EXHIBIT 10.29
"THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE US
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED OR SOLD IN THE US OR TO US PERSONS (AS DEFINED IN RULE 902 PROMULGATED
UNDER THE SECURITIES ACT) UNLESS THE SECURITIES ARE REGISTERED UNDER THE
SECURITIES ACT OR AN EXEMPTION FROM THE REQUIREMENTS OF THE SECURITIES ACT IS
AVAILABLE."
Dated 18th July 2000
WARRANTY AND INDEMNITY AGREEMENT
relating to the entire issued share capital
of QD Group Limited
Mr G Quarry (1)
TMP Worldwide Inc (2)
ORCHARD
00 Xxxxxxxxxxx
Xxxxxx
XX0X 0XX
Tel - 000 0000 0000
Fax - 000 0000 0000
email - xxxx@xxxxxxxxxx.xxx
Ref: NMD/260600/T009.163 D4 Final
CONTENTS
CLAUSE HEADING
1. Definitions and Interpretation
2. Warranties and Indemnity
3. Non-Disclosure of Information and Protective Covenants
4. Set-off
5. Announcements and Information
6. General
7. Notices
8. Proper Law
CONTENTS
SCHEDULE HEADING
1. Particulars of the Warrantor
2. Particulars of the Company and the Subsidiaries
3. Warranties
4. Deed of Indemnity
5. Particulars of the Properties
6. Warrantor's Protection
7. Intellectual Property Rights
AGREED FORM DOCUMENTS:
Disclosure Letter
Offer Document
Debtors List
THIS AGREEMENT is made the 18th day of July 2000
BETWEEN:
(1) GARETH DAVID QUARRY of 00 Xxxxxxx Xxxxxx Xxxxxxxxx, Xxxxxx, XX0 0XX
(the "WARRANTOR"); and
(2) TMP WORLDWIDE INC whose principal office is at 0000, Xxxxxxxx, Xxx
Xxxx, XX 00000, XXX (the "PURCHASER").
WHEREAS:
(A) QD Group Limited (the "COMPANY") is a private limited company
incorporated in England on 26 October 1987 under No. 2183248. 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 authorised share
capital of (pound)100,750 divided into 500,000 ordinary shares of
(pound)0.20 each and 750,000 ordinary/founder shares of (pound)0.001
each of which 246,000 ordinary shares and 605,123 original/founder
shares have been issued and are fully paid or credited as fully paid.
(C) In connection with the Offers the Warrantor has agreed to warrant to
the Purchaser in terms of the Warranties and indemnify the Purchaser in
terms of the Deed of Indemnity on the terms and conditions set out in
this Agreement.
NOW IT IS HEREBY AGREED as follows:
1 DEFINITIONS AND INTERPRETATION
1.1 In this Agreement, unless the context otherwise requires:
"ACCOUNTING YEAR" means the period of twelve months from 1st
October in any year to 30 September;
"ACCOUNTS" means the audited consolidated profit and
loss accounts of the Company for the
accounting year ended on the Accounts Date
and the audited consolidated balance sheet
of the Company as at that date together
with all notes, reports and other documents
annexed thereto;
"ACCOUNTS DATE" means 30 September 1999;
"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" shall have the meaning ascribed to such
expression in the Offer Document;
"COMPUTER SYSTEMS" means the computer, data processing and
information technology systems including
all and all software, hardware,
workstations, related components, dedicated
power supplies, printing facilities and
network cabling together with any bureau,
disaster recovery, facilities management or
outsourcing arrangements relating thereto
used by or for the benefit of the Company;
"CONFIDENTIAL INFORMATION" information concerning or relating to the
affairs of the Company or the Subsidiaries
details of which are not in the public
domain and which includes, without
limitation, the Intellectual Property
Rights and any other property of the
Company or the Subsidiaries in the nature
of intellectual property or any other
know-how, trade secrets, technical
processes, customer client and supplier
list, price lists, reports, memoranda,
details of contractual arrangements and any
other matters concerning the business
affairs or finances of the Company or the
Subsidiaries or clients or customers of or
other persons having dealings with the
Company or the Subsidiaries (however
stored);
"CONNECTED PERSON" means spouse and dependant children;
"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 in
the Agreed Form from the Warrantor to the
Purchaser in relation to the Warranties
together with any documents annexed
thereto;
"EXCLUDED SUBSIDIARIES" has the meaning ascribed to such expression
contained in the Offer Document;
"GROUP" means the Company and/or the Subsidiaries
and references to a "Member of the Group"
or a Group Member shall be construed
accordingly;
"INTELLECTUAL PROPERTY means all rights in or arising out of
RIGHTS" patents, trade, service and other marks,
registered designs (and applications for
all of the same), copyrights, rights
affording equivalent legal protection to
copyrights and design rights, topography
rights, moral rights, 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 licences 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, bylaw,
official instruction and any like
legislative or other document, whether of
the United Kingdom or of the other
countries in the world in which members of
the Group are situated, namely, Germany,
Hong Kong and Singapore unless the context
otherwise requires;
"MANAGEMENT ACCOUNTS" means the management accounts produced by
the Company for the period commencing on 1
October 1999 and ending on 31 May 2000;
"OFFERS" means the offers by the Purchaser to the
shareholders of the Company to purchase
their ordinary shares and ordinary/founder
shares, as appropriate, pursuant to the
terms contained in the Offer Document;
"OFFER DOCUMENT" means the document, in the Agreed Form,
containing the terms and conditions of the
Offers including any revision thereof;
"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 of
which are set out in Schedule 5;
"PURCHASER'S GROUP" GROUP" means the Purchaser and any
subsidiary and subsidiary undertaking from
time to time of the Purchaser and any
holding company and parent undertaking from
time to time of the Purchaser and any
subsidiary and subsidiary undertaking from
time to time of any such holding company or
parent undertaking;
"PURCHASER'S SOLICITORS" means Orchard of 00 Xxxxxxxxxxx, Xxxxxx
XX0X 0XX;
"REORGANISATION AND means the demerger of the Excluded
RECONSTRUCTION OF SHARE Subsidiaries from the Group as steps
relating to which are substantially in
accordance with the steps set out in
CAPITAL" the Disclosure Letter;
"SHARES" means the entire issued share capital of
the company comprising 246,000 ordinary
shares of (pound)0.20 each and 605,123
ordinary/founder shares of 0.1p each;
"SEC" means the Securities and Exchange
Commission in the United States of America;
"SECURITIES ACT" means the US Securities Act of 1933;
"THE STOCK EXCHANGE" means the London Stock Exchange Plc;
"SUBSIDIARIES" means the companies the names and
particulars of which are contained in Part
B of Schedule 2; and which are subsidiaries
or subsidiary undertakings of the Company
and "Subsidiary" shall be construed
accordingly;
"SUBSIDIARY", "HOLDING have the meanings respectively assigned to
COMPANY", "SUBSIDIARY them by ss.736 and 258 Companies Xxx 0000;
UNDERTAKINGS" AND "PARENT
UNDERTAKINGS"
"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 and all penalties,
charges, costs and interest relating
thereto, including (but without limitation)
income tax (including income tax required
to be deducted or withheld from or
accounted for in respect of any payment),
corporation tax (including ACT and amounts
assessed under the provisions of Section
419 of the ICTA), capital gains tax, estate
duty, inheritance tax, capital transfer
tax, VAT, landfill tax, excise duties,
customs duties and other import duties,
capital duty, stamp duty reserve tax,
development land tax, national insurance
contributions, insurance premium tax, local
rates and taxes, the council tax, the
National Non-Domestic Rate and all taxes
(other than stamp duty payable by the
Purchaser) on gross or net income profits
or gains, receipts, sales, use, occupation,
franchise, value added personal property,
and any other tax, duty, charge, impost,
withholding contribution or levy of any
nature whatsoever for the time being
charged, assessed, levied or payable and
any penalty charge, fine or interest
payable in connection with any such
taxation other than in connection with
stamp duty payable by the Purchaser;
"TAX AUTHORITY" means any body whatsoever whether of the
United Kingdom or other state (including
the European Union) which is empowered to
collect, assess or administer any Tax;
"TAX LEGISLATION" means any legislation providing for or
imposing any Tax;
"WARRANTOR" and "PURCHASER" shall include their respective personal
representatives, executors, successors and
permitted assigns;
"WARRANTIES" means the representations and warranties
contained in Clause 2 and Schedule 3.
1.2 THE FOLLOWING ABBREVIATIONS ARE USED IN THIS AGREEMENT:
Abbreviation Term
------------ ----
ACT Advance Corporation Tax
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
TMA Taxes Management Xxx 0000
VATA Value Added Tax Xxx 0000
VAT Value Added Tax
VAT Regs the Value Added Tax Regulations 1995 (SI 1995/2518).
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 re-enactment, extension or amendment
increases the Warrantor's liability hereunder.
1.4 Any reference to any act, transaction, omission or event in consequence
of which liability or increased liability to Tax may be incurred or any
refusal or restriction of any deduction, set-off, loss or other relief
may be suffered 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.
1.5 The Schedules form an integral part of this Agreement and references to
"this Agreement" shall be construed accordingly.
1.6 References to Recitals, Clauses and Schedules are, unless otherwise
stated, references to recitals to, clauses of and schedules to this
Agreement.
1.7 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 initialled by or on behalf of them.
1.8 Words in the singular include the plural and vice versa.
1.9 Words importing the masculine gender include the feminine and neuter
and vice versa.
1.10 References to persons include bodies corporate, unincorporated
associations, partnerships or an authority.
1.11 Headings and the use of bold type in this Agreement are for convenience
only and shall not affect the construction or interpretation of this
Agreement.
2 WARRANTIES AND INDEMNITY
2.1 The Warrantor warrants to the Purchaser that at the date of this
Agreement each of the statements set out in Schedule 3 is true and
accurate in all respects and not misleading PROVIDED THAT no liability
under and no rights and obligations in respect of the Warrantor shall
arise unless and until the Offers are declared unconditional in all
respects under the terms of the Offers.
2.2 The Warrantor shall not (in the event of any claim being made against
him in connection with the Warranties or under the Deed of Indemnity)
make any claim against the Company or the Subsidiaries or against any
director, officer or employee of the Company or the Subsidiaries on
whom they have or 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.
2.3 Each of the Warranties shall be construed as a separate and independent
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.
2.4 The Warrantor shall immediately disclose prior to Completion and
disclose as soon as reasonably practicable after Completion to the
Purchaser any matter or thing which may arise or become known to him
after the date of this Agreement which is inconsistent with any of the
Warranties or which might render any of them misleading.
2.5 The Warrantor hereby agrees to indemnify the Purchaser in terms of the
Deed of Indemnity PROVIDED THAT no liability under and no rights and
obligations in respect of the Deed of Indemnity shall arise unless and
until the Offers are declared unconditional in all respects under the
terms of the Offers.
2.6 The Warrantor hereby agrees to pay the Purchaser an amount equal to the
difference between the amount of debtors and accounts receivable as set
out in a list of debtors and accounts receivable as at 30 June 2000, in
the Agreed Form (the "Debtors List") (less (pound)165,000) that the
Company has not received by 31 December 2000 provided that:
2.6.1 the Purchaser shall after Completion use all reasonable
endeavours to procure the recovery by the Company of such
debts and shall not take any action which is or may be
prejudicial to the recovery by the Company of such debts
provided that the Purchaser shall not be obliged to take any
action nor procure the taking of any action which it considers
to be onerous or prejudicial to the Purchaser or the Company
and further provided that if the Purchaser fails to take any
action due to these reasons the Purchaser shall not be
entitled to recover from the Warrantor any such sum which the
Purchaser did not pursue from such third party debtor; and
2.6.2 in the event that the Warrantor is liable to pay the Purchaser
under this Clause 2.6, the rights of the Company in respect of
amounts paid by the Warrantor under this Clause 2.6 shall be
subrogated to the Warrantor, provided that the Warrantor will
not take any action which is onerous or prejudicial to the
Company or the Purchaser and further provided that if the
Warrantor is prevented from taking action due to these reasons
then the Purchaser shall repay any such relevant amounts paid
by the Warrantor to the Purchaser under this Clause 2.6 and
the rights of the Company in respect of such amounts shall be
transferred back to the Purchaser.
2.7 The Purchaser shall be entitled to claim that any of the Warranties is
or was untrue or misleading or had or had been breached even if the
Purchaser could have discovered on or before Completion that the
Warranty in question was untrue or misleading or had been breached and
Completion shall not in any way constitute a waiver of any of the
Purchaser's rights.
2.8 If the Warrantor is required by law to make any deduction or
withholding from any payment under this Clause 2, they shall do so and
the sum due in respect of such payment shall be increased to the extent
necessary to ensure that, after the making of such deduction or
withholding, the Company or, as the case may be, the Purchaser receives
and retains (free of any liability in respect of any such deduction or
withholding) a net sum equal to the sum it would have received and
retained had no deduction or withholding been required to be made
PROVIDED THAT:
2.8.1 the obligation to increase any payment pursuant to this Clause
2.8 shall not apply where the deduction or withholding from
any payment would not have arisen had the Purchaser been
resident in the United Kingdom and received such a payment in
the United Kingdom;
2.8.2 shall not apply where the obligation is to deduct or withhold
in respect ot tax which is a primary liability of the
Purchaser; and
2.8.3 in the event that withholding or deduction does arise and in
consequence an increased payment is made under this Clause 2.8
and the Purchaser receives a credit or relief or remission
for, or repayment of, any tax paid or payable by it in respect
or calculated with reference to the deduction or withholding
giving rise to the increased payment the Purchaser shall (to
the extent that it can do so without prejudice to the
retention of such relief, credit, remission or repayment) pay
to the Warrantor an amount equal to any benefit derived from
such relief, credit, remission or repayment attributable to
such deduction or withholding.
2.9 Schedule 6 shall have effect in respect of the matters to which this
Clause 2 applies to limit the liability of the Warrantor in respect of
the Warranties and, where applicable, the Deed of Indemnity except in
the case of fraud, wilful concealment and/or wilful non-disclosure on
the part of the Warrantor.
3 NON-DISCLOSURE OF INFORMATION AND PROTECTIVE COVENANTS
3.1 The Warrantor shall not and shall procure that no Connected Person of
the Warrantor shall:
3.1.1 disclose any Confidential Information of the Company to any
person or enable any person to become aware of any
Confidential Information relating to the Company; or
3.1.2 make use of any Confidential Information relating to the
Company
except as required by law or by any governmental or revenue authority
or to his professional advisers 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 a breach of this
undertaking.
3.2 The Warrantor shall not and shall, so far as is reasonably practicable,
procure that no Connected Person of the Warrantor shall:
3.2.1 disclose any non-public Confidential Information concerning
the Purchaser or the Purchaser's Group to any person or enable
any person to become aware of any non-public information
relating to the Purchaser or the Purchaser's Group except as
expressly provided by this Agreement; or
3.2.2 make use of any non-public Confidential Information relating
to the Purchaser's Group, including, without limitation,
purchasing or selling the Common Stock of the Purchaser when
prohibited from doing so under US Federal Securities Law.
3.3 For the purpose of assuring to the Purchaser the full benefit of the
goodwill of the business of the Company, the Warrantor hereby
undertakes to and covenant with the Purchaser that he will not:
3.3.1 for a period of 2 years from the date of termination of the
Warrantor's employment with the Purchaser's Group for whatever
reason (the "Relevant Date") carry on or be engaged or
concerned or interested in:
(a) the United Kingdom, in the business of advertised and
database selection in the sectors of legal (private
practice and in house, both permanent and temporary),
marketing (permanent and temporary), technology
(permanent) and finance (permanent) or the business
of executive search in the sectors of in house legal,
marketing, finance or technology or the business of
outplacement and career counselling;
(b) Hong Kong, in the business of advertised and database
selection in the sectors of legal (private practice
and in house) and technology or the business of
executive search in the technology sector; and
(c) each of Singapore, Ontario and Germany in the
business of advertised and database selection in the
legal sector (private practice and in house)
(together the "Restricted Business"); or
3.3.2 for a period of 2 years from the Relevant Date approach, act
for, canvass, solicit for or accept orders from, or deal with,
or entice away from the Company in respect of services similar
to the Restricted Business any person who or which has at any
time within the period of 12 months prior to the Relevant Date
been a customer of the Company or any prospective client to
whom the Warrantor had made a formal presentation at any time
during the 12 months preceding the Relevant Date and during
such period he shall not use his knowledge of or influence
over any such customer to or the benefit of any other person
carrying on business in competition with the Restricted
Business or otherwise use his knowledge of or influence over
any such customer to the detriment of the Company or any other
member of the Group; or
3.3.3 for a period of 2 years from the Relevant Date induce or
attempt to induce any supplier of the Company at the Relevant
Date (or at any time within the 12 months prior to the
Relevant Date) to cease to supply, or to restrict or vary the
terms of supply, to the Company provided that the Warrantor
shall not be in breach of this provision by virtue of his
majority interest in and holding of office as a director of
the Excluded Subsidiaries if, in the ordinary course of
business of an Excluded Subsidiary, the terms of supply to the
Excluded Subsidiary are varied in such a way as to affect the
terms of supply to the Company or its Subsidiaries; or
3.3.4 for a period of 2 years from the Relevant Date solicit the
services of or entice away any person who at the Relevant Date
or at any time during the period of 12 months prior to the
Relevant Date is or has been in the employment of the Company
with a view to the specific knowledge or skills of such person
being used by or for the benefit of any person carrying on
business in competition with the Restricted Business; or
3.3.5 at any time after Completion use as all or part of his or its
name or as a trade or service xxxx or part thereof or as the
get-up for trading in goods or services, the words "Quarry
Dougall" or "QD" or any colourable imitation thereof (in each
case whether or not such words are separated by other words)
save that, subject to complying with the other provisions of
this Clause 3.3, this Clause 3.3.5 shall not prevent the
Warrantor from using his own name in respect of a business
which is not a Restricted Business; or
3.3.6 at any time after Completion do or say anything which is
likely or intended to damage the goodwill or reputation of the
Company or which may lead any person to cease to do business
with the Company or substantially equivalent terms to those
previously offered or lead any person not to engage in
business with the Company.
3.4 The restrictions set out in Clause 3.3 shall apply whether the relevant
activities are carried on directly or indirectly by the Warrantor or
whether the Warrantor is interested or concerned either solely or
jointly with or as employee, secondee, manager, adviser, consultant,
partner or agent for any other person or as a shareholder or director
of a
company (but disregarding for this purpose any interest of a person in
securities which are listed on The Stock Exchange or traded on the
Alternative Investment Market of The Stock Exchange where such interest
is in securities which, in all circumstances, carry 3% or less of the
voting rights (if any) attaching to the issued securities of that
class).
3.5 The restrictions set out in Clause 3.3 are considered by the parties to
be no more extensive than is reasonable to protect the Purchaser as the
purchaser of the Shares in the Company. Each of such restrictions shall
be enforceable by the Purchaser independently of each of the others and
its enforceability shall not be affected by any invalidity of any of
the others. If any such restriction shall be found to be void which
would be valid if some part thereof were deleted or the period or area
of application thereof were reduced, such restriction shall apply with
such modifications as may be necessary to make it valid or effective.
The Purchaser may by notice to the Warrantor at any time reduce in
whole or in part the scope of such restrictions to such extent as the
Purchaser shall in its absolute discretion determine and thereupon such
restrictions shall apply as modified by such notice.
4 SET-OFF
In addition to any rights of set-off or similar rights in law, if any
sum or sums become due or owing after Completion by or to the Warrantor
to or from the Purchaser under this Agreement such sum or sums may be
set off against any sum or sums becoming due or owing by or to the
Purchaser to or from the Warrantor (as the case may be) by way of
consideration or otherwise under the terms of this Agreement provided
that no right of set off under this Clause 4 shall arise until the due
date for payment of such sum or sums has passed and the relevant party
is thereby in default and for the purposes of any sums payable in
respect of a Claim under the Warranties or Deed of Indemnity, the due
date for payment shall be as set out in any judgment or order of the
Court or settlement agreement in respect of a Claim or 14 days after
such full admission of liability by the Warrantor.
5 ANNOUNCEMENTS AND INFORMATION
Except as required by law, the SEC or the Nasdaq National Market of
America by the terms of this Agreement, or as disclosed in the Offer
Document, the Warrantor shall not disclose the terms of this Agreement
and all announcements and circulars by or on behalf of the Warrantor
relating to the Offers shall be in terms to be agreed between the
parties save that the Warrantor shall not require the Purchaser's
agreement for any announcements to third parties including
presentations and internal memoranda relating to the terms of the Offer
or which repeat the terms of any press announcement made by the
Purchaser or any internal memoranda produced by the Purchaser.
6 GENERAL
6.1 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.
6.2 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. The Purchaser may assign the benefit
of all or any part of this Agreement to any member of the Purchaser's
Group or to any successor in title to the Shares and any such company
or other person may enforce such benefit as if it had been named in
this Agreement as the Purchaser.
6.3 This Agreement shall not be varied except in writing signed by the
parties or their respective duly authorised officers.
6.4 No delay, indulgence, 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 or release
of any breach of any provision of this Agreement shall take effect
unless in writing and such waiver or release shall not 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.
6.5 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 .
6.6 This Agreement and the other documents referred to herein constitute
the entire agreement between the parties relating to the transactions
contemplated by this Agreement and supersede and extinguish all
previous agreements, arrangements and undertakings between the parties
in respect of the subject matter hereof. Each of the parties
acknowledges that in entering into this Agreement it has not relied on
any representation, warranty or undertaking save as set out in this
Agreement and the other documents referred to herein. This
acknowledgement shall not apply to any misrepresentations and/or
breaches of Warranty which constitute fraud or wilful non disclosure or
concealment.
6.7 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.
6.8 The Purchaser shall bear its own and (subject to law) the Company shall
bear those of the Warrantor's 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.
7 NOTICES
7.1 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 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 7.
7.2 Any notice given pursuant to Clause 7.1 shall be deemed to have been
served:
7.2.1 if delivered by hand, on the first Business Day following
delivery;
7.2.2 if sent by facsimile transmission, on the first Business Day
following transmission;
7.2.3 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 dispatch, otherwise on the
seventh Business Day after posting.
7.3 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.
7.4 The Purchaser appoints the Purchaser's Solicitors as its process agent
to receive on its behalf service of process in any proceedings in
England. Service upon the process agent shall be good service upon the
Purchaser whether or not it is forwarded to and received by the
Purchaser. If for any reason the process agent ceases to be able to act
as process agent, or no longer has an address in England, the Purchaser
irrevocably agrees to appoint a substitute process agent with an
address in England and to deliver to the Warrantor a copy of the
substitute process agents' acceptance of that appointment within 10
business days. In the event that the Purchaser fails to appoint a
substitute process agent, it shall be effective service for the
Warrantor to serve the process upon the last known address in England
of the last known process agent for the Purchaser notified to the
Warrantor, notwithstanding that such process agent is no longer found
at such address or has ceased to act.
8 PROPER LAW
8.1 This Agreement shall be governed by and interpreted in accordance with
the laws of England.
8.2 The parties hereby submit to the jurisdiction of the High Court of
Justice in London.
IN WITNESS whereof the parties or their duly authorised representatives have
executed this Agreement as a Deed the day and year first above written.
SCHEDULE 1
PARTICULARS OF THE WARRANTOR
(1) (2) (3)
NAME ADDRESS NO. OF SHARES HELD
---------------------------- ------------------------------ ------------------------------------
GARETH DAVID 00 Xxxxxxx Xxxxxx 562,500 ordinary/ founder
QUARRY Northside,London SW4 shares
0AA Options over 25,000 ordinary
shares
---------------------------- ------------------------------ ------------------------------------
SCHEDULE 2
PARTICULARS OF THE COMPANY AND THE SUBSIDIARIES
PART A
DETAILS OF THE COMPANY
Name: QD Group Limited
Registered Number: 2183248
Date of Incorporation: 26 October 1987
Country of Incorporation: England and Wales
Registered Office: 00-00 Xxxxxxx Xxx, Xxxxxx, XX0X 0XX
Authorised share capital: (i) (pound)100,000
(ii) (pound)750
Description: (i) 500,000 Ordinary Shares of (pound)0.20 each
(ii) 750,000 Ordinary/ Founder Shares of
(pound)0.001 each
Issued share capital: (i) (pound)49,200
(ii) (pound)605.12
Description: (i) 246,000 Ordinary Shares of (pound)0.20 each
(ii) 605,123 Ordinary/Founder Shares of
(pound)0.001 each
Registered Shareholders: 20p ordinary 0.1p ordinary/
founder
G D Quarry
562,500
X X Xxxxxxx 12,000
P L J Xxxxxxx 12,000
X X Xxxxxxxxxx 9,000
A M Austin 22,000
A D Xxxxxx 2,100
W D N Xxxxxxx 1,000
X X More 2,000
X X Xxxxxxxx 2,000
X X Xxxxx 10,000
N J Xxxxxxx 40
C M Quarry & B A H Quarry 4,000 7,000
X X Xxxxxxxxxx 4,000 11,000
A P Quarry 1
X X Xxx 1
X X Xxxxxx 2,000
X X Xxxxxx 7,800 1,403
X X Xxxxxx 6,500 3,000
M E Quarry 3,099 3,000
X X Xxx 6,999 1,025
X X Xxxxxxxxxx 2,000 4,000
W R J Cock 2,500
X X Xxxxxxx 5,000
A Xxxxxx 2,000
ESOT 127,552
X X Xxxxxxx 1,000 2,195
X X Xxxxxxxx 3,000
X X Xxxxxxx 2,000
A Xxxxx 220
X X Xxxx 250
X X Xxxxxx 1
X X Xxxxxx 2,999
X X Xxxxxx 250
D E Grain 50
X X Xxxx 200
J I Flowers 50
M Lacey 88
S Weight 50
T Xxxxxxxx 000
X Xxxxx 50
Total
246,000 605,123
Directors - full names and Xxxxxxx Xxxxxxxx of Wychwood, 86 Kimpton
usual residential address: Road, Xxxxxxxxx Xxx, Xxxxxxxxxxxxx,
Xxxxxxxxxxxxx, XX0 0XX
Gareth Quarry of 00 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxx, XX0 0XX
Secretary - full name and usual Xxxxxx Quarry of 00 Xxxxxxxx Xxxx, Xxxxxxx,
residential address: Xxxxxxxxxxxx, XX00 0XX
Auditors: Xxxxxx Xxxxxxxx of 00 Xxx Xxxxxx, Xxxxxx,
XX0X 0XX
Bankers: Lloyds TSB Bank plc
Outstanding Charges: None
PART B
DETAILS OF THE SUBSIDIARIES
QUARRY DOUGALL RECRUITMENT LIMITED
Name: Quarry Dougall Recruitment Limited
Registered Number: 2212489
Date of Incorporation: 21 January 1988
Country of Incorporation: England and Wales
Registered Office: 00-00 Xxxxxxx Xxx, Xxxxxx, XX0X 0XX
Authorised share capital: (pound)1,000
Description: 1,000 Ordinary Shares of(pound)1 each
Issued share capital: (pound)2
Description: 2 Ordinary Shares of(pound)1 each
Registered shareholders: QD Group Limited 1
QD Group Limited & GD Quarry 1
Directors - full names and Xxxxxxx Xxxx of 17A Xxxxxxx Walk,
usual residential address: Xxxxxx, Xxxxxx, XX00 0XX Xxxx
Xxxxxx of 00 Xxxxxxxx Xxxx,
Xxxxxxx Xxxx, Xxxxxx X00 0XX
Gareth Quarry of 00 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxx, XX0 0XX
Secretary - full name and usual Xxxxxx Quarry of 00 Xxxxxxxx Xxxx,
residential address: Xxxxxxx, Xxxxxxxxxxxx, XX00 0XX
Auditors: Xxxxxx Xxxxxxxx of 00 Xxx Xxxxxx,
Xxxxxx, XX0X 0XX
Bankers: Lloyds TSB Bank plc
Outstanding Charges: None
QD CONSULTING GROUP LIMITED
Name: QD Consulting Group Limited
Registered Number: 2212597
Date of Incorporation: 25 February 1988
Country of Incorporation: England and Wales
Registered Office: 00-00 Xxxxxxx Xxx, Xxxxxx, XX0X 0XX
Authorised share capital: (pound)1,000
Description: 1,000 Ordinary Shares of(pound)1 each
Issued share capital: (pound)2
Description: 2 Ordinary Shares of (pound)1 each
Registered shareholders: GD Quarry and QD Group Limited 1
QD Group Limited 1
Directors - full names and usual Xxxxxxx Xxxxx of 00 Xxxx Xxxxxx,
residential address: Xxxxxxxxx, Xxxx, XX0 0XX
Xxxxxx Xxxxxx of Acorn Cottage,
Xxxxxxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxxx, Xxxx, XX00 0XX
Gareth Quarry of 00 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxx, XX0 0XX
Xxxxxxxx Xxxxx of 00 Xxx Xxxxx,
Xxxxxxx, Xxxxxxxxxxxxx, XX0 0XX
Xxxxxxx Xxxxxxx of 00 Xxxxxxxxxx
Xxxx, Xxxxxx, XX00 0XX
Xxxx Xxxxxxxxxx of 00 Xxxxxxx
Xxxxxx Xxxxxxxxx, Xxxxxx, XX0 0XX
Secretary - full name and usual Xxxxxx Quarry of 00 Xxxxxxxx Xxxx,
residential address: Xxxxxxx, Xxxxxxxxxxxx, XX00 0XX
Auditors: Xxxxxx Xxxxxxxx of 00 Xxx Xxxxxx,
Xxxxxx, XX0X 0XX
Bankers: Lloyds TSB Bank plc
Outstanding Charges: None
QD ASIA LIMITED
Name: QD Asia Limited
Registered Number: 626008
Date of Incorporation:
Country of Incorporation: Hong Kong
Registered Office: 3D World Trust Tower, 00 Xxxxxxx
Xxxxxx, Xxxxxxx, Xxxx Xxxx
Authorised share capital: HK$1,000
Description: Ordinary shares of HK$10 each
Number of Shares: 100
Issued share capital: HK$1,000
Description: Ordinary Shares of HK$10 each
Number of Shares: 100
Registered shareholders: QD Group Limited - 99
Gareth Quarry - 1
Registered Office: Xxxxxx Xxxxxxx of 0X Xx 0 Xxxx
Xxxx Xxxxxxx, Xxxxxx Xxxx, Xxxx
Xxxx
Xxxxxx Xxxx Xxxxxx of Xxxxx
Xxxxxxx, Xxxxxxxxx Xxxx,
Xxxxxxxxxx, Xxxx XX00 0XX
Gareth David Quarry of 00 Xxxxxxx
Xxxxxx Xxxxxxxxx, Xxxxxx, XX0 0XX
Xxxx Xxxxxxxxxx of 00 Xxxxxxx
Xxxxxx Xxxxxxxxx, Xxxxxx, XX0 0XX
Secretary - full name and usual Xxxxxx Xxxxxxx of 3A No 6 Tung
residential address: Shen Terrace, Xxxxxx Road, Hong
Kong
Auditors: Xxxxxx Xxxxxxxx of 00xx Xxxxx,
Xxxxxxxxx Xxxxx, Xxx Xxxxxxxx, 00
Xxxxx'x Xxxx Xxxxxxx, Xxxx Xxxx
Bankers: HSBC
Outstanding Charges: None
QD CONSULTING GmbH
Name: QD Consulting GmbH
Registered Number: HRB 46191
Date of Incorporation: 27 November 1998
Country of Incorporation: Germany
Registered Seat: Frankfurt am Main
Authorised share capital: DM 50,000
Description: Registered Stated Capital
Number of Shares: one
Shareholders: QD Group Limited
Directors - full names and usual Xxxx Xxxxxxx
residential address: 8 Xxxxxx Mansions, Xxxxxx Xxxx
Xxxxxxx, Xxxxxx X00 0XX
Gareth Quarry of 00 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxx, XX0 0XX
Xxxxxx Xxxxxx of Acorn Cottage,
Xxxxxxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxxx, Xxxx, XX00 0XX
Bankers: Deutsche Bank
Outstanding Charges: None
QD TECHNOLOGY LIMITED
Name: QD Technology Limited
Registered Number: 3407638
Date of Incorporation: 23 July 1997
Country of Incorporation: England and Wales
Registered Office: Xxxxx Xxxxx, 00-00 Xxxxxxx Xxx,
Xxxxxx, XX0X 0XX
Authorised share capital: (pound)1,000
Description: 10,000 Ordinary Shares of(pound)0.10
each
Issued share capital: (pound)1,000
Description: 10,000 Ordinary shares of (pound)0.10
each
Registered shareholders: QD Group Limited 9,000
Xxxxx Xxxxx 1,000
Directors - full names and usual Xxxxxx Xxxxxx of Acorn Cottage,
residential address: Xxxxxxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxxx, Xxxx XX00 0XX
Gareth Quarry of 00 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxx, XX0 0XX
Xxxx Xxxxxxxxxx of 00 Xxxxxxx
Xxxxxx Xxxxxxxxx, Xxxxxx, XX0 0XX
Xxxx Xxxxx of 00 Xxxxxx Xxxxx,
Xxxxxxxx Xxxxx, Xxxx Xxxxxx, XX00
0XX
Secretary - full name and usual Xxxxxx Quarry of 00 Xxxxxxxx Xxxx,
residential address: Xxxxxxx, Xxxxxxxxxxxx, XX00 0XX
Auditors: Xxxxxx Xxxxxxxx of 00 Xxx Xxxxxx,
Xxxxxx, XX0X 0XX
Bankers: Lloyds TSB Bank plc
Outstanding Charges: Debenture dated 9 November 1998
and registered 11 November 1998 in
favour of QD Group Limited
QUARRY DOUGALL RECRUITMENT NORTH LIMITED
Name: Quarry Dougall Recruitment North
Limited
Registered Number: 2321926
Date of Incorporation: 25 November 1988
Country of Incorporation: England and Wales
Registered Office: 00-00 Xxxxxxx Xxx, Xxxxxx, XX0X 0XX
Authorised share capital: (pound)1,000
Description: 1,000 Ordinary Shares of(pound)1 each
Issued share capital: (pound)1,000
Description: 1,000 Ordinary Shares of(pound)1 each
Registered shareholders: QD Group Limited 1
GD Quarry and QD Group Limited 1
Quarry Dougall Recruitment Limited
998
Directors - full names and usual Gareth Quarry of 00 Xxxxxxx Xxxxxx
residential address: Xxxxxxxxx, Xxxxxx, XX0 0XX
Xxxxxx Xxxxxx of 00 Xxxxxxxx
Xxxxx, Xxxx, Xxxxx, XX0 0XX
Secretary - full name and usual Xxxxxx Quarry of 00 Xxxxxxxx Xxxx,
residential address: Xxxxxxx, Xxxxxxxxxxxx, XX00 0XX
Auditors: Xxxxxx Xxxxxxxx of 00 Xxx Xxxxxx,
Xxxxxx, XX0X 0XX
Bankers: Lloyds TSB Bank plc
Outstanding Charges: None
SCHEDULE 3
WARRANTIES
1 INTERPRETATION
1.1 In addition to Clause 1 of this Agreement, the following shall apply in
relation to the interpretation of this Schedule:
1.1.1 Where any of the statements made in this Schedule are given to
"best of the Warrantor's knowledge, information and belief" or
"so far as the Warrantor is aware" or qualified by a similar
expression or the Warrantor has given a Warranty that he has
"no reason to believe" that any particular circumstance will
obtain or has obtained, the Warrantor undertakes to the
Purchaser that they have made all due and careful enquiries in
relation to the subject matter of such Warranty for the
purposes of this Agreement; and
1.1.2 References in this Schedule to analogous legislation, body or
systems shall mean such legislation body or systems operating
or in existence in the United Kingdom, Germany, Hong Kong and
Singapore.
2 THE COMPANY
MEMORANDUM AND ARTICLES OF ASSOCIATION, STATUTORY BOOKS AND RETURNS
2.1 The copies of the Memorandum and Articles of Association of the Company
which have been given to the Purchaser's Solicitors are accurate and
complete in all respects.
2.2 The Register of Members and other statutory books and registers of the
Company have been properly kept in all material respects and contain a
true accurate and complete record of all the matters which should be
dealt with therein and no notice or allegation that any of the same is
incorrect or should be rectified has been received.
2.3 All 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 have been
properly and correctly made up and duly filed or delivered by or on
behalf of the Company and compliance has been and is being made by the
Company with the Companies Acts.
2.4 The Company is validly existing, and carries on its business in
accordance with its Memorandum and Articles of Association.
THE SHARES AND SHARE CAPITAL
2.5 The Shares constitute the entire issued share capital of the Company.
2.6 So far as the Warrantor is aware, no person has any right to call for
the transfer or issue to him of any shares, debentures or other
securities in the Company (including the Shares).
2.7 There are no options or other agreements under which the Company may be
required to issue any shares or which may affect the Shares and there
are no negotiations which may
lead to such an agreement and no claim has been made by any person to
be entitled to any of the foregoing.
2.8 The Company has not at any time repaid, redeemed, purchased, cancelled
or reduced its issued share capital or any class thereof or agreed to
do so.
2.9 Neither the Warrantor nor Connected Person with the Warrantor has any
interest directly or indirectly in any business other than that now
carried on by the Company which is or is likely to be or become
competitive with the business of the Company.
2.10 There is no litigation, arbitration, prosecution, administrative or
other legal proceedings or dispute in existence or threatened against
the Warrantor in respect of the Warrantor's Shares or the Warrantor's
entitlement to dispose of the Warrantor's Shares and there are no facts
known to the Warrantor which might give rise to any such proceedings or
any such dispute.
2.11 None of the Company's assets have been subject to a transaction at an
undervalue within the meaning of Part IX or Part VI Insolvency Xxx
0000.
2.12 The Company has not exercised nor purported to exercise or claim any
lien over the Shares and no call on the Shares is outstanding and all
the Shares are fully paid up.
2.13 The Company has not at any time given any financial assistance in
connection with the purchase of shares as would fall within the
provisions of ss.151 to 157 of the Companies Xxx 0000.
SUBSIDIARIES, SUBSIDIARY UNDERTAKINGS, ASSOCIATIONS AND BRANCHES
The Company:
2.14 is not the holder or beneficial owner of nor has it 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
the Subsidiaries;
2.15 has not been the subsidiary of any other company; and
2.16 has not had and does not now have any branch or permanent establishment
outside the United Kingdom.
NAME
2.17 The Company does not use on its letterheads or books (or otherwise
carry on its business under) any name other than its full corporate
name.
NO VIOLATION
2.18 The execution, delivery and performance by the Warrantor of this
Agreement and of the Deed of Indemnity and any other documents in the
Agreed Form do not and will not:
2.18.1 conflict with, result in breach, modification, termination or
violation of, or loss of any benefit under, constitute a
default under, accelerate the performance required by, result
in or give rise to a right to amend or modify the terms of,
result in the creation of any lien upon any assets or
properties, result in the acquisition of any
option or in any manner release any party thereto from any
obligation under, any mortgage, note, bond, contract,
agreement, lease, licence or other instrument or obligation of
any kind or nature by which the Company, or any of its
properties or assets, may be bound or affected; or
2.18.2 conflict with, violate or result in any loss of benefit under,
any order, judgement, writ or injunction.
3 ACCOUNTS AND FINANCIAL POSITION
GENERAL
3.1 The Accounts (copies of which have been delivered to the Purchaser):
3.1.1 have been prepared under the historical cost convention and in
accordance with generally accepted accounting principles and
practices in the United Kingdom including all Statements of
Standard Accounting Practice, Financial Reporting Standards
and all other technical releases applicable at the time they
were audited and commonly adopted by companies carrying on
businesses similar to those carried on by the respective
members of the Group;
3.1.2 show a true and fair view of the affairs, assets and
liabilities of the Company as at the Accounts Date and of its
results for the accounting reference period ended on that
date;
3.1.3 comply with the requirements of the Companies Acts and all
other statutes;
3.1.4 are 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") and, since the
Accounts Date, have continued to be adopted by the Company
without alteration;
3.1.5 save as the Accounts expressly disclose, are not affected by
any unusual or non-recurring items.
PROVISION FOR LIABILITIES ETC. IN ACCOUNTS
3.2 The Accounts disclose all the assets and either make proper provision
or, as appropriate, reserve for, or as appropriate disclose, all
accruals and liabilities (including actual, unqualified, contingent and
disputed liabilities) and all capital commitments (including actual and
contingent capital commitments) of the Company as at the Accounts Date,
and indicate clearly which of those liabilities are not usually
provided for or reserved, and make proper provision or reserve for all
bad and doubtful debts.
VALUATION OF WORK IN PROGRESS
3.3 In the Accounts the work in progress is calculated in accordance with
SSAP9, and the value attributed to the work in progress does not exceed
the lower of cost or net realisable value at the Accounts Date. In the
Accounts work in progress includes all costs incurred at the Accounts
Date in respect of sales invoiced after the Accounts Date less any
provision for irrecoverable amounts.
RATE OF DEPRECIATION
3.4 The rate of depreciation adopted in the Accounts is sufficient for the
value of each of the fixed assets of the Company to be written down to
nil by the end of its useful working life and the rate of depreciation
is calculated in accordance with SSAP12.
PROFITS
3.5 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) or circumstance or by any
other factor other than in the ordinary course of the Company's
business rendering them unusually high or low.
TITLE TO ASSETS
3.6 The assets included in the Accounts and all other assets used or
employed by the Company are the absolute property of the Company free
from any mortgage, pledge, charge, xxxx, xxxx of sale or other form of
security or encumbrance and are not 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 such
assets required to carry on the business of the Company are owned by
and are in the possession or under the control of the Company.
ASSETS
3.7 No asset (whether fixed, intangible, investment or current) has been
revalued upwards in the Accounts and no intangible asset has been
brought into the Accounts.
CONTROL OF RECORDS ETC.
3.8 All accounting records belonging to the Company (whether or not held in
written form) are in its exclusive possession, under its direct control
and subject to unrestricted access by it.
PROVISION FOR CORPORATION TAX
3.9 Proper provision has been made for deferred Tax in the Accounts and the
value of none of the assets is overstated in the Accounts.
ACQUISITION AT ARM'S LENGTH
3.10 The Company has not at any time acquired any asset on terms which were
not by way of bargain at arm's length.
REALISATION OF WORK IN PROGRESS
3.11 The work in progress of the Company:
3.11.1 is at its normal level of the time of year having regard to
current orders included in the current contracts with
customers of the Company and to orders reasonably anticipated
from customers of the Company.
3.11.2 will, if invoiced within three months from the date of the
Agreement, realise in total at least the amount at which it is
included in its books.
REALISATION OF BOOK DEBTS
3.12 The book debts shown in the Accounts have realised or will realise
within a period of 60 days from the Accounts Date their full nominal
amount less any reserve for bad or doubtful debts included in the
Accounts.
3.13 All book debts shown in the Accounts have arisen in bona fide arm's
length transactions in the ordinary course of business, in accordance
with the Company's normal terms of trade and are valid and binding
obligations without any counter claims, set offs or other defences and
the Warrantor has no knowledge of any reason why such book debts would
not be collectable in the ordinary course. The Company has not
pre-billed or recovered payment from any of its customers or clients
for advertisements to be placed or for services to be rendered or
expenses to be incurred subsequent to the date of this Agreement.
3.14 The Company is not owed any sums other than trade debts incurred in the
ordinary course of business.
BORROWINGS AND CHARGES
3.15 Except as disclosed in the Accounts the Company does not have
outstanding:
3.15.1 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;
3.15.2 any guarantee, indemnity or undertaking (whether or not
legally binding) to procure the solvency of any person or any
similar obligation;
3.15.3 any mortgage, charge, lien, pledge or any obligation
(including a conditional obligation) to create a mortgage,
charge, lien, or pledge; or
3.15.4 any other indebtedness, other than that arising in the
ordinary course of its business.
STATE OF CURRENT BORROWINGS
3.16 The Company has not 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 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.
LOANS TO DIRECTORS ETC.
3.17 There is not outstanding:
3.17.1 any loan made by the Company to, or debt owing to the Company
by, the Warrantor or any director of the Company or any person
connected with any of them;
3.17.2 any agreement or arrangement to which the Company is a party
and in which the Warrantor or any director of the Company or
any Connected Person of any of them is interested.
FACTORING
3.18 The Company has not factored any of its debts or engaged in financing
of the type which would not require to be shown or reflected in the
Accounts.
REPORTS
3.19 Other than the Accounts and any previous statutory accounts, there have
been no reports commissioned by the Company concerning the Company or
the Group by accountants or financial or management consultants within
3 years prior to the date hereof.
TRADE CREDITORS
3.20 The Company's trade creditors have been paid in accordance with such
creditor's normal terms of trade for the period of twelve months ending
on Completion.
MANAGEMENT ACCOUNTS
3.21 The Management Accounts were properly prepared in accordance with the
accounting policies applied to the Accounts and are not misleading in
any material respect.
EVENTS SINCE THE ACCOUNTS DATE
3.22 Since the Accounts Date the business of the Company has been carried on
in the ordinary and usual course and so as to maintain the same as a
going concern.
3.23 Without prejudice to the generality of paragraph 3.22, since the
Accounts Date:
3.23.1 apart from the dividends provided for in the Accounts no
dividend or other distribution (as set out in s.20, ss.209 to
211 ICTA (inclusive), ss.234 and 254 ITCA) or deemed
distribution (as set out in s.418 ICTA) has been declared,
paid or made by the Company;
3.23.2 the business of the Company has not been materially and
adversely affected by the loss of any important customer
accounting for more than 5 per cent of the Company's annual
turnover or by any abnormal factor not affecting similar
businesses to a similar extent and the Warrantor is not aware
of any facts likely to give rise to any such effect whether
before or after Completion;
3.23.3 the Company has not acquired or disposed of or agreed to
acquire or dispose of any business or any material asset or
assumed or acquired or agreed to assume or acquire any
material liabilities (including a contingent liability)
otherwise than in the ordinary course of business;
3.23.4 no debtor has been released by the Company on terms that he
pays less than the book value of any debt (subject to
settlement discounts on the usual terms which have been
disclosed to the Purchaser) and no debt has been written off,
deferred, or subordinated or has proved to be irrecoverable to
any extent and all book debts at the date hereof are good and
will be recoverable in full on their respective due dates in
the ordinary course;
3.23.5 the Company has paid its creditors (other than trade
creditors) in accordance with their respective credit terms
and there are no amounts owing by the Company which have been
due for more than 12 weeks;
3.23.6 all payments, receipts and invoices of the Company have been
accurately recorded in the books of the Company;
3.23.7 there has not been any capitalisation of reserves of the
Company and the Company has not issued or agreed to issue any
share or loan capital other than that issued at the Accounts
Date and has not granted or agreed to grant any option in
respect of any share or loan capital and neither the Company
has repaid any loan capital in whole or in part nor has it by
reason of any default by it in its obligations become bound or
liable to be called upon to repay prematurely and loan capital
or borrowed monies;
3.23.8 there has been no resolution of or agreement by the members of
the Company or any class thereof (except as provided in this
Agreement or with the prior written consent of the Purchaser)
and in particular save in respect of the Reorganisation and
Reconstruction of Share Capital there has been no capital
reorganisation or other change in the capital structure of the
Company.
4 TAX
GENERAL
4.1 All liabilities, whether actual, deferred, contingent or disputed, of
the Company for Tax measured by reference to actual or deemed taxable
profits (including, without limitation, both income, chargeable gains
and any liability which may have arisen under s.48 TCGA or ss.20 and
234 ICTA) arising or deemed to have arisen as a result of any act or
omission (whether by the Company, the Warrantor, the directors of the
Company or otherwise) on or before the Accounts Date, and for any other
taxes, duties or other fiscal impositions of any kind whatsoever
(including any interest on any such amounts and any penalties or
charges imposed in relation to such amounts) whether arising under any
law of the United Kingdom or any part thereof or any law of any other
jurisdiction and whether incurred as principal, agent or trustee, are
properly provided for or (as appropriate) disclosed in the Accounts,
whether or not the said Tax or other liabilities are primarily payable
by the Company and whether or not the Company has or may have any right
of reimbursement against any other person including but without
prejudice to the generality of the foregoing:
4.1.1 Tax on or in respect of or by reference to profits,
distributions or gains (including income and chargeable gains
and any liability which may have arisen under s.48 TCGA or
ss.20 ICTA) of the Company made or deemed to have been made on
or before the Accounts Date (other than any amount of
corporation tax wholly
attributable to an increase in the rate of corporation tax
above the rate provided in the Accounts);
4.1.2 VAT, PAYE and National Insurance Contributions;
4.1.3 income tax or ACT (as the case may be) in respect of dividends
or other distributions or deemed distributions paid or made or
to be treated as paid or made on or before the Accounts Date;
4.1.4 deferred corporation tax in respect of any overseas income
which could not be remitted to the United Kingdom; and
4.1.5 income tax deductible or payable under the provisions of
ss.348 to 350 ICTA.
EVENTS SINCE THE ACCOUNTS DATE
4.2 Since the Accounts Date:
4.2.1 the Company has not been involved in any transaction which has
given or may give rise to a liability to Tax on the Company
(or would have given or might give rise to such a liability
but for the availability of any relief, allowance, deduction
or credit) other than corporation tax on normal trading income
of the Company (and not chargeable gains or deemed income)
arising from transactions entered into in the ordinary course
of business;
4.2.2 no payments have been made by the Company which will not be
deductible for corporation tax purposes, either in computing
the profits of the Company or in computing the corporation tax
chargeable on the Company.
4.2.3 the Company has not at any time incurred any expenditure to
which s.577A ICTA applied or could apply; and
4.2.4 the Company is under no obligation to make any payment of any
annuity or other annual payment such as may be disallowed as a
deduction or charge on income or by way of set off or
otherwise be unrelieved by virtue of s.125 ICTA.
PAYMENT OF TAX
4.3 The Company has, or will have prior to Completion, promptly paid all
Tax which it has become liable to pay and has in the last 6 years not
been nor is liable to pay any interest or penalties on any disputed Tax
liability or late payment. The Company is not aware of any assessment
which any Tax Authority could make or should have made on the Company
whether or not such an authority has sufficient information to make
such an assessment.
WITHHOLDING TAX
4.4 All payments by the Company to any person which should have been made
under deductions of Tax have been so made and the Company has accounted
to the relevant Tax Authority for all Tax so deducted. In particular
the Company 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. 119, 134, 349, 524, 536 and 777 ICTA and under the
tax deduction scheme contained in Chapter IV of Part XIII ICTA as the
same applies to certain sub-contractors in the building industry.
DISTRIBUTIONS
4.5 The Company has not at any time repaid or agreed to repay or redeemed
or agreed to redeem or purchased or agreed to purchase any shares, of
any class, of its issued share capital.
4.6 Save as disclosed in the audited accounts of the Company for the last
three financial years, save in respect of the Reorganisation and
Reconstruction of Share Capital, the Company has not at any time
capitalised or agreed to capitalise in the form of shares or debentures
any profits or reserves of any class or description or passed or agreed
to pass any resolution to do so.
4.7 No securities (within the meaning of s.254(1) ICTA) issued by the
Company and remaining in issue at the date hereof were issued in
circumstances such that the interest payable thereon falls to be
treated as a distribution under s.209(2)(d)(da) or (e) ICTA.
4.8 All rents, interest or annual payments paid during, or in respect of,
the three years ending on the Accounts Date or payable by the Company
or which the Company is under an obligation to pay in the future are
wholly allowable as deductions or charges in computing profits for the
purposes of corporation tax.
4.9 Save as disclosed in the audited accounts of the Company for the last
three financial years, no claim has been made by the Company under
s.242 ICTA.
4.10 The Company has not made or received any distribution which is an
exempt distribution within ss.213 to 218 ICTA.
4.11 The Company has not received any capital distribution to which the
provisions of s.189 TCGA could apply.
4.12 The Company has not issued any shares to which the provisions of ss.249
to 251 and 254 ICTA could apply nor does the Company own any such
shares.
4.13 All dividends paid prior to the abolition of ACT were if paid without
accounting for ACT and interest paid without deduction of Tax have been
the subject of an election under s.247 Taxes Act.
4.14 The Company has not received and it is not entitled to receive any
foreign income dividend.
CAPITAL ALLOWANCES
4.15 No first year allowance under the provisions of CAA in respect of
expenditure incurred by the Company prior to the date hereof has been
given in circumstances where such allowance has been or is likely to be
recovered under the provisions of s.47 CAA.
4.16 All capital expenditure on which allowances are to be claimed has been
properly notified by the Company to the Inland Revenue within the
period of two years set out in s.118 FA 1994.
CAPITAL GAINS
4.17 If each of the capital assets of the Company were disposed of for a
consideration equal to the book value of that asset (together with the
indexation thereon from the date of acquisition) in or adopted for the
purpose of the Accounts, no liability to corporation tax on chargeable
profit or gain would arise (and for this purpose there shall be
disregarded any reliefs and allowances available to the Company other
than amounts falling to be deducted from the consideration receivable
under s.38 TCGA).
4.18 The Company has not made any claim under ss.23, 24, 152, 153, 161, 000,
000, 000, 000, 000 XXXX nor has it made any gifts to any transferee
within s.166 or s.167 TCGA nor has any claim under those sections been
made by any other company so as to affect the base cost of any of the
Company's assets for the purpose of calculating chargeable gains.
4.19 The Company has not made a capital loss to which the provisions of
s.18(3) TCGA apply.
4.20 No debt owing to the Company will give rise to a chargeable gain or
chargeable event on being settled or disposed of.
4.21 The Company has not acquired any rights under a policy of assurance or
contract for a deferred annuity other than as the original beneficial
owner.
4.22 The Company has made no claim under ss.24, 48 or 280 TCGA.
4.23 No claim has been made by the Company under s.35(5) TCGA nor is the
Company subject to such a claim by reason of para 7, Schedule 3, TCGA.
4.24 The Company has no capital losses which are being carried forward which
are or might be affected by ss. 177A and Schedule 7A TCGA.
4.25 The Company has not at any time acquired any asset for a consideration
in excess of its market value at the date of such acquisition or
disposed of any asset for a consideration less than its market value at
the date of such disposal.
4.26 No liability to Tax would arise on the disposal by the Company of any
asset acquired since the Accounts Date for a consideration equal to the
consideration actually given for the acquisition.
4.27 All material information in relation to any transaction falling within
the terms of ss.135, 136 or 139 TCGA to which the Company was a party
including copies of any prior clearance received from the Inland
Revenue have been disclosed in writing to the Purchaser.
4.28 The Company has not at any time:-
4.28.1 done anything to which ss.29, 30, 31, 32, 33, 34 or 17 TCGA
could apply;
4.28.2 disposed of any assets such that ss.280 TCGA applied to the
whole or part of the consideration;
4.28.3 received any capital distributions in respect of shares held
by it within the provisions of s.122 TCGA where the gain has
been rolled over to a subsequent disposal of the shares on a
direction having been made under s.122(2) TCGA; or
4.28.4 owned assets which are subject to the provisions of paragraphs
11, 14 or 16 Schedule 2 TCGA.
4.29 The Company has not since the Accounts Date received any asset by way
of gift as is mentioned in s.282 TCGA.
4.30 No claim has been made or is entitled to be made by any other company
in respect of any asset under the provisions of ss.152 to 157 TCGA
inclusive.
CLOSE COMPANIES
4.31 No apportionment has been made in respect of the Company for any
accounting period ending on or before the Accounts Date.
4.32 The Company has not made (and will not be deemed to have made) any loan
or advance to a participator or an associate of a participator so as to
become liable to make any payment under the provisions of ss.419 and
420 ICTA.
4.33 The Company is not liable to be assessed to corporation tax on
chargeable gains or to capital transfer tax or inheritance tax as donor
or donee of any gift or transfer, gratuitous or otherwise.
4.34 The Company has not been a party to associated operations in relation
to a transfer of value within the meaning of s.268 IHTA.
4.35 No asset owned by the Company is liable to be subject to any sale,
mortgage or charge by virtue of ss.212 or 237 IHTA.
4.36 The Company is not and has not at any time been a close
investment-holding company as defined in s.13A ICTA.
4.37 In any period during which the Company has been a close company, the
Company has not incurred any expenses within the terms of s.418 ICTA
for participators in the Company.
GROUP PROVISIONS
4.38 The Company has not made any intergroup transfers of assets in
circumstances such that the Company could be regarded as realising a
chargeable gain on the appropriation of the asset to or from trading
stock under s.173 TCGA.
GROUP AND CONSORTIUM RELIEF
4.39 There are no arrangements or agreements relating to group relief or
consortium relief to which the Company is or, in the last 6 years, has
been party pursuant to which the Company has surrendered or claimed or
agreed to surrender or claim any amount by way of group relief or
consortium relief pursuant to ss.402 to 413 ICTA and the Company has
not at any time received or agreed to receive any payment or refund or
made or agreed to make any payment for group relief or surplus advance
corporation tax.
GROUP INCOME
4.40 The Company, in the last 6 years, has not made any election to apply
the provisions of s.247 ICTA. The Company, in the last 6 years, has not
paid any dividend without accounting for ACT or made any payment
without deduction of income tax in the circumstances specified in
s.247(6) and (7) ICTA.
ACT AND LOSSES
4.41 There are no arrangements or agreements relating to the surrender of
ACT under s.240 ICTA. The Company has not paid nor is it liable to pay
for the benefit of any ACT which is or may become incapable of set off
against the Company's liability to corporation tax and the Company has
received all payments due to it under any such arrangement or agreement
for all surrenders of ACT made by it.
4.42 Within the period of 3 years ending on the date of this Agreement there
has been no major change in the ownership, nature, conduct or scale of
the trade or business carried on by the Company within the meaning of
ss.245, 768 or s.767A ICTA
4.43 The Company has done nothing which might cause the disallowance of any
carry forward or carry back of losses, excess charges, non trading
deficits arising from loan relationships (including such part of any
deficit attributable to non trading foreign exchange gains and losses
and non trading profits and losses on interest rate and currency
contracts) or ACT which would otherwise have been available to the
Company under respectively the provisions of ss.393 and 239(4) ICTA and
Schedule 8 to the FA 1996.
INTRAGROUP DISPOSALS
4.44 The Company has not at any time within the period of 6 years ending
with the date hereof acquired any asset (other than trading stock) from
any company which at the time of the acquisition was a member of the
same group (as defined in s.170 TCGA).
4.45 No Tax has been assessed or is liable to be assessed on the Company
pursuant to s.190 TCGA in respect of any chargeable gain accrued prior
to the date hereof. The Company has not 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).
SALE AND LEASEBACK OF LAND
4.46 The Company has not entered into any transaction to which the
provisions of ss.34 to 37, 779, 780, 781 or 782 ICTA have been or could
be applied.
OVERSEAS INTERESTS
4.47 The Company is resident in the UK for all purposes of Tax, has not at
any time been resident in any territory outside the UK for the purposes
of any Tax, nor has it ever carried on any trade business or other
activities or been entitled to any source of income outside the UK save
from its non-resident subsidiaries.
4.48 The Company has not ceased nor deemed to cease to be resident in the
United Kingdom for the purposes of Tax
TAX IN RELATION TO EMPLOYEES
4.49 The Company 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 the Company and any employee of any other person and
accounted to the Inland Revenue for all Taxes so deducted and all Tax
chargeable on benefits provided for employees of the Company.
4.50 The Company is not liable to account for any payments under the Pay As
You Earn System imposed on it pursuant to ss.203B, 203C, 203D and/or
203E ICTA.
4.51 The Company has not entered into any contract for services with any
individual whom the Inland Revenue has indicated should be, or there
are reasons to suggest that it will treat as, an employee rather than a
self-employed person.
4.52 The Company has not paid or agreed to pay any remuneration (including
bonuses) or other emoluments to any director or other officer or any
employee other than such as was or will be allowable as a deduction in
computing the profits of the Company for the purposes of corporation
tax.
4.53 Since the Accounts Date, the Company has not provided any benefit for
any director or employee or former director or former employee of the
Company which is not allowable as a deduction in computing the profits
of the Company for the purposes of corporation tax.
4.54 The Company has paid all National Insurance Contributions for which it
is liable and has maintained proper books and records relating thereto.
4.55 The Company has not issued any shares in the circumstances described in
ss. 77 and 78 FA 1988.
4.56 No options have been granted to which s.203F ICTA can apply in relation
to the Company.
4.57 There are no shares obtained by reason of employment of any person to
which s.140A to 140F ICTA can apply in relation to the Company.
TAX AVOIDANCE
4.58 The Company has not been involved in any preordained series of
transactions in which there were inserted steps which had no business
purpose other than the mitigation or avoidance of Tax.
4.59 The Company has not, without prejudice to the generality of paragraph
4.60 above been a party to or otherwise involved in any transaction
scheme or arrangement to which any of the following provisions could
apply:
ICTA ss.37, 56, 87, 114 to 116, 219, 240, 395, 398, 399, 410 and 703
to 787; or.
CAA ss.40, 42, 75
4.60 The Company has not at any time been a party to or otherwise involved
in a transaction or series of transactions in relation to which there
was a material risk that the Company could be liable to Tax under the
provisions of Part XVII ICTA or as a result of the principles in
Xxxxxxx v Xxxxxx 55TC 324 as developed in subsequent cases.
STAMP DUTY, CAPITAL DUTY AND STAMP DUTY RESERVE TAX
4.61 All documents in the possession or under the control of the Company or
to the production of which the Company is entitled and which are
necessary to establish the title of the Company to any asset and which
in the United Kingdom or elsewhere attract either stamp duty or require
to be stamped with a particular stamp denoting that no duty is
chargeable or that the document has been produced to the appropriate
authority have been properly stamped and no such documents which are
outside the United Kingdom would attract stamp duty if they were
brought into the United Kingdom.
4.62 All liabilities to Stamp Duty Reserve Tax have been settled and
correctly accounted for to the Inland Revenue.
VAT
4.63 No act or transaction has been effected in consequence whereof the
Company is or may be liable for any VAT chargeable against some other
company other than a member of the Group.
4.64 The Company has made all necessary returns and payments and complied
with all statutory provisions, rules, regulations, orders and
directions concerning VAT and Customs and Excise duties; in particular
the Company has made and obtained full, complete, correct and up to
date records and invoices and other documents appropriate or required
for the purposes of such legislation including without prejudice to the
generality of the foregoing in relation to acquisitions made from and
supplies made to persons outside the United Kingdom and is not in
arrears with any payments or returns thereunder or liable to any
abnormal or non-routine payment or default surcharge or any forfeiture
or penalty or to the operation of any penal provision and has not been
required by the Commissioners of Customs and Excise to give security
under paragraph 4 of Schedule 11 VATA and the Company is a registered
and taxable person for the purposes of such legislation and details of
the VAT group are given in the Disclosure Letter.
4.65 The Company is not at the date hereof liable to repay any VAT refunded
to it.
4.66 The Company is not nor has it been at any time within the previous six
years partially exempt for VAT purposes and there are no circumstances
whereby Regulation 107 of the VAT Regs might apply (has since the
Accounts Date applied) to the Company.
4.67 The Disclosure Letter contains full particulars of all elections to
waive exemption made or agreed to be made under Schedule 10 VATA by:
4.67.1 the Company; or
4.67.2 any person
in relation to which the Company is a relevant associate as defined in
paragraph 3(7) of that Schedule in respect of the property in respect
of which the election has been made.
4.68 No notice has been received by the Company and the Company is not aware
of anything which indicates that the grant to the Company of any
interest in or right over land or of any licence to occupy land will
not be an exempt supply by virtue of any election to waive exemption
made under Schedule 10 paragraph 2 VATA.
4.69 There are no past or present circumstances whereby the Company is or
could become liable to VAT under paragraph 1 or 5 of Schedule 10 VATA
or under the Value Added Tax (Self-supply of Construction Services)
Order 1989.
4.70 The Disclosure Letter contains full particulars of each capital item
(if any) within the meaning of Part XV of the VAT Regs in relation to
which a liability under Part XV of the VAT Regs has arisen or could in
future arise on the Company.
4.71 No tenancy, lease or licence to occupy any property held by the Company
is or will become a developmental tenancy, developmental lease or
developmental licence within the meaning of paragraph (b) of Item 1 of
Group 1 (Land) Schedule 9 VATA.
4.72 The Company is not operating any special arrangement or scheme relating
to VAT.
4.73 All supplies made by the Company have been taxable supplies and the
provisions of s.26 VATA will not apply to deny credit for any input
tax.
4.74 The Company is not 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, or pursuant to the
Value Added Tax (Self-Supply of Construction Services) Order 1989.
4.75 The Company has not received a penalty liability notice in respect of
any return pursuant to s.64 VATA.
4.76 The Company, has not 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.
4.77 The Company has not 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.
4.78 The Company has given details of all of its assets to which the capital
goods scheme applies, the use to which such assets have been placed and
the history of each such assets for VAT adjustment purposes.
LOAN RELATIONSHIPS, FOREIGN EXCHANGE AND INTEREST RATE AND CURRENCY CONTRACTS
4.79 No liability to Tax or non trading deficit would arise from the loan
relationships to which the Company is a party being repaid to the
extent of the amounts shown in respect of such loan relationships in
the books of the Company at the date of this Agreement
4.80 The Company operates an authorised accounting method in relation to its
loan relationships being an authorised accruals basis of accounting and
has operated the same authorised accounting method consistently in each
of its accounting periods ended or which will end after 1st April 1996.
4.81 All borrowings by or advances by the Company reflected in the Accounts
constitute loan relationships of the Company and are not relationships
to which ss.92, 93, 94, 95 or 96 of FA 1996 apply.
4.82 No interest or other amounts treated as a credit or claimed as a debit
by the Company (including imputed interest under ss.770 to 773 ICTA
remains unpaid and no such debits, save where they relate to unpaid
interest, are prevented from being deducted in computing the taxable
profits of the Company for whatever reason, including, without
limitation because a relationship is for an unallowable purpose as
defined in paragraph 13 of Schedule 9 to the FA 1996.
4.83 No loan relationship of the Company constitutes a relevant discounted
security as defined in paragraph 3 of Schedule 13 to FA 1996.
4.84 The Company does not hold any qualifying assets nor is it a party to
any currency contract for the purposes of Chapter II of Part II of FA
1993 not is it a party to a qualifying contract for the purposes of
Chapter II of Part IV of FA 1994 and it is not liable to any Tax in
respect of such assets nor entitled to any non trading loss arising
from such ownership.
MISCELLANEOUS TAX
4.85 There has been no major change in the business of the Company within
the meaning of s.245, 245A and 245B ICTA.
4.86 The Company has not 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, Enterprise Investment Scheme or similar schemes or
Business Start-Up Schemes.
4.87 All relevant and required computations and returns in respect of Tax
have been properly and correctly made up and duly filed and delivered
by or on behalf of the Company within the prescribed time limits.
4.88 All the aforesaid computations and returns leave no material matter
unresolved with any Tax Authority regarding the Tax affairs of the
Company and neither the Company nor any director or officer of the
Company (in his capacity as such) is under no liability nor is likely
to become liable to pay any penalty interest surcharge nor so far as
the Warrantor is aware fine in connection with Tax. None of the
aforesaid computations or, so far as the Warrantor is aware, returns is
or is likely to be the subject of a dispute with any Tax Authority.
4.89 There are no liabilities or potential liabilities to Tax the date for
payment whereof has been postponed under s.55 TMA.
4.90 The Company is not liable to be assessed to Tax out of time on the
grounds of fraudulent or negligent conduct within the meaning of s.36
of the TMA.
4.91 All the computations and returns referred to in Clauses 4.106 and 4.107
above have been expressed in sterling and the Company has not made an
election under s.93(1)(b) FA 1993.
4.92 All claims and disclaimers which have been assumed to have been made
for the purposes of the Accounts have duly been submitted by the
Company within the requisite periods and have been accepted as valid by
the relevant Tax Authority.
4.93 The Company has in its possession and under its control, all records
and documentation that it is obliged to hold, preserve and retain under
any Tax Statute and further the Company has sufficient records and/or
information to calculate its future liability or relief from Tax
arising upon the disposal of any asset owned by the Company at the date
of this Agreement or which has been disposed of since the Accounts
Date.
4.94 No investment grants or other grants received by virtue of any statute
are liable to be repaid by the Company.
4.95 There are no non-routine outstanding or ongoing enquiries from any Tax
Authority against or in respect of the Company.
4.96 The Company has not during the period beginning six years before the
date hereof discontinued a trade in circumstances such that its closing
trading stock and work in progress fall to be valued at open market
value as provided for in s.100(1)(b) or s.101(1)(b) ICTA.
4.97 No act or transaction will have been effected prior to Completion in
consequence of which the Company is or may be held liable for any Tax
primarily chargeable against or attributable to any person other than
the Company.
4.98 The Company has not at any time been a member of any partnership,
European Economic Interest Grouping (as defined in s.510A ICTA), or
other unincorporated association.
5 PROPERTIES
TITLE
5.1 The Properties comprise all the land and buildings owned, used or
occupied by the Company or in which it has an interest. In relation to
any property no longer vested in the Company, the Company has not
received and does not anticipate receiving any notices served or to be
served pursuant to the Landlord and Tenant (Covenants) Xxx 0000 or any
schedules of dilapidations nor has the Company entered into any
authorised guarantee agreements.
5.2 The Company is the legal and beneficial owner of all the Properties and
is able to transfer the Properties with full title guarantee.
5.3 The Company has in its possession or under its control all deeds and
documents necessary to show title to the Properties all of which have
been properly stamped.
5.4 Where the Properties are leasehold, each lease is valid and in force
and no notice has been served on the Company pursuant to s.146 of the
Law of Property Xxx 0000 and no notice to quit has been served or is
anticipated.
OCCUPATION AND USE
5.5 The Company is entitled to vacant possession of, and is in occupation
of, the Properties.
5.6 The Company has not left the Properties vacant or unoccupied for any
material length of time.
5.7 The Company has not received notice of breach of any planning
legislation and also, in the case of the Properties which are
leasehold, the current use is permitted by the relevant lease.
ENCUMBRANCES
5.8 The Properties are not 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
Company or any other person.
5.9 The Properties are not subject to any outgoings other than general and
water rates and (in the case of Properties which are leasehold) rent,
service charges, insurance premiums and VAT where applicable.
5.10 The Properties are not subject to any overriding interest, or other
right or interest vested in a third party.
5.11 The Properties are not subject to any option, right of pre-emption or
right of first refusal.
5.12 The Properties are not subject to any agreement for sale or agreement
for lease.
PLANNING MATTERS
5.13 The Company has complied with the terms of all planning permissions,
building regulation consents and other necessary consents, licences and
approvals and no provisions remain to be fulfilled.
STATUTORY AND OTHER OBLIGATIONS
5.14 So far as the Warrantor is aware, the Company has observed and complied
in all material respects with all 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.
5.15 The Properties have a current fire certificate.
ACCESS AND SERVICES
5.16 The Properties abut or have all necessary legal rights for full and
free unobstructed pedestrian access.
5.17 The Properties enjoy the mains services of water, drainage, electricity
and gas.
LEASEHOLD PROPERTIES
5.18 In respect of each of the leases and underleases under which the
Properties are held by the Company:
5.18.1 the Company has paid the rent, insurance and service charges
and observed and performed all the covenants on the part of
the tenant and the conditions contained therein;
5.18.2 VAT is payable on the rent;
5.18.3 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;
5.18.4 there are no rent reviews currently in progress;
5.18.5 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;
5.18.6 there are no outstanding notices or applications received or
given by the Company; and
5.18.7 there are no outstanding or pending disputes in relation to
all such leases or with any third party or authority in
relation to the Properties.
5.19 Accurate copies of all leases relating to the Properties have been
supplied to the Purchaser or the Purchaser's Solicitors and in respect
of such leases full particulars of the following have been disclosed in
the Disclosure Letter:
5.19.1 the current rent;
5.19.2 any election by the Landlord to waive exemption from value
added tax;
5.19.3 the length of the term; and
5.19.4 any agreement excluding ss.24 to 28 Landlord and Tenant Xxx
0000;
TENANCIES
5.20 There are no tenancies at the Properties.
ENQUIRIES
5.21 All information, representations and answers to enquiries given by the
Warrantor's Solicitors 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 in relation to Properties
situated in London and so for as the Warrantor is aware true and
accurate and complete in all material respects in relation to
Properties situated outside London.
6 ASSETS
6.1 So far as the Warrantor is aware, all agreements, obligations,
restrictions, covenants, conditions, statutes and regulations binding
on the Company in relation to any asset held by the Company have been
observed and performed.
6.2 So far as the Warrantor is aware, there are no contracts for the
purchase or taking or hiring of assets or services by the Company at
prices above the market prices ruling at the date hereof or for the
sale or giving or hiring out of assets or services by the Company at
prices below the market prices ruling at the date hereof.
6.3 There are no maintenance contracts in respect of any of the assets of
the Company.
6.4 Save for disposals in the ordinary and proper course of trade, the
Company has not 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.
7 MATERIAL CONTRACTS AND LIABILITIES
7.1 The Company has no liabilities (actual or contingent) other than the
liabilities disclosed in the Accounts or which have arisen in the
ordinary course of business since the Accounts Date, and the Company is
not party to any contract or arrangement which:
7.1.1 is long-term (that is, unlikely to have been fully performed
in accordance with its terms more than 3 months after the date
on which it was entered into or undertaken), unusual or
onerous or not made in the ordinary course of business; or
7.1.2 is incapable of termination in accordance with its terms by
the Company on sixty days' notice or less; or
7.1.3 is of a loss-making nature (that is, known to be likely to
result in a loss to the Company on completion of performance);
or
7.1.4 cannot readily be fulfilled or performed by the Company on
time without undue or unusual or material expenditure of
money, effort or personnel; or
7.1.5 involves payment by the Company by reference to fluctuations
in the index of retail prices or any other index or in the
rate of exchange for any currency; or
7.1.6 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 the Company.
7.2 The Company has not created or agreed to create and is not party to and
has no subsisting or contingent liability under:
7.2.1 any hire, hire-purchase, leasing or credit sale contract or
any sale or purchase option or similar agreement under which
it has agreed to buy or sell on deferred terms or by
instalments or subject to conditions which are not the
Company's standard form conditions of purchase or sale (copies
of which are annexed to the Disclosure Letter) and which
affect any of the assets of the Company; or
7.2.2 any agency, marketing, purchasing, or licensing agreement or
arrangement; or
7.2.3 any agreement or arrangement which is capable of being
terminated as a direct result of the change of control of
management or shareholders of the Company effected by or
pursuant to this Agreement; or
7.2.4 any contract which is not on an arm's length basis; or
7.2.5 any agreement or arrangement between the Company and any other
Company which is a member of the Group.
7.3 No power of attorney has been granted by the Company which may be
effective or in force at any time after the date hereof.
7.4 The Company is not nor will it, solely as a result of the lapse of time
in consequence of circumstances existing at the date hereof, become in
material default under, and has not committed any material breach of
any terms of, any agreement, instrument, arrangement or covenant to
which it is a party, or in respect of any other obligations or
restrictions binding upon it which cannot be remedied by the Company
within the terms of such agreement, instrument, covenant or arrangement
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 the Company
7.5 No party to any agreement with, or under an obligation to, the Company
is in default thereunder, and there are no circumstances likely to give
rise to such a default.
7.6 None of the Company's material customers have threatened to cancel or
terminate its relationship with any member of the Group or threatened
to reduce its business with the Company. The Company has not received
any notice that any customer intends to cancel or otherwise modify its
relationship with the Company on account of this Agreement and the
Warrantor is not aware of any errors or omissions which are of such a
serious nature that any relationship with any customer may be
jeopardised.
7.7 The Warrantor has no reason to believe that any customer or supplier of
the Company or other person dealing with it will refuse to continue to
deal with it or will deal with it on a smaller scale than at present as
a result of the change of control of the Company to be effected
pursuant to this Agreement.
8 COMPUTER SYSTEMS
8.1 There are set out in the Disclosure Letter details of all agreements
and arrangements relating to the Computer Systems (and true and
complete copies or details of which have been supplied to the
Purchaser) and all 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 of accepted to
their terms, the obligations of all parties thereto have been complied
with in all material respects and no disputes exists or are anticipated
in respect of them.
8.2 The Computer Systems have the benefit of the maintenance agreements
specified in the Disclosure Letter.
8.3 The Disclosure Letter sets out details of the Company's disaster
recovery plans .
8.4 In the event that any person providing maintenance or support services
for the Computer Systems ceases or is unable to do so, the Group has
all necessary rights to obtain the source code and all related
technical and other information to procure the carrying out of such
services by the Company's own employees or by a third party.
8.5 The Disclosure Letter sets out the Company's procedures to ensure
internal and external security of the Computer Systems including
procedures for taking and storing, on-site and off-site, back-up copies
of computer programs and data.
8.6 None of the Group's records, systems, controls, data or information are
recorded, stored, maintained, operated or otherwise wholly or partly
dependent upon or held by any means (including any electronic
mechanical or photographic processes whether computerised or not) which
(including all means of access thereto and therefrom) are not under the
exclusive ownership and direct control of the Group.
9 COMPLIANCE WITH APPLICABLE LEGISLATION
9.1 The Company's records (other than accounting records), systems,
controls, data or information recorded, stored, maintained, operated or
otherwise dependent upon or held by any means (including any
electronicprocess whether computerised or not), including all means of
access thereto and therefrom, are under the exclusive ownership and
direct control of the Company and there has been no breach of any
service or maintenance contract relevant to any such electronic
equipment whereby any person or body providing services or maintenance
thereunder may have the right to terminate such service or maintenance
contract.
9.2 The Company has made the appropriate registration or registrations
under the Data Protection Xxx 0000 and 1998 in respect of all personal
data (as defined in the Data Protection Xxx 0000 and 1998) held by it
or under its operation or control and has complied with in all material
respects all the provisions of the Data Protection Act 1984 and 1998
for the time being in force; and in particular, but without prejudice
to the generality of the foregoing, the Company has observed the Data
Protection Principles set out in the First Schedule to the Data
Protection Xxx 0000.
9.3 The Company and all of its directors, officers or agents (during the
course of their duties in relation to the Company) have fully complied
with all applicable legislation (including statutory instruments,
bye-laws, local and central government orders, notices and decisions)
of the United Kingdom and, so far as the Warrantor is aware, any
applicable foreign country and without prejudice to the generality of
the foregoing the Company has complied with in all material respects
all the provisions of the Companies Acts for the time being in force.
9.4 So far as the Warrantor is aware, there are not in existence any
investigations or enquiries by or on behalf of any governmental body in
respect of the affairs of the Company.
9.5 All statutory licences, consents, permits and authorisations necessary
for the carrying on of the business of the Company as now carried on
and as proposed to be carried on have been obtained (full details of
which are set out in the Disclosure Letter) and are valid and
subsisting and all conditions applicable to any such licence, consent ,
permit or authorisation have been complied within all material respects
and, so far as the Warrantor is aware, none of such licences, consents,
permits or authorisations has been breached or is likely to be
suspended, cancelled, refused, revoked, modified or rendered subject to
conditions not applicable at the date of this Agreement.
9.6 So far as the Warrantor is aware, there are no circumstances likely to
give rise to breach of any terms of any licences, concessions and
agreements which indicate that any of such
licences, consents, permits and authorisations may not be renewed in
the ordinary course of events.
10 EMPLOYEES
10.1 Directors and Employees
10.1.1 The Warrantor has supplied the Purchaser with full and
accurate particulars of all of the Company's employees (which
expression in this paragraph 10 shall include directors) and
of the material terms of their employment or engagement
(whether or not the same are reduced to writing) including
particulars of all remuneration, fees, incentive, bonuses,
profit sharing arrangements, share option schemes and expenses
and any other benefits payable to each employee.
10.1.2 There are not in existence any service agreements or other
contracts with any employees of the Company which cannot be
terminated by three months' notice or less without giving rise
to any claim for damages or compensation (other than
compensation under the Employment Rights Act 1996).
10.1.3 There are not in existence except as disclosed in paragraph
10.1.1 above any contracts or arrangements of whatsoever kind
(whether legally enforceable or not) between the Company and
any existing or former employees of the Company 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.
10.1.4 There are not in existence any arrangements by which any
person has the use of any credit or charge card or account for
which the Company is responsible.
10.1.5 The Company has not appointed any consultant whose consultancy
arrangements with the Company are current.
10.1.6 No employee of the Company is assigned or employed wholly or
mainly outside the United Kingdom.
10.1.7 The Company does not have a shadow director within the meaning
of s.741 Companies Xxx 0000.
10.2 Disputes, Claims, Trade Unions
10.2.1 No current employee has given or has been given notice to
terminate his office or employment or will be entitled to give
notice as a result of the provisions of this Agreement.
10.2.2 There is no dispute actual or threatened between the Company
and a material number or category of its employees nor any
circumstances likely to give rise to any such dispute and
there have been no strikes, work-to-rules or go-slows
(official or unofficial) by any of the Company's employees
during the period of six years immediately preceding the
Accounts Date and there is no recognition agreement or
arrangement written or oral or by custom and practice between
the Company and any trade union or other body representing
employees of the Company.
10.2.3 There is not outstanding, threatened or intimated any claim
against the Company 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 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
and none of the provisions of this Agreement including the
identity of the Purchaser is likely to lead to any such
dispute.
10.2.4 Within a period of one year preceding the date hereof the
Company has not:
(a) 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
nor has the Company failed to comply with any such
obligation under the said Act; or
(b) been a party to any relevant transfer as defined in
the Transfer of Undertakings (Protection of
Employment) Regulations 1981 nor has the Company
failed to comply with any duty to inform and consult
any independent trade unions under the said
Regulations.
10.2.5 The Company has complied with all recommendations (if any)
made by the Advisory Conciliation and Arbitration Service and
with all awards and declarations made by the Central
Arbitration Committee.
10.2.6 So far as the Warrantor is aware, the Company has in relation
to each of its employees (and so far as relevant to each of
its former employees) complied with in all material respects:
(a) all obligations imposed on it by Articles of the
Treaty of Rome European Commission Regulations and
Directives and all statutes, regulations between it
and its employees and has maintained current,
accurate and suitable records regarding the service
and terms and conditions of employment of each of its
employees (including without limitation records kept
and returns lodged in relation to statutory sick
pay);
(b) all obligations to maintain adequate and suitable
records regarding the service of each of its
employees;
(c) all (if any) collective agreements, recognition
agreements and customs and practices for the time
being dealing with such relations and the conditions
of service of its employees; and
(d) 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.
10.2.7 The Company has complied, at all times in all material
respects with the provisions of the Working Time Regulations
1998 and the Employment Rights Xxx 0000, and have kept and
maintained all necessary records.
10.2.8 There are no enquiries or investigations existing or, so far
as the Warrantor is aware, pending or threatened unto the
Company by the Equal Opportunities Commission or Commission
for Racial Equality into alleged discrimination on grounds of
disability.
10.2.9 There is no person current or provisionally employed by the
Company who now has or may in the future have a right to
return to work (whether for reasons connected with maternity
leave, leave for family or domestic reasons or absence due to
illness or incapacity or otherwise) or a right to be
reinstated or re-engaged by the Company or any other
compensation.
10.3 Bonus Schemes and Remuneration
10.3.1 There are no schemes in operation by or in relation to the
Company whereunder any 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
Company.
10.3.2 Since the Accounts Date, no change has been made or agreed to
be made in 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 (other than those required
by law) and no additional directors have been appointed.
10.3.3 No moneys other than in respect of remuneration or emoluments
of employment are payable to or for the benefit of any
director or senior executive of the Company.
10.3.4 No amounts are due to employees or former employees as arrears
of salary, wages, holiday pay or other remuneration nor are
any amounts in respect of any such employees or former
employees (including PAYE, national insurance and pension
contributions) unpaid.
10.3.5 No ex-gratia pensions or similar payments are or are intended
to be made by the Company.
11 PENSIONS AND OTHER BENEFITS
11.1 There are no agreements, arrangements, schemes or obligations for the
payment of any pensions, allowances, lump sums or other like benefits
on retirement or on death or during periods of sickness or disablement
for the benefit of any of the employees or directors of the Company or
former employees or directors or for the benefit of dependants of such
persons (other than as referred to in paragraph 11.2 below).
11.2 The Disclosure Letter contains details of the group personal pension
plans to which employees are eligible for membership in accordance with
their terms and conditions of employment. The Company has fully
complied with its obligations under such group personal pension plans.
12 INTELLECTUAL PROPERTY AND KNOW-HOW
12.1 Interests
12.1.1 The Company:
(a) is the sole registered proprietor (where appropriate)
and the sole unencumbered legal and beneficial owner
of, and otherwise has good title to and is able to
transfer with full title guarantee, each of the
Intellectual Property Rights fully, completely and
accurately listed in Schedule 7, free from all
charges, liens, encumbrances, equities, licences,
user and other agreements, rights and claims
whatsoever;
(b) is, save as set out in paragraph 12.1.1(a) the
beneficial owner of and otherwise has good title to
and is able to transfer with full title guarantee,
all Intellectual Property Rights required for any of
the business operations of its business free from all
charges, liens, encumbrances, equities, licences,
user and other agreements, rights and claims
whatsoever; and
(c) has not entered into any licences, agreements and
arrangements relating to Intellectual Property Rights
other than those set out in the Disclosure Letter 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 fully
complied with and no disputes exist or are
anticipated in respect of them .
12.1.2 The Company has no interest in any Intellectual Property Right
other than those referred to in paragraph 12.1.1 and has not
entered into any agreement for:
(a) the licensing or otherwise permitting or authorising
the use or exploitation of any Intellectual Property
Right or which prevent, restrict or otherwise inhibit
the Company's freedom to use and exploit the
Intellectual Property Rights; or
(b) the provision or acquisition of know-how or technical
information or assistance; or
(c) the prohibition or restriction of the disclosure of
any know-how or technical information.
12.2 Validity and Protection
All of the Intellectual Property Rights referred to in paragraphs
12.1.1(a) and 12.1.1(b) are valid, enforceable and not subject to
revocation and the Company has taken all steps necessary for the proper
protection of such Intellectual Property Rights including, without
limitation, applying for and maintaining in force all trade or service
xxxx registrations in all relevant countries and paying all application
and renewal fees when due.
12.3 Infringement
12.3.1 So far as the Warrantor is aware, none of the operations
carried on by the Company infringes any right of another
person in respect of any Intellectual Property Right or will
or may give rise to payment by the Company of any royalty or
of any sum in the nature of a royalty or to liability to pay
compensation pursuant to any applicable legislation. The
Intellectual Property Rights as referred to in paragraph
12.1.1 are not the subject of any pending or threatened
proceedings for opposition, cancellation, revocation or
rectification or claims from employees and there are no facts
or matters which might give rise to any such proceedings.
12.3.2 There are no outstanding claims against the Company for
infringement of any Intellectual Property Rights used (or
which has been used) by it and, so far as the Warrantor is
aware, no such claims have been settled by the giving of any
undertakings which remain in force.
12.3.3 So far as the Warrantor is aware, none of the Company's
Intellectual Property Rights as referred to in paragraph
12.1.1 is currently being infringed by any third party or has
been so infringed in the 6 year period preceding Completion
and no third party has threatened any such infringement.
13 CONFIDENTIAL INFORMATION
13.1 The Company does not use any processes nor is it engaged in any
activities which involve the misuse of any confidential information
belonging to any third party.
13.2 So far as the Warrantor is aware, there is no actual or alleged misuse
by any person of any of Confidential Information of the Company.
13.3 The Company has not disclosed to any person any of its Confidential
Information except where such disclosure was properly made in the
normal course of the Company's business or was made subject to an
agreement under which the recipient is obliged to maintain the
confidentiality of such Confidentiality Information and is restrained
from further disclosing or using it other than for the purposes for
which it was disclosed by the Company.
13.4 Confidential Information used by the Company is kept strictly
confidential and the Company operates and fully complies with
procedures which maintain such confidentiality and which
confidentiality has not been breached.
14 JOINT VENTURES ETC.
The Company is not:
14.1 a party to or member of any joint venture, consortium, partnership or
profit sharing arrangement or agreement; or
14.2 a member of any partnership, trade association, society or other group
whether formal or informal and whether or not having a separate legal
identity and no such body is relevant to or has any material influence
over the business of the Company as now carried on.
15 RESTRICTIVE AGREEMENTS
15.1 There are no agreements in force restricting the freedom of the Company
to provide and take goods and services by such means and from and to
such persons as it may from time to time think fit.
15.2 The Company is not nor has it been party to any agreement, arrangement,
concerted practice or course of conduct which:-
15.2.1 is or ought to be or ought to have been registered under the
Restrictive Trade Practices Acts 1976 and 1977 or contravenes
the provisions of the Resale Prices Xxx 0000 or is or has been
the subject of any inquiry, investigation or proceeding under
any of these Acts; or
15.2.2 is or has been the subject of an inquiry, investigation,
reference or report under the FTA (or any previous legislation
relating to monopolies or mergers), the Competition Xxx 0000
or the Competition Xxx 0000; or
15.2.3 contravenes Article 81(1) or 82 of the Treaty of Rome or which
has been notified to the Commission of the European Community
for an exemption or in respect of which an application has
been made to the said Commission for a negative clearance or
infringes any regulation or other enactment made under Article
83 of the said Treaty or is or has been the subject of any
inquiry, investigation or proceeding in respect thereof; or
15.2.4 is by virtue of its terms or by virtue of any practice for the
time being carried on in connection therewith a "Consumer
Trade Practice" within the meaning of s.13 of the FTA and
susceptible to or under reference to the Consumer Protection
Advisory Committee or the subject matter of a report to the
Secretary of State or the subject matter of an Order by the
Secretary of State under the provisions of Part II of that
Act.
15.3 The Company has not given any assurance or undertaking to the
Restrictive Practices Court or the Director General of Fair Trading or
the Secretary of State for Trade and Industry or the Commission or the
Court of Justice of the European Communities or any other court, person
or body and is not subject to any act, decision, regulation or other
instrument made by any of them relating to any matter referred to in
this paragraph 15.
15.4 So far as the Warrantor is aware, the Company is not in default or in
contravention of any article, act, decision, regulation or other
instrument or of any undertaking relating to any matter referred to in
this paragraph 15 ("the Anti-Trust Rules") and has received no
complaint or threat to complain under or referring to the Anti-Trust
Rules from any person and has not received any request for information,
investigation or objection relating to the Anti-Trust Rules or been
party to any proceedings to which the Anti-Trust Rules (or any of them)
were pleaded or relied upon.
15.5 The Company is not restricted by contract from carrying on any activity
in any part of the world.
16 INSURANCE
16.1 The Company has effected all insurances required by law to be effected
by it and all such policies are in full force and effect.
16.2 All insurance policies maintained by the Company have been disclosed in
the Disclosure Letter and such insurances are now in force under
existing valid policies.
16.3 All premiums due on the said policies have been paid. All the other
conditions of the said policies have been performed and observed.
Nothing has been done or has been omitted to be done whereby any of the
said policies has or may become void or voidable and pending Completion
such insurances will be maintained.
16.4 The said policies together with the receipts for the latest premiums
payable in respect thereof are in the possession of the Company and
have been disclosed to the Purchaser.
16.5 No claim or dispute is outstanding under any of the said policies and
no claim against the Company by any third party is outstanding in
respect of any risk covered by any of the policies or by any policy
previously held.
16.6 There are no circumstances which would or might entitle the Company to
make a claim under any of the said policies or which would or might be
required under any of the said policies to be notified to the insurers.
17 LITIGATION
17.1 The Company is not 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 the Company)and,
so far as the Warrantor is aware, there are no facts or circumstances
which might give rise thereto or to any such proceedings in respect of
which the Company is or may be liable to indemnify any party concerned
therein.
17.2 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 the
Company or any other person whatsoever in respect of any acts or
defaults for which the Company might be vicariously liable.
17.3 There are no unsatisfied judgements or Court Orders against the
Company, no injunctions have been granted against the Company and the
Company has given no undertaking to any Court or to any third party
arising out of any legal proceedings.
18 INFORMATION
The Recitals (A) and (B) and Schedules 2 and 5 are true and accurate in
all material respects.
19 INSOLVENCY
19.1 No receiver, administrative receiver or administrator has been
appointed of the whole or any part of the assets or undertaking of the
Company.
19.2 The Company is not 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 the Company.
19.3 The Company is not insolvent and has not stopped payment of or become
unable to pay, its debts for the purposes of s.123 Insolvency Act 1986
and there has been no delay by the Company in the payment of any
obligation due for payment.
20 APPLICATION OF WARRANTIES TO THE SUBSIDIARIES
Insofar as the same are capable of applying to each of the Subsidiaries
each of the above statements in this Schedule 3 would be true and
accurate in relation to the Subsidiaries if for references to the
Company there were substituted references to each Subsidiary.
SCHEDULE 4
DEED OF INDEMNITY
THIS DEED is made the day of 2000
BETWEEN:
(1) GARETH DAVID QUARRY of 00 Xxxxxxx Xxxxxx Xxxxxxxxx, Xxxxxx, XX0 0XX
("WARRANTOR"); and
(2) TMP WORLDWIDE INC whose principal office is at 0000 Xxxxxxxx, Xxx Xxxx,
XX 00000, XXX (the "Purchaser").
WHEREAS pursuant to an agreement of even date herewith and made between, inter
alia, the Warrantor (1) and the Purchaser (2) (the "Agreement") the Warrantor
has agreed to enter into this Deed of Indemnity in connection with the Offers
made by the Purchaser to acquire the shares in the Company.
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):
1.1.1 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;
1.1.2 "SCHEDULE 4 RELIEF" means:
(a) a Relief which has been treated as an asset in the
Accounts or which has been taken into account in
computing (and reducing) any provision for deferred
taxation which appears in the Accounts;
(b) subject to the use of Reliefs arising before
Completion in priority to Reliefs arising after
Completion the setting off against income profits and
gains, earned, accrued, incurred or received on or
before Completion of any Relief which was not
available before Completion but arose in respect of
any event occurring after Completion in circumstances
where but for such setting off any Member of the
Group would have had a liability to Tax in respect of
which the Purchaser would have been able to make a
claim under this Deed;
1.1.3 "Relief" means any loss, allowances, credit, deduction or set
off;
1.1.4 "TAX LIABILITY" means any amount of Tax payable by any Member
of the Group 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:
(a) any amount of Tax that would have been payable but
for the utilisation of any Schedule 4 Relief;
(b) any amount of Tax that would have been payable but
for any postponement or arrangement for payment by
installments;
(c) any amount payable by way of payment on account;
(d) any amount by which any Schedule 4 Relief that would
otherwise be available to any Member of the Group is
reduced, denied or restricted multiplied by the rate
of charge applicable to the Tax (against which the
said loss, allowance, credit, relief, deduction,
exemption or set off is or may be capable of being
relieved) for the year of assessment, financial year
or accounting period (as the case may be) in which
the reduction, denial or restriction occurs;
(e) any amount of Tax that is payable by any Member of
the Group or would otherwise be payable, but for the
utilisation of any relief, in connection with any
Reorganisation and Reconstruction of Share Capital
and/or the sale or disposal of the Excluded
Subsidiaries.
1.2 For the purposes of this Deed, the date on which a Tax Liability is
payable shall be deemed to be 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 Tax Authority) but for the
utilisation of any Schedule 4 Relief.
1.3 In the case of a Tax Liability contemplated by sub-clauses 1.1.2(d)
hereof, the date on which the liability is deemed to be payable for the
purposes of this Deed shall be either the date upon which the relevant
Tax Authority notifies any Member of the Group that the Relief is or
will be reduced, denied or restricted where the liability falls within
sub-clause 1.1.2(d) .
1.4 The Rule known as the ejusdem generis rule shall not apply and
accordingly:
1.4.1 general words introduced by the word "other" shall not be
given a restrictive meaning by reason of the fact that they
are preceded by words indicating a particular class of acts,
matters or things; and
1.4.2 general words shall not be given a restrictive meaning by
reason of the fact that they are followed by particular
examples intended to be embraced by the general words.
2 COVENANTS
2.1 The Warrantor hereby covenants with the Purchaser that he will pay to
the Purchaser an amount equal to:
2.1.1 any Tax Liability that arises 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 or mainly on or before the date
hereof and
whether or not the Purchaser or any Member of the Group are or
may be entitled to claim reimbursement thereof from any person
or persons;
2.1.2 any Tax Liability that arises as a result of the
Reorganisation and Reconstruction of Share Capital;
2.1.3 any Tax Liability that results from the receipt by the
Purchaser on its behalf of any payment under the provisions of
this Deed;
2.1.4 any Tax Liability for which any Member of the Group is liable
that arises as a result of the application of the provisions
of ss.767A, 767AA and 767B ICTA;
2.1.5 any costs or expenses reasonably incurred (on a full indemnity
basis) incurred by the Purchaser and/or any Member of the
Group in connection with any Tax Liability or in connection
with any action, proceedings or claims taken in avoiding,
resisting or settling any payment of Tax or Tax Liability 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.
2.1.6 any liability to repay to a company other than another Member
of the Group the whole or any part of any payment received for
group relief pursuant to any agreement or arrangement entered
into by any Member of the Group on or before Completion.
2.2 Without prejudice to sub-paragraph 2.1 above the Warrantor hereby
covenants to pay to the Purchaser an amount equal to any Tax Liability
for which the Company or any of the Subsidiaries is liable as a result
of being treated as a member of the same group with any body corporate
not being the Purchaser or a member of the Purchaser's Group which is
not one of the Group for the purposes of Section 43 VATA during any
prescribed accounting period (as defined in Section 25(1) VATA) which
ended on or prior to or was current at Completion and so far as any
such other bodies corporate are concerned with which it was on the date
hereof or has previously been in such a group the next following
prescribed accounting period and so that this covenant shall cover all
costs and expenses properly incurred and payable by the Company or any
of the Subsidiaries and/or the Purchaser in connection with any such
Tax Liability.
2.3 The Warrantor hereby covenants with the Purchaser (for itself and as
trustee for its successors in title) that in the event of a breach of
the Warranty given by the Warrantor under paragraphs 4.61 to 4.62 of
Schedule 3 they will pay to the Purchaser by way of liquidation damages
an amount equal to any unpaid stamp duty and any interest or penalties
which accrue in respect thereof.
3 EXCLUSIONS
3.1 The covenants contained in Clause 2 of this Deed shall be subject to
the exclusions and limitations in Schedule 6.
3.2 The Purchaser hereby covenants with the Warrantor to hold the Warrantor
and each company in which the Warrantor holds a controlling
shareholding and which prior to completion were members of the
Company's group (other than the Company and Subsidiaries) ("Warrantor
Companies") fully indemnified against:
(a) any value added tax under Section 42 VATA for which the
Vendors Companies are liable to account in respect of
supplies made by the Company or a Subsidiary;
(b) any Tax assessed on the Vendor's Companies under Section
767A, Section 767AA (or Section 767B) of ICTA to the extent
that such Tax is not of a type which would allow it to be
claimed by the Purchaser from the Warrantor under this
Deed.
4 CONDUCT OF TAX CLAIM
4.1 If the Purchaser or any Member of the Group receives any notice,
demand, assessment or other document whereby it appears that any Member
of the Group 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 shall give or procure that notice in
writing is given to the Warrantor as soon as reasonably practicable but
in any event within 30 days where there is no formal assessment or time
limits for appeal and, all other cases within 17 days and the Warrantor
shall thereupon be entitled (subject as hereinafter provided and after
consultation with the Purchaser and the relevant Member of the Group)
to resist such Tax Liability in the name of the relevant Member of the
Group 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 relevant Member of the Group gives the Warrantor all reasonable
co-operation, access and assistance for the purposes of resisting such
Tax Liability provided always that:
4.1.1 the Purchaser shall not be obliged to take any action nor
procure the taking of any action which it considers will be
onerous or prejudicial to the Purchaser or the relevant Member
of the Group. If the Purchaser fails to take any action or
procure the taking of any action due to the reasons set out in
this paragraph 4.1.1., the Purchaser shall not be entitled to
recover from the Warrantor any sums to which such Claim
relates; and
4.1.2 subject to the prior written agreement by the Purchaser and
the relevant Member of the Group (not to be unreasonably
withheld), the Warrantor shall not be entitled to resist any
such Tax Liability unless:
(a) in the case where it is intended to dispute the Tax
Liability before a Court, a Tribunal or a Commission
of Income Tax they have been advised by Tax Counsel
of at least 10 years call specialising in taxation
matters, after disclosure of all relevant information
and documents, that it is reasonable to resist such
Tax Liability in the manner proposed by the
Warrantor; and
(b) The Purchaser is indemnified and secured to its
satisfaction by the Warrantor against all losses
(including additional liability to Tax, costs,
damages, interest thereon, (a sum to which
sub-paragraph 2.3 of this Deed may apply) 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 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 and the Purchaser.
4.3 All communications relating to the dispute which are to be transmitted
to the Inland Revenue, HM Customs and Excise authorities or other
authority or body whatsoever, including any proposal for or agreement
to settle or compromise a Tax Liability shall first be submitted to the
Purchaser for approval and shall only be transmitted to the authority
in question if and when such approval is given (such approval not to be
unreasonably withheld or delayed) provided that if the Purchaser fails
to give such approval due to the reasons set out in paragraph 4.1.1,
the Purchaser shall not be entitled to recover from the Warrantor any
sum to which the dispute relates.
4.4 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
or any Member of the Group 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
or delayed) provided that if the Purchaser fails to give such approval
due to the reasons set out in paragraph 4.1.1, the Purchaser shall not
be entitled to recover from the Warrantor any sum to which the dispute
relates.
4.5 If within 14 days of the receipt by them of the aforesaid notice the
Warrantor fails to notify the Purchaser of his 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 4.1.2(a) and
4.1.2(b) above within 21 days of receipt of that said notice then the
Purchaser and/or the Group shall be free to pay or settle the Tax
Liability on such terms as 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.
4.6 If it is reasonably alleged that the Warrantor (at any time) or any
Member of the Group (prior to Completion) has committed acts or
omissions constituting fraudulent or negligent conduct sub-paragraphs
4.1 to 4.3 of this Deed shall not apply.
4.7 If:
4.7.1 the Warrantor commits an act of bankruptcy; or
4.7.2 the Warrantor becomes unable to pay his debts as and when they
fall due; or
4.7.3 the Warrantor makes a composition with his creditors or enters
into a deed or arrangement,
then sub-paragraphs 4.1 to 4.3 of this Deed shall cease to have effect
forthwith and the Purchaser shall be free to deal with all Claims for
Taxation in its absolute discretion.
5 GENERAL
5.1 The provisions of Clauses 2.8 (Warranties), 6 (General), 7 (Notices)
and 8 (Proper Law) of the Agreement shall apply, mutatis mutandis, to
this Deed in the same way as they apply to the Agreement.
5.2 This Deed shall be binding on the Warrantor and his respective
successors and personal representatives.
5.3 This document is intended to be executed as a deed and shall not be
treated as delivered until it is dated.
5.4 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 or their duly authorised representatives have
executed this document as a Deed the day and year first above written
SCHEDULE 5
PARTICULARS OF THE PROPERTIES
PART A - PROPERTIES - FREEHOLD
-------------------------- ------------------------- ---------------------- -----------------------------------------------
(1) (2) (3) (4)
OWNER SHORT DESCRIPTION TITLE NO. OR (IF OCCUPIER (WITH SHORT PARTICULARS OF OCCUPATION
UNREGISTERED) DATE OF TERMS)
ROOT OF TITLE
-------------------------- ------------------------- ---------------------- -----------------------------------------------
NONE NONE NONE NONE
-------------------------- ------------------------- ---------------------- -----------------------------------------------
PART B - PROPERTIES - LEASEHOLD/LICENCE
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
(1) (2) (3) (4) (5) (6)
LESSEE/LICENCEE SHORT DESCRIPTION DATE OF AND PARTIES TO TERM OF CURRENT ANNUAL OCCUPIER (WITH
(LEASE/LICENCE) LEASE/LICENCE (AND TITLE NO. LEASE/ RENT AND REVIEW SHORT PARTICULARS OF
IF REGISTERED) LICENCE DATES (IF OCCUPATION TERMS)
ANY)/LICENCE FEE
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
Quarry Dougall Lease Ground Floor 1. The Bedford Charity Dated (pound)18,720
Recruitment Limited 00 Xxxxxxx Xxx 21.09.99 for a
Xxxxxx XX0 2. Quarry Dougall term from 21.09.99 to
Recruitment Limited 28.09.2000
but with
21 September 1999 mutual break
option any
time after
26.03.00
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
Quarry Dougall Lease Rooms 319/ 1. Brentwood Estates 5 years from (pound)6,267
Recruitment Limited 321/ 322 Limited 16.09.96
Cornwall Buildings
Birmingham 2. Quarry Dougall
Recruitment Limited
24 April 1999
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
Quarry Dougall Lease Rooms 315 1. Brentwood Estates Terminates (pound)4,067.25
Recruitment Limited Cornwall Buildings Limited 10.10.01
Birmingham
2. Quarry Dougall
Recruitment Limited
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
QD Asia Limited Tenancy Agreement 1. KSK Property Pte Ltd 24 months S$1,648 Shop for business or
00 Xxxx Xxxxxx from 18.01.99 per month professional purposes
Xxxxxxxxx 000000 2. QD Asia Limited
18 December 1998
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
(1) (2) (3) (4) (5) (6)
LESSEE/LICENCEE SHORT DESCRIPTION DATE OF AND PARTIES TO TERM OF CURRENT ANNUAL OCCUPIER (WITH
(LEASE/LICENCE) LEASE/LICENCE (AND TITLE NO. LEASE/ RENT AND REVIEW SHORT PARTICULARS OF
IF REGISTERED) LICENCE DATES (IF OCCUPATION TERMS)
ANY)/LICENCE FEE
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
Quarry Dougall Lease Part 4th 1. Xxxxxx plc Terminates (pound)16,800 Use as offices
Recruitment Limited Floor xx 00.00.00
00/00 Xxxxxxx Xxx 0. Xxxxxx Xxxxxxx
Xxxxxx XX0 Recruitment Limited
1 December 1995
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
QD Group Limited Licence 1 Whitehall 1. MWB Business Exchange 3 months (pound)1,500
Whitehall Road Limited notice after per month
Xxxxx XX0 0XX initial period
2. QD Group Limited of 12 months
13 March 2000
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
Quarry Dougall Part 0xx Xxxxx 0. Xxxxxxx Xxxxxx plc Ending on (pound)73,800 Offices within Class
Recruitment Limited 00/00 Xxxxxxx Xxx 24.12.08 subject to review B1(1)(a) of Schedule
Xxxxxx XX0 2. Quarry Dougall on 25.12.2003 to Town and Country
Recruitment Planning (Uses
Classes) Order 187
16 December 1998
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
QD Group Limited Contract Regus 1. Regus Business Centre 10 months DM 5,264 per Offices
Business GmbH from 01.03.99 month
Centre GmbH
Messe Xxxx 0. QD Group Limited
Box 23 60308
Frankfurt 15 January 1999
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
Quarry Dougall 00 Xxxxxxx Xxxxxx 1. The Orchard Street Terminates (pound)850 per Offices
Recruitment Limited Xxxxxxx XX0 0XX Business Centre Limited xx 00.00.00 month
2. Quarry Dougall
Recruitment Limited
24 August 1999
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
QD Legal Xxxx 000 0. MWB Business Exchange 12 months (pound)1,225 pa Meeting room
Xxxx Xxxxxx House and then
121 Deansgate 2. QD Legal terminate on
Manchester X0 0XX 3 months
23 December 1999 notice
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
Quarry Dougall 0 Xxxxxx Xxxxxx 1. Market Street Block Inc 3 years C$22,737 Business offices
Recruitment Limited Toronto terminating
2. Quarry Dougall xx 00.00.00
Recruitment Limited
16 September 1998
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
Quarry Dougall 0xx Xxxxx 0. Xxxxxxx Xxxxxx plc Ending 24.12.08 (pound)84,400 Offices
Recruitment Limited 00-00 Xxxxxxx Xxx
Xxxxxx XX0 2. Quarry Dougall
Recruitment Limited
16 December 1998
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
Quarry Dougall 3rd Floor 1. Norden Technical & 15.09.92 - (pound)84,400 Offices
Recruitment Limited 00-00 Xxxxxxx Xxx, Consultancy Services Ltd 25.09.02
WC1
2. Quarry Dougall
Recruitment Limited
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
Quarry Dougall Part of World Trust 1. Xxx Xxxxx Investment Ending HK$16,704 Offices
Recruitment Limited Tower, Hong Kong Company Limited 11.08.98 per month
2. Quarry Dougall
Recruitment Limited
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
Quarry Dougall Basement 1. The Trustees of the Terminated (pound)2,750 Offices
Recruitment Limited 00 Xxxxxxx Xxx Xxxxxxx Charity 28.09.98
Xxxxxx XX0 (holding over)
2. Quarry Dougall
Recruitment Limited
3. QD Group Limited
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
Quarry Dougall 1st Floor 1. The Trustees of the Terminated (pound)4,877 Offices
Recruitment Limited 00 Xxxxxxx Xxx Xxxxxxx Charity 28.09.98
Xxxxxx XX0 (holding over)
2. Quarry Dougall
Recruitment Limited
3. QD Group Limited
2 December 1993
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
Quarry Dougall Ground and Basement 1. Meghraj Holdings 5 years to (pound)17,750 Offices
Recruitment Limited 00 Xxxxxxx Xxx Limited 17.11.02
Xxxxxx XX0 subject to a
2. Quarry Dougall mutual break
Recruitment Limited option at end
of third year
3 December 1997
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
QDR Limited Basement 1. Brentwood Estates On 3 months (pound)10,000
00 Xxxxxxx Xxxxxx Limited notice
Northside
London SW4 2. QDR Limited
-------------------- ------------------- ---------------------------- ----------------- ----------------- --------------------
SCHEDULE 6
WARRANTOR'S PROTECTION
1 GENERAL
1.1 Save in the case of fraud or, wilful concealment and/or wilful
non-disclosure on the part of the Warrantor, the provisions in this
Schedule shall operate to limit the liability of the Warrantor to the
Purchaser under the Warranties and, where applicable, the Deed of
Indemnity and to establish certain procedures for dealings with claims
under this Agreement.
1.2 In this Schedule "Claim" means a claim under the Warranties or, where
applicable, under the Deed of Indemnity.
2 AMOUNT OF CLAIM
2.1 The Warrantor shall have no liability to the Purchaser whatsoever in
respect of any individual Claim unless and until the liability of the
Warrantor thereunder exceeds the sum of (pound)10,000.00.
2.2 The Warrantor shall have no liability whatsoever to the Purchaser for
any individual Claim unless and until the liability of the Warrantor
thereunder when aggregated with the liability of the Warrantor in
respect of other Claims (excluding any amounts in respect of a Claim
for which the Warrantor have no liability by virtue of paragraph 2.1.
above) exceeds the sum of (pound)500,000 but thereafter the Warrantor
shall be liable for the whole amount claimed and not merely the excess
over (pound)500,000 provided that paragraphs 2.1 and 2.2 shall not
apply in respect of any Claim arising as a result of any liability
under clause 2.1.2 of the Deed of Indemnity or in respect of any
liability arising pursuant to paragraph 5.2.9 of this Schedule, or in
respect of any sums due to the Purchaser in accordance with Clause 2.6
of this Agreement.
2.3 The aggregate liability of the Warrantor to the Purchaser in respect of
a breach of the Warranties, Clause 2.6 of this Agreement and the Deed
of Indemnity shall not exceed the amount received by the Warrantor, in
respect of the sale of his shareholding in the Company, from the
Purchaser by way of cash, TMP Shares (as defined in the Offer Document)
and Loan Notes (as also defined in the Offer Document). The amount
which the Warrantor receives in TMP Shares shall for the purposes of
this paragraph 2.3 be the total of:
2.3.1 in respect of the TMP Shares held by the Warrantor at the date
of the Purchaser making a Claim, the value of the TMP Shares
as at Completion or the value of such TMP Shares as at the
date of the Purchaser making the Claim, whichever is the
lower; and
2.3.2 in respect of the TMP Shares disposed of by the Warrantor to a
bona fide third party through NASDAQ (as defined in the Offer
Document) prior to the date of the Purchaser making the Claim,
the amount for which the Warrantor sold such TMP Shares or the
value of such TMP Shares as at Completion, whichever is the
lower; and
2.3.3 in respect of the TMP Shares which are disposed of by the
Warrantor not at arm's length or not at full value, the amount
for which the Warrantor could have sold
such TMP Shares at arm's length or for full value through
NASDAQ on the date of such disposal (taking the closing price
of TMP Shares on such date) or the value of such TMP Shares as
at Completion, whichever is the lower.
2.4 If any payment is made by the Warrantor to the Purchaser under the
Warranties or the Deed of Indemnity it shall be treated as a reduction
in the Consideration payable to the Warrantor under the Offer.
2.5 The Warrantor shall have no liability to the Purchaser under the
Warranties to the extent that the matter or matters giving rise to such
claims are fairly disclosed in the Disclosure Letter.
3 TIME LIMITS
3.1 The Warrantor shall have no liability in respect of any claim unless
the Purchaser shall have given notice in writing of the Warrantor of
such claim specifying (to the extent reasonably practicable in
reasonable detail) the matter which gives rise to the Claim, the nature
of the Claim and, to the extent reasonably practicable, the amount
claimed in respect thereof (detailing, to the extent reasonably
practicable, the Purchaser's calculation of the loss thereby alleged to
have been suffered by it), such notice to be given as soon as
reasonably practicable and in any event not later than 30 April 2002 in
respect of a Claim under the Warranties (other than Warranties relating
to Tax) and six years after Completion in respect of a Claim under the
Deed of Indemnity and Claims for Warranties relating to Tax.
3.2 All and any liability of the Warrantor in respect of any Claim notified
to them in accordance with paragraph 3.1 shall (if such Claim has not
previously been satisfied, settled or withdrawn) be extinguished on the
expiry of nine months from the date of such notification of the Claim
unless the Purchaser shall within such nine months period have issued
and served on the Warrantor proceedings or any relevant action
commencing proceedings in respect of such Claim.
4 ACTIONS OF THE PURCHASER
The Warrantor shall have no liability to the Purchaser if the Claim
arose because the Warrantor or the Company undertook or carried out an
event at the written request of the Purchaser which gave rise to the
Claim, whether before or after the date of this Agreement.
5 LIMITATIONS
5.1 The Warrantor shall have no liability to the Purchaser in respect of a
claim under the Deed of Indemnity or the Warranties:
5.1.1 to the extent that such Claim would not have arisen but for
any failure or omission by the Company or the Purchaser to
make any claim, election, surrender or disclaimer, or give any
notice or consent or do any other thing, under, or in
connection with, the provisions of any enactment or regulation
relating to Tax after Completion, the anticipated making,
giving or doing of which was clearly taken into account in
computing the provision for Tax in the Accounts;
5.1.2 to the extent that such Claim arose by virtue of any change in
the accounting or Tax policy of the Purchaser or of the
Company including the method or submission of Tax returns, or
of valuing assets introduced after Completion;
5.1.3 to the extent that such Claim would not have occurred or
arisen but for any change in the way that Tax is required to
be calculated or any increase in the rate or rates of Tax or
changes in the law or changes in published practice of any Tax
Authority made or coming into effect after Completion but with
retrospective effect, or the withdrawal of any extra-statutory
concession currently granted by any Tax Authority.
5.2 The Warrantor shall have no liability to the Purchaser in respect of
the Warranties and/or the Deed of Indemnity:
5.2.1 to the extent that any proper provision, reserve, note or
allowance has been made in respect of the matter to which such
liability relates in the Accounts; or
5.2.2 if such liability arises by reason of any event, act,
occurrence or omission which occurs after Completion or by
reason of any matters which would not have arisen but for the
coming into force of any Legislation not enacted at Completion
or the withdrawal after Completion of any relief, allowance or
concession available at Completion (whether or not such
withdrawal purports to be effective retrospectively in whole
or in part) or by reason of any change occurring after
Completion in the published practice or published concession
of the Inland Revenue or HM Customs and Excise;
5.2.3 if such liability would not have arisen but for a voluntary
act, transaction or omission of the Purchaser and/or the
Company after Completion otherwise than in the ordinary course
of business of the relevant company and where the Purchaser
knew or ought reasonably to have known that such act, omission
or transaction was likely to give rise to a claim under the
Warranties or the Deed of Indemnity;
5.2.4 which would not have arisen but for the cessation of trade, or
a change in the nature or conduct of the trade by the Company
after Completion;
5.2.5 to the extent that a liability arises or is increased in
consequence of any failure by the Purchaser to comply with, or
failure to procure the compliance of the Company with in any
material respect any of their respective obligations under the
Deed of Indemnity; or
5.2.6 to the extent that such liability results from or is increased
or extended by a change of the accounting reference date of
the Company on Completion or any subsequent change thereafter
or by any change in the accounting policies of the Company
after Completion; or
5.2.7 to the extent that such liability has been recovered in full
by the Purchaser from third parties; or
5.2.8 to the extent that such liability arises as a result of
transactions in the ordinary course of business of the Company
since the Accounts Date and which is not interest, a penalty,
surcharge or fine in connection with Taxation; or
5.2.9 to the extent that such liability arises in respect of
employer's national insurance due in respect of the variation
or waiver of rights over Capricorn Shares in connection with
the acceptance of Offers provided that this exclusion shall
not apply to such employer's national insurance to the extent
that the net cost of such liability after deduction against
corporation tax (whenever such deduction is utilised) is in
excess of (pound)650,000 whereupon the Warrantor shall be
liable for the amount of any excess and the provisions of
paragraph 2.2 of this Schedule 6 shall not apply to this
excess.
6 CHANGES IN THE LAW
The Warrantor shall have no liability to the Purchaser whatsoever in
respect of any Claim to the extent that the Claim would not have arisen
but for the passing of, or any change in, after the date of this
Agreement, any law, rule, regulation, interpretation of the law or
administrative practice of any government, governmental department,
agency or regulatory body.
7 RELIEFS/SET-OFFS AGAINST THE CLAIM
7.1 The Warrantor shall have no liability to the Purchaser for any Claim to
the extent of any corresponding savings by or net benefit to the
Purchaser or the Company arising from the event giving rise to the
Claim and, in particular but without prejudice to the generality of the
foregoing, there shall be taken into account the amount by which any
Tax for which the Purchaser or the Company would otherwise have become
accountable or liable to be assessed is reduced or extinguished as a
result of the event giving rise to the Claim.
7.2 If the Purchaser is entitled to make a claim against the Warrantor
under the Warranties and a claim may also be made under the Deed of
Indemnity, the Purchaser shall be entitled to make a claim only under
the Deed of Indemnity and not under the Warranties and the Purchaser
shall not make any claim under the Warranties in respect of the claim
to the extent that it is satisfied by the claim under the Deed of
Indemnity.
7.3 The Purchaser shall or shall procure that the Company shall promptly
reimburse to the Warrantor such sum up to a maximum amount equal to any
sum paid by the Warrantor in respect of any breach of the Warranties
and/or under the Deed of Indemnity which is subsequently recovered by
the Purchaser or the Company as the case may be from any third party
less any costs or Tax incurred by the Purchaser and/or the Company in
recovering such monies in relation to the subject matter of the said
breach from any third party.
7.4 If in respect of any liability of the Warrantor under the Warranties
and/or the Deed of Indemnity the Purchaser and/or the Company are
entitled to recover any sum from some person other than the Warrantor
or claim reimbursement of any sum in respect of Tax from some person
other than the Warrantor, the Purchaser and/or the Company shall take
such steps (at the Warrantor's cost) as the Warrantor may reasonably
require to enforce such recovery or reimbursement provided that the
Warrantor shall have paid in full all sums due to the Purchaser and/or
the Company.
7.5 It is agreed between the Warrantor and the Purchaser that as regards
all accounting periods ended on or before or including Completion the
Purchaser shall have sole conduct of the tax affairs of the Company and
the Purchaser shall procure that the
Company makes such claims or elections and executes such documents as
the Warrantor reasonably direct provided that the Purchaser shall not
be obliged to execute any document which it reasonably considers to be
onerous or prejudicial to the Company or the Purchaser. The Purchaser
shall consult with the Warrantor in relation to all actions taken by
them pursuant to the provisions of this paragraph in respect of the
accounting periods up to Completion.
7.6 Without prejudice to the generality of paragraph 7.5 above, the
Purchaser shall have the sole conduct of the preparation, submission to
the Inland Revenue, negotiation, correspondence and agreement of the
tax computations and the profits and losses for tax purposes of the
Company for the accounting periods ended on or before or including
Completion and in respect of which final agreement of the liabilities
to Tax has not been reached with the Inland Revenue and that the
Purchaser shall consult with the Warrantor in regard to the submissions
to the Inland Revenue. The Warrantor (and their advisers) shall be
provided with such information and assistance and access to such
documents and records of or relating to the Company as they may
reasonably require in respect of such submissions to the Inland
Revenue.
7.7 The Purchaser shall at all times allow the Warrantor to make reasonable
representations in respect of all tax affairs of the Company for the
accounting periods ending on or prior to or including Completion and
for this purpose the Warrantor shall be provided with copies of any
proposed letters and/or submissions to the Inland Revenue before
dispatch and shall be afforded a reasonable opportunity (not in any
event to exceed twenty eight days) for commenting on all such letters
and submissions and the Purchaser shall keep the Warrantor fully
informed of the progress of all such tax affairs and provide copies to
the Warrantor of any other relevant documents.
8 SATISFACTION OF CLAIM BY OTHER PERSONS/MEANS
Nothing in this Schedule shall in any way restrict or limit the general
obligation at law of the Purchaser or the Company to mitigate any loss
or damage which it may suffer in consequence of any event giving rise
to any Claim.
9 CONDUCT OF CLAIMS
9.1 If the Purchaser becomes aware of any matter which might give rise to a
Claim under the Warranties, the following provisions shall apply:
9.1.1 the Purchaser shall as soon as practicable give notice with,
to the extent reasonably practicable, reasonable details of
the subject matter thereof to the Warrantor of the relevant
matter and shall consult with the Warrantor in respect of the
relevant matter;
9.1.2 the Purchaser shall provide to the Warrantor and to the
Warrantor's professional advisers reasonable access and on
reasonable notice to premises and personnel and to any
relevant assets, documents and records within their power,
possession or control for the purpose of investigating the
relevant matter and to enable the Warrantor to take such
action as is referred to in paragraph 9.1.3 below;
9.1.3 the Warrantor (at his own expense) shall be entitled to take
copies of any documents or records and photograph any premises
or assets as referred to in paragraph 9.1.2 above;
9.1.4 the Purchaser or the Company shall have the conduct of the
matter which is the subject of the Claim and shall act
reasonably in such conduct;
9.1.5 the Warrantor shall be kept reasonably informed by the
Purchaser of all matters pertaining to a Claim and shall be
entitled to see copies of all related correspondence and notes
or other written records of telephone conversations or
meetings;
9.1.6 all written communications pertaining to a Claim which are
required to be transmitted by the Purchaser to any statutory
or governmental authority or body whatsoever shall be copied
to the Warrantor.
9.2 The Warrantor and the Purchaser shall, and shall procure that all of
their agents, if any shall, keep confidential all information which
they receive about the Company, the Warrantor, and/or the Purchaser or
their affairs or business as a result of this paragraph 9.
10 RECOVERY FROM OTHER PERSONS
10.1 If at any time the Purchaser becomes entitled to recover from any
insurance company with whom the Purchaser and/or the Company has a
policy any sum in respect of any Claim then, before recovering from the
Warrantor, the Purchaser shall;
10.1.1 undertake all reasonable steps necessary to enforce such
recovery; and
10.1.2 as soon as soon as reasonably practicable supply all
information which relates to such recovery to the Warrantor
including reasonable details of any steps taken to enforce
such recovery and copies of all relevant correspondence and
documents relating to the same.
10.2 If at any time the Purchaser becomes entitled to recover (after having
recovered in full from the Warrantor) from some person (other than the
Warrantor and other than any insurance company referred to in paragraph
10.1 above) any sum in respect of any Claim than the Purchaser shall;
10.2.1 undertake all reasonable steps necessary to enforce such
recovery;
10.2.2 as soon as reasonably practicable supply all information which
relates to such recovery to the Warrantor including reasonable
details of any steps taken to enforce such recovery and copies
of all relevant correspondence and documents relating to the
same; and
10.2.3 account to the Warrantor in respect of any amount so recovered
(after deduction of all costs and expenses of the recovery) up
to the amount of the Claim.
10.3 If the Purchaser does not recover any sum in respect of any Claim, the
Warrantor shall be entitled to enforce recovery of that sum in the name
of the Company but at the expense of the Warrantor and to have the
conduct of any proceedings, appeal, dispute, compromise or defence
thereof and of any incidental negotiations and the Purchaser will give
and/or procure that the Company will give the Warrantor all reasonable
co-operation, access and assistance for the purposes of enforcing such
recovery provided always that:
10.3.1 neither the Purchaser nor the Company shall be obliged to take
any action nor procure the taking of any action which it
considers will be onerous or prejudicial to the Purchaser or
the Company;
10.3.2 the Purchaser is indemnified and secured to its satisfaction
by the Warrantor against all losses (including the costs,
damages and interest thereon and expenses including the cost
of time expended, such cost of time to be calculated upon a
reasonable basis) which may thereby be incurred; and
10.3.3 if the Purchaser or the Company fails to take any action due
to the reasons set out in paragraph 10.3.1 above, the
Purchaser shall be required to repay to the Warrantor any sums
paid to it by the Warrantor in respect of the Claim.
11 GENERAL
11.1 The Purchaser shall not be entitled to recover more than once from the
Warrantor in respect of one event giving rise to a Claim.
11.2 The Purchaser undertakes to retain or to procure the retention by the
Company of all such books, records, accounts, correspondence and other
papers of the Company as are likely to be material in the context of
the liability of the Warrantor under the Warranties or the Deed of
Indemnity during the subsistence of the liability of the Warrantor
under the Warranties or (as the case may be) the Deed of Indemnity.
12 PAYE/NATIONAL INSURANCE
Notwithstanding the provisions of this Agreement and this Schedule 6 of
the following provisions shall apply as regards accounting for and the
conduct of the tax affairs in relation to PAYE and employers and
employees' National Insurance in respect of the Offers
12.1 The Warrantor (or such person as the Warrantor shall direct) shall have
sole responsibility and conduct of:
12.1.1 the collection of PAYE and National Insurance from employees
and ex-employees accepting the Offers resulting from the
waiver or variation of restrictions over their Shares and
their acceptance of the Offers ("Offer Tax");
12.1.2 accounting to the Inland Revenue for such Offer Tax;
12.1.3 accounting for the employer's National Insurance arising in
connection with the acceptance of Offers and incidental
variations and restrictions of rights attaching to the Shares
and Options over Shares in the Company the subject of the
Offers;
12.1.4 dealing with any follow up queries and correspondence in
respect of such Offer Tax and employer's National Insurance.
12.2 Any amount paid by the Company in respect of the employer's National
Insurance liabilities resulting from the waiver or variation of
restrictions over the Shares and Options over Shares the subject of the
Offers which is subsequently recovered from the Inland Revenue shall be
paid to the Shareholders of the Company in the same proportion that the
number of Shares comprised in their respective shareholdings bears to
all Shares of all classes the subject of the Offers within 30 days of
TMP being
reasonably satisfied that the recovery relates to the employer's
National Insurance liabilities.
12.3 The Warrantor shall keep the Purchaser fully informed of all matters
pertaining to the matters set out in this paragraph 12 and shall
provide expeditiously to the Purchaser copies of all related
correspondence, notes and other written records of telephone
conversations and/or meetings.
13 LOSS ON SALE OF EXCLUDED SUBSIDIARIES
13.1 Notwithstanding anything in this Agreement including the Deed of
Indemnity to the extent that Relief is generated solely as a result of
the Reorganisation and Reconstruction of Share Capital and/or the sale
or disposal of the Excluded Subsidiaries and such Relief is
subsequently disallowed or lost no Claim shall arise.
SCHEDULE 7
INTELLECTUAL PROPERTY RIGHTS
1. Trademark No 1546154
Country United Kingdom
Proprietor Quarry Dougall Recruitment Limited
Xxxx QD & Quarry Dougall (composite xxxx)
Class 35
2. Trademark No 1546148
Country United Kingdom
Proprietor Quarry Dougall Recruitment Limited
Xxxx Quarry Dougall
Class 35
SIGNED AND DELIVERED
AS A DEED by the said
GARETH DAVID QUARRY
in the presence of:
Witness name:
Address:
Occupation:
SIGNED AND DELIVERED
AS A DEED by XXXXXX XXXXXXXX
for and on behalf
of TMP WORLDWIDE INC
in the presence of:
