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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: November 2, 1999
IMPAC Group, Inc.
(Exact name of registrant as specified in its charter)
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Delaware 333-48821 23-2923682
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
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1950 North Ruby Street, Melrose Park, Illinois 60160
(Address of principal executive offices including zip code)
Registrant's telephone number, including area code: (708) 344-9100
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ITEM 2: Acquisition or Disposition of Assets
On November 2, 1999, IMPAC Group, Inc. (the "Company") acquired all of the
issued and outstanding share capital of Thamesdown Colour Limited
("Thamesdown"), a U.K. based printer, from all of the stockholders thereof, for
approximately $10.8 million plus acquisition costs. The acquisition was
initially funded through $8.4 million of additional revolver borrowings under
the Amended and Restated Multicurrency Credit Facility dated as of March 12,
1998 and amended and restated as of July 7, 1998, as amended, between Bank of
America National Trust & Savings Association, certain other financial
institutions and the Company and certain of its subsidiaries and the issuance of
$2.4 million of Series A Common Stock to the former Thamesdown shareholders. The
Company also assumed approximately $3.0 million of capital leases. The purchase
price was determined as a result of arms length negotiations. Thamesdown
provides high-end commercial printing services specializing in the production of
promotional materials.
ITEM 7: Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired.
The financial statements required by this Item will be filed by
amendment as soon as practical, but no later than 60 days after this
Current Report is required to be filed.
(b) Pro Forma Financial Information.
The financial statements required by this Item will be filed by
amendment as soon as practical, but no later than 60 days after this
Current Report is required to be filed.
(c) Exhibit. The following is filed as an exhibit to this Report:
Exhibit 2.5 Agreement dated November 2, 1999 between C.J. Watson Esq
and Others and IMPAC Group, Inc. for the Sale and Purchase
of the Entire Issued Share Capital of Thamesdown Colour
Limited.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
IMPAC Group, Inc.
By: /s/ David C. Underwood
-------------------------------------
David C. Underwood
Chief Financial Officer
Date: November 17, 1999
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EXHIBIT 2.5
DATED 2ND OF NOVEMBER 1999
- --------------------------------------------------------------------------------
C.J. WATSON Esq and Others
- and -
IMPAC GROUP, INC
----------------------------------------
AGREEMENT
for the sale and purchase of
the entire issued share capital of
THAMESDOWN COLOUR LIMITED
----------------------------------------
LAYTONS
Carmelite
50 Victoria Embankment
Blackfriars
London EC4Y 0LS
Tel: 0171 842 8000 Fax: 0171 842 8080
E-mail: [email protected]
Ref: RJK/102993
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INDEX
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1. INTERPRETATION..................................................................... 1
1.1 Definitions.................................................................. 1
1.2 Part XXVI Companies Act 1985................................................. 9
1.3 Statutory Provisions......................................................... 9
1.4 Obligations.................................................................. 9
1.5 Gender and Number............................................................ 9
1.6 Headings..................................................................... 10
1.7 Clause References............................................................ 10
1.8 Document References.......................................................... 10
1.9 Calculation of Periods....................................................... 10
1.10 General Words................................................................ 10
2. SALE AND PURCHASE.................................................................. 10
2.1 Agreement.................................................................... 10
2.2 Consents and Pre-Emption Waiver.............................................. 11
2.3 Vendors' Warranties.......................................................... 11
2.4 Purchaser's Warranties....................................................... 12
2.5 Severability................................................................. 12
3. CONSIDERATION...................................................................... 12
3.1 Amount....................................................................... 12
3.2 Apportionment................................................................ 12
3.3 Satisfaction of the Consideration............................................ 12
3.4 Vendors' Representations and Undertakings concerning Consideration
Shares....................................................................... 13
4. RELATIONSHIPS WITH THE COMPANY..................................................... 13
4.1 General...................................................................... 13
4.2 Exclusions................................................................... 14
5. COMPLETION......................................................................... 15
5.1 Date and Venue............................................................... 15
5.2 Vendors' Obligations......................................................... 15
5.3 Purchaser's Obligations...................................................... 17
5.4 Receipts..................................................................... 17
5.5 Other Transactions........................................................... 18
6. OTHER TRANSACTIONS................................................................. 18
6.1 Deed of Covenant............................................................. 18
6.2 Tax Deed..................................................................... 18
6.3 Shareholders Agreement....................................................... 18
6.4 Service Agreements........................................................... 18
6.5 Financial Assistance......................................................... 18
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7. NET PROFIT AND COMPLETION ASSETS...................................................... 19
7.1 Net Profit and Completion Assets Warranty....................................... 19
7.2 Accounting Bases................................................................ 19
7.3 Completion Accounts............................................................. 20
7.4 Shortfall Compensation.......................................................... 21
7.5 Auditors' Costs................................................................. 22
8. WARRANTIES, INDEMNITIES AND COVENANTS................................................. 22
8.1 The Warranties.................................................................. 22
8.2 Limitations..................................................................... 22
8.3 Quantification of Loss.......................................................... 22
8.4 Further Disclosure.............................................................. 24
8.5 Indemnities..................................................................... 24
8.6 Indemnity Payments.............................................................. 28
8.7 Satisfaction of claims.......................................................... 29
9. FURTHER OBLIGATIONS OF THE PURCHASER.................................................. 29
9.1 Warranties...................................................................... 29
9.2 Employee Bonus.................................................................. 29
10. FURTHER ASSURANCE..................................................................... 30
10.1 Vesting Ownership and Ensuring Benefit.......................................... 30
10.2 Information..................................................................... 30
11. GENERAL............................................................................... 30
11.1 Costs........................................................................... 30
11.2 Successors...................................................................... 30
11.3 Collateral Agreements and Variations............................................ 31
11.4 Continuing Effect............................................................... 31
11.5 Non-Waiver...................................................................... 31
11.6 Several Dealings................................................................ 31
11.7 Circulars and Announcements..................................................... 31
11.8 Previous Agreements............................................................. 32
11.9 Consents........................................................................ 32
11.10 Counterparts.................................................................... 32
11.11 Fraud........................................................................... 32
11.12 Law and Proceedings............................................................. 32
12. NOTICES............................................................................... 32
12.1 Authorised Addresses............................................................ 32
12.2 Service......................................................................... 33
SCHEDULE 1................................................................................. 34
Sub-clause 2.1: The Vendors and their respective Shares and Consideration............. 34
SCHEDULE 2................................................................................. 35
Sub-clause 1.1: Information concerning the Company.................................... 35
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SCHEDULE 3.................................................................................. 36
Sub-clause 1.1: The Properties.......................................................... 36
SCHEDULE 4.................................................................................. 37
Sub-clause 8.1: The Warranties.......................................................... 37
1. PRELIMINARY............................................................................. 37
1.1 Definitions....................................................................... 37
1.2 Disclosures....................................................................... 37
1.3 Other Knowledge................................................................... 37
1.4 Warrantors' claims against the Company............................................ 38
1.5 Independence of Warranties........................................................ 39
1.6 Warranties........................................................................ 39
2. COMPANY INFORMATION..................................................................... 39
2.1 Incorporation, Constitution and Statutory Matters................................. 39
2.2 Share Capital and Shares.......................................................... 40
3. ACCOUNTS AND RECORDS.................................................................... 41
3.1 Contents of Accounts.............................................................. 41
3.2 Stock Valuations.................................................................. 41
3.3 Stock Provisions.................................................................. 42
3.4 Debts............................................................................. 42
3.5 Depreciation...................................................................... 42
3.6 Company Records:.................................................................. 42
3.7 Management Accounts............................................................... 43
3.8 Accountants Report................................................................ 43
4. FINANCIAL MATTERS....................................................................... 44
4.1 Bank Accounts..................................................................... 44
4.2 Financial Facilities.............................................................. 44
4.3 Encumbrances...................................................................... 44
4.4 Loss of Benefits.................................................................. 44
4.5 Details of Benefits............................................................... 45
4.6 Guarantees for the Company........................................................ 45
4.7 Foreign Exchange Commitments...................................................... 45
4.8 Creditors......................................................................... 45
5. REAL PROPERTY........................................................................... 45
5.1 Identity and Information.......................................................... 45
5.2 Title............................................................................. 45
5.3 Possession........................................................................ 45
5.4 Adverse Interests................................................................. 46
5.5 Outgoings......................................................................... 46
5.6 Disputes.......................................................................... 46
5.7 Use............................................................................... 46
5.8 Notices and Proposals............................................................. 46
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5.9 Compensation................................................................... 46
5.10 Public Authority Obligations................................................... 46
5.11 Leasehold Obligations.......................................................... 46
5.12 Adjacent Land.................................................................. 47
6. INTELLECTUAL PROPERTY................................................................ 47
6.1 Ownership...................................................................... 47
6.2 Registered Intellectual Property............................................... 47
6.3 Adverse Claims................................................................. 47
6.4 Infringement of Third Party Rights............................................. 47
6.5 Third Party Rights............................................................. 47
6.6 Licences from Third Parties.................................................... 48
6.7 Disclosures.................................................................... 48
6.8 Trade Names.................................................................... 48
6.9 Business Name.................................................................. 48
6.10 Software....................................................................... 49
6.11 Software Support............................................................... 49
6.12 Failures....................................................................... 50
6.13 Millennium Compliance.......................................................... 50
6.14 Millennium Compliance Undertakings............................................. 50
7. PHYSICAL ASSETS...................................................................... 50
7.1 Ownership...................................................................... 50
7.2 Leasing and Hire Purchase...................................................... 51
7.3 Asset Register................................................................. 51
7.4 Condition...................................................................... 51
7.5 Computers...................................................................... 52
8. CONDUCT OF BUSINESS.................................................................. 52
8.1 Business Since Last Accounting Date............................................ 52
8.2 October Trading................................................................ 54
8.3 Authorisations and Approvals................................................... 54
8.4 Data Protection Act............................................................ 55
8.5 Absence of Legal Proceedings................................................... 55
8.6 Public Obligations............................................................. 55
8.7 Invalid and Disputed Contracts................................................. 55
8.8 Negligent Services............................................................. 56
8.9 Product and Service Complaints................................................. 56
8.10 Orders and Judgments........................................................... 56
8.11 Competition Law................................................................ 56
8.12 Contractual Characteristics.................................................... 57
8.13 Overseas Undertakings.......................................................... 59
8.14 Agency Distributorship and Similar Arrangements................................ 59
8.15 Material Contracts............................................................. 60
8.16 Adverse Matters................................................................ 60
8.17 Insurance:..................................................................... 60
8.18 Legal Documents................................................................ 61
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8.19 Effect of Agreement........................................................... 61
8.20 Health & Safety............................................................... 61
8.21 Improper Practices............................................................ 61
8.22 Outstanding Tenders........................................................... 62
8.23 Acquisitions and Disposals.................................................... 62
9. EMPLOYMENT MATTERS.................................................................. 62
9.1 Employment Particulars........................................................ 62
9.2 Termination of Employment..................................................... 63
9.3 Disputes with Employees....................................................... 63
9.4 Compensation Obligations...................................................... 63
9.5 Employee Claims............................................................... 63
9.6 Incentive Arrangements........................................................ 64
9.7 Long-Term Contracts........................................................... 64
9.8 Trade Unions.................................................................. 64
9.9 Industrial Action............................................................. 64
9.10 Employment Records............................................................ 64
9.11 Contracts of Employment....................................................... 65
9.12 Credit Cards.................................................................. 65
9.13 Obligations to Employees...................................................... 65
9.14 TUPE.......................................................................... 65
9.15 Hartley Print Limited......................................................... 65
9.16 Maximum Working Hours......................................................... 65
10. PENSIONS............................................................................ 65
10.1 Benefit Obligations........................................................... 65
10.2 Disclosed Scheme.............................................................. 66
10.3 Statutory Status.............................................................. 66
10.4 Claims........................................................................ 67
10.5 OPRA Report................................................................... 68
11. TAXATION............................................................................ 68
11.1 Submission of Returns......................................................... 68
11.2 Submission of Claims.......................................................... 68
11.3 Concessions and Agreements.................................................... 68
11.4 Payment of Tax Due............................................................ 68
11.5 Penalties and Interest........................................................ 68
11.6 Liability as Agent............................................................ 68
11.7 PAYE.......................................................................... 69
11.8 Deduction of Tax.............................................................. 69
11.9 Back Duty Claims.............................................................. 69
11.10 Accounts Provisions........................................................... 69
11.11 Book and Tax Values of Fixed Assets........................................... 69
11.12 Book and Tax Values of Capital Gains Assets................................... 69
11.13 Distributions................................................................. 70
11.14 Capital Distributions......................................................... 70
11.15 Loan Relationships............................................................ 70
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11.16 Deep Discount and Relevant Discounted Securities.............................. 70
11.17 Premiums on Leases............................................................ 70
11.18 Sale and Leaseback............................................................ 70
11.19 Non-Allowable Payments........................................................ 70
11.20 No Unremittable Income........................................................ 70
11.21 Transfer Pricing.............................................................. 71
11.22 Give as You Earn.............................................................. 71
11.23 Pension Scheme Refunds........................................................ 71
11.24 Profit-Related Pay............................................................ 71
11.25 No Unremittable Gains......................................................... 71
11.26 No Disposal within Specific Sections.......................................... 71
11.27 Debts......................................................................... 71
11.28 Transfer of Trade............................................................. 71
11.29 Rollover Relief............................................................... 71
11.30 Assets Ceasing to be Within Charge to UK Tax.................................. 71
11.31 Close Company................................................................. 71
11.32 Close Company Distributions................................................... 72
11.33 Close Investment-Holding Company.............................................. 72
11.34 Loans to Participators........................................................ 72
11.35 Tax Avoidance................................................................. 72
11.36 General Anti-Avoidance........................................................ 72
11.37 Further Anti-Avoidance........................................................ 72
11.38 Inheritance Tax............................................................... 72
11.39 Compliance with VAT Administrative Requirements............................... 73
11.40 Value Added Tax Groups........................................................ 73
11.41 Security and Value Added Tax.................................................. 73
11.42 Partial Exemption............................................................. 73
11.43 VAT on Property Transactions.................................................. 73
11.44 Overseas VAT Recovery......................................................... 73
11.45 Transfer of Business as a Going Concern....................................... 73
11.46 Bad Debt Relief............................................................... 73
11.47 Capital Goods Scheme.......................................................... 74
11.48 Duties, etc................................................................... 74
11.49 Due Payment of Stamp Duty and Stamp Duty Reserve Tax.......................... 74
12. ENVIRONMENTAL MATTERS................................................................ 74
12.1 Existing Legislation.......................................................... 74
12.2 Breach of Legislation......................................................... 74
12.3 Litigation.................................................................... 74
12.4 Quality Limits and Quality Objectives......................................... 75
12.5 Released Substances........................................................... 75
12.6 Hazardous Substances.......................................................... 75
12.7 Objectives.................................................................... 75
12.8 Authorisations................................................................ 75
12.9 Authorisations withdrawn...................................................... 75
12.10 Other authorisations.......................................................... 75
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13. MISCELLANEOUS....................................................................... 76
13.1 Accuracy of Information....................................................... 76
13.2 Finders Fee................................................................... 76
13.3 Vendors' Interests............................................................ 76
SCHEDULE 5................................................................................ 77
Sub-clause 8.2 : Limitations on Claims.............................................. 77
1. LIABILITY FOR WARRANTY CLAIMS....................................................... 77
1.1 Time Limits................................................................... 77
1.2 Claim Notices and Proceedings................................................. 77
1.3 Contents of Claim Notices..................................................... 77
1.4 Timing of Claim Notices....................................................... 78
2. MAXIMUM LIABILITY................................................................... 78
2.1 Aggregate Liability........................................................... 78
2.2 Individual Liability.......................................................... 78
3. MATERIALITY......................................................................... 78
3.1 Aggregate Threshold........................................................... 78
3.2 Trivial Claims................................................................ 78
4. DOUBLE RECOVERY..................................................................... 79
5. RIGHTS AGAINST THIRD PARTIES........................................................ 79
5.1 Prosecution of Claims......................................................... 79
5.2 Insurance..................................................................... 79
5.3 Subsequent Recovery........................................................... 79
5.4 Mitigation.................................................................... 80
5.5 Exclusions applicable to Warranties........................................... 80
5.6 Contingent Liabilities........................................................ 80
5.7 No Rescission................................................................. 80
SCHEDULE 6................................................................................ 81
Clause 9.1: Warranties by the Purchaser............................................. 81
Part I: Warranties.................................................................. 81
Part II: Liabilities................................................................ 83
SCHEDULE 7................................................................................ 85
Agreed Form Documents............................................................... 85
SCHEDULE 8................................................................................ 86
Sub-clause 5.2.1 : Persons to give a Deed of Covenant............................... 86
SCHEDULE 9................................................................................ 87
Clause 6.4 : Persons to enter into a Service Agreement.............................. 87
SCHEDULE 10............................................................................... 88
Clause 9.2 : Employee Bonus Payments................................................ 88
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SCHEDULE 11....................................................................................... 89
Part I: Clause 3.5........................................................................... 89
Representations and Warranties of Vendors regarding acquisition of Consideration Shares...... 89
Part II: Clause 3.5.......................................................................... 90
Agreements of Vendors in connection with their acquisition of Consideration Shares:.......... 90
Part III: Clause 8.7.4....................................................................... 92
Payments of Indemnity Claims with Shares..................................................... 92
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THIS AGREEMENT is made on the 2/nd/ of November, 1999
BETWEEN:
(1) THE PERSONS whose respective names and addresses are set out in column 1
of Schedule 1 ("the Vendors");
(2) IMPAC GROUP, INC a company incorporated in the State of Delaware USA whose
address for service in the United Kingdom is at Drayton House Drayton
Chichester West Sussex PO20 6EW ("the Purchaser")
WHEREAS:
(A) The Vendors are together the registered holders and the beneficial owners
of the entire issued share capital of the Company
(B) It has been agreed that the Vendors should sell and the Purchaser should
purchase all the issued shares in the capital of the Company upon the terms
herein contained
NOW IT IS AGREED that:
1. INTERPRETATION
1.1 Definitions
In this Agreement including its Recitals and (subject to sub-paragraph 1.1
of Schedule 4) its Schedules:
"the Accounting Date" means 30 September;
"the Last Accounting Date" means 30 September 1998;
"the Accounts" means the audited balance sheet and
profit and loss account of the Company
at and for the financial years ended on
the Last Accounting Date (including the
notes thereto and the directors' and
auditors' reports thereon or attached
thereto);
"agreed form" any reference herein to a document being
"in agreed form" means that document in
terms
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agreed between the Vendors' Solicitors
and the Purchaser's Solicitors;
"Associate" means any person:
(a) which is a subsidiary of or
controlled by the person
concerned; or
(b) of which or by whom the person
concerned is a subsidiary or is
controlled; or
(c) who or which is a subsidiary of or
controlled by a person who or
which controls or is the holding
company of the person concerned;
or
(d) in which the person concerned has
a direct or indirect financial
interest (disregarding any
interest in shares in a company
quoted on a recognised stock
exchange representing less than
one per cent (1%) of its issued
share capital and investments in
independently managed pension
schemes, unit trusts, managed
funds or any similar investments);
or
(e) of which one is an officer of the
other; or
(f) of which one is the spouse,
parent, issue, brother or sister
of the other; or
(g) of which one is trustee or nominee
for the other or for any associate
of the other (whether sole or
joint trustee or nominee and
whether the other or the associate
is sole or one of several
beneficiaries); or
(h) who or which is acting on behalf
of that other; or
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(i) with which or with whom the person
concerned is acting in concert
within the meaning of the City
Code on Take-overs and Mergers;
"the Auditors" means Messrs Grant Thornton of 1
Westminster Way Oxford OX2 0PZ;
"aware" means that the person concerned is
either actually aware or ought to be
aware were he diligently to make
appropriate and reasonable enquiries and
give the matter careful consideration;
"the Company" means Thamesdown Colour Limited, a
private limited company incorporated in
England particulars of which are set out
in Schedule 2;
"the Companies Acts" means the Companies Act 1985 and the
Companies Act 1989 as the same have from
time to time been amended and are now in
force;
"Completion" means actual completion of the sale and
purchase hereunder;
"Completion Accounts" means the accounts prepared pursuant to
sub-clause 7.3 which have become final
and conclusive as therein provided;
"Confidential Information" means any and all information and other
matters referred to in paragraph (a) of
the definition of Intellectual Property
and all other information of a
confidential nature relating to
customers, suppliers, finances or other
affairs of the Company;
"the Consideration" means the aggregate consideration
payable hereunder for all the Shares;
"Consideration Shares" means the shares in the capital of the
Purchaser to be issued to the Vendors in
part satisfaction of the Consideration
pursuant to clause 3.3.1;
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"the Deeds of Covenant" means the Deeds of Covenant to be
entered into pursuant to sub-clause 6.1;
"the Disclosure Letter" means the letter written by or on behalf
of the Vendors to the Purchaser of even
date herewith and described as such;
"Encumbrance" means any mortgage, charge, lien,
pledge, option, right to acquire, equity
or other encumbrance or adverse interest
whatsoever or commitment to constitute
any of the same;
"Environmental Claim" means any claim, notice of violation,
prosecution, demand, action, official
warning, abatement or other order or
notice (conditional or otherwise),
relating to any Environmental Matter and
any notification or order requiring
compliance with the terms of any
Environmental Licence or Environmental
Law;
"Environmental Law" includes all or any law, statute,
statutory instrument, rule, regulation,
treaty, directive, direction, by-law,
code of practice, circular, guidance
note, order, notice, demand, decision of
the courts or anything like any of the
foregoing of any governmental authority
or agency or any regulatory body or any
other government or private court,
tribunal, alternative dispute resolution
system, arbitration panel, special
prosecutor or investigating committee or
any other body whatsoever in any
jurisdiction or the European Union
relating to Environmental Matters
applicable for the time being to the
Company and/or the business carried on
by the Company including, and without
prejudice to the generality of the
foregoing, the Environmental Protection
Act 1990 as amended by the Environment
Act 1995 and the draft guidance
4
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issued thereunder by the Department of
the Environment in September 1996 (or
any subsequent guidance) as though it
were in force;
"Environmental Licence" means any permit, licence,
authorisation, consent, certificate,
regulatory plan, compliance schedule or
other approval obtained or which ought
to have been obtained at any time by the
Company and/or in relation to the
business carried on by the Company
pursuant to any Environmental Law;
"Environmental Matters" includes any of the following:
(a) any generation, deposit, disposal,
keeping, treatment,
transportation, transmission,
handling, emission, discharge,
release, threatened release,
creation, storage or manufacture
of any Relevant Substance;
(b) any nuisance, noise, defective
premises, health and safety at
work or elsewhere;
(c) the carrying out of any
development (as defined in section
55(1) of the Town and Country
Planning Act 1991); and
(d) the pollution, conservation or
protection of the environment
(which includes natural resources
whether pertaining to life or not,
such as air, water, soil, fauna
and flora and the interactions
between the same factors and also
the built environment) or of man
or any living organisms supported
by the environment or any other
matter whatsoever affecting the
environment or any part of it ;
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"Guarantee" means any guarantee, indemnity,
suretyship, letter of comfort or other
assurance, security or right of set-off
given or undertaken by a person to
secure or support the obligations
(actual or contingent) of any third
party and whether given directly or by
way of counter-indemnity to any third
party who has provided a Guarantee;
"the Indemnities" means the obligations of the Warrantors
under the Tax Deed ;
"Intellectual Property" means:
(a) all know-how, expertise,
technological information, data,
formulae, designs, processes,
specifications and other knowledge
and information;
(b) all drawings, writings and other
papers, computer programs and
other tangible and non-tangible
manifestations of any items
referred to in paragraph (a) of
this definition;
(c) all rights to and copyright,
patent, trade mark, registered
design, design right and other
protection for or relating to the
foregoing; and
(d) all claims and rights in or
arising from the foregoing;
"the Management Accounts" means the management accounts of the
Company a copy of which is attached to
the Disclosure Letter;
"Net Assets" has the meaning ascribed to it in sub-
clause 7.1.2;
"person" includes any legal or natural person,
partnership, trust, company, government,
local or public authority department or
other body or
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association of persons (whether
corporate or unincorporated);
"the Properties" and both mean the land described in
"the Property" Schedule 3;
"the Purchaser's Solicitors" means Laytons at Carmelite 50 Victoria
Embankment Blackfriars London EC4Y 0LS;
"Purchaser Group" means the Purchaser, any subsidiary of
the Purchaser for the time being, any
holding company of the Purchaser for the
time being and any subsidiary for the
time being of any such holding company,
but shall not include the Company;
"Relevant Substance" means:
(a) any radioactive emissions;
(b) electricity and any electrical or
electromagnetic emissions;
(c) any substance whatsoever (whether
in a solid or liquid form or in
the form of a gas or vapour and
whether alone or in combination
with any other substance);
(d) waste (as defined in section 1 of
the Environmental Protection Act
1990 as amended); and
(e) any activity or other phenomenon
which in the case of (c) and (d)
is capable of causing harm to man
or any other living organism
supported by the environment
(which includes natural resources
whether pertaining to life or not,
such as air, water, soil, fauna
and flora and the interaction
between the same factors and also
the built environment) or damaging
the environment or public health
or welfare;
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"the Retained Consideration" means the part of the Consideration
payable in accordance with clause 3.3.3;
"the Shareholders Agreement" means an agreement in agreed form
amongst the stockholders of the
Purchaser and to which each of the
Vendors is to execute at Completion a
Deed of Accession;
"the Shares" means all the issued shares in the
capital of the Company (being the shares
to be sold and purchased hereunder);
"Tax" means any liability to any form of
taxation or other financial duty, levy,
withholding or impost of any kind,
whether of the United Kingdom or not and
whether of a supra-national, national,
regional, municipal or other public
authority (including without limitation
the following taxes of the United
Kingdom namely corporation tax, income
tax, capital gains tax, any liability
arising under Sections 419 to 422
(inclusive) of ICTA, any liability
arising under Sections 747 to 756
(inclusive) of ICTA, value added tax,
inheritance tax, national insurance
contributions, stamp duty, stamp duty
reserve tax, insurance premium tax,
customs import and export duties,
exercise duties, universal business
rates and other municipal levies) and
all sums paid in respect thereof by way
of deduction, in advance or otherwise
and all fines, penalties, charges,
reasonable costs and interest incidental
or relating thereto;
"Tax Authority" means any fiscal or revenue authority,
whether in the United Kingdom or
elsewhere, empowered to impose, assess
and/or collect Tax;
"the Tax Deed" means the Deed to be entered into
pursuant to sub-clause 6.2;
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"Tax Warranties" means the warranted statements contained in
paragraph 11 of Schedule 4;
"Transaction Documents" means this Agreement and all documents which
are in agreed form and all documents which
are required by the terms of this Agreement
or any such document to be entered into by
the parties or any of them and all other
documents entered into by the parties or any
of them in connection with this Agreement or
any such document;
"the Vendors' Solicitors" means Wiggin and Co of The Quadrangle
Imperial Square Cheltenham Gloucestershire
GL50 1YX;
"the Warranties" means the warranted statements in Schedule 4;
"the Warrantors" means the Vendors excepting Peter Hanley;
"Working Day" means a day not being a Saturday, Sunday or
public holiday in London, England
1.2 Part XXVI Companies Act 1985
Part XXVI Companies Act 1985 shall apply herein for the purposes of
interpretation save in respect of the Tax Warranties, the Tax Deed and
otherwise as herein expressly provided to the contrary
1.3 Statutory Provisions
References to statutory provisions shall be construed as references to
those provisions as respectively amended or re-enacted (whether before or
after the date hereof) from time to time and shall include any provisions
of which they are re-enactments (whether with or without modifications) and
any statutory instruments issued pursuant to them, to the extent that such
amendment, re-enactment or statutory instrument does not change the law in
force as at the date of this Agreement
1.4 Obligations
All warranties, indemnities, covenants, agreements, undertakings and
obligations given or entered into by more than one person in or pursuant to
this Agreement or any other Transaction Document are given or entered into
jointly and severally
1.5 Gender and Number
Each gender includes each other gender and the singular the plural and vice
versa
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1.6 Headings
Clause headings shall be ignored in interpretation
1.7 Clause References
References to clauses, sub-clauses, paragraphs, parts, schedules and
annexes are to clauses, sub-clauses, paragraphs, parts, schedules and
annexes of or to this Agreement unless otherwise expressly stated
1.8 Document References
Reference to this Agreement or any of the Transaction Documents or other
document or to any specified provision of the same are to the same as in
force for the time being and as varied from time to time in accordance with
the terms of the same or with the agreement of the relevant parties
1.9 Calculation of Periods
Where any period is prescribed in this Agreement as being "from", "after"
or "following" a date or event, that period shall commence on the day
following that date or event and shall end at midnight on the last day of
the period so specified
1.10 General Words
The words and phrases "other", "including" and "in particular" shall not
limit the generality of any preceding words or be construed as being
limited to the same class as the preceding words where a wider
interpretation is possible
2. SALE AND PURCHASE
2.1 Agreement
The Vendors (in the proportions set against their respective names in the
second column of Schedule 1) with full title guarantee shall sell and the
Purchaser, in reliance upon the Warranties and other provisions of this
Agreement, shall purchase the entire legal and beneficial ownership of and
in the Shares free from Encumbrance and together with all rights at the
Last Accounting Date or thereafter attaching thereto (including without
limitation the right to receive any dividend or other distribution upon or
in respect of any of the Shares which after the Last Accounting Date may
have been declared or under the rights attached to any of the Shares ought
to have been declared assuming it to have been lawful, or which was
declared before but remained unpaid at the Last Accounting Date, except the
dividends listed in the Disclosure Letter with express reference to this
sub-clause 2.1)
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2.2 Consents and Pre-Emption Waiver
In consideration of the sale and purchase hereby contracted each of the
Vendors:
2.2.1 irrevocably consents to the sale and transfer of the Shares to
the Purchaser;
2.2.2 waives all rights of pre-emption and similar rights in respect of
such transfer;
2.2.3 shall procure the grant by any other person of all other such
consents and waivers as may be necessary;
2.2.4 warrants that no person other than the Vendors is party to any
shareholders agreement or similar document containing any
restriction upon or requirement for consent to such sale and
transfer or which imposes any obligation on the Company or which
is otherwise relevant to this transaction
2.3 Vendors' Warranties
The Vendors covenant, represent and warrant to the Purchaser that:
2.3.1 at Completion the full legal and beneficial interest in the
Shares will be transferred with full title guarantee to the
Purchaser free from Encumbrances and on the terms set out in this
Agreement;
2.3.2 the Shares constitute the whole of the allotted and of the issued
share capital of the Company;
2.3.3 they have full power and authority without requiring the consent
of any person (and have duly exercised such power and authority)
to enter into and perform their obligations under this Agreement
and all Transaction Documents;
2.3.4 they have each taken all necessary action to authorise the
execution, delivery and performance of this Agreement and all
Transaction Documents;
2.3.5 this Agreement and all Transaction Documents will, when executed,
constitute lawful valid obligations binding upon them in
accordance with their respective terms;
2.3.6 the execution, delivery and performance of or compliance with the
provisions of this Agreement and each of the other Transaction
Documents by the Vendors will not cause or constitute any breach
or default of or under any instrument to which any of them is
party or under
11
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any law or regulation in any jurisdiction or of any order,
judgment or decree of any court or governmental agency
2.4 Purchaser's Warranties
The Purchaser covenants, represents and warrants to the Vendors that:
2.4.1 it has and has duly exercised full power and authority to enter
into and perform its obligations under this Agreement and all
Transaction Documents;
2.4.2 it has taken all necessary corporate or other action and obtained
all necessary consents to authorise the execution, delivery and
performance of this Agreement and all Transaction Documents;
2.4.3 this Agreement and all Transaction Documents will, when executed,
constitute lawful, valid obligations binding upon it in
accordance with their respective terms;
2.4.4 the execution, delivery and performance of or compliance with the
provisions of this Agreement and each of the other Transaction
Documents by the Purchaser will not cause or constitute any
breach or default of or under any instrument to which it is party
or under any law or regulation in any jurisdiction or of any
order, judgment or decree of any court or governmental agency
2.5 Severability
The Purchaser shall be entitled but not obliged to complete its purchase of
some of the Shares hereunder if the sale and purchase of all the Shares is
not completed simultaneously in accordance with the terms hereof
3. CONSIDERATION
3.1 Amount
Subject to clause 7, the aggregate Consideration for the sale of all the
Shares shall be the amount of SIX MILLION FIVE HUNDRED AND THIRTY-SEVEN
THOUSAND SEVEN HUNDRED AND FIFTY POUNDS ((Pounds)6,537,750) which shall be
satisfied in accordance with the remaining provisions of this clause
3.2 Apportionment
The aggregate Consideration shall be apportioned rateably amongst the
Shares
3.3 Satisfaction of the Consideration
The Consideration shall be satisfied as follows:
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3.3.1 as to the sum of (Pounds)1,437,500, being the part of the
Consideration payable for the Shares of classes A1 to G1
inclusive - by the allotment and issue to the Vendors credited as
fully paid of the number of shares of series A Common Stock of
the Purchaser set against the respective names of the Vendors in
Schedule 1, such issue to be in reliance upon the provisions of
Schedule 11 and on the basis provided therein and in clause 8.7;
3.3.2 as to the remaining Consideration, being the part of the
Consideration payable for the Shares of classes A(Pounds)1 to
G(Pounds)1 inclusive and A1p to G1p inclusive:
(a) as to the sum of (Pounds)4,950,250 - in cash upon Completion
(b) as to the remaining amount of (Pounds)150,000 - in cash by
bank transfer to the client account of the Vendors'
Solicitors details of which are set out in sub-clause 5.3.1
and in accordance with clause 7 on the date twenty-one days
after the Completion Accounts become final and conclusive as
provided in clause 7.3
3.4 Vendors' Representations and Undertakings concerning Consideration Shares
The provisions of Schedule 11 shall have effect as if herein set out at
length
4. RELATIONSHIPS WITH THE COMPANY
4.1 General
The Vendors undertake with the Purchaser that, subject to sub-clause 4.2,
upon or before Completion each of the Vendors will:
4.1.1 repay and fulfil, or procure there to be repaid and fulfilled, to
the Company all sums and liabilities which are owing, incurred or
outstanding to the Company at Completion by him or by any
Associate of himself;
4.1.2 return to the Company any item of property of the Company in the
possession or control of himself or any Associate of himself;
4.1.3 confirm, and procure that such of his Associates as the Purchaser
may specify prior to Completion confirm, to the Company and to
the Purchaser in writing, and will procure that:
(a) neither he nor any such Associate has any claim, entitlement
or rights whatsoever (whether contractual, tortious,
statutory or otherwise howsoever) against the Company or in
respect of any of the Shares save those agreed to be sold by
him hereunder;
13
<PAGE>
(b) the Company is not in any way obliged or indebted to him or
to any such Associate; and
(c) neither he nor any such Associate owns or has any interest
in any item which is then or has been at any time during the
six months preceding Completion used in the business of the
Company;
4.1.4 assign, and procure that such of his Associates as the Purchaser
may specify assign, to the Company or to such person as the
Purchaser specifies, any rights in any Intellectual Property now
or then held by him or such Associate which is used by or is
relevant to any business of the Company;
4.1.5 acknowledge and undertake that neither he nor any Associate of
his then has, or at any time during the six months preceding
Completion has had, any right to use or any other right or
interest in or relating to any such Intellectual Property;
4.1.6 cause each Associate (except Neil Curry, Robert Hanley, Diane
Hanley and Ben Watson) of any of the Vendors to resign from any
employment with the Company and acknowledge to the Company and
the Purchaser under seal that he or she has no claim against the
Company whatsoever relating to any such employment or its
termination or otherwise arising therefrom and enters into a
Compromise Agreement in compliance with Section 103 Employment
Rights Act 1996 in respect of such termination, each such
resignation and confirmation being without payment or liability
by or upon the Company
and the Vendors shall indemnify the Company against any loss or liability
incurred by it which it would not have incurred had the foregoing sub-
clauses been wholly complied with and (in the cases of sub-clauses 4.1.3
and 4.1.4 of this sub-clause 4.1) all Associates of the Vendors had been
specified in accordance therewith
4.2 Exclusions
Nothing in sub-clause 4.1 or in any document entered into pursuant thereto
shall apply to:
4.2.1 any tangible asset owned by the Company but physically held by
any of the Vendors to enable him more effectively to perform his
duties to the Company as its employee if his employment by the
Company is to continue after Completion;
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<PAGE>
4.2.2 any claim, entitlement, right, obligation, indebtedness or
interest disclosed in the Disclosure Letter with express
reference to this sub-clause 4.2;
4.2.3 salary and other remuneration of the Vendors, at the rates and
upon the basis disclosed in the Disclosure Letter, accrued to the
date of Completion during the month preceding the date of
Completion
5. COMPLETION
5.1 Date and Venue
Subject to the provisions of this Agreement Completion shall take place at
the offices of the Purchaser's Solicitors immediately following signature
of this Agreement
5.2 Vendors' Obligations
Upon Completion the Vendors shall:
5.2.1 Deliver to the Purchaser's Solicitors:
(a) duly executed transfers of the Shares in favour of the
Purchaser or as it may direct together with the respective
share certificates and, if the transferor is not the holder
of the shares transferred as shown in the register of
members of the Company, such other documents as may be
necessary or appropriate to prove the transferor's title to
the same and procure the registration of such transfers;
(b) the Deeds of Covenant duly executed by the persons listed in
Schedule 8;
(c) the Tax Deed duly executed by each of the Warrantors;
(d) all releases (including release from any Encumbrance),
consents and similar documents necessary for Completion to
be effected without Completion or any matter to be effected
at Completion constituting a breach of any agreement or
other obligation or entitling any person to take any action
against the Company or the Shares and enabling legal and
beneficial ownership in the Shares to be transferred free
from any Encumbrance;
(e) the resignations required by sub-clause 5.2.2 duly executed
as required by the respective persons who so resign;
(f) the items required by clause 4;
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(g) certificates from each of the banks at which the Company
maintains accounts of the amounts standing to the credit (or
debit) of each of such accounts at the close of business on
the Working Day last preceding the day of Completion;
(h) powers of attorney in agreed form duly executed by each of
the Vendors in favour of the Purchaser and each person for
the time being a director of the Purchaser, authorising them
to exercise the voting and other rights attached to the
Shares and related matters;
(i) a Deed of Accession to the Shareholders Agreement duly
executed by each of the Vendors;
(j) duly executed powers of attorney or other authorities (or
correct and complete copies of the same duly certified in
accordance with the Powers of Attorney Act 1971) under which
any document required to be delivered at Completion has been
executed;
(k) each of the Service Agreements to be entered into pursuant
to clause 5.3.4 duly executed by the employee who is party
to it
5.2.2 Procure:
(a) due approval for registration in the register of members of
the Company of the share transfers required to be effected
under this Agreement in accordance with the relevant
Articles of Association;
(b) that such persons as the Purchaser may nominate are validly
appointed additional directors and the Secretary of the
Company and that upon such appointment the Secretary of the
Company resigns, such resignation being confirmed by the
person resigning handing to the Purchaser a letter executed
as a deed addressed to the Company in a form required by the
Purchaser acknowledging that he has no claim or entitlement
whatsoever against or from the Company outstanding or
arising from termination of his office or employment whether
for compensation, arrears of salary, fees, expenses, damages
or otherwise howsoever;
5.2.3 Deliver to the Purchaser as agent for the Company:
(a) the title deeds to the Properties;
16
<PAGE>
(b) all the statutory and other books duly written up to date of
the Company and its certificate of incorporation and common
seal
5.3 Purchaser's Obligations
Subject to due performance by the Vendors of their obligations hereunder
the Purchaser shall upon Completion:
5.3.1 transfer by bank transfer to the following client account of the
Vendors' Solicitors the amount of the consideration payable in
cash upon Completion:
Bank: Barclays Bank plc, 128 High Street, Cheltenham, Glos GL50
1EL
Sort Code: 20-20-15
Account Number: 20957259
Account Name: Wiggin and Co Client's Premium Account
5.3.2 issue to each of the Vendors credited as fully paid the number of
Consideration Shares set against his name in column 5 of Schedule
1, such issue to be conditional upon its not being cancelled
pursuant to clause 8.7
5.3.3 deliver to the Purchaser's Solicitors certificates for the
Consideration Shares, to be held by them until the Release Date
whereupon the same shall, as soon as is practicable, be delivered
by the Purchaser's Solicitors to the Vendors' Solicitors; for
this purpose "Release Date" means the later of 1 May 2001 and the
date upon which any claim by the Purchaser that a Liability
within the meaning of clause 8.7.1 exists, being a claim of which
notice is given before 1 May 2001, is finally resolved by
agreement between the parties or by judgment of a court of
competent jurisdiction from which no appeal can still be made
5.3.4 deliver to the Vendors' Solicitors a counterpart duly executed by
the parties to the same (other than those who are Vendors or
Warrantors) of the following documents required to be entered
into pursuant to clause 6:
(a) the Tax Deed
(b) the Deeds of Covenant
(c) the Service Agreements
5.4 Receipts
The receipt of the Vendors' Solicitors for any monies paid to them by the
Purchaser on account of the Consideration and documents delivered to them
on behalf of the
17
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Vendors shall be a good discharge to the Purchaser, which shall not be
concerned with distribution of the same amongst the Vendors
5.5 Other Transactions
It shall be a pre-condition to the obligation of the Purchaser to proceed
to Completion that upon Completion each of the persons respectively party
thereto (other than the Purchaser) shall effect or procure that there are
effected the transactions and enter into or procure that there are entered
into the documents required by clause 6 and shall deliver to the other
parties thereto a part of such document duly executed by him (under hand or
as a deed, as the document requires)
6. OTHER TRANSACTIONS
6.1 Deed of Covenant
The persons listed in Schedule 9, the Company and the Purchaser shall upon
Completion enter into a Deed of Covenant in agreed form
6.2 Tax Deed
The Warrantors and the Purchaser shall upon Completion enter into the Tax
Deed in agreed form
6.3 Shareholders Agreement
Upon Completion the Vendors shall each execute a deed of accession in
agreed form to the Shareholders Agreement
6.4 Service Agreements
Upon Completion the persons listed in Schedule 9 shall enter into with the
Company, and the Purchaser shall cause the Company to enter into with them,
service agreements in agreed form
6.5 Financial Assistance
At the request of the Purchaser at any time within four months from
Completion the Vendors shall take such action as may reasonably be required
of them (including action in the capacity of a director of the Company) to
cause the requirements of sections 155 to 158 Companies Act 1985 to be
satisfied in respect of the giving by the Company of any financial
assistance within the meaning of sections 151 and 152 of that Act where the
acquisition referred to in those sections is the acquisition of the Shares
pursuant to this Agreement
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7. NET PROFIT AND COMPLETION ASSETS
7.1 Net Profit and Completion Assets Warranty
The Vendors warrant to and undertake with the Purchaser that:
7.1.1 the net profit of the Company after interest and before taxation for
its financial year ended 30 September 1999 ("the Net Profit") was
not less than ONE MILLION TWO HUNDRED AND ONE THOUSAND POUNDS
((Pounds)1,201,000)
7.1.2 the net tangible assets of the Company on 30 September 1999 ("the
Net Assets") were not less than ONE MILLION FOUR HUNDRED THOUSAND
POUNDS ((Pounds)1,400,000)
7.2 Accounting Bases
The Net Profit and the Net Assets shall be computed on the following
bases:
7.2.1 the cost of stock in trade held at the date of Completion shall be
calculated consistently with the accounting practices of the Company
applied in the Accounts for the year ended on the Last Accounting
Date and such stock will be included in the Completion Accounts at
the lower of its cost as so calculated and its net realisable value;
7.2.2 no fixed asset shall be given a value higher than its value in the
Accounts at the Last Accounting Date less depreciation to the date
of Completion;
7.2.3 intangible assets shall be disregarded;
7.2.4 reasonable provision shall be made for bonus, profit-sharing,
incentive and similar payments to which employees of the Company may
become entitled in respect of any period preceding Completion (save
to the extent already provided for in the Accounts), including for
the avoidance of doubt full provision for the payments to be made
pursuant to clause 9.2 (as if, if such is not actually the case, the
same had been paid by the Company prior to 30 September 1999);
7.2.5 in computing the Net Assets, no provision shall be made for deferred
tax and there shall be added back a sum equal to seventy per cent of
the amount of any reduction in the Consideration pursuant to clause
7.4.1;
7.2.6 subject to the foregoing, generally accepted accounting principles
and practice will be applied and subject thereto assets and
liabilities will be valued and recognised consistently with the
Accounts for the year ended on the Last Accounting Date (including
depreciation to the date of
<PAGE>
Completion) and the same accounting policies and principles as were
applied in the Accounts to the Last Accounting Date shall be applied
in a manner consistent therewith
7.3 Completion Accounts
7.3.1 Preparation: As soon as practicable following Completion and in any
event within thirty days from Completion (or such longer period as
the Vendors' Solicitors and the Purchaser's Solicitors may agree in
writing) the parties shall cause the Auditors to:
(a) prepare a profit and loss account for the year ended on 30
September 1999 and a balance sheet of the Company as at that
date applying the provisions of sub-clause 7.2 and subject
thereto in all respects consistently with the Accounts; and
(b) certify the Net Profit and the Net Assets and cause a copy of
such certificate to be delivered to the Purchaser;
(c) make available to the Purchaser all relevant working papers and
supporting documentation subject to their receipt of a standard
hold harmless letter
7.3.2 Purchaser's Opportunity to Challenge: At any time within fourteen
(14) days following delivery of copies of the same pursuant to sub-
clause 7.3.1, the Purchaser by written notice to the Vendors'
Solicitors may challenge the accuracy of the accounts and
certificate prepared pursuant to sub-clause 7.3.1 provided always
that the Purchaser shall state in such notice the grounds for such
challenge and shall not act frivolously or vexatiously
7.3.3 Verification: If the accounts and certificate are not prepared and
delivered in accordance with sub-clause 7.3.1 or if in compliance
with and within the time allowed by sub-clause 7.3.2 the Purchaser
challenges the accounts and certificate so delivered, then:
(a) the amount of the Net Profit and the Net Assets shall each be
such sum as is and the Completion Accounts shall be such as are:
(i) agreed in writing between the Vendors and the Purchaser; or
(in default of such agreement)
(ii) certified by a firm of independent accountants agreed
between the Vendors and the Purchaser; or
<PAGE>
(iii) certified by a firm of independent chartered accountants
appointed on the application of the Vendors or the
Purchaser by the President for the time being of the
Institute of Chartered Accountants in England and Wales
(b) any such agreement or certificate, when made or issued, shall be
final and conclusive as to the amount of the Net Profit and the
Net Assets (and the Completion Accounts shall become final for
purposes of this Agreement upon such agreement being reached or
certification made)
(c) any such firm of independent accountants shall act as experts and
not arbitrators and its fees shall be borne by the Vendors and
the Purchaser in such proportions as it shall decide
(d) the parties shall provide and the Purchaser shall cause the
Company to provide to any independent accountant appointed in
accordance with this sub-clause 7.3 and in confidence to the
Vendors' Accountants or the Purchaser (as the case may be) such
information and assistance as may properly be required in
connection with the preparation or review and certification of
the Completion Accounts and certification of the Net Profit and
the Net Assets in accordance with this clause
7.4 Shortfall Compensation
7.4.1 If the amount of the Net Profit as so certified or agreed is less
than the said sum of (Pounds)1,201,000 the amount of the
Consideration shall be reduced by (Pounds)1 for every (Pounds)1 of
the shortfall (and if the Net Profit is a loss the shortfall shall be
the sum of (Pounds)1,201,000 plus the amount of the loss)
7.4.2 If the amount of the Net Assets as so certified or agreed is less
than the said sum of (Pounds)1,400,000 the amount of the
Consideration shall be reduced by (Pounds)1 for every (Pounds)1 of
the shortfall (and if the Net Assets are net liabilities the
shortfall shall be the sum of (Pounds)1,400,000 plus the amount of
the net liabilities);
7.4.3 Any reduction in the Consideration pursuant to this clause 7.4 shall
be made first from the Retained Consideration and if the reduction
exceeds the Retained Consideration the Vendors shall within seven (7)
days of notice to the Vendors' Solicitors requiring repayment pay to
the Purchaser
<PAGE>
in cash a sum equal to the amount of the excess together with
interest on that amount (as well after as before judgment) at that
rate which is two percentage points above the base rate from time to
time declared by The Royal Bank of Scotland plc, calculated from the
date of Completion to the date of repayment and compounded at the end
of each period of three months
7.5 Auditors' Costs
The Vendors shall upon the same falling due pay to the Auditors and
indemnify the Company and the Purchaser against one-half of the fees and
expenses (together with VAT thereon) payable to the Auditors for, and
solely attributable to, their services pursuant to clause 7.3.1 (save in so
far as chargeable in any event for the normal year-end audit of the
Company)
8. WARRANTIES, INDEMNITIES AND COVENANTS
8.1 The Warranties
The provisions of Schedule 4 shall have effect as if set out herein at
length
8.2 Limitations
Except where any claim arises by reason of fraud, wilful concealment,
dishonesty or deliberate or reckless non-disclosure on the part of the
Vendors or of any representative of the Vendors (in which case Schedule 5
shall not apply) the provisions of Schedule 5 shall have effect as if
herein set out at length in order to limit the liability of the Warrantors
in respect of the Warranties
8.3 Quantification of Loss
Without limiting the rights of the Purchaser or otherwise affecting its
ability to claim and recover damages on any other basis available to it, if
any of the Warranties is or proves to be incorrect, incomplete or
misleading ("a Relevant Breach"), the Warrantors shall at the request of
the Purchaser pay to the Purchaser or (if so directed by the Purchaser) to
the Company:
8.3.1 such amount as will put the Company into the position which would
have existed if the Warranties had been true, complete and not
misleading and without limiting this sub-clause:
(a) if any asset of the Company is extinguished or is worth less than
its value would have been if the Relevant Breach had not
occurred, the amount to be paid by the Warrantors at the request
<PAGE>
of the Purchaser shall be the amount of the loss or diminution in
value of the assets;
(b) if the Company has or will have a liability or an increased or
substituted liability which would not have been the case had the
Relevant Breach not occurred, the amount to be paid by the
Warrantors at the request of the Purchaser shall be the amount of
the increase in liabilities which would not have been the case
but for the Relevant Breach;
(c) if the effect of the Relevant Breach is that there does not
accrue to the Company a benefit, gain or profit which it might
reasonably have been expected would accrue, the amount to be paid
by the Warrantors at the request of the Purchaser shall be the
amount equal to the capitalised value of such benefit, gain or
profit;
(d) in any case there shall be paid such further amount (if any) as
may be necessary to put the Company into the same position in
financial terms as it would have been in had the Relevant Breach
not occurred;
8.3.2 all reasonable costs and expenses incurred by the Purchaser or the
Company as a result of any of the Warranties being untrue, incomplete
or misleading and any reasonable costs (including reasonable legal
costs on a full indemnity basis), expenses and other liabilities
which any of them may incur either before or after commencement of
any action in connection with any legal proceedings in pursuit of any
claim under the Warranties in which judgment is given for the
Purchaser or in connection with the enforcement of any settlement or
judgment relating to such claim;
8.3.3 if any sum payable by the Warrantors under the preceding sub-clauses
8.3.1 and 8.3.2 is subject to payment of any Tax in the hands of the
recipient (whether by deduction, withholding or direct assessment),
such payment shall be increased by such amount as after deduction,
withholding or payment of such Tax leaves clear in the hands of the
recipient a net amount equal to the payment otherwise required by
this sub-clause to be made
<PAGE>
8.4 Further Disclosure
As soon as practicable after any of the Warrantors becomes aware of the
same he shall disclose in writing to the Purchaser any matter, thing or
occurrence whatever and whenever it arose or occurred or became known
to any of them (and whether before, on or after Completion) which is
inconsistent with any of the Warranties and might be material to the
Company or to the Purchaser and such disclosure shall be without
prejudice to any rights or remedies of the Purchaser
8.5 Indemnities
Subject to sub-clause 8.6 and subject to paragraphs 2 and 3.2 of
Schedule 5, the Warrantors shall indemnify the Company and the
Purchaser and each of them against the following save to the extent
provided for in the Accounts or in the Completion Accounts and (subject
to sub-clauses 8.6 and 8.7) shall pay to the Company an amount equal
to:
8.5.1 any liability of the Company of any kind to any person which
arises from the existence or activities of the Company in or
conducted from anywhere outside the United Kingdom, save to the
extent that such liability was fairly disclosed in the Disclosure
Letter;
8.5.2 any liability to any person in respect of any of the following
whether or not such liability is based on fault and whether or
not it comprises penalties, clean up costs, compensation, other
costs or other liability, where the damage or other matter the
subject of the claim occurred or arose wholly or partly prior to
Completion:
(a) the discharge of liquid from the premises into drains or
sewers without any requisite discharge consent from the
competent authority
(b) any failure to comply with applicable legal requirements as
to waste security, disposal or removal on or from the
Property
(c) any failure to comply with applicable legal requirements in
relation to health and safety at the Property in so far as
such relate to levels of solvent and their monitoring and
precautions in respect of flammable liquids;
8.5.3 any liability to any person arising from or relating to any
product manufactured, produced or supplied or service rendered by
the Company prior to Completion, save in relation to the
complaint from Arcom Limited
<PAGE>
relating to the production of the Little Chef menus, (details of
which are contained in the Disclosure Letter) to the extent only
that liability in respect of or arising from the subject of that
complaint is specifically provided for in the Management Accounts
or in the Completion Accounts;
8.5.4 any liability to any employee or former employee of the Company
in respect of any illness contracted or injury suffered in the
course of his employment wholly or partly before Completion save
in respect of the alleged workplace accident involving Mr John
Withers, details of which are contained in the Disclosure Letter;
8.5.5 any cost claim, liability or expense whatsoever suffered or
incurred by the Company which it would not have suffered or
incurred if all necessary consents had been obtained from the
immediate and all superior landlords of the Property for all
alterations, additions and other works to the Property which have
been undertaken prior to the date hereof by or on behalf of the
Company including without limitation:
(a) all costs properly incurred in seeking or obtaining any such
consents;
(b) all costs and liability properly incurred as a consequence of
compliance with or defending or otherwise contesting any
enforcement or other proceedings taken by any landlord or
superior landlord;
(c) all costs reasonably and properly incurred in pursuing any
action or proceedings for a declaration that the consent of
any landlord or superior landlord is being unreasonably or
unlawfully withheld or delayed;
(d) all costs reasonably and properly incurred in removing any
works and reinstating the Property if the consent of any
landlord or superior landlord cannot be obtained;
(e) all proper costs of acquisition of and removal to alternative
premises including fitting out new premises to a reasonable
standard, moving the business undertaking, business
disruption, relocation expenses properly incurred and similar
items;
(f) all increased occupancy costs;
<PAGE>
(g) any other liability to any landlord or any superior landlord
of the Property
Provided that the Purchaser shall act in good faith with a view
to taking all reasonable steps to mitigate all losses detailed in
this sub-clause and shall liase with the Warrantors prior to
settling any action brought by any landlord superior landlord or
third party in relation to matters referred to in this sub-
clause;
8.5.6 any liability of the Company to any third party under any express
undertaking, assurance, confirmation or similar statement in
respect of millennium compliance within the meaning of paragraph
6.15 of Schedule 4 or matters connected with or similar to such
compliance;
8.5.7 save in respect of Neil Curry, Robert Hanley, Diane Hanley and
Ben Watson, any liability to any parent, spouse, brother, sister,
child, nephew or niece of any of the Vendors after the date of
this Agreement in respect of termination of any employment or
other relationship between such individual and the Company or
relating to any ongoing liability of the Company to any such
individual of any kind (disregarding entitlement as a holder of
shares in the capital of the Company but including any liability
to national insurance contributions and any liability under PAYE
Regulations);
8.5.8 any liability of the Company to any third party under any
Guarantee or other commitment given to support or secure the
obligations of any of the Vendors or any Associate of any of the
Vendors;
8.5.9 any cost, claim, liability or expense whatsoever suffered or
incurred by the Company which it would not have suffered or
incurred if all planning and other consents existed, free from
condition and not limited in time, for the use of the Property
for the Present Use as defined in Schedule 3 including without
limitation
(a) all costs properly incurred in seeking or obtaining any such
consents
(b) all fines and penalties imposed which would not have been
imposed had such consents existed
<PAGE>
(c) all costs reasonably and properly incurred as a consequence
of compliance with any enforcement, stop or other
proceedings or actions by any authority;
(d) all costs reasonably and properly incurred of acquisition of
and removal to alternative premises including fitting out
the new premises to a reasonable standard, moving the
business undertaking, business disruption, relocation
expenses properly incurred, and similar items;
(e) all increased occupancy costs;
(f) all liability to the landlord of the Property
Provided that the Purchaser shall act in good faith with a view
to taking all reasonable steps to mitigate all losses detailed
in this sub-clause and shall liaise with the Warrantors prior to
settling any action brought by any landlord superior landlord or
third party in relation to matters referred to in this sub-
clause
8.5.10 any liability of the Company to Hartley Print Limited, Mr
Nicholas Hartley or any other person in respect of or arising
under or from the acquisition by the Company of the undertaking
and assets of Hartley Print Limited or from any matter in or in
respect of the course of operation of that business by the
Company up to Completion, save in respect of the consultancy fee
paid by the Company to Mr Nicholas Hartley of (Pounds)2,000 per
month;
8.5.11 any liability of the Company to pay, allow or repay any retro-
discount, rebate, commission or similar payment or to make any
allowance or refund by reference to any reduction in the cost of
paper, in each case save to the extent provided for in the
Completion Accounts;
8.5.12 any loss, liability, claim or expense suffered or incurred by
the Purchaser which it would not have suffered or incurred had
the warranties and representations by the Vendors in paragraphs
(a) (b) and (d) of Schedule 11 been true and correct
8.5.13 the Warrantors undertake that if any of the asset purchase
agreements with Close Asset Finance Limited and Forward Trust
Limited ("the Finance Houses") entered into by the Company are
terminated by the relevant
<PAGE>
Finance House in exercise of its right of termination arising
upon the change of control constituted by this transaction, the
Warrantors shall:
(a) procure that the equipment the subject of the relevant
agreement continues to be available for operational use by
the Company without interruption for at least as long as it
could have been so available under or pursuant to the
exercise of rights under the relevant agreement and on no
worse terms as to cost and otherwise than those applicable
under the relevant agreement and without any cost arising
from the termination;
(b) indemnify the Company and the Purchaser against any cost,
loss, expense or liability suffered or incurred which would
not have been suffered or incurred had the relevant
agreement not been terminated and (if it had been
terminated) the Warrantors had fully observed their
obligations under the preceding paragraph
the Purchaser shall provide all information reasonably requested
of it and otherwise co-operate with the Warrantors in seeking a
waiver of such right of termination
8.5.14 all costs, claims, proceedings and expense (including legal fees
on the basis of a full indemnity) suffered or incurred by the
Company or the Purchasers in dealing with, disputing or
otherwise in relation to any liability or other matter referred
to in the preceding sub-clauses of this sub-clause 8.5 (not
being a matter in respect of which liability under this clause
8.5 is excepted)
8.6 Indemnity Payments
Subject to clause 7 in any case in which the Warrantors are required in
this Agreement to indemnify the Company:
8.6.1 they may pay to the Purchaser instead of to the Company a sum
equal to the amount (disregarding the next sub-clause 8.6.2)
payable to the Company and receipt by the Purchaser shall be a
good discharge of the Warrantors' liability in respect of the
payment under those indemnities to which it relates;
8.6.2 the amount required or elected to be paid by the Warrantors in
respect of any such indemnity (whether to the Company or to the
Purchaser) shall be such sum as after deduction of Tax suffered
by the recipient as a result of
<PAGE>
such payment leaves clear in the hands of the recipient, free of
all Tax, a sum equal to the amount payable, disregarding this
sub-clause 8.6.2
8.7 Satisfaction of claims
8.7.1 In this clause 8.7 "Liability" means any liability of the
Warrantors to make any payment by reason of any breach of the
Warranties or in respect of or pursuant to any other provision of
this Agreement (save clause 7) or the Tax Deed
8.7.2 Any Liability shall be satisfied:
(a) as to the part of the Liability which results from
multiplication of the amount of the Liability by the
fraction 1.4375/5.5 - by cancellation of that number of
Consideration Shares as has a value equal to that part of
the Liability so calculated
(b) as to the balance by payment in cash by the Warrantors
8.7.3 For the purposes of clause 8.7.2:
(a) subject to Part III of Schedule 11 the value of each of the
Consideration Shares shall be calculated by dividing the sum
of (Pounds)1,437,500 by the total number of the
Consideration Shares issued pursuant to this Agreement
(b) the number of Consideration Shares so cancelled shall be
apportioned amongst the Warrantors liable upon the Liability
rateably in proportion to the respective numbers of
Consideration Shares issued to them pursuant to this
Agreement
8.7.4 The provisions of Part III of Schedule 11 shall have effect as if
herein set out at length
9. FURTHER OBLIGATIONS OF THE PURCHASER
9.1 Warranties
The provisions of Schedule 6 shall have effect as if set out herein at
length
9.2 Employee Bonus
The Purchaser shall make or procure that there are made the payments
required by Schedule 10, to the individuals, at the times and subject to
the provisions of that Schedule
<PAGE>
10. FURTHER ASSURANCE
10.1 Vesting Ownership and Ensuring Benefit
The Vendors shall do, execute and perform and procure to be done, executed
and performed such further acts, deeds, documents and things as the
Purchaser may from time to time reasonably require effectively to vest the
full legal and beneficial ownership of the Shares in the Purchaser (or as
it directs) in accordance with this Agreement free from all Encumbrances
and otherwise to ensure to the Purchaser the full benefit of this Agreement
10.2 Information
The Vendors shall cause to be made available to the Purchaser all
information in their possession or under their control which the Purchaser
may from time to time reasonably require (before or after Completion)
relating to the business and affairs of the Company
11. GENERAL
11.1 Costs
Each party hereto shall pay his own costs of and incidental hereto and to
the sale and purchase hereby contracted and other matters herein provided
for, including in particular but without limiting the foregoing all legal
and accountancy fees relating to this transaction or the negotiations
therefor or matters arising in the course of the same, with the exception
of the sum of (Pounds)17,500 (plus VAT) paid before the date hereof to BDO
Stoy Hayward by the Company, and notwithstanding that the Company may be
legally liable for the same and the Vendors shall indemnify the Company
against any costs incurred by it before Completion which it would not have
incurred but for matters referred to in this sub-clause
11.2 Successors
Subject as hereinafter provided, this Agreement and all warranties,
undertakings and provisions contained herein shall be binding upon and
enure for the benefit of the successors and assigns of the parties hereto
including their legal personal representatives and estates provided always
that the Purchaser may from time to time assign in whole or in part the
benefit of all or any of this Agreement, the Warranties, the Deed of
Covenant and the Tax Deed only to:
11.2.1 persons comprising part of the Purchaser Group provided always
that if such assignee subsequently ceases to be a part of the
Purchaser Group it
<PAGE>
shall re-assign such benefit to a person then comprising part of
the Purchaser Group;
11.2.2 to any person by way of security or upon enforcement or
realisation of any security
11.3 Collateral Agreements and Variations
This Agreement (including any documents referred to herein) constitutes the
entire agreement between the parties and no variation hereof shall be
effective unless in writing signed by the parties hereto or on their behalf
by their respective Solicitors above defined
11.4 Continuing Effect
The provisions of this Agreement and of the Schedules (insofar as the same
have not been wholly performed at Completion) shall remain in full force
and effect for so long as may be necessary to give full effect thereto and
in particular the Warranties and the representations given by the Vendors
or any of them shall continue to have effect after Completion whether or
not the Purchaser is then aware of any breach or circumstance which might
be or give rise to a breach Completion shall in no circumstances whatsoever
constitute a waiver of any of the rights or remedies of the parties
11.5 Non-Waiver
No time or other indulgence granted by any party to another shall
constitute any waiver of or otherwise affect any right or remedy hereunder
Subject as herein provided all rights and remedies shall be cumulative and
not mutually exclusive
11.6 Several Dealings
The Purchaser may deal separately with, grant time or other indulgence to,
enter into separate agreements or compromises with or release the liability
of any of the Vendors or Warrantors and no action or inaction whatsoever of
the Purchaser in relation to any of the Vendors or Warrantors shall affect
the liability of any other of the Vendors or Warrantors
11.7 Circulars and Announcements
Any announcements, reports, circulars and other documents which any party
hereto shall be required or wish to have prepared in connection with or
resulting from this transaction shall be subject to the approval of the
other parties hereto (which shall not be unreasonably withheld) save that
any party (after consultation with the other parties hereto) may make or
issue any announcements, circulars and other
<PAGE>
communications which it is required to make by law or by any regulatory
body to which it is subject
11.8 Previous Agreements
This Agreement replaces any previous agreement, understanding or
arrangement in the matter between the parties, all of which shall by
mutual consent cease to have effect upon the signing hereof
11.9 Consents
Any consent, agreement, election, request, decision or similar matter
required to be given or made by the Vendors or any of them shall be
effectively given or made if given or made by Mr C J Watson, or Ms G E
Carleton
11.10 Counterparts
This Agreement may be executed in any number of counterparts each bearing
the signature of one or more of the parties hereto and each such
counterpart shall be an original and shall be effective once every party
hereto has executed one or more such counterparts (whether the same or
different counterparts) and together shall constitute a single Agreement
11.11 Fraud
Nothing in this Agreement shall prevent or restrict liability for fraud
11.12 Law and Proceedings
Save for Schedule 11, this Agreement and all other Transaction Documents
shall be governed and construed in all respects in accordance with the
laws of England and each of the parties irrevocably submits to the non-
exclusive jurisdiction of the courts of England
12. NOTICES
12.1 Authorised Addresses
Any notice or other communication hereunder shall be given in writing and
(without prejudice to service in any other manner) shall be validly
served:
12.1.1 on each of the Vendors if addressed to them and given to the
Vendors Solicitors, or if given to them at their respective
addresses stated in column 1 of Schedule 1 with a copy to the
Vendors' Solicitors (Ref MWT)
<PAGE>
12.1.2 to the Purchaser if given to it at its address for service in the
United Kingdom noted above with a copy given to the Purchaser's
Solicitors (Ref: IMPAC/RJK/LCM/150.175)
PROVIDED THAT any party may by notice to each other party change its
address for service of notices and such new address shall therefrom be
substituted for that previously applicable
12.2 Service
Any notice so given shall be deemed to have been given as follows:
12.2.1 if given personally to the addressee or to a director or the
secretary of a corporate addressee or if left at the address for
the addressee for the time being authorised as stated above (and
any such notice or communication shall be deemed served when so
delivered);
12.2.2 if sent within the United Kingdom, if sent by first class mail to
the address for the time being authorised for the addressee as
stated in sub-clause 12.1 above (and any such communication so
sent shall be deemed delivered at noon on the second day
following the date of mailing)
AS WITNESS the hands of the parties or their duly authorised representatives the
date first above written
<PAGE>
SCHEDULE 1
Sub-clause 2.1: The Vendors and their respective Shares and Consideration
<TABLE>
<CAPTION>
Vendor Number of Shares Total Cash Consideration
Consideration Consideration Shares
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Christopher John 79,450 'A' (Pounds)1 } -
--------------------- ------------------------
Watson 317,800 'A' 1p }(Pounds)1,920,449.59 -
The River House
--------------------- -------------------------------------------------
Quenington 33,369 'A1' (Pounds)1 (Pounds)541,276.66
Cirencester 1467.47 Shares
---------------------------------------------------------------------------------------------------
Gloucestershire
GL7 5BW (Pounds)2,461,726.25
- ---------------------------------------------------------------------------------------------------------------------------------
Martyn Nigel Williams 40,000 'B' (Pounds)1 } -
--------------------- ------------------------
5 New Meadow 600,000 'B' 1p }(Pounds)966,872.04 -
Ladywood Peatmoor
--------------------- -------------------------------------------------
Swindon 16,800 'B1' (Pounds)1 (Pounds)272,511.85
Wiltshire SN5 5AQ
---------------------------------------------------------------------------------------------------
(Pounds)1,239,383.89 738.81 Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Keith Jonathan Wand 30,000 'C' (Pounds)1 } -
--------------------- ------------------------
13 Chasewood Corner 450,000 'C' 1p } (Pounds)725,154.03 -
Bussage
--------------------- -------------------------------------------------
Gloucestershire 12,600 'C1' (Pounds)1 (Pounds)204,383.89
GL6 8JS 554.11 Shares
---------------------------------------------------------------------------------------------------
(Pounds)929,537.92
- ---------------------------------------------------------------------------------------------------------------------------------
Nicholas Elbourne 25,000 'D' (Pounds)1 } -
--------------------- ------------------------
24 Hampton Drive 375,000 'D' 1p } (Pounds)604,295.02 -
Grange Park
--------------------- -------------------------------------------------
Swindon 10,500 'D1' (Pounds)1 (Pounds)170,319.90
Wiltshire SN5 6HF 461.76 Shares
---------------------------------------------------------------------------------------------------
(Pounds)774,614.92
- ---------------------------------------------------------------------------------------------------------------------------------
John Peter Curry 10,550 'E' (Pounds)1 } -
--------------------- ------------------------
4 Lake View 158,250 'E' 1p } (Pounds)255,012.50 -
Toadsmoor Road
--------------------- -------------------------------------------------
Brimscombe 4,431 'E1' (Pounds)1 (Pounds)71,875.00
Stroud 194.86 Shares
---------------------------------------------------------------------------------------------------
Gloucestershire (Pounds)326,887.50
GL5 2TB
- ---------------------------------------------------------------------------------------------------------------------------------
Grace Eveline Carleton 25,000 'F' (Pounds)1 } -
--------------------- ------------------------
1 Aspen Close 25,000 'F' 1p } (Pounds)604,295.02 -
Green Park
--------------------- -------------------------------------------------
Wootton Bassett 10,500 'F1' (Pounds)1 (Pounds)170,319.90
SN4 7HN 461.76 Shares
---------------------------------------------------------------------------------------------------
(Pounds)774,614.92
- ---------------------------------------------------------------------------------------------------------------------------------
Peter Hanley 1,000 'G' (Pounds)1 } -
--------------------- ------------------------
3 Hornsey Gardens 14,000 'G' 1p } (Pounds)24,171.80 -
--------------------- -------------------------------------------------
Swindon 420 'G1' (Pounds)1 (Pounds)6,812.80
Wilts SN3 4UT 18.47 Shares
---------------------------------------------------------------------------------------------------
(Pounds)30,984.60
- ---------------------------------------------------------------------------------------------------------------------------------
Totals (Pounds)6,537,750 (Pounds)5,100,250.00 (Pounds)1,437,500.00
3897.24 Shares
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NB: The A1 - G1 shares are to be exchanged for shares in IMPAC.
The 'A' (Pounds)1 and 'A' 1p shares are to be sold in consideration for
cash.
Total Consideration" and "Cash Consideration" are subject to adjustment
pursuant to clause 7.4 of the Agreement
<PAGE>
SCHEDULE 2
Sub-clause 1.1: Information concerning the Company
Name: Thamesdown Colour Limited
Place of Incorporation: England and Wales
Corporate Status: Private company limited by shares
Date of Incorporation 22 May 1996
Registration Number 3202543
Registered Office Unit 11 Bramble Road Techno Trading Estate Swindon
SN2 6HB
Directors Grace Eveline Carleton
John Peter Curry
Nicholas Elbourne
Keith Jonathan Wand
Christopher John Watson
Martyn Nigel Williams
Secretary Grace Eveline Carleton
Authorised Share Capital (Pounds)331,270 divided into 79,450 A shares of
(Pounds)1 each, 40,000 B shares of (Pounds)1 each,
30,000 C shares of (Pounds)1 each, 25,000 D shares
of (Pounds)1 each, 10,550 E shares of (Pounds)1
each, 25,000 F shares of (Pounds)1 each, 1,000 G
shares of (Pounds)1 each, 1,191,750 A shares of 1p
each, 600,000 B shares of 1p each, 450,000 C
shares of 1p each, 375,000 D shares of 1p each,
158,250 E shares of 1p each, 375,000 F shares of
1p each, 15,000 G shares of 1p each, 33,369 A1
shares of (Pounds)1 each, 16,800 B1 shares of
(Pounds)1 each, 12,600 C1 shares of (Pounds)1
each, 10,500 D1 shares of (Pounds)1 each, 4,431 E1
shares of (Pounds)1 each, 10,500 F1 shares of
(Pounds)1 each, 420 G1 shares of (Pounds)1 each
Issued Share Capital The shares of the respective classes set out
against the respective names of the Vendors in the
second column of Schedule 1
<PAGE>
SCHEDULE 3
Sub-clause 1.1: The Properties
GENERAL
Address: Unit 11 Techno Trading Estate Bramble Road Swindon
Tenure: Leasehold
Title: Unregistered
Encumbrances: Only those referred to in the Lease and Headlease
Present Use: Printing for a use within Class B1(c) of the Town
& Country Planning (Use Classes) Order 1987
Occupied by: The Company
Value in the Accounts: No capital value of Lease
Costs of Lease capitalised - value as at 30
September 1999 (Pounds)4,447
IF LEASEHOLD:
Date of Lease: 11 September 1996
Landlord: Botany Investments Limited
Original Tenant: The Company
Term: From 1 August 1996 to 24 March 2004
Break clause: None
Current rent: (Pounds)32,000=per annum
Review Date 25 March 1999
HEADLEASE:
Date of Headlease: 13 May 1975
Parties: Techno Land Improvements Limited (1) Vistaprint
Limited (2) and Clover Leaf Products Limited (3)
as varied by a Deed of Variation dated 25 January
1990 made between Life Association of Scotland
Limited (1) and TH Stalfors Data Products Limited
(2)
<PAGE>
SCHEDULE 4
Sub-clause 8.1: The Warranties
1. PRELIMINARY
1.1 Definitions
In this Schedule:
"the Agreement" means the Agreement to which this is scheduled
(including the other Schedules and Annexes thereto);
"CAA" means the Capital Allowances Act 1990;
"FA" means the Finance Act (or No. 2 Act, as appropriate)
for the year indicated;
"ICTA" means the Income and Corporation Taxes Act 1988;
"TCGA" means the Taxation of Chargeable Gains Taxes Act 1992;
"VATA" means the Value Added Tax Act 1983
References to any Schedule (other than statutory references) are references
to a Schedule to the Agreement
Save for the foregoing the definitions applicable to the Agreement apply to
this Schedule
1.2 Disclosures
The Warranties are given subject to matters fairly disclosed in the
Disclosure Letter (and, without restricting the extent of the requirement
for fair disclosure, a matter shall in any event not be fairly disclosed
unless it is clearly stated in the text of the Disclosure Letter in such
manner as to render the exception to the Warranties intended to be thereby
disclosed readily apparent to the reader and inform him of, and enable him
to make an informed assessment of the extent and implications of, that
exception)
1.3 Other Knowledge
The Vendors and the Warrantors acknowledge and agree that the amount of the
Consideration has been quantified and that the Purchasers enter into this
Agreement upon the basis that the Warranties are qualified only by matters
fairly disclosed in the Disclosure Letter as aforesaid and subject to those
disclosures are and will at Completion be otherwise true and not
misleading. Each of the Vendors and the Warrantors acknowledges the
fairness of this provision and that the allocation of risk between them and
the Purchaser requires any exceptions to the Warranties to be
<PAGE>
fairly disclosed in the Disclosure Letter and accordingly that no
information other than that fairly disclosed in the Disclosure Letter as
aforesaid or information of which the Purchaser has knowledge shall prevent
or inhibit any claim by the Purchaser or operate to reduce any amount
recoverable. It is therefore agreed in particular (but without limiting the
foregoing) that:
1.3.1 the Purchaser shall be entitled to make a claim or exercise any
right of action after Completion in respect of any breach of the
Warranties or otherwise under the Agreement or under the
Indemnities, whether or not the matter giving rise to the claim
or right was known to or discoverable by the Purchaser before
Completion;
1.3.2 the Purchaser's right or ability to claim damages, compensation
or other relief in respect of any such breach or otherwise under
the Agreement or the Indemnities shall not be affected or
limited, and the amount recoverable shall not be reduced, on the
grounds that the Purchaser may before Completion have had actual,
constructive or implied knowledge of the matter giving rise to
the claim; and
1.3.3 without prejudice to the preceding paragraphs, the rights and
remedies of the Purchaser provided by law or otherwise in this
Agreement shall not be affected or limited in any way by any
investigation made by or on behalf of the Purchaser into the
affairs of the Company or any report which has been prepared at
the instance of or made available to the Purchaser
1.4 Warrantors' claims against the Company
The Warrantors:
1.4.1 agree and acknowledge that no information given by or on behalf
of the Company, or any officer or employee of the Company, to
them or to persons acting on their behalf or to the Purchaser or
persons acting on behalf of the Purchaser in relation to any
provision (including this Schedule) of the Agreement or in
connection with the Disclosure Letter or otherwise in respect of
the Agreement was or is in any way warranted or represented to be
correct or complete;
1.4.2 release and waive all claims and rights whatsoever against the
Company, its officers and employees which they might have in
respect of any such information;
<PAGE>
1.4.3 agree and acknowledge that any such right or claim or fact of the
provision of any such information by the Company its officers or
employees, shall not be nor be raised as a defence to any claim by
the Purchaser under this Agreement
1.5 Independence of Warranties
The Warranties set out in each sub-paragraph hereunder shall be entirely
separate and independent from each other and save as expressly provided
shall not be in any way construed or limited by reference to any other sub
paragraph or anything in the Agreement
1.6 Warranties
The Warrantors represent and warrant to and with the Purchaser that each of
the statements contained in the remaining paragraphs and sub-paragraphs of
this Schedule is now and at Completion will be as if given as at the date
of Completion true and not misleading
2. COMPANY INFORMATION
2.1 Incorporation, Constitution and Statutory Matters
2.1.1 Incorporation: The Company has been duly incorporated in, and is
validly existing under, the laws of England and Wales and has all
requisite corporate power and authority to own, lease and operate
its assets and to carry on its business
2.1.2 Memorandum and Articles of Association: The copy of the Memorandum
and Articles of Association or equivalent constitutional documents
of the Company enclosed with the Disclosure Letter is a true and
complete copy (and incorporates or contains a copy of every such
resolution or agreement as is referred to in section 380 Companies
Act 1985) and the Company has complied with the same in all material
respects
2.1.3 Resolutions: The Company has not passed any resolution except
resolutions relating to business at annual general meetings which
was not special business and resolutions copies of which have been
filed at the Companies Registry or appear in the minute book of the
Company
2.1.4 Filing Obligations: The Company has complied with the provisions of
the Companies Acts in every material respect and without limitation
all
<PAGE>
returns particulars resolutions and other documents required under
any legislation to be filed or to be delivered on behalf of the
Company with or to Companies House or to any other authority
whatsoever have been properly made up and so filed or delivered
within the period prescribed
2.1.5 Group Membership: The Company has not and never has had any
subsidiary and does not hold or own any interest in any shares in
the capital of any other company and the Company has never been the
subsidiary of any other company
2.1.6 Second Schedule Information: The information contained in Schedule 2
is complete and accurate in all material respects
2.1.7 Shareholders Agreement: There is no agreement between or amongst all
or any of the shareholders of the Company relating in any way to all
or any of the Shares or to any shares in any of the Subsidiaries or
constituting any rights or obligations in respect of the same or
relating to any assets of the Company or to which the Company is
party
2.2 Share Capital and Shares
2.2.1 Issues of Capital: Since the Last Accounting Date no share or loan
capital has been created, constituted or issued by the Company or
agreed to be created constituted or issued
2.2.2 Entitlement to Issue of Securities: No person has the right (whether
now or later and whether absolutely or contingently) to call for the
issue of any share or loan capital of the Company and there is no
outstanding resolution of the Company for capitalisation of any sum
as shares, debentures or other securities nor has the Company agreed
to pass such a resolution
2.2.3 Share Redemptions: The Company has not at any time purchased, repaid
or redeemed or agreed to purchase, repay or redeem any shares issued
by it or otherwise reduced or agreed to reduce its issued share
capital
2.2.4 Payment of Dividends: All dividends declared or otherwise determined
upon in respect of the Shares have been paid
2.2.5 Financial Assistance: The Company has not given any financial
assistance in connection with the purchase of any shares in its
capital or in the capital of any company which was its holding
company at the relevant time
<PAGE>
2.2.6 Statutory Registers: The register of members and all other corporate
records required by law to be maintained by the Company are and will
at Completion be in all respects correct and complete and there has
been no notice of any proceedings to rectify any such register or
record and there are no circumstances which might lead to any
application for rectification of the same
3. ACCOUNTS AND RECORDS
3.1 Contents of Accounts
The Accounts (copies of which have been supplied to the Purchaser):
3.1.1 give a true and fair view of the Company in all material respects as
at the respective dates thereof ;
3.1.2 comply with the requirements of all relevant statutes in all
material respects;
3.1.3 have been prepared in accordance with Statements of Standard
Accounting Practice (or where there are none then in accordance with
generally accepted accounting principles and standards in the United
Kingdom) and on a basis consistent with preceding accounting
periods;
3.1.4 are not affected by any unusual or non-recurring items;
3.1.5 properly reflect the financial position of the Company in all
material respects as at their date and show a true and fair view of
the profit (loss) for the period ended on that date and of the
assets and liabilities as at that date;
3.1.6 fully disclose all the assets and liabilities (whether present,
future, ascertained, contingent or otherwise and whether or not
quantified or disputed) of the Company as at their date and make
adequate provision and/or reserve for all such liabilities;
3.1.7 fully disclose all financial commitments and capital expenditure in
existence as at their date
3.2 Stock Valuations
The method of valuing stock-in-trade and work-in-progress for the Accounts
was in all respects consistent with that adopted in the corresponding
accounts for the preceding financial period which method is in accordance
with generally accepted accounting principles and has been accepted by the
Inland Revenue for tax purposes
<PAGE>
3.3 Stock Provisions
Adequate provision was made in the Accounts in respect of dead, slow
moving, obsolete, redundant or excessive stock-in-trade and/or work-in-
progress and the value attributed to the remaining stock-in-trade and/or
work-in-progress did not exceed the lower of direct cost or net realisable
value at the date of the Accounts
3.4 Debts
3.4.1 no part of the amounts included in the Accounts or in the Management
Accounts or in the accounting records of the Company as owing from
debtors has been released on terms that any debtor has paid or shall
pay less than the book value of his debt or has been written off or
has proved to any extent irrecoverable or is now regarded as bad or
doubtful or irrecoverable in whole or in part or is the subject of
any agreement for payment over a period exceeding sixty days;
3.4.2 the book debts owing to the Company as at the Last Accounting Date
have since been paid in full;
3.4.3 the book debts now owing to the Company will realise their full face
value and be paid to the Company in full in the ordinary course of
business within ninety days from their due date for payment and are
not subject to any counterclaim or set off;
3.4.4 none of the book debts owing or which may become owing to the
Company have been assigned or made the subject of any factoring or
similar agreement or arrangement
3.5 Depreciation
All rates of depreciation adopted by the Company for the purposes of its
accounts have been consistent over the last three accounting years and in
the case of fixed assets are sufficient to write down their value to nil by
the end of their useful working lives
3.6 Company Records:
3.6.1 All proper and necessary books of account, ledgers, minute books,
registers and corporate, financial and other records of every kind;
(a) have in all material respects been properly maintained by the
Company itself;
(b) have not been maintained by any third party;
(c) are in its possession in good order and are accurate and up to
date
<PAGE>
3.6.2 The Company does not have any of its records, systems, controls,
data or information recorded, stored, maintained, operated or
otherwise wholly or partly dependent upon or held by any means
(including any electronic, mechanical or photographic process
whether computerised or not) which, including the means of access to
and from the same, are not under the exclusive ownership and direct
control of the Company
3.7 Management Accounts
The Management Accounts (which it is acknowledged have not been the
subject of an audit report):
3.7.1 have been prepared by competent accountancy personnel with due care
and attention;
3.7.2 have been prepared applying the same accounting principles as those
applied in the Accounts, applied consistently with their application
in the Accounts;
3.7.3 have been prepared in accordance with generally accepted accounting
principles for management accounts and good commercial practice;
3.7.4 are not affected by any unusual or non-recurring items;
3.7.5 give a true and fair view of the Company in all material respects as
at their stated date;
3.7.6 fully disclose all the assets and liabilities (whether present,
future, ascertained, contingent or otherwise and whether or not
quantified or disputed) of the Company as at their date and make
adequate provision and/or reserve for all such liabilities
3.7.7 fully disclose all financial commitments and capital expenditure in
existence at their date
3.8 Accountants Report
All material statements of fact contained in the report upon the Company by
Messrs PriceWaterhouseCoopers dated 21 September 1999 addressed to Impac
Europe Limited as amended in manuscript on the copy pages enclosed with the
Disclosure Letter are true and accurate in all material respects; the
report is not misleading in any material respect and the Warrantors having
given the report careful consideration are not aware of any material facts
or circumstances which are inconsistent with any of the opinions stated
therein
<PAGE>
4. FINANCIAL MATTERS
4.1 Bank Accounts
Full details of all bank accounts of the Company (including, in each case,
the name and address of the bank with whom the account is kept and the
number and nature of the account) and a statement of the credit or debit
balances thereon as at the close of business on the Working Day last
preceding the date of the Agreement are set out in the Disclosure Letter
and since the date of the statement no payment out of any of the accounts
has been made other than routine payments in the ordinary course of trading
and the present balances are not substantially different from those shown
in the statement
4.2 Financial Facilities
All material details of all overdraft, loan, banking and other financial
facilities of any kind available to the Company are set out in the
Disclosure Letter
4.3 Encumbrances
No Encumbrance (other than a lien arising by operation of law in the
ordinary course of trading which is not being or about to be exercised)
licence, right to use or other adverse interest whatsoever on, over or
affecting the whole or any part of the undertaking or assets of the Company
is outstanding and there is no agreement or commitment to give or create
any of the foregoing and no claim has been made by any person to be
entitled to any of the foregoing
4.4 Loss of Benefits
The Company is not now or contingently liable to repay or forfeit in whole
or in part any grant, payment, subsidy, allowance or benefit of any kind
whatsoever (whether under legislation relating to Taxation or under any
other legislation whatsoever) ("any Benefit") made to it by or to which it
would otherwise be entitled from any government department, governmental
body or other public body or authority or any charity institution or other
body or suffer any deduction from or allowance against any Benefit to which
it may become entitled under present legislation and no circumstances have
arisen which might give rise to any such liability and the Company has not
done or omitted anything the result of which could be the refusal,
forfeiture, loss or requirement to repay any Benefit in whole or in part
<PAGE>
4.5 Details of Benefits
Full details of any Benefits made to the Company within the past six years
are stated in the Disclosure Letter
4.6 Guarantees for the Company
No person has given any Guarantee or other security whatsoever for or in
respect of any loan, overdraft, financial facility, lease, performance
bond, contract or other commitment or obligation of the Company of any kind
whatsoever
4.7 Foreign Exchange Commitments
The Company has no outstanding position or commitment for or in relation to
the sale or purchase of any currency, stock or commodity and has no
outstanding purchasing commitment payable in any foreign currency
4.8 Creditors
The Disclosure Letter contains a list of creditors of the Company (from
whom invoices have actually been received by the Company) correct and up to
date as at a date no earlier than five Working Days prior to the date of
the Agreement and such list correctly shows the name of the creditor,
amounts owing to the creditor, and the due date for payment of each such
amount, together in the case of invoices which are overdue for payment a
brief note as to the reason for delay in payment and any justification for
such delay
5. REAL PROPERTY
5.1 Identity and Information
The Property comprises all the land of any tenure owned, occupied or used
by the Company
5.2 Title
The Company has a legally marketable title to the Property and the
Warrantors confirm that replies to the Purchasers' Solicitors' enquiries
have been given after due and careful enquiry and are true and accurate so
far as the Warrantors are aware
5.3 Possession
The Company has exclusive possession and is in actual occupation of the
Property and the Property is not subject to any lease, tenancy, licence to
occupy or agreement to grant any of the same
<PAGE>
5.4 Adverse Interests
Save as disclosed by the Vendors replies to the Purchasers Solicitors
enquiries the Property is not subject to any other agreements, covenants,
restrictions or conditions save as contained in the Lease or Headlease as
referred to in Schedule 3 and the terms of such agreements covenants
restrictions and conditions have been observed and performed in all
material respects
5.5 Outgoings
There are no outgoings affecting the Property that are of an unusual or
onerous nature and there is no rent review in the course of being
determined
5.6 Disputes
Save as disclosed by the Vendors replies to the Purchasers Solicitors
enquiries there are no disputes concerning boundaries, easements, covenants
or other matters relating to the Property
5.7 Use
The present use of the Property is that stated in Schedule 3
5.8 Notices and Proposals
Save as disclosed by the Vendors replies to the Purchasers Solicitors
enquiries and so far as the Warrantors are aware the Property is not
affected by any outstanding notices, orders or publicly advertised
proposals given or issued by or to any local or other authority
5.9 Compensation
No compensation has been received by the Company consequent upon the
refusal of any planning consent or the imposition of any restrictions in
any planning consent relating to the Property and no planning consents
relating to the Property are suspended and there is no monetary claim or
liability (contingent or otherwise) under the Planning Acts or otherwise
relating to the Property
5.10 Public Authority Obligations
Save as disclosed in the Vendors replies to the Purchasers Solicitors
enquiries and so far as the Warrantors are aware the Property complies with
the requirements of all competent authorities and of all statutes and bye-
laws affecting the Property or its use
5.11 Leasehold Obligations
The Company is not under any liability (actual or contingent) in respect
of any obligations which it may have undertaken as tenant, licensee,
assignee or surety of
<PAGE>
any lease or tenancy agreement relating to any land or premises other than
the Property
5.12 Adjacent Land
None of the Warrantors has any interest in, over or relating to the
Property or any adjacent adjoining or neighbouring lands
6. INTELLECTUAL PROPERTY
6.1 Ownership
The Company is the sole beneficial owner, free of licence royalty
restriction or other adverse interest, of all Intellectual Property used
in its business in the ordinary course and as now carried on (including
any planned improvements, extensions or new projects) or otherwise
relating to its business
6.2 Registered Intellectual Property
The Company does not own or have any interest in any registered
Intellectual Property
6.3 Adverse Claims
None of the Intellectual Property is liable to cease to be available for
use by the Company or has been the subject of a valid claim that it is not
the sole beneficial property of the Company and no person has claimed that
the Company infringes their rights in any way or that the Company's rights
in any Intellectual Property are not enforceable
6.4 Infringement of Third Party Rights
So far as the Warrantors are aware the Company does not infringe and has
not at any time infringed any Intellectual Property rights owned or
enjoyed by any other person
6.5 Third Party Rights
No licence, permitted user or other right has been granted or agreed to be
granted to any other person in respect of any of that Intellectual
Property owned by the Company and none of the Intellectual Property is
being or has been used by any person other than the Company and no person
is entitled to receive compensation or to call for the grant of a licence
or other right in respect of any of the same or claims to be so entitled
<PAGE>
6.6 Licences from Third Parties
No part of the Company's business is or has been carried on under
agreement with or with the consent of or under an obligation to pay any
royalty to any third party or by licence nor is any such agreement or
consent or licence or payment of royalty required for the commercial
exploitation of any Intellectual Property owned by the Company
6.7 Disclosures
Neither the Company nor its officers nor the Warrantors nor any employees
of the Company have disclosed or revealed or permitted to be disclosed or
revealed to any third party any Confidential Information (except to the
Company's lawyers, accountants and other professional advisers and except
as required for the ordinary course of trading of the Company and upon the
confidentiality of the same being appropriately secured) and adequate
procedures are employed by the Company to secure the confidentiality of
Confidential Information, Intellectual Property and other proprietary
information
6.8 Trade Names
So far as the Warrantors are aware with regard to any trade names or
trademarks used by the Company generally or in relation to any products or
services:
6.8.1 no third party is entitled or has been permitted to or does use a
mark (with or without any associated design or device) which
includes any trade mark, trade name or product name or word or
device similar to them on or in connection with goods or services
similar in kind to those of any items or services sold by the
Company;
6.8.2 no trading name used by the Company is the same as or substantially
similar to the name under which any competing product or service of
a third party is sold;
6.8.3 the use of any trade or product or service name by the Company does
not infringe the rights of any third party;
6.8.4 no third party has claimed that any trade or product or service
name used by the Company infringes their rights or that the Company
is passing off any product or service as that of the third party
6.9 Business Name
The Company does not use for any purpose nor carry on business under any
name other than its full corporate name, "Thamesdown Hartley" and "Hartley
Print"
<PAGE>
6.10 Software
In respect of computer software and firmware used, formerly used or
expected in future to be used by the Company:
6.10.1 save for software used under the licences disclosed in the
Disclosure Letter, the Company is the sole beneficial owner of all
copyright and other rights in the same and has taken all due steps
to safeguard its copyright therein;
6.10.2 all software written for the Company has been written by its
employees and not by consultants or other persons engaged under
contracts for services;
6.10.3 the Disclosure Letter contains a complete and correct list of all
licences held by the Company for the use of software and:
(a) a correct, complete and up to date copy of each such licence
is attached to the Disclosure Letter;
(b) each such licence is valid and subsisting and there is no
reason to suppose that it is about to terminate;
(c) the Company is not in breach of any of the terms of any such
licence;
(d) each such licence is for the site at which the relevant
software is used and authorises all users and computers who or
which use the same in the course of the Company's business
6.10.4 except to the extent prohibited by the licences referred to in the
preceding clause 6.11.3, the Company has the right to make any
adaptation, modification or improvement to software used by it
without the consent of any third party
6.10.5 none has been written specifically by or for the Company and all
comprises standard software packages generally available which have
not been modified by or for the Company
6.11 Software Support
The Company has in force software support contracts for all items of
software licensed to it from any third party and appropriate arrangements
in respect of all items of software owned by it
<PAGE>
6.12 Failures
During the two years preceding the date of this Agreement the Company has
not suffered any material failure or breakdown of any software or computer
system and the Company has adequate systems including back up copies to
ensure that if there is any failure or breakdown in any software or system
the Company would be able to recover its system within a reasonable period
6.13 Millennium Compliance
6.13.1 So far as the Warrantors are aware the performance and
functionality of every computer system and/or related hardware,
software or communication facilities or other automated processes
owned by the Company or used in its business is not and will not
be affected by any date before, during or after the year 2000 and
will continue to function correctly regardless of any date or
date-related input or other matter and without limiting the
foregoing each of the same:
(a) will accept all correctly entered date inputs, provide
correct date outputs and correctly perform calculations on
dates or portions of dates and otherwise accurately and
without interruption handle date information and information
which is in any way affected by or contains dates, before,
during and after 1 January 2000; and
(b) will respond to and process correctly entered year inputs and
store and provide outputs of date information and date-
related matters in a way that resolves the ambiguity as to
century in a disclosed, defined and predetermined manner
6.14 Millennium Compliance Undertakings
The Company has not given to any person any guarantee or assurance that
its equipment is in any respect compliant or that its operational
capability in any respect will not be affected by any non-compliance
relating to matters of the nature referred to in the preceding warranty
7. PHYSICAL ASSETS
7.1 Ownership
Except for assets disposed of by the Company in the ordinary and normal
course of its trading the Company is the absolute owner having actual
possession and control of and has good marketable title, free from any
leasing, hire or hire purchase
<PAGE>
agreement, conditional sale, agreement for payment on deferred terms, bill
of sale or other Encumbrance (or agreement to grant any of the same) to
all assets included in the Accounts or in the Management Accounts and to
all assets which have been acquired by the Company since the Last
Accounting Date or which are used by the Company in the course of its
business or which are in its apparent, reputed or actual possession,
ownership or control (whether or not included in the Accounts as an asset
of the Company)
7.2 Leasing and Hire Purchase
In respect of all chattels which are fixed assets of the Company or used
in its business and are held by the Company under any leasing, hire, hire
purchase, conditional sale or similar agreement or arrangement:
7.2.1 a complete schedule showing true and accurate particulars of all
such agreements and arrangements is attached to the Disclosure
Letter together with complete and correct copies of the same;
7.2.2 all amounts due and payable by the Company under the same have been
paid;
7.2.3 there is no entitlement or circumstance giving rise to an
entitlement of any other party thereto to vary the terms of the
same or to increase any amount payable by the Company under the
same;
7.2.4 the Company is not in material breach of any of the same;
7.2.5 so far as the Warrantors are aware no circumstance has arisen which
would entitle any other party to the same to terminate it or
otherwise terminate the Company's right to use any such chattel and
this Agreement will not entitle any third party to exercise such
right or constitute a breach of any of the same
7.3 Asset Register
There is attached to the Disclosure Letter a complete and accurate copy
register or schedule of fixed assets owned or used by the Company
7.4 Condition
So far as the Warrantors are aware the furniture, fixtures, fittings,
plant and machinery, tooling, equipment, vehicles and computer hardware
used in connection with the business or in the possession of the Company
have been maintained and repaired and are sound, safe and usable in the
ordinary course of business and all of the same complies with applicable
safety regulations and without limiting this
<PAGE>
warranty all equipment purchased, taken on finance contract or otherwise
acquired or taken into use by the Company during the two years preceding
the date of this Agreement has functioned properly (save for minor
failures which have been remedied) and in accordance with the relevant
contract specification and the Company has not made and is not aware of
any circumstance which would entitle it to make any material claim against
the supplier of the same that it is any respect defective
7.5 Computers
So far as the Warrantors are aware all computer equipment used by the
Company has since its installation functioned properly and the programming
therefor has proved appropriate to the needs of the Company and has not
suffered any material failure, breakdown or bug and adequate steps have
been taken to ensure the security of any confidential matter thereon
8. CONDUCT OF BUSINESS
8.1 Business Since Last Accounting Date
Since the Last Accounting Date:
8.1.1 Conduct of Business: The Company has carried on its business in the
ordinary, proper and usual course, duly performing its obligations
as they fell due and without entering into any transaction,
assuming any liability or making any payment not provided for in
the Accounts or the Management Accounts which is not in its
ordinary and normal course of trading and without any interruption
or alteration in the nature, scope or manner of its business and so
as to maintain the same as a going concern to best advantage
8.1.2 Financial Position: There has been no material adverse change in
the financial position or the prospects of the Company, and in
particular:
(a) there has been no reduction in value of the net assets of the
Company nor (otherwise than by the application of the
Company's normal depreciation policies) in the value of any of
the assets of the Company as shown in the Accounts;
(b) neither the trading nor profitability of the Company shows any
material deterioration or downturn by comparison with the year
<PAGE>
ended on the Last Accounting Date, whether as regards
turnover, state of order book, expenses, profit margins or
otherwise;
(c) the Company has no liabilities (whether present, future,
ascertained, contingent or otherwise and whether or not
quantified or disputed) save those shown in the Accounts or
being ordinary trading obligations incurred in the normal
course of business since the Last Accounting Date
8.1.3 Distributions: No dividend, bonus or distribution of capital or
income has been declared, made or paid in respect of any share
capital of the Company
8.1.4 Loan Repayments: No loan or loan capital of the Company has been
repaid or become due or liable to be repaid or declared to be due
(whether with or without notice or lapse of time) in whole or in
part (save for fluctuations in overdrawn current accounts with
clearing bankers)
8.1.5 Advance Corporation Tax: No circumstances have arisen giving rise
to a liability for payment of any advance corporation tax on any
deemed distribution or otherwise by the Company
8.1.6 Remuneration: The Company has not made (or agreed to make) any
change in the basis or amount of the emoluments or benefits for any
of its directors or employees
8.1.7 Cash: The Company has not disbursed any cash except in the ordinary
course of its business and all amounts received by the Company have
been deposited with the Company's bankers and appear in the
appropriate books of account
8.1.8 Indebtedness: The Company has not borrowed (except for borrowing
from its bankers on overdraft within agreed limits under facilities
disclosed in the Disclosure Letter and in the ordinary course of
the Company's business) any money which it has not repaid, nor has
it lent any money which has not been repaid to it, nor has it
acquired the benefit of any debt (present or future) save for debts
in respect of the sale of trading stock in the normal course of
trading
8.1.9 Capital Transactions: The Company has not entered into any capital
transaction as vendor, purchaser, lessor or lessee or otherwise
undertaken any commitment on its capital account in an individual
sum exceeding
<PAGE>
(Pounds)20,000 or in an aggregate sum over the period for all such
commitments exceeding (Pounds)100,000
8.1.10 New Operations: The Company has not acquired or established (or
agreed to acquire or establish) any new business, branch or
subsidiary
8.1.11 Detrimental Matters: Nothing has been done or knowingly omitted in
relation to the business and affairs of the Company and which is
outside the ordinary course of business of the Company and would
detrimentally affect the interests of the holder of the issued
share capital of the Company
8.1.12 Benefits to Vendors: Save for regular salary payable to them as
employees at the respective rates stated in the Disclosure Letter,
the Company has not paid any monies, transferred any asset or
afforded any benefit to or for the benefit of or afforded any other
benefit to or for the Vendors or any Associate of the Vendors and
the Company has not been party to any transaction falling within
Section 320 Companies Act 1985
8.2 October Trading
Before provision for the employee bonuses referred to in clause 9.2 of the
Agreement totalling (inclusive of national insurance contributions)
(Pounds)200,000 and the payment of a dividend of (Pounds)25,000 on 21
October 1999 and a dividend of (Pounds)12,250 on 29 October 1999:
8.2.1 in October 1999 the Company made a net profit after all charges but
before taxation;
8.2.2 since 30 September 1999 there has been no diminution in the net
assets of the Company
8.3 Authorisations and Approvals
8.3.1 General: So far as the Warrantors are aware the Company holds all
necessary licences, agreements, consents, permits, approvals and
authorities (whether public or private) to enable it to carry on its
business effectively and without hindrance in the places and in the
manner in which such business is now carried on; all the same are
valid and subsisting and none of the Warrantors are aware of any
reason why any of them should be suspended, altered, cancelled or
revoked
8.3.2 Accreditations: The Disclosure Letter contains a complete and
correct list of all accreditations, qualifications to do business,
approved tender or
<PAGE>
purchase panel list accreditations, authorised supplier status and
similar matters applicable to the Company
8.4 Data Protection Act
The Company is duly registered under the Data Protection Act 1998 as a data
user and particulars of the registration are set out in the Disclosure
Letter; the Company has complied with the requirements of the said Act and
in particular with the Data Protection Principles and no individual has
claimed or will have any right to claim compensation from the Company under
the provisions of that Act
8.5 Absence of Legal Proceedings
Neither the Company nor any person on its behalf or so far as the
Warrantors are aware for whose acts or defaults it is or may be vicariously
liable is involved in any litigation or arbitration proceedings or
proceedings or hearings (whether civil or criminal) before any court,
commission, tribunal, board, investigation, government body or other person
other than litigation arising in the ordinary course of the Company's
trading which in each case is solely for the recovery of debts less than
(Pounds)2000; no such litigation, proceedings or hearings are pending or
threatened by or against the Company and there are no facts or matters
which might or could give rise to any such
8.6 Public Obligations
The Company is not in and has not committed any breach of or default under
any statute or any regulation having effect under any statute or any court
order, decree or other applicable law of any country nor has the Company
any dispute with any public authority of any country regarding any of its
affairs and no officer of the Company has committed any breach of the
Companies Acts in relation to the Company
8.7 Invalid and Disputed Contracts
In respect of agreements and other transactions to which the Company is a
party:
8.7.1 none is invalid, illegal, unenforceable, void or voidable in whole
or in part;
8.7.2 there are no grounds for rescission or repudiation of the same or
for any claim in respect of the same or of any matters relating to
or connected with the same or with any negotiations leading thereto;
8.7.3 neither the Company nor the Vendors has received any claim or notice
or intimation of intention to claim in respect of the same or of any
such
<PAGE>
matters or to terminate, repudiate, rescind or disclaim any such
agreement or transaction;
8.7.4 neither the Company nor any other contracting party is in breach or
default or considered by the Company to be in breach or default of
any of the same nor does any circumstance exist which with the
passing of time or the giving of notice would place the Company or
any other contracting party in breach or default;
8.7.5 there is no subsisting contractual dispute involving the Company
8.8 Negligent Services
The Company has not rendered any services in a manner that was negligent
or in breach of its obligations
8.9 Product and Service Complaints
With regard to any complaints made to the Company in respect of goods or
services supplied by it:
8.9.1 there has been no repeated pattern of complaints in respect of any
particular product or service;
8.9.2 the Company maintains an accurate and complete record of all
complaints received by the Company in respect of goods or services
supplied by it and a correct and complete copy of the same is
attached to the Disclosure Letter
8.10 Orders and Judgments
The Company is not subject to any order or judgment of any court, tribunal
or governmental authority or agency and has not been party to any
subsisting undertaking or assurance given to any of the same
8.11 Competition Law
8.11.1 Compliance: The Company is not and has not been party to, engaged in
or bound by any agreement, arrangement, action, practice or course
of conduct which is or was void, illegal, unenforceable, registrable
or notifiable under or which contravenes or contravened the
Restrictive Trade Practices Act 1976, the Competition Act 1980, the
Fair Trading Act 1973, the Competition Act 1998, Article 85 or 86 of
the Treaty of Rome (now Articles 81 and 82 of the Treaty of
Amsterdam) and regulations made thereunder or any other law dealing
with anti-trust or competition or
<PAGE>
similar matters anywhere in the world ("Competition Legislation")
or which constitutes an anti-competitive practice under any of the
same
8.11.2 Filings: The Company has not registered any contract or other
matter with or made any notification, filing, request for guidance
or application for exemption with the Commission of the European
Union or any other authority pursuant to or for the purposes of any
other Competition Legislation
8.11.3 Investigations: The Company has not received any complaint or
threat to complain under or referring to any Competition
Legislation from any person or received any request for
information, investigation or objection
8.11.4 Decisions and Undertakings: The Company is not and never has been
the addressee of or given or been party to any decision, judgment,
direction, undertaking or settlement relating to any Competition
Legislation or to any proceedings in which Competition Legislation
was pleaded or relied upon
8.11.5 Unlawful Practices: The Company is not party to, engaged in or
bound by any agreement, arrangement, action, practice or course of
conduct which is an unfair consumer trade practice within the
meaning of Section 13 Fair Trading Act 1973 or susceptible to or
under reference to the Consumer Protection Advisory Committee or
the subject matter of a report to or an order by the Secretary of
State under the provisions of Part II of that Act or contravenes or
has been entered into in breach of or is prejudiced or invalidated
by any provision of the Consumer Credit Act 1974
8.12 Contractual Characteristics
The Company has not at any time in the last two years been party to and
the Company is not now party to:
8.12.1 Guarantees: any Guarantee given by the Company (save for any
guarantee or warranty in relation to goods implied by law or
contained in its standard terms of business); or
8.12.2 Termination on Change in Company: any agreement, encumbrance, deed
or other instrument, arrangement, authorisation, licence or benefit
liable according to its terms to be terminated or withdrawn by
another party or likely in fact to be so terminated or withdrawn as
a result of any
<PAGE>
change in the control, management or shareholders of the Company or
otherwise as a consequence of the execution or performance of this
Agreement in which the same would constitute a breach or entitle
any other person to take action or receive any benefit;
8.12.3 Joint Ventures: any joint venture, consortium or partnership
arrangement or agreement or participation in any unincorporated
association;
8.12.4 Long-Term: any agreement not capable of termination by the Company
without liability for such termination within six months from the
date of the Agreement;
8.12.5 Unusual: any agreement or obligation whatsoever save those usual
and appropriate in the ordinary and proper course of business of
the Company upon arms length open market terms;
8.12.6 Artificial: any agreement, arrangement, practice or benefit with or
at the instigation of any of the Vendors or of any director,
officer or senior employee of the Company or any Associate of such
person the effect of which has been to artificially increase the
net profit of the Company by affording to it goods or services
below the fair commercial rate or taking from it goods or services
in excess of the fair commercial rate
8.12.7 Connected Persons: any agreement or arrangement with, obligation or
benefit to or loans owing by the Vendors or any director, officer
or senior employee of the Company or any Associate of any such
person or any other agreement or arrangement in which any of the
Vendors or other such person or Associate are directly or
indirectly interested or which has not been entered into or pursued
in the best interests of the Company on arm's length commercial
terms (including without limitation any arrangement or agreement
under which any of the foregoing persons provide any goods or
services to or receive any benefit from any customer or supplier of
or to the Company);
8.12.8 Onerous: any contract, obligation, commitment or liability known or
thought to be onerous, unprofitable or disadvantageous to the
Company or which it cannot readily fulfil, discharge and perform in
accordance with its terms, on time, in the ordinary course of
business and without unusual, excessive or uneconomical expenditure
of time money or effort;
<PAGE>
8.12.9 Loans: any loan (by or to the Company) or agreement for loan or
undertaking (save as disclosed in the Accounts);
8.12.10 Authorisations to Bind the Company: any power of attorney or
other agency or similar authority (express, implied or
ostensible) to any person to enter into any contract or
commitment on the Company's behalf other than to its employees to
enter into routine trading contracts in the normal course of
their duties
8.12.11 Restrictive Covenants: any agreement, covenant, undertaking or
commitment restricting, limiting or excluding its conduct of
business in any field or geographical area
8.12.12 Paper Purchase: Any contract for the purchase of paper other
than:
(a) individual contracts for the purchase of paper each for a
specific printing contract with a customer of the business
or
(b) which required delivery to the Company of the paper
purchased within three months from the date of the contract
and did not allow or require performance after that three
months
8.13 Overseas Undertakings
The Company does not have and never has had any branch, agency, place of
business, representative office or permanent establishment outside the
United Kingdom or any interest in any corporation not solely resident in
the United Kingdom
8.14 Agency Distributorship and Similar Arrangements
The Company is not party to any contract or arrangement of any kind under
which:
8.14.1 it acts as agent, distributor or representative of any other
person or under which it is entitled to receive any commission,
rebate, allowance or benefit in return for recommending,
supplying or otherwise relating to the supply to any person of
any goods or services supplied by any third party; or
8.14.2 the Company has appointed any third party its agent, distributor
or representative or pursuant to which the Company is liable to
pay or allow to any third party any commission, rebate, allowance
or other benefit in return for recommending, supplying or
otherwise in relation to the supply of goods or services by the
Company
<PAGE>
8.15 Material Contracts
There is attached to the Disclosure Letter a true and complete copy of
every material contract under which the Company has any continuing or
future obligation (including any variations of the same). For the purposes
of this warranty a contract is material if:
8.15.1 the total amount payable by or to the Company pursuant to its
terms exceeds (in the case of printing transactions in the
ordinary course of trading) a value of (Pounds)100,000 and (in
any other case) a value of (Pounds)20,000; or
8.15.2 its premature termination would cause material operational
difficulties to the Company; or
8.15.3 it is otherwise of material importance to the Company
8.16 Adverse Matters
In respect of any contract the subject of the preceding warranty:
8.16.1 no complaint has been received with regard to the performance by
the Company thereunder;
8.16.2 no dispute exists in relation to any matter arising under any of
the same;
8.16.3 there is no reason to believe that any of the same may be
terminated prior to their normal expiry in accordance with their
terms
8.17 Insurance:
8.17.1 Validity of Policies: So far as the Warrantors are aware, there
is no fact or matter which could lead to any insurances
maintained by the Company being vitiated or repudiated or any
premiums thereon being increased
8.17.2 Policies: There is attached to the Disclosure Letter a complete
and accurate schedule of all insurances maintained by the Company
which are in force at the date of the Agreement together with a
complete and accurate copy of all such policies
8.17.3 Claims Record: There is attached to the Disclosure Letter a
complete and accurate record of all claims made by the Company
under any policy of insurance at any time
8.17.4 Claims: There is no outstanding claim under any such insurances
nor, so far as the Warrantors are aware, has any event or
occurrence taken place which is or ought to be the subject of any
such insurances
<PAGE>
8.18 Legal Documents
All title deeds, agreements and other documents to which the Company is a
party or under which the Company derives benefit and all other documents
owned by or which ought to be in the possession of the Company are in its
possession and are properly stamped
8.19 Effect of Agreement
The execution, delivery and performance of this Agreement and any of the
Transaction Documents will not result in the breach of any contract to
which the Company is party or by which the Company or its property or
assets may be bound or affected or violate or conflict with any law,
regulation, decree, judgment, award or undertaking affecting the Company or
its assets
8.20 Health & Safety
The Company has:
8.20.1 established procedures under laws and regulations (including
codes of practice) regarding the health and safety of those who
work for or visit the Company or are otherwise affected by it;
8.20.2 not received notice or claim that it has failed to comply with
the requirements of any applicable law, regulation or code of
practice;
8.20.3 carried out all appropriate health and safety studies (true and
complete copies of which are attached to the Disclosure Letter);
8.20.4 not received any communication of any actual or threatened claim,
investigation or proceeding against the Company or its officers
or employees in respect of accidents, injuries, disease or other
harm to the health and safety of employees, contractors or others
under or as a result of any breach of health and safety laws,
regulations or codes of practice
8.21 Improper Practices
The Company has not, nor, so far as the Warrantors are aware, has any
officer, employee, agent or representative of the Company, directly or
indirectly offered, paid, promised to pay or authorised the payment of any
money or other thing of value to any person who is an official, officer,
agent, employee or representative of any government, government authority
or agency, existing or prospective customer, any holder or candidate for
political office or to any other person in the knowledge that any such
payment or provision would be offered, given or promised directly or
indirectly to any such official, officer, agent, employee or representative
<PAGE>
8.22 Outstanding Tenders
There is not now outstanding any tender or offer by the Company which upon
acceptance by a third party would give rise to any contract or commitment
upon the Company, which (if now in existence) would constitute a breach of
any other statement in this Schedule
8.23 Acquisitions and Disposals
The Company has never acquired or disposed of any shares in the capital of
any other company nor acquired the whole or any substantial part of any
undertaking and in the case of any such transactions which are disclosed in
the Disclosure Letter:
8.23.1 no claim has been made by or against the Company under any
contract relating to any such transaction or otherwise relating
to it
8.23.2 the Vendors are not aware of any circumstance which is likely to
give rise to any such claim or which would give rise to any such
claim but for any limitations on liability of the Vendors
contained in any such contract
9. EMPLOYMENT MATTERS
9.1 Employment Particulars
The particulars shown in the Schedule of Officers and Employees annexed to
the Disclosure Letter are true and complete in all respects and in
particular correctly show in respect of each employee of the Company the
following information:
9.1.1 name;
9.1.2 age;
9.1.3 job description;
9.1.4 all remuneration of any kind payable or which may become payable
on any basis (whether salary, commission, bonus, incentive or
otherwise) and other benefits provided or which the Company is
legally or morally bound to pay or provide (now or at or from
some future date);
9.1.5 date of commencement of employment or of any previous employment
with which such employment is continuous;
9.1.6 notice period required to be given by the Company and by the
employee respectively for termination of the employment;
9.1.7 whether or not a member of a trade union;
9.1.8 date of last increase in salary;
<PAGE>
9.1.9 contractual and actual place of employment
9.2 Termination of Employment
In relation to any employee or officer or former employee or former officer
of the Company:
9.2.1 the Company has not in any manner terminated the office or
employment of any individual within the two years preceding this
Agreement;
9.2.2 the Company has not given notice of any actual or intended
redundancies to the Secretary of State or other authority in any
jurisdiction nor started consultations with any trade union in
respect of any redundancies within the twelve months preceding
the date of this Agreement;
9.2.3 no employee or officer of the Company is under notice of
termination of his engagement or has given or indicated that he
is about to give such notice and the Warrantors are not aware of
any circumstances or reason why any officer or employee of the
Company should give such notice or seek to leave the Company or
is about to do so (save pursuant to the provisions of this
Agreement)
9.3 Disputes with Employees
None of the employees or officers of the Company is in dispute with the
Company regarding his terms of employment or has requested any improvement
therein (whether increase in pay or otherwise) or has commenced or
threatened any industrial action of any kind or has indicated that he will
do so or will terminate his engagement in any circumstances which will
arise upon Completion nor are any of the Warrantors aware that any of such
matters are likely to occur
9.4 Compensation Obligations
The Company is under no actual or contingent present or future liability to
pay any compensation, damages, award, redundancy payment or other monies
(whether statutory, contractual or at common law) to any present or former
officer or employee of the Company for any reason
9.5 Employee Claims
No present or former officer or employee of the Company has made or
threatened to make against the Company any claim of any kind, whether for
or based upon an allegation of breach of contract, unfair dismissal,
stress, injury or disease, actions of another officer or employee,
harassment, discrimination, breach of statutory duty or failure to perform
any other obligation in law of an employer nor so far as the
<PAGE>
Warrantors are aware does any circumstance exist which may give rise to any
such claim
9.6 Incentive Arrangements
There is attached to the Disclosure Letter a true and complete copy of the
rules and all other material information relating to any profit sharing,
bonus, share option or other incentive scheme, arrangement or practice of
any kind (whether or not legally binding) and including the bonus
arrangements referred to in clause 9.2 of this Agreement ("Incentive
Arrangement") for any officer, employee or consultant of or to the Company
or for any group of such persons (whether or not together with other
persons); save for the Incentive Arrangements so disclosed the Company is
not party to any Incentive Arrangements and without limiting this
statement:
9.6.1 no options or other rights have been granted over or in respect
of any shares in the capital of the Company as part of any
incentive arrangement
9.6.2 the Company has not established and there does not exist in
relation to the Company any employee benefit trust
9.7 Long-Term Contracts
There is not outstanding any contract of service between the Company and
any of its officers or employees which is not terminable without
compensation (save statutory compensation) on three months' notice or less
nor any consultancy agreement to which the Company is a party
9.8 Trade Unions
The Company does not recognise any trade union and is not party to any
trade union agreement, house agreement or collective bargaining agreement
or other agreement or arrangement (whether formal or informal legally
binding or otherwise) relating in any way to employees or their terms or
conditions of employment or employment matters;
9.9 Industrial Action
The Company is not involved in any industrial or trade dispute or dispute
or negotiation with any trade union or organisation or body of employees
9.10 Employment Records
The employment records of the Company are in all material respects complete
and accurate
<PAGE>
9.11 Contracts of Employment
All notices appropriate under the Employment Rights Act 1996 have been
duly issued to all employees of the Company
9.12 Credit Cards
There are no credit cards in issue for the account of the Company or any
other person and available for use by any officer or employee of the
Company by reason of such office or employment
9.13 Obligations to Employees
The Company has complied with all material obligations that it owes to or
in respect of its employees, whether individual or collective
9.14 TUPE
During the two years preceding the date of this Agreement the Company has
not entered into any contract or arrangement or otherwise conducted itself
such that individuals employed or previously employed by any other person
will become employed by the Company by reason of the operation of the
Transfer of Undertakings (Protection of Employment) Regulations 1981
9.15 Hartley Print Limited
The Company has not made any change to any terms and conditions of any
individuals employed by Hartley Print Limited who are now employees of the
Company
9.16 Maximum Working Hours
The Company is in possession of written agreements signed by each of its
employees for the valid exclusion of the maximum weekly working time of 48
hours pursuant to regulation 5 of The Working Time Regulations 1998 and is
not in receipt of any notice for the termination of any such written
agreement
10. PENSIONS
10.1 Benefit Obligations
Save in relation to any scheme disclosed in the Disclosure Letter ("the
Disclosed Scheme") the Company is not under any commitment (whether
legally binding or established by custom) to make payment of any pension,
allowance, lump sums or other like benefit on or following the death,
retirement or disability of any existing or former employee or director of
the Company or for the benefit of any dependants
<PAGE>
of such persons nor is it party to any pension, life assurance
or retirement benefit scheme agreement or arrangement of any kind
10.2 Disclosed Scheme
In relation to the Disclosed Scheme:
10.2.1 Variation of Benefits: No power to increase or vary the benefits
to members under the Disclosed Scheme has been exercised or
promised to any potential beneficiary
10.2.2 Membership: The names of the persons who are the current members
of the Disclosed Scheme have been fully disclosed and no
discretion to admit any further or other members has been
exercised nor have the criteria for eligibility to membership
been altered or varied in any way and full details of the
provisions relating to eligibility for membership have been
disclosed;
10.2.3 Death and Disability: All benefits payable under the Disclosed
Scheme in respect of the death or disability of any member during
service are fully insured under policies effected with an
insurance company of good repute and standing and each member of
the Disclosed Scheme is fully covered by such insurances at
normal premium rates on normal terms for persons in good health;
10.2.4 Unpaid Contributions and Benefits: There are not at the date
hereof any payments to members of or contributions to the
Disclosed Scheme which have fallen or are accrued due and payable
and are unpaid for any reason whatsoever;
10.2.5 Company Obligations: Save for its obligations to pay
contributions in respect of the current and future months on the
basis and in the amounts stated in the Disclosure Letter the
Company has no actual or contingent obligation whatsoever to any
person or authority in respect of the Disclosed Scheme
10.3 Statutory Status
In relation to each Disclosed Scheme which is a retirement benefits scheme
within the meaning of Section 611(1), ICTA:
10.3.1
10.3.2 Approval: The Disclosed Scheme is approved as an exempt
--------
approved scheme by the Commissioners of Inland Revenue for the
purposes of
<PAGE>
Chapter I of Part XIV ICTA and nothing has been done or omitted
to be done which will or may result in the Disclosed Scheme
ceasing to be an exempt approved scheme;
10.3.3 Contracting Out: There is in force a contracting out certificate
---------------
in relation to the Company and nothing has been done or omitted
to be done which will or may result in any contracting out
certificate being cancelled surrendered or raised;
10.3.4 Administration: The Disclosed Scheme has been administered in
--------------
accordance with the requirements of sections 69-82 of the Pension
Schemes Act 1993 and the contracting-out requirements of Part III
of the Pension Schemes Act 1993 and subject thereto in accordance
with the trust powers and provisions of the Disclosed Scheme and
save as disclosed in the Disclosure Letter the Disclosed Scheme
complies with and has at all times materially complied with the
provisions of the Pensions Act 1995 and all other relevant
legislation and with the requirements of the Pension Schemes
Office and the Contributions Agency;
10.3.5 Compliance: The Disclosed Scheme has at all times complied with
----------
the requirements of Article 119 of the Treaty of Rome and Section
62 of the Pensions Act 1995;
10.3.6 Documentation: Full copies of all relevant deeds, rules and other
-------------
relevant documentation constituting or governing the Disclosed
Scheme are attached to the Disclosure Letter and including
without limitation:
(a) all explanatory booklets and announcements currently in
force;
(b) any benefit, improvement, augmentation or any other
amendment announced or agreed in relation to the Disclosed
Scheme but which is not incorporated into the trust deed and
rules of the Disclosed Scheme
10.4 Claims
There are no actions, claims or suits (other than routine claims for
benefits) outstanding or threatened against the trustees or administrators
of the Disclosed Scheme or against the Company in respect of any act, event
or omission or other matter in any way arising out of or in connection with
the Disclosed Scheme and there are no current submissions or referrals to
the Pensions Ombudsman or to the
<PAGE>
Occupational Pensions Advisory Service in respect of the Company or the
trustees or administrators of the Disclosed Scheme
10.5 OPRA Report
There are no circumstances which would cause the auditor or actuary or the
trustees or any other scheme advisers or administrators of the Disclosed
Scheme to give a written report to the Occupational Pensions Regulatory
Authority pursuant to Section 48 of the Pensions Act
11. TAXATION
11.1 Submission of Returns
All necessary information, notices, computations and returns (all of which
are true and accurate and none of which is disputed by the relevant
taxation authority) have been submitted by the Company to the relevant
taxation authorities in respect of Tax for all periods up to and including
Completion and there is no reason to suppose that any of such computations
and returns will not in due course be accepted as true and accurate by the
relevant taxation authorities
11.2 Submission of Claims
The Company has duly submitted all claims and disclaimers which have been
assumed to be made for the purposes of the Accounts details of which
claims and disclaimers are disclosed in the Disclosure Letter
11.3 Concessions and Agreements
The amount of Tax chargeable on the Company during any accounting period
has not depended on any concession, agreement or other formal or informal
arrangement with any Tax Authority
11.4 Payment of Tax Due
All Tax for which the Company is liable and which has fallen due for
payment has been paid and any Tax which is due to be paid by the Company
prior to or on Completion will be so paid
11.5 Penalties and Interest
The Company has not paid or become liable to pay any penalty or interest
in respect of any Tax assessed upon it
11.6 Liability as Agent
The Company is not liable as lessee or agent for any Schedule A tax under
the provisions of s.23 ICTA
<PAGE>
11.7 PAYE
The Company has properly operated the PAYE system deducting tax as
required by law from all payments made to or treated as made to employees
or ex-employees of the Company and sums payable to the Inland Revenue
have been paid and will continue to be paid up to Completion
11.8 Deduction of Tax
All payments made or procured by the Company to any person which ought to
have been made under deduction of tax have been so made and (if and to
the extent required by law to do so) the Company has duly and promptly
accounted to the Inland Revenue for the tax so deducted
11.9 Back Duty Claims
The Company is not the subject of a back duty investigation nor are there
any facts of which the Vendors are aware which may give rise to the same
11.10 Accounts Provisions
The audited balance sheet and profit and loss account of the Company in
respect of each accounting period of the Company up to and including the
Last Accounting Date makes provision or reserve, in accordance with the
principles set out in the notes included in such audited balance sheets
and profit and loss accounts, for all Tax liable to be assessed on the
Company or for which it may be accountable in respect of such accounting
periods
11.11 Book and Tax Values of Fixed Assets
The aggregate book value of each of the assets of the Company in or
adopted for the purposes of the Accounts on which capital allowances are
calculated separately does not exceed the aggregate written-down value of
such assets for the purposes of the CAA and the aggregate book value of
plant and machinery on which an entitlement to capital allowances has
arisen under Part II of the CAA does not exceed the written-down value of
the qualifying expenditure under that Act
11.12 Book and Tax Values of Capital Gains Assets
No chargeable gain would arise on the disposal by the Company of each of
the assets of the Company on the disposal of which a chargeable gain or
allowable loss could arise if the proceeds to be taken into account were
equal to the book value of the relevant asset in or adopted for the
purposes of the Accounts
<PAGE>
11.13 Distributions
The Company has not at any time made or been deemed to have made a
distribution within the meaning of ss. 209, 210 or 211 ICTA (except
dividends shown in its audited accounts)
11.14 Capital Distributions
The Company has not received and will not up to Completion receive or be
entitled to receive any capital distributions to which the provisions of
s.346 ICTA could apply
11.15 Loan Relationships
The Company is not the debtor or the creditor pursuant to any loan
relationship within the meaning of paragraph 13 of Schedule 9 to FA 1996
11.16 Deep Discount and Relevant Discounted Securities
The Company has not held any chargeable security as defined in Sch 4 para
1 of ICTA or a relevant discounted security as defined in Schedule 13 FA
1996 nor issued such a security which remains in issue or which has been
redeemed since the Accounting Date
11.17 Premiums on Leases
The Company has not effected or entered into any act transaction or
arrangement of any nature whereby it has incurred or may hereafter incur
any liability under or by virtue of any of ss. 34, 35, 36 or 37 ICTA and
pending Completion will not effect or enter into any such act transaction
or arrangement
11.18 Sale and Leaseback
The Company has not entered into any such transaction as is mentioned in
s.780 ICTA
11.19 Non-Allowable Payments
Since the Accounts Date, all expenditure of a revenue nature incurred,
paid or payable by the Company (whether before or after Completion)
pursuant to any obligation in existence at the date of this Agreement
which is not and will not be deductible for corporation tax purposes
either in computing the profits of the Company or as a charge on the
income of the Company does not materially exceed the amount of such
expenditure (time apportioned on a pro rata basis) which is not
deductible for corporation tax purposes in the Accounts
11.20 No Unremittable Income
No claim has been made by the Company under s.584 ICTA
<PAGE>
11.21 Transfer Pricing
No circumstances exist or have existed which render the Company liable to
comply with sections 770 or 770A or Schedule 28AA to ICTA
11.22 Give as You Earn
The Disclosure Letter gives details of all schemes under s.202 ICTA in
which the Company has been participating
11.23 Pension Scheme Refunds
Since the Last Accounting Date no payment has been made and no payment is
likely to be made to the Company to which s.601 ICTA applies or could
apply whether as a result of Sch 22 to that Act or otherwise
11.24 Profit-Related Pay
There exists no scheme registered under Part V Chapter III of ICTA
applying to the Company or any of its employees and no application for
registration of a scheme so applying has been made
11.25 No Unremittable Gains
No claim has been made by the Company under s.279 TCGA
11.26 No Disposal within Specific Sections
The Company has not disposed of or acquired any asset in circumstances
such that the provisions of s.17 TCGA will apply, and is not entitled to
any capital loss to which the provisions of s.18(3) TCGA will apply
11.27 Debts
No capital gain will accrue to the Company on the disposal of any debt
owed to the Company
11.28 Transfer of Trade
No claim has been made by the Company under s.140A TCGA
11.29 Rollover Relief
No claims have been made under Chapter 1 of Part V, TCGA in so far as
they would affect the chargeable gain or allowable loss which would arise
on a disposal by the Company of any of its assets
11.30 Assets Ceasing to be Within Charge to UK Tax
The Company is not deemed to have made a disposal of any assets since the
Accounting Date under s.185 TCGA
11.31 Close Company
The Company is a close company within s.414 ICTA
<PAGE>
11.32 Close Company Distributions
No distribution within s.418 ICTA has ever been made by the Company, and
no such distribution will be made prior to Completion
11.33 Close Investment-Holding Company
The Company is not and never has been a close investment-holding company
as defined in s.13A ICTA
11.34 Loans to Participators
No loan or advance within s.419 ICTA has ever been made by the Company,
nor has the Company released or written off or agreed to release or write
off the whole or any part of any such loan or advance
11.35 Tax Avoidance
So far as the Vendors are aware the Company has not been involved in a
pre-ordained series of transactions in which there are inserted steps
which have no business purpose other than the mitigation, avoidance or
deferral of Tax
11.36 General Anti-Avoidance
The Company has not been a party to or otherwise involved in any
transaction, scheme or arrangement for the purposes of tax avoidance to
which any of the following provisions could apply:
ICTA ss. 398, 399, 410, 729 to 745 and 774 to 786
CAA s 75
TCGA ss. 29 to 34
11.37 Further Anti-Avoidance
The Company has not been a party to or otherwise involved in any
transaction, scheme or arrangement to which any of the following
provisions have been or could be applied other than transactions in
respect of which all necessary clearances have been obtained on the basis
of full and accurate disclosure to the Inland Revenue and/or the special
commissioners of income tax of all material facts and considerations
relating thereto:
ICTA ss. 213 to 215, 703 to 709 and s776
TCGA ss. 135 to 139
11.38 Inheritance Tax
The Company has not entered and will not prior to Completion enter into
any transaction which has will or may give rise to any Tax under the
provisions of the Inheritance Tax Act 1984 and without prejudice to the
generality of the foregoing:
<PAGE>
11.38.1 there is no charge in favour of the Inland Revenue outstanding
over the assets of or shares in the Company;
11.38.2 no person has any power of sale mortgage or charge in respect of
the assets of or shares in the company;
11.38.3 the Company is not liable to be assessed to Tax as donor or donee
of any gift or transfer of value
11.39 Compliance with VAT Administrative Requirements
The Company has complied with all statutory provisions, rules,
regulations, orders and directions concerning VAT including the making on
time of accurate returns and payments
11.40 Value Added Tax Groups
The Company is not and has not since the date of its incorporation been a
member of any group of companies for VAT purposes and no act or
transaction has been effected in consequence whereof the Company is or may
be held liable for any VAT calculated by reference to the supply of goods
or services by any other company
11.41 Security and Value Added Tax
The Company is not nor has been required to give security for payment of
VAT
11.42 Partial Exemption
The Company has not been partially exempt for any VAT accounting period at
any time
11.43 VAT on Property Transactions
No elections to waive exemption have been exercised by the Company
pursuant to paragraph 2 of Schedule 10 to VATA
11.44 Overseas VAT Recovery
The Company has reclaimed all overseas VAT which has been suffered to the
extent that it has included any amounts recoverable as an asset in the
Accounts
11.45 Transfer of Business as a Going Concern
The Company has acquired no assets in the circumstances described in
s.49(1) VATA
11.46 Bad Debt Relief
The Company has made no claim for bad debt relief under s.36 VATA and the
regulations thereunder.
<PAGE>
11.47 Capital Goods Scheme
The Company does not own and has not owned any assets which are or have
been subject to the provisions of Part XV of the Value Added Tax
Regulations 1995
11.48 Duties, etc
All value added tax, import duty, customs duty and (without limitation)
other Taxes or charges payable to any Tax Authority upon the importation
or exportation of goods and all excise duties payable to any Tax Authority
in respect of any of the assets of the Company have been paid in full and
no application has been made for binding tariff information or (without
limitation) for a decision or for a review of a decision under s.14 FA
1994 as amended by the Customs Review and Appeals (Binding Tariff
Information) Regulations 1995
11.49 Due Payment of Stamp Duty and Stamp Duty Reserve Tax
All documents in the enforcement of which the Company is interested and
which are liable to stamp duty have been duly stamped within the meaning
of the Stamp Act 1891 and since the Accounts Date the Company has not
incurred any liability to or been accountable for any Stamp Duty Reserve
Tax and there has been no agreement within s.87(1) of the FA 1986 which
could lead to the Company incurring such a liability or becoming so
accountable
12. ENVIRONMENTAL MATTERS
Save as fairly disclosed by the report from ENSR International to IMPAC
Europe Limited dated 13 October 1999, a copy of which is enclosed with the
Disclosure Letter:
12.1 Existing Legislation
The Company has complied with all Environmental Law
12.2 Breach of Legislation
The Company has not been notified of any breach of any Environmental Law
and there are no circumstances which would entitle or require any
competent authority or any other third party to serve notice or commence
proceedings as a result of such breach
12.3 Litigation
There are no disputes affecting the Company and no ongoing litigation or
claim made by or against the Company relating to any Environmental Law
<PAGE>
12.4 Quality Limits and Quality Objectives
The Company complies with the requirements of all regulations made by the
Secretary of State under Section 3(4) of the Environmental Protection Act
1990
12.5 Released Substances
The Company does not release any substance into any environmental medium
from a proscribed process as defined by regulations made by the Secretary
of State in accordance with Section 3 of the Environmental Protection Act
1990
12.6 Hazardous Substances
The Company does not use, store, spill or dispose of Hazardous Substances
12.7 Objectives
With regard to any substances which are released into the environmental
medium such substances comply as to the amount, the time periods, and the
location of the release with plans issued by the Secretary of State in
accordance with Section 3(5) of the Environmental Protection Act 1990
12.8 Authorisations
In respect of any process or activity or matter which may require consent,
licence or authority, (written or otherwise), pursuant to any
Environmental Law and/or by proscribed processes carried on by the Company
under Section 6 of the Environmental Protection Act 1990 all
authorisations to be granted by any competent authority have been obtained
and the conditions to which such authorisation is subject have been
complied with and no notice of any breach of such conditions have been
received
12.9 Authorisations withdrawn
The Company has not received any notification of withdrawal of such
authorisation referred to in the preceding warranty nor is there any
circumstance that would entitle or require the competent authority to
withdraw such authorisation
12.10 Other authorisations
The Company complies with the requirements of Her Majesty's Inspectorate
of Pollution ("HMIP"), the relevant local authority and all other
competent authorities and have obtained all licences consents and
authorisations necessary relating to environmental matters including,
inter alia, pollution, waste control, air, water and soil quality, and
connected matters
<PAGE>
13. MISCELLANEOUS
13.1 Accuracy of Information
All of the following is complete and accurate in all respects and not
misleading and the Warrantors are not aware of any fact or matter not
stated in the Disclosure Letter which renders any of the same misleading,
inaccurate or incomplete:
13.1.1 each disclosure in the Disclosure Letter
13.1.2 any written reply made by or on behalf of the Vendors to any
written enquiry made by the Purchaser's Solicitors in relation to
real property and environmental matters
13.2 Finders Fee
There is no agreement or arrangement pursuant to which the Company is or
may become liable to pay to any person any finders fee, commission,
brokerage or professional fees in relation to or by reason of the
transaction effected by the Agreement
13.3 Vendors' Interests
None of the Vendors has any direct or indirect financial interest in any
company, business or undertaking, other than the Company and interests
which are limited to investment in companies listed or quoted on a
recognised stock exchange and investments in or through independently
managed pension schemes or unit trusts or managed funds or similar
investments
<PAGE>
SCHEDULE 5
Sub-clause 8.2 : Limitations on Claims
1. LIABILITY FOR WARRANTY CLAIMS
1.1 Time Limits
No claim may be made against the Warrantors under the Tax Deed or in
respect of the Warranties unless notice of the claim has been given to the
Warrantors on or before the relevant date specified below:
1.1.1 in the case of the Tax Warranties or the Tax Deed, 30 September
2006, save that a claim may be made at any time within thirty (30)
days from receipt of an increased assessment to tax made by any tax
authority in response to or following any appeal against an
assessment of tax made prior to Completion;
1.1.2 in the case of any other of the Warranties, 1 May 2001
1.2 Claim Notices and Proceedings
The Warrantors shall not be liable by way of damages or otherwise
howsoever in respect of any breach of the Warranties unless:
1.2.1 the Warrantors shall have been served with written notice by the
Purchaser of the breach of any such Warranty prior to the dates
specified in sub-clause 1.1 of this Schedule 5; and
1.2.2 in respect of any such claim which may have been notified
proceedings shall been commenced and served upon the Warrantors in
connection with such breach or claim within the period of twelve
months (or such longer period as is agreed between the parties from
time to time) from the date of giving notice to such Warrantors as
aforesaid unless previously satisfied, settled or withdrawn
1.3 Contents of Claim Notices
The notice referred to in sub-clause 1.2.1 above shall so far as
practicable provide reasonable detail of the event or circumstances so far
as the Purchaser is then aware of the same giving rise to the breach or
claim, and so far as is practicable the amount claimed in respect of such
breach. The requirements of this paragraph 1.3 constitute obligations of
the Purchaser but compliance with them is not a condition of the liability
of the Warrantors or of the rights of enforcement of the Purchaser
<PAGE>
1.4 Timing of Claim Notices
The Purchaser shall use its reasonable endeavours to cause notice of any
claim for breach of the Warranties to be given within six months from there
becoming actually known to a director of the Purchaser both the matter
which constitutes the breach and that such matter gives rise to a claim
against the Warrantors for the breach and the second sentence of paragraph
1.3 shall apply also to this paragraph 1.4
2. MAXIMUM LIABILITY
2.1 Aggregate Liability
The total liability of the Warrantors in respect of all claims under the
Warranties, clause 8.5 of the Agreement and the Tax Deed shall not in any
event exceed the sum of FIVE MILLION FIVE HUNDRED THOUSAND POUNDS
((Pounds)5,500,000)
2.2 Individual Liability
The total liability of each Warrantor in respect of all claims under the
Warranties, clause 8.5 of the Agreement and the Tax Deed shall not in any
event exceed the sum which results from application to the sum of FIVE
MILLION FIVE HUNDRED THOUSAND POUNDS ((Pounds)5,500,000) the percentage
which the Shares sold by that Warrantor represents of the total number of
Shares sold by all the Warrantors
3. MATERIALITY
3.1 Aggregate Threshold
The Warrantors shall not be liable in respect of any breach of any of the
Warranties unless and until the amount or the aggregate amount of the
liability which the Warrantors would have in respect of all such claims but
for this paragraph exceeds the sum of FIFTY THOUSAND POUNDS
((Pounds)50,000) (in which event the Warrantors shall be liable for the
whole of such claim and not merely the excess above the said sum)
3.2 Trivial Claims
No single claim may be made in respect of any claim for any breach of any
of the Warranties or under clause 8.5 of the Agreement where the amount so
claimed does not exceed two thousand five hundred pounds ((Pounds)2,500)
and that claim shall be disregarded for all purposes. This clause 3.2 shall
not apply to any claim which arises out of the same event or circumstances
as any other claim or which is one of
<PAGE>
a series of claims under the same Warranty and in any event no more than
ten claims shall be disregarded by reason of this clause
4. DOUBLE RECOVERY
In no circumstances shall the Purchaser be entitled to recover or obtain
compensation more than once in respect of the same loss and without
limiting the foregoing the Warrantors shall not be liable in relation to
the same matter both under the Warranties and under the Tax Deed
5. RIGHTS AGAINST THIRD PARTIES
5.1 Prosecution of Claims
If any sum is paid by or on behalf of the Warrantors in satisfaction of a
claim in respect of the Warranties ("a relevant Claim") and the Purchaser
or any entity forming part of the Purchaser Group (each "a Relevant
Company") is entitled to make a claim in respect of the matter giving rise
to that claim against any third party reasonably likely to lead to a
successful recovery, the Purchaser (if notified of such fact by the
Warrantors) shall and shall procure that each Relevant Company shall (in
each case at the Warrantors' cost) make a claim against its insurers or
such third party for the loss or damage suffered and shall take all steps
as the Warrantors shall reasonably require to enforce such recovery and
shall keep the Warrantors informed as to the progress and outcome of such
claim and shall promptly give to the Warrantors such information as the
Warrantors may reasonably request in connection with such claim
5.2 Insurance
The Purchaser undertakes to maintain insurance with respect to the business
and assets of the Company at a level which is at least equivalent in all
material respects to the insurance maintained by the Company immediately
prior to Completion (details of which are contained in the Disclosure
Letter)
5.3 Subsequent Recovery
If any sum is paid by or on behalf of the Warrantors in satisfaction of a
Relevant Claim and the Purchaser or any Relevant Company subsequently
recovers a sum in respect of the matter giving rise to the Relevant Claim
from a third party (not being an entity which forms part of the Purchaser
Group) then within ten (10) Working
<PAGE>
Days of such recovery the Purchaser shall pay the amount recovered to the
Warrantors
5.4 Mitigation
Nothing herein or in the Warranties shall be deemed to relieve the
Purchaser from any common law duty to mitigate any loss or damage incurred
5.5 Exclusions applicable to Warranties
The Purchaser shall have no claim whatever in respect of any breach of any
of the Warranties:
5.5.1 if and to the extent that such breach or claim occurs as a result of
any legislation not in force at the date of this Agreement which
takes effect retrospectively or occurs as a result of any increase
in the rates of taxation in force at such date or occurs as a
consequence of a change in the interpretation of the law after such
date in any jurisdiction; or
5.5.2 if and to the extent that such breach or claim would not have arisen
but for any voluntary act, omission, transaction or arrangement
after Completion outside the ordinary course of business of the
Company or change in the accounting bases, policies or methods used
by the Company to value any of its assets
5.6 Contingent Liabilities
If any potential claim for any breach of any of the Warranties shall arise
by reason of a liability which is contingent only, then the Warrantors
shall not be under any obligation to make any payment pursuant to such
claim until such time as the contingent liability ceases to be contingent
and becomes actual
5.7 No Rescission
It is expressly accepted by the Purchaser in full substitution for all
other bases of computation of loss or damage and all other remedies which
may be available to it that a claim under the Warranties shall only lie in
damages and no breach of Warranty shall entitle the Purchaser to rescind or
terminate this Agreement
<PAGE>
SCHEDULE 6
Clause 9.1: Warranties by the Purchaser
Part I: Warranties
Subject to Part II of this Schedule the Purchaser warrants to the Vendors that
each of the following statements in this part of this Schedule is correct:
The Purchaser covenants, represents and warrants to the Vendors that:
1. The Financial Statements of the Purchaser included in (a) the Form 10-K of
the Purchaser filed with the Securities and Exchange Commission in the
United States of America and relating to the fiscal year ended 31 December
1998 (a copy of which has been supplied by the Purchaser to the Vendors)
("the Form 10K") and (b) the Form 10-Q of the Purchaser filed with the
Securities and Exchange Commission in the United States of America and
relating to the quarterly period ended 30 June 1999 (a copy of which has
been supplied by the Purchaser to the Vendors) ("the Form 10-Q"):
1.1 give a true and fair view of the Purchaser in all material respects as at
the respective dates thereof;
1.2 comply with the requirements of all relevant statutes in all material
respects;
1.3 have been prepared in accordance with generally accepted accounting
principles in the United States of America;
1.4 are not affected by any unusual or non recurring items;
1.5 properly reflect the financial position of the Purchaser in all material
respects as at their date and show a true and fair view of its profit
(loss) for the period ended on that date and of its assets and liabilities
as at that date.
<PAGE>
2. The Thamesdown Colour Valuation Analysis ("the Analysis") prepared by the
Purchaser for the benefit of the Vendors (and delivered to the Vendors) is
not misleading in any material respects and the figures contained in the
Analysis on the page thereof headed "Combined Enterprise Value" for July
1999 LTM EBITDA, Debt, Preferred and Number of Shares represent a true and
fair value in all material respects of July 1999 LTM EBITDA, Debt, and
Preferred and the correct Number of Shares.
3. All of the holders of shares of the Series A Common Stock of the Purchaser
are party to the Second Amendment and Restated Stockholder Agreement of the
Purchaser, dated as of March 12, 1998, as amended and restated as of
September 8, 1998, and as further amended and restated as of January 11,
1999 (the "Stockholder Agreement"). Other than the Purchaser's Fourth
Amended and Restated Certificate of Incorporation as amended by the
Certificate of Amendment to it dated 29 October 1999 (the "Charter") and
its Second Amended and Restated By-laws (together with the Charter, the
Purchaser's "Governing Documents"), there are no other stockholder
agreements relating to shares in the Purchaser which restrict the rights
of, or impose additional obligations upon, the Vendors upon their becoming
stockholders of the Purchaser.
4. The shares (the "Tinsley Acquisition Shares") issued by the Purchaser to
partially finance the acquisition by IMPAC Europe plc of Tinsley Robor plc
were issued at a purchase price of $608.60 per share; such Tinsley
Acquisition Shares were of the same class of stock of the Purchaser as the
shares of Series A Common Stock proposed to be issued to the Vendors under
this Agreement; and the multiple of the Purchaser's annualized consolidated
EBITDA applied to arrive at the valuation of the Purchaser employed in
determining the per-share issue price of the Tinsley Acquisition Shares was
7.4.
5. Save for a stock issuance to certain employees completed on July 30 1999 at
a price per share of $512.50, shares issued by the Purchaser to management
of the Purchaser pursuant to an agreement entered into or right granted in
either case since 1 July 1999 have been issued at a per-share price of no
less than $608.60.
<PAGE>
6. The Stockholder Agreement provides, in general, that purchasers or
acquirors of newly-issued shares of the Purchaser's common stock who become
party to the Stockholders Agreement do so as "Other Securityholders"
thereunder. The terms and conditions applicable to the Vendors upon their
execution and delivery of Deeds of Accession to the Stockholder Agreement
in agreed form and the acceptance of such deeds of accession by the
Purchaser will be the terms and conditions applicable to all "Other
Securityholders", as set forth in the Stockholder Agreement.
7. Since 30 June 1999 there has been no materially adverse change in the
financial or trading position of the Purchaser.
Part II: Liabilities
1. Time Limits and Proceedings: No claim may be made against the Purchaser and
the Purchaser shall not be liable by way of damages or otherwise howsoever
in respect of any breach of the warranties in Part 1 of this Schedule
unless:
1.1 before 31 December 2002 (in the case of warranty numbered 3) or before 1
May 2001 (in the case of any other warranty) the Purchaser has been served
with written notice by the Vendors of the breach of any such warranty; and
1.2 in respect of any such claim which has been notified proceedings have been
commenced and served upon the Purchaser in connection with such breach or
claim within the period of twelve months (or such longer period as is
agreed between the parties from time to time) from the date of giving
notice to the Purchaser as aforesaid unless previously satisfied, settled
or withdrawn (and time shall be of the essence in respect of the provisions
of this clause)
2. Contents of Claim Notices: The notice referred to in the preceding clause
shall so far as practicable provide reasonable detail of the event or
circumstances so far as the Vendors are then aware of the same giving rise
to the breach or claim and so far as is practicable the amount claimed in
respect of such breach
<PAGE>
3. Maximum Liability: The total liability of the Purchaser in respect of all
claims under this Schedule shall not in any event exceed the sum of
(Pounds)1,437,500
4. Materiality Threshold: The Purchaser shall not be liable in respect of any
breach of any of the warranties in this Schedule unless and until the
amount or the aggregate amount of the liability which the Purchaser would
have in respect of all such claims but for this paragraph exceeds the sum
of (Pounds)50,000 (in which event the Purchaser shall be liable for the
whole of such claim and not merely the excess above the said sum)
5. Trivial Claims: No single claim may be made in respect of any claim for any
breach of the warranties in this Schedule where the amount so claimed does
not exceed (Pounds)2,500 and that claim shall be disregarded for all
purposes. This clause shall not apply to any claim which arises out of the
same event or circumstances as any other claim or is one of a series of
claims under the same warranty and in any event no more than ten claims
shall be disregarded by reason of this clause.
6. Double Recovery: In no circumstances shall the Vendors be entitled to
recover or obtain compensation more than once in respect of the same loss.
7. Currency Exchange: in computing the Sterling value of any claim which is
initially quantified in US Dollars an exchange rate of (Pounds)1:$1.65
shall be applied.
<PAGE>
SCHEDULE 7
Agreed Form Documents
Tax Deed
Deed of Covenant
Directors Resignation
Vendors' Shares Power of Attorney
Deed of Accession to the Shareholders' Agreement
<PAGE>
SCHEDULE 8
Sub-clause 5.2.1 : Persons to give a Deed of Covenant
Each of the Vendors
<PAGE>
SCHEDULE 9
Clause 6.4 : Persons to enter into a Service Agreement
C J Watson
K J Ward
J Curry
M Williams
N Elbourne
G Carleton
<PAGE>
SCHEDULE 10
Clause 9.2 : Employee Bonus Payments
As shown on attached Annex S10
<PAGE>
SCHEDULE 11
Part I: Clause 3.5
Representations and Warranties of Vendors regarding acquisition of Consideration
Shares
In connection with the issuance of Consideration Shares to the Vendors, each of
the Vendors represents and warrants to the Purchaser as follows:
(a) Such Vendor represents that the Consideration Shares to be acquired by him
or her as contemplated hereby shall be acquired for his or her own account,
for investment purposes, and not with a view to the resale or distribution
thereof. Such Vendor understands that such securities have not been
registered under the United States Securities Act of 1933, as amended (the
"Securities Act"), on the grounds that (among other matters) the offer and
--------------
sale of the Consideration Shares to such Vendor are exempt from the
registration requirements of the Securities Act under Section 4(2) thereof
as a transaction not involving any public offering of such Consideration
Shares. Such Vendor understands that the Purchaser's reliance on such
exemption is predicated in part on the representations of such Vendor
contained herein.
(b) Such Vendor is not a U.S. Person (defined below) and is not acquiring any
Consideration Shares for the account or benefit of any U.S. Person. A "U.S.
Person" means (i) any natural person resident in the United States, (ii)
any partnership or corporation organized or incorporated under the laws of
the United States, (iii) any estate of which any executor or administrator
is a U.S. Person, (iv) any trust of which a U.S. Person is a trustee, (v)
any agency or branch of a foreign entity located in the United States, (vi)
any non-discretionary account or similar account (other than an estate or
trust) held by a dealer or fiduciary for the benefit or account of a U.S.
Person, (vii) any discretionary account or similar account (other than an
estate or trust) held by a dealer or other fiduciary organized,
incorporated, or (if an individual) resident in the United States; and
(viii) any partnership or corporation if (A) organized or incorporated
under the laws of any non-U.S. jurisdiction, and (B) formed by a U.S.
Person principally for the purpose of investing in securities not
registered under the Securities Act, unless it is organized
<PAGE>
or incorporated, and owned, by "accredited investors" (as defined in
Regulation 501(a) promulgated under the Securities Act) who are not natural
persons, estates or trusts.
(c) Such Vendor has received, read, carefully considered and fully understood
the Form 10-K, the Form 10-Q, the Purchaser's Governing Documents and the
Stockholder Agreement (as each of such terms are defined in Schedule 6 to
this Agreement to which this Schedule is scheduled), as well as the
representations of the Purchaser made herein, and the attachments hereto
and thereto. In making his or her investment decision with respect to the
Consideration Shares, such Vendor has relied on no oral or written
representations with respect to the Consideration Shares, the Purchaser,
its business or prospects, or other matters, other than the representations
and warranties expressly set forth in Schedule 6 to this Agreement and
incorporated herein by reference.
(d) Such Vendor understands that he or she must bear the economic risk of
investment in the Shares to be acquired hereunder for an indefinite period
of time because such Shares have not been registered under the Securities
Act, and therefore cannot be sold unless they are subsequently registered
under the Securities Act or an exemption from such registration is
available. In addition, such Vendor understands that the Stockholder
Agreement imposes significant restrictions on the transfer and voting of
Shares.
(e) Such Vendor agrees that the representations and warranties and agreements
he or she makes in this Schedule shall survive Completion, and shall be
construed and interpreted in accordance with the federal laws of the United
States of America, notwithstanding anything to the contrary stated in
Clause 11.12 (Law and Proceedings) of this Agreement.
Part II: Clause 3.5
Agreements of Vendors in connection with their acquisition of Consideration
Shares:
Each of the Vendors agrees with the Purchaser that:
<PAGE>
(a) As a condition to the issuance of the Consideration Shares, such Vendor is
required to become a party to the Stockholder Agreement and has executed a
properly completed Deed of Accession, in agreed form, for the purpose of
being bound by the terms of the Stockholder Agreement as an "Other
Securityholder" thereunder.
(b) Such Vendor agrees that the Consideration Shares shall not be sold,
transferred, assigned, hypothecated or pledged, or otherwise disposed of
(collectively "transferred"), or offered for sale, in whole or in part,
either (a) at any time while a Liability as defined in clause 8.7 might
fall to be satisfied by cancellation of the same or (b) at any time
thereafter unless offered or transferred (i) in accordance with the
provisions of Regulation S of the Securities Act, or (ii) pursuant to an
effective registration under the Securities Act and applicable state
securities laws, or (iii) upon the receipt by the Purchaser of a written
opinion of counsel to the effect that such transfer is not in violation of
the registration requirements of the Securities Act or other applicable law
(provided that such counsel and the form and substance of such opinion are
--------
reasonably satisfactory to the Purchaser).
(c) Such Vendor shall not engage in hedging transactions with regard to the
Consideration Shares to be acquired by him or her unless in compliance with
the Securities Act.
(d) A legend in substantially the following form has been or will be placed on
any instrument(s) evidencing the Consideration Shares:
"THE SHARES OF SERIES A COMMON STOCK EVIDENCED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
SECURITIES ACT OF ANY STATE. THE SHARES OF SERIES A COMMON STOCK EVIDENCED
HEREBY MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE TRANSFERRED EXCEPT
IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S OF THE SECURITIES ACT,
<PAGE>
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES BEING
SOLD UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND SUCH STATE LAWS AS
MAY BE APPLICABLE, OR A WRITTEN OPINION OF COUNSEL TO THE EFFECT THAT SUCH
TRANSFER OR SALE MAY BE EFFECTED WITHOUT THE REGISTRATION OF THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE
SECURITIES LAWS. HEDGING TRANSACTIONS INVOLVING THE SHARES MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS
AMENDED."
Part III: Clause 8.7.4
Payments of Indemnity Claims with Shares.
1. If pursuant to clause 8.7 any Liability (as defined therein) is to be
satisfied in part by cancellation of Consideration Shares, the applicable
Vendor or Vendors shall transfer without further consideration to the
Purchaser, free and clear of all charges, liens, security interests or
other encumbrances, by delivering to the Purchaser within five (5) business
days' of the date of final determination of the amount of such Liability
which is to be satisfied in such manner, appropriately endorsed
certificates representing at least that number of Consideration Shares
rounded to the second decimal place (the "Indemnity Shares"), which
--------- ------
is to be cancelled pursuant to clause 8.7 of the Agreement,subject
always to certificate(s) having been delivered to such Vendor(s) pursuant
to clause 5.3.3 (and if such certificates are held by the Purchaser's
Solicitors they are hereby irrevocably authorised to deliver the same to
the Purchaser when such delivery is required by the terms of this clause).
2. Upon transfer to the Purchaser, the Indemnity Shares shall be cancelled;
new share certificates, representing the original amount of Shares
represented by the certificate(s) delivered by the applicable
<PAGE>
Vendor or Vendors, less the number of cancelled Indemnity Shares, shall be
issued to the applicable Vendor or Vendors.
3. If after the date of this Agreement and before cancellation pursuant to
clause 8.7 there occurs any stock splits, dividends payable in stock,
combinations, recapitalisations or like transactions affecting the capital
stock of the Purchaser there shall be made such adjustments to the number
of Consideration Shares to be cancelled as will place the parties in the
same position as they would have been in had such transaction not occurred
and the good faith certificate of the Auditors to the Purchaser shall be
conclusive as to any such adjustment.
4. By way of security for due performance of his obligations under clause 8.7
and this Schedule, each of the Vendors irrevocably appoints the Purchaser
and any person nominated by the Purchaser to sign and deliver such papers
and do such other things as the Purchaser reasonably considers requisite
for performance of those obligations by him.
SIGNED by )
GRACE EVELINE CARLETON ) /s/ Grace Eveline Carleton
in the presence of: )
SIGNED by )
JOHN PETER CURRY ) /s/ John Peter Curry
in the presence of: )
SIGNED by )
KEITH JONATHAN WAND ) /s/ Keith Jonathan Wand
in the presence of: )
SIGNED by )
CHRISTOPHER JOHN WATSON ) /s/ Christopher John Watson
in the presence of: )
<PAGE>
SIGNED by )
MARTYN NIGEL WILLIAMS ) /s/ Martyn Nigel Williams
in the presence of: )
SIGNED by )
NICHOLAS ELBOURNE ) /s/ Nicholas Elbourne
in the presence of: )
SIGNED by )
PETER HANLEY ) /s/ Peter Hanley
in the presence of: )
SIGNED by SHAUN LAWSON ) /s/ Shaun Lawson
and LEE NEWBON ) /s/ Lee Newbon
for and on behalf of )
IMPAC GROUP, INC )
