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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported:) January 13, 1997
Commission File Number 0-28840
INFORMATION MANAGEMENT RESOURCES, INC.
(Exact Name of Registrant as Specified in its Charter)
FLORIDA 59-2911475
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
26750 U.S. HIGHWAY 19 NORTH
SUITE 500
CLEARWATER, FLORIDA 34621
(Address of Principal Executive Office and Zip Code)
(813) 797-7080
(Registrant's Telephone Number, Including Area Code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
-------------------------------------
Pursuant to an Agreement signed January 13, 1997 (effective January 8, 1997),
the Company has agreed to acquire 100% of the outstanding shares of Link Group
Holdings Limited ("Link"), a U.K. software services provider, from its two
owners, Philip and Sheila Shiperlee (collectively referred to as "Sellers").
Philip Shiperlee serves as a Director of Information Management Resources, Inc.
("IMR"). The purchase price to be paid at closing consists of (a)
(Pounds)1,250,000 (approximately $2.1 million) in cash (b) (Pounds)1,000,000
(approximately $1.7 million) non-interest bearing note payable due twelve months
from the date of closing and (c) unregistered shares of IMR's common stock with
a value of (Pounds)1,000,000 (approximately $1.7 million) on the date of
closing. The Company anticipates the closing will be held by February 7, 1997.
The purchase price was determined through negotiations between the Company and
the Sellers. Cash at closing will be paid out of the Company's working capital.
The Link acquisition will be accounted for as a purchase pursuant to APB No. 16,
"Business Combinations" and resulting goodwill will be amortized over a 7-year
period. A more detailed description of the transaction is contained in the
Agreement filed as Exhibit 2.1 and hereby incorporated by reference.
In addition, the Company has entered into an agreement with Satish K. Sanan and
his spouse to acquire 10.5% of Information Management Resources (UK) Ltd. ("IMR-
UK") for $520,000 in cash. Mr. Sanan is IMR's largest shareholder, Director,
Chief Executive Officer and President. The purchase price was determined
through negotiations between the Company and Mr. and Mrs. Sanan. The Company
anticipates the closing will be held by February 7, 1997. Cash at closing will
be paid out of the Company's working capital. The acquisition from IMR's
largest shareholder will be accounted for as a reduction of equity. A more
detailed description of the transaction is contained in the Share Purchase
Agreement filed as Exhibit 2.2 and hereby incorporated by reference.
Prior to the above acquisitions, the Company owned 39.5% of "IMR-UK" and "Link"
owned 50.0% of "IMR-UK". After the above acquisitions, the Company will
effectively own 100% of both "Link" and "IMR-UK".
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
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(a) Financial Statements of Businesses Acquired. Not required pursuant
to Rule 3.05(b) of Regulation S-X.
(b) Pro Forma Financial Information. Not required pursuant to
Rule 3.05(b) of Regulation S-X.
(c) Exhibits:
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Number Description
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2.1 Agreement - Acquisition of Link Group Holdings Limited
dated January 13, 1997 for the acquisition of "Link"
between Information Management Resources, Inc. (Buyer) and
Philip and Sheila Shiperlee (Sellers).
2.2 Share Purchase Agreement dated January 13, 1997 for the
acquisition of 10.5% of "IMR-UK" between Information
Management Resources, Inc. (Buyer) and Satish and Anne
Sanan (Sellers).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INFORMATION MANAGEMENT RESOURCES, INC.
Date: January 27, 1997 /s/ Satish K. Sanan
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Satish K. Sanan
Chief Executive Officer
Date: January 27, 1997 /s/ Michael J. Dean
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Michael J. Dean
Chief Financial Officer
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EXHIBIT 2.1
DATED 13TH JANUARY 1997
-----------------------
P. F. SHIPPERLEE, ESQ. and MRS. S.F. SHIPPERLEE (1)
GENEPAD LIMITED (2)
INFORMATION MANAGEMENT RESOURCES INC (3)
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AGREEMENT
acquisition of
Link Group Holdings Limited
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Walsh Lawson
54-62 Regent Street,
LONDON,
W1R 5PJ.
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CONTENTS
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<TABLE>
<CAPTION>
Clause Heading Page
- ------ ------- ----
<S> <C> <C>
1. Definitions and Interpretation 3
2. Conditions Precedent 11
3. Sale of Shares 13
4. Consideration 13
5. Warranties 16
6. Completion 22
7. Undertakings by the Vendors 26
8. Deferred Consideration 28
9. Restriction on Disposal of Shares 29
10. Termination 30
11. Guarantee and Undertaking 30
12. Miscellaneous 31
13. Confidentiality 32
14. Announcements 32
15. Costs 33
16. Non-merger on Completion 33
17. Severability 33
18. Entire Agreement 34
19. Notices 34
20. Governing Law 35
Schedules
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The First
Schedule Deed of Indemnity 36
The Second
Schedule Details of Directors 45
The Third
Schedule Shareholdings in the Company 46
The Fourth
Schedule Particulars of the Property 47
The Fifth
Schedule Warranties 48
The Sixth
Schedule Subsidiaries 78
</TABLE>
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THIS AGREEMENT is made the 13th day of January 1997
BETWEEN:-
(1) THE PERSONS whose names and addresses are set out in the Third Schedule
("the Vendors");
(2) GENEPAD LIMITED (Company No. 3290026) whose registered office is at Link
House St Mary's Way Chesham Buckinghamshire HP5 1HR ("the Purchaser"); and
(3) INFORMATION MANAGEMENT RESOURCES INC of 26750 US Highway, 19 North, Suite
500, Clearwater, Florida, 34621 ("the Guarantor")
WHEREBY IT IS AGREED as follows:-
1. DEFINITIONS AND INTERPRETATION
------------------------------
1.1 In this Agreement and in the Schedules:-
"Accounts" means the audited balance sheets of the Company and
the Subsidiaries as at the Balance Sheet Date and
the audited profit and loss accounts of the Company
and the Subsidiaries for the year ended on the
Balance Sheet Date, together in each case with all
notes, reports, statements, and all other documents
annexed thereto in accordance with any legal
requirements;
"Agreement" means this Agreement and the Schedules hereto;
"the Balance Sheet" means the consolidated balance sheet of the Company
and its Subsidiaries (excluding IMR (UK)) as at 31st
December 1996 submitted by the Vendors' Accountants
pursuant to Sub-clause 2.2.1;
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"Balance Sheet Date" means 31st May 1996;
"Bank" means Midland Bank plc, Midland House, 98 Oxford
Road, High Wycombe, Bucks, HP11 2DR (branch);
"Bank Indebtedness" means the aggregate indebtedness of the Group to the
Bank on the Business Day immediately preceding the
date of this Agreement;
"Business Day" means a day (other than a Saturday or Sunday) on
which clearing banks are open for business;
"Cash Consideration" means (Pounds)1,250,000;
"Claim for Tax" includes any assessment, notice, demand, letter or
other document issued or action taken by or on
behalf of any Tax Authority whereby the Company
and/or the Subsidiaries is or may be placed or
sought to be placed under any Tax Liability;
"Company" means Link Group Holdings Limited, a company
incorporated on 26th September 1994 as a private
company limited by shares and registered in England
under the Companies Acts with number 2972297 and
whose registered office is at Holborn Hall, 100
Grays Inn Road, London, WC1X 8BY;
"Companies Act" means the Companies Act 1985 as amended by the
Companies Act 1989;
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"Completion" means completion of the sale and purchase of the
Shares in accordance with Clause 6;
"Completion Accounts" means the consolidated balance sheet of the Company
and its Subsidiaries as at the Effective Date and
the consolidated profit and loss account for the
Company and its Subsidiaries for the period ended on
the Effective Date audited by the Vendors'
Accountants pursuant to Sub-clause 4.5.2 together in
each case with all notes, reports, statements and
all other documents annexed thereto;
"Completion Date" means the date which is two Business Days after
satisfaction of the last of the Conditions;
"Conditions" means the Conditions referred to in clause 2;
"Consideration Shares" means such number of shares of Common Stock par
value US$0.10 in the Guarantor as have an aggregate
market value (determined by reference to the
closing/mid-market price of a share of Common Stock
par value US$0.10 in the capital of the Guarantor on
the NASDAQ National Market on the Business Day
immediately preceding the Completion Date) as close
as possible to (but not exceeding) (Pounds)1,000,000
(at the dollar/sterling exchange rate detailed in
the Wall Street Journal on the Business Day
immediately preceding the Completion Date) without
requiring the issue of fractions of shares either in
aggregate or to either of the Vendors and the
Purchaser shall pay to the Vendors the difference
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between the market value of such shares allotted
(determined as aforesaid) and (Pounds)1,000,000;
such shares to be credited as fully paid up and
ranking on allotment for all dividends and
distributions declared, paid or made on the Common
Stock par value US$0.10 in the share capital of
the Guarantor after the date hereof and otherwise
pari passu in all respects with the existing the
Common Stock par value US$0.10 each in the Guarantor
save that they will not rank for any dividend or
other distribution payable by reference to a date
prior to the date of Completion;
"Deed of Indemnity" means a deed in the form set out in the First
Schedule;
"Deferred means the sum of (Pounds)1,000,000 subject to
Consideration" reduction in accordance with and pursuant to the
provisions of Clause 8;
"Deferred Payment means the first anniversary of the Completion
Date" Date;
"Directors" means the directors of the Company listed in Part I
of the Second Schedule;
"Disclosure Letter" means the letter of even date herewith from the
Vendors to the Purchaser;
"the Effective Date" means 8th January 1997;
"Event" includes (without limitation) any omission or
transaction of whatever nature whether or not the
Company and/or the Subsidiaries is a party thereto;
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"Group" means the Company and the Subsidiaries;
"the Guarantees" means the personal guarantees dated 12th April 1996
or such other guarantees entered into by the Vendors
pursuant to which the Vendors have jointly and
severally guaranteed the repayment of the Bank
Indebtedness to the Bank and "Guarantee" shall be
construed accordingly;
"ICTA" means the Income and Corporation Taxes Act 1988;
"IMR (UK)" means IMR (UK) Limited, a company incorporated on
2nd October 1992 as a private company limited by
Shares and registered in England under the Companies
Acts with number 2752876 and whose registered office
is at Holborn Hall, 100 Grays Inn Road, London, W1X
8BY;
"Initial means the aggregate of the Cash Consideration and
Consideration" the Consideration Shares;
"IMR (UK) Accounts" means the balance sheet of IMR (UK) as at 31st
December 1996 and the profit and loss account of IMR
(UK) for the year ended on 31st December 1996
prepared pursuant to Sub-clause 4.5.1 together in
each case with all notes, reports, statements and
all other documents annexed thereto in accordance
with any legal requirements;
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"Intellectual means any patents, trade marks, service marks,
Property" registered designs, applications for any of the
foregoing, copyrights, trade or business names,
inventions, discoveries, improvements, designs,
techniques, computer programmes and other
confidential process, information and know-how and
any other similar industrial or commercial rights
and any licences in connection with the same;
"Net Assets" for the purposes of calculating the Deferred
Consideration shall have the meaning set out in Sub-
clause 4.4.2;
"Net Profit" for the purposes of calculating the Deferred
Consideration shall have the meaning set out in Sub-
clause 4.4.1;
"Property" means the property short particulars of which are
set out in the Fourth Schedule;
"Purchaser's means Walsh Lawson, 54-62 Regent Street London
Solicitors" W1R 5PJ;
"Purchaser's means Coopers & Lybrand, 1 Embankment Place,
Accountants" London, WC2N 6NN;
"Relief" means any relief, allowance, credit, deduction, set-
off, exemption or right to repayment given claimed
or available pursuant to any Tax Legislation;
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"Shares" means the whole of the issued share capital of the
Company being 1,000 Ordinary Shares of (Pounds)1
each to be bought and sold pursuant to Clause 3
hereof particulars of the shareholding of which are
set out in the Third Schedule;
"Subsidiaries" means the Company's subsidiaries (within the meaning
of Section 736 of the Companies Act) at the date
hereof as set out in the Sixth Schedule;
"Tax" or "Taxation" means any tax of any relevant country and includes
without limitation, corporation tax, income tax,
capital gains tax, development land tax, value added
tax, customs and other import duties, stamp duty,
national insurance, estate duty, capital transfer
tax, inheritance tax, betterment levy and any
payment in the nature of a tax payment which is
payable to a Tax Authority in any country as a
result of any enactment, regulation or judgement in
each case relating to taxation and all penalties,
fines, surcharges and interest relating to any Claim
for Tax;
"Tax Authority" means any authority whether within or outside the
United Kingdom competent to impose a liability to
Tax;
"Tax Legislation" means any statute, statutory instrument, enactment,
law, by-law, directive, decree, ordinance,
regulation or legislative provision enacted, issued
or adopted providing for, imposing or relating to
Tax;
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"TCGA" means the Taxation of Chargeable Gains Act 1992
"Vendors' Solicitors" means Tarlo Lyons, Watchmaker Court, 33 St Johns
Lane, London, EC1M 4DB;
"Vendors' Accountants" means Arram Berlyn Gardner, Holborn Hall, 100 Grays
Inn Road, London, WC1X 8BY;
"Warranties" means the warranties, representations, covenants and
undertakings set out in Clause 5 and the Fifth
Schedule;
"Warrantors" means both of the Vendors.
1.2 Words and phrases the definition of which is contained or referred to in
Part XXVI of the Companies Act shall be construed as having the meaning in
this Agreement thereby attributed to them unless the context otherwise
requires.
1.3 Reference to statutory provisions shall be construed as references to those
provisions as amended or re-enacted (whether before or after the date
hereof) from time to time and shall include any provisions of which they
are re-enactments (whether with or without modification) and shall further
include all statutory instruments or orders from time to time made pursuant
thereto.
1.4 Reference to a document "in the approved terms" means that document in a
form approved and for the purpose of identification signed by or on behalf
of the parties hereto or such other terms as may be agreed in writing
between the parties in substitution therefor.
1.5 Where the context permits words importing one gender shall be treated as
importing any gender and words importing individuals shall be treated as
importing corporations unincorporated associations and partnerships and
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vice versa the singular shall include the plural and references to the
whole shall include references to the parts thereof.
1.6 The clause headings are for convenience only and shall not affect the
construction hereof.
1.7 The Schedules form part of this Agreement and shall be construed and have
the same full force and effect as if expressly set out in the body of this
Agreement.
2. CONDITIONS PRECEDENT
--------------------
2.1 This Agreement is conditional upon:-
2.1.1 the Balance Sheet disclosing Net Assets of not less than
(Pounds)200,000;
2.1.2 the Purchaser's Accountants having certified to the Purchaser and
the Guarantor in writing that the Balance Sheet:-
2.1.2.1 has been prepared in accordance with the requirements of
the Companies Act and any other legislation and complies
with all current Statements of Standard Accounting Practice
and Financial Reporting Standards issued by the Institute
of Chartered Accountants in England and Wales; and
2.1.2.2 has been prepared on the same basis and policies as the
Accounts: and
2.1.2.3 contains proper provisions therein in respect of all
liabilities (including without limitation taxation)
(whether actual or contingent, quantified or in dispute) of
the Company and its Subsidiaries as at 31st December 1996;
and
2.1.2.4 gives a true and fair view of the financial position of the
Company and its Subsidiaries as at 31st December 1996.
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2.2 With regard to the fulfilment of the Conditions:-
2.2.1 The Vendors shall procure that the Group prepare and the Vendors'
Accountants submit to the Purchaser the Guarantor and the
Purchaser's Accountants within eight Business Days of the date of
this Agreement (inclusive of the date of this Agreement):
2.2.1.1 the Balance Sheet; and
2.2.1.2 consolidated management accounts for the Company and the
Subsidiaries for the period ended 31st December 1996.
2.2.2 The Purchaser shall procure that the Purchaser's Accountants shall
consider the Balance Sheet and let the Purchaser have its response
or certificate (if appropriate) in relation thereto within eight
Business Days of receipt of the Balance Sheet by the Purchaser's
Accountants. A copy of the response or Certificate (as the case may
be) shall be delivered to the Vendors and the Vendors' Accountants.
2.2.3 For the purposes of the consideration of the Balance Sheet by the
Purchaser's Accountants the Vendors shall procure that the Vendors'
Accountants and/or the Company and its Subsidiaries make available
at all reasonable times for inspection by the Purchaser's
Accountants the accounting records their working papers and files of
the Company and its Subsidiaries and all other information which may
be relevant.
2.3 In the event that the Conditions are not fulfilled on or before 7th
February 1997 (or such later date as may be agreed between the Vendors and
the Purchaser) the Purchaser shall provided that the Purchaser has complied
with its obligations under sub-clause 2.2.2 be entitled by notice in
writing given to the Vendors (without prejudice to any other of its rights
or remedies) at any time thereafter (but prior to the Conditions being
fulfilled) to determine this Agreement.
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2.4 For the avoidance of doubt all debts due from IMR (UK) to the Group (or due
from the Group to IMR (UK)) shall properly be taken into account in the
preparation of any accounts to be prepared hereunder
3. SALE OF SHARES
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3.1 Subject to the terms of this Agreement each of the Vendors shall sell the
number of the Shares set out opposite his name in the Third Schedule with
full title guarantee and the Purchaser shall purchase the Shares free from
all options, liens, equities, claims, charges, encumbrances or restrictions
whatsoever and together with effect from the Effective Date all rights
attaching thereto and all dividends and distributions declared, made or
paid thereon or in respect thereof on or after the Effective Date.
3.2 Each of the Vendors hereby waives any pre-emption rights he may have in
relation to the Shares under the articles of association of the Company or
otherwise.
3.3 The Purchaser shall not be obliged to complete the sale and purchase of any
of the Shares unless the sale and purchase of all the Shares is completed
simultaneously.
4. CONSIDERATION
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4.1 The Initial Consideration shall be satisfied on Completion:-
4.1.1 as to (Pounds)1,250,000 in cash; and
4.1.2 as to (Pounds)1,000,000 by the issue of the Consideration Shares.
4.2 The Initial Consideration shall be divided between the Vendors in the
proportions specified in the Third Schedule.
4.3 The Deferred Consideration (if any) shall be satisfied on the Deferred
Payment Date by bankers draft drawn on a city branch of a London Town
Clearing Bank and shall be divided between the Vendors in the proportions
specified in the Third Schedule.
4.4 For the purpose of calculating the Deferred Consideration:
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4.4.1 the Net Profits shall mean the profit on ordinary activities of IMR
(UK) before taxation for the period of twelve months ending on 31st
December 1996 as derived from the IMR (UK) Accounts, such profits to
be certified by the auditors for the time being of IMR (UK) and to
be adjusted in so far as necessary:-
4.4.1.1 so as to include a credit of the actual spend (up to
(Pounds)40,000) for the Year 2000 Conference; and
4.4.1.2 so as to exclude:-
4.4.1.2.1 any charge or provision for corporation tax in
respect of the profits or chargeable gains of
IMR (UK) for the said twelve month period;
4.4.1.2.2 any exceptional items as defined in Financial
Reporting Standard 3 to the extent that such
exceptional items would reduce the Net Profits;
4.4.2 the Net Assets of the Company and its Subsidiaries as at the
Effective Date shall be as disclosed in the Completion Accounts and
be certified by the Vendors' Accountants.
4.5 The Vendors shall procure that the IMR (UK) Accounts and the Completion
Accounts are prepared and submitted to the Vendors' Accountants who shall:-
4.5.1 audit the IMR (UK) Accounts which shall be prepared (1) in
accordance with the requirements of all relevant statutory
provisions and SSAP's and Financial Reporting Standards (2) on the
same basis and policies as the previous auditing accounts of IMR
(UK) and generally accepted accounting principles and audited to
generally accepted auditing standards as soon as practicable after
31st December 1996 and in any event before 28th February 1997;
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4.5.2 audit the Completion Accounts which shall be prepared (1) in
accordance with the requirements of all relevant statutory
provisions and SSAP's and Financial Reporting Standards (2) on the
same basis and policies as the Accounts and generally accepted
accounting principles (3) and audited to generally accepted auditing
standards as soon as practicable after the Effective Date and in any
event before 28th February 1997;
4.5.3 submit to the Purchaser's Accountants and the Purchaser copies of
the IMR (UK) Accounts and the Completion Accounts and allow the
Purchaser's Accountants and the Purchaser a period of 28 days from
the date of receipt to make comments and representations thereon;
4.5.4 the Vendor's Accountants shall after fully considering and, if
appropriate, taking into account comments and representations (if
any) made by the Purchaser's Accountants and/or the Purchaser
prepare and deliver to the Purchaser and to the Vendors within 10
Business Days after the period of 28 days referred to in Sub-clause
4.5.3 a certificate of (1) the Net Profits together with a copy of
their calculation of the Net Profits showing the application of any
adjustments referred to in Clause 4.4 above, and (2) the "Net
Assets";
4.6 The Vendors shall procure that the Purchaser and the Purchaser's
Accountants are afforded full disclosure of all material facts known to the
Vendors and the Group together with free access to the Group's and IMR
(UK)'s auditors' working papers and records and those of the Group and IMR
(UK).
4.7 In the event of there being any dispute difference or question which may
arise between the Vendors and the Purchaser in connection with the said
certificate or calculation and the provisions of this Clause 4 notice of
any such dispute or difference shall be given to the other party specifying
the nature of the difference or dispute within 14 Business Days of receipt
of the certificate and any dispute or difference which cannot be resolved
by the parties within 28 Business Days of receipt of the said certificate
shall be referred to the decision of a single Chartered Accountant or firm
of Accountants to be agreed between the parties or in default of such
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agreement within a period of 7 days to be selected (at the instance of
either party) by the President for the time being of the Institute of
Chartered Accountants in England and such Chartered Accountant or firm of
Chartered Accountants shall be deemed and instructed to act as experts and
not as arbitrators in connection with the giving of such decision which
shall be binding (save for manifest error) on the parties. The costs of the
expert shall form part of his award;
4.8 The Company shall bear the costs of the Vendors' Accountants and the
Purchaser's Accountants associated with the preparation and issue of the
said certificate.
4.9 The certificate of the Net Profits and the Net Assets delivered pursuant to
Sub-clause 4.5.3 shall (in the absence of manifest error to be notified by
either party to the other in writing within 14 Business Days of receipt or
in the absence of the appointment of an expert in terms of Clause 4.7) be
binding on the parties hereto.
5. WARRANTIES
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5.1 Each of the Warrantors acknowledges that the Warrantors have jointly and
severally made the Warranties to the Purchaser and that the Purchaser has
entered into this Agreement on the basis of and in full reliance on the
Warranties.
5.2 The Warrantors jointly and severally warrant and represent to the Purchaser
in the terms of the Fifth Schedule
5.3 The Warranties are given subject to the matters expressly disclosed in the
Disclosure Letter but no other information relating to the Company of which
the Purchaser has knowledge (actual or constructive) shall prejudice any
claim made by the Purchaser under the Warranties or operate to reduce any
amounts recoverable. The Purchaser warrants that save as disclosed in the
Disclosure Letter it is not at the date of this Agreement aware of any
breach of the Warranties.
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5.4 Each of the Warranties shall be separate and independent and save as
expressly provided shall not be limited by reference to any other Warranty
or any other provision of this Agreement.
5.5 Where any statement set out in the Fifth Schedule is expressed to be given
or made "to the best of the Warrantors' knowledge" or "to the best of the
Warrantors' knowledge and belief" or "after having made all proper enquiry"
or "so far as the Warrantors are aware", such statement (save where
otherwise expressly stated) shall be deemed to be qualified by the
additional statement that the Warrantors have made reasonably diligent
enquiries prior to the date hereof and each Warrantor shall be deemed to
have knowledge of:-
5.5.1 anything of which the other Warrantors have knowledge or are deemed
by this Sub-clause to have knowledge; and
5.5.2 anything of which he ought reasonably to have knowledge given his
particular position in and responsibilities to the Company.
5.6 Each of the Warranties shall also apply in relation to each of the
Subsidiaries as if this Clause and the Fifth Schedule had been set out
again herein in extenso in relation to each of the Subsidiaries with the
substitution therein mutatis mutandis of references to each of the
Subsidiaries for the references to "the Company".
5.7 The rights and remedies of the Purchaser in respect of a breach of the
Warranties shall not be affected by Completion by the Purchaser rescinding
or failing to rescind this Agreement or by any other event or matter
whatsoever except a specific and duly authorised written waiver or release
by the Purchaser.
5.8 The Warrantors hereby undertake to the Purchaser that they will forthwith
notify in writing to the Purchaser any fact or circumstance which may arise
or become known to them or any of them after the date of this Agreement and
prior to Completion which is a breach of or inconsistent with any of the
Warranties or which might render any of them untrue or misleading and if so
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requested by the Purchaser use all reasonable endeavours at the cost of the
Company promptly to prevent or remedy the same. For the avoidance of doubt
any matter or thing so notified shall not be deemed a disclosure for the
purposes of qualifying the liability of the Warrantors under this Clause.
5.9 In the event that any matter arises or comes to the notice of the Purchaser
which will or may give rise to any liability on the part of the Warrantors
under, in respect of or in connection with any of the Warranties or if any
Claim for Tax is made against the Purchaser or the Company or any
Subsidiary in respect of which the Purchaser may have a claim against the
Vendors under any provision of this Agreement or Deed of Indemnity the
Purchaser shall give notice in writing to the Warrantors of such fact or
matter or Claim for Tax as soon as reasonably practicable after the
Purchaser becomes aware of the same and shall except in a case where fraud
or wilful default or neglect is alleged (subject to the Purchaser being
fully indemnified and secured to its reasonable satisfaction in respect of
any liability, costs, damages, or expenses which may be incurred thereby by
it and/or the Company and/or the Subsidiaries) take such action as the
Warrantors may reasonably request to defend, settle, compromise or
otherwise deal with such matter or Claim for Tax provided that any action
so requested which would in the reasonable opinion of the Purchaser damage
or adversely affect the continuing business or prosperity of the Company
and/or the Subsidiaries shall not be regarded as "reasonably" requested.
Insofar as it shall be reasonable the Purchaser shall not and shall procure
that the Company and/or the Subsidiaries shall not do any act or thing
which shall admit or assist any such matter or Claim for Tax. If neither of
the Warrantors request the Purchaser to take any such action or if the
Purchaser shall not be indemnified and secured as aforesaid, in either case
within 28 days of the notice given, the Purchaser and/or the Company and/or
the Subsidiaries shall be free to pay or settle the matter or Claim for Tax
in such terms as it or they may in its or their absolute discretion think
fit.
5.10 The Warrantors hereby agree that if any of the Warranties is found to be
untrue or incorrect or if there is any breach of any of the undertakings on
the part of the Vendors contained in Clause 7 then, subject to the
provisions of this Agreement and without restricting the rights of the
18
<PAGE>
Purchaser to rescind this Agreement pursuant to clause 10.1 or to claim
damages on any other basis available to it, the Warrantors will, on demand
by the Purchaser (at the Purchaser's option) either:-
5.10.1 pay to the Purchaser or the Company and/or any Subsidiary (as the
Purchaser shall direct) an amount equal to any deficiency, depletion
of assets or increased liability of the Company and/or such
Subsidiary which arises from such breach of the Warranties or which
would not have arisen but for such breach or which exists and would
not have existed if the Warranty in question had been true and
correct or the undertaking in question had been complied with
together with all reasonable costs and expenses properly and
necessarily incurred or sustained by the Purchaser or the Company
and/or such Subsidiary as a result of such breach; or
5.10.2 pay to the Purchaser an amount equal to the amount by which the
value of the Shares is less than it would have been if such Warranty
had been true and correct or such undertaking has been complied
with, together with all reasonable costs and expenses properly and
necessarily incurred or sustained by the Purchaser as a result of
such breach.
5.11 In the event that the Inland Revenue seek to charge to tax any sums paid
to the Purchaser or the Company under the Deed of Indemnity then the amount
so payable shall be grossed up by such amount as will ensure that after
payment of the tax so charged there shall be left a sum equal to the amount
that would otherwise be payable in respect of such claim or liability.
5.12 The Purchaser hereby agrees and acknowledges that notwithstanding anything
to the contrary contained in this Agreement the Warranties and any other
liabilities of the Vendors arising under this Agreement save those
liabilities arising under the Deed of Indemnity are subject to the
following:-
5.12.1 no claim in respect of the Warranties shall be capable of being made
unless it shall be notified in writing to the Vendors within 18
months from the date hereof and any such claim which may be made
19
<PAGE>
shall (if it has not been previously satisfied settled or withdrawn)
be deemed to be withdrawn at the expiration of 24 months from the
date hereof unless prior to such expiration legal proceedings in
respect thereof shall have been issued and served on the Vendors;
5.12.2 the aggregate liability of the Vendors in respect of all breaches of
the Warranties and otherwise under this Agreement shall not exceed
the Consideration (which for the avoidance of doubt shall comprise
the Initial Consideration and the Deferred Consideration) to the
extent that it has actually been paid/satisfied);
5.12.3 the Vendors shall not be liable in respect of any single claim
brought by the Purchaser for a breach of the Warranties arising out
of a single event or a series of events of the same type if the
liability in respect of such claim would not exceed (Pounds)1,000.
The Vendors shall be liable in respect of any claim for a breach of
the Warranties in respect of which the liability of the Vendor
exceeds (Pounds)1,000 only if the liability of the Vendor for that
claim and all other such claims exceeding (Pounds)1,000 would in
aggregate exceed (Pounds)10,000 and in that event the Vendor shall
be liable for the entirety of the liability and not merely the
excess;
5.12.4 if any matter arises or gives rise to any claim under the Warranties
the Purchaser shall as soon as reasonably practicable after becoming
aware of the same give notice in writing to the Vendors giving
reasonable details of the matter in respect of which the claim is
made and the bona fide estimated liability in respect thereof and
where the claim arises by reason of a claim made against the
Purchaser by a third party;
5.12.5 no claim in respect of any breach or breaches of any of the
Warranties shall be made if (but only to the extent that) provision
or reserve in respect of the matter forming the basis for the claim
has been made in the Accounts; and
20
<PAGE>
5.12.6 the Vendors shall have no liability in respect of any claim under
the Warranties if it would not have arisen but for anything
voluntarily done or omitted to be done after Completion by the
Purchaser or its employees, agents or successors in title in any
such case otherwise than in ordinary course of carrying on the
Business and where the Purchaser knew or ought reasonably to have
been aware that the liability would arise by virtue thereof.
5.13 If the Vendors pay at any time to the Purchaser an amount pursuant to a
claim in respect of the Warranties or under any of the other provisions of
this Agreement and the Purchaser subsequently becomes entitled to recover
from some other person (including insurers) any sum in respect of any
matter giving rise to such claim the Purchaser shall (subject to being
incurred in connected therewith) take all reasonable steps to enforce such
recovery and shall forthwith repay to the Vendor so much of the amount paid
by it to the Purchaser as does not exceed the sum recovered from such other
person less the reasonable costs, expenses and outgoings properly incurred
in connection with such recovery.
5.14 Nothing in this Agreement shall operate to diminish the Purchaser's common
law duty in respect of a breach of the Warranties to mitigate its loss in
respect of matters dealt with in this Agreement.
5.15 Subject to the Purchaser complying with the provisions of Clause 5.13 and
an amount being recovered from the Purchaser's insurers as contemplated
therein the Vendors will forthwith reimburse to the Purchaser the amount
(if any) by which the Purchaser's insurance premia are increased where the
Purchaser can show that such increase is caused by its making a claim
against its insurances so as to comply properly with the provisions of such
clause.
5.16 The Vendors shall be severally liable for half of the final liability of
any claims made under the Warranties.
21
<PAGE>
6. COMPLETION
----------
6.1 Subject to the due satisfaction or waiver of the Conditions completion
shall take place at the offices of the Vendors' Solicitors on the second
Business Day after the due satisfaction or waiver of the last of the
Conditions or at such other place and/or such other date as may be agreed
between the parties whereupon:-
6.1.1 the Vendors shall deliver to the Purchaser:-
6.1.1.1 duly executed transfers of the Shares by the registered
holders thereof in favour of the Purchaser or such other
persons as the Purchaser shall direct together with the
relative share certificates;
6.1.1.2 duly executed transfers by the registered holders thereof
in favour of the Purchaser of the shares in the
Subsidiaries which are not registered in the name of the
Company together with the relative Share Certificates;
6.1.1.3 an engrossment of the Deed of Indemnity executed by them;
6.1.1.4 bank certificates as to the Group's bank balances at the
close of business on the Business Day preceding Completion
and the Bank Indebtedness; a bank reconciliation statement
prepared by the Vendors to show the bank position of the
Group at the close of business on the Business Day
preceding Completion ("the Reconciliation Date") adjusted
as necessary to reflect credits since the Reconciliation
Date to the Completion Date inclusive and a list of
unpresented cheques as at the Reconciliation Date and of
cheques drawn since the Reconciliation Date to the
Completion Date inclusive and of standing orders payable
from the Reconciliation Date to the Completion Date
inclusive together with a warranty from the
22
<PAGE>
Vendors that no other cheques have been drawn by or on behalf
of the Company and that no other bankings have been made
since the Reconciliation Date;
6.1.1.5 such waivers of pre-emptive rights, consents to transfer or
other documents as are required to enable the Purchaser to be
registered as the holder of the Shares;
6.1.1.6 irrevocable powers of attorney (in the approved terms)
executed by each of the holders of the Shares in favour of
the Purchaser or its nominee(s) to enable the Purchaser
(pending registration of the transfers of such shares) to
exercise all voting and other rights attaching to such shares
and to appoint proxies for this purpose;
6.1.1.7 such other documents (including any power of attorney under
which any document required to be delivered under this
Agreement has been executed and any waivers or consents) as
the Purchaser may require to enable the Purchaser or its
nominees to be registered as holders of the Shares;
6.1.1.8 the written resignation of the Group's auditors as auditors
to the Group (without compensation for loss of office or any
other claim save for professional fees for services rendered
prior to the Completion Date) such resignation to contain a
statement by them pursuant to Section 394(1) of the Companies
Act;
6.1.1.9 written confirmation from the Vendors that there are no
subsisting guarantees given by any Group Company in their
favour and that after compliance with Clause 6.1.4 none of
the Vendors will be indebted to any Group Company or vice
versa.
23
<PAGE>
6.1.2 the Vendors shall ensure that a meeting of the Directors of the
Company and each of the Subsidiaries is held at which the following
business is transacted:-
6.1.2.1 the Board of the Company and each of the Subsidiaries shall
be reconstituted as required by the Purchaser;
6.1.2.2 all existing authorities relating to bank accounts of the
Company and each of the Subsidiaries shall be revoked and
authority given to such persons as the Purchaser may
nominate to operate the same;
6.1.2.3 the resignation of the auditors to the Company and each of
the Subsidiaries shall be accepted and the passing of a
Resolution appointing Coopers & Lybrand as auditors;
6.1.2.4 the registered office of the Company and each of the
Subsidiaries shall be changed as required by the Purchaser;
6.1.2.5 the accounting reference date of the Company and each of
the Subsidiaries shall be changed to 31st December;
6.1.2.6 and in the case of the Company only, the Directors shall
approve for registration the transfers mentioned in Sub-
clause 6.1.1.1 above (subject only to such transfers being
duly stamped).
6.1.3 the Vendors shall procure the delivery to or to the order of the
Purchaser as agent for the Company of:-
6.1.3.1 all the statutory books (duly written up to date) and other
books of the Group, their certificates of incorporation
(original and on change of name) and common seals;
24
<PAGE>
6.1.3.2 the title deeds to the Property and all the documents of
title relating to all the assets of the Group unless the
same are held by any person as mortgagee of the same in
which case the Vendors will provide letters from such
persons confirming the documents they hold.
6.1.4 the Vendors shall repay all monies then owing by them to any Group
Company whether due for payment or not;
6.1.5 Philip Francis Shipperlee shall enter into a service agreement with
the Company in the approved terms;
6.1.6 Sheila Frances Shipperlee shall enter into a service agreement with
the Company in the approved terms;
6.1.7 the Purchaser shall:-
6.1.7.1 deliver to the Vendors' Solicitors (who are hereby
authorised by the Vendors to give a valid receipt for the
same) a bankers' draft for the Cash Consideration;
6.1.7.2 procure the issue of the Consideration Shares and deliver
to the Vendors' Solicitors the Share Certificates in
respect thereof in the names of the Vendors and in the
proportions shown against their names respectively in the
Third Schedule;
6.1.7.3 deliver to the Vendors a counterpart of the Deed of
Indemnity duly executed by the Purchaser the Company and
the Subsidiaries.
6.2 If the Vendors are unable to comply with any of their obligations under the
preceding provisions of this Clause 6 on the Completion Date the Purchaser
may:-
25
<PAGE>
6.2.1 defer Completion to a date not more than 28 days after the said date
(and so that the provisions of this Clause 6 shall apply to
Completion as so deferred); or
6.2.2 proceed to Completion so far as practicable but without prejudice to
the Purchaser's rights (whether under this Agreement generally or
under this Clause) to the extent that the Vendors have not complied
with their obligations thereunder; or
6.2.3 rescind this Agreement.
6.3 The Purchaser shall use best endeavours to procure the release of the
Guarantees within 30 days of the Completion Date PROVIDED THAT the
obligation of the Purchaser under this Clause 6.3 shall not oblige the
Purchaser or any third party to incur a liability in excess of
(Pounds)200,000.
7. UNDERTAKINGS BY THE VENDORS
---------------------------
7.1 The Vendors hereby undertake to the Purchaser that from the date hereof to
the Completion Date (inclusive) they shall cause the business and affairs
of the Group to be conducted in the ordinary course of business in
consultation with the Purchaser and that no transaction outside the
ordinary course of business is carried out without the prior written
consent of the Purchaser. For the purpose of this Clause 7.1 the expression
"the ordinary course of business" shall mean the conduct and operation of
the business of the Group in the usual regular and ordinary manner in which
the same was conducted and operated prior to the date hereof. To the extent
consistent with such operation the Vendors shall use all reasonable
endeavours to maintain and preserve the present business organisation of
the Group intact preserving and maintaining the Group's present
relationships with clients, the media, suppliers and other persons having
dealings or relations with the Group and following the Group's usual and
ordinary accounting practices and methods, making ordinary accruals
incurring ordinary liabilities and expenditures and making ordinary
contract commitments for capital additions and replacements, merchandise,
insurance, rentals and other ordinary expenses.
26
<PAGE>
7.2 Notwithstanding anything to the contrary or inconsistent contained above in
this Clause 7, during the period from the date hereof to the Completion
Date (inclusive) the Vendors shall procure that unless the Purchaser has
given its prior written consent the Group will not:-
7.2.1 undertake any business which is new to it in nature;
7.2.2 make any commitment in the name or on behalf of the Purchaser;
7.2.3 dismiss or in any way change the remuneration or terms of employment
of any director, employee or secretary of the Group;
7.2.4 enter into any agreements or exercise any options for the
acquisition of any land or interest in land or enter into any
agreement for the sale of any land or interest in land;
7.2.5 make any commitment involving material capital expenditure by the
Group and for the purposes of this sub-clause "material" shall mean
in excess of (Pounds)1,000 in aggregate;
7.2.6 create any mortgage charge or other encumbrance over any of the
property or assets of the Group nor repay in whole or in part any
loan;
7.2.7 (save in pursuance of this Agreement) modify any of the rights
attached to any shares in the Company or create or issue any shares
or grant or agree to grant any option over any shares or uncalled
capital of the Company or issue any obligations convertible into
shares;
7.2.8 capitalise or repay any amount standing to the credit or any reserve
of the Company or redeem or purchase any shares or undertake any
other reorganisation of the share capital of the Company;
27
<PAGE>
7.2.9 admit any person (other than a party to this Agreement) whether by
subscription or transfer or transmission as a member of the Company;
7.2.10 sell or dispose of any part of the undertaking or the assets of the
Group;
7.2.11 declare or pay any dividend or other distribution;
7.2.12 alter the Memorandum or Articles of Association of the Company
and/or any Subsidiary;
7.2.13 give any guarantee or indemnity;
7.2.14 acquire any shares of any other company or participate in any
partnership or joint venture;
7.2.15 borrow any money; or
7.2.16 appoint any person as a director or senior executive of the Company
or any Subsidiary or engage any person as a consultant to the
Company or any Subsidiary
7.3 The Vendors shall not permit any company within the Group to pass any
resolution in general meeting
8 DEFERRED CONSIDERATION
----------------------
8.1 If the:
8.1.1 IMR (UK) Accounts show a Net Profit of less than (Pounds)197,940; or
8.1.2 the Completion Accounts disclose Net Assets of less than
(Pounds)200,000
28
<PAGE>
then the Deferred Consideration shall be reduced by the sum of (Pounds)1
for every (Pounds)1 by which (a) the Net Profit of IMR (UK) in the IMR (UK)
Accounts is less than (Pounds)197,940 and (b) the Net Assets disclosed in
the Completion Accounts are less than (Pounds)200,000.
8.2 The Deferred Consideration reduced (if appropriate) in accordance with the
provisions of clause 8.1 shall be paid by the Purchaser to the Vendors'
solicitors (who are hereby authorised on behalf of the Vendors to give a
valid receipt therefor) on the first anniversary of the Completion Date.
Time shall be of the essence in relation to such payment.
9. RESTRICTION ON DISPOSAL OF SHARES
---------------------------------
Each of the Vendors hereby undertakes and agrees with the Guarantor that
without the prior written agreement of the Guarantor, which it shall be
under no obligation to give:-
9.1 for a period of 12 months following Completion neither of them will in
any manner dispose of or deal with any of the Consideration Shares
allotted to him hereunder;
9.2 they will afford to such stockbrokers then acting as stockbrokers to
the Guarantor or such other stockbrokers as the Guarantor may nominate
a reasonable opportunity to effect any disposal of any of the
Consideration Shares and will effect such disposal through the
Guarantor's stockbrokers provided only that they are able to offer the
best price obtainable failing which they shall be free to effect any
disposal of any such shares to a higher bidder;
Provided Always That, in the event of a general offer being made for the
issued share capital of the Guarantor and such offer becoming unconditional
in all respects the Vendors shall be at liberty (notwithstanding anything
else in this Agreement) to dispose of or deal with any of the Consideration
Shares in any manner and at any time he thinks fit without reference to the
Guarantor or the Guarantor's stockbrokers.
29
<PAGE>
10. TERMINATION
-----------
10.1 If after the date of this Agreement but before Completion any of the
Warranties is breached in any material respect then the Purchaser shall
have the right by notice in writing given to the Vendors to rescind this
Agreement.
10.2 After Completion, the Purchaser shall not be entitled to rescind this
Agreement and acknowledges that its remedies shall lie in damages only.
11. GUARANTEE AND UNDERTAKING
-------------------------
11.1 The Guarantor hereby irrevocably and unconditionally, as primary obligor,
undertakes and guarantees the full, prompt and complete performance by the
Purchaser of all its obligations under this Agreement and the due and
punctual payment of all sums now or subsequently payable by the Purchaser
or to the Vendors under this Agreement when the same shall become due and
undertakes with the Vendors that if the Purchaser shall default in the
payment of any sum under this Agreement the Guarantor will forthwith on
demand by the Vendors pay such sum to the Vendors.
11.2 The guarantee contained in Sub-clause 11.1 is a continuing guarantee and
shall remain in force until all the obligations of the Purchaser under this
Agreement have been fully performed and all sums payable by the Purchaser
have been fully paid.
11.3 The obligations of the Guarantor shall not be affected by any act,
omission, matter or thing which, but for this provision, might operate to
release or otherwise exonerate the Guarantor from its obligations or affect
such obligations, including without limitation and whether or not known to
the Guarantor:-
11.3.1 any time, indulgence, waiver or consent at any time given to the
Purchaser or any other person;
11.3.2 any compromise or release of or abstention from perfecting or
enforcing any right or remedies against the Purchaser or any other
person;
30
<PAGE>
11.3.3 any legal limitation, disability, incapacity or other circumstances
relating to the Purchaser or any other person or any amendment to or
variation of the terms of this Agreement or any other document
referred to in this Agreement;
11.3.4 any irregularity, unenforceability or invalidity of any obligations
of the Purchaser under this Agreement, or the dissolution,
amalgamation, reconstruction or insolvency of the Purchaser.
11.4 The guarantee contained in Sub-clause 11.1 may be enforced by the Vendors
without the Vendors first taking any steps or proceedings against the
Purchaser.
11.5 All payments to be made by the Guarantor shall be made in full without
set-off or counterclaim and free and clear and without any deduction
whatsoever except to the extent required by law.
12. MISCELLANEOUS
-------------
12.1 Each party hereto shall execute and deliver to any other party hereto such
other instruments as may be required in connection with the performance of
this Agreement and the consummation of the transactions contemplated
hereby.
12.2 No variation of this Agreement or any of the forms agreed under this
Agreement shall be valid unless it is in writing and signed by or on behalf
of each of the parties.
12.3 Any right of rescission conferred upon the Purchaser hereby shall be in
addition to and without prejudice to all other rights and remedies
available to it and no exercise or failure to exercise any right hereunder
shall constitute a waiver by either of the parties of any such right of
remedy.
12.4 Notwithstanding any rule of law or equity to the contrary, any release,
waiver or compromise or any other arrangement of any kind whatsoever which
the Purchaser may agree to or effect as regards any of the Vendors in
31
<PAGE>
connection with this Agreement and in particular the Warranties shall not
affect the rights and remedies of the Purchaser as regards any other party
hereto or its rights and remedies against the party in whose favour the
release, waiver, compromise or other arrangement is granted or made, except
(in any event) to the express extent of the release, waiver, compromise or
other arrangement.
12.5 This Agreement shall, where the context so permits, be binding upon and
enure for the benefit of the personal representatives of or the successors
in title to the parties hereto.
12.6 This Agreement may be executed in any number of counterparts and by the
several parties hereto in separate counterparts, each of which when
executed and delivered shall be an original, but all the counterparts shall
together constitute one and the same instrument.
13. CONFIDENTIALITY
---------------
For the purpose of assuring to the Purchaser the full benefit of the
business and goodwill of each company in the Group and in consideration of
the agreement of the Purchaser to buy the Shares on the terms hereof the
Vendors hereby agree with the Purchaser and its successors in title as a
separate and independent agreement that they will not at any time hereafter
divulge or communicate to any person other than to officers, employees or
professional advisers of the Company whose position makes it necessary to
know the same or to the Purchaser or its officers, employees or
professional advisers any confidential information concerning the business,
accounts, financial or contractual arrangements or other dealings,
transactions or affairs of any company in the Group which may be within or
which may come to their knowledge, that they will use their best endeavours
to prevent the publication or disclosure of any confidential information
concerning such matters or any of them and that they will not do anything
to harm the goodwill of any company in the Group as at the date hereof.
14. ANNOUNCEMENTS
-------------
No announcement or circular or written statement to employees/suppliers
relating to any matter referred to in this Agreement shall after the date
hereof be made or issued without the prior written approval of both parties
32
<PAGE>
and shall be in an agreed form provided that neither party shall be
prevented from making any announcement required by NASDAQ or otherwise as
required by law.
15. COSTS
-----
15.1 Each of the parties to this Agreement shall bear its own costs of the
negotiation, making and fulfilment of this Agreement and the sale and
purchase hereby agreed to be made and (for the avoidance of doubt) no costs
relating thereto or to any matters contained or referred to in this
Agreement shall be payable by the Company or the Subsidiaries. However if
the Purchaser shall lawfully exercise:
15.1.1 the right hereby conferred to rescind this Agreement pursuant to
Clause 2.3 the Vendors shall jointly and severally indemnify the
Purchaser against all reasonable expenses and costs incurred in
investigating the affairs of the Group and in the preparation and
negotiation of this Agreement and such other documents as referred
to herein;
15.1.2 the right hereby conferred to rescind this Agreement pursuant to
Clause 10.1 the Purchaser shall save where the right under clause
10.1 has arisen by reason of the act or default of the Vendors
indemnify the Vendors against all reasonable expenses and costs
incurred in the preparation and negotiations of this Agreement and
such other documents as referred to herein.
16. NON-MERGER ON COMPLETION
------------------------
16.1 Notwithstanding completion of the sale and purchase of the Shares, this
Agreement shall remain in full force and effect with regard to the
Warranties and the obligations on either side not performed or fulfilled
before or at Completion.
17. SEVERABILITY
------------
If at any time any provision of this Agreement (or of any document referred
to herein) is or becomes illegal, invalid or unenforceable the legality,
33
<PAGE>
validity and enforceability of the remaining provisions of this Agreement
(or such document) shall in no way be affected or impaired thereby.
18. ENTIRE AGREEMENT
----------------
18.1 It is hereby agreed that this Agreement (together with the documents
referred to herein) constitutes the entire understanding between the
parties hereto in connection with the subject matter hereof and there are
no representations, promises, terms, conditions, warranties, undertakings
or obligations oral or written, express or implied, other than those
contained herein and supersede any and all other agreements in which the
parties may have entered in connection with the subject matter hereof.
18.2 Each of the parties hereto confirms that, in agreeing to enter into this
Agreement, it or he has not relied on any representation, warranty or
undertaking except those contained in this Agreement and the Disclosure
Letter.
19. NOTICES
-------
19.1 Any notice or other communication to be given hereunder shall either be
delivered personally or sent by first class post. The address for service
of each of the parties hereto shall be the address given herein or such
other address as the party to be served may have previously notified from
time to time to the other party. In the case of notices or other
communication to be given to the Purchaser hereunder a copy shall be
delivered to the Purchaser's Solicitors (ref DPM). All notices shall be
deemed to have been served as follows:-
19.1.1 if personally delivered, at the time of delivery;
19.1.2 if posted, at the expiration of 72 hours after the envelope
containing the same was delivered into the custody of the postal
authorities and shall be effective notwithstanding that it may be
misdelivered or returned undelivered;
34
<PAGE>
PROVIDED that, in the case of delivery by hand such delivery shall occur
before 6 p.m. on a business day
19.2 In proving service, it shall be sufficient, in the case of a notice sent
by pre-paid post, that the envelope containing the same was properly
stamped, addressed and placed in the post.
20. GOVERNING LAW
-------------
This Agreement (and all documents referred to herein) shall be governed by
English law and each of the parties hereto submits to the non-exclusive
jurisdiction of the English Courts.
AS WITNESS the hands of the parties hereto or their duly authorised
representatives the day and year first above written
35
<PAGE>
THE FIRST SCHEDULE
------------------
THIS DEED is made the day of 1997
BETWEEN:-
(1) THE PERSONS whose names and addresses are set out in Part I of the Appendix
hereto (hereinafter together called "the Covenantors");
(2) GENEPAD LIMITED (Company No. 3290026) whose registered office is at Link
House St Mary's Way Chesham Buckinghamshire HP5 1HR ("the Purchaser");
(3) LINK GROUP HOLDINGS LIMITED (Company No. 2972297) whose registered office is
at Holborn Hall, 100 Grays Inn Road, London, WC1X 8BY ("the Company");
(4) THE COMPANIES whose names and registered offices are set out in Part II of
the Appendix hereto ("the Subsidiaries");
WHEREAS by an agreement (hereinafter called "the Agreement") dated [ ]
1997 and made between the Covenantors of the one part and the Purchaser of
the other part the Covenantors agreed to sell and the Purchaser agreed to
purchase the whole of the issued share capital of the Company.
1. INTERPRETATION
--------------
1.1 Words and expressions defined in the Agreement shall apply to this Deed as
if the same had been set out herein in full including for the avoidance of
doubt "Accounts", "Balance Sheet Date", "Claim for Tax", "Completion",
"Event", "Relief", "Tax", "Taxation", "Tax Authority" and "Tax Legislation"
and rules of interpretation contained in the Agreement shall apply to this
Deed as if the same had been set out herein.
1.2 References in this Deed to "Tax Liability" shall include any liability to
or in respect of any Tax and shall also include:-
36
<PAGE>
1.2.1 the loss or setting off in whole or in part against income, profits
or gains or against any liability to Tax of any Relief which would
but for the said loss or setting-off have been available to the
Company and/or the Subsidiaries;
1.2.2 the nullifying or cancellation of a right to repayment of Taxation
which would (were it not for the nullifying or cancellation) have
been so available;
1.2.3 the setting off in whole or in part against income, profits or gains
earned, accrued or received or Taxation thereon of any Relief which
arises as a result of an Event after Completion in circumstances
where in the absence of such setting off, the Company and/or the
Subsidiaries would have had an actual liability to Taxation in
respect of which a claim could have been made against the
Covenantors under this Deed;
and in such a case the amount of Taxation which would otherwise have been
relieved, allowed or credited by the Relief so lost or the amount of
repayment which would otherwise have been obtained or in the case of a set
off in whole or in part of any Relief, the amount of Taxation saved
thereby, shall be treated as an amount of Taxation for which a liability
has arisen;
1.2.4 any capital transfer tax or inheritance tax which either:-
1.2.4.1 is at the date hereof by virtue of Section 237 of the
Inheritance Tax Act 1984 a charge on any of the shares or
assets of the Company or any of the Subsidiaries; or
1.2.4.2 at the date hereof by virtue of Section 212 of the
Inheritance Tax Act 1984 gives rise to a power of sale
mortgage or charge over any of the shares or assets of the
Company or any of the Subsidiaries; or
37
<PAGE>
1.2.4.3 after the date hereof becomes a charge on or gives rise to
a power of sale over any of the shares or assets of the
Company or any of the shares of assets of the Company or
any of the Subsidiaries
and, in determining whether such a charge on or such a power over
any of the shares or assets of the Company or the Subsidiaries
exists at any time, the fact that any capital transfer tax or
inheritance tax is not yet payable or may be paid by instalments
shall be disregarded and the total liability for such tax shall be
treated as falling due, and a charge or power of sale as arising in
relation to that total liability, on the date of the chargeable
transfer in respect of which such tax becomes payable or arises and
the provisions of Section 213 of the Inheritance Tax Act 1984 shall
not apply thereto.
1.3 Reference to income or profits or gains earned, accrued or received shall
include income or profits or gains deemed to have been or treated as or
regarded as earned, accrued or received for the purposes of any legislation
and references to the occurrence of Events on or before a particular date
or in respect of a particular period shall include Events or circumstances
which are for the purposes of any legislation deemed to have been or
treated or regarded as having occurred or existed at or before that date or
in respect of that period.
1.4 Reference to the result or occurrence of any Event on or before the date
hereof shall include the combined result of two or more Events the first of
which shall have taken place or pursuant to Clause 1.3 shall be deemed to
have taken place on or before the date hereof.
1.5 Reference to statutory provisions shall be construed as references to those
provisions as respectively amended or re-enacted or as their operation is
modified by other provisions (whether before or after the date hereof) and
shall include any provisions of which they are re-enactments (whether with
or without modification).
1.6 The headings are inserted for convenience only and shall not affect the
construction of this Deed.
38
<PAGE>
1.7 References to the "Company" shall mean and include references to the
Company and each of the Subsidiaries separately as if each Subsidiary was
referred to expressly in place of the Company.
2. INDEMNITIES BY THE COVENANTORS
------------------------------
2.1 Subject to Clause 3 of this Deed the Covenantors hereby jointly and
severally covenant to indemnify and to keep indemnified the Purchaser
against:-
2.1.1 any Tax Liability of any one or more of the Company and the
Subsidiaries arising as a result of or by reference to any
income, profits or gains earned, accrued or received on or
before the date hereof or any Event or deemed Event occurring
on or before the date hereof whether alone or in conjunction
with other circumstances and whether or not such Taxation is
chargeable against or attributable to any other person, firm or
company;
2.1.2 all reasonable costs and expenses properly payable by the
Purchaser, or any one or more of the Company and the
Subsidiaries in connection with any Claim for Taxation or Tax
Liability; and
2.1.3 any tax liability arising in relation to reimbursement by the
Company and/or any of the Subsidiaries of expenses to its
employees.
3. LIMITATION
----------
3.1 The Covenantors shall not incur liability under this Tax Deed by reason of
any liability to make any payment of Taxation imposed or sought to be
imposed on the Company or the Subsidiaries and/or the Purchaser:-
3.1.1 to the extent that specific provision or reserve in respect thereof
was made in the Accounts (or any audited accounts of the
Subsidiaries) ;
3.1.2 to the extent that provision or reserve was made in the Accounts but
is insufficient only by reason of any increase in the rates of
Taxation or as a result of any change in law made after Completion
with retrospective effect;
3.1.3 for which the Company any of the Subsidiaries or the Purchaser is or
may become liable as a result of transactions entered into by the
Company or the Subsidiaries in the ordinary course of Business after
the Balance Sheet Date;
3.1.4 if it is a Claim for Taxation or Tax Liability which would not have
arisen but for a voluntary act or omission which could reasonably
have been avoided or carried out by the Purchaser the Company or any
of the Subsidiaries after the date hereof otherwise than in the
ordinary course of business;
3.1.5 to the extent that details have been disclosed to the Purchaser in
the Disclosure Letter;
3.1.6 to the extent that there is any over provision in the Accounts for
contingent liabilities that has, by the time of the Claim been
proved to be an over provision
3.2 No Claim for Taxation or Tax Liability shall be made under this Deed unless
the said claim is notified in writing to the Covenantors in the manner
provided for herein before 7th February 2003.
3.3 The Covenantors shall be severally liable to pay half each of any Tax
Liability under this Deed.
4. CONDUCT OF CLAIMS
-----------------
The provisions of Clause 5.9 of the Agreement shall be deemed to be
repeated herein save that references to the Warrantors shall be construed
as references to the Covenantors.
39
<PAGE>
5. PAYMENT OF CLAIMS
-----------------
5.1 Payments by the Covenantors pursuant to Clause 2 shall be made on the day
or dates as follows:-
5.1.1 if the Tax Liability which is the subject of a claim under this Deed
involves an actual payment of Taxation by the Company, three
Business Days before the date on which that Taxation becomes due and
payable to the relevant Taxation Authority;
5.1.2 if the Tax Liability which is the subject of a claim under this Deed
does not involve an actual payment of Taxation but involves:-
5.1.2.1 the denial or loss of set off in whole or in part of a
right to repayment of Taxation, the date on which such
Taxation would otherwise have been repaid;
5.1.2.2 the denial or loss in whole or in part of any Relief, the
date on which the Taxation, that would otherwise have been
saved, becomes due and payable to the relevant Taxation
Authority;
5.1.2.3 the set off in whole or in part of any Relief which arises
as a result of an Event after Completion which but for such
setting-off a claim could have been made against the
Covenantors under this Deed the date on which the Taxation
saved thereby would otherwise have become due and payable
to the relevant Taxation Authority;
5.1.3 in the case of sums payable pursuant to Clause 2.1.2, three Business
Days after the date on which the Company and/or the Subsidiaries
and/or the Purchaser makes demand therefor.
40
<PAGE>
5.2 If any amount is not paid as provided in Clause 5.1 the Covenantors shall
pay to the Purchaser interest on such amount calculated on a daily basis at
the rate of four per cent. per annum above the base rate of National
Westminster Bank PLC for the time being in force from the relevant date
specified in Clause 5.1 until and including the date of actual payment
(after as well as before judgement).
6. GROSSING UP
-----------
6.1 All sums payable by the Covenantors under this Deed shall be paid free and
clear of all deductions or withholdings whatsoever.
6.2 If any amount paid or due to the Purchaser hereunder gives rise to any Tax
Liability in the hands of the Purchaser then the amount so paid or due
("the net amount") shall be increased to an amount ("the grossed-up
payment") which (after subtraction of the amount of any Tax Liability which
arises in the hands of the Purchaser with respect to the grossed-up
payment) shall equal the net amount, provided that if any payment is
initially made on the basis that the amount due is not taxable in the hands
of the Purchaser and it is subsequently determined that it is, or vice
versa, such adjustments shall be made between the Purchaser and the
Covenantors as may be required in order to restore the after-tax position
of the Purchaser to that which it would have been had the adjustment not
been necessary.
7. MISCELLANEOUS
-------------
7.1 This Deed shall be binding upon and enure for the benefit of the personal
representatives of or the successors in title to the parties hereto. This
Agreement is personal to the Vendors who may not assign it or any rights
herein, or delegate or subcontract the performance of any of its
obligations hereunder, except with the Purchaser's prior written consent.
The Purchaser may assign the benefit of all but not part of this Agreement
and the Deed of Indemnity to any person or body corporate to which the
Shares are transferred and any such company or person may enforce such
benefit as if named in this Agreement as the Purchaser.
41
<PAGE>
7.2 Each party hereto shall execute and deliver to any other party hereto such
other instruments as may be required in connection with the performance of
this Deed.
7.3 For the avoidance of doubt the covenants contained herein shall be
enforceable before as well as after any payment made pursuant to this Deed
has been made and if at any time any provision contained herein is or
becomes illegal, invalid or unenforceable the legality, validity and
enforceability of the remaining provisions herein shall not in any way be
affected or impaired thereby.
7.4 The following provisions of the Agreement shall apply to this Deed of
Indemnity as if the same had been set out herein save that references
therein to the Vendors, their addresses and the Agreement respectively
shall be construed as references to the Covenantors, their addresses given
herein, this Deed:-
7.4.1 Clause 12.2 Variation;
7.4.2 Clause 12.3 Waiver;
7.4.3 Clause 12.4 Notices;
7.4.4 Clause 20 Governing Law.
7.5 Any payment by the Covenantors under this Deed shall be treated pound for
pound as a reduction in the Consideration pursuant to the Agreement.
IN WITNESS whereof this Deed has been entered into the day and year first above
written
42
<PAGE>
THE APPENDIX
Part I
(Covenantors)
Philip Francis Shipperlee
Sheila Frances Shipperlee
both of 37 St. Leonards Road, Chesham Bois, Amersham, HP6 6DT.
Part II
(Subsidiaries)
<TABLE>
<CAPTION>
No.
-------
<S> <C>
Link Associates Limited 3214826
Link Workgroup Solutions Limited 2934883
Link Group Limited 1499718
Contracts Link Limited 2458669
registered office of which is Holborn Hall, 100 Grays Inn Road, London, WC1X 8BY
</TABLE>
43
<PAGE>
THE SECOND SCHEDULE
-------------------
Part I
Names of the Directors
----------------------
Philip Francis Shipperlee
Sheila Frances Shipperlee
Part II
Resignation letters
-------------------
The Directors
[Link Group Holdings Limited ("the Company")/Subsidiary]
Dear Sirs
I hereby resign as director/secretary of the [Company/Subsidiary] and I confirm
that I have no claims of whatsoever nature outstanding against the
[Company/Subsidiary] whether by way of compensation for loss of office
remuneration, redundancy, unfair dismissal, damages or otherwise and I hereby
release any such claims which may exist.
Dated 1997
SIGNED as a DEED by )
the said [ ] )
in the presence of:- )
44
<PAGE>
THE THIRD SCHEDULE
------------------
Shareholdings in the Company
----------------------------
<TABLE>
<CAPTION>
Deferred
Amount of Cash No. of Consideration
Name and Address of Ordinary Shares of Consideration Consideration Shares (subject to the terms hereof)
Shareholder (Pounds)1 each (Pounds) % (Pounds)
- -------------------- -------------------- ------------- -------------------- ----------------------------
<S> <C> <C> <C> <C>
PHILIP FRANCIS SHIPPERLEE 500 625,000 50 500,000
37 St. Leonards Road,
Chesham Bois,
Amersham,
Bucks, HP6 6DT.
SHEILA FRANCES 500 625,000 50 500,000
SHIPPERLEE
37 St. Leonards Road
aforesaid
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
45
<PAGE>
THE FOURTH SCHEDULE
-------------------
Particulars of the Property
---------------------------
Link House
St. Mary's Way,.
Chesham,
Buckinghamshire,
HP5 1HR.
Held under Lease dated 16th June 1988 made between (1) Trentham Developments
Limited and (2) Link Associates Limited for 25 years from 25th March 1988 at
annual rent of (Pounds)165,000 subject to review every five years (rent agreed
at 25th March 1993 to remain as (Pounds)165,000).
46
<PAGE>
THE FIFTH SCHEDULE
------------------
Warranties
----------
A. INFORMATION
-----------
All information contained or referred to in this Agreement and the Disclosure
Letter and all information given in writing in relation to the financial
position and prospects of the Company by any of the Vendors, or by any of the
directors or by any of the Vendors' advisers (including without limitation
the Vendors' Solicitors and the Company's accountants) to the Purchaser or to
any of the directors of the Purchaser or to any of the Purchaser's advisers
(including without limitation the Purchaser's Solicitors and the Purchaser's
accountants) at any time prior to the execution of this Agreement is true and
accurate in all material respects and insofar as such information was
expressed as a matter of opinion such opinion was truly and honestly held and
not given casually or recklessly or without due regard for its accuracy.
B. CONSTITUTION OF THE COMPANY
---------------------------
1. The Company is duly organised and validly existing under English law and is
not in receivership or liquidation.
2. The Company has an issued share capital of (Pounds)1,000 divided into 1,000
Ordinary Shares of (Pounds)1 each, all of which are registered in the names
of and beneficially owned by the Vendors in the proportions set out in the
Third Schedule free from all liens, charges and encumbrances or interests in
favour of any other person or any agreement or commitment to give or create
any such lien, charge, encumbrance or interest.
3. The copies of the Memorandum and Articles of Association of the Company
supplied to the Purchaser's Solicitors are true and complete in all material
respects and have embodied therein or have annexed thereto a copy of every
resolution or agreement referred to in Section 380(2) of the Companies Act.
47
<PAGE>
4. No person has the right (whether exercisable now or in the future and whether
contingent or not) at any time to call for the allotment, issue, sale or
transfer of any share or loan capital of the Company under any option or
other agreement (including conversion rights).
5. The Company has where appropriate complied with the provisions of the
Companies Act (and the previous Acts which it replaced) and all returns,
particulars, resolutions and other documents required under any legislation
to be delivered on behalf of the Company to the Registrar of Companies or to
any other authority whatsoever have been properly made and delivered.
6. No shares in the capital of the Company have been issued and no transfer of
shares in the capital of the Company has been registered otherwise than in
accordance with the Articles of Association of the Company from time to time
in force, all such transfers being duly stamped.
7. The Company has not at any time purchased or redeemed or agreed to purchase
or redeem any shares of any class of its share capital or otherwise reduced
or agreed to reduce its issued share capital or any class thereof.
8. The Company has not exercised or purported to exercise any liens over any of
its issued share capital.
C. ACCOUNTS
--------
1. The copy of the Accounts annexed to the Disclosure Letter is a true and
complete copy and the Accounts and all earlier audited accounts of the
Company preceding the Balance Sheet Date have been certified by the
preparing accountants to have been prepared in accordance with the
requirements of all relevant statutes and generally accepted accountancy
principles consistently applied for companies carrying on a similar business
to that of the Company and are true and accurate in all material respects
and show a true and fair view of the assets and liabilities of the Company
at the relevant balance sheet date and the profits for the relevant period
ended on such date.
48
<PAGE>
2. So far as the Warrantors are aware full provision or reserve has been made
in the Accounts for bad and doubtful debts and for all liabilities and
capital commitments of the Company outstanding at the Balance Sheet Date
whether actual, contingent, quantified, disputed or not.
3. Full provision has been made in the Accounts for depreciation, amortisation
and any foreseeable losses.
4. So far as the Warrantors are aware none of the values placed in the Accounts
on the assets of the Company was in excess of the market value thereof
current at the Balance Sheet Date.
5. The work-in-progress shown in the Accounts has been valued on a basis
excluding profit and including adequate provision for losses which are or
could reasonably be expected on uncompleted contracts and on completed
contracts in respect of which the maintenance period is unexpired.
6. The Accounts are not adversely affected by any extraordinary or non-
recurring items unless expressly stated therein.
7. Of the plant, machinery, fixtures, fittings, equipment, vehicles, furniture,
materials and other assets included in the Balance Sheet or acquired by the
Company since the Balance Sheet Date none has been acquired other than on a
normal arms length basis.
8. For the purposes of the Accounts the Company's assets have been valued on a
basis in all material respects consistent with those adopted for the purpose
of the audited accounts of the Company in respect of the beginning and end
of each of the last three preceding accounting periods and the bases and
policies of accounting of the Company adopted for the purpose of preparing
the Accounts are the same as those adopted for the purpose of preparing the
audited accounts for such periods.
49
<PAGE>
9. So far as the Warrantors are aware the management accounts of the Company
(which have not been prepared or considered by the Company's auditors) for
periods since the Balance Sheet Date (copies of which are annexed to the
Disclosure Letter) have been prepared by the Company with due care and
attention, and show an accurate view of the state of affairs and profit or
loss of the Company as at and for the period in respect of which they have
been prepared.
10. So far as the Warrantors are aware all proper and necessary books of
account, minute books and registers and records have been maintained
properly and accurately by the Company and are in its possession and contain
full information in accordance with generally accepted accounting principles
relating to all transactions to which the Company has been a party and are
true and accurate records of the matters to which they relate.
D. BUSINESS
--------
1. Since the Balance Sheet Date the Company has carried on its business
prudently and in the ordinary and usual course and so as to maintain the
same as a going concern.
2. Since the Balance Sheet Date the Company has not entered into any
transaction, assumed any liability (including contingent liabilities) or
made any payment or agreed to enter into, assume or make any such
transaction, liability or payment which is not in the ordinary course of
business and has not entered into or agreed to enter into any commitments
involving capital expenditure in excess of (Pounds) 5,000.
3. So far as the Warrantors are aware since the Balance Sheet Date there has
been no interruption or alteration in the nature, scope or manner of the
Company's business and there has been no material adverse change in the
business, financial position or prospects of the Company.
50
<PAGE>
4. Since the Balance Sheet Date the Company has paid its creditors in the
ordinary course of business and within the normal terms of business of those
creditors and there are no debts payable by the Company which have been due
for more than six weeks.
5. No supplier has ceased or restricted supplies or threatened so to do and
there has been no loss or material curtailment of the business transacted by
the Company or any variations of the terms of trade to the Company's
disadvantage with any customer which at any time in the period of 12 months
ended on the Balance Sheet Date or subsequently represented a significant
part of the turnover of the Company.
E. ASSETS AND CHARGES
------------------
1. Except for assets disposed of in the ordinary course of business the Company
is the owner of and has good marketable legal and beneficial title to all
assets included in the Accounts and all assets which have been acquired by
the Company since the Balance Sheet Date.
2. There is not now outstanding any charge, lien or encumbrance or any
agreement or commitment to give or create any charge, lien or encumbrance or
any hire purchase agreement, leasing agreement or agreement for payment on
deferred terms over the whole or any part of the Properties or the
undertaking, property or assets of the Company.
3. The Company is in actual possession of all its assets including without
limitation all plant, machinery, fixtures, fittings, equipment, vehicles,
furniture, materials and stock.
4. The Company is now and will pending Completion remain the owner of and has
now and will at Completion have an absolute unencumbered title to all fixed
and loose plant, equipment, materials, parts, vehicles, assets and personal
property (hereinafter together referred to as "plant and equipment") used in
connection with its business or any part thereof and free from any credit
sale, conditional sale or hire purchase agreement or agreement reserving
title to any other person, firm or company or for payment on hiring or
deferred terms.
51
<PAGE>
5. All title deeds agreements share certificates and other instruments to which
the Company is a party and all other documents owned by the Company are in
the possession of the Company.
F. DISTRIBUTIONS AND LOAN REPAYMENTS
---------------------------------
1. Since the Balance Sheet Date no distribution of capital or income has been
declared, made or paid in respect of any share capital of the Company and
(excluding fluctuations in overdrawn current accounts with bankers) no loan
or loan capital of the Company has been repaid in whole or part or has
become liable to be repaid.
2. All dividends or distributions declared, made or paid by the Company have
been declared, made or paid in accordance with its Articles of Association
and the applicable provisions of the Companies Act.
G. DEBTS
-----
1. So far as the Warrantors are aware all debts owed to the Company will
realise their full face value or the amount at which they have been included
in the Accounts and be good and collectable in the ordinary course of
business and in any event within three months of Completion, no amount or
amounts included in the Accounts as owing to the Company at the Balance
Sheet Date has been realised for an amount less than the value at which it
was included in the Accounts or is now regarded by the Directors as
irrecoverable in whole or part and the Company does not have outstanding any
loans or financial credit granted by it to any person.
2. The Company is not owed any monies other than trade or other debts incurred
in the ordinary course of business.
52
<PAGE>
H. TRANSACTIONS WITH VENDORS/DIRECTORS/EMPLOYEES
---------------------------------------------
1. There are no outstanding loans due to the Company from, or loans due from
the Company to, any of the Vendors or any other company the issued share
capital of which the Vendors or any of them or any combination of them have
directly or indirectly a beneficial interest exceeding 10% in the aggregate.
2. There are no outstanding loans due to the Company from, or any loans due
from the Company to, the Directors, former directors or employees of the
Company.
3. All salaries, directors' fees, expenses and bonuses (if any) of all
Directors and employees of the Company (save for any amounts disclosed in
the Disclosure Letter) shall be paid up to the Completion Date.
4. The Company has not made any gifts of any kind or sold any property at a
price less than the full market value thereof to the Vendors or the
Directors or to any persons connected with them.
5. The Company has not been a party to any transaction to which any of the
provisions of Section 320 or Section 330 of the Companies Act may apply.
I. LICENCES
--------
So far as the Warrantors are aware all necessary licences consents permits
and authorities (public and private) have been obtained by the Company to
enable it to carry on its business effectively in the places and in the
manner in which such business is now or shall hereafter be carried on and
all such licences consents permits and authorities are valid and subsisting
and none of the Warrantors knows of any reason why any of them should be
suspended cancelled or revoked.
53
<PAGE>
J. LITIGATION
----------
The Company is not engaged in any litigation or arbitration proceedings and
no litigation or arbitration proceedings are so far as the Warrantors are
aware pending or threatened by or against the Company and the Company is not
subject to any order or judgement given by any court or governmental agency
and has not been a party to any undertaking or assurance given to any court
or governmental agency which is still in force and there is no matter or
fact in existence which might form the basis of any criminal prosecution or
civil litigation proceedings against the Company.
K. INSURANCE
---------
1. All premiums due on the policies of insurance have been paid and the
policies together with receipts for the latest premiums are in the
possession of the Company.
2. So far as the Warrantors are aware the Company is now and has at all
material times been adequately covered against accident, damage, injury,
third party loss (including product liability), loss of profits and other
risks normally insured against by persons carrying on the same type of
business.
3. All claims made by the Company under its past and present insurances have
been settled in full by the relevant insurers.
L. INTELLECTUAL PROPERTY RIGHTS
----------------------------
1. Save as disclosed in the Disclosure Letter the Company is not the beneficial
owner of any Intellectual Property.
2. So far as the Warrantors are aware the Company does not infringe nor has it
infringed any right of any other person relating to Intellectual Property
54
<PAGE>
and it does not use confidential information disclosed to it by any person
in circumstances which might entitle that person to a claim against it.
M. FAIR TRADING etc.
-----------------
So far as the Warrantors are aware no agreement or arrangement to which the
Company is a party:-
1. Is or requires to be registered in accordance with the provisions of the
Restrictive Trade Practices Acts 1976 and 1977 or of any other legislation
(British or otherwise) or contravenes the provisions of the Resale Prices
Act 1976.
2. Infringes Article 85 of the Treaty establishing the European Economic
Community or constitutes an abuse of dominant position contrary to Article
86 of the said Treaty or infringes any regulation or other enactment made
under either Article.
3. Infringes any provision of any other legislation (British or otherwise)
relating to promotion of competition or to monopolies or anti-competitive
practices.
4. Is or has been the subject of any enquiry, investigation, reference, report
order or proceeding pursuant to any such statutory or other provision.
5. Is or has been the subject of any undertaking on the part of the Company to
the Restrictive Practices Court or the Director General of Fair Trading or
the President of the Board of Trade or the Commission or Court of Justice of
the European Communities or to any other body of competent jurisdiction.
N. AGREEMENTS
----------
1. The Company is not a party to:-
55
<PAGE>
1.1 any contract for hire or rent, hire-purchase or purchase by way of
credit sale or periodical payment nor any agreement whereby the
Company is or might be bound to repurchase any property at any time
sold by the Company;
1.2 any contract for guarantee, indemnity or suretyship;
1.3 any power of attorney or other contract of agency;
1.4 any contracts for the supply or receipt of services (other than
contracts for the receipt of electricity gas or water or normal office
services);
1.5 any contract with any trade union or body or organisation representing
any of its employees or former employees;
1.6 any partnership, joint venture or consortium arrangement;
1.7 any agreement or arrangement which is liable to be terminated by
another party or under which rights of any person are liable to arise
or be affected as a result of any change in the control management or
shareholders of the Company or on Completion;
1.8 any agreement or arrangement in which any of the following persons are
interested directly or indirectly:-
1.8.1 the Vendors;
1.8.2 any of the Directors;
1.8.3 any spouse or infant child of any of the Vendors or the
Directors;
56
<PAGE>
1.8.4 any trust of which any of the Vendors or the Directors or any
such spouse or child is a trustee or beneficiary or potential
beneficiary;
1.8.5 any company in which any of the Vendors or the Directors or
any such spouse child or trust has any direct or indirect
interest;
1.9 Any contract transaction or liability which is of an unusual or long
term nature or involves or is likely to involve obligations of a
material nature or magnitude;
1.10 So far as the Warrantors are aware any contract which it is incapable
of performing or performance of which is likely to result in a loss to
the Company;
1.11 So far as the Warrantors are aware any agreement or arrangement which
is not entirely on an arms length basis;
1.12 So far as the Warrantors are aware any other agreement not entered into
in the ordinary course of business.
2. There are no outstanding liabilities or commitments of the Company arising
from any arrangements for the disposal of any shares property or other
assets (other than in the ordinary course of business) previously owned by
the Company.
3. The Company has not given any covenants limiting or excluding its right to
do business and/or compete in any area or field with any other person.
4. So far as the Warrantors are aware neither the Company nor any other party
to any agreement, commitment, transaction or arrangement with the Company is
in default to any material extent thereunder and there are no circumstances
likely to give rise to such a default.
57
<PAGE>
5. There are in force no powers of attorney given by the Company and no person
is entitled or authorised (whether as agent or otherwise) to bind or commit
the Company to any obligations outside the ordinary course of the Company's
business.
O. INVESTMENT GRANTS
-----------------
The Company has not applied for, or received, any grant, subsidy or
financial assistance from any government department or agency or any local
or other authority, whether under the Industry Acts, or a regional
development grant, or temporary employment subsidy or otherwise.
P. NEGLIGENT WORK
--------------
So far as the Warrantors are aware no work in connection with the business
of the Company has been executed or undertaken negligently or otherwise in
breach of duty (statutory or otherwise and whether under English or any
other law), or so as to result in the commission of any criminal offence in
any jurisdiction, nor has the Company negligently or in breach or so as to
result as aforesaid failed to undertake or execute any such work, and
nothing has occurred or failed to occur which has given or will or might
give rise to any claim for negligence or other breach of duty or criminal
prosecution in such connection.
Q. LOANS
-----
No loan made by the Company has been made in breach of the Moneylenders Act
1900-27 or the Consumer Credit Act 1974.
R. COMPLIANCE WITH LAWS
--------------------
So far as the Warrantors are aware the Company has conducted its business in
all material respects in accordance with all applicable laws and regulations
58
<PAGE>
of the United Kingdom or any applicable foreign country and there is no
violation of or default with respect to any statute, regulation, order,
decree or judgement of any court or any governmental agency of the United
Kingdom or any foreign country which could have a material adverse effect
upon the assets or business of the Company.
S. DIRECTORS AND EMPLOYEES
-----------------------
1. Details of all the employees of the Company are provided with the Disclosure
Letter and show dates of commencement of employment and terms and conditions
of employment and in particular all remuneration payable and other benefits
now provided or which the Company is bound to provide (whether now or in the
future) to every officer and employee of the Company and include particulars
of all profit sharing incentive and bonus arrangements to which the Company
is a party whether legally binding or not.
2. There are no outstanding claims against the Company by any person who is now
or has been a director officer or employee of the Company or any dispute
between the Company and any of its employees or past employees and no
payments are due by the Company under the provisions of the Employment
Protection (Consolidation) Act 1978 or any other legislation relating to
employment or termination of employment.
3. The particulars shown in Part I of the Second Schedule to the Agreement are
true and complete and no person not named therein as such is a director or
shadow director of the Company.
4. There are no outstanding contracts of service between the Company and any of
its directors officers or employees which are not terminable by the Company
without compensation (other than any compensation payable by statute) on
three month's notice given at any time.
59
<PAGE>
T. PENSIONS
--------
1. Save as disclosed in the Disclosure Letter the Company is not paying and is
under no legal or moral liability or obligation (actual or contingent) or a
party to any ex-gratia arrangement or promise to pay or secure (other than
by payment of employer's contributions under national insurance or social
security legislation) any pensions, gratuities, superannuation allowances or
other benefit on retirement, death or disability or on the attainment of a
specified number of years of service, or otherwise to provide "relevant
benefits" within the meaning of Section 612 ICTA to or for any of its past
or present officers or employees or their dependants; and there are no
retirement benefit, or pension or death benefit, or similar schemes or
arrangements in relation to or binding on the Company or to which the
Company contributes.
U. FINANCE
-------
1. The total amount borrowed by the Company from its bankers does not exceed
the limits applicable to its facilities and the total amount borrowed by the
Company from whatsoever source does not exceed any limitation on its
borrowing powers contained in its Articles of Association, or in any
Debenture or Loan Stock Deed or other instrument binding on it.
2. Full and accurate details of all overdrafts, loans or other financial
facilities outstanding or available to the Company are set out in the
Disclosure Letter and true copies of all documents relating thereto are
annexed to the Disclosure Letter.
3. The Company has not, since the Balance Sheet Date, repaid or become liable
to repay, any loan or indebtedness in advance of its stated maturity; the
Company has received no demand or notice (whether formal or informal) from
any lenders of money to the Company, requiring repayment thereof or
indicating the intention of any such lender to enforce any security which it
may hold over any assets of the Company, and there are no circumstances
likely to give rise to any such demand or notice.
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<PAGE>
4. Having regard to existing bank and other facilities, the Company has
sufficient working capital for the purposes of continuing to carry on its
business in its present form and at its present level of turnover for the
foreseeable future and for the purposes of carrying out and fulfilling in
accordance with their terms all orders, projects and contractual obligations
which have been placed with or undertaken by the Company.
5. The Company has no outstanding loan capital, nor has it discounted or
factored its debts or borrowed any money (save for short term borrowings
from its bankers not exceeding the amounts shown in the Accounts) which it
has not repaid.
6. The Company has not lent any money which has not been repaid to it and does
not own the benefit or any debt (whether present or future) other than debts
accrued to it in the ordinary course of its business.
7. The Company has not created or agreed to create any mortgage, charge or
debenture or given or entered into or agreed to give or enter into any
guarantee, suretyship, indemnity or similar commitment or agreement for the
postponement or subordination of debt or (except in the ordinary course of
business) created or agreed to create any lien or set-off.
8. There are no circumstances known to the Warrantors whereby the continuation
of any of the facilities available to the Company might be prejudiced or
which may give rise to any alteration in the terms and conditions of any
such facilities.
V. TAX MATTERS
-----------
General
-------
1. Full provision or reserve has been made in the Accounts for all tax liable
to be assessed on the Company or for which it is accountable in respect of
income, profits or gains or any disposal or deemed disposal of an interest
in land earned, accrued or received on or before the Balance Sheet Date or
61
<PAGE>
any event on or before the Balance Sheet Date including distributions made
down to such date or provided for in the Accounts and proper provision has
been made in the Accounts for deferred taxation in accordance with generally
accepted accountancy principles.
2. The Company has properly and punctually made all necessary returns and
provided all necessary information required for tax purposes and none of
such returns is disputed by the Inland Revenue or any other authority
concerned (whether of the United Kingdom or elsewhere) and the Warrantors
are not aware that any such dispute is likely.
3. The Company has duly and punctually paid all taxes of whatever nature of the
United Kingdom or elsewhere for which it has become liable and is under no
liability to pay any penalty or interest in connection with any claim for
tax.
4. The Disclosure Letter contains copies of the Corporation Tax Computations
and assessments of the Company for the six accounting periods since
incorporation and ending on the Balance Sheet Date.
5.1 The Company has duly deducted all amounts from any payments from which tax
falls to be deducted at source and the Company has duly paid or accounted
for such amounts to the Inland Revenue or any other relevant taxation or
excise authorities (whether of the United Kingdom or elsewhere).
5.2 The Company has not been released from any debt in whole or in part in
respect of which a deduction has been allowed in computing the taxable
profits of its trade
PAYE etc.
---------
6. The Company has properly operated the Pay As You Earn System by deducting
tax as required by law from all payments to or treated as made to employees
and ex-employees and accounted to the Inland Revenue or other applicable
62
<PAGE>
authority for all tax so deducted and all tax chargeable on benefits
provided for employees or former employees.
7. All payments by the Company to any person which ought to have been made
under deduction of tax have been so made and the Company has (if required by
law to do so) accounted to the Inland Revenue for the tax so deducted.
Group Income and Relief
-----------------------
8.1 The Disclosure Letter contains particulars of all elections made by the
Company under Section 247 ICTA and all such elections were immediately prior
to the date of this Agreement in force and the Company has not paid any
dividend without advance corporation tax or made any payment without
deduction of income tax in the circumstances specified in Section 248(2)
ICTA.
8.2 The Disclosure Letter contains full particulars of all surrenders, claims,
arrangements and agreements relating to group relief (as defined by Section
402 ICTA) to which the Company is or has been a party and:-
8.2.1 all claims by the Company for group relief were when made and are now
valid and have been or so far as the Warrantors are aware will be
allowed by way of relief from corporation tax;
8.2.2 the Company has not made nor is liable to make any payment under any
such arrangement or agreement save in consideration for the surrender
of group relief allowable to the Company by way of relief from
corporation tax;
8.2.3 the Company has received all payments due to it under any such
arrangement or agreement for surrender of group relief made by it.
63
<PAGE>
8.3 The Disclosure Letter contains full particulars of all arrangements and
agreements to which the Company is or has been a party relating to the
surrender of advance corporation tax made or received by the Company under
Section 240 ICTA and:-
8.3.1 the Company has not paid nor is liable to pay for the benefit of any
advance corporation tax which is or may become incapable of set off
against the Company's liability to corporation tax; and
8.3.2 the Company has received all payments due to it under any such
arrangement or agreement for all surrenders of advance corporation
tax made by it.
Base Values and Acquisition Costs
---------------------------------
9.1 If each of the capital assets of the Company were disposed of for a
consideration equal to the book value of each asset in or adopted for the
purpose of the Accounts no liability to corporation tax on chargeable gains
or balancing charge under the Capital Allowances Act 1990 or Finance Act
1971 would arise (and for this purpose there shall be disregarded any
relief and allowances available to the Company other than amounts falling
to be deducted from the consideration receivable under Section 38 TCGA).
9.2 The Company has not since the Balance Sheet Date engaged in any transaction
in respect of which there may be substituted for any purpose of Taxation a
different consideration for the actual consideration given or received by
it.
Roll-over Relief
----------------
10. The Company has not made nor is it entitled to make a claim under Sections
152-158 TCGA, Section 175 TCGA or Section 247 TCGA and no such claim has
been made by any other company which affects the amount or value of the
consideration for the acquisition of any asset by the Company taken into
account in calculating liability to corporation tax on chargeable gains on
a subsequent disposal.
64
<PAGE>
Depreciatory Transactions
-------------------------
11. No loss which might accrue on the disposal by the Company of any share in
or security of any other company is liable to be reduced by virtue of any
depreciatory transaction within the meaning of Section 176 TCGA nor is any
expenditure by the Company on any share or security liable to be reduced
under Section 125 TCGA.
12. The Company has not realised any gain of a capital nature from the disposal
of land in respect of which it could be assessed to tax under the
provisions of Section 776 ICTA (artificial transactions in land).
13. The Company has not entered into any transactions or done or omitted to do
anything else in consequence of which, in computing the income, profits or
losses of the Company for tax purposes, adjustments are liable to be made
under the provisions of Section 770 ICTA (sales and other transactions at
undervalue or overvalue).
14. The Company has not entered into a transaction liable to be treated as a
disposal of assets under Sections 29 to 34 (inclusive) TCGA.
Straight-line Growth
--------------------
15. No asset owned by the Company is subject to a deemed disposal under
Schedule 2 TCGA as to restrict the extent to which the gain or loss over
the period of ownership may be apportioned by reference to straight line
growth.
Chargeable Debts and Policies
-----------------------------
16. The Company has not acquired any debts owing to any other person not being
debts on a security.
17. The Company has not acquired benefits under any policy of assurance
otherwise than as original beneficial owner.
65
<PAGE>
Claims
------
18. The Company has not made a claim and none is available
to the Company under any of the following:-
18.1 Section 279 TCGA (assets situated outside the United Kingdom);
18.2 Section 280 TCGA (tax on chargeable gains payable by instalments);
18.3 Section 242 ICTA (surplus franked investment income);
18.4 Section 584 ICTA (unremittable income arising outside the United
Kingdom);
18.5 Section 24(2) TCGA (assets of negligible value).
19. The Company has not obtained relief from stamp duty under Sections 75 to 97
of the Finance Act 1986 (reconstructions and amalgamations).
20. The Company has not made any claim or obtained any tax advantage resulting
from transactions in securities which is liable to be cancelled under
Section 703 ICTA.
21. The Company has not expended or applied any sum liable to be regarded as
income available for distribution pursuant to Schedule 19 paragraph 8 ICTA
or is bound (contingently or otherwise) to expend or apply any such sum.
Tax Losses and ACT Carry Forward
--------------------------------
22.1 There has been no change in the business of the Company within the meaning
of Section 245 or Section 768 ICTA.
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<PAGE>
22.2 No member of the Group has incurred a capital loss to which Section 18(3)
TCGA (Transactions between connected persons) applies.
Gifts
-----
23. The Company is not liable to be assessed to corporation tax on chargeable
gains or to capital transfer tax as donor or donee of any gift or
transferor or transferee of value.
Intra Group Transfers
---------------------
24. The Company has not at any time acquired any asset from any other company
which at the time of such acquisition then belonged to the same group of
companies as the Company within the meaning of Section 170 TCGA.
Distributions
-------------
25. No distribution within the meaning of Sections 209 and 210 ICTA has been
made by the Company except dividends shown in its audited accounts nor is
the Company bound to make any such distribution.
Loans to Participators
----------------------
26. 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 a payment under Section 419 ICTA.
Payment to Employees
--------------------
27. The Company has not made any payment to or provided any benefit for any
officer or employee or ex-officer or ex-employee of the Company which is
not allowable as a deduction in calculating the profits of the Company for
taxation purposes.
67
<PAGE>
National Insurance
------------------
28. The Company has paid all national insurance and graduated pension
contributions, and has made all other payments relating to social
security, for which it is liable and has kept proper books and records
relating to the same.
VAT
---
29. The Company has where appropriate complied with all statutory provisions
and regulations relating to value added tax and has duly paid or provided
for all amounts of value added tax for which the Company is liable.
30.1 The Company is registered for value added tax purposes and is a member of
a Group of companies for value added tax purposes; the Company has waived
exemption from value added tax under paragraphs 2 and 3 of Schedule 6A
Value Added Taxes Act 1983 in relation to the Property and there are no
circumstances under which the Company could suffer a value added tax self
supply.
30.2 The Company is not partially exempt for VAT.
31. All documents which are in the possession of the Company or under its
control to which the Company is a party and which attract stamp duty have
been properly stamped, and the Company has duly paid all stamp duty to
which it is, has been or may be made liable and there is no liability to
any penalty in respect of such duty nor are there any circumstances or
transactions to which the Company is or has been a party which may result
in the Company becoming liable to any such penalty.
32.1 No distribution within Section 418 ICTA has ever been made by the Company
and no such distribution will be made prior to Completion, and no loan or
advance within Sections 420 or 422 ICTA has ever been made by the Company,
nor has the Company released or written off or agreed to release or write
off the whole or any part of any such loan or advance;
68
<PAGE>
32.2 The Company does not own any share capital to which the provisions of
Section 249 ICTA could apply;
32.3 the Company does not hold any shares in a company to which the provisions
of Section 13 TCGA may apply;
32.4 the Company has made no transfers of value within the Inheritance Tax Act
1984]
Tax Avoidance
-------------
33.1 The Company has not since the Balance Sheet Date engaged in or been a
party to any scheme or arrangement of which the main purpose, or one of
the main purposes, was the avoidance of or a reduction in liability to
Taxation; and, in particular but without limitation, the Company has not
been a party to or otherwise involved in any transaction to which any of
the following could apply:-
33.1.1 Section 240 ICTA (Set-off of company's surplus ACT against
subsidiary's liability to corporation tax);
33.1.2 Section 410 ICTA (Group relief: arrangements for transfer of
company to another group or consortium); Section 395 ICTA (Leasing
contracts: and company reconstructions); and Section 116 ICTA
(Partnerships involving companies: arrangements for transferring
relief);
33.1.3 Sections 729 or 730 ICTA (Tax avoidance: other transfers of
securities); Sections 731 to 735 ICTA (Purchase and sale of
securities); or Sections 736 to 737 ICTA (Miscellaneous provisions
relating to securities);
69
<PAGE>
33.1.4 Section 774 ICTA (Transactions between dealing company and
associated company);
33.1.5 Section 779 ICTA (Sale and lease-back: limitation on tax reliefs);
33.1.6 Section 781 ICTA (Assets leased to traders and others);
33.1.7 Section 786 ICTA (Transactions associated with loans or credit);
33.1.8 Section 29 TCGA (Value shifting: General provisions);
33.1.9 Section 106 TCGA (Disposal of shares and securities by company
within prescribed period of acquisition);
34.2 The Company has not since the Balance Sheet Date been a party to any
transaction to which any of the following has been or could be applied
other than transactions in respect of which all necessary consents or
clearances have been obtained:-
34.2.1 Section 703 to 709 ICTA (Cancellation of tax advantages from
certain transactions in securities);
34.2.2 Section 765 ICTA (Migration etc of companies);
34.2.3 Section 776 ICTA (Transactions in land: taxation of capital gains);
34.2.4 Sections 135 to 138 TCGA (Company reconstructions and
amalgamations);
34.2.5 Section 139 TCGA (Reconstruction or amalgamation involving transfer
of business).
70
<PAGE>
Miscellaneous Transactions
--------------------------
35. No circumstances exist whereby a person not resident in the United Kingdom
is assessable and chargeable to tax in the name of the Company nor has the
Company ever acted as the branch or agent of a person not resident in the
United Kingdom.
36. The Company has never traded through a branch, agency or permanent
establishment situated outside the United Kingdom.
37. The Company is not and never has been in partnership with any person.
W. PROPERTY
--------
1. The particulars of the Property shown in the Fourth Schedule are true and
correct and the Company is the legal and beneficial owner and has good and
marketable title to the Property which it owns free from any claim,
encumbrance, mortgage, charge, lien, sublease, tenancy or right of occupation
which has not been disclosed to the Purchaser and there is appurtenant to the
Property all rights and easements necessary for its use and enjoyment and
except as has been disclosed to the Purchaser the Company will upon
Completion have no other interest of any nature in or licence over any land.
2. The Company is now and will at Completion be under no obligation to purchase,
lease, sublease, use or otherwise occupy any other property.
3. All restrictions conditions and covenants (including any imposed by or
pursuant to the Town and Country Planning Acts) affecting the Property or any
part or parts thereof have been observed and performed.
4. The Property nor any part or parts of the Property is subject to any
covenants restrictions or conditions which would materially affect its value
71
<PAGE>
or is to any extent affected by any of the following matters or is to the
knowledge of any of the Warrantors likely to become so affected:-
4.1 any outstanding dispute notice or complaint or any exception reservation
right covenant restriction or condition which is of an unusual nature
or which affects or might in the future affect the use of the
Property (or any part or parts thereof) for the purpose for which it
is now or proposed to be used;
4.2 any notice order or proposal of which the Company has notice or of
which any of the Warrantors is aware (or ought on reasonable enquiry
to have notice or be aware) made or issued by or on behalf of any
government or statutory authority department or body for acquisition
clearance demolition or closing, the carrying out of any work upon any
building, the modification of any planning permission, the
discontinuance of any use or the imposition of any building or
improvement line;
4.3 any compensation received as a result of any refusal of any
application for planning consent or the imposing of any restrictions
in relation to any planning consent;
4.4 any commutation or agreement for the commutation of rent or payment of
rent in advance of any due date of payment thereof.
5. All requisite permissions, consents and approvals were obtained and will up
to Completion continue to be obtained for all developments, alterations or
additions to or other works on or in relation to the Property and all
conditions or restrictions imposed in or by any such permission, consent or
approval were complied with and will up to Completion continue to be complied
with.
6. No proposal has been made, nor are the Warrantors aware of any
circumstances rendering it likely that any proposal will be made for the
72
<PAGE>
compulsory acquisition of the whole or any part of the Property or which
would adversely affect the Property or any part thereof and the Warrantors
will forthwith notify the Purchaser in writing if any such proposal is made
prior to Completion.
7. There is no material physical defect in any part of the Property or any
structure thereon and all structures thereon are in good and substantial
repair and condition and fit for the purposes for which they are used.
8. In respect of the lease under which the Property is held by Link Group
Limited:-
8.1 all the provisions and obligation of any such lease has been duly
complied with, all rental and other payments due under any such lease
have been paid in full and are not the subject of any dispute;
8.2 the Company has complied with every proper requirement of the Landlord
made in or under any lease and no event has occurred which entitles or
which may entitle any such landlord to terminate such lease and no
notice or other communication has been received by or served on the
Company in respect of any breach or alleged breach of any of the
provisions of any such lease;
8.3 the Company has paid the rent and observed and performed the covenants
on the part of the tenant and the conditions contained in such lease
(which expression includes any underlease) and the last demand (or
receipts for rent if issued) was unqualified, and such lease is valid
and in full force;
8.4 all licences, consents and approvals required from the landlords and
any superior landlords under any lease 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;
8.5 there are no rent reviews currently in progress;
73
<PAGE>
8.6 there is not outstanding and unobserved or unperformed any obligation
to comply with any notice or other requirement given by the landlord
under such lease and there is no breach of any covenant restriction or
obligation relating to any of the Properties which will entitle or
require any person to exercise any powers of entry and/or to take
possession of the Property;
8.7 there is no obligation to reinstate the Property by removing or
dismantling any alteration made to it by the Company or by any
predecessor in title to the Company.
9. No high alumina cement or concrete, calcium chloride, asbestos, woodwool
slabs or any other substance or material which is or may prove defective or
hazardous or does not comply with British standards and codes of practice
and good building practice current at any relevant time was used in the
construction of or any alteration or addition to any building or other
structure on the Property.
10. The Company has no existing or contingent liabilities in respect of any
properties previously occupied by it or in which it owned or held interest,
including (without limitation) leasehold premises assigned or otherwise
disposed of.
11. The replies given by the Vendors' Solicitors to the Purchaser's Solicitors'
enquiries relating to the Property are true and accurate in all respects.
X. ENVIRONMENTAL
-------------
Neither the Property nor, in relation to the Property, the Company nor to
the Company's knowledge any third party have been, or are in the process of
being or are likely to be in breach of any legislation, regulations, codes
of practice or other controls made or issued by central or local government
or any other statutory body or other agency charges with environmental
responsibilities or any environmental directives, regulations or decisions
issued by the European Community, and in particular:-
74
<PAGE>
1. Neither the Company nor to the Company's knowledge has any third party
used, generated, manufactured, refined, processed, stored or disposed
of, on, under or about the Property or transported to or from the
Property any radioactive substances or any other substances presenting
a hazard to the environment otherwise than in compliance with such
legislation, regulations, directives, decisions or codes of practice;
and
2. No such breach has been or is likely to be caused in relation to the
Property or anything done or omitted to be done under on or over any of
the same by:-
2.1 pollution of the atmosphere;
2.2 pollution of land;
2.3 water pollution;
2.4 pollution by noise;
2.5 pollution by chemicals;
and neither the Company nor to the Company's knowledge any third party as
aforesaid are liable or are potentially liable in common law for any action
in nuisance caused by such pollution.
Y. SUBSIDIARIES
------------
1. The particulars contained in the Sixth Schedule are accurate in all respects
and the Company (save for IMR (UK)) is not the holder or beneficial owner of
any shares or securities of any other company or corporation (whether
incorporated in the United Kingdom or elsewhere) other than the Subsidiaries
and has not agreed to acquire any such shares or securities.
2. None of the Subsidiaries is the holder or beneficial owner of any shares or
securities of any other company or corporation (whether incorporated in the
United Kingdom or elsewhere) and has not agreed to acquire any such shares or
securities.
75
<PAGE>
Z. CONSEQUENCES OF THIS AGREEMENT
------------------------------
The acquisition of the Shares by the Purchaser or the compliance with the
terms of this Agreement:-
1. Will not cause the Company to lose the benefit of any right or privilege it
presently enjoys or cause any person who normally does business with the
Company not to continue to do so on the same basis as previously;
2. Will not relieve any person of any obligation to the Company (whether
contractual or otherwise) or enable any person to determine any such
obligation or any right or benefit enjoyed by the Company or to exercise any
right whether under an agreement with or otherwise in respect of the Company;
3. Will not result in any present or future indebtedness of the Company becoming
due or capable of being declared due and payable prior to its stated
maturity; and
4. Will not give rise to or cause to become exercisable any right of pre-
emption.
76
<PAGE>
THE SIXTH SCHEDULE
------------------
Subsidiaries
------------
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Date and Issued Nature
Registered Country of Share of
Name Number Incorporation Capital Business
---- ---------- --------------- --------- ---------
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Contracts Link Limited 2458669 England 2 Ordinary Dormant
11th January Shares of
1990 (Pounds)1
each
- -------------------------------------------------------------------------------
Link Group Limited 1499718 England 2,000,000 Computer
3rd June 1980 Ordinary Services
Shares of
10 pence
each
- -------------------------------------------------------------------------------
Link Workgroup Solutions 2934883 England 2 Ordinary Dormant
Limited 2nd June 1994 Shares of
(Pounds)1
each
- -------------------------------------------------------------------------------
Link Associates Limited 3214826 England 2 Ordinary Dormant
June 1996 Shares of
(Pounds)1
each
- --------------------------------------------------------------------------------
</TABLE>
77
<PAGE>
SIGNED by PHILIP FRANCIS )
SHIPPERLEE ) Philip Francis Shipperlee
SIGNED by SHEILA FRANCES )
SHIPPERLEE ) Sheila Frances Shipperlee
SIGNED by SATISH SANAN )
duly authorised for and on behalf ) Satish Sanan
of GENEPAD LIMITED )
SIGNED by SATISH SANAN )
duly authorised for and on behalf of ) Satish Sanan
INFORMATION MANAGEMENT )
RESOURCES INC )
78
<PAGE>
EXHIBIT 2.2
SHARE PURCHASE AGREEMENT
THIS AGREEMENT is made this 13th day of January, 1997 among SATISH K. SANAN,
and ANNE SANAN his wife, both residing at 163 Woodcreek Drive, Safety Harbor, in
the State of Florida 34621, United States of America, together hereinafter
referred to as "Selling Shareholders" (which expression shall unless repugnant
to the context or meaning thereof, be deemed to include their successors and
assigns) of the one Part; and
INFORMATION MANAGEMENT RESOURCES, INC., a company registered in the State of
Florida, United States of America, having its principal office at 26750 U.S.
Highway 19 North, Suite 500, Clearwater, Florida 34621-3442, USA hereinafter
referred to as "IMR-US" (which expression shall unless repugnant to the context
or meaning thereof, be deemed to include its successors and assigns) of the
other Part;
WHEREAS, The Selling Shareholders are the owners, beneficially and of record, of
Two Hundred and Ten (210) "A" ordinary shares (hereinafter called "the Shares"),
of Information Management Resources (UK) Limited a company incorporated on
October 2, 1992 as a private company limited by shares and registered in England
under the Companies Acts with number 2752876; and
WHEREAS IMR-US desires to acquire the Shares and the Selling Shareholders
desire to sell such Shares to IMR-US for the consideration and subject to the
terms and conditions as stated in this Agreement.
NOW, THEREFORE, in consideration of the premises and the respective agreements
hereinafter set forth, IMR-US and the Selling Shareholders agree as follows:
1. The Selling Shareholders shall sell the Shares to IMR-US and IMR-US shall
purchase the Shares for a consideration of Five hundred twenty thousand
dollars (US $520,000.00) subject to and conditional on the terms hereof.
2. This Agreement is subject to and conditional upon the completion by IMR-US
(through its wholly owned subsidiry Genepad Limited) of its acquisition
(hereinafter "the Link Acquisition") of Link Group Holdings Limited
pursuant to an Agreement of even date herewith between P. F. Shiperlee,
Esq. and Mrs. S. F. Shiperlee(1), Genepad Limited (2) and IMR - US (3).
3. Closing or completion of the sale and purchase of the Shares shall be
effective January 8, 1997 and shall take place on a date ("the Closing
Date") concurrently with completion of the Link Acquisition.
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4. On the Closing Date, IMR-US shall pay the Selling Shareholders by wire
transfer or Bankers Draft the sum of Five hundred twenty thousand dollars
(US $520,000.00) less withholding taxes if any, in exchange for:
4.1 all certificates representing the Shares,
4.2 properly executed transfers of the Shares in favor of IMR-US or such
other persons as IMR-US shall direct,
4.3 such waivers of pre-emptive rights, consents to transfer or other
documents as are required to enable IMR-US or its nominee to be registered
as the holder of the Shares;
4.4 irrevocable powers of attorney (in the approved terms) executed by
each of the holders of the Shares in favour of IMR-US or its nominee(s) to
enable IMR-US (pending registration of the transfers of such shares) to
exercise all voting and other rights attaching to such shares and to
appoint proxies for this purpose; and
4.5 such other documents (including any power of attorney under which any
document required to be delivered under this Agreement has been executed
and any waivers or consents) as IMR-US may require to enable IMR-US or its
nominee to be registered as the holder of the Shares;
5. IMR-US represents and warrants to the Selling Shareholders that it has full
power and authority to execute, deliver, and carry out the terms of this
Agreement.
6. The Selling Shareholders jointly and severally represent and warrant to
IMR-US that as of the date hereof the Selling Shareholders have the
unrestricted power and the unqualified right to sell, assign, and deliver
to IMR-US a good, valid, and marketable title to the Shares, free and clear
of any liens, claims, encumbrances and equitable rights.
7. This Agreement shall be governed by and construed in accordance with
English law and each of the parties hereto submits to the non-exclusive
jurisdiction of the English Courts.
IN WITNESS WHEREOF the Parties have caused this Agreement to be executed the day
and year first herein above mentioned.
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INFORMATION MANAGEMENT
RESOURCES, INC.
By: /s/ Dilip Patel
---------------------------------------------
Dilip Patel, Vice President - General Counsel
/s/ Satish K. Sanan
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SATISH K. SANAN
/s/ Anne Sanan
- ---------------------
ANNE SANAN
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