þ | Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
o | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Delaware | 43-1883836 | |
(State or Other Jurisdiction of | (I.R.S. Employer Identification No.) | |
Incorporation or Organization) | ||
1954 Innerbelt Business Center Drive | 63114 | |
St. Louis, Missouri | (Zip Code) | |
(Address of Principal Executive Offices) |
Securities registered pursuant to Section 12(b) of the Act: | ||
|
||
Title of Each Class
|
Name of Each Exchange on Which Registered | |
|
||
Common Stock, par value $0.01 per share
|
New York Stock Exchange | |
|
||
Securities registered pursuant to Section 12(g) of the Act: None |
Large accelerated filer
o
|
Accelerated filer þ | Non-accelerated filer o |
3
| our future financial performance; |
| our anticipated operating and growth strategies; |
| our anticipated rate of store openings; |
| our franchisees anticipated rate of international store openings; |
| our anticipated store opening costs; and |
| our future capital expenditures. |
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5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
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30
31
32
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11
5
5
4
5
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the continuing appeal of our concept;
the effectiveness of our marketing efforts to attract new and repeat guests;
consumer confidence and general economic conditions;
our ability to anticipate and to respond, in a timely manner, to consumer trends;
the continued introduction and expansion of our merchandise offerings;
the impact of new stores that we open in existing markets;
mall traffic;
competition;
the timing and frequency of national media appearances and other public relations events; and
weather conditions.
create greater awareness of our brand, interactive shopping experience and products;
identify the most effective and efficient level of spending in each market;
determine the appropriate creative message and media mix for marketing expenditures;
effectively manage marketing costs (including creative and media) in order to
maintain acceptable operating margins and return on marketing investment;
select the right geographic areas in which to market; and
convert consumer awareness into actual store visits and product purchases.
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negotiate acceptable lease terms, including desired tenant improvement allowances;
finance the preopening costs, capital expenditures and working capital requirements of the stores;
manage inventory to meet the needs of new and existing stores on a timely basis;
hire, train and retain qualified store personnel;
develop cooperative relationships with our landlords; and
successfully integrate new stores into our existing operations.
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rebranding and store conversions with respect to the 29 Bear Factory stores we expect to acquire;
coordinating geographically disparate organizations, systems and facilities;
assimilating and retaining employees with diverse business backgrounds;
consolidating corporate and administrative functions;
limiting the diversion of management resources necessary to facilitate the integration;
implementing compatible information and communication systems, as well as common operating procedures;
creating compatible financial controls and comparable human resource management practices;
coordinating sales and marketing functions;
maintaining customer care services and retaining customers;
addressing the expenses of any undisclosed or potential legal liabilities;
retaining key management and employees; and
preserving the collaboration, licensing, distribution, marketing, promotion and other
important relationships of each company.
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the timing of new store openings and related expenses;
the profitability of our stores;
increases or decreases in comparable store sales;
the timing and frequency of our marketing initiatives;
changes in general economic conditions and consumer spending patterns;
changes in consumer preferences;
the continued introduction and expansion of merchandise offerings;
the effectiveness of our inventory management;
actions of competitors or mall anchors and co-tenants;
seasonal shopping patterns, including whether the Easter holiday occurs in the first or
second quarter and other vacation schedules;
the timing and frequency of national media appearances and other public relations events; and
weather conditions.
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give adequate notice regarding information collection and disclosure practices;
allow consumers to have personal information deleted from a companys database;
provide consumers with access to their personal information and the ability to rectify inaccurate information;
obtain express parental consent prior to collecting and using personal information from children; and
comply with the Federal Childrens Online Privacy Protection Act.
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actual or anticipated variations in comparable store sales or operating results;
changes in financial estimates by the investment community;
actual or anticipated changes in economic, political or market conditions, such
as recessions or international currency fluctuations;
changes in the retailing environment;
changes in the market valuations of other specialty retail companies;
announcements by us or our competitors of significant acquisitions, strategic
partnerships, divestitures, joint ventures or other strategic initiatives; and
losses of key members of management.
restrict various types of business combinations with significant stockholders;
provide for a classified board of directors;
limit the right of stockholders to remove directors or change the size of the board of directors;
limit the right of stockholders to fill vacancies on the board of directors;
limit the right of stockholders to act by written consent and to call a special meeting of stockholders or propose other actions;
require a higher percentage of stockholders than would otherwise be required to amend, alter, change or repeal our bylaws and
certain provisions of our certificate of incorporation; and
authorize the issuance of preferred stock with any voting rights, dividend rights, conversion privileges, redemption rights and
liquidation rights and other rights, preferences, privileges, powers, qualifications, limitations or restrictions as may be
specified by our board of directors.
discourage, delay or prevent a change in the control of our company or a change in our management,
even if such change may be in the best interests of our stockholders;
adversely affect the voting power of holders of common stock; and
limit the price that investors might be willing to pay in the future for shares of our common stock.
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Number of
State
Stores
2
4
1
16
5
4
1
8
6
1
1
7
6
2
2
2
1
1
4
8
3
2
1
5
1
3
2
12
11
7
10
2
2
Table of Contents
Number of
State
Stores
8
1
3
6
15
2
6
3
1
3
2
2
1
4
Fiscal 2005
Fiscal 2004
High
Low
High
Low
$
36.90
$
29.44
$
31.08
$
20.31
$
24.49
$
19.86
$
31.97
$
21.44
$
35.15
$
23.55
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Fiscal Year
2005
2004 (1)
2003 (1)
2002 (1)
2001 (1)
(Dollars in thousands, except share, per share and per gross square foot data)
$
361,809
$
301,662
$
213,672
$
169,138
$
106,622
180,373
150,903
115,845
90,215
56,294
133,921
115,993
81,533
66,068
41,405
4,812
2,186
3,859
3,949
3,921
(54
)
1,006
1,550
(1,710
)
(299
)
(58
)
(88
)
64
317,396
268,729
201,179
160,144
104,240
44,413
32,933
12,493
8,994
2,382
122
44,413
32,933
12,493
8,994
2,504
17,099
12,934
4,875
3,557
1,011
27,314
19,999
7,618
5,437
1,493
1,262
1,970
1,971
824
263
455
455
455
$
27,314
$
18,474
$
5,193
$
3,011
$
214
$
27,314
$
8,519
$
116
$
67
$
7
$
$
9,955
$
5,077
$
2,944
$
207
$
1.38
$
2.30
$
0.53
$
0.31
$
0.03
$
1.35
$
1.07
$
0.43
$
0.29
$
0.03
19,735,067
3,702,365
217,519
217,519
217,519
20,229,978
18,616,435
17,546,348
12,055,458
9,101,143
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Fiscal Year
2005
2004 (1)
2003 (1)
2002 (1)
2001 (1)
(Dollars in thousands, except share, per share and per gross square foot data)
$
178,528
$
149,566
$
97,582
$
78,908
$
50,328
49.7
%
49.8
%
45.7
%
46.7
%
47.2
%
$
31,083
$
16,494
$
24,917
$
24,017
$
25,293
17,592
14,948
12,840
8,990
5,340
$
54,642
$
48,527
$
31,770
$
23,963
$
18,150
(37,077
)
(17,732
)
(27,035
)
(25,531
)
(26,949
)
6,058
15,931
(121
)
19,256
$
$
0.55
$
$
$
200
170
150
108
71
$
1,864
$
1,857
$
1,605
$
1,904
$
2,003
$
615
$
602
$
502
$
582
$
634
(0.2
)%
18.1
%
(15.9
)%
(9.7
)%
(6.7
)%
$
90,950
$
67,327
$
20,601
$
15,866
$
17,555
66,646
48,000
10,463
7,376
10,172
246,108
189,237
128,210
105,893
81,264
37,890
35,920
33,964
130,357
95,510
19,845
14,192
10,727
(1)
Certain prior year amounts have been reclassified to conform with the fiscal 2005 presentation.
(2)
Gross margin represents net retail sales less cost of merchandise sold. Gross margin
percentage represents gross margin divided by net retail sales.
(3)
Capital expenditures consist of leasehold improvements, furniture and fixtures and computer
equipment and software purchases.
(4)
Excludes our webstore and seasonal and event-based locations.
(5)
Average net retail sales per store represents net retail sales from stores open throughout the
entire period divided by the total number of such stores.
(6)
When we refer to average net retail sales per store and net retail sales per gross square foot
for any period, we include in those calculations only those stores that have been open for
that entire period.
(7)
Net retail sales per gross square foot represents net retail sales from stores open throughout
the entire period divided by the total gross square footage of such stores.
(8)
Comparable store sales percentage changes are based on net retail sales and stores are
considered comparable beginning in their thirteenth full month of operation.
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United States and Canadian retail stores, a webstore and seasonal, event-based locations;
International stores operated under franchise agreements; and
License arrangements with third parties which manufacture and sell to other retailers
merchandise carrying the Build-A-Bear Workshop brand.
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Fiscal 2005
Fiscal 2004
Fiscal 2003
18.1
%
(15.9
)%
Our ongoing programs in advertising. During the fourth quarter of
fiscal 2003, we tested in a limited number of markets the use of
television and online advertising and determined that it was
successful in attracting a higher number of new and repeat guests. In
the first quarter of fiscal 2004, we implemented this marketing
strategy on a national basis and quickly began achieving comparable
store sales increases. We continued this marketing approach throughout
fiscal 2005. This approach was successful in maintaining our
comparable store sales levels, but did not produce the increases that
were achieved in fiscal 2004 when the change in the marketing program
was an incremental addition to the prior year.
Following an improved economy in 2004, with higher levels of consumer
confidence and a better retail climate, the economy showed mixed
results in 2005 with varying levels of consumer confidence, record
levels of crude oil prices and significant weather activity,
particularly during the hurricane season.
A difficult economic environment, including lower consumer confidence levels and a weak retail climate.
Our inability to increase the number of transactions in comparable stores which we believe was the
result of low brand awareness with potential new and repeat guests.
The transfer to new stores of a portion of existing stores sales, as we opened new stores in markets
where we already operated one or more stores, causing the existing stores sales to decline, even
though total sales in those markets increased. We expect this factor to continue to affect us as we
add new stores in markets where we have existing stores.
The large amount of initial trial sales in the first year a store is open, which we believe results
from the distinctive nature of our concept and the publicity we normally receive when we open a new
store, does not necessarily continue at that level after this period. We expect this factor to
continue to affect us, but it is difficult to predict to what degree, particularly if awareness of our
brand continues to grow as a result of our change in marketing strategy.
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11
5
5
4
5
Table of Contents
Fiscal
Fiscal
Fiscal
2005
2004
2003
170
150
108
30
21
43
(1
)
(1
)
200
170
150
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Fiscal
Fiscal
Fiscal
2005
2004
2003
12
1
18
12
1
(1
)
30
12
1
Fiscal 2005
Fiscal 2004
Fiscal 2003
99.2
%
99.6
%
99.9
%
0.5
0.3
0.1
0.3
0.1
0.0
100.0
100.0
100.0
50.3
50.2
54.3
37.0
38.5
38.2
1.3
0.7
1.8
0.0
(0.0
)
0.0
(0.5
)
(0.1
)
(0.0
)
87.7
89.1
94.2
12.3
10.9
5.8
4.7
4.3
2.3
7.5
%
6.6
%
3.6
%
49.7
%
49.8
%
45.7
%
Table of Contents
(1)
Cost of merchandise sold is expressed as a percentage of net retail sales.
(2)
Gross margin represents net retail sales less cost of merchandise sold.
Gross margin percentage represents gross margin divided by net retail
sales.
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Fiscal 2005
Fiscal 2004
(Dollars in thousands)
$
27,314
$
19,999
17,099
12,934
(1,710
)
(299
)
13,985
11,713
4,812
2,186
34,000
31,952
(1,107
)
353
(1,499
)
(1,923
)
$
92,894
$
76,915
$
361,809
$
301,662
(2,907
)
(1.193
)
$
(12,131
)
$
(8,964
)
$
346,771
$
291,505
26.8
%
26.4
%
7.5
%
6.6
%
(1)
Store depreciation and amortization includes depreciation and amortization of all capitalized assets in store
locations, including leasehold improvements, furniture and fixtures, and computer hardware and software.
(2)
General and administrative expenses consist of non-store, central office general and administrative functions such as
management payroll and related benefits, travel, information systems, accounting, purchasing and legal costs as well
as the depreciation and amortization of central office leasehold improvements, furniture and fixtures, computer
hardware and software and intellectual property. General and administrative expenses also include a central office
marketing department, primarily payroll and related benefits expense, but exclude advertising expenses, such as direct
mail catalogs and television advertising, which are included in store contribution.
(3)
Franchising and licensing contribution includes franchising and licensing revenues and all expenses attributable
to the franchising and licensing segments other than depreciation,
amortization and interest expense/income. Depreciation and amortization
related to franchising and licensing is included in the general and administrative expense caption. Interest expense/income related to
franchising and licensing is included in the interest expense (income) caption.
(4)
Non-store activities include our webstore, seasonal and event-based locations and franchising and licensing activities.
Fiscal 2005
Fiscal 2004
First
Second
Third
Fourth
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
Quarter(1)
Quarter
Quarter
Quarter
(Dollars in millions, except per share data)
$
86.1
$
73.7
$
84.0
$
118.0
$
69.6
$
66.1
$
66.5
$
99.5
43.3
34.5
40.0
60.8
33.7
32.0
31.5
52.3
8.0
3.5
5.3
10.6
5.3
4.9
3.5
6.3
8.0
3.5
5.3
10.6
0.1
0.2
0.1
6.2
0.41
0.18
0.26
0.53
0.48
0.44
0.34
0.45
0.40
0.17
0.26
0.52
0.30
0.27
0.19
0.32
173
186
193
200
151
157
164
170
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(1)
The results of this quarter include what we believe is the positive
impact of being featured in one segment of a nationally syndicated
television show.
(2)
Gross margin represents net retail sales less cost of merchandise
sold. Amounts presented in the above table are different than those
previously presented on Form 10-Q due to certain reclassifications
made to comply with the current period presentation.
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Payments Due by Fiscal Period as of December 31, 2005
Total
2006
2007
2008
2009
2010
Beyond
(In thousands)
204,793
26,720
27,648
28,070
27,411
25,888
69,056
47,934
47,604
258
70
2
$
252,727
$
74,324
$
27,906
$
28,140
$
27,413
$
25,888
$
69,056
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Build-A-Bear Workshop, Inc.:
Table of Contents
March 15, 2006
Table of Contents
Name
Age
Position(s)
57
Chief Executive Bear and Chairman of the Board
62
President and Chief Operating Officer Bear
46
Chief Financial Bear, Treasurer and Secretary
51
Chief Marketing Bear
43
Chief Workshop Bear
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(c)
Number of securities
(a)
(b)
remaining available for
Number of securities to
Weighted-average
future issuance under equity
be issued upon exercise of
exercise price of
compensation plans
outstanding options,
outstanding options,
(excluding securities
Plan category
warrants and rights
warrants and rights
reflected in column (a)) (1)
768,623
$
14.06
2,711,343
768,623
$
14.06
2,711,343
(1)
The number of securities remaining available for future issuance under
equity compensation plans includes 915,177 shares available for
issuance under our Associate Stock Purchase Plan (ASPP). Shares sold
under our ASPP can be obtained from treasury stock, authorized but
unissued shares or open market purchases of our common stock.
Page
40
41
42
43
44
45
Table of Contents
Build-A-Bear Workshop, Inc.:
March 15, 2006
Table of Contents
(Dollars in thousands, except share and per share data)
December 31,
January 1,
2005
2005
$
90,950
$
67,327
40,157
30,791
6,629
3,792
6,839
5,320
3,232
2,725
147,807
109,955
89,973
75,815
4,518
1,454
1,411
2,356
2,056
$
246,108
$
189,237
$
34,996
$
25,767
15,792
13,966
22,865
16,299
7,508
5,923
81,161
61,955
2,306
2,075
30,687
26,426
586
732
1,011
2,539
201
196
85,259
77,708
46,700
19,386
(151
)
(1,770
)
(1,652
)
(10
)
130,357
95,510
$
246,108
$
189,237
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(Dollars in thousands, except share and per share data)
Fiscal Year
2005
2004
2003
$
358,901
$
300,469
$
213,427
1,976
846
245
932
347
361,809
301,662
213,672
180,373
150,903
115,845
133,921
115,993
81,533
4,812
2,186
3,859
(54
)
(1,710
)
(299
)
(58
)
317,396
268,729
201,179
44,413
32,933
12,493
17,099
12,934
4,875
27,314
19,999
7,618
1,262
1,970
263
455
$
27,314
$
18,474
$
5,193
$
27,314
$
8,519
$
116
$
$
9,955
$
5,077
$
1.38
$
2.30
$
0.53
$
1.35
$
1.07
$
0.43
19,735,067
3,702,365
217,519
20,229,978
18,616,435
17,546,348
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(Dollars in thousands)
Nonredeemable preferred
Additional
Notes
stock
Common
paid-in
Retained
receivable
Unearned
Class A
Class B
Class C
stock
capital
earnings
from officers
compensation
Total
$
24
$
20
$
50
$
5
$
10,820
$
5,001
$
(1,728
)
$
$
14,192
93
(93
)
(1,970
)
(1,970
)
5
5
7,618
7,618
24
20
50
5
10,918
10,649
(1,821
)
19,845
93
(93
)
144
144
(1,262
)
(1,262
)
(10,000
)
(10,000
)
(1
)
4
460
463
(1
)
(539
)
(540
)
1,984
(10
)
1,974
15
25,720
25,735
(24
)
(20
)
(49
)
173
39,072
39,152
19,999
19,999
196
77,708
19,386
(1,770
)
(10
)
95,510
26
(26
)
1,645
1,645
1
2,436
(2,437
)
1
1,670
1,671
4
5,829
5,833
(1
)
(2,410
)
(2,411
)
795
795
27,314
27,314
$
$
$
$
201
$
85,259
$
46,700
$
(151
)
$
(1,652
)
$
130,357
Table of Contents
(Dollars in thousands)
Fiscal Year
2005
2004
2003
$
27,314
$
19,999
$
7,618
17,592
14,948
12,840
(2,035
)
(1,875
)
1,394
3,091
410
526
533
340
97
200
(54
)
795
1,974
(9,366
)
(8,218
)
(1,002
)
(2,804
)
(1,629
)
49
(1,612
)
(1,105
)
(3,397
)
9,229
3,998
4,483
11,912
19,449
9,245
54,642
48,527
31,770
(31,083
)
(16,494
)
(24,917
)
(1,569
)
(1,238
)
(1,918
)
(4,425
)
(200
)
(37,077
)
(17,732
)
(27,035
)
2,742
52
1,671
1,645
144
(10,000
)
25,735
6,058
15,931
23,623
46,726
4,735
67,327
20,601
15,866
$
90,950
$
67,327
$
20,601
$
79
$
15
$
13
$
11,562
$
13,578
$
2,249
$
$
1,262
$
1,970
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Years ended December 31, 2005, January 1, 2005 and January 3, 2004
11
5
5
4
5
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2005, January 1, 2005 and January 3, 2004
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2005, January 1, 2005 and January 3, 2004
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2005, January 1, 2005 and January 3, 2004
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2005, January 1, 2005 and January 3, 2004
2005
2004
2003
$
27,314
$
19,999
$
7,618
489
1,446
(2,758
)
(2,643
)
(243
)
$
25,045
$
18,802
$
7,375
$
1.38
$
2.30
$
0.53
$
1.27
$
2.03
$
0.51
$
1.35
$
1.07
$
0.43
$
1.24
$
1.02
$
0.42
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2005, January 1, 2005 and January 3, 2004
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2005, January 1, 2005 and January 3, 2004
$
122
(40
)
82
(28
)
(54
)
$
2005
2004
$
98,991
$
78,321
19,727
16,932
12,655
10,396
7,250
7,080
5,853
2,819
144,476
115,548
54,503
39,733
$
89,973
$
75,815
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2005, January 1, 2005 and January 3, 2004
$
97
200
(200
)
$
97
(97
)
$
2005
2004
$
6,026
$
5,062
4,572
3,651
$
1,454
$
1,411
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2005, January 1, 2005 and January 3, 2004
2005
2004
$
3,926
$
7,741
4,217
3,525
6,653
2,131
996
569
$
15,792
$
13,966
2005
2004
2003
$
15,770
$
12,432
$
2,795
2,584
2,035
636
780
342
50
(1,757
)
(1,617
)
1,139
(278
)
(258
)
255
$
17,099
$
12,934
$
4,875
2005
2004
2003
$
44,413
$
32,933
$
12,493
35
%
35
%
34
%
15,545
11,527
4,248
1,498
1,155
579
56
252
48
$
17,099
$
12,934
$
4,875
38.5
%
39.3
%
39.0
%
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2005, January 1, 2005 and January 3, 2004
2005
2004
$
4,240
$
3,310
3,210
3,207
380
102
1,173
999
350
509
211
390
9,564
8,517
(6,963
)
(8,162
)
(380
)
(169
)
(7,343
)
(8,331
)
$
2,221
$
186
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2005, January 1, 2005 and January 3, 2004
$
26,720
27,648
28,070
27,411
25,888
69,056
$
204,793
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2005, January 1, 2005 and January 3, 2004
2005
2004
2003
$
27,314
$
19,999
$
7,618
1,262
1,970
263
455
27,314
18,474
5,193
113
195
20
35
101
175
29
50
293
439
41
19
928
1,512
1,525
2,425
$
27,314
$
19,999
$
7,618
$
27,314
$
8,519
$
116
$
$
9,955
$
5,077
19,735,067
3,702,365
217,519
7,805,238
9,527,412
19,735,067
3,702,365
217,519
420,280
556,545
377,528
74,631
205,845
94,893
20,229,978
4,464,755
689,940
1,203,221
1,400,096
148,017
171,679
1,016,444
1,182,744
217,641
253,260
1,122,950
1,306,688
226,182
275,352
1,193,595
1,453,072
255,467
311,003
1,318,130
1,604,680
4,084,723
4,998,089
3,365,310
3,899,745
14,151,680
16,856,408
20,229,978
18,616,435
17,546,348
$
1.38
$
2.30
$
0.53
$
$
1.28
$
0.53
$
1.35
$
1.07
$
0.43
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2005, January 1, 2005 and January 3, 2004
Weighted
Weighted Average
Number of
Average
Fair Value
Shares
Exercise Price
at Grant Date
859,815
$
3.77
271,484
9.10
$
2.70
63,750
8.78
1,067,549
4.82
302,234
8.78
8.65
2,000
20.00
5.86
268,912
2.05
63,463
8.05
1,039,408
6.52
218,292
32.73
17.20
475,970
5.76
13,107
28.87
768,623
14.06
609,139
2.91
1,037,408
6.50
732,623
13.59
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2005, January 1, 2005 and January 3, 2004
Options Outstanding
Options Exercisable
Weighted Average
Weighted
Weighted
Range of
Number
Remining Contractual
Average
Number
Average
Exercise Prices
Outstanding
Life (in Years)
Exercise Price
Exercisable
Exercise Price
80,000
4.3
$
0.47
80,000
$
0.47
113,000
4.3
6.09
113,000
6.09
366,063
6.8
8.89
366,063
8.89
36,000
9.6
23.43
1,000
20.00
173,560
9.2
34.48
172,560
34.51
768,623
6.8
14.06
732,623
13.59
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2005, January 1, 2005 and January 3, 2004
$
1,161
310
163
18
$
1,652
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2005, January 1, 2005 and January 3, 2004
Series of
Defined
Defined
Shares Issued and
Liquidation
Preferred
Liquidation
Cumulative
Outstanding as of
Preference as of
Stock
Rights
Dividends
January 3, 2004
January 3, 2004
(in thousands)
$
2.451890
0.171632
1,137,898
$
3,522
3.556556
0.248959
139,981
629
2.600746
0.182052
961,263
3,156
3.484283
0.243900
205,824
905
5.649780
0.395485
1,061,986
7,575
1.808051
0.000000
275,352
498
1.720493
0.000000
1,453,072
2,500
2.305925
0.000000
311,003
717
3.739067
0.000000
1,604,680
6,000
0.105315
0.000000
3,418,306
360
0.973290
0.000000
1,385,507
1,349
0.720934
0.000000
194,276
140
6.100000
0.427000
3,467,337
24,471
15,616,485
$
51,822
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2005, January 1, 2005 and January 3, 2004
Redeemable Preferred Stock
Nonredeemable Preferred Stock
Common
Class A
Class B
Class D
Class A
Class B
Class C
Stock
1,061,986
1,604,680
3,467,337
2,444,966
2,039,427
4,998,089
533,316
(48,964
)
268,912
(61,463
)
330
(1,061,986
)
(1,604,680
)
(3,467,337
)
(2,444,966
)
(2,039,427
)
(4,949,125
)
17,316,689
1,500,000
19,557,784
84,823
475,970
(80,868
)
82,946
20,120,655
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2005, January 1, 2005 and January 3, 2004
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2005, January 1, 2005 and January 3, 2004
Licensing &
Retail
International
Entertainment
Total
213,427
245
213,672
14,261
(1,768
)
12,493
125,131
2,920
159
128,210
24,839
78
24,917
12,791
49
12,840
300,469
846
347
301,662
33,796
(990
)
127
32,933
185,371
3,338
628
189,337
16,545
49
16,594
14,438
510
14,948
358,901
1,976
932
361,809
43,764
119
530
44,413
235,754
9,279
1,075
246,108
30,987
46
50
31,083
17,039
552
1
17,592
United States
of America
Canada
Other
Total
210,552
2,875
245
213,672
71,619
2,016
73,635
293,473
7,343
846
301,662
73,780
2,135
75,915
346,819
13,014
1,976
361,809
86,564
3,360
49
89,973
Table of Contents
Exhibit
Number
Description
Agreement and Plan of Merger dated April 3, 2000 between
Build-A-Bear Workshop, L.L.C. and the Registrant (incorporated
by reference from Exhibit 2.1 to our Registration Statement on
Form S-1, filed on August 12, 2004, Registration No. 333-118142)
Third Amended and Restated Certificate of Incorporation
(incorporated by reference from Exhibit 3.1 of our Current
Report on Form 8-K, filed on November 11, 2004)
Amended and Restated Bylaws (incorporated by reference from
Exhibit 3.4 to our Registration Statement on Form S-1, filed on
August 12, 2004, Registration No. 333-118142)
Specimen Stock Certificate (incorporated by reference from
Exhibit 4.1 to Amendment No. 3 to our Registration Statement on
Form S-1, filed on October 1, 2004, Registration No. 333-118142)
Stock Purchase Agreement by and among the Registrant, Catterton
Partners IV, L.P., Catterton Partners IV Offshore, L.P. and
Catterton Partners IV Special Purpose, L.P. and the Purchasers
named therein dated as of April 3, 2000 (incorporated by
reference from Exhibit 4.2 to our Registration Statement on Form
S-1, filed on August 12, 2004, Registration No. 333-118142)
Stock Purchase Agreement by and among the Registrant and the
other Purchasers named therein dated as of September 21, 2001
(incorporated by reference from Exhibit 4.3 to our Registration
Statement on Form S-1, filed on August 12, 2004, Registration
No. 333-118142)
Amended and Restated Registration Rights Agreement, dated
September 21, 2001 by and among Registrant and certain
stockholders named therein (incorporated by reference from
Exhibit 4.5 to our Registration Statement on Form S-1, filed on
August 12, 2004, Registration No. 333-118142)
Build-A-Bear Workshop, Inc. 2000 Stock Option Plan (incorporated
by reference from Exhibit 10.1 to our Registration Statement on
Form S-1, filed on August 12, 2004, Registration No. 333-118142)
Form of Incentive Stock Option Agreement under the Build-A-Bear
Workshop, Inc. 2000 Stock Option Plan (incorporated by reference
from Exhibit 10.1.1 to Pre-Effective Amendment No. 3 to our
Registration Statement on Form S-1, filed on October 1, 2004,
Registration No. 333-118142)
Form of Nonqualified Stock Option Agreement under the
Build-A-Bear Workshop, Inc. 2000 Stock Option Plan (incorporated
by reference from Exhibit 10.1.2 to Pre-Effective Amendment No.
3 to our Registration Statement on Form S-1, filed on October 1,
2004, Registration No. 333-118142)
Build-A-Bear Workshop, Inc. 2002 Stock Incentive Plan, as
amended (incorporated by reference from Exhibit 10.2 to our
Registration Statement on Form S-1, filed on August 12, 2004,
Registration No. 333-118142)
Form of Manager-Level Incentive Stock Option Agreement under the
Build-A-Bear Workshop, Inc. 2002 Stock Option Plan (incorporated
by reference from Exhibit 10.2.1 to Pre-Effective Amendment No.
3 to our Registration Statement on Form S-1, filed on October 1,
2004, Registration No. 333-118142)
Form of Nonqualified Stock Option Agreement under the
Build-A-Bear Workshop, Inc. 2002 Stock Option Plan (incorporated
by reference from Exhibit 10.2.2 to Pre-Effective Amendment No.
3 to our Registration Statement on Form S-1, filed on October 1,
2004, Registration No. 333-118142)
Build-A-Bear Workshop, Inc. 2004 Stock Incentive Plan
(incorporated by reference from Exhibit 10.3 to Pre-Effective
Amendment No. 3 to our Registration Statement on Form S-1, filed
on October 1, 2004, Registration No. 333-118142)
Form of Incentive Stock Option Agreement under the Build-A-Bear
Workshop, Inc. 2004 Stock Incentive Plan (incorporated by
reference from Exhibit 10.3.1 to Pre-Effective Amendment No. 3
to our Registration Statement on Form S-1, filed on October 1,
2004, Registration No. 333-118142)
Form of Director Nonqualified Stock Option Agreement under the
Build-A-Bear Workshop, Inc. 2004 Stock Incentive Plan
(incorporated by reference from Exhibit 10.3.2 to Pre-Effective
Amendment No. 3 to our Registration Statement on Form S-1, filed
on October 1, 2004, Registration No. 333-118142)
Model Incentive Stock Option Agreement Under the Registrants
2004 Stock Incentive Plan (incorporated by reference from
Exhibit 10.3.3 to Pre-Effective Amendment No. 5 to our
Registration Statement on Form S-1, filed on October 12, 2004,
Registration No. 333-118142)
Table of Contents
Exhibit
Number
Description
Form of Employee Nonqualified Stock Option Agreement under the
Registrants 2004 Stock Incentive Plan (incorporated by
reference from Exhibit 10.3.4 to Pre-Effective Amendment No. 5
to our Registration Statement on Form S-1, filed on October 12,
2004, Registration No. 333-118142)
Form of the Restricted Stock Agreement under the Registrants
2004 Stock Incentive Plan (incorporated by reference from
Exhibit 10.3.5 to Pre-Effective Amendment No. 5 to our
Registration Statement on Form S-1, filed on October 12, 2004,
Registration No. 333-118142)
Employment, Confidentiality and Noncompete Agreement dated May
1, 2004 between Maxine Clark and the Registrant (incorporated by
reference from Exhibit 10.4 to Pre-Effective Amendment No. 2 to
our Registration Statement on Form S-1, filed on September 20,
2004, Registration No. 333-118142)
First Amendment dated February 22, 2006 to the Employment,
Confidentiality and Noncompete Agreement dated May 1, 2004
between Maxine Clark and the Registrant
Employment, Confidentiality and Noncompete Agreement dated April
13, 2004 between Barry Erdos and the Registrant (incorporated by
reference from Exhibit 10.5 to Pre-Effective Amendment No. 2 to
our Registration Statement on Form S-1, filed on September 20,
2004, Registration No. 333-118142)
First Amendment dated February 22, 2006 to the Employment,
Confidentiality and Noncompete Agreement dated April 13, 2004
between Barry Erdos and the Registrant
Employment, Confidentiality and Noncompete Agreement dated March
7, 2004 between Tina Klocke and the Registrant (incorporated by
reference from Exhibit 10.6 to Pre-Effective Amendment No. 2 to
our Registration Statement on Form S-1, filed on September 20,
2004, Registration No. 333-118142)
First Amendment dated February 22, 2006 to the Employment,
Confidentiality and Noncompete Agreement dated March 7, 2004
between Tina Klocke and the Registrant
Employment, Confidentiality and Noncompete Agreement dated July
9, 2001 between John Burtelow and the Registrant (incorporated
by reference from Exhibit 10.7 to Pre-Effective Amendment No. 2
to our Registration Statement on Form S-1, filed on September
20, 2004, Registration No. 333-118142)
First Amendment dated March 28, 2005 to Employment,
Confidentiality and Noncompete Agreement dated July 9, 2001
between John Burtelow and the Registrant (incorporated by
reference from Exhibit 10.1 to our Current Report on Form 8-K,
filed on April 1, 2005)
Employment, Confidentiality and Noncompete Agreement dated as of
March 7, 2004 between Scott Seay and the Registrant
(incorporated by reference from Exhibit 10.8 to Pre-Effective
Amendment No. 2 to our Registration Statement on Form S-1, filed
on September 20, 2004, Registration No. 333-118142)
First Amendment dated February 22, 2006 to the Employment,
Confidentiality and Noncompete Agreement dated March 7, 2004
between Scott Seay and the Registrant
Employment, Confidentiality and Noncompete Agreement dated
September 10, 2001 between Teresa Kroll and the Registrant
(incorporated by reference from Exhibit 10.9 to Pre-Effective
Amendment No. 2 to our Registration Statement on Form S-1, filed
on September 20, 2004, Registration No. 333-118142)
First Amendment dated February 22, 2006 to the Employment,
Confidentiality and Noncompete Agreement dated September 10,
2001 between Teresa Kroll and the Registrant
Form of Indemnification Agreement between the Registrant and its
directors and executive officers (incorporated by reference from
Exhibit 10.11 to our Registration Statement on Form S-1, filed
on August 12, 2004, Registration No. 333-118142)
Third Amendment to Loan Documents among the Registrant, Shirts
Illustrated, LLC, Build-A-Bear Workshop Franchise Holdings,
Inc., Build-A-Bear Entertainment, LLC, Build-A-Bear Retail
Management, LLC (incorporated by reference from Exhibit 10.12 to
our Registration Statement on Form S-1, filed on August 12,
2004, Registration No. 333-118142)
Third Amended and Restated Loan Agreement between the
Registrant, Shirts Illustrated, LLC, Build-A-Bear Workshop
Franchise Holdings, Inc., Build-A-Bear Entertainment, LLC, and
Build-A-Bear Retail Management, Inc., as borrowers, and U.S.
Bank National Association, as Lender, entered into on September
27, 2005 with an effective date of May 31, 2005 (incorporated by
reference from Exhibit 10.1 to our Current Report on Form 8-K,
filed on October 3, 2005)
Second Amended and Restated Revolving Credit Note dated May 31,
2005 by the Registrant, Shirts Illustrated, LLC, Build-A-Bear
Workshop Franchise Holdings, Inc., Build-A-Bear Entertainment,
LLC, and Build-A-Bear Retail Management, Inc., as Borrowers, in
favor of U.S. Bank National Association (incorporated by
reference from Exhibit 10.2 to our Current Report on Form 8-K,
filed on October 3, 2005)
Restricted Stock Purchase Agreement dated April 3, 2000 by and
between Maxine Clark and the Registrant (incorporated by
reference from Exhibit 10.16 to our Registration Statement on
Form S-1, filed on August 12, 2004, Registration No. 333-118142)
Secured Promissory Note of Maxine Clark in favor of the
Registrant, dated April 3, 2000 (incorporated by reference from
Exhibit 10.17 to our Registration Statement on Form S-1, filed
on August 12, 2004, Registration No. 333-118142)
Table of Contents
Exhibit
Number
Description
Repayment and Stock Pledge Agreement dated April 3, 2000 by and
between Maxine Clark and the Registrant (incorporated by
reference from Exhibit 10.18 to our Registration Statement on
Form S-1, filed on August 12, 2004, Registration No. 333-118142)
Restricted Stock Purchase Agreement dated September 19, 2001 by
and between Tina Klocke and the Registrant (incorporated by
reference from Exhibit 10.22 to our Registration Statement on
Form S-1, filed on August 12, 2004, Registration No. 333-118142)
Secured Promissory Note of Tina Klocke in favor of the
Registrant, dated September 19, 2001 (incorporated by reference
from Exhibit 10.23 to our Registration Statement on Form S-1,
filed on August 12, 2004, Registration No. 333-118142)
Repayment and Stock Pledge Agreement dated September 19, 2001 by
and between Tina Klocke and the Registrant (incorporated by
reference from Exhibit 10.24 to our Registration Statement on
Form S-1, filed on August 12, 2004, Registration No. 333-118142)
Public Warehouse Agreement dated April 5, 2002 between the
Registrant and JS Logistics, Inc., as amended (incorporated by
reference from Exhibit 10.25 to our Registration Statement on
Form S-1, filed on August 12, 2004, Registration No. 333-118142)
Second Amendment dated June 16, 2005 to the Public Warehouse
Agreement dated April 5, 2002 between the Registrant and JS
Warehousing, Inc. (incorporated by reference from Exhibit 10.2
to our Quarterly Report on Form 10-Q for the fiscal quarter
ended on April 2, 2005)
Second Amendment dated June 16, 2005 to the Public Warehouse
Agreement dated April 5, 2002 between the Registrant and JS
Warehousing, Inc. (incorporated by reference from Exhibit 10.2
to our Quarterly Report on Form 10-Q for the fiscal quarter
ended July 2, 2005)
Agreement for Logistics Services dated as of February 24, 2002
by and among the Registrant and HA Logistics, Inc. (incorporated
by reference from Exhibit 10.26 to our Registration Statement on
Form S-1, filed on August 12, 2004, Registration No. 333-118142)
Letter Agreement extending Agreement for Logistics Services
between HA Logistics, Inc. and the Registrant dated March 22,
2005 (incorporated by reference from Exhibit 10.3 to our
Quarterly Report on Form 10-Q for the fiscal quarter ended April
2, 2005)
Letter Agreement extending Agreement for Logistics Services
between HA Logistics, Inc. and the Registrant dated May 3, 2005
(incorporated by reference from Exhibit 10.4 to our Quarterly
Report on Form 10-Q for the fiscal quarter ended April 2, 2005)
Letter Agreement dated June 7, 2005 amending the Agreement for
Logistics Services dated February 24, 2002 by and among the
Registrant and HA Logistics, Inc. (incorporated by reference
from Exhibit 10.1 to our Quarterly Report on Form 10-Q for the
fiscal quarter ended July 2, 2005)
Lease Agreement dated as of June 21, 2001 between the
Registrant and Walt Disney World Co. (incorporated by reference
from Exhibit 2.1 of our Registration Statement on Form S-1,
filed on August 12, 2004, Registration No. 333-118142)
Amendment and Restatement of Sublease dated as of June 14, 2000
by and between NewSpace, Inc. and the Registrant (incorporated
by reference from Exhibit 10.28 to our Registration Statement on
Form S-1, filed on August 12, 2004, Registration No. 333-118142)
Lease dated May 5, 1997 between Smart Stuff, Inc. and Hycel
Partners I, L.P. (incorporated by reference from Exhibit 10.29
to our Registration Statement on Form S-1, filed on August 12,
2004, Registration No. 333-118142)
Agreement dated October 16, 2002 between the Registrant and
Hycel Properties Co., as amended (incorporated by reference from
Exhibit 10.30 to our Registration Statement on Form S-1, filed
on August 12, 2004, Registration No. 333-118142)
Letter Agreement dated September 30, 2003 between the Registrant
and Hycel Properties Co. (incorporated by reference from Exhibit
10.30.1 to Pre-Effective Amendment No. 5 to our Registration
Statement on Form S-1, filed on October 12, 2004, Registration
No. 333-118142)
Construction Management Agreement dated November 10, 2003 by and
between the Registrant and Hycel Properties Co. (incorporated by
reference from Exhibit 10.31 to our Registration Statement on
Form S-1, filed on August 12, 2004, Registration No. 333-118142)
Agreement dated July 19, 2001 between the Registrant and
Adrienne Weiss Company (incorporated by reference from Exhibit
10.32 to our Registration Statement on Form S-1, filed on August
12, 2004, Registration No. 333-118142)
Lease between 5th Midtown LLC and the Registrant dated July 21,
2004 (incorporated by reference from Exhibit 10.33 to
Pre-Effective Amendment No. 1 to our Registration Statement on
Form S-1, filed on September 10, 2004, Registration No.
333-118142)
Exclusive Patent License Agreement dated March 12, 2001 by and
between Tonyco, Inc. and the Registrant (incorporated by
reference from Exhibit 10.34 to Pre-Effective Amendment No. 2 to
our Registration Statement on Form S-1, filed on September 20,
2004, Registration No. 333-118142)
Table of Contents
Exhibit
Number
Description
Standard Form Industrial Building Lease dated August 28, 2004
between First Industrial, L.P. and the Registrant (incorporated
by reference from Exhibit 10.35 to Pre-Effective Amendment No. 4
to our Registration Statement on Form S-1, filed on October 5,
2004, Registration No. 333-118142)
Loan Agreement by and between Amsbra, Ltd., as Borrower, and
Build-A-Bear Workshop Franchise Holdings, Inc., as Lender,
entered into on October 4, 2005 with an effective date of
September 26, 2005 (incorporated by reference from Exhibit 10.1
to our Current Report on Form 8-K, filed on October 11, 2005)
Revolving Credit Note by Amsbra, Ltd., as Borrower, in favor of
Build-A-Bear Workshop Franchise Holdings, Inc., dated as of
September 26, 2005 (incorporated by reference from Exhibit 10.2
to our Current Report on Form 8-K, filed on October 11, 2005)
Debenture dated October 11, 2005 by and between Amsbra, Ltd. and
Build-A-Bear Workshop Franchise Holdings, Inc. (incorporated by
reference from Exhibit 10.3 to our Current Report on Form 8-K,
filed on October 11, 2005)
Facility Construction Agreement dated December 22, 2005 between
the Registrant and Duke Construction Limited Partnership
Real Estate Purchase Agreement
dated December 19, 2005 between Duke Realty Ohio and the Registrant
Description of Board Compensation for Non-Management Directors
effective November 10, 2005 (incorporated by reference from
Exhibit 10.1 from our Current Report on Form 8-K, filed on
November 16, 2005)
Share Purchase Agreement dated March 3, 2006 between the Hamleys
Group Limited, Build-A-Bear Workshop UK Holdings Limited and The
Bear Factory Limited
Sale and Purchase Agreement dated March 3, 2006 between the
Registrant, Build-A-Bear Workshop UK Holdings Limited, the
selling shareholders of Amsbra, Ltd. and Andrew Mackay
Statement regarding computation of earnings per share
(incorporated by reference from Note 12 of the Registrants
audited consolidated financial statements included herein)
Annual Report to Shareholders for the Fiscal Year Ended December
31, 2005 (The Annual Report, except for those portions which are
expressly incorporated by reference in the Form 10-K, is
furnished for the information of the Commission and is not
deemed filed as part of the Form 10-K)
List of Subsidiaries of the Registrant
Consent of KPMG LLP
Rule 13a-14(a)/15d-14(a) certification (pursuant to Section
302 of the Sarbanes-Oxley Act of 2002, executed by the Chief
Executive Bear)
Rule 13a-14(a)/15d-14(a) certification (pursuant to Section
302 of the Sarbanes-Oxley Act of 2002, executed by the Chief
Financial Bear)
Section 1350 Certification (pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, executed by the Chief Executive
Bear)
Section 1350 Certification (pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, executed by the Chief Financial
Bear)
*
Management contract or compensatory plan or arrangement.
Confidential treatment requested as to certain portions filed separately with the
Securities and Exchange Commission
Table of Contents
BUILD-A-BEAR WORKSHOP, INC.
(Registrant)
Date: March 15, 2006
By:
/s/ Maxine Clark
Maxine Clark
Chief Executive Bear
By:
/s/ Tina Klocke
Tina Klocke
Chief Financial Bear, Treasurer and Secretary
Signatures
Title
Date
Director
March 15, 2006
Director
March 15, 2006
Director
March 15, 2006
Director
March 15, 2006
Director
March 15, 2006
Table of Contents
Signatures
Title
Date
Director
March 15, 2006
Director
March 15, 2006
Director
March 15, 2006
Chief Executive Bear
and Chairman
of the Board
(Principal
Executive Officer)
March 15, 2006
Chief Financial Bear,
Treasurer and
Secretary
(Principal
Financial and
Accounting Officer)
March 15, 2006
1. | Section 3(b) of the Agreement is hereby amended as follows: |
1
2. | Section 3(f) of the Agreement is hereby amended as follows: |
3. | Section 4.1(b) of the Agreement is hereby amended as follows: |
4. | Section 4.1(c) is hereby amended to add the following at the end: |
2
5. | Section 4.1 of the Agreement is hereby amended to add the following at the end: |
6. | Section 4.2(a) of the Agreement is hereby amended as follows: |
7. | Section 4.2(b) of the Agreement is hereby amended as follows: |
8. | Section 4.2(c) of the Agreement is hereby amended as follows: |
3
9. | Section 6(a) of the Agreement is hereby amended as follows: |
10. | The last two (2) sentences of Section 6 of the Agreement are hereby amended as follows: |
4
11. | Section 8(b) of the Agreement is hereby amended as follows: |
12. | Except to the extent expressly provided herein, the Agreement remains in full force and effect, in accordance with its terms. |
MAXINE CLARK
|
BUILD-A-BEAR WORKSHOP, INC. | |
By: /s/ Maxine Clark
|
By: /s/ Tina Klocke | |
|
||
Maxine Clark
|
Tina Klocke | |
|
Chief Financial Bear |
5
1. | Section 3(b) of the Agreement is hereby amended as follows: |
2. | Section 3(g) of the Agreement is hereby amended as follows: |
3. | Section 4.1(b) of the Agreement is hereby amended as follows: |
4. | Section 4.1(c) of the Agreement is hereby amended as follows: |
5. | Section 4.2(b) of the Agreement is hereby amended as follows: |
6. | A new Section 20 is hereby inserted into the Agreement as follows: |
7. | Except to the extent expressly provided herein, the Agreement remains in full force and effect, in accordance with its terms. |
BARRY ERDOS | BUILD-A-BEAR WORKSHOP, INC. | |||||
|
||||||
By:
|
/s/ Barry Erdos | By: | /s/ Maxine Clark | |||
|
Barry Erdos | Maxine Clark | ||||
|
Chief Executive Bear |
1. | Section 3(b) of the Agreement is hereby amended as follows: |
1
2. | Section 3(f) of the Agreement is hereby amended as follows: |
3. | Section 4 of the Agreement is hereby amended as follows: |
2
4.2 | Impact of Termination. |
4. | Except to the extent expressly provided herein, the Agreement remains in full force and effect, in accordance with its terms. |
3
TINA KLOCKE | BUILD-A-BEAR WORKSHOP, INC. | |||||
|
||||||
By:
|
/s/ Tina Klocke | By: | /s/ Maxine Clark | |||
|
Tina Klocke | Maxine Clark | ||||
|
Chief Executive Bear |
4
1
2. | Section 3(f) of the Agreement is hereby amended as follows: | |
Other. Employee shall be eligible for such other perquisites as may from time to time be awarded to Employee by Company payable at such times and in such amounts as Company, in its sole discretion, may determine. All such compensation shall be subject to customary withholding taxes and other employment taxes as required with respect thereto. Employee shall also qualify for all rights and benefits for which Employee may be eligible under any benefit plans including group life, medical, health, dental and/or disability insurance or other benefits (Welfare Benefits) which are provided for employees generally at his then current location of employment. Employee may, in his sole discretion, decline any perquisite, proposed annual salary increase, or bonus payment. | ||
3. | Section 4 of the Agreement is hereby amended as follows: | |
4. | Termination of Employment. | |
4.1 | Termination Events. Prior to the expiration of the Employment Period, this Agreement and Employees employment may be terminated as follows: |
2
5. | Except to the extent expressly provided herein, the Agreement remains in full force and effect, in accordance with its terms. |
3
ROBERT SCOTT SEAY | BUILD-A-BEAR WORKSHOP, INC. | |||||
|
||||||
By:
|
/s/ Robert Scott Seay | By: | /s/ Maxine Clark | |||
|
||||||
|
Robert Scott Seay | Maxine Clark | ||||
|
Chief Executive Bear |
4
1. | Section 3(c) of the Agreement is hereby amended as follows: |
1
2. | Section 3(i) of the Agreement is hereby amended as follows: |
3. | Section 4 of the Agreement is hereby amended as follows: |
2
5. | Except to the extent expressly provided herein, the Agreement remains in full force and effect, in accordance with its terms. |
3
TERESA KROLL | BUILD-A-BEAR WORKSHOP, INC. | |||||||||
|
||||||||||
By:
|
/s/ Teresa Kroll | By: | /s/ Maxine Clark | |||||||
|
Teresa Kroll | Maxine Clark | ||||||||
|
Chief Executive Bear |
4
|
Document A141 TM 2004 |
Init. |
AIA Document A141 2004, Copyright
©
2004 by The American Institute of Architects,
All
rights reserved.
WARNING: This AIA
®
Document is protected by U.S. Copyright Law and International
Treaties. Unauthorized reproduction or distribution of this AIA
®
Document, or any portion of it,
may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent
possible under the law. This document was produced by AIA software at 16:37:14 on
12/19/2005 under Order No. 1000164015_2 which expires on
2/18/2006, and is not for resale.
User Notes: |
1
1 | THE DESIGN-BUILD DOCUMENTS | |
2 | WORK OF THIS AGREEMENT | |
3 | DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION | |
4 | CONTRACT SUM | |
5 | PAYMENTS | |
6 | DISPUTE RESOLUTION | |
7 | MISCELLANEOUS PROVISIONS | |
8 | ENUMERATION OF THE DESIGN-BUILD DOCUMENTS |
A | TERMS AND CONDITIONS | |
B | DETERMINATION OF THE COST OF THE WORK | |
C | INSURANCE AND BONDS |
Init. |
AIA Document A141 2004. Copyright
©
2004 by The American Institute of Architects.
All
rights reserved.
WARNING: This AIA
®
Document is protected by U.S. Copyright Law and
International Treaties. Unauthorized reproduction or distribution of
this AIA
®
Document, or
any portion of it, may result in severe civil and criminal penalties, and will be prosecuted
to the maximum extent possible under the law. This document was produced by AIA software at
16:37:14 on 12/19/2005 under Order No. 1000164015_2 which expires on 2/18/2006, and is not for
resale.
User Notes: |
2
Portion of Work |
Substantial Completion Date
|
[ X ] Stipulated Sum in accordance with Section 4.2 below; | |||
[ ] Cost of the Work Plus Design-Builders Fee in accordance with Section 4.3 below; | |||
[ ] Cost of the Work Plus Design-Builders Fee with a Guaranteed Maximum Price in accordance with Section 4.4 below. |
Description
|
Units | Price($0.00) |
Init. |
AIA Document
A141
TM
2004.
Copyright
©
2004 by The American Institute of Architects.
All rights
reserved.
WARNING: This
AIA
®
Document is protected by U.S. Copyright Law and International
Treaties. Unauthorized reproduction or distribution of this
AIA
®
Document, or any portion of it,
may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent
possible under the law. This document was produced by AIA software at 16:37:14 on
12/19/2005 under Order No.1000164015_2 which expires on 2/18/2006, and is not for resale.
User Notes: |
3
Init. |
AIA Document A141 2004. Copyright
©
2004 by The American Institute of Architects,
All fights
reserved.
WARNING: This AIA
®
Document is protected by U.S. Copyright Law and International
Treaties. Unauthorized reproduction or distribution of this AIA
®
Document, or any portion of it,
may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent
possible under the law. This document was produced by AIA software at 16:37:14 on
12/19/2005 under Order No. 1000164015_2 which expires on 2/18/2006, and is not for resale.
User Notes: |
4
Description
|
Units | Price ($ 0.00) |
Allowance
|
Amount ($ 0.00) | Included Items |
Init. |
AIA Document A141
TM
2004. Copyright
©
2004 by The American Institute of Architects.
All
rights reserved.
WARNING: This AIA
®
Document is protected by U.S. Copyright Law and International
Treaties. Unauthorized reproduction or distribution of this AlA
®
Document, or any portion of it may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent
possible under the law. This document was produced by AIA software at 16:37:14 on
12/19/2005 under Order No.1000164015_2 which expires on 2/18/2006. and is not for resale.
User Notes: |
5
.1 |
Take that portion of the Contract Sum properly allocable to completed Work as determined by
multiplying the percentage completion of each portion of the Work by the share of the Contract Sum allocated to that portion of the Work in the schedule of values, less retainage of (10% ) on the Work, other than services provided by design professionals and other consultants retained directly by the Design-Builder. Pending final determination of cost to the Owner of Changes in the Work, amounts not in dispute shall be included as provided in Section A.7.3.8 of Exhibit A, Terms and Conditions; |
||
.2 | Add that portion of the Contract Sum properly allocable to materials and equipment delivered and suitably stored at the site for subsequent incorporation in the completed construction (or, if approved in advance by the Owner, suitably stored off the site at a location agreed upon in writing), less retainage of ten per cent ( 10% ); | ||
.3 | Subtract the aggregate of previous payments made by the Owner; and | ||
.4 | Subtract amounts, if any, for which the Owner has withheld payment from or nullified an Application for Payment as provided in Section A.9.5 of Exhibit A, Terms and Conditions. |
.1 | add, upon Substantial Completion of the Work, a sum sufficient to increase the total payments to the full amount of the Contract Sum, less such amounts as the Owner shall determine for incomplete Work, retainage applicable to such work and unsettled claims; and | ||
(Section A.9.8.6 of Exhibit A, Terms and Conditions requires release of applicable retainage upon Substantial Completion of Work with consent of surety, if any,) | |||
.2 | add, if final completion of the Work is thereafter materially delayed through no fault of the Design-Builder, any additional amounts payable in accordance with Section A.9.10.3 of Exhibit A, Terms and Conditions. |
Init. |
AIA Document A141 2004. Copyright
©
2004 by The American Institute of Architects.
All tights
reserved.
WARNING: This AIA
®
Document is protected by U.S. Copyright Law and International
Treaties. Unauthorized reproduction or distribution of this AIA
®
Document, or any portion of it,
may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent
possible under the law. This document was produced by AIA software at 16:37:14 on
12/19/2005 under Order No.1000164015_2 which expires on 2/18/2006, and is not for resale.
User Nates: |
6
Init. |
AIA Document A141
TM
- 2004, Copyright
©
2004 by The American Institute of Architects.
All rights
reserved.
WARNING: This AIA
®
Document is protected by U.S. Copyright Law and International
Treaties. Unauthorized reproduction or distribution of this AIA
®
Document, or any portion of it,
may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent
possible under the law. This document was produced by AIA software at 16:37:14 on
12/19/2005 under Order No. 1000164015_2 which expires on 2/18/2006, and is not for resale.
User Notes: |
7
[ X ] Arbitration pursuant to Section A.4.4 of Exhibit A, Terms and Conditions | |||
[ ] Litigation in a court of competent jurisdiction | |||
[ ] Other (Specify) |
Name and Address
|
License Number | Other Information |
Name and Address
|
License Number | Other Information |
Name and Address
|
License Number | Other Information |
Init. |
AIA Document A141
TM
2004. Copyright
©
2004 by The American Institute of Architects.
All
rights reserved.
WARNING: This
AIA
®
Document is protected by U.S. Copyright Law and International
Trealies. Unauthorized reproduction or distribution of this AIA
®
Document, or any portion of it,
may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent
possible under the law. This document was produced by AIA software at 16:37:14 on
12/19/2005 under Order No. 1000164015_2 which expires on 2/18/2006, and is not for resale.
User Notes: |
8
Init. |
AIA Document A141 2004. Copyright
©
2004 by The American Institute of Architects.
All rights
reserved.
WARNING: This
AIA
®
Document is protected by U.S. Copyright Law and International
Treaties. Unauthorized reproduction or distribution of this
AIA
®
Document, or any portion of it,
may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent
possible under the law. This document was produced / by AIA software at 16:37:14 on
12/19/2005 under Order No.1000164015_2 which expires on 2/18/2006, and is not for resale.
User Notes: |
9
Build-A-Bear Workshop, Inc.
|
Duke Construction Limited Partnership | |||
|
||||
/s/ Maxine Clark
|
/s/ William J. DeBoer | |||
|
||||
OWNER
(Signature)
|
DESlGN-BUlLDER (Signature) | |||
|
||||
Maxine Clark
|
William J. DeBoer SVP | |||
|
||||
(Printed name and title)
|
(Printed name and title) |
Init. |
AIA Document A141 2004. Copyright
©
2004 by The American Institute of Architects.
All
rights reserved.
WARNING:
This AIA
®
Document is protected by U.S. Copyright Law and International
Treaties. Unauthorized reproduction or distribution of this AIA
®
Document, or any portion of it,
may result in severe civil and criminal penalties, and will be prosecuted to the maximum
extent possible under the law. This document was produced by AIA software at
16:37:14 on 12/19/2005 under Order No.1000164015_2 which expires on 2/18/2006, and is not for
resale.
User Notes: |
10
|
Document A141 2004 Exhibit A |
Init. |
AIA Document A141 2004 Exhibit A.
Copyright
©
2004 by The American Institute of
Architects. All rights reserved. WARNING: This
AIA
®
Document is protected by U.S.
Copyright
®
Law and International Treaties. Unauthorized reproduction or distribution of this AIA
®
Document, or any portion of it, may result in severe civil and criminal penalties, and will be
prosecuted to the maximum extent possible under the law. This document was produced
by AIA software at 09:03:04 on 12/19/2005 under Order No,10001640152 which expires on 2/18/2006,
and is not for resale.
User Notes: DUKE DB-2 12/06/05 |
1
Init. |
AIA Document A41 2004 Exhibit A. Copyright
©
2004 by The American Institute of Architects.
All rights reserved.
WARNING: This AIA
®
Document is protected by U.S. Copyright Law and
International Treaties. Unauthorized reproduction or distribution of
this AIA
®
Document, or any
portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the
maximum extent possible under the law. This document was produced
by AIA software at
09:03:04 on 12/19/2005 under Order No, 1000164015_2 which expires on
2/18/2006, and is not for
resale.
User Notes: DUKE DB-2 12/06/05 |
2
Init. |
AIA Document A141 2004 Exhibit A.
Copyright
©
2004 by The American Institute of Architects.
All rights reserved. WARNING:
This
AIA
®
Document is protected by U.S. Copyright Law and
International Treaties. Unauthorized reproduction or distribution of this AIA
®
Document, or any
portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the
maximum extent possible under the law. This document was produced by AIA software at
09:03:04 on 12/19/2005 under Order No. 1000164015_2 which
expires on 2/18/2006, and is not for
resale.
User Notes: DUKE DB-2 12/06/05 |
3
Init. |
AIA Document A141- 2004 Exhibit A. Copyright
©
2004 by The American Institute of Architects.
All rights reserved.
WARNING: This
AIA
®
Document Is protected by U.S. Copyright Law and
International Treaties. Unauthorized reproduction or distribution of this AIA
®
Document, or any
portion of it,
may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent
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12/19/2005 under Order No. 1000164015_2 which expires on 2/18/2006, and is not for resale.
User Notes: DUKE DB-2 12/06/05 |
4
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
5
.1 | Determine that the documents or submittals are in conformance with the Design-Build Documents and approve them. | ||
.2 | Determine that the documents or submittals are in conformance with the Design-Build Documents but request changes in the documents or submittals which shall be implemented by a Change in the Work. | ||
.3 | Determine that the documents or submittals are not in conformity with the Design-Build Documents and reject them. | ||
.4 | Determine that the documents or submittals are not in conformity with the Design-Build Documents, but accept them by implementing a Change in the Work. |
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
|
6
.5 | Determine that the documents or submittals are not in conformity with the Design-Build Documents, but accept them and request changes in the documents or submittals which shall be implemented by a Change in the Work. |
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
7
.1 | be consistent with the approved design documents; | ||
.2 | provide information for the use of those in the building trades; and | ||
.3 | include documents customarily required for regulatory agency approvals. |
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
8
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
9
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
10
.1 | allowances shall cover the Cost to the Design-Builder of materials and equipment delivered at the site and all required taxes, less applicable trade discounts; | ||
.2 | Design-Builders costs for unloading and handling at the sits, labor, installation costs, overhead, profit and other expenses contemplated for stated allowance amounts shall be included in the Contract Sum but not in the allowances; and | ||
.3 | whenever costs are more than or less than allowances, the Contract Sum shall be adjusted accordingly by Change Order. The amount of the Change Order shall reflect (1) the difference between actual costs and the allowances under Section A.3.8.2.1 and (2) changes in Design-Builders costs under Section A.3.8.2.2. |
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
11
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
12
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
13
1 | damages incurred by the Owner for rental expenses, for losses of use, income, profit, financing, business and reputation, and for loss of management or employee productivity or of the services of such persons; and | ||
2 | damages incurred by the Design-Builder for principal office expenses including the compensation of personnel stationed there, for losses of financing, business and reputation, and for loss of profit except anticipated profit arising directly from the Work. |
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
14
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
15
.1 | assignment is effective only after termination of the Design-Build Contract by the Owner for cause pursuant to Section A. 14.2 and only for those agreements which the Owner accepts by notifying the contractor in writing; and | ||
.2 | assignment is subject to the prior tights of the surety, if any, obligated under bond relating to the Design-Build Contract. |
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
16
.1 | a change in the Work; | ||
.2 | the amount of the adjustment, if any, in the Contract Sum; and | ||
.3 | the extent of the adjustment, if any, in the Contract Time. |
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
17
.1 | mutual acceptance of a lump sum properly itemized and supported by sufficient substantiating data to permit evaluation; | ||
.2 | unit prices stated in the Design-Build Documents or subsequently agreed upon, or equitably adjusted as provided in Section A.4.1.9; | ||
.3 | cost to be determined in a manner agreed upon by the parties and a mutually acceptable fixed or percentage fee; or | ||
.4 | as provided in Section A.7.3.6. |
.1 | additional costs of professional services; | ||
.2 | costs of labor, including social security, old age and unemployment insurance, fringe benefits required by agreement or custom, and workers compensation insurance; | ||
.3 | costs of materials, supplies and equipment, including cost of transportation, whether incorporated or consumed; | ||
.4 | rental costs of machinery and equipment, exclusive of hand tools, whether rented from the Design-Builder or others; | ||
.5 | cose of premiums for all bonds and insurance, permit fees, and sates, use or similar taxes related to the Work; and |
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
18
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
19
.1 | defective Work not remedied; | ||
.2 | third-party claims filed or reasonable evidence indicating probable filing of such claims unless security acceptable to the Owner is provided by the Design-Builder; | ||
.3 | failure of the Design-Builder to make payments properly to Contractors or for design services labor, materials or equipment; | ||
.4 | reasonable evidence that the Work cannot be completed for the unpaid balance of the Contract Sum; | ||
.5 | damage to the Owner or a separate contractor; | ||
.6 | reasonable evidence that the Work will not be completed within the Contract Time and that the unpaid balance would not be adequate to cover actual or liquidated damages for the anticipated delay; or | ||
.7 | persistent failure to carry out the Work in accordance with the Design-Build Documents. |
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
20
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
21
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
22
.1 | liens, Claims, security interests or encumbrances arising out of the Design-Build Documents and unsettled; | ||
.2 | failure of the Work to comply with the requirements of the Design-Build Documents; or | ||
.3 | terms of special warranties required by the Design-Build Documents. |
.1 | employees on the Work and other persons who may be affected thereby; | ||
.2 | the Work and materials and equipment to be incorporated therein, whether in storage on or off the site or under the care, custody or control of the Design-Builder or the Design-Builders Contractors or Subcontractors; and | ||
.3 | other property at the site or adjacent thereto, such as trees, shrubs, lawns, walks, pavements, roadways, structures and utilities not designated for removal, relocation or replacement in the course of construction. |
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
23
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
24
.1 | claims under workers compensation, disability benefit and other similar employee benefit acts which are applicable to the Work to be performed; | ||
.2 | claims for damages because of bodily injury, occupational sickness or disease, or death of the Design-Builders employees; | ||
.3 | claims for damages because of bodily injury, sickness or disease, or death of any person other than the Design-Builders employees; | ||
.4 | claims for damages insured by usual personal injury liability coverage; | ||
.5 | claims for damages, other than to the Work itself, because of injury to or destruction of tangible properly, including loss of use resulting therefrom; | ||
.6 | claims for damages because of bodily injury, death of a person or property damage arising out of ownership, maintenance or use of a motor vehicle; | ||
.7 | claims for bodily injury or property damage arising out of completed operations; and | ||
.8 | claims involving contractual liability insurance applicable to the Design-Builders obligations under Section A.3.17. |
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
25
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
26
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
27
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
28
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
29
.1 | Before Substantial Completion. As to acts or failures to act occurring prior to the relevant date of Substantial Completion, any applicable statute of limitations shall commence to run and any alleged cause of action shall be deemed to have accrued in any and all events not later than such date of Substantial Completion; | ||
.2 | Between Substantial Completion and Final Application for Payment. As to acts or failures to act occurring subsequent to the relevant date of Substantial Completion and prior to issuance of the final Application for Payment, any applicable statute of limitations shall commence to run and any alleged cause of action shall be deemed to have accrued in any and all events not later than the date of issuance of the final Application for Payment; and | ||
.3 | After Final Application for Payment. As to acts or failures to act occurring after the relevant date of issuance of the final Application for Payment, any applicable statute of limitations shall commence to run and any alleged cause of action shall be deemed to have accrued in any and all events not later than the date of any act or failure to act by the Design-Builder pursuant to any Warranty provided under Section A.3.5, the date of any correction of the Work or failure to correct the Work by the Design-Builder under Section A. 12.2, or the dale of actual commission of any other act or failure to perform any duty or obligation by the Design-Builder or Owner, whichever occurs last. |
.1 | issuance of an order of a court or other public authority having jurisdiction which requires alt Work to be stopped; | ||
.2 | an act of government, such as a declaration of national emergency which requires all Work to be stopped; | ||
.3 | the Owner has failed to make payment to the Design-Builder in accordance with the Design-Build Documents; or | ||
.4 | the Owner has failed to furnish to the Design-Builder promptly, upon the Design-Builders request, reasonable evidence as required by Section A.2.2.8. |
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
30
.1 | persistently or repeatedly refuses or fails to supply enough properly skilled workers or proper materials; | ||
.2 | fails to make payment to Contractors for services, materials or labor in accordance with the respective agreements between the Design-Builder and the Architect and Contractors; | ||
.3 | persistently disregards laws, ordinances or rules, regulations or orders of a public authority having jurisdiction; or | ||
.4 | otherwise is guilty of substantial breach of a provision of the Design-Build Documents. |
.1 | take possession of the site and of all materials and equipmentpurchased for the Project; | ||
.2 | accept assignment of contracts pursuant to Section A.5.5.1; and | ||
.3 | finish the Work by whatever reasonable method the Owner may deem expedient. Upon request of the Design-Builder, the Owner shall furnish to the Design-Builder a detailed accounting of the costs incurred by the Owner in finishing the Work. |
.1 | that performance is, was or would have been so suspended, delayed or interrupted by another cause for which the Design-Builder is responsible; or | ||
.2 | that an equitable adjustment is made or denied under another provision of the Design-Build Contract. |
.1 | cease operations as directed by the Owner in the notice; | ||
.2 | take actions necessary, or that the Owner may direct, for the protection and preservation of the Work; and | ||
.3 | except for Work directed to be performed prior to the effective date of termination stated in the notice, terminate all existing contracts and purchase orders and enter into no further contracts and purchase orders. |
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
31
Init. |
AIA Document
A141
TM
2004 Exhibit A.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 09:03:04 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
32
Init. |
AIA Document
A141
TM
2004 Exhibit C.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 08:56:34 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
1
Workers Compensation. | Statutory limits. | |
Employers Liability covering all employees,
|
$1,000,000 each accident. | |
volunteers, temporary employees and leased workers.
|
$1,000,000 disease each employee, and $1,000,000 disease policy limits. | |
|
||
Commercial General Liability for bodily injury
and property damage including personal injury,
premises/operations, broad form property
damage, independent contractors, products
and completed operations (with limits of
$3,000,000 and coverage for a minimum
period of two (2) years after Substantial
Completion), and deletion of exclusions
pertaining to (1) explosion, collapse, shoring
grading and underground property damage
hazards, (2) damages or injury arising from
defective Work, including costs to repair or
replace damaged Work, and (3) contractual
liability coverage. (The Commercial General
Liability insurance may be arranged under a
single policy for the full limits required or by a
combination of underlying policies with the balance
provided by an Excess or Umbrella Liability Policy.)
|
$3,000,000 combined single limit for bodily injury and property damage. | |
|
||
Commercial Automobile Liability, including owned
non-owned and hired car coverages.
|
$1,000,000 combined single limit for bodily injury and property damage. | |
|
||
Professional Liability, with retroactive coverage
for prior acts, to be provided by the Design-Builders design professionals and not by the
Design-Builder.
|
$1,000,000 annual aggregate limit with not more than a $100,000 deductible. |
Type
|
Penal Sum ($0.00) |
Init. |
AIA Document
A141
TM
2004 Exhibit C.
Copyright
© 2004 by The American
institute of Architects.
All rights reserved.
WARNING: This AIA ® Document is Protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA ® Document or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 08:56:34 on 12/19/2005 under Order No. 100016401 5_2 which expires on 2/18/2006, and is not for resale. User Notes: DUKE DB-2 12/06/05 |
2
1) | Eighty (80) pipe bollards | ||
2) | One (1) roof access ladder with safety cage. | ||
3) | One (1) drive-in door pipe sills | ||
4) | Thirty one (31) pit type dock leveler frames |
|
Dock Levelers: | Thirty (30) total | ||
|
Based on Poweramp CM Series or approved equal | |||
|
Size: 6 x 8 | |||
|
Capacity: 30,000 Ibs, Mechanically operated | |||
|
||||
|
Truck Restraints: | Thirty (30) total | ||
|
With restraining capacity of 32,000 pounds. | |||
|
||||
|
Dock Bumpers: | Two (2) at each door (4 bumper) for a total of sixty two (60) | ||
|
||||
|
Dock Shelters: | Thirty (30) total | ||
|
Size: 9 x 10 with fixed head pad |
1) | Brass ESFR K-14 sprinklers installed throughout all exposed structure areas except for the office area. | ||
2) | All systems shall be hydraulically designed and installed per NFPA 13. Warehouse Area ESFR: 12 sprinklers @ 75 PSI |
Electrical scope of work shall include: | ||||
Duke Base Building Shell | ||||
Primary |
| (2) 5 SCH, 40 conduit (850) | |
| (850) Trenching and backfill for utility primary utility conduits | |
| Utility transformer pad | |
| Utility manhole |
| (300) (2) 4 SCH. 40 PVC empty conduits and trenching/ backfill from building to property line at two locations | |
| (1) 4x8 telephone backboard with grounding and dedicated 20amp 120vac. circuit. |
| (1) 400 Amp 277/480V, 3PH, 4W cable and duct systems | |
| Trenching and backfill | |
| (1) Utility metering and service grounds | |
| (1) 400amp 480vac., 3-phase service disconnect |
| (2) 400amp 480/277V, 3PH, 4W panel boards to serve Warehouse equipment and lighting |
| (4) 50 HP. Make-up Air Unit connections | |
| (4) RTU receptacles |
| (330) 2x4 fluorescent electronic ballast with T5 lamps to meet 30 foot-candles average maintained in warehouse based on an open floor plan. (Breaker switched). | |
| (30) Exit signs with self contained battery, at each perimeter exit door. Emergency/exit lighting installed per code, based on an un-occupied space. |
| (2) 1-head 400W metal halide pole assemblies complete with 24dla. 36 above grade pole bases in the employee parking area. | |
| (4) 2-head 400W metal halide pole assemblies complete with 24dia. 36 above grade pole bases in the employee parking area. | |
| (30) 400W metal halide shoe-box type wall mounted fixtures around perimeter of building | |
| Lighting controlled by time clock and photocell | |
| Canopy lighting | |
| 175watt ground mounted floods for the sign and flagpoles |
| (1) Addressable fire alarm monitoring panel | |
| (4) Smoke duct detectors | |
| Flow and tamper switch monitoring | |
| Monitoring is not included |
| (7) 1-head 400W metal halide pole assemblies complete with 24dia. 36 above grade pole bases located in the Trailer Storage |
| (1) 4000 Amp 277/480V, 3PH, 4W cable and duct systems | |
| Trenching and backfill | |
| (1) Utility metering and service ground |
| (1) 4000amp main 480vac. 3-phase 4-wire switchboard | |
| (10) 400amp 480/277V, 3PH, 4W panel boards to serve Warehouse equipment, Warehouse lighting, Step-down transformers |
| (6) Step-down transformer to serve dock power, office and misc. warehouse 120vac. power | |
| (7) 208/120V, 3PH, 4W panel board to service miscellaneous power loads | |
| See each specialty area for additional distribution |
| (2) 15ton RTU connection (Office) | |
| (2) 5ton RTU connection (Office) | |
|
(1) Battery Charger exhaust connection
|
|
| (2) Toilet exhaust fan connection | |
| (20) Office VAV connections |
| (800) 2x4 fluorescent electronic ballast with T5 lamps to meet 10 foot-candles average maintained in warehouse Reserve Storage, 50fc average maintained in the specialty areas and 30fc. average maintained in the main warehouse corridors | |
| 12-pole lighting contactors to be controlled by the building management system |
| (24) Exit signs | |
| Wiring to the fluorescent hi-bays in the established egress aisles to meet 1fc. minimum. | |
| (1) 50amp 480vac. Transfer Switch and 60amp 480vac. panel board for egress lighting |
| (700) 4-0 T5 2- lamp electronic fluorescent strip fixtures | |
| (2) 8-pole Lighting contactors with single point lighting control |
| (60) 20amp 480vac. battery charger connections | |
| (2) 600amp 480vac. underground feeder | |
| (5) 600amp 480/277V, 3PH, 4W panel boards to serve 480vac.battery charger |
| (10) 15amp 120vac. receptacles | |
| (3) 30amp 208vac. receptacle | |
| (1) 480vac, 30amp disconnect |
| (29) 15amp 120vac. dock receptacles | |
| (29) Dock light units | |
| (12) 15amp 120vac. receptacles for RF and PA systems | |
| (40) 15amp 120vac. column receptacles | |
| (29) Dock restraints connections (restraints provided by others) | |
| (29) Dock leveler connections | |
|
(2) 120vac. overhead door connections
|
|
| Duplex receptacles and voice/data rough-in is not included see below allowance | |
| The above items are to be fed the low voltage distribution defined under the Distribution Section. |
| (3) 200amp 480vac. underground feeder | |
| (2) 300amp 480vac. underground feeder | |
| (1)125amp 480vac. underground trash conveyor connection |
| (1) Baler | |
| (1) Compactor | |
| (3) Shrink Wrap Machines |
Generator & UPS System |
| 240kw Kohler diesel 480/277vac. 3-phase, 4-wire generator with sub base fuel tank sized to run 24hr at full-load | |
| Remote annuciator located at receptionist | |
| Install owner furnished 30KVA UPS System |
| Warehouse and office paging system, single zone. Warehouse speakers to be mounted underside of bar joist |
| Not included |
Winter Conditions:
|
$ | 374,000 | ||
Landscaping:
|
$ | 94,440 | ||
Exterior Signage:
|
$ | 5,000 | ||
Building Signage:
|
$ | 20,000 | ||
Office Allowance(15,000sf x $35/sf):
|
$ | 525,000 |
1) | Factory Mutual or other insurance requirements are excluded. |
2) | Due to the recent escalation in the costs of building materials, this proposal and pricing only remains good until December 31, 2005. If awarded the Contract for this project after that time, Duke Construction will need to verify pricing with all subcontractors and vendors for labor and material rates and adjust the price accordingly. | |
3) | The Schedule dated December 5, 2005 assumes many critical milestones are met in the Project Delivery for Contract Agreements, Project Design Development, Owner Review and Approvals, Zoning, Building Permitting and Work by Others. Delays in any of these items could compromise the completion dates by at least a day for day basis. | |
4) | We have included construction costs and schedule time to accommodate reasonable Winter Conditions. However, severe weather conditions may dictate schedule delays or may require excessive construction costs, that are not included, to overcome the delays. | |
5) | The site will be designed to balance (no import or export of subgrade material is included) and all on-site material is assumed to be suitable for fill areas. All existing topsoil shall remain on-site and will be reused in landscaped areas and earth berms. | |
6) | Rock excavation using standard ripping techniques is included as part of the base proposal. Blasting, rock sawing, or other special excavation techniques are excluded and will be paid via a Change Order to the Contract. | |
7) | We assume that there are no on site contaminates or hazardous materials, so remediation for these are not included. | |
8) | Air compressors, air piping or other process piping is excluded.. | |
9) | Painting of mechanical and electrical piping is excluded. | |
10) | Installation of tenant equipment is excluded. | |
11) | Flexible wiring systems will be utilized in concealed spaces and above the bottom cord of the bar joists in the warehouse areas. | |
12) | Aluminum conductors will be utilized for feeders of 100 amps or larger with the exception of feeders associated with mechanization panels. | |
13) | CCTV, SECURITY AND DOOR CONTACTS not included. |
$
374,000
$
94,440
$
5,000
$
20,000
$
525,000
Architect
mford@fordarchitects.com
Civil Engineer
iwhitacre@advancedcivildesign.com
Landscape Design
Structural Engineer
mpmarinaro@
pegroup.us
Design / Build Fire Protection
Design / Build Mechanical
Design / Build Electrical
|
Seller: | Duke Realty Ohio | ||
|
Attn: Art Makris | |||
|
5600 Blazer Parkway, Suite 100 | |||
|
Dublin, Ohio 43017 | |||
|
Fax No.: (614) 932-6290 | |||
|
||||
|
Copy to: | Duke Realty Corporation | ||
|
Attn: Jodie L. Edminster | |||
|
600 East 96 th Street, Suite 100 | |||
|
Indianapolis, IN 46240 | |||
|
Fax No.: (317) 808-6790 | |||
|
||||
|
Buyer: | Build-A-Bear Workshop, Inc. | ||
|
Attn: Dennis Sheldon | |||
|
1954 Innerbelt Business Center Drive | |||
|
St. Louis, MO 63114 | |||
|
Fax No.: (314) 423-8188 | |||
|
||||
|
Copy to: | Victor H. Lewitt, Esq. | ||
|
Blumenfeld, Kaplan & Sandweiss, P.C. | |||
|
168 N. Meramec Avenue, Suite 400 | |||
|
St. Louis, MO 63105 | |||
|
Fax No.: (314) 863-9388 |
-2-
-3-
-4-
-5-
-6-
|
BUYER | |||||
|
||||||
BUILD-A-BEAR WORKSHOP, INC., | ||||||
|
||||||
|
By: | /s/ Maxine Clark | ||||
|
|
|||||
|
||||||
|
Printed: | Maxine Clark | ||||
|
|
|||||
|
||||||
|
Title: | CEO | ||||
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SELLER: | ||||||
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DUKE REALTY OHIO | ||||||
an Indiana general partnership | ||||||
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By: | Duke Realty Limited Partnership | ||||
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its Managing Partner | |||||
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By: | Duke Realty Corporation | ||||
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its general partner | |||||
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By: | /s/ James T. Clark | ||||
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Senior Vice President | |||||
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Columbus |
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STATE OF
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Missouri | ) | ||||||||
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) | SS: | ||||||||
COUNTY OF
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St. Louis | ) | ||||||||
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My Commission Expires:
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8/4/2008 | |||
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My County of Residence:
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St. Louis | |||
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STATE OF OHIO
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COUNTY OF
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Franklin | ) | ||||||||
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/s/ Aimee DAmore
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Aimee DAmore
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My Commission Expires:
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10-20-2009 | |||
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My County of Residence:
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Franklin | |||
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One Fleet Place
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T +44 (0)20 7242 1212 | |
London EC4M 7WS
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T +44 (0)20 7246 7777 | |
United Kingdom
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info@dentonwildesapte.com | |
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www.dentonwildesapte.com |
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Definitions and interpretation | 1 | ||||
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Sale and purchase | 6 | ||||
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Consideration | 6 | ||||
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4
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Completion Accounts and adjustment payment | 6 | ||||
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Completion arrangements | 8 | ||||
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Discharge of indebtedness | 9 | ||||
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Indemnities | 9 | ||||
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Warranties | 10 | ||||
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Tax | 11 | ||||
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Limitations on Vendors Warranty liability | 11 | ||||
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Employees | 15 | ||||
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Releases, Indemnities and Acknowledgement | 16 | ||||
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Restrictions on Vendors business activities | 17 | ||||
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Maintenance and availability of records | 17 | ||||
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Confidentiality | 18 | ||||
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Announcements | 19 | ||||
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Costs and expenses | 20 | ||||
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Payments | 20 | ||||
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Assignment | 20 | ||||
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Remedies and waivers | 20 | ||||
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Further assurance | 21 | ||||
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Entire agreement | 21 | ||||
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Counterparts | 21 | ||||
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Notices | 22 | ||||
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Governing law and jurisdiction | 22 | ||||
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Page 1
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Schedule 1 Particulars of the Company and the Subsidiary | 24 | ||||
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Schedule 2 Warranties | 26 | ||||
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Schedule 3 Particulars of the Property | 44 | ||||
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Schedule 4 Particulars of Intellectual Property Rights | 54 | ||||
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Schedule 5 Completion Accounts | 55 | ||||
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Schedule 6 Completion arrangements | 58 |
Page 2
(1) | The Hamleys Group Limited (the Vendor ) registered in England under no. 2352435 whose registered office is at 188-196 Regent Street London W1R 6BT; and | |
(2) | Build-A-Bear Workshop UK Holdings Limited (the Purchaser ) registered in England under number 5651132 whose registered office is at St Stephens House, Arthur Road, Windsor, Berkshire, SL4 1RU; and | |
(3) | The Bear Factory Limited (the Company ) registered in England under no. 4036762 whose registered office is at 188-196 Regent Street London W1R 6BT. |
1 | Definitions and interpretation | |
1.1 | Definitions | |
In this Agreement the following definitions apply. | ||
Accounts means the audited balance sheet and profit and loss account of the Company for the financial period ended on and as at the Accounts Date, including the reports and notes annexed thereto. | ||
Accounts Date means 26 March 2005. | ||
Act means the Companies Acts 1985 to 1989. | ||
Business means the business of the Company as carried on at Completion, being the sale of stuff-your-own animals in an interactive in-store experience which involves the customer being actively engaged in making or dressing an animal. | ||
Companys Accounting Principles has the meaning given to it in Schedule 5. | ||
Company Charges means the RBS Security Documents which were executed by the Company. | ||
Company Indebtedness means indebtedness (whether or not due for payment) of the Company owing to any member of the Vendors Group or to Baugur Group HF or any of Baugur Group HFs other subsidiaries, but shall not include any items on normal trading account. | ||
Completion means completion of the obligations of the parties required by Clause 5 and Schedule 6. |
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Completion Accounts means the statement of the net current assets of the Company as at the close of business on the Completion Date, to be prepared in accordance with Clause 4 and Schedule 5. | ||
Completion Date means the date of Completion. | ||
Confidential Information means all information received or obtained by a party as a result of entering into or performing this Agreement and which relates to: |
(a) | the negotiations concerning this Agreement; | ||
(b) | the provisions of this Agreement; | ||
(c) | the subject matter of this Agreement; or | ||
(d) | another party. |
Confidential Business Information means all information which is not publicly known and which is used in or otherwise relates to the Companys business, customers or financial or other affairs. | ||
Consideration has the meaning given to it in Clause 3. | ||
Data Room means the data room comprising the documents made available to the Purchaser and its advisors as described in the index attached to the Disclosure Letter, such index being in the agreed form. | ||
Disclosure Letter means the letter, together with the annexures thereto, written by the Vendor to the Purchaser as the disclosure letter for the purposes of this Agreement and accepted by the Purchaser on 3 March 2006. | ||
Draft Accounts has the meaning given to it in Clause 4.2. | ||
Encumbrance means any mortgage, charge, pledge, hypothecation, lien, assignment by way of security, title retention, option, right to acquire, right of pre-emption, right of set off, counterclaim, trust arrangement or any other security , preferential right, equity or restriction, and any agreement to give or create any of the foregoing. | ||
Employees means those individuals engaged by the Company in the Business as at the Completion Date as listed in the Disclosure Letter. | ||
Employment Regulations means the Transfer of Undertakings (Protection of Employment Regulations 1981). | ||
Franchise Agreements means the several agreements pursuant to which the Company has granted to each of the other parties thereto, not being members of the Vendors Group, certain rights to enable such parties to carry on the business of selling Products in specified territories, copies of which are attached to the Disclosure Letter and more particularly set out in Schedule 4. | ||
Guarantees has the meaning given to it in Clause 12.1 | ||
ICTA means the Income and Corporation Taxes Act 1988. | ||
Indemnified Warranties means the Warranties set out in paragraphs 2.1, 2.2, 2.3, 2.4, 2.5, 8.1, 9.1, 9.2, 13.1, 13.2, 14.2, 19, 21 and 23 of Schedule 2, each an Indemnified Warranty. | ||
Independent Accountant has the meaning given to it in Clause 4.6. |
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Intellectual Property Rights means patents, trade marks, service marks, trade names, domain names, registered designs, designs, semiconductor topography rights, database rights of unfair extraction and reutilisation, copyrights and other forms of intellectual or industrial property (in each case in any part of the world, whether or not registered or registrable and if registered or registrable for their full period of registration with all extensions and renewals, and including all applications for registration or otherwise), know-how, inventions, formulae, confidential or secret processes and information, and any other protected rights and assets, and any licences and permissions in connection with the foregoing. | ||
Management Accounts means the unaudited management accounts of the Company for the period of 9 months ended on and as at the Management Accounts Date, copies of which are attached to the Disclosure Letter, but excluding any budget or forecast contained therein. | ||
Management Accounts Date means 24 December 2005. | ||
Net Current Asset Value means the aggregate value of stocks, debtors, cash at bank and in hand, prepayments and accrued income of the Company less the aggregate of all creditors of the Company in each case as at the close of business on the Completion Date, as shown in the Completion Accounts to be agreed or determined in accordance with Clause 4 and Schedule 5. | ||
Parties means the parties to this Agreement and Party means any thereof. | ||
Pre-Sale Dividend means the interim dividend that will be paid by the Company to the Vendor prior to the Completion Date. | ||
Products means a stuff-your-own-animal or the product of other retail business involving an interactive in-store customer experience where the customer is actively engaged in making or dressing the animal. | ||
Property means each property particulars of which are set out in Schedule 3. | ||
Property Documents means the documents listed in Schedule 3. | ||
Purchasers Group means the Purchaser, its subsidiaries and subsidiary undertakings, holding company and all other subsidiaries or subsidiary undertakings of its holding company from time to time. | ||
Purchasers Solicitors means Bryan Cave of 33 Cannon Street London EC4M 5TE. | ||
Purchasers Solicitors Client Account means: | ||
Bank: HSBC PLC, Westminster Branch, 22 Victoria Street,
London SW1H 0NJ;
Bryan Cave A/C No. 2; A/C No: 63065464; Sort Code: 40-02-06. |
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Purchaser Warranties means the warranties given by the Purchaser pursuant to Clause 8.2. | ||
RBS means The Royal Bank of Scotland plc. | ||
RBS Security Documents means: |
(a) | a composite guarantee and debenture dated 13 August 2003 executed by the Company and certain other members of the Vendors Group in favour of RBS as security trustee; | ||
(b) | a debenture dated 2 September 2003 supplemental to the composite guarantee and debenture referred to in paragraph (a) above executed by the Company and certain |
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other members of the Vendors Group in favour of RBS as security trustee on behalf of itself and others; and | |||
(c) | a supplemental debenture dated 28 November 2003 supplemental to the debenture referred to in paragraph (b) above executed by the Company and certain other members of the Vendors Group in favour of RBS as security trustee on behalf of itself and others. |
Regent Street Concession Agreement means an agreement in the agreed form to be entered into at Completion between the Vendor, the Company and the Purchaser pursuant to which the Vendor will grant the Company a concession at the Vendors Regent Street store on the terms and conditions set out therein. | ||
Restricted Area means anywhere in the world. | ||
Restricted Business means the Business or other retail business involving an interactive in-store customer experience where the customer is actively engaged in making or dressing the animal and the purchase of stuff-your-own-animals. | ||
Restricted Period means the period of four years beginning on the Completion Date. | ||
Shares means the entire issued share capital of the Company. | ||
Subsidiary means Hobbies and Models Limited registered in England under no. 1207167, details of which are set out in Part 2 of Schedule 1. | ||
Tax Authority has the same meaning as in the Tax Deed. | ||
Taxation or Tax has the same meaning as in the Tax Deed. | ||
Tax Deed means the deed in respect of Taxation in the agreed form. | ||
Tax Warranties means the Warranties set out in Part 2 of Schedule 2. | ||
Title Warranties means the Warranties set out in paragraph 23 of Schedule 2. | ||
TMA 1970 means the Taxes Management Act 1970. | ||
Transaction means the arrangements contemplated by this Agreement and ancillary documents. | ||
Transitional Services Agreement means an agreement in the agreed form to be entered into at Completion between the Vendor, the Company and the Purchaser pursuant to which the Vendor will provide certain services to the Company for a specified period following Completion on the terms and conditions set out therein. | ||
Vendors Accountants means KPMG LLP of 2 Cornwall Street, Birmingham B3 2DL. | ||
Vendor Charges means the RBS Security Documents which created Encumbrances over the Shares. | ||
Vendors Group means the Vendor and its subsidiaries and subsidiary undertakings from time to time and Corporal Limited, but excludes the Company and the Subsidiary, and also (to avoid doubt) excludes Baugur Group hf and any subsidiary or subsidiary undertaking of Baugur Group hf other than the Vendor and its subsidiaries and subsidiary undertakings from time to time (excluding the Company and the Subsidiary). | ||
Vendor Indebtedness means any indebtedness (whether or not due for payment) owing to the Company from any member of the Vendors Group or of Baugur Group hf or any of Baugur Group hfs other subsidiaries, but shall not include any items on normal trading account. |
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Vendors Solicitors means Denton Wilde Sapte of One Fleet Place London EC4M 7WS. | ||
Vendors Solicitors Client Account means Denton Wilde Sapte Client Account, The Royal Bank of Scotland plc, 1 Fleet Street, London EC4Y 1BD, Sort Code: 15.80.00, Account No: 67072440. | ||
Warranties means the statements set out in Schedule 2. |
1.2 | Interpretation |
In this Agreement, unless otherwise specified: |
(a) | the words and expressions defined in sections 736, 736A, 741, 742 and 744 of the Act have the same meanings; | ||
(b) | reference to any statute, bye-law, regulation, rule, delegated legislation or order is to any statute, bye-law, regulation, rule, delegated legislation or order as amended, modified or replaced from time to time and to any statute, bye-law, regulation, rule, delegated legislation or order replacing or made under any of them; | ||
(c) | references to any Clause, paragraph or Schedule are to those contained in this Agreement and all Schedules to this Agreement are an integral part of this Agreement; | ||
(d) | headings are for ease of reference only and shall not be taken into account in construing this Agreement; | ||
(e) | reference to any English legal concept, term, action, remedy, method of judicial proceeding, legal document, legal status, court or official shall, in respect of any jurisdiction other than England and Wales, be deemed to refer to what most nearly approximates in that jurisdiction to that reference; | ||
(f) | reference to any English statute, bye-law, regulation, rule, delegated legislation or order shall, in relation to any assets owned, liabilities incurred, company incorporated in, or business carried on in any jurisdiction other than England and Wales, be deemed to include what most nearly approximates in that jurisdiction to that reference; | ||
(g) | the expression this Clause shall unless followed by reference to a specific provision be deemed to refer to the whole clause (not merely the sub-clause, paragraph or other provision) in which the expression occurs; | ||
(h) | person includes any individual, firm, company or other incorporated or unincorporated body; | ||
(i) | in writing means any communication made by letter or fax, and written shall be construed accordingly; | ||
(j) | business day means a day (not being a Saturday or Sunday) on which banks are open for normal banking business in London; | ||
(k) | agreement means any agreement or commitment whether conditional or unconditional and whether by deed, under hand, oral or otherwise; | ||
(l) | law includes any legislation, any common or customary law, constitution, decree, judgment, order, ordinance, treaty or other legislative measure in any jurisdiction and any directive, request, requirement, guidance or guideline (in each case, whether or not having the force of law but, if not having the force of law, compliance with which is in accordance with the general practice of persons to whom the directive, request, requirement, guidance or guideline is addressed); |
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(m) | a document is in the agreed form if it is in the form of a draft agreed between and initialled by or on behalf of the Vendor and the Purchaser on or before the date of this Agreement; and | ||
(n) | a person shall be deemed to be connected with another if that person is connected with another within the meaning of section 839 of ICTA. |
2 | Sale and purchase | |
2.1 | Sale and purchase | |
The Vendor shall sell with full title guarantee and the Purchaser shall purchase the Shares free from any Encumbrance and with all rights attached or accruing to them on and after the date of this Agreement, save for the Pre-Sale Dividend paid by the Company to the Vendor. | ||
2.2 | Waiver of pre-emption and other rights | |
The Vendor waives: |
(a) | all pre-emption rights in respect of the Shares; and | ||
(b) | any other rights which may restrict the transfer of the Shares; |
conferred on the Vendor whether by the articles of association of the Company, by agreement or otherwise. |
3 | Consideration | |
The consideration for the sale of the Shares shall be the payment by the Purchaser to the Vendor, in accordance with this Agreement, of the sum of £15,000,000 (fifteen million pounds sterling), adjusted pursuant to Clause 4 (the Consideration ). | ||
4 | Completion Accounts and adjustment payment | |
4.1 | Stock Valuation | |
The Vendor and the Purchaser shall procure that a valuation of the stock and work in progress of the Company as at close of business on the Completion Date is undertaken in accordance with the principles set out in Schedule 5 by representatives of the Vendor and the Purchaser jointly. | ||
4.2 | Preparation of Draft Accounts | |
Following Completion the Vendor shall procure: |
(a) | the preparation by the Vendors Accountants of the draft Completion Accounts (the Draft Accounts ) in accordance with Schedule 5, showing the estimated Net Current Asset Value; and | ||
(b) | subject to the Purchaser complying with its obligations under Clause 4.3, that a copy of the Draft Accounts showing the estimated Net Current Asset Value is delivered to the Vendor and Purchaser as soon as reasonably practicable following, and in any event within 42 business days after, Completion. |
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4.3 | Availability of information | |
4.3.1 | Subject to and in accordance with the provisions of paragraph 1.2(k) of Schedule 6, for the purposes of preparation of the Completion Accounts and the estimated Net Current Asset Value the Purchaser shall procure that the Vendor, the Vendors Accountants and their representatives are promptly provided with access to all books, records, assets, working papers or other documents of the Company and such other assistance (including access to personnel and premises of the Company) which they reasonably request. | |
4.3.2 | Following delivery of the Draft Accounts to the Purchaser and until agreement or determination of the Completion Accounts in accordance with this Clause each of the Vendor and the Purchaser shall procure (so far as it is able and so far as such matters are within its possession or control) that the other of them and their representatives are promptly provided with access to all books, records, assets, working papers or other documents and such other assistance (including access to personnel and premises) which they reasonably request for the purpose of reviewing the Draft Accounts, provided that any release of working papers may be upon terms which the accountants in question may reasonably require. | |
4.3.3 | The Vendor and the Purchaser shall each be entitled, at its own expense (and in the case of the Vendor and its representatives subject always to Clause 15), to make and retain copies of documentation to which it is granted access in accordance with the provisions of this Clause 4. | |
4.4 | Action if Purchaser disputes Draft Accounts | |
If the Purchaser wishes to dispute the Draft Accounts and/or the estimated Net Current Asset Value it shall notify the Vendor within 30 business days after receiving the Draft Accounts and such notice shall specify which items the Purchaser disputes, its reasons and the adjustments which, in its opinion, should be made to the Draft Accounts in order to comply with the requirements of this Agreement. | ||
4.5 | Agreement or deemed agreement of Draft Accounts | |
If the Purchaser does not serve notice under Clause 4.4 or confirms in writing to the Vendor that it agrees the estimated Net Current Asset Value shown in the Draft Accounts, Clause 4.8 shall apply. | ||
4.6 | Appointment of Independent Accountant | |
4.6.1 | If the Purchaser serves notice under Clause 4.4 the parties shall use all reasonable endeavours to meet and reach agreement upon the Draft Accounts. | |
4.6.2 | If the Vendor and the Purchaser have not agreed the Draft Accounts and the Net Current Asset Value within 14 business days of receipt by the Vendor of notice under Clause 4.4, or if any other dispute occurs in relation to the Draft Accounts or the Net Current Asset Value, either the Purchaser or the Vendor may refer the matter in dispute to an independent chartered accountant (the Independent Accountant ). | |
4.6.3 | The Independent Accountant shall be nominated by the Vendor and the Purchaser and, failing agreement within 7 business days of a request from either party to the other for a joint nomination, shall be such independent accountant (being a partner in an international firm of accountants other than KPMG) as is appointed on the application of either of them by the President for the time being of the Institute of Chartered Accountants in England and Wales. The Independent Accountant shall be deemed to act as an expert and not as an arbitrator. | |
4.6.4 | Each of the Vendor and the Purchaser shall promptly supply to the Independent Accountant all such assistance, documentation and information as he may require for the purposes of the reference, and the Vendor and the Purchaser shall use their respective reasonable efforts to procure the prompt determination of such reference. The determination of the Independent Accountant shall in the absence of manifest error be conclusive and binding on the Parties. |
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4.7 | Costs of Independent Accountant | |
The costs of any Independent Accountant shall be borne by the Parties in such proportions as he may direct or, in the absence of direction, equally between the Purchaser and the Vendor. All costs of the Purchasers accountants shall be borne by the Purchaser. All costs of the Vendors Accountants shall be borne by the Vendor. | ||
4.8 | Consequences of agreement or determination of Completion Accounts | |
Following agreement or determination of the Draft Accounts and the estimated Net Current Asset Value in accordance with this Clause 4 the Draft Accounts as so agreed or determined shall constitute the Completion Accounts and the Net Current Asset Value shall be the amount shown in them. | ||
4.9 | Payment of adjustment | |
4.9.1 | Within 7 business days after agreement or determination of the Net Current Asset Value under this Clause 4, if the Net Current Asset Value is £100,000 less than £525,000, the Vendor shall pay, in same day funds, to the Purchaser an amount equal to the amount by which such shortfall is greater than £525,000 and not merely the excess over £100,000 (such payment to be made into the Purchasers Solicitors Client Account, and the receipt of the Purchasers Solicitors shall be a complete discharge to the Vendor who shall not be required to enquire as to the distribution of that amount). | |
4.9.2 | If any amount due under this Clause 4.9 is not paid on the due date then the amount due shall accrue interest from and including the due date to the date on which payment is received at 3% above Barclays Bank plc base lending rate from time to time in force as well after as before judgment. | |
4.9.3 | The amount of any payment made pursuant to this Clause 4.9 shall be by way of adjustment to the Consideration. | |
4.9.4 | Any payment due pursuant to this Clause 4.9 shall be made free of any set-off, withholding or counterclaim, including (but without limitation) as a result of any claim (actual or alleged) arising out of the warranties, agreements, indemnities or undertakings in this Agreement or any documents ancillary hereto. | |
4.9.5 | The Consideration shall be reduced by such amount of Company Indebtedness as is outstanding at Completion on the basis that such Indebtedness shall be fully discharged by the Purchaser immediately following Completion. | |
4.9.6 | The Vendor acknowledges that the Purchaser will instruct KPMG to conduct an audit of the financial statements of the Company to 26 March 2006 the cost thereof to be borne by the Purchaser, and that such audit shall be conducted in conjunction with the determination of the Completion Accounts. | |
5 | Completion arrangements | |
5.1 | Time and place | |
Completion shall take place immediately following the signature of this Agreement at the offices of the Vendors Solicitors. | ||
5.2 | Vendors obligations | |
At Completion the Vendor shall do or procure those things listed in Part 1 of Schedule 6. |
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5.3 | Purchasers obligations | |
At Completion the Purchaser shall do or procure those things listed in Part 2 of Schedule 6. | ||
5.4 | No partial Completion | |
Neither the Vendor nor the Purchaser shall be obliged to complete the sale and purchase of any of the Shares unless the sale and purchase of all the Shares is completed simultaneously. | ||
5.5 | Valid receipt | |
The Vendors Solicitors are authorised to receive payment of the Consideration on behalf of the Vendor. The receipt of the Vendors Solicitors shall be a complete discharge to the Purchaser who shall not be obliged to enquire as to the distribution of the Consideration. | ||
6 | Discharge of indebtedness | |
6.1 | Discharge of Vendor Indebtedness | |
The Vendor shall on or before Completion repay or procure the repayment of the Vendor Indebtedness. | ||
6.2 | Discharge of Company Indebtedness | |
The Company Indebtedness shall be discharged immediately following Completion in accordance with Clause 4.9.5. | ||
7 | Indemnities | |
7.1 | The Vendor hereby indemnifies and agrees to hold the Purchaser harmless from and against any liability, loss, charge, claim or demand whether for Taxation or otherwise arising from: | |
7.1.1 | the transfer by the Subsidiary of certain of its business, assets and liabilities to The Bear Factory Limited on 15 November 2001; | |
7.1.2 | the sale by the Vendor of Hobbies and Models Limited to Hobbies and Models (No. 1) Limited (now known as Beatties of London (Properties) Limited) on 15 November 2001; | |
7.1.3 | the sale by the Vendor of Hobbies and Models (No. 1) Limited (now known as Beatties of London (Properties) Limited) to Retail Services Limited on 16 November 2001; | |
7.1.4 | the acquisition by The Bear Factory Limited of the Subsidiary from Beatties of London (Properties) Limited on 24 August 2005 and the subsequent disposal of the Company and the Subsidiary to the Purchaser; | |
7.1.5 | the declaration of any dividends by the Subsidiary at any time; | |
7.1.6 | the Subsidiary ceasing to be a member of the Vendors Group (where for these purposes the definition thereof includes the Subsidiary); | |
7.1.7 | the surrender of or claim for group relief in respect of the accounting periods of the Subsidiary beginning on or before Completion; | |
7.1.8 | the late submission of Tax returns to a Tax Authority in respect of the accounting periods of the Subsidiary beginning on or before Completion; and | |
7.1.9 | the termination by the Company at the direction of the Purchaser of either or both of the Franchise Agreements in respect of Sweden and Denmark provided that the franchisees of |
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such territories shall continue to be entitled for a period of six months from being given notice of termination to sell the stocks held by them at the date of such notice on the terms and subject to the conditions of the relevant Franchise Agreement. | ||
7.2 | The provisions of Clause 4 of the Tax Deed (Notification of claims and conduct of disputes) shall apply to any claim brought by the Purchaser pursuant to Clause 7.1 relating to Taxation as if that clause were set out herein with any necessary changes. | |
8 | Warranties | |
8.1 | Vendor Warranties | |
8.1.1 | The Vendor warrants to the Purchaser that as at 3 March 2006 each of the Warranties is true and accurate. | |
8.1.2 | For the purposes of the Warranties any reference to the Company shall be deemed to be a reference to the Company and the Subsidiary. | |
8.2 | Reliance on Warranties | |
The Purchaser is entering into this Agreement on the basis of, and in reliance on, the Warranties. | ||
8.3 | Purchaser Warranties | |
The Purchaser warrants to the Vendor that: |
(a) | the Purchaser has the right, power and authority, and has taken all necessary action, to execute, deliver and exercise its rights and perform its obligations under this Agreement and to execute, deliver and exercise its rights and perform its obligations under each document to be executed pursuant to this Agreement to which it is expressed to be a party (the Purchasers Completion Documents ); and | ||
(b) | the execution and delivery of, and the performance by the Purchaser of its obligations under this Agreement and the Purchasers Completion Documents will not: |
(i) | result in a breach of any provision of the memorandum or articles of association of the Purchaser; | ||
(ii) | result in a breach of, or constitute a default under, any instrument to which the Purchaser is a party or by which it is bound and which is material in the context of the transactions contemplated by this Agreement; or | ||
(iii) | result in a breach of any order, judgment or decree of any court or governmental agency to which the Purchaser is a party or by which it is bound or submits and which is material in the context of the transactions contemplated by this Agreement. |
8.4 | Indemnity Basis | |
8.4.1 | Without prejudice to the right of the Purchaser to claim on any other basis or take advantage of any other remedies available to it, if any Indemnified Warranty is breached or proves to be untrue or misleading the Vendor shall pay to the Purchaser an amount equal to all costs and expenses (including, without limitation, damages, reasonable legal and other professional fees and costs, penalties, expenses and losses) incurred by the Purchaser or the Company as a result of such breach or of the Indemnified Warranty being untrue or misleading PROVIDED ALWAYS that notwithstanding any other provision of this Agreement the Purchaser shall take and shall procure that the Company will take all reasonable steps to mitigate the same as if it were under a common law duty to mitigate its loss. |
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8.4.2 | A payment made in accordance with the provisions of this Clause 8.4 shall include any amount necessary to ensure that, after any Taxation of the payment, the Purchaser is left with the same amount it would have had if the payment was not subject to Taxation. | |
8.5 | Survival of Warranties | |
Subject as specifically otherwise provided in this Agreement, the Warranties and the Purchasers Warranties shall remain in full force and effect notwithstanding Completion. | ||
8.6 | Warranties to be independent | |
Each of the Warranties shall be separate and independent and shall not be limited by reference to any other Warranty or any other provision of this Agreement. | ||
8.7 | Tax and Property Warranties | |
The only Warranties given: |
(a) | in respect of Tax are the Tax Warranties, and the other Warranties shall be deemed not to be given in relation to Tax; | ||
(b) | in respect of the Property are those contained in paragraph 23 of Schedule 2, and the other Warranties shall be deemed not to be given in relation to the Property. |
8.8 | Vendors knowledge |
For the purposes of this Agreement and the Disclosure Letter, where any Warranty is qualified by the expression so far as the Vendor is aware or to the best of the knowledge, information and belief of the Vendor or by any similar qualification, such Warranty is given on the basis that enquiries have been made only of the Relevant Individuals but not of any other person, and that such Relevant Individuals have taken all reasonable steps necessary to inquire as to the accuracy of the statements contained in the Warranties. For the purposes of the foregoing the Relevant Individuals are: |
(a) | Nicholas Mather | ||
(b) | Alasdair Dunn | ||
(c) | Roger Parry; and | ||
(d) | Katherine Osborne |
9 | Tax | |
9.1 | Each of the Parties shall comply with their respective obligations under the Tax Deed. | |
9.2 | The provisions of paragraph 3 to the Tax Deed shall apply to limit the liability of the Vendor under the Tax Warranties. | |
10 | Limitations on Vendors Warranty liability | |
10.1 | General limitations | |
10.1.1 | The Vendor shall have no liability in respect of a claim under the Warranties: |
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(a) | unless notice in writing of the claim is given by the Purchaser to the Vendor stating in reasonable detail the nature of the claim and, if practical, the amount claimed: |
(i) | in the case of a claim under any of the Warranties other than the Tax Warranties or Title Warranties, within eighteen months of Completion; | ||
(ii) | in the case of a claim under the Tax Warranties or the Tax Deed, on or before the seventh anniversary of Completion; and | ||
(iii) | in the case of the Title Warranties, at any time; |
(b) | if proceedings in respect of a claim, notified in accordance with paragraph (a) above, have not been issued and served on the Vendor within 6 months after the relevant date referred to in paragraph (a) save in respect of a contingent claim in which case such period of six months shall only commence on the date on which it ceases to be contingent. |
10.1.2 | The Vendor shall have no liability in respect of a claim under the Warranties: |
(a) | as regards any single claim (or a series of claims arising from substantially similar facts or circumstances), unless the amount of its liability thereunder exceeds £5,000 (five thousand pounds sterling); | ||
(b) | unless its liability in respect of the claim when aggregated with its liability in respect of all claims against the Vendor under the Warranties (disregarding claims excluded by paragraph (a) above) exceeds £100,000 (one hundred thousand pounds sterling), in which case the Vendor shall be liable for the whole amount (excluding claims referred to in paragraph (a) above) and not merely the excess. |
10.2 | Maximum claim limit | |
The aggregate liability of the Vendor under Clause 7 (Indemnities), the Warranties and the Tax Deed shall not exceed £12,500,000 (twelve million and five hundred thousand pounds sterling). |
10.3 | Other general limitations | |
The Vendor shall have no liability in respect of a claim under the Warranties: |
(a) | to the extent that the fact, matter or circumstance giving rise to the claim was fairly disclosed in the Disclosure Letter or is apparent on the face of the documents in the Data Room; | ||
(b) | as regards any claim if and to the extent that provision, reserve or note in respect thereof or of the event or circumstance giving rise thereto has been made in the Accounts or the Management Accounts or payment or discharge of the relevant matter has otherwise been taken into account in the Accounts or the Management Accounts; | ||
(c) | as regards any claim if and to the extent that payment or discharge of the claim or provision in respect of the claim or the event or circumstance giving rise thereto has been taken into account in the determination of the Net Current Asset Value as shown in the Completion Accounts; | ||
(d) | in respect of any claim which is contingent only, unless and until such contingent liability becomes an actual liability; | ||
(e) | as regards any claim to the extent of any amount which is recovered from insurers; | ||
(f) | as regards any claim if such claim would not have arisen but for any act or omission carried out after the date of this Agreement otherwise than in the ordinary course of |
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business by the Purchaser, the Company or any other member of the Purchasers Group or any other person connected with any of them or any of their respective directors, employees or agents; | |||
(g) | as regards any claim if such claim would not have arisen but for a cessation after Completion of the business or trade or any part thereof of the Purchaser or the Company or any change in the nature of such business or trade or a sale or disposal of any share or any interest in the Company after Completion; | ||
(h) | as regards any claim to the extent that such claim or liability arises or that the amount thereof is increased as a result of any change after Completion in the accounting reference date or in any of the accounting or actuarial or tax reporting policies, bases or practices of the Company or the Purchaser; or | ||
(i) | to the extent that a breach of the Warranties also gives rise to a claim under the Tax Deed and the Vendor has satisfied such claim or vice versa. |
10.4 | Third party recovery |
10.4.1 | Where the Purchaser or the Company is at any time entitled to recover from some other person (including without limitation any government authority or under any policy of insurance) any sum in respect of any matter giving rise to a claim under this Agreement or under any document ancillary to this Agreement or thereto other than a claim in relation to Taxation: |
(a) | the Purchaser shall, and shall procure that the Company shall, undertake and exhaust all necessary steps to enforce such recovery before taking proceedings against the Vendor and, in the event that the Purchaser or the Company shall recover any amount from such other person, the amount of the claim against the Vendor shall be reduced by the amount recovered less all reasonable costs, charges and expenses incurred by the Purchaser or the Company in recovering that sum from such other person; or | ||
(b) | at the Vendors option, subject to the Vendor having settled the relevant claim against the Vendor and subject to the Vendor indemnifying the Purchaser and the Company to their reasonable satisfaction in relation thereto, the Purchaser shall, or shall procure that the Company shall, for a nominal consideration assign to the Vendor the benefit of the rights of recovery, reimbursement or refund which the Purchaser or the Company has against such other person in respect of the matter giving rise to the relevant claim. |
10.4.2 | If at any time the Vendor pays to the Purchaser or the Company an amount pursuant to a claim under this Agreement or any document ancillary hereto (other than a claim in relation to Taxation) and the Purchaser or the Company subsequently becomes entitled to recover from any other person (including without limitation any government authority or under any policy of insurance) any sum in respect of any matter giving rise to such claim: |
(a) | the Purchaser shall, and shall procure that the Company shall, undertake all necessary steps to enforce such recovery, and shall forthwith pay to the Vendor so much of the amount paid to the Purchaser or the Company as does not exceed the sum recovered from such other person less all reasonable costs, charges and expenses incurred by the Purchaser or the Company in recovering that sum from such other person; or | ||
(b) | at the Vendors option, subject to the Vendor indemnifying the Purchaser and the Company to their reasonable satisfaction in relation thereto, the Purchaser shall, or shall procure that the Company shall, for a nominal consideration assign to the Vendor the benefit of the rights of recovery, reimbursement or refund which the Purchaser or the Company has against such other person in respect of the matter giving rise to the relevant claim. |
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10.4.3 | The Purchaser shall, or shall procure the Company shall, keep the Vendor fully and promptly informed of any actual or prospective right of recovery from any third party as referred to in Clause 10.4.1 or 10.4.2 above. | |
10.5 | Conduct of disputes | |
10.5.1 | If the Purchaser or the Company become aware of any claim, action or demand against either of them, or of any circumstance which may give rise to any claim, action or demand against either of them, and which may give rise to a claim under this Agreement (other than a claim under the Tax Warranties or Tax Deed to which paragraph 4 of the Tax Deed shall apply), the Purchaser shall forthwith give written notice (including reasonable particulars of such claim or circumstance) to the Vendor and the Purchaser shall and shall procure that the Company (if relevant) shall: |
(a) | not knowingly make any admission of liability, or any agreement or compromise with any person body or authority in relation thereto without the prior written agreement of the Vendor which shall not be unreasonably withheld or delayed; | ||
(b) | give the Vendor and its professional advisers reasonable access to the premises and personnel of the Purchaser and the Company, as the case may be, and to any relevant assets, accounts, documents and records within the control of the Purchaser or the Company to enable the Vendor and its professional advisers to examine such assets, accounts, documents and records and take photographs or photocopies thereof at its own expense in order to appraise themselves of all facts, matters and information relevant to the claim, action or demand against the Purchaser or the Company; | ||
(c) | subject to the Vendor having provided the Purchaser or the Company (as appropriate) with such indemnity therefor as the Purchaser or the Company may reasonably require in relation thereto, permit the Vendor in the name of the Purchaser or the Company (as appropriate) to appoint such professional advisers and to take such action as the Vendor may consider reasonably necessary or desirable to avoid, dispute, resist, appeal, compromise or defend the claim, action or demand and any adjudication in respect thereof subject only to consulting the Purchaser or the Company (as appropriate), prior to taking any such action; and | ||
(d) | at the option of the Vendor, afford the Vendor the opportunity to take such steps to remedy or avert such claim or circumstance as the Vendor may require, |
Provided that the Purchaser shall not be required to take nor shall the Vendor take any action which in the Purchasers reasonable opinion would materially adversely affect the goodwill or standing of the Purchaser or the Company or damage the reputation of any brand of either of them. | ||
10.6 | Opportunity to remedy breach | |
A breach of any Warranty which is capable of remedy shall not entitle the Purchaser to compensation or damages unless the Vendor is given written notice of the breach by the Purchaser and such breach is not remedied by the Vendor at no cost to the Purchaser or the Company within thirty (30) days after the date on which notice is served on the Vendor. If such breach has not been remedied within that 30 day period, then the date on which notice of a claim in respect of that breach shall be deemed to have been given to the Vendor for the purposes of Clause 9.1(a) above shall be the date on which notice was given under this Clause, provided that such notice satisfies the other requirements of Clause 9.1(a) above when so given. | ||
10.7 | Purchasers knowledge | |
The Purchaser represents and confirms to the Vendor that as at the date of this Agreement, having made enquiry of the Purchasers Solicitors and its other advisors, neither the |
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Purchaser nor any director of the Purchaser is aware of any fact, matter or circumstance which: |
(a) | constitutes a breach of the Warranties; or | ||
(b) | gives rise to a claim under the Tax Deed or any specific indemnity in this Agreement. |
To the extent that the Purchaser is so aware no claim may be made under the Warranties or Tax Deed under this Agreement in respect of such fact, matter or circumstance. |
10.8 | Exceptions to limitations | |
Nothing in this Clause 10 shall have the effect of limiting or restricting any liability of the Vendor in respect of a claim under the Warranties or the Tax Deed arising as a result of any fraud or wilful concealment. | ||
10.9 | General | |
10.9.1 | After Completion the Purchaser shall have no right of rescission or right to terminate this Agreement and, accordingly, the Purchaser waives all and any rights of rescission or termination it may have in respect of any such matter (howsoever arising or deemed to arise). | |
10.9.2 | The Purchaser shall not be entitled to claim for any punitive, indirect or consequential loss in respect of any claim. | |
10.9.3 | Without prejudice to any other provision in this Agreement for the protection of the Vendor the Purchaser shall and shall procure that the Company shall take all reasonable steps to mitigate any loss which is or may be the subject of any claim under this Agreement. | |
10.9.4 | The amount of any payment made by the Vendor to the Purchaser in respect of any claim under the Warranties or the Tax Deed shall be deemed a reduction pound for pound in the Consideration. | |
10.9.5 | The Vendor shall not be liable for any claim under the Warranties or the Tax Deed if the Purchaser fails in a material respect to act in accordance with this Clause 10 in connection with the matter giving rise to such claim unless and to the extent that, in the absence of the failure, the Purchaser would still have had such a claim. | |
11 | Employees | |
11.1 | Transfer of Employees | |
The Vendor, the Purchaser and the Company acknowledge that the transfer of the Employees from the Vendor or any other member of the Vendors Group with whom such Employees have their contract of employment prior to Completion (the Employing Company ) to the Company (the Employee Transfer ) may be one to which the Employment Regulations apply. Accordingly, prior to Completion, the contracts of employment of the Employees shall have effect as if originally made between the Employees and the Company and the Vendor hereby confirms that letters have been sent to the Employees by their respective employers confirming that their employment will transfer to the Company with effect from a date not later than 23 February 2006. | ||
11.2 | Purchasers Warranty of complete Employment Information | |
The Purchaser has provided to the Vendor such information as the Vendor has requested so as to enable the Vendor to comply with the obligations of the Vendor to inform and consult with the Employees pursuant to the Employment Regulations. The Purchaser has informed the Vendor of all such measures (if any) within the meaning of the Employment Regulations which the Purchaser presently intends to take in respect of the Employees. |
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11.3 | Consultation | |
The Vendor shall procure that the information and consultation requirements set out in Regulation 10 of the Employment Regulations are met to the extent to which the Vendor is able considering always the extent to which the Purchaser has provided full information to the Vendor (as set out at 11.2 above) including all information in respect of any measures within the meaning of the Employment Regulations which the Purchaser intends to take in respect of the Employees. | ||
11.4 | Indemnity by Vendor | |
The Vendor shall indemnify the Purchaser and each other member of the Purchasers Group against all liabilities, losses, charges, costs, expenses, penalties, claims, demands and reasonable legal and other professional fees and costs whatsoever directly or indirectly in connection with the Employees arising from the Employee Transfer including any failure to comply with any duty to inform or consult trade union and/or employee representatives under the Employment Regulations in connection with the Employee Transfer provided always that this indemnity does not extend to liabilities, losses, charges, costs, expenses, penalties, claims, demands and legal and other professional fees and costs: |
(a) | to the extent that the same are caused by or contributed to by the Purchasers failure accurately and fully to supply employment information and/or inform the Vendor of such measures it intends to take in respect of the Employees for the purposes of consultation as set out at Clause 11.2 above; and/or | ||
(b) | to the extent that the same are caused by or contributed to by any closure of or measures taken in relation to the Aberdeen and Bristol stores or the matters set out in the Amendment to and Extension of Agreed Term Sheet dated 15 February 2006 and more particularly item 6 of that document regarding the Watford and Stirling stores; and/or | ||
(c) | incurred as a result of the Purchaser making any unauthorised approach to any supplier of the Company prior to Completion, including, but not limited to, any approach to Streamline or Keenpack. |
11.5 | Indemnity by Purchaser | |
Subject to provisions of Clause 11.4, the Purchaser shall indemnify the Vendor and each other member of the Vendors Group from and against all liabilities, losses, charges, costs, expenses, penalties, claims, demands and reasonable legal and other professional fees and costs whatsoever directly or indirectly arising in connection with the employment of the Employees during the period beginning at the close of business on the Completion Date. | ||
11.6 | Use of Office Space | |
The Vendor shall, following Completion, provide the Purchaser with temporary office space and usual office equipment for such space at their premises at 2, Fouberts Place, London, W1F 7PA for a period of 7 days to accommodate 15 of employees. | ||
12 | Releases, Indemnities and Acknowledgement | |
12.1 | The Purchaser shall: |
(a) | as soon as reasonably practicable following Completion, procure the release of each member of the Vendors Group from its obligations under all guarantees, indemnities and other contingent liabilities given or assumed by it in respect of liabilities of the Company to third parties including without limitation the guarantees in respect of the Companys Milton Keynes and Sheffield lease obligations (the Guarantees ); and |
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(b) | pending the grant of such release, indemnify and keep indemnified the Vendor and each other member of the Vendors Group against any liabilities, costs, damages and expenses (of whatsoever nature and howsoever arising) under the Guarantees or which may be incurred in relation to the Guarantees. |
12.2 | The Vendor acknowledges and accepts that it shall have full liability and that the Company shall have no liability under the contractual arrangements with Li & Fung whether entered into prior to or after Completion other than those arising specifically in relation to purchase orders placed with Li & Fung for goods supplied or to be supplied for the sole benefit of the Company. | |
13 | Restrictions on Vendors business activities | |
13.1 | Vendors covenants | |
The Vendor covenants with the Purchaser that the Vendor shall not, and shall procure that no other member of the Vendors Group shall, whether alone or jointly with or on behalf of any other person at any time during the Restricted Period carry on or be engaged or interested in any Restricted Business within the Restricted Area (except as the holder of shares in a company whose shares are publicly traded and which confer not more than 5% of the votes which can generally be cast at a general meeting of such company) provided that the foregoing shall not limit the Vendor from the sale of plush toys that do not fall into the definition of Restricted Business. | ||
13.2 | Acquisitions | |
Nothing in Clause 13.1 shall prevent any member of the Vendors Group from acquiring (whether by private treaty, public offer or otherwise howsoever) any other company or business which carries on any Restricted Business provided that such Restricted Business accounts for less than 20% of the annual turnover of the company or business so acquired. | ||
13.3 | Undertakings separate | |
Each covenant in this Clause 13 shall be construed as a separate covenant. If one or more of the covenants is held to be void or unenforceable, the validity of the remaining covenants shall not be affected. | ||
14 | Maintenance and availability of records | |
14.1.1 | The Purchaser shall promptly on demand by the Vendor provide, or procure that the Company and its subsidiaries or affiliates from time to time provide, to the Vendor or its duly authorised agents such working papers, ledgers, accounts, records and other documents in relation to the Company as the Vendor may deem reasonably necessary to enable the Vendor or any other company that is a member of or is connected or in any way associated with any group of companies to which the Vendor belongs or may belong (a Vendor Associated Company ) to complete and file any tax or customs or excise or similar returns or reports, to carry out any tax audit or other proceeding or otherwise to fulfil any requirements of any law or regulation binding on the Vendor or any Associated Company. | |
14.1.2 | The Vendor shall promptly on demand by the Purchaser provide to the Purchaser or its duly authorised agents such working papers, ledgers, accounts, records and other documents as the Purchaser may deem reasonably necessary to enable the Purchaser or any other company that is a member of or is connected or in any way associated with any group of companies to which Purchaser belongs or may belong (a Purchaser Associated Company ) to complete and file any tax or customs or excise or similar returns or reports (in particular any SEC filings), to carry out any audit or other proceeding or otherwise to fulfil any requirements of any law or regulation binding on the Purchaser or any Purchaser Associated Company. |
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14.1.3 | The Purchaser agrees that it will, and will procure that the Company and its subsidiaries and affiliates from time to time will, retain and maintain all such working papers, ledgers, accounts, records and other documents for all years and periods ending on or before or current at Completion for a period of not less than 10 years. | |
15 | Confidentiality | |
15.1 | Duty of confidentiality | |
Save as provided by Clause 15.3 each Party shall, and shall procure that any person connected with it and its officers and employees shall, keep confidential and not disclose to any person any Confidential Information. | ||
15.2 | Confidential Business Information | |
Save as permitted by Clause 15.3 the Vendor covenants with the Purchaser that the Vendor shall not, and shall procure that no person connected with and no director, officer or employee of that Vendor shall, make use of or disclose to any person any Confidential Business Information. | ||
15.3 | Permitted disclosures | |
A Party may disclose or permit the disclosure of Confidential Information and the Vendor may disclose or permit the disclosure of Confidential Business Information: |
(a) | to its directors, officers, employees, sub-contractors, agents, legal or other professional advisers, to the extent necessary to enable it or them to perform or cause to be performed or to enforce any of its rights or obligations under this Agreement; | ||
(b) | when required to do so by law or by or pursuant to the rules or any order of any court, tribunal or agency of competent jurisdiction; | ||
(c) | to the extent that the Confidential Information or Confidential Business Information has become publicly available or generally known to the public at the time of such disclosure otherwise than as a result of a breach of this Clause 15; | ||
(d) | to a relevant Tax Authority to the extent required for the proper management of the taxation affairs of that party, any of its holding companies or any subsidiary of any of the foregoing; | ||
(e) | if such disclosure is expressly permitted by some other provision of this Agreement or the Tax Deed or if the other Parties or (in the case of Confidential Business Information) the Purchaser has or have given prior written approval to the disclosure; | ||
(f) | when required by any securities exchange, regulatory or governmental body having jurisdiction over the Party seeking to make disclosure, including the United Kingdom Financial Services Authority, the Icelandic Stock Exchange, the New York Stock Exchange and NASDAQ, whether or not the requirement for disclosure has the force of law. |
15.4 | Consultation | |
If a Party is required to disclose Confidential Information or Confidential Business Information in a manner permitted by Clause 15.3(b) or 15.3(f) that Party shall to the extent such consultation is practicable and permitted by the relevant law, rule, order, exchange or body: |
(a) | provide the other Parties with advance notice of the requirement and a copy of the information to be disclosed; and |
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(b) | permit the other Parties to make representations in relation to it; and | ||
(c) | at the expense of and subject to being indemnified to its satisfaction by the other Parties give the other Parties who would be affected by the disclosure a reasonable opportunity to seek an appropriate remedy to prevent such disclosure and co-operate fully (including if necessary joining in legal proceedings) with another Party. |
15.5 | Continuance of obligations | |
The obligations in this Clause 15 shall continue to apply after Completion or termination of this Agreement without limit in time. | ||
16 | Announcements | |
16.1 | Restrictions | |
Except as provided in Clause 16.2, a Party shall not make (and shall procure that no person connected with it nor any of its directors, officers or employees shall make) any public announcement concerning the subject matter of this Agreement without the prior written approval of the other Parties. | ||
16.2 | Permitted announcements | |
A Party may make a public announcement concerning the subject matter of this Agreement if required by: |
(a) | law or by or pursuant to the rules or any order of any court, tribunal or agency of competent jurisdiction; or | ||
(b) | any securities exchange, regulatory or governmental body having jurisdiction over it including the United Kingdom Financial Services Authority, the Icelandic Stock Exchange, the New York Stock Exchange and NASDAQ, whether or not the requirement for announcement has the force of law. |
16.3 | Prior consultation on announcements | |
If a Party is required to make a public announcement in a manner permitted by Clause 16.2 that Party shall to the extent practicable and permitted by the relevant law, rule, order, exchange or body: |
(a) | provide the other Parties with advance notice of the requirement and a copy of the announcement to be made; | ||
(b) | permit the other Parties to make representations in relation to it; and | ||
(c) | at the expense of and subject to being indemnified to its satisfaction by the other Parties give the other Parties a reasonable opportunity to seek an appropriate remedy to prevent such announcement and co-operate fully (including if necessary joining in legal proceedings) with another Party. |
16.4 | Continuance of obligations | |
The obligations in this Clause 16 shall continue to apply after Completion or termination of this Agreement without limit in time. |
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17 | Costs and expenses | |
17.1 | Each party responsible for its own costs | |
Each Party will be responsible for its own costs and expenses in relation to the negotiation, preparation, execution and implementation of this Agreement and all documents ancillary to it. | ||
18 | Payments | |
18.1 | No deduction | |
All sums payable to the Purchaser pursuant to this Agreement shall be paid without deduction, withholding, set off or counterclaim. | ||
19 | Assignment | |
19.1 | Each of the Purchaser and the Company (as the case may be) shall be entitled to assign or transfer its rights and benefits (but not its obligations) under this Agreement or any document ancillary to this Agreement to any purchaser of the Shares or of the Business (as the same shall be carried on at the date of such sale) provided that the liability of the Vendor hereunder and under the Tax Deed and any document ancillary to this Agreement shall not be increased as a result of or in connection with such assignment or transfer or by the holding or enforcement of such rights and benefits by any such purchaser. | |
19.2 | The Vendor shall be entitled to assign or transfer its rights and benefits (but not its obligations) under this Agreement or any document ancillary to this Agreement to any third party provided that the liability of the Purchaser hereunder shall not be increased as a result of or in connection with such assignment or transfer or by the holding or enforcement of such rights and benefits by any such third party. | |
19.3 | Save as expressly permitted pursuant to this Clause, neither the Vendor, the Purchaser, nor the Company may assign or transfer any of its rights or benefits under this Agreement or any document ancillary to this Agreement. | |
20 | Remedies and waivers | |
20.1 | No waiver or discharge | |
No breach by any Party of any provision of this Agreement shall be waived or discharged except with the express written consent of the other Parties. | ||
20.2 | Effect of failure or delay | |
No failure or delay by any Party in exercising any right, power or privilege under this Agreement shall operate as a waiver of that right, power or privilege and no single or partial exercise by any Party of any right, power or privilege shall preclude any further exercise of that right, power or privilege or the exercise of any other right, power or privilege. | ||
20.3 | Rights and remedies cumulative | |
The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights and remedies provided by law or otherwise. | ||
20.4 | Third party rights | |
The Parties intend that the provisions of Clause 11 (The Employees) shall be enforceable by each member of the Vendors Group, but the Parties do not intend that any other term of this |
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Agreement shall be enforceable solely by virtue of the Contracts (Rights of Third Parties) Act 1999 by any person who is not a party to this Agreement. | ||
21 | Further assurance | |
21.1 | Further assurance | |
Each Party shall after Completion from time to time at the expense of the requesting Party execute and do (or procure the execution and doing of) all such deeds, documents, acts and things as any other Party shall reasonably require on or after Completion for carrying into effect the terms of this Agreement. | ||
22 | Entire agreement | |
22.1 | In this Clause Representation means a representation, statement, assurance, covenant, undertaking, indemnity, guarantee or commitment (whether contractual or otherwise). | |
22.2 | This Agreement and each document referred to in it constitutes the entire agreement and supersedes any previous agreements between the Parties relating to the subject matter of this Agreement. | |
22.3 | In entering into this Agreement, the Purchaser acknowledges and represents that it has not relied on or been induced to enter into this Agreement by a Representation given by the Company, the Vendor, any other member of the Vendors Group or any advisor to the Vendor or any other party other than the Warranties or otherwise as set out in this Agreement or in any document referred to in this Agreement. | |
22.4 | In entering into this Agreement, the Vendor acknowledges and represents that it has not relied on or been induced to enter into this Agreement by any representation given by the Company, the Purchaser, any other member of the Purchasers Group or any advisor to the Purchaser or any other party. | |
22.5 | In relation to the subject matter of this Agreement, the Vendor is not liable to the Purchaser for a Representation that is not set out in this Agreement or in any document referred to in this Agreement. | |
23 | Counterparts | |
23.1 | Number and effectiveness of counterparts | |
This Agreement may be executed in any number of counterparts. Any Party may enter into this Agreement by executing any counterpart but this Agreement shall not be effective until each Party has executed at least one counterpart. | ||
23.2 | One instrument | |
Each counterpart shall constitute an original of this Agreement but all the counterparts together constitute the same instrument. |
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24 | Notices | |
24.1 | This Clause 24 shall not apply for service and receipt of documents for the purposes of legal proceedings. Service and Receipt of documents for the purposes of legal proceedings shall be governed by Clause 25 in conjunction with the relevant rules of Court. | |
24.2 | Service | |
Any notice or other communication to be given under this Agreement shall be in writing and shall be delivered by hand, sent by prepaid first class recorded delivery or registered post, (or registered airmail in the case of an address outside the United Kingdom), or shall be transmitted by fax, and shall be addressed to the Party to be served at the address or fax number specified below: |
(a) | The Vendor | ||
188-196 Regent Street, London W1R 6BT | |||
Attention: Nick Mather
Fax number: +44 (0)20 7479 7319 |
|||
(b) | The Purchaser | ||
Build-A-Bear Workshop, Inc
1954 Innerbelt Business Center, St Louis, Missouri, 63114-5760 USA |
|||
Attention: General Counsel
Fax number: 314-423-8188 |
|||
(c) | The Company | ||
Build-A-Bear Workshop, Inc
1954 Innerbelt Business Center, St Louis, Missouri, 63114-5760 USA |
|||
Attention: General Counsel
Fax number: 314-423-8188 |
or to such other address in the same jurisdiction as a Party may notify to the other Parties in writing as being its address for such purpose. |
24.3 | Receipt | |
Any notice or communication delivered by hand shall be deemed to have been received at the time of delivery, any notice or communication sent by post shall be deemed to have been received on the second business day (for inland mail) or the fifth business day (for overseas mail) after the date of posting, and any notice or communication transmitted by fax shall be deemed to have been received on the business day following the date of transmission. | ||
25 | Governing law and jurisdiction | |
25.1 | English law | |
This Agreement shall be governed by and construed in accordance with English law. | ||
25.2 | Jurisdiction | |
The Parties irrevocably agree that the English courts shall have exclusive jurisdiction to determine any dispute arising out of or in connection with this Agreement. |
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25.3 | Address for service | |
The Purchasers address for service under this Clause 25 is c/o the Purchasers Solicitors at the address stated in Clause 1. Items served at this address must be marked for the personal attention of Anthony Fiducia. The Vendors address for service under this Clause 25 is that stated in Clause 24.1(a) or such other address so may be notified to the Purchaser in writing in accordance with Clause 24. | ||
25.4 | Agreed method of service | |
Any claim form, application notice, judgment, orders or other notice of legal process relating to this Agreement may be served on a Party by posting it by pre-paid first class recorded delivery post to that Partys address for service specified in this Clause, or to such other address for service within England as may be notified in accordance with Clause 24 to the Party effecting service. |
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1
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Particulars of the Company | |||
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Date of incorporation: | 14 July 2000 | ||
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Place of registration: | England and Wales | ||
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Company registration number: | 04036762 | ||
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Registered office: | 188-196 Regent Street | ||
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London | |||
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W1R 6BT | |||
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Authorised share capital: | 12,211,556 ordinary shares of £1 each | ||
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Issued share capital: | 12,211,556 ordinary shares of £1 each | ||
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Accounting reference date: | 25 March | ||
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Names and addresses of directors: | Nicholas Mather | ||
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Newells House | |||
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Newells Lane | |||
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Cutmill | |||
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Bosham | |||
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West Sussex | |||
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PO18 8PS | |||
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Katherine Anne Osborne | |||
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7 Foster Close | |||
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Cheshunt | |||
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Waltham Cross | |||
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Hertfordshire | |||
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EN8 9RZ | |||
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Alasdair Dunn | |||
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44 Welbeck Avenue | |||
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Highfield | |||
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Southampton | |||
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Hampshire | |||
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SO17 1SS | |||
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Name and address of secretary: | Alasdair Dunn | ||
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44 Welbeck Avenue | |||
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Highfield | |||
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Southampton | |||
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Hampshire | |||
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SO17 1SS | |||
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Name and address of auditors: | KPMG LLP | ||
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Names of subsidiaries (if any): | Hobbies and Models Limited |
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1 | Power to sell the Company | |
1.1 | The Vendor has taken all necessary action and has all requisite power and authority to enter into and perform this agreement in accordance with its terms and the other documents referred to in it. | |
1.2 | This agreement and the other documents referred to in it constitute (or shall constitute when executed) valid, legal and binding obligations on the Vendor in the terms of the agreement and such other documents. | |
1.3 | Compliance with the terms of this agreement and the documents referred to in it shall not breach or constitute a default under any agreement or instrument to which the Vendor is a party or by which it is bound. |
2 | Shares in the Company and Subsidiary | |
2.1 | The Shares constitute the whole of the allotted and issued share capital of the Company and are fully paid. | |
2.2 | The Vendor is the sole legal and beneficial owner of the Shares. | |
2.3 | The Shares are free from all Encumbrances. | |
2.4 | No right has been granted to any person to require the Company to issue any share capital and no Encumbrance has been created in favour of any person affecting any unissued shares or debentures or other unissued securities of the Company. | |
2.5 | No commitment has been given to create an Encumbrance affecting the Shares (or any unissued shares or debentures or other unissued securities of the Company) or for any of them to issue any share capital and no person has claimed any rights in connection with any of those things. | |
2.6 | The Company: |
(a) | does not hold or beneficially owns, or has agreed to acquire, any securities of any corporation save for the Subsidiary; or | ||
(b) | has not agreed to become a member of any partnership or other unincorporated association, joint venture or consortium (other than recognised trade associations); or | ||
(c) | has not, outside its country of incorporation, any branch or permanent establishment; or | ||
(d) | has not allotted or issued any securities that are convertible into shares. |
2.7 | The Company has not at any time: |
(a) | purchased, redeemed or repaid any of its own share capital; or | ||
(b) | given any financial assistance in connection with any acquisition of its share capital or the share capital of its holding Company (as that expression is defined in section 736 of the companies acts) as it would fall within sections 151 to 158 (inclusive) of the companies acts. |
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2.8 | All dividends or distributions declared, made or paid by the Company have been declared, made or paid in accordance with its memorandum, articles of association, the applicable provisions of the Companies Acts and any agreements or arrangements made with any third party regulating the payment of dividends and distributions. | |
2.9 | Save as disclosed in the Disclosure Letter, the Subsidiary has no assets or liabilities and is dormant. |
3 | Constitutional and corporate documents | |
3.1 | All statutory books and registers of the Company have been properly kept in all material respects and no notice or allegation that any of them is incorrect or should be rectified has been received. | |
Information | ||
3.2 | All information contained in the Disclosure Letter is true and accurate and not misleading. | |
3.3 | The particulars relating to the Company in this agreement are true and accurate and not misleading. |
4 | Compliance with laws | |
So far as the Vendor is aware, the Company has at all times conducted its business in accordance with all applicable laws and regulations. |
5 | Licences and consents | |
The Company has all necessary licences, consents, permits and authorities necessary to carry on its business in the places and in the manner in which its business is now carried on, all of which are valid and subsisting. |
6 | Insurance | |
6.1 | Particulars of those insurance policies currently effected by the Company and set out in the Disclosure Letter are not misleading. | |
6.2 | There are no material outstanding claims under, or in respect of the validity of any of those policies and so far as the Vendor is aware, there are no circumstances likely to give rise to any claim under any of those policies. | |
6.3 | All the insurance policies are in full force and effect, are not void or voidable, and so far as the Vendor is aware, nothing has been done or not done which could make any of them void or voidable and completion will not terminate, or entitle any insurer to terminate, any such policy. |
7 | Power of attorney | |
7.1 | There are no powers of attorney in force given by the Company. | |
7.2 | No person, as agent or otherwise, is entitled or authorised to bind or commit the Company to any obligation not in the ordinary course of the Company business. | |
7.3 | The Disclosure Letter sets out details of all persons who have authority to bind the Company in the ordinary course of business. |
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8 | Disputes and investigations | |
8.1 | The Company: |
(a) | Is not engaged in any litigation, administrative, mediation or arbitration proceedings or other proceedings or hearings before any statutory or governmental body, department, board or agency (except for debt collection in the normal course of business); or | ||
(b) | Is not the subject of any investigation, inquiry or enforcement proceedings by any governmental, administrative or regulatory body. |
8.2 | No director of the Company is, to the extent that it relates to the business of the Company, engaged in or subject to any of the matters mentioned in paragraph 8.1(a) of this Schedule 2. | |
8.3 | No such proceedings, investigation or inquiry as are mentioned in paragraph 8.1(a) or paragraph 8.1(b) of this Schedule 2 have been threatened and so far as the Vendor is aware, no such proceedings are pending and there are no circumstances likely to give rise to any such proceedings. | |
8.4 | The Company is not affected by any existing or pending judgments or rulings and has not given any undertakings arising from legal proceedings to a court, governmental agency, regulator or third party. |
9 | Defective products and services | |
9.1 | No proceedings have been served and so far as the Vendor is aware none are pending or have been threatened against the Company in which it is claimed that any products sold by the Company concerned are defective, not appropriate for their intended use or have caused bodily injury or material damage to any person or property when applied or used as intended. | |
9.2 | No proceedings have been served and so far as the Vendor is aware there are no outstanding liabilities or claims pending or threatened against the Company in respect of any services supplied by the Company for which the Company is or may become liable and no dispute exists between the Company and any of their respective customers. |
10 | Customers and suppliers | |
10.1 | In the 12 months ending with the date of this Agreement, the business of the Company has not been materially affected in an adverse manner as a result of any one or more of the following things happening to the Company: |
(a) | The loss of any of its customers or suppliers of significance; or | ||
(b) | A reduction in trade with its customers or in the extent to which it is supplied by any of its suppliers; or | ||
(c) | A change in the terms on which it trades with or is supplied by any of its customers or suppliers. |
11 | Competition | |
11.1 | The definition in this paragraph applies in this agreement. | |
Competition Law : the national and directly effective legislation of any jurisdiction which governs the conduct of companies or individuals in relation to restrictive or other anti-competitive agreements or practices (including, but not limited to, cartels, pricing, resale pricing, market sharing, bid rigging, terms of trading, purchase or supply and joint ventures), |
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dominant or monopoly market positions (whether held individually or collectively) and the control of acquisitions or mergers. | ||
11.2 | The Company is not engaged in any agreement, arrangement, practice or conduct which amounts to an infringement of the Competition Law of any jurisdiction in which the Company conducts business and no director is engaged in any activity which would be an offence or infringement under any such competition law. | |
11.3 | The Company is not the subject of any investigation, inquiry or proceedings by any relevant government body, agency or authority in connection with any actual or alleged infringement of the Competition Law of any jurisdiction in which the Company conducts business. | |
11.4 | No such investigation, inquiry or proceedings as mentioned in paragraph 11.3 of this Schedule 2 have been threatened or are pending and so far as the Vendor is aware there are no circumstances likely to give rise to any such investigation, inquiry or proceedings. | |
11.5 | The Company is not affected by any existing or pending decisions, judgments, orders or rulings of any relevant government body, agency or authority responsible for enforcing the Competition Law of any jurisdiction and the Company has not given any undertakings or commitments to such bodies which affect the conduct of the business. | |
11.6 | The Company is not in receipt of any payment, guarantee, financial assistance or other aid from the government or any state body which was not, but should have been, notified to the European Commission under article 88 of the EC treaty for decision declaring such aid to be compatible with the common market. |
12 | Contracts | |
12.1 | The definition in this paragraph applies in this agreement. | |
Material Contract : an agreement or arrangement to which the Company is a party or is bound by and which is of material importance to the business, profits or assets of the Company. | ||
12.2 | Except for the agreements and arrangements disclosed, the Company is not a party to or subject to any agreement or arrangement which: |
(a) | Is a Material Contract; or | ||
(b) | Is of an unusual or exceptional nature; or | ||
(c) | Is not in the ordinary and usual course of business of the Company; or | ||
(d) | May be terminated as a result of any change of control of the Company; or | ||
(e) | Restricts the freedom of the Company to carry on the whole or any part of its business in any part of the world in such manner as it thinks fit; or | ||
(f) | Involves agency or distributorship; or | ||
(g) | Involves partnership, joint venture, consortium, joint development, shareholders or similar arrangements; or | ||
(h) | Is incapable of complete performance in accordance with its terms within six months after the date on which it was entered into; or | ||
(i) | Cannot be readily fulfilled or performed by the Company on time and without undue or unusual expenditure of money and effort; or |
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(j) | Involves or is likely to involve an aggregate consideration payable by or to the Company in excess of £20,000; or | ||
(k) | Requires the Company to pay any commission, finders fee, royalty or the like; or | ||
(l) | Is for the supply of goods and/or services by or to the Company on terms under which retrospective or future discounts, price reductions or other financial incentives are given; or | ||
(m) | Is not on arms length terms; or | ||
(n) | Provides for payments or other dealings in or calculated by reference to the euro. |
12.3 | Each Material Contract is in full force and effect and binding on the parties to it. The Company has not defaulted under or breached a Material Contract and so far as the Vendor is aware no other party to a Material Contract has defaulted under or in any material respect breached such a contract. | |
12.4 | No notice of termination of a Material Contract has been received or served by the Company and there are no grounds for determination, rescission, avoidance, repudiation or a material change in the terms of any such contract. |
13 | Transactions with the Vendor | |
13.1 | There is no outstanding indebtedness or other liability (actual or contingent) and no outstanding contract, commitment or arrangement between the Company and any of the following: |
(a) | The Vendor or any member of the Vendors Group or person connected with the Vendor; or | ||
(b) | Any director of a member of the Vendors Group or any person connected with such a member or director. |
13.2 | Neither the Vendor, nor any person connected with the Vendor, is entitled to a claim of any nature against the Company or has assigned to any person the benefit of a claim against the Company to which the Vendor or a person connected with the Vendor would otherwise be entitled. |
14 | Finance and guarantees | |
14.1 | The Company has no borrowings other than Company Indebtedness. | |
14.2 | Save for the Company Charges no guarantee, mortgage, charge, pledge, lien, assignment or other security agreement or arrangement has been given by or entered into by the Company or any third party in respect of borrowings or other obligations of the Company. | |
14.3 | The Company does not have any outstanding loan capital, or has lent any money that has not been repaid, and there are no debts owing to the Company other than debts that have arisen in the normal course of business. | |
14.4 | The Company has not: |
(a) | Factored any of its debts or discounted any of its debts or engaged in financing of a type which would not need to be shown or reflected in the accounts; or | ||
(b) | Waived any right of set-off it may have against any third party. |
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14.5 | No debt included in the Accounts or which has subsequently arisen in favour of the Company has arisen otherwise than in the ordinary course of trade of the Company. | |
14.6 | No indebtedness of the Company is due and payable and no security over any of the assets of the Company is now enforceable, whether by virtue of the stated maturity date of the indebtedness having been reached or otherwise. The Company has not received any notice whose terms have not been fully complied with and/or carried out from any creditor requiring any payment to be made and/or intimating the enforcement of any security which it may hold over the assets of the Company. | |
14.7 | The Company has not given or entered into any guarantee, mortgage, charge, pledge, lien, assignment or other security agreement or arrangement or is responsible for the indebtedness, or for the default in the performance of any obligation, of any other person. | |
14.8 | 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. |
15 | Insolvency | |
15.1 | The Company: |
(a) | is not insolvent or unable to pay its debts within the meaning of the Insolvency Act 1986 or any other insolvency legislation applicable to the Company concerned; and | ||
(b) | Has not stopped paying its debts as they fall due. |
15.2 | No step has been taken to initiate any process by or under which the ability of the creditors of the Company to take any action to enforce their debts is suspended, restricted or prevented or a person is appointed to manage the affairs, business and assets of the Company. | |
15.3 | In relation to the Company: |
(a) | No administrator has been appointed; | ||
(b) | No documents have been filed with the court for the appointment of an administrator; and | ||
(c) | No notice of an intention to appoint an administrator has been given by the Company, its directors or by a qualifying floating charge holder (as defined in paragraph 14 of schedule bi to the Insolvency Act 1986). |
15.4 | No process has been initiated which could lead to the Company being dissolved and its assets being distributed among the Companys creditors, shareholders or other contributors. | |
15.5 | No distress, execution or other process has been levied on an asset of the Company. |
16 | Assets | |
16.1 | The Company is the full legal and beneficial owner without encumbrance of, and has good and marketable title to and has possession and control of all the assets included in the Accounts, any assets acquired since the Accounts Date and all other assets used by the Company, except for those disposed of since the Accounts Date in the normal course of business. | |
16.2 | The Purchasers acquisition of the Shares and entry into this Agreement shall afford it all rights and assets both tangible and intangible sufficient to enable the Company to conduct the Business hereafter in the manner in which it has been conducted immediately prior to Completion. |
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17 | Condition of plant and equipment and stock in trade | |
The stock-in-trade of the Company is in good condition and is capable of being sold by the Company in the ordinary course of its business in accordance with its current price list without discount, rebate or allowance to a buyer save for promotional discounting in the ordinary course. |
18 | Environmental | |
18.1 | The definitions in this paragraph apply in this agreement. | |
Hazardous Substances means any natural or artificial substance (whether solid, liquid or gas and whether alone or in combination with any other substance or radiation), capable of causing harm to any human or other living organism or the Environment. | ||
Environment means air, water and land, all living organisms and natural or man-made structures. | ||
Environmental Law means any law in so far as it relates to Environmental Matters. | ||
Environmental Matters means the protection of human health, the protection and condition of the Environment, the condition of the workplace, the generation, transportation, storage, treatment, emission, deposit and disposal of any Hazardous Substance or Waste. | ||
Waste means all waste, including any unwanted or surplus substance irrespective of whether it is capable of being recycled or recovered or has any value. | ||
18.2 | All permits, consents and licences required or issued under Environmental Law which are necessary for carrying on the Business are in full force and effect and have been complied with and so far as the Vendor is aware there are no circumstances (including, but not limited to, the sale of the Shares to the Purchaser) likely to give rise to the modification, suspension or revocation of or lead to the imposition of unusual or onerous conditions on, or to prejudice the renewal of any of those permits, consents or licences. | |
18.3 | So far as the Vendor is aware, the Company has at all times complied with all Environmental Laws in all material respects. | |
18.4 | No proceeding or action relating to Environmental Law has been taken, is so far as the Vendor is aware pending or threatened against the Company or any employees, directors or officers of the Company by any competent authority or any other person. |
19 | Intellectual Property Rights | |
19.1 | Complete and accurate particulars are set out in Part 2 of Schedule 4 of all registered Intellectual Property Rights (including applications for such rights) owned by the Company. | |
19.2 | The Data Room contains particulars of material licences, agreements, authorisations and permissions granted in writing under which: |
(a) | the Company uses or exploits Intellectual Property Rights owned by any third party; or | ||
(b) | the Company has licensed or agreed to license Intellectual Property Rights to, or otherwise permitted the use of any Intellectual Property Rights by, any third party. |
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19.3 | Except as referred to in the immediately preceding sub-paragraph, the Company is the sole legal and beneficial owner of (or applicant for) the Intellectual Property Rights set out in Part 2 of Schedule 4, free from all Encumbrance. | |
19.4 | The Company does not require any Intellectual Property Rights other than those set out in Schedule 4 in order to carry out its activities. | |
19.5 | The Intellectual Property Rights set out in Part 2 of Schedule 4 are, so far as the Vendor is aware, subsisting and so far as the Vendor is aware nothing has been done or not been done as a result of which any of them has ceased to be subsisting. In particular: |
(a) | all application and renewal fees for the maintenance or protection of such rights have been paid on time; | ||
(b) | so far as the Vendor is aware all material confidential information (including know-how and trade secrets) owned or used by the Company has been kept confidential and has not been disclosed to third parties (other than parties who have signed written confidentiality undertakings in respect of such information, details of which are set out in the Disclosure Letter); | ||
(c) | no mark, trade name or domain name identical or similar to any of the Intellectual Property Rights set out in Part 2 of Schedule 4 has been registered, or so far as the Vendor is aware is being used by any person in the same or a similar business to that of the Company, in any country in which the Company has registered or is using that mark, trade name or domain name; and | ||
(d) | so far as the Vendor is aware there are and have been no claims, challenges, disputes or proceedings, pending or threatened, in relation to the ownership or use of such rights. |
19.6 | So far as the Vendor is aware there has been no infringement by any third party of any Intellectual Property Right set out in Part 2 of Schedule 4, nor any third party breach of confidence or passing off in relation to the business and assets of the Company and no such infringement, breach of confidence or passing off is, so far as the Vendor is aware, current or anticipated. | |
19.7 | The activities of the Company have neither: |
(a) | infringed the Intellectual Property Rights of any third party; nor | ||
(b) | constituted any breach of confidence or passing off in relation to any third party, in either case in any country in which the Company is trading. |
19.8 | A Change of Control of the Company will not result in the termination of, or have a material affect on any of the Intellectual Property Rights set out in Schedule 4. | |
20 | Information technology | |
20.1 | The definitions in this paragraph apply in this Agreement. | |
IT System : all computer hardware (including network and telecommunications equipment) and software (including associated preparatory materials, user manuals and other related documentation) owned, used, leased or licensed by or to the Company located at the Property through which the Business is carried on together with the SAGE franchise system software and related server wheresoever situate. |
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20.2 | The IT System has been properly maintained, is in good working order and is sufficient for the purposes of the Business as currently carried on by the Vendor. | |
20.3 | The Company is the registered owner of the domain name utilising the name Bear Factory. So far as the Vendor is aware, the Company owns or has sufficient licences to use the Intellectual Property in the software code relating to the operation of the associated website. | |
21 | Employees, etc. | |
21.1 | Particulars of Employees | |
The particulars of all Employees annexed to the Disclosure Letter show the name of the relevant Vendor Group Company that employs them, the job title, date of commencement of employment, type of contract (whether full or part-time or other) and date of birth of every Employee. | ||
21.2 | Remuneration and benefits | |
The particulars annexed to the Disclosure Letter show all remuneration and other benefits: |
(a) | actually provided; and | ||
(b) | which the Company is bound to provide (whether now or in the future); | ||
to each Employee. |
21.3 | Notice periods | |
The terms of employment of all Employees are such that their employment may be terminated by not more than three months notice given at any time without liability for any payment including by way of compensation or damages (except for unfair dismissal or a statutory redundancy payment). | ||
21.4 | Changes since the Accounts Date | |
Since the Accounts Date the Company has not made any changes to the emoluments or benefits of or any bonus to any of their respective Employees and the Company is under no obligation to make any such changes with or without retrospective operation. | ||
21.5 | Claims by Employees | |
No past or present Employee (or any employee of a predecessor in business) has any claim or right of action against the Company including (but not limited to) any claim: |
(a) | in respect of any accident or injury which is not fully covered by insurance; or | ||
(b) | for breach of any contract of service or for services; or | ||
(c) | for loss of office or arising out of or connected with the termination of his office or employment; or | ||
(d) | under any legislation applying in England and Wales affecting contractual or other relations between employers and their employees or workers, including but not limited to any legislation and any amendment, extension or re-enactment of such legislation and so far as the Vendor is aware any claim arising under European treaty provisions or directives | ||
and no event or inaction has occurred which could or might give rise to any such claim of which the Company is aware. |
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21.6 | Miscellaneous | |
21.6.1 | Every Employee who requires a work permit to work in the United Kingdom has a current work permit or other permission and all necessary permission to remain in the United Kingdom. | |
21.6.2 | The acquisition of the Shares by the Purchaser will not enable any Employee to terminate his/her employment or receive any payment or other benefit. | |
21.6.3 | Neither the Vendor nor the Company is involved in any industrial or trade dispute or negotiation regarding a claim with any trade union, group or organisation of employees or their representatives representing Employees and so far as the Vendor is aware there is nothing likely to give rise to such a dispute or claim other than the Employee Transfer. | |
21.6.4 | No subject access requests made to the Vendor or the Company by Employees are outstanding and the Vendor and the Company have complied in all material respects with the provisions of the Data Protection Act 1998 in respect of all personal data held or processed by them relating to the Employees. | |
21.6.5 | Neither the Vendor nor the Company will seek to procure that an Employee ceases to work for the Company (whether by resignation or otherwise). | |
21.6.6 | There are no sums owing to or from any Employee other than reimbursement of expenses, wages for the current salary period and holiday pay for the current holiday year. | |
21.6.7 | Neither the Vendor nor the Company has offered, promised or agreed to any future variation in the employment contract of any Employee. | |
21.6.8 | In respect of each Employee, the Vendor and the Company have: |
(a) | performed all obligations and duties they are required to perform (and settled all outstanding claims), whether arising under contract, statute, at common law or in equity or so far as the Vendor is aware under any treaties including the EC Treaty or laws of the European Community or otherwise; and | ||
(b) | complied with the terms of any relevant agreement or arrangement with any trade union, employee representative or body of employees or their representatives (whether binding or not); and | ||
(c) | maintained adequate, suitable and up to date records. |
22 | Pensions | |
22.1 | Particulars | |
22.1.1 | The Vendors Group Personal Pension Scheme operated by Scottish Equitable ( Pension Scheme ) is the only arrangement (other than the State benefits system) under which the Employing Company has any obligation to provide or contribute towards retirement and death benefits in respect of the Employees and no proposal or announcement has been made to any Employee about the introduction of any arrangement to provide such benefits. | |
22.1.2 | The Vendor has provided the Buyer with: |
(a) | a list of all Employees in respect of whom it contributes to the Pension Scheme; and | ||
(b) | details of the liability of the Employing Company to contribute to the Pension Scheme in respect of those Employees. |
22.1.3 | All contributions for the period up to Completion due from the Employing Company to the Pension Scheme in respect of Employees have been paid and, apart from the liability to |
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contribute referred to at paragraph 22.1.2, the Employing Company has no liability to contribute to or in respect of the Pension Scheme in any respect. | ||
22.1.4 | The Employing Company has facilitated access for the Employees who are not members of the Pension Scheme to a designated stakeholder scheme as required by Section 3 of the Welfare Reform and Pensions Act 1999. | |
22.1.5 | No proposal or announcement has been made to any Employee about the introduction, continuance, increase or improvement of any pension, lump sum, death, ill health, disability or accident benefit. | |
22.1.6 | So far as the Vendor is aware, no claims or complaints have been made or are pending or threatened in relation to the Pension Scheme or in respect of the provision of (or failure to provide) pension, lump sum, death, ill health, disability or accident benefits in relation to any of the Employees and so far as the Vendor is aware there is no fact or circumstance likely to give rise to such claims or complaints. | |
23 | Property | |
23.1 |
The definitions in this paragraph apply in this agreement.
|
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23.2 | The particulars of the Properties set out in Schedule 3 are true, complete and accurate. | |
23.3 | The Properties are the only land and buildings owned, used or occupied by the Company. | |
23.4 | So far as the Vendor 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, estate or interest in any land or buildings other than the Properties. | |
23.5 | The Company is solely legally and beneficially entitled to each of the Properties and confirms that so far as it is aware each of the Properties has a good and marketable title which for the avoidance of doubt means that each of the Properties are able to be used for the Current Use and there is nothing in the title which would prevent the transfer or charging of any of the Leases in the open market in the jurisdictions that they are located save as provided for in the terms of each Lease | |
23.6 | The Vendor is not aware of any actual or contingent liability in respect of Previously-Owned Land and Buildings. | |
23.7 | Neither the Company, nor any company that is or has at any time been a subsidiary of the Company, has given any guarantee or indemnity for any liability relating to any of the Properties. | |
23.8 | The Vendor is not aware of any circumstance that could render any transaction affecting the title of the Company to any of the Properties liable to be set aside under the Insolvency Act 1986. | |
23.9 | There are no insurance policies relating to the Companys title to the Lease for each of the Properties with the deeds. | |
23.10 | So far as the Vendor is aware, in relation to each Lease, each lessee, tenant, licensee or occupier has observed and performed in all material respects all covenants, restrictions, stipulations and other encumbrances and as far as the Vendor is aware there has not been any waiver of or acquiescence to any breach of them. | |
23.11 | In relation to each Lease, all principal rent and additional rent and all other sums payable by each lessee, tenant, licensee or occupier under each Lease (Lease Sums) have been paid as and when they became due and no Lease Sums have been: |
(a) | Set off or withheld; or | ||
(b) | Commuted, waived or paid in advance of the due date for payment. |
The Properties are not the subject of any agreement for sale, option, right of pre-emption or right of first refusal save as provided for in the Leases | ||
23.12 | The Company has not received written notice that there has been a breach of any covenant, restriction, stipulation and other encumbrance affecting the Properties. | |
23.13 | So far as the Vendor is aware there are no circumstances which (with or without taking other action) would entitle any third party to exercise a right of entry to, or take possession of all or any part of the Properties, or which would in any other way affect or restrict the continued possession, enjoyment or use of any of the Properties. | |
23.14 | The Vendor is not aware of any matters which are registered as local land charges or, although not registered, are capable of registration as local land charges. | |
23.15 | No claim or liability (contingent or otherwise) under the Planning Acts in respect of the Properties, or any Statutory Agreement affecting the Properties, are outstanding, nor are the Properties the subject of a notice to treat or a notice of entry, and no notice, order resolution or proposal has been published for the compulsory acquisition, closing, demolition or clearance |
Page 37
of the Properties, and the Company is not aware of any matter or circumstances which would lead to any such notice, order, resolution or proposal. | ||
23.16 | The Company has not received notice of any breach of any applicable statutory and bye- law requirement or any regulation, rule and delegated legislation, relating to the Properties and their current use, including (without limitation) all requirements under the Property statutes. | |
23.17 | Each of the Properties is in a state of repair and condition sufficient to enable the Current Use to be carried out therefrom | |
23.18 | There are no development works, redevelopment works or fitting-out works outstanding in respect of any of the Properties. | |
23.19 | There exists no dispute between the Company and the owner or occupier of any other premises adjacent to or neighbouring the Properties. | |
24 | Accounts | |
24.1.1 | The Accounts have been prepared in accordance with the Companies Acts and with accounting standards, policies, principles and practices generally accepted in the UK and in accordance with the law of that jurisdiction. | |
24.2 | The Accounts have been audited by an auditor or firm of accountants qualified to act as auditors in the UK and the auditors report(s) required to be annexed to the Accounts is unqualified. | |
24.3 | The Accounts show a true and fair view of the affairs of the Company as at the Accounts Date and of the profit and loss of the Company for the financial year ended on that date. | |
24.4 | The Accounts have been filed and laid before the Company in general meeting in accordance with the requirements of the Companies Acts. | |
24.5 | The profit and loss accounts set out in the Management Accounts have been prepared on a consistent basis and fairly reflect in all material respects the financial and trading position of the Company as at the date to which they were prepared, except in the following respects: |
(a) | taxation; | ||
(b) | interest; | ||
(c) | group management charges; | ||
(d) | amortisation of goodwill; | ||
(e) | cost of sales; | ||
(f) | foreign currency movements; | ||
(g) | any group provisions or adjustments which have been processed through the management accounts of the Company; and | ||
(h) | the Companys concession at the Vendors store in Regent Street, London was not included in the Management Accounts until April 2005. |
Page 38
25 | Financial and other records | |
25.1 | All financial and other records of the Company: |
(a) | Have been properly prepared and maintained; | ||
(b) | Constitute an accurate record of all matters required by law to appear in them; | ||
(c) | Do not contain any material inaccuracies or discrepancies; and | ||
(d) | Are in the possession of the Company. |
25.2 | No notice has been received or allegation made that any of those records are incorrect or should be rectified. | |
25.3 | All statutory records, including accounting records, required to be kept or filed by the Company have been properly kept or filed and comply with the requirements of the companies acts. | |
25.4 | All deeds and documents belonging to the Company are in the possession of the Company. | |
26 | Changes since Accounts Date | |
26.1 | Since the Accounts Date: |
(a) | The Company has conducted its business in the normal course and as a going concern; | ||
(b) | There has been no material adverse change in the turnover, financial or trading position of the Company; | ||
(c) | The Company has not issued or agreed to issue any share or loan capital; | ||
(d) | No dividend or other distribution of profits or assets has been, or agreed to be, declared, made or paid by the Company; | ||
(e) | Save in respect of the costs of the Refit and Refresh Programme relating to the Companys stores (which has now been completed), details of which are set out in the Data Room, the Company has not borrowed or raised any money or taken any form of financial security and no capital expenditure has been incurred on any individual item by the Company in excess of £25,000 and the Company has not acquired, invested or disposed of (or agreed to acquire, invest or dispose of) any individual item in excess of £25,000; | ||
(f) | No shareholder resolutions of the Company have been passed other than as routine business at the annual general meeting; | ||
(g) | There has been no abnormal increase or reduction of stock in trade; | ||
(h) | None of the stock in trade reflected in the Accounts has realised an amount less than the value placed in it in the Accounts; and | ||
(i) | Save for promotional discounts in the ordinary course, the Company has not offered price reductions or discounts or allowances on sales of stock in trade, or sold stock in trade at less than cost price. |
Page 39
27 | Effect of Sale of Shares | |
Neither the acquisition of the Shares by the Purchaser nor compliance with the terms of this Agreement will: |
(a) | entitle any person to receive from the Company any finders fee, brokerage or other commission in connection with the purchase of the Shares by the Purchaser; or | ||
(b) | so far as the Vendor is aware result in any customer or supplier being entitled to cease dealing with the Company or to reduce substantially its existing level of business or to change the terms on which it deals with the Company; or | ||
(c) | so far as the Vendor is aware result in a breach of contract, law, regulation, order, judgment, injunction, undertaking, decree or other like imposition. |
28 | General | |
28.1 | All notices, returns (including any land transaction returns), reports, accounts, computations, statements, assessments and registrations and any other necessary information submitted by the Company to any Tax Authority for the purposes of Taxation have been made on a proper basis, were punctually submitted, were accurate and complete in all material respects when supplied and remain accurate and complete in all material respects and there is no open material dispute with a Tax Authority. | |
28.2 | All Tax for which the Company is or has been liable or is liable to account for has been duly paid (insofar as such Tax ought to have been paid). | |
28.3 | The Company has not made any payments representing instalments of corporation tax pursuant to the Corporation Tax (Instalment Payments) Regulations 1998 in respect of any current or preceding accounting periods and is not under any obligation to do so. | |
28.4 | The Company has not paid since the date of its incorporation nor is liable to pay any material penalty, fine, surcharge or interest charged by virtue of the provisions of the TMA 1970 or any other Taxation Statue. | |
28.5 | The Company has not within the past 12 months been subject to any non routine visit, audit, investigation (so far as the Warranties are aware), discovery or access by any Taxation Authority. | |
28.6 | The amount of Tax chargeable on the Company during any accounting period ending on or within the six years before Completion has not, to any material extent, depended on any concession, agreements or other formal or informal arrangement with any Tax Authority. | |
28.7 | All transactions in respect of which any clearance or consent was required from any Tax Authority have been entered into by the Company after such consent or clearance has been properly obtained, any application for such clearance or consent has been made on the basis of full and accurate disclosure of all relevant material facts and considerations, and all such transactions have been carried into effect only in accordance with the terms of the relevant clearance or consent. | |
28.8 | The Company has duly submitted all claims, disclaimers and elections the making of which has been assumed for the purposes of the Accounts. | |
28.9 | The Company is not liable to pay to any person (including any Tax Authority) Tax of any other person where that other person has failed to discharge liability to Tax. |
Page 40
28.10 | The Company has sufficient records to determine the tax consequence which would arise on any disposal or realisation of any asset owned at the Account Date or acquired since that date but prior to Completion. | |
29 | Capital allowances | |
29.1 | No event has occurred since the Accounts Date (otherwise than in the ordinary course of business) whereby any balancing charge may fall to be made against, or any disposal value may fall to be brought into account by the Company under the Capital Allowances Act 2001 (or any other legislation relating to capital allowances). | |
30 | Distributions | |
30.1 | No distribution or deemed distribution within the meaning of sections 209, 210 or 211 of ICTA 1988 has been made by the Company in the last six years except dividends shown in the Companys Audited Accounts and the Company is not bound by law to make any such distribution. | |
30.2 | No rents, interest, annual payments or other sums of an income nature paid by the Company or which the Company is under an existing obligation to pay in the future are wholly or partially disallowable as deductions, management expenses or charges in computing profits for the purposes of corporation tax. | |
30.3 | The Company has not within the last six years been engaged in, nor been a party to, any of the transactions set out in sections 213 to 218 (inclusive) of ICTA 1988, nor has it made or received a chargeable payment as defined in section 218(1) of ICTA 1988. | |
31 | Loan Relationships | |
31.1 | All interests, discounts and premiums payable by the Company in respect of its loan relationships (within the meaning of section 81 of the Finance Act 1996) are eligible to be brought into account by the Company as a debit for the purposes of Chapter II of Part IV of the Finance Act 1996 at the time and to the extent that such debits are recognised in the statutory accounts of the Company | |
31.2 | There are no circumstances whether arising in respect of a period before or after Completion in connection with the making of any loan by the Company prior to Completion whereunder Section 419 ICTA could take effect. | |
32 | Close companies | |
The Company is not and has not within the last six years been a close company within the meaning of sections 414 and 415 of ICTA 1988. | ||
33 | Intangible assets | |
33.1 | For the purposes of this paragraph 33, references to intangible fixed assets mean intangible fixed assets and goodwill within the meaning of Schedule 29 to the Finance Act 2002 and references to an intangible fixed asset shall be construed accordingly. | |
33.2 | No claims or elections have been made by the Company under Part 7 of, or paragraph 86 of Schedule 29 to, the Finance Act 2002 in respect of any intangible fixed asset of the Company. |
Page 41
33.3 | Since the Accounts Date: |
(a) | the Company does not own an asset which has ceased to be a chargeable intangible asset in the circumstances described in paragraph 108 of Schedule 29 to the Finance Act 2002; | ||
(b) | the Company has not realised or acquired an intangible fixed asset for the purposes of Schedule 29 to the Finance Act 2002; and | ||
(a) | no circumstances have arisen which have required, or will require, a credit to be brought into account by the Company on a revaluation of an intangible fixed asset. |
34 | Company Residence and Overseas Interests | |
34.1 | The Company has since incorporation been resident in the United Kingdom for corporation tax purposes and has not at any time since incorporation been treated for the purposes of any double taxation arrangements having effect by virtue of section 249 of the Finance Act 1994, section 788 of ICTA 1988 or for any other tax purpose as resident in any other jurisdiction. | |
35 | Overseas Interests | |
35.1 | The Company does not hold any interest in a controlled foreign company within section 747 of ICTA 1988, and the Company does not have any material interest in an offshore fund as defined in section 759 of ICTA 1988. | |
35.2 | The Company does not have a permanent establishment outside the UK. | |
36 | Transfer Pricing | |
The Company has not received any notice of enquiry from HM Revenue & Customs in relation to section 770A of, or Schedule 28AA to, ICTA 1988 in respect of non-arms length dealings by the Company and, so far as the Seller is aware, there are no circumstances existing at Completion which will give rise to an adjustment by HM Revenue & Customs under section 770A of, or Schedule 28AA to, ICTA 1988. | ||
37 | VAT | |
37.1 | The Company is a taxable person and is duly registered for the purposes of VAT with quarterly prescribed accounting periods, such registration not being pursuant to paragraph 2 of Schedule 1 to the VATA 1994 or subject to any conditions imposed by or agreed with HM Revenue & Customs and the Company is not under a duty to make monthly payments on account under the Value Added Tax (Payments on Account) Order 1993. | |
37.2 | All supplies made by the Company are taxable supplies and the Company has not been denied credit for input tax by reason of the operation of sections 25 and 26 of the VATA 1994 in the last three years. | |
37.3 | The Company is not or has not been for VAT purposes a member of any group of companies (other than the group comprising the Company and the Subsidiary alone) and, so far as the Vendor is aware, no act or transaction has been effected in consequence whereof the Company is or may be held liable for any VAT arising from supplies made by another company and no direction has been given by a Tax Authority under Schedule 9A to the VATA 1994 as a result of which the Company would be treated for the purposes of VAT as a member of a group. |
Page 42
37.4 | For the purposes of paragraph 3(7) of Schedule 10 to the VATA 1994, the Company or any relevant associates of the Company (within the meaning of paragraph 3(7) of Schedule 10 to the VATA 1994) has only exercised the election to waive exemption from VAT (pursuant to paragraph 2 of Schedule 10 to the VATA 1994) in respect of those Properties listed (as having been the subject of such an election) in Schedule 3: |
(a) | such elections have effect and any notification and information required by paragraph 3(6) of Schedule 10 to the VATA 1994 have been given and any permission required by paragraph 3(9) of Schedule 10 to the VATA 1994 has been properly obtained; and | ||
(b) | no election has been disapplied or rendered ineffective by virtue of the application of the provisions of paragraph 2(3AA) of Schedule 10 to the VATA 1994. |
37.5 | The Company does not own any assets which are capital items subject to the capital goods scheme under Part XV of the VAT Regulations 1995. | |
37.6 | The Company has not made any claim for bad debt relief under section 36 of the VATA 1994 in the last three years. | |
38 | Stamp duty and stamp duty land tax | |
38.1 | Any document that may be necessary to prove the title of the Company to any asset which is owned by the Company at Completion or any document which the Company needs to enforce or produce in evidence in the UK is duly stamped for stamp duty purposes. | |
38.2 | 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 the Company. | |
38.3 | There is no chargeable interest (as defined under section 18, Finance Act 2003) acquired or held by the Company before Completion in respect of which the Warrantors are aware that an additional land transaction return will be required to be filed with a Taxation Authority and/or a payment of stamp duty land tax will require to be made on or after Completion. | |
38.4 | The Company is not the purchaser in relation to a land transaction to which section 51 of the Finance Act 2003 applies. |
Page 43
Current Annual Rent | ||||||||||||||||
Length of term and | and Rent Review | |||||||||||||||
No. | Address | Original Tenant | Current Tenant | Guarantor | Title No. | Date of Lease/ Underlease and Parties | commencement | Dates | ||||||||
1
|
Aberdeen
Unit 30 Bon Accord Centre |
The Bear Factory
Limited |
The Bear Factory
Limited |
None | Not applicable | Registered date 21 January 2003 made between Bon Accord (Aberdeen) Limited and Bon Accord (Aberdeen) (No. 2) Limited (1) and The Bear Factory Limited (2) | 15 years commencing on 30 August 2002 |
£164,000 per annum
Rent review on 29 September 2007 and 29 September 2012 |
||||||||
|
||||||||||||||||
2
|
Basingstoke
Unit 17a Festival Place |
The Bear Factory
Limited |
The Bear Factory
Limited |
None | Not registered | 6 October 2003 made between Grosvenor Basingstoke Properties Limited and Grosvenor Basingstoke Management Limited (1) and The Bear Factory Limited (2) | 15 Years commencing on 22 October 2002 |
£90,000 per annum
Rent review on 22 October 2007 and 22 October 2012 |
||||||||
|
||||||||||||||||
3
|
Bluewater
Unit L072 Lower Level South Mall Kent |
The Bear Factory
Limited |
The Bear Factory
Limited |
None | Not registered | 3 August 2001 made between Blueco Limited (1) and The Bear Factory Limited (2) | 15 years from 24 June 2001 |
£217,500 per annum
Rent review on 24 June 2006 and 24 June 2011 |
||||||||
|
||||||||||||||||
4
|
Brighton
Unit 56 Churchill Square East Sussex |
DSG Retail Limited |
The Bear Factory
Limited |
None | ESX274189 | 12 January 2000 made between the Standard Life Assurance Co (1) and DSG Retail Limited (2) | 15 years commencing 29 September 1998 |
£148,000
Rent review on 29 September 2008 |
Page 44
Date of Lease/ | Current Annual Rent | |||||||||||||||
Underlease and | Length of term and | and Rent Review | ||||||||||||||
No. | Address | Original Tenant | Current Tenant | Guarantor | Title No. | Parties | commencement | Dates | ||||||||
5
|
Bristol
Unit BG1 and Basement storage Unit BM4 The Galleries (underlease) |
The Bear Factory
Limited |
The Bear Factory
Limited |
None | BL78309 | 13 October 2000 between Norwich Union Life & Pensions Limited (1) and The Bear Factory Limited (2) | 15 years commencing on 1 September 2000 |
£145,000 TBC
Rent review on 1 September 2005 and 1 September 2010 |
||||||||
|
||||||||||||||||
6
|
Birmingham
Bull Ring SU330 Level 3 Bull Ring |
The Bear Factory
Limited |
The Bear Factory
Limited |
None | WM873762 | 19 May 2004 made between Bull Ring No. 1 Limited and Bull Ring No. 2 Limited (1) and The Bear Factory Limited (2) | 15 years from 24 June 2003 |
£209,000 together
with turnover rent
of 10% of turnover
exceeding the basic
yearly rent
Rent review on 24 June 2008 and 24 June 2013 |
||||||||
|
||||||||||||||||
7
|
Cardiff
15 St Davids Way |
British Shoe
Corporation Limited |
The Bear Factory
Limited |
None | WA275848 | 16 February 1984 between Heron Cardiff Properties Limited (1) and British Shoe Corporation Limited (2) | 25 years commencing on 24 June 1981 | £106,000 | ||||||||
|
||||||||||||||||
8
|
Chester
20 Newgate Row Grosvenor Shopping Centre (underlease) |
The Bear Factory
Limited |
The Bear Factory
Limited |
None | Not registered | 20 September 2002 made between Grosvenor Centre Limited (1) and The Bear Factory Limited (2) | 15 years from the 24 June 2002 |
£139,000
Rent review on 24 June 2007 and 24 June 2012 |
Page 45
Current Annual Rent | ||||||||||||||||
Date of Lease/ | Length of term and | and Rent Review | ||||||||||||||
No. | Address | Original Tenant | Current Tenant | Guarantor | Title No. | Underlease and Parties | commencement | Dates | ||||||||
9
|
Cribbs Causeway
Unit LR14 Lower Level The Mall South Gloucestershire |
The Bear Factory
Limited |
The Bear Factory
Limited |
None | Not registered | 20 July 2001 and made between the Prudential Insurance Company Limited (1) and The Bear Factory Limited (2) | Commencing on 20 July 2001 and expiring on 23 June 2016 |
Basic rent per
annum £197,500 and
10% of turnover to
the extent that
exceeds the basic
rent
Rent review on 24 June 2006 and 24 June 2011 |
||||||||
|
||||||||||||||||
10
|
Dundrum
Level 3 Dundrum Town Centre Dublin 16 |
The Bear Factory
Limited |
The Bear Factory
Limited |
None | Not registered |
[There is only an
agreement for
lease, the lease
has not been
completed][
Agreement for Lease dated 15 November 2005 and made between Crossridge Investments Limited (1) and The Bear Factory trading as The Bear Factory (2) |
25 years |
216,000
Rent review on the quarter day (being 1 January, 1 April, 1 July and 1 October) immediately preceding the term commencement date on the 5 th , 10 th , 15 th , 20 th and 25 th year of the Term. |
||||||||
|
||||||||||||||||
11
|
Dudley
Unit U92 Phase 5 Merry Hill Centre West Midlands |
Hobbies and Models Limited (t/a Toy Stack) |
The Bear Factory
Limited |
None | Not registered | 5 February 1999 and made between Chelsfield MH Investments Limited (1) and Hobbies and Models Limited (t/a Toy Stack) (2) | 20 years commencing on 24 June 1998 |
£180,000
Rent review on 24 June 2008 and 24 June 2013 |
Page 46
Current Annual Rent | ||||||||||||||||
Date of Lease/ | Length of term and | and Rent Review | ||||||||||||||
No. | Address | Original Tenant | Current Tenant | Guarantor | Title No. | Underlease and Parties | commencement | Dates | ||||||||
12
|
Edinburgh
RU43 Ocean Terminal Leith |
The Bear Factory
Limited |
The Bear Factory
Limited |
None | Not applicable | Registered dated 2 June 2003 made between Ocean Terminal Limited (1) and The Bear Factory Limited (2) | From 21 October 2002 expiring on 13 October 2012 |
Rent is the higher
of the Base Rent
and the Turnover
Rent (Turnover Rent
is 10% of Turnover
in a year excluding
VAT)
Rent review on 21 October 2007 |
||||||||
|
||||||||||||||||
13
|
Glasgow
Unit 17 Buchanan Galleries |
Hobbies and Models Limited |
The Bear Factory
Limited |
None | Not applicable | Registered date 6 December 2000 made between AMP Buchanan Plc and Bredero Buchanan Plc and (1) Hobbies and Models Limited (2) | From 1 February 1999 expiring on 25 December 2023 |
£163,000
Rent review on 25 December 2008, 25 December 2013 and 25 December 2018 |
||||||||
|
||||||||||||||||
14
|
Glasgow
Unit 67 Braehead Shopping Centre |
The Bear Factory
Limited |
The Bear Factory
Limited |
None | Not applicable | Registered date 1 July 2003 made between Braehead Glasgow Limited and Braehead Park Investments Limited (1) and The Bear Factory Limited (2) (the Retail Lease ) | 15 years from 24 June 2002 |
£190,000 and 10% of
turnover to the
extent that exceeds
the basic rent
Rent review on 24 June 2007 and 24 June 2012 |
Page 47
Current Annual Rent | ||||||||||||||||
Date of Lease/ | Length of term and | and Rent Review | ||||||||||||||
No. | Address | Original Tenant | Current Tenant | Guarantor | Title No. | Underlease and Parties | commencement | Dates | ||||||||
15
|
Glasgow
Storage Unit Braehead Shopping Centre |
The Bear Factory
Limited |
The Bear Factory
Limited |
None | Not applicable | Registered date 18 March 2004 made between Braehead Glasgow Limited and Braehead Park Investments Limited and (1) and The Bear Factory Limited (2) | From 3 rd February 2003 to the earlier of 23 rd June 2017 and the date the Retail Lease ceases to be vested in The Bear Factory Limited unless the Retail Lease is replaced by another lease in the Braehead Shopping Centre |
£1,395 per annum
Rent Review on 24 June 2007 and 24 June 2012 |
||||||||
|
||||||||||||||||
16
|
Kingston
Unit 57 The Bentall Centre Kingston Upon Thames |
Hobbies and Models Limited |
The Bear Factory
Limited |
None | Not registered | 4 April 1996 made between The Norwich Union Life Insurance Society (1) and Hobbies and Models Limited (2) | 15 years from 1 August 1992 | £74,000 | ||||||||
|
||||||||||||||||
17
|
Manchester
Unit L5 The Trafford Centre |
The Bear Factory
Limited |
The Bear Factory
Limited |
None | Not registered | 28 September 2001 made between The Trafford Centre Limited (1) and The Bear Factory Limited (2) | 15 years from and including 31 July 2001 |
Basic rent of
£235,000 and 12.5%
of turnover to the
extent that exceeds
the basic rent
Rent review on 31 July 2006 and 31 July 2011 |
Page 48
Current Annual Rent | ||||||||||||||||
Date of Lease/ | Length of term and | and Rent Review | ||||||||||||||
No. | Address | Original Tenant | Current Tenant | Guarantor | Title No. | Underlease and Parties | commencement | Dates | ||||||||
18
|
Metro Centre
Unit 87 Ground Floor Tyne and Wear |
British Shoe
Corporation Limited |
The Bear Factory
Limited |
None | TY218668 | 27 October 1988 made between the Church Commissioners for England (1) and British Shoe Corporation Limited (2) | 24 1/4 years from 24 June 1988, up to and including 28 September 2012 |
£205,000 head rent
(sublet income of
£75,000 p.a.
receivable)
Rent review on 29 September 2006 |
||||||||
|
||||||||||||||||
19
|
Milton Keynes
Unit SU15 Ground Floor Level Midsummer Place Bucks |
The Bear Factory
Limited |
The Bear Factory
Limited |
Hamleys plc | Not registered | 28 March 2001 made between Universities Superannuation Scheme Limited (1) and The Bear Factory Limited (2) and Hamleys plc (3) | 15 years commencing on 24 June 2000 |
£145,000 per annum
plus 8% of the
turnover exceeds
the basic rent
Rent review on 24 June 2005 and 24 June 2010 The 2005 rent review is currently being negotiated |
||||||||
|
||||||||||||||||
20
|
Norwich
Unit UG03 Upper Ground Floor level Chapelfield |
The Bear Factory
Limited |
The Bear Factory
Limited |
None | Not registered |
[There is only an
agreement for
lease, the lease
has not been
completed.]
Agreement for lease dated 17 December 2003 made between Lendlease Norwich Limited (1) and Chapelfield GP Limited (2) and The Bear Factory Limited (3) |
Proposed 15 years from the quarter day before the centre opening date |
£130,000 per annum
Rent review on each 5 th anniversary of the commencement of the term |
Page 49
Current Annual Rent | ||||||||||||||||
Date of Lease/ | Length of term and | and Rent Review | ||||||||||||||
No. | Address | Original Tenant | Current Tenant | Guarantor | Title No. | Underlease and Parties | commencement | Dates | ||||||||
21
|
Nottingham
Unit 306 and storage unit Victoria Centre |
Hobbies & Models
Limited (t/a Toy Stack) |
The Bear Factory
Limited |
None | Not registered | 7 November 1997 made between Dusco (UK) Limited (1) and Hobbies & Models Limited (t/a Toy Stack) (2) | 10 years from 29 September 1997 | £107,850 | ||||||||
|
||||||||||||||||
22
|
Reading
U33 Riverside Level Oracle Shopping Centre |
The Bear Factory
Limited |
The Bear Factory
Limited |
None | BK387157 | 5 July 2001 made between Oracle Shopping Centre Limited and Oracle Nominees Limited (1) and The Bear Factory Limited (2) (underlease) | 15 years commencing on 24 June 2001 |
Basic rent is
£137,500 plus 10%
of turnover
received over and
above the basic
rent
Rent review on 24 June 2006 and 24 June 2011 |
||||||||
|
||||||||||||||||
23
|
Reading
Storage Unit For Unit 33 at Riverside Level Oracle Shopping Centre |
The Bear Factory
Limited |
The Bear Factory
Limited |
None | Not registered | 5 July 2001 made between Oracle Shopping Centre Limited and Oracle Nominees Limited (1) The Bear Factory Limited (2) | 15 years commencing on the 24 June 2001 |
£15,000
Rent review on 24 June 2006 and 24 June 2011 |
Page 50
Current Annual Rent | ||||||||||||||||
Date of Lease/ | Length of term and | and Rent Review | ||||||||||||||
No. | Address | Original Tenant | Current Tenant | Guarantor | Title No. | Underlease and Parties | commencement | Dates | ||||||||
24
|
Sheffield
Unit 75 (29 High Street) The Meadowhall Centre |
Stead & Simpson
Limited |
The Bear Factory
Limited |
Hamleys plc | SYK355037 | 1 March 1995 made between Meadowhall Centre Limited (1) and Stead & Simpson Limited (2) | 30 years commencing on 24 February 1995 and expiring on 3 September 2025 |
£280,000
Rent review on 25 December 2004, 2009 and 2014, 2019 and 2024 The rent is subject to a turnover rent plus 10% of turnover received over and above the basic rent [The 2004 rent review currently being negotiated] |
||||||||
|
||||||||||||||||
25
|
Solihull
Unit 37A Touchwood West Midlands |
The Bear Factory
Limited |
The Bear Factory
Limited |
None | Not registered | 10 December 2001 made between Capita (LLRP) Trustee Limited and Lendlease Retail Partnership (1) and The Bear Factory Limited (2) | 15 years from and including 24 June 2001 |
£140,000
Rent review on 24 June 2006 and 24 June 2011 |
||||||||
|
||||||||||||||||
26
|
Stirling
Unit 8 Marches Mall Thistle Shopping Centre |
The Bear Factory
Limited |
The Bear Factory
Limited |
None | Not applicable | Registered date 1 September 2003 and made between The Standard Life Assurance Company (1) and The Bear Factory Limited (2) | 15 years from 21 October 2002 |
£80,000
Rent review on 21 October 2007 and 21 October 2012 |
Page 51
Current Annual Rent | ||||||||||||||||
Date of Lease/ | Length of term and | and Rent Review | ||||||||||||||
No. | Address | Original Tenant | Current Tenant | Guarantor | Title No. | Underlease and Parties | commencement | Dates | ||||||||
27
|
Telford
Basement and Ground Floors Unit 20 Sherwood St Telford Shopping Centre |
The Bear Factory
Limited |
The Bear Factory
Limited |
None | Not registered | 12 March 2003 made between Telford Keystone Estates (No. 1) Limited and Telford Keystone Estates (No. 2) Limited (1) and The Bear Factory Limited (2) | 15 years from 1 July 2002 |
£110,000
Rent Review on 1 July 2007, 1 July 2012 and 1 July 2017 |
||||||||
|
||||||||||||||||
28
|
Watford
43 The Harlequin Shopping Centre Watford |
Hobbies and Models Limited (t/a Toy Stack) |
The Bear Factory
Limited |
None | HD420443 | 2 March 1994 made between Capital & Counties Plc (1) and Hobbies and Models Limited (t/a Toy Stack) (2) | 25 1 / 4 years from 29 September 1991 |
£221,750
8% of the amount by which the turnover exceeds the basic rent Rent review on 29 September 2006, 29 September 2011 and 29 September 2016 |
||||||||
|
||||||||||||||||
29
|
Watford
Storage Unit No 20 The Harlequin Shopping Centre |
Hobbies and Models Limited |
The Bear Factory
Limited |
None | Not registered | 27 October 2000 made between CSC Properties Limited (1) and Hobbies & Models Limited (2) | 5 years commencing on 25 March 2000 (and including) |
£11,430
No rent review |
Page 52
Current Annual Rent | ||||||||||||||||
Date of Lease/ | Length of term and | and Rent Review | ||||||||||||||
No. | Address | Original Tenant | Current Tenant | Guarantor | Title No. | Underlease and Parties | commencement | Dates | ||||||||
30
|
West Thurrock
Unit 283 Lakeside |
Hobbies and Models Limited (t/a Toy Stack) |
The Bear Factory
Limited |
None | EX500102 | 2 March 1994 made between Capital & Counties plc (1) and Hobbies and Models Limited (t/a Toy Stack) (2) | 25 1 / 4 years from 24 June 1993 |
£276,000 rack rent
equating to
£220,800 base rent
together with 8%
that the annual
turnover exceeds
the basic rent
Rent review of the basic rent on 24 June 2008, 24 June 2013 and 24 June 2018 |
||||||||
|
||||||||||||||||
31
|
West Quay
Unit SU52 West Quay Shopping Centre Above Bar Southampton |
The Bear Factory
Limited |
The Bear Factory
Limited |
None | Not registered | 5 June 2001 made between West Quay Shopping Centre Limited (1) and The Bear Factory Limited (2) | 15 years from 29 September 2000 |
£140,000 per annum
together with 10% of
the annual turnover
that exceeds the
basic rent
Rent review on 29 September 2005 and 29 September 2010 |
Page 53
1 | Licences/assignments granted by the Company | |
The Marks referred to below are the Bear Factory, The Bear Factory, BF and Ted the Tailor trade marks and all other trade or service marks or names or logos and designs specified in the franchise manual. |
Brief description | Terms of agreement | Parties to agreement | ||||||||
of rights granted | Territory | Price | Period | Provider | Recipient | |||||
Franchise Agreement
granting rights in
the Marks
|
Kuwait, Saudi Arabia, UAE, Bahrain, Qatar and Lebanon | Royalties | 10 Years from 14 May 2002 | The Bear Factory Limited | Alshaya Trading Co W.L.L. | |||||
|
||||||||||
Franchise Agreement
granting rights in
the Marks
|
Turkey | Royalties | 10 Years | The Bear Factory Limited | Alshaya Trading Co W.L.L. | |||||
|
||||||||||
Franchise Agreement
granting rights in
the Marks
|
Switzerland | Royalties | 10 Years from 29 March 2003 | The Bear Factory Limited | Waldmeier AG | |||||
|
||||||||||
Franchise Agreement
granting rights in
the Marks
|
Stockholm | Royalties | 5 Years from 22 April 2002 | The Bear Factory Limited | Baugur Sverige AB | |||||
|
||||||||||
Franchise Agreement
granting rights in
the Marks
|
Cyprus and Greece | Royalties | 10 Years from 27 August 2003 | The Bear Factory Limited | Maria Xenophontos Ioannou and Xenofoula Xenophontos |
2 | Registered and Pending Trade Marks |
Page 54
1 | Preparation of Completion Accounts |
1.1 | The Completion Accounts and the net current asset statement shall be prepared: |
(a) | under the historical cost convention and in accordance with the specific provisions of paragraph 2 of this Schedule; | ||
(b) | subject to paragraph (a) above, on a basis consistent with the accounting principles, policies and practices (including similar judgments made on matters of judgement) used in the preparation of the Accounts; and | ||
(c) | (so far as not inconsistent with paragraphs (a) and (b) above) in accordance with United Kingdom accounting standards and generally accepted accounting principles. |
1.2 | For the avoidance of doubt paragraph (a) shall take precedence over paragraph (b) and paragraph (c) shall take precedence over paragraph (b). |
1.3 | The Completion Accounts will be prepared on the basis that the business of the Company and the Subsidiary carried on at the Completion Date will be continued in the same manner thereafter and without regard to the consequences of any changes in the nature or conduct of such business or in the scale of its activities, product range or methods of operation or of any other changes whatsoever which are proposed, introduced or take effect on or after the Completion Date. |
1.4 | The Completion Accounts shall take the form set out in the pro-formas in paragraph 3 of this schedule. |
1.5 | The estimated Net Current Asset Value will be derived in respect of the specific line headings set out in the Net Current Asset Value pro-forma in paragraph 3 of this schedule. |
2 | Specific Accounting Treatments |
2.1 | Stock will be valued at the lower of invoice cost (including freight and duty) and net realisable value. Stock includes: |
(a) | all stock purchased by the Company located at the Companys stores and concessions (including at the Vendors store in Regent Street, London) and at the Vendors warehouse. | ||
(b) | stock in transit and any provisions consistent with the Companys Accounting Principles. |
2.2 | Debtors shall include those relating to franchises, concessions, internet sales and any other debtors arising in the normal course of the Companys business and shall be net of any bad debt provision. |
2.3 | Prepayments shall include those relating to rental payments, service charge payments and any other prepayments arising in the normal course of the Companys business. |
2.4 | Trade Creditors shall consist of those arising in the normal course of the Companys business. |
2.5 | Sundry Creditors and Accruals shall include VAT control account, rent free prepayments, net deferred freight and duty accruals and any other accruals arising in the normal course of the Companys business. |
2.6 | No accrual will be made for potential costs relating to the closure of stores. |
2.7 | For the avoidance of doubt, the following shall be excluded from the Completion Accounts: |
(a) | all cash including cash balances and overdrafts for all bank accounts in the Companys name | ||
(b) | Intercompany balances | ||
(c) | Corporation Tax and deferred taxation |
3 | Pro-formas |
3.1 | The numbers contained in the Pro-formas below are for example purposes only and relate to the Companys balance sheet as at December 2005 as provided in the data room. | |
3.2 | Fixed Assets |
Item | £k | |||
Leasehold Properties
|
382 | |||
|
||||
Fixtures & Fittings
|
3,788 | |||
|
||||
Tangible Fixed Assets
|
4,170 | |||
|
||||
Goodwill
|
7,378 | |||
|
||||
Trademarks
|
109 | |||
|
||||
Intangible Fixed Assets
|
7,487 | |||
|
||||
|
||||
Total Fixed Assets
|
11,657 | |||
|
3.3 | Net Current Assets |
Stock
|
1,417 | |||
Debtors
|
220 | |||
Sundry Debtors & Prepayments
|
355 | |||
Current Assets
|
1,992 | |||
|
Trade Creditors
|
(815 | ) | ||
|
||||
Sundry Creditors and Accruals
|
(1,752 | ) | ||
|
||||
Current Liabilities
|
(2,567 | ) | ||
|
||||
|
||||
Net Current Asset Value
|
575 | |||
|
1 | Vendors obligations at Completion | |
1.1 | Board meetings |
(a) | (in the case of the Company only) approve the transfer referred to in paragraph 1.1(d) below for entry in the statutory books of the Company, subject to stamping; | ||
(b) | (in the case of the Company only) approve the payments to be made to or by the Company under Clause 6; | ||
(c) | appoint with effect from the end of the meeting as directors and secretary of each of the Company and the Subsidiary such persons as the Purchaser may nominate; | ||
(d) | (in the case of the Company only) approve the entering into by the Company of the Transitional Services Agreement and the Regent Street Concession Agreement; | ||
(e) | accept the resignations of the directors and secretary referred to in paragraph 1.2(f) below; | ||
(f) | change the accounting reference date of each of the Company and the Subsidiary to 31 December; | ||
(g) | change the registered office of each of the Company and the Subsidiary to St Stephens House, Arthur Road, Windsor, Berkshire SL4 1RU. |
1.2 | Delivery by the Vendor |
(a) | the Disclosure Letter duly executed by the Vendor; | ||
(b) | the Tax Deed duly executed by the Vendor; | ||
(c) | minutes, certified as true by the secretary of each of the Company and the Subsidiary, of the board meetings referred to in paragraph 1.1 above; | ||
(d) | duly executed transfers of the Shares in favour of the Purchaser or its nominees together with the relevant share certificates; | ||
(e) | any power of attorney or other authority under which any transfer referred to above has been executed in each case duly stamped and executed; | ||
(f) | a letter in the agreed form executed as a deed from each of Alasdair Dunn, Nicholas Mather, and Katherine Anne Osborne resigning their respective offices with the Company and the Subsidiary (as appropriate) with effect from the closing of the board meeting referred to in paragraph 1.1, in each case stating that the person concerned has no claim against the Company or the Subsidiary (as appropriate) for breach of contract, compensation for loss of office, redundancy or on any other account whatsoever; | ||
(g) | the statutory books and registers up to date immediately prior to Completion, certificate(s) of incorporation and of incorporation on change of name and the common seal of each of the Company and the Subsidiary; |
(h) | the Regent Street Concession Agreement duly executed by the Vendor and the Company; | ||
(i) | the Property Documents; | ||
(j) | an undertaking from the Vendors Solicitors to the Purchaser to deliver executed discharges in a form acceptable to the Purchaser (acting reasonably) of the Vendor Charges and the Company Charges; | ||
(k) | save as otherwise agreed by the Purchaser, any and all books, records, journals, ledgers, accounts, agreements and other documents (including, in the case of any such which are kept or maintained on computer or otherwise electronically, such printouts, disks, tapes and other copies as the Purchaser may require) of the Company together with such information and things as the Purchaser will need to access any of the foregoing provided that the Vendor shall be entitled for a period of 14 days following Completion to retain such accounting records as it deems reasonably necessary to enable it and its Accountants to prepare the Completion Accounts but only on the basis that the Purchaser and its Accountants are promptly provided with access to all such retained records and afforded all such reasonable assistance, including the provision of photocopies of the relevant records, as they may reasonably request; | ||
(l) | a copy, certified as correct by the secretary of the Vendor, of a minute of the board of directors of the Vendor approving the transaction hereby contemplated and authorising the signature, execution and completion (as appropriate) of this Agreement and the documents ancillary to this Agreement; | ||
(m) | a power of attorney in the agreed form authorising the Purchaser to exercise all the Vendors rights as a shareholder of the Company until registration of the transfer of the Shares to the Purchaser; and | ||
(n) | the Transitional Services Agreement duly executed by the Vendor and the Company. |
2 | Purchasers obligations at Completion | |
2.1 | Consideration |
2.2 | Delivery by the Purchaser |
(a) | a copy, certified as correct by an authorised officer of the Purchaser, of a resolution of the board of directors of the Purchaser approving the transaction hereby contemplated and authorising the signature, execution and completion (as appropriate) of this Agreement and the documents ancillary to this Agreement; | ||
(b) | the Disclosure Letter duly executed by the Purchaser; | ||
(c) | the Tax Deed duly executed by the Purchaser; | ||
(d) | the Transitional Services Agreement duly executed by the Purchaser; and | ||
(e) | the Regent Street Concession Agreement duly executed by the Purchaser. |
/s/
Nick L. Mather
|
||||||
Signed
by
|
) | |||||
for and on behalf of
|
) | |||||
The Hamleys Group Limited
|
) | |||||
|
||||||
|
||||||
/s/ Maxine Clark
|
||||||
Signed
by
|
) | |||||
for and on behalf of
|
) | |||||
Build-A-Bear Workshop UK
|
) | |||||
Holdings Limited
|
) | |||||
|
||||||
|
||||||
/s/ Alasdair R. Dunn
|
||||||
Signed
by
|
) | |||||
for and on behalf of
|
) | |||||
The Bear Factory Limited
|
) |
Date:
|
March 3, 2006 | |||
Document Number:
|
2309564.12 | |||
Matter Number:
|
0184713 |
Page | ||||
1. INTERPRETATION
|
1 | |||
2. CONDITIONS
|
5 | |||
3. SALE AND PURCHASE
|
6 | |||
4. PURCHASE PRICE
|
6 | |||
5. COMPLETION
|
6 | |||
6. INDEMNITY RELATING TO SHARE OPTIONS AND AM OPTIONS
|
8 | |||
7. WARRANTIES
|
8 | |||
8. LIMITATIONS ON CLAIMS
|
9 | |||
9. WARRANTY AND INDEMNITY INSURANCE
|
12 | |||
10. TAX COVENANT
|
12 | |||
11. RESTRICTIONS ON SELLER
|
12 | |||
12. GUARANTEE
|
13 | |||
13. TERMINATION OF THE SHAREHOLDERS AGREEMENT
|
15 | |||
14. CONFIDENTIALITY AND ANNOUNCEMENTS
|
15 | |||
15. FURTHER ASSURANCE
|
16 | |||
16. ASSIGNMENT
|
16 | |||
17. WHOLE AGREEMENT
|
17 | |||
18. VARIATION AND WAIVER
|
17 | |||
19. COSTS
|
17 | |||
20. NOTICE
|
17 | |||
21. INTEREST ON LATE PAYMENT
|
19 | |||
22. SEVERANCE
|
19 | |||
23. AGREEMENT SURVIVES COMPLETION
|
19 | |||
24. THIRD PARTY RIGHTS
|
19 | |||
25. SUCCESSORS
|
20 | |||
26. COUNTERPARTS
|
20 | |||
27. LANGUAGE
|
20 | |||
28. GOVERNING LAW AND JURISDICTION
|
20 | |||
Schedule 1 PARTICULARS OF THE COMPANY AND SUBSIDIARIES
|
21 | |||
Schedule 2 CONDITIONS
|
26 | |||
Schedule 3 COMPLETION
|
27 | |||
Schedule 4 WARRANTIES
|
32 | |||
Schedule 5 TAX COVENANT
|
55 | |||
Schedule 6 INTELLECTUAL PROPERTY RIGHTS LICENSED FROM THIRD PARTIES
|
66 | |||
Schedule 7 PARTICULARS OF PROPERTIES
|
70 |
(1) | The persons listed in Part 2 of Schedule 1 ( Seller ); | |
(2) | Build-A-Bear Workshop, Inc., a corporation organised under the laws of the state of Delaware whose principal office is at 1954 Innerbelt Business Centre, St. Louis, MO 63114-5760, USA in its capacity as Guarantor ( BABW ); | |
(3) | Build-A-Bear Workshop UK Holdings Limited, a company incorporated in England and Wales under number 05651132 whose principal office is at St Stephens House, Arthur Road, Windsor, Berkshire SL4 1RU ( Buyer ); and | |
(4) | Andrew Mackay of 10 Roseberry Crescent, Edinburgh EH12 5JY ( AM ). |
(A) | The Company has an issued share capital of £39,894.56 divided into 2,737,149 ordinary voting A shares of 1p each and 1,252,307 ordinary non-voting B shares of 1p each. | |
(B) | Further particulars of the Company at the date of this agreement are set out in Schedule 1, Part 1. | |
(C) | The Seller has agreed to sell and the Buyer has agreed to buy the Sale Shares subject to the terms and conditions of this agreement. |
1 | INTERPRETATION | |
1.1 | The definitions and rules of interpretation in this clause apply in this agreement. | |
Accounts: each of the audited financial statements of the Company up to the Accounts Date, including in each case the notes thereon and the auditors and Directors reports (copies of which are attached to the Disclosure Letter). | ||
Accounts Date: 3l st December 2004. | ||
A Ordinary Shares: all A ordinary voting shares in the capital of the Company. | ||
B Ordinary Shares: all B ordinary non-voting shares in the capital of the Company. | ||
BABW Loan: the loan of $4,425,000 from Build-A-Bear Workshop Franchise Holdings, Inc. to Amsbra Ltd. | ||
Boldswitch Limited: a company registered in England and Wales under company number 02307096 whose registered office is at 10 Cornwall Terrace, London NW1 4QP. | ||
Business: the business of the Company, namely the retail of build your own teddy bears. | ||
Business Day: a day (other than a Saturday, Sunday or public holiday) when banks in the City of London are open for business. |
1
Buyers Solicitors: Bryan Cave, 33 Cannon Street, London EC4M STE. | ||
CAA 2001: the Capital Allowances Act 2001. | ||
Claim and Substantiated Claim: have the meanings set out respectively in clause 8 (Limitations on claims). | ||
Company: Amsbra Limited, a company incorporated and registered in England and Wales with company number 04537212 whose registered office is at St. Stephens House, Arthur Road, Windsor, Berkshire SL4 1RU further details of which are set out in Part 1 of Schedule 1. | ||
Companies Acts: the Companies Act 1985 and the Companies Act 1989. | ||
Completion: completion of the sale and purchase of the Sale Shares in accordance with this agreement. | ||
Completion Date: has the meaning given in clause 5 (Completion). | ||
Conditions: the conditions set out in Schedule 2 (Conditions). | ||
Connected: in relation to a person, has the meaning contained in section 839 of the ICTA 1988. | ||
Control: in relation to a body corporate, 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, |
and 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. | ||
Director: each person who is a director or shadow director of the Company, the names of whom are set out in Part 1 of Schedule 1 . | ||
Disclosed: fairly and clearly disclosed (with sufficient detail to identify the nature and scope of the matter disclosed) in or under the Disclosure Letter. | ||
Disclosure Letter: the letter from the Warrantors to the Buyer with the same date as this agreement that is described as the disclosure letter, including the bundle of documents attached to it (Disclosure Bundle) and any further letter from the Warrantors to the Buyer on a date which is one day before the Completion Date which may contain further disclosures. | ||
Encumbrance: any interest or equity of any person (including any right to acquire, option or right of pre-emption) or any mortgage, charge, pledge, lien, assignment, hypothecation, security, title, retention or any other security agreement or arrangement. | ||
Event: has the meaning given in Schedule 5 (Tax covenant). |
2
Faber France: a company incorporated in France whose registered office is at 1 Bis, Rue Lanneau, 75005 Paris. | ||
AM Options: the 294,615 options held by AM over 235,692 A Ordinary Shares and 58,923 B Ordinary Shares. | ||
Group: in relation to a company (wherever incorporated) that company, any company of which it is a Subsidiary (its holding company) and any other Subsidiaries of any such holding company; and each company in a group is a member of the group. | ||
Unless the context otherwise requires, the application of the definition of Group to any company at any time will apply to the company as it is at that time. | ||
Guarantor: BABW. | ||
HMRC: HM Revenue & Customs. | ||
ICTA 1988: the Income and Corporation Taxes Act 1988. | ||
IHTA 1984: the Inheritance Tax Act 1984. | ||
Individual Vendors: the Seller save for the Warrantors, Boldswitch Limited and Wittington Investments Limited. | ||
Intellectual Property Rights: has the meaning given in paragraph 85 of Part 1 of Schedule 4 (Warranties). | ||
Issued Shares: 3,989,456 issued and fully paid shares in the Company comprising 2,737,149 A Ordinary Shares and 1,252,307 B Ordinary Shares. | ||
Lombard Finance Lease: an agreement with Lombard Finance Limited and the Company dated 8 April 2004 in relation to the stuffing machines, EPOS, computer equipment and air conditioning. | ||
Management Accounts: the unaudited consolidated balance sheet and the unaudited consolidated profit and loss account of the Company (including, in each case, any notes thereon) for the period of 12 months ended 31 December 2005 (a copy of which is attached to the Disclosure Letter). | ||
Option Holders: Steven Bedford, Rupert Ashe, Sian Jones, Greg Pickers, James Hobbs, and Laura Neaves. | ||
Pension Scheme: The Build-A-Bear Workshop Group Stakeholder Pension Scheme. | ||
Previously-owned Land and Buildings: has the meaning given in paragraph 115 of Part 1 of Schedule 4 (Warranties). | ||
Properties: has the meaning given in paragraph 111 of Part 1 of Schedule 4 (Warranties). | ||
Sale Shares: the Issued Shares. | ||
Sellers Solicitors: Rosenblatt, 9-13 St. Andrew Street, London EC4A 3AF |
3
Share Options: the 705,385 options held by the Option Holders at the date hereof to acquire 564,308 A Ordinary Shares and 141,077 B Ordinary Shares, a total of 705,385 shares in the Company. | ||
Shareholders Agreement: an agreement between Amsbra Limited (1), the Investor Group (2), Rupert Ashe (3), Steven Bedford (4), Andrew Mackay (5) and The Trust Corporation of the Channel Islands Limited as the Trustees of the Granola Trust (6) dated 12 May 2003. | ||
Subsidiary: in relation to a company wherever incorporated (a holding company) means a subsidiary as defined in section 736 of the Companies Act 1985 and any other company which is a subsidiary (as so defined) of a company which is itself a subsidiary of such holding company. | ||
Unless the context otherwise requires the application of the definition of Subsidiary to any company at any time will apply to the company as it is at that time. | ||
Tax Covenant: the tax covenant in the form set out in Schedule 5 (Tax covenant) to be entered into and delivered at Completion. | ||
Tax or Taxation: has the meaning given in Schedule 5 (Tax covenant). | ||
Tax Claim: has the meaning given in Schedule 5 (Tax covenant). | ||
Tax Warranties: the Warranties in Part 2 of Schedule 4 (Warranties). | ||
Taxation Authority: has the meaning given in Schedule 5 (Tax covenant). | ||
Taxation Statute: has the meaning given in Schedule 5 (Tax covenant). | ||
TCGA 1992: the Taxation of Chargeable Gains Act 1992. | ||
TMA 1970: the Taxes Management Act 1970. | ||
Transaction: the transaction contemplated by this agreement or any part of that transaction. | ||
VATA 1994: the Value Added Tax Act 1994. | ||
Warranties: the warranties in clause 7 (Warranties) and Schedule 4 (Warranties). | ||
Warrantors: Rupert Ashe, Steven Bedford and Andrew Mackay. | ||
Wittington Investments Limited: a company incorporated in England and Wales under company no. 00366054 and whose registered office is at Weston Centre, 10 Grosvenor Street, London WK 4QY. | ||
1.2 | Clause and schedule headings do not affect the interpretation of this agreement. | |
1.3 | A person includes a corporate or unincorporated body. | |
1.4 | Words in the singular include the plural and in the plural include the singular. |
4
(a) | the provisions set out in clause 2.3; and | ||
(b) | any rights or liabilities that have accrued under this agreement. |
2.3 | The following provisions shall continue to have effect, notwithstanding failure to waive or satisfy the Conditions: |
(a) | clause 1 (Interpretation); | ||
(b) | clause 2.2 and clause 2.3 (Conditions); | ||
(c) | clause 14 (Confidentiality and announcements); | ||
(d) | clause 17 (Whole agreement); | ||
(e) | clause 18 (Variation and waiver); | ||
(f) | clause 19 (Costs); | ||
(g) | clause 20 (Notice); | ||
(h) | clause 27 (Language); and | ||
(i) | clause 28 (Governing law and jurisdiction). |
2.4 | The Warrantors and the Buyer shall use all reasonable endeavours (so far as lies within their respective powers) to procure that the Conditions in paragraphs 2 to 4 of Schedule |
5
2 are satisfied and the Warrantors shall ensure that the Condition in paragraph 1 of Schedule 2 is satisfied as soon as practicable and in any event no later than 6.00 pm: |
(a) | on 30 May 2006; or | ||
(b) | at such other time and date as may be agreed in writing by the Warrantors and the Buyer. |
2.5 | The Buyer and the Warrantors shall co-operate fully in all actions necessary to procure the satisfaction of the Conditions including, but not limited to, the provision by all parties of all information reasonably necessary to make any notification or filing that the Buyer deems to be necessary or as requested by any relevant authority, keeping all parties informed of the progress of any notification or filing and providing such assistance as may reasonably be required. | |
2.6 | The Buyer may, to such extent as it thinks fit and is legally entitled to do so, waive any of the Conditions in Schedule 2 by written notice to the Seller. | |
3. | SALE AND PURCHASE | |
3.1 | On the terms of this agreement and subject to the Conditions, the Seller shall sell and the Buyer shall buy, with effect from Completion, the Sale Shares with full title guarantee free from all Encumbrances and together with all rights that attach (or may in the future attach) to them including, in particular, the right to receive all dividends and distributions declared, made or paid on or after the date of this agreement. | |
3.2 | At Completion the Buyer will advance the sum of £500,000 to the Company to enable the Company to repay its loan obligation in such sum to Wittington Investments Limited and the Company will repay such sum to Wittington Investments Limited on Completion. | |
4. | PURCHASE PRICE | |
4.1 | Subject to clause 4.2 below, the consideration for the Issued Shares is £5,500,000 payable in cash at Completion to the Sellers Solicitors and shall be payable to the Seller in the amounts set out in column five of Schedule 1, Part 2. | |
4.2 | The consideration to be paid under clauses 4.1 hereof shall be deemed to be reduced by the amount of any payment made to the Buyer: |
(a) | for a breach of any Warranty; or | ||
(b) | under the Tax Covenant. |
5. | COMPLETION | |
5.1 | Completion shall take place on the Completion Date at 2pm: |
(a) | at the offices of the Buyers Solicitors; or | ||
(b) | at any other place or time as agreed in writing by the Seller and the Buyer. |
6
5.2 | Completion Date means the first Business Day which is three Business Days after satisfaction or waiver of the Conditions, or if Completion is deferred in accordance with clause 5.7, the date to which it is deferred. | |
5.3 | The Buyer shall use its best endeavours to give the Seller 7 days notice in writing of the expected Completion Date. | |
5.4 | Each Seller undertakes to exercise the votes attaching to the Sale Shares held by it so as to procure to the extent that it is able that the Business shall be conducted in the manner provided in Part 3 of Schedule 3 (Completion) from the date of this agreement until Completion and the Warrantors give the Buyer the undertakings set out in that Schedule. | |
5.5 | At Completion the Seller shall: |
(a) | deliver or cause to be delivered the documents and evidence set out in Part 2 of Schedule 3; | ||
(b) | procure that a board meeting of the Company is held at which the matters identified in Part 3 of Schedule 3 are carried out; and | ||
(c) | deliver any other documents referred to in this agreement as being required to be delivered by the Seller. |
5.6 | At Completion the Buyer shall: |
(a) | pay the consideration payable hereunder by telegraphic transfer to the Sellers Solicitors (who are irrevocably authorised to receive the same). Payment in accordance with this clause shall constitute a valid discharge of the Buyers obligations under clause 4.1; | ||
(b) | deliver a certified copy of the resolution adopted by the board of directors of the Buyer authorising the Transaction, and the execution and delivery by the officers specified in such resolution of this agreement, and any other documents referred to in this agreement as being required to be delivered by it. |
5.7 | If the Seller does not comply with clause 5.5 in any material respect, the Buyer may, without prejudice to any other rights it has: |
(a) | proceed to Completion; or | ||
(b) | defer Completion to a date no more than 28 days after the date on which Completion would otherwise have taken place; or | ||
(c) | rescind this agreement. |
5.8 | The Buyer may defer Completion under clause 5.7 only once, but otherwise clause 5 applies to a Completion deferred under that clause as it applies to a Completion that has not been deferred. | |
5.9 | As soon as possible after Completion the Seller shall send to the Buyer (at the Buyers registered office for the time being) all records, correspondence, documents, files, memoranda and other papers relating to the Company not required to be delivered at Completion and which are not kept at any of the Properties. |
7
5.10 | The parties agree that at Completion the Company shall have no indebtedness other than trade creditors accruing through the ordinary activities of the Company, the loan of £500,000 repayable to Wittington Investments Limited, the monies due under the Lombard Finance Lease and the monies due under the BABW Loan. | |
6. | INDEMNITY RELATING TO SHARE OPTIONS AND AM OPTIONS | |
6.1 | The Warrantors shall indemnify the Buyer and the Company in respect of all losses, costs, liabilities, penalties and expenses (including without limitation reasonable legal and other professional fees) incurred by the Buyer or the Company which result from: |
(a) | the continued existence of the Share Options and the AM Options following the date of Completion; and/or | ||
(b) | the termination of the Share Options and the AM Options (whether defective or otherwise). |
7. | WARRANTIES | |
7.1 | The Buyer is entering into this agreement on the basis of, and in reliance on, the Warranties. | |
7.2 | The Warrantors warrant to the Buyer that each Warranty (other than the Warranties in paragraph 5 and 6 of Schedule 4) is true, accurate and not misleading on the date of this agreement except as Disclosed and the Warrantors, Boldswitch Limited, Wittington Investments Limited and the Individual Vendors severally warrant to the Buyer that paragraphs 5 and 6 of Schedule 4 are true, accurate and not misleading on the date of this agreement in relation to such shares of the Company as are being sold by them. | |
7.3 | The Warranties are deemed to be repeated on each day up to and including the Completion Date and any reference made to the date of this agreement (whether express or implied) in relation to any Warranty shall be construed, in relation to any such repetition, as a reference to each such day. | |
7.4 | The Seller and the Warrantors (in respect only of the warranties given by each of them respectively) shall ensure that the Company does not do or omit to do anything which would, at any time before or at Completion, be inconsistent with any of the Warranties, breach any Warranty or make any Warranty untrue or misleading. | |
7.5 | Without prejudice to the right of the Buyer to claim on any other basis or take advantage of any other remedies available to it, if any Warranty is breached or proves to be untrue or misleading, the Warrantors (or Boldswitch Limited, Wittington Investments Limited or the Individuals Vendors in relation to paragraphs 5 and 6 of Schedule 4) shall pay to the Buyer on demand: |
(a) | the amount necessary to put the Company into the position it would have been in if the Warranty had not been breached or had not been untrue or misleading; and | ||
(b) | all costs and expenses (including, legal and other professional fees and costs) incurred by the Buyer or the Company as a result of such breach or of the Warranty being untrue or misleading. |
8
A payment made in accordance with the provisions of this clause 7.5 shall include any amount necessary to ensure that, after any Taxation of the payment, the Buyer is left with the same amount it would have had if the payment was not subject to Taxation. | ||
7.6 | If at any time before or at Completion the Warrantors (or Boldswitch Limited, Wittington Investments Limited and the Individual Vendors in relation to paragraphs 5 and 6 of Schedule 4) become aware that a Warranty has been breached, is untrue or is misleading, or has a reasonable expectation that any of those things might occur, it shall immediately: |
(a) | notify the Buyer in sufficient detail to enable the Buyer to make an accurate assessment of the situation; and | ||
(b) | if requested by the Buyer, use its best endeavours to prevent or remedy the notified occurrence. |
7.7 | If at any time before or at Completion it becomes apparent that a Warranty has been breached, is untrue or misleading, or that the Seller has breached any other term of this agreement that in either case is material to the sale of the Sale Shares, the Buyer may (without prejudice to any other rights it may have in relation to the breach): |
(a) | rescind this agreement by notice to the Seller; or | ||
(b) | proceed to Completion. |
7.8 | Warranties qualified by the expression so far as the Warrantors are aware (or any similar expression) are deemed to be given to the best of the knowledge, information and belief of the Warrantors after they have made all reasonable and careful enquiries Provided That it is acknowledged that the Warrantors have not carried out any searches of the local authority in respect of the Properties. | |
7.9 | Each of the Warranties is separate and, unless otherwise specifically provided, is not limited by reference to any other Warranty or any other provision in this agreement. | |
7.10 | With the exception of the matters Disclosed, no information of which the Buyer and/or its agents and/or advisers has knowledge (actual, constructive or imputed) or which could have been discovered (whether by investigation made by the Buyer or made on its behalf) shall prejudice or prevent any Claim or reduce any amount recoverable thereunder. | |
7.11 | In accordance with clause 7.10 above the Buyer confirms that it does not at the date hereof know of any fact, matter or circumstance that entitles it to make a Claim against the Company, or any claim under the Tax Covenant. | |
8. | LIMITATIONS ON CLAIMS | |
8.1 | The definitions and rules of interpretation in this clause apply in this agreement. | |
Claim: a claim for breach of any of the Warranties (excluding for the avoidance of doubt any claim under the Tax Covenant). | ||
Substantiated Claim: a Claim in respect of which liability is admitted by the party against whom such Claim is brought, or which has been adjudicated on by a Court of |
9
competent jurisdiction and no right of appeal lies in respect of such adjudication, or the parties are debarred by passage of time or otherwise from making an appeal. | ||
A Claim is connected with another Claim or Substantiated Claim if they all arise out of the occurrence of the same event or relate to the same subject matter. | ||
8.2 | This clause limits the liability of the Seller in relation to any Claim and, where specified, any claim under the Tax Covenant. | |
8.3 | The liability of the Seller for all Substantiated Claims and all claims under the Tax Covenant shall not exceed £3,300,000. | |
8.4 | The Seller shall not be liable for a Claim unless: |
(a) | the amount of a Substantiated Claim, or of a series of connected Substantiated Claims of which that Substantiated Claim is one, exceeds £5,000; | ||
(b) | the amount of all Substantiated Claims that are not excluded under clause (a) when taken together, exceed £100,000, in which case the whole amount (and not just the amount by which the limit in this clause (b) is exceeded) is recoverable by the Buyer. |
8.5 | The Seller is not liable for a Claim or a claim under the Tax Covenant to the extent that the Claim or a claim under the Tax Covenant: |
(a) | relates to matters Disclosed; or | ||
(b) | relates to any matter specifically and fully provided for in the Accounts or the Management Accounts. |
8.6 | The Seller is not liable for a Claim or a claim under the Tax Covenant unless the Buyer has given the Seller notice in writing of the Claim or the claim under the Tax Covenant, summarising the nature of the Claim or claim under the Tax Covenant as far as it is known to the Buyer and the amount claimed: |
(a) | in the case of a claim made under the Tax Warranties or the Tax Covenant, within the period of seven years beginning with the Completion Date; and | ||
(b) | in any other case, within the period of 14 months beginning with the Completion Date, |
and unless proceedings in respect of which shall have been commenced and served on the relevant Seller within six months of the date of such notice save in respect of a notified Claim or claim under the Tax Covenant where liability is contingent on an act or omission of a third party in which case such period shall only run from the date upon which the Claim or claim under the Tax Covenant ceases to be contingent. | ||
8.7 | Nothing in clause 8 applies to a Claim or a claim under the Tax Covenant that arises or is delayed as a result of dishonesty, fraud, wilful misconduct or wilful concealment by the Seller, its agents or advisers. | |
8.8 | The Warrantors shall not plead the Limitation Act 1980 in respect of any claims made under the Tax Warranties or Tax Covenant up to seven years after the Completion Date. |
10
8.9 | Where the Buyer or the Company is entitled to recover from some other person or entity, including (but without limitation) under the terms of any insurance policy of the Company, any sum in respect of any matter or event giving rise to a Claim, the Buyer shall endeavour to recover that sum at the Warrantors cost and, if any sum is so recovered, then either the amount payable by the Warrantors in respect of such Claim shall be reduced by an amount equal to the sum recovered or, if any amount shall already have been paid by the Warrantors in respect of such Claim, there shall be repaid to the Warrantors an amount equal to the sum recovered or, if less, the amount of such payment by the Warrantors. | |
8.10 | If any Claim arises by reason of a liability of the Company which is a contingent liability when such Claim is notified to the Warrantors, then the Warrantors shall not be obliged to make any payment to the Buyer until such time as the contingent liability ceases to be contingent and becomes an actual liability. | |
8.11 | If the same fact, matter, event or circumstance gives rise to more than one Claim, the Buyer shall not be entitled to recover more than once in respect of the same fact, matter, event or circumstance. | |
8.12 | The Buyer shall not be entitled to recover any sum in respect of any Claim if and to the extent that it has already obtained reimbursement pursuant to a claim under the Tax Covenant or vice versa. | |
8.13 | The Warrantors shall have no liability in respect of any Claim or under the Tax Covenant: |
(a) | to the extent that the Claim in question arises, or is increased, as a result of any increase in rates of Taxation or any change in the law or published practice and/or interpretation of a Taxation Authority made after the date of Completion with retrospective effect; or | ||
(b) | to the extent that the Claim in question arises, or is increased, as a result of any change in any accounting policy or practice of the Company made on or after Completion. |
8.14 | The amount of any Claim shall take into account the amount of any reduction in or relief from Taxation arising by virtue of the loss or damage in respect of which the Claim is made. | |
8.15 | For the avoidance of doubt nothing in this clause 8 shall limit the Buyers obligation to mitigate any losses or damages which it may suffer in consequence of any breach by the Warrantors of any of the Warranties or any fact, matter, event or circumstance giving rise to a Claim. | |
8.16 | The Buyer acknowledges and agrees with the Warrantors that is has not entered into this agreement in reliance on any representations, warranties or undertakings of any kind other than the Warranties (as qualified by the Disclosure Letter) where the Buyers only remedy (on an indemnity basis) shall be for breach of contract, and that, with the exception of representations made fraudulently, the Buyer will have no remedy against the Warrantors in respect of any representation made on or prior to the date of this agreement. |
11
9. | WARRANTY AND INDEMNITY INSURANCE | |
9.1 | The parties acknowledge that the Buyer will have taken out insurance cover with New Hampshire Insurance Company by the Completion Date. It is acknowledged that the insurance premium will be £100,000 and the excess on the policy will be £100,000 (Excess). | |
9.2 | The Warrantors and the Buyer hereby agree that they shall not do any deliberate or intentional act to render such insurance policy void or voidable. | |
9.3 | The Buyer agrees to pay the sum of £40,000 by way of contribution to the premium for such insurance cover which shall be payable on Completion. In the event of a claim under such insurance cover the Buyer will pay the Excess. | |
9.4 | The Warrantors and the Buyer shall each provide the other copies of any information which they have supplied to the insurer for the purposes of obtaining the insurance cover prior to Completion. | |
10. | TAX COVENANT | |
On Completion, the Warrantors and the Buyer shall enter into the Tax Covenant in Schedule 5. | ||
11. | RESTRICTIONS ON WARRANTORS AND WITTINGTON INVESTMENTS LIMITED | |
11.1 | The Warrantors and Wittington Investments Limited, covenant severally with the Buyer that they shall not and Wittington Investments Limited shall procure that each of its Subsidiaries shall not: |
(a) | at any time during the period of 4 years for the Warrantors and 2 years for Wittington Investments Limited beginning with the Completion Date, in any geographic areas in which any business of the Company was carried on at the Completion Date, carry on or be employed, engaged or interested in any business which would be in competition with any part of the Business as the Business was carried on at the Completion Date; or | ||
(b) | at any time during the period of 2 years beginning with the Completion Date: |
(i) | offer employment to, enter into a contract for the services of or attempt to entice away from the Company, any individual who is at the time of the offer or attempt, and was at the Completion Date, employed or directly engaged in an executive or managerial position with the Company; or | ||
(ii) | procure or facilitate the making of any such offer or attempt by any other person; or |
(c) | at any time after Completion, use in the course of any business: |
(i) | any trade or service mark, business or domain name, design or logo which, at Completion, was or had been used by the Company; or |
12
(ii) | anything which is, in the reasonable opinion of the Buyer, capable of confusion with such words, mark, name, design or logo; or |
(d) | at any time during a period of 12 months beginning with the Completion Date, solicit or entice away from the Company any supplier to the Company who had supplied goods and/or services to the Company at any time during the 12 months immediately preceding the Completion Date, if that solicitation or enticement causes or would cause such supplier to cease supplying, or materially reduce its supply of those goods and/or services to the Company. |
11.2 | The covenants in this clause 11 are intended for the benefit of the Buyer and the Company and apply to actions carried out by the Warrantors and Wittington Investments Limited or any of its Subsidiaries in any capacity and whether directly or indirectly, on the Warrantors and Wittington Investments Limiteds or its Subsidiarys own behalf or on behalf of any other person or jointly with any other person. | |
11.3 | Nothing in this clause 11 prevents the Warrantors and Wittington Investments Limited or any of its Subsidiaries from holding for investment purposes only: |
(a) | any units of any authorised unit trust; or | ||
(b) | not more than 3% of any class of shares or securities of any company traded on the London Stock Exchange or the New York Stock Exchange; or | ||
(c) | such shares in Faber France as they own at the date hereof. |
11.4 | Each of the covenants in this clause 11 is a separate undertaking and shall be enforceable by the Buyer separately and independently of its right to enforce any one or more of the other covenants contained in this clause 11. Each of the covenants in this clause 11 is considered fair and reasonable by the parties, but if any restriction is found to be unenforceable, but would be valid if any part of it were deleted or the period or area of application reduced, the restriction shall apply with such modifications as may be necessary to make it valid and enforceable. | |
11.5 | The consideration for the undertakings contained in this clause 11 is included in the consideration payable under clause 4.1 of this agreement. | |
12. | GUARANTEE | |
12.1 | In consideration of the Seller entering into this agreement, the Guarantor unconditionally and irrevocably, as a continuing obligation, hereby guarantees to the Seller the proper and punctual observance and performance by the Buyer of all its obligations, commitments and undertakings under or pursuant to this agreement and agrees to indemnify the Seller against all loss, damages, costs and expenses which the Seller may suffer through or arising from a failure by the Buyer so to perform and observe any of its obligations, commitments and undertakings under or pursuant to this agreement provided that in respect of the guarantee and indemnity hereunder the Buyers failure to observe or perform the obligations, commitments and undertakings under or pursuant to this agreement results from the Buyers insolvency or liquidation. In the event of the Buyers insolvency or liquidation, the Guarantor at its discretion shall have the right to step in to the position of the Buyer and perform the Buyers obligations and receive the benefit of the Buyers rights under this agreement. |
13
12.2 | If a the Buyer fails as a result of the Buyers insolvency or liquidation to perform or observe any of the obligations, commitments or undertakings referred to in this agreement, the Guarantor shall forthwith upon demand unconditionally perform (or procure the performance or observance of) and satisfy (or procure the satisfaction of) the obligation, commitment or undertaking in regard to which this failure has occurred in the manner prescribed in this agreement and so that the same benefits shall be received by, or conferred on, the Seller as they would have had if such obligation, commitment or undertaking had been duly performed, observed and satisfied by the Buyer. | |
12.3 | The Guarantors liability under this clause 12 shall remain in force until all of the Buyers obligations, commitments and undertakings under or pursuant to this agreement have been fully performed and discharged and all sums payable by the Buyer under this agreement have been fully paid. Nothing shall impair or discharge the Guarantors liability or obligations under this clause 12 and this shall apply, without limitation, in relation to: |
(a) | the existence, validity, taking or renewal of any other guarantee, security, right of recourse, set off or combination or other right or interest held by the Seller in relation to this agreement or any demand or enforcement of, neglect to perfect, failure to demand or enforce or the release or waiver of any such guarantee, security, right of recourse, set off or combination or other right or interest; or | ||
(b) | any amendment to or variation (howsoever substantial or material) of this agreement or any security or other document relating to this agreement or any assignment of this agreement or any waiver or departure from its terms or any such security or document; or | ||
(c) | any release of, or granting of time or any other indulgence to, the Buyer or any other person; or | ||
(d) | any winding up, dissolution, reconstruction, arrangement or reorganisation, legal limitation, disability, incapacity or lack of corporate power or authority or other circumstances of, or any change in the constitution or corporate identity (including amalgamation) or loss of corporate identity by, the Buyer, the Seller, the Guarantor or any other person (or any act taken by the Buyer, the Seller, the Guarantor or any other person in relation to any such event); or | ||
(e) | any other circumstances which might render void or unenforceable the obligations, commitments and undertakings of the Buyer under this agreement or which might affect the Sellers ability to recover amounts from the Buyer. |
12.4 | Demands may be made by the Seller under this clause 12 from time to time. The obligations of the Guarantor under this clause 12 are continuing obligations and shall extend to all of the obligations from time to time of the Buyer, regardless of any intermediate payment or discharge in whole or in part, and are in addition to and not in substitution for any other security which the Seller may now or in the future hold for the obligations of the Buyer under this agreement and may be enforced by the Seller without the Seller first having recourse to any such other security or taking any steps or proceedings against the Buyer. | |
12.5 | Any release, compromise or discharge of the obligations of the Guarantor shall be deemed to be made subject to the condition that it will be void if any payment, |
14
(a) | information that is or becomes public knowledge other than as a direct or indirect result of a breach of this agreement; or | ||
(b) | information that it receives from a source not connected with the party to whom the duty of confidence is owed that it acquires free from any obligation of confidence to any other person. |
14.5 | Any party may disclose any information that it is otherwise required to keep confidential under this clause 14: |
(a) | to such professional advisers, consultants and employees or officers of its Group as are reasonably necessary to advise on this agreement, or to facilitate the Transaction, if the disclosing party procures that the people to whom the information is disclosed keep it confidential as if they were that party; or | ||
(b) | with the written consent of all the other parties; or |
15
(c) | to confirm that the sale has taken place and the date of the sale (but without otherwise revealing any other items of sale or making any other announcement); or | ||
(d) | to the extent that the disclosure is required: |
(i) | by law; or | ||
(ii) | by a regulatory body, Taxation Authority or securities exchange; or | ||
(iii) | to make any filing with, or obtain any authorisation from, a regulatory body, Taxation Authority or securities exchange; or | ||
(iv) | under any arrangements in place under which negotiations relating to terms and conditions of employment are conducted; or | ||
(v) | to protect the disclosing partys interest in any legal proceedings, |
(a) | the Seller may discharge its obligations under this agreement to the assignor until it receives notice of the assignment; and | ||
(b) | the assignee may enforce this agreement as if it were a party to it, but the Buyer shall remain liable for any obligations under this agreement. |
16
(a) | shall be in writing in the English language (or be accompanied by a properly prepared translation into English); | ||
(b) | shall be sent for the attention of the person, and to the address or fax number, specified in this clause 20 (or such other address, fax number or person as each party may notify to the others in accordance with the provisions of this clause 20); and | ||
(c) | shall be: |
(i) | delivered personally; or | ||
(ii) | sent by fax; or | ||
(iii) | sent by pre-paid first-class post or recorded delivery; or |
17
(iv) | (if the notice is to be served by post outside the country from which it is sent) sent by airmail. |
20.2 | The addresses for service of notice are: |
(a) |
Steven Bedford (as Seller representative)
Audley Mead 20 Bolton Avenue Windsor SL4 3JF |
||
cc. |
Rosenblatt
9-13 St Andrew Street London EC4A 3AF Tel: 020 7955 0880 Fax: 020 7955 0888 |
||
(b) |
Build-A-Bear UK Holdings Limited
St Stephens House Arthur Road Windsor Berkshire SL4 1RU |
||
cc. |
Bryan Cave
33 Cannon Street London EC4M 5TE Tel: 020 7246 5800 Fax: 020 7246 5858 |
20.3 | A notice is deemed to have been received: |
(a) | if delivered personally, at the time of delivery; or | ||
(b) | in the case of fax, at the time of transmission; or | ||
(c) | in the case of pre-paid first class post or recorded delivery, 1 Business Day from the date of posting; or | ||
(d) | in the case of airmail, 5 Business Days from the date of posting; or | ||
(e) | if deemed receipt under the previous paragraphs of this clause 20.3 is not within business hours (meaning 9.00 am to 5.30 pm Monday to Friday on a day that is not a public holiday in the place of receipt), when business next starts in the place of receipt. |
20.4 | To prove service, it is sufficient to prove that the notice was transmitted by fax to the fax number of the party or, in the case of post, that the envelope containing the notice was properly addressed and posted. |
18
21. | INTEREST ON LATE PAYMENT | |
21.1 | Where a sum is required to be paid under this agreement (other than under the Tax Covenant) but is not paid before or on the date the parties agreed, the party due to pay the sum shall also pay an amount equal to interest on that sum for the period beginning with that date and ending with the date the sum is paid (and the period shall continue after as well as before judgment). | |
21.2 | The rate of interest shall be 2% per annum above the base lending rate for the time being of HSBC. Interest shall accrue on a daily basis and be compounded quarterly. | |
21.3 | This clause 21 is without prejudice to any claim for interest under the law. | |
22. | SEVERANCE | |
22.1 | If any provision of this agreement (or part of a provision) is found by any court or administrative body of competent jurisdiction to be invalid, unenforceable or illegal, the other provisions shall remain in force. | |
22.2 | If any invalid, unenforceable or illegal provision would be valid, enforceable or legal if some part of it were deleted, the provision shall apply with whatever modification is necessary to give effect to the commercial intention of the parties. | |
23. | AGREEMENT SURVIVES COMPLETION | |
This agreement (other than obligations that have already been fully performed) remains in full force after Completion. | ||
24. | THIRD PARTY RIGHTS | |
24.1 | Subject to clause 24.2, this agreement and the documents referred to in it are made for the benefit of the parties and their successors and permitted assigns and are not intended to benefit, or be enforceable by, anyone else. | |
24.2 | The following provisions are intended to benefit future buyers of the Sale Shares from the Buyer and, where they are identified in the relevant clauses, the Company, and shall be enforceable by them to the fullest extent permitted by law: |
(a) | clause 7 (Warranties) and Schedule 4 (Warranties), subject to clause 8 (Limitations on claims); | ||
(b) | clause 9 (Tax covenant) and Schedule 5 (Tax covenant); | ||
(c) | clause 11 (Restrictions on the Warrantors and Wittington Investments Limited); | ||
(d) | clause 14 (Confidentiality and announcements); and | ||
(e) | clause 21 (Interest on late payment). |
24.3 | Each party represents to the other that their respective rights to terminate, rescind or agree any amendment, variation, waiver or settlement under this agreement are not subject to the consent of any person that is not a party to this agreement. |
19
20
Name:
|
Amsbra Limited | |||
|
||||
Registration number:
|
4537212 | |||
|
||||
Registered office:
|
St Stephens House | |||
|
Arthur Road | |||
|
Windsor | |||
|
Berkshire SL4 1RU | |||
Authorised share capital
Amount: |
10,000 | |||
Divided into:
|
10,000 of £1 each | |||
|
||||
ISSUED SHARE CAPITAL
|
£ 39,894.56 | |||
Amount:
|
2,737,149 Ordinary A Shares and | |||
Divided into:
|
1,252,307 Ordinary B Shares | |||
|
||||
Registered shareholders (and number of
Sale Shares held):
|
(See part 2 below) | |||
|
||||
Beneficial owner of Sale Shares (if
different) and number of Sale Shares
beneficially owned:
|
As above | |||
|
||||
Directors and shadow directors:
|
Rupert Ashe, Nigel French, Andrew | |||
|
Hugh Mackay, Steven Bedford | |||
|
||||
Secretary:
|
Rupert Ashe | |||
|
||||
Auditors
|
CLB Littlejohn Frazer | |||
|
||||
Registered Charges
|
2 |
21
Non- | Total | |||||||||||||||||||||||
Voting | Voting | issued | Total | |||||||||||||||||||||
A | B | share | Nominal | Consideration | ||||||||||||||||||||
Shares | Shares | capital | value £ | received £ | ||||||||||||||||||||
1. |
Wittington Investments Limited
Weston Centre 10 Grosvenor Street London WK 4QY |
925981 | 492909 | 1418890 | 14189 | 1956125 | ||||||||||||||||||
|
||||||||||||||||||||||||
2. |
NSS Trustees Limited & Simon Bentley
on behalf of Regents Park Estates
Pension Scheme
c/o Simon Bentley Mishcon de Reya Summit House 12 Red Lion Sq. London WCIR 4QD |
37068 | 28194 | 65262 | 653 | 89973 | ||||||||||||||||||
|
||||||||||||||||||||||||
3. |
Malcolm Dalgleish Esq.
Dalgleish & Co. 80 Bond Street London W1S 1DD |
113641 | 76130 | 189771 | 1898 | 261625 | ||||||||||||||||||
|
||||||||||||||||||||||||
4. |
Global Partners Limited
(Nigel French) Century House 16 Par La Vile Road Hamilton, HM HX, Bermuda |
103123 | 70600 | 173723 | 1737 | 239501 | ||||||||||||||||||
|
||||||||||||||||||||||||
5. |
Justin Kendrick Esq.
4 Binjai Hill Singapore |
22308 | 17500 | 39808 | 398 | 54882 | ||||||||||||||||||
|
||||||||||||||||||||||||
6. |
Christopher John
Newlands Sykes Esq. Kingswood Farm East Park Lane Newchapel Lingfield Surrey RH7 6HS |
26500 | 17500 | 44000 | 440 | 60661 |
22
Non- | Total | |||||||||||||||||||||||
Voting | Voting | issued | Total | |||||||||||||||||||||
A | B | share | Nominal | Consideration | ||||||||||||||||||||
Shares | Shares | capital | value £ | received £ | ||||||||||||||||||||
7. |
Aero Systems SA (Michael Mitchell)
10 Chemin des Chasseurs, 1380 Ohain Belgium |
37068 | 28194 | 65262 | 1160 | 89971 | ||||||||||||||||||
|
||||||||||||||||||||||||
8. |
Michael Mitchell
[10 Chemin des Chasseurs 1380 Ohain Belgium] |
0 | 50724 | 50724 | 69929 | |||||||||||||||||||
|
||||||||||||||||||||||||
9. |
Merville Limited
c/o Seamus McLaughlin, Martin & Company, 25 St Thomas Street, Winchester S023 9DD |
44616 | 35000 | 79616 | 796 | 109762 | ||||||||||||||||||
|
||||||||||||||||||||||||
10. |
Mrs Sue Buchan
53 Great King Street Edinburgh EH3 6RP |
41558 | 54500 | 96058 | 961 | 132429 | ||||||||||||||||||
|
||||||||||||||||||||||||
11. |
Boldswitch Limited (British Land)
10 Cornwall Terrace London NW1 4QP |
236116 | 160875 | 396991 | 3970 | 547305 | ||||||||||||||||||
|
||||||||||||||||||||||||
12. |
Steven Bedford Esq.
Audley Mead 20 Bolton Avenue Windsor SL4 3JF |
310000 | 0 | 310000 | 3100 | 427375 | ||||||||||||||||||
|
||||||||||||||||||||||||
13. |
The Granola Trust (Andrew Mackay)
Trust Corporation of the Channel Islands Limited, PO Box 665, Rosenheath, The Grange, St Peter Port, Guernsey, GY1 3SJ |
470000 | 0 | 470000 | 4700 | 647957 |
23
Non- | Total | |||||||||||||||||||||||
Voting | Voting | issued | Total | |||||||||||||||||||||
A | B | share | Nominal | Consideration | ||||||||||||||||||||
Shares | Shares | capital | value £ | received £ | ||||||||||||||||||||
14. |
Rupert Ashe Esq.
Wall House No. 1 The Green Wimbledon SW19 5AZ |
155000 | 5000 | 160000 | 1600 | 220581 | ||||||||||||||||||
|
||||||||||||||||||||||||
15. |
Angus Samuels
126 Jermyn St SW1Y 4UJ |
28850 | 10413 | 39263 | 393 | 54130 | ||||||||||||||||||
|
||||||||||||||||||||||||
16. |
John Howard-Smith
126 Jermyn St SW1Y 4UJ |
11540 | 4165 | 15705 | 157 | 21652 | ||||||||||||||||||
|
||||||||||||||||||||||||
17. |
Kenneth McKelvey
126 Jermyn St SW1Y 4UJ |
57700 | 95825 | 153525 | 1535 | 211655 | ||||||||||||||||||
|
||||||||||||||||||||||||
18. |
Jonathan Punter
126 Jermyn St SW1Y 4UJ |
31425 | 5206 | 36631 | 366 | 50502 | ||||||||||||||||||
|
||||||||||||||||||||||||
19. |
David Cule
Lords Hill House Lords Hill Common Shamley Green Guildford GU5 0UZ |
28850 | 46642 | 75492 | 755 | 104077 | ||||||||||||||||||
|
||||||||||||||||||||||||
20. |
Gary Jackson
152 Grosvenor Road SW1V 3JL |
14425 | 14425 | 28850 | 289 | 39774 |
24
Non- | Total | |||||||||||||||||||||||
Voting | Voting | issued | Total | |||||||||||||||||||||
A | B | share | Nominal | Consideration | ||||||||||||||||||||
Shares | Shares | capital | value £ | received £ | ||||||||||||||||||||
21. |
Paul Rosenblatt
Rosenblatt UK 603 Beetham Plaza The Strand Liverpool LS OXJ |
22308 | 17500 | 39808 | 398 | 54882 | ||||||||||||||||||
|
||||||||||||||||||||||||
22. |
Philip Lewis
Hines UK Queensberry House 3 Old Burlington St, W1S 3AE |
19072 | 21005 | 40077 | 401 | 55252 | ||||||||||||||||||
|
||||||||||||||||||||||||
TOTAL SHARES
|
2737149 | 1252307 | 3989456 | 19421 | 5500000 |
25
1. | The termination of the Share Options and of the AM Options. | |
2. | The completion of the purchase by the Buyer or a member of the Buyers Group of the entire issued share capital of The Bear Factory Ltd from Hamleys. | |
3. | The issue of an insurance policy by New Hampshire Insurance Company in terms reasonably satisfactory to the Purchaser and the Warrantors for the purpose of providing insurance cover in the event of a breach of warranty or a claim under the Tax Covenant. |
26
1. | The Warrantors undertake to procure and procures that each member of their Group(s) undertake to procure that the Business shall be conducted in the manner provided in this Part 3 of Schedule 3 from the date of this agreement to Completion. | |
2. | The Company shall carry on business in the normal course. | |
3. | The Company shall not: |
(a) | dispose of any material assets used or required for the operation of its business; or | ||
(b) | allot or agree to allot any shares or other securities, repurchase, redeem or agree to repurchase or redeem any of the shares; or | ||
(c) | pass any resolution; or | ||
(d) | enter into, modify or agree to terminate any Material Contract (as defined in Part 1 of Schedule 4); or | ||
(e) | incur any capital expenditure on any individual item in excess of £20,000; or | ||
(f) | borrow any sum in excess of £20,000; or | ||
(g) | enter into any lease, lease hire or hire purchase agreement or agreement for payment on deferred terms; or | ||
(h) | pay any dividend or make any other distribution of its assets; or | ||
(i) | make, or agree to make, material alterations to the terms and conditions of employment (including benefits) of any of its directors, officers or employees; or | ||
(j) | provide or agree to provide any non-contract benefit to any director, officer, employee or their dependants; or | ||
(k) | dismiss any of its employees or employ or engage (or offer to employ or engage) any person; or | ||
(l) | create any Encumbrance over any of its assets or its undertaking; or | ||
(m) | institute, settle or agree to settle any legal proceedings relating to its business, except debt collection in the normal course of business; or | ||
(n) | pay any management charge to the Seller; or | ||
(o) | incur any liability to the Seller, other than trading liabilities incurred in the normal course of business; or |
27
(p) | vary the terms on which it holds any of the Properties or settle any rent review; or | ||
(q) | (make any material change to the accounting procedures or principles by reference to which its accounts are drawn up. |
4. | The Company may do anything falling within paragraph 3 of this Schedule 3 if the Buyer has given prior written consent. | |
5. | The Company shall maintain in force insurance policies: |
(a) | that have limits of indemnity at least equal to; and | ||
(b) | the other terms of which are no less favourable than, |
those policies of insurance maintained by the Company on the date of this agreement. | ||
6. | The Warrantors shall use its best endeavours to maintain the trade and trade connections of the Company in the ordinary course of business. | |
7. | The Warrantors shall give to the Buyer as soon as possible full details of any material change in the business, financial position or assets of the Company. | |
8. | The Warrantors shall not: |
(a) | induce, or attempt to induce, any of the employees of the Company, whether directly or indirectly, to terminate their employment before the Completion Date; or | ||
(b) | incur any liabilities to the Company, other than trading liabilities incurred in the normal course of business. |
9. | No amendment, other than one made solely to comply with legislative requirements, shall be made to any agreements or arrangements for the payment of pensions or other benefits on retirement: |
(a) | to present or former directors, officers or employees of the Company; or | ||
(b) | to the dependants of any of those people. |
10. | The Warrantors shall, at the Buyers request and expense, provide the Buyer with such information or documents as it may reasonably require relating to the terms of employment or any other matter concerning any Employee or Worker or any body of employees or their representatives in the period prior to the Completion Date. | |
11. | The Warrantors shall, at the Buyers expense and subject to its obligations under the Data Protection Act 1998, give such assistance as the Buyer may reasonably require to contest any claim by anyone employed or engaged by the Company prior to the Completion Date or their representatives resulting from or in connection with this agreement. |
28
1. | At Completion, the Seller shall deliver or cause to be delivered to the Buyer the following documents and evidence: |
(a) | transfers of the Sale Shares executed by the registered holder in favour of the Buyer; | ||
(b) | the share certificates for the Sale Shares in the name of the registered holder or an indemnity in the agreed form for any lost certificates; | ||
(c) | the waivers, consents and other documents required to enable the Buyer to be registered as the holder of the Sale Shares; | ||
(d) | irrevocable powers of attorney in agreed form given by the Seller in favour of the Buyer to enable the beneficiary (or its proxies) to exercise all voting and other rights attaching to the Sale Shares before the transfer of all such shares is registered in the register of members; | ||
(e) | the original of any power of attorney under which any document to be delivered to the Buyer under this paragraph 1 has been executed; | ||
(f) | in relation to the Company, the statutory registers and minute books (written up to the time of Completion), the common seal, certificate of incorporation and any certificates of incorporation on change of name; | ||
(g) | the written resignation, executed as a deed and in the agreed form, of the directors and secretary of the Company from their offices and employment with the Company; | ||
(h) | the written resignation of the auditors of the Company accompanied in each case by: |
(i) | a statement that there are no circumstances connected with the auditors resignation which should be brought to the notice of the members or creditors of the Company; and | ||
(ii) | a written assurance that the resignation and statement have been, or will be, deposited at the registered office of the Company in accordance with section 394 of the Companies Act 1985; |
(i) | signed copies of special resolutions of the Company in a form appropriate for filing at Companies House to adopt new articles of association of the Company in the form the Buyer requires; | ||
(j) | a copy of the new articles of association of the Company appropriate for filing at Companies House; | ||
(k) | a certified copy of the minutes of the board meetings held pursuant to Part 3 of this Schedule 3; | ||
(l) | in relation to the Company: |
29
(i) | statements from each bank at which the Company has an account, giving the balance of each account at the close of business on the last Business Day before Completion; | ||
(ii) | all cheque books in current use and written confirmation that no cheques have been written since those statements were prepared; | ||
(iii) | details of their cash book balances; and | ||
(iv) | reconciliation statements reconciling the cash book balances and the cheque books with the bank statements delivered; | ||
(v) | all title deeds and other documents relating to the Properties; | ||
(vi) | evidence, in agreed form, that any indebtedness or other liability of the kind described in paragraph 41 of Part 1 of Schedule 4 (Transactions with the seller) has been discharged; | ||
(vii) | evidence, in agreed form, that the Company has been discharged from any responsibility for the indebtedness, or for the default in the performance of any obligation, of any other person; | ||
(viii) | all charges, mortgages, debentures and guarantees to which the Company is a party and, in relation to each such instrument and any covenants connected with it: |
(1) | a sealed discharge or release in the agreed form; and | ||
(2) | a sworn and completed Form 403a (declaration that part of the property or undertaking charged has been released from the charge); | ||
(3) | certified copy of the resolution adopted by the board of directors of the Seller (as applicable) authorising and approving the Transaction. |
2. | The Seller shall cause a board meeting of the Company to be held at Completion at which the matters set out in this Part 3 of this Schedule 3 shall take place. | |
3. | A resolution to register the transfer of the Sale Shares shall be passed at such board meeting of the Company, subject to the transfer(s) being stamped at the cost of the Buyer. | |
4. | All directors, secretaries and auditors of the Company shall resign from their offices and employment with the Company with effect from the end of the relevant board meeting. | |
5. | Such letters as may be required varying the terms of the service agreements of Rupert Ashe, Steven Bedford and Andrew Mackay shall be entered into by the Company and the above individuals. |
30
6. | The persons the Buyer nominates shall be appointed as directors and secretary of the Company (but not exceeding any maximum number of directors contained in the Companys articles of association). The appointments shall take effect at the end of the board meeting. | |
7. | KPMG shall be appointed as the auditors of the Company with effect from the end of the relevant board meeting. | |
8. | All the existing instructions and authorities to bankers shall be revoked and replaced with new instructions and authorities to those banks in the form the Buyer requires. | |
9. | The address of the registered office of the Company shall be changed to the address required by the Buyer. | |
10. | The accounting reference date of the Company shall be changed to the date required by the Buyer. |
31
POWER TO SELL THE COMPANY | ||
1. | Each Seller has taken all necessary action and has all requisite power and authority to enter into and perform this agreement in accordance with its terms and the other documents referred to in it. | |
2. | This agreement and the other documents referred to in it constitute (or shall constitute when executed) valid, legal and binding obligations on each Seller in the terms of the agreement and such other documents. | |
3. | Compliance with the terms of this agreement and the documents referred to in it shall not breach or constitute a default under any of the following: |
(a) | any agreement or instrument to which any Seller is a party or by which it is bound; or | ||
(b) | any order, judgment, decree or other restriction applicable to any Seller. |
SHARES IN THE COMPANY AND SUBSIDIARIES | ||
4. | The Sale Shares constitute the whole of the allotted and issued share capital of the Company and are fully paid. | |
5. | Each Seller is the sole legal and beneficial owner of the number of Sale Shares set against his name in Schedule 1. | |
6. | The Sale Shares are free from all Encumbrances. | |
7. | No right has been granted or commitment given to create a right to any person to require the Company to issue any share capital and no Encumbrance has been created or commitment given to create any Encumbrance in favour of any person affecting any unissued shares or debentures or other unissued securities of the Company and no person has claimed any rights in connection with any of those things. | |
8. | The Company does not: |
(a) | does not hold or beneficially owns, nor has agreed to acquire, any securities of any corporation; or | ||
(b) | is not nor has agreed to become a member of any partnership or other unincorporated association, joint venture or consortium (other than recognised trade associations); or | ||
(c) | does not have, outside its country of incorporation, any branch or permanent establishment; or | ||
(d) | has not allotted or issued any securities that are convertible into shares. |
32
9. | The Company has not at any time: |
(a) | purchased, redeemed or repaid any of its own share capital; or | ||
(b) | given any financial assistance in connection with any acquisition of its share capital as it would fall within sections 151 to 158 (inclusive) of the Companies Acts. |
10. | All dividends or distributions declared, made or paid by the Company have been declared, made or paid in accordance with its memorandum, articles of association, the applicable provisions of the Companies Acts and any agreements or arrangements made with any third party regulating the payment of dividends and distributions. | |
CONSTITUTIONAL AND CORPORATE DOCUMENTS | ||
11. | The copies of the memorandum and articles of association or other constitutional and corporate documents of the Company Disclosed to the Buyer or its advisers are true, accurate and complete in all respects and copies of all the resolutions and agreements required to be annexed to or incorporated in those documents by the law applicable are annexed or incorporated. | |
12. | All statutory books and registers of the Company have been properly kept and no notice or allegation that any of them is incorrect or should be rectified has been received. | |
13. | All returns, particulars, resolutions and other documents which the Company is required by law to file with or deliver to any authority in any jurisdiction (including, in particular, the Registrar of Companies in England and Wales) have been correctly made up and filed or, as the case may be, delivered. | |
INFORMATION | ||
14. | The particulars relating to the Company in this agreement are accurate and not misleading. | |
COMPLIANCE WITH LAWS | ||
15. | The Company has at all times conducted its business in accordance with all applicable laws and regulations. | |
LICENCES AND CONSENTS | ||
16. | The Company has all necessary licences, consents, permits and authorities necessary to carry on its business in the places and in the manner in which its business is now carried on, all of which are valid and subsisting. | |
17. | So far as the Warrantors are aware, there is no reason why any of those licences, consents, permits and authorities should be suspended, cancelled, revoked or not renewed on the same terms. | |
INSURANCE | ||
18. | The insurance policies maintained by or on behalf of the Company provide full indemnity cover against all losses and liabilities including business interruption and other |
33
risks that are normally insured against by a person carrying on the same type of business as the Company. | ||
19. | The brief particulars of those policies as set out in the Disclosure Letter are accurate and not misleading. | |
20. | There are no material outstanding claims under, or in respect of the validity of any of those policies and, so far as the Warrantors are aware, there are no circumstances likely to give rise to any claim under any of those policies. | |
21. | All the insurance policies are in full force and effect, are not void or voidable, nothing has been done or not done by the Company, or so far as the Warrantors are aware, by any third party which would make any of them void or voidable and Completion will not terminate, or entitle any insurer to terminate, any such policy. | |
POWER OF ATTORNEY | ||
22. | There are no powers of attorney in force given by the Company. | |
23. | No person, as agent or otherwise, is entitled or authorised to bind or commit the Company to any obligation not in the ordinary course of the Company business. | |
24. | The Disclosure Letter sets out details of all persons who have authority to bind the Company in the ordinary course of business. | |
DISPUTES AND INVESTIGATIONS | ||
25. | The Company nor, so far as the Warrantors are aware, any person for whom the Company is vicariously liable: |
(a) | is engaged in any litigation, administrative, mediation or arbitration proceedings or other proceedings or hearings before any statutory or governmental body, department, board or agency (except for debt collection in the normal course of business); or | ||
(b) | is the subject of any investigation, inquiry or enforcement proceedings by any governmental, administrative or regulatory body. |
26. | No director of the Company is, to the extent that it relates to the business of the Company, engaged in or subject to any of the matters mentioned in paragraph 25 of this Schedule 4. | |
27. | No such proceedings, investigation or inquiry as are mentioned in paragraph 25 or paragraph 26 of this Schedule 4 have been threatened or are pending and, so far as the Warrantors are aware, there are no circumstances likely to give rise to any such proceedings. | |
28. | The Company is not affected by any existing or pending judgments or rulings and has not given any undertakings arising from legal proceedings to a court, governmental agency, regulator or third party. |
34
DEFECTIVE PRODUCTS | ||
29. | The Company has not sold any products which were, at the time they were sold, faulty or defective or did not comply with: |
(a) | warranties or representations expressly made or implied by or on behalf of the Company; or | ||
(b) | all laws, regulations, standards and requirements applicable to the products. |
30. | No proceedings have been started, are pending or have been threatened against the Company in which it is claimed that any products sold by the Company are defective, not appropriate for their intended use or have caused bodily injury or material damage to any person or property when applied or used as intended. | |
31. | No proceedings have been started and there are no outstanding liabilities or claims pending or threatened against the Company in respect of the provision of in store customer service for which the Company is or may become liable and no dispute exists between the Company and any of its customers or clients. | |
CUSTOMERS AND SUPPLIERS | ||
32. | In the 12 months ending with the date of this agreement, the business of the Company has not been materially affected in an adverse manner as a result of any one or more of the following things happening to the Company: |
(a) | the loss of any of its customers or suppliers; or | ||
(b) | a reduction in trade with its customers or in the extent to which it is supplied by any of its suppliers; or | ||
(c) | a change in the terms on which it trades with or is supplied by any of its customers or suppliers. |
COMPETITION | ||
The definition in this paragraph applies in this agreement. | ||
Competition Law: the national and directly effective legislation of any jurisdiction which governs the conduct of companies or individuals in relation to restrictive or other anti-competitive agreements or practices (including, but not limited to, cartels, pricing, resale pricing, market sharing, bid rigging, terms of trading, purchase or supply and joint ventures), dominant or monopoly market positions (whether held individually or collectively) and the control of acquisitions or mergers. | ||
33. | The Company is not engaged in any agreement, arrangement, practice or conduct which amounts to an infringement of the Competition Law of any jurisdiction in which the Company conducts business and no Director is engaged in any activity which would be an offence or infringement under any such Competition Law. | |
34. | The Company is not the subject of any investigation, inquiry or proceedings by any relevant government body, agency or authority in connection with any actual or alleged |
35
infringement of the Competition Law of any jurisdiction in which the Company conducts business. | ||
35. | No such investigation, inquiry or proceedings as mentioned in paragraph 34 of this Schedule 4 have been threatened or are pending and, so far as the Warrantors are aware, there are no circumstances likely to give rise to any such investigation, inquiry or proceedings. | |
36. | The Company is not affected by any existing or pending decisions, judgments, orders or rulings of any relevant government body, agency or authority responsible for enforcing the Competition Law of any jurisdiction in which the Company conducts business and the Company has not given any undertakings or commitments to such bodies which affect the conduct of the Business. | |
37. | The Company is not in receipt of any payment, guarantee, financial assistance or other aid from the government or any state body which was not, but should have been, notified to the European Commission under Article 88 of the EC Treaty for decision declaring such aid to be compatible with the common market. | |
CONTRACTS | ||
The definition in this paragraph applies in this agreement. | ||
Material Contract: an agreement or arrangement to which the Company is a party or is bound by and which is of material importance to the business, profits or assets of the Company. | ||
38. | Except for the agreements and arrangements Disclosed, the Company is not a party to or subject to any agreement or arrangement which: |
(a) | is a Material Contract; or | ||
(b) | is of an unusual or exceptional nature; or | ||
(c) | is not in the ordinary and usual course of business of the Company; or | ||
(d) | may be terminated as a result of any Change of Control of the Company; or | ||
(e) | restricts the freedom of the Company to carry on the whole or any part of its business in any part of the world in such manner as it thinks fit; or | ||
(f) | involves agency or distributorship; or | ||
(g) | involves partnership, joint venture, consortium, joint development, shareholders or similar arrangements; or | ||
(h) | is incapable of complete performance in accordance with its terms within six months after the date on which it was entered into; or | ||
(i) | cannot be readily fulfilled or performed by the Company on time and without undue or unusual expenditure of money and effort; or |
36
(j) | involves or is likely to involve an aggregate consideration payable by or to the Company in excess of £50,000; or | ||
(k) | requires the Company to pay any commission, finders fee, royalty or the like; or | ||
(l) | is for the supply of goods and/or services by or to the Company on terms under which retrospective or future discounts, price reductions or other financial incentives are given; or | ||
(m) | is not on arms length terms; or | ||
(n) | provides for payments or other dealings in or calculated by reference to the euro. |
39. | Each Material Contract is in full force and effect and binding on the parties to it. The Company has not defaulted under or breached a Material Contract and: |
(a) | so far as the Warrantors are aware, no other party to a Material Contract has defaulted under or breached such a contract; and | ||
(b) | no such default or breach by the Company or any other party has been threatened or, so far as the Warrantors are aware, is likely. |
40. | No notice of termination of a Material Contract has been received or served by the Company and, so far as the Warrantors are aware, there are no grounds for determination, rescission, avoidance, repudiation or a material change in the terms of any such contract. |
TRANSACTIONS WITH THE SELLER |
41. | There is no outstanding indebtedness or other liability (actual or contingent) and no outstanding contract, commitment or arrangement between the Company and any of the following: |
(a) | any Seller or any member of a Sellers Group (where a Seller is a company) or person Connected with any Seller; or | ||
(b) | any director of a member of a Sellers Group (where a Seller is a company) or any person Connected with such a member or director. |
42. | No Seller, nor any person Connected with any Seller, is entitled to a claim of any nature against the Company or has assigned to any person the benefit of a claim against the Company to which any Seller or a person Connected with any Seller would otherwise be entitled. | |
FINANCE AND GUARANTEES | ||
43. | Full particulars of all money borrowed by the Company (including full particulars of the terms on which such money has been borrowed) have been Disclosed. | |
44. | No guarantee, mortgage, charge, pledge, lien, assignment or other security agreement or arrangement has been given by or entered into by the Company or any third party in respect of borrowings or other obligations of the Company. |
37
45. | The total amount borrowed by the Company does not exceed any limitations on the borrowing powers contained: |
(a) | in the memorandum and articles of association of the Company; or | ||
(b) | in any debenture or other deed or document binding on the Company. |
46. | The Company does not have any outstanding loan capital, or has lent any money that has not been repaid, and there are no debts owing to the Company other than debts that have arisen in the normal course of business. | |
47. | The Company has not: |
(a) | factored any of its debts or discounted any of its debts or engaged in financing of a type which would not need to be shown or reflected in the Accounts; or | ||
(b) | waived any right of set-off it may have against any third party. |
48. | All debts (less any provision for bad and doubtful debts) owing to the Company reflected in the Accounts and all debts subsequently recorded in the books of the Company have either prior to the date of this agreement been realised or will, within three months after the date of this agreement, realise in cash their full amount as included in those Accounts or books and none of those debts nor any part of them has been outstanding for more than two months from its due date for payment. | |
49. | No indebtedness of the Company is due and payable and no security over any of the assets of the Company is now enforceable, whether by virtue of the stated maturity date of the indebtedness having been reached or otherwise. The Company has not received any notice whose terms have not been fully complied with and/or carried out from any creditor requiring any payment to be made and/or intimating the enforcement of any security which it may hold over the assets of the Company. | |
50. | The Company is not responsible for the indebtedness, or for the default in the performance of any obligation, of any other person. | |
51. | 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. | |
52. | Particulars of the balances of all the bank accounts of the Company, showing the position as at the Business Day immediately preceding the date of this agreement, have been Disclosed and the Company has no other bank accounts. Since those particulars were given, there have been no payments out of those accounts other than routine payments in the ordinary course of business. | |
53. | A Change of Control of the Company will not result in: |
(a) | termination of or material effect on any financial agreement or arrangement to which the Company is a party or subject; or | ||
(b) | any indebtedness of the Company becoming due, or capable of being declared due and payable, prior to its stated maturity. |
38
INSOLVENCY | ||
54. | The Company: |
(a) | is not insolvent or unable to pay its debts within the meaning of the Insolvency Act 1986 or any other insolvency legislation applicable to it; and | ||
(b) | has not stopped paying its debts as they fall due. |
55. | No step has been taken to initiate any process by or under which the ability of the creditors of the Company to take any action to enforce their debts is suspended, restricted or prevented or a person is appointed to manage the affairs, business and assets of the Company. | |
56. | In relation to the Company: |
(a) | no administrator has been appointed; | ||
(b) | no documents have been filed with the court for the appointment of an administrator; and | ||
(c) | no notice of an intention to appoint an administrator has been given by the Company, its directors or by a qualifying floating charge holder (as defined in paragraph 14 of Schedule B1 to the Insolvency Act 1986). |
57. | No process has been initiated which would lead to the Company being dissolved and its assets being distributed among its creditors, shareholders or other contributors. | |
58. | No distress, execution or other process has been levied on an asset of the Company. | |
ASSETS | ||
59. | The Company is the full legal and beneficial owner without Encumbrance of, and has good and marketable title to and has possession and control of all the assets included in the Accounts, any assets acquired since the Accounts Date and all other assets used by the Company, except for those disposed of since the Accounts Date in the normal course of business. | |
CONDITION OF STOCK IN TRADE | ||
60. | The stock-in-trade of the Company is in good condition and is capable of being sold by the Company in the ordinary course of its business in accordance with its current price list without discount, rebate or allowance to a buyer. | |
ENVIRONMENTAL | ||
The definitions in this paragraph apply in this agreement. | ||
Hazardous Substances: any natural or artificial substance (whether solid, liquid or gas and whether alone or in combination with any other substance or radiation), capable of causing harm to any human or other living organism or the Environment. |
39
Environment: air, water and land, all living organisms and natural or man-made structures. | ||
Environmental Law: any law in so far as it relates to Environmental Matters. | ||
Environmental Matters: the protection of human health, the protection and condition of the Environment, the condition of the workplace, the generation, transportation, storage, treatment, emission, deposit and disposal of any Hazardous Substance or Waste. | ||
Waste: all waste, including any unwanted or surplus substance irrespective of whether it is capable of being recycled or recovered or has any value. | ||
61. | All permits, consents and licences required or issued under Environmental Law which are necessary for carrying on the Business are in full force and effect and have been complied with and, so far as the Warrantors are aware, there are no circumstances (including, but not limited to, the sale of the Sale Shares to the Buyer) likely to give rise to the modification, suspension or revocation of or lead to the imposition of unusual or onerous conditions on, or to prejudice the renewal of any of those permits, consents or licences. | |
62. | The Company has at all times complied with all Environmental Laws applicable to it. | |
63. | No proceeding or action relating to Environmental Law has been taken, is pending or threatened against the Company or any employees, directors or officers of the Company by any competent authority or any other person. | |
INTELLECTUAL PROPERTY | ||
64. | The definition in this paragraph applies in this agreement. | |
Intellectual Property Rights: patents, rights to inventions, utility models, copyright, trade marks, service marks, trade, business and domain names, rights in trade dress or get-up, rights in goodwill or to sue for passing off, unfair competition rights, rights in designs, rights in computer software, database rights, topography rights, moral rights, rights in confidential information (including know-how and trade secrets) and any other intellectual property rights, in each case whether registered or unregistered and including all applications for and renewals or extensions of such rights, and all similar or equivalent rights or forms of protection in any part of the world. | ||
65. | The Company does not own any Intellectual Property Rights. | |
66. | Complete and accurate particulars are set out in Schedule 6 respectively of all licences, agreements, authorisations and permissions (in whatever form and whether express or implied) under which the Company uses or exploits Intellectual Property Rights owned by any third party and nothing is due to be done within 30 days of Completion which would jeopardise the use of such Intellectual Property Rights. | |
67. | The agreements and licences set out in Schedule 6: |
(a) | are valid and binding; | ||
(b) | have not been the subject of any breach or default by any party or of any event which, with the giving of notice or lapse of time, would constitute a default; |
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(c) | are not the subject of any claim, dispute or proceeding, pending or threatened; | ||
(d) | have, where required, been duly recorded or registered; and | ||
(e) | are all the agreements and licenses necessary for the operation of the Business. |
68. | A Change of Control of the Company will not result in the termination of or materially affect any of the Intellectual Property Rights set out in Schedule 6. | |
69. | The activities of the Company do not infringe any third party Intellectual Property Rights. | |
70. | The Buyer acknowledges and agrees that there shall be no breach of Warranty in respect of paragraph 67(b) and 69 to the extent that the Company has been and is acting in accordance with the provisions of its Franchise Agreement with Build-a-Bear Workshop Franchise Holdings, Inc. | |
INFORMATION TECHNOLOGY | ||
The definitions in this paragraph apply in this agreement. | ||
IT System: all computer hardware (including network and telecommunications equipment) and software (including associated preparatory materials, user manuals and other related documentation) owned, used, leased or licensed by or to the Company. | ||
71. | The IT System has been properly maintained, is in good working order and is, in the reasonable opinion of the Warrantors, sufficient for the purposes of the Business as at the date hereof. | |
EMPLOYMENT | ||
The definitions in this paragraph apply in this agreement. | ||
Employment Legislation: legislation applying in England and Wales affecting contractual or other relations between employers and their employees or workers, including but not limited to any legislation and any amendment, extension or re enactment of such legislation and any claim arising under European treaty provisions or directives enforceable against the Company by any Employee or Worker. | ||
Employee: any person employed by the Company under a contract of employment. | ||
Worker: any person who personally performs work for the Company but who is not in business on their own account or in a client/customer relationship. | ||
72. | The name of each person who is a Director is set out in Schedule 1. | |
73. | The Disclosure Letter includes anonymised details of all Employees and Workers of the Company and the principal terms of their contract. | |
74. | The Disclosure Letter includes anonymised details of all persons who are not Workers and who are providing services to the Company under an agreement which is not a contract of employment with the Company (including, in particular, where the individual |
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acts as a consultant or is on secondment from a company) and the particulars of the terms on which the individual provides services. | ||
75. | The Disclosure Letter includes anonymised details of all Employees and Workers of the Company who are on secondment, maternity, paternity, adoption or other leave or absent due to ill-health or for any other reason. | |
76. | No notice to terminate the contract of employment of any Employee or Worker of the Company (whether given by the relevant employer or by the Employee or Worker) is pending, outstanding or threatened and no dispute under any Employment Legislation or otherwise is outstanding between: |
(a) | the Company and any of its current or former Employees relating to their employment, its termination and any reference given by the Company regarding them; or | ||
(b) | the Company and any of its current or former Workers relating to their contract, its termination and any reference given by the Company regarding them. |
77. | No offer of employment or engagement has been made by the Company that has not yet been accepted, or which has been accepted but where the employment or engagement has not yet started. | |
78. | The acquisition of the Sale Shares by the Buyer and compliance with the terms of this agreement will not enable any Directors, officers or [senior] Employees of the Company to terminate their employment or receive any payment or other benefit. | |
79. | All contracts between the Company and its Employees and Workers are terminable at any time on three months notice or less without compensation (other than for unfair dismissal or a statutory redundancy payment or any liability on the part of the Company other than wages, commission or pension). | |
80. | All contracts between the Company and its Directors, Employees or Workers comply with any relevant requirements of section 319 of the Companies Act 1985. | |
81. | The Company is not a party to, bound by or proposing to introduce in respect of any of its Directors or Employees any redundancy payment scheme in addition to statutory redundancy pay, nor is there any agreed procedure for redundancy selection. | |
82. | The Company is not a party to, bound by or proposing to introduce in respect of any of its Directors, Employees or Workers any share option, profit sharing, bonus, commission or any other scheme (not in force at the date hereof) relating to the profit or sales of the Company (other than such scheme as Disclosed). | |
83. | The Company has not incurred any actual or contingent liability in connection with any termination of employment of its Employees (including redundancy payments) or for failure to comply with any order for the reinstatement or re-engagement of any Employee. | |
84. | The Company has not incurred any liability for failure to provide information or to consult with Employees under any Employment Legislation. |
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85. | The Company has not made or agreed to make a payment or provided or agreed to provide a benefit to a present or former Director or officer, Employee or Worker or to their dependants in connection with the actual or proposed termination or suspension of employment or variation of an employment contract. | |
86. | The Company is not involved in any material industrial or trade dispute or negotiation regarding a claim with any trade union, group or organisation of employees or their representatives representing Employees or Workers and, so far as the Warrantors are aware, there is nothing likely to give rise to such a dispute or claim. | |
87. | There are no sums owing to or from any Employee or Worker other than reimbursement of expenses, wages for the current salary period and holiday pay for the current holiday year. | |
88. | The Company has not offered, promised or agreed to any future variation in the contract of any Employee or Worker. | |
89. | In respect of each Employee and Worker, the Company has: |
| performed all obligations and duties it is required to perform (and settled all outstanding claims), whether or not legally binding and whether arising under contract, statute, at common law or in equity or under any treaties including the EC Treaty or laws of the European Community or otherwise; | ||
| complied with the terms of any relevant agreement or arrangement with any trade union, employee representative or body of employees or their representatives (whether binding or not); | ||
| maintained adequate and up to date records. |
90. | Part 7 of the Income Tax (Earnings and Pensions) Act 2003 does not apply to any shares in the Company. | |
PROPERTY | ||
The definitions in this paragraph apply in this agreement. | ||
Current Use: the use for each Property as set out in Schedule 7. | ||
Lease: the lease under which each Leasehold Property is held. | ||
Leasehold Properties: the Leasehold Properties set out in Schedule 7and Leasehold Property means any one of them or part of parts of any one of them. | ||
Previously-owned Land and Buildings: land and buildings that have, at any time before the date of this agreement, been owned (under whatever tenure) and/or occupied and/or used by the Company, but which are either no longer owned, occupied or used by the Company, or are owned, occupied or used by one of them but pursuant to a different lease, licence, transfer or conveyance. | ||
Planning Acts: the Town and Country Planning Act 1990; the Planning (Listed Buildings and Conservation Areas) Act 1990; the Planning (Hazardous Substances) Act 1990; the Planning (Consequential Provisions) Act 1990; the Planning and Compensation |
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Act 1991; the Planning and Compulsory Purchase Act 2004; and any other legislation from time to time regulating the use or development of land. | ||
Properties: the Leasehold Properties and Property means any one of them or any part or parts of any one of them. | ||
Property Statutes: the Public Health Acts; the Occupiers Liability Act 1957; the Offices, Shops and Railway Premises Act 1963; the Health and Safety at Work etc. Act 1974; the Control of Pollution Act 1974; the Occupiers Liability Act 1984; the Environmental Protection Act 1990; the Construction (Design and Management) Regulations 1994; the Environmental Protection Act 1995; the Disability Discrimination Act 1995; the Control of Asbestos at Work Regulations 2002; and all regulations, rules and delegated legislation under, or relating to, such statutes. | ||
Statutory Agreement: an agreement or undertaking entered into under section 18 of the Public Health Act 1936; section 52 of the Town and Country Planning Act 1971; section 33 of the Local Government (Miscellaneous Provisions) Act 1982; section 106 of the Town and Country Planning Act 1990; section 104 of the Water Industry Act 1991; and any other legislation (later or earlier) similar to these statutes. | ||
91. | The particulars of the Properties set out in Schedule 7 are true, complete and accurate. | |
92. | The Properties are the only land and buildings owned, used or occupied by the Company. | |
93. | 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, estate or interest in, or affecting, any land or buildings other than the Properties. | |
94. | The Company does not have any actual or contingent liability in respect of Previously-owned Land and Buildings. | |
95. | Neither the Company, nor any company that is or has at any time been a Subsidiary of the Company, has given any guarantee or indemnity for any liability relating to any of the Properties. | |
96. | The Company is solely legally and beneficially entitled to each of the Properties, and is in possession and actual occupation of the whole of it on an exclusive basis and no right of occupation has been granted to a third party. | |
97. | All the documents of title to be delivered to the Buyer on the Completion Date shall be original documents, with all Stamp Duty Land Tax duly paid and registered, where completed. | |
98. | Where title to any of the Properties is not registered at HM Land Registry, there is no caution against first registration of title and no event has occurred in consequence of which a caution against first registration of title could be effected. | |
99. | There is no circumstance that could rnder any transaction affecting the title of the Company to any of the Properties liable to be set aside under the Insolvency Act 1986. | |
100. | There are no insurance policies relating to any issue of title affecting the Properties. |
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101. | There are, appurtenant to each of the Properties, all rights and easements necessary for their Current Use and enjoyment (without restriction as to time or otherwise). | |
102. | The unexpired residue of the term granted by each Lease, is or will be vested in the Company and is or will be valid and subsisting against all persons, including any person in whom any superior estate or interest is vested. | |
103. | So far as the Company is aware, in relation to each Lease, the landlord and each lessee, tenant, licensee or occupier has observed and performed in all material respects all covenants, restrictions, stipulations and other encumbrances and there has not been (expressly or impliedly) any waiver of or acquiescence to any breach of them. | |
104. | In relation to each Lease, all principal rent and additional rent and all other sums payable by each lessee, tenant, licensee or occupier under each Lease (Lease Sums) have been paid as and when they became due and no Lease Sums have been: |
| set off or withheld; or | ||
| commuted, waived or paid in advance of the due date for payment. |
105. | Any consents required for the grant of each Lease, and for the assignments of each Lease, have been obtained and placed with the documents of title along with evidence of the registration of grant where completed. | |
106. | The Properties (and the proceeds of sale from them) are free from: |
| any mortgage, debenture, charge (whether legal or equitable and whether fixed or floating), rentcharge, lien or other right in the nature of security; and | ||
| any agreement for sale or estate contract, option, |
107. | So far as the Company is aware, the Properties are not subject to any matters which are, or (where title to any of the Properties is not registered) would be unregistered interests which override first registration under Schedule 1 to the Land Registration Act 2002 and unregistered interests which override registered dispositions under Schedule 3 to the Land Registration Act 2002. | |
108. | So far as the Company is aware, there are no covenants, restrictions, stipulations, easements, profits à prendre, wayleaves, licences, grants or other encumbrances (whether of a private or public nature, and whether legal or equitable) affecting the Properties which are of an onerous or unusual nature, or affect their value, or which conflict with the Current Use of the Properties. | |
109. | So far as the Company is aware, all covenants, restrictions, stipulations and other encumbrances affecting the Properties have been fully observed and performed and no notice of any alleged breach has been received by the Company (or its predecessors in title). | |
110. | There are no circumstances which (with or without taking other action) would entitle any third party to exercise a right of entry to, or take possession of all or any part of the Properties, or which would in any other way affect or restrict the continued possession, enjoyment or use of any of the Properties. |
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111. | So far as the Company is aware, there are no matters which are registered as local land charges. | |
112. | The Current Use of each of the Properties is the permitted use for the purposes of the Planning Acts. Where applicable, the Current Use of each of the Properties is in accordance with the provisions of the Leases. | |
113. | All necessary building regulation consents have been obtained both in relation to the Current Use of the Properties and any alterations and improvements to them. | |
114. | The Company is not aware of any claim or liability (contingent or otherwise) under the Planning Acts in respect of the Properties, or any Statutory Agreement affecting the Properties, are outstanding nor are the Properties the subject of a notice to treat or a notice of entry, and no notice, order resolution or proposal has been published for the compulsory acquisition, closing, demolition or clearance of the Properties, and, so far as the Company is aware, the Company is not aware of any matter or circumstances which would lead to any such notice, order, resolution or proposal. | |
115. | The Company and the Subsidiaries have complied with all applicable statutory and bye- law requirements, and all regulations, rules and delegated legislation, relating to the Properties and their Current Use, including (without limitation) all requirements under the Property Statutes. | |
116. | Each of the Properties is in a good state of repair and condition and fit for the Current Use. | |
117. | There are no development works, redevelopment works or fitting-out works outstanding in respect of any of the Properties as opposed to the developments of which they form part. | |
ACCOUNTS | ||
118. | The Accounts have been prepared in accordance with the Companies Acts and with accounting standards, policies, principles and practices generally accepted in the UK and in accordance with the law of that jurisdiction. | |
119. | The Accounts: |
(a) | make proper and adequate provision or reserve for all bad and doubtful debts, obsolete or slow-moving stocks and for depreciation on fixed assets; | ||
(b) | do not overstate the value of current or fixed assets; and | ||
(c) | do not understate any liabilities (whether actual or contingent). |
120. | The Accounts show a true and fair view of the commitments and financial position and affairs of the Company as at the Accounts Date and of the profit and loss of the Company for the financial year ended on that date. | |
121. | The Accounts contain either provision adequate to cover, or full particulars in notes of, all Taxation (including deferred Taxation) and other liabilities (whether quantified, contingent, disputed or otherwise) of the Company as at the Accounts Date. |
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122. | The Accounts are not affected by any unusual or non-recurring items or any other factor that would make the financial position and results shown by the Accounts unusual or misleading in any material respect. | |
123. | The Accounts have been filed and laid before the Company in general meeting in accordance with the requirements of the Companies Acts. | |
124. | The Accounts have been prepared on a basis consistent with the audited accounts of the Company for the prior accounting period without any change in accounting policies used. | |
125. | The Management Accounts have been prepared on a basis consistent with that employed in preparing the previous management accounts of the Company and fairly represent the assets and liabilities and the profits and losses of the Company as at and to the date for which they have been prepared. | |
FINANCIAL AND OTHER RECORDS | ||
126. | All financial and other records of the Company (excluding the Accounts and the Management Accounts) including all deeds and documents belonging to the Company: |
(a) | have been properly prepared and maintained; | ||
(b) | constitute an accurate record of all matters required by law to appear in them; | ||
(c) | do not contain any material inaccuracies or discrepancies; and | ||
(d) | are in the possession of the Company. |
127. | No notice has been received or allegation made that any of those records are incorrect or should be rectified. | |
128. | All statutory records, including accounting records, required to be kept or filed by the Company have been properly kept or filed and comply with the requirements of the Companies Acts. | |
CHANGES SINCE ACCOUNTS DATE | ||
129. | Since the Accounts Date: |
(a) | the Company has conducted its business in the normal course and as a going concern; | ||
(b) | there has been no material adverse change in the turnover, financial position or prospects of the Company; | ||
(c) | the Company has not issued or agreed to issue any share or loan capital; | ||
(d) | no dividend or other distribution of profits or assets has been, or agreed to be, declared, made or paid by the Company; | ||
(e) | save as Disclosed, the Company has not borrowed or raised any money or taken any form of financial security and no capital expenditure has been incurred on |
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any individual item by the Company and the Company has not acquired, invested or disposed of (or agreed to acquire, invest or dispose of) any individual item in excess of £50,000; | |||
(f) | no shareholder resolutions of the Company have been passed other than as routine business at the annual general meeting; | ||
(g) | there has been no abnormal increase or reduction of stock in trade; | ||
(h) | none of the stock in trade reflected in the Accounts has realised an amount less than the value placed in it in the Accounts; and | ||
(i) | the Company has not offered price reductions or discounts or allowances on sales of stock in trade, or sold stock in trade at less than cost price. |
EFFECT OF SALE ON SALE SHARES | ||
130. | Neither the acquisition of the Sale Shares by the Buyer nor compliance with the terms of this agreement will: |
(a) | cause the Company to lose the benefit of any right or privilege it presently enjoys; or | ||
(b) | relieve any person of any obligation to the Company (whether contractual or otherwise), or enable any person to determine any such obligation or any right or benefit enjoyed by the Company, or to exercise any right in respect of the Company; or | ||
(c) | give rise to, or cause to become exercisable, any right of pre-emption over the Sale Shares; or | ||
(d) | entitle any person to receive from the Company any finders fee, brokerage or other commission in connection with the purchase of the Sale Shares by the Buyer; or | ||
(e) | result in any customer or supplier being entitled to cease dealing with the Company or to reduce substantially its existing level of business or to change the terms on which it deals with the Company; or | ||
(f) | so far as the Warrantors are aware, result in any officer or senior Employee leaving the Company; or | ||
(g) | result in a breach by the Company of contract, law, regulation, order, judgment, injunction, undertaking, decree or other like imposition; or | ||
(h) | result in the loss or impairment of or any default under any licence, authorisation or consent required by the Company for the purposes of its business; or | ||
(i) | result in the creation, imposition, crystallisation or enforcement of any Encumbrance on any of the assets of the Company; or |
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(j) | result in any present or future indebtedness of the Company becoming due and payable, or capable of being declared due and payable, prior to its stated maturity date or in any financial facility of the Company being withdrawn; or | ||
(k) | entitle any person to acquire or affect the entitlement of any person to acquire shares in the Company. |
RETIREMENT BENEFITS | ||
131. | The Company has no Pension Scheme and the Company has no obligation to provide or contribute towards pension, lump sum, death, ill health, disability or accident benefits in respect of its past or present officers and employees. |
GENERAL | ||
132. | All notices, returns (including any land transaction returns), reports, accounts, computations, statements, assessments and registrations and any other necessary information submitted by the Company to any Taxation Authority for the purposes of Taxation have been made on a proper basis, were 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 Warrantors are aware, is likely to be, the subject of any material dispute with any Taxation Authority. | |
133. | All Taxation (whether of the United Kingdom or elsewhere) for which the Company is or has been liable or is liable to account for has been duly paid (insofar as such Taxation ought to have been paid). | |
134. | The Company has not made any payments representing instalments of corporation tax pursuant to the Corporation Tax (Instalment Payments) Regulations 1998 in respect of any current or preceding accounting periods and is not under any obligation to do so. | |
135. | The Company has not paid since the date of its incorporation nor is liable to pay any penalty, fine, surcharge or interest charged by virtue of the provisions of the TMA 1970 or any other Taxation Statute. | |
136. | The Company has not within the past 12 months been subject to any non-routine visit, audit, investigation, discovery or access order by any Taxation Authority and the Warrantors are not aware of any circumstances existing which make it likely that a visit, audit, investigation, discovery or access order will be made in the next 12 months. | |
137. | The amount of Taxation chargeable on the Company during any accounting period since the date of its incorporation has not, to any material extent, depended on any concession, agreements or other formal or informal arrangement with any Taxation Authority. | |
138. | All transactions in respect of which any clearance or consent was required from any Tax Authority have been entered into by the Company after such consent or clearance has been properly obtained, any application for such clearance or consent has been made on the basis of full and accurate disclosure of all relevant material facts and considerations, and all such transactions have been carried into effect only in accordance with the terms of the relevant clearance or consent. |
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139. | The Company has duly submitted all claims, disclaimers and elections the making of which has been assumed for the purposes of the Accounts and, so far as the Warrantors are aware, none of such claims, disclaimers or elections are likely to be disputed or withdrawn. | |
140. | The Disclosure Letter contains full particulars of all matters relating to Taxation in respect of which the Company is or at Completion will be entitled to: |
(a) | make any claim (including a supplementary claim), disclaimer or election for relief under any Taxation Statute or provision; and/or | ||
(b) | appeal against any assessment or determination relating to Taxation; and/or | ||
(c) | apply for a postponement of Taxation. |
141. | The Company is not liable to make to any person (including any Taxation Authority) any payment in respect of any liability to Taxation of any other person where that other person fails to discharge liability to Taxation to which he is or may be primarily liable. | |
142. | The Company has sufficient records to determine the tax consequence which would arise on any disposal or realisation of any asset owned at the Accounts Date or acquired since that date but prior to Completion. | |
CHARGEABLE GAINS | ||
143. | The book value shown or adopted for the purposes of the Accounts as the value of each of the assets of the Company on the disposal of which a chargeable gain or allowable loss could arise does not exceed the amount which on a disposal of such asset at the date of this agreement would be deductible under section 38 of TCGA 1992. | |
CAPITAL ALLOWANCES | ||
144. | No balancing charge under the CAA 2001 (or any other legislation relating to capital allowances) would be made on the Company on the disposal of any pool of assets (that is, all those assets whose expenditure would be taken into account in computing whether a balancing charge would arise on a disposal of any other of those assets) or of any asset not in such a pool, on the assumption that the disposals are made for a consideration equal to the book value shown in or adopted for the purpose of the Accounts for the assets in the pool or (as the case may be) for the asset. | |
145. | No event has occurred since the Accounts Date (otherwise than in the ordinary course of business) whereby any balancing charge may fall to be made against, or any disposal value may fall to be brought into account by the Company under the CAA 2001 (or any other legislation relating to capital allowances). | |
DISTRIBUTIONS | ||
146. | No distribution or deemed distribution within the meaning of sections 209, 210 or 211 of ICTA 1988 has been made (or will be deemed to have been made) by the Company except dividends shown in the Accounts and the Company is not bound to make any such distribution. |
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147. | No rents, interest, annual payments or other sums of an income nature paid or payable by the Company or which the Company is under an existing obligation to pay in the future are or may be wholly or partially disallowable as deductions, management expenses or charges in computing profits for the purposes of corporation tax. | |
148. | The Company has not since the date of its incorporation been engaged in, nor been a party to, any of the transactions set out in sections 213 to 218 (inclusive) of ICTA 1988, nor has it made or received a chargeable payment as defined in section 218(1) of ICTA 1988. | |
LOAN RELATIONSHIPS | ||
149. | All interests, discounts and premiums payable by the Company in respect of its loan relationships (within the meaning of section 81 of the Finance Act 1996) are eligible to be brought into account by the Company as a debit for the purposes of Chapter II of Part IV of the Finance Act 1996 at the time and to the extent that such debits are recognised in the statutory accounts of the Company. | |
CLOSE COMPANIES | ||
150. | The Company has not at any time since the date of its incorporation been a close company within the meaning of sections 414 and 415 of ICTA 1988. | |
INTANGIBLE ASSETS | ||
For the purposes of this paragraph 151, references to intangible fixed assets mean intangible fixed assets and goodwill within the meaning of Schedule 29 to the Finance Act 2002 to which the provisions of that Schedule apply and references to an intangible fixed asset shall be construed accordingly. | ||
151. | The Disclosure Letter sets out the amount of expenditure on each of the intangible fixed assets of the Company and provides the basis on which any debit relating to that expenditure has been taken into account in the Accounts or, in relation to expenditure incurred since the Accounts Date, will be available to the Company and, so far as the Warrantors are aware, no circumstances have arisen since the Accounts Date by reason of which that basis might change. | |
152. | No claims or elections have been made by the Company under Part 7 of, or paragraph 86 of Schedule 29 to, the Finance Act 2002 in respect of any intangible fixed asset of the Company. | |
153. | Since the Accounts Date: |
(a) | the Company has not owned and does not currently own an asset which has ceased to be a chargeable intangible asset in the circumstances described in paragraph 108 of Schedule 29 to the Finance Act 2002; | ||
(b) | the Company has not realised or acquired an intangible fixed asset for the purposes of Schedule 29 to the Finance Act 2002; and | ||
(c) | no circumstances have arisen which have required, or, so far as the Warrantors are aware, will require, a credit to be brought into account by the Company on a revaluation of an intangible fixed asset. |
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COMPANY RESIDENCE AND OVERSEAS INTERESTS | ||
154. | The Company has since incorporation been resident in the United Kingdom for corporation tax purposes and has not at any time since incorporation been treated for the purposes of any double taxation arrangements having effect by virtue of section 249 of the Finance Act 1994, section 788 of ICTA 1988 or for any other tax purpose as resident in any other jurisdiction. | |
155. | The Company does not hold shares in a company which is not resident in the United Kingdom and which would be a close company if it were resident in the United Kingdom in circumstances such that a chargeable gain accruing to the company not resident in the United Kingdom could be apportioned to the Company pursuant to section 13 of TCGA 1992. | |
156. | The Company is not holding nor has held since the date of its incorporation any interest in a controlled foreign company within section 747 of ICTA 1988, and does not have any material interest in an offshore fund as defined in section 759 of ICTA 1988. | |
157. | The Company does not have a permanent establishment outside the UK. | |
ANTI-AVOIDANCE | ||
158. | All transactions or arrangements made by the Company have been made on fully arms length terms and there are no circumstances in which section 770A of, or Schedule 28AA to, ICTA 1988 or any other rule or provision could apply causing any Taxation Authority to make an adjustment to the terms on which such transaction or arrangement is treated as being made for Taxation purposes. | |
159. | The Company has not at any time been a party to or otherwise involved in a transaction or series of transactions in relation to which advisers considered that there was a risk that the Company could be liable to taxation as a result of the principles in W.T Ramsey Limited v IRC (54 TC 101) or Furniss v Dawson (55 TC 324), as developed in subsequent cases. | |
INHERITANCE TAX | ||
160. | The Company has not made any transfer of value within sections 94 and 202 of the IHTA 1984, nor has it received any value such that liability might arise under section 199 of the IHTA 1984, nor has it been a party to associated operations in relation to a transfer of value as defined by section 268 of the IHTA 1984. | |
161. | There is no unsatisfied liability to inheritance tax attached to or attributable to the Sale Shares or any asset of the Company and none of them are subject to any HM Revenue & Customs charge as mentioned in section 237 and 238 of the IHTA 1984. | |
162. | No asset owned by the Company, nor the Sale Shares are liable to be subject to any sale, mortgage or charge by virtue of section 212(1) of the IHTA 1984. | |
VAT | ||
163. | The Company is a taxable person and is duly registered for the purposes of VAT with quarterly prescribed accounting periods, such registration not being pursuant to paragraph 2 of Schedule 1 to the VATA 1994 or subject to any conditions imposed by or |
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agreed with HM Revenue & Customs and the Company is not (nor, so far as the Warrantors are aware, are there any circumstances by virtue of which they may become) under a duty to make monthly payments on account under the Value Added Tax (Payments on Account) Order 1993. | ||
164. | The Company has complied with all statutory provisions, rules, regulations, orders and directions in respect of VAT. | |
165. | All supplies made by the Company are taxable supplies and the Company has not been nor, so far as the Warrantors are aware, will be denied full credit for all input tax by reason of the operation of sections 25 and 26 of the VATA 1994 and regulations made thereunder or for any other reasons and no VAT paid or payable by the Company is not input tax as defined in section 24 of the VATA 1994 and regulations made thereunder. | |
166. | The Company is not nor has been for VAT purposes a member of any group of companies and no act or transaction has been effected in consequence whereof the Company is or may be held liable for any VAT arising from supplies made by another company and no direction has been given by HM Revenue & Customs under Schedule 9A to the VATA 1994 as a result of which the Company would be treated for the purposes of VAT as a member of a group. | |
167. | For the purposes of paragraph 3(7) of Schedule 10 to the VATA 1994, the Company or any relevant associates of the Company (within the meaning of paragraph 3(7) of Schedule 10 to the VATA 1994) has exercised the election to waive exemption from VAT (pursuant to paragraph 2 of Schedule 10 to the VATA 1994) only in respect of those Properties listed (as having been the subject of such an election) in the Disclosure Letter and: |
(a) | 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 to the VATA 1994 has been given and any permission required by paragraph 3(9) of Schedule 10 to the VATA 1994 has been properly obtained; and | ||
(b) | 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 to the VATA 1994. |
168. | The Company does not own nor has since the date of its incorporation owned any assets which are capital items subject to the capital goods scheme under Part XV of the VAT Regulations 1995. | |
169. | The Company has not made any claim for bad debt relief under section 36 of the VATA 1994 and, so far as the Warrantors are aware, and there are no existing circumstances by virtue of which any refund of VAT obtained or claimed may be required to be repaid or there could be a claw back of input VAT from any Company under section 36(4) of the VATA 1994. |
53
STAMP DUTY AND STAMP DUTY LAND TAX | ||
170. | Any document that is necessary in proving the title of the Company to any asset which is owned by the Company at Completion or any document which the Company may wish to enforce or produce in evidence is duly stamped for stamp duty purposes. | |
171. | 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 the Company. | |
172. | The Disclosure Letter sets out full and accurate details of any chargeable interest (as defined under section 48, Finance Act 2003) acquired or held by the Company before Completion in respect of which the Warrantors are aware or ought reasonably to be aware that an additional land transaction return will be required to be filed with a Taxation Authority and/or a payment of stamp duty land tax made on or after Completion. |
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1. | INTERPRETATION | |
1.1 | The definitions and rules of interpretation in this paragraph apply in this Tax Covenant: | |
Buyers Relief: means: |
(a) | any Accounts Relief (as defined in paragraph (a) of the definition of Liability for Taxation) or Repayment Relief (as defined in paragraph (b) of the definition of Liability for Taxation); | ||
(b) | any Post Accounts Date Relief of the Company (as defined in paragraph (c) of the definition of Liability for Taxation); and | ||
(c) | any Relief whenever arising, of the Buyer or any member of the Buyers Tax Group other than the Company. |
Buyers Tax Group: the Buyer and any other company or companies which either are or become after Completion, or have within the seven years ending at Completion been, treated as members of the same group as, or otherwise connected or associated in any way with, the Buyer for any Tax purpose. | |||
Event: includes (without limitation), the expiry of a period of time, the Company becoming or ceasing to be associated with any other person for any Tax purpose or ceasing to be or becoming resident in any country for any Tax purpose, the death or the winding up or dissolution of any person, and any transaction (including the execution and completion of all provisions of this agreement), event, act or omission whatsoever, and any reference to an Event occurring on or before a particular date shall include Events which for Tax purposes are deemed to have, or are treated or regarded as having, occurred on or before that date. | |||
Liability for Taxation: any liability of the Company to make a payment of or in respect of Tax whether or not the same is primarily payable by the Company and whether or not the Company has or may have any right of reimbursement against any other person or persons and shall also include: |
(a) | the Loss of any Relief ( Accounts Relief ) where such Relief has been taken into account in computing and so reducing or eliminating any provision for deferred Tax which appears in the Accounts (or which but for such Relief would have appeared in the Accounts) or where such Relief was treated as an asset of the Company in the Accounts or was taken into account in computing any deferred Tax asset which appears in the Accounts ( Loss of an Accounts Relief ), in which case the amount of the Liability for Taxation will be the amount of Tax which would (on the basis of Tax rates current at the date of such Loss) have been saved but for such Loss, assuming for this purpose that the Company had sufficient profits or was otherwise in a position to use the Relief; | ||
(b) | the Loss of any right to repayment of Tax (including any repayment supplement) ( Repayment Relief ) which was treated as an asset in the Accounts ( Loss of a |
55
Repayment Relief ), in which case the amount of the Liability for Taxation will be the amount of the loss of the right to repayment and any related repayment supplement; | |||
(c) | the set off or use against income, profits or gains earned, accrued or received or against any Tax chargeable in respect of an Event occurring on or before the Accounts Date of any Relief ( Post Accounts Date Relief ) or right to repayment of Tax (including any repayment supplement) which is not available before the Accounts Date but arises after the Accounts Date in circumstances where, but for such set off or use, the Company would have had a liability to make a payment of or in respect of Tax for which the Buyer would have been able to make a claim against the Warrantors under this Tax Covenant ( Loss of a Post-Accounts Date Relief ), in which case, the amount of the Liability for Taxation shall be the amount of Tax saved by the Company as a result of such set off or use; | ||
(d) | any liability of the Company to make a payment pursuant to an indemnity, guarantee or covenant entered into before Completion under which the Company has agreed to meet or pay a sum equivalent to or by reference to another persons Tax liability, in which case the Liability for Taxation shall be equal to the amount of the liability. |
Loss: any reduction, modification, loss, counteraction, nullification, utilisation, disallowance or claw-back for whatever reason. | ||
Overprovision: the amount by which any provision in the Accounts relating to Tax (other than a provision for deferred Tax) is overstated (except to the extent that such overstatement results from the utilisation of a Buyers Relief), applying the accounting policies, principles and practices adopted in relation to the preparation of the Accounts (and ignoring the effect of any change in law made after Completion). | ||
Relief: includes any loss, relief, allowance, credit, exemption or set off in respect of Tax or any deduction in computing income, profits or gains for the purposes of Tax and any right to a repayment of Tax. | ||
Saving: the reduction or elimination of any liability of the Company to make an actual payment of Tax in respect of which the Warrantors would not have been liable under paragraph 2, by the use of any Relief arising wholly as a result of a Liability for Taxation in respect of which the Warrantors have made a payment under paragraph 2 of this Tax Covenant. | ||
Tax: all forms of taxation and statutory, governmental, state, federal, provincial, local, government or municipal charges, duties, imposts, contributions, levies, withholdings or liabilities wherever chargeable and whether of the UK or any other jurisdiction; and any penalty, fine, surcharge, interest, charges or costs relating thereto, and Taxation shall have the same meaning. | ||
Tax Claim: any assessment (including self-assessment), notice, demand, letter or other document issued or action taken by or on behalf of any Taxation Authority from which it appears that the Company or the Buyer is or may be subject to a Liability for Taxation or other liability in respect of which the Warrantors are or may be liable under this Tax Covenant. |
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Taxation Authority: HM Revenue & Customs, the Department of Social Security and any other governmental authority whatsoever competent to impose any Tax whether in the United Kingdom or elsewhere | ||
Taxation 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. | ||
1.2 | References to gross receipts, income, profits or gains earned, accrued or received shall include any gross receipts, income, profits or gains deemed pursuant to the relevant Taxation Statute to have been or treated or regarded as earned, accrued or received. | |
1.3 | References to a repayment of Tax shall include any repayment supplement or interest in respect of it. | |
1.4 | A reference to an Event occurring on or before Completion includes a series or combination of Events which are linked all of which were or the first of which was an Event occurring on or before Completion. | |
1.5 | Any reference to something occurring in the ordinary course of business shall, without prejudice to the generality thereof, be deemed not to include: |
(a) | anything which involves, or leads directly or indirectly to, any liability of the Company to Tax that is the primary liability of, or properly attributable to, or due from another person (other than a member of the Buyers Tax Group) or is the liability of the Company only because some other person, other than a member of the Buyers Tax Group, has failed to pay it or is the liability of the Company because it has elected to be regarded as taxable or liable or to be regarded as having made a disposal; or | ||
(b) | anything which relates to or involves the acquisition or disposal of an asset or the supply of services (including the lending of money, or the hiring or licensing of tangible or intangible property) in a transaction which is not entered into on arms length terms; or | ||
(c) | anything which relates to or involves the making of a distribution for Tax purposes, the creation, cancellation or re-organisation of share or loan capital, the creation, cancellation or repayment of any intra-group debt or the Company becoming or ceasing to be associated or connected with any other company for any Tax purposes; or | ||
(d) | anything which relates to a transaction or arrangement which includes, or a series of transactions or arrangements which includes, any step or steps having no commercial or business purpose apart from the reduction, avoidance or deferral of a Liability for Taxation; or | ||
(e) | anything which gives rise to a Liability for Taxation on deemed (as opposed to actual) profits or to the extent that it gives rise to a Liability for Taxation on an |
57
amount of profits greater than the difference between the sale proceeds of an asset and the amount attributable to that asset in the Accounts or, in the case of an asset acquired since the Accounts Date, the cost of that asset; or | |||
(f) | anything which involves, or leads directly or indirectly to, a change of residence of the Company for Tax purposes. |
1.6 | Unless the contrary intention appears, words and expressions defined in this agreement have the same meaning in this Tax Covenant and any provisions in this agreement concerning matters of construction or interpretation also apply in this Tax Covenant. | |
1.7 | For the avoidance of doubt, references to any Liability for Taxation of the Company which results from any gains earned or received on or before Completion or any Event on or before Completion include a reference to any Liability for Taxation of the Company resulting from the sale of the Sale Shares pursuant to this agreement (including, without limitation, any liability arising under section 179 of TCGA 1992). | |
2. | COVENANT | |
The Warrantors covenant with the Buyer that, subject to the provisions of this Tax Covenant, the Warrantors shall pay to the Buyer, to the extent possible, but not so as to limit the amount payable where not wholly possible, by way of repayment of the consideration for the Sale Shares, an amount equal to any: |
(a) | Liability for Taxation resulting from or by reference to any Event occurring on or before Completion or in respect of any gross receipts, income, profits or gains earned, accrued or received by the Company on or before Completion; | ||
(b) | Liability for Taxation which arises solely as a result of the relationship for Tax purposes of the Company with any person other than a member of the Buyer Tax Group whensoever arising; | ||
(c) | payment of interest or penalties for which the Company is liable as a result of the Company failing to make any instalment payment under the Corporation Tax (Instalment Payments) Regulations 1998 in any period ending on or before Completion sufficient to avoid such interest or penalties; | ||
(d) | Liability for Taxation falling within paragraph (a) to paragraph (d) of the definition of Liability for Taxation; and | ||
(e) | costs and expenses referred to in paragraph 11. |
3. | PAYMENT DATE AND INTEREST | |
3.1 | Where the Warrantors are liable to make any payment under paragraph 2 (including any payment pursuant to paragraph 2(e)), the due date for the making of that payment (Due Date) shall be the earlier of the date falling seven days after the Buyer has served a notice on the Warrantors demanding that payment and in a case: |
(a) | that involves an actual payment of Tax (including any payment pursuant to paragraph 2(e)) by the Company, the date on which the Tax in question would have had to have been paid to the relevant Taxation Authority in order to |
58
prevent a liability to interest or a fine, surcharge or penalty from arising in respect of the Liability for Taxation in question; or | |||
(b) | that falls within paragraph (a) of the definition of Liability to Taxation, the last date upon which the Tax is or would have been required to be paid to the relevant Taxation Authority in respect of the period in which the Loss of the Relief occurs (assuming for this purpose that the Company had sufficient profits or was otherwise in a position to use the Relief); or | ||
(c) | that falls within paragraph (b) of the definition of Liability to Taxation, the date upon which the repayment was due from the relevant Taxation Authority; or | ||
(d) | that falls within paragraph (c) of the definition of Liability to Taxation, the date upon which the Tax saved by the Company is or would have been required to be paid to the relevant Taxation Authority; or | ||
(e) | that falls within paragraph (d) (liability for indemnity, guarantee or covenant payment) of the definition of Liability for Taxation, not later than the fifth day before the day on which the Company is due to make the payment or repayment. |
3.2 | Any dispute as to the amount specified in any notice served on the Seller under paragraph 3.1(b) to paragraph 3.1(e) shall be determined by the auditors of the Company for the time being, acting as experts and not as arbitrators (the costs of that determination being shared equally by the Warrantors and the Buyer). | |
3.3 | If any sums required to be paid by the Warrantors under this Tax Covenant are not paid on the Due Date, then, except to the extent that the Warrantors liability under paragraph 2 compensates the Buyer for the late payment by virtue of it extending to interest and penalties, such sums shall bear interest (which shall accrue from day to day after as well as before any judgment for the same) at the rate of 2% per annum over the base rate from time to time of HSBC or (in the absence thereof) at such similar rate as the Buyer shall select from the day following the Due Date up to and including the day of actual payment of such sums, such interest to be compounded quarterly. | |
4. | EXCLUSIONS | |
4.1 | The covenant contained in paragraph 2 above shall not cover any Liability for Taxation to the extent that: |
(a) | a provision or reserve in respect thereof is made in the Accounts; or | ||
(b) | it arises as a result of a transaction in the ordinary course of business of the Company between the Accounts Date and Completion and is not an interest or penalty (which expression includes interest or penalties under the Corporation Tax (Instalment Payments) Regulations 1998), surcharge or fine in connection with Tax; or | ||
(c) | it arises or is increased as a result only of any change in the law of Tax announced and coming into force after Completion (whether relating to rates of Tax or otherwise) or the withdrawal, after Completion, of any extra-statutory concession previously made by a Taxation Authority (whether or not the change purports to |
59
be effective retrospectively in whole or in part) or any change in the published practice of any Taxation Authority after Completion; or | |||
(d) | it would not have arisen but for a change after Completion in the accounting bases upon which the Company values its assets (other than a change made in order to comply with UK GAAP); or | ||
(e) | the Buyer is compensated for any such matter under any other provision of this agreement; or | ||
(f) | it would not have arisen but for a voluntary act or transaction carried out by the Buyer or the Company after Completion being an act which: |
(i) | is not in the ordinary course of business; or | ||
(ii) | could reasonably have been avoided; or | ||
(iii) | the Company was not legally committed to do under a commitment that existed on or before Completion; or | ||
(iv) | the Buyer was aware would give rise to the Liability for Taxation in question; or |
(g) | the Liability for Taxation arises from a matter disclosed in the Disclosure Letter; | ||
(h) | the Liability for Taxation has been made good or otherwise compensated for at no expense to the Buyer or the Company; | ||
(i) | the Liability for Taxation is attributable to the Company ceasing to be entitled to the small companies rate of corporation tax; | ||
(j) | the Liability for Taxation would not have arisen or would have been reduced or eliminated but for any claim, disclaimer or election made after Completion by the Buyer or the Company including, without limitation, a disclaimer of or a revision to a claim for capital allowances claimed before Completion. |
5. | OVERPROVISIONS | |
5.1 | If, on or before the seventh anniversary of Completion, the auditors for the time being of the Company certify (at the request and expense of the Warrantors) that any provision for Tax in the Accounts has proved to be an Overprovision, then: |
(a) | the amount of any Overprovision shall first be set off against any payment then due from the Warrantors under this Tax Covenant; | ||
(b) | to the extent that there is an excess, a refund shall be made to the Warrantors of any previous payment or payments made by the Warrantors under this Tax Covenant (and not previously refunded under this Tax Covenant) up to the amount of such excess; and | ||
(c) | to the extent that excess referred to in paragraph 5.1(b) is not exhausted, the remainder of that excess will be carried forward and set off against any future |
60
payment or payments which become due from the Warrantors under this Tax Covenant. |
5.2 | After the Companys auditors have produced any certificate under this paragraph 5, the Warrantors or the Buyer may, at any time before the seventh anniversary of Completion, request the auditors for the time being of the Company to review (at the expense of the party requesting such review) that certificate in the light of all relevant circumstances, including any facts of which it was not aware, and which were not taken into account, at the time when such certificate was produced, and to certify whether in their opinion the certificate remains correct or whether, in light of those circumstances, it should be amended. | |
5.3 | If the auditors make an amendment to the earlier certificate and the amount of the Overprovision is revised, that revised amount shall be substituted for the previous amount and any adjusting payment that is required shall be made by or to the Warrantors as soon as practicable. | |
6. | SAVINGS | |
6.1 | If (at the Warrantors request and expense) the auditors for the time being of the Company determine that the Company has obtained a Saving, the Buyer shall as soon as reasonably practicable thereafter repay to the Warrantors the lesser of: |
(a) | the amount of the Saving (as determined by the auditors) less any costs incurred by the Buyer or the Company; and | ||
(b) | the amount paid by the Warrantors under paragraph 2 in respect of the Liability for Taxation which gave rise to the Saving less any part of that amount previously repaid to the Warrantors under any provision of this Tax Covenant or otherwise. |
7. | RECOVERY FROM THIRD PARTIES | |
7.1 | Where the Warrantors have paid an amount in full discharge of a liability under paragraph 2 in respect of any Liability for Taxation and the Buyer or the Company is or becomes entitled to recover from some other person not being the Buyer or the Company or any other company within the Buyers Tax Group, any amount in respect of such Liability for Taxation, the Buyer shall or shall procure that the Company shall: |
(a) | notify the Warrantors of its entitlement as soon as reasonably practicable; and | ||
(b) | if required by the Warrantors and, subject to the Buyer or the Company being indemnified by the Warrantors against any Tax that may be suffered on receipt of that amount and any costs and expenses incurred in recovering that amount, take or procure that the Company takes all reasonable steps to enforce that recovery against the person in question (keeping the Warrantors fully informed of the progress of any action taken) provided that the Buyer shall not be required to take any action pursuant to this paragraph 7.1 (other than an action against: |
(i) | a Taxation Authority; or | ||
(ii) | a person who has given Tax advice to the Company on or before Completion), |
61
which, in the Buyers reasonable opinion, is likely to harm its or the Companys commercial relationship (potential or actual) with that or any other person. | ||
7.2 | If the Buyer or the Company recovers any amount referred to in paragraph 7.1, the Buyer shall account to the Warrantors for the lesser of: |
(a) | any amount recovered (including any related interest or related repayment supplement) less any Tax suffered in respect of that amount and any costs and expenses incurred in recovering that amount (save to the extent that amount has already been made good by the Warrantors under paragraph 7.1(b)); and | ||
(b) | the amount paid by the Warrantors under paragraph 2 in respect of the Liability for Taxation in question. |
8. | CORPORATION TAX RETURNS | |
8.1 | The Warrantors or their duly authorised agent prepare the corporation tax returns and computations of the Company for all accounting periods ended on or prior to the Accounts Date, to the extent that the same have not been prepared before Completion, and submit them to the Buyer. | |
8.2 | The Buyer shall procure that the returns and computations referred to in paragraph 8.1 shall be authorised, signed and submitted to the relevant Taxation Authority without amendment or with such amendments as the Buyer reasonably considers to be necessary and shall give the Warrantors or their agent all such assistance as may reasonably be required to agree those returns and computations with the relevant Taxation Authority provided that the Buyer shall not be obliged to take any such action as is mentioned in this paragraph 8.2 in relation to any return that is not full, true and accurate in all material respects. | |
8.3 | The Warrantors or their duly authorised agent shall prepare all documentation and shall have conduct of all matters (including correspondence) relating to the corporation tax returns and computations of the Company for all accounting periods ended on or prior to the Accounts Date provided that the Warrantors shall not without the prior written consent of the Buyer (not to be unreasonably withheld or delayed) transmit any communication (written or otherwise) to the relevant Taxation Authority or agree any matter with the relevant Taxation Authority. | |
8.4 | The Buyer shall procure that the Company afford such access to their books, accounts and records as is necessary and reasonable to enable the Warrantors or their duly authorised agent to prepare the corporation tax returns and computations of the Company for all accounting periods ended on or before the Accounts Date and conduct matters relating to them in accordance with this paragraph 8. | |
8.5 | The Warrantor shall take all reasonable steps to ensure that the corporation tax returns and computations of the Company for all accounting periods ended on or before the Accounts Date are prepared and agreed with the relevant Taxation Authority in a timely manner. | |
8.6 | For the avoidance of doubt: |
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(a) | where any matter relating to Tax gives rise to a Tax Claim, the provisions of paragraph 9 shall take precedence over the provisions of this paragraph 8; and | ||
(b) | the provisions of this paragraph 8 shall not prejudice the rights of the Buyer to make a Tax Claim under this Tax Covenant in respect of any Liability for Taxation. |
9. | CONDUCT OF TAX CLAIMS | |
9.1 | If the Buyer or the Company becomes aware of a Tax Claim, the Buyer shall give or procure that notice in writing is given to the Warrantors as soon as is reasonably practicable, provided that if the Warrantors receive any Tax Claim for whatever reason, they shall notify the Buyer in writing as soon as is reasonably practicable and the Buyer shall be deemed on receipt of such notification to have given the Warrantors notice of such Tax Claim in accordance with the provisions of this paragraph 9 provided always that the giving of such notice shall not be a condition precedent to the Warrantors liability under this Tax Covenant. | |
9.2 | Provided that the Warrantors indemnify the Buyer and the Company to the Buyers reasonable satisfaction against all liabilities, costs, damages or expenses which may be incurred thereby including any additional Liability for Taxation, the Buyer shall take and shall procure that the Company shall take such action as the Warrantors may reasonably request by notice in writing given to the Buyer or the Company to avoid, dispute, defend, resist, appeal or compromise any Tax Claim (such a Tax Claim where action is so requested being hereinafter referred to as a Dispute), provided that neither the Buyer nor the Company shall be obliged to appeal or procure an appeal against any assessment to Tax raised on any of them if, the Warrantors having been given written notice of the receipt of such assessment, the Buyer or the Company have not within 14 days of the date of the notice, received instructions in writing from the Warrantors to do so. | |
9.3 | If: |
(a) | the Warrantors do not request the Buyer or the Company to take any action under paragraph 9.2 or fails to indemnify the Buyer or the Company to the Buyers reasonable satisfaction within a period of time (commencing with the date of the notice given to the Warrantors) that is reasonable having regard to the nature of the Tax Claim and the existence of any time limit in relation to avoiding, disputing, defending, resisting, appealing or compromising such Tax Claim, and which period will not in any event exceed a period of 14 days; or | ||
(b) | the Warrantors (or the Company before Completion) have been involved in a case involving fraudulent conduct or wilful default in respect of the Liability for Taxation which is the subject matter of the Dispute; or | ||
(c) | the Dispute involves an appeal against a determination by the General or Special Commissioners of the VAT and Duties Tribunal, unless the Warrantors have obtained the opinion of Tax counsel of at least 5 years standing that there is a reasonable prospect that the appeal will succeed, the Buyer or the Company shall have the conduct of the Dispute absolutely (without prejudice to its rights under this Tax Covenant) and shall be free to pay or settle the Tax Claim on such terms as the Buyer or the Company may in its absolute discretion consider fit. |
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9.4 | Subject to paragraph 9.3, by agreement in writing between the Buyer and the Warrantors, the conduct of a Dispute may be delegated to the Warrantors upon such terms as may be agreed from time to time between the Buyer and the Warrantors, provided that, unless the Buyer and the Warrantors specifically agree otherwise in writing, the following terms shall be deemed to be incorporated into any such agreement: |
(a) | the Buyer or the Company shall promptly be kept fully informed of all matters pertaining to a Dispute and shall be entitled to see and keep copies of all correspondence and notes or other written records of telephone conversations or meetings and, in the event that there is no written record, shall be given an immediate report of all telephone conversations with any Taxation Authority to the extent that it relates to a Dispute; | ||
(b) | the appointment of solicitors or other professional advisers shall be subject to the approval of the Buyer, such approval not to be unreasonably withheld or delayed; | ||
(c) | all material written communications pertaining to the Dispute which are to be transmitted to the relevant Taxation Authority shall first be submitted to the Buyer or the Company for approval and shall only be finally transmitted if such approval is given, which approval is not to be unreasonably withheld or delayed; and | ||
(d) | the Warrantors shall make no settlement or compromise of the Dispute or agree any matter in the conduct of the Dispute which is likely to affect the amount thereof or the future liability to Tax of the Buyer or the Company without the prior approval of the Buyer or the Company (as may be appropriate), such approval not to be unreasonably withheld or delayed. |
64
have paid an additional amount, the Buyer shall pay to the Warrantors forthwith the amount of such tax credit, repayment or other benefit. | ||
10.2 | If the Buyer incurs a taxation liability which results from, or is calculated by reference to, any sum paid under this Tax Covenant, the amount so payable shall be increased by such amount as will ensure that, after payment of the taxation liability, the Buyer is left with a net sum equal to the sum it would have received had no such taxation liability arisen. | |
10.3 | If the Buyer would, but for the availability of a Buyers Relief, incur a taxation liability falling within paragraph 10.2, it shall be deemed for the purposes of that paragraph to have incurred and paid that liability | |
10.4 | If the Buyer assigns the benefit of this Tax Covenant or this agreement, the Warrantors shall not be liable pursuant to paragraph 10.1 or paragraph 10.2, save to the extent that the Warrantors would have been so liable had no such assignment occurred. | |
11. | COSTS AND EXPENSES | |
The covenant contained in paragraph 2 of this Tax Covenant shall extend to all costs and expenses incurred by the Buyer or the Company in connection with any matter included under paragraph 2 of this Tax Covenant and the enforcement of rights under this Tax Covenant. |
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1) | Sub-Licence Agreement dated December 26 2003 between Build-A-Bear Workshop, Inc (1) and Amsbra Ltd (2) re: trademarks owned by Sketchers USA, Inc.; | |
2) | Retail product licence between Amsbra Ltd and Sheffield Wednesday Football Club to sell Sheffield Wednesday football kit dated June 2005. |
Application | ||||
Mark | Number | Classes | ||
A BOOK STUFFED WITH
MEMBEARIES
|
PENDING | 16,28,41 | ||
A PAWSITIVELY FUN
FAMILY EXPERIENCE
|
PENDING | 28,35,41 | ||
AIR BATH DESIGN
|
PENDING | 35,41,42 | ||
ALL THE BUZZ THATS
BROUGHT TO BEAR
|
PENDING | 16 | ||
AUDIO SOUND STATIONS
DESIGN STORE FIXTURE
|
PENDING | 35,41,42 | ||
BEAR BUCKS
|
PENDING | 9,16 | ||
BEAR HEAD DESIGN
|
PENDING | 9,16,18,25,28,35,38,41,42 | ||
BEAR STUFF
|
PENDING | 28,35 | ||
BEAR STUFF CLEANER
|
PENDING | 3 | ||
BEARANTEE
|
PENDING | 28,35,41 | ||
BEARARMOIRE
|
PENDING | 16,28,35,41,42 | ||
BEARAMOIRE DESIGN
|
PENDING | 28,35,41 | ||
BEAREMY
|
PENDING | 28,35,41 | ||
BEAREMYS KENNEL PALS
|
PENDING | 28 | ||
BEARISM
|
PENDING | 16,28,35 | ||
BEARY FUN CLUBHOUSE
|
PENDING | 28,35,41 | ||
BEARY NEWSWORTHY
|
PENDING | 16,35,42 | ||
BEARYJANE
|
PENDING | 28,35,41 | ||
BUILD-A-BEAR WORKSHOP
|
PENDING | 6,9,14,16,18,20,21,24,25,28,35,39,41 | ||
BUILD-A-BEAR
WORKSHOP & DESIGN
|
PENDING | 9,14,18,25,36,41 | ||
BUILD-A-DOLL WORKSHOP
|
PENDING | 6,9,14,16,18,20,21,25,28,35,42 |
66
Application | ||||
Mark | Number | Classes | ||
BUILD-A-GRAM
|
PENDING | 28,39,41 | ||
BUILD-A-PARTY
|
PENDING | 28,35,41 | ||
BUTTON DESIGN
|
PENDING | 16,25,28,35,41,42 | ||
BUTTON WALL WITH
SPOOL DESIGN STORE
FIXTURE
|
PENDING | 16,35,41 | ||
BUY STUFF CLUB
|
PENDING | 16,35,41 | ||
CASH COUNTER DESIGN
|
PENDING | 35,41,42 | ||
CHOOSE ME HEAR ME
STUFF ME STITCH ME
FLUFF ME NAME ME
DRESS ME
TAKE ME HOME |
PENDING | 35,39 | ||
CLOTHES HANGER DESIGN
|
PENDING | 28 | ||
COLLECTIBEAR
|
PENDING | 28,35,41 | ||
COLLECTIBUNNY
|
PENDING | 28 | ||
CUBCASE
|
PENDIGN | 28 | ||
CUBCASE DESIGN
|
PENDING | 28,35,41 | ||
CUB CONDO
|
PENDING | 28 | ||
CUB CONDO DESIGN
|
PENDING | 16,35,41 | ||
FIND-A-BEAR
|
PENDING | 28,35,40,42 | ||
FLORA BEAR
|
PENDING | 28 | ||
FRIENDSHOP
|
PENDING | 25,28,35 | ||
FUN SHUI
|
PENDING | 16,28 | ||
FUR SHUI
|
PENDING | 16,28 | ||
HEART & PAWPRINT
DESIGN
|
PENDING | 28K,35,41 | ||
HIBERNITIES
|
PENDING | 3,24,25,28 | ||
LIL CUB
|
PENDING | 28 | ||
LOVE STUFF
HEADQUARTERS
|
PENDING | 28,35,41 | ||
MEMBEARIES
|
PENDING | 16,28,41 | ||
PAWLETTE COUFUR
|
PENDING | 16,28 | ||
PAWSIZER
|
PENDING | 28 | ||
SEWING COLUMN DESIGN
|
PENDING | 35,41 | ||
SHOE HANGER DESIGN
STORE FIXTURE
|
PENDING | 18,25,28 | ||
SHOE SOLE #1 DESIGN
|
PENDING | 28,35,41 | ||
SHOE SOLE #2 DESIGN
|
PENDING | 28,35,41 | ||
SHOE SOLE #3 DESIGN
|
PENDING | 28,35,41 | ||
SPOOL & TREE DESIGN
STORE FIXTURE
|
PENDING | 35,41,42 |
67
Application | ||||
Mark | Number | Classes | ||
SPOOL DESIGN STORE
FIXTURE
|
PENDING | 35,41 | ||
STITCHED WITH LOVE
|
PENDING | 25,28,35 | ||
TEDDY BEAR CENTENNIAL
|
PENDING | 25,28 | ||
TEDDYOLOGY
|
PENDING | 28,35,41 | ||
THE BEAR PROMISE
|
PENDING | 35,41,42 | ||
THE BEARY BEGINNING
|
PENDING | 16,28,41 | ||
TOY FURNITURE
CARRIER (Comfy Stuff
Carrier)
|
PENDING | 28,35 | ||
UNDIBEAR
|
PENDING | 3,25,28 | ||
UNITED FOR THE PAWS
|
PENDING | 28,35,36 | ||
WHERE BEST FRIENDS
ARE MADE
|
PENDING | 9,16,25,28,35,41 | ||
WHERE BEST FRIENDS
FIND COMFY STUFF
|
PENDING | 35 | ||
WHERE SPECIAL
MEMORIES ARE MADE
|
PENDING | 28,35,41 | ||
WORKSHOP
|
PENDING | 25,28,35 | ||
WORLDS BEAR FAIR
|
PENDING | 35,41,42 | ||
WORLDWIDE CUB CLUB
|
PENDING | 16,35,41 | ||
ZIPPER COLUMN DESIGN
STORE FIXTURE
|
PENDING | 35, 41 |
Application | ||||
Mark | Number | Classes | ||
BABW
|
1,709,013 | 28,35,41 | ||
BEARITAGE
|
1,724,301 | 28,35,41 | ||
BEARRIFIC
|
1,724,285 | 28 | ||
BUILD-A-BEAR WORKSHOP &
DESIGN
|
621,334 | 16,28,35,42 | ||
BUILD-A-BEAR WORKSHOP
WHERE BEST FRIENDS ARE
MADE & MEDALLION DES
|
1,010,834 |
6,9,14,16,18,20,21,
24,25,26,28,35,39,41,42 |
||
BUILD-A-SOUND
|
1,792,134 | 9,35,41 | ||
CUB CASH
|
2,086,783 | 16 | ||
CUB CONDO DESIGN
|
1,337,831 | 28,42 | ||
FLUFF AND STUFF
|
1,296,615 | 35,41,42 |
68
Application | ||||
Mark | Number | Classes | ||
HEART IN A BEAR TRADE
DRESS
|
1,399,229 | 28,35,41,42 | ||
HEAR STUFF & DESIGN
|
1,430,446 | 28,35,41 | ||
JELLI BEARS
|
1,719,533 | 28 | ||
LIL O CUB
|
1,719,673 | 28 | ||
MAKING FRIENDS THAT MAKE
A DIFFERENCE
|
2,094,431 | 25,28,35 | ||
OUR FOUNDING TEDDY
|
2,086,684 | 28 | ||
SCOOTFUR
|
2,181,964 | 28 | ||
STORE FRONT DESIGN
|
1,001,817 | 35,42 | ||
STUFFED WITH HUGS AND
GOOD WISHES
|
1,649,953 | 28 | ||
TRAVELLING TEDDY
|
1,328,699 | 28 |
Mark | Application Number | Classes | ||
BUILD-A-BEAR WORKSHOP WHERE BEST FRIENDS
ARE MADE & Medallion Design
|
2,253,128 | 28,35 |
1. | The Build-a-Bear Operating Manual including all marks and trade dress together with such other rights granted in the Build-a-bear Franchise Agreement. |
69
1. | 33 Fremlin Walk, Maidstone, Kent ME14 1QG. | |
2. | Ground Floor Premises at Unit 9 North Piazza, Covent Garden, London WC2. | |
3. | Shop Unit No. 69 Croydon Centrale Shopping Centre, Croydon Title Number SGL651624. | |
4. | Unit 229, The Chimes Shopping Centre, Uxbridge. | |
5. | Unit 19 Whitefriars, 7 Gravel Walk, Canterbury. | |
6. | Unit 17 Culver Precinct, Culver Street West and Head Street, Colchester, Essex. | |
7. | Unit 36 Halle Square, Manchester, Arndale. | |
8. | Office 21, St Stephens House and Grounds. | |
9. | Unit 103 Central Court, Wimbledon, London SW19. | |
10. | Unit 66B (21B Park Lane), The Meadowhall Centre, Sheffield. | |
11. | Unit 36, The Centre (also known as 131 Silbury Arcade), Centre Milton Keynes, Bucks Title Number BM297374. | |
12. | Unit 18, The Glades Shopping Centre, Bromley. |
70
Signed by
|
) | |||||
for and on behalf of
WITTINGTON
|
) | |||||
INVESTMENTS LIMITED
|
) | /s/ SWB | ||||
Steven Bedford as Attorney
|
||||||
|
||||||
Signed by
|
||||||
NSS TRUSTEES LIMITED AND
|
) | |||||
SIMON BENTLEY
for and on behalf of
|
) | |||||
REGENTS PARK ESTATES PENSION
|
) | /s/ SWB | ||||
SCHEME
|
||||||
Steven Bedford as Attorney
|
||||||
|
||||||
Signed by
|
) | |||||
MALCOLM DALGLEISH
|
) | /s/ SWB | ||||
Steven Bedford as Attorney
|
||||||
|
||||||
Signed by
|
) | |||||
for and on behalf of
GLOBAL PARTNERS
|
) | |||||
LIMITED
|
) | /s/ SWB | ||||
Steven Bedford as Attorney
|
||||||
|
||||||
Signed by
|
) | |||||
JUSTIN KENDRICK
|
) | /s/ SWB | ||||
Steven Bedford as Attorney
|
||||||
|
||||||
Signed by
|
) | |||||
CHRISTOPHER JOHN NEWLANDS SYKES
|
) | |||||
Steven Bedford as Attorney
|
) | /s/ SWB | ||||
|
||||||
Signed by
|
) | |||||
for and on behalf of
AERO SYSTEMS SA
|
) | |||||
Steven Bedford as Attorney
|
) | /s/SWB | ||||
|
||||||
Signed by
|
) | |||||
for and on behalf of
MERVILLE LIMITED
|
) | /s/ SWB | ||||
Steven Bedford as Attorney
|
||||||
|
||||||
Signed by
|
) | |||||
SUE BUCHAN
|
) | /s/ K. T. McKelvey | ||||
Kenneth McKelvey Under Power of Attorney for
|
71
Signed by
|
) | |||||
ANDREW MACKAY
|
) | /s/ SWB | ||||
Steven Bedford as Attorney
|
||||||
|
||||||
Signed by
|
) | |||||
for and on behalf of
BOLDSWITCH LIMITED
|
) | /s/ Graham Roberts | ||||
|
||||||
Signed by
|
) | |||||
STEVEN BEDFORD
|
) | /s/ SWB | ||||
|
||||||
Signed by
|
) | |||||
RUPERT ASHE
|
) | /s/ SWB | ||||
Steven Bedford as Attorney
|
||||||
|
||||||
Signed by
|
||||||
Kenneth McKelvey Under Power of Attorney
|
) | |||||
for and on behalf of
ANGUS SAMELS
|
) | /s/ K. T. McKelvey | ||||
|
||||||
Signed by
|
||||||
Kenneth McKelvey Under Power of Attorney
|
) | |||||
for and on behalf of
JOHN HOWARD SMITH
|
) | /s/ K. T. McKelvey | ||||
|
||||||
Signed by
|
||||||
Kenneth McKelvey Under Power of Attorney
|
) | |||||
for and on behalf of
KENNETH MCKELVEY
|
) | /s/ K. T. McKelvey . | ||||
|
||||||
Signed by
|
||||||
Kenneth McKelvey Under Power of Attorney
|
) | |||||
for and on behalf of
JONATHAN PUNTER
|
) | /s/ K. T. McKelvey | ||||
|
||||||
Signed by
|
||||||
Kenneth McKelvey Under Power of Attorney
|
) | |||||
DAVID CULE
|
) | /s/ K. T. McKelvey | ||||
|
||||||
Signed by
|
||||||
Kenneth McKelvey Under Power of Attorney
|
) | |||||
GARY JACKSON
|
) | /s/ K. T. McKelvey | ||||
|
||||||
Signed by
|
) | |||||
PAUL ROSENBLATT
|
) | /s/ SWB | ||||
Steven Bedford as Attorney
|
72
Signed by
|
) | |||||
PHILIP LEWIS
|
) | /s/ SWB | ||||
Steven Bedford as Attorney
|
||||||
|
||||||
Signed by
|
) | |||||
MICHAEL MITCHELL
|
) | /s/ SWB | ||||
Steven Bedford as Attorney
|
||||||
|
||||||
Signed by
|
) | |||||
for and on behalf of
BUILD-A-BEAR
|
) | |||||
WORKSHOP INC
|
) | /s/ Maxine Clark | ||||
|
||||||
Signed by
|
) | |||||
for and on behalf of
BUILD-A-BEAR
|
) | |||||
WORKSHOP UK HOLDINGS LIMITED
|
) | /s/ Maxine Clark |
73
Subsidiary:
Jurisdiction of Incorporation/Organization:
Missouri
Delaware
New Brunswick
Delaware
United Kingdom
1. | I have reviewed this annual report on Form 10-K of Build-A-Bear Workshop, Inc.; | ||
2. | Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||
4. | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
5. | The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors: |
Date: March 15, 2006
|
/s/ Maxine Clark | |||
|
|
|||
|
Chairman of the Board and Chief Executive Bear | |||
|
Build-A-Bear Workshop, Inc. | |||
|
(Principal Executive Officer) |
1. | I have reviewed this annual report on Form 10-K of Build-A-Bear Workshop, Inc.; | ||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||
4. | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
5. | The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors: |
Date: March 15, 2006
|
/s/ Tina Klocke | |||
|
|
|||
|
Chief Financial Bear, Treasurer and Secretary | |||
|
Build-A-Bear Workshop, Inc. | |||
|
(Principal Financial Officer) |
Date: March 15, 2006
|
/s/ Maxine Clark | |||
|
|
|||
|
Chairman of the Board and | |||
|
Chief Executive Bear | |||
|
Build-A-Bear Workshop, Inc. |
Date: March 15, 2006
|
/s/ Tina Klocke | |||
|
|
|||
|
Chief Financial Bear, Treasurer and Secretary | |||
|
Build-A-Bear Workshop, Inc. |