Document:

exv10w17

 

EXHIBIT 10.17

THE REGISTERED HOLDER OF THIS PURCHASE OPTION BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT
SELL, TRANSFER OR ASSIGN THIS PURCHASE OPTION EXCEPT AS HEREIN PROVIDED AND THE REGISTERED HOLDER
OF THIS PURCHASE OPTION AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS
PURCHASE OPTION FOR A PERIOD OF ONE YEAR FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE
OTHER THAN (I) DEUTSCHE BANK SECURITIES INC. (“DEUTSCHE BANK”) OR AN UNDERWRITER OR A
SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II) A BONA FIDE OFFICER OR PARTNER OF DEUTSCHE
BANK OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER.

THIS PURCHASE OPTION IS NOT EXERCISABLE PRIOR TO THE LATER OF (I) THE COMPLETION BY GRUBB & ELLIS
REALTY ADVISORS, INC. (“COMPANY”) OF AN ACQUISITION, THROUGH A PURCHASE, ASSET ACQUISITION
OR OTHER BUSINESS COMBINATION, OF ONE OR MORE COMMERCIAL REAL ESTATE PROPERTIES AND/OR ASSETS,
INCLUDING BY ACQUISITION OF AN OPERATING COMPANY (“BUSINESS COMBINATION”) AND (II)                     ,
2006. VOID AFTER 5:00 P.M. NEW YORK CITY LOCAL TIME,                     , 2010.

UNIT PURCHASE OPTION

FOR THE PURCHASE OF

1,250,000 UNITS

OF

GRUBB & ELLIS REALTY ADVISORS, INC.

1. Purchase Option.

     THIS CERTIFIES THAT, in consideration of $100.00 duly paid by or on behalf of                     
(“Holder”), as registered owner of this Purchase Option, to Grubb & Ellis Realty Advisors,
Inc. (“Company”), Holder is entitled, at any time or from time to time upon the later of
the consummation of a Business Combination or                      ___, 2006 (“Commencement Date”),
and at or before 5:00 p.m., New York City local time,                      ___, 2010 (“Expiration
Date”), but not thereafter, to subscribe for, purchase and receive, in whole or in part, up to
one million two hundred fifty thousand (1,250,000) units (“Units”) of the Company, each
Unit consisting of one share of common stock of the Company, par value $0.0001 per share
(“Common Stock”), and two warrants (“Warrant(s)”) expiring five (5) years from the
effective date (“Effective Date”) of the registration statement (“Registration
Statement”) pursuant to which Units are offered for sale to the public (“Offering”).
Each Warrant is the same as the warrants included in the Units being registered for sale to the
public by way of the Registration Statement (“Public Warrants”), except that the exercise
price of the Warrant is $6.25 per share. If the Expiration Date is a day on which banking
institutions are authorized by law to close, then this Purchase Option may be exercised on the next
succeeding day which is not such a day in

 

 

accordance with the terms herein. During the period ending on the Expiration Date, the Company
agrees not to take any action that would terminate the Purchase Option. This Purchase Option is
initially exercisable at $6.60 per Unit so purchased; provided, however, that upon the occurrence
of any of the events specified in Section 6 hereof, the rights granted by this Purchase Option,
including the exercise price per Unit and the number of Units (and shares of Common Stock and
Warrants) to be received upon such exercise, shall be adjusted as therein specified. The term
“Exercise Price” shall mean the initial exercise price or the adjusted exercise price, depending on
the context.

2. Exercise.

     2.1 Exercise Form. In order to exercise this Purchase Option, the exercise form
attached hereto must be duly executed and completed and delivered to the Company, together with
this Purchase Option and payment of the Exercise Price for the Units being purchased payable in
cash or by certified check or official bank check. If the subscription rights represented hereby
shall not be exercised at or before 5:00 p.m., New York City local time, on the Expiration Date
this Purchase Option shall become and be void without further force or effect, and all rights
represented hereby shall cease and expire.

     2.2 Cashless Exercise.

          2.2.1 Determination of Amount.

In lieu of the payment of the Exercise Price multiplied by the number of Units for which this
Purchase Option is exercisable (and in lieu of being entitled to receive Common Stock and Warrants)
in the manner required by Section 2.1, the Holder shall have the right (but not the obligation) to
convert any exercisable but unexercised portion of this Purchase Option into Units (“Conversion
Right”) as follows: upon exercise of the Conversion Right, the Company shall deliver to the
Holder (without payment by the Holder of any of the Exercise Price in cash) that number of Units
(or that number of shares of Common Stock and Warrants comprising that number of Units) equal to
the quotient obtained by dividing (x) the Value (as defined below) of the portion of the Purchase
Option being converted by (y) the Current Market Value (as defined below). The “Value” of the
portion of the Purchase Option being converted shall equal the remainder derived from subtracting
(a) (i) the Exercise Price multiplied by (ii) the number of Units underlying the portion of this
Purchase Option being converted from (b) the Current Market Value of a Unit multiplied by the
number of Units underlying the portion of the Purchase Option being converted. As used herein, the
term “Current Market Value” per Unit at any date means: (A) in the event that neither the Units nor
Public Warrants are still trading, the remainder derived from subtracting (x) the exercise price of
the Warrants multiplied by the number of shares of Common Stock issuable upon exercise of the
Warrants underlying one Unit from (y) (i) the Current Market Price of the Common Stock multiplied
by (ii) the number of shares of Common Stock underlying one Unit, which shall include the shares of
Common Stock underlying the Warrants included in such Unit; (B) in the event that the Units, Common
Stock and Public Warrants are still trading, (i) if the Units are listed on a national securities
exchange or quoted on the Nasdaq National Market, Nasdaq SmallCap Market or NASD OTC Bulletin Board
(or successor exchange), the last sale price of the Units in the principal trading market for the
Units as reported by the exchange, Nasdaq or the NASD, as the case may be, on the last

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trading day preceding the date in question; or (ii) if the Units are not listed on a national
securities exchange or quoted on the Nasdaq National Market, Nasdaq SmallCap Market or the NASD OTC
Bulletin Board (or successor exchange), but is traded in the residual over-the-counter market, the
closing bid price for Units on the last trading day preceding the date in question for which such
quotations are reported by the Pink Sheets, LLC or similar publisher of such quotations; and (C) in
the event that the Units are not still trading but the Common Stock and Public Warrants underlying
the Units are still trading, the Current Market Price of the Common Stock plus the product of (x)
the Current Market Price of the Public Warrants and (y) the number of shares of Common Stock
underlying the Warrants included in one Unit. The “Current Market Price” shall mean (i) if the
Common Stock (or Public Warrants, as the case may be) is listed on a national securities exchange
or quoted on the Nasdaq National Market, Nasdaq SmallCap Market or NASD OTC Bulletin Board (or
successor exchange), the last sale price of the Common Stock (or Public Warrants) in the principal
trading market for the Common Stock as reported by the exchange, Nasdaq or the NASD, as the case
may be, on the last trading day preceding the date in question; (ii) if the Common Stock (or Public
Warrants, as the case may be) is not listed on a national securities exchange or quoted on the
Nasdaq National Market, Nasdaq SmallCap Market or the NASD OTC Bulletin Board (or successor
exchange), but is traded in the residual over-the-counter market, the closing bid price for the
Common Stock (or Public Warrants) on the last trading day preceding the date in question for which
such quotations are reported by the Pink Sheets, LLC or similar publisher of such quotations; and
(iii) if the fair market value of the Common Stock cannot be determined pursuant to clause (i) or
(ii) above, such price as the Board of Directors of the Company shall determine, in good faith. In
the event the Public Warrants have expired and are no longer exercisable, no “Value” shall be
attributed to the Warrants underlying this Purchase Option. Additionally, in the event that this
Purchase Option is exercised pursuant to this Section 2.2 and the Public Warrants are still
trading, the “Value” shall be reduced by the difference between the Warrant Exercise Price and the
exercise price of the Public Warrants multiplied by the number of Warrants underlying the Units
included in the portion of this Purchase Option being converted.

          2.2.2. Mechanics of Cashless Exercise. The cashless exercise right described in this
Section 2.2 (the “Cashless Exercise Right”) may be exercised by the Holder on any business day on
or after the Commencement Date and not later than the Expiration Date by delivering the Purchase
Option with the duly executed exercise form attached hereto with the cashless exercise section
completed to the Company, exercising the Cashless Exercise Right and specifying the total number of
Units the Holder will purchase pursuant to such Cashless Exercise Right.

3. Transfer.

     3.1 General Restrictions. The registered Holder of this Purchase Option, by its
acceptance hereof, agrees that it will not sell, transfer, assign, pledge or hypothecate this
Purchase Option for a period of one year following the Effective Date to anyone other than (i)
Deutsche Bank or an underwriter or a selected dealer in connection with the Offering, or (ii) a
bona fide officer or partner of Deutsche Bank or of any such underwriter or selected dealer. On and
after the first anniversary of the Effective Date, transfers to others may be made subject to
compliance with or exemptions from applicable securities laws. In order to make any permitted
assignment, the Holder must deliver to the Company the assignment form attached hereto duly
executed and completed, together with the Purchase Option and payment of all transfer taxes, if

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any, payable in connection therewith. The Company shall within five business days transfer
this Purchase Option on the books of the Company and shall execute and deliver a new Purchase
Option or Purchase Options of like tenor to the appropriate assignee(s) expressly evidencing the
right to purchase the aggregate number of Units purchasable hereunder or such portion of such
number as shall be contemplated by any such assignment.

     3.2 Restrictions Imposed by the Act. The securities evidenced by this Purchase Option
shall not be transferred unless and until (i) the Company has received the opinion of counsel for
the Holder that the securities may be transferred pursuant to an exemption from registration under
the Securities Act of 1933, as amended (“Act”) and applicable state securities laws, the
availability of which is established to the reasonable satisfaction of the Company (the Company
hereby agreeing that the opinion of Zukerman Gore & Brandeis, LLP shall be deemed satisfactory
evidence of the availability of an exemption), or (ii) a registration statement or a post-effective
amendment to the Registration Statement relating to such securities has been filed by the Company
and declared effective by the Securities and Exchange Commission (the “Commission”) and
compliance with applicable state securities law has been established.

4. New Purchase Options to be Issued.

     4.1 Partial Exercise or Transfer. Subject to the restrictions in Section 3 hereof,
this Purchase Option may be exercised or assigned in whole or in part. In the event of the
exercise or assignment hereof in part only, upon surrender of this Purchase Option for
cancellation, together with the duly executed exercise or assignment form and funds sufficient to
pay any Exercise Price and/or transfer tax, the Company shall cause to be delivered to the Holder
without charge a new Purchase Option of like tenor to this Purchase Option in the name of the
Holder evidencing the right of the Holder to purchase the number of Units purchasable hereunder as
to which this Purchase Option has not been exercised or assigned.

     4.2 Lost Certificate. Upon receipt by the Company of evidence satisfactory to it of
the loss, theft, destruction or mutilation of this Purchase Option and of reasonably satisfactory
indemnification or the posting of a bond, the Company shall execute and deliver a new Purchase
Option of like tenor and date. Any such new Purchase Option executed and delivered as a result of
such loss, theft, mutilation or destruction shall constitute a substitute contractual obligation on
the part of the Company.

5. Registration Rights.

     5.1 Demand Registration.

          5.1.1 Grant of Right. The Company, upon written demand (“Initial Demand
Notice”) of the Holder(s) of at least 51% of the Purchase Options and/or the underlying Units
and/or the underlying securities (“Majority Holders”), agrees to register (the “Demand
Registration”) under the Act on one occasion, all of the Purchase Options requested by the
Majority Holders in the Initial Demand Notice and all of the securities underlying such Purchase
Options, including the Units, Common Stock, the Warrants and the Common Stock underlying the
Warrants (collectively, the “Registrable Securities”). On such occasion, the Company will
file a registration statement for use in an offering of the Registrable Securities from
time-to-time

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or a post-effective amendment to the Registration Statement covering all of the Registrable
Securities that will permit an offering of the Registrable Securities from time-to-time within
sixty days after receipt of the Initial Demand Notice and use its best efforts to have such
registration statement or post-effective amendment declared effective as soon as possible
thereafter. The demand for registration may be made at any time during a period of five years
beginning on the Effective Date. The Initial Demand Notice shall specify the intended method(s) of
distribution of the Registrable Securities. The Company will notify all holders of the Purchase
Options and/or Registrable Securities of the demand within ten days from the date of the receipt of
any such Initial Demand Notice. Each holder of Registrable Securities who wishes to include all or
a portion of such holder’s Registrable Securities in the Demand Registration (each such holder
including shares of Registrable Securities in such registration, a “Demanding Holder”)
shall so notify the Company within fifteen (15) days after the receipt by the holder of the notice
from the Company. Upon any such request, the Demanding Holders shall be entitled to have their
Registrable Securities included in the Demand Registration, subject to Section 5.1.4.

          5.1.2 Effective Registration. A registration will not count as a Demand Registration
until the registration statement filed with the Commission with respect to such Demand Registration
has been declared effective and the Company has complied with all of its obligations under this
Agreement with respect thereto; provided, however, that if, after such registration statement has
been declared effective, the offering of Registrable Securities pursuant to a Demand Registration
is interfered with by any stop order or injunction of the Commission or any other governmental
agency or court, the registration statement with respect to such Demand Registration will be deemed
not to have been declared effective, unless and until, (i) such stop order or injunction is
removed, rescinded or otherwise terminated, and (ii) a majority-in-interest of the Demanding
Holders thereafter elect to continue the offering.

          5.1.3 Underwritten Offering. If the Majority Holders so elect and such holders so
advise the Company as part of the Initial Demand Notice, the offering of all or any portion of the
Registrable Securities pursuant to such Demand Registration shall be in the form of one
underwritten offering. All Demanding Holders proposing to distribute their securities through such
underwriting shall enter into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the Majority Holders.

          5.1.4 Reduction of Offering. If the managing underwriter or underwriters for a Demand
Registration that is to be an underwritten offering advises the Company and the Demanding Holders
in writing that the dollar amount or number of shares of Registrable Securities which the Demanding
Holders desire to sell pursuant to the underwritten offering, taken together with all other shares
of Common Stock or other securities which the Company desires to sell and the shares of Common
Stock, if any, as to which registration has been requested pursuant to written contractual
piggy-back registration rights held by other stockholders of the Company who desire to sell,
exceeds the maximum dollar amount or maximum number of shares that can be sold in such offering
without adversely affecting the proposed offering price, the timing, the distribution method, or
the probability of success of such offering (such maximum dollar amount or maximum number of
shares, as applicable, the “Maximum Number of Shares”), then the Company shall include in
such registration: (i) first, the Registrable Securities as to which Demand Registration has been
requested by the

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Demanding Holders that want to participate in such underwritten offering (pro rata in
accordance with the number of shares that each such Person has requested be included in such
registration, regardless of the number of shares held by each such Person (such proportion is
referred to herein as “Pro Rata”)) that can be sold without exceeding the Maximum Number of
Shares; (ii) second, to the extent that the Maximum Number of Shares has not been reached under the
foregoing clause (i), the shares of Common Stock or other securities that the Company desires to
sell that can be sold without exceeding the Maximum Number of Shares; (iii) third, to the extent
that the Maximum Number of Shares has not been reached under the foregoing clauses (i) and (ii),
the shares of Common Stock or other securities registrable pursuant to the terms of the
Registration Rights Agreement between the Company and the initial investors in the Company, dated
as of                      ___, 2005 (the “Registration Rights Agreement” and such registrable
securities, the “Investor Securities”) as to which “piggy-back” registration has been
requested by the holders thereof, Pro Rata, that can be sold without exceeding the Maximum Number
of Shares; and (iv) fourth, to the extent that the Maximum Number of Shares have not been reached
under the foregoing clauses (i), (ii), and (iii), the shares of Common Stock or other securities
for the account of other persons that the Company is obligated to register pursuant to written
contractual arrangements with such persons and that can be sold without exceeding the Maximum
Number of Shares.

          5.1.5 Withdrawal. If a majority-in-interest of the Demanding Holders disapprove of the
terms of any underwriting or are not entitled to include all of their Registrable Securities in any
offering, such majority-in-interest of the Demanding Holders may elect to withdraw from such
offering by giving written notice to the Company and the underwriter or underwriters of their
request to withdraw prior to the effectiveness of the registration statement filed with the
Commission with respect to such Demand Registration.

          5.1.6 Terms. The Company shall bear all fees and expenses attendant to registering the
Registrable Securities, including the expenses of any legal counsel selected by the Holders to
represent them in connection with the sale of the Registrable Securities, but the Holders shall pay
any and all underwriting commissions. The Company agrees to use its reasonable best efforts to
qualify or register the Registrable Securities in such states as are reasonably requested by the
Majority Holder(s); provided, however, that in no event shall the Company be required to register
the Registrable Securities in a state in which such registration would cause (i) the Company to be
obligated to qualify to do business in such state, or would subject the Company to taxation as a
foreign corporation doing business in such jurisdiction or (ii) the principal stockholders of the
Company to be obligated to escrow their shares of capital stock of the Company. The Company shall
cause any registration statement or post-effective amendment filed pursuant to the demand rights
granted under Section 5.1.1 to remain effective until the expiration of the Warrants in accordance
with the terms and conditions of that certain Warrant Agreement, dated as of                     , 2005,
between the Company and Continental Stock Transfer & Trust Company.

     5.2 Piggy-Back Registration.

          5.2.1 Piggy-Back Rights. If at any time during the seven year period commencing on the
Effective Date the Company proposes to file a registration statement under the Act with respect to
an offering of equity securities, or securities or other obligations

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exercisable or exchangeable for, or convertible into, equity securities, by the Company for
its own account or for stockholders of the Company for their account (or by the Company and by
stockholders of the Company including, without limitation, pursuant to Section 5.1), other than a
registration statement (i) filed in connection with any employee stock option or other benefit
plan, (ii) for an exchange offer or offering of securities solely to the Company’s existing
stockholders, (iii) for an offering of debt that is convertible into equity securities of the
Company or (iv) for a dividend reinvestment plan, then the Company shall (x) give written notice of
such proposed filing to the holders of Registrable Securities as soon as practicable but in no
event less than ten (10) days before the anticipated filing date, which notice shall describe the
amount and type of securities to be included in such offering, the intended method(s) of
distribution, and the name of the proposed managing underwriter or underwriters, if any, of the
offering, and (y) offer to the holders of Registrable Securities in such notice the opportunity to
register the sale of such number of shares of Registrable Securities as such holders may request in
writing within five (5) days following receipt of such notice (a “Piggy-Back
Registration”). The Company shall cause such Registrable Securities to be included in such
registration and shall use its best efforts to cause the managing underwriter or underwriters of a
proposed underwritten offering to permit the Registrable Securities requested to be included in a
Piggy-Back Registration on the same terms and conditions as any similar securities of the Company
and to permit the sale or other disposition of such Registrable Securities in accordance with the
intended method(s) of distribution thereof. All holders of Registrable Securities proposing to
distribute their securities through a Piggy-Back Registration that involves an underwriter or
underwriters shall enter into an underwriting agreement in customary form with the underwriter or
underwriters selected for such Piggy-Back Registration.

          5.2.2 Reduction of Offering. If the managing underwriter or underwriters for a
Piggy-Back Registration that is to be an underwritten offering advises the Company and the holders
of Registrable Securities in writing that the dollar amount or number of shares of Common Stock
which the Company desires to sell, taken together with shares of Common Stock, if any, as to which
registration has been demanded pursuant to written contractual arrangements with persons other than
the holders of Registrable Securities hereunder, the Registrable Securities as to which
registration has been requested under this Section 5.2, and the shares of Common Stock, if any, as
to which registration has been requested pursuant to the written contractual piggy-back
registration rights of other stockholders of the Company, exceeds the Maximum Number of Shares,
then the Company shall include in any such registration:

               (a) If the registration is undertaken for the Company’s account: (A) first, the shares of
Common Stock or other securities that the Company desires to sell that can be sold without
exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum Number of Shares
has not been reached under the foregoing clause (A), the shares of Common Stock or other
securities, if any, comprised of Registrable Securities and Investor Securities, as to which
registration has been requested pursuant to the applicable written contractual piggy-back
registration rights of such security holders, Pro Rata, that can be sold without exceeding the
Maximum Number of Shares; and (C) third, to the extent that the Maximum Number of shares has not
been reached under the foregoing clauses (A) and (B), the shares of Common Stock or other
securities for the account of other persons that the Company is obligated to register pursuant to
written contractual piggy-back registration rights with such persons and that can be sold without
exceeding the Maximum Number of Shares;

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               (b) If the registration is a “demand” registration undertaken at the demand of holders of
Investor Securities, (A) first, the shares of Common Stock or other securities for the account of
the demanding persons, Pro Rata, that can be sold without exceeding the Maximum Number of Shares;
(B) second, to the extent that the Maximum Number of Shares has not been reached under the
foregoing clause (A), the shares of Common Stock or other securities that the Company desires to
sell that can be sold without exceeding the Maximum Number of Shares; (C) third, to the extent that
the Maximum Number of Shares has not been reached under the foregoing clauses (A) and (B), the
shares of Registrable Securities, Pro Rata, as to which registration has been requested pursuant to
the terms hereof, that can be sold without exceeding the Maximum Number of Shares; and (D) fourth,
to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses
(A), (B) and (C), the shares of Common Stock or other securities for the account of other persons
that the Company is obligated to register pursuant to written contractual arrangements with such
persons, that can be sold without exceeding the Maximum Number of Shares; and

               (c) If the registration is a “demand” registration undertaken at the demand of persons other
than either the holders of Registrable Securities or of Investor Securities, (A) first, the shares
of Common Stock or other securities for the account of the demanding persons that can be sold
without exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum Number
of Shares has not been reached under the foregoing clause (A), the shares of Common Stock or other
securities that the Company desires to sell that can be sold without exceeding the Maximum Number
of Shares; (C) third, to the extent that the Maximum Number of Shares has not been reached under
the foregoing clauses (A) and (B), collectively the shares of Common Stock or other securities
comprised of Registrable Securities and Investor Securities, Pro Rata, as to which registration has
been requested pursuant to the terms hereof and of the Registration Rights Agreement, as
applicable, that can be sold without exceeding the Maximum Number of Shares; and (D) fourth, to the
extent that the Maximum Number of Shares has not been reached under the foregoing clauses (A), (B)
and (C), the shares of Common Stock or other securities for the account of other persons that the
Company is obligated to register pursuant to written contractual arrangements with such persons,
that can be sold without exceeding the Maximum Number of Shares.

          5.2.3 Withdrawal. Any holder of Registrable Securities may elect to withdraw such
holder’s request for inclusion of Registrable Securities in any Piggy-Back Registration by giving
written notice to the Company of such request to withdraw prior to the effectiveness of the
registration statement. The Company (whether on its own determination or as the result of a
withdrawal by persons making a demand pursuant to written contractual obligations) may withdraw a
registration statement at any time prior to the effectiveness of the registration statement.
Notwithstanding any such withdrawal, the Company shall pay all expenses incurred by the holders of
Registrable Securities in connection with such Piggy-Back Registration as provided in Section
5.2.4.

          5.2.4 Terms. The Company shall bear all fees and expenses attendant to registering the
Registrable Securities, including the expenses of any legal counsel selected by the Holders to
represent them in connection with the sale of the Registrable Securities but the Holders shall pay
any and all underwriting commissions related to the Registrable Securities. In the event of such a
proposed registration, the Company shall furnish the then Holders of

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outstanding Registrable Securities with not less than fifteen days written notice prior to the
proposed date of filing of such registration statement. Such notice to the Holders shall continue
to be given for each applicable registration statement filed (during the period in which the
Purchase Option is exercisable) by the Company until such time as all of the Registrable Securities
have been registered and sold. The Holders of the Registrable Securities shall exercise the
“piggy-back” rights provided for herein by giving written notice, within ten days of the receipt of
the Company’s notice of its intention to file a registration statement. The Company shall cause any
registration statement filed pursuant to the above “piggyback” rights to remain effective for at
least nine months from the date that the Holders of the Registrable Securities are first given the
opportunity to sell all of such securities.

     5.3 General Terms.

          5.3.1 Indemnification. The Company shall indemnify the Holder(s) of the Registrable
Securities to be sold pursuant to any registration statement hereunder and each person, if any, who
controls such Holders within the meaning of Section 15 of the Act or Section 20(a) of the
Securities Exchange Act of 1934, as amended (“Exchange Act”), against all loss, claim,
damage, expense or liability (including all reasonable attorneys’ fees and other expenses
reasonably incurred in investigating, preparing or defending against litigation, commenced or
threatened, or any claim whatsoever whether arising out of any action between the underwriter and
the Company or between the underwriter and any third party or otherwise) to which any of them may
become subject under the Act, the Exchange Act or otherwise, arising from such registration
statement but only to the same extent and with the same effect as the provisions pursuant to which
the Company has agreed to indemnify the underwriters contained in Section [8] of the Underwriting
Agreement between the Company, Deutsche Bank and the other underwriters named therein dated the
Effective Date. The Holder(s) of the Registrable Securities to be sold pursuant to such
registration statement, and their successors and assigns, shall severally, and not jointly,
indemnify the Company, its officers and directors and each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, against all loss,
claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses
reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which
they may become subject under the Act, the Exchange Act or otherwise, arising from information
furnished by or on behalf of such Holders, or their successors or assigns, in writing, for specific
inclusion in such registration statement to the same extent and with the same effect as the
provisions contained in Section 5 of the Underwriting Agreement pursuant to which the underwriters
have agreed to indemnify the Company.

          5.3.2 Exercise of Purchase Options. Nothing contained in this Purchase Option shall be
construed as requiring the Holder(s) to exercise their Purchase Options or Warrants underlying such
Purchase Options prior to or after the initial filing of any registration statement or the
effectiveness thereof.

          5.3.3 Documents Delivered to Holders. The Company shall furnish to the Holders
participating in any of the foregoing offerings, a signed counterpart, addressed to the
participating Holders, of (i) an opinion of counsel to the Company, dated the effective date of
such registration statement (and, if such registration includes an underwritten public offering, an
opinion dated the date of the closing under any underwriting agreement related thereto), and (ii)

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a “cold comfort” letter dated the effective date of such registration statement (and, if such
registration includes an underwritten public offering, a letter dated the date of the closing under
the underwriting agreement) signed by the independent public accountants who have issued a report
on the Company’s financial statements included in such registration statement, in each case
covering substantially the same matters with respect to such registration statement (and the
prospectus included therein) and, in the case of such accountants’ letter, with respect to events
subsequent to the date of such financial statements, as are customarily covered in opinions of
issuer’s counsel and in accountants’ letters delivered to underwriters in underwritten public
offerings of securities. The Company shall also deliver promptly to the Holders participating in
the offering, the correspondence and memoranda described below and copies of all correspondence
between the Commission and the Company, its counsel or auditors and all memoranda relating to
discussions with the Commission or its staff with respect to the registration statement and permit
the Holders, to do such investigation, upon reasonable advance notice, with respect to information
contained in or omitted from the registration statement as it deems reasonably necessary to comply
with applicable securities laws or rules of the National Association of Securities Dealers, Inc.
(“NASD”). Such investigation shall include access to books, records and properties and
opportunities to discuss the business of the Company with its officers and independent auditors,
all to such reasonable extent and at such reasonable times and as often as the Holders shall
reasonably request. The Company shall not be required to disclose any confidential information or
other records to the Holders, or to any other person, until and unless such persons shall have
entered into reasonable confidentiality agreements (in form and substance reasonably satisfactory
to the Company), with the Company with respect thereto.

          5.3.4 Underwriting Agreement. The Company shall enter into an underwriting agreement
with the managing underwriter(s), if any, selected by any Holders whose Registrable Securities are
being registered pursuant to this Section 5, which managing underwriter shall be reasonably
acceptable to the Company. Such agreement shall be reasonably satisfactory in form and substance to
the Company, each Holder and such managing underwriters, and shall contain such representations,
warranties and covenants by the Company and such other terms as are customarily contained in
agreements of that type used by the managing underwriter. The Holders shall be parties to any
underwriting agreement relating to an underwritten sale of their Registrable Securities and may, at
their option, require that any or all the representations, warranties and covenants of the Company
to or for the benefit of such underwriters shall also be made to and for the benefit of such
Holders. Such Holders shall not be required to make any representations or warranties to or
agreements with the Company or the underwriters except as they may relate to such Holders and their
intended methods of distribution. Such Holders, however, shall agree to such covenants and
indemnification and contribution obligations for selling stockholders as are customarily contained
in agreements of that type used by the managing underwriter. Further, such Holders shall execute
appropriate custody agreements and otherwise cooperate fully in the preparation of the registration
statement and other documents relating to any offering in which they include securities pursuant to
this Section 5. Each Holder shall also furnish to the Company such information regarding itself,
the Registrable Securities held by it, and the intended method of disposition of such securities as
shall be reasonably required to effect the registration of the Registrable Securities.

          5.3.5 Rule 144 Sale. Notwithstanding anything contained in this Section 5 to the
contrary, the Company shall have no obligation pursuant to Sections 5.1 or 5.2 for the

10

 

registration of Registrable Securities held by any Holder (i) where such Holder would then be
entitled to sell under Rule 144 within any three-month period (or such other period prescribed
under Rule 144 as may be provided by amendment thereof) all of the Registrable Securities then held
by such Holder, and (ii) where the number of Registrable Securities held by such Holder is within
the volume limitations under paragraph (e) of Rule 144 (calculated as if such Holder were an
affiliate within the meaning of Rule 144).

          5.3.6 Supplemental Prospectus. Each Holder agrees, that upon receipt of any notice
from the Company of the happening of any event as a result of which the prospectus included in the
registration statement, as then in effect, includes an untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing, such Holder will immediately
discontinue disposition of Registrable Securities pursuant to the registration statement covering
such Registrable Securities until such Holder’s receipt of the copies of a supplemental or amended
prospectus, and, if so desired by the Company, such Holder shall deliver to the Company (at the
expense of the Company) or destroy (and deliver to the Company a certificate of such destruction)
all copies, other than permanent file copies then in such Holder’s possession, of the prospectus
covering such Registrable Securities current at the time of receipt of such notice.

6. Adjustments.

     6.1 Adjustments to Exercise Price and Number of Securities. The Exercise Price and the
number of Units underlying the Purchase Option shall be subject to adjustment from time to time as
hereinafter set forth:

          6.1.1 Stock Dividends — Split-Ups. If after the date hereof, and subject to the
provisions of Section 6.3 below, the number of outstanding shares of Common Stock is increased by a
stock dividend payable in shares of Common Stock or by a split-up of shares of Common Stock or
other similar event, then, on the effective date thereof, the number of shares of Common Stock
underlying each of the Units purchasable hereunder shall be increased in proportion to such
increase in outstanding shares. In such case, the number of shares of Common Stock, and the
exercise price applicable thereto, underlying the Warrants underlying each of the Units purchasable
hereunder shall be adjusted in accordance with the terms of the Warrants. For example, if the
Company declares a two-for-one stock dividend and at the time of such dividend this Purchase Option
is for the purchase of one Unit at $6.60 per whole Unit (each Warrant underlying the Units is
exercisable for $6.25 per share), upon effectiveness of the dividend, this Purchase Option will be
adjusted to allow for the purchase of one Unit at $6.60 per Unit, each Unit entitling the holder to
receive two shares of Common Stock and four Warrants (each Warrant exercisable for $3.13 per
share).

          6.1.2 Aggregation of Shares. If after the date hereof, and subject to the provisions
of Section 6.3, the number of outstanding shares of Common Stock is decreased by a consolidation,
combination or reclassification of shares of Common Stock or other similar event, then, on the
effective date thereof, the number of shares of Common Stock underlying each of the Units
purchasable hereunder shall be decreased in proportion to such decrease in outstanding shares. In
such case, the number of shares of Common Stock, and the exercise price applicable

11

 

thereto, underlying the Warrants underlying each of the Units purchasable hereunder shall be
adjusted in accordance with the terms of the Warrants.

          6.1.3 Replacement of Securities upon Reorganization, etc. In case of any
reclassification or reorganization of the outstanding shares of Common Stock other than a change
covered by Section 6.1.1 or 6.1.2 hereof or that solely affects the par value of such shares of
Common Stock, or in the case of any merger or consolidation of the Company with or into another
corporation (other than a consolidation or merger in which the Company is the continuing
corporation and that does not result in any reclassification or reorganization of the outstanding
shares of Common Stock), or in the case of any sale or conveyance to another corporation or entity
of the property of the Company as an entirety or substantially as an entirety in connection with
which the Company is dissolved, the Holder of this Purchase Option shall have the right thereafter
(until the expiration of the right of exercise of this Purchase Option) to receive upon the
exercise hereof, for the same aggregate Exercise Price payable hereunder immediately prior to such
event, the kind and amount of shares of stock or other securities or property (including cash)
receivable upon such reclassification, reorganization, merger or consolidation, or upon a
dissolution following any such sale or transfer, by a Holder of the number of shares of Common
Stock of the Company obtainable upon exercise of this Purchase Option and the underlying Warrants
immediately prior to such event; and if any reclassification also results in a change in shares of
Common Stock covered by Section 6.1.1 or 6.1.2, then such adjustment shall be made pursuant to
Sections 6.1.1, 6.1.2 and this Section 6.1.3. The provisions of this Section 6.1.3 shall similarly
apply to successive reclassifications, reorganizations, mergers or consolidations, sales or other
transfers.

          6.1.4 Changes in Form of Purchase Option. This form of Purchase Option need not be
changed because of any change pursuant to this Section, and Purchase Options issued after such
change may state the same Exercise Price and the same number of Units as are stated in the Purchase
Options initially issued pursuant to this Agreement. The acceptance by any Holder of the issuance
of new Purchase Options reflecting a required or permissive change shall not be deemed to waive any
rights to an adjustment occurring after the Commencement Date or the computation thereof.

     6.2 Substitute Purchase Option. In case of any consolidation of the Company with, or
merger of the Company with, or merger of the Company into, another corporation (other than a
consolidation or merger which does not result in any reclassification or change of the outstanding
Common Stock), the corporation formed by such consolidation or merger shall execute and deliver to
the Holder a supplemental Purchase Option providing that the holder of each Purchase Option then
outstanding or to be outstanding shall have the right thereafter (until the stated expiration of
such Purchase Option) to receive, upon exercise of such Purchase Option, the kind and amount of
shares of stock and other securities and property receivable upon such consolidation or merger, by
a holder of the number of shares of Common Stock of the Company for which such Purchase Option
might have been exercised immediately prior to such consolidation, merger, sale or transfer. Such
supplemental Purchase Option shall provide for adjustments which shall be identical to the
adjustments provided in Section 6. The above provision of this Section shall similarly apply to
successive consolidations or mergers.

12

 

     6.3 Elimination of Fractional Interests. The Company shall not be required to issue
certificates representing fractions of shares of Common Stock or Warrants upon the exercise of the
Purchase Option, nor shall it be required to issue scrip or pay cash in lieu of any fractional
interests, it being the intent of the parties that all fractional interests shall be eliminated by
rounding any fraction up to the nearest whole number of Warrants, shares of Common Stock or other
securities, properties or rights.

7. Reservation and Listing. The Company shall at all times reserve and keep available out of its
authorized shares of Common Stock, solely for the purpose of issuance upon exercise of the Purchase
Options or the Warrants underlying the Purchase Option, such number of shares of Common Stock or
other securities, properties or rights as shall be issuable upon the exercise thereof. The Company
covenants and agrees that, upon exercise of the Purchase Options and payment of the Exercise Price
therefor, all shares of Common Stock and other securities issuable upon such exercise shall be duly
and validly issued, fully paid and non-assessable and not subject to preemptive rights of any
stockholder. The Company further covenants and agrees that upon exercise of the Warrants underlying
the Purchase Options and payment of the respective Warrant exercise price therefor, all shares of
Common Stock and other securities issuable upon such exercise shall be duly and validly issued,
fully paid and non-assessable and not subject to preemptive rights of any stockholder. As long as
the Purchase Options shall be outstanding, the Company shall use its best efforts to cause all (i)
Units and shares of Common Stock issuable upon exercise of the Purchase Options, (iii) Warrants
issuable upon exercise of the Purchase Options and (iv) shares of Common Stock issuable upon
exercise of the Warrants included in the Units issuable upon exercise of the Purchase Option to be
listed (subject to official notice of issuance) on all securities exchanges (or, if applicable on
the Nasdaq National Market, SmallCap Market, OTC Bulletin Board or any successor trading market) on
which the Units, the Common Stock or the Public Warrants issued to the public in connection
herewith may then be listed and/or quoted.

8. Certain Notice Requirements.

     8.1 Holder’s Right to Receive Notice. Nothing herein shall be construed as conferring
upon the Holders the right to vote or consent as a stockholder for the election of directors or any
other matter, or as having any rights whatsoever as a stockholder of the Company. If, however, at
any time prior to the expiration of the Purchase Options and their exercise, any of the events
described in Section 8.2 shall occur, then, in one or more of said events, the Company shall give
written notice of such event at least fifteen days prior to the date fixed as a record date or the
date of closing the transfer books for the determination of the stockholders entitled to such
dividend, distribution, conversion or exchange of securities or subscription rights, or entitled to
vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify such
record date or the date of the closing of the transfer books, as the case may be. Notwithstanding
the foregoing, the Company shall deliver to each Holder a copy of each notice given to the other
stockholders of the Company at the same time and in the same manner that such notice is given to
the stockholders.

     8.2 Events Requiring Notice. The Company shall be required to give the notice
described in this Section 8 upon one or more of the following events: (i) if the Company shall take
a record of the holders of its shares of Common Stock for the purpose of entitling them to

13

 

receive a dividend or distribution payable otherwise than in cash, or a cash dividend or
distribution payable otherwise than out of retained earnings, as indicated by the accounting
treatment of such dividend or distribution on the books of the Company, or (ii) the Company shall
offer to all the holders of its Common Stock any additional shares of capital stock of the Company
or securities convertible into or exchangeable for shares of capital stock of the Company, or any
option, right or warrant to subscribe therefor, or (iii) a dissolution, liquidation or winding up
of the Company (other than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business shall be proposed.

     8.3 Notice of Change in Exercise Price. The Company shall, promptly after an event
requiring a change in the Exercise Price pursuant to Section 6 hereof, send notice to the Holders
of such event and change (“Price Notice”). The Price Notice shall describe the event
causing the change and the method of calculating same and shall be certified as being true and
accurate by the Company’s President and Chief Financial Officer.

     8.4 Transmittal of Notices. All notices, requests, consents and other communications
under this Purchase Option shall be in writing and shall be deemed to have been duly made when hand
delivered, or mailed by express mail or private courier service: (i) if to the registered Holder of
the Purchase Option, to the address of such Holder as shown on the books of the Company, or (ii) if
to the Company, to the following address or to such other address as the Company may designate by
notice to the Holders:

Grubb & Ellis Realty Advisors, Inc.

2215 Sanders Road, Suite 400

Northbrook, Illinois 60062

Attn: Chairman

9. Miscellaneous.

     9.1 Amendments. The Company may from time to time supplement or amend this Purchase
Option without the approval of any of the Holders in order to cure any ambiguity, to correct or
supplement any provision contained herein that may be defective or inconsistent with any other
provisions herein, or to make any other provisions in regard to matters or questions arising
hereunder that the Company may deem necessary or desirable and that the Company, in the exercise of
reasonable judgment, determines that it shall not adversely affect the interest of the Holders. All
other modifications or amendments shall require the written consent of and be signed by the party
against whom enforcement of the modification or amendment is sought.

     9.2 Headings. The headings contained herein are for the sole purpose of convenience of
reference, and shall not in any way limit or affect the meaning or interpretation of any of the
terms or provisions of this Purchase Option.

     9.3 Entire Agreement. This Purchase Option (together with the other agreements and
documents being delivered pursuant to or in connection with this Purchase Option) constitutes the
entire agreement of the parties hereto with respect to the subject matter hereof, and

14

 

supersedes all prior agreements and understandings of the parties, oral and written, with
respect to the subject matter hereof.

     9.4 Binding Effect. This Purchase Option shall inure solely to the benefit of and
shall be binding upon, the Holder and the Company and their permitted assignees, respective
successors, legal representative and assigns, and no other person shall have or be construed to
have any legal or equitable right, remedy or claim under or in respect of or by virtue of this
Purchase Option or any provisions herein contained.

     9.5 Governing Law; Submission to Jurisdiction. This Purchase Option shall be governed
by and construed and enforced in accordance with the laws of the State of New York, without giving
effect to conflict of laws. The Company hereby agrees that any action, proceeding or claim against
it arising out of, or relating in any way to this Purchase Option shall be brought and enforced in
the courts of the State of Illinois or of the United States of America for the Northern District of
Illinois, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The
Company hereby waives any objection to such exclusive jurisdiction and that such courts represent
an inconvenient forum. Any process or summons to be served upon the Company may be served by
transmitting a copy thereof by registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth in Section 8 hereof. Such mailing shall be deemed
personal service and shall be legal and binding upon the Company in any action, proceeding or
claim. The Company and the Holder agree that the prevailing party(ies) in any such action shall be
entitled to recover from the other party(ies) all of its reasonable attorneys’ fees and expenses
relating to such action or proceeding and/or incurred in connection with the preparation therefor.

     9.6 Waiver, Etc. The failure of the Company or the Holder to at any time enforce any
of the provisions of this Purchase Option shall not be deemed or construed to be a waiver of any
such provision, nor to in any way affect the validity of this Purchase Option or any provision
hereof or the right of the Company or any Holder to thereafter enforce each and every provision of
this Purchase Option. No waiver of any breach, non-compliance or non-fulfillment of any of the
provisions of this Purchase Option shall be effective unless set forth in a written instrument
executed by the party or parties against whom or which enforcement of such waiver is sought; and no
waiver of any such breach, non-compliance or non- fulfillment shall be construed or deemed to be a
waiver of any other or subsequent breach or non-compliance.

     9.7 Execution in Counterparts. This Purchase Option may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each of which shall be
deemed to be an original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been signed by each of the
parties hereto and delivered to each of the other parties hereto.

     9.8 Underlying Warrants. At any time after exercise by the Holder of this Purchase
Option, the Holder may exchange his Warrants (with an initial exercise price of $6.60) for Public
Warrants (with an initial exercise price of $5.00) upon payment to the Company of the difference
between the exercise price of his Warrant and the exercise price of the Public Warrants. Any such
Public Warrants and the Common Stock underlying such Public Warrants shall constitute Registrable
Securities.

15

 

     IN WITNESS WHEREOF, the Company has caused this Purchase Option to be signed by its duly
authorized officer as of the                      day of                     , 2005.

	 	 	 	 	 	 	 
	 	 	GRUBB & ELLIS REALTY ADVISORS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

16

 

Form to be used to exercise Purchase Option:

Grubb & Ellis Realty Advisors, Inc.

2215 Sanders Road, Suite 400

Northbrook, Illinois 60062

Date:                                        , 200                    

     The undersigned hereby elects irrevocably to exercise all or a portion of the within Purchase
Option and to purchase                      Units of Grubb & Ellis Realty Advisors, Inc.and hereby makes payment of
$                     (at the rate of $                     per Unit) in payment of the Exercise Price pursuant
thereto. Please issue the Common Stock and Warrants as to which this Purchase Option is exercised
in accordance with the instructions given below.

or

     The undersigned hereby elects irrevocably to convert its right to purchase                      Units
purchasable under the within Purchase Option by surrender of the unexercised portion of the
attached Purchase Option (with a “Value” based of $                     based on a “Market Price” of $                    ).
Please issue the securities comprising the Units as to which this Purchase Option is exercised in
accordance with the instructions given below.

	 	 	 
	 

	 	 
	 

	 	NOTICE: The signature to this assignment must
	 

	 	correspond with the name as written
upon the face of the purchase option in every particular, without alteration or enlargement or any change whatever.

Signature(s) Guaranteed:

      

     THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15).

17

 

INSTRUCTIONS FOR REGISTRATION OF SECURITIES

	 	 	 
	Name
	 	 
	 
	 	 
	 

	 	 
	 

	 	(Print in Block Letters)
	 
	 	 
	Address
	 	 
	 
	 	 
	 

	 	 

18

 

Form to be used to assign Purchase Option:

ASSIGNMENT

     (To be executed by the registered Holder to effect a transfer of the within Purchase Option):

     FOR VALUE RECEIVED,                                                             does
hereby sell, assign and
transfer unto                                                  the right to purchase             
         Units of
Grubb & Ellis Realty Advisors, Inc. (“Company”) evidenced by the within Purchase Option and
does hereby authorize the Company to transfer such right on the books of the Company.

Dated:                                        , 200_

	 	 	 
	 

	 	 
	 

	 	Signature
	 
	 	 
	 

	 	 
	 

	 	NOTICE: The signature to this assignment must
	 

	 	correspond with the name as written
upon the face of the purchase option in every particular, without
alteration or enlargement or any change whatever.

Signature(s) Guaranteed:

      

     THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15).

19Agrrement for Sale & Purchase of UK Theatres

 

EXHIBIT 10.1

DATED          22          November          2005

(1) JEFFREY SPECTOR AND OTHERS

 — and —

(2) CINEMASOURCE UK LIMITED

 

AGREEMENT

for the sale and purchase of

UK THEATRES ONLINE LIMITED and other Companies

100 Fetter Lane

London EC4A 1BN

Tel: 020-7242 1011      • Fax: 020-7894 6550

 

 

Beachcroft Wansbroughs

THIS AGREEMENT is made the 22nd day of November 2005

BETWEEN:

	(1)	 	THE PERSONS whose names and addresses are set out in Schedule 1 (the “Sellers”); and
	 
	(2)	 	CINEMASOURCE UK LIMITED, a company incorporated in the United Kingdom whose registered office
is at 100 Fetter Lane, London EC4A 1BN, United Kingdom (the “Buyer”).

IT IS AGREED as follows:-

	1.	 	INTERPRETATION

	 	1.1	 	In this agreement:-

	 	 	 	 	 
	 

	 	“A Shares”
	 	means the ordinary A Shares of £0.01 each in the
capital of the Company;
	 
	 	 	 	 
	 

	 	“B Shares”
	 	means the ordinary B Shares of £0.01 each in the
capital of the Company;
	 
	 	 	 	 
	 

	 	“C Shares”
	 	means the ordinary C Shares of £0.01 each in the
capital of the Company;
	 
	 	 	 	 
	 

	 	“Accounts”
	 	means the statutory accounts of the Company and,
with respect to the Tax Covenant only,
Cinemasonline Limited for the year ended on the
Balance Sheet Date;
	 
	 	 	 	 
	 

	 	“Act”
	 	means the Companies Act 1985;
	 
	 	 	 	 
	 

	 	“Balance Sheet Date”
	 	means 31 March 2005;
	 
	 	 	 	 
	 

	 	“Business Day”
	 	means a day (other than a Saturday) on which
clearing banks in the City of London are open for
the transaction of normal sterling banking
business;
	 
	 	 	 	 
	 

	 	“Buyer’s Group”
	 	means the Buyer, any subsidiary of the Buyer, any
holding company of the Buyer and any subsidiary of
any holding company of the Buyer, from time to
time;
	 
	 	 	 	 
	 

	 	“Buyer’s Solicitors”
	 	means Beachcroft Wansbroughs of 100 Fetter Lane,
London EC4A 1BN;
	 
	 	 	 	 
	 

	 	the “Cartwright Parties”
	 	means Mitchell Clifford Cartwright and any member
of his immediate family and any trust of which he
or they or any of them are beneficiaries or
potential beneficiaries and any company controlled
by any of them;
	 
	 	 	 	 
	 

	 	“Cinemasonline Purchase
Agreement”
	 	means the agreement for the sale and purchase of
Cinemasonline Limited entered into as of today’s
date between the Seller named therein and the
Buyer;
	 
	 	 	 	 
	 

	 	“Claim”
	 	means a claim by the Buyer for breach of a
Warranty under this agreement or the Cinemasonline
Purchase Agreement or the Tax covenant by the
Sellers or the Warrantors;

 

 

Beachcroft Wansbroughs

	 	 	 	 	 	 	 
	 	 	“Company”	 	means UK Theatres Online Limited (Company Number
3850910) details of which are set out in Schedule
2;
	 
	 	 	 	 	 	 
	 	 	“Completion”	 	means completion of the sale and purchase of the
Shares in accordance with this agreement;
	 
	 	 	 	 	 	 
	 	 	“Completion Date”	 	means the day after today’s date;
	 
	 	 	 	 	 	 
	 	 	“Confidential Information”	 	means all information not publicly known and which
is known to the Sellers and which is used in and
relates to the Company’s business, its customers
or financial or other affairs, including, without
limitation, information relating to:-
	 
	 	 	 	 	 	 
	 

	 	 	 	(a)
	 	the marketing of products or services
including, without limitation, customer names and
lists and other details of customers, financial
information, sales targets, sales statistics,
market share statistics, prices, market research
reports and surveys, and advertising or other
promotional materials; or
	 
	 	 	 	 	 	 
	 

	 	 	 	(b)
	 	future projects, business development or
planning, commercial relationships and
negotiations
	 
	 	 	 	 	 	 
	 	 	 	 	existing in whatever form;
	 
	 	 	 	 	 	 
	 	 	“Consideration”	 	means the consideration payable on Completion for
the purchase of the Shares as set out in Clause 3;
	 
	 	 	 	 	 	 
	 	 	“Disclosed”	 	means fairly disclosed by the Sellers or the
Warrantors, as applicable, to the Buyer in the
Disclosure Letter and Second Disclosure Letter (if
any) and Disclosure Bundle in sufficient detail to
enable the Buyer to make a reasonable assessment
of the matter disclosed;
	 
	 	 	 	 	 	 
	 	 	“Disclosure Bundle”	 	means the two identical bundles of documents the
outside covers of each of which have been signed
for identification by on or behalf of the Sellers
and the Buyer;
	 
	 	 	 	 	 	 
	 	 	“Disclosure Letter”	 	means the letter in the agreed form (together with
the Disclosure Bundle) from the Sellers to the
Buyer executed and delivered to the Buyer
immediately prior to the execution of this
agreement;
	 
	 	 	 	 	 	 
	 	 	“Encumbrance”	 	means any encumbrance or security interest of any
kind whatsoever including without limitation a
mortgage, charge, pledge, lien, hypothecation,
restriction, right to acquire, right of
pre-emption, option, conversion right, third party
right or interest, right of set-off or
counterclaim, equities, trust arrangement or any
other type of preferential agreement (such as a
retention of title arrangement) having similar
effect or any other rights exercisable by or
claims by third parties;

 

 

Beachcroft Wansbroughs

	 	 	 	 	 	 	 
	 	 	“Escrow Account”	 	A joint account to be held by the Sellers’
Solicitors and the Buyer’s Solicitors into which
the Escrow Sum will be paid by the Buyer’s
Solicitors to be held and dealt with in accordance
with the terms of the Escrow Letter;
	 
	 	 	 	 	 	 
	 	 	“Escrow Letter”	 	means a letter addressed to the Buyer and Jeffrey
Spector by the Sellers’ Solicitors and the Buyer’s
Solicitors in relation to the Escrow Account:
	 
	 	 	 	 	 	 
	 	 	“Escrow Sum”	 	means the sum of $107,314;
	 
	 	 	 	 	 	 
	 	 	“ICTA”	 	means the Income and Corporation Taxes Act 1988;
	 
	 	 	 	 	 	 
	 	 	“Indebtedness”	 	means any (in each case calculated in accordance with UK generally accepted accounting principles):
	 
	 	 	 	 	 	 
	 

	 	 	 	(a)
	 	indebtedness of the Company for borrowed
money, purchase money indebtedness (other than the
Overpayments and accounts payable in the ordinary
course including those listed as such in the
Indebtedness schedule contained at section 5.2 of
the Disclosure Letter) or capitalised lease
obligations;
	 
	 	 	 	 	 	 
	 

	 	 	 	(b)
	 	guarantees given by the Company;
	 
	 	 	 	 	 	 
	 

	 	 	 	(c)
	 	unpaid taxes that are due or payable by the
Company on or prior to Completion or accrued tax
liabilities of the Company (excluding VAT on
uncollected debtors and save as has arisen in the
ordinary course of business including without
limitation corporation tax); and
	 
	 	 	 	 	 	 
	 

	 	 	 	(d)
	 	interest expense accrued but unpaid on any of
such obligations;
	 
	 	 	 	 	 	 
	 	 	“Independent Accountant”	 	means an independent chartered accountant or an
independent firm of chartered accountants to be
agreed upon by the Sellers and the Buyer or (in
default of agreement within 10 Business Days) to
be selected at the instance of any of them by the
President for the time being of the Institute of
Chartered Accountants in England and Wales;
	 
	 	 	 	 	 	 
	 	 	“Intellectual Property”	 	means any and all:-
	 
	 	 	 	 	 	 
	 

	 	 	 	(a)
	 	patents, trade marks, service marks, domain
names, registered designs, utility models,
applications for and the right to make
applications for any of such rights, inventions,
Know-How, Confidential Information, unregistered
trade marks and service marks, trade and business
names, copyrights, (including rights in computer
software and in websites) unregistered design
rights and other rights in designs and rights in
databases;
	 
	 	 	 	 	 	 
	 

	 	 	 	(b)
	 	rights under licences, consents, orders,
statutes or otherwise in respect of any rights of

 

 

Beachcroft Wansbroughs

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	the nature specified in paragraph (a) and above;
and
	 
	 	 	 	 	 	 
	 

	 	 	 	(c)
	 	rights of the same or similar effect or nature
as or to those in paragraphs (b) and (c) above
	 
	 	 	 	 	 	 
	 	 	 	 	in each case in any jurisdiction;
	 
	 	 	 	 	 	 
	 	 	“Intellectual Property
Rights”	 	means all Intellectual Property used, or required
to be used, by the Company in, or in connection
with its business and/or legally or beneficially
owned by the Company;
	 
	 	 	 	 	 	 
	 	 	“Know-How”	 	means all information not publicly known which is
owned by the Company and/or used or required to be
used by the Company in or in connection with its
business existing in any form (including, but not
limited to that comprised in or derived from data,
specifications, formulae, experience, drawings,
manuals, component, lists, instructions, designs
and circuit diagrams, brochures, catalogues and
other descriptions) and relating to:
	 
	 	 	 	 	 	 
	 

	 	 	 	(a)
	 	The provision of any services;
	 
	 	 	 	 	 	 
	 

	 	 	 	(b)
	 	the installation, maintenance or use of
equipment or processes; or
	 
	 	 	 	 	 	 
	 

	 	 	 	(c)
	 	the rectification, repair, service or
maintenance of produces or other equipment;
	 
	 	 	 	 	 	 
	 	 	“Licence”	 	means a licence, permit, certificate, consent,
approval, filing of notification, reports and
assessments, registrations or authorisation
required by law for the operation of the Company’s
business, its ownership, use, possession or
occupation of any asset or the performance of this
agreement;
	 
	 	 	 	 	 	 
	 	 	“Management Accounts”	 	means the management accounts of the Company for
the 3 month period ended on 30 June 2005 attached
to the Disclosure Letter;
	 
	 	 	 	 	 	 
	 	 	“Management Accounts Date”	 	means 30 June 2005;
	 
	 	 	 	 	 	 
	 	 	“Overpayments”	 	means payments made to the Company, Spring Leisure
Limited and WWW.CO.UK Limited by parties to
advertising contracts which have not been yet been
invoiced and which are referred to in the schedule
of overpayments contained at 6.2 in the Disclosure
letter;
	 
	 	 	 	 	 	 
	 	 	“Property”	 	means 34-36 Orchard Road, St Anne’s On Sea,
Lancashire registered at HM Land Registry under
number LA430396;
	 
	 	 	 	 	 	 
	 	 	“Second Disclosure Letter”	 	means the second disclosure letter(s) (if any)
written by the Warrantors and delivered to the
Buyer in accordance with clause 5.6;

 

 

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	 	“Sellers’ Solicitors”
	 	means Wacks Caller Solicitors, Steam Packet House,
76 Cross Street, Manchester M2 4JU;
	 
	 	 	 	 
	 

	 	“Shares”
	 	means:-
	 
	 	 	 	 
	 

	 	 	 	(A)      in the case of UK Theatres Online Limited the
fully paid issued ordinary:
	 
	 	 	 	 
	 

	 	 	 	(a)      3,600,000 A shares of £0.01 each;
	 
	 	 	 	 
	 

	 	 	 	(b)      1,300,000 B shares of £0.01 each; and
	 
	 	 	 	 
	 

	 	 	 	(c)      100,000 C shares of £0.01 each;
	 
	 	 	 	 
	 

	 	 	 	in the capital of the Company comprising the whole
of the issued share capital of the Company at the
date hereof;
	 
	 	 	 	 
	 

	 	 	 	(B)      in the case of WWW.CO.UK Limited the fully
paid issued ordinary:-
	 
	 	 	 	 
	 

	 	 	 	(a)      7,574 A Ordinary Shares of £0.01 each; and
	 
	 	 	 	 
	 

	 	 	 	(b)      2,426 B Ordinary Shares of £0.01 each
	 
	 	 	 	 
	 

	 	 	 	comprising the whole of the issued share capital
of WWW.CO.UK Limited at the date hereof;
	 
	 	 	 	 
	 

	 	 	 	in the case of capital of Spring Leisure Limited
the 700 fully paid issued A Ordinary Shares of £1
each and 300 fully paid issued B Ordinary Shares
of £1 each comprising the whole of the issued
share capital of Spring Leisure Limited at the
date hereof;
	 
	 	 	 	 
	 

	 	“Showtimes”
	 	means Showtimes.com, Inc., a Delaware corporation;
	 
	 	 	 	 
	 

	 	“Taxation”
	 	has the meaning given in Schedule 4 (Tax Covenant);
	 
	 	 	 	 
	 

	 	“Taxation Authority”
	 	has the meaning given in Schedule 4 (Tax Covenant);
	 
	 	 	 	 
	 

	 	“Tax Covenant”
	 	means the covenant set out in Schedule 4;
	 
	 	 	 	 
	 

	 	“Taxation Statute”
	 	means any statute, enactment, law or regulation
providing for the imposition of Taxation;
	 
	 	 	 	 
	 

	 	“Tax Warranties”
	 	means the Warranties contained in paragraph 18 of
Schedule 3;
	 
	 	 	 	 
	 

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

	 	“Term Sheet”
	 	means that certain Term Sheet, dated as of July
18, 2005, by and between Showtimes, the Company,
Cinemasonline Limited and the shareholders of the
Company and Cinemasonline Limited party thereto,
as amended by that certain Amendment to Term
Sheet, dated as of October 11, 2005;
	 
	 	 	 	 
	 

	 	“VAT”
	 	means, in the United Kingdom, value added tax and

 

 

Beachcroft Wansbroughs

	 	 	 	 	 
	 

	 	 	 	elsewhere, any equivalent tax;
	 
	 	 	 	 
	 

	 	“VATA”
	 	means the Value Added Tax Act 1994;
	 
	 	 	 	 
	 

	 	“Warranties”
	 	means the warranties contained in Clause 5 and
Schedule 3 of this agreement and Clause 5 and
Schedule 1 of the Cinemasonline Purchase Agreement
and references to a “Warranty” shall be construed
accordingly; and
	 
	 	 	 	 
	 

	 	“Warrantors”
	 	means the following Sellers: Geneva Cartwright,
Mitchell Cartwright, Janette Erskine, Malcolm
Johnson Elaine Spector and Jeffrey Spector

	 	1.2	 	In this agreement, reference to:-

	 	1.2.1	 	a clause or Schedule is a reference to a clause of or schedule
to this agreement;
	 
	 	1.2.2	 	a document “in the agreed form” is a reference to a document
in the form approved by or on behalf of the Buyer and the Sellers;
	 
	 	1.2.3	 	a statutory provision includes a reference to that provision
as modified, replaced, amended and/or re-enacted from time to time and any
prior or subsequent subordinate legislation made under it and, where the
context so requires, references to an Article of the EC Treaty shall include a
reference to the equivalent Article in the EC Treaty prior to its re-numbering
by the Treaty of Amsterdam;
	 
	 	1.2.4	 	“costs” includes a reference to costs, charges and expenses of
every description;
	 
	 	1.2.5	 	a “person” includes a reference to an individual, partnership,
unincorporated association or body corporate wherever incorporated or situate
and includes a reference to that person’s legal personal representatives and
successors;
	 
	 	1.2.6	 	a “subsidiary”, “holding company” and “body corporate” has the
respective meaning set out in sections 736 and 740 of the Act;
	 
	 	1.2.7	 	a “company” has the meaning set out in section 735 of the Act;
	 
	 	1.2.8	 	a “subsidiary undertaking” or a “parent undertaking” has the
meaning set out in sections 258 and 259 of the Act;
	 
	 	1.2.9	 	a “group undertaking” has the meaning set out in section 259
of the Act and “Group Company” shall mean any company in the Group of the
Company; and
	 
	 	1.2.10	 	a “connected person” is a reference to a person connected with another within
the meaning of section 839 of ICTA.
	 
	 	1.2.11	 	the “Company” is where the context permits, a reference to the Company and
the following companies:

WWW.CO.UK Limited      (04285425); and

Spring Leisure Limited      (05102050).

 

 

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	 	1.3	 	The Schedules form part of this agreement and shall be interpreted and
construed as though they were set out in this agreement.
	 
	 	1.4	 	The headings to the clauses, Schedules and paragraphs of the Schedules are for
convenience only and shall not affect the interpretation or construction of this
agreement.
	 
	 	1.5	 	In construing this agreement, the ejusdem generis principle shall not apply and
general words are not to be given a restrictive meaning because they are followed by
particular examples intended to be embraced by the general words.
	 
	 	1.6	 	Unless otherwise stated to the contrary in any particular case, any statement
which refers to the knowledge or knowledge and belief of the Warrantors or is expressed
to be “so far as the Warrantors are aware” or any similar expression shall be deemed to
include an additional statement that it has been made after due and careful enquiry of
employees and officers of the Company.
	 
	 	1.7	 	Any agreement, warranty, indemnity, covenant or undertaking on the part of two
or more persons shall, except where the contrary is stated, be deemed to be given or
made by such persons severally.

	2.	 	SALE AND PURCHASE OF THE SHARES

	 	2.1	 	The Sellers agree to sell or procure to be sold with full title guarantee and
the Buyer agrees to buy, the whole of the legal and beneficial interest in the Shares
with all rights attached or accruing to them at the date of Completion.
	 
	 	2.2	 	The Sellers covenant to the Buyer that the Buyer will on Completion be entitled
to exercise all rights attached or accruing to the Shares.
	 
	 	2.3	 	The completion of this agreement is conditional upon the simultaneous
completion of the purchase of Cinemasonline Limited in accordance with the
Cinemasonline Purchase Agreement.

	3.	 	CONSIDERATION

	 	3.1	 	The price for the Shares is the Consideration plus the additional consideration
if any payable in accordance with the provisions of clause 3.3.
	 
	 	3.2	 	The Consideration is the sum of US$1,608,286, which will be apportioned as
follows:- UK Theatres Online Limited US$955,071; WWW.CO.UK Limited US$400,503; and
Spring Leisure Limited US$252,712, and which will be paid in cash which shall be paid
to the Sellers in the amounts set against their respective names in Schedule 1 and
which shall be satisfied at Completion by

	 	3.2.1	 	a credit of the $70,000 paid by Showtimes under the Term
Sheet,
	 
	 	3.2.2	 	the electronic transfer of US$1,538,286 to the Buyer’s
Solicitors’ U.S. Dollar Client Account at Coutts Bank, 440 The Strand, London
WC2R 0QS, Account No 15537140, IBAN GB07COUT18009115537140, SWIFT Code COUT GB
22

and the Buyer shall not be concerned as to the apportionment of any of the cash
amounts detailed in this clause 3.2 as between the Sellers.

	 	3.3	 	Additional consideration will be payable for the share capital of the Company
in the sum of up to £62,552 (or such other sterling amount which is equivalent to the
Escrow

 

 

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Sum upon the date of the transfer of such sum into the Escrow Account) which will be
calculated as set out in Schedule 6.

	 	3.4	 	The additional consideration referred to in clause 3.3 shall when calculated be
paid to the Sellers within seven days of it being calculated by means of the Buyer’s
Solicitors and the Sellers’ Solicitors releasing from the Escrow Account the additional
consideration which is payable as determined under the provisions of Schedule 6 which
sum shall be divided amongst the Sellers as directed by Jeffrey Spector and which
payment shall be a sufficient discharge of the obligation of the Buyer to pay such
additional consideration to the Sellers.
	 
	 	3.5	 	To the extent that there is any residue left in the Escrow Account after the
payment of all sums due under clause 3.3 it shall be returned to the Buyer (with all
interest earned on such residue) in accordance with the terms of the Escrow Letter.
	 
	 	3.6	 	The Buyer will and will procure insofar as it can that the Company will
co-operate in good faith with the Sellers in order to seek to maximise the additional
consideration payable under this clause and the Buyer acknowledges that such efforts
may result in an increase in the profits of the Company without any corresponding
receipt of cash since the relevant monies have already been received by the Company and
the Buyer acknowledge that there may in consequence be an adverse effect on cash flow
due to the consequential Taxation arising from the conversion of Overpayments into
sales.

	4.	 	COMPLETION

	 	4.1	 	Completion shall, subject to the provisions of Clause 5.5, take place at the
offices of the Buyer’s Solicitors in London on the Completion Date when all the matters
referred to in Clauses 4.2 to 4.4 shall be effected.
	 
	 	4.2	 	At Completion the Sellers shall deliver to the Buyer:-

	 	4.2.1	 	duly executed transfers of the Shares to the Buyer in the
agreed form together with the share certificates for all of the Shares (or an
express indemnity in a form satisfactory to the Buyer in the case of any
missing certificate) and the share certificates in respect of the Company’s
shareholdings in each one of WWW.CO.UK Limited and Spring Leisure Limited;
	 
	 	4.2.2	 	executed power(s) of attorney in favour of the Buyer in the
agreed form, and such duly executed waivers or consents as may be required, to
give a good title to the Shares to the Buyer and to enable the Buyer be
registered as the holder of the Shares and, pending registration, to exercise
all voting and other rights attaching to the Shares;
	 
	 	4.2.3	 	service agreements in the agreed form duly signed by each of
the Jeffrey Spector and Janette Erskine;
	 
	 	4.2.4	 	all the financial and accounting books and records of the
Company;
	 
	 	4.2.5	 	the statutory books of the Company (duly written up to date as
at immediately prior to Completion) and Certificates of Incorporation and
Certificate of Incorporation on Change of Name;
	 
	 	4.2.6	 	board resolutions of the Company in the agreed form relating
to the matters specified in Clause 4.3;
	 
	 	4.2.7	 	a surrender and release in the agreed form of the existing
lease of the Property executed by the Company and the relevant landlord;

 

 

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	 	4.2.8	 	a lease of the Property in the agreed form duly executed by
the Company and the relevant landlord;
	 
	 	4.2.9	 	written resignations by Elaine Spector, Paul Erskine and
Beverly Esposito of their respective employment with the Company in a form
satisfactory to Buyer; and
	 
	 	4.2.10	 	a copy of the Escrow Letter executed by Jeffrey Spector and the Sellers’
Solicitors.

	 	4.3	 	At Completion the Sellers shall procure that a board meeting of the Company is
held at which the directors:-

	 	4.3.1	 	approve the registration of the transfers in respect of the
Shares referred to in Clause 4.2.1 (subject only to due stamping);
	 
	 	4.3.2	 	revoke all existing authorities to bankers regarding the
operation of the Company’s bank accounts and give relevant authorities in
favour of the persons nominated by the Buyer to operate such accounts;
	 
	 	4.3.3	 	change the Company’s accounting reference date to 31 December;
and
	 
	 	4.3.4	 	approve and execute on behalf of the Company a service
agreement with each of Jeffrey Spector and Janette Erskine in the agreed form.

	 	4.4	 	At Completion the Buyer shall:-

	 	4.4.1	 	pay or procure the payment of or the transfer of into the
Escrow Account (as appropriate) the Consideration and the Escrow Sum as set out
in Clauses 3.2 and 3.3 by procuring that the Buyer’s Solicitors shall provide
an undertaking in the agreed form to the Sellers’ Solicitors and shall effect
the electronic transfers referred to therein;
	 
	 	4.4.2	 	deliver to the Sellers a copy of a resolution of the Buyer’s
board of directors (or an authorised committee of that board) authorising the
execution and completion of this agreement and the incidental matters referred
to herein; and
	 
	 	4.4.3	 	a copy of the Escrow Letter executed by the Buyer and the
Buyer’s Solicitors.

	5.	 	WARRANTIES AND TAX COVENANT

	 	5.1	 	Each Seller warrants to the Buyer that in relation to himself and the Shares
specified against his name in Schedule 1 only, each Warranty contained in paragraphs
1.1, 1.3, 2.1 and 2.2 is true and accurate in all material respects as at the date of
this agreement. The Warrantors, in addition to the Warranties they have given as
Sellers, warrant to the Buyer in the terms of the Warranties such Warranties being
given by Janette Erskine and Malcolm Johnson severally and by Elaine Spector, Jeffrey
Spector, Mitchell Cartwright and Geneva Cartwright jointly and severally.
	 
	 	5.2	 	The Warranties are subject only to:-

	 	5.2.1	 	any matter which is Disclosed in the Disclosure Letter and
Disclosure Bundle and the Second Disclosure Letter;
	 
	 	5.2.2	 	any matter or thing done or omitted to be done prior to
Completion at the written request, or with the written approval of, the Buyer;
and

 

 

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	 	5.2.3	 	the provisions of Clause 6.

	 	5.3	 	Each of the parties acknowledges that the Buyer is entering into this agreement
in reliance upon the Warranties. Save as provided in Clause 5.2, no information of
which the Buyer or any member of the Buyer’s Group has constructive or imputed
knowledge shall prejudice any Claim being made by the Buyer under any of the Warranties
nor shall it affect the amount recoverable under any such Claim and neither the rights
and remedies of the Buyer nor any of the Sellers’ liability in respect of the
Warranties shall be affected by any investigation made by or on behalf of the Buyer
into the Company.
	 
	 	5.4	 	Each of the Warranties shall be interpreted as a separate and independent
Warranty so that the Buyer shall have a separate Claim and right of action in respect
of every breach of each Warranty.
	 
	 	5.5	 	The provisions of Schedule 4 shall apply with respect to the matters contained
or referred to therein.
	 
	 	5.6	 	In the period from today’s date until the time that Completion actually takes
place the Warrantors shall be entitled to deliver to the Buyer one or more further
disclosure letters in which the Warrantors may disclose to the Buyer any further
information which shall not have been contained in the Disclosure Letter or the
Disclosure Bundle but which is in any way necessary, in the Warrantors’ opinion to
qualify the statements contained in the Warranties or the Tax Covenant.
	 
	 	5.7	 	The parties agree that if a Second Disclosure Letter is delivered to the Buyer
then no Claim shall lie against the Warrantors whether before or after Completion in
relation to the matter(s) Disclosed in the Second Disclosure Letter but the Buyer may
rescind this agreement at any time prior to (but not after) Completion in which case no
party shall have any action against any of the others arising from the negotiation of
and entry into this agreement and each party shall be responsible for and bear its own
costs in relation thereto.
	 
	 	5.8	 	Jeffrey Spector, Elaine Spector and Janette Erskine jointly and severally
undertake to indemnify and keep indemnified the Company from all losses, costs, claims
and expenses of whatsoever nature (including for the avoidance of doubt all legal and
professional fees) resulting from termination of the employment of Elaine Spector, Paul
Erskine and Beverly Esposito.

	6.	 	LIMITATION ON SELLERS’ LIABILITY

	 	6.1	 	Subject to Clause 5.2, the Sellers’ liability under the Warranties shall be
limited as follows:-

	 	6.1.1	 	no Claim shall be made by the Buyer unless the aggregate
amount of all Claims under this agreement and the Cinemasonline Purchase
Agreement (including all previous Claims whether or not satisfied) shall equal
or exceed £50,000 in which case the whole amount shall be capable of being
claimed and not merely the excess, provided that Claims for breaches of
Warranties under Clause 5.2 or Clause 5.4 of Schedule 3 shall not be subject to
this limitation;
	 
	 	6.1.2	 	the liability of Janette Erskine and Malcolm Johnson in
respect of all the Warranties (and in respect also of Claims under the Tax
Covenant) is limited to the cash paid to each by way of Consideration;
	 
	 	6.1.3	 	the liability of Mitchell Cartwright and Geneva Cartwright in
respect of all the Warranties (and in respect also of Claims under the Tax
Covenant)

 

 

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under this agreement and the Cinemasonline Purchase Agreement is limited
to the cash paid to each by way of Consideration under this agreement and
any consideration received by either of them pursuant to the
Cinemasonline Purchase Agreement less any amount advanced (whether by way
of loan or gift) out of such proceeds to any of the Cartwright Parties if
and only if the recipient of such proceeds agrees in writing to assume
the liabilities of Mitchell Cartwright or Geneva Cartwright, as
applicable, in respect of the Warranties and any Claims under the Tax
Covenant, limited to the amount of such proceeds received;

	 	6.1.4	 	no Claim for breach of the Warranties other than the Tax
Warranties shall be made unless the Claim has been notified in writing to the
Warrantors in reasonable detail before the second anniversary of Completion;
	 
	 	6.1.5	 	no Claim for breach of the Tax Warranties shall be made unless
the Claim has been notified in writing to the Warrantors in reasonable detail
before the seventh anniversary of Completion;
	 
	 	6.1.6	 	subject to clause 6.1.7, the aggregate liability of all the
Warrantors in respect of all the Warranties and the Tax Covenant under this
agreement and the Cinemasonline Purchase Agreement is limited to the
Consideration received by them under this agreement and any consideration
received by any of them pursuant to the Cinemasonline Purchase Agreement;
	 
	 	6.1.7	 	the aggregate liability of Jeffrey Spector and Elaine Spector
in respect of (a) the Warranties shall be limited to the total Consideration
paid by Buyer under this agreement and the total consideration paid by Buyer
under the Cinemasonline Purchase Agreement and (b) the Tax Covenant shall be
without limitation; and
	 
	 	6.1.8	 	no Claim shall lie in relation to up to £125,104 of
Overpayments.

	 	6.2	 	The Sellers shall not be liable under the Warranties to the extent that a Claim
arises or is increased:-

	 	6.2.1	 	wholly or partly from an act or omission compelled by law;
	 
	 	6.2.2	 	wholly or partly as a result of the passing or coming into
force of or any change in any enactment, law, regulation, directive,
requirement or any practice of any government, government department or agency
or regulatory body (including extra-statutory concessions of the Inland
Revenue) after the date hereof whether or not having retrospective effect or
any change in the way in which the business of the Company, Spring Leisure
Limited or WWW.CO.UK Limited is altered after Completion.

	 	6.3	 	None of the limitations contained in Clause 5.2 or Clause 6 apply in relation
to any Claim arising from any fraud, intent or wilful misstatement on the part of the
Sellers in relation to the entry into this agreement.
	 
	 	6.4	 	The Buyer shall not be entitled to recover damages in respect of any Claim for
breach of any of the Warranties or the Tax Covenant or otherwise obtain reimbursement
or restitution more than once in respect of any one breach of Warranty or the Tax
Covenant or indemnity Claim arising out of or in connection with the same
circumstances.
	 
	 	6.5	 	The Warrantors shall not be liable under the Warranties in respect of any
Claim:

	 	(a)	 	to the extent that recovery is made by the Buyer or any member
of the Buyer’s Group under any policy of insurance or to the extent that
recovery

 

 

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would have been capable of being made under any policy of insurance had the
Buyer or any member of the Buyer’s Group effected policies of insurance on
similar terms to those effected by or for the benefit of the Company which
are in force as at the date of this agreement; or

	 	(b)	 	to the extent that the Buyer or any member of the Buyer’s Group
or those deriving title from the Buyer have already obtained reimbursement or
restitution in respect of such Claim from any third party.

	 	6.6	 	If the Warrantors pay to the Buyer an amount in respect of any Claim under the
Warranties and the Buyer or any member of the Buyer’s Group subsequently recovers from
a third party (including, without limitation, any insurer or any tax authority) a sum
which is referable to that Claim, the Buyer shall repay to the Warrantors so much of
the amount originally paid by the Warrantors as does not exceed the sum recovered from
the third party after deduction of all reasonable costs and expenses of recovery.
	 
	 	6.7	 	The Warrantors shall not be liable under the Warranties or the Tax Covenant in
respect of any Claim:

	 	(a)	 	which is based upon a liability which, at the time such Claim
is notified to the Warrantors is contingent only or otherwise not capable of
being quantified unless and until such liability ceases to be contingent or
becomes capable of being quantified. Subject to such Claim being notified to
the Warrantors within the time limits specified in clause 6.1, the time limit
for issuing and serving proceedings for the purposes of clause 6.1 shall begin
on the date on which such liability ceases to be contingent or becomes capable
of being quantified;
	 
	 	(b)	 	to the extent that the matter giving rise to the Claim falls to
be done in implementing the terms of this agreement or any document or
agreement to be entered into pursuant to this agreement;
	 
	 	(c)	 	to the extent that results from any change in the way in which
the business of the Company, Spring Leisure Limited or WWW.CO.UK Limited is
altered after Completion save in relation to which it deals with Overpayments
or as required under law in the United Kingdom (provided that even if the
change made concerning Overpayments is deemed necessary under the law, the
Sellers shall have no liability in respect of the first £125,104 of
Overpayments)

	 	6.8	 	The Buyer shall (and shall procure that the Company shall) take all reasonable
steps to mitigate any loss, liability or damage which is likely to give rise to a Claim
under the Warranties, and the Tax Covenant including (without limitation) steps to
prevent any contingent liability becoming an actual liability. Nothing in this
agreement shall relieve the Buyer of any common law or other duty to mitigate any loss,
liability or damage suffered or incurred by it.
	 
	 	6.9	 	If any Claim is made against the Buyer or any member of the Buyer’s Group by
any third party which is likely to in turn lead to a Claim by the Buyer against the
Warrantors under the Warranties then the Buyer shall:

	 	(a)	 	give notice of such Claim to the Warrantors as soon as
reasonably practicable after the Buyer becomes aware of it;
	 
	 	(b)	 	keep the Warrantors promptly and fully informed as to the
progress of any such Claim;
	 
	 	(c)	 	subject to the Buyer and the relevant member of the Buyer’s
Group being entitled to employ its own legal advisers and being indemnified and
secured to

 

 

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its reasonable satisfaction by the Warrantors against all liabilities,
costs, expenses, damages and losses (including, without limitation, the
reasonable and proper costs of its legal advisers) suffered or incurred in
connection with any such Claim, take, and shall procure that each member of
the Buyer’s Group shall take, all reasonable steps so as to recover or
minimise or resolve such liability or dispute and, upon request by the
Warrantors, permit the Warrantors to take sole conduct of such actions as
the Warrantors deem appropriate in connection with such Claim, in the name
of the Buyer or the relevant member of the Buyer’s Group;

	 	(d)	 	comply with all reasonable requests of the Warrantors in
relation to such Claim including (without limitation) giving the Warrantors
access to premises, personnel, documents and records for the purpose of
investigating the matters giving rise to such Claim; and
	 
	 	(e)	 	not (and shall procure that no member of the Buyer’s Group
shall) accept or pay or compromise any such liability or Claim without the
prior written consent of the Warrantors (such consent not to be unreasonably
withheld or delayed);

PROVIDED THAT nothing in this clause 6.9 shall require the Buyer or any member of
the Buyer’s Group to take or refrain from taking any action which it reasonably
considers would materially and adversely affect the goodwill or bona fide commercial
interests of the Buyer’s Group.

	 	6.10	 	If any amount is paid by the Warrantors under the Warranties or the Tax
Covenant, the amount of such payment shall be deemed to constitute a reduction in the
consideration payable under this agreement.
	 
	 	6.11	 	No Claim shall be admissible and the Warrantors shall not be liable in respect
thereof to the extent that:

	 	6.11.1	 	the liability arises as a result of or is otherwise attributable wholly to
any voluntary act, transaction or omission of the Company or any member of the
Buyer’s Group or their respective directors, employees or agents on or after
Completion; or
	 
	 	6.11.2	 	the liability comprises penalties, charges or interest arising directly or
indirectly from any act, transaction or omission of any member of the Buyer’s
Group or the Company after Completion; or
	 
	 	6.11.3	 	such Claim is wholly attributable to any voluntary act, omission, transaction
or arrangement carried out at the request of or with the consent of any member
of the Buyer’s Group or their respective directors, employees or agents before
Completion.

	7.	 	PROTECTION OF GOODWILL

	 	7.1	 	Each of the Sellers undertakes to the Buyer that unless he or she has obtained
the prior written consent of the Buyer or another member of the Buyer’s Group or their
respective directors, employees or agents or save as would be inconsistent with their
obligations under the service agreements:-

	 	7.1.1	 	(in the case only of the Sellers whose names are not marked
with an asterisk in Schedule 1 only) for a period of 24 months from Completion
he will not knowingly, for the purpose of any business supplying products or
services similar to or capable of being used in substitution for any product

 

 

Beachcroft Wansbroughs

or service supplied by the Company, canvass, solicit or endeavour to
entice away from the Company any person who has been a customer of the
Company or has purchased or agreed or offered to purchase goods from the
Company or has employed its services or who has been canvassed by the
Company (otherwise than by general advertising) with a view to becoming a
customer of the Company; and

	 	7.1.2	 	for a period of 24 months from Completion he will not solicit
or endeavour to entice away from the Company, employ or offer employment to any
employee of the Company who is at the date of this agreement and/or at
Completion an Employee nor do any act or thing likely to have the effect of
causing any Employee to terminate his employment with the Company whether or
not such employee would thereby breach his contract of employment; and
	 
	 	7.1.3	 	he will not at any time in connection with any business
carried on by him or otherwise howsoever use directly or indirectly or
authorise any person to use directly or indirectly any of the Intellectual
Property rights including the names or words “WWW.CO.UK”, “Spring”,
“Cinemasonline”, “UK Theatres Online” or any other trading name used by the
Buyers’ Group or any names or words similar to or likely to be confused with
them or use any distinctive mark, style or logo used by the Company or any
mark, style or logo similar to or likely to be confused with them in any manner
which is likely to or may result in confusion between or other association with
the business, goods, services or other activities of the Company including by
using the name “UK Theatres Online “ as part of a corporate name, trade name or
otherwise.

	 	7.2	 	Nothing in Clause 7.1 shall prevent the Sellers from:-

	 	7.2.1	 	owning not more than three per cent of any class of the issued
share capital of a company which is dealt in on a recognised investment
exchange (as defined in the Financial Services and Markets Act 2000); or
	 
	 	7.2.2	 	being engaged, concerned or interested in any business in
which he is engaged, concerned or interested at the date hereof.

	 	7.3	 	The Sellers have taken independent legal advice and acknowledge that they
consider the undertakings contained in Clause 7.1 reasonable for the proper protection
of the business of the Company and further acknowledge that damages would not be an
adequate remedy for breach of such undertakings.
	 
	 	7.4	 	Each of the undertakings contained in Clause 7.1 is separate and severable and
shall be construed on that basis. In the event that any of such undertakings is found
to be void but would be valid if some part of it were deleted or if the period or
extent of it were reduced such undertaking shall apply with such modification as may be
necessary to make it valid and effective.

	8.	 	CONFIDENTIAL INFORMATION AND KNOW-HOW

	 	8.1	 	Each of the Sellers undertakes before and after Completion but subject to
Clause 8.2 that he shall:-

	 	8.1.1	 	not make use of or disclose to any person Confidential
Information, Know-How or Intellectual Property belonging to and/or used by the
Company up to Completion; and

 

 

Beachcroft Wansbroughs

	 	8.1.2	 	take all reasonable steps to prevent the use or disclosure of
any such Confidential Information, Know-How or Intellectual Property belonging
to and/or used by the Company.

	 	8.2	 	Clause 8.1 does not apply to:-

	 	8.2.1	 	the use or disclosure of Confidential Information required to
be used or disclosed by law provided that the relevant Seller gives the Buyer
prior notice of such disclosure or in the course of the employment of any
Seller by the Company or the Buyer or another member of the Buyer’s Group or as
required by the terms of any other contract or agreement to which the Buyer or
another member of the Buyer’s Group or the Company is a party;
	 
	 	8.2.2	 	the disclosure of Confidential Information, Know-How or
Intellectual Property to a director, officer or employee of the Buyer or
another member of the Buyer’s Group or of the Company whose function requires
that he has possession of the Confidential Information Know-How or Intellectual
Property Rights;
	 
	 	8.2.3	 	disclosure of Confidential Information to an adviser for the
purpose of advising the Sellers but only on terms that Clause 8.1 applies to
use or disclosure by the adviser; or
	 
	 	8.2.4	 	Confidential Information which becomes publicly known except
as a result of any one or more of the Sellers’ breach of Clause 8.1.

	9.	 	ANNOUNCEMENTS

	 	9.1	 	Subject to Clause 9.2 the Sellers shall not make or send before or after
Completion any announcement, communication or circular relating to the subject matter
of this agreement unless such party has first obtained the other party’s written
consent to the form and text of such announcement, such consent not to be unreasonably
withheld.
	 
	 	9.2	 	Subject to Clause 9.3, Clause 9.1 does not apply to an announcement,
communication or circular:-

	 	9.2.1	 	required by law or by a Recognised Investment Exchange (as
defined by the Financial Services and Markets Act 2000) or by any governmental
authority, in which event the party required to make or send such announcement,
communication or circular shall, where practicable, first consult with the
other party as to the content of such announcement;
	 
	 	9.2.2	 	made or sent by the Buyer or another member of the Buyer’s
Group after Completion to the Company’s customers, clients or suppliers
advising them of the change of control of the Company; or
	 
	 	9.2.3	 	sent by the Buyer or another member of the Buyer’s Group to
the Sellers’ Solicitors and/or its officers, directors, employees, equity
holders, shareholders and professional advisers (“the Authorised Disclosees”)
if the Sellers’ Solicitors and any Authorised Disclosee agrees to be bound by
confidentiality provisions substantially the same as those contained in Clause
9.

	 	9.3	 	In the event either party is required by law, applicable regulation or judicial
process to disclose any information relating to this agreement, such party agrees to:-

	 	9.3.1	 	promptly notify the other party of the existence, terms and
circumstances surrounding such requirement;

 

 

Beachcroft Wansbroughs

	 	9.3.2	 	consult with the other party on the advisability of taking
legally available steps to resist or narrow such request; and
	 
	 	9.3.3	 	if disclosure of such information is required, exercise its
reasonable efforts to obtain an order or other reliable assurance that
confidential treatment will be accorded to such information. If such order or
assurance is not obtained, the party required to disclose such information
shall be permitted to disclose only the portion of such information that it is
advised by opinion of counsel is required to be disclosed.

	10.	 	NOTICES

	 	10.1	 	Any notice or other communication pursuant to, or in connection with, this
agreement shall be in writing and delivered personally, or sent by first class pre-paid
recorded delivery post (air mail if overseas), to the Buyer at the address specified on
page 1 above (or such address as may be notified in writing by the Buyer from time to
time) with a copy to Hollywood Media Corp., 2255 Glades Road, Suite 221 – A, Boca
Raton, Fl 33431 USA (Attention: Legal Department), and to each Seller at the address of
the Sellers’ Solicitors (Ref KP).
	 
	 	10.2	 	Subject to Clause 10.3, any notice or other communication shall be deemed to
have been served:-

	 	10.2.1	 	if delivered personally, when left at the address referred to in Clause 10.1;
	 
	 	10.2.2	 	if sent by pre-paid recorded delivery post (other than air mail), two days
after posting it; or
	 
	 	10.2.3	 	if sent by air mail, six days after posting it.

	 	10.3	 	If a notice is given or deemed given at a time or on a date which is not a
Business Day, it shall be deemed to have been given on the next Business Day.

	11.	 	ENTIRE AGREEMENT

	 	11.1	 	This agreement and the Disclosure Letter and the Disclosure Bundle and (if
appropriate the Second Disclosure Letter) sets out the entire agreement and
understanding between the parties in respect of the sale and purchase of the Shares.
This agreement supersedes and extinguishes the heads of agreement which shall cease to
have any further force or effect. It is agreed that:-

	 	11.1.1	 	the Buyer has not entered into this agreement in reliance upon any
representation, warranty or undertaking of any other party (including, for the
avoidance of doubt, any correspondence between any of the Sellers and any of
their representatives on the one hand and the Buyer, any other member of the
Buyer’s Group and any of their representatives on the other hand) which is not
expressly set out or referred to in this agreement or the Disclosure Letter;
	 
	 	11.1.2	 	no party shall have any remedy in respect of any misrepresentation or any
untrue statement made by any other party which is not contained in this
agreement or the Disclosure Letter nor for any breach of warranty which is not
contained in this agreement or the Disclosure Letter;
	 
	 	11.1.3	 	this clause shall not exclude any liability for, or remedy in respect of
fraud or fraudulent misrepresentation.

 

 

Beachcroft Wansbroughs

	 	11.2	 	No variation of this agreement shall be effective unless made in writing and
signed by or on behalf of the Buyer and Jeffrey Spector who may make binding and
effective the variations on behalf of the other Sellers.

	12.	 	FURTHER ASSURANCE

	 	12.1	 	Each of the Sellers undertakes to provide the Buyer before or after Completion
with all documents as he or she has in his or her possession or under his or her
control relating to the business and affairs of the Company and for this purpose each
of the Sellers shall give the Buyer and any persons authorised by the Buyer reasonable
access to all such documents, and the Buyer may, at its cost, copy any such documents.
	 
	 	12.2	 	Jeffrey Spector shall, as soon as reasonably practicable and in any event
within seven days of Completion, cause Clifford House (2002) Limited to (a) apply to
the Land Registry for removal of the Lease dated 24th November 2003 under
title number LAN5327 and noted in the Schedule of Notices of Leases of title number
LA430396, and (b) promptly deal with the requirements of the Land Registry in
connection with such application including without limitation the submission of SDLT
returns the payment of any SDLT (where due) and the payment of all Land Registry fees
and shall procure the closure of title number LAN5327.
	 
	 	12.3	 	Each of the Sellers shall:-

	 	12.3.1	 	at his own cost at any time before and after Completion execute or procure
the execution of such documents in a form satisfactory to the Buyer as the
Buyer considers reasonably necessary for the purpose of vesting the Shares in
the Buyer; and
	 
	 	12.3.2	 	for a period not exceeding three years from the date of this agreement give
to the Buyer such assistance as the Buyer may reasonably require in connection
with any dispute or threatened dispute directly or indirectly relating to the
Intellectual Property, Know-How and/or the Confidential Information, subject to
the Buyer first indemnifying each Seller against any costs hereby incurred by
him in such reasonable manner as the Sellers shall reasonably request.

	13.	 	INVALIDITY

If any provision of this agreement is held to be unenforceable or illegal, in whole or in
part, such provision or part shall to that extent be deemed not to form part of this
agreement but the enforceability of the remainder of this agreement shall remain unaffected.

	14.	 	EFFECT OF COMPLETION

This agreement and in particular the Warranties in so far as any of its provisions remain to
be, or are capable of being, performed or observed, shall remain in full force and effect
after Completion.

	15.	 	WAIVER

	 	15.1	 	The failure by the Buyer to exercise or delay in exercising any right or remedy
under this agreement shall not constitute a waiver of the right or remedy or a waiver
of any other rights or remedies the Buyer may otherwise have and no single or partial
exercise of any right or remedy under this agreement shall prevent any further exercise
of the right or remedy or the exercise of any other right or remedy.
	 
	 	15.2	 	The Buyer’s rights and remedies contained in this agreement are in addition to,
and not exclusive of, any other rights or remedies available at law.

 

 

Beachcroft Wansbroughs

	16.	 	COSTS

The Buyer and the Sellers shall pay their own costs in relation to the negotiation,
preparation, execution and implementation of this agreement and of each document referred to
in this agreement.

	17.	 	ASSIGNMENT

	 	17.1	 	The Sellers agree that the benefits of this agreement and any documents
referred to in it or executed at Completion (including any causes of action arising in
connection with any of them) are given to the Buyer for itself and its successors in
title and the Buyer and its successors in title may not without the consent of any one
or more of the Sellers, such consent not to be unreasonably withheld or delayed, assign
the benefits of this agreement.
	 
	 	17.2	 	Notwithstanding the provisions of Clause 17.1 above, the Buyer may assign the
benefits of this agreement to any member of the Buyer’s Group. PROVIDED THAT upon the
assignee ceasing to be a member of the Buyer’s Group such benefits shall cease to apply
unless they shall have previously been re-assigned to another member of the Buyer’s
Group.

18. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

A person who is not a party to this agreement shall have no rights under the Contracts
(Rights of Third Parties) Act 1999 to rely upon or enforce any term of this agreement
provided that this does not affect any right or remedy of the third party which exists or is
available apart from that Act. No party may declare itself as a trustee of the rights under
this agreement for the benefit of any third party save as expressly provided in this
agreement.

19. LIMITATION OF TIME

In the event of any Claim being made against any one or more of the Warrantors under the Tax
Covenant or in the event of any Claim for breach of the provisions of clause 2, none of the
Warrantors shall plead against such Claim the provisions of the Limitation Act 1980 or any
other statute or rule of law relating to limitation of time in which an action can be
brought or Claim made, provided that this Clause 19 is without prejudice to any express
provision of this agreement regarding time limits for notifying or making Claims.

	20.	 	COUNTERPARTS

This agreement may be executed in any number of counterparts and by each of the parties on
separate counterparts (by fax or otherwise) each of which when executed and delivered shall
be deemed to be an original, but all the counterparts together shall constitute one and the
same agreement.

	21.	 	LAW AND JURISDICTION

	 	21.1	 	This agreement shall be governed by the jurisdiction of the courts of England
and Wales and construed and governed in accordance with the laws of England
	 
	 	21.2	 	Any and all disputes, controversies or claims arising out of, relating to or in
connection with this agreement, including any question regarding its existence,
validity, scope or termination, shall be finally settled under the Rules of Arbitration
of the International Chamber of Commerce by one arbitrator (“the Arbitrator”) appointed
in accordance with such Rules. The arbitration shall be conducted in the English
language in Geneva, Switzerland. Judgment on any award rendered by the Arbitrator may
be entered in any court having jurisdiction thereof. Each party shall bear its own
costs and expense of such arbitration. The parties shall maintain strict
confidentiality with respect to all aspects of the arbitration and shall not disclose
the fact, conduct or

 

 

Beachcroft Wansbroughs

outcome of the arbitration to any non parties or non participants without the prior
written consent of each party to the arbitration, except to the extent required by
law, applicable regulation or judicial process or to the extent necessary to
recognise, confirm or enforce the final award in the arbitration. In the event
either party is required by law, applicable regulation or judicial process to
disclose any information relating to the arbitration, such party agrees to comply
with the provisions set forth in Clause 9.3 above as if applicable to the
arbitration.

SIGNED by or on behalf of the parties on the date which first appears in this agreement.

 

 

Beachcroft Wansbroughs

SCHEDULE 1

Sellers’ Names, Addresses, Shareholdings and Consideration

	 	 	 	 	 	 	 
	(1)	 	(2)	 	(3)
	Names and Addresses of Sellers	 	Number of Shares	 	Consideration (US$)
	UK THEATRES
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Jeffrey Spector

	 	250,000 A Shares
	 	 	47,754	 
	255 Clifton Drive South
	 	 	 	 	 	 
	St Annes
	 	 	 	 	 	 
	RY8 1HW
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Mitchell Clifford Michael Cartwright

	 	1,300,000 A Shares and
	 	 	253,094	 
	16 Clipper Island

	 	25,000 C Shares	 	 	 	 
	Sandyport
	 	 	 	 	 	 
	Nassau
	 	 	 	 	 	 
	Bahamas
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Janette Erskine

	 	790,625 A Shares
	 	 	151,021	 
	294 Newton Drive
	 	 	 	 	 	 
	Blackpool
	 	 	 	 	 	 
	Lancashire
	 	 	 	 	 	 
	FY3 8PZ
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Malcolm Johnson *

	 	290,625 A Shares and
	 	 	103,267	 
	121 Blackpool Road

	 	250,000 B Shares	 	 	 	 
	Lytham St Annes
	 	 	 	 	 	 
	FY8 4AA
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	David Brown *

	 	50,000 C Shares
	 	 	9,551	 
	9 Dawson Road
	 	 	 	 	 	 
	Lytham St Annes
	 	 	 	 	 	 
	FY8 3AJ
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Sam Drury *

	 	25,000 B Shares and
	 	 	6,367	 
	45 Kilnhouse Lane

	 	8,333 C Shares	 	 	 	 
	Lytham St Annes
	 	 	 	 	 	 
	FY8 3AB
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Wayne Harwood *

	 	8,334 C Shares
	 	 	1,592	 
	1 Ashley Crescent
	 	 	 	 	 	 
	Sidmouth
	 	 	 	 	 	 
	Devon
	 	 	 	 	 	 
	EX10 9UE
	 	 	 	 	 	 

 

 

Beachcroft Wansbroughs

	 	 	 	 	 
	Terry Hennigan *

	 	8,333 C Shares
	 	1,592
	168 Staining Road
	 	 	 	 
	Lancashire
	 	 	 	 
	FY3 0BB
	 	 	 	 
	 
	 	 	 	 
	Phillip Holmes *

	 	50,000 B Shares
	 	9,551
	18 Welburn Walk
	 	 	 	 
	Thorton Cleveleys
	 	 	 	 
	FY5 5QA
	 	 	 	 
	 
	 	 	 	 
	Lonecroft plc *

	 	200,000 B Shares
	 	38,203
	26-27 Ribblesdale Place
	 	 	 	 
	Preston
	 	 	 	 
	PR1 3NA
	 	 	 	 
	 
	 	 	 	 
	Gillian Power

	 	50,000 B Shares
	 	9,551
	37 Cheddar Avenue
	 	 	 	 
	Blackpool
	 	 	 	 
	FY4 2LQ
	 	 	 	 
	 
	 	 	 	 
	Steven Richardson *

	 	25,000 B Shares
	 	4,775
	8 Hawthorne Road
	 	 	 	 
	Thornton Cleveleys
	 	 	 	 
	FY5 5DH
	 	 	 	 
	 
	 	 	 	 
	Jeffrey Tennant

	 	50,000 B Shares
	 	9,551
	6 Ulverston Crescent
	 	 	 	 
	Lytham St Annes
	 	 	 	 
	FY8 3RZ
	 	 	 	 
	 
	 	 	 	 
	Bradley White *

	 	500,000 B Shares
	 	95,507
	6 Fieldway
	 	 	 	 
	Lytham St Annes
	 	 	 	 
	FY8 3BL
	 	 	 	 
	 
	 	 	 	 
	Elaine Patrice Spector

	 	150,000 B Shares
	 	28,652
	255 Clifton Drive South
	 	 	 	 
	Lytham St Annes
	 	 	 	 
	FY8 1HW
	 	 	 	 
	 
	 	 	 	 
	Geneva Cartwright

	 	968,750 A Shares
	 	185,045
	16 Clipper Island
	 	 	 	 
	Sandport
	 	 	 	 
	Nassau
	 	 	 	 
	Bahamas
	 	 	 	 

 

 

Beachcroft Wansbroughs

	 	 	 	 	 
	WWW.CO.UK LIMITED
	 	 	 	 
	 
	 	 	 	 
	Janette Erskine

	 	1000 A Shares
	 	59,661
	294 Newton Drive
	 	 	 	 
	Blackpool
	 	 	 	 
	Lancashire
	 	 	 	 
	FY3 8PZ
	 	 	 	 
	 
	 	 	 	 
	David Brown *

	 	300 B Shares
	 	17,898
	9 Dawson Road
	 	 	 	 
	Lytham St Annes
	 	 	 	 
	FY8 3AJ
	 	 	 	 
	 
	 	 	 	 
	Sam Drury *

	 	50 B Shares
	 	2,983
	45 Kilnhouse Lane
	 	 	 	 
	Lytham St Annes
	 	 	 	 
	FY8 3AB
	 	 	 	 
	 
	 	 	 	 
	Phillip Holmes *

	 	100 B Shares
	 	5,966
	18 Welburn Walk
	 	 	 	 
	Thornton Cleveleys
	 	 	 	 
	FY5 5QA
	 	 	 	 
	 
	 	 	 	 
	Clifford House *

	 	501 B Shares
	 	29,890
	34-36 Orchard Road
	 	 	 	 
	Lytham St Annes
	 	 	 	 
	FY8 1PF
	 	 	 	 
	 
	 	 	 	 
	Lonecroft plc *

	 	100 B Shares
	 	5,966
	26-27 Ribblesdale Place
	 	 	 	 
	Preston
	 	 	 	 
	PR1 3NA
	 	 	 	 
	 
	 	 	 	 
	Mitchell Clifford Michael Cartwright

	 	1643 A Shares and	 	 
	16 Clipper Island

	 	50 B Shares
	 	101,006
	Sandyport
	 	 	 	 
	Nassau
	 	 	 	 
	Bahamas
	 	 	 	 
	 
	 	 	 	 
	Gillian Power

	 	100 B Shares
	 	5,966
	37 Cheddar Avenue
	 	 	 	 
	Blackpool
	 	 	 	 
	FY4 2LQ
	 	 	 	 
	 
	 	 	 	 
	Jeffrey Spector

	 	1644 A Shares
	 	98,082
	255 Clifton Drive South
	 	 	 	 
	Lytham St Annes
	 	 	 	 
	FY8 1HW
	 	 	 	 

 

 

Beachcroft Wansbroughs

	 	 	 	 	 
	Jeffrey Tennant

	 	125 B Shares
	 	7,458
	6 Ulverston Crescent
	 	 	 	 
	Lytham St Annes
	 	 	 	 
	FY8 3RZ
	 	 	 	 
	 
	 	 	 	 
	Bradley White *

	 	1000 B Shares
	 	59,661
	6 Fieldway
	 	 	 	 
	Lytham St Annes
	 	 	 	 
	FY8 3BL
	 	 	 	 
	 
	 	 	 	 
	Elaine Patrice Spector

	 	100 B Shares
	 	5,966
	255 Clifton Drive South
	 	 	 	 
	St Annes-on-Sea
	 	 	 	 
	Lancashire
	 	 	 	 
	FY8 1HW
	 	 	 	 
	 
	 	 	 	 
	UK Theatres Online Limited

	 	3287 A Shares
	 	NIL

	34-36 Orchard Road
	 	 	 	 
	Lytham St Annes
	 	 	 	 
	Lancashire
	 	 	 	 
	FY8 1PF
	 	 	 	 
	 
	 	 	 	 
	SPRING LEISURE LIMITED
	 	 	 	 
	 
	 	 	 	 
	Janette Erskine

	 	174 A Shares
	 	45,804
	294 Newton Drive
	 	 	 	 
	Blackpool
	 	 	 	 
	Lancashire
	 	 	 	 
	FY3 8PZ
	 	 	 	 
	 
	 	 	 	 
	David Brown *

	 	100 B Shares
	 	26,324
	9 Dawson Road
	 	 	 	 
	Lytham St Annes
	 	 	 	 
	FY8 3AJ
	 	 	 	 
	 
	 	 	 	 
	Malcolm Johnson *

	 	10 B Shares
	 	2,632
	121 Blackpool Road
	 	 	 	 
	Lytham St Annes
	 	 	 	 
	FY8 4AA
	 	 	 	 
	 
	 	 	 	 
	Mitchell Clifford Michael Cartwright

	 	476 A Shares
	 	125,303
	16 Clipper Island
	 	 	 	 
	Sandyport
	 	 	 	 
	Nassau
	 	 	 	 
	Bahamas
	 	 	 	 
	 
	 	 	 	 
	Jeffrey Spector

	 	25 A Shares
	 	6,581
	255 Clifton Drive South
	 	 	 	 
	Lytham St Annes
	 	 	 	 
	FY8 1HW
	 	 	 	 

 

 

Beachcroft Wansbroughs

	 	 	 	 	 	 	 	 	 
	Elaine Patrice Spector

	 	25 A Shares
	 	 	6,581	 	 	 
	255 Clifton Drive South
	 	 	 	 	 	 	 	 
	Lytham St Annes
	 	 	 	 	 	 	 	 
	FY8 1HW
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Julian Latham *

	 	100 B Shares
	 	 	26,324	 	 	 
	89 Forest Drive
	 	 	 	 	 	 	 	 
	Lytham St Annes
	 	 	 	 	 	 	 	 
	Lancashire
	 	 	 	 	 	 	 	 
	FY8 4PS
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	David Bryan Williams *

	 	25 B Shares
	 	 	6,581	 	 	 
	29 Holgate
	 	 	 	 	 	 	 	 
	Blackpool
	 	 	 	 	 	 	 	 
	Lancashire
	 	 	 	 	 	 	 	 
	FY4 5BG
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Jeanette Naylor )

	 	25 B Shares
	 	 	6,581	 	 	 
	 
	 	 	 	 	 	 	 	 
	UK Theatres On Line Limited

	 	40 B Shares
	 	NIL
	 	 
	34-36 Orchard Road
	 	 	 	 	 	 	 	 
	Lytham St Annes
	 	 	 	 	 	 	 	 
	Lancashire
	 	 	 	 	 	 	 	 
	FY48 1PF
	 	 	 	 	 	 	 	 

 

 

Beachcroft Wansbroughs

SCHEDULE 2

Part 1

UK Theatres Online Limited

	 	 	 	 	 
	1.

	 	Registered number:
	 	03850910
	 
	 	 	 	 
	2.

	 	Previous company names:
	 	None
	 
	 	 	 	 
	3.

	 	Registered office:
	 	34-36 Orchard Road, Lytham St. Annes,
Lancashire, FY8 1PF
	 
	 	 	 	 
	4.

	 	Date and place of incorporation:
	 	30/09/1999 – United Kingdom
	 
	 	 	 	 
	5.

	 	Authorised share capital:
	 	£50,000 divided into 3,600,000 Ordinary A Shares
of £0.01 each, 1,300,000 Ordinary B Shares of
£0.01 each, 100,000 Ordinary C Shares of £0.01
each
	 
	 	 	 	 
	6.

	 	Issued share capital:
	 	3,600,000 Ordinary A Shares of £0.01 each,
1,300,000 Ordinary B Shares of £0.01 each and
100,000 Ordinary C Shares of £0.01 each
	 
	 	 	 	 
	7.

	 	Shareholders:	 	 
	 
	 	 	 	 
	 

	 	Shareholders
	 	No of shares
	 
	 	 	 	 
	 

	 	Janette Erskine
	 	790,625 A Shares
	 
	 	 	 	 
	 

	 	David Brown
	 	50,000 C Shares
	 
	 	 	 	 
	 

	 	Sam Drury
	 	8,333 C Shares
	 
	 	 	 	 
	 

	 	Sam Drury
	 	25,000 B Shares
	 
	 	 	 	 
	 

	 	Wayne Harwood
	 	8334 C Shares
	 
	 	 	 	 
	 

	 	Terry Hennigan
	 	8333 C Shares
	 
	 	 	 	 
	 

	 	Phillip Holmes
	 	50,000 B Shares
	 
	 	 	 	 
	 

	 	Malcolm Johnson
	 	250,000 B Shares
	 
	 	 	 	 
	 

	 	Malcolm Johnson
	 	290,625 A Shares
	 
	 	 	 	 
	 

	 	Lonecroft plc
	 	200,000 B Shares
	 
	 	 	 	 
	 

	 	Mitchell Clifford Michael Cartwright
	 	1,300,000 A Shares
	 
	 	 	 	 
	 

	 	Mitchell Clifford Michael Cartwright
	 	25,000 C Shares
	 
	 	 	 	 
	 

	 	Gillian Power
	 	50,000 B Shares
	 
	 	 	 	 
	 

	 	Steven Richardson
	 	25,000 B Shares

 

 

Beachcroft Wansbroughs

	 	 	 	 	 
	 

	 	Jeffrey Spector
	 	250,000 A Shares
	 
	 	 	 	 
	 

	 	Jeffrey Tennant
	 	50,000 B Shares
	 
	 	 	 	 
	 

	 	Bradley White
	 	500,000 B Shares
	 
	 	 	 	 
	 

	 	Elaine Patrice Spector
	 	150,000 B Shares
	 
	 	 	 	 
	 

	 	Geneva Cartwright
	 	968,750 A Shares
	 
	 	 	 	 
	8.

	 	Loan capital:
	 	Nil
	 
	 	 	 	 
	 

	 	Directors:	 	 
	 
	 	 	 	 
	9.

	 	Name
	 	Address
	 
	 	 	 	 
	 

	 	Janette Louise Erskine
	 	294 Newton Drive, Blackpool, Lancashire, FY3 8PZ.
	 
	 	 	 	 
	 

	 	Jeffrey Spector
	 	255 Clifton Drive South, St Annes On Sea,

Lancashire, FY8 1HW
	 
	 	 	 	 
	10.

	 	Secretary	 	 
	 
	 	 	 	 
	 

	 	Janette Louise Erskine
	 	294 Newton Drive, Blackpool, Lancashire, FY3 8PZ.
	 
	 	 	 	 
	11.

	 	Accounting reference date:
	 	31 March
	 
	 	 	 	 
	12.

	 	Charges:
	 	None

 

 

Beachcroft Wansbroughs

Part 2

WWW.CO.UK Limited

	 	 	 	 	 
	1.

	 	Registered number:
	 	04285425
	 
	 	 	 	 
	2.

	 	Previous company names:
	 	Tropictravel Limited
	 
	 	 	 	 
	3.

	 	Registered office:
	 	34-36 Orchard Road, Lytham St. Annes,
Lancashire, FY8 1PF
	 
	 	 	 	 
	4.

	 	Date and place of incorporation:
	 	11/09/2001 – United Kingdom
	 
	 	 	 	 
	5.

	 	Authorised share capital:
	 	£1,000 divided into 90,000 Ordinary Shares of
£0.01 each, 7,574 A Ordinary Shares of £0.01
each, 2,426 B Ordinary Shares of £0.01 each
	 
	 	 	 	 
	6.

	 	Issued share capital:
	 	7,574 A Ordinary Shares of £0.01 each, 2,426 B
Ordinary Shares of £0.01 each
	 
	 	 	 	 
	7.

	 	Shareholders:	 	 
	 
	 	 	 	 
	 

	 	Shareholders
	 	No of shares
	 
	 	 	 	 
	 

	 	Janette Erskine
	 	1000 A Shares
	 
	 	 	 	 
	 

	 	David Brown
	 	300 B Shares
	 
	 	 	 	 
	 

	 	Sam Drury
	 	50 B Shares
	 
	 	 	 	 
	 

	 	Phillip Holmes
	 	100 B Shares
	 
	 	 	 	 
	 

	 	Clifford House
	 	501 B Shares
	 
	 	 	 	 
	 

	 	Lonecroft plc
	 	100 B Shares
	 
	 	 	 	 
	 

	 	Mitchell Clifford Michael Cartwright
	 	1643 A Shares
	 
	 	 	 	 
	 

	 	Mitchell Clifford Michael Cartwright
	 	50 B Shares
	 
	 	 	 	 
	 

	 	
	 	100 B Shares
	 
	 	 	 	 
	 

	 	Gillian Power
	 	1644 A Shares
	 
	 	 	 	 
	 

	 	Jeffrey Spector
	 	125 B Shares
	 
	 	 	 	 
	 

	 	Jeffrey Tennant
	 	1000 B Shares
	 
	 	 	 	 
	 

	 	Bradley White
	 	100 B Shares
	 
	 	 	 	 
	 

	 	Elaine Patrice Spector
	 	3287 A Shares
	 
	 
	 	UK Theatres Online Limited	 	 
	 
	8.

	 	Loan capital:
	 	Nil

 

 

Beachcroft Wansbroughs

	 	 	 	 	 
	 
	9.

	 	Directors:	 	 
	 
	 	 	 	 
	 

	 	Name
	 	Address
	 
	 

	 	Jeffrey Spector
	 	255 Clifton Drive South, St Annes On Sea, 
Lancashire, FY8 1HW
	 
	 	 	 	 
	10.

	 	Secretary

	 
	 

	 	Janette Louise Erskine
	 	294 Newton Drive, Blackpool, Lancashire, FY3 8PZ.
	 
	 	 	 	 
	11.

	 	Accounting reference date:
	 	31 March
	 
	 	 	 	 
	12.

	 	Charges:
	 	None

 

 

Beachcroft Wansbroughs

Part 3

Spring Leisure Limited

	 	 	 	 	 
	1.

	 	Registered number:
	 	05102050
	 
	 	 	 	 
	2.

	 	Previous company names:
	 	None
	 
	 	 	 	 
	3.

	 	Registered office:
	 	34-36 Orchard Road, Lytham St. Annes,
Lancashire, FY8 1PF
	 
	 	 	 	 
	4.

	 	Date and place of incorporation:
	 	14/04/2004 – United Kingdom
	 
	 	 	 	 
	5.

	 	Authorised share capital:
	 	£1,000 divided into 1,000 Ordinary Shares of
£1.00 each
	 
	 	 	 	 
	6.

	 	Issued share capital:
	 	700 Ordinary A Shares of £1.00 each, 300
Ordinary B Shares of £1.00 each
	 
	 	 	 	 
	7.

	 	Shareholders:	 	 
	 
	 	 	 	 
	 

	 	Shareholders
	 	No of shares
	 
	 	 	 	 
	 

	 	Janette Erskine
	 	174 A Shares
	 
	 	 	 	 
	 

	 	David Brown
	 	100 B Shares
	 
	 	 	 	 
	 

	 	Malcolm Johnson
	 	10 B Shares
	 
	 	 	 	 
	 

	 	Mitchell Clifford Michael Cartwright
	 	476 A Shares
	 
	 	 	 	 
	 

	 	Jeffrey Spector
	 	25 A Shares
	 
	 	 	 	 
	 

	 	Elaine Patrice Spector
	 	25 A Shares
	 
	 	 	 	 
	 

	 	Julian Latham
	 	100 B Shares
	 
	 	 	 	 
	 

	 	David Bryan Williams
	 	25 B Shares
	 
	 	 	 	 
	 

	 	Jeanette Naylor
	 	25 B Shares
	 
	 	 	 	 
	 

	 	UK Theatres On Line Limited
	 	40 B Shares
	 
	 	 	 	 
	8.

	 	Loan capital:
	 	Nil
	 
	 	 	 	 
	9.

	 	Directors:	 	 
	 
	 	 	 	 
	 

	 	Name
	 	Address
	 
	 	 	 	 
	 

	 	Janette Louise Erskine
	 	294 Newton Drive, Blackpool, Lancashire, FY3 8PZ.
	 
	 	 	 	 
	 

	 	Jeffrey Spector
	 	255 Clifton Drive South, St Annes On Sea,

Lancashire, FY8 1HW
	 
	 	 	 	 
	10.

	 	Secretary	 	 

 

 

Beachcroft Wansbroughs

	 	 	 	 	 
	 

	 	Janette Louise Erskine
	 	294 Newton Drive, Blackpool, Lancashire, FY3 8PZ.
	 
	 	 	 	 
	11.

	 	Accounting reference date:
	 	31 March
	 
	 	 	 	 
	12.

	 	Charges:
	 	None

 

 

Beachcroft Wansbroughs

SCHEDULE 3

Warranties

	1.	 	SHARE CAPITAL, SUBSIDIARIES AND JOINT VENTURES
	 
	 	 	Ownership of Shares

	 	1.1	 	Each Seller is the legal and beneficial owner of, and is entitled to sell with
full title guarantee on the terms of this agreement without the consent of any third
party, the number of Shares set out opposite his name in Schedule 1 free from
Encumbrances.
	 
	 	1.2	 	The Shares constitute the whole of the Company’s allotted and issued share
capital and are fully paid or credited as fully paid.
	 
	 	1.3	 	There is no Encumbrance on, over or affecting any of unissued shares,
debentures or other securities of the Company and no person has the right (whether
exercisable now or in the future and whether contingent or not) to call for the issue,
allotment, conversion, redemption, sale or transfer of any shares, debentures or other
securities of the Company.

Joint Ventures

	 	1.4	 	The Company is not, and has not agreed to become a member of any partnership or
other unincorporated association, joint venture, or consortium (other than a recognised
trade association) or other profit or income sharing arrangement.

Branch

	 	1.5	 	The Company does not have any branch, agency or place of business outside the
United Kingdom and does not use its letterhead, books or vehicles or otherwise carry on
its business under any name other than its corporate name.

	2.	 	CAPACITY
	 
	 	 	Authority

	 	2.1	 	Each Seller has the necessary power and authority and has taken all necessary
action to enter into and perform this agreement and each of the documents to be
executed at or before Completion in accordance with this agreement which will, when
executed, become binding and enforceable obligations of the Sellers.
	 
	 	2.2	 	The Sellers will not, by virtue of entering into or performing any of his
duties under this agreement or any other agreement made or to be made between the
Sellers and the Buyer, be in breach of any express or implied terms of any contract or
of any other obligation binding upon him.

Effect of sale

	 	2.3	 	The execution or the performance of this agreement or any document to be
executed at or before Completion in accordance with this agreement will not so far as
the Warrantors are aware:-

	 	2.3.1	 	result in a breach of, conflict with, or give rise to an event
of default under, any agreement or arrangement to which the Company is party or
by which the Company is bound;

 

 

Beachcroft Wansbroughs

	 	2.3.2	 	relieve any other party to an agreement or arrangement with
the Company of its obligations or enable it to terminate the agreement or
arrangement;
	 
	 	2.3.3	 	result in a breach of a Licence, an undertaking to, or order
of, any court or governmental agency or regulatory body; or
	 
	 	2.3.4	 	result in the Company losing the benefit of a Licence.

	 	2.4	 	The Company has the necessary power and authority to operate its business as
conducted at the date of this agreement.

	3.	 	INFORMATION, RECORDS AND DOCUMENTS
	 
	 	 	Written Information and Material Disclosure

	 	3.1	 	The information contained in Schedule 2 of this agreement is true and accurate
in all respects and not misleading.
	 
	 	3.2	 	There is attached to the Disclosure Letter a true, complete and accurate copy of the:

	 	3.2.1	 	Management Accounts; and
	 
	 	3.2.2	 	Information which is sufficient to enable the Buyer to know
how much money is and will become due and payable to the Company by its
customers from time to time under all advertising agreements which exist as at
11 November 2005 a copy of which is on a CD-ROM which has been initialled by
the Buyer and Jeffrey Spector and is attached to the Disclosure Letter.

Storage of records

	 	3.3	 	The Company does not have any of its records, systems, or data recorded or
operated or otherwise wholly or partly dependent on, or held by, any means (including
any electronic, mechanical or photographic process whether computerised or not) which
(including all means of access to it and from it) are not under the exclusive ownership
and direct control of the Company.

Possession of Documents

	 	3.4	 	All title deeds relating to the assets of the Company and an executed copy of
all agreements to which the Company is a party or by which it is bound and the original
copies of all other documents which are owned by, or which ought to be in the
possession of, the Company, are in the possession or under the control of the Company.

	4.	 	MANAGEMENT ACCOUNTS AND STATUTORY ACCOUNTS AND RECORDS
	 
	 	 	Accuracy of the Management Accounts

	 	4.1	 	The Management Accounts have been prepared with due care and attention (without
the benefit of an audit) and fairly represent the state of the Company’s affairs and of
its assets and liabilities as at, and of the profits and losses of the Company for the
financial period ended on, the Management Accounts Date and have been prepared using
practices and policies consistent with those utilised in the preparation of Management
Accounts during the previous three years. The deferred revenue and accounts receivable
calculations included in the Management Accounts have in all material respects been
prepared in accordance with UK generally accepted accounting principles save that no
provision is made for corporation tax.

 

 

Beachcroft Wansbroughs

Books and Records

	 	4.2	 	The Company’s accounts, books, ledgers, financial and other records are in its
possession or under its control, up-to-date and contain a materially accurate record of
all matters required to be entered in them by the Act, accounting practice and other
relevant legislation.

Events since the Management Accounts Date

	 	4.3	 	Since the Management Accounts Date:-

	 	4.3.1	 	the business of the Company has been carried on in the
ordinary and usual course and in the same manner (including nature and scope)
as in the financial period ended on the Management Accounts Date so as to
maintain the business as a going concern;
	 
	 	4.3.2	 	no share or loan capital of the Company has been, or agreed to
be, issued, allotted, redeemed, purchased or repaid by the Company;
	 
	 	4.3.3	 	no debt has been subordinated, written down or written off,
factored or assigned, and the Company has not agreed to do any of the
foregoing;
	 
	 	4.3.4	 	no capital expenditure has been, or agreed to be, incurred and
no commitments of a capital nature have been, or agreed to be, entered into
exceeding £5,000 in total by the Company;
	 
	 	4.3.5	 	no resolution of the shareholders of the Company has been
passed;
	 
	 	4.3.6	 	the Company has not experienced any material deterioration in
its financial position or turnover or suffered any diminution of its assets by
the wrongful act of any person and the value of its net assets is not
materially less than the value of its net assets at the Management Accounts
Date and the Company has not had its business, profitability or prospects
materially and adversely affected by the loss of any important customer or
source of supply or by any abnormal factor not affecting similar businesses to
a like extent and so far as the Warrantors are aware (but without having made
any enquiry of third parties except Employees) there are no facts which are
likely to give rise to any such effects. For the purpose of this clause
“material” shall mean by a factor of 10% or more;
	 
	 	4.3.7	 	the Company has not acquired or disposed of or agreed to
acquire or dispose of any assets or assumed or incurred or agreed to assume or
incur any material liabilities (actual or contingent) otherwise than in the
ordinary course of business;
	 
	 	4.3.8	 	the Company has not declared, made or paid any dividend, bonus
or other distributions of capital or income (whether a qualifying distributions
or otherwise) and (excluding fluctuations in overdrawn current accounts with
bankers) no loan or loan capital of the Company has been repaid in whole or in
part or has become due or is liable to be declared due by reason of either
service of a notice or lapse of time or otherwise howsoever;
	 
	 	4.3.9	 	the Company has not carried out or entered into any
transaction and no other event has occurred in consequence of which (whether
alone or together with any one or more transactions or events occurring before,
on or after the date of this agreement) any liability of the Company to
Taxation has arisen or will arise (or would have arisen or would or might arise
but for the availability of any relief, allowance, deduction or credit) other
than corporation tax on the actual income (not chargeable gains or deemed
income) of the Company

 

 

Beachcroft Wansbroughs

arising from transactions entered into in the ordinary course of business,
income tax under the PAYE system and national insurance and social security
contributions in respect of persons employed by it since the Management
Accounts Date and VAT in respect of taxable supplies made by it in the
ordinary course of business since the Management Accounts Date;

	 	4.3.10	 	the Company has not borrowed or raised any money or taken any financial
facility (except such short term borrowings from bankers as are within the
amount of any overdraft facility which was available to the Company at the
Management Accounts Date) or since the Management Accounts Date renegotiated or
received any notice from any banker that such banker wishes to renegotiate any
overdraft facility available to the Company at the Management Accounts Date;
	 
	 	4.3.11	 	the Company has not made any change to its accounting reference date and no
accounting period of the Company has ended since the Management Accounts Date
	 
	 	4.3.12	 	the Company has not made a payment or incurred an obligation to make a
payment which will not be deductible in computing trading profits for the
purposes of corporation tax or as a management expense of the Company; and
	 
	 	4.3.13	 	the Company (including any class of its members) has not passed any
resolution whether in general meeting or otherwise.

	 	4.4	 	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.
	 
	 	4.5	 	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.
	 
	 	4.6	 	The Accounts show a true and fair view of the commitments and financial
position and affairs of the Company as at the Balance Sheet Date and of the profit and
loss of the Company for the financial year ended on that date.
	 
	 	4.7	 	The Accounts contain either provision adequate to cover, or full particulars in
notes of, all Taxation and other liabilities (whether quantified, contingent, disputed
or otherwise) of the Company as at the Balance Sheet Date.
	 
	 	4.8	 	The Accounts have been filed and laid before the Company in general meeting in
accordance with the requirements of the Companies Acts.
	 
	 	4.9	 	The Accounts have been prepared on a basis consistent with the audited accounts
of, as the case may be, the Company for the two prior accounting periods without any
change in accounting policies used.

	5.	 	FINANCE
	 
	 	 	Bank Borrowing

	 	5.1	 	The Company is not the beneficiary of any loan facilities from its bankers.

Repayment of borrowings

 

 

Beachcroft Wansbroughs

	 	5.2	 	Full details of all the Company’s Indebtedness as at 11 November 2005 set out
in the Disclosure Letter, and all of such Indebtedness shall be satisfied in full on or
prior to Completion

Bank Statement

	 	5.3	 	A statement produced from www.yorkshirebank.co.uk as to the credit or debit
balances of the Company’s bank accounts as at a date not more than one Business Day
before the date of this agreement has been supplied to the Buyer and the Company has no
other bank or deposit account (whether in credit or overdrawn) which is omitted from
such statement and all payments out of, and receipts in, such accounts since the date
of such statement are Disclosed in the Disclosure Letter.

Related Party Transactions

	 	5.4	 	Full details of all Indebtedness of any officer, director or employee of the
Company in favour of the Company are set out in the Disclosure Letter, and all of such
Indebtedness shall be satisfied in full on or prior to Completion. In addition, the
purchases by certain of the Sellers from the Company of the investments referred to in
the Disclosure Letter will be completed on or prior to Completion.

Creation of charges

	 	5.5	 	The Company has not created, or agreed to create, any Encumbrance or given, or
agreed to give, any guarantee, suretyship, indemnity or similar encumbrance or
agreement for the postponement of debt or (except in the ordinary course of business)
for lien or set-off.

Accounts

	 	5.6	 	There is contained in the Disclosure Bundle a true, complete and accurate copy
of the Accounts.

	6.	 	ASSETS
	 
	 	 	Title

	 	6.1	 	All assets included in the Management Accounts and all assets owned or used by
the Company are:-

	 	6.1.1	 	legally and beneficially owned by the Company free from any Encumbrance;
	 
	 	6.1.2	 	in the possession or under the exclusive control of the Company;
	 
	 	6.1.3	 	situated in the United Kingdom; and
	 
	 	6.1.4	 	where subject to a requirement for a Licence, are duly
licensed or registered in the sole name of the Company.

	 	6.2	 	The Company has not received any sum, property or benefit, the payment or
transfer of which is liable to be avoided, or which is liable to be recovered from it
under any rule of law and does not hold any sum, property or right as trustee or
constructive trustee.

Asset registers

 

 

Beachcroft Wansbroughs

	 	6.3	 	The Disclosure Bundle includes a reasonably accurate list of all plant,
equipment and vehicles and computer hardware and software owned by the Company.
	 
	 	6.4	 	So far as the Warrantors are aware all plasma screens owned by the Company are
in a good and safe condition and in reasonable working order, fair wear and tear
excepted.

Maintenance

	 	6.5	 	Maintenance contracts are in full force and effect in respect of all assets of
the Company which the Company is obliged to maintain or repair under any hire purchase,
leasing, rental, insurance or other agreement.

Assets sufficient for business

	 	6.6	 	The assets owned or used by the Company comprise all the assets which in the
reasonable opinion of the Warrantors are reasonably necessary for the continuation of
the business of the Company as currently carried on.

Leased assets

	 	6.7	 	The Company is not is a party to or liable under a lease or hire, hire
purchase, credit sale or conditional sale, agreement.

Trade Debtors

	 	6.7.1	 	Save in accordance with the general provision usually made by
the Company, none of the debts which are shown in the Management Accounts, or
which have arisen subsequently have been released such that the debtor has paid
less than the full amount of his debt and so far as the Warrantors are aware
92% of such debts will in the normal course of collection realise their full
value as included in the Management Accounts or books of the Company.
	 
	 	6.7.2	 	No single debtor, taken together with any connected person of
that debtor, owes to the Company an amount or amounts in aggregate greater than
ten per cent of the total of all debts owing to the Company.

	 	6.8	 	No single debtor, taken together with any connected person of that debtor as at
30 September 2005 owes to the Company an amount or amounts in aggregate greater than
ten per cent of the total of all debts owing to the Company.

Product Liability

	 	6.9	 	The Company has not received notice of any claim which remains outstanding
alleging any defect in, or lack of fitness for purpose of, any goods supplied by the
Company, nor so far as the Warrantors are aware are there any circumstances which could
give rise to any such claim.
	 
	 	6.10	 	The Company has not given any guarantee or warranty or made any representation
in respect of goods or services supplied or contracted to be supplied by it save for
any warranty or guarantee implied by law and (save as aforesaid) has not accepted any
obligation which could give rise to any liability after any such goods or services have
been supplied by it.

 

 

Beachcroft Wansbroughs

	7.	 	INSURANCE
	 
	 	 	Policies

	 	7.1	 	The Company is party to no policies of insurance other than those listed in the
Disclosure Letter.
	 
	 	7.2	 	The Company has insurance in respect of all risks which a reasonable and
prudent owner of the business carried on by the Company in the ordinary course would
have.

Claims

	 	7.3	 	Since incorporation, no claims have been made by the Company on its insurers
nor so far as the Warrantors are aware, have any circumstances arisen which may give
rise to any claim, which (in either case) could, so far as, the Warrantors are aware,
have the effect of causing future premiums to be higher than would otherwise be the
case.

	8.	 	CONTRACTS
	 
	 	 	General

	 	8.1	 	Each of the contracts with advertisers is in one of the various formats as
contained in the Disclosure Bundle.
	 
	 	8.2	 	There is not outstanding any guarantee, indemnity or suretyship given by or for
the benefit of the Company.
	 
	 	8.3	 	There are no contracts which are both material and unusual whether as capital
commitments or otherwise which are currently binding upon the Company, nor so far as
the Warrantors are aware is the Company a party to any contract which contains any
onerous provision which is outside the ordinary course of business and no expenses or
liabilities of a material amount have been incurred before the date of this agreement
by the Company otherwise than for the purpose of the Company’s business.
	 
	 	8.4	 	The Company is not a party to or subject to any agreement, transaction,
obligation, commitment, understanding, arrangement or liability which:

	 	8.4.1	 	cannot readily be fulfilled or performed by the Company on
time and without undue or unusual expenditure of money and effort;
	 
	 	8.4.2	 	involves or is likely to involve obligations, restrictions,
expenditures or receipts not in the ordinary course of business and requiring
an aggregate consideration payable by the Company in excess of £5,000;
	 
	 	8.4.3	 	involves or is likely to involve the supply of goods or
services by or to the Company the aggregate sales value of which will represent
in excess of five per cent of the turnover of the Company for the year ended on
the Management Accounts Date;
	 
	 	8.4.4	 	a contract for services (other than contracts for services
provided to the Company in the ordinary course of business which are freely
terminable by the Company without penalty on less than 30 days’ notice),
including any professional services contracts.
	 
	 	8.4.5	 	requires the Company to pay any commission, finder’s fee,
royalty or the like; or

 

 

Beachcroft Wansbroughs

	 	8.4.6	 	is in any way otherwise than in the ordinary and proper course
of the Company’s business.

Breach of Contract

	 	8.5	 	So far as the Warrantors are aware there are no circumstances likely to give
rise to a default by the Company or by the other parties under any revenue generating
contract such that the consequences of any such default to the Company (including any
refunds or other damages payable by the Company), when aggregated with the uncollected
debt referenced in Clause 6.7.1, would cause the warranty given by the Warrantors in
Clause 6.7.1 to be false as of the date hereof.

Creditors

	 	8.6	 	The Disclosure Letter includes an accurate and complete list of all creditors
of the Company as at 11 November 2005. The Company has paid all its creditors within
the credit periods normally applied by the Company to such creditors (and no earlier)
and no debt owing by the Company has been due for more than 6 weeks.

Customers and suppliers

	 	8.7	 	During the two months preceding the date of this agreement there has been no
substantial change in the basis or terms on which any person (including any supplier)
is prepared to enter into contracts or do business with the Company and so far as the
Warrantors are aware no such change is likely.
	 
	 	8.8	 	No person who is, or who has during the last six months been, a media host of
the Company has ceased, or has threatened or indicated to the Company an intention to
terminate its site contract with the Company.
	 
	 	8.9	 	So far as the Warrantors are aware having made no enquiry the decisions of
customers and suppliers to continue to do business with the Company will not be
prejudicially affected by the execution or completion of this agreement or a document
to be executed at or before Completion in accordance with its terms.

	9.	 	INSIDER CONTRACTS

	 	9.1	 	The Company has not since incorporation been a party to any material agreement
or arrangement (whether legally enforceable or not):-

	 	9.1.1	 	which is or was not of an entirely arm’s length nature; and
	 
	 	9.1.2	 	in which any Seller or any connected person of any of them is
or was directly or indirectly interested.

	 	9.2	 	None of the Company’s assets (including the benefit of any licences or
agreements) have been acquired for a consideration otherwise than for its market value
at the date of such acquisition.
	 
	 	9.3	 	There are no debts (whether or not due for payment and including contingent
liabilities) or unfulfilled obligations (present or future, actual or contingent) owing
between the Company and any Seller or any director or former director of the Company or
any connected person of any of them.
	 
	 	9.4	 	So far as the Warrantors are aware there is no claim or circumstance which may
give rise to a claim against the Company by any director or former director of the
Company or any connected person of any of them on any account whatsoever.

Other interests of the Warrantors

 

 

Beachcroft Wansbroughs

	 	9.5	 	None of the Warrantors nor any connected person of any of the Warrantors have a
direct or indirect interest in any person (other than the Company or Cinemasonline
Limited) or any intellectual property rights which is or is likely to be or become,
competitive with the business of the Company as the beneficial owner of any class of
securities of any company listed on a recognised investment exchange (as defined in the
Financial Services and Markets Act 2000) and in respect of which each Warrantor or such
person is beneficially interested in less than three per cent of all the issued
securities of that class).

	10.	 	LITIGATION
	 
	 	 	Proceedings

	 	10.1	 	The Company is not currently engaged in any civil, criminal, administrative or
arbitration claim, proceedings or enquiries and has not previously been engaged in any
material civil, criminal administrative or arbitration claim proceedings or enquiries
and, so far as the Warrantors are aware, there are no such actions, suits, proceedings,
claims or enquiries pending or threatened by or against the Company or any director of
the Company or any person for whose acts or defaults the Company may be vicariously
liable and, so far as the Warrantors are aware, there is no matter or fact in existence
which might give rise to the same.
	 
	 	10.2	 	The Company has not given any undertaking to any court or to any third party
arising out of any legal proceedings and the Company is not subject to any outstanding
injunction, order, judgment, decree or arbitral award of any court, tribunal
arbitrator, governmental agency or other regulatory body.
	 
	 	10.3	 	Neither the Company nor any Employee, officer, agent or former officer, agent
or employee of the Company has been convicted of any offence in relation to the
Company, and no Employee or officer has, so far as the Warrantors are aware, been
convicted of any offence which reflects upon his suitability to hold his position or
upon the reputation of the Company.

	11.	 	LEGAL MATTERS
	 
	 	 	Compliance with law

	 	11.1	 	The Company has conducted its business in accordance with its memorandum and
articles of association, all applicable law and regulations of any jurisdiction in
which it carries on business and there has been no violation of, or default with
respect to, any order or judgement of any court, tribunal, governmental agency or
regulatory authority in any jurisdiction which has, or could have, an adverse effect on
the assets or business of the Company.
	 
	 	11.2	 	Due compliance has been made with the provisions of the Act and other legal
requirements in connection with the formation of the Company, the allotment and issue
and purchase of its shares and the conduct of its business and no notice or allegation
has been received that any of the foregoing is incorrect or should be rectified.

Investigations

	 	11.3	 	There is and has been no governmental, regulatory or other investigation,
enquiry or disciplinary action regarding the Company of which the Company has received
notice and none is pending or threatened and to the best of the Warrantors’ knowledge,
information and belief, there are no circumstances which could give rise to such an
investigation, enquiry or action.

Licences

 

 

Beachcroft Wansbroughs

	 	11.4	 	The Company does not require Licences for the proper carrying on of its
business.

Documents filed

	 	11.5	 	All returns, particulars, resolutions and other documents required to be
delivered to the Registrar of Companies by the Company have been properly prepared and
delivered.

Memorandum and Articles of Association

	 	11.6	 	The copy of the memorandum and articles of association of the Company contained
in the statutory books delivered by the Warrantors under Clause 4 is true, complete,
accurate and up-to-date and includes copies of all resolutions or agreements required
by law to be annexed to it and each register and minute book required to be kept by the
Act has been properly kept, is up-to-date and contains a true, accurate and complete
record of the matters which should be dealt with in those books and no notice or
allegation that any of them is incorrect or should be rectified has been received.

Powers of Attorney

	 	11.7	 	The Company has not given any power of attorney which remains in effect nor has
it given any other similar authority which is still outstanding (other than authority
for an Employee to enter into routine trading contracts in the usual course of their
duties).

	12.	 	INSOLVENCY

	 	12.1	 	In relation to the Company:-

	 	12.1.1	 	no resolution has been passed (and no meeting has been convened, and no
written resolution has been circulated with a view to any resolution), no
petition has been presented and no order has been made for administration or
winding up or for the appointment of a receiver or provisional liquidator;
	 
	 	12.1.2	 	no procedure has been commenced, by the Registrar of Companies or any other
person, with a view to striking off under section 652 of the Act;
	 
	 	12.1.3	 	no receiver has been appointed, no Encumbrance has been enforced, and no
floating charge has crystallised on or over any of its assets, and no event has
occurred or will occur by virtue of the execution and performance of this
agreement which would cause, or entitle any person to cause, any of these
things to happen;
	 
	 	12.1.4	 	it has not stopped paying its creditors, is not insolvent, and is not unable
to pay its debts for the purposes of section 123 of the Insolvency Act 1986;
	 
	 	12.1.5	 	there is no unsatisfied judgement or order of any court or tribunal, or award
of any arbitrator, against it;
	 
	 	12.1.6	 	no distress, execution or other process has been levied against any of its
assets;
	 
	 	12.1.7	 	no meeting of its creditors, or any class of them, has been held or summoned,
no proposal has been made for a moratorium, composition or arrangement in
relation to any of its debts, or for a voluntary arrangement under Part 1 of
the Insolvency Act 1986; and
	 
	 	12.1.8	 	no event analogous to any of the above has occurred in any jurisdiction.

 

 

Beachcroft Wansbroughs

	 	12.2	 	In relation to each Seller:-

	 	12.2.1	 	no petition has been presented and no order made for his or her bankruptcy or
for the appointment of a receiver over any of his or her assets;
	 
	 	12.2.2	 	no Encumbrance has been enforced and no distress, execution or other process
has been levied, on or over any of the Shares held by him or her; and
	 
	 	12.2.3	 	no event analogous to any of the above has occurred in any jurisdiction.

	13.	 	INTELLECTUAL PROPERTY

	 	13.1	 	The Company owns or is entitled to use (whether by agreement with Cinemasonline
Limited or otherwise) all Intellectual Property Rights necessary for the operation of,
exploitation by or use by the business of the Company and, so far as the Warrantors are
aware, nothing has been done or omitted to be done by which any Intellectual Property
Right may cease to be valid and (so far as applicable) is enforceable.
	 
	 	13.2	 	Each of those of the Intellectual Property Rights referred to in Warranty 13.1
which have been created by or for the Company and Cinemasonline is:-

	 	13.2.1	 	valid, subsisting and enforceable and, so far as the Warrantors are aware,
nothing has been done or omitted to be done by which it may cease to be valid
and enforceable;
	 
	 	13.2.2	 	solely legally and beneficially owned by, and validly granted to, the Company
free from any lien, licence, encumbrance, restriction on use or disclosure
obligation;
	 
	 	13.2.3	 	used exclusively by the Company; and
	 
	 	13.2.4	 	not, and so far as the Warrantors are aware, will not be, the subject of a
claim, opposition, challenge or attack from a person including, without
limitation, an employee of the Company as to title, subsistence, validity,
enforceability, entitlement or pursuant to sections 40 and 41 of the Patents
Act 1977 or otherwise.

	 	13.3	 	All Confidential Information has been kept secret and (save as required in the
ordinary course of business) not been disclosed to third parties.
	 
	 	13.4	 	There is and has been no civil, criminal, arbitration, administrative or other
proceeding or dispute in any jurisdiction concerning any of the Intellectual Property
Rights referred to in Warranty 13.1 and so far as the Warrantors are aware, no civil,
criminal, arbitration, administrative or other proceedings concerning any of the
Intellectual Property Rights is pending or threatened. So far as the Warrantors are
aware (but without having made any enquiry) no matter exists which might give rise to a
proceeding of that type.
	 
	 	13.5	 	The Company does not use on its letterhead, books, vehicles or products or
otherwise carry on its business under any name other than its corporate name.

 

 

Beachcroft Wansbroughs

	14.	 	INFORMATION TECHNOLOGY

For the purposes of the following Warranties in this paragraph 14 “Computers” and “Computer
Systems” includes all hardware, firmware, peripherals, communication links, storage media,
networking equipment and other equipment used in conjunction therewith together with all
computer software and all related object and source codes and databases.

	 	14.1	 	So far as the Warrantors are aware the Computers and Computer Systems owned by
the Company or used by or on behalf of the Company:-

	 	14.1.1	 	are in reasonable operating order and are overall fulfilling the purposes for
which they were acquired or established in a reasonably efficient manner
without material failures, downtime or errors;
	 
	 	14.1.2	 	have adequate capacity for the Company’s present needs and (taking into
account the extent to which the Computer Systems are expandable) needs for the
next six months;
	 
	 	14.1.3	 	have security, back-up systems, duplication, hardware and software support
and maintenance (including emergency cover) and reasonably trained personnel to
ensure:-

	 	14.1.3.1	 	that breaches of security, errors and breakdowns are kept to a
minimum;
	 
	 	14.1.3.2	 	that no material disruption will be caused to the business of the
Company or any material part thereof in the event of a breach of
security, error or breakdown;
	 
	 	14.1.3.3	 	that in the event of any fault no more than one day’s data would be
lost;
	 
	 	14.1.3.4	 	that the availability, confidentiality and integrity of data held
or transmitted by the computer systems used by the Company are
preserved;

	 	14.1.4	 	would not (so far as the Warrantors are aware) be likely to be in need of
replacement or material upgrading if the Company continued to be owned by the
Sellers and continued to be operated as it is currently operated on as cost
effective basis as it is currently operated within six months after Completion.

	 	14.2	 	All Computers and Computer Systems, used in the business of the Company are
owned and operated by and under the sole control of the Company, are not shared with or
used by or on behalf of any other person and there are in existence no agreements or
arrangements entitling any other person to share or to have access to or use of such
Computers or Computer Systems, or any of them.
	 
	 	14.3	 	All software used on or stored or resident in the Computers or Computer Systems
owned by the Company or used by or on behalf of the Company:-

	 	14.3.1	 	is lawfully held and used and so far as the Warrantors are aware does not
infringe the copyright or other Intellectual Property of any person, and all
copies held have been lawfully made;
	 
	 	14.3.2	 	as to the copyright therein:-

	 	14.3.2.1	 	in the case of standard packaged software purchased outright, is
licensed to the Company on an express or implied licence which does not
require the Company to make any further payments, is not

 

 

Beachcroft Wansbroughs

terminable without the consent of the Company and which imposes no
material restrictions (save as to copying) on the use or transfer of
the software; and

	 	14.3.2.2	 	in the case of all other software, is validly licensed to the
Company on the terms of a written licence (a true and complete copy of
which has been given to the Buyer at Completion) which requires payment
by the Company of a fixed annual licence fee at a rate not exceeding
that paid in the financial year ended on the Balance Sheet Date but
(save for reasonable fees for software support) requires the Company to
make no further or other payment, is not terminable (save for failure
to pay the licence fee) without the consent of the Company and imposes
no material restrictions (save as to copying) on the use or transfer of
the software.

	 	14.4	 	The Company either owns or is validly licensed in perpetuity (other than in the
event of breach or insolvency) to use the software currently used in its business; all
sums due under any such licences have been paid; and no action will be necessary to
enable it to continue to use such software to the same extent and in the same manner as
it has been used prior to the date of this agreement. The terms of all software
licences (other than licences for standard packaged software) have been disclosed in
the Disclosure Letter and the Company has not breached the terms of any such licence
and no notices of breach or termination have been served on the Company in respect of
any such licence.
	 
	 	14.5	 	No software owned by or licensed to the Company is used by or licensed or
sub-licensed by the Company to any other person.
	 
	 	14.6	 	All records and data of or relating to the business of the Company stored by
electronic means are capable of ready access through the present Computer Systems of
the Company.
	 
	 	14.7	 	The Company is the sole owner of the domain names listed as owned by it in the
Disclosure Letter together with the websites which may be accessed at these domain
names (the “Websites”) including the goodwill, copyright and other Intellectual
Property in the Websites.

	15.	 	DATA PROTECTION

	 	15.1	 	The Company has obtained and maintained in force all
registrations/notifications necessary or appropriate under the Data Protection Act 1984
(as amended) (“DPA 1984”) and the Data Protection Act 1998 (“DPA 1998”) in relation to
its business including, without limitation, each registration relating to the
obtaining, holding, processing, transfer and disclosure of personal data effected by
the Company (including, without limitation, to the Buyer).
	 
	 	15.2	 	The Company has at all times materially complied with all relevant provisions
of the DPA 1984 and the DPA 1998 including the eight Data Protection Principles.
	 
	 	15.3	 	The Company has not received any notice, letter or complaint alleging a breach
by it of the provisions of the DPA 1984 or the DPA 1998 nor has it received any notice
from the Data Protection Commissioner.

	16.	 	EMPLOYEES

	 	16.1	 	Details of material employment terms of all Employees and directors of the
Company are set out in the Disclosure Bundle.

 

 

Beachcroft Wansbroughs

	 	16.2	 	Save as set out in the Disclosure Bundle the Company has no other Employees or
directors.
	 
	 	16.3	 	The Company has not offered or agreed to increase the remuneration of, or
altered or sought to alter any of the terms and conditions of employment of, any
Employee or directors save as agreed with the Buyer’s Group.
	 
	 	16.4	 	There is no liability, outstanding or contingent or anticipated, to any present
or former Employee or director other than remuneration accrued for the current wage or
salary period or for reimbursement of normal business expenses and no present or former
Employee or director has any claim, outstanding or contingent or anticipated, against
the Company or right to be indemnified by the Company arising out of an act or omission
in the course of his office or employment or in relation to the termination of that
office or employment on or before the date of this agreement and the Warrantors are not
aware of any facts that might give rise to the same.
	 
	 	16.5	 	The Company has not since its incorporation been a party to any relevant
transfer as defined in the Transfer of Undertakings (Protection of Employment)
Regulations 1981 nor has the Company failed to comply with any duty to inform and
consult any appropriate representative under the said Regulations.
	 
	 	16.6	 	The Company has in relation to each of its present and former Employees and
directors:-

	 	16.6.1	 	complied with all obligations imposed on it and all orders and awards made
under, all statutes, statutory instruments, European Community law,
regulations, orders, collective agreements, customs and practices relevant to
the relations between it and its Employees and directors or any trade union or
the terms and conditions of employment or working conditions of its Employees
and directors (including, without prejudice to the generality of the foregoing,
health and safety at work and sex or race discrimination) and complied with any
recommendations made by the Advisory Conciliation and Arbitration Service or
the Equal Opportunities Commission and with any arbitration awards and
declarations; and
	 
	 	16.6.2	 	maintained adequate personnel records which are now up to date, complete and
accurate in all material respects.

	17.	 	PENSION MATTERS

	 	17.1	 	The Company is not and never has been a party to any agreement or arrangement
for the provision of any relevant benefits (as defined in section 612(1) of ICTA, with
the omission of the exception in that definition) for any person.
	 
	 	17.2	 	The Company is not and never has an obligation to contribute to any personal
pension scheme (as defined in section 630 of ICTA) in respect of any Employee or former
employee.

	18.	 	TAX MATTERS
	 
	 	 	General

	 	18.1	 	Notices and returns

All returns, computations, notices and registrations of the Company for the purposes
of Taxation have been made on a proper basis and are correct and so far as the
Warrantors are aware none of them is expected to be the subject of any material
dispute with any Taxation Authority. All information supplied by the Company for
the

 

 

Beachcroft Wansbroughs

purposes of Taxation was when supplied and so far as the Warrantors are aware
remains complete and accurate in all material respects.

	 	18.2	 	Payment of Tax due / penalties and interest

	 	18.2.1	 	All Taxation which the Company is liable to pay prior to Completion has been
so paid prior to Completion (insofar as such Taxation ought to have been paid).
	 
	 	18.2.2	 	The Company has not within the period of three years ending on the date of
this agreement paid or become liable to pay any material penalty, fine,
surcharge or interest on or with reference to Tax.

	 	18.3	 	Compliance with Tax collection obligations

	 	18.3.1	 	All income tax and national insurance or social security contributions
deductible and payable under the PAYE system and/or any other Taxation Statute
have, so far as is required to be deducted, been deducted from payments made or
treated as made by the Company and all such amounts due to be paid to HM
Revenue and Customs prior to the date of this agreement have been so paid.
	 
	 	18.3.2	 	The Company does not currently engage, and has not within the last three
years engaged, any person whom it has treated as self-employed but who may be
deemed by an English Court of law to be an employee of it.

	 	18.4	 	Investigations and Disputes

	 	18.4.1	 	The Company has not within the last 3 years been subject to any visit, audit,
investigation, discovery or access order by any Taxation Authority other than
routine visits and routine audits and no notice has been received by the
Company from any Taxation Authority indicating that it intends to investigate
any of the Taxation affairs of the Company.
	 
	 	18.4.2	 	Within the last four years there has been no material dispute or difference
between the Company and any Taxation Authority.

	 	18.5	 	Anti-avoidance provisions

The Company has not within the last six years entered into or been a party to any
scheme or arrangement of which the main purpose, or one of the main purposes, was
the avoidance of a liability to Taxation.

	 	18.6	 	Records and Acquisition Costs

	 	18.6.1	 	If each of the capital assets of the Company was disposed of on the date
hereof for a consideration equal to the book value of that asset in, or adopted
for the purposes of, the Accounts or, in the case of assets acquired since the
Balance Sheet Date, equal to the consideration given upon its acquisition, so
far as the Warrantors are aware no liability to corporation tax on chargeable
gains would arise (and for the purpose of determining the liability there shall
be disregarded any relief and allowances available to the Company other than
amounts falling to be deducted under section 38, TCGA).

 

 

Beachcroft Wansbroughs

	 	18.6.2	 	The Company holds sufficient records to determine the tax consequence which
would arise on any disposal or realisation of any asset owned at the Balance
Sheet Date or acquired since that date but prior to Completion.

	 	18.7	 	Reconstructions etc

	 	18.7.1	 	The Company, has at no time within the last six years:-

	 	18.7.1.1	 	been engaged in or been a party to any of the transactions set out
in sections 213 to 218 inclusive, ICTA 1988 nor has it made or received
a chargeable payment as defined in section 218(1), ICTA 1988;or
	 
	 	18.7.1.2	 	been a party to or involved in any transaction falling within (or
which would but for section 137 TCGA 1992 have fallen within) any of
sections 126-139 of that Act (reorganisations, share exchanges and
reconstructions).

	 	18.8	 	Change in the nature of trade

Within the period of three years ending with the date of this agreement there has
been no major change in the nature or conduct of any trade or business (as defined
in sections 768 and 768B ICTA 1988) carried on by the Company.

	 	18.9	 	Transfer pricing

The Company is not and has not within the last three years been a party to any
transaction or arrangement which may cause the Company’s Taxation Liability for any
purpose to be calculated in accordance with Schedule 28AA, ICTA 1988 or the transfer
pricing provisions of any foreign jurisdiction or double tax convention.

	 	18.10	 	Groups

The Company is not and has never been a member of a group of companies for any tax
purpose including but not limited to being a member of any VAT group.

	 	18.11	 	Value Added Tax

The Company is a taxable person duly registered for the purposes of VAT and all
supplies made by the Company in the course of its trade are taxable supplies.

	 	18.12	 	Stamp duty and Stamp Duty Land Tax

	 	18.12.1	 	All documents (other than those which have ceased to have any legal effect)
to which the Company is a party as at Completion and which are (or would be if
in the United Kingdom) stampable have been duly stamped.
	 
	 	18.12.2	 	The Disclosure Letter sets out full and accurate details of any chargeable
interest (as defined under section 48, Finance Act 2003) acquired or held by
the Company before Completion in respect of which the Sellers are aware or
ought reasonably to be aware that an additional land transaction return will be
required to be filed with a Taxation Authority and/or a payment of stamp duty
land tax made on or after Completion

	19.	 	PROPERTY MATTERS
	 
	 	 	Title

 

 

Beachcroft Wansbroughs

	 	19.1	 	The Company owns no freehold land or premises and does not occupy land or
premises under a licence.
	 
	 	19.2	 	The Property comprises the only property owned, occupied or otherwise used by
the Company and they are all occupied solely by the Company.
	 
	 	19.3	 	If the Property is occupied or otherwise used by the Company in connection with
its business, it is occupied or used by right of ownership or under lease or licence
the terms of which permit that occupation or use.
	 
	 	19.4	 	The Company is the legal and beneficial owner of the Property.
	 
	 	19.5	 	The information contained in Schedule 5 is complete and accurate.
	 
	 	19.6	 	If the Lease is compulsorily registrable at Land Registry it is registered at
Land Registry and all easements and other rights granted by the Lease have where
necessary been registered or noted at Land Registry so as to bind the reversion to the
Lease or any other servient land.

Encumbrances

	 	19.7	 	The Property is free from mortgages, debentures, charges, rent charges, liens
or other encumbrances or matters of an onerous nature which would affect its value.
	 
	 	19.8	 	The Property is not subject to outgoings other than business rates, water rates
and insurance premiums and rent and service charges.
	 
	 	19.9	 	The Property is free of restrictive covenants, stipulations, easements, profits
à prendre, wayleaves, licences, grants, restrictions, overriding interests or other
similar rights vested in third parties or any agreement to create, or claim by any
person to be entitled to, any of the foregoing.
	 
	 	19.10	 	If any disclosure is made in the Disclosure Letter qualifying any of
paragraphs 19.9, 19.10 and 19.11 above, all obligations and liabilities imposed by or
arising in relation to any matter so disclosed have been performed and discharged and
no payments in respect of them are outstanding.
	 
	 	19.11	 	The Property is not subject to options or rights of pre-emption.

Planning Matters

	 	19.12	 	The use of the Property is the permitted use for the purposes of the Planning
Acts, as defined in section 336 Town and Country Planning Act 1990 (“Planning Acts”).
	 
	 	19.13	 	With respect to the development of the Property, planning permission has been
obtained or is deemed to have been granted for the purposes of the Planning Acts, no
permission has been suspended or called in and no application for planning permission
is awaiting decision.
	 
	 	19.14	 	Building regulation consents have been obtained with respect to all
development alterations and improvements to the Property.
	 
	 	19.15	 	The Company has complied and is complying with:

	 	19.15.1	 	planning permissions, orders, regulations, consents and bye-laws applicable
to the Property;

 

 

Beachcroft Wansbroughs

	 	19.15.2	 	all agreements under section 52 Town and Country Planning Act 1971 and all
planning obligations under section 106 of the Town and Country Planning Act
1990 made with respect to the Property; and
	 
	 	19.15.3	 	all agreements made under section 38 Highways Act 1980 with respect to the
Property.

	 	19.16	 	The Property is not listed as being of special historic or architectural
importance or located in a conservation area.
	 
	 	19.17	 	All claims and liabilities (contingent or otherwise) under the Planning Acts
or other legislation in relation to the Property have been discharged.

Statutory Obligations

	 	19.18	 	The Company has complied and is complying with applicable statutory and
bye-law requirements with respect to the Property.
	 
	 	19.19	 	There is no unperformed obligation with respect to the Property performance of
which is necessary to comply with the requirements (whether formal or informal) of a
competent authority exercising statutory or delegated powers.
	 
	 	19.20	 	No licences are required in relation to the Property.

Adverse Orders

	 	19.21	 	There are no compulsory purchase notices, orders or resolutions affecting the
Property and there are no circumstances which might lead to any being made.
	 
	 	19.22	 	There are no closing demolition or clearance orders, enforcement notices or
stop notices affecting the Property and there are no circumstances which might lead to
any being made.
	 
	 	19.23	 	There is no outstanding notice, order, demand, resolution, proposal, complaint
or requirement issued or made, or intended to be issued or made, by any local or other
competent authority or body concerning compulsory acquisition, clearance, demolition or
closing, the carrying out of any work (including any work required by reason of the
fact that the Property is a listed building), the modification of any planning
permission, the discontinuance of any use, the imposition of any building or
improvement line, any breach of or non-compliance with building and fire regulations or
any other matter which would adversely affect the value of the Property.
	 
	 	19.24	 	There is no requirement relating to the Property or its use which although not
registered in the Register of Local Land Charges is capable of registration in that
Register.
	 
	 	19.25	 	There is no receipt of compensation as a result of any refusal of any
application for planning permission or the imposition of any restriction in relation to
any planning permission, listed building consent or conservation area consent relating
to the Property.

Condition of the Property

	 	19.26	 	The buildings and other structures on or comprising the Property is in good
and substantial repair and condition and fit for the purposes for which they are used.
	 
	 	19.27	 	None of the buildings or structures on the Property:

 

 

Beachcroft Wansbroughs

	 	19.27.1	 	has been affected by structural damage or electrical defects or by timber
infestation or disease; or
	 
	 	19.27.2	 	contains in its fabric high alumina cement, blue asbestos, calcium chloride
accelerator, wood wool slabs used as permanent shuttering or other deleterious
material.

	 	19.28	 	The Property is not located in an area or subject to circumstances
particularly susceptible to flooding or is affected by mining activity.
	 
	 	19.29	 	There are no disputes with neighbouring owners with respect to boundary walls
and fences relating to the Property or with respect to easements or rights over or
means of access to the Property.
	 
	 	19.30	 	The principal means of access to the Property is over roads which have been
taken over by the local or other highway authority and which are maintainable at the
public expense, and no means of access to the Property is shared with another person or
subject to rights of determination by another person.
	 
	 	19.31	 	The Property is not subject to rights of common.
	 
	 	19.32	 	The Property enjoys the main services of water, drainage, electricity and gas.
	 
	 	19.33	 	None of the facilities necessary for the enjoyment or use of the Property for
its current use is enjoyed on terms entitling any person to terminate or curtail its
use.

Insurance

	 	19.34	 	The Property is insured in its full reinstatement values for not less than
three years’ loss of rent and against third party and public liabilities to an adequate
extent.

Leasehold Property

	 	19.35	 	The Company has paid the rent and observed and performed the covenants on the
part of the tenant and the conditions contained in the Lease and the last demand for
rent (or receipt if issued) in relation to the Lease was unqualified.
	 
	 	19.36	 	The Lease is in full force.
	 
	 	19.37	 	The licences, consents and approvals required from the landlords and any
superior landlords under the Lease have been obtained and the covenants on the part of
the tenant contained in those licences, consents and approvals have been duly
performed.
	 
	 	19.38	 	There are no rent reviews in progress under the Lease.
	 
	 	19.39	 	No obligation necessary to comply with a notice given by or other requirement
of the landlord under the Lease is outstanding and unperformed.
	 
	 	19.40	 	There is no obligation to reinstate the Property by removing or dismantling an
alteration made to it by the Company or a predecessor in title.
	 
	 	19.41	 	The Company has not entered into an agreement with the landlord of the
Property specifying circumstances in which it would be reasonable for the landlord to
withhold its consent to an assignment in accordance with section 19(1A) Landlord and
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	 	19.42	 	The Company has no contingent liability (as original or previous tenant or as
guarantor) in respect of any lease granted prior to 1 January 1996 or following an
excluded assignment as defined in the Landlord and Tenant (Covenants) Act 1995.
	 
	 	19.43	 	The Company has not surrendered the lease of any leasehold property to the
reversioner without first investigating the reversioner’s title and without receiving
from the reversioner an absolute release from the tenant’s covenants in the relevant
lease and from all liability arising under that lease.
	 
	 	19.44	 	The Company has not assigned any leasehold property of which it was the
original tenant and in respect of which it entered into a covenant with the landlord to
observe and perform the tenant’s covenants under that lease without receiving a full
and effective indemnity in respect of its liability under that lease.

	20.	 	ENVIRONMENTAL MATTERS

	 	 	 
	“Environment”

	 	means all and any of the following media, being land,
water and air (wherever situate) and includes all
human or plant or animal life and living organisms
	 
	 	 
	“Environmental Laws”

	 	means all or any applicable law, whether past,
present or future, including common law, statute,
statutory instrument, regulation, codes of practice
or guidance, European law, directives, regulations,
decisions of the European Court and any by-law,
order, notice, demand, decree, injunction, resolution
or judgment of any competent authority which has as a
purpose or effect the prevention of harm to the
Environment.

Environmental proceedings and nuisances

	 	20.1	 	There is no civil, criminal or administrative action, claim, complaint, notice,
caution, correspondence, investigation or other proceedings or suit being taken or
made, pending or threatened in connection with the activities of the Company at any
time or any asset owned occupied or used by the Company nor any act or omission of the
Company giving rise or likely to give rise in the future to any such action, claim or
complaint notice, caution, correspondence, investigation, proceedings or suit or any
such liability or any other liabilities under any Environmental Laws.

 

 

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SCHEDULE 4

Tax Covenant

	1.	 	INTERPRETATION

     1.1 In this Schedule :

	 	 	 
	“Claim”

	 	means a claim, assessment, notice,
demand, or letter or other document
issued by or on behalf of a Taxation
Authority from where it appears that
the Company or Cinemasonline Limited
is or may be liable or is sought to
be made liable to make or has made a
payment to the Taxation Authority or
is or may be or has been denied or
sought to be denied a Relief or that
a Relief is or may be or has been
utilised as an offset;
	 
	 	 
	“Event”

	 	means an event, act, transaction or
omission, including without
limitation, a receipt or accrual of
value, income or gains, distribution
and the entering into and completion
of the agreement or the
Cinemasonline Purchase Agreement and
includes any Event (as so defined)
which is deemed to occur for the
purpose of any Tax);
	 
	 	 
	“Event occurring on or before

Completion”

	 	includes any combination of events
only the first or some of which take
place on or before Completion but
(if so) only to the extent that such
transactions before Completion are
outside the ordinary course of
business of the Company and the
successive transactions effected
after Completion are inside or
outside the ordinary course of the
business of the Company as carried
out at Completion excluding those
acts performed by the Company
voluntarily after Completion;
	 
	 	 
	“Overprovision”

	 	Overprovision means the amount by
which any provision in the Accounts
relating to tax is overstated,
applying the accounting policies,
principles and practices adopted in
relation to the preparation of the
Accounts (and ignoring the effect of
any change in law made or action
taken by the Buyer or the Company
after Completion, or any Relief
arising after Completion);
	 
	 	 
	“Relief”

	 	means any loss, relief, allowance,
exemption, set-off, deduction, right
to repayment or credit or other
relief of a similar nature granted
by or available in relation to Tax
pursuant to any legislation or
otherwise;
	 
	 	 
	“Saving”

	 	means the reduction or elimination
of any liability of the Company to
make any actual payment of tax in
respect of which the Warrantors
would not have

 

 

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	 	been liable under
Clauses 2.1 or 2.2, by the use of
any Relief arising wholly as result
of a Tax Liability in respect of
which the Warrantors have made a
payment under Clauses 2.1 or 2.2 of
this Tax Covenant;
	 
	 	 
	“Tax or Taxation”

	 	means any and all forms of taxes,
levies, imposts, contributions,
duties and charges in the nature of
taxation and all withholdings or
deductions in respect thereof of
whatever nature whenever imposed
whether of the United Kingdom or
elsewhere (including, for the
avoidance of doubt, National
Insurance contribution liabilities
in the United Kingdom and
corresponding obligations elsewhere)
and whether directly or primarily
chargeable against, recoverable from
or attributable to the Company,
Cinemasonline Limited or any other
person including all fines,
penalties, charges and interest
relating to the same (but excluding
any charges, interest, penalties or
fines arising after Completion by
reason of any failure by the Buyer
or the Company or Cinemasonline
Limited after Completion to pay to
the relevant Taxation Authority any
amount in respect of a Tax Liability
paid by the Warrantors to the Buyer
under this Tax Covenant).
	 
	 	 
	“Taxation Authority”

	 	means any body or person anywhere in
the world having the duty or power
to assess levy collect or receive
tax.
	 
	 	 
	“Tax Liability”

	 	includes any Tax liability satisfied
before the date of this Tax Covenant
and any liability as a
representative or for which the
Company or Cinemasonline Limited is
not primarily accountable or for
which it has a right of recourse
against another person;

	 	1.2	 	Unless the context otherwise requires, words and expressions defined in the
agreement have the same meanings in this Tax Covenant as in the agreement.
	 
	 	1.3	 	Unless the context otherwise requires, in this Schedule, references to “Clause”
shall mean a Clause of this Schedule.
	 
	 	1.4	 	The Warrantors’ obligations contained in this Tax Covenant are joint and
several.

	2.	 	THE WARRANTORS’ OBLIGATIONS

	 	2.1	 	Subject to Clause 2.3 the Warrantors shall pay to the Buyer an amount equal to
the amount of the Company’s or Cinemasonline Limited’s Tax Liability which the Company
or Cinemasonline Limited is obliged to pay to a Taxation Authority:

	 	2.1.1	 	which arises in consequence of an Event occurring on or before
Completion;
	 
	 	2.1.2	 	which would not have arisen but for the loss, reduction,
modification or cancellation of some Relief in consequence of an Event
occurring on or before Completion where and insofar as that Relief has been
shown as an

 

 

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asset in the Accounts or has been taken into account in computing
(and
reducing) a provision (for deferred Tax or otherwise) which appears in the
Accounts ; or

	 	2.1.3	 	which would have arisen in consequence of an Event occurring
on or before Completion and which is not payable in consequence of the
utilisation or set-off of some Relief where the Relief arises in respect of an
Event occurring after Completion;
	 
	 	2.1.4	 	arising in consequence of an Event occurring:

	 	2.1.4.1	 	after Completion and for which the Company or Cinemasonline Limited
is liable solely as a result of having at any time before Completion
been a member of a group for any tax purpose; or
	 
	 	2.1.4.2	 	at any time and for which the Company or Cinemasonline Limited is
liable solely as a result of having at any time before Completion been
controlled or treated for any Tax purpose as controlled by any person
or persons.

	 	2.2	 	The Warrantors shall pay to the Buyer an amount equal to the amount of any
liability of the Company, Cinemasonline Limited or the Buyer for reasonable costs
properly incurred by the Company, Cinemasonline Limited or the Buyer in connection with
any matter falling within Clause 2.1 for which the Warrantors are liable under this Tax
Covenant.
	 
	 	2.3	 	Clauses 2.1 and 2.2 do not apply to a liability to the extent that:

	 	2.3.1	 	a provision or reserve in respect of the liability is made
in the Accounts or the Management Accounts, or payments thereof is taken into
account in the Accounts or the Management Accounts;
	 
	 	2.3.2	 	the liability arises as a result of a provision or reserve for
the liability made in the Accounts or the Management Accounts being
insufficient in consequence of an increase in Tax rates or change in (or
published interpretation by a Taxation Authority of) law announced after the
date of the agreement whether or not with retrospective effect;
	 
	 	2.3.3	 	the liability arises in consequence of an Event which has
occurred since the Balance Sheet Date in the Company’s or Cinemasonline
Limited’s ordinary course of business; or
	 
	 	2.3.4	 	the Buyer has recovered damages under the Warranties in
respect of the same liability;
	 
	 	2.3.5	 	the liability is attributable to the Company or Cinemasonline
Limited ceasing to be entitled to the small Company’s rate of corporation tax;
	 
	 	2.3.6	 	it has been made good or otherwise compensated for at no
expense to the Buyer, the Company or Cinemasonline Limited;
	 
	 	2.3.7	 	it would not have arisen but for a change after Completion in
the accounting policies, bases or practices upon which the Company or
Cinemasonline Limited values its assets (other than a change made in order to
comply with generally accepted accounting principles) or a change to the date
to which it makes up its accounts;

 

 

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	 	2.3.8	 	it would not have arisen but for a voluntary act or
transaction carried out by the Buyer, the Company or Cinemasonline Limited
after Completion otherwise than in the ordinary course of business, which the
Buyer was aware or ought reasonably to have been aware could give rise to a
claim unless such act or transaction was carried out:-

	 	2.3.8.1	 	pursuant to an obligation of the Company or Cinemasonline Limited
incurred prior to Completion;
	 
	 	2.3.8.2	 	in compliance with any law, regulation or request of any Taxation
Authority;
	 
	 	2.3.8.3	 	at the written request of the Warrantors;

	 	2.3.9	 	the liability in question arises or is increased as a result
of the failure by the Company or Cinemasonline Limited after Completion to make
any claim, election, surrender or disclaimer or to give any notice or consent
or to do any other thing, the making, giving, or doing of which was permitted
by law and which is taken into account;

	 	2.3.9.1	 	in computing and so reducing any provision which appears in the
Accounts (or eliminating any provision which would otherwise have
appeared in the Accounts); or
	 
	 	2.3.9.2	 	in computing any right to repayment of Tax which appears in the
Accounts;

	 	2.3.10	 	the liability in question arises or is increased as a result of the
withdrawal or amendment by the Company or Cinemasonline Limited after
Completion of any such claim, election, surrender, disclaimer, notice or
consent made by the Company or Cinemasonline Limited prior to Completion unless
such act or transaction was carried out:-

	 	2.3.10.1	 	in compliance with any law, regulation or request of any Taxation
Authority; or
	 
	 	2.3.10.2	 	at the written request of the Warrantors;

	 	2.3.11	 	it is in respect of stamp duty or stamp duty reserve tax payable on the
transfer or agreement to transfer the Shares pursuant to the agreement;
	 
	 	2.3.12	 	it arises or is increased as a consequence of the failure of the Buyer to
comply with or procure the compliance of the Company with their respective
obligations under paragraphs 4 (Appeals and Conduct of Claims), 6 (Recovery
from Third Parties) and 9 (Buyer’s Covenant);
	 
	 	2.3.13	 	the liability relates to corporation tax payable by UK Theatres Online
Limited in consequence of an Event occurring on or before Completion during the
period covered by the Accounts subject to a maximum sum of £16,323 ; or
	 
	 	2.3.14	 	there is available to the Company or Cinemasonline Limited any Relief, other
than a Relief which arises as a result of an Event which occurs on or after
Completion , which is or can be offset against the Tax Liability in question
(and so that the Company or Cinemasonline Limited shall take all necessary
steps to claim the benefit of any such Relief) or

 

 

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	 	2.3.15	 	the liability in any way relates to the conversion of up to £125,104 of
Overpayments which currently exist into sales.

	 	2.4	 	Without limitation, none of the following is regarded for the purposes of
Clause 2.3.3 as an Event which has occurred in the Company’s ordinary course of
business:

	 	2.4.1	 	an Event giving rise to a liability under Part XVII of ICTA
1988 (tax avoidance);
	 
	 	2.4.2	 	a distribution within the meaning of ICTA 1988;
	 
	 	2.4.3	 	any transaction or deemed transaction which is treated for any
Tax purpose as taking place for a consideration other than the actual
consideration (if any) or in respect of which an adjustment fails to be made
for any Tax purpose in the Company’s or Cinemasonline Limited’s position by
reason of the fact that its terms differ from those (if any) which would have
been made between independent persons; or
	 
	 	2.4.4	 	an Event which results in the Company or Cinemasonline Limited
being accountable for Tax in a representative capacity or for which it is not
primarily accountable or for which it has a right of recourse against another
person, such person not being a member of the Buyer’s tax group; or
	 
	 	2.4.5	 	an Event which results in the Company or Cinemasonline
Limited’s failure to deduct or account for Tax or pay Tax when due;
	 
	 	2.4.6	 	a disposal of capital assets; and
	 
	 	2.4.7	 	an Event giving rise to a liability within Section 419 of ICTA
1988.

	 	2.5	 	Except in any cases involving fraud or negligent conduct no claim or claims
shall be made by the Buyer under this Tax Covenant unless notice of such claim shall
have been given to the Warrantors in writing specifying (in reasonable detail) the
matter which gives rise to the claim, prior to the seventh anniversary of Completion
and any such claim (if not previously satisfied, withdrawn or settled) shall be deemed
to have been withdrawn and waived by the Buyer unless legal proceedings in respect
thereof have been commenced (by being both issued and served on the Warrantors) within
6 months of the notification of such claim to the Warrantors under this Clause.
	 
	 	2.6	 	Clauses 6.1.2, 6.1.3, 6.1.6 and 6.8 of the agreement shall take effect as if
set out in full here in this Schedule.

	3.	 	PAYMENTS: SUPPLEMENTARY

	 	3.1	 	Insofar as payments under Clause 2 are less than the Consideration actually
paid, they shall constitute a repayment of and reduction in the Consideration.
	 
	 	3.2	 	All payments made by any of the Warrantors under this Tax Covenant shall be
made gross, and free of any counterclaim or set-off other than as required by law.
	 
	 	3.3	 	If a payment made by a Warrantor under Clause 2 will be or has been subject to
Tax, that Warrantor shall on demand from the Buyer pay the Buyer the amount (after
taking into account Tax payable in respect of the amount) that will ensure that the
Buyer receives and retains a net sum equal to the sum it would have received had the
payment not been subject to Tax provided that if any payment is initially made on the
basis that the amount due is not taxable in the hands of the Buyer and it is

 

 

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subsequently determined that it is, or vice versa, such adjustments shall be made
between the Buyer and that Warrantor as may be required.

	4.	 	APPEALS AND CONDUCT OF CLAIMS

	 	4.1	 	If, and only if, the Company, Cinemasonline Limited or the Buyer receives a
Claim relating to a Tax Liability as mentioned in Clause 2.1:

	 	4.1.1	 	the Buyer shall as soon as reasonably practicable (and in any
event not less than fifteen Business Days prior to the expiry of any time for
appeal) give notice or procure that notice is given of the Claim to the
Warrantors setting out reasonable particulars of the Claim but notice is not a
condition precedent to the Warrantors’ liability under this Tax Covenant; and
	 
	 	4.1.2	 	subject to Clauses 4.3 and 4.4, the Buyer shall, and shall
ensure that the Company and Cinemasonline Limited will, take any action the
Warrantors may reasonably request to avoid, dispute, resist or compromise the
Claim if the Warrantors have first agreed (to the Buyer’s reasonable
satisfaction) to indemnify the Buyer, the Company and Cinemasonline Limited
against the Tax, and any additional Tax and costs which the Buyer, the Company
or Cinemasonline Limited may reasonably and properly incur in connection with
the taking of such action.

	 	4.2	 	The Warrantors’ rights under Clause 4.1.2 cease if the Warrantors (a) fail to
request the Buyer or the Company to take any action under paragraph 4.1.2 within 15
Business Days of the date of notice of the Claim being given by the Buyer or the
Company or (b) the Warrantors fail to indemnify the Buyer or the Company to the Buyer’s
reasonable satisfaction within a period of time (commencing with the date of the notice
given to the Warrantors) that is reasonable, having regard to the nature of the Claim
and the existence of any time limit in relation to avoiding, disputing, defending,
resisting, appealing or compromising such Claim, and which period shall not in any
event exceed a period of 15 Business Days or (c) if any of the Warrantors:

	 	4.2.1	 	takes action, or other steps are taken or legal proceedings
are started for his bankruptcy; or
	 
	 	4.2.2	 	is unable to pay his debts as they fall due, starts
negotiations with a creditor with a view to the general readjustment or
rescheduling of his indebtedness or makes a general assignment for the benefit
of, or a composition with, his creditors.

	 	4.3	 	The Buyer is not obliged to take, or cause to be taken, any action pursuant to
Clause 4.1.2 which involves
	 
	 	 	 	actually fighting a dispute before the first appellate body (excluding the Taxation
Authority which has made the Claim, the Special Commissioners, the General
Commissioners and the VAT and Duties Tribunal) in the jurisdiction concerning
unless the Warrantors shall have produced to the Buyer (if the Tax is a United
Kingdom tax or arises within the United Kingdom) the opinion of tax counsel of not
less than 7 years’ call, or (otherwise) the opinion of an expert of similar
standing (and in each case appointed by agreement between the Buyer and the
Warrantor or (if they do not agree) upon the application by either party to the
President for the time being of the Law Society, whose determination shall be
final), that such action is reasonable.
	 
	 	4.4	 	Clause 4.1.2 does not apply, or shall cease to apply, if the Warrantors or, (if
before Completion), the Company or Cinemasonline Limited:

 

 

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	 	4.4.1	 	appear, in the reasonable opinion of the Company’s auditors to
have sought to evade the Tax Liability in question or
	 
	 	4.4.2	 	appear, in the reasonable opinion of the Company’s auditors,
to have acted fraudulently, or fraudulently omitted to act, in relation to that
Tax Liability, whether before or after the making of any Claim.

	 	4.5	 	The action which the Warrantors may request under Clause 4.1.2 above shall
include the Company or Cinemasonline Limited applying to postpone (so far as legally
possible) the payment of any Tax.
	 
	 	4.6	 	Following receipt of any instructions as referred to in Clause 4.1.2 above, the
Buyer shall procure that a Claim is not settled or otherwise compromised without the
Warrantors’ prior written consent, such consent not to be unreasonably withheld or
delayed.
	 
	 	4.7	 	Subject to the Buyer complying with its obligations under and the provisions of
this Clause 4, any sum bona fide paid by the Company or Cinemasonline Limited in
discharge or settlement of the relevant liability or purported liability, or any
figures bona fide agreed or not contested by the Company or Cinemasonline Limited which
determine what any relevant liability or purported liability is or would have been,
shall be conclusively presumed to constitute the relevant liability for the purposes of
Clause 2.
	 
	 	4.8	 	If, on or before the seventh anniversary of Completion, the auditors for the
time being of the Company or Cinemasonline Limited certify (at the request and expense
of the Warrantors) that any provision for Tax in the Accounts has proved to be an
Overprovision:

	 	4.8.1	 	the amount of any Overprovision will first be set-off against
any payment then due from the Warrantors under this Tax Covenant; and to the
extent that there is an excess, a refund will be made to the Warrantors of any
previous payment or payments made by the Warrantors under this Tax Covenant
(and not previous refunded under this Tax Covenant) up to the amount of such
excess; and
	 
	 	4.8.2	 	to the extent that such excess as referred to in 4.7.1 above
is not exhausted, the remainder of that excess will be carried forward and
set-off against any future payment or payments which become due from the
Warrantors under this Tax Covenant.

	5.	 	DATE FOR PAYMENT AND INTEREST

	 	5.1	 	If a Tax Liability arises under Clauses 2.1.1 or 2.1.4 the Warrantors shall pay
to the Buyer the relevant amount in cleared funds on or before the fifth Business Day
before the date on which the Tax is payable or, if later, ten Business Days following
the date on which the Buyer notifies the Warrantors of their liability to make such
payment.
	 
	 	5.2	 	If a liability arises under Clause 2.1.2, 2.1.3, 2.2, or 3.3 the Buyer shall
notify the Warrantors of the amount payable.
	 
	 	5.3	 	If the Warrantors (acting reasonably) so requests within 14 days starting on
the day after delivery of that notice, the Buyer shall ensure that (at the Warrantors’
cost) the Buyer’s auditors (acting as experts and not as arbitrators) confirm whether
or not the amount referred to in Clause 5.2 is in their reasonable opinion accurate,
and to the extent that is not, determine the amount payable. This confirmation or
determination shall (except for manifest error) be conclusive and binding on the
Warrantors.

 

 

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	 	5.4	 	The Warrantors shall pay the amount referred to in Clause 5.2 (or if lower, the
amount determined in Clause 5.3) to the Buyer in cleared funds:

	 	5.4.1	 	in the case of a liability under Clause 2.1.2 or 2.1.3, on or
before the second Business Day before the date on which the Tax would have been
payable;
	 
	 	5.4.2	 	otherwise, on or before the fifth Business Day either after
the date of the notice or (if later) after the date the amount payable is
determined pursuant to Clause 5.3.

	 	5.5	 	If any sum due and payable by the Warrantors under this Tax Covenant is not
paid on the due date in accordance with the provisions of this Tax Covenant, the
Warrantors shall in addition to that sum pay interest to the Buyer from the date for
payment of the sum to and including the day of actual payment of the sum (or the next
Business Day if the day of actual payment is not a Business Day). The interest accrues
from day to day (before and after judgment) at the rate of 3% per year above the base
rate of the Barclays Bank plc (or if there is no base rate, at a similar rate
reasonably selected by the Buyer) and is compounded quarterly.

	6.	 	RECOVERY FROM THIRD PARTIES

	 	6.1	 	If:

	 	6.1.1	 	the Company, Cinemasonline Limited or the Buyer is entitled to
recover from another person (including, without limitation, any Taxation
Authority) a sum falling within Clauses 2.1 or 2.2; and
	 
	 	6.1.2	 	the Warrantors have first agreed (to the Buyer’s reasonable
satisfaction) to indemnify the Buyer, the Company and Cinemasonline Limited
against all costs which the Buyer, the Company or Cinemasonline Limited may
reasonably and properly incur in connection with the taking of the following
action;

then the Buyer shall procure that the Warrantors are promptly notified of such
entitlement and, the Buyer shall and shall ensure that the Company or Cinemasonline
Limited will take any action reasonably requested by the Warrantors to enforce
recovery against the other person.

	 	6.2	 	The Buyer need not take any action which the Buyer, the Company or
Cinemasonline Limited reasonably considers (acting in good faith having taken account
of the reasonable requests of the Warrantor) is likely to have a material adverse
effect on the future liability to tax of it, the Company or Cinemasonline Limited.
	 
	 	6.3	 	The Buyer shall account to the Warrantors for the lesser of:

	 	6.3.1	 	the sum recovered (including any related interest or related
repayment supplement paid by the other person), net of any Tax on the sum and
that interest or repayment supplement (save to the extent that any such amount
has already been made good by the Warrantors under Clause 2.1); and
	 
	 	6.3.2	 	the amount paid by the Warrantors under Clause 2.1 or 2.2 in
respect of that matter.

 

 

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	7.	 	INFORMATION, RETURNS ETC.

The Sellers shall on written request provide as much information as they possibly can which
the Company, Cinemasonline Limited or the Buyer shall reasonably request to enable the
Company or Cinemasonline Limited to draw up its Tax returns, compute its Tax Liability or
respond to any request or demand from any Taxation Authority relating to the Company or
Cinemasonline Limited’s current or previous accounting periods. The Buyer shall procure that
the Company or Cinemasonline Limited affords such access to its books, accounts and records
as is necessary and reasonable to enable the Warrantors or their duly authorised agents to
provide the information reasonably requested of them.

The Buyer shall have the conduct of submitting to, and agreeing with the Tax Authorities,
the Tax computations of the Company or Cinemasonline Limited for the accounting period
ending on the Balance Sheet Date (the “Last Accounting Period”) to the extent that the same
have not been submitted at Completion.

The Sellers shall prepare the Tax Computations and returns for the Last Accounting Period
and submit them to the Buyers for review as soon as reasonably practicable. The Buyer shall
following their review deliver to the Sellers copies of all the Tax computations and returns
and all related documents and correspondence relating to the Last Accounting Period which it
intends to submit to the Tax Authorities before submission to the Tax Authorities. If the
Sellers do not comment on the Tax computations, returns, documents or correspondence within
21 days starting on the date of their receipt, they are deemed to have approved them.

The Buyer shall take account of all the Sellers’ reasonable comments concerning the Tax
computations, returns, documents or correspondence.

The Sellers and the Buyer shall deliver to each other copies of all correspondence sent to,
or received from, a Tax Authority relating to the Tax computations and returns relating to
the Last Accounting Period, delivery to be effected promptly on despatch, or as the case may
be, receipt.

The Buyer shall ensure that the Company and Cinemasonline Limited will, before submission of
a computation, document or correspondence to a Tax Authority relating to a Tax liability of
the Company or Cinemasonline Limited which arises in respect of the accounting period
starting on the day after the Balance Sheet Date and which may give rise to a claim under
this Tax Covenant or under the agreement for breach of the Tax Warranties, consult with the
Sellers and make any alterations, amendments or additions to the computation, document or
correspondence as the Sellers may reasonably require.

	8.	 	SAVINGS

	 	8.1	 	If (at the Warrantors’ request and expense) the auditors of the Company for the
time being determine that the Company or Cinemasonline Limited has obtained a Saving,
the Buyer will as soon as reasonably practicable thereafter repay to the Warrantors the
lesser of:

	 	8.1.1	 	the amount of the Saving (as determined by the auditors) less
any reasonable costs properly incurred by the Company, Cinemasonline Limited or
the Buyer; and
	 
	 	8.1.2	 	the amount paid by the Warrantors under Clause 2 in respect of
the Tax Liability which gave rise to the Saving less any part of that amount
previously repaid to the Warrantors under any provision of this Tax Covenant or
otherwise.

 

 

Beachcroft Wansbroughs

	9.	 	BUYER’S COVENANT

	 	9.1	 	The Buyer shall pay to the Sellers an amount equal to any Company Tax Liability
which the Sellers are obliged to pay to a Taxation Authority relating to any of the
following events occurring or deemed to occur after Completion:

	 	9.1.1	 	the Company, Cinemasonline Limited or any member of the
Buyer’s tax group failing to pay any amount of Tax to which it is liable to the
extent that such Tax Liability arises in circumstances where the Buyer would
not have been entitled to make a claim against the Warrantors under Clause 2 of
this Tax Covenant had such Tax Liability been paid by the Company,
Cinemasonline Limited or the relevant member of the Buyer’s tax group.
	 
	 	9.1.2	 	the making by the Company, Cinemasonline Limited or any member
of the Buyer’s tax group of any payment or deemed payment which is treated as a
chargeable payment for the purposes of section 214 ICTA where the Company,
Cinemasonline Limited or the relevant member of the Buyer’s tax group was aware
or ought reasonably to have been aware that such payment would give rise to
such Tax Liability;
	 
	 	9.1.3	 	the Company, Cinemasonline Limited or any member of the
Buyer’s tax group ceasing to be resident in the United Kingdom or such other
country as that relevant company resides for Taxation purposes.

	 	9.2	 	Any payment made by the Buyer under paragraph 9.1 above shall be made on or
before the fifth Business Day before the last day on which the relevant payment of
Taxation is due to be made to the relevant Taxation Authority.
	 
	 	9.3	 	The Buyer shall pay to the Sellers an amount equal to all costs and expenses
reasonably and properly incurred by the Sellers in connection with such Tax Liability
as described in Clause 9.1 above or any action taken under this Clause 9.

 

 

Beachcroft Wansbroughs

SCHEDULE 5

The Property

The Lease

Leasehold Properties with unregistered titles

	 	 	 
	Present lessee (owner)

	 	UK Theatres Online Limited
	Date of lease

	 	Today’s date
	Parties

	 	Clifford House 2002 Limited (1) and UK Theatres Online Limited (2)
	Term

	 	3 years (break on 12 months’ notice)
	Current rental

	 	£32,400 per annum
	Short description

	 	Basement, 1st and 2nd Floor, 34/36 Orchard
Road, St. Anne’s on Sea, Lancashire
	Use

	 	Offices within A2 and/or B1 usage

 

 

Beachcroft Wansbroughs

SCHEDULE 6

The Buyer will in good faith co-operate and will procure that the Company and Spring Leisure
Limited and www.co.uk Limited will also co-operate in good faith with Jeffrey Spector so as to
identify together all Overpayments made to them prior to Completion and which remain treated as
such as at the date of Completion and to take such steps as can reasonably be taken at no
significant cost to them (other than consequential Taxation) to ensure that such Overpayments are
converted into sales within 12 months after Completion.

An amount equal to the “net of value added tax” element of any sum which was previously treated as
an Overpayment but has prior to the first anniversary of Completion been converted into a sale
during the year after completion shall become payable to the Sellers as additional consideration
pursuant to clause 3.3 and such sums shall as soon as determined be payable to the Sellers from the
Escrow Account in accordance with the terms of the Escrow Letter.

The Buyer and Jeffrey Spector shall use their respective best endeavours to agree the amount
payable as soon as practicable after 28 February 2006 and upon agreement such sum as has been
agreed to be payable shall be paid by means of a release from the Escrow Account.

A second payment will be made as soon as practicable after 28 February 2007 to take account of
all further conversions into sales prior to the first anniversary of Completion.

 

 

Beachcroft Wansbroughs

SIGNATURE PAGES

	 	 	 	 	 
	SIGNED (but not delivered until the date hereof) as a	)	 
	Deed on behalf of CINEMASOURCE UK LIMITED	)	/s/ Mitchell Rubenstein
	 

	 	 	 	 
	in the presence of:- 	)	(Signature)
	 
	 	 	 	 
	
	 	 	 	22 November 2005
	 

	 	 	 	 
	WITNESS:
 

	 	 	 	          (Date)
	Signature:

	 	/s/ James Moakley	 	 
	Name:

	 	James Moakley	 	 
	Address:

	 	Hollywood Media Corp.	 	 
	 

	 	2255 Glades Road, Suite 221A	 	 
	 

	 	Boca Raton, FL 33431	 	 
	Occupation:

	 	Attorney	 	 
	(PLEASE COMPLETE IN CAPITALS)	 	 

	 	 	 	 	 	 	 
	SIGNED (but not delivered until the date hereof) as a 	)	 	 	 
	Deed by JEFFREY SPECTOR in the presence of:- 	)	 	 	/s/ Jeffrey Spector
	 	 	 	 	 
	 

	 	 	 	 	 	(Signature)
	 
	 	 	 	 	 	 
	WITNESS:
	 	 	 	 	 	 
	Signature:

	 	/s/ Kevin Philbin	 	 	 	 
	 

	 	 	 	 	 	 
	Name:

	 	Kevin Philbin
	 	 	 	(Date)
	Address:

	 	76 Cross Street	 	 	 	 
	 

	 	Manchester	 	 	 	 
	 

	 	M2 4JU	 	 	 	 
	Occupation:

	 	Solicitor	 	 	 	 
	(PLEASE COMPLETE IN CAPITALS)	 	 	 	 
	 
	 	 	 	 	 	 
	SIGNED (but not delivered until the date hereof) as a 	)	 	 	 
	Deed by JANETTE ERSKINE in the presence of:- 	)	 	 	/s/ Janette Erskine
	 	 	 	 	 
	 

	 	 	 	 	 	(Signature)
	 
	 	 	 	 	 	 
	WITNESS:
	 	 	 	 	 	 
	Signature:

	 	/s/ S. Aldred	 	 	 	 
	 

	 	 	 	 	 	 
	Name:

	 	S. Aldred
	 	 	 	(Date)
	Address:

	 	182 Kirkstone Drive	 	 	 	 
	 

	 	Thornton Cleveleys	 	 	 	 
	 

	 	FY5 1QJ	 	 	 	 
	Occupation:

	 	Credit Control	 	 	 	 
	(PLEASE COMPLETE IN CAPITALS)	 	 	 	 

 

 

Beachcroft Wansbroughs

	 	 	 	 	 	 	 
	SIGNED (but not delivered until the date hereof) as a 	)	 	 	 
	Deed by MALCOLM JOHNSON in the presence of:- 	)	 	 	/s/ Jeffrey Spector
	 	 	 	 	 
	 

	 	 	 	 	 	(Signature)
	 
	 	 	 	 	 	 
	WITNESS:
	 	 	 	 	 	 
	Signature:

	 	/s/ Kevin Philbin	 	 	 	 
	 

	 	 	 	 	 	 
	Name:

	 	Kevin Philbin
	 	 	 	(Date)
	Address:

	 	76 Cross Street	 	 	 	 
	 

	 	Manchester	 	 	 	 
	 

	 	M2 4JU	 	 	 	 
	Occupation:

	 	Solicitor	 	 	 	 
	(PLEASE COMPLETE IN CAPITALS)	 	 	 	 
	 
	 	 	 	 	 	 
	SIGNED (but not delivered until the date hereof) as a	)	 	 	 
	Deed by MITCHELL CLIFFORD MICHAEL	)	 	 	/s/ Kevin Philbin
	 	 	 	 	 
	CARTWRIGHT in the presence of:- 	)	 	 	(Signature)
	 
	 	 	 	 	 	 
	WITNESS:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Signature:

	 	/s/ Jeffrey Spector
	 	 	 	(Date)
	Name:

	 	Jeffrey Spector	 	 	 	 
	Address:

	 	255 Clifton Drive South	 	 	 	 
	 

	 	Latham, St. Anne’s, Lancashire	 	 	 	 
	 

	 	England, FY8 1HW	 	 	 	 
	Occupation:

	 	Director	 	 	 	 
	(PLEASE COMPLETE IN CAPITALS)	 	 	 	 
	 
	 	 	 	 	 	 
	SIGNED (but not delivered until the date hereof) as a 	)	 	 	 
	Deed by DAVID BROWN in the presence of:- 	)	 	 	/s/ Jeffrey Spector
	 	 	 	 	 
	 

	 	 	 	 	 	(Signature)
	WITNESS:
	 	 	 	 	 	 
	Signature:

	 	/s/ Kevin Philbin	 	 	 	 
	 

	 	 	 	 	 	 
	Name:

	 	Kevin Philbin
	 	 	 	(Date)
	Address:

	 	76 Cross Street	 	 	 	 
	 

	 	Manchester	 	 	 	 
	 

	 	M2 4JU	 	 	 	 
	Occupation:

	 	Solicitor	 	 	 	 
	(PLEASE COMPLETE IN CAPITALS)	 	 	 	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Beachcroft Wansbroughs
	 
	SIGNED (but not delivered until the date hereof) as a	 	 	)	 	 	 
	Deed by SAM DRURY in the presence of:-	 	 	)	 	 	 
	 

	 	 	 	 	 	 	 	/s/ Jeffrey Spector
 
 
(Signature)
	WITNESS:
	 	 	 	 	 	 	 	 
	Signature:

	 	/s/ Kevin Philbin
	 	 	 	 	 	 
 
(Date)
	Name:

	 	Kevin Philbin	 	 	 	 	 	 
	Address:

	 	76 Cross Street	 	 	 	 	 	 
	 

	 	Manchester	 	 	 	 	 	 
	 

	 	M2 4JU	 	 	 	 	 	 
	Occupation:

	 	Solicitor	 	 	 	 	 	 
	(PLEASE COMPLETE IN CAPITALS)	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SIGNED (but not delivered until the date hereof) as a	 	 	)	 	 	 
	Deed by WAYNE HARWOOD in the presence of:-	 	 	)	 	 	 
	 

	 	 	 	 	 	 	 	/s/ Jeffrey Spector
 
 
(Signature)
	WITNESS:
	 	 	 	 	 	 	 	 
	Signature:

	 	/s/ Kevin Philbin
	 	 	 	 	 	 
 
(Date)
	Name:

	 	Kevin Philbin	 	 	 	 	 	 
	Address:

	 	76 Cross Street	 	 	 	 	 	 
	 

	 	Manchester	 	 	 	 	 	 
	 

	 	M2 4JU	 	 	 	 	 	 
	Occupation:

	 	Solicitor	 	 	 	 	 	 
	(PLEASE COMPLETE IN CAPITALS)	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SIGNED (but not delivered until the date hereof) as a	 	 	)	 	 	 
	Deed by TERRY HENNIGAN in the presence of:-	 	 	)	 	 	 
	 

	 	 	 	 	 	 	 	/s/ Jeffrey Spector
 
 
(Signature)
	WITNESS:
	 	 	 	 	 	 	 	 
	Signature:

	 	/s/ Kevin Philbin
	 	 	 	 	 	 
 
(Date)
	Name:

	 	Kevin Philbin	 	 	 	 	 	 
	Address:

	 	76 Cross Street	 	 	 	 	 	 
	 

	 	Manchester	 	 	 	 	 	 
	 

	 	M2 4JU	 	 	 	 	 	 
	Occupation:

	 	Solicitor	 	 	 	 	 	 
	(PLEASE COMPLETE IN CAPITALS)	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Beachcroft Wansbroughs
	 
	SIGNED (but not delivered until the date hereof) as a	 	 	)	 	 	 
	Deed by PHILLIP HOLMES in the presence of:-	 	 	)	 	 	 
	 

	 	 	 	 	 	 	 	/s/ Jeffrey Spector
 
 
(Signature)
	WITNESS:
	 	 	 	 	 	 	 	 
	Signature:

	 	/s/ Kevin Philbin
	 	 	 	 	 	 
 
(Date)
	Name:

	 	Kevin Philbin	 	 	 	 	 	 
	Address:

	 	76 Cross Street	 	 	 	 	 	 
	 

	 	Manchester	 	 	 	 	 	 
	 

	 	M2 4JU	 	 	 	 	 	 
	Occupation:

	 	Solicitor	 	 	 	 	 	 
	(PLEASE COMPLETE IN CAPITALS)	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SIGNED (but not delivered until the date hereof) as a	 	 	)	 	 	 
	Deed on behalf of LONECROFT PLC in the	 	 	)	 	 	 
	presence of:-

	 	 	 	 	)	 	 	/s/ Kevin Philbin
 
 
(Signature)
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	WITNESS:
	 	 	 	 	 	 	 	 
	Signature:

	 	/s/ Jeffrey Spector
	 	 	 	 	 	 
 
(Date)
	Name:

	 	Jeffrey Spector	 	 	 	 	 	 
	Address:

	 	255 Clifton Drive South	 	 	 	 	 	 
	 

	 	Latham, St. Anne’s, Lancashire	 	 	 	 	 	 
	 

	 	England, FY8 1HW	 	 	 	 	 	 
	Occupation:

	 	Director	 	 	 	 	 	 
	(PLEASE COMPLETE IN CAPITALS)	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SIGNED (but not delivered until the date hereof) as a	 	 	)	 	 	 
	Deed by GILLIAN POWER in the presence of:-	 	 	)	 	 	 
	 

	 	 	 	 	 	 	 	/s/ Jeffrey Spector
 
 
(Signature)
	WITNESS:
	 	 	 	 	 	 	 	 
	Signature:

	 	/s/ Kevin Philbin
	 	 	 	 	 	 
 
(Date)
	Name:

	 	Kevin Philbin	 	 	 	 	 	 
	Address:

	 	76 Cross Street	 	 	 	 	 	 
	 

	 	Manchester	 	 	 	 	 	 
	 

	 	M2 4JU	 	 	 	 	 	 
	Occupation:

	 	Solicitor	 	 	 	 	 	 
	(PLEASE COMPLETE IN CAPITALS)	 	 	 	 	 	 

 

 

	 	 	 	 	 
	 	Beachcroft Wansbroughs
	SIGNED (but not delivered until the date hereof) as a 	) 	 
	Deed by STEVEN RICHARDSON in the presence of:- 	) 	 
	 

	 	 	 	/s/ Jeffrey Spector
	 

	 	 	 	 
	 

	 	 	 	(Signature)
	WITNESS:
	 	 	 	 
	Signature:

	 	/s/ Kevin Philbin	 	 
	 

	 	 	 	 
	Name:

	 	Kevin Philbin	 	(Date)
	Address:

	 	76 Cross Street	 	 
	 

	 	Manchester	 	 
	 

	 	M2 4JU	 	 
	Occupation:

	 	Solicitor	 	 
	(PLEASE COMPLETE IN CAPITALS)	 	 

	 	 	 	 	 
	SIGNED (but not delivered until the date hereof) as a 	) 	 
	Deed by JEFFREY TENNANT in the presence of:- 	) 	 
	 

	 	 	 	/s/ Jeffrey Spector
	 

	 	 	 	 
	 

	 	 	 	(Signature)
	WITNESS:
	 	 	 	 
	Signature:

	 	/s/ Kevin Philbin	 	 
	 

	 	 	 	 
	Name:

	 	Kevin Philbin	 	(Date)
	Address:

	 	76 Cross Street	 	 
	 

	 	Manchester	 	 
	 

	 	M2 4JU	 	 
	Occupation:

	 	Solicitor	 	 
	(PLEASE COMPLETE IN CAPITALS)	 	 

	 	 	 	 	 
	SIGNED (but not delivered until the date hereof) as a)	) 	 
	Deed by BRADLEY WHITE in the presence of:- 	) 	 
	 

	 	 	 	/s/ Jeffrey Spector
	 

	 	 	 	 
	 

	 	 	 	(Signature)
	WITNESS:
	 	 	 	 
	Signature:

	 	/s/ Kevin Philbin	 	 
	 

	 	 	 	 
	Name:

	 	Kevin Philbin	 	(Date)
	Address:

	 	76 Cross Street	 	 
	 

	 	Manchester	 	 
	 

	 	M2 4JU	 	 
	Occupation:

	 	Solicitor	 	 
	(PLEASE COMPLETE IN CAPITALS)	 	 

 

 

	 	 	 	 	 
	 	Beachcroft Wansbroughs
	SIGNED (but not delivered until the date hereof) as a	) 	 
	Deed by ELAINE PATRICE SPECTOR in the presence of:- 	) 	 
	 

	 	 	 	/s/ Jeffrey Spector
	 

	 	 	 	 
	 

	 	 	 	(Signature)
	WITNESS:
	 	 	 	 
	Signature:

	 	/s/ Kevin Philbin	 	 
	 

	 	 	 	 
	Name:

	 	Kevin Philbin	 	(Date)
	Address:

	 	76 Cross Street	 	 
	 

	 	Manchester	 	 
	 

	 	M2 4JU	 	 
	Occupation:

	 	Solicitor	 	 
	(PLEASE COMPLETE IN CAPITALS)	 	 

	 	 	 	 	 
	SIGNED (but not delivered until the date hereof) as a	) 	 
	Deed by GENEVA CARTWRIGHT in the presence of:- 	) 	 
	 

	 	 	 	/s/ Kevin Philbin
	 

	 	 	 	 
	 

	 	 	 	(Signature)
	WITNESS:
	 	 	 	 
	 

	 	 	 	 
	Signature:

	 	/s/ Jeffrey Spector
	 	(Date)
	Name:

	 	Jeffrey Spector	 	 
	Address:

	 	255 Clifton Drive South	 	 
	 

	 	Latham, St. Anne’s, Lancashire	 	 
	 

	 	England, FY8 1HW	 	 
	Occupation:

	 	Director	 	 
	(PLEASE COMPLETE IN CAPITALS)	 	 

	 	 	 	 	 
	SIGNED (but not delivered until the date hereof) as a	) 	 
	Deed by CLIFFORD HOUSE in the presence of:- 	) 	 
	 

	 	 	 	/s/ Jeffrey Spector
	 

	 	 	 	 
	 

	 	 	 	(Signature)
	WITNESS:
	 	 	 	 
	Signature:

	 	/s/ Jeffrey Spector
	 	(Date)
	Name:

	 	Jeffrey Spector	 	 
	Address:

	 	255 Clifton Drive South	 	 
	 

	 	Latham, St. Anne’s, Lancashire	 	 
	 

	 	England, FY8 1HW	 	 
	Occupation:

	 	Director	 	 
	(PLEASE COMPLETE IN CAPITALS)	 	 

 

 

Beachcroft Wansbroughs

	 	 	 	 	 	 	 
	SIGNED (but not delivered until the date hereof) as a	)	 	 	 
	Deed on behalf of UK THEATRES ONLINE 	)	 	 	/s/ Jeffrey Spector
	 	 	 	 	 
	LIMITED in the presence of:- 	)	 	 	(Signature)
	 
	 	 	 	 	 	 
	WITNESS:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Signature:

	 	/s/ Kevin Philbin
	 	 	 	(Date)
	Name:

	 	Kevin Philbin	 	 	 	 
	Address:

	 	76 Cross Street	 	 	 	 
	 

	 	Manchester	 	 	 	 
	 

	 	M2 4JU	 	 	 	 
	Occupation:

	 	Solicitor	 	 	 	 
	(PLEASE COMPLETE IN CAPITALS)	 	 	 	 
	 
	 	 	 	 	 	 
	SIGNED (but not delivered until the date hereof) as a	)	 	 	 
	Deed by JULIAN LATHAM in the presence of:- 	)	 	 	/s/ Jeffrey Spector
	 	 	 	 	 
	 

	 	 	 	 	 	(Signature)
	 
	 	 	 	 	 	 
	WITNESS:
	 	 	 	 	 	 
	Signature:

	 	/s/ Kevin Philbin	 	 	 	 
	 

	 	 	 	 	 	 
	Name:

	 	Kevin Philbin
	 	 	 	(Date)
	Address:

	 	76 Cross Street	 	 	 	 
	 

	 	Manchester	 	 	 	 
	 

	 	M2 4JU	 	 	 	 
	Occupation:

	 	Solicitor	 	 	 	 
	(PLEASE COMPLETE IN CAPITALS)	 	 	 	 
	 
	 	 	 	 	 	 
	SIGNED (but not delivered until the date hereof) as a	)	 	 	 
	Deed by JEANETTE TAYLOR in the presence of:- 	)	 	 	/s/ Jeffrey Spector
	 	 	 	 	 
	 

	 	 	 	 	 	(Signature)
	 
	 	 	 	 	 	 
	WITNESS:
	 	 	 	 	 	 
	Signature:

	 	/s/ Kevin Philbin	 	 	 	 
	 

	 	 	 	 	 	 
	Name:

	 	Kevin Philbin
	 	 	 	(Date)
	Address:

	 	76 Cross Street	 	 	 	 
	 

	 	Manchester	 	 	 	 
	 

	 	M2 4JU	 	 	 	 
	Occupation:

	 	Solicitor	 	 	 	 
	(PLEASE COMPLETE IN CAPITALS)	 	 	 	 

 

 

Beachcroft Wansbroughs

	 	 	 	 	 	 	 
	SIGNED (but not delivered until the date hereof) as a	)	 	 	 
	Deed by DAVID BRYAN WILLIAMS in the presence 	)	 	 	/s/ Jeffrey Spector
	 	 	 	 	 
	of:- 
	 	 	)	 	 	(Signature)
	 
	 	 	 	 	 	 
	WITNESS:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Signature:

	 	/s/ Kevin Philbin
	 	 	 	(Date)
	Name:

	 	Kevin Philbin	 	 	 	 
	Address:

	 	76 Cross Street	 	 	 	 
	 

	 	Manchester	 	 	 	 
	 

	 	M2 4JU	 	 	 	 
	Occupation:

	 	Solicitor	 	 	 	 
	(PLEASE COMPLETE IN CAPITALS)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00094-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00094-of-00352.parquet"}]]