DATED 20 MARCH 2006
--------------------------------------------------------------------------------
PIR TRADING, INC. (1)
and
PIER 1 IMPORTS (U.S.), INC. (2)
and
PALLI LIMITED (3)
and
LAGERINN EHF (4)
---------------------------------------------------------------
AGREEMENT
for the sale and purchase of the entire issued share capital of
The Pier Retail Group Limited
---------------------------------------------------------------
HEATONS LLP
MANCHESTER
Tel: 0000 000 0000
Fax: 0000 000 0000
LAG3.1
CONTENTS
1 DEFINITIONS AND INTERPRETATION............................................1
2 SALE AND PURCHASE OF THE SHARES AND ASSIGNMENT OF
INTERCOMPANY DEBT.........................................................6
3 CONSIDERATION.............................................................7
4 COMPLETION................................................................7
5 2006 AUDITED ACCOUNTS....................................................10
6 WARRANTIES...............................................................10
7 LIMITATION OF DEBT SELLER'S LIABILITY AND SELLER'S LIABILITY.............12
8 PURCHASER'S AND PURCHASER'S GUARANTOR'S WARRANTIES AND
PURCHASER'S GUARANTEE....................................................16
9 RESTRICTIVE COVENANTS....................................................17
10 ANNOUNCEMENTS AND CONFIDENTIALITY........................................18
11 FURTHER ASSURANCE........................................................19
12 ASSIGNMENT...............................................................20
13 ENTIRE AGREEMENT.........................................................20
14 WAIVER, RIGHTS AND RELEASE...............................................20
15 VARIATION................................................................21
16 COSTS AND EXPENSES.......................................................21
17 SET OFF..................................................................21
18 NOTICES..................................................................21
19 COUNTERPARTS, LANGUAGE, INVALIDITY, COMPLETION...........................22
20 THIRD PARTY RIGHTS.......................................................22
21 GOVERNING LAW AND JURISDICTION...........................................23
SCHEDULES
1. The Group................................................................24
2. Properties...............................................................28
3. Registered Intellectual Property Rights..................................37
4. The Warranties...........................................................38
5. Completion Requirements..................................................49
AGREED FORM DOCUMENTS
1. Accounts (included in the Disclosure Letter)
2. 2006 Financial Statements
3. Co-existence Agreement
4. Deed of Assignment
5. Deed of Release
6. Debt Confirmation Deed
7. Index of Data Room Documents
8. Tax Deed
9. Director's resignation letter
10. Press Release
11. Cover page of bundle to the Disclosure Letter
THIS AGREEMENT is dated 2006
BETWEEN:
(1) PIR TRADING, INC. whose principal place of trading is at 000 Xxxx 0 Xxxxx,
Xxxx Xxxxx, Xxxxx 00000, Xxxxxx Xxxxxx of America (the "Seller");
(2) PIER 1 IMPORTS (U.S.), INC. whose principal place of trading is at 000 Xxxx
0 Xxxxx, Xxxx Xxxxx, Xxxxx 00000, Xxxxxx Xxxxxx of America (the "Debt
Seller");
(3) PALLI LIMITED (U.K. Id No.) whose registered office is at 0xx Xxxxx, 00-00
Xxx Xxxx Xxxxxx, Xxxxxx X0X 0XX (the "Purchaser"); and
(4) LAGERINN EHF (Icelandic, Id No.) whose registered office is situated at
Xxxxxxxxx 0, 000 Xxxxxxxxx, Xxxxxxx (the "Purchaser's Guarantor").
BACKGROUND
(A) The Company has an authorised share capital of(pound)8,731,111 made up of
611,111 ordinary shares of(pound)1 each and 8,120,000 preference shares
of(pound)1 each, all of which are issued and fully paid or credited as
fully paid (the "Shares").
(B) Further particulars of the Company and its Subsidiaries at the date of this
Agreement are set out in Schedule 1.
(C) The Seller has agreed to sell the Shares to the Purchaser and the Purchaser
has agreed to purchase the Shares on the terms of this Agreement.
(D) The Debt Seller has agreed to sell the Intercompany Debt to the Purchaser
and the Purchaser has agreed to purchase the Intercompany Debt on the terms
of this Agreement.
(E) The Purchaser's Guarantor is willing to guarantee the obligations of the
Purchaser under this Agreement and the other Transaction Documents.
IT IS AGREED AS FOLLOWS:
1 DEFINITIONS AND INTERPRETATION
1.1 In this Agreement the following words and expressions shall have the
following meaning:
"2006 Audited Accounts" has the meaning set out in clause 5.2;
"2006 Financial Statements" means the draft financial statements of
the Company as at 25 February 2006 in the
Agreed Form;
"Accounts" the audited consolidated balance sheet of
the Group as at the Accounts Date and the
audited consolidated profit and loss account
for the year ended on that date for the
Group including the notes and directors'
report relating to them, a copy of which is
included in the
Disclosure Documents;
"Accounts Date" 26.02.05;
"Accounting Standards" statements of standard accounting practice
(including financial reporting standards)
adopted or issued by the ASB;
"Agreement" this Agreement including its recitals and the
schedules but not the Tax Deed;
"Agreed Form" agreed and initialled by, or on behalf of,
the Seller and the Purchaser;
"ASB" The Accounting Standards Board;
"Auditors" Ernst & Xxxxx XXX, Xxxx Xxxxx, Xxxxxxx,
Xxxxxxxxx XX0 0XX;
"Business Day" any day except a Saturday or Sunday on which
banks are generally open in London, New York
and Fort Worth for normal business;
"Co-existence Agreement" the agreement of the same date as this
Agreement concerning brand co-existence in
the Agreed Form;
"Company" The Pier Retail Group Limited a company
incorporated and registered in England and
Wales with company number 2650000 whose
registered office is at 9-12 North Central
000 Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx,
XX00 0XX;
"Completion" completion of the sale and purchase of the
Shares and assignment of the Intercompany
Debt pursuant to this Agreement;
"Completion Date" the date of this Agreement;
"Concession Properties" means those properties the subject of
concession agreements as briefly described
in Part 2 of Schedule 2;
"Data Room Documents" the documents and information made available
to the Purchaser and/or its advisers in the
data room provided by IntraLinks prior to the
signing of this Agreement as referred to in
the data room index in the Agreed Form, which
is annexed to the Disclosure Letter;
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"Debt Confirmation Deed" the debt confirmation deed in the Agreed Form
between the Debt Seller and certain of the
Group Companies;
"Deed of Assignment" the deed of assignment in relation to the
Intercompany Debt, in the Agreed Form;
"Deed of Release" the deed of release between the Debt Seller
and certain of the Group Companies in the
Agreed Form;
"Directors" the directors named in Schedule 1;
"Disclosed" fairly disclosed to the Purchaser in any of
the Disclosure Documents;
"Disclosure Documents" the Disclosure Letter (including the two
identical bundles of documents collated by or
on behalf of the Seller, the outside covers
of each of which have been signed for
identification by or on behalf of the Seller
and the Purchaser) and the Data Room
Documents;
"Disclosure Letter" the letter of the same date as this Agreement
from the Seller to the Purchaser;
"Encumbrance" any (other than by virtue of this Agreement)
right to acquire, option, right of
pre-emption, mortgage, charge, pledge, lien,
or other form of security or encumbrance or
security agreement and any agreement to
create any of the foregoing;
"GAAP" generally accepted accounting principles and
practices in the United Kingdom including all
Accounting Standards, Financial Reporting
Standards and abstracts of the Urgent Issues
Task Force of the ASB;
"Group" together the Company and the Subsidiaries and
"Group Company" shall be a reference to the
Company or any of the Subsidiaries as the
case may be;
"Indebtedness" in relation to the Group, all borrowings and
indebtedness in the nature of debt but
excluding trade creditors arising in the
ordinary course of business and off balance
sheet finance arrangements, lease purchase
arrangement, contract hire and/or hire
purchase arrangements;
"Intellectual Property has the meaning given in paragraph 21 of
Rights" Part 1 of Schedule 4;
"Intercompany Debt" the amount stipulated in the Deed of
Assignment owing by the Company to the Debt
Seller immediately prior to Completion being
the aggregate amount of all
3
Indebtedness of whatever nature owing by the
Group Companies to the Debt Seller,
immediately prior to Completion;
"Intercompany Debt the Provisional Intercompany Debt
Consideration" Consideration after adjustment (if any)
pursuant to clause 5;
"Pension Schemes" agreements for the payment of any pensions,
allowances, lump sums or other like benefits
on retirement for the benefit of any present
or former director, officer or employee of
the Group or for the benefit of the
dependents of any such persons;
"Prohibited Area" the United Kingdom;
"Properties" has the meaning given in paragraph 13 of
Part 1 of Schedule 4;
"Provisional Cash the sum of (pound)8,540,196 payable in cash
Consideration" on Completion pursuant to clause 3;
"Provisional Intercompany GBP 8,540,195;
Debt Consideration"
"Purchaser's Group" the Purchaser, all its subsidiary
undertakings and parent undertakings and all
the other subsidiary undertakings of each of
its parent undertakings (other than the Group
Companies) at the relevant time;
"Purchaser's Solicitors" Heatons LLP of Freetrade Exchange, 00 Xxxxx
Xxxxxx, Xxxxxxxxxx, X0 0XX;
"Seller's Group" Pier 1 Imports, Inc. and all its subsidiary
undertakings (other than the Group Companies)
at the relevant time;
"Seller's Solicitors" Xxxxx & Xxxxx LLP of Xxx Xxx Xxxxxx, Xxxxxx,
XX0X 0XX;
"Subsidiary" a subsidiary of the Company details of which
are set out in Part 2 of Schedule 1 and
"Subsidiaries" shall be construed
accordingly;
"Tax" (a) all forms of taxation and statutory,
governmental, state, federal, provincial,
local government or municipal charges,
duties, imposts, contributions, levies,
withholdings or liabilities in each case
having the character of taxation wherever
chargeable and whether of the UK or any other
jurisdiction; and (b) any penalty, fine,
surcharge, interest, charges or costs payable
in connection with any taxation within (a)
above;
4
"Tax Authority" HM Revenue & Customs, Department of Social
Security and any other governmental or other
authority whatsoever competent to impose any
Tax whether in the United Kingdom or
elsewhere;
"Tax Deed" the deed of the same date as this Agreement,
containing certain taxation covenants given
by the Seller in the Agreed Form;
"Tax Statute" any directive, statute, enactment, law or
regulation, wheresoever enacted or issued,
coming into force or entered into providing
for or imposing any Tax (and shall include
orders, regulations, instruments, bye-laws or
other subordinate legislation made under the
relevant statute or statutory provision, and
any directive, statute, enactment, law,
order, regulation or provision which amends,
extends, consolidates or replaces the same or
which has been amended, extended,
consolidated or replaced by the same) except
to the extent that any such directive,
statute, enactment, law, regulation, order,
instrument, bye-law, subordinate legislation
or provision made or enacted after the date
of this Agreement would create or increase
any liability of the Seller under this
Agreement or the Tax Deed;
"Tax Warranties" the Warranties set out in Part 2 of
Schedule 4;
"Transaction Documents" this Agreement, the Tax Deed, the Deed of
Assignment, and the Co-existence Agreement;
"UK Companies" together The Pier Retail Group Limited, The
Pier (Retail) Limited and Pier Direct Limited
(and "UK Company" shall be a reference to any
of them as the case may be);
"Warranties" the warranties set out in clause 6.1 and
Schedule 4;
"Warranty Claim" a claim by the Purchaser the basis of which
is that a Warranty is, or is alleged to be,
untrue or inaccurate;
"Working Capital Reference GBP 4,689,000.
Amount"
1.2 The terms "holding company" and "subsidiary" shall have the meaning given
to them in sections 736 and 736A of the CA 85.
1.3 The following references shall have the following meanings: "CA 85" means
the Companies Xxx 0000; "CAA" means the Capital Allowances Act 2001;"FSMA
2000" means the Financial Services and Markets Xxx 0000; "LPA" means Law of
Property (Miscellaneous Provisions) Xxx 0000; "TA 88" means Income and
Corporation Taxes
5
Xxx 0000; "TCGA" means Taxation of Chargeable Gains Xxx 0000; "TMA" means
Taxes Management Xxx 0000; "VAT" means Value Added Tax; "VATA" means Value
Added Tax Xxx 0000.
1.4 "Control" in relation to a body corporate, means the power of a person to
secure that the affairs of the body corporate are conducted in accordance
with the wishes of that person (a) by means of the holding of shares, or
the possession of voting power, in or in relation to that or any other body
corporate or (b) by virtue of any powers conferred by the constitutional or
corporate documents, or any other document, regulating that or any other
body corporate. A "Change of Control" occurs if a person who Controls any
body corporate ceases to do so or if another person acquires Control of it.
1.5 The table of contents and headings in this Agreement are inserted for
convenience only and shall not affect its construction.
1.6 Expressions in the singular shall include the plural and references to any
gender shall include all other genders.
1.7 References to persons shall include bodies corporate, unincorporated
associations and partnerships.
1.8 References to the word "include" or "including" are to be construed without
limitation.
1.9 Except where the context otherwise requires, references to recitals,
schedules and clauses are to recitals and schedules to and clauses of this
Agreement. Except where the context otherwise requires, references within a
schedule to paragraphs are to paragraphs of that schedule.
1.10 References in this Agreement to any statute, statutory provision, EC
Directive or treaty include a reference to that statute, statutory
provision, EC Directive or treaty as amended, extended, consolidated or
replaced from time to time (whether before or after the date of this
Agreement) (and includes any subordinate legislation made under the
relevant statute, statutory provision, EC Directive or treaty) except to
the extent that any statute, statutory provision, EC Directive, treaty or
subordinate legislation made, enacted, amended, extended, consolidated or
replaced after the date of this Agreement would create or increase any
liability of the Seller or the Debt Seller under this Agreement or the Tax
Deed.
1.11 Any reference to writing or written includes faxes and any non-transitory
form of visible reproduction or words (but not e-mail).
2 SALE AND PURCHASE OF THE SHARES AND ASSIGNMENT OF INTERCOMPANY DEBT
2.1 The Seller shall sell the Shares and the Purchaser shall purchase the
Shares from the Seller with all rights attaching to them at the date of
this Agreement.
2.2 The Shares are sold to the Purchaser with full title guarantee as defined
in the LPA.
2.3 Title to and beneficial ownership of the Shares shall pass to the Purchaser
on Completion. The Purchaser shall be entitled to receive all dividends and
distributions declared, paid or made by the Company on or after the date of
this Agreement.
6
2.4 The Purchaser shall not be obliged to complete the purchase of any of the
Shares unless the purchase of all of the Shares is completed
simultaneously.
2.5 The Seller waives any rights of pre-emption or other restrictions on
transfer in respect of the Shares or any of them conferred on it under the
articles of association of the Company or otherwise.
2.6 The Debt Seller shall assign to the Purchaser the benefit of the
Intercompany Debt and the Purchaser shall accept the assignment of the
Intercompany Debt at Completion pursuant to the Deed of Assignment.
2.7 Without prejudice to the rights of any member of the Seller's Group under
any of the Transaction Documents, the Deed of Release and/or the Debt
Confirmation Deed, the Seller on behalf of itself and each other member of
the Seller's Group waives all and any claims against each Group Company
which any member of the Seller's Group may have of whatsoever nature and
which arose prior to the date of this Agreement.
3 CONSIDERATION
3.1 The consideration for the Shares shall be the sum of(pound)1 to be paid to
the Seller in cash on Completion.
3.2 The consideration for the assignment of the Intercompany Debt shall be the
Intercompany Debt Consideration of which the Provisional Intercompany Debt
Consideration shall be paid by the Purchaser to the Debt Seller in
accordance with clause 3.3.1.
3.3 The Intercompany Debt Consideration shall be paid by the Purchaser to the
Debt Seller as follows:
3.3.1 (pound)8,540,195, being the Provisional Intercompany Debt
Consideration, shall be paid in cash on Completion; and
3.3.2 that amount shall be subject to adjustment in accordance with
clause 5.
4 COMPLETION
4.1 Completion shall take place at the Seller's Solicitors' offices immediately
after the execution and exchange on the Completion Date.
4.2 At Completion:
4.2.1 the Seller shall comply with and perform all of its obligations
listed in Schedule 5;
4.2.2 the Purchaser shall:-
4.2.2.1 pay the Provisional Cash Consideration by way of electronic
transfer to the Seller's Solicitors who are irrevocably
authorised to receive the same and whose receipt shall be
an effective discharge of the Purchaser's obligation to pay
such sum and the Purchaser shall not be concerned to see to
the application or be answerable for the loss or
misapplication of such sum;
7
4.2.2.2 deliver to the Seller a copy of the minutes of a meeting
of the directors of the Purchaser authorising the execution
by the Purchaser of this Agreement, the Tax Deed, the Deed
of Assignment and the Co-existence Agreement and a copy of
the minutes of the meeting of the directors of the
Purchaser's Guarantor authorising the execution by the
Purchaser's Guarantor of this Agreement;
4.2.2.3 deliver to the Seller a counterpart of the Tax Deed duly
executed as a deed by the Purchaser;
4.2.2.4 deliver to the Seller a counterpart of the Deed of
Assignment duly executed by the Purchaser;
4.2.2.5 deliver to the Seller a counterpart of the Co-existence
Agreement duly executed by the Purchaser; and
4.2.2.6 deliver to the Seller a counterpart of the Disclosure
Letter duly executed by the Purchaser.
4.3 If on Completion the Seller or the Purchaser fails to comply with any of
its obligations under clause 4.2.1 or 4.2.2 (as applicable) then the other
shall not be obliged to complete this Agreement and may at its absolute
discretion:-
4.3.1 defer Completion to a date not more than 28 days after the
Completion Date in which case this clause 4.3 shall apply to
Completion as so deferred;
4.3.2 proceed to Completion so far as practicable and without prejudice to
its rights under the Agreement; or
4.3.3 waive all or any of the defaulting party's obligations under
clause 4.2.1 or 4.2.2 (as applicable).
4.4 The Seller shall procure that on Completion each Group Company is released
from all guarantees and indemnities given by that Group Company prior to
the date of this Agreement in respect of any liability or obligation of any
member of the Seller's Group and pending such release the Seller shall
indemnify that Group Company against all liabilities under the guarantees
and indemnities.
4.5 The Purchaser shall procure that as from Completion each member of the
Seller's Group is released from all guarantees and indemnities which have
been given by that member prior to the date of this Agreement in respect of
any liability or obligation of any Group Company, and pending such release
the Purchaser shall indemnify that member of the Seller's Group against all
liabilities under those guarantees and indemnities.
4.6 Immediately following Completion the Seller shall, without delay send to
the Purchaser, all records, correspondence, documents, files, memoranda and
other papers owned by any Group Company which are in the Seller's
possession or direct control relating to the Group or operations of the
Group which are not kept at any of the Properties, provided that the Seller
shall be entitled to retain copies of any records, documentation and
information which the Seller would be entitled to request in accordance
with the provisions of Clause 11.2.
8
4.7 Within 10 days following Completion, the Seller will pay to the Purchaser:
4.7.1 the amount of any payments due to be paid (before any deductions) to
Xxxxxx Xxxxxxxx, Xxxx Xxxxxxx, Xxxxx Xxxxxxxx and Xxxxx Xxxxxx
(together, the "Bonus Employees") (being employees within the Group)
by the Seller within 30 days of Completion in accordance with the
bonus letter agreements between the Seller and each of the Bonus
Employees dated 13 March 2006 and referred to in the Disclosure
Letter (the "Payments"); and
4.7.2 the amount of secondary Class I National Insurance contributions for
which the relevant Group Company employing each Bonus Employee will
be liable as a result of the Payments (the "Secondary NICs").
4.8 The Purchaser:
4.8.1 within 10 days following receipt of payment from the Seller under
clause 4.7, will discharge the Seller's liability to the Bonus
Employees in respect of the Payments, as agent of the Seller; and
4.8.2 will procure the payment to the relevant tax authority within the
required time period for the Payments (in the case of the amounts
referred to in sub-clause 4.8.2.1 as agent of the Seller), of the
amount of:
4.8.2.1 any income tax to be deducted under the PAYE system (and
the amount of any primary Class 1 National Insurance
contributions payable) in respect of the Payments; and
4.8.2.2 the Secondary NICs.
4.9 For the avoidance of doubt, the Seller will have no further liability under
this Agreement and/or the Tax Deed or otherwise for any income tax to be
deducted under the PAYE system, primary Class 1 National Insurance
contributions or secondary Class 1 National Insurance contributions due in
respect of the Payments.
4.10 The Seller agrees to indemnify the Purchaser (for itself and as trustee for
each Group Company) from and against any liability, claim, loss or cost
(reasonably and properly incurred) arising out of the exercise of any
options granted by Pier 1 Imports, Inc. prior to the date of this Agreement
to any employee of any of the Group Companies over any shares in Pier 1
Imports, Inc. provided that:
4.10.1 the Purchaser shall (and shall procure that the Group Companies) use
their reasonable endeavours following the exercise of any such
options to mitigate any such liability, claim, loss or cost;
4.10.2 this indemnity shall not apply to the extent of any income tax under
the PAYE system and primary Class I National Insurance contributions
in respect of the exercise of any such option; and
4.10.3 no liability shall attach to the Seller under this clause 4.10 to
the extent that the same loss has been recovered under any other
provision of this Agreement or the Tax Deed (or vice versa) and
accordingly, the Purchaser shall only recover once in respect of the
same loss.
9
5 2006 AUDITED ACCOUNTS
5.1 As soon possible after Completion, the Purchaser shall procure that:
5.1.1 the Company instructs the Auditors to undertake the audit of the
2006 Financial Statements applying the specific accounting
principles, policies and practices applied in the preparation of the
Accounts on a basis consistent with the audit of the Accounts; and
5.1.2 following completion of the audit, the board of directors of the
Company shall approve the resulting accounts as the statutory
accounts of the Company as at 25 February 2006 and that any two
directors of the Company sign such accounts.
5.2 The accounts of the Company prepared and signed in accordance with clause
5.1 shall, once the Auditors have signed their audit report on such
accounts, be the "2006 Audited Accounts" and the amount set out in the
consolidated balance sheet included in those accounts as Net Current Assets
as at 25 February 2006 shall be the "Working Capital Amount".
5.3 The Purchaser shall send a copy of the 2006 Audited Accounts to the Seller
within five Business Days of the audit report on those accounts being
signed in accordance with clause 5.2.
5.4 If the Working Capital Amount is greater than the Working Capital Reference
Amount, the Purchaser shall pay an amount equal to that excess to the Debt
Seller as an adjustment to the Provisional Intercompany Debt Consideration.
If the Working Capital Amount is less than the Working Capital Reference
Amount, the Debt Seller shall repay an amount equal to that shortfall to
the Purchaser as an adjustment to the Provisional Intercompany Debt
Consideration.
5.5 Any amount payable by the Debt Seller or the Purchaser (as applicable) in
accordance with the provisions of clause 5.4 shall (a) in the case of any
amount to be paid by the Purchaser, be paid within 10 Business Days after
the date on which the audit report on the 2006 Audited Accounts is signed,
and (b) in the case of any amount to be repaid by the Debt Seller, be paid
within 10 Business Days following receipt by the Debt Seller of a copy of
the 2006 Audited Accounts from the Purchaser.
5.6 In the case of any amount payable in accordance with the provisions of
clause 5.5, any payment shall be made by the relevant party to the other
party's solicitors (being, the Purchaser's Solicitors or the Seller's
Solicitors, as applicable) who are irrevocably authorised to receive the
same and whose receipt shall be an effective discharge of (as applicable)
the Debt Seller's or the Purchaser's obligation to pay such amount. Any
such amount shall be paid by electronic transfer in immediately available
funds.
6 WARRANTIES
6.1 The Seller warrants to the Purchaser that except as Disclosed each of the
statements set out in Schedule 4 is true and accurate. The Purchaser has
entered into this Agreement and the Deed of Assignment upon the basis of
and in reliance upon the Warranties.
6.2 Without prejudice to Clause 13.3 the Purchaser acknowledges and agrees
that:
10
6.2.1 the Warranties are the only representations, warranties or other
assurances of any kind given by or on behalf of the Seller and on
which the Purchaser may rely in entering into this Agreement;
6.2.2 no other statement, promise or forecast made by or on behalf of the
Seller may form the basis of, or be pleaded in connection with, any
claim by the Purchaser under or in connection with this Agreement;
and
6.2.3 it does not have at the date of this Agreement actual knowledge of
any fact which is inconsistent with any of the Warranties or makes
any of them untrue or inaccurate.
6.3 Clause 6.1 shall apply as if:
6.3.1 none of the Warranties, other than those set out in sub-paragraphs
3.5, 8.1 and paragraphs 13 and 15 of Schedule 4, relate in any way
to the Properties or any of them;
6.3.2 none of the Warranties, other those that set out in sub-paragraphs
3.5 and 8.1, paragraph 15 and the Tax Warranties set out in Part 2
of Schedule 4, relate in any way to Tax; and
6.3.3 none of the Warranties, other than those set out in sub-paragraphs
3.5, 8.1 and paragraph 21 of Schedule 4, relate in any way to any
Intellectual Property Right or any agreement or other arrangement in
connection with any Intellectual Property Right.
6.4 Where any of the Warranties is made or given "so far as the Seller is
aware" or "to the best of the Seller's knowledge, information or belief" or
any similar expression, such Warranty shall be construed to refer to the
actual knowledge of the Seller after making careful enquiry of Xxxxxx
Xxxxxxxx and Xxxx Xxxxxxx and no other person.
6.5 The Seller agrees, in the absence of fraud, dishonesty or wilful
concealment by or on behalf any Group Company or any of its employees or
directors, to waive any and all rights or claims which it might otherwise
have in respect of any misrepresentation, inaccuracy or omission in or from
any information or advice supplied by any Group Company or its officers,
employees or agents in connection with the giving of Warranties, the Tax
Deed and/or the preparation of the Disclosure Letter and the Data Room
Documents.
6.6 Each of the Warranties shall be separate and independent and save as
expressly otherwise provided shall not be limited by reference to any other
Warranty or by anything in this Agreement or the Tax Deed.
6.7 The rights of the Purchaser in respect of a breach of any of the Warranties
shall not be affected by Completion.
6.8 Notwithstanding any of the other provisions of this Agreement the
Warranties and any Warranty Claim shall be subject to the limitations and
other provisions set out in clause 7.
6.9 Any payment made by the Seller in satisfaction of a Warranty Claim or in
satisfaction of a claim by the Purchaser under the Tax Deed shall be deemed
to be a reduction in the
11
Intercompany Debt Consideration.
7 LIMITATION OF DEBT SELLER'S LIABILITY AND SELLER'S LIABILITY
7.1 Notwithstanding any of the other provisions of this Agreement or the Tax
Deed, the liability of the Seller in respect of claims under the Warranties
or a claim under the Tax Deed shall be limited according to the provisions
of this clause.
7.2 If the Purchaser or any Group Company becomes aware of a matter or
circumstance which is likely to give rise to a Warranty Claim, the
Purchaser shall give notice to the Seller specifying that matter or
circumstance in reasonable detail (including, without limitation, the
Purchaser's estimate, on a without prejudice basis, of the amount of such
claim) as soon as reasonably practicable after it or the relevant Group
Company (as the case may be) becomes aware of that matter or circumstance.
The Seller shall not be liable for any losses in respect of a Warranty
Claim to the extent that they are increased, or are not reduced, as a
result of any failure by the Purchaser to give notice as contemplated by
this paragraph.
7.3 The Seller shall not be liable under the Warranties to the extent that:
7.3.1 the facts which might result in a Warranty Claim or possible
Warranty Claim were Disclosed;
7.3.2 the subject of the Warranty Claim is allowed or provided for or
reserved or otherwise taken into account in the Accounts or the 2006
Audited Accounts or has been included in calculating creditors or
deducted in calculating debtors in the Accounts or the 2006 Audited
Accounts or to the extent such matter was specifically referred to
in the notes to the Accounts or the 2006 Audited Balance Sheet;
7.3.3 the loss has been recovered under the Tax Deed; or
7.3.4 a Warranty Claim arises or is increased:
7.3.4.1 wholly or partly from a voluntary act or omission of any
member of the Purchaser's Group after Completion which (a)
is not in the ordinary course of business, (b) could
reasonably have been avoided, and (c) which the Purchaser
or any Group Company was aware would be likely to give
rise to a Warranty Claim; or
7.3.4.2 wholly or partly from an act or omission compelled by
law; or
7.3.4.3 as a result of any increase in rates of Tax since the
Completion Date; or
7.3.4.4 wholly or partly as a result of the passing or coming
into force of or any change in any enactment, law,
regulation, directive or requirement or any practice of any
government, government department or agency or regulatory
body (including extra-statutory concessions of HM Revenue &
Customs) after the Completion Date whether or not having
retrospective effect; or
12
7.3.4.5 wholly or partly from any change after Completion of the
date to which any Group Company makes up its accounts or in
the bases, methods, principles or policies of accounting of
any Group Company; or
7.3.4.6 wholly or partly from any failure or omission by any
Group Company to make any valid claim, election, surrender
or disclaimer, to give any valid notice or consent or to do
any other thing under the provisions of any enactment or
regulation relating to Tax after Completion, the making,
giving or doing of which was taken into account in
computing the provisions for Tax in the Accounts or in the
2006 Audited Accounts; or
7.3.4.7 any claim, election, surrender or disclaimer made or
notice or consent given after Completion by any Group
Company or any member of the Purchaser's Group under the
provisions of any enactment or regulation relating to Tax
other than any claim, election, surrender, disclaimer,
notice or consent assumed to have been made, given or done
in computing the amount of any allowance, provision or
reserve in the Accounts or the 2006 Audited Accounts or
which is made at the prior request of the Seller pursuant
to its rights under the Tax Deed; or
7.3.4.8 wholly or partly from a cessation, or any change in the
nature or conduct, of any trade carried on by any Group
Company at Completion, being a cessation or change
occurring on or after Completion.
7.4 The Seller shall not be liable in respect of any Warranty Claim or claim
under the Tax Deed unless the amount of damages or payment to which the
Purchaser would, but for this subparagraph, be entitled as a result of the
Warranty Claim or such claim is at least(pound)2,000.
7.5 If more than one Warranty Claim or claim under the Tax Deed arises from, or
is caused by, the same or substantially the same matter, matters,
circumstance or circumstances, those Warranty Claims or claims shall be
aggregated for the purposes of subparagraph 7.4.
7.6 The liability of the Seller in respect of any Warranty Claim or a claim
under the Tax Deed shall not arise unless the amount of the Seller's
liability in respect of such Warranty Claim or a claim under the Tax Deed
when aggregated with the amount of the Seller's liability in respect of any
other such Warranty Claim and/or a claim under the Tax Deed made against
the Seller exceeds (pound)200,000 in which event the whole amount of the
Seller's liability in respect of such Warranty Claim(s) or claim(s) under
the Tax Deed (and not just the excess) shall be recoverable subject to the
other terms of this Agreement and/or the Tax Deed.
7.7 The liability of the Seller in respect of all Warranty Claims and claims
under the Tax Deed shall not when taken together exceed (pound)4,000,000.
7.8 The liability of the Seller in respect of any Warranty Claim other than
under the Tax Warranties shall cease six months after Completion and the
liability of the Seller in respect of any claim under the Tax Warranties or
any claim under the Tax Deed shall
13
cease on the sixth anniversary of Completion except in respect of any
Warranty Claim of which notice is given to the Seller as contemplated by
clause 7.2 or in respect of a claim under the Tax Deed of which notice is
given to the Seller as contemplated by clause 8.1 of the Tax Deed (in each
case before the relevant date). The liability of the Seller in respect of
any Warranty Claim shall terminate if proceedings in respect of it have not
been commenced within six months after the giving of notice of that
Warranty Claim as contemplated by clause 7.2 unless that Warranty Claim
arises as a result of, or in connection with, a Third Party Claim (as
defined in clause 7.10) and the Seller shall have assumed conduct of that
Third Party Claim in accordance with clause 7.10. The liability of the
Seller in respect of any claim under the Tax Deed shall terminate if
proceedings in respect of it have not been commenced within six months
after the giving of notice of that claim as contemplated by clause 8.1 of
the Tax Deed unless the Seller shall have assumed conduct of the claim as
contemplated by clause 8.3 of the Tax Deed.
7.9 Nothing in clauses 7.4 to 7.8 (inclusive), applies to a Warranty Claim that
arises as a result of fraud by the Seller (which has been judicially
determined) in respect of the negotiation and preparation of this
Agreement, the Tax Deed, the Deed of Assignment, the Disclosure Letter
and/or the Data Room Documents.
7.10 If a Warranty Claim arises as a result of, or in connection with, a
liability or alleged liability of a Group Company to a third party (a
"Third Party Claim"), then (without prejudice to the provisions of the Tax
Deed in relation to any matter which is the subject of a claim under it)
the Seller may, at any time before any final compromise or agreement, or
expert determination or non-appealable decision of a court or tribunal of
competent jurisdiction, is made in respect of the Third Party Claim or the
Third Party Claim is otherwise disposed of, give notice to the Purchaser
that it elects to assume the conduct of any dispute, compromise, defence or
appeal of the Third Party Claim and of any incidental negotiations on the
following terms:
7.10.1 the Seller shall indemnify the Purchaser and each relevant Group
Company to the Purchaser's reasonable satisfaction against all
liabilities, charges, costs and expenses which they may incur in
taking any such action as the Seller may request pursuant to
subparagraphs 7.10.2 and 7.10.3 below;
7.10.2 the Purchaser shall procure that each relevant Group Company at the
cost of the Seller makes available to the Seller on reasonable
notice and at reasonable times such persons and all such information
as the Seller may reasonably request for assessing, contesting,
disputing, defending, appealing or compromising the Third Party
Claim;
7.10.3 the Purchaser shall procure that each relevant Group Company takes
such action to assess, contest, dispute, defend, appeal or
compromise the Third Party Claim as the Seller may request and does
not make any admission of liability, agreement, settlement or
compromise in relation to the Third Party Claim without the prior
written approval of the Seller save where to do so would materially
prejudice the commercial interests of the Purchaser's Group;
7.10.4 the Seller shall keep the Purchaser informed of the progress of the
Third Party Claim and provide the Purchaser with copies of all
material documents and such other information in its possession as
may be requested by the Purchaser (acting reasonably); and
14
7.10.5 the Purchaser will be free to pay or settle any Third Party Claims
on such terms as the Purchaser reasonably considers appropriate
(subject to the other provisions of this clause 7) in the event
that the Seller fails to comply in any material respect with the
provisions of clauses 7.10.1, 7.10.2 and 7.10.4.
7.11 If a Warranty Claim arises as a result of, or in connection with, a Third
Party Claim, the Purchaser shall, until the earlier of such time as the
Seller shall give any notice as contemplated by clause 7.10 and such time
as any final compromise or agreement, or expert determination or
non-appealable decision of a court or tribunal of competent jurisdiction,
is made in respect of the Third Party Claim or the Third Party Claim is
otherwise finally disposed of, keep, or procure that each relevant Group
Company keeps, the Seller promptly informed of the progress of the Third
Party Claim and provide, or procure that each relevant Group Company
provides, the Seller with copies of all relevant documents and such other
information in the Purchaser's or a Group Company's possession as may be
requested by the Seller.
7.12 Nothing in clauses 7.10 or 7.11 shall require the provision by any person
of any information to the extent such provision would contravene any
applicable law or regulation or would breach any duty of confidentiality
owed to any third party. If any information is provided by any person (the
"Provider") to any other person (the "Recipient") pursuant to either of
those clauses:
7.12.1 that information shall only be used by the Recipient in connection
with the Third Party Claim and clause 10 of this Agreement shall in
all other respects apply to that information; and
7.12.2 to the extent that information is privileged:
7.12.2.1 no privilege shall be waived by reason of or as a result
of its being provided to the Recipient; and
7.12.2.2 if a third party requests disclosure by the Recipient in
relation to that information, if the Recipient is the
Seller or the Purchaser, the Recipient shall or, if the
Recipient is a Group Company, the Purchaser shall procure
that the Recipient shall, promptly notify the Provider and,
to the extent it can do so, itself assert privilege in
opposition to that disclosure request.
7.13 Nothing in this Agreement shall be deemed to relieve the Purchaser from any
common law duty to mitigate any loss or damage incurred by it as a result
of any of the Warranties being untrue or inaccurate.
7.14 No liability shall attach to the Seller in respect of a Warranty Claim to
the extent that the same loss has been recovered by the Purchaser under any
other terms of this Agreement, the Tax Deed or any other document entered
into pursuant to this Agreement and accordingly the Purchaser may only
recover once in respect of the same loss.
7.15 If the matter or circumstance giving rise to a Warranty Claim is capable of
remedy, the Seller shall have no liability in respect of that Warranty
Claim if the relevant matter or circumstance is remedied within 30 days
after the date on which the Seller is given notice as contemplated by
clause 7.2 in relation to that matter or circumstance. The
15
Purchaser shall procure that the Seller is given the opportunity in that 30
day period to remedy the relevant matter or circumstance and shall, without
prejudice to clause 7.11, provide, and shall procure that each relevant
Group Company shall provide, all reasonable assistance to the Seller to
remedy the relevant matter or circumstance.
7.16 Without prejudice to the Purchaser's duty to mitigate any loss in respect
of any of the Warranties being untrue or inaccurate, if in respect of any
matter which would otherwise give rise to a Warranty Claim, any of the
Group Companies is entitled to claim under any policy of insurance the
Purchaser shall procure that it shall use its reasonable endeavours to
pursue such recovery right and the amount of any insurance monies received
by that Group Company shall reduce pro tanto or extinguish that Warranty
Claim provided always that the Purchaser shall be under no obligation to
recover from its insurers prior to recovery from the Seller in respect of
any such Warranty Claim.
7.17 If the Seller shall make any payment to the Purchaser in relation to any
Warranty Claim and the Purchaser (or any Group Company) subsequently
receives from a third party (other than a Group Company) any amount
referable to the subject matter of the Warranty Claim, the Purchaser shall,
once it or any Group Company has received such amount, repay (after
deducting the reasonable costs and expenses of the Purchaser or any Group
Company reasonably incurred in recovering such amount and any Tax payable
on it) to the Seller the lesser of:
7.17.1 a sum equal to such amount; and
7.17.2 the amount previously paid by the Seller to the Purchaser in respect
of such Warranty Claim.
7.18 The Debt Seller shall have no liability under the Warranties or the Tax
Deed.
8 PURCHASER'S AND PURCHASER'S GUARANTOR'S WARRANTIES AND PURCHASER'S
GUARANTEE
8.1 Each of the Purchaser and the Purchaser's Guarantor warrants to the Seller
and the Debt Seller that:
8.1.1 it has the power to execute and deliver this Agreement, and each of
the other Transaction Documents to which it is or will be a party,
and to perform its obligations under each of them and has taken all
performance action necessary to authorise such execution and
delivery and the of such obligations;
8.1.2 this Agreement constitutes, and each of the other Transaction
Documents to which it is or will be a party will, when executed,
constitute legal, valid and binding obligations of the Purchaser and
the Purchaser's Guarantor, as the case may be, in accordance with
its terms;
8.1.3 the execution and delivery by the Purchaser or the Purchaser's
Guarantor, as the case may be of this Agreement and of each of the
other Transaction Documents to which it is or will be a party and
the performance of the obligations of the Purchaser or the
Purchaser's Guarantor, as the case may be, under it and each of them
do not and will not conflict with or constitute a default under any
provision of:
16
8.1.3.1 any agreement or instrument to which the Purchaser or the
Purchaser's Guarantor is a party; or
8.1.3.2 the constitutional documents of the Purchaser or the
Purchaser's Guarantor; or
8.1.3.3 any law, lien, lease, order, judgment, award, injunction,
decree, ordinance or regulation or any other restriction of
any kind or character by which the Purchaser or the
Purchaser's Guarantor is bound.
8.2 The Purchaser's Guarantor as primary obligator unconditionally and
irrevocably guarantees by way of continuing guarantee to each of the Seller
and of the Debt Seller the payment and performance when due of amounts
payable by and obligations of the Purchaser under any of this Agreement and
the other Transaction Documents.
8.3 The Purchaser's Guarantor's obligation under this clause:
8.3.1 constitute direct, primary and unconditional obligations to pay on
demand by the Seller or the Debt Seller (as applicable) any sum
which the Purchaser is liable to pay under this Agreement or any of
the other Transaction Documents and to perform on demand any
obligations of the Purchaser under this Agreement or any of the
other Transaction Documents without requiring the Seller or the Debt
Seller (as applicable) first to take steps against the Purchaser or
any other person; and
8.3.2 shall not be affected by any matter or thing which but for this
provision might operate to affect or prejudice those obligations,
including without limitation:
8.3.2.1 any time or indulgence granted to, or composition with, the
Purchaser or any other person; or
8.3.2.2 the taking, variation, renewal or release of, or refusal or
neglect to perfect or enforce any right, remedy or security
against the Purchaser or any other person; or
8.3.2.3 any legal limitation, disability or other circumstance
relating to the Purchaser or any unenforceability or
invalidity of any obligation of the Purchaser under this
Agreement or any other Transaction Document.
9 RESTRICTIVE COVENANTS
9.1 As further consideration for the Purchaser agreeing to purchase the Shares
on the terms contained in this Agreement and with the intent of assuring to
the Purchaser the full benefit and value of the goodwill and connections of
the business of the Group, the Seller covenants with the Purchaser, that it
shall not, and shall procure that each member of the Seller's Group shall
not, without the prior written consent of the Purchaser:-
9.1.1 for 18 months after Completion, carry on, or be concerned or
interested in any way within the Prohibited Area in any retail
business which is in any
17
way in competition with the business of the Group as carried on at
the date of this Agreement; or
9.1.2 save in response to an unsolicited request from any such person or
in response to a bona fide recruitment advertisement, for 18 months
after Completion offer employment to or offer to conclude any
contract of services with an employee of a Group Company holding an
executive or managerial post or entice or endeavour to entice any
such employee toterminate his/her employment with a Group Company
provided always that this clause 9.1.2 shall only apply in relation
to persons who were employed by a Group Company at Completion and
who were still so employed immediately prior to the relevant breach
of this clause 9.1.2.
9.2 Each undertaking contained in this clause 9.1 shall be read and construed
independently of the other undertakings and shall be an entirely separate
and severable undertaking.
9.3 Clause 9.1 shall not prevent the Seller or any member of the Seller's Group
from holding for investment purposes only any units of an authorised unit
trust and/or up to 29.9% of any class of the issued share or loan capital
of any company traded on a recognised investment exchange (as defined in
the FSMA 2000).
9.4 The covenants in this clause apply to actions carried out by the Seller in
any capacity and whether directly or indirectly, or jointly with any other
person or corporate entity.
9.5 Nothing in this clause 9 shall prohibit the Seller or any other member of
the Seller's Group from (a) carrying on any business via its website at
xxx.xxxx0.xxx or any other website permitted under the Co-existence
Agreement (or otherwise responding to or satisfying any customer order not
solicited from within the United Kingdom) or (b) from acquiring within the
Prohibited Area any goods intended for use or sale in the business of any
member of the Seller's Group carried on from outside the Prohibited Area.
9.6 Whilst the undertakings in clause 9.1 are considered by the parties to be
reasonable in all the circumstances, if any one or more should for any
reason be held to be invalid but would have been held to be valid if part
of the wording was deleted, then the above undertakings shall apply with
the minimum modifications necessary to make them valid and effective.
9.7 Notwithstanding any of the other provisions of this clause 9, clause 9.1
shall cease to apply if there shall be a Change of Control of Pier 1
Imports, Inc. or if Pier 1 Imports, Inc. should be a party to any merger or
any form of business contribution.
10 ANNOUNCEMENTS AND CONFIDENTIALITY
10.1 Subject to clause 10.3 and except as required by law or by any legal or
regulatory authority, no announcements, circulars or other communications
concerning the transactions referred to in this Agreement or any ancillary
matter shall be made unless in a form agreed between the Seller and the
Purchaser.
10.2 Subject to clause 10.3 each party shall (without limit in time) keep and
procure the confidentiality of all information belonging to the other party
which it has obtained as a result of the negotiations leading to and the
entering into of this Agreement and shall
18
not directly or indirectly reveal, report, publish, disclose or transfer or
use information belonging to the other party for its own or any other
purposes.
10.3 The restrictions on announcements, circulars and other communications and
obligations of confidentiality in this clause 10 shall not apply where the
information is in the public domain other than as a result of a breach of
the obligations of confidentiality under this clause 10 or to the extent
that any disclosure of information:-
10.3.1 is expressly permitted by this Agreement or the Tax Deed or required
for the proper performance of this Agreement or the Tax Deed (or the
enforcement or defence of any claim under this Agreement or the Tax
Deed); or
10.3.2 is made with the prior consent in writing of the party to whose
affairs such information relates; or
10.3.3 is made:
10.3.3.1 in compliance with any requirement of law;
10.3.3.2 in compliance with a requirement (regardless of the
timing of that requirement) of the New York Stock Exchange
and/or the US Securities and Exchange Commission;
10.3.3.3 in a Form 8-K, 10-Q, 10-K, a proxy statement, or notice
of annual meeting of shareholders filed by Pier 1 Imports,
Inc. or a Schedule 13D or an amendment thereto filed by the
Purchaser's Guarantor or any of its shareholders or
affiliates to report or disclose the Completion of the
transactions contemplated by this Agreement pursuant to
applicable United States federal securities laws;
10.3.3.4 in compliance with any applicable regulatory authority
to which the party is subject; or
10.3.3.5 in order to obtain tax or other clearances or consents
from the HM Revenue & Customs or other relevant taxing or
regulatory authorities.
10.4 The restrictions contained in this clause 10 shall continue to apply after
Completion without limit in time.
10.5 Press releases of each of the Seller and the Purchaser in the Agreed Form
relating to the transaction which is the subject of this Agreement have
been agreed between the Seller and the Purchaser upon the execution and
exchange of this Agreement, for issue following Completion.
11 FURTHER ASSURANCE
11.1 Each of the Purchaser and the Seller will (at its own expense) promptly
execute and deliver all such documents, and do all such things, as the
other may from time to time
19
reasonably require for the purpose of giving full effect to the provisions
of this Agreement, the Tax Deed and the Deed of Assignment.
11.2 Notwithstanding any other provision of this Agreement, following Completion
the Purchaser shall provide as soon as practicable and shall procure that
each of the Group Companies provide as soon as practicable, copies of such
records, information and documentation relating to the administration,
business and/or operations of the Group Companies prior to Completion as
may reasonably be requested by the Seller or any other member of the
Seller's Group in connection with any matters relating to the operation or
administration of the Seller's Group including, but not limited to, tax,
accounting, legal, regulatory or any other matters. Furthermore, the
Purchaser undertakes to and to procure that each of the Group Companies
retain all such records, information and documentation and not to destroy
any of them without the prior consent of the Seller (such consent not to be
unreasonably withheld or delayed).
11.3 The Purchaser undertakes that it will procure that each Group Company will
not become insolvent, stop payment of or be unable to pay its debts within
the meaning of the Insolvency Xxx 0000 or otherwise cease to carry on
business as a going concern, for at least one year following the date of
the signing of the audit opinion in respect of the 2006 Audited Accounts
(as contemplated by clause 5.2).
12 ASSIGNMENT
No party, may assign the benefit of its rights under this Agreement, the
Tax Deed or the Deed of Assignment whether absolutely or by way of security
or deal in any way with any interest it has under this Agreement, the Tax
Deed or the Deed of Assignment without the prior written consent of the
Seller and the Purchaser.
13 ENTIRE AGREEMENT
13.1 This Agreement together with the Transaction Documents constitute the whole
and only agreement between the parties relating to the transactions
contemplated by the Transaction Documents and supersede and extinguish any
drafts, agreements, undertakings, representations, warranties and
arrangements of any nature whatsoever, made before the entering into of
this Agreement whether or not in writing, between any of the parties.
13.2 Each party acknowledges that in agreeing to enter into this Agreement and
the other Transaction Documents it has not relied on any representation,
warranty, collateral contract or other assurance (except those repeated in
this Agreement) made by or on behalf of any other party before the entering
into of this Agreement. Each party waives all rights and remedies which,
but for this subclause, might otherwise be available to it in respect of
any such representation, warranty, collateral contract or other assurance.
13.3 Nothing in this Agreement or in any other Transaction Document shall be
read or construed as excluding any liability or remedy as a result of
fraud.
14 WAIVER, RIGHTS AND RELEASE
14.1 Any waiver of any right, power or remedy under this Agreement or the Tax
Deed must
20
be in writing and will only apply to the person to whom the waiver is
addressed and for the circumstances for which it is given.
14.2 Subject to any express limitation in this Agreement or the Tax Deed, no
failure to exercise or delay in exercising any right or remedy provided
under this Agreement or the Tax Deed constitutes a waiver of such right or
remedy or will prevent any future exercise in whole or in part thereof.
14.3 Subject to any express limitation in this Agreement or the Tax Deed, no
single or partial exercise of any right or remedy under this Agreement or
the Tax Deed shall preclude or restrict the further exercise of any such
right or remedy.
15 VARIATION
No variation to this Agreement or the Tax Deed shall be of any effect
unless it is agreed in writing and signed by the Seller and the Purchaser.
16 COSTS AND EXPENSES
Save as otherwise stated in this Agreement or the Tax Deed, each party
shall pay its own costs and expenses in relation to the negotiation,
preparation, execution and carrying into effect of this Agreement and the
other Transaction Documents.
17 SET OFF
All payments to be made under this Agreement and/or the Tax Deed shall be
made in full without any set-off or counterclaim and free from any
deduction or withholding save as may be required by law.
18 NOTICES
18.1 All notices given under this Agreement or the Tax Deed shall, unless
expressly provided otherwise, be in writing. Notices shall either be
delivered by hand or sent by first class pre-paid post or by airmail (if
overseas) or sent by fax. Delivery by courier shall be regarded as delivery
by hand.
18.2 Notices shall be sent to the address or the fax number set out below and
shall be marked for the attention of the relevant person named in clause
18.4 below.
18.3 Any notice to be given under this Agreement or the Tax Deed shall be deemed
to have been properly given if it is given in accordance with this clause
18.
18.4 The addresses for service of notice are:-
Seller and/or the Debt Seller - address as set on page 1 of this Agreement,
fax number 000 000 000 0000. For the attention of the Group Counsel's
Office,
with a copy to Xxxxx & Xxxxx LLP, Xxx Xxx Xxxxxx Xxxxxx XX0X 0XX, fax
number: 0000 000 0000. For the attention of: Xxx Xxxxxxx.
Purchaser and/or the Purchaser's Guarantor - X/X Xxxxxxxx xxx, Xxxxxxxxx 0,
000 Xxxxxxxxx, fax number: x000-000-0000 . For the attention of Sigurour
Berntsson.
21
Or, in each case, at such other address or to such other fax number or
personnel as may be notified to the other parties in writing in accordance
with this clause.
18.5 A notice under this Agreement or the Tax Deed shall be deemed to have been
served:
18.5.1 if delivered by hand in accordance with this clause at the time of
delivery;
18.5.2 if sent by first class pre-paid post in accordance with this clause
two clear Business Days after the time of posting or, if sent by
airmail in accordance with this clause, five clear Business Days
after such time;
18.5.3 if sent by fax to the number referred to in clause 18.4, at the time
of completion of transmission by the sender.
If a notice is deemed delivered outside normal business hours (being 9.30am
to 5.30pm on a Business Day) under the preceding provisions of this clause
then it shall be deemed to have been delivered at 9.30am on the next
Business Day.
18.6 In proving service, it shall be sufficient to show that delivery by hand
was made or that the envelope containing the communication was properly
addressed and posted as a first class pre-paid letter (or, if overseas, by
airmail) or that the fax was despatched and a confirmatory report received,
in each case in accordance with this clause.
19 COUNTERPARTS, LANGUAGE, INVALIDITY, COMPLETION
19.1 This Agreement and the Tax Deed may be executed in any number of
counterparts and by any of the parties on different counterparts, but shall
not be effective until each party has executed at least one counterpart.
Each counterpart shall constitute an original of this Agreement (or the Tax
Deed, as the case may be) but all the counterparts shall together
constitute one and the same Agreement (or the Tax Deed as the case may be).
19.2 This Agreement is written in the English language, which shall prevail in
the event of any translation.
19.3 Each of the provisions of this Agreement and the Tax Deed is severable. If
any provision is or becomes illegal, invalid or unenforceable in any
respect under the law of any jurisdiction, the legality, validity or
enforceability in that jurisdiction of the remaining provisions of this
Agreement (or the Tax Deed, as the case may be) shall not in any way be
affected or impaired thereby.
19.4 This Agreement together with the other Transaction Documents shall, to the
extent that they remain to be performed, continue in full force and effect
notwithstanding Completion.
20 THIRD PARTY RIGHTS
The terms of each of this Agreement, the Tax Deed and the Deed of
Assignment may only be enforced by the parties to each such document and no
person who is not such a party may enforce any of the terms of that
document under the Contracts (Rights of Third Parties) Xxx 0000.
22
21 GOVERNING LAW AND JURISDICTION
21.1 This Agreement and the Tax Deed shall be governed by and construed in
accordance with English law.
21.2 This Agreement and the Tax Deed shall be subject to the exclusive
jurisdiction of the Courts of England and Wales.
AS WITNESS the hands of the parties or their duly authorised representatives on
the date first appearing at the head of this Agreement.
23
SCHEDULE 1
THE GROUP
PART 1
THE COMPANY
Place and Date of Incorporation: United Kingdom 30.09.1991
Registered Number: [U.K. Id No.]
Registered Address: 0-00 Xxxxx Xxxxxxx 000, Xxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxxxxx, XX00 0XX
Authorised Share Capital: (pound)8,731,111 divided into 611,111
ordinary shares and 8,120,000
preference shares, all of(pound)1 each
Issued Share Capital: (pound)8,731,111 divided into 611,111
ordinary shares and 8,120,000
preference shares, all of(pound)1 each
Directors: Xxxxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxx Xxxxxxxx
Xxxxxx Xxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxxx Xxxxxx IV
Secretary: Xxxx Xxxxxxx Xxxxxxx
Auditors: Ernst & Young LLP
Bankers: HSBC Bank plc
Accounting Reference Date: 26 February
24
PART 2
THE SUBSIDIARIES
The Pier (Retail) Limited
Place and Date of Incorporation: United Kingdom 13.09.1988
Registered Number: [U.K. Id No.]
Registered Address: 0-00 Xxxxx Xxxxxxx 000, Xxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxxxxx, XX00 0XX
Authorised Share Capital: (pound)400,000 divided into 400,000
ordinary shares of(pound)1 each
Issued Share Capital: (pound)200,000 divided into 200,000
ordinary shares of(pound)1 each
Directors: Xxxxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxx Xxxxxxxx
Xxxxxx Xxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxxx Xxxxxx IV
Xxxx Xxxxxxx Xxxxxxx
Secretary: Xxxx Xxxxxxx Xxxxxxx
Auditors: Ernst & Young LLP
Bankers: HSBC Bank plc
Accounting Reference Date: 26 February
25
PART 2
THE SUBSIDIARIES
Pier Direct Limited
Place and Date of Incorporation: United Kingdom 07.04.1992
Registered Number: [U.K. Id No.]
Registered Address: 0-00 Xxxxx Xxxxxxx 000, Xxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxxxxx, XX00 0XX
Authorised Share Capital: (pound)1,000 divided into 1,000 ordinary
shares of(pound)1 each
Issued Share Capital: (pound)2 divided into 2 ordinary shares
of(pound)1 each
Directors: Xxxxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxx Xxxxxxxx
Xxxxxx Xxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxxx Xxxxxx IV
Secretary: Xxxx Xxxxxxx Xxxxxxx
Auditors: N/A
Bankers: N/A
Accounting Reference Date: 01 March
26
PART 2
THE SUBSIDIARIES
The Pier (Retail) Ireland Limited
Place and Date of Incorporation: Republic of Ireland 04.11.2003
Registered Number: [Irish Id No.]
Registered Address: 0 Xxxxxxxxxxxxx Xxxxx, International
Financial Services Centre,
Xxxxxx 0, Xxxxxxx
Authorised Share Capital: (euro)1,000 divided into 1,000 ordinary
shares of(euro)1 each
Issued Share Capital: (euro)1,000 divided into 1,000 ordinary
shares of(euro)1 each
Directors: Xxxxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxx Xxxxxxxx
Xxxxxx Xxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxxx Xxxxxx IV
Secretary: Xxxx Xxxxxxx Xxxxxxx
Auditors: Ernst & Young LLP
Bankers: HSBC Bank plc
Accounting Reference Date: 26 February
27
SCHEDULE 2
PART 1
PROPERTIES
CURRENT BASE
RENT/RACK
RENT EXCLUDING
PAYMENTS IN
RESPECT OF
TURNOVER FOR
DATE OF THE CURRENT
CURRENT RENT TURNOVER
PROPERTY DATE OF LEASE MEMORANDA PERIOD PARTIES TERM
--------------------------- -------------------- -------------- ----------------- ---------------------- --------------------
1.Ground Floor and basement 23 April 1992 25 March 2002 (pound)349,500 Novoquote Ltd (1) 20 years (less 5
200 and 203 Tottenham The Pier (Retail) days) from 00
Xxxxx Xxxx, Limited (2) March 1992
Xxxxxx X0X 0XX
2.Unit C, Broadway Corner, Only Agreement for 24 June 2002 (pound)125,000 Parties to the
Xxxxxxx, Xxxx XX0 0XX lease provided with Agreement for Lease:
form of agreed lease (1) Scottish Mutual
attached. Assurance Plc
(2) The Pier (Retail)
Ltd (3) The Pier
Retail Group Ltd
(Surety) and dated 27
March 1997
3.Units S2 and S3 18 April 1997 1 August 2002 (pound)169,750 The Norwich Union Life 25 years from 1
The Bentall Centre Insurance Society August 0000
Xxxxxxxx xxxx Xxxxxx (1) The Pier (Retail)
XX0 0XX Limited (2) The Pier
Retail Group Limited
(3) (Surety)
4.Unit UG16 and Unit UG17 25 November 1997 1 March 2003 (pound)113,000 The Norwich Union Life 25 years from
together with Storage and Pensions Ltd 1 March 1993
Area B8 The Galleries, (1) The Pier (Retail)
Xxxxxxx XX0 0XX Ltd (2) The Pier
Retail Group Limited
(Surety)
28
CURRENT BASE
RENT/RACK
RENT EXCLUDING
PAYMENTS IN
RESPECT OF
TURNOVER FOR
DATE OF THE CURRENT
CURRENT RENT TURNOVER
PROPERTY DATE OF LEASE MEMORANDA PERIOD PARTIES TERM
--------------------------- -------------------- -------------- ----------------- ---------------------- --------------------
5.The premises intended to 24 August 1993 24 June 2003 (pound)118,000 Royal Life Insurance 24 June 1993 -
be known as Xxxx XX0 xx Ltd 28 September 2012
the lower and middle (1) The Pier (Retail)
levels of the Pavilions Ltd (2) The Pier
Shopping Centre, High St. Retail Group Ltd
Birmingham (Surety)
6.Ground Floor 91-95 and 4 October 1993 4 October 2003 (pound)332,500 Pearl Assurance PLC 20 years from 4
85-95 basement Kings Road, (1) The Pier (Retail) October 0000
Xxxxxxx, Xxxxxx XX0 Ltd (2) The Pier
Retail Group Ltd (3)
(Surety)
7.The Ground Floor of no.'s 7 April 1994 (pound)87,500 Hanningtons Ltd 20 years from 29
16 and 17 and parts of (1) The Pier (Retail) September 1993
the first and second Ltd (2)
floors of no.'s 16,17, (NB A referee's
17A, 18 and 00 Xxxxx Xx. award has just
Brighton, East Sussex increased the
rent to
(pound)130,000)
8.Unit Numbers MSU1 and 11 October 1995 25 December (pound)193,000 Record hold Ltd (1) 25 year from 25
MSU2 and stock unit No. 2005 The Pier (Retail) Ltd December 1993
MSU2 of the Queens Arcade (2) The Pier Retail
Cardiff Group Ltd (3)
(Surety)
9.6a Tunsgate Square, 11 September 1995 29 September (pound)90,000 Lynton Plc (1) The 20 years from
Guildford GU1 3QZ 2000 Pier (Retail) Ltd (2) 11 September 1995
10.Unit 218, Centre Court 14 August 1986 24 June 2000 (pound)92,095 The Standard Life 15 years from
Shopping Centre, Assurance Company (1) 24 June 1995
Wimbledon, London The Pier (Retail) Ltd
XX00 0XX (2)
29
CURRENT BASE
RENT/RACK
RENT EXCLUDING
PAYMENTS IN
RESPECT OF
TURNOVER FOR
DATE OF THE CURRENT
CURRENT RENT TURNOVER
PROPERTY DATE OF LEASE MEMORANDA PERIOD PARTIES TERM
--------------------------- -------------------- -------------- ----------------- ---------------------- --------------------
11.18-19 together with the 19 January 1996 29 September (pound)84,600 The Prudential 15 years from
basement and sub- 2000 Assurance Company Ltd 25 December 1995
basement of 20, The (1) The Pier (Retail)
Arcade, Bournemouth, Ltd (2)
Xxxxxx XX0 0XX
12.Basement Ground and 1st Registered 3 May 14 November (pound)325,000 The Scottish Life 24 November 1995 to
floor of 147 Xxxxxxxx 1996 2003 Assurance Co. (1) Xxx 00 Xxxxxxxx 0000
Xxxxxx, Xxxxxxx X0 0XX Pier (Retail) Ltd (2) continuing on a
month by month basis
thereafter until
terminated by
1 month's prior
notice)
13.Unit 10, Ground, 1st and Registered 5 October (pound)118,568.72 Jarlaw the Academy Ltd 15 years from 2 June
2nd floors of The 1998 (1) The Pier (Retail) 1998 to 1 June 2013
Academy, Belmont Street, Ltd (2)
Xxxxxxxx XX00 0XX
14.Unit 76, 77, 78 and 78a, 20 November 2003 3 August 2003 (pound)200,000 The Trafford Centre 2 August 2003 to
The Trafford Centre, (in addition Ltd (1) The Pier 2 August 2018
Xxxxxxxxxx X00 0XX (pound)10,200 is (Retail) Ltd (2)
paid quarterly on
account of
estimated
urnover)
15.2, 3, 4 and 5 Theatre 13 August 1998 (pound)89,904 Britel Fund Trustees 13 August 1998 to
Walk, The Headrow Ltd (1) The Pier 12 August 2013
Shopping Centre, The (Retail) Ltd (2)
Headrow, Xxxxx Xxxx
Xxxxxxxxx XX0 0XX
16.Unit 87 (239-240) The 13 December 1999 24 June 2003 (pound)150,000 Dusco (UK) Ltd (1) 15 years and One
Victoria Centre, The Pier (Retail) Ltd quarter from 24 June
Xxxxxxxxxx XX0 0XX (2) 1998
16.A Storage Unit 284 13 December 1999 24 June 2003 (pound)5,000 Dusco (UK) Ltd (1) 15 years and One
Victoria Centre The Pier (Retail) Ltd quarter from 24 June
Xxxxxxxxxx XX0 0XX (2) 1998
30
CURRENT BASE
RENT/RACK
RENT EXCLUDING
PAYMENTS IN
RESPECT OF
TURNOVER FOR
DATE OF THE CURRENT
CURRENT RENT TURNOVER
PROPERTY DATE OF LEASE MEMORANDA PERIOD PARTIES TERM
--------------------------- -------------------- -------------- ----------------- ---------------------- --------------------
17.EVU006 Upper Level, 14 May 1999 (pound)178,450.52 Blueco Ltd (1) The 15 years from
Wintergarden, Bluewater, (in addition Pier (Retail) Ltd (2) 25 December 1998
Stone DA9 9SF (pound)3,718 is
paid quarterly on
account of
estimated
turnover)
18.Unit Lower Ground Level 2 April 2001 (pound)200,000 Oracle Shopping Centre 15 years from
& Riverside Level Ltd (1) Oracle 24 June 1999
Holybrook Walk, The Nominees Ltd (2) The
Oracle, Reading, Pier (Retail) Ltd (3)
Xxxxxxxxx XX0 0XX The Pier Retail Group
Ltd (4) (Surety)
18A Storage Reading Unit 2 April 2001 (pound)1,960 Oracle Shopping Centre Expires 23 June 2014
for Unit L30 at Ltd (1) Oracle Nominees
Riverside level in the Ltd (2) The Pier
Oracle (Retail) Ltd (3) The
Pier Retail Group Ltd
(4) (Surety)
19. Level 1 & 2 Xxxxx 6 November 2000 (pound)50,000 Capital and Regional 15 years expiring
Gardens Shopping Retail (Northern) Ltd 28 September 2015
Centre, Percy Street, (1) The Pier (Retail)
Xxxxxxxxx Xxxx Xxxx, Xxx (0)
Xxxx & Xxxx XX0 0XX
20.19-25 Pepper Row and 24 March 2000 (pound)115,000 The Equitable Life 15 years from
Paddock Row, Grosvenor Assurance Society (1) 25 December 1999
Shopping Centre, (NB rent review The Pier (Retail) Ltd
Xxxxxxx XX0 0XX just been (2) The Pier Retail
agreed at Group Ltd (3) has
(pound)140,000) (Surety)
20.A Xxxx 00 Xxxxxxx Xxx 14 August 2003 (pound)45,000 Mall Nominee One Ltd The lease is co-
Grosvenor Shopping and Mall Nominee Two terminous with the
Centre, Chester Ltd (1) The Pier lease of 19-25
(Retail) Ltd (2) The Pepper Road
Pier Retail Group Ltd
(3)
31
CURRENT BASE
RENT/RACK
RENT EXCLUDING
PAYMENTS IN
RESPECT OF
TURNOVER FOR
DATE OF THE CURRENT
CURRENT RENT TURNOVER
PROPERTY DATE OF LEASE MEMORANDA PERIOD PARTIES TERM
--------------------------- -------------------- -------------- ----------------- ---------------------- --------------------
21.Unit 3 000 Xxxxxx Xxxxxx, Registered (pound)150,000 Pearl (Castle St./ 15 years
and 00-00 Xxxxxx Xxxxxx 5 September 0000 Xxxxxx Xx.) Ltd. (1)
Xxxxxxxxx XX0 0XX (XX X Xxxxxxxxxx The Pier (Retail) Ltd
offer to (2)
increase the
rent to
(pound)215,000
has just been
agreed)
22.Unit 65/66 Festival 24 October 2003 N/A (pound)142,137 Grosvenor Basingstoke From 29 September
Place, Upper Ground Properties Ltd and 2003 to 00 Xxxxxxxx
Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx Xxxxxxxxxxx 0000 amended in a
Xxxxxxxxx XX00 0XX Management Ltd (1) deed of
The Pier (Retail) Ltd rectification 20
(2) April 2004 to 5
years from 1 March
2004
23.Unit U78B Upper Mall, 12 May 2004 N/A (pound)210,000 Chelsfield MH 10 years commencing
Merry Hill Shopping Investments Ltd (1) 17 October 2003
Centre, Brierley Hill, The Pier (Retail) Ltd
West Midlands DY5 1SS (2) The Pier Retail
Group Ltd (3) (Surety)
24.Units 1 and 1a 29 September N/A (pound)105,000 Serput Nominee 11 Ltd 15 years ending
00 Xxxxx'x Xxxx, Xxxxxxx, and Serput Nominee 12 28 September 2018
Xxxxxxx XX0 0XX 2003 Ltd (1) The Pier
(Retail) Ltd (2)
24A (Storage, Xxxxxxx) Unit 10 January 1985 (pound)8,000 Johnsons Central Expires 13 February
2 Part Basement, 70 Retail Ltd (1) J 0000
Xxxxxx Xxxx, Xxxxxxx, Xxxxxxxx & Son plc (2)
Xxxxxxx X00 0XX
32
CURRENT BASE
RENT/RACK
RENT EXCLUDING
PAYMENTS IN
RESPECT OF
TURNOVER FOR
DATE OF THE CURRENT
CURRENT RENT TURNOVER
PROPERTY DATE OF LEASE MEMORANDA PERIOD PARTIES TERM
--------------------------- -------------------- -------------- ----------------- ---------------------- --------------------
25.Unit LSU5 Centrale 15 November 2004 N/A (pound)160,000 St. Xxxxxx Property 15 years from
Shopping Centre, Croydon, Investments Ltd (1) 23 September 2003
Surrey CR0 1TY The Pier (Retail) Ltd
(2) Pier Retail Group
Ltd (3) (Surety)
26.Unit 1.268/1.269 and 27 January 2005 N/A (pound)190,000 CSC Metrocentre Ltd 15 years and One
Mezzanine 00 Xxxxxxx Xxx, (1) The Pier (Retail) quarter to 00
Xxxxx Xxxxxx, Xxxxxxxxx, Ltd (2) Pier Retail September 2019
Tyne & Wear XX00 0XX Group Ltd (3) (Surety)
27.Unit 3, 2-14 Fitzroy Undated N/A (pound)175,000 The Master or keeper 15 years plus
Street, and fellows and broken quarter
Cambridge XX0 0XX Scholars of Xxxxx expiring
College Cambridge (1) 24 March 2020
The Pier (Retail) Ltd
(2)
28.Unit 32, Fishergate Walk, 1 August 2005 N/A (pound)130,000 The Nominee One Ltd 10 years from
The Mall, St Xxxxxx, and Mall Nominee Two 1 August 2005
Xxxxxxx XX0 0XX Ltd (1) The Pier
(Retail) Ltd (2)
The Pier Retail Group
Ltd (3) (Surety)
29.401 Chapelfield Plain, Agreement for N/A (pound)163,500 Parties to Agreement
Chapelfield, Norwich lease dated for Lease:
XX0 0XX 19 August 2004
Lend Lease Norwich Ltd
(1) The Chapelfield
Partnership (2) The
Pier (Retail) Ltd (3)
30.North 9, 10, 11 & 12 26 May 2005 N/A (pound)173,000 MEPC Xxxxxx Xxxx Ltd 1 January 2005 to
Central 000 Xxxxxx Xxxx (1) The Pier (Retail) 23 June 2017
(9 and 11 First Floor, Ltd (2)
10 and 12 ground)
33
CURRENT BASE
RENT/RACK
RENT EXCLUDING
PAYMENTS IN
RESPECT OF
TURNOVER FOR
DATE OF THE CURRENT
CURRENT RENT TURNOVER
PROPERTY DATE OF LEASE MEMORANDA PERIOD PARTIES TERM
--------------------------- -------------------- -------------- ----------------- ---------------------- --------------------
31.Unit 170 12 July 2002 N/A (pound)525,000 MEPC Xxxxxx Xxxx Ltd 15 years from
Xxxxxx Xxxx (1) The Pier (Retail) 24 June 0000
Xxxxxxxx Ltd (2)
32.Unit 173 Undated N/A (pound)310,200 Mastercase Service and Expiry
Xxxxxx Xxxx Distribution Ltd (1) 25 February 2008
Abingdon The Pier (Retail) Ltd
(2)
33.Unit 167 (B) 18 August 2004 N/A (pound)12,800 MEPC Xxxxxx Xxxx 24 June 2005 to 25
(West) Xxxxxx Xxxx, Limited (1) The Pier December 0000
Xxxxxxxx (Retail) Ltd (2)
34.Unit 167 (B) 27 October 2005 N/A (pound)18,000 MEPC Xxxxxx Xxxx No.1 1 July 2005 to 00
(Xxxx) Xxxxxx Xxxx Ltd and MEPC Xxxxxx December 0000
Xxxxxxxx Xxxx No.2 Ltd (1) The
Pier (Retail) Ltd (2)
35.2nd floor 27 September 2005 N/A (pound)10,500 Xxxx X.Xxxxxx (1) The 5 years from 27
Goodge Place Pier (Retail) Ltd (2) September 2005
London WIT 4SF
PART 2 - CONCESSION PROPERTIES
CONCESSIONAIRE PROPERTY
-------------- ---------------------------------------------------------------
Debenhams The Pier at Debenhams, 00 Xxxxxxxx Xxxxxx, Xxxx, Xxxx Xxxxxxxxx
Debenhams The Pier at Debenhams Market Place, Romford, Essex
Debenhams The Pier at Debenhams Market Street, Manchester
Debenhams The Pier at Debenhams The Parade, Swindon, Wiltshire
Debenhams The Pier at Xxxxxxxxx Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx
Debenhams The Pier at Debenhams 00-00 Xxxxxxxxxx Xxxx, Xxxxxxxx
34
CONCESSIONAIRE PROPERTY
-------------- ---------------------------------------------------------------
Debenhams The Pier at Debenhams Queens Buildings, Southampton, Hampshire
Debenhams The Pier at Debenhams 0 Xxx Xxxx, Xxxxxxxxx
Xxxxxxxxx The Pier at Debenhams The Potteries Shopping Centre, Lamb St.
Xxxxxx, Stoke on Trent
Debenhams The Pier at Xxxxxxxxx Xxxxxxx Xxxxxxxx, Xxxxxx
Debenhams The Pier at Debenhams 000-000 Xxxxxx Xx., Xxxxxx
Xxxxxxxxx The Pier at Debenhams Royal Parade, Plymouth, Devon
Homebase The Pier at Homebase, Almonvale South Retail Park, Livingston,
West Lothian
Homebase The Pier at Homebase, Meols Cop Retail park, Meols Cop Road,
Southport, Merseyside
Roches The Pier at Roches, Blanchardstown Centre Blanchardstown,
Dublin
Roches The Pier at Xxxxxx, Xxxxx Street, Dublin, Eire
35
SCHEDULE 3
REGISTERED INTELLECTUAL PROPERTY RIGHTS
REGISTERED COUNTRY OF
TRADE XXXX CLASS(ES) NUMBER REGISTRATION FILING DATE
---------- ------------- --------------- ----------------- -------------
PIER 20 1116416 UK 25.06.1979
THE PIER 16, 18, 20, 2016131B UK 31.03.1995
21, 24, 27,
28, 35, 36
XXX XXXX 00, 00, 00, 000000 XXXXXXX 10.04.2003
35
36
SCHEDULE 4
THE WARRANTIES
PART 1
GENERAL WARRANTIES
1 Disclosure and Information
1.1 The information set out in Schedules 1 and 2 is true and accurate.
2 The Seller
2.1 Each of the Seller and the Debt Seller has full power to enter into and
perform this Agreement and the other Transaction Documents to which each is
a party.
2.2 This Agreement and the other Transaction Documents to which the Seller and
the Debt Sellers are a party constitute (or will when executed constitute),
valid, legal and binding obligations on the Seller and/or the Debt Seller
(as the case may be) in accordance with their terms.
2.3 The Seller is the sole, legal and beneficial owner of the Shares and is
entitled to sell and transfer the Shares to the Purchaser on the terms set
out in this Agreement.
2.4 The Seller and the Debt Seller are not insolvent nor unable to pay their
debts within the meaning of the Insolvency Act or any other analogous
statute applicable to either of them in any other jurisdiction.
3 The Company
3.1 No Group Company:
3.1.1 holds or beneficially owns, or has agreed to acquire any shares,
debentures or other securities of any other body corporate (whether
incorporated in the United Kingdom or elsewhere) other than the
Subsidiaries;
3.1.2 is or has agreed to become a member of any partnership, joint
venture, consortium or other unincorporated association (other than a
recognised trade association);
3.1.3 has a branch, place of business or substantial assets outside the
United Kingdom and the Republic of Ireland or any permanent
establishment (as that expression is defined in any relevant Order in
Council made pursuant to section 788, TA 88) in any country outside
the United Kingdom or the Republic of Ireland.
3.2 No Group Company has received written notice from any governmental or
regulatory body that it is in violation of, or in default with respect to,
any law or regulation where such violation or default would have a material
adverse effect on the assets or financial position of the Group.
37
3.3 No Group Company carries on business under any name other than its
corporate name or the "The Pier" or "Pier".
3.4 No Group Company has granted a power of attorney which remains in force.
3.5 So far as the Seller is aware, each Group Company is conducting and has at
all material times within the five years prior to the date of this
Agreement conducted its business in accordance with all applicable laws and
regulations of the country in which it is incorporated and/or conducts
business, excluding any breach of law or regulation which is or was not
material in the context of the business of the Group.
4 INSOLVENCY
4.1 So far as the Seller is aware, no Group Company is insolvent nor unable to
pay its debts within the meaning of the Insolvency Xxx 0000.
4.2 So far as the Seller is aware, no step has been taken to initiate any
process by or under which:
4.2.1 some or all of the creditors of any Group Company accept, by
agreement or in pursuance of a court order, an amount less than the
sums owing to them in satisfaction of those sums with a view to
preventing the dissolution of any Group Company; or
4.2.2 a person is appointed to manage the affairs, business and assets of
any Group Company on behalf of the Company's creditors; or
4.2.3 the holder of a charge over any Group Company's assets is appointed
to control the business and assets of such Group Company.
4.3 In relation to any Group Company:
4.3.1 no administrator has been appointed;
4.3.2 no documents have been filed with the court for the appointment of an
administrator; and
4.3.3 no Group Company has received written notice of any intention to
appoint an administrator in respect of that Group Company.
4.4 No Group Company has received written notice that any process has been
initiated which would lead to the Company being dissolved and its assets
being distributed among the relevant company's creditors, shareholders or
other contributors.
5 THE SHARES
5.1 The Shares constitute the whole of the allotted and issued share capital of
the Company and are fully paid.
5.2 The Shares and the issued shares of each Group Company are free from any
Encumbrance.
5.3 No Group Company has at any time in the last five years:
38
5.3.1 repaid, redeemed or purchased (or agreed to repay, redeem or
purchase) any of its own shares, or otherwise reduced (or agreed to
reduce) its issued share capital or any class of it or capitalised
(or agreed to capitalise) in the form of shares, debentures or other
securities or in paying up any amounts unpaid on any shares,
debentures or other securities, any profits or reserves of any
class or description or passed (or agreed to pass) any resolution
to do so; or
5.3.2 directly or indirectly provided any financial assistance for the
purpose of the acquisition of shares in the Company or for the
purpose of reducing or discharging any liability incurred in such
an acquisition, pursuant to sections 155, CA 85.
5.4 No right has been granted to any person which remains outstanding to
require any Group Company to issue any share capital and no Encumbrance has
been created in favour of any person in respect of any unissued shares or
other unissued securities of any Group Company.
5.5 No commitment has been given by any Group Company to create an Encumbrance
in respect of the Shares or the issued shares of any of the Subsidiaries
(or any unissued shares or other unissued securities of the Company or any
of its Subsidiaries) or for any of them to issue any share capital and no
person has claimed any rights in connection with any of those things where
such claim remains outstanding.
6 SUBSIDIARIES
6.1 The Subsidiaries are the only subsidiaries of the Company.
6.2 The particulars of the Subsidiaries set out in Schedule 1 are true and
accurate.
6.3 The Company and/or one of the Subsidiaries is the legal and beneficial
owner of the shares in each of the Subsidiaries.
6.4 The shares in the Subsidiaries are free from all Encumbrances.
6.5 The issued shares of each of the Subsidiaries are fully paid up.
7 CONSTITUTIONAL AND CORPORATE DOCUMENTS
7.1 The copy of the memorandum and articles of association of the Company in
the Disclosure Documents is true and complete.
7.2 Each Group Company has at all times carried on its business and affairs in
all respects in accordance with its memorandum and articles of association.
7.3 So far as the Seller is aware, the Company has not received a written
notice or allegation that any of the register of members or statutory books
of the Company are incorrect or should be rectified.
8 ACCOUNTS
8.1 The Accounts:
8.1.1 have been prepared in accordance with the Companies Act and GAAP; and
39
8.1.2 show a true and fair view of the state of affairs of the Company at
the Accounts Date and of the profit and losses of the Company for the
financial period to which the Accounts relate.
8.2 The Accounts have been filed in accordance with the requirements of the
Companies Act.
9 FINANCIAL AND OTHER RECORDS
9.1 No Group Company has received any written notice that any of the accounts,
books, ledgers and other financial records of the Company have not been
properly maintained or do not contain accurate records of all matters
required to be entered in them by the Companies Act.
9.2 All such accounts, books, ledgers and records are in the possession or
under the control of the Company or one of the Subsidiaries.
9.3 All material records and information recorded, stored, maintained,
operated, or held by any means (including any electronic, mechanical or
photographic process, whether computerised or not) which belong to the
Company are under its control or the control of one of the Subsidiaries.
9.4 Details of the terms of all outstanding bank and other loan facilities made
available to the Group Companies (excluding any trade credit arrangements
in the ordinary course of the business of the Group) have been provided to
the Purchaser in the Disclosure Documents.
9.5 No Group Company has any indebtedness owed to any bank or other financial
institution which is outstanding at the date of this Agreement.
10 POSITION SINCE 25 FEBRUARY 2006
Since 25 February 2006, the Company:
10.1 has carried on its business in the ordinary course and as a going concern;
10.2 has not declared, made or paid any dividend and no loan capital of the
Company has been repaid in whole or in part or has become due ;
10.3 has not made any change to the remuneration, terms of employment,
emoluments or pension benefits of any present or former director, officer
or employee of the Company who on the Accounts Date was entitled to
remuneration in excess of (pound)75,000 per annum;
10.4 has not appointed or employed any additional director, officer or employee
entitled to remuneration in excess of (pound)75,000;
10.5 has not entered into contracts involving capital expenditure in an amount
exceeding(pound)80,000 in the aggregate other than in the ordinary course
of business;
10.6 has not borrowed or raised any money or entered into any financial facility
(except such borrowings from bankers as are within the amount of any
overdraft facility which was available to the Company at 25 February 2006)
or since 25 February 2006
40
received any notice from any banker that such banker wishes to renegotiate
any overdraft facility available to the Company at 25 February 2006; and
10.7 has not made any change to its accounting reference date.
11 FINANCE
11.1 No guarantee, mortgage, charge, pledge, lien, assignment or other security
agreement which is outstanding has been given by or entered into by the
Company in respect of borrowings of the Company.
11.2 The total amount borrowed by the Company does not exceed any limitations on
the borrowing powers contained:
11.2.1 in the memorandum and articles of association of the Company; or
11.2.2 in any debenture or other deed or document binding on the Company.
11.3 There are no debts owing to the Company other than debts that have arisen
in the ordinary course of business.
11.4 So far as the Seller is aware, the Company has not given or entered into
any guarantee, mortgage, charge, pledge, lien, assignment or other security
agreement which is outstanding in respect of the indebtedness, or for the
default in the performance of any obligation, of any person not being a
Group Company.
11.5 So far as the Seller is aware, the Company is not subject to any
arrangement for receipt or repayment of any grant, subsidy or financial
assistance from any government department or other body.
12 TRANSACTIONS WITH THE SELLER, DIRECTORS AND CONNECTED PERSONS
12.1 Upon execution and exchange of the Debt Confirmation Deed, the Deed of
Release and Deed of Assignment there will be no outstanding indebtedness
between any Group Company and any member of the Seller's Group.
13 THE PROPERTIES
13.1 In this Agreement these definitions apply:
"PREVIOUSLY-OWNED LAND AND BUILDINGS": land and/or buildings that has, at
any time before the date of this Agreement, been owned (under whatever
tenure) and/or occupied and/or used by the Company but is either no longer
owned, occupied or used by the Company, or is owned, occupied or used by
the Company but pursuant to a different lease, licence, transfer or
conveyance.
"PROPERTIES": the land and buildings short particulars of which are set out
in Part 1 of Schedule 2 and Property means each and every one of them and
any part or parts of them.
13.2 The Properties and the Concession Properties are the only land and
buildings owned, used or occupied by any Group Company. The Sellers are not
aware of any matter or circumstance which threatens the use and occupation
of the Properties for their existing use which would be material in the
context of the Group taken as a whole.
41
There are no material and current disputes with landlords in relation to
non-compliance with the provisions of leases of the Properties.
13.3 There are no current arrears of rent and other sums due to the landlord
under the leases of the Properties.
13.4 The information contained within Schedule 2 in relation to the current
rents (but without in all cases completing rent review memoranda to
document those rents) and rent review dates is true and accurate and not
misleading.
13.5 So far as the Seller is aware the Company does not have any right of
ownership, right of use, option, right of first refusal or contractual
obligation to purchase, or any other legal or equitable right affecting any
land and buildings other than the Properties and the Concession Properties.
13.6 So far as the Seller is aware neither the Company nor any company that is a
Subsidiary has any actual or contingent liability in respect of
Previously-owned Land and Buildings.
14 INSURANCE
14.1 Summary particulars of the insurance policies maintained by the Group
(excluding any policies where the Group participates under a policy
provided for the Seller's Group and the Group), as set out in the
Disclosure Documents, are accurate in all material respects.
14.2 There are no outstanding claims under, or in respect of the validity of,
any of the insurance policies which are material in the context of the
business of the Group as a whole.
15 LITIGATION AND INVESTIGATIONS
15.1 So far as the Seller is aware, the Company is not engaged in any
litigation, administrative, mediation or arbitration proceedings (except
for debt collection in the normal course of business) which is material to
the business of the Group.
15.2 The Seller has not received any written notice that the Company is the
subject of any outstanding investigation, inquiry or enforcement
proceedings by any governmental, administrative or regulatory body.
15.3 No such proceedings, investigation or inquiry as are mentioned in paragraph
15.1 or 15.2 have been notified to the Seller and the Seller is not aware
of any circumstances likely to give rise to any such proceedings,
investigation or inquiry.
16 CONTRACTS
16.1 In this Agreement this definition applies:
"MATERIAL CONTRACT": an agreement to which the Company is a party or is
bound by and which is of material importance to the business or profits of
the Group other than any agreement relating to the Properties or the
Concession Properties.
16.2 Except for the agreements and arrangements Disclosed, the Company is not a
party to or subject to any agreement which:
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16.2.1 is a Material Contract which is not in the ordinary course of
business of the Company; or
16.2.2 is a Material Contract which may be terminated as a result of any
Change of Control of the Company.
17 LICENCES AND CONSENTS
17.1 So far as the Seller is aware, each Group Company has all necessary
licences, consents, permits and authorities necessary to carry on its
business now carried on by it in the places and in the manner is which that
business is now carried on, all of which are valid and subsisting.
17.2 So far as the Seller is aware, no Group Company has received written notice
that it is at the date of this agreement materially in default under any
licence, consent, permit or authority which is material to the business or
operations of the Group.
18 CONSEQUENCE OF ACQUISITION OF SHARES BY PURCHASER
The acquisition of the Shares by the Purchaser or compliance with the terms
of this Agreement do not entitle anyone to receive from the Company any
finder's fee, brokerage or other commission in connection with the purchase
of the Shares by the Purchaser.
19 EMPLOYEES
19.1 In this Agreement these definitions apply:
"EMPLOYEE": any person employed by a Group Company;
"REPRESENTATIVE BODY" means any trade union or works council representing
any workers of any Group Company; and trade union has the same meaning as
in the Trade Union and Labour Relations (Consolidation) Xxx 0000;
"WORKER": has the same meaning as in section 230 of the Employment Rights
Xxx 0000.
19.2 The names of each person who is a Director of each of the Group Companies
are set out in Schedule 1.
19.3 The Seller has Disclosed to the Purchaser the following particulars for
each Employee:
19.3.1 their job title and department;
19.3.2 their base salary and summary details of any contractual benefits
and privileges provided;
19.3.3 the commencement date of their contract and the date on which their
continuous service began;
19.3.4 the type of contract (whether full or part-time or other).
19.4 All contracts of employment for all Employees are terminable on three
months' notice or less by either the relevant Group Company or relevant
Employee.
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19.5 No Employees are currently on secondment, maternity, paternity or adoption
leave.
19.6 No notice is outstanding to terminate the contract of employment of any
Director (whether given by the Group Company or by the Director) and, so
far as the Seller is aware, no material dispute is outstanding between:
19.6.1 any Group Company and a material number or category of its current
or former Employees relating to their employment or its termination;
or
19.6.2 the Company and a material number or category of any of its current
or former Workers relating to their contract or its termination.
19.7 So far as the Seller is aware, the acquisition of the Shares by the
Purchaser or compliance with the terms of this Agreement will not enable
any Directors or senior Employees of any Group Company to terminate their
employment or receive any payment or other benefit from any Group Company.
19.8 Except as Disclosed, so far as the Seller is aware, no Group Company is
involved in any material industrial or trade dispute or negotiation
regarding a claim with any Representative Body and is not aware of anything
that would be likely to give rise to such a dispute or claim.
19.9 Particulars of all material workforce agreements reached under the Trade
Union and Labour Relations (Consolidation) Xxx 0000 and all collective
bargaining or procedural or other agreements or arrangements with any
Representative Body that relate to any employees of any Group Company are
contained in the Disclosure Letter.
19.10 No commitment has been given by any member of the Seller's Group in
connection with the issue of any share capital in any Group Company to any
Employee.
20 PENSION SCHEMES
20.1 The Disclosure Documents contain summary particulars of all Pension Schemes
of each Group Company and no Group Company is under an obligation (legally
binding or otherwise) to provide pensions, gratuities, superannuation
allowance or other "relevant benefits" as defined in section 612(1) of the
1988 Taxes Act, to or for any past or present officer or employee of the
Company or his dependants nor does it contribute to any scheme or
arrangement for the provision of any other retirement, pension or death
benefit except in respect of the Pension Schemes referred to in the
Disclosure Documents.
21 INTELLECTUAL PROPERTY
21.1 In this Agreement this definition applies:
"INTELLECTUAL PROPERTY RIGHTS": (i) copyright, patents, database rights and
rights in trade marks, designs, know-how and confidential information
(whether registered or unregistered), (ii) applications for registration,
and rights to apply for registration, of any of the foregoing rights and
(iii) all other intellectual property rights and equivalent or similar
forms of protection existing anywhere in the world.
21.2 Particulars are set out in Schedule 3 of all registered Intellectual
Property Rights (including applications for such rights) owned or used by
the Company.
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21.3 Pier 1 Licensing, Inc. is the registered proprietor of (or applicant for)
the Intellectual Property Rights set out in Schedule 3 and has not granted
any rights in respect thereof save for the licences dated 30 June 1997 and
13 January 1997.
21.4 The Company does not require any Intellectual Property Rights other than
those identified in Schedule 3 in order to carry on its business as carried
on at the date of this Agreement-.
21.5 In respect of the Intellectual Property Rights set out in Schedule 3:
21.5.1 all application and renewal fees required for the maintenance or
protection of such rights have been paid;
21.5.2 so far as the Seller is aware, there are no claims, disputes or
proceedings, pending or threatened, in relation to the ownership or
use of such rights.
21.6 So far as the Seller is aware, there has been no, and is no current,
material infringement by any third party of any Intellectual Property
Rights set out in Schedule 3.
21.7 So far as the Seller is aware, the carrying on of the business of the Group
as carried on at the date of this Agreement using the Intellectual Property
Rights set out in Schedule 3 does not infringe the Intellectual Property
Rights of any third party.
PART 2
TAX WARRANTIES
22 COMPLIANCE AND GENERAL
22.1 All notices, returns (including any land transaction returns), reports,
accounts, computations, statements, assessments and registrations and any
other necessary information submitted by the Group Companies to any Tax
Authority for the purposes of Tax have been made on a proper basis,
punctually submitted, were accurate and complete when supplied and remain
accurate and complete in all material respects and none of the above is, or
so far as the Seller is aware is likely to be, the subject of any material
dispute with any Tax Authority.
22.2 All Tax which the Group Companies are liable to pay prior to Completion has
been so paid.
22.3 No Group Company has within the period of twelve months ending on the
Completion Date of this Agreement paid or become liable to pay any penalty,
fine, surcharge or interest charged by virtue of the provisions of the TMA
or any other Tax Statute.
22.4 So far as the Seller is aware, the Group Companies have sufficient records
relating to past events to permit accurate calculation of the Tax liability
or relief which would arise upon a disposal or realisation on Completion of
each asset owned by the Group Companies at the Accounts Date or acquired by
the Group Companies since that date but before Completion.
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23 FOREIGN ISSUES
23.1 The Group Companies have and have for the last seven years (or, if later,
since their date of incorporation) been resident for Tax purposes only in
the jurisdiction in which they were incorporated and have never had a
permanent establishment in any other jurisdiction.
24 GROUPS
24.1 No UK Company has within the last six years been a member of any group of
companies for the purposes of s.170 TCGA any member of which was resident
in the UK for UK tax purposes other than the UK Companies.
25 CLOSE COMPANIES
25.1 No UK Company has within the last three years been a close
investment-holding company as defined in section 13A, TA 88.
26 VAT
26.1 Each Group Company is a taxable person duly registered for the purposes of
VAT.
26.2 Each Group Company has complied with all statutory provisions, rules,
regulations, orders and directions in respect of VAT and has promptly
submitted accurate returns. Each Group Company maintains full and accurate
VAT records, has never been subject to any interest, forfeiture, surcharge
or penalty nor been given any notice under sections 59 or 64, VATA nor been
given a warning within section 76(2), VATA nor has any Group Company been
required to give security under paragraph 4 of Schedule 11, VATA.
26.3 Each Group Company is not and has not been for VAT purposes a member of any
group of companies and no act or transaction has been effected in
consequence whereof each Group Company is or may be held liable for any VAT
arising from supplies made by another company and no direction has been
given nor will be given by H M Revenue & Customs under Schedule 9A, VATA as
a result of which any Group Company would be treated for the purposes of
VAT as a member of a group.
26.4 For the purposes of paragraph 3(7) of Schedule 10 VATA, the UK Companies or
their relevant associates have exercised the election to waive exemption
from VAT (pursuant to paragraph 2 of Schedule 10 VATA) only in so far as
detailed (as having been the subject of such an election) in the Disclosure
Documents: and
26.4.1 all things necessary for the election to have effect have been done
and in particular any notification and information required by
paragraph 3(6) of Schedule 10 VATA 1994 has been given and any
permission required by paragraph 3(9) of Schedule 10 VATA has been
properly obtained; and
26.4.2 no election has or will be disapplied or rendered ineffective by
virtue of the application of the provisions of paragraph 2 (3AA) of
Schedule 10 VATA.
26.5 No UK Company owns any assets which are capital items subject to the
capital goods scheme under Part XV of the VAT Regulations 1995.
46
26.6 No UK Company has made any claim for bad debt relief under section 36, VATA
which remains outstanding.
27 STAMP DUTY AND STAMP DUTY LAND TAX
27.1 All stampable documents to which any Group Company is a party have been
duly stamped or stamped with a particular stamp denoting that no stamp duty
is chargeable.
27.2 Neither entering into this Agreement nor Completion will result in the
withdrawal of any stamp duty or stamp duty land tax relief granted on or
before Completion which will affect any Group Company.
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SCHEDULE 5
COMPLETION REQUIREMENTS
SELLER'S OBLIGATIONS
1 On Completion, the Seller shall deliver or procure the delivery to the
Purchaser or its representatives of:
1.1 The Debt Confirmation Deed, the Deed of Release and the Deed Assignment
duly executed by the Debt Seller (and forms 403a in respect of any security
over any assets of any Group Company granted to the Debt Seller);
1.2 The Tax Deed duly executed as a deed by the Seller;
1.3 Transfers of the Shares duly executed by the registered holders in favour
of the Purchaser;
1.4 The relevant share certificates for the Shares in the names of the
registered holders or an indemnity for any lost certificates;
1.5 In respect of each UK Company:
1.5.1 the statutory registers and minute books;
1.5.2 common seal (if any);
1.5.3 the certificate of incorporation; and
1.5.4 any certificates of incorporation on change of name;
1.6 The written resignations in the Agreed Form of X X Xxxxxxxx, X X Xxxxxx and
M A Xxxxxx as Directors of the Group Companies such resignations to take
effect from Completion;
1.7 The Co-existence Agreement duly executed by the Seller, Pier 1 Licensing,
Inc. and the Company; and
1.8 Minutes of the board meetings held under paragraph 2 of this Schedule.
2 On Completion, the Seller shall cause a board meeting of each Group Company
to be held at which the matters mentioned below will take place:
2.1 In the case of the Company only, a resolution to register the transfers of
Shares will be passed, subject to the transfers being stamped at the cost
of the Purchaser;
2.2 Sigurour Berntsson, Xxxxx x Xxx Xxxxxxxx and Xxxxxxxx Xxxxx shall be
appointed additional directors; and
2.3 The resignations referred to in paragraphs 1.6 above shall be tendered and
accepted so as to take effect at the close of the meeting.
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SIGNED by
----------------------------------------
PIR TRADING, INC.
SIGNED by
----------------------------------------
PIER 1 IMPORTS (U.S.), Inc.
SIGNED by
----------------------------------------
PALLI LIMITED
SIGNED by
----------------------------------------
LAGERINN ehf
acting by its attorney
49
