EXHIBIT 10.19
CONFORMED COPY
31 OCTOBER 1994
SQL SYSTEMS INTERNATIONAL PLC
SQL SYSTEMS INTERNATIONAL BV
TSW (UK) LIMITED
THE SYSTEM WORKS, INC.
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AGREEMENT
FOR THE SALE AND PURCHASE OF
THE BUSINESS OF
SQL SYSTEMS INTERNATIONAL PLC
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FRESHFIELDS
THIS AGREEMENT is made on 31 October 1994+
BETWEEN:
(1) SQL SYSTEMS INTERNATIONAL PLC whose registered office is at Almners Priory,
Almners Road, Lyne, Chertsey, Surrey KT16 OBH (the VENDOR)
(2) SQL SYSTEMS INTERNATIONAL BV whose registered office is at Xxxxxxx 0, 0000
XX Xxxxx, Xxxxxxxxxxx (the PARENT COMPANY)
(3) TSW (UK) LIMITED whose registered office is at Rolls House, 7 Rolls
Building, Xxxxxx Xxxx, London EC4A INH (the PURCHASER)
(4) THE SYSTEM WORKS, INC whose registered office is at 0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx, Xxxxxxx 00000 (the PURCHASER PARENT COMPANY)
WHEREAS:
(A) The Vendor has agreed to sell the Business (as defined below) to the
Purchaser for the consideration and upon the terms set out in this Agreement.
(B) The Vendor has made representations to the Purchaser in the terms of the
undertakings and warranties set out in Schedule 2 with the intention that the
Purchaser should rely upon such representations in entering into this Agreement.
(C) The Parent Company has agreed, in consideration of the Purchaser entering
into this Agreement, to guarantee the performance by the Vendor of its
obligations hereunder upon the terms set out in clause 16 of this Agreement and
to dispose of to the Purchaser its interest in the Business IPR and the Rapier
IPR.
NOW IT IS AGREED as follows:
DEFINITIONS
1.1 In this Agreement unless the context otherwise requires:
ACCOUNTS DATE means 31 December 1993;
ADDITIONAL CONSIDERATION has the meaning attributed to it in clause 2.5;
ASSUMED CONTRACTS means the Contracts listed in Part C of Schedule 1;
ASSUMED LIABILITIES means the Liabilities listed in Part D of Schedule 1 and any
trade credit of the type assumed by the Purchaser which in the Purchaser's
reasonable opinion arose in the ordinary course of the Business relating to the
calendar quarter ending on the Transfer Date;
BUSINESS means the business carried on by the Vendor (including through its
interests in the Subsidiary in the development, licensing, maintenance, support
and sale of computer software);
BUSINESS ASSETS means all the undertaking and assets of the Vendor insofar as
they relate to the Business (other than the Excluded Assets);
BUSINESS CLAIMS means the benefit of all rights and claims of the Vendor arising
out of or in connection with the Business other than claims relating to
taxation;
BUSINESS DAY means a day (other than a Saturday) when banks are open for the
transaction of normal banking business in London.
BUSINESS IPR means all existing Intellectual Property Rights owned by the Vendor
or, to the extent of Intellectual Property Rights which are used in or relate to
or have been created for use in whole or in part in the Business, owned by the
Parent Company;
CLAIM means any claim for breach of a Warranty or for breach of the IP
Indemnity;
COMPLETION means completion of the sale and purchase of the Business in
accordance with clause 3;
CONTRACTS means all contracts, engagements, licences, guarantees and other
commitments relating to the Business (including Intellectual Property Licences
and any finance and/or equipment leases) which have been entered into or
undertaken by or on behalf of the Vendor in the course of the Business;
EMPLOYEES means the employees of the Vendor listed in Schedule 6;
EXCLUDED ASSETS means the assets excluded from the sale and purchase pursuant to
this Agreement, being those more specifically detailed in Part B of Schedule 1;
EXCLUDED LIABILITIES means all Liabilities other than those listed in Part D of
Schedule 1;
GOODWILL means the goodwill of the Vendor in relation to the Business together
with the exclusive right for the Purchaser to represent itself as carrying on
the Business in succession to the Vendor;
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HOLDING COMPANY AND SUBSIDIARY shall have the meanings attributed to them in
sections 736 and 736A of the Companies Xxx 0000;
INFORMATION TECHNOLOGY SYSTEMS means the computer and data processing systems
including all dedicated power supplies, printing facilities and network cabling
together with any bureau, disaster recovery or facilities management
arrangements relating thereto used in or relating to the Business;
INTELLECTUAL PROPERTY LICENCES means all existing agreements or arrangements
between the Vendor and the Parent Company and third parties insofar as they
relate to Intellectual Property Rights which are used in or relate to or have
been created for use in whole or in part in the Business;
INTELLECTUAL PROPERTY RIGHTS means patents, trade marks, service marks, trade
names, design rights, copyright (including rights in computer software and the
Proprietary Software and data bases), rights in know-how and other intellectual
property rights, in each case whether registered or unregistered and including
applications for the grant of any such rights and all rights or forms of
protection having equivalent or similar effect anywhere in the world;
IPR ASSIGNMENT means the assignment of all Intellectual Property Rights relating
to the Business including but not limited to the Business IPR in the agreed form
between the Vendor, the Parent Company, the Purchaser and the Purchaser Parent
Company;
IP INDEMNITY means the Indemnity contained in clause 10.5;
LIABILITIES means amounts owed by and liabilities (both ascertained and
contingent including future obligations under finance leases) of the Vendor in
connection with the Business existing at the Transfer Date or at any time
thereafter but excluding tax liabilities arising in respect of any profits
accruing or transactions or circumstances occurring up to the Transfer Date.
PLANT AND EQUIPMENT means all plant, machinery, motor vehicles, furniture, tools
and equipment owned by the Vendor and used in the Business (for the avoidance of
doubt, excluding for this purpose plant and machinery which are the subject of
finance and/or equipment leases and included in the term CONTRACTS);
PROPERTIES means the leasehold properties of the Vendor at Britannia Wharf,
Monument Road, Woking, Surrey described in Schedule 4;
PROPERTY WARRANTIES means the representations and warranties set out in Part B
of Schedule 2;
PROPRIETARY SOFTWARE means the computer software listed in the Disclosure Letter
and all computer software developed in the course of carrying on the Business or
used in connection with the Business and in respect of which any Intellectual
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Property Rights therein have been assigned to one or more members of the
Vendor's Group in writing.
PURCHASER'S GROUP means the Purchaser, any holding company of the Purchaser and
any subsidiary of the Purchaser or any such holding company from time to time;
RMS means Resource Management Systems Limited;
RMS/PARENT COMPANY INDEMNITY CLAIM means a claim by the Purchaser under clause
10.5 as a result of the use or possession of the Proprietary Software by the
Purchaser or any third party licensed to use or possess the Proprietary Software
by the Vendor, its Parent Company, the Purchaser or any of its successors in
title infringing or allegedly infringing any Intellectual Property Rights in the
Proprietary Software owned or held by RMS or the Parent Company or any of their
respective successors or predecessors in title;
RAPIER IPR means the computer software assigned to the Parent Company by
Resource Management Systems Limited on 28 November 1988 and all enhancements and
updates thereof belonging to the Parent Company;
REGISTERED RIGHTS means, in relation to any jurisdiction, any Intellectual
Property Rights which are the subject of registration (or application for
registration) with any competent authority in that jurisdiction;
SECURITY INTEREST means any security interest of any nature whatsoever
including, without limitation, any mortgage, charge, pledge, lien, assignment by
way of security or other encumbrance;
STAMP DUTY AGREEMENT means the stamp duty agreement in the agreed form between
the Vendor, the Parent Company, the Purchaser and the Purchaser Parent Company;
SUBSIDIARY means SQL Systems International Pty Limited, a company incorporated
in Australia details of which are set out in Part A of Schedule 1;
TAXES ACT means the Income and Corporation Taxes Xxx 0000;
TAX WARRANTIES means the representations and warranties set out in Part C of
Schedule 2;
TRADE XXXX ASSIGNMENT means the assignment of trade marks in the agreed form
between the Vendor and the Purchaser;
TRANSFER DATE means the date of Completion;
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VENDOR'S GROUP means the Vendor, any holding company from time to time of the
Vendor and any subsidiary from time to time of the Vendor or any such holding
company;
WARRANTIES means the representations and warranties set out in Schedule 2.
1.2 In this Agreement:
(a) references to PERSONS shall include individuals, bodies corporate (wherever
incorporated), incorporated associated and partnerships;
(b) the HEADINGS are inserted for convenience only and shall not affect the
construction of this Agreement;
(c) any reference to an ENACTMENT is a reference to it as from time to time
amended, consolidated or re-enacted (with or without modification) and
includes all instruments or orders made under such enactment;
(d) any statement qualified by the expression TO THE BEST KNOWLEDGE OF THE
VENDOR or SO FAR AS THE VENDOR IS AWARE or any similar expression shall be
deemed to include an additional statement that it has been made after due
and careful enquiry and shall be deemed to include the knowledge of each
director of the Vendor; any statement qualified by the expression to THE
ACTUAL KNOWLEDGE OF THE VENDOR shall be deemed to include an additional
statement that it has been made after no express enquiry and shall be
deemed to include the knowledge of Xxxx Xxxxx;
(e) any reference to a document IN THE AGREED FORM is to the form of the
relevant document agreed between the parties and for the purpose of
identification initialled by each of them or on their behalf (in each case
with such amendments as may be agreed by or on behalf of the Vendor and the
Purchaser);
(f) references to any English legal term for any action, remedy, method of
judicial proceeding, legal document, legal status, court, official or any
other legal concept shall, in respect of any jurisdiction other than
England, be deemed to include the legal concept which most nearly
approximates in that jurisdiction to the English legal term.
AGREEMENT TO SELL AND PRICE
2.1 The Vendor as beneficial owner shall sell and the Purchaser shall purchase
the Business as a going concern and with effect from the opening of business on
the Transfer Date, including the following Business Assets:
(a) (subject to the provisions of Schedule 4) the Properties;
(b) the Plant and Machinery;
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(c) the xxxxx cash, raw materials, stocks, work-in-progress and finished
products of the Business;
(d) the Business IPR;
(e) the benefit (subject to the burden) of all Assumed Contracts;
(f) the benefit of all Business Claims; and
(g) the Goodwill.
2.2 The Parent Company as beneficial owner shall sell and the Purchaser shall
purchase, with effect from the opening of business on the Transfer Date the
Rapier IPR and any other Business IPR owned by the Parent Company.
2.3 The Vendor shall sell and the Purchaser Parent Company shall purchase, with
effect from close of business on the Transfer Date the shares of the Vendor in
the Subsidiary (together with all rights attaching to them including any
dividend or other distribution declared or paid on or after the date hereof).
2.4 For the avoidance of doubt it is agreed that the said sale and purchase
shall not include and nothing in this Agreement shall operate to transfer the
Excluded Assets.
2.5 In consideration for the sale and transfer by the Vendor of the Business
Assets, the Purchaser shall:
(a) pay to the Vendor and the Parent company, subject always to clause 13.2,
additional consideration (the ADDITIONAL CONSIDERATION) in respect of the
Business IPR and Rapier IPR at the time and on the bases set out in
Schedule 5 such Additional Consideration to be payable as to 65% to the
Vendor and 35% to the Parent Company;
(b) assume responsibility for the satisfaction of all the Assumed Liabilities
(excluding any liabilities for which the Vendor is expressly to remain
liable under this Agreement) and the Purchaser shall indemnify the Vendor
against all proceedings, claims and demands in respect of such Liabilities;
(c) pay to the Vendor, as advance payments of Additional Consideration, L20,000
on or before the third day following Completion and L50,000 on 1 December
1994. The Purchaser shall be entitled to offset such advance payments
against any amounts of Additional Consideration payable after the date of
this Agreement as and when such amounts become due and to make the
appropriate deductions from such amounts.
2.6 The apportionment of the consideration referred to in clause 2.5 as between
the respective Business Assets shall be as set out in Schedule 5.
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2.7 In consideration for the sale and transfer by the Vendor of the shares in
the Subsidiary, the Purchaser Parent Company shall pay the Vendor the sum of
L43, the receipt of which is hereby acknowledged.
2.8 The Purchaser may, in its absolute discretion, within 14 days of Completion
elect to issue loan notes to the Vendor and/or the Parent Company in
satisfaction of all or part of the Additional Consideration on terms to be
mutually agreed between the Purchaser and/or the Vendor (as the case may be)
reflecting the calculation of payment terms set out in Schedule 3 (PROVIDED that
if the terms of the Loan Notes are not so mutually agreed within a further 7
days of such election, the election shall lapse).
COMPLETION
3.1 The sale and purchase shall be completed at Business Centre Schiphol,
Schiphol Airport, Amsterdam immediately after the signing of this Agreement when
the events detailed in the remainder of this clause 3 shall take place.
3.2 On Completion, the Vendor shall cause Messrs Xxxxxx Xxxxxx Xxxxxxxx and
Xxxxxx Xxxxxxx Xxxxxxxxxx to resign as directors of the Subsidiary and to be
delivered or made available to the Purchaser:
(a) such documents as the Purchaser may reasonably require to complete the sale
and purchase of the Business Assets (including, without limitation an
Assignment in respect of the Registered Rights in the form of the agreed
draft) together with all deeds and documents of title relating thereto;
(b) a letter from Barclays Bank plc confirming that its existing charge will be
released on discharge of amounts due.
(c) possession of the Property and of the other tangible Business Assets hereby
agreed to be sold including:
(i) all lists of customers, books of account and records relating to the
Business (but not those relating to the general affairs of the Vendor
or to any assets of the Vendor not being sold to the Purchaser save
that, insofar as such excluded lists, books and records shall relate
to the Business and be reasonably required by the Purchaser, the
Purchaser shall have the right to examine the same at all reasonable
times and to make copies thereof and to take extracts therefrom); and
(ii) all the designs and drawings, plans, manufacturing data, technical and
sales publications, advertising material and other technical and sales
matter of the Vendor in relation to the Business together with any
plates, blocks, negatives and other like material relating to the
Business;
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(d) share transfer forms (together with the relative share certificates) duly
executed by the Vendor and/or its nominees in favour of the Purchaser
Parent Company or its nominee in respect of the shares of the Vendor in the
Subsidiary;
(e) originals of the Deed of Confirmation and the Trade Xxxx Assignment duly
executed by the Vendor; and
(f) originals of the Stamp Duty Agreement and the IPR Assignment duly executed
by the Vendor and the Parent Company.
3.3 On Completion, the Purchaser shall cause to be delivered or made available
to the Vendor;
(a) counterpart originals of the Deed of Confirmation and the Trade Xxxx
Assignment duly executed by the Purchaser and the Purchaser Parent Company;
and
(b) counterpart originals of the IPR Assignment and the Stamp Duty Agreement
duly executed by the Vendor and the Parent Company.
3.4 On Completion the Purchaser shall procure that there shall be paid to
Barclays Bank plc (the BANK) sufficient funds to discharge the Vendor's
overdraft (including uncleared items) (up to an aggregate of L250,000 and any
additional amount drawn down to discharge what would have otherwise have been an
Assumed Liability) with the Bank and thereafter the Parties shall use their
reasonable endeavours to procure that the Bank will release its existing charge
over certain of the Business Assets and the Parent Company's guarantee and that
of Xxxxx CAD UK Limited of the liabilities of the Vendor to the Bank.
TITLE AND SUPPLEMENTARY PROVISIONS
4.1 Beneficial ownership and risk in respect of the Business Assets (other than
the Properties) shall pass to the Purchaser on Completion. Title to all
Business Assets which are capable of transfer by delivery shall pass on delivery
and such delivery shall be deemed to take place at the Properties on Completion.
Subject to the provisions of clauses 4.2 and 4.3, the Vendor shall be a trustee
for the Purchaser in respect of all the Business Assets until the same shall
have been actually delivered and/or, in the case of Business Assets not capable
of transfer by delivery, formally transferred or assigned to the Purchaser.
4.2 Insofar as the Business Assets comprise the benefit of Business Claims and
the benefit (subject to the burden) of Assumed Contracts which cannot
effectively be assigned or transferred by the Vendor to the Purchaser except by
agreements of novation or without obtaining a consent, an approval, a waiver or
the like from a third party (CONSENTS):
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(a) the Vendor shall (upon the request of the Purchaser) take all reasonable
steps to procure that such Assumed Contracts are novated or the necessary
Consents obtained and the Purchaser shall co-operate with the Vendor for
such purpose;
(b) unless or until any such Assumed Contract is so novated or assigned or any
necessary Consent is obtained, the Vendor shall receive and hold the
benefit of the relevant Assumed Contract or Business Claim as agent for the
Purchaser and shall accordingly pay to the Purchaser promptly upon receipt
any sums received by it under any such Assumed Contract or pursuant to any
such Business Claim;
(c) the Purchaser shall (at the Purchaser's cost) assist the Vendor to perform
all the obligations of the Vendor under any such Assumed Contracts and
indemnify the Vendor on an after-tax basis against all liability (and all
costs reasonably incurred by the Vendor) arising in connection with any
such Assumed Contracts;
(d) in the case of Intellectual Property Licences, the Vendor and the Purchaser
shall (where necessary) have discussions with a view to establishing by
mutual agreement (and the agreement of relevant third parties) the identity
of those Intellectual Property Licences where a sub-licence is to be
granted and/or those where a further licence is to be granted to the
Purchaser and/or those which are to be novated or otherwise assigned
(subject, where appropriate, to existing licences) to the Purchaser.
No effect shall, however, be given to sub-paragraphs (b) and (c) above if there
is a material risk that the relevant Assumed Contract would be treated as
repudiated by the third party or if the Vendor would be in breach of its
obligations to any third party under any such Assumed Contract if effect were
given thereto. If any necessary Consent is not obtained within six (6) months
after Completion or is refused and the procedure set out in this clause 4.2 does
not enable the full benefit of any Assumed Contract to be enjoyed by the
Purchaser after Completion, the parties shall use all reasonable endeavours to
achieve an alternative solution pursuant to which the Purchaser shall both
receive the full benefits of that Assumed Contract and assume the associated
obligations.
4.3 The Vendor shall with all due diligence execute such other documents and
take such other steps as may reasonably be required by the Purchaser to vest the
title to the Business Assets in the Purchaser and to give effect to this
Agreement. The Vendor hereby irrevocably, and by way of security for the
performance of its obligations under this Agreement, appoints the Purchaser as
its attorney to execute in its name and on its behalf all documents as may
reasonably be required by the Purchaser to vest the title to the Business Assets
in the Purchaser and in particular, but without limitation, to endorse in favour
of
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the Purchaser any cheques or bankers' drafts made out in favour of the Vendor
and received by the Purchaser.
PROPERTIES
5. The provisions of Schedule 4 shall apply to the assignment of the
Properties.
POST-COMPLETION UNDERTAKINGS
6. Following Completion, the Vendor undertakes to the Purchaser:
(a) to procure that, within 30 days after Completion, the name of the Vendor
and any other member of the Vendor's Group shall be changed so as to omit
the initials "SQL" or any confusingly similar initials or name and,
following such change or changes of name, the Vendor shall, and shall
procure that, all other members of the Vendor's Group, are not incorporated
with, or undergo a change of name to, a name that includes the initials
"SQL" or any confusing similar initials or name;
(b) to procure that, as soon as reasonably practicable after Completion and in
any event within 30 days afterwards, the Vendor's Group shall cease in any
manner whatsoever (including but not limited to use on or in connection
with:
(i) any completed goods or parts thereof held in stock by the Vendor to
which any such marks, names, designs or logos have already been
applied on or prior to the date of Completion or any goods of the type
manufactured by the Vendor and which relate to the Business;
(ii) any remaining stocks of labelling, packaging (including containers)
advertising material, brochures, catalogues or other items of sales
literature to which any such marks, names, designs or logos have
already been applied on or prior to the date of Completion; and
(iii)any signs currently in place on any building or property owned or used
by the Vendor in relation to the Business immediately prior to the
date of Completion and on any letterhead or item to which any such
marks, names, designs or logos have already been applied on or prior
to the date of Completion;)
to use to display any trade or service marks, trade or service names,
registered designs or logos used or intended to be used in relation to or
held by the Business or any confusingly similar xxxx, design, name or logo
(whether registered or unregistered).
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EMPLOYEES
7.1 The parties acknowledge and agree that the sale of the Business from the
Vendor to the Purchaser is a RELEVANT TRANSFER within the meaning of the
Transfer of Undertakings (Protection of Employment) Regulations 1981 (the
EMPLOYMENT REGULATIONS).
7.2 All amounts (other than amounts comprised in Assumed Liabilities) payable
to or in relation to the Employees by the Vendor, including but not limited to
wages and salaries, in respect of the period to the close of business on the
Transfer Date shall be discharged by the Vendor and the Vendor shall indemnity
the Purchaser against any costs, claims, liabilities and expenses arising out of
or in connection with such amounts. All necessary apportionments shall be made
to give effect to this clause.
7.3 The Vendor shall indemnity the Purchaser against any costs, claims,
liabilities and expenses which are attributable to any act or omission by the
Vendor prior to the close of business on the Transfer Date in respect of any of
the Vendor's obligations or duties (in either case, whether arising under common
law, statute, custom or otherwise) to or in relation to any of its employees or
former employees (including but not limited to any liability arising out of the
termination or dismissal of any employee or former employee) and which the
Purchaser may incur or suffer as a result of the Purchaser succeeding to the
Vendor pursuant to the Employment Regulations or otherwise howsoever in relation
to the contracts of employment of employees or former employees or any of them.
7.4 If any contract of employment of a person who is not an Employee (other
than Xxxx Xxxxxxx and Xxxxx Xxxxx) has effect as if originally made between the
Purchaser and such person, then:
(a) the Purchaser may, within 3 months of becoming aware of such contract
having effect as if originally made by the Purchaser, give notice to such
person to terminate such contract; and
(b) the Vendor shall indemnity the Purchaser from and against any costs,
claims, charges, expenses, demands or liabilities arising out of or in
connection with such termination and from and against any sums payable to
or in relation to such person under his contract of employment from
Completion to the date of such termination.
7.5 The Purchaser shall indemnity the Vendor from all liabilities, claims and
demands made against the Vendor arising from:
(a) any substantial change in the working conditions of the Employees or any of
them occurring on or after the Transfer Date; and
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(b) the change of employer occurring by virtue of the Employment Regulations
and this Agreement being significant and detrimental to any of the
Employees; and
(c) the employment by the Purchaser after Completion of any of the Employees
other than on terms at least as good as those set out in the Schedule of
Employees or otherwise detailed in the Disclosure Letter or the termination
of the employment of any of them after Completion; or
(d) any breach by the Purchaser after the opening of business on the Transfer
Date of any of the Purchaser's obligations or duties (in either case
whether arising under the Agreement, common law, statute, custom or
otherwise) to any of the Employees (including, but not limited to any
liability arising out of the termination or dismissal of any Employee).
VAT
8.1 The parties shall use all reasonable efforts to ensure that the transfer of
the Business and the Business Assets is treated as a transfer of a business as a
going concern for the purposes of section 49 of the Value Added Tax Xxx 0000 and
article 5 of The Value Added Tax (Special Provisions) Order 1992, including the
making by the Purchaser of any election to waive exemption that may be required
for this purpose. If it is not so treated, the Purchaser shall pay VAT pursuant
to a VAT invoice to be submitted by the Vendor.
8.2 The Vendor shall deliver to the Purchaser at Completion all the records of
the Business for value added tax purposes which are required by section 49(1)(b)
of the Value Added Tax Xxx 0000 to be preserved by the Purchaser.
8.3 In the event that H.M. Customs and Excise determine that Value Added Tax is
chargeable on the sale of the Business and Business Assets hereunder or any of
them then the Vendor shall immediately notify the Purchaser of such
determination and the Purchaser agrees to pay such Value Added Tax (against
receipt of a tax invoice in respect thereof) seven Business Days after the date
upon which the Purchaser obtains credit for or repayment of such Value Added
Tax.
8.4 All amounts payable under clause 2.5 shall be exclusive of Value Added Tax.
PRE-TRANSFER LIABILITIES
9.1 Nothing in this Agreement shall make the Purchaser assume any liability
for:
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(a) any indebtedness or other liability of the Vendor outstanding at the
opening of business on the Transfer Date other than Assumed
Liabilities or under the Assumed Contracts; or
(b) any breach of contract, negligence, breach of duty or other
circumstance giving rise to liability to any third party which is
attributable to any act, neglect or default of the Vendor in the
course of the Business prior to the close of business on the Transfer
Date other than Assumed Liabilities and under the Assumed Contracts,
and the Vendor shall indemnify and hold the Purchaser harmless against any
liability, other than Assumed Liabilities or under the Assumed Contracts, which
the Purchaser may incur in respect of any such indebtedness or liability or as a
result of any such act, neglect or default (and all costs reasonably incurred by
the Purchaser in connection therewith). The limitations set out in clause 13
shall not apply to any claim under the indemnity contained in this clause 9.
WARRANTIES
10.1 The Vendor represents and warrants to the Purchaser in terms of the
Warranties and acknowledges that the Purchaser has entered into this Agreement
in reliance upon the Warranties. The Warranties are subject to the matters
fairly disclosed in the Disclosure Letter.
10.2 The Vendor agrees to waive the benefit of all rights (if any) which
the Vendor may have against any Employee on whom the Vendor may have relied in
agreeing to any term of this Agreement or any statement set out in the
Disclosure Letter and the Vendor undertakes not to make any claim in respect of
such reliance.
10.3 Each of the Warranties shall be construed as a separate Warranty and
(save as expressly provided to the contrary) shall not be limited or restricted
by reference to or inference from the terms of any other Warranty or any other
term of this Agreement.
10.4 The rights and remedies of the Purchaser and the Vendor in respect of
this Agreement shall not be affected by (i) Completion, (ii) without prejudice
to the Vendor's rights under clause 18, any investigation made into the affairs
of the Vendor or the Business or any knowledge held or gained of any such
affairs by or on behalf of the Purchaser (except for matters fairly and
reasonably disclosed in the Disclosure Letter) or (iii) any event or matter
whatsoever, other than a specific and duly authorised written waiver or release
by the Purchaser.
10.5 The Vendor and its Parent Company shall fully indemnity and keep
indemnified the Purchaser against all claims, demands, actions, costs, expenses
(including but not limited to reasonable legal costs and disbursements on a
solicitor and client basis) losses and damages arising from or incurred by
reason of
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any infringement or alleged infringement (including but not limited to the
defence of such infringement or alleged infringement) of any Intellectual
Property Rights in the Proprietary Software by the use or possession of the
Proprietary Software by the Purchaser or any third party licensed to use or
possess the Proprietary Software by the Vendor, its Parent Company, the
Purchaser or any of its successors-in-title.
10.6 The Parent Company undertakes that it will not, prior to the second
anniversary of this Agreement, sell its shareholding in the Vendor or take any
steps to have the Vendor struck off the Register of Companies or to wind-up the
Vendor.
POST TRANSFER LIABILITIES
11. Except to the extent expressly provided otherwise nothing in this
Agreement shall make the Vendor liable for: --
(a) any indebtedness or other liability to the extent that it arises in
respect of the carrying on of the Business after the close of business
on the Transfer Date except where the same arises directly or
indirectly out of a breach of any of the Warranties; or
(b) any indebtedness or other liability in respect of the Assumed
Liabilities; or
(c) any breach of contract, negligence, breach of duty or other
circumstance giving rise to liability to any third party to the extent
that liability is in part thereof is attributable to any act neglect
or default of the Purchaser in the course of the Business after the
close of business on the Transfer Date;
and the Purchaser hereby undertakes to pay all debts and liabilities of and to
observe and perform all obligations relating to the Business except where the
same arises directly or indirectly out of a breach of any of the Warranties
incurred after the close of business on the Transfer Date or relating to the
Assumed Liabilities and the Purchaser shall indemnify and hold the Vendor
harmless against any liability which the Vendor may incur in respect of any such
indebtedness or liability or as a result of any such act neglect or default (and
all costs reasonably incurred by the Vendor in connection therewith).
TAX ON PAYMENTS
12. If any tax authority brings into charge to tax any sum paid to the
Purchaser in respect of any Claim or any sum paid to the Vendor pursuant to
Clause 10 (including in circumstances where any relief is available in respect
of such charge to tax), then the Vendor or, as the case may be, the Purchaser
shall pay such additional amount as shall be required to ensure that the total
amount paid, less the tax chargeable on such amount (or that would be so
chargeable but
Page 14
for such relief), is equal to the amount that would otherwise be payable under
the Claim.
LIMITATIONS ON CLAIMS
13.1 The Vendor shall not be liable for any Claim:
(a) unless it receives from the Purchaser written notice containing
details of the Claim including the Purchaser's estimate (on a without
prejudice basis) of the amount of such Claim on or before the second
anniversary of Completion; and
(b) unless the aggregate amount of the liability of the Vendor for all
Claims exceeds L25,000 (in which event the Purchaser shall be entitled
to claim the whole of the amount thereof and not merely the excess).
13.2 The aggregate amount of the liability of the Vendor for all Claims
shall not exceed the lesser of L2,000,000 and the amount of Additional
Consideration already paid to the Vendor at the time at which a Claim would
otherwise be payable hereunder (and not already repaid to the Purchaser under
this Clause 13.2) provided that the Purchaser shall be entitled to reduce the
amount of Additional Consideration subsequently payable by it by the amount of
any Claim for which the Vendor would, were it not for the limitations in this
Clause 13.2, be liable, subject to a maximum reduction of L2,000,000 less the
amount of any Claim actually paid by the Vendor to the Purchaser.
13.3 The figure of L2,000,000 in clause 13.2 will, in each place that it
occurs, be increased by the amount of any RMS/Parent Company Claim(s) for which
the Vendor is liable provided that it shall not be increased to above
L4,000,000.
13.4 The Vendor shall not be liable for any Claim in the case of a Claim in
respect of a breach of the Warranties, if and to the extent that the fact,
matter, event or circumstance giving rise to such Claim was fairly disclosed in
the Disclosure Letter.
13.5 If the Purchaser becomes aware that any claim has been made by a third
party after Completion which is likely to result in the Purchaser being entitled
to make a Claim against the Vendor in respect of a breach of any Warranty the
Purchaser shall give notice of such claim to the Vendor as soon as reasonably
practicable and if the Claim in question is as a result of or in connection with
a liability to or a claim by a third party the Purchaser if so required by the
Vendor by notice in writing shall make available to the Vendor or its advisers
all such information and access to such of its personnel as it may reasonably
require relating to any such liability or claim and to take such action to
avoid, dispute, resist, appeal, compromise or contest such liability or claim as
may be reasonably and properly requested by the Vendor but at the Vendor's
expense and provided
Page 15
that the Vendor shall indemnify the Purchaser against and in respect of the
costs and expenses of any such action.
13.6 Notwithstanding anything contained in this Agreement: --
(a) if, in respect of any matter which would give rise to a breach of any
of the Warranties, the Company or the Subsidiary would have been
entitled had the policies of insurance of the Business current at
Completion or policies providing equivalent cover thereto (together
THE COMPLETION POLICIES) been maintained in force, then unless
coverage equivalent to that comprised in the Completion Policies
cannot be obtained by the Purchaser at an equivalent premium for
periods after Completion the amount which could reasonably be expected
to have been received had the sale hereunder not occurred and had the
Completion Policies been maintained in force shall reduce pro tanto or
extinguish the Claim for a breach of the relevant Warranty;
(b) no Claim shall be made where such Claim would not have arisen but for
a voluntary act or transaction which could reasonably have been
avoided (other than to ensure compliance in contractual, legal or
regulatory obligations) carried out by the Purchaser (or persons
deriving title from it) after the date hereof otherwise than in the
ordinary course of business and which the Purchaser was aware could
give rise to a Claim;
(c) in the event of any Claim it shall be open to the Vendor to reduce the
amount of such Claim by the amount by which at the date of such Claim
the aggregate of the Assumed Liabilities has been discharged or
satisfied below the aggregate amount attributed thereto in Schedule 1
and any costs incurred in computing the amount of any such reduction
shall be borne by the Vendor;
(d) the Vendor shall not be liable in respect of any breach of the
Warranties if such breach would not have arisen but for a change in
legislation after the date hereof (whether relating to taxation or
otherwise) or the withdrawal of any extra-statutory concession
previously made by the Inland Revenue and whether or not such change
purports to be effective retrospectively in whole or in part.
RESTRICTIONS ON VENDOR
14.1 Neither the Parent Company nor the Vendor shall (whether alone or
jointly with another and whether directly or indirectly) carry on or be engaged
or (except as the owner for investment of securities dealt in on a stock
exchange and not exceeding 5 percent, in nominal value of the securities of that
class) be interested in any Competing Business during a period of 2 years after
Completion. For this purpose, COMPETING BUSINESS means a business which is
Page 16
carried on in competition with the Business wholly or partly within the area in
which the Business is carried on as at Completion.
14.2 The Parent Company and the Vendor shall not (and shall procure that
each other member of the Vendor's Group shall not) within a period of 1 year
after Completion, directly or indirectly, solicit or endeavour to entice away
from the Purchaser, or, without the consent of the Purchaser, offer employment
to or employ, or offer or conclude any contract for services with, any person
who was employed in skilled or managerial work in the Business at any time
during the 1 year prior to Completion.
14.3 Except so far as may be required by law and in such circumstances only
after prior consultation with the Purchaser, the Vendor shall not (and shall
procure that each other member of the Vendor's Group shall not) at any time
disclose to any person or use to the detriment of the Business any trade secret
or other confidential information of a technical character which it holds in
relation to the Business.
14.4 The Vendor acknowledges and agrees that the duration, extent and
application of the respective restrictions in clauses 14.1, 14.2 and 14.3 are no
greater than is reasonable and necessary for the protection of the interests of
the Purchaser but that, if any such restriction shall be adjudged by any court
of competent jurisdiction to be void or unenforceable but would be valid if part
of the wording thereof was deleted and/or the period thereof was reduced and/or
the area dealt with thereby was reduced, the said restriction shall apply within
the jurisdiction of that court with such modifications as nay be necessary to
make it valid and effective.
AVAILABILITY OF INFORMATION
15. The Vendor and the Purchaser shall make available to the other free of
charge upon written request all information which the other may reasonably
require relating to the Business and the Business Assets.
PARENT COMPANY GUARANTEE
16.1 In consideration of the Purchaser entering into and acting in
accordance with this Agreement, the Parent Company (as principal obligor and not
merely as a surety) unconditionally and irrevocably guarantees as a continuing
obligation the proper and punctual performance by the Vendor of all its
obligations under or pursuant to this Agreement.
16.2 The Parent Company's liability hereunder shall not be discharged or
impaired by any act or omission or any other events or circumstances whatsoever
(whether or not known to the Vendor, the Purchaser or the Parent Company) which
would or might (but for this clause) operate to impair or
Page 17
discharge the Parent Company's liability hereunder including, but without
limitation:
(a) any release of, or granting of time (or any other indulgence) to, the
Vendor or any other person; or
(b) the existence, validity, taking or renewal of any other security,
right or remedy taken by the Purchaser in relation to this Agreement
or any enforcement of, neglect to perfect, failure to enforce or
release or waiver any such security, right or remedy; or
(c) any amendment to or variation of this Agreement or any security
relating thereto or any assignment of this guarantee or any such
security; or
(d) any legal limitation, disability, incapacity or other circumstance
relating to the Vendor, the Purchaser, the Parent Company or any other
person; or
(e) any change in the name or constitution of the Parent Company (or its
successors or assigns) or its absorption by or amalgamation with any
other undertaking; or
(f) any irregularity, unenforceability or invalidity of any obligation of
the Vendor, the Purchaser or any other person under or pursuant to
this Agreement so that the obligations of the Parent Company hereunder
will remain in full force and effect and this guarantee will be
construed accordingly as if there were no such irregularity,
unenforceability or invalidity.
16.3 This guarantee is a continuing guarantee and will remain in full force
and effect until the obligations and liabilities of the Vendor under or arising
out of (or in connection with) this Agreement have been fully performed or
discharged.
16.4 Any release, compromise or discharge of the obligations of the Parent
Company shall be deemed to be made subject to the condition that it will be void
if any payment or security which may be or has been received by the Purchaser is
set aside or proves invalid for whatever reason.
16.5 As a separate, continuing and primary obligation, the Parent Company
undertakes to indemnify the Purchaser on demand against all losses, claims or
costs suffered or incurred by the Purchaser while acting in good faith should
any amounts which would otherwise be due under this Agreement not be recoverable
for any reason whatsoever including (but not limited to) the Agreement being or
becoming void, voidable or unenforceable.
16.6 The Parent Company hereby waives any right it may have of first
requiring the Purchaser to proceed against, or enforce any right against, the
Vendor or any other person and, until all obligations and liabilities of the
Page 18
Vendor have been performed or discharged in full, the Parent Company shall not:
(a) be entitled to, and shall not, claim in competition with the Vendor in
any liquidation, administration, receivership (including
administrative receivership) or winding-up or as part of any
composition of creditors or scheme of arrangement in relation to the
Vendor or any part of its assets; or
(b) claim, receive or have the benefit of any payment or distribution
from, or on account of, the Vendor or exercise any counterclaim, right
of set-off or lien against the Vendor or claim the benefit of any
security held by the Vendor so that the Vendor shall be entitled to
apply any such security as it considers fit; or
(c) exercise any other right or remedy in respect of any amount paid by
the Parent Company pursuant to this guarantee.
16.7 Any amount payable hereunder shall be paid in full without any
deduction or withholding whatsoever (whether in respect of set-off,
counterclaim, duties, charges, taxes or otherwise) unless such deduction or
withholding is required by law, in which event the Parent Company shall pay to
the Purchaser an additional amount so that the net amount received by the
Purchaser will equal the full amount which the Purchaser would have received had
no such deduction or withholding been made.
PURCHASER PARENT COMPANY GUARANTEE
17.1 In consideration of the Vendor entering into and acting in accordance
with this Agreement, the Purchaser Parent Company (as principal obligor and not
merely as a surety) unconditionally and irrevocably guarantees as a continuing
obligation the proper and punctual performance by the Purchaser of all its
obligations under or pursuant to this Agreement.
17.2 The Purchaser Parent Company's liability hereunder shall not be
discharged or impaired by any act or omission or any other events or
circumstances whatsoever (whether or not known to the Vendor, the Purchaser, the
Parent Company or the Purchaser Parent Company) which would or might but for
this clause) operate to impair or discharge the Purchaser Parent Company's
liability hereunder including, but without limitation:
(a) any release of, or granting of time (or any other indulgence) to, the
Purchaser or any other person; or
(b) the existence, validity, taking or renewal of any other security,
right or remedy taken by the Vendor in relation to this Agreement or
any enforcement of, neglect to perfect, failure to enforce or release
or waiver any such security, right or remedy; or
Page 19
(c) any amendment to or variation of this Agreement or any security
relating thereto or any assignment of this guarantee or any such
security; or
(d) any legal limitation, disability, incapacity or other circumstance
relating to the Vendor, the Purchaser, the Parent Company, the
Purchaser Parent Company or any other person; or
(e) any change in the name or constitution of the Purchaser Parent Company
(or its successors or assigns) or its absorption by or amalgamation
with any other undertaking; or
(f) any irregularity, unenforceability or invalidity of any obligation of
the Vendor, the Purchaser or any other person under or pursuant to
this Agreement so that the obligations of the Purchaser Parent Company
hereunder will remain in full force and effect and this guarantee will
be construed accordingly as if there were no such irregularity,
unenforceability or invalidity.
17.3 This guarantee is a continuing guarantee and will remain in full force
and effect until the obligations and liabilities of the Purchaser under or
arising out of (or in connection with) this Agreement have been fully performed
or discharged.
17.4 Any release, compromise or discharge of the obligations of the
Purchaser Parent Company shall be deemed to be made subject to the condition
that it will be void if any payment or security which may be or has been
received by the Vendor is set aside or proves invalid for whatever reason.
17.5 As a separate, continuing and primary obligation, the Purchaser Parent
Company undertakes to indemnify the Vendor on demand against all losses, claims
or costs suffered or incurred by the Vendor while acting in good faith should
any amounts which would otherwise be due under this Agreement not be recoverable
for any reason whatsoever including (but not limited to) the Agreement being or
becoming void, voidable or unenforceable.
17.6 The Purchaser Parent Company hereby waives any right it may have of
first requiring the Vendor to proceed against, or enforce any right against, the
Purchaser or any other person and, until all obligations and liabilities of the
Purchaser have been performed or discharged in full, the Purchaser Parent
Company shall not:
(a) be entitled to, and shall not, claim in competition with the Vendor in
any liquidation, administration, receivership (including
administrative receivership) or winding-up or as part of any
composition of creditors or scheme of arrangement in relation to the
Purchaser or any part of its assets; or
Page 20
(b) claim, receive or have the benefit of any payment or distribution
from, or on account of, the Purchaser or exercise any counterclaim,
right of set-off or lien against the Purchaser or claim the benefit of
any security held by the Purchaser so that the Purchaser shall be
entitled to apply any such security as it considers fit; or
(c) exercise any other right or remedy in respect of any amount paid by
the Purchaser Parent Company pursuant to this guarantee.
17.7 Any amount payable hereunder shall be paid in full without any
deduction or withholding whatsoever (whether in respect of set-off,
counterclaim, duties, charges, taxes or otherwise) unless such deduction or
withholding is required by law, in which event the Purchaser Parent Company
shall pay to the Vendor an additional amount so that the net amount received by
the Vendor will equal the full amount which the Purchaser would have received
had no such deduction or withholding been made.
PURCHASER'S WARRANTY
18. The Purchaser warrants that at the time of entering into this
Agreement, having carefully considered the information provided to it by the
Vendor in the course of the negotiations leading up to this Agreement and having
carefully considered the Warranties, it has no knowledge of any breach of any of
the Warranties. For the purposes of this clause, the Purchaser shall not be
deemed to have drawn the conclusion that particular facts known to it constitute
a breach of any Warranty unless it has actually drawn that conclusion. The
Purchaser further warrants that it has no current intention of making a Claim on
the basis of information known to it at the date hereof.
ENTIRE AGREEMENT
19. This Agreement sets out the entire agreement and understanding between
the parties in respect of the sale and purchase of the Business. This Agreement
supersedes the Letter of Intent dated 19 October, 1994 which shall cease to have
any further force or effect and no party has entered into this Agreement in
reliance upon any representation, warranty or undertaking of any other party
which is not set out or referred to in this Agreement.
ANNOUNCEMENTS
20. No announcement or circular in connection with the existence or the
subject matter of this Agreement shall be made or issued by or on behalf of the
Vendor or the Purchaser without the prior written approval of the other (such
approval not to be unreasonably withheld or delayed) during any period prior to
or within three (3) months after Completion. This shall not affect any
announcement or circular required by law or the rules of any stock exchange.
Page 21
COSTS
21. Each of the parties shall pay its own Costs incurred in connection
with the negotiation, preparation and implementation of this Agreement.
INVALIDITY
22. If any provision of this Agreement is held to be invalid or
unenforceable, then such provision shall (so far as it is invalid or
unenforceable) be given no effect and shall be deemed not to be included in this
Agreement but without invalidating any of the remaining provisions of this
Agreement.
COUNTERPARTS
23. This Agreement may be entered into in any number of counterparts and
by the parties to it on separate counterparts, each of which, when executed and
delivered, shall be an original, but all the counterparts shall together
constitute one and the same instrument.
RESTRICTIVE TRADE PRACTICES ACT
24. No provision of this Agreement (or of any agreement or arrangement of
which this Agreement forms part) by virtue of which this Agreement (or the
agreement or arrangement of which it forms part) is subject to registration
under the Restrictive Trade Practices Act 1976 shall take effect until the day
after particulars of this Agreement (or of the agreement or arrangement of which
it forms part) shall have been delivered to the Director General of Fair Trading
pursuant to section 24 of the Act.
FURTHER ASSURANCE
25.1 The Vendor shall do or procure to be done all such further acts and
things, and execute or procure the execution of all such other documents, as the
Purchaser may from time to time reasonably require, whether on or after
Completion, for the purpose of giving to the Purchaser the full benefit of all
of the provisions of this Agreement.
25.2 The Vendor and Parent shall, on being notified by the Purchaser, join
into an election with the Purchaser under section 531(3) of the Income and
Corporation Taxes Xxx 0000.
NOTICES
26.1 Any notice or other communication to be given under this Agreement
shall be in writing and signed by or on behalf of the party giving it and may be
served by leaving it or sending it by (i) fax, or (ii) prepaid recorded delivery
or registered post and fax to the address and for the attention of the relevant
party
Page 22
set out in clause 26.2 (or as otherwise notified from time to time hereunder).
Any notice so served by fax or post shall be deemed to have been received:
(a) in the case of fax, twelve (12) hours after the time of despatch;
(b) in the case of recorded delivery or registered post, forty eight (48)
hours from the date of posting.
26.2 The addresses for the parties for the purposes of clause 26.1 are as
follows:
VENDOR:
Address: Almners Priory, Almners Road, Lyne,
Chertsey, Surrey KT16 OBH
For the attention of: D. Chapchal
Fax: 0932 570 474
PURCHASER:
Address: 0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000 X.X.X.
For the attention of: X. Xxxxxxxx
Fax: 000 000 0000
PARENT COMPANY:
Address: Europoint 10, Marconistraat 029
AK Rotterdam
For the attention of: D. Chapchal
Fax: 31 1820 72888
PURCHASER PARENT COMPANY:
Address: 0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000 X.X.X.
For the attention of: X. Xxxxxxxx
Fax: 04 989 4461
Page 23
26.3 In proving such service it shall be sufficient to prove that the
envelope containing such notice was properly addressed and delivered either to
the address shown thereon or into the custody of the postal authorities as a
pre-paid recorded delivery or registered post letter, or that the facsimile
transmission was made after obtaining in person or by telephone appropriate
evidence of the capacity of the addressee to receive the same, as the case may
be.
NON-ASSIGNMENT
27. None of the parties shall, without the consent of the other, be
entitled to assign the benefit or burden of this Agreement in whole or in part
provided that the Vendor and the Parent Company may assign their respective
rights to receive the Additional Consideration in whole or in part at the
discretion of the Vendor or the Parent Company (as the case may be), but any
such assignment shall take effect subject to all the rights of the Purchaser and
the Purchaser Parent Company against the Vendor and the Parent Company.
VARIATION
28. No variation of any of the terms of this Agreement (or of any other
documents referred to herein) shall be valid unless it is in writing and signed
by or on behalf of each of the parties hereto. The expression "variation" shall
include any variation, supplement, election or replacement however effected.
WAIVER
29.1 Any delay by the Purchaser in exercising, or failure to exercise, any
right or remedy under this Agreement shall not constitute a waiver of the right
or remedy or a waiver of any other rights or remedies and no single or partial
exercise of any rights or remedy under this agreement or otherwise shall prevent
any further exercise of the right or remedy or the exercise of any other right
or remedy.
29.2 The rights and remedies of the Purchaser under this Agreement are
cumulative and not exclusive of any rights or remedies provided by law.
GOVERNING LAW AND JURISDICTION
30.1 This Agreement shall be governed by and construed in accordance with
the laws of England.
30.2 This Agreement shall be binding upon each of the parties hereto and
its of his assigns, successor in title or legal personal representatives as the
case may be.
30.3 Each of the parties hereby irrevocably submits to the non-exclusive
jurisdiction of the courts of England. Each of the parties with an address
outside England hereby appoints and agrees at all times to maintain an
authorised agent
Page 24
to receive service of process in England on its behalf. Such agent shall be
initially the Company Secretary of the Purchaser for the Purchaser Parent
Company and the Company Secretary of the Vendor for the Parent Company and each
of such parties hereby agrees not to revoke the authority of their respective
agents without first appointing a successor agent in England and notifying the
other parties to this Agreement of such change of agent.
AS WITNESS Agreement has been signed by or on behalf of the parties the day and
year first before written.
Page 25
SIGNED by D. R. CHAPCHAL )
for and on behalf of SQL SYSTEMS ) /s/ D.R.CHAPCHAL
INTERNATIONAL PLC )
SIGNED by D. R. CHAPCHAL )
for and on behalf of SQL SYSTEMS ) /s/ D.R.CHAPCHAL
INTERNATIONAL BV )
SIGNED by XXXXX XXXXXXXX )
for and on behalf of TSW (UK) ) /s/ X. XXXXXXXX
LIMITED )
SIGNED by XXXXX XXXXXXXX )
for and on behalf of THE SYSTEM ) /s/ X. XXXXXXXX
WORKS, INC )
