Exhibit 4.3
Dated 2002
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Baltimore Technologies Plc
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Baltimore Technologies UK Limited
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Clearswift Limited
Master Sale and Purchase Agreement
Contents
Clause Page
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1. Interpretation 2
2. Sale of the Shares, Business and Assets 13
3. Conditions 13
4. Pre-completion matters 15
5. Put and call option 17
6. Consideration 17
7. VAT 22
8. Share completion 22
9. Asset Completion 25
10. Warranties 26
11. Limitation on claims 27
12. Apportionment of business responsibility 31
13. Employees 32
14. Book Debts 36
15. Contracts 36
16. Indemnities 38
17. Confidentiality and announcements 38
18. Intellectual Property 39
19. .Guarantee of BUK'S Obligations 40
20. Guarantee of the Seller's obligations 42
21. Further assurance and availability of information 43
22. Termination 44
23. Interest 44
24. Continuing obligations and assignment 44
25. Costs 45
26. Notices 45
27. Severability 46
28. Entire agreement and variation 46
29. General provisions 46
30. Governing law and jurisdiction 47
Schedule 1 48
The Shares 48
Schedule 2 49
The Company and the Subsidiary Undertakings 49
Schedule 3 54
Allocation of Asset Consideration 54
Schedule 4 55
Warranties 55
Schedule 5 91
Tax Covenant 91
Schedule 6 109
Properties 109
Schedule 7 111
Intellectual Property Rights 111
Schedule 8 119
The Completion Accounts 119
Schedule 9 126
Contracts 126
Schedule 10 137
Products 137
Schedule 11 139
BUK Property 139
Schedule 12 142
Employees 142
Schedule 13 143
BTA Agreement 143
Schedule 14 146
Excluded Assets 146
Schedule 15 147
Deed of Covenant 147
Schedule 16 151
Assignment of BUK Intellectual Property Rights 151
Schedule 17 163
Transitional Services 163
Schedule 18 171
Pre-completion Undertaking 171
Schedule 19 173
Call Option and Put Option Notices 173
Schedule 20 175
Certigram Licence 175
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MASTER SALE AND PURCHASE AGREEMENT
THIS AGREEMENT is made the day of 2002
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BETWEEN:
(1) Baltimore Technologies plc, a company registered in England and Wales
(registered number 2643615), whose registered office is at 1310 Xxxxxxxxx,
Xxxxxxxxx Xxxxxxxx Xxxx, Xxxxxx, Xxxxxxx, XX0 0XX (the "Seller");
(2) Baltimore Technologies UK Limited, a company registered in England and
Wales (registered number 1467493), whose registered office is at 1310
Xxxxxxxxx, Xxxxxxxxx Xxxxxxxx Xxxx, Xxxxxx, Xxxxxxx, XX0 0XX ("BUK"); and
(3) Clearswift Limited, a company registered in England and Wales (registered
number 1607372), whose registered office is at Bessemar House, Bessemar
Road, Welwyn Garden City, Hertfordshire AL7 1HH (the "Purchaser").
RECITALS:
(A) Content Technologies Holdings Limited is a company incorporated in England
and Wales (registered number 3498084), whose registered office is at 1310
Xxxxxxxxx Xxxxxxxxx Xxxxxxxx Xxxx, Xxxxxx, Xxxxxxxxx XX0 0XX (the
"Company").
(B) At the date hereof the Company has an issued share capital
of(pound)20,739.05 divided into the following classes and numbers of
shares:
(a) 9,184,997 Ordinary Shares;
(b) 3,622,000 A Ordinary Shares;
(c) 3,470,320 B Ordinary Shares;
(d) 4,031,000 C Ordinary Shares; and
(e) 430,734 E Deferred Shares
all of which have been allotted and issued and are fully paid. Further
particulars of the Company and of the Subsidiary Undertakings are set out
in Schedule 2.
(C) The Seller is the registered owner of all the issued shares in the Company
as set out in Schedule 1 (the "Shares").
(D) The Purchaser has offered to purchase the Shares and the Seller has agreed
to sell the Shares to the Purchaser on and subject to the terms set out in
this Agreement.
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(E) The Purchaser wishes to grant BUK a put option on and subject to the terms
of this Agreement to require the Purchaser to purchase the Assets and
Business and BUK wishes to grant the Purchaser a call option on and subject
to the terms of this Agreement to require BUK to sell the Assets and
Business.
IT IS AGREED:
1. INTERPRETATION
1.1 In this Agreement (including its Recitals and Schedules), the following
words and expressions have the meanings respectively set opposite them:
"A Ordinary Shares" means all the issued and allotted "A" ordinary shares
of (pound)0.001 each in the capital of the Company;
"Accounts" has the meaning given to that term in paragraph 4 of Schedule 4;
"Agreement" means this document together with all Recitals and Schedules;
"Announcement" means the announcement in the agreed terms by the Purchaser
of the transactions contemplated under this Agreement;
"Arlington Service Agreement" means the agreement for services dated 27
July 1999 and made between (1) Arlington Business Services Limited and (2)
Content Technologies Limited.
"Assets" means all of the undertakings and assets of BUK or any member of
the Seller's Group used wholly or mainly in the Business of any nature
whatsoever including, without limitation, the Contracts, the Goodwill, the
Book Debts, the BUK Intellectual Property Rights, the BUK Information
Technology, the Records, the Plant and Equipment and the Stocks and Work in
Progress, any rights against third parties (in so far as the same are
transferable and relate wholly or mainly to the Assets or the Business),
and all other physical assets whatsoever that are owned by BUK or any
member of the Seller's Group and which are used wholly or mainly in the
Business but not including the Excluded Assets;
"Asset Completion" means the completion of the sale and purchase of the
Assets and Business pursuant to this Agreement in accordance with clause 9;
"Asset Completion Date" means 1 April 2002;
"Asset Consideration" means the purchase price for the Assets and the
Business determined pursuant to clause 6.9(a);
"B Ordinary Shares" means all the issued and allotted B ordinary shares of
(pound)0.001 each in the capital of the Company;
"Balance Sheet Date" means 31 December 2000;
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"Baltimore Representatives" means the individuals appointed by the Seller
to represent it on the Integration Committee, namely Xxxxx Xxxxx, Xxxxx
Xxxxxx, Xxxx Xxxxxx, Xxxx Xxxxx and Xxxxx Xxxxxx;
"Book Debts" means all third party trade debts (including, in addition, VAT
if applicable) due and payable to BUK or any other member of the Seller's
Group in respect of the Business up to the Completion Date, and any amounts
repayable to BUK or recoverable by BUK from the Inland Revenue or HM
Customs & Excise but not the Repayment;
"Break Fee" means (pound)800,000;
"BTA Agreement" means the agreement in the agreed terms to be entered into
by the Seller in relation to Baltimore Technologies Australasia Pty Limited
as set out in Schedule 13;
"BUK Guarantee" has the meaning given to it in clause 20.2;
"BUK Information Technology" means the Information Technology owned by BUK
or any other member of the Seller's Group and used wholly in connection
with the Business together with the PABX and CISCO servers;
"BUK Intellectual Property Rights" means:
(a) the BUK Software IPR; and
(b) the Intellectual Property which or the subject matter of which is
owned and used or intended to be used by BUK wholly in the carrying on
of the Business or as to which BUK otherwise has any rights resulting
from the carrying on of the Business including but not limited to the
Intellectual Property set out in Schedule 7;
"BUK Property" means the leasehold property described in Part A of Schedule
11;
"BUK Software IPR" means the Intellectual Property in the Products to the
extent that such Intellectual Property is owned (in whole or in part) by
BUK or any other member of the Seller's Group;
"BUK Underlease" means the underlease of the BUK Underlease Property in the
agreed terms (subject to any amendments required by the Landlord and agreed
by the parties acting reasonably) and to be made between (1) the Seller and
(2) the Purchaser or the Purchaser and Content Technologies Limited;
"BUK Underlease Property" means the ground and first floors, 1310
Xxxxxxxxx, Xxxxxxxxx Xxxxxxxx Xxxx, Xxxxxx, Xxxxxxx, Xxxxxxxxx XX0 0XX as
more particularly described in the BUK Underlease and forming part of the
BUK Property;
"Business" means the business of developing (either generally or on a
bespoke basis), selling (either directly or through distribution
relationships) and maintaining software and services
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(technical, consulting and training) that principally provide policy-based
secure content management as carried on by BUK as at the Completion Date
and which is currently known as the Content Security Group or alternatively
as Content Technologies or alternatively as the MIMEsweeper Division;
"Business Day" means any day other than a Saturday or Sunday or English
bank holiday;
"Call Option" has the meaning given to it in clause 5.1;
"C Ordinary Shares" means all the issued and allotted C ordinary shares of
(pound)0.001 each in the capital of the Company;
"Certigram Licence" means the licence of technology and trade xxxx rights
in the agreed terms as set out in Schedule 20;
"Circular" means a class 1 circular in relation to the EGM incorporating
the Resolutions and containing the recommendation of the directors of the
Seller to vote in favour of the Resolutions, such circular being prepared
in accordance with the requirements of the UK Listing Authority which
contains or has enclosed with it a notice complying with the Companies Xxx
0000 and with the articles of association of the Seller duly convening such
an EGM no later than 18 March 2002;
"Clearswift Representatives" means the individuals appointed by the
Purchaser to represent it on the Integration Committee, namely Xxxxx
Xxxxxxxx, Xxxxxxx Xxxxx and Xxx Xxxxxx;
"Code" means the City Code on Takeovers and Mergers;
"Companies Act 1985" means the Companies Xxx 0000 of England and Wales;
"Competing Offer" has the meaning given in clause 4.2;
"Completion" means the Share Completion and/or the Asset Completion as the
context may require;
"Completion Accounts" has the meaning given in paragraph 1 of Schedule 8;
"Completion Net Assets" has the meaning given in paragraph 3 of Schedule 8;
"Completion Working Capital Amount" has the meaning given in Schedule 8;
"Consideration" means the aggregate of the Share Consideration and the
Asset Consideration;
"Content Excluded Items" has the meaning given in Schedule 8;
"Contracts" means all contracts, engagements, obligations and arrangements
of, and rights, benefits, equipment leases and licences entered into or
enjoyed by BUK or any other member
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of the Seller's Group in relation to the Business of any nature whatsoever,
which remain to be performed or enjoyed at the Completion Date including
without limitation those which are listed in schedule 9;
"Counterparty" means in relation to a Contract, the party or parties to
such Contract other than the Seller or BUK (as the case may be);
"de minimis claims" has the meaning given in clause 11.6(a);
"de minimis tax claims" has the meaning given in clause 11.7(a);
"Deed of Adherence" means the deed of adherence to the shareholders
agreement in relation to the Purchaser in the agreed terms, to be entered
into, inter alia, by each of the Seller, Amadeus Capital Partners, Kennet
Capital and Cazenove Private Equity;
"Deed of Covenant" means the deed in the agreed terms as set out in
Schedule 15;
"Deed of Release" means the deed of release of all liabilities (whether
past, present or future) of Content Technologies Limited under the 1220
Parkview Lease and all documents supplemental to it and the Arlington
Service Agreement and to be made between (1) API (No. 5) Limited and (2)
Arlington Business Services Limited and (3) Content Technologies Limited.
"Disclosure Letter" means the letter of the same date as this Agreement
delivered to the Purchaser by the Seller together with the documents
annexed thereto;
"E Deferred Shares" means all the issued and allotted series E deferred
shares of (pound)0.001 each;
"EGM" has the meaning given to that term in clause 3.1;
"Employees" means those persons employed by BUK in the Business on the
Completion Date and whose names are listed in Schedule 12 to this Agreement
and also such additional employees employed in the Business after the date
of this Agreement in direct replacement for or, as the parties may agree
from time to time, in addition to such employees;
"Employment Statutes" means all legislation (whether of the United Kingdom
or elsewhere), relating in any way to the employment of employees or other
workers (whether individually or collectively) or the terms on which they
are employed and including, for the avoidance of doubt, any such
legislation relating to health and safety;
"Encumbrance" means any mortgage, charge, pledge, lien, option, right of
first refusal, right of pre-emption, or preference granted to any third
party, or any other security interest of any kind (or an agreement or
commitment to create any of the same);
"Environment" means all or any of the following media: air (including air
within buildings or other structures and whether below or above ground);
land (including buildings and any other
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structures or erections in, on or under it and any soil and anything below
the surface of the land); land covered with water; and water (including
ground and surface water) and any living organism supported by such media;
"Environmental Law" includes all or any statute or common law, rule,
regulation, treaty, Directive, direction, decision of the court, by-law,
code of practice, circular, guidance note, order, notice or demand of any
government, statutory or regulatory authority or agency in any jurisdiction
applicable to the Group and/or the business carried on by the Group in
force at Completion and concerning:the pollution, conservation or
protection of the Environment and the health or wellbeing of any living
organisms supported by the Environment;
"Event" means any:
(a) event, matter or circumstance which constitutes a breach of this
Agreement by the Seller or BUK, including, without limitation, any of
the Pre-Completion Undertakings other than where such event, matter or
circumstance directly resulted from actions or omissions approved
pursuant to an Integration Committee Minute or which would constitute
a breach of Warranty if the Warranties were to be repeated at
Completion; or
(b) event, matter or circumstance which would give rise to a claim under
the Tax Covenant if the Tax Covenant was executed at Completion;
"Excluded Assets" means those assets listed in Schedule 14;
"Goodwill" means the goodwill of BUK in connection with the Business and
the exclusive right for the Purchaser and the Purchaser's successors in
title and licensees to use all trade names, other names and marks used at
any time in relation to the Business and to represent itself as carrying on
the Business in succession to BUK, including the right to all lists and
particulars of customers and suppliers BUK in relation to the Business and
all other trading, operating and confidential information relating to the
Business and the right to the benefit of all restrictive covenants and
confidentiality obligations affecting the Business;
"Group" means the Company and the Subsidiary Undertakings as at the date of
this Agreement, and "Group member" shall be construed accordingly;
"Group Debt Restructuring" means any steps taken pursuant to clause 6.4 to
transfer, novate, eliminate, distribute or otherwise deal with any
indebtedness where such step is entered into on or before Asset Completion;
"Group Product IPR" means the Intellectual Property in the Products to the
extent that such Intellectual Property is owned (in whole or in part) by
Group members;
"ICTA" means the Income and Corporation Taxes Xxx 0000;
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"Indemnities" means the indemnities set out in clause 6.4, clause 15.3 and
clause 16;
"Information Technology" means information technology infrastructure
(including without limitation hardware, software, firmware, networks and
connecting media) and all manuals or other documents relating thereto but
not the Products or any Intellectual Property relating thereto;
"Insolvency Event" means in respect of any company, that such company has
ceased to trade, been dissolved, is unable to meet its debts as they fall
due within the meaning of section 123 of the Insolvency Xxx 0000, has
become insolvent or gone into liquidation (other than for a solvent
liquidation as part of a reorganisation, reconstruction or amalgamation) or
had a petition presented, (which has not been withdrawn or set aside) to
wind it up for the appointment of an administrator, entered into
administration, administrative receivership, receivership, a scheme of
arrangement for the benefit of its creditors or any analogous or similar
procedure in any jurisdiction other than England or any form of procedure
relating to insolvency or dissolution in any jurisdiction;
"Integration Committee" means the committee that will be established by the
Seller and the Purchaser for the purpose of monitoring the operation of
each Group member and the Business between the date of this Agreement and
the Completion Date;
"Integration Committee Minute" means a written minute recording a decision
of the Integration Committee which is signed by a Clearswift Representative
and a Baltimore Representative;
"Intellectual Property" means patents (including supplementary protection
certificates and utility models) , trade marks, service marks, domain
names, registered designs, utility models, design rights, topography
rights, rights in databases, copyrights, inventions, trade secrets, and
other confidential information, know-how, business or trade names, get-up,
and all other intellectual property and neighbouring rights and rights of a
similar or corresponding character in any part of the world (whether or not
the same are registered or capable of registration) and all applications
and rights to apply for or for the protection of any of the foregoing;
"Intellectual Property Records" means all deeds, documents of title,
certificates, correspondence and other records or documents in the
possession of the Seller or BUK relating to registered Intellectual
Property Rights or BUK Intellectual Property Rights (and current
applications therefor) which are owned by the Group or BUK and which are
used in connection with the Business;
"Intellectual Property Rights" means
(a) the Group Product IPR; and
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(b) the Intellectual Property which or the subject matter of which is
owned and used or intended to be used by the Group members or as which
the Group members otherwise have any rights including without
limitation the specific rights which are listed in Schedule 7;
"Interim Accounts" means the reviewed consolidated combined financial
statements of the Group and the Business for the nine month period ending
on the Interim Balance Sheet Date;
"Interim Balance Sheet Date" means 30 September 2001;
"Landlord" means the Seller's immediate landlord under the lease of the BUK
Property and includes where relevant any superior landlord.
"Latest Completion Date" means 7 April 2002 unless otherwise agreed by the
Purchaser and the Seller in writing;
"Listing Rules" means the listing rules of the UK Listing Authority in its
capacity as competent authority under the Financial Services and Markets
Xxx 0000 (as amended or re-enacted from time to time);
"Loan Notes" means the five per cent non compounding unsecured loan notes
2003 of (pound)1 each of the Purchaser to be created by the Purchaser in
the agreed terms;
"Official List" means the official list of the UK Listing Authority;
"Options" means options to acquire ordinary shares in the Seller issued
pursuant to the Plans;
"Option Holders" means all those persons who hold Options;
"Ordinary Shares" means all the issued and allotted ordinary shares
of(pound)0.001 in the Company;
"Outstanding BUK Group Debts" has the meaning given to it in clause 6.4;
"Outstanding Group Payables" has the meaning given to it in clause 6.4;
"Panel" means the Panel on Takeovers and Mergers;
"Plans" means the Content Technologies Holdings Limited 2000 Stock Option
Plan and the Baltimore Technologies plc 1999 Stock Incentive Plan;
"Plant and Equipment" means the plant, machinery, equipment, tools,
furniture, fixtures and fittings owned by BUK or any other member of the
Seller's Group and ordinarily used in the carrying on of the Business as
reflected in the Interim Accounts;
"Pre-Completion Undertakings" means the undertakings set out in Schedule
18;
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"Products" means the products listed in Schedule 10 including any updates,
developments, new releases and other modifications or additions existing in
relation thereto at the date of this Agreement;
"Properties" means those properties where the business of the Group is
carried on as listed in Schedule 6;
"Provisional Asset Consideration" has the meaning given to it in clause
6.1(b);
"Provisional Share Consideration" has the meaning given to it in clause
6.1(a);
"Purchaser's Auditors" means Xxxxxx Xxxxxxxx;
"Purchaser's Solicitors" means Xxxxxx Xxxx;
"Put Option" has the meaning given to it in clause 5.4;
"Records" means BUK's books and records relating wholly to the Business in
whatever medium held including, without limitation, all of the books of
account, income and expenditure records, stock and other records,
information relating to customers and suppliers and all price lists,
catalogues, sales, promotional and advertising literature;
"Registration Rights Agreement" means the registration rights agreement in
relation to the Purchaser in the agreed terms to be entered into by, inter
alia, each of the Seller, Amadeus Capital Partners, Cazenove Private Equity
and Kennet Capital;
"Relevant Documents" has the meaning given to it in clause 28.1;
"Relevant Substance" means any substance (whether in a solid or liquid form
or in the form of a gas or vapour and whether alone or in combination with
any other substance and including for the avoidance of doubt radioactive
emissions) or waste which is capable of causing harm to man or any other
living organism supported by the Environment, or damaging the Environment
or public health or welfare);
"Relief" has the meaning given to that term in paragraph 4 of Schedule 4;
"Repayment" has the meaning given to that term in Schedule 14;
"Resolutions" means the various resolutions in the agreed form to be passed
at the EGM referred to in clause 3.1;
"Seller's Auditors" means KPMG Audit Plc;
"Seller's Group" means the Seller and any subsidiary undertaking of the
Seller following Completion;
"Seller's Solicitors" means Lovells;
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"Seller's Guarantee" has the meaning given in clause 19.2;
"Senior Management" means Xxxxx Xxxxxx, Xxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxxx
Xxxxxxx, Xxxxx Xxxxx, Xxx Xxxxx, Chak Xxxxx, Xxxx Hockey, Xxxxx
Xxxxxxxxxxx, Xxx Xxxxxxxx, Xxxx Xxxxxx, Xxxxxx Xxxxxxxx, Xxxx Xxxxx and
Xxxxxxx Xxxxxxx.
"Share Completion" means the completion of the sale and purchase of the
Shares pursuant to this Agreement in accordance with clause 8;
"Share Completion Date" means the later of 31 March 2002 and the date which
is the third Business Day following the date which the conditions in clause
3.1 are all duly satisfied or waived in accordance with clause 3;
"Share Consideration" means the consideration payable for the Shares
pursuant to clause 6.9(b);
"Shares" has the meaning given to that term in the Recitals;
"Stocks and Work in Progress" means goods purchased or agreed to be
purchased, products and services in the course of production and finished
goods of BUK or any other member of the Seller's Group in each case for use
or resale in the ordinary course of the Business;
"Subsidiary Undertakings" means the subsidiary undertakings in respect of
which the Company or Content Technologies Limited is a parent undertaking
at the date of this Agreement being those companies details of which are
set out in Schedule 2;
"Substantiated Claim" has the meaning given to it in clause 6.17;
"Sydney Licence" means the licence of the Sydney Property in the agreed
terms and to be made between (1) Baltimore Technologies Australasia Pty
Limited and (2) Content Technologies (Asia/Pacific) Pty Limited;
"Sydney Property" means that part of the leasehold premises known as Xxxxx
0, 00 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxx XXX as is more particularly
described in the Sydney Licence;
"Tax and Taxation" means any and all forms of taxes, levies, imposts,
contributions, duties and charges in the nature of taxation and all
withholdings or deductions in respect thereof of whatever nature imposed
whether of the United Kingdom or elsewhere (including for the avoidance of
doubt, National Insurance contribution liabilities in the United Kingdom
and corresponding obligations elsewhere) and whether directly or primarily
chargeable against, recoverable from or attributable to the Company or any
other person including all fines, penalties, charges and interest relating
to the same;
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"Tax Covenant" means the deed of tax covenant in the agreed terms to be
entered into by the Seller and the Purchaser as set out in Schedule 5;
"Tax Warranties" means those warranties set out in paragraph R of Part A of
Schedule 4 and paragraph O of Part B of Schedule 4;
"TCGA" means the Taxation of Chargeable Gains Xxx 0000;
"Transfer Regulations" means the Transfer of Undertakings (Protection of
Employment) Regulations 1981;
"Transferee" means the Purchaser or such other wholly owned subsidiary of
the Purchaser which shall purchase the Assets and Business pursuant to this
Agreement;
"UK GAAP" means all statements of standard accounting practice, financial
reporting standards and urgent issues task force abstracts issued by the
Accounting Standards Board, and extant at the Completion Date;
"UK Listing Authority" means the Financial Services Authority in its
capacity as competent authority under Part IV of the Financial Services Xxx
0000 (as amended, restated or re-enacted from time to time) and in the
exercise of its function in respect of the admission to the Official List
otherwise than in accordance with Part IV of the Financial Services Xxx
0000 (as amended, restated or re-enacted from time to time);
"VAT" means value added tax;
"VATA" means Value Added Tax Xxx 0000;
"Warranties" means the warranties as set out in Schedule 4 of this
Agreement including, except where expressly excluded, the Tax Warranties;
and
"Warranty Claim" has the meaning given in clause 11.6.
"1220 Parkview Lease" means the lease dated 28 May 1999 and made between
(1) API (No. 5) Limited and (2) Content Technologies Limited at premises
known as 0000 Xxxx Xxxx Xxxxxxxxx Business Park, Theale.
1.2 In this Agreement, unless the context otherwise requires:
(a) references to this Agreement or any other document include this
Agreement or such other document as varied, modified or supplemented
in any manner from time to time after the date of this Agreement;
(b) references to any party shall, where relevant, be deemed to be
references to or to include, as appropriate, their respective
permitted successors, assigns or transferees;
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(c) references to Recitals, clauses and Schedules and sub-divisions of
them are references to the recitals and clauses of, and schedules to,
this Agreement and sub-divisions of them respectively;
(d) references to any enactment include references to such enactment as
re-enacted, amended or extended on or before the date of this
Agreement and any subordinate legislation made from time to time under
it;
(e) references to a "person" include any individual, company, corporation,
firm, partnership, joint venture, association, organisation,
institution, trust or agency, whether or not having a separate legal
personality;
(f) references to the one gender include all genders, and references to
the singular include the plural and vice versa;
(g) any reference to indemnifying any person against any circumstance
includes indemnifying and holding that person harmless from all
actions, claims, demands and proceedings of any nature from time to
time made against that person and all direct losses, damages,
payments, awards, costs or expenses made, suffered or incurred by that
person directly from the event giving rise to the claim but shall not
extend to consequential loss;
(h) headings are inserted for convenience only and shall be ignored in
construing this Agreement;
(i) the words "company", "subsidiary", "subsidiary undertaking" and
"holding company" have the meanings given to them by the Companies Xxx
0000 as amended to the date hereof;
(j) references to "(pound)" are to pounds sterling, the lawful currency of
the United Kingdom, "$" are to dollars, the lawful currency of the
United States of America and AUS $ are to Australian dollars, the
lawful currency of Australia; and
(k) references to any English legal term for any action, remedy method of
judicial proceeding, legal document, legal status, Courts official or
any legal concept of thing shall in respect of any jurisdiction other
than England be deemed to include what most nearly approximates in
that jurisdiction to the English legal term.
1.3 The Recitals and Schedules to this Agreement form part of it.
1.4 Any reference in this Agreement to a document being "in the agreed terms"
is to a document in the terms agreed between the parties and, for
identification purposes only, initialled by the Seller and the Purchaser or
on their behalf on or before the date of this Agreement or if there is no
form initialled then is to a document in a form the parties to the relevant
agreement agree.
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2. Sale of the Shares, Business and assets
2.1 On and subject to the terms of this Agreement, the Seller agrees to sell
with full title guarantee and free from Encumbrances and the Purchaser
(relying on the Warranties, undertakings and indemnities contained in this
Agreement and the Tax Covenant) agrees to purchase the Shares with effect
from the Share Completion and BUK agrees to sell with full title guarantee
and free from any Encumbrances and the Purchaser (relying on the
Warranties, undertakings and indemnities contained in this Agreement and
the Tax Covenant) agrees to purchase the Assets and the Business as a going
concern with effect from the Asset Completion.
2.2 Subject to clause 15 in relation to the Contracts, the Purchaser shall not
be obliged to complete the purchase of the Assets and the Business unless:
(a) the purchase of all of the Shares has first been completed in
accordance with clause 8; and
(b) the purchase of the Business and the Assets is completed in accordance
with clause 9.
2.3 The Purchaser shall not assume under this Agreement and nothing under this
Agreement shall operate to transfer to the Purchaser or to make it
responsible for any of the debts, liabilities or other obligations of the
Seller or BUK (in relation to the Business) except to the extent expressly
provided under this Agreement.
2.4 On and subject to the terms of Part B of Schedule 11 of this Agreement, the
Seller agrees to grant and the Purchaser agrees (subject to the exercise of
the Put Option or the Call Option) to accept and, if appropriate, to
procure the acceptance by Content Technologies Limited of the BUK
Underlease.
2.5 On and subject to the terms of this Agreement the Seller shall procure the
grant and the Purchaser shall procure the acceptance by Content
Technologies (Asia/Pacific) Pty Limited of the Sydney Licence.
3. Conditions
3.1 The sale and purchase of the Shares and the sale and purchase of the Assets
and the Business are each conditional upon:
(a) the passing, on or before the Completion Date, at a duly convened
extraordinary general meeting ("EGM") of the Seller, of resolutions
substantially in the agreed form (the "Resolutions") to, amongst other
things, approve the terms of this Agreement relating to the sale and
purchase of the Shares and the sale and purchase of the Assets and the
Business and the grant of the BUK Underlease and the transactions
hereby contemplated;
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(b) no Insolvency Event having occurred in relation to the Seller or BUK
prior to Completion; and
(c) completion of the Deed of Release.
3.2 The sale and purchase of the Assets and the Business shall be conditional
upon the sale and purchase of the Shares and upon the exercise of the Call
Option or the Put Option in accordance with clause 5 of this Agreement.
3.3 The Seller shall (subject to all applicable laws) use its reasonable
endeavours to ensure that the condition specified in clause 3.1(a) is
satisfied and that Completion shall take place as soon as practicable and
in any event not later than the Latest Completion Date.
3.4 If Completion does not take place on or before the Latest Completion Date
because the condition specified in clause 3.1(a) has not been satisfied by
that date, the Seller agrees to pay the Purchaser the Break Fee. The Break
Fee shall be payable by wire transfer of same day funds to an account
designated by the Purchaser no later than two business days after the
Latest Completion Date. For the avoidance of doubt, the Break Fee shall be
payable where the condition specified in clause 3.1(a) has not been
satisfied irrespective of whether or not the reason therefor is the failure
to duly convene and/or hold the EGM or otherwise.
3.5 If, following satisfaction of the condition specified in clause 3.1(a) and
3.1(c), Completion does not take place on or before the Latest Completion
Date (other than as a result of the condition in clause 3.1(b) not having
been satisfied or waived before the Latest Completion Date), the Purchaser
agrees to pay the Seller the Break Fee. The Break Fee shall be payable by
wire transfer of same day funds to an account designated by the Seller no
later than two Business Days after the Latest Completion Date.
3.6 The parties hereby agree and acknowledge that the Break Fee is a reasonable
and genuine pre-estimate of their respective loss if Completion does not
take place on or before the Latest Completion Date and is not a penalty.
The payment of a Break Fee is without any prejudice to any other rights and
remedies which the Purchaser may have against the Seller or which the
Seller may have against the Purchaser (as the case may be) including
without limitation, the right to specific performance.
3.7 The Purchaser may waive (to the extent thought fit by the Purchaser) either
or both of the conditions set out in clause 3.1(b) and clause 3.1(c) or any
part of them and if the Purchaser exercises its right to waive such
conditions or any part thereof the Seller shall be deemed to have also
waived the same conditions or any such part thereof. A waiver by the
Purchaser or a deemed waiver by the Seller under this clause is without
prejudice to any other rights which the Purchaser or Seller have under this
Agreement.
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4. Pre-completion matters
4.1 The Seller shall use all reasonable endeavours to procure the following:
(a) the Circular shall be posted to shareholders of the Seller by no later
than 20 Business Days following the date of this Agreement;
(b) the directors of the Seller shall not, subject to their fiduciary
duties, change their recommendation;
(c) that it will not directly or indirectly solicit any offer or
invitation for the Shares or the Assets and Business (or a material
part thereof) from any third party; and
(d) that the Seller shall, as soon as practicable following the date of
this Agreement but in any event prior to the date of posting of the
Circular, obtain an irrevocable undertaking from Xxxx Xxxxxx and each
of the directors of the Seller (in the agreed form) that they shall
vote their shares in the Seller in favour of the Resolution at the
EGM.
4.2 If, at any time before the EGM is held, a competing offer is made by any
person for the Shares and/or the Assets and Business (or a material part
thereof) (a "Competing Offer") the Seller shall procure that:
(a) notification of the receipt of such Competing Offer shall be sent
promptly to the Purchaser together with sufficient information to
enable the Purchaser to respond to the Seller with its views on such
Competing Offer;
(b) the Purchaser is given such reasonable additional information as it
may request about the Competing Offer and a reasonable period in which
to respond to the Seller with its views on the Competing Offer;
(c) if the directors of the Seller share the same views as the Purchaser
in relation to the Competing Offer and if the Seller is required under
the UK Listing Rules to post a circular to its shareholders in
relation to the Competing Offer then the circular will contain an
endorsement by the Seller in relation to those views which the Seller
and the Purchaser share in relation to the Competing Offer.
4.3 The Seller shall procure between the date hereof and the Share Completion
Date that (unless the Purchaser has given its prior consent thereto (which
consent will not be unreasonably withheld or delayed) and except as
expressly required or permitted pursuant to this Agreement (or pursuant to
an Integration Committee Minute) the businesses of each Group member will
be carried on in the ordinary and usual course (which for the avoidance of
doubt shall mean that the business of each Group member is conducted in
substantially the same manner as it was in the six months immediately prior
to the date of this Agreement) and in compliance with the Pre-Completion
Undertakings.
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4.4 BUK shall procure between the date hereof and the Asset Completion Date
that (unless the Purchaser has given its prior consent thereto (which
consent will not be unreasonably withheld or delayed) and except as
expressly required or permitted pursuant to this Agreement or pursuant to
an Integration Committee Minute) the Business will be carried on in the
ordinary and usual course (which for the avoidance of doubt shall mean that
the Business is conducted in substantially the same manner as it was in the
six months immediately prior to the date of this Agreement) and in
compliance with the Pre-Completion Undertakings.
4.5 BUK and the Seller shall procure that:
(a) the Purchaser is allowed reasonable access to the Properties and the
BUK Underlease Property, to the Senior Management and to the books and
records of each Group member and the Records of the Business upon
reasonable prior notice subject to prior appointment made with and
confirmed in writing by a director of the Company; and
(b) the Purchaser is kept promptly informed of all material matters
relating to the businesses, assets and affairs of the Group and the
Business and further that the Purchaser receives a copy of all board
papers, management reports and accounts as soon as reasonably
practicable after they have been made available to the directors of
the relevant Group member or BUK (as the case may be).
4.6 For the purposes of the articles of association of the Company the Seller
consents to the sale of the Shares to the Purchaser on and subject to the
terms set out in this Agreement and all other matters contemplated by this
Agreement.
4.7 The Purchaser shall be entitled to terminate this Agreement by written
notice to the Seller if, at any time before such date on which the
condition in clause 3.1(a) is satisfied, an Event occurs which materially
and adversely affects the business or financial position of the Group and
the Business taken as a whole. For the avoidance of doubt, where the
Purchaser is entitled to terminate this Agreement pursuant to this clause
4.7 but elects not to do so, any other rights which the Purchaser may have
(including, without limitation any claim in respect of any Event) shall
remain exercisable to their fullest extent by the Purchaser and shall be
unaffected by any such election.
4.8 The Seller shall use reasonable endeavours to procure that Baltimore
Technologies Inc. will procure a new office service agreement on the same
terms as the current agreement except that the tenant will be Content
Technologies Inc. in respect of the property in Florida as is more
particularly described in Schedule 6.
4.9 The Seller shall between the date hereof and the Asset Completion Date
procure the measurement of the BUK Property and the BUK Underlease Property
in accordance with the 4th Edition of the RICS Code of Measuring Conduct by
a surveyor first approved by the Purchaser and jointly instructed by the
Seller and Purchaser.
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4.10 The Seller shall between the date hereof and the Asset Completion Date
produce demise plans showing the BUK Underlease Property such plans to be
subject to the approval of the Purchaser acting reasonably.
5. Put and call option
5.1 In consideration of the payment of (pound)1 by the Purchaser to BUK,
receipt of which is hereby acknowledged by BUK, BUK hereby grants to the
Purchaser an option to require BUK to sell the Assets and the Business for
the Asset Consideration and on the terms and conditions of this Agreement
(the "Call Option").
5.2 The Call Option may only be exercised by the Purchaser following the Share
Completion and at any time in the period between 0.01am and 1.00pm on 1
April 2002 (or as otherwise agreed in writing between the parties) in the
manner set out in clause 5.3. If the Call Option is not so exercised it
will lapse and have no further effect.
5.3 The Call Option may only be exercised by the Purchaser in full (and not in
part) during the period specified in clause 5.2 by notice in writing from
the Purchaser to the Seller or the Seller's Solicitors in the form set out
in Part A of Schedule 19 to this Agreement. The Call Option will be deemed
to have been irrevocably exercised at the time and on the date when such
notice is received by the Seller or the Seller's Solicitors (as the case
may be).
5.4 In consideration of the payment of (pound)1 by BUK to the Purchaser,
receipt of which is hereby acknowledged by the Purchaser, the Purchaser
hereby grants to BUK an option to require the Purchaser to purchase (or
procure the purchase of) the Assets and Business for the Asset
Consideration and on the terms and conditions set out in this Agreement
(the "Put Option").
5.5 The Put Option may only be exercised by the Seller following the Share
Completion and or at any time in the period between 1.01pm and 5.30pm on 1
April 2002 (or as otherwise agreed in writing between the parties) in the
manner set out in clause 5.6. If the Put Option is not so exercised it will
lapse and have no further effect.
5.6 The Put Option may only be exercised in full (and not in part) during the
period specified in clause 5.5 by notice in writing from the Seller to the
Purchaser or the Purchaser's Solicitors in the form set out in Part B of
Schedule 19 to this Agreement. The Put Option will be deemed to have been
irrevocably exercised at the time and on the date when such notice is
received by the Purchaser or the Purchaser's Solicitors (as the case may
be).
6. Consideration
6.1 Subject to clauses 3.1 and 3.2, the provisional consideration payable on
Completion by the Purchaser for:
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(a) the Shares shall be the sum of (pound)2,000,000 (the "Provisional
Share Consideration"); and
(b) for the Assets and Business shall be the sum of (pound)18,500,000 (the
"Provisional Asset Consideration");
6.2 The Provisional Asset Consideration shall be discharged on Completion as
follows:
(a) as to the sum of (pound)6,000,000 by the allotment and issue credited
as fully paid to BUK, of Series "C" Shares of 0.06742p each of the
Purchaser allotted in accordance with clause 9.3(a);
(b) as to the sum of (pound)2,500,000 by the creation of the Loan Notes
and the issue of such Loan Notes by the Purchaser to BUK; and
(c) as to the sum of(pound)10,000,000 by the payment to BUK of such amount
in cash.
6.3 The Provisional Share Consideration shall be discharged in cash on Share
Completion.
6.4 The Seller agrees to use its reasonable endeavours to procure that
immediately prior to any sale of the Shares and at no expense to any Group
member (other than additional stamp duty in respect of the Share
Consideration), that as far as is legally possible there is no indebtedness
outstanding between any Group member and the Seller's Group. The Seller
will procure that any amount owing between any Group member and any member
of the Seller's Group will be owed to or from BUK. Such indebtedness as
does exist immediately prior to the Share Completion will comprise of
either amounts owing by BUK to any Group member (the "Outstanding BUK Group
Debts") or will comprise amounts owing to BUK by any Group member (the
"Outstanding Group Payables").
6.5 The Outstanding BUK Group Debts will be assumed on Asset Completion by the
Purchaser as part of the Asset Consideration and the Outstanding Group
Payables will be acquired on Asset Completion by the assignment or novation
to the Purchaser as part of the Assets.
6.6 The provisions of Schedule 8 shall apply to the drawing up and reviewing of
the Completion Accounts and the report by the Purchaser's Auditors on the
amount of the Completion Working Capital Amount.
6.7 If and to the extent that the Completion Working Capital Amount are:
(c) less than ((pound)700,000):
(i) the amount equal to that amount by which the Completion Working
Capital Amount is less than ((pound)700,000) shall be the
"Shortfall" subject to a maximum reduction of(pound)100,000; and
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(ii) the Seller (on behalf of BUK and itself as the case may be) shall
repay to the Purchaser the Shortfall in cash, on the fifth
Business Day following determination of the Completion Working
Capital Amount; or
(d) more than ((pound)700,000):
(i) the amount equal to that amount by which the Completion Working
Capital Amount is more than ((pound)700,000) shall be the
"Excess" subject to a maximum increase of(pound)100,000; and
(ii) the Purchaser shall pay to the Seller (on behalf of BUK and
itself as the case may be) the Excess in cash on the fifth
Business Day following determination of the Working Capital
Amount.
6.8 The aggregate amount of the Content Excluded Items shall be calculated in
accordance with Schedule 8 and shall be deducted from the Consideration by
the Seller repaying such amount to the Purchaser on the fifth Business Day
following determination of the Completion Working Capital Amount.
6.9 Within five Business Days, following the payment of the Excess or the
Shortfall (as the case may be), the Company will determine with the
reasonable assistance of the Seller and BUK the Asset Consideration and
Share Consideration such that:
(a) the Asset Consideration will be the following:
(i) the sums referred to in clause 6.2(a) and (b) and;
(ii) (pound)10,000,000 plus or minus the amount of the Shortfall or
Excess (or any component of the Excess or the Shortfall) as the
case may be that is fairly attributable to the Assets and the
Business less the amount of the Outstanding BUK Group Debts plus
the amount of the Outstanding Group Payables; and
(iii) the amount of the Outstanding BUK Group Debts assumed pursuant
to clause 6.5.
(b) the Share Consideration will be (pound)2,000,000 plus or minus the
amount of the Shortfall or Excess (or any component of the Excess or
the Shortfall) as is fairly attributable to the Shares, plus an amount
equal to the Outstanding Group Debts less the Outstanding BUK Group
Payables. The Share Consideration shall not exceed (pound)12,000,000.
6.10 The Asset Consideration shall be allocated amongst the Assets in the manner
set out in Schedule 3.
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6.11 The aggregate of the two amounts referred to in clause 6.9 in respect of
the Shortfall or the Excess, as the case may be, shall equal the Shortfall
or the Excess, as the case may be.
6.12 Any dispute concerning the determination of the Asset Consideration or
Share Consideration shall, in default of agreement between the Purchaser,
the Seller and BUK within 30 days of such determination, be determined by
an Independent Accountant (as defined in Schedule 8) who shall act as an
expert and not as an arbitrator and whose decision shall be final and
binding on all the parties hereto.
6.13 BUK agrees to pay to the Purchaser any stamp duty payable on the
acquisition of the Outstanding Group Payables, if the Purchaser is required
to pay such stamp duty in order to enforce this Agreement or the Tax
Covenant, to register any transfer of the Assets, to have determined the
amount of any stamp duty payable on the transfer of the Shares, or is
required to do so by any Tax authority. The Purchaser shall use its
reasonable endeavours to defer the payment of any such stamp duty as far as
possible by resisting at the cost of BUK any such requirement as is
referred to in this clause 6.13.
6.14 BUK agrees to indemnify the Purchaser against any liability of the
Purchaser or any member of the Group arising out of the Group Debt
Restructuring. Any payment made pursuant to this clause 6.14 shall be
treated as an adjustment to the Asset Consideration. For the avoidance of
doubt the Purchaser shall not have a claim under this indemnity as a result
of assuming the Outstanding BUK Group Debts pursuant to clause 6.5 above.
6.15 If at any time before the first anniversary of the Asset Completion Date
(such date also being the final redemption date under the Loan Notes), the
Purchaser notifies the Seller or BUK in writing of any claim under any of
the provisions of this Agreement or the Tax Covenant, then the Purchaser
shall be entitled to withhold payment of the principal amount and interest
due to BUK under the Loan Notes, such entitlement being to the extent of
the amount claimed. The right to withhold payment as above shall continue
until such claim has been withdrawn or becomes a Substantiated Claim. In
the latter case, the amount of the Substantiated Claim may be set off
against the principal amount and interest due to BUK under the Loan Notes.
Upon such a claim being withdrawn an amount equal to the amount withheld
(together with accrued interest) shall forthwith be paid to BUK.
6.16 The payment of any sum to the Purchaser pursuant to clause 6.15 in or
towards satisfaction of any Substantiated Claim under the terms of this
Agreement or the Tax Covenant shall in no way prejudice or affect any other
rights or remedies of the Purchaser for the purpose of recovering any
amount due to the Purchaser which is not satisfied by payment under clause
6.15.
6.17 For the purposes of clauses 6.15 and 6.16:
(a) a Substantiated Claim is a claim which has been agreed between the
Seller, BUK and the Purchaser or in respect of which an order or
decree of a court of competent
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jurisdiction has been given in proceedings in respect of the claim and
such order or decree being final and not or no longer appealable; and
(b) the amount payable on a claim or a claim becoming a Substantiated
Claim shall be the amount agreed by the Seller, BUK and the Purchaser
or determined by any such order or decree (as the case may be) to be
payable by BUK in respect of the claim.
6.17.1 In the event that any Substantiated Claim in relation to any liability of
the Seller or BUK to the Purchaser under this Agreement is not settled in
full (in accordance with clause 6.15 or otherwise in cash within 10
Business Days of agreement or determination thereof) (an "Outstanding
Amount"), the Seller (assuming BUK has exercised its direction that shares
in the Purchaser be allotted to the Seller pursuant to clause 9.3(a) of the
Agreement, but if not, BUK) hereby undertakes to request pursuant to
Article 2.7 of the new Articles of Association of the Purchaser (the "New
Articles"), that X Series C Shares (rounded down to the nearest whole
number) shall be immediately converted into and re-designated as, an equal
number of deferred shares and the Outstanding Amount shall, accordingly, be
reduced by an amount equal to (pound)Y each determined as follows:
X = OA ; and
--
P
Y = X x P
where OA is the Outstanding Amount and P is equal to(pound)2.70.
6.17.2 As security for due performance by the Seller and BUK of its obligations
under clause 6.17.1 the Seller hereby:
(a) irrevocably appoints the secretary for the time being of the Purchaser
as its attorney and agent for the purposes of signing any
documentation and taking any action, in either case, required for the
due performance of the Seller's or BUK's obligations under clause
6.17.1;
(b) undertakes to the Purchaser that:
(i) it shall not, and shall not agree to, transfer the whole or any
part of its interest in any Series C Shares to any person unless
consent shall have been obtained in accordance with Article
4.1(d) of the New Articles; and
(ii) it shall not, and shall not agree to, mortgage, charge or
otherwise dispose of, or grant any option or other rights over,
the whole or any part of its interest in any Series C Shares
and any Transfer Notice (as defined in the New Articles) then in force
shall, at the option of the Purchaser and notwithstanding any other
provision of such New Articles, be deemed to have been withdrawn; and
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(c) undertakes that, without prejudice to sub-paragraph (b) above, it
shall not effect any such transfer, disposal, mortgage, charge or
grant without first obtaining from the transferee, dispose, mortgagee,
chargee or grantee (as the case may be) an undertaking in a form
reasonably satisfactory to the Purchaser acknowledging that the Series
C Shares are issued and held by such person, inter alia, subject to
the terms of this clause 6.16 and assuming the same obligations under
this Agreement as the Seller or BUK (as the case may be) but with
recourse limited to the Series C Shares only.
7. VAT
7.1 The Asset Consideration is exclusive of VAT, but, subject to sub-clause
7.5, it is intended that the transfer of the Business shall be a transfer
of a business as a going concern within Article 5 of the Value Added Tax
(Special Provisions) Order 1995 (the "Order") and the Seller and the
Purchaser agree to use all reasonable endeavours to procure that the
transfer is so treated.
7.2 On or before Completion the Seller shall apply to HM Customs & Excise for a
direction that all VAT records relating to the Business which the Purchaser
is required to preserve for any period after Completion under section
49(1)(b) of and paragraph 6 of schedule 11 to the VATA shall be preserved
by the Seller and the Seller shall provide the Purchaser with a copy of the
direction made by HM Customs and Excise forthwith on receipt by the Seller.
7.3 If HM Customs and Excise make a direction of the type referred to in clause
7.2 the Seller will preserve the records referred to in clause 7.2 for such
period as may be required by law and, during that period shall permit the
Purchaser or its agents to inspect such records and to take copies of such
records at the cost of the Purchaser.
7.4 The Purchaser hereby warrants and undertakes to the Seller that:
(a) The Purchaser is registered for VAT; and
(b) The Purchaser's present intention is to continue the Business as a
going concern.
7.5 In the event that the HM Customs & Excise assess the Seller to VAT in
relation to the transfer of the Business pursuant to this Agreement or
determine that such transfer is not a transfer of a business as a going
concern with Article 5 of the Order the Purchaser shall, within five
Business Days of receipt of a valid VAT invoice, pay such VAT to the
Seller together with any penalties, reasonable costs, losses, reasonable
expenses or interest incurred, paid or payable in relation to such VAT by
the Seller other than where such penalties or interest is attributable to
any delay or failure on the part of the Seller or BUK.
8. Share completion
8.1 Subject to the satisfaction (or waiver in the case of 3.1(b)) of the
conditions contained in clause 3.1, the Share Completion shall take place
at the offices of the Seller's Solicitors at
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10.00pm on the Share Completion Date or at such other place and/or on such
other date as may be agreed between the Seller and the Purchaser.
8.2 On Share Completion the Seller shall cause to be delivered to the
Purchaser:
(a) duly executed transfers of the Shares in favour of the Purchaser (or
as it may direct) together with the share certificates relating to
such shares;
(b) a duly executed counterpart of the Deed of Covenant;
(c) a counterpart duly executed by each of the Seller and BUK of the Tax
Covenant;
(d) the common seal, certificate of incorporation, certificates of
incorporation (if any) on change of name and statutory books of each
Group member incorporated in the United Kingdom (written up to the
Business Day immediately preceding Share Completion);
(e) written resignations (with effect from the end of the relevant board
meeting referred to in clauses 8.3 and 8.4) of Xxxxx Xxxxx and Xxxxx
Xxxxxx as directors of the Company and each Group Company, Xxxxx
Xxxxxxxxxxx as a director of Content Technologies GmbH, Xxxx Xxxxxx as
a director of Content Technologies, Inc., and Xxxxxxxxxxx Xxxxxx as a
director of Content Technologies Limited, and of the secretary of each
member of the Group, resigning from their respective offices with the
relevant Group member, in each case executed as deeds in the agreed
terms;
(f) an unqualified letter of resignation from the auditors of each Group
member complying in the case of the English Group members in all
respects with ss 392 and 394 of the Companies Xxx 0000, accompanied by
a written confirmation that such auditors have no claims for unpaid
fees or expenses;
(g) irrevocable powers of attorney in the agreed terms executed by the
Seller in favour of the directors of the Purchaser appointing such
persons, to be its or his lawful attorney in respect of the Shares
prior to such time as the name of the Purchaser can be entered into
the register of members of the Company;
(h) the title deeds and documents to the Properties;
(i) a duly signed original of the Sydney Licence;
(j) new service contracts executed by Xxxxx Xxxxxxx and Xxxx Xxxxx in the
agreed terms;
(k) written confirmation that the divestment bonuses have been paid;
(l) deliver to the Purchaser duly executed releases of any Encumbrances
over the assets, the assets of any member of the Group or any shares
in any Group member;
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(m) a certificate signed on behalf of the Seller confirming that no Event
has occurred which would give the Purchaser the right to terminate
this Agreement in accordance with clause 4.7 hereto;
(n) a certificate signed on behalf of the Seller confirming that no
notification was required pursuant to clause 10.5;
(o) written confirmation that Content Technologies SAS and Content
Technologies KK are no longer Group members;
(p) a duly executed counterpart of the BTA Agreement; and
8.3 At Share Completion the Seller shall cause a board meeting of the Company
to be duly convened and held at which:
(a) the said transfers of the Shares shall be approved for registration
(subject to the transfers being duly stamped at the cost of the
Purchaser);
(b) all existing instructions to the Group's bankers, bank mandate forms
and authorities shall be revoked and shall be replaced with
alternative instructions, bank mandates forms and authorities in such
form as the Purchaser may require;
(c) Andersens shall be appointed auditors to each Group member; and
(d) such persons shall be appointed as directors and as secretary of the
Company as are notified by the Purchaser to the Seller in writing no
later that three Business Days prior to Share Completion.
8.4 On Completion the Seller shall cause a Board Meeting of each Group member
to be convened and held at which such persons as may be nominated by the
Purchaser shall be appointed directors and secretary of Group members
(within a maximum number, if any, permitted under their respective Articles
of Association) and the persons whose names are set out in clause 8.2(f)
shall resign.
8.5 At Share Completion the Purchaser shall:
(a) pay the sum set out in clause 6.1(a) by electronic funds transfer into
the bank account of the Seller, the details of which shall be provided
prior to Completion;
(b) deliver to the Seller a duly executed counterpart of the Deed of
Covenant;
(c) deliver to the Seller a duly signed counterpart of the Sydney Licence.
8.6 If Share Completion has not occurred by the close of business on the Latest
Completion Date this Agreement shall terminate in its entirety (including
for the avoidance of doubt in relation to the Assets and Business) in
accordance with clause 22.
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9. Asset Completion
9.1 Subject to the due satisfaction (or waiver in the case of clause 3.1(b)) of
the conditions contained in clauses 3.1 and 3.2, the Asset Completion shall
take place immediately following the exercise of the Call Option or the Put
Option (as the case may be) on the Asset Completion Date at the offices of
the Seller's Solicitors.
9.2 At Asset Completion BUK shall:
(a) give the Purchaser possession of those Assets which are transferable
by delivery;
(b) give the Purchaser duly executed assignments in the form set out in
Schedule 16 of the BUK Intellectual Property Rights;
(c) deliver the Records and the original Contracts;
(d) deliver all payroll records, records of National Insurance, PAYE, and
income for records relating to all Employees duly completed and up to
date;
(e) deliver to the Purchaser duly executed releases of any Encumbrances
over the Assets;
(f) deliver to the Purchaser the Intellectual Property Records;
(g) deliver an executed counterpart of the Deed of Adherence;
(h) deliver an executed copy of the Registration Rights Agreement.
9.3 At Asset Completion the Purchaser shall:
(a) allot and issue the shares referred to in clause 6.2(a) credited as
fully paid to BUK, or if BUK so directs, to the Seller;
(b) deliver to BUK certificates duly executed by the Purchaser in respect
of the Loan Notes referred to in clause 6.2(b) duly completed with the
date of issue and the name and address of BUK; and
(c) pay the sum set out in clause 6.1(b) by electronic funds transfer into
the bank account of BUK, the details of which shall be provided prior
to Asset Completion;
(d) deliver to the Seller counterparts of the Shareholders Agreement duly
executed by each party thereto (other than the Seller); and
(e) deliver to the Seller counterparts of the Registration Rights
Agreement duly executed by each party to the Registration Rights
Agreement (other than the Seller).
9.4 At Asset Completion the risk of loss or damage to the Assets and Business
shall pass to the Purchaser and the risk of loss or damage to the BUK
Underlease Property shall pass to the Purchaser at the time of the actual
grant of the BUK Underlease.
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10. Warranties
10.1 The Seller hereby represents, warrants and undertakes to the Purchaser (for
itself and as trustee for its successors in title) in the terms of the
Warranties contained in Part A of Schedule 4 which shall be deemed to have
been given at the date of this Agreement but not further or otherwise.
10.2 The Seller and BUK hereby represent, warrant and undertake to the Purchaser
(for itself and as trustee for its successors in title) in the terms of the
Warranties contained in Part B of Schedule 4 which shall be deemed to have
been given at the date of this Agreement but not further or otherwise.
10.3 The Warranties are given subject to the matters fairly disclosed in the
Disclosure Letter and in the documents annexed thereto and when assessing
whether a document has been fairly disclosed no account shall be taken of
(i) any information which is not disclosed in such detail and in such a
manner as would enable the Purchaser to properly evaluate the fact or
matter concerned and (ii) in the case of each document contained in the
Disclosure Bundle, where it is not reasonably clear from the general
subject matter of such document how the information contained therein would
qualify the Warranties and any such information and/or documents shall be
deemed not to have been disclosed.
10.4 Where any statement set out in Schedule 4 is expressed to be given or made
to the best of the Seller's or BUK's knowledge or is qualified by reference
to the Seller's awareness or as qualified in some other manner having
substantially the same effect, such statement shall be deemed to refer to
any matters within the actual knowledge of the Senior Management.
10.5 If before Asset Completion any event, fact or circumstance arises which, if
the Warranties were repeated at Completion, would render any Warranty
untrue or misleading or incorrect in any material respect or which would
give rise to a tax claim under the Tax Covenant if the Tax Covenant had
been entered into at the date of this Agreement or would be a material
breach of the Pre-Completion Undertakings save where such event, fact or
circumstance resulted from actions or omissions approved pursuant to an
Integration Committee Minute the Seller and/or BUK shall notify the
Purchaser in writing as soon as possible and provide such details as the
Purchaser may reasonably require.
10.6 Each of the Warranties in Schedule 4:
(a) shall be construed as a separate and independent warranty and
representation; and
(b) unless expressly in this Agreement, shall not be limited by reference
to any other paragraph in Schedule 4 or by any other provision of this
Agreement or the Tax Covenant;
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and subject to clause 11.11 the Purchaser and/or each Group member shall
have a separate claim and right of action in respect of every breach of a
Warranty.
10.7 The Warranties shall not in any respect be extinguished or affected by
Share Completion and/or Asset Completion.
10.8 The Seller and BUK each agree with the Purchaser (for itself and as trustee
for any Group members) to waive any right or claim which it may have in
respect of any misrepresentation or error in or omission from any
information or opinion supplied by or given by any Employee or any Group
member or its directors, officers or employees in the course of negotiating
this Agreement or the Tax Covenant or the Disclosure Letter, and that any
such right or claim shall not constitute a defence to any claim by the
Purchaser under or in relation to this Agreement of the Tax Covenant
PROVIDED THAT no such waiver shall be granted, and no such defence shall be
precluded in circumstances where any Employee or Group member or its
respective directors, officers or employees acted in a fraudulent or
wilfully dishonest manner.
10.9 The Seller and BUK acknowledges that in assessing damages for the breach of
the Warranties the sale of the Shares and the sale of the Assets and
Business shall be regarded as having constituted one composite transaction.
11. Limitation on claims
11.1 For the purposes of this clause 11 any reference to "the Seller" shall,
where the Warranty Claim relates to a Warranty given in Part B of Schedule
4, be deemed to read "the Seller and BUK".
11.2 The Seller shall have no liability in respect of any breach of any of the
Warranties (other than the Tax Warranties) unless the Purchaser has served
on the Seller a written notice in accordance with this Agreement on or
before 30 June 2003 giving such details of the claim as the Purchaser then
has including the Purchaser's then best estimate of the amount of the
liability of the Seller in respect thereof.
11.3 The Seller shall have no liability in respect of any breach of any of the
Tax Warranties unless the Purchaser has served on the Seller a written
notice in accordance with this Agreement on or before the seventh
anniversary of Asset Completion giving such details of the claim as the
Purchaser then has including the Purchaser's then best estimate of the
amount of the liability of the Seller in respect thereof.
11.4 Where, in relation to a claim for breach of the Warranties which has been
notified in writing prior to the date relevant thereto under clause 11.2 or
11.3 of this Agreement (as appropriate), proceedings are not instituted
(that is to say issued and served) within six months of the service of the
notice in question (unless previously satisfied, settled or withdrawn) the
Seller shall cease to be liable therefor.
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11.5 Where a claim is made in respect of a contingent liability, the Seller
shall, notwithstanding clauses 11.2 and 11.3, be liable for such claim if
and when it becomes an actual liability if the requisite details of such
claim have been delivered in accordance with clause 11.2 or 11.3 (as the
case may be), even if such liability does not become an actual liability
until after the expiry of the relevant time period set out in clause 11.2
or 11.3 (as the case may be).
11.6 No claim shall be made in respect of any breach of any of the Warranties (a
"Warranty Claim"):
(a) where the liability for any particular claim (or what would be such
liability apart from this paragraph) is less than(pound)30,000 ("de
minimis claims"); and
(b) unless the aggregate amount of all such claims exceeds (pound)200,000
PROVIDED that if such aggregate amount does exceed (pound)200,000 the
Seller's liability shall not be limited to the excess and the whole
amount shall be recoverable in full, excluding for the avoidance of
doubt, de minimis claims.
11.7 No claim shall be made in respect of any breach of the Tax Covenant:
(a) where the liability for any particular claim (or what would be such
liability apart from this paragraph) is less than(pound)10,000 ("de
minimis tax claims"); and
(b) unless the aggregate amount of all such claims exceeds (pound)30,000
PROVIDED that if such aggregate amount does exceed (pound)30,000 the
Seller's liability shall not be limited to the excess and the whole
amount shall be recoverable in full, excluding for the avoidance of
doubt, de minimis tax claims.
11.8 The maximum aggregate amount recoverable by the Purchaser under the
Warranties, the Indemnities, this Agreement and the Tax Covenant shall be
limited to and in any event not exceed an amount equal to the
Consideration.
11.9 The Seller shall not be liable in respect of any Warranty Claim if and to
the extent that the loss occasioned thereby has been recovered under the
Tax Covenant or under an earlier Warranty Claim.
11.10 Upon the Seller becoming aware of any matter, claim, action or demand
which could give rise to a Warranty Claim or any matter which may give rise
to such a claim, action or demand, the Seller shall and shall procure that
the relevant member of the Seller's Group shall as soon as reasonably
practicable notify the Purchaser by written notice of such fact.
11.11 The Seller shall not be liable in respect of any Warranty Claim in
relation to Intellectual Property or Information Technology unless the
Warranty Claim arises as a result of a breach of a Warranty contained in
paragraph L of Part A of Schedule 4 or paragraph I of Part B of Schedule 4.
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11.12 The Purchaser will not and nor will any member of the Group make any
admission of liability, agreement or compromise with any person, body or
authority in relation to any matter in respect of which a claim under the
Warranties (other than a claim under the Tax Warranties) may arise without
prior agreement in writing (such agreement not to be unreasonably withheld
or delayed) of the Seller and shall give the Seller and its professional
advisers such reasonable access to such documents and records as are
relevant to such claim within the power, possession or control of the
Purchaser or the Group as the Seller shall reasonably request in writing to
enable the Seller and his professional advisers to examine (but not copy
without the consent of the Purchaser) such documents and records provided
that the Purchaser shall be fully indemnified and, if reasonable in the
circumstances of the Seller existing at such time, secured to the
Purchaser's reasonable satisfaction, by the Seller as to all costs and
expenses which they may reasonably incur by reason of such action.
11.13 The Purchaser shall, or shall procure that the relevant members of the
Group shall, take such action as the Seller may reasonably request in
writing to avoid, dispute, resist, appeal, delay, compromise, defend or
mitigate any claim, action or demand which could give rise to a Warranty
Claim (other than a claim under the Tax Warranties) or any matter which may
give rise to such a claim, action or demand provided that the Purchaser and
the relevant member of the Group (as the case may be) shall be fully
indemnified and, if reasonable in the circumstances of the Seller existing
at such time, secured to the Purchaser's reasonable satisfaction, by the
Seller as to all costs and expenses which it may reasonably incur by reason
of such action.
11.14 In the event of any claim by the Purchaser pursuant to the Warranties or
the Tax Covenant succeeding or being agreed and any payment being paid by
the Seller pursuant to such claim the Consideration paid by the Purchaser
under this Agreement in respect of the Shares or the Assets and Business
(as the case may be) shall be deemed to have been reduced by an amount
equal to the amount of such payment, and such reduction shall be applied to
the Shares or Assets and Business sold by the Seller or BUK (as the case
may be) in accordance with the amounts of such liability discharged by
them.
11.15 In calculating the liability of the Seller for any breach of the
Warranties (other than a claim under the Tax Warranties) there shall be
taken into account the amount by which any taxation for which any member of
the Group has been reduced or extinguished as a result of the matter giving
rise to such liability.
11.16 If, in respect of any matter which would give rise to a breach of the
Warranties (other than the Tax Warranties) any member of what was the Group
at Completion would be able to validly claim under any policy of insurance
existing prior to Completion (or any run-off insurance purchased following
the Completion), then no such matter shall be the subject of a Warranty
Claim (other than a claim under the Tax Warranties) unless and until the
appropriate member of the Group shall have made a claim against its
insurers and any such insurance claim (if successful) and net of any costs
and any liability to Tax on any amount recovered) shall then
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reduce by the amount recovered or extinguish to the extent of any amount
recovered any such claims for breach of such Warranties.
11.17 If the Seller pays at any time to the Purchaser or the relevant member of
the Group an amount pursuant to a Warranty Claim (other than a claim under
the Tax Warranties) and the Seller or the relevant member of the Group
subsequently becomes entitled to recover from some other person any sum in
respect of any matter giving rise to such claim, the Purchaser shall, and
shall procure that the relevant member of the Group shall, take all
reasonable steps to enforce such recovery, and shall forthwith repay to the
Seller so much of the amount paid by the Seller to the Purchaser or the
relevant member of the Group as does not exceed the sum recovered from such
other person less all reasonable costs, charges and expenses incurred by
the Purchaser or the relevant member of the Group recovering that sum from
such other person and any liability to Tax on any amount recovered.
11.18 No Warranty Claim shall lie against the Seller under the Warranties (other
than a claim under the Tax Warranties) to the extent that such Warranty
Claim is wholly or partly attributable to:
(a) any voluntary act, omission, transaction or arrangement carried out at
the request of or with the written consent of the Purchaser prior to
Share Completion and/or Asset Completion (as the case may be)
excluding where the same is conducted in relation to the Group Debt
Restructuring; or
(b) any voluntary act, omission, transaction or arrangement carried out by
the Purchaser or a member of the Group or on their behalf on or after
Share Completion and/or Asset Completion (as the case may be) other
than in the ordinary course of the Business or the business of any
Group member (which for the avoidance of doubt shall mean in
substantially the same manner as the Business or the business of the
relevant Group member was conducted in the six months immediately
prior to the date of this Agreement) and other than any act, omission,
transaction or arrangement carried out pursuant to this Agreement;
(c) any actions or omissions approved pursuant to an Integration Committee
Minute.
11.19 No matter shall be the subject of a Warranty Claim (other than a claim
under the Tax Warranties) to the extent that allowance, provision or
reserve in respect of such matter shall have been made in the Completion
Accounts expressly and specifically.
11.20 The liability of the Seller pursuant to the Tax Warranties shall be
subject to the limitations, exceptions and qualifications set out in
clauses 3, 5 and 9 of the Tax Covenant so that the Seller shall not be
liable for any claim made pursuant to the Tax Warranties if (or to the
extent that) they would not be liable for such claim if the Tax Warranties
in question had been set out in the Tax Covenant as matters in respect of
which the Purchaser was indemnified.
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11.21 The limitations on the Seller's liability set out in this clause 11 shall
not apply to any Warranty Claim or any claim under the Tax Covenant if such
a claim involves fraud or wilful dishonesty on the part of the Seller.
12. Apportionment of business responsibility
12.1 Except as otherwise provided in this Agreement, the profit or loss of the
Business from the Asset Completion Date shall be for the account of the
Purchaser, and:
(a) BUK shall remain solely entitled to all receipts, rents and other
payments receivable in respect of or otherwise owing by any third
party in connection with any of the Assets or the Business (other than
the Book Debts) and solely responsible for all obligations and
liabilities (whether actual or contingent) which are due or owing to
third parties and which arise from or in relation to the conduct of
the Business or the Assets in the period of time ending on or before
the Asset Completion Date and the Seller shall indemnify the Purchaser
against all loss, liability, costs and expenses suffered or incurred
by any Group member in respect of any such obligations or liability;
and
(b) without prejudice to clause 14, the Purchaser shall be solely entitled
to all receipts, rents and other payments receivable in respect of or
otherwise owing by any third party in connection with any of the
Assets or the Business and solely responsible for all obligations and
liabilities (whether actual or contingent) which are due or owing to
third parties and which arise from or in relation to the conduct of
the Business or the Assets in the period of time commencing after the
Asset Completion Date and the Purchaser shall indemnify the Seller
against all loss, liability, costs and expenses suffered or incurred
by the Seller or BUK in respect of any such obligation or liability.
12.2 All income and outgoings of the Business or any of the Assets which are
recurring or periodic in nature and which relates to or are attributable to
a period of time commencing before but ending after the Asset Completion
Date shall be apportioned on a time basis between the Purchaser and BUK,
such that BUK is entitled to the income and responsible for the outgoings
relating to the period ending on the Completion Date, and the Purchaser is
entitled to the income and responsible for the outgoings relating to the
period commencing after the Asset Completion Date.
12.3 Any income actually received by a party to which the other party is
entitled in accordance with the provisions of clause 12.2 shall be held on
trust by that party for the other until payment in accordance with clause
12.4.
12.4 All sums to be paid by either party in accordance with clause 12.2 shall be
identified in the Completion Accounts as part of the calculation of the
Completion Working Capital Amount.
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13. Employees
13.1 The parties consider the sale of the Business contemplated by this
Agreement to constitute the transfer of an undertaking or part of an
undertaking or undertakings for the purposes of the Transfer Regulations
and agree that the contracts of employment of the Employees will have
effect from Completion as if originally made between the Transferee and the
Employees save insofar as such contracts relate to any occupational pension
scheme in accordance with Regulation 7 of the Transfer Regulations.
13.2 The Seller shall indemnify and keep indemnified the Transferee from and
against all losses, costs, damages, compensations, tribunal awards, fines,
expenses, actions, proceedings, claims, demands and all other liabilities
howsoever and whenever arising out of or in connection with:
(a) any claim by an Employee (whether in contract or in tort or under
statute (including the Treaty establishing the European Community and
any directives made under the authority of that Treaty) for any remedy
including, without limitation, for breach of contract, unfair
dismissal, redundancy, statutory redundancy, equal pay, sex, race or
disability discrimination, unlawful deductions from wages, a
protective award or under the National Minimum Wage Xxx 0000 or the
Working Time Regulations 1998 or for breach of statutory duty or of
any other nature) as a result of anything done or omitted to be done
in relation to the Employee's employment prior to Asset Completion;
(b) any claim by any person other than an Employee relating to that
person's employment with the Seller or a member of the Seller's Group;
and
(c) any claim by any appropriate representative (as defined by regulation
10 of the Transfer Regulations) pursuant to regulation 11 of the
Transfer Regulations in relation to the sale of the Business, except
if such claim relates to the Transferee's failure to comply with its
obligations in clause 13.5 of this Agreement and/or if such claim
relates to the Transferee withholding its agreement (whether
unreasonably or otherwise) to the Seller and/or BUK communicating the
Transferee's intentions as set out in clause 13.4(d) of this
Agreement.
13.3 The parties intend that the Transfer Regulations shall apply only to the
Employees and accordingly:
(a) If any contract of employment (whether oral or written, express or
implied) in respect of any person who is not an Employee shall have
effect or shall be alleged by the person so employed under it to have
effect as if originally made between the Transferee and such person
pursuant to the provisions of Regulation 5 of the Transfer Regulations
then subject to clause (c) below:
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(i) the Transferee may, upon becoming aware of the application of
Regulation 5 to such contract or any such claim to that effect by
the person employed under it, terminate such contract forthwith;
(ii) the Transferee shall promptly notify the Seller of its awareness
of the application of Regulation 5 and any such claim to that
effect and keep the Seller advised of any action taken by the
Transferee in respect of it;
(iii) The Transferee shall promptly notify the Seller of its intention
to terminate any such contract; and
(iv) If the Transferee notifies the Seller that it intends to
terminate any such contract, then within 20 Business Days of
receiving such notification the Seller shall notify the
Transferee whether it intends to offer that person employment. If
the Seller so intends then the Seller shall make an offer of
employment to that person within 20 Business Days of the
notification to the Transferee. In the event that the Seller does
offer such person employment, the Transferee shall provide the
Seller with all such reasonable assistance as is necessary to
transfer the employment of that person to the Seller.
(b) Subject to clause (c) below and provided always that the Transferee
complies with its obligations under clause (a) above the Seller shall
fully indemnify the Transferee against any sums payable to or for the
benefit of such person in respect of his employment with BUK and/or
the Transferee and against all other liabilities whatsoever arising
under or in relation to such contract or its termination and any
obligation or liability of whatsoever nature (whether arising before
or after Asset Completion) in relation to or in connection with the
employment of any such person in the Business.
(c) Sub-clauses (a)(i) to (iv) inclusive, and clause (b) will not apply in
relation to any such person who is not an Employee unless the
Transferee makes the notification to the Seller in relation to that
person required by sub-clause (a)(ii) within 3 calendar months after
the Asset Completion Date.
13.4 The Transferee shall indemnify and keep indemnified the Seller and/or BUK
against all losses, costs, damages, compensation, tribunal awards, fines,
expenses, actions, proceedings, claims, demands and all other liabilities
however and whenever arising out of or in connection with:
(a) any change in the working conditions of the Employees or any of them
made or proposed to be made by the Transferee on or after Asset
Completion;
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(b) the employment by the Transferee on or after Completion of the
Employees other than on terms at least as favourable as those enjoyed
immediately before Asset Completion;
(c) any claim by an Employee (whether in contract or in tort or under
statute (including the Treaty establishing the European Community and
any directives made under the authority of that Treaty) for any remedy
including, without limitation, for breach of contract, unfair
dismissal, redundancy, statutory redundancy, equal pay, sex, race or
disability discrimination, unlawful deductions from wages, a
protective award or under the National Minimum Wage Xxx 0000 or the
Working Time Regulations 1998 or for breach of statutory duty or of
any other nature) as a result of anything done or omitted to be done
by the Transferee after Asset Completion;
(d) any claim by an employee who would have been an Employee but for the
termination of his employment before Asset Completion by reason of his
resignation in connection with any actual or proposed measure
(including but not limited to a proposed change or changes in his
working conditions) which the Transferee has expressed an intention to
take in respect of that employee or any group of employees which
includes that employee provided that the Seller and/or BUK shall not
communicate any of the Transferee's intentions in relation to
employees both in terms of any actual or proposed measures or changes
to working conditions to employees either directly or indirectly
without the prior agreement of the Transferee, such agreement not to
be unreasonably withheld so as to allow BUK to comply with its
obligations under regulation 10(2) of the Transfer Regulations; and
(e) any claim by any appropriate representative (as defined by regulation
10 of the Transfer Regulations) pursuant to regulation 11 of the
Transfer Regulations in relation to the sale of the Business arising
out of the Transferee's failure to comply with its obligations in
clause 13.5 of this Agreement and/or such claim arising out of the
Transferee withholding its agreement (whether unreasonably or
otherwise) to the Seller and/or BUK communicating the Transferee's
intentions as set out in clause 13.4(d) of this Agreement.
13.5 The Transferee shall give sufficient information to BUK and in good time to
enable it to comply with its obligations under regulation 10 of the
Transfer Regulations.
13.6 Subject to clause 6.14, all sums payable by either party under clauses
13.1-13.5 (inclusive) shall be paid free of and without any rights of
counterclaim or set off, and without any deduction or withholding on any
ground whatsoever, save only as may be required by law. If any such
deduction or withholding is required by law the payer shall be obliged to
pay to the payee such amount as will ensure that, after any such deduction
or withholding has been made, the payee shall have received a sum equal to
the amount that the payee would
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otherwise have received in the absence of any such deduction or
withholding, as reduced by any credit to which the payee may be entitled on
account of such deduction or withholding.
13.7 If any competent authority for Tax purposes charges to Tax any sum paid
(the "original payment") to the payee hereunder the payer shall be obliged
to pay to the payee such additional amount (the "additional payment") as
will ensure that, after the payment of the Tax (ignoring for these purposes
the availability of any Relief) so charged on the original payment and any
Tax chargeable on the additional payment and after taking into account any
reduction in any Tax Liability obtained by the payee in respect of any
payment made to an Employee pursuant to any claim by an Employee referred
to in this clause 13, there shall remain a net sum equal to the amount of
the original payment, such additional payment to be made three Business
Days after the payee has served notice that Tax on the original payment has
become due and payable, or would have become due and payable but for the
availability of a Relief.
13.8 On receipt of a valid notice of exercise from any of the Employees or
Senior Management in respect of any option or options granted under the
Plans or any other share option or share incentive arrangement:
(a) the Seller shall promptly inform the Company Secretary of the
optionholder's employing company as at the date of grant (the
"Employing Company") of the details of the proposed option exercise;
(b) the Employing Company shall then promptly notify the Seller of the
amount of any employee taxation (including employee's social security
contributions) which is required to be accounted for by the Employing
Company in respect of the relevant Employee or member of Senior
Management (the "Employee Tax Liability"), or the formula by which
such amount is to be calculated;
(c) the Seller shall on satisfaction of such option, ensure that
sufficient Seller shares issued to satisfy the option are immediately
sold to produce net cash proceeds to meet the Employee Tax Liability
and promptly remit such proceeds or otherwise remit sufficient funds
to the Employing Company in order for the Employee Tax Liability to be
fully discharged.
13.9 On receipt of a valid notice of exercise from any of the Employees or
Senior Management in respect of any option or options granted under the
Plans or any other share option or share incentive arrangement in respect
of which the relevant Employee or member of Senior Management has entered
into an agreement allowing the Seller to recover from him/her the whole or
part of any secondary Class 1 National Insurance Contributions in respect
of any gains made on the exercise of any such option or options;
(a) the Seller shall promptly inform the Employing Company (as defined in
clause 13.8(a)) of the details of the proposed option exercise;
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(b) the Employing Company shall then promptly notify the Seller of the
amount of any secondary Class 1 National Insurance Contributions which
is required to be accounted for by the Employing Company in respect of
the relevant Employee or member of Senior Management (the "Employer
Tax Liability"), or the formula by which such amount is to be
calculated;
(c) the Seller shall on satisfaction of such option, ensure that
sufficient Seller shares issued to satisfy the option are immediately
sold to produce net cash proceeds to meet the Employer Tax Liability
and promptly remit such proceeds or otherwise remit sufficient funds
to the Employing Company in order for the Employer Tax Liability to be
fully discharged.
13.10 The Seller hereby agrees to indemnify in full the Employing Company (as
defined in clause 13.8(a)) in respect of any secondary Class 1 National
Insurance Contributions liabilities that arise as a result of the exercise
of any option or options granted to any of the Employees or Senior
Management under the Plans or any other share option or share incentive
arrangement in respect of which the relevant Employee or member of Senior
Management has not entered into an agreement allowing the Seller to recover
from him/her the whole or part of any such secondary Class 1 National
Insurance Contributions.
14. Book Debts
As from the day after the Asset Completion Date the Purchaser shall be
entitled to collect the Book Debts for its own account.
15. Contracts
15.1 In respect of each Contract which is assignable without the consent of any
Counterparty:
(a) this Agreement shall constitute an assignment by BUK of such Contract
to the Purchaser, which assignment shall take effect, and the
Purchaser shall accept such assignment, subject to and from Asset
Completion;
(b) the Purchaser shall carry-out, perform and discharge all obligations
arising under such Contract to the extent that they are due to be
discharged after Asset Completion;
(c) the Purchaser shall fully indemnify BUK in respect of any failure by
the Purchaser to carry out, perform and discharge the obligations
referred to in this clause; and
(d) BUK and the Purchaser shall, as soon as practicable after Asset
Completion, give notice to any Counterparty as the Purchaser may elect
in such form as the Purchaser may reasonably require of the assignment
of such Contract to the Purchaser.
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15.2 If and insofar as the benefit of any Contract cannot be transferred by BUK
to the Purchaser at Completion without the agreement or consent of any
Counterparty or the novation of the relevant Contract:
(a) this Agreement shall not constitute an assignment or attempted
assignment of any such Contract if such assignment or attempted
assignment would constitute a breach of such Contract or give rise to
a right of termination of such Contract;
(b) the Purchaser and BUK shall use their respective reasonable endeavours
to obtain such consent or to procure that such Contract is assigned or
novated as soon as possible after Asset Completion;
(c) unless and until such Contract shall be duly assigned or novated, BUK
shall hold the benefits of the same on trust for the Purchaser
absolutely and the Purchaser shall (if sub-contracting is permissible
and lawful under the relevant Contract), as BUK's sub-contractor,
perform, at its own cost, all obligations of BUK under such Contract
to be performed after Asset Completion;
(d) unless and until such Contract shall be duly assigned or novated, BUK
shall (at the Purchaser's cost and so far as it is lawfully or
practicably able) do all acts and things reasonably requested by the
Purchaser to provide the Purchaser with the benefit of such Contract
(including, without limitation, enforcement of a right of BUK against
the Counterparty) and will provide the Purchaser (or its nominee),
with access to all relevant books, documents and other information in
relation to such Contract as the Purchaser may reasonably require from
time to time (to the extent that BUK has the same); and
(e) BUK will at the Purchaser's request, and subject to it being
indemnified, give such assistance as in its power to enable the
Purchaser to enjoy the benefits of and to enforce the Contracts
against the Counterparty.
15.3 Notwithstanding anything in the preceding provisions of this clause 15 the
Purchaser shall fully indemnify BUK against any act or thing done or
omitted to be done by the Purchaser in the performance and discharge of its
obligations and liabilities under the Contracts and which arise from or in
relation to the conduct of the Business or the Assets in the period of time
commencing after the Asset Completion Date.
15.4 Notwithstanding anything in the preceding provisions of this clause 15 BUK
shall fully indemnify the Purchaser in respect of any act or thing done or
omitted to be done by BUK in the performance and discharge of its
obligations and liabilities under the Contracts and which arise from or in
relation to the conduct of the Business or Assets in the period of time on
or prior to the Asset Completion Date.
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15.5 The Seller shall, and shall procure that Baltimore Technologies
(Australasia) Pty Limited shall, comply with the provisions of the BTA
Agreement
15.6 In the case of a Contract to which a member of the Seller's Group (other
than BUK) is a party, the provisions of this clause shall apply, mutatis
mutandis, so that references to BUK shall be construed as references to
that member and the Seller shall procure that each such member shall comply
with the obligations which it is expressed to have under this clause 15.
16. Indemnities
16.1 The Seller shall indemnify the Purchaser (on an after-tax basis) against
all costs, claims, damages, loss and expenses suffered or incurred by the
Purchaser or any Group member as a result of any former shareholder of
Content Technologies Holding Limited asserting that his shares were
transferred invalidly or in breach of the constitutional documents of
Content Technologies Holding Limited or of any agreement to which such
shareholder and Content Technologies Holding Limited were party.
16.2 The Seller shall indemnify Content Technologies (Asia/Pacific) Pty Limited
(on an after tax basis) against any costs, claims, damages, loss or
expenses suffered or incurred by Content Technologies (Asia/Pacific) Pty
Limited as a result of any liabilities of Baltimore Technologies
(Australasia) Pty Limited transferring or having transferred to Content
Technologies (Asia/Pacific) Pty Limited which do not relate wholly or
mainly to the Business but such indemnity shall only apply in relation to
such proportion of their liability that does not relate to the Business.
For the purposes of this clause 16.3 "Business" shall be read so that any
reference to "BUK" shall be deemed to read "Baltimore Technologies
(Asia/Pacific) Pty Limited".
17. Confidentiality and announcements
17.1 For the purpose of assuring the full benefit of the business and goodwill
of each Group member and the Business and in consideration of the Purchaser
hereby agreeing to purchase the Shares, Assets and Business on the terms of
this Agreement, the Seller agrees with the Purchaser that (save as may be
required by law or regulation (including the regulation of any applicable
stock exchange or listing authority or in relation to disclosure to any Tax
authority) or for the purpose of enforcing this Agreement, and then only to
the extent so required) it will not at any time hereafter divulge (other
than in accordance with clause 17.2 any information that is currently
confidential information in relation to the affairs or businesses of any
Group member or in relation to the Business or any information in relation
to the Purchaser or its business.
17.2 Save as provided in clause 17.1 or as required by law or regulation
(including the regulation of any applicable stock exchange or listing
authority) no announcement or statement about this Agreement or the subject
matter of, or any matter referred to in, this Agreement shall be made or
issued before, on or after Completion by or on behalf of any of the parties
without the prior
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written consent of the Purchaser and the Seller (any such consents not to
be unreasonably withheld or delayed) PROVIDED further that nothing shall
restrict the making by the Seller (even in the absence of agreement by the
other parties) of the announcement or the making of any statement which may
be required or called for by the requirements of the UK Listing Authority,
the Code or the Panel, or the United States Securities Exchange Commission
but, having regard to any applicable time constraints, the Seller shall
give the Purchaser a reasonable opportunity to review and comment on the
announcement or statement and, after having given such comments due and
proper consideration, the Seller may, but shall be under no obligation to,
incorporate all or part of the Purchaser's comments in the announcement or
statement.
18. Intellectual Property
18.1 The Seller undertakes after Completion and at the request of the Purchaser
promptly to execute or procure the execution of all documents as may be
reasonably necessary to secure the vesting in the Purchaser (or in such
member of the Group as the Purchaser shall direct) of any Intellectual
Property owned by any member of the Seller's Group and which was used prior
to Completion by any member of the Group or BUK wholly and directly in
connection with the Business. The Seller will be responsible for preparing
all such documents provided the Purchaser shall be responsible for all
costs reasonably and property incurred by the Seller and all other costs
and expenses in respect of such vesting including but not limited to the
cost of recording the assignments at the relevant intellectual property
registries.
18.2 The Seller hereby grants and shall procure the grant by each relevant
member of the Seller's Group to each relevant member of the Group with
effect from Completion a non-exclusive, royalty free, irrevocable,
worldwide, freely transferable licence to use such Intellectual Property
owned by the Seller's Group which at Asset Completion either the Group or
BUK use solely in connection with the Business under licence (whether
written or oral).
18.3 The Group hereby grants to the Seller's Group with effect from Asset
Completion a non-exclusive royalty free irrevocable worldwide licence to
use all trade marks and brand names owned by the Group or used by BUK prior
to Asset Completion in relation to the Business:
(a) for a period of six months solely for the purposes of running down
existing stocks of literature and marketing materials; and
(b) for a period of three months solely for the purposes of running down
and replacing existing stocks of business stationery and business
cards.
18.4 The Seller hereby grants to each member of the Group and the Purchaser with
effect from Asset Completion a non-exclusive royalty free irrevocable
worldwide licence to use the Baltimore name and xxxx:
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(a) for a period of twelve months solely as necessary for the purposes of
selling existing stocks of the Products to customers in relation to
the Business and the business of the Group as carried on hereafter;
and
(b) for a period of four months solely as necessary for the purposes of
running down existing stocks of related stationery, literature and
materials.
18.5 The benefit of the licence between the Seller and Content Technologies Ltd
dated 22 December 1999 may be assigned by BUK as part of the transaction
contemplated by this Agreement and the Seller hereby waives any rights of
action it may have against Content Technologies Limited under such
agreement at the date hereof as set out in the Disclosure Letter.
18.6 In relation to the supply of transitional services and the separation of
Information Technology and business systems the provisions of Schedule 17
shall apply.
18.7 Within two weeks of the Asset Completion, the Purchaser shall and/or shall
procure that the relevant Group member, being the legal and beneficial
owner(s) of the rights to be licensed under the Certigram Licence, execute
the Certigram Licence and deliver it to the Seller.
19. Guarantee of BUK's obligations
19.1 In consideration of the Purchaser entering into this Agreement, the Seller
unconditionally and irrevocably guarantees to the Purchaser the due and
punctual performance of all the obligations and liabilities of BUK under or
otherwise arising out of or in connection with this Agreement (as any of
such obligations and liabilities may from time to time be varied extended,
increased or replaced in accordance with the terms of this Agreement),
including but not limited to any liabilities arising by virtue of any
breach of the Warranties, and undertakes to keep the Purchaser fully
indemnified against all liabilities, losses, proceedings, claims, damages,
costs and expenses of whatever nature which the Purchaser may suffer or
incur as a result of any non-payment or default by BUK in the performance
of any of such obligations and liabilities.
19.2 If any obligation or liability of BUK expressed to be the subject of the
guarantee contained in this clause 19 (the "Seller's Guarantee") is not or
ceases to be valid or enforceable against BUK (in whole or in part) on any
ground whatsoever (including, but not limited to, any defect in or want of
powers of BUK or irregular exercise of such powers, or any lack of
authority on the part of any person purporting to act on behalf of BUK, or
any legal or other limitation, disability or incapacity, or any change in
the constitution of, or any amalgamation or reconstruction of, or the
bankruptcy, liquidation, administration or insolvency of BUK), the Seller
shall nevertheless be liable to the Purchaser in respect of that purported
obligation or liability as if the same were fully valid and enforceable and
the Seller were the principal debtor in respect thereof.
19.3 The liability of the Seller under the Seller's Guarantee shall not be
discharged or affected in any way by:
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(a) the Purchaser compounding or entering into any compromise, settlement
or arrangement with BUK, any co-guarantor or any other person; or
(b) any variation, extension, increase, renewal, determination, release or
replacement of this Agreement (in accordance with the terms of this
Agreement); or
(c) the Purchaser granting any time, indulgence, concession, relief,
discharge or release to BUK, or any other person or realising, giving
up, agreeing to any variation, renewal or replacement of, releasing,
abstaining from or delaying in taking advantage of or otherwise
dealing with any securities from or other rights or remedies which it
may have against BUK, or any other person; or
(d) any other matter or thing which, but for this provision, might
exonerate or affect the liability of the Seller.
19.4 The Purchaser shall not be obliged to take any steps to enforce any rights
or remedy against BUK before enforcing the Seller's Guarantee.
19.5 The Seller's Guarantee is in addition to any other security or right now or
hereafter available to the Purchaser and is a continuing security
notwithstanding any death, bankruptcy, liquidation, administration,
insolvency or other incapacity of BUK or the Seller.
19.6 Until the full and final discharge of all obligations and liabilities (both
actual and contingent) which are the subject of the Seller's Guarantee, the
Seller:
(a) waives all of its rights of subrogation, reimbursement and indemnity
against BUK and agrees not to demand or accept any security from BUK
or any co-guarantor in respect of any such rights and not to prove in
competition with the Purchaser in the bankruptcy, liquidation or
insolvency of BUK or any such co-guarantor; and
(b) agrees that it will not claim or enforce payment (whether directly or
by set-off, counterclaim or otherwise) of any amount which may be or
has become due to the Seller by BUK, any co-guarantor or any other
person liable to the Purchaser in respect of the obligations hereby
guaranteed if and so long as BUK is in default under this Agreement.
19.7 Unless agreed in writing otherwise by the Seller and the Purchaser, any
moneys received by the Purchaser under the Seller's Guarantee may be placed
to the credit of a suspense account with a view to preserving its rights to
prove for the whole of its claims against BUK or any other person.
19.8 If the Seller's Guarantee is discharged or released in consequence of any
performance by BUK of the guaranteed obligations which is set aside for any
reason, the Seller's Guarantee shall be automatically reinstated in respect
of the relevant obligations.
-42-
20. Guarantee of the Seller's obligations
20.1 In consideration of the Purchaser entering into this Agreement, BUK
unconditionally and irrevocably guarantees to the Purchaser the due and
punctual performance of all the obligations and liabilities of the Seller
under or otherwise arising out of or in connection with this Agreement (as
any of such obligations and liabilities may from time to time be varied
extended, increased or replaced in accordance with the terms of this
Agreement), including but not limited to any liabilities arising by virtue
of any breach of the Warranties, and undertakes to keep the Purchaser fully
indemnified against all liabilities, losses, proceedings, claims, damages,
costs and expenses of whatever nature which the Purchaser may suffer or
incur as a result of any non-payment or default by the Seller in the
performance of any of such obligations and liabilities.
20.2 If any obligation or liability of the Seller expressed to be the subject of
the guarantee contained in this clause 20 (the "BUK Guarantee") is not or
ceases to be valid or enforceable against the Seller (in whole or in part)
on any ground whatsoever (including, but not limited to, any defect in or
want of powers of the Seller or irregular exercise of such powers, or any
lack of authority on the part of any person purporting to act on behalf of
the Seller, or any legal or other limitation, disability or incapacity, or
any change in the constitution of, or any amalgamation or reconstruction
of, or the bankruptcy, liquidation, administration or insolvency of the
Seller), BUK shall nevertheless be liable to the Purchaser in respect of
that purported obligation or liability as if the same were fully valid and
enforceable and BUK were the principal debtor in respect thereof.
20.3 The liability of BUK under the BUK Guarantee shall not be discharged or
affected in any way by:
(a) the Purchaser compounding or entering into any compromise, settlement
or arrangement with the Seller, any co-guarantor or any other person;
or
(b) any variation, extension, increase, renewal, determination, release or
replacement of this Agreement (in accordance with the terms of this
Agreement); or
(c) the Purchaser granting any time, indulgence, concession, relief,
discharge or release to the Seller, or any other person or realising,
giving up, agreeing to any variation, renewal or replacement of,
releasing, abstaining from or delaying in taking advantage of or
otherwise dealing with any securities from or other rights or remedies
which it may have against the Seller, or any other person; or
(d) any other matter or thing which, but for this provision, might
exonerate or affect the liability of BUK.
20.4 The Purchaser shall not be obliged to take any steps to enforce any rights
or remedy against the Seller before enforcing the BUK Guarantee.
-43-
20.5 The BUK Guarantee is in addition to any other security or right now or
hereafter available to the Purchaser and is a continuing security
notwithstanding any death, bankruptcy, liquidation, administration,
insolvency or other incapacity of the Seller or BUK.
20.6 Until the full and final discharge of all obligations and liabilities (both
actual and contingent) which are the subject of the BUK Guarantee, BUK:
(a) waives all of its rights of subrogation, reimbursement and indemnity
against the Seller and agrees not to demand or accept any security
from the Seller or any co-guarantor in respect of any such rights and
not to prove in competition with the Purchaser in the bankruptcy,
liquidation or insolvency of the Seller or any such co-guarantor; and
(b) agrees that it will not claim or enforce payment (whether directly or
by set-off, counterclaim or otherwise) of any amount which may be or
has become due to BUK by the Seller, any co-guarantor or any other
person liable to the Purchaser in respect of the obligations hereby
guaranteed if and so long as the Seller is in default under this
Agreement.
20.7 Unless agreed in writing otherwise by BUK and the Purchaser, any moneys
received by the Purchaser under the BUK Guarantee may be placed to the
credit of a suspense account with a view to preserving its rights to prove
for the whole of its claims against the Seller or any other person.
20.8 If the BUK Guarantee is discharged or released in consequence of any
performance by the Seller of the guaranteed obligations which is set aside
for any reason, the BUK Guarantee shall be automatically reinstated in
respect of the relevant obligations.
21. Further assurance and availability of information
21.1 The Seller and BUK shall execute and deliver all such instruments and other
documents and take all such actions as the Purchaser may from time to time
reasonably require in order to give full effect to the provisions of this
Agreement.
21.2 The Purchaser shall execute and deliver all such instruments and other
documents and take all such actions as the Seller may from time to time
reasonably require in order to give full effect to the provisions of this
Agreement.
21.3 The Seller and BUK shall provide the Purchaser with reasonable access to
and allow reasonable copies to be taken (at the Purchaser's own cost) of
all records retained by the Seller or BUK (as the case may be) at
Completion insofar as they relate to the Business.
-44-
22. Termination
22.1 The parties have set out in clause 4.7 and in this clause 22 the
circumstances in which they will have the right to terminate this
Agreement. Other than as set out in clause 4.7 and in this clause 22, no
party shall have the right to rescind or terminate this Agreement.
22.2 If the conditions specified in clause 3.1 have not been satisfied or waived
in relation to clause 3.1(b)) in accordance with clause 3, by the Latest
Completion Date, then, unless agreed by all parties in writing otherwise:
(a) this Agreement shall terminate (including for the avoidance of doubt
in relation to the sale and purchase of the Assets and Business) and
have no further effect (subject only to clauses 18 (Confidentiality
and announcements), 26 (Costs), 27(Notices) and 31 (Governing law and
jurisdiction) which shall continue in force; and
(b) subject to any liability which may arise from any breach of the
obligations contained in clauses 3.2 (Best endeavours), 18
(Confidentiality and announcements), 26 (Costs), 27 (Notices) and 31
(Governing law and jurisdiction) the parties shall be released from
all liabilities hereunder.
23. Interest
If any amount required to be paid under this Agreement or the Tax Covenant
is not paid when it is due, such amount shall bear interest at the rate of
two per cent per annum over the base lending rate of Barclays Bank PLC from
time to time, calculated on a daily basis for the period from the relevant
due date for payment up to and including the date of actual payment, as
well after as before any judgment.
24. Continuing obligations and assignment
24.1 Each of the obligations, warranties, representations, indemnities and
undertakings accepted or given by the parties or any of them under this
Agreement or any document referred to herein ("Obligations") shall continue
in full force and effect notwithstanding Completion taking place and shall
be binding on the respective successors, estates and personal
representatives of the parties.
24.2 The rights of each of the parties who are bodies corporate hereto shall be
assignable to its holding companies or subsidiaries or subsidiaries of such
holding companies by notice in writing to the other parties.
24.3 The parties acknowledge that the Purchaser intends to transfer the Business
and Assets and all its rights and obligations under this Agreement in
respect of the Business and Assets to Content Technologies Limited after
Completion and BUK accordingly, hereby releases
-45-
Content Technologies Limited from any restriction contained in the business
transfer agreement between Content Technologies Limited and BUK and dated
31 March 2001 and which relate to the operation and conduct of the Business
or activities related thereto.
25. Costs
Each party shall pay its own costs and expenses in relation to the
negotiation, preparation, and implementation of this Agreement (and the
documents referred to herein), including the fees and disbursements of
their respective financial, legal, accountancy and other advisers.
26. Notices
26.1 Any notice or other communication to be given under this Agreement shall be
in writing, shall be deemed to have been duly served on, given to or made
in relation to a party if it is left at the authorised address of that
party, posted by pre-paid airmail addressed to that party at such address,
or sent by facsimile transmission to a machine situated at such address and
shall if:
(a) personally delivered, be deemed to have been received at the time of
delivery;
(b) posted to an inland address in the United Kingdom, be deemed to have
been received on the second Business Day after the date of posting and
if posted to an overseas address, be deemed to have been received on
the fifth Business Day after the date of posting; or
(c) sent by facsimile transmission, be deemed to have been received upon
receipt by the sender of a facsimile transmission report (or other
appropriate evidence) that the facsimile has been transmitted to the
addressee provided that a confirmation copy of such notice is sent to
the addressee by pre-paid post.
PROVIDED that where, in the case of delivery by hand or facsimile
transmission, delivery or transmission occurs after 5 pm on a Business Day
or on a day which is not a Business Day, receipt shall be deemed to occur
at 9 am on the next following Business Day.
26.2 For the purposes of this clause the authorised address of each party shall
be the address set out on page 1 of this Agreement or such other address as
that party may notify to the others in writing from time to time in
accordance with the requirements of this clause.
26.3 The provisions of this clause shall not apply to the service of a notice to
exercise the Call Option or the Put Option which shall be deemed served on
receipt in accordance with clause 5.
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27. Severability
If any provision of this Agreement (or of any document referred to herein)
is held to be illegal, invalid or unenforceable in whole or in part in any
relevant jurisdiction the legality, validity and enforceability of the
remaining provisions of this Agreement (or such document) shall not in any
way be affected or impaired thereby.
28. Entire agreement and variation
28.1 This Agreement (and any documents referred to herein or therein (the
"Relevant Documents")) contains the entire agreement and understanding of
the parties and supersedes all prior agreements, understandings or
arrangements (both oral and written) relating to the subject matter of this
Agreement.
28.2 Each of the parties acknowledges and agrees that:
(a) it does not enter into the Relevant Documents on the basis of and does
not rely, and has not relied, upon any statement or representation
(whether negligent or innocent) or warranty or other provision (in any
case whether oral, written, express or implied) made, given or agreed
to by any person (whether a party to this Agreement or not) except
those expressly set out or referred to in the Relevant Documents and
the only remedy or remedies available in respect of any
misrepresentation or untrue statement made to it shall be a claim for
breach of contract under the Relevant Documents; and
(b) this clause 28.2 shall not apply to any statement, representation or
warranty made fraudulently or to any provision of the Relevant
Documents which was induced by, or otherwise entered into as a result
of, fraud, for which the remedies shall be all those available under
the law governing the Relevant Documents.
28.3 No variation, supplement, deletion or replacement of or from this Agreement
or any of its terms shall be effective unless made in writing and signed by
or on behalf of each party.
28.4 For the avoidance of doubt, the offer provisions of the letter from Amadeus
Capital Limited to the Seller dated 10 December 2001 (as amended by letter
dated 17 January 2002, 21 January 2002 and 22 January 2002) shall terminate
on execution of this Agreement.
29. General provisions
29.1 The Purchaser may release or compromise the liability of the Seller
hereunder or grant the Seller time or other indulgence without affecting
the liability of any other Seller hereunder.
29.2 Any waiver of a breach of any of the terms of this Agreement or of any
default hereunder shall not be deemed to be a waiver of any subsequent
breach or default and shall in no way affect the other terms of this
Agreement.
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29.3 No failure to exercise and no delay on the part of any party in exercising
any right, remedy, power or privilege of that party under this Agreement
and no course of dealing between the parties shall be construed or operate
as a waiver thereof, nor shall any single or partial exercise of any right,
remedy, power or privilege preclude any other or further exercise thereof
or the exercise of any other right, remedy, power or privilege. The rights
and remedies provided by this Agreement are cumulative and are not
exclusive of any rights or remedies provided by law.
29.4 This Agreement may be executed in any number of counterparts, each of which
when executed and delivered shall be an original, but all of which when
taken together shall constitute a single instrument.
29.5 The parties do not intend that any term of this Agreement should be
enforceable by virtue of the Contracts (Rights of Third Parties) Xxx 0000
by any person who is not a party to this Agreement.
30. Governing law and jurisdiction
30.1 This Agreement (together with all documents to be entered into pursuant to
it which are not expressed to be governed by another law) shall be governed
by, construed and take effect in accordance with English law.
30.2 The courts of England shall have exclusive jurisdiction to settle any
claim, dispute or matter of difference which may arise out of or in
connection with this Agreement (including without limitation claims for
set-off or counterclaim) or the legal relationships established by this
Agreement.
30.3 Each of the parties hereto agrees that in the event of any action between
any of the parties hereto being commenced in respect of this Agreement or
any matters arising under it, the process by which it is commenced, (where
consistent with the applicable court rules) may be served on them in
accordance with clause 26.
AS WITNESS the hands of the parties or their duly authorised representatives the
day and year first above written.
-48-
Schedule 1
Part I
The Shares
Class of Shares Number of issued Shares
----------------- -----------------------
Ordinary 9,184,997
A Ordinary Shares 3,622,000
B Ordinary Shares 3,470,320
C Ordinary Shares 4,031,000
E Deferred Shares 430,734
-49-
Schedule 2
The Company and the Subsidiary Undertakings
A. Content Technologies Holdings Limited
1. Registered number : 3498084
2. Registered office : 0000 Xxxxxxxxx, Xxxxxxxxx Business Park, Theale,
Xxxxxxx, Xxxxxxxxx, XX0 0XX
3. Date of incorporation : 23 January 1998
4. Class of company : private company limited by shares
5. Authorised share capital : (pound)21,656.60 consisting of 1 million shares each with a
(pound)0.0001 value
6. Issued share capital : (pound)20,739.05
7. Directors : Xxxxx Xxxxx
Xxxxx Xxxxxx
0. Secretary : Xxxxx Xxxxx
9. Accounting reference date : 31 December
10. Auditors : KPMG Audit plc
11. Mortgages and Charges : None registered
12. Subsidiary Undertakings : Content Technologies Limited
Content Technologies GmbH
Content Technologies SAS
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B. Content Technologies Limited
1. Registered number : 3367495
2. Registered office : 0000 Xxxxxxxxx, Xxxxxxxxx Business Park, Theale,
Xxxxxxx, Xxxxxxxxx, XX0 0XX
3. Date of incorporation : 9 May 1997
4. Class of company : Private company limited by shares
5. Authorised share capital : (pound)10,000 consisting of 1 million shares each with a
(pound)0.01 value
6. Issued share capital : 1 million shares each
7. Directors : Xxxxx Xxxxx
Xxxxx Xxxxxx
Xxxxxxxxxxx Xxxxxx
8. Secretary : Xxxxx Xxxxx
Xxxxx Xxxxxx
9. Accounting reference date : 31 December
10. Auditors : KPMG Audit plc
11. Mortgages and Charges : None registered
12. Subsidiary Undertakings : Content Technologies (Asia/Pacific) Pty Limited
Content Technologies Inc
Content Technologies KK
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C. Content Technologies Inc
1. Registered Number : 601 678157
2. Registered office : Lawco of Washington Inc, 0000 0xx Xxx
00xx Xxxxx
Xxxxxxx
XX 00000-0000
XX
3. Date of incorporation : 22 December 1995
4. Class of company : Company limited by shares
5. Authorised share capital : 1,000,000 common stock of US$01 each
6. Issued share capital : 100,000 shares
7. Directors : Xxxxxx Xxxxxxx
Xxxxx Xxxxxx
Xxxx Xxxxxx
8. Accounting reference date : 31 December
9. Auditors : KPMG Audit plc
10. Mortgages and Charges : None
11. Subsidiary Undertakings : None
-52-
D. Content Technologies (Asia/Pacific) Pty Limited
1. Registered number : CAN 71987847
2. Registered office : STE 00 Xxxxxxx Xx
Xxxxxxxxx
XXX 0000
Xxxxxxxxx
3. Date of incorporation : 25 November 1995
4. Class of company : private company
5. Authorised share capital : $1,720,000 comprising 1,720,000 shares of $1 each
6. Issued share capital : $1,720,000
7. Directors : Xxxxx Xxxxx
: Xxxxx Xxxxxx
8. Secretary : Xxxxxx Xxxx
9. Accounting reference date : 31 December
10. Auditors : KPMG Audit plc
11. Tax district and reference : Commonwealth of Australia
12. Mortgages and Charges : None
13. Subsidiary Undertakings : None
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E. Content Technologies GmbH
1. Registered number :
2. Registered office (seat) : Xxxxxx Xxxxxxx 00
X-00000 Xxxxxxxxx xx Xxxx
Xxxxxxx
3. Date of incorporation : 9 February 2000
(27 July 2000 - registered limited liability FF)
4. Class of company : Subsidiary of CTL
5. Authorised share capital : (pound)25,000
6. Issued share capital : (pound)25,000 (1 share)
7. Directors : Xxxxx Xxxxxxxxxxx
Xxxxx Xxxxx
8. Accounting reference date : 31 December
9. Auditors : KPMG Audit plc
10. Mortgages and Charges : None
11. Subsidiary Undertakings : None
-54-
Schedule 3
Allocation of Asset Consideration
The Asset Consideration shall be allocated amongst the Assets as follows:
Asset Price allocation ((pound))
----- --------------------------
Goodwill
Stocks
Contracts benefit the burden of the respective Contract
Plant and Equipment
BUK Intellectual Property Rights:
(a) BUK Software IPR
(b) Other BUK Intellectual Property Rights
BUK Information Technology
Vehicles
Fixed Assets
-----
Total
-----
Price allocation to be completed following determination of the Asset
Consideration pursuant to clause 6.9. Any part of the Asset Consideration not
expressly allocated to an Asset shall be allocated to the BUK Software IPR.
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Schedule 4
Warranties
1. The Warranties in Part A of this Schedule apply not only to the Company but
also to each Subsidiary Undertaking as if they had been expressly repeated
with respect to each such Subsidiary Undertaking, naming it in place of the
Company throughout.
2. The Warranties in Part B of this Schedule shall apply to the Assets, the
BUK Property and the Business.
3. In this Schedule any reference to provisions of United Kingdom laws or
regulations is to be taken, in relation to Subsidiary Undertakings
incorporated in or doing business in another jurisdiction, to the
equivalent provision having substantially the same effect in that other
jurisdiction.
4. In this Schedule:
(a) "Accounts" means the audited consolidated combined financial
statements of the Group and the Business for the fourteen month period
ended on the Balance Sheet Date, including all notes, reports,
statements and other documents annexed to them, whether or not
pursuant to any legal requirement;
(b) "Accounts Relief" means any Relief taken into account in computing and
so reducing or eliminating any provision for Tax (including deferred
Tax) which appears in the balance sheet in the Completion Accounts or
which was taken into account in the Completion Accounts as an asset;
(c) "ACT" means advance corporation tax within the meaning of section 14
of the ICTA 1988;
(d) "connected" has the meaning attributed to it by the Companies Xxx
0000;
(e) "Event" means any transaction, act, event or omission of whatever
nature;
(f) "Group Relief" means:
(i) relief the subject of a surrender or claim pursuant to Chapter IV
of Part X of the ICTA 1988;
(ii) advance corporation tax the subject of a surrender or claim
pursuant to section 240 of the ICTA 1988; and
(iii) any tax refund the subject of a surrender or claim pursuant to
section 102 of the Finance Xxx 0000;
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(g) "Guarantee means any guarantee, indemnity, suretyship, letter of
comfort or other assurance, security or right of set off given or
undertaken by a person to support the obligations of any other person
and either given directly or by way of counterindemnity to any other
person who has provided a Guarantee;
(h) "Interim Accounts" means the reviewed consolidated combined financial
statements of the Group and the Business for the nine month period
ended on the Interim Balance Sheet Date;
(i) "Management Accounts" means the management accounts for the Group and
the Business covering the period from 1 October 2001 to 31 December
2001.
(j) "Post-Completion Relief" means any Relief which arises to the
Purchaser or to the Company as a consequence of any Event occurring or
from income, profits or gains arising after Completion;
(k) "Relief" means any relief, allowance or deduction in computing
profits, credit or right to repayment of Tax (including repayment
supplement or interest thereon) granted by or pursuant to any
legislation or otherwise for Tax purposes whether of the United
Kingdom or elsewhere in the world;
(l) "Tax Liability" shall include:
(i) liabilities of the Company to make payments of or in respect of
Tax;
(ii) the denial, loss, use or set off in whole or in part of any
Accounts Relief which would, but for such denial, loss, use or
set off, have been available to the Company after Completion; and
(iii) the use or setting off in whole or in part against income,
profits or gains earned, accrued, arising or received on or
before Completion, or Tax thereon, of any Post-Completion Relief
where but for such use or setting off the Company would have had
an actual Tax Liability in respect of which the Purchaser would
have been able to make a claim against the Covenantor under this
Tax Covenant.
5. The only warranties in Part A of this Schedule given in relation to
Intellectual Property and Information Technology are those in paragraph L.
6. The only warranties in Part B of this Schedule given in relation to
Intellectual Property and Information Technology are those in paragraph I.
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Part A
A. Preliminary
A.1 The information set out in Schedules 1 and 2 of this Agreement is true and
accurate in all material respects and there is no matter which renders any
of such information untrue, inaccurate, incomplete or misleading.
A.2 The Seller has the right, power and authority and has taken all action
necessary to execute and deliver, and to exercise its rights and perform
its obligations under, this Agreement and each document to be executed at
or before Completion.
A.3 This Agreement constitutes, and the Tax Covenant and the other documents to
be executed by the Seller which are to be delivered at Completion will,
when executed, constitute legal, valid and binding obligations of the
Seller enforceable in accordance with their respective terms.
A.4 The Seller is entitled to sell and transfer or procure the sale and
transfer of the full legal and beneficial ownership in the Shares to the
Purchaser on the terms set out in the Agreement.
A.5 The execution and delivery of, and the performance of obligations under the
compliance with the provisions of, this Agreement and the Tax Covenant by
the Seller will not result in:
(a) a violation of any provision of its Memorandum or Articles of
Association; or
(b) so far as the Seller is aware, a violation of any law or regulation in
any jurisdiction having the force of law or of any order, judgement or
decree or any court of governmental agency or agreement to which the
Seller is a party or by which the Seller is bound.
A.6 The Seller is not aware of any legal proceedings that are pending or have
been threatened in connection with the sale and purchase of the Shares,
Assets and/or Business.
B. The Accounts and the Interim Accounts
B.1 The copies of the Accounts annexed to the Disclosure Letter are true and
complete copies. The Accounts:
(a) give a true and fair view of the state of affairs of the Group
(including the Business) at the Balance Sheet Date;
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(b) have been prepared in accordance with the laws of England and Wales
including the Companies Xxx 0000 and with generally accepted
accounting standards, principals and practices in the United Kingdom
and other applicable statutes and regulations; and
(c) have been prepared, unless otherwise expressly stated therein, on a
basis consistent with the basis applied in preparing the audited
consolidated accounts of the Group (including the Business) for the
preceding financial years thereto.
B.2 The copies of the Interim Accounts annexed to the Disclosure Letter are
true and complete copies. The Interim Accounts have been prepared, with due
skill and care on a basis consistent with the basis applied in the
Accounts.
B.3 The Management Accounts (copies of which are attached to the Disclosure
Letter) have been prepared with due skill and care in the ordinary course
of the business of the Group and show a reasonably accurate view of the
state of affairs and profit and loss of the Group and the Business as at
and for the period in respect of which they have been prepared but it is
hereby acknowledged that they have not been prepared on a statutory basis.
B.4 There is annexed to the Disclosure Letter details of all debts owing to a
member of the Group (other than from another member of the Group) as at 30
September 2001 which were then outstanding for in excess of 60 days after
their due date of payment.
B.5 The costs shown in the Interim Accounts and the Management Accounts are
properly attributable to the business conducted by the Group and the
Business.
C. Business since the Balance Sheet Date
C.1 Since the Balance Sheet Date:
(a) the Group has carried on its business in the ordinary and usual course
and so as to maintain the same as a going concern;
(b) there has been no material adverse change in the financial position of
the Group;
(c) so far as the Seller is aware, no unlawful act of any person has
depleted the assets of any Group member; and
C.2 Since the Interim Balance Sheet Date:
(a) no member of the Group has acquired or disposed of or agreed to
acquire or dispose of any material assets or assumed or incurred or
agreed to assume or incur any
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material liabilities (including contingent liabilities) otherwise than
in the ordinary course of its business;
(b) no loan or loan capital has been repaid by any member of the Group in
whole or in part or has become liable to be so repaid; and
(c) each member of the Group has paid its creditors and collected its
debtors in a manner consistent with the management practice in the six
months immediately prior to the date of this Agreement.
D. Share capital and constitution of the Group
D.1 The register of members of each Group member contains complete and accurate
records of its members as at the date of this Agreement.
D.2 There is no subsisting option, right of pre-emption, right or obligation to
acquire, redeem or convert or Encumbrance on and nor has any Group member
agreed to give or create any option, right of pre-emption, right or
obligation to acquire, redeem or convert or Encumbrance on, over or
affecting the share capital (whether issued or unissued and whether or not
authorised capital) of itself.
D.3 The copy of the memorandum and articles of association of the Company
annexed to the Disclosure Letter is up to date, true and complete.
D.4 The Shares comprise all the shares in issue in the capital of the Company
are legally and beneficially owned by the Seller free from Encumbrances and
are fully paid.
E. Subsidiary Undertakings and related operations
E.1 The Company is not the holder or beneficial owner of any shares or
securities of any other person (whether incorporated in England and Wales
or elsewhere) other than the Subsidiary Undertakings and has not agreed to
acquire any such shares or securities. The Subsidiary Undertakings are
wholly owned by the Company (or in the case of Content Technologies Inc,
and Content Technologies (Asia-Pacific) Pty Limited by Content Technologies
Limited) free from any Encumbrances. No Subsidiary Undertaking owns any
other subsidiary undertaking.
E.2 No member of the Group is nor has agreed to become a member of any
partnership, joint venture, consortium or other incorporated or
unincorporated association and has no branch, agency, place of business or
establishment outside England and Wales other than those disclosed in
Schedule II of this Agreement.
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F. Assets
F.1 The figure shown in the Interim Accounts against "Assets" reflects the
value of the assets owned by the Group members and such assets are the
property of the relevant Group member free from any hire or hire purchase
agreement and Encumbrances and have at all material times been and are in
the possession of or under the control of a Group member.
F.2 Each Group member owns or has and will following Completion have the right
to use all assets and rights that it needs to carry on its business in
substantially the same manner as it was carried on immediately before the
date of this Agreement.
G. Properties
G.1 The Properties comprise all of the land and premises owned, occupied or
otherwise used by any Group member. The particulars of the Properties shown
in Schedule 6 are true and correct and each one of the Group members is the
beneficial owner of those Properties set out opposite its name in that
Schedule.
G.2 The title to each of the Properties is good and is properly constituted by
documents of title which are in the possession of and under the control of
the relevant Group member.
G.3 True and complete copies of all documents relating to the title to the
Properties have been produced to the Purchaser's Solicitors.
G.4 Each of the Properties is free from any Encumbrance.
G.5 The relevant Group Member is in sole and exclusive occupation of the
Properties vested in it.
G.6 The Properties are not subject to the payment of any outgoings other than
business rates, water rates and sewerage charges and the sums reserved by
the lease or tenancy agreement under which the Properties are held.
G.7 The relevant Group member has paid all rent or licence fees and all other
outgoings which have become due in respect of each of the Properties. The
relevant Group member has materially performed and observed all obligations
under all covenants or conditions contained in the lease or tenancy
agreement under which the Properties are held. No notice of any breach of
any such matter has been received.
G.8 The Seller has not received notice of any dispute relating to any of the
Properties.
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X.0 The written replies given by or on behalf of the Seller to enquiries raised
by the Purchaser's Solicitors in respect of any of the Properties are true
and accurate to the Seller's reasonable knowledge.
G.10 Since the Interim Balance Sheet Date no Group Member has acquired or
disposed of or agreed to acquire or dispose of the whole or any part of any
land or buildings or any interest therein, nor will it acquire or dispose
of the whole or any part of any land or buildings or interest therein
without the prior written consent of the Purchaser.
G.11 No Group member has any existing or contingent liabilities in respect of
any properties previously occupied by it or in which it owned or held any
interest or in connection to which it acted as surety.
G.12 To the best of the Seller's knowledge the lease of the Frankfurt office (as
is more particulary described in Schedule 6 of this Agreement) was
correctly executed by the tenant under the lease with full power of
authority and that the lease is valid under German law.
G.13 So far as the Seller is aware no notices have been received alleging any
breach of any agreements, covenants, restrictions and statutory
requirements or other matters to which the Properties are subject and there
are no claims or disputes or outstanding orders or notices affecting the
Properties.
H. Environmental
H.1 So far as the Seller is aware the Group has at all times complied with
Environmental Laws and there is no claim, proceeding, action, judgement or
warning either current or pending in respect of Environmental Law against
any Group member or any of its directors, secretary or senior employees in
their capacity as such.
H.2 So far as the Seller is aware the condition of the Properties is such that
there are no circumstances in which the presence of any Relevant Substance
could result in any claim, proceeding, action, judgement or warning being
brought against the Group under Environmental Law by any lawful authority
or third party or which could require the Group to undertake remedial works
(whether ordered by a Court or by agreement with a third party).
I. Health and Safety
Each Group member has complied in all material respects with all relevant
laws relating to employee, contractor and third party health and safety.
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J. Insurance
J.1 All insurance policies relating to the assets and business of the Group and
currently in force have been disclosed to the Purchaser.
J.2 So far as the Seller is aware, there is no claim exceeding (pound)50,000
outstanding under any such policy either by the insurer or the insured and
there are no circumstances which would entitle any Group member to make a
claim under any of the policies.
J.3 All premiums due on the policies in respect of such insurance cover has
been paid.
K. Commercial agreements and arrangements
K.1 The Seller has disclosed to the Purchaser in the Disclosure Letter all
contracts (other than this Agreement) entered into by any Group member
under which payments are still due and owing and/or obligations are still
to be performed and under which sums in excess of (pound)50,000 are or may
be payable or receivable in any consecutive twelve month period.
K.2 No Group member has committed a material breach of any material contract,
agreement or arrangement to which it is a party and, so far as the Seller
is aware, no other party to such contracts, agreements or arrangements is
in material breach of the same.
K.3 No Group member is a party to any contract, obligation or agreement (other
than this Agreement) under which payments are still due and owing and/or
obligations are still to be performed and which:
(a) is of an unusual or abnormal nature, not on arm's length terms or
outside the ordinary course of trading;
(b) is of a long term nature (that is, unlikely to have been fully
performed in accordance with its terms within 12 months after the date
on which it was entered into or undertaken); or
(c) is incapable of termination by such Group member in accordance with
its terms on no more than 12 months' notice.
K.4. No Group member is a party to any material contract, agreement or
arrangement which will enable the other party to terminate the same by
virtue of this Agreement or its Completion.
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K.5 There are in existence no contracts, arrangements, engagement or agreements
remaining in whole or in part to be performed between the Seller or any
member of the Seller's Group and any Group member.
L. Intellectual Property Rights and Information Technology
General
L.1 The Group members are the legal and beneficial owners of the rights set out
in Schedule 7 and all the copyright in the Products other than that
Intellectual Property which is subject to the licences and consents
disclosed in the Disclosure Letter or assigned by BUK hereunder or which is
freely available from public sources for use without payment of royalty or
fee (including without limitation, freeware). As far as the Seller is aware
all Intellectual Property owned by the Group is free from Encumbrances.
L.2 The Group has disclosed complete and accurate copies of all material
written licences and consents of Intellectual Property granted to or by
each Group member and all other material agreements relating to
Intellectual Property enjoyed by the Group, except:
(a) for licences to the Group of retail computer software; and
(b) licences substantially on the Group's standard terms and conditions as
referred to in the Disclosure Letter granted to third parties for
their use of the Products,
(together the "Licences").
L.3 Save as disclosed in the Disclosure Letter, and so far as the Seller is
aware, none of the Group members are in breach of any Licences and so far
as the Seller is aware there are no grounds on which any Licences can be
terminated, suspended, varied or revoked without the consent of a member of
the Group. The Group has neither served notices relating to a breach (or
alleging breach) of the terms of any of the Licences on the counterparties
thereto nor received any notices relating to a breach (or alleging breach)
of the terms of any of the Licences from any counterparties thereto.
L.4 As far as the Seller is aware, all renewal and application fees due as at
the date of this Agreement in respect of registered Intellectual Property
(or applications therefor) owned by the Group members have been paid. The
Seller has disclosed details of currently unresolved notices of opposition
and objection relating to the registered Intellectual Property Rights and
applications therefor.
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L.5 As far as the Seller is aware, there is no infringement (and the Seller has
not received notifications of infringement since 25 October 2000) of the
Group Product IPR by any third party.
L.6 As far as the Seller is aware, there is no infringement (and the Seller has
not received notifications of infringement since 25 October 2000) of any
third party Intellectual Property by any Group member.
L.7 Complete, accurate and up to date particulars of all Intellectual Property
of which any member of the Group is or is applying to be registered as the
proprietor are set out in Schedule 7.
L.8 So far as the Seller is aware, the Group has not received any applications
for licences of right, compulsory licences or equivalent relief in any
jurisdiction in respect of the Intellectual Property Rights.
L.9 So far as the Seller is aware, all material know-how used by the Group in
the Business is adequately documented or otherwise embodied in physical
form to enable the Purchaser to acquire its full benefit and is in the
possession or control of the Group. No member of the Group has made
disclosure of any such material know-how used by it other than under
enforceable confidentiality undertakings.
L10 With the exception of all Intellectual Property comprised in the
Information Technology, as far as the Seller is aware, the Intellectual
Property Rights, BUK Intellectual Property Rights, the rights granted under
the Licences and the Intellectual Property assigned or licensed under this
Agreement together comprise all the material Intellectual Property that is
necessary for the Group to carry on its business after Completion in
substantially the same manner as it was carried on immediately before the
date of this Agreement.
L.11 The Group has in its possession and control complete copies of all source
codes of all versions of the Products currently sold and maintained.
L.12 So far as the Seller is aware, all members of the Group have complied in
all material respects with the provisions of all privacy or data protection
legislation to which they are subject including without limitation the
provisions of the Data Protection Xxx 0000.
L.13 Details of all claims on the Intellectual Property Rights brought by
employees or previous employees are contained in the Disclosure Letter.
L.14 No member of the Group operates under any name other than Baltimore, its
corporate name and the trade marks set out in Schedule 7.
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L.15 The Disclosure Letter sets out details of all anti virus software used by
the Group and back up systems in place.
L.16 Since the Balance Sheet Date, so far as the Seller is aware, no unlawful
act of any person has depleted the assets of any Group member.
L.17 Since the Interim Balance Sheet Date no member of the Group has acquired or
disposed of or agreed to acquire or dispose of any material assets or
assumed or incurred or agreed to assume or incur any material liabilities
(including contingent liabilities) otherwise than in the ordinary course of
its business.
L.18 The figure shown in the Interim Accounts against "Assets" reflects the
value of the assets owned by the Group members and such assets are the
property of the relevant Group member free from any hire or hire purchase
agreement and Encumbrances.
L.19 No Group member is a party to any contract, obligation or agreement (other
than this Agreement) which:
(a) is of an unusual or abnormal nature, not on arm's length terms or
outside the ordinary course of trading;
(b) is of a long term nature (that is, unlikely to have been fully
performed in accordance with its terms within 12 months after the date
on which it was entered into or undertaken); or
(c) is incapable of termination by such Group member in accordance with
its terms on no more than 12 months' notice.
L.20 There are in existence no contracts, arrangements, engagement or agreements
remaining in whole or in part to be performed between the Seller or any
member of the Seller's Group and any Group member.
L.21 All documents which establish or are necessary to establish the title of
the Company to any asset, and all documents in the possession of the
Company which are necessary to enforce rights, and which attract stamp
duty, or any other tax or duty imposed on, or as a condition to the
validity, registrability, or enforceability of any document, have been
properly stamped.
L.22 All Tax for which the Company is liable (in so far as such Tax ought to
have been paid) has been paid, including (without limitation) payments
under the Corporation Tax (Instalment Payments) Regulations 1998. The
Company has duly deducted all amounts from any payments from which it is
required to deduct tax at source, and has duly paid or accounted for such
amounts to the relevant Tax authority.
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L.23 All transactions between Group members and between the Company on the one
hand and the Seller, any parent company of the Seller, and any subsidiary
of the Seller or of such parent on the other, will be treated for Tax
purposes as being on fully arm's length terms. No adjustment has been made
by the Company or made or, so far as the Seller is aware, proposed by any
Tax authority which could require the Company to make any adjustment for
tax purposes to the terms on which any such transaction is treated as
taking place.
M. Compliance and Litigation
M.1 So far as the Seller is aware the Group is and has conducted its business
in all material respects in accordance with all applicable laws and
regulations of the United Kingdom and any other applicable foreign country
and there is no order, decree or judgment of any Court or any governmental
agency of the United Kingdom or any other foreign country outstanding
against any member of the Group which may have a material adverse effect
upon the assets or business of the Group.
M.2 Each Group member has obtained all material licences, permissions, consents
and other approvals required for or in connection with the export of the
Products and is not in material breach of the same.
M.3 Save as plaintiff in proceedings for the collection of debts (not exceeding
(pound)50,000) no member of the Group is now engaged in any litigation or
arbitration or other legal proceedings nor are any litigation or
arbitration or other legal proceedings pending or threatened by or against
any member of the Group of which the Seller is aware, which may have a
significant effect on the Group's financial position.
N. Employees
N.1 In respect of all present officers and employees of any member of the Group
the Employment Statutes have been duly complied with in all material
respects.
N.2 A list of all persons who hold Options is set out in the Disclosure Letter.
This list also includes details of any options or other share incentives
held by Employees and Senior Management granted under arrangements outside
the Plans other than those under the Content Technologies Holdings Award
Plan.
N.3 There are no persons employed by the Company.
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N.4 There is attached to the Disclosure Letter a schedule showing the following
information in relation to all employees of each Group member namely:
(a) name;
(b) employer;
(c) age;
(d) job title;
(e) emoluments (including any bonus or commission arrangements and any
non-cash benefits);
(f) date of commencement of employment or of any previous employment with
which such employment is continuous;
(g) notice period required to be given by the Group member and the
employee; and
(h) whether or not a member of any Group member's pension scheme(s)
and such information is complete and accurate in all material respects. No
person previously employed by any Group member has a right to return to
work or any right to be reinstated or re-engaged by any Group member
whether under statute or otherwise.
N.5 No material change in the terms of employment of any employee of any Group
Member and no negotiation or request for such a change, is due or expected.
N.6 No employee of any Group member has given notice terminating his contract
of employment or is under notice of dismissal and no Group member has made
any offer to employ any person who is not listed as an employee in the
schedule referred to in paragraph M.4 above.
N.7 There is no existing, pending or threatened litigation or dispute between
any Group member and any of its employees or any trade union or other
organisation formed for a similar purpose or any other employee
representative(s) (and there are no payments which are due and unpaid in
relation to any such litigation or dispute) and there are no circumstances
(including Completion) which are likely to give rise to any such litigation
or dispute.
N.8 Save as disclosed in the schedule referred to in M.4 there is not now
outstanding any contract of employment or contract of services between any
Group member and any director, officer or employee which is not terminable
by the relevant Group member without compensation (other than statutory
compensation) on three months' notice or less given at any time.
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N.9 Within two years preceding the date of this Agreement, there has been no
industrial action or trades disputes involving or relating to any employee
of any Group member.
N.10 Accurate, up-to-date and complete copies of a representative sample of the
contracts of employment between each Group member and its employees and any
other documents currently in force relating to the employment of such
employees have been disclosed together with full particulars of any
consultancy or secondment or other similar agreements or arrangements to
which any Group member is a party and copies of all such agreements
currently in force.
N.11 No amount due to or in respect of any employee or former employee of any
Group member is in arrears and unpaid other than salary for the month
current at the date of this Agreement.
N.12 Full and up-to-date particulars of all existing and proposed works
councils, collective agreements and other arrangements or understandings
(whether binding or not) between any Group member and any trade union,
staff association or other body representing any employee of any Group
member and all documents relating to such agreements, arrangements and
understanding are appended to the Disclosure Letter.
N.13 There are no arrangements by any Group member planned or in progress for
dismissing any employee of any Group member by reason of redundancy or
business reorganisation.
N.14 There are no terms and conditions in any contract of employment with any
officer or employee of any Group member or any other binding agreement with
any such person pursuant to which such person will be entitled to receive
any payment or benefit or such person's terms and conditions of employment
change as a direct consequence of the transaction contemplated by this
Agreement save as detailed in this Agreement.
O. Pensions
O.1 In this paragraph:
"the UK Scheme" shall mean the Baltimore Technologies (UK) Limited Group
Personal Pension Plan; and
"the Overseas Scheme" shall mean the Australian superannuation fund and the
US 401(k) Plan.
O.2 Save for the UK scheme, the Overseas Schemes, applicable State schemes and
fully insured life assurance cover, neither BUK nor any Group member has
any present or contingent liability to contribute to any retirement
benefit, pension or life assurance scheme or
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arrangement, pension fund or personal pension scheme or stakeholder
arrangement whether in the United Kingdom or overseas relating to any of
the Group's employees, nor has any proposal to do so been announced.
O.3 In respect of the UK Scheme and the Overseas Schemes, liability of the
Group and BUK to contribute is on a money purchase/defined contribution
basis only and there are no final salary/defined benefits or final
salary/defined benefit underpins provided in respect of any such person.
O.4 Material particulars of the UK Scheme have been disclosed to the Purchaser
and all information which has been made available by the Seller or its
advisers to the Purchaser in connection with the Pension Schemes on or
before the date of this Agreement is true, complete and fairly presented in
all material respects.
O.5 So far as the Seller and BUK are aware, there are no pending or current
claims or disputes concerning benefits to be provided under the UK Scheme
or the Overseas Schemes or in respect of the non-provision of relevant
benefits (as defined in s612 Income and Corporation Taxes Act 1988) or of
such benefits outside the United Kingdom.
P. Finance
P.1 Full and accurate details of all bank accounts, overdrafts, loans or other
financial facilities outstanding or available to the Group are disclosed in
the Disclosure Letter (including details of whether any are dependent on
any guarantee or security provided by any third party) and true and
complete copies of all documents relating thereto are annexed to the
Disclosure Letter. No steps have been taken or threatened to enforce any
facility.
P.2 No event has occurred or been alleged which is or, with the giving of any
notice, certificate, declaration or demand, would become an event of
default under, or a breach of any of, the terms of any loan capital,
borrowing, debenture or financial facility of any Group member or would
entitle any third party to call for repayment before normal maturity.
P.3 Save for the borrowing referred to in paragraph O.1, no Group member:
(a) has outstanding any loan capital;
(b) has incurred or agreed to incur any borrowing which it has not repaid
or satisfied;
(c) has lent or agreed to lend any money which has not been repaid to it;
(d) owns the benefit of any debt present or future (other than debts due
to it in respect of the sale of trading stock in the normal course of
trading); and
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(e) is a party to or has any obligation under:
(i) any loan agreement, debenture acceptance credit facility, xxxx of
exchange, promissory note, finance lease, debt or inventory
financing, discounting or factoring arrangement or sale and lease
back arrangement; or
(ii) any other arrangement the purpose of which is to raise money or
provide finance or credit.
P.4 No Group member is a party to, or has any liability (including without
limitation any prospective or contingent liability) under any Guarantee
whether given to support the obligations of any member of the Seller's
Group or otherwise.
P.5 No Guarantee which remains outstanding has been given by any member of the
Seller's Group or by any other person to support the obligations of any
Group member.
P.6 There is no outstanding indebtedness on any account whatever owing by any
Group member to any member of the Seller's Group or by any member of the
Seller's Group to any Group member.
P.7 No Encumbrance over any asset of any Group member will be created,
crystallised or become enforceable as a result of the signing of this
Agreement or of Completion.
Q. Insolvency
Q.1 No order has been made and no resolution has been passed for the winding up
of any Group member or for a provisional liquidator to be appointed in
respect of any Group member and no petition has been presented and no
meeting has been convened for the purpose of winding up any Group member.
Q.2 No administration order has been made and no petition for such an order has
been presented in respect of any Group member.
Q.3 No receiver (which expression shall include an administrative receiver) has
been appointed in respect of any Group member or in respect of all or any
material part of its assets.
Q.4 No voluntary arrangement has been proposed under section 1 Insolvency Xxx
0000 in respect of any Group member.
Q.5 No Group member is insolvent or unable to pay its debts within the meaning
of section 123 of the Insolvency Xxx 0000.
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Q.6 No distress, execution or other process has been levied or threatened in
respect of any asset of any Group member.
Q.7 No composition in satisfaction of the debts of any Group member or scheme
of arrangement of its affairs or compromise or arrangement between it and
its creditors and/or members or any class of its creditors and/or members
has been proposed, sanctioned or approved.
Q.8 So far as the Seller is aware, no event analogous to any of the
circumstances mentioned in any of the foregoing sub-paragraphs of this
paragraph P has occurred in relation to any Group member outside England.
Q.9 No circumstances have arisen which are likely to result in:
(a) a transaction to which any Group member is a party being set aside; or
(b) a third party claim involving any asset owned or used by any Group
member being made under section 238 (Transactions at an undervalue) or
239 (Preferences) of the Insolvency Xxx 0000.
R. Tax Warranties
R.1 Accounts
R.1.1 All liabilities for Tax (whether actual, contingent or deferred) of the
Company measured by reference to income, profits or gains earned, accrued
or received on or before the Balance Sheet Date, or arising in respect of
an Event occurring on or before that date, are provided for in the
Accounts.
R.2 Position since the Balance Sheet Date
R.2.1 Since the Balance Sheet Date the following events have not occurred:
(a) any distribution or deemed distribution for Tax purposes;
(b) any Event which results in a Tax Liability arising in the Company
where such liability is chargeable on or attributable primarily to a
person other than the company;
(c) the Company ceasing, for Tax purposes, to be a member of any group or
associated with any other company;
(d) no Event has occurred in relation to the Company:
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(i) which will or may give rise to a liability to Tax on the disposal
(or deemed disposal) of capital assets where the consideration
actually received for such disposal was less than the
consideration which could be deemed to have been received for tax
purposes; or
(ii) to which the provisions of any enactment which has or may have
the effect of substituting a different consideration from that
actually payable or receivable apply; or
(iii) which has or may have the effect of crystallising a liability to
Tax which, had such Event been planned or predicted at the
Balance Sheet Date, should have been reflected in the provisions
for deferred tax contained in the Accounts; and
(e) no accounting period of the Company for the purposes of any Tax has
ended otherwise than by effluxion of time;
(f) the Company has not made any claim under any of the sections 279
(1)-(6) or sections 152 or 153 or 154 or 175 TCGA 1992;
(g) the Company has not paid any Taxation after its due date for payment
and does not owe any Taxation the due date for payment of which has
passed; and
(h) the Company has not been involved in any transaction which has given
or may give rise to a liability to Taxation on the Company (or would
have given or might give rise to such a liability) but for the
availability of any Relief (other than Taxation in respect of normal
trading income or receipts of the Company arising from transactions
entered into by it in the ordinary course of business).
R.3 Compliance
R.3.1 All necessary material information, notices, returns, particulars,
declarations, entries, claims for Reliefs, and computations have been
properly and duly submitted on time by the Company to the relevant Tax
authority and such submissions are true and accurate in all material
respects have been prepared on a proper basis, and are not the subject of
any outstanding question or dispute nor, so far as the Seller is aware, are
they likely to become the subject of any question or dispute regarding
liability or potential liability of the Company to any Tax or regarding the
availability to the Company of any Relief.
R.3.2 Within the three years commencing before the date hereof the Company has
not been the subject of any investigation, audit or disclosure by or
involving any investigation unit of any Tax authority, and has not paid or
become liable to pay any penalty, surcharge, fine or interest in respect of
Tax, and so far as the Seller is aware there are no circumstances which
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make it likely that the Company will, in the foreseeable future, be so
subject, or will incur any such liability.
R.3.3 The Company has preserved all material records required for the delivery
of correct and complete returns and all records required for the delivery
of correct and complete returns as required by Schedule 18 Finance Xxx
0000.
R.3.4 The Company has full documentation in order to determine the amount of any
payments due in respect of any accounting period beginning on or before
Completion, pursuant to the Corporation Tax (Instalment Payments)
Regulations 1988.
R.4 The Disclosure Letter contains details of any current agreements or
arrangements between the Company and any Tax authority for its taxation on
any concessionary basis (other than pursuant to published extra-statutory
concessions).
R.5 All Tax for which the Company is liable (in so far as such Tax ought to
have been paid) has been paid, including (without limitation) payments
under the Corporation Tax (Instalment Payments) Regulations 1998. The
Company has duly deducted all amounts from any payments from which it is
required to deduct tax at source, and has duly paid or accounted for such
amounts to the relevant Tax authority.
R.6 Residence/overseas activities
R.6.1 The Company is and has always been resident in its country of
incorporation for the purposes of taxation and is not and has never been
resident in any other jurisdiction for the purposes of taxation, or carried
on business through a branch, agency or permanent establishment situated
outside its country of incorporation including for the purposes of any
double-taxation agreement.
R.6.2 The Company is not liable for any Taxation as the agent of any other
person or business and does not constitute a permanent establishment of any
other person, business or enterprise for any Taxation purpose.
R.7 Secondary liabilities
R.7.1 The Company is not, and so far as the Seller are aware will not become,
liable to pay any Tax for which some other company (other than the Company)
or person is or was primarily liable.
R.8 Employees
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R.8.1 The Company has properly operated the PAYE and National Insurance systems
deducting and accounting for Taxation and maintaining all such records as
are required by the relevant Taxation Authority.
R.8.2 No payment has been made by the Company to or in respect of any of its
directors or of any director of the Seller or any company controlled by or
under common control with the Seller (including, but not limited to,
pension contributions) which will not be deductible for corporation tax
purposes, either in computing its income profits or in computing the
corporation tax payable by it.
R.9 Capital gains
R.9.1 If the Company disposed of each of its assets (except trading stock and
work-in-progress) for a consideration equal to the book value of that asset
as shown in or adopted for the purposes of the Accounts to a person in a
bargain at arm's length, the liability to Tax would not exceed the amounts
taken into account in respect of that asset in computing the maximum
liability to deferred tax as stated in the Accounts and the Company has not
acquired any such asset since the Balance Sheet Date except by way of
bargain at arm's length.
R.9.2 All chargeable assets of the Company were acquired at market value at the
time of acquisition and there are no circumstances giving rise or which may
give rise to liability or loss under or pursuant to any sections 17, 30,
139, 140, 176, 177, 178 and 179 TCGA and no loss falls to be restricted
under section 18 TCGA 1992 as a result of the proposed sale of the Shares
or of any other transaction.
R.9.3 The Company has sufficient records to determine the Taxation consequences
which would arise on any disposal or on the realisation of any asset owned
at the Balance Sheet Date or acquired since that date but before Completion
and to determine the Taxation consequences of any restriction on set-off of
pre-entry losses pursuant to Schedule 7A TCGA 1992.
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R.10 Capital expenditure
R.10.1 If the Company disposed of each of its assets, or of any pool of assets
(that is to say all those assets expenditure relating to which would be
taken into account in computing whether a balancing charge or corresponding
Tax Liability would arise on a disposal of any of those assets) for a
consideration equal to their book value as shown in or adopted for the
purpose of the Accounts, no balancing charge or other liability to Tax
would arise in respect of any such asset or pool of assets under any
legislation conferring Relief in connection with the incurring of capital
expenditure.
R.11 Close Company
R.11.1 The Company is not, nor has it been in respect of any accounting period
ended within six years prior to the date of signing of this Share Purchase
Agreement, a close company within section 414 of the ICTA 1988.
R.12 Distributions
R.12.1 Save as provided for in the Accounts no distribution (within the meaning
of sections 209 and 210 ICTA 1988) has been made by the Company during the
six years ended on the Balance Sheet Date.
R.12.2 The Company has not:
(a) repaid, redeemed or purchased or agreed to repay, redeem or grant an
option under which it may become liable to purchase any of its share
capital; or
(b) capitalised or agreed to capitalise in the form of shares or
debentures, any profits or reserves of any class or description, or
otherwise issues or agreed to issue share capital otherwise than for
new consideration (as defined in section 254 ICTA 1988).
R.13 Transfer pricing, thin capitalisation
R.13.1 All transactions between Group members and between the Company on the one
hand and the Seller, any parent company of the Seller, and any subsidiary
of the Seller or of such parent on the other, will be treated for Tax
purposes as being on fully arm's length terms. No adjustment has been made
by the Company or made or, so far as the Seller is aware, proposed by any
Tax authority which could require the Company to make any adjustment for
tax purposes to the terms on which any such transaction is treated as
taking place.
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R.13.2 So far as the Seller is aware, there are no circumstances which could
cause any Tax authority to deny Relief for interest paid or payable by the
Company, and no such Relief has been denied or threatened to be denied.
R.14 Consequences of leaving a Group
Content Technologies Limited has not at any time within the last six years
acquired any asset from any other company which was, at the time of
acquisition, a member of the same group of companies as that member for the
purposes of any tax.
R.15 Group Relief, surrender of ACT and group income
R.15.1 All Group Relief claims made since 1 November 1999 comply with the
requirements of Part VIII schedule 18 Finance Xxx 0000. In respect of all
earlier accounting periods beginning on or before Completion:
(a) the Company is not subject to any liability (whether contingent or
otherwise) to make any payment for any Group Relief surrendered to it
under sections 402 to 413 ICTA 1988;
(b) the Company is not liable to surrender any Group Relief under sections
402 to 413 ICTA 1988; and
(c) there are no circumstances whereby the Company may become liable to
repay any sums paid to it for the surrender of any Group Relief under
sections 402 to 413 ICTA 1988.
R.16 Tax clearances
R.16.1 The Company has not been concerned in any transaction in which the
following provisions have been or could be applies except where all
applicable clearances (based on full disclosure of material facts and
circumstances) have been obtained:
(a) sections 219 to 229 (inclusive) ICTA 1988;
(b) sections 703 and 704 ICTA 1988;
(c) sections 765, 766 and 767 ICTA 1988;
(d) section 770A ICTA 1988;
(e) section 776 ICTA 1988;
(f) sections 779 to 786 (inclusive) ICTA 1988;
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(g) sections 13, 136 and 137 TCGA 1992;
(h) section 139 or 140 TCGA 1992; and
(i) section 192 TCGA 1992 and sections 213 to 218 (inclusive) ICTA 1988.
R.17 Controlled Foreign Companies
R.17.1 The Company has not been concerned in any transaction in which the
following provision have been or could be applied:
(a) sections 29 to 34 (inclusive) TCGA 1992;
(b) sections 116 to 118 (inclusive) TCGA 1992;
(c) section 399 ICTA 1988; or
(d) sections 729 to 746 (inclusive) ICTA 1988.
The Company has not received any notice of the making of a direction under
Section 747 of the ICTA 1988 and no circumstances exist under which any
profits of a controlled foreign company could be apportioned to the Company
under Section 752 of the ICTA 1988.
R.17.2 The provisions of sections 757 to 764 (inclusive) ICTA 1988 would not
apply to any disposal of an asset by the Company.
R.18 Non-Qualifying Offshore Funds
R.18.1 The Company has no material interest in:
(a) an offshore fund;
(b) a UK resident company; or
(c) a unit trust scheme (within the meaning of Section 469 of the ICTA
1988) the trustees of which are resident in the United Kingdom
any of which is or has at any material time been a non-qualifying offshore
fund for the purpose of sections 757 to 764 (inclusive) of and Schedules 27
and 28 ICTA 1988.
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R.19 VAT
R.19.1 The Company is registered for VAT purposes as part of a group of which
BUK is the representative member but no act or transaction has been
effected, and no circumstances exist, in consequence whereof the Company is
or may be held liable for any VAT calculated by reference to the supply of
goods or services by or to any other company. The Disclosure Letter
contains full details of the Company's VAT registration and the VAT office
responsible for the Company's VAT affairs.
R.19.2 The Company has complied in all material respects with VATA 1994 and any
statutory modification or re-enactment thereof and all orders, provisions,
directions or other conditions made or imposed thereunder or under any
other law relating to VAT.
R.19.3 All amounts due to be paid to Customs prior to Completion will have been
paid at the date thereof, no dispute exists between the Company and Customs
and there are no present circumstances which are likely to give rise to any
such dispute.
R.19.4 The Company:
(a) makes no supplies other than taxable supplies for the purposes of VAT;
(b) obtains credit for all input tax paid or suffered by it;
(c) is not the grantor or grantee of any interest in land in respect of
which an election has been made to waive exemption from VAT; and
(d) has no interest in any capital items in respect of which it is or may
be subject to any restrictions or adjustment of the amount of input
credit available to it for the purposes of VAT.
R.19.5 The Company has not made an election pursuant to paragraph 2, Schedule 10
VATA 1994.
R.19.6 No asset of the Company is a capital item the input tax on which may be
subject to adjustment in accordance with the provisions of Part XV Value
Added Tax Regulations 1995.
R.20. Stamp duty
R.20.1 All documents (other than documents relating to the Group Debt
Restructuring) which establish or are necessary to establish the title of
the Company to any asset, and all documents (other than documents relating
to the Group Debt Restructuring) in the possession of the Company which are
necessary to enforce rights, and which attract stamp
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duty, or any other tax or duty imposed on, or as a condition to the
validity, registrability, or enforceability of any document, have been
properly stamped.
Part B
The Assets and Business
A. Preliminary
A.1 BUK has the right, power and authority and has taken all action necessary
to execute and deliver, and to exercise its rights and perform its
obligations under, this Agreement and each document to be executed at or
before Completion.
A.2 This Agreement constitutes and the other documents to be executed by BUK
which are to be delivered at Completion will, when executed, constitute
legal, valid and binding obligations of BUK enforceable in accordance with
their respective terms.
A.3 BUK is entitled to sell an transfer or procure the sale and transfer of the
Business and Assets to the Purchaser on the terms set out in the Agreement.
A.4 The execution and delivery of, and the performance of obligations under and
compliance with the provisions of, this Agreement by BUK will not result
in:
(a) a violation of any provision of its Memorandum or Articles of
Association; or
(b) so far as the Seller is aware, a violation of any law or regulation in
any jurisdiction having the force of law or of any order, judgement or
decree of any court or governmental agency or agreement to which it is
a party or by which is bound.
B. Business since the Balance Sheet Date
B.1 Since the Balance Sheet Date:
(a) the Business has been operated in the ordinary and usual course and so
as to maintain the same as a going concern;
(b) there has been no material adverse change in the financial position of
the Business;
(c) there has been no unusual change in the stock levels of the Business;
and
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(d) none of the material fixed assets used for the purposes of the
Business have been lost, severely damaged or destroyed and so far as
the Seller is aware no material assets of BUK have been depleted by
any unlawful act of any person.
B.2 Since the Interim Balance Sheet Date:
(a) BUK has not acquired or disposed of or agreed to acquire or dispose of
any material assets or assumed or incurred or agreed to assume or
incur any material liabilities (including contingent liabilities
forming part of the Business) otherwise than in the ordinary course of
its business; and
(b) BUK has paid the creditors and collected the debtors of the Business
in a manner consistent with the management practice in the six months
immediately prior to the date of this Agreement.
C. Assets
C.1 The information set out in Schedules 9-13 inclusive is true and accurate in
all material respects and (so far as the Seller is aware) there is no
matter which renders any of such information untrue, inaccurate, incomplete
or misleading.
C.2 All of the Assets are the property of the Seller free from any hire or
hire-purchase agreement or agreement for payment on deferred terms or xxxx
of sale or lien, Encumbrance, or other adverse claim and have at all
material times been and are in the possession of or under the control of
the Seller. Without prejudice to the generality of the foregoing, none of
the Assets are held on a sale or return basis.
C.3 Each of the tangible Assets is in good condition and working order and
complies with appropriate safety regulations.
C.4 The Assets comprise all of the assets and rights necessary for the
Purchaser to carry on the Business substantially in the same manner as it
was carried on by BUK immediately before the date of this Agreement. The
Business does not require or depend for its continuation or, for the
continuation of the method, manner or scope in which it is carried on upon
any asset, premises, facilities or services owned or supplied by BUK or any
member of the Seller's Group which are not comprised in the Assets or upon
any asset, premises, facilities or services owned or supplied by any third
party.
C.5 All contracts and other material assets that were transferred to Baltimore
Technologies Australasia Pty Limited from Content Technologies
(Asia/Pacific) Pty Limited on 1 July 2001 and formerly used by Baltimore
Technologies Australasia Pty Limited, insofar as the same relate wholly or
mainly to the Business, have been retransferred to Content Technologies
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(Asia/Pacific) Pty Limited and that Content Technologies (Asia/Pacific) Pty
Limited has all of the assets it needs to carry on the Business as it was
conducted by Baltimore Technologies Australasia Pty Limited immediately
prior to the date that the Business was retransferred to Content
Technologies (Asia/Pacific) Pty Limited. For the purposes of this warranty
the definition of "Business" shall be read so that any reference to "BUK"
shall be deemed to read "Baltimore Technologies Australasia Pty Ltd".
C.6 Baltimore Technologies Australasia Pty Limited is not the employer of any
of the employees required by Content Technologies (Asia/Pacific) Pty
Limited to conduct its Business. For the purposes of this Warranty the
definition of "Business" shall be read so that any reference to "BUK" shall
be deemed to read "Baltimore Technologies Australasia Pty Limited".
D. Contracts
D.1 The Disclosure Letter contains or has annexed to it all contracts (other
than this Agreement) entered into by or on behalf of the Seller or BUK
which relate to the Business and under which payments are still due and
owing and/or obligations are still to be performed and which are material
to the carrying on of the Business and which:
(a) involve an expenditure in any consecutive twelve month period of more
than(pound)50,000 by the Seller or BUK; or
(b) contain any unduly onerous term or terms.
D.2 There are in existence no contracts remaining in whole or in part to be
performed affecting the Business between the Seller and any member of the
Seller's Group.
D.3 So far as the Seller is aware, no circumstances exist which constitute a
ground on which any Contract could be avoided, repudiated, rescinded,
prematurely determined (whether as a result of this Agreement, the sale of
the Business and/or any of the Assets or otherwise) or declared to be
invalid in circumstances where the same happening will have a material and
adverse affect on the financial position of the Business. So far as the
Seller is aware, no circumstances exist which have given or would give rise
to any material claim under a Contract by any of the parties to them. BUK
has not received any notice of a claim to that effect or indicating that
such a claim is foreseeable.
D.4 The Contracts are all the contracts, arrangements and engagements which
relate to the Business.
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X. Xxxxx
X.0 The Stock is in good condition and is capable of being sold by BUK in the
ordinary course of business in accordance with its current price list
without rebate or allowance.
E.2 The Stock does not include any obsolete or slow moving lines, or excessive
or inadequate quantities of any line, having regard to the current level of
business.
F. BUK Property
F.1 The title to the BUK Property is good and is properly constituted by
documents of title which are properly stamped.
F.2 True and complete copies of all of the documents relating to the title to
the BUK Property have been produced to the Purchaser's Solicitors.
F.3 The Seller is in sole and exclusive occupation of the BUK Property and
there are no subsisting underleases of the whole or any part of it. The
Seller has materially performed and observed all obligations under all
covenants or conditions contained in the lease of the BUK Property.
F.4 The actual use of the BUK Property is as offices. The Seller is not aware
of any current contravention of any of the provisions of the Town and
Country Planning legislation.
F.5 The Seller has not received notice of any dispute relating to the BUK
Property.
F.6 The written replies given by or on behalf of the Seller to enquiries raised
by the Purchaser's solicitors in respect of the BUK Property are true and
accurate to the best of the Seller's reasonable knowledge.
G. Health and Safety
G.1 In relation to the Business, BUK has complied in all material respects with
all relevant laws relating to the Employees, contractor and third party
health and safety.
H. Insurance
H.1 All insurance policies relating to the Assets and Business and currently in
force have been disclosed to the Purchaser.
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H.2 So far as the Seller is aware, there is no claim exceeding (pound)50,000
outstanding under any such policy either by the insurer or the insured and
there are no circumstances which would entitle the Seller to make a claim
under any of the policies.
H.3 All premiums are on the policies for such insurance cover have been paid.
I. BUK Intellectual Property Rights
I.1 BUK is the beneficial owner of the rights set out in Schedule 7 and the
copyright in the Products other than the Intellectual Property which is
subject to the licences and consents disclosed in the Disclosure Letter or
owned by the Group or which is freely available from public sources for use
without payment of royalty or fee (including without limitation, freeware).
So far as the Seller is aware all Intellectual Property owned by BUK is
free from Encumbrances.
I.2 BUK has disclosed complete and accurate copies of all material written
licences and consents of Intellectual Property granted to or by BUK in the
course of carrying on the Business and all other material agreements
relating to Intellectual Property enjoyed by BUK in the course of carrying
on the Business except:
(a) for licences to BUK of retail computer software; and
(b) licences granted to third parties for their use of the Products
substantially on BUK's standard terms and conditions referred to in
the Disclosure Letter,
(together the "BUK Licences").
I.3 Save as disclosed in the Disclosure Letter and so far as the Seller is
aware, BUK is not in breach of any of the BUK Licences and so far as the
Seller is aware there are no grounds on which any BUK Licence can be
terminated, suspended or revoked without the consent of BUK. BUK has
neither served notices relating to a breach (or alleging breach) of the
terms of any of the BUK Licences on the counterparties thereto nor received
any notices relating to a breach (or alleging breach) of the terms of any
of the BUK Licences from any counterparties thereto.
I.4 As far as the Seller is aware, all renewal and application fees due as at
the date of this Agreement in respect of registered Intellectual Property
(or applications therefor) owned by BUK in relation to the carrying on of
the Business have been paid. The Seller has disclosed details of currently
unresolved notices of opposition and objection relating to the registered
BUK Intellectual Property Rights and applications therefor.
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I.5 As far as the Seller is aware, there is no infringement and the Seller has
not received notifications of infringement since 25 October 2000 of the BUK
Software IPR by any third party.
I.6 As far as the Seller is aware, there is no infringement and the Seller has
not received notifications of infringement since 25 October 2000 of any
third party Intellectual Property by BUK in the course of carrying on the
Business.
I.7 Complete accurate and up to date particulars of all registered BUK
Intellectual Property Rights or pending applications therefor are set out
in Schedule 7.
I.8 So far as the Seller is aware, BUK has not received any applications for
licences of right, compulsory licences or equivalent relief in any
jurisdiction in respect of BUK Intellectual Property Rights.
I.9 So far as the Seller is aware, all material know-how used by BUK in the
Business is adequately documented or otherwise embodied in physical form to
enable the Purchaser to acquire its full benefit and is in the possession
or control of BUK. No member of BUK has made disclosure of any such
material know-how used by it other than under enforceable confidentiality
undertakings.
I.10 With the exception of all Intellectual Property comprised in the
Information Technology, as far as the Seller is aware, the Intellectual
Property Rights, BUK Intellectual Property Rights, the rights granted under
the Licences and the Intellectual Property assigned or licensed under this
Agreement together comprise all the material Intellectual Property that is
necessary for the Purchaser to carry on the Business after Completion in
substantially the same manner as it was carried on immediately before the
date of this Agreement.
I.11 So far as the Seller is aware, BUK has complied in all material respects
with the provisions of all privacy or data protection legislation to which
it is subject insofar as it relates to the operation of the Business
including without limitation the provisions of the Data Protection Xxx
0000.
I.12 Details of all claims on the BUK Intellectual Property Rights brought by
Employees or previous Employees are contained in the Disclosure Letter.
I.13 BUK does not operate under any name other than Baltimore, its corporate
name and the trade marks set out in Schedule 7.
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I.14 The Disclosure Letter sets out details of all anti-virus software used by
BUK and back-up systems in place.
I.15 Since the Balance Sheet Date none of the material fixed assets used for the
purposes of the Business have been lost, severely damaged or destroyed and
so far as the Seller is aware no material assets of BUK have been depleted
by any unlawful act of any person.
I.16 Since the Interim Balance Sheet Date BUK has not acquired or disposed of or
agreed to acquire or dispose of any material assets or assumed or incurred
or agreed to assume or incur any material liabilities (including contingent
liabilities forming part of the Business) otherwise than in the ordinary
course of its business.
I.17 All of the Assets are the property of the Seller free from any hire or
hire-purchase agreement or agreement for payment on deferred terms or xxxx
of sale or lien, Encumbrance, or other adverse claim and have at all
material times been and are in the possession of or under the control of
the Seller. Without prejudice to the generality of the foregoing, none of
the Assets are held on a sale or return basis.
I.18 Each of the tangible Assets is in good condition and working order and
complies with appropriate safety regulations.
I.19 The Stock is in good condition and is capable of being sold by BUK in the
ordinary course of business in accordance with its current price list
without rebate or allowance.
I.20 The Stock does not include any obsolete or slow moving lines, or excessive
or inadequate quantities of any line, having regard to the current level of
business.
I.21 All documents which are in the possession of BUK or under its control to
which BUK is a party or under which BUK derives title to any of the Assets
and which attract stamp duty have been properly stamped, and BUK has duly
paid all stamp duty to which it is, has been or may be made liable and
there is no liability to any penalty in respect of such duty.
J. Compliance and Litigation
J.1 So far as the Seller BUK is and has conducted the Business in all material
respects in accordance with all applicable laws and regulations of the
United Kingdom and any other applicable foreign country and there is no
order, decree or judgment of any Court or any governmental agency of the
United Kingdom or any other foreign country outstanding against BUK which
may have a material adverse effect upon the Assets or Business.
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J.2 Save as plaintiff in proceedings for the collection of debts (not exceeding
(pound)50,000) BUK is not now engaged in any litigation or arbitration or
other legal proceedings nor are any litigation or arbitration or other
legal proceedings pending or threatened by or against BUK of which the
Seller is aware, which may have a significant effect on the financial
position of the Business.
K. Employees
K.1 In respect of all Employees the Employment Statutes have been duly complied
with in all material respects.
K.2 There is attached to the Disclosure Letter a schedule showing the following
information in relation to each Employee namely:
(c) name;
(d) age;
(e) job title;
(f) emoluments (including any bonus or commission arrangements and any
non-cash benefits);
(g) date of commencement of employment or of any previous employment with
which such employment is continuous;
(h) notice period required to be given by BUK and the employees;
(i) whether or not a member of BUK's pension scheme;
and such information is complete and accurate in all material respects.
K.3 No material change to the terms of employment of any Employee and no
negotiation or request for such a change, is due or expected.
K.4 No Employee has given notice terminating his contract of employment or is
under notice of dismissal and no offer(s) have been made to employ any
person who is not an Employee in the Business.
K.5 There is no existing, pending or threatened litigation or dispute between
BUK and any Employee or any trade union or other organisation formed for a
similar purpose or any other employee representative(s) (and there are no
payments which are due and unpaid in relation to any such litigation or
dispute) and there are no circumstances (including Completion) which are
likely to give rise to any such litigation or dispute.
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K.6 Save as disclosed in the schedule referred to in K.2 there is not now
outstanding any contract of employment with any Employee which is not
terminable by BUK without compensation (other than statutory compensation
on three months' notice or less given at any time.
K.7 Within two years preceding the date of this Agreement, there has been no
industrial action or trades disputes involving or relating to any Employee.
K.8 Accurate, up-to date and complete copies of a representative sample of the
contracts of employment of the Employees and any other documents currently
in force relating to the employment of the Employees have been disclosed
together with full particulars of any consultancy or secondment or other
similar agreements and any agreements relating to casual workers in
relation to the Business and copies of any such agreements currently in
force.
K.9 No amount due to or in respect of any Employee is in arrears and unpaid
other than salary for the month current at the date of this Agreement.
K.10 Full and up-to-date particulars of all existing and proposed works
councils, collective agreements or other arrangements or understandings
(whether binding or not) with any trade union, staff association or other
body representing any Employee and all documents relating to such agreement
and understandings are appended to the Disclosure Letter.
K.11 There are no arrangements planned or in progress for dismissing any
Employee by reason of redundancy or business reorganisation.
K.12 There are no terms and conditions in any contract of employment with any
Employee or any other binding agreement with any Employee pursuant to which
the Employee will be entitled to receive any payment or benefit or his
terms and conditions of employment change as a direct consequence of the
transaction contemplated by this Agreement save as detailed in this
Agreement.
L. Pensions
L.1 In this paragraph:
"the UK Scheme" shall mean the Baltimore Technologies (UK) Limited Group
Personal Pension Plan; and
"the Overseas Scheme" shall mean the Australian superannuation fund and the
US 401(k) Plan.
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L.2 Save for the UK scheme, the Overseas Schemes, applicable State schemes and
fully insured life assurance cover, neither BUK nor any Group member has
any present or contingent liability to contribute to any retirement
benefit, pension or life assurance scheme or arrangement, pension fund or
personal pension scheme or stakeholder arrangement whether in the United
Kingdom or overseas relating to any of the Group's employees, nor has any
proposal to do so been announced.
L.3 In respect of the UK Scheme and the Overseas Schemes, liability of the
Group and BUK to contribute is on a money purchase/defined contribution
basis only and there are no final salary/defined benefits or final
salary/defined benefit underpins provided in respect of any such person.
L.4 Material particulars of the UK Scheme have been disclosed to the Purchaser
and all information which has been made available by the Seller or its
advisers to the Purchaser in connection with the Pension Schemes on or
before the date of this Agreement is true, complete and fairly presented in
all material respects.
L.5 So far as the Seller and BUK are aware, there are no pending or current
claims or disputes concerning benefits to be provided under the UK Scheme
or the Overseas Schemes or in respect of the non-provision of relevant
benefits (as defined in s612 Income and Corporation Taxes Act 1988) or of
such benefits outside the United Kingdom.
M. Finance
M.1 Full and accurate details of all overdrafts, loans, or other financial
facilities outstanding or available to the Business are disclosed in the
Disclosure Letter (including details of whether any are dependent on any
guarantee or security provided by any third party) and true and complete
copies of all documents relating thereto and annexed to the Disclosure
Letter. No steps have been taken or threatened to enforce any facility.
M.2 No event has occurred or been alleged which is or, with the giving of any
notice, certificate, declaration or demand, would become an event of
default under, or a breach of any of the terms of any loan capital,
borrowing, debenture or financial facility of BUK relating to the Business.
N. Insolvency
N.1 No order has been made and no resolution has been passed for the winding up
of BUK or for a provision liquidator to be appointed in respect of BUK and
no petition has been presented and no meeting has been convened for the
purpose of winding up BUK.
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N.2 No administration order has been made and no petition for such an order has
been presented in respect of BUK.
N.3 No receiver (which expression shall include an administrative receiver) has
been appointed in respect of BUK or in respect of all or any material part
of the Assets.
N.4 No voluntary arrangement has been proposed under section 1 Insolvency Xxx
0000 in respect of BUK.
N.5 BUK is not insolvent or unable to pay its debts within the meaning of
section 123 of the Insolvency Xxx 0000.
N.6 No distress, execution or other process has been levied or threatened in
respect of the whole or any part of the undertaking or assets of BUK.
N.7 No composition in satisfaction of the debts of BUK or scheme of arrangement
of its affairs or compromise or arrangement between it and its creditors
and/or members or any class of its creditors and/or members had been
proposed, sanctioned or approved.
N.8 So far as the Seller is aware, no event analogous to any of the
circumstances mentioned in any of the foregoing sub-paragraphs of this
paragraph N has occurred in relation to BUK outside England.
N.9 No guarantee, loan capital, borrowed money or interest is overdue for
payment and no other obligation or indebtedness is outstanding which is
substantially overdue for performance or payment.
N.10 No circumstances have arisen which are likely to result in:
(a) a transaction to which BUK is a party being set aside; or
(b) a third party claim involving any Asset being made under section 238
or 339 (Transactions at an undervalue) or sections 239 or 340
(Preferences) Insolvency Xxx 0000.
O. Tax Matters
O.1 BUK has complied with all statutory requirements, regulations, orders,
provisions directions or conditions relating to National Insurance and PAYE
and has maintained full, complete and up-to-date records and other
documents appropriate and requisite for the purposes thereof, in such form
and for such periods as are required by the relevant legislation and
regulations
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and none of its pay practices in relation to any of the Employees have been
or so far as BUK is aware are likely to be the subject of any dispute with
the Inland Revenue.
O.2 All documents which are in the possession of BUK or under its control to
which BUK is a party or under which BUK derives title to any of the Assets
and which attract stamp duty have been properly stamped, and BUK has duly
paid all stamp duty to which it is, has been or may be made liable and
there is no liability to any penalty in respect of such duty.
O.3 In respect of the Business, BUK has complied with the provisions of the
VATA and with all statutory requirements, regulations, orders, provisions,
directions or conditions relating to value added tax, including the terms
of any agreement reached with the Commissioners of Customs & Excise in
respect of the Business and has maintained full, complete, correct and
up-to-date records, invoices and other documents (as the case may be)
appropriate or requisite for the purposes thereof and has preserved such
records, invoices and other documents in such form and for such periods as
are required by the relevant legislation.
O.4 The Disclosure Letter contains details in respect of the BUK Properties, of
all fixtures, within the meaning of section 000 Xxxxxxx Xxxxxxxxxx Xxx
0000, which are treated pursuant to that act as belonging to BUK.
O.5 BUK is not included in any dispute with the Inland Revenue, Custom and
Excise or other appropriate fiscal authority concerning any matter in any
way affecting either the Business or any of the Assets to be transferred
under this Agreement.
O.6 Neither BUK (nor any relevant associate as defined in Schedule 10 of the
Value Added Tax Act 1994) has elected to waive exemption (or applied for
written permission to elect) in accordance with that schedule in relation
to the BUK Property (or any of the Assets which constitute an interest in
or right over land).
O.7 The Inland Revenue has not agreed to operate any special arrangement (being
an arrangement which is not based on a strict application of the relevant
legislation) in relation to the Business, whether in respect of benefits
provided to its officers or employees, the valuation of its stock, the
depreciation of its assets.
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Schedule 5
Tax Covenant
This Deed is made the day of 2002
---- ------------------
Between:
(1) Baltimore Technologies plc, a company registered in England and Wales
(registered number 2643615), whose registered office is at 1310 Xxxxxxxxx,
Xxxxxxxxx Xxxxxxxx Xxxx, Xxxxxx, Xxxxxxx, XX0 0XX (the "Covenantor");
(2) Clearswift Limited, a company registered in England and Wales (registered
number 1607372), whose registered office is at Bessemar House, Bessemar
Road, Welwyn Garden City, Hertfordshire AL7 1HH (the "Purchaser"); and
(3) Baltimore Technologies UK Limited, a company registered in England and
Wales (registered number 1467493), whose registered office is at 1310
Xxxxxxxxx, Xxxxxxxxx Xxxxxxxx Xxxx, Xxxxxx, Xxxxxxx, XX0 0XX (the
"Guarantor")
This Deed Witnesses:
1. Definitions
1.1 Unless the context otherwise requires, words and expressions used in this
Deed shall have the meanings respectively attributed to them in the Master
Agreement save that the following words and expressions shall have the
meanings respectively set opposite them:
"Accounts Relief" means any Relief taken into account in computing and so
reducing or eliminating any provision for Tax (including deferred Tax)
which appears in the balance sheet in the Completion Accounts or which was
taken into account in the Completion Accounts as an asset net of any
valuation allowance;
"ACT" means advance corporation tax within the meaning of section 14 of the
ICTA 1988;
"Balance Sheet Date" means 31 December 2000;
"CAA" means the Capital Allowances Act 2001 and references to provisions
therein include references to the corresponding provisions in the Capital
Xxxxxxxxxx Xxx 0000;
"Demand" means any document issued or any claim made or action taken
whether before or after the date hereof by or on behalf of any person,
authority or body whatsoever (whether of the United Kingdom or elsewhere in
the world) from which it appears that the Company has or may have a Tax
Liability;
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"Event" means any transaction, sale, act, event or omission of whatever
nature, including the exercise of any share option and any supply or deemed
supply under any arrangement between any Company and any person connected
with it;
"FA" means Finance Act;
"Group Relief" means:
(d) relief the subject of a surrender or claim pursuant to Chapter IV of
Part X of the ICTA 1988;
(e) advance corporation tax the subject of a surrender or claim pursuant
to section 240 of the ICTA 1988; and
(f) any tax refund the subject of a surrender or claim pursuant to section
102 of the FA 1989;
"Instalment Regulations" means the Corporation Tax (Instalment Payments)
Regulations 1998;
"Master Agreement" means the Master Sale and Purchase Agreement related,
inter alia, to the sale of the Company to be entered into by the
Covenantor, Baltimore Technologies UK Limited and the Purchaser on even
date herewith;
"Post-Completion Relief" means any Relief which arises to the Purchaser or
to the Company as a consequence of any Event occurring or from income,
profits or gains arising after Completion;
"Regulations" means the Value Added Tax Regulations 1995;
"Relief" means any relief, allowance or deduction in computing profits,
credit or right to repayment of Tax (including repayment supplement or
interest thereon) granted by or pursuant to any legislation or otherwise
for Tax purposes whether of the United Kingdom or elsewhere in the world;
"Tax and Taxation" means any and all forms of taxes, levies, imposts,
contributions, duties and charges in the nature of taxation and all
withholdings or deductions in respect thereof of whatever nature imposed
whether of the United Kingdom or elsewhere (including for the avoidance of
doubt, National Insurance contribution liabilities in the United Kingdom
and corresponding obligations elsewhere) and whether directly or primarily
chargeable against, recoverable from or attributable to the Company or any
other person including all fines, penalties, charges and interest relating
to the same;
"VAT" means value added tax;
"VATA" means the Value Added Tax Xxx 0000.
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1.2 References to income or profits or gains shall include any other measure by
reference to which Tax is computed.
1.3 References to income or profits or gains earned, accrued, arising or
received by any person shall include income or profits or gains which are
for the purposes of any Tax treated as earned, accrued, arising to or
received by such person.
1.4 References to income or profits or gains earned, accrued, arising or
received on or before a particular date (including, without limitation,
Completion) or in respect of a particular period shall include income or
profits or gains which are for the purposes of any Tax treated as earned or
accrued, arising or received on or before that date or in respect of that
period.
1.5 References to the occurrence of Events on or before a particular date
(including, without limitation, Completion) or in respect of a particular
period shall include Events which are for the purposes of any Tax treated
as having occurred or existed at or before that date or in respect of that
period.
1.6 References to any Tax Liability of the Company shall include:
(a) liabilities of the Company to make payments of or in respect of Tax;
(b) the denial, loss, use or set off in whole or in part of any Accounts
Relief which would, but for such denial, loss, use or set off, have
been available to the Company after Completion;
(c) the use or setting off in whole or in part against income, profits or
gains earned, accrued, arising or received on or before Completion, or
Tax thereon, of any Post-Completion Relief where but for such use or
setting off the Company would have had an actual Tax Liability in
respect of which the Purchaser would have been able to make a claim
against the Covenantor under this Tax Covenant;
1.7 References to the "Claimant" are references to whichever of the Purchaser
or its successors in title or assigns is making a claim or receiving a
payment pursuant to this Deed.
1.8 References to the "Company" shall mean and include references to the
Company and each of the Subsidiary Undertakings separately as if each
Subsidiary Undertaking was referred to expressly in place of Company and
references to a "Company" or to any "Company" shall mean and include a
company or, as the case may be, any company which is within this definition
of the "Company";
2. Covenant
2.1 The Covenantor covenants, with effect from Completion, to pay by way of
reduction, to the extent possible, of the purchase price payable in respect
of the Shares, to the Purchaser an amount equal to:
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(a) any Tax Liability of the Company arising in respect of or as a
consequence of any Event or Events occurring on or before Completion
or in respect of or by reference to any income, profits or gains
earned, accrued, arising or received on or before Completion;
(b) any liability of the Company to pay or repay any other person (other
than any taxation authority or any of the Group members) any amount
under any agreement or other arrangement entered into on or before
Completion relating to:
(i) the surrender of group relief (within the meaning of Chapter IV
Part X ICTA 1988) or advance corporation tax;
(ii) the surrender of any tax refund (within the meaning of section
102 Finance Act 1989) relating to any Accounting Period; or
(iii)corporation tax and/or value added tax;
(c) any Tax Liability of the Company which is the liability to Taxation of
any other person and for which the Company is liable by reason of
having been, at any time on or before Completion, related to:
(i) that other person for the purposes of any Taxation;
(ii) any person which is or has been at any time related to that other
person for the purposes of any Taxation; or
(iii)any other person which is or has been at any time related to a
person falling with (ii) above for the purposes of any Taxation;
(d) any liability of the Company:
(i) to pay stamp duty on the transfer of assets into Content
Technologies (Asia/Pacific) Pty Limited under the BTA Agreement;
and
(ii) arising from a disposal of shares in Content Technologies KK held
by Content Technologies Limited to a member of the Seller's
Group;
provided that clause 10.7 of the Master Agreement shall not apply to
any amount payable under this clause 2.1(d); and
(e) all costs and expenses reasonably and properly incurred by the
Purchaser and/or the Company in connection with any such Tax Liability
of the Company, or Demand from which it appears that any such Tax
Liability may arise or has arisen, or in successfully taking or
defending any action under this covenant.
2.2 For the purposes of this covenant the amount of a Tax Liability of the
Company falling within clause 1.6(b) or 1.6(c) of this Deed shall be taken
to be as follows:
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(a) in the case of a Tax Liability within clause 1.6(b):
(i) where such Accounts Relief is a right to repayment of Tax, the
amount of the Relief so denied, lost, used or set off;
(ii) where such Accounts Relief is a deduction from or set off against
income, profits or gains, or Tax thereon, the Tax that would
otherwise have been saved for the accounting period in which the
Accounts Relief arose but for such denial, loss, use or set off;
or
(iii)if in such accounting period no Tax would otherwise have been
saved because of an insufficiency of income, profits or gains, or
Tax thereon, against which such Accounts Relief could have been
offset, the Tax that would otherwise have been saved for the
accounting period or periods in which income, profits or gains,
or Tax thereon, arises or arose, against which such Accounts
Relief could have been offset but for such denial, loss, use or
set off,
and in either case 2.2(a)(ii) or 2.2(a)(iii), on the assumption that
the Accounts Relief in question would have been offset in priority to
any other Relief available in such period or periods; and
(b) in the case of a Tax Liability within clause 1.6(c), the amount of Tax
for which the Company would, but for such use or setting-off, have
been liable and in respect of which a claim could have been made
against the Covenantor under this covenant.
3. Limitations and exclusions
3.1 The Covenantor shall not be liable under the covenants contained in clause
2.1 in respect of any Tax Liability of the Company (or in respect of any
costs and expenses arising therefrom under clause 2.1(e)):
(a) unless the Tax Liability in question shall have arisen on or before
the seventh anniversary of Completion and the Purchaser shall by
notice in writing to the Covenantor have given such details of the
claim as the Purchaser then has;
(b) to the extent that provision or reserve was made in the balance sheet
in the Completion Accounts in respect of such Tax Liability, or to the
extent that payment or discharge of such Tax Liability was taken into
account therein;
(c) to the extent that such Tax Liability arises or is increased by reason
of the imposition of or increase in the rates of Tax as a consequence
of any change occurring after Completion in law, or in published
practice or withdrawal of any concession of general application, and
having retrospective effect, which was not announced before
Completion;
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(d) to the extent that it would not have arisen but for a voluntary action
or omission of the Purchaser (or person deriving title from it) or the
Company after Completion (which, for the avoidance of doubt, shall not
include the presentation for stamp duty purposes of any document where
such presentation is required in order that the document is given in
evidence or required by any Tax authority and a copy is not sufficient
or the disclosure (with the consent of the Covenantor, such consent
not to be unreasonably withheld or delayed) to any Tax authority, of
any matter which the Purchaser or the Company is advised should
reasonably be disclosed) which the Purchaser knew (or ought reasonably
to have known) would give rise to the Tax Liability and where such act
or omission was done otherwise than as required by law or pursuant to
a legally binding commitment of that person created on or before
Completion or otherwise than in the ordinary course of business of
that person;
(e) to the extent that it would not have arisen or would have been reduced
but for a failure or omission on the part of the Purchaser or the
Company after Completion to make any election or claim any Relief, the
making or claiming of which was taken into account in computing the
provision or reserve for Tax in the Completion Accounts;
(f) to the extent that it arises as a result of any changes after
Completion in the bases, methods or policies of accounting of the
Purchaser or the Company save to comply with generally accepted
accounting principles in the United Kingdom or elsewhere or law as
current at Completion;
(g) to the extent that it arises or is increased as a consequence of any
failure by the Purchaser or the Company to comply with any of their
respective obligations under clause 5 (Manner of and Conduct of
Claims);
(h) to the extent that any income, profits or gains to which it is
attributable were actually earned or received by or actually accrued
to the Company but were not (in either such case) reflected in the
Completion Accounts and only to the extent that the Tax Liability does
not exceed such income, profits or gains;
(i) to the extent that it arises as a result of any Relief being denied
following any change in the nature or conduct of trade by the Company
made after Completion where such change is not made or commenced on or
before Completion.
3.2 Any liability of the Covenantor for any Tax Liability falling within clause
2.1(c) shall only be limited or excluded by clause 3.1(b).
3.3 The Covenantor shall not be liable in respect of any claim under this
covenant if and to the extent that recovery has been made and an amount
retained in respect of the subject matter thereof under the Warranties.
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4. Mitigation
The Purchaser shall, at the discretion in writing of the Covenantor,
procure that the Company takes all such steps as the Covenantor may require
to:
(a) use in the manner hereinafter mentioned all such Reliefs arising as a
consequence of or by reference to:
(i) any Event occurring (or deemed to occur) on or before Completion
and not as a consequence of or by reference to an Event occurring
(or deemed to occur) after Completion;
(ii) or in respect of a period ended on or before Completion, and not
as a consequence of or by reference to a period commencing after
Completion,
as are available to the Company to reduce or eliminate any Tax
Liability in respect of which the Purchaser would have been able to
make a claim against the Covenantor under this covenant (such Reliefs
including, without limitation, Reliefs made available to a company by
means of a surrender from another company), the said use being to
effect the reduction or elimination of any such Tax Liability to the
extent specified by the Covenantor and permitted by law, and to
provide to the Covenantor, at the Covenantor's expense, a certificate
from the auditors (for the time being) of the Company confirming that
all such Reliefs have been so used; and
(b) make all such claims and elections specified by the Covenantor in
respect of any accounting period of the Company commencing before
Completion as have the effect of reducing or eliminating any such Tax
Liability as is mentioned in sub-clause (a), provided that no such
claim or election shall require the Company to use any Post-Completion
Relief or give rise to a Tax Liability.
5. Manner of making and conduct of claims
5.1 If the Purchaser or the Company shall become aware of any Demand which
appears to the Purchaser to be relevant for the purposes of this covenant
or the Tax Warranties the Purchaser shall (by way of covenant but not as a
condition precedent to the liability of the Covenantor hereunder) give
notice thereof to the Covenantor as soon as reasonably practicable setting
out reasonable details of the Demand.
5.2 If the Covenantor shall indemnify and reasonably secure the Purchaser and
the Company to the Purchaser's reasonable satisfaction against all
reasonable costs and expenses including interest on overdue Tax and any
further liability to Tax which may be incurred thereby, then the Purchaser
shall procure that the Company will (except in a case where fraudulent or
wilful conduct is alleged by any Tax authority and subject to clause 5.3)
take such action as the Covenantor may request to avoid, dispute, resist,
appeal or compromise any Demand
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(including allowing the Covenantor to take over the conduct of all matters
relating to any such Demand), Provided that:
(a) the appointment of solicitors and other professional advisers to the
Company shall be subject to the prior approval of the Purchaser, such
approval not to be unreasonably withheld or delayed;
(b) the Covenantor shall ensure that no correspondence, pleading or other
document is sent, transmitted, issued, entered into or in any way
published in connection with the relevant Demand by the Covenantor or
their advisers without copies thereof being provided to the Purchaser;
save as otherwise expressly provided herein, the Purchaser shall
procure that the Company shall give the Covenantor all reasonable
co-operation information and assistance for the purposes of taking
such action as aforesaid;
(c) any request made by the Covenantor pursuant to this clause 5.2 shall
be made within a reasonable time of receipt by the Covenantor of any
notice given to the Covenantor in accordance with clause 5.1 (and, in
any event, in the case of a Demand which requires an appeal to be made
or other action to be taken within a specified period of time, a
request is made by the Covenantor to the Purchaser not later than five
Business Days prior to the expiry of such specified period);
(d) the Purchaser and the Company shall not be obliged to comply with any
request of the Covenantor which involves contesting any assessment of
Taxation before any court or any other appellate body (including any
tribunal or court) unless they have been advised in writing, at the
expense of the Covenantor, by leading tax counsel instructed by
agreement between the Purchaser and the Covenantor, that an appeal
against such assessment will, on the balance of probabilities, be won
by the Purchaser or, as the case may be, the Company;
(e) neither the Purchaser nor the Company shall be obliged to take any
action which is likely to increase its liability to Taxation for
accounting periods ending after Completion; and
(f) the rights of the Covenantor under this clause 5.2 shall cease if it
has been subject to an Insolvency Event.
5.3 If the Covenantor does not request the Purchaser to take any action within
21 Business Days of the date of any notice given to them under clause 6.1
of any such Demand or in accordance with 6.2(c), the Purchaser and the
Company shall be free to take such action in relation to the Demand as it
or they may in its or their absolute discretion think fit.
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6. Payment of claims
6.1 Payments by the Covenantor pursuant to the covenants in clause 2 shall be
made in cleared, immediately available funds on the days specified in
clause 6.2 below.
6.2 The days referred to in clause 6.1 are as follows:
(a) if the Tax Liability giving rise to a claim under this covenant
involves an actual payment of Tax by the Company, the day which is the
later of five Business Days after demand is made therefor by or on
behalf of the Claimant, and three Business Days before the date on
which that Tax becomes due and payable to the relevant Tax authority;
(b) if the Tax Liability giving rise to a claim under this covenant does
not involve an actual payment of Tax:
(i) if involving the denial, loss, use or setting off in whole or in
part of an Accounts Relief which is a right to repayment of Tax,
the day which is five Business Days after demand is made therefor
by or on behalf of the Claimant;
(ii) if involving the denial, loss, use or setting off of any other
Accounts Relief within clause 2.2(a), the day which is the later
of five Business Days after demand is made therefor by or on
behalf of the Claimant, and two Business Days before the day on
which the Tax that would otherwise have been saved becomes due
and payable to the relevant Tax authority without incurring a
penalty, fine or interest;
(iii) if involving the use or setting-off of any Post-Completion
Relief within clause 2.2(b) the day which is the later of five
Business Days after demand is made therefor by or on behalf of
the Claimant, and two Business Days before the day on which the
Tax saved thereby would otherwise have become due and payable to
the relevant Tax authority without incurring a penalty, fine or
interest;
(c) in any other case, three Business Days after the date on which demand
is made therefor by or on behalf of the Claimant.
6.3 For the purposes of this clause 6, the date on which an amount of
corporation tax (the "Corporation Tax") does or would become due and
payable by a UK tax-resident company, being any UK tax-resident Company or
the Purchaser (the "Relevant Company"), shall be determined to be:
(a) in any accounting period of the Relevant Company ending on or after 1
July 1999 in which the Relevant Company is a "large company" within
the meaning of the Instalment Regulations, the date or dates upon
which the Corporation Tax would be
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provided to be due and payable by Regulations 4 and 5 of the
Instalment Regulations on the assumption that the Corporation Tax
payable by the Relevant Company is the "total liability" of the
Relevant Company for that period within the meaning of the said
Regulations 4 and 5 and references in the Instalment Regulations to an
accounting period of a large company shall be construed as references
to the accounting period of the Relevant Company; or
(b) in any other accounting period of the Relevant Company, the date which
is nine months following the end of the accounting period.
6.4 For the purposes of this clause 6, references to the day on which an amount
of Tax which is not UK Corporation tax becomes due and payable to the
relevant Tax authority shall be the first day on which such Tax is required
by law to be paid without incurring any penalty or liability for interest
in respect thereof.
6.5 Sums not paid on the dates specified in this clause 6 shall bear interest
in accordance with clause 22 of the Master Agreement provided that if
clause 6.3(a) of this Deed applies, Regulation 7 of the Instalment
Regulations shall apply to determine the amount of interest which is
payable in relation to the Tax Liability as that Regulation applies to
determine the amount of interest which is payable on unpaid corporation tax
except where such sum is more than 30 days overdue, in which case the
higher of the rate of interest under the Master Agreement and the rate of
interest in Regulation 7 of the Instalment Regulations shall prevail for
the whole of the period during which such sum is overdue.
7. Tax Returns and computations
7.1 The Covenantor or their duly authorised agents shall be responsible for,
and have the conduct of preparing, submitting to and agreeing with the
relevant Tax authorities all corporation tax, VAT, PAYE or other Tax
returns and computations of the Company, including (without limitation)
claims and/or surrenders by way of Group Relief where the due date for
filing such returns falls before Completion and in connection therewith:
(a) all returns, computations, documents and correspondence relating
thereto shall be submitted in draft form by the Covenantor to the
Purchaser or its duly authorised agents for comment;
(b) the Purchaser or its duly authorised agent shall comment within 21
days of such submission but if the Covenantor has not received any
comments within 21 days, the Purchaser and its duly authorised agents
shall be deemed to have approved such draft documents;
(c) the Covenantor shall take into account all reasonable comments and
suggestions made by the Purchaser or its duly authorised agents;
-101-
(d) the Covenantor and the Purchaser shall co-operate in good faith and
shall each respectively afford (or procure the affordance) to the
other or their duly authorised agents of information and assistance
which may reasonably be required to prepare, submit and agree all such
outstanding Tax returns and computations;
(e) the Covenantor and the Purchaser shall as soon as practicable deliver
to each other copies of all correspondence sent to or received from
any Tax authority;
(f) the Purchaser undertakes to procure that the Company shall at the
request of the Covenantor, sign and submit to the relevant Tax
authority all such notices of claim, surrender or consent to surrender
(including provisional or protective notices of claim, surrender or
consent to surrender in cases where any relevant Tax computations have
not yet been agreed) and all such other documents and returns as the
Covenantor shall reasonably request to give effect to the foregoing
provisions provided that:
(i) the Covenantor has complied with its obligations specified in
this clause 8; and
(ii) the Purchaser shall not be obliged to procure that the Company
sign and submit any document which in its reasonable opinion it
considers not to be true and accurate in any material respects or
which would give rise either to any liability to Taxation or the
loss of any Relief whether by surrender or otherwise.
7.2 The provisions of clause 7.1 (other than clause 7.1(f)) shall apply in
respect of all Tax returns and computations of the Company the due date for
filing of which falls on or after Completion as if the word "Covenantor"
reads "Purchaser" and the word "Purchaser" reads "Covenantor".
7.3 The Covenantor and the Purchaser agree to co-operate promptly after
Completion so that any outstanding issue in relation to US sales tax is
resolved, so as to reduce the Company's liability to any such Tax Liability
in relation to any Event occurring on or before Completion.
8. No withholdings, ETC
8.1 All sums payable by the Covenantor to the Purchaser hereunder shall be
without deduction or withholding on any ground whatsoever, save only as may
be required by law. If any such deduction or withholding is required by law
the Covenantor shall be obliged to pay to the Purchaser such amount as will
ensure that, after any such deduction or withholding has been made, the
Purchaser shall have received a sum equal to the amount that the Purchaser
would otherwise have received in the absence of any such deduction or
withholding, as reduced by any credit to which the Purchaser may be
entitled on account of such deduction or withholding.
8.2 If any competent authority for Tax purposes charges to Tax any sum paid
(the "original payment") to the Purchaser hereunder the Covenantor shall be
obliged to pay to the Purchaser such additional amount (the "additional
payment") as will ensure that, after the
-102-
payment of the Tax so charged on the original payment and any Tax
chargeable on the additional payment, there shall remain a net sum equal to
the amount of the original payment, such additional payment to be paid the
later of three Business Days after the Purchaser has served written notice
on the Covenantor and three Business Days prior to the date that Tax on the
original payment will become due and payable, or would have become due and
payable but for the availability of a Relief.
9. Corresponding savings and refunds
9.1 If the auditors for the time being of the Company certify (at the request
and at the expense of the Covenantor) that any Tax Liability which has
resulted in a payment having been made by the Covenantor under this
covenant or for breach of any of the Tax Warranties has given rise to a
Relief (other than an Accounts Relief) for the Company or the Purchaser
which would not otherwise have arisen, then:
(a) the Purchaser shall procure that full details of such Relief are given
to the Covenantor as soon as reasonably practicable; and
(b) the amount of that Relief shall first be set off against any payment
then due from the Covenantor under this covenant; and
(c) to the extent there is an excess, a refund shall be made to the
Covenantor of any previous payment or payments made by the Covenantor
under this covenant and not previously refunded under this clause up
to the amount of such excess; and
(d) to the extent that the excess referred to in sub-clause (c) of this
clause is not exhausted under that sub-clause, the remainder of that
excess shall be carried forward and set off against any future payment
or payments which become due from the Covenantor under this deed,
provided that if the Relief in question is a deduction from or offset
against income, profits or gains, the amount of the Relief shall be a sum
equal to the amount of Tax that has been saved through the use of that
Relief on the basis of the rates of tax current at the date of the
certification made by the auditors under this clause.
9.2 If the Covenantor at any time pay to the Purchaser an amount pursuant to a
claim under this covenant or under the Tax Warranties and the Purchaser or
the Company is or becomes entitled to recover from some other person (other
than the Company or the Purchaser, but including any Tax authority) any sum
in respect of the matter giving rise to such claim (other than by reason of
any Accounts Relief or Post-Completion Relief), the Purchaser, if so
required by the Covenantor, will (and will procure that the Company will),
at the cost of the Covenantor takes all reasonable steps to enforce such
recovery (provided that the Company and the Purchaser shall not be obliged
to take any action which they reasonably consider to be
-103-
prejudicial to their material interests), and the Purchaser shall promptly
following such recovery repay to the Covenantor the lesser of:
(a) the sum so recovered by the Purchaser or the Company from such other
person (including sums recovered in respect of costs and any interest
or repayment supplement received in respect of the sum recovered, but
less any costs of recovery not previously reimbursed and less any Tax
chargeable on the sum recovered); and
(b) the amount referred to above paid by the Covenantor to the Purchaser.
10. Purchaser's warranty and indemnity
10.1 The Purchaser warrants and represents to the Covenantor and their
successors in title that the Purchaser does not intend to permit the
corporation tax liabilities of the Company and its subsidiaries, to the
extent provided for in the Completion Accounts and to the extent payable by
the Company and/or its subsidiaries to remain undischarged, and that it is
not entering into this transaction on the assumption referred to in section
767AA(2) of the ICTA 1988.
10.2 The Purchaser hereby covenants with the Covenantor that it will indemnify
each Relevant Person and keep them indemnified against any liability
arising pursuant to:
(a) section 767A of the ICTA 1988, in circumstances where the taxpayer
company (as defined in section 767(1)) is the Company; or
(b) section 767AA of the ICTA 1988, in circumstances where the relevant
transferred company or associated company as defined in section 767AA
is the Company; or
(c) section 132 of the FA 1988, in circumstances where the Company ceases
to be resident in the United Kingdom after Completion, except where
the Company was incorporated outside the United Kingdom; or
(d) section 190 of the TCGA 1992, in circumstances where the unpaid tax
referred to in section 190(1) is first assessed on the Company,
to the extent that the corporation tax to which the liability relates:
(i) has been the subject of a claim by the Purchaser hereunder which
has been satisfied; or
(ii) is one in respect of which the Covenantor has (disregarding any
limit on the amount of such liability) no liability hereunder.
10.3 For the purposes of this clause 10, a "Relevant Person" is:
(a) any person who at any time in the three year period prior to
Completion had control of the Company; or
-104-
(b) any company of which the person mentioned in clause (a) above has at
any time in the three year period prior to Completion had control.
10.4 The Purchaser hereby covenants with the Covenantor to pay to the Covenantor
the Repayment within five Business Days of receipt of the same.
11. Over Provisions
11.1 If the Covenantor shall become liable in respect of any claim arising under
this Deed, credit shall be given to the Covenantor against such liability
for the amounts referred to in clause 11.2 below which shall be dealt with
in accordance with clause 11.4 below.
11.2 The amounts referred to in clause 11.1 above are:
(a) the amount by which any provision for Tax contained in the Completion
Accounts proves to be an over provision;
(b) the amount by which the right to any repayment of Tax to the Company
by the Inland Revenue or any other Tax authority reflected in the
Completion Accounts proves to be understated (or if no amount is
stated, the amount of any repayment of Tax to the Company relating to
the period prior to the Balance Sheet Date) but, for the avoidance of
doubt, this Clause 11 shall not apply to the Repayment.
11.3 If the Purchaser becomes aware that there are or may be such amounts as are
referred to in clause 11.2 above, it shall (or shall procure that the
Company shall) promptly inform the Covenantor of that fact. If the auditors
for the time being of the Company are requested by either of the parties
hereto to certify any of such amounts as are referred to above the relevant
party shall procure that the auditors are instructed to give and shall (at
the expense of the party requesting) give as soon as practicable such
certificate and in so doing they shall act as experts and not as
arbitrators and (in the absence of manifest error) their decision shall be
final and binding on the parties hereto.
11.4 Where it is provided under clause 11.1 above that any amount (the "Relevant
Amount") is to be dealt with in accordance with this clause 11:
(a) the Relevant Amount shall first be set off against any payment then
due from the Covenantor under this covenant, and reduce or eliminate
the liability against which it is so set-off; and
(b) to the extent there is an excess of the Relevant Amount after any
amounts have been set off under clause 11.4(a) above a refund shall be
made to the Covenantor of any previous payment or payments by the
Covenantor under this covenant and not previously refunded under this
clause 11.4(b) up to the amount of such excess; and
-105-
(c) to the extent that the excess referred to in clause 11.4(b) is not
exhausted under that clause, the remainder of that excess shall be
carried forward and set off against any future payment or payments
which become due from the Covenantor under this covenant and reduce or
eliminate the liability against which it is so set-off.
11.5 Where any such certification as is mentioned in clause 11.3 above has been
made, the Covenantor or the Purchaser may (at their own expense) request
the auditors to review such certification in the light of all relevant
circumstances, including any facts which have become known only since such
certification, and to certify whether such certification remains correct or
whether, in the light of those circumstances, the amount that was the
subject of such certification should be amended.
11.6 If the auditors certify under clause 11.5 that an amount previously
certified should be amended, that amended amount shall be substituted for
the purposes of clause 11.4 as the Relevant Amount in respect of the
certification in question in place of the amount originally certified, and
such adjusting payment (if any) as may be required by virtue of the above
mentioned substitution shall be made as soon as practicable by the
Covenantor or the Purchaser, as the case may be.
12. Surrender of Reliefs
12.1 The Purchaser shall procure that, to the extent that it can lawfully do so,
the Company:
(a) accepts from the Covenantor, or any other company not included in the
definition of the Company hereunder and specified by the Covenantor,
the surrender of any Group Relief as the Covenantor may direct in
respect of an accounting period of the Company commencing before
Completion; and
(b) surrenders any Group Relief to any company not included in the
definition of the Company hereunder, specified by the Covenantor, in
respect of any accounting period of the Company commencing before
Completion.
12.2 Subject to clause 12.3, for a surrender under clause 12.1(a), the Purchaser
shall procure that the Company pays to the Covenantors, or as the
Covenantor directs, an amount equal to the Tax saved by the Company in
consequence of such surrender.
12.3 The total payments made by the Company under clause 12.2, when added to any
corporation tax actually payable by the Company, shall not exceed the
amount of corporation tax taken into account in calculating the provision
for Tax in the Completion Accounts in respect of the Company.
12.4 Payment under clause 12.2 shall be made on the later of the date that the
Tax saved as a result of the surrender is, or but for the surrender would
have been, due and payable, and five Business Days after demand is made
therefor by or on behalf of the Covenantor.
-106-
12.5 No payment shall be made for a surrender under clause 12.1(b).
13. VAT
13.1 The deeming provisions of section 43(1) of the VATA shall be disregarded in
determining for the purposes of this clause 13 what supplies or
importations have been made or are deemed to have been made by or to any
person.
13.2 The Covenantor covenants with the Purchaser that it will notify H M Customs
& Excise that the Company will cease to be under its control with effect
from Completion and that it shall use all reasonable endeavours to secure
that the date on which the Company ceases to be treated as a member of the
Covenantor's VAT Group falls on or before Completion.
13.3 The Covenantor undertakes with the Purchaser and the Purchaser undertakes
with the Covenantor that it will on request promptly supply or procure that
there is supplied to the other all information, particulars and access to
the copies of records relevant to any liability of the parties under this
clause 13.
13.4 The Covenantor (for itself and for each member of the Group) shall not, and
the Purchaser undertakes to procure that the Company shall not, after
Completion, in respect of VAT accounting periods beginning prior to but not
ended before Completion, admit liability to or pay or settle any claim for
VAT or agree any allowance or disallowance of credit for or refund of VAT
which could be relevant to any liability of the parties under this clause
(together referred to as a "Relevant Claim") unless it shall have obtained
the consent of the other to do so, such consent not to be unreasonably
withheld or delayed, and if the Covenantor or the Purchaser shall become
aware of any Relevant Claim or of circumstances likely to give rise to a
Relevant Claim, that party shall promptly give written notice thereof to
the other and the Covenantor shall take such action as the Purchaser may
reasonably request to avoid dispute resist appeal compromise or defend the
Relevant Claim, and the Purchaser shall indemnify the Covenantor from time
to time against all costs and expenses reasonably and properly incurred in
complying with any such request.
14. Guarantee of the Covenantor's Liabilities
14.1 In consideration of the Purchaser entering into this Deed with the
Covenantor, the Guarantor hereby irrevocably and unconditionally agrees, as
primary obligor, to pay to the Purchaser a sum equal to any sums now or
subsequently due and payable hereunder by the Covenantor to the Purchaser.
14.2 This guarantee may be enforced by the Purchaser without the Purchaser first
taking any steps or proceedings against the Covenantor.
14.3 The liability of the Guarantor pursuant to this clause 14 shall be limited
to the nominal amount of the Loan Notes at the date of Completion in
addition to interest accrued thereon, and the Purchaser's only remedy
against the Guarantor pursuant to this clause 14 shall be by
-107-
exercising its right of set-off and by the resulting cancellation of any
liability the Purchaser has to the Guarantor under the Loan Notes.
15. General
The provisions of clauses 17 (Confidentiality and Announcements), 24
(Continuing Obligations and Assignment), 25 (Costs), 26 (Notices), 27
(Severability), 28 (Entire Agreement and Variation), 29 (General
Provisions) and 30 (Governing Law and Jurisdiction) of the Master Agreement
shall apply to this Deed as if the same were set out in full herein,
mutatis mutandis.
IN WITNESS whereof this Deed has been entered into the day and year first above
written.
-108-
Executed by )
Baltimore Technologies plc )
Acting by:
Name
Director
Name
Director/Secretary
Executed by )
Clearswift Limited )
Acting by:
Name
Director
Name
Director/Secretary
Executed by )
Baltimore Technologies UK Limited )
Acting by:
Name
Director
Name
Director/Secretary
-109-
Schedule 6
Properties
Seattle Office
Address: Suite 200, Second Floor Eastgate Building, 00000 XX 00xx.
Xxxxx, Xxxxxxxx, Xxxxxxxxxx 00000
Landlord: Touchstone Partners I LLC
Current Tenant: Content Technologies Inc
Term: Commenced 25 February 2000 and expires 28 February 2005.
Lease Date: November 12, 1999
Parties to Lease: (1) Touchstone Partners I LLC and (2) Content Technologies
Inc.
Current rent: (pound)22,595.63 per month
Use: General office
Hamburg Office
Address: Xxxxxxxxxxxxxx, 00 00000 Xxxxxxx
Landlord: DEGI, Deutsche Gesellschaft fur Immobilienfonds mbH
Current Tenant: Content Technologies GmbH
Term: 64 months terminating 31 December 2005
Lease Date: 1/9/2000 with a further 300 square meters from 1/1/2001
Current Rent: Euro 9,370 + 16% VAT per month total rent (euro)10,371
Use General office
Frankfurt Office
Address: Xxxxxx Xxx. 00, 00000 Xxxxxxxxx
Xxxxxxxx: Regus Business Centre GmbH
Current Tenant: Content Technologies GmbH
Term: 6 months
Lease Date: 13 January 2000
Current Rent: (euro)2,096.30 plus VAT per month
Use General office
-110-
Florida Office
Address: Suite 133, Jupiter Cove Plaza, 0000 Xxxxx X.X. Xxx Xxxxxxx,
Xxxxxxx, XX 00000
Landlord: PCI Corporate Assoc Inc
Current Tenant: Content Technologies Inc. (renewed for a further term in the
name of Baltimore Technologies Inc.)
Term: 4 months expiring 31 January 2002
Lease Date: 1st June 2001 (extended on 9 October 2001)
Parties: (1) PCI Corporate Assoc Inc. and (2) Content Technologies
Inc.
Current Rent: $365.00 plus state sales tax
Use General office
Michigan Office
Address: Office 11, Suite 400E, 00000 Xxxxxx Xxxx Xxxxx X., Xxxxxxx,
XX 00000
Landlord: VANTAS, Livonia, Inc
Current Tenant: Content Technologies Inc.
Term: 1 year automatically renewing, unless notice given 60
days before the end of the lease (Running 1 Jan to 31 Dec)
Date: Original agreement date Dec17 1999
Parties: (1) VANTAS, Livonia, Inc. and (2) Content Technologies Inc.
Current Rent: Original charge $1,450 per month with a 7% annual
increase and increase of $150 per head if more than 1
person uses office
Use General office
-111-
Schedule 7
Intellectual Property Rights
1. Registered Trade Marks
----------------------------------------------------------------------------------------------------------
Registration
Xxxx Number Territory Class(es) Comments
----------------------------------------------------------------------------------------------------------
CERTIGRAM 2232331 UK 9
41
42
----------------------------------------------------------------------------------------------------------
CERTIGRAM 0000000 Xxxxx 9
----------------------------------------------------------------------------------------------------------
CERTIGRAM 00000000 Japan 41
42
----------------------------------------------------------------------------------------------------------
CERTIGRAM 757049 Madrid International/(1)/ 9
41
42
----------------------------------------------------------------------------------------------------------
CERTIGRAM 835235 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
CONTENT TECHNOLOGIES 870915 Community Xxxx 9
41
42
----------------------------------------------------------------------------------------------------------
e-SWEEPER 835228 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
e-SWEEPER 755829 Madrid International/(1)/ 9
41
42
----------------------------------------------------------------------------------------------------------
FILESWEEPER 0000000 Xxxxx 9
41
42
----------------------------------------------------------------------------------------------------------
FILESWEEPER 835229 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
HOMESWEEPER 1612266 Community Xxxx 9
41
42
----------------------------------------------------------------------------------------------------------
MAILSWEEPER 835231 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
MAILSWEEPER 641068 Community Xxxx 9
41
42
----------------------------------------------------------------------------------------------------------
MAILSWEEPER 0000000 Xxxxx 9
41
42
----------------------------------------------------------------------------------------------------------
MAILSWEEPER 2301305 United States 9
42
----------------------------------------------------------------------------------------------------------
MIMESWEEPER 2232335 UK 9
41
42
----------------------------------------------------------------------------------------------------------
-112-
----------------------------------------------------------------------------------------------------------
Registration
Xxxx Number Territory Class(es) Comments
----------------------------------------------------------------------------------------------------------
MIMESWEEPER 316109 Community Xxxx 9
41
42
----------------------------------------------------------------------------------------------------------
MIMESWEEPER 2212221 US 9
42
----------------------------------------------------------------------------------------------------------
MIMESWEEPER 835274 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
MIMESWEEPER 739414 Norway 9
41
42
----------------------------------------------------------------------------------------------------------
NEWSWEEPER 897298 Community Xxxx 9
41
42
----------------------------------------------------------------------------------------------------------
NEWSWEEPER 2232333 UK 9
41
42
----------------------------------------------------------------------------------------------------------
NEWSWEEPER 739407 Madrid International/(1)/ 9
41
42
----------------------------------------------------------------------------------------------------------
NEWSWEEPER 835232 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
NEWSWEEPER 2392808 US 9
41
42
----------------------------------------------------------------------------------------------------------
NEWSWEEPER 739407 Norway 9
41
42
----------------------------------------------------------------------------------------------------------
PORNSWEEPER 835233 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
RADAR & LOGO 1665157 Community Xxxx 9
41
42
----------------------------------------------------------------------------------------------------------
RADAR Logo 835236 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
SECRETSWEEPER 23292809 US 9
41
42
----------------------------------------------------------------------------------------------------------
SECRETSWEEPER 893420 Community Xxxx 9
41
42
----------------------------------------------------------------------------------------------------------
SECRETSWEEPER 835234 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
SECRETSWEEPER 2232326 UK 9
41
42
----------------------------------------------------------------------------------------------------------
SECRETSWEEPER 739542 Norway 9
41
42
----------------------------------------------------------------------------------------------------------
-113-
----------------------------------------------------------------------------------------------------------
Registration
Xxxx Number Territory Class(es) Comments
----------------------------------------------------------------------------------------------------------
SERVERSWEEPER 835226 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
STATIONSWEEPER 1206671 Community Xxxx 9
41
42
----------------------------------------------------------------------------------------------------------
TODAY'S DATA IS 762111 Madrid International/(2)/ 9
TOMORROW'S 42
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
WEBSWEEPER 0000000 Xxxxx 9
41
42
----------------------------------------------------------------------------------------------------------
WEBSWEEPER 2413370 US 9
42
----------------------------------------------------------------------------------------------------------
WEBSWEEPER 2232323 UK 9
41
42
----------------------------------------------------------------------------------------------------------
WEBSWEEPER 835227 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
WEBSWEEPER 495911 Community Xxxx 9
41
42
----------------------------------------------------------------------------------------------------------
WEBSWEEPER 755830 Madrid International/(1)/ 9
41
42
----------------------------------------------------------------------------------------------------------
* note this is the date on which the Company will have to produce an
Affidavit showing evidence of use of the xxxx.
Trade Xxxx Applications
----------------------------------------------------------------------------------------------------------
Application
Xxxx Number Territory Class(es) Comments
----------------------------------------------------------------------------------------------------------
CERTIGRAM 1131010 Community Xxxx 9
41
42
----------------------------------------------------------------------------------------------------------
CERTIGRAM 75/813210 United States 9 Abandoned
41
42
----------------------------------------------------------------------------------------------------------
CONTENT & LOGO 835224 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
CONTENT and Logo 0000-00000 Xxxxx 9
41
42
----------------------------------------------------------------------------------------------------------
CONTENT 0000-00000 Xxxxx 41
TECHNOLOGIES &
Logo
----------------------------------------------------------------------------------------------------------
CONTENT 75/491668 US 9 Either abandoned or refused
TECHNOLOGIES
----------------------------------------------------------------------------------------------------------
-114-
----------------------------------------------------------------------------------------------------------
Application
Xxxx Number Territory Class(es) Comments
----------------------------------------------------------------------------------------------------------
e-SWEEPER 1629187 Community Xxxx 41
----------------------------------------------------------------------------------------------------------
e-SWEEPER 2232332 UK 9
41
42
----------------------------------------------------------------------------------------------------------
e-SWEEPER 76/141419 USA 9
41
42
----------------------------------------------------------------------------------------------------------
e-SWEEPER 2000-112207 Japan 9
41
42
----------------------------------------------------------------------------------------------------------
FILESWEEPER 1206697 Community Xxxx 9 Refused
41
42
----------------------------------------------------------------------------------------------------------
FILESWEEPER 2232322 UK 9
41
42
----------------------------------------------------------------------------------------------------------
FILESWEEPER 75/845579 United States 9 Abandoned
(originally 41
75/845579) 42
----------------------------------------------------------------------------------------------------------
HOMESWEEPER 2000-112207 Japan 9
41
42
----------------------------------------------------------------------------------------------------------
HOMESWEEPER 76/141864 USA 9
41
42
----------------------------------------------------------------------------------------------------------
HOMESWEEPER 835230 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
MAILPRESERVER 2245303 UK 9
42
----------------------------------------------------------------------------------------------------------
MAILPRESERVER 868774 Australia 9
42
----------------------------------------------------------------------------------------------------------
MAILPRESERVER 2117919 Community Xxxx 9
42
----------------------------------------------------------------------------------------------------------
MAILPRESERVER [762109] Madrid International/(2)/ 9
42
----------------------------------------------------------------------------------------------------------
MAILPRESERVER 633810 New Zealand 9
----------------------------------------------------------------------------------------------------------
MAILPRESERVER 633811 New Zealand 42
----------------------------------------------------------------------------------------------------------
MAILPRESERVER 76/222763 US 9
42
----------------------------------------------------------------------------------------------------------
MAILSWEEPER 2232336 UK 9
41
42
----------------------------------------------------------------------------------------------------------
MAILSWEEPER 737990 Madrid International/(1)/ 9
41
42
----------------------------------------------------------------------------------------------------------
MAILSWEEPER 1612274 Community Xxxx 9 Withdrawn
Archivist for SMTP 41
42
----------------------------------------------------------------------------------------------------------
-115-
----------------------------------------------------------------------------------------------------------
Application
Xxxx Number Territory Class(es) Comments
----------------------------------------------------------------------------------------------------------
MIMESWEEPER 0000000 Xxxxx 9
41
42
----------------------------------------------------------------------------------------------------------
MIMESWEEPER 739414 Madrid International/(1)/ 9
41
42
----------------------------------------------------------------------------------------------------------
NEWSWEEPER 0000000 Xxxxx 9
41
42
----------------------------------------------------------------------------------------------------------
PORNSWEEPER 2232330 UK 9
41
42
----------------------------------------------------------------------------------------------------------
PORNSWEEPER 76/142190 USA 9
41
42
----------------------------------------------------------------------------------------------------------
PORNSWEEPER 1612316 Community Xxxx 9
41
42
----------------------------------------------------------------------------------------------------------
PORNSWEEPER 2000-112208 Japan 9
41
42
----------------------------------------------------------------------------------------------------------
RADAR Logo 76/142204 USA 9
41
42
----------------------------------------------------------------------------------------------------------
RADAR Logo 2000-112210 Japan 9
41
42
----------------------------------------------------------------------------------------------------------
SECRETSWEEPER 0000000 Xxxxx 9
41
42
----------------------------------------------------------------------------------------------------------
SECRETSWEEPER 739542 Madrid International/(1)/ 9
41
42
----------------------------------------------------------------------------------------------------------
SERVERSWEEPER 76/76/141259 USA 9
41
42
----------------------------------------------------------------------------------------------------------
SERVERSWEEPER 2000-112211 Japan 9
41
42
----------------------------------------------------------------------------------------------------------
SERVER SWEEPER 1612282 Community Xxxx 9
41
42
----------------------------------------------------------------------------------------------------------
SPAM SWEEPER 00-00000 Xxxxx 9 Refused
41
42
----------------------------------------------------------------------------------------------------------
SPAM SWEEPER 75/705916 US 9 Abandoned
41
42
----------------------------------------------------------------------------------------------------------
TODAY'S DATA IS 868771 Australia 9
TOMORROW'S 42
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
TODAY'S DATA IS 2117711 Community Xxxx 9
TOMORROW'S 42
----------------------------------------------------------------------------------------------------------
-116-
----------------------------------------------------------------------------------------------------------
Application
Xxxx Number Territory Class(es) Comments
----------------------------------------------------------------------------------------------------------
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
TODAY'S DATA IS 633812 New Zealand 9
TOMORROW'S
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
TODAY'S DATA IS 633813 New Zealand 42
TOMORROW'S
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
TODAY'S 2245308 UK 9
INFORMATION IS 42
TOMORROW'S
KNOWLEDGE/TODAY'S
DATA IS TOMORROW'S
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
TODAY'S 868770 Australia 9
INFORMATION IS 42
TOMORROW'S
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
TODAY'S 2118297 Community Xxxx 9
INFORMATION IS 42
TOMORROW'S
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
TODAY'S [762110] Madrid International/(2)/ 9
INFORMATION IS 42
TOMORROW'S
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
TODAY'S DATA IS 633814 New Zealand 9
TOMORROW'S
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
TODAY'S DATA IS 633815 New Zealand 42
TOMORROW'S
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
TODAY'S DATA IS 76/333619 US 9
TOMORROW'S 42
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
TODAY'S 76/222486 US 9
INFORMATION IS 42
TOMORROW'S
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
/(1)/ Denotes International Registration designated in the United Kingdom (base
registration), Switzerland, China, Czech Republic, Xxxxxxx, Xxxxxxx,
Xxxxxxxxx, Xxxxxx, Xxxxxx, Xxxxxx, Xxxxxxxx.
/(2)/ Denotes International Registrations designated in the United Kingdom (base
registration), Switzerland, Japan, Norway
-117-
Patent Applications
------------------------------------------------------------------------------------------
Title Territory Application Number Filing Date
------------------------------------------------------------------------------------------
Method and System for Analysing the US 09/368,386 04/08/99
Content of Encrypted Electronic Data European Patent 99125246.1 17/12/99
Japan 365,274/1999 22/12/99
------------------------------------------------------------------------------------------
Detecting Packed Executables UK 0018682.5 28/07/00
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Monitoring Electronic Mail Message UK 0021444.5 31/08/00
Digests
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Distributing Public Keys UK 0026688.2 1/11/00
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Registered Domain Names
x-xxxxxxxxxxxxxxxx.xxx Xxxxxxxxxxxxxxxxxxx.xx xxxxxxxxxxx.xx
xx-x-xxxxxxxx-xxxxxxx.xxx Xxxxxxxxxxxxxxxxxxx.xx xxxxxxxxxxx.xx
xxxxxxx-x-xxxxxxxx-xxxxxxx.xxx x-xxxxxxx.xxx xxxxxxxxx.xxx
xxxxxxxxx.xx.xx x-xxxxxxx.xx.xx xxxxxxx-xxxxxxxxxxx.xxx
xxxxxxxxx.xxx xxxxxxxx.xx.xx xxxxxxxxxxxxx.xxx
xxxxxxxxxx.xx.xx x-xxxxxxx.xxx xxxxxxxxxxxxx.xx.xx
xxxxxxxxxx.xxx xxxxxxxx.xxx xxxxxxxxxxxxxx.xx.xx
xxxxxxx-xxxxxxxx.xxx xxxxxxxxxxxxxx.xxx xxxxxxxxxxxxxx.xxx
xxxxxxxxxxxxxxxx.xxx xxxxxxx-xxx.xxx xxxxxxxxxxxxx.xx.xx
xxxxxxxxxxxxxxxxxxx.xxx xxxxxxxxxxx.xx.xx xxxxxxxxxxxxx.xxx
xxxxxxxxxxxxxxxxxxx.xxx xxxxxxxxxxx.xxx xxxxxxxxxxxxx.xxx
xxxxxxxxxxxxxxx.xx.xx xxxxxx-xxxxxxxxxxx.xxx xxxxxxxxxxxxx.xxx
xxxxxxxxxxxxxxx.xxx xxxxxxxxxxxxx.xxx xxxxxxxxxx.xx.xx
xxxxxxx-xxxxxxxx.xx.xx xxxxxxxxxxx.xxx xxxx-xxxxxxxxxxx-xxxx.xxx
xxxxxxx-xxxxxxxx.xxx xxxxxxxxxxx.xxx
xxxxxxxxxxxxxxxxxxx.xxx xxxxxxxxxxx.xxx.xx
xxxxxxx-xxxxxxxxxxxx.xxx xxxxxxxxxxx.xx.xx
NB (i) xxxxxxxxxxx.xxx.xx is registered in the name of Mimesweeper
(ii) xxxxxxxxxxx.xx.xx has been detagged.
(iii) xxxxxxxxxxxxxxxxxxx.xx and xxxxxxxxxxx.xx are registered in the name
of Content Technologies GmbH.
-118-
Norwegian Trade Xxxx Applications
The Seller believes that the following applications have been made but has not
been able to confirm the accuracy of the details in the following table. The
information is provided from trade xxxx search reports provided by the
Purchaser's solicitors prior to the signing of this Agreement.
----------------------------------------------------------------
Trade Xxxx Application No Territory Class(es)
----------------------------------------------------------------
TODAY'S DATA IS 200110600 Norway 9
TOMORROW'S KNOWLEDGE 42
----------------------------------------------------------------
TODAY'S INFORMATION IS 200110599 Norway 9
TOMORROW'S KNOWLEDGE 42
----------------------------------------------------------------
MAILPRESERVER 200110598 Norway 9
42
----------------------------------------------------------------
CERTIGRAM 200107683 Norway 9
41
42
----------------------------------------------------------------
WEBSWEEPER 200106821 Norway 9
41
42
----------------------------------------------------------------
E-SWEEPER 200106820 Norway 9
41
42
----------------------------------------------------------------
MAILSWEEPER 2000010215 Norway 9
41
42
----------------------------------------------------------------
-119-
Schedule 8
The Completion Accounts
Part 1
1. The Purchaser shall use its reasonable endeavours to procure that
consolidated accounts of the Group (including the Business) as at the
Completion Date (the "Completion Accounts") are drawn up and reviewed by
the Purchaser's Auditors in the form set out in Part III of this Schedule
as soon as practicable and in any event by not later than 60 Business Days
after Completion. The costs of the Purchaser's Auditors shall be borne
equally by the Purchaser and the Sellers. The Purchaser shall procure that
the Purchaser and the Purchaser's Auditors shall have such reasonable
access during normal business hours to the records of the Group and the
Business as they may reasonably require for the purposes of fulfilling
their obligations contained in this Schedule.
2. The Completion Accounts shall be prepared by the Purchaser:
(a) in accordance with the principles referred to in Part II of this
Schedule 8;
(b) subject to paragraph (a) above, in accordance with principles,
policies and procedures of accounting applied on a basis consistent
with the Accounts; and
(c) subject to paragraphs (a) and (b) above, in accordance with UK GAAP.
If there is any inconsistency between any of the above mentioned
sub-paragraphs, paragraph (a) shall prevail over paragraphs (b) and (c),
and paragraph (b) shall prevail over paragraph (c).
3. For the purposes of this Schedule:
"Baltimore Excluded Items" means the following:
(a) any leasehold improvements or furniture which are not used in the
Business or by a Group member;
(b) any balance sheet entries relating to the BUK Property (other than in
respect of liabilities expressly assumed under the BUK Underlease);
(c) any computer equipment which the Purchaser, any Group member or BUK in
relation to the Business does not require in connection with the
Business;
(d) the Repayment;
(e) cash in hand or at bank.
"Base Working Capital Amount" means (pound)(700,000);
-120-
"Completion Working Capital Amount" means Completion Net Assets less the
Content Excluded Items.
"Content Excluded Items" means the aggregate of the following amounts
calculated by reference to the principles to be applied in preparing the
Completion Accounts:
(a) the bonuses and commissions payable to Employees (and employees of any
Group member) in connection with the transaction or otherwise and all
National Insurance or PAYE (or the equivalent in any other
jurisdiction in relation thereto attributable to any period or event
ending on or prior to Asset Completion;
(b) provision for all liability to National Insurance and PAYE (or the
equivalent in other jurisdictions) which would or may arise in the
exercise of any Baltimore share option;
(c) any sums payable or liabilities arising out of any termination of
employment or related arrangements of any Employee or any employees of
any Group member attributable to any period or event ending on or
prior to Asset Completion;
(d) provision for withholding tax liabilities referred to in paragraph R5
of the Disclosure Letter (relating to CTL's failure to deduct
withholding tax from royalties paid to a German company);
(e) provision for penalties or interest arising in respect of overdue
filings as at Asset Completion in relation to Taxation for non-UK
Group members;
(f) any corporation tax or any tax payable by reference to taxable profits
attributable to any period or event ending on or prior to Asset
Completion.
(g) any United States sales tax payable attributable to any period or
event ending on or prior to Asset Completion;
(h) provision of (pound)35,000 in respect of the licence cost of personal
office productivity software of substantially similar nature and
functionality to the personal office productivity software used by the
Group prior to Completion and no corresponding asset will be
recognised in respect of this provision.
(i) any tax payable by reason of the Company and its Subsidiary
Undertakings being part of the Seller's Group for tax purposes which
would not have arisen were it not so grouped;
"Projected Balance Sheet" means the projected proforma consolidated balance
sheet for the Group and the Business as at 31 March 2002 in the agreed
form.
"Completion Net Assets" means the amount of the total assets less total the
liabilities of the Group (including the Business) (including for the
avoidance of doubt the Content Excluded
-121-
Items) (adjusted if necessary in accordance with the principles set out in
Part II of this Schedule) as shown by the Completion Accounts once final
and binding between the parties.
4. A draft of the Completion Accounts together with a draft report of the
Purchaser's Auditors in the form set out in Part III of this Schedule (the
"Report") shall be delivered by the Purchaser to the Seller's Auditors not
later than seven days after the same shall have been prepared and reviewed
and the Seller and the Seller's Auditors may review the same in order to
satisfy themselves that the draft Completion Accounts have been prepared in
accordance with the provisions of this Schedule 8 and that the details
contained in the Report are correct.
5. The Report shall be in the form set out in Part IV of this Schedule but the
format of Part IV is for convenience only and in no way affects the
construction thereof or the construction of this Agreement.
6. The Purchaser shall co-operate promptly and shall use its reasonable
endeavours to procure that the Purchaser's Auditors co-operate promptly in
any such review and shall give to the Seller and the Seller's Auditors all
such information and explanations as they may reasonably require in
relation thereto.
7. The Seller shall as soon as reasonably practicable and in any event by no
later than 45 Business Days after receiving the Completion Accounts issue
either:
(a) the confirmation of agreement with the draft Completion Accounts; or
(b) a statement in writing of those respects in which it disagrees with
the draft Completion Accounts, together with the reasons for its
disagreement and specifying and quantifying the adjustments which, in
its opinion, should be made to the draft Completion Accounts.
8. If a confirmation is given under paragraph 7(a) above, the draft Completion
Accounts will be the Completion Accounts and will be deemed to be binding
on the parties to this Agreement. If no statement in accordance with
paragraph 7(b) is given the Seller will be deemed to have agreed to the
draft Completion Accounts and the said Report shall be final and binding
between the parties.
9. If a statement is given under paragraph 7(b) above, the Seller and the
Purchaser shall attempt in good faith to resolve any such disagreement
within 15 Business Days of such statement being issued. Any resolution
which enables the Completion Net Assets to be agreed shall be expressed in
a certificate to be signed by both the Purchaser and the Seller (a "Joint
Resolution"). If a Joint Resolution is not agreed within this period, the
matter shall be referred to a firm of independent chartered accountants
jointly agreed upon between the Seller and the Purchaser at any time or,
failing which and on application of either the Seller or the Purchaser at
any time after a period of a further 15 Business Days, by the President,
from time to time, of the Institute of Chartered Accountants in England and
Wales, which firm (the "Independent
-122-
Accountants") shall then determine the value or amount of the matter or
matters in dispute. The Independent Accountants shall act as experts and
not as arbitrators. Their decision shall be communicated in writing to the
Purchaser and the Seller and shall be (in the absence of manifest error)
final and binding upon the Purchaser and the Seller. The draft Completion
Accounts, as amended pursuant to a Joint Resolution or a decision of the
Independent Accountants pursuant to this paragraph 9 shall consist the
Completion Accounts for the purposes of this Agreement.
10. The Seller and the Purchaser shall each provide (and the Purchaser shall
procure that the members of the Group shall provide) the Independent
Accountants with all information that they may reasonably require. The
costs of the Independent Accountant's determination shall be in the award
of the Independent Accountants.
11. The Seller and the Purchaser shall procure that all records, working papers
and other information as may be reasonably required by the other (or by the
Sellers' Auditors or Purchaser's Auditors) or the Independent Accountants
for the purposes of this Schedule 8 shall be made available upon request
for them and each of the Purchaser and the Seller shall generally render
all reasonable assistance, including the production and supply of
photocopies of relevant documents to the Independent Accountants, and
access reasonably necessary for the preparation of the Completion Accounts.
-123-
Part II
Principles
The Completion Accounts shall be drawn up by the Purchaser in accordance with
the following principles:
1. The Completion Accounts shall be prepared in accordance with UK GAAP save
that revenue shall be recognised in accordance with US GAAP and where there
is room for interpretation of such accounting policies and principles then
policies and principles consistent with those adopted in the preparation of
the Projected Balance Sheet shall be adopted.
2. The Base Working Capital Amount excludes and there shall be excluded from
the Completion Working Capital Amount:
2.1 Any net intercompany balances between any Group member and the Seller's
Group (except arising from any charges relating to services supplied in the
ordinary course of business).
2.2 the Baltimore Excluded Items and the Content Excluded Items.
3. In calculating the Completion Working Capital Amount:
3.1 any general accruals or provisions shall be included at the amount at which
such accruals or provisions were included in the Projected Balance Sheet
subject to proper utilisation;
3.2 the foreign exchange rates used in preparing the Projected Balance Sheet
shall be used in preparing the Completion Accounts;
3.3 no deferred tax asset shall be included.
4. If the Purchaser or any Group member is or will be obliged to settle or
discharge any Content Excluded Items, a provision equal to the aggregate
value of the Content Excluded Items so settled or discharged shall be
included in the Completion Accounts.
5. Management charges and other arrangements between the Seller's Group and
any Group member will be consistent with those incurred in relation to
prior accounting periods.
-124-
Part III
Form of Completion Accounts
Same format as Projected Balance Sheet
-125-
Part IV
Form of Report
To: The Directors
Baltimore Technologies plc
1. The report has been drawn up in accordance with the provisions of Schedule
8 to the Agreement dated [_] January 2002 between Baltimore Technologies
plc (1) Baltimore Technologies UK Limited (2) and [The Purchaser] (3) (the
"Agreement"). Words and expressions defined in the Agreement shall have the
same meanings in this report.
2. In our opinion the Completion Accounts (which are annexed hereto) have been
drawn up in accordance with the provisions of Schedule VIII to this
Agreement.
3. Based on the Completion Accounts we confirm that:
(a) The amount of the Completion Working Capital Amount is (pound)_; and
(b) The sum of(pound)_ is now due and payable by the [Purchaser/Seller]]
to the [Seller/Purchaser] pursuant to clause 6.7 of the Agreement.
Signed:
[Purchaser's Auditors]
-126-
Schedule 9
Contracts
---------------------------------------------------------------------------------------------------------------------------------
Name of contract Baltimore/Content entity Company name Date signed
---------------------------------------------------------------------------------------------------------------------------------
Agreement for the sale and purchase Baltimore Technologies (UK) Limited Content Technologies Limited 30/03/2001
of the business and undertaking of
CTL
---------------------------------------------------------------------------------------------------------------------------------
Business Transfer Agreement Baltimore Technologies Japan Content Technologies KK (blank)
---------------------------------------------------------------------------------------------------------------------------------
Data Protection Agreement Baltimore Technologies (UK) Limited Content Technologies Inc (blank)
---------------------------------------------------------------------------------------------------------------------------------
Escrow Agreement Baltimore Technologies (UK) Limited NCC Group 08/08/2001
Content Technologies Ltd NCC Group (blank)
---------------------------------------------------------------------------------------------------------------------------------
Heads of Agreement Content Technologies Limited Abathorn Limited 16/04/1999
---------------------------------------------------------------------------------------------------------------------------------
Lease Agreement Content Technologies Dell 12/08/1999
Content Technologies Inc Pitney Xxxxx 05/01/2001
---------------------------------------------------------------------------------------------------------------------------------
Loan Facility Content Technologies Holdings Limited Integralis Limited 04/02/1998
---------------------------------------------------------------------------------------------------------------------------------
Microsoft Business Agreement Baltimore Technologies (UK) Limited Microsoft Ireland Operations Limited 30/10/2001
---------------------------------------------------------------------------------------------------------------------------------
Microsoft Select Agreement Baltimore Technologies (UK) Limited Microsoft Ireland Operations Limited 30/10/2001
---------------------------------------------------------------------------------------------------------------------------------
(blank) Content Technologies Limited Pearl (blank)
---------------------------------------------------------------------------------------------------------------------------------
Independent Contractor Intellectual Content Technologies Inc Xxxxxxx LLC 21/10/2001
Property Agreement
---------------------------------------------------------------------------------------------------------------------------------
-127-
---------------------------------------------------------------------------------------------------------------------------------
Name of contract Baltimore/Content entity Company name Date signed
---------------------------------------------------------------------------------------------------------------------------------
Esweeper licence Baltimore Technologies (UK) Limited Cad-Capture 10/06/2001
nevadatele (blank)
---------------------------------------------------------------------------------------------------------------------------------
e-sweeper licence Baltimore Technologies (UK) Limited Bibliottech Limited 01/05/2001
Eclipse Networking Limited 01/08/2001
Content Technologies Limited ATL Networks Limited 01/02/2000
Comet Technology Limited 01/10/200
E-Go Messaging Limited 01/04/2001
Hiway Communications Limited 24/02/2000
Internal Systems Limited 01/10/2000
---------------------------------------------------------------------------------------------------------------------------------
Assignment of IPR Content Technologies Limited eREFINERY 07/08/2000
University of East Anglia (blank)
Pearl 15/09/1999
---------------------------------------------------------------------------------------------------------------------------------
Proposed contract for a Skin Content Technologies Limited University of East Anglia (blank)
Filtering System
---------------------------------------------------------------------------------------------------------------------------------
Addendum One to Reseller Agreement Content Technologies Inc Global Technologies Inc (blank)
(draft)
---------------------------------------------------------------------------------------------------------------------------------
Cross-Licence Agreement Integralis Inc. Trend Micro Inc. 15/01/1998
---------------------------------------------------------------------------------------------------------------------------------
Deed of Novation Baltimore Technologies (UK) Limited NHS Pensions Agency 11/01/2001
SEMA UK Limited 11/01/2001
---------------------------------------------------------------------------------------------------------------------------------
Demonstration Software Agreement Integralis Limited Security Domain XXX.XXX (blank)
---------------------------------------------------------------------------------------------------------------------------------
Electronic Forms Implementation Content Technologies Limited
---------------------------------------------------------------------------------------------------------------------------------
-128-
---------------------------------------------------------------------------------------------------------------------------------
Name of contract Baltimore/Content entity Company name Date signed
---------------------------------------------------------------------------------------------------------------------------------
Project
---------------------------------------------------------------------------------------------------------------------------------
Licence Agreement Baltimore Technologies (UK) Limited Austrian Government (blank)
Content Technologies Baltimore Technologies Limited 22/12/1999
Content Technologies Holdings Limited Surfcontrol 05/10/2001
Content Technologies Inc XX Xxxxxxx and Son (blank)
Content Technologies Limited KPMG (blank)
Content Technologies Limited University of Edinburgh (blank)
Integralis Limited Combined Insurance Company 06/03/1998
Baltimore Technologies (UK) Limited Ashland Oil (blank)
Baltimore Technologies (UK) Limited Telewest 11/10/2001
---------------------------------------------------------------------------------------------------------------------------------
Licence Amendment Content Technologies Limited Cable & Wireless 30/11/2001
Baltimore Technologies (UK) Limited KPN Quest 19/10/2001
Baltimore Technologies (UK) Limited Telenet (Blank)
---------------------------------------------------------------------------------------------------------------------------------
Licence details Content Technologies Inc. Repository Technologies Inc 31/03/2000
---------------------------------------------------------------------------------------------------------------------------------
Licence, maintenance and support Content Technologies Inc Aluminium Company of America 09/11/1998
agreement
---------------------------------------------------------------------------------------------------------------------------------
Licensed Works Agreement 4998S62105 Content Technologies Inc International Business Machines Corp. 14/01/1999
---------------------------------------------------------------------------------------------------------------------------------
Master Software Licence Agreement Baltimore Technologies (UK) Limited United Health Care Group 28/12/2001
---------------------------------------------------------------------------------------------------------------------------------
Microsoft Licence Agreement Content Technologies Limited Microsoft 22/06/2000
---------------------------------------------------------------------------------------------------------------------------------
Novation Agreement Baltimore Technologies (UK) Limited Xxxxx Services Limited 11/01/2001
Logica Services Limited 07/12/2001
---------------------------------------------------------------------------------------------------------------------------------
Schedule 2 to master licence Baltimore Technologies Inc Banc One 15/03/2001
agreement
---------------------------------------------------------------------------------------------------------------------------------
Schedule to master licence Baltimore Technologies Inc Banc One 27/12/1997
agreement
---------------------------------------------------------------------------------------------------------------------------------
Software Licence Agreement Content Technologies Limited Digitech Projects Limited 17/08/2000
---------------------------------------------------------------------------------------------------------------------------------
-129-
---------------------------------------------------------------------------------------------------------------------------------
Name of contract Baltimore/Content entity Company name Date signed
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
(blank) Content Technologies Inc Fluor Xxxxxxx 29/10/1999
---------------------------------------------------------------------------------------------------------------------------------
Content Support Agreement Content Technologies Inc United Health Care Group 28/12/2001
---------------------------------------------------------------------------------------------------------------------------------
Content Technologies Support Content Technologies Limited Alliance and Leicester (blank)
Agreement
---------------------------------------------------------------------------------------------------------------------------------
Emergency supplementary support Content Technologies Inc Antelope 16/05/2001
---------------------------------------------------------------------------------------------------------------------------------
External Access Agreement Content Technologies Inc United Health Care Group 28/12/2001
---------------------------------------------------------------------------------------------------------------------------------
Integralis Limited Support Integralis Limited Xxxxx & Overy 13/10/1995
Agreement Bank Paribas (blank)
---------------------------------------------------------------------------------------------------------------------------------
Licence, maintenance and support Content Technologies Inc Aluminium Company of America 09/11/1998
Agreement
---------------------------------------------------------------------------------------------------------------------------------
Maintenance Agreement Content Technologies Inc XX Xxxxxxx and Son 02/09/2001
Xxxxxx Clinic 11/07/2000
Call Interactive (blank)
CF Software 07/07/2000
Chief Supply Corp 07/07/2000
General and Cologne Re Services 11/01/2000
Illinois Department of Insurance 27/06/2000
Industrial Commission of Ohio 10/07/2000
Xxxxxxxxxxxxxxx.xxx 07/07/2000
---------------------------------------------------------------------------------------------------------------------------------
Maintenance and Support Agreement Content Technologies Baltimore Technologies Limited (blank)
Content Technologies Limited Whitbread Plc 19/02/1999
---------------------------------------------------------------------------------------------------------------------------------
-130-
---------------------------------------------------------------------------------------------------------------------------------
Name of contract Baltimore/Content entity Company name Date signed
---------------------------------------------------------------------------------------------------------------------------------
Support Agreement Baltimore Technologies (UK) Limited Austrian Government (blank)
Content Technologies Limited Diageo Plc 16/09/1999
Entopy (blank)
KPMG 08/02/1999
Integralis Limited Enterprising IT 21/03/1997
IBM 30/01/1997
Content Technologies Limited Bank Paribas (blank)
---------------------------------------------------------------------------------------------------------------------------------
OEM Software Licence Agreement Baltimore Technologies Limited Group Technologies (blank)
Integralis Inc Systems Research and Applications
Corp 26/09/1997
Integralis Limited Command Software 19/05/1997
Integralis Limited S&S International PLC (blank)
---------------------------------------------------------------------------------------------------------------------------------
OEM Software Licence Agreement Integralis Inc Systems Research and Applications
modification 1 Corp 27/05/1998
---------------------------------------------------------------------------------------------------------------------------------
OEM Software Licence Agreement Integralis Inc Systems Research and Applications
modification 2 Corp 12/06/1998
---------------------------------------------------------------------------------------------------------------------------------
Addendum to OPSEC Alliance Integralis Limited Check Point Software Technologies
Framework Partner Agreement Limited (blank)
OPSEC Framework Plus Program
---------------------------------------------------------------------------------------------------------------------------------
Amendment 1 to Distributor Baltimore Technologies Pty Limited Solomon Technology Corp (blank)
Agreement
---------------------------------------------------------------------------------------------------------------------------------
Amendment 1 to Distributor Partner Content Technologies Inc Interwork Technologies 10/02/2000
Program Agreement
---------------------------------------------------------------------------------------------------------------------------------
Authorised Reseller Partner Program Content Technologies Inc MC2 Corporation 22/03/2000
Agreement
---------------------------------------------------------------------------------------------------------------------------------
-131-
---------------------------------------------------------------------------------------------------------------------------------
Name of contract Baltimore/Content entity Company name Date signed
---------------------------------------------------------------------------------------------------------------------------------
Authorised Reseller Agreement Baltimore Technologies Pty Limited Arston Systems Pty Limited 23/02/1999
Aspect Computing Pty Limited 15/08/2000
Beethoven Computer Services 28/02/2000
Chass Computer Consultants (M) Snd
Bhd 07/10/2001
Chass Computer Consultants Pte
Limited 17/10/2001
Imaginet International Inc 20/11/2000
Logical Systems WA Pty Limited 30/03/2000
Megatec Pty Limited 18/04/2000
Newbase 01/12/2000
Professional Advantage Pty Limited 05/06/2000
Securenet Limited 18/07/2000
---------------------------------------------------------------------------------------------------------------------------------
Authorised Reseller Software Baltimore Technologies Pty Limited Aspect Computing Pty Limited 28/02/2000
Support Agreement Chass Computer Consultants (M) Snd
Bhd 14/10/2001
Chass Computer Consultants Pte
Limited 17/10/2001
Imaginet International Inc 20/11/2000
Logical Systems WA Pty Limited 30/03/2000
Megatec Pty Limited 16/05/2000
Professional Advantage Pty Limited 05/06/2000
Securenet Limited 18/07/2000
Content Technologies Limited Beethoven Computer Services 28/02/2000
---------------------------------------------------------------------------------------------------------------------------------
Authorised Training Agreement Baltimore Technologies (UK) Limited Xxxxxxxx 13/12/2001
Content Technologies Limited Akademie fue Netzwerksicherbeit gmbh 27/12/1999
Allasso GMBH 09/01/2000
Data Results BV 27/12/1999
Entropy Limited 06/01/2000
Integralis SARL 19/01/2000
Xxxxxxxx Distribution AS 04/01/2000
Content Technologies Limited Integralis Network Systems Limited 22/02/1999
---------------------------------------------------------------------------------------------------------------------------------
Authorised Reseller Partner Content Technologies Inc Glencom Systems Inc 22/06/2000
---------------------------------------------------------------------------------------------------------------------------------
-132-
---------------------------------------------------------------------------------------------------------------------------------
Name of contract Baltimore/Content entity Company name Date signed
---------------------------------------------------------------------------------------------------------------------------------
Program Agreement
---------------------------------------------------------------------------------------------------------------------------------
Baltimore Technologies Alliance Baltimore Technologies Inc Xxxxxx Xxxxxxxxxxx (blank)
Program Premier Partner
Participation Agreement
---------------------------------------------------------------------------------------------------------------------------------
Baltimore Technologies Master Baltimore Technologies (UK) Limited Baltimore Technologies Pty Limited 01/07/2001
Distributor Agreement Content Technologies (Asia Pacific)
Pty Limited (blank)
Baltimore Technologies Ltd MDSS (blank)
---------------------------------------------------------------------------------------------------------------------------------
Content Technologies Authorised Content Technologies Ltd Integralis Network Systems Limited (blank)
Training Agreement
---------------------------------------------------------------------------------------------------------------------------------
Content Technologies Inc. Content Technologies Inc 0XXXX.XXX 19/01/2000
Authorised Reseller Program
Terms and Conditions
---------------------------------------------------------------------------------------------------------------------------------
Distribution Agreement (blank) Japan office (blank)
---------------------------------------------------------------------------------------------------------------------------------
- 133 -
------------------------------------------------------------------------------------------------------------------------------
Name of contract Baltimore/Content entity Company name Date signed
------------------------------------------------------------------------------------------------------------------------------
Distribution Agreement for Baltimore Technologies Limited SEC Datacom A/S 01/05/2001
MIMEsweeper Content Technologies Limited Allasso 01/12/2000
Bristol Group 19/02/1999
Computer Links AG 27/01/2000
Computer Systems Engineering Company 31/05/1999
comsol 01/11/1999
Data Results 01/11/1998
Entropy Limited 02/03/1999
First Defense 21/09/2000
International Computer and Networks 01/06/2000
Networks Unlimited 18/11/1998
Protect Data AB 01/10/1998
Risc 12/12/1997
SafeComms Group 04/01/2000
Softway SARL 01/11/1998
Xxxxxxxx Distribution AS 01/09/1999
Unipalm 28/01/1999
------------------------------------------------------------------------------------------------------------------------------
Distributor Agreement Baltimore Technologies Limited Eglobal 13/10/1999
Solomon Technology 30/06/2001
Content Technologies Limited Pinto Basto Electrotecnia e Macquinas (blank)
Qubis doo (blank)
Renaissance Electronics Limited (blank)
Sapher Servers (blank)
Integralis Limited Information Systems Design LLC 12/02/1997
------------------------------------------------------------------------------------------------------------------------------
Distributor Partner Program Content Technologies Inc Interwork Technologies 15/02/2000
Agreement
------------------------------------------------------------------------------------------------------------------------------
ISV Partner Program Content Technologies Baltimore 22/09/1999
------------------------------------------------------------------------------------------------------------------------------
Java Security Alliance Member Integralis Technology Finjan Limited (blank)
Agreement
------------------------------------------------------------------------------------------------------------------------------
- 134 -
------------------------------------------------------------------------------------------------------------------------------
Name of contract Baltimore/Content entity Company name Date signed
------------------------------------------------------------------------------------------------------------------------------
Agreement
------------------------------------------------------------------------------------------------------------------------------
Merchant Agreement Integralis Limited Commerce Direct Inc 01/03/1997
------------------------------------------------------------------------------------------------------------------------------
OPSEC Alliance Framework Partner Integralis Limited Check Point Software Technologies (blank)
Agreement Limited
------------------------------------------------------------------------------------------------------------------------------
Premium Partner Agreement for Content Technologies Limited Comcent Point Software Technologies 01/01/2000
MIMEsweeper Limited
------------------------------------------------------------------------------------------------------------------------------
Referral Agreement Baltimore Technologies (UK) Limited Xxxx (blank)
------------------------------------------------------------------------------------------------------------------------------
Reseller Agreement Baltimore Technologies Authentica Inc 23/08/2001
------------------------------------------------------------------------------------------------------------------------------
Reseller Partner Program Agreement Content Technologies Inc ADS - Information Products 02/04/2001
Alrion Networking Group 14/02/2000
Applied Computer Group inc 21/06/2000
Altantec Group 14/02/2000
Bay Data Consultants 05/10/2000
bisg 12/06/2000
Breakwater Security Associates 22/11/2000
Xxxxxx Research LLC 08/02/2000
Capricorn Diversified Systems 29/02/2000
CM securenet Inc 21/09/2000
Columbus Computer Services 15/12/1999
Commercium Tech 19/10/1999
Cosapi Soft (blank)
CVSI Inc 01/09/2000
Eastern Data Comm Inc 03/10/2000
Electronic Interfact Assoc 25/10/1999
Electronic Systems 22/05/2000
------------------------------------------------------------------------------------------------------------------------------
- 135 -
------------------------------------------------------------------------------------------------------------------------------
Name of contract Baltimore/Content entity Company name Date signed
------------------------------------------------------------------------------------------------------------------------------
Enterprise Technology 04/10/1999
ERT Group Inc 31/03/2000
Firetower Inc 03/09/1999
Fortrex Technology 10/09/1999
Forward Advantage 11/08/2001
Global Technologies Inc 26/04/2000
Guidesoft Technologia Sistemas 01/10/2000
Inetsupport 27/07/2000
Information Products Inc 19/01/2000
ISM Inc 19/11/1999
Issacinc 09/05/2000
Xxxxx X Xxxxxxxx & Assocs 15/09/1999
Xxxxxxx Consulting Inc 09/10/1999
Key Resources Inc 11/01/2000
KKL Systems Inc 21/01/2000
Logicorp 05/09/1999
Matrix Holding Group 25/10/1999
Metrotech Partners 12/12/1999
Micros-to-mainframe 08/09/1999
MOBA Inc 20/09/1999
National Business Group 19/12/2000
Nexgen Ltd 09/09/1999
NEXL Inc 07/09/1999
Pacific Infosystems 15/11/1999
Paratech Resources Inc 24/01/2000
Perfect Software Solutions 15/02/2000
Performance Enhancement Inc 28/09/1999
Ran Ingenieria 22/09/2000
RD Software Services 18/11/1999
Xxxxx Web Inc 15/09/1999
Resoft International LLC 19/01/2000
RFD Assoc. Inc 28/07/2000
------------------------------------------------------------------------------------------------------------------------------
- 136 -
------------------------------------------------------------------------------------------------------------------------------
Name of contract Baltimore/Content entity Company name Date signed
------------------------------------------------------------------------------------------------------------------------------
Sbi 18/09/2000
Secure Enterprise Computing 09/09/1999
Set Solutions Inc 27/09/1999
Sysinct/Ikon Office Solution 07/03/2001
Systems Solutions Technologies LLC 02/11/2000
The Right Solution Inc 09/09/1999
Triumph Technologies Inc 10/09/1999
Turn net Solutions 11/07/2000
Workgroup Technology Partners 23/11/1999
Zampati 04/10/1999
------------------------------------------------------------------------------------------------------------------------------
Lease Agreement Baltimore Technologies plc API (no. 10) 21/03/2001
Content Technologies Inc Touchstone Partners 12/11/1999
------------------------------------------------------------------------------------------------------------------------------
Lease Extension Agreement Content Technologies Inc PCI Corporate Assoc. Inc 09/10/2001
------------------------------------------------------------------------------------------------------------------------------
Office lease agreement Content Technologies Vantas Livonia Inc 17/12/1999
------------------------------------------------------------------------------------------------------------------------------
Contract for the supply of Content Technologies Limited Progressive (blank)
technical services
------------------------------------------------------------------------------------------------------------------------------
Heads of Terms Baltimore Technologies Pty Limited Command 05/09/2001
Content Technologies Limited Sophos 31/01/2000
Content Technologies Limited Command 05/04/2001
------------------------------------------------------------------------------------------------------------------------------
-137-
Schedule 10
Products
--------------------------------------------------------------------------------
Product or Service Version Description
--------------------------------------------------------------------------------
WEBsweeper Software used to manage and control the
content of webpages.
--------------------------------------------------------------------------------
MAILsweeper for SMTP Software used to manage and
control the content of an
organisation's outgoing and incoming
emails.
--------------------------------------------------------------------------------
PORNsweeper A MAILsweeper for SMTP add-on that
identifies and manages inappropriate
images contained in JPEG and MPEG
files.
--------------------------------------------------------------------------------
SECRETsweeper A MAILsweeper for SMTP add-on that
allows the content of encrypted
documents to be managed and controlled.
--------------------------------------------------------------------------------
MAILsweeper for Exchange Software used to manage and control the
2000 content of an organisation's outgoing
and incoming emails where the
organisation uses Exchange 2000
servers.
--------------------------------------------------------------------------------
MAILsweeper for Domino Software used to manage and control the
content of emails being transmitted
within an organisation.
--------------------------------------------------------------------------------
e-Sweeper A service that allows an end user to
have their email content management
functionality managed and controlled
remotely or by a third party.
--------------------------------------------------------------------------------
Maintenance and Support Maintenance and Support of our
software products,
--------------------------------------------------------------------------------
Surfcontrol/WEBsweeper A WEBsweeper add-on that allows certain
URL Blocker URLs contained in a proprietary
database to be blocked to the user.
--------------------------------------------------------------------------------
MAILsweeper for Exchange Software used to manage and control the
content of an organisation's outgoing
and incoming emails where the
organisation uses Exchange servers.
--------------------------------------------------------------------------------
MIMEsweeper for Domino
Web Module
--------------------------------------------------------------------------------
MAILsweeper Archivist for End of life'd
SMTP
--------------------------------------------------------------------------------
Preserver for Exchange End of life'd
--------------------------------------------------------------------------------
Internet Translation Gateway End of life'd
--------------------------------------------------------------------------------
MIMEsweeper for Notes End of life'd
--------------------------------------------------------------------------------
-138-
--------------------------------------------------------------------------------
Product or Service Version Description
--------------------------------------------------------------------------------
MIMEsweeper for Firewall 1 End of life'd
--------------------------------------------------------------------------------
SPAMsweeper Proof of concept only (not released)
--------------------------------------------------------------------------------
Y2K Scenario End of life'd
--------------------------------------------------------------------------------
SKINS
--------------------------------------------------------------------------------
FILEsweeper Proof of concept only (not released)
--------------------------------------------------------------------------------
Certigram
--------------------------------------------------------------------------------
Certigram Toolkit
--------------------------------------------------------------------------------
and all user manuals and all other material documentation relating to the above
and all previous versions and releases of the above that are currently sold and
supported.
-139-
Schedule 11
BUK Property
Part A
Country : England and Wales
Lease dated 21 March 2001 of property known as 1310 Xxxxxxxxx, Xxxxxxxxx
Xxxxxxxx Xxxx, Xxxxxx, Xxxxxxx XX0 0XX and made between API (No.10) Limited (1)
and the Seller (2) (the "Lease").
Part B
1. Sections 24-28 Landlord & Tenant Act 1954
As soon as reasonably practicable following the date of this Agreement the
Seller shall and the Purchaser shall and if appropriate shall procure that
Content Technologies Limited shall jointly apply to the Mayor's & City
Court for an order authorising the exclusion of the provisions of section
24-28 (inclusive) of the Landlord & Xxxxxx Xxx 0000 in relation to the BUK
Underlease (the "Court Order").
2. Consents
2.1 The Seller shall use all reasonable endeavours to obtain prior to the
Completion Date and, at its own cost, the Landlord's consent in writing to
the grant of the BUK Underlease (the "Consent").
2.2 The Purchaser shall and if appropriate shall procure that Content
Technologies Limited shall:
(a) promptly supply to the Seller all such trading accounts, references
and other information as may be reasonably required by either the
Seller or the Landlord in connection with the application for the
Consent;
(b) comply with all requirements to which the Landlord is entitled by the
express or implied terms of the Lease to impose on a prospective
undertenant (or on any guarantor) as a condition of the Landlord
granting consent to any underletting;
(c) (if so required by the Landlord as a condition of granting the
Consent) covenant directly with the Landlord to observe and perform
the covenants and conditions contained in the Lease (save as to
payment of rent and only insofar as they affect the BUK Underlease
Property) and to pay the rent under and to observe and perform the
covenants and conditions contained in the BUK Underlease, such
covenant to be in the form reasonably required by the Landlord; and
comply with all other reasonable requirements of the Seller and the
Landlord in relation to the obtaining of the Consent.
-140-
2.3 Subject to compliance by the Purchaser with its obligations under clause
2.2 above the Seller shall:
(a) deal promptly and reasonably with any drafts received from the
Landlord; and
(b) comply with all reasonable requirements of the Landlord in relation to
the obtaining of the Consent; and
(c) promptly supply to the Purchaser a copy of the Consent when received.
2.4 Without prejudice to paragraph 2.1 in the event that the Landlord's consent
to the grant of the BUK Underlease and/or the Court Order has not been
obtained by Completion the Purchaser and Content Technologies Limited may
take occupation of the BUK Underlease Property as licensees with the
benefit of all rights covenants and other conditions contained in the BUK
Underlease, in which case from the date of and for the period of such
occupation as licensee the Purchaser shall and shall procure that Content
Technologies Limited shall comply with the tenant's covenants in the BUK
Underlease and the tenant's covenants in the Lease (except the covenant to
pay rent) and insofar as they affect the BUK Underlease Property.
2.5 The taking up of occupation by the Purchaser and Content Technologies
Limited under paragraph 2.4 shall not create or be deemed to crease any
tenancy or demise or be deemed to give the Purchaser and Content
Technologies Limited any interest greater than that of a bare licensee
prior to actual completion of the BUK Underlease.
2.6 If the Landlord complains that the Seller is in breach of its obligations
under the Lease in allowing the Purchaser or Content Technologies Limited
to take up occupation of the BUK Underlease Property prior to completion of
the BUK Underlease, then the Purchaser and Content Technologies Limited
shall vacate the BUK Underlease Property within ten working days after
service of notice by the Seller requiring the Purchaser and Content
Technologies Limited to vacate the BUK Underlease Property on the grounds
of such complaint, and the Seller shall reimburse to the Purchaser and
Content Technologies Limited any rent paid in accordance with paragraph 2.4
by the Purchaser and Content Technologies Limited in advance for the period
after the Purchaser and Content Technologies Limited has vacated the BUK
Underlease Property.
2.7 The Purchaser's and Content Technologies Limited's licence to occupy the
BUK Underlease Property shall automatically expire six months less one day
after the date on which the Purchaser and Content Technologies Limited are
first allowed into occupation as aforesaid, at which time the Purchaser and
Content Technologies Limited shall immediately vacate the BUK Underlease
Property if for any reason the BUK Underlease has not by that time been
granted.
3. Completion
-141-
3.1 The BUK Underlease is to be completed at Completion unless the Court Order
or the Consent to the grant of the BUK Underlease has not been obtained in
which case the date for completion of the BUK Underlease is to be postponed
until five working days after the Seller gives written notice to the
Purchaser and Content Technologies Limited that the Consent or the Court
Order (as appropriate) has been obtained.
3.2 The Seller is to engross the BUK Underlease and a counterpart of it and it
is to send the counterpart to the Purchaser at least five working days
before the completion date referred to in paragraph 3.1.
3.3 The Seller is to execute the BUK Underlease and to deliver it to the
Purchaser on completion of it, and the Purchaser and if appropriate Content
Technologies Limited is to execute the counterpart of it and deliver it to
the Seller on Completion.
-142-
Schedule 12
Employees
Name Name Name Name
--------------------------------------------------------------------------------------------
Abery, Xxxxxxx Xxxxxxxx, Xxxxxx XxXxxxxx, Xxxxxxxx Xxxxxxxxx, Xxxx
--------------------------------------------------------------------------------------------
Alpe (2), Xxxxx Xxxxxx, Xxxxx Xxxxxxxxxxx, Xxxx Xxxxxx, Xxxxx
--------------------------------------------------------------------------------------------
Xxxxxx, Xxxx Gascoigne, Xxxx Xxxxx, Xxxxx Xxxxxxxxx, Xxxxxxx
--------------------------------------------------------------------------------------------
Xxxxxx, Xxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxxxx Xxxxxxxx, Xxxxx
--------------------------------------------------------------------------------------------
Backwell, Xxxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxxxxx Xxxx, Xxxxxxx
--------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxxxxxxx Xxxxxxxx, Xxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxx
--------------------------------------------------------------------------------------------
Xxxxx, Xxxxxx Xxxxxxx, Xxx Xxxxxxx, Xxx Xxxx, Xxxxxx
--------------------------------------------------------------------------------------------
Bellingham, Xxxxxxxxxxx Xxxxxx, Xxxxxx X'Xxxxxx, Xxxxxxx Xxxxxx, Xxxxxxx (Mime)
--------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxx Xxxxxx, Xxxxxx Xxxxxx, Xxxxxxx Xxxxx, Xxxxxxx
--------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxxxx Hockey, Xxxx Xxxxxxx, Xxxxxxxx Xxxxxxxx, Xxxxxxxx
--------------------------------------------------------------------------------------------
Berlin, Xxxxxxx Xxxxxxx, Xxxxxxxx Xxxxxxxx, Xxxx Xxxxx, Xxxx
--------------------------------------------------------------------------------------------
Xxxxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxx, Xxxx Xxxx, Xxx
--------------------------------------------------------------------------------------------
Bosson, Xxxxxx Xxxxxx, Xxxxxxx Xxxxx, Xxxx Xxxx, Xxxxx
--------------------------------------------------------------------------------------------
Xxxxxx, Xxxxx Xxxx, Xxxxx Xxxxx, Xxxxx Xxxxx, Xxxxx
--------------------------------------------------------------------------------------------
Xxxxxx, Xxxxx Xxxxxx, Xxxxxxx Xxxxxxx, Xxxxxx Xxxx, Xxxxx
--------------------------------------------------------------------------------------------
Xxxxxxx, Xxxx Xxxxxx, Xxxxx Xxxxxxx, Nigel
--------------------------------------------------------------------------------------------
Caborn, Xxxxxx Xxxxxx, Xxxxxx Xxxxxxx, Xxxx
--------------------------------------------------------------------------------------------
Xxxxxx, Xxxxx Xxxxxx (2), Xxxxx Xxxxxxxx, Xxxxxxxxxxx
--------------------------------------------------------------------------------------------
Clibbon, Xxxxxx Xxxxx, Xxxxxxx Xxxxxxx, Xxxxxxxx
--------------------------------------------------------------------------------------------
Xxxxxx, Xxxx Xxxxx, Xxxxxx Xxxxxx, Xxxxx
--------------------------------------------------------------------------------------------
Xxxx, Xxxx Xxxxxxx, Xxxxxx Xxxxxx, Xxxxxxx
--------------------------------------------------------------------------------------------
Cotton, Xxxxxx Xxxx, Xxxxx Xxxxxx (2), Xxxxx
--------------------------------------------------------------------------------------------
Cox, Xxxx Xxxx, Xxxxxx Xxxxxx, Xxxxxx
--------------------------------------------------------------------------------------------
Creteur, Erwan Klyne, Xxxxxx Xxxxx, Xxxx
--------------------------------------------------------------------------------------------
Culham, Xxxxxxx Xxx, Xxxxxxxx Seller, Xxxxxx
--------------------------------------------------------------------------------------------
Cuthbert (2), Xxxxx Xxxxx, Xxxx Xxxxx, Xxxx
--------------------------------------------------------------------------------------------
Xxxxx, Xxxxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxxx
--------------------------------------------------------------------------------------------
Xxxxxx (2), Xxx Xxxxxxxxx, Xxxxx Xxxxx, Xxxxxxxx
--------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxxx Xxxxxx, Xxxxxx Smiles, Xxxxx
--------------------------------------------------------------------------------------------
Xxxx, Xxxxxx Xxxxxxxxx, Xxxxxx Xxxxx Xxxxxxx
--------------------------------------------------------------------------------------------
Doukhota, Xxxxxx Xxxxx, Xxxx Xxxxx, Xxxxxxx
--------------------------------------------------------------------------------------------
Duly, Xxxxxx Xxxxxxxx, Xxxxxxx Xxxx, Xxxxxx
--------------------------------------------------------------------------------------------
Xxxx, Xxxx Xxxxxxxx, Xxxxx Xxxxxx, Xxxxxxx
--------------------------------------------------------------------------------------------
Elrington, Xxxxxxx XxXxxxxx, Xxxxxx Xxxxxx, Xxxxx
--------------------------------------------------------------------------------------------
Everest, Xxxxxxx XxXxxxxxx, Xxxx Xxxxxx, Xxxxx
--------------------------------------------------------------------------------------------
-143-
Schedule 13
BTA Agreement
This Agreement is made day of 2002
------ -----------------
Between
(1) Baltimore Technologies (Australasia) Pty Ltd (a company incorporated in
Australia) whose registered office is at [ ] ("BTA"); and
--------------
(2) Content Technologies (Asia/Pacific) Pty Ltd (a company incorporated in
Australia) whose registered office is at Xxxxx 0, Xxxxxxxx X, 00 Xxxxxxxx
Xxxxxx, Xxxxxxx, Xxx Xxxxx Xxxxx, Xxxxxxxxx ("CTAP").
Whereas
(A) BTA has entered into certain contracts the details of which are set out in
Schedule 1 (the "Contracts").
(B) BTA wishes to assign the benefit of such Contracts and all rights relating
thereto.
Now it is Agreed as follows:
1. Contracts
1.1 In consideration of AUS$1 paid by CTAP to BTA (the receipt of which is
hereby acknowledged) BTA hereby assigns to CTAP all of its rights,
benefits, obligations and interest under the Contracts to CTAP.
1.2 If any consent of any third party is required before the benefit of any of
the Contract can be assigned by BTA to CTAP pursuant to clause 1.1 then:
(a) this agreement shall not constitute an assignment or attempted
assignment of such contract but BTA shall hold the benefit of the same
on trust for CTAP absolutely and CTAP shall as BTA's sub contractor
perform at its cost, all obligations of BTA in relation to such Asset;
(b) BTA shall do all such other acts and things as CTAP may reasonably
request to provide CTAP with the benefit of such contract and to
enforce such contracts against any counterparty.
2. Further Assurances
2.1 At all times after the date of this Agreement, BTA shall (at its own cost)
on being required to do so by CTAP, execute or, so far as each is able,
procure that any necessary third party shall execute such documents and/or
do or, so far as each is able, procure the doing of such acts
-144-
and things as the party concerned may reasonably require for the purpose of
giving to CTAP the full benefit of the Contracts.
3. Governing Law
3.1 This Agreement is governed by and shall be construed in accordance with the
law of New South Wales.
3.2 If any party has a claim against another party arising out of or in
connection with this Agreement such claim shall be referred to the Courts
of New South Wales, to the jurisdiction of which each of the parties to
this Agreement irrevocably submits.
In Witness whereof this Agreement has been entered into as a Deed on the date
above written.
Executed and delivered as a Deed by Baltimore )
Technologies (Australasia) Pty Ltd )
Executed and delivered as a Deed by Content )
Technologies (Asia/Pacific) Pty Ltd )
Schedule 1
1. Company Name
Chass Computer Consultants (M) Snd Bhd
Contract
Authorised Reseller Agreement
Location
Malaysia
Date Signed
07/10/2001
Description
Agreement for the resale of Content's products in Malaysia
2. Company Name
Chass Computer Consultants (M) Snd Bhd
Contract
Authorised Reseller Software Support Agreement
-145-
Location
Malaysia
Date Signed
14/10/2001
Description
Agreement for the provision of support products sold via partner
3. Company Name
Chass Computer Consultants Pte Ltd
Contract
Authorised Reseller Agreement
Location
Singapore
Date Signed
17/10/2001
Description
Agreement for the resale of Content's products in Singapore
4. Company Name
Chass Computer Consultants Pte Ltd
Contract
Authorised Reseller Agreement
Location
Singapore
Date Signed
17/10/2001
Description
Agreement for the provision of support products sold via partner
-146-
Schedule 14
Excluded Assets
All:
(a) cash in hand or bank;
(b) the repayment of Tax due in respect of the carry back of losses
arising in the accounting period of Content Technologies Limited ended
31 October 2000 against profits arising in the accounting period ended
31 October 1999 of Content Technologies Limited (the "Repayment");
(c) the benefit of any insurance or insurance claim attributable to any
event occurring before the close of business on the Completion Date
which does not relate to the Assets or to the liabilities to be
assumed by the Purchaser under this Agreement;
(d) the right (which is expressly reserved to the Seller and its assigns)
to use the name "Baltimore".
-147-
Schedule 15
Deed of Covenant
Form of deed of covenant
This Deed of Covenant is made the day of 2002
----------- ----------
Between:
(1) Baltimore Technologies plc a company incorporated in England and Wales
(registered number 2643615) whose registered office is at 1310 Xxxxxxxxx,
Xxxxxxxxx Xxxxxxxx Xxxx, Xxxxxx, Xxxxxxxxx XX0 0XX (the "Covenantor");
(2) Content Technologies Holdings Limited a company incorporated in England and
Wales (registered number 3498084) whose registered office is at 1310
Xxxxxxxxx, Xxxxxxxxx Xxxxxxxx Xxxx, Xxxxxx, Xxxxxxxxx XX0 0XX (the
"Company");
(3) The Companies whose names and addresses are set out in Schedule II
(individually a "Subsidiary Undertaking" and collectively the "Subsidiary
Undertakings"); and
(4) Clearswift Limited a company registered in England and Wales (registered
number 1607372), whose registered office is at Bessemar House, Bessemar
Road, Welwyn Garden City, Hertfordshire AL7 1HH (the "Purchaser").
Whereas:
Pursuant to the provisions of an Agreement dated today between the Covenantor
and the Purchaser, (the "Master Agreement") the Purchaser has agreed to acquire
the entire issued share capital of the Company and the Assets and Business (as
defined in the Master Agreement) and the Covenantor (on its own behalf and on
behalf of each member of the Seller's Group) has agreed to enter into this Deed.
Operative terms:
1. Interpretation
1.1 In this Deed unless the context or subject matter otherwise requires,
expressions defined in the Master Agreement shall have the same meanings
and in addition the following expressions shall have the following
meanings:
"Approved Agreements" means any reseller agreement pursuant to which the
Covenantor and/or members of the Sellers Group have been appointed to
resell goods, in substantially the same form as they were when purchased,
to other authorised resellers, users or customers.
-148-
"Business" means the business of developing (either generally or on a
bespoke basis), selling (either directly or through distribution
relationships) and maintaining software and services (technical, consulting
and training) that principally provide policy-based secure content
management as carried on by BUK as at the Completion Date and which is
currently known as the Content Security Group or alternatively as Content
Technologies or alternatively as the MIMEsweeper Division;
"Restricted Territory" means the area comprising the United Kingdom, United
States of America, Japan, Australia, Germany, France, Denmark, the
Netherlands, Norway, Canada, Italy, Spain, Belgium, Sweden, Finland, Hong
Kong, Singapore and Taiwan and all other countries in the world; and
"Restricted Period" in a period of twenty months from the Completion Date.
1.2 The provisions of clauses 1.2 to 1.4 (inclusive) of the Master Agreement
shall apply in this Deed (with the necessary modifications) as if repeated
in this Deed and set out in full herein.
2. Covenants
2.1 Subject to clause 2.2, the Covenantor hereby undertakes to the Company, the
Purchaser and each of the Subsidiary Undertakings that it will not, and
that no member of the Seller's Group shall, either alone or jointly with
others, whether as principal, agent, manager, shareholder, independent
contractor or in any other capacity, directly or indirectly through any
other person, for his own benefit or that of others:
(a) at any time during the Restricted Period engage in or carry on or be
concerned or interested in any Restricted Business within the
Restricted Area in competition with the Company and/or any of the
Subsidiary Undertakings (other than as a holder for investment of no
more than 5 per cent of any class of shares or securities dealt in on
a recognised stock exchange); or
(b) at any time during the Restricted Period canvass or solicit or accept
orders for the supply of any goods or services substantially similar
to or otherwise competing with those supplied in the normal course of
the Restricted Business from any person who has been a customer of the
Company and/or any of the Subsidiary Undertakings or BUK (in relation
to the Business only) during the 12 months preceding the Completion
Date, or induce or seek to induce any such person to cease being a
customer of the Company and/or any of the Subsidiary Undertakings; or
(c) at any time during the Restricted Period do anything knowingly to
assist any competitor of the Company and/or any of the Subsidiary
Undertakings in any material way in carrying on or developing any
Restricted Business in the Restricted Area; or
-149-
(d) at any time after Completion solicit or entice away or knowingly
encourage any employee of the Company earning in excess of
(pound)50,000 and/or any of the Subsidiary Undertakings (an
"Employee") to leave the employment of the Company and/or any of the
Subsidiary Undertakings (as the case may be), whether or not such
Employee would by reason of so leaving commit a breach of his contract
of employment; or
(e) at any time after Completion use the name "Content Technologies
Holdings Limited" or any name which in the reasonable opinion of the
Purchaser is capable of confusion therewith, whether by using such
name as part of a corporate name, trade or business name or otherwise;
or
(f) at any time after Completion represent itself or permit itself to be
held out as being in any way connected with or interested in the
business of the Company and/or any of the Subsidiary Undertakings.
2.2 Notwithstanding the covenants set out in clause 2.1, the Purchaser, the
Company and each of the Subsidiary Undertakings hereby acknowledge that the
Covenantor and members of the Seller's Group in pursuit of their respective
businesses may enter into the Approved Agreements which would cause them to
be in breach of the covenants contained in clauses 2.1 (a), (b) and (c). In
the case of the Approved Agreements, the Purchaser, Company and each
Subsidiary Undertaking hereby agrees that the entering into and performance
by the Covenantor and members of the Sellers Group of the Approved
Agreements does not constitute a breach of this Deed or of the covenants
contained in clause 2.1(a), (b) and (c).
2.3 Each of the covenants contained in clause 2.1 is entirely separate and
severable and enforceable accordingly. Each of such covenants is considered
fair and reasonable in all the circumstances by the parties but in the
event that any such restriction shall be found to be void or ineffective
but would be valid and effective if some part thereof were deleted or the
duration or area of application reduced such restriction shall apply with
such modification as may be necessary to make it valid and effective.
3. Assignment
The benefit of any of the covenants contained in clause 2 shall be
assignable in whole or in part by the Purchaser to any transferee of all or
any of the Shares or all or any of the shares in the capital of any
Subsidiary Undertaking.
4. General Provisions
The following provisions of the Master Agreement shall apply to this Deed
as if the same had been set out herein in full save that references therein
to the Seller, its address and the
-150-
Agreement respectively shall be construed as references to the Covenantor,
its address specified in this Deed and this Deed:
(a) clause 26 Notices
(b) clause 27 Severability
(c) clause 28 Variation
(d) clause 29.2 Waiver and
(e) clause 30 Governing law.
In Witness whereof this Deed has been entered into the day and year first before
written.
EXECUTED as a deed by
Baltimore Technologies plc
acting by
--------------------------------------------
Director
--------------------------------------------
Director/Secretary
EXECUTED as a deed by
Clearswift Limited
acting by
--------------------------------------------
Director
--------------------------------------------
Director/Secretary
-151-
Schedule 16
Assignment of BUK Intellectual Property Rights
Assignment of Intellectual Property
This assignment is made 2002
---------------------------------------------------
Between:
(1) Baltimore Technologies (UK) Limited (Company number 1467493) whose
registered office is at 1310 Xxxxxxxxx, Xxxxxxxxx Xxxxxxxx Xxxx, Xxxxxx,
Xxxxxxx, XX0 0XX (the "Assignor"); and
(2) Clearswift Limited, a company registered in England and Wales (registered
number 1607372), whose registered office is at Bessemar House, Bessemar
Road, Welwyn Garden City, Hertfordshire AL7 1HH (the "Purchaser").
Recitals:
By virtue of an agreement dated 30 March 2001 between Content Technologies
Limited and the Assignor, the Assignor became entitled to certain interests in
the Intellectual Property Rights (defined below) and now, pursuant to a Master
Sale and Purchase Agreement dated (the "Master Agreement") the Assignor wishes
to assign to the Assignee all its right, title and interest in and to the
Intellectual Property Rights on the following terms.
Operative Terms
1. Definitions
In this Assignment:
1.1 Except where the context otherwise requires, the following words and
expressions shall have the following meanings:
"Business" shall have the meaning given in the Master Agreement;
"Intellectual Property" means patents (including supplementary protection
certificates and utility models), trade marks, service marks, domain names,
registered designs, utility models, design rights, topography rights,
rights in databases, copyrights, inventions, trade secrets, and other
confidential information, know-how, business or trade names, get-up, and
all other intellectual property and neighbouring rights and rights of a
similar or corresponding character in any part of the world (whether or not
the same are registered or capable of registration) and all applications
and rights to apply for or for the protection of any of the foregoing;
"Intellectual Property Rights" means:
-152-
(a) the Intellectual Property in the Products to the extent that such
Intellectual Property is owned (in whole or in part) by the Assignor;
and
(b) the Intellectual Property which or the subject matter of which is
owned and used or intended to be used by the Assignor wholly in the
carrying on of the Business or as to which the Assignor otherwise has
any rights resulting from the carrying on of the Business including
but not limited to the Intellectual Property set out in the Appendix
hereto.
"Products" means the products listed in Schedule 1 including any updates,
developments, new releases and other modifications or additions existing in
relation thereto at the date of this Assignment;
1.2 The singular includes the plural and vice versa.
2. Assignment
2.1 In consideration for the consideration set out in Schedule 3 of the Master
Agreement the Assignor hereby assigns all the Assignor's right title and
interest in and to the Intellectual Property Rights for the full terms
thereof including any extensions or renewals and including, without
limitation:
(a) the right to xxx for damages and other remedies in respect of any
infringement of the Intellectual Property Rights which may have
occurred prior to the date of this Assignment;
(b) all rights of priority (or to claim priority) attaching to the
Intellectual Property Rights; and
(c) in relation to any registered or unregistered trade marks and any
trade xxxx applications included in the Intellectual Property Rights,
all common law rights and goodwill associated with them,
to the Assignee to hold absolutely.
3. Further Assurance
3.1 The Assignor shall at the request (made at any time) and expense of the
Assignee do all acts and execute and swear all documents that are
reasonably necessary or desirable to vest absolute legal and beneficial
ownership of the Intellectual Property Rights in the Assignee (or the
Assignee's nominee), to perfect the Assignee's or the Assignee's nominee's
title to the Intellectual Property Rights anywhere in the world and to
procure the registration of the Assignee (or the Assignee's nominee) as the
registered proprietor of any registered Intellectual Property Rights
(including, without limitation, of any domain names).
-153-
4. Governing Law
4.1 This Assignment and the jurisdiction clause contained in it shall be
governed by, construed and take effect in accordance with English law.
4.2 It is agreed that the Courts of England shall have exclusive jurisdiction
to settle any claim dispute or matter of difference which may arise out of
or in connection with this assignment (including without limitation claims
for set-off or counterclaim) and the legal relationships established by
this Assignment.
5. Contracts (rights of third parties) act 1999
5.1 No person may enforce any term of this Assignment by virtue of the
Contracts (Rights of Third Parties) Xxx 0000.
-154-
Schedule 1
The Products
--------------------------------------------------------------------------------
Product or Service Version Description
--------------------------------------------------------------------------------
WEBsweeper Software used to manage and control the
content of webpages.
--------------------------------------------------------------------------------
MAILsweeper for SMTP Software used to manage and control the
content of an organisation's outgoing
and incoming emails.
--------------------------------------------------------------------------------
PORNsweeper A MAILsweeper for SMTP add-on that
identifies and manages inappropriate
images contained in JPEG and MPEG files.
--------------------------------------------------------------------------------
SECRETsweeper A MAILsweeper for SMTP add-on that
allows the content of encrypted
documents to be managed and controlled.
--------------------------------------------------------------------------------
MAILsweeper for Exchange Software used to manage and control the
2000 content of an organisation's outgoing
and incoming emails where the
organisation uses Exchange 2000 servers.
--------------------------------------------------------------------------------
MAILsweeper for Domino Software used to manage and control the
content of emails being transmitted
within an organisation.
--------------------------------------------------------------------------------
e-Sweeper A service that allows an end user to
have their email content management
functionality managed and controlled
remotely or by a third party.
--------------------------------------------------------------------------------
Maintenance and Support Maintenance and Support of our software
products,
--------------------------------------------------------------------------------
Surfcontrol/WEBsweeper A WEBsweeper add-on that allows certain
URL Blocker URLs contained in a proprietary database
to be blocked to the user.
--------------------------------------------------------------------------------
MAILsweeper for Exchange Software used to manage and control the
content of an organisation's outgoing
and incoming emails where the
organisation uses Exchange servers.
--------------------------------------------------------------------------------
MIMEsweeper for Domino
Web Module
--------------------------------------------------------------------------------
MAILsweeper Archivist End of life'd
for SMTP
--------------------------------------------------------------------------------
Preserver for Exchange End of life'd
--------------------------------------------------------------------------------
Internet Translation End of life'd
Gateway
--------------------------------------------------------------------------------
MIMEsweeper for Notes End of life'd
--------------------------------------------------------------------------------
-155-
--------------------------------------------------------------------------------
Product or Service Version Description
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MIMEsweeper for Firewall 1 End of life'd
--------------------------------------------------------------------------------
SPAMsweeper Proof of concept only (not released)
--------------------------------------------------------------------------------
Y2K Scenario End of life'd
--------------------------------------------------------------------------------
SKINS
--------------------------------------------------------------------------------
FILEsweeper Proof of concept only (not released)
--------------------------------------------------------------------------------
Certigram
--------------------------------------------------------------------------------
Certigram Toolkit
--------------------------------------------------------------------------------
and all user manuals and all other material documentation relating to the above
and all previous versions and releases of the above that are currently sold and
supported.
-156-
Appendix
6. Registered Trade Marks
----------------------------------------------------------------------------------------------------------
Registration
Xxxx Number Territory Class(es) Comments
----------------------------------------------------------------------------------------------------------
CERTIGRAM 2232331 UK 9
41
42
----------------------------------------------------------------------------------------------------------
CERTIGRAM 0000000 Xxxxx 9
----------------------------------------------------------------------------------------------------------
CERTIGRAM 00000000 Japan 41
42
----------------------------------------------------------------------------------------------------------
CERTIGRAM 757049 Madrid International/(1)/ 9
41
42
----------------------------------------------------------------------------------------------------------
CERTIGRAM 835235 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
CONTENT TECHNOLOGIES 870915 Community Xxxx 9
41
42
----------------------------------------------------------------------------------------------------------
e-SWEEPER 835228 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
e-SWEEPER 755829 Madrid International/(1)/ 9
41
42
----------------------------------------------------------------------------------------------------------
FILESWEEPER 0000000 Xxxxx 9
41
42
----------------------------------------------------------------------------------------------------------
FILESWEEPER 835229 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
HOMESWEEPER 1612266 Community Xxxx 9
41
42
----------------------------------------------------------------------------------------------------------
MAILSWEEPER 835231 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
MAILSWEEPER 641068 Community Xxxx 9
41
42
----------------------------------------------------------------------------------------------------------
MAILSWEEPER 0000000 Xxxxx 9
41
42
----------------------------------------------------------------------------------------------------------
MAILSWEEPER 2301305 United States 9
42
----------------------------------------------------------------------------------------------------------
MIMESWEEPER 2232335 UK 9
41
42
----------------------------------------------------------------------------------------------------------
-157-
----------------------------------------------------------------------------------------------------------
Registration
Xxxx Number Territory Class(es) Comments
----------------------------------------------------------------------------------------------------------
MIMESWEEPER 316109 Community Xxxx 9
41
42
----------------------------------------------------------------------------------------------------------
MIMESWEEPER 2212221 US 9
42
----------------------------------------------------------------------------------------------------------
MIMESWEEPER 835274 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
MIMESWEEPER 739414 Norway 9
41
42
----------------------------------------------------------------------------------------------------------
NEWSWEEPER 897298 Community Xxxx 9
41
42
----------------------------------------------------------------------------------------------------------
NEWSWEEPER 2232333 UK 9
41
42
----------------------------------------------------------------------------------------------------------
NEWSWEEPER 739407 Madrid International/(1)/ 9
41
42
----------------------------------------------------------------------------------------------------------
NEWSWEEPER 835232 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
NEWSWEEPER 2392808 US 9
41
42
----------------------------------------------------------------------------------------------------------
NEWSWEEPER 739407 Norway 9
41
42
----------------------------------------------------------------------------------------------------------
PORNSWEEPER 835233 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
RADAR & LOGO 1665157 Community Xxxx 9
41
42
----------------------------------------------------------------------------------------------------------
RADAR Logo 835236 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
SECRETSWEEPER 23292809 US 9
41
42
----------------------------------------------------------------------------------------------------------
SECRETSWEEPER 893420 Community Xxxx 9
41
42
----------------------------------------------------------------------------------------------------------
SECRETSWEEPER 835234 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
SECRETSWEEPER 2232326 UK 9
41
42
----------------------------------------------------------------------------------------------------------
-158-
----------------------------------------------------------------------------------------------------------
Registration
Xxxx Number Territory Class(es) Comments
----------------------------------------------------------------------------------------------------------
SECRETSWEEPER 739542 Norway 9
41
42
----------------------------------------------------------------------------------------------------------
SERVERSWEEPER 835226 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
STATIONSWEEPER 1206671 Community Xxxx 9
41
42
----------------------------------------------------------------------------------------------------------
TODAY'S DATA IS 762111 Madrid International/(2)/ 9
TOMORROW'S 42
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
WEBSWEEPER 0000000 Xxxxx 9
41
42
----------------------------------------------------------------------------------------------------------
WEBSWEEPER 2413370 US 9
42
----------------------------------------------------------------------------------------------------------
WEBSWEEPER 2232323 UK 9
41
42
----------------------------------------------------------------------------------------------------------
WEBSWEEPER 835227 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
WEBSWEEPER 495911 Community Xxxx 9
41
42
----------------------------------------------------------------------------------------------------------
WEBSWEEPER 755830 Madrid International/(1)/ 9
41
42
----------------------------------------------------------------------------------------------------------
* note this is the date on which the Company will have to produce an
Affidavit showing evidence of use of the xxxx.
Trade Xxxx Applications
----------------------------------------------------------------------------------------------------------
Application
Xxxx Number Territory Class(es) Comments
----------------------------------------------------------------------------------------------------------
CERTIGRAM 1131010 Community Xxxx 9
41
42
----------------------------------------------------------------------------------------------------------
CERTIGRAM 75/813210 United States 9 Abandoned
41
42
----------------------------------------------------------------------------------------------------------
CONTENT & LOGO 835224 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
CONTENT and Logo 0000-00000 Xxxxx 9
41
42
----------------------------------------------------------------------------------------------------------
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----------------------------------------------------------------------------------------------------------
Application
Xxxx Number Territory Class(es) Comments
----------------------------------------------------------------------------------------------------------
CONTENT TECHNOLOGIES 0000-00000 Xxxxx 41
& Logo
----------------------------------------------------------------------------------------------------------
CONTENT TECHNOLOGIES 75/491668 US 9 Either abandoned or refused
----------------------------------------------------------------------------------------------------------
e-SWEEPER 1629187 Community Xxxx 41
----------------------------------------------------------------------------------------------------------
e-SWEEPER 2232332 UK 9
41
42
----------------------------------------------------------------------------------------------------------
e-SWEEPER 76/141419 USA 9
41
42
----------------------------------------------------------------------------------------------------------
e-SWEEPER 2000-112207 Japan 9
41
42
----------------------------------------------------------------------------------------------------------
FILESWEEPER 1206697 Community Xxxx 9 Refused
41
42
----------------------------------------------------------------------------------------------------------
FILESWEEPER 2232322 UK 9
41
42
----------------------------------------------------------------------------------------------------------
FILESWEEPER 75/845579 United States 9 Abandoned
(originally 41
75/845579) 42
----------------------------------------------------------------------------------------------------------
HOMESWEEPER 2000-112207 Japan 9
41
42
----------------------------------------------------------------------------------------------------------
HOMESWEEPER 76/141864 USA 9
41
42
----------------------------------------------------------------------------------------------------------
HOMESWEEPER 835230 Australia 9
41
42
----------------------------------------------------------------------------------------------------------
MAILPRESERVER 2245303 UK 9
42
----------------------------------------------------------------------------------------------------------
MAILPRESERVER 868774 Australia 9
42
----------------------------------------------------------------------------------------------------------
MAILPRESERVER 2117919 Community Xxxx 9
42
----------------------------------------------------------------------------------------------------------
MAILPRESERVER [762109] Madrid International/(2)/ 9
42
----------------------------------------------------------------------------------------------------------
MAILPRESERVER 633810 New Zealand 9
----------------------------------------------------------------------------------------------------------
MAILPRESERVER 633811 New Zealand 42
----------------------------------------------------------------------------------------------------------
MAILPRESERVER 76/222763 US 9
42
----------------------------------------------------------------------------------------------------------
MAILSWEEPER 2232336 UK 9
41
42
----------------------------------------------------------------------------------------------------------
MAILSWEEPER 737990 Madrid International/(1)/ 9
41
42
----------------------------------------------------------------------------------------------------------
MAILSWEEPER 1612274 Community Xxxx 9 Withdrawn
----------------------------------------------------------------------------------------------------------
-160-
----------------------------------------------------------------------------------------------------------
Application
Xxxx Number Territory Class(es) Comments
----------------------------------------------------------------------------------------------------------
Archivist for SMTP 41
42
----------------------------------------------------------------------------------------------------------
MIMESWEEPER 0000000 Xxxxx 9
41
42
----------------------------------------------------------------------------------------------------------
MIMESWEEPER 739414 Madrid International/(1)/ 9
41
42
----------------------------------------------------------------------------------------------------------
NEWSWEEPER 0000000 Xxxxx 9
41
42
----------------------------------------------------------------------------------------------------------
PORNSWEEPER 2232330 UK 9
41
42
----------------------------------------------------------------------------------------------------------
PORNSWEEPER 76/142190 USA 9
41
42
----------------------------------------------------------------------------------------------------------
PORNSWEEPER 1612316 Community Xxxx 9
41
42
----------------------------------------------------------------------------------------------------------
PORNSWEEPER 2000-112208 Japan 9
41
42
----------------------------------------------------------------------------------------------------------
RADAR Logo 76/142204 USA 9
41
42
----------------------------------------------------------------------------------------------------------
RADAR Logo 2000-112210 Japan 9
41
42
----------------------------------------------------------------------------------------------------------
SECRETSWEEPER 0000000 Xxxxx 9
41
42
----------------------------------------------------------------------------------------------------------
SECRETSWEEPER 739542 Madrid International/(1)/ 9
41
42
----------------------------------------------------------------------------------------------------------
SERVERSWEEPER 76/76/141259 USA 9
41
42
----------------------------------------------------------------------------------------------------------
SERVERSWEEPER 2000-112211 Japan 9
41
42
----------------------------------------------------------------------------------------------------------
SERVER SWEEPER 1612282 Community Xxxx 9
41
42
----------------------------------------------------------------------------------------------------------
SPAM SWEEPER 00-00000 Xxxxx 9 Refused
41
42
----------------------------------------------------------------------------------------------------------
SPAM SWEEPER 75/705916 US 9 Abandoned
41
42
----------------------------------------------------------------------------------------------------------
TODAY'S DATA IS 868771 Australia 9
TOMORROW'S 42
----------------------------------------------------------------------------------------------------------
-161-
----------------------------------------------------------------------------------------------------------
Application
Xxxx Number Territory Class(es) Comments
----------------------------------------------------------------------------------------------------------
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
TODAY'S DATA IS 2117711 Community Xxxx 9
TOMORROW'S 42
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
TODAY'S DATA IS 633812 New Zealand 9
TOMORROW'S
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
TODAY'S DATA IS 633813 New Zealand 42
TOMORROW'S
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
TODAY'S INFORMATION 2245308 UK 9
IS TOMORROW'S 42
KNOWLEDGE/ TODAY'S
DATA IS TOMORROW'S
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
TODAY'S INFORMATION 868770 Australia 9
IS TOMORROW'S 42
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
TODAY'S INFORMATION 2118297 Community Xxxx 9
IS TOMORROW'S 42
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
TODAY'S INFORMATION [762110] Madrid International/(2)/ 9
IS TOMORROW'S 42
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
TODAY'S DATA IS 633814 New Zealand 9
TOMORROW'S
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
TODAY'S DATA IS 633815 New Zealand 42
TOMORROW'S
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
TODAY'S DATA IS 76/333619 US 9
TOMORROW'S 42
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
TODAY'S INFORMATION 76/222486 US 9
IS TOMORROW'S 42
KNOWLEDGE
----------------------------------------------------------------------------------------------------------
/(1)/ Denotes International Registration designated in the United Kingdom (base
registration), Switzerland, China, Czech Republic, Xxxxxxx, Xxxxxxx,
Xxxxxxxxx, Xxxxxx, Xxxxxx, Xxxxxx, Xxxxxxxx.
/(2)/ Denotes International Registrations designated in the United Kingdom (base
registration), Switzerland, Japan, Norway
-162-
IN WITNESS of which this Agreement has been executed and delivered as a deed on
the date written above. This document shall be treated as having been executed
and delivered as a deed only upon being dated.
Executed and delivered as a deed
by the Assignor acting by )
)
-------------------------------- )
Director )
)
-------------------------------- )
Director/Secretary )
Executed and delivered as a deed
by the Assignee acting by )
)
-------------------------------- )
Director )
)
-------------------------------- )
Director/Secretary )
-163-
Schedule 17
Transitional Services
1. Provision of services
Immediately with effect from Completion and subject to paragraph 5 the
Seller shall provide or procure the provision of transitional services (as
are more fully set out in paragraph 3) and IT and business separation
services (as are more fully set out in paragraphs 10 and 11) to the
Purchaser and the Group. The Seller shall not be obliged to provide any
services to the extent that it is not legally permitted to do so.
2. TSA
Commencing on the date of this Agreement both parties shall negotiate and
agree (acting at all times reasonably and in good faith) an agreement for
the provision for all the transitional services and the IT and business
separation services (the "TSA"), which shall supersede and replace these
terms. Each party shall be responsible for all its own costs relating to
such negotiation and agreement. The TSA shall include a more detailed
description of the services in question together with any applicable
service levels and other specific conditions relating to the provision
thereof and the relationship between the parties. The parties shall enter
into the TSA upon Completion. In the event that the TSA has not been agreed
by Completion, the Purchaser shall provide the services in accordance with
the terms of this Schedule pending agreement.
3. Defining the transitional services
3.1 The transitional services shall comprise the services which the Seller's
Group has provided (or procured the provision of) to the Group and the
Business in the 12 month period immediately prior to Completion including,
but not limited to, those set out in the Appendix hereto.
3.2 The services shall be provided to the locations to which such services were
supplied prior to Completion. Any change of location will be subject to the
agreement of the parties.
4. Period during which services shall be provided
4.1 The transitional and business and Information Technology separation
services shall be supplied for a minimum period of 3 months or such lesser
time as the parties agree in writing. The Purchaser may by 28 day's notice
in writing request that the Seller cease providing any particular service,
including the provision of Xxxx Xxxxxx.
4.2 The Seller shall not be obliged to provide any services after 6 months from
Completion, unless the Purchaser requests an extension of the period for
the provision of the services, of up to a maximum of 3 months. The Seller
may, on or after this date, terminate the provision of any service by
giving the Purchaser 28 days notice in writing.
-164-
5. Third party consents
5.1 Purchaser shall obtain all third party licences, consents, permissions and
other authorisations ("TPCs") required by the Purchaser in respect of the
services. The costs of all such TPCs shall be borne by the Purchaser.
5.2 Where for the provision of the services it is necessary for the Seller to
obtain amendments to existing licences or consents from a third party it
shall use reasonable endeavours to obtain such amendments on commercially
reasonable terms. The Purchaser shall indemnify the Seller's Group against
all losses, expenses and costs incurred by the Seller's Group as a result
of a breach by the Purchaser, its agents or employees, of the terms of any
licence or consent granted to the Seller in connection with the provision
of the transitional services, provided that the Seller shall have provided
the Purchaser with a full copy of such licence terms, and provided further
that the Seller's Group shall have taken all reasonable steps to mitigate
its losses.
5.3 Insofar as a third party refuses to grant the necessary TPC or is only
prepared to do so on terms that are not commercially reasonable or are
otherwise unacceptable to the parties, the parties shall use reasonable
endeavours to make alternative arrangements for the provision of the
services.
5.4 The parties shall so far as is reasonably practicable obtain such TPCs
prior to Completion to ensure continuity of service provision with effect
from Completion.
6. Charges & Costs
6.1 In consideration of the provision of the services, and the Seller obtaining
the TPC's referred to in paragraph 5.2, the Purchaser shall pay to the
Seller:
(a) (pound)25,000 per calendar month;
(b) the salary costs of Xxxx Xxxxxx; and
(c) the costs of the supply of telecoms, electricity and other utilities
comprised in the services.
6.2 All charges shall be invoiced in arrears and shall be the subject of a
valid tax invoice and shall (subject to paragraph 16.3) be payable within
30 days of the receipt of such invoice.
6.3 Any disputed invoices or parts thereof shall be subject to the dispute
escalation procedure in paragraph 14.
7. Creation of Project Teams
7.1 Immediately following the signing of this Agreement, the parties shall work
together in good faith to establish appropriate transitional services and
IT separation teams (each a "Team") for each relevant location.
-165-
7.2 The parties shall procure that each Team shall have access to such
personnel of the relevant companies and businesses as are necessary for it
to carry out its responsibilities under paragraphs 7 to 10 of this Schedule
17.
8. Appointment of Project Managers
The Seller shall nominate a team manager and the Purchaser shall nominate a
team manager for its Team.
9. Identification of relevant IT and whether or not to copy/clone
9.1 Each Team shall promptly work to identify and list the Information
Technology used at the relevant location. In particular, but without
limitation, each Team shall promptly investigate the following areas:
. Servers
. desktop PC's
. internet access
. e-mail (messaging) and office systems
. network infrastructure
. business systems
. shop floor systems
9.2 The teams shall investigate whether each item of Information Technology
identified pursuant to paragraph 9.1 is being acquired by the Purchaser
pursuant to the deal contemplated by this Agreement or is being retained by
the Seller.
10. Adoption of the IT Separation Plan
10.1 Each Team shall work to achieve a timely separation of the Information
Technology at its location.
10.2 Within 30 days of the date of this Agreement, each Team shall prepare a
separation plan and timetable following which the team managers shall agree
a common separation plan and timetable (the "Separation Plan"). Upon
agreement of the Separation Plan by both parties' team managers (such
agreement not to be unreasonably withheld, delayed or conditioned) the
parties shall in good faith implement the Separation Plan with effect from
Completion.
11. Agreed Separation Principles
The parties will work according to the following principles:
-166-
. Security: shared access to the Purchaser's Group IT systems and the
Seller's Group IT systems will be avoided wherever it is practicable.
. Business continuity: all tasks of the Separation Plan will be designed
to limit the interruption of business processes to a practicable
minimum.
. Data: All data relating exclusively to Group and the Business shall be
separated both logically and physically from any and all data relating
to the Seller's Group. All data that relates to both Group and the
Business and the Group and the Seller's Group ("Shared Data") shall be
copied and migrated onto the Purchaser's IT systems.
. Websites: The transfer of all websites and related agreements, which
are used exclusively by the Business and the Group.
12. Service Levels
The services shall be provided to any specific service levels set out in
the agreed form TSA. Where no service level is specified, the Seller shall
use reasonable endeavours to provide the levels of service which the Group
and the Business have enjoyed in relation to such equivalent services in
the 12 months prior to Completion.
13. Warranties
Each party warrants to the other that the relevant party shall provide the
services with reasonable skill and care using personnel of equivalent
qualification, training and experience as those employed in the provision
of the services prior to Completion.
14. Dispute Escalation & Resolution procedure
14.1 In the first instance any and all disputes shall be escalated to the
respective Team Managers.
14.2 If the Team Managers cannot resolve the issue within 14 days, the matter
will be escalated to the CEO of the Purchaser and equivalent director of
the Seller.
14.3 If the dispute cannot be resolved by such directors either party shall be
free to take the matter to the English Courts.
14.4 Nothing in this Schedule shall prevent either party from seeking interim or
injunctive relief in relation to any dispute regarding the subject matter
of this Schedule.
14.5 Nothing in this paragraph 14 shall prevent either party from seeking
mediation of the dispute.
15. Security & Disaster Recovery Policies
Each party will comply with the reasonable security and disaster recovery
policies of the other.
-167-
16. Change
Any change to the services provided under this Schedule shall be subject to
the agreement of both parties.
17. Confidential Information
Save as absolutely necessary for the conduct of the parties' respective
businesses, each party shall keep confidential and shall not use or
disclose information or data belonging to or concerning the other.
-168-
Appendix
The following sets out the services to be provided under this Schedule.
Section A deals with system and technical services.
Sections B and C deal with access to personnel and to historical records, for
the provision of the services in each and any of the Locations to be agreed.
A. Systems
1. The services and facilities to be supplied are as follows:
(a) The continued supply of utility services such as electricity and water
supply to the premises.
(b) The continued use of the internal and external systems securing the
premises.
(c) The continued use, supply and support of telecommunications
infrastructure.
(d) The continued use and supply of the Baltimore PSTN, fax, telecoms,
dial up, broadband, internet and firewall services.
(e) The continued use of the relevant desktop operating system software,
Microsoft Office and back office applications. (To be limited to an
agreed number of licensed copies, to be agreed.)
(f) Such digital certification as is necessary for the continued use of
the Cisco Systems VPN remote dial-in facility.
(g) Permission to use the Baltimore Digital Certificates subject to the
terms relating to and controlling use by the Group of the Seller's
trade marks under the Master Sale and Purchase Agreement while able to
do so under the regulatory or other third party rules pertaining to
such certificates.
(h) Access to and use of such terminals and/or hardware as are necessary
in order to operate and/or use the SAP system, the general ledger
system, payroll, payment processing, purchase order processing and the
Hyperion Pillar and Enterprise systems in the continued operation of
the Group's business (including memory and data storage functionality
and to include any and all system linkages between the locations).
(i) Access to the Ravelin servers and any Data and Business Data stored
thereon until the Seller upgrades the relevant server equipment to
alternative hardware, or this service is terminated in accordance with
this Schedule;
(j) Delivery services in relation to CD shipments, the extent of which is
to be agreed.
-169-
(k) Continued use of the Baltimore NT domain, subject to security
protocols to be agreed.
(l) Such management reports as are reasonably required in relation to
information reasonably required for the safe and efficient running of
the business, and in relation to compliance with relevant legal or
regulatory requirements.
(m) Suitable functionality to support forwarding of electronic mail for
employees currently directed to "xxxxxxxxx.xxx" or other affiliated
"baltimore" domains, to such email addresses as designated by the
Purchaser.
B. Records
1. The Seller shall permit stipulated representatives, to be agreed, access to
Data or Business Data held by the Seller's Group, provided always;
(a) that access to such Data or Business Data shall be limited to such
Data or Business Data as were compiled, established or collected prior
to Completion insofar as such Data or Business Data is not transferred
to the Purchaser or to the Group under the Master Sale and Purchase
Agreement.
(b) that access to such Data or Business Data shall be limited to Data or
Business Data necessary to the services, or to the reduction of the
Group's dependency on the services.
C. Personnel
1. Provided always that any assistance provided in performing the services
shall be subject to reasonable commitments to members of the Seller's
Group, and to any absence from the offices of the Seller's Group for
vacation or medical reasons, the Seller shall procure that certain of its
staff shall be available to provide reasonable assistance;
(a) in resolving technical issues with the systems and services set out in
A.1 and A.2;
(b) in providing general advice in relation to the continuity of the
business and the transition of the business into an independent
arrangement;
(c) in relation to maintenance of databases and files and for the transfer
of such information contained therein and the transfer of knowledge
regarding the processes associated with the gathering, processing and
maintenance of such databases or files.
2. The provision of assistance by the Seller personnel set out in clause C.1
above shall be subject at all times to the following limits;
(a) The Seller's personnel will not be called upon to resolve technical or
other issues which may reasonably be resolved through customer support
functions provided to the
-170-
Group by the manufacturers or distributors of individual software
applications owned by the Group after Completion.
(b) At no time, and in no circumstances, will any member of the Seller's
Group be obliged to provide assistance to the Group or Purchaser where
to do so will provide the Group or Purchaser with a competitive market
advantage as against any member of the Seller's Group.
3. The provision of assistance as provided for in clause C.1 above shall be
provided only by current members of the Seller's Group staff including,
without limitation, Xxxx Xxxxxx, Xxxx Xxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxx,
Xxxxx Xxxxxx, Xxx Xxxxx and Xxxxx Xxxxxx, subject always to the limitations
set out in clause C.2 above.
-171-
Schedule 18
Pre-completion Undertakings
1. Pending Completion (except as required under this Agreement or with the
prior written consent of the Purchaser) BUK shall and the Seller shall
procure that each Group member shall:
1.1 not do or agree to do any of the following:
(a) resolve to change its name or to alter its Memorandum or Articles of
Association;
(b) allot or issue or agree to allot or issue any shares or any securities
or grant or agree to grant rights which confer on the holder any right
to acquire any shares or other such interest;
(c) declare, pay or make any dividend or other distribution;
(d) repay, redeem or purchase any of its share capital;
(e) reduce its share capital;
(f) resolve to be voluntarily wound up; or
(g) pass any resolution or obtain any consent from any of its members.
1.2 not do or omit to do anything that would constitute a breach of Warranty
were the Warranties to be repeated at Completion.
2. Pending Completion (except as required under this Agreement or with the
prior consent of the Purchaser) BUK shall and the Seller shall procure that
each Group member and BUK (in respect of the Business) shall:
2.1 not make any material decision concerning its business, assets or affairs
and not do or agree to do any of the following:
2.1.1 otherwise that in the ordinary course of business:
(a) incur in a single transaction any liability (whether as principal or
surety) for a principal amount which exceeds or could
exceed(pound)50,000;
(b) make any material change (including any change by the incorporation,
acquisition or disposal of a subsidiary or a business) in the nature,
extent or terms of its business;
2.1.2 create any Encumbrance over its business, undertaking or any of its
assets;
-172-
2.1.3 make any material change in the terms or conditions or employment or
engagement of any of its employees or officers;
2.1.4 enter into any material transaction with or for the benefit of any of its
directors or of any person who is connected with or any of its directors
(within the meaning of section 839 ICTA 1988):
(a) except in the usual course of its business; and
(b) on terms which are in no respect less favourable to it than normal
arm's length terms;
2.1.5 appoint new auditors;
2.1.6 fail to keep proper accounting records or to make therein true and
complete entries of all its dealings and transactions;
2.1.7 enter into any borrowing, factoring or other financing or any lending
commitments (other than use of overdraft facilities agreed before the date
of this Agreement), being in each case commitments which are outside the
ordinary course of its business;
2.1.8 dispose of or enter into any hire or hire-purchaser agreement or agreement
for payment on deferred terms (other than normal trade credit or xxxx of
sale) in respect of, or create any Encumbrance over, any of its fixed or
loose plant, machinery, furniture, fixtures, fittings, equipment and
vehicles used in connection with the business of the Group;
2.1.9 permit or allow any of its assets to be depleted by any unlawful act on
the part of any person;
2.1.10 by any act or omission contravene any applicable law, order or regulation
where such contravention would have a material and adverse effect on the
business or financial condition of the Group taken as a whole;
2.1.11 fail to keep in place its existing insurance cover;
2.1.12 fail to maintain the confidentiality of its customer and supplier
information and of its other proprietary information;
2.1.13 appoint any additional director or make any material change to the terms
and conditions of the workforce of any Group member or BUK in respect of
the Business; and
2.1.14 make any change in the practice for paying creditors or collecting the
debtors of the Group or of BUK in respect of the Business.
-173-
Schedule 19
Call Option and Put Option Notices
Part A
Exercise Notice - Call Option
Baltimore Technologies (UK) Limited
1310 Xxxxxxxxx
Xxxxxxxxx Xxxxxxxx Xxxx
Xxxxxx
Xxxxxxx
Xxxxxxxxx
XX0 0XX
[Date]
Dear Sir(s)
We refer to the agreement between us and Baltimore Technologies plc dated
January 2002 under which, inter alia, a put and call option was
---------
granted to us in relation to the Business and Assets owned by you. Words and
expressions defined in the Master Agreement have the same meaning in this
notice.
We hereby give you notice of the exercise of the Call Option and accordingly we
require you to sell the Business and Assets to us on the terms set out in the
Master Agreement.
Yours faithfully
-----------------------------------
for and on behalf of
Clearswift Limited
-174-
Part B
Exercise Notice - Put Option
[To be printed on Baltimore Technologies (UK) Limited letterhead]
Clearswift Limited
Xxxxxxxx Xxxxx
Xxxxxxxx Xxxx
Xxxxxx Xxxxxx Xxxx
Xxxxxxxxxxxxx XX0 0XX
[Date]
Dear Sir(s)
We refer to the agreement between us and Baltimore Technologies plc dated
January 2002 under which, inter alia, a put and call option was
---------
granted in relation to the Business and Assets owned by us (the "Master
Agreement"). Words and expressions defined in the Master Agreement have the same
meaning in this notice.
I hereby give you notice of the exercise of the Put Option and accordingly I
require you to purchase the Business and Assets on the terms set out in the
Master Agreement.
Yours faithfully
-----------------------------------
for and on behalf of
Baltimore Technologies (UK) Limited
-175-
Schedule 20
Certigram Licence
Technology and trade xxxx Licence Agreement
This agreement is made 2002
-------------
Between:
(1) Content Technologies Limited a company incorporated in England and Wales
(registered number 03367495) whose registered office is at 0000 Xxxxxxxxx,
Xxxxxxxxx Business Park, Theale, Xxxxxxx, Xxxxxxxxx, XX0 0XX (the
"Company"); and
(2) Baltimore Technologies plc a company incorporated in England and Wales
(registered number 2643615) whose registered office is at 0000 Xxxxxxxxx,
Xxxxxxxxx Business Park, Theale, Xxxxxxx, Xxxxxxxxx, XX0 0XX (the
"Licensee").
Whereas:
(A) Pursuant to Heads of Agreement dated 16 April 1999 (the "Heads of
Agreement"), a copy of which forms Schedule 1 hereto, the Company is the
licensee of patents owned by Abathorn (as detailed in the Heads of
Agreement).
(B) The Company further owns rights in certain technology, known as Certigram,
which involves the packaging and encoding of data, and which is based upon
the patents owned by Abathorn.
(C) The Licensee wants to use, develop and exploit this technology and the
Company has agreed to licence the technology to the Licensee on the terms
set out herein.
It is Agreed:
1. Definitions
1.1 In this Agreement, unless the context otherwise requires, the following
expressions have the following meanings:
"Abathorn" means Abathorn Limited, a company incorporated in England and
Wales (registered number SC144312) whose registered office is at Xxxxxxx
Xxxx Xxxxx, 00 Xxxxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxx, XX0 0XX;
"Abathorn Patents" means the patents detailed in the Heads of Agreement;
"Agreement" means this agreement and the Schedules hereto which form an
integral part of this agreement;
"Business Day" means a day (other than a Saturday or Sunday) on which banks
in the City of London are generally open for business;
"Certigram Trade Marks" means all rights owned by the Company in the trade
xxxx "CERTIGRAM", whether registered or unregistered anywhere in the world,
and including without limitation, the trade xxxx registrations and
applications in Schedule 2;
"Commencement Date" means the date hereof;
-176-
"Data" means all the data resulting from or arising in connection with the
development and use of the Technology which is held by the Company at the
date hereof;
"Documentation" means all user documentation, all other materials and
information in whatever form (including electronic) relating to the
Technology in the possession of the Company at the date hereof ;
"Group Companies" means, in respect of each party, any undertaking which
is, on or after the date of this Agreement, from time to time a subsidiary
undertaking of that party, a parent undertaking of that party or a
subsidiary undertaking of a parent undertaking of that party, as those
terms are construed in accordance with section 258 of the U.K. Companies
Xxx 0000;
"Improvement(s)" means any improvement, enhancement or modification to, or
new invention, design or process in connection with the Technology;
"Intellectual Property Rights" means any trade marks, brands, logos,
know-how, rights in designs, utility models, copyrights, rights relating to
trade secrets or confidentiality, patents, inventions, rights in computer
software, moral rights, (whether or not any of these are registered, and
including any application for their registration) and rights to apply for
protection in respect of any of the foregoing rights;
"Net Sales Revenue" means the actual income received by the Licensee for
the Product and user licences prior to expenses and UK taxes;
"Product(s)" means any software, hardware and firmware products developed
by the Licensee falling within the scope of or derived from the Technology;
"Quarterly Period" means the period of three months commencing on 1
January, 1 April, 1 July and 1 October;
"Royalty Rate" means 2 1/2% of the Net Sales Revenue of each Product sold
by the Licensee in Europe and the UK, and 1% in the rest of the world;
"Technology" means those aspects of the technology known as Certigram,
including the products Certigram and Certigram Toolkit, in which the
Intellectual Property Rights are owned by the Company at the date hereof,
more particularly described in Schedule 3, including the Data, and all and
software relating thereto;
1.2 In this Agreement, unless the context otherwise requires:
(a) References to schedules, clauses or appendices in this Agreement are
references to schedules, clauses or appendices of this Agreement.
(b) Words denoting the singular number only shall include the plural
number also and vice versa;
(c) Words denoting persons only shall include corporations, partnerships
and unincorporated associations;
(d) References to any party hereto shall, where relevant, be deemed to be
references to or to include, as appropriate, their respective
successors or permitted assigns;
(e) Headings have been included for convenience only and shall not be used
in construing any provision herein.
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2. Licence Granted
2.1 Subject to clause 2.5, the Company hereby grants to Licensee and its Group
Companies an exclusive, perpetual, world-wide licence to:
(a) use, copy, modify, develop, create derivative works and otherwise
exploit the Technology and the Documentation (and the Intellectual
Property Rights owned by the Company relating to the Technology and
Documentation);
(b) translate, reverse engineer, de-compile and disassemble the Technology
or any part thereof;
(c) develop, manufacture, sell and distribute Products using the
Technology; and
(d) use the Certigram Trade Marks in connection with any of the above
activities, including the sale and distribution of the Products;
subject to the terms of this Agreement.
2.2 The Licensee may grant sub-licences under this Agreement.
2.3 No further right or licence is granted by the Company by this Agreement
save as expressly set out in this clause.
2.4 Insofar as it is able to do so, the Company hereby grants Licensee a
sub-licence of the Abathorn Patents (on and subject to the same terms and
conditions as the head licence to the Company comprised in the Heads of
Agreement). The Company gives no warranty or representation that it is able
to grant such a sub-licence and insofar as it cannot do so, Licensee shall
be solely responsible for obtaining such licences as may be necessary from
Abathorn to exploit the Technology without infringing the Abathorn Patents.
2.5 The Licensee acknowledges that under the Heads of Agreement the Company
will provide the Technology to Abathorn for Abathorn to use, and has
granted Abathorn the right to use the Certigram Trade Marks in its business
activities.
3. Royalties
3.1 In consideration of the rights granted hereunder, Licensee shall pay to the
Company royalty fees calculated at the Royalty Rate ("Royalties") and
payable in accordance with the provisions of this clause 3, in respect of
each Product sold or licensed.
3.2 Royalties payable under this Agreement:
(a) are exclusive of any value added (or like) tax which may be payable on
them and shall be paid gross without deduction of any withholding or
other income taxes and if subject to withholding or other income taxes
Licensee shall ensure that such sum is paid to the Company or shall,
after deduction of such withholding or other income tax, be equivalent
to the royalties otherwise payable under the Agreement;
(b) shall be paid in sterling within 30 days of the end of each successive
Quarterly Period, to the extent that Licensee has received any Net
Sales Revenue.
3.3 In the event of any delay in effecting payments due under this Agreement by
the due date Licensee, save where such payments are disputed in good faith,
shall pay to the Company interest (calculated on a daily basis) on the
overdue payment from the date such payment was due to the date of actual
payment at a rate of 2% over the base lending rate of Barclays Bank from
time to time.
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3.4 At the same time as payment of Royalties falls due Licensee shall submit or
cause to be submitted to the Company a statement in writing recording the
calculation of such Royalties payable and in particular:
(a) the number of Products which have been supplied during the previous
quarter;
(b) the Net Sales Revenue of each Product supplied during the previous
quarter;
(c) the amount of Royalties due and payable and the amount of any tax
deductible or due to be deducted from such figure.
3.5 Licensee shall keep proper records and books of account showing the
description and price of Products supplied or put into use and such records
and books shall be open to inspection and audit by the Company at quarterly
intervals, on reasonable written notice. If such inspection should reveal a
discrepancy in the Royalties paid from those payable under this Agreement,
and that discrepancy is disputed, the dispute is to be resolved by the
appointment of independent auditors, the cost of such audit to be borne
equally by the parties. Where the audit confirms a shortfall, Licensee
shall immediately make up the shortfall and reimburse the Company in
respect of any unpaid Royalties.
3.6 The level of Royalties paid by Licensee shall be reviewed quarterly and
adjusted to reflect any provision made by Licensee for bad debts or
returned goods with any adjustment being refunded to Licensee.
3.7 The Licensee shall not be obliged to pay any Royalties;
(a) if it is established that the Company has no right to sub-licence the
Abathorn Patents; or
(b) the provisions of this Licence are deemed to be void by any court,
tribunal or similar authority.
3.8 The Company shall remit all Royalties to Abathorn in discharge of its
obligations to Abathorn under the Heads of Agreement.
4. Amendment to the Heads of Agreement
4.1 The Company shall not agree to amend the Heads of Agreement without the
consent of the Licensee.
4.2 If in accordance with this clause 4 the Heads of Agreement are amended with
the result that greater Royalties are payable by the Company to Abathorn in
respect of the use by the Licensee of the rights granted under the Abathorn
Patents than are currently payable by the Licensee in accordance with this
Agreement then the Royalties shall be increased as appropriate to make up
the shortfall.
5. Marking
5.1 Licensee undertakes that all Products shall be clearly and conspicuously
marked in conformity with the following principles unless the parties
otherwise agree in writing:
(a) all Products and their labelling and packaging shall bear a copyright
notice together with a notice that the Products are manufactured under
licence from the Company; and
(b) all uses of the Certigram Trade Marks upon Products and their
labelling and packaging shall bear the symbol (R) where the Certigram
Trade Marks are registered in
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the territory for goods of the same type as the Products or the symbol
(TM) where not so registered.
6. Delivery
6.1 The Company shall deliver a copy of the Documentation to the Licensee on or
as soon as reasonably practicable after the Commencement Date. Upon request
of Licensee and subject to the parties agreement regarding the terms upon
which such assistance is to be provided, the Company shall also provide
reasonable technological assistance to the Licensee for the duration of
this Licence.
7. Intellectual Property Rights
7.1 The Licensee hereby expressly acknowledges that:
(a) the Technology and all Intellectual Property Rights therein are and
shall remain the property of the Company and Abathorn; and
(b) the Abathorn Patents are and shall remain the property of Abathorn.
7.2 All trade xxxx rights deriving from use of the Certigram Trade Marks by
Licensee upon or in connection with the Products or any other merchandise
by Licensee shall accrue exclusively to the Company and Licensee shall at
the request of the Company do all that is necessary during the life of this
Agreement to vest such trade xxxx rights in the Company.
7.3 In the event that any Improvements giving rise to Intellectual Property
Rights result from the Licensee's exercise of its rights under this
Agreement the parties hereby acknowledge and agree that all Intellectual
Property Rights in such Improvements shall belong to the Licensee. The
Licensee shall then be entitled to apply for the protection of such rights
by registration (where applicable) throughout the world.
7.4 The Company shall notify the Licensee of any proceedings brought by third
parties in respect of the Technology or the Certigram Trade Marks.
7.5 The Licensee but not the Company shall have the right to institute
infringement or other appropriate legal action against alleged, prospective
or actual infringers or disclosers of the Intellectual Property Rights and
other proprietary rights in the Technology and the Certigram Trade Marks,
and shall retain all money received from such action.
7.6 The Company shall have no obligation to take any action against such
infringers of the Intellectual Property Rights in the Technology and the
Certigram Trade Marks, save that the Company, at the request of the
Licensee, shall provide the Licensee with reasonable assistance in such
proceedings, provided that the Licensee pays the Company's costs and
expenses (including any award of damages against the Company as a result of
such proceedings) on an indemnity basis.
7.7 The Company shall pay all renewal fees due for any registered trade marks
comprised in the Certigram Trade Marks subject always to the Company being
placed in funds to do so by the Licensee.
8. Indemnity
8.1 The Licensee shall at all times indemnify and keep indemnified the Company
against all or any costs, claims, damages or expenses directly incurred or
suffered by the Company with respect to any successful claim brought by:
(a) Abathorn, arising out of the use by the Licensee of the Technology;
and
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(b) end-users of Products supplied by or put into use by the Licensee;
provided that:
(c) Licensee is given control of such claim; and
(d) the Company, at the expense of Licensee, gives to Licensee all
reasonable assistance with such claim; and
(e) the Company makes no admission or otherwise prejudices Licensee's
defence or settlement of the claim.
9. Duration and termination
9.1 This Agreement shall begin on the Commencement Date and shall continue in
perpetuity unless and until terminated in accordance with the terms of this
Agreement.
9.2 Each party shall have the right to terminate this Agreement forthwith by
notice in writing to the other in the event that:
(a) The other party commits a material breach of this Agreement and such
breach:
(i) is not capable of remedy; or
(ii) if capable of remedy, has not been remedied with 30 days after
receipt by the defaulting party of notice requiring such remedy;
or
(b) the other party enters into a compulsory or voluntary liquidation
(other than for the purpose of effecting a solvent reconstruction or
amalgamation) or convenes a meeting of or enters into any composition
with its creditors or has an administrative receiver, receiver,
manager or administrator appointed over all or some of its undertaking
or assets or anything analogous to the events described above occurs
in any jurisdiction;
(c) the Licensee challenges the validity of the Abathorn Patents.
10. Consequences of Termination
10.1 In the event of termination of this Agreement howsoever arising:
(a) all outstanding sums payable by Licensee to the Company shall
immediately become due and payable;
(b) all rights and licences shall cease;
(c) Licensee shall cease all and any exploitation of the Technology;
(d) Licensee shall promptly return to the Company all Documentation,
technical and promotional material in its possession relating to the
Products and the know-how and all copies of such material to the
extent such remains confidential, and shall confirm to the Company
that it has done so; and
(e) Licensee shall have the right to dispose of the stocks of the Products
in its possession and all Products in the course of manufacture at the
date of termination provided that any royalty payable under this
Agreement shall be received within a period of 90 days following such
termination.
10.2 The termination of this Agreement shall be without prejudice to the
provisions of this clause 10 and to any rights of either party which may
have accrued by, at, or up to the date of such termination.
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11. Limitation of liability
11.1 Nothing in this Agreement shall exclude or limit any party's liability for
death or personal injury caused by negligence.
11.2 The Company shall not have the benefit of the limitation in clause 11.1 in
respect of a claim arising out of the failure of the Company to comply with
its obligations in clause 3.8 (remittance by the Company of Royalties to
Abathorn).
12. Confidential information
12.1 The parties have imparted and may from time to time impart to each other
certain confidential information ("Confidential Information") and the
parties may otherwise obtain Confidential Information concerning the
business and affairs of the other pursuant to this Agreement, including
information marked or identified by the disclosing party as confidential or
information which may be reasonably regarded as the Confidential
Information of the disclosing party. Confidential Information shall include
the Technology.
12.2 Each party agrees that it shall not disclose such Confidential Information
(except to other Group Companies and professional advisers) whether
directly or indirectly to any third party except as provided for in this
clause 12.
12.3 Nothing in this clause 12 shall prevent the Licensee from exercising its
other rights under this Agreement including, without limitation, its right
to develop and exploit the Technology.
12.4 Where disclosure to a third party is essential to allow proper performance
of a party's obligations under this Agreement, such party will prior to any
such disclosure obtain the other party's written consent to such disclosure
and obtain from such third parties binding agreements to maintain in
confidence the information to be disclosed to the same extent at least as
the parties are so bound by this Agreement.
12.5 This clause 12 shall not prevent the disclosure or use by either party of
any information which is required to be disclosed by applicable law or
regulation or order of a court of competent jurisdiction or is or hereafter
through no fault of that party becomes public knowledge.
13. Notices
13.1 Any notice required to be given by a party to another shall be sent either
by first class pre-paid post or by fax transmission to the other party at
the following address, or such other address as that party may notify to
the other in writing from time to time in accordance with this clause:
(a) Content Technologies Limited
0000 Xxxxxxxxx, Xxxxxxxxx Business Park, Theale, Xxxxxxx, Xxxxxxxxx,
XX0 0XX
Fax No:
For the attention of:
(b) Baltimore Technologies plc
1310 Xxxxxxxxx, Xxxxxxxxx Xxxxxxxx Xxxx, Xxxxxx, Xxxxxxx, Xxxxxxxxx,
XX0 0XX
Fax No:
For the attention of:
13.2 Any notice sent by fax shall be deemed to have been received upon receipt
by the sender of a fax transmission report (or other appropriate evidence)
that the fax has been transmitted to the addressee. Where transmission
occurs after 6.00pm on a Business Day or on a day which is
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not a Business Day, receipt shall be deemed to occur at 9.00am on the next
following Business Day.
13.3 Any notice sent by post in accordance with clause 13.1 shall be deemed to
have been received on the second Business Day after the date of posting and
if posted to an overseas address shall be deemed to have been received on
the fifth Business Day after the date of posting.
14. Force Majeure
No party shall be responsible for any failure to perform due to unforeseen
circumstances or to causes beyond the party's reasonable control, including
but not limited to acts of God, war, riot, embargoes, acts of civil or
military authorities, fire, floods, accidents, strikes, or shortages of
transportation, facilities, fuel, energy, labour or materials.
15. Assignment
The Licensee may assign its rights and obligations under this Agreement
without the prior written consent of the Company.
16. Waiver
Failure or neglect by a party to enforce at any time any of the provisions
of this Agreement shall not be construed as a waiver of any party's rights
under this Agreement nor in any way affect the validity of the whole or any
part of this Agreement nor prejudice any party's rights to take subsequent
action.
17. Severability of provisions
If any provision of this Agreement is held to be illegal, invalid or
unenforceable in whole or in part in any jurisdiction this Agreement shall
as to such jurisdiction continue to be valid as to its other provisions and
the remainder of the affected provision; and the legality, validity and
enforceability of such provision in any other jurisdiction shall be
unaffected.
18. Contracts (Rights of Third Parties) Xxx 0000
No person other than a party may enforce this Agreement by virtue of the
Contracts (Rights of Third Parties) Xxx 0000. No consent shall be required
from any person other than the parties to this Agreement to vary the terms
of the Agreement.
19. Entire Agreement
This Agreement supersedes all prior understandings and agreements between
the parties relating to the Technology and sets forth the entire agreement
between the parties with respect to the Technology. No alterations,
modifications or additions to this Agreement shall be valid unless made in
writing and signed by a duly authorised representative of each party.
20. Governing Law and Jurisdiction
This Agreement shall be governed by and construed in accordance with
English law and the parties submit to the exclusive jurisdiction of the
English courts.
EXECUTED as a deed by )
)
for and on behalf of )
Content Technologies Holdings Limited )
acting by )
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Director
Director/Secretary
EXECUTED as a deed by )
)
for and on behalf of )
Baltimore Technologies plc )
acting by )
-------------------------------
Director
-------------------------------
Director/Secretary
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Schedule 1
Heads of Agreement
between
Content Technologies Limited
And
Abathorn Limited
-185-
Schedule 2
"Certigram Trade Marks"
Registered Trade Marks
-----------------------------------------------------------------
Registration
Xxxx Number Territory Class(es) Comments
-----------------------------------------------------------------
CERTIGRAM 2232331 UK 9
41
42
-----------------------------------------------------------------
CERTIGRAM 0000000 Xxxxx 9
-----------------------------------------------------------------
CERTIGRAM 00000000 Japan 41
42
-----------------------------------------------------------------
CERTIGRAM 757049 Xxxxxx 0
Xxxxxxxxxxxxx 00
00
-----------------------------------------------------------------
CERTIGRAM 835235 Australia 9
41
42
-----------------------------------------------------------------
2. Trade Xxxx Applications
-----------------------------------------------------------------
Application
Xxxx Number Territory Class(es) Comments
-----------------------------------------------------------------
CERTIGRAM 1131010 Community Xxxx 9
41
42
-----------------------------------------------------------------
CERTIGRAM 75/813210 United States 9 Abandoned
41
42
-----------------------------------------------------------------
Schedule 3
The Technology
The Certigram technology involves the packaging of data (which could include
certificates, photographs, biometrics, and alpha data), digitally signing it
with a key, and then encoding the whole package including the signature into a
3D bar code. This bar code can then subsequently be read with a standard scanner
allowing the contents to be restored such that the signature can be verified and
the contents displayed on a console if required for, for example, the visual
verification of photos.
IN WITNESS whereof this Deed has been entered into the day and year first before
written
Executed as a Deed by )
Baltimore Technologies plc )
Acting by: )
Name
Director
Name
Director/Secretary
Executed as a Deed by )
Baltimore Technologies UK Limited )
Acting by: )
Name
Director
Name
Director/Secretary
Executed as a Deed by )
Clearswift Limited )
Acting by: )
Name
Director
Name
Director/Secretary
