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Exibit 2.1
DATED June 11, 1999
(1) XXXXXXX XX XXXXXXX ESQ AND OTHERS
(2) SAGENT TECHNOLOGY, INC
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Agreement
for the sale and purchase of shares in
SAGENT (UK) LIMITED
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abcdef
2 Xxxxxxxxx' Xxx, Xxxxxx XX0X 0XX
Tel: 0000 000 0000 Fax: 0000 000 0000
Date: 28/05/99
Ref: C151/059973
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THIS AGREEMENT is made on June 11 1999 BETWEEN:
(1) The persons whose names and addresses are set out in the first schedule
("Vendors");
(2) SAGENT TECHNOLOGY, INC of 000 X Xx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxx Xxxx,
Xxxxxxxxxx 00000, Xxxxxx Xxxxxx of America ("PURCHASER").
WHEREAS
The Company is a distributor of products of the Purchaser, pursuant to the
terms of a distribution agreement between the Purchaser and the Company
effective as of 1 January 1998 (referred to herein as "DISTRIBUTION AGREEMENT").
As contemplated by such agreement and the Sagent UK buyout agreement entered
into by the Purchaser, the Company and the Vendors (referred to herein as
"BUYOUT AGREEMENT") pursuant thereto the Vendors have agreed to sell and the
Purchaser has agreed to purchase the Shares of the Company, at a multiple of 1.5
times the license revenues of the Company for the period from 1 October 1998 to
30 September 1999, and otherwise on the terms of this agreement.
IT IS HEREBY AGREED
1. DEFINITIONS AND INTERPRETATION
1.1 In this agreement unless the context otherwise requires:-
"ACCOUNTS" means the audited balance sheet as at the Balance Sheet Date and
the audited profit and loss account for the year ended on the Balance Sheet
Date of the Company together with the notes and directors' reports and
other documents annexed to them; and for the purposes of identification
only a copy of the Accounts is attached hereto as Exhibit A;
"ACTION" shall have the meaning given to that expression in paragraph 8.5
of the second schedule;
"AGREED FORM" means in a form agreed by and signed by or on behalf of the
parties to this agreement;
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"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, including Infomart Limited;
"AUDITORS" means the auditors for the time being of the Company;
"BALANCE SHEET DATE" means 31 December 1998;
"BUSINESS DAY" means a day on which banks generally are open in the City of
London for the transaction of normal banking business;
"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 or Taxation;
"COMPANIES ACT" means the Companies Xxx 0000;
"COMPANY" means Sagent (UK) Limited a company incorporated in England &
Wales with number 03489107;
"COMPLETION" means completion of the sale and purchase of the Shares
pursuant to this agreement;
"CONSIDERATION" means the aggregate consideration for the Shares as
referred to in clause 3;
"CONSIDERATION SHARES" 146,079 shares of common stock of US$0.001 each of
the Purchaser;
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"DISCLOSURE LETTER" means the letter from the Vendors to the Purchaser
referred to in clause 5;
"ENCUMBRANCE" has the meaning given to that expression in paragraph 1.1.1
of the second schedule;
"EVENT" includes any act, omission, transaction or circumstance (including
any of such matters provided for under this agreement);
"GAAP" shall have the meaning given to that expression in paragraph 3.1 of
the second schedule;
"GOVERNMENTAL AUTHORITY" and "GOVERNMENTAL ORDER" shall have the meanings
given to those expressions in paragraph 8.5 of the second schedule;
"INFOMART" means Infomart Consultants Limited, a company incorporated in
England and Wales with number 03600272.
"LIABILITY" and "LIABILITIES" shall have the meaning given to those
expressions in paragraph 8.5 of the second schedule;
"MANAGEMENT ACCOUNTS" means the unaudited balance sheet of the Company as
at 30 April 1999 and the unaudited profit and loss account of the Company
and cashflow statement for the period from the Balance Sheet Date to 30
April 1999; and for the purposes of identification only, a copy of the
Management Accounts is attached hereto as Exhibit B;
"MATERIAL CUSTOMER" and "MATERIAL SUPPLIER" shall have the meanings given
to those expressions in paragraph 7.1.3 of the second schedule;
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"PROPERTY" means the Company's leasehold property at 00 Xxxxxx Xxx, Xxxxxx,
X0;
"PURCHASER'S SOLICITORS" means Titmuss Sainer Dechert of 2 Xxxxxxxxx' Xxx,
Xxxxxx, XX0X 0XX;
"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;
"REVENUE" means all fiscal authorities (national or local) whether of the
United Kingdom or elsewhere;
"SHARES" means the whole of the issued and allotted share capital of the
Company 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;
"TAXES ACT" means the Income and Corporation Taxes Xxx 0000;
"WARRANTIES" means the representations, warranties and undertakings on the
part of the Vendors contained in the second schedule and which are made by
the Vendors pursuant to clause 5 and other words and expressions defined in
clauses and paragraphs of this agreement shall throughout this agreement
bear the meanings given to them;
1.2 In this agreement unless the context otherwise requires:-
1.2.1 any reference to a clause, schedule or Exhibit (other than to a
schedule to a statutory
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provision) is a reference to a clause of or schedule or Exhibit to this
agreement; and the schedules and Exhibits form part of and are deemed to be
incorporated in and in references to this agreement;
1.2.2 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 before the date of this
agreement and any former statutory provision replaced (with or without
modification) by the provision referred to;
1.2.3 any reference to persons includes a reference to firms, corporations or
unincorporated associations;
1.2.4 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
gender;
1.2.5 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;
1.2.6 words and expressions defined in the Companies Act bear the same
respective meanings; and
1.2.7 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 losses, damages, payments, awards costs or
expenses made, suffered or incurred by that person as a consequence of, or
which would not have arisen but for, that circumstance.
1.3 Headings and titles are used for ease of reference only and do not affect
the interpretation of this agreement.
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1.4 If any statement herein is qualified by the expression "to the best of the
Vendors' knowledge information and belief" or "so far as the Vendors are
aware" or any similar expression, that expression shall be deemed to
include a warranty by the makers thereof that the statement has been made
by them after due and careful enquiry.
2 SALE AND PURCHASE OF THE SHARES
The Vendors (other than Xxxxxxx Xx Xxxxxxx) shall sell 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.
Such Vendors shall sell the Shares with full title guarantee free from all
liens, charges, encumbrances and adverse claims (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 date of this agreement. The Vendors hereby waive all rights of
pre-emption they may have with respect to the sale of the Shares pursuant
to this agreement, whether under the articles of association of the Company
or otherwise.
3 CONSIDERATION
3.1 The aggregate Consideration for the Shares, which shall be apportioned
among the Vendors in the proportions set out in the first schedule, shall
be 2,074,325 United States dollars ("US$"), subject to upward or downward
adjustment in accordance with this clause 3.
3.2.1 Of the Consideration, up to US$2,074,325 shall be payable as to 50 per
cent by the issue of the Consideration Shares and 50 per cent in cash. Any
additional Consideration in excess of US$2,074,325 shall be payable in
cash. All cash payments shall be made in US$.
3.2.2 Of the Consideration, the Consideration Shares shall be issued by the
Purchaser to the Vendors at Completion and a cash amount of US$518,582
("INITIAL CASH CONSIDERATION") shall be paid to the Vendors on or before
the 30th day following the date hereof ("INITIAL SATISFACTION DATE") and
cash of US$518,581 ("RETAINED CONSIDERATION") shall, subject to the
provisions of this clause 3, be paid to the Vendors on 1 December 1999.
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For the purposes of this agreement the Consideration Shares shall be valued
at US$7.10 each ("INITIAL CONSIDERATION SHARE VALUE").
3.2.4 On or before the Initial Satisfaction Date the Purchaser shall pay the
Retained Consideration, into such separate interest bearing account or
escrow account as is referred to in clause 3.5.
3.3.1 If the license revenue of the Company, recognised and determined in
accordance with generally accepted accounting practice of the United States
of America for the period from 1 April 1999 to 30 September 1999 (such
license revenue for such period being referred to in this agreement as
"LICENSE REVENUE") is more or less than US$1,212,330, the Consideration
shall be adjusted as follows:-
3.3.1.1 if the License Revenue exceeds US$1,212,330 , the Consideration shall
be increased by US$ $1.50 for every US$1 of the excess of License Revenue
over US$1,212,330 (such increase in Consideration being referred to herein
as the "AMOUNT OF INCREASE"); or
3.3.1.2 if the License Revenue is less than US$1,212,330, the Consideration
shall be reduced by US$ $1.50 for every U$1 of the shortfall of License
Revenue below US$1,212,330 (such reduction in Consideration being referred
to herein as the "AMOUNT OF REDUCTION").
3.3.2 At the later of 1 December 1999 and the date of agreement among the
parties hereto of the Amount of Increase or Amount of Reduction, or the
determination thereof in accordance with clause 3.4:-
3.3.2.1 if the Consideration shall be increased in accordance with sub-clause
3.3.1.1, subject to clause 3.5, the Purchaser shall:-
(a) pay the Retained Consideration to the Vendors; and
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(b) pay an aggregate cash sum to the Vendors equal to the Amount of
Increase;
3.3.2.2 if the Consideration shall be reduced in accordance with sub-clause
3.3.1.2 and the Amount of Reduction shall be US$518,581 or more none of the
Retained Consideration shall become payable by the Purchaser (and the cash
held in any such account referred to in clause 3.5 shall be returned to and
held absolutely for the Purchaser) and the Vendors shall:-
(a) transfer to the Purchaser, for a nil consideration, such number of the
Initial Consideration Shares as shall have an Initial Consideration
Share Value equal to 50 per cent of the amount by which the Amount of
Reduction shall be more than US$518,581.
(b) pay an aggregate cash sum in US$ equal to 50 per cent of the amount by
which the Amount of Reduction shall be more than US$518,581;
provided that no fraction of an Initial Consideration Share shall be
transferred and the Initial Consideration Share Value applicable to such a
fraction shall instead be paid in cash.
3.3.2.3 if the Consideration shall be reduced in accordance with sub-clause
3.3.1.2 and the Amount of Reduction shall be less than US$518,581, subject
to clause 3.5, a proportion of the Retained Consideration shall be paid by
the Purchaser to the Vendors equal to US$518,581 minus the Amount of
Reduction. The balance of the Retained Consideration shall not become
payable to the Vendors and insofar as any cash comprised in the balance of
the Retained Consideration shall be held in any such account referred to in
clause 3.5 such amount shall be returned to and held absolutely for the
Purchaser.
3.4.1 The Purchaser shall produce a draft statement of the License Revenue by
15 November 1999 and the parties shall use all reasonable endeavours to
agree the same. If there shall be any dispute as to the amount of License
Revenue and/or any adjustment to the Consideration, such dispute shall be
referred to such firm of internationally recognised Chartered Accountants
as the Purchaser and the Vendors shall agree (or, failing agreement, such
firm as may be appointed on the application of any party hereto by the
President for the time being of the Institute of Chartered Accountants in
England and Wales) ("INDEPENDENT ACCOUNTANTS") and the determination of the
Independent Accountants shall be final and
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binding on the parties hereto save in the case of a manifest error.
3.4.2 The parties will procure (so far as they are each able to do so) that
the Company shall make available to the Independent Accountants such of the
Company's books, documents, records, directors and staff together with
access to such premises and the use of such facilities as may reasonably be
required in relation to the tasks which this agreement contemplates they
will carry out. The Independent Accountants, if appointed, shall act as
experts and not as arbitrators.
3.4.3 The costs of the Independent Accountants shall be borne by (a) the
Vendors on the one hand and (b) the Purchaser on the other hand so that the
Purchaser's share of such costs shall be in the same proportion that the
aggregate value of the disputed amounts submitted to the Independent
Accountants that are unsuccessfully disputed by the Purchaser (as finally
determined by the Independent Accountants) bears to the aggregate value of
all disputed amounts submitted to the Independent Accountants.
3.5 On or before the thirtieth day following Completion the Purchaser shall pay
the Retained Cash into a separate interest bearing account. The Vendors may
require the Retained Cash to be paid into an escrow account held by escrow
agents and on escrow terms acceptable to the Purchaser. Subject to the
provisions of this clause, the Retained Cash shall be used to satisfy any
amounts due to the Vendors under Clause 3.3. The Purchaser shall be
entitled to deduct and withhold payment from any part of the Retained Cash
payable to the Vendors under clause 3.3 the amount of any and all claims it
may have against the Vendors under this agreement, whether for breach of
Warranty, under clause 7 or otherwise. The amount of such claims which may
be so withheld and deducted shall be the amount of such claims which the
Purchaser shall have notified to the Vendors (in relation to which the
Purchaser shall proceed with all reasonable diligence toward taking legal
proceedings in relation thereto in so far as not settled between the
Purchaser and the Vendors) and also the amount of such claims which shall
have been settled or determined. For the purposes of this agreement such a
claim against a Vendor shall be deemed to be settled upon the Purchaser and
such Vendor agreeing a final settlement thereof and a claim shall be deemed
to be determined upon an order or decree of a court of competent
jurisdiction being given in proceedings in respect of such claim and such
order or decree being final and not or no longer appealable . In so far as
the amount of any claim deducted and withheld from the Retained Cash and
subsequently settled or determined shall be more than the amount of such
claim as so settled or determined the excess of the amount so deducted
shall within 30 days following settlement or determination of the amount of
such claim be paid from the Retained Cash by the Purchaser to the relevant
Vendors together with interest earned on such excess amount. In so far as
any amount is deducted and withheld from the Retained
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Cash and is in respect of a claim which lapses in accordance with clause
5.7 the amount so deducted shall within 30 days of such claim lapsing be
paid from the Retained Cash by the Purchaser to the relevant Vendors
together with interest earned on such excess amount.
3.6 All cash to be paid to the Vendors hereunder shall be paid to such bank
accounts of theirs as they shall notify the purchaser in writing.
4 COMPLETION
4.1 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.
4.2 The Vendors shall deliver to the Purchaser or (at the option of the
Purchaser) to its nominee(s):-
4.2.1 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;
4.2.2 written resignations and releases executed as deeds in the Agreed Form
from all persons other than Xxxxxxx Xx Xxxxxxx and Xxxxxxx Xxxxx-Xxxxx 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 business expenses (if any) for the month then current;
4.2.3 the unqualified resignation with effect from Completion of the present
Auditors as auditors of the Company by notice in accordance with section
392 of the Companies Act which shall contain a statement in accordance with
section 394 of the Companies Act together with confirmation that they have
no claims against the Company for unpaid fees or expenses;
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4.2.4 The certificate of incorporation and the Memorandum and Articles of
Association 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;
4.2.5 a letter from the Vendors specifying the whereabouts of any title
deeds, agreements, books and records and other documents of the Company
which shall not be held at the Property and directing the holders of them
to deliver them up to the Purchaser's authorised representatives
immediately upon request;
4.2.6 certificates from each of the banks at which the Company maintain
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.
4.3 The Vendors shall on the Completion Date:-
4.3.1 procure that none of them or any of their Associates has any claims or
rights of action against the Company and that the Company is not in any way
obligated or indebted to any of them or to any such Associates save for
arrears of salary and reasonable business expenses no more than one month
due, for bonuses not to exceed 81,026.55 pounds in aggregate in respect of
bonuses due to Xxxxxxx Xxxxx Xxxxxxx Xxxxx Xxxxx, Xxxx Xx Xxxxxxx and
Xxxxxxx Xx Xxxxxxx and save for indebtedness not exceeding 250,000 pounds
owed to Infomart in respect of services supplied prior to Completion; and
4.3.2 procure that each of them and their Associates shall have repaid to the
Company all sums which may be owed by any of them to the Company on any
account whatsoever, whether or not such sums shall be due and payable on or
before Completion;
4.3.3 deliver to the Purchaser letters executed as deeds in the Agreed Form
confirming that they have complied with clauses 4.3.1 and 4.3.2 and
irrevocably and unconditionally releasing the Company from all obligations
and liabilities as contemplated by clause 4.3.1.
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4.4 The Vendors shall procure that a board meeting of the Company will be held
which will transact the following business:-
4.4.1 (subject only to them being stamped) the approval of the transfers of
the Shares referred to in clause 4.2.1 and the Purchaser and/or its
nominee(s) being entered in the register of members of the Company as the
holders of the Shares specified in those transfers;
4.4.2 the appointment of Xxxxxxxx Xxxxxx, Xxx Xxxxxxxx and Xxxxxxx Xxxxxxx
and such other persons as the Purchaser may nominate as directors and
Xxxxxxxx Xxxxxx as secretary of the Company;
4.4.3 the acceptance of the various resignations of officers and auditors
referred to in this clause;
4.4.4 the appointment of PricewaterhouseCoopers as auditors to the Company;
4.4.5 the change of the registered office, the accounting reference date and
the bank mandates of the Company in accordance with the Purchaser's
requirements;
4.4.6 such other business as the Purchaser may reasonably require.
4.5 The Purchaser and the Vendors shall enter into a registration rights
agreement in the form set out in the third schedule.
4.6. The Vendors shall procure the termination of all agreements between the
Company and Infomart. The Vendors shall procure that Infomart shall vacate
the Property upon reasonable notice, save where the Company or the
Purchaser are the subject of a lawful demand or obligation relating to
Infomart's occupation of the Property or the Purchaser or the Company
receive or reasonably anticipate a threat of action being taken with
respect to the Property relating to Infomart's occupation in which case the
Vendors shall procure that Infomart shall vacate the Property on demand by
the Company.
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4.7 The Purchaser shall issue the Consideration Shares to the Vendors and shall
issue instructions to its transfer agents for the preparation of stock
certificates therefor and shall deliver or procure delivery of stock
certificates to the Vendors as soon as practicable after Completion.
5 WARRANTIES AND REPRESENTATIONS
5.1 The Vendors represent and warrant to and undertake with the Purchaser that
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.
5.2 Each of the Warranties, covenants, indemnities and undertakings set out in
this agreement is separate and independent.
5.3 The Vendors 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
or in preparing the Disclosure Letter , unless such misrepresentation or
omission was made fraudulently.
5.4 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, warranted or
undertaken then, if the Purchaser shall so elect by notice in writing to
them, the Vendors 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) and all costs and expenses incurred
by the Company and/or the Purchaser as a result of such breach. PROVIDED
THAT the amount of the Vendors liability under this clause shall be reduced
to the extent that the assets of the
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Company are understated or the liabilities overstated in the Accounts or
any contingent liability included in the Accounts has been over provided or
proved to be less than the amount attributed to such liability in the
Accounts.
5.5 The liability of the Vendors under or in respect of the Warranties and
under clause 7 ("Tax Indemnification") shall be limited as follows:-
(a) there shall be disregarded any breach of the Warranties or a liability
under the Tax Indemnification in respect of which the amount of the damages
to which the Purchaser would otherwise be entitled is less than US $3,000
provided that breaches of Warranty or liabilities under the Tax
Indemnification relating to the same or similar or related events, acts
omissions, transactions, defaults or liabilities shall be treated as a
single breach of the Warranties or single liability under the Tax
Indemnification (as the case may be);
(b) the Vendors shall be under no liability in respect of breaches of the
Warranties or under the Tax Indemnification until the aggregate liability
of the Vendors in respect of all breaches of the Warranties and under the
Tax Indemnification exceeds US $30,000 provided that the Vendors liability
shall not be limited to the excess above such amount;
(c) the Vendors shall not be liable in respect of a Warranty breach relating to
a contingent liability until it becomes an actual liability provided that
for the avoidance of doubt this shall not restrict the Purchaser making a
claim within the periods referred to in clause 5.7; and
(d) the aggregate liability of the Vendors in respect of all breaches of the
Warranties and all and any claims under the Tax Indemnification shall not
exceed the Consideration, together with the amount of any interest, costs
and expenses in respect of such liability.
5.6 The liability of the Vendors in respect of any Warranty claim or claim
under the Tax Indemnification shall be reduced to the extent that:-
(a) provision, reserve, note or allowance for the matter or liability which
would otherwise give rise to the claim in question has been made (1) in the
Accounts and the Management
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Accounts or (2) the Management Accounts;
(b) the breach of Warranty or liability under the Tax Indemnification results
from:
i) the passing of, or any change in, any legislation (primary or
subordinate) after the date of this agreement or any change of law or
administrative practice of any governmental department or regulatory
body (including, without limitation, any change of practice in
relation to extra statutory concessions or any decision of the Courts
of any jurisdiction altering the accepted interpretation of any law
statute, case law or common legislation) after the date of this
agreement, or any increase in the rates or any imposition of Taxation
or any withdrawal of relief from Taxation or any other change in the
scope of Taxation in force at the date of this agreement (in either
case whether retrospective or otherwise); or
ii) the Purchaser or the Company failing to make any claim, election,
surrender or disclaimer for any Taxation purpose after Completion
identified specifically in the Disclosure Letter with reference to
this clause as being intended to be made; or
iii) any change after the date of this agreement in the accounting
reference date of the Company or in the accounting policies adopted by
the Company or in the accounting bases on which the Company values its
assets; or
iv) any change in any accounting policy or Taxation policy or practice of
the Purchaser or the Company including the method of submission of tax
returns after Completion except to comply with law or GAAP prevailing
before Completion; or
(v) in the case of a liability under the Tax Indemnification
(1) the postponement or withdrawal by the Company after Completion of
any claim for Relief made on or before Completion;
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(2) a voluntary act or omission of the Company after Completion not
made in the ordinary and normal course of business (applying the
provisions of clause 7.4 for this purpose);
(3) the rate of corporation tax applicable to the Company or its
profits increasing as a consequence of the Company becoming a
member of a group of companies of which the Purchaser is a
member;
(4) any change in the nature of conduct of trade or business of the
Company after Completion or from its winding up after Completion;
(5) any fines, penalties or interest which arise or are increased as
a consequence of any failure by the Purchaser or the Company to
pay any liability to Taxation which has previously given rise to
a payment made by the Vendors to the Purchaser under the Tax
Indemnification; or
(c) as regards any claim, any amount referable to such claim is recovered by
the Company from insurers. To the extent recoverable, the Company shall
make a claim to recover such sums from insurers. The costs of recovery and
corresponding increases in insurance premiums shall be treated as a
reduction in the amount recovered by the Company.
5.7 The Purchaser shall not be entitled to make any claim against the Vendors
in respect of:-
(a) the Tax Indemnification unless the Purchaser has given written notice of
its intention to make such a claim to the Vendors on or before the seventh
anniversary of Completion; and
(b) the Warranties unless the Purchaser has given written notice to the Vendors
setting out reasonable particulars then known of the claim on or before the
second anniversary of Completion, and any such claim which may be made
shall (if it has not been previously satisfied, settled or withdrawn) be
deemed to be withdrawn and the liability of the Vendors shall absolutely
determine unless legal proceedings in respect thereof have been commenced
by the issuing and service of such proceedings against the Vendors within
12 months after
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such notice provided that in the case of a breach of the Warranties
concerning a claim by or dispute with a third party the Purchaser shall
then be able to determine all relevant facts applicable to its claim.
5.8 The provisions of clauses 5.5 to 5.7 and the remaining provision of this
clause 5 shall not apply to any breach of the Warranties (or delay in its
discovery) or a liability under or a Tax Indemnification which is the
consequence of fraud by any of the Vendors.
5.9 Where any third party (including without limitation, any insurance company,
and the Inland Revenue to the extent of any relevant tax refund or tax
relief) appears to be liable to the Purchaser or to the Company in relation
to any matter which could give rise to a liability on the part of the
Vendors under this agreement (referred to in this clause as "relevant
liability"), the Purchaser shall, provided that the Vendors shall indemnify
and secure the Purchaser and the Company to the reasonable satisfaction of
the Purchaser against all costs, liabilities, losses, claims, damages and
expenses which the Purchaser and the Company may suffer as a result, use or
procure that all reasonable endeavours are used to recover any amounts (or
any benefits) due from any such third party. Upon any recovery of such
amounts mentioned in this clause as being due from a third party, provided
that the Vendors shall have fully satisfied their liabilities to the
Purchaser hereunder the Purchaser shall pay to the Vendors the lesser of
the amount received from the third party and the amount paid by the Vendors
in respect of the relevant liability less in each case all costs, claims,
liabilities, losses, damages and expenses incurred by the Purchaser and the
Company in making such recovery.
5.10 Nothing contained in this agreement shall be deemed to absolve the
Purchaser from a duty at law (if any) to the Vendors to mitigate its loss.
5.11 Save as set out in this agreement, the Purchaser shall, after the date of
this agreement, have no right to rescind or terminate this agreement for
breach or non-fulfilment of any of the Warranties or for any other reason
whatsoever.
5.12 The Vendors shall not be in breach of the Warranties to the extent that
matters which would otherwise have constituted a breach of the Warranties
have been fairly disclosed in the Disclosure Letter.
19
5.13 Any payment made by the Vendors in respect of a Warranty Claim or under the
Tax Indemnification shall be deemed to be a reduction in the Consideration
for the sale of the Shares.
5.14 If the Purchaser shall receive any claim ("THIRD PARTY CLAIM") made by a
third party which will give rise to a liability on any of the Vendors for
breach of Warranty, the Vendors shall be entitled to require the Purchaser
or the Company at the expense of the Vendors to take all such reasonable
steps or proceedings as the Vendors may reasonably consider necessary in
order to avoid , dispute, resist, mitigate, compromise, defend or appeal
against any relevant third party claim provided that:-
5.14.1.1 the Vendors agree in writing to be solely obligated to satisfy and
discharge such claims and to indemnify and secure the Purchaser and the
Company to the Purchaser's satisfaction against all damages, losses,
claims, liabilities, costs and expenses suffered or incurred by them in
connection with the taking of such steps or proceedings;
5.14.1.2 the defence, comprise or settlement of such claim will not in the
opinion of the Purchaser have any material adverse effect on the business
of the Purchaser and/or the Company ;
5.14.1.3 the Vendors provide the Purchaser with reasonable evidence of the
ability of the Vendors to satisfy the full amount of any adverse monetary
judgement that may result; and
5.14.1.4 the third party claim is and continues to be a claim for monetary
damages only;
(collectively and individually the "LITIGATION CONDITIONS"). In the event
any of the Litigation Conditions are not or cease to be satisfied, the
Vendors' right under this clause 5.14 shall terminate.
5.14.2 The Purchaser shall act or shall procure that the Company shall act in
accordance with any such requirement subject to the Purchaser and the
Company being properly indemnified and secured by the Vendors to the
reasonable satisfaction of the Purchaser against all costs and expenses
incurred in connection with the taking of such steps or proceedings.
20
5.14.3 The Vendors, if they shall have assumed the conduct of any proceedings
arising in connection with a third party claim pursuant to this clause 5.14
shall not consent to a compromise or settlement of or the entry of any
judgement arising from any such third party claim without the prior written
consent of the Purchaser if such compromise or settlement (i) commits the
Purchaser or the Company to take or to forbear to take any action and/or
(ii) does not provide for a complete release by such third party of the
Purchaser and the Company and/or (iii) includes any statement as to or in
admission of fault, wrong doing, guilt culpability, liability or failure to
act by or on behalf of the Purchaser or the Company. If the Vendors do not
assume the conduct of any proceedings arising in connection with a third
party claim, the Purchaser or, as the case may be, the Company shall have
the right to defend such a third party claim with solicitors of its choice
and to settle any third party claim.False1431416377
6 UNDERTAKINGS BY THE VENDORS
6.1 The Vendors 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 the 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 and in connection therewith.
6.2 In clause 6.3:-
"BUSINESS" means the business of the Company as carried out at the date of
this agreement;
"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 listed dealt in or traded on a recognised stock exchange
not exceeding 1 per cent. in nominal value of the securities of that class
in issue) 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; and
21
"RESTRICTION PERIOD" means the period of 4 years from Completion.
6.3 Subject as provided at the end of this clause 6.3, each Vendor severally
undertakes to the Purchaser for itself and for the benefit of the Company,
that he will not, and will procure subject to clause 6.5 that Infomart will
not, (other than for and on behalf of the Company) without the prior
written consent of the Purchaser directly or indirectly:-
6.3.1 at any time during the Restriction Period be engaged or concerned or
interested or participated in or carry on or assist any business which is
the same as or similar to or in competition with the Business:-
6.3.1.1 anywhere in the United Kingdom;
6.3.1.2 anywhere in continental Europe; and
6.3.1.3 anywhere in the United States of America;
6.3.2 at any time during the Restriction Period in relation to a business
which may be the same as or in competition with the Business, canvass,
solicit or entice the custom of or deal with or supply (whether by way of
sale or licence or otherwise) any goods or services to any person who at
the date of this agreement or at anytime since 1 January 1998 has been a
customer or client of or in the habit of dealing with the Company; or
6.3.3 at any time during the Restriction Period offer employment to or employ
or offer or conclude any contract for services with any person who at any
time since 1 January 1998 shall have been a director, senior employee,
consultant or agent of the Company save that this shall not restrict
Infomart in employing Xxxxxxx Xxxxx;
6.3.4 except as required by law at any time disclose to any person or use for
his own benefit (or that of any other person) any information or know-how
of a confidential nature concerning and relating to the goodwill of the
Company including (without limitation) information and
22
know-how as to products, processes, techniques, suppliers, customers,
finances, business policy and expansion or forward planning programmes
which he shall have acquired before Completion; or
6.3.5 at any time carry on a business under the name "Sagent" or any part,
combination or abbreviation thereof or any similar or other name likely to
confuse or mislead any part of the public
PROVIDED THAT clauses 6.3.1 and 6.3.2 shall not apply to Xxxxxxx Xxxxx and
instead Xxxxxxx Xxxxx undertakes to the Purchaser for itself and for the
benefit of the Company that for two years after Completion he shall not
directly or indirectly work for, or provide any services to, or solicit or
entice the custom of any person who has been a customer or client of the
Company at anytime since 1 January 1998 for the benefit of, any of the
following competitors of the Purchaser and/or the Company: Informatica;
Microstrategy; Ardent; Hummingbird; Brio; Business Objects; Information
Advantage; and Cognos
6.4 Each of the Vendors acknowledges and agrees with the Purchaser that:-
6.4.1 each of the sub-clauses contained in clause 6.3 constitutes an entirely
separate severable and independent covenant by and restriction on him;
6.4.2 the duration, extent and application of each of the restrictions
contained in clause 6.3 are no greater than is necessary for the protection
of the goodwill and trade connections of the Business and the value of the
Company;
6.4.3 if any restriction contained in clause 6.3 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; and
6.4.4 damages will not be an adequate remedy for breach of any of the
restrictions contained in clause 6.3 and accordingly the Purchaser and the
Company shall be entitled to injunctive relief in respect of a breach of
such restrictions.
23
6.5 The parties acknowledge and agree that notwithstanding the provisions of
clause 6.3, Infomart shall not be prevented from re-selling licences
purchased from the Company when the sale by the Company was completed on
the basis that Infomart will resell the licence.
7 TAX INDEMNIFICATION
7.1 The Vendors covenant with the Purchaser to pay to the Purchaser an amount
equal to:-
7.1.1 any liability to Taxation of the Company (whether or not a primary
liability of the Company) in respect of, by reference to or in consequence
of any income, profits, gains or event earned, accrued, received or
occurring or deemed to have been or treated as or regarded as earned,
accrued, received or occurring on or before Completion;
7.1.2 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
such other person or otherwise connected with or related to such other
person for Taxation purposes;
7.1.3 any Taxation for which the Company would have become liable pursuant to
clauses 7.1.1 and 7.1.2 but for the utilisation or set off of some Relief
other than a Relief arising before Completion which has been taken into
account in computing or reducing or obviating the need to provide for
liabilities for Taxation which appear or would, but for such taking into
account, have appeared in the Accounts or the Management Accounts;
7.1.4 any Taxation arising in respect of or in connection with any amounts
paid or payable pursuant to or otherwise in connection with this clause 7;
and
7.1.5 all costs and expenses incurred by the Purchaser in enforcing the
provisions of this clause 7.
7.2.1 All sums payable by the Vendors under the covenants contained in this
clause 7 shall be
24
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.
7.2.2 If the Vendors are required by law to make any deduction or withholding
from any payment under this clause 7, the sum due from the Vendors 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.
7.3 The covenants in clause 7.1 shall not apply to any liability to Taxation to
the extent that a specific provision or reserve in respect of it was made
in the Accounts and the Management Accounts or it arises only as a
consequence of any retrospective change in the law enacted after Completion
or the Company is liable in respect of actual income, profits or gains of
the Company arising in the ordinary and normal course of business in the
period from the Balance Sheet Date to Completion.
7.4 For the purposes of clauses 5.6(b) (v) and 7.3 none of the following shall
be regarded as occurring in the ordinary and normal course of business of
the Company:-
7.4.1 a distribution within the meaning given by Part VI with Section 418
Taxes Act;
7.4.2 an acquisition, disposal or supply or deemed acquisition disposal or
supply of assets, goods, services or business facilities of any kind
(including a loan of money or a letting, hiring or licensing of tangible or
intangible property) for a consideration which is treated for Taxation
purposes as different from the actual consideration;
7.4.3 an event which results in the Company being liable for Taxation for
which it is not primarily liable;
7.4.4 an event in respect of which Taxation arises as a result of a failure
by the Company to deduct, withhold, or account for Taxation; and
25
7.4.5 any disposal of capital assets.
7.5 The Purchaser undertakes to the Vendors to pay to the Vendors by way of
adjustment to the price paid for the Shares under this agreement an amount
equal to any liability of the Vendors, or any other person falling within
Section 767A(2) or 767AA(4) of the Income and Corporation Taxes Act 1988 by
virtue of a relationship which that person has with the Vendors, for
corporation tax (and any related interest, penalties, costs and expenses)
assessed on the Vendors or on any such person pursuant to Section 767A,
767AA or 767B of that act as a result of the Company failing to pay any
corporation tax assessed to it Save That the Purchaser shall have no
liability under this clause in respect of any Taxation for which the
Vendors have a liability to the Purchaser under the preceding provisions of
this clause 7.
7.6 The Covenant contained in clause 7.5 shall not apply to Taxation which the
Vendors have recovered from the Company under any statutory right of
recovery and the Vendors shall procure that no recovery under such
statutory right is sought to the extent that payment has been made to the
Vendors by the Purchaser under clause 7.5 in respect of that Taxation or to
the extent that the Vendors are liable to the Purchaser in respect of such
Taxation under the preceding provisions of this clause 7.
8 NATURE OF OBLIGATIONS
8.1 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.
8.2 The rights and remedies of the Purchaser in respect of a breach of any
provision of this agreement 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 no such
actual or constructive knowledge shall in any way constitute a waiver of
any of the Purchaser's rights.
8.3 Any right or remedy of the Purchaser in respect of a breach of any
provision of this
26
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 remedy shall not constitute a waiver or by the Purchaser of
that or of any of its other rights or remedies.
8.4 Neither party may transfer or assign any of their rights or obligations
under this agreement without the prior written consent of the other save
that the Purchaser may freely transfer or assign its rights or obligations
under this agreement without the prior written consent of any Vendor to any
subsidiary of it but only upon terms that such subsidiary must transfer
such rights and obligations back to the Purchaser or another subsidiary of
the Purchaser in the event that the first subsidiary ceases to be a
subsidiary of the Purchaser and such second (and any subsequent) transfer
shall contain a like obligation on the second (and any subsequent)
transferee. Subject to the foregoing, this agreement will be binding upon
and enure to the benefit of the parties hereto, their successors and
assigns.
8.5 The failure of any party at any time to require performance by any other of
any provision hereto shall not affect the right of such party to require
performance at any time thereafter, nor shall the waiver by any party of a
breach of any provision hereof be undertaken or held to be a waiver of a
provision itself.
8.6 If any provision or part of a provision of this agreement is held to be
invalid by a court of competent jurisdiction, then the remaining provisions
will nevertheless remain in full force and effect.
9 GENERAL
9.1 This agreement together with any other documents which this agreement
expressly requires shall be signed contains the entire understanding of the
parties to it with respect to the subject matter of this agreement and
supersedes all prior agreements relating thereto, written or otherwise.
9.2 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.
9.3 Each party shall pay its own costs in relation to the negotiations leading
up to the sale of the
27
Shares and to the preparation, execution and carrying into effect of this
agreement and of all the other documents referred to in it.
9.4 The Vendors 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 the employees,
suppliers or customers of the Company concerning the terms and conditions
or existence of this agreement without the text of such announcement or
circular first being approved by the Purchaser.
9.5 This agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective
when one or more counterparts have been signed by each of the parties and
delivered to the other party, it being understood that all parties need not
sign the same counterpart.
10 COMMUNICATIONS
10.1 All communications between the parties with respect to this agreement shall
be in writing and delivered by hand (which shall include by courier or
express delivery service) 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 as the addressee may from time to time have notified for the
purposes of this clause or as specified in clause 10.3.
10.2 Communications shall be deemed to have been received:-
10.2.1 if delivered by hand, on the day of delivery;
10.2.2 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 or
from an address outside the United Kingdom);
28
10.2.3 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;
10.3
Communications to the Vendors shall be copied to Xxxxx & Co (marked for the
attention of Xxxxx Xxxxxxxxxx) at Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxx, XX0 0XX at fax number 00000 000000.
Communications addressed to the Purchaser may be sent to
Fax No.[001] 000 000 0000
and shall be marked for the attention of "The Legal Department" with a copy
to the Purchasers' Solicitors (marked for the attention of Xxxx Xxxxxxxxx),
whose fax number is 0000 000 0000 and with a copy also to Xxxxxx X.
Xxxxxxxxxxxx at Wilson, Sonsini, Xxxxxxxx and Xxxxxx, 000 Xxxx Xxxx Xxxx,
Xxxx Xxxx, Xxxxxxxxxx 00000-0000, XXX whose fax number is [001] 650 493
6811.
10.4 In proving service:-
10.4.1 by delivery by hand, it shall be necessary only to produce a receipt
for the communication signed by or on behalf of the addressee;
10.4.2 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
10.4.3 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
or airmail post on the same or following day.
11 PROPER LAW
This agreement shall be governed by English Law and the parties irrevocably
submit to the non-exclusive jurisdiction of the English Courts and the
State Courts of Santa Xxxxx County, California or, in the event of federal
jurisdiction, the Courts of the Northern District of California.
29
FIRST SCHEDULE
THE VENDORS
COLUMN 1 COLUMN 2 COLUMN 3
-------- -------- --------
Name and address Number of Proportion of
Shares held Cash Consideration
and Consideration
shares receivable
Xxxxxxx Xx Xxxxxxx NIL NIL
0 Xxxxxxxxx Xxxxx
Xxxxxxxxxx Xxxx
Xxxxxxxxxx
Xxxxxxxxx XX0 0XX
Xxxx Xx Xxxxxxx 850 85%
0 Xxxxxxxxx Xxxxx
Xxxxxxxxxx Xxxx
Xxxxxxxxxx
Xxxxxxxxx XX0 0XX
Xxxxxxx Xxxx Xxxxx 50 5%
00 Xxxxxxx Xxxx
Xxxxxxxx
Xxxxxx XX0 0XX
30
COLUMN 1 COLUMN 2 COLUMN 3
-------- -------- --------
Name and address Number of Proportion of
Shares held Cash Consideration
and Consideration
shares receivable
Xxxxxxx Xxxxx-Xxxxx 00 5%
Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxxxx
Xxxxxxxxxx
Xxxxx XX00 0XX
Xxxxxxxx Xxxxx-Xxxxx 50 5%
Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxxxx
Xxxxxxxxxx
Xxxxx XX00 0XX
31
SECOND SCHEDULE
WARRANTIES
Part 1
GENERAL
1.1 THE VENDORS
1.1.1 The Vendors are the beneficial and legal owners of the Shares as set
out in the first schedule and are entitled to sell the Shares to the
Purchaser free from all security interests, pledges, mortgages, liens,
charges, adverse claims and restrictions of any kind, whether created by
law or in equity, including any restriction on the use, voting, transfer,
receipt of income or other exercise of any attributes of ownership
(together "Encumbrance") and without the consent of any third party.
1.1.2 Each of the Vendors has duly executed this agreement and the other
documents delivered by them in connection with this agreement and has full
power and authority to enter into this agreement and the other documents to
be executed in connection with it and to consummate the transactions
contemplated hereby, all of which constitute legal and valid binding
obligations on them enforceable in accordance with their respective terms.
1.1.3 No bankruptcy order has been made in respect of any of the Vendors or a
petition for such an order presented.
1.1.4 The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not, (a) violate
or conflict with any provision of any other agreement to which any Vendor
is a party or (b) violate or conflict with any law, rule, regulation or
governmental order to which any Vendor, or the business, properties or
assets of Company, are bound or subject.
1.2 THE SHARES
32
The Shares constitute the whole of the issued and allotted share capital of
the Company and are fully paid or credited as fully paid.
1.3 ACCURACY OF INFORMATION
All material written (including by e mail) 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 in
the course of the negotiations leading up to this agreement was, when
given, and is now true, complete in all material aspects and accurate and
not misleading.
Part 2
THE COMPANY
2.1 THE COMPANY
The Company is a private company limited by shares incorporated and validly
existing in England. The Company's sole business is and has always been
that of distributor of products of the Purchaser (including activities such
as training and consultancy services regarding such products) in the United
Kingdom pursuant to the Distribution Agreement. The Company does not have
and never has had any subsidiaries or subsidiary undertakings.
2.2 SHARE CAPITAL
Except for the Shares, no share or convertible securities of the Company
(or any rights or interests therein) have been created, allotted or issued
or agreed to be created, allotted or issued and there are no outstanding
rights to call for the creation, allotment, issue, transfer or conversion
at any time of any share or loan capital of the Company (or any rights or
interests therein).
2.3 STATUTORY AND OTHER REGULATIONS
So far as the Vendors are aware neither the Company nor any of its
directors or officers is in material breach of or has failed to comply in
full with any Governmental Orders, laws and statutory and municipal rules,
regulations and provisions applying to or affecting them or
33
the business or activities of the Company provided that for the avoidance
of doubt no such breach or failure shall be a liability or obligation
incurred in the ordinary course of business for the purposes of paragraph
8.5 (No Undisclosed Liabilities) of this schedule.
2.4 STATUTORY BOOKS AND MEMORANDA AND ARTICLES OF ASSOCIATION
The Register of Members and other books 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. The copy of the Memorandum and
Articles of Association of the Company attached hereto as Exhibit C is
complete and accurate in all respects.
2.5 INSOLVENCY
No notice has been received by the Company or the Vendors that any 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 over 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) and the Company is capable of meeting its liabilities as and when
they fall due.
Part 3
THE ACCOUNTS
3.1 THE ACCOUNTS
The Accounts: have been prepared in accordance with the historical cost
convention; comply with the requirements of the Companies Act, all other
relevant statutes, all relevant, Statements of Standard Accounting
Practice, Financial Reporting Standards and pronouncements issued or
adopted by the Accounting Standards Board Limited and other generally
accepted accounting practices (together "GAAP") applicable to a United
Kingdom company and have been audited in accordance with the Auditing
Standards issued by the Auditing Practices Board; 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;
contain proper provision or reserves or appropriate notes in respect of all
liabilities (whether actual or contingent, quantified or disputed) and
capital
34
and leasing commitments of the Company as at the Balance Sheet Date; and
are not affected by any extraordinary or non-recurring items.
3.2 ACCOUNTING RECORDS
All accounts, books, ledgers and financial and other records of the Company
are in the possession of the Company have been kept and completed in
accordance with statutory requirements, show and explain all transactions
entered into by the Company and disclose with reasonable accuracy the
current financial and contractual position of the Company and contain a
record of its assets and liabilities.
3.3 MANAGEMENT ACCOUNTS
The Management Accounts have been prepared by the Company with due care and
attention in accordance in all material respects with the same accounting
policies as the Accounts (save for changes in April 1999) and show a
reasonably accurate and fair view of the state of affairs and profit or
loss of the Company as at the date and for the period in respect of which
they have been prepared and are not affected by any exceptional or
non-recurring items;
Part 4
THE PROPERTY
4.1 INTRODUCTION
The Property comprises all the land and premises owned, occupied or
otherwise used by the Company. Attached hereto as Exhibit D is a true,
complete and accurate copy of every document of title and every other
document which incorporates or affects the rights or obligations of the
Company in relation to the Property and there are no material subsisting
breaches or any material non-observances of any covenant, condition or
agreement on the part of the Company thereunder and the landlord has not
refused to accept rent or made any complaint or objection. 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 real property other than the Property.
35
4.2 TITLE
The Company has good and marketable title (legal and beneficial) to the
Property and has exclusive possession and occupation of the Property. The
Property is not subject to any lease, tenancy, licence to occupy or
agreement to grant any of them.
4.3 DISPUTES
There are no disputes to which the Company is a party or of which it is
aware concerning boundaries, easements, covenants, rights, means of access
or other matters relating to the Property or its use or occupation and
there are no such pending or anticipated disputes, actions, claims or
demands in respect of the Property or its use or occupation. To the best of
the knowledge and belief of the Vendors there are no circumstances which
would entitle or require any person to exercise any power of entry upon or
of taking possession of any of the Property or which would otherwise
restrict or terminate the continued possession or occupation of any of the
Property.
4.5 CONDITION AND PHYSICAL ASPECTS OF THE PROPERTIES
There is no anticipated expenditure in excess of 10,000 pounds in relation
to the Property other than in respect of rent and other usual outgoings.
The Company has not been served with any schedule of dilapidations relating
to the Property or notified of any dilapidations.
Part 5
FIXED AND CURRENT ASSETS
5.1 OWNERSHIP OF ASSETS
The Company is the sole owner with good and marketable title free from all
Encumbrances, of all the assets and rights 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 Encumbrances over such assets or rights. The assets and
properties owned or leased by Company constitute all of the assets and
properties used in the operation of its business and such assets and
properties constitute all of the assets and properties necessary to
continue the operation of such business after Completion in substantially
the same manner as now carried on.
36
5.2 EQUIPMENT AND MACHINERY
Maintenance contracts and computer software support contracts are in full
force and effect in respect of all equipment and machinery and computer
software which is of a kind which is normal or prudent to have maintained
by independent or specialist contractors; the Company did not suffer any
material failures or breakdowns of or material bugs in the computer
hardware or software which it now uses during the year preceding the date
of this agreement; the Company has taken proper precautions to preserve the
reliability, function, availability, confidentiality and integrity of its
computer hardware and software systems.
Part 6
INTELLECTUAL PROPERTY
The Company owns all rights, title and interest in and to, or is licensed,
sublicensed, or otherwise possesses legally enforceable rights to use, free
and clear of any Encumbrance, all patents, trademarks, trade names, service
marks, copyrights, maskworks, technology, know-how, computer software
programs or applications (in both source code and object code form), and
tangible or intangible proprietary information or material that are used in
or necessary for the conduct of the business of the Company as currently
conducted. The Company has not used the intellectual property rights of the
Purchaser except as authorised under the Distribution Agreement.
Part 7
FINANCIAL POSITION
7.1 EVENTS SINCE THE BALANCE SHEET DATE
Since the Balance Sheet Date:-
7.1.1 save in respect of losses apparent from the Management Accounts there
has been no material adverse change in the financial or trading position of
the Company;
37
7.1.2 the business of the Company has been carried on in the ordinary and
normal course, without any material interruption and without any material
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 no substantial supplier or customer of the Company, being a supplier
who, during the period covered by the Accounts or the Management 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 or
the Management Accounts purchased more than 5% of the invoice value of all
of the Company's sales, including sales by way of licensing of the
Purchasers products pursuant to the Distribution Agreement (referred to
herein as "MATERIAL SUPPLIER" and "MATERIAL CUSTOMER"), has ceased or
substantially reduced its trade with the Company or given written notice of
its intention to do so;
7.1.4 the Company has not declared, paid or made any dividends or other
distributions within the meaning of the Taxes Act;
7.1.5 the Company has not made any loans or, except in the ordinary and
normal course of its business incurred any borrowings.
7.2 BANK AND OTHER BORROWINGS
Full details of all limits on the Company's bank overdraft and other
borrowing facilities together with amounts currently owed thereunder and
together with true, complete and accurate copies of all letters of credit,
guarantees, sureties and other financial instruments issued on behalf of,
or for the benefit of, the Company and which remain in force are attached
hereto as Exhibit F; the total amount borrowed by the Company does not
exceed any limitation on its borrowing pursuant to any obligation to which
it is a party.
Part 8
CONTRACTS AND COMMITMENTS
8.1 SUBSISTING CONTRACTS
Attached hereto as Exhibit G is a true, complete and accurate copy
(incorporating all the
38
terms which currently apply) of every contract, covenant, commitment or
arrangement to which the Company is a party and in respect of which any
party to them has or may have any outstanding liability and which:-
8.1.1 is of an unusual or abnormal nature, or outside the ordinary and normal
course of business;
8.1.2 is for a fixed term of more than, or is incapable of termination in
accordance with its terms without payment or loss within, three months;
8.1.3 is of a loss-making nature (that is, known by the Vendors to be likely
to result in a loss to the Company on completion or performance);
8.1.4 involves payment by the Company by reference to fluctuations in the
index of retail prices, or any other index or in the rate of exchange for
any currency;
8.1.5 is an agreement with a Material Customer, including maintenance
agreements;
8.1.6 is an agreement with a customer not on the Company's standard terms of
trade;
8.1.7 involve an aggregate outstanding capital expenditure of more than
25,000 pounds;
8.1.8 is a contract for hire or rent, hire purchase, or purchase by way of
credit sale or periodical payment;
8.1.9 is an agreement for the supply of goods or services by a Material
Supplier;
8.1.10 is a guarantee, suretyship, indemnity or similar commitment (whether
secured or unsecured)
39
given by the Company;
8.1.11 is an agreement by which Company is a member of or party to a
partnership, joint venture or trade association;
8.1.12 is a debt factoring or discounting agreement.
8.2 STANDARD TERMS
Attached hereto as Exhibit H is a copy of the Company's standard terms of
trade
8.3 RELATED PARTY TRANSACTIONS
There are no contracts or transactions in effect between the Company and
any of the Vendors of their Associates and in particular there will at
Completion be no on going contracts or transactions between the Company and
Infomart Limited save, for the avoidance of doubt, for such product
licensing and other arrangements as may be agreed to after Completion. None
of the Vendors or their Associates has any interest in any assets or
property of the Company other than by virtue of their shareholdings in or
directorships of the Company. None of the Vendors or their Associates or
the Company has made any agreement or arrangement to make payments to any
employee of the Company contingent upon the execution of this agreement or
the consummation of the transactions contemplated hereby. None of the
Vendors or their Associates are under any liability or obligation to the
Company. Since the Balance Sheet Date the Company has not incurred any
liability or obligation to any of the Vendors or their Associates save for
amounts due in connection with their employment in the normal course of
business and, except in relation to such indebtedness to Infomart Limited
as referred to in clause 4.3.1.
8.4 NO CONFLICT
The execution and delivery of this agreement does not, and the consummation
of the transactions contemplated hereby will not, (a) violate or conflict
with any provision of the Articles of Association of the Company; (b)
violate, or be in conflict with, or constitute a default (or an event
which, with or without due notice or lapse of time, or both, would
constitute a default) under, or cause or permit the acceleration of the
maturity of or given rise to any right of termination, cancellation,
increase in obligations, imposition of fees or
40
penalties under, any material debt, note bond, indenture, mortgage, lien,
lease, license, instrument, contract, deed of trust, commitment or other
agreement to which Company is a party or by which Company is bound or any
of its properties or assets are subject; (c) result in the creation or
imposition of any Encumbrance upon any material properties or assets of
Company; or (d) violate or conflict with any law, rule, regulation or
Governmental Order to which Company, or the business, properties or assets
of Company, are bound or subject.
8.5 NO UNDISCLOSED LIABILITIES
Except for obligations incurred in the ordinary course of business which
are not required under GAAP to be set forth or reflected on a balance sheet
prepared in accordance with GAAP the Company does not have any Liability
which is not reflected in the Management Accounts. The terms "LIABILITIES"
and "LIABILITY" shall mean (i) any and all debts, liabilities and
obligations of any nature whatsoever, whether accrued or fixed, absolute or
contingent, mature or unmatured or determined or determinable, including
those arising under any contract, agreement, commitment or undertaking or
under any law, rule, regulation, Action (as defined below) or Governmental
Order (as defined below) and (ii) any other debt, liability or obligation
relating to or arising out of any act, omission, transaction, circumstance,
sale of goods or services, state of facts or other condition whether or not
known, due or payable. The term "ACTION" shall mean any claim, action,
suit, counterclaim, appeal, arbitration or inquiry, or any proceeding or
investigation by or before any Governmental Authority (as defined below).
The term "GOVERNMENTAL ORDER" shall mean any order, writ, rule, judgment,
injunction, decree, stipulation, determination or award entered by or with
any Governmental Authority. The term "GOVERNMENTAL AUTHORITY" shall mean
any national or local government, governmental authority, regulatory or
administrative agency, governmental commission, department, board, bureau,
agency, or instrumentality, court, tribunal, arbitrator or arbitral body.
8.6 RESTRICTIONS ON BUSINESS ACTIVITIES
There is no agreement, commitment, obligation or Governmental Order to
which Company is a party or by which Company is bound or any of its
properties or assets are subject which has or reasonably could be expected
to have the effect of prohibiting or materially impairing, as currently
conducted, any business activity or practice of Company or any acquisition
of property (tangible or intangible) by Company.
Part 9
OFFICERS AND EMPLOYEES
41
Attached hereto as Exhibit I is 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 and, if different, equivalent amounts per annum payable at
the Balance Sheet Date and a true, complete and accurate copy
(incorporating all the terms which currently apply) of all service
agreements, consultancy agreements and letters of engagement which have
been made with any employee or consultant of the Company. No director or
employee of the Company has given or received notice terminating his
employment and so far as the Vendors are aware the Company has no reason to
dismiss (nor does it wish to dismiss) any of its employees.
Part 10
INSURANCE
The Company is and has been at all material times fully 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 reinstatement value of such business, assets and
stock-in-trade) and nothing has been done or omitted to be done which could
make any policy of insurance void or voidable. Attached hereto as Exhibit J
is a copy 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).
Such policies have been renewed. 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.
Part 11
LITIGATION AND LEGAL PROCEEDINGS
11.1 DEFAULTS BY THE COMPANY
The Company is not, and since the Balance Sheet Date has not been, in
default under any agreement, deed, instrument, arrangement or covenant to
which it is a party or in respect of any other obligations or restrictions
binding upon it or liable in respect of any
42
representations or warranties (whether express or implied) or other matters
giving rise to a duty of care on the part of the Company or subject to any
Governmental Order and has not been party to any undertaking or assurance
given to any Governmental Authority which is still in force.
11.2 LITIGATION
There is no Action of any nature pending or to Company's knowledge
threatened against Company, its material properties or any of its officers
or directors, in their capacities as agents of the Company. There is no
investigation pending or, to Company's knowledge threatened against
Company, its material properties or any of its officers or directors, in
their capacities as agents of the Company, by or before any Governmental
Authority. No Governmental Authority has at any time challenged or
questioned in writing the legal right of the Company to conduct its
business or operations as presently or previously conducted or proposed to
be conducted. The Vendors and the Company do not know or have any reason to
know of any valid basis for any such type of Action or investigation.
/S/XXXXXXX XX XXXXXXX
-------------------------
XXXXXXX XX XXXXXXX
/S/XXXX XX XXXXXXX
-------------------------
XXXX XX XXXXXXX
/S/XXXXXXX XXXX XXXXX
-------------------------
XXXXXXX XXXX XXXXX
43
/s/ XXXXXXX XXXXX-XXXXX
-------------------------
XXXXXXX XXXXX- XXXXX
/s/ XXXXXXXX X XXXXX-XXXXX
-------------------------
XXXXXXXX XXXXX-XXXXX
/s/ XXX XXXXXXX
-------------------------
Signed by XXX XXXXXXX
President and Chief Executive Officer
For and on behalf of
SAGENT TECHNOLOGY, INC.
officer duly authorised
44
THIRD SCHEDULE
SAGENT TECHNOLOGY, INC.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("AGREEMENT") is made as of June 11,
1999, between Sagent Technology, Inc., a Delaware corporation ("SAGENT"), and
the shareholders (the "SHAREHOLDERS") of Sagent (UK) Limited listed on Exhibit A
hereto, pursuant to that certain Agreement, dated as of the date hereof among
Sagent and the Shareholders (the "ACQUISITION AGREEMENT").
2. 1. Definitions. As used in this Agreement:
(a) (a) "REGISTRABLE SECURITIES" means the Consideration Shares in Sagent
issued to the Shareholders pursuant to the Acquisition Agreement, which are
eligible for registration by Sagent.
(b) "SEC" means the Securities and Exchange Commission.
(c) "SECURITIES ACT" means the Securities Act of 1933, as amended.
Terms not otherwise defined herein have the meanings given to them in the
Acquisition Agreement.
(d) 2. NOTICE OF REGISTRATION
(e) If at any time or from time to time Sagent shall determine to register any
of its securities, either for its own account or the account of a security
holder or holders, other than (i) a registration relating solely to
employee benefit plans, or (ii) a registration relating solely to a
commission rule 145 transaction, Sagent will:
(f) (a) promptly give to each Shareholder written notice thereof; and
(g) (b) include in such registration (and any related qualification under
blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable
45
Securities specified in a written request or requests, made within 20
days after receipt of such written notice from Sagent, by any
Shareholder.
3. 3. UNDERWRITING
4. IF THE REGISTRATION OF WHICH SAGENT GIVES NOTICE IS FOR A REGISTERED PUBLIC
OFFERING INVOLVING AN UNDERWRITING, SAGENT SHALL SO ADVISE THE SHAREHOLDERS
AS A PART OF THE WRITTEN NOTICE GIVEN PURSUANT TO SECTION 1. IN SUCH EVENT
THE RIGHT OF ANY SHAREHOLDER TO REGISTRATION PURSUANT TO SECTION 1 SHALL BE
CONDITIONED UPON SUCH SHAREHOLDER'S PARTICIPATION IN SUCH UNDERWRITING AND
THE INCLUSION OF REGISTRABLE SECURITIES IN THE UNDERWRITING TO THE EXTENT
PROVIDED HEREIN. ALL SHAREHOLDERS PROPOSING TO DISTRIBUTE THEIR SECURITIES
THROUGH SUCH UNDERWRITING SHALL (TOGETHER WITH SAGENT AND THE OTHER HOLDERS
OF SAGENT SECURITIES DISTRIBUTING THEIR SECURITIES THROUGH SUCH
UNDERWRITING) ENTER INTO AN UNDERWRITING AGREEMENT IN CUSTOMARY FORM WITH
THE MANAGING UNDERWRITER SELECTED FOR SUCH UNDERWRITING BY SAGENT.
NOTWITHSTANDING ANY OTHER PROVISION OF THIS SECTION 3, IF THE MANAGING
UNDERWRITER DETERMINES THAT MARKETING FACTORS REQUIRE A LIMITATION OF THE
NUMBER OF SHARES TO BE UNDERWRITTEN, THE MANAGING UNDERWRITER MAY REDUCE
THE NUMBER OF REGISTRABLE SECURITIES TO BE INCLUDED IN SUCH REGISTRATION,
INCLUDING TO ZERO. SAGENT SHALL SO ADVISE ALL SHAREHOLDERS AND OTHER
HOLDERS DISTRIBUTING THEIR SECURITIES THROUGH SUCH UNDERWRITING AND THE
NUMBER OF SHARES OF REGISTRABLE SECURITIES THAT MAY BE INCLUDED IN THE
REGISTRATION AND UNDERWRITING SHALL BE ALLOCATED AMONG ALL SHAREHOLDERS AND
SUCH OTHER HOLDERS IN PROPORTION, AS NEARLY AS PRACTICABLE, TO THE
RESPECTIVE AMOUNTS OF REGISTRABLE SECURITIES HELD BY SUCH SHAREHOLDERS AND
SUCH OTHER HOLDERS AT THE TIME OF FILING THE REGISTRATION STATEMENT. TO
FACILITATE THE ALLOCATION OF SHARES IN ACCORDANCE WITH THE ABOVE
PROVISIONS, SAGENT MAY ROUND THE NUMBER OF SHARES ALLOCATED TO ANY
SHAREHOLDER OR HOLDER TO THE NEAREST 100 SHARES. IF ANY SHAREHOLDER OR
OTHER HOLDER DISAPPROVES OF THE TERMS OF ANY SUCH UNDERWRITING, HE MAY
ELECT TO WITHDRAW THEREFROM BY WRITTEN NOTICE TO SAGENT AND THE MANAGING
UNDERWRITER. ANY SECURITIES EXCLUDED OR WITHDRAWN FROM SUCH UNDERWRITING
SHALL BE WITHDRAWN FROM SUCH REGISTRATION, AND SHALL NOT BE TRANSFERRED IN
A PUBLIC DISTRIBUTION PRIOR TO 90 DAYS AFTER THE EFFECTIVE DATE OF THE
REGISTRATION STATEMENT RELATING THERETO, OR SUCH OTHER SHORTER PERIOD OF
TIME AS THE UNDERWRITERS MAY REQUIRE.
46
5. 4. RIGHT TO TERMINATE REGISTRATION
6. SAGENT SHALL HAVE THE RIGHT TO TERMINATE OR WITHDRAW ANY REGISTRATION
INITIATED BY IT PRIOR TO THE EFFECTIVENESS OF SUCH REGISTRATION WHETHER OR
NOT ANY SHAREHOLDER HAS ELECTED TO INCLUDE SECURITIES IN SUCH REGISTRATION.
7. 5. REGISTRATION PROCEDURES
8. IN THE CASE OF EACH REGISTRATION, QUALIFICATION OR COMPLIANCE EFFECTED BY
SAGENT PURSUANT TO THIS AGREEMENT, SAGENT WILL KEEP EACH SHAREHOLDER
ADVISED IN WRITING AS TO THE INITIATION OF EACH REGISTRATION, QUALIFICATION
AND COMPLIANCE AND AS TO THE COMPLETION THEREOF. AT ITS EXPENSE SAGENT
WILL:
(a) (a) Prepare and file with the Commission a registration statement
with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for at least one
hundred eighty (180) days or until the distribution described in the
Registration Statement has been completed;
(b) (b) Furnish to the Shareholders participating in such registration
and to the underwriters of the securities being registered such
reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such
underwriters may reasonably request in order to facilitate the public
offering of such securities.
(c) (c) Sagent shall pay the expenses incurred by Sagent in connection
with any registration of Registrable Securities pursuant to this
Agreement including all SEC, NASD and blue sky registration and filing
fees, printing expenses, transfer agents' and registrars' fees, and
the reasonable fees and disbursements of Sagent's outside counsel and
independent accountants. The Shareholders shall be responsible for all
commissions and transfer taxes, as well as any other expenses incurred
by the Shareholders.
9. 6. INDEMNIFICATION
10. IN THE EVENT OF ANY OFFERING REGISTERED PURSUANT TO THIS AGREEMENT:
47
(a) (a) Sagent will indemnify each Shareholder with respect to any
registration effected pursuant to this Agreement, against all
expenses, claims, losses, damages and liabilities (or actions in
respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, arising out of
or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any registration statement, or any
amendment or supplement thereto, or prospectus related thereto,
incident to any such registration, or based on any omission (or
alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances in which they are made, not misleading, or any
violation by Sagent of any rule or regulation promulgated under the
Securities Act, or state securities laws, or common law, applicable to
Sagent in connection with any such registration, and will reimburse
such Shareholder, for any legal and any other expenses reasonably
incurred in connection with investigating, preparing or defending any
such claim, loss, damage, liability or action, provided that Sagent
will not be liable in any such case (i) to the extent that any such
claim, loss, damage, liability or expense arises out of or is based in
any untrue statement or omission or alleged untrue statement or
omission, made in reliance upon and in conformity with written
information furnished to Sagent by an instrument duly executed by such
Shareholder and stated to be specifically for use therein or (ii) if a
copy of the final prospectus relating to any registration statement
(as then amended or supplemented if Sagent shall have furnished any
amendments or supplements thereto) (the "FINAL PROSPECTUS") was not
sent or given by or on behalf of such Shareholder to a purchaser of
the Shareholder's Registrable Securities, if required by law so to
have been delivered, at or prior to the written confirmation of the
sale of the Registrable Securities to such purchaser, and if the final
prospectus (as so amended or supplemented) would have cured the defect
giving rise to such loss, claim, damage or liability.
(b) (b) Each Shareholder will severally indemnify Sagent, each of its
directors and officers, each person who controls Sagent within the
meaning of Section 15 of the Securities Act, against all claims,
losses, damages and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged untrue
statement) or a material fact contained in any registration statement,
or any amendment or supplement thereto, or prospectus related thereto,
or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement or prospectus in
reliance upon and in conformity with written information furnished to
Sagent by an instrument duly executed by such Shareholder and stated
to be specifically for use therein and will reimburse Sagent, the
remaining Shareholders, such directors, officers, or control persons
for any legal or any other expenses reasonably incurred in connection
with investigating or defending any such claim, loss, damage,
liability or action, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged
omission) is
48
made in such registration statement or prospectus, in reliance upon
and in conformity with written information furnished to Sagent by an
instrument duly executed by such Shareholder and stated to be
specifically for use therein.
(c) (c) Each party entitled to indemnification under this Section 6 (the
"INDEMNIFIED Party") shall give notice to the party required to
provide indemnification (the "INDEMNIFYING PARTY") promptly after such
Indemnified Party has notice of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense
of any such claim or any litigation resulting therefrom, and the
Indemnified Party may participate in such defense at such party's
expense, and provided further that the failure of any Indemnified
Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement, except to
the extent, but only to the extent, that the Indemnifying Party's
ability to defend against such claim or litigation is impaired as a
result of such failure to give notice. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or
enter any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified
Party of a release from all liability in respect to such claim or
litigation. Whether or not the defense of any claim or action is
assumed by the Indemnifying Party, such Indemnifying Party will not be
subject to any liability for any settlement without its consent.
(d) (d) The obligations of Sagent and the Shareholders under this Section
6 shall survive the completion of any offering of stock in a
registration statement under this Agreement.
11. 7. NON-ASSIGNMENT OF REGISTRATION RIGHTS
12. THE RIGHTS TO CAUSE SAGENT TO REGISTER REGISTRABLE SECURITIES PURSUANT TO
THIS AGREEMENT MAY NOT BE ASSIGNED BY THE SHAREHOLDERS TO ANY PERSON OR
ENTITY; PROVIDED, HOWEVER, THAT UPON THE DEATH OF ANY SHAREHOLDER, THE
RIGHTS TO CAUSE SAGENT TO REGISTER REGISTRABLE SECURITIES PURSUANT TO THIS
AGREEMENT SHALL INURE TO SUCH SHAREHOLDER'S DEVISEE, LEGATEE OR OTHER
DESIGNEE; AND PROVIDED, FURTHER, THAT A SHAREHOLDER THAT IS A CORPORATION
MAY ASSIGN THE RIGHTS TO CAUSE SAGENT TO REGISTER REGISTRABLE SECURITIES
PURSUANT TO THIS AGREEMENT TO ANY WHOLLY OWNED SUBSIDIARY OF SUCH
SHAREHOLDER.
13. 8. AMENDMENT OF REGISTRATION RIGHTS
49
14. THIS AGREEMENT MAY BE AMENDED BY THE HOLDERS OF A MAJORITY OF THE
REGISTRABLE SECURITIES AND SAGENT AT ANY TIME BY EXECUTION OF AN INSTRUMENT
IN WRITING SIGNED ON BEHALF OF EACH OF THE PARTIES.
15. 9. TERMINATION
16. THE REGISTRATION RIGHTS SET FORTH IN THIS AGREEMENT SHALL TERMINATE AS TO
ANY SHAREHOLDER AT SUCH TIME AS ALL OF THE REGISTRABLE SECURITIES THEN HELD
BY SUCH SHAREHOLDER CAN BE SOLD BY SUCH SHAREHOLDER IN A SINGLE 3-MONTH
PERIOD IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT.
17. 10. GRANT OF ADDITIONAL REGISTRATION RIGHTS
18. THE SHAREHOLDERS ACKNOWLEDGE THAT SAGENT MAY ACQUIRE OTHER COMPANIES AND IN
THE COURSE OF SUCH ACQUISITIONS MAY GRANT THE EQUITY OWNERS THEREOF
REGISTRATION RIGHTS WITH RESPECT TO THEIR SHARES OF SAGENT ON TERMS WHICH
WOULD BE NEGOTIATED AT SUCH TIME AND MAY BE MATERIALLY DIFFERENT THAN THE
TERMS OF THIS AGREEMENT.
19. 11. NOTICES.
20. ALL NOTICES AND OTHER COMMUNICATIONS REQUIRED OR PERMITTED HEREUNDER SHALL
BE IN WRITING AND SHALL BE DEEMED EFFECTIVELY GIVEN UPON DELIVERY TO THE
PARTY TO BE NOTIFIED IN PERSON OR BY COURIER SERVICE OR FIVE DAYS AFTER
DEPOSIT WITH THE UNITED STATES MAIL, POSTAGE PREPAID, ADDRESSED (A) IF TO
THE SHAREHOLDERS, AT THE SHAREHOLDERS' ADDRESSES AS SET FORTH IN THE
SECURITIES REGISTER OF SAGENT AS THE CASE MAY BE OR (B) IF TO SAGENT AT 000
X. XX XXXXXX XXXX. XXXXXXXX XXXX, XXXXXXXXXX 00000, ATTENTION: PRESIDENT.
21. 12. GOVERNING LAW; INTERPRETATION.
22. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE AND GOVERNED FOR ALL
PURPOSES BY THE LAWS OF THE STATE OF
50
CALIFORNIA REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER
APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
23. 13. SEVERABILITY; SURVIVAL
24. IF ANY PORTION OF THIS AGREEMENT IS HELD BY A COURT OF COMPETENT
JURISDICTION TO CONFLICT WITH ANY FEDERAL, STATE OR LOCAL LAW, OR TO BE
OTHERWISE INVALID OR UNENFORCEABLE, SUCH PORTION OF THIS AGREEMENT SHALL BE
OF NO FORCE OR EFFECT, AND THIS AGREEMENT SHALL OTHERWISE REMAIN IN FULL
FORCE AND EFFECT AND BE CONSTRUED AS IF SUCH PORTION HAD NOT BEEN INCLUDED
IN THIS AGREEMENT.
25. 14. ENTIRE AGREEMENT
26. THIS AGREEMENT CONTAINS THE ENTIRE AGREEMENT AND UNDERSTANDING OF THE
PARTIES AND SUPERSEDES ALL PRIOR DISCUSSIONS, AGREEMENT AND UNDERSTANDINGS
RELATING TO THE SUBJECT MATTER HEREOF.
27. 15. COUNTERPARTS
28. THIS AGREEMENT MAY BE EXECUTED IN ONE OR MORE COUNTERPARTS, ALL OF WHICH
SHALL BE CONSIDERED ONE AND THE SAME AGREEMENT AND SHALL BECOME EFFECTIVE
WHEN ONE OR MORE COUNTERPARTS HAVE BEEN SIGNED BY EACH OF THE PARTIES AND
DELIVERED TO THE OTHER PARTY, IT BEING UNDERSTOOD THAT ALL PARTIES NEED NOT
SIGN THE SAME COUNTERPART.
51
IN WITNESS WHEREOF, Sagent and the Shareholders have caused this
Agreement to be executed as of the date first above written.
SAGENT TECHNOLOGY, INC.
By: /s/ XXX XXXXXXX
------------------------------------------
Name: XXX XXXXXXX
Title: President and Chief Executive Officer
SHAREHOLDERS
XXXX XX XXXXXXX
---------------------------------------------
Print Name
/s/ Xxxx Xx Xxxxxxx
---------------------------------------------
Signature
XXXXXXX XXXXX-XXXXX
---------------------------------------------
Print Name
/s/ Xxxxxxx Xxxxx-Xxxxx
---------------------------------------------
Signature
XXXXXXXX XXXXX-XXXXX
---------------------------------------------
Print Name
/s/ Xxxxxxxx X Xxxxx-Xxxxx
---------------------------------------------
Signature
XXXXXXX XXXXX
Print Name
/s/ Xxxxxxx Xxxxx
---------------------------------------------
Signature
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
52
EXHIBIT A
Shareholders of Sagent UK Limited.
Xxxx Xx Xxxxxxx
0 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx Xxxx
Xxxxxxxxxx
Xxxxxxxxx
XX0 0XX
Xxxxxxx Xxxx Xxxxx
00 Xxxxxxx Xxxx
Xxxxxxxx
Xxxxxx
XX0 0XX
Xxxxxxx Xxxxx-Xxxxx
Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxxxx
Xxxxxxxxxx
Xxxxx
XX00 0XX
Xxxxxxxx Xxxxx-Xxxxx
Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxxxx
Xxxxxxxxxx
Xxxxx
XX00 0XX
