Dated July 1997
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE US SECURITIES
ACT OF 1933 AS AMENDED (THE "ACT") AND MAY NOT BE OFFERED OR SOLD IN THE US OR
TO US PERSONS (AS DEFINED IN RULE 902 PROMULGATED UNDER THE ACT) UNLESS THE
SECURITIES ARE REGISTERED UNDER THE ACT OR AN EXEMPTION FROM THE REQUIREMENTS OF
THE ACT IS AVAILABLE.
AGREEMENT
relating to the entire issued
share capital of
XXXXXX XXXXXX LIMITED
AK Warranty and Indemnity Limited (1)
TMP Worldwide Inc. (2)
ORCHARD
00 Xxxxxxxxxxx
Xxxxxx
XX0X 0XX
Tel - 0000 000 0000
Fax - 0000 000 0000
email - xxxxxxxxxx@xxxxx.xx.xx
Ref: 142/T009.11/NMD2891/#422085
CONTENTS
CLAUSE HEADING
1 Definitions and Interpretation
2 Conditions Precedent
3 The Sale Shares
4 Consideration
5 Position Pending Completion
6 Completion
7 Warranties
8 Warranties and Undertakings of the Purchaser
9 Non-Disclosure of Information
10 Permitted Disposal
11 Further Assurance and Attorney
12 Announcements and Information
13 General
14 Notices
15 Proper Law
CONTENTS
SCHEDULE HEADING
1 Particulars of the Current Shareholders and the Optionholders
2 Particulars of the Company and the Subsidiaries
3 Warranties
4 Deed of Indemnity
5 Particulars of Properties
6 Intellectual Property Rights
7 The Warrantor's Protection
8 Terms Relating to Retention
AGREED FORM DOCUMENTS:
Resignations of the Non-Executive Directors
Sale Notice and Transfer Deed
THIS AGREEMENT is made the day of July 1997
BETWEEN:
(1) AK WARRANTY AND INDEMNITY LIMITED of 00 Xxxxx Xxxxxx Xxxx, Xxxxxx XX0X
0XX (the "WARRANTOR"); and
(2) TMP WORLDWIDE INC. (incorporated under the laws of the State of Delaware)
whose principal office is at 0000 Xxxxxxxx, Xxx Xxxx XX 00000 XXX (the
"PURCHASER").
WHEREAS:
(A) Xxxxxx Xxxxxx Limited ("the Company") is a private limited company
incorporated in England on 14 November 1922 under No.185725. Further
particulars relating to the Company are contained in Part A of Schedule
2.
(B) The Company has at the date of this Agreement an issued share capital of
5,003,000 Ordinary Shares of 25 xxxxx each fully paid or credited as
fully paid which may change prior to Completion as a result of the
Reorganisation and Reconstruction of Share Capital (as defined in Clause
1).
(C) The Purchaser has agreed to grant to the Shareholders of the Company on
Completion a Right of Sale (as defined in Clause 3.1) (subject to the
satisfaction of certain conditions) to call upon the Purchaser to procure
that its subsidiary, TMP Worldwide Holdings Limited ("TMP") will purchase
their holdings of shares in the Company in the manner set out in this
Agreement.
(D) In order to permit the Purchaser to grant the above-mentioned Right of
Sale and so as to facilitate its exercise by the Selling Shareholders,
the Warrantor has agreed to use its reasonable endeavours to convene a
meeting of the Shareholders to pass a resolution disapplying the existing
pre-emption rights applicable on a transfer of shares and to use its
reasonable endeavours to procure that the Shareholders shall transfer the
whole of the issued share capital of the Company with full title
guarantee.
2
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement, unless the context otherwise requires:
"ACCOUNTS" means the audited consolidated profit and loss account of the
Company for the year ended on the Accounts Date and the audited
consolidated balance sheet of the Company at the Accounts Date together
with all notes, reports and other documents annexed thereto;
"ACCOUNTS DATE" means 30 September 1996;
"AUDITORS" means the auditors of the Company at the date hereof, namely
KPMG of 0, Xxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxx, XX0X 0XX;
"BUSINESS DAY" means a day (not being a Saturday) on which clearing banks
are open in the City of London for the transaction of all classes of
sterling banking business;
"COMPLETION" means completion of the sale and purchase as provided in
Clause 6;
"COMPLETION DATE" means the second Business Day following the
satisfaction or waiver of the last Condition to be satisfied or waived in
accordance with Clause 2;
"CONDITIONS" means the conditions precedent specified in Clause 2.1;
"CONNECTED PERSON" has the meaning ascribed thereto in s.839 ICTA;
"CONSIDERATION" has the meaning given thereto in Clause 4.1;
"CURRENT SHAREHOLDERS" means the individuals whose names and addresses
are set out in Part A of Schedule 1;
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"DEED OF INDEMNITY" means the deed in the form set out in Schedule 4;
"DIRECTOR" has the meaning assigned to it by s.741 Companies Xxx 0000 and
shall include a shadow director as defined by that section;
"DISCLOSURE LETTER" means the letter of even date herewith from the
Warrantor to the Purchaser in relation to the Warranties and the Deed of
Indemnity;
"EXCLUDED COMPANY" means the Xxxxxx Xxxxxx Employee Trust Limited;
"GROUP" means the Company and the Subsidiaries;
"INTELLECTUAL PROPERTY RIGHTS" means all rights in or arising out of
patents, trade, service and other marks, registered designs (and
applications for all of the same), copyrights, trade, product, brand and
business names, get-ups, inventions, discoveries, improvements, designs,
techniques, computer programs, trade secrets, technical and commercial
know-how and confidential processes and information and any licenses and
agreements relating to any of the same and the full right to all
intellectual property and legal protection relating to the same;
"LEGISLATION" includes any treaty, statute, statutory instrument,
directive, regulation, byelaw, official instruction and any like
legislative document, of the United Kingdom or of the other countries in
the world in which members of the Group are situated, namely the US,
Canada, Australia, France, the British Virgin Islands, Bermuda and the
Netherlands (unless the context otherwise requires);
"LETTER OF CREDIT" means the irrevocable standby letter or letters of
credit to be issued by the Bank of New York (or any other bank of similar
standing to the Bank of New York which is nominated by the Purchaser and
which is acceptable to the Warrantor (prior to Completion) or the Selling
Shareholders (after Completion), in each case, acting reasonably) to all
or any Selling Shareholders who may request Loan Notes at Completion;
"LOAN NOTES" means the loan notes substantially in the Agreed Form to be
created and issued by the Purchaser;
4
"LONGSTOP DATE" means 31 August 1997, or such later date as the Warrantor
and the Purchaser may agree;
"OPTIONHOLDERS" means the individuals whose names and addresses are set
out in Part B of Schedule 1;
"PERMITTED ASSIGNEES" means any spouse, other family members, existing or
new family trusts or beneficiaries thereof to whom the Current
Shareholders may transfer any Shares after the date of this Agreement and
before Completion;
"PRE-SALE DIVIDEND" means the dividend which is expected to be declared
and paid by the Company to the Shareholders prior to Completion in the
amount (excluding Advance Corporation Tax) of (pound)5,003,000;
"PROFITS" includes profits, gains, income, earnings, receipts, value and
any other amount or element (whether real, notional or deemed) on, or in
respect of or by reference to which any Tax is liable to be assessed or
charged or is payable;
"PROPERTIES" means the properties short particulars whereof are set out
in Parts A and B of Schedule 5;
"PURCHASER'S GROUP" means the Purchaser and any holding company or
subsidiary of the Purchaser for the time being and from time to time;
"PURCHASER'S SOLICITORS" means Orchard of 00 Xxxxxxxxxxx, Xxxxxx XX0X
0XX;
"REORGANISATION AND RECONSTRUCTION OF SHARE CAPITAL" means any
reorganisation and reconstruction of the share capital of the Company
which may be carried out prior to the Completion Date, including without
limit any stock dividend scheme (including any dividend declared and paid
for the purposes thereof) and consequent recapitalisation of the share
capital to give effect thereto;
"REPORTING ACCOUNTANTS" means Xxxxxxxx Xxxxx of Finsgate, 0-0 Xxxxxxxx
Xxxxxx, Xxxxxx XX0X 0XX;
5
"RETENTION" means the sum payable to the Retention Agent in accordance
with Clause 15.1(d)(ii);
"RETENTION AGENT" means Messrs Xxxx & Maw and Orchard;
"SALE NOTICE AND TRANSFER DEED" means the Deed in the Agreed Form
constituting notice by a Selling Shareholder to the Purchaser at any time
prior to the Longstop Date if the Selling Shareholder shall wish to
exercise the Right of Sale and pursuant to which such Selling Shareholder
shall agree to transfer his Sale Shares to the Purchaser;
"SALE SHARES" means, in aggregate, all of the Shares held by each Selling
Shareholder in respect of which the Right of Sale shall have been
exercised;
"SHARES" means all of the issued shares in the capital of the Company at
Completion, being the 5,003,000 ordinary shares of 25 xxxxx each in the
capital of the Company referred to in column (3) of Schedule 1, (being
together all of the issued shares in the capital of the Company held by
the Current Shareholders at the date of this Agreement) and any further
or other such shares owned by the Shareholders at the Completion Date in
right of or derived from or in respect of the existing share capital by
reason of the Reorganisation and Reconstruction of Share Capital or as a
result of any transfers by the Current Shareholders to their Permitted
Assignees;
"SEC" means the Securities Exchange Commission of the US;
"SELLING SHAREHOLDERS" means those Shareholders who exercise the Right of
Sale and elect to sell their Shares to the Purchaser in accordance with
Clause 3;
"SHAREHOLDERS" means the Current Shareholders and their Permitted
Assignees;
"THE STOCK EXCHANGE" means the London Stock Exchange Limited;
6
"SUBSIDIARIES" means the companies the names and particulars of which are
contained in Part B of Schedule 2 which are subsidiaries or subsidiary
undertakings of the Company;
"SUBSIDIARY" "HOLDING COMPANY" and "SUBSIDIARY UNDERTAKINGS" have the
meanings respectively assigned to them by ss.736 and 258 Companies Xxx
0000;
"TAX" means without limitation all forms of taxation and statutory,
governmental, state, provincial, local governmental and/or municipal
impositions, duties, contributions and levies in each case whether of the
United Kingdom or elsewhere whenever imposed or municipal impositions
duties and levies and all penalties, charges, costs and interest relating
thereto, including (without limitation) national insurance, community
charge, rates, special charge, special contribution and any amount
representing Tax which, for the avoidance of doubt, shall not include
stamp duty or stamp duty reserve tax, which shall be payable by the
Purchaser as a result of the acquisition by it of the Sale Shares from
the Selling Shareholders;
"TAX AUTHORITY" means any body whatsoever which is empowered to collect,
assess or administer any Tax;
"TAX LEGISLATION" means any Legislation providing for or imposing any
Tax;
"US" means the United States of America, its territories and possessions
and any state of the United States (including for the purposes hereof,
the District of Columbia);
"US PERSON" means:
(a) any natural person resident in the United States;
(b) any partnership or corporation organised or incorporated under the
laws of the United States;
(c) any estate of which any executor or administrator is a US Person;
7
(d) any trust of which any trustee is a US Person;
(e) any agency or branch of a foreign entity located in the United
States;
(f) any non-discretionary account or similar account (other than an
estate or trust) held by a dealer or other fiduciary for the
benefit or account of a US Person;
(g) any discretionary account or similar account (other than an estate
or trust) held by a dealer or other fiduciary organised,
incorporated, or (if an individual) resident in the United States;
and
(h) any partnership or corporation if:
(i) organised or incorporated under the laws of any foreign
jurisdiction; and
(ii) formed by a US Person principally for the purpose of investing
in securities not registered under the US Securities Act of
1993, unless it is organised or incorporated, and owned, by
accredited investors (as defined in Rule 501(a) under the said
Securities Act) who are not natural persons, estates or
trusts;
"WARRANTIES" means the warranties contained in Clause 7 and Schedule 3;
"WARRANTOR", "PURCHASER" AND "SHAREHOLDERS", shall include their
respective personal representatives, executors, successors and permitted
assigns pursuant to Clause 12.2; and
"WARRANTOR'S SOLICITORS" AND "THE COMPANY'S SOLICITORS" means Xxxx & Maw
of 00 Xxxxx Xxxxxx Xxxx, Xxxxxx XX0X 0XX.
1.2 The following abbreviations are used in this Agreement:
8
ABBREVIATION TERM
Companies Acts Companies Xxx 0000
Companies Consolidation (Consequential
Provisions) Xxx 0000
Part V of the Criminal Justice Xxx 0000
Companies Xxx 0000
CAA Capital Allowances Xxx 0000
FA Finance Act
FTA Fair Trading Act 1973
ICTA Income and Corporation Taxes Xxx 0000
IHTA Inheritance Tax Xxx 0000
TCGA Taxation of Chargeable Gains Xxx 0000
VATA Value Added Tax Xxx 0000
ACT Advance Corporation Tax (or other analogous
tax in a country in which the Group operates)
VAT Value Added Tax (or other analogous tax in a
country in which the Group operates).
1.3 References in this Agreement to any Legislation shall be construed as
references to such legislation as replaced, re-enacted, extended or
amended from time to time (whether before or after the date hereof) and
any past Legislation which it replaced, re-enacted, extended or amended
except to the extent that any such replacement, re-enactment, extension
or amendment would extend or increase the obligations or liabilities of
any one party to any other party under this Agreement.
1.4 The Schedules form an integral part of this Agreement and references to
"THIS AGREEMENT" shall be construed accordingly.
1.5 References to Recitals, Clauses and Schedules are, unless otherwise
stated, references to recitals to, clauses of and schedules to this
Agreement.
1.6 A document expressed to be "IN THE AGREED FORM" shall be to documents the
terms and conditions of which have been approved by each of the parties
and initialed by or on behalf of them.
9
1.7 Words in the singular include the plural and vice versa.
1.8 Words importing the masculine gender include the feminine and neuter and
vice versa.
1.9 References to persons include bodies corporate, unincorporated
associations, partnerships or an authority.
1.10 Headings and the use of bold type in this Agreement are for convenience
only and shall not affect the interpretation of this Agreement.
2. CONDITIONS PRECEDENT
2.1 The obligations of the Purchaser to procure that its subsidiary, TMP,
shall purchase the Sale Shares pursuant to the terms of this Agreement
(including, without limitation to the generality of the foregoing,
pursuant to Clause 3) are conditional on:
(a) the passing at an Extraordinary General Meeting of the Company of a
special resolution amending the Articles of Association of the
Company so as to remove all rights and restrictions thereunder to
have the Shares or any of them offered to the Shareholders for
purchase; and
(b) no other special resolution being passed save for any special
resolution (the terms of which will be provided to the Purchaser
as far in advance of the dispatch to Shareholders as is reasonably
possible) required to give effect to the Reorganisation and
Reconstruction of Share Capital provided that there is no
obligation on the Warrantor or on the Shareholders to pass such a
special resolution;
(c) subject to Clause 2.4, the receipt by the Purchaser or TMP from the
Warrantor or the Selling Shareholders of Sale Notice and Transfer
Deeds, Stock Transfer Forms (and Share Certificates therefor) duly
completed and/or executed (as the case may be) by Selling
Shareholders in respect of not less than 80.01 per cent of each
class of the Shares;
10
(d) all material permits, approvals, filings and consents required to
be obtained or made, and all waiting periods required or
contemplated to expire pursuant to the Xxxx Xxxxx Xxxxxx Antitrust
Improvements Act of 1976, prior to the consummation of the
acquisition shall have been obtained, made or expired, as the case
may be;
(e) the execution and completion of a management agreement between each
of the Selling Shareholders and the Warrantor.
2.2 If the Conditions are not fulfilled (or waived as provided below) on or
before the Longstop Date all rights and liabilities of the parties
hereunder shall cease and determine and no party shall have any claim
against any other party save in respect of any antecedent breach of this
Agreement.
2.3 The parties shall use all reasonable endeavours to procure the
fulfillment of the Conditions on or before the Longstop Date.
2.4 The Purchaser shall be entitled to waive Condition 2.1(c) on or before
the Longstop Date provided that the Purchaser receives Sale Notice and
Transfer Deeds and Stock Transfer Forms in respect of at least 75 per
cent of each class of the Shares. Under no circumstances shall the
Purchaser be entitled to purchase less than 75 per cent of each class of
the Shares.
3. THE SALE SHARES
3.1 In reliance on the Warranties herein contained, the Purchaser, on behalf
of itself and TMP, hereby grants to each of the Shareholders the right to
call upon TMP to purchase from such Shareholder all (but not part only)
of the Shares held by such Shareholder on the Completion Date (the "Right
of Sale"), exercisable in the manner described in Clause 3.2.
3.2 The rights conferred upon each Shareholder by the Right of Sale shall be
exercisable by such Shareholder at any time prior to the Longstop Date
(after which date the Right of Sale shall lapse), by such Shareholder
lodging (or procuring that
11
the Warrantor lodges) with the Purchaser or TMP (as the case may be), in
respect of such Shareholder's Shares:
(a) a duly completed Sale Notice and Transfer Deed;
(b) a duly completed and executed Stock Transfer Form; and
(c) the Share Certificate(s) therefor;
PROVIDED THAT such exercise shall only become effective upon the
satisfaction of the Condition set out in Clause 2.1(c) (the "Fundamental
Condition Precedent").
3.3 Effective exercise of the Right of Sale by the Selling Shareholders in
accordance with Clause 3.2 above shall cause to come into effect a
binding unconditional contract between TMP and the Selling Shareholders
for the sale by the Selling Shareholders and the purchase by TMP(which
the Purchaser shall procure):
(a) of the Shares, with full title guarantee, and free from all
options, liens, charges, encumbrances, equities and other third
party rights of any nature whatsoever and together with all accrued
benefits and rights attaching thereto as at the date thereof;
(b) for the Consideration; and
(c) in accordance with the provisions of Clause 6.1 (Completion).
3.4 The Purchaser or TMP shall not be obliged to complete the purchase of any
of the Sale Shares on Completion unless the purchase of at least 80.01
per cent of each class of the Shares (or such lesser amount in accordance
with Clause 2.4) is completed simultaneously.
3.5 In respect of the exercise of the Right of Sale by the Selling
Shareholders, the Warrantor hereby undertakes to the Purchaser to use its
reasonable endeavours to:
12
(a) convene an extraordinary general meeting of the Company for the
Shareholders to consider and, if thought fit, approve the special
resolutions referred to in Clause 2.1 (a);
(b) procure that all of the Shareholders exercise the Right of Sale in
respect of all of the Shares; and
(c) deliver to the Purchaser or TMP the Sale Notice and Transfer Deeds
and other documents lodged with it by the Selling Shareholders
pursuant to Clause 3.2 above as soon as it is able to satisfy the
Fundamental Condition Precedent.
4. CONSIDERATION
4.1 Subject to Clause 4.3, the consideration for the sale and purchase of all
of the Shares ("Consideration") shall be the sum of (pound)36,140,000
less the fees of all the Company's professional advisers if invoiced to
the Company which shall be satisfied in accordance with Clause 6.1(d).
4.2 If all of the Shares are not transferred to the Purchaser at Completion,
then the Consideration shall be reduced to the amount which is the same
proportion of (pound)36,140,000 as A is a proportion of B, where:
A is the amount of the issued share capital of the Company as at the
date of this Agreement which is, following any Reorganisation and
Reconstruction of Share Capital, represented by the Shares which
are, at Completion, transferred to the Purchaser; and
B is the total issued share capital of the Company as at the date of
this Agreement.
By way of example to illustrate the calculation of A, if in a
re-organisation referred to in the definition of A a 25p Share is split
into 5 Shares of 1p and 1 Share of 20p, then each of the 1p Shares
represents 1p of the issued share capital of the Company as at the date
of this Agreement and the 20p Share represents 20p of it.
13
4.3 Any Selling Shareholder who warrants to the Purchaser that it is not a US
Person may elect to take Loan Notes in satisfaction in whole or in part
of the Consideration due to him provided that the Purchaser shall only be
obliged to allot such Loan Notes if Selling Shareholders elect in
aggregate to take Loan Notes exceeding the amount of (pound)500,000 in
value. The Purchaser shall procure the issue to any such Selling
Shareholders of the Letter of Credit on Completion which, together with
any renewals thereof, the Purchaser shall procure are maintained in
force for the duration of the Loan Notes.
5. POSITION PENDING COMPLETION
5.1 From the date of this Agreement to Completion (or until the Conditions
fail to be fulfilled or waived in accordance with Clause 2), the
Warrantor hereby agrees to use its reasonable endeavours to ensure that
the Company (and each member of the Group) shall:
(a) continue its business in the ordinary and usual course and so as to
maintain the same as a going concern;
(b) not acquire or agree to acquire or dispose or agree to dispose of
any asset or stock (other than in the normal course of business) or
enter into any contract or arrangement involving expenditure or
liabilities in excess of (pound)250,000 in any rolling twelve month
period without the prior written consent of the Purchaser (such
consent not to be unreasonably withheld or delayed);
(c) other than in respect of (or as is required to fund) the Pre-Sale
Dividend, not make any payments out of any bank or deposit account
exceeding in aggregate (pound)100,000 (except for payments in the
ordinary course of business);
(d) other than in the normal course of business, not create or agree to
create any security over or encumber or agree to encumber any of
its assets or redeem or agree to redeem any existing security or
give or agree to give any material guarantees or indemnities;
14
(e) not materially to alter or agree to alter the terms of any existing
borrowing facilities (or arrange additional borrowing facilities)
or the terms of any employment or engagement for senior management
other than in the ordinary course of business;
(f) not, without the prior written consent of the Purchaser (not to be
unreasonably withheld or delayed), enter into any material
litigation;
(g) other than in respect of the Pre-Sale Dividend or in connection
with the Reorganisation and Reconstruction of Share Capital, not,
without the prior written consent of the Purchaser (not to be
unreasonably withheld or delayed), declare, pay or make any
dividend or other distribution of income or any distribution of
capital;
(h) other than as may be required by or to give effect to the
Reorganisation or Reconstruction of Share Capital, not create,
allot or issue any share or loan capital or acquire any shares in
any other company;
(i) other than as may be required by or to give effect to the
Reorganisation or Reconstruction of Share Capital, not, without the
prior written consent of the Purchaser (not to be unreasonably
withheld or delayed), pass any resolution of its members whether by
way of written resolution or in general meeting (other than those
specifically contemplated under this Agreement);
(j) not, without prior written consent of the Purchaser (not to be
unreasonably withheld or delayed), knowingly to permit any of its
insurance policies to lapse or do or omit to do anything to make
any policy of insurance void or voidable or cease to be in force
except in circumstances where the events causing the same are
outside the reasonable control of the Company;
(k) give all reasonable co-operation to the Purchaser so as to ensure a
smooth, orderly and efficient continuation of management of the
Group after Completion;
15
(l) (subject to any pre-existing obligations of confidentiality) at all
reasonable times from and after the date hereof until the
Completion, afford the Purchaser and its accountants, lawyers and
financial advisors all reasonable access to all books, accounts,
financial and other records and contracts of every kind; and
(m) at the Purchaser's expense, cooperate with the Purchaser in the
preparation of any filings which the Purchaser may be required to
make under the US Securities Exchange Act of 1934 (the "Exchange
Act") so as to assist the Purchaser to make such filings as may be
required to give effect to the terms of the transaction the subject
matter of this Agreement and shall provide the Purchaser and its
agents in writing with all relevant information about the Group
which the Purchaser reasonably requests in connection with the
preparation of such filings for such purpose.
For the avoidance of doubt, none of the above limitations shall prevent:
(i) the sale by the Company of the Excluded Company, subject to the
provisions of Clause 10, to any third party prior to Completion;
(ii) the declaration and subsequent payment of the Pre-Sale Dividend; or
(iii) the Reorganisation and Reconstruction of Share Capital.
5.2 The Purchaser shall be entitled to rescind this Agreement by notice in
writing to the Warrantor or the Warrantor's Solicitors (but without
prejudice to any other remedies which the Purchaser may have hereunder)
if prior to the Completion of this Agreement an encumbrancer (which,
without limiting the generality of the foregoing, shall include any bank
or lender to the Warrantor, the Company and/or the Group) takes
possession or a liquidator or a receiver or administrative receiver or
manager or sequestrator is appointed over the whole or any material part
of the undertaking and assets of the Company and/or any member of the
Group (which is material in the context of the Group as a whole) and
which is not discharged by the Company or any member of the Group within
7 days.
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6. COMPLETION
6.1 Completion shall take place immediately on the Completion Date at the
offices of the Purchaser's Solicitors at 00 Xxxxxxxxxxx, Xxxxxx XX0X 0XX
when all (but not part only unless either the Warrantor or the Purchaser
so agrees other than in the case of Clause 6.1(d)) of the following
business shall be transacted:
(a) the Warrantor shall use its reasonable endeavours to deliver or
cause to be delivered to the Purchaser or as it may direct:
(i) in respect of the Shares, the Sale Notice and Transfer Deeds
and the relative certificates together with duly executed
transfers thereof in favour of the Purchaser's subsidiary,
TMP Worldwide Holdings Limited;
(ii) in respect of those shares of the Subsidiaries which are not
registered in the name of the Company or another Subsidiary,
duly executed transfers endorsed with the relevant
certificate of the transferor that the shares comprised
therein are held by him as nominee of the Company (or the
relevant Subsidiary) together with the relative share
certificates;
(iii) all deeds and documents relating to the title of the Company
or any of the Subsidiaries to each of the Properties;
(iv) a letter from the Group's bankers in the Agreed Form
confirming at close of business on the last Business Day
preceding the Completion Date the level of indebtedness or
liability or contingent liability to such bankers on any
account;
(v) notices of resignation from the existing auditors of the
Company and each of the Subsidiaries containing statements
complying with s.394 Companies Xxx 0000;
17
(vi) the written resignations of those non-executive directors of
the Company and the Subsidiaries on terms that they shall
resign from their offices confirming that they have no
claims whatsoever against the Company or the relevant
Subsidiary on any account (including, without limitation,
for loss of office);
(vii) the Deed of Indemnity duly executed by the Warrantor;
(viii) an accurate list of the Shareholders as at Completion;
(ix) the Certificates of Incorporation, Minute Books, Registers,
Common Seals of the Company and the Subsidiaries;
(b) the Warrantor shall use its reasonable endeavours to procure that
the following business is transacted at meetings of the directors
of the Company and each of the Subsidiaries:
(i) the directors of the Company shall approve the transfers of
the Shares for registration and the entry of the transferees
in the register of members of the Company, in each case
subject only to the transfers being subsequently presented
duly stamped;
(ii) the situation of the registered office of the Company and
each of the Subsidiaries shall be changed to that nominated
by the Purchaser;
(iii) all existing mandates for the operation of the bank accounts
of the Company and each of the Subsidiaries shall be revoked
and new mandates issued giving authority to those persons
nominated by the Purchaser;
(iv) the accounting reference date of the Company and each of the
Subsidiaries shall, if required by the Purchaser, be changed
to that nominated by the Purchaser;
18
(v) any person nominated by the Purchaser for appointment as a
director or the secretary of the Company or any of the
Subsidiaries shall be so appointed; and
(vi) Messrs Xxxxxxxx Xxxxx shall be appointed to replace the
existing auditors of the Company and the Subsidiaries; and
(vii) such other business as the Warrantor and the Purchaser shall
agree.
(c) other than in respect of loans made to employee Shareholders
pursuant to their employment which do not exceed the sum of
(pound)5,000, the Shareholders and all Connected Persons of any of
them shall repay all loans made to them by the Group and all other
amounts due and outstanding at Completion;
(d) the Purchaser shall deliver (or procure delivery of):
(i) to the Warrantor's Solicitors (as agents for the Selling
Shareholders) a banker's draft drawn on a London clearing
bank for the amount referred to in Clause 4.1 less the sum
of (pound)3,000,000 (or such lesser amount adjusted in
accordance with Clauses 4.2). The receipt of the
Warrantor's Solicitors in respect thereof shall be a good
discharge of the Purchaser's obligation to make such
payment and the Purchaser shall not be concerned as to the
distribution thereof as between the individual Selling
Shareholders;
(ii) to the Retention Agent a banker's draft drawn on a London
clearing bank for the sum of (pound)3,000,000 (being the
balance of the cash element of the Consideration payable at
Completion). The Retention shall be retained by the
Retention Agent and applied in accordance with the
provisions of Schedule 8;
(iii) to the Warrantor's Solicitors, on behalf of the relevant
Selling Shareholders, a duly executed certificate in respect
of the Loan Notes in favour of such Selling Shareholders;
19
(iv) to the Warrantor's Solicitors on behalf of the relevant
Selling Shareholders in respect of the Loan Notes, the
Letter of Credit;
(v) to the Warrantor a Letter regarding the Xxxxxx Xxxxxx
trading name in the Agreed Form; and
(vi) evidence of the relevant corporate authority for the
Purchaser and TMP;
(e) the parties hereby undertake to each other to use their reasonable
endeavours to implement such variations to the Completion
requirements of this Clause 6.1 as may be required to (i) permit,
facilitate or give effect to the exercise by the Optionholders of
the options over the Shares listed in Part B of Schedule 1,
currently held by the Excluded Company (which options are
exercisable early in the event of a change of control of the
Company) and (ii) to the transfer by such Optionholders of their
Shares to TMP thereafter.
6.2 Neither party shall be obliged to proceed to Completion of this Agreement
unless the other party complies fully with its obligations under Clause
6.
6.3 If either the Warrantor or the Purchaser is unable to comply with any of
its obligations under Clause 6.1 on the Completion Date, either party
may, without thereby incurring any liability to the other or to the
Shareholders, in its absolute discretion and without prejudice to any
other right or remedy available to it:
(a) defer Completion to a date not more than 28 days after the
Completion Date (and so that the provisions of this Clause 6.3
shall apply to Completion as so deferred); or
(b) proceed to Completion so far as practicable but without prejudice
to the other party's rights; or
(c) treat this Agreement as repudiated by the other and, in the case of
the Warrantor, also by the Shareholders.
20
6.4 The Warrantor will use its reasonable endeavours to procure that
following Completion so long as any of the Sale Shares remain under each
of the Selling Shareholders' control, such shares and the dividends and
other distributions of profits or surplus or other assets in respect
thereof and all rights arising out of, or in connection therewith, shall
be held by the Selling Shareholder in trust for the Purchaser and its
successors in title and, that the Selling Shareholders will at all times
thereafter deal with and dispose of the Sale Shares, dividends,
distributions and rights as aforesaid as the Purchaser may direct.
7. WARRANTIES
7.1 The Warrantor warrants to the Purchaser (for itself and TMP) as set out
in Schedule 3. The Warrantor further warrants to the Purchaser that the
Warrantor has full power and authority to, and has taken all necessary
and proper action required to authorise and approve and to enter into and
to perform this Agreement and the consummation of the transactions
contemplated hereby and its obligations hereunder when executed will
constitute valid and binding obligations of the Warrantor in accordance
with their respective terms.
7.2 The Warrantor acknowledges that it has made the statements set out in
Schedule 3 to the Purchaser with the intention of inducing the Purchaser
to enter into this Agreement and that the Purchaser has relied on those
statements.
7.3 The Warrantor shall not (whether or not any claim is being made against
it) make any claim against the Company or any of the Subsidiaries or,
save in the case of fraud or willful deceit, against any director or
employee of the Company or any of the Subsidiaries on whom it may have
relied before agreeing to any term of this Agreement or of the Deed of
Indemnity or authorising any statement in the Disclosure Letter.
7.4 Each of the Warranties shall be construed as a separate warranty and
(save as expressly provided to the contrary) shall not be limited or
restricted by reference to or inference from the terms of any other
Warranty or any other term of this Agreement.
21
7.5 The Purchaser shall not be entitled to claim that any fact, circumstance
or state of affairs renders any of the Warranties untrue or misleading or
causes them to be breached if it has been fairly disclosed to the
Purchaser in the Disclosure Letter.
7.6 The Warrantor shall, as soon as reasonably practicable, disclose to the
Purchaser any matter or thing which may arise and become known to it
after the date of this Agreement and before Completion which it believes
constitutes a breach of any of the Warranties.
7.7 The rights and remedies of the Purchaser in respect of a breach of any of
the Warranties shall not be affected by Completion, except as provided in
Schedule 7 and/or by the giving of any time or other indulgence by the
Purchaser to any person, by the Purchaser rescinding or not rescinding
this Agreement a specific waiver or release by the Purchaser in writing.
8. WARRANTIES AND UNDERTAKINGS OF THE PURCHASER
8.1 The Purchaser hereby warrants and represents to the Warrantor for itself
and as trustee for the Selling Shareholders in the following terms:
(a) the Purchaser is a body corporate duly incorporated under the laws
of Delaware;
(b) the Purchaser has full power and authority to, and has taken all
necessary and proper action required to authorise and approve and
to enter into and to perform this Agreement, including without
limit the issue of the Loan Notes, and the consummation of the
transactions contemplated hereby and its obligations hereunder when
executed will constitute valid and binding obligations of the
Purchaser in accordance with their respective terms;
(c) The execution and delivery of, and the performance by the Purchaser
of its obligations under this Agreement will not:
(i) result in a breach of any provision of its byelaws or other
relevant constitutional documents;
22
(ii) result in any breach of any law, rule, regulation, order,
judgment or decree of any court, governmental agency or
administrative or regulatory body to which the Purchaser is
a party or by which the Purchaser or any of its assets are
bound;
(iii) conflict with, result in a breach of, or constitute a
default under any agreement or instrument to which the
Purchaser is a party or by which it is bound; or
(iv) create any claim, charge, lien, equity, encumbrance or
security interest in, on or over the Loan Notes.
(d) the Purchaser has power to issue the Loan Notes and is duly
authorised to do so;
8.2 The Purchaser undertakes that neither it nor the Company will initiate
any action which they believe may lead to any dividend paid or other
distribution made by the Company to the Shareholders being declared
unlawful.
8.3 The Purchaser shall procure that:
(a) if the Xxxxxx Xxxxxx Pension & Life Assurance Scheme established by
a Deed dated 28 March 1969 (the "Scheme") is terminated, the
Company will put the trustees of the Scheme in funds to secure in
full all benefits under the Scheme (other than benefits for those
who have elected to take a transfer value to another pension scheme
or arrangement) by means of appropriate policies of insurance or
appropriate annuity contracts (as defined in section 19(4) of the
Pension Schemes Act 1993) to the extent that the costs are not met
from the assets of the Scheme; and
(b) the Company will not, over a period of five years from Completion,
exercise any rights of amendment or termination (under the Scheme
or under contracts of employment) so as to reduce or materially
prejudice the rights accruing under the Scheme in respect of
service after the Completion Date
23
for those employees of the Group who are members of the Scheme on
the Completion Date, except if and to the extent required by law.
8.4 The Purchaser undertakes to the Warrantor to maintain in full force and
effect all current Xxxxxx Xxxxxx bonus schemes for the financial year
ending 30 September 1997 applicable to all Xxxxxx Xxxxxx employees and to
pay all bonuses accruing or arising under such schemes in accordance with
the scheme rules, applying any allowable discretion on a consistent basis
with previous years.
9. NON-DISCLOSURE OF INFORMATION
The Warrantor shall not disclose any confidential information of the
Group to any person or intentionally enable any person to become aware of
any confidential information relating to the Group except as required by
law or in order to give effect to this Agreement unless and until such
confidential information comes into the public domain otherwise than as a
result of its wrongful disclosure to any person. The expression
"confidential information" in this Clause shall mean trade secrets,
customer lists, lists of suppliers, reports, notes, inventions, know how
and memoranda and other documentary records of a confidential nature.
The obligations of confidentiality set out in this Clause 9 shall also
not apply to any information which is required to be disclosed by order
of a court of competent jurisdiction or recognised stock exchange or
government department or agency, in which event the Warrantor shall, in
so far as is reasonably practicable, inform the Purchaser of such
requirements prior to such disclosure.
10. PERMITTED DISPOSAL
At any time prior to Completion, the Company may sell the shares of the
Excluded Company to any third party and on any terms which it thinks fit,
provided that at such time the Excluded Company is no longer a legal or
beneficial owner of any Shares. The Warrantor shall procure that the
Excluded Company shall, following Completion, retain sufficient funds in
their control to remit to the Company to discharge the Company's
obligations under the PAYE Regulations or procure that the Optionholders
remit such funds to the Company. In any event such funds shall be
remitted to the Company within 7 days of Completion.
24
11. FURTHER ASSURANCE AND ATTORNEY
11.1 Upon and after Completion the Warrantor shall use its reasonable
endeavours to do and execute or procure to be done and executed all other
necessary acts deeds documents and things within their power reasonably
required to give effect to this Agreement.
11.2 On or after Completion, at the request of the Purchaser, the Warrantor
shall use its reasonable endeavours to procure that the Selling
Shareholders shall execute as a deed a power of attorney in favour of the
Purchaser or (subject always to Clause 12) such person as may be
nominated by the Purchaser generally in respect of the Sale Shares and in
particular to enable the Purchaser (or its nominee) to attend and vote at
general meetings of the Company.
11.3 For the purposes of this Agreement the implied covenant given pursuant to
Section 3(1) of the Law of Property (Miscellaneous Provisions) Xxx 0000
shall not be qualified by the words "other than any charges, encumbrances
or rights which that person does not or could not reasonably be expected
to know about".
12. ANNOUNCEMENTS AND INFORMATION
Except as required by law or by the terms of this Agreement or by The
Stock Exchange or by the SEC, the Warrantor shall not disclose the terms
of this Agreement and all announcements and circulars by or on behalf of
any of the parties hereto and relating to the sale and purchase hereunder
(including statements made in annual reports and accounts) shall so far
as reasonably practicable, be shown to the Purchaser prior to disclosure
and/or publication.
13. GENERAL
13.1 All provisions of this Agreement shall so far as they are capable of
being performed or observed continue in full force and effect
notwithstanding Completion except in respect of those matters then
already fully performed.
25
13.2 This Agreement is personal to the Warrantor who may not assign it or any
rights herein, or delegate or sub-contract the performance of any of its
obligations hereunder, except as provided herein or with the Purchaser's
prior written consent (which shall not be unreasonably withheld or
delayed). The Purchaser may assign the benefit of all or any part of
this Agreement to any member of the Purchaser's Group provided that the
Purchaser shall reassign to the Purchaser or any other member of
Purchaser's Group, if such assignee subsequently leaves the Purchaser's
Group
13.3 The Warrantor is not and shall not be deemed to be the agent of the
Shareholders.
13.4 This Agreement shall not be varied except in writing signed by duly
authorised officers of the parties.
13.5 No delay, neglect or forbearance on the part of any party in enforcing
against any other party any obligation under this Agreement shall operate
as a waiver or in any way prejudice any right of the first-mentioned
party under this Agreement. No waiver of any breach of any provision of
this Agreement shall be deemed to authorise any prior or subsequent
breach of the same or any other provision. Save where the context
otherwise requires, no single or partial exercise by any party of any
right, power or remedy hereunder shall preclude any prior or subsequent
exercise of the same or any other right, power or remedy.
13.6 Any liability to any party hereunder may in whole or in part be released,
compounded, compromised or time or indulgence given by any other party
(in its absolute discretion without in any way prejudicing or affecting
the Party's rights against the other.
13.7 Notwithstanding that any one or more provisions of this Agreement may
prove to be illegal or unenforceable, the remaining provisions hereof
shall continue in full force and effect.
13.8 This Agreement and the other documents referred to herein constitute the
entire agreement between the parties relating to the transactions
contemplated by this
26
Agreement and supersede all previous agreements, arrangements and
undertakings between the parties in respect of the subject matter hereof.
13.9 Each party acknowledges that in entering into this Agreement it places no
reliance on any representation, warranty or other statement relating to
the subject matter of this Agreement, save for the Warranties. No party
shall have any liability or remedy in tort in respect of any
representation, warranty or other statement relating to the subject
matter of this Agreement (whether or not contained in the Warranties or
otherwise in this Agreement) being false, inaccurate and/or incomplete
unless it was made fraudulently. The Purchaser shall have no right of
rescission of this Agreement, whether before or after Completion, except
as expressly provided for in this Agreement.
13.10 The Purchaser acknowledges that in entering into this Agreement it has
not relied on any representation, warranty or other statement made to it
by any of the Shareholders (in their capacity as Shareholders). No
Shareholder (in their capacity as Shareholders) shall have liability in
tort in respect of any representation, warranty or other statement
relating to the subject matter of this Agreement being false, inaccurate
and/or incomplete, unless it was made fraudulently.
13.11 The Purchaser acknowledges that it has executed this Agreement as a deed
with the intention that each of the Shareholders shall be entitled to the
benefit of, and so where appropriate shall be entitled to enforce
directly, each of the rights and exclusions of liability stated in this
Agreement (including, without limitation, in Clause 3 and 13.10) to be
granted to the Shareholders or any category of them, in each case in
accordance with and subject to the terms and conditions of this
Agreement.
13.12 This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument. The
execution by a party of one or more counterparts shall constitute
execution by that party of this Agreement for all purposes.
13.13 Each party shall bear its own costs, charges and expenses of and
incidental to the entering into and carrying into effect of this
Agreement and the documents referred to herein except as otherwise
expressly provided in this Agreement.
27
14. NOTICES
14.1 Any notice or other document to be served under this Agreement shall be
in writing and shall be delivered by hand, facsimile transmission or
prepaid registered or recorded delivery post addressed to the other party
(or in the case of the Warrantor, to the Warrantor's Solicitors) at the
respective address herein contained or such other address in the United
Kingdom as may previously have been notified by such party in respect of
itself in accordance with this Clause 13.
14.2 Any notice given pursuant to Clause 14.1 shall be deemed to have been
served:
(a) if delivered by hand, on the first Business Day following delivery;
(b) if sent by facsimile transmission, on the first Business Day
following transmission;
(c) if sent by prepaid registered or recorded delivery post, on the
third Business Day after posting if the address of the recipient is
in the country of despatch, otherwise on the seventh Business Day
after posting.
14.3 In proving service it shall be sufficient proof, in the case of a notice
sent by prepaid registered or recorded delivery post, that the envelope
containing the same was properly stamped, addressed and placed in the
post and, in the case of facsimile transmission, that it was properly
addressed and successfully transmitted.
14.4 The receipt by the Warrantor's Solicitors of any sum to be paid to, or
notice or document to be served on, the Warrantor or the Shareholders
under this Agreement shall satisfy and discharge the Purchaser's
obligation to pay or deliver it to the Warrantor or the Shareholders.
15. PROPER LAW
15.1 This Agreement shall be governed by and interpreted in accordance with
the laws of England.
28
15.2 The parties hereby submit to the exclusive jurisdiction of the High Court
of Justice in London.
IN WITNESS whereof this Agreement has been executed the day and year first
before written
29
SCHEDULE 1
PART A
PARTICULARS OF THE CURRENT SHAREHOLDERS
AS XX 00.00.00
NO OF ORDINARY SHARES
FOLIO NAME @ 25P EACH
2/21 Xx. X.X. Xxxxxx 264,808
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx
Xxxxxx on Xxxxxx
Xxxxxx XX00 0XX
2/21 Xxx. X.X. Xxxxxx 204,720 102,360
0 Xxxxxxx Xxxxx
Xxxxxxxx Xxxxx
Xxxxxxxxx
Xxxxxx XX00 0XX
Trustees of Xxx XX Xxxxxx No 1 Trust for 51,176
David's Children
c/o Xx XX Xxxxxx
143 Xxxxxx Avenue
Xxxxxx Xxxx
Xxxxxx on Xxxxxx
Xxxxxx XX00 0XX
Trustees of Xxx XX Xxxxxx No 1 Trust for 51,184
Stephen's Children
c/o Xx XX Xxxxxx
Southdene
0 Xxxxx Xxxx
Xxxxxxxxx Xxxx
Xxxxxx XX00 0XX
2/22 Xx. X.X. Xxxxxx 256,672
Southdene
0 Xxxxx Xxxx
Xxxxxxxxx Xxxx
Xxxxxxxxx
Xxxxxx XX00 0XX
2/22 Xxx. X. Xxxxx (dec'd) 50,792
c/o Xxxxx Xxxxx
0 Xxxxxxxxxx Xxxxx
Xxxxxxxxx Xxxx
Xxxxxx X0 0XX
2/23 Mr. K.G. Fordham 468,224
Xxxxxxxx
Xxxx Xxxxx Xxxx
Xxxxxx
Xxxxxx XX00 0XX
2/38 Messrs. D.T. French & X.X. Xxxxxx (AK 48,000
Xxxxx deceased Life Interest Account)
c/o 00-00 Xxxxxxx Xxxx
Xxxxxxxx
Xxxxxxxxx XX0 0XX
2/39 Messrs. D.T. French & X. X. Xxxxxx 16,000
(Personal
30
Representatives of AK Xxxxx
deceased)
c/o 00-00 Xxxxxxx Xxxx
Xxxxxxxx
Xxxxxxxxx XX0 0XX
2/24 Xxx. X.X. Xxxxxx 15,680
Starlings
Xxxxxxx Xxxx Xxxx
Xxxxxxx
Xxxxxx XX00 0XX
2/24 Xxx. X.X. Xxxxxx, Xx X.X. Xxxxxx, Mr. 41,440
T.E.A. Gibbon & Mrs. K X. Xxxx (TEAG a/c)
Starlings
Xxxxxxx Xxxx Xxxx
Xxxxxxx
Xxxxxx XX00 0XX
2/25 Xxx. X.X. Xxxxxx, Xx. X.X Xxxxxx, Mr. 41,440
T.E.A. Gibbon & Xxx. X.X. Xxxx (KAH a/c)
Starlings
Xxxxxxx Xxxx Xxxx
Xxxxxxx
Xxxxxx XX00 0XX
2/25 Xxx. X.X. Xxxxxx, Xx. X.X. Xxxxxx, Mr. 41,440
T.E.A. Gibbon & Xxx. X.X. Xxxx (PRG a/c)
Starlings
Xxxxxxx Xxxx Xxxx
Xxxxxxx
Xxxxxx XX00 0XX
2/26 Xx. X.X. Xxxxxx 264,808
Brambledown
Xxx Xxxxx
Xxxxxxx
Xxxxxx XX00 0XX
2/26 Mr. T.E.A. Gibbon 40,016
Apartment 19F
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
XXX
2/27 Mrs. G.A. Xxxx 224,720
Touchwood
Xxxxx Hill Road
West Adderbury
Near Xxxxxxx
Xxxx XX00 0XX
2/27 Xxx. X.X. Xxxx 60,000
000 Xxxxxxxxx
Xxxxxx
Xxxxxx XX00 0XX
2/28 Mrs. K X. Xxxx (KAH a/c) 20,000
000 Xxxxxxxxx
Xxxxxx
Xxxxxx XX00 0XX
2/28 Xx. X.X. Xxxxxxx 80,888
000 Xxxxxx Xxxx
Xxx Xxxxxx
Xxxxxx XX0 0XX
2/29 Mr. A.T. Knight 207,680
000 Xxxxxxxx Xxxx
Xxxxxxxx
00
Xxxxx XX00 0XX
2/29 Xx. X.X. Xxxxxx 85,872
Greensleeves
0 Xxxxxxx Xxx
Xxxxxxxxx
Xxxxxx XX00 0XX
2/30 Xx. X.X. Xxxxxxx 92,032
0 Xxxxxxxxxxxx Xxxx
Xxxxxx
Xxxx XX00 0XX
2/31 Xxx. X.X. Xxxxx 223,112
00 Xxxx Xxxx
Xxxxxxx
Xxxxx XX0 0XX
2/31 Mr. J.R. Xxxxxxxxx 113,200
00 Xxxxxx Xxxx
Xxxxxxx
Xxxxxxxxxxxx XX00 0XX
2/31 Mr. M.E. Ray 88,352
0 Xxx Xxxxxxxxx
Xxxxxx
Xxxxxxxxx XX0 0XX
2/32 Xxx. X.X. Xxxxxxx 18,000
0 Xxx Xxxxxxxx
Xxxxxxxx
Xxxxxx XX0 0XX
2/32 Mr. C.P.T. Xxxxxx 18,000
0 Xxxxx Xxxxxxxx Xxxxxxxx
Xxxxxxxx Xxxxx
Near Lewes
East Sussex
2/33 Messrs. X.X. Xxxxxx, T.E.A. Gibbon, & 104,360
X.X. Xxxxx
143 Xxxxxx Avenue
Xxxxxx on Xxxxxx
Xxxxxx XX00 0XX
2/33 Messrs. X.X. Xxxxxx, T.E.A. Gibbon & X.X. 104,320
Perry
143 Xxxxxx Avenue
Xxxxxx on Xxxxxx
Xxxxxx XX00 0XX
2/34 Messrs. X.X. Xxxxxx, T.E.A. Gibbon & X.X. 104,320
Perry
143 Xxxxxx Avenue
Xxxxxx on Xxxxxx
Xxxxxx XX00 0XX
2/34 K.B. (C.I.) Nominees Limited 264,784
c/o Xxx Xxxxxxx
KPMG
PO Box 76, Wests Centre
St Helier, Jersey CI JE4 8PQ
(The TEA Gibbon Settlement)
2/35 Xxxxx Xxxxxxxx Xxxxx 200,000
and Gillian Xxx Xxxx
(ATK 1964 Settlement)
00 Xxxx Xxxx
Xxxxxxx
Xxxxx XX0 0XX
2/35 Xxxx Xxxx and Xxxxxxx Xxx Xxxx 104,320
(WO Knight 1970 Settlement)
Touchwood
00
Xxxxx Xxxx Xxxx
Xxxx Xxxxxxxxx
Near Xxxxxxx
Xxxx XX00 0XX
2/36 Xxxxx Jennnifer Perry 100,000
and Gillian Xxx Xxxx
(ATK 1977 Settlement)
00 Xxxx Xxxx
Xxxxxxx
Xxxxx XX0 0XX
2/36 Xxxx Xxxx and Xxxxxxx Xxx Xxxx 100,000
(ATK 1977 Settlement)
Touchwood
Xxxxx Hill Road
West Adderbury
Near Xxxxxxx
Xxxx XX00 0XX
2/37 Xxxx Xxxx and Xxxxxxx Xxx Xxxx 200,000
(ATK 1964 Settlement)
Touchwood
Xxxxx Hill Road
West Adderbury
Near Xxxxxxx
Xxxx XX00 0XX
2/39 Xxxxxx Xxxxxx Trustees Limited 132,000
Xxxxxxxxx Xxxxx
00 Xxxx Xxxxxx
Xxxxxx X0X 0XX
2/38 X.X. Xxxxxxx & Ors. 540,000
Messrs Calthrops
00 Xxxxxx Xxxxx
Xxxxxxxx
Xxxxxxxxxxxx XX00 0XX
(The Estate of Xxx XX Xxxxxxx)
3/01 X.X. Xxxxxx 8,000
00 Xxxxxxxx Xxxxx
Xxxxxx
Xxxxxxxxxx 00000
XXX
3/02 X.X. Gowshall 3,000
Xxxxxxxxx
Xxxxx Xxxx
Xxxxxxxxx
Xxxxxxxxxxxxx
Xxxxxxxxxxxxx XX0 0XX
3/03 X.X. Xxxxxxxx 15,000
Xxxxxx Xxx
Xxxxxxxx Xxxx
Xxxxx Xxxxx
Xxxxxxxxx XX0 0XX
3/04 X.X. Xxxxxx 15,000
0 Xxxxxxxx Xxxxx
Xxxxxxxxxxxxx
Xxxxxxxxxxxxxx XX00 0XX
3/05 Xx XX Xxxxxxx 10,000
Apartment 1404
000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
00
XXX
3/06 Xxx Xxxx Xxxxx 8,000
00 Xxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxx
Xxxxxx XX00 0XX
3/007 AH Snervalin 4,000
00 Xxx Xxxxxxxxxxx
00000 Xxxxx
Xxxxxx
5,003,000
---------
34
PART B
PARTICULARS OF THE OPTIONHOLDERS
XXXXXX XXXXXX TRUSTEES LIMITED
Name Options Outstanding
________________________________________________________________
JR Xxxxxxxxx 20,000
XX Xxxxxxxx 5,000
XX Xxxxxx 2,000
XX Xxxxxxx 10,000
XX Xxxxx 9,000
N Xxxxxx 3,000
H Weuring 4,000
A Snervalin 3,000
I Xxxxx 3,500
S Xxxxxx 10,000
M Daglish 2,000
G Davies 3,500
N Xxxxxxx 3,500
R Juniper 7,000
P X'Xxxxxx 4,000
T Xxxxxxxx 2,000
A Xxxxx 2,000
N Xxxxxxx 2,000
R Gunning 2,000
N Xxxxx 2,000
W Xxxxx 2,000
C Xxxxxx 2,000
M Xxxxxxxx 2,000
M Xxxxxxxx 3,500
X Xxxxxxxx 5,000
J Upwood 2,000
________________________________________________________________
TOTAL 116,000
35
SCHEDULE 2
PART A
DETAILS OF THE COMPANY
Name: Xxxxxx Xxxxxx Limited
Registered Number: 185725
Country of Incorporation: England
Registered Office: Xxxxxxxxx Xxxxx, 00 Xxxx Xxxxxx, Xxxxxx X0X 0XX
Authorised share capital: (pound)2,000,000 divided into 8,000,000 Ordinary
Shares of 25 xxxxx each.
Issued share capital: (pound)1,250,750 divided into 5,003,000 Ordinary
Shares of 25 xxxxx each
Registered shareholders: (see Schedule 1)
Directors: X X Xxxxxxxx; X X Xxxxxx; K G Xxxxxxx; X X Xxxxxx;
X X Xxxxxxx and J R Xxxxxxxxx.
Secretary: J R Upwood
Auditors: KPMG
Outstanding Charges:
36
PART B
DETAILS OF THE SUBSIDIARIES
Name: Xxxxxx Xxxxxx Investments Limited
Registered Number: 1739021
Country of Incorporation: England
Registered Office: Xxxxxxxxx Xxxxx, 00 Xxxx Xxxxxx, Xxxxxx X0X 0XX
Authorised share capital: (pound)100 divided into 100 Ordinary Shares of
(pound)1 each
Issued share capital: (pound)100
Registered shareholders: The Company 98 Ordinary Shares
K G Fordham 1 Ordinary Share
X X Xxxxxx 1 Ordinary Share
Directors: K G Fordham, J R Xxxxxxxxx, X X Xxxxxx
Secretary: J R Upwood
Auditors: KPMG
Outstanding Charges:
37
Name: Xxxxxx Xxxxxx Inc.
Registered Number:
Country of Incorporation: USA
Registered Office: 000 Xxxxxxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx
Authorised share capital: 200 Preferred Shares
1,000 Common Shares
Issued share capital: 1 Preferred Share
201 Common Shares
Registered shareholders:
Directors: N Xxxxxx, N Xxxxxxx, K Xxxxxxx, X X Xxxxxxxxx,
X X Xxxxxx
Secretary: N Xxxxxx
Auditors: KPMG
Outstanding Charges:
38
Name: Xxxxxx Xxxxxx Canada Inc.
Registered Number: 2005123
Country of Incorporation: Canada
Registered Office: Xxxxx 0000, 0 Xxxxx Xxxxxx, Xxxxxxx, X0X 0X0
Xxxxxx
Authorised share capital: 400,000
Issued share capital: 400,000
Registered shareholders: The Company
Directors: J R Xxxxxxxxx, R Xxxxx, D Harley, K Xxxxxxx,
L Xxxxxxxxxx
Secretary: X Xxxxxx
Auditors: Peat Marwick Xxxxxx/KPMG
Outstanding Charges:
39
Name: Xxxxxx Xxxxxx Consulting Pty Limited
Registered Number: ACN 061 394 554
Country of Incorporation: Australia
Registered Office: 120-130 Xxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxx Xxxxx
Xxxxx 0000, Xxxxxxxxx
Authorised share capital: 1,000,000 Ordinary Shares of AUS $1 each
Issued share capital: 2 Ordinary Shares of AUS $1 each
Registered shareholders:
Directors: W Asprey, C Bongarzoni, J R Xxxxxxxxx, X X Xxxxxx,
R Juniper
Secretary:
Auditors: Xxxxxxx Xxxx Xxxxxxx
Outstanding Charges:
40
Name: Xxxxxx Xxxxxx Pty Limited
Registered Number: ACN 002 125 420
Country of Incorporation: Australia
Registered Office: 000 -000 Xxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxx Xxxxx
Xxxxx 0000, Xxxxxxxxx
Authorised share capital: 2,500,000 Ordinary Shares of AUS $1 each
Issued share capital: 2,175,000 Ordinary Shares of AUS $1 each
Registered shareholders:
Directors: W Asprey, C Bongarzoni, J R Xxxxxxxxx, X X Xxxxxx
and R Juniper
Secretary:
Auditors: Xxxxxxx Xxxx Xxxxxxx
Outstanding Charges:
41
Name: Xxxxxx Xxxxxx France SA
Registered Number: 8351 2948 814
Country of Incorporation: France
Registered Office: 00 Xxxxxx xx X'Xxxxx, 00000 Xxxxx, Xxxxxx
Authorised share capital: 2,500,000 FFr
Issued share capital: 2,500,000 FFr
Registered shareholders: Xxxxxx Xxxxxx Limited; Xxxx Xxxxxxxxx; Xxxx
Snervalin; Xxxx Xxxxx; Xxxxxxx Xxxxxx; Xxxx
Xxxxxxxx; Xxxx Xxxxxx.
Directors: Xxxx Xxxxxxxxx; Alain Snervalin; Xxxxxxx Xxxxxx
Secretary:
Auditors: KPMG
Outstanding Charges:
42
Name: Xxxxxx Xxxxxx BV
Registered Number: 33055649
Country of Incorporation: The Netherlands
Registered Office: Xxxxxxxx 0x, 0000 XX Xxxxxxxxx, Xxx Xxxxxxxxxxx
Authorised share capital: 5,000,000 FL
Issued share capital: 1,312,100 FL
Registered shareholders: Xxxxxx Xxxxxx International BV
Directors: H Weuring, J R Xxxxxxxxx, X X Xxxxxx, XXXX Ten
Doerschate
Secretary:
Auditors: KPMG
Outstanding Charges:
43
Name: Xxxxxx Xxxxxx International BV
Registered Number: 33201029
Country of Incorporation: The Netherlands
Registered Office: Xxxxxxxx 0x, 0000 XX Xxxxxxxxx, Xxx Xxxxxxxxxxx
Authorised share capital: 5,000,000 FL
Issued share capital: 1,312,000 FL
Registered shareholders: The Company
Directors: J R Xxxxxxxxx
Secretary:
Auditors: KPMG
Outstanding Charges:
44
Name: Carre Xxxxxxx XX
Registered Number: 8333 343 127
Country of Incorporation: France
Registered Office: 00 Xxxxxx xx X'Xxxxx, 00000 Xxxxx, Xxxxxx
Authorised share capital: 5000,000 FFr
Issued share capital: 500,000 FFr
Registered shareholders: Xxxxxx Xxxxxx Investments Limited; Xxxx Xxxxxxxxx;
Xxxxxxx Xxxxxx; Xxxx Xxxxxxxx; Xxxxx Snervalin;
Xxxx Xxxxxx; Xxxx Xxxxx
Directors: Xxxx Xxxxxxxxx; Xxxxxxx Xxxxxx; Xxxxx Snervalin
Secretary:
Auditors: KPMG
Outstanding Charges:
45
Name: Alliance Resources Humaines SA
Registered Number:
Country of Incorporation: France
Registered Office:
Authorised share capital:
Issued share capital:
Registered shareholders:
Directors:
Secretary:
Auditors:
Outstanding Charges:
46
Name: DB Carre SARL
Registered Number:
Country of Incorporation: France
Registered Office:
Authorised share capital:
Issued share capital:
Registered shareholders:
Directors:
Secretary:
Auditors:
Outstanding Charges:
47
Name: Bidborough Limited
Registered Number: 2813
Country of Incorporation: Bahamas
Registered Office: Bahamas International Trust Building, Road Town,
Tortola, British Virgin Islands
Authorised share capital: 10,000 Shares of US $1 each
Issued share capital: 10,000 Shares of US $1 each
Registered shareholders: Ark Limited, Bitmore Limited
Directors: Xxxxx Limited, Boyne Limited
Secretary:
Auditors: KPMG
Outstanding Charges:
48
Name: Reynell Limited
Registered Number: 2822436
Country of Incorporation: England
Registered Office: Xxxxxxxxx Xxxxx, 00 Xxxx Xxxxxx, Xxxxxx X0X 0XX
Authorised share capital: (pound)100,000 divided into 100,000 Shares of
(pound)1 each
Issued share capital: (pound)100 divided in 100 Shares of (pound)1 each
Registered shareholders: The Company
Directors: X X Xxxxxx, X X Juniper, Xxxx X X Xxxxxx, X X
Xxxxxxxxx, X X Xxxxxx
Secretary: J R Upwood
Auditors: Dormant Company whose accounts are reviewed by
KPMG as part of group audit
Outstanding Charges: NIL
49
Name: Xxxxxx Xxxxx Advertising Services Limited
Registered Number: 1726206
Country of Incorporation: England
Registered Office: Xxxxxxxxx Xxxxx, 00 Xxxx Xxxxxx, Xxxxxx X0X 0XX
Authorised share capital: (pound)100 divided into 100 Shares of (pound)1
each
Issued share capital: (pound)100 divided into 100 Shares of (pound)1
each
Registered shareholders: The Company 98 Ordinary Shares
K G Fordham 1 Ordinary Share
J R Xxxxxxxxx 1 Ordinary Share
Directors: X X Xxxxxx and J R Xxxxxxxxx
Secretary: J R Upwood
Auditors: Dormant Company whose accounts are reviewed by
KPMG as part of group audit
Outstanding Charges: NIL
50
Name: TCT Fullpoint Limited
Registered Number: 2822471
Country of Incorporation: England
Registered Office: Xxxxxxxxx Xxxxx, 00 Xxxx Xxxxxx, Xxxxxx X0X 0XX
Authorised share capital: (pound)100,000 divided into 100,000 Shares of
(pound)1 each
Issued share capital: (pound)100 divided into 100 Shares of (pound)1
each
Registered shareholders: The Company
Directors: X X Xxxxxx and J R Xxxxxxxxx
Secretary: J R Upwood
Auditors: Dormant Company whose accounts are reviewed by
KPMG as part of group audit
Outstanding Charges: NIL
51
Name: Xxxxxxxx Knight Consulting Limited
Registered Number: 1962925
Country of Incorporation: England
Registered Office: Xxxxxxxxx Xxxxx, 00 Xxxx Xxxxxx, Xxxxxx X0X 0XX
Authorised share capital: (pound)100 divided into 100 Shares of (pound)1
each
Issued share capital: (pound)100 divided into 100 Shares of (pound)1
each
Registered shareholders: The Company 98 Ordinary Shares
K G Fordham 1 Ordinary Share
X X Xxxxxx 1 Ordinary Share
Directors: X X Xxxxxx and J R Xxxxxxxxx
Secretary: J R Upwood
Auditors: Dormant Company whose accounts are reviewed by
KPMG as part of group audit
Outstanding Charges: NIL
52
Name: Xxxxxx Xxxxxx UK Limited
Registered Number: 1549645
Country of Incorporation: England
Registered Office: Xxxxxxxxx Xxxxx, 00 Xxxx Xxxxxx, Xxxxxx X0X 0XX
Authorised share capital: (pound)100 divided into 100 Shares of (pound)1
each
Issued share capital: (pound)100 divided into 100 Shares of (pound)1
each
Registered shareholders: The Company 98 Ordinary Shares
K G Fordham 1 Ordinary Share
X X Xxxxxx 1 Ordinary Share
Directors: X X Xxxxxx, Xxxx X X Xxxxxx, X X Xxxxxxxxx, Xxxx C
Rile, X X Xxxxxxxx, X X Xxxxxx
Secretary: J R Upwood
Auditors: Dormant Company whose accounts are reviewed by
KPMG as part of group audit
Outstanding Charges: NIL
53
Name: The Square Communications Limited
(formerly Aztec/AKBB Limited)
Registered Number: 2874340
Country of Incorporation: England
Registered Office: Xxxxxxxxx Xxxxx, 00 Xxxx Xxxxxx, Xxxxxx X0X 0XX
Authorised share capital: (pound)500,000 divided into 500,000 Ordinary
Shares of (pound)1 each
Issued share capital: (pound)2 divided into 2 Ordinary Shares of
(pound)1 each
Registered shareholders: J R Xxxxxxxxx and X X Xxxxxx
Directors: C D N Borg, X X Xxxxxx, P Xxxxxxx, Xxxx X X
Xxxxxx, X X Xxxxxxxxx, X Xxxxxxxx, G Waltan
Secretary: J R Upwood
Auditors: Dormant Company whose accounts are reviewed by
KPMG as part of group audit
Outstanding Charges: NIL
54
Name: Xxxxxx Borg Millest Limited
Registered Number: 2858017
Country of Incorporation: England
Registered Office: Xxxxxxxxx Xxxxx, 00 Xxxx Xxxxxx, Xxxxxx X0X 0XX
Authorised share capital: (pound)100,000 divided into 100,000 Ordinary
Shares of (pound)1 each
Issued share capital: (pound)2 divided into 2 Ordinary Shares of
(pound)1 each
Registered shareholders: The Company
Directors: X X Xxxxxx X X Xxxxxxxxx
Secretary: J R Upwood
Auditors: Dormant Company whose accounts are reviewed by
KPMG as part of group audit
Outstanding Charges: NIL
55
Name: Juniper Xxxxx Nucleus Advertising Partnership
Limited
Registered Number: 2805884
Country of Incorporation: England
Registered Office: Xxxxxxxxx Xxxxx, 00 Xxxx Xxxxxx, Xxxxxx X0X 0XX
Authorised share capital: (pound)100,000 divided into (pound)100,000
Ordinary Shares of (pound)1 each
Issued share capital: (pound)100 divided into L100 Ordinary Shares of
(pound)1 each
Registered shareholders: The Company
Directors: X X Xxxxxx and J R Xxxxxxxxx
Secretary: J R Upwood
Auditors: Dormant Company whose accounts are reviewed by
KPMG as part of group audit
Outstanding Charges: NIL
56
SCHEDULE 3
WARRANTIES
CONTENTS
1. Interpretation
2. The Company and Subsidiaries
3. Accounts and Financial Position
4. Events since Accounts Date
5. Taxation
6. Properties
7. Environmental Matters
8. Assets
9. Material Contracts and Liabilities
10. Compliance with Applicable Legislation
11. Employees
12. Pensions and other Benefits
13. Intellectual Property and Know-How
14. Insurance
15. Loans and Bank Accounts
16. Litigation
17. Insolvency
1. INTERPRETATION
In addition to Clause 1 of this Agreement, the following shall apply in
relation to the interpretation of this Schedule:
where any of the statements made in this Schedule are qualified by the
words "to the best of the Warrantor's knowledge, information or and
belief" or "so far as the Warrantor is aware" or qualified by a similar
expression or the Warrantor has qualified a Warranty in terms that they
have "no reason to believe" that any particular
57
circumstance will obtain or has obtained, the Warrantor undertakes to the
Purchaser that it has made due and careful enquiries in relation to the
subject matter of such Warranty for the purposes of this Agreement of the
following persons only in relation to the member of the Group set out
against their respective names only and such words or such expression
shall not be construed or given any wider interpretation, including that
any further enquiries have been made, nor be deemed to include an
additional statement to the effect that the statements have been made
after due and careful enquiry of any other party or entity (whether a
member of the Group, any of it officers or employees or otherwise):
NAME IN RELATION TO
(i) The Directors and the Secretary the Company and all other
of the Company members of the Group
(ii) Xxxx Xxxxxx (UK Finance the Company and its UK
Director), Xxxx Xxxxx (Chief Subsidiaries
Executive, Xxxxxx Xxxxxx UK
Limited), Xxxxx Xxxxxxxx (Chief
Executive of The Square
Communications Limited), Xxxxxx
Xxxxxx (Chief Executive Reynell
Limited and Deputy Chief
Executive of Xxxxxx Xxxxxx UK
Limited)
(iii) Xxxxx Xxxxxxx and Xxxxx Xxxxxx Xxxxxx Xxxxxx Inc. and Xxxxxx
Xxxxxx Canada Inc
(iv) Xxxxx Juniper Xxxxxx Xxxxxx Pty Limited and
Xxxxxx Xxxxxx Consulting Pty
Limited
(v) Alain Snervalin, Chief Executive Xxxxxx Xxxxxx France SA,
and Xxxxxxxx Zuilli Carre Xxxxxxx XX, Alliance
Resources Humaines SA and DB
Carre SARL
(vi) Henk Weuring, Chief Executive Xxxxxx Xxxxxx BV and Xxxxxx
Xxxxxx
58
International BV.
References in this Schedule to analogous legislation, body or systems
shall mean bodies and systems operating or in existence in the United
Kingdom, US, Canada, Australia, France, the British Virgin Islands,
Bahamas and the Netherlands.
2. THE COMPANY AND THE SUBSIDIARIES
2.1 MEMORANDUM AND ARTICLES OF ASSOCIATION, STATUTORY BOOKS AND RETURNS
(a) The copies of the Memorandum and Articles of Association (and the
bye laws or other constitutional documents) of each member of the
Group which have been given to the Purchaser's Solicitors are
accurate and complete in all respects and have annexed or
incorporated copies of all resolutions or agreements required by
the Companies Acts (or other analogous legislation) to be so
annexed or incorporated.
(b) The Register of Members and other statutory books and registers
of the Company and (so far as the Warrantor is aware) analogous
books or registers of each other member of the Group, has been
properly kept and no notice or allegation that any of the same is
incorrect or should be rectified has been received.
(c) All material returns and particulars, resolutions (including
elective resolutions) and other documents required to be filed
with or delivered to the Registrar of Companies pursuant to the
Companies Acts (or other analogouslegislation) have been properly
and correctly made up and duly filed or delivered by or on behalf
of each member of the Group.
2.2 THE SALE SHARES AND SHARE CAPITAL
(a) The Shares will constitute at Completion the entire issued share
capital of the Company.
59
(b) No person has any right to call for the transfer or issue to him
of any shares, debentures or other securities in any member of the
Group (including the Sale Shares).
(c) There are no options or other agreements under which any member of
the Group may be required to issue any shares.
(d) No member of the Group has, in the six years ending on the
Accounts Date, at any time repaid, redeemed, purchased, cancelled
or reduced its issued share capital or any class thereof or agreed
to do so.
2.3 SUBSIDIARIES, SUBSIDIARY UNDERTAKINGS, ASSOCIATIONS AND BRANCHES
Each member of the Group:
(a) is not the holder or beneficial owner of, nor has it in the six
years ending on the date hereof, agreed to acquire any class of
any shares or other securities of any other body corporate
(whether incorporated in the United Kingdom or elsewhere) other
than shares or securities in the Subsidiaries;
(b) in the six years ending on the date hereof, has not been nor has
it agreed to become a member of any partnership or any other
unincorporated association, joint venture or consortium; and
(c) in the six years ending on the date hereof, has not had and does
not now have any branch or permanent establishment outside the
United Kingdom.
2.4 NAME
The Company and the Subsidiaries do not use on their letterheads, books
or vehicles (or otherwise carry on its business under) any name other
than "Xxxxxx Xxxxxx" in its full corporate name or those of the
Subsidiaries.
60
2.5 NO VIOLATION
The execution, delivery and performance by the Warrantor of this
Agreement and of the Deed of Indemnity and by the Selling Shareholders
and the Warrantor of any other documents in the agreed form and the
completion of this Agreement do not and will not:
(a) conflict with, violate or result in any loss of benefit under, any
order, judgement, writ or injunction; or
(b) conflict with or violate any provision of the Memorandum and
Articles of Association (or bye laws or other constitutional
documents) of any member of the Group.
2.6 RESIDENCY
No member of the Group is incorporated in, or organised under, the laws
of any state of the US and the Group's principal office is not located in
the USA. So far as the Warrantor is aware, as at 30 June 1997, the Group
did not have assets located in the US (other than cash) having an
aggregate book value of US$15 million or more, or the Group did not make
aggregate sales in or into the US of US$25 million or more in the year
ended on the Accounts Date calculated in accordance with 16 CFR Section
802.50. For these purposes, "sales" means the revenues received by the
Group (reported in the management accounts of Xxxxxx Xxxxxx Inc. as gross
profit) and not gross billing amount (reported as turnover in the
aforementioned management accounts).
3. ACCOUNTS AND FINANCIAL POSITION
3.1 GENERAL
The Accounts:
(a) have been prepared under the historical cost convention and in
accordance with all relevant Statements of Standard Accounting
Practice issued by the
61
Accounting Standards Committee of the Institute of Chartered
Accountants of England and Wales and Financial Reporting Standards
issued by the Accounting Standards Board and Abstracts issued by
the Urgent Issues Task Force.
(b) showed a true and fair view of the affairs of the Group as at the
Accounts Date and of its results for the accounting reference
period ended on that date;
(c) comply with the requirements of the Companies Acts;
(d) were prepared on consistent bases and policies of accounting which
are the same as those adopted in preparing the corresponding
accounts for all accounting periods ending in the previous three
years ("PREVIOUS ACCOUNTS") save as disclosed in the Accounts or
the Previous Accounts;
(e) save as the Accounts expressly disclose, were not affected by any
exceptional or material (which for the purposes of this Warranty
3.1 (e) shall mean an event or transaction exceeding in value the
sum of (pound)1 million) non-recurring items.
3.2 PROVISION FOR LIABILITIES ETC. IN ACCOUNTS
The Accounts make proper provision for or note all known liabilities, all
known contingent liabilities (as defined in the relevant statement of
Standard Accounting Practice) and all capital commitments of the Group as
at the Accounts Date, and note and make proper provision or reserve for
all known bad and doubtful debts.
3.3 VALUATION OF WORK IN PROGRESS
In the Accounts work in progress includes all invoiced costs at the
Accounts Date in respect of sales invoiced after the Accounts Date less
any provision for irrecoverable amounts.
62
3.4 PROFITS
The profits shown in the Accounts have not to a material extent been
affected (except as therein disclosed) by any extraordinary item (within
the meaning of and for the purposes of Financial Reporting Standards 3)
or exceptional item (within the meaning of and for the purposes of
Financial Reporting Standards 3).
3.5 TITLE TO ASSETS
The assets included in the Accounts (other than trading stock disposed of
since the Accounts Date in the ordinary course of business) and all other
assets used or employed by the Group are the absolute property of the
Group (other than normal retention of title provisions arising in the
ordinary or proper course of the Group's business) free from any
mortgage, charge, xxxx, xxxx of sale or other encumbrance other than
those which are the subject of any leasing, hiring or hire-purchase
agreement or agreement for payment on deferred terms or assignment or
factoring or other similar agreement, and all material assets are in the
possession or under the control of the Group.
3.6 CONDITION OF PLANT, ETC.
The material plant, machinery, office equipment and vehicles used by the
Group are in a good state of repair having regard to their age and the
uses to which they have been put and the vehicles are duly licensed and
suitable for the purposes for which they are used.
3.7 FIXED ASSET REGISTER
The Group has up-to-date fixed asset registers which specify in
reasonable detail all material assets owned or used by it.
63
3.8 CONTROL OF RECORDS ETC.
All material records and information owned by the Group (whether or not
held in written form) are in its exclusive possession, under its direct
control and subject to unrestricted access by it.
3.9 ACQUISITION AT ARM'S LENGTH
The Group has not within the period of twenty-four months ending on the
date hereof acquired any asset on terms which were not by way of bargain
at arm's length.
3.10 REALISATION OF BOOK DEBTS
The book debts shown in the Accounts have realised, or will realise
within three months from the date of the Agreement, their full nominal
amount less any reserve for bad or doubtful debts included in the
Accounts. All book debts shown in the Accounts have arisen in bona fide
arm's length transactions in the ordinary course of business and the
Warrantor has no knowledge of any reason why such book debts would not be
collectable in the ordinary course.
3.11 BORROWINGS AND CHARGES
Except as disclosed in the Disclosure Letter (it being acknowledged by
the Purchaser that it does not require the Warrantor to disclose amounts
outstanding on overdraft or under any of such disclosed in the Disclosure
Letter) or in the Accounts, the Group does not have outstanding:
(a) any borrowing or indebtedness in the nature of borrowing,
including any bank overdraft, any liability under acceptances
(otherwise than in respect of normal trade bills) or any
acceptance credit;
(b) any other indebtedness, other than that arising in the ordinary
course of its business.
64
3.12 STATE OF CURRENT BORROWINGS
No member of the Group has received notice to repay under any agreement
relating to borrowing or indebtedness in the nature of borrowing on its
part which is repayable on demand, and, so far as the Warrantor is aware,
no event of default has occurred under any agreement relating to any
other borrowing or indebtedness in the nature of borrowing on its part,
nor, so far as the Warrantor is aware, has any other event occurred
which, with the giving of notice or lapse of time or making of any
determination, or any combination of them, would constitute such an event
of default.
3.13 LOANS TO DIRECTORS ETC.
There is not outstanding:
(a) any loan made by any member of the Group to, or debt owing to any
member of the Group by, the Shareholders (or any of them) or any
director or senior executive of the Group or any Connected Person
of any of them;
(b) any agreement or arrangement to which any member of the Group is a
party and in which the Shareholders (or any of them) or any
director or senior executive of the Group or any Connected Person
of any of them is interested;
(c) any agreement or arrangement between any member of the Group and
any company of which it is a subsidiary or another subsidiary of
any such company (including, but not limited to, any such
agreement or arrangement under which any member of the Group is,
or may in the future become, liable to pay any service, management
or similar charge or to make any payment of interest or in the
nature of interest).
3.14 FACTORING
No member of the Group has factored any of its debts, or engaged in
financing of the type which would not require to be shown or reflected in
the Accounts.
65
3.15 TRADE CREDITORS
So far as the Warrantor is aware, none of the Group's trade creditors
whose supply is significant to any member of the Group have in the last
twelve months indicated to any member of the Group that it intends to or
has threatened to cease trading with the Group.
3.16 MANAGEMENT ACCOUNTS
The unaudited consolidated management accounts the Company for the
periods commencing respectively on 1 October 1996 and ended on 31 March
1997 were honestly and properly prepared in a manner consistent with that
adopted in the preparation of the consolidated management accounts of the
Company for all periods ended during the twelve months prior to the
Accounts Date and, so far as the Warrantor is aware, are not misleading
in any material respect.
4. EVENTS SINCE THE ACCOUNTS DATE
4.1 Since the Accounts Date:
(a) apart from the dividends provided for in the Accounts and the
payment of the Pre-Sale Dividend no dividend or other distribution
(as defined for the purposes of ss. 209 or 210 ICTA) has been
declared, paid or made by the Group;
(b) the business of each member of the Group (unless such member was a
dormant company as at the Accounts Date) has been carried on in
the ordinary course and so as to maintain it as a going concern;
(c) there have been no material adverse changes in the financial or
trading position of the Group taken as a whole or of any member of
the Group in the United Kingdom, US and/or Australia;
(d) there has been no material reduction in the value of the total net
tangible assets (meaning the tangible fixed assets plus current
assets less current
66
and long term liabilities) of the Group on the basis of the
valuations adopted in the Accounts;
(e) the business of the Group has not been 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
similar extent which would seriously impair the profitability of
the Group and the Warrantor is not aware of any facts likely to
give rise to any such effect;
(f) no member of the Group has acquired or disposed of or agreed to
acquire or dispose of any business or any material asset other
than trading stock in the ordinary course of business;
(g) so far as the Warrantor is aware, no debtor owing in excess of
(pound)250,000 has been released in respect of a material amount
(being an amount in excess of (pound)50,000) by any member of the
Group on terms that he pays less than the book value of any debt
(subject to settlement discounts on the usual terms) and, so far
as the Warrantor is aware, no such material debt has been written
off or has proved to be irrecoverable to such a material extent.
4.2 There are no adverse consequences to the financial and/or trading
position of the Company as a result of the Pre-Sale Dividend (other than
the payment itself and the associated ACT liability) and the
Reconstruction and Reorganisation of the Share Capital. It is
acknowledged that Schedule 7 to this Agreement (other than paragraphs 4
and 5) shall not apply to this Warranty 4.2.
5. TAX
5.1 PAYMENT OF TAX
Each member of the Group has in the six years ending on the Accounts Date
promptly paid all Tax which it has become liable to pay and has not been
nor is liable to pay any interest or penalties on any disputed Tax
liability or late payment. The Warrantor is not aware of any assessment
which any Tax Authority could make or should have made on any member of
the Group which will give rise to a Tax Liability
67
whether or not such an authority has sufficient information to make such
an assessment.
5.2 WITHHOLDING TAX
All payments by each member of the Group to any person which should have
been made under deduction of Tax have been so made and each member of the
Group has accounted to the relevant Tax Authority for all Tax so
deducted. In particular, each member of the Group has duly complied with
all its obligations to deduct and account to the Inland Revenue for all
Tax so deducted under or pursuant to ss. 43, 119, 134, 349, 524, 536, 737
and 777 ICTA and under the tax deduction scheme contained in Chapter IV
of Part XIII ICTA.
5.3 DISTRIBUTIONS
(a) No claim has been made by any member of the Group under s.242 ICTA
in the six years ending on the Accounts Date.
(b) No member of the Group has, in the six years ending on the
Accounts Date, made or received any distribution which is an
exempt distribution within ss.213 to 218 ICTA.
(c) No member of the Group has received any capital distribution in
the six years ending on the Accounts Date to which the provisions
of s.189 TCGA could apply.
5.4 CAPITAL ALLOWANCES
(a) None of the assets for which a capital allowance has been or is
capable of being made to any member of the Group has been disposed
of or ceased to be used for the purposes of its trade since the
Accounts Date.
(b) No first year allowance under the provisions of CAA in respect of
expenditure incurred by any member of the Group prior to the date
hereof has been given
68
in circumstances where such allowance has been or is likely to be
recovered under the provisions of s.47 CAA.
(c) None of the assets, expenditure on which has qualified for a
capital allowance under Chapter I Parts I or II CAA, has at any
time since such expenditure was incurred been used otherwise than
as an industrial building or structure as defined in s.18 CAA.
(d) All capital expenditure on which allowances are to be claimed has
been properly notified by any member of the Group to the Inland
Revenue within the period of two years set out in s118 FA 1994.
5.5 CAPITAL GAINS
(a) No member of the Group has made any claim under ss. 23, 152, 161,
165, 242, 243, 244 or 247 TCGA nor has any claim under those
sections been made by any other company so as to affect the base
cost of any member of the Group's assets for the purpose of
calculating chargeable gains.
(b) No member of the Group has disposed of any asset such that s.17
TCGA could apply.
(c) Following the sale of the freehold property at Xxxxxxxxx Xxxxx, 00
Xxxx Xxxxxx, Xxxxxx X0X 0XX, the sum of (pound)500,000 has been
retained by the Company (to account for corporation tax on capital
gains) together with the balance of the sale proceeds after the
payment of the Pre-Sale Dividend and the amount of (pound)500,000
and the balance of the sale proceeds from the sale of the said
freehold property shall not be distributed or dispersed in any way
by the Company prior to Completion. It being acknowledged that
Schedule 7 to this Agreement (other than paragraphs 4 and 5) shall
not apply to this Warranty 5.5(c).
(d) No member of the Group has made a capital loss to which the
provisions of s.18(3) TCGA apply.
69
(e) No member of the Group has made a claim under ss.24, 48 or 280
TCGA.
(f) No claim has been made by any member of the Group under s.35(5)
TCGA nor is the Group subject to such a claim by reason of para 7,
Schedule 3, TCGA.
(g) No member of the Group has capital losses which are being carried
forward which are or might be affected by ss 177A and Schedule 7A
TCGA.
5.6 GROUP PROVISIONS
(a) All elections pursuant to s. 247 ICTA between the Company and any
present or former member of the Group have been properly made and
applied in respect of all dividends and interest payments and have
been accepted by the relevant Tax Authority.
(b) All claims for Group relief and consortium relief or consents to
surrender by any member of the Group have been properly made and
accepted by the relevant Tax Authority.
(c) All claims for surrender of ACT by or to any member of the Group
have been properly made by the relevant member of the Group and
accepted by the relevant Tax Authority.
5.7 INTRAGROUP DISPOSALS
No Tax has been assessed or is liable to be assessed on any member of the
Group pursuant to s.190 TCGA in respect of any chargeable gain accrued
prior to the date hereof. No member of the Group has at any time within
the period of 3 years ending with the date hereof transferred any asset
other than trading stock to any company which at the time of disposal was
a member of the same group (as defined in s.170 TCGA).
5.8 OVERSEAS INTERESTS
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(a) In the six years ending on the Accounts Date, no member of the
Group has carried out or caused or permitted to be carried out any
of the transactions specified in s.765 ICTA.
(b) All relief for Overseas Tax suffered or incurred has been properly
claimed.
5.9 TAXATION IN RELATION TO EMPLOYEES
(a) So far as the Warrantor is aware, each member of the Group has
properly operated the Pay As You Earn System deducting income tax
from all payments to or treated as made to employees and
ex-employees of each such member of the Group and accounted to the
relevant Tax Authority for all Taxes so deducted and all Tax
chargeable where the Tax is an amount payable by such member of
the Group on benefits provided for employees of such member of the
Group.
(b) So far as the Warrantor is aware, no member of the Group is liable
to account for any payments under the Pay As You Earn System
imposed on it pursuant to ss203B, 203C and/or 203E ICTA.
(c) So far as the Warrantor is aware, no member of the Group has
entered into any contract for services with any individual whom
the relevant Tax Authority have indicated should be, or there are
reasons to suggest that they will treat as, an employee rather
than a self-employed person.
(d) Each member of the Group has paid all National Insurance and
Graduated Pension Contributions (or other analogous taxes) for
which it is or will be liable and has maintained proper books and
records relating thereto.
5.10 TAX AVOIDANCE
(a) No member of the Group has made any major changes in its trade for
the purposes of s768 ICTA for the period of three years up to and
including the Completion Date.
71
(b) In the six years ending on the Accounts Date, no member of the
Group has been a party to any transaction to which the provisions
of ss.125, 176 or 177 TCGA have or could be applied.
5.11 STAMP DUTY, CAPITAL DUTY AND STAMP DUTY RESERVE TAX
(a) So far as the Warrantor is aware, all documents in which each
member of the Group may have an interest in the enforcement
thereof and which are subject to stamp duty have been duly
stamped.
(b) No member of the Group has made any claim for relief or exemption
under s.55 FA 1927, s.42 FA 1930, or Schedule 19 FA 1973 within
the five years ending on the date hereof.
(c) No member of the Group has made any claim for relief or exemption
under ss.75 to 77 FA 1986 in the six years ending on the Accounts
Date.
5.12 VAT
(a) No act or transaction has been effected in consequence whereof any
member of the Group is or may be liable for any VAT chargeable
against some other company.
(b) Each member of the Group has made all necessary returns and
payments and complied with all statutory provisions, rules,
regulations, orders and directions concerning VAT.
(c) All supplies made by each member of the Group have been taxable
supplies and the provisions of s.26 VATA 1994 will not apply to
deny credit for any input tax.
(d) No member of the Group is a party to any arrangement whereby a
transaction has been or will be effected with the result that a
"self-supply" charge is incurred pursuant to paras 5 to 7, Sch. 10
VATA 1994, or pursuant to the Value Added Tax (Self-Supply of
Construction Services) Order 1989.
72
(e) No member of the Group has received a penalty liability notice in
respect of any return pursuant to s.64 VATA 1994.
(f) No member of the Group has paid VAT on any land or buildings
purchased or leased and has not elected to waive exemption from
VAT in respect of any land or buildings currently owned or let or
sold or agreed to be let or sold by it.
(g) No member of the Group has been supplied since 31 March 1990 with
any land or buildings or any other goods or services affected by
Part VA of the Value Added Tax (General) Regulations 1985.
(h) The Warrantor has given details of all assets of any member of the
Group to which the capital good scheme applies, the use to which
such assets have been placed and the history of each such assets
for VAT adjustment purposes.
5.13 MISCELLANEOUS TAXATION
(a) In the six years ending on the Accounts Date, there has been no
major change in the business of any member of the Group within the
meaning of s.245 ICTA.
(b) No member of the Group has been the subject of, or connected with
the subject of any claim for, relief in respect of an issue of
shares under the Business Expansion or Business Start-Up Schemes
(or other analogous schemes).
(c) So far as the Warrantor is aware, all relevant returns in respect
of Tax have been properly and correctly made up and duly filed and
delivered by or on behalf of each member of the Group within the
prescribed time limits.
(d) All assessments on any member of the Group where Tax has not been
settled, have been properly appealed.
73
(e) So far as the Warrantor is aware, no investment grants are liable
to be repaid by any member of the Group.
(f) So far as the Warrantor is aware, there are no outstanding or
ongoing enquiries from any Tax Authority against or in respect of
any member of the Group.
6. PROPERTIES
6.1 TITLE
(a) The Properties comprise all the land and buildings owned, used or
occupied by the Group or in which it has an interest. In relation
to any property no longer vested in any member of the Group, no
member of the Group has received or, so far as the Warrantor is
aware, anticipates receiving any notices served or to be served
pursuant to the Landlord and Tenant (Covenants) Xxx 0000.
(b) The relevant member of the Group is the legal and beneficial owner
of all the Properties and would be able to transfer all the
Properties with full title guarantee.
(c) The relevant member of the Group has good and marketable title to
each of the Properties.
(d) The Group has in its possession or under its control all deeds and
documents necessary to show title to the Properties all of which,
so far as the Warrantor is aware, have been properly stamped.
(e) So far as the Warrantor is aware, all deeds and documents relating
to the properties in the possession of the Company and Xxxxxx
Xxxxxx Investments Limited have been disclosed to the Purchaser.
74
(f) Where the Properties are leasehold, each lease is, so far as the
Warrantor is aware, valid and in force and no notice has been
served on the relevant member of the Group pursuant to s.146 of
the Law of Property Xxx 0000 (or other analogous legislation) and
no notice to quit has been served.
6.2 OCCUPATION AND USE
(a) The Group is entitled to vacant possession and is in occupation of
all of the Properties except those which are tenanted or subject
to licences or other rights of occupation.
(b) So far as the Warrantor is aware, each member of the Group has
paid all sums due in respect of the uniform business rates and
other local taxes and, So far as the Warrantor is aware, there are
no disputes in existence relating to the rateable value or
rateable use of any property for the purposes of rating.
(c) So far as the Warrantor is aware, the Company has not received any
proposals or notices relating to the properties which, in the
Warrantor's opinion, are likely to affect its use or enjoyment of
them.
6.3 ENCUMBRANCES
(a) None of the Properties is subject to any legal or equitable charge
(fixed or floating), mortgage, rent charge, lien or other
encumbrance securing the repayment of moneys or securing the
obligation or liability of the relevant member of the Group or any
other person.
(b) So far as the Warrantor is aware, none of the Properties is
subject to any outgoings other than general and water rates and
(in the case of those Properties which are leasehold) rent,
services charges, insurance premiums and VAT where applicable.
75
(c) None of the matters disclosed in the Disclosure Letter except for
any leases where a break notice has been served by the landlord or
the tenant adversely affects the use and enjoyment of the relevant
Property.
(d) All the obligations and liabilities relating to the properties
disclosed in the Disclosure Letter have been fully observed and
performed, all payments in respect of them have been duly made,
and the Group has no notice of any breach or alleged breach of any
of them.
(e) None of the Properties is subject to any option, right of
pre-emption or right of first refusal.
(f) None of the Properties is subject to any agreement for sale or
agreement for lease.
6.4 PLANNING MATTERS
(a) In this paragraph 6.4 the "Planning Act" means the Town and
Country Planning Act 1990 (or other analogous legislation) and any
other legislation from time to time relating to town and country
planning.
(b) So far as the Warrantor is aware, the use of each of the
Properties is the permitted use for the purpose of the Planning
Act.
(c) So far as the Warrantor is aware, the Company (or the relevant
member of the Group) has not received notice of any breach of
planning control as defined under the Planning Act by any member
of the Group.
(d) So far as the Warrantor is aware, no member of the Group has
breached the terms of any planning permissions, building
regulation consents or other necessary consents, licences and
approvals and no provisions remain to be fulfilled.
6.5 STATUTORY AND OTHER OBLIGATIONS
76
(a) The Warrantor is not aware of any breach of applicable statutory
and bye law requirements in respect of the Properties and, in
particular, with all requirements relating to health and safety,
means of escape in case of fire and the protection and
preservation of life and property.
(b) Each of the Properties where the Company (or the relevant member
of the Group) has the responsibility to obtain a fire certificate
has a current fire certificate.
(c) The Warrantor is not aware of any outstanding statutory
obligations to be fulfilled in respect of the Properties.
6.6 CONDITION OF THE PROPERTIES
(a) So far as the Warrantor is aware, the parts of the buildings and
other structures on the Properties, the repair of which is the
responsibility of the relevant member of the Group, are in good
and substantial repair and so far as the Warrantor is aware, fit
for the purposes for which they are currently used.
(b) So far as the Warrantor is aware, there is no evidence of any
structural or other defect in any of the Properties which
is likely to involve other than routine maintenance in the
foreseeable future.
6.7 DISPUTES
There are no matters in dispute or claims outstanding with any adjoining
or neighbouring owner or occupier or with any landlord or tenant or with
any authority, company or person in respect of any of the Properties and
the Warrantor is not aware of any pending or anticipated disputes or
claims.
6.8 LEASEHOLD PROPERTIES
In respect of each of the leases and underleases under which the
Properties are held by any member of the Group:
77
(a) the relevant member of the Group has paid the rent, service
charges and insurance and no member of the Group is aware of any
breach of the covenants on the part of the tenant and the
conditions contained therein;
(b) all necessary licences, consents and approvals required from
the landlords and any superior landlords have been obtained and
the covenants on the part of the tenant contained in such
licences, consents and approvals have been duly performed and
observed;
(c) there are no rent reviews currently in progress;
(d) there are no rent reviews which were due to be implemented
or triggered prior to the date hereof but which the landlord has
failed to implement or trigger;
(e) there are no outstanding notices or applications;
(f) all such leases and underleases are within Part II of the Landlord
and Xxxxxx Xxx 0000 (or other analogous legislation); and
(g) all such leases and underleases can be assigned or underlet as a
whole with the landlord's consent (not to be unreasonably
withheld).
6.9 TENANCIES
The Properties are held subject to and with the benefit of the leases and
underleases as set out in Schedule 5 and in relation thereto:
(a) all necessary consents to the grant of such leases and
underleases have been obtained;
(b) the Warrantor is not aware of any breaches of covenant by a tenant
of any of the Properties or of any persistent delay by a tenant in
paying rent;
78
(c) the Group has operated all the relevant rent review provisions;
(d) the Group has not waived any right of forfeiture; and
(e) there are no outstanding notices or claims.
6.10 ENQUIRIES
All information, representations and answers to enquiries (including, for
the avoidance of doubt, the enquiries raised by the purchaser of the
freehold interest in 00 Xxxx Xxxxxx, Xxxxxx W1) given by the Warrantor's
Solicitors, Messrs Xxxxxxxx Xxxxxx, or their agents to the Purchaser's
Solicitors or their agents concerning the Properties in the course of the
negotiations and enquiries leading to this Agreement are true, accurate
and complete in all material respects.
7. ENVIRONMENTAL MATTERS
(a) No member of the Group is engaged, nor has it within the last six
years been engaged, in any business which involves the handling,
storage, use, transportation, supply or disposal of, or has any
other connection with, any hazardous, dangerous or toxic
substance, materials or waste.
(b) No member of the Group has discharged or released any hazardous
substance in, on or from its facilities, plants or properties into
or upon the air, surface water, ground water or land at such
levels as would be a breach of current environmental laws.
(c) So far as the Warrantor is aware, no toxic or hazardous substances
(including but not limited to asbestos or similar substances) are
present in any of the Properties.
(d) So far as the Warrantor is aware, each member of the Group has
complied with all duties of care in respect of waste whether
criminal or civil and no proceedings have been brought or are
contemplated against any member of the Group in respect of any
breaches of any such duty.
79
8. ASSETS
(a) So far as the Warrantor is aware, and other than retention of
title claims arising in the ordinary and proper course of the
Group's business, no member of the Group has acquired or agreed to
acquire any material asset on terms that property therein does not
pass until full payment is made or that property therein does not
pass on delivery.
(b) So far as the Warrantor is aware, there are no contracts for the
purchase or taking or hiring of assets or services by any member
of the Group at prices significantly above the market prices
ruling at the date of execution or for the sale or giving or
hiring out of assets or services by any member of the Group at
prices significantly below the market prices ruling at the date of
execution.
(c) A list of all material maintenance contracts (together with
copies) is contained in the Disclosure Letter.
(d) Save for disposals in the ordinary and proper course of business,
no member of the Group has since the Accounts Date parted with the
ownership, possession or control of or otherwise ceased to retain
any of its assets or any interest therein for each value in excess
of the sum of (pound)25,000.
(e) So far as the Warrantor is aware, no member of the Group has
acquired any of its assets otherwise than by way of arm's length
transaction and has not knowingly acquired any asset for a
consideration in excess of its market value at the date of such
acquisition.
9. MATERIAL CONTRACTS AND LIABILITIES
(a) Save in respect of the Properties (which are dealt with in
Warranty 6), contracts of employment (which are dealt with in
Warranty 11) or Intellectual Property (Warranty 13), no member of
the Group is party to any contract or arrangement which is
material to the assets or profits of the Group and which:
80
(i) is long-term (that is, unlikely to have been fully
performed in accordance with its terms more than 6 months
after the date on which it was entered into or undertaken),
or unusually onerous or not made in the ordinary course of
business; or
(ii) is incapable of termination in accordance with its terms by
such member of the Group on three month's notice or less;
or
(iii) so far as the Warrantor is aware, is known to be of a
loss-making nature; or
(iv) cannot readily be fulfilled or performed by such member of
the Group on time without unusual and material expenditure
of money or personnel; or
(v) is not at arm's length; or
(vi) involves or is likely to involve the supply of goods or
services the aggregate sales value of which will represent
in excess of 5 per cent. of the turnover for the preceding
financial year of such member of the Group.
(b) No member of the Group has created or agreed to create and is not
party to and has no subsisting or contingent liability under:
(i) any mortgage, charge, lien or debenture; or
(ii) any contract of guarantee, contract of indemnity or
contract of suretyship; or
(iii) any agency or distributorship agreement; or
(iv) so far as the Warrantor is aware, any agreement or legally
binding arrangement in respect of the twenty largest
customers in value of
81
each member of the Group which is capable of being
terminated as a direct result of the change of control of
shareholders of the Company effected pursuant to this
Agreement.
(c) No power of attorney has been granted by any member of the Group
which may be effective or in force at any time after the date
hereof.
(d) So far as the Warrantor is aware, no member of the Group is in
material default under, and has not committed any material breach
of any of the terms of, any material agreement, instrument or
arrangement to which such member of the Group is a party, and, so
far as the Warrantor is aware, no threat or claim of any such
default or breach has been made and is outstanding against such
member of the Group and, so far as the Warrantor is aware, such
member of the Group has not done anything whereby any such
agreement, instrument or arrangement is liable to be prematurely
terminated or rescinded by any other party, or whereby the terms
thereof are liable to be altered without the consent of such
member of the Group to the detriment of such member of the Group.
(e) So far as the Warrantor is aware, no party to any agreement with,
or under a legally binding obligation to, any member of the Group
is in default thereunder, and, so far as the Warrantor is aware,
there are no circumstances likely to give rise to such a default.
(f) So far as the Warrantor is aware, none of the Group's customers
placing recruitment advertising business of more than
(pound)100,000 per annum for the period of 12 months prior to the
date hereof have cancelled or terminated its relationship with any
member of the Group and (so far as the Warrantor is aware) none of
the twenty largest customers of the Group in each of the relevant
countries of operation (UK, US, Canada, Australia, France and the
Netherlands) have threatened to cancel or terminate its
relationship with the relevant member of the Group. No member of
the Group has received any notice that any customer intends to
cancel or otherwise materially modify its relationship with the
Group on account of this Agreement and the Warrantor
82
is not aware of any errors or omissions which are of such a
serious nature that any relationship with any customer may be
jeopardised.
10. COMPLIANCE WITH APPLICABLE LEGISLATION
(a) All material records, systems (other than in respect of software
licensed to the Group), controls, data or information of the Group
are under the exclusive ownership and direct control of the
relevant member of the Group.
(b) Each member of the Group in the United Kingdom has made the
appropriate registration or registrations under the Data
Protection Xxx 0000 in respect of all personal data (as defined in
the Data Protection Act 1984) held by it or under its operation or
control and has complied with all the provisions of the Data
Protection Xxx 0000 for the time being in force.
(c) Save in relation to employers matters to which Warranty 11.2(f)
shall apply, so far as the Warrantor is aware, each member of the
Group has complied in all material respects with all legislation
(including statutory instruments, bye-laws, local and central
government orders, notices and decisions) which, in relation to
each country of operation, the relevant individual listed at the
beginning of this Schedule knows to be applicable in such
territory.
(d) So far as the Warrantor is aware, there are not pending or in
existence any investigations or enquiries by or on behalf of any
governmental or other body in respect of the affairs of any member
of the Group.
(e) Save as covered by the Warranties relating to Property (4),
Environmental Matters (7), Intellectual Property (13) and
Litigation (16) and, so far as the Warrantor is aware, all
statutory, municipal and other licences, consents, permits and
authorisations necessary for the effective carrying on of the
businesses of the Group as now carried on have been obtained and,
so far as the Warrantor is aware, are valid and subsisting and all
material conditions applicable to any such licence, consent,
permit or authorisation have been complied with in all material
respects and no member of the Group is currently in material
breach of such licences, consents, permits or
83
authorisations in any material respect or, so far as the Warrantor
is aware, is likely to be suspended, cancelled, refused, revoked,
modified or rendered subject to conditions not applicable at the
date of this Agreement.
11. EMPLOYEES
11.1 DIRECTORS AND EMPLOYEES
(a) The Group has supplied the Purchaser with Schedules summarising in
reasonable detail the terms and conditions of employment of all of
the employees of the Group as at the dates when such Schedules
were provided and has supplied reasonable details of consultants
engaged by the Group (but not, for the avoidance of doubt,
independent contractors or temporary staff hired from time to time
in the ordinary course of business).
(b) There are not in existence any service agreements or other
contracts with any employees of the Group which cannot be
terminated by three months' notice or less without giving rise to
any liability for damages or compensation (other than compensation
under the Employment Rights Act 1996).
(c) Except as disclosed in paragraph (a) above and so far as the
Warrantor is aware, there are not in existence any contracts or
arrangements of whatsoever kind (whether legally enforceable or
not) between any member of the Group and any existing or former
employees of such member of the Group including (without
limitation) contracts or arrangements for any benefit or payments
of any nature to or for the benefit of any existing or former
employees or any of their dependants save in respect of any
disability payment due to employees in Canada (details of which
are not permitted by law to be disclosed).
(d) There are not in existence any arrangements by which any person
has the use of any credit or charge card or account for which any
member of the Group is responsible.
84
(e) So far as the Warrantor is aware, no member of the Group has a
shadow director within the meaning of s.741 Companies Xxx 0000.
(f) The consummation of the transactions contemplated by this
Agreement will not (either alone or in conjunction with another
event, such as a termination of employment or other services)
entitle any employee or other person to receive severance or other
compensation which would not otherwise be payable absent the
consummation of the transactions contemplated by this Agreement or
cause the acceleration of the time of payment or vesting of any
award or entitlement under any Employee Plan.
11.2 DISPUTES, CLAIMS, TRADE UNIONS
(a) No current employee has given or has been given notice to
terminate his office or employment.
(b) There is no dispute actual or, so far as the Warrantor is aware,
threatened between any member of the Group and a material number
or category of its employees nor, so far as the Warrantor is
aware, are there any circumstances likely to give rise to any such
dispute. There have been no strikes, work-to-rules or go-slows
(official or unofficial) by any of the Group's employees during
the period of six years immediately preceding the Accounts Date
and there is no agreement or arrangement written or oral or by
custom and practice between any member of the Group and any trade
union or other body representing employees of any member of the
Group.
(c) There is not outstanding or, so far as the Warrantor is aware,
threatened any claim against any member of the Group on the part
of any person who has been or is an employee (or the dependant of
any such person) or any actual or known liability to make any
payment to any person including (without limitation) under the
Employment Rights Xxx 0000, the Employment Acts 1980 to 0000, xxx
Xxxxx Xxxxx Xxx 0000, the Sex Discrimination Xxx 0000, or the Race
Relations Xxx 0000, the Transfer of Undertakings (Protection of
Employment) Regulations 1981 (as amended by the Transfer of
Undertakings (Protection of Employment) (Amendment) Regulations
1987), the Trade
85
Union Reform and Employment Rights Xxx 0000 or the Collective
Redundancies and Transfer of Undertakings (Protection of
Employment) (Amendment) Regulations 1995 and the Disability
Discrimination Act 1995 (or under any other analogous
legislation).
(d) Within a period of one year preceding the date hereof no member of
the Group has:
(i) given notice of any redundancies to the Secretary of State
or started consultations with any independent trade union
or unions under the provisions of the Trade Union and
Labour Relations (Amendment) Xxx 0000 (or other analogous
legislation) nor has any member of the Group failed to
comply with any such obligation under the said Act; or
(ii) been a party to any relevant transfer as defined in the
Transfer of Undertakings (Protection of Employment)
Regulations 1981 (or other analogous legislation) nor has
any member of the Group failed to comply with any duty to
inform and consult any independent trade unions under the
said Regulations (or other analogous legislation).
(e) Each member of the Group has complied with all recommendations
made by the Advisory Conciliation and Arbitration Service (or
other analogous body) and with all awards and declarations made by
the Central Arbitration Committee.
(f) Each member of the Group has in relation to each of its employees
(and so far as relevant for the period of three years prior to the
date hereof to each of its former employees) complied in all
material respects with:
(i) all obligations imposed on it by all statutes, regulations
and binding codes of conduct and practice relevant to the
relations between it and its employees or any trade union
and has maintained current, accurate and suitable records
regarding the service and terms and conditions of
employment of each of its employees (including without
86
limitation records kept and returns lodged in relation to
statutory sick pay);
(ii) all collective agreements and recognition agreements for
the time being dealing with such relations and the
conditions of service of its employees; and
(iii) all relevant orders and awards made under any relevant
statute, regulation or code of conduct and practice
affecting the conditions of service of its employees.
11.3 BONUS SCHEMES AND REMUNERATION
(a) There are no schemes in operation by or in relation to the Group
whereunder any employee of the Group or any other person is
entitled to a commission or remuneration of any other sort
calculated by reference to the whole or part of the turnover,
profits or sales of the Group or any member of the Group.
(b) Since 31 March 1997, no change has been made or agreed to be made
in excess of 10 per cent of the rate of remuneration or the
emoluments or benefits of any employee and no change has been made
in the terms of engagement of any employee and no additional
directors have been appointed.
(c) No moneys other than in respect of remuneration or emoluments of
employment are (other than bona fide expenses) payable to or for
the benefit of any director or senior executive of any member of
the Group.
(d) No amounts are due to employees as arrears of (other than for the
current pay period) salary, wages or other remuneration (excluding
holiday pay).
(e) No ex-gratia pensions or similar payments are or are intended to
be made by any member of the Group.
11.4 ERISA
87
Except as disclosed in writing to the Purchaser, neither the Company nor
any of the Subsidiaries nor any Plan Affiliate (as defined below) has
maintained, sponsored, adopted, made contributions to or obligated itself
to make contributions to or to pay any benefits or grant rights under or
with respect to or made any commitments to create any "Employee Pension
Plan" (as defined in Section 3(2) of ERISA (as defined below)), "Employee
Welfare Benefit Plan" (as defined in Section 3(1) of ERISA),
"Multi-employer Plan" (as defined in Section 3(37) of ERISA), "Employee
Benefit Plan" (as defined in Section 3(3) of ERISA), plan of deferred
compensation, medical plan, life insurance plan, long-term disability
plan, dental plan or other plan providing for the welfare of any of the
Company's, any Subsidiary's or any Plan Affiliate's employees or former
employees or beneficiaries thereof, personnel policy (including but not
limited to vacation time, holiday pay, bonus programs, moving expense,
reimbursement programs and sick leave), excess benefit plan, bonus or
incentive plan (including but not limited to stock options, restricted
stock, phantom stock, stock bonus and deferred bonus plan), salary
reduction agreement, change-of-control agreement, employment agreement,
consulting agreement or any other benefit, program or contract, whether
or not written or pursuant to a collective bargaining agreement, within
the United States, relating or applicable to United States employees,
former employees or residents or which is otherwise subject to ERISA
(collectively, "U.S. Employee Benefit Plans") that could give rise to or
result in the Company, any Subsidiary or the Purchaser having any debt,
liability, claim or obligation of any kind or nature, whether accrued,
absolute, contingent, direct, indirect, known or unknown, perfected or
inchoate or otherwise and whether or not due or to become due. Correct
and complete copies of all U.S. Employee Benefit Plans previously have
been furnished to the Purchaser along with all applicable summary plan
descriptions and material employee communications, and, where applicable,
the most recent annual report, the most recent annual and periodic
accounting of plan assets, the most recent determination letter of the
United States Internal Revenue Service ("IRS") and the most recent
actuarial valuation relating thereto. The U.S. Employee Benefit Plans
(which, for purposes of this sentence, include any such plan maintained,
sponsored, adopted, contributed to or obligated to by the Company or any
of the Subsidiaries or any Plan Affiliate within the last six years) have
been maintained in all material respects in compliance with governing
documents and agreements and with applicable laws, regulations, rules,
ordinances,
88
orders and other requirement of law. Contributions, insurance premiums,
benefits and other payments to be made to or under each US Employee
Benefit Plan have been made promptly and in accordance with the governing
documents and applicable law. Except as disclosed in writing to the
Purchaser, with respect to each US Employee Benefit Plan (i) no
application, proceeding or other matter is pending before the IRS, the
Department of Labour in the US, PBGC or any other governmental agency,
(ii) no action, suit, proceeding or claim (other than routine claims for
benefits) is pending or threatened and (iii) no facts exist that could
give rise to an action, suit, proceeding or claim which, if asserted,
would result in a material liability or expense to the Company or the
Plan assets. The Company, the Subsidiaries, the Plan Affiliates, the
U.S. Employee Benefit Plans and any related trusts have fulfilled all
applicable obligations under the minimum funding standards of ERISA and
the United States Internal Revenue Code (the "Code"), have not incurred
any liability under Title IV of ERISA to the Pension Benefit Guaranty
Corporation ("PBGC") or otherwise (except for payment of PBGC premiums
which have been paid), and have not incurred any "accumulated funding
deficiency" (as defined in Section 302 of ERISA) as of the last day of
the most recently ended plan year of such U.S. Employee Benefit Plan. No
U.S. Employee Benefit Plan or trust created thereunder has been
terminated, and there have been no "reportable events" (as such term is
defined in Section 4043 of ERISA and other than a reportable event which
may result from this transaction), with respect thereto which will or
could result in the termination of such plan or give rise to a liability
to the Company, any Subsidiary or Purchaser. The present value of all
benefits, determined as of the most recent valuation date for such
benefits, vested under each Plan (as defined in ERISA), relating or
applicable to United States employees, former employees or residents or
otherwise governed by ERISA does not exceed the value of the assets of
such Plan allocable to such vested benefits, determined as of such date.
None of the U.S. Employee Benefits Plans is a "Multi-employer Plan"
within the meaning of Section 3(37) of ERISA and none of the Company, the
Subsidiaries, nor any Plan Affiliate contributes to or has an obligation
to contribute to, or has within the last six years contributed to or had
an obligation to contribute to, a Multi-employer Plan. With respect to
each such Plan, a favourable IRS determination letter is currently in
effect and nothing has occurred since the date of any such letter that
would adversely affect the qualified status of such Plan. All voluntary
employee benefit associations have been submitted to and approved as
exempt from federal
89
income tax under Section 501(c)(9) of the Code by the IRS. There has
occurred no transaction prohibited by Section 406 of ERISA or which
constitutes a "prohibited transaction" under Section 497(c) of the Code
and with respect to which a prohibited transaction exemption is not
currently in effect. The Company, the Subsidiaries and the Plan
Affiliates have complied with all material respects with the provisions
of Section 4980B of the Code with respect to any US Employee Benefit Plan
or benefit arrangement which is a group health plan within the meaning of
Section 5001(b)(1) of the Code. Except as may be required under Section
4980B of the Code or any similar state law requiring continuous coverage
with respect to health plans, neither the Company nor any Subsidiary or
Plan Affiliate maintains or contributes to, and is not obligated under
any plan, contract, policy or arrangement providing health or death
benefits (whether or not insured) to current or former employees or other
personnel beyond the termination of their employment or other services.
Except as specifically identified in the Disclosure Letter, each Employee
Plan may be unilaterally terminated and/or amended by the Company or as
applicable, the relevant Subsidiary or Plan Affiliate maintaining the
Plan at any time without damage or penalty. As used herein "ERISA" means
the United States Employee Retirement Income Security Act of 1974, as
amended.
12. PENSIONS AND OTHER BENEFITS
(a) (i) Other than the Xxxxxx Xxxxxx Pension and Life Assurance
Scheme ("the Scheme") and the executive pension plans with
Standard Life, M&G, Friends Provident, Scottish Equitable
and IPA ("the Plans"), there are no other pension, life
assurance, death benefit or sickness arrangements in
operation by or in relation to the Group in the United
Kingdom whether established under trust, by contract, by
board resolution, on an ex-gratia basis, by service
agreement or otherwise in respect of which the Group has or
may have any liability to contribute or an obligation to
any person who now is or has been an officer or employee of
any member of the Group or their dependants.
(ii) Material particulars of the basis on which the Group makes
or is liable to make contributions to the Scheme and the
Plans and the most recent actuarial report and
recommendations made or given in
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respect of the Scheme have been disclosed in writing to the
Purchaser.
(b) Except as disclosed in writing to the Purchaser and so far as the
Warrantor is aware:
(i) no power to augment benefits under the Scheme has been
exercised in relation to any member of the Scheme since the
date of the most recently disclosed actuarial report;
(ii) no discretion has been exercised under the Scheme to admit
to membership of the Scheme any present or former employee
who would not otherwise be eligible for admission to
membership thereof; and
(iii) no discretion has been exercised under the Scheme to
provide in respect of a member thereof a benefit which
would not otherwise be provided in respect of such member.
(c) All contributions due, which are payable by any member of the
Group under the trust deed, rules or other provisions or
arrangements governing the Scheme and the Plans to secure or
provide the benefits for and in respect of the members of the
Scheme and the Plans (including pensioners, deferred pensioners
and any other persons prospectively or contingently entitled to
benefit thereunder) and all contributions due from members of the
Scheme and the Plans have been duly made.
(d) All premiums by way of insurance which are payable in respect of
the Scheme and the Plans by any member of the Group or by the
trustees or other administrator of the Scheme have been duly paid.
(e) All lump sum death in service benefits which may be payable under
the Scheme are fully insured.
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(f) The benefits which have accrued for or in respect of the members
of the Scheme are fully and properly funded as at the date hereof
on a discontinuance basis to the standards required by s.56 of the
Pensions Xxx 0000.
(g) All steps have been taken to ensure that the Scheme conforms
substantially with:
(i) the preservation requirements of sections 69 to 82 of the
Xxxxxxx Xxxxxxx Xxx 0000 and the Scheme has been
administered (where applicable) in accordance with the
contracting out requirements of the Xxxxxxx Xxxxxxx Xxx
0000 and in accordance with the trusts, powers and
provisions of the Scheme;
(ii) such provisions of the Pensions Xxx 0000 and regulations
made thereunder as are in force at Completion; and
(iii) the requirements relating to contracting out prior to and
since 6 April 1997.
(h) So far as the Warrantor is aware, no claim has been made against
the trustees or administrator of the Scheme or against any other
person whom any member of the Group is or may be liable to
indemnify or compensate in respect of any act, event, omission or
other matter arising out of or in connection with the Scheme and
the Warrantor is not aware of any circumstances which may give
rise to any such claim.
(i) The Scheme is capable of being an exempt approved Scheme within
the meaning of Chapter I of Part XIV of ICTA as amended and there
is no reason why such approval should be withdrawn or, as the case
may be, not be granted. The Scheme is governed solely by the
deeds and documents copies of which have been supplied to the
Purchaser.
(j) In respect of the United Kingdom, there is no claim for nor is any
member of the Group under any legal obligation to pay any pension
or make any other
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payment after death or retirement or in respect of disability or
otherwise to provide "relevant benefits" within the meaning of
Chapter I of Part XIV of ICTA to or in respect of any person who
is now or has been an officer or employee of any member of the
Group and is not party to any scheme or arrangement having as its
purpose or one of its purposes the making of payments or the
provision of benefits as aforesaid and no such pension or payment
is now being paid voluntarily except as disclosed in writing to
the Purchaser and no ex-gratia payments in respect of any pension
have been or are proposed to be made by any member of the Group to
any employees or former employees or their dependants or
relatives.
13. INTELLECTUAL PROPERTY AND KNOW-HOW
13.1 INTERESTS
Each member of the Group:
(a) (i) is the registered proprietor (where appropriate) and the
beneficial owner of each of the Intellectual Property
Rights listed in Schedule 6, free from all charges, liens,
encumbrances, equities and licences user and other
agreements, rights and claims whatsoever; and
(ii) has the benefit of those licences, agreements and
arrangements relating to Intellectual Property Rights which
are listed in Schedule 6 (accurate details of which have
been supplied to the Purchaser) and such licences,
agreements and arrangements are in full force and effect,
no notice has been given on either side to terminate or
amend them, no amendment has been made or accepted to their
terms, the obligations of all parties thereto have been
complied with as required to date in all material aspects
and no disputes exist in respect of them;
(b) has no interest in any Intellectual Property Right other than
those referred to in sub-paragraph (a) of this paragraph 13.1 and
has not entered into any agreement for:
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(i) the licensing or use of any Intellectual Property Right; or
(ii) the provision or acquisition of know-how or technical
information or assistance; or
(iii) the prohibition or restriction of the disclosure of any
know-how or technical information.
13.2 VALIDITY; PROTECTION
So far as the Warrantor is aware, all of the Intellectual Property Rights
referred to in sub-paragraphs (a) (i) and (ii) of paragraph 13.1 are
valid, enforceable and not subject to revocation and each member of the
Group has taken all steps reasonably necessary for the fullest protection
of such Intellectual Property Rights.
13.3 INFRINGEMENT ETC
So far as the Warrantor is aware, the Group has not been notified of any
infringement of any Intellectual Property Rights owned by third parties
by any of the Intellectual Property Rights listed in Schedule 6 or used
by the Group.
14. INSURANCE
(a) The Group has effected all insurances required by law to be
effected by them.
(b) The summaries of the insurance policies provided to the Purchaser
by the Company prior to the date hereof are fair and accurate.
(c) None of the premiums on the said policies are overdue. All the
other conditions of the said policies have been performed and
observed in any material respect. So far as the Warrantor is
aware, Nothing has been done or has been omitted to be done
whereby any of the said policies has or may become void or
voidable.
94
(d) The said policies are in the possession of the relevant member of
the Group.
(e) So far as the Warrantor is aware, there is no claim or dispute
outstanding under any of the said policies and no claim against
any member of the Group by any third party is outstanding in
respect of any risk covered by any of the policies or by any
policy previously held.
(e) So far as the Warrantor is aware, none of the insurances will be
rendered void or voidable as a result of this Agreement or
Completion.
(f) So far as the Warrantor is aware, there are no circumstances which
would or might entitle any member of the Group to make a claim
under any of the said policies or which would be required under
any of the said policies to be notified to the insurers.
15. LOANS AND BANK ACCOUNTS
(a) The aggregate amount appearing in the Accounts as being
outstanding in respect of loans owing by each member of the Group
was at the Accounts Date the aggregate of the sums from
whatsoever source so outstanding.
(b) Such amount did not, and the aggregate amount outstanding in
respect of loans owing by each member of the Group does not now,
exceed any limitation on such member of the Group borrowing
contained in its Articles of Association or in any debenture or
loan stock deed or other deed or document executed by it or, in
the case of borrowings on overdraft, its overdraft facilities.
(c) The amount unpaid of principal, interest and all other moneys due
under or in connection with such loans did not at the Accounts
Date exceed in the aggregate the amount appearing in the Accounts.
(d) All amounts outstanding and appearing in the books of any member
of the Group as loan accounts with or as due to directors or
shareholders wholly
95
represent money or money's worth paid or transferred to such
member of the Group as the case may be or remuneration accrued due
and payable for services rendered and (save for such remuneration)
no part thereof has been provided directly or indirectly out of
the assets of such member of the Group.
(e) There were not at the Accounts Date any outstanding capital
commitments except as disclosed in the Accounts and since 31 March
1997 no member of the Group has entered into or agreed to enter
into any capital commitments exceeding (pound)100,000 in the
aggregate or (pound)25,000 in the case of any one commitment.
(f) There are no amounts owing to or by the Company by or to the
Shareholders or any of them or any Connected Person of any of
them.
16. LITIGATION
(a) Save in relation to disputes with employees (to which Warranty
11.2 shall apply) or as regards Intellectual Property (Warranty
13), Property (Warranty 6.7), no member of the Group is engaged,
whether as plaintiff or defendant or otherwise, in any litigation
(save for debt collection in the ordinary course of business) or
criminal or arbitration proceedings or any proceedings before any
tribunal and no such litigation, proceedings or prosecutions are
pending or threatened (by or against any member of the Group) and,
so far as the Warrantor is aware, there are no facts or
circumstances which might give rise thereto or to any proceedings
in respect of which any member of the Group is or may be liable to
indemnify any party concerned therein.
(b) So far as the Warrantor is aware, there are no circumstances that
are likely to give rise to proceedings of any character against
any director or employee or former director or former employee of
any member of the Group or any other person whatsoever in respect
of any acts or defaults for which any member of the Group might be
vicariously liable.
(c) There are no unsatisfied judgements or Court Orders against any
member of the Group, no injunctions have been granted against any
member of the
96
Group and no member of the Group has given an undertaking to any
Court or to any third party arising out of any legal proceedings.
17. INSOLVENCY
(a) No receiver, administrative receiver or administrator has been
appointed of the whole or any part of the assets or undertaking of
any member of the Group.
(b) No member of the Group is in liquidation and no order, petition,
application, proceeding, meeting or resolution has been made,
presented, brought, called or passed for the purpose of appointing
an administrator or winding up any member of the Group.
(c) No member of the Group is insolvent and has stopped payment of or
has become unable to pay, its debts for the purposes of s.123
Insolvency Act 1986 and there has been no delay by any member of
the Group in the payment of any obligation due for payment.
97
SCHEDULE 4
DEED OF INDEMNITY
THIS DEED is made the day of July 1997
BETWEEN:
(1) AK WARRANTY AND INDEMNITY LIMITED of 00 Xxxxx Xxxxxx Xxxx, Xxxxxx XX0X
0XX ("WARRANTOR"); and
(2) TMP WORLDWIDE HOLDINGS LIMITED (No. 3131238) whose registered office is
at Finsgate, 0-0 Xxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX (the "PURCHASER").
WHEREAS pursuant to an agreement of even date herewith and made between
the Warrantor (1) and the Purchaser's US parent company, TMP Worldwide
Inc. (2) (the "AGREEMENT") the Purchaser has today completed the purchase
from the Shareholders (as defined in the Agreement) of all of the Sale
Shares (as therein defined) in reliance, inter alia, upon the indemnities
hereinafter contained.
NOW THIS DEED WITNESSES AND IT IS HEREBY AGREED AND DECLARED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Deed, unless the context otherwise requires (and save to the
extent otherwise defined herein):
(a) words and expressions defined in the Agreement shall have the same
meanings herein and any provisions in the Agreement concerning
matters of construction or interpretation shall also apply in this
Deed;
(b) "TAX LIABILITY" means any amount of Tax payable by the Company or
the Subsidiaries and in particular, but without prejudice to the
generality of the foregoing, includes or shall be deemed to
include in relation to any of the foregoing (as appropriate) the
following:
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(i) any amount of Tax that would have been payable but for the
utilisation of any loss, allowance, credit, relief,
deduction, exemption or set-off; (in each case a "Relief")
where such Relief arises in respect an event occurring
after Completion;
(ii) any amount of Tax that would have been payable but for any
postponement or arrangement for payment by installments;
and/or
(iii) any amount of Tax that is payable by the Company or would
otherwise be payable, but for the utilisation of any
Relief, in excess of the amount of (pound)500,000 in
connection with the sale of the freehold property at
Xxxxxxxxx Xxxxx, 00 Xxxx Xxxxxx, Xxxxxx X0 (xxx "Freehold
Property"); and/or
(iv) any amount of Tax that is payable by the Company or would
otherwise be payable, but for the utilisation of any Relief
(other than ACT on the Pre-Sale Dividend), in connection
with the Pre-Sale Dividend and/or the Reorganisation and
Reconstruction of Share Capital; and/or
(v) any amount payable by way of payment on account.
It is hereby acknowledged by the Warrantor that the exclusions set
out in Clauses 3.1 and 7 of this Deed and the limitations (other
than paragraphs 4 and 5) set out in Schedule 7 to the Agreement
shall not apply to any Tax Liability arising under Clause
1.1(b)(iii) and (iv) of this Deed.
1.2 For the purposes of this Deed, the date on which a Tax Liability is
payable shall be deemed to be the later of a written demand therefor is
received by the Warrantor from the Purchaser or the fifth Business Day
prior to the date on which such payment of Tax is actually made or, if
earlier, the date on which it would have been due (assuming that no
appeal had been made against the assessment or other notification in
respect of any such Tax which has the effect of postponing payment and
that an assessment had been raised at the earliest possible date by the
relevant
99
Tax Authority) but for the utilisation of any loss, allowance, credit,
relief, deduction, exemption, set-off, postponement, arrangement for
payment by installment or payment on account.
1.3 Any reference to any act, transaction, omission or event in consequence
of which liability or increased liability to Tax may be incurred includes
a reference to anything which under the provisions of any relevant Tax
Legislation is deemed to be or treated or regarded as being any such act,
transaction, omission or event as aforesaid.
2. COVENANTS
2.1 The Warrantor hereby covenants with the Purchaser that they will at all
times, as directed by the Purchaser, pay to the Purchaser or the Company
or as the Purchaser may otherwise direct an amount equal to:
(a) any Tax Liability that arises directly or indirectly as a result
of any act, omission, event, transaction or series or transactions
(including the entering into of the Agreement and/or Completion)
occurring wholly on or before the date hereof and whether or not
the Purchaser, the Company or the Subsidiaries are or may be
entitled to claim reimbursement thereof from any person or
persons;
(b) any Tax Liability that results from the receipt by the Purchaser
or the Company and/or the Subsidiaries on its behalf of any
payment under the provisions of this Deed;
(c) any costs or expenses reasonably incurred by the Purchaser and/or
the Company and/or the Subsidiaries and/or Associated Companies
and/or Subsidiary Undertakings in connection with either Clause
2.1 (a) or (b) above; such payment to be made on the date on which
such Tax Liability is deemed to be payable under the provisions of
Clause 1 hereof.
2.2 In the event that a Tax Liability arises to a Subsidiary, the Warrantor's
liability under this Deed shall be restricted to that proportion of the
Tax Liability so arising as the
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Company holds equity shares (whether directly or indirectly) in the
Subsidiary and for this purpose the Company's proportionate holding of
equity shares in the Subsidiary shall be determined in accordance with
s.838 ICTA but on the assumption that the references to ordinary shares
therein were references to equity shares.
3. EXCLUSIONS
3.1 The covenants contained in Clause 2 of this Deed shall not apply to a Tax
Liability:
(a) to the extent that provision or reserve (including any provision
for deferred Tax) in respect of the Tax Liability is made in the
Accounts ; or
(b) which directly arises as a result of any event, act, omission,
transaction or series of transactions which has occurred since the
Accounts Date in the ordinary course of business of the Company or
the Subsidiaries; or
(c) which arises as a direct and sole result of an increase in any
rate of Tax made after the date hereof and with retrospective
effect; or
3.2 Schedule 7 to the Agreement (to the extent it relates to any claim or
indemnity under this Deed) shall have as full effect as if it were
incorporated herein in respect of any claim or indemnity or matter to
which this Deed relates (or would, but for the provisions of Schedule 7,
relate) in order to limit the liability as provided in Schedule 7 of the
Warrantor in respect of the covenant given by the Warrantor to the
Purchaser under this deed and this deed and all claims made pursuant
thereto shall accordingly have effect subject to and as qualified by the
relevant provisions of Schedule 7.
4. CONDUCT OF TAX CLAIM
4.1 If the Purchaser or the Company or any of the Subsidiaries receives any
notice, demand, assessment or other document whereby it appears that the
Company or the Subsidiaries is or may be required to make or suffer an
actual or a deemed payment of Tax or that there may otherwise be a Tax
Liability which may result in the Purchaser having a claim against the
Warrantor under this Deed, the Purchaser
101
shall, within 14 days of the Purchaser becoming aware of such notice,
demand or assessment, give or procure that notice in writing is given to
the Warrantor or the Warrantor's Solicitors and the Warrantor shall
thereupon be entitled (subject as hereinafter provided and after
consultation with the Purchaser) to resist such Tax Liability in the name
of the Company and/or the relevant Subsidiary but at the expense of the
Warrantor and to have the conduct of any appeal, dispute, compromise or
defence thereof and of any incidental negotiations and the Purchaser will
give and/or procure that the Company and/or relevant Subsidiary gives the
Warrantor all reasonable co-operation, access and assistance for the
purposes of resisting such Tax Liability provided always that, subject to
the prior written agreement by the Purchaser (not to be unreasonably
withheld), the Warrantor shall not be entitled to resist any such Tax
Liability unless the Company and/or the Subsidiaries is/are indemnified
and secured to its/their reasonable satisfaction by the Warrantor against
all losses (including additional liability to Tax, costs, damages, and
expenses including the cost of time expended, such cost of time to be
calculated upon a reasonable basis) which may thereby be incurred.
4.2 The Warrantor shall keep the Purchaser and/or the Company and/or relevant
Subsidiary fully informed of all relevant matters arising during any
dispute and the Warrantor shall forward or procure to be forwarded copies
of all correspondence and other communications of whatever nature to the
Secretary of the Company/Purchaser/the relevant Subsidiary.
4.3 The Warrantor shall not make any settlement, compromise or agreement of
whatsoever nature nor agree any matter in the conduct of any appeal,
defence or dispute which could affect the amount of Tax the Purchaser,
the Company or the Subsidiaries may be required to pay or suffer or the
amount of any Tax Liability whatsoever without the prior approval in
writing of the Purchaser such approval not to be unreasonably withheld.
4.4 If within 14 days of the receipt by them of the aforesaid notice the
Warrantor fails to notify the Purchaser of their intention to dispute the
Tax Liability which is the subject matter of the said notice or if they
fail to comply with the conditions as set out in Clause 4.1above within
28 days of receipt of that said notice then the Purchaser and/or the
Company shall be free to pay or settle the Tax Liability on such terms as
102
they may in their absolute discretion think fit and without prejudice to
their rights and remedies under this Deed and the Warrantor shall not
have conduct of any appeal or negotiation in connection therewith.
5. PREPARATION OF TAX RETURNS
5.1 The Warrantor or its duly authorised agents shall be responsible for and
have the conduct of preparing, submitting to and agreeing with the Inland
Revenue all Tax computations of the Company and the Subsidiaries for all
accounting periods ending on or before the Accounts Date subject to all
such computation documents and correspondence relating thereto being
submitted in draft form to the Purchaser or its duly authorised agents
for comment. The Purchaser or its duly authorised agents shall comment
within 21 days of such submission. If the Warrantor has not received any
comments within 21 days the Purchaser and its duly authorised agents
shall be deemed to have approved of such draft documents. If the
Purchaser or its duly authorised agents have any comments or suggestions
the Warrantor shall not unreasonably refuse to adopt any such comment or
suggestion. The Warrantor and the Purchaser shall each respectively
afford (or procure the affordance) to the other or their duly authorised
agents of information and assistance which may reasonably be required to
prepare, submit and agree all outstanding Tax computations.
5.2 The Purchaser or its duly authorised agent shall be responsible for and
have the conduct of preparing, submitting to and agreeing with the Inland
Revenue all taxation computations of the Company and the Subsidiaries for
all accounting periods ending after the Accounts Date subject to any such
computations relating to periods commencing before Completion being
submitted in draft form to the Warrantor or its duly authorised agents
for comment. The Warrantor or its duly authorised agents shall comment
within 14 days of such submission. If the Purchaser has not received any
comments within 14 days the Warrantor and its duly authorised agents
shall be deemed to have approved such draft document and, save as
provided below, the Purchaser shall not be obliged to accept any such
comments. The Warrantor has the right to approve, at its sole
discretion, the manner in which the Purchaser shall treat the Tax
position in the Tax computations for the financial year of the Company
ending in 1997 so far as it relates to the sale of the Freehold Property
and shall have the right to approve, at its sole discretion, the manner
of negotiations with the Inland
103
Revenue in respect of the calculations of the chargeable gain arising on
the sale of the Freehold Property. To the extent that the Tax Liability
as set out in Clause 1.1(b)(iii) in respect of the sale of the Freehold
Property is less than the sum of (pound)500,000, the Purchaser shall pay
to the Warrantor the amount of the difference between the amount of such
Tax Liability and the sum of (pound)500,000. Such sum shall be payable
within 14 days of the relevant Tax computations being agreed in writing
with the Inland Revenue. If such sum shall not be paid within 14 days as
aforesaid the Purchaser shall pay to the Warrantor interest at the rate
of 2% above base rate for the time being of National Westminster Bank
plc. Any additional costs of valuation and negotiation thereof for the
purposes of agreeing such Tax Liability shall be for the Warrantor's
account.
6. THE PURCHASER'S FURTHER OBLIGATIONS
6.1 The Purchaser undertakes with the Warrantor that it shall preserve and
shall procure that the Company and the Subsidiaries preserve all
documents, records, correspondence, accounts and other information
whatsoever in respect of or relevant for the purposes of determining the
liability of the Company to Tax until such time as the Warrantor shall
cease to have any liability or contingent liability pursuant to the
covenant given by the Warrantor under this Deed.
6.2 The Purchaser hereby agrees with the Warrantor that it will not and will
procure that the Company and the Subsidiaries will not without the prior
written consent of the Warrantor disclaim any relief claimed by the
Company and the Subsidiaries prior to Completion (such consent not to be
unreasonably withheld or delayed) and that it will procure that the
Company and the Subsidiaries do all such things as are reasonably
necessary or desirable to give effect to all reliefs effective prior to
Completion and to claim or otherwise obtain all reliefs the obtaining of
which was taken into account in computing the provisions for Tax in the
Accounts.
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7. RELIEFS AND CORRESPONDING SAVINGS
7.1 Where:-
(a) an amount of Tax paid by the Company or the Subsidiaries has
resulted in a Relief which would not otherwise have arisen (a
"Relevant Relief"); and
(b) the Warrantor has made a payment to the Purchaser in respect of
such amount under this Deed;
(c) the Purchaser shall procure that the Company or the Subsidiaries
shall so far as reasonably possible utilise such Relevant Relief:-
(i) in priority to other Reliefs; and
(ii) make a payment to the Warrantor of an amount equivalent to
the amount by which the Company's or Subsidiaries'
liability to Tax is reduced as a result of the utilisation
of the Relevant Relief less costs and expenses reasonably
incurred by the Purchaser, the Company and/or the
Subsidiaries.
7.2 A payment under this Clause 7 shall be made on the date on which the
Company's or the Subsidiaries' liability to make a payment of Tax is
reduced as a result of the Relevant Relief.
7.3 The Warrantor shall be entitled to require and the Purchaser shall
procure that the Company's or the Subsidiaries' auditors shall certify
the amount of any payment due under this Clause 7.
8. COUNTER-COVENANT
The Purchaser hereby covenants with the Warrantor to pay to, or procure
that the Company or the Subsidiaries will pay to the Warrantor an amount
equal to any liability or increased liability to Tax of the Warrantor
which relates to corporation tax
105
assessed on the Company or any of the Subsidiaries but which is assessed
on the Warrantor solely pursuant to S.767A of ICTA.
9. GENERAL
9.1 The provisions of Clause 12 (Notices) and 13 (Proper Law) of the
Agreement shall apply, mutatis mutandis, to this Deed in the same way as
they apply to the Agreement.
9.2 This Deed shall be binding on the Warrantor and its respective successors
and personal representatives.
9.3 This document is intended to be executed as a deed and shall not be
treated as delivered until it is dated.
9.4 This Deed may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument. The
execution by a Party of one or more counterparts shall constitute
execution by that Party of this Deed for all purposes.
IN WITNESS whereof the parties hereto have caused this Deed to be executed the
day and year first above written
106
SCHEDULE 5
PARTICULARS OF PROPERTIES
-----------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
LESSEE SHORT DESCRIPTION DATE OF LEASE TERM OF LEASE CURRENT ANNUAL RENT AND
(AND TITLE NO. IF NEXT REVIEW DATES
REGISTERED) (IF ANY)
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Basement and Third to 15th July 1997 Expires 1st February (pound)540,000 pa - No rent
Limited Xxxxxxx Xxxxxx, 00 Xxxx 0000 (subject to review
Square, London W1A 1DS Tenant's break)
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx 4 car parking spaces at 5th June 1997 Term expired 23rd (pound)12,000 - No review
Limited 00/00 Xxxx Xxxxxx, Xxxxxx June 2000
W1V 5AH
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Part Xxxxxx Xxxxx, 00 00 Xxxxx 0000 3 years from 28th (pound)13,250 - No review
Limited Xxxxxx Xxxx, Xxxxxx XX0X February 1995
1AP
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Third Floor, Xxxxxx House, 15th May 1997 1 year from 1st (pound)19,500 - No review
Limited 00/00 Xxxxxxxx Xxxxxx, February 1997
Xxxxxxxxxx, Xxxxx XX0 0XX
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx 00xx Xxxxx, Xxxxxxxxxx, 11th April 1986 25 years from 25th (pound)117,000 - 1996 review to
Limited Lower Castle Street, Title No AV123608 March 1986 be confirmed
Xxxxxxx, Xxxx XX0 0XX
107
-----------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
LESSEE SHORT DESCRIPTION DATE OF LEASE TERM OF LEASE CURRENT ANNUAL RENT AND
(AND TITLE NO. IF NEXT REVIEW DATES
REGISTERED) (IF ANY)
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx 1st and Mezzanine Floors, 31st December 1981 25 years from 7th (pound)63,000 - 1996 review to
Limited Xxxx Grey House, 75/85 Title No TY101059 December 1981 be confirmed
Xxxx Xxxxxx, Xxxxxxxxx
Xxxx Xxxx XX0 0XX
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx 5 car parking spaces at undated Indefinite from 6th (pound)6625
Limited Xxxx Xxxx Xxxxx, Xxxxxxxxx Xxxxx 0000
Xxxx Xxxx
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Part 1st Floor, Royal 6th December 1990 24.42 years from 28th (pound)70,750
Limited Exchange House, 100 Queen February 0000
Xxxxxx, Xxxxxxx,
Xxxxxxxxxxx X0 0XX
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Ground Floor and One Car 19th December 1994 5 years from and (pound)10,000 per annum - no
Limited Parking Space including rent reviews
Riverside House 12th September 1994
00 Xxxxxxxxx Xxxx Xxxxxxx
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx 7th Floor Ship 22nd July 1987 From 10th July 1987, (pound)95,000
Limited Canal House expiring on 29th - next review date 00xx
Xxxx Xxxxxx September 2012 September 1997
Manchester
108
-----------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
LESSEE SHORT DESCRIPTION DATE OF LEASE TERM OF LEASE CURRENT ANNUAL RENT AND
(AND TITLE NO. IF NEXT REVIEW DATES
REGISTERED) (IF ANY)
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Xxxx 0 Xxxxxxx Xxxxxx 18th August 1989 Commencing on 18th (pound)20,000
Limited Highams Park Industrial August 1989 until Next rent review date -
Estate Xxxxxx X0 22nd December 2003 25th December 1998
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Part 7th floor 25th September Commencing on 24th (pound)55,000
Limited (unit 24) Tricorn House 1978 (title June 1978 and - next rent review date
Hagley Road Birmingham number: WM 616869) expiring on 24th 25th March 1998
March 2011
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx 9 car parking spaces at Undated Indefinite term (pound)6,500
Limited Tricorn House commencing on 15th
00/00 Xxxxxx Xxxx Xxxxxxxx 0000 -
Xxxxxxxxx Xxxxxxxxxx determinable by
either party on one
month's notice
109
-----------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
LESSEE SHORT DESCRIPTION DATE OF LEASE TERM OF LEASE CURRENT ANNUAL RENT AND
(AND TITLE NO. IF NEXT REVIEW DATES
REGISTERED) (IF ANY)
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx One car parking space at 21st December 1993 Indefinite term (pound)750
Limited Tricorn House Hagley commencing on 4th
Road Birmingham January 1994
- determinable by
either party on one
calendar month's
notice
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Part 7th floor (unit 26) 10th November 1988 Commencing on 24th (pound)7,230
Limited Tricorn House 51/53 June 1988 and next rent review date -
Hagley Road Edgbaston expiring on 24th 25th March 1998
Birmingham March 2011
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Part 2nd floor 1st August 1995 3 years from and (pound)13,437.50
Limited St Xxxxxx House 40 Great including 1st August - no rent review
Xxxxxx Street Leeds 1995
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Part 2nd floor 1st August 1995 3 years from and (pound)20,362.50
Limited St Xxxxxx House including 1st August per annum - no
Great Xxxxxx 1995 rent reviews
Street Leeds
110
-----------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
LESSEE SHORT DESCRIPTION DATE OF LEASE TERM OF LEASE CURRENT ANNUAL RENT AND
(AND TITLE NO. IF NEXT REVIEW DATES
REGISTERED) (IF ANY)
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Knightway House, Park 12 August 1988 25 years from 12th (pound)115,000 - Review due
Limited Street, Bagshot, Surrey (SY589202) August 1988 12th August 1993 still to
XX00 0XX be confirmed. Review
every 5 years
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Ground Floor and First 19th June 1979 - 21 years from 24th (pound)20,000 - review due at
Limited Floor, Unit 14, Prospect not registered June 1979 25th December 1996 to be
Place, Welwyn, Herts confirmed
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Ground Floor and Basement, 17 December 1979 21 years from 25th (pound)15,000 - Next rent
Limited Xxxx 00, Xxxxxxxx Xxxxx, December 1979 review 24th June 0000
Xxxxxx, Xxxxx
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Sixth Floor, Kings House, 23rd October 1987 25 years from 29th (pound)48,900 - Next rent
Limited Bond Street, Bristol, Avon - Title No AV148540 September 1987 review dated 29th
XX0 0XX September 1997
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx 00 Xxxxxx xx X'Xxxxx - 00xx Xxxxx 0000 3, 6 or 9 years from 537,600 FF
France SA 75001 Paris 1st April 1996
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx BV 1st Floor and two rooms on 8th August 1994 5 years expiring 30th 130,000 F inclusive
Xxxxxx Xxxxx, Xxxxxxxx 00, Xxxxx 0000
Xxxxxxxxx
111
-----------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
LESSEE SHORT DESCRIPTION DATE OF LEASE TERM OF LEASE CURRENT ANNUAL RENT AND
(AND TITLE NO. IF NEXT REVIEW DATES
REGISTERED) (IF ANY)
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Level 00 000-000 Xxxxxx 6th January 1997 1st December 1996 to $170 per sq metre per
Property Limited Street, North Sydney 3rd November 1999 annum (reviewable to $215
(with option to renew) per sq metre 1st December
1998)
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Eight car parking spaces Undated Month to month $3780 per space per annum
Property Limited Xxxxx 0, 000 Xxxxxx
Xxxxxx, Xxxxx Xxxxxx
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Suites 2.2, 2.5 and 2.6 26th July 1995 5 years from 1st May $68,676 per annum
Property Limited Xxxxxxx Xxxxx, 000 Xx 0000
Xxxxx Road, Melbourne
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Seven car parking spaces 26th July 1995 - $160 per space per month
Property Limited Xxxxxxx Xxxxx, 000 Xx
Xxxxx Xxxx, Xxxxxxxxx
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Part Floor, 18 QV.1 28th October 1993 4 years from 1st $7425 per annum
Property Limited Building, 250 St George's October 1993 extended
Terrace, Perth for three months
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx 0000 Xxxxxx Xxxxxx, Xxxxx Month to month $525 per month
Canada Inc York, Toronto
112
-----------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
LESSEE SHORT DESCRIPTION DATE OF LEASE TERM OF LEASE CURRENT ANNUAL RENT AND
(AND TITLE NO. IF NEXT REVIEW DATES
REGISTERED) (IF ANY)
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx 000 Xxxxxxxx Xxxxxx, Xxxx expiring 30th $2000 per month
Canada Inc Toronto August 1997
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx 0 Xxxxxx Xxxxxx, Xxxxxxx 11th April 1995 2 years expiring 30th $2948.40 per month
Canada Inc June 1997 extended to
31st November 1977
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Inc Suites 210 and 211, 303 1st November 1989 Term expiring on 30th $119,189 - Next review 1st
West Erie, Chicago, November 2000 November 1997
IL60610
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Inc 0000X Xxxxxxxxxxx Xxxxxx, Xxxxxxx Term expiring 28th $32,400 - Next review
Xxxxx Xxxxxx XX 00000 February 2000 28th February 1998
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Inc Century Square, 1501 Unknown Term expiring 30th $52,656 - Next review
Fourth Avenue, Suite 2850, June 2002 30th June 2000
Xxxxxxx XX 00000
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Inc 0000 Xxxxxx Xxxxxx, Xxxxx 00xx January 1996 For a term expiring $19,462 - Next review 1st
210, Xxxxxx XX 00000 31st January 1999 January 1998
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Inc 00 Xxxxxxx Xxxxxx, Second Unknown Term expiring 1st $72,500 - Next review 0xx
Xxxxx, Xxxxxx XX 00000 January 2000 January 1998
113
-----------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
LESSEE SHORT DESCRIPTION DATE OF LEASE TERM OF LEASE CURRENT ANNUAL RENT AND
(AND TITLE NO. IF NEXT REVIEW DATES
REGISTERED) (IF ANY)
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Inc King Plow Arts Centre, 887 5th September 1996 Term expiring 31st $17,400 - Next review 0xx
Xxxx Xxxxxxxxx, -X-0, March 1998 November 1997
Xxxxxxx XX 00000
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Inc 29 West Thirty Fifth 5th March 1991 Term expiring 15th $191,475 - Next review
Street, New York NY 1001 August 1998 14th June 1998
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Inc 000 Xxxxxxxxx Xxxxxxx, 0xx April 1996 Term expiring 15th $306,221 - Next review
Suite 100, Mill Valley, November 2002 15th November 1997
California
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx Inc HQ Business Centre, Unknown Three months, expired $2,491 per month
Tyson's Corner, 8000 17th June 0000
Xxxxxx Xxxxxxxx, Xxxxx
0000 Xxxxxx XX 00000
114
SCHEDULE 6
INTELLECTUAL PROPERTY RIGHTS
[INTENTIONALLY LEFT BLANK]
SCHEDULE 7
THE WARRANTOR'S PROTECTION
1. NO CLAIM FOR MATTERS DISCLOSED
The Purchaser shall not be entitled to claim against the Warrantor under
the Warranties or the Deed of Indemnity in respect of:
(a) any matters disclosed in this Agreement or fairly in the Disclosure
Letter or the Disclosure Documents; or
(b) any matter or thing after the date of this Agreement done or omitted
to be done by the Company and/or the Subsidiaries provided that such
action and/or omission was at the request of or with the prior
approval of the Purchaser.
2. TIME LIMIT ON CLAIMS
No claim shall be brought by the Purchaser for any breach of any of the
provisions of this Agreement or the Deed of Indemnity unless it shall have
delivered to the Warrantor and the Retention Agent a Claim Certificate (as
defined in Schedule 8) specifying in reasonable detail the nature of the
breach and so far as reasonably practicable the amount claimed and in any
event such Claim Certificate shall be given by not later than 31 December
1998 (or, in the case of claims pursuant to Clause 5.1 of the Agreement,
the date which is three months after the Completion Date) and the amount
claimed (to the extent that it is reasonably possible to do so) shall have
to be finally notified prior to such date.
3. MINIMUM CLAIM
The Warrantor shall only be liable in respect of any claim brought by the
Purchaser for breach of any provisions of this Agreement or the Deed of
Indemnity:
(a) if the amount of the claim exceeds (pound)10,000; and
115
(b) if the amount of the claim when aggregated with the amount of all
claims against the Warrantor under this Agreement and under the Deed
of Indemnity exceeds (pound)200,000.
4. MAXIMUM CLAIM
4.1 The aggregate liability of the Warrantor in respect of claims brought by
the Purchaser for breaches of any provision of this Agreement or the Deed
of Indemnity shall not exceed:
(a) in respect of claims the subject of a Claims Certificate delivered to
the Warrantor and the Retention Agent prior to the First Payment Date
(as defined in Schedule 8) a maximum sum of (pound)3,000,000 ; and
(b) in respect of claims the subject of a Claims Certificate delivered to
the Warrantor and the Retention Agent prior to 1 January 1999, a
maximum sum of (pound)1,500,000 less the amount (if any) for which
payment has been made to the Purchaser in respect of the liability of
the Warrantor for claims referred to in paragraph (a) above exceeds
(pound)1,500,000.
In either case including all legal, accountancy and other costs, fees and
expenses incurred by the Purchaser and/or the Company in seeking to enforce
their respective rights in respect of such breaches and together in each
case, with interest earned in the Account.
4.2 The aggregate liability of the Warrantor in respect of claims the subject
of a Claims Certificate for breach of Clause 5.1 shall not exceed the sum
of (pound)500,000, including all legal, accountancy and other costs, fees
and expenses (as referred to in paragraph 4.1 above) and together with
interest earned on the relevant amount in the Account. For the avoidance
of doubt, this paragraph 4.2 is without prejudice to paragraph 4.1. Any
claim to which this paragraph 4.2 applies will also form part of the claims
referred to in paragraph 4.1(a) (and so count towards the maximum amount
specified in that paragraph).
116
5. NO DOUBLE CLAIM
The Warrantor shall not be liable for any breach of any Warranty or the
Deed of Indemnity to the extent that the loss occasioned by the breach of
Warranty or the Deed of Indemnity has been recovered in any other way
(including the Warranties or under the Deed of Indemnity).
6. REIMBURSEMENT OF SUMS RECOVERED FROM THIRD PARTIES
The relevant member of the Group or the Purchaser (as the case may be)
shall reimburse the Warrantor an amount equal to any sum paid by the
Warrantor to the Company or the Purchaser in respect of any liability for
breach of the Warranties or under the Deed of Indemnity to the extent that
such liability is subsequently recovered by or paid to the Purchaser or the
Company or the Subsidiaries (as the case may be) by any third party
together with (if paid to the relevant member of the Group) such element of
any interest or repayment supplement in respect thereof but less all
expenses of recovery reasonably incurred by the Purchaser and the relevant
member of the Group.
7. SPECIFIC LIMITATIONS
The Purchaser shall not be entitled to claim for breach of Warranty or
under the Deed of Indemnity to the extent that:
(a) the claim would not have arisen or would have been less but for any
act, omission, transaction or arrangement (or any combination of any
of the same) of the Purchaser or any subsidiary of the Purchaser or
the Company (or any member of the Group) or any member of the
Purchaser's Group or their respective directors or employees after
Completion in any case outside the ordinary course of business
including any change in the accounting policy or practice of the
Company (or any member of the Group) or any member of the Purchaser's
Group effected after Completion;
(b) the claim arises or is increased as a result of the passing of, or any
change in or any change in the interpretations of any law, rule,
regulation or
117
administrative practice of any government, government department or
fiscal body after the date of this Agreement;
(c) the claim arises or is increased as a result of the Purchaser or the
Company not complying with its obligations under paragraph 11 of this
Schedule.
(d) the damage, liability or loss suffered or incurred by the Purchaser or
any member of the Purchaser's Group or the Company or any Subsidiary
has been made good or has been otherwise compensated for without any
cost to the Purchaser or any member of the Purchaser's Group, the
Company or any Subsidiary;
(d) the liability, loss or damage suffered or incurred by the Purchaser
or any member of the Purchaser's Group or the Company (or any member
of the Group) has been used by the Purchaser or the Company or any
Subsidiary or any member of the Purchaser's Group to offset in whole
or in part any past, present or future liability to Tax. For this
purpose, the same shall be treated as having been actually used by the
Purchaser or the Company or the relevant member of the Purchaser's
Group or a Subsidiary when either:
(i) a payment of Tax is made by the Purchaser or the Company (or any
member of the Group) or any other member of the Purchaser's Group
of a lesser amount than would otherwise have been the case; or
(ii) no payment is made which would otherwise have been payable in
either case as a result of any member of the Purchaser's Group or
the Company (or any member of the Group) obtaining a deduction in
respect of such loss or damage so suffered in computing its
profits or gains for Tax purposes or in computing the amount of
any loss incurred in a trade or the amount of any capital loss
where such loss is set against other taxable profits or gains of
the Purchaser or any member of the Purchaser's Group or the
Company (or any member of the Group) in respect of which Tax
would otherwise have been payable.
118
As and when such actual use occurs this paragraph (d) shall operate so as
to require the Purchaser or the relevant member of the Purchaser's Group to
account to the Warrantor for any payment previously made by it to the
extent that such payment would not have been made had such actual use then
occurred.
8. SET OFFS
8.1 The parties agree to set off against any amount payable by the Warrantor in
respect of any claim for breach of the Warranties or the Deed of Indemnity
after taking into account the limitation on the Warrantor's liability
referred to in paragraphs 2 to 7 of this Schedule to the extent of any
amount by which any liability of the Company (or the Group) included in the
Accounts (other than by way only of a note or other disclosure) has been
discharged or satisfied in full below the amount attributed thereto or
included in respect thereof in the Accounts save that this paragraph 8.1
shall not apply to any amounts of unbilled media invoices which are
included in the Accounts.
Any further excess of such amount over the amount of the claim shall be set
off against any further payments due by the Warrantor for breach of the
Warranties or the Deed of Indemnity in chronological order until exhausted.
8.2 The liability of the Warrantor under the Warranties or the Deed of
Indemnity shall be reduced to the extent that specific provision is made in
the Accounts or the Management Accounts for the circumstances giving rise
to such liability.
9. DEEMED REDUCTION OF CONSIDERATION
The amount of any successful claim shall constitute or be deemed to
constitute a reduction in the Consideration.
10. RETENTION OF RECORDS
The Purchaser will procure that the Company and the Subsidiaries will
retain and preserve all books, records, documents and information
(including information recorded or retained in any electronic form) of or
relating to the Company and its
119
business which are or may be relevant in connection with any claim brought
by the Purchaser against the Warrantor for breach of the Warranties or the
Deed of Indemnity for so long as any actual or prospective claims remain
outstanding.
11. OBLIGATIONS OF THE PURCHASER
11.1 If the Purchaser of the Company becomes aware of any fact, matter, event or
circumstance whereby it appears that the Warrantor is or may become liable
to make any payment under any of the Warranties or the Deed of Indemnity,
the Purchaser shall, as soon as is reasonably practicable, inform the
Warrantor in writing specifying in reasonable detail the fact, matter,
event or circumstance giving rise to such liability and giving an estimate
(to the extent that it is reasonably possible to do so) of the amount which
may be claimed against it in respect of such liability.
11.2 The Purchaser shall and shall procure that the Company and any other
relevant member of the Purchaser's Group shall in relation to any loss or
liability which might give rise to a claim for breach of the Warranties
and/or the Deed of Indemnity against the Warrantor take all available steps
to avoid or mitigate such loss or liability.
11.3 If the Company or any of its Subsidiaries is or may be entitled to recover
from some other person (including insurers) any loss or damage which gives
rise to any claim for breach of the Warranties, the Purchaser shall or
shall procure that the Company or the relevant Subsidiary shall take all
reasonable steps to enforce such recovery (keeping the Warrantor reasonably
informed on a timely basis of any action so taken).
11.4 If at any time after the date of the Agreement any claim is made by a third
party or any liability (actual or contingent) comes to the notice of the
Purchaser, the Company or any of its Subsidiaries (a "third party claim")
which causes or which is reasonably likely to cause the Warrantor to be
liable for breach of the Warranties, then without prejudice to paragraph 3
of Schedule 8 the Purchaser shall at the written request of the Warrantor
and subject to the Warrantor providing an indemnity reasonably satisfactory
to the Purchaser in respect of all costs, liabilities, claims and
120
expenses which may be incurred by the Purchaser or the Company as a result
of the same:
(a) take or procure that the Company or any of its Subsidiaries shall take
such action as the Warrantor may reasonably require to avoid, contest,
dispute, resist, appeal, compromise or defend the third party claim
(including, but without limitation, making counter claims and
exercising all rights of set off against third parties); and
(b) if so requested, permit the Warrantor, in the name of and on behalf of
the Purchaser, the Company or any of its Subsidiaries, to have the
conduct of all proceedings relating to the third party claim including
the appointment of solicitors and other professional advisers and the
making of any settlement or compromise of the third party claim; and
(c) render or cause to be rendered to the Warrantor all such assistance as
he may reasonably require (including providing reasonable access to
information and to employees of the Purchaser, the Company or any of
its Subsidiaries) for the purpose of avoiding, contesting, disputing,
resisting, appealing, compromising or defending the third party claim
PROVIDED ALWAYS that:
(1) if the Purchaser shall in writing so require, the Warrantor shall
procure that the Purchaser is promptly sent copies of all written
communications or notified in writing as to the substance of all oral
communications pertaining to the third party claim transmitted by or
on behalf of the Warrantor to the other party to the third party claim
or its agents or professional advisers; and
(2) the Warrantor shall not make any settlement or compromise of the third
party claim which is likely to affect the future liabilities or
business of the Purchaser or the Group without the prior approval of
the Purchaser, such approval not to be unreasonably withheld or
delayed.
121
(3) the third party claim shall not be compromised or settled without the
consent of the Warrantor (such consent not be unreasonably withheld);
and
(4) the Purchaser shall in any event keep the Warrantor informed as to the
steps which are being taken in connection with the third party claim.
11.5 Save as provided in paragraph 6 of this Schedule, if notwithstanding any
other provision of this Schedule, any payment is made by the Warrantor in
or towards the settlement of any claim made for breach of the Warranties or
the Deed of Indemnity and the Purchaser or the Company subsequently
recovers or procures the recovery from a third party (including insurers)
of an amount which is referable to that claim (and the Purchaser undertakes
to procure that all reasonable steps are taken to enforce such recovery)
the Purchaser shall or shall procure that the Company shall forthwith repay
to the Warrantor an amount equal to whichever is the lesser of:
(a) the amount recovered from the third party after deduction of all
expenses of recovery; and
(b) the amount paid by the Warrantor in or towards settlement of the
claim.
11.6 For the purposes of this Schedule, if the approval, consent or agreement of
the Warrantor is required, the Purchaser shall be obliged only to obtain
such approval, consent or agreement of any two of the Directors of
Warrantor.
12. PURCHASER'S KNOWLEDGE
12.1 The Purchaser hereby confirms that it is not aware of any matter or thing
which constitutes a breach of any of the Warranties.
12.2 It is hereby acknowledged by the Warrantor that notwithstanding that the
Purchaser knows about the sale of the freehold property at Xxxxxxxxx Xxxxx,
00 Xxxx Xxxxxx, Xxxxxx X0, the Pre-Sale Dividend and/or the Reorganisation
and Reconstruction of Share Capital and all circumstances leading to such
events, the Purchaser shall be entitled (except in respect of the first
(pound)500,000 of Tax that is payable by the Company in respect of the
sale of the freehold property at Xxxxxxxxx Xxxxx, 00
000
Xxxx Xxxxxx, Xxxxxx X0 and any ACT on the Pre-Sale Dividend) to make a
claim or claims against the Warrantor for breach of Warranty or pursuant to
the Deed of Indemnity should any such claim or claims arise after the date
hereof which directly or indirectly relate or relates to the sale of the
freehold property at Xxxxxxxxx Xxxxx, 00 Xxxx Xxxxxx, Xxxxxx X0, the
Pre-Sale Dividend and/or the Reorganisation and Reconstruction of Share
Capital.
123
SCHEDULE 8
TERMS RELATING TO RETENTION
1. The Retention shall be retained by the Retention Agent in a deposit account
with National Westminster Bank PLC in the City of London (the "ACCOUNT")
and shall only be released in accordance with the provisions set out in
this Schedule 8 or otherwise as jointly instructed by the parties.
2. Subject as provided below, the Retention Agent shall procure that:
(a) (pound)1,500,000 of the monies standing to the credit of the Account
(the "FIRST PAYMENT") together with any interest earned thereon shall
be paid to the Warrantor's Solicitors on 1 July 1998 (the "FIRST
PAYMENT DATE"); and
(b) the balance of the monies standing to the credit of the Account
including any interest earned thereon shall be paid to the Warrantor's
Solicitors on 2 January 1999 (the "SECOND PAYMENT DATE").
3.1 Subject to the terms and conditions of this Agreement, the Retention shall
be applied to pay to the Purchaser any amounts due to it from the Warrantor
in respect of any breach of the provisions of this Agreement and/or any
claim under the Deed of Indemnity as set out in a Claim Certificate (as
defined below) duly delivered to the Retention Agent and the Warrantor. If
the Purchaser believes that there may be a breach of the provisions of this
Agreement and/or a claim under the Deed of Indemnity, it shall deliver to
the Retention Agent and the Warrantor a certificate (a "Claim Certificate")
to the effect that such a breach and/or such a claim may exist and the
Claim Certificate shall specify the amount of such breach and/or claim and
subject as provided below, the Retention Agent shall, as soon as
practicable (but not earlier than the expiry of twenty-one (21) Business
Days after the delivery to the Retention Agent of such Claim Certificate)
pay out of the Retention to the Purchaser and/or the Company, as the case
may be, an amount equal to the lesser of:
(a) the amount standing to the credit of the Account; and
124
(b) the amount specified in the Claim Certificate together with any
interest earned on that amount.
3.2 Unless within twenty-one (21) Business Days after delivery to the Warrantor
of any Claim Certificate, the Warrantor gives written notice to the
Purchaser and the Retention Agent that it disputes the Purchaser's
contention that there has been a breach of any of the provisions of the
Agreement and/or the Deed of Indemnity or questions the accuracy of, or
matters included in, such Claim Certificate (including, without limitation
the amount of the claim), such Claim Certificate shall constitute full
authority to the Retention Agent to take the action provided for in
paragraph 3.1 above and shall be binding on all parties hereto. If the
Warrantor serves such a notice disputing the Purchaser's contention that
there has been a breach of any of the provisions of the Agreement and/or
the Deed of Indemnity or gives notice questioning the accuracy of, or
matters included in, such Claim Certificate (including, without limitation
the amount of the claim), the Retention Agent shall not make any payment to
the Purchaser pursuant to paragraph 3.1 until:
(a) it receives the written consent of the Warrantor to the payment; or
(b) and then only to the extent that there is a final decision of any
court of competent jurisdiction with respect to the dispute from which
there is no further right of appeal (because of lapse of time or
otherwise) that such payment shall be made to the Purchaser in respect
of the relevant claim.
Following receipt by the Purchaser of the notice from the Warrantor as
above, either the Purchaser or the Warrantor may seek a declaratory
judgement from any court of competent jurisdiction to resolve the
disagreement. The party against whom such declaratory judgement is
actually rendered shall reimburse the other party thereto for the
reasonable expenses incurred by it in the defence, prosecution, or
investigation of such claim.
4. If prior to the First Payment Date, the Purchaser shall deliver a Claim
Certificate or Claim Certificates in accordance with paragraph 3.1 above,
the Retention Agent shall retain in the Account the sum of (pound)1,500,000
(including accrued interest on that (pound)1,500,000) and the aggregate
outstanding amount claimed under all outstanding
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Claim Certificates (taking into account as appropriate any payment,
reduction, withdrawal, settlement or resolution of any claim together with
interest earned on that aggregate outstanding amount) up to the balance of
the monies standing to the credit of the Account The balance of the First
Payment (if any) shall then be payable pursuant to paragraph 2(a) above on
the First Payment Date.
5. If prior to the Second Payment Date, the Purchaser shall deliver a Claim
Certificate or Claim Certificates in accordance with paragraph 3.1 above,
the Retention Agent shall retain in the Account whichever is the lesser of:
(a) the whole of the monies standing to the credit of the Account
(including accrued interest);
(b) the aggregate outstanding amount claimed under all outstanding Claim
Certificates together with interest earned on that aggregate
outstanding amount;
and the balance (if any) shall then be payable to the Warrantor's
Solicitors on the Second Payment Date.
6. If more than the sum of (pound)1,500,000 (excluding any interest) shall be
retained in the Account after the First Payment Date (the "Excess
Amounts"), the Retention Agent shall continue to hold the Excess Amounts in
the Account pending the reduction, withdrawal, settlement or resolution of
any claim or claims in respect of which the Excess Amounts were held. On
any such claim or claims having been settled or resolved and the amount
payable thereunder determined, the Retention Agent shall pay to the
Purchaser and/or the Company (as the case may be) out of the Account an
amount equal to the amount so payable together with interest earned thereon
(in so far as there shall be sufficient standing to the credit of the
Account). At any time that the Excess Amounts standing to the credit of
the Account after the First Payment Date exceeds the remaining amount of
all claim or claims made as aforesaid (taking into account as appropriate
any payment, reduction, withdrawal, settlement or resolution of any claim),
the excess shall be payable to the Warrantor's Solicitors.
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7. If any monies shall be retained in the Account after the Second Payment
Date (including, without limitation, the Excess Amounts and the provision
of paragraph 6 shall cease to apply), the Retention Agent shall continue to
hold such monies in the Account pending the reduction, withdrawal,
settlement or resolution of any claim or claims so made. On any such claim
or claims having been settled or resolved and the amount payable thereunder
determined, the Retention Agent shall pay to the Purchaser and/or the
Company (as the case may be) out of the Account an amount equal to the
amount so payable together with any interest earned thereon (insofar as
there shall be sufficient standing to the credit of the Account). At any
time that the amount standing to the credit of the Account after the Second
Payment Date exceeds the remaining amount of all claims made as aforesaid
(taking into account as appropriate any payment, reduction, withdrawal,
settlement or resolution of any claim) the excess shall be payable to the
Warrantor's Solicitors.
8. Any dispute or difference below the amount of (pound)500,000 which is not
resolved or settled within three months of the date of the Claim
Certificate to the satisfaction of the Warrantor and the Purchaser, shall
be submitted to mediation by CEDR (the Centre for Dispute Resolution) with
seven (7) days of one party giving written notice to the other of such
dispute and of their intention to refer it to mediation by CEDR.
EXECUTED AND DELIVERED
as a DEED for and on behalf of
AK WARRANTY AND INDEMNITY LIMITED
by:
...................
Director
...................
Director/Secretary
EXECUTED AND DELIVERED
as a DEED for and on behalf
of TMP WORLDWIDE INC
by:
...................
Authorised Signatory
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