Disclosure letter: First Part: General disclosure- matters of public record in public domain (pre-completion property searches etc).

Buyer deemed to have knowledge of everything in GD whether he has checked it through or not. Second Part: Specific Disclosure- would be breach of warranty if not disclosed and relate to specific warranties. Sellers solicitors draft DL, this happens as soon as warranties are clear (acquisition document is in good shape). Disclosure bundle with letter. Seller/their solicitor signs at exchange. 2 Copies required, sit down with other side and check that everything is the same. Infiniteland no standard for disclosure (used to be fair) now whatever is agreed in the acquisition document. Full and fair is what the buyer would want. Daniel Reeds cant disclose by omission must be a positive statement (leaving item out of list of licenses). Levison v Farin no change in net asset value, but there had been as designer unwell not sufficient that buyer knew designer was unwell to know about value- fair disclosure needed to be sufficiently precise. New Hearts v Cosmopolitan complex document disclosed, but disclosure must be clearly signposted. Pending includes matters that have not had proceedings brought against. If acquisition document says Buyer can sue even if he has knowledge, court will likely penalize for not mitigating and buying company for lower amount. NB actual, constructive (what buyer should know), imputed (what buyers agents know). Buyer issues: time to review disclosure (cut off point) [eg search companies stutotory books/companies house/minutes for the last two years up to date X (before the date of this disclosure letter)]? Too narrow/broad? Scrap anything that includes due diligence in general disclosure!

1. All matters which would be revealed by a search of the file of the Company and each of the Subsidiaries at Companies House at the date of this Disclosure Letter and the contents of the minute books and other statutory books of the Company and each of the Subsidiaries, all of which have been made available to the Buyer. 10 years for stat books- a lot of material. Limit to two years from date x and cut it off at date y (possibly a week before this letter) 2. All matters which would be apparent from an inspection of the Properties at the date of this Disclosure Letter. Make specific disclosure about surveyors report disclosed or fairly disclosed in the surveyors report 3. Any matters referred to in correspondence between the Company and/or the Seller and/or their advisers and the Buyer and/or its advisers, together with all enclosures attached to such correspondence and all matters referred to in such enclosures. Loads of correspondence here- too broad, so reject it. Specific disclosures relating to issues in this little lot. Advise of breaches specifically not generally. 4. All matters disclosed to the Buyer and its advisers or which ought reasonably to have been revealed in the course of the due diligence investigation of the Group by the Buyer and its advisers and all matters disclosed in the report produced by the Buyers accountants on the business and affairs of the Company and its Subsidiaries. Strike it out! You undertake the due diligence, this is not designed to indemnify/exculpate the seller but to inform the buyer. 5. All matters which are a matter of public record or within the public domain. Too broad, take out public domain and limit public records to land and TM registry as both relevant in this case, cut off searches to one week before letter. 6. All information contained or matters referred to in the documents in the bundle of documents annexed to this letter and initialled by or on behalf of the parties to this Disclosure Letter for the purposes of identification (the Disclosure Bundle).

Seller low standard in acquisition agreement wanted. Disclose everything to a high standard and fully, even if buyer knows as buyer cant sue if has knowledge. Buyer- wants high standard of disclosure. Seeks high disclosure in practice too, details, clarity, review all docs, timely. Seek indemnity/price reductions where poss. VENDOR PROTECTION Vendor protection: maximum and minimum value limit on claims, time limit, entire agreement clause, seller excludes liability for buyers negligence, conduct of 3p claims, claim under insurance first, notice to seller if bringing a claim, no double recovery. Buyer shall use its best (reasonable if youre the buyer) endeavours to mitigate any loss which may give rise to a Claim (make sure this is defined, dont want this to cover indemnity claims). 3P Conduct example (when indemnity covers a 3p action therefore seller wants to litigate rather than just pay out): 8.1 The Buyer shall inform the Seller in writing of any claim by any third party (Third Party Claim) which comes to the notice of the Buyer, or any other member of the Buyer Group, whereby it appears that the Seller is or is likely to become liable under any Claim [or Indemnity Claim] within seven days from the day on which such Third Party Claim comes to the notice of the Buyer or other member of the Buyer Group. 8.2 Subject to the Buyer being indemnified and secured to its reasonable satisfaction in accordance with paragraph 8.4 of this Schedule [INSERT NUMBER OF SCHEDULE DEALING WITH SELLER'S LIMITATION AND CONDUCT OF CLAIMS]: (a) The Buyer shall take such action and give such information and assistance as the Seller may reasonably request in writing to avoid, dispute, resist, mitigate, compromise or defend any Third Party Claim and to appeal against any judgment given in respect thereof including (without limitation) applying to postpone so far as legally possible the payment of any Taxation; and (b) On the written request of the Seller, the sole conduct of any legal proceedings of whatsoever nature arising out of any Third Party Claim (Proceedings) shall be delegated to the Seller. For this purpose, the Buyer shall give or procure to be given to the Seller all such assistance as the Seller may reasonably require and shall appoint such solicitors and other professional advisers as the Seller may nominate to act of behalf of the Buyer in accordance with the Seller's instructions. (Sometimes joint conduct as risk to buyer here- could ruin relationship with 3p customer or give bad press etc) 8.3 the Seller shall indemnify and secure the Buyer to its reasonable satisfaction in respect of all costs, charges and expenses reasonably and properly incurred by the Buyer as a consequence of any actions taken at the request of the Seller pursuant to [paragraph 8.2(b)OR paragraph 8.2] of this Schedule Time Limit Tax warranties 7 years, any other claim 2. Maximum Cap The aggregate liability of the seller in respect of any claims for any breach of the warranties shall not in any event exceed the purchase price. Minimum Not be liable unless the amount of the claim when aggregated with all other claims made on the same occasion is equal to or exceeds X in which case the seller shall be liable for the excess only, or, the amount of any individual claim is equal to or exceed X