Exhibit 2.2
DATED 25TH AUGUST 1998
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QUEST SOFTWARE LIMITED
AND
QUEST SOFTWARE (SCOTLAND) LIMITED
AND
IBIS SYSTEMS LIMITED
AND
▇▇▇▇▇ ▇▇▇▇▇▇
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AGREEMENT FOR SALE OF BUSINESS
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▇▇▇▇▇ And Company
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇-▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Tel: ▇▇▇▇ ▇▇▇ ▇▇▇▇
Fax: ▇▇▇▇ ▇▇▇ ▇▇▇▇
Dx: 51632 Covent Garden
E-mail ▇▇▇▇▇@▇▇▇▇.▇▇▇▇▇.▇▇▇
REF: MJA/VHT/I5.31
JULY 1998
AGREEMENT FOR SALE OF BUSINESS
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DATE: 25TH AUGUST 1998
PARTIES:
1. "The Vendor" Quest Software Limited registered in England and Wales
under registration no: 2526420 whose registered office is at 5 The
Windmills ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ and Quest Software
(Scotland) Limited registered in England and Wales under registration
number 3408121 whose registered office is at 5 The Windmills as
aforesaid
2. "The Purchaser" Ibis Systems Limited (registered no: 3410598) whose
registered office is at ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Inn, Cressex, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
3. "The Guarantor" ▇▇▇▇▇ ▇▇▇▇▇▇ of 5 Appleton View East Tisted Alton Hants
GU34 3QG
OPERATIVE PROVISIONS:
1. INTERPRETATION
1.1. In this agreement the following words and expressions have the
following meanings, unless they are inconsistent with the context:
"Accounts Date" means the 31st December 1996
"Agents" means the persons whose details are set out in Schedule 4
who, at the Effective Time are engaged by the Vendor in
relation to the Business pursuant to various Agency
Agreements referred to in the Disclosure Letter
"Assets" means the property, assets and rights of the Business to be
purchased by the Purchaser as described in clause 2.1
"Book Debts" means the trade debts owed to the Vendor at the Effective
Time in connection with the Business
"Business" means the business of selling computer software and hardware
and providing telephone support for the computer software and
hardware to customers as carried on by the Vendor up to the
Effective Time
"Cash Float" means any cash in hand for the purpose of reimbursing
out-of-pocket expenses in connection with the Business and
any cash balances held at the Vendor's bank at the Effective
Time
"Completion" means the completion of the sale and purchase of the Assets
in accordance with clause 4
"Computer Equipment" means the equipment listed in Part I of Schedule I
"Computer Software" means that computer software written by the Vendor listed in
Part II of Schedule I together with the following relating to
such software (a) all copies of the source code (b) the
programmer's notes as to the design of the code and the steps
taken to supplement functions of the programs (c) logic
manuals and flow charts and user manuals and (d) original
specification and design objectives
"Contracts" means all current contracts and engagements entered into or
orders made prior to the Effective Time by or on behalf of
the Vendor in each case which remain (in whole or in part) to
be performed at or after the Effective Time as the same are
set out or referred to in Part III of Schedule I and shall
include the benefit of any causes of action against the other
contracting party to such Contracts arising under such
Contracts other than the Book Debts which shall have accrued
prior to the Effective Time
"Creditors" means the aggregate amount owed by the Vendor in connection
with the Business to or in respect of trade creditors and
accrued charges as recorded in the books of account of the
Business as at the Effective Time but not including
liabilities for value added tax or taxation on profits or
chargeable gains
"Customer List" means the record of names addresses and contact details of
all current customers of the Business as the same are set out
or referred to in Part IV of Schedule I and of all prior
customers of the Business or any part thereof of which the
Vendor has records and whether stored electronically or in
documentary or other form and including such software access
or pass codes as are required to enable such information to
be read and utilised
"Disclosures" means the disclosures set out in a disclosure letter of
today's date from the Vendor to the Purchaser relating to the
warranties set out in this agreement and the Schedules
"Effective Time" means the close of business on 31st July 1998
"Employees" means the persons whose details are set out in Schedule 4
who, at the Effective Time, are employed by the Vendor and
whose duties relate to the Business
"Excluded Assets" means those assets listed in Schedule 2 being assets which
are not to be transferred to the Purchaser
"Goodwill" means the goodwill of the Vendor in relation to the Business
and attaching to the Intellectual Property Rights and the
Contracts, together with the exclusive right for the
Purchaser or its assignee to represent itself as carrying on
the Business in succession to the Vendor, and the irrevocable
and exclusive right to use all trade names logos and designs
used by the Vendor in relation to the Business at the
Effective Time
"Information" means all information owned by the Vendor or which the Vendor
is entitled to use and pass to the Purchaser and which (in
either case) is reasonably required for the operation of the
Business including information relating to the supply of work
and materials to the Business, to the marketing of any
products or services supplied by the Business including (to
the extent they exist) sales targets, sales statistics,
marketing surveys and reports, marketing research, all
training manuals and other materials relating to training of
Customers or Employees on computer software products, any
advertising or other promotional materials and all records
and the database relating to modifications to software
carried out for customers of the Business
"Intellectual Property
Rights" means all intellectual property rights owned by the Vendor
and used in or for the purpose of the Business including
service marks, trade marks, registered designs and copyrights
in any part of the world whether registered or unregistered
and including all applications and rights to register the
same and the copyright in all drawings, plans,
specifications, designs and computer software and all
know-how and confidential information, the registered rights
being as listed in Part V of Schedule 1
"The Lease" means the lease of the Premises dated 2nd December 1996 made
between ▇ ▇ ▇▇▇▇▇▇, E ▇▇▇▇▇▇ and S C ▇▇▇▇▇▇ (1) and the
Vendor (2) as amended by a Deed of Variation between the
parties dated 24TH AUGUST 1998
"Liabilities" means the liabilities of the Business (other than the
Creditors) outstanding at the Effective Time
"Licensed Software"means all software licensed by third parties which is used in
the Business as the same is listed in Part VII of Schedule 1
"Office Equipment" means all the office furniture and other equipment used by
the Vendor in the Business as set out in Part VIII of
Schedule 1
"Planning Acts" means as defined in the Town and Country Planning Act 1990
s336
"Premises" means the premises comprised within the Lease and known as ▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
"Principal Accounts" means the audited balance sheet as at the Accounts Date
audited profit and loss account for the year ended on the
Accounts Date of the Vendor, including the directors' report
and notes
"Purchaser's Solicitors" means ▇▇▇▇▇ and Company of ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇-▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (Tel: ▇▇▇▇ ▇▇▇ ▇▇▇▇
ref: MJA)
"Regulations" means the Transfer of Undertakings (Protection of Employment)
Regulations 1981
"Vendor's Solicitors" means Penningtons of ▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ (ref: MF)
"Stocks" means the stocks including raw materials and finished goods
owned by the Vendor at the Effective Time for the purposes of
or in connection with the Business including those which,
although subject to reservation of title by the Sellers, are
under the control of the Vendor
"Warranties" means the warranties and undertakings of the Vendor contained
in this agreement and the Schedules
"Warranty Claim" means any claim made by the Purchaser for breach of any of
the Warranties
"Work in Progress" means the value of any work carried out in the Business by
the Vendor which has not been invoiced to customers as at the
Effective Time
1.2 all references to statutory provisions shall be construed as including
references to:
1.2.1 any statutory modification, consolidation or re-enactment;
1.2.2 all statutory instruments or orders made pursuant to it;
1.2.3 any statutory provisions of which it is a modification,
consolidation or re-enactment;
in each case made or enacted at or before the Effective Time
1.3 except where the context otherwise requires, words denoting the
singular include the plural and vice versa; words denoting any gender
include all genders; words denoting persons include firms and
corporations and vice versa;
1.4 unless otherwise stated, a reference to a clause, sub-clause or
Schedule is a reference to a clause or a sub-clause of, or a Schedule
to, this agreement;
1.5 clause headings are for ease of reference only and do not affect the
construction of this agreement.
1.6 1.6.1 The liabilities of the two companies comprised within the
definition "Vendor" shall be joint and several
1.6.2 Any reference to any right or asset of whatever nature or to
any liability or obligation of whatever nature of the Vendor
shall be a reference to any right or asset or liability or
obligation (as the case may be) of that one of the two
companies comprised within the definition "the Vendor" as shall
be appropriate to the case.
2. AGREEMENT FOR SALE
2.1 Subject to the terms and conditions of this agreement, the Vendor shall
sell to the Purchaser with full title guarantee and the Purchaser
relying on the Warranties and the indemnities contained in clauses 6.4,
6.6 and 7.2 shall purchase with effect from the Effective Time:
2.1.1 the Business as a going concern; and
2.1.2 all the following assets and rights owned by the Vendor and
used in the conduct of the Business or which are used in the
Business and are under the control of the Vendor pursuant to
any contract and by that contract will vest in the Vendor
subject only to payment of any unpaid monies due to any party:-
(a) the Goodwill;
(b) the Customer List;
(c) the Computer Equipment;
(d) the Computer Software;
(e) the Office Equipment;
(f) the Work in Progress;
(g) the benefits (subject to the burdens as provided under clauses 7.1 and
7.2) of the Contracts;
(h) the Intellectual Property Rights;
(i) the Information;
(j) the Stocks;
(k) (to the extent transferable) all the rights of the Vendor against
suppliers and third parties with respect to materials merchandise or
services purchased by the Vendor from them in connection with the
Business including without limitation all rights whether accrued or not
at the Effective Time that the Vendor has or may have arising under AN
AGREEMENT DATED 17TH MAY 1996 MADE BETWEEN THE DEVELOPMENT CENTRE
LIMITED (1) THE VENDOR (2) AND SIMON ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (3)
but not for the avoidance of doubt) the Excluded Assets
2.2 Title to and risk in the Assets shall vest in the Purchaser at the
Effective Time with title having passed to the Purchaser as regards
those assets in item 2.1.2(a), (f), (g), (h) and (k) by virtue of this
agreement and as regards those assets in 2.1.2 (b), (c), (d), (e), (i)
and (j) by virtue of the delivery of the same into the possession of
the Purchaser. To the extent not delivered, assets shall be held on
trust by the Vendor for the Purchaser absolutely.
2.3 The Vendor shall be deemed to have carried on the Business from the
Effective Time until Completion in all respects as the agent of the
Purchaser. All profits and losses of the Business during that period
shall be for the account of the Purchaser, and the Purchaser shall
fully and effectively indemnify the Vendor against any losses sustained
during that period and against all other actions, claims, costs,
damages and proceedings arising out of the carrying on of the Business
during that period.
3. PURCHASE CONSIDERATION
3.1 The consideration for the sale by the Vendor of the Business and the
Assets shall be the sum of 170,000 UKP (one hundred and seventy
thousand pounds). The consideration shall be apportioned as follows:
Apportionment
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(a) the Goodwill 99,993 UKP
(b) the Customer List 1 UKP
(c) the Computer Equipment 43,000 UKP
(d) the Computer Software 1 UKP
(e) the Office Equipment 20,000 UKP
(f) the Work in Progress 1 UKP
(g) the Contracts 1 UKP plus the benefit of the
Purchaser's covenant in
clause 7
(h) the Intellectual Property Rights 1 UKP
(i) the Information 1 UKP
(j) the Stocks 7,000 UKP
(k) the Rights 1 UKP
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TOTAL: 170,000 UKP
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3.2 The consideration is exclusive of Value Added Tax on the basis that the
sale constitutes the sale of a business as a going concern pursuant to
the Value Added Tax (Special Provisions) Order 1995.
3.3 The consideration shall be satisfied in cash upon completion of the
purchase in accordance with clause 4.
4. COMPLETION
4.1 The sale and purchase shall be completed immediately upon exchange of
this agreement when all the matters set out in this clause 4 shall be
effected.
4.2 The Vendor shall deliver to the Purchaser, at the Premises such of the
Assets as are capable of being transferred by delivery.
4.3 The Vendor shall cause to be delivered or (if so requested by the
Purchaser) made available to the Purchaser:
4.3.1 such documents (if any) and in such form as shall have been
agreed between the Purchasers Solicitors and the Vendors
Solicitors prior to the signing of this agreement and as are
required by the Purchaser's solicitors to complete the sale and
purchase of the Assets and vest title to the Assets in the
Purchaser;
4.3.2 all its books of account, payroll records, income records,
stock and other records, information relating to customers and
suppliers (including a list of customers to which outstanding
quotations have been given and a list of unfulfilled orders as
at the Effective Time), relevant computer programmes (including
all copies of the source code installed on a computer which is
part of the Assets to be purchased hereunder) and other books
and documents which relate to such programmes and the Business.
4.3.3 all its designs and drawings, plans, instructional and
promotional material, sales publications, advertising
materials, terms and conditions of sale and other technical
material and sales matter which relate to the Business,
together with any plates, blocks, negatives and similar
material relating to them;
4.3.4 all records of National Insurance and PAYE relating to all the
Employees duly completed and up to date;
4.3.5 the Lease together with an executed (but unstamped) Deed of
Assignment by the Vendor to the Purchaser of the Lease and the
Landlord's consent to the assignment thereby effected;
4.3.6 a Contract of Employment between the Purchaser and ▇▇▇▇▇ ▇▇▇▇▇▇
of ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ signed by the
said ▇▇▇▇▇ ▇▇▇▇▇▇.
4.4 Upon completion of the matters referred to above the Purchaser shall:
4.4.1 deliver to the Vendor a banker's draft in respect of the
purchase consideration; and
4.4.2 deliver to the said ▇▇▇▇▇ ▇▇▇▇▇▇ a duplicate copy of the
Contract of Employment referred to in clause 4.3.6 duly signed
by a director of the Purchaser.
4.4.3 deliver to the Vendor a duplicate copy of the Deed of
Assignment REFERRED TO IN CLAUSE 4.3.5.
4.5 The Purchaser shall not be obliged to complete the purchase of any of
the Assets unless the purchase of all the Assets is completed in
accordance with this agreement.
4.6 The Purchaser may in its absolute discretion waive any requirement
contained in clause 4.2 or 4.3.
5. DEBTORS
5.1 The Vendor shall be entitled to collect the Book Debts and the
Purchaser agrees to give all reasonable assistance to the Vendor to
enable the Vendor to collect the Book Debts.
5.2 Any sums received by the Purchaser in respect of any Book Debts shall
be held on trust by the Purchaser for the Vendor.
5.3 The Purchaser shall account to the Vendor within 14 days of receipt for
any sums received by it in respect of any of the Book Debts.
5.4 If it becomes apparent that recovery of any of the Book Debts is not
likely to be possible within a reasonable period unless legal
proceedings are instituted, the Vendor will consult with the Purchaser
before instituting any legal proceedings.
5.5 Subject to any express intention to the contrary on the part of the
debtor, any money received by either party from a person who is both
indebted to the Purchaser and liable for payment of one or more of the
Book Debts shall be deemed to have been paid in or towards discharge of
the oldest debt, regardless of the identity of the creditor.
5.6 The Purchaser shall for a period of 12 months give to the Vendor
reasonable access to its books and records in relation to the
collection of the Book Debts.
6. CREDITORS AND LIABILITIES
6.1 The Vendor shall forthwith following a request therefor supply to the
Purchaser full details of the Creditors.
6.2 Subject to clause 6.7 the Vendor shall be responsible for the discharge
of the Creditors and Liabilities and notwithstanding completion of the
purchase of the Business shall be responsible (subject as aforesaid)
for all debts payable by and claims outstanding against it at the
Effective Time including all wages, sums payable under taxation
statutes, rent and other expenses.
6.3 Without prejudice to the generality of clause 6.2 but subject as
therein mentioned:
6.3.1 the Vendor shall remain liable for claims by third parties in
respect of any service supplied or products sold by the Vendor
or any act or omission of the Vendor prior to the Effective
Time or arising from defective products or parts of products
manufactured by the Vendor, even if the defective products or
parts were sold by the Purchaser provided (in such case) they
are sold in the 12 months following completion;
6.3.2 upon becoming aware of any relevant claim the Purchaser will
promptly give notice of it to the Vendor and neither party
shall take any steps which might reasonably be expected to
damage the commercial interests of the other without prior
consultation with the other.
6.4 The Vendor shall indemnify the Purchaser from and against all
liabilities debts and claims referred to under clause 6.2 and 6.3.1 and
such indemnity shall extend to the amount of any settlement of a claim
(including reasonable costs) made by the Purchaser with the approval of
the Vendor.
6.5 The Purchaser shall take all reasonable preventive action with a view
to avoiding claims under clause 6.3.1 (including, without limitation
repair and replacement) and provided such action has first been
discussed and approved by the Vendor (such approval not to be
unreasonably withheld or delayed) the Vendor shall bear the cost of
that action.
6.6 Save for such liabilities as the Purchaser agrees expressly to assume
under this agreement, the Purchaser shall not assume any liability of
or relating to the Business in existence at the Effective Time and
nothing in this agreement shall make the Purchaser liable in respect of
anything done or omitted to be done prior to the Effective Time by the
Vendor.
6.7 The Purchaser has been notified by the Vendor and accepts that in
certain respects the Computer Software is not Year 2000 compliant and
to that extent, the Vendor may have been in breach of representations
and other contractual obligations to its customers. The Purchaser will
use best endeavours after Completion to remedy the defects in the
Computer Software relating to Year 2000 compliance and thereafter to
notify all relevant customers and supply them free of charge with
supplemental software remedying the defects.
7. CONTRACTS
7.1 The Purchaser shall:
7.1.1 accept assignments from the Vendor of or join with the Vendor
in procuring a novation of the Contracts; and
7.1.2 carry out perform and discharge all the obligations and
liabilities created by or arising under the Contracts after the
Effective Time except for any obligations and liabilities
(other than as referred to in clause 6.7) attributable to a
breach on the part of the Vendor or arising prior to the
Effective Time.
7.2 The Purchaser shall indemnify the Vendor against all actions,
proceedings, costs, damages, claims and demands in respect of any
failure on the part of the Purchaser to carry out, perform and
discharge all the obligations and liabilities created by or arising
under the Contracts (except as provided under 7.1.2) to the extent that
they fall to be carried out, performed and discharged after the
Effective Time. The Vendor shall indemnify the Purchaser against all
actions, proceedings, costs, damages, claims and demands other than
those in respect of or arising out of the matters referred to in clause
6.7 to the extent that the same are attributable to any failure on the
part of the Vendor to carry out, perform and discharge all the
obligations and liabilities created by or arising under the Contracts
in the period up to the Effective Time to the extent that they fall to
be carried out, performed and discharged up to the Effective Time.
7.3 Insofar as the benefit of any of the Contracts cannot effectively be
assigned to the Purchaser except by an agreement or novation with, or
consent to the assignment from, the person, firm or company concerned:
(a) the Vendor shall at the Purchaser's request and expense use all
reasonable endeavours with the co-operation of the Purchaser to
procure such novation or consent to the assignment;
(b) until any Contract is novated or assigned the Vendor shall hold
it and also the benefits arising under it in trust for the
Purchaser absolutely. Where the Purchaser performs such
contract it does so (provided such sub-contracting is
permissible and lawful under that Contract), as the Vendor's
sub-contractor; and
(c) until any Contract is novated or assigned the Vendor shall (so
far as it lawfully may) give all reasonable assistance to the
Purchaser (at the Purchaser's request and expense) to enable
the Purchaser to enforce its rights under that Contract.
7.4 For the purpose of obtaining the effective assignment of the Contracts
to the Purchaser the Vendor and the Purchaser agree to notify together
in writing the other parties to the Contracts on or as soon as
practicable after the Effective Time (in such form as both parties
shall agree) of the assignment of each Contract to the Purchaser to the
extent that the same are assignable to the Purchaser without the other
party's prior written consent.
7.5 The Vendor agrees that it shall, at the Purchaser's request and
expense, use all reasonable endeavours with the co-operation of the
Purchaser to procure the assignment to the Purchaser of the right to
use the Licensed Software following Completion. Following any such
assignment, the Purchaser shall perform and discharge all of the
obligations and liabilities relating to the Licensed Software imposed
by any third party including the owner of any Licensed Software save
for any that relate to the period up to the Effective Time. For the
avoidance of doubt, clauses 7.2, 7.3 and 7.4 shall apply mutatis
mutandis to the Licensed Software.
8. EMPLOYEES AND AGENTS
8.1 For the purposes of Regulation 10 of the Regulations, the Vendor
warrants that it does not recognize any Trade Union as representing any
of the Employees or the Agents.
8.2 All salaries and other emoluments and obligations, including
entitlement to commission bonuses or rewards up to the Effective Time,
accrued but unpaid holiday entitlement (where holiday has not been
taken), holiday pay, accrued sick pay, tax and national insurance
payments and other contributions to retirement benefit or pension
schemes and other contractual benefits relating to the Employees and
the Agents shall be borne by the Vendor to the extent they arise in or
relate to the period up to the Effective Time.
9. VALUE ADDED TAX
9.1 The parties shall use all reasonable endeavours to procure that the
sale of the Business is deemed to be a transfer of a business as a
going concern for the purposes of the Value Added Tax ▇▇▇ ▇▇▇▇, s49 and
Schedule 4 paragraph 8(1)(a). In the event that VAT shall be payable on
the sale under this agreement (other than where such VAT has become
payable because of a breach by the Vendor of the provisions of the
first sentence of this clause) the Purchaser shall pay to the Vendor
such VAT and any penalties or interest incurred by the Vendor for late
payment of such sum, such payment to be made on delivery by the Vendor
to the Purchaser of a valid invoice in respect of such VAT.
9.2 The Vendor shall deliver to the Purchaser all the records of the
Business for value added tax purposes which are required by the Value
Added Tax ▇▇▇ ▇▇▇▇, s49(1)(b) to be preserved.
9.3 The Purchaser shall for a period of not less than 6 years from the
Effective Time preserve the records so delivered to it by the Vendor
and, upon reasonable notice, make them available to the Vendor or its
agents during normal business hours.
10. TITLE AND APPORTIONMENTS
10.1 The Vendor shall take all necessary steps reasonably required (but
shall not be required to incur any expenditure to that end) and
co-operate fully with the Purchaser to ensure that the Purchaser
obtains the full benefit of the Business and Assets and shall at the
request and expense of the Purchaser execute such documents and take
such other steps (or so far as it is reasonably able procure other
necessary parties so to do) as are reasonably necessary or appropriate
for vesting in the Purchaser all its rights and interests in the
Assets.
10.2 All rents, rates, gas, water, electricity and telephone charges and
other outgoings relating to or payable in respect of the Business up to
the Effective Time shall be borne by the Vendor and as from the
Effective Time shall be borne by the Purchaser and all rents, royalties
and other periodical payments receivable in respect of the Business up
to that time shall belong to and be payable to the Vendor and as from
that time shall belong to and be payable to the Purchaser. Such
outgoings and payments receivable shall if necessary be apportioned
accordingly, provided that any such outgoings or payments receivable
which are referable to the extent of the use of any property or right
shall be apportioned according to the extent of such use.
10.3 Where any amounts fall to be apportioned under this agreement, the
Vendor shall provide the Purchaser with full details of the
apportionments, together with supporting vouchers or similar
documentation, and to the extent that the items are not in dispute the
appropriate payment shall be made by or to the Vendor forthwith. If the
amount of any apportionment is in dispute, the provisions of clause
10.4 shall apply for resolving the dispute and the amount determined in
accordance with that clause shall be paid within 14 days of the
determination, together with interest calculated on a daily basis (as
well after as before judgment), from the Effective Time until the date
of actual payment, at the rate of 4 per cent per annum above the base
rate from time to time of Midland Bank PLC.
10.4 In the case of dispute between the parties as to the amount of any
apportionment either party may refer the subject of the dispute to a
firm of chartered accountants agreed by the parties or failing
agreement within 14 days, a firm nominated at the request of either
party by the President for the time being of the Institute of Chartered
Accountants in England and Wales. The accountants shall be entitled to
call for and inspect the relevant invoices and vouchers and such other
documents as they shall consider necessary. In making their
determination the accountants shall act as experts and not as
arbitrators, their decision shall (in the absence of manifest error) be
final and binding on the parties and their fees shall be borne and paid
by the Vendor and Purchaser in such proportions as the accountants
determine.
11. WARRANTIES BY THE VENDOR
11.1 The Vendor warrants to the Purchaser that:
11.1.1 save as disclosed in the Disclosures, the Warranties set out in
Schedule 3 are true and accurate in all respects;
11.1.2 the Disclosures are true and accurate in all material respects
fully and fairly disclose every matter to which they relate.
11.2 The rights and remedies of the Purchaser in respect of any breach of
the Warranties shall not be affected by completion of the purchase of
the Business, by any investigation made by or on behalf of the
Purchaser into the affairs of the Vendor, by the Purchaser failing to
exercise or delaying the exercise of any of its rights or remedies or
by any other event or matter whatsoever except a specific and duly
authorised written waiver or release.
11.3 The Purchaser hereby acknowledges that it does not enter into this
Agreement in reliance on any representation warranty or undertaking
other than those embodied in this Agreement and the Schedules.
11.4 If there is a breach of any of the Warranties and:
11.4.1 the value of the Business or any of the Assets is less than it
would have been at the Effective Time in the absence of the
breach; or
11.4.2 the Purchaser incurs a liability which it would not have
incurred or which exceeds the liability it would have incurred
had matters been as warranted; or
11.4.3 as a result of the breach or of matters not being as warranted
the Purchaser suffers loss, costs or expenses or does not
receive any benefit, gain or profit which otherwise could
reasonably have been expected to accrue;
then without affecting the Purchaser's other rights the Vendor shall
pay to the Purchaser in cash by way of damages an amount equal to the
resulting diminution of value or the liability or excess liability and
the loss, costs and expenses so as to put the Purchaser into the
position which it would have been in if the Warranties had been true
and accurate and had not been breached.
11.5 The Vendor undertakes to indemnify the Purchaser against any costs
taxed on an indemnity basis (together with any VAT thereon which is not
recoverable by the Purchaser) which the Purchaser may incur either
before or after the commencement of any action, in connection with:
11.5.1 any legal proceedings in which the Purchaser claims that there
has been a breach of the Warranties and in which judgment is
given in favour of the Purchaser; or
11.5.2 the enforcement of any such judgment.
11.6 Notwithstanding any other provisions of this Agreement the liability of
the Vendor hereunder shall be limited in accordance with the provisions
of Schedule 5 and the provisions of such Schedule shall have effect.
12. PENSIONS
12.1 The Vendor shall be responsible for all payments into the Vendor's
pension fund in respect of the Employees for the period up to the
Effective Time.
13. FUTURE ACTIVITIES
13.1 For the purpose of assuring to the Purchaser the full benefit of the
Business the Vendor and Guarantor each covenant and undertake with the
Purchaser that it shall not:
13.1.1 disclose to any person or itself use for any purpose the
Customer List, the Information or any other confidential
information concerning the Business and it shall keep the same
confidential and shall use all reasonable endeavours to ensure
that the use publication or disclosure by others (including
without limitation existing or former employees or agents of
the Vendor) of the same does not occur and is prevented;
13.1.2 for a period of 4 years after the Effective Time either on its
own account or through any other person directly or indirectly
solicit, interfere with or endeavour to entice away from the
Purchaser any person who is now or has, during the two years
preceding the Effective Time, been a customer or employee of,
supplier to or otherwise in the habit of dealing with, the
Vendor in relation to the Business;
13.1.3 for a period of 4 years after the Effective Time directly
engage in the United Kingdom in any activity which is similar
to or which directly competes with the Business or any material
part thereof as it is now carried on.
13.1.4 for a period of 4 years after the Effective Time use the name
Quest Software on its own or in any trading name or any similar
sounding name in any business;
13.1.5 not at any time after the Effective Time grant licence or
assign the right to use the name Quest Software on its own or
any similar sounding name to any other party or purport to do
so.
13.2 The Vendor shall promptly refer to the Purchaser all enquiries relating
to the Business and assign to the Purchaser all orders relating to the
Business, including enquiries or orders for any work, supplies of
computer software or hardware or computer related services which the
Vendor may in the future receive.
13.3 The Vendor and Guarantor agree with the Purchaser that the provisions
of clause 13.1 are reasonable and necessary for the protection of the
value of the Business and the Goodwill and that having regard to that
fact those provisions do not work unfairly against the Vendor and the
Guarantor.
13.4 The Vendor and Guarantor agree that if any of the provisions of clause
13.1 themselves or taken together, shall be adjudged to go beyond what
is reasonable in all the circumstances for the protection of the
legitimate interests of the Purchaser but would be adjudged reasonable
if part or parts of the wording thereof were deleted or amended or
qualified or the periods thereof were reduced or the range of business
activities or area dealt with were thereby reduced in scope, then the
relevant provision shall apply with such modification as may be
necessary to make it or them valid and effective.
14. ANNOUNCEMENTS
14.1 No announcement of any kind shall be made in respect of the subject
matter of this agreement except as specifically agreed between the
Vendor and the Purchaser. Any announcement by either party shall in any
event be issued only after prior consultation with the other.
15. COSTS
15.1 All expenses incurred by or on behalf of the parties, including all
fees of agents, solicitors, accountants, employed by either of the
parties in connection with the negotiation, preparation and execution
of this agreement shall be borne solely by the party which incurred
them.
16. COMMUNICATIONS
16.1 All communications between the parties with respect to this agreement
shall be delivered by hand or sent by first-class post to the address
of the addressee as set out in this agreement, or to such other address
(being in Great Britain) as the addressee may from time to time have
notified for the purpose of this clause, or sent by facsimile
transmission (with confirmation by letter posted first-class within 24
hours).
16.2 Communications shall be deemed to have been received:
16.2.1 if sent by first-class post: 2 business days after posting
exclusive of the day of posting;
16.2.2 if delivered by hand: on the day of delivery;
16.2.3 if sent by facsimile transmission: at the time of transmission.
16.3 Communications addressed to the Vendor shall be marked "Strictly
Private and Confidential attention of ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇". Communications
addressed to the Purchaser shall be marked for the attention of ▇▇▇▇▇
▇▇▇▇▇ with copies to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
16.4 In proving service:
16.4.1 by delivery by hand: it shall be necessary only to produce a
receipt for the communication signed by or on behalf of the
addressee;
16.4.2 by post: it shall be necessary only to prove that the
communication, or letter of confirmation, was contained in an
envelope which was duly addressed posted in accordance with
this clause;
16.4.3 by facsimile transmission: it shall be necessary only to prove
that the facsimile message was properly addressed transmitted
and confirmation received from the recipient's fax machine or
operator as the case may be.
17. ENTIRE AGREEMENT AND SCHEDULES
17.1 This agreement and the Schedules constitute the entire agreement and
understanding between the parties with respect to all matters which are
referred to.
17.2 The Schedules form part of this agreement.
17.3 This agreement binds each party's permitted successors and assigns.
17.4 None of the rights or obligations under this agreement may be assigned
or transferred without the prior written consent of all the parties.
18. INVALIDITY
18.1 If any term or provision in this agreement shall in whole or in part be
held to any extent to be illegal or unenforceable under any enactment
or rule of law, that term or provision or part shall to that extent be
deemed not to form part of this agreement but the remainder of this
agreement shall not be affected.
19. FURTHER ASSURANCE
19.1 The Vendor shall without charge (but subject to clause 19.2) execute
all such documents or do or procure the doing of such acts and things
after Completion as the Purchaser shall reasonably require in order to
give effect to this agreement and give to the Purchaser the full
benefit thereof which shall include enforcing the rights described in
clause 2.1.2(k).
19.2 The Purchaser shall discharge all fees and out-of-pocket expenses
incurred by the Vendor with the prior approval of the Purchaser in
carrying out its obligations under clause 19.1 (including, without
limitation, all reasonable fees of solicitors accountants and other
professional advisers) and the Vendor shall be entitled to security
therefor before complying with such obligations.
20. PROPER LAW
20.1 The construction, validity and performance of this agreement shall be
governed by the laws of England and the parties agree to submit to the
jurisdiction of the English Courts for all purposes relating to this
agreement.
21. WARRANTY OF AUTHORITY
21.1 The Purchaser warrants to the Vendor that the Purchaser has full power
and authority to enter into this Agreement and does not require the
consent of any third party to do so.
22. GUARANTEE
22.1 The Guarantor as principal obligor unconditionally and irrevocably
GUARANTEES to the Purchaser the performance of all of the obligations
and the discharge of all liabilities of the Vendor arising under this
Agreement upon the following conditions:
22.1.1 If the Vendor in any respect fails to comply with its
obligations and discharge any liabilities under the Agreement
or commits any breach and in either case fails to remedy its
default within fourteen days of notice in writing from the
Purchaser requiring it so to do, the Guarantor shall indemnify
the Purchaser against the losses, damages, costs and expenses
that may be reasonably incurred by the Purchaser by reason of
that default; and
22.1.2 Notice in writing of any default or breach is to be given by
the Purchaser to the Guarantor and within 7 days from receipt
of such notice the Guarantor agrees to make payment in
accordance with the indemnity in clause 22.1.1 arising out of
such default or breach.
22.2 This Guarantee is a continuing guarantee until the complete discharge
and satisfaction of all obligations owed under the Agreement.
22.3 The Guarantor shall not be discharged by time or any other indulgence
or concession given to any third party by the Purchaser, or by anything
the Purchaser may do or omit to do or by any other dealing, act or
omission that but for this provision would discharge the Guarantor.
22.4 If at any time any one or more of the provisions of this Guarantee is
or becomes invalid, illegal or unenforceable in any respect under any
law, the validity, legality and enforceability of the remaining
provisions hereof shall not be in anyway affected or impaired thereby.
23. CERTIFICATE OF VALUE
23.1 It is hereby certified that the transaction hereby effected does not
form part of a larger transaction or of a series of transactions in
respect of which the amount or value or aggregate amount or value of
the consideration exceeds ?500,000 (five hundred thousand pounds).
AS WITNESS the hands of the duly authorised representatives of the parties on
the date which first appears on page 1.
SIGNED BY )
for and on behalf of )
QUEST SOFTWARE LIMITED )
)
In the presence of )
SIGNED BY )
for and on behalf of )
QUEST SOFTWARE )
(SCOTLAND) LIMITED )
)
In the presence of )
SIGNED BY )
for and on behalf of )
IBIS SYSTEMS LIMITED )
In the presence of )
SIGNED BY )
for and on behalf of )
▇▇▇▇▇ ▇▇▇▇▇▇ )
In the presence of )
CONTENTS
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PAGES
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Agreement for Sale of Business
Schedule I
Part I: Computer Equipment
Part II: Computer Software
Part III: Contracts
Part IV: Customer List
Part V: Prepayments (invoiced and paid and invoiced and unpaid)
Part VI: Intellectual Property Rights
Part VII: Licensed Software.
Part VIII: Office Equipment
Part IX: Premises
Schedule 2 Excluded Assets
Schedule 3 Warranties
Schedule 4 Employees (containing lists of names,
date of birth, address, cont. service
and accrued rights)
Schedule 5 Limitations on Vendor's Liability to Warranty claims