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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
April 3, 1997
TRANSMEDIA EUROPE, INC.
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(Exact name of Registrant as specified in its charter)
Delaware 0-24404 13-3701141
- ----------------- ------------------ ----------------------
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification No.)
incorporation)
11 St. James's Square, London SW1Y 4LB, England
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
U.K. 011-44-171-930-0706
------------------------
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Item 2. Acquisition or Disposition of Assets
On April 3, 1997, Transmedia Europe, Inc. (the "Company") purchased
from Mr. C.E.C. Radbone approximately 50% of the outstanding capital stock of
Countdown Holdings Limited, a privately owned United Kingdom company based in
London, England ("Countdown"). Countdown, through its wholly-owned operating
subsidiary, Countdown Plc, is an international provider of membership discount
services. The transaction (the "Acquisition") was consummated pursuant to an
Acquisition Agreement dated as of April 3, 1997 (the "Acquisition Agreement")
among the Company, C.E.C. Radbone and Transmedia Asia Pacific, Inc. ("Transmedia
Asia"). In accordance with the Acquisition Agreement, the balance of the
outstanding capital stock of Countdown was simultaneously purchased by
Transmedia Asia on terms similar to the terms of the Company's purchase.
Transmedia Asia shares common directors, officers and a principal stockholder
with the Company, and is engaged in the discount restaurant charge card business
in certain countries outside of the Company's licensed territory.
In payment of the purchase price, the Company issued 1,200,000 shares
(the "Radbone Shares") of its common stock, $.00001 par value per share ("Common
Stock"), and paid (pounds)500,000 (approximate U.S. Dollar equivalent as of
April 3, 1997 was $800,000) in cash. In addition, the Company granted to
Mr. Radbone an option to purchase up to 250,000 shares of Common Stock at a
purchase price of $1.00 per share. The Company granted Mr. Radbone piggyback
and demand registration rights with respect to the Radbone Shares.
The cash portion of the purchase price was funded by a $1,000,000 loan
from a director and stockholder of the Company. The loan matures on September
27, 1997, bears interest at the rate of 12% per annum, and is collateralized by
a pledge of all of the shares purchased by the Company from Mr. Radbone. In
connection with the loan, the Company issued to the director and stockholder
five-year warrants to purchase up to 125,000 shares of Common Stock at $1.25 per
share, and granted piggyback registration rights with respect to such shares.
Contemporaneously with the Acquisition, Countdown Plc entered into an
employment agreement with Mr. Radbone pursuant to which Mr. Radbone is employed
as Managing Director of Countdown Plc. The agreement is for an initial term of
three years and provides for a base salary of approximately (pounds) 100,000
subject to such annual increases as Countdown Plc in its sole discretion may
determine. Mr. Radbone is entitled to participate in pension and benefit
programs (including Countdown Plc continuing to pay the sum equivalent of
(pounds) 20,000 per annum for Mr. Radbone's participation in the pension plan)
and is entitled to use of a car at the expense of Countdown Plc. The agreement
contains provisions regarding the
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assignment by Mr. Radbone of intellectual property rights and restrictive
covenants relating to disclosure of confidential information and competitive
activities.
Upon consummation of the Acquisition, Mr. Radbone was elected a
director of the Company, and Messrs. Edward J. Guinan III and Paul Harrison were
elected directors of Countdown and Countdown Plc. Mr. Radbone continues as a
director of Countdown and Countdown Plc.
In August 1996, International Advance, Inc., a stockholder of the
Company and a company which shares a common principal stockholder with the
Company, purchased an option for (pounds) 250,000 to acquire Countdown. The
option was subsequently assigned to the Company and Transmedia Asia in
consideration for (pounds) 250,000 (plus reimbursement for legal fees), which
amount was borne equally by the Company and Transmedia Asia.
In connection with the Acquisition, the Company and Transmedia Asia
each agreed to pay $125,000 in cash to TMNI International Incorporated ("TMNI")
and each agreed to issue to TMNI a promissory note in the principal amount of
$250,000, payable April 2, 1998 and bearing interest at the rate of 10% per
annum. The promissory notes are to be convertible at the holder's option into
common stock of the issuer at the rate of $1.20 per share. The Company agreed to
pay such amounts in order to obtain the consent of TMNI to the Acquisition,
which consent was required by the terms of the master license agreement from
TMNI under which the Company operates its discount restaurant charge card
business.
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Item 7. Financial Statements and Exhibits
(a) and (b) Financial Statements of Business Acquired and Pro Forma
Financial Information.
It is impracticable for the Company to provide at this time the
required audited financial statements and the required pro forma financial
information. The Company intends to file such financial statements and
information under cover of Form 8-K/A no later than 60 days from April 18, 1997.
(c) Exhibits.
2.1 Acquisition Agreement, dated as of April 3, 1997, among
C.E.C. Radbone, the Company and Transmedia Asia.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
April 17, 1997 TRANSMEDIA EUROPE, INC.
By: /S/ WILLIAM H. PRICE
--------------------------------
William H. Price
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
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2.1 Acquisition Agreement, dated as of April 3, 1997, among
C.E.C. Radbone, the Company and Transmedia Asia.
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CONFORMED COPY
DATED 3 APRIL 1997
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(1) C. E. C. RADBONE
(2) TRANSMEDIA EUROPE, INC.
(3) TRANSMEDIA ASIA PACIFIC, INC.
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ACQUISITION AGREEMENT
RELATING TO THE ISSUED SHARE CAPITAL
OF COUNTDOWN HOLDINGS LIMITED
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LEWIS SILKIN
WINDSOR HOUSE
50 VICTORIA STREET
LONDON SW1H ONW
TELEPHONE: 0171 227 8000
REFERENCE: TJW.TR240.009
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INDEX
1. DEFINITIONS.................................................. 1
2. SALE AND PURCHASE OF THE SHARES.............................. 7
3. CONSIDERATION................................................ 7
4. COMPLETION................................................... 7
5. WARRANTIES.................................................. 11
6. CONTINUING OBLIGATIONS....................................... 16
7. WAIVERS AND VARIATIONS....................................... 19
8. FURTHER ASSURANCE............................................ 19
9. GENERAL...................................................... 20
SCHEDULES
Schedule 1 - Details of Vendor and Shareholding
Schedule 2 - Details of the Company
Schedule 3 - Details of the Subsidiaries
Schedule 4 - Premises
Schedule 5 - Warranties
Schedule 6 - Deed of Covenant
Schedule 7 - Service Agreement
Schedule 8 - Purchaser's representations and warranties
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THIS AGREEMENT is made on 3rd day of April 1997
BETWEEN:-
(1) THE PERSON whose name and address is set out in column (1) of Schedule
1 ("the Vendor"); and
(2) TRANSMEDIA EUROPE, INC. whose registered office is at c/o United
Corporate Services Inc 15 East North Street City of Dover County of
Kent Delaware USA ("Europe the Purchaser"); and
(3) TRANSMEDIA ASIA PACIFIC, INC. whose registered office is at c/o United
Corporate Services Inc. 15 East North Street, City of Dover, County of
Kent, Delaware, USA ("Asia").
WHEREAS:
The Vendor has agreed to sell and the Purchaser has agreed to purchase the
Shares on the terms and conditions hereinafter contained and in particular on
the basis of the warranties hereinafter mentioned.
NOW IT IS HEREBY AGREED as follows:-
1. DEFINITIONS
1.1 In this Agreement unless the context otherwise requires:-
"ACCOUNTS"
means the latest audited consolidated balance sheet and profit and loss
account of the Group including the statements of accounting policies set out
therein and the notes thereto;
"ACCOUNTS DATE"
means the date to which the Accounts are made up;
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"AGREED FORM"
means in the form agreed between the parties hereto prior to the date of
this Agreement incorporated herein or initialled for identification by or on
behalf of the Vendor and the Purchaser;
"ASIA SHARES"
means 1,330,524 shares of Common Stock of Asia par value US$.00001 per
share;
"BUSINESS DAY"
means any day except Saturdays and Sundays on which banks in the City of
London are open for business;
"CAA"
means the Capital Allowances Act 1990;
"CERTIFICATES OF TITLE"
means the certificates as to title to the Premises in the agreed form
prepared in respect of the English Premises by the Vendor's Solicitors and
in respect of the Irish Premises by the Vendor's Irish Solicitors;
"THE COMPANY"
Countdown Holdings Limited particulars of which are set out in Schedule 2;
"COMPLETION"
means performance by the parties hereto of the obligations assumed by them
under Clause 4;
"COMPLETION DATE"
means the date on which Completion takes place;
"CONSIDERATION"
means the consideration payable by the Purchaser to the Vendor for the sale
and purchase of the Shares;
"CUSTOMER"
means any Person who or which at any time during the period of twelve months
immediately prior to the Termination Date was the holder of a discount or
other card issued by the Company or any Relevant Associated Company or who
otherwise was entitled to receive the benefit of their schemes for members;
"DEED OF COVENANT"
means the deed of covenant set out in Schedule 6;
"DISCLOSURE LETTER"
means the letter of even date herewith from the Vendor and addressed to the
Purchaser by way of disclosure in relation to the matters raised in the
Warranties;
"DISCOUNTER"
means any Person who or which at any time during the period of 12 months
prior to the
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date of this Agreement or at any time during the Restricted Period has
agreed to provide or provided goods and/or services and/or concessions (by
way of discount or otherwise) to customers or to the Company or any Group
Company or any Licensee or any Joint Venture Partner whether on favourable
terms or otherwise;
"ENGLISH PREMISES"
means the premises described in Part I of Schedule 4;
"ENLARGED GROUP"
means together the Group and the Purchaser's Group;
"ENVIRONMENTAL LAWS"
means all statutory and local laws and subordinate legislation relating to
Environmental Matters or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials;
"ENVIRONMENTAL MATTERS"
means waste, contaminated land, discharges or emissions of dangerous
hazardous or toxic substances and materials;
"EUROPE SHARES"
means 1,200,000 shares of Common Stock of Europe par value US$.00001 per
share;
"GROUP"
means the Company and the Subsidiaries and "Group Companies" means any of
them;
"HAZARDOUS MATERIALS"
means chemicals, pollutants, contaminants, wastes, petroleum, petroleum
products, dangerous hazards or toxic substances and materials;
"ICTA"
means the Income and Corporation Taxes Act 1988;
"INTELLECTUAL PROPERTY RIGHTS"
means the following assets of the Group Companies in any part of the world:-
(i) any patents patent applications any trade or service marks (whether
or not registered) including applications therefor used or held;
(ii) inventions whether or not capable of protection by patent
registration;
(iii) know-how including manufacturing data specifications and drawings
research materials and technical information;
(iv) copyrights or design rights whether registered or unregistered in
respect of drawings designs articles specifications research
materials technical information or other documents and including
rights in computer software;
(v) rights under any agreement granted by or to third parties to use any
of the above;
(vi) all goodwill in any trade or service name trading style or get-up
accrued;
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(vii) any moral rights as defined by Sections 77-83 of the Copyright
Designs and Patents Act 1988 or any subsequent amendment thereof in
any drawings design or other copyright work;
"JOINT VENTURE AGREEMENTS"
means any agreement made between any Group Company and individual Joint
Venture Partners for the development and/or exploitation of a business or
businesses the same or similar to the Restricted Business and/or for the
use and/or exploitation of the Intellectual Property Rights owned or used
by any Group Company;
"JOINT VENTURE PARTNER"
means any person with whom any Group Company has entered into a Joint
Venture Agreement and with whom the Vendor shall have had dealings in the
course of his employment with any Group Company;
"IN WRITING"
shall include any communications made by letter or facsimile transmission;
"LICENCEES"
means any person with whom any Group Company has entered into a Licence
Agreement and with whom the Vendor shall have had dealings in the course of
his employment with any Group Company;
"LICENCE AGREEMENTS"
means any agreement made between any Group Company and individual Licencees
for the development and/or exploitation of a business or businesses the same
or similar to the Restricted Business and/or for the use and/or exploitation
of the Intellectual Property Rights owned or used by any Group Company;
"MATERIALLY INTERESTED"
means employed or engaged by or concerned or interested in (whether
directly or indirectly) other than as a shareholder holding directly or
indirectly by way of investment of up to 3% in nominal value of the issued
shares or other securities of any class of any company listed or dealt in on
any Recognised Investment Exchange;
"IRISH PREMISES"
means the premises described in Part II of Schedule 4;
"THE PARENT COMPANY GUARANTEE"
means the guarantee in the agreed form of the Company's obligations as a
tenant of the premises as Hurlingham Business Park;
"PERSON"
means any person, firm, company, association, corporation or other
organisation or entity;
"PREMISES"
means together the English Premises and Irish Premises described in
Schedule 4;
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"PURCHASER"
means Europe and Asia;
"PURCHASER'S GROUP"
means Asia and Europe their subsidiaries and any holding company of Asia or
Europe from time to time;
"PURCHASER'S REPRESENTATIONS"
means the representations and warranties set out in Schedule 8;
"PURCHASER'S SOLICITORS"
means Lewis Silkin of Windsor House 50 Victoria Street London SW1H 0NW;
"RECOGNISED INVESTMENT EXCHANGE"
means a body which is a recognised investment exchange for the purposes of
the Financial Services Act 1986;
"REGISTRATION RIGHTS AGREEMENT"
means the registration rights agreement to be entered into by the Vendor and
the Purchaser in the agreed form;
"RESTRICTED BUSINESS"
means such business trade or activity in which the Company or any Relevant
Company is engaged at the date of this Agreement;
"RESTRICTED GOODS AND/OR SERVICES"
means goods and/or services of a type or which compete with those:-
(a) provided by the Company or any Relevant Company in the ordinary
course of its or their business during the period of 12 months
immediately prior to the Termination Date; and
(b) in the provision of which the Vendor was concerned or engaged
during his employment by the Company;
"THE RESTRICTED PERIOD"
means the period beginning with the Completion Date and ending on the later
of three years thereafter and eighteen months after the Vendor ceases to be
employed by or render services to any of the companies in the enlarged
Group;
"SECURITY INTEREST"
means any encumbrance, mortgage, charge, assignment for the purpose of
security, pledge, lien, right of set off, retention of title or other
security interest of whatever kind and any agreement, whether conditional or
otherwise to crease any such interest;
"SERVICE AGREEMENT"
means the contract of employment to be entered into substantially in the
form set out in Schedule 7 by the Vendor;
"SHARES"
means the whole of the issued share capital of the Company owned by the
Vendor details of which are set opposite his name in Schedule 1;
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"THE SUBSIDIARIES"
means the companies particulars of which are set out in Schedule 3;
"TAXATION" OR "TAXATION"
means all taxes impositions duties charges and levies in all forms
throughout the world of a fiscal nature and wheresoever imposed (and
whether assessed or withheld at source) including and any penalties
charges and interest accruing on any taxation and the words "tax" and
"taxes" shall be construed accordingly;
"TCGA"
means the Taxation of Chargeable Gains Act 1992;
"TERMINATION DATE"
means the date on which the Vendor ceases to be employed by or render
services to any Group Company;
"TERRITORY"
means each country in which the Company or any Relevant Company
conducts the Restricted Business and/or supplies Restricted Goods
and/or Services and each country in which the Company or any Group
Company shall have entered into a Licence Agreement or Joint Venture
Agreement under which any Licensee or Joint Venture Partner conducts
the Restricted Business and/or supplies Restricted Goods and/or
Services pursuant to any of the Licence Agreements or the Joint
Venture Agreements (as the case may be);
"VENDOR'S IRISH SOLICITORS"
means Ahearne O'Shea & Co of 13-16 Dame Street, Dublin;
"VENDOR'S SOLICITORS"
means S J Berwin & Co of 222 Grays Inn Road, London WC1X 8HB;
"WARRANTIES"
means the warranties set out in Schedule 5.
1.2 Except where the context otherwise requires words denoting the singular
include the plural and vice versa and words denoting any one gender include all
genders and words denoting persons include firms and corporations and vice
versa.
1.3 Unless otherwise stated a reference to a Clause or sub-clause or a
Schedule is a reference to a clause or a sub-clause of or a schedule to this
Agreement. References in this Agreement include the Schedules and the Schedules
form part of this Agreement.
1.4 References to any statute or statutory provision shall be deemed to
include a reference to any amendment or re-enactment thereof or substitution
therefor from time to time and any rules orders regulations and delegated
legislation made thereunder and shall include a reference also to any past
statutory provisions (as from time to time amended
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or re-enacted) which such statute or statutory provision directly or indirectly
has replaced provided that any such amendment, re-enactment or any such rules do
not impose any greater obligations upon the parties than at the date hereof.
1.5 Words and expressions contained in this Agreement shall where the
context so admits have the meanings thereby attributed by the Companies Act 1985
(as amended).
1.6 A reference to a SSAP is a reference to a statement of standard
accounting practice adopted by the Accounting Standards Board and a reference to
a FRS is a reference to a financial reporting standard adopted by the Accounting
Standards Board.
1.7 Where in this Agreement the expression "to the best of the Vendor
knowledge and belief" or "so far as the Vendor is aware" or any wording which
has similar effect there shall be deemed to be added the words "all reasonable
enquiry having been made".
2. SALE AND PURCHASE OF THE SHARES
2.1 Subject to the terms of this Agreement the Vendor shall sell and Europe
shall purchase 250,000 of the Shares and Asia shall purchase 250,000 of the
Shares with full title guarantee for the Consideration free from all Security
Interests but together with all rights and privileges attaching thereto now and
hereafter including (without limitation) the right to receive all dividends and
other distributions declared made or paid thereon on or after the Completion
Date.
3. CONSIDERATION
3.1 The Consideration shall be the aggregate of the sum of (pound)1,000,000
to be satisfied in cash and the issue to the Vendor of the Europe Shares and the
Asia Shares.
3.2 The Europe Shares and the Asia Shares shall rank pari passu with the
shares of Common Stock of Europe and Asia respectively in issue at the date of
allotment thereof save that they will not rank for any dividend declared or paid
prior to the date hereof nor will they be registered pursuant to the United
States of America Securities Act of 1933.
4. COMPLETION
4.1 Subject to the provisions of this Clause Completion shall take place at
the offices of the Purchaser's Solicitors immediately after the signing of this
Agreement.
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4.2 On or before Completion the Vendor shall repay all monies then owing by
him to the Company or to any Group Company.
4.3 At Completion the Vendor shall procure the delivery to the Purchaser
of:-
4.3.1 the share certificates and transfers duly executed by the
Vendor in favour of Europe for 250 of the Shares and Asia
for 250 of the Shares (and/or such other persons(s) as it
shall have nominated);
4.3.2 an engrossment of the Deed of Covenant duly executed by
the Vendor;
4.3.3 the Certificates of Title and the title deeds and other
documents relating to the Premises not subject to
mortgages;
4.3.4 the share certificates in respect of all issued shares in
the Subsidiaries and duly executed transfers of such
shares not registered in the name of the Company in
favour of the Purchaser or a person nominated by the
Purchaser and any other documents of title relating to
the investments of the Group Company;
4.3.5 statements of balances at a date not more than three days
prior to Completion with reconciliations to the Business
Day preceding the Completion Date on all bank accounts of
each Group Company and all current cheque books relating
to such accounts and forms to amend the mandates given to
the relevant banks and other institutions in such manner
as the Purchaser shall direct;
4.3.6 the Service Agreement duly executed by the Vendor;
4.3.7 a letter in agreed form from Rhodes & Rhodes;
4.3.8 the resignations in agreed form of such persons as the
Purchaser shall stipulate as directors of the Group
Companies other than the Vendor and of the current
secretary of the Group Companies acknowledging that he
has no claim against the Group Companies for loss of
office;
4.3.9 the statutory books Certificates of Incorporation and on
Change of Name (if applicable) books of account and
documents of record of each Group Company complete and up
to date;
4.3.10 written confirmation from the Vendor that the Group is
not indebted to him in any way otherwise than in respect
of accrued salary, pension contributions and other
benefits relating to his employment for the current
month, (whether actually or contingently) and that after
compliance with sub-clause 4.2 he will not be indebted to
the Company or any other member of the Group or vice
versa;
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4.3.11 irrevocable power of attorney (in such form as the
Purchaser may reasonably require) executed by the Vendor
in favour of the Purchaser to enable the Purchaser
(pending registration of the transfer of the Shares
hereunder) to exercise all voting and other rights
attaching to the Shares and to appoint proxies for this
purpose; and
4.3.12 an executed original of the Registration Rights
Agreement.
4.4 On Completion the Vendor shall procure:-
4.4.1 the passing at a duly convened meeting of the Board of
Directors of the Company of resolutions:-
4.4.1.1 approving (subject only where necessary to
their being duly stamped) the transfer of
the Shares hereunder;
4.4.1.2 accepting the resignations of such persons
as the Purchaser shall stipulate as
directors of the Group Companies other
than the Vendor and of the current
secretary of the Company;
4.4.1.3 appointing such persons as the Purchaser
shall stipulate as additional directors
and as secretary of the Company;
4.4.1.4 changing the accounting reference date of
the Company to 30 September;
4.4.1.5 changing the registered office to such
address as the Purchaser shall require;
4.4.1.6 approving and executing the Service
Agreement;
4.4.1.7 modifying all existing bank and other
mandates as the Purchaser shall direct;
and
4.4.2 the passing at duly convened meetings of the Board of
Directors of each other Group Company of resolutions:-
4.4.2.1 accepting the resignations of such persons
as the Purchaser shall stipulate as
directors of the Group Companies other
than the Vendor and of the current
secretary;
4.4.2.2 appointing such persons as the Purchaser
shall stipulate as additional directors
and as secretary;
4.4.2.3 approving the transfer of any shares not
registered in the name of the Company to a
nominee identified by the Purchaser (and
subject only to the stamping of the same);
4.4.2.4 changing the accounting reference date to
30 September;
4.4.2.5 changing the registered office to such
address as the Purchaser shall require;
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4.4.2.6 modifying all existing bank and other
mandates as the Purchaser shall direct.
4.5 Upon completion of all the matters referred to in sub-clauses 4.2
to 4.4 above Asia and Europe (as the case may be) shall:-
4.5.1 satisfy the Consideration by the telegraphic transfer of
(pound sterling)1,000,000 to the Vendor's Solicitors and
the issue of the Europe Shares and the Asia Shares to the
Vendor and the delivery to the Vendor's Solicitors of
stock certificates therefor (whose receipt thereof shall
be an absolute discharge of the Purchaser and the
Purchaser's Solicitors);
4.5.2 deliver to the Vendor's Solicitors a counterpart of the
Deed of Covenant duly executed by the Purchaser; and
4.5.3 grant options in the agreed form in favour of the Vendor
over 250,000 and 277,193 shares of Common Stock par value
US$.00001 per share of Europe and Asia respectively;
4.5.4 deliver to the Vendor's Solicitors an executed original
of the Registration Rights Agreement; and
4.5.5 appoint the Vendor (who hereby consents to so act) as a
director of each of Europe and Asia.
4.6 The Purchaser shall not be obliged to complete the purchase of any of
the Shares unless the purchase of all such Shares is completed simultaneously.
4.7 The Vendor shall forthwith after the date hereof use his best endeavours
to procure the rectification of the Proprietorship Register of the title to the
freehold property at Unit 1 Hurlingham Business Park which is registered at HM
Land Registry under title number NGL 619344 to provide that the registered
proprietor is stated to be the trustees of the Countdown plc Self Administered
Scheme and the rectification of the lease of the said property dated 12 July
1995 to provide that the lessor is named as the trustees and to procure that the
trustees enter into a deed of variation in the form attached to the Option
Agreement dated 23 August 1996 made between the Vendor and International
Advance, Inc. Upon completion of the matters referred to in this Clause 4.8 Asia
shall execute and deliver to the Vendor the Parent Company Guarantee.
4.8 Each of the Purchasers shall use its best endeavours to procure the
release of the bank guarantee of the Vendor dated 11 March 1997 in favour of
National Westminster Bank plc to secure the liabilities of the Company within
ninety days of Completion and pending such release the Purchaser shall indemnify
the Vendor against all liabilities arising
<PAGE> 13
under such guarantee after Completion save in the event of fraud on the part of
the Vendor.
5. WARRANTIES
5.1 The Vendor hereby warrants to the Purchaser (both for themselves and as
trustee for all other members of the enlarged Group) as to the accuracy of the
Warranties.
5.2 The Warranties are given subject to the statements of fact fairly
disclosed in the Disclosure Letter and which if not so disclosed would have
rendered a Warranty untrue and which disclosures the Vendor warrants represents
and undertakes to be true and accurate and not misleading.
5.3 Each of the Warranties shall be a separate Warranty and shall in no way
be limited or reduced by reference to the terms of any other Warranty.
5.4 The Purchaser has entered into this Agreement on the basis of the
Warranties and in reliance on them.
5.5 The Purchaser warrants that at the date hereof it has no knowledge of
any fact or matter which may render any Warranty untrue.
5.6 In the event of a breach of any of the Warranties the Vendor shall not
be entitled to disclaim liability therefor on the grounds that loss in respect
thereof has been suffered by the relevant Group Company rather than by the
Purchaser nor raise as a defence the fact (if it be the case) that the relevant
Group Company and/or its employees officers agents or advisers had or ought to
have had at any time knowledge of the breach complained of.
5.7 No proceedings shall be commenced in respect of any claim for breach of
the Warranties or the Deed of Covenant unless: -
5.7.1 notice giving reasonable details of the claim:
5.7.1.1 shall, in the case of any claim other than a claim
relating to Taxation, have been delivered to the
Vendor by the Purchaser as soon as reasonably
practicable after it has become aware of it and in any
event not later than twenty-one months after the date
of Completion; and
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5.7.1.2 insofar as such breach relates to Taxation, shall have
been delivered to the Vendor by the Purchaser as soon
as reasonably practicable after it has become aware of
it and in any event within seven years of the date of
Completion; and
5.7.2 the amount of each claim exceeds (pound sterling) 2,500 and
when aggregated with all the other claims exceeds (pound
sterling) 50,000 in which event the full amount (and not only
the excess) may be claimed under legal proceedings.
The limitations in this Clause 5.7 and in Clauses 5.8 to 5.10 and 5.12 shall
not apply in the case of fraud by the Vendor.
5.8 The total amount of the liability in respect of any and all claims under
the Warranties and the Deed of Covenant shall be limited to (pound sterling)
2,500,000 provided that the Vendor may at his election settle any such claim in
cash and/or by the delivery to the Purchaser (or as it shall direct) of Europe
Shares and/or Asia Shares (on the basis that each such share has a value of
(pound sterling) 0.60) provided further that the Vendor shall pay to the
Purchaser not less than 40% in respect of each such claim in cash. In the event
that the Vendor settles part of any such claim by the delivery of Europe Shares
and/or Asia Shares, the Vendor shall transfer such shares to the Purchaser (or
as it shall direct) with full title guarantee free from all Security Interests
but with all rights then attaching thereto and deliver up the relative
certificate(s) therefor.
5.9 If, subsequent to any payment by the Vendor to the Purchaser in respect
of any Warranty claim or any claim under the Deed of Covenant, the Group or the
Purchaser or either of them receives any payment from any third party in respect
of the loss suffered by the Company which resulted in the claim, the Purchaser
shall reimburse to the Vendor the amount so recovered less all reasonable costs
and expenses (including any Tax liability) of the recovery but including in
addition any interest or repayment supplement paid by the Inland Revenue or HM
Customs & Excise and the Purchaser shall and shall procure that the Group shall
use all reasonable endeavours to enforce any rights to make any such recovery
from any third parties subject to the Purchaser and the Group being indemnified
and secured to their reasonable satisfaction by the Vendor against all losses,
liabilities, costs and expenses properly and reasonably incurred in connection
with the enforcement of such rights.
5.10.1 Upon the Purchaser or the Group becoming aware of any claim,
action or demand ("a Claim") against the Company or any matter
("a Relevant Matter") likely to give rise to any of these in
respect of the Warranties
<PAGE> 15
or the Deed of Covenant, then provided that the Purchaser's
claim against the Vendor shall not be prejudiced the
Purchaser shall:
5.10.1.1 as quickly as reasonably possible, notify the
Vendor by written notice as soon as it is
reasonably clear to the Purchaser that the
Vendor is or may become liable under the
Warranties or the Deed of Covenant and in the
case of a matter relating to Taxation provide
reasonably sufficient details of such claim,
details of the due date for any payment and the
time limits for any appeal, as soon as possible
and in any event not more than 14 days after the
Purchaser or the Group becomes aware of such
claim;
5.10.1.2 at the request of the Vendor, allow the Vendor
to take the sole conduct of such actions as the
Vendor may deem reasonably appropriate in
connection with any such Claim in the name of
the appropriate Group company and in that
connection the Group and the Purchaser shall
give or cause to be given to the Vendor all such
assistance as he may reasonably require in
avoiding, disputing,
<PAGE> 16
resisting, settling, compromising, defending or appealing
any such Claim; and
5.10.1.3 take all reasonable action to mitigate any loss suffered
by it or any member of the Group of which a Claim could
be made under the Warranties;
5.10.1.4 give such information to the Vendor and his professional
advisers as the Vendor may reasonably request for the
purpose of the Vendor exercising his entitlement as
specified in sub-clause 5.10.1.2 provided that the Vendor
and his professional advisers shall keep all such
information confidential save only as may be required for
the purposes of such claim;
5.10.1.5 save where the Purchaser is of the reasonable opinion
that its or the Group's position with regard to such
Claim may be prejudiced make no admission of liability,
agreement, settlement or compromise with any third party
in relation to any such Claim without the prior written
consent of the Vendor (such consent not to be
unreasonably withheld or delayed).
5.10.2.1 The Purchaser and the Group shall not be obliged to
comply with sub-clauses 5.10.1.2 to 5.10.1.5 above
unless within 14 days of any notice given to him pursuant
to sub-clause 5.10.1.1 the Vendor shall indemnify and
secure the Purchaser and the Group (to their reasonable
satisfaction) against all losses, liabilities, costs and
expenses that the Purchaser and the Group may reasonably
and properly incur thereby PROVIDED THAT if the Vendor
does not request the Purchaser to take any action within
14 days as aforesaid, or the Purchaser shall not be
indemnified or secured at any time as provided in this
sub-clause, the Purchaser shall be free to take such
action in relation to the claim as it in its discretion
shall think fit;
5.10.2.2 The Vendor shall procure that the Purchaser is promptly
sent copies of all written communications or notified in
writing as to the substance of all oral communications
pertaining to any Claim or any Relevant Matter;
5.10.2.3 The Vendor shall, in conducting any action in connection
with any Claim, promptly consult with the Purchaser on
any matter which is relevant to it; and
5.10.2.4 the Vendor shall conduct all Claims with due diligence
and without neglecting his duties under the Service
Agreement and shall engage professional advisers approved
by the Purchaser for the purposes of any such Claim.
5.11 The Purchaser hereby agrees that it has not been induced to enter
into this Agreement on the basis of any warranties, representations or
undertakings other than the Warranties and the Deed of Covenant.
<PAGE> 17
5.12 No claims under the Warranties shall be made against the Vendor:
5.12.1 to the extent that the breach giving rise to a possible
Claim occurs or is increased by reason of any voluntary
act or omission on the part of the Purchaser which occurs
after the date of this Agreement other than in the
ordinary course of business or by reason of any matter
which would not have arisen but for the coming into force
of any legislation not in force at the date of this
Agreement or the withdrawal of any relief, allowance or
concession available at the date of this Agreement
(whether or not such legislation or withdrawal purports
to be effective retrospectively in whole or in part) or
as a result of any increase in any rate of taxation or by
reason of any change occurring after the date of this
Agreement in Inland Revenue practice or by reason of any
change occurring after the date of this Agreement in any
principle of common law (whether or not any of the
aforegoing purports to be effective retrospectively in
whole or in part);
5.12.2 to the extent that a member of the enlarged Group is
entitled to claim indemnity against any loss or damage
suffered by a member of the enlarged Group arising out of
a breach giving rise to a Claim, under the terms of any
insurance policy in force on the date of the loss less
the amount of any increased premium payable by reference
to such claim;
5.12.3 to the extent that provision or reserve has been made in
the Accounts in respect of the matter to which such
liability relates;
5.12.4 to the extent that the breach giving rise to a possible
Claim arises as a result of any change in the basis of
accounting or tax computation of any member of the Group
after the date of this Agreement;
5.12.5 based upon a liability which is contingent only unless
and until such contingent liability becomes an actual
liability and is due and payable.
5.13 The Vendor shall not be liable in respect of any breach of any Warranty
and if and to the extent that the loss occasioned thereby has been recovered
under the Deed of Covenant and vice versa.
5.14 Notwithstanding anything expressed or implied in this Agreement to the
contrary, any payment by the Vendor pursuant to a Claim shall be treated for all
purposes by the parties as a reduction in the Consideration and Clause 3 shall
be modified accordingly.
5.15 The Purchaser shall have no right (whether before or after Completion)
to rescind
<PAGE> 18
this Agreement under this Agreement or under the provisions of the
Misrepresentation Act 1967 or the Unfair Contract Terms Act 1977.
5.16 Claims under this Agreement or the Deed of Covenant by the Purchaser
shall only be capable of being made once in respect of the same subject matter,
so that, for the avoidance of doubt Asia may not recover for losses recovered by
Europe and vice versa.
5.17 The Purchaser hereby warrants to the Vendor as to the accuracy of the
Purchaser's Representations.
6. CONTINUING OBLIGATIONS
6.1 The Vendor covenants with the Purchaser (for themselves and as trustee
for the enlarged Group) that he will not either directly or indirectly whether
on his own account or in conjunction with or on behalf of any other person,
whether as principal, partner, shareholder, employer, employee, agent or
otherwise howsoever in any individual, fiduciary or representative capacity:-
6.1.1 during the Restricted Period:-
6.1.1.1 canvass or solicit or entice away or
attempt to canvass or solicit or entice
away from any Group Company the custom of
any Customer for the purposes of carrying
out any Restricted Business in competition
with any Group Company;
6.1.1.2 contract with or work for any Customer for
the purpose of carrying out any Restricted
Business or supplying Restricted Goods
and/or Services in competition with any
Group Company;
6.1.1.3 by reference to sub-clauses 6.1.1.1 and
6.1.1.2 above approach any Customer for
such purpose or authorise or assist the
taking of such actions by any other
person;
6.1.1.4 induce or attempt to induce any Discounter
or party contracting with any Relevant
Company to cease to supply or to restrict
or vary the terms of supply or contract
terms to or with any of the Group
Companies or any Licensee or any Customer
where such cessation, restriction or
variation will be or is likely to be
detrimental to the business of any Group
Company;
<PAGE> 19
6.1.1.5 supply Restricted Goods and/or Services to
any Customer in competition with the
Company or any Group Company;
6.1.2 during the Restricted Period:-
6.1.2.1 solicit or entice away or attempt to
solicit or entice away any person defined
in sub-clause 6.1.2.3 below or authorise
the taking of any such actions by any
other person;
6.1.2.2 offer employment to or employ or enter
into partnership or association with or
retain the services whether as agent
consultant or otherwise of any person
defined in sub-clause 6.1.2.3 below;
6.1.2.3 sub-clauses 6.1.2.1 and 6.1.2.2 above
refer to any person who at any time during
the period of 6 months preceding
Completion was a director or employee
earning in excess of (pound)25,000 per
annum (other than secretarial clerical
office junior or part-time) of the Company
or of any Group Company;
6.1.3 during the Restricted Period:-
6.1.3.1 solicit or entice away or attempt to
solicit or entice away any Licensee or
Joint Venture Partner or authorise the
taking of any such action by any other
person where the effect or likely effect
of a breach of the provisions of this
sub-clause will be or is likely to be
detrimental to the business of any Group
Company;
6.1.3.2 offer to contract with any Licensee or
Joint Venture Partner under circumstances
where such party is likely either to cease
to deal with any Group Company or to seek
to vary the terms of its contract with any
Group Company, where such variation will
be or is likely to be detrimental to the
business of any Group Company;
6.1.4 without prejudice to the rights of any Group Company in
the Intellectual Property Rights for a period of two
years from Completion or ceasing to be employed by or
render services to any Group Company whichever is the
later be Materially Interested in any Person providing
Restricted Goods and/or Services within the Territory in
competition with the
<PAGE> 20
Company or any Company or Licensee or Joint Venture
Partner or otherwise work or engage or be involved in any
capacity in the Restricted Business in competition with
any or Licensee or Joint Venture Partner Company in the
Territory;
6.1.5 without prejudice to 6.1.4 above for a period of five
years from Completion or ceasing to be employed by or
render services to any Group Company and save on behalf
of any company in the enlarged Group for any reason
whatsoever be engaged interested or concerned whether
directly or indirectly and whether as partner agent
consultant employee share or debenture holder in any
aspect of the Restricted Business in the Territory using
a name or trading style in which any part of the name or
names or trading names or styles of any of the companies
in the enlarged Group occurs and will not knowingly
during such period lend his support directly or
indirectly to any such business using such name or
trading name or style.
6.2 The Vendor hereby covenants with the Purchaser and with the remainder
of the enlarged Group that he will not at any time hereinafter divulge or
communicate to any person other than in confidence to officers or employees of
the enlarged Group whose province it is to know the same or on the instructions
of the Purchaser and other than information to the extent that the same is in
the public domain any trade secret or other confidential information relating or
belonging to the Company or any member of the enlarged Group including but not
limited to any information of a confidential nature relating to clients client
lists or client requirements price lists or pricing structures marketing and
information business plans financial information plans and forecasts know how
methods or processes used reports or research or any information which has been
given to the Company or any company in the enlarged Group in confidence by
clients or other persons and he shall use all reasonable endeavours to prevent
the publication or disclosure of any confidential information concerning such
matters provided that this clause shall not prevent any disclosure required by a
Recognised Investment Exchange,a court of law or pursuant to any actual or
contemplated legal proceedings.
6.3 Each of the obligations contained in each sub-clause of this Clause 8
shall be construed as separate and severable obligations.
<PAGE> 21
6.4 While the restrictions set out herein and the definitions of
"Customer", "Restricted Business", "Restricted Goods and/or Services" "Joint
Venture Partner", "Licensee" and "Discounter" are considered by the parties to
be reasonable in all the circumstances it is agreed that if any one or more of
such restrictions or definitions shall either taken by itself or themselves
together be adjudged to go beyond what is reasonable in all the circumstances
for the protection of the legitimate interests of the Company or the Group but
would be adjudged reasonable if any particular restriction or restrictions or
definition were deleted or if any part or parts of the wording thereof were
deleted then the restrictions and definitions set out herein shall apply with
such deletions restrictions or limitations as the case may be.
7. WAIVERS AND VARIATIONS
7.1 No waiver or variation of any provision of this Agreement shall be
duly made or deemed to have been duly made unless in writing and signed by all
parties (or by a duly authorised officer or director on behalf of a party) to
this Agreement.
7.2 The failure by any party to insist on any occasion upon the
performance of any term condition or provision of this Agreement shall not
thereby act as a waiver of such breach or an acceptance of any variation.
8. FURTHER ASSURANCE
8.1 The Vendor shall procure the convening of such meetings and the
giving or passing of such waivers and resolutions and shall do or procure all
such other acts and things as shall be necessary under the Companies Act 1985 or
the Articles of Association of the Company or otherwise to give effect to the
provisions of this Agreement.
8.2 The Vendor shall render to each company in the enlarged Group such
assistance as it may require in connection with its negotiations and dealings
with each of the Licencees and Joint Venture Partners and will when requested do
all such things and sign all such documents as may be required to give effect to
the terms of each of the Licence Agreements and the Joint Venture Agreements.
8.3 The Vendor undertakes that he will not knowingly do or permit
anything to be done which may endanger the Intellectual Property Rights anywhere
in the world or so far as it is within his power assist or allow others to do
so.
<PAGE> 22
8.4 The Vendor shall render to the Purchaser and to each company in
the enlarged Group all reasonable assistance (including but not limited to
evidence of user) in order to assist the Purchaser and each company in the
enlarged Group to defend, protect and procure the registration of and enjoy the
full benefit of the Intellectual Property Rights.
8.5 The Vendor shall immediately notify the Purchaser of all
infringements or imitators of the Intellectual Property Rights anywhere in the
world which come to his attention or any attempts to challenge the enlarged
Group's rights to use any of the Intellectual Property Rights anywhere in the
world, and to resist any action or claim or proceedings brought against any
Company in the enlarged Group in connection with the Intellectual Property
Rights. The Vendor agrees to provide such co-operation in the prosecution of any
action which the Purchaser in its reasonable discretion consider appropriate
including the provision of evidence. The Purchaser shall have the conduct of any
such action and pay all legal expenses and costs which may arise from the
joining of the Vendor as a party.
9. GENERAL
9.1 Non-Merger All provisions of this Agreement shall (so far as they
are capable of being performed or observed) continue in full force and effect
notwithstanding Completion.
9.2 Announcements No announcement or information concerning this
Agreement shall be made or issued by any of the parties hereto except in agreed
form provided that nothing in this sub-clause shall prevent the Purchaser from
making such announcement or sending such circular as the rules of any Recognised
Investment Exchange or any other statutory or regulatory body may require.
9.3 Notices
9.3.1 Any notice demand proceedings or other communication
to be given made or served hereunder or by reference
hereto shall be in writing and:-
9.3.1.1 sent by first class prepaid or registered
post; or
9.3.1.2 delivered personally; or
9.3.1.3 transmitted by facsimile
to the party or parties to be served at the addresses
stated herein or at
<PAGE> 23
such other address within the United Kingdom from
time to time notified in writing by or on behalf of
any such party to the other parties or in the case of
the Vendor at the offices of the Vendor's Solicitors
marked with reference 79/408 and in the case of the
Purchaser at the offices of the Purchaser's
Solicitors marked with reference TJW/TR240.009;
9.3.2 Any such notice demand proceedings or other
communication given made or served pursuant to
sub-clause 11.3.1 above shall be deemed to have been
received and effectively served:-
9.3.2.1 upon the day of delivery or transmission if
delivered personally or transmitted by
facsimile before the end of a Business Day;
or
9.3.2.2 on the next following Business Day if sent by
first class prepaid or registered post or if
transmitted by facsimile or delivered
personally after the end of a Business Day or
on any other day not being a Business Day.
9.3.3 For the purposes of this sub-clause 11.3 references
to a Business Day shall be deemed to commence at 9.00
am and terminate at 6.00 pm.
9.3.4 In proving service it shall be sufficient to prove
that personal delivery was made or that the envelope
containing such notice was properly addressed and
posted as a first class pre-paid or registered letter
or that the facsimile transmission was duly
transmitted to the addressee.
9.4 Entire Agreement
This Agreement (together with the documents referred to herein) constitutes the
whole agreement between the parties hereto in relation to the transactions
referred to herein and supersedes any previous agreement between the parties in
relation to such transactions.
9.5 Restrictions
No provisions of this Agreement or any agreement or arrangement of which it
forms part by virtue of which this Agreement or any agreement or arrangement is
subject to registration under the Restrictive Trade Practices Acts 1976 and 1977
shall take effect until the day after particulars of this Agreement or any
agreement or arrangement of which it forms part (as the case may be) have been
furnished to the Director General of Fair Trading pursuant to Section 24 of the
Restrictive Trade Practices Act 1976.
<PAGE> 24
9.6 Costs
Each party shall bear its own costs and expenses in relation to the preparation
negotiation execution and carrying into effect of this Agreement and any matters
provided for hereunder.
9.7 Enforceability
The illegality of any part of this Agreement or of any agreement or arrangement
of which it forms part shall not affect the legality or validity of the
remainder of the same.
9.8 Successors
The rights and obligations of the Vendor under this Agreement shall enure for
the benefit of and be enforceable against and binding upon his personal
representatives and estates.
9.9 Jurisdiction
This Agreement shall be governed by and construed and interpreted in accordance
with English law and the parties agree to submit to the jurisdiction of the High
Court of Justice in England in relation to any claim or dispute which may arise
hereunder and hereby agree for the purpose of Order 10, Rule 3 of the Rules of
the Supreme Court of England (or any modification or re-enactment thereof) and
in any proceedings in any other jurisdiction that any process may be served on
any of them in the manner therein provided.
AS WITNESS this Agreement has been executed the day and year first before
written.
<PAGE> 25
SCHEDULE 1
DETAILS OF THE VENDOR
(1)
(2)
Name and address No. of Shares held
C. E. C. Radbone 500,000
19 Calonne Road
London SW19 5HH
<PAGE> 26
SCHEDULE 2
DETAILS OF THE COMPANY
COUNTDOWN HOLDINGS LIMITED
Registered number: 2741762
Registered office: 42 Doughty Street
London WC1N 2LY
Date of incorporation: 21 August 1992
Place of incorporation: England and Wales
Authorised share capital: (pound)500,000
Issued share capital: (pound)500,000
Registered shareholder: C.E.C. Radbone
19 Calonne Road
London SW19 5HH
Directors: C.E.C. Radbone
(As above)
Secretary: A. Withers
31 Sea Road
Milford-on-Sea
Hants SO41 0PH
<PAGE> 27
SCHEDULE 3
DETAILS OF THE SUBSIDIARIES
COUNTDOWN PLC
Registered number: 986149
Registered office: 42 Doughty Street, London WC1N 2LY
Date of incorporation: 4/8/1970
Place of incorporation: England & Wales
Authorised share capital: (pound)250,000
Issued share capital: (pound)150,000
Registered shareholders:
C E C Radbone 1 Ordinary Share
Countdown Holdings Limited 1,000 Deferred Ordinary Shares
148,999 Ordinary Shares
Director: C.E.C. Radbone
Secretary: Adrian Withers
<PAGE> 28
SCHEDULE 4
PART 1
ENGLISH PREMISES
Unit 11 Steele Road London NW10 registered with freehold title at H M Land
Registry under title number NGL 553119.
Leasehold premises at Unit 1 Hurlingham Business Park London SW6 held pursuant
to a lease dated 12 July 1995 made between Countdown Plc Self Administered
Scheme and Countdown Plc.
PART II
IRISH PREMISES
Leasehold premises at Third floor, 39 Fitzwilliam Street Dublin 2 held pursuant
to an agreement dated 1 October 1994 made between Balmore Properties Limited and
Countdown Plc.
<PAGE> 29
SCHEDULE 5
WARRANTIES
1. INTERPRETATION
1.1 References in this Schedule to "the Company" shall wherever the
context so admits extend to and include each and every other member of the Group
and accordingly each Warranty when given in relation to the Company shall be
deemed to have been given in addition in relation to each other member of the
Group.
2. INFORMATION
2.1 The information contained in the Disclosure Letter is true and
accurate and complete in all respects and is not misleading.
2.2 The information contained in Schedules 1 to 4 is true and accurate
and complete in all respects.
2.3 The Vendor has disclosed full and accurate details of the Company's
liabilities in respect of RSVP Publishing Limited ("RSVP") and the Company has
not agreed to and is under no obligation to lend RSVP further monies.
2.4 RSVP is a dormant company and the Vendor has disclosed full and
accurate details of its assets and liabilities.
3. ACCOUNTS
3.1 The Accounts have been prepared in accordance with the historic
cost convention and generally accepted accounting practice in England and Wales
and comply with the requirements of the Companies Act 1985 and other relevant
statutes and all current and relevant SSAPs and FRSs and have been prepared on
consistently applied bases and principles and give a true and fair view of the
state of affairs and financial position of the Company for the financial year
ended on the Accounts Date.
3.2 The Accounts make proper provision for all known liabilities and
proper provision or reserve or notes (as appropriate in accordance with good
accounting practice)
<PAGE> 30
for all bad and doubtful debts, all actual, disputed or deferred liabilities
whether liquidated or unliquidated and all capital commitments as at the
Accounts Date.
3.3 Proper provision or reserve (as appropriate) has been made in the
Accounts for all taxation (including for the avoidance of doubt deferred tax)
for which the Company is or may become liable or accountable (whether primarily
or otherwise) as a result or in consequence of any income, profits or gains
earned, accrued or received or deemed to have been or treated as earned, accrued
or received for taxation purposes on or before the Accounts Date and for all
transactions, acts and omissions on the part of the Company or any one or more
or all of its employees, directors, shareholders and agents at any time on or
before the Accounts Date including, without limitation, distributions made down
to the Accounts Date or provided for in the Accounts.
3.4 None of the audited accounts of the Company for the five preceding
accounting periods were qualified by the auditors.
3.5 The profits and losses of the Company shown by the Accounts and by
the audited accounts of the Company for the three preceding accounting periods
and the trend of profits and losses thereby shown have not (except as therein
disclosed) been affected to a material extent by any non-recurring, exceptional,
extraordinary or short-term item (including, but not limited to, any pension
contribution holiday or any rental or other outgoing at below market rates)
which has rendered such profits or losses unusually high or low.
3.6 All books of account and other accounting records of the Company
have been kept on a consistent basis, are in its possession, made up to date in
all material respects and contain the information required by law and generally
accepted accounting principles.
4. POST BALANCE SHEET EVENTS
4.1 The Company has since the Accounts Date carried on its business in
the ordinary and usual course without any interruption or alteration in the
nature, scope or manner of the business and under its own name and has not
(other than in the ordinary course of business) parted with any of its assets.
<PAGE> 31
4.2 The business of the Company has not since the Accounts Date been
materially and adversely affected by the loss of any client or customer or
source or employee or employees or by any abnormal factor not likewise affecting
similar businesses and there has been no material change in the turnover,
financial, contractual or trading position of the Company.
4.3 Since the Accounts Date no change has been made in the basis of
remuneration of any directors agents or employees of the Company and the Company
has not made or paid any compensation (whether in money or otherwise) to any
director officer or employee of the Company by way of compensation for loss of
office termination of employment unfair or wrongful dismissal redundancy or
otherwise howsoever nor has agreed so to do.
4.4 Other than in the ordinary course of business the Company has not
since the Accounts Date assumed or incurred any material liabilities (including
contingent liabilities).
4.5 The Company has not since the Accounts Date made or agreed to make
any donation for political or charitable purposes nor made or agreed to make any
covenant to such effect.
4.6 Since the Accounts Date the Company has not acquired or agreed to
acquire any asset for a consideration which is materially higher than market
value at the time of acquisition and has not disposed of or agreed to dispose of
any asset for a consideration which is materially lower than market value or
book value,whichever is the higher, at the time of disposal.
4.7 Since the Accounts Date there have been no unusual increases or
decreases in stock levels.
4.8 Since the Accounts Date no distribution of capital or income has
been declared, made or paid in respect of any share in the capital of the
Company.
4.9 The retained loss for the year ended 31 August 1996 as will be
shown by the audited consolidated profit and loss account of Countdown Holdings
Limited for the year ended 31 August 1996 will not be more than (pound)296,000
the net assets as will be shown in the audited consolidated balance sheet of
Countdown Holdings Limited as at 31 August
<PAGE> 32
1996 will not be less than (pound)161,000 excluding any revaluation reserve.
5. ASSETS
5.1 The Company is the absolute and beneficial owner of and has good
and marketable title to the assets referred to in the Accounts (which comprise
all the assets of the Company other than the Properties) all of which are held
free from all liens, charges, options, pledges and encumbrances (or any
agreement to grant such) and are within the sole possession or control of the
Company.
5.2 There are no subsisting leasing, lease purchase, hire purchase or
rental agreements nor any credit sale agreement or like agreement or arrangement
affecting any of the assets.
5.3 Maintenance contracts for the maintenance by outside or specialist
contractors of all assets of the Company which it is normal or prudent to have
so maintained (or the Company is required to have so maintained) including,
without limitation, all plant and machinery (including fixed plant and
machinery), vehicles and office equipment used by the Company in connection with
its business are in full force and effect.
5.4 All items referred to in paragraph 5.3 above and any others used by
the Company in the course of its business are in good repair and condition, have
been regularly maintained and are in satisfactory working order and so far as
the Vendor is aware none is dangerous, inefficient or obsolete.
5.5 The plant register kept by the Company a copy of which is annexed
to the Disclosure Letter sets out a complete and accurate record of the plant
and machinery, vehicles and equipment owned or used by it.
5.6 The stock of packaging materials and finished goods now held by the
Company is not excessive and is adequate in relation to the current trading
requirements of the business of the Company and none of the stock is obsolete,
slow moving, unusable, unmarketable or inappropriate or of limited value in
relation to the current business of the Company and the stock is in good and
marketable condition so far as the Vendor is aware and is capable of being sold
by the Company in the ordinary course of its business in the time period within
which the Company could reasonably be expected to sell such stock,
<PAGE> 33
based on the rate of turnover for the lines of products comprised within such
stock for the year ended on the Accounts Date, in accordance with its current
price list without rebate, discount or allowances to a purchaser.
5.7 The Company has not purchased or acquired or agreed to purchase or
acquire any stock, goods or materials on terms that property in the same does
not pass until full payment is made or all indebtedness discharged.
5.8 The Company is not the holder or beneficial owner of nor has agreed
to acquire any share or loan capital of any company or corporation (whether
incorporated in the United Kingdom or elsewhere) other than the Subsidiaries nor
is it nor has it agreed to become a member of any partnership, joint venture,
consortium or unincorporated company or association nor has the Company any
branch or permanent establishment (as that expression is defined in the
respective double taxation relief orders current at the date of this Agreement)
or any substantial assets outside the United Kingdom.
6. COMPANY BOOKS/LEGAL REQUIREMENTS/MEETINGS
6.1 The Company is validly incorporated with limited liability in
England and has power and is entitled and duly qualified to carry on business in
all jurisdictions in which its present business is now carried on.
6.2 The statutory books and minute books are duly entered up and
contain proper, accurate and complete records of all matters required to be
dealt with therein.
6.3 All the records, registers and books of the Company and all deeds
and documents relating to the property and assets of the Company are in the
possession of or under the control of the Company.
6.4 A true and complete copy of each of the Memorandum and Articles of
Association of the Company together with all resolutions required to be annexed
to the same and referred to in Section 380 Companies Act 1985 is annexed to the
Disclosure Letter and sets out in full the rights and restrictions attaching to
the share capital of the Company.
6.5 The Company has not received any notice, application or request for
rectification of its register of members or any other record, register or book
and there is
<PAGE> 34
no reason why and no facts or circumstances which would be likely to give rise
to any reason why any such application or request might be made.
6.6 Since the Accounts Date there has been no resolution of or
agreement or arrangement entered into between the members or any class of
members of the Company.
6.7 The Company has properly and punctually made all returns which it
is required to make to the Registrar of Companies, to any other governmental or
regulatory body and to any local authority.
6.8 Due compliance has been made with all the provisions of the
Companies Act and other legal requirements, in connection with the formation of
the Company, the allotment, issue, purchase and redemption of shares, debentures
and other securities in the Company, the reduction of the authorised and issued
share capital of the Company, any amendment to the memorandum or articles of
association of the Company and the passing of resolutions and the payment of
dividends by the Company.
6.9 The Company has at all times conducted its business intra vires,
has not entered into any transaction ultra vires the Company or outside of the
authority or power of the directors of the Company and is not in breach of the
provisions of the Articles of Association.
7. LICENCES AND GRANTS
7.1 All approvals, authorities, recognitions, permissions, consents,
licences and permits (whether accorded by industry or statutory or municipal
authorities or otherwise) whether in the United Kingdom or elsewhere relating or
applicable to the Company or necessary or desirable for the due and effective
operation of its business as it is presently carried on have been obtained and
all such approvals, authorities, recognitions, permissions, consents, licences
and permits are valid and subsisting and so far as the Vendor is aware there is
no reason why any of the foregoing has or might become liable to be suspended,
cancelled, revoked, forfeited or withdrawn.
7.2 The Company has not applied for, or received, any grant, subsidy or
financial assistance from any government department or agency or any local or
other authority, whether under the Industry Acts, or a regional development
grant, or temporary employment subsidy or otherwise.
<PAGE> 35
7.3 The Company has not done, or omitted to do, anything which could
result in any such grant, subsidy or payment received or receivable by it
becoming repayable or being withdrawn or withheld.
8. ENVIRONMENTAL
8.1 So far as the Vendor is aware the Company has not engaged in or
permitted any operations or activities in, upon, or under the Premises or any
portion thereof involving the handling, manufacture, treatment, storage, use,
generation, recycling, release, discharge, refining, dumping or disposal of any
Hazardous Materials under, in or about the Premises or has transported any
Hazardous Materials to, from or across the Premises or has any knowledge of any
Hazardous Materials migrating or threatening to migrate from any other
properties onto, into or beneath the Premises or any portion thereof.
8.2 So far as the Vendor is aware the Company has complied in all
respects with all applicable Environmental Laws.
8.3 The Company has not received any claim, notice or other written
communication concerning or containing any alleged non-compliance or
contravention of Environmental Laws or claim, notice or other communication
alleging or concerning alleged liability for damages in connection with the
Company's use or occupation of the Premises.
8.4 So far as the Vendor is aware the Company has all registrations,
permits, authorisations, licences and consents required to be issued by any
relevant authority on account of any or all of its activities on the Premises
and/or in relation to the business of the Company as it is now carried on in
relation to Environmental Matters and is in full compliance with the terms and
conditions of such registrations, permits, authorisations, licences and
consents.
9. COMMITMENTS BORROWINGS AND BANK ACCOUNTS
9.1 The Company does not have any loan capital (including term loans)
outstanding or created but unissued and has not agreed to create or issue any
loan capital.
9.2 The Company has not made any loan or quasi-loan contrary to the
Companies Act 1985.
<PAGE> 36
9.3 There are no debts owing to the Company other than ordinary trade
debts and the Company has not factored any of its debts and no such debts are
overdue by more than three months or have been released on terms that the debtor
pays less than the full book value of such debts or have been written off or
have proved to any extent to be irrecoverable in a court of law or as a result
of the debtor's insolvency or are subject to any counter-claim.
9.4 There is no bank or deposit account for the Company apart from the
accounts specified in the Disclosure Letter and the balances on such accounts as
at a date not more than seven days before the date of this Agreement are
disclosed in the Disclosure Letter. Since such date there have been no payments
out of the account except for routine payments in the ordinary course of
business.
9.5 The total amount borrowed by the Company from its bankers does not
exceed the respective overdraft facilities and the Company is not in breach of
the terms of any other loan facilities and the total amount borrowed by the
Company does not exceed any limitation on borrowings contained in the Articles
of Association nor in any debenture or loan stock deed or in any other document
or arrangement binding on it. Full and accurate details of all overdrafts, loans
or other financial facilities outstanding or available to the Company, all
mortgages, charges, guarantees or indemnities granted by the Company or by which
the Company is under an actual prospective or contingent liability are contained
in the Disclosure Letter so far as the Vendor is aware and the Company has not
done or omitted to do anything whereby the continuance of any such facilities in
full force and effect might be affected or prejudiced.
9.6 The Company has not repaid or become liable to repay any loan or
indebtedness in advance of its stated maturity date.
9.7 Other than as recorded in the books of account of the Company there
are no unpresented cheques drawn by the Company and the Company has not accepted
or endorsed any cheque, bill of exchange, promissory note or other instrument
(whether maturing prior to, at or after Completion).
9.8 No person (other than a Group Company) has given any guarantee of
or security for any indebtedness or other liability of the Company whether
actual prospective or contingent and no charge in favour of the Company is void
or voidable for want of registration.
9.9 Other than in the ordinary course of business there is no liability
for
<PAGE> 37
industrial training levy or for any other like statutory levy or charge.
9.10 There is no power of attorney or other authority (express or
implied) which is still outstanding or effective to or in favour of any person,
firm or company to enter into any contract or commitment or to do anything on
behalf of the Company (other than the ostensible or implied authority of
directors or of employees arising in the ordinary course of the business of the
Company and in the ordinary course of their duties).
9.11 There is not outstanding any indebtedness or other liability
(actual or contingent) owing by or to the Company to or from any member of the
Group or any officer of or other person connected with any member of the Group.
10. CONTRACTS
10.1 The Company is not a party to or subject to any agreement,
transaction, obligation, commitment, understanding, arrangement, practice or
liability which:--
10.1.1 is an agency, distributorship, joint venture,
marketing, manufacturing, licensing or partnership
agreement or arrangement; or
10.1.2 is of an unusual or abnormal nature or is otherwise
than on arm's length terms or is outside the ordinary
and proper course of the business of the Company; or
10.1.3 contains any warranties indemnities (other than as
implied below) or representations by the Company or
continuing restrictions on the activities of the
Company; or
10.1.4 is incapable of complete performance in accordance
with its terms within six months after the date on
which it was entered into or undertaken; or
10.1.5 is incapable of termination in accordance with its
terms and without compensation by the Company on 60
days' notice or less; or
10.1.6 so far as the Vendor is aware, is likely to result in
a loss to the Company on completion of performance;
or
10.1.7 cannot readily be fulfilled or performed by the
Company on time and in accordance with its terms
without undue or unusual expenditure of money or
<PAGE> 38
effort; or
10.1.8 involves payment by the Company by reference to
fluctuations in the Index of Retail Prices or any
currency or other index; or
10.1.9 involves or is likely to involve the provision of
goods or services the aggregate sales value of which
will represent in excess of 10% per cent of turnover
for the relevant preceding financial year of the
Company; or
10.1.10 so far as the Vendor is aware suffers from any
invalidity or in respect of which there are grounds
for determination, recision, avoidance or repudiation
by any other party; or
10.1.11 so far as the Vendor is aware has been or is required
to be registered in accordance with or is invalidated
(in whole or in part) by the Restrictive Trade
Practices Acts 1976 and 1977 or which contravenes or
is invalidated (in whole or in part) by the
provisions of the Resale Prices Act 1976 or which by
virtue of its terms or any practice carried on in
connection therewith is a consumer trade practice
(within the meaning of the Fair Trading Act 1973) or
is liable to be referred to the Consumer Protection
Advisory Committee under Part II of that Act or is or
is likely to constitute an anti-competitive practice
within the meaning of the Competition Act 1980 or
contravenes the Trade Description Acts 1968 and 1972
or Part XI of the Fair Trading Act 1973 or the
Consumer Credit Act 1974; or
10.1.12 so far as the Vendor is aware infringes or requires
registration under Articles 85 or 86 of the Treaty
establishing the European Economic Community or any
Regulation or Directive issued thereunder; or
10.1.13 pursuant to its terms can be terminated or varied as
a result of any change in the control of the Company.
10.2 The Company has not given any guarantee or warranty or made any
representation in respect of the supply of goods or services save for any
guarantee or warranty implied by law.
<PAGE> 39
10.3 So far as the Vendor is aware no matter has arisen in respect of
any contracts to which the Company is a party which is or could be construed as
a potential or actual breach by any party thereto.
10.4 There have been no material or written complaints within the last
two years made by any party thereto in respect of any aspect of any of the
contracts with clients customers or suppliers nor with regard to the performance
of any agents or sub-contractors appointed by the Company to perform any part of
any such contract.
10.5 All current clients and customers have promptly paid or procured
the payment of any remuneration due to the Company and no material client,
customer or supplier of or to the Company has during the last twelve months
ceased or indicated in writing an intention to cease (or to reduce the volume
of) trading with the Company nor to the knowledge of the Vendor is likely to do
so whether as a result of this Agreement or otherwise.
10.6 No current client or customer has sought to negotiate in writing a
reduction or material change in the terms of remuneration applicable to the
arrangements it has for the supply of goods or services by the Company.
10.7 Neither more than 5 per cent of the aggregate amount of all
purchases nor more than 5 per cent of the aggregate amount of all sales by or
services rendered by the Company are obtained from the same supplier or provided
to the same client or customer (including associated clients or customers) nor
so far as the Vendor is aware is any material source of supply to or from the
Company in jeopardy.
10.8 There is not outstanding any contract or arrangement to which the
Company is a party and to which any director of the Company and/or any associate
thereof is or has been interested whether directly or indirectly.
10.9 No person is entitled to receive from the Company any introduction
fee brokerage or other commission in connection with the introduction of or
continuation of any business to or with the Company.
<PAGE> 40
11. EMPLOYMENT TERMS
11.1 The only directors and the secretary of the Company are the
persons whose names appear as such in this Agreement and there is no person who
is or has been a shadow director (within the meaning of Section 471 Companies
Act 1985) of the Company.
11.2 The particulars of the identities and material terms and
conditions of employment of all the employees and officers of the Company
(including, without limitation, profit sharing or commission or share
participation or discretionary or contractual bonus arrangements whether legally
binding or not and other emoluments and benefits) have been fully and accurately
disclosed in the Disclosure Letter and there are no negotiations for any
increase in the emoluments or benefits of any such person(s) which are current.
11.3 The Company has duly complied with the conditions for registration
of any profit related pay schemes operated by it (and which are fully detailed
in the Disclosure Letter) in accordance with the provisions of Sections 173-177
(inclusive) ICTA and Schedule 8 of that Act and has duly and promptly remitted
all documentation and information required by Section 181 of that Act and the
Company has received no notice of and so far as the Vendor is aware there are
not likely to arise any grounds for cancellation of any profit related pay
schemes registered by it and the Company has not received any notice and so far
as the Vendor is aware there are no circumstances in which recovery of tax is
likely to be made under Section 179 that Act.
11.4 There are no contracts of employment whether written or oral with
directors, officers or employees of the Company which are not determinable
without giving rise to any claim for damages or compensation (other than a
statutory claim for redundancy or unfair dismissal) by notice exceeding three
months.
11.5 There are no contracts of employment to which any relevant
requirements of Section 319 Companies Act 1985 have not been fulfilled.
11.6 No employee of the Company has given notice terminating his
contract of employment or is under notice of dismissal and so far as the Vendor
is aware there is no reason to believe that after Completion (whether by reason
of an existing agreement arrangement or otherwise) or as a result of the
implementation of this Agreement any
<PAGE> 41
officer or senior employee of the Company may leave and there are no present
circumstances which are likely to give rise to any dispute between the Company
or any of its employees, officers, former employees or former officers or their
respective estates.
11.7 No amount due to or in respect of any employee or former employee
of the Company is in arrear and unpaid other than his salary for the month
current at the date of this Agreement
11.8 So far as the Vendor is aware each of the senior employees and
officers of the Company who will be engaged in the business of the Company
following Completion is generally in a good state of health and is not suffering
from any illness or condition which does or might affect his work.
11.9 The Company has at all relevant times complied with all its
obligations under statute and otherwise concerning the health and safety at work
of its employees and there are no claims at the date of this Agreement by any
employee or third party in respect of any accident or injury which are not fully
covered by insurance.
11.10 There is no dispute between the Company and any trade union or
other organisation formed for a similar purpose existing or pending and there is
no collective bargaining agreement or other arrangement (whether binding or not)
to which the Company is a party.
12. PENSION SCHEMES
12.1 Other than pursuant to the money purchase scheme with Standard
Life ("the Stanplan Pension Scheme") and the Self Administered Scheme
established by Countdown Plc under a trust deed dated 1 August 1992 ("the Self
Administered Scheme") Schemes there are no obligations (whether legally or
morally binding or established by custom) to pay or provide or contribute to any
pensions or retirement, death, sickness, disability, accident or other like
benefits or super-annuation allowances gratuities or "relevant benefits" within
the meaning of Section 612 ICTA to or in respect of officers or employees (or
like obligations to or in respect of past officers or employees).
12.2 The Disclosure Letter contains full and accurate written
particulars of the Stanplan Pension Scheme and the Self Administered Scheme
and:--
12.2.1 accurate, current and complete copies of all
documents
<PAGE> 42
constituting or relating to both of the Schemes
including all announcements, explanatory literature
and the like;
12.2.2 a complete copy of the latest audited accounts for
the Self Administered Scheme;
12.2.3 details of any material change in investment policy
under the Self Administered Scheme since the date to
which the latest accounts were made up.
12.3 Contributions due from the Company under both of the Schemes from
any employee of the Company and proving due under the Schemes have been paid.
12.4 There is no litigation nor are there any arbitration proceedings
currently pending or threatened by or against the trustees of the Schemes and
there are no facts likely to give rise to any such litigation or arbitration
proceedings.
12.5 The Schemes comply with and have always been administered in
accordance with all applicable laws regulations and requirements.
13. CREDIT COMMITMENTS
13.1 The Company is not a party to any contract for rent lease hire
purchase or purchase on conditional sale or credit sale or by instalment of any
chattels or to any bill of sale and is not in breach of any such contract or
bill so disclosed.
14. LITIGATION AND OBSERVANCE OF LAW
14.1 Neither the Company or the Vendor or any director of the Company
is at present engaged whether as plaintiff or defendant or otherwise in any
legal action, arbitration proceedings or hearing before any court statutory or
governmental body department board or agency (other than as plaintiffs in the
collection of debts not exceeding [(pound)1,000] in aggregate and arising in the
ordinary course of business) nor so far as the Vendor is aware are there any
facts or circumstances which may give rise to any such legal action or
arbitration proceedings being commenced by or against any such person.
14.2 Neither the Company nor any of its directors and officers are
being prosecuted for any criminal offence, no such prosecutions are pending and
so far as the Vendor is aware there are no facts or circumstances which may lead
to any such action proceeding hearing or prosecution.
<PAGE> 43
14.3 No litigation or arbitration proceedings commenced by or against
the Company or which have been threatened to be so commenced have been settled
or compromised during the period of five years ending on the date of this
Agreement in respect of amounts exceeding in aggregate (pound)1,000.
14.4 The Company is not subject to any order or judgement given by any
court, governmental agency or other regulatory body and is not a party to any
undertaking or assurance given to any court, governmental agency or other
regulatory body which is still in force nor so far as the Vendor is aware are
there any facts or circumstances which may result in the Company becoming
subject to any such order or judgement or being required to be a party to any
such undertaking or assurance.
14.5 There have been no investigations of, or disciplinary proceedings
made against, the Company or any of its officers or employees, no such
investigations or disciplinary proceedings are currently pending and so far as
the Vendor is aware, there are no facts or circumstances which may give rise to
such investigations or proceedings.
14.6 There is no dispute with any revenue, governmental, local
authority or other official department in the United Kingdom or elsewhere in
relation to the affairs of the Company and so far as the Vendor is aware there
are no facts which may give rise to any such dispute.
14.7 No order has been made or petition presented or resolution passed
for the winding up of the Company nor has any distress execution or other
process been levied in respect of the Company nor is any unfulfilled or
unsatisfied judgment or court order outstanding against the Company.
14.8 So far as the Vendor is aware neither the Company nor any of its
officers or employees during the course of their respective duties have
committed or omitted to do any act or thing the commission or omission of which
is or might be in contravention of any law of the United Kingdom or of any
foreign country in which the Company conducts business and which gives rise to a
liability on the part of the Company and neither the Company nor any of its
officers or employees have received notice of any such contravention.
14.9 The Company has conducted and is conducting its business in
accordance with all applicable laws and regulations including the relevant codes
relating to its industry
<PAGE> 44
and the Company has not received notice of any contravention thereof.
14.10 Neither the Vendor nor the Company has at any time received any
process, notice, communication or any formal or informal request for information
with reference to any actual or proposed agreement, arrangement, concerted
practice, trading policy or practice, course of conduct or activity of the
Company from the Director General of Fair Trading, the Monopolies and Mergers
Commission, the Secretary of State for Trade and Industry, the Commission of the
European Communities, the Restrictive Practices Court or from any other person
or body (wherever situated) whose task it is to investigate, report or decide
upon matters relating to monopolies, mergers or anti-competitive agreements or
practices nor has the Company or anything done by the Company been the subject
of any report, decision, order, judgement or injunction made, taken or obtained
by any of such persons or bodies, nor has the Company given or been the subject
of any undertakings or assurances given (directly or indirectly) to any such
persons or bodies.
15. SHARE CAPITAL
15.1 The Shares constitute the whole of the issued and allotted equity
share capital of the Company and are fully paid or credited as fully paid.
15.2 There is no Security Interest in favour of any other person on
over or affecting the Shares and there is no agreement or arrangement to give or
create any Security Interest on, over or affecting the Shares and no claim has
been made by any person claiming to be entitled to any of the foregoing.
15.3 There are no agreements or arrangements in force which call (now
or in the future) for the issue or transfer of or accord to any person the right
(whether conditional or otherwise) to call for the issue or transfer of any
shares, stock, debentures, debenture stock, loan notes (whether or not secured)
bonds or other securities of the Company (including any option or right of
pre-emption or conversion).
15.4 The Company has not repaid or redeemed or agreed to repay any
shares, stock debentures, debenture stock, loan notes (whether or not secured),
bonds or other securities of the Company.
15.5 The Company has never purchased or agreed or committed itself to
purchase any of its own shares.
<PAGE> 45
16. INSURANCE
16.1 The Premises and all other assets and undertakings of the Company
of an insurable nature are and have at all material times been insured under
policies arranged by the Company to their full replacement or reinstatement
value against fire and all other risks normally insured against by companies
carrying on similar businesses or having an interest in property of a similar
nature and the Company has at all material times and is fully insured against
public liability, loss of profit, professional negligence or other liability,
employer's and occupier's liability, accident and third party risk and such
other risks normally covered by insurance by such companies and all such
insurances are currently in full force and effect and so far as the Vendor is
aware nothing has been done or omitted to be done which would make any such
policy of insurance void or voidable or which is likely to result in an increase
in premium.
16.2 There are no claims outstanding under any of the said policies and
so far as the Vendor is aware no circumstances exist which are or may be likely
to give rise to such claims and so far as the Vendor is aware there are no
circumstances which are or may be likely to lead to any claim under any policy
of insurance taken out by the Company.
17. LAND
17.1 The Certificates of Title are true and accurate in all material
respects and the information provided by the Vendor for the purposes of the
Certificates of Title is true and accurate in all material respects.
17.2 The Premises comprises all the land and buildings owned or held by
the Company or used or occupied by the Company.
17.3 Title to the Premises is constituted by documents of title which
are in the possession and under the control of the Company properly stamped and
duly registered where appropriate.
17.4 The Company has not entered into either the lease of or a licence
to assign any leasehold property as a guarantor of the lessee's covenants
contained in any such document in respect of which the Company has a continuing
commitment as guarantor.
17.5 The Company has not surrendered or contracted to surrender the
lease of
<PAGE> 46
any leasehold property to the reversioner thereof.
17.6 The Company has not at any time been the tenant of any leasehold
property other than the Premises and there are no circumstances which have led
or might lead to any claims being made against the Company in its capacity as a
former tenant.
17.7 Since the Accounts Date the Company has not acquired or disposed
of or agreed to acquire or dispose of any land or buildings or any interest
therein.
17.8 The Vendor has no reason to believe that the buildings and other
structures on the English Premises are not in good and substantial repair and
fit for the purposes for which they are used.
17.9 The Vendor has no reason to believe that any building or structure
on the Premises has at any time been affected by structural damage or electrical
defects or by timber infestation.
17.10 The Vendor has no reason to believe that any of the Premises have
been constructed on land which may be contaminated.
18. INTELLECTUAL PROPERTY RIGHTS
18.1 The Company is the sole and absolute beneficial and legal owner of
the Intellectual Property Rights, in each case free from all liens, charges,
restrictions and encumbrances and the Company's rights to the Intellectual
Property Rights are in full force and effect.
18.2 So far as the Vendor is aware none of the processes, products or
activities of the Company infringes the intellectual property rights of any
third party in any manner whatsoever whether by means of passing off or
endorsement or otherwise or involves the unlicensed use of information
confidential to any person or gives rise to a liability for any royalty or
similar payment nor has any third party made a claim in respect of the same or
given notice alleging the same.
18.3 There are no Intellectual Property Rights of whatsoever nature
which are capable of registration in the name of or of being vested in the
Company as owner or part owner which has been so registered or vested and the
Company has all the rights in
<PAGE> 47
intellectual property of any nature including, without limitation, patents,
copyrights, design rights and analogous rights which are necessary or desirable
to enable the business of the Company fully and effectively to be carried on as
it has been carried on up to the date of this Agreement.
18.4 So far as the Vendor is aware neither the Company nor any other
person has done or omitted to do any act matter or thing in respect of any of
the Intellectual Property Rights or in respect of any agreement relating to any
Intellectual Property Rights which impinges upon the validity or enforceability
of the same or upon the right of the Company to use the same in relation to the
business of the Company nor are there any outstanding obligations of the Company
or of any other person whether as to payment or otherwise which if left
outstanding would so impinge.
18.5 The Company has not granted and is not obliged to grant any
licences of, nor are there any subsisting agreements under which the Company has
granted to any person, any right or interest under or in connection with the
Intellectual Property Rights.
18.6 None of the Intellectual Property rights are the subject of any
claim, opposition, assertion, infringement, attack, right, action or other
restriction or arrangement of whatsoever nature which does impinge upon the
validity, enforceability or ownership of the same by the Company or the use of
the same (or any part of the same) howsoever by the Company and so far as the
Vendor is aware there are no grounds facts or circumstances that may give rise
to such.
18.7 The Company has ensured that the moral rights in any material in
which the Intellectual Property rights subsist have either been waived in
writing by the creator of that material or subjected by binding written contract
to the sole and exclusive control of the Company.
18.8 So far as the Vendor is aware the Company has not supplied or
developed anything which could not be made sold dealt in used or reproduced by
any person without infringing any Intellectual Property Rights owned or held by
any third party.
18.9 All confidential information and trade secrets of whatsoever
nature belonging to the Company are confidential and have not been disclosed to
any person in whole or in part (other than to employees of the Company in
circumstances where the confidentiality of such confidential information and
trade secrets have been drawn to their
<PAGE> 48
attention and steps taken to preserve such confidentiality and there is no claim
that can be or has been made by any person alleging that any information has
been disclosed to the company in circumstances amounting to a breach of
confidence.
18.10 No substantial part of the business of the Company is carried on
subject to any agreement or arrangement which significantly restricts the fields
in which the Company carries on business.
19. ADVERSE TERMS OF OTHER INSTRUMENTS
19.1 The execution, delivery and performance of this Agreement will
not:--
19.1.1 result in a violation of or be in conflict with or
constitute a default by the Company under any
agreement, instrument or arrangement to which the
Vendor or the Company is a party or by which the
Vendor or the Company is bound;
19.1.2 result in a breach of any order, judgment or decree
of any court or governmental agency to which the
Vendor or the Company is a party or by which the
Vendor or the Company is bound; or
19.1.3 result in a breach of the rules or requirements of
any professional body or trade or industrial
association of which the Company or the Vendor is a
member or by which the Company or the Vendor is
bound.
20. CAPACITY AND INTERESTS OF THE VENDOR
20.1 The Vendor has good and marketable title to the Shares and has the
absolute unfettered right and authority to sell and transfer (or procure the
sale and transfer of) the Shares without the consent of any third party to the
Purchaser on the terms and subject to the conditions of this Agreement and has
full power and authority to enter into and perform its obligations under this
Agreement and ancillary documents.
20.2 Neither the Vendor nor any person connected with the Vendor has
any interest, direct or indirect, in any business which competes or has competed
or is in the future likely to compete with any business now carried on by the
Company or intends to acquire any such interest.
<PAGE> 49
20.3 Neither the Vendor nor person connected with any Vendor is
entitled to any claim of any nature against the Company, any of its officers,
employees, principal customers or suppliers and the Vendor has not assigned to
any third party the benefit of any such claim to which he was previously
entitled.
21. INSOLVENCY
21.1 No receiver or administrative receiver has been appointed of the
whole or any part of the assets or undertaking of the Company.
21.2 No administration order has been made in relation to the Company
and no petition for such an order has been presented.
21.3 No proposal for a voluntary arrangement between the Company and
its creditors (or any class of them) has been made to or is in the contemplation
of the Company.
21.4 No petition has been presented, no order has been made and no
resolution has been passed for the winding-up of the Company.
21.5 The Company has not stopped payment to its creditors nor is it
insolvent or unable to pay its debts as and when they fall due.
21.6 No unsatisfied judgement is outstanding against the Company.
22. TITLE DEEDS
22.1 All documents which in any way affect the right, title or interest
of the Company in or to any of its property, undertakings or assets and all
agreements to which the Company is a party are in the possession of the Company
and are properly stamped.
23. TAXATION
GENERAL
23.1 All necessary information notices returns particulars claims for
reliefs and allowances and computations have been properly and duly submitted by
the Company to the Inland Revenue and any other relevant taxation or excise
authorities (whether of the
<PAGE> 50
United Kingdom or elsewhere) and such information notices returns particulars
claims and computations are true and accurate and are not the subject of any
question or dispute nor so far as the Vendor is aware are likely to become the
subject of any question or dispute with the Inland Revenue or any other such
taxation or excise authority.
23.2 So far as the Vendor is aware the Company has not taken any action
which has had, or might have, the result of altering or prejudicing for any
period commencing after the Accounts Date any arrangement or agreement which it
has with any taxation authorities.
23.3 The Disclosure Letter contains full details of all claims,
notifications, disclaimers or elections assumed to have been made for the
purposes of the provisions or reserves for taxation included in the Accounts
that have not actually been made at the date hereof.
23.4 All taxation of any nature whatsoever whether of the United
Kingdom or elsewhere for which the Company is liable (insofar as such taxation
ought to have been paid) has been paid.
23.5 The Company is and always has been resident in the United Kingdom
for the purposes of taxation.
23.6 The Company has properly operated the PAYE system in accordance
with Chapter V Part V ICTA and regulations made by the Board of the Inland
Revenue thereunder.
23.7 The Company has duly deducted all amounts from any payments from
which tax falls to be deducted at source and the Company has duly paid or
accounted for such amounts to the Inland Revenue or any other relevant taxation
or excise authorities (whether of the United Kingdom or elsewhere).
23.8 The Company has not within the six years prior to the date hereof
paid or become liable to pay any penalty or interest charged by virtue of the
provisions of the Taxes Management Act 1970 or similar provisions in other
countries.
23.9 The Company has not within the last six years been the subject of
an investigation, discovery or access order by or involving any taxation
authority and so far
<PAGE> 51
as the Vendor is aware there are no circumstances existing which make it likely
that an investigation, discovery or order will be made.
23.10 The Company has not received a notice under Section 23 ICTA
(Collection from lessees and agents) which remains outstanding.
23.11 The Company has no outstanding entitlement:-
23.11.1 to make any claim (including a supplementary claim)
for relief;
23.11.2 to make any election for one type of relief on one
basis system or method of taxation as opposed to
another;
23.11.3 to make an appeal (including a further appeal)
against an assessment to taxation;
23.11.4 to make any application for the postponement of
taxation.
23.12 The Company has not since the Accounts Date paid remuneration
which is not fully deductible in computing the Company's profits for taxation
purposes.
DISTRIBUTIONS
23.13 No distribution within Section 418 ICTA (payments etc to
participators and associates) has been made by the Company within the last seven
years.
23.14 The Disclosure Letter contains full particulars of all elections
in force in relation the Company under Section 247 ICTA (Dividends etc paid by
one member of a group to another) which were made within the last six years and
no assessment may be made under that section on the Company in respect of
advance corporation tax which ought to have been paid or income tax which ought
to have been deducted.
23.15 The Company has not at any time capitalised or agreed or resolved
to capitalise any profits or reserves and has not issued any security (as
defined by Section 254(1) ICTA) remaining in issue at the date of this Agreement
so that the interest thereon falls to be treated as a distribution under Section
209 (d) or (e) ICTA (Matters to be treated as distributions).
<PAGE> 52
23.16 The Company has not repaid agreed to pay or redeemed or agreed to
redeem any of its shares or capitalised or agreed to capitalise in the form of
redeemable shares or debentures any profits or reserves.
23.17 The Company has not received nor is it entitled to receive any
capital distribution to which the provisions of Section 189 TCGA (Corporation
tax attributable to chargeable gains: recovery from shareholder) could apply.
BASE COSTS AND CAPITAL ALLOWANCES
23.18 If each of the capital assets of the Company were disposed of for
a consideration equal to the book value of that asset in or adopted for the
purpose of the Accounts no liability to corporation tax on chargeable gains or
balancing charge under the CAA would arise and for the purpose of determining
the liability to corporation tax on chargeable gains there shall be disregarded
any relief and allowances available to the Company other than amounts falling to
be deducted under Section 38 TCGA.
23.19 Since the Accounts Date the Company has not done or omitted to do
or agreed to do or permitted to be done anything as a result of which there may
be made a balancing charge under Section 4 CAA (balancing allowances and
balancing charges) or any disposal value may be brought into account under
Section 24 CAA (writing-down allowances and balancing adjustments) or there may
be any recovery of excess relief under Section 46 and 47 CAA (recovery of excess
relief) or Section 42 CAA (allowances for assets leased outside the UK).
DEMERGER
23.20 The Company has neither been engaged in nor been a party to any
of the transactions set out in Sections 213 to 218 ICTA (demergers) nor made or
received a chargeable payment as defined therein.
<PAGE> 53
FOREIGN BUSINESS
23.21 The Company has not transferred a trade or business carried on by
it outside the United Kingdom through a branch or agency to a company not
resident in the United Kingdom in circumstances such that a chargeable gain may
be deemed to arise at a date after such transfer under Section 140 TCGA
(postponement of charge on transfer of assets to non-resident company)
23.22 No notice of the making of a direction under Section 747 ICTA
(imputation of chargeable profits and creditable tax of controlled foreign
companies) has been received by the Company and no circumstances exist which
would entitle the Inland Revenue to make such a direction and to apportion any
profits of a controlled foreign company to the Company pursuant to Section 752
ICTA (apportionment of chargeable profits and creditable tax).
DEPRECIATORY TRANSACTIONS
23.23 No allowable loss which may accrue on the disposal by the Company
of any assets is likely to be reduced by reason of the provisions of Sections
176 (transaction in a group) and 177 (dividend stripping) TCGA and no chargeable
gain or allowable loss arising on such a disposal is likely to be adjusted
pursuant to the provisions of Section 30 TCGA (value shifting: further
provisions).
SALE AND LEASE-BACK
23.24 The Company has not entered into any transaction to which the
provisions of Section 780 ICTA (land sold and leased back: taxation of
consideration received) have been or could applied.
UNREMITTABLE INCOME
23.25 The Company has not made any claim nor is entitled to make any
claim under Section 279(1)-(6) TCGA (foreign assets: delayed remittances) or
under Section 584 ICTA (relief for unremittable income).
ACQUISITIONS FROM GROUP MEMBERS
23.26 The Company has not made any claims under Sections 247, 152, 153
and 154 TCGA (rollover relief on compulsory acquisition and replacement of
business assets)
<PAGE> 54
or Section 175 TCGA (replacement of business assets by members of a group)
insofar as they would affect the chargeable gain or allowable loss which would
arise on a disposal after the Accounts Date by the Company of any of its assets.
23.27 In relation to Section 179 TCGA (Company ceasing to be member of
a group) the Company has not at any time prior to the date hereof ceased to be a
member of a group of companies and the execution or Completion of this Agreement
will not result in any profit or gain being deemed to accrue to the Company.
23.28 The Company has not nor is it entitled to make a claim under
Sections 24 (assets lost or destroyed or whose value become negligible) or
Section 48 TCGA (consideration due after the time of disposal).
TRANSACTIONS NOT AT ARM'S LENGTH
23.29 The Company has neither disposed of nor acquired any asset in
such circumstances that the provisions of Section 17 TCGA (disposals and
acquisitions treated as made at market value) could apply thereto.
23.30 The Company has not entered into any such transaction as is
referred to in Sections 770 and 773 ICTA (Sales etc at undervalue or overvalue)
in such circumstances as to expose the Company to a liability to tax on profits
adjusted pursuant to those Sections.
GIFTS INVOLVING GROUP COMPANIES
23.31 The Company has not held nor holds shares in a company (not being
a member of the Group) which has made any such transfer as is referred to in
Section 125 TCGA (shares in close company: transferring assets at an undervalue)
and has not received any assets by way of gift as mentioned in Section 282 TGCA
(gifts: recovery from donee).
CLOSE COMPANIES
23.32 The Company is and has always been a close company within the
meaning of Section 414 ICTA (close companies).
23.33 The Group Companies together comprise a group for the purposes of
Sections 402 and 413 ICTA (Group relief) and there is nothing in Sections 413
(Group relief: qualifications for entitlement) and 410 (Group relief: effect of
arrangements for
<PAGE> 55
transfer of a company to another group etc) which precludes any company from
being regarded as a member of such group.
23.34 Since the Accounts Date The Company has made no loan or advance
to any of its directors nor has the Company made any such loan or advance to any
of its participators as are taxable pursuant to Sections 419 and 420 ICTA (Loans
to participators etc) and has not released or written off the whole or part of
the debt in respect of any such loan or advance in the manner provided for in
Sections 421 and 422 ICTA (Effect of release etc: of debt in respect of loan by
controlled companies).
GROUP RELIEF
23.35 The Company has at no time within the last six years surrendered
or agreed to surrender or claim and will not prior to Completion surrender or
claim or agree to surrender or claim any amount by way of group relief under the
provisions of Chapter IV of Part X ICTA (Group relief) and has never made or
received or agreed to make or receive and will not prior to Completion make or
receive or agree to make or receive a payment for group relief within the
meaning of Section 402(6) ICTA.
23.36 The Company has at no time within the last six years surrendered
or claimed or agreed to surrender or claim and will not prior to Completion
surrender or claim or agree to surrender or claim any amount of advance
corporation tax under the provisions of Section 240 ICTA (setting of company's
surplus advance corporation tax against subsidiary's liability) and has never
made or received or agreed to make or receive and will not prior to Completion
make or agree to make or receive a payment in respect of the surrender of the
benefit of an amount of Advance Corporation Tax within the meaning of Section
240(8) ICTA.
23.37 The Company is not liable to make or entitled to receive a
payment for group relief or for the surrender of advance corporation tax
otherwise than to or from another member of the Group.
23.38 The Company has not made or received a payment for group relief
or for the surrender of advance corporation tax which may be liable to be
refunded in whole or in part.
<PAGE> 56
23.39 All claims for group relief were when made valid and have been or
will be allowed by way of relief from corporation tax.
23.40 No tax is or may become payable by the Company pursuant to
Section 190 TCGA (Tax on company recoverable from other members of group) in
respect of any chargeable gain which accrued or will accrue prior to Completion
and the Company will at no time within the two years ending at Completion have
transferred any assets (other than trading stock) to any company which at the
time of disposal was a member of the same group (as defined in Section 170
TCGA).
TAX AVOIDANCE
23.41 The Company is not and has not been party to or otherwise
connected with any transaction to which any of the following provisions could
apply:-
23.41.1 Sections 729 to 745 (inclusive) ICTA (other
provisions about securities and transfer of assets
abroad);
23.41.2 Section 774 ICTA (Transactions between dealing
company and associated company);
23.41.3 Section 775 ICTA (Sale by individual of income
derived from his personal activities);
23.41.4 Section 116 ICTA (Partnerships involving companies:
effect of arrangements for transferring relief);
23.41.5 Section 399 ICTA (Dealings in commodity futures:
withdrawal of loss relief);
23.41.6 Sections 29 and 30 TCGA (Value shifting and value
shifting: further provisions).
23.42 The Company has not entered into any transaction 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:-
23.42.1 Section 139 TCGA (Company reconstruction
amalgamation: transfer of assets);
23.42.2 Sections 703 to 709 (inclusive) ICTA (Cancellation of
tax advantage from certain transactions in
securities);
23.42.3 Section 776 ICTA (Artificial transactions in land);
23.42.4 Sections 135 to 138 (inclusive) TCGA (Company
reconstructions and
<PAGE> 57
amalgamations).
23.43 The Company has not since the Accounts Date engaged in any
transaction in respect of which there may be substituted for any purpose of
Taxation a different consideration for the actual consideration given or
received by the Company.
CHARGEABLE GAINS
23.44 The Company is not owed a debt (not being a debt on a security)
upon the disposal or satisfaction of which a liability to corporation tax on
chargeable gains will arise by reason of the provisions of Section 251 TCGA
(Debts).
23.45 No part of the consideration given by the Company for a new holding
of shares (within the meaning of Section 126 TCGA (Application of Sections 127
to 131) will be disregarded by virtue of the proviso to Sections 128(1) and (2)
TCGA (Consideration given or received by holder).
VALUE ADDED TAX
23.46 The Company is registered for value added tax purposes and:-
23.46.1 has complied in all material respects with all
statutory requirements orders provisions directions
or conditions relating to value added tax;
23.46.2 maintains complete correct and up-to-date records for
the purposes of value added tax legislation;
23.46.3 is not in arrears with any payment or returns under
value added tax legislation nor liable to any
abnormal or non-routine payment or any forfeiture or
penalty or to the operation of any penal provision
thereunder;
23.46.4 has not been required by the Commissioners of Customs
and Excise to give security;
23.46.5 has not for the purposes of value added tax
legislation applied for treatment as a member of a
group including any company other than the member of
the Group;
23.46.6 is not and has not agreed to become an agent manager
or factor for the purposes of Section 47 Value Added
Taxes Act 1994 (Agents etc) of any person who is not
resident in the United Kingdom.
<PAGE> 58
23.47 The Disclosure Letter contains full particulars of any claim for
bad debt relief made in the last five years or which may be made by the Company
under Section 36 Value Added Taxes Act 1994 (Refund of tax in cases of bad
debts) or Section 11 Finance Act 1990 (bad debts).
23.48 No document has left the possession of the Company which if
improperly used by a third party would lead to any liability on the part of the
Company to pay any amount of value added tax under paragraph 5 Schedule 11 Value
Added Taxes Act 1994 (Recovery of tax etc) and which but for such use would not
have been payable by the Company.
INHERITANCE TAX
23.49 The Company has made no gifts to any participator such as would
give rise to any liability for inheritance or capital transfer tax.
23.50 None of the Company's assets are subject to the charge imposed by
Section 237 Inheritance Tax Act 1984.
23.51 Within the last six years no transfer of value (as defined in
Sections 2 and 3 Inheritance Tax Act 1984 (Chargeable transfers and exempt
transfers: transfers of value) as amended by paragraph 1 of Schedule 19 Finance
Act 1986 has at any time been made by or to the Company.
23.52 There are not in existence any circumstances whereby any such
power as is mentioned in Sections 211 and 212 Inheritance Tax Act 1984 (Burden
of tax on death power to raise tax) could be exercised in relation to any shares
securities or other assets of the Company or could be so exercised but for
Section 204 of that Act (limitation of liability).
STAMP DUTY
23.53 All documents in the enforcement of which the Company may be
interested have been duly stamped.
<PAGE> 59
SCHEDULE 6
DEED OF COVENANT
DATED 199
-------------------------
(1) C.E.C. RADBONE
(2) TRANSMEDIA EUROPE, INC. AND
TRANSMEDIA ASIA PACIFIC, INC.
----------------
DEED OF COVENANT
----------------
LEWIS SILKIN
WINDSOR HOUSE
50 VICTORIA STREET
LONDON SW1H 0NW
TELEPHONE: 0171 227 8000
REFERENCE: TJW.TR240.009
<PAGE> 60
THIS DEED is made the day of 199
BETWEEN:-
(1) [C E C ] RADBONE of Flat 2, 47 Lansdowne Road, London,
W11 ("the Covenantor"); and
(2) TRANSMEDIA EUROPE, INC. and TRANSMEDIA ASIA PACIFIC, INC.
whose registered office is at [ ] (together
the "Purchaser").
WHEREAS:-
This Deed is entered into pursuant to the provisions of an agreement ("the
Agreement") of even date made between the Covenantor and the Purchaser whereby
the Purchaser agreed to acquire the entire issued share capital of Countdown
Holdings Limited ("the Company").
NOW THIS DEED WITNESSETH as follows:-
1. INTERPRETATION
1.1 In this Deed unless the context otherwise requires:-
"CLAIM FOR TAXATION"
means any notice demand assessment letter or other document issued or
action taken by any revenue authorities wheresoever in the world whereby
the Company is or may be under a liability to Taxation;
"TAXATION"
means all forms of taxation duties charges imposts and levies of a fiscal
nature whatsoever and whenever imposed and whether of the United Kingdom
or elsewhere in the world and shall without prejudice to the generality
of that definition include income tax (including PAYE), corporation tax,
advance corporation tax, capital gains tax, inheritance tax, stamp duty,
stamp duty reserve tax, value added tax, customs and other import or
export duties and other excise duties, national insurance and social
security contributions, and all other statutory, governmental, state,
provincial, local government
<PAGE> 61
or municipal impositions duties and levies of a fiscal nature and other
similar liabilities or contributions and any interest penalty and fine in
connection therewith (whether assessed or withheld at source) but
excluding rates.
1.2 Words defined in the Agreement shall bear the same meaning in this
Deed where the context so admits.
1.3 Words importing the plural include the singular and vice versa and
words importing a gender include every gender and references to person include
bodies corporate or unincorporated.
1.4 Unless otherwise stated a reference to a Clause or sub-clause is a
reference to a clause or sub-clause of this Deed.
1.5 References to "the Company" shall extend to and include each Group
Company as the context admits.
2. COVENANT
2.1 The Covenantor hereby covenants with and undertakes to the Purchaser
to pay to the Purchaser by way of adjustment to the Consideration an amount
equal to any liability of the Company for Taxation arising from any Claim for
Taxation which has been made or may hereafter be made wholly in respect of any
act or omission other than the accrual of trading losses or other reliefs for
corporation tax purposes occurring on or before the date hereof and any costs
and expenses properly and reasonably incurred in connection with any successful
claim for made under this Deed.
2.2 For the avoidance of doubt the covenant in clause 2.1 hereof shall
extend to the following:-
2.2.1 all liabilities whether additional tax, national
insurance contributions or loss of tax relief
together with all interest and penalties attracting
or otherwise howsoever from the engagement of
persons as regional directors being treated by the
Company as self-employed being assessed by the
Inland Revenue to be and to have been employed by
<PAGE> 62
the Company;
2.2.2 all liabilities including any penalties incurred by
the Company and any of its subsidiaries in respect
of the late filing or non-filing of forms P11D;
2.2.3 all liabilities arising from the demerger of
Countdown Plc, Kensington & Chelsea Holdings Limited
and Card Protection Plan in 1992; and
2.2.4 all liabilities arising from any retrospective
claims made by H M Customs & Excise relating to the
value added tax treatment of the Group
2.3 The covenant herein given shall not be terminated by any variation of
this Deed or by any forbearance whether as to payment time performance or
otherwise whatsoever.
3. EXCLUSION
3.1 Save in the case of fraud on the part of the Covenantor the covenant
given by Clause 2 of this Deed shall not extend to any Taxation:-
3.1.1 to the extent to which provision or reserve in
respect thereof has been made or noted in the
Accounts; or
3.1.2 in respect of which provision or reserve has been
made in the Accounts which is insufficient only by
reason of increase in the applicable rates of
Taxation after the Accounts Date; or
3.1.3 for which the Company is or may become liable as a
result of transactions effected or occurring or
profits earned accrued or received by the Company in
the ordinary course of the business after the
Accounts Date; or
3.1.4 to the extent that such Taxation was discharged
(whether by payment of by the utilisation of any
relief, allowance or credit in respect of Taxation)
prior to Completion; or
3.1.5 to the extent that such Taxation arises or is
increased as a result only of any increase in rates
of Taxation or imposition of new Taxation or any
change in applicable law or practice made after
Completion; or
3.1.6 to the extent that recovery has been made in respect
of the matter giving rise to the Taxation by the
Purchaser under the Warranties; or
3.1.7 to the extent that full and fair disclosure of such
Taxation was made in
<PAGE> 63
the Agreement or the Disclosure Letter or any
document attached thereto; or
3.1.8 to the extent that such Taxation would not have
arisen but for, or is increased by, any voluntary
act, omission, transaction or arrangement of the
Purchaser or the Company other than in the ordinary
course of business after Completion; or
3.1.9 to the extent that such Taxation would not have
arisen but for, or has been increased by a
disclaimer, claim or election made or notice or
consent given after Completion by the Company
otherwise than at the request or direction of the
Covenantor under the terms of this Deed or unless it
was taken into account or assumed in computing the
provision of Taxation in the Accounts; or
3.1.10 to the extent that such Taxation would not have
arisen but for, or has been increased by a failure
or omission by the Company to make any claim,
election, surrender or disclaimer or give any notice
or consent or do any other thing after Completion
the making giving or doing of which was taken into
account or assumed in computing the provision for
Taxation (including the provision for deferred
Taxation) in the Accounts; or
3.1.11 to the extent that such Taxation is on or in respect
of prepayments received in the ordinary course of
business; or
3.1.12 to the extent that such Taxation arises from any
change in accounting or Taxation policy or practice
affecting the Company, including the method of
submission of Taxation returns, introduced or having
effect on or after Completion; or
3.1.13 to the extent that the liability is in respect of
VAT which has been charged and a tax invoice issued
but which has not yet been accounted for to H M
Customs and Excise; or
3.1.14 to the extent that the liability of the Covenantor
is increased by the Purchaser's failure to notify
the Covenantor in accordance with Clause 5.10.1 of
the Agreement; or
3.1.15 which has been recovered from a person or persons
(not being a Group Company) other than the
Covenantor
PROVIDED THAT the exclusions in sub-clauses 3.1.1, 3.1.3, 3.1.7 and 3.1.11 above
shall
<PAGE> 64
not apply in respect of the covenant contained in clause 2.2 hereof.
3.2 The provisions of Clauses 5.7, 5.8, 5.9 and 5.10 of the Agreement
shall have effect as if expressly incorporated into this Deed.
3.3 The above exclusions shall also apply to a claim for a breach of any
of the Warranties relating to Taxation.
3.4 For the avoidance of doubt, to the extent that payment is made
pursuant to this Deed to Europe the Covenantor shall have no liability to make
payment to Asia and to the extent payment is made to Asia the Covenantor shall
have no liability to make payment to Europe.
4. PAYMENT
4.1 In the event that there is a change in law or Inland Revenue practice
after 23 August 1996 in relation to payments to be paid to the Purchaser by the
Covenantor hereunder giving rise to the Purchaser having a Taxation liability in
respect of such payment all sums payable by the Covenantor to the Purchaser
hereunder shall be paid (insofar as is lawful) free and clear of all deductions
and withholdings whatsoever and in the event that a deduction or withholding is
lawfully made the Covenantor shall other than in the case of interest under
clause 5 pay such greater sum which after any lawful deduction or withholding
therefrom results in a net payment equal to the amount due hereunder.
4.2 In the event that there is a change in law or Inland Revenue practice
after 23 August 1996 in relation to payments to be paid to the Purchaser by the
Covenantor hereunder giving rise to the Purchaser having a Taxation liability
other than in the case of interest under clause 5 then such further amount shall
be paid by the Covenantor so as to secure in so far as is possible that the net
amount resulting after such liability to Taxation and where appropriate any
deduction or withholding such as is referred to in sub-clause 4.1 or 7.1 hereof
is equal to the amount due hereunder.
<PAGE> 65
5. DATES FOR AND QUANTUM OF PAYMENTS
5.1 This Clause shall apply solely for determining the date upon which
any payments shall be made by the Covenantor pursuant to this Deed and (where
expressly provided) the amounts thereof.
5.2 The Covenantor shall make payment to the Purchaser or at the
direction of the Purchaser to the Company to the extent that the Company
discharges a Claim for Taxation:-
5.2.1 in respect of a liability to make a payment of
Taxation on the latest date for payment of that
Taxation and the Covenantor shall not be liable to
make any payment unless and until the liability for
Taxation of the Company has been finally determined
within the meaning of the Taxes Management Act 1970
or if later 5 working days following the date on
which the Purchaser notifies the Covenantor of the
liability to make the payment;
5.2.2 in respect of costs and expenses, seven days after
service on the Covenantor by the Purchaser of a
notice containing details of the costs and expenses.
5.3 If any amount is not paid as provided in the foregoing provisions of
this Clause 5 the Covenantor shall pay to the Company interest on such amount
calculated on a daily basis at the rate of 2% per annum above the base rate of
National Westminster Bank plc for the time being in force from the relevant date
specified in this Clause 5 until and including the date of actual payment (after
as well as before judgment).
6. SAVINGS
6.1 If the Taxation which has resulted in the payment by the Covenantor
hereunder becoming due shall give rise to a corresponding saving ("the Saving")
of Taxation for the Company or the Purchaser then the amount of the Saving shall
be set off against any payment then due from the Covenantor under this Deed or
(to the extent that it is not so set off) shall be paid by the Purchaser
(subject to a maximum amount equal to the amount which the Covenantor has
already paid under this Deed less the amount which the
<PAGE> 66
Purchaser has already paid under this Clause to the Covenantor within 14 working
days of the Saving being obtained.
6.2 If the Purchaser or the Company shall discover that there has been a
Saving the Purchaser shall forthwith give full details thereof to the Covenantor
and the Purchaser shall supply to the Covenantor such information as he may
reasonably require to verify the amount of the Saving.
6.3 For the purposes of Clause 6.1, a person obtains a Saving if as a
result of the Taxation which results in a claim by the Purchaser hereunder that
person is relieved in whole or in part of a liability to make some other payment
of Taxation which it would otherwise have been liable to make or obtains a right
to repayment of Taxation which would not otherwise have been available.
7. OVER PROVISION
7.1 If any provision contained in the accounts of the Company for
periods up to 31 August 1995 shall be found to be an
over-provision or excessive ("Over-provision") then the amount
of the Over-provision shall be set off against any payment due
or which may become due from the Covenantor under this Deed.
7.2 If the Company or the Purchaser shall discover that there has
been an Over-provision the Purchaser shall or shall procure
that the Company shall forthwith give full details thereof to
the Covenantor and the Purchaser shall or shall procure that the
Company shall supply to the Covenantor such information as he
may reasonably require to verify the amount of the
Over-provision.
8. TAX RETURNS
8.1 It is hereby agreed that the Covenantor shall be responsible for and
have control of the following matters:
8.1.1 the preparation of all computations and returns of
the Company relating to Taxation for all periods of
the Company ended on or before Completion;
8.1.2 the submission of such computations and returns to
the appropriate
<PAGE> 67
taxing authority and all negotiations,
correspondence and agreements with respect thereto;
and
8.1.3 the preparation and submission of all such notices,
claims or elections relating to Taxation as the
Covenantor may deem appropriate to be made by the
Company in connection with any such computations or
returns.
All reasonable professional costs incurred in connection with the above matters
shall be borne directly by the Company.
8.2 The Purchaser shall procure that the Company shall cause the said
computations, returns, notices, claims, elections and agreements to be
authorised, signed and returned to the Covenantor or his duly authorised agent
for submission to the appropriate taxing authority without amendment and without
delay (and in any event within any applicable time limited).
8.3 The Purchaser shall procure that the Company shall afford such access
to its books, accounts and records as is necessary and reasonable and shall
procure that the Company shall give the Covenantor or his duly authorised agent
all such assistance as may reasonably be required to enable the Covenantor or
the Company's auditors to prepare the returns, computations, notices, claims and
elections and conduct matters relating thereto.
8.4 In relation to the computations and returns relating to Taxation for
the period of the Company in which Completion takes place, the Purchaser shall
procure that:
8.4.1 no computations and returns are submitted to the
appropriate taxing authority unless such
computations and returns have first been given to
the Covenantor for comment not less than twenty-one
days before the date of submission;
8.4.2 the Company takes account of any reasonable comments
made by the Covenantor in relation to such
computations and returns; and
8.4.3 such computations and returns are submitted to the
appropriate taxing authority without amendment or
only with such amendments as the Covenantor shall
agree such agreement not to be unreasonably withheld
or delayed
PROVIDED THAT the Company shall not be obliged to submit any computations and
returns relating to Taxation to any taxing authority unless it is satisfied that
they are full,
<PAGE> 68
true and accurate to all material respects.
9. COVENANT BY PURCHASER
9.1 If the Company fails to pay any corporation tax liability which
becomes due and payable after the date of this Deed the Purchaser will indemnify
the Covenantor against any liability under Section 767A ICTA that may be
assessed on the Covenantor as a result PROVIDED THAT this Clause shall not apply
in respect of any Taxation which remains unpaid where the Covenantor has an
outstanding liability to make a payment to the Purchaser under this Deed or the
Agreement.
10. GENERAL
10.1 The following provisions of the Agreement shall apply to this Deed
mutatis mutandis as if the same had been set out herein save that references
therein to the Vendor his addresses and the Agreement respectively shall be
construed as references to the Covenantor, his address and this Deed:-
<TABLE>
<S> <C> <C>
10.1.1 Clause 7 Waivers and Variation;
10.1.2 Sub-clause 9.3 Notices;
10.1.3 Sub-clause 9.9 Jurisdiction.
</TABLE>
10.2 The benefit of this Deed may be assigned in whole or in part by the
Purchaser to any company in the Purchaser's Group provided that such assignment
shall not afford any third such party any greater right or claim against the
Covenantor than any right or claim the Purchaser would have and this Deed shall
be binding upon and enure for the benefit of the successors in title of each of
the parties hereto.
IN WITNESS whereof this Deed has been executed the day and year first before
written.
SIGNED AS A DEED
by [ ]
in the presence of:
EXECUTED AS A DEED
by [ ]
and signed by:-
Director
Director/Secretary
<PAGE> 69
SCHEDULE 7
SERVICE AGREEMENT
<PAGE> 70
DATED 3 APRIL 1997
-----------------------------------------------------------------
COUNTDOWN PLC
-AND-
C.E.C. RADBONE, ESQ.
-----------------------------
SERVICE AGREEMENT
-----------------------------
LEWIS SILKIN
WINDSOR HOUSE
50 VICTORIA STREET
LONDON SW1H ONW
TEL: 0171 227 8000
<PAGE> 71
THIS DEED OF AGREEMENT is made the 3rd day of April 1997
BETWEEN:
(1) Countdown Plc whose registered office is at 42 Doughty Street, London
WC1N 9IY ("the Company"); and
(2) Christopher E.C. Radbone of 19 Calonne Road, London, SW19 5HH ("the
Executive")
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS
Defined terms and phrases for the purposes of this Agreement are set out in
Schedule 1.
2. JOB TITLE
2.1 The Company shall employ the Executive and the Executive shall
serve the Company as the Managing Director.
3. JOB DESCRIPTION, DUTIES AND RESPONSIBILITIES
3.1 The Executive shall carry out such duties, exercise such
powers and responsibilities as the Company may require from
time to time provided that such duties, powers and
responsibilities are consistent with the Executive's position.
3.2 During the period of his employment with the Company, the
Executive shall:-
3.2.1 report to the Board and/or such other person(s) as
the Company shall determine from time to time;
3.2.2 comply with such lawful directions as the Company or
any Associated Company to which he shall be seconded
shall give from time to time and with such rules and
regulations concerning his employment as shall apply
from time to time;
3.2.3 carry out his duties and exercise his powers and
responsibilities faithfully, efficiently and
diligently and use his utmost endeavours to maintain,
extend, develop and promote the interests and
reputation of the Company and the Associated
Companies;
3.2.4 keep the Company fully informed of his activities and
promptly provide such information and explanations as
may be requested from time to time by the Company
regarding such activities;
3.2.5 unless incapacitated by illness or injury, devote the
whole of his working time, attention and ability to
his duties under this Deed of Agreement;
<PAGE> 72
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3.2.6 undertake such travel both outside and inside the
United Kingdom in such manner, on such occasions and
for such periods as the Company may reasonably
require for the proper performance of his duties.
3.3 Subject to any written regulations issued by the Company, the
Executive shall not without the prior consent of the Company
directly or indirectly receive or obtain any fee, gratuity,
commission, rebate, discount or other payment or benefit
whether in kind or otherwise from any Person as a consequence
of business transacted by the Company or any Associated
Company or otherwise as a result of his employment with the
Company.
3.4 The Executive shall not without the written prior approval of
the Board properly recorded by way of a Board minute:-
3.4.1 incur expenditure of an exceptional level or in
excess of such sums as may be authorised from time to
time;
3.4.2 dismiss any Key Person;
3.4.3 engage or employ a Key Person in circumstances where
such employee will receive a total annual
remuneration in excess of (pound)30,000 or such other
sum as the Board shall determine from time to time or
whose notice entitlement exceeds one month;
3.4.4 enter into on behalf of the Company or any Associated
Company any commitment, contract or arrangement
outside the scope of his normal duties or of an
unusual or onerous or long term nature or otherwise
than in the normal course of business.
4. TERM AND NOTICE
4.1 The Executive's employment with the Company under this Deed of
Agreement will commence on the date hereof.
4.2 The Executive's period of continuous employment with the
Company commenced in December 1970.
4.3 Subject to the provisions for earlier termination contained in
this Deed of Agreement, the Executive's employment shall
continue for an initial term of three years from the date
hereof and thereafter until terminated by either party giving
to the other not less than 3 months' written notice.
4.4 The Company reserves the right, at its discretion, to pay
basic salary in lieu of notice and to pay to the Executive a
sum in lieu of any of the benefits which the Executive is
contractually entitled to receive by virtue of his employment
under this Deed of Agreement during his notice period, such
sum to be equivalent to the value of providing such benefits
whether notice is given by the Company or by the Executive.
<PAGE> 73
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5. REMUNERATION
5.1 During his employment with the Company, the Company shall pay
to the Executive:-
5.1.1 a basic salary at the rate of (pound)103,054 per
annum which shall accrue from day to day and be
payable by equal monthly instalments on or around the
last working day of each month or on such other day
in accordance with the Company's accounting practices
from time to time. Payment is made on that day in
respect of the whole calendar month.
5.1.2 the Executive's basic salary shall be reviewed by the
Company on or around 1 August each year and may be
increased by the Company with effect from that date
or such other date as the Company shall determine by
such amount (if any) as the Company shall determine
at its absolute discretion (without obligation).
5.2 The Company shall be entitled to deduct from the Executive's
salary and such other monies as may be payable or reimbursable
to the Executive all sums from time to time owing or otherwise
payable from the Executive to the Company or any Associated
Company.
5.3 Any benefits provided by the Company or any Associated Company
to the Executive which are not expressly referred to in this
Deed of Agreement shall be regarded as ex gratia and made at
the absolute discretion of the Company and shall not confer
any contractual entitlement upon the Executive or any third
party.
6. HOURS OF WORK
6.1 The Executive shall normally work 40 hours per week (Monday to
Friday inclusive) together with such additional hours outside
these hours, including hours at weekends or during holidays,
as are reasonably necessary for the proper performance of the
Executive's duties. The Executive shall not be entitled to
additional remuneration for work performed outside normal
working hours.
7. PLACE OF WORK
7.1 The Executive's place of work shall initially be the Company's
premises in London but the Company may require the Executive
to work either temporarily or permanently at such location in
the United Kingdom as the Company shall require from time to
time.
8. BENEFITS AND EXPENSES
8.1 Company Car
8.1.1 The Company shall provide the Executive with a Jaguar
motor car, or another motor car of an equivalent make
and
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model commensurate with the Executive's position, for
the Executive's business and personal use. The
company car may be used by members of the Executive's
immediate family at the Company's absolute discretion
from time to time.
8.1.2 The Company shall be responsible for the costs of
maintaining, servicing, taxing and insuring the
company car.
8.1.3 The Executive shall take good care of the company car
and comply with all regulations laid down by the
Company from time to time regarding its company cars
and shall forthwith notify the Company of any
accidents involving the company car and of any
charges brought against him or other users of the
company car arising from driving offences and on the
termination of his employment the Executive shall
forthwith return the company car to the Company at
its head office or such other location as the Company
shall direct together with all keys and other
documents relating to the company car.
8.1.4 Subject to 8.1.1, the company car may be replaced
from time to time at the Company's sole discretion
with a car of equivalent value.
8.1.5 The Company may withdraw the provision of the company
car if the Executive is disqualified from driving or
otherwise fails to maintain a valid current driving
licence entitling him to drive in the United Kingdom
but in such circumstances and provided that the
company car is not subject to lease, lease purchase
or hire purchase, the Executive shall be entitled to
additional salary in lieu thereof.
8.2 Pension
8.2.1 The Company shall, subject to statutory limits,
continue to pay the sum equivalent of (pound)20,000
per annum into the Countdown Self Administered
Pension Scheme on behalf of the Executive.
8.2.2 There is a contracting out certificate in force in
relation to the Executive's employment under this
Deed of Agreement.
8.3 Benefits Schemes
8.3.1 Subject always to their terms and conditions and
rules the Executive shall be entitled to participate
at the Company's expense in the following insurance
schemes from time to time:
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8.3.1.1 the Company's private medical insurance scheme;
8.3.1.2 the Company's permanent health insurance scheme;
8.3.1.3 an annual travel insurance scheme.
8.3.1.4 a Scottish equitable life insurance policy in favour
of Countdown plc (2) Executive Retirement and Death
Benefit Scheme.
8.3.2 The Company reserves the right to amend, substitute or replace
the above schemes.
8.4 Expenses
8.4.1 The Executive shall be reimbursed all reasonable
expenses properly, wholly and exclusively incurred by
him in the proper performance of his duties under
this Deed of Agreement subject to the approval of the
Company on the production of valid receipts or such
other supporting documentary evidence as the Company
may require and compliance with the Company's then
current regulations relating to expenses.
8.4.2 Where the Company issues a company credit or charge
card to the Executive, he shall use such card only
for expenses reimbursable by the Company and shall
return and cancel the card forthwith upon the
termination of his employment.
9. HOLIDAY
9.1 The Company's holiday year shall run from 1 January to 31
December.
9.2 In addition to Bank and other public holidays but subject to
the provisions of this Clause the Executive shall be entitled
to 30 working days' holiday in each holiday year at such
time(s) as may be convenient to the Company and which right
shall accrue from day to day. Any accrued entitlement to a
part day's holiday shall be rounded down.
9.3 Save with the prior written consent of the Company, the
Executive shall not be entitled to carry forward any accrued
holiday entitlement from one year to another.
9.4 Any holiday taken shall be in accordance with the Company's
rules and regulations governing holidays from time to time.
9.5 On the termination of the Executive's employment he shall be
entitled to be paid in lieu of accrued untaken holiday on a
pro rata basis and at the rate of 1/240 of his basic annual
salary for each untaken day's
<PAGE> 76
- 6 -
accrued holiday entitlement. If on the termination of his
employment the Executive has exceeded his approved pro rata
holiday entitlement for that holiday year, the excess will be
deducted at such rate from any sums due to the Executive and
to the extent that such deduction is insufficient such excess
will become repayable by the Executive at such rate.
9.6 The Company may require the Executive to take outstanding
holiday entitlement during any period of notice.
9.7 Holiday entitlement shall only accrue during any absence due
to illness or injury at the absolute discretion (without
obligation) of the Company.
10. INCAPACITY
10.1 If the Executive shall at any time be absent from work due to
illness or injury he shall as soon as reasonably practicable
inform the Company of the reason for his absence and its
anticipated duration and shall keep the Company informed of
such matters at such intervals as the Company may reasonably
require.
10.2 If the Executive is absent from work due to illness or injury
for more than seven days (including non-working days), he
shall as soon as is reasonably practicable thereafter send to
the Company a statement of his incapacity signed by a
registered medical practitioner and shall send such further
statements at such intervals as the Company may reasonably
require (which shall not be more than once weekly) to cover
the full period of absence. On each occasion that a medical
practitioner's certificate expires and the Executive does not
anticipate returning to work, he must notify the Company as
soon as practicable.
10.3 For Statutory Sick Pay purposes, the Executive's qualifying
days shall be his normal working days, which shall be Monday
to Friday.
10.4 The Company may at its expense at any time, if the Executive
is then incapacitated, require the Executive to undergo such
medical examinations and/or tests by such doctor(s) (and other
suitable medically qualified person(s)) as shall be nominated
by the Company and the Executive authorises such doctor(s) or
other person(s) to disclose to and discuss with the Company
and/or its medical adviser(s) the results of such examinations
and/or tests provided such disclosure is restricted to matters
which could affect the Executive's employment with the
Company.
10.5 If the Executive is absent due to illness or injury, providing
that he shall have complied with the terms of this Deed of
Agreement and the Company's then current regulations relating
to incapacity he shall be paid Company Sick Pay equivalent to
his basic salary for up to 13 weeks absence in aggregate in
any period of twelve months after which sick
<PAGE> 77
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pay will be paid for such period as the Company in its
absolute discretion (without obligation) considers reasonable
in the circumstances.
10.6 Company Sick Pay payable to the Executive shall be reduced by
any Statutory Sick Pay received by the Executive and any State
or other benefits recoverable by the Executive (whether or not
recovered).
11. ASSOCIATED COMPANIES
11.1 The Company shall be entitled for such period(s) as the
Company may require from time to time to require the Executive
to hold such offices as the Company shall direct with any
Associated Company subject to the Executive's consent such
consent not to be unreasonably withheld or delayed.
12. DISCIPLINARY SICKNESS AND POOR PERFORMANCE PROCEDURE AND GRIEVANCE
PROCEDURES
12.1 There is no specific disciplinary procedure applicable to the
Executive's employment nor any specific provisions for dealing
with grievances. In the case of any grievance, the Executive
should apply to the Chairman.
12.2 In order to investigate any allegation of misconduct the
Company is entitled to suspend the Executive on full pay and
benefits for such period as the Company shall, at its absolute
discretion, determine appropriate in order to carry out a
proper investigation. During such investigation, the Executive
shall co-operate with the Company in its investigation into
the alleged misconduct.
13. TERMINATION
13.1 The Company shall be entitled to terminate the Executive's
employment summarily by notice if the Executive:-
13.1.1 is guilty of gross misconduct;
13.1.2 has committed a serious breach of a material term of
this Deed of Agreement other than a breach which
(being capable of being remedied) is fully remedied
by the Executive to the satisfaction of the Company
within a reasonable period of his being called upon
to do so;
13.1.3 has wilfully neglected or refused to discharge his
duties hereunder;
13.1.4 is grossly incompetent in the performance of his
duties;
13.1.5 acts or omits to act in such a way as likely to
prejudice the interests or reputation of the Company
or any Associated Company;
13.1.6 is convicted of any indictable offence excluding
offenses which do not affect the Executive's position
and excluding minor road traffic offenses not
resulting in imprisonment;
<PAGE> 78
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13.1.7 becomes prohibited by law or disqualified from being
a director of a company;
13.1.8 becomes of unsound mind or a patient for the purpose
of any statute relating to mental heath;
13.1.9 commits an offence relating to insider dealing or is
in breach of the Model Code for Securities
Transactions by Directors of Listed Companies or any
other rules or regulations relating to any Recognised
Investment Exchange;
13.1.10 becomes bankrupt or makes any arrangement or
composition with or for the benefit of his creditors;
13.1.11 commits any act of dishonesty relating to and
adversely affecting the reputation or business of the
Company, any Associated Company.
13.2 The Executive will have no claim against the Company for
breach of contract if his employment is terminated with
immediate effect by reason of the liquidation of the Company
for purposes of amalgamation or reconstruction provided that
he is offered employment with the reconstructed or amalgamated
company on terms no less favourable than the terms of this
Agreement.
13.3 During any period of notice, and provided that the Company
continues to pay the Executive his salary and to provide all
benefits or to pay a sum in lieu of cost to the Company of
such benefits to him to which he is contractually entitled
until the termination of his employment, then the Company
shall be entitled at its discretion:-
13.3.1 to require the Executive not to carry out his duties
or to exercise his powers or responsibilities under
this Deed of Agreement during the remaining period of
his employment (or any part of such period);
13.3.2 to require the Executive to resign immediately from
any offices he may hold in the Company or in any
Associated Company;
13.3.3 to require the Executive not to attend his place of
work or any other premises of the Company or any
Associated Company during the remaining period of his
employment (or any part of such period);
13.3.4 to require the Executive to return to the Company all
documents, computer disks and other property
(including summaries, extracts or copies) belonging
to the Company or any Associated Company or to their
clients or customers containing confidential
information;
13.3.5 to appoint one or more persons to undertake the
Executive's duties and/or responsibilities and/or to
assume the Executive's position.
<PAGE> 79
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13.4 Retirement
This Deed of Agreement shall terminate automatically on the
Executive reaching his normal retirement age (which is 65).
13.5 Obligations on Termination
On the termination of this Deed of Agreement for whatever
reason the Executive shall:
13.5.1 immediately return to the Company's offices or such
other location as the Company shall direct all
equipment, documents, credit or charge cards,
computer disks, computer software and hardware,
portable telephones, notes, specifications, Board
minutes and papers, plans, prototypes, keys, customer
or client lists, technical information and data,
reports and any other property (including copies,
summaries and excerpts) belonging to or relating to
the business of the Company or any Associated
Company, or created by the Executive in the course of
his employment by the Company, which are in the
Executive's possession or under his control;
13.5.2 at the Company's request resign as a director of and
from any other office held in the Company or any
Associated Company and the Executive having failed to
do so within twenty-one days of such request the
Company is hereby irrevocably authorised to appoint
some person to act as the Executive's attorney and in
his name and on his behalf to sign and execute any
documents and do such other acts to give effect to
this clause and the Executive agrees to ratify and
confirm all such acts done pursuant to any such power
of attorney.
13.6 The Executive will both during and at any time after the
termination of his employment under this Deed of Agreement
provide the Company or any Associated Company with such
assistance as it may require in the conduct of such
proceedings in any Court, Tribunal or other body of competent
jurisdiction as may arise in respect of which the Company any
Associated Company or its or their legal advisers believe the
Executive may be able to provide assistance provided that the
Company shall pay his reasonable out-of-pocket expenses
properly incurred in providing such assistance as they are
incurred.
14. RESTRICTIONS DURING EMPLOYMENT
14.1 The Executive shall not during his employment with the
Company, without the prior consent of the Company, be
Materially Interested in any other Person where this may
interfere, conflict or compete with the
<PAGE> 80
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interests of the Company or any Associated Company or the
efficient performance of his duties.
14.2 The Executive shall not during his employment with the
Company, Directly or Indirectly, entice away or attempt to
entice away from the Company or any Associated Company or
otherwise discourage from being employed by the Company or any
Associated Company any employee of the Company or of any
Associated Company.
15. CONFIDENTIALITY
15.1 Without prejudice to the generality of the Executive's duty of
good faith, during the term of his employment under this Deed
of Agreement the Executive shall not, other than in the proper
course of his employment, use, publish or otherwise disclose
to any other Person any information relating to the Company,
any Associated Company its or their clients, affairs, finances
or business which:-
15.1.1 the Company or any Associated Company regards or may
regard as confidential; or
15.1.2 which has been made known to the Company or any
Associated Company or its or their officers,
employees or agents in circumstances in which an
obligation of confidentiality arose.
15.2 Without prejudice to any obligations of confidence owed by the
Executive to the Company (whether by virtue of an implied
contractual duty, an equitable duty of confidence or
otherwise) the Executive shall not at any time after the
termination of the Executive's employment under this Deed of
Agreement either use, publish or otherwise disclose to any
Person any trade secrets or confidential information capable
of such protection relating to the Company or any Associated
Company its or their clients, affairs, finances or business
and which, for the avoidance of doubt, shall include, without
limitation:-
15.2.1 lists or details of the Company's or any Associated
Company's actual or potential clients;
15.2.2 details of relationships or arrangements with or
knowledge of the needs or requirements of the
Company's or any Associated Company's actual or
potential clients;
15.2.3 information supplied in confidence by clients or any
third party to which the Company or any Associated
Company owes an obligation of confidentiality;
15.2.4 lists of and details of contracts with the Company's
or any Associated Company's Discounters;
15.2.5 information of a personal or otherwise of a
confidential nature relating to fellow employees
and/or Directors of the Company;
15.2.6 details of the Company's or any Associated Company's
business methods, finances, prices or pricing
strategy,
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marketing or development plans, product development
plans or strategies;
15.2.7 the Company's or any Associated Company's know-how;
15.2.8 confidential computer software.
This list is not exhaustive.
15.3 This clause shall not apply to information which might come
into the public domain other than in consequence of the
Executive's default.
15.4 The Executive shall not without the Company's prior consent
communicate with the press, broadcasting or other media
regarding the Company, any Associated Company or any of its or
their respective clients, officers or employees.
16. INTELLECTUAL PROPERTY
16.1 The Executive agrees and acknowledges that because of the
nature of his duties and responsibilities arising from his
employment, he is under a special obligation to further the
interests of the business of the Company and of any Associated
Company. Consequently, any invention made by the Executive in
the course of his employment shall belong to the Company.
16.2 The Executive assigns to the Company (by way of assignment of
all present and future Intellectual Property Rights) all
Intellectual Property Rights that vest in the Executive in all
or any Relevant Intellectual Property and the Executive agrees
to disclose promptly to the Company any such Relevant
Intellectual Property.
16.3 The Executive agrees to waive any moral rights including any
rights conferred by Sections 77-83 of the Copyright Designs
and Patents Act 1988 he has or may have in any Relevant
Intellectual Property against the Company, any Associated
Company, its or their employees, officers or agents.
16.4 The Executive agrees, at the Company's request, to exercise
during his employment by the Company or at any time after the
Termination Date any moral rights he has or may have pursuant
to Sections 77-83 of the Copyright Designs and Patents Act
1988 or otherwise in any Relevant Intellectual Property
against such third party as the Company shall request and in
accordance with the Company's directions and the Executive
agrees not to exercise such moral rights other than in
accordance with this Clause.
16.5 The Executive agrees that he will execute such deeds and
documents and do such other acts and things as may be
necessary or desirable in the opinion of the Company to
substantiate, protect and/or maintain the Intellectual
Property Rights of the Company. The Executive
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acknowledges that, save as provided for by law, no further
remuneration or compensation other than that provided for in
this Deed of Agreement is or may become due to the Executive
in respect of the performance of his obligations under this
Clause. The assignment contained in this Clause shall not be
affected by reason of the termination of this Deed of
Agreement.
16.6 Decisions as to the substantiation, protection and/or
maintenance of any Intellectual Property Rights in any
Intellectual Property originated by the Executive shall be at
the sole discretion, without obligation, of the Company and
the Executive agrees that he shall have no claim or other
right of action against the Company should it decide not to
substantiate, protect or maintain any Intellectual Property
Rights originated wholly or partly by the Executive.
16.7 The Executive appoints the Company to be his attorney in his
name and on his behalf to execute, sign and do all such deeds,
instruments or things and generally to use the Executive's
name for the purposes of giving to the Company or its nominee
the full benefit of rights conferred under this Clause.
16.8 The Executive agrees to offer to the Company on arm's length
terms to be agreed with the Company, and to give the Company a
reasonable opportunity to acquire, any Intellectual Property
Rights in any Relevant Intellectual Property which do not vest
in the Company immediately such Intellectual Property Rights
shall come into effect and in the absence of agreement such
terms shall be determined by an arbitrator appointed by
agreement between the Company and the Executive (or in the
absence of agreement by the auditors of the Company) whose
costs shall be borne equally by the Company and the Executive.
17. RESTRICTIVE COVENANTS
17.1 The Executive agrees with and undertakes to the Company for
itself and as agent for every Associated Company that he will
not Directly or Indirectly following the Termination Date:-
17.1.1 for the period of 12 months be Materially Interested
in any Person providing Restricted Goods and/or
Services within the Restricted Area in competition
with the Company or any Relevant Associated Company;
17.1.2 for the period of 12 months entice away or endeavour
or attempt to entice away from the Company or any
Relevant Associated Company the Restricted Business;
17.1.3 for the period of 12 months solicit or attempt or
endeavour to solicit the custom of any Customer in
competition with the Company or any Relevant
Associated Company in order to supply Restricted
Goods and/or Services within the Restricted Area;
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17.1.4 for the period of 12 months supply Restricted Goods
and/or Services to any Customer in competition with
the Company or any Relevant Associated Company;
17.1.5 for the period of 12 months solicit or entice away
from the Company or any Relevant Associated Company
any Key Person;
17.1.6 for the period of 12 months offer employment to or
employ or enter into partnership or association with
(or offer so to do) or retain the services (or offer
to do so) whether as agent, consultant or otherwise
of any Key Person; or
17.1.7 for the period of 12 months solicit or attempt to
solicit or accept of place orders for or in any way
interfere with the supply or goods or services from
any Discounter where as a consequence such Discounter
may or is likely to cease supplying, reduce its
supply to or vary detrimentally the terms on which it
supplies such goods or services to the Company or any
Relevant Associated Company or any Joint Venture
Partner or any Licencee or any of their Customers; or
17.1.8 for the period of 12 months enter into contract with
or otherwise deal with any Joint Venture Partner or
any Licensee in competition with the Company or any
relevant Associated Company.
17.2 Each of the restrictions set out in this Clause shall be
considered separate from one another and it is acknowledged
that each sub-clause may contain more than one restriction.
For the avoidance of doubt each restriction insofar as it
applies to Associated Companies shall be separate from the
equivalent restriction as it applies to the Company.
17.3 While the restrictions set out in this Clause and the
definitions of "Customer", "Key Person", "Restricted Area",
"Restricted Business", "Restricted Goods and/or Services",
"Joint Venture Partner", "Licencee" and "Discounter" as set
out herein are considered by the parties to be reasonable in
all the circumstances it is agreed that if any one or more of
such restrictions or definitions shall either taken by itself
or themselves together be adjudged to go beyond what is
reasonable in all the circumstances for the protection of the
legitimate interests of the Company or any Associated Company
but would be adjudged reasonable if any particular restriction
or definition were deleted or if any part of the wording of
such restriction or definition were deleted then the parties
further agree that the said restrictions and definitions shall
apply with such deletions.
17.4 The restrictions set out in this Clause shall not prevent the
Executive from being a holder directly or indirectly by way of
bona fide investment only and subject to prior disclosure to
the Company of up to 3% of securities of any company which are
listed or dealt in on any Recognised Investment Exchange.
<PAGE> 84
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18. GENERAL
18.1 This Deed of Agreement shall take effect in substitution for
all previous agreements or arrangements whether written, oral
or implied between the Executive and the Company relating to
the services or employment of the Executive and the Executive
warrants to the Company that he is not entering into this Deed
of Agreement in reliance on any representation not expressly
set out in this Deed of Agreement.
18.2 The Executive shall not make at any time, either during his
employment or at any time after its termination, any statement
or permit or authorise any statement to be made which is
calculated or reasonably likely to damage the reputation or
cause other damage to the Company, any Associated Company or
its or their employees or officers.
18.3 The Executive shall not at any time after the termination of
his employment with the Company wrongfully represent himself
as being employed by or otherwise connected in any way with
the Company or any Associated Company.
18.4 The failure or delay by either party in exercising any rights
under this Deed of Agreement shall not operate as a waiver of
such rights and also any single or partial exercise by either
party of any right shall not preclude any further exercise of
such rights or any other rights.
18.5 The Executive warrants that he is not subject to any
agreement, arrangement or understanding or subject to any
other restriction which in any way directly or indirectly
restricts or prohibits him from entering into this Deed of
Agreement or from fully performing his duties and
responsibilities set out in this Deed of Agreement.
18.6 The various clauses, sub-clauses, paragraphs, sub-paragraphs,
phrases and sentences in this Deed of Agreement are severable
and if any clause, sub-clause, paragraph or sub-paragraph or
any identifiable part is held to be invalid, void or
unenforceable by any Court, Tribunal or other body or person
of competent jurisdiction, this shall not affect the validity
or enforceability of the remaining provisions or identifiable
parts.
18.7 The construction, validity and performance of this Deed of
Agreement shall be governed by the laws of England and Wales
and the parties submit to the non-exclusive jurisdiction of
the Courts of England and Wales as regards any claim or matter
arising in respect of this Deed of Agreement.
18.8 No variation or amendment to this Deed of Agreement shall be
legally binding unless and until such variation or amendment
is confirmed in writing and signed by the Executive and a duly
authorised representative of the Company.
<PAGE> 85
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18.9 References in this Deed of Agreement to statutes or other
legislation shall include any statute or legislation
modifying, re-enacting or made pursuant to such statute or
legislation.
18.10 Headings are for ease of reference and shall not be taken into
account in the construction of this Deed of Agreement.
18.11 The Schedule annexed to this Deed of Agreement forms an
integral part of this Deed of Agreement and any reference to
this Deed of Agreement shall be deemed to include a reference
to the Schedule.
18.12 There are no collective agreements which affect the
Executive's employment.
19. NOTICE
19.1 Any notice required to be given pursuant to this Agreement
shall be in writing and shall be deemed to have been duly
served if hand delivered or sent by facsimile or first class
post addressed to the relevant party's address as specified in
this Agreement or such other address as such party may
designate from time to time and in the case of the Company,
marked for the attention of the Company Secretary.
19.2 Any notice shall be deemed to have been served:-
19.2.1 if hand delivered, at the time of delivery (excluding
weekends and public holidays);
19.2.2 if sent by facsimile, at the time of transmission
(excluding weekends and public holidays);
19.2.3 if sent by post in the United Kingdom, 48 hours after
posting (excluding weekends and public holidays),
provided that delivery or transmission outside business hours shall be deemed to
have been served on the next business day.
THIS DEED OF AGREEMENT is executed as a Deed and is delivered on the date set
out at the commencement of this Deed of Agreement.
<PAGE> 86
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SCHEDULE 1
DEFINITIONS
In this Agreement the following words or phrases shall, unless the context
requires otherwise, have the following meanings:
"ASSOCIATED COMPANY"
means a subsidiary of the Company, or a holding company of the Company, or
another subsidiary of a holding company of the Company or which is an
"associated undertaking" of the Company within the meaning of Paragraph 20(1) of
Schedule 4A of the Companies Act 1985 where "subsidiary" and "holding company"
have the meanings given by Section 736 of the Companies Act 1985 and any other
company designated by the Company as an Associated Company;
"THE BOARD"
means the Board of Directors of the Company (or any director or committee of
directors authorised by the Board of Directors of the Company);
"CUSTOMER"
means any Person who or which at any time during the period of 12 months
immediately prior to the Termination Date was the holder of a discount or other
card issued by the Company or any Relevant Associated Company or who otherwise
was entitled to receive the benefit of their schemes for members;
"DIRECTLY OR INDIRECTLY"
means (without prejudice to the generality of the expression) whether as
principal or agent; whether alone, jointly, in partnership with another or for
or on behalf of another; whether as a shareholder, director (including a shadow
director), agent, principal, partner, consultant, employee or otherwise; or by
virtue of providing financial assistance;
"DISCOUNTER"
means any Person who or which at any time during the period of 12 months prior
to the Termination Date has agreed to provide or provided goods and/or services
and/or concessions (by way of discount or otherwise) to Customers and/or to the
Company and/or to any Relevant Associated Company and/or to any Licencee and/or
to any Joint Venture Partner whether on favourable terms or otherwise;
"INTELLECTUAL PROPERTY"
includes (without prejudice to the generality of the expression) inventions,
designs, processes, notations, improvements, know-how, goodwill, reputation,
get-up, trade names, trade marks, logos, devices, plans, computer software,
models and literary, dramatic, musical and artistic works as defined by the
Copyright Designs and Patents Act 1988;
"INTELLECTUAL PROPERTY RIGHTS"
means the following rights for the full period such rights subsist and all
extensions and renewals of such rights in any part of the world:
(a) copyright;
(b) design rights (whether or not registered);
<PAGE> 87
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(c) all accrued goodwill in any trade or service name (whether or
not registered), trading style or get-up;
(d) any patents or patent applications;
(e) any trade or service marks (whether or not registered)
including applications for such marks;
(f) all other industrial or intellectual property rights;
(g) rights under any licence or other agreement granted by or to
any other Person in respect of the use of any of the rights
listed above;
"JOINT VENTURE PARTNER"
means any Person
(a) with whom the Company or any Relevant Associated Company has
entered into a joint venture agreement for:-
(i) the development and/or exploitation of a business or
businesses the same as or similar to the Restricted
Business and/or;
(ii) the use and/or exploitation of the Intellectual
Property Rights owned or used by the Company or any
Relevant Associated Company; and
(b) with whom the Executive shall have had dealings in the course
of his employment under this Agreement;
"KEY PERSON"
means a person who was at any time during the period of 12 months immediately
prior to the Termination Date engaged or employed as an employee in a senior
position in receipt of remuneration of over (pound)25,000 per annum, director,
consultant (other than a professional adviser) or agent of the Company or any
Associated Company and who was a person with whom the Executive personally dealt
during his employment by the Company;
"LICENCEE"
means any Person:-
(a) with or whom the Company or any Relevant Associated Company
has entered into a licence agreement for:-
(i) the development and/or exploitation of a business or
businesses the same or similar to the Restricted
Business and/or;
(ii) the use and/or exploitation of the Intellectual
Property Rights owned by or used by the Company or
any Relevant Associated Company; and
(b) with whom the Executive shall have had dealings in the course
of his employment under this Agreement;
"MATERIALLY INTERESTED"
means employed or engaged by or concerned or interested in (whether directly or
indirectly) other than as a shareholder holding directly or indirectly by way of
bona fide investment only and subject to prior disclosure to the Company up to
3% in nominal value of the issue shares or other securities of any class of any
company listed or dealt in on any Recognised Investment Exchange;
<PAGE> 88
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"ORIGINATE"
means (without prejudice to the generality of the word) originate, compose,
write, invent, create, generate, discover, design, develop or manufacture;
"PERSON"
means person, firm, company, association, corporation or other organisation or
entity;
"RECOGNISED INVESTMENT EXCHANGE"
means a body which is a recognised investment exchange for the purposes of the
Financial Services Act 1986;
"RELEVANT ASSOCIATED COMPANY"
means any Associated Company to which the Executive has rendered services both
in the period of 12 months immediately prior to the Termination Date and in the
course of his employment by the Company;
"RELEVANT INTELLECTUAL PROPERTY"
means Intellectual Property Originated by the Executive during the term of his
employment by the Company (whether in the course of his employment or otherwise
and whether alone or in conjunction with another Person or other Persons) but
excluding any Intellectual Property Originated by the Executive during the term
of his employment but outside the course of his employment where such work
either:-
(a) does not directly or indirectly relate to the business of the
Company or any Associated Company; or
(b) could not be used by or from which no benefit could be
acquired by the Company or any Associated Company in the
course of its or their business.
"RESTRICTED AREA"
means the United Kingdom and any other geographical area in which the Company or
any Relevant Associated Company provides goods and/or services and in the supply
of which the Executive has had material involvement;
"RESTRICTED BUSINESS"
means the business of the Company or any Relevant Associated Company within a
period of 12 months prior to the Termination Date;
"RESTRICTED GOODS AND/OR SERVICES"
means goods and/or services of a type or which compete with those:-
(a) provided by the Company or any Relevant Associated Company in
the ordinary course of its or their business during the period
of 12 months immediately prior to the Termination Date; and
(b) in the provision of which the Executive was concerned or
engaged during his employment by the Company;
"TERMINATION DATE"
means the date of the termination of the Executive's employment with the
Company.
<PAGE> 89
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EXECUTED and DELIVERED as a Deed by the Company in the presence of:
P Harrison Director
Director/Secretary
SIGNED and DELIVERED as a Deed by the Executive in the presence of:
Simon Witney
222 Gray's Inn Road
London WC1
Solicitor
<PAGE> 90
SCHEDULE 8
Purchaser's representations and warranties
1. Each Purchaser is a corporation duly organised, validly existing, and in
good standing under the laws of the State of Delaware.
2. Each Purchaser has full corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of the
Purchaser, enforceable in accordance with its terms. Except as notified
in writing by the Purchaser to the Vendor prior to Completion, the
Purchaser does not need to give any notice to, make any filing with, or
obtain any authorisation, consent or approval of any government or
governmental agency in order to consummate the transactions contemplated
by this Agreement.
3. Neither the execution and the delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) violate any
constitution, statute, regulation, rule, injunction, judgment, order,
decree, ruling, charge or other restriction of any government,
governmental agency, or court to which the Purchaser is subject or any
provision of the Articles of Incorporation or Bylaws of the Purchaser or
(ii) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to
which the Purchaser is a party or by which it is bound or to which any of
its assets is subject.
4. The Purchaser has delivered to the Vendor true and complete copies of the
documents (other than preliminary proxy materials and reports required
pursuant to Sections 13 and 14 of the Exchange Act) that the Purchaser
has been required to file with the SEC since 30 September 1995 pursuant
to the Exchange Act (the "Transmedia SEC Documents"). As of their
respective dates, the Transmedia SEC Documents complied in all material
respects with the requirements of the Exchange Act, and the rules and
regulations of the SEC thereunder applicable to such Transmedia SEC
Documents, and none of the Transmedia SEC Documents
<PAGE> 91
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Purchaser included
in the Transmedia SEC Documents complied in all material respects with
applicable accounting requirements, were prepared in accordance with GAAP
applied on a consistent basis during the periods involved (except as may
be indicated in the notes thereto or, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC) and fairly present
(subject, in the case of unaudited statements, to recurring audit
adjustments normal in nature and amount) the consolidated financial
position of the Purchaser as at the dates thereof and the consolidated
results of its operations and cash flows or changes in financial position
for the periods then ended.
5. The issuance, sale and delivery of the Asia Shares and the Europe Shares
in accordance with this Agreement will be duly authorised by all
necessary corporate actions on the part of the Purchaser. The Asia Shares
and the Europe Shares, when so issued, will be duly and validly issued,
fully paid and non-assessable.
6. The Purchaser is a "reporting issuer" (as defined in Regulation S). The
Purchaser, its affiliates and any person acting on behalf of, or as agent
of, any of the foregoing, whether as principal or agent:
(a) has offered and sold the Asia Shares and the Europe Shares to the Vendor
only in an "offshore transaction" (as defined in Regulation S);
(b) has not engaged with respect to the Asia Shares and the Europe Shares in
any "directed selling efforts" (as defined in Regulation S) in or
directed toward the United States;
(c) has complied with all "offering restrictions" (as defined in Regulation
S) in respect of the Asia Shares and the Europe Shares;
(d) has not made any offers or sales of any of the Asia Shares or the Europe
Shares or any interest therein in the United States or to, or for the
account or benefit of,
<PAGE> 92
any "US Person" (as defined in Regulation S); and
(e) has not made any sales of any of the Asia Shares or the Europe Shares or
any interest therein to any person other than the Vendor.
<PAGE> 93
SIGNED by CHRISTOPHER
E.C. RADBONE
in the presence of:-
Simon Witney
222 Gray's Inn Road
London WC1
Solicitor
SIGNED by P HARRISON
for and on behalf of
TRANSMEDIA EUROPE, INC.
in the presence of:-
Fergus Payne
50 Victoria Street
London SW1
Solicitor
SIGNED by P HARRISON
for and on behalf of
TRANSMEDIA ASIA PACIFIC, INC.
in the presence of:-
Fergus Payne
50 Victoria Street
London SW1
Solicitor
