Document:

exv10w36

 

Exhibit 10.36

REAL ESTATE PURCHASE AGREEMENT

     THIS
REAL ESTATE PURCHASE AGREEMENT (“Agreement”) is executed as of the 19th day of December,
2005 (the “Execution Date”), by DUKE REALTY Ohio, an Indiana general partnership (“Seller”), and
BUILD-A-BEAR WORKSHOP, INC., a Delaware corporation (“Buyer”).

WITNESSETH:

     1. Basic Terms. The following constitute the “Basic Terms” of this Agreement.

     A. Real Estate: The real estate and other property located in the Village of
Groveport, Franklin County, Ohio, consisting of approximately 22.6 acres and more particularly
described in the legal description attached hereto as Exhibit A (the “Land”), together with
(i) all right, title and interest of Seller in any easements, rights-of-way or other interests in,
on, under or to, any land, highway, street, road, right-of-way or avenue, open or proposed, in, on,
under, across, in front of, abutting or adjoining the Land, and all right, title and interest of
Seller in and to any awards for damage thereto by reason of a change of grade thereof, and (ii) all
improvements situated thereon, and (iii) all accessions, rights, privileges, appurtenances and all
the estate and rights of Seller in and to the foregoing or otherwise appertaining to any of the
property described in this paragraph (hereinafter collectively referred to as the “Real Estate”).

     B. Purchase Price: $2,216,000.

     C. Earnest Money: $140,000.

     D. Closing Date: December 28, 2005; provided, however, in the event that the
Environmental Report is no delivered to Buyer by December 22, 2005, then the Closing Date shall be
extended by one (1) day for each day after December 22, 2005 that the Environmental Report is
actually delivered to Buyer hereunder.

     E. Brokers: Duke Realty Services Limited Partnership for Seller and none for Buyer.

     F. Addresses for Notice:

	 	 	 	 	 
	 

	 	Seller:
	 	Duke Realty Ohio
	 

	 	 	 	Attn: Art Makris
	 

	 	 	 	5600 Blazer Parkway, Suite 100
	 

	 	 	 	Dublin, Ohio 43017
	 

	 	 	 	Fax No.: (614) 932-6290
	 
	 	 	 	 
	 

	 	Copy to:
	 	Duke Realty Corporation
	 

	 	 	 	Attn: Jodie L. Edminster
	 

	 	 	 	600 East 96th Street, Suite 100
	 

	 	 	 	Indianapolis, IN 46240
	 

	 	 	 	Fax No.: (317) 808-6790
	 
	 	 	 	 
	 

	 	Buyer:
	 	Build-A-Bear Workshop, Inc.
	 

	 	 	 	Attn: Dennis Sheldon
	 

	 	 	 	1954 Innerbelt Business Center Drive
	 

	 	 	 	St. Louis, MO 63114
	 

	 	 	 	Fax No.: (314) 423-8188
	 
	 	 	 	 
	 

	 	Copy to:
	 	Victor H. Lewitt, Esq.
	 

	 	 	 	Blumenfeld, Kaplan & Sandweiss, P.C.
	 

	 	 	 	168 N. Meramec Avenue, Suite 400
	 

	 	 	 	St. Louis, MO 63105
	 

	 	 	 	Fax No.: (314) 863-9388

 

 

     2. Purchase and Sale. Seller agrees to sell, and Buyer agrees to purchase, the Real
Estate for the price and subject to the Basic Terms and all the provisions hereinafter set forth.

     3. Payment of Purchase Price. The Purchase Price shall be paid to Seller as follows:

     (a) Upon execution of this Agreement by both Buyer and Seller, Buyer shall deposit the Earnest
Money with the Title Company (as defined in Paragraph 6 below). Such Earnest Money shall
be held, applied, returned or retained in accordance with the terms of this Agreement.

     (b) The remainder of the Purchase Price, plus or minus any prorations and adjustments made
pursuant to this Agreement, shall be paid by Buyer by wire transfer or other immediately available
funds at the Closing.

     4. Escrow Terms. Upon receipt of the Earnest Money from Buyer, Title Company shall
invest the Earnest Money in an interest bearing, federally insured account with a national bank or
federal savings bank. All interest on the Earnest Money shall be applied to the Purchase Price, or
if the Closing does not occur due to no default of Seller, remitted to Seller no later than
December 30. 2005, as liquidated damages and in consideration of that certain indemnification
agreement by and between Duke Construction Limited Partnership and Build-A-Bear Retail Management,
Inc., dated December 1, 2005..

     5. Inspection Period. At any time after the Execution Date, Buyer and its agents
shall have the right to enter upon the Real Estate and make all engineering, environmental and
other tests and inspections deemed necessary by Buyer to satisfy Buyer as to the condition or
suitability of the Real Estate. All such tests shall be at Buyer’s cost and expense. Buyer agrees
to immediately repair any and all damage to the Real Estate arising or resulting from such
inspection by Buyer or its agents, and Buyer shall defend, indemnify and hold Seller harmless from
all claims arising or resulting from such inspection or from the entry of Buyer or its agents onto
the Real Estate for any purpose. The provisions of this Paragraph 5 shall survive Closing
or the termination of this Agreement.

     This Agreement and the obligations of Buyer hereunder are specifically made contingent upon
the following contingency for the benefit of Buyer:

     (a) Receipt by Buyer, by December 22, 2005, from engineers and professional environmental
consultants of its choice, of reports, analyses, and/or written certifications (the “Environmental
Report”) satisfactory to Buyer in its sole discretion that no Hazardous Materials (as hereinafter
defined) exist on or under the Real Estate, and the Real Estate is not in violation of any federal,
state or local law, ordinance or regulation relating to industrial hygiene or the environmental
conditions on or under the Real Estate , including, without limitation, soil and groundwater
conditions. “Hazardous Materials” shall mean (i) substances defined as “hazardous substances”,
“hazardous materials”, or “toxic substances” in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. §9601, et seq.; (ii) asbestos in any
form, urea formaldehyde foam insulation, transformers or other equipment which contain dielectric
fluid or other fluids containing levels of polychlorinated biphenyls in excess of fifty (50) parts
per million; and (iii) any other chemical, material or substance, including, without limitation,
petroleum products, by-products and waste, exposure to which is prohibited, limited or regulated by
any governmental authority or may or could pose a hazard to the health and safety of the occupants
of the Real Estate, or to the soil or groundwater, including without limitation, any such
substances governed by applicable Ohio law. The above contingency set forth in this Section
5 is for the benefit of Buyer and may be waived by Buyer in whole or in part.

     Should the contingency set forth in this Section 5 not be satisfied or waived (as
evidenced by Buyer’s failure to timely terminate the Agreement by written notice to Seller within
one day following actual receipt of the Environmental Report) by Buyer within one day following
actual receipt of the Environmental Report, , then Buyer shall notify Seller of the
non-satisfaction of the above contingency, by written notice, at which time this Agreement will

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become null and void (except for those provisions which specifically survive the termination
hereof). Should Buyer fail to notify Seller of such non-satisfaction or waiver, then the
contingency in this Section 5 shall be deemed satisfied.

     6. Title Report and Permitted Exceptions.

     A. Seller, at its expense, has, prior to the Execution Date, delivered to Buyer from Stewart
Title Agency of Columbus (“Title Company”) a binder for an owner’s policy of title insurance on the
Real Estate (the “Title Commitment”) and copies of all recorded documents reflected as exceptions
thereon. All exceptions listed on the Title Commitment shall be deemed “Permitted Exceptions”
(except for those conditions the Title Company will agree to eliminate upon receipt of an affidavit
from Seller, sufficient to delete the standard exceptions, or upon receipt of a survey, and except
for any mortgages, deeds of trust or other liens or encumbrances on the Real Estate, all of which
are to be released prior to Closing). Seller agrees to pay all Title Company charges for or in
connection with the Title Commitment.

     B. Buyer’s obligation to close under this Agreement is contingent upon the Title Company
issuing to Buyer at Closing an ALTA Owner’s Policy of Title Insurance (the “Title Policy”) in the
amount of the Purchase Price and containing no exceptions other than the Permitted Exceptions and
current taxes and assessments not yet due and payable. All mortgages, deeds of trust or other
liens or encumbrances on the Real Estate shall be released prior to Closing and shall not appear as
exceptions to the Title Policy. The standard, preprinted exceptions shall be deleted from the
Title Policy. If Buyer is unable to obtain a marked up and signed Title Commitment representing
the Title Policy on the Closing Date, Buyer may terminate this Agreement, and the parties shall be
released from all further obligations hereunder, except those which specifically survive the
termination hereof. Notwithstanding anything to the contrary contained herein, Seller shall, at
Closing, pay all premiums and charges, but not endorsement charges, for or in connection with the
Title Policy.

     7. Survey. Seller has delivered to Buyer a staked boundary survey of the Real Estate
(the “Survey”) prepared by a registered land surveyor selected by Seller. Buyer, at its expense,
may update the Survey at its option (the “Updated Survey”). The Updated Survey shall (a) be
completed in accordance with the minimum standard detail requirements for an ALTA/ACSM survey and
be certified to Seller, Buyer, Buyer’s lender and the Title Company by such surveyor; (b) have one
perimeter description of the Real Estate; (c) show all easements, rights-of-way, setback lines,
encroachments and other matters affecting the use or development of the Real Estate; and (d) show
the acreage of the Real Estate.

     8. Cooperation of Seller. Seller shall assist Buyer and its representatives, whenever
reasonably requested by Buyer, in obtaining information about the Real Estate, provided that Buyer
shall reimburse Seller for any expenses incurred by Seller in connection therewith.

     9. Taxes and Assessments. Buyer will assume and agree to pay (i) so much of the real
estate taxes and assessments assessed against the Real Estate which first become due and payable
during the calendar year in which such closing occurs as shall be allocable to Buyer for the period
on and after the Closing, and Seller shall pay the balance of such taxes for such calendar year,
using, for Closing purposes, the tax rate and valuation assessment existing at the Closing Date if
the applicable tax rate or assessment has not then been determined, and all real estate taxes and
assessments first becoming due and payable after the year during which closing occurs. Seller
shall pay all real estate taxes not assumed by Buyer. Any taxes and assessments not assumed by
Buyer and not paid by Seller at or prior to Closing shall be allowed to Buyer as a credit against
the cash payment required on Closing, and Seller shall not be further liable for such taxes or
assessments. Seller shall pay any and all transfer taxes imposed by the county, state or
municipality in which the Real Estate is located.

     10. Representations, Warranties and Covenants by Seller. In order to induce Buyer to
purchase the Real Estate, Seller makes the following representations and warranties, which
representations and warranties shall survive the Closing for a period of one year hereunder and
shall inure to the benefit of Buyer, its successors and permitted assigns, and shall be considered
made as of the date hereof and as of the Closing Date:

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     A. Seller owns good and marketable fee title to the Real Estate and has all requisite power
and authority to execute this Agreement and the closing documents described herein.

     B. Seller has no actual knowledge of any action, litigation or condemnation proceeding pending
in any court or before any governmental agency by any person affecting the Real Estate. If Seller
receives actual knowledge of any such proceedings between the date of this Agreement and the
Closing Date, Seller shall give Buyer written notice thereof, and thereupon Buyer shall have the
right, if there is a materially adverse impact on Buyer’s intended use or development of the Real
Estate as a result thereof, to terminate this Agreement.

     C. To the best of Seller’s knowledge, all utility charges for the Real Estate payable by
Seller have been paid, and no utility is making any claims for any due or past due statements. To
the best of Seller’s knowledge, utilities are or will be available to the Real Estate prior to
development of the Real Estate, and the Real Estate is zoned properly for Buyer’s intended
development pursuant to the construction contract (“Construction Contract”) to be signed by the
parties or their affiliates of even date herewith.

     D. To the best of Seller’s knowledge, the conveyance of the Real Estate pursuant hereto will
not violate any applicable statute, ordinance, governmental restriction or regulation or any
private restriction or agreement.

     E. To the best of Seller’s knowledge, there are no violations of any federal, state, local or
other governmental building, zoning, health, safety, platting, subdivision, environmental, or other
law, ordinance, regulation, or private restriction affecting the Real Estate.

     If Seller receives any such notice of violation between the date of this Agreement and the
Closing Date, Seller shall give Buyer written notice thereof, and thereupon Buyer shall have the
right, if there is a materially adverse impact on Buyer’s intended use or development of the Real
Estate as a result thereof, to terminate this Agreement.

     F. No notice of any special assessments against the Real Estate has been received by Seller.

     G. There are no parties in possession of any portion of the Real Estate as lessees, tenants at
sufferance or trespassers.

     H. Other than this Agreement, there are no sale contracts, options to purchase, leases, rights
of first refusal or other agreements of sale or lease for or affecting the Real Estate.

     Buyer may elect to close the transaction described in this Agreement with knowledge of a
breach by Seller of one or more of the foregoing representations and warranties without such
election constituting a waiver or release by Buyer of any claims due to such breach.

     Buyer acknowledges that it has had or will have the opportunity to examine the Real Estate.
Seller (or any of its agents or representative) has not made and does not make, and is unwilling to
make under this Agreement, any representations as to the physical condition, use or any other
matter or thing affecting or related to the Real Estate, except as may be expressly set forth
herein. Buyer acknowledges that no such representations have been made, and Buyer agrees to take
the Real Estate “AS IS”.

     11. Damage, Destruction and Eminent Domain. Risk of loss to the Real Estate shall
remain in Seller until the Closing Date.

     A. If, prior to the Closing Date, the Real Estate or any substantial part thereof is damaged
or destroyed by fire, the elements, or by any other cause of whatever nature, Buyer shall have the
option to either: (i) terminate this Agreement by written notice delivered to Seller within thirty
(30) days after the date Buyer receives written notice from Seller notifying Buyer of such damage;
or (ii) proceed to close the transaction contemplated hereunder despite said

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destruction or damage
to the Real Estate, in which event Seller shall, at Buyer’s election,
either (x) repair such damage or destruction prior to the Closing, at Seller’s sole expense,
or (y) reimburse Buyer for the cost of repairing the same by allowing Buyer to deduct such cost
from the Purchase Price payable to Seller at the Closing, or (z) assign to Buyer Seller’s right to
make claim under and receive the proceeds from all policies insuring Seller against any such loss
or damage.

     B. If, prior to Closing, the Real Estate or any material part thereof shall be taken by
eminent domain, Buyer may, at its option, by written notice to Seller, terminate this Agreement..
If, despite said material taking, Buyer elects to proceed to close the transaction contemplated
hereunder or if there is less than a material taking, there shall be no reduction in or abatement
of the Purchase Price, and Seller shall assign to Buyer all of Seller’s right, title and interest
in and to any award made or to be made in the condemnation proceeding.

     12. Closing. The closing of the purchase and sale of the Real Estate (the “Closing”)
shall occur at the office of the Title Company or another location selected by both Seller and
Buyer on the Closing Date, unless Buyer and Seller shall agree upon a different date for the
Closing.

     13. Closing Documents. At the Closing, Seller shall execute and deliver to Buyer (a)
a limited warranty deed conveying fee simple title to the Real Estate, reserving an easement for
signage and landscaping as described in Exhibit B attached hereto, and subject to the
Permitted Exceptions, to Buyer as required under this Agreement; (b) a vendor’s affidavit in a form
satisfactory to enable the Title Company to delete the standard printed exceptions from the title
policy; (c) a Certification of Nonforeign Status pursuant to Section 1445(b)(2) of the Internal
Revenue Code; (d) a Transfer Tax Statement or return, if applicable; (e) a closing statement; (f)
an easement (satisfactory in form to both Buyer and Seller) over Seller’s land described in
Exhibit B, attached hereto and made a part hereof, for the purpose of installation, use,
maintenance, replacement and repair of sanitary sewer lines; and (g) such other instruments,
certificates or affidavits as may be provided herein or as Buyer or Title Company may reasonably
request to effect the intention of the parties hereunder. Buyer shall pay all recording fees. Any
escrow or closing fees charged by the Title Company shall be divided equally between Buyer and
Seller. Seller shall pay the cost of releasing fees or other costs related to Seller’s
obligations.

     14. Possession. Possession of the Real Estate shall be delivered to Buyer on the
Closing Date in the same condition as it is now, free and clear of the claims of any other party
except as permitted hereunder.

     15. Rights and Obligations. The rights and obligations of Seller and Buyer herein
contained shall inure to the benefit of and be binding upon the parties hereto and their respective
personal representatives, heirs, successors and assigns.

     16. Notices. All notices required or permitted to be given hereunder shall be in
writing and delivered either via telefax, in person or by certified or registered first-class
prepaid mail, return receipt requested, to Seller or Buyer at their respective addresses set forth
in the Basic Terms, or at such other address, notice of which may have been given to the other
party in accordance with this Paragraph 16. Any notice given in accordance with this
paragraph shall be deemed to have been duly given or delivered on the date the same is personally
delivered to the recipient or received or refused by the recipient as evidenced by the return
receipt.

     17. Assignment. Buyer shall not be entitled to assign this Agreement or its rights
hereunder without Seller’s prior written consent, which consent, with respect to an assignment to
an affiliate of Seller, shall not be unreasonably withheld or delayed. In the event of any
permitted assignment hereunder, Buyer shall remain liable for the performance and observance of any
terms, covenants and conditions of this Agreement which are the responsibility of the Buyer.

     18. Complete Agreement. This Agreement represents the entire agreement between Seller
and Buyer covering everything agreed upon or understood in this transaction. There are

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no oral
promises, conditions, representations, understandings, interpretations or terms of any kind as
conditions or inducements to the execution hereof or in effect between the parties. No
change or addition shall be made to this Agreement except by a written agreement executed by
Seller and Buyer.

     19. Authorized Signatories. The persons executing this Agreement for and on behalf of
Buyer and Seller each represent that they have the requisite authority to bind the entities on
whose behalf they are signing.

     20. Partial Invalidity. If any term, covenant or condition of this Agreement is held
to be invalid or unenforceable in any respect, such invalidity or unenforceability shall not affect
any other provision hereof, and this Agreement shall be construed as if such invalid or
unenforceable provision had never been contained herein.

     21. Use of Brokers. Each party represents and warrants to the other that it has dealt
with no broker, finder or other person with respect to this Agreement or the transactions
contemplated hereby, except for the Broker(s) identified in the Basic Terms. Seller shall pay a
commission or fee to such Broker(s), provided this transaction closes, pursuant to separate
agreement. Seller and Buyer each agree to indemnify and hold harmless one another against any
loss, liability, damage, cost, expense or claim incurred by reason of any brokerage commission or
finder’s fee alleged to be payable because of any act, omission or statement of the indemnifying
party other than to such Broker(s). Such indemnity obligation shall be deemed to include the
payment of reasonable attorneys’ fees and court costs incurred in defending any such claim.

     22. Attorneys’ Fees. In the event that either party shall bring an action or legal
proceeding for an alleged breach of any provision of this Agreement or any representation,
warranty, covenant or agreement herein set forth, or to enforce, protect, determine or establish
any term, covenant or provision of this Agreement or the rights hereunder of either party, the
prevailing party shall be entitled to recover from the nonprevailing party, as a part of such
action or proceedings, or in a separate action brought for that purpose, reasonable attorneys’ fees
and costs, expert witness fees and court costs as may be fixed by the court or jury.

     23. Governing Law; Construction.

     (a) This Agreement shall be interpreted and enforced according to the laws of the state in
which the Real Estate is located.

     (b) All headings and sections of this Agreement are inserted for convenience only and do not
form part of this Agreement or limit, expand or otherwise alter the meaning of any provisions
hereof.

     (c) This Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original and all of which shall constitute one and the same agreement.

     (d) The provisions of this Agreement are intended to be for the sole benefit of the parties
hereto and their respective successors and assigns, and none of the provisions of this Agreement
are intended to be, nor shall they be construed to be, for the benefit of any third party.

     (e) Time is of the essence with respect to the duties and obligations of the parties
hereunder.

     24. Like-Kind Exchange. Seller shall have the right to identify other real estate of
like kind which it desires to acquire in exchange for the Real Estate (the “Replacement Real
Estate”) in a transaction that Seller intends to qualify as a tax-free exchange under Section 1031
of the Internal Revenue Code. Buyer shall reasonably cooperate, at Seller’s cost, with Seller in
order that Seller may structure all or part of its sale of the Real Estate as such tax-free
exchange, provided that (i) the Closing Date hereunder is not delayed, and (ii) Seller shall
indemnify and hold Buyer harmless from and against any and all liabilities, losses, damages,

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claims, costs, and expenses (including without limitation attorneys’ fees and costs) incurred by
Buyer as a result of or in connection with its cooperation. If at the time of Closing of Buyer’s
purchase of the Real Estate hereunder, Seller has not identified or is not ready to acquire the
Replacement Real Estate, Seller shall have the right to assign all of its right, title and
interest in and to this Agreement to a qualified intermediary.

     25. Contingencies. This Agreement is contingent upon the satisfaction of the
following matters:

     Buyer entering into the Construction Contract with Seller’s affiliate, Duke Construction
Limited Partnership (“DCLP”), on or before the Closing Date pursuant to which DCLP will construct
an industrial building upon the Real Estate, such contract to be in the form of Exhibit C
attached hereto and incorporated by reference herein.

     Should the contingency set forth in this Section 25 not be satisfied or waived within
the time allowed above, then this Agreement will become null and void (except for the provisions
herein which expressly survive this Agreement).

     26. Default.

     A. If Seller defaults in its obligations hereunder, Buyer may, by notice to Seller, terminate
this Agreement, in which event the Earnest Money shall be refunded to Buyer, or Buyer may exercise
any and all remedies available at law or in equity.

     B. If Buyer defaults in the performance of any of its obligations hereunder, Seller shall be
entitled to terminate this Agreement, and may exercise any and all remedies available at law or in
equity.

     IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of the date
first above written.

	 	 	 	 	 	 	 
	 

	 	“BUYER”	 	 
	 
	 	 	 	 	 	 
	 	 	BUILD-A-BEAR WORKSHOP, INC.,	 	 
	 
	 	 	 	 	 	 
	 

	 	By: 	/s/ Maxine Clark	 
	 

	 	 	 	 
 	 	 
	 
	 	 	 	 	 	 
	 

	 	Printed:	 Maxine Clark	 
	 

	 	 	 	 
	 	 
	 
	 	 	 	 	 	 
	 

	 	Title: 	CEO	 
	 

	 	 	 	 
	 	 

	 	 	 	 	 	 	 
	 	 	“SELLER:
	 
	 	 	 	 	 	 
	 	 	DUKE REALTY OHIO
	 	 	an Indiana general partnership
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Duke Realty Limited Partnership	 	 
	 

	 	 	 	its Managing Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Duke Realty Corporation	 	 
	 

	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ James T. Clark	 	 
	 

	 	 	 	 

     James T. Clark
	 	 
	 

	 	 	 	     Senior Vice President	 	 
	 

	 	 	 	     Columbus	 	 

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	STATE OF

	 	Missouri	 	 	)	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	)	 	 	SS:	 	 
	COUNTY OF

	 	St. Louis	 	 	)	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

     Before me, a Notary Public in and for said County and State, personally appeared
Maxine Clark, by me known to be the CEO of Build-A-Bear Workshop, Inc., a
Delaware corporation, who acknowledged execution of the foregoing “Agreement” on behalf of said
corporation.

     WITNESS my hand and Notarial Seal this 20 day of December, 2005.

	 	 	 	 	 
	 

	 	/s/ Donnene F. Smith 

Notary Public
	 	 
	 
	 	 	 	 
	 

	 	Donnene F. Smith 

(Printed Signature)
	 	 

	 	 	 	 	 
	My Commission Expires:
	 	8/4/2008	 	 
	 

	 	 

	 	 
	My County of Residence:
	 	St. Louis	 	 
	 

	 	 

	 	 

	 	 	 	 	 	 	 	 	 	 	 
	STATE OF OHIO

	 	 	)	 	 	 	 	 
	 

	 	 	 	 	)	 	 	SS:	 	 
	COUNTY OF

	  Franklin		 	)	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

     Before me, a Notary Public in and for said County and State, personally appeared James T.
Clark, by me known to be the Senior Vice President, Columbus of Duke Realty Corporation, an Indiana
corporation, the general partner of Duke Realty Limited Partnership, an Indiana limited
partnership, the Managing Partner of Duke Realty Ohio, an Indiana general partnership, who
acknowledged execution of the foregoing “Real Estate Purchase Agreement” on behalf of said general
partnership.

     WITNESS my hand and Notarial Seal this 20 day of December, 2005.

	 	 	 	 	 
	 

	 	/s/ Aimee D’Amore 

Notary Public
	 	 
	 
	 	 	 	 
	 

	 	Aimee D’Amore 

(Printed Signature)
	 	 

	 	 	 	 	 
	My Commission Expires:
	 	10-20-2009	 	 
	 

	 	 

	 	 
	My County of Residence:
		Franklin	 	 
	 

	 	 

	 	 

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EXHIBIT A

LEGAL DESCRIPTION OF REAL ESTATE

DESCRIPTION OF A 22.599 ACRE TRACT OF LAND

Situated
in the State of Ohio, County of Franklin, Village of Groveport, located in Section 29,
Township 11, Range 21, Congress Lands and being all of that 22.599 acre tract as conveyed to Duke
Realty Ohio by deed of record in Instrument Number 200401160012598, said 22.599 acres being more
particularly bounded and described as follows:

Beginning at an iron pin set in the westerly right-of-way line of Green Pointe Drive South, as
shown of record in Plat Book 89, Pages 50 and 51, being the southeasterly corner of lot 8 of that
subdivision entitled “Green Pointe Business Park” of record
in Plat Book 85, Pages 100 and 101, as
conveyed to Meritex Green Pointe, LLC by deed of record in Instrument Number 200501100006000, and
being in the half-section line of said Section 29;

Thence S 03° 45’ 45” W, with the westerly right-of-way line of said Green Pointe Drive South, a
distance of 101.38 feet to an iron pin set at a point of curvature of a curve to the right;

Thence Southwesterly, continuing with the westerly right-of-way line of said Green Pointe Drive
South, with the arc of said curve (Delta = 28° 30’ 52”, Radius = 1600.00 feet, Arc Length = 796.27
Feet) a chord bearing and distance of S 18° 01’ 11” W, 788.08 feet to an iron pin set at the
northeasterly corner of that 8.299 acre tract as conveyed to Duke Realty Ohio by deed of record in
Instrument Number 200401160012598;

Thence
N 86° 14’ 40” W, with the northerly line of said 8.299 acre tract, and with a northerly
line of that 4.846 acre tract as conveyed to GPS Consumer Direct Inc. by deed of record in
Instrument Number 200011020222617, a distance of 1000.35 feet
to a 3⁄4” iron pin found at a corner
thereof;

Thence N 03° 53’ 42” E, with an easterly line of said 4.846 acre tract, a distance of 865.38 feet
to an iron pin set in the southerly line of that 0.57 acre tract as conveyed to Melvin L. Eberwein
Jr. by deed of record in Instrument Number 200505250100720, being in the half-section line of said
Section 29;

Thence
S 86° 12’ 57” E, with the southerly line of said 0.57 acre tract, and with the southerly
line of that 37.68 acre tract as conveyed to Quentin F. Schlaegel by deed of record in Deed Book
3440, Page 143, being the said half-section line, a distance of
423.80 feet to an iron pin set at
the southwesterly corner of said lot 8, being the southeasterly corner of said 37.68 acre tract,
and being the center of said Section 29;

Thence S 86° 14’ 40” E, with the southerly line of said lot 8, being the half-section line of said
Section 29, a distance of 768.63 feet to the True Point of Beginning, and containing 22.599 acres
of land, more or less, as calculated by the above courses. Subject, however, to all legal
highways, easements, and restrictions of record. The above description was prepared by Clark E.
White, P.S. #7868 on December 14, 2005.

All iron
pins set are
3⁄4”
diameter, 30” long with plastic cap inscribed “Advanced 7661”.

All references used in this description can be found at the Franklin County Recorder’s Office,
Franklin County, Ohio. The Basis of Bearings used in this description was transferred from a GPS
survey of Franklin County Monuments “26-693” and “HAMILTON” published by the Franklin County
Engineer’s Office, and is based upon the NAD83 Ohio State Plane Coordinate System, South Zone, 1986
adjustment, and determines the bearing between said monuments as N 06° 55’ 29” W.

ADVANCED CIVIL DESIGN, INC.

Clark E.
White. Ohio P.S. #7868
               Date:exv10w38

 

EXHIBIT 10.38

Agreement for the purchase of the whole of the issued share capital of The
Bear Factory Limited

Dated March 3 2006

The Hamleys Group Limited

(Vendor)

Build-A-Bear Workshop UK Holdings Limited

(Purchaser)

The Bear Factory Limited

(Company)

DentonWildeSapte

	 	 	 
	One Fleet Place

	 	T +44 (0)20 7242 1212
	London EC4M 7WS

	 	T +44 (0)20 7246 7777
	United Kingdom

	 	info@dentonwildesapte.com
	 

	 	www.dentonwildesapte.com

1

 

Contents

	 	 	 	 	 	 	 
	1

	 	Definitions and interpretation
	 	 	1	 
	 
	 	 	 	 	 	 
	2

	 	Sale and purchase
	 	 	6	 
	 
	 	 	 	 	 	 
	3

	 	Consideration
	 	 	6	 
	 
	 	 	 	 	 	 
	4

	 	Completion Accounts and adjustment payment
	 	 	6	 
	 
	 	 	 	 	 	 
	5

	 	Completion arrangements
	 	 	8	 
	 
	 	 	 	 	 	 
	6

	 	Discharge of indebtedness
	 	 	9	 
	 
	 	 	 	 	 	 
	7

	 	Indemnities
	 	 	9	 
	 
	 	 	 	 	 	 
	8

	 	Warranties
	 	 	10	 
	 
	 	 	 	 	 	 
	9

	 	Tax
	 	 	11	 
	 
	 	 	 	 	 	 
	10

	 	Limitations on Vendor’s Warranty liability
	 	 	11	 
	 
	 	 	 	 	 	 
	11

	 	Employees
	 	 	15	 
	 
	 	 	 	 	 	 
	12

	 	Releases, Indemnities and Acknowledgement
	 	 	16	 
	 
	 	 	 	 	 	 
	13

	 	Restrictions on Vendor’s business activities
	 	 	17	 
	 
	 	 	 	 	 	 
	14

	 	Maintenance and availability of records
	 	 	17	 
	 
	 	 	 	 	 	 
	15

	 	Confidentiality
	 	 	18	 
	 
	 	 	 	 	 	 
	16

	 	Announcements
	 	 	19	 
	 
	 	 	 	 	 	 
	17

	 	Costs and expenses
	 	 	20	 
	 
	 	 	 	 	 	 
	18

	 	Payments
	 	 	20	 
	 
	 	 	 	 	 	 
	19

	 	Assignment
	 	 	20	 
	 
	 	 	 	 	 	 
	20

	 	Remedies and waivers
	 	 	20	 
	 
	 	 	 	 	 	 
	21

	 	Further assurance
	 	 	21	 
	 
	 	 	 	 	 	 
	22

	 	Entire agreement
	 	 	21	 
	 
	 	 	 	 	 	 
	23

	 	Counterparts
	 	 	21	 
	 
	 	 	 	 	 	 
	24

	 	Notices
	 	 	22	 
	 
	 	 	 	 	 	 
	25

	 	Governing law and jurisdiction
	 	 	22	 
	 
	 	 	 	 	 	 

Page 1

 

	 	 	 	 	 	 	 
	 

	 	Schedule 1 — Particulars of the Company and the Subsidiary
	 	 	24	 
	 
	 	 	 	 	 	 
	 

	 	Schedule 2 — Warranties
	 	 	26	 
	 
	 	 	 	 	 	 
	 

	 	Schedule 3 — Particulars of the Property
	 	 	44	 
	 
	 	 	 	 	 	 
	 

	 	Schedule 4 — Particulars of Intellectual Property Rights
	 	 	54	 
	 
	 	 	 	 	 	 
	 

	 	Schedule 5 — Completion Accounts
	 	 	55	 
	 
	 	 	 	 	 	 
	 

	 	Schedule 6 — Completion arrangements
	 	 	58	 

Page 2

 

Share purchase agreement

Dated March 3 2006

Between

	(1)	 	The Hamleys Group Limited (the Vendor) registered in England under no. 2352435 whose
registered office is at 188-196 Regent Street London W1R 6BT; and
	 
	(2)	 	Build-A-Bear Workshop UK Holdings Limited (the Purchaser) registered in England under number
5651132 whose registered office is at St Stephens House, Arthur Road, Windsor, Berkshire, SL4
1RU; and
	 
	(3)	 	The Bear Factory Limited (the Company) registered in England under no. 4036762 whose
registered office is at 188-196 Regent Street London W1R 6BT.

Recital

The Vendor has agreed to sell the whole of the issued share capital of the Company to the
Purchaser on and subject to the provisions of this Agreement.

It is agreed

	1	 	Definitions and interpretation
	 
	1.1	 	Definitions
	 
	 	 	In this Agreement the following definitions apply.
	 
	 	 	Accounts means the audited balance sheet and profit and loss account of the Company for the
financial period ended on and as at the Accounts Date, including the reports and notes
annexed thereto.
	 
	 	 	Accounts Date means 26 March 2005.
	 
	 	 	Act means the Companies Acts 1985 to 1989.
	 
	 	 	Business means the business of the Company as carried on at Completion, being the sale of
stuff-your-own animals in an interactive in-store experience which involves the customer
being actively engaged in making or dressing an animal.
	 
	 	 	Company’s Accounting Principles has the meaning given to it in Schedule 5.
	 
	 	 	Company Charges means the RBS Security Documents which were executed by the Company.
	 
	 	 	Company Indebtedness means indebtedness (whether or not due for payment) of the Company
owing to any member of the Vendor’s Group or to Baugur Group HF or any of Baugur Group HF’s
other subsidiaries, but shall not include any items on normal trading account.
	 
	 	 	Completion means completion of the obligations of the parties required by Clause 5 and
Schedule 6.

Page 1

 

	 	 	Completion Accounts means the statement of the net current assets of the Company as at the
close of business on the Completion Date, to be prepared in accordance with Clause 4 and
Schedule 5.
	 
	 	 	Completion Date means the date of Completion.
	 
	 	 	Confidential Information means all information received or obtained by a party as a result
of entering into or performing this Agreement and which relates to:

	 	(a)	 	the negotiations concerning this Agreement;
	 
	 	(b)	 	the provisions of this Agreement;
	 
	 	(c)	 	the subject matter of this Agreement; or
	 
	 	(d)	 	another party.

	 	 	Confidential Business Information means all information which is not publicly known and
which is used in or otherwise relates to the Company’s business, customers or financial or
other affairs.
	 
	 	 	Consideration has the meaning given to it in Clause 3.
	 
	 	 	Data Room means the data room comprising the documents made available to the Purchaser and
its advisors as described in the index attached to the Disclosure Letter, such index being
in the agreed form.
	 
	 	 	Disclosure Letter means the letter, together with the annexures thereto, written by the
Vendor to the Purchaser as the disclosure letter for the purposes of this Agreement and
accepted by the Purchaser on 3 March 2006.
	 
	 	 	Draft Accounts has the meaning given to it in Clause 4.2.
	 
	 	 	Encumbrance means any mortgage, charge, pledge, hypothecation, lien, assignment by way of
security, title retention, option, right to acquire, right of pre-emption, right of set off,
counterclaim, trust arrangement or any other security , preferential right, equity or
restriction, and any agreement to give or create any of the foregoing.
	 
	 	 	Employees means those individuals engaged by the Company in the Business as at the
Completion Date as listed in the Disclosure Letter.
	 
	 	 	Employment Regulations means the Transfer of Undertakings (Protection of Employment
Regulations 1981).
	 
	 	 	Franchise Agreements means the several agreements pursuant to which the Company has granted
to each of the other parties thereto, not being members of the Vendor’s Group, certain
rights to enable such parties to carry on the business of selling Products in specified
territories, copies of which are attached to the Disclosure Letter and more particularly set
out in Schedule 4.
	 
	 	 	Guarantees has the meaning given to it in Clause 12.1
	 
	 	 	ICTA means the Income and Corporation Taxes Act 1988.
	 
	 	 	Indemnified Warranties means the Warranties set out in paragraphs 2.1, 2.2, 2.3, 2.4, 2.5,
8.1, 9.1, 9.2, 13.1, 13.2, 14.2, 19, 21 and 23 of Schedule 2, each an Indemnified Warranty.
	 
	 	 	Independent Accountant has the meaning given to it in Clause 4.6.

Page 2

 

	 	 	Intellectual Property Rights means patents, trade marks, service marks, trade names, domain
names, registered designs, designs, semiconductor topography rights, database rights of
unfair extraction and reutilisation, copyrights and other forms of intellectual or
industrial property (in each case in any part of the world, whether or not registered or
registrable and if registered or registrable for their full period of registration with all
extensions and renewals, and including all applications for registration or otherwise),
know-how, inventions, formulae, confidential or secret processes and information, and any
other protected rights and assets, and any licences and permissions in connection with the
foregoing.
	 
	 	 	Management Accounts means the unaudited management accounts of the Company for the period of
9 months ended on and as at the Management Accounts Date, copies of which are attached to
the Disclosure Letter, but excluding any budget or forecast contained therein.
	 
	 	 	Management Accounts Date means 24 December 2005.
	 
	 	 	Net Current Asset Value means the aggregate value of stocks, debtors, cash at bank and in
hand, prepayments and accrued income of the Company less the aggregate of all creditors of
the Company in each case as at the close of business on the Completion Date, as shown in the
Completion Accounts to be agreed or determined in accordance with Clause 4 and Schedule 5.
	 
	 	 	Parties means the parties to this Agreement and Party means any thereof.
	 
	 	 	Pre-Sale Dividend means the interim dividend that will be paid by the Company to the Vendor
prior to the Completion Date.
	 
	 	 	Products means a stuff-your-own-animal or the product of other retail business involving an
interactive in-store customer experience where the customer is actively engaged in making or
dressing the animal.
	 
	 	 	Property means each property particulars of which are set out in Schedule 3.
	 
	 	 	Property Documents means the documents listed in Schedule 3.
	 
	 	 	Purchaser’s Group means the Purchaser, its subsidiaries and subsidiary undertakings, holding
company and all other subsidiaries or subsidiary undertakings of its holding company from
time to time.
	 
	 	 	Purchaser’s Solicitors means Bryan Cave of 33 Cannon Street London EC4M 5TE.
	 
	 	 	Purchaser’s Solicitors’ Client Account means:
	 
	 	 	Bank: HSBC PLC, Westminster Branch, 22 Victoria Street,
London SW1H 0NJ;

Bryan Cave A/C No. 2;

A/C No: 63065464;

Sort Code: 40-02-06.
	 
	 	 	Purchaser Warranties means the warranties given by the Purchaser pursuant to Clause 8.2.
	 
	 	 	RBS means The Royal Bank of Scotland plc.
	 
	 	 	RBS Security Documents means:

	 	(a)	 	a composite guarantee and debenture dated 13 August 2003 executed by the
Company and certain other members of the Vendor’s Group in favour of RBS as security
trustee;
	 
	 	(b)	 	a debenture dated 2 September 2003 supplemental to the composite guarantee and
debenture referred to in paragraph (a) above executed by the Company and certain

Page 3

 

	 	 	 	other members of the Vendor’s Group in favour of RBS as security trustee on behalf
of itself and others; and
	 
	 	(c)	 	a supplemental debenture dated 28 November 2003 supplemental to the debenture
referred to in paragraph (b) above executed by the Company and certain other members of
the Vendor’s Group in favour of RBS as security trustee on behalf of itself and others.

	 	 	Regent Street Concession Agreement means an agreement in the agreed form to be entered into
at Completion between the Vendor, the Company and the Purchaser pursuant to which the Vendor
will grant the Company a concession at the Vendor’s Regent Street store on the terms and
conditions set out therein.
	 
	 	 	Restricted Area means anywhere in the world.
	 
	 	 	Restricted Business means the Business or other retail business involving an interactive
in-store customer experience where the customer is actively engaged in making or dressing
the animal and the purchase of stuff-your-own-animals.
	 
	 	 	Restricted Period means the period of four years beginning on the Completion Date.
	 
	 	 	Shares means the entire issued share capital of the Company.
	 
	 	 	Subsidiary means Hobbies and Models Limited registered in England under no. 1207167, details
of which are set out in Part 2 of Schedule 1.
	 
	 	 	Tax Authority has the same meaning as in the Tax Deed.
	 
	 	 	Taxation or Tax has the same meaning as in the Tax Deed.
	 
	 	 	Tax Deed means the deed in respect of Taxation in the agreed form.
	 
	 	 	Tax Warranties means the Warranties set out in Part 2 of Schedule 2.
	 
	 	 	Title Warranties means the Warranties set out in paragraph 23 of Schedule 2.
	 
	 	 	TMA 1970 means the Taxes Management Act 1970.
	 
	 	 	Transaction means the arrangements contemplated by this Agreement and ancillary documents.
	 
	 	 	Transitional Services Agreement means an agreement in the agreed form to be entered into at
Completion between the Vendor, the Company and the Purchaser pursuant to which the Vendor
will provide certain services to the Company for a specified period following Completion on
the terms and conditions set out therein.
	 
	 	 	Vendor’s Accountants means KPMG LLP of 2 Cornwall Street, Birmingham B3 2DL.
	 
	 	 	Vendor Charges means the RBS Security Documents which created Encumbrances over the Shares.
	 
	 	 	Vendor’s Group means the Vendor and its subsidiaries and subsidiary undertakings from time
to time and Corporal Limited, but excludes the Company and the Subsidiary, and also (to
avoid doubt) excludes Baugur Group hf and any subsidiary or subsidiary undertaking of Baugur
Group hf other than the Vendor and its subsidiaries and subsidiary undertakings from time to
time (excluding the Company and the Subsidiary).
	 
	 	 	Vendor Indebtedness means any indebtedness (whether or not due for payment) owing to the
Company from any member of the Vendor’s Group or of Baugur Group hf or any of Baugur Group
hf’s other subsidiaries, but shall not include any items on normal trading account.

Page 4

 

	 	 	Vendor’s Solicitors means Denton Wilde Sapte of One Fleet Place London EC4M 7WS.
	 
	 	 	Vendor’s Solicitors’ Client Account means Denton Wilde Sapte Client Account, The Royal Bank
of Scotland plc, 1 Fleet Street, London EC4Y 1BD, Sort Code: 15.80.00, Account No: 67072440.
	 
	 	 	Warranties means the statements set out in Schedule 2.

	1.2	 	Interpretation

	 	 	In this Agreement, unless otherwise specified:

	 	(a)	 	the words and expressions defined in sections 736, 736A, 741, 742 and 744 of
the Act have the same meanings;
	 
	 	(b)	 	reference to any statute, bye-law, regulation, rule, delegated legislation or
order is to any statute, bye-law, regulation, rule, delegated legislation or order as
amended, modified or replaced from time to time and to any statute, bye-law,
regulation, rule, delegated legislation or order replacing or made under any of them;
	 
	 	(c)	 	references to any Clause, paragraph or Schedule are to those contained in this
Agreement and all Schedules to this Agreement are an integral part of this Agreement;
	 
	 	(d)	 	headings are for ease of reference only and shall not be taken into account in
construing this Agreement;
	 
	 	(e)	 	reference to any English legal concept, term, action, remedy, method of
judicial proceeding, legal document, legal status, court or official shall, in respect
of any jurisdiction other than England and Wales, be deemed to refer to what most
nearly approximates in that jurisdiction to that reference;
	 
	 	(f)	 	reference to any English statute, bye-law, regulation, rule, delegated
legislation or order shall, in relation to any assets owned, liabilities incurred,
company incorporated in, or business carried on in any jurisdiction other than England
and Wales, be deemed to include what most nearly approximates in that jurisdiction to
that reference;
	 
	 	(g)	 	the expression this Clause shall unless followed by reference to a specific
provision be deemed to refer to the whole clause (not merely the sub-clause, paragraph
or other provision) in which the expression occurs;
	 
	 	(h)	 	person includes any individual, firm, company or other incorporated or
unincorporated body;
	 
	 	(i)	 	in writing means any communication made by letter or fax, and written shall be
construed accordingly;
	 
	 	(j)	 	business day means a day (not being a Saturday or Sunday) on which banks are
open for normal banking business in London;
	 
	 	(k)	 	agreement means any agreement or commitment whether conditional or
unconditional and whether by deed, under hand, oral or otherwise;
	 
	 	(l)	 	law includes any legislation, any common or customary law, constitution,
decree, judgment, order, ordinance, treaty or other legislative measure in any
jurisdiction and any directive, request, requirement, guidance or guideline (in each
case, whether or not having the force of law but, if not having the force of law,
compliance with which is in accordance with the general practice of persons to whom the
directive, request, requirement, guidance or guideline is addressed);

Page 5

 

	 	(m)	 	a document is in the agreed form if it is in the form of a draft agreed between
and initialled by or on behalf of the Vendor and the Purchaser on or before the date of
this Agreement; and
	 
	 	(n)	 	a person shall be deemed to be connected with another if that person is
connected with another within the meaning of section 839 of ICTA.

	2	 	Sale and purchase
	 
	2.1	 	Sale and purchase
	 
	 	 	The Vendor shall sell with full title guarantee and the Purchaser shall purchase the Shares
free from any Encumbrance and with all rights attached or accruing to them on and after the
date of this Agreement, save for the Pre-Sale Dividend paid by the Company to the Vendor.
	 
	2.2	 	Waiver of pre-emption and other rights
	 
	 	 	The Vendor waives:

	 	(a)	 	all pre-emption rights in respect of the Shares; and
	 
	 	(b)	 	any other rights which may restrict the transfer of the Shares;

	 	 	conferred on the Vendor whether by the articles of association of the Company, by agreement
or otherwise.

	3	 	Consideration
	 
	 	 	The consideration for the sale of the Shares shall be the payment by the Purchaser to
the Vendor, in accordance with this Agreement, of the sum of £15,000,000 (fifteen million
pounds sterling), adjusted pursuant to Clause 4 (the Consideration).
	 
	4	 	Completion Accounts and adjustment payment
	 
	4.1	 	Stock Valuation
	 
	 	 	The Vendor and the Purchaser shall procure that a valuation of the stock and work in
progress of the Company as at close of business on the Completion Date is undertaken in
accordance with the principles set out in Schedule 5 by representatives of the Vendor and
the Purchaser jointly.
	 
	4.2	 	Preparation of Draft Accounts
	 
	 	 	Following Completion the Vendor shall procure:

	 	(a)	 	the preparation by the Vendor’s Accountants of the draft Completion Accounts
(the Draft Accounts) in accordance with Schedule 5, showing the estimated Net Current
Asset Value; and
	 
	 	(b)	 	subject to the Purchaser complying with its obligations under Clause 4.3, that
a copy of the Draft Accounts showing the estimated Net Current Asset Value is delivered
to the Vendor and Purchaser as soon as reasonably practicable following, and in any
event within 42 business days after, Completion.

Page 6

 

	4.3	 	Availability of information
	 
	4.3.1	 	Subject to and in accordance with the provisions of paragraph 1.2(k) of Schedule 6, for the
purposes of preparation of the Completion Accounts and the estimated Net Current Asset Value
the Purchaser shall procure that the Vendor, the Vendor’s Accountants and their
representatives are promptly provided with access to all books, records, assets, working
papers or other documents of the Company and such other assistance (including access to
personnel and premises of the Company) which they reasonably request.
	 
	4.3.2	 	Following delivery of the Draft Accounts to the Purchaser and until agreement or
determination of the Completion Accounts in accordance with this Clause each of the Vendor and
the Purchaser shall procure (so far as it is able and so far as such matters are within its
possession or control) that the other of them and their representatives are promptly provided
with access to all books, records, assets, working papers or other documents and such other
assistance (including access to personnel and premises) which they reasonably request for the
purpose of reviewing the Draft Accounts, provided that any release of working papers may be
upon terms which the accountants in question may reasonably require.
	 
	4.3.3	 	The Vendor and the Purchaser shall each be entitled, at its own expense (and in the case of
the Vendor and its representatives subject always to Clause 15), to make and retain copies of
documentation to which it is granted access in accordance with the provisions of this Clause
4.
	 
	4.4	 	Action if Purchaser disputes Draft Accounts
	 
	 	 	If the Purchaser wishes to dispute the Draft Accounts and/or the estimated Net Current Asset
Value it shall notify the Vendor within 30 business days after receiving the Draft Accounts
and such notice shall specify which items the Purchaser disputes, its reasons and the
adjustments which, in its opinion, should be made to the Draft Accounts in order to comply
with the requirements of this Agreement.
	 
	4.5	 	Agreement or deemed agreement of Draft Accounts
	 
	 	 	If the Purchaser does not serve notice under Clause 4.4 or confirms in writing to the Vendor
that it agrees the estimated Net Current Asset Value shown in the Draft Accounts, Clause 4.8
shall apply.
	 
	4.6	 	Appointment of Independent Accountant
	 
	4.6.1	 	If the Purchaser serves notice under Clause 4.4 the parties shall use all reasonable
endeavours to meet and reach agreement upon the Draft Accounts.
	 
	4.6.2	 	If the Vendor and the Purchaser have not agreed the Draft Accounts and the Net Current Asset
Value within 14 business days of receipt by the Vendor of notice under Clause 4.4, or if any
other dispute occurs in relation to the Draft Accounts or the Net Current Asset Value, either
the Purchaser or the Vendor may refer the matter in dispute to an independent chartered
accountant (the Independent Accountant).
	 
	4.6.3	 	The Independent Accountant shall be nominated by the Vendor and the Purchaser and, failing
agreement within 7 business days of a request from either party to the other for a joint
nomination, shall be such independent accountant (being a partner in an international firm of
accountants other than KPMG) as is appointed on the application of either of them by the
President for the time being of the Institute of Chartered Accountants in England and Wales.
The Independent Accountant shall be deemed to act as an expert and not as an arbitrator.
	 
	4.6.4	 	Each of the Vendor and the Purchaser shall promptly supply to the Independent Accountant all
such assistance, documentation and information as he may require for the purposes of the
reference, and the Vendor and the Purchaser shall use their respective reasonable efforts to
procure the prompt determination of such reference. The determination of the Independent
Accountant shall in the absence of manifest error be conclusive and binding on the Parties.

Page 7

 

	4.7	 	Costs of Independent Accountant
	 
	 	 	The costs of any Independent Accountant shall be borne by the Parties in such proportions as
he may direct or, in the absence of direction, equally between the Purchaser and the Vendor.
All costs of the Purchaser’s accountants shall be borne by the Purchaser. All costs of the
Vendor’s Accountants shall be borne by the Vendor.
	 
	4.8	 	Consequences of agreement or determination of Completion Accounts
	 
	 	 	Following agreement or determination of the Draft Accounts and the estimated Net Current
Asset Value in accordance with this Clause 4 the Draft Accounts as so agreed or determined
shall constitute the Completion Accounts and the Net Current Asset Value shall be the amount
shown in them.
	 
	4.9	 	Payment of adjustment
	 
	4.9.1	 	Within 7 business days after agreement or determination of the Net Current Asset Value under
this Clause 4, if the Net Current Asset Value is £100,000 less than £525,000, the Vendor shall
pay, in same day funds, to the Purchaser an amount equal to the amount by which such shortfall
is greater than £525,000 and not merely the excess over £100,000 (such payment to be made into
the Purchaser’s Solicitors’ Client Account, and the receipt of the Purchaser’s Solicitors
shall be a complete discharge to the Vendor who shall not be required to enquire as to the
distribution of that amount).
	 
	4.9.2	 	If any amount due under this Clause 4.9 is not paid on the due date then the amount due
shall accrue interest from and including the due date to the date on which payment is received
at 3% above Barclays Bank plc base lending rate from time to time in force as well after as
before judgment.
	 
	4.9.3	 	The amount of any payment made pursuant to this Clause 4.9 shall be by way of adjustment to
the Consideration.
	 
	4.9.4	 	Any payment due pursuant to this Clause 4.9 shall be made free of any set-off, withholding
or counterclaim, including (but without limitation) as a result of any claim (actual or
alleged) arising out of the warranties, agreements, indemnities or undertakings in this
Agreement or any documents ancillary hereto.
	 
	4.9.5	 	The Consideration shall be reduced by such amount of Company Indebtedness as is outstanding
at Completion on the basis that such Indebtedness shall be fully discharged by the Purchaser
immediately following Completion.
	 
	4.9.6	 	The Vendor acknowledges that the Purchaser will instruct KPMG to conduct an audit of the
financial statements of the Company to 26 March 2006 the cost thereof to be borne by the
Purchaser, and that such audit shall be conducted in conjunction with the determination of the
Completion Accounts.
	 
	5	 	Completion arrangements
	 
	5.1	 	Time and place
	 
	 	 	Completion shall take place immediately following the signature of this Agreement at the
offices of the Vendor’s Solicitors.
	 
	5.2	 	Vendor’s obligations
	 
	 	 	At Completion the Vendor shall do or procure those things listed in Part 1 of Schedule 6.

Page 8

 

	5.3	 	Purchaser’s obligations

	 
	 	 	At Completion the Purchaser shall do or procure those things listed in Part 2 of Schedule 6.
	 
	5.4	 	No partial Completion
	 
	 	 	Neither the Vendor nor the Purchaser shall be obliged to complete the sale and purchase of
any of the Shares unless the sale and purchase of all the Shares is completed
simultaneously.
	 
	5.5	 	Valid receipt
	 
	 	 	The Vendor’s Solicitors are authorised to receive payment of the Consideration on behalf of
the Vendor. The receipt of the Vendor’s Solicitors shall be a complete discharge to the
Purchaser who shall not be obliged to enquire as to the distribution of the Consideration.
	 
	6	 	Discharge of indebtedness
	 
	6.1	 	Discharge of Vendor Indebtedness
	 
	 	 	The Vendor shall on or before Completion repay or procure the repayment of the Vendor
Indebtedness.
	 
	6.2	 	Discharge of Company Indebtedness
	 
	 	 	The Company Indebtedness shall be discharged immediately following Completion in accordance
with Clause 4.9.5.
	 
	7	 	Indemnities
	 
	7.1	 	The Vendor hereby indemnifies and agrees to hold the Purchaser harmless from and against
any liability, loss, charge, claim or demand whether for Taxation or otherwise arising from:
	 
	7.1.1	 	the transfer by the Subsidiary of certain of its business, assets and liabilities to The
Bear Factory Limited on 15 November 2001;
	 
	7.1.2	 	the sale by the Vendor of Hobbies and Models Limited to Hobbies and Models (No. 1) Limited
(now known as Beatties of London (Properties) Limited) on 15 November 2001;
	 
	7.1.3	 	the sale by the Vendor of Hobbies and Models (No. 1) Limited (now known as Beatties of
London (Properties) Limited) to Retail Services Limited on 16 November 2001;
	 
	7.1.4	 	the acquisition by The Bear Factory Limited of the Subsidiary from Beatties of London
(Properties) Limited on 24 August 2005 and the subsequent disposal of the Company and the
Subsidiary to the Purchaser;
	 
	7.1.5	 	the declaration of any dividends by the Subsidiary at any time;
	 
	7.1.6	 	the Subsidiary ceasing to be a member of the Vendor’s Group (where for these purposes the
definition thereof includes the Subsidiary);
	 
	7.1.7	 	the surrender of or claim for group relief in respect of the accounting periods of the
Subsidiary beginning on or before Completion;
	 
	7.1.8	 	the late submission of Tax returns to a Tax Authority in respect of the accounting periods
of the Subsidiary beginning on or before Completion; and
	 
	7.1.9	 	the termination by the Company at the direction of the Purchaser of either or both of the
Franchise Agreements in respect of Sweden and Denmark provided that the franchisees of

Page 9

 

	 	 	such territories shall continue to be entitled for a period of six months from being given
notice of termination to sell the stocks held by them at the date of such notice on the
terms and subject to the conditions of the relevant Franchise Agreement.
	 
	7.2	 	The provisions of Clause 4 of the Tax Deed (Notification of claims and conduct of disputes)
shall apply to any claim brought by the Purchaser pursuant to Clause 7.1 relating to Taxation
as if that clause were set out herein with any necessary changes.
	 
	8	 	Warranties
	 
	8.1	 	Vendor Warranties
	 
	8.1.1	 	The Vendor warrants to the Purchaser that as at 3 March 2006 each of the Warranties is true
and accurate.
	 
	8.1.2	 	For the purposes of the Warranties any reference to the Company shall be deemed to be a
reference to the Company and the Subsidiary.
	 
	8.2	 	Reliance on Warranties
	 
	 	 	The Purchaser is entering into this Agreement on the basis of, and in reliance on, the
Warranties.
	 
	8.3	 	Purchaser Warranties
	 
	 	 	The Purchaser warrants to the Vendor that:

	 	(a)	 	the Purchaser has the right, power and authority, and has taken all necessary
action, to execute, deliver and exercise its rights and perform its obligations under
this Agreement and to execute, deliver and exercise its rights and perform its
obligations under each document to be executed pursuant to this Agreement to which it
is expressed to be a party (the Purchaser’s Completion Documents); and
	 
	 	(b)	 	the execution and delivery of, and the performance by the Purchaser of its
obligations under this Agreement and the Purchaser’s Completion Documents will not:

	 	(i)	 	result in a breach of any provision of the memorandum or
articles of association of the Purchaser;
	 
	 	(ii)	 	result in a breach of, or constitute a default under, any
instrument to which the Purchaser is a party or by which it is bound and which
is material in the context of the transactions contemplated by this Agreement;
or
	 
	 	(iii)	 	result in a breach of any order, judgment or decree of any
court or governmental agency to which the Purchaser is a party or by which it
is bound or submits and which is material in the context of the transactions
contemplated by this Agreement.

	8.4	 	Indemnity Basis
	 
	8.4.1	 	Without prejudice to the right of the Purchaser to claim on any other basis or take
advantage of any other remedies available to it, if any Indemnified Warranty is breached or
proves to be untrue or misleading the Vendor shall pay to the Purchaser an amount equal to all
costs and expenses (including, without limitation, damages, reasonable legal and other
professional fees and costs, penalties, expenses and losses) incurred by the Purchaser or the
Company as a result of such breach or of the Indemnified Warranty being untrue or misleading
PROVIDED ALWAYS that notwithstanding any other provision of this Agreement the Purchaser shall
take and shall procure that the Company will take all reasonable steps to mitigate the same as
if it were under a common law duty to mitigate its loss.

Page 10

 

	8.4.2	 	A payment made in accordance with the provisions of this Clause 8.4 shall include any amount
necessary to ensure that, after any Taxation of the payment, the Purchaser is left with the
same amount it would have had if the payment was not subject to Taxation.
	 
	8.5	 	Survival of Warranties
	 
	 	 	Subject as specifically otherwise provided in this Agreement, the Warranties and the
Purchaser’s Warranties shall remain in full force and effect notwithstanding Completion.
	 
	8.6	 	Warranties to be independent
	 
	 	 	Each of the Warranties shall be separate and independent and shall not be limited by
reference to any other Warranty or any other provision of this Agreement.
	 
	8.7	 	Tax and Property Warranties
	 
	 	 	The only Warranties given:

	 	(a)	 	in respect of Tax are the Tax Warranties, and the other Warranties shall be
deemed not to be given in relation to Tax;
	 
	 	(b)	 	in respect of the Property are those contained in paragraph 23 of Schedule 2,
and the other Warranties shall be deemed not to be given in relation to the Property.

	8.8	 	Vendor’s knowledge

	 	 	For the purposes of this Agreement and the Disclosure Letter, where any Warranty is
qualified by the expression “so far as the Vendor is aware” or “to the best of the
knowledge, information and belief of the Vendor” or by any similar qualification, such
Warranty is given on the basis that enquiries have been made only of the Relevant
Individuals but not of any other person, and that such Relevant Individuals have taken all
reasonable steps necessary to inquire as to the accuracy of the statements contained in the
Warranties. For the purposes of the foregoing the Relevant Individuals are:

	 	(a)	 	Nicholas Mather
	 
	 	(b)	 	Alasdair Dunn
	 
	 	(c)	 	Roger Parry; and
	 
	 	(d)	 	Katherine Osborne

	9	 	Tax
	 
	9.1	 	Each of the Parties shall comply with their respective obligations under the Tax Deed.
	 
	9.2	 	The provisions of paragraph 3 to the Tax Deed shall apply to limit the liability of the
Vendor under the Tax Warranties.
	 
	10	 	Limitations on Vendor’s Warranty liability
	 
	10.1	 	General limitations
	 
	10.1.1	 	The Vendor shall have no liability in respect of a claim under the Warranties:

Page 11

 

	 	(a)	 	unless notice in writing of the claim is given by the Purchaser to the Vendor
stating in reasonable detail the nature of the claim and, if practical, the amount
claimed:

	 	(i)	 	in the case of a claim under any of the Warranties other than
the Tax Warranties or Title Warranties, within eighteen months of Completion;
	 
	 	(ii)	 	in the case of a claim under the Tax Warranties or the Tax
Deed, on or before the seventh anniversary of Completion; and
	 
	 	(iii)	 	in the case of the Title Warranties, at any time;

	 	(b)	 	if proceedings in respect of a claim, notified in accordance with paragraph (a)
above, have not been issued and served on the Vendor within 6 months after the relevant
date referred to in paragraph (a) save in respect of a contingent claim in which case
such period of six months shall only commence on the date on which it ceases to be
contingent.

	10.1.2	 	The Vendor shall have no liability in respect of a claim under the Warranties:

	 	(a)	 	as regards any single claim (or a series of claims arising from substantially
similar facts or circumstances), unless the amount of its liability thereunder exceeds
£5,000 (five thousand pounds sterling);
	 
	 	(b)	 	unless its liability in respect of the claim when aggregated with its liability
in respect of all claims against the Vendor under the Warranties (disregarding claims
excluded by paragraph (a) above) exceeds £100,000 (one hundred thousand pounds
sterling), in which case the Vendor shall be liable for the whole amount (excluding
claims referred to in paragraph (a) above) and not merely the excess.

	10.2	 	Maximum claim limit
	 
	 	 	The aggregate liability of the Vendor under Clause 7 (Indemnities), the Warranties and the
Tax Deed shall not exceed £12,500,000 (twelve million and five hundred thousand pounds
sterling).

	10.3	 	Other general limitations
	 
	 	 	The Vendor shall have no liability in respect of a claim under the Warranties:

	 	(a)	 	to the extent that the fact, matter or circumstance giving rise to the claim
was fairly disclosed in the Disclosure Letter or is apparent on the face of the
documents in the Data Room;
	 
	 	(b)	 	as regards any claim if and to the extent that provision, reserve or note in
respect thereof or of the event or circumstance giving rise thereto has been made in
the Accounts or the Management Accounts or payment or discharge of the relevant matter
has otherwise been taken into account in the Accounts or the Management Accounts;
	 
	 	(c)	 	as regards any claim if and to the extent that payment or discharge of the
claim or provision in respect of the claim or the event or circumstance giving rise
thereto has been taken into account in the determination of the Net Current Asset Value
as shown in the Completion Accounts;
	 
	 	(d)	 	in respect of any claim which is contingent only, unless and until such
contingent liability becomes an actual liability;
	 
	 	(e)	 	as regards any claim to the extent of any amount which is recovered from
insurers;
	 
	 	(f)	 	as regards any claim if such claim would not have arisen but for any act or
omission carried out after the date of this Agreement otherwise than in the ordinary
course of

Page 12

 

	 	 	 	business by the Purchaser, the Company or any other member of the Purchaser’s Group
or any other person connected with any of them or any of their respective directors,
employees or agents;
	 
	 	(g)	 	as regards any claim if such claim would not have arisen but for a cessation
after Completion of the business or trade or any part thereof of the Purchaser or the
Company or any change in the nature of such business or trade or a sale or disposal of
any share or any interest in the Company after Completion;
	 
	 	(h)	 	as regards any claim to the extent that such claim or liability arises or that
the amount thereof is increased as a result of any change after Completion in the
accounting reference date or in any of the accounting or actuarial or tax reporting
policies, bases or practices of the Company or the Purchaser; or
	 
	 	(i)	 	to the extent that a breach of the Warranties also gives rise to a claim under
the Tax Deed and the Vendor has satisfied such claim or vice versa.

	10.4	 	Third party recovery

	10.4.1	 	Where the Purchaser or the Company is at any time entitled to recover from some other person
(including without limitation any government authority or under any policy of insurance) any
sum in respect of any matter giving rise to a claim under this Agreement or under any document
ancillary to this Agreement or thereto other than a claim in relation to Taxation:

	 	(a)	 	the Purchaser shall, and shall procure that the Company shall, undertake and
exhaust all necessary steps to enforce such recovery before taking proceedings against
the Vendor and, in the event that the Purchaser or the Company shall recover any amount
from such other person, the amount of the claim against the Vendor shall be reduced by
the amount recovered less all reasonable costs, charges and expenses incurred by the
Purchaser or the Company in recovering that sum from such other person; or
	 
	 	(b)	 	at the Vendor’s option, subject to the Vendor having settled the relevant claim
against the Vendor and subject to the Vendor indemnifying the Purchaser and the Company
to their reasonable satisfaction in relation thereto, the Purchaser shall, or shall
procure that the Company shall, for a nominal consideration assign to the Vendor the
benefit of the rights of recovery, reimbursement or refund which the Purchaser or the
Company has against such other person in respect of the matter giving rise to the
relevant claim.

	10.4.2	 	If at any time the Vendor pays to the Purchaser or the Company an amount pursuant to a claim
under this Agreement or any document ancillary hereto (other than a claim in relation to
Taxation) and the Purchaser or the Company subsequently becomes entitled to recover from any
other person (including without limitation any government authority or under any policy of
insurance) any sum in respect of any matter giving rise to such claim:

	 	(a)	 	the Purchaser shall, and shall procure that the Company shall, undertake all
necessary steps to enforce such recovery, and shall forthwith pay to the Vendor so much
of the amount paid to the Purchaser or the Company as does not exceed the sum recovered
from such other person less all reasonable costs, charges and expenses incurred by the
Purchaser or the Company in recovering that sum from such other person; or
	 
	 	(b)	 	at the Vendor’s option, subject to the Vendor indemnifying the Purchaser and
the Company to their reasonable satisfaction in relation thereto, the Purchaser shall,
or shall procure that the Company shall, for a nominal consideration assign to the
Vendor the benefit of the rights of recovery, reimbursement or refund which the
Purchaser or the Company has against such other person in respect of the matter giving
rise to the relevant claim.

Page 13

 

	10.4.3	 	The Purchaser shall, or shall procure the Company shall, keep the Vendor fully and promptly
informed of any actual or prospective right of recovery from any third party as referred to in
Clause 10.4.1 or 10.4.2 above.
	 
	10.5	 	Conduct of disputes
	 
	10.5.1	 	If the Purchaser or the Company become aware of any claim, action or demand against either
of them, or of any circumstance which may give rise to any claim, action or demand against
either of them, and which may give rise to a claim under this Agreement (other than a claim
under the Tax Warranties or Tax Deed to which paragraph 4 of the Tax Deed shall apply), the
Purchaser shall forthwith give written notice (including reasonable particulars of such claim
or circumstance) to the Vendor and the Purchaser shall and shall procure that the Company (if
relevant) shall:

	 	(a)	 	not knowingly make any admission of liability, or any agreement or compromise
with any person body or authority in relation thereto without the prior written
agreement of the Vendor which shall not be unreasonably withheld or delayed;
	 
	 	(b)	 	give the Vendor and its professional advisers reasonable access to the premises
and personnel of the Purchaser and the Company, as the case may be, and to any relevant
assets, accounts, documents and records within the control of the Purchaser or the
Company to enable the Vendor and its professional advisers to examine such assets,
accounts, documents and records and take photographs or photocopies thereof at its own
expense in order to appraise themselves of all facts, matters and information relevant
to the claim, action or demand against the Purchaser or the Company;
	 
	 	(c)	 	subject to the Vendor having provided the Purchaser or the Company (as
appropriate) with such indemnity therefor as the Purchaser or the Company may
reasonably require in relation thereto, permit the Vendor in the name of the Purchaser
or the Company (as appropriate) to appoint such professional advisers and to take such
action as the Vendor may consider reasonably necessary or desirable to avoid, dispute,
resist, appeal, compromise or defend the claim, action or demand and any adjudication
in respect thereof subject only to consulting the Purchaser or the Company (as
appropriate), prior to taking any such action; and
	 
	 	(d)	 	at the option of the Vendor, afford the Vendor the opportunity to take such
steps to remedy or avert such claim or circumstance as the Vendor may require,

	 	 	Provided that the Purchaser shall not be required to take nor shall the Vendor take any
action which in the Purchaser’s reasonable opinion would materially adversely affect the
goodwill or standing of the Purchaser or the Company or damage the reputation of any brand
of either of them.
	 
	10.6	 	Opportunity to remedy breach
	 
	 	 	A breach of any Warranty which is capable of remedy shall not entitle the Purchaser to
compensation or damages unless the Vendor is given written notice of the breach by the
Purchaser and such breach is not remedied by the Vendor at no cost to the Purchaser or the
Company within thirty (30) days after the date on which notice is served on the Vendor. If
such breach has not been remedied within that 30 day period, then the date on which notice
of a claim in respect of that breach shall be deemed to have been given to the Vendor for
the purposes of Clause 9.1(a) above shall be the date on which notice was given under this
Clause, provided that such notice satisfies the other requirements of Clause 9.1(a) above
when so given.
	 
	10.7	 	Purchaser’s knowledge
	 
	 	 	The Purchaser represents and confirms to the Vendor that as at the date of this Agreement,
having made enquiry of the Purchaser’s Solicitors and its other advisors, neither the

Page 14

 

	 	 	Purchaser nor any director of the Purchaser is aware of any fact, matter or circumstance
which:

	 	(a)	 	constitutes a breach of the Warranties; or
	 
	 	(b)	 	gives rise to a claim under the Tax Deed or any specific indemnity in this
Agreement.

	 	 	To the extent that the Purchaser is so aware no claim may be made under the Warranties or
Tax Deed under this Agreement in respect of such fact, matter or circumstance.

	10.8	 	Exceptions to limitations
	 
	 	 	Nothing in this Clause 10 shall have the effect of limiting or restricting any liability of
the Vendor in respect of a claim under the Warranties or the Tax Deed arising as a result of
any fraud or wilful concealment.
	 
	10.9	 	General
	 
	10.9.1	 	After Completion the Purchaser shall have no right of rescission or right to terminate this
Agreement and, accordingly, the Purchaser waives all and any rights of rescission or
termination it may have in respect of any such matter (howsoever arising or deemed to arise).
	 
	10.9.2	 	The Purchaser shall not be entitled to claim for any punitive, indirect or consequential
loss in respect of any claim.
	 
	10.9.3	 	Without prejudice to any other provision in this Agreement for the protection of the Vendor
the Purchaser shall and shall procure that the Company shall take all reasonable steps to
mitigate any loss which is or may be the subject of any claim under this Agreement.
	 
	10.9.4	 	The amount of any payment made by the Vendor to the Purchaser in respect of any claim under
the Warranties or the Tax Deed shall be deemed a reduction pound for pound in the
Consideration.
	 
	10.9.5	 	The Vendor shall not be liable for any claim under the Warranties or the Tax Deed if the
Purchaser fails in a material respect to act in accordance with this Clause 10 in connection
with the matter giving rise to such claim unless and to the extent that, in the absence of the
failure, the Purchaser would still have had such a claim.
	 
	11	 	Employees
	 
	11.1	 	Transfer of Employees
	 
	 	 	The Vendor, the Purchaser and the Company acknowledge that the transfer of the Employees
from the Vendor or any other member of the Vendor’s Group with whom such Employees have
their contract of employment prior to Completion (the Employing Company) to the Company (the
Employee Transfer) may be one to which the Employment Regulations apply. Accordingly, prior
to Completion, the contracts of employment of the Employees shall have effect as if
originally made between the Employees and the Company and the Vendor hereby confirms that
letters have been sent to the Employees by their respective employers confirming that their
employment will transfer to the Company with effect from a date not later than 23 February
2006.
	 
	11.2	 	Purchaser’s Warranty of complete Employment Information
	 
	 	 	The Purchaser has provided to the Vendor such information as the Vendor has requested so as
to enable the Vendor to comply with the obligations of the Vendor to inform and consult with
the Employees pursuant to the Employment Regulations. The Purchaser has informed the Vendor
of all such measures (if any) within the meaning of the Employment Regulations which the
Purchaser presently intends to take in respect of the Employees.

Page 15

 

	11.3	 	Consultation
	 
	 	 	The Vendor shall procure that the information and consultation requirements set out in
Regulation 10 of the Employment Regulations are met to the extent to which the Vendor is
able considering always the extent to which the Purchaser has provided full information to
the Vendor (as set out at 11.2 above) including all information in respect of any measures
within the meaning of the Employment Regulations which the Purchaser intends to take in
respect of the Employees.
	 
	11.4	 	Indemnity by Vendor
	 
	 	 	The Vendor shall indemnify the Purchaser and each other member of the Purchaser’s Group
against all liabilities, losses, charges, costs, expenses, penalties, claims, demands and
reasonable legal and other professional fees and costs whatsoever directly or indirectly in
connection with the Employees arising from the Employee Transfer including any failure to
comply with any duty to inform or consult trade union and/or employee representatives under
the Employment Regulations in connection with the Employee Transfer provided always that
this indemnity does not extend to liabilities, losses, charges, costs, expenses, penalties,
claims, demands and legal and other professional fees and costs:

	 	(a)	 	to the extent that the same are caused by or contributed to by the Purchaser’s
failure accurately and fully to supply employment information and/or inform the Vendor
of such measures it intends to take in respect of the Employees for the purposes of
consultation as set out at Clause 11.2 above; and/or
	 
	 	(b)	 	to the extent that the same are caused by or contributed to by any closure of
or measures taken in relation to the Aberdeen and Bristol stores or the matters set out
in the “Amendment to and Extension of Agreed Term Sheet” dated 15 February 2006 and
more particularly item 6 of that document regarding the Watford and Stirling stores;
and/or
	 
	 	(c)	 	incurred as a result of the Purchaser making any unauthorised approach to any
supplier of the Company prior to Completion, including, but not limited to, any
approach to Streamline or Keenpack.

	11.5	 	Indemnity by Purchaser
	 
	 	 	Subject to provisions of Clause 11.4, the Purchaser shall indemnify the Vendor and each
other member of the Vendor’s Group from and against all liabilities, losses, charges, costs,
expenses, penalties, claims, demands and reasonable legal and other professional fees and
costs whatsoever directly or indirectly arising in connection with the employment of the
Employees during the period beginning at the close of business on the Completion Date.
	 
	11.6	 	Use of Office Space
	 
	 	 	The Vendor shall, following Completion, provide the Purchaser with temporary office space
and usual office equipment for such space at their premises at 2, Fouberts Place, London,
W1F 7PA for a period of 7 days to accommodate 15 of employees.
	 
	12	 	Releases, Indemnities and Acknowledgement
	 
	12.1	 	The Purchaser shall:

	 	(a)	 	as soon as reasonably practicable following Completion, procure the release of
each member of the Vendor’s Group from its obligations under all guarantees,
indemnities and other contingent liabilities given or assumed by it in respect of
liabilities of the Company to third parties including without limitation the guarantees
in respect of the Company’s Milton Keynes and Sheffield lease obligations (the
Guarantees); and

Page 16

 

	 	(b)	 	pending the grant of such release, indemnify and keep indemnified the Vendor
and each other member of the Vendor’s Group against any liabilities, costs, damages and
expenses (of whatsoever nature and howsoever arising) under the Guarantees or which may
be incurred in relation to the Guarantees.

	12.2	 	The Vendor acknowledges and accepts that it shall have full liability and that the Company
shall have no liability under the contractual arrangements with Li & Fung whether entered into
prior to or after Completion other than those arising specifically in relation to purchase
orders placed with Li & Fung for goods supplied or to be supplied for the sole benefit of the
Company.
	 
	13	 	Restrictions on Vendor’s business activities
	 
	13.1	 	Vendor’s covenants
	 
	 	 	The Vendor covenants with the Purchaser that the Vendor shall not, and shall procure that no
other member of the Vendor’s Group shall, whether alone or jointly with or on behalf of any
other person at any time during the Restricted Period carry on or be engaged or interested
in any Restricted Business within the Restricted Area (except as the holder of shares in a
company whose shares are publicly traded and which confer not more than 5% of the votes
which can generally be cast at a general meeting of such company) provided that the
foregoing shall not limit the Vendor from the sale of plush toys that do not fall into the
definition of Restricted Business.
	 
	13.2	 	Acquisitions
	 
	 	 	Nothing in Clause 13.1 shall prevent any member of the Vendor’s Group from acquiring
(whether by private treaty, public offer or otherwise howsoever) any other company or
business which carries on any Restricted Business provided that such Restricted Business
accounts for less than 20% of the annual turnover of the company or business so acquired.
	 
	13.3	 	Undertakings separate
	 
	 	 	Each covenant in this Clause 13 shall be construed as a separate covenant. If one or more
of the covenants is held to be void or unenforceable, the validity of the remaining
covenants shall not be affected.
	 
	14	 	Maintenance and availability of records
	 
	14.1.1	 	The Purchaser shall promptly on demand by the Vendor provide, or procure that the
Company and its subsidiaries or affiliates from time to time provide, to the Vendor or its
duly authorised agents such working papers, ledgers, accounts, records and other documents in
relation to the Company as the Vendor may deem reasonably necessary to enable the Vendor or
any other company that is a member of or is connected or in any way associated with any group
of companies to which the Vendor belongs or may belong (a Vendor Associated Company) to
complete and file any tax or customs or excise or similar returns or reports, to carry out any
tax audit or other proceeding or otherwise to fulfil any requirements of any law or regulation
binding on the Vendor or any Associated Company.
	 
	14.1.2	 	The Vendor shall promptly on demand by the Purchaser provide to the Purchaser or its duly
authorised agents such working papers, ledgers, accounts, records and other documents as the
Purchaser may deem reasonably necessary to enable the Purchaser or any other company that is a
member of or is connected or in any way associated with any group of companies to which
Purchaser belongs or may belong (a Purchaser Associated Company) to complete and file any tax
or customs or excise or similar returns or reports (in particular any SEC filings), to carry
out any audit or other proceeding or otherwise to fulfil any requirements of any law or
regulation binding on the Purchaser or any Purchaser Associated Company.

Page 17

 

	14.1.3	 	The Purchaser agrees that it will, and will procure that the Company and its subsidiaries
and affiliates from time to time will, retain and maintain all such working papers, ledgers,
accounts, records and other documents for all years and periods ending on or before or current
at Completion for a period of not less than 10 years.
	 
	15	 	Confidentiality
	 
	15.1	 	Duty of confidentiality
	 
	 	 	Save as provided by Clause 15.3 each Party shall, and shall procure that any person
connected with it and its officers and employees shall, keep confidential and not disclose
to any person any Confidential Information.
	 
	15.2	 	Confidential Business Information
	 
	 	 	Save as permitted by Clause 15.3 the Vendor covenants with the Purchaser that the Vendor
shall not, and shall procure that no person connected with and no director, officer or
employee of that Vendor shall, make use of or disclose to any person any Confidential
Business Information.
	 
	15.3	 	Permitted disclosures
	 
	 	 	A Party may disclose or permit the disclosure of Confidential Information and the Vendor may
disclose or permit the disclosure of Confidential Business Information:

	 	(a)	 	to its directors, officers, employees, sub-contractors, agents, legal or other
professional advisers, to the extent necessary to enable it or them to perform or cause
to be performed or to enforce any of its rights or obligations under this Agreement;
	 
	 	(b)	 	when required to do so by law or by or pursuant to the rules or any order of
any court, tribunal or agency of competent jurisdiction;
	 
	 	(c)	 	to the extent that the Confidential Information or Confidential Business
Information has become publicly available or generally known to the public at the time
of such disclosure otherwise than as a result of a breach of this Clause 15;
	 
	 	(d)	 	to a relevant Tax Authority to the extent required for the proper management of
the taxation affairs of that party, any of its holding companies or any subsidiary of
any of the foregoing;
	 
	 	(e)	 	if such disclosure is expressly permitted by some other provision of this
Agreement or the Tax Deed or if the other Parties or (in the case of Confidential
Business Information) the Purchaser has or have given prior written approval to the
disclosure;
	 
	 	(f)	 	when required by any securities exchange, regulatory or governmental body
having jurisdiction over the Party seeking to make disclosure, including the United
Kingdom Financial Services Authority, the Icelandic Stock Exchange, the New York Stock
Exchange and NASDAQ, whether or not the requirement for disclosure has the force of
law.

	15.4	 	Consultation
	 
	 	 	If a Party is required to disclose Confidential Information or Confidential Business
Information in a manner permitted by Clause 15.3(b) or 15.3(f) that Party shall to the
extent such consultation is practicable and permitted by the relevant law, rule, order,
exchange or body:

	 	(a)	 	provide the other Parties with advance notice of the requirement and a copy of
the information to be disclosed; and

Page 18

 

	 	(b)	 	permit the other Parties to make representations in relation to it; and
	 
	 	(c)	 	at the expense of and subject to being indemnified to its satisfaction by the
other Parties give the other Parties who would be affected by the disclosure a
reasonable opportunity to seek an appropriate remedy to prevent such disclosure and
co-operate fully (including if necessary joining in legal proceedings) with another
Party.

	15.5	 	Continuance of obligations
	 
	 	 	The obligations in this Clause 15 shall continue to apply after Completion or termination of
this Agreement without limit in time.
	 
	16	 	Announcements
	 
	16.1	 	Restrictions
	 
	 	 	Except as provided in Clause 16.2, a Party shall not make (and shall procure that no person
connected with it nor any of its directors, officers or employees shall make) any public
announcement concerning the subject matter of this Agreement without the prior written
approval of the other Parties.
	 
	16.2	 	Permitted announcements
	 
	 	 	A Party may make a public announcement concerning the subject matter of this Agreement if
required by:

	 	(a)	 	law or by or pursuant to the rules or any order of any court, tribunal or
agency of competent jurisdiction; or
	 
	 	(b)	 	any securities exchange, regulatory or governmental body having jurisdiction
over it including the United Kingdom Financial Services Authority, the Icelandic Stock
Exchange, the New York Stock Exchange and NASDAQ, whether or not the requirement for
announcement has the force of law.

	16.3	 	Prior consultation on announcements
	 
	 	 	If a Party is required to make a public announcement in a manner permitted by Clause 16.2
that Party shall to the extent practicable and permitted by the relevant law, rule, order,
exchange or body:

	 	(a)	 	provide the other Parties with advance notice of the requirement and a copy of
the announcement to be made;
	 
	 	(b)	 	permit the other Parties to make representations in relation to it; and
	 
	 	(c)	 	at the expense of and subject to being indemnified to its satisfaction by the
other Parties give the other Parties a reasonable opportunity to seek an appropriate
remedy to prevent such announcement and co-operate fully (including if necessary
joining in legal proceedings) with another Party.

	16.4	 	Continuance of obligations
	 
	 	 	The obligations in this Clause 16 shall continue to apply after Completion or termination of
this Agreement without limit in time.

Page 19

 

	17	 	Costs and expenses
	 
	17.1	 	Each party responsible for its own costs
	 
	 	 	Each Party will be responsible for its own costs and expenses in relation to the
negotiation, preparation, execution and implementation of this Agreement and all documents
ancillary to it.
	 
	18	 	Payments
	 
	18.1	 	No deduction
	 
	 	 	All sums payable to the Purchaser pursuant to this Agreement shall be paid without
deduction, withholding, set off or counterclaim.
	 
	19	 	Assignment
	 
	19.1	 	Each of the Purchaser and the Company (as the case may be) shall be entitled to assign or
transfer its rights and benefits (but not its obligations) under this Agreement or any
document ancillary to this Agreement to any purchaser of the Shares or of the Business (as the
same shall be carried on at the date of such sale) provided that the liability of the Vendor
hereunder and under the Tax Deed and any document ancillary to this Agreement shall not be
increased as a result of or in connection with such assignment or transfer or by the holding
or enforcement of such rights and benefits by any such purchaser.
	 
	19.2	 	The Vendor shall be entitled to assign or transfer its rights and benefits (but not its
obligations) under this Agreement or any document ancillary to this Agreement to any third
party provided that the liability of the Purchaser hereunder shall not be increased as a
result of or in connection with such assignment or transfer or by the holding or enforcement
of such rights and benefits by any such third party.
	 
	19.3	 	Save as expressly permitted pursuant to this Clause, neither the Vendor, the Purchaser, nor
the Company may assign or transfer any of its rights or benefits under this Agreement or any
document ancillary to this Agreement.
	 
	20	 	Remedies and waivers
	 
	20.1	 	No waiver or discharge
	 
	 	 	No breach by any Party of any provision of this Agreement shall be waived or discharged
except with the express written consent of the other Parties.
	 
	20.2	 	Effect of failure or delay
	 
	 	 	No failure or delay by any Party in exercising any right, power or privilege under this
Agreement shall operate as a waiver of that right, power or privilege and no single or
partial exercise by any Party of any right, power or privilege shall preclude any further
exercise of that right, power or privilege or the exercise of any other right, power or
privilege.
	 
	20.3	 	Rights and remedies cumulative
	 
	 	 	The rights and remedies provided in this Agreement are cumulative and not exclusive of any
rights and remedies provided by law or otherwise.
	 
	20.4	 	Third party rights
	 
	 	 	The Parties intend that the provisions of Clause 11 (The Employees) shall be enforceable by
each member of the Vendor’s Group, but the Parties do not intend that any other term of this

Page 20

 

	 	 	Agreement shall be enforceable solely by virtue of the Contracts (Rights of Third Parties)
Act 1999 by any person who is not a party to this Agreement.
	 
	21	 	Further assurance
	 
	21.1	 	Further assurance
	 
	 	 	Each Party shall after Completion from time to time at the expense of the requesting Party
execute and do (or procure the execution and doing of) all such deeds, documents, acts and
things as any other Party shall reasonably require on or after Completion for carrying into
effect the terms of this Agreement.
	 
	22	 	Entire agreement
	 
	22.1	 	In this Clause Representation means a representation, statement, assurance, covenant,
undertaking, indemnity, guarantee or commitment (whether contractual or otherwise).
	 
	22.2	 	This Agreement and each document referred to in it constitutes the entire agreement and
supersedes any previous agreements between the Parties relating to the subject matter of this
Agreement.
	 
	22.3	 	In entering into this Agreement, the Purchaser acknowledges and represents that it has not
relied on or been induced to enter into this Agreement by a Representation given by the
Company, the Vendor, any other member of the Vendor’s Group or any advisor to the Vendor or
any other party other than the Warranties or otherwise as set out in this Agreement or in any
document referred to in this Agreement.
	 
	22.4	 	In entering into this Agreement, the Vendor acknowledges and represents that it has not
relied on or been induced to enter into this Agreement by any representation given by the
Company, the Purchaser, any other member of the Purchaser’s Group or any advisor to the
Purchaser or any other party.
	 
	22.5	 	In relation to the subject matter of this Agreement, the Vendor is not liable to the
Purchaser for a Representation that is not set out in this Agreement or in any document
referred to in this Agreement.
	 
	23	 	Counterparts
	 
	23.1	 	Number and effectiveness of counterparts
	 
	 	 	This Agreement may be executed in any number of counterparts. Any Party may enter into this
Agreement by executing any counterpart but this Agreement shall not be effective until each
Party has executed at least one counterpart.
	 
	23.2	 	One instrument
	 
	 	 	Each counterpart shall constitute an original of this Agreement but all the counterparts
together constitute the same instrument.

Page 21

 

	24	 	Notices
	 
	24.1	 	This Clause 24 shall not apply for service and receipt of documents for the purposes of
legal proceedings. Service and Receipt of documents for the purposes of legal proceedings
shall be governed by Clause 25 in conjunction with the relevant rules of Court.
	 
	24.2	 	Service
	 
	 	 	Any notice or other communication to be given under this Agreement shall be in writing and
shall be delivered by hand, sent by prepaid first class recorded delivery or registered
post, (or registered airmail in the case of an address outside the United Kingdom), or shall
be transmitted by fax, and shall be addressed to the Party to be served at the address or
fax number specified below:

	 	(a)	 	The Vendor
	 
	 	 	 	188-196 Regent Street, London W1R 6BT
	 
	 	 	 	Attention: Nick Mather

Fax number: +44 (0)20 7479 7319
	 
	 	(b)	 	The Purchaser
	 
	 	 	 	Build-A-Bear Workshop, Inc

1954 Innerbelt Business Center, St Louis, Missouri, 63114-5760 USA

	 
	 	 	 	Attention: General Counsel

Fax number: 314-423-8188
	 
	 	(c)	 	The Company
	 
	 	 	 	Build-A-Bear Workshop, Inc

1954 Innerbelt Business Center, St Louis, Missouri, 63114-5760 USA
	 
	 	 	 	Attention: General Counsel

Fax number: 314-423-8188

	 	 	or to such other address in the same jurisdiction as a Party may notify to the other Parties
in writing as being its address for such purpose.

	24.3	 	Receipt
	 
	 	 	Any notice or communication delivered by hand shall be deemed to have been received at the
time of delivery, any notice or communication sent by post shall be deemed to have been
received on the second business day (for inland mail) or the fifth business day (for
overseas mail) after the date of posting, and any notice or communication transmitted by fax
shall be deemed to have been received on the business day following the date of
transmission.
	 
	25	 	Governing law and jurisdiction
	 
	25.1	 	English law
	 
	 	 	This Agreement shall be governed by and construed in accordance with English law.
	 
	25.2	 	Jurisdiction
	 
	 	 	The Parties irrevocably agree that the English courts shall have exclusive
jurisdiction to determine any dispute arising out of or in connection with this Agreement.

Page 22

 

	25.3	 	Address for service
	 
	 	 	The Purchaser’s address for service under this Clause 25 is c/o the Purchaser’s Solicitors
at the address stated in Clause 1. Items served at this address must be marked for the
personal attention of Anthony Fiducia. The Vendor’s address for service under this Clause
25 is that stated in Clause 24.1(a) or such other address so may be notified to the
Purchaser in writing in accordance with Clause 24.
	 
	25.4	 	Agreed method of service
	 
	 	 	Any claim form, application notice, judgment, orders or other notice of legal process
relating to this Agreement may be served on a Party by posting it by pre-paid first class
recorded delivery post to that Party’s address for service specified in this Clause, or to
such other address for service within England as may be notified in accordance with Clause
24 to the Party effecting service.

As witness the hands of the duly authorised representatives of the Parties hereto the day and year
first above written

Page 23

 

Schedule 1
— Particulars of the Company and the Subsidiary

	 	 	 	 	 
	1

	 	Particulars of the Company	 	 
	 
	 	 	 	 
	 

	 	Date of incorporation:
	 	14 July 2000 
	 
	 	 	 	 
	 

	 	Place of registration:
	 	England and Wales
	 
	 	 	 	 
	 

	 	Company registration number:
	 	04036762 
	 
	 	 	 	 
	 

	 	Registered office:
	 	188-196 Regent Street
	 

	 	 	 	London
	 

	 	 	 	W1R 6BT 
	 
	 	 	 	 
	 

	 	Authorised share capital:
	 	12,211,556 ordinary shares of £1 each
	 
	 	 	 	 
	 

	 	Issued share capital:
	 	12,211,556 ordinary shares of £1 each
	 
	 	 	 	 
	 

	 	Accounting reference date:
	 	25 March 
	 
	 	 	 	 
	 

	 	Names and addresses of directors:
	 	Nicholas Mather
	 

	 	 	 	Newells House
	 

	 	 	 	Newells Lane
	 

	 	 	 	Cutmill
	 

	 	 	 	Bosham
	 

	 	 	 	West Sussex
	 

	 	 	 	PO18 8PS 
	 
	 	 	 	 
	 

	 	 	 	Katherine Anne Osborne
	 

	 	 	 	7 Foster Close
	 

	 	 	 	Cheshunt
	 

	 	 	 	Waltham Cross
	 

	 	 	 	Hertfordshire
	 

	 	 	 	EN8 9RZ 
	 
	 	 	 	 
	 

	 	 	 	Alasdair Dunn
	 

	 	 	 	44 Welbeck Avenue
	 

	 	 	 	Highfield
	 

	 	 	 	Southampton
	 

	 	 	 	Hampshire
	 

	 	 	 	SO17 1SS 
	 
	 	 	 	 
	 

	 	Name and address of secretary:
	 	Alasdair Dunn
	 

	 	 	 	44 Welbeck Avenue
	 

	 	 	 	Highfield
	 

	 	 	 	Southampton
	 

	 	 	 	Hampshire
	 

	 	 	 	SO17 1SS 
	 
	 	 	 	 
	 

	 	Name and address of auditors:
	 	KPMG LLP
	 
	 	 	 	 
	 

	 	Names of subsidiaries (if any):
	 	Hobbies and Models Limited

Page 24

 

	 	 	 	 	 
	2

	 	Particulars of the Subsidiary	 	 
	 
	 	 	 	 
	 

	 	Date of incorporation:
	 	11 April 1975 
	 
	 	 	 	 
	 

	 	Place of registration:
	 	England and Wales
	 
	 	 	 	 
	 

	 	Company registration number:
	 	01207167 
	 
	 	 	 	 
	 

	 	Registered office:
	 	188 -196 Regent Street
	 

	 	 	 	London
	 

	 	 	 	W1R 6BT
	 
	 	 	 	 
	 

	 	Authorised share capital:
	 	£114,800 
	 
	 	 	 	 
	 

	 	Issued share capital:
	 	74,000 A Ordinary Shares of £1 each
	 

	 	 	 	26,000 B Ordinary Shares of £1 each
	 

	 	 	 	1,480,000 C Ordinary Shares of £0.01 each
	 
	 	 	 	 
	 

	 	Accounting reference date:
	 	25 March 
	 
	 	 	 	 
	 

	 	Names and addresses of directors:
	 	Nicholas Mather
	 

	 	 	 	Newells House
	 

	 	 	 	Newells Lane
	 

	 	 	 	Cutmill
	 

	 	 	 	Bosham
	 

	 	 	 	West Sussex
	 

	 	 	 	PO18 8PS 
	 
	 	 	 	 
	 

	 	 	 	Alisdair Dunn
	 

	 	 	 	44 Welbeck Avenue
	 

	 	 	 	Highfield
	 

	 	 	 	Southampton
	 

	 	 	 	Hampshire
	 

	 	 	 	SO17 1SS 
	 
	 	 	 	 
	 

	 	Name and address of secretary:
	 	Nicholas Mather
	 

	 	 	 	Newells House
	 

	 	 	 	Newells Lane
	 

	 	 	 	Cutmill
	 

	 	 	 	Bosham
	 

	 	 	 	West Sussex
	 

	 	 	 	PO18 8PS 
	 
	 	 	 	 
	 

	 	Names of subsidiaries (if any):
	 	None 
	 
	 	 	 	 
	 

	 	Mortgages and charges:
	 	None 

Page 25

 

Schedule 2
— Warranties

Part 1 — General warranties

	1	 	Power to sell the Company
	 
	1.1	 	The Vendor has taken all necessary action and has all requisite power and authority to
enter into and perform this agreement in accordance with its terms and the other documents
referred to in it.
	 
	1.2	 	This agreement and the other documents referred to in it constitute (or shall constitute when
executed) valid, legal and binding obligations on the Vendor in the terms of the agreement and
such other documents.
	 
	1.3	 	Compliance with the terms of this agreement and the documents referred to in it shall not
breach or constitute a default under any agreement or instrument to which the Vendor is a
party or by which it is bound.

	2	 	Shares in the Company and Subsidiary
	 
	2.1	 	The Shares constitute the whole of the allotted and issued share capital of the Company
and are fully paid.
	 
	2.2	 	The Vendor is the sole legal and beneficial owner of the Shares.
	 
	2.3	 	The Shares are free from all Encumbrances.
	 
	2.4	 	No right has been granted to any person to require the Company to issue any share capital and
no Encumbrance has been created in favour of any person affecting any unissued shares or
debentures or other unissued securities of the Company.
	 
	2.5	 	No commitment has been given to create an Encumbrance affecting the Shares (or any unissued
shares or debentures or other unissued securities of the Company) or for any of them to issue
any share capital and no person has claimed any rights in connection with any of those things.
	 
	2.6	 	The Company:

	 	(a)	 	does not hold or beneficially owns, or has agreed to acquire, any securities of
any corporation save for the Subsidiary; or
	 
	 	(b)	 	has not agreed to become a member of any partnership or other unincorporated
association, joint venture or consortium (other than recognised trade associations); or
	 
	 	(c)	 	has not, outside its country of incorporation, any branch or permanent
establishment; or
	 
	 	(d)	 	has not allotted or issued any securities that are convertible into shares.

	2.7	 	The Company has not at any time:

	 	(a)	 	purchased, redeemed or repaid any of its own share capital; or
	 
	 	(b)	 	given any financial assistance in connection with any acquisition of its share
capital or the share capital of its holding Company (as that expression is defined in
section 736 of the companies acts) as it would fall within sections 151 to 158
(inclusive) of the companies acts.

Page 26

 

	2.8	 	All dividends or distributions declared, made or paid by the Company have been declared, made
or paid in accordance with its memorandum, articles of association, the applicable provisions
of the Companies Acts and any agreements or arrangements made with any third party regulating
the payment of dividends and distributions.
	 
	2.9	 	Save as disclosed in the Disclosure Letter, the Subsidiary has no assets or liabilities and
is dormant.

	3	 	Constitutional and corporate documents
	 
	3.1	 	All statutory books and registers of the Company have been properly kept in all material
respects and no notice or allegation that any of them is incorrect or should be rectified has
been received.
	 
	 	 	Information
	 
	3.2	 	All information contained in the Disclosure Letter is true and accurate and not misleading.
	 
	3.3	 	The particulars relating to the Company in this agreement are true and accurate and not
misleading.

	4	 	Compliance with laws
	 
	 	 	So far as the Vendor is aware, the Company has at all times conducted its business in
accordance with all applicable laws and regulations.

	5	 	Licences and consents
	 
	 	 	The Company has all necessary licences, consents, permits and authorities necessary to
carry on its business in the places and in the manner in which its business is now carried
on, all of which are valid and subsisting.

	6	 	Insurance
	 
	6.1	 	Particulars of those insurance policies currently effected by the Company and set out in
the Disclosure Letter are not misleading.
	 
	6.2	 	There are no material outstanding claims under, or in respect of the validity of any of those
policies and so far as the Vendor is aware, there are no circumstances likely to give rise to
any claim under any of those policies.
	 
	6.3	 	All the insurance policies are in full force and effect, are not void or voidable, and so far
as the Vendor is aware, nothing has been done or not done which could make any of them void or
voidable and completion will not terminate, or entitle any insurer to terminate, any such
policy.

	7	 	Power of attorney
	 
	7.1	 	There are no powers of attorney in force given by the Company.
	 
	7.2	 	No person, as agent or otherwise, is entitled or authorised to bind or commit the Company to
any obligation not in the ordinary course of the Company business.
	 
	7.3	 	The Disclosure Letter sets out details of all persons who have authority to bind the Company
in the ordinary course of business.

Page 27

 

	8	 	Disputes and investigations
	 
	8.1	 	The Company:

	 	(a)	 	Is not engaged in any litigation, administrative, mediation or arbitration
proceedings or other proceedings or hearings before any statutory or governmental body,
department, board or agency (except for debt collection in the normal course of
business); or
	 
	 	(b)	 	Is not the subject of any investigation, inquiry or enforcement proceedings by
any governmental, administrative or regulatory body.

	8.2	 	No director of the Company is, to the extent that it relates to the business of the Company,
engaged in or subject to any of the matters mentioned in paragraph 8.1(a) of this Schedule 2.
	 
	8.3	 	No such proceedings, investigation or inquiry as are mentioned in paragraph 8.1(a) or
paragraph 8.1(b) of this Schedule 2 have been threatened and so far as the Vendor is aware, no
such proceedings are pending and there are no circumstances likely to give rise to any such
proceedings.
	 
	8.4	 	The Company is not affected by any existing or pending judgments or rulings and has not given
any undertakings arising from legal proceedings to a court, governmental agency, regulator or
third party.

	9	 	Defective products and services
	 
	9.1	 	No proceedings have been served and so far as the Vendor is aware none are pending or have
been threatened against the Company in which it is claimed that any products sold by the
Company concerned are defective, not appropriate for their intended use or have caused bodily
injury or material damage to any person or property when applied or used as intended.
	 
	9.2	 	No proceedings have been served and so far as the Vendor is aware there are no outstanding
liabilities or claims pending or threatened against the Company in respect of any services
supplied by the Company for which the Company is or may become liable and no dispute exists
between the Company and any of their respective customers.

	10	 	Customers and suppliers
	 
	10.1	 	In the 12 months ending with the date of this Agreement, the business of the Company has
not been materially affected in an adverse manner as a result of any one or more of the
following things happening to the Company:

	 	(a)	 	The loss of any of its customers or suppliers of significance; or
	 
	 	(b)	 	A reduction in trade with its customers or in the extent to which it is
supplied by any of its suppliers; or
	 
	 	(c)	 	A change in the terms on which it trades with or is supplied by any of its
customers or suppliers.

	11	 	Competition
	 
	11.1	 	The definition in this paragraph applies in this agreement.
	 
	 	 	Competition Law: the national and directly effective legislation of any jurisdiction which
governs the conduct of companies or individuals in relation to restrictive or other
anti-competitive agreements or practices (including, but not limited to, cartels, pricing,
resale pricing, market sharing, bid rigging, terms of trading, purchase or supply and joint
ventures),

Page 28

 

	 	 	dominant or monopoly market positions (whether held individually or collectively) and the
control of acquisitions or mergers.
	 
	11.2	 	The Company is not engaged in any agreement, arrangement, practice or conduct which amounts
to an infringement of the Competition Law of any jurisdiction in which the Company conducts
business and no director is engaged in any activity which would be an offence or infringement
under any such competition law.
	 
	11.3	 	The Company is not the subject of any investigation, inquiry or proceedings by any relevant
government body, agency or authority in connection with any actual or alleged infringement of
the Competition Law of any jurisdiction in which the Company conducts business.
	 
	11.4	 	No such investigation, inquiry or proceedings as mentioned in paragraph 11.3 of this Schedule
2 have been threatened or are pending and so far as the Vendor is aware there are no
circumstances likely to give rise to any such investigation, inquiry or proceedings.
	 
	11.5	 	The Company is not affected by any existing or pending decisions, judgments, orders or
rulings of any relevant government body, agency or authority responsible for enforcing the
Competition Law of any jurisdiction and the Company has not given any undertakings or
commitments to such bodies which affect the conduct of the business.
	 
	11.6	 	The Company is not in receipt of any payment, guarantee, financial assistance or other aid
from the government or any state body which was not, but should have been, notified to the
European Commission under article 88 of the EC treaty for decision declaring such aid to be
compatible with the common market.

	12	 	Contracts
	 
	12.1	 	The definition in this paragraph applies in this agreement.
	 
	 	 	Material Contract: an agreement or arrangement to which the Company is a party or is bound
by and which is of material importance to the business, profits or assets of the Company.
	 
	12.2	 	Except for the agreements and arrangements disclosed, the Company is not a party to or
subject to any agreement or arrangement which:

	 	(a)	 	Is a Material Contract; or
	 
	 	(b)	 	Is of an unusual or exceptional nature; or
	 
	 	(c)	 	Is not in the ordinary and usual course of business of the Company; or
	 
	 	(d)	 	May be terminated as a result of any change of control of the Company; or
	 
	 	(e)	 	Restricts the freedom of the Company to carry on the whole or any part of its
business in any part of the world in such manner as it thinks fit; or
	 
	 	(f)	 	Involves agency or distributorship; or
	 
	 	(g)	 	Involves partnership, joint venture, consortium, joint development,
shareholders or similar arrangements; or
	 
	 	(h)	 	Is incapable of complete performance in accordance with its terms within six
months after the date on which it was entered into; or
	 
	 	(i)	 	Cannot be readily fulfilled or performed by the Company on time and without
undue or unusual expenditure of money and effort; or

Page 29

 

	 	(j)	 	Involves or is likely to involve an aggregate consideration payable by or to
the Company in excess of £20,000; or
	 
	 	(k)	 	Requires the Company to pay any commission, finders’ fee, royalty or the like;
or
	 
	 	(l)	 	Is for the supply of goods and/or services by or to the Company on terms under
which retrospective or future discounts, price reductions or other financial incentives
are given; or
	 
	 	(m)	 	Is not on arm’s length terms; or
	 
	 	(n)	 	Provides for payments or other dealings in or calculated by reference to the
euro.

	12.3	 	Each Material Contract is in full force and effect and binding on the parties to it. The
Company has not defaulted under or breached a Material Contract and so far as the Vendor is
aware no other party to a Material Contract has defaulted under or in any material respect
breached such a contract.
	 
	12.4	 	No notice of termination of a Material Contract has been received or served by the Company
and there are no grounds for determination, rescission, avoidance, repudiation or a material
change in the terms of any such contract.

	13	 	Transactions with the Vendor
	 
	13.1	 	There is no outstanding indebtedness or other liability (actual or contingent) and no
outstanding contract, commitment or arrangement between the Company and any of the following:

	 	(a)	 	The Vendor or any member of the Vendor’s Group or person connected with the
Vendor; or
	 
	 	(b)	 	Any director of a member of the Vendor’s Group or any person connected with
such a member or director.

	13.2	 	Neither the Vendor, nor any person connected with the Vendor, is entitled to a claim of any
nature against the Company or has assigned to any person the benefit of a claim against the
Company to which the Vendor or a person connected with the Vendor would otherwise be entitled.

	14	 	Finance and guarantees
	 
	14.1	 	The Company has no borrowings other than Company Indebtedness.
	 
	14.2	 	Save for the Company Charges no guarantee, mortgage, charge, pledge, lien, assignment or
other security agreement or arrangement has been given by or entered into by the Company or
any third party in respect of borrowings or other obligations of the Company.
	 
	14.3	 	The Company does not have any outstanding loan capital, or has lent any money that has not
been repaid, and there are no debts owing to the Company other than debts that have arisen in
the normal course of business.
	 
	14.4	 	The Company has not:

	 	(a)	 	Factored any of its debts or discounted any of its debts or engaged in
financing of a type which would not need to be shown or reflected in the accounts; or
	 
	 	(b)	 	Waived any right of set-off it may have against any third party.

Page 30

 

	14.5	 	No debt included in the Accounts or which has subsequently arisen in favour of the Company
has arisen otherwise than in the ordinary course of trade of the Company.
	 
	14.6	 	No indebtedness of the Company is due and payable and no security over any of the assets of
the Company is now enforceable, whether by virtue of the stated maturity date of the
indebtedness having been reached or otherwise. The Company has not received any notice whose
terms have not been fully complied with and/or carried out from any creditor requiring any
payment to be made and/or intimating the enforcement of any security which it may hold over
the assets of the Company.
	 
	14.7	 	The Company has not given or entered into any guarantee, mortgage, charge, pledge, lien,
assignment or other security agreement or arrangement or is responsible for the indebtedness,
or for the default in the performance of any obligation, of any other person.
	 
	14.8	 	The Company is not subject to any arrangement for receipt or repayment of any grant, subsidy
or financial assistance from any government department or other body.

	15	 	Insolvency
	 
	15.1	 	The Company:

	 	(a)	 	is not insolvent or unable to pay its debts within the meaning of the
Insolvency Act 1986 or any other insolvency legislation applicable to the Company
concerned; and
	 
	 	(b)	 	Has not stopped paying its debts as they fall due.

	15.2	 	No step has been taken to initiate any process by or under which the ability of the creditors
of the Company to take any action to enforce their debts is suspended, restricted or prevented
or a person is appointed to manage the affairs, business and assets of the Company.
	 
	15.3	 	In relation to the Company:

	 	(a)	 	No administrator has been appointed;
	 
	 	(b)	 	No documents have been filed with the court for the appointment of an
administrator; and
	 
	 	(c)	 	No notice of an intention to appoint an administrator has been given by the
Company, its directors or by a qualifying floating charge holder (as defined in
paragraph 14 of schedule bi to the Insolvency Act 1986).

	15.4	 	No process has been initiated which could lead to the Company being dissolved and its assets
being distributed among the Company’s creditors, shareholders or other contributors.
	 
	15.5	 	No distress, execution or other process has been levied on an asset of the Company.

	16	 	Assets
	 
	16.1	 	The Company is the full legal and beneficial owner without encumbrance of, and has good
and marketable title to and has possession and control of all the assets included in the
Accounts, any assets acquired since the Accounts Date and all other assets used by the
Company, except for those disposed of since the Accounts Date in the normal course of
business.
	 
	16.2	 	The Purchaser’s acquisition of the Shares and entry into this Agreement shall afford it all
rights and assets both tangible and intangible sufficient to enable the Company to conduct the
Business hereafter in the manner in which it has been conducted immediately prior to
Completion.

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	17	 	Condition of plant and equipment and stock in trade
	 
	 	 	The stock-in-trade of the Company is in good condition and is capable of being sold by
the Company in the ordinary course of its business in accordance with its current price list
without discount, rebate or allowance to a buyer save for promotional discounting in the
ordinary course.

	18	 	Environmental
	 
	18.1	 	The definitions in this paragraph apply in this agreement.
	 
	 	 	Hazardous Substances means any natural or artificial substance (whether solid, liquid or gas
and whether alone or in combination with any other substance or radiation), capable of
causing harm to any human or other living organism or the Environment.
	 
	 	 	Environment means air, water and land, all living organisms and natural or man-made
structures.
	 
	 	 	Environmental Law means any law in so far as it relates to Environmental Matters.
	 
	 	 	Environmental Matters means the protection of human health, the protection and condition of
the Environment, the condition of the workplace, the generation, transportation, storage,
treatment, emission, deposit and disposal of any Hazardous Substance or Waste.
	 
	 	 	Waste means all waste, including any unwanted or surplus substance irrespective of whether
it is capable of being recycled or recovered or has any value.
	 
	18.2	 	All permits, consents and licences required or issued under Environmental Law which are
necessary for carrying on the Business are in full force and effect and have been complied
with and so far as the Vendor is aware there are no circumstances (including, but not limited
to, the sale of the Shares to the Purchaser) likely to give rise to the modification,
suspension or revocation of or lead to the imposition of unusual or onerous conditions on, or
to prejudice the renewal of any of those permits, consents or licences.
	 
	18.3	 	So far as the Vendor is aware, the Company has at all times complied with all Environmental
Laws in all material respects.
	 
	18.4	 	No proceeding or action relating to Environmental Law has been taken, is so far as the Vendor
is aware pending or threatened against the Company or any employees, directors or officers of
the Company by any competent authority or any other person.

	19	 	Intellectual Property Rights
	 
	19.1	 	Complete and accurate particulars are set out in Part 2 of Schedule 4 of all registered
Intellectual Property Rights (including applications for such rights) owned by the Company.
	 
	19.2	 	The Data Room contains particulars of material licences, agreements, authorisations and
permissions granted in writing under which:

	 	(a)	 	the Company uses or exploits Intellectual Property Rights owned by any third
party; or
	 
	 	(b)	 	the Company has licensed or agreed to license Intellectual Property Rights to,
or otherwise permitted the use of any Intellectual Property Rights by, any third party.

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	19.3	 	Except as referred to in the immediately preceding sub-paragraph, the Company is the sole
legal and beneficial owner of (or applicant for) the Intellectual Property Rights set out in
Part 2 of Schedule 4, free from all Encumbrance.
	 
	19.4	 	The Company does not require any Intellectual Property Rights other than those set out in
Schedule 4 in order to carry out its activities.
	 
	19.5	 	The Intellectual Property Rights set out in Part 2 of Schedule 4 are, so far as the Vendor is
aware, subsisting and so far as the Vendor is aware nothing has been done or not been done as
a result of which any of them has ceased to be subsisting. In particular:

	 	(a)	 	all application and renewal fees for the maintenance or protection of such
rights have been paid on time;
	 
	 	(b)	 	so far as the Vendor is aware all material confidential information (including
know-how and trade secrets) owned or used by the Company has been kept confidential and
has not been disclosed to third parties (other than parties who have signed written
confidentiality undertakings in respect of such information, details of which are set
out in the Disclosure Letter);
	 
	 	(c)	 	no mark, trade name or domain name identical or similar to any of the
Intellectual Property Rights set out in Part 2 of Schedule 4 has been registered, or so
far as the Vendor is aware is being used by any person in the same or a similar
business to that of the Company, in any country in which the Company has registered or
is using that mark, trade name or domain name; and
	 
	 	(d)	 	so far as the Vendor is aware there are and have been no claims, challenges,
disputes or proceedings, pending or threatened, in relation to the ownership or use of
such rights.

	19.6	 	So far as the Vendor is aware there has been no infringement by any third party of any
Intellectual Property Right set out in Part 2 of Schedule 4, nor any third party breach of
confidence or passing off in relation to the business and assets of the Company and no such
infringement, breach of confidence or passing off is, so far as the Vendor is aware, current
or anticipated.
	 
	19.7	 	The activities of the Company have neither:

	 	(a)	 	infringed the Intellectual Property Rights of any third party; nor
	 
	 	(b)	 	constituted any breach of confidence or passing off in relation to any third
party,
in either case in any country in which the Company is trading.

	19.8	 	A Change of Control of the Company will not result in the termination of, or have a material
affect on any of the Intellectual Property Rights set out in Schedule 4.
	 
	20	 	Information technology
	 
	20.1	 	The definitions in this paragraph apply in this Agreement.
	 
	 	 	IT System: all computer hardware (including network and telecommunications equipment) and
software (including associated preparatory materials, user manuals and other related
documentation) owned, used, leased or licensed by or to the Company located at the Property
through which the Business is carried on together with the SAGE franchise system software
and related server wheresoever situate.

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	20.2	 	The IT System has been properly maintained, is in good working order and is sufficient for
the purposes of the Business as currently carried on by the Vendor.
	 
	20.3	 	The Company is the registered owner of the domain name utilising the name Bear Factory. So
far as the Vendor is aware, the Company owns or has sufficient licences to use the
Intellectual Property in the software code relating to the operation of the associated
website.
	 
	21	 	Employees, etc.
	 
	21.1	 	Particulars of Employees
	 
	 	 	The particulars of all Employees annexed to the Disclosure Letter show the name of the
relevant Vendor Group Company that employs them, the job title, date of commencement of
employment, type of contract (whether full or part-time or other) and date of birth of every
Employee.
	 
	21.2	 	Remuneration and benefits
	 
	 	 	The particulars annexed to the Disclosure Letter show all remuneration and other benefits:

	 	(a)	 	actually provided; and
	 
	 	(b)	 	which the Company is bound to provide (whether now or in the future);
	 
	 	 	 	to each Employee.

	21.3	 	Notice periods
	 
	 	 	The terms of employment of all Employees are such that their employment may be terminated by
not more than three months’ notice given at any time without liability for any payment
including by way of compensation or damages (except for unfair dismissal or a statutory
redundancy payment).
	 
	21.4	 	Changes since the Accounts Date
	 
	 	 	Since the Accounts Date the Company has not made any changes to the emoluments or benefits
of or any bonus to any of their respective Employees and the Company is under no obligation
to make any such changes with or without retrospective operation.
	 
	21.5	 	Claims by Employees
	 
	 	 	No past or present Employee (or any employee of a predecessor in business) has any claim or
right of action against the Company including (but not limited to) any claim:

	 	(a)	 	in respect of any accident or injury which is not fully covered by insurance;
or
	 
	 	(b)	 	for breach of any contract of service or for services; or
	 
	 	(c)	 	for loss of office or arising out of or connected with the termination of his
office or employment; or
	 
	 	(d)	 	under any legislation applying in England and Wales affecting contractual or
other relations between employers and their employees or workers, including but not
limited to any legislation and any amendment, extension or re-enactment of such
legislation and so far as the Vendor is aware any claim arising under European treaty
provisions or directives
	 
	 	 	 	and no event or inaction has occurred which could or might give rise to any such
claim of which the Company is aware.

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	21.6	 	Miscellaneous
	 
	21.6.1	 	Every Employee who requires a work permit to work in the United Kingdom has a current work
permit or other permission and all necessary permission to remain in the United Kingdom.
	 
	21.6.2	 	The acquisition of the Shares by the Purchaser will not enable any Employee to terminate
his/her employment or receive any payment or other benefit.
	 
	21.6.3	 	Neither the Vendor nor the Company is involved in any industrial or trade dispute or
negotiation regarding a claim with any trade union, group or organisation of employees or
their representatives representing Employees and so far as the Vendor is aware there is
nothing likely to give rise to such a dispute or claim other than the Employee Transfer.
	 
	21.6.4	 	No subject access requests made to the Vendor or the Company by Employees are outstanding
and the Vendor and the Company have complied in all material respects with the provisions of
the Data Protection Act 1998 in respect of all personal data held or processed by them
relating to the Employees.
	 
	21.6.5	 	Neither the Vendor nor the Company will seek to procure that an Employee ceases to work for
the Company (whether by resignation or otherwise).
	 
	21.6.6	 	There are no sums owing to or from any Employee other than reimbursement of expenses, wages
for the current salary period and holiday pay for the current holiday year.
	 
	21.6.7	 	Neither the Vendor nor the Company has offered, promised or agreed to any future variation
in the employment contract of any Employee.
	 
	21.6.8	 	In respect of each Employee, the Vendor and the Company have:

	 	(a)	 	performed all obligations and duties they are required to perform (and settled
all outstanding claims), whether arising under contract, statute, at common law or in
equity or so far as the Vendor is aware under any treaties including the EC Treaty or
laws of the European Community or otherwise; and
	 
	 	(b)	 	complied with the terms of any relevant agreement or arrangement with any trade
union, employee representative or body of employees or their representatives (whether
binding or not); and
	 
	 	(c)	 	maintained adequate, suitable and up to date records.

	22	 	Pensions
	 
	22.1	 	Particulars
	 
	22.1.1	 	The Vendor’s Group Personal Pension Scheme operated by Scottish Equitable (Pension Scheme)
is the only arrangement (other than the State benefits system) under which the Employing
Company has any obligation to provide or contribute towards retirement and death benefits in
respect of the Employees and no proposal or announcement has been made to any Employee about
the introduction of any arrangement to provide such benefits.
	 
	22.1.2	 	The Vendor has provided the Buyer with:

	 	(a)	 	a list of all Employees in respect of whom it contributes to the Pension
Scheme; and
	 
	 	(b)	 	details of the liability of the Employing Company to contribute to the Pension
Scheme in respect of those Employees.

	22.1.3	 	All contributions for the period up to Completion due from the Employing Company to the
Pension Scheme in respect of Employees have been paid and, apart from the liability to

Page 35

 

	 	 	contribute referred to at paragraph 22.1.2, the Employing Company has no liability to
contribute to or in respect of the Pension Scheme in any respect.
	 
	22.1.4	 	The Employing Company has facilitated access for the Employees who are not members of the
Pension Scheme to a designated stakeholder scheme as required by Section 3 of the Welfare
Reform and Pensions Act 1999.
	 
	22.1.5	 	No proposal or announcement has been made to any Employee about the introduction,
continuance, increase or improvement of any pension, lump sum, death, ill health, disability
or accident benefit.
	 
	22.1.6	 	So far as the Vendor is aware, no claims or complaints have been made or are pending or
threatened in relation to the Pension Scheme or in respect of the provision of (or failure to
provide) pension, lump sum, death, ill health, disability or accident benefits in relation to
any of the Employees and so far as the Vendor is aware there is no fact or circumstance likely
to give rise to such claims or complaints.
	 
	23	 	Property
	 
	23.1	 	The definitions in this paragraph apply in this agreement.
     

Current Use: the use for each Leasehold Property as set out in the Leases.
     

Lease: the lease under which each Leasehold Property is held and ‘Leases’ shall be construed accordingly.
     

Leasehold Properties: the leasehold Properties set out in Schedule 3 and Leasehold Property means any one of them or
part of parts of any one of them.
     

Previously-Owned Land and Buildings: land and buildings that have, at any time before the date of this agreement,
been owned (under whatever tenure) and/or occupied and/or used by the Company, but which are either no longer owned,
occupied or used by the Company, or are owned, occupied or used by one of them but pursuant to a different lease,
licence, transfer or conveyance.
     

Planning Acts: the Town and Country Planning Act 1990; the Planning (Listed Buildings and Conservation Areas) Act
1990; the Planning (Hazardous Substances) Act 1990; the Planning (Consequential Provisions) Act 1990; the Planning
and Compensation Act 1991; the Planning and Compulsory Purchase Act 2004; and any other legislation from time to time
regulating the use or development of land.
     

Properties: the Leasehold Properties and Property means any one of them or any part or parts of any one of them.
     

Property Statutes: the Public Health Acts; the Occupiers Liability Act 1957; the Offices, Shops and Railway Premises
Act 1963; the Health and Safety at Work etc. Act 1974; the Control of Pollution Act 1974; the Occupiers Liability Act
1984; the Environmental Protection Act 1990; the Construction (Design and Management) Regulations 1994; the
Environmental Protection Act 1995; the Disability Discrimination Act 1995; the Control of Asbestos at Work
Regulations 2002; and all regulations, rules and delegated legislation under, or relating to, such statutes.
     

Statutory Agreement: an agreement or undertaking entered into under Section 18 of the Public Health Act 1936; Section
52 of the Town and Country Planning Act 1971; Section 33 of the Local Government (Miscellaneous Provisions) Act 1982;
Section 106 of the Town and Country Planning Act 1990; Section 104 of the Water Industry Act 1991; and any other
legislation (later or earlier) similar to these statutes.

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	23.2	 	The particulars of the Properties set out in Schedule 3 are true, complete and accurate.

	 
	23.3	 	The Properties are the only land and buildings owned, used or occupied by the Company.
	 
	23.4	 	So far as the Vendor is aware the Company does not have any right of ownership, right of use,
option, right of first refusal or contractual obligation to purchase, or any other legal or
equitable right, estate or interest in any land or buildings other than the Properties.
	 
	23.5	 	The Company is solely legally and beneficially entitled to each of the Properties and
confirms that so far as it is aware each of the Properties has a good and marketable title
which for the avoidance of doubt means that each of the Properties are able to be used for the
Current Use and there is nothing in the title which would prevent the transfer or charging of
any of the Leases in the open market in the jurisdictions that they are located save as
provided for in the terms of each Lease
	 
	23.6	 	The Vendor is not aware of any actual or contingent liability in respect of Previously-Owned
Land and Buildings.
	 
	23.7	 	Neither the Company, nor any company that is or has at any time been a subsidiary of the
Company, has given any guarantee or indemnity for any liability relating to any of the
Properties.
	 
	23.8	 	The Vendor is not aware of any circumstance that could render any transaction affecting the
title of the Company to any of the Properties liable to be set aside under the Insolvency Act
1986.
	 
	23.9	 	There are no insurance policies relating to the Company’s title to the Lease for each of the
Properties with the deeds.
	 
	23.10	 	So far as the Vendor is aware, in relation to each Lease, each lessee, tenant, licensee or
occupier has observed and performed in all material respects all covenants, restrictions,
stipulations and other encumbrances and as far as the Vendor is aware there has not been any
waiver of or acquiescence to any breach of them.
	 
	23.11	 	In relation to each Lease, all principal rent and additional rent and all other sums payable
by each lessee, tenant, licensee or occupier under each Lease (Lease Sums) have been paid as
and when they became due and no Lease Sums have been:

	 	(a)	 	Set off or withheld; or
	 
	 	(b)	 	Commuted, waived or paid in advance of the due date for payment.

	 	 	The Properties are not the subject of any agreement for sale, option, right of pre-emption
or right of first refusal save as provided for in the Leases
	 
	23.12	 	The Company has not received written notice that there has been a breach of any covenant,
restriction, stipulation and other encumbrance affecting the Properties.
	 
	23.13	 	So far as the Vendor is aware there are no circumstances which (with or without taking other
action) would entitle any third party to exercise a right of entry to, or take possession of
all or any part of the Properties, or which would in any other way affect or restrict the
continued possession, enjoyment or use of any of the Properties.
	 
	23.14	 	The Vendor is not aware of any matters which are registered as local land charges or,
although not registered, are capable of registration as local land charges.
	 
	23.15	 	No claim or liability (contingent or otherwise) under the Planning Acts in respect of the
Properties, or any Statutory Agreement affecting the Properties, are outstanding, nor are the
Properties the subject of a notice to treat or a notice of entry, and no notice, order
resolution or proposal has been published for the compulsory acquisition, closing, demolition
or clearance

Page 37

 

	 	 	of the Properties, and the Company is not aware of any matter or circumstances which would
lead to any such notice, order, resolution or proposal.
	 
	23.16	 	The Company has not received notice of any breach of any applicable statutory and bye- law
requirement or any regulation, rule and delegated legislation, relating to the Properties and
their current use, including (without limitation) all requirements under the Property
statutes.
	 
	23.17	 	Each of the Properties is in a state of repair and condition sufficient to enable the
Current Use to be carried out therefrom
	 
	23.18	 	There are no development works, redevelopment works or fitting-out works outstanding in
respect of any of the Properties.
	 
	23.19	 	There exists no dispute between the Company and the owner or occupier of any other premises
adjacent to or neighbouring the Properties.
	 
	24	 	Accounts
	 
	24.1.1	 	The Accounts have been prepared in accordance with the Companies Acts and with
accounting standards, policies, principles and practices generally accepted in the UK and in
accordance with the law of that jurisdiction.
	 
	24.2	 	The Accounts have been audited by an auditor or firm of accountants qualified to act as
auditors in the UK and the auditors’ report(s) required to be annexed to the Accounts is
unqualified.
	 
	24.3	 	The Accounts show a true and fair view of the affairs of the Company as at the Accounts Date
and of the profit and loss of the Company for the financial year ended on that date.
	 
	24.4	 	The Accounts have been filed and laid before the Company in general meeting in accordance
with the requirements of the Companies Acts.
	 
	24.5	 	The profit and loss accounts set out in the Management Accounts have been prepared on a
consistent basis and fairly reflect in all material respects the financial and trading
position of the Company as at the date to which they were prepared, except in the following
respects:

	 	(a)	 	taxation;
	 
	 	(b)	 	interest;
	 
	 	(c)	 	group management charges;
	 
	 	(d)	 	amortisation of goodwill;
	 
	 	(e)	 	cost of sales;
	 
	 	(f)	 	foreign currency movements;
	 
	 	(g)	 	any group provisions or adjustments which have been processed through the
management accounts of the Company; and
	 
	 	(h)	 	the Company’s concession at the Vendor’s store in Regent Street, London was not
included in the Management Accounts until April 2005.

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	25	 	Financial and other records
	 
	25.1	 	All financial and other records of the Company:

	 	(a)	 	Have been properly prepared and maintained;
	 
	 	(b)	 	Constitute an accurate record of all matters required by law to appear in them;
	 
	 	(c)	 	Do not contain any material inaccuracies or discrepancies; and
	 
	 	(d)	 	Are in the possession of the Company.

	25.2	 	No notice has been received or allegation made that any of those records are incorrect or
should be rectified.
	 
	25.3	 	All statutory records, including accounting records, required to be kept or filed by the
Company have been properly kept or filed and comply with the requirements of the companies
acts.
	 
	25.4	 	All deeds and documents belonging to the Company are in the possession of the Company.
	 
	26	 	Changes since Accounts Date
	 
	26.1	 	Since the Accounts Date:

	 	(a)	 	The Company has conducted its business in the normal course and as a going
concern;
	 
	 	(b)	 	There has been no material adverse change in the turnover, financial or trading
position of the Company;
	 
	 	(c)	 	The Company has not issued or agreed to issue any share or loan capital;
	 
	 	(d)	 	No dividend or other distribution of profits or assets has been, or agreed to
be, declared, made or paid by the Company;
	 
	 	(e)	 	Save in respect of the costs of the Refit and Refresh Programme relating to the
Company’s stores (which has now been completed), details of which are set out in the
Data Room, the Company has not borrowed or raised any money or taken any form of
financial security and no capital expenditure has been incurred on any individual item
by the Company in excess of £25,000 and the Company has not acquired, invested or
disposed of (or agreed to acquire, invest or dispose of) any individual item in excess
of £25,000;
	 
	 	(f)	 	No shareholder resolutions of the Company have been passed other than as
routine business at the annual general meeting;
	 
	 	(g)	 	There has been no abnormal increase or reduction of stock in trade;
	 
	 	(h)	 	None of the stock in trade reflected in the Accounts has realised an amount
less than the value placed in it in the Accounts; and
	 
	 	(i)	 	Save for promotional discounts in the ordinary course, the Company has not
offered price reductions or discounts or allowances on sales of stock in trade, or sold
stock in trade at less than cost price.

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	27	 	Effect of Sale of Shares
	 
	 	 	Neither the acquisition of the Shares by the Purchaser nor compliance with the terms of
this Agreement will:

	 	(a)	 	entitle any person to receive from the Company any finder’s fee, brokerage or
other commission in connection with the purchase of the Shares by the Purchaser; or
	 
	 	(b)	 	so far as the Vendor is aware result in any customer or supplier being entitled
to cease dealing with the Company or to reduce substantially its existing level of
business or to change the terms on which it deals with the Company; or
	 
	 	(c)	 	so far as the Vendor is aware result in a breach of contract, law, regulation,
order, judgment, injunction, undertaking, decree or other like imposition.

Part 2 Tax Warranties

	28	 	General
	 
	28.1	 	All notices, returns (including any land transaction returns), reports, accounts,
computations, statements, assessments and registrations and any other necessary information
submitted by the Company to any Tax Authority for the purposes of Taxation have been made on a
proper basis, were punctually submitted, were accurate and complete in all material respects
when supplied and remain accurate and complete in all material respects and there is no open
material dispute with a Tax Authority.
	 
	28.2	 	All Tax for which the Company is or has been liable or is liable to account for has been duly
paid (insofar as such Tax ought to have been paid).
	 
	28.3	 	The Company has not made any payments representing instalments of corporation tax pursuant to
the Corporation Tax (Instalment Payments) Regulations 1998 in respect of any current or
preceding accounting periods and is not under any obligation to do so.
	 
	28.4	 	The Company has not paid since the date of its incorporation nor is liable to pay any
material penalty, fine, surcharge or interest charged by virtue of the provisions of the TMA
1970 or any other Taxation Statue.
	 
	28.5	 	The Company has not within the past 12 months been subject to any non routine visit, audit,
investigation (so far as the Warranties are aware), discovery or access by any Taxation
Authority.
	 
	28.6	 	The amount of Tax chargeable on the Company during any accounting period ending on or within
the six years before Completion has not, to any material extent, depended on any concession,
agreements or other formal or informal arrangement with any Tax Authority.
	 
	28.7	 	All transactions in respect of which any clearance or consent was required from any Tax
Authority have been entered into by the Company after such consent or clearance has been
properly obtained, any application for such clearance or consent has been made on the basis of
full and accurate disclosure of all relevant material facts and considerations, and all such
transactions have been carried into effect only in accordance with the terms of the relevant
clearance or consent.
	 
	28.8	 	The Company has duly submitted all claims, disclaimers and elections the making of which has
been assumed for the purposes of the Accounts.
	 
	28.9	 	The Company is not liable to pay to any person (including any Tax Authority) Tax of any other
person where that other person has failed to discharge liability to Tax.

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	28.10	 	The Company has sufficient records to determine the tax consequence which would arise on any
disposal or realisation of any asset owned at the Account Date or acquired since that date but
prior to Completion.
	 
	29	 	Capital allowances
	 
	29.1	 	No event has occurred since the Accounts Date (otherwise than in the ordinary course of
business) whereby any balancing charge may fall to be made against, or any disposal value may
fall to be brought into account by the Company under the Capital Allowances Act 2001 (or any
other legislation relating to capital allowances).
	 
	30	 	Distributions
	 
	30.1	 	No distribution or deemed distribution within the meaning of sections 209, 210 or 211 of
ICTA 1988 has been made by the Company in the last six years except dividends shown in the
Company’s Audited Accounts and the Company is not bound by law to make any such distribution.
	 
	30.2	 	No rents, interest, annual payments or other sums of an income nature paid by the Company or
which the Company is under an existing obligation to pay in the future are wholly or partially
disallowable as deductions, management expenses or charges in computing profits for the
purposes of corporation tax.
	 
	30.3	 	The Company has not within the last six years been engaged in, nor been a party to, any of
the transactions set out in sections 213 to 218 (inclusive) of ICTA 1988, nor has it made or
received a chargeable payment as defined in section 218(1) of ICTA 1988.
	 
	31	 	Loan Relationships
	 
	31.1	 	All interests, discounts and premiums payable by the Company in respect of its loan
relationships (within the meaning of section 81 of the Finance Act 1996) are eligible to be
brought into account by the Company as a debit for the purposes of Chapter II of Part IV of
the Finance Act 1996 at the time and to the extent that such debits are recognised in the
statutory accounts of the Company
	 
	31.2	 	There are no circumstances whether arising in respect of a period before or after Completion
in connection with the making of any loan by the Company prior to Completion whereunder
Section 419 ICTA could take effect.
	 
	32	 	Close companies
	 
	 	 	The Company is not and has not within the last six years been a close company within
the meaning of sections 414 and 415 of ICTA 1988.
	 
	33	 	Intangible assets
	 
	33.1	 	For the purposes of this paragraph 33, references to intangible fixed assets mean
intangible fixed assets and goodwill within the meaning of Schedule 29 to the Finance Act 2002
and references to an intangible fixed asset shall be construed accordingly.
	 
	33.2	 	No claims or elections have been made by the Company under Part 7 of, or paragraph 86 of
Schedule 29 to, the Finance Act 2002 in respect of any intangible fixed asset of the Company.

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	33.3	 	Since the Accounts Date:

	 	(a)	 	the Company does not own an asset which has ceased to be a chargeable
intangible asset in the circumstances described in paragraph 108 of Schedule 29 to the
Finance Act 2002;
	 
	 	(b)	 	the Company has not realised or acquired an intangible fixed asset for the
purposes of Schedule 29 to the Finance Act 2002; and
	 
	 	(a)	 	no circumstances have arisen which have required, or will require, a credit to
be brought into account by the Company on a revaluation of an intangible fixed asset.

	34	 	Company Residence and Overseas Interests
	 
	34.1	 	The Company has since incorporation been resident in the United Kingdom for corporation
tax purposes and has not at any time since incorporation been treated for the purposes of any
double taxation arrangements having effect by virtue of section 249 of the Finance Act 1994,
section 788 of ICTA 1988 or for any other tax purpose as resident in any other jurisdiction.
	 
	35	 	Overseas Interests
	 
	35.1	 	The Company does not hold any interest in a controlled foreign company within section 747
of ICTA 1988, and the Company does not have any material interest in an offshore fund as
defined in section 759 of ICTA 1988.
	 
	35.2	 	The Company does not have a permanent establishment outside the UK.
	 
	36	 	Transfer Pricing
	 
	 	 	The Company has not received any notice of enquiry from HM Revenue & Customs in
relation to section 770A of, or Schedule 28AA to, ICTA 1988 in respect of non-arm’s length
dealings by the Company and, so far as the Seller is aware, there are no circumstances
existing at Completion which will give rise to an adjustment by HM Revenue & Customs under
section 770A of, or Schedule 28AA to, ICTA 1988.
	 
	37	 	VAT
	 
	37.1	 	The Company is a taxable person and is duly registered for the purposes of VAT with
quarterly prescribed accounting periods, such registration not being pursuant to paragraph 2
of Schedule 1 to the VATA 1994 or subject to any conditions imposed by or agreed with HM
Revenue & Customs and the Company is not under a duty to make monthly payments on account
under the Value Added Tax (Payments on Account) Order 1993.
	 
	37.2	 	All supplies made by the Company are taxable supplies and the Company has not been denied
credit for input tax by reason of the operation of sections 25 and 26 of the VATA 1994 in the
last three years.
	 
	37.3	 	The Company is not or has not been for VAT purposes a member of any group of companies (other
than the group comprising the Company and the Subsidiary alone) and, so far as the Vendor is
aware, no act or transaction has been effected in consequence whereof the Company is or may be
held liable for any VAT arising from supplies made by another company and no direction has
been given by a Tax Authority under Schedule 9A to the VATA 1994 as a result of which the
Company would be treated for the purposes of VAT as a member of a group.

Page 42

 

	37.4	 	For the purposes of paragraph 3(7) of Schedule 10 to the VATA 1994, the Company or any
relevant associates of the Company (within the meaning of paragraph 3(7) of Schedule 10 to the
VATA 1994) has only exercised the election to waive exemption from VAT (pursuant to paragraph
2 of Schedule 10 to the VATA 1994) in respect of those Properties listed (as having been the
subject of such an election) in Schedule 3:

	 	(a)	 	such elections have effect and any notification and information required by
paragraph 3(6) of Schedule 10 to the VATA 1994 have been given and any permission
required by paragraph 3(9) of Schedule 10 to the VATA 1994 has been properly obtained;
and
	 
	 	(b)	 	no election has been disapplied or rendered ineffective by virtue of the
application of the provisions of paragraph 2(3AA) of Schedule 10 to the VATA 1994.

	37.5	 	The Company does not own any assets which are capital items subject to the capital goods
scheme under Part XV of the VAT Regulations 1995.
	 
	37.6	 	The Company has not made any claim for bad debt relief under section 36 of the VATA 1994 in
the last three years.
	 
	38	 	Stamp duty and stamp duty land tax
	 
	38.1	 	Any document that may be necessary to prove the title of the Company to any asset which
is owned by the Company at Completion or any document which the Company needs to enforce or
produce in evidence in the UK is duly stamped for stamp duty purposes.
	 
	38.2	 	Neither entering into this agreement nor Completion will result in the withdrawal of any
stamp duty or stamp duty land tax relief granted on or before Completion which will affect the
Company.
	 
	38.3	 	There is no chargeable interest (as defined under section 18, Finance Act 2003) acquired or
held by the Company before Completion in respect of which the Warrantors are aware that an
additional land transaction return will be required to be filed with a Taxation Authority
and/or a payment of stamp duty land tax will require to be made on or after Completion.
	 
	38.4	 	The Company is not the purchaser in relation to a land transaction to which section 51 of the
Finance Act 2003 applies.

Page 43

 

Schedule 3
— Particulars of the Property

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Current Annual Rent
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Length of term and	 	and Rent Review
	No.	 	Address	 	Original Tenant	 	Current Tenant	 	Guarantor	 	Title No.	 	Date of Lease/ Underlease and Parties	 	commencement	 	Dates
	1

	 	Aberdeen

Unit 30

Bon Accord Centre
	 	The Bear Factory

Limited
	 	The Bear Factory

Limited
	 	None
	 	Not applicable
	 	Registered date 21
January 2003 made
between Bon Accord
(Aberdeen) Limited
and Bon Accord
(Aberdeen) (No. 2)
Limited (1) and The
Bear Factory
Limited (2)
	 	15 years commencing
on 30 August 2002
	 	£164,000 per annum

Rent review on 29
September 2007 and
29 September 2012
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2

	 	Basingstoke

Unit 17a

Festival Place
	 	The Bear Factory

Limited
	 	The Bear Factory

Limited
	 	None
	 	Not registered
	 	6 October 2003 made
between Grosvenor
Basingstoke
Properties Limited
and Grosvenor
Basingstoke
Management Limited
(1) and The Bear
Factory Limited (2)
	 	15 Years commencing
on 22 October 2002
	 	£90,000 per annum

Rent review on 22
October 2007 and 22
October 2012
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	3

	 	Bluewater

Unit L072

Lower Level

South Mall

Kent
	 	The Bear Factory

Limited
	 	The Bear Factory

Limited
	 	None
	 	Not registered
	 	3 August 2001 made
between Blueco
Limited (1) and The
Bear Factory
Limited (2)
	 	15 years from 24
June 2001
	 	£217,500 per annum

Rent review on 24
June 2006 and 24
June 2011
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	4

	 	Brighton

Unit 56 Churchill

Square

East Sussex
	 	DSG Retail Limited
	 	The Bear Factory

Limited
	 	None
	 	ESX274189
	 	12 January 2000
made between the
Standard Life
Assurance Co (1)
and DSG Retail
Limited (2)
	 	15 years commencing
29 September 1998
	 	£148,000

Rent review on 29
September 2008

Page 44

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Date of Lease/	 	 	 	Current Annual Rent
	 	 	 	 	 	 	 	 	 	 	 	 	Underlease and	 	Length of term and	 	and Rent Review
	No.	 	Address	 	Original Tenant	 	Current Tenant	 	Guarantor	 	Title No.	 	Parties	 	commencement	 	Dates
	5

	 	Bristol

Unit BG1 and
Basement storage
Unit BM4
The Galleries
(underlease)
	 	The Bear Factory

Limited
	 	The Bear Factory

Limited
	 	None
	 	BL78309
	 	13 October 2000
between Norwich
Union Life &
Pensions Limited
(1) and The Bear
Factory Limited (2)
	 	15 years commencing
on 1 September 2000
	 	£145,000 — TBC

Rent review on 1
September 2005 and
1 September 2010
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	6

	 	Birmingham

Bull Ring

SU330

Level 3

Bull Ring
	 	The Bear Factory

Limited
	 	The Bear Factory

Limited
	 	None
	 	WM873762
	 	19 May 2004 made
between Bull Ring
No. 1 Limited and
Bull Ring No. 2
Limited (1) and The
Bear Factory
Limited (2)
	 	15 years from 24
June 2003
	 	£209,000 together
with turnover rent
of 10% of turnover
exceeding the basic
yearly rent

Rent review on 24
June 2008 and 24
June 2013
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	7

	 	Cardiff

15 St Davids Way
	 	British Shoe

Corporation Limited
	 	The Bear Factory

Limited
	 	None
	 	WA275848
	 	16 February 1984
between Heron
Cardiff Properties
Limited (1) and
British Shoe
Corporation Limited
(2)
	 	25 years commencing
on 24 June 1981
	 	£106,000
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	8

	 	Chester

20 Newgate Row

Grosvenor Shopping

Centre (underlease)
	 	The Bear Factory

Limited
	 	The Bear Factory

Limited
	 	None
	 	Not registered
	 	20 September 2002
made between
Grosvenor Centre
Limited (1) and The
Bear Factory
Limited (2)
	 	15 years from the
24 June 2002
	 	£139,000

Rent review on 24
June 2007 and 24
June 2012

Page 45

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Current Annual Rent
	 	 	 	 	 	 	 	 	 	 	 	 	Date of Lease/	 	Length of term and	 	and Rent Review
	No.	 	Address	 	Original Tenant	 	Current Tenant	 	Guarantor	 	Title No.	 	Underlease and Parties	 	commencement	 	Dates
	9

	 	Cribbs Causeway

Unit LR14 Lower

Level

The Mall

South

Gloucestershire
	 	The Bear Factory

Limited
	 	The Bear Factory

Limited
	 	None
	 	Not registered
	 	20 July 2001 and
made between the
Prudential
Insurance Company
Limited (1) and The
Bear Factory
Limited (2)
	 	Commencing on 20
July 2001 and
expiring on 23 June
2016
	 	Basic rent per
annum £197,500 and
10% of turnover to
the extent that
exceeds the basic
rent

Rent review on 24
June 2006 and 24
June 2011
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	10

	 	Dundrum

Level 3 Dundrum

Town Centre Dublin
16
	 	The Bear Factory

Limited
	 	The Bear Factory

Limited
	 	None
	 	Not registered
	 	[There is only an
agreement for
lease, the lease
has not been
completed][

Agreement for Lease
dated 15 November
2005 and made
between Crossridge
Investments Limited
(1) and The Bear
Factory trading as
“The Bear Factory”
(2)
	 	25 years
	 	€216,000

Rent review on the
quarter day (being
1 January, 1 April,
1 July and 1
October)
immediately
preceding the term
commencement date
on the
5th,
10th,
15th,
20th and
25th
year of the Term.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	11

	 	Dudley

Unit U92

Phase 5

Merry Hill Centre

West Midlands
	 	Hobbies and Models
Limited (t/a Toy
Stack)
	 	The Bear Factory

Limited
	 	None
	 	Not registered
	 	5 February 1999 and
made between
Chelsfield MH
Investments Limited
(1) and Hobbies and
Models Limited (t/a
Toy Stack) (2)
	 	20 years commencing
on 24 June 1998
	 	£180,000

Rent review on 24
June 2008 and 24
June 2013

Page 46

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Current Annual Rent
	 	 	 	 	 	 	 	 	 	 	 	 	Date of Lease/	 	Length of term and	 	and Rent Review
	No.	 	Address	 	Original Tenant	 	Current Tenant	 	Guarantor	 	Title No.	 	Underlease and Parties	 	commencement	 	Dates
	12

	 	Edinburgh

RU43

Ocean Terminal Leith
	 	The Bear Factory

Limited
	 	The Bear Factory

Limited
	 	None
	 	Not applicable
	 	Registered dated 2
June 2003 made
between Ocean
Terminal Limited
(1) and The Bear
Factory Limited (2)
	 	From 21 October
2002 expiring on 13
October 2012
	 	Rent is the higher
of the Base Rent
and the Turnover
Rent (Turnover Rent
is 10% of Turnover
in a year excluding
VAT)

Rent review on 21
October 2007
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	13

	 	Glasgow

Unit 17

Buchanan Galleries
	 	Hobbies and Models
Limited
	 	The Bear Factory

Limited
	 	None
	 	Not applicable
	 	Registered date 6
December 2000 made
between AMP
Buchanan Plc and
Bredero Buchanan
Plc and (1) Hobbies
and Models Limited
(2)
	 	From 1 February
1999 expiring on 25
December 2023
	 	£163,000

Rent review on 25
December 2008, 25
December 2013 and
25 December 2018
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	14

	 	Glasgow

Unit 67

Braehead Shopping

Centre
	 	The Bear Factory

Limited
	 	The Bear Factory

Limited
	 	None
	 	Not applicable
	 	Registered date 1
July 2003 made
between Braehead
Glasgow Limited and
Braehead Park
Investments Limited
(1) and The Bear
Factory Limited (2)
(the Retail Lease)
	 	15 years from 24
June 2002
	 	£190,000 and 10% of
turnover to the
extent that exceeds
the basic rent

Rent review on 24
June 2007 and 24
June 2012

Page 47

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Current Annual Rent
	 	 	 	 	 	 	 	 	 	 	 	 	Date of Lease/	 	Length of term and	 	and Rent Review
	No.	 	Address	 	Original Tenant	 	Current Tenant	 	Guarantor	 	Title No.	 	Underlease and Parties	 	commencement	 	Dates
	15

	 	Glasgow

Storage Unit

Braehead Shopping

Centre
	 	The Bear Factory

Limited
	 	The Bear Factory

Limited
	 	None
	 	Not applicable
	 	Registered date 18
March 2004 made
between Braehead
Glasgow Limited and
Braehead Park
Investments Limited
and (1) and The
Bear Factory
Limited (2)
	 	From 3rd
February 2003 to
the earlier of
23rd
June 2017 and the
date the Retail
Lease ceases to be
vested in The Bear
Factory Limited
unless the Retail
Lease is replaced
by another lease in
the Braehead
Shopping Centre
	 	£1,395 per annum

Rent Review on
24 June
2007 and 24 June
2012
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	16

	 	Kingston

Unit 57

The Bentall Centre

Kingston Upon

Thames
	 	Hobbies and Models
Limited
	 	The Bear Factory

Limited
	 	None
	 	Not registered
	 	4 April 1996 made
between The Norwich
Union Life
Insurance Society
(1) and Hobbies and
Models Limited (2)
	 	15 years from 1
August 1992
	 	£74,000
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	17

	 	Manchester

Unit L5

The Trafford Centre
	 	The Bear Factory

Limited
	 	The Bear Factory

Limited
	 	None
	 	Not registered
	 	28 September 2001
made between The
Trafford Centre
Limited (1) and The
Bear Factory
Limited (2)
	 	15 years from and
including 31 July
2001
	 	Basic rent of
£235,000 and 12.5%
of turnover to the
extent that exceeds
the basic rent

Rent review on 31
July 2006 and 31
July 2011

Page 48

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Current Annual Rent
	 	 	 	 	 	 	 	 	 	 	 	 	Date of Lease/	 	Length of term and	 	and Rent Review
	No.	 	Address	 	Original Tenant	 	Current Tenant	 	Guarantor	 	Title No.	 	Underlease and Parties	 	commencement	 	Dates
	18

	 	Metro Centre

Unit 87
Ground Floor
Tyne and Wear
	 	British Shoe

Corporation Limited
	 	The Bear Factory

Limited
	 	None
	 	TY218668
	 	27 October 1988
made between the
Church
Commissioners for
England (1) and
British Shoe
Corporation Limited
(2)
	 	24 1/4 years from
24 June 1988, up to
and including 28
September 2012
	 	£205,000 head rent
(sublet income of
£75,000 p.a.
receivable)

Rent review on 29
September 2006
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	19

	 	Milton Keynes

Unit SU15

Ground Floor Level

Midsummer Place

Bucks
	 	The Bear Factory

Limited
	 	The Bear Factory

Limited
	 	Hamleys plc
	 	Not registered
	 	28 March 2001 made
between
Universities
Superannuation
Scheme Limited (1)
and The Bear
Factory Limited (2)
and Hamleys plc (3)
	 	15 years commencing
on 24 June 2000
	 	£145,000 per annum
plus 8% of the
turnover exceeds
the basic rent

Rent review on 24
June 2005 and 24
June 2010

The 2005 rent
review is currently
being negotiated
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	20

	 	Norwich

Unit UG03

Upper Ground Floor

level Chapelfield
	 	The Bear Factory

Limited
	 	The Bear Factory

Limited
	 	None
	 	Not registered
	 	[There is only an
agreement for
lease, the lease
has not been
completed.]

Agreement for lease
dated 17 December
2003 made between
Lendlease Norwich
Limited (1) and
Chapelfield GP
Limited (2) and The
Bear Factory
Limited (3)
	 	Proposed 15 years
from the quarter
day before the
centre opening date
	 	£130,000 per annum

Rent review on each
5th
anniversary of the
commencement of the
term

Page 49

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Current Annual Rent
	 	 	 	 	 	 	 	 	 	 	 	 	Date of Lease/	 	Length of term and	 	and Rent Review
	No.	 	Address	 	Original Tenant	 	Current Tenant	 	Guarantor	 	Title No.	 	Underlease and Parties	 	commencement	 	Dates
	21

	 	Nottingham

Unit 306 and
storage unit
Victoria Centre
	 	Hobbies & Models

Limited (t/a Toy

Stack)
	 	The Bear Factory

Limited
	 	None
	 	Not registered
	 	7 November 1997
made between Dusco
(UK) Limited (1)
and Hobbies &
Models Limited (t/a
Toy Stack) (2)
	 	10 years from 29
September 1997
	 	£107,850
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	22

	 	Reading

U33 Riverside Level

Oracle Shopping

Centre
	 	The Bear Factory

Limited
	 	The Bear Factory

Limited
	 	None
	 	BK387157
	 	5 July 2001 made
between Oracle
Shopping Centre
Limited and Oracle
Nominees Limited
(1) and The Bear
Factory Limited (2)
(underlease)
	 	15 years commencing
on 24 June 2001
	 	Basic rent is
£137,500 plus 10%
of turnover
received over and
above the basic
rent

Rent review on 24
June 2006 and 24
June 2011
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	23

	 	Reading

Storage Unit

For Unit 33 at

Riverside Level

Oracle Shopping

Centre
	 	The Bear Factory

Limited
	 	The Bear Factory

Limited
	 	None
	 	Not registered
	 	5 July 2001 made
between Oracle
Shopping Centre
Limited and Oracle
Nominees Limited
(1) The Bear
Factory Limited (2)
	 	15 years commencing
on the 24 June 2001
	 	£15,000

Rent review on 24
June 2006 and 24
June 2011

Page 50

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Current Annual Rent
	 	 	 	 	 	 	 	 	 	 	 	 	Date of Lease/	 	Length of term and	 	and Rent Review
	No.	 	Address	 	Original Tenant	 	Current Tenant	 	Guarantor	 	Title No.	 	Underlease and Parties	 	commencement	 	Dates
	24

	 	Sheffield

Unit 75

(29 High Street)

The Meadowhall

Centre
	 	Stead & Simpson

Limited
	 	The Bear Factory

Limited
	 	Hamleys plc
	 	SYK355037
	 	1 March 1995 made
between Meadowhall
Centre Limited (1)
and Stead & Simpson
Limited (2)
	 	30 years commencing
on 24 February 1995
and expiring on 3
September 2025
	 	£280,000

Rent review on 25
December 2004, 2009
and 2014, 2019 and
2024

The rent is subject
to a turnover rent
plus 10% of
turnover received
over and above the
basic rent

[The 2004 rent
review currently
being negotiated]
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	25

	 	Solihull

Unit 37A Touchwood

West Midlands
	 	The Bear Factory

Limited
	 	The Bear Factory

Limited
	 	None
	 	Not registered
	 	10 December 2001
made between Capita
(LLRP) Trustee
Limited and
Lendlease Retail
Partnership (1) and
The Bear Factory
Limited (2)
	 	15 years from and
including 24 June
2001
	 	£140,000

Rent review on 24
June 2006 and 24
June 2011
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	26

	 	Stirling

Unit 8 Marches Mall

Thistle Shopping

Centre
	 	The Bear Factory

Limited
	 	The Bear Factory

Limited
	 	None
	 	Not applicable
	 	Registered date 1
September 2003 and
made between The
Standard Life
Assurance Company
(1) and The Bear
Factory Limited (2)
	 	15 years from 21
October 2002
	 	£80,000

Rent review on 21
October 2007 and 21
October 2012

Page 51

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Current Annual Rent
	 	 	 	 	 	 	 	 	 	 	 	 	Date of Lease/	 	Length of term and	 	and Rent Review
	No.	 	Address	 	Original Tenant	 	Current Tenant	 	Guarantor	 	Title No.	 	Underlease and Parties	 	commencement	 	Dates
	27

	 	Telford

Basement and Ground
Floors
Unit 20
Sherwood St
Telford Shopping
Centre
	 	The Bear Factory

Limited
	 	The Bear Factory

Limited
	 	None
	 	Not registered
	 	12 March 2003 made
between Telford
Keystone Estates
(No. 1) Limited and
Telford Keystone
Estates (No. 2)
Limited (1) and The
Bear Factory
Limited (2)
	 	15 years from 1
July 2002
	 	£110,000

Rent Review on 1
July 2007, 1 July
2012 and 1 July
2017
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	28

	 	Watford

43 The Harlequin

Shopping Centre

Watford
	 	Hobbies and Models
Limited (t/a Toy
Stack)
	 	The Bear Factory

Limited
	 	None
	 	HD420443
	 	2 March 1994 made
between Capital &
Counties Plc (1)
and Hobbies and
Models Limited (t/a
Toy Stack) (2)
	 	25 1/4 years from 29
September 1991
	 	£221,750

8% of the amount by
which the turnover
exceeds the basic
rent

Rent review on 29
September 2006, 29
September 2011 and
29 September 2016
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	29

	 	Watford

Storage Unit No 20
The Harlequin
Shopping Centre
	 	Hobbies and Models
Limited
	 	The Bear Factory

Limited
	 	None
	 	Not registered
	 	27 October 2000
made between CSC
Properties Limited
(1) and Hobbies &
Models Limited (2)
	 	5 years commencing
on 25 March 2000
(and including)
	 	£11,430

No rent review

Page 52

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Current Annual Rent
	 	 	 	 	 	 	 	 	 	 	 	 	Date of Lease/	 	Length of term and	 	and Rent Review
	No.	 	Address	 	Original Tenant	 	Current Tenant	 	Guarantor	 	Title No.	 	Underlease and Parties	 	commencement	 	Dates
	30

	 	West Thurrock

Unit 283

Lakeside
	 	Hobbies and Models
Limited (t/a Toy
Stack)
	 	The Bear Factory

Limited
	 	None
	 	EX500102
	 	2 March 1994 made
between Capital &
Counties plc (1)
and Hobbies and
Models Limited (t/a
Toy Stack) (2)
	 	25 1/4 years from 24
June 1993
	 	£276,000 rack rent
equating to
£220,800 base rent
together with 8%
that the annual
turnover exceeds
the basic rent

Rent review of the
basic rent on 24
June 2008, 24 June
2013 and 24 June
2018
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	31

	 	West Quay

Unit SU52 West Quay

Shopping Centre

Above Bar

Southampton
	 	The Bear Factory

Limited
	 	The Bear Factory

Limited
	 	None
	 	Not registered
	 	5 June 2001 made
between West Quay
Shopping Centre
Limited (1) and The
Bear Factory
Limited (2)
	 	15 years from 29
September 2000
	 	£140,000 per annum
together with 10% of
the annual turnover
that exceeds the
basic rent

Rent review on 29
September 2005 and
29 September 2010

Page 53

 

Schedule 4
— Particulars of Intellectual Property Rights

(All registrations or applications are in the name of the Company unless otherwise stated)

	1	 	Licences/assignments granted by the Company
	 
	 	 	The Marks referred to below are the “Bear Factory”, “The Bear Factory”, “BF” and “Ted
the Tailor” trade marks and all other trade or service marks or names or logos and designs
specified in the franchise manual.

	 	 	 	 	 	 	 	 	 	 	 
	Brief description	 	 	 	Terms of agreement	 	Parties to agreement
	of rights granted	 	Territory	 	Price	 	Period	 	Provider	 	Recipient
	Franchise Agreement
granting rights in
the Marks

	 	Kuwait, Saudi
Arabia, UAE,
Bahrain, Qatar and
Lebanon
	 	Royalties
	 	10 Years from 14
May 2002
	 	The Bear Factory
Limited
	 	Alshaya Trading Co
W.L.L.
	 
	 	 	 	 	 	 	 	 	 	 
	Franchise Agreement
granting rights in
the Marks

	 	Turkey
	 	Royalties
	 	10 Years
	 	The Bear Factory
Limited
	 	Alshaya Trading Co
W.L.L.
	 
	 	 	 	 	 	 	 	 	 	 
	Franchise Agreement
granting rights in
the Marks

	 	Switzerland
	 	Royalties
	 	10 Years from 29
March 2003
	 	The Bear Factory
Limited
	 	Waldmeier AG
	 
	 	 	 	 	 	 	 	 	 	 
	Franchise Agreement
granting rights in
the Marks

	 	Stockholm
	 	Royalties
	 	5 Years from 22
April 2002
	 	The Bear Factory
Limited
	 	Baugur Sverige AB
	 
	 	 	 	 	 	 	 	 	 	 
	Franchise Agreement
granting rights in
the Marks

	 	Cyprus and Greece
	 	Royalties
	 	10 Years from 27
August 2003
	 	The Bear Factory
Limited
	 	Maria Xenophontos
Ioannou and
Xenofoula
Xenophontos

	2	 	Registered and Pending Trade Marks

[This schedule is very large and has been circulated separately]

Page 54

 

Schedule 5- Completion Accounts

	1	 	Preparation of Completion Accounts

	1.1	 	The Completion Accounts and the net current asset statement shall be prepared:

	 	(a)	 	under the historical cost convention and in accordance with the specific
provisions of paragraph 2 of this Schedule;
	 
	 	(b)	 	subject to paragraph (a) above, on a basis consistent with the accounting
principles, policies and practices (including similar judgments made on matters of
judgement) used in the preparation of the Accounts; and
	 
	 	(c)	 	(so far as not inconsistent with paragraphs (a) and (b) above) in accordance
with United Kingdom accounting standards and generally accepted accounting principles.

	1.2	 	For the avoidance of doubt paragraph (a) shall take precedence over paragraph (b) and
paragraph (c) shall take precedence over paragraph (b).

	1.3	 	The Completion Accounts will be prepared on the basis that the business of the Company and
the Subsidiary carried on at the Completion Date will be continued in the same manner
thereafter and without regard to the consequences of any changes in the nature or conduct of
such business or in the scale of its activities, product range or methods of operation or of
any other changes whatsoever which are proposed, introduced or take effect on or after the
Completion Date.

	1.4	 	The Completion Accounts shall take the form set out in the pro-formas in paragraph 3 of this
schedule.

	1.5	 	The estimated Net Current Asset Value will be derived in respect of the specific line
headings set out in the ‘Net Current Asset Value’ pro-forma in paragraph 3 of this schedule.

	2	 	Specific Accounting Treatments

The following specific accounting treatments shall be applied in the preparation of the
Completion Accounts:

	2.1	 	Stock will be valued at the lower of invoice cost (including freight and duty) and net
realisable value. Stock includes:

	 	(a)	 	all stock purchased by the Company located at the Company’s stores and
concessions (including at the Vendor’s store in Regent Street, London) and at the
Vendor’s warehouse.
	 
	 	(b)	 	stock in transit and any provisions consistent with the Company’s Accounting
Principles.

	2.2	 	Debtors shall include those relating to franchises, concessions, internet sales and any other
debtors arising in the normal course of the Company’s business and shall be net of any bad
debt provision.

	2.3	 	Prepayments shall include those relating to rental payments, service charge payments and any
other prepayments arising in the normal course of the Company’s business.

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	2.4	 	Trade Creditors shall consist of those arising in the normal course of the Company’s
business.

	2.5	 	Sundry Creditors and Accruals shall include VAT control account, rent free prepayments, net
deferred freight and duty accruals and any other accruals arising in the normal course of the
Company’s business.

	2.6	 	 No accrual will be made for potential costs relating to the closure of stores.

	2.7	 	For the avoidance of doubt, the following shall be excluded from the Completion Accounts:

	 	(a)	 	all cash including cash balances and overdrafts for all bank accounts in the
Company’s name
	 
	 	(b)	 	Intercompany balances
	 
	 	(c)	 	Corporation Tax and deferred taxation

	3	 	Pro-formas

	3.1	 	The numbers contained in the Pro-formas below are for example purposes only and relate to
the Company’s balance sheet as at December 2005 as provided in the data room.
	 
	3.2	 	Fixed Assets

	 	 	 	 	 
	Item	 	£k
	Leasehold Properties

	 	 	382	 
	 
	 	 	 	 
	Fixtures & Fittings

	 	 	3,788	 
	 
	 	 	 	 
	Tangible Fixed Assets

	 	 	4,170	 
	 
	 	 	 	 
	Goodwill

	 	 	7,378	 
	 
	 	 	 	 
	Trademarks

	 	 	109	 
	 
	 	 	 	 
	Intangible Fixed Assets

	 	 	7,487	 
	 

	 	 	 	 
	 
	 	 	 	 
	Total Fixed Assets

	 	 	11,657	 
	 

	 	 	 	 

	3.3	 	Net Current Assets

	 	 	 	 	 
	Stock

	 	 	1,417	 
	Debtors

	 	 	220	 
	Sundry Debtors & Prepayments

	 	 	355	 
	Current Assets

	 	 	1,992	 
	 

	 	 	 	 

page 56

 

 

	 	 	 	 	 
	Trade Creditors

	 	 	(815	)
	 
	 	 	 	 
	Sundry Creditors and Accruals

	 	 	(1,752	)
	 
	 	 	 	 
	Current Liabilities

	 	 	(2,567	)
	 

	 	 	 	 
	 
	 	 	 	 
	Net Current Asset Value

	 	 	575	 
	 

	 	 	 	 

page 57

 

 

Schedule 6  — Completion arrangements

	1	 	Vendor’s obligations at Completion
	 
	1.1	 	Board meetings

At Completion the Vendor shall procure that a board meeting of each of the Company and the
Subsidiary is duly convened and held at which valid resolutions are passed to:

	 	(a)	 	(in the case of the Company only) approve the transfer referred to in paragraph
1.1(d) below for entry in the statutory books of the Company, subject to stamping;
	 
	 	(b)	 	(in the case of the Company only) approve the payments to be made to or by the
Company under Clause 6;
	 
	 	(c)	 	appoint with effect from the end of the meeting as directors and secretary of
each of the Company and the Subsidiary such persons as the Purchaser may nominate;
	 
	 	(d)	 	(in the case of the Company only) approve the entering into by the Company of
the Transitional Services Agreement and the Regent Street Concession Agreement;
	 
	 	(e)	 	accept the resignations of the directors and secretary referred to in paragraph
1.2(f) below;
	 
	 	(f)	 	change the accounting reference date of each of the Company and the Subsidiary
to 31 December;
	 
	 	(g)	 	change the registered office of each of the Company and the Subsidiary to
St Stephens House, Arthur Road, Windsor, Berkshire SL4 1RU.

	1.2	 	Delivery by the Vendor

At Completion the Vendor shall deliver to the Purchaser:

	 	(a)	 	the Disclosure Letter duly executed by the Vendor;
	 
	 	(b)	 	the Tax Deed duly executed by the Vendor;
	 
	 	(c)	 	minutes, certified as true by the secretary of each of the Company and the
Subsidiary, of the board meetings referred to in paragraph 1.1 above;
	 
	 	(d)	 	duly executed transfers of the Shares in favour of the Purchaser or its
nominees together with the relevant share certificates;
	 
	 	(e)	 	any power of attorney or other authority under which any transfer referred to
above has been executed in each case duly stamped and executed;
	 
	 	(f)	 	a letter in the agreed form executed as a deed from each of Alasdair Dunn,
Nicholas Mather, and Katherine Anne Osborne resigning their respective offices with the
Company and the Subsidiary (as appropriate) with effect from the closing of the board
meeting referred to in paragraph 1.1, in each case stating that the person concerned
has no claim against the Company or the Subsidiary (as appropriate) for breach of
contract, compensation for loss of office, redundancy or on any other account
whatsoever;
	 
	 	(g)	 	the statutory books and registers up to date immediately prior to Completion,
certificate(s) of incorporation and of incorporation on change of name and the common
seal of each of the Company and the Subsidiary;

page 58

 

 

	 	(h)	 	the Regent Street Concession Agreement duly executed by the Vendor and the
Company;
	 
	 	(i)	 	the Property Documents;
	 
	 	(j)	 	an undertaking from the Vendor’s Solicitors to the Purchaser to deliver
executed discharges in a form acceptable to the Purchaser (acting reasonably) of the
Vendor Charges and the Company Charges;
	 
	 	(k)	 	save as otherwise agreed by the Purchaser, any and all books, records,
journals, ledgers, accounts, agreements and other documents (including, in the case of
any such which are kept or maintained on computer or otherwise electronically, such
printouts, disks, tapes and other copies as the Purchaser may require) of the Company
together with such information and things as the Purchaser will need to access any of
the foregoing provided that the Vendor shall be entitled for a period of 14 days
following Completion to retain such accounting records as it deems reasonably necessary
to enable it and its Accountants to prepare the Completion Accounts but only on the
basis that the Purchaser and its Accountants are promptly provided with access to all
such retained records and afforded all such reasonable assistance, including the
provision of photocopies of the relevant records, as they may reasonably request;
	 
	 	(l)	 	a copy, certified as correct by the secretary of the Vendor, of a minute of the
board of directors of the Vendor approving the transaction hereby contemplated and
authorising the signature, execution and completion (as appropriate) of this Agreement
and the documents ancillary to this Agreement;
	 
	 	(m)	 	a power of attorney in the agreed form authorising the Purchaser to exercise
all the Vendor’s rights as a shareholder of the Company until registration of the
transfer of the Shares to the Purchaser; and
	 
	 	(n)	 	the Transitional Services Agreement duly executed by the Vendor and the
Company.

	2	 	Purchaser’s obligations at Completion
	 
	2.1	 	Consideration

     The Purchaser shall pay the sum of £15,000,000 (fifteen million pounds sterling) to the
Vendor’s Solicitors Client Account by telegraphic transfer by way of the Consideration
payable on Completion pursuant to Clause 3 (and the receipt of the Vendor’s solicitors shall
be a complete discharge of the Purchaser who shall not be required to enquire as to the
distribution of that amount).

	2.2	 	Delivery by the Purchaser

     At Completion the Purchaser shall deliver to the Vendor:

	 	(a)	 	a copy, certified as correct by an authorised officer of the Purchaser, of a
resolution of the board of directors of the Purchaser approving the transaction hereby
contemplated and authorising the signature, execution and completion (as appropriate)
of this Agreement and the documents ancillary to this Agreement;
	 
	 	(b)	 	the Disclosure Letter duly executed by the Purchaser;
	 
	 	(c)	 	the Tax Deed duly executed by the Purchaser;
	 
	 	(d)	 	the Transitional Services Agreement duly executed by the Purchaser; and
	 
	 	(e)	 	the Regent Street Concession Agreement duly executed by the Purchaser.

page 59

 

 

	 	 	 	 	 	 	 
	/s/
Nick L. Mather
	 	 	 	 	 	 
	Signed by

	 	 	)	 	 	 
	for and on behalf of

	 	 	)	 	 	 
	The Hamleys Group Limited

	 	 	)	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ Maxine Clark
	 	 	 	 	 	 
	Signed by

	 	 	)	 	 	 
	for and on behalf of

	 	 	)	 	 	 
	Build-A-Bear Workshop UK

	 	 	)	 	 	 
	Holdings Limited

	 	 	)	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ Alasdair R. Dunn
	 	 	 	 	 	 
	Signed by

	 	 	)	 	 	 
	for and on behalf of

	 	 	)	 	 	 
	The Bear Factory Limited

	 	 	)	 	 	 

page 60

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