1
EXHIBIT 10.26
DATED 7th June 1997
(1) X.X. XXXXXXXX AND X. X. XXXXXXXX
(2) MANUGISTICS U.K. LIMITED
(3) MANUGISTICS GROUP, INC.
AGREEMENT
FOR THE ACQUISITION OF SHARES IN
SYNCHRONOLOGY GROUP LIMITED
2
CONTENTS
CLAUSE
1 INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . 1
2 SALE OF THE SHARES . . . . . . . . . . . . . . . . . . . . . 6
3 CONSIDERATION . . . . . . . . . . . . . . . . . . . . . . . . 7
4 COMPLETION . . . . . . . . . . . . . . . . . . . . . . . . . 7
5 WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . 8
6 COMPETITION . . . . . . . . . . . . . . . . . . . . . . . . . 9
7 PENSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 9
8 RETENTION AND JOINT ACCOUNT AND SET-OFF . . . . . . . . . . 10
9 GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . . . 13
10 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . 15
11 GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . 16
SCHEDULE
1 THE VENDORS
2 THE COMPANY
3 THE IMMOVABLE PROPERTY
4 THE INTELLECTUAL PROPERTY
5 MATTERS TO BE DONE BY THE VENDORS ON COMPLETION
6 THE WARRANTIES
7 PROVISIONS CONCERNING THE WARRANTIES
8 COMPETITION
3
AGREEMENT dated 1997
BETWEEN:
(1) THE PERSONS named in column (1) of Schedule 1 ('THE VENDORS')
(2) MANUGISTICS U.K. LIMITED of Xxxxxxxxxxx Xxxxx, Xxxxxxxxx Xxxxxxx,
Xxxxxxxxx, Xxxxxxxxx XX00 0XX ('THE PURCHASER')
(3) MANUGISTICS GROUP, INC. of 0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx 00000, XXX ('THE GUARANTOR')
1 INTERPRETATION
1.1 In this Agreement, unless the context otherwise requires -
'THE ACCOUNTING DATE' means 30 April 1997;
'THE ACCOUNTS' means, in relation to each Group Company, its audited
balance sheet as at the Accounting Date and its audited profit and
loss account and audited cash flow statement for the year ended on the
Accounting Date (including the notes), together with the reports and
other documents required by law to be annexed or attached to them;
'BUSINESS DAY' means a day, except Saturday and Sunday, on which banks
in the City of London and in the United States of America are
generally open for business;
'THE COMPANIES ACT' means the Companies Xxx 0000;
'THE COMPANY' means Synchronology Group Limited, particulars of which
are set out in Part 1 of Schedule 2;
4
'COMPETENT AUTHORITY' includes any national or supra-national court,
the European Commission and any governmental or local authority or
other body exercising powers pursuant to any Act of Parliament or
Royal Charter;
'COMPLETION' means the completion of the sale and purchase of the
Shares in accordance with the provisions of clause 4;
'CONFIDENTIALITY LETTER' means a letter in the agreed form relating to
the maintenance of confidentiality of software owned or used by
customers of any Group Company;
'CONNECTED PERSON' means, in relation to any other person, a person
who is connected with that other person within the meaning of section
839 of the Income and Corporation Taxes Xxx 0000;
'CONSENT' includes any licence, approval, authorisation, permission,
waiver, order or exemption;
'THE DEED OF VARIATION' means a deed of variation of the same date as
this Agreement between (1) X.X. Xxxxxxxx and X.X. Xxxxxxxx as the
Managing Trustees of Synchronized Manufacturing Limited Retirement
Benefit Scheme and (2) Synchronized Manufacturing Limited varying the
Lease;
'THE DIRECTORS' PENSION SCHEME' means the Synchronized Manufacturing
Limited Retirement Benefits Scheme created by a Trust Deed dated 24th
April 1989 between Synchronized Manufacturing Limited, X.X. Xxxxxxxx
and X.X. Xxxxxxxx as amended from time to time;
'THE DISCLOSURE LETTER' means a letter of the same date as this
Agreement addressed by the Vendor's Solicitors to the Purchaser's
Solicitors for the
5
purpose of Schedule 7 and is accepted as such by the Purchaser's
Solicitors, and includes any document which is stated in that letter
to be deemed to be included in or to be attached to it;
'GROUP COMPANY' means each member of the group of companies consisting
of the Company and each of its subsidiary undertakings, particulars of
which are set out in Part 2 of Schedule 2;
'THE IMMOVABLE PROPERTY' means the leasehold property known as
Merchant House, 14-20 (even numbers), Xxxxxx Xxxx, Xxxxxxx, Xxxxxxxxx
XX00 0XX as the same is demised by and more particularly described in
the Lease;
'THE INTELLECTUAL PROPERTY' means the intellectual property described
in Schedule 4;
'THE JOINT ACCOUNT' means the joint account to be opened pursuant to
clause 8.1 at Lloyds Bank plc of 00 Xxxxxxxxxxxx Xxxxxx, Xxxxxx, XX0;
'LEASE' means a lease dated 14th June 1996 of the Immovable Property
made between (1) X.X. Xxxxxxxx and X.X. Xxxxxxxx as Managing Trustees
of Synchronized Manufacturing Limited Retirement Benefit Scheme and
(2) Synchronized Manufacturing Limited;
'LEGISLATION' includes all Acts of Parliament, Laws of Belgium, all
applicable provisions of the Treaties constituting the European
Community, the European Union and the European Economic Area and all
orders and regulations made pursuant to such an Act, Law or Treaty or
otherwise having the force of law; and a reference to a provision of
any Legislation -
6
- is a reference to that provision as amended or modified on the
date of this Agreement;
- includes a reference to any previous Legislation which was
re-enacted or replaced by that provision and any future
Legislation which re-enacts or replaces that provision; and
- in the case of a reference to a statutory provision, includes a
reference to any statutory instrument or order made prior to the
date of this Agreement pursuant to that provision;
- in the case of Synchronized Manufacturing S.A., one of the Group
Companies, includes a reference to any provision of Legislation
in Belgium which corresponds or is of similar effect thereto;
'XX. XXXXXXXX' means Xxxxxxx Xxxxxxxx, one of the Vendors;
'PAYMENT DATE' means the date which is 12 months after the date of
Completion;
'THE PURCHASER'S SOLICITORS' means Xxxxxxxx Xxxxxx of Xxxxxxxx Xxxxx,
00 Xx. Xxxxxxx Xxxxxx, Xxxxxx XX0X 0XX
'THE PURCHASER'S ACCOUNTANTS' means Deloitte & Touche;
'RETENTION' means the sum referred to in clause 3.1(b) as reduced from
time to time by payments made in accordance with this Agreement;
'SERVICE AGREEMENT' means an agreement in the agreed form between Xx.
Xxxxxxxx and the Purchaser;
7
'THE SHARES' means all the issued shares in the Company;
'TAX' has the same meaning as in the Tax Indemnity;
'THE TAX INDEMNITY' means a deed of covenant against liability to Tax
in the agreed form;
'THE VENDORS' SOLICITORS' means Manches & Co. of 0 Xxxxxxxxx Xxxxxx,
Xxxxxx XX0 0XX;
'THE WARRANTIES' means the representations and warranties contained
in Schedule 6;
'THE WARRANTOR' means Xx. Xxxxxxxx; and
'WARRANTY CLAIM' means any claim made by the Purchaser for breach of
any of the Warranties or any claim made by the Purchaser or any Group
Company under the Tax Indemnity.
1.2 In this Agreement, unless the context otherwise requires -
(a) an expression which is defined in or to which a meaning is
assigned for the purpose of the Companies Act (excluding its
Schedules) has the same meaning unless it is otherwise defined
in this Agreement;
(b) a reference to a document 'IN THE AGREED FORM' is a reference to
a document in the form of the draft which, for identification,
is endorsed with a statement (signed on behalf of the parties)
to the effect that it is such a document for the purpose of this
Agreement;
8
(c) a reference to a clause or a Schedule is a reference to a clause
of or a Schedule to this Agreement and a reference to this
Agreement includes a reference to each Schedule; and
(d) references to the masculine shall include a reference to the
feminine and/or neuter and vice versa and references to the
singular shall include the plural and vice versa.
1.3 The headings in this Agreement are for convenience only and shall not
affect its interpretation.
1.4 Where any Warranties are qualified by the expression 'so far as the
Warrantor is aware' or 'to the best of the knowledge of the Warrantor'
or any similar expression, that expression shall be deemed to include
an additional statement that it has been made after such due and
careful inquiry as was reasonable and practicable in the circumstances
and the Warrantor shall be deemed to have knowledge of anything of
which he ought reasonably to have knowledge had such inquiries been
made.
2 SALE OF THE SHARES
2.1 Each of the Vendors shall sell and the Purchaser shall buy the number
of Shares set opposite his name in column (2) of Schedule 1, subject
to the terms and conditions of this Agreement.
2.2 The Shares shall be sold free from all rights of pre-emption, options,
liens, charges and encumbrances and with all rights now or hereafter
becoming attached thereto.
2.3 The Purchaser shall not be bound to complete its purchase of any of
the Shares unless the Vendors complete the sale of all the Shares
simultaneously.
9
2.4 Each of the Vendors hereby waives any rights which he may have whether
under the Articles of Association of the Company or otherwise to have
any of the Shares offered to him for purchase prior to or in
consequence of the sale or transfer of the Shares to the Purchaser or
its nominees pursuant to this Agreement.
3 CONSIDERATION
3.1 The total consideration for the Shares shall be the sum of pound
sterling 1,766,666 payable in the proportions set out in column 3 of
Schedule 1 which shall be satisfied by -
(a) the sum of pound sterling 1,406,666 being paid at Completion to
the Vendors in cash;
(b) the sum of pound sterling 360,000 which shall be dealt with in
the manner provided in clause 8.1.
3.2 Any payment made by either of the Vendors under the Warranties or
under the Tax Indemnity shall be treated as a reduction in the
consideration for the Shares sold by him.
4 COMPLETION
4.1 The sale and purchase of the Shares shall be completed at the offices
of the Purchaser's Solicitors or such other place as the parties agree
forthwith upon the execution of this Agreement.
4.2 The Vendors shall on Completion do, or procure to be done, the things
specified in Schedule 5 (in so far as they have not already been
done).
4.3 Following the performance of the Vendors' obligations under clause
4.2, the Purchaser shall on Completion -
10
(a) pay to the Vendors by telegraphic transfer to the bank account
of the Vendors' Solicitors at Lloyds Xxxx Xxx, 000 Xxx Xxxxxx,
XX0 (Sort Code 30-00-04, account number 816400) the sum payable
in cash under clause 3.1;
(b) procure repayment of all monies owing at Completion by each
Group Company to either of the Vendors or any Connected Person;
(c) deliver to the Vendors a counterpart of the Tax Indemnity duly
executed by the Purchaser as a deed;
(d) deliver to the Vendors the Confidentiality Letter duly executed
by the Guarantor; and
(e) deliver to Xx.Xxxxxxxx the Service Agreement duly executed by
the Purchaser;
(g) deliver to Xxx. Xxxxxxxx a Service Agreement duly executed by
the Company; and
(h) pay the Retention into the Joint Account.
The Purchaser may deliver the items specified in paragraphs (b) to (g)
(inclusive) of this clause 4.3 to the Vendors' Solicitors, whose
receipt shall be a sufficient discharge to the Purchaser.
5 WARRANTIES
5.1 The Warrantor represents and warrants to the Purchaser in the terms
contained in Schedule 6, subject to the provisions of Schedule 7, and,
in so far as the Warranties relate in whole or in part to matters of
fact, they shall constitute the
11
sole representations upon the faith of which the Purchaser has entered
into this Agreement.
5.2 The Purchaser hereby confirms that it has not been induced to enter
into this Agreement by any statement or statements of fact or opinion
other than such (if any) as are contained in the Warranties such
statements being subject to all matters disclosed in the Disclosure
Letter.
5.3 The Purchaser warrants and represents that it is not aware of any
facts or circumstances which at the date hereof give rise to a breach
of warranty.
6 COMPETITION
6.1 In consideration of the purchase of the Shares each of the Vendors
undertakes with the Purchaser that he will, and will procure that
every Connected Person of his will, comply with the provisions of
Schedule 8.
6.2 Each of the Vendors acknowledges that he considers the restrictions
contained in Schedule 8 are reasonable in the interests of both the
Vendors and the Purchaser, do not and would not deprive either of them
of their livelihood and are necessary for the protection of the
goodwill and confidential information of each Group Company.
7 PENSIONS
7.1 The Purchaser undertakes that, in the event that the Company or any
of its subsidiaries shall at any time in the future become entitled to
any surplus of assets (whether in cash or in specie) arising in the
Directors' Pension Scheme, the Purchaser shall transfer to the Vendors
the surplus received out of such Scheme promptly following the receipt
thereof.
12
7.2 The Vendors undertake that, if at any time in the future a shortfall
of assets (whether in cash or in specie) arises in the Directors'
Pension Scheme, the Vendors shall indemnify and keep indemnified the
Purchaser and the Company in respect of any liability resulting from
the shortfall.
7.3 The Vendors shall indemnify and keep indemnified the Purchaser and the
Company against:
(a) any liability which the Purchaser or the Company may incur
arising in consequence of any failure on the part of the
Trustees of the Director's Pension Scheme to comply fully with
such conditions of the Inland Revenue for exempt approval of the
Directors' Pension Scheme under Chapter I Part XIV of the Income
and Corporation Taxes Act 1988 as were applicable or relevant to
the granting by such trustees of the lease in respect of the
Company's premises and all costs, charges and expenses arising
in connection therewith; and
(b) any costs and expenses incurred by the Purchaser and the Company
in connection with the making of such amendments to the Trust
Deed and Rules of the Directors' Pension Scheme as may be
necessary to remedy any such failure on the part of the trustees
as mentioned in (a) above.
8 RETENTION AND JOINT ACCOUNT AND SET-OFF
8.1 The Retention shall on Completion be paid into the Joint Account,
which shall be opened in the names of the Vendors' Solicitors and the
Purchaser's Solicitors.
8.2 Subject to clauses 8.3 and 8.4, the Vendors' Solicitors and the
Purchaser's Solicitors shall pay the amount standing to the credit of
the Joint Account, plus any accrued interest, to the Warrantor on the
Payment Date.
13
8.3 If, before the Payment Date, the Purchaser makes any Warranty Claim in
good faith in accordance with the terms of this Agreement or the Tax
Indemnity, the Vendors' Solicitors and the Purchaser's Solicitors
shall retain in the Joint Account whichever is the lesser of -
(a) the amount standing to the credit of the Joint Account (plus
accrued interest); and
(b) the amount of the Warranty Claim.
Any balance of the Retention shall be paid to the Warrantor subject to
and in accordance with clause 8.2.
8.4 If any sum is retained in the Joint Account after the Payment Date in
accordance with clause 8.3, the Vendors' Solicitors and the
Purchaser's Solicitors shall continue to hold it in the Joint Account
pending the settlement or resolution or withdrawal or deemed
withdrawal of the Warranty Claim. When the Warranty Claim is settled
or resolved and the amount payable to the Purchaser or to the relevant
Group Company determined, the Vendors' Solicitors and the Purchaser's
Solicitors shall within 2 Business Days of the determination pay the
appropriate amount to the Purchaser or to the relevant Group Company
out of the Joint Account (insofar as there is sufficient standing to
the credit of the Joint Account), save that where a Warranty Claim
comprises a claim under the Tax Indemnity the time for payment shall
be governed by clause 7 of the Tax Indemnity and the Consideration
shall be reduced by that amount. Any amount standing to the credit of
the Joint Account after settlement or resolution or withdrawal or
deemed withdrawal of all Warranty Claims made prior to the Payment
Date shall be paid to the Warrantor subject to and in accordance with
clause 8.2.
14
8.5 The payment of any sum to the Purchaser or to the relevant Group
Company in accordance with clause 8.4 in or towards satisfaction of
any Warranty Claim shall reduce the liability in respect of such
Warranty Claim pro tanto accordingly and subject thereto such Claim
shall not in any way prejudice or affect any other rights or remedies
of the Purchaser or the relevant Group Company for the purpose of
recovering any additional amount due from the Warrantor.
8.6 The interest accrued on the Retention shall belong to the Vendors and
the Purchaser in proportion to the respective amounts of the Retention
released to each of them from time to time.
8.7 The Warrantor and the Purchaser shall at Completion give irrevocable
instructions to the Vendors' Solicitors and the Purchaser's Solicitors
respectively in the agreed form to procure compliance with clauses
8.2, 8.3 and 8.4. The Vendors' Solicitors and the Purchaser's
Solicitors shall not be required to take any action with respect to
the Joint Account except on the written instructions of the Warrantor
and the Purchaser.
8.8 Any payment out of the Joint Account to the Warrantor shall be made to
the Warrantor in accordance with the written instructions of the
Vendors' Solicitors and, failing instructions, to the Warrantor.
8.9 If any Warranty Claim is made in good faith in accordance with the
terms of this Agreement or at any time under the Tax Indemnity, and
for so long as any sum is retained in the Joint Account such Warranty
Claim is in excess of any sum so retained, then the Purchaser shall be
entitled to withhold from remuneration or other payments (if any) due
to the Warrantor under the Service Agreement the amount by which any
such remuneration or other payments would otherwise exceed pound
sterling 80,000 per annum.
15
8.10 If any sum is retained at any time by the Purchaser in accordance with
clause 8.9 the Purchaser shall continue to retain the same pending
settlement, resolution, withdrawal or deemed withdrawal of the
Warranty Claim. When the Warranty Claim is settled or resolved, the
Purchaser shall within two Business Days of the determination pay to
the Warrantor the amount, if any, by which the amount so retained when
added to any amount which may then be due and payable to the
Purchaser or relevant Group Company from the Joint Account exceeds the
amount due to the Purchaser or relevant Group Company in respect of
the Warranty Claim and the Purchaser shall retain or account to the
relevant Group Company for the remainder of the amount so retained in
or towards satisfaction of the amount due in respect of the Warranty
Claim.
8.11 The payment of any sum under clause 8.10 in or towards satisfaction of
any Warranty Claim shall reduce the liability of the Warrantor in
respect of such Warranty Claim pro tanto accordingly and subject
thereto shall not in any way prejudice or affect any other rights or
remedies of the Purchaser or relevant Group Company for the purpose of
recovering any additional amounts due from the Warrantor.
8.12 The Purchaser shall pay to the Warrantor interest calculated at two
per cent per annum above the base rate from time to time of Lloyds
Bank plc on any sum paid to the Warrantor under clause 8.10 in respect
of the period from the date on which the sum was payable under the
Service Agreement by the Purchaser to the date on which payment was
made under clause 8.10.
9 GUARANTEE
9.1 In consideration of the Vendors entering into and performing their
respective obligations under this Agreement, and subject to the
following terms and conditions of this clause, the Guarantor
unconditionally and irrevocably guarantees to the Vendors -
16
(a) the due and punctual payment by the Purchaser and every
subsidiary of the Guarantor ('TOGETHER THE OBLIGORS') of all
sums due to the Vendors by the Obligors hereunder under this
Agreement or any other agreement to be entered into by any of
the Obligors with any of the Vendors pursuant to this Agreement
including without limitation the Service Agreement; and
(b) the due and punctual performance by the Obligors of all other
obligations of the Obligors whether under this Agreement or any
other agreement to be entered into by any of the Obligors with
any of the Vendors pursuant to this Agreement, including without
limitation the Service Agreement.
9.2 The guarantee in this clause is a continuing guarantee and shall
remain in force so long as the any of the Obligors has or may have any
obligation to the Vendors under this Agreement or any other agreement
to be entered into by any of the Obligors with any of the Vendors
pursuant to this Agreement, including without limitation the Service
Agreement.
9.3 The guarantee in this clause shall not be affected and the Guarantor
shall not be exonerated in any way by -
(a) any time, indulgence or concession being granted to any of the
Obligors;
(b) any modification to this Agreement or any other agreement to be
entered into by any of the Obligors with any of the Vendors
pursuant to this Agreement, including without limitation the
Service Agreement or any variation, compromise or release of any
of the Obligors' obligations under this Agreement or any other
agreement to be entered into by any of the Obligors with any of
the Vendors pursuant to this Agreement, including without
limitation the Service Agreement.;
17
(c) the availability to the Vendors of any other surety with respect
to the Obligors' obligations to the Vendors under this Agreement
or any other agreement to be entered into by any of the
Obligators with any of the Vendors pursuant to this Agreement,
including without limitation the Service Agreement;
(d) the insolvency, receivership, administration, liquidation or
dissolution or any change in the composition of any of the
Obligors;
(e) any failure, defect, illegality or unenforceability of or in any
of the Obligors' obligations under the Agreement or any other
agreement to be entered into by any of the Obligors with any of
the Vendors pursuant to this Agreement, including without
limitation the Service Agreement; or
(f) anything which the Vendors may do or omit to do, or any other
dealing, thing or circumstance which but for this provision
would or might operate to affect the guarantee in this clause or
exonerate the Guarantor.
10 NOTICES
10.1 Any notice or other communication to be given under this Agreement to
either party may be given by delivering it by hand or sending it by
facsimile transmission or by prepaid first class (airmail in the case
of the Guarantor) post -
(a) in the case of either of the Vendors, to his address shown in
the register of members of the Company on the date of this
Agreement with a copy to the Vendors' Solicitors (Ref: RFJ);
(b) in the case of the Purchaser, to its address set out at the
beginning of this Agreement with a copy to Manugistics Group,
Inc., Legal Department, 0000 X Xxxxxxxxx Xxxxxx, Xxxxxxxxx, XX
00000 XXX; and
18
(c) in the case of the Guarantor, to its Legal Department as
aforesaid with a copy to the Purchaser's Solicitors.
or, in the case of any party, to such other address as that
party may have notified to the other party in writing from time
to time; and any notice or other communication so given to
either of the Vendors shall be deemed to have been given to both
of them.
10.2 A notice or other communication delivered by hand or sent by facsimile
transmission shall be deemed to be given -
(a) at the time of delivery or transmission if it is delivered or
transmitted before 6.00 p.m. on a Business Day; and
(b) in any other case at 9.00 a.m. on the next following Business
Day.
10.3 A notice or other communication sent by post in the manner provided by
clause 10.1 shall be deemed to be given on the expiry of 72 hours
after the envelope containing it was posted; and proof that the
envelope was properly addressed, prepaid and posted shall be
sufficient evidence that the notice or other document was duly given.
11 GENERAL
11.1 The parties shall pay their own respective costs and expenses in
connection with and incidental to this Agreement.
11.2 Except as required by law no announcement of the terms of this
Agreement shall be made by either party without the consent of the
other and pending any announcement each party shall use its best
endeavours to keep the existence of this Agreement and its terms
confidential.
19
11.3 Time shall not be of the essence of this Agreement.
11.4 The provisions of this Agreement, insofar as they have not been
performed at Completion, shall remain in full force and effect
notwithstanding Completion.
11.5 This Agreement together with the documents referred to herein
constitutes the whole agreement of the parties in relation to its
subject matter and supersedes any previous agreement between them in
relation to that matter; and no modification of this Agreement shall
be effective unless it is made in writing.
11.6 The exercise, or partial exercise, of or any delay or omission in
exercising any right conferred by this Agreement on either party shall
not constitute a waiver of that or any other right or remedy available
to that party.
11.7 If any provision of this Agreement is held by a Competent Authority to
be invalid or unenforceable in whole or in part, this Agreement shall
continue to be valid as to its other provisions and the remainder of
the affected provision.
11.8 Every liability expressed to be that of the Vendors under this
Agreement shall be their several liability.
11.9 This Agreement may be executed in more than one counterpart and shall
come into force once each party has executed such a counterpart in
identical form and exchanged it with the other parties.
11.10 English law shall apply to the whole of this Agreement and the parties
submit to the non-exclusive jurisdiction of the English courts and the
Guarantor hereby irrevocably appoints the Purchaser's Solicitors as
its agents for the purpose of accepting service of court proceedings.
20
SCHEDULE 1
THE VENDORS
(1) (2) (3)
NAMES OF THE VENDORS NUMBER OF SHARES TO BE SOLD APPORTIONMENT OF CONSIDERATION
X.X. Xxxxxxxx 17,820 'A' Ordinary Shares pound sterling 20,460
1,728,540 'B' Ordinary Shares pound sterling 1,728,540
X.X. Xxxxxxxx 180 'A' Ordinary Shares pound sterling 206
17,460 'B' Ordinary Shares pound sterling 17,460
21
SCHEDULE 2
PART 1
THE COMPANY
1 NAME : Synchronology Group Limited
2 REGISTERED NUMBER : 311085
3 REGISTERED OFFICE : Brooklands
00 Xxxxxxx Xxxxxx
Xxxxxxx
Xxxxxxxxxxx XX00 0XX
4 DATE AND PLACE OF INCORPORATION : 12.10.95, England
5 AUTHORISED SHARE CAPITAL : 900,000 'A' Ordinary Shares of pound sterling 1
each
10,000,000 'B' Ordinary Shares of 1p each
6 ISSUED SHARE CAPITAL : 18,000 'A' Ordinary Shares
1,746,000 'B' Ordinary Shares
7 DIRECTORS : X X Xxxxxxxx
X X Xxxxxxxx
8 SECRETARY : X X Xxxxxxxx
22
9 AUDITORS : Xxxxx & Xxxxxx
10 ACCOUNTING REFERENCE DATE : 30 April
11 TAX DISTRICT AND REFERENCE : LP34 225/S2980
12 VAT NUMBER : 641923246
23
SCHEDULE 2
PART 2
THE COMPANY'S SUBSIDIARY UNDERTAKINGS
1 NAME : Synchronized Manufacturing Limited
2 REGISTERED NUMBER : 2216834
3 REGISTERED OFFICE : Brooklands
00 Xxxxxxx Xxxxxx
Xxxxxxx
Xxxxxxxxxxx XX00 0XX
4 DATE AND PLACE OF INCORPORATION : 3.2.88, England
5 AUTHORISED SHARE CAPITAL : 1,000,000 shares of pound sterling 1 each
6 ISSUED SHARE CAPITAL : 18,000 shares of pound sterling 1 each
7 DIRECTORS : X X Xxxxxxxx
X X Xxxxxxxx
8 SECRETARY : X X Xxxxxxxx
9 AUDITORS : Xxxxx & Cowper
10 ACCOUNTING REFERENCE DATE : 30 April
11 TAX DISTRICT AND REFERENCE : LP34 225/S868
12 VAT NUMBER : 491463628
24
1 NAME : Synchronized Manufacturing SA
2 REGISTERED NUMBER : 81365
3 REGISTERED OFFICE : Rue Xxxxxx Xxxxxxxxx
1300 Wavre
BL
4 DATE AND PLACE OF INCORPORATION : 8.3.96 Belgium
5 AUTHORISED SHARE CAPITAL : 2,500 shares of BF 1000 each
6 ISSUED SHARE CAPITAL : 2,500 shares of BF 1000 each
7 DIRECTORS : X X Xxxxxxxx
X X Xxxxxxxx
X. Xxxxxx
8 ACCOUNTING REFERENCE DATE : 30 April
9 VAT NUMBER : BE 457,460,516
25
1 NAME : Synchronology Limited
2 REGISTERED NUMBER : 2283670
3 REGISTERED OFFICE : Brooklands
00 Xxxxxxx Xxxxxx
Xxxxxxx
Xxxxxxxxxxx XX00 0XX
4 DATE AND PLACE OF INCORPORATION : 3.8.88, England
5 AUTHORISED SHARE CAPITAL : 1000 Ordinary Shares of pound sterling 1 each
6 ISSUED SHARE CAPITAL : 100 Ordinary Shares of pound sterling 1 each
7 DIRECTORS : X. X. Xxxxxxxx
X. X. Xxxxxxxx
8 SECRETARY : X. X. Xxxxxxxx
9 AUDITORS : Xxxxx & Cowper
10 ACCOUNTING REFERENCE DATE : 30 April
26
SCHEDULE 3
THE IMMOVABLE PROPERTY
(1) (2) (3)
DESCRIPTION OF THE PROPERTY ESTATE OR USE OF THE PROPERTY
AND OWNING GROUP COMPANY INTEREST
Lease dated 14th June 1996 of Merchant Leasehold Offices
House, 14-20 (even numbers) Xxxxxx Xxxx,
Xxxxxxx, Xxxxxxxxx, XX00 0XX made between
(1) Xxxxxxx Clear Xxxxxxxx and Xxxxx
Xxxxxxxxx Xxxxxxxx as Managing Trustees of
Synchronized Manufacturing Limited
Retirement Benefit Scheme and (2)
Synchronized Manufacturing Limited
27
SCHEDULE 4
THE INTELLECTUAL PROPERTY
Synchronized 'arrow' Trade Xxxx registered in Part A of the Trade Xxxx Register
under no. 1427702 as of 6.6.1990 in Class 35 in the name of Synchronology Group
Limited.
28
SCHEDULE 5
MATTERS TO BE DONE BY THE VENDORS ON COMPLETION
1 Such alterations by each Group Company to its memorandum and articles
as the Purchaser may require or the adoption by each Group Company of
new articles in such form as the Purchaser may require.
2 Such changes (by way of resignation or appointment) in the offices of
directors, secretary and auditor of each Group Company as the
Purchaser may require, and the delivery to the Purchaser (as agent for
the relevant Group Company) of -
(a) in the case of every director or secretary resigning, an
acknowledgement by deed in the agreed form that he has no claim
against a Group Company for compensation for loss of office or
for the termination of his employment or otherwise; and
(b) in the case of every auditor resigning, a written notice of
resignation containing a negative statement under section 394(1)
of the Companies Act and an acknowledgement that he has no claim
against a Group Company for compensation for loss of office or
for professional fees or otherwise.
3 Such changes to the mandates for the operation of each bank account of
each Group Company as the Purchaser may require.
4 The repayment of all moneys owing at Completion to a Group Company by -
(a) either of the Vendors or any Connected Person of his; or
(b) any director or employee of a Group Company.
29
5 The approval (subject to properly stamped transfers being lodged for
registration) of the registration of the Purchaser or its nominee as
the holder of the Shares.
6 The delivery to the Purchaser of -
(a) the Accounts;
(b) such Consent (if any) as may be required to vest in the
Purchaser the full beneficial ownership of the Shares or to
enable it or its nominee to be registered as the holder of the
Shares;
(c) duly executed transfers in favour of the Purchaser or such other
person as it may nominate and the certificates in respect of the
Shares;
(d) the Tax Indemnity duly executed by the Vendors as a deed;
(e) the Service Agreement duly executed by Xx. Xxxxxxxx;
(f) a service agreement with the Company duly executed by Xxx
Xxxxxxxx;
(g) the Deed of Variation;
(h) a letter of the same date as this Agreement addressed by X.X.
Xxxxxxxx and X.X. Xxxxxxxx as the Managing Trustees of
Synchronized Manufacturing Limited Retirement Benefit Scheme to
Synchronized Manufacturing Limited confirming their awareness of
and consent to the existence of an agreement dated 22nd October
1996 between Synchronized Manufacturing Limited and Harvard
Managed Offices Limited relating to office space at the
Immovable Property; and
30
(i) any power of attorney under which any of the documents to be so
delivered has been executed.
7 The delivery to the Purchaser (as agent for the relevant Group
Company) of -
(a) the certificate of incorporation and common seal (if any) of
each Group Company and equivalent documents in respect of
Synchronized Manufacturing SA;
(b) the statutory books of each Group Company duly made up to date
(including signed minutes in the agreed form recording the
implementation where applicable of the matters specified in
paragraphs 1 to 5 of this Schedule);
(c) all such deeds, certificates and other documents of title to the
assets of each Group Company as the Purchaser shall have
notified the Vendors prior to completion that it shall require;
(d) a duly executed transfer in favour of such person as the
Purchaser may nominate of any share in a subsidiary of the
Company which is not registered in the sole name of the Company
or another subsidiary;
(e) the Consents (if any) mentioned in paragraph 6.3 of Schedule 6;
(f) a copy of each bank statement showing the balance standing to
the credit or debit of each bank account maintained by each
Group Company at the close of business on the last practicable
day before Completion.
31
SCHEDULE 6
THE WARRANTIES
PART 1 - GENERAL
1 THE GROUP COMPANIES
1.1 Each Group Company is incorporated as a private company limited by
shares.
1.2 The copy of the memorandum and articles of each Group Company which
has been delivered to the Purchaser is an accurate copy of that
document in force on the date of this Agreement and has annexed to it
a copy of every resolution or agreement to which section 380 of the
Companies Act applies.
1.3 No elective resolution of a Group Company remains in force.
1.4 No Group Company has any subsidiary undertaking, except the subsidiary
undertakings named in part 2 of Schedule 1.
2 THE ACCOUNTS
2.1 The Accounts of each Group Company comply with the provisions of the
Companies Act or, in the case of Synchronized Manufacturing SA, all
applicable Belgian legislation and have been prepared in accordance
with accounting principles generally accepted in the United Kingdom
(including all applicable Statements of Standard Accounting Practice,
Financial Reporting Standards and pronouncements of Urgent Issues Task
Force or, in the case of Synchronized Manufacturing SA, the Belgian
equivalent) under the historical cost convention and on bases
consistent with those on which the audited accounts of that Group
Company for the immediately preceding five financial years have been
prepared.
2.2 The audited profit and loss account of each Group Company for each of
the three consecutive financial years ended on the Accounting Date and
its audited
32
balance sheet as at the end of each of those years respectively give a
true and fair view of its results for that year and of its financial
position at the end of that year.
3 ASSETS
3.1 Save for current assets disposed of in the ordinary course of
trading, the assets included in the Accounts of each Group Company and
any assets acquired or agreed to be acquired by it since the
Accounting Date, together with the Immovable Property and the
Intellectual Property -
(a) are the absolute and sole property of that Group Company free
from any lien (otherwise than a lien arising by operation of law
in the ordinary course of business), option, mortgage, charge,
lease, licence, covenant, condition, agreement or other
encumbrance;
(b) where purchased on terms that property does not pass until full
payment has been made, have been paid for in full;
(c) comprise all the assets, property and rights which that Group
Company owns or which it uses for the purpose of carrying on its
business at the date of this Agreement; and
(d) in the case of tangible assets, are in the possession or under
the exclusive control of that Group Company.
3.2. All buildings, plant, machinery, equipment and vehicles owned or used
by each Group Company are in a proper state of repair and in good
working order and condition (fair wear and tear excepted), and have
been regularly and properly maintained.
33
3.3 So far as the Warrantor is aware the amount of all debts owing to each
Group Company as at the Accounting Date (less the amount of any
provision or reserve for bad and doubtful debts included in the
Accounts) will be fully recoverable in the ordinary course and no
known bad debts have arisen since the Accounting Date and no debt is
owing to a Group Company by the Vendors or any of its subsidiary
undertakings (except another Group Company).
3.4 No Group Company is a party to any agreement for the hire, rent, hire
purchase or purchase on deferred terms of any asset.
3.5 No Group Company owns, or has agreed to acquire, any shares or
debentures in any other undertaking (other than shares in another
Group Company) or any other securities.
3.6 All records or other documents (as defined in section 10 of the Civil
Evidence Act 1968) recording or evidencing any contract, licence,
consent or other right of any group company or required for the
exercise of any such right are in the possession or under the
exclusive control of that group company.
4 LIABILITIES
4.1 No Group Company has any liability (present or future or ascertained
or contingent) in respect of -
(a) any guarantee, indemnity, bond or similar obligation created or
given, or agreed to be created or given, by it;
(b) any warranty or representation given by it, except a warranty or
representation implied by law in respect of a transaction
entered into by it in the ordinary course of its trading;
34
(c) any claim against it by the Vendors or any or its subsidiary
undertakings;
(d) any property or any interest in property (including without
limitation leasehold property) now or formerly owned or occupied
by it; or
(e) any shares, debentures or other securities of which it is or has
been the registered proprietor or beneficial owner.
4.2 There are not outstanding any debts in excess of pound sterling 1,000
in aggregate owing by a Group Company which ought in the ordinary
course to have been paid.
5 SHARES AND DEBENTURES
5.1 The Shares comprise the whole of the issued share capital of the
Company and are beneficially owned by the Vendors.
5.2 All the shares and debentures of each Group Company are fully paid up
(or credited as fully paid up) and are free from any right of
pre-emption, option, lien, charge or any other encumbrance.
5.3 No person has the right (whether exercisable presently or in the
future and whether contingently or not) to call for the allotment of
any share or debenture of a Group Company or to convert any securities
(whether of a Group Company or another undertaking) into shares or
debentures, or shares or debentures of a different class, of that
Group Company.
5.4 No Group Company has since the Accounting Date -
(a) allotted, issued, repaid, redeemed or purchased any of its
shares or debentures or agreed so to do; or
35
(b) declared or made any distribution of profits on any share or
made or agreed to make any payment or incurred any expenses
treated as a distribution.
6 BUSINESS
6.1 Each Group Company carries on its business intra xxxxx, solely under
its corporate name and without infringement of any proprietary right
or interest of any other person and without liability to pay any
royalty or similar sum.
6.2 No Group Company requires, or has received any notification that it
may require, in order to use any information, process or computer
program or sales or promotional materials or any other item used or
required to be used for the purpose of its business any proprietary
right or interest belonging to a third party except those to which it
is entitled by virtue of its ownership of the Intellectual Property.
6.3 So far as the Warrantor is aware, (a) each Group Company has such
Consents as may properly be required to carry on its business as
conducted at the date of this Agreement, (b) no Group Company is in
breach of the terms of any such Consent and (c) there are no
circumstances (including the sale of the Shares) which might
invalidate any such Consent or render it liable to forfeiture or
modification or (in the case of a renewable Consent) affect its
renewal.
6.4 So far as the Warrantor is aware no Group Company has manufactured,
sold or supplied any product or service in the course of its business
which does not in all material respects comply with all applicable
laws, regulations and standards, or which is defective or dangerous or
not in accordance with any representation, warranty or other term
(whether express or implied) given in respect of it; and it has no
outstanding liability in respect of any such product or its repair or
maintenance or any service of which the Warrantor is aware. No client
of any
36
Group Company has made any claim against a Group Company alleging any
of the foregoing.
6.5 No Group Company has (except for the purpose of carrying on its
business in the ordinary course and subject to an obligation of
confidentiality) disclosed, or authorised the disclosure of, any of
its lists of suppliers or customers, trade secrets or technological or
confidential information concerning its business.
6.6 All computer software required for the business of each Group Company
is in the possession of that Group Company and has been properly
maintained and updated, and its performance is adequate for the
purposes of the business of that Group Company.
6.7 No Group Company has written, developed or licensed to any third
party any software or computer operating system and nor has any Group
Company adapted in any way any software or computer operating system
belonging to a third party.
6.8 Since the Accounting Date each Group Company has carried on its
business in the ordinary course so as to maintain the same as a going
concern and has not -
(a) suffered any material adverse change in its financial position
or prospects;
(b) except in the ordinary course of its trading, made or agreed to
make any payment or entered into or incurred any transaction or
liability;
(c) undertaken or authorised any capital commitment in excess of
pound sterling 7,500 in aggregate; or
37
(d) altered or agreed to alter the terms on which it gives credit to
its customers generally.
6.9 During the period of twelve months immediately preceding the date of
this Agreement -
(a) not more than 20 per cent of any description of goods or
services supplied to a Group Company in that period were
supplied by any one person or group of Connected Persons;
(b) not more than 20 per cent of any description of goods or
services supplied by a Group Company in that period were
supplied to any one person or group of Connected Persons; and
(c) no substantial or critical supplier to or customer of a Group
Company has ceased or substantially reduced its business with
that Group Company or notified it of any intention of doing so;
6.10 The business of each Group Company is managed exclusively by its
officers and employees; and no person has authority to bind a Group
Company other than its officers and employees acting in the ordinary
and ostensible course of their duties.
6.11 No Group Company is a member of any partnership, consortium, trade
association or any other association of persons (whether incorporated
or not incorporated).
6.12 No Group Company carries on business through any branch, agency or
permanent establishment outside the United Kingdom.
38
7 FINANCIAL ARRANGEMENTS
7.1 Complete and accurate particulars have been given in writing to the
Purchaser of all facilities for overdrafts, loans, acceptance credits
and other finance available to each Group Company; and no Group
Company has been notified of any breach of the terms of those
facilities.
7.2 The borrowings of each Group Company are within its powers and do not
exceed any limit imposed by its articles or otherwise.
7.3 Since the Accounting Date no Group Company has -
(a) borrowed any money;
(b) lent any money which has not been repaid in full; or
(c) factored any of its debts or engaged in any financing
arrangement of a kind not required to be shown in the accounts.
8 FAIR TRADING
8.1 No Group Company is a party to any agreement or arrangement or engaged
in any practice which -
(a) has been or is registrable under the Restrictive Trade Practices
Xxx 0000;
(b) is of the description mentioned in article 85 or 86 of the
Treaty of Rome;
(c) is a consumer trade practice within the meaning of the Fair
Trading Act 1973 or an anti-competitive practice within the
meaning of the Competition Xxx 0000;
39
(d) infringes any legislation of a jurisdiction outside the United
Kingdom for the control or prevention of anti-competitive
practices; or
(e) is or has been the subject of any enquiry, investigation or
proceeding under any legislation mentioned in sub-paragraphs (a)
to (d) above.
8.2. No Group Company is bound by any undertaking given by it to the
Restrictive Practices Court, the Director General of Fair Trading, the
Secretary of State for Trade and Industry, the European Commission or
the European Court of Justice (including the Court of First Instance)
or any other regulatory body, whether in connection with any
legislation mentioned in paragraph 8.1 or otherwise.
9 CONTRACTUAL OBLIGATIONS
9.1 There is not outstanding -
(a) any contract to which a Group Company is a party and which has
been entered into by it otherwise than in the ordinary course of
its business;
(b) any contract to which a Group Company is a party and which is of
a loss making nature;
(c) any contract to which a Group Company is a party and which
cannot be terminated by it without payment of compensation by
less than 120 days' notice, or imposes on a Group Company any
obligation to be performed by it more than 180 days from the
date of the contract;
(d) any contract to which a Group Company is a party and which is or
may be unenforceable by it by reason of the contract being
voidable at the instance of any other party or void;
40
(e) any offer, tender or quotation made or given by a Group Company
capable by the unilateral act of any other person of giving rise
to any contract otherwise than in the ordinary course of
trading;
(f) any contract or arrangement under which any person has the right
to supply any description of goods or services to or for a Group
Company or, as its agent or distributor, to supply any
description of goods or services within any geographical area;
(g) any contract or arrangement to which a Group Company is a party
for the sharing of profits with any other person or for the
payment to any other person of any sum dependent on the profits
of a Group Company;
(h) any contract or arrangement to which a Group Company is a party
and in which either of the Vendors or any Connected Person of
his has a direct or indirect interest;
(i) any contract to which a Group Company is a party and which may
restrict its activities or the use or disclosure by it of any
information; or
(j) any breach by any party of the terms of any contract to which a
Group Company is a party.
10 PREMATURE TERMINATION OF CONTRACTUAL RIGHTS
No default or event (including the sale of the Shares to the
Purchaser) has occurred or, so far as the Warrantor is aware, is about
to occur as a result of which -
41
(a) any agreement or arrangement to which a Group Company is a
party or any right which a Group Company enjoys will or may be
varied as to its terms or conditions or be terminated;
(b) any borrowed moneys or other indebtedness of a Group Company
will become payable or any security given by it will become
enforceable;
(c) any financial facilities available to a Group Company will be
varied as to its terms or conditions or be withdrawn; or
(d) any grant made to a Group Company by the Government or by any
other authority will become repayable in whole or in part.
11 OFFICERS AND EMPLOYEES
11.1 Complete and accurate particulars have been given in writing to the
Purchaser of the terms of employment by each Group Company of its
employees (including terms implied by custom or usage of that Group
Company or of the trade) and the terms of engagement under which the
services of any other individual are provided for any Group Company;
and, except as provided by legislation, all contracts of employment or
for the provision of such services to which a Group Company is a party
can be terminated by it, without payment of compensation, by not more
than 30 days' notice.
11.2 No Group Company is a party to -
(a) any agreement, arrangement or scheme (whether or not legally
enforceable) for profit sharing or for the payment to its
officers or employees, or other individuals whose services are
provided for that Group Company, of bonuses or incentive
payments or the like; or
42
(b) any collective bargaining or procedural or other agreement with
any trades union or similar association.
11.3 No Group Company has since the Accounting Date -
(a) changed, or agreed to change, the terms of its employment
(including terms relating to pension benefits) of (or contract
with or for the services of) any person who was on the
Accounting Date entitled to remuneration or fee at a rate in
excess of pound sterling 20,000 per annum;
(b) paid or given, or agreed to pay or give, to any of its officers,
employees or consultants any remuneration or benefit, except the
salary, wage or fee to which he is contractually entitled under
the terms of his employment or consultancy; or
(c) been notified of any wage or fee claim or agreed any general
increase in wages, wage rates or fees.
11.4 No salaries, wages or fees payable to the officers, employees and
consultants to of each Group Company for any period before the date of
this Agreement are overdue.
11.5 Save as contemplated by this Agreement, no present employee of or
consultant to a Group Company, or other individuals whose services are
provided for that Group Company, has given or received notice of
termination of his employment or engagement.
11.6 No former employee of a Group Company has the right under any
Legislation to be reinstated or re-engaged.
43
12 PENSIONS
12.1 For the purposes of this paragraph 12 -
'Approved' means approved by the Inland Revenue for the purposes of
Chapter I of Part XIV to the Taxes Act and a reference to 'Approval'
is to be construed accordingly.
'Disclosed Scheme' means the Synchronized Manufacturing Limited
Retirement Benefits Scheme.
'Employee' means a person who is on Completion in the employment of a
Group Company.
'Member Employees' means Employees who are members of the Disclosed
Scheme.
12.2 Save for the Disclosed Scheme, a Group Company is not at the date of
this Agreement a party to and no proposal has been announced to enter
into or establish any Agreement, arrangement custom or practice
(whether legally enforceable against a Group Company or not and
whether Approved or not) for the payment of, any pension, allowance
gratuity, lump sum or like benefit on retirement or death or benefit,
or deferred benefit arising on termination of employment (whether
voluntary or not) to any of the Employees or any persons who are
dependant on any of the Employees, nor has there prior to the date of
this Agreement been any such agreement, arrangement, custom ,practice
or scheme under or in respect of which a Group Company has or may have
a liability (whether contingent or otherwise).
44
12.3 The details of the Disclosed Scheme which have been given to the
Purchaser or the Purchaser's solicitors are complete and accurate and
include a copy of each deed and all rules governing the Disclosed
Scheme and particulars of all Member Employees.
12.4 The Disclosed Scheme is not a contracted-out scheme for the purposes
of the Xxxxxxx Xxxxxxx Xxx 0000.
12.5 There is no civil, criminal, arbitration, administrative or other
proceeding or dispute, action, suit or claim in relation to any Member
Employee and the Disclosed Scheme and none is pending or threatened.
12.6 The Company has in relation to the Member Employees duly complied with
all its obligations under the Disclosed Scheme and paid all amounts
due to the Trustees of the Disclosed Scheme which have fallen due for
payment to them prior to the date hereof.
12.7 Neither the Company nor the Trustees of the Disclosed Scheme, has done
or permitted anything to be done in consequence of which the Disclosed
Scheme is liable to lose Approval.
12.8 Each benefit (except for a refund or contributions payable under this
Disclosed Scheme) on the death of an employee member is fully insured
under a policy effected with a reputable insurance company. Each
Member Employee has been covered for that insurance by that insurance
company and all relevant premiums have been paid.
12.9 So far as the Warrantor is aware the Disclosed Scheme has been
administered in accordance with all applicable legal and
administrative requirements including,
45
without prejudice as to the generality of the foregoing, Article 119
of the Treaty of Rome as it applies to the eligibility contributions
and benefits.
12.10 Since the Accounting Date the rate of the pension paid by a Group
Company to any person has not been changed or agreed to be changed.
13 INSURANCE
13.1 The Disclosure Letter contains an accurate summary of all policies of
insurance to which each Group Company is insured.
13.2 The policies of insurance to which each Group Company is a party are
valid and in force and all premiums due have been paid and so far as
the Warrantor is aware there are no circumstances which are known, or
would on reasonable enquiry be known, to the Warrantor and which might
invalidate or affect the renewal of any of the policies or might
entitle a Group Company to make, or oblige it to notify the insurers
of, any claim under any of the policies.
14 LEGAL PROCEEDINGS
14.1 No Group Company is engaged or involved in or threatened with -
(a) any litigation, prosecution, arbitration or other legal
proceedings (whether as plaintiff, defendant or third party),
except for normal debt collection;
(b) any proceedings or enquiries before any tribunal, board of
enquiry, commission or any other administrative body, whether
judicial or quasi-judicial;
(c) any dispute with the Commissioners of Inland Revenue, the
Commissioners of Customs and Excise or any other authority or
person; or
46
(d) any industrial dispute or action, whether official or
unofficial;
and so far as the Warrantor is aware there are no circumstances which
in his reasonable opinion might give rise to the same.
14.2 No application for the rectification of the register of members of a
Group Company is outstanding or threatened.
14.3 There is no judgment or order of the court against a Group Company
which has not been satisfied or discharged.
14.4 No Group Company has committed any breach of or failed to perform or
observe any provision of its memorandum or articles or of any
Legislation (including, without limitation, the Companies Act) or any
order or judgment of a court of competent jurisdiction, covenant or
agreement or the terms or conditions of any Consent by which it is
bound or to which it is a party.
15 INSOLVENCY
15.1 No order has been made or resolution passed for the winding up of a
Group Company and there is not outstanding -
(a) any petition or order for the winding up of a Group Company;
(b) any receivership of the whole or any part of the undertaking or
assets of a Group Company;
(c) any petition or order for the administration of a Group Company;
(d) any voluntary arrangement between a Group Company and any of its
creditors; or
47
(e) in the case of Synchronized Manufacturing SA any equivalent
process under Belgian law.
15.2 So far as the Warrantor is aware there are no circumstances which
would entitle any person to present a petition for the winding up or
administration of a Group Company or to appoint a receiver of the
whole or any part of its undertaking or assets.
15.3 No Group Company is deemed unable to pay its debts within the meaning
of section 123 of the Insolvency Xxx 0000.
16 RECORDS
16.1 The accounting records and all registers, books including registers
and books required to be kept under the Companies Act and equivalent
Belgian legislation and other records of each Group Company are
properly maintained by it or under its direct control, are kept in its
possession or under its exclusive control, and contain a complete and
accurate and up to date record of the matters which they ought to
record as at the date specified in such records.
16.2 All the deeds, certificates and other documents of title to each Group
Company's assets and all the Consents and policies of insurance
mentioned in paragraphs 6.3 and 13.2 respectively of this Schedule
which have been granted to each Group Company, or to which it is a
party, are held by or to the order of that Group Company or the holder
of any mortgage or charge disclosed in the Disclosure Letter.
48
17 COMPLETENESS AND ACCURACY OF WARRANTIES
17.1 All information concerning each Group Company which has been disclosed
in writing by or on behalf of the Vendors to the Purchaser or its
agent, including (without limitation) -
(a) the particulars contained in Schedules 1, 2 and 3;
(b) the information contained in the Disclosure Letter;
(c) the particulars of any policies of insurance or of any agreement
or arrangement to which a Group Company is a party; and
(d) the replies given to any enquiries made by the Purchaser's
Solicitors in respect of a Group Company or its property,
business or affairs
are as far as the Warrantor is aware complete and accurate and are not
misleading
17.2 No representation for which a Group Company may be liable (vicariously
or otherwise) has been made by it or any of its officers or servants
to the Warrantor or his agent in connection with this Agreement, the
Disclosure Letter or the Tax Indemnity.
PART 2 - THE IMMOVABLE PROPERTY
18 INTERPRETATION
In this Part 'BUILDING' includes any fixed structure, fixed plant and
machinery or any other fixture attached to land or buildings.
49
19 TITLE
19.1 No person other than a Group Company is in occupation of or in receipt
of any rents or profits from the Immovable Property (save for the
rents received by the Trustees of the Directors' Pension Scheme as
Landlords pursuant to the Lease).
19.2 The Immovable Property and the property which is the subject of the
Belgian Lease comprise the only property owned, used or occupied by a
Group Company.
19.3 There is no subsisting agreement on the part of any Group Company to
acquire or dispose of any immovable property, including the Immovable
Property.
19.4 So far as the Warrantor is aware the written replies from the Vendor's
solicitors to the written enquiries concerning the Immovable Property
made by the Purchaser's solicitors are true and accurate.
19.5 So far as the Warrantor is aware no notices have been served or given
in relation to the Immovable Property or the Lease.
19.6 Save for the Agreement dated 22nd October 1996 made between
Synchronized Manufacturing Limited (1) and Harvard Managed Offices
Limited (2), the Group Company has not sublet, shared occupation or in
any other way disposed of the whole of any part of the Immovable
Property.
20 USER
20.1 The use of the Immovable Property for the purpose stated in column (3)
of Schedule 3 corresponds with the use to which it is put or (where it
is not presently in use) with the use to which it was last put.
50
20.2 Neither the Group Company nor the Warrantor have received notice of
any subsisting breach of any obligation relating to the Immovable
Property or its present use under any Legislation, agreement,
covenant, condition or Consent and, so far as the Warrantor is aware
or ought reasonably be aware, there are no subsisting allegations of
such a breach by any Competent Authority or other person, or any
circumstances which might give rise to such a breach.
20.3 None of the following matters constitutes or, if permitted to
continue, will constitute a breach of any obligation under any
existing legislation or any existing agreement, covenant, condition or
Consent -
(a) the construction of, or any alteration previously carried out
to, or the existence of any Building on the Immovable Property;
and
(b) the retention in its present state of any Building on the
Immovable Property.
21 MATTERS AFFECTING THE IMMOVABLE PROPERTY
21.1 Neither the Group Company nor the Warrantor have received notice of
any matter which affects the Immovable Property and which is
registrable by any Competent Authority pursuant to any Legislation or
any requirement of any Competent Authority or by any other matter
which would be or might reasonably be expected to be disclosed by any
search or enquiry which a prudent prospective purchaser of the
Immovable Property might reasonably be expected to make.
21.2 Neither the Group Company nor the Warrantor have received notice of
any subsisting resolution or proposal of any Competent Authority for
the making of any requirement relating to the Immovable Property or
its use or the activities
51
carried on thereat and there are no circumstances which are known to
either of the Vendors and which might give rise to the making of any
such requirement.
22 LEASES
So far as the Warrantor is aware the Group Company is not in breach of
any of the terms covenants and conditions set out in the Lease under
which it holds an interest in the Immovable Property and all payments
and sums of money due under the Lease have been paid.
23 BELGIAN LEASE
23.1 For the purposes of paragraphs 19.2 and this paragraph 23 'the Belgian
Lease' means the Convention xx Xxxxx Grie dated 16th November 1995
between S A Dimensions Nouvelles, Xxx xx Xxxx-Xxxxxxxx-Xxxxx 00, 0000
Xxxxxx-X'Xxxxxx and Synchronized Manufacturing Limited.
23.2 The Belgian Lease has been validly concluded and registered at the
appropriate Belgian registries, is validly in force and has been
validly transferred from Synchronized Manufacturing Limited to
Synchronized Manufacturing SA. The Belgian Lease is for a term of
nine years commencing on 1st January 1996.
23.3 Synchronized Manufacturing Limited and Synchronized Manufacturing SA -
(a) are not in breach of any of the provisions of the Belgian Lease
and all payments due under the Belgian Lease have been paid; and
(b) have not made transformation works to the premises the subject
of the Belgian Lease which would entail expenses at the expiry
or termination of the Belgian Lease.
52
23.4 So far as the Warrantor is aware the Landlord is not in breach of any
of the provisions of the Belgian Lease.
PART 3 - INTELLECTUAL PROPERTY
24 OWNERSHIP AND VALIDITY
24.1 Schedule 4 contains complete and accurate particulars of -
(a) all patents, trade marks and designs (whether registered or
unregistered) and of any other intellectual or industrial
property rights (whether registered or capable of registration
anywhere in the world) which are owned or used by a Group
Company in connection with its business or have been so used at
any time within six years before the date of this Agreement; and
(b) all pending applications for the registration or grant of any
right of the foregoing description have been made in the name
of, or on behalf of, a Group Company in connection with its
business within that period.
24.2 The Intellectual Property is subsisting and enforceable and (if it is
registered) valid; or if it is the subject of an application for
registration or grant, the application has been duly made and is
subsisting and the Intellectual Property is capable of registration or
grant.
24.3 All renewal fees payable in respect of any of the Intellectual
Property have been paid up to date.
25 INFRINGEMENT
So far as the Warrantor is aware none of the Intellectual Property -
(a) is used by any person except a Group Company;
53
(b) is being infringed, opposed or attacked by any person; or
(c) is the subject of any outstanding application for rectification
in whole or in part;
and so far as the Warrantor is aware there are no circumstances which
might give rise to any of the things mentioned in sub-paragraph (b) or
(c) being done.
26 TRADE MARKS ETC.
26.1 No Group Company has granted any third party the right to use, any
trade xxxx, business name or get up which is the same as, or is
confusingly similar to, any trade xxxx listed in Schedule 4 or any
business name used in connection with, or the get up of any of the
products or services supplied by a Group Company in the course of, its
business at any time within six years before the date of this
Agreement -
(a) on or in relation to any goods or services which are similar to
those of any description so supplied by a Group Company; and
(b) in any country in which that description of goods or services
has been so supplied by a Group Company or by any of its agents
or distributors.
PART 4 - TAX
27 INTERPRETATION
In this Part -
'ICTA 1988' means the Income and Corporation Taxes Xxx 0000;
'TCGA 1992' means the Taxation of Chargeable Gains Xxx 0000;
54
'VATA 1994' means the Value Added Tax Xxx 0000;
'BASE COST' means, in relation to any asset, the amount which would be
available as a deduction under any Legislation relating to chargeable
gains in computing the amount of any chargeable gain arising on a
disposal of that asset; and
any expression or word which is defined in or to which a meaning is
assigned for the purpose of ICTA 1988 or TCGA 1992 has the same
meaning.
28 COMPLIANCE - GENERAL
28.1 Each Group Company has, within the relevant time limits, correctly
made all returns and payments required to be made by it for any Tax
purposes, and has kept all records and other documents required to be
kept by any Legislation relating to Tax.
28.2 There is no existing dispute between a Group Company and any Tax
authority and neither of the Vendors is aware of any circumstances
likely to give rise to such a dispute.
28.3 No Group Company has been the subject of an investigation by any Tax
authority or become liable to pay any interest, fine or penalty to any
Tax authority.
28.4 Each Group Company has properly operated the Pay As You Earn system
(including its application to National Insurance Contributions) or its
Belgian equivalent (if any) and has complied with all its reporting
obligations to the Inland Revenue or Belgian Revenue authority or
other relevant agency or
55
department of government or local government in connection with all
benefits provided for employees.
29 CHARGEABLE GAINS
29.1 The value at which any asset of a Group Company is included in the
Accounts does not exceed the asset's Base Cost.
29.2 No Group Company owns any asset of which the Base Cost is less than,
or is liable to be reduced to less than, the sum of the amounts
referred to in section 38(1)(a) and (b) of TCGA 1992.
30 ALLOWANCES
30.1 All rents, interest, annual payments and other sums of an income
nature which have been paid or became payable since the Accounting
Date by a Group Company or which it is under an existing obligation to
pay in the future are, or will be, wholly allowable as deductions or
charges against profits or in computing profits for the purposes of
Tax.
30.2 Each Group Company was entitled to claim all capital allowances
claimed in respect of all expenditure incurred by it on industrial
buildings, scientific research, know-how and plant and machinery used
in any trade carried on by it.
30.3 The Disclosure Letter contains full details of all expenditure in
respect of which each Group Company has claimed, or is entitled to
claim, capital allowances.
31 GROUPS
Valid elections under section 247 of ICTA 1988 are in force between
each Group Company and its immediate holding company.
56
32 CLOSE COMPANY
No Group Company is, or has at any time been, a close company for the
purposes of Tax.
33 VALUE ADDED TAX
33.1 Each Group Company -
(a) is registered as a taxable person for the purpose of value added
tax;
(b) has maintained and obtained full, complete, correct and
up-to-date records, invoices and other documents appropriate or
requisite for that purpose; and
(c) has fully complied with all provisions of any Legislation
relating to value added tax and all directions and conditions
made or imposed pursuant to any of those provisions.
33.2 No Group Company or any of its relevant associates (as that term is
defined by paragraph 3(7) of Schedule 10 to VATA 1994) has made an
election to waive exemption available pursuant to paragraph 2 of that
Schedule in relation to any of that Group Company's land.
33.3 No Group Company is, or can be treated as, a developer in relation to
any building or civil engineering work for the purposes of paragraphs
5 and 6 of Schedule 10 to VATA 1994.
33.4 No Group Company has acquired any asset in circumstances falling
within section 44 of VATA 1994.
57
34 STAMP DUTY AND CAPITAL DUTY
34.1 All instruments executed by each Group Company and in respect of which
it would be usual for such Group Company to bear the Stamp Duty
thereon (as opposed to another party to the instrument) have been
properly stamped.
34.2 No Group Company has executed and retained outside the United Kingdom
any instrument relating to any property situated, or to any matter or
thing done or to be done, in any part of the United Kingdom.
35 OVERSEAS
35.1 Each Group Company is, and has always been, resident in the United
Kingdom for United Kingdom Tax purposes.
35.2 No Group Company has traded or carried on any activity or owns any
asset outside the United Kingdom.
36 MISCELLANEOUS
36.1 The Disclosure Letter sets out the details of any clearance
applications made and clearances received in respect of sections 135
and 136 of the TCGA 1992 and section 703 ICTA 1988.
36.2 All intra-group transactions have been carried out on an arm's length
basis and each of the Companies has sufficient and adequate
documentation to prove this to the Inland Revenue or to the Belgian
tax authorities.
36.3 All claims and elections assumed to have been made for the purposes of
the Accounts have been made.
58
36.4 The Accounts will make full provision for all amounts of Tax arising
in the Company on or before the Accounting Date.
36.5 No liability to Taxation for non-trading deficits will arise if
amounts shown in the Accounts are paid or repaid.
36.6 The Company has not operated as a branch or agency outside the United
Kingdom.
36.7 The Company has not been a party to any transaction which may be taxed
by reference to or to which the following sections may apply -
- section 776 ICTA 1988 (transactions in land);
- section 786 ICTA 1988 (lending of money);
- section 787 ICTA 1988 (interest relief limitation);
- section 703 ICTA (transactions in securities).
36.8 No Company has received any direction under section 747 ICTA 1988
(controlled foreign companies).
36.9 No transactions have been undertaken falling with section 765 or 765A
ICTA 1988.
59
SCHEDULE 7
PROVISIONS CONCERNING THE WARRANTIES
INTERPRETATION
1 In this Schedule 'Claim' means a claim for breach of any of the
Warranties.
BASIS ON WHICH WARRANTIES GIVEN
2 In so far as the Warranties relate to matters of fact, they shall
constitute representations upon the faith of which the Purchaser has
entered into this Agreement.
3 Each of the Warranties shall be construed as a separate
representation, warranty, covenant or undertaking (as the case may be)
and shall not be limited by, nor shall the extent or application be
governed by the terms of any other of the Warranties or by any other
term of this Agreement.
TIME LIMIT FOR MAKING CLAIMS
4 The Warrantor shall not (subject to paragraph 8) be liable for a Claim
and the covenants in Clause 2 of the Tax Indemnity shall not give rise
to a claim under the Tax Indemnity unless -
(a) the Purchaser gives written notification of the particulars of
the Claim or claim under the Tax Indemnity -
(i) in the case of a Claim relating to Tax or claim under the
Tax Indemnity or to paragraph 6.7 of Schedule 6, within
six years of the end of the accounting period in which
Completion occurs , and
(ii) in any other case, before 31st August 1999;
60
(b) in the case of a Claim or claim under the Tax Indemnity,
liability for such claim is accepted by the Warrantor in writing
or a writ in respect of the Claim or claim under the Tax
Indemnity is duly served in either case within 180 days from the
last day for notification of the Claim or claim under the Tax
Indemnity under sub-paragraph (a), failing which such claim
shall be deemed to have been withdrawn.
EXCLUSION OF SMALL CLAIMS
5 The Warrantor shall not (subject to paragraph (8)) be liable for a
Claim or claim under the Tax Indemnity unless the amount payable in
respect of such claim -
(a) individually exceeds pound sterling 1,000; and
(b) in aggregate exceeds pound sterling 50,000 when added to the
amount which is payable (or but for sub-paragraph (a) would be
payable) in respect of every other Claim or claim under the Tax
Indemnity and for the avoidance of doubt the whole amount of
such Claim or claim under the Tax Indemnity and not only the
excess shall be payable.
6 For the purpose of paragraph 5 two or more Claims or claims under the
Tax Indemnity arising from the same circumstance, or from the same set
of circumstances, shall be treated as a single Claim or claim under
the Tax Indemnity.
MAXIMUM LIABILITY
7 The total liability of the Warrantor in respect of Claims and claims
under the Tax Indemnity shall not (subject to paragraph 8) exceed an
amount of pound sterling 1,300,000.
61
FRAUDULENT MISREPRESENTATION ETC.
8 The provisions of paragraph(s) 4, 5 and 7 shall not apply to any Claim
or claim under the Tax Indemnity where such Claim or claim under the
Tax Indemnity or the circumstances giving rise to such Claim or claim
under the Tax Indemnity or the delay in discovery of those
circumstances arise from fraud or deceit on the part of the Warrantor.
OTHER LIMITATIONS OF LIABILITY
9 The Warrantor shall not be liable for a Claim to the extent that the
circumstances, facts or events giving rise to such Claim have been
fairly disclosed or referred to in -
(a) the Disclosure Letter (provided that no letter, document or
other communication shall be deemed to constitute a disclosure
for purposes of the Warranties unless the same is expressly
referred to or attached to the Disclosure Letter); or;
(b) the Accounts.
10 The Warrantor shall not be liable for any Claim -
(a) to the extent that allowance, provision or reserve is made in
the Accounts for the liability giving rise to the Claim;
(b) to the extent that the Claim would arise or the amount of the
Claim would be increased after the date of this Agreement as a
result of -
(i) the enactment of any Legislation;
62
(ii) a judgment or change in the interpretation or application
of any law or of any ruling or practice of any
administrative authority (including taxing authorities);
(iii) a change in the basis or method of calculation of Tax
made after the date of this Agreement;
(iv) the amendment, modification or withdrawal of any
extra-statutory concession previously made available by
the Inland Revenue.
11 The amount of the Warrantor's liability for any Claim shall be reduced
by any sum which is recovered (whether by way of insurance,
indemnification or otherwise) by the Purchaser or a subsidiary of the
Purchaser (otherwise than from another of those companies) in respect
of the loss or damage suffered by reason of the relevant breach, less
the amount of any reasonable costs and expenses incurred in obtaining
payment of that sum and of any Tax for which the Purchaser or a
subsidiary of the Purchaser may be liable by reason of its receipt of
that sum (after taking account of the aforementioned expenses).
If the Warrantor has paid to the Purchaser any amount in respect of
the Claim before the recovery of that sum, the Purchaser shall repay
to him, or procure the repayment to him of, the amount by which his
liability is so reduced.
There shall be no liability in respect of any Claim to the extent that
it results from a disallowance of any bonus payment made after
Completion by the Purchaser to the Warrantor in respect of the Service
Agreement.
12 No liability shall attach to the Warrantor in respect of any Claim
hereunder to the extent that it could reasonably have been expected to
be reduced or mitigated as a consequence of any action or inaction
which it would have been reasonable
63
for the Purchaser and/or any Group Company to undertake upon becoming
aware of any such potential claim.
13 The Warrantor (or the Covenantor, as the case may be) shall have no
liability hereunder or under the Tax Indemnity in respect of any Tax
which would not have arisen but for some voluntary act or transaction
carried out by or on behalf of the Purchaser or any Group Company
after the date hereof outside the ordinary course of business of the
Company and which the Purchaser or any Group Company knew would give
rise to such Tax liability other than an act or transaction carried
out pursuant to a legally binding obligation entered into prior to
Completion.
14 Where a Claim shall be made hereunder in respect of a matter where any
Group Company shall be insured against any loss or damage arising
therefrom the Purchaser shall not make any such Claim against the
Warrantor without first procuring that the relevant Group Company
shall make a claim against their insurers for compensation for the
loss or damage suffered and thereafter any Claim against the Warrantor
shall be limited (in addition to the limitation on the Warrantor's
liability elsewhere referred to herein) to the amount by which the
loss or damage suffered by the Purchaser as a result of such breach
shall exceed the compensation paid by the said insurers to the
relevant Group Company or (if greater) the amount of compensation
which would have been paid by insurers if all the policies in force at
Completion had been maintained in full force thereafter.
16 No Claim shall lie hereunder to the extent that the same is capable of
remedy by the Warrantor unless the Purchaser shall first afford to the
Warrantor such opportunity as is reasonable to remedy the breach
complained of and the
64
Warrantor shall have failed to do so within a reasonable time after
being notified of the complaint.
17 If the Purchaser shall claim that any debt due to any Group Company
shall not comply with any representations or warranties given
hereunder the Purchaser shall procure that if and when the Warrantor
shall so elect the relevant Group Company shall offer to assign such
debt to the Warrantor for a consideration equal to the book value of
such debt (less any provision made therefor in the Accounts).
18 At the Warrantor's expense (adequate security therefor being lodged
with the Purchaser by the Warrantor if the Purchaser reasonably so
requires) the Purchaser shall take and shall procure that the relevant
Group Company shall take such action as the Warrantor may reasonably
request to avoid, dispute, resist, compromise or defend any claim,
threat or demand which may give rise to any Claim against the
Warrantor or any or them hereunder.
19 The Purchaser hereby relinquishes and waives and shall procure that
each Group Company shall relinquish and waive any rights of set-off or
retention save in respect of the Retention as provided in clause 8.2
of this Agreement which the Purchaser or any Group Company might
otherwise have in respect of any Claim against or out of any payments
whatsoever which the Purchaser or a Group Company is or may be obliged
to make or procure to be made to the Warrantor pursuant to this
Agreement or otherwise.
20 The Purchaser shall not be entitled to recover damages or obtain
reimbursement, restitution or indemnity more than once in respect of
any one shortfall, damage, deficiency or breach.
65
21 If the Purchaser is entitled to make a claim in respect of any act,
event or default, both under any of the Warranties and also under the
Tax Indemnity, such claim shall first be made under the Tax Indemnity
and any amount payable under the Warranties to the Purchaser shall be
reduced to the extent of the amount payable under the Tax Indemnity.
22 The Warrantor is not liable in respect of any Claim (which expression
shall for the purposes of this paragraph 22 only include claims
arising under the Tax Indemnity)
(a) to the extent that the matter giving rise to such Claim arises
from an event before or after Completion at the request or
direction of, or with the written consent of, the Purchaser, any
holding company of the Purchaser or any subsidiary (including
any Group Company after Completion) of such holding company or
an authorised agent or adviser of any such company provided that
this paragraph 22(a) shall not apply to any Tax Liability
arising from the stock dividend approved by the Company's
directors and shareholders on 6th June 1997;
(b) to the extent that the matter giving rise to the Claim is a Tax
liability which arises in consequence of any Event occurring
since the Accounting Date in any Group Company's ordinary course
of business;
(c) to the extent that the matter giving rise to such Claim would
have not arisen but for -
(i) a claim, election, surrender or disclaimer made, or
notice of consent given, or another thing done, after
Completion (other than one the making, giving or doing of
which was taken into account in computing a provision for
Tax in the Accounts) under, or in
66
connection with, a provision of an enactment or
regulation relating to Tax by the Purchaser, or any Group
Company after Completion and the claims, elections,
surrenders or disclaimers taken into account in the
Accounts are expressly set out in the Disclosure Letter;
or
(ii) any Group Company's failure or omission to make a claim,
election, surrender or disclaimer, or give a notice, or
consent to do another thing under, or in connection with,
a provision or an enactment or regulation relating to Tax
after Completion, the anticipated making, giving or doing
of which was taken into account in computing the
provision for Tax in the Accounts and which are expressly
set out in the Disclosure Letter; or
(iii) to the extent that the matter giving rise to such Claim
is a Tax liability against which a Relief as defined in
the Tax Indemnity arising on or before Completion and not
shown as an asset in the Accounts is available for set
off.
(d) to the extent that the claim is a Tax liability which is
increased because the small companies rate is no longer
available due to an increase in the number of companies
associated with the Company (as set out and defined in section
13 of the Income and Corporation Taxes Act 1988).
23 Nothing in this Agreement restricts or limits the Purchaser's general
obligation at law to mitigate any loss or damage which it may incur in
consequence of a matter giving rise to a Claim.
67
PROCEDURE FOR MAKING A CLAIM
24 If any matter which will or might give rise to a Claim comes to the
notice of the Purchaser or a Group Company, the following provisions
shall apply -
(a) the Purchaser shall as soon as reasonably possible (and in any
event within the following 21 days) notify the Warrantor in
writing of the matter and, at their expense, make available to
him all information and documents in the possession or under the
control of the Purchaser or a Group Company in so far as they
relate to that matter;
(b) thereafter the Purchaser shall keep the Warrantor informed of
all material developments relating thereto;
(c) neither the Purchaser nor a Group Company shall make any
admission of liability or take any other action in connection
with the matter without the previous written consent of the
Warrantor (which shall not be unreasonably delayed or withheld);
and
(d) subject to it being indemnified to its reasonable satisfaction
against all costs and expenses (including additional Tax) which
might be incurred by it, the Purchaser and each Group Company
shall take all such steps as the Warrantor may reasonably
request to mitigate his liability under the Claim.
The Purchaser shall procure that each Group Company complies with the
provisions of this paragraph expressed to be binding on it.
GENERAL
25 No information relating to the Shares or to a Group Company of which
the Purchaser has actual or constructive knowledge (other than that
disclosed by the
68
Disclosure Letter) and no investigation by or on behalf of the
Purchaser shall prejudice any claim by the Purchaser under the
Warranties or operate to reduce any amount recoverable thereunder
subject to clause 5.3 of the Agreement.
69
SCHEDULE 8
COMPETITION
1 The Vendors will not and every Connected Person of his will not -
(a) for a period of two years from the date of Completion directly
or indirectly solicit or entice, or endeavour to solicit or
entice, away from a Group Company any of its directors or
employees;
(b) for a period of two years from the date of Completion solicit,
or endeavour to solicit, from any person who at any time within
18 months before the date of Completion was a customer of a
Group Company any business of a nature carried on by a Group
Company at the date of Completion or at any time within two
years before that date;
(c) at any time after Completion disclose or directly or indirectly
use, or attempt so to use, for any purpose any Confidential
Information concerning a Group Company or its business or
affairs of any Group Company, except -
(i) to the extent required by law or any Competent Authority;
(ii) to its professional advisers under circumstances of
confidentiality and only to the extent necessary for any
lawful purpose of the Vendors or any of its subsidiaries;
or
(iii) to the extent that the information is on the date of this
Agreement or after that date becomes public knowledge
otherwise than through improper disclosure by any person;
or
70
and for the purposes of this sub-clause 2(c), Confidential
Information shall mean written information prepared by or
received by the Vendors prior to the date of this Agreement in
connection with the business of a Group Company other than any
books or articles or information prepared or received by the
Vendors or any know-how acquired by the Vendors before the date
of this Agreement howsoever received or acquired regarding
scheduling and capacity planning in so far as such books or
articles or information were not prepared specifically for
clients of any Group Company.
(d) at any time after Completion directly or indirectly use,
or attempt to use, for any purpose -
(i) any name which is identical to or confusingly or
deceptively similar to any name at present used by a
Group Company as its corporate name or as a name under
which it carries on business; or
(ii) any trade xxxx or logogram (whether or not forming part
of the Intellectual Property) which is identical to or
confusingly or deceptively similar to any trade xxxx or
logogram used by a Group Company at any time within
twelve months before the date of Completion.
2 Nothing contained in Part 2 of this Schedule shall prevent either of
the Vendors or any Connected Person of his from owning or acquiring
for the purposes of investment not more than 5 per cent. of any class
of shares or other securities of any undertaking listed on a
recognised stock exchange.
71
SIGNED )
by XXXXXXX CLEAR XXXXXXXX in the ) /s/ X.X. Xxxxxxxx
presence of - ) -----------------
X. X. Xxxxxxxx
SIGNED )
by XXXXX XXXXXXXXX XXXXXXXX in the ) /s/ X.X. Xxxxxxxx
presence of - ) -----------------
X. X. Xxxxxxxx
SIGNED for and on behalf of )
Manugistics UK Limited ) /s/ X.X. Xxxxxxxxx
------------------
X. X. Xxxxxxxxx (Director)
SIGNED and DELIVERED by )
XXXXX X. XXXXXXXX and XXXXXX X XXXXXXXXX ) /s/ Xxxxx X. Xxxxxxxx
on behalf of Manugistics Group, Inc. and ) ---------------------
thereby executed by it as its Deed ) X. X. Xxxxxxxx (General Counsel
and Secretary)
/s/ X.X. Xxxxxxxxx
------------------
X. X. Xxxxxxxxx (Executive
Vice-President)
