If any of the parties wishes to exercise its right to rescind it shall
do so by giving notice to the other party's solicitors.
9.5 The right to rescind is in addition to any other remedy which may be
available to the party exercising such right. The exercise or failure
to exercise the right will not constitute a waiver of any other remedy.
10 COMPLETION
10.1 Neither the Seller nor the Buyers shall be bound to complete the sale
or purchase of any of the Shares unless:
10.1.1 the parties satisfy all of their respective obligations
pursuant to this clause 10 at the same time; and
10.1.2 any such breach as is mentioned in clause 10.1.1 and which is
capable of remedy shall have been remedied to the reasonable
satisfaction of the Buyers.
10.2 Completion shall take place at the offices of the Seller's Solicitors,
situate at 5 Upper Fitzwilliam Street, Dublin 2, Republic of Ireland on
14 May 1998 or such earlier date as the parties may agree.
10.3 On Completion:
17
10.3.1 the Seller shall, save as provided in clause 10.3.3, deliver
to the Buyers each item specified in Schedule Three;
10.3.2 the Seller shall ensure that:
10.3.2.1 a Board meeting of the Company is held at which
the transfers of the Shares are approved for
registration subject only to being stamped;
10.3.2.2 a board meeting of Letville is held at which the
transfer of the Letville Share referred to in
clause 5.2.2 is approved for registration subject
only to being stamped (or adjudicated as exempt
from stamp duty) and the resignation of Peter
Manahan and the appointment of Paul Harrison as a
director of Letville are approved; and
10.3.2.3 a board meeting of Floracourt is held at which the
transfer of the Floracourt Share referred to in
clause 5.2.3 is approved for registration subject
only to being stamped (or adjudicated as exempt
from stamp duty) and the resignation of Peter
Manahan and the appointment of Paul Harrison as a
director of Floracourt are approved; and
10.3.3 in relation to the items specified in paragraphs 8, 9 and 12
of Schedule Three, the items shall be deemed to have been
delivered to the Buyers provided that on Completion such items
shall be present in the offices of the Group or its advisers.
10.4 The Seller shall hand to the Buyers at Completion duly signed minutes
of each board meeting referred to in clause 10.3.2.
10.5 On Completion:
10.5.1 the Buyers shall pay (pound)660,000 (six hundred and sixty
thousand pounds sterling) to the Seller's Solicitors in
satisfaction of the obligations imposed on the Buyers in
clauses 6.2.2 and 6.2.3;
10.5.2 the Buyers shall deliver a counterpart Tax Deed and a
counterpart Irish Tax Deed duly executed by the Buyers to the
Seller's Solicitors on behalf of the Seller and the
Covenantors;
10.5.3 the Buyers shall deliver the Service Contract duly executed by
Countdown Holdings Plc;
18
10.5.4 the Buyers shall deliver the Deed of Termination duly executed
by the Buyers; and
10.5.5 the Buyers shall deliver the New Escrow Agreement and the New
Escrow Letter duly executed by the Buyer.
11 ADDITIONAL CONSIDERATION
11.1 In this clause 11, the following words have the meanings set out
against them:
"Heads of Agreement" the non-binding heads of agreement made
between Multiplex Fundraising Systems
Limited (1), the Company (2), William Gill
(3) and Kieran Horlacher (4) regarding the
raising of funds for charity and political
parties a copy of which non-binding heads of
terms is contained in Schedule Nine;
"Irish Agreement" such legally binding agreement as the
Company and the Buyers may enter into with
the other parties to the Heads of Agreement
pursuant to the Heads of Agreement and being
a legally binding agreement in respect of
raising funds in the Republic of Ireland for
such policital party or parties as the
parties to the Irish Agreement shall agree;
"Australian Agreement" such legally binding agreement as the
Company and the Buyers may enter into with
the other parties to the Heads of Agreement
pursuant to the Heads of Agreement and being
a legally binding agreement in respect of
raising funds in New South Wales, Australia
for such political party or parties as the
parties to the Australian Agreement shall
agree; and
"Relevant Profits" such pre-tax profits which become payable to
the Company and/or the Buyers under the
terms of an Irish Agreement or an Ausralian
Agreement (as the case may be) in respect of
19
any period of 12 months thereof as such
profits are calculated pursuant to the Irish
Agreement or the Australian Agreement (as
the case may be).
11.2 The Buyers shall (or will procure that the Company shall) negotiate in
good faith using all reasonable endeavours with the other parties to
the Heads of Agreement with a view to agreeing terms on and entering
into an Irish Agreement and an Australian Agreement. The Seller and the
Covenantors acknowledge that the Company and/or the Buyers shall be
entitled to conduct such negotiations in such manner as the Company
and/or the Buyers think fit, and for the benefit of the Company and/or
the Buyers.
11.3 The Buyers shall pay to the Seller 50 per cent of the Relevant Profits
received by the Buyers and/or the Company promptly on receipt by the
Buyers of an invoice from the Seller or its duly authorised
representatives requesting such a payment, such invoice to be delivered
in accordance with clause 20 of this Agreement.
11.4 Any payment by the Buyers pursuant to clause 11.3 shall be by way of
additional consideration for the sale of the Shares and the obligations
of the Seller pursuant to this Agreement.
12 PROTECTION OF GOODWILL
12.1 The Seller and the Covenantors recognise the paramount importance of
the goodwill of the Group to the Buyers which is reflected in the
consideration paid by the Buyers for the Shares. Accordingly, the
Covenantors who have acquired and will hereafter continue to acquire
detailed knowledge of the Business including Customers, suppliers of
each Group Company and terms of business used by each Group Company is
prepared to enter into the commitments contained in this clause to
ensure that the Buyers' interest in that goodwill is properly
protected.
12.2 For the period of 24 months from Completion (for the purposes of this
clause 12, the "Relevant Period"), the Covenantors will:
12.2.1 supply to the Buyers such information (other than any which is
public knowledge) as any Buyer may reasonably require which
relates to the Business and the Group; and
12.2.2 recommend and introduce the Buyers to Customers and to
suppliers and Business connections of the Group.
20
12.3 The Covenantors jointly and severally undertake that they will not
without the prior written consent of the Buyers during the Relevant
Period operate, carry on or be engaged, concerned, involved or
interested directly or indirectly in any of the Restricted Activities
in competition directly or indirectly with a Group Company within the
Restricted Territory.
12.4 The Covenantors jointly and severally undertake that they will not
without the prior written consent of the Buyers during the Relevant
Period:
12.4.1 solicit or attempt to solicit from any Customer any orders,
enquiries or business in respect of any of the products sold
by a Group Company in the preceding 12 months in the course of
the Restricted Activities within the Restricted Territory;
12.4.2 either accept (directly or indirectly) or procure or attempt
to procure the diversion away from a Group Company and/or the
Buyers of any orders, enquiries or business in respect of the
Restricted Activities from any Customer within the Restricted
Territory;
12.4.3 procure or attempt to procure any supplier of a Group Company
to cease supplying the Business or to unfavourably alter the
terms upon which supplies are made, or do or say anything
which may lead any supplier of a Group Company to cease
supplying the Business or to unfavourably alter the terms on
which supplies are made;
12.4.4 procure or induce or endeavour to procure or induce any of the
employees of a Group Company engaged in a senior or managerial
position or who have had direct contact with Customers in the
course of their duties to cease working for a Group Company;
12.4.5 make a statement (written or oral) which could be considered
harmful to the reputation of a Group Company;
12.4.6 employ or engage any person who held a senior or managerial
position with a Group Company or who has had direct contact
with Customers in the course of his duties working for a Group
Company;
12.4.7 either alone or jointly with, through or as managers,
advisers, consultants or agents for a person, directly or
indirectly, use in connection with a business which competes,
directly or indirectly, with the Business, any of the
Intellectual Property Rights; or
21
12.4.8 either alone or jointly with, through or as managers,
advisers, consultants or agents for a person, directly or
indirectly, use in connection with a business which competes,
directly or indirectly, with the Business, a name including
the word "Logan" or the words "Logan Leisure" or any
combination of such word or words) which is intended or is
likely to be confused with the Business or a trading name of a
Group Company.
12.5 It is further agreed that the foregoing provisions of clauses 12.3 and
12.4 shall apply equally to and during such further period (if any)
from the date of expiry of the Relevant Period until 12 months after
the relevant Covenantor shall cease to be an employee of a Group
Company and all remedies conferred by this clause 12 shall apply
equally to any breach by the relevant Covenantor of this clause 12 in
respect of such further period as aforesaid.
12.6 The Seller and the Covenantors jointly and severally undertake that
they will not (and so far as may be applicable, shall use all
reasonable endeavours to procure that none of the officers, employees,
servants or agents of the Seller or the Group will) at any time after
Completion without the Buyers' prior written consent:
12.6.1 make any public announcement regarding the Group, the Buyers
or the transactions contemplated by this Agreement; or
12.6.2 disclose or use any Confidential Information (other than any
which is or becomes public knowledge otherwise than as a
result of any breach of this clause) relating to a Group
Company and/or the Business which they have acquired prior to
Completion.
12.7 Save as specified in clause 12.8, the restrictions set out in clauses
12.3, 12.4 and 12.5 are to prevent the Covenantors from carrying out
any of the activities therein prohibited on his own behalf or jointly
with or as servant, agent, manager, employee, consultant, director or
shareholder of any other person, firm, company or body.
12.8 Nothing in this clause is to prevent:
12.8.1 Gavin Logan from properly performing his duties under the
Service Contract; or
12.8.2 each Covenantor from holding for investment purposes up to 2%
of the issued share capital of a company whose shares are
dealt in or quoted on a recognised Stock Exchange.
12.9 Each of the commitments contained in this clause 12 gives rise to a
separate,
22
severable, independent and separately enforceable obligation from the
Seller and the Covenantors independent of the other commitments.
12.10 The parties consider the duration, extent and application of the
respective commitments contained in this clause 12 to be reasonable as
between themselves, in the public interest and necessary for the
protection of the legitimate interests of the Buyers and the Group. If,
however, any such restriction is found by a Court or regulatory
authority or agency of competent jurisdiction to be void or
unreasonable or unenforceable but would be valid, reasonable and
enforceable if certain words were deleted and/or the period thereof
and/or the geographical area dealt with thereby was reduced, then the
commitments will apply with those words deleted or such other
modifications as may be necessary to make those commitments valid,
reasonable and enforceable.
12.11 The Buyers may by written notice to any Covenantor vary by one or more
stages the terms of any part of this clause 12 as it may apply to him
by reducing (but not increasing) any one or more of:
12.11.1 the period during which and/or activities to which the
commitments are to apply; and
12.11.2 the geographical area to which the commitments relate.
12.12 It is acknowledged and agreed by the Covenantors and (where
appropriate) the Seller that damages may not be an adequate remedy for
breach of any of the undertakings and covenants given by the
Covenantors under this clause 12 and that accordingly, without
fettering or limiting the Court's discretion in any way, equitable
remedies, including that of injunction, might be available in respect
of any such breach or threatened breach of the same Provided always
that, without prejudice to the foregoing (but so that the following
shall be an alternative and not in addition to any equitable or other
relief or award which may be granted by the Court) in the event of the
breach of any of the provisions of this clause 12 by any Covenantor
(and where capable of being remedied such breach has not been remedied
within 28 days of the Buyers or the Company having required the
relevant Covenantor to remedy the same) the Buyers may (but shall not
be obliged to) claim damages on the basis that(pound)1,059,999 (one
million and fifty nine thousand nine hundred and ninety nine pounds
sterling) of the Consideration is paid for goodwill. As a result the
loss suffered by the Buyers by virtue of any breach of the undertakings
and covenants contained in this clause 12 will be a loss referrable to
goodwill lost, damaged or likely to be lost or damaged.
23
13 WARRANTIES
13.1 The Warrantors hereby jointly and severally warrant to the Buyers that
each Warranty is true, complete, accurate and not misleading at the
date of this Agreement. Immediately before the time of Completion, the
Warrantors are deemed to jointly and severally warrant to the Buyers
that each Warranty is true, complete, accurate and not misleading at
the date of Completion. For this purpose only, where in a Warranty
there is an express or implied reference to the "date of this
Agreement", that reference is to be construed as a reference to the
"date of Completion".
13.2 The Warrantors acknowledge that the Buyers are entering into this
Agreement in reliance on each Warranty which has also been given as a
representation and with the intention of inducing the Buyers to enter
into this Agreement.
13.4 The Warranties set out in each paragraph of Schedule Four shall be
separate and independent and, save as expressly provided, shall not be
limited by reference to any other paragraph or anything in this
Agreement.
13.5 The Warranties are qualified by the facts and circumstances fully,
fairly and specifically disclosed in the Disclosure Letter. No other
knowledge relating to a Group Company (actual, constructive or imputed)
prevents or limits a claim made by by the Buyers for breach of clause
13.1. The Warrantors may not invoke the knowledge of the Buyers
(actual, constructive or imputed) of a fact or circumstance which might
make a Warranty untrue, incomplete, inaccurate or misleading as a
defence to a claim made by the Buyers for breach of clause 13.1.
13.6 Without restricting the rights of the Buyers or the ability of the
Buyers to claim damages on any basis available to them if any of the
Warranties is broken or proves to be untrue or misleading, the
Warrantors hereby jointly and severally covenant with the Buyers that
the Warrantors will, on demand, pay to the Buyers in cash as a
reimbursement of the Consideration paid by the Buyers for the Shares:
13.6.1 an amount equal to the loss suffered by the Buyers as a result
of the Warranties not being true, complete, accurate and not
misleading; and
13.6.2 all reasonable costs and expenses incurred by the Buyers, and
any Group Company, as a result of such breach on a full
indemnity basis.
13.7 Any information supplied by or on behalf of a Group Company (or any
officer, employee or agent thereof) to a Warrantor or its advisers in
connection with the Warranties, the Tax Deed or the Irish Tax Deed or
the information disclosed in the Disclosure Bundle or the Disclosure
Letter shall not constitute a warranty,
24
representation, or guarantee as to the accuracy of such information in
favour of the Warrantors and the Warrantors hereby jointly and
severally undertake to the Buyers to waive any and all claims which
they might otherwise have against the Group Company or against any
officer or employee or agent thereof in respect of such claims.
13.8 Gavin Logan hereby warrants to the Buyers that by virtue of entering
into the Service Contract he will not be in breach of any express or
implied terms of any other contract or of any other obligations binding
upon him. Immediately before the time of Completion, Gavin Logan is
deemed to warrant to the Buyers that by virtue of entering into the
Service Contract he will not be in breach of any express or implied
terms of any other contract or of any other obligations binding upon
him.
14 LIMITATION OF THE WARRANTORS' LIABILITY
14.1 The liability of the Warrantors in respect of a Relevant Claim:
14.1.1 shall not arise unless the amount of what would otherwise be
recoverable from the Warrantors (but for this clause 14.1.1)
in respect of the Relevant Claim exceeds (pound)6,000 (for
which purpose a series of claims arising out of the same or
similar circumstances or out of the same Warranty shall be
aggregated and treated as one single Relevant Claim for the
purposes of this clause 14.1.1) and in the event that the
amount of such Relevant Claim exceeds (pound)6,000 the
Warrantors are liable for the whole amount of such Relevant
Claim; and
14.1.2 shall not (when aggregated with the amount of all other
Relevant Claims and all Tax Claims) exceed the Consideration
paid by the Buyers under this Agreement.
14.2 The Warrantors shall have no liability in respect of any Relevant Claim
or any Tax Claim unless the Buyers shall give to the Warrantors written
notice of the Relevant Claim or the Tax Claim (as appropriate) stating
in reasonable detail on the basis of the information then obtainable
the nature of the Relevant Claim or the Tax Claim (as appropriate), an
indication of the category of warranty or warranties relied on in the
case of a Relevant Claim and, if practicable, the amount claimed or an
estimate thereof:
14.2.1 in respect of a Relevant Claim involving or relating to the
Warranty contained in paragraph (14) of Schedule Four or in
respect of a Tax Claim:
14.2.1.1 on or before 21 years and one month from the Balance
Sheet
25
Date where there has been fraudulent or negligent
conduct in respect of the matter giving rise to the
Relevant Claim or the Tax Claim; or
14.2.1.2 except where clause 14.2.1.1 applies, on or before
seven years and one month from the Balance Sheet
Date; and
14.2.2 in respect of any other Relevant Claim, on or before 30 June
2000.
14.3 Clause 14.1 and clause 14.2 do not apply in respect of a Relevant Claim
involving or relating to the Warranties contained in paragraphs (7) or
(8) of Schedule Four.
14.4 If the Buyers shall have a right both to make a Relevant Claim against
the Warrantors and a Tax Claim against the Warrantors, then to the
extent that such claim shall be validly made on either ground, it shall
be deemed to be made under the Tax Deed and/or the Irish Tax Deed (as
appropriate) and not claimable under the Warranties. Payment of any
Relevant Claim or Tax Claim made on one ground shall satisfy and
discharge, to the extent that it is co-extensive, any other Relevant
Claim or Tax Claim which is capable of being brought against the
Warrantors on either ground.
15 INDEMNITY
The Warrantors hereby jointly and severally covenant to keep the Buyers
(or either of them) fully indemnified and held harmless in respect of
any claim made or brought against a Group Company by CUC Entertainment
or any person connected with CUC Entertainment in relation to copyright
enuring or inherent in the form of international advertisers' agreement
or any other such agreement used or issued in connection with the
Business.
16 INTEREST
If any sum due and payable by any party under this Agreement or the Tax
Deed is not paid on the due date in accordance with the provisions of
this Agreement or the Tax Deed, the party required to make such payment
shall in addition to that sum pay interest to the party due to receive
such payment from the date for payment of the sum to and including the
day of actual payment of the sum (or the next Business Day if the day
of actual payment is not a Business Day). The interest accrues from day
to day (before and after judgment) at the rate of 3% per year above the
base rate of National Westminster Bank plc (or, if there is no base
rate, at a similar rate reasonably selected by the party due to receive
such payment) and is compounded quarterly.
26
17 GENERAL PROVISIONS
17.1 This Agreement shall be binding upon and enure for the benefit of the
successors of the parties but shall not be assignable except in the
case of an assignment by the Buyers after Completion to any person
associated with the Buyers.
17.2 This Agreement (together with any documents referred to herein)
constitutes the whole agreement between the parties and no variations
shall be effective unless made in writing signed by the parties.
17.3 The provisions of this Agreement in so far as the same shall not have
been performed at Completion shall remain in full force and effect
notwithstanding Completion.
17.4 For the avoidance of doubt, the liability of the Covenantors for all
obligations expressed to be those of the Covenantors are joint and
several.
17.5 Any right of rescission conferred upon any party under this Agreement
shall be in addition to and without prejudice to all other rights and
remedies available to it and no exercise or failure to exercise such
right of rescission shall constitute a waiver by that party of any such
other right or remedy.
17.6 The Buyers may release or compromise the liability of the Seller and
any of the Covenantors hereunder or grant to the Seller or any
Covenantor time or other indulgence without affecting the liability of
any other of them hereunder.
17.7 The illegality, invalidity or unenforceability of any provision of this
Agreement does not affect the continuation in force of the remainder of
this Agreement.
17.8 At the request of the Buyers or either of them, the Seller and each of
the Covenantors shall (and shall procure that any other necessary
person shall) at such person's own cost and expense execute all such
documents and do all such acts and things as may be required subsequent
to Completion for assuring to or vesting the beneficial ownership of
the Shares, the Letville Share and the Floracourt Share as provided for
herein or otherwise in order to perfect such right, title and interest
to the Shares, the Letville Share and the Floracourt Share or of a
Group Company to any asset.
17.9 The Seller and each of the Covenantors shall provide or procure the
provision to the Buyers of all information in their possession or under
their control which the Buyers shall from time to time reasonably
require subsequent to Completion relating to the Business and affairs
of the Company and will give, or procure to be given, to the
27
Buyers, their advisers and agents such access to (including the right
to take copies of) any documents in their possesion or under their
control containing such information as the Buyers may from time to time
reasonably require.
18. ANNOUNCEMENTS
No announcement or statement (whether oral or written) concerning this
Agreement shall be made to the press or other communications medium
unless such announcement or statement shall have been agreed between
the Seller and the Buyers or unless such announcement or statement
shall be a requirement of law and the Buyers shall first have consulted
with the Seller as to the terms of such announcement.
19. COSTS
Except where this Agreement provides otherwise, each party shall pay
its own legal, tax, accounting and financial advisory costs and
expenses relating to the negotiation, preparation, execution and
performance by it of this Agreement and of each document referred to in
it.
20. NOTICES
20.1 Any notice or other communication under or in connection with this
Agreement shall be in writing and shall be delivered personally or sent
by first class post in a pre-paid envelope marked confidential and
addressed to the party due to receive the notice or communication:
20.1.1 in the case of the Buyers, to the address given for the Buyers
in clause 2.2;
20.1.2 in the case of the Seller, to the registered office given for
the Seller in clause 2.1; and
20.1.3 in the case of the Covenantors, to the address given for each
Covenantor in clause 2.3
or to such other address in the United Kingdom as any party may specify
in writing to the other parties in accordance with this clause.
20.2 In the absence of evidence of earlier receipt, any notice or other
communication shall be deemed to have been duly given:
28
20.2.1 if delivered personally, when left at the address referred to
in clause 20.1; or
20.2.2 if sent by mail, two days after posting it.
21. GOVERNING LAW AND JURISDICTION
21.1 This Agreement is governed by English law.
21.2 The courts of England have exclusive jurisdiction to hear and decide
any suit, action or proceedings, and 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.
21.3 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.
21.4 Process by which any Proceedings are begun in England may be served on
a party to this Agreement by being delivered in accordance with clauses
20.1 and 20.2. Nothing in this clause 21.4 affects the right to serve
process in another manner permitted by law.
22. COUNTERPARTS
This Agreement may be executed in any number of counterparts each of
which when executed is an original, but all the counterparts together
constitute the same document.
29
SCHEDULE ONE
The Buyers and the Shares
1 2 3
Number of Proportion of
Shares to be Consideration
Name of Buyer acquired payable (%)
- --------------------------------- ------------ -------------
Transmedia Europe Inc 5 50
Transmedia Asia Pacific Inc 5 50
-- ----
10 100%
30
SCHEDULE TWO
Information about the Company
and the Subsidiaries
PART 1: THE COMPANY
1 Registered number: 60973
2 Date of incorporation: 31 January 1995
3 Place of incorporation: Jersey
4 Address of registered
office: Cater Allen House, Commercial Street, St
Helier, Jersey JE4 5XZ, Channel Islands
5 Type of company: Private company limited by shares
6 Authorised share capital: (pound)10,000
7 Issued share capital: (pound)10 comprising 10 ordinary shares
of(pound)1 each
8 Directors: Ian Michael Parkin Peter Stuart Langton
Christopher Alec McFadyen Timothy Nicholas
Scott Warren
9 Secretary: Channel Registrars Limited
10 Accounting reference date: 31 March
11 Auditors:
12 VAT registration: Not registered for VAT
13 Bank accounts: None
14 Charges and Encumbrances: None
31
PART 2: THE SUBSIDIARIES
LETVILLE HOLDINGS LIMITED
1 Registered number 244728
2 Date of incorporation: 14 February 1996
3 Place of incorporation: Republic of Ireland
4 Address of registered
office: Sibthorpe, 37A Leeson Park, Dublin 6,
Republic of Ireland
5 Type of company: Private company limited by shares
6 Authorised share capital: IR(pound)100,000
7 Issued share capital: IR(pound)2 comprising 2 ordinary shares of
IR(pound)1 each
8 Percentage owned by the
Company: 100%
9 Directors: Peter Manahan
Gavin Logan
10 Secretary: Gavin Logan
11 Accounting reference date: 31 March
12 Auditors: Rothwell McHugh & Co, 19 Herbert Street,
Dublin 2, Republic of Ireland
13 VAT registration number: Not required to be registered
32
14 Bank accounts: None
15 Charges and Encumbrances: None
33
FLORACOURT MARKETING LIMITED
1 Registered number: 244263
2 Date of incorporation: 5 February 1996
3 Place of incorporation: Republic of Ireland
4 Address of registered
office: Sibthorpe, 37A Leeson Park, Dublin 6,
Republic of Ireland
5 Type of company: Private company limited by shares
6 Authorised share capital: IR(pound)100,000
7 Issued share capital: IR(pound)2 comprising 2 ordinary shares of
IR(pound)1 each
8 Percentage owned by the
Company: 100%
9 Directors: Peter Manahan
Gavin Logan
10 Secretary: Gavin Logan
11 Accounting reference date: 31 March
12 Auditors: Rothwell McHugh & Co, 19 Herbert Street,
Dublin 2, Republic of Ireland
13 VAT registration number: 8244263P
14 Bank accounts: AIB Bank
Current account: 39744000
Current account: 23963061
15 Charges and Encumbrances: None
34
SCHEDULE THREE
(Items for delivery by the Seller at Completion)
1 Duly executed transfers of the Shares, the Letville Share and the
Floracourt Share and of any shares in any of the Subsidiaries not held
by the Company by the registered holders thereof in favour of the
Buyers or their nominees (in the case of the Shares), the Company (in
the case of the Letville Share) and Letville (in the case of the
Floracourt Share).
2 Any waiver, consent or other document necessary to give the Buyers or
their nominees full legal and beneficial ownership of the Shares, to
give the Company full legal and beneficial ownership of the Letville
Share and to give Letville full legal and beneficial ownership of the
Floracourt Share.
3 A duly certified copy of the Business Transfer Agreement and any
waiver, consent or other document necessary to give the Group full
legal and beneficial ownership of the Northern Ireland Business.
4 The relative share certificates relating to the Shares, the Letville
Share and the Floracourt Share and the shares in each of the
Subsidiaries (whether held by the Company or otherwise) (or an
indemnity for lost share certificates in a form reasonably satisfactory
to the Buyers).
5 As evidence of the authority of each person executing a document
referred to in clause 10 on the Seller's behalf, a copy, certified to
be a true copy by a director or the secretary of the Seller, of a
resolution of the Seller's board of directors or an authorised
committee of that board conferring that authority.
6 As evidence of the authority of each person executing a document
referred to in clause 10 on a Covenantor's behalf, a copy of any
applicable power of attorney, certified by the Seller's Solicitors to
be a true copy.
7 The statutory books and registers and other books of each Group Company
written up to date.
8 The books of unissued share certificates and the common seals of each
Group Company.
9 The certificates of incorporation and any certificates of incorporation
on change of name of the Company and the Subsidiaries.
35
10 Certificates as to the balance or balances on the banking accounts of
the Republic of Ireland Business, the Northern Ireland Business and
each Group Company at the close of business not earlier than three
Business Days immediately prior to the date of Completion.
11 The cash book balances of the Republic of Ireland Business, the
Northern Ireland Business and each Group Company as at not earlier than
three Business Days immediately prior to the date of Completion with
statements reconciling such cash book balances and the relevant cheque
books with the balances referred to in 10.
12 All books of account, cheque books, paying-in books and unused cheques
and other documents books and records of the Republic of Ireland
Business, the Northern Ireland Business and each Group Company.
13 The Tax Deed and the Irish Tax Deed executed by the Seller and the
Covenantors.
14 All title deeds to the Properties which are in or under the possession
or control of the Seller.
15 A counterpart of the Service Contract duly executed by Gavin Logan.
16 All charges mortgages and debentures to which a Group Company may be
subject.
17 The written resignations of the auditors of each Group Company
incorporating a statement pursuant to Section 394 of the Act that there
are no circumstances connected with such resignations which the
resigning auditors consider should be brought to the attention of the
members or creditors of that Group Company.
18 Duly certified copies of the minutes of meetings of the board of
directors of the Seller and the Board approving execution of the
Business Transfer Agreement.
19 A counterpart of the Deed of Termination executed by the Seller, the
Company and the Covenantors.
20 The relative share certificates in respect of the Escrow Shares,
together with all executed transfers in respect of the Escrow Shares
and all executed powers of attorney/stock powers deposited with the
Seller's Solicitors pursuant to the Escrow Letter or otherwise.
21 The New Escrow Agreement and the New Escrow Letter duly executed by the
Seller and the Covenantors.
36
22 The Tenancy Agreement duly executed by the Covenantors and Floracourt.
37
SCHEDULE FOUR
(Warranties and representations)
A THE COMPANY AND THE WARRANTORS
1 Capacity
Each of the Warrantors has full power and authority and has taken all
actions necessary to enter into and perform, and to exercise its rights
and perform its obligations under, this Agreement, the Tax Deed, the
Irish Tax Deed and each document to be executed at or before
Completion. This Agreement constitutes, and the Tax Deed, the Irish Tax
Deed and each other such document will, when executed, constitute,
legal valid and binding obligations on each of the Warrantors (if a
party to any such document) in accordance with the terms thereof.
2 Liabilities owing to or by the Warrantors
There is not outstanding any indebtedness or other liability (actual or
contingent) owing by the Company to any of the Warrantors or any
director or any person connected with any of the Warrantors or with any
director nor is there any indebtedness owing to the Company by any such
person.
3 Warrantors' other interests
None of the Warrantors, and no person connected with any of the
Warrantors, has any interest, directly or indirectly, in any business
other than that now carried on by the Company which is or is likely to
be or become competitive with the Business.
B INFORMATION
4 Information - General
(a) All information given by, or on behalf of, the Warrantors or
the Company to any Buyer, its advisers or agents before or
during the negotiations leading to this Agreement is true,
complete, accurate and not misleading.
(b) All information about the Shares, the Letville Share, the
Floracourt Share, each Group Company and the Business which
might be material for disclosure to a buyer of the Shares, the
Letville Share or the Floracourt Share has been disclosed to
the Buyers in writing.
38
5 The Agreement and the Disclosure Letter
The information set out in this Agreement and the Disclosure Letter
(including each Annex to the Disclosure Letter) is true, complete,
accurate and not misleading.
C THE COMPANY'S CONSTITUTION AND THE SHARES
6 Existence since incorporation
The Company has been in continuous existence since incorporation.
7 The Shares, the Letville Share and the Floracourt Share
The Seller is the only legal and beneficial owner of the Shares, the
Letville Share and the Floracourt Share. The Shares comprise the whole
of the Company's allotted and issued share capital, have been properly
allotted and are fully paid or credited as fully paid. The Letville
Share has been properly allotted and is fully paid or credited as fully
paid. The Floracourt Share has been properly allotted and is fully paid
or credited as fully paid.
8 Encumbrances
There is no Encumbrance, and there is no agreement, arrangement or
obligation to create or give an Encumbrance, in relation to any of the
Shares, the Letville Share or the Floracourt Share or any 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, the
Letville Share or the Floracourt Share.
9 Memorandum and articles
The copy of the memorandum and articles of association of the Company
annexed to the Disclosure Letter is true and complete and has embodied
therein or annexed thereto a copy of every such resolution or agreement
as is referred to in Section 380 of the Act. The Company is operating
and has always operated its business in all respects in accordance with
its memorandum and articles of association at the relevant time.
10 Options etc
No person has the right (whether exercisable now or in the future and
whether contingent or not) to call for the allotment, issue, sale or
transfer of any share or loan capital of the Company under any option
or other agreement (including, without specific or generic limitation,
conversion rights and rights of pre-emption).
11 Subsidiary Undertakings
The Company does not have and has never had a subsidiary undertaking
other than
39
Letville and Floracourt. The Company has no interest in, and has not
agreed to acquire an interest in, a corporate body other than Letville
and Floracourt.
D THE COMPANY'S ASSETS
12 Ownership
The Company is the sole legal owner and sole absolute beneficial owner
of the goodwill, undertaking, and all assets or rights actually used or
necessary for use in the Northern Ireland Business and/or the Republic
of Ireland Business (including, but not limited to, the benefit as
lessee, hirer or purchaser of every deed or contract of lease, hire or
deferred or conditional purchase agreement in respect of the Properties
or any other asset, in favour of the owner or proprietor (or one of the
owners or proprietors) from time to time of the Northern Ireland
Business or the Republic of Ireland Business in relation to the
Northern Ireland Business and/or the Republic of Ireland Business) and,
without prejudice to the generality of the foregoing, the Company has
completed the purchase of the entire undertaking and assets of the
Northern Ireland Business as contemplated by the Option Agreement
and/or the Business Transfer Agreement and the purchase of the entire
undertaking and assets of the Republic of Ireland Business.
13 Consents
There have been granted all necessary consents for the acquisition by
the Company of every asset or right referred to in paragraph 12, and
there has been no breach of any requirement or condition of or relating
to any such consent.
14 Taxation
Since the date of its incorporation, the Company:
(a) save as disclosed in the Disclosure Letter, has not engaged in
any taxable activity (whether of an income or capital nature)
nor has it incurred any obligation to pay any Taxation; and
(b) save as disclosed in the Disclosure Letter, the Company has no
obligation to make any returns to Commissioners of Inland
Revenue, HM Customs & Excise or any other Taxation Authority.
40
E THE COMPANY AND ITS BANKERS
15 Borrowings
(a) The Company does not currently have, and has not at any
previous time had, any overdrafts, loans or other financial
facilities outstanding or available to it.
(b) The Bank Accounts are in credit.
16 Bank Accounts
(a) A statement of all the bank accounts of Floracourt and of the
credit balances on all such accounts as at 11 May 1998 is
annexed to the Disclosure Letter and such statement is an
original statement obtained from Floracourt's bankers.
Floracourt has no other bank or deposit accounts (whether in
credit or overdrawn) which are not included in such statement.
Since the date of such statement, there have been no payments
out of any such accounts except for routine payments.
(b) Neither the Company nor Letville have any bank or deposit
accounts.
41
SCHEDULE FIVE
(Action pending Completion)
The Seller shall ensure that each Group Company will:
1 not do or omit to do anything which constitutes or would be likely to
constitute a material breach of the Warranties;
2 continue to carry on the Business in the ordinary and normal course
without material alterations as to its location, scope or operations;
3 settle all debts incurred in the normal course of the Business within
the normal periods of credit taken by the Company;
4 incur no capital expenditure or long term commitments outside the
normal course of business without the prior written consent of the
Buyers;
5 not enter into, modify or agree to terminate any material contract
without the prior written consent of the Buyers;
6 save for debt collection in the ordinary course of business, not settle
or agree to settle any legal proceedings relating to the Business
without the prior written consent of the Buyers;
7 maintain in force the existing insurance cover effected by the Company;
8 permit the Buyers to have reasonable access to the accounting records
of the Company and any other information it may reasonably require for
the purposes of ensuring the orderly and efficient continuation of the
Business and the integration of the Company within the Buyers' group of
companies; and
9 make no payments to the Seller or any Covenantor (other than normal
remuneration and benefits) without the prior written consent of the
Buyers.
42
SCHEDULE SIX
DATED MAY 1998
(1) COMPASS TRUSTEES LIMITED
- and -
(2) GAVIN LOGAN AND JOANNE LOGAN
- and -
(3) TRANSMEDIA EUROPE INC AND TRANSMEDIA ASIA PACIFIC INC
-------------------------------------
TAX DEED
relating to PORKPINE LIMITED
and its subsidiaries other than
Letville Holdings Limited or Floracourt Marketing Limited
or any subsidiaries of Letville Holdings Limited
or Floracourt Marketing Limited
-------------------------------------
Hill Dickinson
34 Cuppin Street
Chester CH1 2BN
Tel: 01244 896600
Fax: 01244 896601
Ref: AGS/JW/SJL/1028949
43
Date of Deed: May 1998
PARTIES
(1) COMPASS TRUSTEES LIMITED, a company incorporated in Jersey (registered
number: 60972) whose registered office is at Cater Allen House,
Commercial Street, St. Helier, Jersey JE4 5XZ, Channel Islands (the
"Seller");
(2) GAVIN LOGAN, of 42 Princetown Road, Bangor, Co. Down, Northern Ireland
("Mr Logan") and JOANNE LOGAN, also of 42 Princetown Road, Bangor, Co.
Down, Northern Ireland ("Mrs Logan"); and
(3) TRANSMEDIA EUROPE INC, a company incorporated under the laws of the
state of Delaware, and TRANSMEDIA ASIA PACIFIC INC, a company
incorporated under the laws of the state of Delaware, whose principal
place of business in the United Kingdom is 11 St James's Square, London
SW1Y 4LB (each a "Buyer" and, together, the "Buyers").
RECITAL
The Seller has agreed to sell the entire issued share capital of the Company to
the Buyer. The terms of the sale are set out in the Agreement.
1 DEFINITIONS AND INTERPRETATION
1.1 In this Deed, the following expressions shall have the following
meaning:
"1998 Accounts" the Company Accounts and the Partnership
Accounts for the Accounting Period ended on
the Balance Sheet Date;
"Company Accounts" each Group Company's individual accounts (as
that term is used in Section 226 of the Act)
and the cash flow statement and the Group's
group accounts (as that term is used in
section 227 of the Act) and the consolidated
statement of cashflow and the other
documents which are required by law to be
annexed to those accounts;
"Act" the Companies Act 1985;
44
"Actual Liability to
Taxation" any liability of the Company and/or the
Subsidiaries to make actual payment of (or
of an amount in respect of) Taxation;
"Agreement" an agreement dated May 1998 made between the
Seller (1) the Buyers (2) and Mr Logan and
Mrs Logan (3) relating to the sale and
purchase of all the shares in the Company;
"Balance Sheet Date" 31 March 1998;
"Claim" any letter, assignment, notice, demand or
other document issued or action taken by any
Taxation Authority from which it appears
that the Company and/or the Subsidiaries is
or may be or may become liable to any
Liability to Taxation;
"Company" Porkpine Limited a company incorporated in
Jersey (registered number: 60973) whose
registered office is at Cater Allen House,
Commercial Street, St. Helier, Jersey JE4
5XZ, Channel Islands;
"Covenantor" the Seller, Mr Logan or Mrs Logan and
"Covenantors" shall be construed
accordingly;
"Effective Liability to
Taxation" shall have the meaning provided in clause
1.6;
"Event" includes any event act transmission or
omission or deemed event act transaction or
omission whether or not the Company and/or
the Subsidiaries is a party to it including
(without limitation):
(a) a failure to make sufficient
distributions to avoid an
apportionment of income under
sections 423 and 428 and Schedule
19 to ICTA;
(b) any receipt or accrual of income or
gains, distribution, acquisition,
disposal, transfer,
45
payment, loan or advance;
"ICTA" the Income and Corporation Taxes Act 1988;
"Inheritance Tax" any Taxation payable pursuant to the
Inheritance Tax Act 1984;
"Liability to Taxation" any Actual Liability to Taxation and/or
Effective Liability to Taxation and/or
payment referred to in clause 2.1;
"non-availability" includes in relation to a Relief or right to
repayment of Taxation the reduction
modification loss claw-back counteraction
disallowance or cancellation of that Relief
or right to repayment of Taxation or a
failure to obtain a Relief to which the
Company and/or the Subsidiaries assumed it
was entitled;
"Partnership Accounts" accounts prepared in respect of the Northern
Ireland Business as carried on by Mr Logan
and Mrs Logan in partnership (or by either
Mr Logan or Mrs Logan as sole trader) from
time to time and reported on as such by the
Seller's Accountants or such other firm of
chartered accountants as shall report on
such accounts from time to time;
"Post Completion Relief" (a) any Relief which is not available
before Completion and which arises
as a result of any Event occurring
after Completion or in respect of
any period ended after Completion;
or
(b) any Relief which arises as a result
of any Event or combination of
Events occurring after the Balance
Sheet Date and before Completion
where such Event or combination of
Events occurs within the ordinary
course of business of the Company
and/or the Subsidiaries as carried
on during that period;
46
"Relevant Relief" (a) any Relief which was treated as an
asset of the Company and/or the
Subsidiaries in the 1998 Accounts;
(b) any Relief which was taken into
account in computing (and so
reducing or eliminating) any
provision for Taxation which
appears in the 1998 Accounts or
which would have appeared in the
Accounts but for the presumed
availability of such Relief
and for this purpose "Relief" shall include
any Relief which the Company and/or the
Subsidiaries has assumed is available to it
and has been utilised in the manner
described in (a) or (b) above whether or not
at the time of such utilisation the Company
and/or the Subsidiaries was actually
entitled to any such Relief;
"Relief" any loss relief allowance exemption set-off
or deduction or right to repayment or credit
or other relief of a similar nature granted
by or available in respect of any Taxation
or for the purposes of computing income
profits or gains for Taxation;
"Subsidiary" any subsidiary of the Company at the date of
this Deed other than Letville, Floracourt or
any subsidiary or Letville or Floracourt;
and
"Taxation" all forms of taxation, and statutory,
governmental, state, provincial, local
governmental or municipal impositions,
duties, imposts, contributions and levies,
in each case whether in the United Kingdom,
or elsewhere in the world whenever imposed
and any payment whatsoever which the Company
and/or the Subsidiaries may be or become
bound to make to any person as a result of
any enactment relating to Taxation and all
penalties, fines, charges, costs and
interest relating thereto which the Company
and/or the
47
Subsidiaries may be or become liable to pay
to any Taxation Authority or any other
person.
1.2 Reference to income and profits or gains earned, accrued or received
includes income or profits or gains deemed to have been, treated as or
regarded as earned, accrued, received or otherwise arising for the
purposes of any legislation.
1.3 Reference to a Claim for Taxation shall include any Claim whether made
before or after the date of this Deed (whether or not the relevant
Actual Liability to Taxation is satisfied at that date).
1.4 Reference to the result of an Event or Events on or before the date of
this Deed includes the combined result or results of two or more Events
one of which shall have taken place on or before that date and is
outside the ordinary course of business and the second of which is a
direct consequence of the first.
1.5 There shall be excluded (without limitation) from the meaning of
"ordinary course of business" the following:
1.5.1 any Taxation arising under Part VIII Taxes Management Act 1970
(charges on non-resident);
1.5.2 any Taxation arising under Part XVII ICTA (tax avoidance);
1.5.3 any Taxation arising in respect of any distribution (as
defined in Part VI ICTA) or deemed distribution;
1.5.4 any Taxation arising in respect of the acquisition, disposal
or supply or deemed acquisition, disposal or supply of any
assets, goods, service or business facility of any kind
(including a loan of money or the letting hire or licensing of
any tangible or intangible property) for a consideration
deemed for Taxation purposes to be in excess of that (if any)
actually received or for a consideration deemed for Taxation
purposes to be less than that actually given, to the extent of
that excess or shortfall (as the case may be);
1.5.5 any Taxation arising in respect of a transaction which may
result in the Company and/or the Subsidiaries and/or the Buyer
becoming liable to pay or bear Taxation chargeable directly or
primarily against or attributable directly or primarily to
another person firm or company other than any Taxation which
the Company and/or the Subsidiaries has deducted pursuant to
the provisions of section 203 ICTA;
48
1.5.6 any Taxation which the Company and/or the Subsidiaries failed
to deduct or which arose as a result of a failure by the
Company to deduct or duly account for Taxation; and
1.5.7 any Taxation arising from the disposal acquisition or deemed
disposal or acquisition of any asset (other than trading
stock) with a value in excess of L1,000.
1.6 Any reference to an "Effective Liability to Taxation " shall be
construed as a reference to:
1.6.1 the set-off of any Post-Completion Relief against any Actual
Liability to Taxation in respect of which the Seller would,
but for such set-off, have been liable under clause 2.1 or the
set-off against any income, profits or gains of the Company
and/or the Subsidiaries earned, accrued or received on or
before Completion or in respect of a period ended on or before
Completion in circumstances where, but for such set-off, the
Company and/or the Subsidiaries would have suffered an Actual
Liability to Taxation in respect of which the Seller and/or
the Subsidiaries would have been liable under clause 2.1 (and,
for the purposes of clause 2.1, the amount of such an
Effective Liability to Taxation arising as a result of such
set-off will be the amount of the Post-Completion Relief
set-off against an Actual Liability to Taxation or the amount
of Taxation saved as a result of the set-off of the
Post-Completion Relief against income, profits or gains, as
the case may be); or
1.6.2 the non-availability (in whole or in part) of any right to
repayment of Taxation which was treated as an asset of the
Company and/or the Subsidiaries in 1998 Accounts or the
set-off of any right to repayment of Taxation which arises
wholly or mainly as a result of any Event or combination of
Events occurring after Completion or in respect of any period
ended after Completion against any Actual Liability to
Taxation in respect of which the Seller would, but for such
set-off, have been liable under clause 2.1 (and for the
purposes of clause 2.1, the amount of such Effective Liability
to Taxation will be the amount of the repayment of Taxation
which would have been obtained but for the non-availability or
set-off); or
1.6.3 the non-availability or set-off or deduction by the Company
and/or the Subsidiaries (in whole or in part) of any Relevant
Relief against any Actual Liability to Taxation in respect of
which the Seller would, but for such deduction or set-off,
have been liable under clause 2.1 (and for the purposes of
clause 2.1 the amount of such Effective Liability to Taxation
shall be:
49
1.6.3.1 the amount of that Relevant Relief if the Relevant
Relief was a deduction from or set-off against
Taxation;
1.6.3.2 if the Relevant Relief was a deduction from or
set-off against income, profits or gains the amount
of Taxation which has been saved in consequence of
the deduction or off-setting or in the case of the
non-availability of a Relevant Relief the amount of
Taxation that would have been saved but for such
non-availability).
1.7 Words and expressions defined or used in the Agreement shall (unless
the context requires otherwise) have the same meanings in this Deed.
1.8 Any reference to a statutory provision includes a reference to all
prior and subsequent modifications, re-enactments and amendments of
that provision and any regulations made under it.
1.9 References to clauses are to clauses of this Deed unless otherwise
stated.
1.10 Words importing the singular meaning include the plural and vice versa
and words importing any gender include any other gender.
1.11 References to any English legal term or concept (including without
limitation, those relating to any action, remedy, method of judicial
proceeding, document, statute, court official, governmental authority
or agency) shall in respect of any jurisdiction other than England be
construed as references to the term or concept which most nearly
corresponds to it in that jurisdiction.
1.12 The index and headings are inserted for convenience only and shall not
affect the construction of this Deed.
2 COVENANTS BY COVENANTORS
2.1 Subject as hereinafter provided, the Covenantors hereby covenant to pay
to the Buyers an amount equal to:
2.1.1 any Actual Liability to Taxation resulting from or by
reference to:
2.1.1.1 any income profits or gains earned, accrued or
received by the Company and/or the Subsidiaries on or
before the date of this Deed;
2.1.1.2 any Event which occurred on or before the date of
this Deed or was
50
deemed to occur on or before such date for the
purposes of Taxation whether alone or in conjunction
with other Events;
2.1.1.3 any Event occurring after Completion in pursuance of
a legally binding obligation or arrangement, in
either case whether conditional or unconditional,
incurred or entered into on or before Completion; or
2.1.1.4 any combination or series of Events which includes an
Event effected before Completion and where any Events
effected after Completion are effected in pursuance
of a legally binding obligation or arrangement,
whether conditional or unconditional, incurred or
entered into on or before Completion;
2.1.2 any Effective Liability to Taxation;
2.1.3 any Liability to Taxation which would have been avoided but
for the failure of the Company and/or the Subsidiaries to
obtain a Taxation deduction for any management charge paid or
incurred prior to Completion or the disallowance by the Inland
Revenue of any deduction previously claimed by the Company
and/or the Subsidiaries;
2.1.4 any payment made by the Company and/or the Subsidiaries
whether to a Taxation Authority or not between the Balance
Sheet Date and Completion in respect of an Actual Liability to
Taxation that would have been a liability of the Covenantors
under clause 2.1.1 but for such payment;
2.1.5 any amount by which the depletion or reduction in value of the
assets of and/or the shares in the Company and/or the
Subsidiaries or the increase in its liabilities arising wholly
or partly by reason of any Liability to Taxation exceeds the
amount of that Liability to Taxation;
2.1.6 any reasonable costs and expenses properly incurred by the
Buyers and/or the Company and/or the Subsidiaries in
connection with any such Liability to Taxation (or claim
therefor) or in taking or defending any action under this Deed
(such costs and expenses to include reasonable compensation
for time spent in connection with such matters as aforesaid by
employees of the Buyers and/or the Company and/or the
Subsidiaries; and
2.1.7 any liability of the Company and/or the Subsidiaries to pay or
repay an amount in respect of Taxation under any agreement
indemnity guarantee covenant mortgage or charge or other
contractual obligation entered into on or before Completion.
51
2.2 The covenant in clause 2.1 above shall apply whether or not the
Taxation in respect of which there is a Liability to Taxation is
chargeable against or attributable to any other person or body
whatsoever.
2.3 2.3.1 Without prejudice to the generality of clause 2.1 above, the
Covenantors hereby covenant with and undertake to the Buyers
to pay to the Buyers an amount equal to any depletion or
reduction in the value of the shares or assets of the Company
or any increase in the liabilities of the Company as a result
of any Inheritance Tax which:
2.3.1.1 is at the date of this Deed a charge on any of the
shares or assets of the Company and/or the
Subsidiaries or gives rise to a power to sell
mortgage or charge any of the shares in or assets of
the Company and/or the Subsidiaries; or
2.3.1.2 after the date of this Deed becomes a charge on or
gives rise to a power to sell mortgage or charge any
of the shares in or assets of the Company and/or the
Subsidiaries being a liability in respect of
Inheritance Tax payable as a result of the death of
any person within seven years after a transfer of
value or a deemed transfer of value if a charge on or
power to sell mortgage or charge any such share or
assets would, if the death had occurred immediately
before the date of this Deed and the Inheritance Tax
payable as a result thereof had not been paid, have
existed at the date of this Deed; or
2.3.1.3 arises a result of a transfer of value occurring or
being deemed to occur on or before the date of this
Deed (whether or not in conjunction with the death of
any person whenever occurring) which increased or
decreased the value of the estate of the Company
and/or the Subsidiaries.
2.3.2 In determining for the purposes of this Deed whether a charge
on or power to sell mortgage or charge any of the shares or
assets of the Company and/or the Subsidiaries exists at any
time, the fact that any Taxation is not yet payable or may be
paid by instalments shall be disregarded and such Taxation
shall be treated as becoming due and a charge or power to sell
mortgage or charge as arising on the date of the transfer of
value or other date or event or in respect of which it becomes
payable or arises.
2.3.3 The provisions of section 213 Inheritance Tax Act 1984 shall
not apply to any payments falling to be made under this Deed.
52
3 PAYMENTS FREE OF WITHHOLDING ETC.
3.1 All sums payable by the Covenantors to the Buyers under this Deed shall
be paid gross, free and clear of all deductions, withholdings and
rights of set-off or counterclaim whatsoever save only as may be
required by law.
3.2 If any deduction or withholdings are required by law to be made from
any sums, the Covenantors shall at the time of making the relevant
payment under this Deed be obliged to pay the Buyers such further
amount as will after the deduction or withholding has been made leave
the Buyers with the same amount as they would have been entitled to
receive in the absence of such requirement to make a deduction or
withholding provided that if any credit or allowance is subsequently
obtained by the Buyers or either of them or the Company and/or the
Subsidiaries in respect of such increased sum the amount of such credit
or allowance shall be repaid to the Covenantors within ten Business
Days of the utilisation of such credit or allowance.
3.3 If any sum payable by the Covenantors to the Buyers under clause 2,
clause 3.2 and/or this clause 3.3 shall at the time of making the
relevant payment under this Deed be subject to an Actual Liability to
Taxation in the hands of the Buyers, the Covenantors shall pay to the
Buyers such further sum as will, after deduction of an amount equal to
Taxation claimed on such further sum, leave the Buyers with the same
net amount as they would have received if the sum payable under clause
2 had not been subject to an Actual Liability to Taxation in their
hands.
3.4 If any sum payable by the Covenantors to the Buyers under clause 2,
clause 3.2, clause 3.3 and this clause 3.4 would have been subject to
an Actual Liability to Taxation (or a greater Actual Liability to
Taxation) in the hands of the Buyers but for the availability of any
Relief or a right to repayment of Taxation, the Covenantors shall pay
to the Buyers such further sum as will, after deduction of an amount
equal to the Taxation to which that further sum would otherwise be
subject in the hands of the Buyers, leave the Buyers with a net amount
equal to the aggregate of (i) the sum they would have received if the
sum payable under clause 2 had not been subject to Taxation in their
hands and (ii) a sum equal to the amount of Taxation to which the sum
payable under clause 2.1 and the sum payable under clause 3.2 and/or
clause 3.3 and/or this clause 3.4 would have been subject in the hands
of the Buyers but for the availability of the said Relief or a right to
repayment of Taxation.
4 EXCLUSIONS
The covenants given by the Covenantors in clause 2.1 shall not apply to
any Liability to
53
Taxation:
4.1 to the extent that specific provision or reserve in respect of the
Actual Liability to Taxation has been made in the 1998 Accounts or to
the extent that payment or discharge of Actual Liability to Taxation
has taken place prior to the date hereof and has been taken into
account therein;
4.2 for which the Company and/or the Subsidiaries is or may become
primarily liable as a result of transactions entered into in the
ordinary course of its business after the Balance Sheet Date;
4.3 to the extent that such Liability to Taxation would not have arisen or
would have been eliminated or reduced but for a failure or omission on
the part of the Company and/or the Subsidiaries to make any claim,
election, surrender or disclaimer or give any notice to do any other
thing the making, giving or doing of which was taken into account in
computing the provision or reserved for Taxation in the 1998 Accounts;
4.4 to the extent that such Liability to Taxation would not have arisen or
would have been reduced or eliminated but for a disclaimer of capital
allowances or a revision to a claim therefor where such revision or
disclaimer is caused or made by the Buyers or the Company and/or the
Subsidiaries after Completion;
4.5 to the extent that such Liability to Taxation arises or is increased as
a consequence of any failure by the Buyers to comply with any of its
respective obligations in this Deed or in the Agreement;
4.6 to the extent that the income, profits or gains in respect of which
such Liability to Taxation arises were actually earned, accrued or
received by the Company and/or the Subsidiaries prior to the Balance
Sheet Date but were not reflected in the 1998 Accounts;
4.7 to the extent that any Relief (other than the Post-Completion Reliefs
or Relevant Reliefs) of the Company and/or the Subsidiaries arising in
respect of a period ended on or before Completion is available to
relieve or be set-off against such Liability to Taxation;
4.8 which would not have arisen but for a voluntary act or omission or
transaction of the Company and/or the Subsidiaries occurring after the
date of this Deed otherwise than in the ordinary and normal course of
business;
4.9 to the extent that the liability arises as a result only of a provision
or reserve for
54
the liability made in the 1998 Accounts being insufficient, is a
consequence of an increase in the rates of Taxation announced after the
date of this Deed with retrospective effect; and
4.10 to the extent that liability arises as a direct result of the
transactions contemplated in the Agreement that would not have arisen
but for such transactions.
5 OBLIGATIONS AND RELEASE OF COVENANTORS
5.1 Any liability to the Buyers under this Deed may in whole or in part be
released compounded or compromised or time or indulgence may be given
by the Buyers in their absolute discretion as regards any of the
Covenantors under such liability without in any way prejudicing or
affecting their rights against the other Covenantors under the same or
a like liability.
5.2 No delay or omission of the Buyers in exercising any right power or
privilege under this Deed shall impair such right power privilege or be
construed as a waiver thereof and any single or partial exercise of any
such right power or privilege shall not preclude the further exercise
of any right power or privilege.
6 CONDUCT OF NEGOTIATIONS AND PROCEEDINGS
6.1 If any Buyer becomes aware of a Claim relevant for the purposes of this
Deed, it shall within 20 days of receipt in the case of a Claim which
is an assessment to Taxation (or in the case of a Claim in respect of
which an appeal must be lodged with the relevant Taxation Authority
within 30 days of receipt of such assessment) and in any case as soon
as reasonably practicable give written notice of it to the Covenantors
but such notice shall not be a condition precedent to the liability of
the Covenantors under this Deed.
6.2 If the Covenantors first indemnify and secure the Buyers and the
Company and/or the Subsidairies to the reasonable satisfaction of the
Buyers against all losses, reasonable costs, liabilities, damages and
expenses (including interest on overdue Taxation which may be incurred
thereby) incurred by the Buyers in so doing, the Buyers shall take (and
shall procure that the Company and/or the Subsidiaries take or takes)
such action as the Covenantors may reasonably and promptly by written
notice request to avoid, resist, appeal compromise or defend the Claim
provided that:
6.2.1 the Buyers shall not be obliged to procure that the Company
and/or the
55
Subsidiaries appeal against the Claim if, having given the
Covenantors written notice of the receipt of the Claim, the
Buyers have not within a reasonable time (and in any event
within 30 days), thereafter received instructions from the
Covenantors in accordance with this clause 6.2 to make that
appeal or to have the right to conduct the appeal and in such
circumstances the Buyers may chose to treat the Liability to
Taxation in respect of that Claim as determined at the value
specified in the Claim and/or the Buyers and/or the Company
and/or the Subsidiaries shall (without prejudice to their
rights under this Deed) be free to pay or settle the Claim on
such terms as they may in their absolute discretion consider
fit;
6.2.2 the Buyers shall not be obliged to procure that the Company
and/or the Subsidiaries pursue any appeal beyond the General
Commissioners of Inland Revenue, the Special Commissioners of
Inland Revenue or Value Added Tax Tribunal or any equivalent
forum in the United Kingdom or Ireland or any other
jurisdiction unless the Covenantors furnish the Buyers with
the written opinion of leading tax counsel to the effect that
an appeal against the Liability to Taxation will, on the
balance of probabilities, be won; and
6.2.3 the Buyers shall not in any event be obliged to comply with
any unreasonable instruction of the Covenantors and the
Covenantors' professional advisers shall not be entitled to
make a settlement or compromise of the Claim or agree any
matter in the course of disputing the Claim or take any action
which is likely to adversely affect the amount thereof or
increase the future liability of the Company and/or the
Subsidiaries in respect of Taxation or adversely affect the
relationship of the Company and/or the Subsidiaries with the
relevant Taxation Authority;
6.3 The Covenantors may have any action referred to in clause 6.2 taken by
professional advisers nominated by them for this purpose if the
Covenantors:
6.3.1 keep the Buyers informed of all matters relating to the Claim;
6.3.2 obtain the Buyers' prior written approval (not to be
unreasonably withheld or delayed) to the appointment of
solicitors or other professional advisers
in respect of any action conducted by the Covenantors' professional
advisers, the Buyers or their nominated agents shall be entitled to
receive copies of any proposed correspondence or documents to be
submitted to any Taxation Authority. The Buyers or their agents may
comment on such correspondence or documents, such comments to be
provided to the Covenantors' professional advisers as soon as
reasonable practicable and in any event within 30 days of receipt. The
Covenantors' professional advisers shall not
56
unreasonably refuse to adopt the comments of the Buyers or their
agents.
6.4 Clause 6.2 shall not apply if any of the Covenantors or the Company
and/or the Subsidiaries shall have committed acts or omissions which
constitute fraudulent or negligent conduct pursuant to section 36 Taxes
Management Act 1970.
7 DATE FOR PAYMENT
7.1 The Covenantors shall make payments to the Buyers under this Deed not
later than on the following dates:
7.1.1 insofar as a Claim represents Taxation borne or to be borne by
the Company and/or the Subsidiaries, the Covenantors shall
make the payment in respect of that Claim (or so much thereof
as represents that Taxation) on the later of five Business
Days before the Taxation becomes due and five Business Days
after the date on which a notice containing a written demand
thereof is delivered to the Covenantors;
7.1.2 insofar as a Claim consists of the loss of a right to
repayment of Taxation, the Covenantors shall make the payment
in respect of that Claim (or so much thereof as represents
that loss) on the date on which that repayment would otherwise
have become due; and
7.1.3 insofar as the Claim consists of the non-availability or
set-off of any relief or in any other case, the Covenantors
shall make the payment five Business Days after the date on
which a notice containing a written demand for the amount of
the payment required to be made is delivered to the
Covenantors and the day on which such Relief would otherwise
have been utilised by the Company and/or the Subsidiaries
and/or the Buyers and for this purpose references to a date on
which Taxation becomes due include a reference to the date on
which Taxation becomes due were it not for the availability of
some Relief or right to repayment of Taxation. Any payment
which becomes due on a day which is not a Business Day shall
be paid on the next following Business Day, and any payment
which is made after noon on any day shall, for the purposes of
calculating interest, be deemed to have been paid on the next
following Business Day. No payment shall be treated as made
until cleared funds in respect thereof are available to the
Buyers.
7.2 If the Covenantors dispute the amount of any payment otherwise due to
the Buyers under this Deed, the following provisions shall apply.
Either party may refer the dispute to an independent firm of chartered
accountants agreed to by them, failing which such
57
other independent firm of chartered accountants as the President of the
Institute of Chartered Accountants of England and Wales may nominate
(the "Expert") on the basis that the Expert is to make a decision on
the dispute within 30 Business Days of receiving the reference. The
Expert shall in the absence of fraud or manifest error be final and
binding on both parties and the amount payable by the Covenantors shall
be amended to reflect the decision of the Expert. The costs of the
Expert in respect of any reference shall be borne by the party whose
contention is not upheld and failing the upholding of any party's
contention in full costs as the Expert may award.
8 INTEREST
If any sum due and payable by any party under this Deed is not paid on
the due date in accordance with the provisions of this Deed, the party
required to make such payment shall in addition to that sum pay
interest to the party due to receive such payment from the date for
payment of the sum to and including the day of actual payment of the
sum (or the next Business Day if the actual payment is not made on a
Business Day). The interest accrues from day to day (before and after
judgment) at the rate of 3% per year above the base rate of National
Westminster Bank Plc (or, if there is no base rate, at a similar rate
reasonably selected by the party due to receive such payment) and is
compounded quarterly.
9 WARRANTIES AND LIMITATIONS
9.1 Such of the provisions of clause 14 of the Agreement as are expressed
to extend to this Deed shall so extend and be deemed to apply mutatis
mutandis to this Deed as if the same had been set out in full in this
Deed.
9.2 If the Buyers or the Company and/or the Subsidiaries are entitled to
recover from another person a sum in respect of a matter to which
clause 2 relates and the Covenantors have first agreed (to the Buyers'
reasonable satisfaction) to indemnify and secure the Buyers and/or the
Company and/or the Subsidiaries against all reasonable costs and
expenses which the Buyers and/or the Company and/or the Subsidiaries
may incur in connection with the taking of the following action then at
the Covenantors' request the Buyers shall and shall ensure that the
Company and/or the Subsidiaries shall take any action reasonably
requested by the Covenantors to enforce recovery against the other
person.
10 GENERAL PROVISIONS
58
10.1 This Deed shall be personal to the parties and shall not be assignable.
10.2 The provisions of this Deed shall remain in full force and effect
notwithstanding Completion.
10.3 All obligations expressed to be those of the Covenantors are joint and
several.
10.4 Any right of rescission conferred upon by any party under this
Agreement shall be in addition to and without prejudice to all other
rights and remedies available to it and no exercise or failure to
exercise such right of rescission shall constitute a waiver by that
party of any such other right or remedy.
10.5 The Buyers may release or compromise the liability of any of the
Covenantors hereunder or grant to any Covenantor time or other
indulgence without affecting the liability of any other Covenantor
hereunder.
11 ANNOUNCEMENTS
No announcements or statement (whether oral or written) concerning this
Deed shall be made to the press or other communications medium unless
such announcement or statement shall have been agreed between the
Buyers and the Covenantors or unless such announcement or statement
shall be a requirement of law and the Buyers shall have first consulted
with the Covenantors as to the terms of such an announcement.
12 NOTICES
12.1 Any notice or other document required or permitted to be given under
this Deed shall be in writing and shall be delivered personally or sent
by first class post in a pre-paid envelope marked confidential and
addressed to the party due to receive such notice or communication:
12.1.1 in the case of the Buyers, the Buyers' principal place of
business in the United Kingdom at 11 St James's Square, London
SW1Y 4LB; or
12.1.2 in the case of the Seller, to the registered office of the
Seller from time to time; or
12.1.3 in the case of Mr Logan or Mrs Logan, to 42 Princetown Road,
Bangor, Co. Down, Northern Ireland
59
or to such other address within the United Kingdom, the
Republic of Ireland or the Channel Islands as any party may
specify in writing to the other parties.
12.2 In the absence of evidence of earlier receipt, any notice or other
communication shall be deemed to have been duly given:
12.2.1 if delivered personally, when left at the address referred to
in clause 12.1; or
12.2.2 if sent by mail, two days after posting it.
12.3 In the case of notices sent by post, it shall be sufficient in
providing such service to prove that the envelope containing the notice
was properly stamped, addressed and posted.
13 GOVERNING LAW AND JURISDICTION
13.1 This Deed is governed by English law.
13.2 The courts of England have exclusive jurisdiction to hear and decide
any suit, action or proceedings, and to settle any disputes which may
arise out of or in connection with this Deed (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.
13.4 Process by which any Proceedings are begun in England may be served on
a party to this Agreement by being delivered in accordance with clauses
12.1 and 12.2. Nothing in this clause 13.4 affects the right to serve
process in another manner permitted by law.
14 COUNTERPARTS
This Deed may be executed in any number of counterparts each of which
when executed is an original, but all the counterparts together
constitute the same document.
60
IN WITNESS whereof this Deed has been executed the day and year first before
written.
EXECUTED as a Deed by )
COMPASS TRUSTEES LIMITED )
acting by: )
EXECUTED as a Deed by )
GAVIN LOGAN )
in the presence of: )
Witness signature:
Witness name:
Witness address:
Witness occupation:
61
EXECUTED as a Deed by )
JOANNE LOGAN )
in the presence of: )
Witness signature:
Witness name:
Witness address:
Witness occupation:
EXECUTED as a Deed by )
TRANSMEDIA EUROPE INC )
acting by: )
EXECUTED as a Deed by )
TRANSMEDIA ASIA PACIFIC INC )
acting by: )
62
SCHEDULE SEVEN
DATED MAY 1998
(1) COMPASS TRUSTEES LIMITED
- and -
(2) GAVIN LOGAN AND JOANNE LOGAN
- and -
(3) TRANSMEDIA EUROPE INC AND TRANSMEDIA ASIA PACIFIC INC
-------------------------------------
TAX DEED
relating to Letville Holdings Limited
and its subsidiaries
-------------------------------------
Hill Dickinson
34 Cuppin Street
Chester CH1 2BN
Tel: 01244 896600
Fax: 01244 896601
Ref: AGS/JW/SJL/1028949
63
Date of Deed: May 1998
PARTIES
(1) COMPASS TRUSTEES LIMITED a company incorporated in Jersey (registered
number: 60972) whose registered office is at Cater Allen House,
Commercial Street, St. Helier, Jersey JE4 5XZ, Channel Islands (the
"Seller");
(2) GAVIN LOGAN, of 42 Princetown Road, Bangor, Co. Down, Northern Ireland
("Mr Logan") and JOANNE LOGAN, also of 42 Princetown Road, Bangor, Co.
Down, Northern Ireland ("Mrs Logan"); and
(3) TRANSMEDIA EUROPE INC, a company incorporated under the laws of the
state of Delaware, and TRANSMEDIA ASIA PACIFIC INC, a company
incorporated under the laws of the state of Delaware, whose principal
place of business in the United Kingdom is 11 St James's Square, London
SW1Y 4LB (each a "Buyer" and, together, the "Buyers").
RECITAL
The Seller has agreed to sell the entire issued share capital of the Company to
the Buyer. The terms of the sale are set out in the Agreement. The terms of the
sale are set out in the Agreement.
1 DEFINITIONS AND INTERPRETATION
In this Deed, the following expressions shall have the following
meaning:
"1998 Accounts" the Company Accounts for the Accounting
Period ended on the Balance Sheet Date;
"Agreement" an agreement dated May 1998 made between the
Seller (1), the Buyers (2) and Mr Logan and
Mrs Logan (3) relating to the sale and
purchase of all the shares in Porkpine
Limited;
"Balance Sheet Date" 31 March 1998;
"Claim" any letter, assignment, notice, demand or
other document issued or action taken by or
on behalf
64
of the Revenue Commissioners or the Inland
Revenue or any other taxation authority
whatsoever in any part of the world from
which it appears that the Company and/or the
Subsidiaries is or may be or may become
liable to any Liability To Taxation;
"Claim For Taxation" any claim, notice, demand, assessment,
letter or other document made or issued or
any action taken or omission made by or on
behalf of the Revenue Commissioners or the
Inland Revenue or any revenue or fiscal
authorities, customs and excise authorities
or any other statutory or governmental
authority, agency, body or official
whatsoever in any part of the world whereby
the Company and/or the Subsidiaries are or
may be placed or sought to be placed under a
Liability To Taxation (whether or not it is
primarily payable by the Company and/or the
Subsidiaries and whether or not the Company
and/or the Subsidiaries has or have or may
have any right of reimbursement);
"Company" Letville Holdings Limited, a company
incorporated in the Republic of Ireland
(registered no. 244728) whose registered
office is at Sibthorpe, 37A Leeson Park,
Dublin 6, Republic of Ireland;
"Company Accounts" the individual accounts of the Company and
each of the Subsidiaries prepared in
accordance with the Irish Companies Acts and
the statement of cashflow and the Group's
group accounts prepared in accordance with
the Irish Companies Acts and the other
documents which are required by law to be
annexed to those accounts;
"Covenantor" the Seller, Mr Logan or Mrs Logan and
"Covenantors" shall be construed
accordingly;
"Group" the Company and each Subsidiary;
65
"Liability To Taxation" any liability whatsoever to make a payment
of or in respect of Taxation and includes:
(a) the loss, reduction, counteracting
or clawing back of or failure to
obtain any Relief which would
otherwise have been available to
the Company and/or the Subsidiaries
and/or the use of any Relief which
would otherwise have been available
to the Company and/or the
Subsidiaries against any profit,
income, gain or receipt or deemed
profit, income, gain or receipt;
and
(b) the nullifying, cancellation,
set-off or reduction of a right to
repayment of Taxation which would
otherwise have been available to
the Company and/or the Subsidiaries
and in each such case the amount of the
Relief so lost, counteracted, clawed back or
used or the amount of repayment which would
otherwise have been obtained shall be
treated as an amount of Taxation for which a
liability has arisen and fallen due on the
date on which (in the case of a Liability To
Taxation falling within paragraph (a)) the
resulting Taxation is due and payable or
would have been due and payable but for the
utilisation of any other Relief by the
Company or (in the case of a Liability To
Taxation falling within paragraph (b)) the
resulting repayment would have been received
or (where such repayment was dependent upon
the making of an application or the
satisfaction of some other condition) the
earliest date upon which such application
could have been made or such condition
satisfied.
"non-availability" includes in relation to a Relief or right to
repayment of Taxation the reduction,
modification, loss, clawback, counteraction,
66
disallowance or cancellation of that Relief
or right to repayment of Taxation or a
failure to obtain a Relief to which the
Company and/or the Subsidiaries assumed it
was entitled;
"Relief" any relief, allowance, exemption, credit,
deduction or set-off of whatsoever nature in
computing any liability to Taxation or any
credit against Taxation or in computing or
against any profit, income, gain or receipt
of whatsoever nature howsoever arising;
"Subsidiary" any subsidiary of the Company at the date of
this Deed including for the avoidance of
doubt Floracourt Marketing Limited; and
"Taxation" all forms of taxation, duties, imposts,
levies, withholding, rates and charges of
whatsoever nature whether of the Republic of
Ireland or elsewhere in any part of the
world wherever or whenever created or
imposed including income tax, corporation
tax, advance corporation tax, capital gains
tax, capital acquisitions tax, inheritance
tax, capital transfer tax, deposit interest
retention tax, VAT, probate tax, sales tax,
customs and other import and export duties,
excise duties, stamp duty, capital duty,
wealth tax, property tax, rates, pay-related
social insurance or other similar
contributions and generally all taxes,
duties, imposts withholdings, levies, rates
and charges whatsoever on or in relation to
income, profits, gains, sales, receipts, use
or occupation and any taxes, duties,
imposts, withholdings, levies, rates and
charges supplementing or replacing any of
the foregoing and any interest, charges,
surcharges, fines, penalties, costs and
expenses in connection with any of the
foregoing, and the expression "tax" shall be
construed accordingly.
1.2 Reference to income and profits or gains earned, accrued or received
includes income or profits or gains deemed to have been, treated as or
regarded as earned, accrued,
67
received or otherwise arising for the purposes of any legislation.
1.3 Reference to a Claim For Taxation shall include any Claim whether made
before or after the date of this Deed (whether or not the relevant
Liability To Taxation is satisfied at that date).
1.4 Reference to the result of an event or events on or before the date of
this Deed includes the combined result or results of two or more events
one of which shall have taken place on or before that date and is
outside the ordinary course of business and the second of which is a
direct consequence of the first.
1.5 Words and expressions defined or used in the Agreement shall (unless
the context requires otherwise) have the same meanings in this Deed.
1.6 Any reference to a statutory provision includes a reference to all
prior and subsequent modifications, re-enactments and amendments of
that provision and any regulations made under it.
1.7 References to clauses are to clauses of this Deed unless otherwise
stated.
1.8 Words importing the singular meaning include the plural and vice versa
and words importing any gender include any other gender.
1.9 References to any Irish legal term or concept (including without
limitation, those relating to any action, remedy, method of judicial
proceeding, document, statute, court official, governmental authority
or agency) shall in respect of any jurisdiction other than the Republic
of Ireland be construed as references to the term or concept whch most
nearly corresponds to it in that jurisdiction.
1.10 The index and headings are inserted for convenience only and shall not
affect the construction of this Deed.
2 COVENANTS BY COVENANTORS
Subject to clause 4, the Covenantors hereby jointly and severally
covenant with and undertake to the Buyers (for themselves and as
trustee for all others who are the owners from time to time of the
Shares) to indemnify and keep indemnified the Buyers and each of them
from and against:
2.1 any Claim For Taxation, any Liability To Taxation and any
depletion or diminution in the value of the assets of, or
increase in liabilities of, or loss of any
68
benefit or advantage by, the Company and/or the Subsidiaries
arising wholly or partly by reason of or in connection with
any Claim For Taxation or any Liability To Taxation in respect
of, by reference to or in consequence of:
2.1.1 any act, omission, event or transaction or series of
transactions wholly or partly occurring or entered
into on or before the date of this Deed;
2.1.2 any income, profit, gain or receipt earned, accrued
or received on or before the date of this Deed; or
2.1.3 any dividend or distribution paid or made or deemed
to have been paid or made on or before the date of
this Deed;
2.2 any settlement of any Claim For Taxation in respect of, by
reference to or in consequence of, any of the matters referred
to in clauses 2.1.1 to 2.1.3 (inclusive); and
2.3 all costs and expenses incurred in relation to any demands,
actions, proceedings and claims in respect of any Liability To
Taxation or Claim For Taxation in respect of any of the
matters referred to in clauses 2.1.1 to 2.1.3 (inclusive).
3 PAYMENTS FREE OF WITHHOLDING ETC.
3.1 All sums payable by the Covenantors to the Buyers under this Deed shall
be paid gross, free and clear of all deductions, withholdings and
rights of set-off or counterclaim whatsoever save only as may be
required by law.
3.2 If any deduction or withholdings are required by law to be made from
any sums, the Covenantors shall at the time of making the relevant
payment under this Deed be obliged to pay the Buyers such further
amount as will after the deduction or withholding has been made leave
the Buyers with the same amount as they would have been entitled to
receive in the absence of such requirement to make a deduction or
withholding provided that if any credit or allowance is subsequently
obtained by the Buyers or either of them or the Company and/or the
Subsidiaries in respect of such increased sum the amount of such credit
or allowance shall be repaid to the Covenantors within ten Business
Days of the utilisation of such credit or allowance.
3.3 If any sum payable by the Covenantors to the Buyers under clause 2,
clause 3.2 and/or this clause 3.3 shall be subject to a Liability To
Taxation in the hands of the Buyers, the Covenantors shall at the time
of making the relevant payment under this Deed pay to the Buyers such
further sum as will, after deduction of an amount equal to Taxation
claimed
69
on such further sum, leave the Buyers with the same net amount as they
would have received if the sum payable under clause 2 had not been
subject to a Liability To Taxation in their hands.
3.4 If any sum payable by the Covenantors to the Buyers under clause 2,
clause 3.2, clause 3.3 and this clause 3.4 would have been subject to a
Liability To Taxation (or a greater Liability To Taxation) in the hands
of the Buyers but for the availability of any Relief or a right to
repayment of Taxation, the Covenantors shall pay to the Buyers such
further sum as will, after deduction of an amount equal to the Taxation
to which that further sum would otherwise be subject in the hands of
the Buyers, leave the Buyers with a net amount equal to the aggregate
of (i) the sum they would have received if the sum payable under clause
2 had not been subject to Taxation in their hands and (ii) a sum equal
to the amount of Taxation to which the sum payable under clause 2.1 and
the sum payable under clause 3.2 and/or clause 3.3 and/or this clause
3.4 would have been subject in the hands of the Buyers but for the
availability of the said Relief or a right to repayment of Taxation.
4 EXCLUSIONS
The indemnities contained in clause 2 hereof shall not apply to any
Liability To Taxation or Claim For Taxation:
4.1 to the extent that specific provision or reserve in respect of
such Liability To Taxation or Claim For Taxation has been made
in the 1998 Accounts or was specifically referred to in the
notes thereto;
4.2 to the extent that such Liability To Taxation or Claim For
Taxation arises or is increased as a result only of any
provision or reserved in respect thereof in the Accounts being
insufficient by reason of any increase in rates of taxation
made after the date of this Deed with retrospective effect;
4.3 to the extent that such Liability To Taxation or Claim For
Taxation arises as a consequence only of profits or gains
earned or accrued in the ordinary and usual course of trading
during the period from the Balance Sheet Date to the date of
this Deed;
4.4 to the extent that such Liability To Taxation would not have
arisen or would have been eliminated or reduced but for a
failure or omission on the part of the Company and/or the
Subsidiaries to make any claim, election, surrender or
disclaimer or give any notice to do any other thing the
making, giving or doing of which was taken into account in
computing the provision or reserve for
70
Taxation in the 1998 Accounts;
4.5 to the extent that such Liability To Taxation would not have
arisen or would have been reduced or eliminated but for a
disclaimer of capital allowances or a revision to a claim
therefor where such revision or disclaimer is caused or made
by the Buyers or the Company and/or the Subsidiaries after
Completion;
4.6 to the extent that such Liability to Taxation arises or is
increased as a consequence of any failure by the Buyers to
comply with any of its respective obligations in this Deed or
in the Agreement;
4.7 to the extent that the income, profits or gains in respect of
which such Liability To Taxation arises were actually earned,
accrued or received by the Company and/or the Subsidiaries
prior to the Balance Sheet Date but were not reflected in the
1998 Accounts;
4.8 to the extent that any Relief of the Company and/or the
Subsidiaries arising in respect of a period ended on or before
Completion is available to relieve or be set-off against such
Liability to Taxation; and
4.9 to the extent that liability arises as a direct result of the
transactions contemplated in the Agreement that would not have
arisen but for such transactions.
5 OBLIGATIONS AND RELEASE OF COVENANTORS
5.1 Any liability to the Buyers under this Deed may in whole or in part be
released compounded or compromised or time or indulgence may be given
by the Buyers in their absolute discretion as regards any of the
Covenantors under such liability without in any way prejudicing or
affecting their rights against the other Covenantors under the same or
a like liability.
5.2 No delay or omission of the Buyers in exercising any right power or
privilege under this Deed shall impair such right power privilege or be
construed as a waiver thereof and any single or partial exercise of any
such right power or privilege shall not preclude the further exercise
of any right power or privilege.
6 CONDUCT OF NEGOTIATIONS AND PROCEEDINGS
6.1 If any Buyer becomes aware of a Claim relevant for the purposes of this
Deed, it shall within 20 days of receipt in the case of a Claim which
is an assessment to Taxation (or
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in the case of a Claim in respect of which an appeal must be lodged
with the relevant taxation authority within 30 days of receipt of such
assessment) and in any case as soon as reasonably practicable give
written notice of it to the Covenantors but such notice shall not be a
condition precedent to the liability of the Covenantors under this
Deed.
6.2 If the Covenantors first indemnify and secure the Buyers and the
Company and/or the Subsidiaries to the reasonable satisfaction of the
Buyers against all losses, reasonable costs, liabilities, damages and
expenses (including interest on overdue Taxation which may be incurred
thereby) incurred by the Buyers in so doing, the Buyers shall take (and
shall procure that the Company and/or the Subsidiaries take or takes)
such action as the Covenantors may reasonably and promptly by written
notice request to avoid, resist, appeal compromise or defend the Claim
provided that:
6.2.1 the Buyers shall not be obliged to procure that the Company
and/or the Subsidiaries appeal against the Claim if, having
given the Covenantors written notice of the receipt of the
Claim, the Buyers have not within a reasonable time (and in
any event within 30 days), thereafter received instructions
from the Covenantors in accordance with this clause 6.2 to
make that appeal or to have the right to conduct the appeal
and in such circumstances the Buyers may chose to treat the
Liability To Taxation in respect of that Claim as determined
at the value specified in the Claim and/or the Buyers and/or
the Company and/or the Subsidiaries shall (without prejudice
to their rights under this Deed) be free to pay or settle the
Claim on such terms as they may in their absolute discretion
consider fit;
6.2.2 the Buyers shall not be obliged to procure that the Company
and/or the Subsidiaries pursue any appeal beyond the Revenue
Commissioners, General Commissioners of Inland Revenue, the
Special Commissioners of Inland Revenue or Value Added Tax
Tribunal or any equivalent forum in the United Kingdom or
Republic of Ireland or any other jurisdiction unless the
Covenantors furnish the Buyers with the written opinion of
leading tax counsel to the effect that an appeal against the
Liability To Taxation will, on the balance of probabilities,
be won; and
6.2.3 the Buyers shall not in any event be obliged to comply with
any unreasonable instruction of the Covenantors and the
Covenantors' professional advisers shall not be entitled to
make a settlement or compromise of the Claim or agree any
matter in the course of disputing the Claim or take any action
which is likely to adversely affect the amount thereof or
increase the future liability of the Company and/or the
Subsidiaries in respect of Taxation or adversely affect the
relationship of the Company and/or the Subsidiaries with the
relevant taxation authority.
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6.3 The Covenantors may have any action referred to in clause 6.2 taken by
professional advisers nominated by them for this purpose if the
Covenantors:
6.3.1 keep the Buyers informed of all matters relating to the Claim;
6.3.2 obtain the Buyers' prior written approval (not to be
unreasonably withheld or delayed) to the appointment of
solicitors or other professional advisers
in respect of any action conducted by the Covenantors' professional
advisers, the Buyers or their nominated agents shall be entitled to
receive copies of any proposed correspondence or documents to be
submitted to any taxation authority. The Buyers or their agents may
comment on such correspondence or documents, such comments to be
provided to the Covenantors' professional advisers as soon as
reasonable practicable and in any event within 30 days of receipt. The
Covenantors' professional advisers shall not unreasonably refuse to
adopt the comments of the Buyers or their agents.
6.4 Clause 6.2 shall not apply if any of the Covenantors or the Company
and/or the Subsidiaries shall have committed acts or omissions which
constitute fraudulent or negligent conduct. 7 DATE FOR PAYMENT
7.1 The Covenantors shall make payments to the Buyers under this Deed not
later than on the following dates:
7.1.1 insofar as a Claim represents Taxation borne or to be borne by
the Company and/or the Subsidiaries, the Covenantors shall
make the payment in respect of that Claim (or so much thereof
as represents that Taxation) on the later of five Business
Days before the Taxation becomes due and five Business Days
after the date on which a notice containing a written demand
thereof is delivered to the Covenantors;
7.1.2 insofar as a Claim consists of the loss of a right to
repayment of Taxation, the Covenantors shall make the payment
in respect of that Claim (or so much thereof as represents
that loss) on the date on which that repayment would otherwise
have become due; and
7.1.3 insofar as the Claim consists of the non-availability or
set-off of any relief or in any other case, the Covenantors
shall make the payment five Business Days after the date on
which a notice containing a written demand for the amount of
the payment required to be made is delivered to the
Covenantors and the day on which such Relief would otherwise
have been utilised by the Company and/or
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the Subsidiaries and/or the Buyers and for this purpose
references to a date on which Taxation becomes due include a
reference to the date on which Taxation becomes due were it
not for the availability of some Relief or right to repayment
of Taxation. Any payment which becomes due on a day which is
not a Business Day shall be paid on the next following
Business Day, and any payment which is made after noon on any
day shall, for the purposes of calculating interest, be deemed
to have been paid on the next following Business Day. No
payment shall be treated as made until cleared funds in
respect thereof are available to the Buyers.
7.2 If the Covenantors dispute the amount of any payment otherwise due to
the Buyers under this Deed, the following provisions shall apply.
Either party may refer the dispute to an independent firm of chartered
accountants agreed to by them, failing which such other independent
firm of chartered accountants as the President of the Institute of
Chartered Accountants in England and Wales may nominate (the "Expert")
on the basis that the Expert is to make a decision on the dispute
within 30 Business Days of receiving the reference. The Expert shall in
the absence of fraud or manifest error be final and binding on both
parties and the amount payable by the Covenantors shall be amended to
reflect the decision of the Expert. The costs of the Expert in respect
of any reference shall be borne by the party whose contention is not
upheld and failing the upholding of any party's contention in full
costs as the Expert may award.
8 INTEREST
If any sum due and payable by any party under this Deed is not paid on
the due date in accordance with the provisions of this Deed, the party
required to make such payment shall in addition to that sum pay
interest to the party due to receive such payment from the date for
payment of the sum to and including the day of actual payment of the
sum (or the next Business Day if the actual payment is not made on a
Business Day). The interest accrues from day to day (before and after
judgment) at the rate of 3% per year above the base rate of Allied
Irish Banks Plc (or, if there is no base rate, at a similar rate
reasonably selected by the party due to receive such payment) and is
compounded quarterly.
9 WARRANTIES AND LIMITATIONS
9.1 Such of the provisions of clause 14 of the Agreement as are expressed
to extend to this Deed shall so extend and be deemed to apply mutatis
mutandis to this Deed as if the same had been set out in full in this
Deed.
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9.2 If the Buyers or the Company and/or the Subsidiaries are entitled to
recover from another person a sum in respect of a matter to which
clause 2 relates and the Covenantors have first agreed (to the Buyers'
reasonable satisfaction) to indemnify and secure the Buyers and/or the
Company and/or the Subsidiaries against all reasonable costs and
expenses which the Buyers and/or the Company and/or the Subsidiaries
may incur in connection with the taking of the following action then at
the Covenantors' request the Buyers shall and shall ensure that the
Company and/or the Subsidiaries shall take any action reasonably
requested by the Covenantors to enforce recovery against the other
person.
10 BINDING ON SUCCESSORS
This Deed shall be binding upon and enure to the benefit of the
respective parties hereto and their respective personal
representatives, successors and permitted assigns.
11 WAIVER, RELEASE AND REMEDIES
11.1 A waiver by the Buyers or either of them of any breach by any party
hereto of any of the terms provisions or conditions of this Deed or the
acquiescence of the Buyers or either of them in any act (whether
commission or omission) which but for such acquiescence would be a
breach as aforesaid shall not constitute a general waiver of such term,
provision or condition or an acquiescence to any subsequent act
contrary thereto.
11.2 Any remedy or right conferred upon the Buyers or either of them for the
breach of this Deed shall be in addition to and without prejudice to
all other rights and remedies available to it whether pursuant to the
Agreement or provided for by law.
11.3 No failure or delay by the Buyers or either of them in exercising any
claim, remedy, right, power or privilege under this Deed shall operate
as a waiver nor shall a single or partial exercise of any claim,
remedy, right, power or privilege preclude any further exercise thereor
or exercise of any other claim, right, power or privilege.
11.4 Any liability of any party hereto to the Buyers or either of them under
the provisions of this Deed may in whole or in part be released,
varied, postponed, compounded or compromised by the Buyers or either of
them in its absolute discretion as regards such party without in any
way prejudicing or affecting its or their rights against any other
party hereto under the same or a like liability whether joint and
several or otherwise. Should any provision of this Deed transpire not
to be enforceable against any of the parties hereto, such
non-enforceability shall not render such provision unenforceable
against any other party hereto.
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12 GENERAL PROVISIONS
12.1 This Deed shall not be assignable in whole or in part by the
Covenantors but the Buyers shall be entitled to assign and transfer all
or any of their rights and obligations hereunder and such assignee or
transferee shall be entitled to enforce the same against the
Covenantors or any of them as if it were named in this Deed as the
Buyers or either of them.
12.2 No variation of this Deed shall be valid unless it is in writing and
signed by or on behalf of each of the parties hereto.
12.3 Each of the provisions of this Deed is separate and severable and
enforceable accordingly and if at any time any provision is adjudged by
any court of competent jurisdiction to be void or unenforceable the
validity, legality and enforceability of the remaining provisions
hereof and of that provision in any other jurisdiction shall not in any
way be affected or impaired thereby.
13 ANNOUNCEMENTS
No announcements or statement (whether oral or written) concerning this
Deed shall be made to the press or other communications medium unless
such announcement or statement shall have been agreed between the
Buyers and the Covenantors or unless such announcement or statement
shall be a requirement of law and the Buyers shall have first consulted
with the Covenantors as to the terms of such an announcement.
14 NOTICES
14.1 Any notice or other document required or permitted to be given under
this Deed shall be in writing and shall be delivered personally or sent
by first class post in a pre-paid envelope marked confidential and
addressed to the party due to receive such notice or communication:
14.1.1 in the case of the Buyers, the Buyers' principal place of
business in the United Kingdom at 11 St James's Square, London
SW1Y 4LB; or
14.1.2 in the case of the Seller, to the registered office of the
Seller from time to time; or
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14.1.3 in the case of Mr Logan or Mrs Logan, to 42 Princetown Road,
Bangor, Co. Down, Northern Ireland
or to such other address within the United Kingdom, the Republic of
Ireland or the Channel Islands as any party may specify in writing to
the other parties.
14.2 In the absence of evidence of earlier receipt, any notice or other
communication shall be deemed to have been duly given:
14.2.1 if delivered personally, when left at the address referred to
in clause 14.1; or
14.2.2 if sent by mail, two days after posting it.
14.3 In the case of notices sent by post, it shall be sufficient in
providing such service to prove that the envelope containing the notice
was properly stamped, addressed and posted.
15 GOVERNING LAW AND JURISDICTION
This Deed shall be governed by and construed in accordance with the
laws of Ireland. Each of the parties hereto hereby agrees for the
benefit of the Buyers and without prejudice to the right of the Buyers
to take proceedings in relation hereto before any other court of
competent jurisdiction, that the courts of Ireland shall have
jurisdiction to hear and determine any suit, action or proceedings that
may arise out of or in connection with this Deed and for such purposes
irrevocably submits to the jurisdiction of such courts.
16 COUNTERPARTS
This Deed may be executed in any number of counterparts and by the
different parties thereto on separate counterparts each of which when
executed and delivered shall constitute an original and all such
counterparts together constitute but one and the same instrument.
77
IN WITNESS WHEREOF this Agreement has been duly executed by the parties as a
Deed on the day and year first before written.
Present when the Common Seal of
COMPASS TRUSTEES LIMITED
was affixed hereto:
Director
Director/Secretary
SIGNED, SEALED and DELIVERED )
by GAVIN LOGAN )
in the presence of: )
---------------------------
Witness signature:
Witness name:
Address:
Occupation:
SIGNED, SEALED and DELIVERED )
by JOANNE LOGAN )
in the presence of: )
---------------------------
Witness signature:
Witness name:
Address:
Occupation:
SIGNED, SEALED and DELIVERED )
by TRANSMEDIA EUROPE INC )
78
acting by PAUL L HARRISON, Director: )
SIGNED, SEALED and DELIVERED )
by TRANSMEDIA ASIA PACIFIC )
acting by PAUL L HARRISON, Director: )
79
SCHEDULE EIGHT
Description
(including title number) Existing use Owner/Occupier
- -------------------------------- ------------ --------------
No freehold property is owned, held or used by a Group Company.
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SCHEDULE EIGHT
The Properties - Leasehold
Current annual
Details of lease rent and rent Existin
Description (date and parties) Duration review date(s) use Owner/Occupier
- ----------- ----------------------------- ---------------- --------------- --------- ---------------
121 High Street Indenture of lease dated Four years from L7,500 Office usage Each Group
Holywood 3 June 1996 between 1 June 1996 No rent review Company
County Down Kearney Bros. (Holywood)
Northern Ireland Limited (1) and Gavin Logan
trading as Logan Leisure
Sibthorpe Lane No formal lease No formal lease None Office usage Each Group
37A Leeson Park Company
Dublin 6
Republic of Ireland
81
Leases etc affecting the Properties
Part of property Duration Current annual rent
Property affected and rent review date(s) Current tenant
- -------- ---------------- -------- ----------------------- ---------------
The Company does not sub-let the whole or any part of the Properties.
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SCHEDULE NINE
The Heads of Agreement
(as defined in clause 11)
83
IN WITNESS WHEREOF this Agreement has been executed by the parties hereto as a
Deed on the date first before mentioned.
EXECUTED as a Deed )
by COMPASS TRUSTEES LIMITED ) WILLIAM O'GRADY
acting by its duly authorised attorney: ) AS ATTORNEY
EXECUTED as a Deed )
by TRANSMEDIA EUROPE INC ) PAUL L HARRISON
acting by PAUL L HARRISON, Director: )
EXECUTED as a Deed )
by TRANSMEDIA ASIA PACIFIC INC ) PAUL L HARRISON
acting by PAUL L HARRISON, Director: )
84
EXECUTED as a Deed )
by GAVIN LOGAN ) G LOGAN
in the presence of: )
Witness signature: WILLIAM O'GRADY
Witness name: William O'Grady
Witness address: 5 Upper Fitzwilliam Street
Dublin 2
Witness occupation: Solicitor
EXECUTED as a Deed )
by JOANNE LOGAN ) J C LOGAN
in the presence of: )
Witness signature: WILLIAM F O'GRADY
Witness name: William F O'Grady
Witness address: 5 Upper Fitzwilliam Street
Dublin 2
Witness occupation: Solicitor
85