Exhibit 10.26
DATED 1999
----- ----
(1) ▇▇▇▇ ▇▇▇▇▇▇▇ AND OTHERS
(2) DOLLAR FINANCIAL UK LIMITED
(3) DOLLAR FINANCIAL GROUP, INC.
_______________________________________
AGREEMENT
---------
for the sale and purchase of shares in
CASH A CHEQUE HOLDINGS GREAT
BRITAIN LIMITED
_______________________________________
TITMUSS SAINER DECHERT
2 ▇▇▇▇▇▇▇▇▇' ▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Ref: C457/059294
CONTENTS
--------
Clause Heading
------ -------
1 Definitions and Interpretations
2 Sale and purchase of the Shares: release of the Options
3 Consideration
4 Completion
5 Warranties
6 Breach of Warranty
7 Limitation of liability
8 Retention
9 Undertakings by the Vendors
10 Restrictions on the Majority Vendors
11 Guarantee
12 Nature of obligations
13 Announcements
14 General
15 Communications
16 Proper Law
Schedule Description
-------- -----------
1 Details of the Vendors and Optionholders
2 Particulars of the Company
3 The Properties
4 Warranties
5 Tax Deed
6 Earn Out
7 Details of Loan Notes/cash to be received by the Vendors
Appendix Description
-------- -----------
The Accounts
Documents in the Agreed Form
----------------------------
Disclosure Letter (include all enclosures specified in the
Warranties)
Release from Optionholders
Directors' Letter of Resignation
Auditors' resignation
Opinion Letters
Letters of release from Vendors
Service agreements
Power of attorney
Announcement
Business Plan
Current Business Plan
Loan Note Instrument
Incentive Bonus
Worked example of the Earn Out prepared by BDO ▇▇▇▇ ▇▇▇▇▇▇▇
Worked example of the Earn Out prepared by Ernst & Young
THIS AGREEMENT is made on 1999
--------------
BETWEEN:-
-------
(1) The persons whose names and addresses are set out in the part 1 of the
first schedule ("Vendors");
---------
(2) DOLLAR FINANCIAL UK LIMITED a company registered in England under No.
---------------------------
3701758 whose registered office is at c/o Ernst & Young, Rolls House,
7 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ("Purchaser"); and
-----------
(3) DOLLAR FINANCIAL GROUP, INC. a company incorporated in the State of
----------------------------
New York USA whose principal office is at Daylesford Plaza, Suite 210,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇.▇.▇. ("Guarantor").
-----------
1. DEFINITIONS AND INTERPRETATION
- ------------------------------
1.1 In this agreement unless the context otherwise requires:-
"Accounts" means the audited consolidated balance sheet as at the
----------
Balance Sheet Date and the audited consolidated profit and loss
account for the period ended on the Balance Sheet Date of the Company
and the Subsidiaries together with the notes and directors' reports
and other documents annexed to them; (and for the purposes of
identification only copies of the Accounts have been signed by or on
behalf of the parties to this agreement and are annexed as appendix
"A");
"Agreed Form" means in a form agreed by and signed by or on behalf of
-------------
the parties to this agreement;
"Associate" means any person with whom any of the Vendors may be
-----------
connected within the meaning of section 839 of the Taxes Act or for
whom any of them may be a personal representative;
"Auditors" means the auditors for the time being of the Company and of
----------
the Subsidiaries;
"Balance Sheet Date" means 31 December 1998;
--------------------
"Business Day" means a day on which banks generally are open in the
--------------
City of London for the transaction of normal banking business;
"Business Plan" means the business plan for the Group for the 12
---------------
months from 1 July 1999 in the Agreed Form;
"Companies Act" means the Companies ▇▇▇ ▇▇▇▇ (as amended or re-enacted
---------------
by the Companies Act 1989);
"Company" means Cash a Cheque Holdings Great Britain Limited, details
---------
of which are set out in part 1 of the second schedule;
"Completion" means the date upon which completion of the sale and
------------
purchase of the Shares takes place pursuant to this agreement or the
date of actual completion of the sale and purchase of the Shares;
"Consideration" means the aggregate consideration for the Shares and
---------------
the release of the Options as referred to in clause 3 and the sixth
schedule;
"Current Plan" means the business plan in the Agreed Form for the 12
--------------
months ending 31 December 1999 a copy of which is annexed to the
Disclosure Letter;
"Deferred Consideration" means the sums payable pursuant to clauses
------------------------
3.1.2 and 3.1.3 and the provisions of the sixth schedule;
"Disclosure Letter" means the letter in the Agreed Form from the
-------------------
Vendors' Solicitors to the Purchaser's Solicitors dated as at the date
of this agreement;
"Earn Out Period" shall have the meaning given to it by the sixth
-----------------
schedule;
"Escrow Account" shall have the meaning given to it by clause 8.1;
----------------
"event" includes any act, omission, transaction or circumstance
-------
(including any of such matters provided for under this agreement);
"First Instalment" means that part of the aggregate consideration for
------------------
the Shares and for the release of the Options as referred to in clause
3.1.1 (which amounts to (Pounds)8,000,000);
"First Party Cheque Cashing" means the payment by a member of the
----------------------------
Group to one of its customers of an amount equal to the par value of a
Customer's Cheque (less an amount on account of the fees of that Group
member); and a "Customer's Cheque" means a cheque drawn by the Group's
-------------------
customer in favour of a member of the Group;
"Group" means the Company and the Subsidiaries or any one or more of
-------
them;
"Letters of Credit" means for the purposes of clause 7.8, irrevocable
-------------------
letters of credit to be opened up either by ▇▇▇▇▇ Fargo (if such
letter of credit is
subject to the laws of England and Wales) or (if
not) by National Westminster Bank plc in favour of the Vendors'
Solicitors with an expiration date of 24 months from the Deferred
Consideration Payment Date (except that if by such expiration date the
Specified Claim, as defined in clause 7.8.2, has not been determined
in accordance with that clause 7.8, then new letters of credit in
substantially the same terms as the original Letters of Credit shall
be opened up with an expiration date of 12 months from their issue, or
the equivalent amount in cash deposited into an escrow account until
such time as the Specified Claim is determined in accordance with
clause 7.8); and the only principal condition as to payment under such
letter of credit (other than the relevant bank's standard conditions
in relation to letters of credit) shall be the agreement between the
Purchaser and the Vendors' Representatives or the judgment of a court
in favour of the Vendors' of the amount to be paid by the Purchaser to
the Vendors;
"LIBOR" means the rate (rounded upwards to the nearest two decimal
-------
places) at which sterling deposits in any amount equal to the sum in
question is quoted by London Clearing Banks on the London Interbank
Sterling Market at or about 11am on the date from which interest is to
be calculated until the day immediately prior to the date of payment
rounded up or down to the nearest calendar month. The rate so
calculated will then be applied pro rata to any additional period of
less than a month;
"Loan Notes" means loan notes having an aggregate nominal value of
------------
(Pounds)11,412,570 constituted by the Loan Note Instrument in respect
of the First Instalment and in respect of the Deferred Consideration
shall be the proportion of the Consideration to be satisfied in the
Loan Notes as specified in the first schedule and the seventh
schedule;
"Loan Note Instrument" means instruments in the Agreed Form to be
----------------------
executed by the Purchaser at Completion and following agreement of the
Deferred Consideration and guaranteed by National Westminster Bank plc
constituting the (Pounds)11,412,570 Guaranteed Floating Rate Loan
Notes due 30 June 2006 and such other sum or sums as shall be
calculated pursuant to the first, sixth and seventh schedules in
respect of the Deferred Consideration;
"Majority Vendors" means ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇
------------------
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ May, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇ and any one or more of them;
"Minority Vendors" means the Vendors other than the Majority Vendors
------------------
and any one or more of them;
"Money Transfers" means the electronic transfer of money;
-----------------
"Optionholders" means the persons who hold the Options and whose names
---------------
are set out in part 2 of the first schedule;
"Options" means the options to subscribe for 241,546 "A" ordinary
---------
shares in the Company details of which are set out in part 2 of the
first schedule and which are held by the Optionholders;
"Properties" means the properties briefly described in the Property
------------
Schedule or any one or more of them or any part of or interest in any
of such properties;
"Property Schedule" means the third schedule;
-------------------
"Purchaser's Group" means the Guarantor and all its subsidiary and
-------------------
subsidiary undertakings from time to time;
"Purchaser's Solicitors" means Titmuss Sainer Dechert of 2 Serjeants'
------------------------
Inn, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇;
"Revenue" means all fiscal authorities (national or local) whether of
---------
the United Kingdom or elsewhere;
"Shares" means the whole of the issued and allotted share capital of
--------
the Company at Completion;
"South" means Cash a Cheque (South) Limited (No: 3238026);
-------
"South Agreement" means the agreement dated 11 June 1998 defined in
-----------------
Warranty 9.2.2 in the fourth schedule;
"South Payment" has the definition given to it in clause 3.1.3;
---------------
"Subsidiaries" means the Companies listed in part 2 of the second
--------------
schedule or any one or more of them (but which for the avoidance of
doubt shall exclude Time to Insure Limited);
"Taxation" means all forms of taxation, duties (including stamp duty),
----------
levies, imposts, charges, withholdings, national insurance and other
contributions,
rates and PAYE liabilities (including any related or
incidental penalty, fine, interest or surcharge) whenever created or
imposed and whether of the United Kingdom or elsewhere;
"Tax Deed" means a deed in the form set out in the fifth schedule
----------
duly executed by the Covenantors referred to in it;
"Taxes Act" means the Income and Corporation Taxes ▇▇▇ ▇▇▇▇;
-----------
"Tax Warranties" means the representations, warranties and
----------------
undertakings on the part of the Vendors contained in Part 8 of the
fourth schedule;
"Third Party Cheque Cashing" means the payment by a member of the
----------------------------
Group to one of its customers of an amount equal to the par value of a
Third Party Cheque (less an amount on account of the fees of that
Group member); and a "Third Party Cheque" means a cheque drawn by a
--------------------
third party in favour of the Group's customer (and not in favour of
any other person or drawn by the customer in favour of a member of the
Group);
"Time to Insure Agreement" means the trading agreement between Cash a
--------------------------
Cheque (GB) Limited and Time to Insure Limited dated 27 March 1998 as
varied from time to time;
"Vendors" shall include the Optionholders;
---------
"Vendors' Representatives" shall have the meaning given to it by
--------------------------
clause 14.4;
"Vendors' Solicitors" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ of Dashwood House, 69 Old
---------------------
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇;
"Vendor Trust Companies" means AIB Nominees (Jersey) Limited, Avrocet
------------------------
Trading Company Limited, ▇▇▇▇▇▇▇▇ Limited, Royal Bank of Scotland
Trust Company (IOM) Limited, Valmet Isle of Man Limited, Continental
Assets & Securities Limited, and Glenross International Limited (the
addresses of which are set out in part 1 of the first schedule) and
any one or more of them; and
"Warranties" means the representations, warranties and undertakings on
------------
the part of the Vendors contained in the fourth schedule and which are
made by the Vendors pursuant to clause 5.
1.2 In this agreement unless the context otherwise requires:-
1.2.1 any reference to a clause, schedule or appendix (other than to a
schedule to a
statutory provision) is a reference to a clause of or
schedule or appendix to this agreement; and the schedules and
appendices form part of and are deemed to be incorporated in and in
references to this agreement;
1.2.2 any reference to a statute or statutory provision includes a reference
to that provision as amended, re-enacted or replaced and any
regulations or orders made under such provisions from time to time
whether before or after the date of this agreement and any former
statutory provision replaced (with or without modification) by the
provision referred to except to the extent that any amendment, re-
enactment or replacement coming into force after the date of this
agreement would increase or extend the liability of the parties to one
another;
1.2.3 any reference to persons includes a reference to firms, corporations
or unincorporated associations;
1.2.4 any reference to the singular includes a reference to the plural and
vice versa; and any reference to the masculine includes a reference to
the feminine and vice versa;
1.2.5 a reference to an SSAP is a reference to a Statement of Standard
Accounting Practice which has been adopted as an accounting standard
by the Accounting Standards Board and reference to FRS is a reference
to Financial Reporting Standard;
1.2.6 any agreement, warranty, representation, indemnity, covenant or
undertaking on the part of two or more persons shall be deemed to be
given or made by such persons severally (but subject to the provisions
of clause 1.4); and
1.2.7 words and expressions defined in the Companies Act bear the same
respective meanings provided Time to Insure Limited shall not be
regarded as a subsidiary or subsidiary undertaking of the Company or
any of its Subsidiaries.
1.3 Headings and titles are used for ease of reference only and do not
affect the interpretation of this agreement.
1.4 Any matter which shall be relevant to any of the Warranties and which
shall be known to at least one of the Vendors, shall be deemed to be
known by the other Vendors as well.
1.5 If any statement is qualified by the expression "to the best of the
-------------- ---
Vendors' knowledge information and belief" or "so far as the Vendors
------------------------------------------ ----------------------
are aware" or any similar expression, that expression shall be deemed
----------
to include a warranty by the makers thereof that the statement has
been made by them after due and careful enquiry and the Vendors shall
in particular be deemed to have knowledge of anything of which the
following persons, viz ▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ought reasonably to have knowledge given their
particular position in and responsibilities to the Vendors and the
Group.
2 SALE AND PURCHASE OF THE SHARES: RELEASE OF THE OPTIONS
- -------------------------------------------------------
2.1 The Vendors shall sell the Shares to the Purchaser and the Purchaser,
relying on the Warranties and the other obligations of the Vendors
under this agreement, shall purchase the Shares.
2.2 The Vendors shall sell the Shares with full title guarantee free from
all liens, charges, encumbrances and adverse claims (and whether or
not the Vendors know or could reasonably be expected to know about
such matters) together with all rights now or hereafter attaching to
them including all dividends declared or payable or distributions made
or proposed on or after the Balance Sheet Date.
2.3 The Vendors shall procure that the Optionholders shall release the
Company from its obligation to allot and issue shares pursuant to the
Options upon satisfaction by the Purchaser of its obligations pursuant
to clause 4.5 and the Purchaser, relying on the Warranties and the
other obligations of the Vendors shall pay the sums due to the
Optionholders pursuant to this agreement.
2.4 The Vendors irrevocably and unconditionally waive (and shall procure
such a waiver by their nominee(s) of) all rights of pre-emption or
other restrictions on transfer which they or such nominee(s) may have,
whether under the Articles of Association of the Company and the
Subsidiaries or otherwise, in respect of the transfer to the Purchaser
or its nominee(s) of the Shares or any of them and shall execute and
deliver (or procure the execution and delivery of) all such deeds of
waiver in respect thereof as the Purchaser may require.
2.5 The Purchaser shall not be obliged to complete the purchase of some
only of the Shares unless the purchase of all the Shares and the
release of all the Options is completed simultaneously in accordance
with the provisions of this agreement.
3 CONSIDERATION
- -------------
3.1 The aggregate consideration for
(a) the Shares; and
(b) the Optionholders releasing the Company from its obligations to
allot and issue shares pursuant to the Options shall be:
3.1.1 the sum of (Pounds)8,000,000; plus
3.1.2 such further sums (if any) as shall become due and payable in
accordance with the sixth schedule but which shall not in any
circumstances exceed a total of (Pounds)10,459,000; plus
3.1.3 (if within three months after Completion, (time being of the essence
for this purpose) the Purchaser shall have exchanged heads of
agreement for the purchase ("the South Purchase") of the 74.9 per
----------------------
cent. of the issued share capital of South not already owned by Cash a
Cheque (GB) Limited and the Purchaser shall subsequently complete the
South Purchase) an additional sum ("the South Payment") which shall be
---------------------
calculated in accordance with the following formula:
25.1% of (A x 100 )
----
74.9)
where "A" shall be equal to the aggregate amount (if any) which the
Purchaser shall pay to the sellers of the shares in South upon the
completion of the South Purchase, but the South Payment shall be
subject to a maximum of (Pounds)600,000.
3.2.1 If for whatever reason royalty payments due to the Company during the
Earn Out Period pursuant to the South Agreement ("Royalty Payment")
-------------------
have not been paid as and when they fall due the Vendors'
Representatives shall have the conduct of any claims which the Company
may pursue in respect of all outstanding sums due to the Company from
South subject always to the funding of the costs of such action by the
Vendors by payments in advance and their indemnifying of the Purchaser
and the Group on a joint and several basis against
all losses, liabilities, costs and expenses incurred arising from such
legal proceedings.
3.2.2 Any Royalty Payments as shall be recovered after the Relevant Accounts
shall have been produced in Final Form shall be added to the Relevant
Profits and the Adjusted Relevant Profits (as the case may be).
3.2.3 Any difference between the Second Instalment and/or Third Instalment
actually payable pursuant to the sixth schedule and the sums in
respect of the Second Instalment and Third Instalment which would have
been payable had the Royalty Payment (less any costs or expenses
actually incurred by the Group in recovering it and not refunded by
the Vendors) been included in the Relevant Profits and Adjusted
Relevant Profits as shown by the Relevant Accounts and the Relevant
Statement shall be payable to the Vendors as additional consideration
within 28 days after the receipt by the Company of the Royalty
Payment.
3.2.4 Nothing in this clause 3.2 shall affect the maximum amounts of the
Second and Third Instalments specified in the sixth schedule.
3.2.5 Terms defined in the sixth schedule shall have the same meaning when
used in this clause.
3.3 The South Payment shall be paid to the Vendors' Solicitors within 14
days after the completion of the South Purchase and the Purchaser
shall not be concerned with the basis upon which it shall be
distributed between the Vendors by the Vendors' Solicitors.
3.4. The aggregate consideration payable pursuant to clause 3.1 shall be
apportioned between the Vendors as set out in columns 3 and 5 of Part
1 of the first schedule and between the Option holders as set out in
columns 5 and 6 of Part 2 of the first schedule and shall be satisfied
by the payment of cash and Loan Notes as indicated in the seventh
schedule. If it provides in the seventh schedule that any element of
the Consideration will be satisfied in Loan Notes that element of the
Consideration shall not be capable of being satisfied other than by
the issue of Loan Notes.
3.5 The Vendors shall be liable for any breach of Warranties and/or
indemnities in this agreement in the proportions set out opposite
their respective names in column 7 of Part 1.
4 COMPLETION
- ----------
4.1 Completion shall take place at the offices of the Purchaser's
Solicitors immediately after the exchange of this agreement when the
parties shall comply with their respective obligations as set out in
this clause.
4.2 The Vendors shall deliver to the Purchaser or (at the option of the
Purchaser) to its nominee(s):-
4.2.1 duly executed share transfers in respect of the Shares in favour of
the Purchaser or as it may direct, together with the relevant share
certificates or other documents of title and any power of attorney or
other authority under which such transfers have been executed and an
indemnity in such form as the Purchaser shall require in relation to
any missing certificates;
4.2.2 duly executed share transfers in respect of any shares in the
Subsidiaries not registered in the name of the Company in favour of
such persons as the Purchaser may direct together with share
certificates or other documents of title in respect of all the issued
share capitals of the Subsidiaries and an indemnity in such form as
the Purchaser shall require in relation to any missing certificates;
4.2.3 duly executed releases in the Agreed Form of all the Options by each
of the Optionholders together with the relative Option certificate or
other document of title.
4.2.4 written resignations and releases executed as deeds in the Agreed Form
from all persons (other than any directors or secretaries remaining at
the request of the Purchaser or appointed at the instance of the
Purchaser) who, on or immediately prior to Completion, may be
directors or secretaries of the Company and the Subsidiaries,
resigning their offices and releasing the Company and the Subsidiaries
from all claims and rights of action whether by way of compensation,
remuneration, redundancy payments or otherwise;
4.2.5 the unqualified resignation with effect from 29 June 1999 the present
Auditors as auditors of the Company and the Subsidiaries by notices in
accordance with section 392 of the Companies Act which shall contain a
statement in accordance with section 394 of the Companies Act together
with confirmation that they have no claims against the Company and the
Subsidiaries for unpaid fees or expenses in excess of (Pounds)41,266;
4.2.6 the common seals, the certificates of incorporation (including on re-
registration as a private limited company) and copies of the
Memorandum and Articles of Association (containing copies of all such
resolutions and agreements as are referred to in section 380 of the
Companies Act) of each of the Company and the Subsidiaries and the
registers and books required by the Companies Act to be kept by each
of them all of which shall be written up to date as at Completion;
4.2.7 all deeds and documents of title relating to the Properties (including
all insurance policies, premium receipts, maintenance contracts and
other documents relating to the Properties) and certified copies of
any documents being held by mortgagees;
4.2.8 a letter from the Majority Vendors specifying the whereabouts of any
other documents, books and records of the Company and the Subsidiaries
which shall not be held at the Properties and directing the holders of
---
them to deliver them up to the Purchaser's authorised representatives
immediately upon request;
4.2.9 letters of release executed as deeds and such other evidence as the
Purchaser may require of the irrevocable and unconditional release and
discharge of the Company and the Subsidiaries from all liabilities or
obligations pursuant to any bonds, guarantees, indemnities, securities
or obligations given or entered into by the Company and/or the
Subsidiaries to or in favour of any person in respect of any
liabilities or obligations of the Vendors;
4.2.10 service agreements in the Agreed Form between the Company and ▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇▇ respectively signed by each of
them;
4.2.11 powers of attorney in the Agreed Form in relation to the Shares duly
executed by each Vendor;
4.2.12 the Tax Deed;
4.2.13 if required by the Purchaser, evidence to the satisfaction of the
Purchaser that any person executing this agreement or any document to
be executed pursuant to it has authority to do so; and
4.2.14 opinion letters in the Agreed Form from solicitors, qualified in the
relevant jurisdictions, confirming that each of the Vendor Trust
Companies have the
capacity to sell their Shares in accordance with
this agreement.
4.3 The Vendors shall on the Completion Date:-
4.3.1 procure that none of them or any of their Associates has any claims
(other than salary in accordance with the rates described in the
Disclosure Letter and outstanding expenses) or rights of action
against either the Company or the Subsidiaries and that none of them
or any of their Associates is in any way obligated or indebted to the
Company or the Subsidiaries; and
4.3.2 deliver to the Purchaser's Solicitors letters executed as deeds in the
Agreed Form confirming that they have complied with clause 4.3.1, and
irrevocably and unconditionally releasing the Company and the
Subsidiaries from all obligations and liabilities as contemplated by
clause 4.3.1.
4.4 The Vendors shall procure that Board Meetings of the Company and the
Subsidiaries will be held which will transact the following business:-
4.4.1 (subject only to them being stamped) the approval of the transfer of
shares referred to in clauses 4.2.1 and 4.2.2 and the Purchaser and/or
its nominee(s) being entered in the Register of Members as the holders
of the shares specified in those transfers;
4.4.2 the appointment of such persons as the Purchaser may nominate as
directors and secretary of the Company and the Subsidiaries;
4.4.3 the acceptance of the various resignations of officers and auditors
referred to in this clause;
4.4.4 the change of the registered office, the accounting reference date and
the bank mandates of the Company and the Subsidiaries in accordance
with the Purchaser's requirements;
4.4.5 the appointment of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to the board of Time to Insure
Limited (and the Vendors shall within three months of Completion use
their reasonable endeavours to procure that the articles of
association of that company are amended to permit board meetings to be
held by telephone and for directors to be given notice of board
meetings whilst outside the United Kingdom and the Vendors shall also
use their reasonable endeavours to deliver a letter from the
shareholders of that company undertaking to the Company that it will
not alter those amendments without the Company's prior written
consent);
4.5 Subject to the conclusion of the matters referred to in the previous
provisions of this clause:-
4.5.1 the Purchaser shall procure that there shall immediately be paid by
way of direct transfer by means of the Clearing House Automatic
Payment System;
4.5.1.1 (Pounds)3,161,491 on account of the Consideration to the Vendors'
Solicitors client account, the details of which are as follows:
Account No: ▇▇▇▇▇▇▇▇
Bank: Barclays Bank plc
Branch: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Sort code: 20-77-67
4.5.1.2 (Pounds)273,440 to the Escrow Account referred to in clause 8.1;
4.5.2 the parties shall give to their respective solicitors the irrevocable
instructions referred to in clause 8.11; and
4.5.3 the Purchaser shall deliver to the Vendors' Solicitors:-
4.5.3.1 the Loan Notes to the value of (Pounds)4,565,069 in respect of the
First Instalment for those Vendors indicated in the seventh schedule
as receiving Loan Notes;
4.5.3.2 a counterpart Tax Deed duly executed by the Purchaser; and
4.5.3.3 counterparts of the service agreements in the Agreed Form to be
entered into by the Company with ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇
▇▇▇▇▇▇▇ duly signed on behalf of the Company;
4.5.4 the Purchaser shall procure the release of ▇▇▇▇ ▇▇▇ from the guarantee
he has given on behalf of the Company in respect of the premises at
Peterborough save that if such release shall not be given at
Completion, the Purchaser shall indemnify him and keep him indemnified
on demand against any and all losses, liabilities, claims, reasonable
costs and other expenses which he shall reasonably and properly incur
in connection with such guarantee until he shall be released.
4.6 The Vendors confirm that the Vendors' Solicitors may receive (and give
a good receipt for) the Consideration (and all documents expressed to
be delivered to them at Completion) as agent for the Vendors and the
Purchaser shall not be concerned with the basis upon which the
Consideration (or such documents) shall be distributed between the
various Vendors by the Vendors'
Solicitors.
5 WARRANTIES AND REPRESENTATIONS
- ------------------------------
5.1 The Vendors represent and warrant to and undertake with the Purchaser
that, save only as and to the extent fairly disclosed to the Purchaser
in this agreement or in the Disclosure Letter, each of the
Warranties:-
5.1.1 is now and will be at Completion true and accurate; and
5.1.2 is not to be affected or limited by any previous or other disclosures,
express or implied, to the Purchaser, its officers, representatives or
professional advisers.
5.2 The Vendors acknowledge that the Purchaser has relied on the
Warranties in entering into this agreement.
5.3 Each of the Warranties, covenants, indemnities and undertakings set
out in this agreement or the Tax Deed is separate and independent.
5.4 The Vendors agree with the Purchaser for itself and as trustee for the
Company and the Subsidiaries and each of their respective officers and
employees to irrevocably and unconditionally waive any rights remedies
or claims which they may have in respect of any misrepresentation in
or omission from any information or advice supplied or given by the
Company and the Subsidiaries or their respective officers, employees
or agents to the Majority Vendors and on which they have relied in
giving the Warranties, unless such misrepresentation or omission was
made fraudulently in preparing the Disclosure Letter or in agreeing to
give the Tax Deed.
5.5 The Vendors and the Purchaser shall each try to settle any claim (as
defined in clause 7.1) as soon as possible and ideally, within twelve
months of any such claim being made; and each of them shall deal in
good faith with one another to achieve that objective.
6 BREACH OF WARRANTY
- ------------------
6. Without restricting the rights or the ability of the Purchaser to
claim damages on any basis if it shall be found that any matter which
is the subject of any of the Warranties is not as represented,
warranted or undertaken then, if the Purchaser shall so elect by
notice in writing to them, the Vendors shall on demand pay to the
Purchaser:-
6.1 a sum equal to the amount by which the value (or amount) at Completion
of
the aggregate amount of the assets and liabilities of the Company
and of the Subsidiaries was less or, in the case of a liability,
greater than the aggregate of the values (or amounts) at Completion of
such assets and liabilities;
or, if the Purchaser shall so elect
6.2 the amount of damages which would be awarded by a Court of competent
jurisdiction but for the provisions of clause 6.1; and (in either
case)
6.3 all costs and expenses incurred by the Company, the Subsidiaries
and/or the Purchaser as a result of such breach, together with such
other amounts as shall be required to compensate them for any other
loss or damage which they shall have suffered.
7 LIMITATION OF LIABILITY
- -----------------------
7.1 The following provisions of this clause 7 shall operate to limit the
liability of the Vendors under the Warranties and where expressly
stated, the Covenantors under the Tax Deed and references to "breach",
--------
"claim" and "liability" (and any similar expression) shall, unless the
------- -----------
context otherwise requires, be references to a breach of or a claim or
liability arising under the Warranties or (where the context admits)
the Tax Deed notwithstanding any other provisions contained in this
agreement.
7.2. No claim shall be made unless the Vendors shall have been given
written notice of that claim by or on behalf of the Purchaser prior to
30 September 2001 (in the case of liability relating to a matter other
than Taxation) or the seventh anniversary of Completion (in the case
of liability relating to Taxation or arising under the Tax Deed) other
than such a liability which shall arise from fraud or wilful default
or neglect in which case there shall be no limitation together with
such material details of which the Purchaser shall then be aware of
the specific matter in respect of which a claim is made.
7.3.1 No claims shall be admissible and no liability in respect thereof
shall arise unless notice in writing giving reasonable details of the
claim alleged (supported by such documentary evidence as is then
available) including a contingent claim which has not at that time
crystallised and (if practicable) a genuine pre-estimate of the amount
thereof has been given to the Vendors as regards the Warranties (other
than Warranties relating to Taxation) by not later
that the close of business on 30 September 2001 and as regards the
Warranties relating to Taxation and the Tax Deed by not later than
close of business on the seventh anniversary of Completion.
7.3.2 The Vendors shall not be liable to satisfy any breach or claim if and
to the extent that any breach or claim is based upon a liability which
is contingent only unless and until such contingent liability becomes
an actual liability and is due and payable; but this sub-clause 7.3
shall not operate to avoid any claim made in respect of a contingent
liability of which notice is given within the applicable time limits
specified in clause 7.2 together with such material details relating
to that claim of which the Purchaser shall be aware when giving it.
7.4 The liability of the Minority Vendors for all claims (including claims
under the Tax Deed) shall be limited to an amount equal to
7.4.1 the Retention; plus
7.4.2 their share of the Deferred Consideration;
and in the case of the Minority Vendor AIB Nominees (Jersey) Limited
only shall expire on the date of the release of the Retention and the
date of payment of the Deferred Consideration, as appropriate.
7.5 The liability of the Majority Vendors for all claims (including claims
under the Tax Deed) shall be limited to an amount equal to
7.5.1 their share of the First Instalment (including in each case any share
which they shall receive as a consequence of the release of the
Options); plus
7.5.2 their share of the Deferred Consideration;
7.6 The Vendors' liability for all claims (including claims under the Tax
Deed) shall be further limited so that, without prejudice to the
Purchaser's rights of set off pursuant to clause 7.8 and paragraph 7.2
of the sixth schedule:
7.6.1 the amount which the Minority Vendors shall be required to pay towards
the settlement of all claims shall not exceed the amount of the
Retention; and
7.6.2 the amount which the Majority Vendors shall be required to pay towards
the settlement of all claims shall not exceed the amount described in
clause 7.5.1; unless and to the extent that any claim shall be settled
after the Deferred Consideration shall have been paid to the Vendors,
in which case the Vendors
shall in addition be required to pay towards the settlement of such
claims an amount equal to their respective shares of the Deferred
Consideration.
7.7 The Purchaser may claim damages for any claim from all or any of the
Vendors up to the various limits on their respective liabilities
specified in clauses 7.4 to 7.6 inclusive.
7.8.1 The Purchaser shall be entitled to set off any unsatisfied liability
which any of the Vendors shall have in respect of any claim against
the Purchaser's liability to pay to all or any of the Vendors any part
of the Deferred Consideration; and each Vendor who shall suffer any
such set off shall be deemed to have satisfied the relevant claim to
the extent of the amount of such set off.
7.8.2 If at the date ("the Deferred Consideration Payment Date") the
-------------------------------------------
Deferred Consideration shall otherwise become payable, the Purchaser
shall have made a claim ("the Specified Claim") which has not by then
-----------------------
been determined by agreement between the Purchaser and the Vendors'
Representatives or a court order, the Purchaser shall be entitled to
withhold ("the Withholding") paying an amount of the Deferred
-------------------
Consideration equivalent to the Purchaser's reasonable estimate ("the
-----
Purchaser's Estimate") of the Specified Claim (including interest and
----------------------
cost) provided that within 21 days after the Deferred Consideration
Payment Date the Purchaser shall have arranged for Letters of Credit
to be opened up in favour of the Vendors' Solicitors in respect of the
value of the Purchaser's Estimate.
7.8.3 If such Letters of Credit shall not be forthcoming within 21 days of
the Deferred Consideration Payment Date, an amount equal to the
Purchaser's Estimate shall be deposited in an escrow account ("the
-----
Second Escrow Account") on the same terms and conditions as the Escrow
-----------------------
Account (subject to any amendments required to give effect to this
provision (including the fact that the persons to whom payments may be
made out of the Second Escrow Account shall be those Vendors who have
been affected by the withholding and not necessarily the Minority
Vendors)).
7.8.4.1 If such sums shall not be deposited in the Second Escrow Account
within 28 days of the Deferred Consideration Payment Date (or if
later, the date by which the Vendors' Solicitors have completed all
necessary forms to enable
the Second Escrow Account to be opened and those Vendors affected by
the Withholding have given the instructions to the Vendors' Solicitors
envisaged by clause 8.11) the Specified Claim shall be deemed to be
waived by the Purchaser;
7.8.4.2 the Purchaser shall pay to those of the Vendors affected by the
withholding of the Deferred Consideration interest on the amount
withheld calculated from day to day at LIBOR plus 5% with half yearly
rests calculated from the Deferred Consideration Payment Date until
the actual date of payment.
7.8.5 The purpose of such Letters of Credit shall be to give security to the
Vendors in respect of the amount of the Purchaser's Estimate pending
the resolution of the Specified Claim in favour of the Vendors to the
value of the Purchaser's Estimate.
7.8.6 Such Letters of Credit shall provide that upon the amount of the
Vendors' liability ("Vendors' Liability") in respect of any specified
----------------------
Claim being determined either by agreement between the parties or a
determination by the court:
7.8.6.1 the relevant bank shall be released from all liability to the Vendors
pursuant to the Letters of Credit to the extent of the Vendors'
Liability in relation to that Specified Claim or if less, the
Purchaser's Estimate; and
7.8.6.2 the amount secured by the Letters of Credit shall be reduced to the
balance, if any, by which the original amount of the Letters of Credit
shall exceed the amount of the Vendors' Liability in relation to the
Specified Claims and that amount ("the Balancing Payment") shall
---------------------
be payable or Loan Notes issued in respect of that amount (as the case
may be) to the Vendors' Solicitors within 7 days after it shall have
been determined;
7.8.7 Where Letters of Credit have been issued and a Balancing Payment
becomes due to the Vendors' Solicitors as described in clause 7.6.2,
the Purchaser shall pay to those of the Vendors who have been affected
by the withholding a sum equal to the interest calculated on the
Balancing Payment at the base rate of National Westminster Bank from
time to time plus 5%, calculated from the Deferred Consideration
Payment Date to the date of actual payment from day to day with half
yearly rests.
7.9 The Vendors shall have no liability in respect of any claim (including
claims under the Tax Deed) unless the total loss sustained in respect
of all those claims (when aggregated with any losses sustained under
any previous claims) shall exceed (Pounds)250,000 whereupon the
Vendors shall be liable for the full amount of such claim and not
merely the excess.
7.10 No claim shall be made by the Purchaser against the Vendors and the
Vendors shall have no liability to the Purchaser under this agreement
(including the Warranties) or otherwise:-
7.10.1 in respect of any warranty, representation, indemnity, covenant,
undertaking or otherwise arising out of or in connection with the sale
of the Shares or the release of the Options except where it is
expressly contained in this agreement or the Tax Deed; or
7.10.2 in respect of any matter or thing disclosed in this agreement or done
as a condition precedent to Completion or in the execution and
performance of this agreement; or
7.10.3 in respect of any liability or other matter or thing to the extent
that it occurs as a result of or is otherwise attributable to any
legislation not in force at the date hereof or any change of law or
administrative practice having retrospective effect which comes into
force after the date of this agreement.
7.11 The provisions of clauses 4.1 of the Tax Deed are expressed to limit
the liability of the Vendors under the Tax Warranties in the same
manner and to the same extent as they limit the liability of the
Covenantors under the Tax Deed.
7.12 No claim shall be capable of being made under the Warranties to the
extent that the Purchaser and/or the Company and/or any of the
Subsidiaries has already recovered such sum arising from any loss or
damage suffered by it arising out of the subject matter thereof under
the terms of any insurance policy for the time being in force provided
that there shall be no increase in renewal premiums as a consequence.
7.13 The Purchaser shall not be entitled to recover any sum in respect of
any claim for breach of any of the Warranties or in respect of any
claim under clause 9 or the Tax Deed or otherwise obtain reimbursement
or restitution more than once
in respect of the same loss or damage; and for the avoidance of doubt
any amount paid under the Warranties shall to the extent of that
payment reduce the amount otherwise payable pursuant to a claim under
the Tax Deed in respect of the same subject matter and vice versa.
7.14 The Purchaser shall not be entitled to recover any sum in respect of
any claim for breach of any of the Warranties or in respect of any
claim made under clause 9 or the Tax Deed to the extent that the event
or circumstance giving rise to such claim shall have been taken into
account in calculating the Relevant Profits or Adjusted Relevant
Profits pursuant to the sixth schedule and has resulted in a reduction
in the amount payable by way of Deferred Consideration; nor shall
there be taken into account in calculating the Relevant Profits or
Adjusted Relevant Profits (where the same would result in a reduction
in the amount payable by way of Deferred Consideration) any event or
circumstance which has given rise to a claim being made under the
Warranties or the Tax Deed and in respect of which the Purchaser has
made full recovery against the Vendors.
7.15.1 This sub-clause 7.15 shall apply where the Vendors shall have settled
in full a claim for breach of a Warranty (other than a Tax Warranty,
in which case clause 9 of the Tax Deed shall apply) and the Purchaser
or the Group or their respective successors or assigns (as the case
may be) shall be entitled to recover any sum ("the Recoverable Sum")
---------------------
from some other person, firm or company (other than an employee of the
Company) which shall be solely referable to the matter giving rise to
that claim;
7.15.2 Where this sub-clause 7.15 shall apply, the Purchaser shall procure
that it or the Group (as the case may be) shall pursue a claim for the
Recoverable Sum and account to the Vendors for any part of the
Recoverable Sum which it or the Group shall recover (after having
deducted any costs or expenses incurred by the Purchaser or the Group)
up to the amount paid to the Purchaser by the Vendors in settlement of
the claim for the breach of the relevant warranty.
7.15.3 Any claim which shall be made by the Purchaser or the Group for the
recoverable sum shall only be pursued at the Vendors' cost and subject
to the Purchaser or the Group being indemnified and secured by the
Vendors to the
reasonable satisfaction of the Purchaser against all losses,
liabilities, costs and expenses thereby incurred.
7.15.4 Neither the Purchaser nor the Group shall be required to make any
claim for the recoverable sum if in the Purchaser's reasonable opinion
such claims may harm the goodwill or profitability of the Purchaser or
any company which should be a subsidiary or holding company of either
the Purchaser or the Company.
7.16 The amount or amounts of any successful claim or claims against the
Vendors under or in respect of the Warranties shall be deemed to
constitute a reduction in the Consideration.
7.17 The Purchaser:-
7.17.1 irrevocably and unconditionally waives any right it may have to
rescind this agreement and/or claim damages for any breach of warranty
or untrue representation, undertaking or statement of fact or opinion
made to it prior to the date of this agreement in connection with the
subject matter of this agreement or the Company which is not contained
in this agreement; and
7.17.2 agrees that the Purchaser has not been induced to enter into this
agreement by any representation, warranty or assurance other than
those contained in this agreement but nothing in this paragraph shall
seek to exclude or restrict the liability of the Vendors for
fraudulent misrepresentation.
7.18 Nothing in this agreement shall in any way diminish the Purchaser's
common law duty to mitigate its loss in respect of the Warranties.
7.19 The Purchaser agrees that it will seek no financial remedy for the
breach of the warranties given in clause 10.3 and in paragraphs 8.3.1,
8.3.7, 8.3.8, 8.3.10 and 8.5.3 of the fourth schedule but this
provision shall not affect the Purchaser's ability to claim damages
(or obtain injunctive relief) for any breach of the undertakings
contained in clause 10.2.
8 THE RETENTION
- -------------
8.1 In this clause:-
"Claim" means a claim pursuant to this agreement and/or Tax Deed which
-------
shall be notified by the Purchaser to the Minority Vendors in
accordance with this agreement and/or the Tax Deed prior to the
Release Date and which shall
specify the amount alleged to be due in respect of it from the
Minority Vendors);
"Escrow Account" means an interest bearing deposit account to be
----------------
opened with National Westminster Bank PLC, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ in the joint names of the Purchaser's Solicitors and the Vendor's
Solicitors which account shall only be operated on the instructions of
the authorised signatories from each firm and in accordance with the
terms of this agreement and shall be free from any lien charge
encumbrance set off or counterclaim (other than as referred to in this
clause);
"Outstanding Claims" means the aggregate of all Claims in respect of
--------------------
which at any particular time the Minority Vendors' liability shall not
have been finally determined or agreed between the parties;
"Release Date" means 30 September 2001 any later date permitted
--------------
by this clause;
"Retention" means the sum of (Pounds)273,440 to be retained out of the
-----------
Consideration and paid into the Escrow Account and to be dealt with in
accordance with this clause or (as the case may be) the balance of
such sum from time to time retained pursuant to this clause.
8.2 The Purchaser shall pay the Retention into the Escrow Account at
Completion and the Retention shall be dealt with on the terms of this
clause.
8.3 The Retention shall be retained in the Escrow Account until the
Release Date (subject to any earlier release to the Purchaser in
accordance with this clause) but if no Claim shall be made by the
Purchaser by the Release Date the Retention shall forthwith be
released to the Minority Vendors.
8.4 An amount equal to the extent of the Minority Vendors' liability in
respect of a particular Claim (less any amount which the Minority
Vendors' shall have paid directly to the Purchaser to discharge or
satisfy that Claim) shall be paid to the Purchaser out of the Escrow
Account within seven days after the extent of that liability shall
have been finally determined or agreed between the parties.
8.5 An amount equal to the Retention (that is, after deducting any amounts
paid to the Purchaser pursuant to clause 8.3) less the Outstanding
Claims shall be paid
to the Minority Vendors on the Release Date; and the balance shall
continue to be retained in the Escrow Account.
8.6 Any amount which shall continue to be retained in the Escrow Account
after the Release Date pursuant to clause 8.5 shall be dealt with as
follows:-
8.6.1 the terms of clause 8.4 shall apply to the extent that the Minority
Vendors' liability in respect of any particular Claims shall be
finally determined or agreed between the parties from time to time;
8.6.2 within seven days after it shall have been finally determined or
agreed between the parties that the Minority Vendors' shall not be
liable in respect of a particular Claim (or the Purchaser has agreed
to withdraw a Claim in whole or in part) there shall be paid to the
Minority Vendors out of the Escrow Account the amount retained on
account of that Claim (or the relevant part) or (if less) that part of
the Retention as shall exceed the Outstanding Claims for the time
being; and
8.6.3 any amount which shall continue to be retained in the Escrow Account
after the Release Date in respect of a particular Claim or (if less)
that part (if any) of the Retention as shall exceed the Outstanding
Claims for the time being shall nevertheless be released to the
Minority Vendors twelve months after the Claim shall have been made or
(if later) nine months after the Release Date unless the Purchaser
shall have commenced legal proceedings in respect of that Claim by the
later of those two dates.
8.7 A Claim shall be deemed to be finally decided if and when determined
by a court of competent jurisdiction from which there is no appeal or
from whose judgment the Minority Vendors' or the Purchaser (as the
case may be) do or does not appeal within any applicable time limit.
8.8 For the purposes of this agreement:-
8.8.1 legal proceedings shall not be deemed to have been commenced by the
Purchaser unless they have been both issued and served on the Minority
Vendors'; and
8.8.2 the amount of the Retention shall not be regarded as imposing any
limit on the amount of any proper claims under this agreement or the
Tax Deed.
8.9 Any sums paid out of the Escrow Account in accordance with this claim
shall be paid together with any interest which shall have accrued on
the sums so paid.
8.10 Until paid or released to the Minority Vendors, the Retention shall
belong to the Purchaser and the Minority Vendors shall have no
interest therein.
8.11 The Minority Vendors and the Purchaser agree to deliver irrevocable
instructions to their respective Solicitors in the Agreed Form so as
to enable them to deal with the Escrow Account in accordance with the
provisions of this clause.
8.12 Any payment of the Retention or any part thereof to the Minority
Vendors shall be made to them in the proportions set out in column 4
of part 1 of the first schedule.
8.13 An amount equal to Taxation on interest earned in respect of monies on
the Escrow Account shall be paid out of the Escrow Account to any
person who shall be liable to any such Taxation liability by the date
on which such Taxation shall be first due for payment (unless and to
the extent that such monies shall already have been paid to such
person) provided that the payee shall have delivered a copy of any tax
demand (or other good evidence of the liability) to the other parties.
9 UNDERTAKINGS BY THE VENDORS
- ---------------------------
9.1 The Vendors undertake to the Purchaser that as soon as possible
following Completion they will procure the execution of any document
which the Purchaser may reasonably require them to have executed so as
to:
9.1.1 vest effectively the beneficial and legal ownership of the Shares in
the Purchaser or as it may direct free from all liens, charges,
encumbrances and adverse claims;
9.1.2 (for those Vendors who are also Optionholders) release the Company
from its obligations to allot and issue shares to those Vendors
pursuant to the Options; and
9.1.3 otherwise to give effect to the terms of this agreement.
9.2 The Vendors shall indemnify the Company and the Subsidiaries against
all claims which may be made against them by any person whose
resignation
from office or relinquishment of rights the Vendors may be obliged to
procure in order to comply with this agreement by reason of the
resignation or removal from office or termination of employment of
such person and against all costs incurred by it which are incidental
to any such claim.
9.3 The Vendors undertake with the Purchaser that, if and for so long as
they remain the registered holders of any of the Shares (or the
Options) after Completion, they will hold the Shares and the dividends
and other distributions of profits or surplus or other assets in
respect of such Shares and all rights arising out of or in connection
with them in trust for the Purchaser and will at all times after
Completion deal with and dispose of such Shares, dividends,
distributions and rights as the Purchaser shall direct and (if so
requested by the Purchaser) execute all instruments of proxy or other
documents which may be necessary or proper to enable the Purchaser to
attend and vote at any meeting of the Company and the Subsidiaries.
9.4 The Vendors undertake to the Purchaser that they shall pay to the
Purchaser forthwith on demand an amount equal to any fines or other
financial penalties imposed on the Company the Subsidiaries or their
officers at any time prior to 30 September 2001 in relation to any
contravention of the Consumer Credit ▇▇▇ ▇▇▇▇ or the Data Protection
▇▇▇ ▇▇▇▇ by reason of any act or omission which shall have been
committed on or prior to the date of this agreement together with an
amount equal to all costs, charges, expenses, liabilities and losses
which the Company the Subsidiaries or their officers shall:-
9.4.1 incur in connection with defending any proceedings which shall be
brought against it (or them) in relation to such matters; or
9.4.2 suffer as a consequence of having contravened such Acts; and for this
purpose there shall be included any loss of profit or material damage
to its goodwill and reputation which the Company or the Subsidiaries
shall suffer as a consequence of it or its officers having been found
guilty of any such contravention or the effects of any penalties or
sanctions imposed on it in relation to such contravention;
provided that the Purchaser shall not be entitled to bring a claim
pursuant to this clause in respect of the contravention of a
particular provision of the
Consumer Credit ▇▇▇ ▇▇▇▇ or the Data Protection ▇▇▇ ▇▇▇▇ unless the
Purchaser shall have taken all reasonable steps during the first three
months after Completion to require the Company to alter its procedures
to those which it shall be advised by its solicitors shall comply in
all material respects with that provision.
9.5 The Vendors undertake to the Purchaser that they shall pay to the
Purchaser forthwith upon demand (subject to such demand being made on
or before 30 September 2001 in accordance with the provisions of
clause 7.2) an amount equal to the Litigation Excess.
9.5.2 For the purpose of this clause 9.5, "Litigation Excess" means the
-------------------
amount by which all the claims, penalties, costs, expenses, legal fees
and other liabilities arising from all the matters set out in clause
9.5.3 exceed (Pounds)30,000 in total:-
9.5.3 The matters referred to in this clause 9.5.3 are as follows:-
9.5.3.1 The dispute with Ms ▇▇▇▇▇▇▇▇ Power relating to the termination of her
employment with the Company alleging discrimination on the grounds of
sex.
9.5.3.2 The dispute with ▇▇▇▇▇▇ ▇▇▇▇ relating to the termination of her
employment with the Company alleging discrimination on the grounds of
sex.
9.5.3.3 The dispute with AA Financial Services and Lombard North Central Plc
relating to a series of cheque frauds which took place at the end of
1996 and early 1997.
9.5.3.4 The dispute with Swift Advertising International Limited.
9.5.3.5 The dispute with ▇▇▇▇▇▇ ▇▇▇▇▇▇ relating to the termination of her
employment with the Company alleging unfair dismissal.
9.5.4 The Vendors shall not be entitled to avoid or reduce any liability
pursuant to this clause by reason of any matters contained in the
Disclosure Letter or any other provisions of this agreement.
10 RESTRICTIONS ON THE MAJORITY VENDORS
-- ------------------------------------
10.1 In this clause:-
"Business" means the Group's business of First Party Cheque Cashing,
--------
Third Party Cheque Cashing, Money Transfers, pawn broking and motor
vehicle and general insurance or any part thereof as carried out by
the Group at the date of this agreement;
"directly or indirectly" means (without prejudice to the generality of
----------------------
the expression) either alone or jointly or in partnership with any
other person, firm or company or (except as the holder for investment
purposes only of securities in any company not exceeding 5 per cent in
nominal value of the securities of that class in issue or shares) as
the holder of any interest in or as an employee director agent or
representative of or consultant to any other person firm or company;
and
"Restriction Period" means the period of 5 years from Completion.
------------------
10.2 Each Majority Vendor undertakes to the Purchaser (for itself and for
the benefit of the Company and the Subsidiaries) that he will not
(other than for and on behalf of the Group) without the prior written
consent of the Purchaser directly or indirectly:-
10.2.1 at any time during the Restriction Period, be engaged or concerned or
interested or participate in or carry on any business which is the
same as or similar to or in competition with the Business within a
radius of 5 miles of any of the Properties or within a radius of 5
miles from any other retail premises from which the Company, the
Purchaser or any subsidiary of the Company or the Purchaser shall
carry on the Business at any time during the Earn Out Period; or
10.2.2 at any time during the Restriction Period, in relation to a business
which may in any way be the same as or similar to or in competition
with the Business, offer employment to or employ or offer or conclude
any contract for services with any person who at any time during the
two years before Completion shall have been a director, manager or
employee of the Group entitled to emoluments (including commission if
any) exceeding the annual rate of (Pounds)15,000; or
10.2.3 at any time during the Restriction Period, knowingly assist any
competitor of the Company or any of the Subsidiaries to a material
extent in carrying on or developing any business which may in any way
be the same as or similar to or in competition with the Business; or
10.2.4 at any time, entice or endeavour to entice any person to breach his
contract for services with the Group or the Purchaser;
10.2.5 at any time, (except as required by law) disclose to any person or use
for his own benefit (or that of any other person) any information or
know-how of a confidential nature concerning and relating to the
goodwill of the Group including (without limitation) information and
know-how as to procedures, techniques, customers, finances, business
policy and expansion or forward planning programmes which he shall
have acquired before Completion; or
10.2.6 at any time, falsely represent himself as being connected with or
interested in the Group; or
10.2.7 at any time, do or say anything likely or calculated to lead any
person, firm or company to withdraw from or cease to continue offering
to the Group any rights then enjoyed by it or in any other way to
cease to do business or reduce the amount of business it transacts
with any member of the Group; or
10.2.8 at any time carry on a business under the name "Cash a Cheque" or any
part combination or abbreviation of such name or any similar or other
names likely to confuse or mislead any part of the public.
10.3 Each of the Majority Vendors represent and warrant to the Purchaser
(for the purpose of justifying the reasonableness of the restrictions
contained in clause 10.2) that so far as they are aware
10.3.1 75% of the number of the Company's customers for whom the Group
encashed a cheque during the period of 12 months prior to the date of
this agreement lived within a radius of 5 miles from the Property at
which their cheques were encashed at the time their cheques were
encashed by the Group; and
10.3.2 of those 75% of the Company's customers, a substantial number live
within a 3 mile radius of that Property.
10.4 Each of the Majority Vendors acknowledge and agree with the Purchaser
that:-
10.4.1 each of the sub-clauses contained in clause 10.2 constitutes an
entirely separate saveable and independent covenant by and restriction
on him;
10.4.2 the duration, extent and application of each of the restrictions
contained in clause 10.2 are no greater than is necessary for the
protection of the goodwill and trade connections of the Business and
the value of the Company; and
10.4.3 if any restriction contained in clause 10.2 shall be found void but
would be
valid if some part thereof were deleted such restriction shall apply
with any such deletion as may be necessary to make it valid and
effective.
10.5 The restrictions set out in the clause 10.2 shall not restrict:-
10.5.1 either ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ from continuing to
hold their current shareholding in Excel Insurance Limited ("Excel")
-------
and from continuing to participate in the management of Excel on the
same basis that currently exist; but this clause 10.5.1 is itself
subject to the following qualifications, namely:-
10.5.1.1 that, so far as concerns ▇▇▇▇ ▇▇▇, this clause 10.5.1 shall be read
subject to the terms of his employment with the Company from time to
time after Completion; and
10.5.1.2 the scope of Excel's activities continues to be restricted to
commercial, general and motor insurance from ▇▇▇▇▇▇ Keynes; or
10.5.2 membership of the British Cheque Cashers Association and the National
Pawnbrokers Association.
11 GUARANTEE
-- ---------
11.1 In consideration of the Vendors entering into this agreement with the
Purchaser at the request of the Guarantor (and for other valuable
consideration the receipt and sufficiency of which the Guarantor
acknowledges), the Guarantor guarantees to the Vendors the due and
punctual payment of all monies due by the Purchaser to the Vendors and
performance of all the Purchaser's other obligations arising under
this agreement.
11.2 The Guarantor's guarantee ("Guarantee") shall constitute a direct
-----------
primary and unconditional liability to:-
11.2.1 pay on demand to the Vendors any sum or sums which the Purchaser may
become liable to pay; or
11.2.2 perform on demand any obligations of the Purchaser arising under this
agreement without the need for any claim or recourse on the part of
the Vendors against the Purchaser.
11.3 The Guarantee shall not be affected by:-
11.3.1 by any time or indulgence granted to the Purchaser by the Vendors or
any variation, act, omission, deed or matter of whatever description
whereby the Guarantor as surety only would or might have been
released;
11.3.2 by any legal limitation, disability or other circumstances (including
for the avoidance of doubt any winding up or cessation of trade)
relating to the Purchaser; or
11.3.3 any irregularity, unenforceability or invalidity of any obligations of
the Purchaser under this agreement.
11.4 The Guarantee shall be a continuing guarantee and shall remain in
force until all the Purchaser's obligations under this agreement have
been performed.
12 NATURE OF OBLIGATIONS
-- ---------------------
12.1 Each of the obligations, representations, warranties, indemnities and
undertakings entered into or made by or on behalf of any of the
parties to this agreement (excluding any obligation fully performed at
Completion) shall continue in full force and effect notwithstanding
Completion taking place.
12.2 The rights and remedies of the Purchaser in respect of a breach of any
provision of this agreement or pursuant to the Tax Deed shall not be
affected by Completion.
12.3 Any right or remedy of the Purchaser in respect of a breach of any
provision of this agreement shall be in addition and without prejudice
to all other rights and remedies of the Purchaser and the exercise or
failure to exercise any such right or remedy shall not constitute a
waiver or by the Purchaser of that or of any of its other rights or
remedies.
12.4.1 None of the rights or obligations referred to in this agreement may be
assigned or transferred to any other person without the prior written
consent of all the parties to this agreement save as provided in
clause 12.4.2.
12.4.2 This agreement shall be personal to the parties to it and may not
be assigned by them save that the benefit (but not the burden) of any
of its provisions may be assigned by the Purchaser to:-
12.4.2.1 any company (an "associated company") which shall be a subsidiary of
--------------------
the Purchaser or which shall be a holding company of the Purchaser or
a subsidiary of such holding company but only for so long as such
company
remains an associated company of the Purchaser and upon such company
ceasing to be an associated company this agreement shall immediately
be reassigned to the Purchaser; or
12.4.2.2 the Purchaser's bankers and/or insurers.
12.5 This agreement shall be binding against and be for the benefit of each
party's personal representatives or other permitted successors in
title.
12.6 Any liability of any of the Vendors to the Purchaser under this
agreement or the Tax Deed may in whole or in part be released,
compounded or compromised or time or indulgence given by the Purchaser
(in its absolute discretion) as regards any of the Vendors without in
any way prejudicing or affecting the Purchaser's rights against any of
the others of them in respect of the same or a like liability.
13 ANNOUNCEMENTS
-- -------------
The parties shall procure that an announcement is made in the Agreed
Form immediately after Completion and undertake that none of them
shall make any other announcement or issue any circular to the press
or shareholders (otherwise than as required by law or in accordance
with the requirements of any recognised stock exchange) concerning the
terms and conditions of this agreement without the text of such
announcement or circular first being approved by the other parties
(such approval not to be unreasonably withheld or delayed).
14 GENERAL
-- -------
14.1 This agreement together with any other documents which this agreement
expressly requires shall be signed shall constitute the entire
understanding and agreement between the parties to it in relation to
the subject matter of this agreement.
14.2 Any variation of this agreement shall be binding only if it is
recorded in a document signed by or on behalf of all the parties to
this agreement.
14.3 Each party shall pay its own costs in relation to the negotiations
leading up to the sale of the Shares and to the preparation, execution
and carrying into effect of this agreement and of all the other
documents referred to in it.
14.4 Each of the Vendors hereby irrevocably appoints ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇ jointly and severally to be his/its true and
lawful attorneys ("Vendors' Representatives") with full power for
--------------------------
him/them and in his/its name or in the names of the Vendors'
Representatives and on behalf of the relevant Vendor to do and perform
any of the acts and things to be done and performed by the relevant
Vendor, to receive any notice to be sent to any one or more of the
Vendors and to approve, complete, sign, execute and deliver any and
all documents and deeds as the Vendors' Representatives, in their
absolute discretion, may think necessary or desirable to be approved,
completed, signed, executed or delivered by the relevant Vendor in
connection with or relating to any matters relating to this agreement,
including, without limitation, to agree to:-
14.4.1 the terms upon which any claim made by the Purchaser under this
agreement (whether pursuant to the Warranties or otherwise) or the Tax
Deed may be compromised or settled;
14.4.2 the calculation of any payment which may become due to the Vendors in
relation to the South Payment or pursuant to the sixth schedule; and
14.4.3 any relaxation or modification of the provisions of paragraph 6 of the
sixth schedule or to give any consent required to be given by or on
behalf of the Vendors pursuant to that paragraph; and to do or refrain
from doing all such further acts and things, and to execute all such
agreements, deeds and other documents, as the Vendors' Representatives
shall deem necessary or appropriate in connection with any of the
transactions or other matters whatsoever contemplated under this
agreement.
15 COMMUNICATIONS
-- --------------
15.1 All communications between the parties with respect to this agreement
shall be in writing and delivered by hand or sent by pre-paid post,
(first class if inland, airmail if overseas) to the address of the
addressee as set out in clause 15.3, or to such other address in
England as the addressee may from time to time have notified for the
purposes of this clause or as specified in clause 16.2. Each of the
Vendors agree that any notice sent to the Vendors Representative or
the addressee specified in clause 16.2, shall be deemed to be proper
and good notice and validly served.
15.2 Communications shall be deemed to have been received:-
15.2.1 if delivered by hand, on the day of delivery;
15.2.2 if sent by first class post, two Business Days after posting exclusive
of the day of posting (or five Business Days in the case of a posting
to an address outside the United Kingdom).
15.3 Communications to:-
15.3.1 each of the Vendors shall be sent to the Vendors' Representatives, at
the addresses set out in this agreement;
15.3.2 the Purchaser shall be sent to the following address:
Dollar Financial Group Inc., ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇
Fax No: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Marked for the attention of: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
15.3.3 the Guarantor, shall be sent to the following address:-
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇
Fax No: ▇▇ ▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Marked for the attention of: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
15.4 Communications addressed to the Purchaser and the Guarantor shall, at
the same time as they are sent to the relevant party be copied to ▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ at the Purchaser's Solicitors;
15.5 In proving service:-
15.5.1 by delivery by hand, it shall be necessary only to produce a receipt
for the communication signed by or on behalf of the addressee; and
15.5.2 by post, it shall be necessary only to prove that the communication
was contained in an envelope which was duly addressed and posted in
accordance with this clause.
16 PROPER LAW
-- ----------
16.1 This agreement shall be governed by English Law and the parties
irrevocably submit to the exclusive jurisdiction of the English
Courts.
16.2 Each of the Vendors irrevocably nominates and instructs all and any of
the Vendors' Representatives and each of the Purchaser and the
Guarantor irrevocably nominates and instructs the Purchaser's
Solicitors to receive service of any notice or proceedings required to
be served upon or given to them or any of them pursuant to this
agreement.
FIRST SCHEDULE
--------------
PART 1
------
THE VENDORS
-----------
Majority Vendors
----------------
Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Column 7
-------- -------- -------- -------- -------- ----------- ---------
Name and address Number of Shares held Proportion of Proportion Proportion of Proportion of Proportion of
Consideration of the the Second Consideration liability for
A Shares B Shares Options receivable at Retention and Third receivable, expressed a Breach of
Completion receivable Instalments as a percentage of warranty
receivable total consideration
received and
receivable by the
Majority Vendors
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ 115,942 - 48,309 4.624258% Nil 4,288778% 7.2931606% 4.62425%
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, 302,469 74,074 24,154 15.018129% Nil 13.928595% 23.6858824% 15.018129%
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
35
Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Column 7
-------- -------- -------- -------- -------- ----------- ---------
Name and address Number of Shares held Proportion of Proportion Proportion of Proportion of Proportion of
Consideration of the the Second Consideration liability for
A Shares B Shares Options receivable at Retention and Third receivable, expressed a Breach of
Completion receivable Instalments as a percentage of warranty
receivable total consideration
received and
receivable by the
Majority Vendors
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ 30,864 - - 1.230987% Nil 1.141681% 1.9414544% 1.230987%
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
May, ▇▇▇▇ ▇▇▇▇▇▇ 244,470 74,074 30,864 12.704884% Nil 11.783171% 20.0375408% 12.704884%
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
May, ▇▇▇▇▇▇▇▇▇ 30,864 - - 1.230987% Nil 1.141681% 1.9414544% 1.230987%
▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
36
Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Column 7
-------- -------- -------- -------- -------- ----------- ---------
Name and address Number of Shares held Proportion of Proportion Proportion of Proportion of Proportion of
Consideration of the the Second Consideration liability for
A Shares B Shares Options receivable at Retention and Third receivable, expressed a Breach of
Completion receivable Instalments as a percentage of warranty
receivable total consideration
received and
receivable by the
Majority Vendors
▇▇▇▇▇▇, ▇▇▇▇▇▇ 294,691 74,074 24,154 14.707910% Nil 13.640882% 23.1966190% 14.707910%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
"The Bails"
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ 46,088 - 30,864 1.838185% Nil 1.704828% 2.8990977% 1.838185%
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 50,000 - - 1.994212% Nil 1.849536% 3.1451763% 1.994212%
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
37
Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Column 7
-------- -------- -------- -------- -------- -------- --------
Name and address Number of Shares held Proportion of Proportion Proportion of the Proportion of Proportion of
Consideration of the Second and Third Consideration liability for a
A Shares B Shares Options receivable at Retention Instalments receivable, expressed Breach of
Completion receivable receivable as a percentage of warranty.
the total
consideration
received and
receivable by the
Majority Vendors
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 46,376 - - 1.849671% Nil 1.715481% 2.9172139% 1.849671%
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 92,788 - 24,154 3.700778% Nil 3.432295% 5.8366924% 3.700778%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 3,300 - - 0.131618% Nil 0.122069% 0.2075816% 0.131618%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ 109,662 - 28,865 4.373783% Nil 4.056476% 6.8981265% 4.373783%
38
Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Column 7
-------- -------- -------- ------- ------- ------- --------
Name and address Number of Shares held Proportion of Proportion Proportion of the Proportion of Proportion of
Consideration of the Second and Third Consideration liability for a
A Shares B Shares Options receivable at Retention Instalments receivable, expressed Breach of
Completion receivable receivable as a percentage of warranty.
the total
consideration
received and
receivable by the
Majority Vendors
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇
Majority Vendors
Total: --------- ------- -------
1,367,514 222,222 211,364
--------- ------- -------
39
The Minority Vendors
--------------------
Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Column 7
-------- -------- -------- -------- -------- -------- --------
Name and address Number of Shares Proportion of Proportion Proportion of the Proportion of Proportion of
held Consideration of the Second and Third Consideration liability for a
receivable at Retention Instalments receivable, expressed breach of
Completion receivable receivable as a percentage of warranty
the total
consideration
received and
receivable by the
Minority Vendors
AIB Nominees 57,728 "A" 2.302437% 6.619432% 2.135400% 6.619432% 2.302437%
(Jersey) Limited Ordinary Shares
AIB House
▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Channel Islands
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Guy 25,000 "A" 0.997106% 2.866647% 0.924768% 2.866647% 0.997106%
▇▇▇▇▇ Ordinary Shares
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
40
Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Column 7
-------- -------- -------- -------- -------- -------- --------
Name and address Number of Shares held Proportion of Proportion Proportion of the Proportion of Proportion of
Consideration of the Second and Third Consideration liability for a
receivable at Retention Instalments receivable, expressed breach of
Completion receivable receivable as a percentage of warranty
the total
consideration
received and
receivable by the
Minority Vendors
Avrocet Trading 77,295 "A" 3.082852% 8.863099% 2.859197% 8.863099% 3.082852%
Company Limited Ordinary Shares
▇▇ ▇▇▇ ▇▇▇
Channel House
Forest Lane
St ▇▇▇▇▇ Port
Guernsey GY1 2NF
Channel Islands
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 50,000 "A" 1.994212% 5.733294% 1.849536% 5.733294% 1.994212%
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
41
Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Column 7
-------- -------- -------- -------- -------- -------- --------
Name and address Number of Shares held Proportion of Proportion Proportion of the Proportion of Proportion of
Consideration of the Second and Third Consideration liability for a
receivable at Retention Instalments receivable, expressed breach of
Completion receivable receivable as a percentage of warranty
the total
consideration
received and
receivable by the
Minority Vendors
▇▇▇▇▇, ▇▇▇▇▇ 7,776 "A" 0.3101410% 0.891642% 0.287640% 0.891642% 0.310140%
▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ Shares
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ 3,912 "A" 0.156027% 0.448573% 0.144708% 0.448573% 0.156027%
Balsoon House Ordinary Shares
Bective Havan
Co Meath Eire
▇▇▇▇▇▇, ▇▇▇▇▇▇ 26,932 "A" 1.074162% 3.088182% 0.996234% 3.088182% 1.074162%
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇
42
Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Column 7
-------- -------- -------- -------- -------- -------- --------
Name and address Number of Shares held Proportion of Proportion Proportion of the Proportion of Proportion of
Consideration of the Second and Third Consideration liability for a
receivable at Retention Instalments receivable, breach of
Completion receivable receivable expresse as a warranty
percentage of
the total
consideration
received and
receivable by the
Minority Vendors
▇▇▇▇▇▇, ▇▇▇▇▇▇ 26,932 "A" 1.704162% 3.088182% 0.996234% 3.088182% 1.074162%
Edington Priory Ordinary Shares
near ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇▇▇ 15,000 "A" 0.598264% 1.719988% 0.554861% 1.719988% 0.598264%
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇ ▇▇▇
43
Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Column 7
-------- -------- -------- -------- -------- -------- --------
Name and address Number of Proportion of Proportion Proportion of the Proportion of Proportion of
Shares held Consideration of the Second and Third Consideration liability for a
receivable at Retention Instalments receivable, expressed breach of
Completion receivable receivable as a percentage of warranty
the total
consideration
received and
receivable by the
Minority Vendors
Free, ▇▇▇▇▇▇ 24,662 "A" 0.983625% 2.827890% 0.912265% 2.827890% 0.983625%
▇▇▇▇▇▇ Green House Ordinary Shares
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ 15,000 "A" 0.598264% 1.719988% 0.554861% 1.719988% 0.598264%
▇/▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Shares
Ltd
▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇
Eire
44
Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Column 7
-------- -------- -------- --------- --------- -------- --------
Name and address Number of Shares held Proportion of Proportion of Proportion of Proportion of Proportion of
Consideration the Retention the Second Consideration liability for
receivable at receivable and Third receivable, a breach of
Completion Instalments expressed as a warranty
receivable percentage of the
total
consideration
received and
receivable by the
Minority Vendors
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 100,000 "A" 3.988423% 11.466588% 3.699072% 11.466588% 3.988423%
▇▇▇▇▇▇▇ Ordinary Shares
▇/▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇
Eire
The Royal Bank of 30,000 "A" 1.196527% 3.439976% 1.109721% 3.439976% 1.196527%
Scotland Trust Ordinary Shares
Company (IOM)
Limited.
As Trustees of the
Amoeba Fund.
▇▇ ▇▇▇ ▇▇▇
Victoria House
Prospect ▇▇▇▇
▇▇▇▇▇▇▇ Isle of Man
45
Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Column 7
-------- -------- -------- -------- --------- -------- ---------
Name and address Number of Proportion of Proportion of Proportion of Proportion of Consideration Proportion
Shares held Consideration the Retention the Second and receivable, expressed as a of liability
receivable at receivable Third percentage of the total for a breach
Completion Instalments consideration received and of warranty
receivable receivable by the Minority
Vendors
Hansa, Umradia 3,864 "A" 0.154113% 0.443069% 0.142932% 0.443069% 0.154113%
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Shares
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Continental Assets 3,864 "A" 0.154113% 0.443069% 0.142932% 0.443069% 0.154113%
& Securities Ordinary Shares
Limited
4 BIS
▇▇▇▇▇ ▇▇▇▇▇▇▇
Beaubassin
Mauritius
46
Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Column 7
-------- -------- -------- -------- -------- -------- --------
Name and address Number of Proportion of Proportion of Proportion of Proportion of Proportion of
Shares held Consideration the Retention the Second and Consideration liability for a
receivable at receivable Third receivable, breach of
Completion Instalments expressed as warranty
receivable a percentage
of the total
consideration
received and
receivable by
the Minority
Vendors
Glenross 3,864 "A" 0.154113% 0.443069% 0.142932% 0.443069% 0.154113%
International Ordinary
Limited Shares
Centurion House
PO Box 702
▇▇▇▇▇▇▇▇▇ Street
St Helier
Jersey
Channel Islands
Valmet Isle of Man 50,000 "A" 1.994212% 5.733294% 1.849536% 5.733294% 1.994212%
Limited Ordinary
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ Road
▇▇▇▇▇▇▇
Isle of Man
IM1 2PT
47
Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Column 7
-------- -------- -------- -------- -------- -------- --------
Name and address Number of Shares Proportion of Proportion of Proportion of Proportion of Proportion of
held Consideration the Retention the Second Consideration liability for a
receivable at receivable and Third receivable, expressed a breach of
Completion Instalments as a percentage of warranty
receivable the total
consideration
received and
receivable by the
Minority Vendors
▇▇▇▇▇▇▇▇ Limited 350,270 "A" 13.970251% 40.164018% 12.956738% 40.164018% 13.970251%
▇/▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇
Peregrine House
Peel Road
▇▇▇▇▇▇▇
Isle of Man
IM99 1SU
Minority
Shareholders Total: 872,099
-------
48
FIRST SCHEDULE
--------------
PART 2
------
OPTIONS PLEASE COMPLETE
-------
Column 1 Column 2 Column 4 Column 5 Column 6 Column 7
-------- -------- -------- -------- -------- --------
Optionholder Number of Option Price Special Terms Proportion of Proportion of the
Options to (Pounds) Consideration Second and Third
subscribe "A" receivable at Instalments
ordinary Completion receivable
shares in the
Company
▇▇▇▇ ▇▇▇ 30,864 None 0.231480% 1.141680%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 30,864 None 0.231480% 1.141680%
▇▇▇▇▇▇▇▇ 24,154 None 0.181155% 0.893474%
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ 24,154 None 0.181155% 0.893474%
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 24,154 None 0.181155% 0.893474%
▇▇▇▇ ▇▇▇▇▇▇▇ 48,309 None 0.362318% 1.786985%
▇▇▇ ▇▇▇▇▇ 4,026 None 0.030195% 0.148925%
▇▇▇▇▇▇ ▇▇▇▇▇▇ 4,026 None 0.030195% 0.148925%
▇▇▇▇▇▇ ▇▇▇▇▇▇ 4,026 None 0.030195% 0.148925%
▇▇▇▇▇▇ ▇▇▇▇▇▇ 4,026 None 0.030195% 0.148925%
49
Column 1 Column 2 Column 4 Column 5 Column 6 Column 7
-------- -------- --------- -------- -------- --------
Optionholder Number of Option Price Special Terms Proportion of Proportion of the
Options to (Pounds) Consideration Second and Third
subscribe "A" receivable at Instalments
ordinary shares Completion receivable
in the Company
▇▇▇▇▇▇▇ Way 4,026 None 0.030195% 0.148925%
▇▇▇▇▇ ▇▇▇▇▇▇▇ 4,026 None 0.030195% 0.148925%
▇▇▇▇▇ ▇▇▇▇ 2,000 None 0.015000% 0.073981%
▇▇▇▇▇▇▇ ▇▇▇▇▇ 4,026 None 0.030195% 0.148925%
▇▇▇ ▇▇▇▇▇▇▇ 28,865 None 0.216487% 1.067737%
Total Options 241,546
-------
50
SECOND SCHEDULE
---------------
PART 1
------
THE COMPANY
-----------
Registered number:- 3449905
Date of Incorporation:- 14 October 1997
Incorporated under the Companies ▇▇▇ ▇▇▇▇
Registered Office:- 1 & ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Authorised Capital:- (Pounds)285,000 representing 2,627,778 "A"
Ordinary Shares of 10p each and 222,222 "B"
Ordinary Shares of 10p each
Issued Capital:- 2,239,613 "A" Ordinary Shares of 10p each and
222,222 "B" Ordinary Shares of 10p each
Shareholders:- AIB Nominees (Jersey) Limited - 57,728 "A"
Ordinary Shares
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ - 25,000 "A" Ordinary Shares
Avrocet Trading Company Limited - 77,295 "A"
Ordinary Shares
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ - 50,000 "A" Ordinary Shares
▇▇▇▇▇, ▇▇▇▇▇ - 7,776 "A" Ordinary Shares
▇▇▇▇▇▇, ▇▇▇▇▇▇ - 3,912 "A" Ordinary Shares
▇▇▇▇▇▇, ▇▇▇▇▇▇ - 26,932 "A" Ordinary Shares
▇▇▇▇▇▇, ▇▇▇▇▇▇ - 26,932 "A" Ordinary Shares
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ - 302,469 "A" Ordinary
Shares
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ - 30,864 "A" Ordinary Shares
▇▇▇▇, ▇▇▇▇▇ - 15,000 "A" Ordinary Shares
Free, ▇▇▇▇▇▇ - 24,662 "A" Ordinary Shares
▇▇▇▇▇, ▇▇▇▇▇▇ - 15,000 "A" Ordinary Shares
▇▇▇▇▇▇▇▇ Limited ▇/▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ - ▇▇▇,▇▇▇
"A" Ordinary Shares
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ - 115,942 "A" Ordinary Shares
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - 100,000 "A" Ordinary
Shares
May, ▇▇▇▇ ▇▇▇▇▇▇ - 244,470 "A" Ordinary Shares
May, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - 30,864 "A" Ordinary Shares
▇▇▇▇▇▇, ▇▇▇▇▇▇ - 294,691 "A" Ordinary Shares
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ - 46,088 "A" Ordinary Shares
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ - 50,000 "A" Ordinary Shares
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ - 46,376 "A" Ordinary Shares
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ - 92,788 "A" Ordinary Shares
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ - 3,300 "A" Ordinary Shares
▇▇▇▇▇▇▇, ▇▇▇ - 109,662 "A" Ordinary Shares
The Royal Bank of Scotland Trust Company (IOM)
Limited -30,000 "A" Ordinary Shares
Umradia, Hansa - 3,864 "A" Ordinary Shares
Continental Assets & Securities Limited - 3,864
"A" Ordinary Shares
Glenross International Limited - 3,864 "A"
Ordinary Shares
Valmet Isle of Man Limited - 50,000 "A" Ordinary
Shares
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ - 74,074 "B" Ordinary
Shares
May, ▇▇▇▇ ▇▇▇▇▇▇ - 74,074 "B" Ordinary Shares
▇▇▇▇▇▇, ▇▇▇▇▇▇ - 74,074 "B" Ordinary Shares
Directors:- ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇
Secretary:- ▇▇▇ ▇▇▇▇▇▇▇
Accounting Reference Date:- 30 June
Subsisting Mortgages and Charges:- Mortgage Debenture in favour of NatWest Bank
created on 14/1/1999 and registered on
01/02/1999 securing all monies due or to
become due from the Company to the chargee
on any account whatsoever by way of a
specific equitable charge over all freehold
and leasehold properties and/or the proceeds
of sale thereof, fixed and floating charges
over undertaking and all property and assets
present and future including goodwill, book
debts and the benefits of any licences.
Part 2
------
THE SUBSIDIARIES
----------------
Name: Cash a Cheque Great Britain Limited
Registered number:- 3366658
Date of Incorporation:- 7 May 1997
Incorporated under the Companies ▇▇▇ ▇▇▇▇
Registered Office:- 1 & ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Authorised Capital:- 100,000 ordinary shares of (Pounds)1 each
Issued Capital:- 100,000 ordinary Shares of (Pounds)1 each
Shareholders:- Cash a Cheque Holdings Great Britain Limited:
100,000 ordinary shares
Directors:- ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇
Secretary:- ▇▇▇ ▇▇▇▇▇▇▇
Accounting Reference Date:- 30 June
Subsisting Mortgages and Charges:- Mortgage Debenture in favour of NatWest Bank
created on 14/1/1999 and registered on
29/01/1999 securing all monies due or to
become due from the Company to the chargee
on any account whatsoever by way of a
specific equitable charge over all freehold
and leasehold properties and/or the proceeds
of sale thereof, fixed and floating charges
over undertaking and all property and assets
present and future including goodwill, book
debts and the benefits of any licences.
Name: C.C. Financial Services Limited
Registered number:- 3492581
Date of Incorporation:- 14 January 1998
Incorporated under the Companies ▇▇▇ ▇▇▇▇
Registered Office:- 1 & ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Authorised Capital:- 1,000 shares of (Pounds)1 each
Issued Capital:- 2 shares of (Pounds)1 each
Shareholders:- Cash a Cheque Holdings Great Britain Limited: 2
shares of (Pounds)1 each
Directors:- ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Secretary:- ▇▇▇ ▇▇▇▇▇▇▇
Accounting Reference Date:- 30 June
Subsisting Mortgages and Charges:- None
Name: ▇.▇. ▇▇▇▇▇▇▇ & Sons Limited
Registered number:- 508233
Date of Incorporation:- 23 May 1952
Incorporated under the Companies ▇▇▇ ▇▇▇▇
Registered Office:- 1 & ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Authorised Capital:- 250,000 ordinary shares of (Pounds)1 each
Issued Capital:- 9,000 ordinary shares of (Pounds)1 each
Shareholders:- Cash a Cheque Holdings Great Britain Limited: 9,000 ordinary
shares
Directors:- ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇
Secretary:- ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Accounting Reference Date:- 30 June
Subsisting Mortgages and Charges:-1. Single debenture created on 6.1.1988 for
all monies due or to become due from the
Company to the chargee on any account
whatsoever, by way of a fixed and floating
charge over the undertaking and all
property and assets present and future
including goodwill bookdebts uncalled
capital buildings fixtures fixed plant and
machinery in favour of Lloyds Bank PLC.
2. Mortgage created on 27/9/1989 for all
monies due or to become due from the
Company to the chargee on any account
whatsoever, over the freehold property t/a
or being 1 & ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
and all buildings and fixtures and a
floating charge over all movable plant
machinery implements utensils furniture and
equipment and an assignment of the goodwill
(if any) in favour of Lloyds Bank PLC.
3. Mortgage debenture created 14/1/1999 for
all monies due or to become due from the
Company to the chargee on any account
whatsoever by way of a specific equitable
charge over all freehold and leasehold
properties and/or the proceeds of sale
thereof, fixed and floating charges over
undertaking and all property and assets
present and future including Goodwill,
bookdebts and the benefits of any licences
in favour of National Westminster Bank Plc.
Name: Cash a Cheque (GB) Limited
Registered number:- 3078447
Date of Incorporation:- 11 July 1995
Incorporated under the Companies ▇▇▇ ▇▇▇▇
Registered Office:- 1 & ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Authorised Capital:- (Pounds)122,222.20 divided into 1,000,000 "A"
Ordinary Shares of (Pounds)0.10 and 222,222 "B"
Ordinary Shares of (Pounds)0.10
Issued Capital:- 1,000,000 "A" Ordinary Shares of (Pounds)0.10 and
222,222 "B" Ordinary Shares of (Pounds)0.10
Shareholders:- Cash a Cheque Holdings Great Britain Limited,
holds 1,000,000 "A" Ordinary Shares of
(Pounds)0.10 and 222,222 "B" Ordinary Shares of
(Pounds)0.10.
Directors:- ▇▇▇▇ ▇▇▇▇▇▇▇ May
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇
Secretary:- ▇▇▇ ▇▇▇▇▇▇▇
Accounting Reference Date:- 30 June
Subsisting Mortgages and Charges:- Mortgage debenture created on 5/3/1997 for
all monies due or to become due from the
Company to the chargee on any account
whatsoever by way of a specific equitable
charge over all freehold and leasehold
properties and/or the proceeds of sale
thereof, fixed and floating charges over
undertaking and all property and assets
present and future including goodwill,
bookdebts, and the benefits of any licences
in favour of National Westminster Bank Plc.
THIRD SCHEDULE
--------------
THE PROPERTIES
--------------
----------------------------------------------------------------------
1. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
2. ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
3. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ BT
----------------------------------------------------------------------
4. Ground Floor and Basement, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇
----------------------------------------------------------------------
5. ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
6. ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
7. ▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
8. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
9. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
10. ▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
11. ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
12. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
13. ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
14. ▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
15. ▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
16. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
17. ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
18. ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
19. ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
20. ▇▇/▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
21. ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
22. ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------------------------------
23. 2 - ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇
----------------------------------------------------------------------
24. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
25. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ 4AM
----------------------------------------------------------------------
26. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
27. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
28. ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
29. ▇▇▇-▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
30. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
31. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇/▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
32. ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
33. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇
----------------------------------------------------------------------
34. ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
35. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
36. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
37. ▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
----------------------------------------------------------------------
38. ▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
39. ▇▇▇▇ ▇, ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
----------------------------------------------------------------------
40. ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
41. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇
----------------------------------------------------------------------
42. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
43. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
44. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
45. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------------------------------
46. ▇▇ ▇▇ ▇▇▇▇'▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------------------------------
47. ▇-▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
----------------------------------------------------------------------
FOURTH SCHEDULE
---------------
WARRANTIES
----------
Part 1
------
GENERAL
-------
1.1 The Vendors
-----------
1.1.1 The Vendors are the beneficial and legal owners of the Shares (or the
holders of the Options, as the case may be) as set out in the first
schedule and are entitled to sell the Shares to the Purchaser (or
release the Company from its obligations to alert and issue shares
pursuant to the Options) free from all liens charges and encumbrances
without the consent of any third party.
1.1.2 Each of the Vendors have full power and authority to enter into this
agreement and the other documents to be executed in connection with
it, all of which constitute (or will when executed constitute) legal
and valid binding obligations on them enforceable in accordance with
their respective terms.
1.1.3 No bankruptcy order has been made in respect of any of the Vendors or
a petition for such an order presented.
1.1.4 No application has been made in respect of any of the Vendors for an
interim order under section 253 Insolvency ▇▇▇ ▇▇▇▇.
1.1.5 None of the Vendors is unable to pay any debt as that expression is
defined in section 268 Insolvency ▇▇▇ ▇▇▇▇.
1.1.6 No person has been appointed by the court to prepare a report in
respect of any of the Vendors under section 273 Insolvency ▇▇▇ ▇▇▇▇.
1.1.7 No interim receiver has been appointed of the property of any of the
Vendors under section 286 Insolvency ▇▇▇ ▇▇▇▇.
1.1.8 None of the Majority Vendors:-
1.1.8.1 has ever been disqualified from acting as a director of any company;
or
1.1.8.2 has ever been prosecuted for any offence (other than an offence under
the Road Traffic Acts for which a custodial sentence could not be
---
imposed).
1.2 The Shares
----------
The Shares constitute the whole of the issued and allotted share
capital of the Company and are fully paid or credited as fully paid.
1.3 Accuracy of Disclosure Letter
-----------------------------
All statements of fact and information contained or referred to in and
all documents annexed to the Disclosure Letter are true, complete and
accurate and not misleading, all statements of opinion in the
Disclosure Letter have been made after due and careful enquiry and are
reasonably believed to be correct and nothing has been omitted from
the Disclosure Letter which renders any of such statements incomplete,
inaccurate or misleading.
1.4 Licences to purchase shares
---------------------------
All necessary licences, authorisations, orders, grants, consents,
permissions and approvals to the purchase of the Shares by the
Purchaser have been obtained and remain in full force and effect and
there are no circumstances which indicate that any of such licences,
authorisations, orders, grants, consents, permissions or approvals may
be revoked or not renewed, in whole or in part.
1.5 City Code
---------
The Panel on Takeovers and Mergers ("Panel") has confirmed to the
-----
Vendors that the Panel does not consider the City Code on Takeovers
and Mergers to be applicable to the sale and purchase pursuant to this
agreement.
1.6 Applicability of Warranties to the Subsidiaries
-----------------------------------------------
Each of the representations and warranties set out in this schedule
applies (where the context so permits) in relation to each of the
Subsidiaries as it applies to the Company.
Part 2
------
THE COMPANY
-----------
2.1 The Company
-----------
2.1.1 The Company is a private company limited by shares incorporated in
England and the information set out in the second schedule is correct.
2.1.2 The Group's sole business is that of First Party Cheque Cashing, Third
Party Cheque Cashing, Money Transfers, pawn broking, the sale of
mobile telephones, prepaid telephone cards, retail jewellery sales,
jewellery repairs and motor vehicle and general insurance and it has
never carried on any other business.
2.2 Subsidiaries etc
----------------
2.2.1 The Subsidiaries are private companies limited by shares and
incorporated in England, the Company or (where applicable) a
Subsidiary is the sole beneficial owner of all the issued or allotted
shares of the Subsidiaries, all such shares are fully paid or credited
as fully paid and the information set out in part 2 of the second
schedule is correct.
2.2.2 Save for the Subsidiaries the Company does not have, never has had and
has not agreed to acquire any subsidiaries or subsidiary undertakings;
nor is it or ever been and has not agreed to become the legal or
beneficial owner of any share or loan capital of any company; and nor
does the Company control or take part in the management of any other
company or business organisation and it has never done so or agreed to
do so.
2.3 Directors
---------
The Company and the Subsidiaries do not have any directors, shadow
directors or alternate or associate directors other than the persons
listed in the second schedule.
2.4 Trading names etc
-----------------
The Company uses (and during the past three years has used) no name
other than its corporate name for any purpose;
2.5 Agents
------
2.5.1 No person is authorised to act as agent for the Company or to bind the
Company otherwise than the directors of the Company acting as the
Board and certain employees who have authority to enter into routine
trading contracts in the normal course of their duties.
2.5.2 There are no powers of attorney given by the Company which are in
force.
2.6 Share capital
-------------
2.6.1 Since the Balance Sheet Date, no share or convertible securities of
the Company (or any rights or interests therein) have been created,
allotted or issued or agreed to be created, allotted or issued.
2.6.2 The details in part 2 of the first schedule relating to the Options
are correct and there are no other outstanding rights to call for the
creation, allotment, issue, transfer or conversion at any time of any
share or loan capital of the Company
(or any rights or interests therein).
2.6.3 No shares in the capital of the Company have been issued and no
transfer of shares in the capital of the Company has been registered
otherwise than in accordance with the Articles of Association of the
Company from time to time in force and all such transfers have been
duly stamped.
2.7 First Party Cheque Cashing
--------------------------
The Disclosure Letter contains an accurate and detailed analysis of
the procedures followed by the Company in relation to First Party
Cheque Cashing, together with:
2.7.1 an explanation of the legal basis upon which the Company carries on
the business of First Party Cheque Cashing;
2.7.2 details of any advice (professional or otherwise) received on the
drafting of the Company's standard terms of business in relation to
First Party Cheque Cashing, together with an explanation of the
reasons for the changes made from time to time;
2.7.3 details of the Company's policies applied to determine whether it will
encash a First Party Cheque, including the creditworthiness and
suitability of a prospective customer and for enquiries made of the
customer;
2.7.4 copies of all correspondence, notices or other documents sent between
the Company and the Office of Fair Trading at any time in relation to
the Company's business of First Party Cheque Cashing;
2.7.5 details of all infringements of the Consumer Credit ▇▇▇ ▇▇▇▇ committed
by the Company in relation to its business of First Party Cheque
Cashing which have at any time been alleged by or on behalf of the
Office of Fair Trading, any customer of the Company or any other
person; and
2.7.6 details of all prosecutions or notices of intended prosecutions of the
Company which have occurred or been issued at any time in relation to
any real or alleged infringement of the Consumer Credit ▇▇▇ ▇▇▇▇ which
may have been committed by the Company in relation to its business of
First Party Cheque Cashing.
2.8 Cheque Cashing
--------------
2.8.1 The Disclosure Letter contains:-
2.8.1.1 details of any refusals during the period ("the Specified Period") of
----------------------
twelve months prior to the date of this agreement by the Company's
bankers to collect Third Party Cheques encashed by the Company,
together with an explanation in each case of why the refusal was made
and the ultimate resolution or outcome of the matter;
2.8.1.2 details of any challenges to the Company's ability to collect payment
on Third Party Cheques, which shall have been made by paying bank
which amount in the aggregate to more than (Pounds)300,000 in any
consecutive period of three months during the Specified Period;
2.8.12.3 details of all legal proceedings in which the Company has been
involved during the Specified Period in relation to the encashment of
Third Party Cheques for any single claim in excess of (Pounds)5,000.
2.8.2 It is the Group's policy not to accept post dated Customer's Cheques
with or without a cheque guarantee card; and the Vendors acknowledge
that UK clearing banks have no obligation to satisfy any guarantee on
their part to pay a cheque supported by a cheque guarantee card if the
cheque is post dated.
2.9 Consumer Credit ▇▇▇ ▇▇▇▇
------------------------
The Company has complied with all requirements of the Consumer Credit
▇▇▇ ▇▇▇▇ and in particular:-
2.9.1 has a valid and subsisting licence under that Act for all purposes for
which a licence is required in relation to any business carried on by
the Company;
2.9.2 has complied with the terms of such licence(s); and
2.9.3 all agreements made by the Company and all procedures followed by the
Company in the course of any business which it carries on and which
are in any way regulated by that Act, strictly comply with all the
relevant requirements of that Act; and
2.9.4 the Company has never received any notice, letter or complaint
alleging a breach by it of the provisions of that Act and has no
reason to believe that circumstances exist which may give rise to such
notice letter or complaint.
2.10 Statutory and other regulations
-------------------------------
2.10.1 The Company has at all times carried on business and conducted its
affairs in all respects in accordance with its Memorandum and Articles
of Association for the time being in force.
2.10.2 All licences, authorisations, orders, grants, consents, permissions
and approvals necessary to the proper carrying on of the business of
the Company have been obtained and:-
2.10.2.1 the Company is not in breach of any of their terms or conditions; and
2.10.2.2 there are no circumstances which indicate that any of them may be
revoked or not renewed, in whole or in part, whether or not in the
ordinary course of events.
2.10.3 Neither the Company nor any of its officers is in breach of or has
failed to comply in full with any statutory or municipal rules,
regulations and provisions applying to or affecting the business or
activities of the Company.
2.10.4 All documents required by the Companies Act or any other legislation
to be filed with the Registrar of Companies in respect of the Company
have been duly filed and were correct and due compliance has been made
with all other legal requirements in connection with the formation of
the Company and its conduct and all issues and allotments of shares,
debentures and other securities.
2.10.5 So far as the Vendors are aware without having made any enquiry, there
are no investigations or enquiries (pending, threatened or in
existence) by or on behalf of any governmental or other body in
respect of the affairs of the Company or the Vendors.
2.11 Data Protection Act
-------------------
The Company has complied with all requirements of the Data Protection
▇▇▇ ▇▇▇▇ and in particular:-
2.11.1 has registered as a data user under that Act for all purposes for
which registration is required by the business as carried on by the
Company;
2.11.2 has complied with the data protection principles; and
2.11.3 the Company has not received any notice letter or complaint alleging a
breach by it of the provisions of that Act and has no reason to
believe that
circumstances exist which may give rise to such a notice letter or
complaint.
2.12 Statutory books and Memoranda and Articles of Association
---------------------------------------------------------
2.12.1 The Register of Members and other books required by the Companies Act
to be kept by the Company contain an accurate and complete record of
the matters with which they should deal and there has been no notice
of any proceedings to correct or rectify any such books.
2.12.2 The copy of the Memorandum and Articles of Association of the Company
attached to the Disclosure Letter is complete and accurate in all
respects and has embodied in it or annexed to it a copy of every such
resolution and agreement as is referred to in section 380 of the
Companies Act.
2.13 Resolutions
-----------
No resolutions of any kind of the Company or any class of its members
(other than those relating to business at an Annual General Meeting
which is not special business) have ever been passed.
2.14 Insolvency
----------
2.14.1 The Company has never been a party to any transaction to which the
provisions of sections 238 to 246 (inclusive) of the Insolvency ▇▇▇
▇▇▇▇ may be applicable.
2.14.2 No order has been made or petition presented or resolution passed for
the winding up or administration of the Company, no receiver or
administrator or administrative receiver has been appointed or could
lawfully be appointed by any person of the Company's business or
assets or any part thereof, the Company is not insolvent and has not
stopped payment and is not unable to pay its debts (within the meaning
of section 123 of the Insolvency Act 1986) and the Company is capable
of meeting its liabilities as and when they fall due and for the
foreseeable future.
2.15 Purchase of shares
------------------
2.15.1 No person is entitled to receive from the Company any fees, brokerages
or other commissions in connection with the purchase or sale of shares
in the Company.
2.15.2 The Company has not at any time acted in breach of section 151 of the
Companies Act and nor has it ever given financial assistance in
connection
with the acquisition of its own or any holding company's shares in
accordance with the provisions of section 155 of the Companies Act.
2.15.3 The Company has never reduced, purchased or redeemed its share capital
or agreed to do so.
2.16 Registration of charges
-----------------------
All charges in favour of the Company have (if appropriate) been
registered in accordance with the Companies Act.
2.17 Possession of documents
-----------------------
All title deeds relating to the assets of the Company and an executed
copy of all agreements to which Company is a party and the original
copies of all other documents which are owned by, or which ought to be
in the possession of, the Company are in its possession.
2.18 Seal
----
The Company has a common seal.
2.19 Financial Services Act
----------------------
The Company does not carry on or purport to carry on in the United
Kingdom any investment business within the meaning of the Financial
Services ▇▇▇ ▇▇▇▇.
2.20 Money Laundering
----------------
The Company has complied with all the provisions of the Money
Laundering Regulations 1993.
Part 3
------
THE ACCOUNTS
------------
3.1 The Accounts
------------
The Accounts:-
3.1.1 have been prepared in accordance with the historical cost convention
as modified by the revaluation of land and buildings;
3.1.2 comply with the requirements of the Companies Act, all other relevant
statutes, all relevant FRS's and SSAP's, all pronouncements applied to
the Company at the Balance Sheet Date issued or adopted by the
Accounting Standards Board Limited and other generally accepted
accounting practices applicable to a United Kingdom company ("GAAP")
------
and have been audited
in accordance with the Auditing Standards issued by the Auditing
Practices Board;
3.1.3 give a true and fair view of the state of affairs of each of the
Company and the Subsidiaries respectively at the Balance Sheet Date
and in the case of the consolidated balance sheet and the consolidated
profit and loss account give a true and fair view of the state of
affairs at that date and the profit and loss for that period of the
Company and the Subsidiaries as a whole;
3.1.4 disclose a summary of the assets of each of the Company and the
Subsidiaries respectively as at the Balance Sheet Date;
3.1.5 contain proper provision or reserves or appropriate notes in
accordance with GAAP in respect of all liabilities (whether actual or
contingent, quantified or disputed) of each of the Company and the
Subsidiaries respectively as at the Balance Sheet Date;
3.1.6 contain proper provisions or reserves in accordance with GAAP for
Taxation assessed or liable to be assessed on each of the Company and
the Subsidiaries respectively or for which it is or may become liable
up to the Balance Sheet Date and any liability to pay Taxation which
has been deferred for any reason;
3.1.7 contain proper provisions in accordance with GAAP for depreciation and
for any obsolescence of assets (all rates of depreciation being
consistent over the three financial years preceding the Balance Sheet
Date) and the policy of depreciation has been applied in accordance
with SSAP 12;
3.1.8 fully disclose all capital and leasing commitments of each of the
Company and the Subsidiaries respectively; and
3.1.9 are not affected by any extraordinary or non-recurring items.
3.2 Book Debts shown in the Accounts
--------------------------------
Other than Customer Cheques the debts shown in the Accounts (less the
amount of any provision or reserve) were good and collectable in full
in the ordinary and normal course of business and have realised the
net amount thereof and none of those debts was at the Balance Sheet
Date subject to any counter-claim or set off (except to the extent of
any such provision or reserve) or overdue by more than eight weeks;
3.3 Accounting records
------------------
All accounts, books, ledgers, financial and other records of
whatsoever kind of the Company are in the possession of the Company
have been kept and completed in accordance with generally accepted
accounting principles and standards and statutory requirements, show
and explain all transactions entered into by the Company and disclose
with reasonable accuracy the current financial and contractual
position of the Company and contain a record of its assets and
liabilities.
3.4 Management Accounts
-------------------
3.4.1 The management accounts ("the Management Accounts") of the Company for
-------------------------
the period from the Balance Sheet Date to 31 March 1999 copies of
which are annexed to the Disclosure Letter have been prepared by the
Company with due care and attention in accordance with the same
accounting policies as the Accounts, and show a reasonably accurate
and fair view of the state of affairs and profit or loss of the
Company as at and for the period in respect of which they have been
prepared and are not affected by any extraordinary item subject to the
following provisions of this paragraph 3.4
3.4.2 The Vendors state that in relation to the Management Accounts as at 31
March 1999:-
3.4.2.1 some expenses have been estimated based on the Current Plan;
3.4.2.2 cut off procedures have not been applied to normal statutory accounts
standards; and
3.4.2.3 changes arising in the balance sheet contained in the Accounts have
not been reflected;
3.4.2.4 they are not prepared on a statutory basis have not been audited; and
3.4.2.5 do not address taxation in any form nor do they address disposals of a
capital nature.
3.4.3 Notwithstanding the matters described in paragraph 3.4.2:-
3.4.3.1 the Vendors believe the gross margin as shown in the Management
Accounts is reasonably accurate;
3.4.3.2 and although the Vendors do not represent or warrant that the gross
margin as shown in the Management Accounts is accurate, they do
represent and
warrant, without qualification, that the gross margin for the period
from the Balance Sheet Date to the date to which the Management
Accounts as at 31 March 1999 have been prepared is not less than that
specified in the Current Plan for the same period.
3.5.4 The Vendors further represent and warrant to the Purchaser that the
statements made in this paragraph 3.5:-
3.5.4.1 are believed by them to be true and based on information which they
believe is adequate to enable them to make a reasonable judgement of
the relevant matters; and
3.5.4.2 are given by the Vendors to the Purchaser as a matter of the utmost
good faith.
Part 4
------
THE PROPERTIES
--------------
General matters
---------------
4.1.1 The Properties comprise all the leasehold premises owned occupied or
otherwise used by the Company save for ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ and ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ and the Company has
not created any subleases of the Properties.
4.1.2 The Company has not held premises whether under an agreement licence
or lease (as tenant or licencee) or given any form of guarantee or
indemnity in relation to such premises (other than the Properties)
which gives rise to a contingent liability or where a claim is
currently pending or being pursued whether in relation to rent,
repairs, dilapidations or otherwise
Title
-----
4.2.1 The Company has a good title to the Properties;
4.2.2 The Properties and title deeds are free and clear of all claims,
charges (including floating charges), mortgages, liens, encumbrances
and other such security interests and third party rights and there is
no agreement to create any such security interests or third party
rights and the Company (or its solicitors) hold the original of all
the relevant title deeds relating to the Company's interest in the
Properties.
4.2.3 The Company has not received notice in respect of an outstanding
complaint alleging breach or non-observance of any covenants on the
part of the
Company contained in any lease or tenancy under which the
Properties are held by the Company.
4.2.4 The Company has not received notice of any disputes concerning
boundaries, easements, covenants or other matters relating to the
Properties or their use and occupation.
Occupation
----------
4.3 The Company has exclusive possession use and occupation of the
Properties
Local authority and planning matters
------------------------------------
4.4.1 The Company has not received notice of any matter which materially
adversely affects the Properties
4.4.2 There are no outgoings affecting the Properties which are of an
unusual or onerous nature
4.4.3 The present use of the Properties is within either Class A1 or A2 of
the Schedule to the Town and Country Planning (Use Classes) Order 1987
and such use is not a temporary use or a use subject to onerous or
unusual conditions or conditions giving rise to abnormal expenditure.
The current permitted use of the Properties is within Class A2 save
for the Properties numbered 4, 6, 22, 26, 29, 35, 42, 45 and 47 in
respect of which the current permitted use is within Class A1. Where
the current permitted use is within Class A1 the Company has not
received notice from the relevant local authority that the actual use
is not the permitted use.
4.4.4 The Company has not received notice of any breach of any statutory or
other legal requirement in respect of the Properties..
4.4.5 The Company has not encountered any material difficulty with regard to
access to the Properties or the services to the Properties
Lease matters
-------------
4.5.1 There are no arrears of rent relating to the Properties
Insurance
---------
4.6.1 The Company has not received notice of any breach of any requirement
of any of the insurers of the Properties
Part 5
------
FIXED AND CURRENT ASSETS
------------------------
5.1 Ownership of assets
-------------------
The Company is the sole owner with good and marketable title free from
all liens, charges, encumbrances, options or adverse claims (including
any hiring, licensing or rental agreements or reservations of title)
of all the assets included in the Accounts or acquired after the
Balance Sheet Date which it owns or reputedly owns (subject to sales
of current assets in the ordinary and normal course of its trading) or
which are now in its possession or under its control or which it uses
in its business and the Company has not agreed to create or grant any
lien, charge, option or other encumbrance over such assets.
5.2 Assets used in the business
---------------------------
The assets owned by the Company together with any assets held under
any hire or hire purchase rental or leasing agreement (the material
details of which are contained in the Disclosure Letter) comprise all
the assets necessary for the continuation of the Company's business as
now carried on.
5.3 Equipment
---------
5.3.1 The equipment and vehicles owned by or used in connection with the
business of the Company ("Equipment"):-
-----------
5.3.1.1 are not to any material extent surplus to requirements; and
5.3.1.2 are in the possession and (save for those items the subject of the
hire, hire purchase, rental or leasing agreements listed in the
Disclosure Letter) control of the Company.
5.4 Computer equipment and software
-------------------------------
5.4.1.1 All computer software (including programs and data held on silicon
chips, disks and any other media, manuals and operator guides) used by
the Company is either owned by the Company or held by it on licence (a
-
"Software Licence") the terms of which have been disclosed in the
------------------
Disclosure Letter.
5.4.1.2 The Software Licences authorise the Company to use the computer
software that is not owned by the Company in the ways in which they
are in fact used or are required to be used in connection with the
business of the Company as it is
now carried on.
5.4.1.3 The Software Licences are enforceable by the Company in accordance
with their terms and there has not been any default (or any event
which with notice or lapse of time or both would constitute a default)
under any of them by the Company or by any other party to such
Software Licences.
5.4.2 All other computer software (including programs and data held on
silicon chips disks and any other media, manuals and operator guides)
used by the Company is either owned by the Company or held by it on
licence the terms of which have been disclosed in the Disclosure
Letter.
5.4.3 Other than proprietary software, the Company owns and has access to
all documents and information (including source codes and all working
papers relating to such source codes) which might be required to
enable the Company to adapt modify or improve all computer software
used by the Company economically and has the right to make such
adaptations modifications or improvements without the consent of any
third party.
5.5 Integrity of computer systems
-----------------------------
5.5.1 All computer software (including all programs and data in such
software) used by the Company is reliable and readable. All media on
which such software is stored are in good readable condition and
contain no programs or data which are either intended to or which may
have the effect of modifying, deleting or otherwise impairing such
software (or any of the programs or data in such software) or any
other programs or data which are either intended to or which may have
the effect of impairing any computer hardware.
5.5.2 The Vendors are not aware without having made enquiry of any case
where unauthorised access to the Company's computer systems has taken
place, or where any of the software or data in those computer systems
has been modified without the Company's express authority or where
fraud has been committed against the Company by use or abuse of its
computer systems whether alone or in conjunction with any third party.
5.5.3 To the best of the Vendors' knowledge information and belief the
Company's computer systems are fully "millennium compliant" and will
not cease to be so prior to, during or after the year 2000. For the
purposes of this warranty,
"millennium compliant" means that neither performance nor
functionality is or will be affected by dates prior to, during or
after the year 2000 in particular (but without limitation):-
5.5.3.1 no value for current date causes or will cause any interruption in
operation;
5.5.3.2 date-based functionality behaves and will behave consistently for
dates prior to, during and after the year 2000;
5.5.3.3 in all interfaces and data storage, the century in any date is and
will be specified either explicitly or by unambiguous algorithms or
inferencing rules; and
5.5.3.4 the year 2000 is and will be recognised as a leap year.
5.6 Leased Assets
-------------
No circumstance has arisen or is likely to arise in relation to any
asset held by the Company, under a lease or similar agreement, whereby
the rental payable has been, or is likely to be, increased and, in
particular, all such assets have at all relevant times been used for a
qualifying purpose for the purposes of sections 39, 40 and ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇; but this warranty shall not apply to any lease
under which any of the Properties shall be held.
5.7 Book debts
----------
5.7.1 Other than Customer Cheques, none of the debts which are due to the
Company at the date of this agreement and which shall have arisen
after the Balance Sheet Date are now or have at any time been overdue
by more than 8 weeks nor have any of those debts been written off or
proved to be irrecoverable to any extent.
5.7.2 Other than Customer Cheques, not less than 85 per cent. of all debts
which shall be owing to the Company at Completion (whenever arising)
will be recovered in full free of any counter-claim or set off (less
the amount of any provision or reserve which has been calculated on
the same basis as that applied in the Accounts or disclosed in the
Disclosure Letter) in the ordinary and normal course of business and
in any event not later than 12 weeks after Completion.
5.7.3 Since the Balance Sheet Date other than Customer Cheques no other
obligations due to the Company have been written off or written down
or have
proved to be irrecoverable in whole or in part or are now regarded as
irrecoverable nor has there been any agreement for the release of any
person under any liability to the Company.
Part 6
------
INTELLECTUAL PROPERTY
---------------------
6.1 Definition
----------
In this Part 6 "Intellectual Property Rights" includes patents, trade
------------------------------
marks, service marks, registered designs, design rights, copyrights,
business names, know-how, confidential information, and any other
similar protected rights in any country together with pending
applications for the registration or recording of such right
6.2 Intellectual Property Rights
----------------------------
The Company does not own or otherwise have any interest in or licence
of any Intellectual Property Rights which is material to the business
of the Company (other than the computer software referred to in
warranty 5.4).
6.3 No Infringements
----------------
The business of the Group as now carried on does not (and is not
likely to) infringe any Intellectual Property Rights of any person.
6.4 No requirements
---------------
The Company does not need to use any Intellectual Property Rights of
any other person in order to carry on its business in its present
form.
Part 7
------
FINANCIAL POSITION AND PROSPECTS
--------------------------------
7.1 Events since the Balance Sheet Date
-----------------------------------
Since the Balance Sheet Date:-
7.1.1 taking the Company's business as a whole, there has been no adverse
change in the financial or trading position or prospects of the
Company;
7.1.2 the business of the Company has been carried on in the ordinary and
normal course, without any material interruption and without any
alteration in its nature, conduct, scale, scope or manner and no
unusual or abnormal contract differing from the ordinary contracts
necessitated by the nature of its business has been entered into by
the Company;
7.1.3 there has been no material change in:-
7.1.3.1 the manner or time of payment of creditors or the issue of invoices or
collection of debts; or
7.1.3.2 the policy of reserving for debtors;
7.1.4 no asset has been acquired or disposed of or has been agreed to be
acquired or disposed of (save for assets acquired or disposed of in
the ordinary and normal course of business on arm's length terms) and
no contract involving expenditure by it on capital account has been
entered into by the Company;
7.1.5 the Company has not paid or become liable to pay any management,
service or other such charges to the Vendors or to any of their
Associates) other than in respect of goods and services supplied in
the ordinary and normal course of business on commercial terms;
7.1.6 the Company has neither disbursed nor received any cash except in the
ordinary and normal course of its business and all amounts received by
or on behalf of the Company have been deposited with its bankers and
appear in the appropriate books of account;
7.1.7 the Company has not declared, paid or made any dividends or other
distributions within the meaning of the Taxes Act;
7.1.8 the Company has not made any loans or incurred any borrowings except
in the ordinary and normal course of its business; and
7.1.9 the accounting reference period of the Company has not ended or been
extended.
7.2 Net assets and turnover
-----------------------
An audited balance sheet of the Company as at Completion and an
audited profit and loss account of the Company for the period from the
Balance Sheet Date up to Completion prepared on the same basis as the
Accounts would show that the net tangible assets of the Company would
not be less than the net tangible assets shown in the Accounts.
7.3 Amounts due to creditors
------------------------
The amounts due by the Company to its trade creditors as at 30 June
1999 did not exceed (Pounds)350,000.
7.4 Bank and other borrowings
-------------------------
7.4.1 Full details of all limits on the Company's bank overdraft and other
borrowing facilities together with true, complete and accurate copies
of all letters of credit, guarantees and other financial instruments
issued on behalf of or for the benefit of the Company and which remain
in force are contained in the Disclosure Letter.
7.4.2 The total amount borrowed by the Company does not exceed any
limitation on its borrowing contained in its Memorandum or Articles of
Association or in any other document which it is a party and the
amount borrowed from its bankers does not exceed its overdraft
facilities (if any).
7.4.3 No overdraft or other financial facilities of the Company are
dependent upon a guarantee of, or a security provided by, the Vendors
or any third party.
7.4.4 The Company does not have outstanding and has not agreed to create or
issue any loan capital; nor has it factored or discounted any of its
debts (or agreed to do so), or been engaged in financing of a type
which would not require to be shown or reflected in the Accounts; or
borrowed any money which it has not repaid (save for borrowings not
exceeding the amounts shown in the Accounts).
7.4.5 The Company has not since the Balance Sheet Date, repaid, or become
liable to repay, any loan or indebtedness in advance of its stated
maturity.
7.4.6 No event has occurred which would entitle any third party (with or
without the giving of notice) to call for the repayment of any
indebtedness of the Company prior to its normal maturity date.
Part 8
------
TAXATION
--------
8.1 Definitions
-----------
8.1.1 In this Part 8:
"ACT" means advance corporation tax;
-----
"CAA" means the Capital ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇;
-----
"IHTA" means the Inheritance Tax ▇▇▇ ▇▇▇▇;
------
"TCGA" means the Taxation of Chargeable Gains ▇▇▇ ▇▇▇▇;
------
"TMA" means the Taxes Management ▇▇▇ ▇▇▇▇;
-----
"VAT" means value added tax;
-----
"VATA" means the Value Added Tax ▇▇▇ ▇▇▇▇.
------
8.1.2 All warranties in this Part 8 are given only by reference to the six
year period ending on Completion unless stated otherwise.
8.2 General
-------
8.2.1 All returns, amended returns, computations and payments which should
be or should have been made by the Company for any fiscal purpose have
been prepared on a proper basis and submitted within the prescribed
time limits and are up to date and correct and none of them is now the
subject or so far as the Vendors are aware is likely to be the subject
of any dispute with the Inland Revenue or HM Customs and Excise or
other authority concerned.
8.2.2 All particulars furnished to the Revenue in connection with the
application for any consent or clearance on behalf of the Company
accurately disclosed all facts and circumstances material to the
decision of the Revenue, and any such transaction for which such
consent or clearance has previously been obtained has been carried
into effect only in accordance with the terms of the relevant
application and consent for clearance.
8.2.3 The Company is not the subject of a back duty investigation by any
fiscal authority and so far as the Vendors are aware, there are no
known facts which may give rise to the same.
8.2.4 All income tax under the PAYE system and payments due in respect of
employees' contributions to national insurance and graduated state
pension have been properly deducted by the Company and (together with
any employer's contribution) have been fully and correctly paid to the
appropriate authority and proper records thereof have been maintained.
8.2.5 All Taxation required to be deducted from any payments made by the
Company which it is obliged or entitled to make has been deducted and
accounted in full to the appropriate authority.
8.2.6 The Company is not and has at no time been an investment company, a
close investment company or an investment trust company for Taxation
purposes.
8.2.7 So far as the Vendors are aware, the Company has not since the Balance
Sheet Date taken any action which has had, or might have, the result
of altering or
prejudicing or in any way disturbing any arrangement or agreement
which it has previously negotiated with the Revenue.
8.2.8 The Taxation computations for all accounting periods of the Company
ended on or before 31 December 1997 have been agreed with the Revenue.
8.2.9 The Company is and has always been resident only in the United Kingdom
for Taxation purposes and has never carried on any trade, business or
other activities outside the United Kingdom other than the export of
its goods and/or services in the ordinary and normal course of its
business.
8.3 Capital Assets
--------------
8.3.1 Save as provided for in the Accounts the values attributed to each of
the assets of the Company as at the Balance Sheet Date is such that on
any disposal of any of those assets which is treated for Taxation
purposes as being for a consideration equal to such value (ignoring
any reliefs and allowances available to the Company other than amounts
falling to be deducted under section 38 TCGA) no chargeable gain or
allowable loss would arise.
8.3.2 Since the Balance Sheet Date no asset has been acquired otherwise than
by way of a bargain made at arm's length and for a consideration equal
to its market value.
8.3.3 The Company has not effected or been a party to any demerger such as
is mentioned in sections 213 to 218 Taxes Act.
8.3.4 The Company has not been a party to or involved in any transaction
within section 29 TCGA or any scheme or arrangement within sections 30
to 34 TCGA.
8.3.5 The Company has never been a party to a transaction falling within
section 17 TCGA.
8.3.6 The Company has not received any asset by way of gift as mentioned in
section 282 TCGA.
8.3.7 The Company does not own any shares or securities acquired as a "new
holding" under the provisions of sections 126 to 130 TCGA.
8.3.8 Neither the Company nor any company which is a member of the same
group of companies at Completion has made any claim under sections
152, 153 or 247 TCGA.
8.3.9 The Company has not been a party to or involved in any share for share
exchange nor any scheme of reconstruction or amalgamation such as are
mentioned in sections 135 and 136 TCGA.
8.3.10 The Company will not be subject to corporation tax on the disposal of
any debt owing to the Company.
8.3.11 The Company does not own and has never issued any relevant discounted
securities or qualifying corporate bonds (as defined in Schedule 13
Finance ▇▇▇ ▇▇▇▇ or section 117 TCGA respectively).
8.3.12 The Company has sufficient information contained in its records to
calculate any chargeable gain or allowable loss which may arise as the
result of the disposal of assets owned by the Company at the Balance
Sheet Date.
8.4 Capital Allowances
------------------
8.4.1 The book value of each of the assets of the Company in or adopted for
the purposes of the Accounts on which capital allowances are
calculated separately does not exceed the written down value of such
asset for the purposes of the CAA and the aggregate book value of
plant and machinery for which capital allowances have been claimed
under Part II of that Act does not exceed the written down value of
the qualifying expenditure under that Act.
8.4.2 Details of all elections made by the Company pursuant to section 59B
or 59C CAA or requirements to make such elections in respect of any
existing assets of the Company are set out in the Disclosure Letter.
8.5 Group arrangements
------------------
8.5.1 The Company has never been a member of any group of companies for any
Taxation purpose other than of the Group.
8.5.2 The Company will not cease to be a member of a group of companies for
the purposes of sections 178 and 179 TCGA as a result of Completion.
8.5.3 The Company has not at any time within the period of six years ending
with the date of this agreement, acquired any assets other than
trading stock from any company which, at the time of the acquisition,
was a member of the same group (as defined in section 170 TCGA) as the
Company.
8.5.4 The Disclosure Letter sets out full details of any surrender or
agreement to surrender, or acceptance or agreement to accept the
surrender, by the Company
of any amount by way of group relief under the provisions of sections
402, 403 and 407 to 413 Taxes Act.
8.5.5 All claims for group relief made by the Company were valid and have
been or will be allowed by way of relief from corporation tax and the
Company is not and will not, as a result of anything done before the
date of this agreement, become liable to make any payment for an
amount surrendered by any other company under or in connection in with
the provisions of section 402 Taxes Act.
8.5.6 The Company is not and has not at any time been party to any
arrangement falling within section 410 Taxes Act.
8.5.7 The Company has not made or purported to make any election under
section 247 Taxes Act.
8.5.8 The Company has not made nor received nor purported to make or receive
any surrender of the benefit of ACT under section 240 Taxes Act.
8.6 Distributions and Advance Corporation Tax
-----------------------------------------
8.6.1 The Company has not at any time done anything which could be treated
as a distribution for the purposes of sections 209 or 210 Taxes Act
other than a payment of a dividend disclosed in the accounts of the
Company.
8.6.2 The Company has not issued any share capital to which the provisions
of section 249 Taxes Act or section 141 TCGA could apply nor does it
own any such share capital nor granted options or rights to any person
which entitles that person to require the issue of any share capital.
8.6.3 The Company has not received a capital distribution to which the
provisions of section 189 TCGA could apply.
8.6.4 The Company has not made or received any distribution which is an
exempt distribution within sections 213 to 218(1) (inclusive) Taxes
Act.
8.7 Stamp Duty
----------
8.7.1 All instruments (other than those which have ceased to have a legal
effect) executed by the Company (and which are or were subject to
stamp duty) and which are required to be stamped to ensure that the
Company obtains title to the asset or assets concerned have been duly
stamped.
8.7.2 The Company has no liability to stamp duty reserve tax.
8.8 Anti-Avoidance
--------------
8.8.1 The Company has not entered into or been a party to any pre-ordained
series of transactions, composite transactions or any other schemes or
arrangements the sole or main purpose of which was the saving of
Taxation.
8.8.2 So far as the Vendors are aware, the Company has not been party to any
other transaction or arrangement of any nature which could give rise
to a charge to Taxation under Part XVII Taxes Act.
8.9 Close Company
-------------
8.9.1 The Company is a close company for Taxation purposes.
8.9.2 The Company has no loan outstanding to which the provisions of
sections 419 and 420 Taxes Act would apply.
8.9.3 The Company has not held and does not hold shares in a company not
being another member of a group of companies (including the Company)
as defined in section 170 TCGA which has made any such transfer as was
referred to in section 125 TCGA.
8.9.4 The Company has not made any transfers of value within section 94
IHTA.
8.10 Events since the Balance Sheet Date
-----------------------------------
Since the Balance Sheet Date:-
8.10.1 the Company has not disposed of any asset (including trading stock) or
made any supply of any service or business facility of any kind
(including a loan of money or the letting, hiring or licensing of any
property whether tangible or intangible) in circumstances where the
consideration actually received or receivable for such disposal or
supply is less than the consideration which will be deemed to have
been received for the purposes of Taxation;
8.10.2 no event has occurred which gives rise to a liability to Taxation to
the Company on deemed (as opposed to actual) income, profits or gains
or which results in the Company becoming liable to pay or bear a
liability to Taxation directly or primarily chargeable against or
attributable to another person, firm or company;
8.10.3 the Company has not made or received any distributions for any
Taxation purpose;
8.10.4 the Company has not surrendered or claimed any ACT under Chapter V
Taxes Act or any losses by way of group relief under the Taxes Act;
8.10.5 the Company has not paid any remuneration (including emoluments as
defined by section 131 and sections 153-168 Taxes Act) to any officer,
director or employee or to any member of his family or household in
excess of such amount as will be deductible in computing the taxable
profits of the Company;
8.10.6 no payment has been made by the Company which will not be deductible
for the purposes of corporation tax (or any corresponding tax on
profits in any relevant foreign jurisdiction), either in computing the
profits of the Company or in computing the corporation tax or
corresponding tax chargeable on it; and
8.10.7 no accounting period (as defined in section 12 Taxes Act) of the
Company has ended as referred to in section 12(3) of that Act other
than at the request of the Purchaser.
8.11 Value Added Tax
---------------
8.11.1 In relation to VAT the Company has complied in all material respects
with all statutory provisions, rules, regulations, orders and
directions and made all necessary returns and within the prescribed
time limits provided all necessary information and documents to HM
Customs and Excise and paid all amounts due to the proper person.
8.11.2 The Company has at all times kept and preserved materially complete
correct and up-to-date records, invoices and other documents required
for the purposes of VAT.
8.11.3 The Company has not been required by HM Customs and Excise to give
security under paragraph 4 of schedule 11 to the VATA.
8.11.4 The Company is not liable and so far as the Vendors are aware will not
(in respect of anything done before Completion) be liable to any
interest, penalty or surcharge in respect of VAT and in particular
(but without prejudice to the generality of the foregoing) the Company
is not and so far as the Vendors are aware will not be so liable to
any penalty, interest or surcharge pursuant to sections 59, 63 to 70
and 74 VATA.
8.11.5 Neither the Company nor any of its officers or directors is or so far
as the Vendors are aware will (in respect of anything done before
Completion) be liable to a penalty under sections 60, 61 or 62 VATA.
8.11.6 The Company is not and has not at any time been a member of a group of
companies for VAT purposes.
8.11.7 The Company is not and has not agreed to become an agent, manager or
factor for the purposes of sections 47 or 48 VATA of any person who is
not resident in the United Kingdom.
8.11.8 The Company has not incurred any expenditure in the ten years
preceding Completion on capital items such that the provisions of Part
XV of The Value Added Tax Regulations 1995 may apply to the Company.
8.11.9 The Company obtains credit for all input tax paid or suffered by it.
8.11.10 Provision has been made in the Accounts in accordance with generally
accepted accounting principles for all input tax owing or which may
become due to any of the Company's suppliers and for any refund of
value added tax owing or which may become due to any of the Company's
customers.
8.11.11 The Company has not in the previous six years deducted any input tax
in reliance on the intended use of the goods or services to which the
input tax relates where the actual use of those goods or services has
not yet occurred.
8.12 VAT On Property
---------------
8.12.1 The Company does not own the fee simple in any building or civil
engineering work which is uncompleted or which was completed (within
the meaning of Note (2) to Group 1 Schedule 9 VATA) less than three
years before the date of this agreement.
8.12.2 The Disclosure Letter contains full particulars of:
8.12.2.1 any election under paragraph 2 Schedule 10 VATA to waive exemption
from VAT in relation to any land made by the Company or by any member
or former member of any group of companies of which the Company is or
was registered for VAT purposes; and
8.12.2.2 any agreement or other arrangement to which the Company is a party
whereby the Company has agreed not to waive exemption from VAT
pursuant to paragraph 2 Schedule 10 VATA in relation to any land.
8.13 Employee share schemes
----------------------
8.13.1 The Disclosure Letter contains full details of all share schemes
(including those approved by the Inland Revenue and unapproved
schemes) which the Company operates or in which its UK employees are
entitled to participate, together with copies of any approvals issued
by the Inland Revenue in respect of such schemes and nothing has been
done to prejudice the approved status of any such schemes.
8.13.2 The Disclosure Letter contains a copy of the rules of any profit
related pay schemes which the Company operates or has operated, or in
which its UK employees are or have been entitled to participate, in
any year commencing prior to Completion, together with copies of any
approvals issued by the Inland Revenue in respect of such schemes, and
nothing has been done to prejudice the approved status of any such
schemes which have at all times been operated in accordance with any
rules governing the scheme and relevant Taxation legislation.
8.14 Secondary liability
-------------------
So far as the Vendors are aware, no transaction or event has occurred
in consequence of which the Company is or may be held liable for any
Taxation or deprived of reliefs or allowances otherwise available to
it or may be otherwise held liable for any Taxation for which some
other company or person was primarily liable (whether by reason of any
such other company being or having been a member of the same group of
companies or otherwise).
8.15 Payments equivalent to tax
--------------------------
8.15.1 The Company has not in the previous seven years entered into any
indemnity, guarantee or covenant under which the Company has agreed or
can be procured to meet or pay a sum equivalent to or by reference to
another person's liability to Taxation.
8.15.2 So far as the Vendors are aware, the Company is not liable nor has any
event or omission occurred in consequence of which the Company could
at any time become liable to make a payment to any person as a result
of the discharge by that person of any liability of the Company to
Taxation incurred on or before Completion.
8.16 Loan Relationships
------------------
All interest, discounts or premiums payable by the Company in respect
of its loan relationships within the meaning of Chapter II of Part IV
of the Finance ▇▇▇ ▇▇▇▇ are capable of being brought into account as a
debit for the purposes of that Chapter as and to the extent that they
are from time to time recognised in the Company's accounts (assuming
that the accounting policies and methods adopted for the purpose of
the Accounts continue to be so adopted).
Part 9
------
CONTRACTS AND COMMITMENTS
-------------------------
9.1 Capital commitments
-------------------
9.1.1 The Company had no capital commitments exceeding (Pounds)100,000 at
the Balance Sheet Date.
9.1.2 Since the Balance Sheet Date the Company has not made any capital
expenditure or incurred any capital commitments other than
9.1.2.1 commitments in relation to the Properties which it acquired after that
date and which did not exceed (Pounds)30,000 in relation to any one of
such Properties; and
9.1.2.2 other items, which do not in aggregate exceed (Pounds)100,000.
9.2 Subsisting contracts
--------------------
9.2.1 The Disclosure Letter contains true, complete and accurate copies
(incorporating all the terms which currently apply) of the South
Agreement (as defined in paragraph 9.2.2) and the Time to Insure
Agreement and every other contract, covenant, commitment or
arrangement (other than "Minor Contracts") to which the Company is a
---------------
party and in respect of which any party to them has or may have any
outstanding liabilities and for these purposes a "Minor Contract"
means an agreement (other than a joint venture shareholders or
franchising agreement) entered into in the ordinary course of the
Company's business in relation to which no party to it has (or had)
any liability (actual or contingent) in excess of (Pounds)25,000 in
any period of 12 months.
9.2.2 The Group has notified South of any new premises it has opened since
11 June 1998 in accordance with clause 7 of the shareholder agreement
dated 11 June 1998 between the Group (1), ▇▇▇▇▇▇ ▇▇▇▇ (2), ▇▇▇▇▇▇▇
▇▇▇▇ (3) South (4)
▇▇▇▇ ▇▇▇ (5) and ▇▇▇▇▇▇ ▇▇▇▇▇▇ (6) ("South Agreement").
---------------
9.2.3 The Group has never and is not currently paying South any profits it
receives from any of the Properties pursuant to clause 7.6 of the
South Agreement.
9.2.4 Cash a Cheque (GB) Limited has at all times complied with the
provisions of the Time To Insure Agreement as amended from time to
time.
9.3 Mortgages and guarantees etc
----------------------------
9.3.1 The Company has not created nor has it agreed to create any loan
capital or any mortgage, debenture, lien, charge or other similar
encumbrance or security interest over all or any of its property,
assets, undertaking, goodwill, reserves or share capital.
9.3.2 There are no guarantees, suretyships, indemnities or similar
commitments (whether secured or unsecured) given by the Company in
respect of which obligations or liabilities (whether actual or
contingent) are still outstanding.
9.4 No loans
--------
The Company has not made any loans or advanced any monies or credit to
any person, firm or company (other than credit given on normal
commercial terms in the ordinary and normal course of business).
9.5 Bank indemnities
----------------
The Disclosure Letter contains true, complete and accurate copies
(incorporating all the terms which currently apply) of all agreements
and indemnities and memoranda of all arrangements, practices and
understandings between the Company and its bankers, pursuant to which
the Company's bankers agree to collect on the Company's behalf third
party cheques encashed by the Company and/or pursuant to which the
Company agrees to indemnify its bankers for any liability which they
may incur to anyone in the course of doing so.
9.6 No partnership etc
------------------
The Company is not a member of any partnership, joint venture, trade
association, society or other group, whether formal or informal and
whether or not having a separate legal identity, nor is any such body
relevant to nor does any such body have any material influence over
the business of the Company as now carried on.
9.7 Standard terms of business
--------------------------
The Disclosure Letter contains copies of the Company's standard terms
of business.
9.8 Non-arms length contracts
-------------------------
9.8.1 None of the Vendors nor any of their Associates nor any person in
which any of them has or had any interest (direct or indirect, either
solely or jointly with any other party and whether as shareholder,
employee, director, consultant or otherwise) has (or has ever had) a
trading relationship with the Company nor have any of them ever
entered into any other type of transaction or arrangement with the
Company (other than in the capacity as a shareholder or employee of
the Company); and none of them provides (or has in the past provided)
goods or services in competition with the Company.
9.8.2 The Company is not a party to, nor have its profits or financial
position during the three years prior to the date hereof been affected
by, any contract or arrangement which is not of an entirely arms-
length nature made on open market terms.
9.9 Defaults, etc
-------------
9.9.1 None of the obligations owed by any third party to the Company is
unenforceable and no event has occurred as regards the Company which
would entitled any third party to terminate any contract or benefit
enjoyed by the Company or call in any money before the normal due date
therefor.
9.9.2 Neither the Company nor any other party to any agreement, commitment,
transaction or arrangement with the Company is in default to any
material extent thereunder and there are no circumstances likely to
give rise to such a default.
9.10 Liabilities
-----------
9.10.1 There are no liabilities (including contingent liabilities) which are
outstanding on the part of the Company other than those liabilities
disclosed in the Accounts or incurred, in the ordinary and normal
course of trading, since the Balance Sheet Date.
9.10.2 There is no indebtedness or liability due, owing or incurred by the
--
Company to the Vendors or any of their Associates other than salaries
in accordance with
the rates set out in the Disclosure Letter and outstanding expense
claims (whether actually or contingently), whether solely or jointly
with any other person and whether as principal or surety and there is
no such indebtedness or liability due, owing or incurred to the
--
Company by the Vendors or any of their Associates.
9.10.3 There are no outstanding liabilities or commitments on the Company
arising from any arrangements for the disposal of any shares, property
or other assets (other than in the ordinary and normal course of
business) previously owned by the Company.
9.11 Payments to creditors
---------------------
The Company pays its creditors in accordance with normal commercial
practice.
9.12 No restrictions on Company
--------------------------
The Company is not a party to any secrecy or confidentiality agreement
or arrangement which may restrict the use or disclosure of information
by the Company nor has it given any covenants limiting or excluding
its right to do business and/or compete in any area or field with any
other person.
Part 10
-------
PENSIONS
--------
10.1 No pension arrangements
-----------------------
The Company is not under any legal liability or obligation to provide
any relevant benefits (as defined in section 612(1) of the Taxes Act)
or any death or disability benefits not within that definition for any
past or present officer or employee or their dependants or to pay
contributions to any Personal Pension Scheme (as defined in section
630 of the Taxes Act) in respect of such persons.
10.2 No pension arrangements to be introduced
----------------------------------------
The Company has not given any undertakings or assurances to its
officers, employees or consultants regarding the introduction of any
provision for retirement, death or disability benefits (whether or not
there is any obligation to do so) or the payment of contributions to
Personal Pension Schemes (whether or not there is any obligation to do
so).
10.3 No ex-gratia arrangements
-------------------------
The Company has not granted any ex gratia pension or other like
payment to any of its past or present officers, employees, consultants
or their dependants.
Part 11
-------
OFFICERS AND EMPLOYEES
----------------------
11.1 Details
-------
11.1.1 The Disclosure Letter contains an accurate and complete list of all
officers and employees of the Company as at 30 March 1999, showing all
remuneration payable and other benefits provided or which the Company
is bound to provide either now or in the future to the directors and
the secretary of the Company and with all employees whose remuneration
exceeds (Pounds)25,000 per annum.
11.1.2 The Disclosure Letter contains true, complete and accurate copies
(incorporating all the terms which currently apply or a memorandum of
such terms) of all service agreements, consultancy agreements and
letters of engagement which have been made with any employee or
consultant of the Company and of specimens of the standard terms of
employment on which any employee of the Company is now employed
together with a note showing which employees are employed under which
type of standard terms.
11.1.3 Since 30 March 1999 there has been no significant change to the way in
which the Company has been operated in relation to its recruitment
policies.
11.2 Statutory notices
-----------------
All appropriate notices have been properly issued under the Employment
Protection (Consolidation) ▇▇▇ ▇▇▇▇ to all employees (including
directors) of the Company.
11.3 No other service and consultancy arrangements
---------------------------------------------
There are no service or consultancy agreements or arrangements
outstanding between the Company and any other person apart from those
disclosed in the Disclosure Letter.
11.4 No bonus or commission arrangements
-----------------------------------
The Company is not bound or accustomed to make periodical or other
payments (other than normal fixed salaries and wages) to employees,
ex-
employees, officers, consultants or others and no employee, officer or
consultant has remuneration on a profit sharing or commission basis or
by reference to the turnover, profits, sales or assets of the Company.
11.5 No share option scheme
----------------------
The Company does not have and never has had any share option, share
incentive, profit sharing or any other similar scheme, save for the
Options.
11.6 Increases since Balance Sheet Date
----------------------------------
Since the Balance Sheet Date:-
11.6.1 no remuneration or benefit has been paid or given or agreed to be paid
or given to any officer, employee or consultant of the Company except
at the rates in force on that date; and
11.6.2 no general increase in the wages of the employees of the Company in
excess of 10% of the aggregate of the annual salaries of all the
employees of the Company has been made or agreed to be made (whether
legally binding or not) either with the employees or their
representatives nor has any negotiation or demand for such increase
been entered into by or made to the Company.
11.7 Termination of employment
-------------------------
11.7.1 All contracts of employment between the Company and its officers or
employees are lawfully determinable by the Company without
compensation by notice (not exceeding six weeks).
11.7.2 No director or executive of the Company, who is in receipt of
remuneration in excess of (Pounds)20,000 per annum has given or
received notice terminating his employment, except as expressly
contemplated in this agreement, and no such executive will be entitled
to give such notice as a result of the sale of the Shares to the
Purchaser.
11.7.3 The Company has no reason to dismiss (nor does it wish to dismiss) any
of its employees who is entitled to remuneration of at least
(Pounds)20,000 per annum.
11.8 Claims by or against employees
------------------------------
11.8.1 The Company is not now, nor is it likely to be and has not since the
Balance Sheet Date been, engaged in any legal proceedings or
arbitration whether as plaintiff or defendant with any trade union or
any person who is or has at any time been a director or an employee of
the Company.
11.8.2 No person who is or was a director or employee of the Company has any
right or made any claim (which has not yet been settled) to any
compensation or other payment by reason of the termination of his
employment (whether such termination constitutes unfair or wrongful
dismissal redundancy or otherwise) or any breach by the Company of his
terms of engagement or employment; there are no circumstances likely
to lead to any such claims being made; and no gratuitous payment has
been made or promised by the Company in connection with the
termination or proposed termination of employment of any past or
present director or employee.
11.8.3 No order has been or may be made for the reinstatement or re-
engagement of any employee of the Company.
11.9 Industrial relations
--------------------
There is not and never has been any strike, picket, lock-out, go-slow,
work-to rule or any other form of industrial dispute taken or
threatened against the Company and to the best of knowledge,
information and belief of the Vendors there are no facts or
circumstances which might lead to any such industrial dispute.
11.10 Trade union recognition
-----------------------
No claim has been made by any trade union for recognition or for any
improvement or amendment to the terms or conditions of employment of
any employees of the Company and no claim for recognition has been
referred to the Advisory Conciliation and Arbitration Service or to
the Central Arbitration Committee nor is any trade union recognised by
the Company in respect of any class of employees for any purpose
whatsoever.
11.11 Working Time Regulations
------------------------
11.11.1 The Company has complied in full with its obligations under the
Working Time Regulations 1998 (the "1998 Regulations") and, in
particular and without limitation, with its record keeping obligations
under Regulations 5(4) and 9 of the 1998 Regulations and the
requirements under Regulations 4, 6, 7 and 8 of the 1998 Regulations.
11.11.2 The Disclosure Letter contains complete and accurate copies of:-
11.11.2.1 all relevant agreements entered into pursuant to the 1998 Regulations
(or, if in standard form, a copy of the standard form) and a list of
all workers covered by any such agreement; and
11.11.2.2 a list of all workers whom the Company regards as falling within the
terms of Regulation 20 or 21 of the 1998 Regulations.
Part 12
-------
INSURANCE
---------
12.1 Full Cover
----------
All assets of the Company of an insurable nature are and have at all
material times been insured under policies arranged by the Company
against fire and all other risks normally insured against and all such
insurances are currently in full force and effect and nothing has been
done or omitted to be done which would make any such policy of
insurance void or voidable.
12.2 No Outstanding Claims
---------------------
The Company has no claims outstanding under any insurance policy.
12.3 Details of insurance cover
--------------------------
The Disclosure Letter contains accurate information in relation to all
policies of insurance maintained by the Company (or which is
maintained by a third party but in which the Company has an interest)
and includes all information which the Purchaser shall reasonably
require in order to assess the liability to pay premiums and the cover
afforded under such policies (including details of current premiums,
excess levels, any unusual terms or conditions contained in such
policies, a history of claims made by the Company at any time under
any insurance policies and circumstances which have arisen and may
give rise to a claim under such policies).
12.4 Premiums paid
-------------
All premiums payable in respect of any insurance policy in which the
Company has an interest have been duly paid.
Part 13
-------
LITIGATION AND LEGAL PROCEEDINGS
--------------------------------
13.1 Defaults by the Company
-----------------------
The Company is not and since the Balance Sheet Date has not been:-
13.1.1 in default under any agreement, deed, instrument, arrangement or
covenant to which it is a party or in respect of any other obligations
or restrictions binding upon it;
13.1.2 liable in respect of any representations or warranties (whether
express or implied) or other matters giving rise to a duty of care on
the part of the Company; or
13.1.3 liable to any fine or penalty as a result of committing or omitting to
do any act or thing which could give rise to such a liability; or
13.1.4 subject to any order or judgment given by any Court or government
agency and has not been party to any undertaking or assurance given to
any Court or governmental agency which is still in force;
13.2 Legal Proceedings
-----------------
The Company is not and has not since the Balance Sheet Date been
engaged and there are no circumstances likely to lead to the Company
becoming engaged in any legal proceedings (civil or criminal) or
arbitration as plaintiff, defendant or otherwise howsoever except as
plaintiff in normal debt collection and in respect of which the
individual amount of debts due to the Company does not exceed
(Pounds)5000.
13.3 Disputes with Government departments
------------------------------------
There is no dispute with any revenue or other government, local
authority, administrative, official department entity or agency in the
United Kingdom or elsewhere, in relation to the affairs of the Company
and there are no facts which may give rise to any such dispute.
13.4 Personal injury claims
----------------------
There are no claims pending or threatened, or capable of arising
against the Company by an employee or third party in respect of any
accident or injury which are not fully covered by insurance.
13.5 Demands to pay
--------------
No demand has been served upon the Company under section 123 of the
Insolvency ▇▇▇ ▇▇▇▇ and the Company has not received notice (whether
formal or informal) from any lenders of money to the Company requiring
repayment or intimating the enforcement by such lenders of any
security
which they may hold over any assets of the Company and there are no
circumstances likely to give rise to any such notice being given.
13.6 Advertising materials
---------------------
All advertising and marketing materials used in connection with the
Company's business comply with all legal requirements in all countries
in which these materials are used or proposed to be used. Such
materials are not defamatory and there are no grounds under which such
materials could be challenged for any reason whatsoever including,
without limitation, defamation, trade libel or any analogous law.
Part 14
-------
ENVIRONMENTAL MATTERS
---------------------
14 Pollution
---------
The Company has complied, and has adequate facilities to continue to
comply, with all legislation relating to the disposal of industrial
effluent.
FIFTH SCHEDULE
--------------
TAX DEED
--------
THIS DEED is made on 1999
---------
BETWEEN:-
---------
(1) The persons whose names and addresses are set out in the schedule
hereto ("Covenantors"); and
-----------
(2) DOLLAR FINANCIAL UK LIMITED a company registered in England under No.
---------------------------
3701758 whose registered office is at c/o Ernst & Young, Rolls House,
7 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ("Purchaser").
---------
1 INTRODUCTION
------------
1.1 By an Agreement ("Agreement") dated [ ] and made between (1) the
---------
Covenantors (2) the Purchaser and (3) Dollar Financial Group Inc., the
Purchaser agreed to purchase the Shares (as defined in the Agreement).
1.2 Clause 4.2.12 of the Agreement provides that the Covenantors will
deliver today a duly executed deed in this form.
2 DEFINITIONS AND INTERPRETATION
------------------------------
2.1 In this deed expressions defined in the Agreement shall bear the same
meanings unless the context otherwise requires or unless they are
expressly given different meanings.
2.2 In this deed unless the context otherwise requires:-
"Accounts" means the audited consolidated balance sheet as at the
--------
Balance Sheet Date and the audited consolidated profit and loss
account for the period ended on the Balance Sheet Date of the Company
and the Subsidiaries together with the notes and directors' reports
and other documents annexed to them (and for the purposes of
identification only copies of the Accounts have been signed by or on
behalf of the parties to the Agreement and are annexed thereto as
appendix "A");
"Accounts Relief" means any Relief which was taken into account in
---------------
computing and so reducing or eliminating any provision for deferred
Taxation
which appears in the Accounts (or which, but for such Relief would
have appeared in the Accounts) or any Relief treated or taken into
account as an asset in the Accounts;
"Balance Sheet Date" means 31 December 1998;
------------------
"Claim" means any notice, demand, assessment, letter or other document
-----
issued, or action taken, by or on behalf of the Revenue or any other
governmental or statutory authority, body or official, whether of the
United Kingdom or elsewhere, whereby the Company is or may be placed
under a liability to Taxation;
"Company" means Cash a Cheque Holdings Great Britain Limited
-------
(registered number 3449905) and the Subsidiaries or any one or more of
them;
"Event" includes any act, omission, transaction or circumstance,
-----
including (without limitation) any change in the residence of, or the
death of, any person, the execution of the Agreement and Completion;
"Purchaser's Relief" means any Relief which is not an Accounts Relief
------------------
and which occurs or arises as a result of an Event after Completion;
"Relief" includes any loss, allowance, exemption, set-off, credit or
------
deduction relevant to the computation of any Taxation or any right to
repayment of Taxation;
"Subsidiaries" means the companies listed in part 2 of the second
------------
schedule to the Agreement or any one or more of them;
"Taxation" includes all forms of taxation, duties (including stamp
--------
duty), levies, imposts, charges, withholdings, national insurance and
other contributions, rates and PAYE liabilities (including any related
or incidental penalty, fine, interest or surcharge) whenever created
or imposed and whether of the United Kingdom or elsewhere.
2.3 A liability to Taxation which results from the loss, reduction,
modification, nullification or cancellation of any Accounts Relief, or
for which the Company would have been liable but for the utilisation
or set-off of any Accounts Relief or Purchaser's Relief, shall for the
purposes of this deed be deemed to be a liability equal to the amount
(as appropriate) of:
2.3.1 Taxation which use of the relevant Relief would have saved (assuming
Taxation to be otherwise payable); or
2.3.2 the repayment of Taxation to which the Company would otherwise have
been entitled.
2.4 The covenants contained in this deed apply where the liability in
question arises as a result of one or more Events or the combined
effect of more than one Event, where all such Events occurred on or
before Completion or where one such Event occurred on or before
Completion outside the ordinary course of business of the Company and
any such Event occurring after Completion was inside the ordinary
course of business of the Company.
2.5 The covenants contained in this deed shall be construed as separate
and independent and none of them shall be affected or restricted by
any other except to the extent that any payment made by the
Covenantors and received by the Purchaser in respect of one covenant
shall discharge the same liability under the other covenants which
shall arise out of the same subject matter.
2.6 In determining for the purposes of this deed whether a charge on or
power to sell mortgage or charge any of the shares or assets of the
Company exists at any time the fact that any Taxation is not yet
payable or may be paid by instalments shall be disregarded and such
Taxation shall be treated as becoming due and the charge or power to
sell mortgage or charge as arising on the date of the transfer of
value or other Event on or in respect of which it becomes payable or
arises.
3 COVENANTS
---------
3.1 The Covenantors severally covenant with the Purchaser to pay to the
Purchaser an amount equal to:-
3.1.1 any liability to Taxation of the Company in respect of, by reference
to or in consequence of any income, profits or gains earned, accrued
or received or deemed to have been or treated as or regarded as
earned, accrued or received on or before Completion;
3.1.2 any liability to Taxation of the Company in respect of, by reference
to or in consequence of any Event which occurred or is deemed to have
occurred on or before Completion;
3.1.3 any liability to Taxation of the Company for which it is not primarily
liable in respect of, by reference to or in consequence of any Event
which occurred or is deemed to have occurred on or before Completion;
3.1.4 any liability to Taxation of the Company which is also a liability to
Taxation of another person and which is payable by the Company by
virtue of the other person failing to discharge such liability to
Taxation and of the Company being at any time prior to Completion a
member of the same group as any other person or otherwise connected
with or related to such other person for Taxation purposes;
3.1.5 any liability to Taxation of the Company in respect of inheritance tax
which:
3.1.5.1 is at or becomes after Completion, as a result of the death of any
person within seven years after a transfer of value (or deemed
transfer of value) on or before Completion, a charge on any of the
shares or assets of the Company or gives rise to a power to sell
mortgage or charge any of the shares or assets of the Company; or
3.1.5.2 arises as a result of a transfer of value occurring or being deemed to
occur on or before Completion (whether or not in conjunction with the
death of any person whenever occurring);
3.1.6 any Taxation for which the Company would have become liable pursuant
to clauses 3.1.1 to 3.1.5 (inclusive) but for the utilisation or set
off of some Accounts Relief or Purchaser's Relief;
3.1.7 the loss, reduction, modification, nullification or cancellation of
some Accounts Relief occurring on or before Completion where such
Accounts Relief would otherwise be available to the Company
(disregarding for this purpose any other Relief);
3.1.8 any liability to Taxation of the Purchaser arising in respect any
amounts paid or payable pursuant to clause 3.1 of this deed; and
3.1.9 all costs and expenses reasonably incurred by the Purchaser in
enforcing the provisions of this deed.
3.2.1 All sums payable by the Covenantors under the covenants contained in
this deed shall be paid free and clear of all deductions or
withholdings or rights of counterclaim or set-off unless the deduction
or withholding is required by law.
3.2.2 If the Covenantors are required by law to make any deduction or
withholding from any payment under this deed, the sum due from the
Covenantors in respect of such payment shall be increased to the
extent necessary to ensure that after the making of such deduction or
withholding the Purchaser receives and retains a net sum equal to the
sum it would have received had no deduction or withholding been
required to be made.
4 EXCLUSIONS
----------
4.1 The covenants in clause 3.1 shall not apply to any liability to
Taxation to the extent that:-
4.1.1 provision or reserve in respect of it was made in the Accounts;
4.1.2 the Purchaser has recovered damages from the Covenantors for breach of
any Warranties in respect of the same liability provided that where
the amount recovered is less than that claimable under this deed, this
limitation shall not exclude a claim for the excess;
4.1.3 the liability in question arises or is increased as a result of the
passing or coming into force of, or any change in, after the date of
this deed, any law, regulation, directive or any published
administrative practice of any Taxation authority or any increase in
the rates of Taxation not actually or prospectively in force at the
date of this deed;
4.1.4 the liability in question would not have arisen but for a voluntary
act or omission of the Purchaser or the Company after the date of this
deed outside the ordinary course of business of the Company or the
Purchaser (as the case may be (unless pursuant to an obligation
incurred prior to the date of this deed, or taking place with the
approval of all or any of the Covenantors) and which the Purchaser or
the Company was, or ought reasonably to have been, aware could give
rise to a liability to Taxation;
4.1.5 the liability in question arises or is increased by reason of or in
consequence of:
4.1.5.1 any claim, disclaimer or election made or notice or consent given by
the Purchaser or the Company after the date of this deed including
(without prejudice to the generality of the foregoing) any disclaimer
of capital allowances; or
4.1.5.2 any failure by the Company after the date of this deed to make any
claim, election, surrender or disclaimer or give any notice after
Completion, the making or giving of which was taken into account in
the Accounts and was set out in the Disclosure Letter by reference to
this clause;
4.1.6 the liability in question was paid or discharged before the Balance
Sheet Date;
4.1.7 the liability in question arises or is increased as a result of any
changes made after Completion in the accounting policies or practices
or any Taxation reporting practice or the length of any accounting
period for Taxation purposes of the Purchaser or a Company;
4.1.8 Reliefs arising before Completion other than Accounts Reliefs are
available to set against the liability in question;
4.1.9 the liability in question is interest and penalties which arises as a
result of a Company failing to submit the returns and computations
required to be made by them or not submitting such returns and
computations within the prescribed time limits, in each case after
Completion unless such failure arises as a result of acts done or
omitted to be done by the Covenantors;
4.1.10 the liability in question arises as a result of transactions entered
into and any actual (as opposed to deemed) income, profits or gains
earned, accrued or received, in either case after the Balance Sheet
Date in the ordinary course of the Company's business;
4.1.11 the liability in question arises as a result of the provision for
Taxation in the Accounts being insufficient because profits actually
received before the Balance Sheet Date were in error not included in
the Accounts.
4.1.12 the liability in question is interest and penalties which arises as a
result of the failure of the Purchaser to comply with any time limits
in clause 7 (Conduct of Claims) of this deed.
4.2 Clauses 7.2, 7.3.1, 7.4, 7.5, 7.6 and 7.9 of the Agreement shall have
effect as if they were set out in full in this deed with any necessary
amendments to ensure that they limit the liability of the Covenantors
under his deed in the same manner and to the same extent as they limit
the liability of the Vendors under the Agreement.
5 WAIVER
------
No delay or omission of the Purchaser in exercising any rights under
this deed shall prejudice such rights or be construed as a waiver or
partial waiver of such rights, nor shall it exclude the further
exercise of such rights.
6 PAYMENT
-------
6.1 The Covenantors shall pay any amounts due under this deed in sterling
in cleared funds:
6.1.1 not less than two business days prior to the date on which the
Taxation in question is payable to the authority or official or person
demanding it; or
6.1.2 (where a liability to Taxation relates to the loss, nullification or
cancellation of a right to a repayment of Taxation) not less than two
business days prior to the date when the Company would have been
entitled to receive a repayment of Taxation were it not for its loss,
nullification or cancellation; or
6.1.3 (in respect of any other amounts due under this deed including the
loss or use of any Accounts Relief or Purchaser's Relief) within five
business days after the Purchaser shall make a demand for such
amounts.
6.2 Any sums not paid by the Covenantors on the due date for payment as
specified in this clause shall bear interest (which shall accrue from
day to day after as well as before any judgment for the same) at the
annual rate of 3 percentage points above the base rate of National
Westminster Bank plc from time to time from the due date up to and
including the day of actual payment of such sums, such interest to be
compounded quarterly and paid by the Covenantors on demand by the
Purchaser.
7 CONDUCT OF CLAIMS
-----------------
7.1 The Purchaser shall or shall procure that the Company shall give
notice to the Covenantors as soon as reasonably practicable (and in
any event within 15 business days in the case of an assessment to
Taxation) after it shall become aware of any Claim in respect of which
a claim may be made pursuant to this deed.
7.2 The Purchaser shall and shall procure that the Company shall provide
such relevant information and documentation as the Covenantors may
reasonably request to avoid, dispute, resist, appeal, compromise or
defend any Claim and
any adjudication in respect thereof ("dispute") subject to the
-------
Purchaser and the Company being indemnified and secured to the
Purchaser's reasonable satisfaction by the Covenantors against all
losses, costs, expenses, damages, interest, penalties and surcharges
thereby incurred.
7.3 Subject to the provisions of this clause 7, any dispute relating to a
liability to Taxation shall be conducted by the Covenantors but:
7.3.1 the Covenantors shall keep the Purchaser fully informed of all
relevant matters and shall promptly forward or procure to be forwarded
to the Purchaser copies of all relevant correspondence and other
relevant information and documentation;
7.3.2 all communications written or otherwise relating to the dispute which
are to be transmitted to a Taxation authority shall first be submitted
to the Purchaser for approval and shall only be finally transmitted if
such approval is given, such approval not to be unreasonably withheld;
7.3.3 the appointment of solicitors or other professional advisers shall be
subject to the prior written approval of the Purchaser, such approval
not to be unreasonably withheld;
7.3.4 the Covenantors shall make no settlement or compromise of the dispute
nor agree any matter in the conduct of such dispute which is likely to
increase the amount thereof or the future Taxation liability of the
Purchaser or the Company without the prior approval of the Purchaser,
such approval not to be unreasonably withheld.
7.4 The Purchaser or the Company may without reference to any of the
Covenantors admit, settle, discharge, compromise or otherwise deal
with any outstanding or future Claim (without prejudice to their
rights under this deed) if:
7.4.1 the Covenantors serve a notice on the Company or the Purchaser to the
effect that in relation to any such dispute the Covenantors do not
wish to take up or continue the conduct thereof;
7.4.2 a period of 15 business days has expired following the service of
notice by the Purchaser or, as the case may be, the Company on the
Covenantors pursuant to clause 7.1 where either the Covenantors have
not made a request to the
Purchaser in accordance with clause 7.2 or the Covenantors have made
such a request but have failed to provide a duly executed indemnity
and security in the manner stipulated by the Purchaser within the said
period;
7.4.3 the Covenantors unreasonably delay or otherwise act unreasonably in
dealing with any matter and the Purchaser has served notice on the
Covenantors notifying them that they wish to take over conduct of the
matter and the Covenantors do not deal with the outstanding matter
within 15 business days of service of such notice; or
7.4.4 the Covenantors or the Company have committed any acts or omissions
prior to Completion which constitute fraud or wilful default.
7.5 The Covenantors shall be bound to accept for the purposes of the
covenants contained in this deed any admission, settlement, discharge
or compromise of any Claim and the outcome of any proceedings relating
thereto made or arrived at in accordance with the procedures set out
in clause 7.4.
7.6 If the Covenantors do not exercise their right to request the
Purchaser to take action pursuant to clause 7.2, they shall supply the
Company and the Purchaser free of charge with all relevant
information, books, papers and other documents in the possession or
under the control of all or any of them and shall give or procure the
giving (as appropriate) of such statements and other reasonable co-
operation by the Covenantors as the Company or the Purchaser may
reasonably request or require for the purpose of resisting any Claim.
8. OVERPROVISIONS AND RELIEFS
--------------------------
8.1 The Covenantors shall be entitled to require the Purchaser to request
the auditors for the time being of the Company to determine (as
experts and not as arbitrators and at the expense of the Covenantors)
whether any provision for Taxation in the Accounts (excluding any
provision for deferred Taxation) has proved to be an overprovision,
and the amount of any overprovision so determined shall be dealt with
as follows:
8.1.1 the amount of the overprovision shall first be set off against any
payment then due from the Covenantors under this deed;
8.1.2 to the extent there is an excess, a refund shall be made to the
Covenantors of any previous payment or payments made by the
Covenantors under this deed
and not previously refunded under this clause up to the amount of such
excess; and
8.1.3 to the extent that the excess referred to in paragraph 8.1.2 is not
exhausted under that sub-clause, the remainder of that excess shall be
carried forward and set off against any future payment or payments
which become due from the Covenantors under this deed.
8.2 If any liability to Taxation which has resulted in a payment having
been made by the Covenantors under this deed has given rise to a
Relief for a Company or the Purchaser which would not otherwise have
arisen or a tax refund or repayment is made in respect of a period
ending on or before the Accounts Date which is not an Accounts Relief,
then:
8.2.1 the Purchaser shall procure that full details of the Relief, refund or
repayment are given to the Covenantors as soon as reasonably
practicable; and
8.2.2 any tax refund or repayment shall be set off against (and to the
extent of) any payment due from the Covenantors under this deed and to
the extent that there is any excess, a refund shall be made to the
Covenantors of any previous payment or payments made by the
Covenantors under this deed and not previously refunded under this
clause up to the amount of such excess; and
8.2.3 the Purchaser shall procure that the Company use any Relief (to the
extent permitted by law) as soon as reasonably practicable; and
8.2.4 as and when the liability of a Company or the Purchaser to make an
actual payment of or in respect of Taxation is reduced by reason of
that Relief the Purchaser shall make a payment to the Covenantors of
an amount equal to the amount by which that liability is so reduced up
to the amount of any previous payment or payments made by the
Covenantors under this deed and not previously refunded under this
clause; and
8.2.5 to the extent there is any excess under clauses 8.2.2 and 8.2.4, such
excess shall be carried forward and set off against any future payment
or payments which become due from the Covenantors under this deed.
9. CLAIMS AGAINST THIRD PARTIES
----------------------------
9.1 Where the Covenantors have made a payment under this deed and a
Company becomes aware that it is entitled to recover from any third
party (including a
Taxation Authority but excluding any other Company) any sum in respect
of the liability to which the payment made by the Covenantors relates,
the Purchaser shall notify the Covenantors of the entitlement as soon
as reasonably practicable after it shall become aware thereof.
9.2 The Purchaser shall or shall procure that the Company shall (at the
request and expense of the Covenantors and upon the Covenantors
indemnifying and securing the Purchaser and the Company to the
reasonable satisfaction of the Purchaser against all costs or expenses
which may thereby be incurred) take such action as the Covenantors
shall reasonably request to enforce such recovery as is mentioned in
clause 9.1 against the third party in question and shall as soon as
reasonably practicable thereafter account to the Covenantors for any
sums so recovered less costs and expenses incurred (including any
interest or repayment supplement paid by the third party) up to an
amount not exceeding any amount paid by the Covenantors to the
Purchaser under clause 3 in respect of the same matter.
10. PURCHASER'S COVENANTS
---------------------
10.1 The Purchaser covenants with the Covenantors to pay to the Covenantors
an amount equal to any corporation tax liability of any Company
(together with all interest, penalties, costs and expenses incurred by
the Covenantors in connection therewith) in respect of any accounting
period of the Company beginning before the date of the Agreement which
is assessed on the Covenantors pursuant to sections 767A, 767AA and
767B ICTA.
10.2 Any payment which the Purchaser is obliged to make pursuant to clause
10.1 shall be made on or before the date which is three business days
before the Covenantors are obliged to pay the corporation tax in
question in order to avoid interest or penalties and any payment not
made on or before the due date for payment pursuant to this clause
shall carry interest at the rate of 3 per cent above the base rate of
National Westminster Bank plc from the due date until payment provided
that no interest shall run under this clause 10.2 at the same time as
interest is accruing on unpaid Taxation in respect of which interest,
the Covenantors receive full recovery having made a claim under clause
10.1.
10.3 The Purchaser shall be entitled to set off against any amount which it
is liable to pay to the Covenantors under this clause 10 any amount
which the Covenantors are liable to pay to the Purchaser under clause
3 of this deed.
11. CONDUCT OF TAX AFFAIRS
----------------------
11.1 The Purchaser and/or the Company shall have conduct of the
preparation, submission to and negotiation and agreement with the
Inland Revenue or any other Taxation authority of any corporation tax
return or computation in respect of any accounting period of the
Company ended on or before the Balance Sheet Date (the costs of all or
any of which shall be borne by the Company).
11.2 The Covenantors shall provide the Purchaser or the Company, at the
Company's expense, with such documents, information and assistance as
either may reasonably require in connection with the preparation,
submission and negotiation and agreement with the Inland Revenue or
any other Taxation authority of any return or corporation referred to
in clause 11.1.
11.3 The Purchaser shall or shall procure that the Company shall provide
the Covenantors with copies of the corporation tax return and
computations relating to the accounting period of the Company ended on
the Balance Sheet Date prior to their submission to the Inland Revenue
or other Taxation authority and shall take account of the Covenantors'
reasonable comments but shall not be bound to make any amendment to
such tax return or computations as a result.
12 GENERAL
-------
12.1 Each of the Covenantors hereby irrevocably appoints ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇ jointly to be his/its true and lawful
attorney ("Covenantors' Representatives") with full power for him and
----------------------------
in his name or in the names of the Covenantors' Representatives and on
behalf of the relevant Covenantor to do and perform any of the acts
and things to be done and performed by the relevant Covenantor under
this deed, to receive any notice to be sent to any one or more of the
Covenantors, to give any notice on behalf of the Covenantors and to
approve, complete, sign, execute and deliver any and all documents and
deeds (other than this deed) as the Covenantors'
Representatives, in their absolute discretion, may think necessary or
desirable to be approved, completed, signed, executed or delivered by
the relevant Covenantor in connection with or relating to any matters
relating to this deed.
12.2 Should a Covenantors' Representative from time to time be replaced by
the Covenantors, the former Covenantors' Representative and the newly
appointed Covenantors' Representative shall give notice to that
effect, together with evidence of the agreement of all of the
Covenantors to the appointment, to the Purchaser within five business
days of such appointment.
13 REDUCTION OF PURCHASE PRICE
---------------------------
Any amounts payable pursuant to this deed shall be deemed to
constitute a reduction in the Consideration.
14. ASSIGNMENT
----------
The provisions of clauses 12.4 and 12.5 of the Agreement shall apply
equally to this deed.
15. NOTICES
-------
The provisions of clause 15 of the Agreement shall apply equally to
this deed.
16. LAW
---
The provisions of clause 16 of the Agreement shall apply equally to
this deed.
SCHEDULE
--------
(the Covenantors)
---------------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ May
Poplars Farm Poplars Farm
High Street High Street
Shutlanger Shutlanger
Towcester Towcester
Northants Northants
NN12 8SQ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
"The Bails" Woodlands
Boughton Hall ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
NN2 8SQ
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Woodlands 35 Western Drive
▇▇▇▇▇ Covert Hanslope
Bagshot ▇▇▇▇▇▇ Keynes
Surrey Buckinghamshire
GU19 5HU MK19 7LB
Beverley ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Blackmoor Farm Blackmoor Farm
Ockham Lane Ockham Lane
Cobham Cobham
Surrey Surrey
KT11 1LZ ▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇
AIB Nominees (Jersey) Limited ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ Askham
AIB House Charter Court
PO Box 468 Third Avenue
Grenville Street ▇▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇ S015 0AP
Channel Islands
Avrocet Trading Company Limited ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇ ▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ on ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Bective Havan
Surrey Co ▇▇▇▇▇
▇▇▇▇ ▇▇▇ Eire
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Priory Edington Priory
near Westbury near ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Free
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ House
Hammersmith ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ SW13 9HQ
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
c/o Elgin Capital Ltd c/o Elgin Capital Ltd
▇▇ ▇▇▇▇▇ ▇▇▇▇ 19 Elgin Road
Ballsbridge Ballsbridge
▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇
Eire Eire
The Royal Bank of Scotland Trust Umradia Hansa
Company (IOM) Limited 4 Virginia Close
as Trustees of the Amoeba Fund ▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ House Bedfordshire
Prospect Hill LU2 7LX
Douglas
Isle of Man
Continental Assets & Securities Glenross International Limited
Limited Centurion House
4 BIS PO Box 702
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Street
Beaubassin St Helier
Mauritius Jersey
Channel Islands
Valmet Isle of Man Limited ▇▇▇▇▇▇▇▇ Limited
▇▇▇▇▇▇ ▇▇▇▇▇ ▇/▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ Peregrine House
▇▇▇▇▇▇▇ ▇▇▇▇ Road
Isle of Man IM1 2PT ▇▇▇▇▇▇▇
Isle of Man ▇▇▇▇ ▇▇▇
SIGNED AS A DEED by )
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ )
in the presence of:- )
SIGNED AS A DEED by )
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ )
in the presence of:- )
SIGNED AS A DEED by )
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ MAY )
in the presence of:- )
SIGNED AS A DEED by )
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
▇▇▇▇▇▇ )
in the presence of:- )
SIGNED AS A DEED by )
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ )
in the presence of:- )
SIGNED AS A DEED by )
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ )
in the presence of:- )
SIGNED AS A DEED by )
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
in the presence of:- )
SIGNED AS A DEED by )
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
DEACON ▇▇▇▇▇▇ )
in the presence of:- )
SIGNED AS A DEED by )
BRIGITTE )
▇▇▇▇▇▇ )
in the presence of:- )
SIGNED AS A DEED by )
▇▇▇ ▇▇▇▇▇▇▇ )
in the presence of:- )
SIGNED AS A DEED by )
▇▇▇▇▇ ▇▇▇▇▇ )
in the presence of:- )
SIGNED AS A DEED by )
▇▇▇▇▇▇ ▇▇▇▇▇▇ )
in the presence of:- )
SIGNED AS A DEED by )
▇▇▇▇▇▇ ▇▇▇▇▇▇ )
in the presence of:- )
SIGNED AS A DEED by )
▇▇▇▇▇▇ ▇▇▇▇▇▇ )
in the presence of:- )
EXECUTED AS A DEED by )
AIB NOMINEES (JERSEY) )
LIMITED )
acting by )
)
and )
)
SIGNED AS A DEED by )
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ )
ASKHAM )
in the presence of:- )
EXECUTED AS A DEED by )
AVROCET TRADING )
COMPANY LIMITED )
acting by )
)
and )
)
SIGNED AS A DEED by )
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
in the presence of:- )
SIGNED AS A DEED by )
▇▇▇▇▇ ▇▇▇▇ )
in the presence of:- )
SIGNED AS A DEED by )
▇▇▇▇▇▇ FREE )
in the presence of:- )
SIGNED AS A DEED by )
▇▇▇▇▇▇ ▇▇▇▇▇ )
in the presence of:- )
SIGNED AS A DEED by )
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
in the presence of:- )
EXECUTED AS A DEED by )
THE ROYAL BANK OF )
SCOTLAND TRUST COMPANY )
(IOM) LIMITED )
acting by )
)
and )
)
SIGNED AS A DEED by )
UMRADIA HANSA )
in the presence of:- )
EXECUTED AS A DEED by )
CONTINENTAL ASSETS & )
SECURITIES LIMITED )
acting by )
)
and )
)
EXECUTED AS A DEED by )
GLENROSS INTERNATIONAL )
LIMITED )
acting by )
)
and )
)
EXECUTED AS A DEED by )
VALMET ISLE OF MAN )
LIMITED )
acting by )
)
and )
)
EXECUTED AS A DEED by )
▇▇▇▇▇▇▇▇ LIMITED )
acting by )
)
and )
)
EXECUTED AS A DEED by )
DOLLAR FINANCIAL UK LTD )
acting by )
)
and )
)
Director:
Director/Secretary:
SIXTH SCHEDULE
--------------
EARN OUT
--------
1. Definitions
-----------
For the purposes of this schedule, unless the context otherwise
requires:
"Adjusted Relevant Profits" shall mean and be computed in accordance
-------------------------
with paragraph 3 of this schedule and calculated by reference to the
Relevant Accounts;
"Business" shall mean the means all or any part of the Group's
--------
business of First Party Cheque Cashing, Third Party Cheque Cashing,
Money Transfers, pawn broking, the sale of mobile telephones, prepaid
telephone cards, retail jewellery sales and jewellery repairs as
carried on during the Earn Out Period together with any other
activities which shall constitute an Accepted Relevant Alteration;
"Bonus Payments" shall mean any bonus payments payable to any one of
--------------
or all of ▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇▇ if the Group achieves
those targets specified in clause 4.3 of their service agreements;
"Central Overheads" means all costs associated with the operation of
-----------------
the Group and which are not directly attributable to the Properties or
Substituted Properties and shall include:-
(a) the wages, salaries, bonuses and associated payroll taxes and
national insurance of all staff employed at the head office
including all directors;
(b) the rent and rates for the head office; and
(c) other costs necessary for the operation of the head office
function including heat, light, water, telephones, security,
cleaning, stationery, printing and postage;
"Earn Out Period" means the period from 1 July 1999 to 30 June 2000
---------------
inclusive;
"EBITDA" means Operating Profit (as shown in the Relevant Accounts)
------
plus depreciation and amortisation;
"Executives" means ▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, and ▇▇▇ ▇▇▇▇▇▇▇;
----------
"Independent Accountants" means such firm of Chartered Accountants as
-----------------------
the Vendors and the Purchaser may appoint to act as the "Independent
Accountants" in accordance with this schedule or, (if the parties fail
to so agree within 14 days after either party shall have nominated a
particular firm in accordance with paragraph 4), such firm as may be
appointed (at the request of either party) by the President for the
time being of the Institute of Chartered Accountants in England and
Wales;
"Initial Payment" means the amount of (Pounds)8,000,000 to be paid on
---------------
Completion either to the Vendors' Solicitors, pursuant to clause
4.5.1.1 or to the Escrow Account pursuant to clause 4.5.1.2;
"Instalment" means either the Second Instalment or the Third
----------
Instalment;
"LIBOR" means London Inter Bank Offered Rate;
-----
"New Properties" means any stores opened by the Group in relation to
--------------
the Business after Completion other than Substituted Properties;
"Proposed Board" means the new proposed board of directors of the
--------------
Company and each of its Subsidiaries immediate after Completion,
comprising ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, and ▇▇▇ ▇▇▇▇▇▇▇ as directors and
▇. ▇▇▇▇▇▇▇▇▇▇ as the company secretary;
"Purchaser's Group" means the Purchaser and any undertaking which
-----------------
shall be its parent undertaking and any undertaking which shall be a
subsidiary undertaking of the Purchaser or any such parent undertaking
for the time being and any of them other than the Company;
"Relevant Accounts" means the profit and loss accounts for the period
-----------------
of twelve months ending on 30 June 2000 of the Group in relation to
the Business prepared as if they are audited accounts on a statutory
basis as carried on from the Properties and any Substituted Property
(but not from any New Properties) which shall be prepared by the
Purchaser pursuant to paragraph 4 of this schedule in accordance with
generally accepted UK accounting practices and principles, including
Statements of Standard Accounting Practice and Financial Reporting
Standards and subject thereto on a basis consistent with and using the
accounting principles, policies and
practices adopted in the Accounts but excluding any policies which
would breach UK GAAP as at 30 June 2000;
"Relevant Profits" shall mean and be computed in accordance with
----------------
paragraph 2 of this schedule and calculated by reference to the
Relevant Accounts;
"Relevant Statement" means a statement showing the adjustments, if
------------------
any, which are required to be made to the Relevant Accounts in order
to arrive at the Relevant Profits and the Adjusted Relevant Profits
together with a statement of an amount of the Second and Third
Instalment (if any) to be issued pursuant to paragraph 4 of this
schedule;
"the Reporting Accountants" means Ernst & Young of ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
-------------------------
▇▇▇▇▇ ▇▇▇ ▇▇▇ acting on behalf of the Purchaser;
"Reviewing Accountants" means BDO ▇▇▇▇ ▇▇▇▇▇▇▇ of ▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
---------------------
▇▇▇▇▇▇ acting on behalf of the Vendors;
"Second Instalment" means an amount calculated in accordance with the
-----------------
following formula:
if the Relevant Profits shall be less than (Pounds)2,167,000 the
Second Instalment shall be nil;
if the Relevant Profits shall be (Pounds)2,167,000 or more then the
Second Instalment shall be calculated as follows before deducting any
Bonus Payments:
--------------------------------------------------------------------------
Relevant Multiple Total Less Initial Second
Profits Payment Consideration Instalment
(Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
--------------------------------------------------------------------------
(Pounds)2,167 4.25 (Pounds)9,210 (Pounds)8,000 (Pounds)1,210
--------------------------------------------------------------------------
(Pounds)2,384 4.55 (Pounds)10,847 (Pounds)8,000 (Pounds)2,847
--------------------------------------------------------------------------
(Pounds)2,600 4.65 (Pounds)12,090 (Pounds)8,000 (Pounds)4,090
--------------------------------------------------------------------------
(Pounds)2,817 4.75 (Pounds)13,380 (Pounds)8,000 (Pounds)5,381
--------------------------------------------------------------------------
(Pounds)3,034 4.75 (Pounds)14,412 (Pounds)8,000 (Pounds)6,412
--------------------------------------------------------------------------
(Pounds)3,168 4.75 (Pounds)15,048 (Pounds)8,000 (Pounds)7,048
--------------------------------------------------------------------------
If the Relevant Profits shall fall between any two sums in column 1 of
the table above, the Second Instalment shall be calculated by applying
the lower of the two multiples, set opposite those sums in column 2 of
the above table.
For example, if the Relevant Profits shall be (Pounds)2,700,000, the
relevant multiple shall be 4.65 (because the multiple used to
calculate the Total Payment based on Relevant Profits of
(Pounds)2,600,000 is 4.65 whereas the multiple used where the Relevant
Profits are (Pounds)2,817,000 is 4.75).
The Second Instalment shall not in any circumstances exceed
(Pounds)7,048,000 (seven million and forty eight thousand pounds);
"Substituted Property" means a property which shall be acquired by the
--------------------
Group during the Earn Out Period within a radius of one and one half
miles from any of the Properties ("the Original Property") and to
---------------------
which the business carried on at the Original Property shall be
transferred because the lease of the Original Property shall have been
terminated or some other event shall have occurred;
"Third Instalment" means an amount calculated in accordance with the
----------------
following formula:
If the Adjusted Relevant Profits shall be (Pounds)3,255,000 or more
then the Third Instalment shall be calculated as follows:
--------------------------------------------------------------------------
Adjusted Multiple Incremental Third Instalment
Relevant Profits Surplus Payment
(Pounds)'000 (Pounds)'000 (Pounds)'000
--------------------------------------------------------------------------
(Pounds)3,255 4.63 (Pounds)659 (Pounds)659
--------------------------------------------------------------------------
(Pounds)3,469 4.51 (Pounds)574 (Pounds)1,233
--------------------------------------------------------------------------
(Pounds)3,690 4.37 (Pounds)480 (Pounds)1,713
--------------------------------------------------------------------------
(Pounds)3,906 4.23 (Pounds)397 (Pounds)2,110
--------------------------------------------------------------------------
(Pounds)4,127 4.15 (Pounds)605 (Pounds)2,715
--------------------------------------------------------------------------
(Pounds)4,347 4.10 (Pounds)696 (Pounds)3,411
--------------------------------------------------------------------------
If the Adjusted Relevant Profits shall fall between any two sums (the
"lower sum" and "higher sum") in column 1 in the table above, the
--------- ----------
Third Instalment shall be calculated by:-
(a) multiplying the lower sum by the multiple set opposite it in
column 2 of the table;
(b) adding to that resultant sum, the amount obtained by multiplying
the Adjusted Relevant Profits to the extent that they shall
exceed the lower sum by the multiple set opposite the higher sum
in that column; and
(c) deducting a sum equal to (Pounds)14,412,000.
For example, if the Adjusted Relevant Profits shall be
(Pounds)3,800,000, the first (Pounds)3,690,000 shall be multiplied by
4.37 and the balance of (Pounds)110,000 shall be multiplied by 4.23).
The Third Instalment shall not in any circumstances exceed
(Pounds)3,411,000 (three million, four hundred and eleven thousand
pounds).
"Turnover" means the gross value of all of the following: (i) Customer
--------
Cheques; (ii) Third Party Cheques; (iii) pawnbroking interest and
charges; (iv) money transfers; and (v) other sales.
2. Relevant Profits
----------------
For the purposes of this schedule "Relevant Profits" shall mean the
----------------
gross profit on the ordinary activities of the Business of the Group
from the Properties and any Substituted Property (but not any new
properties from which the Group may trade during the Earn Out Period)
as shown in the Relevant Accounts (after making any adjustments
considered by Reporting Accountants to be necessary so that the
Relevant Accounts comply with the provisions of this schedule); but
2.1 after charging or providing for all losses, costs, charges and
expenses borne or incurred by the Group which are directly
attributable to the Properties and Substituted Properties (but not New
Properties), accounted for in accordance with past practices and
properly chargeable against revenue in the period to which the
Relevant Accounts relate (save as provided for in paragraph 2.2)
including:
2.1.1 the following expenses incurred in managing the Group's shops:
(a) staff costs (including contributions to pension schemes);
(b) bank charges;
(c) print, post and stationery;
(d) telephone;
(e) cash delivery costs;
(f) over/under paid cash;
(g) cash differences in the safe;
(h) recruitment costs;
(i) but excluding costs which shall be central overheads.
2.1.2 bad debts incurred net of recoveries but after recovery costs;
2.1.3 expenditure in connection with short-term leasing or hiring
commitments incurred directly for the purposes of the Group's Business
(but not lease finance agreements made to finance the acquisition of
fixed assets);
2.1.4 all rental and other costs in relation to the occupation by the Group
(including insurance, utility and security costs) of the Properties
and any Substituted Properties from time to time occupied by them for
the purpose of carrying on their Business;
2.1.5 a contribution (equal to 0.59% of Turnover as shown in the Relevant
Accounts) towards the costs of the central overheads of the Group; and
2.1.6 all liabilities, losses, costs, charges and expenses borne or incurred
by the Group in relation to the Time to Insure Agreement (subject to
paragraph 2.3); and
2.1.7 a provision (equal to 0.39% of Turnover notionally on account of
advertising expenses incurred by the Group; and such provision shall
be included in substitution for the figure in the Relevant Accounts
(in substitution for any advertising expenses actually incurred)
whether the advertising expenses actually incurred shall be greater or
less than such provision.
2.2 before crediting to, charging against, including or making provision
in those accounts for any of the following:-
2.2.1 any profits or losses of a capital nature;
2.2.2 any interest payable or receivable by the Group other than provided
for in paragraph 2.1.5 above;
2.2.3 corporation tax and any other form of Taxation levied upon or measured
by profits or gains;
2.2.4 depreciation and amortisation;
2.2.5 any appropriation to or from reserves of a capital or revenue nature;
2.2.6 any dividends paid or proposed to be paid by the Group; and
2.2.7 any advertising expenses actually incurred.
2.3 after crediting earnings receivable from the Group's other activities
including revenue from the Time to Insure Agreement for cheque cashing
and a contribution to the overheads of the Properties from which Time
to Insure operates pursuant to clause 12 of that agreement and
royalties from South as specified in the South Agreement (but only to
the extent that such revenues and royalties would be recognised in
accounts drawn up with generally accepted accounting practice in the
UK);
2.4 after reflecting:-
2.4.1 any items to be included in or excluded from the Relevant Accounts
pursuant in paragraph 6.6; and
2.4.2 (if any member of the Purchaser's Group shall open an outlet carrying
on a business which is the same as the Group's Business within 3 miles
of any of the Properties or the Substituted Properties ("Impaired
--------
Store") the amount (if any) by which the planned store contribution
-----
(as specified in the Business Plan) of each Impaired Store shall
exceed the actual contribution from each Impaired Store during the
Earn Out Period.
3. Adjusted Relevant Profits
-------------------------
For the purposes of this schedule "Adjusted Relevant Profits" shall
-------------------------
mean the gross profit on the ordinary activities of the Business of
the Company from the Properties and the New Properties (together, the
-------------
"Enlarged Property Portfolio") as shown in the Relevant Accounts
---------------------------
(after making any adjustments considered by Reporting Accountants to
be necessary so that the Relevant Accounts comply with the provisions
of this schedule); but
3.1 after taking into account all the matters specified in paragraphs 2.1,
2.2 and 2.3 of this schedule as they shall apply to the Enlarged
Property Portfolio other than paragraph 2.1.5;
3.2 after an interest charge of (Pounds)347 per month for each new
location acquired by the Group after Completion; and
3.3 after charging or providing for all costs (other than those
specifically excluded in paragraph 2.2) of the central overheads of
the Group.
4. Preparation and agreement of Relevant Accounts
----------------------------------------------
4.1 The Purchaser shall procure that draft Relevant Accounts shall be
prepared with all reasonable speed following the end of the Earn Out
Period with a view to the Reporting Accountants reporting that in
their opinion the Relevant Accounts have been prepared in accordance
with this schedule.
4.2.1 As soon as practicable after the draft of the Relevant Accounts
becomes available the Purchaser shall instruct the Reporting
Accountants to prepare their report (if necessary after making any
changes to the draft of the Relevant Accounts which the Reporting
Accountants shall consider to be necessary so that the Relevant
Accounts comply with this schedule) together with a draft of the
Relevant Statement;
4.2.2 If the Relevant Accounts and the Relevant Statement shall not be
prepared within three months of the end of the Earn Out Period (other
than as a consequence of any failure by any of the Vendors), the
Purchaser shall pay to the Vendors interest on the Second and Third
Instalments, if any, at the rate of LIBOR plus 5% with effect from the
third month after the end of the Earn Out Period until the date of
actual payment.
4.3 The Reporting Accountants shall have access to all the Group's books,
documents and records, directors and staff which/whom it shall be
reasonably necessary for them to investigate or interview in relation
to their report on the Relevant Accounts and the preparation of the
Relevant Statement.
4.4 As soon as they shall have completed their report, the Reporting
Accountants shall submit the draft of the Relevant Accounts
(incorporating any amendments which the Reporting Accountants shall
consider to be necessary so that they comply with this schedule) with
a draft of the Relevant Statement to the Vendors, the Purchaser and
the Reviewing Accountants.
4.5 The Reviewing Accountants shall notify the Reporting Accountants in
writing whether or not they agree that the draft Relevant Accounts and
the draft of the Relevant Statement as submitted to them have been
prepared in accordance with this schedule within 28 days after they
shall have received them; and if
they do not agree the Reviewing Accountants shall give particulars and
explanations of the adjustments which they consider should be made.
For these purposes, if no such notification and (where appropriate)
particulars and explanations) shall be given by the Reviewing
Accountants within such period they shall be deemed to have agreed
that the draft Relevant Accounts and the draft of the Relevant
Statement have been prepared in accordance with the relevant
provisions of this schedule.
4.6 If (within 28 days after the Reviewing Accountants shall have notified
the Reporting Accountants in accordance with paragraph 4.5) the
Reporting Accountants and the Reviewing Accountants shall be unable to
agree what adjustments (if any) should be made so that the draft
Relevant Accounts and the draft Relevant Statement are prepared in
accordance with this schedule then the matters outstanding or in
----
dispute shall, on the application of either the Vendors or the
Purchaser, immediately be referred to the Independent Accountants who
shall be instructed to report whether or not the draft Relevant
Accounts and/or the draft of the Relevant Statement do comply with
this schedule and if not to make such adjustments thereto as they
shall consider necessary to ensure that they do.
4.7 The Vendors and Purchaser will procure (so far as they are each able
to do so) that the Group and the Reporting Accountants will make
available to the Reviewing Accountants and (if appointed) the
Independent Accountants such of the Group's books, documents, records,
directors and staff together with access to such premises and the use
of facilities as may be reasonably required in relation to the tasks
which this agreement contemplates they will carry out.
4.8 The Independent Accountants, if appointed, shall act as experts and
not as arbitrators and their decisions on the matters which shall be
referred to them shall be final and binding on the parties (save in
the case of manifest error).
4.9 The costs of the Independent Accountants in connection with the
matters which shall be referred to them shall be borne as the
Independent Accountants shall direct or in default of such direction
as to one half by the Vendors and as to the other half by the
Purchaser.
4.10 The Relevant Accounts and the Relevant Statement shall be re-issued to
the Vendors' Representatives and the Purchaser by the Reporting
Accountants within 3 Business Days after and in the form (the "Final
-----
Form") in which the Relevant Accounts and the Relevant Statement shall
----
have been agreed between the Reporting and Reviewing Accountants or
determined by the Independent Accountants in accordance with the
provisions of this schedule.
4.11 The issue of the Relevant Accounts and the Relevant Statement in the
Final Form pursuant to paragraph 4.10 of this schedule shall be final
and binding on the parties hereto (save in the event of manifest
error).
4.12 The costs of producing the Relevant Accounts and their review by the
Reviewing Accountants shall be paid by the Purchaser.
4.13 Without in any way affecting the effect of paragraph 4.11, the parties
recognise that further payments may become due to the Vendors as a
consequence of clause 3.2 of this agreement.
5. Payment of the Consideration
----------------------------
5.1 The Consideration shall be paid as follows:-
5.1.1 the Initial Payment shall be paid at Completion in accordance with
clause 4; and
5.1.2 the Second and Third Instalments (if any) shall be paid within 7 days
after the Second and Third Instalment Statements (as appropriate)
shall have been issued to the Vendors' Representatives and the
Purchaser in Final Form.
5.2 The Second and Third Instalments shall be paid to the Vendors or the
Vendors' Solicitors in the proportions specified in column 5 of the
First Schedule and satisfied in the manner specified in the seventh
schedule.
5.3 All payments of cash shall be made to the Vendors' Solicitors in the
manner set out in clause 4.5 of this agreement and the Loan Notes
despatched to the Vendor's Solicitors by courier.
6. Provisions which apply during Earn Out Period
---------------------------------------------
6.1 Purchaser's rights
The Purchaser shall be entitled to require the Company and the
Subsidiaries during the Earn Out Period to comply with such
requirements as the Purchaser shall make from time to time concerning
the management of the Group and the
operation of the Business (subject to the provisions of paragraph 6.3)
including:-
6.1.1 the way in which the Group shall conduct and manage its Business;
6.1.2 such budgeting, forecasting and reporting procedures and banking and
treasury arrangements as the Purchaser shall require to the extent
that they are consistent with those which the Purchaser shall require
of the other members of the Purchaser's Group to comply with;
6.1.3 all such regulations and requirements which might be necessary having
regard to the fact that the Company is a member of a group of
companies securities in which the ultimate holding company are listed,
dealt in or traded on a recognised stock exchange;
6.1.4 requiring the management of the Group fully to consult with the
Purchaser in respect of all matters concerning strategic development
and not make any acquisition of any business or company or enter into
any joint venture or partnership with any third party without the
written consent of the Purchaser; and
6.1.5 use its powers in relation to any shares in the Company which it owns
or controls to procure in so far as it is able the provisions of
paragraph 6.1 and 6.2 are complied with.
6.2 Restrictions on the Vendors
The Vendors shall not be entitled to require during the Earn Out
Period that the Company and its Subsidiaries shall:-
6.2.1 change the nature, scope or manner of conducting any of its businesses
from those carried on by the Group at the date of this agreement or
subsequently approved by the Purchaser;
6.2.2 pay any salary or other remuneration to directors of the Group or
other senior executives in excess of that provided for in their
respective service agreements or otherwise amend the service
agreements of any such persons or pay any bonus to employees of the
Group save where otherwise provided for in the Business Plan or engage
or dismiss any such persons without the approval of the Purchaser;
6.2.3 commence or threaten any material litigation or arbitration
proceedings;
6.2.4 enter into any material contract or arrangement outside the ordinary
course of business or of a long term nature or enter into any
guarantee or indemnity for the obligations of any third party; and
6.2.5 make any acquisition or disposal, (including the leasing, mortgaging,
charging or pledging of any assets of the Group) except where provided
for in the Business Plan.
6.3 Restrictions on the Purchaser
The Purchaser shall and shall procure that each member of the
Purchaser's Group (including where the context so admits the Group)
shall, during the Earn Out Period:-
6.3.1 not treat the Group on terms which shall be less favourable than if
the Purchaser and the Group were operating on an arm's length basis;
6.3.2 not intentionally take or omit to take any action which is designed
solely or mainly to affect adversely any payments to the Vendors in
accordance with this schedule, provided that at all times the
Purchaser shall be entitled to ensure that the Group shall be managed
in what it shall consider to be a proper manner;
6.3.3 not petition for a members' voluntary winding up any member of the
Group or permit or procure the passing of a resolution to wind up any
member of the Group unless the Purchaser shall be of the view that
that member shall be insolvent, or the winding up is part of a bona
fide reorganisation, amalgamation or reconstruction;
6.3.4 not require the Company to trade from the Properties under any name
other than 'Cash a Cheque' without the prior consent of ▇▇▇▇ ▇▇▇ (or
in his absence ▇▇▇▇▇▇▇ ▇▇▇▇▇▇), unless such trading name shall be bona
fide challenged by a third party, infringe a third party's trademark
or other intellectual property rights or become illegal; (but for the
avoidance of doubt this paragraph 6.3.4 shall not apply to the trading
name of any shops which the Company shall first open after
Completion); and
6.3.5 not call for the repayment of the Company's loan to Time to Insure
Limited other than in the event of default as defined in the loan
agreement between the Company and Time to Insure Limited dated 26
April 1999 (but this provision
shall not prohibit the Company converting that loan into shares of
Time to Insure Limited).
6.4 The Purchaser shall provide (or procure that there shall be provided
to) the Group during the Earn Out Period a continuous working capital
facility of not less than (Pounds)2,800,000.
6.5 Effect of the termination of ▇▇▇▇ ▇▇▇'▇ employment
If the Company shall terminate or serve notice to terminate ▇▇▇▇ ▇▇▇'▇
employment with the Company prior to the end of the Earn Out Period
(other than for a matter or conduct which renders him liable to
summary dismissal, comprising, for the avoidance of doubt, only those
matters specified in clause 17.1 of ▇▇▇▇ ▇▇▇'▇ service agreement) the
Purchaser shall be liable to pay the maximum amount of the Second
Instalment and the Third Instalment (but not in any event exceeding an
aggregate of (Pounds)10,459,000).
6.6 Consequences of a Relevant Alteration
6.6.1 If either the Purchaser or the Executives shall propose any Relevant
Alteration:-
6.6.1.1 if the Relevant Alteration shall have been proposed by the Purchaser,
▇▇▇▇ ▇▇▇ shall inform the Purchaser within 14 days after being
notified by the Purchaser of the Relevant Alteration whether or not it
is Accepted (and if he shall fail to give notice within that period
that it is Accepted it shall be deemed to be Rejected);
6.6.1.2 if the Relevant Alteration shall have been proposed by the Executives,
the Purchaser shall inform the Executives within 21 days after being
notified by the Executives of the proposal to make the Relevant
Alteration whether or not it is Accepted (and if the Purchaser shall
fail to give notice within that period that it is Accepted, it shall
be deemed to be Rejected);
6.6.1.3 if the Relevant Alteration is Accepted, then any costs or expenses
incurred by the Group in its implementation and any profits which the
Group shall earn from the Relevant Alteration during the Earn Out
Period will be included in the calculation of the Relevant Profits and
the Adjusted Relevant Profits, and
6.6.1.4 if the Relevant Alteration is Rejected, then any costs or expenses
incurred by the Group in its implementation and any profits which the
Group shall earn
from the Relevant Alteration during the Earn Out Period will not be
included in the calculation of the Relevant Profits and the Adjusted
Relevant Profits.
6.6.2 The Purchaser (but not the Executives) shall be entitled to require
the Group to make a Relevant Alteration even if it shall be Rejected
by the Executives.
6.6.3 For the purposes of paragraph 6.6:-
"Accepted" means that the provisions of paragraph 6.6.1.3 shall apply
--------
to the Relevant Alteration;
"Rejected" means that the provisions of paragraph 6.6.1.4 shall apply
--------
to the Relevant Alteration;
"Relevant Alteration" means:-
-------------------
(a) any alteration to the way in which the Business shall be carried
on which might reasonably be regarded as likely to have a material
effect (positive or negative) on its profitability other than any
alteration which shall be required to be made in order to comply with
the law or the rights of a third party or any alteration which the
Group would have made without any influence by the Purchaser in order
to respond to commercial pressures affecting similar businesses;
(b) the opening by the Group of any shop (other than a Substituted
Property) carrying on the Business within the radius of three miles of
any of the Properties.
6.6.5 If ▇▇▇▇ ▇▇▇ shall cease to be employed by the Company for any reason
the reference to him in paragraph 6.6.1 shall be substituted by a
reference to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇; and if ▇▇▇▇▇ ▇▇▇▇▇▇ shall subsequently
cease to be employed by the Company for any reason the reference to
him in paragraph 6.6.1 shall be substituted by a reference to ▇▇▇▇
▇▇▇▇▇▇▇.
6.7 Obligations on all parties
6.7.1 The parties shall procure that (so far as they are each able to do
so), unless the relevant action shall be approved by a majority of the
Proposed Board the Group shall not during the Earn Out Period:-
6.7.1.1 propose or pay any dividend or propose or make any other distribution
(as defined under sections 209, 418 and 419 of the Taxes Act) save to
another member of the Group;
6.7.1.2 guarantee any indebtedness of any person which shall not be a member
of the Group, (save where the Group is required by the Purchaser's
bankers ▇▇▇▇▇ Fargo to guarantee the liability of the Purchaser in
respect of any loans made to finance the acquisition of the Shares);
6.7.1.3 mortgage or charge or permit the creation of or suffer to subsist any
mortgage or fixed or floating charge, lien (other than a lien arising
by operation of law) or other encumbrance over the whole or any part
of the Group's undertaking, property or assets;
6.7.1.4 settle any claim or litigation involving a settlement amount in excess
of (Pounds)10,000 or conduct any litigation material to the Group save
for the collection of debts arising in the ordinary course of the
business carried on by the Group or any application for an interim
injunction or other application or action (including interim defence)
which shall be urgently required in the interests of the Group in
circumstances in which it is not reasonably practicable to seek the
views of all members of the Proposed Board;
67.1.5 acquire the whole or part of the undertaking of any other person or
dispose of the whole or a material part of the undertaking of the
Group save that the Group shall note be precluded from acquiring or
disposing of single retail units from time to time);
6.7.1.6 subscribe or otherwise acquire, or dispose of any shares in the
capital of any other company (unless it shall be a wholly owned
subsidiary of the Group);
6.7.1.7 adopt any bonus, profit sharing, share option or other incentive
scheme for any employee or director of the Group;
6.7.1.8 propose or implement any pension scheme;
6.7.1.9 make any material change in accounting policies or methods adopted by
the Group;
6.7.1.10 make any material change to the nature of the business of the Group
other than that envisaged in the Business Plan;
6.7.1.11 incur any capital expenditure (including without limitation
obligations under hire-purchase and leasing arrangements) which
exceeds the amount for capital expenditure set out in the Business
Plan in aggregate by more than (Pounds)100,000 or any individual item
by (Pounds)10,000;
6.7.1.12 enter into or vary any transaction or arrangement with, or for the
benefit of any of the Company's directors or shareholders or any other
person who is a "connected person" with any of its directors or
shareholders;
6.7.1.13 change the number of directors on the Proposed Board.
6.7.1.14 vary or make any binding decisions on the terms of employment and
service of any director, company secretary or employee of the Group
whose annual salary is (Pounds)25,000 or more, or increase or vary the
salary or other benefits of any such officer, or appoint or dismiss
any such officer save to the extent provided for in the Business Plan;
6.7.1.15 engage any employee on terms that either his contract cannot be
terminated by one months' notice or less or his emoluments and/or
commissions or bonuses are or are likely to be at the rate of
(Pounds)25,000 per annum or more or increase the emoluments and/or
commissions or bonuses of any employee earning (or so that after such
variation he will, or is likely to earn) more than (Pounds)25,000 per
annum save to the extent envisaged in the Business Plan;
6.7.1.16 make any material changes to level of advertising expenditure to that
set out in the Business Plan;
6.7.1.17 alter the basis upon which fees/commissions are charged to its
customers;
6.7.1.18 adopt any new services to those currently offered by any member of the
Group;
6.7.1.19 take or agree to take any leasehold interest in or licence over any
real property;
6.7.1.20 approval of any contract obligating the Company or any subsidiary to
pay more than (Pounds)25,000 for any goods or services;
6.7.1.21 make any material change to the Company's collection practices or
management information system.
6.7.1.22 enter into any partnership, joint venture or consortium agreement; or
6.7.1.23 enter into or vary either any unusual or onerous contract or any other
material or major or long term contract.
6.7.2 The Executives shall, during the currency of their employment by the
Company, be responsible for the day to day administration of the
business of the Group subject always to the control of the Proposed
Board and any limitations on their authority to enter into commitments
on behalf of the Group
(including the giving of instructions to the Group's bankers) which
the Proposed Board may require from time to time, provided that the
Executives shall have a duty to consult with (and be bound by the
decisions of) the Proposed Board with regard to (i) all matters which
materially affect (or may materially affect) the Group's business,
conditions, prospects, competitive position or regulatory standing;
and (ii) any matter that has had or can be reasonably expected to have
a material impact on the Business Plan.
6.7.3 In order to avoid logistical delays, the Proposed Board may elect to
devolve any of the duties outlined in paragraph 6.7.2 to a management
committee consisting of ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇.
6.7.4 The arrangements outlined in this clause 6.7 shall remain effective
until the earlier of (i) 30 June 2000; (ii) the termination by either
▇▇▇▇ ▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇ of their employment by the Company; (iii) the
termination by the Company of the employment of ▇▇▇▇ ▇▇▇ pursuant to
clause 17.1 of his service agreement; or (iv) the Group fails to
achieve any two of the following cumulative quarterly EBITDA targets
during consecutive quarters of the Earn Out Period:
a) 3 months to 30 September 1999: (Pounds)353,869;
b) 6 months to 31 December 1999: (Pounds)806,780;
c) 9 months to 31 March 2000: (Pounds)1,284,959;
d) 12 months to 30 June 2000: (Pounds)1,841,950.
7. Applicability of Warranties and Tax Deed
----------------------------------------
7.1 The approval of any Relevant Accounts or Statement by or on behalf of
the Purchaser (and all matters and things consequent to such approval)
shall not operate or be deemed to operate as a waiver of any of the
Purchaser's rights powers or privileges or of any of the other terms
and conditions of this agreement.
7.2 If it shall be found before the payment of the balance of the
Consideration that any matter which is the subject of a Warranty is
not as so warranted or represented or any claim under the Tax Deed is
threatened or pending then the Purchaser shall be entitled to withhold
out of such balance the amount reasonably estimated by the Purchaser
that would be payable by the Vendors pursuant to the agreement as a
result.
SEVENTH SCHEDULE
----------------
-------------------------------------------------------------------------------------------------------------------------
Name First Instalment Second Instalment Third Instalment South Payment South Recovery
---- ---------------- ----------------- ---------------- ------------- --------------
Payment
-------
-------------------------------------------------------------------------------------------------------------------------
Cash Loan Cash Loan Cash Loan Cash Loan Cash Loan
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Notes Notes Notes Notes Notes
----- ----- ----- ----- -----
-------------------------------------------------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇ 369940.64 - - X - X X - X -
▇▇▇▇▇▇▇
-------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 10003.35 1191447 - X - X X - X -
▇▇▇▇▇▇▇▇
-------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇▇ 10002.96 88476 - X - X X - X -
▇▇▇▇▇▇▇▇
-------------------------------------------------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇ 50015.69 966375 - X - X X - X -
May
-------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 10002.96 88476 - X - X X - X -
May
-------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ 10003.80 1166629 - X - X X - X -
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇ 20006.77 127048 - X - X X - X -
▇▇▇▇▇▇
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
Name First Instalment Second Instalment Third Instalment South Payment South Recovery
---- ---------------- ----------------- ---------------- ------------- --------------
Payment
-------
-------------------------------------------------------------------------------------------------------------------------
Cash Loan Cash Loan Cash Loan Cash Loan Cash Loan
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Notes Notes Notes Notes Notes
----- ----- ----- ----- -----
-------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 10003.94 149533 - X - X X - X -
-------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 7102.70 140871 - X - X X - X -
-------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 19505.27 276557 - X - X X - X -
Deacon ▇▇▇▇▇▇
-------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 10529.44 - - X - X X - X -
-------------------------------------------------------------------------------------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇ 50015.69 966375 - X - X X - X -
-------------------------------------------------------------------------------------------------------------------------
AIB Nominees 184194.97 - X - X - X - X -
(Jersey) Limited
-------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇ Askham 10002.47 69766 - X - X X - X -
-------------------------------------------------------------------------------------------------------------------------
Avrocet Trading 246628.15 - X - X - X - X -
Company
Limited
-------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 159536.94 - - X - X X - X -
-------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇ 24811.18 - - X - X X - X -
-------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ 12482.17 - X - X - X - X -
-------------------------------------------------------------------------------------------------------------------------
139
-------------------------------------------------------------------------------------------------------------------------
Name First Instalment Second Instalment Third Instalment South Payment South Recovery
---- ---------------- ----------------- ---------------- ------------- --------------
Payment
-------
-------------------------------------------------------------------------------------------------------------------------
Cash Loan Cash Loan Cash Loan Cash Loan Cash Loan
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Notes Notes Notes Notes Notes
----- ----- ----- ----- -----
-------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ 85932.48 - - X - X X - X -
-------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ 85932.98 - - X - X X - X -
-------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇ 47861.08 - - X - X X - X -
-------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Free 78690.00 - - X - X X - X -
-------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇ 47861.08 - X - X - X - X -
-------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 319073.88 - X - X - X - X -
▇▇▇▇▇▇▇
-------------------------------------------------------------------------------------------------------------------------
The Royal Bank of 95722.16 - X - X - X - X -
Scotland Trust
Company (IOM)
Limited
-------------------------------------------------------------------------------------------------------------------------
Hansa Umradia 12329.01 - - X - X X - X -
-------------------------------------------------------------------------------------------------------------------------
Continental 12329.01 - X - X - X - X -
Assets and
Securities
Limited
-------------------------------------------------------------------------------------------------------------------------
140
-------------------------------------------------------------------------------------------------------------------------
Name First Instalment Second Instalment Third Instalment South Payment South Recovery
---- ---------------- ----------------- ---------------- ------------- --------------
Payment
-------
-------------------------------------------------------------------------------------------------------------------------
Cash Loan Cash Loan Cash Loan Cash Loan Cash Loan
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Notes Notes Notes Notes Notes
----- ----- ----- ----- -----
-------------------------------------------------------------------------------------------------------------------------
Glenross 12329.01 - X - X - X - X -
International
Limited
-------------------------------------------------------------------------------------------------------------------------
Valmet Isle of 159536.94 - X - X - X - X -
Man Limited
-------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ Limited 1117620.07 - X - X - X - X -
-------------------------------------------------------------------------------------------------------------------------
141
SIGNED AS A DEED by
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
in the presence of:-
Witness Signature;
Name:
Address:
Occupation:
SIGNED AS A DEED by
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
in the presence of:-
Witness Signature;
Name:
Address:
Occupation:
SIGNED AS A DEED by
▇▇▇▇▇ ▇▇▇▇▇
in the presence of:-
Witness Signature;
Name:
Address:
Occupation:
SIGNED AS A DEED by
▇▇▇▇▇▇ ▇▇▇▇▇▇
in the presence of:-
Witness Signature;
Name:
Address:
Occupation:
SIGNED AS A DEED by
▇▇▇▇▇▇ ▇▇▇▇▇▇
in the presence of:-
Witness Signature;
Name:
Address:
Occupation:
SIGNED AS A DEED by
▇▇▇▇▇▇ ▇▇▇▇▇▇
in the presence of:-
Witness Signature;
Name:
Address:
Occupation:
SIGNED AS A DEED by
▇▇▇▇▇ ▇▇▇▇
in the presence of:-
Witness Signature;
Name:
Address:
Occupation:
SIGNED AS A DEED by
▇▇▇▇▇▇ FREE
in the presence of:-
Witness Signature;
Name:
Address:
Occupation:
SIGNED AS A DEED by
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
in the presence of:-
Witness Signature;
Name:
Address:
Occupation:
SIGNED AS A DEED by
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
in the presence of:-
Witness Signature;
Name:
Address:
Occupation:
SIGNED AS A DEED by
▇▇▇▇▇▇ ▇▇▇▇▇
in the presence of:-
Witness Signature;
Name:
Address:
Occupation:
SIGNED AS A DEED by
LUKE ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
in the presence of:-
Witness Signature;
Name:
Address:
Occupation:
SIGNED AS A DEED by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
in the presence of:-
Witness Signature;
Name:
Address:
Occupation:
SIGNED AS A DEED by
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
in the presence of:-
Witness Signature;
Name:
Address:
Occupation:
SIGNED AS A DEED by
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ MAY
in the presence of:-
Witness Signature;
Name:
Address:
Occupation:
SIGNED AS A DEED by
▇▇▇▇▇▇ ▇▇▇▇▇▇
in the presence of:-
Witness Signature;
Name:
Address:
Occupation:
SIGNED AS A DEED by
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
in the presence of:-
Witness Signature;
Name:
Address:
Occupation:
SIGNED AS A DEED by
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
in the presence of:-
Witness Signature;
Name:
Address:
Occupation:
SIGNED AS A DEED by
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
in the presence of:-
Witness Signature;
Name:
Address:
Occupation:
SIGNED AS A DEED by
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
in the presence of:-
Witness Signature;
Name:
Address:
Occupation:
SIGNED AS A DEED by
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
in the presence of:-
Witness Signature;
Name:
Address:
Occupation:
SIGNED AS A DEED by
▇▇▇ ▇▇▇▇▇▇▇
in the presence of:-
Witness Signature;
Name:
Address:
Occupation:
SIGNED AS A DEED by
HANSA UMRADIA
in the presence of:-
Witness Signature;
Name:
Address:
Occupation:
EXECUTED AS A DEED by
AIB NOMINEES (JERSEY) LIMITED
acting by
Director:
Director/Secretary:
EXECUTED AS A DEED by
AVROCET TRAINING COMPANY LIMITED
acting by
Director:
Director/Secretary:
EXECUTED AS A DEED by
▇▇▇▇▇▇▇▇ LIMITED
C/▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
acting by
Director:
Director/Secretary:
EXECUTED AS A DEED by
ROYAL BANK OF SCOTLAND
TRUST COMPANY (IOM) LIMITED
acting by
Director:
Director/Secretary:
EXECUTED AS A DEED by
CONTINENTAL ASSETS & SECURITIES LIMITED
acting by
Director:
Director/Secretary:
EXECUTED AS A DEED by
GLENROSS INTERNATIONAL LIMITED
acting by
Director:
Director/Secretary:
EXECUTED AS A DEED by
VALMET ISLE OF MAN LIMITED
acting by
Director:
Director/Secretary:
EXECUTED AS A DEED by
DOLLAR FINANCIAL UK LIMITED
acting by
Director:
Director/Secretary:
EXECUTED AS A DEED by
DOLLAR FINANCIAL GROUP, INC.
acting by
Authorised signature:
Authorised signature