**Exhibit10.14**

 

**DATED      8February 2005**

** **

**(1)HIGHBURY HOUSE COMMUNICATIONS PLC**

 

**- and -**

 

**(2) ERGOSCIENCE CORPORATION**

 

**AGREEMENT**

relating tothe sale and purchase of the whole of theissued share capital of the companies set outin schedule 1

 

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**CONTENTS**

 
| 1. DEFINITIONS AND INTERPRETATION             |                                   |
|----------------------------------------------------|----------------------------------------|
|                                               |                                   |   |
| 2. SALE AND PURCHASE OF SHARES                |                                   |
|                                               |                                   |   |
| 3. CONDITION                                  |                                   |
|                                               |                                   |   |
| 4. EBITA                                      |                                   |
|                                               |                                   |   |
| 5. CONSIDERATION                              |                                   |
|                                               |                                   |   |
| 6. RETENTION                                  |                                   |
|                                               |                                   |   |
| 7. SIGNING AND COMPLETION                     |                                   |
|                                               |                                   |   |
| 8. WARRANTIES                                 |                                   |
|                                               |                                   |   |
| 9. LIMITATION ON THE VENDOR’S  LIABILITY |                                   |
|                                               |                                   |   |
| 10.                                                | COVENANTS                              |   |
|                                               |                                   |   |
| 11.                                                | INTERIM AND  TRANSITIONAL ARRANGEMENTS |   |
|                                               |                                   |   |
| 12.                                                | USE OF NAMES                           |   |
|                                               |                                   |   |
| 13.                                                | TAXATION                               |   |
|                                               |                                   |   |
| 14.                                                | PROPERTY MATTERS                       |   |
|                                               |                                   |   |
| 15.                                                | FURTHER ASSURANCE  AND ATTORNEY        |   |
|                                               |                                   |   |
| 16.                                                | ANNOUNCEMENTS                          |   |
|                                               |                                   |   |
| 17.                                                | COSTS                                  |   |
|                                               |                                   |   |
| 18.                                                | SUCCESSORS AND ASSIGNMENT              |   |
|                                               |                                   |   |
| 19.                                                | ENTIRE AGREEMENT                       |   |
|                                               |                                   |   |
| 20.                                                | CONFIDENTIALITY                        |   |
|                                               |                                   |   |
| 21.                                                | TIME FOR PERFORMANCE                   |   |
|                                               |                                   |   |
| 22.                                                | VARIATIONS                             |   |
|                                               |                                   |   |
| 23.                                                | WAIVER                                 |   |
|                                               |                                   |   |
| 24.                                                | AGREEMENT CONTINUES IN  FORCE          |   |
|                                               |                                   |   |
| 25.                                                | SEVERABILITY                           |   |
|                                               |                                   |   |
| 26.                                                | NOTICES                                |   |
|                                               |                                   |   |
| 27.                                                | COUNTERPARTS                           |   |

 

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| 28.        | THIRD PARTY RIGHTS              |   |
|------------|---------------------------------|--------|
|       |                            |   |
| 29.        | SERVICE OF PROCESS              |   |
|       |                            |   |
| 30.        | CAPACITY                        |   |
|       |                            |   |
| 31.        | GOVERNING LAW AND  JURISDICTION |   |
|       |                            |   |
| SCHEDULE 1 |                            |
|       |                            |   |
|       | Part 1                          |   |
|       |                            |   |
|       | The Companies                   |   |
|       |                            |   |
|       | Part 2                          |   |
|       |                            |   |
|       | The Subsidiaries                |   |
|       |                            |   |
| SCHEDULE 2 |                            |
|       |                            |   |
|       | The Warranties                  |   |
|       |                            |   |
|       | Part 1                          |   |
|       |                            |   |
|       | General                         |   |
|       |                            |   |
|       | Part 2                          |   |
|       |                            |   |
|       | Media House and Dunsfold  Park  |   |
|       |                            |   |
|       | Part 3                          |   |
|       |                            |   |
|       | Pensions                        |   |
|       |                            |   |
| SCHEDULE 3 |                            |
|       |                            |   |
|       | Taxation                        |   |
|       |                            |   |
|       | Part 1                          |   |
|       |                            |   |
|       | Definitions and  interpretation |   |
|       |                            |   |
|       | Part 2                          |   |
|       |                            |   |
|       | Tax Warranties                  |   |
|       |                            |   |
|       | Part 3                          |   |
|       |                            |   |
|       | Tax  Covenant                   |   |
|       |                            |   |
|       | Part 4                          |   |
|       |                            |   |
|       | Limitations and Procedure       |   |
|            |                                 |        |  |

 

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| SCHEDULE 4  |                                                        |
|-------------|-------------------------------------------------------------|
|        |                                                        |   |
|        | Part 1                                                      |   |
|        |                                                        |   |
|        | Signing                                                     |   |
|        |                                                        |   |
|        | Part 2                                                      |   |
|        |                                                        |   |
|        | Completion                                                  |   |
|        |                                                        |   |
| SCHEDULE 5  |                                                        |
|        |                                                        |   |
|        | Operation  of the Companies pending Completion              |   |
|        |                                                        |   |
| SCHEDULE 6  |                                                        |
|        |                                                        |   |
|        | The Properties                                              |   |
|        |                                                        |   |
|        | Part 1                                                      |   |
|        |                                                        |   |
|        | Details of the Properties                                   |   |
|        |                                                        |   |
|        | Part 2                                                      |   |
|        |                                                        |   |
|        | Title  Deeds and other documents of title to the Properties |   |
|        |                                                        |   |
| SCHEDULE 7  |                                                        |
|        |                                                        |   |
|        | Disclosed Schemes                                           |   |
|        |                                                        |   |
| SCHEDULE 8  |                                                        |
|        |                                                        |   |
|        | Working Capital Statements                                  |   |
|        |                                                        |   |
| SCHEDULE 9  |                                                        |
|        |                                                        |   |
|        | Limitations on  the Vendor’s liability                 |   |
|        |                                                        |   |
| SCHEDULE 10 |                                                        |
|        |                                                        |   |
|        | Registered  Business Intellectual Property                  |   |
|        |                                                        |   |
|        | Part 1                                                      |   |
|        |                                                        |   |
|        | Trade Marks                                                 |   |
|        |                                                        |   |
|        | Part 2                                                      |   |
|        |                                                        |   |
|        | Domain Names                                                |   |
|        |                                                        |   |
| SCHEDULE 11 |                                                        |
|        |                                                        |   |
|        | Magazine Titles                                             |   |
|        |                                                        |   |
| SCHEDULE 12 |                                                        |
|        |                                                        |   |
|        | Exhibitions                                                 |   |

 

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| SCHEDULE 13 |                      |
|-------------|---------------------------|
|        |                      |   |
| SCHEDULE 14 |                      |
|        |                      |   |
|        | Transitional Arrangements |   |
|        |                      |   |
| SCHEDULE 15 |                      |
|        |                      |   |
|        | Listed Software           |   |

 

**Agreed Form Documents**

 

1.                                       ManagementAccounts

2.                                       HighburyBrand Assignment

3.                                       Nexus& Columbus Brand Assignment

4.                                       IrrevocableLetter of Instruction

5.                                       Deedof Indemnity

6.                                       VendorDue Diligence Report

7.                                       CheamAgreement for Assignment

8.                                       JordanHouse Agreement for Assignment

 

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**THIS AGREEMENT**is made on 8 February 2005

 

**BETWEEN**

 

**(1)****                                HIGHBURYHOUSE****COMMUNICATIONS PLC** a company registeredin England and Wales with number 1398522 whose registered office is at JordanHouse, 47 Brunswick Place, London N1 6EB (**“Vendor”**); and

 

**(2)****                                 ERGOSCIENCE CORPORATION**a companyincorporated under the laws of the State of Delaware, United States of America,whose principal place of business is at 790 Turnpike Street, North Andover MA01845, United States of America****(**“Purchaser”**).

 

**BACKGROUND**

 

A                                      HighburyBusiness Communications Limited, Highbury Business Limited, Nexus MediaCommunications Limited, Highbury Columbus Travel Publishing Limited andHighbury-Harpers Limited (**“****Companies”**)are private companies limited by shares. Further information relating to the Companies and the Subsidiaries isset out in schedule 1.

 

B                                        TheVendor is the legal and beneficial owner or is otherwise able to procure thetransfer of the Shares.

 

C                                        TheVendor has agreed to sell or procure the sale of the Shares and the Purchaserhas agreed to purchase the Shares for the Consideration and upon the terms andconditions set out in this agreement.

 

**IT IS HEREBY AGREED:**

 

# **1.**                                       DEFINITIONS AND INTERPRETATION

 

## 1.1                                 Inthis agreement the following words and expressions shall (except where thecontext otherwise requires) have the following meanings:

##  

**“1985Act”** means the Companies Act 1985;

 

**“1989Act”** means the Companies Act 1989;

 

**“2004 EBITA”** means anamount equal to £185,880 (being the earnings before interest, tax andamortisation for the year ended 31 December 2004 for the Magazine Title **“European Communications”** agreed by theparties) plus the amount of the aggregate (without double counting) earningsbefore interest, taxation and amortisation of the Target Group for the 12 monthperiod ending 31 December 2004 as derived from the Statutory Accounts but afterexcluding the effect of the amount of any (i) write downs or impairment inrespect of any tangible or intangible assets, (ii) non-recurring items (iii)inter-company loan provisions, (iv) accrual for the forecast loss inrespect of the TESI Conference which is to be held in March 2005 and (v) anyexceptional costs;

 

**“Accounts”** means the audited accounts of each of the Companies and theSubsidiaries comprising (inter alia) the audited balance sheet as at theAccounts Date and the audited profit and loss account for the period ended onthe Accounts Date, the notes relating thereto and the reports of the directorsand auditors thereon;

 

**“AccountsDate”** means 31 December 2003;

 

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**“Anne Boleyn House Property”** has the meaning given in clause 14;

 

**“Approved”**means exemptapproved by the Board of the Inland Revenue for the purposes of either ChapterI or Chapter IV of Part XIV of the Taxes Act and **“Approval”** shall be construed accordingly;

 

**“Balancing Amount”** meansthe positive or negative amount (in £ sterling) resulting from deducting theNegative Adjustments (if any) from the Positive Adjustments (if any);

 

**“BB Motors Claim”** meansany claim brought or made by BB Motors against any Target Group member inconnection with the UDT Europe 2002 exhibition;

 

**“Borrowings”** means any borrowing, orindebtedness in the nature of borrowing including any bank overdrafts,liabilities under acceptances (otherwise than in respect of normal trade billsor credit incurred in the ordinary course of business), finance leases andacceptance credits but excluding any borrowing from any member of the Vendor’sGroup and any operating leases;

 

**“Business”** means collectively the business to business businesses relating toprinted and web-based magazines, data services and directories, exhibitions,conferences and award ceremonies as carried on by the Companies and theSubsidiaries at the date of this agreement and limited to the specificindustries and activities that such printed and web-based magazines, dataservices and directories, exhibitions, conferences and award ceremonies haverelated to in the past 12 months prior to the date of this agreement;

 

**“BusinessDay”** means a day other than a Saturday orSunday on which banks are open for commercial business in the City of Londonand in New York;

 

**“BusinessIntellectual Property”** means allIntellectual Property used exclusively by the Companies or the Subsidiaries inconnection with the Business;

 

**“BusinessNames”** means the Magazine Titles, the namesof the Companies and the Subsidiaries, the Domain Names, the Trade Marks andExhibitions;

 

**“CertifiedEBITA Statement”** means an EBITA Statement the accuracy of which has been confirmed inwriting by the Vendor’s Accountants or an Independent Accountant;

 

**“Circular”** means the circular to bedespatched by the Vendor, inter alia, to its shareholders in relation to theproposed acquisition by the Purchaser of the Companies pursuant to thisagreement;

 

**“Claim”** means any claim by the Purchaser for breach of or non compliancewith this agreement (including any Warranty Claim or Tax Claim);

 

**“Claim Notice”**means anotice in writing with respect to a Claim, setting out reasonable details ofsuch Claim and a genuine pre-estimate of the amount claimed;

 

**“CompaniesActs”** means the 1985 Act, the 1989 Act andthe Companies Consolidation (Consequential Provisions) Act 1985;

 

**“Completion”**means the performance of all the obligationsof the parties to this 

 

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agreement setout in clause 7.2 and schedule 4;

 

**“Completion Date”** means,unless the parties agree otherwise in writing, and subject to clause 3.2, 4.3and 7.3, the last Business Day of the month in which the last of the following occurs:

 

(i)                                     the expiry of three Business Days after the date of fulfilment ofthe Condition;

 

(ii)                                  the day falling 5 Business Days after the day on which the Vendordelivers to the Purchaser the Statutory Accounts and the EBITA Statement (or,if the Purchaser has so required, a Certified EBITA Statement); and

 

(iii)                               if a Termination Notice has been served pursuant to clause 8.8, theday falling three Business Days after the date on which such Termination Noticeis determined to be of no further effect under clause 8.10,

 

provided,however, that:

 

(a)                                  if the Completion Date would fall on 31 March or 30 June it shall bedeferred until 1 April and 1 July respectively; and

 

(b)                                 if there is an Outstanding Restriction on the date which wouldotherwise be the Completion Date, the Completion Date shall be the lastBusiness Day of the month in which such Outstanding Restriction falls away.

 

**“ComputerSystems”** means the computer hardware andsoftware and network infrastructure owned or used in connection with the Businessby the Companies and Subsidiaries (or any of them);

 

**“Condition”**means the passing at a generalmeeting of the Vendor (or at any adjournment thereof) of a resolution toapprove the disposal by the Vendor of the Shares on the terms of thisagreement;

 

**“ConfidentialInformation”** means information (howeverstored) exclusively relating to or connected with the Business, customers orfinancial or other affairs of the Companies or of the Subsidiaries details ofwhich are not in the public domain including, without limitation, informationexclusively concerning or relating to:

 

(a)                                  the Business Intellectual Property and any other property of theCompanies or the Subsidiaries in the nature of Intellectual Property;

 

(b)                                 any technical processes, future projects, business development orplanning, commercial relationships and negotiations;

 

(c)                                  the marketing of goods or services including, without limitation,customer, client and supplier lists, price lists, sales targets, salesstatistics, market share statistics, market research reports and surveys,advertising or other promotional materials, advertisers, circulation andsubscription lists and exhibitor, visitor and delegate lists; and

 

(d)                                 employee information and records.

 

**“ConfidentialityAgreement”**meansthe confidentiality agreement between the

 

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Purchaser and Highbury House Communications PLC dated the same date asthis agreement;

 

**“Consideration”** means the consideration for the Shares, as defined in clause 5;

 

**“Content Copyright”**meansthe copyright and database right in the content of the printed and web-basedmagazines and directories published under the Magazine Titles at the CompletionDate;

 

**“Deedof Indemnity”** means the deed of indemnity in the agreed form to be entered into on theCompletion Date between the Vendor and Highbury Business CommunicationsLimited;

 

**“DisclosedSchemes”** means the retirement benefitschemes details of which are set out in schedule 7;

 

**“DisclosureLetter”** means the letter of even date withthis agreement from the Vendor to the Purchaser relating to the Warrantiestogether with any documents annexed to it, delivered to and acknowledged by thePurchaser on the date of this agreement;

 

**“DomainNames”** means the domain names listed inpart 2 of schedule 10;

 

**“DraftCompletion Statement”**has the meaning given in schedule 8;

 

**“DunsfoldPark”**means the leasehold premises known as Building 17, Dunsfold Park, Cranleigh,Surrey comprised in a lease dated 22 November 2004 between(1) Dunsfold Park Limited and (2) The International Wine and SpiritCompetition Limited;

 

**“EBITAStatement”**has the meaning given in clause 4;

 

**“Employee”** means any director or employee of the Companies or the Subsidiariesor any of them;

 

**“Employment Legislation”** means legislation applyingin England and Wales affecting contractual or other relations between employersand their employees or workers, including but not limited to any legislationand any amendment, extension or re-enactment of such legislation and any claimarising under European treaty provisions or directives enforceable against anyTarget Group member by any Employee;

 

**“Encumbrance”** means a mortgage, charge, pledge, lien, option, restriction,equity, right to acquire, right of pre-emption, third party right or interest,other encumbrance or security interest of any kind or any other type ofpreferential arrangement (including, without limitation, a title transfer andretention arrangement) having similar effect;

 

**“Estimated Consideration”**means£11,459,000 less the Intercompany Balance, being the purchase price of£12,500,000 less the Intercompany Balance and the estimated working capitaladjustment;

 

**“Estimated Events Working Capital”** means the parties’ estimate of the Events Working Capital as at theCompletion Date, being negative £600,000 (negative six 

 

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hundredthousand pounds);

 

**“Estimated Publishing Working Capital”**means the parties’ estimate of the Publishing Working Capital as atthe Completion Date, being positive £441,000 (positive four hundred and fortyone thousand pounds);

 

**“Events Business”** meansthe business of organising and holding exhibitions, conferences and awardsceremonies carried on by the Target Group:

 

**“Events Working Capital”**means the Working Capital of the Target Group at the close of business on theCompletion Date, to the extent applicable to the Events Business as set out inthe Final Completion Statement;

 

**“Exchange Warranties”**means the Warranties set out at paragraphs 2 (*Accounts*),3 (*Management Accounts*), 4.1.3,4.2 (*Vendor Due Diligence Report*),5.2 and 5.9 (*Position since Accounts Date*),17.1, 17.2, 17.3, 17.4, 17.7 and 17.13 (*Employment)*and 18 (*Contracts*) ofPart 1 of Schedule 2 and paragraphs 3.3 and 3.4 of Part 3 (*Pensions*) of Schedule 2 (which are not tobe repeated at Completion)*;*

 

**“Excluded Warranties”**means the warranties set out in paragraphs 2, 3, 4, 5, 6, 9, 10, 11, 12, 21,22, 23, 24 and 25 of part 1 schedule 2;

 

**“Exhibitions”** means the events, conferences, awards ceremonies listed inschedule 12;

 

**“FairlyDisclosed”** means disclosed in such mannerand in such detail so as to enable a reasonable purchaser to make a fairassessment of the matter concerned;

 

**“Final Completion Statement”** means the Draft Completion Statement as agreed or determined inaccordance with schedule 8;

 

**“Forecasts”** means theforecast(s) set out in section 6 of the Vendor Due Diligence Report;

 

**“FutureExhibitions”** means those exhibitions to be held after the Completion Date;

 

**“FutureIssues”** means those issues of the MagazineTitles in respect of which the mailing dates fall after the Completion Date;

 

**“FSMA”** means Financial Services and Markets Act 2000;

 

**“HighburyBrand Assignment”** means the assignment between the Vendor and the Purchaser relating tothe cessation of use of the “Highbury” and “Highbury House” name in the agreedform;

 

**“Independent Accountant”**means an internationally-recognised accounting firm acceptable to both parties(other than Deloitte & Touche or PricewaterhouseCoopers), or if the partiesare unable to agree on such a firm, an internationally recognised accountingfirm to be selected by the President for the time being of the Institute ofChartered Accountants in England and Wales;

 

**“IndependentExpert”**means a Queen’s Counsel of at least five years standing agreed by the parties(or if they fail to agree within three Business Days of either party proposingany such person to be the Independent Expert an independent 

 

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Queen’s Counsel of at least five years standing appointed by thePresident of the Bar Council of England and Wales on the application of eitherparty);

 

**“IntellectualProperty”** includes registered designs,copyrights, trade secrets, know-how, data, database rights, design rights,rights affording equivalent protection to copyright, database rights and designrights, trade marks, service marks, logos, domain names, business names, tradenames, moral rights, and all registrations or applications to register any ofthe aforesaid items, rights in the nature of any of the aforesaid items in theUnited Kingdom and rights to sue for passing-off in each case for their fullterm and together with any renewals or extensions;

 

**“IntercompanyBalance”**meansthe aggregate amount of all indebtedness owed at Completion by any member ofthe Target Group to any member of the Vendor’s Group, less the aggregate amountof all indebtedness owed by any member of the Vendor’s Group to any member ofthe Target Group, as such amount shall be notified by the Vendor to thePurchaser no later than two Business Days before Completion and which amountshall be a positive number not exceeding £10,000,000;

 

**“Irrevocable Letter of Instruction”** means an irrevocable letter of instruction issued by the Vendor andthe Purchaser to the Vendor’s Solicitors and the Purchaser’s Solicitors inrespect of the Retention Account in substantially the same form as the agreedform having regard to the comments made prior to the date of this agreement bythe Purchaser’s Solicitors;

 

**“IT Support Agreements”**means the licences, systems supply agreements, data supply agreements,maintenance agreements, service or services agreement entered into by theCompanies and the Subsidiaries (or any of them) to procure support and servicesin relation to the Computer Systems;

 

**“ITEPA”** means Income Tax(Earnings and Pensions) Act 2003;

 

**“JordanHouse Property”** has the meaning given inclause 14;

 

**“Leases”**means theleases or licences under which any Property is occupied by the Companies;

 

**“Licence”** means any written licence, permission or consent in respect of anyBusiness Intellectual Property and any written arrangement of which anylicence, permission or consent forms part and which is material to theBusiness;

 

**“Listed Software”** meansthe licenses for the software and web tools listed in schedule 15;

 

**“ListingRules”** means the listing rules of the UKListing Authority for the time being in force;

 

**“LondonStock Exchange”**means London Stock Exchange plc;

 

**“Losses”** means any cost, claim, loss, liability, demand, damage or expenseof any nature;

 

**“MagazineTitles”** means the magazine titles anddirectories listed in schedule 11;

 

**“ManagementAccounts”** means the unaudited managementaccounts of the Target 

 

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Group inrespect of the Business for the nine month period from 1 January 2004 to30 September 2004 and for the 12 month period from 1 January 2004 to31 December 2004 in the agreed form;

 

**“MediaHouse”**means the freehold land and premises at Azalea Drive, Swanley, Kent BR8 8HY andalso garage 11 Edwards Gardens, Swanley as more particularly described in part1 of schedule 6;

 

**“Negative Adjustments”**means the aggregate of thefollowing amounts:

 

(a)                                  the amount, if any, (in £ sterling) by which the Events WorkingCapital is less than the Estimated Events Working Capital;

 

(b)                                 the amount, if any, (in £ sterling) by which the Publishing WorkingCapital is less than the EstimatedPublishing Working Capital;

 

**“Nexus& Columbus Brand Assignment”** means the assignment between a Target Groupmember and the Vendor relating to the cessation of use by the Vendor’s Group ofthe “Nexus” and “Columbus” names in the agreed form;

 

**“OfficialList”** means the official list of the UKListing Authority;

 

**“Order”**shall have themeaning given in clause 3.5;

 

**“Outstanding Restriction”**means an Order which has been granted and not been set aside or otherwisesatisfied;

 

**“PastIssues”**means those issues of the Magazine Titles which were despatched to the relevantprinters before the Completion Date;

 

**“PAYE”** means the mechanismprescribed by Tax Statutes (as defined in part 1 of schedule 3) for thecollection of tax, sums to which sections 203 to 203L of the Taxes Act andregulations made under such sections apply or to which Part 11 of the ITEPA andregulations made under section 684 of the ITEPA apply and Class 1, Class 1A andClass 1B contributions referred to in section 1(2) of the Social SecurityContributions and Benefits Act 1992;

 

**“Positive Adjustments”** meansthe amount, if any, (in £ sterling) by which the Events Working Capital exceedsthe Estimated Events Working Capital;

 

**“Pre-CompletionClaim Amounts”**means, in respect of Warranty Claims or any Specified Claims (includingbreaches which would arise on repetition of the Warranties (other than theExchange Warranties) on Completion) of which the Purchaser becomes aware beforeCompletion, the aggregate of any amounts which the Purchaser reasonably expectsto recover in respect of such Warranty Claims or Specified Claims (and, for theavoidance of doubt, taking account of the limitations on the Vendor’s liabilityset out in this agreement (and in particular schedule 9)) , (provided thatamounts which the Purchaser might reasonably expect to recover in relation toan individual Warranty Claim or Specified Claim shall, for these purposes, belimited to £750,000 unless such amounts are certified by an Independent Expertwith experience of pursuing claims of a similar nature to the Warranty Claimsor Specified Claims in question as being the amount that the Purchaser couldreasonably expect to recover in respect of such Warranty Claim) and alsoprovided that such Pre-Completion Claim Amounts shall have been notified by thePurchaser to the Vendor 

 

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as soon as reasonably practicable after the Purchaser becomes aware ofthe Warranty Claim or Specified Claims in question and, in any event, no laterthan two Business Days before Completion and provided that a Warranty Claim orSpecified Claim shall only be a Pre-Completion Claim to the extent that anamount has actually become due prior to Completion or the Purchaser wouldactually incur Losses upon Completion;

 

**“Properties”** means the freehold and leasehold land and premises described inschedule 6 and any part or parts thereof and **“Property”** means any of the Properties save where otherwisespecifically indicated;

 

**“Publishing Business”**means the Business other than the Events Business;

 

**“Publishing Working Capital”** means the Working Capital of the Target Group as at the close ofbusiness on the Completion Date, to the extent applicable to the PublishingBusiness as set out in the Final Completion Statement;

 

**“Purchaser’sGroup”** means the Purchaser, any parentundertaking from time to time of the Purchaser, any subsidiary undertaking fromtime to time of the Purchaser and any subsidiary undertaking from time to timeof any such parent undertaking, and includes, following Completion, for theavoidance of doubt, the Companies and the Subsidiaries and references to a **“member of the Purchaser’s Group”** shall be construedaccordingly;

 

**“Purchaser’sSolicitors”** means Penningtons of NewburyHouse, 20 Kings Road West, Newbury, Berkshire RG14 5XR;

 

**“Retained Confidential Information”** means information (however stored) exclusively relating to orconnected with the business, customers or financial or other affairs of theVendor’s Group (other than the Business) details of which are not in the publicdomain;

 

**“Retention Account”** means aninterest bearing account to be opened with National Westminster Bank plc (orsuch other bank as the parties may agree) in the joint names of the Vendor’sSolicitors and the Purchaser’s Solicitors and operated in accordance with theterms of this agreement.

 

**“ShareWarranties”** means the warranties on the partof the Vendor set out in schedule 2;

 

**“ShareWarranty Claim”** means any claim for breachof any of the Share Warranties;

 

**“Shareholders”**means theVendor, Columbus Holdings Limited and S. Stracker (Holdings) Limited;

 

**“Shares”** means the allotted and issued shares in the capital of theCompanies comprising the whole of the issued share capital of the Companiesfurther details of which are set out in part 1 of schedule 1;

 

**“Source Code”** means thesource code in the software developed by or on behalf of the Target Groupmembers and forming the Websites or any content management system that anyTarget Group member uses or requires for its Businesses;

 

**“Specified Claim”**meansany Claim under any of (i) the Tax Covenant; (ii) clauses 

 

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3.4, 5.3,8.14, 8.15, 8.17 or 14.2; and (iii) paragraph 34 of schedule 14;

 

**“SpecifiedIndividuals”** means Owen Davies, AnthonySalter, Hafeez Anjarwalla, Steve Hardiman, Anthony Greville and PeterKorniczky;

 

**“StatutoryAccounts”**has the meaning set out in clause 4.1;

 

**“StockExchange Rules”** means the rules of theLondon Stock Exchange for the time being in force;

 

**“Subscriber Lists”** meansthe list of customers who are parties to the Subscription Contracts;

 

**“SubscriptionContracts”** means the contracts between theCompanies and third parties and the Subsidiaries and third parties forsubscription to the Magazine Titles where there are obligations outstanding tosupply Future Issues;

 

**“Subsidiaries”**means The International Wine andSpirit Competition Limited, Highbury-Nexus Limited and Highbury Nexus MediaLimited further details of which are set out in part 2 of schedule 1;

 

**“TargetGroup”**meansthe Companies and the Subsidiaries and references to a **“member of the Target Group”** or a **“Target Group member”** shall be construedaccordingly;

 

**“TaxClaim”** means any claim under the TaxWarranties or the Tax Covenant;

 

**“TaxCovenant”** means any covenant, obligation orother undertaking of the Vendor set out in part 3 of schedule 3;

 

**“TaxWarranties”** means the warranties on the partof the Vendor in relation to taxation set out in part 2 of schedule 3;

 

**“TaxesAct”** means the Income and Corporation TaxesAct 1988;

 

**“TCGA”** means the Taxation of Chargeable Gains Act 1992;

 

**“TradeMarks”** mean the registered trade markslisted in part 1 of schedule 10;

 

**“UKListing Authority”** means the FinancialServices Authority acting in its capacity as the competent authority for thepurposes of Part VI of the FSMA, including where the context so permits, anycommittee, employee, officer or servant to whom any function of the UK ListingAuthority may for the time being be delegated;

 

**“US Escrow Account”** meansthe accounts of Voyageur Asset Management (MA) Inc in the names of Ergo ScienceDevelopment Corporation and Ergo Research Corporation which are the subject ofthe US Escrow Letter;

 

**“US Escrow Letter”** meansthe letter of even date herewith made between Voyageur Asset Management (MA)Inc., Ergo Science Development Corporation, Ergo Research Corporation, theVendor and the Purchaser;

 

**“US GAAP Accounts”** meansthe accounts for the Target Group required to be filed 

 

9

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by thePurchaser with the Securities Exchange Commission in relation to theacquisition contemplated by this agreement;

 

**“VAT”** means value added tax;

 

**“Vendor’sAccountants”** means Deloitte & Touche of180 The Strand, London WC2R 1BL;

 

**“Vendor Due Diligence Report”** means the report in the agreed form dated 9 December 2004 entitled “ProjectBach Final Draft Vendor Due Diligence Report” prepared by the Vendor’sAccountants;

 

**“Vendor’sGroup”** means the Vendor, any parentundertaking from time to time of the Vendor, any subsidiary undertaking fromtime to time of the Vendor and any subsidiary undertaking from time to time ofany such parent undertaking, other than any member of the Target Group, and,save where specifically stated to the contrary in clause 10.8, referencesto “**member ofthe Vendor’s Group**” shall beconstrued accordingly;

 

**“Vendor’sSolicitors”** means DLA Piper Rudnick GrayCary UK LLP of 3 Noble Street, London EC2V 7EE;

 

**“Warranties”** means the Share Warranties and the Tax Warranties;

 

**“Warranty Claim”** means anyclaim for any breach of any of the Warranties.

 

**“Website”** means thedigital content available on the world wide web and known under the relevantDomain Names;

 

**“Working Capital”** has themeaning given in schedule 8; and

 

## 1.2                                 Inthis agreement where the context admits:

##  

### 1.2.1                        save in relation to schedule 3, words and phrases which are definedor referred to in or for the purposes of the Companies Acts have the samemeanings in this agreement (unless otherwise expressly defined in thisagreement);

###  

### 1.2.2                        sections 5, 6, 8 and 9 of and schedule 1 to the Interpretation Act1978 apply in the same way as they do to statutes;

###  

### 1.2.3                        reference to a statutory provision includes reference to:

###  

#### 1.2.3.1                  any order, regulation, statutory instrument or other subsidiarylegislation at any time made under it for the time being in force (whenevermade);

####  

#### 1.2.3.2               anymodification, amendment, consolidation, re-enactment or replacement of it orprovision which is a modification, amendment, consolidation, re-enactment orreplacement of it except to the extent that any modification, amendment,consolidation, re-enactment or replacement made after the date of thisagreement would increase the liability of any of the parties hereto;

 

10

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### 1.2.4                        reference to a clause, schedule or paragraph is to a clause,schedule or a paragraph of a schedule of or to this agreement respectively;

###  

### 1.2.5                        reference to the parties to this agreement includes their respectivesuccessors, permitted assigns and personal representatives;

###  

### 1.2.6                        reference to any party to this agreement comprising more than oneperson includes each person constituting that party;

###  

### 1.2.7                        reference to any gender includes the other genders;

###  

### 1.2.8                        reference to any professional firm or company includes any firm orcompany effectively succeeding to the whole, or substantially the whole, of itspractice or business;

###  

### 1.2.9                        the index, headings and any descriptive notes are for ease ofreference only and shall not affect the construction or interpretation of thisagreement;

###  

### 1.2.10                  this agreement incorporates the schedules to it;

###  

### 1.2.11                  where any statement is qualified by the expression “**so far as the Vendor is aware**” or anysimilar expression the Vendor shall be deemed to have knowledge of anything ofwhich it would have had knowledge had it made careful enquiries of theSpecified Individuals;

###  

### 1.2.12                  any reference to “**including**”or “**in particular**” or any similarexpression shall be construed without limitation; and

###  

### 1.2.13                  the “**agreed form**” inrelation to any document means the form agreed between the parties to thisagreement prior to the date hereof and, for the purposes of identificationonly, initialled by or on behalf of the parties.

###  

# **2.**                                      SALE AND PURCHASE OF SHARES

# ** **

The Vendorshall as legal and beneficial owner sell to the Purchaser, or procure thetransfer to the Purchaser of the legal and beneficial ownership in, the Shares,and the Purchaser shall purchase the Shares, free from all Encumbrances andtogether with all rights of any nature which are now or which may at any timebecome attached to them or accrue in respect of them including all dividendsand distributions declared paid or made in respect of them on or afterCompletion.

 

# **3.**                                      CONDITION

# ** **

## 3.1                                 Completionis conditional on the satisfaction or waiver (by the Purchaser and the Vendor)of the Condition.

##  

## 3.2                                 Ifthe Condition has not been fulfilled or waived by midnight on 1 May 2005 or ifCompletion has not occurred by midnight on 31 August 2005 or, in either case,such later date as may be agreed in writing by the parties, either the Vendoror the Purchaser may terminate this agreement by notice in writing to theother.  Upon such termination, none ofthe parties shall have any further rights or obligations under this agreementother than any accrued rights at that time except in respect of the provisionsof clauses 1, 3.4, 16, 17, 18, 19, 20, 22, 23 and 25 to 31 inclusive which willcontinue in full force and effect.

 

11

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## 3.3                                 The Vendor shall as soon as reasonably practicableand in any event by 15 April 2005 despatch to its shareholders the Circular(and any resolution to be put to the shareholders of the Vendor to approve thisagreement shall not be combined with any resolution to approve any other matteror transaction), and shall notify the Purchaser as soon as practicable after itbecomes aware that the Condition is satisfied or has become or is likely tobecome incapable of being satisfied.

##  

## 3.4                                 Ifthis agreement is terminated because the Condition has not been fulfilled orwaived by 1 May 2005 then no later than five Business Days following suchtermination, the Vendor shall (i) provide written instruction to Voyageur AssetManagement (MA) Inc releasing it from its obligations under, and terminating,the US Escrow Letter and (ii) pay to the Purchaser the amount of £275,000 (twohundred and seventy-five thousand pounds), together with any properly incurredcosts of any accountants instructed or engaged by the Purchaser incurred up tothe date of such termination in connection with the preparation of the US GAAPAccounts.  The parties agree that suchamount represents a genuine and reasonable pre-estimate of the losses(including with respect to legal fees) that will be incurred by the Purchaseras a result of such termination.

##  

## 3.5                                 Inthe event of any person seeking an order (**“Order”**)which may prevent completion of the sale and purchase of the Shares pursuant tothis agreement, the Purchaser agrees to use all reasonable endeavours to opposeand/or have set aside such Order and shall keep the Vendor informed of theprogress of any proceedings in relation thereto and the likelihood of thePurchaser succeeding and the Purchaser shall, if required, use all reasonableendeavours to seek the approval of its shareholders to the transactioncontemplated by this agreement unless, it is not reasonably practicable to doso due to legal or regulatory requirements.

##  

# **4.**                                      EBITA

# ** **

## 4.1                                 Betweenthe date of this agreement and Completion, the Vendor shall as soon asreasonably practicable prepare and deliver to the Purchaser:

##  

### 4.1.1                        audited statutory accounts for each of the Companies andSubsidiaries for the year ending 31 December 2004 (together the **“Statutory Accounts”**); and

###  

### 4.1.2                        a statement of the 2004 EBITA (the **“EBITAStatement”**).

###  

## 4.2                                 TheStatutory Accounts shall be prepared on a basis consistent with the Accountsusing the same accounting principles, policies and practices, and in accordancewith the law and applicable standards, principles and practices generallyaccepted in the United Kingdom.

##  

## 4.3                                 ThePurchaser may, by notice in writing to the Vendor given at any time withinthree Business Days after delivery by the Vendor to the Purchaser of the EBITAStatement or, (if requested by the Purchaser pursuant to clause 4.4) aCertified EBITA Statement, terminate this agreement if the 2004 EBITA as setout in the EBITA Statement or the Certified EBITA Statement as the case may beis less than £923,000.  In the event ofany such termination, none of the parties shall have any further rights orobligations under this agreement other than any accrued rights at that timeexcept in respect of the provisions of clauses 1, 3.4, 16, 17, 18, 19, 20, 22,23 and 25 to 31 inclusive which will continue in full force and effect.  Promptly following such termination, theVendor will provide written instructions to Voyageur Asset 

 

12

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## Management (MA) Inc.releasing it from its obligations under, and terminating, the US Escrow Letter.

##  

## 4.4                                 Withintwo Business Days of the receipt of the Statutory Accounts and EBITA Statementthe Purchaser may, if the EBITA Statement is not a Certified EBITA Statement,require that the Vendor deliver a Certified EBITA Statement.

##  

# **5.**                                      CONSIDERATION

# ** **

## 5.1                                 Theconsideration payable by the Purchaser for the Shares shall be £12,500,000(twelve million five hundred thousand pounds), less the Intercompany Balanceand subject to the adjustments set forth in clause 5.3 (such consideration, asso adjusted, being referred to as the **“Consideration”**).

##  

## 5.2                                 AtCompletion, the Purchaser shall pay the Estimated Consideration as follows:

##  

### 5.2.1                        to the Vendor’s Solicitors, £10,709,000 (ten million seven hundredand nine thousand pounds), less:

###  

#### 5.2.1.1               anamount equal to the Intercompany Balance; and

####  

#### 5.2.1.2               anyPre Completion Claim Amounts; and

####  

### 5.2.2                        into the Retention Account, £750,000 (seven hundred and fiftythousand pounds), plus any Pre Completion Claim Amounts.

###  

## 5.3                                 FollowingCompletion, the parties shall comply with the provisions of schedule 8 withrespect to the matters referred to therein. On the day falling 10 Business Days after agreement or determination ofthe Final Completion Statement (**“Payment Date”**):

##  

### 5.3.1                        if the Balancing Amount is a positive amount, the Purchaser shallpay to the Vendor an amount equal to the Balancing Amount plus interestcalculated from the Completion Date until the Payment Date at one per centbelow the base rate of Barclays Bank PLC; and

###  

### 5.3.2                        if the Balancing Amount is a negative amount, the Vendor shall pay tothe Purchaser an amount equal to the Balancing Amount plus interest calculatedfrom the Completion Date until the Payment Date at one per cent below the baserate of Barclays Bank PLC,

###  

(the Estimated Consideration, as increasedby the positive amount or reduced by the negative amount of any BalancingAmount, shall be referred to as the **“FinalConsideration”**).

 

## 5.4                                 Ifa party fails to pay any sum due by it under this clause on the due date forpayment in accordance with the provisions of this agreement, the party shallpay interest on the amount payable from the due date until the date on whichthe party’s obligation to pay the sum is discharged at 2 per cent aboveBarclays Bank base rate (whether before or after judgment).  Interest accrues and is payable from day today.

##  

## 5.5                                 Theparties shall comply with the provisions of schedule 8 with respect to thematters contained in that schedule.

 

13

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## 5.6                                 Ifany Pre-Completion Claim Amounts are paid into the Retention Account by thePurchaser pursuant to clause 5.2, the parties shall use all reasonableendeavours to resolve the Claim or Claims to which such Pre-Completion ClaimAmounts relate as soon as reasonably practicable after Completion.

##  

# **6.**                                      RETENTION

# ** **

## 6.1                                 Onceany Warranty Claim or Specified Claim has been settled the Purchaser and theVendor shall, on the Business Day following such settlement, instruct thePurchaser’s Solicitors and the Vendor’s Solicitors to pay to the Purchaser fromthe Retention Account an amount equal to any sum due to the Purchaser from theVendor in respect of the settled Warranty Claim or Specified Claim (**“Principal”**) together with any interestaccrued on the Retention Account in respect of such Principal and the Vendor’sobligation to the Purchaser in respect of the settled Warranty Claim orSpecified Claim shall be reduced by an amount equal to such Principal.

##  

## 6.2                                 If,by the first Business Day falling six calendar months after the Completion Date(**“Release Date”**), the Purchasershall not have served a Claim Notice in respect of any Warranty Claim orSpecified Claim or if all such Warranty Claims or Specified Claim which are thesubject of any Claim Notices which have been served have been settled and anysums due to the Purchaser in respect of such Warranty Claims or SpecifiedClaims have been paid to the Purchaser pursuant to clause 6.1 above, thePurchaser and the Vendor shall, on the Release Date, instruct the Purchaser’sSolicitors and the Vendor’s Solicitors to pay to the Vendor’s Solicitors fromthe Retention Account the balance of any amounts (including interest) remainingin the Retention Account.

##  

## 6.3                                 Ifthere are Warranty Claims or Specified Claims outstanding which have not beensettled by the Release Date (**“OutstandingClaims”**), the Purchaser and the Vendor shall instruct the Purchaser’sSolicitors and the Vendor’s Solicitors to pay to the Vendor’s Solicitors fromthe Retention Account an amount equal to the balance of any amounts (includinginterest) remaining in the Retention Account less an amount equal to:

##  

### 6.3.1                        an amount agreed by the Vendor and Purchaser (or failing suchagreement as determined by an Independent Expert) as being a reasonableestimate of the Vendor’s liability in respect of such Outstanding Claims; and

###  

### 6.3.2                        interest earned in the Retention Account in respect of the sumreferred to in 6.3.1 above.

###  

## 6.4                                 Immediatelyfollowing the settlement of any Outstanding Claims (and following any paymentsto the Purchaser’s Solicitors due upon settlement of such Outstanding Claimspursuant to clause 6.1 above) the Vendor and the Purchaser shall instruct thePurchaser’s Solicitors and the Vendor’s Solicitors to pay to the Vendor’sSolicitors from the Retention Account an amount equal to the balance of anyamounts (including interest) remaining in the Retention Account less an amountequal to:

##  

### 6.4.1                        an amount agreed by the Vendor and Purchaser (or failing suchagreement as determined by an Independent Expert) as being a reasonableestimate of the Vendor’s liability in respect of any other Outstanding Claims;and

###  

### 6.4.2                        any interest earned on the amount referred to in 6.4.1 above.

 

14

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## 6.5                                 AWarranty Claim or Specified Claim shall be treated as settled for the purposesof this clause 6 if:

##  

### 6.5.1                        the Vendor and the Purchaser shall so agree in writing, such writtenagreement not to be unreasonably withheld or delayed following any oralagreement; or

###  

### 6.5.2                        a court of competent jurisdiction has awarded judgment in respect ofthe claim and no right of appeal lies in respect of such judgment or theparties are debarred by passage of time or otherwise from making an appeal.

###  

## 6.6                                 Savewhere expressly stated to the contrary nothing in this clause 6 shall prejudiceor limit the right of the Purchaser to make any claim against the Vendor eitherunder this agreement or under any of the documents executed pursuant to thisagreement.

##  

## 6.7                                 Apayment to be made under this clause 6 shall be made by telegraphic transfer toan account notified by the party due to receive the payment to the other partynot later than two Business Days before the due date of the payment.

##  

# **7.**                                      SIGNING AND COMPLETION

# ** **

## 7.1                                 Thesigning of this agreement shall take place at the offices of the Vendor’sSolicitors when each of the parties shall comply with the provisions of part 1of schedule 4.

##  

## 7.2                                 Subjectto clause 7.3, Completion shall take place at the offices of the Vendor’sSolicitors on the Completion Date when each of the parties shall comply withthe provisions of part 2 of schedule 4.

##  

## 7.3                                 Notwithstandingany other provision of this agreement, the Purchaser shall not be obliged tocomplete the purchase of any of the Shares unless:

##  

### 7.3.1                        the purchase of all of the Shares is completed simultaneously; and

###  

### 7.3.2                        the Vendor shall have delivered to the Purchaser the StatutoryAccounts and the EBITA Statement (or, if required by the Purchaser, a CertifiedEBITA Statement) not less than five Business Days prior to the Completion Date.

###  

# **8.**                                      WARRANTIES

# ** **

## 8.1                                 TheVendor warrants to the Purchaser at the date of this agreement that each of theWarranties is true and accurate.  TheWarranties (other than the Exchange Warranties) shall be repeated by the Vendorimmediately prior to Completion by reference to the facts and circumstancesexisting at that time.

##  

## 8.2                                 Eachof the Warranties shall be construed as a separate and independent warranty and(except where this agreement provides otherwise) shall not be limited orrestricted by reference to or inference from any other term of this agreementor any other Warranty.

##  

## 8.3                                 ThePurchaser acknowledges and agrees that:

##  

### 8.3.1                        the only Warranties (other than the Excluded Warranties) being givenin relation to the Properties are those set out in part 2 of schedule 2, andthen only insofar as they relate to Media House and Dunsfold Park and that no 

 

15

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### Claim can be made under any otherWarranties (other than the Excluded Warranties) in relation to matters whichrelate to the Properties;

###  

### 8.3.2                        the only Warranties (other than the Excluded Warranties) being givenin relation to pensions are those set out in part 3 of schedule 2 and that noClaim can be made under any other Warranties (other than Excluded Warranties)in relation to matters which relate to the Disclosed Schemes;

###  

### 8.3.3                        the only Warranties (other than the Excluded Warranties) being givenin relation to Confidential Information, Intellectual Property, ComputerSystems, the IT Support Agreements and data protection are those set out inparagraphs 13, 14, 15 and 16 respectively of part 1 of schedule 2 and no Claimcan be made under any other of the Warranties (other than Excluded Warranties)in relation to matters which are issues of Confidential Information,Intellectual Property, the IT Support Agreements, Computer Systems or dataprotection.

###  

## 8.4                                 Therights and remedies of the Purchaser in respect of any breach of any of theWarranties shall survive Completion.

##  

## 8.5                                 TheVendor waives and may not enforce any right which it may have in respect of anymisrepresentation, inaccuracy or omission in or from any information or advicesupplied or given by the Companies, the Subsidiaries or their respectiveofficers or employees in enabling the Vendor to give the Warranties or toprepare the Disclosure Letter save in the case of the fraud or wilfulconcealment of any officer or employee.

##  

## 8.6                                 Betweenthe execution of this agreement and Completion the Vendor agrees that it willprocure that the Companies and the Subsidiaries comply with the provisions ofschedule 5.

##  

## 8.7                                 TheWarranties shall be qualified by such information as is Fairly Disclosed in theDisclosure Letter.

##  

## 8.8                                 Ifbetween the date of this agreement and Completion the Purchaser becomes awareof any matter or matters which entitle the Purchaser (or which would entitlethe Purchaser upon repetition of the Warranties (other than the ExchangeWarranties)) pursuant to clause 8.1, to make one or more Warranty Claims (otherthan a Warranty Claim for breach of the warranty set out at paragraph 3 of Part1 of Schedule 2) (whether such claim or claims are actual or based upon acontingent liability) (alone or in conjunction with other such Warranty Claims)in circumstances where an Independent Expert with experience in advising inrelation to claims of a similar nature to the Warranty Claims in question hasdelivered an opinion in writing (**“Opinion”**)that the Purchaser could reasonably expect to recover not less than £2,500,000in respect of such Warranty Claims (taking into account limitations on theliability on the Vendor set out in this agreement including those set out inschedule 9), the Purchaser shall be entitled to serve notice (**“Termination Notice”**) in writing to theVendor setting out reasonable details of the Warranty Claim(s) in question andattaching the Opinion.

##  

## 8.9                                 Ifthe Purchaser serves a Termination Notice, the Vendor shall (unless the Vendoragrees with the Purchaser that such matter or matters are not capable ofremedy) have a period of 10 Business Days from receipt of the TerminationNotice to remedy such breach or breaches of Warranty.

 

16

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## 8.10                           If theVendor (at its expense) remedies the breach or breaches by no later than thetenth Business Day from the date of receipt of the Termination Notice, theTermination Notice shall be of no further effect in respect of such breach orbreaches and the Purchaser shall not be entitled to terminate this agreementpursuant to such Termination Notice.

##  

## 8.11                           If theVendor fails to remedy the breach (at its expense) this agreement shall bedeemed to have terminated 10 Business Days from the date when the TerminationNotice was received by the Vendor.  Inthe event of any such termination, none of the parties shall have any furtherrights or obligations under this agreement other than any accrued rights(excluding any rights to bring Warranty Claims) at that time except in respectof the provisions of clauses 1, 3.4, 16, 17, 18, 19, 20, 22, 23 and 25 to 31inclusive which will continue in full force and effect.  Promptly following such termination, theVendor will provide written instructions to Voyageur Asset Management (MA) Inc.releasing it from its obligations under, and terminating, the US Escrow Letter.

##  

## 8.12                           If,notwithstanding that the Purchaser is aware of a matter or matters whichentitle it to terminate this agreement pursuant to clause 8.8, Completionoccurs, the Purchaser shall not be deemed, by so doing, to have waived anyWarranty Claim or other Claim which it might have against the Vendor in respectof the matter or matters concerned.

##  

## 8.13                           TheVendor and Purchaser shall notify each other in writing of anything which maygive rise to a right to terminate pursuant to clauses 8.8 as soon as reasonablypossible after it comes to the notice of either party at any time between thedate of this agreement and the Completion Date.

##  

## 8.14                           TheVendor shall indemnify, defend and hold harmless the Purchaser and each memberof the Target Group in relation to any Losses incurred by any of them in relationto the BB Motors Claim provided, for the avoidance of doubt, that paragraph 6of schedule 9 shall apply to the BB Motors Claim.

##  

## 8.15                           In theevent that any Target Group Member has any Borrowings the Vendor shall pay tothe Purchaser an amount equal to such Borrowings within 10 Business Days of itbeing established to both parties’ satisfaction each acting reasonably that anysuch Target Group member has any Borrowings.

##  

## 8.16                           Subjectto repayment in full of the Intercompany Balance at Completion, the Vendor (foritself and as agent for the other members of the Vendor’s Group) irrevocablyand unconditionally waives with effect from Completion any rights or claimsagainst any member of the Target Group outstanding at the Completion Date.

##  

## 8.17                           TheVendor will reimburse to the Purchaser the amount of any further considerationpayable by the Purchaser or any Target Group member pursuant to and inaccordance with clause 3 of the agreement dated 19 September 2001 betweenHighbury Business Communications Limited and DMG World Media (UK) Limited, suchamount to be paid within 14 Business Days of being notified of the amountagreed or determined in accordance with that clause 3.

 

17

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# ** **

# **9.**             LIMITATION ONTHE VENDOR’S LIABILITY

# ** **

Notwithstandingany other provisions in this agreement (other than clause 30.2), the liabilityof the Vendor hereunder shall be limited in accordance with the provisions of schedule 9.

 

# **10.**          COVENANTS

# ** **

## 10.1         The Vendor undertakes to and covenantswith the Purchaser that (except with the consent in writing of the Purchaser)neither it nor any other member of the Vendor’s Group will at any time afterCompletion:

##  

### 10.1.1      use or procure or cause or (so far as itis able) permit the use of any name or names identical or similar to theMagazine Titles or the Exhibitions or the Domain Names or the Business Names orany colourable imitation thereof in connection with any activity whatsoeverwhich competes directly or indirectly with the Business;

###  

### 10.1.2      (except as required by law or anyregulation) disclose or divulge to any person (other than to officers oremployees of the Purchaser whose province it is to know the same) or use(otherwise than for the benefit of the Purchaser) any Confidential Information.

###  

## 10.2         The Vendor undertakes to and covenantswith the Purchaser that neither it nor any other member of the Vendor’s Groupwill for a period of two years after the date of this agreement, either on itsown behalf or jointly with or as agent for any other person, directly orindirectly:

##  

### 10.2.1      launch, publish, manage or organise anymagazine or event which is directly in competition with any of the MagazineTitles or the Exhibitions for so long as the same shall continue to bepublished or held by any of the Companies or the Subsidiaries;

###  

### 10.2.2      approach, canvass, solicit, engage oremploy or otherwise endeavour to entice away any person who at the CompletionDate or at any time during the period of six months preceding the CompletionDate shall be or shall have been an employee, officer, manager, of any of theCompanies or the Subsidiaries.

###  

### 10.2.3      approach, canvass, solicit, engage oremploy or otherwise endeavour to entice away any person who at the CompletionDate or at any time during the period of six months preceding the CompletionDate shall be or shall have been a consultant sub-contractor or agent of any ofthe Companies or the Subsidiaries with a view to the specific knowledge orskills of such person being used by or for the benefit of any person carryingon business in competition with the business carried on by any of the Companiesor the Subsidiaries.

###  

## 10.3         Each of the covenants contained inclauses 10.1 and 10.2 shall constitute an entirely separate and independentrestriction on the Vendor.

##  

## 10.4         Nothing in clause 10.2.1 shall prohibitthe Vendor or any other member of the Vendor’s Group from:

##  

### 10.4.1      continuing to be engaged in thepublishing of CNN Traveller; or

 

18

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### 10.4.2      publishing, managing or organising anymagazine or event acquired (whether by way of a share or asset purchase) fromany third party after the date hereof as part of a larger acquisition unlesssuch magazines and events so acquired shall represent in aggregate more than 30per cent of the turnover of the business or businesses so acquired in whichevent the Vendor shall or shall procure that such other member of the Vendor’sGroup shall within six months of the completion of such acquisition divestitself of such magazine or event failing which it must, unless the Purchaserotherwise agrees, cease the publication, management or organisation thereof forthe duration of the relevant covenants.

###  

## 10.5         Nothing in clause 10.2.1 shall prohibitthe Vendor or any other member of the Vendor’s Group from holding shares orstock quoted or dealt in on a recognised investment exchange (as defined in theFSMA) so long as not more than five per cent of the issued shares or stock ofany class of any one company is so held.

##  

## 10.6         Nothing in this clause 10 shall preventthe Vendor or any other member of the Vendor’s Group from:

##  

### 10.6.1      employing any person whose employmentwith the Companies or the Subsidiaries is terminated, in each case, afterCompletion; or

###  

### 10.6.2      advertising generally for staff oremploying any person who has responded to any such general advertisement; or

###  

### 10.6.3      approaching, canvassing, soliciting orengaging the services of freelance contributors unless by so engaging theirservices such persons are thereby prevented from continuing to offer theirservices to those of the Companies and/or the Subsidiaries by which they havebeen so engaged prior to the date hereof.

###  

## 10.7         The Vendor agrees and acknowledges thatthe restrictions contained in this clause 10 are fair and reasonable andnecessary to assure to the Purchaser the full value and benefit of the Sharesand to protect the goodwill of the Companies and the Subsidiaries but, in theevent that any such restriction shall be found to be void or unenforceable butwould be valid and effective if some part or parts thereof were deleted, suchrestriction shall apply with such deletion as may be necessary to make it validand effective.

##  

## 10.8         In the event that, at any time after thedate hereof, one or more persons acting alone or in concert shall acquire morethan 50 per cent of the issued share capital of the Vendor or otherwise gaincontrol of more than 50 per cent of the voting rights in the Vendor as a resultof which the Vendor ceases to be the ultimate holding company of the Vendor’sGroup, then for the purposes of this clause 10 only from the happening of suchevent and thereafter the expression “the Vendor’s Group” shall mean the Vendor’sGroup as defined in clause 1.1 as the same existed immediately prior to thehappening of such event.

##  

# **11.**          INTERIM ANDTRANSITIONAL ARRANGEMENTS

# ** **

Fromthe date of this agreement, the Vendor and the Purchaser shall comply with theprovisions of schedule 14 in relation to the matters dealt with therein.

 

19

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# **12.**          USEOF NAMES

# ** **

## 12.1         As soon as reasonably practicable but inany event, within three months following Completion, the Purchaser shallprocure that any member of the Purchaser’s Group (including for the avoidanceof doubt the Companies and the Subsidiaries) whose name incorporates the words “Highbury”or “Highbury House” shall pass a special resolution to change the name of anysuch member to one not containing the words “Highbury” or “Highbury House”.

##  

## 12.2         The Purchaser shall and shall procurethat each member of the Purchaser’s Group (including for the avoidance of doubtthe Companies and the Subsidiaries) shall as soon as reasonably practicablebut, in any event, within six months after the Completion Date but subject toclause 12.3 cease to use in any way or display any trademarks or namesconsisting of or incorporating the words “Highbury” or “Highbury House”, or anycolourable imitationsthereof and/or any trademark, name or logo used by any member of the Vendor’sGroup (excluding for the avoidance of doubt the Trademarks and Domain Names,and save as provided in clause 12.4 or 12.5) (together called the **“Marks”**) including, without prejudice tothe foregoing, the use of the Marks on any building owned or used by theCompanies or the Subsidiaries, any drawings produced by any of the Companies orthe Subsidiaries and on any letterhead, other stationery and any electronicmedia, including email addresses, web-sites and domain names.  For the avoidance of doubt nothing in thisagreement shall or shall be deemed to transfer to the Purchaser or theCompanies or the Subsidiaries any right, title or interest in the Marks.

##  

## 12.3         Each member of the Purchaser’s Group(including the Subsidiaries and Companies) shall not be prevented fromretaining copies of Past Issues or other historical materials consisting of orincorporating the Marks in whatever form or media for the purposes of supplyingcopies of such Past Issues or other historical materials in whole or in part orfor the purposes of holding archived materials in whatever form or media to theextent such materials were created prior to the Completion Date and consist ofor incorporate the Marks.

##  

## 12.4         The Vendor shall and shall procure that:

##  

### 12.4.1      as soon as reasonably practicable but, inany event, within three months following the Completion Date any member of theVendor’s Group whose name contains the word “Columbus” shall pass a specialresolution to change the name of any such member to one not containing the word“Columbus”; and

###  

### 12.4.2      as soon as reasonably practicable but, inany event, within a period of six months following the Completion Date eachmember of the Vendor’s Group shall cease to use in any way or display a nameconsisting of or incorporating the word “Columbus” or any colourable imitationthereof save that no member of the Vendor’s Group shall be prevented fromretaining copies of Past Issues consisting of or incorporating the word “Columbus”in whatever form or media for the purposes of supplying copies of such PastIssues, in whole or in part, or for the purposes of holding archived materialsin whatever form or media to the extent such materials were created prior tothe Completion Date and consist of or incorporate the word “Columbus”.

 

20

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## 12.5         As soon as reasonably practicable but, inany event, within a period of three months following the Completion Date, theVendor shall and shall procure that:

##  

### 12.5.1      any member of the Vendor’s Group whosename contains the word “Nexus” shall pass a special resolution to change thename of any such member to one not containing the word “Nexus”; and

###  

### 12.5.2      each member of the Vendor’s Group shallcease to use in any way or display a name constituting of or incorporating theword “Nexus” or any colourable imitation thereof (**“Nexus Marks”**) save:

###  

#### 12.5.2.1   as soon as reasonably practicable but, inany event within, a period of six months following the Completion Date duringwhich period members of the Vendor’s Group shall be permitted to use the NexusMarks in any drawings, exhibition brochures, promotional material and on anyelectronic media which has been produced prior to the Completion Date and whichis used in the ordinary course of business; and

####  

#### 12.5.2.2   that no member of the Vendor’s Groupshall be prevented from retaining copies of Past Issues consisting of orincorporating the Nexus Marks in whatever form or media for the purposes ofsupplying copies of such Past Issues in whole or in part or for the purposes ofholding archived materials in whatever form or media to the extent that suchmaterials were created prior to the Completion Date and consist of orincorporate the Nexus Marks.

####  

## 12.6         Following the period referred to inclause 12.2 above, the Purchaser shall procure if so requested by the Vendorthat any member of the Purchaser’s Group (as specified by the Vendor) shallenter into the Highbury Brand Assignment.

##  

## 12.7         Following the periods referred to inclauses 12.4 and 12.5 above, the Vendor shall procure, if so requested by thePurchaser, that any member of the Vendor’s Group (as specified by thePurchaser) shall enter into the Nexus & Columbus Brand Assignment.

##  

# **13.**          TAXATION

# ** **

The provisions of schedule 3 shall apply withrespect to the matters contained or referred to therein.

 

# **14.**          PROPERTYMATTERS

# ** **

## 14.1         The Purchaser agrees to permit ColinWalker or any other employee of Highbury Nexus Special Interests Limited whoreplaces Colin Walker to occupy, free of charge the premises at CarringtonBusiness Park, Manchester Road, Carrington Urmston, Manchester M31 4DD untilthe expiry or termination of the licence under which this property is occupied.

##  

## 14.2         The Vendor covenants with the Purchaserthat it will with effect from the date of this agreement until the earliest ofthe expiry of any Target Group member’s liability under anauthorised guaranteeagreement entered into in connection with a lawful assignment of or the expiryor sooner determination of the term of the leases referred to in paragraphs 14.2.1and 14.2.2 below pay the rents reserved by and observe and

 

21

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## perform the covenants andconditions on the part of the tenant or any surety contained in such leases andany documents supplemental thereto and indemnify and keep indemnified thePurchaser and any Target Group member against any Losses (which for theavoidance of doubt, shall include any tax incurred by any Target Group memberin connection with such assignment notwithstanding that any such assignmentoccurs after the Completion Date) that may be incurred as a result of anyfuture non-payment, breach, non-performance or non-observance of such covenantsand conditions howsoever arising (save due to the act neglect or default of anyTarget Group member):

##  

### 14.2.1      Lease of ground floor offices, AnneBoleyn House, Ewell Road, Cheam, Surrey (**“AnneBoleyn House Property”**) dated 16 July 2001 and made between (1)Reed Business Information Limited and (2) Cumulus Business Media Limited and(3) the Vendor (**“Cheam Lease”**);and

###  

### 14.2.2      Lease of 47 Brunswick Place and 2, 4 and6 Baches Street, London N1 (**“Jordan HouseProperty”**) dated 11 November 1999 and made between (1) ManningProperties (North London) Limited (2) Columbus Publishing Limited and (3) ColumbusGroup Plc (**“Jordan House Lease”**).

###  

## 14.3         The Purchaser acknowledges that HighburyColumbus Travel Publishing Limited intends to enter into an agreement for theassignment of the Cheam Lease to the Vendor or a member of the Vendor’s Groupin the agreed form (**“Cheam Agreement forAssignment”**) and that such agreement is stated to be conditionalupon obtaining the landlord’s consent and the Vendor covenants to enter into orprocure that a member of the Vendor’s Group enters into the Cheam Agreement forAssignment prior to Completion.

##  

## 14.4         The Purchaser covenants with the Vendorthat it will at the Vendor’s cost provide all necessary assistance to theVendor in obtaining the consent of the landlord and of any other relevant partyto the assignment of the Cheam Lease to the Vendor or a member of the Vendor’sGroup and will provide forthwith all information lawfully requested by thelandlord pursuant to such application.

##  

## 14.5         Until the assignment of the Cheam Leaseto the Vendor or a member of the Vendor’s Group has been lawfully completed thePurchaser will hold the Cheam Lease on trust for the Vendor and will permit theVendor or a member of the Vendor’s Group nominated by the Vendor to occupy theCheam Premises on the terms of the Cheam Agreement for Assignment.

##  

## 14.6         The Purchaser acknowledges that HighburyColumbus Travel Publishing Limited intends to enter into an agreement for theassignment of the Jordan House Lease to the Vendor or a member of the Vendor’sGroup in the agreed form (**“Jordan HouseAgreement for Assignment”**) and that such agreement is stated to beconditional upon obtaining the landlord’s consent and the Vendor covenants toenter into or procure that a member of the Vendor’s Group enters into theJordan House Agreement for Assignment prior to Completion.

##  

## 14.7         The Purchaser covenants with the Vendorthat it will at the Vendor’s cost provide all necessary assistance to theVendor in obtaining the consent of the landlord and of any other relevant partyto the assignment of the Jordan House Lease to the Vendor or a member of theVendor’s Group and will provide forthwith all information lawfully requested bythe landlord pursuant to such application.

 

22

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## 14.8         Until the assignment of the Jordan HouseLease to the Vendor or a member of the Vendor’s Group has been lawfullycompleted the Purchaser will hold the Jordan House Lease on trust for theVendor and will permit the Vendor or a member of the Vendor’s Group nominatedby the Vendor to occupy the Jordan House Premises on the terms of the JordanHouse Agreement for Assignment.

##  

## 14.9         The Vendor covenants with the Purchaserthat it will at it own cost use all reasonable endeavours (including ifnecessary a declaration of the court) to obtain the necessary consents requiredto enable the Cheam Lease and the Jordan House Lease to be assigned pursuant tothe Cheam Agreement for Assignment and the Jordan House Agreement forAssignment and the Vendor will ensure that its solicitors keep the Purchaser’ssolicitors informed at all times of the progress of obtaining the respectivelandlords’ consents.

##  

## 14.10       The Vendor undertakes to use allreasonable endeavours to obtain as soon as practicable and, if possible, byCompletion a form DS1 from the Governor and Company of the Bank of Scotland (**“BoS”**) in respect of the charge granted byNexus Media Communications Limited on 31 December 1997 to BoS in respectof Media House which was released on 17 March 2000.  If such from DS1 is not obtained byCompletion, the Vendor shall continue to use all reasonable endeavours toobtain it as soon as possible after Completion.

##  

# **15.**          FURTHERASSURANCE AND ATTORNEY

# ** **

## 15.1         On and after Completion, the Vendorshall, at the reasonable request of the Purchaser, do and execute or procure tobe done and executed all such acts, deeds, documents and things as mayreasonably be necessary to give effect to this agreement.

##  

## 15.2         On Completion, the Vendor shall executeor procure the execution under seal or as a deed of a power of attorney (in a formacceptable to the Purchaser, acting reasonably) in favour of the Purchaser orsuch person as may be nominated by the Purchaser generally in respect of theShares and in particular to enable the Purchaser (or its nominee) to attend andvote at general meetings of the Companies during the period prior to the nameof the Purchaser (or its nominee) being entered on the register of members ofthe Companies in respect of the Shares.

##  

# **16.**          ANNOUNCEMENTS

# ** **

No announcement, communication or circular (other thanthe Circular) concerning this agreement shall be made (whether before or afterthe Completion Date) by or on behalf of the parties hereto without the priorapproval of the other or others (such approval not to be unreasonably withheldor delayed) save for such announcements as may be required by the law of anyrelevant jurisdiction and/or by the UK Listing Authority and/or the LondonStock Exchange and/or the Securities Exchange Commission and/or the Panel onTakeovers and Mergers or any governmental or regulatory authority or body inany jurisdiction to which the relevant party submits or is subject providedthat each party must in each case consult with the other so far as practicableand take account of the reasonable requests of the other party prior to makingany such announcements.

 

# **17.**          COSTS

# ** **

## 17.1         Each of the parties shall bear and payits own legal, accountancy actuarial and other fees and expenses incurred inand incidental to the preparation and implementation of

 

23

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## this agreement and of allother documents in the agreed form.  Forthe avoidance of doubt, the Vendor shall bear and pay all fees and costsassociated with the preparation of (i) the Statutory Accounts and the EBITA Statement,and (ii) the Vendor Due Diligence Report (including any costs charged by theVendor’s Accountants in connection with the discussion of such report with thePurchaser).

##  

## 17.2         The Purchaser shall pay all stamp dutyand other transfer duties and registration fees applicable to any document towhich it is a party and which arise as a result or in consequence of thisagreement.

##  

## 17.3         Save as provided in clause 3.4 thePurchaser shall pay the costs (including fees) charged by the accountantsinstructed by it in the preparation and audit of the US GAAP Accounts, providedthat the Vendor shall bear 12 per cent of any such costs and fees up to amaximum of £50,000.

##  

# **18.**          SUCCESSORSAND ASSIGNMENT

# ** **

## 18.1         This agreement shall be binding on andenure for the benefit of each party’s successors and personal representativesbut shall not be assignable without the written consent of the other exceptthat each of the Vendor and the Purchaser may at any time following Completionassign its rights (but not its obligations) under this agreement to any companyof which it is a subsidiary or of which it is a holding company or anysubsidiary of its holding company (**“PermittedAssignee”**) without the consent of the Vendor or the Purchaser (asapplicable) provided that such arrangements shall not increase the liability ofthe other party under this agreement and provided further that should thePermitted Assignee cease to be a member of either the Purchaser’s Group or theVendor’s Group (as applicable) the Purchaser or the Vendor (as the case may be)shall procure that the Permitted Assignee reassigns its rights under theagreement to another member of either the Purchaser’s Group or the Vendor’sGroup (as applicable).  In the event ofany assignment under this clause, references to the Vendor or the Purchaser(other than in this clause) shall be construed as references to the holder forthe time being of the Vendor’s or the Purchaser’s rights under this agreement.

##  

## 18.2         The Purchaser may at any time beforeCompletion assign its rights and obligations under this agreement to aPermitted Assignee by notice to (and without the consent of) the Vendor,provided that in the event of such assignment the Purchaser shall remainjointly and severally liable for the obligations of such assignee atCompletion.

##  

## 18.3         Except as otherwise expressly provided,all rights and benefits under this agreement are personal to the parties andmay not be assigned at law or in equity without the prior written consent ofthe other party.

##  

# **19.**          ENTIREAGREEMENT

# ** **

## 19.1         This agreement (including the schedulesto it) and any documents in the agreed form, the Confidentiality Agreement andthe Disclosure Letter (**“Acquisition Documents”**)constitute the entire agreement between the parties with respect to the subjectmatter of this agreement.

##  

## 19.2         Except for any misrepresentation orbreach of warranty which constitutes fraud:

##  

### 19.2.1      the Acquisition Documents supersede andextinguish all previous agreements between the parties relating to the subjectmatter thereof (including the letter

 

24

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### dated 26 January 2005between the Vendor and the Purchaser) and any representations and/or warrantiespreviously given or made other than those contained in the AcquisitionDocuments;

###  

### 19.2.2      each party acknowledges to the other (andshall execute the Acquisition Documents in reliance on such acknowledgement)that it has not been induced to enter into any such documents by nor relied onany representation or warranty other than the representations and/or warrantiescontained in such documents;

###  

### 19.2.3      each party hereby irrevocably andunconditionally waives any right it may have to claim damages in respect of orto rescind this agreement or any of the other Acquisition Documents by reasonof any misrepresentation whatsoever or by reason of any warranty not set forthin any of the Acquisition Documents; and

###  

### 19.2.4      except for the Purchaser’s remedies underclause 3.2,4.3 and 8.8, the only remedy available for breach of any of theWarranties or for breach of any of the warranties set out in the any of theother Acquisition Documents shall be damages for breach of contract under theterms of the relevant document and rescission shall not be available as aremedy for any breach of this agreement.

###  

## 19.3         Each of the parties acknowledges andagrees for the purposes of the Misrepresentation Act 1967 and the UnfairContract Terms Act 1977 that the provisions of this clause 19 arereasonable.

##  

# **20.**          CONFIDENTIALITY

# ** **

The Purchaser undertakes to and covenants with theVendor that (except with the consent in writing of the Vendor) neither it norany other member of the Purchaser’s Group will at any time after Completion(except as required by law or any regulation of any relevant stock exchange orother governmental or regulatory authority or body in any jurisdiction)disclose or divulge to any person (other than to officers or employees of theVendor whose province it is to know the same) or use any Retained ConfidentialInformation which is within or has come to its knowledge.  The Vendor agrees that the ConfidentialityAgreement shall be terminated in all respects with effect from Completion.

 

# **21.**          TIME FORPERFORMANCE

# ** **

Time shall not be of the essence of this agreement butfollowing failure by any party to comply with any provision of this agreementtime may be made of the essence by any other party giving to the party indefault two Business Days’ notice to that effect.

 

# **22.**          VARIATIONS

# ** **

No variation of this agreement or any of the documentsin the agreed form shall be valid unless it is in writing and signed by or onbehalf of each of the parties to this agreement.

 

# **23.**          WAIVER

# ** **

No waiver by either party of any breach or non-fulfilmentby the other party of any provisions of this agreement shall be deemed to be awaiver of any subsequent or other breach of that or any other provision and nofailure to exercise or delay in exercising any right or remedy under

 

25

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this agreement shall constitute a waiver thereof.  No single or partial exercise of any right orremedy under this agreement shall preclude or restrict the further exercise ofany such right or remedy.  The rights andremedies of each party provided in this agreement are cumulative and notexclusive of any rights and remedies provided by law.

 

# **24.**          AGREEMENTCONTINUES IN FORCE

# ** **

This agreement shall remain in full force and effectso far as concerns any matter remaining to be performed at Completion eventhough Completion shall have taken place.

 

# **25.**          SEVERABILITY

# ** **

The invalidity, illegality or unenforceability of anyprovisions of this agreement shall not affect the continuation in force of theremainder of this agreement.

 

# **26.**          NOTICES

# ** **

## 26.1         Any notice to be given pursuant to theterms of this agreement shall be given in writing to the party due to receivesuch notice at the address set out in clause 26.2 or such other address as mayhave been notified to the other parties in accordance with this clause 26.  Notice shall be delivered personally or sentby first class prepaid recorded delivery or registered post (airmail ifoverseas) or by facsimile transmission and shall be deemed to be given in thecase of delivery personally on delivery and in the case of posting (in theabsence of evidence of earlier receipt) 48 hours after posting (six days ifsent by airmail) and in the case of facsimile transmission on completion of thetransmission provided that the sender shall have received printed confirmationof transmission.

##  

## 26.2         For the purposes of clause 26.1, theaddress of each of the parties is as follows:

##  

### 26.2.1      Vendor:

###  

Highbury House Communicationsplc

Jordan House

47 Brunswick Place

London N1 6EB

Attention: Company Secretary

Fax Number: +44 (0)20 7608 6605

 

### 26.2.2      Purchaser:

###  

Ergo Science Corporation

19 West 44th Street,

Suite 1405,

New York,

NY 10036,

USA

Attention: Ling Kwok

Fax Number: +1 212 391 5288

 

with a copy to:

 

Vinson & Elkins R.L.L.P.

CityPoint (Level 33)

 

26

----

 

One Ropemaker Street

London EC2Y 9UE

Attention: Rob Patterson

Fax Number: +44 (0) 20 7065 6001

 

# **27.**          COUNTERPARTS

# ** **

This agreement may be executed in any number ofcounterparts each of which when executed by one or more of the parties heretoshall constitute an original but all of which shall constitute one and the sameinstrument.

 

# **28.**          THIRD PARTYRIGHTS

# ** **

A person who is not party to this agreement shall haveno right under the Contracts (Rights of Third Parties) Act 1999 to enforce anyterm of this agreement, except for (i) the Companies, the Subsidiaries andtheir respective officers and employees pursuant to clause 8.5; (ii) theCompanies and the Subsidiaries pursuant to clause 8.14, clause 14.2 andparagraph 34 of schedule 14.  Thisclause does not affect any right or remedy of any person which exists or isavailable otherwise than pursuant to that Act.

 

# **29.**          SERVICE OFPROCESS

# ** **

The Purchaser irrevocably appoints Stirling SquareCapital Partners (Attention: Ling Kwok Ergo Science Corporation) at 4th Floor,Liscartan House, 127 Sloane Street, London SW1X 9AX, England (Facsimile 00 4420 7808 4785) as its agent for services of notices and/or proceedings inrelation to any matter arising out of or in connection with this agreement andservice on such agent shall be deemed to be service on the Purchaser.

 

# **30.**          CAPACITY

# ** **

## 30.1         Each of the parties warrants to the otherthat it has full power and authority and has obtained all necessary consents(including, where relevant, shareholder consent) (save that the Purchaseracknowledges and agrees that the Vendor requires the sale of the Target Groupmembers to be approved by the members of the Vendor in general meeting) toenter into and perform the obligations expressed to be assumed by it under thisagreement (and any other agreement or arrangement required to be entered into byit in connection with this agreement), that the obligations expressed to beassumed by it hereunder are legal, valid and binding and enforceable against itin accordance with their terms and that the execution, delivery and performanceby it of this agreement and each such other agreement and arrangement will not:

##  

### 30.1.1      result in a breach of, or constitute adefault under, any agreement or arrangement to which it is a party or by whichit is bound or under its constitutive documents; or

###  

### 30.1.2      result in a breach of any law or order,judgment or decree of any court, governmental agency or regulatory body towhich it is a party or by which it is bound.

###  

## 30.2         Clause 9 and schedule 9 shall notapply to any Claim arising under or in connection with clause 30.1.

 

27

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# **31.**          GOVERNING LAWAND JURISDICTION

# ** **

## 31.1         This agreement shall be governed by andconstrued in accordance with the laws of England.

##  

## 31.2         The parties irrevocably agree that thecourts of England shall have exclusive jurisdiction to settle any dispute whichmay arise out of or in connection with this agreement and that accordingly, anysuit, action or proceedings arising out of or in connection with this agreementshall be brought in such courts.

##  

**IN WITNESS**of which the parties or their duly authorisedrepresentatives have executed this agreement as a deed.

 

28

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**SCHEDULE 1**

** **

**Part 1**

** **

**The Companies**

 
| **Highbury Business Communications Limited** |       |                        |
|----------------------------------------------|------------|-----------------------------|
| ** **                                   | ** ** | ** **                  |   |   |
| 1.                                           |       | Registered  number:         |   | 04189911 |
|                                         |       |                        |   |   |
| 2.                                           |       | Date  of incorporation:     |   | 29 March 2001 |
|                                         |       |                        |   |   |
| 3.                                           |       | Place  of incorporation:    |   | England  and Wales |
|                                         |       |                        |   |   |
| 4.                                           |       | Registered  office:         |   | Jordan  House  47 Brunswick Place  London N1 6EB |
|                                         |       |                        |   |   |
| 5.                                           |       | Authorised  share capital:  |   | 1,000  ordinary A shares of £1 each |
|                                         |       |                        |   |   |
| 6.                                           |       | Issued  share capital:      |   | £1,000 |
|                                         |       |                        |   |   |
|                                         |       | Number of shares:           |   | 1000  ordinary A shares of £1 each |
|                                         |       |                        |   |   |
|                                         |       | Amount paid up:             |   | Fully |
|                                         |       |                        |   |   |
| 7.                                           |       | Shareholders:               |   | Highbury  House Communications plc - 1000 ordinary A shares of £1 each |
|                                         |       |                        |   |   |
| 8.                                           |       | Directors:                  |   | Mark  Simpson  Littleton House  Blandford St Mary  Blandford Forum  Dorset  DT11 9NA |
|                                         |       |                        |   |   |
|                                         |       |                        |   | Owen  Davies  Little Oaks  2b Drax Avenue  Wimbledon  SW20 0EH |
|                                         |       |                        |   |   |
| 9.                                           |       | Secretary:                  |   | Hafeez  Kaiyumali Anjarwalla  215 Wandsworth Bridge Road  London SW6 2TT |
|                                         |       |                        |   |   |
| 10.                                          |       | Accounting  reference date: |   | 31  December |
|                                         |       |                        |   |   |
| 11.                                          |       | Auditors:                   |   | Deloitte  & Touche |
|                                         |       |                        |   |   |
| 12.                                          |       | Tax  residence:             |   | United  Kingdom |

 

29

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| 13.                           |       | Charges:                    |   | None                                                                                                                                                            |
|-------------------------------|------------|-----------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                          |       |                        |   |                                                                                                                                                            |
| **Highbury Business Limited** |       |                        |
| ** **                    | ** ** | ** **                  |   |                                                                                                                                                            |
| 1.                            |       | Registered  number:         |   | 03442147                                                                                                                                                        |
|                          |       |                        |   |                                                                                                                                                            |
| 2.                            |       | Date  of incorporation:     |   | 25 September 1997                                                                                                                                          |
|                          |       |                        |   |                                                                                                                                                            |
| 3.                            |       | Place  of incorporation:    |   | England  and Wales                                                                                                                                              |
|                          |       |                        |   |                                                                                                                                                            |
| 4.                            |       | Registered  office:         |   | Jordan  House  47 Brunswick Place  London N1 6EB                                                                                                                |
|                          |       |                        |   |                                                                                                                                                            |
| 5.                            |       | Authorised  share capital:  |   | 4,980  ‘A’ ordinary shares of £1 each,  410 ‘B’ ordinary shares of £1 each and  410 ‘C’ ordinary shares of £1 each |
|                          |       |                        |   |                                                                                                                                                            |
| 6.                            |       | Issued  share capital:      |   | £3,300                                                                                                                                                     |
|                          |       |                        |   |                                                                                                                                                            |
|                          |       | Number of shares:           |   | 3,300  ‘A’ ordinary shares of £1 each                                                                                                            |
|                          |       |                        |   |                                                                                                                                                            |
|                          |       | Amount paid up:             |   | Fully                                                                                                                                                           |
|                          |       |                        |   |                                                                                                                                                            |
| 7.                            |       | Shareholders:               |   | Highbury  House Communications plc - 3,300 ‘A’ ordinary shares of £1 each                                                                        |
|                          |       |                        |   |                                                                                                                                                            |
| 8.                            |       | Directors:                  |   | Mark  Simpson  Littleton House  Blandford St Mary  Blandford Forum  Dorset  DT11 9NA                                                                            |
|                          |       |                        |   |                                                                                                                                                            |
|                          |       |                        |   | Owen  Davies  Little Oaks  2b Drax Avenue  Wimbledon  SW20 0EH                                                                                                  |
|                          |       |                        |   |                                                                                                                                                            |
| 9.                            |       | Secretary:                  |   | Hafeez  Kaiyumali Anjarwalla  215 Wandsworth Bridge Road  London SW6 2TT                                                                                        |
|                          |       |                        |   |                                                                                                                                                            |
| 10.                           |       | Accounting  reference date: |   | 31  December                                                                                                                                                    |
|                          |       |                        |   |                                                                                                                                                            |
| 11.                           |       | Auditors:                   |   | Deloitte  & Touche                                                                                                                                          |
|                          |       |                        |   |                                                                                                                                                            |
| 12.                           |       | Tax  residence:             |   | United  Kingdom                                                                                                                                                 |
|                          |       |                        |   |                                                                                                                                                            |
| 13.                           |       | Charges:                    |   | None                                                                                                                                                            |

 

30

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| **Nexus Media Communications Limited** |       |                        |
|----------------------------------------|------------|-----------------------------|
| ** **                             | ** ** | ** **                  |   |   |
| 1.                                     |       | Registered  number:         |   | 2785570 |
|                                   |       |                        |   |   |
| 2.                                     |       | Date  of incorporation:     |   | 1 February 1993 |
|                                   |       |                        |   |   |
| 3.                                     |       | Place  of incorporation:    |   | England  and Wales |
|                                   |       |                        |   |   |
| 4.                                     |       | Registered  office:         |   | Jordan  House  47 Brunswick Place  London N1 6EB |
|                                   |       |                        |   |   |
| 5.                                     |       | Authorised  share capital:  |   | 500,000  ordinary shares of £1 each  2,000,000 ordinary ‘A’ shares of £1 each and  7,000,000 preference shares of £0.01 each |
|                                   |       |                        |   |   |
| 6.                                     |       | Issued  share capital:      |   | £2,570,000 |
|                                   |       |                        |   |   |
|                                   |       | Number of shares:           |   | 500,000  ordinary shares of £1 each  2,000,000 ordinary ‘A’ shares of £1 each and  7,000,000 preference shares of £0.01 each |
|                                   |       |                        |   |   |
|                                   |       | Amount paid up:             |   | Fully |
|                                   |       |                        |   |   |
| 7.                                     |       | Shareholders:               |   | Highbury  House Communications plc - 500,000 ordinary shares of £1 each |
|                                   |       |                        |   |   |
|                                   |       |                        |   | 2,000,000  ordinary ‘A’ shares of £1 each; and |
|                                   |       |                        |   |   |
|                                   |       |                        |   | 7,000,000  preference shares of £0.01 each |
|                                   |       |                        |   |   |
| 8.                                     |       | Directors:                  |   | Mark  Simpson  Littleton House  Blandford St Mary  Blandford Forum  Dorset  DT11 9NA |
|                                   |       |                        |   |   |
|                                   |       |                        |   | Owen  Davies  Little Oaks  2b Drax Avenue  Wimbledon  SW20 0EH |
|                                   |       |                        |   |   |
| 9.                                     |       | Secretary:                  |   | Hafeez  Kaiyumali Anjarwalla  215 Wandsworth Bridge Road  London SW6 2TT |
|                                   |       |                        |   |   |
| 10.                                    |       | Accounting  reference date: |   | 31  December |
|                                   |       |                        |   |   |
| 11.                                    |       | Auditors:                   |   | Deloitte  & Touche |
|                                   |       |                        |   |   |
| 12.                                    |       | Tax  residence:             |   | United  Kingdom |
|                                   |       |                        |   |   |
| 13.                                    |       | Charges:                    |   | Debenture in  favour of Barclays Bank plc |

 

31

----

 
| **Highbury Columbus Travel Publishing Limited** |       |                        |
|-------------------------------------------------|------------|-----------------------------|
| ** **                                      | ** ** | ** **                  |   |   |
| 1.                                              |       | Registered  number:         |   | 1993193 |
|                                            |       |                        |   |   |
| 2.                                              |       | Date  of incorporation:     |   | 27 February 1986 |
|                                            |       |                        |   |   |
| 3.                                              |       | Place  of incorporation:    |   | England  and Wales |
|                                            |       |                        |   |   |
| 4.                                              |       | Registered  office:         |   | Jordan  House  47 Brunswick Place  London N1 6EB |
|                                            |       |                        |   |   |
| 5.                                              |       | Authorised  share capital:  |   | 50,000  ordinary shares of £1 each |
|                                            |       |                        |   |   |
| 6.                                              |       | Issued  share capital:      |   | £50,000 |
|                                            |       |                        |   |   |
|                                            |       | Number of shares:           |   | 50,000  ordinary shares of £1 each |
|                                            |       |                        |   |   |
|                                            |       | Amount paid up:             |   | Fully |
|                                            |       |                        |   |   |
| 7.                                              |       | Shareholders:               |   | Columbus  Holdings Limited - 50,000 ordinary shares of £1 each |
|                                            |       |                        |   |   |
| 8.                                              |       | Directors:                  |   | Mark  Simpson  Littleton House  Blandford St Mary  Blandford Forum  Dorset  DT11 9NA |
|                                            |       |                        |   |   |
|                                            |       |                        |   | Owen  Davies  Little Oaks  2b Drax Avenue  Wimbledon  SW20 0EH |
|                                            |       |                        |   |   |
| 9.                                              |       | Secretary:                  |   | Hafeez  Kaiyumali Anjarwalla  215 Wandsworth Bridge Road  London SW6 2TT |
|                                            |       |                        |   |   |
| 10.                                             |       | Accounting  reference date: |   | 31  December |
|                                            |       |                        |   |   |
| 11.                                             |       | Auditors:                   |   | Deloitte  & Touche |
|                                            |       |                        |   |   |
| 12.                                             |       | Tax  residence:             |   | United  Kingdom |
|                                            |       |                        |   |   |
| 13.                                             |       | Charges:                    |   | Security  Agreement in favour of Barclays Bank PLC |

 

32

----

 
| **Highbury-Harpers Limited** |       |                        |
|------------------------------|------------|-----------------------------|
| ** **                   | ** ** | ** **                  |   |   |
| 1.                           |       | Registered  number:         |   | 687138 |
|                         |       |                        |   |   |
| 2.                           |       | Date  of incorporation:     |   | 21 March 1961 |
|                         |       |                        |   |   |
| 3.                           |       | Place  of incorporation:    |   | England  and Wales |
|                         |       |                        |   |   |
| 4.                           |       | Registered  office:         |   | Jordan  House  47 Brunswick Place  London N1 6EB |
|                         |       |                        |   |   |
| 5.                           |       | Authorised  share capital:  |   | 24,000  ordinary shares of £1 each |
|                         |       |                        |   |   |
| 6.                           |       | Issued  share capital:      |   | £19,500 |
|                         |       |                        |   |   |
|                         |       | Number of shares:           |   | 19,500  ordinary shares of £1 each |
|                         |       |                        |   |   |
|                         |       | Amount paid up:             |   | Fully |
|                         |       |                        |   |   |
| 7.                           |       | Shareholders:               |   | S.  Stracker (Holdings) Limited - 19,500 ordinary shares of £1 each |
|                         |       |                        |   |   |
| 8.                           |       | Directors:                  |   | Mark  Simpson  Littleton House  Blandford St Mary  Blandford Forum  Dorset  DT11 9NA |
|                         |       |                        |   |   |
|                         |       |                        |   | Owen  Davies  Little Oaks  2b Drax Avenue  Wimbledon  SW20 0EH |
|                         |       |                        |   |   |
| 9.                           |       | Secretary:                  |   | Hafeez  Kaiyumali Anjarwalla  215 Wandsworth Bridge Road  London  SW6 2TT |
|                         |       |                        |   |   |
| 10.                          |       | Accounting  reference date: |   | 31  December |
|                         |       |                        |   |   |
| 11.                          |       | Auditors:                   |   | Deloitte  & Touche |
|                         |       |                        |   |   |
| 12.                          |       | Tax  residence:             |   | United  Kingdom |
|                         |       |                        |   |   |
| 13.                          |       | Charges                     |   | Debenture  in favour of Barclays Bank plc |

 

33

----

 

**Part 2**

** **

**The Subsidiaries**

 
| **The International Wine and Spirit  Competition Limited** |
|------------------------------------------------------------|
| ** **                                                 | ** ** | ** ** | ** ** | ** ** |
| 1.                                                         |   | Registered number: |   | 720550 |
|                                                       |   |   |   |   |
| 2.                                                         |   | Date of  incorporation: |   | 4  April 1962 |
|                                                       |   |   |   |   |
| 3.                                                         |   | Place of  incorporation: |   | England and  Wales |
|                                                       |   |   |   |   |
| 4.                                                         |   | Registered  office: |   | Jordan House |
|                                                       |   |   |   | 47 Brunswick  Place |
|                                                       |   |   |   | London N1  6EB |
|                                                       |   |   |   |   |
| 5.                                                         |   | Authorised  share capital: |   | £5,000  divided into 5,000 ordinary shares of £1 each |
|                                                       |   |   |   |   |
| 6.                                                         |   | Issued share  capital: |   | £5,000  divided into 5,000 ordinary shares of £1 each (all fully paid up) |
|                                                       |   |   |   |   |
| 7.                                                         |   | Shareholders: |   | Highbury-Harpers  Limited - 5,000 ordinary shares of £1 each |
|                                                       |   |   |   |   |
| 8.                                                         |   | Directors: |   | Peter Duff |
|                                                       |   |   |   | The Right  Honourable Viscount John |
|                                                       |   |   |   | Archibald  Thurso |
|                                                       |   |   |   | David  Timothy Wrigley MW |
|                                                       |   |   |   | Anthony  Salter |
|                                                       |   |   |   |   |
| 9.                                                         |   | Secretary |   | Hafeez Kaiyumali  Anjarwalla |
|                                                       |   |   |   |   |
| 10.                                                        |   | Accounts  reference date: |   | 31 December |
|                                                       |   |   |   |   |
| 11.                                                        |   | Auditors: |   | Deloitte &  Touche |
|                                                       |   |   |   |   |
| 12.                                                        |   | Tax  residence: |   | United  Kingdom |
|                                                       |   |   |   |   |
| 13.                                                        |   | Charges: |   | None |

 
| **Highbury-Nexus Limited** |
|----------------------------|
| ** **                 | ** ** | ** ** | ** ** | ** ** |
| 1.                         |   | Registered number: |   | 2970942 |
|                       |   |   |   |   |
| 2.                         |   | Date of  incorporation: |   | 20  September 1994 |
|                       |   |   |   |   |
| 3.                         |   | Place of  incorporation |   | England and  Wales |

 

34

----

 
| 4.     |   | Registered  office:        |   | Jordan House                                                                    |
|--------|--------|----------------------------|--------|---------------------------------------------------------------------------------|
|   |   |                       |   | 47 Brunswick  Place                                                             |
|   |   |                       |   | London N1  6EB                                                                  |
|   |   |                       |   |                                                                            |
| 5.     |   | Authorised share  capital: |   | £100 divided  into 100 ordinary shares of £1 each                     |
|   |   |                       |   |                                                                            |
| 6.     |   | Issued share  capital:     |   | £100 divided  into 100 ordinary shares of £1 each (all fully paid up) |
|   |   |                       |   |                                                                            |
| 7.     |   | Shareholders:              |   | Nexus Media  Communications Limited - 100 ordinary shares of £1 each       |
|   |   |                       |   |                                                                            |
| 8.     |   | Directors:                 |   | Mark Simpson                                                                    |
|   |   |                       |   | Owen Davies                                                                     |
|   |   |                       |   |                                                                            |
| 9.     |   | Secretary:                 |   | Hafeez  Kaiyumali Anjarwalla                                                    |
|   |   |                       |   |                                                                            |
| 10.    |   | Accounts  reference date:  |   | 31 December                                                                     |
|   |   |                       |   |                                                                            |
| 11.    |   | Auditors:                  |   | Deloitte &  Touche                                                     |
|   |   |                       |   |                                                                            |
| 12.    |   | Tax  residence:            |   | United  Kingdom                                                                 |
|   |   |                       |   |                                                                            |
| 13.    |   | Charges:                   |   | Security  document in favour of Barclays Bank plc                               |

 
| **Highbury Nexus Media Limited** |
|----------------------------------|
| ** **                       | ** ** | ** ** | ** ** | ** ** |
| 1.                               |   | Registered number: |   | 2703051 |
|                             |   |   |   |   |
| 2.                               |   | Date of  incorporation: |   | 2  April 1992 |
|                             |   |   |   |   |
| 3.                               |   | Place of  incorporation: |   | England and  Wales |
|                             |   |   |   |   |
| 4.                               |   | Registered  office: |   | Jordan House |
|                             |   |   |   | 47 Brunswick  Place |
|                             |   |   |   | London N1  6EB |
|                             |   |   |   |   |
| 5.                               |   | Authorised  share capital: |   | £1,000,000  divided into 1,000,000 ordinary shares of £1 each |
|                             |   |   |   |   |
| 6.                               |   | Issued share  capital: |   | £1,000,000  divided into 1,000,000 ordinary shares of £1 each (all fully paid up) |

 

35

----

 
| 7.     |   | Shareholders              |   | Highbury WV  (Holdings) Limited(1) - 1,000 ordinary shares of £1 each |
|--------|--------|---------------------------|--------|----------------------------------------------------------------------------|
|   |   |                      |   |                                                                       |
| 8.     |   | Directors:                |   | Mark Simpson                                                               |
|   |   |                      |   | Owen Davies                                                                |
|   |   |                      |   |                                                                       |
| 9.     |   | Secretary:                |   | Hafeez  Kaiyumali Anjarwalla                                               |
|   |   |                      |   |                                                                       |
| 10.    |   | Accounts  reference date: |   | 31 December                                                                |
|   |   |                      |   |                                                                       |
| 11.    |   | Auditors:                 |   | Deloitte &  Touche                                                |
|   |   |                      |   |                                                                       |
| 12.    |   | Tax  residence:           |   | United  Kingdom                                                            |
|   |   |                      |   |                                                                       |
| 13.    |   | Charges:                  |   | Debenture in  favour of Barclays Bank plc                                  |

 

----

1              The beneficial title tothe whole of the issued share capital of this company was transferred on 12January 2005 to Nexus Media Communications Limited.  Upon stamping of the stock transfer form inrespect of this transfer, the legal title to the issued share capital of thiscompany will vest in Nexus Media Communications Limited.

 

36

----

 

**SCHEDULE 2**

 

**The Warranties**

** **

**Part 1**

** **

**General**

** **

**1.****             CAPACITYAND OWNERSHIP OF SHARES**

 

1.1           Schedule 1 is true andaccurate and the shareholders of each Target Group member listed in schedule 1are the legal and beneficial owners of the shares set out against theirnames.  Each such shareholder is a memberof the Vendor’s Group.

 

1.2           The shares detailed atparagraph 6 of part 1 in schedule 1 or paragraph 6 of part 2 of schedule 1(as the case may be) in relation to each Target Group member constitute thewhole of the allotted and issued share capital of such Target Group member andhave been properly allotted and issued fully paid.

 

1.3           There is no Encumbrance on,over or affecting the Shares or the issued shares in any of the Subsidiaries orany unissued shares in the capital of any Target Group member.  No member of the Vendor’s Group is a party toor has entered into any agreement or commitment to give or create any suchEncumbrance on, over or affecting the Shares or the issued shares in any of theSubsidiaries or any unissued Shares in the capital of any Target Group member.

 

1.4           Other than this agreement,there is no agreement, arrangement or obligation requiring the creation, allotment,issue, transfer, redemption or repayment of, or the grant to any person of theright (whether exercisable at a future date and whether conditional or not) torequire the allotment, issue, transfer, redemption or repayment of, any sharesin the capital of, or loan capital of, any Target Group member.

 

1.5           There is no litigation,arbitration, prosecution, administrative or other legal proceedings or disputein existence or so far as the Vendor is aware, threatened against the Vendor inrespect of the Shares or the Vendor’s entitlement to dispose of the Shares oragainst any company in respect of the shares held by it in any Subsidiary.

 

2.             **ACCOUNTS**

 

2.1           The Accounts have beenprepared in accordance with the requirements of the relevant statutes and on abasis consistent with that adopted in the preparation of the audited accountsof each Target Group member for each of the last three preceding financialyears of each Target Group member and in accordance with all financialreporting standards, statements of standard accounting practice and generallyaccepted accounting principles and practices in the United Kingdom (asinterpreted as at the Accounts Date) and give a true and fair view of theassets and liabilities and state of affairs of each Target Group member as atthe Accounts Date and its profits and losses for the relevant period ended onthe Accounts Date.

 

2.2           At Completion, theStatutory Accounts will have been prepared in accordance with the requirementsof the relevant statutes and on a basis consistent with that adopted in thepreparation of the audited accounts of each Target Group member for each of thelast three preceding financial years of each Target Group member and inaccordance

 

37

----

 

with all financial reporting standards,statements of standard accounting practice and generally accepted accountingprinciples and practices in the United Kingdom and will give a true and fairview of the assets and liabilities and state of affairs of each Target Groupmember as at 31 December 2004 and their profits and losses for the 12months ended on 31 December 2004.

 

3.             **MANAGEMENTACCOUNTS**

 

The Management Accounts have been carefullyprepared on a consistent basis and in accordance with the accounting policiesset out in the Accounts and do not materially misstate the profits and lossesof the Target Group as a whole for the nine month period ending on 30 September 2004and the 12 month period ending on 31 December 2004 respectively.

 

4.             **VENDOR DUE DILIGENCE REPORT**

 

4.1           So far as the Vendor isaware:

 

4.1.1        the Vendor Due DiligenceReport contains no factual information that is untrue or inaccurate ormisleading in any material respect;

 

4.1.2        information provided to theVendor’s Accountants in connection with their preparation of the Vendor DueDiligence Report was, when taken as a whole, not misleading;

 

4.1.3        the Forecasts are reasonableforecasts having regard to the current trading, financial position and what theVendor honestly believes to be the reasonable prospects of the Target Group;

 

4.1.4        Appendix 4 of the Vendor DueDiligence Report has been carefully and prudently prepared.

 

4.2           So far as the Vendor isaware, the assumptions used for the purposes of the preparation of theForecasts are reasonable assumptions having regard to the current trading andfinancial position of the Target Group.

 

**5.****             POSITIONSINCE ACCOUNTS DATE**

 

Sincethe Accounts Date:

 

5.1           the business of each TargetGroup member (including in relation to the acquisition of disposal of anybusiness or asset (including shares, debentures or securities) or theassumption or acquisition of any liability or contingent liability) has beencarried on in the ordinary and usual course so as to maintain the same as agoing concern;

 

5.2           there has been no materialadverse change in the financial position of any Target Group member;

 

5.3           no debtor has been releasedby any Target Group member on terms that he pays less than the book value ofhis debt and no debt owing to any Target Group member has been written off orhas proved or, so far as the Vendor is aware (for the avoidance of doubt,having made no enquiry of any debtor), is reasonably likely to prove to anyextent irrecoverable;

 

5.4           there has not been anycapitalisation of reserves of any Target Group member and no

 

38

----

 

Target Groupmember has issued or agreed to issue any share or loan capital other than thatissued at the Accounts Date and has not granted or agreed to grant any optionin respect of any loan capital and no Target Group member has repaid any loancapital in whole or in part nor has it, by reason of any default in itsobligations, become bound to repay prematurely any loan capital or borrowedmonies;

 

5.5           there has been no resolutionof or agreement by the members of any Target Group member or any class thereof(except as provided in this agreement or with the prior written consent of thePurchaser);

 

5.6           no Target Group member haschanged its accounting reference period;

 

5.7           no management charge hasbeen levied against any Target Group member;

 

5.8           no Target Group member hasdeclared, set aside or paid any dividends or made any distribution with respectto its shares;

 

5.9           no material change hasoccurred in the assets and liabilities of any Target Group member shown in therelevant Accounts.

 

**6.****             BUSINESSNAME**

 

NoTarget Group member carries on business or sells any product or service underany name other than its corporate name and the Business Names, Trade Marks,Magazine Titles, Domain Names, Exhibitions and other trading styles asdisclosed to the Purchaser in the Disclosure Letter.

 

**7.****             LICENCESAND CONSENTS**

 

EachTarget Group member has obtained all licences, permissions, authorisations andconsents (**“Consents”**) required to carry on theBusiness as it is carried on at the date of this agreement and so far as theVendor is aware the Consents are all valid and subsisting.  No Target Group member is in breach in anymaterial respect of any of the terms and conditions attached to the Consentsand so far as the Vendor is aware (but without having made any enquiry of anythird party) there are no circumstances which indicate that any of suchlicences, permissions, authorisations or consents are likely to be revoked orterminated or not renewed in the ordinary course of events.

 

**8.****             ASSETS**

 

8.1           All the property and assetswhich are described and included in the Accounts or which are used exclusivelyin connection with the Business are:

 

8.1.1        legally and beneficially ownedby a Target Group member;

 

8.1.2        in the possession of a TargetGroup member;

 

8.1.3        adequate for the needs of theTarget Group at Completion and for the continuance of the Business afterCompletion;

 

8.1.4        free from all Encumbrances andthere is not any agreement or commitment to give or create, and so far as theVendor is aware no claim has been made by any person entitled to anyEncumbrance; and

 

39

----

 

8.1.5        situated in the UnitedKingdom.

 

8.2           None of the assets referredto in paragraph 8.1 are the subject of any assignment, royalty,  factoring arrangement, leasing or hiringagreement, hire purchase agreement, or agreement for payment on deferred terms.

 

8.3           The Business as it iscarried on at the date of this agreement does not require the use of any assetsowned or leased by the Vendor (or any member of the Vendor’s Group) or theprovision of any services by the Vendor (or any member of the Vendor’s Group).

 

8.4           Each of the materialmachinery and equipment used in the conduct of the Business of any Target Groupmember has been maintained in accordance with applicable law and is inreasonable operating condition (subject to fair wear and tear given the age ofsuch equipment and assets).

 

**9.****             DEBTS**

 

9.1           No Target Group member isowed any sums other than trade debts incurred in the ordinary course ofbusiness.

 

9.2           No Target Group member hasfactored or discounted or otherwise assigned any debts owing to it.

 

**10.****                               CREDITORS AND LIABILITIES**

 

No Target Group member has creditors or anyother liabilities (including contingent liabilities) other than as disclosed inthe Accounts or trade creditors incurred in the ordinary and proper course ofbusiness since the Accounts Date.

 

**11.****                               INSURANCE**

 

11.1         Copies of all insurancepolicies effected by any Target Group member or by any other person in relationto any Target Group member’s assets or the Business (the **“Policies”**) are attached to the DisclosureLetter.  All such insurance policies arecurrently in force and effect.

 

11.2         All premiums due on thePolicies have been duly paid and all other conditions of those Policies havebeen performed and observed in all material respects.  So far as the Vendor is aware, nothing hasbeen done or omitted to be done which is likely to render any of the Policiesvoid or voidable.

 

11.3         There are no claimsoutstanding under the Policies and so far as the Vendor is aware, there are nocircumstances which would give rise to any claim under the Policies.

 

**12.****          RECORDS**

 

All the books, registers, ledgers and financialrecords of each Target Group member are up-to-date and in its possession andownership and have been properly kept and, so far as the Vendor is aware, thereare no material inaccuracies or material discrepancies of any kind containedtherein.

 

40

----

 

**13.****          CONFIDENTIALINFORMATION**

 

13.1         So far as the Vendor isaware, no Target Group member uses any processes nor is engaged in anyactivities which involve the misuse of any confidential information belonging toany third party or alleged misuse.

 

13.2         The Vendor is not aware ofany actual or alleged misuse by any person of any of the ConfidentialInformation of any Target Group member.

 

**14.****          INTELLECTUALPROPERTY**

 

14.1         The Companies listed in parts 1 and 2 ofschedule 10 are the sole legal and/or beneficial owners and the registeredproprietors as appropriate of all the Trade Marks and Domain Names and materialparticulars are set out in schedule 10 of all registered Trade Marks andDomain Names owned by any Target Group member and such details are correct.

 

14.2         The Vendor warrants that the assignmentof the MOTOR TRADER trade mark with number 687191 has been submitted to the UKtrade mark registry.

 

14.3         The Target Group members, or one ofthem, are the legal and/or beneficial owners of (or have appropriate licences,permissions or consents to use) the Business Intellectual Property (butexcluding the Trade Marks and Domain Names where the provisions of Warranty14.1 and 14.2 shall apply and excluding the Content Copyright where warranty14.4 shall apply) and which is material to the Business.

 

14.4         The Target Group members, or one ofthem, are either the sole unencumbered legal and beneficial owners of or had alicence to use the Content Copyright at the time of the relevant publicationsin each issue of the Magazine Titles published prior to the Completion Date.

 

14.5         The Target Group members, or one ofthem, are the legal and beneficial owners of the Intellectual Property in theSource Code.

 

14.6         The Business Intellectual Property ownedby any Target Group member is subsisting and enforceable and as far as theVendor is aware nothing has been done or not been done as a result of which anyof it has ceased or might cease to be subsisting or enforceable.

 

14.7         Neither the Target Group members nor theVendor has received any written notice by any person asserting its moral rightsin relation to the Business Intellectual Property and so far as the Vendor isaware no moral rights are likely to be asserted which would materiallyadversely affect the use of the Business Intellectual Property following thedate of this agreement.

 

14.8         Neither the Target Group members nor theVendor has received any written notice of claim that it is in material defaultunder any Licence.

 

14.9         The Business Intellectual Property isadequate for the Target Group to be able to continue to operate the Businessfollowing the Completion Date in the same manner as it was operated immediatelyprior to the Completion Date.

 

14.10       Neither the Trade Marks nor the DomainNames are the subject of any pending proceedings for opposition, cancellation,revocation or rectification and so far as the

 

41

----

 

Vendor is aware, there are no facts or matters in existence which willgive rise to any such proceedings.

 

14.11       As far as the Vendor is aware, none ofthe Business Intellectual Property is currently being infringed by any thirdparty and so far as the Vendor is aware no third party has threatened any suchinfringement.

 

14.12       There are no outstanding written claimsagainst any Target Group member for infringement of any Intellectual Propertyused by it, and no claims have been settled by the giving of any undertakingswhich remain in force.

 

14.13       So far as the Vendor is aware the saleof the Shares to the Purchaser and the performance by the parties of theirobligations under this agreement will not entitle any party to any Licence orother agreement under which any Target Group member enjoys rights or by whichit is bound to be released from any of that party’s obligations, to change theterms on which any material Business Intellectual Property is used or held bythe relevant Target Group member or to terminate or vary that party’s rightsunder the relevant Licence or other agreement, and will not create oraccelerate any obligation of any Target Group member or cause or require anyTarget Group member to lose or dispose of any material Business IntellectualProperty or any interest in any material Business Intellectual Property.

 

14.14       During the last twelve months noadvertiser, subscriber, sponsor or other third party has made any written claimfor breach of contract against any Target Group member or the Vendor inrelation to any Past Issues or Future Issues.

 

14.15       So far as the Vendor is aware neitherthe Vendor or a Target Group member has received any written notice in thetwelve months prior to Completion from any person that anything published byany Target Group member in the Past Issues or Websites contains anything whichis obscene, blasphemous or libellous.

 

14.16       Neither the Vendor nor a Target Groupmember has received any written notice or claim that it is in material defaultunder any contract in respect of Exhibitions held prior to the date hereof.

 

14.17       No Target Group member has received written notice that the use ofvenues booked for Future Exhibitions will be cancelled or varied in any way andthe Vendor is not aware of any matter which is likely to lead to thecancellation or variation of any Target Group member’s use of such venues forFuture Exhibitions.

 

**15.****          COMPUTERSYSTEMS**

 

15.1         Save to the extent provided in theDisclosure Letter, the Companies and the Subsidiaries are the owners of theComputer Systems free from Encumbrances or (as at the Completion Date) haveobtained all necessary rights from third parties to enable them to use theComputer Systems in the same manner as they were used immediately prior to theCompletion Date.

 

15.2         So far as the Vendor is aware the ITSupport Agreements are valid and binding and no act or omission has occurredwhich would, if necessary with the giving of notice or lapse of time,constitute a breach of any such contract.

 

42

----

 

15.3         The Target Group has possession orcontrol of or right of access to the Source Code of all software which isbespoke to and owned by the Target Group and which forms part of the ComputerSystems.

 

15.4         So far as the Vendor is aware theComputer Systems:

 

15.4.1      as at the Completion Date arefunctioning (and during the twelve months prior to the Completion Date havefunctioned) in accordance with their applicable specifications;

 

15.4.2      are not defective in any materialrespect and have not been materially defective or materially failed to functionduring the last twelve months;

 

15.4.3      do not contain any software virus andhave not within the last twelve months been infected by any software virus oraccessed by any unauthorised person; and

 

15.4.4      have sufficient capacity and performance,when taken with the transitional services to be provided pursuant to schedule 14(including the provision of the Listed Software), to meet the businessrequirements of the Target Group as the Business is being operated on theCompletion Date without requiring any contribution or input from the resourcesof the Vendor’s Group.

 

15.5         So far as the Vendor is aware the Target Group members, or one of them,have appropriate procedures in place for ensuring the security of the ComputerSystem and the confidentiality and integrity of all data stored in it.

 

**16.****          DATAPROTECTION**

 

16.1         Where required to do so underthe Data Protection Act 1998, the Target Group members, or one of them have:

 

16.1.1      notified registrableparticulars under the Data Protection Act 1998 of all personal data held by theTarget Group member in question; and

 

16.1.2      renewed such notifications.

 

16.2         No Target Group member has,within the twelve months immediately preceding the Completion Date, eitherreceived a written notice from nor, so far as the Vendor is aware, been subjectto enquiries by the Information Commissioner regarding non-compliance oralleged non-compliance by any Target Group member with any provision of theData Protection Act 1998.

 

16.3         So far as the Vendor is awareno personal data have been transferred outside the European Economic Area inbreach of the Data Protection Act 1998.

 

16.4         So far as the Vendor is awareother than the Target Group members, or as required under the Data ProtectionAct 1998 or any other legislation or legal obligation no other company orperson whether legal or natural has access to or requires access to theSubscriber Lists.

 

**17.****          EMPLOYEES**

 

17.1         No persons are employed inthe Business other than the Employees named in the

 

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Disclosure Letter.

 

17.2         None of the Employees hasgiven or received written notice terminating his employment or will be entitledto give notice as a result of the provisions of this agreement.

 

17.3         The Disclosure Letter includes details of all Employees of each TargetGroup member, the particulars of each Employee and the principal terms of theircontract including:

 

17.3.1      their current remuneration (including any benefits and privilegesprovided or which each Target Group member or the relevant Subsidiary is boundto provide);

 

17.3.2      the commencement date on which their continuous service began or isdeemed to have begun;

 

17.3.3      the length of notice necessary to terminate each contract, or if afixed term, the expiry date of the fixed term and details of any previousrenewals;

 

17.3.4      the type of contract (whether full or part-time or other); and

 

17.3.5      date of birth.

 

17.4         Copies of all outstandingcontracts for all individuals employed or engaged by any Target Group memberand having a basic annual salary or guaranteed fee in excess of £40,000 areannexed to the Disclosure Letter.

 

17.5         There is not in existence anycontract of employment with any Employee which cannot be terminated by threemonths’ notice or less without giving rise to the making of a payment in lieuof notice or a claim for damages or compensation (other than a statutoryredundancy payment or statutory compensation for unfair dismissal).

 

17.6         The Disclosure Lettercontains complete and accurate details of any outstanding offer of employmentor engagement made to any individual by any Target Group member, and noindividual has accepted an offer of employment or engagement by any TargetGroup member who has not yet started his employment or engagement.

 

17.7         No person now or previouslyemployed or engaged by any Target Group member has or may in the future have aright to return to work (whether for reasons connected to secondment or withmaternity, paternity, adoption or other leave, absence by reason of illness orincapacity or otherwise) or a right to be reinstated or re-engaged by thatcompany.

 

17.8         There is not outstanding anyagreement or arrangement to which any Target Group member is party for profitsharing or for payment to any of the Employees of bonuses, commission orincentive payments.

 

17.9         No Target Group member hasentered into any recognition agreement with a trade union nor has it done anyact which may be construed as recognition, whether under Schedule A1 ofthe Trade Union and Labour Relations (Consolidation) Act 1992 as amended, orotherwise.

 

17.10       There is no agreement,arrangement, scheme or obligation (whether legal or moral) for the payment ofany pensions, allowances, lump sums or other like benefits on redundancy onretirement or on death or during periods of sickness or disablement for thebenefit of any of the Employees or for the benefit of dependants of any of theEmployees.

 

17.11       No amounts due to or in respectof any of the Employees or any past employees of any Target Group member(including PAYE and national insurance and pension

 

44

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contributions) are in arrears or unpaid.

 

17.12       No monies or benefits otherthan in respect of contractual emoluments are payable to any Employee and thereis not at present a claim or so far as the Vendor is aware, any circumstanceswhich is likely hereafter to give rise to a claim against any Target Groupmember arising out of the employment or termination of employment of anyEmployee or former employee for compensation for loss of office or employmentor otherwise and whether under the Employment Rights Act 1996, Race RelationsAct 1976, Equal Pay Act 1970, Sex Discrimination Act 1975, Sex DiscriminationAct 1986, Disability Discrimination Act 1995, Working Time Regulations 1998,National Minimum Wage Act 1998 and the regulations made under such acts orregulations or any other act.

 

17.13       Copies of all agreements forthe provision of consultancy services or other services of personnel of or toany Target Group member and details of the terms applicable to the secondmentto or from any Target Group member of any person are annexed to or (as the casemay be) contained in the Disclosure Letter.

 

17.14       No Target Group member has anycontractual obligation to make any payment on redundancy in excess of thestatutory redundancy payment, and has not operated any discretionary practiceof making any such excess payments.

 

17.15       No Target Group member operatesand is not proposing to introduce any Inland Revenue approved share optionscheme, share incentive scheme, approved profit sharing scheme, enterprisemanagement incentive scheme, employee share ownership plan or unapproved sharescheme under which share benefits are provided, in respect of any personemployed or engaged, or formerly employed or engaged, by any Target Groupmember.  No other company provides anysuch scheme or plan in respect of any of the Employees.

 

17.16       There is no actual orthreatened protected disclosure under the Public Interest Disclosure Act 1998.

 

17.17       No Target Group member nor any of its Subsidiaries has incurredany liability for failure to provide information or to consult with Employeesunder any Employment Legislation at any time during the period of 6 months priorto the date of this Agreement.

 

17.18       No paymentor other benefit agreed to be made or provided to a former director, officer orEmployee or to their dependants in connection with the termination orsuspension of employment or variation of an employment contract is outstandingas at the date of this Agreement.

 

**18.****          CONTRACTS**

 

18.1         Annexed to the DisclosureLetter are true, complete and accurate copies of all Material Contracts towhich any Target Group member is a party. For these purposes, a “**MaterialContract**” means any of the following:

 

18.1.1              any agency, distributorship, co-operation, manufacturing, supplyagreement pursuant to which any part of the business of any Target Group memberis carried on (other than any agreement for the supply of electricity, waterand other utility services and contracts for the supply of refreshment machinesto any of the Properties);

 

18.1.2              any agreement between any Target Group member and any member of theVendor’s Group;

 

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18.1.3              any agreement entered into by any Target Group member otherwise thanin the ordinary course of business on arm’s length terms;

 

18.1.4              any agreement with any person for the organisation or holding of, orthe reservation of any venue for, any exhibition, conference or awards ceremonyscheduled to take place after 30 June 2005; and

 

18.1.5              any other agreement pursuant to which the revenue or cost to therelevant Target Group member is reasonably likely to exceed £50,000.

 

18.2         No Target Group member northe Vendor has given or received written notice terminating any MaterialContract to which any Target Group member is a party and each Material Contractto which any Target Group member is a party is valid and binding in accordancewith its terms.

 

18.3         No Target Group member nor,so far as the Vendor is aware, any party with whom any Target Group member hasentered into any Material Contract is in default in any material respect of anyMaterial Contract to which any Target Group member is a party, and so far asthe Vendor is aware, there are no circumstances likely to give rise to such adefault.

 

18.4         No Target Group member isparty to any agreement, transaction, obligation or arrangement which the Vendoris aware will or is reasonably likely to result in a loss to the Target Groupmember on completion thereof.

 

**19.****          TRADING**

 

19.1         No Target Group member hasentered into an agreement or arrangement with a customer or supplier (otherthan a supplier of utilities) on terms materially different to its standardterms of business, a copy of which is annexed to the Disclosure Letter.

 

19.2         No Target Group member isrestricted by contract from carrying on its business in the United Kingdom orany other area or jurisdiction.

 

19.3         No offer or tender is outstandingwhich is capable of being converted into an obligation of any Target Groupmember by an acceptance or other act of some other person.

 

19.4         During the three yearspreceding the date of this agreement there has been no substantial change inthe basis or terms on which any person is prepared to enter into contracts ordo business with any Target Group member and so far as the Vendor is aware nosuch change is expected.

 

19.5         No supplier or customer ofany Target Group member has during the 12 months preceding the date of thisagreement ceased or indicated in writing an intention to cease trading with aTarget Group member or to reduce in any material respect its trading orsupplies to a Target Group member, where such cessation of trading is reasonablylikely to have a material adverse impact on the financial performance of theTarget Group.

 

**20.****          JOINTVENTURES ETC**

 

No Target Group member is:

 

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20.1         a party to any joint venture,consortium, partnership or profit-sharing arrangement or agreement; or

 

20.2         a member of any partnership,trade association, society or other group whether formal or informal andwhether or not having a separate legal identity.

 

**21.****          BORROWINGS**

 

NoTarget Group member has outstanding:

 

21.1         any Borrowings;

 

21.2         any guarantee, indemnity orundertaking (whether or not legally binding) in support of the obligations ofany person or to procure the solvency of any person or any similar obligation;or

 

21.3         any Encumbrance or any obligation(including a conditional obligation) to create an Encumbrance.

 

**22.****          LITIGATION,OFFENCES AND COMPLIANCE WITH STATUTES**

 

22.1         Otherwise than as claimant inthe collection of debts arising in the ordinary course of business no TargetGroup member is a claimant, defendant or otherwise a party to any litigation,arbitration or administrative proceedings which are in progress or, so far asthe Vendor is aware, pending or threatened by or against or concerning anyTarget Group member or any of its assets. No Target Group member is being prosecuted for any criminal offence andso far as the Vendor is aware no governmental or official investigation orinquiry concerning the Business or officers of any Target Group member or anyof its assets is in progress or pending and so far as the Vendor is aware,there are no circumstances which are likely to give rise to any suchproceedings, investigation or inquiry.

 

22.2         No Target Group member nor,so far as the Vendor is aware, any of its officers or employees (during thecourse of their duties in relation to the Business) has committed or omitted todo any act or thing the commission or omission of which is in contravention ofany statutory obligation or any other law of the United Kingdom giving rise toany fine, penalty, default proceedings or other liability in relation to thebusiness or officers of any Target Group member or any of its assets or anyjudgment or decision which in any of the aforesaid cases would materiallyaffect the financial position of the Target Group.

 

**23.****          SUBSIDIARIESAND BRANCHES**

 

23.1         No Target Group member has inthe last six years had any subsidiary or subsidiary undertaking apart from theSubsidiaries and has not in the last six years been the subsidiary of any othercompany and no Target Group member is the legal or beneficial owner of anyshares of any other company other than the Subsidiaries listed in schedule 1part 2.

 

23.2         No Target Group member hasany agency, branch or other place of business or permanent establishmentoutside the United Kingdom.

 

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**24.****          ADMINISTRATION**

 

24.1         The register of members,other statutory books and other records of the Target Group members have beenproperly kept and are correct and no written notice or written allegation thatany of the same is incorrect or should be rectified has been received.

 

24.2         No Target Group member hasgiven any power of attorney or any other authority (express, implied orostensible) which is still outstanding or effective to any person to enter intoany contract or commitment or do anything on its behalf (other than anyauthority of directors or employees to enter into routine trading contracts inthe normal course of their duties).

 

**25.****          INSOLVENCY**

 

25.1         In this part 1, “**Insolvency Proceedings**” means any formal insolvencyproceedings, whether in or out of court, including proceedings or steps leadingto any form of bankruptcy, liquidation, administration, receivership,arrangement or scheme with creditors, moratorium, stay or limitation ofcreditors’ rights, interim or provisional supervision by a court or courtappointee, winding-up or striking-off.

 

25.2         Insolvency Proceedings havenot been served in relation to any of the Vendor, any Target Group member or(if applicable) any part of their respective assets or undertaking.

 

25.3         No resolution has been passedfor the compulsory or voluntary winding-up of any Target Group member and, sofar as the Vendor is aware, no petition has been presented or proceedingsissued or proposal made in relation to any Insolvency Proceedings.

 

25.4         No Target Group member isinsolvent, or unable to pay its debts within the meaning of section 123Insolvency Act 1986, nor has it stopped paying its debts as they fall due.

 

25.5         No distress, distraint, chargingorder, guarantee order, execution or other process has been levied or appliedfor in respect of the whole or any part of any Target Group member’s property,assets or undertaking.

 

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**Part 2**

** **

**Media House and Dunsfold Park**

** **

**TITLE**

 

1.             The Propertiescomprise:

 

1.1           all the land and premisesof whatever tenure owned or occupied by any Target Group member in the UnitedKingdom ; and

 

1.2           all the estate, interest,right and title of any Target Group member in respect of any land or premisesin the United Kingdom.

 

2.             The Properties areoccupied or used by any Target Group member in connection with the businesscarried on by a Target Group member by right of ownership or under lease orlicence.

 

3.             The Target Group members,or one of them, are the legal and beneficial owner of the Properties.

 

4.             The information containedin schedule 6 as to the tenure of the Properties is true and accurate inall material respects.

 

5.             The Target Group members,or one of them, have a good title to each of the Properties.

 

6.             All deeds and documentsnecessary to prove the title of a Target Group member to the Properties are inthe possession or under the control of the relevant Target Group member and,where the title to the Properties is registered, the relevant Target Groupmember is shown on the register thereof at HM Land Registry as the proprietorwith absolute title.

 

7.             The replies to enquiriesdated 25 November 2004 given by the Vendor in respect Media House arecomplete and accurate in all material respects on the date they were given andwould still be complete and accurate in all material respects if the replieswere instead given on Completion.

 

8.             There are no insurancepolicies relating to any issue of any Target Group member’s title to theProperties.

 

**ENCUMBRANCES**

 

9.             The Properties are notsubject to any liability for the payment of any outgoings other than nationalnon-domestic rates, water and sewerage services charges and payments to usualstatutory undertakers and insurance premiums and, in the case of any lease orlicence, the rent or licence fee, service charges and any other sums payable bythe tenant or licensee under the terms of that lease or licence.

 

10.           The Properties are notsubject to any agreement or right to acquire the same nor any option, right ofpre-emption or right of first refusal.

 

11.           There is no person who isin occupation or who has or claims any rights or easements in respect of any ofthe Properties or the benefit of any agreement to create any such rights oreasements adversely to the estate, interest, right or title of a Target Groupmember therein.

 

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12.           The Properties are free from mortgages, debentures, charges, rentcharges, liens or other encumbrances or matters of an onerous nature whichwould affect its value save as referred to in the title documentation to theProperty listed in the Disclosure Letter.

 

**PLANNINGMATTERS**

 

13.           For the purposes ofparagraph 12 the **“Planning Acts”** means:

 

13.1         the Town and Country PlanningAct 1990;

 

13.2         the Planning (ListedBuildings and Conservation Areas) Act 1990;

 

13.3         the Planning (HazardousSubstances) Act 1990;

 

13.4         the Planning (ConsequencesProvisions) Act 1990; and

 

13.5         the Planning and CompensationAct 1991

 

as the sameare from time to time varied or amended and any other statute or subordinatelegislation relating to planning matters.

 

14.           No Target Group member hasreceived any written notice that the use of any of the Properties is in breachof the Planning Acts and is not aware of any breach thereof.

 

15.           No agreements orundertakings relating to the Properties have been entered into by any TargetGroup member or any predecessor in title under the provisions of:

 

15.1         section 18 of the PublicHealth Act 1936; or

 

15.2         sections 38 and 278 of theHighways Act 1980;

 

15.3         section 106 of the Townand Country Planning Act 1990; or

 

15.4         any similar legislation orearlier legislation of the same nature

 

(**“Statutory Agreements”**).

 

16.           No Target Group member hasreceived any written notice of any planning contravention notices, breach ofcondition notices, enforcement notices or stop notices issued by any localplanning authority in respect of the Properties nor of any other enforcementaction taken by any such authority.

 

**STATUTORY OBLIGATIONS**

 

17.           No Target Group member isin breach of any applicable statutory and bye-law requirements and therequirements of any competent authority with respect to the Properties.

 

**ADVERSE ORDERS**

 

18.           No Target Group member hasreceived any written notice of any compulsory purchase notices, orders orresolutions affecting the Properties.

 

19.           No Target Group member hasreceived any written notice of any closing demolition or clearance ordersenforcement notices or stop notices affecting the Properties.

 

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**DISPUTES**

 

20.           There exists no disputebetween any Target Group member and the owner or occupier of any adjoining orneighbouring owner with respect to boundary walls and fences or with respect toany easement, right or means of access to the Properties.

 

21.           No notices, writtencomplaints or written requirements have been issued or made (whether formallyor informally) by any competent authority or undertaking exercising statutoryor delegated powers in relation to any of the Properties, the current use ofthe Properties or any machinery, plant or equipment in them.

 

**INSURANCE**

 

22.           Media House is insured inits full reinstatement value and against third party and public liabilities.

 

23.           All premiums payable inrespect of insurance policies relating to Media House and the insurance rentrelating to the lease of Dunsfold Park which have become due have been dulypaid and there are no circumstances which have arisen which would so far as theVendor is aware vitiate or permit the insurers to avoid such policies.

 

**LEASEHOLD**

 

24.           The relevant Target Groupmember has paid the rent and materially observed and materially performed thecovenants on the part of the tenant and the conditions contained in theDunsfold Park Lease and the last demand (or receipts for rent if issued) wereunqualified, and such lease is valid and in full force.

 

25.           There are no rent reviewsunder the leases of the Properties held by any Target Group member currently inprogress.

 

26.           None of the Properties isthe subject of any lease or licence for the benefit of any person other than aTarget Group member.

 

**PREVIOUS PROPERTIES**

 

27.           No Target Group member hasexisting or contingent liabilities in respect of any property previouslyoccupied by it or in which it owned or held any interest, including withoutlimitation, leasehold premises assigned or otherwise disposed of.

 

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**Part 3**

** **

**Pensions**

** **

**PENSIONARRANGEMENTS**

 

1.          Otherthan the Disclosed Schemes, no Target Group member has any obligations(whether funded or not)  to make paymentof a contribution towards or other provision of relevant benefits (as definedin section 612 of the Income and Corporate Taxes Act 1988 (**“ICTA”**) for the benefit of any of its current or former Employees or any oftheir dependants.

 

2.          Noundertaking or assurance (whether legally binding or not) has been given by anyTarget Groupmember to continue or introduce any scheme or arrangement,or to increase, augment or improve any relevant benefits (including but notrestricted to those provided under the Disclosed Schemes) other than pursuantto the Disclosed Schemes.

 

**ALL DETAILS DISCLOSED**

 

3.          Completeand accurate particulars of the Disclosed Schemes have been disclosed to thePurchaser including, but not restricted to, copies of:

 

3.1.   current trustdeeds and rules together with subsequent amendments;

 

3.2.   members’booklets and subsequent announcements to members;

 

3.3.   membershipdata including pensionable salaries;

 

3.4.   the mostrecent trustees’ annual report and audited accounts; and

 

3.5.   PensionSchemes Office exempt approval letters.

 

**COMPLIANCE**

 

4.          TheDisclosed Schemes have exempt approved status under Chapter I of Part XIVof ICTA or are approved as personal pension schemes for the purposes of ChapterIV of Part XIV of ICTA and the Vendor is not aware of any grounds on whichsuch approval could be withdrawn or could cease to apply.

 

5.          Thereis no contracting-out certificate in force to cover employments to which theDisclosed Schemes relate.

 

6.          TheDisclosed Schemes have been operated at all times in accordance with theirgoverning documents (as lawfully amended from time to time).

 

**CONTRIBUTIONS AND OTHER PAYMENTS**

 

7.          Thereare not in respect of any of the Disclosed Schemes as at the date of Completionany outstanding contributions, costs (including levies) or expenses payable byany Target Groupmember or the employees or any other outstandingmonetary obligations (including, without limitation actuarial, consultancy,legal or other fees).

 

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**BENEFITS**

 

8.          Theretirement benefits payable under each of the Disclosed Schemes consistexclusively of money-purchase benefits as defined in section 181 of thePension Schemes Act 1993.

 

**STAKEHOLDER SCHEME**

 

9.          Inrespect of each stakeholder scheme the Vendors have disclosed to the Purchaser:

 

9.1.       fullparticulars, including the liability of each Target Group member to makecurrent and future contributions to it; and

 

9.2.       a list ofits relevant employees who are members and their respective contribution rates.

 

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**SCHEDULE 3**

** **

**Taxation**

** **

**Part 1**

** **

**Definitionsand interpretation**

** **

1.             In this schedule the followingwords and expressions shall (except where the context otherwise requires) havethe following meanings:

 

**“Actual Tax Liability”**means any liability of any TargetGroup member to make a payment of or increased payment of Tax (whether or notsuch liability is a primary liability) and whether or not the person so liablehas or may have any right of indemnity or reimbursement (statutory orotherwise) against any other person;

 

**“CAA1990”** means the Capital Allowances Act 1990;

 

**“CAA 2001”**means theCapital Allowances Act 2001;

 

**“Claim for Tax”** means any claim, notice,demand, assessment, letter or other document issued or any action taken by oron behalf of any person (including any Target Group member) or TaxAuthority whether before or after the date hereof from which it appears that any TargetGroup member has or may have a Tax Liability;

 

**“Effective Tax Liability”** shall have the meaning givenin paragraph 2 of this part 1;

 

**“Event”** includes any act, omission, event or transaction and, withoutlimitation, the receipt or accrual of any income, profit or gain, thedeclaration, making or payment of any distribution, membership of or ceasing tobe a member of any group or partnership or any other association, death, anyresidence or change in the residence of any person for tax purposes, the expiryof any period of time and Completion;

 

**“FA”**followed by a year means theFinance Act of that year or where there was more than one **“FA”** followed by a number in brackets ayear shall be construed accordingly;

 

**“group relief”** means any amount eligiblefor relief under sections 402 - 413 of the Taxes Act, advance corporation taxwhich is capable of being surrendered under section 240 of the Taxes Act,any tax refund which is capable of being surrendered under section 102 ofthe FA 1989, any relievable tax which is capable of being surrendered pursuantto regulations made under section 806H of the Taxes Act or utilisation ofany losses pursuant to an election under section 171A of the TCGA;

 

**“ITEPA”** means the IncomeTax (Earnings and Pensions) Act 2003;

 

**“loanrelationship”** shall have the same meaning asin section 81(1) of the FA 1996;

 

**“non-availability”** means loss, reduction, modification, cancellation, non-availabilityor non-availability ab initio;

 

**“Post Completion Relief”** means a Relief to the extentthat it arises by reference to an Event occurring after Completion;

 

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“**Relevant Employment-Related Security**” meansany security, or any interest in any security, acquired by any person where theright or opportunity to acquire the securities or the interest in thesecurities was made available by reason of the employment (that expressionhaving the same meaning which it is given in section 421B of the ITEPA) ofthat person or of any other person with any Target Group member;

 

**“Relief”** means any loss, relief,allowance, credit deduction, exemption or set-off in each case in respect ofTax or any right to repayment of Tax;

 

**“Representative Member”** means the representativemember of the VAT Group of which any Target Group member was amember prior to Completion;

 

**“SDLT”**means Stamp Duty Land Tax;

 

**“Taxation”** or**“Tax”** means all forms of taxes,duties, imposts, charges, contributions, withholdings, rates or levies of anynature whatsoever, whether direct or indirect and whether or not arising as aresult of the loss, withdrawal, setting off or non-availability of any relief,credit, exemption, allowance, deduction or set-off whether of the UnitedKingdom or elsewhere, together with any interest, fine, penalty or surcharge onthe same, including (without limitation), capital gains tax, corporation tax,customs and excise duties, income tax, inheritance tax, insurance premium tax,national insurance contributions, stamp duty, stamp duty reserve tax, stampduty land tax and value added tax;

 

**“Tax Authority”** means the Commissioners ofInland Revenue, the Commissioners of Customs and Excise, or any authority orbody, whether of the United Kingdom or elsewhere and whether national orotherwise having the power or authority or other function in relation to Tax;

 

**“Tax Liability”** means any Actual TaxLiability, Effective Tax Liability or other liability of any TargetGroup member which is relevant for the purposes of this schedule;

 

**“Tax Statute”** means any primary orsecondary statute, instrument, enactment, order, law, by-law or regulationmaking any provision for or in relation to Tax and **“Tax Statutes”** shall be construed accordingly;

 

**“TMA”** means the Taxes ManagementAct 1970;

 

**“VAT Regs”**means the Value Added TaxRegulations 1995 (9SI 1995/2518)

 

**“VATA”** means the Value Added TaxAct 1994;

 

**“VAT Group”** means a VAT group within themeaning of section 43 of the VATA.

 

2.             In this schedule an **“Effective Tax Liability”** shall mean:

 

2.1           theset-off of any Post Completion Relief against any Tax or against income,profits or gains in circumstances where, but for such utilisation or set-off,an Actual Tax Liability would have arisen in respect of which the Vendor wouldhave been liable to the Purchaser under this schedule; and

 

2.2           the value of an Effective Tax Liability,where the Effective Tax Liability involves the set-off of a Post CompletionRelief shall be the amount of Tax saved by such set-off.

 

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3.             Any reference to a Tax Liability inrespect of income, profits or gains earned, accrued or received shall include aTax Liability in respect of income, profits or gains deemed to have been ortreated or regarded as earned, accrued or received and any reference to TaxLiability on the happening of any Event shall include Tax Liability where suchEvent (for the purposes of the Tax Statute in question) is deemed to haveoccurred or is treated or regarded as having occurred.

 

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**Part 2**

** **

**Tax Warranties**

** **

**TAX RETURNS AND COMPLIANCE**

 

1.             Each Target Group member has at all times in the last six yearssubmitted to all relevant Tax Authorities by therequisite dates every computation, return and all information for the purposeof Tax to the extent required under any Tax Statute and each such computation,return and information was correct and complete and leaves no material matterunresolved regarding the Tax affairs of any Target Group member and so far asthe Vendor is aware not likely to be the subject of any dispute with any TaxAuthority.

 

2.             Each Target Group member has discharged every Tax Liability which hasfallen due and there is no Tax Liability or potentialTax Liability in respect of which the date for payment has been postponed byagreement with the relevant Tax Authority or by virtue of any right under anyTax Statute or the practice of any Tax Authority.

 

3.             Each Target Group member has properly made all deductions, withholdingsand retentions required to be made in respect of any actual or deemed paymentmade or benefit provided on or before Completion and has to the extent requiredby law accounted for all such deductions, withholdings and retentions, andwithout prejudice to the generality of the foregoing,each Target Group member has properly operated PAYE and all relevantregulations made thereunder.

 

4.             Each Target Group member has maintained and has in its possession, andunder its control, all records and documentation that it is required by any TaxStatute to maintain and preserve.

 

5.             In the last three years no Target Group member has been, and so far asthe Vendor is aware is not likely to be, subject to any investigation ornon-routine audit or visit by any Tax Authority.

 

**GENERALPROVISIONS FOR TAX**

 

6.             To the extent required by generally accepted accounting principles,provision or reserve was made in the Accounts in respect of every Tax Liabilityfor which any Target Group member at the Accounts Date was or may have been liable oraccountable whether or not such Tax Liability was or is a primary liability of any TargetGroup member, and whether or not any Target Group member had,or may have any right of reimbursement against any other person.

 

7.             No Target Group member is a “large company” within the meaning of regulation 3 of theCorporation Tax (Instalment Payments) Regulations 1998.

 

**CHARGEABLEGAINS**

 

8.             Save to the extent provided for in the deferred Tax provision in theAccounts, no chargeable profit or gain would arise in respect of any asset of any TargetGroup member:

 

8.1           treated as such in the Accounts, if that asset were to be disposed offor consideration equal to the value attributed thereto in the Accounts;

 

8.2           acquired after the Accounts Date, if that asset were to be disposed offor consideration equal to the consideration given for its acquisition

 

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in each case disregarding any statutory rightto claim any allowance or relief other than amounts deductible under section 38of the TCGA.

 

8.3           No Target Group member has at any time been party to any Event falling within sections 29,30, 31, 31A, 32, 33, 34 (value shifting) or 17 (disposals and acquisitionstreated as made at market value) of the TCGA or received any asset by way ofgift.

 

8.4           No Target Group member has at any time been party to any Event falling within the terms ofsections 135, 136, 138A or 139 of the TCGA (company reconstructions andamalgamations).

 

**CAPITALALLOWANCES**

 

9.             Save to the extent provided for in the deferred Tax provision in theAccounts, if all the assets in respect of which allowances have been claimedunder Part 2 of the Capital Allowances Act 2001 or Part II of the CAA1990 (Plant and Machinery Allowances) and Part 3 of the Capital AllowancesAct 2001 or Part I of the Capital Allowances Act 1990 (IndustrialBuildings Allowances) and owned by any Target Group member atthe Accounts Date were to be sold by such Target Group member for an amountequal to the value attributed to such assets in the Accounts then (ignoring anyreliefs or allowances available to that Target Group member) no balancingcharge would be made on such Target Group member.

 

**CLOSECOMPANIES**

 

10.           No Target Group member is, nor has it ever been a close companyas defined in section 414 of the Taxes Act.

 

**GROUPS OF COMPANIES**

 

11.           No Target Group member:

 

11.1         acquired any asset from anyother company other than another member of the Target Group which at anyrelevant time was a member of the same group of companies (as defined in section 170of the TCGA or as defined in paragraphs 46 to 54 of schedule 29 to the FA2002) as any TargetGroup member or was an associated company (as definedin section 774(4) of the Taxes Act);

 

11.2         made any intra-grouptransfers of assets in circumstances such that any Target Group member could be regarded as realising a chargeable gain on theappropriation of the asset to or from trading stock under section 173 ofthe TCGA;

 

11.3         incurred any liability orcontingent liability under section 176 (depreciatory transactions within agroup) or section 190 (tax on one member of group recoverable from anothermember or from a controlling director) of the TCGA;

 

11.4         enteredinto or become subject to any arrangement under section 36 of the FA 1998for the payment of corporation tax; or

 

11.5         been aparty to or agreed to make an election under section 179A of the TCGA toreallocate any gain or loss arising under section 179 of the TCGA within agroup.

 

**INHERITANCETAX**

 

12.           Neither the assets nor the shares of any Target Group member are,or may be, subject to any

 

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charge by virtue of section 237 of the Inheritance Tax Act 1984and no person has, or may have the power under section 212 of theInheritance Tax Act 1984 to raise any capital transfer tax or inheritance taxby sale or mortgage of, or a charge on any of any Target Group member’s assetsor shares.

 

**LOAN RELATIONSHIPS**

 

13.           Each money debt (as definedwithin section 81(2) of FA 1996) in relation to which any Target Group member is a debtor or creditor and reflected in the Accounts or existingon the date of this agreement constitutes a loan relationship of any Target Group member and no such loan relationship is one which has an unallowable purposeas defined in paragraph 13 of schedule 9 to the FA 1996.

 

14.           No Tax Liability ornon-trading deficit would arise from any loan relationship of any Target Group member as a result of any debt under such loan relationship being settledin full or in part at Completion.

 

15.           In relation to each of itsloan relationships, each Target Group member operates and has in eachaccounting period of each Target Group member ending after 31 March 1996,operated an accruals basis of accounting authorised under section 85 ofthe FA 1996.

 

**EMPLOYMENT RELATEDSECURITIES**

 

16.           No Target Group member has at any time issued any Relevant Employment-Related Security toany person.

 

**TAX AVOIDANCE**

 

17.           No Target Group member has ever:

 

17.1         enteredinto, been party to or otherwise been concerned with any Event as a result ofwhich any provision of Chapter I, Chapter IV or Chapter VI of Part XVII ofthe Taxes Act applied, applies or may apply;

 

17.2         beenparty to or concerned with any scheme or arrangement of which the main purposeor one of the main purposes was the avoidance of or a reduction in liability toTax.

 

**STAMPDUTY, SDRT AND SDLT**

 

18.           Each document in the possession or under the control of any TargetGroup member, or to the production of which any Target Group member isentitled and on which any Target Group member reliesor may rely on as purchaser or lessee and which in the United Kingdom orelsewhere requires any stamp or mark to denote that:

 

18.1         any duty tax or fee required to be paidby law has been paid; or

 

18.2         a duty tax or fee referred to inparagraph 18.1 is not required to be paid, or that the document in question orthe Event evidenced by it qualifies from a relief or exemption from such dutytax or fee; or

 

18.3         the document has been produced to theappropriate authority

 

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has been properly stamped or marked asappropriate and no such document which is outside the United Kingdom wouldattract stamp duty if it were to be brought into the United Kingdom.

 

19.           No liability to stamp dulyor SDLT will arise as a result of the withdrawal of any relief to stamp duty orSDLT claimed prior to Completion because of the execution of this Agreement.

 

20.           Each Target Group memberhas complied in all respects with the provisions of Part IV of the FA 1986(Stamp Duty Reserve Tax) and any regulations made under such legislation.

 

**VALUEADDED TAX**

 

21.           Each Target Group member is registered as a taxable person for thepurposes of VAT.

 

22.           Each Target Group member:

 

22.1         has complied in all material respects with all Tax Statutes relevant toVAT and guidance published by all relevant Tax Authorities in any formwhatsoever and has made and obtained full, complete, correct and up-to-daterecords and invoices and other documents appropriate or requisite for thepurposes of such Tax Statutes and guidance.

 

22.2         is not in arrears with anypayment and has not failed to submit any return in a true and complete manneror information required in respect of VAT;

 

22.3         is not at the date of thisagreement liable under Parts XIX or XIXA of the VAT Regs to repay any VATrefunded to it;

 

22.4         is not nor has it been at anytime partially exempt for VAT purposes and there are no circumstances pursuantto which regulations 107 to 110 of the VAT Regs apply or may apply to any Target Group member;

 

22.5         has not purchased or agreedto purchase any asset to which article 5 of the Value Added Tax (SpecialProvisions) Order 1995 (SI 1995/1268) applied or would apply;

 

22.6         does not own any asset andhas not incurred any expense in respect of which Part XV of the VAT Regs(Capital Goods Scheme) applies; and

 

22.7         is not aware of anythingwhich indicates that any grant to any Target Group member of any interest in or rightover land or of any licence to occupy land will not be an exempt supply for VATpurposes.

 

23.           The Disclosure Lettercontains full particulars of any election to waive the exemption made or agreedto be made under schedule 10 to the VATA by (i) any Target Group member or (ii) any person who, in relation to any Target Group member, is a relevant associate as defined in paragraph 3(7) of that schedule inrespect of any property in which any Target Group member has an interest and noEvent has occurred as a result of which any such election is not, or may ceaseto be, valid and effective.

 

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**Part 3**

** **

**Tax Covenant**

** **

**1.****           ****COVENANT**

 

1.1           The Vendor covenants to pay to thePurchaser an amount equal to:

 

1.1.1        any Actual Tax Liability which arises byreference to an Event occurring or income, profits or gains earned, accrued orreceived on or before Completion including the arrangements referred to inparagraphs 34.1 and 34.2 of Schedule 14;

 

1.1.2        the value of any Effective TaxLiability; and

 

1.1.3        the reasonable costs properly incurredby the Purchaser or the company in connection with a successful claim underthis part 3 of this schedule.

 

**2.****           ****DEDUCTIONSFROM PAYMENTS**

 

2.1           All sums payable by the Vendor under anyclaim under the Tax Covenant shall be paid gross, free and clear of any rightsof counterclaim or set-off and without any deduction or withholding unless thededuction or withholding is required by law in which event the Vendor shall paysuch additional amount as shall be required to ensure that the net amountreceived and retained (free of any liability) by the Purchaser will equal thefull amount which would have been received by it had no such deduction orwithholding been required, provided that this paragraph shall not apply to anyinterest payable under paragraph 5.3 of part 4 of this schedule.

 

2.2           In the event that any sum paid to thePurchaser pursuant to this schedule is or will be chargeable to Tax, theVendor shall be obliged to pay such further sum as will, after payment of theTax, leave a sum equal to the amount that would otherwise have been payable ifTax had not been so chargeable and for these purposes a sum shall be regardedas chargeable to Tax in circumstances where it would have been so chargeablebut for the use or set off of a Post Completion Relief available to thePurchaser.

 

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** **

**Part 4**

** **

**Limitations and Procedure**

** **

**1.****           ****LIMITATIONS**

 

The Vendor shall not beliable under any Tax Warranty or any claim under the Tax Covenant in respect ofany Tax Liability to the extent that:

 

1.1           such Tax Liability has been dischargedprior to Completion;

 

1.2           such liability arises or is increased byreason of any increase in the rates of Tax after the Completion Date withretrospective effect;

 

1.3           such liability arises or is increased asa result of any change in law (primary or delegated), any accounting practiceor principle or the published practice of a Tax Authority occurring after theCompletion Date (but not announced before that date) in each case withretrospective effect;

 

1.4           such liability arises or is increased asa result of any voluntary act, transaction or omission of a Target Group memberor the Purchaser after Completion otherwise than in the ordinary course ofbusiness of a Target Group member as carried on at Completion which thePurchaser or, as appropriate, a Target Group member, knew or ought reasonablyto have known would give rise to or increase the liability in question;

 

1.5           the liability would not have arisen orwould have been reduced or eliminated but for a failure or omission afterCompletion on the part of any Target Group member or the Purchaser to make anyclaim, election, surrender or disclaimer or to give any notice or consent or todo any other thing under an enactment or regulation relating to Tax, themaking, giving or doing of which was taken into account in computing theprovision for Tax in the Accounts or in a written notice given to the Purchasernot less than 30 days before the final date upon which the claim, election,surrender, disclaimer, notice consent or other thing in question may be madegiven or done;

 

1.6           the liability arises or is increased asa result of either a Target Group member or the Purchaser failing to act inaccordance with the provisions of paragraph 4 of this part of this schedule;

 

1.7           the liability arises or is increased asa result of any change after Completion in the bases, methods or policies ofaccounting of the Purchaser or a Target Group member save where such change ismade to comply with generally accepted accounting principles, the publishedpractice of any Tax Authority, law or rule of any regulatory authority or bodyin force at the Completion Date;

 

1.8           such liability arises as a result of:

 

1.8.1        any voluntary disclaimer by any TargetGroup member after Completion of the whole or part of any capital allowancesclaimed before Completion the entitlement to which was taken into account inpreparing the Accounts;

 

1.8.2        the revocation or revision by any TargetGroup member of any Relief claimed or the entitlement to which was taken intoaccount in the preparation of the Accounts;

 

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1.9           any Relief, other than a Post CompletionRelief, is available to any Target Group member (including by way ofgroup relief from another company) to relieve or mitigate that Tax Liability;or

 

1.10         the liability has been satisfied(otherwise than by the Purchaser or any member of the Purchaser’s Group) at nocost to any Target Group member.

 

2.             The Vendor shall not be liable inrespect of any breach of the Tax Warranties if, and to the extent that, theloss incurred is or has been included in any claim under the Tax Covenant whichhas been satisfied in full and in cleared funds nor shall the Vendor be liablein respect of a claim under the Tax Covenant if, and to the extent that, theamount claimed is or has been included in a claim for breach of the TaxWarranties which has been satisfied in full.

 

3.             **DURATION AND EXTENT**

 

The provisions of schedule 9 to theagreement shall apply in respect of any Tax Claim to the extent expresslyprovided therein.

 

4.             **CONDUCT OF CLAIMS**

 

4.1           If the Purchaser or any TargetGroup member become aware of any Claim for Tax which gives or may give rise toa Tax Claim, the Purchaser shall, or shall procure that a TargetGroup member shall, as soon as is reasonably practicable (and in any event, inthe case of the receipt of a Claim for Tax consisting of any assessment ordemand for Tax for which the time for response or appeal is limited, not lessthan five clear Business Days prior to the day on which the time for response orappeal expires) give written notice of the Claim for Tax to the Vendor.

 

4.2           If the Vendor in writing reasonablyrequires, the Purchaser shall, or shall procure that a Target Group member shall,supply the Vendor with such available and relevant details, documentation,correspondence and information and shall take such action as the Vendor mayreasonably request in writing to negotiate, avoid, dispute, resist, compromise,defend or appeal against the Claim for Tax and any adjudication in respect ofthe Claim for Tax provided that the Vendor shall first indemnify and secure therelevant Target Group member and the Purchaser to the reasonable satisfactionof the Purchaser against all reasonable costs and expenses which may beincurred in relation to the same.

 

4.3           The Vendor shall have the right to haveany action mentioned in paragraph 4.2 conducted by their nominated professionaladvisers provided that:

 

4.3.1        the appointment of such professionaladvisers shall be subject to the approval of the Purchaser (such approval notto be unreasonably withheld or delayed and shall be deemed to be given in theevent that the Purchaser does not within 15 days of request give a fullyreasoned, written response to a request for approval by the Vendor);

 

4.3.2        the Vendor shall procure that thePurchaser is kept fully informed of the progress of the relevant action andprovided with copies of all relevant correspondence anddocuments sent by and to the Vendor and their professional advisers; and

 

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4.3.3        the Vendor shall procure that any reasonablecomments made by the Purchaser in relation to the relevant action are adoptedby the Vendor and their professional advisers.

 

4.4           If the Vendor does not request the Purchaser or any Target Group member to take action pursuant to paragraph 4.2 of this schedule 3part 4 or if the Vendor fails to indemnify the Purchaser or the Target Group member concerned as provided in that paragraph within fourteen days of thesaid written notice to the Vendor, the Purchaser or the relevant Target Group member shall be free to pay or settle the Claim for Tax on such terms asit may in its absolute discretion think fit.

 

4.5           If it is alleged by any Tax Authority in writing that anyVendor (at any time) or any Target Group member (prior to Completion) hascommitted any act or omission constituting fraudulent conduct relating to Taxparagraph 4.3 of this schedule 3 part 4 shall not apply and the Vendorshall cease to have any right under that paragraph.

 

4.6           The Purchaser shall not be obliged to take or procure the taking of the followingaction pursuant to paragraph 4.2 of this schedule 3 part 4:

 

4.6.1        agreeing to the settlement or compromise of any Claim for Tax or anyproposal for the same which is likely to affect the amount involved or futureliability to Tax of the Purchaser or any Target Group member unless the Vendorindemnifies and secures the Purchaser or the relevant Target Group member to the Purchaser’sreasonable satisfaction against any such future liability to Tax;

 

4.6.2        contesting any Claim for Tax before anycourt or other appellate body (excluding the General Commissioners of InlandRevenue, the Special Commissioners of Inland Revenue or the Value Added TaxTribunal in the UK and any equivalent of any such body outside the UK) unlessat the sole expense of the Vendor, the Vendor obtains the written opinion ofTax counsel of at least 10 years call after disclosure of all relevantinformation and documents having regard to all thecircumstances that on the balance of probabilities the actions will succeed;

 

4.6.3        complying with any unreasonable instruction of the Vendor or totaking any action or procuring the taking of any action which it actingreasonably considers may be onerous or prejudicial to the Purchaser or to anyTarget Group member;

 

4.6.4        any action whatsoever requested by any agent or representative ofthe Vendor (other than the professional advisors appointed in accordance withparagraph 4.3 of this schedule 3 part 4) including, without limitation,any receiver, administrator or trustee in bankruptcy.

 

5.             **DATE FOR PAYMENT**

 

5.1           Where a Tax Claim involves the Purchaseror a Target Group member being under a liability to make a payment to anyTax Authority, the Vendor shall pay to the Purchaser in cleared funds therelevant amount on or before the later of the fifth Business Day after demandis made for the amount in question and the fifth Business Day before the dateon which the amount in question is finally payable to the relevant TaxAuthority without any interest, penalty, fine or surcharge arising in respectof it.  In the case of a Tax Claiminvolving the set-off of a Post Completion Relief, the later

 

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of ten Business Days following theservice by the Purchaser of a written demand for the same or the date on whichthe Actual Tax Liability would have fallen due but for such setting off.

 

5.2           Wherethe Vendor is liable to make any payment under the Tax Covenant or under anyother Tax Claim the date for the payment of which is not determined underparagraph 5.1 of this schedule 3 part 4, the Vendor shall pay to thePurchaser theamount in question on the fifth Business Day after demand is made for suchamount to be paid.

 

5.3           Any sum not paid on a date determinedunder this schedule (**“the due date”**)shall bear interest (which shall accrue from day to day after, as well asbefore, any judgment for the same) at the rate of 2% per annum over the baserate of Barclays Bank PLC or, in the absence of such base rate, at such similarrate as the person entitled to the payment shall select from the due date up toand including the day of actual payment of such sum (or the next Business Dayif the date of actual payment is not a Business Day) compounded quarterly.  Such interest shall be paid on demand.

 

6.             **TAX AFFAIRS**

 

6.1           The Vendor or its duly authorised agentsor advisers shall, at the reasonable expense of a Target Group member prepare,submit and agree the corporation tax computations and returns of the relevantTarget Group member (**“Tax Computations”**)for its accounting period(s) (within the meaning of section 12 of theTaxes Act) ended on or before 31 December 2004 (**“RelevantAccounting Period(s)”**).

 

6.2           The Vendor shall deliver to the Purchaserfor comments any Tax Computations return document or correspondence and detailsof any information or proposal (**“Relevant Information”**)which it intends to submit to the Inland Revenue before submission to theInland Revenue and subject to paragraph 6.3 shall take account of thereasonable comments of the Purchaser and make such amendments to the RelevantInformation as the Purchaser may reasonably require in writing within 30 daysof the date of delivery of the Relevant Information prior to its submission tothe Inland Revenue.

 

6.3           The Vendor shall not, and shall procurethat no other person shall, submit to the Inland Revenue any RelevantInformation or agree any matter with the Inland Revenue where the Purchaser hasnotified the Vendor in writing within 30 days of the receipt of the RelevantInformation or proposal for agreement that such Relevant Information or matteris not true, accurate and lawful in all respects.

 

6.4           The Vendor shall deliver to thePurchaser copies of any material correspondence sent to, or received from, theInland Revenue relating to the Tax Computations and returns and shall keep thePurchaser informed of its actions under this paragraph.

 

6.5           Subject to paragraphs 6.2 to 6.4, thePurchaser shall or shall procure that:

 

6.5.1        each Target Group member properlyauthorises and signs the Tax Computations and makes and signs or otherwiseenters into all such elections, surrenders and claims and withdraws ordisclaims such elections, surrenders and claims and gives such notices andsigns such other documents as the Vendor shall reasonably require in relationto the Relevant Accounting Period(s) provided that thePurchaser shall not be obliged to procure that any Target Group member makes any election, claim or surrender or provides any

 

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noticeor withdraws or amends any election, claim, surrender or notice unless suchmaking, provision, withdrawal or amendment was taken into account in theaccounts for the period to which such action relates.

 

6.5.2        each Target Group member provides to theVendor such information and assistance, including without limitation suchaccess to its books, accounts and records which may reasonably be required toprepare, submit, negotiate and agree the Tax Computations.

 

6.5.3        any correspondence which relates to theTax Computations shall, if received by the Purchaser or any TargetGroup member or their agents or advisers, be properly copied to the Vendor.

 

6.6           In respect of any matter which gives ormay give the Purchaser a right to make a Tax Claim, the provisions of paragraph4 with respect to appeals and the conduct of disputes shall apply instead ofthe provisions of this paragraph 6.

 

6.7           The Vendor shall use all reasonableendeavours to agree the Tax Computations as soon as reasonably practicable andshall deal with all such matters promptly and diligently and within applicabletime limits.

 

7.             **GROUP RELIEF**

 

7.1           If the Vendor is liable to make anypayment to the Purchaser under this schedule, and such liability arises inrelation to a Tax Liability which is capable of being mitigated or eliminatedby the surrender of group relief, the Vendor shall be entitled to or to procurethe surrender of group relief to any Target Group member.  Such surrender shall be made for noconsideration and shall discharge the relevant liability of the Vendor underthis schedule.

 

7.2           If any Target Group member holds anyRelief in respect of the period on or before Completion which is capable ofbeing surrendered as group relief to the Vendor or any company nominated by theVendor, the Vendor shall be entitled to request such surrender to be made forno consideration.

 

7.3           The Purchaser shall procure that allrelevant claims, elections and surrenders and all other actions are taken asare required to effect the surrender and utilisation of the group reliefreferred to in this paragraph 7.

 

8.             **VAT GROUP**

 

8.1           The Vendor shall procure that theRepresentative Member shall as soon as reasonably practicable apply to theCommissioners of HM Customs and Excise to exclude any Target Group member fromthe VAT Group and the Vendor shall use its reasonable endeavours to ensure theexclusion of any Target Group member from the VAT Group as soon as reasonablypracticable but in any event no later than the Completion Date.

 

8.2           The Purchaser undertakes to procure thateach Target Group member:

 

8.2.1        provides to the Representative Membersuch documents, information and assistance as it may reasonably require inwriting to enable it to comply with its obligations in the making of VATreturns and accounting for VAT to HM Customs & Excise in respect ofsupplies or acquisitions made by the Target

 

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Group member for VAT purposes in the prescribedaccounting period (as defined in section 25(1) of the VATA 1994) currentat the Completion Date, and in the event that any Target Group member’sexclusion from the VAT Group takes effect after the end of that prescribedaccounting period, in respect of supplies or acquisitions made by any TargetGroup member in the next and any subsequent prescribed accounting period (**“Relevant PAPs”**) in each case which are,for the purposes of section 43 of the VATA, treated as made by theRepresentative Member; and

 

8.2.2        pays to the Representative Member notless than two Business Days before the same is required to be paid to HMCustoms and Excise an amount equal to any VAT for which the RepresentativeMember has to account (or would have to account but for any input tax credit orrepayment of VAT due from HM Customs & Excise in respect of actual suppliesmade to the members of the VAT Group other than any Target Group member) to HMCustoms & Excise in respect of the Relevant PAPs and which results fromsupplies, deemed supplies, importations or acquisitions made by any TargetGroup member in the Relevant PAPs but treated as made by the RepresentativeMember under section 43(1) of the VATA and in computing such amount ofVAT, credit shall be given to any Target Group member for anyinput tax on supplies, deemed supplies made to, or importations or acquisitionsmade by any Target Group member in the Relevant PAPs to which it is entitled underthe VATA.

 

8.3           The Vendor shall procure that theRepresentative Member will properly and promptly comply with its obligations toaccount to HM Customs & Excise for any amount in respect of VAT paid by any TargetGroup member pursuant to paragraph 8.2.2 and provide to the Purchaser as soonas possible copies of the relevant VAT returns and any relevant correspondenceor document sent to or received from HM Customs & Excise in connection withany matter referred to in that paragraph.

 

8.4           The Vendor undertakes to procure theRepresentative Member to claim as soon as possible and to pay to a specifiedTarget Group member an amount equal to any VAT which the Representative Memberrecovers (or would recover but for any payment due to HM Customs & Excisein respect of actual supplies made by the members of the VAT Group other thanany Target Group member) from HM Customs & Excise in respect of RelevantPAPs and which results from supplies or deemed supplies made to, orimportations or acquisitions made by any Target Group member in the RelevantPAPS but treated as made to the Representative Member under section 43(1)of the VATA.

 

**9.****           ****CORRESPONDING BENEFIT**

 

9.1           If on or before the seventh anniversaryof the Completion Date, a payment by the Vendor in respect of any Tax Liabilityunder a Tax Claim or the matter giving rise to the Tax Liability in questionresults in any Target Group member or the Purchaser receiving or becomingentitled to any Relief which they utilise (including by way of repayment ofTax) (**“Corresponding Relief”**), then an amountequal to or the Tax saved by the Corresponding Relief at the date suchCorresponding Relief is utilised (**“Relevant Amount”**),shall be dealt with in accordance with paragraph 9.2.

 

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9.2           The Relevant Amount:

 

9.2.1        shall first be set off against anypayment then due from the Vendor under a Tax Claim;

 

9.2.2        to the extent there is an excess of theRelevant Amount after any application of the same under paragraph 9.2.1, arefund shall be made to the Vendor of any previous payment or payments made bythe Vendor under a Tax Claim and not previously refunded under this paragraph9.2.2 up to the amount of such excess; and

 

9.2.3        to the extent that the excess referredto in paragraph 9.2.2 is not exhausted under that paragraph, the remainder ofthat excess shall be carried forward and set off against any future payment orpayments which become due from the Vendor under a Tax Claim.

 

9.3           If the Purchaser or any TargetGroup member become aware of any circumstances which shall or may give rise tothe application of paragraph 9.1, the Purchaser shall or shall procure that therelevant Target Group member shall as soon as reasonably practicablegive written notice of the same to the Vendor.

 

9.4           The Vendor may at the Vendor’s expenserequire the auditors for the time being of the Target Group members to certifythe existence and quantum of any Relevant Amount and the date on which theCorresponding Relief is utilised and, in the absence of manifest error, theirdecision shall be final and binding.

 

10.           **THIRD PARTY CLAIMS**

 

10.1         If any Target Group member or thePurchaser are before the seventh anniversary of the Completion Date entitled torecover from another person or a Tax Authority a sum in respect of any matteror Tax Liability to which a Tax Claim relates and which has been satisfied bythe Vendor in cleared funds the Purchaser shall forthwith give written noticeof the same to the Vendor and if the Vendor indemnifies the Purchaser or, asappropriate, the relevant Target Group member (to the Purchaser’s reasonablesatisfaction) against the reasonable costs of the Purchaser or, as appropriate,the relevant Target Group member in connection with taking the followingaction, the Purchaser shall, or shall procure that the relevant Target Groupmember shall, take such action as is reasonably requested by the Vendor toenforce recovery against that person or Tax Authority.

 

10.2         In the event that the Purchaser or anyTarget Group member recovers any sum referred to in paragraph 10.1 (whetherafter taking any action at the request of the Vendor under that paragraph orotherwise), the Purchaser shall, as soon as reasonably practicable, account tothe Vendor for the lesser of:

 

10.2.1      the sum recovered net of any Tax on thesum and the costs and expenses of recovering the same; and

 

10.2.2      any amount paid by the Vendor in respectof the matter giving rise to the relevant Tax Claim.

 

**11.****         ****MISCELLANEOUS**

 

Any payment to the Purchaser or any Target Group member under any Tax Claim shall be deemed tobe a reduction of the total consideration payable hereunder for the Shares.

 

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**12.****         ****COVENANT BYTHE PURCHASER**

 

12.1         The Purchaser and each Target Groupmember jointly and severally covenant with the Vendor to pay to the Vendor anamount equal to any of the following:

 

12.1.1      any liability or increased liability toTax of the Vendor or any member of the Vendor’s Group which arises as a resultof or in connection with any reduction or disallowance of group relief thatwould otherwise have been available to the relevant member of the Vendor’sGroup where and to the extent that such reduction or disallowance arises inconnection with:

 

12.1.1.1     any total or partial withdrawal of grouprelief by any Target Group member after Completion where such group relief wassurrendered or agreed to be surrendered on or before Completion in respect ofan accounting period ended on or before Completion; or

 

12.1.1.2     any total or partial disclaimer ofcapital allowances by any Target Group member after Completionwhere such capital allowances were available to any Target Group member inrespect of any accounting period ended on or before Completion;

 

12.1.2      any liability or increased liability toTax of the Vendor or any member of the Vendor’s Group or any person connectedwith the Vendor arising under or by reference to section 767A or section 767AAof the Taxes Act, section 179, 190 or 191 of the TCGA or section 132of the Finance Act 1988, paragraph 68 of schedule 29 to the Finance Act2002, paragraph 8 of schedule 34 to the Finance Act 2002, paragraph 9 of schedule 35to the FA 2002, or paragraphs 1 or 2 of schedule 39 to the Finance Act2002 by virtue of the non-payment of Tax by any Target Group member save thatthis paragraph 12.1.2 shall not apply in respect of any Tax for which theVendor is liable to make (but has not yet made) payment to the Purchaser underthis schedule;

 

12.1.3      any liability or increased liability toTax of the Vendor or any member of the Vendor’s Group arising in connectionwith any of the following events occurring or being deemed to occur at any timeafter Completion:

 

12.1.3.1     the disposal by anyTarget Groupmember of any asset or of any interest on or right over any asset;

 

12.1.3.2     the making by any Target Group member ofany such payment or deemed payment as constitutes a chargeable payment for thepurposes of section 214 of the Taxes Act;

 

12.1.3.3     any Target Group member ceasing to beresident in the United Kingdom for the purposes of any Tax; or

 

12.1.3.4     the effecting by any Target Group memberof any such payment or transfer of assets as constitutes the receipt by anotherperson of any abnormal amount by way of a dividend (as defined in section 709of the Taxes Act);

 

12.1.4      the reasonable costs and expenses of theVendor or any member of the Vendor’s Group in connection with any liabilityreferred to or in taking any action under this paragraph.

 

12.2         For the purposes of this paragraph, anyreference to a liability to Tax shall include any liability to make a paymentof Tax which would have arisen but for the utilisation of any Relief.

 

12.3         Paragraphs 4 and 5 of this part 4 ofthis schedule shall apply to this paragraph 12

 

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(with all necessary changes) as if: (a) (except in paragraph 4.3)references to the Vendor were references to the Purchaser and vice versa; and(b) references to any Target Group member inthe definition of Claim for Tax were references to the Vendor or any member ofthe Vendor’s Group.

 

**13.****         ****PURCHASERUNDERTAKING**

 

The Purchaser acknowledges that the Vendor expects that any liabilityto corporation tax on chargeable gains arising from the disposal of any Target Group member will be exempted from tax under the provisions of section 192Aof the TCGA.  The Purchaser is not awareof any reason why any Target Group member would not meet thecondition in paragraph 19 (1) (b) of schedule 7AC of the TCGA (thecondition that any Target Group member be a “qualifyingcompany” immediately after the time of the disposal).

 

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**SCHEDULE 4**

** **

**Part 1**

** **

**Signing**

** **

1.             TheVendor shall deliver to the Purchaser a copy of the minutes of a meeting of thedirectors of the Vendor authorising, inter alia, the execution by the Vendor ofthis agreement and the Disclosure Letter and the approval of all the agreedform documents.

 

2.             ThePurchaser shall deliver to the Vendor a copy of the minutes of a meeting of thedirectors of the Purchaser authorising, inter alia, the execution by thePurchaser of this agreement and counter signature of the Disclosure Letter andthe approval of all the agreed form documents.

 

3.             TheVendor and the Purchaser shall sign the US Escrow Letter and the Purchasershall procure that Ergo Science Development Corporation and Ergo ResearchCorporation,  also sign the US EscrowLetter.

 

**Part 2**

** **

**Completion**

** **

4.             The Vendor shall produce evidence of the satisfaction of theCondition.

 

5.             TheVendor shall procure that at or before Completion, the Companies and theSubsidiaries are released from any guarantees, security interests andindemnities given by them in favour of the Vendor or any member of the Vendor’sGroup.

 

6.             TheVendor shall deliver or procure to be delivered to the Purchaser:

 

6.1           dulyexecuted transfers of the Shares in favour of the Purchaser or its nominee(s)together with duly executed powers of attorney or other authorities pursuant towhich any transfers have been executed;

 

6.2           therelevant share certificates in respect of the Shares (or an express indemnityin a form reasonably satisfactory to the Purchaser in the event of any found tobe missing);

 

6.3           thepowers of attorney referred to in clause 15.2 executed on behalf of theShareholders;

 

6.4           writtenresignations of Mark Simpson and Owen Davies as directors of and HafeezAnjarwalla as the secretary of any of the Companies and the Subsidiaries ofwhich they are respectively directors or the secretary, in each case in a formacceptable to the Purchaser (acting reasonably) and containing a waiver of alland any claims against the Company or Subsidiary in question;

 

6.5           ifrequested by the Purchaser no later than 14 days before the Completion Date thewritten resignation of the auditors of the Companies and the Subsidiaries;

 

6.6           allcertificates of incorporation and certificates of incorporation on change ofname for the Companies and the Subsidiaries;

 

6.7           thecommon seal and statutory books (including minute books) of the Companies and

 

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theSubsidiaries made up to the Completion Date;

 

6.8           sharecertificates in respect of all the issued shares of the Subsidiaries held bythe Companies;

 

6.9           copiesof all bank mandates given by any Target Group member and/or the Subsidiaries;

 

6.10         a dulyexecuted deed or deeds of release from Barclays Bank plc in a form acceptableto the Purchaser (acting reasonably) evidencing the release and discharge ofall guarantees and charges of the Companies and/or the Subsidiaries to suchbank including any charges over the shares of the Companies and theSubsidiaries;

 

6.11         thetitle deeds and other documents of title to the Properties subject to part 2 ofschedule 6;

 

6.12         the Deedof Indemnity, duly executed and delivered by the parties thereto immediatelyprior to Completion.

 

7.             TheVendor shall procure that meetings of the boards of directors of the Companiesand the Subsidiaries are convened and held at which resolutions are dulypassed, inter alia:

 

7.1           acceptingthe resignations referred to in paragraph 5.4 above;

 

7.2           appointingto the board of directors of each of the Companies and the Subsidiaries suchpersons as the Purchaser shall have notified to the Vendor in writing prior toCompletion;

 

7.3           approvingthe transfers of the Shares (subject to stamping); and

 

7.4           alteringthe bank mandates referred to in paragraph 5.9 to reflect the resignations andappointments referred to above.

 

8.             ThePurchaser shall:

 

8.1           payto the Vendor’s Solicitors by transfer of funds the amount referred to inclause 5.2.1 in respect of the consideration payable at Completion inaccordance with that clause and the Vendor’s Solicitors’ receipt shall be asufficient discharge for such sums and the Purchaser shall not be concerned tosee to the application thereof;

 

8.2           payto the Retention Account by transfer of funds the amount referred to in clause5.2.2 in accordance with that clause; and

 

8.3           procurethe repayment by the Target Group of the Intercompany Balance. Such amountshall be paid to the Vendor’s Solicitors whose receipt shall be sufficientdischarge for such sum and the Purchaser shall not be concerned to see to theapplication thereof.

 

9.             ThePurchaser and the Vendor shall each execute and deliver to the Vendor’sSolicitors and the Purchaser’s Solicitors the Irrevocable Letter ofInstruction.

 

10.           ThePurchaser and Vendor shall give instructions to Voyageur Asset Management (MA)Inc to release it from its obligations under the US Escrow Letter.

 

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**SCHEDULE 5**

** **

**Operation of the Companies pending Completion**

** **

The Vendor covenants with the Purchaser that, in the period from thedate of this agreement to Completion, it shall procure that each of theCompanies and the Subsidiaries shall (unless the Purchaser otherwise agrees inwriting such agreement not to be unreasonably withheld or delayed and for thesepurposes the Purchaser hereby specifically agrees to the Vendor taking suchactions or making such omissions as may be (i) required for it to comply withits obligations pursuant to schedule 14 or (ii) expressly permittedpursuant to schedule 14):

 

1.             notdispose of or agree to dispose of or acquire or agree to acquire any assets orstock (other than in the normal course of business consistent with past customand practice and other than the Jordan House Property and the Anne Boleyn HouseProperty and the assets located thereat) or assume or incur or agree to assumeor incur a liability, (actual or contingent) except in the usual course of itsbusiness consistent with past custom and practice;

 

2.             notmerge or amalgamate or agree to merge or amalgamate its business with any othercompany;

 

3.             notenter into any scheme or arrangement with creditors;

 

4.             notenter into any contract, transaction or arrangement with any member of theVendor’s Group;

 

5.             notpass any shareholders’ resolution or alter the provisions of its memorandum orarticles of association;

 

6.             notcreate, allot, issue, acquire, redeem or repay any share or loan capital oragree, arrange or undertake to do any of those things or acquire or agree to acquireshares or any other interest in any other company;

 

7.             notenter into or terminate or amend any Material Contract (other than agreementsto replace the services provided by Wyvern);

 

8.             notengage in any transaction except on an arm’s-length basis in the ordinarycourse of business consistent with past custom and practice or engage in anybusiness other than as currently being conducted;

 

9.             notincrease or agree to increase the remuneration (including, without limitation,salary, bonuses, commissions, profits in kind and pension contributions) of anyof its directors or employees or vary the terms of employment of or dismiss anyemployee (other than for gross misconduct justifying summary dismissal) orengage any new employee or agree to provide any gratuitous payment or benefitto any person;

 

10.           notamend or discontinue the Disclosed Schemes or communicate to any employee anyplan, proposal or intention to amend, discontinue or exercise any discretion inrelation to any such schemes;

 

11.           notalter or agree to alter the terms of any existing borrowing facilities orarrange additional borrowing facilities;

 

12.           notcreate or agree to create any Encumbrance over any of its assets or make anyloans or enter into any guarantee for the obligations of any third party otherthan of the Vendor Group which are to be discharged in accordance withparagraph 5 of schedule 4;

 

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13.           notgrant any credit except normal trade credit given in the ordinary course of businessconsistent with past custom and practice;

 

14.           notdeclare, make or pay any dividend or other distribution or repay any financialindebtedness to any member of the Vendor’s Group;

 

15.           notchange its accounting reference date or make any change to accountingprocedures or principles by reference to which its accounts are drawn up(except as may be required by law or by any financial reporting standards,statements of standard accounting practice and generally accepted accountingprinciples and practice in the United Kingdom);

 

16.           notenter into any litigation or arbitration proceedings;

 

17.           exceptin the usual course of its business, not compromise, settle, release, dischargeor compound litigation or arbitration proceedings or a liability, claim, action,demand or dispute, or waive a right in relation to litigation or arbitrationproceedings;

 

18.           notcancel or fail to renew by the due date, or do or omit to anything which isreasonably likely to result in the vitiation or cancellation of, the insurancepolicies in force at the date of this agreement;

 

19.           notmake capital commitments with an aggregate contract value of £150,000 or more;

 

20.           notreorganise or reduce its share capital or purchase of its own shares;

 

21.           notsubmit any corporation tax return or submit any claim or election for thepurposes of any taxation, save where required by the 1985 Act, the 1989 Act,the Taxes Act or CAA 1990, CAA 2001 or Schedule 18 FA 1998, but in eachcase after consultation with, and taking into account any reasonablerepresentations of, the Purchaser;

 

22.           notagree conditionally or otherwise, to do any of the above activities;

 

23.           procurethat the business and assets of each of the Target Group members are operatedin the ordinary and usual course so as to maintain the same as a going concern(including using all reasonable endeavours to (i) maintain in full force andeffect any material permit, licence or authorisation which is reasonablyrequired to conduct the business of the Target Group as currently beingconducted, (ii) maintain working conditions and relationships with customers,suppliers and employees as presently maintained and (iii) manage the payment ofits creditors in such a way that the relationship of the Target Group with suchcreditors will not be prejudiced in any material way);

 

24.           procurethat the Purchaser is notified as soon as reasonably practicable of any writtennotice, demand, citation or other communication received by any Target Groupmember and/or the Vendor from any third party (including any governmental ortax authority), in each case which is material to the operation of suchcompany;

 

25.           provideto the Purchaser management accounts for each of the Target Group members foreach calendar month between the date hereof and Completion, prepared on a basisand in a form consistent with the preparation of the Management Accounts, assoon as reasonably possible after such accounts become available;

 

26.           procurethat the registered holders of the Shares or the Companies (as the case may be)will not dispose of any interest in or otherwise grant an Encumbrance inrespect of any of the Shares or the shares held by the Companies in theSubsidiaries;

 

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27.           assoon as reasonably possible disclose in writing to the Purchaser any event orcircumstance which becomes known to it which would be a breach of paragraph 23above or a breach of any of the Warranties. Any such disclosure shall not prejudice or otherwise affect thePurchaser’s rights and remedies hereunder with respect to any such breach; and

 

28.           atthe Purchaser’s reasonable request, procure that representatives of thePurchaser (including its professional advisers) shall be allowed access to theProperties, the Specified Individuals and the books and records of each TargetGroup company; provided, however that any such access (i) shall be limited tono more than two representatives of the Purchaser at any one time; (ii) shallbe during normal business hours and upon reasonable notice; and (iii) shall notinterfere in any material respect with the normal operations of any TargetGroup member.

 

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**SCHEDULE 6**

** **

**The Properties**

** **

**Part 1**

** **

**Detailsof the Properties**

** **

1.             Media House, Azalea Drive, Swanley, Kent BR8 8HY registered withfreehold title number K782781. Registered proprietor is Nexus MediaCommunications Limited.

 

2.             Garage 11 Edwards Gardens, Swanley, Kent registered with leaseholdtitle number K784987. Registered proprietor is Nexus Media CommunicationsLimited.

 

3.             Carrington Business Park, Manchester Road, Carrington, Urmston M314YR. Licence held by Highbury House Communications plc

 

4.             122 High Street, Earl Shilton, Leicester. Licence held by HighburyNexus Media Limited.

 

5.             Building 17, Dunsfold Park, Cranleigh, Surrey. Unregistered lease infavour of The International Wine and Spirit Competition Limited.

 

6.             Nehrkornweg 1, 38104, Branschweig, Germany.  Licence held by Highbury Columbus TravelPublishing Limited.

 

**Part 2**

** **

**Title Deeds and other documents of title to the Properties**

** **

The original deeds and documents for Media Housecannot be found. The Purchaser shall be satisfied with a copy of such documentsand shall not make any objection or requisition founded on the loss or non-productionof such documents.

 

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**SCHEDULE 7**

** **

**Disclosed Schemes**

** **

1.     The HighburyColumbus Travel Publishing Limited Personal Pension Plan;

 

2.     TheInternational Wine and Spirit Competition Limited Personal Pension Scheme; and

 

3.     The NexusGroup Pension Scheme.

 

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**SCHEDULE 8**

** **

**WorkingCapital Statements**

** **

1.             For the purposes of this agreement:

 

1.1           “**Working Capital**” atany date means Current Assets at such date less Current Liabilities atsuch date;

 

1.2           “**Current Assets**” meansall amounts owed to any Target Group member that fall due for payment within twelve months after the Completion Date excluding any inter-company debtbut including prepayments and accrued income (and for the avoidance of doubtCurrent Assets will not include cash or cash equivalents);

 

1.3           “**Current Liabilities**”means all amounts owed by any Target Group member that fall due for paymentwithin twelve months after the Completion Date plus all accruals and deferredincome over twelve months but excluding tax, all inter-company debt and Borrowings;

 

Providedthat no amount shall be taken into account either as a contingent liability orasset in respect of the insurance claim and adjustment relating to the SARSExhibition referred to in the Disclosure Letter.

 

2.             Within 45 Business Days after Completion, the Purchaser shallprepare and deliver to the Vendor a draft completion statement for the combinedTarget Group as at the Completion Date (the “**DraftCompletion Statement**”), setting out the Events Working Capital andthe Publishing Working Capital as at the close of business on the CompletionDate.  The Vendor will give allreasonable assistance in the preparation of the Draft Completion Statement.

 

3.             The Draft Completion Statement shall be prepared (i) in accordancewith principles and practices generally accepted in the United Kingdom and (ii)(subject to (i) above which shall in any event prevail) using the sameaccounting principles, policies and practices used in the Accounts, and inaccordance with the law and applicable standards.  If trade creditors cannot be reasonablyidentified as pertaining either to the Events Business or the PublishingBusiness they shall be allocated in the proportions of 28.5% to the EventsBusiness and 71.5% to the Publishing Business.

 

4.             If the Vendor has any objections to the Draft Completion Statement,it shall deliver a statement describing such objections to the Purchaser within20 Business Days after the date of receipt by the Vendor of the DraftCompletion Statement.  If the Vendor doesnot object to the Draft Completion Statement within such period, the DraftCompletion Statement shall become the Final Completion Statement and shall beconclusive and binding on the parties in the absence of fraud or manifesterror.  The parties shall use theirreasonable endeavours to resolve any objections raised by the Vendor.  If the parties do not obtain a finalresolution within 20 Business Days after the Purchaser has received thestatement of objections, then either party may refer the dispute to theIndependent Accountant for determination. The Independent Accountant shall provide its written determination assoon as reasonably practicable but in any event within 30 Business Days afterits appointment (or such other period of time as the Independent Accountant andthe parties may agree), which determination will be conclusive and binding onthe parties in the absence of fraud or manifest error.  The costs and expenses of the IndependentAccountant shall be borne 50% by the Vendor and 50% by the Purchaser.  The parties will revise the Draft Completion

 

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Statementas appropriate to reflect the resolution of any objections thereto pursuant tothis paragraph 4.

 

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**SCHEDULE 9**

** **

**Limitations on the Vendor’s liability**

** **

**1.****             ACKNOWLEDGEMENT**

 

The Purchaser confirms that, save to the extentexpressly stated otherwise in this agreement, the provisions of this schedule shallapply despite (and prevail over) any other provision of this agreement(including the Tax Covenant) and are in addition to and without prejudice tothe Purchaser’s general legal obligation to mitigate any loss or damage it maysuffer.

 

**2.****             DISCLOSURE**

 

The Purchaser shall not be entitled to make aWarranty Claimif and to the extent that the facts or information upon which it is based areFairly Disclosed in the Disclosure Letter.

 

**3.****             DURATION AND EXTENT**

 

3.1           The aggregate liability of the Vendor in respect of all Claims shallnot exceed the sum of the Final Consideration and the Intercompany Balance.

 

3.2           No amount shall be payable by the Vendor in respect of any Claim(other than any Specified Claim);

 

3.2.1        unless the amount of the liability in respect of each such Claim (orseries of related Claims) exceeds £10,000 (“de minimis”); and

 

3.2.2        unless and until the aggregate cumulative liability of the Vendor inrespect of all such Claims exceeds £250,000 and in such circumstances it shallbe liable for the full amount of all Claims (excluding all Claims for which theVendor has no liability by reason of paragraph 3.2.1).

 

3.3           The Vendor shall not be liable for any Share Warranty Claim unlessthe Vendor is given a Claim Notice by the Purchaser prior to the date falling18 months after the Completion Date (provided, however that there shall be notime limit in relation to any Claim under clause 2 or any of paragraphs 1.1 and1.3 of schedule 2 part 1) and unless legal proceedings shall have beenserved in respect of any such Claim within nine months of the Vendor beingnotified of any such Claim by the Purchaser.

 

3.4           The Vendor shall not be liable for any Tax Claim unless the Vendoris given a Claim Notice by the Purchaser prior to the seventh anniversary ofthe Completion Date and unless legal proceedings shall have been served inrespect of any such Tax Claim within nine months of the Vendor being notifiedof any such Tax Claim.

 

4.             **LIMITATIONS**

 

The Vendor shall not be liable under any of theWarranties or any other provision of this agreement (excluding the Tax Covenantand the Tax Warranties):

 

4.1           to the extent that provision, reserve or allowance has been made inthe Final Completion Statement in respect thereof or to the extent that paymentor discharge thereof has been taken into account therein; or

 

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4.2           to the extent that such liability arises or is increased as a resultof any change or changes in legislation (primary or delegated) includingwithout limitation any increase in rates of taxation or the introduction of anychanges or new form of taxation or in the practice of the Inland Revenue or HMCustoms & Excise or any other relevant authority (in the United Kingdom orelsewhere) occurring after the date of this agreement whether or not withretrospective effect; or

 

4.3           to the extent that such liability occurs or arises as a result ofany voluntary act, transaction or omission of the Companies or the Subsidiariesor the Purchaser or their respective directors, employees or agents afterCompletion which the Purchaser or as appropriate, the Target Group member knewor ought reasonably to have known would give rise to the liability in question,other than any voluntary act, transaction or omission in the ordinary course ofbusiness or under a legally binding obligation entered into or which arose onor before Completion; or

 

4.4           to the extent that any Claim by the Purchaser or the subject matterthereof has been or is made good or is otherwise compensated for (otherwisethan by the Purchaser or any member of the Purchaser’s Group), at no cost tothe Purchaser’s Group; or

 

4.5           notwithstanding paragraph 6.4 to the extent that the matter to whichit relates is recovered by the Companies or the Subsidiaries from insurers andthe Purchaser agrees (and agrees to procure that the Companies and theSubsidiaries will) use all reasonable endeavours to recover from theirrespective insurers in respect of any matters giving rise to a claim; or

 

4.6           to the extent that such liability occurs or arises wholly or partlyout of or as a result of any act, transaction or omission whatsoever authorisedby or carried out at and in accordance with the written request of thePurchaser or any member of the Purchaser’s Group (and for these purposes thePurchaser hereby authorises and requests the Vendor to carry out itsobligations pursuant to schedule 14); or

 

4.7           to the extent that such liability occurs or arises as a result ofany voluntary act or transaction of the Purchaser or its directors or employeesbefore Completion which the Purchaser or as appropriate, its directors oremployees knew or ought reasonably to have known would give rise to theliability in question other than any act or transaction which is carried out atthe request of or with the consent of the Vendor.

 

**5.****             THIRD PARTY CLAIMS**

 

5.1           Where the Purchaser and/or the Companies and/or the Subsidiariesis/are at any time entitled to recover from some other person (including anyTax Authority or insurers) any sum in respect of any matter which might giverise to a Claim, then without prejudice to the Purchaser’s rights against theVendor, the Purchaser shall and shall procure that the Companies and/or theSubsidiaries shall subject to the Purchaser (or the Companies and/or theSubsidiaries, as applicable) being indemnified by the Vendor (on termsreasonably satisfactory to the Purchaser) for all associated costs and expensesproperly incurred (including legal fees) at the written request of the Vendortake all such steps as the Vendor may reasonably require to enforce suchrecovery prior to taking any action against the Vendor (other than notifyingthe Vendor of the Claim) and in the event that the Purchaser or the Companiesand/or the Subsidiaries shall recover any amount from such other person whichis attributable or referable to the matter forming the subject matter of theClaim, the amount of the Claim against the Vendor shall be reduced by theamount recovered (including any repayment supplement), less all costs, chargesand expenses properly incurred by the Purchaser

 

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or theCompanies and/or the Subsidiaries in recovering that sum from such otherperson.

 

5.2           If the Vendor pays at any time to the Purchaser or to the Companiesand/or the Subsidiaries an amount pursuant to a Claim and the Purchaser or theCompanies and/or the Subsidiaries subsequently become entitled to recover fromsome other person any sum which is attributable or referable to the matterforming the subject matter of the Claim the Purchaser shall and shall procurethat the Companies and/or the Subsidiaries shall subject to the Purchaser (orthe Companies and/or the Subsidiaries) being indemnified by the Vendor (on termsreasonably satisfactory to the Purchaser) for all associated costs and expensesproperly incurred (including legal fees), at the written request of the Vendortake all steps reasonably requested by the Vendor to enforce such recovery andshall forthwith repay to the Vendor so much of the amount paid by it to thePurchaser or the Companies and/or the Subsidiaries which is attributable orreferable to the matter forming the subject matter of the Claim as does notexceed the sum recovered from such other person less all costs, charges andexpenses reasonably and properly incurred (including legal fees) by thePurchaser or the Companies and/or the Subsidiaries in recovering that sum fromsuch other person; provided however that the Purchaser shall only be requiredto repay such amount to the Vendor to the extent that, following suchrepayment, the aggregate amount recovered by the Purchaser from any person,less the amount repaid to the Vendor, is equal to the Losses incurred by thePurchaser in relation to the Claim to which the payments relate.

 

**6.****             CONDUCT OF CLAIMS**

 

6.1           If the Purchaser or the Companies and/or the Subsidiaries becomeaware of any matter which might give rise to a Claim (other than a Tax Claim) (**“****Third Party Claim”**):

 

6.1.1        the Purchaser shall as soon as is reasonably practicable givewritten notice to the Vendor of the ThirdParty Claim with such details as are reasonably available at that timeand shall consult with the Vendor with respect to such matter;

 

6.1.2        the Purchaser shall (and shall procure that the Companies and/or theSubsidiaries concerned shall) subject to paragraph 6.2 of this schedule provideto the Vendor and its advisers reasonable access during normal working hours topremises and personnel and to relevant assets, documents and records within thePurchaser’s Group for the purposes of investigating the matter and enabling theVendor to consider what action it should request be taken in accordance withparagraph 6.1.4 of this schedule;

 

6.1.3        the Vendor (at its cost) may take copies of the documents orrecords, and photograph the premises or assets, referred to in paragraph 6.1.2;

 

6.1.4        the Purchaser shall (and shall procure that the Companies and/or theSubsidiaries concerned shall) subject to paragraph 6.2 of this schedule takesuch action and give such information and assistance in connection with theaffairs of the Purchaser or the Companies and/or the Subsidiaries as the Vendormay reasonably request in writing to negotiate, avoid, dispute, resist,mitigate, compromise, defend or appeal against any Third Party Claim and any adjudication with respect thereto whichshall include (without limitation)

 

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theCompanies and/or the Subsidiaries applying to postpone (so far as legallypossible) the payment of any taxation.

 

6.2           The Vendor shall indemnify the Purchaser and the Companies and/orthe Subsidiaries to their reasonable satisfaction against all losses, damagesand expenses properly incurred and reimburse to the Purchaser and the Companiesand/or the Subsidiaries and all out-of-pocket expenses properly incurred bythem in complying with their obligations under this paragraph 6.

 

6.3           The conduct of any proceedings of whatsoever nature arising inconnection with any Third Party Claimshall, if the Vendor requests, be delegated entirely to the Vendor and in thatconnection the Purchaser shall give or cause to be given to the Vendor all suchassistance as the Vendor may reasonably require in disputing any such Third Party Claim and shall instructsuch solicitors or professional advisers as the Vendor may nominate to act onbehalf of the Vendor, the Purchaser or the Companies and/or the Subsidiariesbut in accordance with the Vendor’s instructions; *provided however*that (i) the Vendor will not consent to theentry of any judgement or enter into any settlement with respect to the ThirdParty Claim without the prior written consent of the Purchaser (not to beunreasonably withheld or delayed) unless the judgement or proposed settlement involvesonly the payment of money damages and does not impose an injunction or otherequitable relief on the Purchaser or any Target Group member, and (ii) theVendor shall take into account all reasonable instructions given by thePurchaser with a view to avoiding any material adverse effect on any TargetGroup member, its business or the goodwill attaching thereto.

 

6.4           Unless and until the Vendor assumes the defence of the Third PartyClaim as provided in the preceding paragraph, the Purchaser and/or any TargetGroup member may defend the Third Party Claim in any manner they may deemappropriate (but shall take into account all reasonable instructions given bythe Vendor)provided that the Purchaser shall not, and shall ensure that nomember of the Purchaser’s Group will, admit liability in respect of, orcompromise or settle, the Third PartyClaim without the prior written consent of the Vendor (such consent notto be unreasonably withheld or delayed).

 

6.5           The parties agree that any failure on the part of the Purchaser tocomply with its obligations under this paragraph 6 will not affect (and shallnot be a condition precedent to) the liability of the Seller hereunder.

 

**7.****             MISCELLANEOUS**

 

7.1           Any payment to the Purchaser under the Warranties or under the TaxCovenant by the Vendor shall be deemed to be a reduction of the totalconsideration payable hereunder for the Shares.

 

7.2           If in respect of any one matter a Claim may be made under theWarranties and under the Tax Covenant then to the extent that the Claim issatisfied under the Warranties, an amount payable under the Tax Covenant inrespect of the same matter is reduced accordingly and vice versa.

 

7.3           Payment of any Claim shall pro tanto satisfy and discharge any otherClaim which is capable of being made in respect of the same loss, and thePurchaser shall not be able to recover more than once in respect of the sameloss.

 

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7.4           The Purchaser will use all reasonable endeavours to, and shallensure that each Target Group member will use all reasonable endeavours to,preserve all documents, records, correspondence, accounts and other informationwhatsoever relevant to a matter which may give rise to a Claim.

 

7.5           The Vendor shall not be liable under any of the Warranties to theextent the Purchaser had at any time prior to the date of this agreement actualknowledge of the facts, matter or circumstance which gave rise to a Claim underthe Warranties and the Purchaser was actually aware that such facts, matter orcircumstance would give rise to a liability on the party of the Vendor underthe Warranties.  For this purpose thePurchaser shall be deemed only to have knowledge of anything of which thedirectors of the Purchaser are actually aware

 

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** **

**SCHEDULE 10**

 

**Registered Business Intellectual Property**

 

**Part 1**

 

**Trade Marks**

 
| **Trade Mark**           | ** ** | **No**  | ** ** | **Country** | ** ** | **Registered  proprietor**                                                          | ** ** | **Renewal  date** | ** ** | **Classes** |
|--------------------------|------------|---------|------------|-------------|------------|-------------------------------------------------------------------------------------|------------|-------------------|------------|-------------|
|                     |       |    |       |        |       |                                                                                |       |              |       |        |
| CHECKOUT                 |       | 2004214 |       | UK          |       | Highbury Business Communications Limited                                            |       | 01/12/2014        |       | 16          |
|                     |       |    |       |        |       |                                                                                |       |              |       |        |
| CHECKOUT FRESH           |       | 2136763 |       | UK          |       | Highbury Business Communications Limited                                            |       | 24/06/2007        |       | 16          |
|                     |       |    |       |        |       |                                                                                |       |              |       |        |
| ELECTRICAL TIMES         |       | 2070957 |       | UK          |       | Highbury Business Communications Limited                                            |       | 10/05/2006        |       | 16          |
|                     |       |    |       |        |       |                                                                                |       |              |       |        |
| ELECTRICAL REVIEW        |       | 687197  |       | UK          |       | Highbury Business Communications Limited                                            |       | 10/03/2009        |       | 16          |
|                     |       |    |       |        |       |                                                                                |       |              |       |        |
| ELECTRONICS WORLD        |       | 2070942 |       | UK          |       | Highbury Business Communications Limited                                            |       | 10/05/2006        |       | 16          |
|                     |       |    |       |        |       |                                                                                |       |              |       |        |
| INDEPENDENT GROCER       |       | 2003866 |       | UK          |       | Highbury Business Communications Limited                                            |       | 01/12/2014        |       | 16          |
|                     |       |    |       |        |       |                                                                                |       |              |       |        |
| WHAT TO BUY FOR BUSINESS |       | 1462293 |       | UK          |       | Highbury Business Communications Limited                                            |       | 24/04/2008        |       | 16          |
|                     |       |    |       |        |       |                                                                                |       |              |       |        |
| THE MOTOR SHIP           |       | 2071013 |       | UK          |       | Highbury Business Communications Limited                                            |       | 10/05/2006        |       | 16          |
|                     |       |    |       |        |       |                                                                                |       |              |       |        |
| INDEPENDENT RETAIL NEWS  |       | 2121822 |       | UK          |       | Highbury Business Communications Limited                                            |       | 27/01/2007        |       | 16; 35      |
|                     |       |    |       |        |       |                                                                                |       |              |       |        |
| SUPERMARKETING           |       | 1380236 |       | UK          |       | Highbury Business Communications Limited                                            |       | 07/04/2006        |       | 16          |
|                     |       |    |       |        |       |                                                                                |       |              |       |        |
| PHONE MILES              |       | 2006603 |       | UK          |       | Highbury Columbus Travel Publishing Limited  (formerly Columbus Publishing Limited) |       | 04/01/2005        |       | 9; 16; 35   |
|                     |       |    |       |        |       |                                                                                |       |              |       |        |
| WORLD TRAVEL GUIDE       |       | 2146244 |       | UK          |       | Highbury Columbus Travel Publishing Limited  (formerly Columbus Publishing Limited) |       | 24/09/2007        |       | 9; 16; 42   |
|                     |       |    |       |        |       |                                                                                |       |              |       |        |
| MOTOR TRADER             |       | 687191  |       | UK          |       | Assignment from Reed Business Information to  Highbury Business                     |       | 10/03/2009        |       | 16          |

 

85

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| **Trade Mark**     | ** ** | **No**  | ** ** | **Country** | ** ** | **Registered  proprietor**                                                          | ** ** | **Renewal  date** | ** ** | **Classes** |
|--------------------|------------|---------|------------|-------------|------------|-------------------------------------------------------------------------------------|------------|-------------------|------------|-------------|
|               |       |    |       |        |       |                                                                                |       |              |       |        |
|               |       |    |       |        |       | Communications Limited has been filed with the Trade  Marks Registry                |       |              |       |        |
|               |       |    |       |        |       |                                                                                |       |              |       |        |
| WORLD TRAVEL GUIDE |       | 2723132 |       | US          |       | Highbury Columbus Travel Publishing Limited  (formerly Columbus Publishing Limited) |       | 10/06/2013        |       | 9; 16; 39   |

 

86

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**Part 2**

** **

**Domain Names**

 
| **Domain**                            | ** ** | **Registered to**                                                                                                         | ** ** | **Expiry Date** |
|---------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------|------------|-----------------|
| actionweek.co.uk                      |       | Higbury (sic)Business Comms                                                                                               |       | 11/10/2006      |
| aemagazine.com                        |       | Higbury (sic) Business Comms                                                                                              |       | 01/05/2009      |
| broadbandeurope.co.uk                 |       | Highbury Business                                                                                                         |       | 17/03/2006      |
| broadbandeurope.org                   |       | Highbury Business                                                                                                         |       | 18/03/2005      |
| cabling-world.co.uk                   |       | Nexus Media - (to lapse and so will not be  transferred)                                                                  |       | 24/04/2005      |
| ceeconference.com                     |       | Highbury  Business Comms                                                                                                  |       | 15/09/2006      |
| checkoutbluesky.com                   |       | Highbury Business Communications Limited                                                                                  |       | 24/10/2005      |
| checkoutfresh.co.uk                   |       | Highbury Business Communications Limited                                                                                  |       | 20/06/2006      |
| checkoutfresh.com                     |       | Highbury Business Communications Limited                                                                                  |       | 21/04/2006      |
| checkoutjobs.co.uk                    |       | Highbury Business                                                                                                         |       | 12/11/2006      |
| cibawards.com                         |       | Highbury-Nexus Limited                                                                                                    |       | 25/11/2005      |
| checkoutmagazine.co.uk                |       | Highbury Business Communications Limited                                                                                  |       | 24/10/2006      |
| checkout-trends.com                   |       | Highbury Business Communications Limited                                                                                  |       | 24/10/2005      |
| columbus-group.co.uk                  |       | columbus Holdings Ltd - (to lapse and so will not be  transferred)                                                        |       | 01/07/2005      |
| columbusguides.co.uk                  |       | Columbus Holdings Limited (to be transferred to  Highbury Columbus Travel Publishing Limited - Form sent to Nominet) |       | 31/05/2006      |
| columbusguides.com                    |       | Columbus Publishing Limited                                                                                               |       | 15/05/2009      |
| columbusguides.net                    |       | Columbus Publishing Limited                                                                                               |       | 15/05/2006      |
| columbusonlinetravelinformation.co.uk |       | Highbury  Business Comms                                                                                                  |       | 07/04/2006      |

 

87

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| **Domain**                          | ** ** | **Registered to**                                        | ** ** | **Expiry Date** |
|-------------------------------------|------------|----------------------------------------------------------|------------|-----------------|
| columbusonlinetravelinformation.com |       | Highbury  Business Comms                                 |       | 08/04/2006      |
| columbusonlinetravelinformation.net |       | Highbury  Business Comms                                 |       | 08/04/2006      |
| columbuspublishing.com              |       | Highbury  Columbus Travel Publishing Limited             |       | 14/08/2005      |
| columbustravelguide.com             |       | Columbus Publishing Limited                              |       | 15/05/2006      |
| columbustravelguide.net             |       | Columbus Publishing Limited                              |       | 15/05/2006      |
| columbustravelguides.com            |       | Columbus Publishing Limited                              |       | 15/05/2006      |
| columbustravelguides.net            |       | Columbus Publishing Limited                              |       | 15/05/2006      |
| columbustravelpublishing.com        |       | Highbury Columbus Travel Publishing Limited              |       | 20/08/2005      |
| commsmoves.net                      |       | To lapse and so will not be transferred                  |       | 11/01/2005      |
| communications-news.co.uk           |       | Nexus Media Limited                                      |       | 24/04/2005      |
| communications-news.com             |       | Nexus Media Limited                                      |       | 24/04/2005      |
| convenienceawards.co.uk             |       | Highbury  Business Comms                                 |       | 29/10/2006      |
| convenienceawards.com               |       | Highbury  Business Comms                                 |       | 29/10/2006      |
| cumulusbusinessmedia.co.uk          |       | Cumulus Ltd - (to lapse and so will not be  transferred) |       | 04/04/2005      |
| cumulusmedia.co.uk                  |       | Cumulus Business Media                                   |       | 18/04/2005      |
| dasreiseportal.com                  |       | Columbus Publishing Limited                              |       | 13/02/2005      |
| dasreiseportal.de                   |       | Columbus Travel Publishing (De)                          |       | Not known       |
| defencepa.com                       |       | Nexus Media Ltd                                          |       | 18/02/2006      |
| derreisefuehrer.com                 |       | Highbury Columbus Travel Publishing Limited              |       | 14/07/2005      |
| derreisefuehrer.net                 |       | Highbury Columbus Travel Publishing Limited              |       | 14/08/2005      |
| ecocexhibition.com                  |       | Highbury-Nexus Limited                                   |       | 16/08/2005      |

 

88

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| **Domain**                       | ** ** | **Registered to**                                                                                               | ** ** | **Expiry Date** |
|----------------------------------|------------|-----------------------------------------------------------------------------------------------------------------|------------|-----------------|
| ecocexhibition2004.com           |       | Highbury-Nexus Limited                                                                                          |       | 28/05/2005      |
| ecocexhibition2005.com           |       | Highbury-Nexus Limited                                                                                          |       | 20/04/2005      |
| electricalguide.com              |       | Highbury  Business Communications Ltd                                                                           |       | 24/02/2005      |
| electrical-info.com              |       | Highbury  Business Comms                                                                                        |       | 23/01/2009      |
| electricalreview.co.uk           |       | Highbury Business Communications Limited                                                                        |       | 25/03/2005      |
| electricaltimes.co.uk            |       | Highbury Business Communications Limited                                                                        |       | 25/03/2005      |
| electricaltimes.com              |       | Highbury Business Comms                                                                                         |       | 12/04/2009      |
| electricalwholesalingtimes.co.uk |       | Highbury Business Comms                                                                                         |       | 01/09/2006      |
| electricalwholesalingtimes.com   |       | Highbury Business Comms                                                                                         |       | 01/09/2006      |
| electronicsworld.co.uk           |       | Highbury Business Communications Limited                                                                        |       | 31/03/2005      |
| engineeringdistributor.com       |       | Expired - not being renewed                                                                                     |       | 08/12/2004      |
| epnmagazine.com                  |       | Highbury Business Comms                                                                                         |       | 01/05/2009      |
| eurocomms.co.uk                  |       | Highbury House Communications Plc (to be transferred  to Highbury Business Limited - Form sent to Nominet) |       | 11/01/2005      |
| exhibitormanual.info             |       | Nexus Media Limited                                                                                             |       | 11/01/2007      |
| fishermansmanual.net             |       | Highbury Business                                                                                               |       | 01.11/2005      |
| gocoti.co.uk                     |       | Highbury Business Comms                                                                                         |       | 07/04/2006      |
| gocoti.com                       |       | Highbury Business Comms                                                                                         |       | 08/04/2006      |
| gocoti.net                       |       | Highbury Business Comms                                                                                         |       | 08/04/2006      |
| grower.co.uk                     |       | Nexus Media Ltd                                                                                                 |       | 30/07/2006      |
| groweroftheyear.co.uk            |       | Nexus Media Ltd                                                                                                 |       | 21/12/2005      |
| groweroftheyear.com              |       | Highbury-Nexus Limited                                                                                          |       | 21/12/2005      |

 

89

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| **Domain**                           | ** ** | **Registered to**                                                           | ** ** | **Expiry Date** |
|--------------------------------------|------------|-----------------------------------------------------------------------------|------------|-----------------|
| guiamundialdeaeropuertos.com         |       | Columbus Publishing Limited                                                 |       | 26/02/2005      |
| guiamundialdeviajes.com              |       | Columbus Publishing Limited                                                 |       | 28/07/2006      |
| guidemondialdesaeroports.com         |       | Columbus Publishing Limited                                                 |       | 26/02/2005      |
| guidemondialdevoyage.com             |       | Columbus Publishing Limited                                                 |       | 26/02/2005      |
| handsonpower.co.uk                   |       | Highbury Business Comms                                                     |       | 28/09/2006      |
| handsonpower.com                     |       | Highbury Business Comms                                                     |       | 24/09/2006      |
| harpers-wine.com                     |       | Nexus  Media Limited                                                        |       | 12/11/2005      |
| hhcmailer.com                        |       | Highbury House Communications PLC (not to be  transferred)                  |       | 17/01/2005      |
| hhctest.com                          |       | Highbury House Communications PLC (not to be  transferred)                  |       | 01/05/2005      |
| highbury.biz                         |       | Highbury Business Comms                                                     |       | 08/02/2011      |
| highburybiz.co.uk                    |       | Higbury (sic) Business Comms                                                |       | 08/02/2006      |
| highburybiz.com                      |       | Higbury (sic) Business Comms                                                |       | 08/02/2011      |
| highburybizcomm.co.uk                |       | Higbury (sic) Business Communications                                       |       | 08/02/2006      |
| highburybusiness.co.uk               |       | Higbury (sic) Business Comms                                                |       | 08/02/2006      |
| highburybusiness.com                 |       | Higbury (sic) Business Comms                                                |       | 08/02/2011      |
| highburybusinesscommunications.co.uk |       | Highbury Business Communications                                            |       | 08/02/2006      |
| highburybusinesscommunications.com   |       | Highbury Business Communications                                            |       | 08/02/2011      |
| highburynexus.co.uk                  |       | Highbury House Communications PLC - (to lapse and  will not be transferred) |       | 27/03/2005      |
| horticultureinfocus.com              |       | Highbury Business                                                           |       | 24/09/2005      |
| hortinfocus.com                      |       | Highbury Business                                                           |       | 24/09/2005      |
| hoteldesignevent.com                 |       | Highbury-Nexus Limited                                                      |       | 27/02/2005      |

 

90

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| **Domain**                        | ** ** | **Registered to**                                                                                                  | ** ** | **Expiry Date** |
|-----------------------------------|------------|--------------------------------------------------------------------------------------------------------------------|------------|-----------------|
| hotelsdesign.co.uk                |       | Highbury House Communications Plc - (to lapse and  will not be transferred)                                        |       | 07/02/2005      |
| hotelspeconline.com               |       | Highbury-Nexus Limited                                                                                             |       | 02/04/2005      |
| ienmagazine.co.uk                 |       | Highbury House Communications Plc (to be transferred  to Highbury-Nexus Limited - Form sent to Nominet)       |       | 20/11/2004      |
| internationalbusinessawards.co.uk |       | Highbury House Communications Plc (to be transferred  to Highbury-Nexus - form sent to Nominet)                    |       | 16/04/2005      |
| ipgmagazine.com                   |       | Highbury Business Comms                                                                                            |       | 01/05/2011      |
| irntalkingshop.co.uk              |       | Highbury Business Communications Limited                                                                           |       | 04/04/2006      |
| irn-talkingshop.co.uk             |       | Highbury Business Communications Limited                                                                           |       | 04/04/2006      |
| irn-talkingshop.com               |       | Highbury Business Communications Limited                                                                           |       | 04/04/2006      |
| labupdate.co.uk                   |       | Highbury House Communications Plc (to be transferred  to Highbury-Nexus Limited - Form sent to Nominet)       |       | 20/11/2004      |
| meemagazine.com                   |       | Highbury Business Comms                                                                                            |       | 01/05/2009      |
| mhn.co.uk                         |       | Nexus Media Limited                                                                                                |       | 01/11/2005      |
| mobile-euro.co.uk                 |       | Nexus Media Limited                                                                                                |       | 03/05/2005      |
| motorship.co.uk                   |       | Interactive Media Unit (to be transferred to  Highbury Business Communications Limited - Negotiating with Nominet) |       | 26/03/2006      |
| motor-ship.co.uk                  |       | Highbury Business Communications Limited                                                                           |       | 21/07/2006      |
| motorship.com                     |       | Highbury Business Communications Limited                                                                           |       | 25/03/2009      |
| motorship.net                     |       | Cumulus  Business Media                                                                                            |       | 28/05/2005      |
| motortrader.co.uk                 |       | Netica  Plc (to be transferred to Highbury Business Communications Limited -  Negotiating with Nominet)            |       | 24/03/2006      |
| motortrader.com                   |       | Highbury Business Communications                                                                                   |       | 19/09/2005      |

 

91

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| **Domain**                               | ** ** | **Registered to**                                                                                  | ** ** | **Expiry Date** |
|------------------------------------------|------------|----------------------------------------------------------------------------------------------------|------------|-----------------|
| motortrader.net                          |       | Cumulus  Business Media                                                                            |       | 20/05/2005      |
| nexusmedia.co.uk                         |       | Nexus Information Technology (to lapse and so will  not be transferred)                            |       | Not known       |
| nexus-media.co.uk                        |       | Nexus Media Limited                                                                                |       | 14/02/2005      |
| nexusmedia.com                           |       | Websurfer Ltd (to be transferred to Nexus Media  Communications Ltd - Request made to Stuart Ward) |       | 22/10/2005      |
| nexusonline.co.uk                        |       | Nexus Media Ltd                                                                                    |       | 23/10/2005      |
| nexusonline.com                          |       | Nexus Media Ltd                                                                                    |       | 22/10/2005      |
| nurseryman.co.uk                         |       | Highbury Nexus Media Limited (to be transferred to  Highbury Media Ltd - form sent to Nominet)     |       | 02/12/2005      |
| nurseryman-and-gardencentre-awards.co.uk |       | Nexus Media Limited (to lapse and so will not be  transferred)                                     |       | 21/12/2005      |
| officeproductsdealer.co.uk               |       | Nexus Media Limited                                                                                |       | 13/03/2006      |
| panelbuilding.co.uk                      |       | Highbury Business Communications Limited                                                           |       | 29/09/2005      |
| panelbuilding.net                        |       | Highbury Business Comms                                                                            |       | 30/09/2005      |
| powerandenergy.co.uk                     |       | Nexus Media Limited                                                                                |       | 07/05/2005      |
| qfdawards.co.uk                          |       | Highbury Business Comms                                                                            |       | 16/05/2006      |
| qfdawards.com                            |       | Highbury Business Comms                                                                            |       | 17/05/2009      |
| qtbuyersguide.co.uk                      |       | Highbury Nexus Media Limited                                                                       |       | 10/08/2005      |
| qualitytoday.co.uk                       |       | Nexus Medial (sic) Ltd                                                                             |       | 11/04/2006      |
| retailawards.co.uk                       |       | Highbury Business Comms                                                                            |       | 16/05/2006      |
| shopspeconline.com                       |       | Highbury-Nexus Limited                                                                             |       | 02/04/2005      |
| specialistschoolsreview.co.uk            |       | Highbury Business Comms                                                                            |       | 10/01/2007      |
| specialistschoolsreview.com              |       | Highbury Business Comms                                                                            |       | 10/01/2007      |

 

92

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| **Domain**                 | ** ** | **Registered to**                           | ** ** | **Expiry Date** |
|----------------------------|------------|---------------------------------------------|------------|-----------------|
| televisionmagazine.co.uk   |       | Highbury Business Comms                     |       | 18/11/2005      |
| televisionmagazine.net     |       | Highbury Business Comms.                    |       | 18/11/2009      |
| the-hygienist.co.uk        |       | Nexus Business Communication                |       | 15/10/2006      |
| themotorship.co.uk         |       | Higbury (sic) Business Comms                |       | 22/04/2005      |
| themotorship.com           |       | Highbury  Business Communications Limited   |       | 07/03/2010      |
| themotorship.net           |       | Highbury Business Comms.                    |       | 23/04/2005      |
| the-probe.co.uk            |       | Nexus Business Communication                |       | 15/10/2005      |
| travel-guide.com           |       | Columbus Publishing Limited                 |       | 31/08/2008      |
| travel-guides.com          |       | Columbus Press Limited                      |       | 31/07/2009      |
| udt-asia.com               |       | Highbury-Nexus Limited                      |       | 18/06/2005      |
| udt-europe.com             |       | Highbury-Nexus Limited                      |       | 18/06/2005      |
| udt-hawaii.com             |       | Highbury-Nexus Limited                      |       | 18/06/2005      |
| udtnet.com                 |       | Highbury-Nexus Limited                      |       | 21/09/2005      |
| weldexpo.com               |       | Nexus Media Communications plc              |       | 15/03/2005      |
| whattobuy.net              |       | Cumulus  Business Media                     |       | 22/05/2005      |
| whattobuyforbusiness.co.uk |       | Highbury Business Communications Ltd        |       | 18/05/2005      |
| whattobuyforbusiness.com   |       | Highbury Business Communications Ltd        |       | 21/09/2006      |
| whenyouarethere.com        |       | Highbury Columbus Travel Publishing Limited |       | 08/12/2007      |
| whenyouarethere.net        |       | Highbury Columbus Travel Publishing Limited |       | 08/12/2007      |
| whenyourethere.com         |       | Highbury Columbus Travel Publishing Limited |       | 08/12/2007      |
| whenyouarethere.co.uk      |       | Columbus Publishing Limited                 |       | 12/08/2006      |

 

93

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| **Domain**            | ** ** | **Registered to**                                                                                     | ** ** | **Expiry Date** |
|-----------------------|------------|-------------------------------------------------------------------------------------------------------|------------|-----------------|
| worldcatchmap.net     |       | Highbury Business Limited                                                                             |       | 01/11/2005      |
| whenyourethere.net    |       | Highbury Columbus Travel Publishing Limited                                                           |       | 08/12/2007      |
| whenyourthere.com     |       | Columbus Travel Publishing - (domain no longer  required)                                             |       | 28/07/2007      |
| whenyourthere.net     |       | Columbus Travel Publishing                                                                            |       | 28/07/2007      |
| worldairportguide.com |       | Highbury Columbus Travel Publishing Limited                                                           |       | 15/03/2009      |
| worldairportguide.net |       | Columbus Publishing Limited                                                                           |       | 10/07/2005      |
| worldairportguide.org |       | Highbury Columbus Travel Publishing Limited                                                           |       | 10/07/2005      |
| worldcruiseguide.com  |       | Highbury Columbus Travel Publishing Limited                                                           |       | 12/05/2005      |
| worldeventsguide.com  |       | Columbus Publishing Limited                                                                           |       | 12/04/2005      |
| worldfish.co.uk       |       | Highbury Nexus Media Limited                                                                          |       | 30/12/2005      |
| worldfish.com         |       | Highbury-Nexus Limited                                                                                |       | 30/11/2005      |
| worldfishing.net      |       | Nexus Media Limited                                                                                   |       | 13/12/2005      |
|                  |       |                                                                                                  |       |            |
| worldimageguide.com   |       | Highbury Columbus Travel Publishing Limited                                                           |       | 27/04/2006      |
|                  |       |                                                                                                  |       |            |
| worldimageguide.net   |       | Highbury Columbus Travel Publishing Limited                                                           |       | 27/04/2006      |
| worldofdefence.co.uk  |       | Highbury House Communications Plc (to be transferred  to Highbury Columbus Travel Publishing Limited) |       | 04/04/2005      |
| worldofdefence.com    |       | Highbury-Nexus Limited                                                                                |       | 04/04/2005      |
| worldofstudy.co.uk    |       | Nexus Media Limited                                                                                   |       | 13/02/2005      |
| worldofstudy.com      |       | Nexus Media Limited                                                                                   |       | 14/02/2005      |

 

94

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| **Domain**             | ** ** | **Registered to**           | ** ** | **Expiry Date** |
|------------------------|------------|-----------------------------|------------|-----------------|
| worldtravelguide.co.uk |       | Columbus Publishing Limited |       | 30/11/2005      |
| worldtravelguide.net   |       | Columbus Publishing Limited |       | 30/11/2009      |
| wtgonline.com          |       | Columbus Press Limited      |       | 10/04/2005      |
| fishermansmanual.net   |       | Highbury Business           |       | 01/11/2005      |
| worldcatchmap.net      |       | Highbury Business           |       | 01/11/2005      |
| checkoutjobs.co.uk     |       | Highbury Business           |       | 11/11/2006      |
| cibawards.com          |       | Highbury Business           |       | 25/11/2005      |

 

95

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**SCHEDULE 11**

 

**Magazine Titles**

 

DefenceProcurement Analysis

 

UnderwaterDefence Technology (UDT) Forum

 

AsianElectricity

 

ElectricalReview

 

ElectricalTimes

 

EuropeanPower News

 

InternationalPower Generation

 

MiddleEastern Electricity

 

MotorTrader

 

TheMotor Ship

 

Grower

 

Nurseryman& Garden Centre*

 

Turf& Amenity Management*

 

WorldFishing Magazine

 

EngineeringDistributor*

 

EuropeanQuality Today*

 

IndustrialEquipment News

 

LaboratoryUpdate

 

MaterialsHandling News

 

QualityToday

 

CablingWorld*

 

CommunicationNews

 

EuropeanCommunications

 

InternationalOptical Communications

 

MobileEurope

 

EducationResources & Management (to be named Specialist Schools Review from February2005)

 

96

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EducationYearbooks*

 

ExportTimes

 

HotelSpec

 

OfficeProducts Dealer

 

TheHygienist

 

TheProbe

 

FirstMagazine

 

TheQueen’s Award Magazine

 

Checkout

 

HarpersThe Wine & Spirit Weekly

 

IndependentRetail News

 

Shopspec

 

WhatTo Buy For Business

 

AmericanSociety of Travel Agents (ASTA) Directory

 

MembershipDirectory

 

WorldTravel Atlas

 

WorldTravel Guide

 

WorldTravel Market Catalogue*

 

Directoryfor the National Association of Shopfitters

 

TelevisionWorld

 

ElectronicsWorld

 

TouristAttractions of the World

 

TravelPlanning Workbook

 

WorldTravel Directory

 

WorldAirport Guide

 

ASTAMagazine

 

WorldFishing Magazine

 

----

*Titles previously published

 

97

----

 

**SCHEDULE 12**

 

**Exhibitions**

 

EuropeanConference & Exhibition on Optical Communication (ECOC)

 

LiquidEurope*

 

UDTEurope

 

UDTPacific

 

MotorTrader Industry Awards

 

FruitFocus

 

Growerof the Year Awards

 

IcelandicFisheries Exhibition

 

MidlandRegional Growers Exhibition*

 

NorthernRegional Growers *

 

Nurseryman& Garden Centre Awards

 

SouthWest Regional Growers

 

Vegetable& Salads Focus*

 

WorldFishing Exhibition

 

Weldex

 

BOSSIndustry Awards

 

Distance& Open Learning Fairs*

 

EuropeanHotel Design Awards

 

Postgraduate/MBAFairs*

 

ProbeDental Awards

 

TradePartners UK International Business Awards

 

TheInternational Wine & Spirit Competition

 

Horticulturein Focus Conference

 

Re-freshConference and Awards Evening

 

SeafoodAwards

 

TheRetail Industry Awards

 

98

----

 

ExcellenceAwards in Independent Retailing

 

ConvenienceRetail Awards

 

QualityFood and Drinks Awards

 

EuropePower Conference and Exhibition

 

DomesticCombined Heating and Power Conference

 

MotorshipPropulsion Conference

 

EducationResource Awards

 

BroadbandShow

 

TheTraining and Simulation Exhibition Conference

 

----

*Previously organised

 

99

----

 

**SCHEDULE 13**

 

[Intentionallydeleted]

 

100

----

 

**SCHEDULE 14**

 

**Transitional Arrangements**

 

**Transition Team**

 

1.                                       Within 5Business Days after the execution of this agreement, each of the Vendor and thePurchaser will nominate one representative to form a transition team who willduring the period between the date of this agreement and Completion (**“Transition Period”**) co-ordinate, identifyand execute all activities reasonably required to enable the continuedoperation of the Business by the Target Group after Completion in substantiallythe same manner as conducted prior to the date hereof. Within 15 Business Daysafter the date of this agreement, the parties shall prepare a detailed listingof such transition activities.  TheVendor shall allow the Purchaser reasonable access (amounting to one and a halfdays per week) to Owen Davies and in addition to such other finance personnelof the Vendor as are reasonably necessary to assist the Business during theTransition Period and for two months thereafter.

 

2.                                       The Vendorshall use all reasonable endeavours to assist the Purchaser during the TransitionPeriod (including the provision of such in-house legal and administrativeresources as may be reasonably necessary) with a view to ensuring that theTarget Group is able to operate the Business as a stand-alone businessfollowing Completion in substantially the same manner as conducted prior to thedate hereof.  Without prejudice to theforegoing, the Vendor and the Purchaser shall comply with the followingprovisions of this schedule.

 

**Accounting Systems**

 

3.                                       The Vendorshall use all reasonable endeavours during the Transition Period to assist thePurchaser to create and establish a stand-alone accounting system for use bythe Target Group, and shall as soon as reasonably possible after the date ofthis agreement (and at the Vendor’s cost):

 

3.1                                 to theextent the Vendor is permitted to do so, transfer to the Target Group allrights, title and interest in the two servers (**“Accounts Servers”**) used by the Vendor as at the date of thisagreement to provide the accounting system for the Target Group;

 

3.2                                 to theextent the Vendor is permitted to do so, transfer to the Target Group allrights, title and interest held by the Vendor in the software (known as “Tetra”)(**“Tetra Software”**) that operateson the Accounts Servers, and if it is determined prior to Completion that theVendor is unable to transfer such rights, title and interest in the TetraSoftware, the Vendor shall use all reasonable endeavours to assist thePurchaser to acquire a licence for the Target Group (for the avoidance of doubtat the Vendor’s cost) to use the Tetra Software on the Accounts Servers for thepurpose of the Business from the owner of the Tetra Software.

 

**Bank Accounts**

 

4.                                       The Vendorshall use all reasonable endeavours to ensure that, as soon as reasonablypossible (but no later than 30 days) after the date of this agreement,customers and other payees of the Target Group are notified in writing thatfuture payments to the Target Group should be made into one of the bankaccounts in the name of a member of the Target Group, (including the changingof direct debit details and notifying customers of the changes in accountdetails).

 

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**Credit Card Payment**

 

5.                                       As soon asreasonably practicable after the date of this agreement, the Vendor shall (atits cost) change the bank account details to which all credit card payments forthe Business are credited from the Vendor’s bank account to a bank accountestablished in the name of a member of the Target Group.

 

**Purchase Ledger**

 

6.                                       The Vendorconfirms that at the date hereof the Business is operated through a stand-alonepurchase ledger relating only to the Business located at Media House.

 

7.                                       Withoutprejudice to the Vendor’s right to retain and use such data, from the date ofthis agreement until the date falling 3 months after Completion, the Vendorshall provide to the Purchaser copies of such historic data relating to theBusiness held on the Vendor’s Purchase Ledger as the Purchaser may reasonablyrequest (subject always to the provisions of clause 20 (Confidentiality)).

 

**Payroll and Personnel**

 

8.                                       FromCompletion until the date falling 3 months after Completion (or such earlierdate as the Purchaser may notify the Vendor in writing by not less than 10Business Days notice), the Vendor shall provide (or procure the provision of)payroll services, as (at the date of this agreement) provided by the Vendor(including the handling of the Forms P60 for 2004), for the Target Group.

 

9.                                       Suchpayroll services shall be provided at a cost of £1,500 per month which shall bepayable by the Purchaser monthly in arrears.

 

**Insurance**

 

10.                                 Theparties hereby acknowledge that:

 

10.1                           the Vendorhas a group-wide insurance arrangement in place; and

 

10.2                           each partywill work together and request their insurance advisors to negotiate thetransition of the relevant insurance cover from the Vendor for the benefit ofthe Target Group following Completion and the Vendor will provide the Purchaserand its insurance advisors with all necessary information provided that theVendor shall not be required to incur any cost in connection with suchtransition or in respect of the Target Group’s insurances following Completion.

 

11.                                 The Vendorshall notify the Purchaser promptly following any termination or modificationof the directors’ and officer’s insurance currently held by the Vendor withrespect to the Vendor’s Group insofar as it relates to the period prior toCompletion and the Target Group.  TheVendor shall notify the Purchaser as to which of the directors of the Target Groupare covered under the Vendors’ D&O Policy.

 

**Distribution**

 

12.                                 CertainMagazine Titles are currently distributed by Seymour under the terms of anarrangement with the Vendor (the “**Seymour****Arrangement**”).  It is contemplated that the Vendor may sign anew contract with Seymour with respect to the Seymour Arrangement (**“New Seymour Contract”**).

 

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13.                                 If theVendor signs a New Seymour Contract or otherwise continues the SeymourArrangement without entering into a New Seymour Contract, it will ensure thatthe Magazine Titles in question will for the duration of the SeymourArrangement or of the New Seymour Contract continue to be distributed bySeymour on substantially the same terms as those on which such Magazine Titlesare distributed at the time of this agreement and the Purchaser shall reimbursethe Vendor for the cost of such distribution.

 

14.                                 If theVendor elects to terminate the Seymour Arrangement or the Seymour Arrangementotherwise ceases to apply to the Magazine Titles in question (otherwise thandue to the entering into of a New Seymour Contract), the Vendor will requestany replacement distributor with whom it enters into negotiations ordiscussions to consider agreeing to distribute the Magazine Titles in question,on the same terms as it offers for the distribution of the Vendor’s otherMagazine Titles and the Vendor will use all reasonable endeavours (but for theavoidance of doubt without incurring any cost or detriment) to persuade thereplacement distributor to do so and will notify the Purchaser of the detailsof such replacement distributor and assist the Purchaser in meeting it.

 

**Vehicle Leasing**

 

15.                                 The Vendorshall use all reasonable endeavours to make arrangements for the continued use bythe Target Group and the employees of the Target Group (whether by lease,sub-lease or otherwise), following Completion, of the 24 motor vehicles (the **“Vehicles”**) currently leased by the Vendorfor use in connection with the Business. The parties acknowledge that the preferred option is to have the vehicleleasing company enter into direct lease arrangements with a member of theTarget Group.  If that is not in theVendor’s opinion reasonably practicable, then to the extent permitted by theleasing arrangements in place between the Vendor and the vehicle leasingcompany (the **“leasing arrangements”**),the Vendor will, during the continuance of the leasing arrangements for eachVehicle, sub-lease such Vehicle to a member of the Target Group, subject to thepayment by the Target Group of the costs incurred by the Vendor with respect tosuch Vehicle under the leasing arrangements and subject to the Purchaserindemnifying the Vendor against any loss incurred by the Vendor as a result ofthe Target Group’s use of the Vehicles.

 

**Photocopiers and any other leased assets**

 

16.                                 The Vendorwill use all reasonable endeavours to enable the Target Group to continuefollowing Completion to have the benefit and use of any equipment and otherassets currently used in connection with the Business, to the extent that suchassets are leased or hired by a member of the Vendor’s Group and to the extentpermitted by the relevant lease or hire agreement.  Without prejudice to the foregoing, theparties will enter into such arrangements as they consider practicallyexpedient in order to achieve such aim and the Target Group will reimburse tothe Vendor any costs incurred by it in connection with such arrangement.  The Purchaser indemnifies each member of theVendor Group for any loss incurred by such Vendor Group member as a result ofthe Target Group’s use of such assets.

 

**Subscription Management and Controlled Circulation(Fulfilment)**

 

17.                                 The Vendorwill use all reasonable endeavours, with a view to achieving the same as soonas reasonably practicable (but in any event before the date falling 10 BusinessDays before Completion), to carry out all necessary system integration andother work in order to effect the transfer of controlled circulation andsubscription management services from Highbury - Wyvern to an alternativeprovider of such services.

 

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**Employment of Anthony Salter**

 

18.                                 Ifrequested to do so by the Purchaser (and provided that Anthony Salter shallhave entered into a new employment contract with the Purchaser or with a memberof the Target Group), the Vendor will, with effect from Completion, waive anynotice period required under the current employment contract of T Salter andthe restrictive covenants in clause 13.1.4, 13.1.6 and 13.1.8 thereof.

 

**Pensions**

 

19.                                 In thissection of the schedule the following terms will have the following meanings:

 
| ** ** | **“Vendor’s New Scheme”**  |   | means  the pension arrangements established or nominated by the Vendor for the  purposes of this section;                                                                                                     |
|------------|-------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** ** | ** **                                |   |                                                                                                                                                                                                          |
| ** ** | **“Nexus Scheme”**              |   | means  the Nexus Group Pension Scheme established by the trust deed dated 12 August  1993;                                                                                                                    |
| ** ** | ** **                                |   |                                                                                                                                                                                                          |
| ** ** | **“Retained Members”**          |   | means  those persons who immediately prior to Completion are contributing members of  the Nexus Scheme employed by a Relevant Highbury Company; and                                                           |
| ** ** | ** **                                |   |                                                                                                                                                                                                          |
| ** ** | **“Relevant Highbury Company”** |   | means  a company participating in the Nexus Scheme which at Completion is controlled  by or closely associated in business with the Vendor and which is not one of  the Companies or one of the Subsidiaries. |

 

20.                                 As soon aspracticable after Completion the Vendor shall nominate a retirement benefitsscheme as the Vendor’s New Scheme for the purposes of these provisions.

 

21.                                 The Vendor’sNew Scheme shall be drawn and designed by the Vendor to provide retirement anddeath benefits of the same amount and on the same basis as have been providedunder the Nexus Scheme immediately prior to Completion. The Vendor’s New Schemeshall be capable of accepting a transfer of assets from the Nexus Scheme in respectof the entitlements in the Nexus Scheme of any of the Retained Members who wishto have their accrued benefits transferred from the Nexus Scheme to the Vendor’sNew Scheme.

 

22.                                 ThePurchaser shall use all reasonable endeavours to procure that the Trustees ofthe Nexus Scheme shall facilitate any transfer of assets representing theinterests of each of the Retained Members who requests or consents to atransfer being made in respect of his interests in the Nexus Scheme to theVendor’s New Scheme free of any deductions, charges or expenses being appliedagainst interests of any of the Retained Members.

 

23.                                 To theextent that any costs expenses or charges are incurred by the trustees of theNexus Scheme in giving effect to the terms of these pension provisions theyshall be borne by the Vendor .

 

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**Intellectual Property**

 

24.                                 As soon asreasonably possible after the date of this agreement (and in any event beforeCompletion), the Vendor shall make such applications and proceed with suchongoing procedures as are necessary to procure (i) the registration, in thename of a Target Group member, of any of the Domain Names or Trademarks thatare not so registered at the date of this agreement and (ii) the renewal of anyDomain Names or Trademarks that are due for renewal at the date hereof or whichfall due for renewal before the Completion Date (other than those Domain Namesor Trademarks which are agreed to be allowed to lapse).

 

**Software**

 

25.                                 As soon asreasonably possible after the date of this agreement (and in any event no laterthan 10 Business Days before Completion), the Vendor shall (at its cost)acquire and/or transfer to the Target Group, for the benefit of the TargetGroup following Completion, the licences for the software and web tools listedin schedule 15 (the **“Listed Software”**).

 

26.                                 On theCompletion Date the Vendor shall (and shall procure that each member of theVendor Group shall) and the Purchaser shall (and shall procure that each memberof the Target Group shall) to the extent that such company owns anyIntellectual Property in the Expresso Content Management Software (and subjectto the terms****of the open sourceGNU GPL licence under which certain modules are used) grant to the other a perpetual,non-exclusive, royalty free, transferable licence to use, copy, modify, developand exploit the Expresso Content Management Software.

 

**Contracts**

 

27.                                 If, beforeor after Completion, either party or any Target Group member receives noticefrom any counterparty to any contract or agreement to which any Target Groupmember is a party, indicating that as a result of the transactions contemplatedby this agreement such counterparty wishes to terminate the contract inquestion or otherwise modify the terms on which it is prepared to deal with theTarget Group member, the Vendor shall provide such assistance to the TargetGroup member as the Purchaser may reasonably request (but without theobligation to incur any cost) with a view to avoiding such termination ormodification of terms.

 

28.                                 The Vendoragrees to use all reasonable endeavours (if requested by the Purchaser) toensure that any contract that relates solely to the Business but that is heldby a member of the Vendor’s Group (including contracts relating to the ECOCexhibition and contracts for telephone and electricity services to Media House)are transferred to a member of the Target Group as soon as reasonablypracticable after the date of this agreement. If it is not possible or practicable to transfer such arrangements(whether because any third party fails to give its consent or otherwise), thenunless and until it such arrangements are transferred, the Target Group shallbe entitled, for its own benefit and at its own cost and to the extent that thearrangements permit, to perform and discharge on behalf of the Vendor all theoutstanding obligations and liabilities of the Vendor under such arrangements,provided that it shall indemnify the Vendor with respect to any Losses incurredby the Vendor as a result of such performance and discharge or non-performance.

 

29.                                 The Vendoracknowledges that, notwithstanding that any such contract relating to theBusiness may have been entered into with the Vendor, any benefits accruingtherefrom shall be for the account of the Target Group subject to the TargetGroup assuming the burden thereof.

 

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**Accounting for receipts**

 

30.                                 If at anytime after Completion any payment in relation to the Business (whether from acustomer or otherwise) is received by the Vendor or any other member of theVendor’s Group, or any payment relating to the business of the Vendor’s Groupis received by the Purchaser or any member of the Target Group, the Vendor orthe Purchaser (as the case may be) shall procure that the amount of suchpayment is promptly paid to a member of the Target Group or to the Vendor (asthe case may be).

 

**US GAAP Accounts**

 

31.                                 From thedate hereof, the Vendor shall (at the Purchaser’s cost in respect of thirdparty out of pocket expenses) provide such co-operation, access to personneland working papers and other assistance as the Purchaser may reasonably requestin connection with the preparation of the US GAAP Accounts, with a view toenabling the same to be prepared within 20 Business Days followingCompletion.  The Vendor acknowledges thatseparate audit processes may be ongoing simultaneously with respect to theStatutory Accounts and the US GAAP Accounts. The Vendor will use all reasonable endeavours to ensure that thepreparation of the US GAAP Accounts is not hindered or delayed by suchsimultaneous audit processes.

 

32.                                 FollowingCompletion, the Vendor shall (at the Purchaser’s cost, save as provided inclause 17.3) continue to assist and co-operate with the Purchaser in connectionwith any matters required to be filed by the Purchaser with the SecuritiesExchange Commission or other regulatory body in the United States of America,including the provision of any information reasonably required with respect tothe Accounts and the financial statements prepared with respect to any TargetGroup member prior to Completion.

 

**VAT**

 

33.                                 The Vendorshall ensure that, as soon as reasonably practicable after the date of thisagreement, it files such forms and makes such application as are necessary toremove the Target Group from the Vendor’s current VAT grouping arrangements andto obtain a separate VAT group registration for the Target Group.

 

**Dividends and Repayment of Intercompany Loans**

 

34.                                 The Vendorand the Purchaser agree that prior to Completion members of the Target Groupshall, notwithstanding any other provision of this agreement be entitled:

 

34.1                           to enterinto a netting off agreement pursuant to which all debts owed by the TargetGroup to the Vendor Group may be netted off against all debts owed by theVendor Group to the Target Group, such agreement to be approved in advance bythe Purchaser, such approval not to be unreasonably withheld or delayed; and

 

34.2                           to declareand pay (whether in cash or by way of settlement of any intercompany debt)dividends,

 

providedthat the Vendor agrees to indemnify the Purchaser and each Target Group memberfor any Losses any of them may suffer as a result of any illegality in relationto the arrangements referred to in paragraphs 34.1 and 34.2.

 

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**Bank Accounts**

 

35.                                 As soon asreasonably practicable the Vendor will provide the Purchaser with details ofall bank accounts maintained or used by any Target Group member (including, ineach case, the name and address of the bank with whom the account is kept andthe number and nature of the account) and the terms of each overdraft, loan orother financial facility.  The Vendorshall ensure that such bank accounts shall have designated operationalchequebooks at Completion.

 

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**SCHEDULE 15**

 

**Listed Software**

 
| **Highbury  Business Software Requirements** | ** ** | **Number of Licences** |
|----------------------------------------------|------------|------------------------|
| **Server  Room**                             |       |                   |
| Veritas Backup Exec                          |       | 5                      |
| Veritas Backup Exec SQL agent                |       | 3                      |
| Veritas Backup Exec Remote  agent            |       | 4                      |
| Veritas Backup Exec  Exchange agent          |       | 2                      |
|                                         |       |                   |
| **Layout  Software**                         |       |                   |
| Adobe Creative Suite  Premium Mac            |       | 3                      |
| Adobe Creative Suite  Premium PC             |       | 4                      |
| Adobe Photoshop CS                           |       | 6                      |
| Adobe Illustrator CS                         |       | 1                      |
| Quark 3 to 6                                 |       | 41                     |
| Agfa Apogee Create 2                         |       | 1                      |
|                                         |       |                   |
| **Web**                                      |       |                   |
| Macromedia MX 2004 Studio                    |       | 2                      |
| Homesite                                     |       | 1                      |
| Macromedia Flash MX 2004                     |       | 2                      |
|                                         |       |                   |
| **Fonts**                                    |       |                   |
| Adobe Font Folio                             |       | 4                      |
|                                         |       |                   |
| Windows Server                               |       | 15                     |
| Windows Server CAL                           |       | 300                    |
| SQL Server                                   |       | 3                      |
| SQL CAL                                      |       | 20                     |
| Exchange 2003 Server                         |       | 2                      |
| Exchange CAL                                 |       | 300                    |
| Office 2003 Pro                              |       | 20                     |
| Office 2003 Standard                         |       | 160                    |
| Office 2001/X for Mac                        |       | 48                     |
| Windows XP                                   |       | 200                    |

 

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| **EXECUTED** (but  not delivered until the date  hereof) as a deed by **HIGHBURY HOUSE  COMMUNICATIONS PLC** acting by two  directors or one director and the secretary:                                                                                                                                                                                   |   | )  )  )  )       |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|
| ** **                                                                                                                                                                                                                                                                                                                                                 |   |             |
| ** **                                                                                                                                                                                                                                                                                                                                                 |   |             |
| Director                                                                                                                                                                                                                                                                                                                                                   |   |             |
| ** **                                                                                                                                                                                                                                                                                                                                                 |   |             |
| ** **                                                                                                                                                                                                                                                                                                                                                 |   |             |
| Director/Secretary                                                                                                                                                                                                                                                                                                                                         |   |             |
|                                                                                                                                                                                                                                                                                                                                                       |   |             |
|                                                                                                                                                                                                                                                                                                                                                       |   |             |
| **EXECUTED** (but  not delivered until the date  hereof) as a deed by **ERGO SCIENCE  CORPORATION** acting  by                    who,  in  accordance with the laws of the State of Delaware,  is acting under the authority of that company:

  |   | )  )  )  )  )  ) |

 

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