Exhibit 2
DATED JUNE 21, 2001
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AGREEMENT FOR THE SALE AND
PURCHASE OF SHARES IN
SYNOMICS LIMITED
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CONTENTS
CLAUSE HEADING
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1 Definitions
2 Interpretation
3 Sale and purchase of the Shares
4 Consideration
5 Completion
6 Vendor warranties and representations
7 Warrantor, Warranties and representations
8 Breach of Warranty
9 Limitation of Liability
10 Undertakings by the Vendor
11 Restrictions on the Vendors
12 Nature of obligations
13 Announcements
14 General
15 Communications
16 Proper Law
SCHEDULE DESCRIPTION
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1 Details of the Vendors
2 Particulars of the Company
3 The Properties
4 Warranties
5 Tax Deed
6 Calculation and payment of consideration
7 Option Holders
8 Option Holder Deed of Waiver
9 Software
10 Third Party Software
APPENDIX* DESCRIPTION
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1 The Accounts
2 [deliberately omitted]
3 The Insurance, the Proposal, the assignment and
notice of assignment of the Insurance
4 The Loan Agreement
5 The Estimated Liabilities
* Omitted in accordance with
Regulation S-K Item 601(b)(2).
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DOCUMENTS IN THE AGREED FORM*
Disclosure Letter
Directors' Letter of Resignation
Auditors' resignation
Completion Board Minutes
Insurance Policy
Insurance Proposal
Notice of assignment of Insurance Policy
Deed of Assignment of Insurance Policy
Deed of Release of Lender Security
Compromise Agreement
THIS AGREEMENT is made on June 21, 2001 BETWEEN:
(1) Such of the persons whose names and addresses are set out in the first
schedule who have signed this agreement ("VENDORS"); and
(2) ACCELRYS INC. a corporation incorporated in the state of Delaware,
United States of America and having its principal office at 0000
Xxxxxxxx Xxxx, Xxx Xxxxx, 00000-0000 XXX ("PURCHASER").
WHEREAS by a letter dated the date of this agreement from the Purchaser
addressed to all of the shareholders of the Company, the Purchaser has offered
to purchase the entire issued share capital of the Company on the terms of this
agreement. Certain of such shareholders have signed this agreement in acceptance
of such offer.
1. DEFINITIONS
In this agreement unless the context otherwise requires:-
"ACCOUNTS" means the audited statutory accounts of the Company
relating to the accounting reference period ended on the
Balance Sheet Date together with the notes, reports and other
documents annexed to them, a copy of which is attached at
Appendix 1;
* Omitted in accordance with
Regulation S-K Item 601(b)(2).
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"AGREED FORM" means a document in a form agreed by and signed
by or on behalf of such of the parties to this agreement as
are a party to such document;
"ASSOCIATE" means any person with whom any of the Vendors may
be connected within the meaning of section 839 of the Taxes
Act or for whom any of them may be a personal representative;
"AUDITORS" means the auditors for the time being of the
Company;
"BALANCE SHEET DATE" means 30 September 2000;
"BUSINESS DAY" means a day on which banks generally are open
in the City of London for the transaction of normal banking
business;
"COMPANIES ACT" means the Companies Xxx 0000 (as amended or
re-enacted by the Companies Act 1989);
"COMPANY" means Synomics Limited details of which are set out
in the second schedule;
"COMPLETION" means the completion of the sale and purchase of
the Shares pursuant to this agreement;
"COMPLETION ACCOUNTS" shall have the same meaning given to
that expression in the sixth schedule;
"COMPROMISE AGREEMENT" MEANS THE COMPROMISE AGREEMENT IN THE
Agreed FORM BETWEEN THE COMPANY AND XXXXX XXXXXXX;
"DEEDS OF WAIVER" mean the deeds in the form set out in
schedule 8 to be executed by the Option Holders on or before
Completion;
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"DISCLOSURE LETTER" means the letter in the Agreed Form from
the Warrantors to the Purchaser dated as at the date of this
agreement;
"ENCUMBRANCE" means any mortgage, charge, lien, encumbrance,
adverse claim, pledge, hypothecation, option, conditional sale
of other title retention agreement, provision or right,
security interest, easement, right of way, covenant or
restriction;
"EVENT" includes any act, omission, transaction or
circumstance (including any of such matters provided for under
this agreement);
"INDIVIDUAL VENDORS" means the Vendors other than the
Institutional Vendors;
"INSTITUTIONAL VENDORS" means JAFCO Limited, JAFCO XX-0,
XXXXX X-0(X), JAFCO G-6(B), JAFCO G-7(A), JAFCO G-7(B),
TVM Techno Venture Management III GmbH & Co Beteiligungs KG,
3i Group plc, 3i Bioscience Investment Trust plc and Incyte
Genomics Limited;
"INSURANCE" means the insurance of the liability of the
Warrantors in respect of the Warranties and the Tax Deed
pursuant to the policy in the Agreed Form attached at
Appendix 3;
"INSURERS" means the Subscribing Insurers as defined in the
policy of Insurance;
"LAWS" means all laws, statutes, statutory instruments, rules,
regulations, directives, decrees, orders, judgements,
ordinances and other pronouncements having the effect of law
of any competent court, tribunal, arbitrator, government
(national, local or foreign) or governmental authority,
department or official (national, local or foreign);
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"LENDERS" means 3i Group plc, 3i Bioscience Investment
Trust plc and TVM Techno Venture Management III GmbH & Co
Beteiligungs KG;
"LENDERS GROUP" means each of the Lenders, its subsidiaries
and any company of which such Lender is a subsidiary;
"LENDERS SOLICITORS" means Xxxxxxx Xxxxxx OWA, of Xxxx Xxxxx,
Xxxxxxx Xxxx, Xxxxxxx XX0 0XX;
"LOAN AGREEMENT" means the secured loan agreement dated
24 January 2001 between 3i Group plc (1), TVM Techno Venture
Management III GmbH & Co Beteiligungs KG (2), 3i Bioscience
Investment Trust plc (3), the Company (4), Xxxxxxx
Xxxxxxx (5), Xxxxxx Xxxxx (6) and Xxxxx Xxxxxx (7) ;
"OPTION HOLDERS" means the person whose names are set out in
the seventh schedule;
"PERMITS" means all licenses, authorisations, orders, grants,
consents, permissions and approvals;
"PROPERTIES" means the properties briefly described in the
Property Schedule or any one or more of them or any part of or
interest in any of such properties;
"PROPERTY SCHEDULE" means the third schedule;
"PROPOSAL" means the proposal signed by the Warrantors in the
Agreed Form relating to the Insurance;
"PURCHASER'S SOLICITORS" means Dechert of 0 Xxxxxxxxx' Xxx,
Xxxxxx XX0X 0XX;
"REVENUE" means all fiscal authorities (national or local)
whether of the United Kingdom or elsewhere;
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"SHARE OPTION SCHEME" means the Synomics Unapproved Share
Option Scheme;
"SHARES" means such of the issued and allotted share capital
of the Company owned and/or held by the Vendors at Completion;
"TAXATION" means all forms of taxation, duties (including
stamp duty), levies, imposts, charges, withholdings, national
insurance and other contributions, rates and PAYE liabilities
(including any related or incidental penalty, fine, interest
or surcharge) whenever created or imposed and whether of the
United Kingdom or elsewhere;
"TAX DEED" means a deed in the form set out in the fifth
schedule duly executed by the Warrantors;
"TAXES ACT" means the Income and Corporation Taxes Xxx 0000;
"VENDOR WARRANTIES" means the representations and warranties
of the Vendors contained in clause 6;
"WARRANTIES" means the representations and warranties on the
part of the Warrantors which are made by the Warrantors in or
pursuant to clause 7 and/or the fourth schedule and, for the
purposes of clause 8, the Vendor Warranties;
"WARRANTORS" means Messrs Xxxxxx Xxxxx and Xxxxx Xxxxxx (being
some of the Vendors) who are giving the Warranties;
"WARRANTORS' SOLICITORS" means Xxxxxx Xxxxx Sapte of
0 Xxxxx Xxxxx, Xxxxxx XX0X 0XX.
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2. INTERPRETATION
2.1. In this agreement unless the context otherwise requires:-
2.1.1. any reference to a clause, schedule or appendix (other than to
a schedule to a statutory provision) is a reference to a
clause of or schedule or appendix to this agreement; and the
schedules and appendices form part of and are deemed to be
incorporated in and in references to this agreement;
2.1.2. any reference to a statute or statutory provision includes a
reference to that provision as amended, re-enacted or replaced
and any regulations or orders made under such provisions from
time to time whether before or after the date of this
agreement and any former statutory provision replaced (with or
without modification) by the provision referred to except to
the extent that any amendment, re-enactment or replacement
coming into force after the date of this agreement would
increase or extend the liability of the parties to one
another;
2.1.3. any reference to persons includes a reference to firms,
corporations or unincorporated associations;
2.1.4. any reference to the singular includes a reference to the
plural and vice versa; and any reference to any gender
includes a reference to each other gender;
2.1.5. a reference to an SSAP of FRS is a reference to a Statement of
Standard Accounting Practice or Financial Reporting Standard
which has been adopted as an accounting standard by the
Accounting Standards Board;
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2.1.6. any agreement, warranty, representation, indemnity, covenant
or undertaking on the part of two or more persons shall be
deemed to be given or made by such persons jointly and
severally save where otherwise expressed herein;
2.1.7. any matter which shall be relevant to any of the Warranties
and which be known to at least one of the Warrantors or the
Company, shall be deemed to be known by both of the
Warrantors;
2.1.8. words and expressions defined in the Companies Act bear the
same respective meanings;
2.1.9. any reference to indemnifying any person against any
circumstance includes indemnifying and holding that person
harmless from all actions, claims, demands and proceedings of
any nature from time to time made against that person and all
against all losses, liabilities, claims, damages, payments,
awards, costs and expenses made, suffered or incurred by that
person as a consequence of, or which would not have arisen but
for, that circumstance; and
2.1.10. words and expressions defined in particular clauses or
paragraphs of this agreement shall bear the meaning given to
them throughout this agreement.
2.1.11. Headings and titles are used for ease of reference only and do
not affect the interpretation of this agreement.
2.1.12. If any statement is qualified by reference to the knowledge,
information, belief or awareness of the Warrantors or the
Company that expression shall be deemed to include a warranty
by the Warrantors that the statement has been made by them
after due and careful enquiry.
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3. SALE AND PURCHASE OF THE SHARES
3.1. The Vendors shall sell, or procure the transfer by their
nominees or trustees of, the Shares to the Purchaser and the
Purchaser, relying on the Warranties and the other obligations
of the Vendors under this agreement, shall purchase the
Shares.
3.2. The Vendors shall sell, and procure the transfer by their
nominees or trustees of, the Shares with full title guarantee
free from all Encumbrances (and whether or not the Vendors
know or could reasonably be expected to know about such
matters) together with all rights now or hereafter attaching
to them including all dividends declared or payable or
distributions made or proposed on or after the Balance Sheet
Date.
4. CONSIDERATION
The aggregate consideration for the Shares shall be calculated
and paid in accordance with the sixth schedule.
5. COMPLETION
5.1. Completion shall take place at the offices of the Purchaser's
Solicitors immediately after the exchange of this agreement
when the parties shall comply with their respective
obligations as set out in this clause.
5.2. The Vendors (other than the Lenders in respect of whom only
clauses 5.2.1, 5.2.10 and 5.2.13 shall apply) shall deliver to
the Purchaser or (at the option of the Purchaser) to its
nominee(s):-
5.2.1. duly executed share transfers in respect of the Shares in
favour of the Purchaser or as it may direct, together with the
relevant share certificates;
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5.2.2. duly executed Deeds of Waiver executed by all Option Holders
waiving all entitlements in respect of options over share
capital of the Company;
5.2.3. written resignations and releases executed as deeds in the
Agreed Form from all persons (other than any directors or
secretaries remaining at the request of the Purchaser or
appointed at the instance of the Purchaser) who, on or
immediately prior to Completion, may be directors or
secretaries of the Company, resigning their offices and
releasing the Company from all claims and rights of action
whether by way of compensation, remuneration, redundancy
payments or otherwise except for accrued remuneration and
reasonable expenses (if any) for the month then current at the
respective rates disclosed in the Disclosure Letter;
5.2.4. the certificate of incorporation and copies of the Memorandum
and Articles of Association (containing copies of all such
resolutions and agreements as are referred to in section 380
of the Companies Act) of the Company and the registers and
books required by the Companies Act to be kept by it all of
which shall be written up to date as at Completion;
5.2.5. any documents, books and records of the Company which shall
not be held at the Properties;
5.2.6. certificates from each of the banks at which the Company
maintains accounts of the amounts standing to the credit or
debit of such accounts at the close of business on the second
business day preceding Completion together with a list of all
unpresented cheques and uncleared lodgements which upon
presentation or clearance would be debited or credited to such
accounts;
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5.2.7. service agreements in the Agreed Form between the Purchaser
and Xxxxxx Xxxxx and Xxxxx Xxxxxx signed by each of those
individuals;
5.2.8. the Tax Deed;
5.2.9. A release in the Agreed Form releasing the security of the
Lenders over the assets of the Company, duly executed by the
Lenders; and
5.2.10. a certified copy of the Insurance policy as issued by the
Insurers and a certified copy of the Proposal as signed by the
Warrantors and all attachments thereto;
5.2.11. a duly executed deed of assignment of the Insurance policy in
the Agreed Form and a duly executed notice of assignment
thereof in the Agreed Form;
5.2.12. evidence to the satisfaction of the Purchaser that any person
executing this agreement on behalf of a Vendor or any document
to be executed pursuant to it has authority to do so;
5.2.13. the Compromise Agreement duly signed by Xx Xxxxxxx and his
legal advisers thereon:
5.3. Each Vendor severally shall on the Completion Date:-
5.3.1. subject to the Purchaser's obligations under paragraph 4 of
the sixth schedule, procure that neither it nor its Associates
has any claims or rights of action against the Company or any
of its employees or directors and that the Company and such
employees and directors are not in any way obligated or
indebted to it or its Associates (including without limitation
pursuant to any shareholder agreement between the Company and
it) save in relation to salary and other benefits incurred in
the current month at the rates disclosed in the Disclosure
Letter; and
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5.3.2. procure that it and its Associates shall have repaid to the
Company all sums which may be owed by it and its Associates to
the Company on any account whatsoever, whether or not such
sums shall be due and payable on or before the Completion Date
and that the Company shall have been released from all
liabilities and obligations pursuant to any bonds, guarantees,
indemnities, securities or obligations given or entered into
by the Company to or in favour of any person in respect of the
liabilities of such Vendor.
5.4. The directors of the Company shall procure that a Board
Meeting of the Company will be held which will transact the
following business:-
5.4.1. (subject only to them being stamped) the approval of the
transfer of shares referred to in clause 5.2.1 and the
Purchaser and/or its nominee(s) being entered in the Register
of Members as the holders of the shares specified in those
transfers;
5.4.2. the appointment of such persons as the Purchaser may nominate
as directors and secretary of the Company;
5.4.3. the acceptance of the various resignations of officers and
auditors referred to in this clause;
5.4.4. the appointment of such firm of chartered accountants as the
Purchaser may require as auditors to the Company;
5.4.5. the change of the registered office, the accounting reference
date and the bank mandates of the Company in accordance with
the Purchaser's requirements;
5.4.6. such other business as the Purchaser may reasonably require.
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5.5. Subject to the conclusion of the matters referred to in the
previous provisions of this clause:-
5.5.1. the Purchaser shall comply with paragraph 4 of the sixth
schedule;
5.5.2. the Purchaser shall deliver to the Warrantors' Solicitors:-
5.5.2.1. a counterpart Tax Deed duly executed by the Purchaser; and
5.5.2.2. a counterpart of the service agreements in the Agreed Form to
be entered into by the Purchaser with Xxxxxx Xxxxx and Xxxxx
Xxxxxx duly signed on behalf of the Purchaser.
5.6. The Vendors confirm that the Warrantors' Solicitors may
receive, and give a good receipt for, the consideration for
the Shares, all documents expressed to be delivered to them at
Completion as agent for the Vendors and the Purchaser shall
not be concerned with the basis upon which the consideration
(or such documents) shall be distributed between the various
Vendors by the Warrantors' Solicitors.
6. VENDORS WARRANTIES AND REPRESENTATIONS
6.1. Each Vendor severally represents and warrants to the Purchaser
as regards himself only that:-
6.1.1. he is the beneficial and (save as identified on the first
schedule) legal owner of the Shares as set out in the first
schedule and is entitled to sell the Shares to the Purchaser
free from all Encumbrances without the consent of any third
party;
6.1.2. he has full power and authority to enter into this agreement
and the other documents to be executed in connection with it;
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6.1.3. this agreement and such other documents constitute (or will
when executed constitute) legal and valid binding obligations
on him enforceable in accordance with their respective terms;
6.1.4. no bankruptcy order has been made in respect of him or a
petition for such an order presented, no application has been
made in respect of him for an interim order under section 253
Insolvency Xxx 0000, he is not unable to pay any debt as that
expression is defined in section 268 Insolvency Xxx 0000, no
person has been appointed by the court to prepare a report in
respect of him under section 273 Insolvency Xxx 0000, no
interim receiver has been appointed of his property under
section 286 Insolvency Xxx 0000, and no order has been made or
petition presented or resolution passed for the winding up or
administration of him, no receiver or administrator or
administrative receiver has been appointed or could lawfully
be appointed by any person of his business or assets or any
part thereof, he is not insolvent and has not stopped payment
and is not unable to pay his debts (within the meaning of
section 123 of the Insolvency Act 1986) and he is capable of
meeting his liabilities as and when they fall due and for the
foreseeable future save that the provisions of clauses 6.1.3
and 6.1.4 shall not apply to the Lenders.
6.2. Each of the Vendors agrees with the Purchaser (for itself and
as trustee for the Company) that it releases the Company from
any and all obligations of the Company under Clause 4 of
Section 2 of the Loan Agreement.
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7. WARRANTOR WARRANTIES AND REPRESENTATIONS
7.1. The Warrantors jointly and severally represent and warrant to
the Purchaser that, save only as and to the extent fairly
disclosed to the Purchaser in the Disclosure Letter, each of
the Warranties is now and will be at Completion true and
accurate and is not to be affected or limited by any previous
or other disclosures, express or implied, to the Purchaser,
its officers, representatives or professional advisers. For
the avoidance of doubt, disclosures made generally in the
Disclosure Letter must be made fairly in relation to each of
the Warranties to which such disclosures are made.
7.2. The Warrantors jointly and severally represent, warrant and
undertake to the Purchaser that:-
7.2.1. there has not been any fraud, dishonest, criminal or malicious
act, fraudulent misrepresentation or deliberate concealment on
their part, and they will not in the future act or fail to act
in any such way, so as to result in the Insurers not being
liable for any claim by virtue of paragraph numbered 1 under
the heading "Exclusions" of the policy of Insurance nor any
such scheme referred to in paragraph numbered 2 of such
exclusions; and
7.2.2. they will comply in full with their obligations under the
policy of Insurance.
7.2.3. Subject to its rights under the assignment of the Insurance
policy referred to in clause 5.2.11, in the event of a claim
the subject of the Insurance the Purchaser shall be entitled
for its own benefit and at its own cost to prosecute in the
name of the Warrantors any claim against the Insurers arising
out of a refusal by the
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Insurers to indemnify the Warrantors in relation to any
judgement or award against the Warrantors by the Purchaser.
The Purchaser shall have full discretion in the conduct of any
such proceedings and in the settlement of the same and the
Warrantors shall afford reasonable assistance to the Purchaser
in connection with any such proceedings brought by the
Purchaser;
7.2.4. they shall not amend, vary, terminate, prejudice or enter into
a settlement, or compromise, release, waiver of or otherwise
deal with any claim or right under the Insurance without the
prior written consent of the Purchaser or amend, vary or
terminate the Insurance;
7.2.5. notwithstanding any other provision of this agreement, the
Purchaser shall not be liable for any claim for indemnity or
contribution by any of the Warrantors under the Insurance due
to the receipt of monies from any claim under the Insurance as
loss payee or assignee of the benefits thereof.
8. BREACH OF WARRANTY
8.1. The Vendors and Warrantors acknowledge that they have
previously made representations to the Purchaser in the terms
of the Vendor Warranties and the Warranties respectively with
the intention of inducing the Purchaser to enter into this
agreement and the Purchaser confirms and the Vendors and
Warrantors acknowledge that the Purchaser has relied on those
representations and has accordingly been induced by them to
enter into this agreement.
8.2. Each of the Warranties, covenants, indemnities and
undertakings set out in this agreement or the Tax Deed is
separate and independent.
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8.3. The Warrantors agree with the Purchaser for itself and as
trustee for the Company and each of their respective officers
and employees irrevocably and unconditionally to waive any
rights remedies or claims which they may have in respect of
any misrepresentation in or omission from any information or
advice supplied or given by the Company or its respective
officers, employees or agents and on which they have relied in
giving the Warranties, unless such misrepresentation or
omission was made fraudulently in preparing the Disclosure
Letter or in agreeing to give the Tax Deed.
8.4. Without restricting the rights or the ability of the Purchaser
to claim damages on any basis, if it shall be found that any
matter which is the subject of any of the Warranties is not as
represented or warranted then, if the Purchaser shall so elect
by notice in writing to them, the Warrantors jointly and
severally shall on demand pay to the Purchaser a sum equal to
the amount by which the value (or amount) at Completion of any
asset or liability of the Company (computed for this purpose
on the basis that full provision was made for the facts and
circumstances in relation to which such breach arose) was less
or, in the case of a liability, greater than the value (or
amount) at Completion of such asset or liability (computed for
this purpose on the assumption that the facts and
circumstances had been such as to involve no such breach)
together with such other amounts as shall be required to
compensate them for any other loss or damage which they shall
have suffered.
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9. LIMITATION OF LIABILITY
9.1. The following provisions of this clause 9 shall operate to
limit the liability of the Warrantors under the Warranties in
the fourth schedule and references to "BREACH", "CLAIM" and
"LIABILITY" (and any similar expression) shall, unless the
context otherwise requires, be references to a breach of or a
claim or liability arising under the Warranties
notwithstanding any other provisions contained in this
agreement.
9.2. No claim shall be made under the Warranties or the Tax Deed
unless the Warrantors shall have been given written notice of
that claim by or on behalf of the Purchaser on or before the
second anniversary of Completion (in the case of a liability
relating to a matter other than Taxation) or the seventh
anniversary of Completion (in the case of a liability relating
to Taxation) other than such a liability which shall arise
from fraud or wilful default in which case there shall be no
limitation.
9.3. The aggregate liability of the Warrantors in respect of all
claims shall not (save in the event of fraud) exceed the
Headline Consideration (as defined in the sixth schedule)
including all costs and expenses of or incidental to the
negotiation, presentation and settlement of any claim.
9.4. The Eleventh Schedule shall also have effect as regards
liability to claims.
10. UNDERTAKINGS BY THE VENDORS
10.1. Each of the Vendors severally undertakes to the Purchaser that
as soon as possible following Completion it will, and it will
procure that its nominees (if any) will,
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execute any document which the Purchaser may reasonably
require it execute or to have executed so as to vest
effectively the beneficial and legal ownership of its Shares
in the Purchaser or as it may direct free from all liens,
charges, encumbrances and adverse claims and otherwise to
give effect to the terms of this agreement.
10.2. The Vendors severally undertake with the Purchaser that, if
and for so long as they remain the registered holders of any
of the Shares after Completion, they will hold those Shares
and the dividends and other distributions of profits or
surplus or other assets in respect of such Shares and all
rights arising out of or in connection with them in trust for
the Purchaser and will at all times after Completion deal with
and dispose of such Shares, dividends, distributions and
rights as the Purchaser shall direct and (if so requested by
the Purchaser) execute all instruments of proxy or other
documents which may be necessary or proper to enable the
Purchaser to attend and vote at any meeting of the Company.
11. RESTRICTIONS ON THE VENDORS
11.1. In this clause:-
"BUSINESS"
means the business of the development, licensing and
maintenance of life sciences integration tools and integration
software and the provision of consultancy services to support
the integration of pharmaceutical discovery research or any
part thereof now carried on by the Company;
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"DIRECTLY OR INDIRECTLY" means (without prejudice to the
generality of the expression) either alone or jointly or in
partnership with any other person, firm or company or (except
as the holder for investment purposes only of securities in
any company not exceeding 3 per cent in nominal value of the
securities of that class in issue or shares) as the holder of
any interest in or as an employee director agent or
representative of or consultant to any other person firm or
company;
"RESTRICTION AREA" means any or all of the following:
- the United Kingdom;
- the European Union; and
- the USA.
"RESTRICTION PERIOD" means the period of 3 years from
Completion.
11.2. Xxxxxx Xxxxx, Xxxxx Xxxxxx and Xxxxx Xxxxxxx, in the case of
clause 11.2.1 below, and each Individual Vendor, in the case
of clause 11.2.2. below, severally undertakes to the Purchaser
(for itself and for the benefit of the Company) that he will
not, and he will procure that his Associates will not (other
than for and on behalf of the Company) without the prior
written consent of the Purchaser directly or indirectly:-
11.2.1. at any time during the Restriction Period in the Restricted
Area in relation to a business which may in any way be the
same as or similar to or in competition with the Business,
canvass, solicit or entice the custom of or deal with or
supply any goods or services to any person who at the date of
this agreement or at any time during the period of two years
prior to Completion has been a customer or client of the
Company in respect of such goods and services and with whom he
shall have had personal contact during such two year period
(save that for the
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avoidance of doubt Xxxxx Xxxxxxx being employed or providing
consultancy services to any venture capital or similar
investor which invests in competitors of the Company shall not
of itself be a breach of this clause provided that he does not
himself do any of the things prohibited by this clause or
provide any information to enable any other person to do any
of the things referred to in this clause); or
11.2.2. at any time during the Restriction Period offer employment to
or employ or offer or conclude any contract for services with
any person who as at Completion or during the two year period
prior thereto shall be or have been a director, employee,
consultant or agent of the Company who by reason of his
position is or was or is or was likely to be in possession of
Confidential Information (as defined in clause 11.3.1); or
11.3. Each Vendor severally undertakes, subject as provided in
clause 11.3.3 below, to the Purchaser (for itself and for the
benefit of the Company) that he will not, and he will procure
that his Associates will not (other than for and on behalf of
the Company) without the prior written consent of the
Purchaser directly or indirectly:-
11.3.1. except as required by law at any time disclose to any person
or use for his own benefit (or that of any other person), or
claim any right, title or interest in or to, any information
or know-how of a confidential nature concerning and relating
to the goodwill of the Company including (without limitation)
information and know-how as to products, processes,
techniques, suppliers, customers, finances,
-20-
business policy and expansion or forward planning programmes
("CONFIDENTIAL INFORMATION") which he shall have acquired
before Completion or any Software or Intellectual Property
Rights of the Company or any Licensed Rights held by the
Company; or
11.3.2. at any time falsely represent himself as being connected with
or interested in the Company; or
11.3.3. at any time do or say anything likely or calculated to lead
any person, firm or company to withdraw from or cease to
continue offering to the Company any rights (whether of
purchase, sale, import, distribution, agency or otherwise)
then enjoyed by it or in any other way to cease to do business
or reduce the amount of business it transacts with any member
of the Group (save that this clause 11.3.3. shall not apply to
the Lenders in relation to their investments in companies from
time to time); or
11.3.4. at any time carry on a business under the name "Synomics" or
any part combination or abbreviation thereof or any similar or
other name likely to confuse or mislead any part of the
public.
11.4. Each of the Individual Vendors, in respect of clauses 11.2 and
11.3, and each of the Vendors in respect of clause 11.3,
acknowledge and agree with the Purchaser that:-
11.4.1. each of the sub-clauses contained in clauses 11.2 and 11.3
constitutes an entirely separate severable and independent
covenant by and restriction on him;
-21-
11.4.2. the duration, extent and application of each of the
restrictions contained in clauses 11.2 and 11.3 are no greater
than is necessary for the protection of the goodwill and trade
connections of the Business and the value of the Company; and
11.4.3. if any restriction contained in clauses 11.2 and 11.3 shall be
found void but would be valid if some part thereof were
deleted such restriction shall apply with any such deletion as
may be necessary to make it valid and effective.
12. NATURE OF OBLIGATIONS
12.1. Each of the obligations, representations, warranties,
indemnities and undertakings entered into or made by or on
behalf of any of the parties to this agreement (excluding any
obligation fully performed at Completion) shall continue in
full force and effect notwithstanding Completion taking place.
12.2. The rights and remedies of the Purchaser in respect of a
breach of any provision of this agreement or pursuant to the
Tax Deed shall not be affected by Completion or by whether the
matters constituting such breach or other matters were known
or could have been known by the Purchaser prior to Completion
and, save to such extent that the Purchaser's actual knowledge
shall as a matter of law prohibit it from making a claim for a
breach of the Warranties, no such actual or constructive
knowledge shall in any way constitute a waiver of any of the
Purchaser's rights.
12.3. Any right or remedy of the Purchaser in respect of a breach of
any provision of this agreement shall be in addition and
without prejudice to all other rights and remedies of the
Purchaser and the exercise or failure to exercise any such
right or
-22-
remedy shall not constitute a waiver by the Purchaser
of that or of any of its other rights or remedies.
12.3.1. Save as provided in this clause and clause 12.4.2 none of the
rights or obligations referred to in this agreement may be
assigned or transferred to any other person without the prior
written consent of all the parties to this agreement. The
Lenders may assign their rights and obligations after
Completion to another member of their respective Lender's
Group provided that 3i Group plc will procure compliance by
any assignee with the obligations of 3i Group plc or 3i
Bioscience Investment Trust plc assigned to such assignee and
will indemnify the Purchaser against any loss, damage and
liability suffered by it as a consequence of such assignee
failing to comply with such obligations and TVM Techno Venture
Management III GmbH & Co Beteilingungs KG will procure
compliance by any assignee with its obligations assigned to
such assignee and will indemnify the Purchaser against any
loss, damage and liability suffered by it as a consequence of
such assignee failing to comply with such obligations.
12.3.2. If the Shares shall at any time be sold or transferred the
benefit of each of the obligations, representations,
warranties, indemnities and undertakings entered into or made
by or on behalf of the Vendors and Warrantors pursuant to this
agreement and the Tax Deed shall be assignable to any company
(an "ASSOCIATED COMPANY") which shall be a wholly owned
subsidiary of the Purchaser or which shall be a holding
company of the shares of the Purchaser or a wholly owned
-23-
subsidiary of such holding company but only for so long as
such company remains an associated company of the Purchaser.
12.4. Any liability of any of the Vendors or Warrantors to the
Purchaser under this agreement or the Tax Deed may in whole or
in part be released, compounded or compromised or time or
indulgence given by the Purchaser (in its absolute discretion)
as regards any of the Vendors without in any way prejudicing
or affecting the Purchaser's rights against any of the others
of them in respect of the same or a like liability whether
joint or several or otherwise.
13. ANNOUNCEMENTS
Save for the Lenders who may disclose details of this
transaction in their normal course of marketing activities
(provided that any reference therein to the Purchaser beyond
simply referring to it as the Purchaser shall require the
prior approval of the Purchaser), the parties undertake that
none of them shall either before or after Completion make any
announcement or issue any circular to the press or
shareholders (otherwise than as required by law or in
accordance with the requirements of The London Stock Exchange
or the Panel on Takeovers and Mergers or the US Securities and
Exchange Commission) or the employees, suppliers or customers
of the Company concerning the terms and conditions of this
agreement without the text of such announcement or circular
first being approved by the other parties (such approval not
to be unreasonably withheld or delayed) but nothing shall
restrict the Vendors from making such disclosures to
-24-
the directors of the Company as may be reasonably necessary
for the proper performance by such directors of their duties.
14. GENERAL
14.1. This agreement together with any other documents which this
agreement expressly requires shall be signed shall constitute
the entire understanding and agreement between the parties to
it in relation to the subject matter of this agreement.
14.2. Any variation of this agreement shall be binding only if it is
recorded in a document signed by or on behalf of the parties
to this agreement.
14.3. As regards the costs in relation to the negotiations leading
up to the sale of the Shares and to the preparation, execution
and performance of the parties' obligations under this
agreement and of all the other documents referred to in it,
such costs of the Purchaser shall be paid for by the Purchaser
and such costs of the Vendors shall be paid for by the Vendors
under paragraph 4 of the Sixth Schedule. Without prejudice to
the generality of the foregoing the sale proceeds shall be
used to pay and discharge (without any payment or liability
being incurred by the Company) the Vendor Expenses (as defined
in the sixth schedule). The premium for the Insurance will be
deducted from the Headline Consideration in accordance with
the sixth schedule. Each Vendor severally shall indemnify the
Purchaser against all costs and expenses (including legal,
accounting and other professional costs) incurred by it in
investigating, prosecuting and making any claim successfully
made by the Purchaser against
-25-
such Vendor pursuant to this agreement and the Warrantors
shall indemnify the Purchaser against all such costs and
expenses incurred by it in investigating, prosecuting and
making any claim successfully against the Warrantors in
relation to the Warranties or the Tax Deed provided that the
liability of the Warrantors for such costs in relation to a
claim in respect of the Warranties or the Tax Deed shall be
met only from the proceeds of the Insurance.
14.4.1. This agreement may be executed in any number of counterparts
and by the parties who sign this agreement on separate
counterparts, but shall not be effective until each of the
parties who signs this agreement has executed at least one
counterpart.
14.4.2. Each counterpart shall constitute an original agreement but
all the counterparts together shall constitute one and the
same instrument.
15. COMMUNICATIONS
15.1. All communications between the parties with respect to this
agreement shall be in writing and delivered by hand (which
expression shall include express delivery service such as
FedEx and DHL) or sent by pre-paid post, (first class if
inland, airmail if overseas) or facsimile telecopier ("FAX")
to the address of the addressee as set out in this agreement,
or to such other address or fax number in England as the
addressee may from time to time have notified for the purposes
of this clause or as specified in clause 15.2.
15.2. Communications shall be deemed to have been received:-
15.2.1. if delivered by hand, on the day of delivery;
-26-
15.2.2. if sent by first class post, two business days after posting
exclusive of the day of posting (or five business days in the
case of a posting to an overseas address);
15.2.3. if sent by fax at the time of transmission or, if the time of
transmission is not during the addressee's normal business
hours, at 9.30 a.m. on the next business day;
15.3. Communications addressed to the Vendors shall be sent to such
of the persons specified in clause 16.2 as the persons
nominated to receive service of proceedings and to 3i Group
plc and 3i Bioscience Technology Investment Trust plc as
follows:
3i Group plc, 00 Xxxxxxxx Xxxx Xxxxxx XX0 0XX, Fax
No. x00 000 000 --- and marked for the attention of Xxxxxx
Xxxxxx;
Communications addressed to the Purchaser shall be sent to
1. Dechert, 0 Xxxxxxxxx' Xxx, Xxxxxx XX0X 0XX, Fax No.
x00 000 000 0000 and marked for the attention of Xxxx
Xxxxxxxxx.
2. Dechert, Princeton, Pike Corporate Centre, P.O. Box
5218, Xxxxxxxxx, XX 00000-0000, XXX, Fax No. (609)
620 3529 and marked for the attention of Xxxxx
Xxxxxx.
3. The Purchaser at its principal office specified
herein Fax No. 000 000 000 0000 and marked for the
attention of Xxxxxx Xxxxxxx.
15.4. In proving service:-
15.4.1. by delivery by hand, it shall be necessary only to produce a
receipt for the communication signed by or on behalf of the
addressee;
-27-
15.4.2. by post, it shall be necessary only to prove that the
communication was contained in an envelope which was duly
addressed and posted in accordance with this clause; and
15.4.3. by fax it shall be necessary only for the communication or a
confirmatory letter to have been delivered by hand or sent by
first class post on the same day but failure of the addressee
to receive such confirmation shall not invalidate the relevant
communication deemed given by fax.
16. PROPER LAW
16.1. This agreement shall be governed by English Law and the
parties irrevocably submit to the non-exclusive jurisdiction
of the English Courts.
16.2. The Vendors irrevocably nominate and instruct the following
persons in England to receive service of any notice or
proceedings required to be served upon or given to them or any
of them pursuant to this agreement and the Tax Deed:
The Individual Vendors Xxxxxx Xxxxx, one of the Vendors
JAFCO Co. Limited, JAFCO JS-3 Dr. Xxxxx LoveridgeBioPharma Advisors Limited
000 Xxxx Xxxx
XXXXX X-0(X), JAFCO X-0(X) Xx Xxxxx
Xxxxxx
XXXXX X-0(X), JAFCO G-7(B) SW1Y 5HP
England
TVM Techno Venture Dr. Xxxxxxxx VernonZiggus Holdings Limited
Management III GmbH & Co East Crowndale Farm
Beteiligungs KG Xxxxx Xxxx
Xxxxxxxxx
Xxxxx
XX0 0XX
Xxxxxxx
-28-
Incyte Genomics Inc Xxxxxx VenemaChief Financial Officer
Incyte Genomics Inc
000 Xxxxxxxxx Xxxxxxx Xxxx
Xxxxxxxxx
XX0 0XX
Xxxxxxx
-29-
FIRST SCHEDULE
THE VENDORS
Column 1 Column 2
-------- --------
Xxxxxx Xxxx Xxxxx, 860,000 Ordinary
Swan House, 8,335 Preferred (B) Ordinary
Xxxx Xxxx,
Xxxxxxx Xxxxxx,
Xxxxx. XX0 0XX
Xxxxx Xxxxxxx, 1,380,000 Ordinary
6 Chemin de Vignechamps, 20,000 Preferred (B) Ordinary
Geneva,
Switzerland,
CH - 1222
Xxxxx Xxxxxx Xxxxxxxxx, 6,667 Preferred (B) Ordinary
00 Xxxxxxxx Xxxx,
Xxxxxx, XX00 0XX
Andries Van Dam, 15,000 Preferred (B) Ordinary
00, Xxxxx Xxxx,
Xxxxxxxxxx,
Xxxxx Xxxxxx,
XXX
S Xxxxxxx, 690,000 Ordinary
Marchpane House, 690,000 Deferred Ordinary
Chrishall,
Royston. XX0 0XX
JAFCO Co., Ltd, 600,000 Preferred Ordinary
8th Floor 16,667 Deferred Ordinary
Tekko Building
0-0-0 Xxxxxxxxxx
Xxxxxxx-Xx
Xxxxx 000-0000
Xxxxx
JAFCO JS-3, 300,000 Preferred Ordinary
Investment Enterprise Partnership 8,332 Deferred Ordinary
0xx Xxxxx
Xxxxx Xxxxxxxx
-00-
0-0-0 Xxxxxxxxxx
Xxxxxxx-Xx
Xxxxx 100-0005
Japan
JAFCO G-6 (A), Investment 450,000 Preferred Ordinary
Enterprise Partnership 8th Floor 12,500 Deferred Ordinary
Tekko Building
0-0-0 Xxxxxxxxxx
Xxxxxxx-Xx
Xxxxx 000-0000
Xxxxx
JAFCO G-6 (B), Investment 450,000 Preferred Ordinary
Enterprise Partnership 8th Floor 12,500 Deferred Ordinary
Tekko Building
0-0-0 Xxxxxxxxxx
Xxxxxxx-Xx
Xxxxx 000-0000
Xxxxx
JAFCO G-7 (A), Investment 600,000 Preferred Ordinary
Enterprise Partnership 16,667 Deferred Ordinary
8th Floor
Tekko Building
0-0-0 Xxxxxxxxxx
Xxxxxxx-Xx
Xxxxx 000-0000
Xxxxx
JAFCO G-7 (B), 600,000 Preferred Ordinary
TOKYO 100, 16,667 Deferred Ordinary
8th Floor
Tekko Xxxxxxxx
0-0-0 Xxxxxxxxxx
Xxxxxxx-Xx
Xxxxx 000
Xxxxx
XXX Techno Venture Management 3,000,000 Preferred Ordinary
GmbH & Co Beteiligungs 83,333 Deferred Ordinary
KG, Xxxxxxxxxx Xxx, 00 - Xxxxxxx X,
00000, Xxxxxxx,
Xxxxxxx.
-31-
3i Group Plc, 3,000,000 Preferred Xxxxxxxx
00, Xxxxxxxx Xxxx, 83,333 Deferred Ordinary
London. SE1 8XP
3i Bioscience Investment Trust Plc, 3,000,000 Preferred Ordinary
whose shares are held by 83,333 Deferred Ordinary
RBSTB Nominees Limited,
00, Xxxxxxx Xxxxxx,
Xxxxxx. XX0X 0XX
Incyte Genomics, Inc, 1,742,500 Preferred (B) Ordinary
0000, Xxxxxx Xxxxx,
Xxxx Xxxx,
XX 00000,
XXX
Xxxxx Xxxx Xxxxxx, 1,380,000 Ordinary
The Jams, 8,335 Preferred (B) Xxxxxxxx
Xxx Xxxx Xxxxxx,
Xxxxxxxxx,
Xxxxxxx. XX0 0XX
Ziggus Holdings Limited 10,000 Preferred (B) Ordinary
Xxxx Xxxxxxxxx Xxxx
Xxxxx Xxxx,
Xxxxxxxxx
Xxxxx XX00 0XX
Dr. C Xxxxx, 15,000 Preferred (B) Ordinary
Xxxxxx Xx Xxxx 0,
0000 Xxxxxxxx,
Xxxxxxxxxxx.
Dr. A Xxxxxx, 16,670 Preferred (B) Ordinary
XX Xxx 00000,
Xxx Xxxxx,
XX 00000-0000,
XXX
R Xxxxx, 15,000 Preferred (B) Ordinary
0 Xxxxxxxxx Xxx,
Xxxxxx,
Beds.
-32-
S Xxxxxxx, 10,000 Preferred (B) Ordinary
00, Xx Xxxx'x Xxxx,
Xxxxxxx Xxxxxx,
Xxxxx, XX00 0XX
J Xxxxx, 5,000 Preferred (B) Ordinary
c/o Life Science Informatics
Solutions Limited,
00 Xxxxxxxxxx Xxxx
Xxxxxxxxx
XX0 0XX
A Brookes, 5,000 Preferred (B) Ordinary
4 The Brambles
Xxxxx Xxxx Xxxx
Xx Xxxx
Xxxxx
XX00 0XX
J Coppieters, 2,000 Preferred (B) Ordinary
00, Xxxxxxxxxx Xxxxxx,
Xxxxxxxxx,
Xxxxxxx
S Xxxxxx, 3,000 Preferred (B) Ordinary
000, Xxxxxxx Xxxx,
Xxxxxxxxx. XX0 0XX
R Humphris, 1,500 Preferred (B) Ordinary
0, Xxxxxx Xxxxx,
Xxxxxxx,
Xxx.
Cambs.
S Xxxx, 1,500 Preferred (B) Ordinary
0, Xxxxxx Xxxxxxx Xxx,
Xxxxxxxxx,
Xxxxxxxxx. XX0 0XX
T XxXxxxxx, 1,500 Preferred (B) Ordinary
00, Xxxxxxxx Xxxx,
Xxxxxxxxx.
D Xxxxxx-Xxxxx, 1,000 Preferred (B)
-00-
Xxxxxxxx Xxxx, Xxxxxxxx
Cambridge Road.
Xxxxxx.
Cambridge.
R Xxxxxx, 1,000 Preferred (B) Ordinary
0, Xxxxxxxxxx Xxxxxx,
Xxxxxxxxx. XX0 0XX
G Xxxxxxxx, 1,000 Preferred B Ordinary
00, Xxxxxxxxxx Xxx,
Xxxxxxxxx. XX0 0XX
R Xxxxxxxx, 500 Preferred (B) Ordinary
00, Xxxxxxxxx,
Xxx Xxxx,
Xxxxxxxxx. XX0 0XX
P Xxxxxxx, 500 Preferred (B) Ordinary
00, Xxxxxxxxx Xxxxx,
Xxxxxx'x Xxxxxxxxx,
Xxxxx. XX00 0XX
J Xxxxxxx, 1,500 Preferred (B) Ordinary
00, Xxxxxx Xxxx,
Xxxxxxxxx
-34-
SECOND SCHEDULE
Registered number:- 3403550
Date of Incorporation:- 9 July 1997
Incorporated under the Companies Xxx 0000
Registered Office:- Xxxxxxx Xxxxx
Xxxxxxx Xxx
Xxxxxx
Xxxxxxxxx XX0 0XX
Authorized Capital:- 5,754,444 X0.0000 Xxxxxxxx Shares
1,023,332 L0.0001 Deferred Ordinary Shares
12,000,000 L0.0001 Preferred Ordinary Shares
1,892,507 L0.0001 Preferred "B" Ordinary Shares
Issued Capital:- 4,310,000 Ordinary Shares
1,023,332 Deferred Ordinary Shares
12,000,000 Preferred Ordinary Shares
1,892,507 Preferred B Ordinary Shares
Shareholders:- See First Schedule
Directors:- Xxxxxx Xxxx Xxxxx Xxxxx Xxxx Xxxxxx
Xxxxxxx Xxxxxxx Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx Xxxxxxx Andries Van Dam
Xx Xxxxxxxx Xxxxxxxx Xxxxxx
Secretary:- Xxxxxx Xxxx Xxxxx
Accounting Reference Date:- 30 September
Subsisting Mortgages and Charges:-
Debenture dated 24 January 2001 in favour of 3i plc, 3i Bioscience Investment
Trust plc and TVM Techno Venture Management III GmbH & Co Beteilgungs KG.
-35-
THIRD SCHEDULE
THE PROPERTIES
1. The suites known as 232 and 233 at Xxxxxxx Xxxxx, Xxxxxx Xxxx, Xxxxxx,
Xxxxxxxxx XX0 0XX occupied by Licence Agreement dated 15 March 2000.
2. The rooms known as 218 and 219 at Xxxxxxx Xxxxx, Xxxxxx Xxxx, Xxxxxx,
Xxxxxxxxx XX0 0XX occupied under Regus Business Centre Service
Agreement dated 21 August 2000.
3. The rooms known as West Wing at Xxxxxxx Xxxxx, Xxxxxx Xxxx, Xxxxxx,
Xxxxxxxxx XX0 0XX occupied by Licence Agreement dated 11 February 1999.
-36-
FOURTH SCHEDULE
WARRANTIES
1. GENERAL
1.1. THE SHARES
1.1.1. The Shares, together with those numbers of shares specified in
the First Schedule against the names of those shareholders of
the Company who have not signed this agreement will at
Completion constitute the whole of the issued and allotted
share capital of the Company. All shares in issue in the
Company are fully paid or credited as fully paid.
1.1.2. Immediately following Completion there will be no options,
rights to subscribe for, conversion rights, calls or contracts
for the issue or allotment or transfer of any shares in the
capital of the Company or instruments convertible into shares
of the Company in favour of any person and without limitation
to the foregoing all options in favour of all Option Holders
have been validly and effectively cancelled without any
payment of money or other obligation (actual or contingent)
being made or incurred by the Company.
1.2. ACCURACY OF INFORMATION
All written information given by any of the Vendors or their
agents to the Purchaser or its agents relating to the
business, activities, affairs, or assets or liabilities of the
Company (including, without limitation, the replies made by
the Vendors' Solicitors to the questionnaire sent by the
Purchaser's Solicitors in relation to the Company) in the
course of the negotiations leading up to this
-37-
agreement was, when given, and is now true, complete and
accurate and not misleading.
1.3. ACCURACY OF DISCLOSURE LETTER
All statements of fact and information contained or referred
to in and all documents annexed to the Disclosure Letter are
true, complete and accurate and not misleading, all statements
of opinion in the Disclosure Letter have been made after due
and careful enquiry and are reasonably believed to be correct
and nothing has been omitted from the Disclosure Letter which
renders any of such statements incomplete, inaccurate or
misleading.
-38-
2. THE COMPANY
2.1. THE COMPANY
The Company is a private company limited by shares
incorporated in England and the information set out in the
second schedule is correct.
The Company's sole business is that of software development
and related services and it has never carried on any other
business. The Company does not have, and never has had, any
subsidiaries.
2.2. DIRECTORS
The Company does not have any directors, shadow directors or
alternate or associate directors other than the persons listed
in the second schedule.
2.3. TRADING NAMES ETC
The Company uses (and since its incorporation has used) no
name other than its corporate name for any purpose.
2.4. AGENTS
No person is authorized to act as agent for the Company or to
bind the Company otherwise than the directors of the Company
acting as the Board. There are no powers of attorney given by
the Company which are in force.
2.5. OVERSEAS AGENCIES
The Company does not have any branch, agency or any permanent
establishment outside the United Kingdom.
-39-
2.6. STATUTORY AND OTHER REGULATIONS
2.6.1. The Company has at all times carried on business and conducted
its affairs in all respects in accordance with its Memorandum
and Articles of Association and other shareholder agreements
for the time being in force.
2.6.2. All permits necessary to the proper carrying on of the
business of the Company have been obtained and the Company is
not and has not been in breach of any of their terms or
conditions.
2.6.3. Neither the Company nor any of its officers is in breach of or
has failed to comply in full with any law applying to or
affecting the business or activities of the Company and the
Company has not received any notice letter or complaint
alleging a breach by it of any law.
2.6.4. There are no investigations or enquiries (pending, threatened
or in existence) by or on behalf of any governmental or other
body in respect of the affairs of the Company.
2.7. STATUTORY BOOKS AND MEMORANDA AND ARTICLES OF ASSOCIATION
2.7.1. The Register of Members and other books and records required
by the Companies Act to be kept by the Company contain an
accurate and complete record of the matters with which they
should deal and there has been no notice of any proceedings to
correct or rectify any such books.
2.7.2. The copy of the Memorandum and Articles of Association of the
Company attached to the Disclosure Letter is complete and
accurate in all respects and has
-40-
embodied in it or annexed to it a copy of every such
resolution and agreement as is referred to in section 380 of
the Companies Act.
2.8. INSOLVENCY
2.8.1. The Company has never been a party to any transaction to which
the provisions of sections 238 to 246 (inclusive) of the
Insolvency Xxx 0000 may be applicable.
2.8.2. No order has been made or petition presented or resolution
passed for the winding up or administration of the Company, no
receiver or administrator or administrative receiver has been
appointed or could lawfully be appointed by any person of the
Company's business or assets or any part thereof, the Company
is not insolvent and has not stopped payment and is not unable
to pay its debts (within the meaning of section 123 of the
Insolvency Act 1986).
2.9. PURCHASE OF SHARES
The Company has not at any time acted in breach of section 151
of the Companies Act and nor has it ever given financial
assistance in connection with the acquisition of its own or
any holding company's shares in accordance with the provisions
of section 155 of the Companies Act.
The Company has never reduced, purchased or redeemed its share
capital or agreed to do so.
2.10. REGISTRATION OF CHARGES
All charges in favour of the Company have (if appropriate)
been registered in accordance with the Companies Act.
-41-
2.11. POSSESSION OF DOCUMENTS
All title deeds relating to the assets of the Company and an
executed copy of all agreements to which Company is a party
and the original copies of all other documents which are owned
by, or which ought to be in the possession of, the Company are
in its possession.
3. THE ACCOUNTS
3.1. THE ACCOUNTS
The Accounts:-
3.1.1. have been prepared in accordance with the historical cost
convention;
3.1.2. comply with the requirements of the Companies Act, all other
relevant statutes, all relevant SSAP's, all relevant
pronouncements issued or adopted by the Accounting Standards
Board Limited and other generally accepted accounting
practices ("GAAP") applicable to a United Kingdom company and
have been audited in accordance with the Auditing Standards
issued by the Auditing Practices Board;
3.1.3. have been prepared on the same bases and policies of
accounting as the published statutory accounts of the Company
for the preceding two accounting reference periods (and in
particular there has been no change in any practice or policy
or in any methods or bases of valuation or any accountancy
treatment relating to the keeping of any such accounts);
-42-
3.1.4. give a true and fair view of the state of affairs of the
Company at the Balance Sheet Date and of its profit or loss
for the financial period ended on the Balance Sheet Date;
3.1.5. properly disclose all the assets of the Company as at the
Balance Sheet Date;
3.1.6. contain proper provision or reserves or appropriate notes in
respect of all liabilities (whether actual or contingent,
quantified or disputed) of the Company as at the Balance Sheet
Date;
3.1.7. contain proper provision or reserves for Taxation assessed or
liable to be assessed on the Company or for which it is or may
become liable up to the Balance Sheet Date and any liability
to pay Taxation which has been deferred for any reason;
3.1.8. contain proper provision for depreciation and for any
obsolescence of assets (all rates of depreciation being
consistent over the two financial years preceding the Balance
Sheet Date) and the policy of depreciation has been applied in
accordance with SSAP 12;
3.1.9. [intentionally omitted]
3.1.10. properly disclose all capital and leasing commitments of the
Company; and
3.1.11. are not affected by any extraordinary or non-recurring items.
3.2. PAST ACCOUNTS
The published statutory accounts of the Company for the two
accounting reference periods preceding the period to which the
Accounts relate comply with the same criteria as described in
relation to the Accounts in paragraph 3.1 in
-43-
relation to the periods in respect of which and the date to
which they were each prepared.
3.3. BOOK DEBTS SHOWN IN THE ACCOUNTS
The debts shown in the Accounts (less the amount of any
provision or reserve calculated on the same basis as that
applied in the published statutory accounts of the Company for
the preceding two accounting reference periods) were good and
collectable in full in the ordinary and normal course of
business and have realised the net amount thereof and none of
those debts:-
3.3.1. was at the Balance Sheet Date subject to any counter-claim or
set off (except to the extent of any such provision or
reserve) or overdue by more than eight weeks; or
3.3.2. has subsequently been released on terms that any debtor pays
less than the full book value of his debt or has been written
off or has proved to any extent irrecoverable or is now
regarded as irrecoverable (in whole or in part).
3.4. ACCOUNTING RECORDS
All accounts, books, ledgers, financial and other records of
the Company are in the possession of the Company have been
kept and completed in accordance with statutory requirements
and show and explain all transactions entered into by the
Company.
4. THE PROPERTIES
4.1. Save for the Company's serviced premises at the Properties ,
the Company does not occupy and has no interest in any real
property. A complete copy of all the
-44-
terms and obligations applicable to the Company's occupation
of the Properties is attached to the Disclosure Letter.
4.2. The Company is not under any liability, actual or contingent,
in respect of any obligation which it may have undertaken as
tenant, licensee, assignee or surety relating to any real
property other than the Properties.
4.3. The Company is not in default of any of its obligations
relating to the Properties.
5. FIXED AND CURRENT ASSETS
5.1. OWNERSHIP OF ASSETS
The Company is the sole owner with good and marketable title
free from all liens, charges, encumbrances, options or adverse
claims (including any hiring, licensing or rental agreements
or reservations of title) of all the assets included in the
Accounts or acquired after the Balance Sheet Date which it
owns or reputedly owns (subject to sales of current assets in
the ordinary and normal course of its trading) or which are
now in its possession or under its control or which it uses in
its business and the Company has not agreed to create or grant
any lien, charge, option or other Encumbrance over such
assets.
5.2. ASSETS USED IN THE BUSINESS
5.2.1. The assets owned by the Company together with any assets held
under any hire or hire purchase rental or leasing agreement
(the material details of which are contained in the Disclosure
Letter) comprise all the assets necessary for the continuation
of the Company's business as now carried on.
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5.2.2. The Company does not use and there is no necessity for it to
use in the course of its business any asset which belongs to
or is hired, leased or licensed to or is otherwise in the
possession or under the control of the Vendors (or any of
them) or any of their Associates.
5.3. PLANT AND MACHINERY
5.3.1. The vehicles and other equipment owned by or used in
connection with the business of the Company ("EQUIPMENT"):-
5.3.1.1. are in a good and safe state of repair and condition, complies
in all material respects with the relevant standards required
by the Occupiers Liability Acts 1957 and 1984, the Xxxxxxxxx
Xxx 0000, the Offices, Shops and Railway Premises Act 1963 and
the Health and Safety at Work etc. Xxx 0000 and all other
legislation regulating the health and safety of equipment used
in the Company and none of it is in need of renewal or
replacement other than on the basis set out in the Disclosure
Letter;
5.3.1.2. are in the possession and (save for those items the subject of
the hire, hire purchase, rental or leasing agreements listed
in the Disclosure Letter) control of the Company; and
5.3.1.3. are all capable, and (subject to normal wear and tear) will
remain capable, throughout the respective periods of time
during which they are each written down to a nil value in the
accounts of the Company (in accordance with the normal
recognised accountancy principles consistently applied prior
to the date hereof) of doing the work for which they were
designed or purchased.
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5.3.2. The registers of the Company comprise a complete and accurate
record of all the Equipment.
5.3.2.1. Maintenance contracts are in full force and effect in respect
of all Equipment which is of a kind which is normal or prudent
to have maintained by independent or specialist contractors;
5.3.2.2. the Equipment has been regularly maintained to a good
technical standard including compliance with all appropriate
safety regulations and manufacturers instructions; and
5.3.2.3. the Company did not suffer any material failures or breakdowns
in the Equipment during the year preceding the date of this
agreement.
5.4. COMPUTER EQUIPMENT AND SOFTWARE
5.4.1. The Company has in force maintenance contracts for all items
of computer hardware (including operating systems) and
software support contracts for all items of software which it
uses and there is no reason to believe that these maintenance
and support contracts will not be renewed by the other
contracting party upon their expiry (if so required by the
Company) upon substantially similar terms to those now
applicable.
5.4.2. The Company did not suffer any failures or breakdowns of or
bugs in the computer hardware which it now uses during the
year preceding the date of this agreement.
5.4.3. The Company has operated and used all items of computer
hardware used by it in accordance with the manufacturers
recommendations including (without
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limitation) any recommendations as to environmental
conditions and power supply.
5.5. INTEGRITY OF COMPUTER SYSTEMS
5.5.1. The Company has taken proper precautions to preserve the
availability confidentiality and integrity of its computer
systems.
5.5.2. So far as the Company is aware all computer software
(including all programs and data in such software) used by the
Company is reliable and readable and all media on which such
software is stored are in good readable condition and contain
no programs or data which are either intended to or which may
have the effect of modifying, deleting or otherwise impairing
such software (or any of the programs or data in such
software) or any other programs or data which are either
intended to or which may have the effect of impairing any
computer hardware.
5.5.3. The Company is not aware of any case where unauthorized access
to the Company's computer systems has taken place, or where
any of the software or data in those computer systems has been
modified without the Company's express authority or where
fraud has been committed against the Company by use or abuse
of its computer systems whether alone or in conjunction with
any third party.
5.6. LEASED ASSETS
The Company does not use any asset, under a lease or similar
agreement.
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5.7. BOOK DEBTS
5.7.1. None of the debts which are due to the Company at the date of
this agreement and which shall have arisen after the Balance
Sheet Date are now or have at any time been overdue by more
than 30 days nor have any of those debts been written off or
proved to be irrecoverable to any extent.
5.7.2. The full amount of all debts which shall be owing to the
Company at Completion (whenever arising) will be recovered in
full free of any counter-claim or set off (less the amount of
any provision or reserve which has been calculated on the same
basis as that applied in the Accounts or disclosed in the
Disclosure Letter) in the ordinary and normal course of
business.
5.7.3. Since the Balance Sheet Date no other obligations due to the
Company have been written off or written down or have proved
to be irrecoverable in whole or in part or are now regarded as
irrecoverable nor has there been any agreement for the release
of any person under any liability to the Company.
6. SOFTWARE AND INTELLECTUAL PROPERTY
6.1. In this paragraph 6:-
"SOFTWARE" means the computer software owned by the Company
the details of which, and the associated Intellectual Property
Rights of the Company relating to which, are specified in
schedule 9 including all programs and data in such software
and all manuals and operator guides relating to such software;
"THIRD PARTY SOFTWARE" means the computer software licensed to
the Company the details of which are specified in schedule 10
(each a "Software Licence")
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including all programs and data in such software and all
manuals and operator guides relating to such software;
"SOURCE CODES" means the source codes which are included in or
relate to the Software in each case deposited on magnetic
media, all information in human readable form necessary to
enable a reasonably skilled programmer or analyst to maintain
or enhance the Software and the Third Party Software without
the assistance of any other person or reference to any other
materials, including all maintenance tools (test programs and
program specifications) and all logic manuals and flow charts
made by developers of such source codes which relate to such
source codes.
"INTELLECTUAL PROPERTY RIGHTS" includes patents, trade marks,
service marks, registered designs, design rights,
semi-conductor, topography rights, copyrights, database
rights, know-how, get up, confidential information, business
names, internet domain names and any other similar protected
rights in any country together with pending applications for
registration or recording thereof;
"LICENSED RIGHTS" means the Intellectual Property Rights not
owned by the Company but used or required by the Company in
connection with its businesses including the Intellectual
Property Rights in the Third Party Software.
6.2. The Company does not use or incorporate any Third Party
Software or the Intellectual Property Rights of any other
person in any of the Software sold, licensed, supplied,
developed, maintained or otherwise provided to or for any
customer of the Company.
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6.3. The Software and the Third Party Software is all the computer
software owned, used, required or supplied by the Company in
connection with its business.
6.4. The Company does not own or need to use any Intellectual
Property Rights apart from its own know-how and confidential
information and the Intellectual Property Rights in the
Software, the Third Party Software and in the Source Codes of
the Software. The Company does not need to use the Source
Codes of the Third Party Software.
6.5. The Company is the sole beneficial owner of the Intellectual
Property Rights in the Software and the Source Codes of the
Software, free from Encumbrances, each of such Rights is valid
and enforceable and none of them is being claimed, opposed or
attacked by any other person.
6.6. So far as the Company is aware, the Company has used all
necessary care and skill in the development of the Software.
6.7. The Company has not restricted or disposed of any ability to
use, develop, maintain, sell, license, provide or otherwise
supply the Software or the Source Codes of the Software or any
Intellectual Property therein in such manner or on such terms
as the Company may think fit or agreed to do any of the
foregoing.
6.8. No right has been granted by or on behalf of the Company or
any of the Vendors to any person to do any thing which would
or might otherwise infringe the Intellectual Property Rights
in the Source Codes of the Software and so far as the Company
is aware, no act has been done by the Company or omission
capable of
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remedy by the Company occurred whereby they or any of them
have ceased or might cease to be valid and enforceable.
6.9. So far as the Company is aware the business of the Company
(and, so far as the Company is aware, of any licensee under a
licence granted by the Company) as now carried on does not and
is not likely to infringe any Intellectual Property Rights of
any other person or give rise to a liability on the Company to
pay compensation pursuant to sections 40 and 41 Patents Xxx
0000.
6.10. All formulae, processes and other information forming part of
the Intellectual Property Rights in the Software and the
Source Codes of the Software or of the Licensed Rights
(including in each case know-how and confidential information)
are adequately documented and to the extent that they are
confidential or material to the business of the Company or the
subject of a confidentiality obligation in favour of the
Company's licensor have not been (and nor is there any
agreement that they will be) disclosed to any third party by
the Company.
6.11. So far as the Company is aware the Company has complied with
its obligations' representations, warranties and undertakings
pursuant to any contract which requires the Company to
develop, license, sell, provide, maintain or otherwise supply
any of the Software or services in relation to the Software
and in particular, any such Software conforms to the
specifications contained or referred to in the relevant
contract and so far as the Company is aware is fully capable
of performing all tasks and functions for which it has been
developed, licensed, sold, provided, maintained or otherwise
supplied.
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6.12. All manuals and operator guides relating to the Software and
the Third Party Software are sufficient to enable the
Purchaser to make full, proper and efficient use of the
Software and the Third Party Software.
6.13. The Company owns and is in possession of up to date and
accurate copies of the Source Codes of the Software. The
disclosure letter identifies the names of all persons who have
been provided by the Company with a copy of the Source Codes
of the Software.
6.14. No right has been granted by or on behalf of the Company or
any of the Vendors to any person to do any thing which would
or might otherwise infringe the Intellectual Property Rights
in the Software otherwise than by way of a non-exclusive
licence to use the Software in object code form only granted
on a commercial basis in the ordinary course of the business
of the Company.
6.15. The terms of any licence granted by or on behalf of the
Company to use the Software have been attached to the
Disclosure Letter and such licences are enforceable by the
Company in accordance with their terms and there has not been
any default (or any event which with notice or lapse of time
or both would constitute a default) under any of them by the
Company or so far as the Company is aware by any other party
to such licences.
6.16. Every copy of the Software supplied pursuant to the licences
referred to in paragraph 6.15 has included appropriate
copyright notices and effective protection against copying and
against access to the Source Codes of the Software.
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6.17. So far as the Company is aware, none of the Intellectual
Property Rights in the Software and the Source Codes of the
Software are being used by any other person other than in
accordance with the terms of licences granted by or on behalf
of the Company.
6.18. The Company has not registered or applied to register any of
the Intellectual Property Rights in the Software and the
Source Codes or any other Intellectual Property Rights in any
country in which they are used and in which paid registration
is possible.
6.19. There is no reason to believe that any Intellectual Property
Rights in the Software and the Source Codes cannot be
registered by the Company in countries in which they are used
and in which such registration is possible and (in the case of
trade and service marks which form part of such Rights) in
respect of the goods and services in relation to which they
are used. The Company is not aware from such enquiries as it
may have made of any reason to believe that the Company cannot
be registered as proprietor of such Rights in all other
countries of the world where such registration is possible and
(in the case of trade and service marks which form part of
such Rights) in respect of all other goods and services.
6.20. So far as the Company is aware the Company has in force
software support contracts for all relevant items of Third
Party Software and so far as the Company is aware no reason to
believe that these software support contracts will not be
renewed by the other contracting party upon their expiry (if
so required by the Company) upon substantially similar terms
to those now applicable.
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6.21. Neither the Company nor, so far as the Company is aware, any
customer of the Company suffered any material failures or bugs
in or breakdowns of the Software during the year preceding the
date of this agreement. The Company did not suffer any
failures or breakdowns or bugs in or of any of the Third Party
Software in the year preceding the date of this agreement.
6.22. So far as the Company is aware, none of the Company's
employees or independent contractors involved in the
development of the Software were, during the period of such
development, under any obligation to any third party (whether
in relation to any previous service contract or contract for
services or otherwise) which would or might have an adverse
effect on the Company's claim to ownership of the Software or
the Source codes of the Software.
6.23. The Software Licences authorise the Company to use the Third
Party Software in the ways in which they are in fact used or
are required to be used in connection with the business of the
Company as it is now carried on.
6.24. The Software Licences are in full force and effect and are
enforceable by the Company in accordance with their terms and
there has not been any default (or any event which with notice
or lapse of time or both would constitute a default) under any
of them by the Company or so far as the Company is aware by
any other party to such Software Licences.
6.25. The Company does not use or need to use for the purposes of
its business as now carried on by it any Licensed Rights save
for Licensed Rights relating to the Third Party Software.
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6.26. So far as the Company is aware no right has been granted by or
on behalf of the Company or any of the Vendors to any person
to do any thing which would or might otherwise infringe the
Licensed Rights and no act has been done by the Company or
omission capable of remedy by the Company occurred whereby
they or any of them have ceased or might cease to be valid and
enforceable.
7. FINANCIAL POSITION
7.1. Events since the Balance Sheet Date
Since the Balance Sheet Date:-
7.1.1. [intentionally omitted]
7.1.2. the business of the Company has been carried on in the
ordinary and normal course, without any interruption and
without any alteration in its nature, conduct, scale, scope or
manner and no unusual or abnormal contract differing from the
ordinary contracts necessitated by the nature of its business
has been entered into by the Company;
7.1.3. there has been no change in:-
7.1.3.1. the manner or time of the issue of invoices or collection of
debts; or
7.1.3.2. the policy of reserving for debtors;
7.1.4. no substantial supplier or customer of the Company (being a
supplier who, during the period covered by the Accounts
supplied more than 5% of the invoice value of all of the
Company's purchases or a customer who during the period
covered by the Accounts purchased more than 5% of the invoice
value of all of the Company's sales) has ceased or
substantially reduced its trade with the Company;
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7.1.5. no asset has been acquired or disposed of or has been agreed
to be acquired or disposed of (save for assets acquired or
disposed of in the ordinary and normal course of business on
arm's length terms) and no contract involving expenditure by
it on capital account has been entered into by the Company;
7.1.6. the Company has not paid or become liable to pay any
management, service or other charge or other payment of any
kind to the Vendors or to any person with whom the Vendors are
connected (within the meaning of section 839 Taxes Act) other
than in respect of goods and services supplied in the ordinary
and normal course of business on commercial terms;
7.1.7. the Company has neither disbursed nor received any cash except
in the ordinary and normal course of its business and all
amounts received by or on behalf of the Company have been
deposited with its bankers and appear in the appropriate books
of account;
7.1.8. the Company has not declared, paid or made any dividends or
other distributions within the meaning of the Taxes Act;
7.1.9. the Company has not made any loans or incurred any borrowings
or liabilities except trade creditors or borrowings under the
Loan Agreement in the ordinary and normal course of its
business; and
7.1.10. the accounting reference period of the Company has not ended
or been extended.
7.2. AMOUNTS DUE TO CREDITORS
[intentionally omitted]
7.3. BANK AND OTHER BORROWINGS
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7.3.1. Full details of all limits on the Company's bank overdraft and
other borrowing facilities together with true, complete and
accurate copies of all letters of credit, guarantees and other
financial instruments issued on behalf of or for the benefit
of the Company and which remain in force are contained in the
Disclosure Letter.
7.3.2. The total amount borrowed, and the terms of such borrowing, by
the Company does not exceed any limitation contained in its
Memorandum or Articles of Association or pursuant to any other
document or obligation to which the Company is a party or by
which it is bound and the amount borrowed from its lenders
does not exceed its facilities.
7.3.3. No overdraft or other financial facilities of the Company are
dependent upon a guarantee of, or a security provided by, the
Vendors or any third party.
7.3.4. The Company does not have outstanding and has not agreed to
create or issue any loan capital; nor has it factored or
discounted any of its debts (or agreed to do so), or been
engaged in financing of a type which would not require to be
shown or reflected in the Accounts; or borrowed any money
which it has not repaid (save for borrowings not exceeding the
amounts shown in the Accounts).
7.3.5. The Company has not since the Balance Sheet Date, repaid, or
become liable to repay, any loan or indebtedness in advance of
its stated maturity.
7.3.6. Neither the acquisition of the Shares by the Purchaser nor the
compliance of any terms of this agreement will entitle (and no
other event has occurred which would entitle) any third party
(with or without the giving of notice) to call for the
repayment of any indebtedness of the Company prior to its
normal maturity date
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other than the Loan Agreement a copy of which is attached to
the Agreement at appendix 4 .
8. TAXATION
8.1. DEFINITIONS
In this Part 8:
"ACT" means advance corporation tax;
"CAA" means the Capital Xxxxxxxxxx Xxx 0000;
"IHTA" means the Inheritance Tax Xxx 0000;
"TCGA" means the Taxation of Chargeable Gains Xxx 0000;
"TMA" means the Taxes Management Xxx 0000;
"VAT" means value added tax;
"VATA" means the Value Added Tax Xxx 0000.
8.2. GENERAL
8.2.1. All returns, amended returns, computations and payments which
should be or should have been made by the Company for any
fiscal purpose have been prepared on a proper basis and
submitted within the prescribed time limits and are up to date
and correct and none of them is now the subject or so far as
the Company is aware likely to be the subject of any dispute
with the Inland Revenue or HM Customs and Excise or other
authority concerned.
8.2.2. All particulars furnished to the Revenue in connection with
the application for any consent or clearance on behalf of the
Company accurately disclosed all facts and circumstances
material to the decision of the Revenue, any such consent or
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clearance is valid and effective and any such transaction for
which such consent or clearance has previously been obtained
has been carried into effect only in accordance with the terms
of the relevant application and consent for clearance.
8.2.3. The Company is not the subject of a back duty investigation or
in-depth enquiry by any fiscal authority and there are no
facts known to the Company which may give rise to the same.
8.2.4. All income tax under the PAYE system and payments due in
respect of employees' contributions to national insurance and
graduated state pension have been properly deducted by the
Company and (together with any employer's contribution) have
been fully and correctly paid to the appropriate authority and
proper records thereof have been maintained.
8.2.5. All Taxation required to be deducted from any payments made by
the Company which it is obliged or entitled to make has been
deducted and accounted in full to the appropriate authority.
8.2.6. The Company has never been requested to furnish information
pursuant to notices served under section 745 or 778 Taxes Act.
8.2.7. No transactions have been undertaken falling within sections
765 or 765A Taxes Act.
8.2.8. The Company is not and has at no time been an investment
company, a close investment company or an investment trust
company for Taxation purposes.
8.2.9. The Company has not since the Balance Sheet Date taken any
action which has had, or might have, the result of altering or
prejudicing or in any way disturbing
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any arrangement or agreement which it has previously
negotiated with the Revenue.
8.2.10. The Taxation computations for all accounting periods of the
Company ended on or before the last accounts date to which tax
computations have been agreed with the Revenue or if not known
the last accounts date of the Company, have been agreed with
the Revenue.
8.2.11. The Company is and has always been resident only in the United
Kingdom for Taxation purposes and has never carried on any
trade, business or other activities outside the United Kingdom
other than the export of its goods and/or services in the
ordinary and normal course of its business.
8.3. TAXABLE PROFITS
8.3.1. The Company has not directly or indirectly paid any
remuneration, emoluments or compensation for loss of office or
made any gratuitous payment or transferred any assets to any
of its present or former directors or employees, the cost of
which will not be deductible for Taxation purposes.
8.3.2. The Company has not made and is under no obligation pursuant
to which it is or at any time may become liable to make any
payment of interest, annuity or other annual payment such as
may be disallowed as a deduction as a set-off or as a charge
on income or otherwise be unrelieved for corporation tax
purposes whether by virtue of section 125 or section 787 Taxes
Act or otherwise.
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8.3.3. No transactions or arrangements involving the Company have
taken place or are in existence such that the provisions of
section 770 Taxes Act could be or have been applied.
8.3.4. There have been no events or circumstances such that sections
343 or 768 Taxes Act have been or could be applied.
8.4. CAPITAL ASSETS
8.4.1. Save as provided for in the Accounts the values attributed to
each of the assets of the Company as at the Balance Sheet Date
is such that on any disposal of any of those assets which is
treated for Taxation purposes as being for a consideration
equal to such value (ignoring any relieves and allowances
available to the Company other than amounts falling to be
deducted under section 38 TCGA) no chargeable gain or
allowable loss would arise.
8.4.2. Since the Balance Sheet Date no asset has been acquired
otherwise than by way of a bargain made at arm's length and
for a consideration equal to its market value.
8.4.3. The Company is not subject to any contingent liability as is
mentioned in section 49 TCGA.
8.4.4. The Company has not effected or been a party to any demerger
such as is mentioned in sections 213 to 218 Taxes Act.
8.4.5. The Company has not been a party to or involved in any
transaction within section 29 TCGA or any scheme or
arrangement within sections 30 to 34 TCGA.
8.4.6. The Company has never made a claim pursuant to sections 23 or
24 TCGA.
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8.4.7. The Company has never been a party to a transaction falling
within section 17 TCGA.
8.4.8. The Company has not received any asset by way of gift as
mentioned in section 282 TCGA.
8.4.9. The Company does not own any shares or securities acquired as
a "new holding" under the provisions of sections 126 to 130
TCGA.
8.4.10. Neither the Company nor any company which was a member of the
same group of companies at the relevant time has made any
claim under sections 152, 153 or 247 TCGA.
8.4.11. The Company has not been a party to or involved in any share
for share exchange nor any scheme of reconstruction or
amalgamation such as are mentioned in sections 135 and 136
TCGA.
8.4.12. The Company has not been a party to any depreciatory
transactions within the meaning of sections 176 and 177 TCGA.
8.4.13. The Company has not been subject to any claim or election
under section 35 or Schedule 4 TCGA, whether made by itself or
any other person.
8.4.14. The Company has never made an election under paragraph 4 of
Schedule 2 TCGA.
8.4.15. The Company will not be subject to corporation tax on the
disposal of any debt owing to the Company.
8.4.16. Each and every loan made by the Company is a "qualifying loan"
for the purpose of section 253 TCGA.
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8.4.17. The Company is not entitled to any loss to which section 18
TCGA applies.
8.4.18. The Company does not own and has not owned and has never
issued any relevant discounted securities or qualifying
corporate bonds (as defined in Schedule 13 Finance Xxx 0000 or
section 117 TCGA respectively).
8.4.19. The Company has sufficient information contained in its
records to calculate any chargeable gain or allowable loss
which may arise as the result of the disposal of assets owned
by the Company at the Balance Sheet Date.
8.5. CAPITAL ALLOWANCES
8.5.1. The book value of each of the assets of the Company in or
adopted for the purposes of the Accounts on which capital
allowances are calculated separately does not exceed the
written down value of such asset for the purposes of the CAA
and the aggregate book value of plant and machinery for which
capital allowances have been claimed under Part II of that Act
does not exceed the written down value of the qualifying
expenditure under that Act.
8.5.2. The Company has not been a party to or involved in any
transaction whereby a balancing allowance would be denied or
reduced by virtue of section 5 CAA.
8.5.3. No allowances have been claimed by the Company which are
liable to be reduced or withdrawn by virtue of sections 1(6),
42 or 47 CAA.
8.5.4. No capital expenditure has been incurred which is subject to
the provisions of section 75 CAA.
8.6. GROUP ARRANGEMENTS
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8.6.1. The Company has never been a member of any group of companies
for any Taxation purpose.
8.6.2. The Company has not ceased to be a member of a group of
companies for the purposes of sections 178 and 179 TCGA and
will not cease to be a member of such a group as a result of
Completion.
8.6.3. The Company has not at any time within the period of six years
ending with the date of this agreement, acquired any assets
other than trading stock from any company which, at the time
of the acquisition, was a member of the same group (as defined
in section 170 TCGA) as the Company.
8.6.4. The Disclosure Letter sets out full details of any surrender
or agreement to surrender, or acceptance or agreement to
accept the surrender, by the Company of any amount by way of
group relief under the provisions of sections 402, 403 and 407
to 413 Taxes Act.
8.6.5. All claims for group relief made by the Company were valid and
have been or will be allowed by way of relief from corporation
tax and the Company is not and will not, as a result of
anything done before the date of this agreement, become liable
to make any payment for an amount surrendered by any other
company under or in connection in with the provisions of
section 402 Taxes Act.
8.6.6. The Company is not and has not at any time been party to any
arrangement falling within section 410 Taxes Act.
8.6.7. The Company has not made or purported to make any election
under section 247 Taxes Act.
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8.6.8. The Company has not made nor received nor purported to make or
receive any surrender of the benefit of ACT under section 240
Taxes Act.
8.6.9. The Company is not liable to be assessed to any Taxation under
the provisions of section 190 TCGA.
8.7. DISTRIBUTIONS AND ADVANCE CORPORATION TAX
8.7.1. The Company has not at any time done anything which has been
or will be treated as a distribution for the purposes of
sections 209 or 210 Taxes Act.
8.7.2. No event or series of events has occurred which might cause
the disallowance of the carry forward of losses or excess
charges or such that any of sections 245 or 245A or 245B Taxes
Act have applied or could apply.
8.7.3. The Company has not issued any share capital to which the
provisions of section 249 Taxes Act or section 141 TCGA
applies nor does it own any such share capital nor granted
options or rights to any person which entitles that person to
require the issue of any share capital.
8.7.4. The Company will be entitled in respect of any qualifying
distribution made by it to a full set off of its corresponding
payment of ACT under section 239(1) Taxes Act or in so far as
there is no set off under section 239(1) or in so far as any
set off is restricted under section 239(3).
8.7.5. The Company has not made or received any distribution which is
an exempt distribution within sections 213 to 218(1)
(inclusive) Taxes Act.
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8.8. STAMP DUTY
8.8.1. All instruments (other than those which have ceased to have a
legal effect) executed by the Company (and which are or were
subject to stamp duty) have been duly stamped and the Company
has not executed any other instrument relating to any property
situate in, or to any matter or thing done or to be done in,
any part of the United Kingdom.
8.8.2. The Company has no liability to stamp duty reserve tax.
8.8.3. No relief or exemption has been obtained from stamp duty under
section 42 Finance Xxx 0000 or sections 75-79 (inclusive)
Finance Xxx 0000.
8.9. ANTI-AVOIDANCE
8.9.1. The Company has not entered into or been a party to any
pre-ordained series of transactions, composite transactions or
any other schemes or arrangements into which steps were
inserted which served no purpose other than the saving of
Taxation.
8.9.2. The Company has not been party to any other transaction or
arrangement of any nature which could give rise to a charge to
Taxation under Part XVII Taxes Act.
8.10. CLOSE COMPANY
8.10.1. The Company has never been a close company for the purposes of
the Taxes Act.
8.10.2. The Company has no loan outstanding to which the provisions of
sections 419 and 420 Taxes Act would apply.
8.10.3. The Company has not held and does not hold shares in a company
not being another member of a group of companies (including
the Company) as defined in
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section 170 TCGA which has made any such transfer as was
referred to in section 125 TCGA.
8.10.4. The Company is not liable to be assessed to inheritance tax by
virtue of section 202 IHTA.
8.10.5. 8.10.5 There is no potential liability or any unsatisfied
liability to inheritance tax attached or attributable to the
shares in or to any assets of the Company such that they are
or may hereafter become subject to an Inland Revenue charge as
mentioned in section 237 and 238 IHTA.
8.10.6. No liability to inheritance tax attributable to the shares in
or to any assets of the Company is being settled by
instalments.
8.10.7. The Company is not entitled to any interest in possession in
settled property.
8.10.8. No person is actually or potentially liable to inheritance tax
attributable to the value of any of the shares and in
consequence no person has or may acquire the power to raise
the amount of such tax by sale or mortgage of or by a terminal
charge on any of the shares as mentioned in section 212 IHTA.
8.10.9. The Company has not made any transfers of value within section
94 IHTA.
8.11. EVENTS SINCE THE BALANCE SHEET DATE
Since the Balance Sheet Date:-
8.11.1. the Company has not disposed of any asset (including trading
stock) or made any supply of any service or business facility
of any kind (including a loan of money or the letting, hiring
or licensing of any property whether tangible or intangible)
in circumstances where the consideration actually received or
receivable for such
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disposal or supply is less than the consideration which could
be deemed to have been received for the purposes of Taxation;
8.11.2. no event has occurred which gives rise to a liability to
Taxation to the Company on deemed (as opposed to actual)
income, profits or gains or which results in the Company
becoming liable to pay or bear a liability to Taxation
directly or primarily chargeable against or attributable to
another person, firm or company;
8.11.3. the Company has not made or received any distributions for any
Taxation purpose;
8.11.4. the Company has not surrendered or claimed any ACT under
Chapter V Taxes Act or any losses by way of group relief under
the Taxes Act;
8.11.5. the Company has not paid any remuneration (including
emoluments as defined by section 131 and sections 153-168
Taxes Act) to any officer, director or employee or to any
member of his family or household in excess of such amount as
will be deductible in computing the taxable profits of the
Company;
8.11.6. no payment has been made by the Company which will not be
deductible for the purposes of corporation tax (or any
corresponding tax on profits in any relevant foreign
jurisdiction), either in computing the profits of the Company
or in computing the corporation tax or corresponding tax
chargeable on it; and
8.11.7. no accounting period (as defined in section 12 Taxes Act) of
the Company has ended as referred to in section 12(3) of that
Act.
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8.12. VALUE ADDED TAX
8.12.1. In relation to VAT the Company has complied with all statutory
provisions, rules, regulations, orders and directions and made
all necessary returns; and within the prescribed time limits
provided all necessary information and documents to HM Customs
and Excise and paid all amounts due to the proper person.
8.12.2. The Company has at all times kept and preserved complete
correct and up-to-date records, invoices and other documents
required for the purposes of VAT.
8.12.3. The Company has not been required by HM Customs and Excise to
give security under paragraph 4 of schedule 11 to the VATA.
8.12.4. All VAT payable upon the importation of goods and all duties
of customs and excise payable in respect of any assets
(including trading stock) imported or owned by the Company
have been paid in full.
8.12.5. No act or transaction has been effected in consequence of
which the Company is or may be held liable for any VAT
calculated by reference to the supply of goods and services by
any other company.
8.12.6. The business of the Company has been conducted in such a
manner that the Commissioners could not issue a direction
under paragraph 2 of Schedule 1 VATA.
8.12.7. The Company is not liable and will not (in respect of anything
done before Completion) be liable to any interest, penalty or
surcharge in respect of VAT and in particular (but without
prejudice to the generality of the foregoing) the
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Company is and will not be so liable to any penalty, interest
or surcharge pursuant to sections 59, 63 to 70 and 74 VATA.
8.12.8. Neither the Company nor any of its officers or directors is or
will (in respect of anything done before Completion) be liable
to a penalty under sections 60, 61 or 62 VATA.
8.12.9. The Company is not and has not at any time been a member of a
group of companies for VAT purposes.
8.12.10. The Company is not and has not agreed to become an agent,
manager or factor for the purposes of sections 47 or 48 VATA
of any person who is not resident in the United Kingdom.
8.12.11. The Company has not incurred any expenditure in the ten years
preceding Completion on capital items such that the provisions
of Part XV of The Value Added Tax Regulations 1995 may apply
to the Company.
8.12.12. The Company obtains credit for all input tax paid or suffered
by it.
8.12.13. Full provision has been made in the Accounts for all input tax
owing or which may become due to any of the Company's
suppliers and for any refund of value added tax owing or which
may become due to any of the Company's customers.
8.12.14. The Company has not in the previous six years deducted any
input tax in reliance on the intended use of the goods or
services to which the input tax relates where the actual use
of those goods or services has not yet occurred.
8.13. VAT ON PROPERTY
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8.13.1. The Company does not own the fee simple in any building or
civil engineering work which is uncompleted or which was
completed (within the meaning of Note (2) to Group 1
Schedule 9 VATA) less than three years before the date of
this agreement.
8.13.2. The Disclosure Letter contains full particulars of:
8.13.2.1. any election under paragraph 2 Schedule 10 VATA to waive
exemption from VAT in relation to any land made by the Company
or by any member or former member of any group of companies of
which the Company is or was registered for VAT purposes; and
8.13.2.2. any agreement or other arrangement to which the Company is a
party whereby the Company has agreed not to waive exemption
from VAT pursuant to paragraph 2 Schedule 10 VATA in relation
to any land.
8.13.3. The Company has not given or accepted any certificate as to
zero-rating under the provisions referred to in section 62
VATA.
8.13.4. The Warranties contained in this paragraph 8.13 shall apply as
if references to the Company include not only the Company but
also every other company which is or was at any time a member
of the same group of companies for VAT purposes or for which
an application to become such a group member has been made
within the preceding three months (including without
limitation any parent of the Company or parent or subsidiary
of such parent).
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8.14. EMPLOYEE SHARE SCHEMES
8.14.1. The Disclosure Letter contains full details of all share
schemes (including those approved by the Inland Revenue and
unapproved schemes) which the Company operates or in which its
UK employees are entitled to participate, together with copies
of any approvals issued by the Inland Revenue in respect of
such schemes and nothing has been done to prejudice the
approved status of any such schemes.
8.14.2. The Disclosure Letter contains full details of any issue of
shares or an interest in shares by the Company in the
circumstances described in section 77 to 89 Finance Xxx 0000
and the Company has complied with section 85 Finance Xxx 0000.
8.14.3. The Disclosure Letter contains a copy of the rules of any
profit related pay schemes which the Company operates or has
operated, or in which its UK employees are or have been
entitled to participate, in any year commencing prior to
Completion, together with copies of any approvals issued by
the Inland Revenue in respect of such schemes, and nothing has
been done to prejudice the approved status of any such schemes
which have at all times been operated in accordance with any
rules governing the scheme and relevant Taxation legislation.
8.15. SECONDARY LIABILITY
8.15.1. No transaction or event has occurred in consequence of which
the Company is or may be held liable for any Taxation or
deprived of reliefs or allowances otherwise available to it or
may be otherwise held liable for any Taxation for which some
other company or person was primarily liable (whether by
reason of any such
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other company being or having been a member of the same group
of companies or otherwise).
8.15.2. The Company is not, nor will it become, liable to pay, or make
reimbursement or indemnity in respect of, any Taxation (or any
amount corresponding to Taxation) in consequence of the
failure by any other person to discharge that Taxation or
amount within any specified period or otherwise, where the
Taxation or amount relates to a profit, income or gain,
transaction, event, omission or circumstances arising,
occurring or deemed to arise or occur (whether wholly or
partly) before Completion.
8.16. INHERITANCE TAX
8.16.1. No shares in or assets of the Company were acquired by it or
(as the case may be) the Vendors in circumstances such that
they continued to be subject to any Inland Revenue charge to
which they were subject immediately prior to such acquisition
or such that, if they had been subject to an Inland Revenue
charge immediately prior to such acquisition, they would have
continued to be subject to it.
8.16.2. No shares in or assets of the Company are subject to any such
power of sale, charge or mortgage as is mentioned in section
212 IHTA and there are no circumstances which might lead to
such a power arising.
8.17. PAYMENTS EQUIVALENT TO TAX
8.17.1. The Company has not in the previous seven years entered into
any indemnity, guarantee or covenant under which the Company
has agreed or can be procured to
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meet or pay a sum equivalent to or by reference to another
person's liability to Taxation.
8.17.2. The Company is not liable nor has any event or omission
occurred in consequence of which the Company could at any time
become liable to make a payment to any person as a result of
the discharge by that person of any liability of the Company
to Taxation incurred on or before Completion.
8.18. LOAN RELATIONSHIPS
8.18.1. the Company has been taxed on an authorized accruals basis in
respect of all loan relationships within the meaning of
Chapter II of Part IV of the Finance Xxx 0000 which are
creditor relationships within the meaning of that Chapter and
in respect of each such relationship no tax would be payable
if the face value of the debt (ignoring any repayment premium)
was repaid.
8.18.2. the Company has obtained relief on an authorized accruals
basis in respect of all loan relationships which are debtor
relationships within the meaning of Chapter II of Part IV of
the Finance Xxx 0000 and in relation to each such relationship
the deduction for which the Company obtains relief is for the
maximum amount obtainable in accordance with that Chapter. In
respect of each such relationship no tax would be payable if
the debt was repaid.
8.18.3. the Company is not within the meaning of Finance Xxx 0000
section 87 connected with any creditor or debtor with respect
to any of its loan relationships.
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8.19. CUSTOMS DUTIES
The Company has complied with all statutory provisions, rules,
regulations, orders and directions and made all necessary
returns in relation to the collection and payment of customs
duties, excise duties and other charges having an equivalent
effect and has provided all necessary information and
documentation and paid all amounts due to HM Customs and
Excise in relation to such charges within the prescribed time
limits.
8.20. WITHDRAWAL OF RELIEFS
No relief which has been treated as an asset in preparing the
Accounts could or might effectively be withdrawn, postponed,
restricted or otherwise lost as a result of the sale and
purchase under this Agreement or any other event or
circumstance occurring or arising at any time after the
Balance Sheet Date.
8.21. TAX ADMINISTRATION
In relation to the Company, the Disclosure Letter gives full
details of:
8.21.1. all determinations made under section 41A TMA;
8.21.2. all directions reducing any amounts so determined pursuant to
section 41B TMA;
8.21.3. all assessments to Taxation made by the Revenue, and any such
determinations under section 41A TMA and directions under
section 41B TMA, which are subject to appeal or have otherwise
not become final at the date of this agreement; and
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8.21.4. all payments of Taxation, and claims for repayment of
Taxation, made in respect of any period for which no
assessment to Taxation has been issued or become final (and
whether pursuant to section 10 Taxes Act or otherwise).
9. CONTRACTS AND COMMITMENTS
9.1. CAPITAL COMMITMENTS
The Company had no capital commitments at the Balance Sheet
Date and since then the Company has not made any capital
expenditure or incurred any capital commitments.
9.2. SUBSISTING CONTRACTS
9.2.1. The Disclosure Letter contains true, complete and accurate
copies (incorporating all the terms which currently apply) of
every contract, covenant, commitment or arrangement of more
than three months duration to which the Company is a party, or
is intending to become a party or may become a party by the
unilateral act of a third party, and in respect of which any
party to them has or may have any liability.
9.2.2. The Disclosure Letter describes in reasonable detail the
outstanding obligations and work to be performed by the
Company under any contract, covenant, commitment or
arrangement to which it is a party, each of which outstanding
obligations and/or work can be fully performed or fulfilled by
the Company in accordance with the terms of such contract,
covenant, commitment or arrangement.
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9.2.3. The Company has not appointed, nor is it intending to appoint,
a party to act as an agent or as a distributor of the Company.
9.3. MORTGAGES ETC.
The Company has not created nor has it agreed to create any
loan capital or any mortgage, debenture, lien, charge or other
similar encumbrance or security interest over all or any of
its property, assets, undertaking, goodwill, reserves or share
capital except pursuant to the Loan Agreement.
9.4. GUARANTEES ETC.
There are no guarantees, suretyships, indemnities or similar
commitments (whether secured or unsecured) given by the
Company in respect of which obligations or liabilities
(whether actual or contingent) are still outstanding.
9.5. NO LOANS
The Company has not made any loans or advanced any monies or
credit to any person, firm or company (other than credit given
on normal commercial terms in the ordinary and normal course
of business).
9.6. NO PARTNERSHIP ETC
The Company is not a member of any partnership, joint venture,
trade association, society or other group, whether formal or
informal and whether or not having a separate legal identity,
nor is any such body relevant to nor does any such body have
any material influence over the business of the Company as now
carried on.
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9.7. INSIDER CONTRACTS
9.7.1. None of the Vendors nor any of their Associates nor any person
in which any of them has or had any interest (direct or
indirect, either solely or jointly with any other party and
whether as shareholder, employee, director, consultant or
otherwise) has (or has ever had) a trading relationship with
the Company nor have any of them ever entered into any other
type of transaction or arrangement with the Company (other
than on the terms of the Memorandum and Articles of
Association of the Company, shareholder agreements and
employment contracts attached to the Disclosure Letter); and
none of them provides (or has in the past provided) goods or
services in competition with the Company.
9.7.2. Without prejudice to the foregoing, the Company has not paid
or provided, and has and will have no liability to pay or
provide, any fees, brokerages, commissions, bonuses, expenses,
payments, benefits or rights to or for the benefit of any
employee, director, consultant, shareholder, or their agents,
advisers or Associates or any other person as a consequence of
or in connection with the sale of the Shares, including
without limitation fees and commissions to Nomura, fees of
legal or other advisers, bonuses or other payments to
employees and payments, benefits or rights pursuant to the
Loan Agreement (save for the payment under the Loan Agreement
pursuant to paragraph 4.2 of the Sixth Schedule of this
agreement) and any prior liability to pay or provide any such
fees, brokerages, commissions, bonuses, expenses, payments,
benefits or rights has been validly cancelled without any
liability on the part of the Company.
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9.8. NON-ARMS LENGTH CONTRACTS
The Company is not a party to, nor have its profits or
financial position during the three years prior to the date
hereof been affected by, any contract or arrangement which is
not of an entirely arms-length nature made on open market
terms.
9.9. DEFAULTS, ETC.
9.9.1. None of the obligations owed by any third party to the Company
is unenforceable by reason of any act or omission by the
Company and so far as the Company is aware no event has
occurred as regards the Company which would entitle any third
party to terminate or vary any contract or benefit enjoyed by
the Company or call in any money before the normal due date
therefor.
9.9.2. Neither the Company nor so far as the Company is aware any
other party to any agreement, commitment, transaction or
arrangement with the Company is in default thereunder and so
far as the Company is aware there are no circumstances caused
or controlled by the Company which will give rise to such a
default.
9.10. LIABILITIES
9.10.1. There are no liabilities (including contingent liabilities)
which are outstanding on the part of the Company other than
those liabilities disclosed in the Accounts or incurred, in
the ordinary and normal course of trading, since the Balance
Sheet Date.
9.10.2. Immediately following Completion there will be no indebtedness
or liability due, owing or incurred by the Company to the
Vendors or any of their Associates whether actually or
contingently, whether solely or jointly with any other person
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and whether as principal or surety and there is no such
indebtedness or liability due, owing or incurred to the
Company by the Vendors or any of their Associates.
9.10.3. There are no outstanding liabilities or commitments on the
Company arising from any arrangements for the disposal of any
shares, property or other assets previously owned by the
Company.
9.11. PAYMENTS TO CREDITORS
There are no debts owing by the Company which are overdue for
payment.
9.12. GOVERNMENT GRANTS
9.12.1. The Company has not applied for, or received, any grant,
subsidy or financial assistance from any government department
or agency or any local or other authority, whether under any
of the Industry Acts, or a regional development grant, or
temporary employment subsidy or otherwise.
9.12.2. The Company has not done (or omitted to do) any act or thing
which could result in any investment grant, employment subsidy
or other similar payment made (or due to be made) to it,
becoming repayable, or being forfeited or withheld in whole or
in part.
9.13. RESTRICTIVE PRACTICES
The Company is not a party to any agreement, practice or
arrangement which contravenes or is subject to registration
under the Restrictive Trade Practices Xxx 0000, the Resale
Prices Xxx 0000 or the Competition Xxx 0000 or which
contravenes the provisions of the Fair Trading Act 1973 or
which would or might either result in a reference to a
"consumer trade practice" within the meaning of
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Section 13 of the Fair Trading Act 1973 or to the Consumer
Protection Advisory Committee under Part II of that Act or
contravene any of the provisions of Article 85 or 86 of the
Treaty of Rome or any other anti-trust or consumer protection
legislation.
9.14. NO DISCLOSURES OF CONFIDENTIAL INFORMATION
The Company has never disclosed to any person (save in the
ordinary and normal course of business and, where relevant, on
adequate confidentiality terms or other than to the Purchaser
or to its professional advisers) any of its secret or
confidential information (including any of its know-how, trade
connections, price lists, lists of customers or suppliers,
financial information, profit margins or projections); and so
far as the Company is aware no unauthorized disclosure of such
information has ever been made.
9.15. NO RESTRICTIONS ON COMPANY
The Company is not a party to any secrecy or confidentiality
agreement or arrangement which may restrict the use or
disclosure of information nor has it given any covenants
limiting or excluding its right to do business and/or compete
in any area or field with any other person.
9.16. RELATIONSHIPS WITH THIRD PARTIES
9.16.1. No person presently doing business with the Company nor any
customer or supplier who is in the habit of purchasing from or
selling to the Company (as the case may be) is, so far as the
Company is aware, likely to cease to do so or
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otherwise substantially reduce its purchases from or supplies
to the Company during the twelve calendar months following
Completion.
9.16.2. The Disclosure Letter specifies the names of suppliers and
customers whose level of business with the Company exceeds 25
per cent of the aggregate amount of all the purchases or 25
per cent of the aggregate amount of all the sales of the
Company in any trading period of 52 weeks together with the
value of business with such suppliers and customers in the
year ended on the Accounts Date.
9.16.3. So far as the Company is aware there is no contract or
arrangement (whether written or oral) to which the Company is
a party which will or may be determined or under which any
right of the Company may be adversely affected (or pursuant to
which any other party may require the adoption of terms less
favourable to the Company than those subsisting in the absence
of any change) by reason of the sale of the Shares to the
Purchaser or the implementation of any provision of this
agreement.
9.16.4. So far as the Company is aware there is no embargo or trade
boycott on the business of the Company or any of its products
or suppliers nor is it reasonably likely that any material
source of supply to the Company or any material outlet for the
sales of the Company or may be put in jeopardy will be or may
be put in jeopardy as a result of the sale of the Shares to
the Purchaser or the implementation of any provision of this
agreement.
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10. PENSIONS
10.1. NO PENSION ARRANGEMENTS
The Company is not under any legal liability or obligation to
provide any relevant benefits (as defined in section 612(1) of
the Taxes Act) or any death or disability benefits not within
that definition for any past or present officer or employee or
their dependants save for contributions to Personal Pension
Schemes (as defined in section 630 of the Taxes Act) to such
current employees and of such amounts as are specified in the
Disclosure Letter.
10.2. NO PENSION ARRANGEMENTS TO BE INTRODUCED
The Company has not given any undertakings or assurances to
its officers, employees or consultants regarding the
introduction of any provision for retirement, death or
disability benefits (whether or not there is any obligation to
do so) or the payment of contributions to Personal Pension
Schemes (whether or not there is any obligation to do so),
save for those contributions to Personal Pension Schemes
referred to in paragraph 10.1 above.
10.3. NO EX GRATIA ARRANGEMENTS
The Company has not granted any ex gratia pension or other
like payment to any of its past or present officers,
employees, consultants or their dependants.
11. OFFICERS AND EMPLOYEES
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11.1. DETAILS
The Disclosure Letter contains an accurate and complete list
of all officers and employees of the Company, showing all
remuneration payable and other benefits provided or which the
Company is bound to provide either now or in the future.
11.2. STATUTORY NOTICES
All appropriate notices have been properly issued under the
Employment Rights Xxx 0000 to all employees (including
directors) of the Company.
11.3. WORKING TIME REGULATIONS
11.3.1. The Company has not received any allegation of non-compliance
in full with its obligations under the Working Time
Regulations 1998 (THE "1998 REGULATIONS") in relation to the
business and, in particular and without limitation, with its
record keeping obligations under Regulations 5(4) and 9 of the
1998 Regulations and the requirements under Regulations 4, 6,
7 and 8 of the 1998 Regulations.
11.3.2. The Disclosure Letter contains true and complete copies of:-
11.3.2.1. all relevant agreements entered into pursuant to the 1998
Regulations (or, if in standard form, a copy of the standard
form) and a list of all workers covered by any such agreement;
and
11.3.2.2. a list of all workers whom the Company regards as falling
within the terms of Regulation 20 or 21 of the 1998
Regulations.
11.4. TERMS OF EMPLOYMENT AND CONSULTANCY
The Disclosure Letter contains true, complete and accurate
copies (incorporating all the terms which currently apply or a
memorandum of such terms) of all service
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agreements, consultancy agreements and letters of engagement
which have been made with any employee or consultant of the
Company and of the standard terms of employment on which any
employee of the Company is now employed together with a note
showing which employees are employed under which type of
standard terms.
11.5. NO BONUS OR COMMISSION ARRANGEMENTS
The Company is not bound or accustomed to make periodical or
other payments (other than normal fixed salaries and wages) to
employees, ex-employees, officers, consultants or others and
no employee, officer or consultant has remuneration on a
profit sharing or commission basis or by reference to the
turnover, profits, sales or assets of the Company.
11.6. INCREASES SINCE BALANCE SHEET DATE
Since the Balance Sheet Date:-
11.6.1. no remuneration or benefit has been paid or given or agreed to
be paid or given to any officer, employee or consultant of the
Company.
11.6.2. no general increase in the wages of the employees of the
Company or any section or class of such employees has been
made or agreed to be made (whether legally binding or not)
either with the employees or their representatives nor has any
negotiation or demand for such increase been entered into by
or made to the Company; and
11.6.3. the Company has not received or been notified of any wage
claim.
11.7. TERMINATION OF EMPLOYMENT
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11.7.1. All contracts of employment between the Company and its
officers or employees are lawfully determinable by the Company
without compensation by notice (not exceeding the relevant
statutory minimum period of notice).
11.7.2. No director or employee of the Company has given or received
notice terminating his employment and no such executive will
be entitled to give such notice as a result of the sale of the
Shares to the Purchaser.
11.7.3. The Company has no known reason to dismiss (nor does it wish
to dismiss) any of its employees.
11.8. CLAIMS BY OR AGAINST EMPLOYEES
11.8.1. The Company is not now, nor will it as a consequence of any
event or omission before Completion be and has not since the
Balance Sheet Date been, engaged in any legal proceedings or
arbitration whether as plaintiff or defendant with any trade
union or any person who is or has at any time been a director
or an employee or consultant of the Company.
11.8.2. Without prejudice to the foregoing paragraph, so far as the
Company is aware no person who is or was a director or
employee or consultant of the Company has any right or made
any claim (which has not yet been settled) to any compensation
or other payment by reason of the termination of his
employment or engagement (whether such termination constitutes
unfair or wrongful dismissal redundancy or otherwise) or any
breach by the Company of his terms of engagement or
employment; so far as the Company is aware there are no
circumstances which will lead to any such claims being made;
and no gratuitous payment has been
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made or promised by the Company in connection with the
termination or proposed termination of employment or
engagement of any past or present director or employee or
consultant.
11.8.3. No order has been or may be made for the reinstatement or
re-engagement of any employee of the Company.
11.9. INDUSTRIAL RELATIONS
There is not and never has been any strike, picket, lock-out,
go-slow, work-to rule or any other form of industrial dispute
taken or threatened against the Company and so far as the
Company is aware there are no facts or circumstances which
might lead to any such industrial dispute.
11.10. TRADE UNION RECOGNITION
No claim has been made by any trade union for recognition or
for any improvement or amendment to the terms or conditions of
employment of any employees of the Company and no claim for
recognition has been referred to the Advisory Conciliation and
Arbitration Service or to the Central Arbitration Committee
nor is any trade union recognised by the Company in respect of
any class of employees for any purpose whatsoever.
12. INSURANCE
12.1. FULL COVER
The Company is and has been at all material times adequately
covered by valid insurance against the normal risks for the
type of business carried on and assets and stock-in-trade
owned or used by it (including adequate insurance for the full
-88-
reinstatement value of such business, assets and
stock-in-trade and against loss of profit) and nothing has
been done or omitted to be done by the Company which could
make any policy of insurance void or voidable.
12.2. DETAILS OF INSURANCE COVER
The Disclosure Letter contains copies of all policies of
insurance maintained by the Company (or which is maintained by
a third party but in which the Company has an interest) and
includes all information which the Purchaser shall reasonably
require in order to assess the liability to pay premiums and
the cover afforded under such policies (including details of
current premiums, excess levels, any unusual terms or
conditions contained in such policies, a history of claims
made by the Company at any time under any insurance policies
and circumstances which have arisen and may give rise to a
claim under such policies).
12.3. PREMIUMS PAID
All premiums payable in respect of any insurance policy in
which the Company has an interest have been duly paid.
12.4. NO OUTSTANDING CLAIMS
There are no claims outstanding by the Company under any
insurance policy nor, so far as the Vendors are aware, are
there any circumstances likely to give rise to any such claim
or which would or might be required under any insurance policy
to be notified to the insurers or which might lead to any
liability under such insurance policies being avoided by the
insurers or the premiums being increased.
12.5. EFFECT OF THIS AGREEMENT
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No cover afforded by any policy of insurance which is
maintained by the Company or which is maintained by a third
party but in which the Company has an interest will terminate
or be terminable at the option of the insurer or any third
party by reason of the completion of this agreement.
13. LITIGATION AND LEGAL PROCEEDINGS
13.1. DEFAULTS BY THE COMPANY
The Company is not and since the Balance Sheet Date has not
been:-
13.1.1. in default under any agreement, deed, instrument, arrangement
or covenant to which it is a party or in default of any other
obligations or restrictions binding upon it;
13.1.2. [intentionally omitted]
13.1.3. [intentionally omitted]
13.1.4. subject to any order or judgement given by any Court or
government agency and has not been party to any undertaking or
assurance given to any Court or governmental agency which is
still in force.
13.2. LEGAL PROCEEDINGS
The Company is not and has not since the Balance Sheet Date
been engaged and, so far as the Company is aware, there are no
circumstances caused or controlled by the Company which will
lead to the Company becoming engaged in any legal proceedings
(civil or criminal) or arbitration as plaintiff, defendant or
otherwise howsoever except as plaintiff in normal debt
collection and in respect of which the aggregate amount of
debts due to the Company does not exceed L500.
-90-
13.3. DISPUTES WITH GOVERNMENT DEPARTMENTS
There is no dispute with any revenue or other government,
local authority, administrative, official department entity or
agency in the United Kingdom or elsewhere, in relation to the
affairs of the Company and so far as the Company is aware
there are no circumstances caused or controlled by the Company
which may give rise to any such dispute.
13.4. PERSONAL INJURY CLAIMS
There are no claims pending or threatened, or so far as the
Company is aware capable of arising against the Company by an
employee or third party in respect of any accident or injury
which are not fully covered by insurance.
13.5. DEMANDS TO PAY
No demand has been served upon the Company under section 123
of the Insolvency Xxx 0000 and the Company has not received
notice (whether formal or informal) from any lenders of money
to the Company requiring repayment or intimating the
enforcement by such lenders of any security which they may
hold over any assets of the Company and so far as the Company
is aware there are no circumstances likely to give rise to any
such notice being given.
13.6. ADVERTISING MATERIALS
So far as the Company is aware, all advertising and marketing
materials used in connection with the Company's business
comply with all legal requirements in all countries in which
these materials are used or proposed to be used, are not
defamatory and so far as the Company is aware there are no
grounds under which
-91-
such materials could be challenged for any reason whatsoever
including, without limitation, defamation, trade libel or any
analogous law.
14. ENVIRONMENTAL MATTERS
The Company has complied with, all legislation (including
regulations, codes of practice, circulars and guidance notes
made thereunder) relating to environmental matters, including
(but without limitation)
14.1. waste;
14.2. contaminated land;
14.3. discharges to (i) land and (ii) ground and surface water and
(iii) sewers;
14.4. emissions to air;
14.5. noise;
14.6. dangerous, hazardous or toxic substances and materials;
14.7. nuisance;
14.8. health and safety;
and the Vendors are not aware of any actions, claims or
proceedings (whether actual or potential) nor has any other
reason to believe that the Vendor has or is likely to have any
liability in relation to such matters.
-92-
FIFTH SCHEDULE
TAX DEED
THIS DEED is made on 2001
BETWEEN:
(1) The persons whose names and addresses are set out in the first
schedule ("COVENANTORS"); and
(2) ACCELRYS INC. a corporation incorporated in the state of
Delaware, United States of America and having its principal
office at 0000 Xxxxxxxx Xxxx, Xxx Xxxxx, 00000-0000 XXX
("PURCHASER").
1. INTRODUCTION
1.1. By an agreement ("AGREEMENT") made on the date hereof between
(1) the Covenantors and others and (2) the Purchaser, the
Purchaser agreed to purchase the Shares (as defined in the
Agreement).
1.2. Clause 5.2.9 of the Agreement provides that the Covenantors
will deliver today a duly executed deed in this form.
2. DEFINITIONS AND INTERPRETATION
2.1. In this deed expressions defined in the Agreement shall bear
the same meanings unless the context otherwise requires or
unless they are expressly given different meanings.
2.2. In this deed unless the context otherwise requires:-
"CLAIM" means any notice, demand, assessment, letter or other
document issued, or action taken, by or on behalf of the
Revenue or any other governmental or statutory authority, body
or official, whether of the United Kingdom or elsewhere,
whereby the Company is or may be placed under a liability to
Taxation;
-93-
"EVENT" includes any act, omission, transaction or
circumstance, including (without limitation) any change in the
residence of, or the death of, any person, the execution of
the Agreement and Completion;
"RELIEF" includes any loss, allowance, exemption, set-off,
credit or deduction relevant to the computation of any
Taxation or any right to repayment of Taxation.
2.3. A liability to Taxation which results from the loss,
reduction, modification, nullification or cancellation of any
Relief, or for which the Company would have been liable but
for the utilisation or set-off of any Relief, shall for the
purposes of this deed be deemed to be a liability equal to the
amount (as appropriate) of:
2.3.1. Taxation which use of the relevant Relief would have saved
(assuming Taxation to be otherwise payable); or
2.3.2. the repayment of Taxation to which the Company would otherwise
have been entitled.
2.4. The covenants contained in this deed apply where the liability
in question arises as a result of one or more Events or the
combined effect of more than one Event, where one such Event
occurred on or before Completion or partly before and partly
on or after Completion.
2.5. The covenants contained in this deed shall be construed as
separate and independent and none of them shall be affected or
restricted by any other except to the extent that any payment
made by the Covenantors and received by the Purchaser in
respect of one covenant shall discharge the same liability
under the other covenants which shall arise out of the same
subject matter.
-94-
3. COVENANTS
3.1. The Covenantors jointly and severally covenant with the
Purchaser to pay to the Purchaser an amount equal to:-
3.1.1. any liability to Taxation of the Company in respect of, by
reference to or in consequence of any income, profits or gains
earned, accrued or received or deemed to have been or treated
as or regarded as earned, accrued or received on or before
Completion;
3.1.2. any liability to Taxation of the Company in respect of, by
reference to or in consequence of any Event which occurred or
is deemed to have occurred on or before Completion;
3.1.3. any liability to Taxation of the Company for which it is not
primarily liable in respect of, by reference to or in
consequence of any Event which occurred or is deemed to have
occurred on or before Completion;
3.1.4. any liability to Taxation of the Company which is also a
liability to Taxation of another person and which is payable
by the Company by virtue of the other person failing to
discharge such liability to Taxation and of the Company being
at any time prior to Completion a member of the same group as
any other person or otherwise connected with or related to
such other person for Taxation purposes;
3.1.5. any Taxation for which the Company would have become liable
pursuant to clauses 3.1.1 to 3.1.4 (inclusive) but for the
utilisation or set off of some Relief;
-95-
3.1.6. the loss, reduction, modification, nullification or
cancellation of some Relief occurring on or before Completion
where such Relief would otherwise be available to the Company
(disregarding for this purpose any other Relief);
3.1.7. any Taxation arising in respect of or in connection with any
amounts paid or payable pursuant to or otherwise in connection
with this deed; and
3.1.8. all costs and expenses incurred by the Purchaser in enforcing
the provisions of this deed.
3.2. [What is title for 3.2?)
3.2.1. All sums payable by the Covenantors under the covenants
contained in this deed shall be paid free and clear of all
deductions or withholdings or rights of counterclaim or
set-off unless the deduction or withholding is required by
law.
3.2.2. If the Covenantors are required by law to make any deduction
or withholding from any payment under this deed, the sum due
from the Covenantors in respect of such payment shall be
increased to the extent necessary to ensure that after the
making of such deduction or withholding the Purchaser receives
and retains a net sum equal to the sum it would have received
had no deduction or withholding been required to be made.
4. EXCLUSIONS
4.1. The covenants in clause 3.1 shall not apply to any liability
to Taxation to the extent that:-
4.2. a specific provision or reserve in respect of it was made in
the list of Liabilities on Appendix 5 of the Agreement; or
-96-
4.3. it arises only as a consequence of any retrospective change in
the law enacted after Completion; or
4.4. such liability is specifically disclosed as a liability to
Taxation in section 8 of the Schedule to the Disclosure
Letter; or
4.5. such liability is for Taxation which has arisen in the
ordinary course of business of the Company since the Balance
Sheet Date.
5. WAIVER
No delay or omission of the Purchaser in exercising any rights
under this deed shall prejudice such rights or be construed as
a waiver or partial waiver of such rights, nor shall it
exclude the further exercise of such rights.
6. PAYMENT
6.1. The Covenantors shall pay any amounts due under this deed in
sterling in cleared funds:
6.1.1. not less than five business days prior to the date on which
the Taxation in question is payable to the authority or
official or person demanding it; or
6.1.2. (where a liability to Taxation relates to the loss,
nullification or cancellation of a right to a repayment of
Taxation) not less than five business days prior to the date
when the Company would have been entitled to receive a
repayment of Taxation were it not for its loss, nullification
or cancellation; or
6.1.3. (in respect of any other amounts due under this deed including
the loss or use of any Relief) within five business days after
the Purchaser shall make a demand for such amounts.
-97-
6.2. Any sums not paid by the Covenantors on the due date for
payment as specified in this clause shall bear interest (which
shall accrue from day to day after as well as before any
judgment for the same) at the annual rate of 4 percentage
points above the base rate of Barclays Bank plc from time to
time from the due date up to and including the day of actual
payment of such sums, such interest to be compounded quarterly
and paid by the Covenantors on demand by the Purchaser.
7. TAX COMPLIANCE
The Covenantors and their duly authorized agents shall give
the Purchaser or its duly authorized agents such information
and assistance as they may reasonably require to prepare,
agree and submit to the relevant Tax authority all tax returns
and computations for accounting periods in relation to
corporation tax of the Company beginning before Completion and
in relation to any other Taxation, any period beginning prior
to Completion in respect of which the Company is required to
make a return or a payment to a Tax authority.
8. NOTICES
The provisions of clause 15 of the Agreement shall apply
equally to this deed.
9. LAW
9.1. This agreement shall be governed by English Law and the
parties irrevocably submit to the non-exclusive jurisdiction
of the English Courts.
9.2. The Covenantors irrevocably nominate and instruct the
Warrantors' Solicitors to receive service of any notice or
proceedings required to be served upon or given to them or any
of them pursuant to this agreement.
-98-
FIRST SCHEDULE
THE COVENANTORS
Xxxxxx Xxxxx
Xxxxx Xxxxxx
-99-
SIGNED AS A DEED by )
XXXXXX XXXXX )
in the presence of:- )
SIGNED AS A DEED by )
XXXXX XXXXXX )
in the presence of:- )
EXECUTED AS A DEED by )
ACCELRYS INC. )
acting by )
)
and )
Director:
Director/Secretary:
-100-
SIXTH SCHEDULE
CALCULATION AND PAYMENT OF CONSIDERATION
1. DEFINITIONS
For the purposes of this schedule unless the context otherwise
requires:
"HEADLINE CONSIDERATION" means the sum of US$3,500,000;
"LIABILITIES" means the sum of L435,000 in respect of the
agreed net liabilities at Completion of the Company, as listed
on Appendix 5, other than the Lender Liability;
"LENDER LIABILITY" means the aggregate of the sum of
L1,067,000, being the amount owing by the Company at
Completion to the Lenders pursuant to the Loan Agreement, plus
the sum of L612,440 being that part of the Redemption Payment
to be paid to the Lenders under paragraph 4.2 below after
taking into account the release of the remaining part of the
liability of the Company for the Redemption Payment pursuant
to paragraph 3 below;
"NET SHARE CONSIDERATION" means the total amount payable to
holders of shares in the Company as specified in paragraphs
2.1 and 2.2 below.
"REDEMPTION PAYMENT" has the meaning given to that expression
in the Loan Agreement;
"VENDOR EXPENSES" means the fees and expenses of the
Warrantors' Solicitors (L60,000 plus VAT), the Lenders'
Solicitors (L10,000 plus VAT) and fees payable to Nomura
(US$225,000).
-101-
2. THE MAXIMUM TOTAL CONSIDERATION PAYABLE BY THE PURCHASER FOR
THE SHARES SHALL BE THE HEADLINE CONSIDERATION LESS THE VENDOR
EXPENSES, THE LIABILITIES, THE LENDER LIABILITY AND THE
PREMIUM FOR THE INSURANCE REFERRED TO BELOW. FOR THE PURPOSES
OF THIS AGREEMENT THE US$ DENOMINATION OF THE HEADLINE
CONSIDERATION (AFTER DEDUCTION FOR PAYMENT OF THE INSURANCE
PREMIUM REFERRED TO BELOW AND THE FEE OF NOMURA REFERRED TO
ABOVE) IS CONVERTED INTO STERLING AT AN EXCHANGE RATE OF US
$1.4060 RESULTING IN A STERLING HEADLINE CONSIDERATION OF
L2,198,613. THE FULL AMOUNT OF THE REDEMPTION PAYMENT RESULTS
IN ALL OF THE LIABILITIES OF THE COMPANY EXCEEDING THE
HEADLINE CONSIDERATION. THE LENDERS AGREE TO WAIVE ANY RIGHT
TO PAYMENT OF L3,012,560 OF THE REDEMPTION PAYMENT, SO THAT
(a) THE NET SHARE CONSIDERATION CAN BE PAID OUT OF THE
HEADLINE CONSIDERATION AND (b) THE LIABILITIES, THE VENDOR
EXPENSES AND THE PREMIUM FOR THE INSURANCE CAN BE DEDUCTED
FROM THE HEADLINE CONSIDERATION. ACCORDINGLY, THE HEADLINE
CONSIDERATION SHALL BE APPLIED AS FOLLOWS:-
2.1. First, in payment of US $183,750 for the premium for the
Insurance and insurance premium tax thereon
2.2. Second, as to a total aggregate amount of L1,923, in paying to
each shareholder the sum of L0.0001 for each share in the
Company held by them;
2.3. Third, as to a total aggregate amount of L435,000 by way of
deduction from the Headline Consideration of the Liabilities,
other than the Lender Liability;
2.4. Fourth, as to payment of the Vendor Expenses;
-102-
2.5. Fifth, as to a total aggregate amount of L1,679,440 by way of
payment on behalf of the Company to the Lenders of the Lender
Liability (such amount being a loan from the Purchaser to the
Company the proceeds of which the Company has directed the
Purchaser to pay to the Lenders on its behalf), resulting in a
balance of L3,012,560 of the total amount of the Redemption
Payment to be released by the Lender under paragraph 3 below.
Accordingly all the Vendors acknowledge that they shall not
receive or be entitled to receive any consideration for their
shares save for the amounts referred to in paragraph 2.1
above.
3. THE LENDERS HEREBY AGREE WITH THE PURCHASER, FOR ITSELF AND AS
TRUSTEE FOR THE COMPANY, THAT, AFTER PAYMENT TO THEM OF THAT
PART OF THE REDEMPTION PAYMENT SPECIFIED IN PARAGRAPH 4.2
BELOW, THEY UNCONDITIONALLY AND IRREVOCABLY RELEASE THE
COMPANY FROM ANY FURTHER LIABILITY TO PAY THE REDEMPTION
PAYMENT PURSUANT TO THE LOAN AGREEMENT.
4. IN PURSUANCE OF THE ABOVE:-
4.1. at Completion the Purchaser shall pay the total amount of the
Net Share Consideration less L147.67], being that amount of
the Net Share Consideration payable to shareholders of the
Company who have not signed this agreement on the date hereof,
to the Warrantors Solicitors as agents for the Vendors
entitled to receive the same, and the Purchaser shall not be
concerned or liable to or for the payment thereof by the
Warrantors Solicitors to the Vendors entitled thereto; and
-103-
4.2. at Completion the Purchaser shall pay to the Lenders
Solicitors (on behalf of the Company in the case of items (a)
and (b)) the total sum of L1,761,690 (being the aggregate of
(a) L1,067,000, being all monies borrowed by the Company from
the Lenders and (b) L612,440, being that part of the
Redemption Payment to be paid to the Lenders hereunder and (c)
the Vendor Expenses other than the Nomura fee) plus the sum of
US$225,000 in respect of the Nomura fee. The Lenders agree
with the Purchaser, for itself and as trustee for the Company,
that payment of the Lender Liability to the Lender's
Solicitors shall be in full and final settlement of any and
all liabilities of the Company to the Lenders pursuant to the
Loan Agreement (including without limitation principal,
interest and the Redemption Payment, as that expression is
defined in the Loan Agreement) or otherwise. The Vendors agree
that the Lenders Solicitors shall receive the Vendor Expenses
on their behalf.
-104-
SEVENTH SCHEDULE
OPTION HOLDERS
NAME
Xxxxx Xxxxxxx
Jeroen Coppieters
Xxxxx Xxxxxxxx
Xxxxxx Xxxxxx-Xxxxx
Xxxxxx Xxxxx
Xxxxx Xxxxxx
Xxx Xxxxxx
Xxxxx Xxxxxx
Xxxx Xxxxxxx
Xxxx Xxxxxxxxx
Xxxxxx Xxxxxxx
Xxxxxxx Xxxxxx
Xxxxx Xxxxx
Xxx Xxxxxxx
Xxxxx Xxxxx
Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxx
Xxxx Xxxxx
Xxxx Blue
Xxxxx Xxxxx
Xxxxxxx Xxxxxxxxxx
Xxx Xxxxxxxx
Xxxx Xxxxxx
Xxxxxxx Xxxxx
-105-
Xxx Xxxxxx
Xxxxxx Xxxxxx
Xxxxx Xxxxx
Xxxxxxx van Dam
Xxx Xxxxxxx
-106-
EIGHTH SCHEDULE
OPTION HOLDER DEED OF WAIVER
DATED 2001
(1) SYNOMICS LIMITED
(2) [OPTION HOLDER NAME]
----------------------------
DEED OF WAIVER
----------------------------
[GRAPHIC OMITTED]
0 Xxxxxxxxx' Xxx,
Xxxxxx, XX0X 0XX.
Ref: C426/310579
Date: 3 May 2001
Doc No. 1990503
-107-
Exhibit 2
THIS DEED is made the day of June 2001
BETWEEN:-
(1) SYNOMICS LIMITED, a company registered in England under number
3403550 (the "COMPANY") the registered office of which is
situate at Xxxxxxx Xxxxx, Xxxxxxx Xxx, Xxxxxx, Xxxxxxxxx XX0
0XX; and
(2) [OPTION HOLDER], of [address] , (the "OPTION HOLDER").
RECITALS
Whereas:-
1. the Option Holder is the holder of options over ordinary
shares in the Company (the "OPTIONS") under the Rules of
Synomics Limited Unapproved Share Option Scheme (the "SCHEME
RULES"); and
2. the shareholders in the Company intend to enter into an
agreement for the sale of their entire shareholdings in the
Company to Molecular Simulations Inc (the "PURCHASER") and the
sale and purchase of the shares is contingent upon the waiver
of all Options;
IT IS HEREBY AGREED AND DECLARED BY THE OPTION HOLDER as follows:-
1. neither the Purchaser nor the Company has made any
representations, warranties or statements or offered any
consideration or other inducements to the Option Holder to
waive, or in relation to the waiver of, the Options;
2. the Option Holder has been provided with adequate opportunity
to request all relevant information from the Company with
regard to the waiver of the Options, and such information as
has been requested by the Option Holder has been
expeditiously provided to the Option Holder by the Company,
and the Option Holder has had adequate opportunity to seek
independent legal, financial and other advice in respect of
the consequences of the waiver of the Options;
3. the Option Holder hereby irrevocably and unconditionally
waives and releases any and all rights under or in relation to
the Options to acquire shares in the Company or otherwise,
including, but not limited to, any rights which might arise
pursuant to rule 9.1 of the Scheme Rules; and
4. neither the Option Holder nor any trustee or personal
representative of the Option Holder, has any claim or right of
action against the Company or the Purchaser arising in
relation to the Options, this Deed or otherwise, and that
neither the Company nor the Purchaser is in any way obligated
or indebted to the Option Holder or any trustee or personal
representative of the Option Holder in respect of the waiver
of the Options.
SIGNED and DELIVERED as a deed )
for and on behalf of )
SYNOMICS LIMITED ) .....................
in the presence of:- )
Witness Name:
Witness Signature
SIGNED and DELIVERED as a deed )
by [OPTION HOLDER] ) .....................
in the presence of:- )
Witness Name:
Witness Signature:
-2-
Exhibit 2
NINTH SCHEDULE
SYNOMICS SOFTWARE
The Company does not own any patents relating to its software. The Company's IPR
consists of the know-how, object models, source code, libraries, documentation
and training materials produced and owned by the Company since inception related
to the following products and customer projects:
PRODUCTS
Alliance Architecture
The Alliance Architecture is the underlying technology supporting all of the
Company's software developments. The key components are:
- the Data Access Layer (DAL);
- Process Access Layer (PAL);
- Distributed Services including - Trader and Process
Broker.
The full IPR includes:
- Domain Object Models
- Interfaces
- Metadata.
PROJECT EXPLORER
A product developed by the Company to support project team working and report
generation. The key components are:
- Project Database
- Project Explorer Graphical Interface
- Report Generator
- JSP Interface
Models of domains relating to:
- People
- Projects
- Annotations
- Reports
LEAD EXPLORER
A product developed by the Company to provide a portal on key information
required by scientists in Lead Optimisation. The key components are:
- the Flexible Table View - supporting sorting,
masking, filtering and drill down to
underlying data
- Information Alerting
- Query Management
Models of domains relating to:
- Chemistry
- Assay
- Patents
- Literature.
CUSTOMER PROJECTS
BIO-BENCH - Biological Assay Workbench
Key components as per Lead Explorer but in addition:
- Query Wizard
- Project Team Working.
Models of domains relating to:
- Assay
- Chemistry
- People
- Projects
SCAPA - Target Identification Workbench
Key components are:
- Maps
- Markers
- Numerical Plot
- Integrated Viewer.
-2-
Models of domains relating to:
- Chromosome maps and markers
- Patients Genotype Studies
- People
- Projects.
BOWMORE - Competitor Intelligence Portal
- Key component:
- Document Query Interface.
Domain model:
- Literature
SPRINGBANK - Genomics
Key components are:
- Sequence Manipulation Interfaces
- Process Dialogs
Domain model:
- Genomics
-3-
Exhibit 2
TENTH SCHEDULE
THIRD PARTY SOFTWARE
Vendor Product Platorm Version
Accelrys Chemistry activeX component Win32 (Y)
Accelrys RS(3) Solaris (Y)
ACDLabs Ilab Win32 Eval.
ActiveState ActivePython Win32 2.1 [INFINITY]
Adobe Acrobat Reader Win32 4.0 [INFINITY]
Adobe Acrobat Reader/Writer Win32 4.0
Adobe FrameMaker Win32 5.5.6
Adobe FrameMaker - XXXX Xxx00 6.0a
Adobe Illustrator Win32 8.0
Adobe Photoshop Win32 6.0
Apache Software Ant Win32 2.0 Free
Apache Software HTTP server Win32 Free
Apache Software Log4J Win32 1.1.1 Free
Apache Software Tomcat Win32 3.2.1, 4.0 Free
BEA Weblogic (Development) Win32 5.1
BEA Weblogic (Enterprise) Win32
BEA Weblogic (Demo Development) Xxx00
Xxxxxxx Xxxxxx Xxx00
Borland Jbuilder Win32
CA XXXxx Xxx00 3.5.2
CambridgeSoft ChemOffice Win32 Eval.
Check Point FireWall-1/VPN - 1 Win32 4.01a
Check Point FireWall-1 - SecuRemote Win32 4.01a
Cloud Cloud Win32 2.0
Compaq Tru64 Tru64 4.0F [INFINITY]
Convera RetrievalWare Win32 6.6 - 6.8 (Y)
Corel CorelDraw Win32 8.0
Corel CorelDraw Win32 9.0
Cygwin Cygwin Win32 1.3.2 Free
Xxxx Xxxx NFS MacOS
Embarcadero ER Studio Win32 4.2
GNU Software Emacs Win32 Free
Hummingbird Exceed for NT Win32 7.0
Hyperionics Hypercam Win32 1.40
IBM Lotus Notes Win32 4.6
Inprise Visibroker for Java Win/Unix 3.3
Iomega Iomega Tools Win32
Jasc Paint Shop Pro Win32 5.01
JBoss Group jBoss Win/Unix 2.0 - 2.2 Free
JEdit Jedit Win32 3.1 Free
JGsoft EditPad Classic Win32 3.5.3 Free
XXxxx.xxx Junit Win32 3.6 Free
Sitraka Jprobe Enterprise Edition Win32 2.8
Sitraka Jprobe Enterprise Edition Solaris 2.8
Linar Jintegra Win32 1.3
McAfee VirusScan 98 Win32
McAfee NetShield Win32 3.1.4a
MacroMedia DreamWeaver Studio Win32 3.0
MacroMedia DreamWeaver Studio Win32 4.0 - U/G
MDL IsisDraw Win32
Microsoft Internet Explorer Win32 4.0/5.0 Free
Microsoft Office SBE Win32 2000
Microsoft Office Pro U/G Win32 2000
Microsoft Outlook Express Win32 Free
Microsoft Project Win32 98
Microsoft Visual C++ Win32 5.0
Microsoft Visual J++ Win32 6.0
Microsoft Visual SourceSafe Win32 5.0
Microsoft Visual SourceSafe Win32 6.0
Microsoft Visual Basic Win32 6.0
Microsoft Visual SourceSafe Server Win32 6.0
Microsoft Windows Win32 95
Microsoft Windows Win32 98
Microsoft Windows Win32 Me
Microsoft Windows NT W/S Win32 4.0
Microsoft Windows NT (CAL) Win32 4.0
Microsoft Windows NT Server Win32 4.0
Netscape Communicator Pro Win32 4.07
Netscape Directory Server Win32 4.2 Eval.
Netscape SuiteSpot Win32 3.5
Network Associates PGP Win32 6.0
Xxxx Xxx Computing Winzip Win32 8.0
Norton For Your Eyes Only Win32 4.1
Norton Personal Firewall 2000 Win32 2.0
OpenSTA OpenSTA Win32 1.0 Free
Oracle RDBMS Win/Unix 7.*/8.* [INFINITY]
PowerQuest DriveImage Win32 4.0
PowerQuest Partition Magic Win32 5.0
Qualcomm Eudora Win32
Rational Analyst Studio (nodelocked) Win32 2001
Rational Rose Modeller (nodelocked) Win32 2001
Rational Rose Enterprise (floating) Win32 2001
Rational Test Studio (floating) Win32 2001
Seagate Backup Exec Win32 7.2
SmartLogik k-working Xxx00 Xx hold
Sun MicroSystems Forte - For Java/Netbeans Win/Unix 3.2 Free
Sun MicroSystems JAF Win/Unix 1.0 Free
Sun MicroSystems Java Help Win/Unix 1.1.1 Free
Sun MicroSystems JAXP Win/Unix 1.1 Free
Sun MicroSystems WebStart Win32 1.0.1 Free
Sunsoft Collections Win/Unix 1.1 Free
Sunsoft EJB Win/Unix Free
Sunsoft Infobus Win/Unix 1.1.1 Free
Sunsoft Java 3D Win/Unix 1.1 Free
Sunsoft JDK Win/Unix 1.1.7 Free
Sunsoft JDK Win/Unix 1.1.7A Free
-2-
Sunsoft JDK Win/Unix 1.2rc1 Free
Sunsoft JDK Win/Unix 1.3 Free
Sunsoft JTS Win/Unix Free
Sunsoft Swing Win/Unix 1.1 Free
Sunsoft Swing Win/Unix 1.1beta3 Free
Symantec Visual Cafe XXX Xxx00 3.0a
TextPad TextPad Win32 4.4.2
Together Solo Win32 3.0a
Together Enterprise Win32 3.0a
Visio Corporation Visio (Standard) Win32 2000
Visio Corporation Visio (Enterprise) Win32 5.0
Veritas Backup Exec WIN32 8.5
Veritas Backup Exec (Exchange Module) WIN32 8.5
Veritas Backup Exec (Remote agent NT) WIN32 8.5
Netscape Netscape Communicator WIN32 4.7 Free
Sun MicroSystems Solaris 7.0 Solaris [INFINITY]
Sun MicroSystems Solaris 8.0 Solaris [INFINITY]
WebGain Metamata Audit Xxxxxxxxxx Xxxx 0
XxxXxxx Xxxxxxxx Debugger Java 2
WebGain Metamata Metrics Java 2
Wildcrest Print component Win32 Eval.
Xxxx Xxxx Xxx00 2.3.0
NB: Synomics systems are not dependent on the above software. Synomics
has not supplied third parties with any of the above software
products.
Key:
Unlimited user licenses
Free Free to use software
(Y) Software development and/or demonstration license through
collaboration agreement or similar
Eval. Evaluation license
On Hold No longer used pending outcome of sale process.
Eval. Evaluation license
On Hold No longer used pending outcome of sale process.
MISCELLANEOUS:
Synomics has an agreement to use the software from the following companies but
has not done so at this time:
-3-
Daylight Synomics has an option to use the Chemistry cartridge for
development purposes for a period of six months
Nugenesis Synomics has an agreement to use the next version of the
software but so far has not received it
Synomics has also received bibliographic content for demo purposes from Derwent
and other out-of-date Medline content from Smart Logik.
-4-
Exhibit 2
ELEVENTH SCHEDULE
WARRANTORS PROTECTIONS
1. THRESHOLD AND INSURANCE
1.1. The Warrantors shall have no liability in respect of any
claims in respect of the Warranties or claims under the Tax
Deed unless the aggregate liability of the Warrantors in
respect of all such claims shall exceed US $70,000, whereupon
the Warrantors shall be liable to pay the Purchaser only the
amount of such claims in excess of US $70,000. For the
avoidance of doubt this paragraph shall be the "excess
provision" for the purposes of paragraph 3 of the policy of
Insurance under the heading "Limits of Cover".
1.2. The Warrantors shall not be liable to the Purchaser in respect
of the Warranties or under the Tax Deed in relation to any
claim arising:
1.2.1. from any scheme for the avoidance or reduction of any payment
of taxation consisting of a series of prearranged steps some
of which have no commercial purpose other than the avoidance
or deferment of taxation;
1.2.2. out of the failure to collect at or after the date hereof any
debts due to the Company;
1.2.3. from inadequacy of pension funding;
1.2.4. by reason of absence or inadequacy of any premises related
insurance cover or absence or inadequacy of errors and
omissions insurance cover relating to the activities of the
Company prior to 22 September 2000;
1.2.5. from defect or inadequacy in any goods or services sold,
supplied or leased by the Company;
1.2.6. out of actual of perceived seepage, pollution or contamination
of any kind;
1.2.7. from any warranty that a state of affairs or fact will not
exist at a date or time after the date hereof;
1.2.8. from loss or destruction of damage to any property whatsoever
or any loss or expense whatsoever resulting or arising
therefrom or any consequential loss any legal liability of
whatsoever nature directly or indirectly caused by or
contributed to by or arising from ionising radiations or
contamination by radioactivity from any nuclear fuel or from
any nuclear waste from the combustion of nuclear fuel the
radioactive, toxic, explosive or other hazardous properties of
any explosive nuclear assembly or nuclear component thereof.
2. LIMITS ON CLAIMS
2.1. The Warrantors shall have no liability for a claim (as defined
in clause 9):-
2.2. if and to the extent that provision, reserve or allowance in
respect of the matter to which the liability relates shall has
been expressly and specifically made in the Accounts and, in
relation to a matter still subsisting at the Management
Accounts Date, the Management Accounts or, in the case of a
matter giving rise to a Liability, shall be made in the
Completion Accounts;
2.3. to the extent that such claim or liability arises or that the
amount thereof is increased as a result of any change in the
basis, rate or method of calculation of or in relation to
taxation (and whether or not retrospective) or any change in
or in the
-2-
interpretation of any legislation decision or regulation
relating to taxation first announced and coming into
force after the date hereof;
2.4. as regards any claim to the extent that such claim or
liability arises or that the amount thereof is increased as a
result of any change after the date hereof in the accounting
reference date or in any of the accounting policies, bases or
practices of the Company, save any such changes required to
comply with law or generally accepted UK accounting practices,
principles and accounting standards;
2.5. in respect of any claim which is contingent only, unless and
until such contingent liability becomes an actual liability
and is due;
2.6. to the extent that the amount by which any Taxation for which
the Purchaser or the Company is now or in the future
accountable or liable to be assessed is reduced or
extinguished as a result of the matter giving rise to such
claim;
2.7. to the extent that a breach of this Agreement also gives rise
to a claim under the Tax Deed and the Warrantors have
satisfied such claim or vice versa;
2.8. in respect of a claim relating to Taxation unless and until
the Company has become finally liable to pay the Taxation the
subject of the claim in question which date shall be deemed to
be five (5) business days prior to the last date on which the
Company or the Purchaser is (or would save as aforesaid be)
able to pay such Taxation without incurring any interest
charge or penalty.
-3-
3. EFFECT OF PAYMENT
The amount of any payment made by the Warrantors to the
Purchaser in respect of any claim shall be deemed a reduction
pound for pound in the consideration payable to the Vendors
under this Agreement.
4. MITIGATION BY THE PURCHASER
Nothing in this agreement shall affect any duty of the
Purchaser at common law to mitigate any loss which it may
suffer in consequence of a breach of this agreement.
5. THIRD PARTY RECOVERY
The Purchaser shall do all such things reasonably necessary
and within its control to enable compliance by the Warrantors
with the terms of paragraph 8 under the heading "Terms and
Conditions of Cover" of the policy of Insurance
EXECUTED AND DELIVERED AS A DEED by ) /s/ Xxxxxx Xxxxx
XXXXXX XXXX XXXXX ) .............................
in the presence of: )
Xxx Xxxxxx
EXECUTED AND DELIVERED AS A DEED by ) /s/ Xxxxx Xxxxxxx
XXXXX XXXXXXX ) .............................
in the presence of: )
Xxxxxxx Xxxxxxx
EXECUTED AND DELIVERED AS A DEED by ) /s/ Xxxxx Xxxxxxxxx
XXXXX XXXXXX XXXXXXXXX ) .............................
in the presence of: )
Xxxxx Xxxxxxxxx
EXECUTED AND DELIVERED AS A DEED by )
ANDRIES VAN DAM ) .............................
in the presence of: )
EXECUTED AND DELIVERED AS A DEED by )
XXXXXX XXXXXXX ) .............................
in the presence of: )
-4-
EXECUTED AND DELIVERED AS A DEED by ) /s/ Xxxxx Xxxxx
JAFCO CO., LTD. ) .............................
in the presence of: )
Xxxxx Xxxxxx
EXECUTED AND DELIVERED AS A DEED by )
JAFCO JS-3 INVESTMENT ENTERPRISE ) /s/ Xxxxx Xxxxx
PARTNERSHIP ) .............................
in the presence of:
Xxxxx Xxxxxx
EXECUTED AND DELIVERED AS A DEED by )
JAFCO G-6(A) INVESTMENT )
ENTERPRISE PARTNERSHIP ) /s/ Xxxxx Xxxxx
in the presence of: ) .............................
Xxxxx Xxxxxx
EXECUTED AND DELIVERED AS A DEED by )
JAFCO G-6 (B) INVESTMENT )
ENTERPRISE PARTNERSHIP ) /s/ Xxxxx Xxxxx
in the presence of: ) .............................
Xxxxx Xxxxxx
EXECUTED AND DELIVERED AS A DEED by )
JAFCO G-7 (A)PARTNERSHIP )
ENTERPRISE PARTNERSHIP ) /s/ Xxxxx Xxxxx
in the presence of: ) .............................
Xxxxx Xxxxxx
EXECUTED AND DELIVERED AS A DEED by )
JAFCO G-7 (B) PARTNERSHIP )
ENTERPRISE PARTNERSHIP ) /s/ Xxxxx Xxxxx
in the presence of: ) .............................
Xxxxx Xxxxxx
-5-
EXECUTED AND DELIVERED AS A DEED )
on behalf of )
TVM TECHNO VENTURE )
MANAGEMENT III GMBH & CO. )
BETEILINGUNG KG ) /s/ Xx. Xxxxxx Xxxxxxxxx
in the presence of: ) .............................
) (Director)
/s/ Xxxxx Xxxxxx
.............................
(Director)
EXECUTED AND DELIVERED AS A DEED by )
3I GROUP PLC ACTING BY ITS DULY AUTHORISED )
ATTORNEY in the presence of: ) /s/ Xxxxxx Xxxxxx
Xxxxxx Xxxxxx .............................
EXECUTED AND DELIVERED AS A DEED by )
3i BIOSCIENCE INVESTMENT )
TRUST PLC )
ACTING BY ITS DULY AUTHORISED ATTORNEY ) /s/ Xxxxxx Xxxxxx
in the presence of: ) .............................
Xxxxxx Xxxxxx
EXECUTED AND DELIVERED AS A DEED )
and duly authorised by ) /s/ Xxxxxx Xxxxxx
INCYTE GENOMICS, INC. )
in the presence of: ) /s/ Xxxx X. Xxxx
.............................
EXECUTED AND DELIVERED AS A DEED by )
XXXXXX XXXX XXXXXX ) /s/ Xxxxxx Xxxxxx
in the presence of: ) .............................
Xxx Xxxxxx
EXECUTED AND DELIVERED AS A DEED by )
ZIGGUS HOLDINGS LIMITED ) /s/ X X Xxxxxx
) .............................
) Director
)
) /s/ X X Xxxxx
) .............................
acting by: ) Director/Secretary
-6-
EXECUTED AND DELIVERED AS A DEED by )
DR. XXXXXXXXXXX XXXXX )
in the presence of: ) .............................
EXECUTED AND DELIVERED AS A DEED by )
XX. XXXXXX XXXXXX )
in the presence of: ) .............................
EXECUTED AND DELIVERED AS A DEED by )
XXXXXX XXXXX )
in the presence of: ) .............................
EXECUTED AND DELIVERED AS A DEED by )
XXXXX XXXXXX XXXXXX )
in the presence of: ) .............................
EXECUTED AND DELIVERED AS A DEED by )
XXXX XXXXX )
in the presence of: ) .............................
EXECUTED AND DELIVERED AS A DEED by )
XXXXXXX XXXXX XXXXXXX )
in the presence of: ) .............................
EXECUTED AND DELIVERED AS A DEED by )
XXXXXX XXXXXXXXXX )
in the presence of: ) .............................
EXECUTED AND DELIVERED AS A DEED by )
XXXXXX XXXXXX )
in the presence of: ) .............................
-7-
EXECUTED AND DELIVERED AS A DEED by )
XXXXXX XXXXXXX HUMPHRIS )
in the presence of: ) .............................
EXECUTED AND DELIVERED AS A DEED by )
XXXXX XXXX )
in the presence of: ) .............................
EXECUTED AND DELIVERED AS A DEED by )
XXXX XXXXXXXXXXX XXXXXXXX )
in the presence of: ) .............................
EXECUTED AND DELIVERED AS A DEED by )
DR. XXXXXXXXXXX XXXXX )
in the presence of: ) .............................
EXECUTED AND DELIVERED AS A DEED by )
XXXXXXX XXXXXX-XXXXX )
in the presence of: ) .............................
EXECUTED AND DELIVERED AS A DEED by )
XXXXXXX XXXX XXXXXX )
in the presence of: ) .............................
EXECUTED AND DELIVERED AS A DEED by )
XXXXX XXXXXXXX )
in the presence of: ) .............................
EXECUTED AND DELIVERED AS A DEED by )
XXXXXX XXXXX XXXXXXXX )
in the presence of: ) .............................
EXECUTED AND DELIVERED AS A DEED by )
XXXXX XXXXXXX )
in the presence of: ) .............................
-8-
EXECUTED AND DELIVERED AS A DEED by )
XXXXXX XXXXXXX )
in the presence of: ) .............................
EXECUTED AND DELIVERED AS A DEED by )
ACCELRYS INC. ) /s/ Xxxxx Xxxxx
Acting by Officer duly authorised ) .............................
-9-
