Granada Group Ltd (Forte)

1. Description of merger: Granada Group plc and Forte plc

2. Date of original undertakings: Press release: 9 July 1996

3. Companies giving undertakings: Granada Group Ltd

4. Details of undertakings: Divestment undertakings

(i) Granada shall ensure that by 25 April 1997, or by such other date as may be agreed with the Secretary of State, the business comprising all interests (for the avoidance of doubt including all interests in the name 'Welcome Break' but excluding any interests in the Names (means the 'Happy Eater', 'Little Chef' and 'Travelodge') held directly or indirectly by Granada or any of its Subsidiaries in:

(a) the Motorway Service Areas;

(b) the Budget Hotels (the Budget hotels located at sixteen of the Motorway Service Areas (such hotels being identified in schedule 1 hereto by means of an asterisk under the column headed 'Budget Hotel' opposite the location of the Motorway in question);

(c) the sites listed in schedule 2 hereto, the interests in question being identified in the third column of schedule 2 hereto, opposite the location of the site in question;

shall be sold to a person or persons not under Granada's control.

'Control' is to be construed in accordance with section 65 of the Act, and in particular is to be interpreted as including control of policy and material influence over policy;

'the Motorway Service Areas' means the motorway service areas listed in schedule 1 hereto;

'Subsidiary' has the same meaning as in section 736 of the Companies Act 1985.

(ii) After the transfer of any interest in the Business, or of any part thereof, except with the prior written consent of the Secretary of State, Granada shall not, directly or indirectly, acquire any interest in the Business or any part thereof.

(iii) Granada shall ensure that at least 14 days notice is given to the Director of the identify of any person or persons to whom the Business or any part thereof is to be sold, and shall not effect or permit such sale without the Director's prior written consent.

(iv) Granada shall not, and shall procure that its Subsidiaries shall not, take any step which might impede the fulfilment of the undertaking in clause 1 above.

(v) (a) subject to paragraph (b) below, Granada shall procure that any person or persons to whom the Business or any part thereof is sold, or any entity controlled by such person or persons, shall not, whether by virtue of any such sale or otherwise, acquire the right to use, or any other right in any of the Names;

(b) nothing in paragraph (1) above shall prevent Granada or any of its Subsidiaries from allowing any person or persons to whom the Business or any part thereof is sold, or any entity controlled by such person or persons, to use any of the Names for a period not exceeding six months from the date of completion of the sale in question.

(vi) Except with the prior written consent of the Director, Granada shall not, and shall procure that its Subsidiaries shall not, pending fulfilment of the undertaking in clause 5(1) above:

(a) on any date offer for sale at any of the Motorway Service Areas any catering items at a price which would cause the aggregate value of all catering items sold at the Motorway Service Areas on that date ('the Subsequent Date') to be more than the aggregate value of those catering items at the prices prevailing on 21 March 1996; or

(b) charge for a room at the Budget Hotels a rate which is higher than the rate which was charged on 21 March 1996.

(2) for the purposes of paragraph (1) sub-paragraph (a) above:

(a) the aggregate value of all catering items sold at the Motorway Service Areas on the Subsequent Date at the prices prevailing on 21 March 1996 shall be determined by adding together the sums derived by applying the following formula to each offered for sale at any of the Motorway Service Areas on the Subsequent Date:

A x B

where:

A is the number sold of that catering item in the month immediately preceding the month which includes the Subsequent Date; and

B is the price at which Granada offered that catering item for sale at any of the Motorway Service Areas on 21 March 1996;

(b) the aggregate value of all catering items sold at the Motorway Service Areas on the Subsequent Date shall be determined by adding together the sums derived by applying the following formula to each catering item offered for sale at any of the Motorway Service Areas on the Subsequent Date:

A x B

where:

A is the number sold of that catering item in the month immediately preceding the month which includes the Subsequent Date; and

B is the price at which Granada offered that catering item for sale at any of the Motorway Service Areas on the Subsequent Date:

(c) 'catering item' shall mean an item within one of the following eight classes of goods:

• starters
• beverages
• sandwiches
• breakfasts
• hot food
• salads
• bakery and sweets
• ice cream, ice lollies and other sundries

(3) Without prejudice to his duty, under section 75 of the Act, to keep under review the carrying out of these undertakings, the Director shall, if so requested by Granada, consider whether the undertaking in paragraph (1) sub-paragraph (a) above remains appropriate in the light of any increase in the costs incurred by Granada, or by any its Subsidiaries, in acquiring a (as defined in paragraph (2) sub-paragraph (c) above).

5. Date of amendments: N/A

6. SIC code: 55.30 (Restaurants)

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