Document:

EXCHANGE
        AGREEMENT

       

      This
        Exchange Agreement (the “Agreement”),
        dated
        as of the 12th day of October, 2005, is made and entered into by and
        among
        a21, Inc., a Texas corporation (“a21”),
        Clonure Limited an Isle of Mann corporation, Louis Anthony Lockley Ingram
        and
        David Jeffrey, (collectively the “Shareholders”).

       

      WHEREAS,
        the
        Shareholders are the holders of Fourteen Thousand Four Hundred Eighty (14,480)
        shares of Preferred Stock par value $0.001 per share of a21 which shares
        of
        Preferred Stock were issued to the Shareholders on October 12, 2005 (the
        “Original
        Issue Date”)
        pursuant to the terms of that certain Share Purchase Agreement by and among
        the
        Shareholders and the other parties thereto dated as of October 12, 2005 (the
        “Purchase
        Agreement”);
        and

       

      WHEREAS,
        the
        Preferred Stock has a face value of $100 per share; and

       

      WHEREAS,
        a21 is
        authorized to issue one hundred million (100,000,000) shares of Common Stock
        par
        value $0.001 per share (“a21
        Common Stock”);
        and

       

      WHEREAS,
        pursuant to the terms of the Purchase Agreement, the Shareholders are entitled
        to exchange their shares of Preferred Stock for shares of a21 Common
        Stock.

       

      NOW,
        THEREFORE,
        in
        consideration of the covenants and agreements set forth herein and in the
        Purchase Agreement, and for other good and valuable consideration, and
        sufficiency of which are hereby acknowledged and intending to be legally
        bound
        hereby the parties agree as follows:

       

      1.  Exchange
        Rights at Option of the Holder.
        At any
        time, each share of Preferred Stock shall be exchangeable, at the option
        of the
        holder thereof, and without the payment of additional consideration by the
        holder thereof, for such number of shares of fully paid, non-assessable shares
        of a21 Common Stock at a rate equal to the face value of a share of Preferred
        Stock divided by the Average Price, as hereinafter defined, of a21 Common
        Stock,
        but no less than fifty cents ($0.50) per share of a21 Common Stock (“Minimum
        Exchange Price”). The rate at which shares of Preferred Stock may be exchanged
        for shares of a21 Common Stock, shall be subject to adjustment as provided
        below. “Average
        Price”shall
        mean the average of the Closing Price of the Common Stock for the 20 Trading
        Day
        period ending one Trading Day prior to the date notice of the exchange is
        sent
        by a Shareholder to a21; "Closing
        Price"
        shall
        mean the closing price of the a21 Common Stock on the principal national
        securities exchange (which for purposes of this definition shall include
        the
        Nasdaq Stock Market, Inc. and the OTC Bulletin Board) on which the shares
        of a21
        Common Stock are then traded, or if the shares of a21 Common Stock are not
        traded on a principal national securities exchange, the mean of the bid and
        asked prices of a share of a21 Common Stock in the over-the-counter market;
        and
        "Trading
        Day"
        shall
        mean any day on which the shares of Common Stock are traded on their principal
        trading market. Therefore, if the Minimum Exchange Price was $.50 per share,
        each share of Series A Preferred Stock shall, as of the date hereof, be
        exchangeable into 200 shares of a21 Common Stock.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      2.  Exchange/Redemption
        Rights at Option of a21.

       

      (a)  At
        any
        time, the then outstanding shares of Preferred Stock shall be exchangeable,
        at
        the option of a21, and without the payment of additional consideration by
        the
        holder thereof, for such number of fully paid non-assessable shares of a21
        Common Stock at a rate equal to ninety percent (90%) of the Average Price
        at the
        time of notice by a21 to the Shareholders but at a rate no greater than one
        dollar ($1.00) per share of a21 Common Stock (“Maximum Exchange
        Price”).

       

      (b)  In
        addition, at any time prior to exchange of the Preferred Shares into a21
        Common
        Stock, the then outstanding shares of Preferred Stock shall be redeemable,
        at
        the option of a21, in exchange for an amount in cash equal to US $1,448,000
        plus
        five percent (5%) per annum, compounded annually, computed from the Original
        Issue Date through and including the date the shares are redeemed.

       

      3.  Fractional
        Shares.
        No
        fractional shares of a21 Common Stock shall be issued upon exchange of the
        shares of Preferred Stock. In lieu of any fractional shares to which the
        holder
        would otherwise be entitled, a21 shall pay cash equal to such fraction
        multiplied by the then effective Closing Price of a share of a21 Common Stock.
        

       

      4.  Mechanics
        of an Exchange/Redemption.
        

       

      (a)  In
        case
        of an exchange pursuant to Section 1, in order for a holder of shares of
        Preferred Stock to exchange shares of Preferred Stock for shares of a21 Common
        Stock, such holder shall surrender the certificate or certificates for such
        shares of Preferred Stock at the principal office of a21, together with written
        notice (the “Exchange
        Notice”)
        to a21
        that such holder elects to exchange all or any number of the shares of Preferred
        Stock represented by such certificate or certificates. The Exchange Notice
        shall
        state such holder's name or the names of the nominees in which such holder
        wishes the certificate or certificates for shares of a21 Common Stock to
        be
        issued. If required by a21, certificates surrendered for exchange shall be
        endorsed or accompanied by a written instrument or instruments of transfer,
        in
        form reasonably satisfactory to a21, duly executed by the registered holder
        or
        such holder’s attorney duly authorized in writing. The date of receipt of such
        certificates and the Exchange Notice by a21 shall be the exchange date (the
        "Exchange
        Date").
        a21
        shall, as soon as practicable after the Exchange Date, deliver at such office
        to
        such holder of Preferred Stock, or to such holder’s nominees, a certificate or
        certificates for the number of shares of a21 Common Stock to which such holder
        shall be entitled, together with cash in lieu of any fraction of a share.
        On and
        after the Exchange Date, such holder or such holder’s nominees shall be deemed
        to be the record owner of such shares of a21 Common Stock and have all the
        rights appertaining thereto. 

       

      (b)  In
        case
        of an exchange pursuant to Section 2(a), in order for a21 to cause the holders
        of shares of Preferred Stock to exchange their shares of Preferred Stock
        for
        shares of a21 Common Stock, a21 shall deliver to each holder of shares of
        Preferred Stock a written notice (the “Company
        Notice”)
        that
        a21 has elected to require such holder to exchange outstanding shares of
        Preferred Stock into shares of a21 Common Stock, together with its calculation
        of the number of shares of a21 Common Stock that such holder is entitled
        to
        receive upon surrender of such holder’s shares of Preferred Stock. In order to
        receive certificates representing shares of a21 Common Stock, such holder
        shall
        surrender the certificate or certificates for such shares of Preferred Stock
        at
        the principal office of a21, together with the name, if any, of any person
        other
        than the holder in which such holder wishes the certificate or certificates
        for
        shares of a21 Common Stock to be issued. If required by a21, certificates
        surrendered for exchange shall be endorsed or accompanied by a written
        instrument or instruments of transfer, in form reasonably satisfactory to
        a21,
        duly executed by the registered holder or such holder’s attorney duly authorized
        in writing. For purposes of Section 2, the Exchange Date shall be the date
        of
        receipt by the holders of the shares of Preferred Stock of the Company Notice.
        a21 shall, as soon as practicable after the Exchange Date, deliver at such
        office to such holder of Preferred Stock, or to such holder’s nominees, a
        certificate or certificates for the number of shares of a21 Common Stock
        to
        which such holder shall be entitled, together with cash in lieu of any fraction
        of a share. On and after the Exchange Date, such holder or such holder’s
        nominees shall be deemed to be the record owner of such shares of a21 Common
        Stock and have all the rights appertaining thereto. 

       

      
        
          
          

        

        
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      (c)  In
        case
        of a redemption pursuant to Section 2(b), in order for a21 to cause the holders
        of shares of Preferred Stock to surrender their shares of Preferred Stock
        for
        cash, a21 shall deliver to each holder of shares of Preferred Stock a written
        notice (the “Redemption
        Notice”)
        that
        a21 has elected to require such holder to surrender outstanding shares of
        Preferred Stock into cash, together with its calculation of the amount of
        cash
        (the “Price”)
        that
        such holder is entitled to receive upon surrender of such holder’s shares of
        Preferred Stock. In order to receive the Price, such holder shall surrender
        the
        certificate or certificates for such shares of Preferred stock at the principal
        office of a21. If required by a21, certificates surrendered shall be endorsed
        or
        accompanied by a written instrument or instruments of transfer, in form
        reasonably satisfactory to a21, duly executed by the registered holder or
        such
        holder’s attorney duly authorized in writing. a21 shall, as soon as practicable
        after receipt of the certificates for Preferred Stock, deliver to such holder
        of
        Preferred Stock a certified or bank check for the Price for such
        shares.

       

      (d)  All
        shares of Preferred Stock which shall have been surrendered or deemed to
        have
        been surrendered for exchange or redemption as herein provided shall be
        cancelled by a21 and shall no longer be deemed to be outstanding. All rights
        with respect to such cancelled shares, including the right, if any, to receive
        notices and to vote, shall immediately cease and terminate on the Exchange
        Date,
        except only the right of the holders thereof to receive certificates
        representing shares of a21 Common Stock and cash in lieu of fractional shares
        in
        exchange therefor or the Price in cash as the case may be.

       

      5.  Reservation
        of Shares.
        a21
        shall at all times when shares of Preferred Stock shall be outstanding, reserve
        for the purpose of effecting the exchange of the shares of Preferred Stock,
        such
        number of its shares of a21 Common Stock as shall from time to time be
        sufficient to effect the exchange of all outstanding shares of Preferred
        Stock.

       

      6.  Adjustments
        to Exchange Price.

       

      (a)  Adjustment
        for Stock Splits and Combinations.
        If a21
        shall at any time or from time to time after the Original Issue Date effect
        a
        subdivision of the outstanding shares of a21 Common Stock, the Minimum Exchange
        Price and Maximum Exchange Price then in effect immediately before that
        subdivision shall be proportionately decreased. If a21 shall at any time
        or from
        time to time after the Original Issue Date combine the outstanding shares
        of a21
        Common Stock, the Minimum Exchange Price and the Maximum Exchange Price then
        in
        effect immediately before the combination shall be proportionately increased.
        Any adjustment under this Section 6(a) shall become effective at the close
        of
        business on the date the subdivision or combination becomes effective.

       

      
        
          
          

        

        
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      (b)  Adjustment
        for Certain Dividends and Distributions.
        In the
        event a21 at any time, or from time to time after the Original Issue Date
        shall
        make or issue, or fix a record date for the determination of holders of shares
        of a21 Common Stock entitled to receive, a dividend or other distribution
        payable in additional shares of a21 Common Stock, then and in each such event
        the Minimum Exchange Price and Maximum Exchange Price shall be decreased
        as of
        the time of such insurance or, in the event such a record date shall have
        been
        fixed, as of the close of business on such record date, by multiplying the
        Minimum Exchange Price and Maximum Exchange Price by a fraction: 

       

      (x)
        the
        numerator of which shall be the total number of shares of a21 Common Stock
        issued and outstanding immediately prior to the time of such issuance or
        the
        close of business on such record date; and 

       

      (y)
        the
        denominator of which shall be the total number of shares of a21 Common Stock
        issued and outstanding immediately prior to the time of such issuance or
        the
        close of business on such record date plus the number of shares of a21 Common
        Stock issuable in payment of such dividend or distribution; 

       

      provided,
        however, that if such record date shall have been fixed and such dividend
        is not
        fully paid or if such distribution is not fully made on the date fixed therefor,
        the Minimum Exchange Price and Maximum Exchange Price for shall be recomputed
        accordingly as of the close of business on such record date and thereafter
        the
        Minimum Exchange Price and Maximum Exchange Price shall be adjusted pursuant
        to
        this Section 6(b) as of the time of actual payment of such dividends or
        distributions. 

       

      (c)  Adjustments
        for Stock Splits, Reverse Stock Splits, Other Dividends and
        Distributions.
        In the
        event a21 at any time after the Original Issue Date shall make or issue,
        or fix
        a record date for the determination of holders of a21 Common Stock entitled
        to
        receive, a dividend or other distribution payable in securities of a21 other
        than shares of a21 Common Stock, or shall subdivide its outstanding a21 Common
        Stock or combine its outstanding a21 Common Stock into a smaller number of
        shares of a21 Common Stock, then and in each such event a21 shall make provision
        so that the holders of the shares of Preferred Stock shall receive upon exchange
        thereof in addition to the number of shares of a21 Common Stock receivable
        thereupon, the amount of securities of a21 that they would have received
        had the
        shares of Preferred Stock been exchanged for shares of a21 Common Stock
        immediately prior to the date of such event and had they thereafter, during
        the
        period from the date of such event to and including the Exchange Date, retained
        such securities receivable by them as aforesaid during such period, giving
        application to all adjustments called for during such period under this Section
        6(c) with respect to the rights of the holders of shares of Preferred Stock.
        

       

      (d)  Adjustment
        for Reclassification, Exchange or Substitution.
        If the
        shares of a21 Common Stock issuable upon the exchange of the shares of Preferred
        Stock shall be changed into the same or a different number of shares of any
        class or classes of stock, whether by capital reorganization, reclassification,
        or otherwise (other than a subdivision or combination of shares or stock
        dividend provided for above, or a reorganization, merger, consolidation,
        or sale
        of assets or capital stock provided for below), then and in each such event
        the
        holder of each such share of Preferred Stock shall have the right thereafter
        to
        exchange such share into the kind and amount of shares of stock and other
        securities and property receivable upon such reorganization, reclassification,
        or other change, by holders of the number of shares of a21 Common Stock for
        which such shares of Preferred Stock might have been exchanged immediately
        prior
        to such reorganization, reclassification, or change, all subject to further
        adjustment as provided herein. 

       

      
        
          
          

        

        
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      (e)  Adjustment
        for Merger or Reorganization, etc.
        In case
        of any consolidation or merger of a21 with or into another corporation or
        the
        sale of all or substantially all of the assets of a21 to another corporation,
        each share of Preferred Stock shall be exchangeable (or shall be exchanged
        for a
        security which shall be exchangeable) for the kind and amount of shares of
        stock
        or other securities or property to which a holder of the number of shares
        of a21
        Common Stock deliverable upon exchange of such shares of Preferred Stock
        would
        have been entitled upon such consolidation, merger or sale. 

       

      (f)  No
        Impairment.
        Without
        limiting the foregoing, a21 shall use its best efforts to carry out all the
        provisions of this Section 6 and to take all such action as may be necessary
        or
        appropriate in order to protect against impairment the rights of the holders
        of
        shares of Preferred Stock to exchange their shares in accordance
        herewith.

       

      7.  Other
        Notices.
        In case
        at any time:

       

      (a)  a21
        shall
        declare any dividend upon a21 Common Stock payable in cash or stock or make
        any
        other distribution to the holders of a21 Common Stock;

       

      (b)  a21
        shall
        offer for subscription pro rata to the holders of a21 Common Stock any
        additional shares of stock of any class or other rights;

       

      (c)  there
        shall be any capital reorganization or reclassification of the capital stock
        of
        a21, or a consolidation or merger of a21 with or into another entity or
        entities, or a sale, lease, abandonment, transfer or other disposition of
        all or
        substantially all its assets or a sale of 50% or more of the issued and
        outstanding a21 Common Stock; or

       

      (d)  there
        shall be a voluntary or involuntary dissolution, liquidation or winding up
        of
        a21;

       

      then,
        in
        any one or more of said cases, a21 shall give, by delivery in person, certified
        or registered mail, return receipt requested, telecopier or telex, addressed
        to
        each holder of any shares of Preferred Stock at the address of such holder
        as
        shown on the books of a21, (a) at least 20 days’ prior written notice of the
        date on which the books of a21 shall close or a record shall be taken for
        such
        dividend, distribution or subscription rights or for determining rights to
        vote
        in respect of any such reorganization, reclassification, consolidation, merger,
        disposition, dissolution, liquidation or winding up and (b) in the case of
        any
        such reorganization, reclassification, consolidation, merger, disposition,
        dissolution, liquidation or winding up, at least 20 days’ prior written notice
        of the date when the same shall take place. Such notice in accordance with
        the
        foregoing clause (a) shall also specify, in the case of any such dividend,
        distribution or subscription rights, the date on which the holders of a21
        Common
        Stock shall be entitled thereto and such notice in accordance with the foregoing
        clause (b) shall also specify the date on which the holders of a21 Common
        Stock
        shall be entitled to exchange their a21 Common Stock for securities or other
        property deliverable upon such reorganization, reclassification, consolidation,
        merger, disposition, dissolution, liquidation or winding up, as the case
        may
        be.

       

      8.  Amendments.
        This
        Agreement shall not be modified, amended or terminated without the written
        consent of all of the parties hereto.

       

      
        
          
          

        

        
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      9.  Further
        Assurances.
        Each of
        the parties hereto shall use its commercially reasonable efforts to do all
        things necessary and advisable to make effective the transaction contemplated
        hereby and shall cooperate and take such action as may be reasonably requested
        by the other party in order in carry out fully the provisions and purposes
        of
        this Agreement and the transactions contemplated thereby.

       

      10.  Counterparts.
        This
        Agreement may be executed in one or more counterparts (including by facsimile)
        each of which shall be deemed to be an original, or which together shall
        constitute one in the same instrument.

       

      11.  Governing
        Law; Venue.
        This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of New York, without regard to principles of conflicts of law. Each
        party
        agrees that it will bring any action or proceeding in respect to any claim
        arising out of or related to this Agreement or the transaction whether in
        tort
        or contract or at law and equity, exclusively in the U.S. District Court
        for the
        Southern District of New York (the “Chosen Courts”). In connection with such
        claims arising out of or related to this Agreement or the transaction, each
        party irrevocably submits to the exclusive jurisdiction of the Chosen Courts,
        waives any objection to laying venue in any such action or proceeding in
        the
        Chosen Courts, waives any objection that the Chosen Courts are on inconvenient
        forum or do not have jurisdiction over any of the parties, agrees that service
        of process in person or by certified or registered mail to its address will
        constitute valid in person or service upon such party and its successors
        and
        assigns in any action or proceeding with respect to any matter as to which
        it
        has submitted to jurisdiction hereunder.

       

      [The
        balance of this page is intentionally left blank.]

       

       

       

       

      
        
          
          

        

        
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      IN
        WITNESS WHEREOF, this Exchange Agreement has been executed as of the day
        and
        year first above written.

       

       

      
        	 	
                a21, Inc.

                 

                /s/
                  Albert Pleus, as attorney

                                                                          

                By:

                Title:

                 

                CLONURE
                  LIMITED

                 

                /s/

                                                                          

                By:

                Title:

                 

                /s/
                  Louis Anthony Lockley Ingram

                                                                          

                Louis
                  Anthony Lockley Ingram

                
                   

                  /s/
                    David Jeffrey

                

                                                                          

                David
                  Jeffrey

              

      

       

      
        
          
          

        

        7DATED
                OCTOBER 12, 2005

            

    

     

    

    

    (1)
      LCJ ACQUISITIONS LIMITED

    

    and

    

    (2)
      CATHAL SHEEHY

    

    

     

    _______________________________________

    

    SERVICE
      AGREEMENT

    ________________________________________

    

     

    

    

    

    MATTHEW
      ARNOLD & BALDWIN

    Solicitors

    21
      Station Road

    Watford

    Hertfordshire
      WD17 1HT

    

    Tel
      No. 01923 202020

    Fax
      No. 01923 215050

    Website:
      www.mablaw.co.uk

    

    Ref:
      MJD/41430-6

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

    

      
        	
                T
                  H I S A G R E E M E N T is
                  dated October 12, 2005

              
	B
                E T W E E
                N	 

      

    

    
    

    
      	
              1.

            	
              LCJ
                Acquisitions Limited a company registered in England and Wales under
                company number 5052066 whose registered office is at  2
                Dolby Road, London SW6 3NE ("the Company")
                and

            

    

    

    
      	
              2.

            	
              Cathal
                Sheehy of 2 Dolby Road, London SW6 3NE ("the
                Executive")

            

    

    

    

    IT
      IS AGREED
      as
      follows:-

    

    
      	1.	
              APPOINTMENT

            

    

    

    
      	
              1.1
                

            	
              The
                Company appoints the Executive as Managing Director
                with effect from the date of this Agreement. Subject to earlier
                termination in accordance with clause 11, this Agreement shall
                automatically terminate on 30 April
                2007.

            

    

    

    
      	
              1.2

            	
              Subject
                to clause 15.5, the Executive shall if so required for the proper
                performance of his duties travel both within the United Kingdom and
                overseas anywhere in the world. 

            

    

    

    
      	
              1.3
                

            	
              The
                Company may from time to time appoint any other person or persons
                to act
                jointly with the Executive.

            

    

    

    
      	
              1.4
                

            	
              The
                Executive may be required without further remuneration to perform
                services
                not only for the Company but also for any other Group Company and,
                subject
                to clause 15.5 to accept such offices in the Company and the Group
                as the
                Company may from time to time require and the Executive may without
                further remuneration be seconded to the employment of any Group
                Company.

            

    

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	2.	
              DUTIES
                OF THE EXECUTIVE

            

    

    

    
      	
              2.1

            	
              The
                Executive shall use his best endeavours to promote the interests
                and
                welfare of the Company and shall devote the whole of his time, attention
                and skill to the business and affairs of the
                Company.

            

    

    

    
      	
              2.2
                

            	
              The
                Executive shall perform such duties (if any) as the Company may from
                time
                to time assign to him subject to such restrictions as the Company
                may from
                time to time impose and shall obey all reasonable and lawful directions
                of
                the Company. The principal duties of the Executive shall be the day
                to day
                management of the Company, financial control and
                budgeting.

            

    

    

    
      	
              2.3
                

            	
              The
                Executive shall disclose to the Board any interest in any contract
                or
                proposed contract with any Group Company. The Executive shall not
                be
                entitled to receive or obtain directly or indirectly any discount
                rebate
                commission or other profit in respect of any such contract or any
                sale or
                purchase of goods effected or other business contracted (whether
                or not by
                him) by or on behalf of any Group Company or to make any benefit
                or profit
                out of or arising directly or indirectly from his employment and
                if he or
                any member of his immediate family or any firm or company in which
                he is
                interested shall obtain any such discount rebate commission benefit
                or
                profit he shall account to the Company for the amount received by
                him (or
                a due proportion of the amount received by such company or firm or
                person
                having regard to the extent of his interest). This clause 2.3 shall
                not
                apply in relation to the holding by the Executive for investment
                purposes
                only of not more than five per cent of any class of the issued share
                capital of a company whose shares are listed on any recognised Stock
                Exchange. 

            

    

    

    
      	
              2.4
                

            	
              The
                Executive shall not without the prior consent of the Board in respect
                of
                any matter directly or indirectly concerning the business or affairs
                of
                the Company give any interview or opinion (whether or not expressed
                to be
                his own) or appear upon any radio or television programme or cause
                any
                article or letter to be published in or otherwise communicated with
                any
                newspaper or any other public information media or publish or cause
                to be
                published any book article letter or opinion or allow his connection
                with
                the Company to be published or hold himself out to be entitled to
                express
                any opinion or give any judgment on its behalf. The Executive shall
                further report to the Board any approach made to him by any representative
                of the media in connection with the Company's business or
                affairs.

            

    

    
    

    
      
        
        

      

      
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              2.5
                

            	
              The
                Executive shall not (except as a representative of the Company or
                with the
                consent in writing of the Board) be directly or indirectly engaged
                or
                concerned or interested in any other business whatsoever and shall
                be
                accountable to the Company for any profits fees or other sums derived
                from
                any interest which he has from time to time in breach of this provision
                provided that this provision shall not prohibit the holding (directly
                or
                through nominees) for investment purposes only of not more than five
                per
                cent of any class of shares or securities in any company listed on
                a
                recognised stock exchange.

            

    

    

    
      	
              2.6

            	
              The
                Company shall be under no obligation to provide any duties for the
                Executive to perform and may at any time (whether or not notice of
                termination of employment has been served by either party) exclude
                the
                Executive from any or all premises of the Company or require the
                Executive
                not to perform any or all of the duties previously assigned to him
                and
                such action shall not constitute a breach of this Agreement on the
                part of
                the Company provided that the Executive shall during any such period
                continue to be entitled to receive remuneration under clause 3 of
                this
                Agreement.

            

    

    

    
      	3.	
              REMUNERATION

            

    

    

    
      	
              3.1
                

            	
              The
                Company shall pay to the Executive during his employment a salary
                at the
                rate of £70,000.00 per annum payable monthly in arrears inclusive of any
                sums receivable as directors fees such salary to be reviewed (but
                not
                decreased or necessarily increased) by the Company in accordance
                with its
                practice from time to time.

            

    

    

    
      	
              3.2

            	
              The
                Executive shall be entitled to participate in such benefits and bonus
                schemes as the Company may from time to time provide for executives
                of the
                Company on such terms as the Company may from time to time determine
                in
                its absolute discretion including permanent health insurance at levels
                to
                be determined from time to time by the Board in its absolute discretion.
                

            

    

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

         

    

    
      	
              3.3

            	
              The
                Executive authorises the Company in accordance with Section 13 of
                the
                Employment Rights Act 1996 to deduct from his salary or any other
                remuneration due to him under this Agreement or sum payable to him
                by the
                Company including (without limitation) any payment in lieu of notice
                any
                outstanding loan any pension contribution, any overpayment of salary
                bonus
                or other remuneration any other sum from time to time owed by the
                Executive to the Company or any Group Company or any sum owed by
                the
                Executive to any third party for which any Group Company is or may
                become
                liable including (without limitation) any outstanding balance on
                any
                credit card account.

            

    

    

    
      	4.	
              EXPENSES

            

    

    

    
      	
               

            	
              In
                addition to the salary payable under Clause 3.1 there shall be paid
                or
                refunded to the Executive all out-of-pocket expenses properly incurred
                by
                him in the performance of his duties including all reasonable expenses
                for
                hotels entertainment subsistence and travelling subject to the production
                of such evidence including (without limitation) supporting receipts
                and
                vouchers as the Company may from time to time at its absolute discretion
                require and subject to obtaining the authorisation of the Board prior
                to
                incurring single items of expenses greater than £1,000 and subject to
                compliance with such rules relating to expenses as the Company may
                at its
                absolute discretion impose from time to
                time.

            

    

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
    

    
      	5.	
              HOLIDAYS

            

    

     

    
      	5.1	
              Unless
                otherwise agreed by the Board and the Executive, the Executive shall
                be
                entitled to 4 weeks paid holiday in each holiday year which shall
                run from
                1 January to 31 December in the same year and in addition up to three
                days
                public holiday and any shut down over the Christmas period which
                shall
                also be with pay. In the holiday years in which employment commences
                and
                terminates entitlement shall be calculated pro rata by reference
                to the
                number of complete months worked by the Executive in the holiday
                year. The
                Executive’s entitlement to holiday accrues in arrears by reference to the
                number of complete months worked.

            

    

    

    
      	5.2	
              The
                Executive may take holidays at such time or times as may be approved
                by
                the Board and holidays not taken during the holiday year may not
                be
                carried forward to the following holiday
                year.

            

    

    

    
      	
              5.3

            	
              On
                termination of this Agreement other than under clause 11.1 or by
                reason of
                notice given by the Executive the Executive shall be entitled to
                payment
                in lieu of untaken holiday accrued during the holiday year in which
                the
                termination takes place.

            

    

    

    
      	6.	
              INCAPACITY

            

    

    

    
      	
              6.1

            	
              If
                the Executive shall be prevented by illness (including mental disorder)
                accident or other incapacity from properly performing his duties
                he shall
                immediately report this fact to the Company and if the Executive
                is so
                prevented for 7 or more consecutive days he shall provide a medical
                practitioner's statement on the 8th day and weekly thereafter. Immediately
                following his return to work after a period of absence (other than
                a
                period in respect of which a medical practitioner's statement has
                been
                provided) the Executive shall complete and submit to the Company
                a
                self-certification form detailing the reason for his
                absence.

            

    

    

    
      	
              6.2

            	
              If
                the Executive shall be absent from his duties hereunder due to illness
                (including mental disorder) or accident or other incapacity duly
                certified
                in accordance with the provisions of clause 6.1 he shall be paid
                his full
                remuneration hereunder for up to twenty six weeks absence (whether
                continuous or not) in any continuous period of twelve months and
                thereafter such remuneration if any as the Board shall in its absolute
                discretion decide provided that there shall be deducted from or set
                off
                against such remuneration any statutory sick pay or other state benefits
                or benefits under any policy of insurance to which the Executive
                is
                entitled by reason of his absence from work or incapacity (whether
                or not
                recovered).

            

    

    
    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

      
      

    

    
      	
              6.3

            	
              If
                the Executive is unable to perform his duties under this Agreement
                the
                Executive shall if so required by the Company and at the expense
                of the
                Company undergo a medical examination and the Executive shall subject
                to
                the provisions of the Access of Medical Reports Act 1988 authorise
                the
                Company to have access to any medical report prepared as a consequence
                of
                such examination.

            

    

    

    
      	7.	
              PENSION
                

            

    

    

    
      	
              7.1

            	
              The
                Company provides a stakeholder pension in which the Executive may
                participate if he chooses. 

            

    

    

    
      	
              7.2

            	
              There
                is not a contracting out certificate in force in relation to
                the employment
                of the Executive.

            

    

    

    
      	8.	
              DATA
                PROTECTION

            

    

    

    
      	 	
              The
                Executive authorises the Company as required by the Data Protection
                Act
                1998 and any regulations made under that statute to process personal
                information including (without limitation) sensitive personal information
                relating to the Executive. 

            

    

    
    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	9.	
              INTELLECTUAL
                PROPERTY 

            

    

    

    
      	
              9.1

            	
              Subject
                only to the Executive's inalienable rights under the Patents Act
                1977 any
                discovery invention secret process literary work manuscript idea
                copyright
                or improvement in procedure made acquired conceived or discovered
                by the
                Executive whilst employed under this Agreement in connection with
                or in
                any way affecting or relating to the business of the Company or capable
                of
                being used or adapted for use in or in connection with it shall
                immediately be disclosed to the Company and shall belong to and be
                the
                absolute property of the Company.

            

    

    

    
      	
              9.2

            	
              The
                Executive shall if and whenever required so to do by the Company
                (whether
                during or after the termination of his appointment) at the expense
                of the
                Company (or its nominee) apply or join in applying for letters patent
                or
                other proprietary protection in the United Kingdom and any other
                part of
                the world in respect of the same and shall execute and do all instruments
                and things necessary for vesting the said letters patents or other
                proprietary protection when obtained and all right title and interest
                to
                and in the same in the Company or its nominee absolutely and as sole
                beneficial owner or in such other person as may be
                required.

            

    

    

    
      	
              9.3

            	
              The
                Executive hereby irrevocably and by way of security jointly and severally
                appoints the Company and each director of it for the time being thereof
                to
                be his attorney in his name and on his behalf to execute and do any
                such
                instrument or thing and generally to use his name for the purpose
                of
                giving to the Company or its nominee the full benefit of the provisions
                of
                this clause and in favour of any third party a certificate in writing
                signed by any director or the secretary of the Company that any instrument
                or act falls within the authority conferred by this Agreement shall
                be
                conclusive evidence that such is the
                case.

            

    

    

    
      	10.	
              DIRECTORSHIPS

            

    

    

    
      	
              10.1

            	
              If
                requested by the Board, the Executive shall accept office with the
                Company
                or any other Group Company and shall on request by the Company or
                on
                termination of this Agreement (whether lawful or not) resign any
                such
                office with immediate effect and without claim for compensation and
                should
                he fail to do so the Company and each director of it for the time
                being is
                by this Agreement irrevocably and by way of security jointly and
                severally
                appointed as attorney of the Executive in his name and on his behalf
                to
                sign and do any documents or things necessary or requisite to give
                effect
                to such resignation.

            

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

      
      

    

    
      	
              10.2

            	
              The
                Executive shall not resign any office with the Company or any Group
                Company (other than at the request of the Company) and should the
                Executive so resign (other than in circumstances where his employment
                under this Agreement terminates) such resignation from office shall
                be a
                breach of this Agreement entitling the Company to terminate this
                Agreement
                without notice under clause 11.2.

            

    

    

    
      	11.	
              TERMINATION
                

            

    

    

    
      	
              11.1

            	
              The
                Company may terminate this Agreement with immediate effect if the
                Executive:-

            

    

    

    
      	
              11.1.1

            	
              commits
                any act of gross misconduct or repeats or continues (after written
                warning) any serious breach of his obligations under this Agreement;
                or

            

    

    

    
      	11.1.2	
              is
                guilty of any conduct which in the reasonable opinion of the Board
                brings
                the Company or any Group Company into disrepute or is calculated
                or likely
                to prejudicially affect the interests of the Company whether or not
                the
                conduct occurs during or in the context of the Executive’s employment or
                in the Executive’s capacity as a director of the Company;
                or

            

    

    

    
      	
              11.1.3

            	
              in
                the reasonable opinion of the Board allows an actual or potential
                conflict
                between his personal interests and the Company’s interests to prejudice
                his ability to make decisions objectively to the best advantage of
                the
                Company; or

            

    

    

    
      	
              11.1.4

            	
              in
                the reasonable opinion of the Board exceeds the powers conferred
                on him by
                the articles of association of the Company;
                or

            

    

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

      
      

    

    
      	
              11.1.5

            	
              is
                convicted of any criminal offence (other than an offence under road
                traffic legislation for which he is not sentenced to any term of
                imprisonment whether immediate or suspended);
                or

            

    

    

    
      	
              11.1.6

            	
              commits
                any act of dishonesty whether or not relating to the Company any
                Group
                Company any of its or their employees;
                or

            

    

    

    
      	
              11.1.7

            	
              becomes
                bankrupt or makes any arrangement or composition with his creditors;
                or

            

    

    

    
      	
              11.1.8

            	
              is
                in the reasonable opinion of the Board incompetent in the performance
                of
                his duties.

            

    

    

    
      	11.2	
              Any
                delay on the part of the Company in exercising its right to terminate
                this
                Agreement under clause 11.1 shall not constitute a waiver of that
                right.

            

    

    

    
      	
              11.3

            	
              In
                the event that the Executive has been unable to perform his duties
                under
                this Agreement for a period of twenty-six weeks whether continuous
                or not
                in the previous continuous period of 12 months the Company shall
                be
                entitled to terminate this Agreement by giving to the Executive the
                minimum period of notice
                in writing permitted by statute.

            

    

    

    
      	11.4	
              In
                order to investigate a complaint against the Executive of misconduct
                the
                Company is entitled to suspend the Executive either with or without
                pay
                for so long as the Company may consider necessary to carry out a
                proper
                investigation and hold a disciplinary
                hearing.

            

    

    

    
      	12.	
              AMALGAMATION
                OR RECONSTRUCTION

            

    

    

    
      	
               

            	
              If
                the Executive shall unreasonably have refused or failed to accept
                employment offered to him by a Group Company on terms which taken
                as a
                whole are no less favourable to him than the terms in effect under
                this
                Agreement at the time such offer is made where there has been an
                amalgamation or reconstruction of the business of the Company the
                Executive agrees that to the extent permitted by law he shall have
                no
                claim against the Company in respect of the termination of this Agreement
                directly or indirectly in whole or in part by reason of such amalgamation
                or reconstruction whether such termination is caused by process of
                law or
                by the provisions of this Agreement or by the act or default of the
                Company or otherwise howsoever.

            

    

    
    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

      
      

    

    
      	13.	
              CONFIDENTIAL
                INFORMATION

            

    

    

    
      	
              13.1
                

            	
              The
                Executive shall not at any time either during or following the termination
                (whether lawful or not) of his employment (other than as required
                in the
                normal course of performing his duties under this Agreement or as
                ordered
                by a court of competent jurisdiction or with the approval of the
                Board or
                as required by law or by any regulator of any Group Company) either
                make
                use of or disclose to any person any confidential information belonging
                to
                any Group Company which is received by the Executive in the course
                of his
                employment (until such information comes into the public domain other
                than
                by reason of a breach of this obligation on the part of the Executive)
                including without limitation any trade secrets, business plans, prices,
                financial information, technical information relating to products,
                the
                names of customers and suppliers and potential customers and suppliers
                and
                any other information which the Company from time to time designates
                as
                confidential.

            

    

    

    
      	
              13.2
                

            	
              The
                Executive shall not make copies of or memorise any confidential documents
                records recordings or lists belonging to any Group Company and will
                on
                leaving service deliver up the same (and all copies of them whether
                or not
                originally provided to the Executive by the Company) including all
                notes
                lists and diaries and will retain no copies of them or notes relating
                to
                them.

            

    

    

    
      	14.	
              RESTRICTIONS

            

    

    

    
      	
              14.1

            	
              For
                twelve months following the termination of his employment whether
                lawful
                or not the Executive shall not without the written permission of
                the
                Company such permission not to be unreasonably withheld whether on
                his own
                account or on behalf of any other person firm or company and in any
                capacity directly or indirectly solicit entice away or endeavour
                to entice
                away from any Group Company any person firm or
                company:

            

    

    
    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
    

    
      	 	
              (i)

            	
              who
                is or has been a manufacturer for or supplier, client or customer
                of any
                Group Company (whether actual or prospective) during the twelve months
                preceding the termination of the employment of the Executive; and
                

            

    

    

    
      	 	
              (ii)

            	
              with
                whom the Executive shall have had material dealings in the course
                of his
                employment during the twelve months prior to its
                termination.

            

    

    

    
      	
              14.2

            	
              For
                twelve months following the termination of his employment whether
                lawful
                or not the Executive shall not without the written permission of
                the
                Company such permission not to be unreasonably withheld whether on
                his own
                account or on behalf of any other person firm or company and in any
                capacity directly or indirectly have business dealings with any person
                firm or company:

            

    

    

    
      	
            	(i)	
              who
                is or has been a manufacturer supplier client or customer (whether
                actual
                or prospective) of any Group Company during the twelve months preceding
                the termination of the employment of the Executive; and
                

            

    

    

    
      	
            	(ii)	
              with
                whom the Executive shall have had material dealings in the course
                of his
                employment during the twelve months prior to its
                termination.

            

    

    

    
      	
              14.3

            	
              Whilst
                the Executive continues as an employee or director of the Company
                and for
                twelve months following the termination of his employment whether
                lawful
                or not the Executive shall not without the written permission of
                the
                Company such permission not to be unreasonably withheld whether on
                his own
                account or on behalf of any other person firm or company and in any
                capacity directly or indirectly entice away or endeavour to entice
                away or
                offer employment to any person 

            

    

    
    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	(i)	
                who
                  at the date of termination of the employment of the Executive is
                  an
                  employee of any Group Company or an officer or agent of any such
                  company
                  employed in a senior managerial or sales capacity; and
                  

              

      

    

    

    
      	
            	(ii)	
              with
                whom the Executive shall have had material dealings in the course
                of his
                employment during the period of twelve months prior to its
                termination

            

    

    

    
      	
              14.4

            	
              For
                twelve months following the termination of his employment whether
                lawful
                or not the Executive shall not without the written permission of
                the
                Company such permission not to be unreasonably withheld be engaged
                interested or concerned in any capacity whether paid or unpaid in
                any
                business which is or is to his knowledge about to be engaged in any
                territory in which any Group Company carries on business in competition
                with any business of any Group Company in which the Executive shall
                have
                been engaged to a material extent in the course of his employment
                during
                the period of twelve months prior to its
                termination.

            

    

    

    
      	
              14.5

            	
              Nothing
                in this clause 14 shall prevent the seeking or doing of any business
                which
                is not in direct or indirect competition with the business of any
                Group
                Company in which the Executive shall have been engaged to a material
                extent during the period of twelve months preceding the termination
                of his
                employment with the Company.

            

    

    

    
      	
              14.6

            	
              In
                the event that the Company exercises its right under clause 2.6 to
                require
                the Executive not to perform any duties under this Agreement references
                to
                the termination or date of termination of the employment of the Executive
                in this clause 14 shall be construed as references to the last date
                on
                which the Executive performs duties for the Company under this
                Agreement.

            

    

    

    
      	
              14.7

            	
              The
                Company may assign the benefit of this clause 14 to any purchaser
                or owner
                for the time being of any business of any Group Company in which
                the
                Executive shall have been engaged to a material extent in the course
                of
                his employment during the period of twelve months preceding the
                termination of his employment and notwithstanding such assignment
                the
                Company shall also remain entitled to the benefit of this clause
                14.

            

    

    
    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

          

       

    

    
      	
              14.8

            	
              If
                so required by the Company the Executive shall enter into direct
                undertakings in the terms of this clause 14 mutatis mutandis with
                any
                Group Company or the purchaser or owner for the time being of any
                business
                of any Group Company in which the Executive shall have been engaged
                to a
                material extent in the course of his employment during the twelve
                months
                immediately preceding the date on which the Executive is required
                to enter
                into such undertaking and should he fail to do so the Company and
                each
                director of it for the time being is by this Agreement irrevocably
                and by
                way of security jointly and severally appointed as the attorney of
                the
                Executive in his name and on his behalf to sign and do any documents
                or
                things necessary to enter into such
                undertakings.

            

    

    

    
      	15.	
              STATUTORY
                PARTICULARS

            

    

    

    
      	 	
              The
                following are particulars of the terms of employment to be given
                to the
                Executive under the Employment Rights Act
                1996:

            

    

    

    
      	
              15.1

            	
              The
                employment of the Executive with the Company commenced on 9 March
                2004 and
                there is no period of employment with any previous employer which
                counts
                towards the Executive's period of continuous employment for statutory
                purposes.

            

    

    

    
      	
              15.2

            	
              Normal
                hours of work are 9.30am to 5.30pm from Monday to Friday with one
                hour for
                lunch. However, the Executive shall work such additional hours as
                are from
                time to time necessary for the proper performance of his duties and
                shall
                not be entitled to receive any additional remuneration for work outside
                the normal hours of work.

            

    

    

    
      	
              15.3

            	
              Subject
                to clauses 1.2 and 15.5 of this Agreement and unless otherwise agreed
                by
                the Board and the Executive, the Executive shall be required to work
                from
                the address of the Company set out above, at any principal business
                address of the Company from time to time or anywhere in the North
                West of
                England as from time to time directed by the Board. The Executive
                shall be
                required to work for a minimum of five days per week of which one
                day may
                be from home provided that if in the reasonable discretion of the
                Board
                the Executive is unable to properly perform his duties under this
                Agreement whilst working from home, the Executive shall be required
                to
                work from the address of the Company set out above, at any principal
                business address of the Company from time to time) or anywhere in
                the
                North West of England as from time to time directed by the
                Board.

            

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    
 

    
      	
              15.4

            	
              There
                are no collective agreements which directly affect the terms and
                conditions of employment of the
                Executive.

            

    

    

    
      	
              15.5

            	
              The
                Executive will not be required to work outside the United Kingdom
                for a
                continuous period of more than one month more than once in any twelve
                month period.

            

    

    

    
      	
              15.6

            	
              The
                Executive is subject to the disciplinary rules and procedures of
                the
                Company from time to time. Any disciplinary decision relating to
                the
                Executive will be taken by the Board in accordance with the term
                of the
                disciplinary policy set out in schedule
                1.

            

    

    

    
      	
              15.7

            	
              If
                the Executive has any grievance relating to his employment he should
                set
                it out in writing specifying the grounds of his complaint and submit
                it to
                the Board who will proceed in accordance with the procedure set out
                in
                schedule 2.

            

    

    
    

    
      
        	16.	
                PRIOR
                  AGREEMENTS

              

      

    

    

    
      	 	
              This
                Agreement is in substitution for all and any prior agreements or
                arrangements (whether or not under seal) between any Group Company
                and the
                Executive which shall be deemed to have been terminated by mutual
                consent
                with effect from the date of this Agreement without liability on
                either
                party but without prejudice to accrued rights and
                liabilities.

            

    

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    
 

    
      	17.	
              NOTICES

            

    

    

    
      	 	
              Any
                notice or other communication to be served given or made under this
                Agreement shall be in writing signed in the case of the Company by
                any
                director secretary or other duly authorised officer of the Company
                (and it
                shall be for the Executive to prove that such officer was not duly
                authorised either specifically or in the ordinary course of employment)
                and in the case of the Executive signed by the Executive and shall
                be
                sufficiently served if left at the address of the recipient set out
                in
                this Agreement or such other address at which notices may from time
                to
                time be properly given or forwarded to such address by first class
                post
                and if served by post shall be deemed to have been served on the
                second
                business day after the envelope containing the same properly addressed
                and
                prepaid was posted or may be served on the Executive by being given
                to him
                personally.

            

    

    

    
      	18.	
              GOVERNING
                LAW

            

    

    

    
      	
               

            	
              This
                Agreement shall be construed in accordance with the laws of England
                and
                shall be enforceable in the English Courts and the parties submit
                to the
                jurisdiction of such courts for all purposes connected with this
                Agreement
                and agree that any writ or other process required to be served for
                any
                purpose connected with this Agreement may be served in manner specified
                in
                clause 17.

            

    

    

    
      	19.	
              DEFINITIONS

            

    

    

    
      	
              19.1
                

            	
              Unless
                otherwise provided or the content otherwise requires words and phrases
                shall bear the meanings given to them in the Companies Act
                1985.

            

    

    

    
      	
              19.2

            	
              References
                to legislation shall be interpreted as references to any re-enactment
                replacement or modification of such
                legislation.

            

    

    

    
      	
              19.3
                

            	
              Headings
                are for convenience only and shall be disregarded when construing
                the
                provisions of this Agreement.

            

    

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    
 

    
      	
              19.4
                

            	
              Words
                importing the singular shall include the plural and vice
                versa.

            

    

    

    
      	
              19.5
                

            	
              Words
                importing the masculine gender shall include the feminine gender
                and vice
                versa.

            

    

    

    
      	
              19.6

            	
              References
                to clauses are references to clauses of this Agreement and references
                to
                sub-clauses are references to sub-clauses of the clause in which
                the
                reference appears.

            

    

    

    
      	
              19.7

            	
              "The
                Board" means the board of directors of the Company for the time being
                other than the Executive.

            

    

    

    
      	
              19.8
                

            	
              "Group"
                means the Company and its subsidiaries and holding companies from
                time to
                time and any subsidiary of any holding company and "Group Company"
                shall
                be construed accordingly.

            

    

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    SCHEDULE
      1

    Disciplinary
      Policy

    

    
      	
              1.1

            	
              GENERAL

            

    

    

    These
      disciplinary procedures are to ensure that the Company behaves fairly in
      investigating and dealing with allegations of unacceptable conduct or
      performance. You do not have a contractual right to be treated in accordance
      with these procedures which may be varied from time to time and the Company
      may
      depart from the precise requirements of its disciplinary procedure specified
      below.

    

    All
      cases
      of disciplinary action under these procedures will be recorded and placed in
      the
      Company’s records. A copy of the Company’s disciplinary records concerning you
      will be supplied to you at your request.

    

    The
      following steps will be taken, as appropriate, in all cases of disciplinary
      action:

    

    
      	
              1.2

            	
              INVESTIGATIONS

            

    

    

    No
      action
      will be taken before a proper investigation has been undertaken by the Company
      into the matter complained of. If appropriate, the Company may, by written
      notice, suspend you while the investigation takes place. If you are so suspended
      your Terms and Conditions of employment will continue, together with all your
      rights under your Terms and Conditions, including the payment of salary, but
      during the period of suspension you will not be entitled to access to any of
      the
      Company’s premises except at the prior written consent of the Company and
      subject to such conditions as the Company may impose. The decision to suspend
      you will be notified to you by the Board and conveyed in writing. You are
      required to co-operate with any disciplinary investigation.

    

    
      	
              1.3

            	
              DISCIPLINARY
                HEARINGS

            

    

    

    If
      the
      Company decides to hold a disciplinary hearing relating to the matter complained
      of, you will be given details of the complaint against you at least three
      working days before the hearing. At the hearing you will be given an opportunity
      to state your case. You may be accompanied by a fellow employee of your choice
      or trade union official (who is appropriately certified in writing by their
      union). No disciplinary penalty will be imposed without a disciplinary hearing,
      but a hearing may proceed in your absence if you fail to turn up.

    
    

    
      	 	
              1.3.1

            	
              Those
                with less than twelve months’
                service

            

    

      
      

    Following
      an investigation and disciplinary interview the disciplinary stage for those
      with less than 12 months’ service are final written warning and/or
      dismissal.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

     

    
      	 	
              1.3.2

            	
              Those
                with more than twelve months’
                service

            

    

    
    

    Following
      an investigation and disciplinary interview, the disciplinary stages for those
      with more than 12 months’ service are first warning, final warning and
      dismissal; note that in cases of gross misconduct summary dismissal will
      apply.

    
    

    
      	
              1.4

            	
              APPEALS

            

    

    

    You
      have
      a right to appeal against a disciplinary decision. The details of the person
      you
      can appeal to will be given to you at the disciplinary meeting, or as soon
      as
      possible thereafter. You should inform that person in writing of your wish
      to
      appeal within five working days of the date of the decision which forms the
      subject of your appeal.

    

    The
      appeal must set out the grounds on which you are making the appeal. Arrangements
      to hear the appeal will be made as soon as reasonably practical. You will have
      the right to be accompanied to an appeal by a fellow employee or Trade Union
      Official of your choice.

    

    The
      appeal will take the form of a re-hearing by a person who was not involved
      in
      the initial disciplinary hearing or investigation who will consider matters
      afresh.

    

    If
      you
      have been dismissed, your employment will be terminated whether or not you
      appeal: however, if your appeal is successful you will be re-instated and there
      will normally be no break in your continuity of employment.

    

    After
      the
      outcome of the appeal is known, no further right of appeal is possible and
      such
      decision will be final and binding.

    

    An
      appeal
      meeting may be adjourned to enable all facts to be considered or to obtain
      further clarification from others.

    

    
      	
              1.5

            	
              GROSS
                MISCONDUCT

            

    

    

    Certain
      acts of misconduct, breach of duty or acts which bring the Company into
      disrepute are treated so seriously by the Company that cases of this type can
      warrant summary dismissal without prior warning or notice.

    

    Matters
      which justify summary dismissal include, but are not limited to:

    
      
        	 	 	 

      

      
        	 	
                ·

              	
                failure
                  to obey a lawful order or instruction of the
                  Board;

              

      

    

     

    
      	 	
              ·

            	
              unauthorised
                disclosure of the affairs of a client or the Company to a third
                party;

            

    

     

    
      	 	
              ·

            	
              failure
                to observe the provisions of the Health and Safety at Work Act 1974;
                negligence or deliberate actions likely to cause injury to people
                or
                damage to equipment; actions leading to the loss or damage of the
                Company’s or client’s property or
                equipment;

            

    

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    
      	 	
              ·

            	
              being
                under the influence of alcohol or drugs which impact on your performance
                whilst working on the Company’s business. This includes any event, whether
                social, marketing or otherwise, at the Company’s premises or
                elsewhere;

            

    

     

    
      	 	
              ·

            	
              failure
                to follow the Company’s procedures with regard to IT security, including:-
                accessing, amending, copying or replicating computer information
                to which
                you have no right or authority; improper use of the Company’s or client’s
                systems or equipment; accessing, downloading, storing or forwarding
                inappropriate material from the internet, e.g. chain letters, junk
                email,
                or similar correspondence, indecent material or pornography; sending
                racially or sexually threatening or harassing messages or any form
                of
                indecent material or pornography; 

            

    

     

    
      	 	
              ·

            	
              soliciting
                money for personal gain, or in the operation of a personal
                business;

            

    

     

    
      	 	
              ·

            	
              gaining
                unauthorised access to any computer system of the Company or any
                other
                organisation or hacking into another web
                site;

            

    

     

    
      	 	
              ·

            	
              sending
                material that contains language which is offensive or that would
                upset
                others

            

    

     

    
      	 	
              ·

            	
              communicating
                material in a manner that would reflect poorly on the
                Company;

            

    

     

    
      	 	
              ·

            	
              use
                of any data stored in the Company’s systems other than in connection with
                related assignments;

            

    

     

    
      	 	
              ·

            	
              excessive
                use of the Company’s systems for personal
                matters;

            

    

     

    
      	 	
              ·

            	
              failure
                to account properly and promptly for all funds received, whether
                on
                account of clients or of the
                Company;

            

    

     

    
      	 	
              ·

            	
              unauthorised
                expenditure or commitment of Company
                funds;

            

    

     

    
      	 	
              ·

            	
              conviction
                of any criminal offence which in the reasonable opinion of the proprietors
                is likely to reflect adversely on the
                Company;

            

    

     

    
      	 	
              ·

            	
              fraud,
                theft, deception or dishonesty;

            

    

     

    
      	 	
              ·

            	
              theft
                or unauthorised possession of property belonging to the Company or
                any
                employee or any of the Company’s
                clients;

            

    

     

    
      	 	
              ·

            	
              serious
                damage to the Company or the Company’s clients’
                property;

            

    

     

    
      	 	
              ·

            	
              refusal
                to carry out duties or reasonable
                instructions;

            

    

     

    
      	 	
              ·

            	
              intoxication
                by drink or drugs;

            

    

     

    
      	 	
              ·

            	
              having
                alcoholic drink or illegal drugs in your possession, custody or control
                on
                the Company’s or clients premises;

            

    

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    
      	 	
              ·

            	
              serious
                breach of the Company’s rules;

            

    

     

    
      	 	
              ·

            	
              violent,
                dangerous or intimidatory conduct;

            

    

     

    
      	 	
              ·

            	
              sexual,
                racial or other harassment of a fellow
                employee;

            

    

     

    
      	 	
              ·

            	
              offering
                or receiving gratuities without first seeking authorisation from
                the
                Company;

            

    

     

    
      	 	
              ·

            	
              improper
                use of internet or email facilities or other equipment of the Company
                (please note the Company reserves the right to examine any correspondence
                (electronic or otherwise) received or sent out from your work address
                and/or with any equipment provided to you by the
                Company);

            

    

     

    
      	 	
              ·

            	
              tampering,
                changing or otherwise interfering with the Company’s software and hardware
                or other computer equipment or related data
                records;

            

    

     

    
      	 	
              ·

            	
              serious
                or wilful neglect of your duties;

            

    

     

    
      	 	
              ·

            	
              failure
                to follow the Company’s documented procedures and regulations or refusal
                to comply with the policies of the Company, for example, relating
                to
                expenses;

            

    

     

    
      	 	
              ·

            	
              Unauthorised
                release of data to clients and/or third
                parties.

            

    

     

    These
      examples are not exhaustive or exclusive and offences of a similar nature will
      be dealt with under this procedure.

    

    Gross
      misconduct will result in immediate dismissal without notice or pay in lieu
      of
      notice. The decision to dismiss will not be taken without reference to the
      Board. Dismissal will be notified to you in writing.

    

    
      	
              1.6

            	
              MISCONDUCT

            

    

    

    The
      following offences are examples of misconduct:

    

    
      	 	
              ·

            	
              Bad
                time-keeping;

            

    

     

    
      	 	
              ·

            	
              Unauthorised
                absence;

            

    

     

    
      	 	
              ·

            	
              Minor
                damage to the Company’s property;

            

    

     

    
      	 	
              ·

            	
              Minor
                breach of the Company’s rules;

            

    

     

    
      	 	
              ·

            	
              Failure
                to observe the Company’s
                procedures;

            

    

     

    
      	 	
              ·

            	
              Abusive
                behaviour;

            

    

     

    
      	 	
              ·

            	
              Non-performance
                of your duties in the opinion of the
                Company;

            

    

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    
      	 	
              ·

            	
              Any
                conduct which, in the opinion of the Directors, brings you or the
                Company
                into disrepute;

            

    

     

    
      	 	
              ·

            	
              A
                minor failure to comply with any duties expressly set out in your
                job
                description.

            

    

     

    These
      offences are not exclusive or exhaustive and offences of a similar nature will
      be dealt with under this procedure.

    

    If
      the
      investigation and disciplinary hearing stages indicate that there are grounds
      for action, then the following steps will be taken. The stages will normally
      occur sequentially but we reserve the right to advance the procedures where
      appropriate. These procedures may also be amended in exceptional circumstances,
      for example if you are absent due to sickness or to accommodate any disabilities
      you may have.

    

    If
      at a
      disciplinary hearing a complaint against you is upheld any one of the following
      disciplinary penalties will be available to the Company if you have 12 months
      continuous service:

    

    

    

    
      	
              1.7

            	
              FIRST
                WARNING 

            

    

    

    This
      may
      be oral or written according to the circumstances. In either event, you will
      be
      advised that the warning constitutes the first formal stage of this procedure.
      If the warning is verbal, a note that such a warning has been given will be
      placed in the Company’s records.

    

    
      	
              1.8

            	
              FINAL
                WARNING 

            

    

    

    This
      will
      be confirmed to you in writing. This warning will state that, if you commit
      a
      further offence of misconduct during the period specified in it, your employment
      will be terminated.

    

    
      	
              1.9

            	
              DISMISSAL

            

    

    

    The
      decision to dismiss you will not be taken without reference to a Director of
      the
      Company and will be notified to you in writing.

    

    
      	
              1.10

            	
              INCAPABILITY

            

    

    

    The
      following are examples of incapability:

    

    
      	 	
              ·

            	
              Poor
                performance

            

    

     

    
      	 	
              ·

            	
              Incompetence

            

    

     

    
      	 	
              ·

            	
              Unsuitability

            

    

     

    
      	 	
              ·

            	
              Lack
                of application

            

    

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    These
      examples are not exhaustive or exclusive and instances of a similar nature
      will
      be dealt with under this procedure.

    

    Any
      one
      of the following penalties will be available to the Company in cases of
      incapability, which are upheld following a disciplinary interview and you have
      12 months continuous service:

    

    
      	
              1.11

            	
              FIRST
                WARNING

            

    

    

    This
      will
      be confirmed in writing. This warning will specify the improvement required
      and
      will state that your work will be reviewed at the end of a specific time period
      after the date of the warning.

    

    
      	
              1.12

            	
              FINAL
                WARNING

            

    

    

    This
      will
      be confirmed to you in writing. This warning will state that unless your work
      improves within a specific time period after the date of the warning, your
      employment will be terminated.

    

    
      	
              1.13

            	
              DISMISSAL

            

    

    

    The
      decision to dismiss you will not be taken without reference to a Director of
      the
      Company. Dismissal will be notified to you in writing.

    

    
      	
              1.14

            	
              UNSATISFACTORY
                SICKNESS RECORD

            

    

    

    The
      following are examples of unsatisfactory attendance:

    

    
      	 	
              ·

            	
              long-term
                absence due to injury or sickness

            

    

    

    
      	 	
              ·

            	
              frequent
                short-term absence due to minor
                ailments.

            

    

    

    
      	 	
              ·

            	
              In
                appropriate circumstances, the Company may require you to
                be:

            

    

    

    
      	 	
              ·

            	
              examined
                by an independent medical practitioner of its choosing. In this event,
                you
                agree to co-operate with such a request and to permit the medical
                practitioner to discuss with the Company, the findings of the examination
                and their prognosis for your future recovery;
                and/or

            

    

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    
    

    
      	 	
              ·

            	
              interviewed
                by an Company representative (at your home, if necessary) if there
                is a
                possibility, in the Company’s opinion, that your absence is wholly or
                partly due to a personal or domestic difficulty or there are other
                circumstances with which the Company might be able to assist
                you.

            

    

     

    The
      findings of the medical practitioner and/or Company representative will be
      taken
      into account when the Company considers the kind of action, if any, which it
      will take against you in respect of your absence from work.

     

    If
      appropriate, after such examination/interview, you may be given a first warning
      which will be confirmed to you in writing. This warning will specify a period,
      the length of which (usually, between 1 and 6 months) will depend upon your
      particular health or welfare difficulties over which your attendance will be
      monitored by the Company and a specified measure of improvement will be required
      of you at the end of which you will be expected to have returned to
      work.

    
    

    If
      appropriate at the end of such period, you may be required to undergo another
      examination and/or interview the result of which the Company will take into
      account when it considers the kind of action, if any, which it is appropriate
      to
      take against you. Such action may include:

     

    
      	 	
              ·

            	
              the
                issue of a final warning which will be confirmed to you in writing
                and
                will specify a further period over which your attendance will be
                monitored
                and the level of improvement expected of you during such period.
                This
                warning will state that failure to show the necessary improvement
                within
                the specified period will result in your dismissal;
                or

            

    

     

    
      	 	
              ·

            	
              your
                dismissal on notice if the Company concludes, following your medical
                examination, that you are not likely to be fit to return to work
                in the
                foreseeable future and that, in all the circumstances, the needs
                of its
                business render it impracticable to await further your return to
                health or
                fitness; or

            

    

     

    The
      decision to dismiss you will not be taken without reference to a Director of
      the
      Company and will be notified to you in writing.

     

    Subject
      to satisfactory performance and conduct any warning under these procedures
      will
      be removed from the Company’s records after twelve months.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    SCHEDULE
      2

    Grievance
      Procedure

    

    The
      Company will try to resolve, as quickly as possible, any grievance/complaint
      you
      may have about your employment. Outlined in this section is the action you
      should take to make your grievance heard. These procedures may be amended in
      exceptional circumstances, for example if you are absent due to sickness or
      for
      us to accommodate any disabilities.

     

    

    In
      the
      first instance you should raise your complaint with The Board. It is hoped
      that
      most grievances can be dealt with on an informal basis by a Director who will
      be
      appointed to deal with such grievance.

    

    You
      are
      entitled to be accompanied to formal grievance meetings by a work companion
      or
      Trade Union representative, who will be able to address the hearing on your
      behalf. 

    

    If
      you
      wish to raise a formal grievance the following stages should be
      followed:

    

    
      	
              1.1

            	
              Stage
                One

            

    

    

    If
      a
      Director cannot satisfactorily resolve the problem informally, you should put
      your grievance to the Board in writing, Thereafter, the Company shall arrange
      a
      meeting with you as soon as reasonably practicable. You have the right to be
      accompanied to that meeting by a Trade Union Representative or work
      companion.

     

    

    
      	
              1.2

            	
              Stage
                Two

            

    

    

    If
      you
      are dissatisfied with the outcome of stage one or the matter is of a serious
      nature, you should appeal the issue to the Board. The Board will then arrange
      for a Director not previously involved in stage 1 to see you to discuss the
      matter fully and to try to reach a satisfactory solution. You will be informed
      of the outcome and any proposed action and a record of the grievance will be
      made. The decision at this level will be final. You have the right to be
      accompanied to that meeting by a Trade Union Representative or work
      companion.

     

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    I
      N W I T N E S S
      this
      agreement has been executed as a deed

    

      

        
          	
                  Signed
                    and delivered as a deed by

                	
                  )

                
	
                  the
                    Company

                	
                  )

                
	
                  acting
                    by a director and its

                	
                  )

                
	
                  secretary

                	
                  )

                
	 	 
	 	 
	
                  Director

                	 
	 	 
	 	 
	
                  Secretary

                	 
	 	 
	 	 
	 	 
	 	 
	
                  Signed
                    and delivered as a deed by

                	
                  )

                
	
                  the
                    Executive

                	
                  )

                
	
                  in
                    the presence of:-

                	
                  )

                

        

      

    
      
        
        

      

      
        26

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