UNITED STATES DISTRICT COURT
                     DISTRICT OF MINNESOTA
                        FOURTH DIVISION
                                
                                
Tibor Darves Ltd Plaintiff


V. Court File No: 93 Civil 633

                                                                         
        
Arbeit Systems Ltd
Arbeitech Ltd and Defendants
Arbeitech Inc

       DECLARATION OF JONATHAN STEINBERG ESQ.


This is the declaration of Jonathan Roger Steinberg esq, barrister at law of 10
Mitchell Place, New York, New York 10017. I am an international attorney
practicing in New York City. I am admitted as a barrister in London, where I was
called to the bar by the Inner Temple in 1976. I have also been admitted to
practice in New York State in 1983, and subsequently in the United States District
Court for the Southern District of New York as well as the Second Circuit Court
of Appeal.



I have been shown a contract between the plaintiff and defendants in the above
captioned matter which is stated to be governed by English law and am advising
herein on the applicable English law. This advice is being rendered at extremely
short notice and apologies are respectfully made to this Honourable Court if this
has resulted in any matter being clearly explained to the satisfaction of this
Honourable Court. I have attempted to explain all relevant aspects of English law,
and have tried to place what I see as essentially irrelevant aspects in end notes.
Although in a strict sense, I do not feel that these matters would have any proper
application in an English court, I have included them for the sake of completeness
in the hope that they might be of some assistance to this Honourable Court, -or
because they have been referred to by the plaintiffs in the Complaint or in the
Memorandum here.
 



In writing this advice on law, I have been referred to:
1.The Complaint in the Minnesota action.
2.The Complaint in the Massachussetts action
3.The plaintiffs legal argument m the Memorandum of Law in support of the
motion in the Minnesota action
4.A copy of an apparently complete license agreement between the parties
5.The Israeli Order merging Arbeit Systems Ltd and Arbrotech Ltd along with a
certificate of translation
6.A copy of the Israeli Section 234 under which the companies were merged.
7.A copy of a letter dated June 29th 1893 (sic) from Peter Darves to Peter Cohen
of Cosmotronics Inc of Irvine California.


The Contract

1. I am asked to advise in this matter in which an English computer software
developer called Tibor Darvas entered into a non-exclusive marketing agreement
with an Israeli computer aided manufacturing systems company Arbeit for the
world wide marketing and development of some Tibor Darves' software by Arbeit
for the purpose making CAM Systems and increasing their own sales. The Israeli
company could sub-license to any number of sub-licensees without the need to
obtain Tibor Darves' permission. The licence Was stated to bind the contacting
parties as well as wholly or even partly owned subsidiaries.

2.The contract is governed by English law, [For most practical purposes in this
regard, Israeli company law is based on and is the same as English company law]
The licence contained a clause which set out the provisions for assignment of the
whole of the agreement which were, in essence that the Israeli company could
assign the licence with the permission of the English company, such permission
not to be unreasonably refused.

3. Under Clause 6 of the licence; if Tibor Darves found the company to be in
breach, Tibor Darves could Serve notice on the company alleged to be in breach
and give an opportunity to remedy the breach. There was a 60 day period provided
in the licence in which the marketer could take steps to remedy the breach.
[NOTE: I note that on the papers I have, as of the date of opinion, this period does not seem
to have expired yet]

4.There is no provision in the licence either prohibiting a mere change of name or
a merger of the marketing company, or setting out procedures for such an event.
Nor is there any provision for a reorganisation or reconstruction of the license.
[NOTE: Under English law parties cannot agree to limit the jurisdiction of the
courts. The proper way of achieving such an end is to state that upon a certain
eventuality, the contract becomes void That the plaintiffs did this as regards sub-licensees tying to assign their sub-licenses and specifically not as regards
assignment of the license itself is evidence of the parties' awareness of this
inability to limit the jurisdiction of the courts and their contemplation at the time
of contract that this license might under some circumstances be assigned.]

5. The situation today is that Arbeit has sold large numbers of computer aided
manufacturing Systems which it designed using it's right to do so under the
licence, and Tibor Darves' software is a vital part of these systems. Under the
license agreement Tibor Darves is obliged to continue to provide updates,
improvements, debugs (and new products) both to Arbeit and, through the
licensee to those to whom Arbeit has sub-licensed the systems. Arbeit and
Arbeitech are still, under the terms of their contract with their sub-licensees,
obliged to provide support and upgrades, etc for these installed Systems. It is not
suggested that Arbeit or Arbeitech can escape from their said liability merely
because their licensor refuses to provide new products or upgrades.

6.Merger under Israeli law may be carried out by court order under S.234 of the
1983 ISRAELI COMPANIES ORDINANCE. When a merger takes place under
S.234, there is no need for a formal winding up of the company which is being
incorporated into the company which results from the merger [NOTE:I am asked
to advise on the English law relevant to this proceeding. In general, and especially
in the absence of a compelling reason not to do so, the English courts would
construe and give effect to foreign Court Orders so long as the procedural aspect
of those Orders is satisfied. This of course, all the more so in cases in which the
foreign law (such as Israeli company law) follows substantially English law. I can
see no reason whatsoever why an English court would question this Order, either
in substance or form. English law is cited in this opinion for background purposes
only.] As the Order specifically states, the companies continue.

7.Arbeit and Arbrotech having gone through the appropriate procedures, by order
of the Israeli courts in a S.234 application, Arbeit merged with Arbrotech, another
Israeli computer aided manufacturing systems company. Those procedures so far
as is appropriate in the present opinion involved publication in (inter alia) the
media, of the proposal to merge. The enlarged Arbrotech company which
resulted from the merger was renamed Arbeitech.

8.Arbeitech was not significantly dissimilar from the company which signed the
agreement; it has the same officers and the same shareholders, -although in both
cases there were more of them. The Order states that the company (meaning
Arbeit) which was being merged into the larger company continues in operation as
before.

9.The significant difference between Arbeitech and Arbeit is that Arbeitech can
also incorporate, where appropriate, software designed by the former Arbrotech,

The Law

1O. LAW OF PROPERTY ACT 1925 S.180 (1) Any chose in action vested in a
corporation sole. . . . .. .passes to the successors from time to time

11 The plaintiffs cite the terms of the contract and refer specifically to the
prohibition against assignment. They then go on to argue not that there has been
an identifiable assignment and why it falls within the terms of the clause, but that
there has definitely been a transfer. As well as sidestepping the whole question of
how the continuance specified by the Israeli court operates as a transfer, no
attempt is made to show why a mere transfer breaches the assignment clause.

12.Short of claiming that the merger constitutes an assignment it is not clear
precisely what was the assignment to which the plaintiffs in the Minnesota action
refer. [NOTE: and see note 3 above concerning the contract's power to limit court Orders in
order to conform to the terms of the contract. If an English Court sees the word "CONTINUE'
in a Court Order, they construe the word CONTINUE]

13.Paragraph 10 of the Complaint in the Minnesota action alleges that the Israeli
Order assigns Arbeit's assets to Arbeitech. The Court Order stated, however, that
the
activities, businesses, and obligations of Arbeit continued to be carried out by
Arbeitech.

14.Under English law an incorrect statement such as this one would be subject to
investigation in a preliminary hearing. Such hearing would investigate solely
whether there was any grounds whatsoever for the statement. If not, the statement
would be struck out. Without such allegation that the contract was assigned, that
part of the pleading would then be demurrable. On that issue, the pleading does
not disclose a cause of action.

15. The contract specifically provides that in the event of Arbeit's breach, the
plaintiff could serve a proper notice requiring remedy of the breach and there is a
sixty day period in which Arbeit can negotiate, obtain a waiver or remedy the
breach. It is unlikely that any court in England would grant relief to Tibor Darves
along the terms requested (or any terms) without seeing evidence that appropriate
notices have been served, that attempts have been made to discuss or remedy and
in the final event that non-compliance mandates the intervention of the Courts.

16.Assuming arguendo that a court were so disposed, the clean hands doctrine
would still apply to Tibor Darves' conduct since the merger; Although there may
well not have been any breach, and although the contract could still be carried out
as before, Tibor Darves unilaterally decided to commence a policy of non-compliance with the terms of the contract as regards the provision of new
products, service and upgrades to Arbeitech.

17.ln default of the effluxion of time under the clause providing for the procedures
where such permissions were not obtained, even on the facts as set out by Tibor
Darvas, it is difficult to see what breach there has been of this contract. Assuming
arguendo that permission to assign under these circumstances was necessary,
Tibor Darvas seems to be claiming some kind of anticipatory breach based on
their own (future?) refusal to grant permission to assign.

THE MERGER

18.There is no reason to assume under English law that in an amalgamation there has necessarily
to be a transfer: U.K. company legislation provides in S.427 of the COMPANIES ACT 1985
"where application is made to the court for an order (to facilitate amalgamation or reconstruction)
the Court may order the transfer to the transferee company the whole or any part of the
undertaking  and of the property.... of any transferor company"

19 S. 427 (6) Property includes property rights and powers of any description. [NOTE:  The only
non-transferable contracts are contracts for personal services: NOKES V. DONCASTER
AMALGAMATED COLLIERIES Ltd (1904) A.C. 1014. Cases in which English courts have
found that a company could perform such personal services as would be covered by this
exception only extend as far as instances where there was a specific intention to contract with a
particular party for his personal service. Within a corporate context, this is rare and certainly does
not appear to have been the case here.]

20.Under English law, one cannot merely say that there has been a transfer, therefore there must
have been an assignment, therefore there must have been a breach of a covenant not to assign: 
KENMIR, LTD. V. FRIZZELL AND OTHERS. (1968) 1 ALL ER 414, (1968) 1 WLR 329,
[1968) ITR 159, (Q B.)

     In deciding whether a transaction amounted to the transfer of a business, regard must be
     had to its substance rather than its form, The absence of an  assignment  of premises,
     stock-in-trade or outstanding contracts will likewise not be conclusive, if the particular
     circumstances of the transferee nevertheless enable him to carry on substantially the same
     business as before.

21 Indeed the clearest example in English law of a transfer which does not amount to an
assignment is the transfer by order of the Court:

In RE RIGGS, Ex PARTE LOVELL (1901) 2 K.B. 16.  Held: the lessee's being adjudicated
bankrupt on his own petition did not operate as a breach of his covenant not to assign. Per Wright
J.

     " the words 'assign or underlet' are used in their ordinary or popular sense and refer only
     to such assignments as are directly made by the lessee as distinguished from such
     assignments by law as result by the statute from a petition in bankruptcy followed by
     adjudication."

22.DOE V. BEVAN 3 M & S 353. cited in COHEN V.  POPULAR RESTAURANT'S LTD
[1917] 1 KB AT 482: per Rowlatt J.

     The words ASSIGN OR UNDERLET in In Re Riggs are used in their ordinary or popular
     sense, and refer only to such assignments as are directly made by the lessee is
     distinguished from such assignments by law as result by the statute from a petition in
     bankruptcy followed by adjudication.

23.The Riggs decision flowed from a line of decisions which showed tat a transfer from one
partner to another in a reconstruction did not constitute an assignment for the purposes of
breaching a clause against assignment Thus in LANGTON V. HENSON 92 L. T. 805. the
question was is there a parting with possession such as would operate a clause in a lease
preventing the lessee from parting with possession.   Answering the question (in the negative):
does a company part with possession in the assignment, the court quoted Jessel M.R. in
CORPORATION OF BRISTOL V. WESTCOTT 1879 12 ChD 461: CA.

     "How can possession be parted with to a person who already has it?"

Per Cotton LJ

     "I think it is proper construction that the lessees are not to give possession to any one who
     has not already been admitted as tenant".

24.As a further example of the concept that a title to a (in this case) lease can pass by operation
of law such transfer not necessarily being tantamount to assignment, PASMORE V.
WHITBREAD & CO., LTD. [1953] 2 QB 226, [1953] 1 All ER 361, (1953) 2 WLR 359, 161
CA.

     "The expression 'predecessor in title'  in relation to a tenant or landlord means any person
     through whom the tenant or landlord has derived title, whether by assignment, by will, by
     intestacy, or by operation of law."

25.Nor in an amalgamation does there necessarily have to be an assignment which would breach
the terms of this contract.

RE HAYES'  WILL TRUSTS.  DOBIE AND OTHERS V. BOARD OF GOVERNORS OF THE
NATIONAL HOSPITAL AND OTHERS.[1953] 2 All
ER 1242, [1954] 1 WLR 22 (ChD):

     "we have had, of course, to consider the meaning of the word "amalgamation". The
     meaning of that word has been considered in Re WALKER'S SETTLEMENT in which
     ROMER, L.J., quotes the definition found in BUCKLEY ON THE COMPANIES ACTS,
     11th ed., at p. 487.   ROMER, L.J., says [1935] Ch.583:

          "it is a definition which, so far as it is a definition, I should like to adopt as my
          own; it is there stated as follows: 'The word "amalgamation has no definite legal
          meaning. It contemplates a state of things under which two companies art so
          joined as to form a third entity,  or one company is absorbed into and blended
          with another company'."


26.    Per Ferris J. in SWITHLAND  V. IRC, commenting on the change in business (or lack of
it) in the amalgamation/reconstruction:

     "After (the) transfer   it carried on the same business, having increased its holding in
     Estates.  In no sense did any undertaking or part of an undertaking change hands"

Citing Fox J. in MCGREGOR (HMIT) V ADCOCK (1977) 51 TC 692, who said:

     "if a man is farming 200 acres and sells of 190 of those acres it may very well be that the
     nature and extent of the man's activities after the sale would be so wholly different from
     what they were before that the inevitable conclusion would be that there had been a
     disposal of part or even the whole of the farming business"....It must be a question of fact
     in each case whether there has been such an interference with the whole complex of
     activities and assets as can be said to amount to a disposal of the business or a part of the
     business."

Per Buckley J. in RE SOUTH AFRICA SUPPLY AND COLD STORAGE Co Ltd [1904] 2 Ch
268:

     "An amalgamation takes place,..... either by the transference of the undertakings A and B
     to a new corporation C, or by the continuance of A and B by B upon terms that the
     shareholders of A become shareholders of B. It is not necessary that you have a new
     company. You may have a continuance of one of the two companies upon the terms that
     the undertakings of both corporations shall substantially be merged in one corporation
     only"
ALSO:
     "The result of the whole complicated transaction is that everything that existed before is
     now found either in the Imperial Company or in the Cold Storage Trust, by the holding of
     shares in one or the other    both the Supply Company and the Australasian Company
     wound up-not for the purpose of discontinuing or parting with their undertakings, but for
     the purpose of continuing to be the owners of their undertakings in an altered form"

27.BROTEX CELLULOID FIBRES Ltd V. IRC [1933] 1 K.B. 158 AT 171: per Rowlatt J.

     "..  ...when a company is reconstructed or amalgamated, in substance one expects to find
     the property in the old hands but under the domination of the new company.

28.  Scarman L.J. cited this in CRANE FRUEHAUF Ltd V. IRC (1975) l ALL ER 429
(considering whether there had been an amalgamation in order to determine liability to stamp
duty):

     "The purpose of the section is to give relief from capital duty and transfer stamp duty
     when there exists for the reconstruction of any company or companies or the
     amalgamation of any companies a scheme which does not require either the creation of
     fresh capital or a transfer of interest     if a scheme for amalgamation introduces new
     capital or includes a substantial transfer of shares to a new shareholder, it would appear
     on general grounds to be a scheme  ...........not entitled to the relief provided by the
     section; for then the shareholding does not remain substantially the same, nor does the
     property remain 'in the old hands'."

Also per May J. in IRC V. UIC GROUP Ltd [1977] 3 ALL ER 924 AT 940:

     "The essence of an amalgamation in my view...... is that after the relevant transactions
     have taken place the businesses or property shall remain substantially in the same hands
     as they were before those transactions took place"

29.The business of Arbeit seems to be exactly the same for the purpose of this contract after the
merger as before. Furthermore as far as Arbeit is concerned, the shareholders of the new entity
are the same as before the merger;  It seems material that Tibor Darves concedes this in stating
that they were under the impression that after the merger was rumoured and after the merger took
effect, they felt comfortable enquiring of Arbeitech as to whether the undertaking would continue
exactly as before


    
    
    
    
    
    
    
    
    
    
    
    
    
    

The Litigation

30. Although there is some evidence that Tibor Darves feels wronged by it's largest licensee
being taken over by it's largest "competitor", I know of no cause of action which would be
properly supported by this.

31. Tibor Darves omits from the contract any clause which prohibits any party from working
with possible competitors, yet it now seems to be trying to enforce just such a concept, -and by
implication. It is very doubtful indeed whether the English courts would find it in the public
interest to permit Tibor Darves to keep competitors out of the market in such a way.

32.It is further alleged that there was some kind of fiduciary relationship between the parties. In
England the categories of fiduciary relationship are very limited, and as in American law, well
defined. To my knowledge no fiduciary relationship has ever been upheld by the English courts
between a non-exclusive licensee of a product and a manufacturer, -especially a manufacturer
whose relationship derives from an assignable contract which purports to bind even partly owned
subsidiaries. Nor does the disclosure of important trade secrets in a confidentiality situation
necessarily give rise to any fiduciary relationship.

33. There is no significant body of English law in which the courts have assisted a contracting
party by implying a clause preventing the licensee from competing with a licensor for some
unspecified time period in the future. This is all the more so in a matter in which it is apparent
that the competition arises as a result either of the contractor refusing to grant reasonable
permission under the contract or of the licensor being in breach of the contract by failing or
refusing to support a product and failing to adhere to remedying clauses in the contract.

34. per Cross J in PRINTERS & FINISHERS LIMITED V HOLLOWAY (1965] RPC 569

     If the managing director is right in thinking that there are features in the plaintiffs' process
     which can fairly be regarded as trade secrets and which their employees will inevitably
     carry away with them in their heads, then the proper way for the plaintiffs to protect
     themselves would be by exacting covenants from their employees restricting their field of
     activity after they have left their employment, not by asking the court to extend the
     general equitable doctrine to prevent breaking confidence beyond all reasonable bounds."'

35. It is possible that the plaintiffs herein are mistaking the situation in English law in which it
has been found that an employee is in a fiduciary position with regard to his employer. However
even that possibility has been severely restricted by the courts, which consider that as regards the
aspects of the claim brought by these plaintiffs, a restrictive covenant in the license agreement
would have been more appropriate to protect Tibor Darves and to give rise to the cause of action
which they arc now claiming.

The attitude of the courts has always been as summed up by Cumming-Bruce J in GD SEARLE
& Co LTD V CELLTECH LTD (1982) FSR 92, AT 101. per Cumming-Bruce LJ:

     "The usual procedure by which a business protects itself from competition from its
     employees is a restrictive covenant; that is conspicuous by its absence in the relevant
     contracts. If there were such covenants, the employee could invite the court to avoid them
     if on accepted principles of law they were unreasonable in their width or their duration."

36. In BALSTON LIMITED AND ANOTHER V HEADLINE FILTERS LIMITED 91990)
FSR 385 it was held:

     An intention by a director of a company to set up business in competition with the
     company after his directorship had ceased was not to be regarded as an interest which
     conflicted with his fiduciary duty to that company; nor was the taking of any preliminary
     steps to investigate or forward that intention so long as that was no actual competitive
     activity while he remained a director


It followed that (the defendant in the Balston case] was not in breach of fiduciary duty as a
director in not disclosing to B Ltd his intention to set up a business in competition, whether as a
dealer in filter products or a manufacturer of filter tubes, or in taking such steps as he had to
forward that intention

37. (There was no duty upon Mr Head as a director to disclose to Balston that he had an
intention of going into competition or that he had taken those steps, even if' contrary to his
submission, those steps were acts committed in breach of his fiduciary duty as a director).

38. In this context counsel for the defendants rightly stresses the fundamental principles relating
to contracts in restraint of trade. It would, it seems to me, be surprising to find that directors
alone, because of the fiduciary nature of their relationship with the company, were restrained
from exploiting after they had ceased to be such any opportunity of which they had acquired
knowledge while directors.

     Directors, no less than employees, acquire a general fund of knowledge and expertise in
     the course of their work, and it is plainly in the public interest that they should be free to
     exploit it in a new position.

39. In English law, an anti-competition clause in a contract has to stand up to numerous tests in
order to be found effective by the courts. It has to be worded so specifically that it is delimited
as to (amongst other things) time, reasonableness, (where appropriate) geographical area' and
ambiguity. In VANDERVELL PRODUCTS, LTD. V. McLEOD [1957] RPC 185 C.A. It was
held in interpretation of such a clause that "competitor"" in the covenant meant "competitor" in
any line of business that the employer might be carrying on when [the employee] left their
service. So construed, the covenant was too wide for enforcement.

40. In so far as Tibor Darves is here trying to imply such a covenant in a non-employer/employee
situation, there is absolutely no basis whatsoever for such an implication in a contract in which
Tibor Darves could easily have inserted just such an express term had they at the time desired to
do so.

41. Although we refer to this licence for the sake of convenience as a contract, in the sense of the
law relating to assignments, it is really more accurate to construe it in reference to the assignment
clause as a bare licence. In the English cases concerning non-assignable contracts, the primary
problems arise in the obligation sense: The question asked by the courts in England is, is it
proper to enforce obligations against a assignee in favour of a contractor where that contractor
has stated in the contract that there is one party against which he specifically agrees to enforce
those obligations. In a licence contract, although obviously there are obligations passing in
either direction, the primary intention is that a licensor grants to a licensee. There is a tendency
only for benefits to pass in either direction often in those same cases, the English courts to hold
that while obligations should not be enforceable against a patty who has not agreed to be bound,
benefits can very well be enforceable.

LINDEN GARDENS TRUST LTD V LENESTA SLUDGE DISPOSALS Ltd AND OTHERS;
ST MARTINS CORPORATION Ltd AND ANOTHER V SIR ROBERT MCALPINE & SONS
Ltd, 30 CON LR 1,57 BUILD LR 57, per Sir Michael Kerr, in the Court of Appeal (Civil
Division)

     "I do not see why a prohibition against assignment of "this contract" should preclude the
assignment of claims for damages under the contract, at any rate when the causes of
     action have accrued. Both are choses in action, and in neither case would their assignment
     involve an assignment of "this contract". The present contracts therefore differ from those
     which fell to be construed in HELSTAN SECURITES LTD V HERTFORDSHIRE CC
     [1978]13 ALL ER 262 and in REED PUBLISHING HOLDINGS Ltd V KING'S
     REACH INVESTMENT UNREPORTED, 25 MAY 1983, where the assignment of any
     "benefit or interest" under the contracts was also expressly prohibited"

42. The contract also provides that the licensor shall have the right to terminate the licensee's
contractual rights in the event that the licensee tails to adequately promote and sell the product. It
is specifically provided that the licensor shall have good faith discussions with the licensee in an
attempt to rectify' the situation.

43 The question which the courts would apply if they ever were to get as far as construing the
assignment clause in this matter would be is the refusal to give permission to assign reasonable?

44 What the landlord and tenant cases do show is that the courts will liberally construe these
'procedure' cases: As an example, if consent is unreasonably refused, the tenant is entitled to
assign (and bring an action for breach of the landlord's covenant). IDEAL FILM
RENTING COMPANY Ltd V. NIELSON (1921) 1 Ch 575 CURTIS MOFFAT V.
WHEELER [1929] 2 Ch. 224 AT 226.

Also, in 'THEODOROU V. BLOOM [1964] 3 ALL E.R. 399 It was held that if there is an
unauthorised assignment to a person who would have qualified as a proper person, an action for a
declaration will lie by the assignor that the assignment was valid4

45. I am instructed that it is common in the computer or computer software business for
marketers to sell competing software. The English courts may consider it in the public interest
for companies to continue doing so; indeed there is a significant area of law in England
concerned specifically with ensuring that agreements are not so "in restraint of trade" that the
English courts may find it to be in the public interest that such arrangements continue. It is
difficult to see how the public interest could be affected adversely by one company being able to
offer competing products in an area and explain how these products might best fit the customer's
needs.

46. Lastly I must address the issue raised in the memorandum concerning companies which
cannot be taken over by other companies, or instances in which the courts will prevent takeovers
or mergers.

The only legislation in England governing this area of law is the monopolies and mergers
legislation. This legislation is intended to govern the creation of monopolies in England. As
such it can only apply to companies over which English law holds sway. Generally this applies
only to English companies. The concept that it could apply to world-wide licensing arrangements
between foreign non-exclusive licensees (of English products) and foreign competitors is a
curious one. If It could apply (where a monopoly were to be shown, which is certainly not the
case here), it could only apply to the merger of those companies and their activities in England.
In this regard, it is instructive to consider the workings of the legislation. The legislation does not
prohibit certain defined takeovers or mergers; it merely sets out that if a serious monopoly
situation be suggested to the Secretary of State, the Secretary of State MAY refer the proposed
merger to the Monopolies and Mergers Commission for a report. If their report is adverse, the
secretary of State MAY exercise powers to remedy or prevent the adverse effects.

47. The only situation where the Secretary of State must refer to the Commission is one in which
the merger concerns a newspaper with circulation (in the merged group) of 500,000 or more. In
that case, normally the Secretary of State will require a report from the Monopolies and Mergers
Commission. Such mergers require his written consent.

48. It is suggested that for no fully explained reason, the courts should not approve tile merger
between two companies which the plaintiff describes as being competitors. Possibly it is
suggested the Minnesota court should prevent the merger on public policy rounds. That has
never been the situation in English law. Quite the reverse: in R. J. REUTER CO., LTD. V.
FERD MULHENS [1953] WLR 503 the Court upheld the transfer of a trade mark which was
the mainstay of a defendant's world-wide business to the previous owner of the trade mark's main
competitor who was passing off his product as that of the previous owner.

49. Under the circumstances I cannot see how an English court, on the authorities, would grant
Tibor Darves relief prior to the expiry of the 60 day period(see footnote) (or at all) based on the
unspecified and largely unexplained breaches of a contract which they freely entered into (and
which they were significantly responsible for drafting) which plainly does not cover the breach
situation on which their pleading states that they rely.

1, Jonathan Roger Steinberg, declare under penalties of perjury under the laws of the United
States that this opinion represents a fair and accurate opinion on and assessment of the laws of
the England in so far as those laws relate to the above-titled action

City of New York )

County of New York )
Dated this 8th day of August 1993 J R. Steinberg



-----------------------
Footnote:
This footnote is included, not to show that the similar facts of the case mentioned apply (which
clearly they don't) but to show that English courts require contractual terms and
breach-procedures to be exhausted before they will intervene:
Although the term in the cited case was a statutary notice-requirement and although there had
clearly been a breach of a covenant not to assign, the Courts declined to intervene because the
request for intervention was premature. In GROVEBURY MANOR FARM Ltd V W
SEYMOUR PLANT SALES & HIRE Ltd (1979] 3 ALL ER 504 C of A, per LORD
RUSSELL OF KILLOWEN.

     "The second defendant, without the lessor's consent, executed an assignment of the
     remainder of the term to the defendant. Although that was without the consent of the
     plaintiff, it is, in my judgment, perfectly plain that that assignment operated to vest the
     remainder of the term in the first defendant.

     "It is the fact, of course, that the assignment was in breach of covenant but all that means
     is that there is an occasion offered to the lessor to forfeit the lease and put an end to it".

     "But for the time being I find myself only able to agree with the learned judge that the
     proceedings claiming forfeiture are premature because the proper notice required by s 146
     has not been served".



FOR A LINK TO THE SITE OF THE LAW FIRM WHICH HANDLED THIS ACTION IN THE MINNESOTA FEDERAL DISTRICT COURT, PLEASE PRESS HERE