ASSET PURCHASE AGREEMENT by and among beTRUSTed HOLDINGS INC. BALTIMORE TECHNOLOGIES PLC and BALTIMORE TECHNOLOGIES LIMITED dated September 19, 2003

Exhibits

Exhibit 4.10

ASSET PURCHASE AGREEMENT

by and among

beTRUSTed HOLDINGS INC.

BALTIMORE TECHNOLOGIES PLC

and

BALTIMORE TECHNOLOGIES LIMITED

dated September 19, 2003

Exhibits

TABLE OF CONTENTS

						Page
ARTICLE 1 DEFINITIONS AND CONSTRUCTION						1
		1.1		Definitions		1
		1.2		Interpretation and Construction		9
ARTICLE 2 ASSETS AND LIABILITIES						10
		2.1		Acquired Assets		10
		2.2		Excluded Assets		11
		2.3		Assumed Liabilities		12
		2.4		Excluded Liabilities		12
		2.5		Transfer Taxes		13
ARTICLE 3 CLOSING AND PURCHASE PRICE						13
		3.1		Closing		13
		3.2		Purchase Price		13
		3.3		Closing Date Deliveries of Seller		13
		3.4		Closing Date Deliveries of Buyer		14
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER						14
		4.1		Organization		14
		4.2		Authority		14
		4.3		No Conflict		15
		4.4		Consents		15
		4.5		Business Financial Statements		15
		4.6		No Changes		15
		4.7		Tax Matters		17
		4.8		Restrictions on Business Activities		18
		4.9		Title to Properties; Absence of Liens and Encumbrances; Condition of Equipment		18
		4.10		Intellectual Property		18
		4.11		No Defaults		24
		4.12		Governmental Authorization		24
		4.13		Litigation		24
		4.14		Environmental Matters		24
		4.15		Employee Matters		25
		4.16		Compliance with Laws		26
		4.17		Warranties; Indemnities		26
		4.18		Complete Copies of Materials		26
		4.19		Suppliers and Customers		26
		4.20		Sufficiency of Assets		27

Exhibits

TABLE OF CONTENTS

(Continued)

						Page
		4.21		Authority to Direct Seller Affiliates		27
		4.22		UAE Agreement. The UAE Agreement terminates on or before December 31, 2003, and the terms of exclusivity contained therein expire on such date.		27
		4.23		Representations Complete		27
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER						27
		5.1		Organization		28
		5.2		Authorization		28
		5.3		Noncontravention		28
		5.4		Consents		28
ARTICLE 6 COVENANTS AND AGREEMENTS						28
		6.1		Conduct of Seller Prior to the Closing		28
		6.2		Notice of Certain Events		30
		6.3		Circular		30
		6.4		Meeting of Shareholders; Board Recommendation		30
		6.5		No Solicitation		30
		6.6		Access to Information		32
		6.7		Confidential Information		32
		6.8		Public Disclosure		32
		6.9		Consents		32
		6.10		Reasonable Efforts		32
		6.11		Employee Matters		33
		6.12		Covenant Not to Solicit		34
		6.13		Transition		34
		6.14		Allocation of the Purchase Price		35
		6.15		Mail Handling		35
		6.16		Obligations of Seller Affiliates		35
		6.17		Additional Documents, Further Assurances and Cooperation; Power of Attorney		35
		6.18		Confidential Information known to Continuing Employees		36
		6.19		Knowledge of Buyer		36
		6.20		Books and Records		36
		6.21		Additional Payment. In the event that: (i) Buyer shall have waived, in whole or in part, the condition to Closing set forth in Section 7.2(n), (ii) the Closing shall have occurred, and (iii) a Restriction Release has not been delivered by Parent by March 31, 2004 with respect to all Restrictions, then Parent shall pay on March 31, 2004 in immediately available funds to Buyer the sum of (A) GBP                      less (B) all amounts paid or payable (under an existing claim) to Buyer pursuant to section 9.2(a)(iii). The obligations of Parent under this Section 6.21 shall not be affected by any matters disclosed to Buyer on or prior to the Closing Date.		36

Exhibits

TABLE OF CONTENTS

(Continued)

						Page
		6.22		UAE Agreement. Parent shall not extend the termination date of the UAE Agreement as it relates to the Product beyond December 31, 2003.		36
		6.23		Excluded Tangible and Other Fixed Assets. Buyer shall have the right to elect, at its sole discretion, not to have transferred to it any tangible assets related to the Business other than the Tangible and Other Fixed Assets, and shall notify Seller of its election thereof prior to the Closing Date.		36
ARTICLE 7 CONDITIONS TO THE CLOSING						37
		7.1		Conditions to Each Party’s Obligation		37
		7.2		Condition to Buyer’s Obligation		38
		7.3		Condition to Seller’s Obligation		40
ARTICLE 8 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION						41
		8.1		Survival		41
		8.2		Indemnification		41
		8.3		Limitations on Indemnification		42
		8.4		Indemnification Procedure		42
		8.5		Third Party Claims		42
ARTICLE 9 TERMINATION, AMENDMENT AND WAIVER						43
		9.1		Termination		43
		9.2		Procedure for and Effect of Termination		44
		9.3		Payment by Seller		44
		9.4		Amendment		45
		9.5		Extension; Waiver		45
ARTICLE 10 MISCELLANEOUS						45
		10.1		Notices		45
		10.2		Entire Agreement		46
		10.3		No Third Party Beneficiaries		46
		10.4		Headings		47
		10.5		Severability		47
		10.6		Governing Law		47
		10.7		Consent to Jurisdiction		47
		10.8		Waiver of Jury Trial		47
		10.9		Assignment		48
		10.10		Successors and Assigns		48

Exhibits

TABLE OF CONTENTS

(Continued)

						Page
		10.11		Counterparts		48
		10.12		Fees and Expenses		48
		10.13		Service of Process		48
		10.14		Exhibits and Schedules		48
		10.15		Other Remedies		48

EXHIBITS

		Exhibit A		Disclosure Schedule
		Exhibit B		Form of General Assignment, Assumption and Xxxx of Sale
		Exhibit C		Form of Transition Services Agreement
		Exhibit D		Form of Non-Competition Agreement
		Exhibit E		Form of Intellectual Property Transfer Agreement
		Exhibit F		UniCERT Version 5.2 Product Requirement Document

SCHEDULES

		Schedule 1.1(k)		Business Employees
		Schedule 1.1(l)		Business Financial Statements
		Schedule 1.1(u)		Consent Required Contracts
		Schedule 1.1(ss)		Key Employees
		Schedule 1.1(ggg)		Products
		Schedule 1.1(sss)		Seller Affiliates
		Schedule 1.1(yyy)		Tangible and Other Fixed Assets
		Schedule 1.1(dddd)		Transferred Contracts
		Schedule 1.1(eeee)		Transferred Intellectual Property Rights
		Schedule 1.1(ffff)		Transferred Technology
		Schedule 2.2(a)		Assets Being Excluded
		Schedule 7.2(d)		Certain Third Party Consents
		Schedule 7.2(e)		Release of Liens

Exhibits

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of September 19, 2003, by and among beTRUSTed Holdings Inc., a company existing pursuant to the laws of the United States and the State of Delaware (“Buyer”) and Baltimore Technologies plc, a corporation organized under the laws of the United Kingdom (“Parent”) and Baltimore Technologies Limited, a corporation organized under the laws of Ireland (“Seller”). Certain capitalized terms used herein shall have the meanings given to them in Article 1.

RECITALS

A. Seller is engaged in the Business (as defined in Section 1.1(i)).

B. Buyer desires to purchase from Seller Group and Seller Group desires to sell to Buyer, assets related to the Business, and Buyer desires to assume certain liabilities of Seller Group related to the Business, all in consideration of the Purchase Price and on the terms and conditions set forth herein and in the Ancillary Agreements (the “Acquisition”).

C. As a material inducement to Buyer and Seller to enter into this Agreement, Buyer and Seller shall enter into the Transition Services Agreement, in substantially the form set forth on Exhibit C and the Non-Competition Agreement, in substantially the form set forth on Exhibit D all of which shall be effective upon the Closing (as defined in Section 3.1).

D. In connection with the Acquisition, Buyer on the one hand, and Seller on the other hand, desire to make certain representations, warranties, covenants and other agreements.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and mutual promises herein made, and in consideration of the representations, warranties, covenants, conditions and other agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS AND CONSTRUCTION

1.1 Definitions. The following capitalized terms shall have the meanings set forth below:

(a) “Accounts Receivable” shall mean the accounts receivable (net of any allowance for doubtful accounts) relating to licenses and support and maintenance with respect to Products on the books of Seller as of the Closing Date, provided that such Accounts Receivable have been calculated in accordance with Seller’s past practices and shall not include receivables relating to Post-Agreement License Revenues and Post-Agreement Support Revenues.

Exhibits

(b) “Acquired Assets” shall have the meaning set forth in Section 2.1.

(c) “Acquisition” shall have the meaning set forth in the recitals.

(d) “Agreement” shall have the meaning set forth in the preamble.

(e) “Ancillary Agreements” shall mean the General Assignment, Assumption and Xxxx of Sale, the Company Non-Competition Agreement, the Sublease, and the Transition Services Agreement.

(f) “Assumed Liabilities” shall have the meaning set forth in Section 2.3.

(g) “Basket Amount” shall mean GBP 25,000.

(h) “Books and Records” shall mean all papers and records (in paper or electronic format) in Seller’s care, custody, or control relating to the Business, including all purchasing and sales records, customer and vendor lists, accounting and financial records, product documentation, product specifications, marketing requirement documents and software release orders.

(i) “Business” shall mean the Seller Group’s business of developing, marketing and selling the Products, and services and activities directly related thereto.

(j) “Business Contract” shall mean all Contracts related to the Business between Seller or any Seller Affiliate and any other party.

(k) “Business Employees” shall mean those employees of Seller or Seller Affiliates who, as of the Closing Date are, or have historically been, primarily dedicated to the Business, or other employees of Seller or Sellers Affiliates who will be offered employment by Buyer, including those employees identified on Schedule 1.1(k).

(l) “Business Financial Statements” shall mean the selected financial information included in Schedule 1.1(l).

(m) “Buyer” shall have the meaning set forth in the preamble.

(n) “Circular” shall have the meaning set forth in Section 6.3.

(o) “Closing” shall have the meaning set forth in Section 3.1.

(p) “Closing Date” shall mean the date on which the Closing occurs.

(q) “Code Offer” shall have the meaning set forth in Section 6.5(d).

(r) “Confidentiality Agreement” shall mean, collectively, the confidentiality provisions in the existing agreements between Buyer and Seller.

Exhibits

(s) “Conflict” shall have the meaning set forth in Section 4.3.

(t) “Conflicting Proposal” shall have the meaning set forth in Section 6.5(d).

(u) “Consent Required Contract” shall mean the Contracts related to the Business identified by Buyer as of the Closing Date on Schedule 1.1(u) or other Business Contracts which Buyer, in its sole discretion, has determined to include in Schedule 1.1(u) between the date hereof and the Closing Date, but which are not transferable or assignable without the consent of the other party or parties to such agreements, contracts or instruments, which consent has not been obtained as of the date of this Agreement or the Closing, as applicable.

(v) “Constating Documents” shall have the meaning set forth in Section 4.1.

(w) “Continuing Employees” shall mean the Business Employees who become employees of Buyer by the execution of and pursuant to the terms of an Offer Letter.

(x) “Contract” shall mean any agreement, contract, indenture, instrument, guarantee or other similar agreement.

(y) “Contractors” shall have the meaning set forth in Section 4.15(h).

(z) “Copyrights” shall mean all copyrights, copyrights registrations and applications therefor and all other rights corresponding thereto throughout the world relating to the Business or the Products.

(aa) “Customer Licenses” shall have the meaning set forth in Section 4.10(i).

(bb) “Disclosure Schedule” shall mean the schedule of exceptions to the representations and warranties and the listing of information required under or made by Seller in Article 4, which schedule is delivered by Seller to Buyer on the date of this Agreement as an inducement to Buyer to enter into this Agreement, and which is attached hereto as Exhibit A.

(cc) “Distribution Agreement” shall mean the distribution agreement dated 2 May 2002 entered into between Seller, Parent and SecureNet Ltd (“SecureNet”).

(dd) “Employee Plan” shall mean any plan, program, policy, practice, contract, agreement or other material arrangement providing for compensation, severance, termination pay, deferred compensation, performance awards, stock or stock-related awards, fringe benefits, medical benefit, pension or supplemental pension plan, retirement compensation arrangement, group registered retirement savings plan, or other employee benefits or remuneration of any kind, whether written, unwritten or otherwise, funded or unfunded, including each employee benefit plan contributed to, or required to be contributed to, by Seller or any Seller Affiliate for the benefit of any Business Employee, or with respect to which Seller or any Seller Affiliate has or may have any Liability to any Business Employee.

Exhibits

(ee) “Excluded Assets” shall have the meaning set forth in Section 2.2.

(ff) “File History” shall have the meaning set forth in Section 4.10(c).

(gg) “Franchise Agreement” shall mean the franchise agreement dated 30 November 2001 entered into between Parent and Baltimore Technologies Japan Co, Ltd (“BTJ”).

(hh) “General Assignment, Assumption and Xxxx of Sale” shall mean that certain general assignment, assumption and xxxx of sale executed by Seller (and, to the extent necessary, the Seller Affiliates) and delivered to Buyer at the Closing, the form of which is attached hereto as Exhibit B.

(ii) “Geographic Limitation” shall have the meaning set forth in Section (ooo).

(jj) “Governmental Authorization” shall mean each consent, license, permit, grant or other authorization issued to Seller or a Seller Affiliate by a Governmental Entity pursuant to which Seller or a Seller Affiliate currently operates or holds any interest in the Acquired Assets.

(kk) “Governmental Entity” shall mean any court, administrative agency or commission or other federal, state, provincial, municipal, county, local or other foreign governmental authority, instrumentality, agency or commission.

(ll) “Hazardous Material” shall mean any amount of any substance that has been designated by any Governmental Entity or by applicable law to be radioactive, toxic, hazardous or otherwise a danger to health or the environment, including PCBs, asbestos, petroleum, and urea-formaldehyde, other than office and janitorial supplies properly and safely maintained.

(mm) “Hazardous Materials Activities” shall have the meaning set forth in Section 4.14(b).

(nn) “Incorporated Open Source Materials” shall have the meaning set forth in Section 4.10(x).

(oo) “Indebtedness” shall mean (i) any indebtedness, whether or not contingent, in respect of borrowed money or evidenced by bonds, notes, debentures or other similar instruments or letters of credit (or reimbursement agreements in respect thereof) or banker’s acceptances, (ii) capital lease obligations, (iii) any balance deferred and unpaid for the purchase price of any property, (iv) all indebtedness of others secured by a lien on any asset, (v) outstanding checks that will be funded by borrowed money, whether current or long-term, secured or unsecured, and (vi) to the extent not otherwise included in the immediately preceding clauses, any guaranty of any indebtedness of any other Person.

(pp) “Indemnification Period” shall have the meaning set forth in Section 8.1.

Exhibits

(qq) “Indemnified Parties” shall mean Buyer.

(rr) “Intellectual Property Rights” shall mean any or all of the following and all statutory and/or common law rights in Ireland, England, the U.S., and throughout the world in, arising out of, or associated therewith: (i) all Patents; (ii) all inventions (whether patentable or not), invention disclosures and improvements, all trade secrets, proprietary information, know how and technology; (iii) all works of authorship, Copyrights, mask works, copyright and mask work registrations and applications; (iv) all industrial designs and any registrations and applications therefor; (v) all Trademarks; (vi) all databases and data collections (including knowledge databases, customer lists and customer databases); (vii) all rights in Software; (viii) rights to Uniform Resource Locators, Web site addresses and domain names; and (ix) any similar, corresponding or equivalent rights to any of the foregoing.

(ss) “Key Employees” shall mean those employees identified on Schedule 1.1(ss) which Schedule may be updated by Buyer, at its sole discretion, between the date hereof and October 20, 2003.

(tt) “Latent Liability” shall mean any Liability arising out of violations of law or breach of Contract or breach of duty existing (and to the extent continuing after), or other facts or circumstances, actions taken or products delivered or services rendered, prior to the Closing.

(uu) “Liability” shall mean any and all debts, liabilities and obligations, whether accrued, unaccrued, fixed, absolute, contingent, matured, unmatured, determined, determinable, including those arising under any law, claim, action, suit, arbitration, inquiry, proceeding or investigation by any Governmental Entity and those arising under any Contract or undertaking.

(vv) “Liens” shall mean any mortgage, lien, pledge, charge, security interest or encumbrance of any kind whatsoever in respect of any asset, other than (i) liens for Taxes not yet due and payable, (ii) liens arising in the ordinary course of business or by operation of law; (iii) retention of title provisions; and (iv) rights granted to SecureNet under the Distribution Agreement.

(ww) “Loss” shall mean any claim, loss, Liability, damage, deficiency, cost or expense, including reasonable attorneys’ fees and expense of investigation and defense.

(xx) “Material Adverse Effect” shall mean any change, event or effect that is materially adverse to the Acquired Assets, the Business, or results of operations of Parent related to the Business.

(yy) “Non-Competition Agreement” shall mean that certain agreement to be entered into between Buyer and Seller and effective as of the Closing, in the form attached hereto as Exhibit D.

(zz) “Offer Letter” shall mean an offer letter given to each Offered Employee in accordance with Section 6.11.

Exhibits

(aaa) “Officer’s Certificate” shall mean a certificate signed by any Indemnified Party (or in the case of an Indemnified Party that is not a natural Person, an officer thereof): (i) stating that such Indemnified Party has sustained, incurred, or accrued, or has received written notice of a third party claim or potential claim that it reasonably believes would, if resolved adversely to such Indemnified Party, cause such Indemnified Party to sustain, incur, or accrue Losses, and (ii) specifying in reasonable detail the individual items of Losses included in the amount so stated and the basis for such Losses or anticipated Losses, and the nature of the misrepresentation or breach of warranty to which such item is related.

(bbb) “One/Web” shall mean the Seller’s online technical support site, the call management system (eFO), and all functionality incorporated into the xxx.xxxxxxxxx.xxx website, including all Software, other intellectual property, interfaces, pages, look and feel, knowledgebase, and other infrastructure.

(ccc) “Parent” shall have the meaning set forth in the preamble.

(ddd) “Parent’s Representatives” shall have the meaning set forth in Section 6.5(a).

(eee) “Patents” shall mean patents and applications therefor and all reissues, divisions, renewals, extensions, provisionals, continuations and continuations-in-part thereof, in any jurisdiction.

(fff) “Person” shall mean an individual, a partnership, a limited liability company, a corporation, an association, a joint stock corporation, a trust, a joint venture, an unincorporated organization, or a Governmental Entity.

(ggg) “Post-Agreement License Revenue” shall mean all 50% of all revenue with respect to Product licenses entered into between the date of this Agreement and the Closing Date, less sales commissions and other selling expenses.

(hhh) “Post-Agreement Support Revenue” shall mean all support and maintenance revenue relating to Products invoiced by Seller or any Seller Affiliate between the date of this Agreement and the Closing Date which relates to any period after the Closing Date.

(iii) “Products” shall mean the software products, tools and utilities of Seller specified in Schedule 1.1(ggg), including all versions and releases (including updates and bug fixes) of such software products, and any and all derivatives or predecessors of all such products, regardless of whether listed on Schedule 1.1(ggg), all in both source and object code form.

(jjj) “PTO” shall mean the United States Patent and Trademark Office, or any successor thereto.

Exhibits

(kkk) “Purchase Price” shall mean the consideration to be delivered by Buyer to Seller in connection with the Acquisition, which shall consist of cash in the amount of GBP 5,000,000 plus 90% of the Accounts Reveivable.

(lll) “Registered Intellectual Property Rights” shall mean all: (i) Patents; (ii) registered Trademarks; (iii) registered Copyrights and applications for copyright registration; (iv) domain name registrations; and (v) any other Intellectual Property Rights that are the subject of an application, certificate, filing, registration or other document issued, filed with or recorded by any Governmental Entity.

(mmm) “Registered Transferred Intellectual Property” shall have the meaning set forth in Section 4.10(b).

(nnn) “Resolution” shall have the meaning set forth in Section 6.4(a).

(ooo) “Restriction” shall mean any Contract (whether or not listed or described in the Disclosure Schedule) to which Parent, Seller or any Seller Affiliate is a party, which has or may reasonably be expected to have the effect of materially prohibiting or impairing the operation of the Business or use of the Acquired Assets in any specific geographic location (a “Geographic Limitation”).

(ppp) “Restriction Release” shall mean, with respect to any Geographic Limitation, a fully-executed and enforceable amendment to the associated Restriction, which has the effect of releasing the Parent, Seller and/or Seller Affiliate from any and all Geographic Limitations formerly imposed under the Restriction such that, as of the Closing of the Acquisition, Buyer shall not be subject to any Geographic Limitation with respect to its ability to operate the Business or utilize the Acquired Assets.

(qqq) “Returns” shall have the meaning set forth in Section 4.7(a)(i).

(rrr) “Seller” shall have the meaning set forth in the preamble.

(sss) “Seller Affiliate” shall mean each affiliate of Seller listed on Schedule 1.1(sss), each of which owns assets related to the Business, has the authority to enter into contractual arrangements with respect to the Acquired Assets, and/or employs Business Employees.

(ttt) “Seller Group” shall mean Seller, together with all Seller Affiliates, and references to any member of the Seller Group shall include any of Seller or any Seller Affiliate.

(uuu) “Shareholders’ Meeting” shall have the meaning set forth in Section 6.4(a).

(vvv) “Software” shall mean any and all computer software and code, including assemblers, applets, compilers, source code, object code, data (including image and sound data), design tools and user interfaces, in any form or format, however fixed including source code listings and documentation.

Exhibits

(www) “Sublease” shall mean a sublease between Seller, as sublessor, and Buyer, as sublessee, relating to the full second floor at 00 Xxxxxxxx Xxxxxx, Xxxxxx 0, Xxxxxxx, having a term of at least one year at an annual base rent not to exceed € 25 per square foot plus such additional charges as are standard in that building, in such form as may be agreed upon by Seller, Buyer, and consented to by the owner of such premises.

(xxx) “Superior Proposal” shall have the meaning set forth in Section 6.5(d).

(yyy) “Tangible and Other Fixed Assets” shall mean the tangible and other fixed assets related to the Business identified on Schedule 1.1(yyy).

(zzz) “Tax” and “Taxes” shall mean any and all federal, state, provincial, municipal, local and foreign taxes, assessments and other governmental charges, duties, impositions and liabilities, including taxes based upon or measured by gross receipts, income, profits, sales, use and occupation, and value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes as well as public imposts, fees and social security charges (including health, unemployment and pension insurance), together with all interest, penalties and additions imposed with respect to such amounts and any obligation under any agreement or arrangement with any other Person with respect to such amounts and including any liability for taxes of a predecessor entity.

(aaaa) “Technology” shall mean all technology, all information related to, constituting or disclosing any technology, and all tangible copies and embodiments in any media of technology, including all know-how, show-how, techniques, trade secrets, inventions (whether or not patented or patentable), algorithms, routines, Software, files, databases, works of authorship or processes.

(bbbb) “Termination Fee” shall have the meaning set forth in Section 9.3.

(cccc) “Trademarks” shall mean any common law or registered tradename, trademark or service xxxx; any intent-to-use applications for a trademark or service xxxx; or any other registration or application related to trademarks or services marks.

(dddd) “Transferred Contracts” shall mean the agreements, contracts or instruments identified by Buyer as of the Closing Date on Schedule 1.1(dddd) or other Business Contracts which Buyer, in its sole discretion, has determined to include in Schedule 1.1(dddd) between the date hereof and the Closing Date, which do not require consent to assignment from a third party or for which consent to assignment from a third party has been obtained prior to the Closing.

(eeee) “Transferred Intellectual Property Rights” shall mean all Intellectual Property Rights owned or transferable by Seller: (i) embodied by, or which would be infringed by the making,

Exhibits

using, offering for sale, selling, importing, copying, modifying, distributing or other exploitation of, the Products, the Transferred Technology or operation of the Business, including all Copyrights embodied by the Products; or (ii) primarily related to, or necessary for, the operation of the Business, and including those listed or described in Schedule 1.1(eeee).

(ffff) “Transferred Technology” shall mean all Technology (including the Product) owned or transferable by Seller related to the Business or the Acquired Assets, including all Technology listed or described in Schedule 1.1(ffff). To the extent that any Software constitutes Transferred Technology, all versions and releases of such Software, and Software from which such Software was derived, in both source and object code form, shall be included as Transferred Technology.

(gggg) “Transfer Taxes” shall mean all sales, use, value-added, gross receipts, excise, registration, stamp, duty, transfer and other similar taxes and governmental fees payable to any taxing authority.

(hhhh) “Transition Services Agreement” shall mean that certain agreement to be executed and delivered by the parties and effective upon the Closing attached hereto as Exhibit E.

(iiii) “TrustedWorld Partner Contracts” shall mean the TrustedWorld Partner Contracts listed on Schedule 1.1(ddd).

(jjjj) “UAE Agreement” shall mean the Master Distributor Agreement dated December 21, 2000 between Baltimore Technologies Limited and MDSS.

(kkkk) “UKLA” shall have the meaning set forth in Section 6.3.

1.2 Interpretation and Construction.

(a) All references in this Agreement to “Articles,” “Sections,” “Schedules” and “Exhibits” refer to the articles, sections, schedules and exhibits of this Agreement, unless otherwise indicated.

(b) As used in this Agreement, neutral pronouns and any variations thereof shall be deemed to include the feminine and masculine and all terms used in the singular shall be deemed to include the plural, and vice versa, as the context may require.

(c) The words “hereof,” “herein” and “hereunder” and other words of similar import refer to this Agreement as a whole, as the same may from time to time be amended or supplemented, and not to any subdivision contained in this Agreement.

(d) The word “including” when used herein is not intended to be exclusive and means “including, without limitation.”

Exhibits

(e) The word “knowledge” when used herein shall mean the actual knowledge of Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxx Xxxxxx, and Xxxx X’Xxxxxxxx, after making reasonable investigation.

(f) The parties agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

ARTICLE 2

ASSETS AND LIABILITIES

2.1 Acquired Assets. Subject to the terms and conditions set forth in this Agreement, Seller hereby agrees at the Closing to sell, convey, transfer and assign, or cause the Seller Group to sell, convey, transfer and assign to Buyer, and Buyer hereby agrees to purchase from the Seller Group all of Seller Group’s rights, title and interest in and to the assets related to the Business, free and clear of any and all Liens (collectively, the “Acquired Assets”), including the following assets:

(a) The Tangible and Other Fixed Assets;

(b) The Transferred Intellectual Property Rights;

(c) The Transferred Technology;

(d) The OneWeb;

(e) The Transferred Contracts;

(f) The TrustedWorld Partner Contracts;

(g) The Accounts Receivable;

(h) The Post-Agreement License Revenue;

(i) The Post-Agreement Support Revenue;

(j) The Books and Records;

(k) All licenses, permits and other authorizations related to the Business or the Acquired Assets, and all pending applications thereof or renewals thereof;

(l) All brochures, user manuals, graphics and art work (in each case, in paper and electronic format) and UPC codes relating to the Products;

Exhibits

(m) All rights to recover past, present and future damages for the breach, infringement or misappropriation, as the case may be, of any of the foregoing; and

(n) All of the goodwill associated with the Business.

2.2 Excluded Assets. Notwithstanding anything in Section 2.1 to the contrary, the following assets of the Seller Group related to the Business shall not be deemed to be an Acquired Asset and shall be excluded from the assets delivered by Seller or Seller Affiliates to Buyer at the Closing:

(a) Those assets identified on Schedule 2.2(a), if any;

(b) All cash and cash equivalents (other than Post-Agreement License Revenue and Post-Closing Support Revenue);

(c) Any claim, cause of action, right of recovery of any kind, to the extent primarily related to any Excluded Liability;

(d) Amounts owed by any member of the Seller Group, or any shareholder, director, officer, employee of affiliate thereof, to any other member of the Seller Group;

(e) Any refundable Taxes previously paid by any member of the Seller Group and any claim or right of any member of the Seller Group to any refund of Taxes;

(f) Any refundable lease improvements previously paid by any member of the Seller Group and any claim or right of any member of the Seller Group to any refund of lease improvement payments;

(g) All contracts of insurance, insurance policies (including D&O policies), insurance plans, insurance refunds, the interest of the Seller Group in any insurance policies, including, without limitation, any cash surrender value thereof, all assets of the foregoing and all rights and claims under or in respect of the foregoing;

(h) Original Tax and accounting records and books and records pertaining thereto, minute books, corporate seals, taxpayer and other identification numbers and other documents relating to the organization, maintenance and existence of any member of the Seller Group as a Person;

(i) All shares of capital stock of each member of the Seller Group and all of their affiliates;

(j) All export control licenses held by Seller or a Seller Affiliate;

(k) The products and Intellectual Property Rights in those items listed on Section 4.10(w) of the Disclosure Schedules;

Exhibits

(l) All accounts receivable associated with the Business other than Accounts Receivable;

(m) All trade payables associated with the Business;

(n) The Seller’s rights under this Agreement, the Ancillary Agreements or the transactions contemplated hereby or thereby; and

(o) Any Acquired Assets sold or otherwise disposed of pursuant to and in compliance with Section 6.1 prior to Closing.

(p) Seller’s interest in the property which is the subject of the Sublease.

(q) Any interest in the name “Baltimore” except that Buyer shall be entitled to refer to the name Baltimore in a historical context in connection with the Products in the same fashion as Buyer currently refers to the fact that it was formerly part of PricewaterhouseCoopers, provided that Buyer may not use the name “Baltimore” in any context which would suggest that Buyer owns or has any rights to use the name other than as set forth in this Section 2.2(q).

2.3 Assumed Liabilities. As of the Closing, Buyer hereby agrees to assume, pay or discharge when due only the following obligations or liabilities of the Seller Group (collectively, the “Assumed Liabilities”):

(a) Those executory obligations of the Seller Group under the Transferred Contracts; and

(b) All Liabilities of the Seller Group for Transfer Taxes payable in connection with the transfer of the Acquired Assets as contemplated by this Agreement.

2.4 Excluded Liabilities. Other than the Assumed Liabilities, Buyer shall not assume by virtue of this Agreement, and shall have no liability or obligation for, any Liability of Seller or any Seller Affiliate, including:

(a) Any Indebtedness;

(b) Any Latent Liability;

(c) Any Liability which is past-due as of the Closing;

(d) Any Liability relating to, arising out of or resulting from any Employee Plan;

(e) Any Liability arising from or related to the Excluded Assets; and

(f) Any Liability of Seller or Seller Affiliates in respect of Taxes.

Exhibits

2.5 Transfer Taxes. Buyer shall be liable for and shall pay directly to the appropriate taxing authority, within the required time period, all Transfer Taxes payable in connection with the transfer of the Acquired Assets.

ARTICLE 3

CLOSING AND PURCHASE PRICE

3.1 Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of                                                  , commencing at 12:00 p.m.,              Time, on the date that is two (2) business days following the satisfaction or written waiver of the conditions of Closing set forth in Article 7 hereof (other than those conditions which by their terms are not to be satisfied until the Closing, but subject to the waiver or fulfillment of those conditions), or such other date or location as the parties may mutually determine.

3.2 Purchase Price. At the Closing, Buyer will, by transfer of immediately available funds to a bank account designated in writing by Seller, deliver the Purchase Price to Seller (less applicable withholding Taxes, if applicable).

3.3 Closing Date Deliveries of Seller. At the Closing, Seller or Seller Affiliate, as applicable, shall deliver, or cause to be delivered, to Buyer:

(a) The Acquired Assets, including (i) with respect to the Transferred Contracts, a complete, accurate and legible copy of each such Contract (including all amendments and supplements thereto); (ii) with respect to the Transferred Contracts that were Consent Required Contracts as of the date of this Agreement, and subject to clause 6.9, a written consent by the third parties thereto to the transfer and assignment of such Consent Required Contract to Buyer; and (iii) with respect to all Software included in the Acquired Assets, such delivery to be made by electronic means;

(b) The duly executed General Assignment, Assumption and Xxxx of Sale, which shall be in full force and effect;

(c) The duly executed assignments of the Transferred Intellectual Property Rights in the form of Exhibit E, which shall be in full force and effect;

(d) The duly executed certificates of Seller required by Section 7.2(i);

(e) The duly executed Ancillary Agreements to which Seller or any Seller Affiliate is a party, which Ancillary Agreements shall be in full force and effect; and

(f) Such other duly executed, good and sufficient instruments of sale, conveyance, assignment or transfer, in form and substance reasonably acceptable to Buyer’s counsel, so as to vest in Buyer good and valid title in and to the Acquired Assets.

Exhibits

3.4 Closing Date Deliveries of Buyer. At the Closing, Buyer shall deliver, or cause to be delivered, to Seller the following:

(a) The Purchase Price;

(b) The duly executed officer’s certificate of Buyer required by Section 7.3(d)

(c) The duly executed General Assignment, Assumption and Xxxx of Sale, which shall be in full force and effect;

(d) The duly executed Ancillary Agreements to which Buyer is a party that were not delivered on the date of this Agreement, which Ancillary shall be in full force and effect.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF SELLER

Except as set forth or identified in the Disclosure Schedule, Seller and Parent hereby represent and warrant to Buyer as follows:

4.1 Organization. Seller and each of the Seller Affiliates is a corporation duly organized and validly existing under the laws of the jurisdiction of its incorporation. Each member of the Seller Group has the corporate power to own the Acquired Assets and to carry on the Business as currently conducted. Each member of the Seller Group is duly qualified or licensed to do business and is in good standing as a foreign corporation or extra-provincial corporation (if applicable) in each jurisdiction in which it conducts the Business, except where the absence of such qualification, license or good standing, as applicable, would not have a Material Adverse Effect. Seller has delivered, or will deliver prior to the Closing, a true and correct copy of its memorandum and articles of association (the “Constating Documents”), each as amended to date and in full force and effect on the date hereof, to Buyer.

4.2 Authority.

(a) Seller and Parent each have all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and each of the Ancillary Agreements to which Seller or any Seller Affiliate is a party and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Seller or any Seller Affiliate, as the case may be, and subject to obtaining the approval of Seller’s shareholders, no further action is required on the part of any member of the Seller Group to authorize this Agreement and the transactions contemplated hereby. This Agreement has been duly executed and delivered by Seller and Parent and, assuming the due authorization, execution and delivery by the other parties hereto, constitutes the valid and binding obligation of Seller and Parent, enforceable against Seller and Parent in accordance with its terms, except as such enforceability may be subject to the laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies.

Exhibits

(b) The board of directors of Parent has unanimously (i) approved this Agreement, the Acquisition and the other transactions contemplated by this Agreement; (ii) declared that this Agreement, the Acquisition and the other transactions contemplated by this Agreement are advisable and in the best interests of Parent and its shareholders; and (iii) recommended approval of this Agreement, the Acquisition and the other transactions contemplated by this Agreement to the shareholders of Parent.

4.3 No Conflict. The execution and delivery by Seller and Parent of this Agreement, and the consummation of the transactions contemplated hereby, will not conflict with or result in any violation of or default under (with or without notice or lapse of time, or both) or give rise to a right of termination, cancellation, modification or acceleration of any obligation, payment of any benefit, or loss of any benefit under (any such event, a “Conflict”) (i) any provision of Seller’s or Parent’s Constating Documents or any of the Constating Documents of any Seller Affiliate, (ii) any Transferred Contract, (iii) any of the Contracts listed in Section 4.10 of the Disclosure Schedule, or any other inbound license of Technology or Intellectual Property incorporated in the Product or otherwise material to the Business but not required to be so scheduled; or (iv) any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Business or the Acquired Assets. As a result of the consummation of the transactions contemplated by this Agreement, Buyer will not be prohibited from exercising any of its rights under the Transferred Contracts, and Buyer will not be required to pay any material additional amounts or consideration other than ongoing fees, royalties or payments which Seller or any Seller Affiliate would otherwise be required to pay pursuant to the terms of such Transferred Contracts had the transactions contemplated by this Agreement not occurred.

4.4 Consents. Save for shareholder approval, no consent, waiver, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity or any third party to a Transferred Contract or Consent Required Contract, is required by, or with respect to, Seller or any Seller Affiliate in connection with the execution and delivery of this Agreement or the Ancillary Agreements to which Seller or any Seller Affiliate is a party or the consummation of the transactions contemplated hereby or thereby.

4.5 Business Financial Statements. The Business Financial Statements are correct in all material respects as of the dates and during the periods indicated therein.

4.6 No Changes. Since December 31, 2002, there has or have not been, occurred or arisen any:

(a) Transaction by Seller or any Seller Affiliate related to the Business or the Acquired Assets except in the ordinary course of business as conducted prior to that date and consistent with past practices;

Exhibits

(b) Destruction of, damage to, or loss of any material asset, business or customer of Seller or any Seller Affiliate related to the Business (whether or not covered by insurance);

(c) Other than in the ordinary course of business, consistent with past practice, increase in the salary or other compensation payable or to become payable by Seller or any Seller Affiliate to any Business Employee, or the declaration, payment or commitment or obligation of any kind for the payment (whether in cash, stock or otherwise) by Seller or any Seller Affiliate of a severance payment, termination payment, bonus or other additional salary or compensation to any Business Employee;

(d) Other than in the ordinary course of business consistent with past practices, sale, lease, license or other disposition of any of the assets (whether tangible or intangible) or properties of Seller or any Seller Affiliate related to the Business, including the sale of any accounts receivable of Seller or any Seller Affiliate related to the Business, or any creation of any security interest in the Acquired Assets;

(e) The commencement, settlement or notice, or to Seller’s or any Seller Affiliate’s knowledge threat, of any lawsuit, proceeding or other investigation against Seller or any Seller Affiliate related to the Business or the Acquired Assets;

(f) (i) entering into any agreement with respect to any Intellectual Property Rights of Seller or any of its Seller Affiliates related to the Business or the Acquired Assets with any Person, other than non-exclusive licenses granted to end-user customers in the ordinary course of business consistent with past practices, (ii) purchase or license of any Intellectual Property Rights or entering into any agreement with respect to the Intellectual Property Rights of any Person related to the Business or the Acquired Assets, (iii) entering into any agreement with respect to the development of any Intellectual Property Rights with a third party related to the Business or the Acquired Assets, or (iv) other than in the ordinary course of business consistent with past practice, and as reflected in copies of the Transferred Contracts delivered to Buyer, change in pricing or royalties set or charged by Seller or any Seller Affiliate to its customers or licensees or in pricing or royalties set or charged by Persons who have licensed Intellectual Property Rights to Seller or any Seller Affiliate related to the Business or the Acquired Assets;

(g) Agreement or material modification to any agreement pursuant to which any other Person was granted marketing, distribution, development or similar rights of any type or scope with respect to any products or technology of Seller or any Seller Affiliate related to the Business or the Acquired Assets;

(h) Written claims or matters raised by any individuals or any workers’ representative organization, bargaining unit or union regarding labor trouble or claim of wrongful discharge or other unlawful employment or labor practice or action with respect to the Business or the Acquired Assets;

Exhibits

(i) Waiver or release of any material right or claim of Seller or any Seller Affiliate related to the Business or the Acquired Assets;

(j) Any event or condition of any character that has had or is reasonably likely to have a Material Adverse Effect; or

(k) Agreement by Seller or any Seller Affiliate to do any of the things described in the preceding clauses (a) through (j) of this Section 4.6 (other than negotiations with Buyer and its representatives regarding the transactions contemplated by this Agreement and the Ancillary Agreements).

4.7 Tax Matters.

(a) Tax Returns and Audits.

(i) To the extent the failure to do so would materially and adversely impact the Acquired Assets, Buyer’s use of the Acquired Assets or the operation of the Business, as of the Closing Date, Seller and each Seller Affiliate will have prepared and timely filed all required federal, state, provincial, local and foreign returns, estimates, information statements and reports (“Returns”) relating to any and all Taxes concerning or attributable to Seller, Seller Affiliates or their operations and such Returns are or will be true and correct in all material respects and have been or will be completed in accordance with applicable law.

(ii) To the extent the failure to do so would materially and adversely impact the Acquired Assets, Buyer’s use of the Acquired Assets or the operation of the Business, as of the Closing Date, Seller and each Seller Affiliate will have paid all Taxes it is required to pay and will have withheld with respect to Business Employees and other Persons (and timely paid over to the appropriate Taxing authority) all Taxes and other Taxes required to be withheld.

(iii) To the extent the failure to do so would materially and adversely impact the Acquired Assets, Buyer’s use of the Acquired Assets or the operation of the Business, neither Seller nor any Seller Affiliate has been delinquent in the payment of any Tax, nor is there any Tax deficiency outstanding, assessed or proposed against Seller or any Seller Affiliate, nor has Seller or any Seller Affiliate executed any waiver of any statute of limitations on or extending the period for the assessment or collection of any Tax.

(iv) No audit or other examination of any Return of Seller or Parent that is or would be relevant to the Business or the Acquired Assets is presently in progress, nor has Seller or Parent been notified of any request for such an audit or other examination.

(v) There are (and immediately following the Closing there will be) no Liens on the Acquired Assets relating to or attributable to Taxes other than customary Liens for Taxes not yet due and payable.

Exhibits

(vi) Seller has no knowledge of any basis for the assertion of any claim relating or attributable to Taxes which, if adversely determined, would result in any Lien on the Acquired Assets.

(vii) To the extent relevant to the Business or the Acquired Assets, no adjustment relating to any Return filed by Seller or any Seller Affiliate has been proposed in writing by any tax authority to Seller or any Seller Affiliate or any representative thereof.

4.8 Restrictions on Business Activities. There is no agreement (non-competition or otherwise), commitment, judgment, injunction, order or decree to which Seller or any Seller Affiliate is a party, related to the Business or the Acquired Assets, or otherwise binding upon on the Business or the Acquired Assets which has or may reasonably be expected to have the effect of materially prohibiting or impairing the operation of the Business or prohibiting or impairing any material acquisition of property (tangible or intangible) by Buyer in connection with the operation of the Business or the Acquired Assets or the conduct of the Business. Without limiting the generality of the foregoing, neither Seller nor any Seller Affiliate has entered into any agreement under which Seller is restricted from selling, licensing or otherwise distributing any of the Products or the Transferred Intellectual Property Rights and Transferred Technology to, or providing services to, customers or potential customers or any class of customers, in any geographic area, during any period of time, or in any segment of the market.

4.9 Title to Properties; Absence of Liens and Encumbrances; Condition of Equipment.

(a) Neither Seller nor any Seller Affiliate owns nor have they ever owned any real property used primarily in the Business.

(b) Seller and each Seller Affiliate has good and valid title to, or, in the case of leased properties and assets, valid leasehold interests in, all of the Acquired Assets, free and clear of any Liens, except (i) as reflected in the Current Balance Sheet or the notes thereto, (ii) Liens for Taxes, assessments and similar charges which are not yet due and payable, or are being contested in good faith, and (iii) such imperfections of title and encumbrances, if any, which do not materially detract from the value thereof.

4.10 Intellectual Property.

(a) Section 4.10(a) of the Disclosure Schedule contains a complete and accurate list (by name and version number) of all Products related to the Business or the Acquired Assets that have been sold, distributed or otherwise disposed of in the five (5)-year period preceding the date hereof, or under development as of the Closing Date.

(b) Section 4.10(b) of the Disclosure Schedule lists all the Transferred Intellectual Property Rights that are Registered Intellectual Property Rights owned by, filed in the name of, or applied for, by Seller or any Seller Affiliate (the “Registered Transferred Intellectual Property Rights”), and lists any proceedings or actions before any court, tribunal (including the US PTO) or

Exhibits

equivalent or similar authority anywhere in the world, related to any of the Registered Transferred Intellectual Property Rights, other than proceedings to which Seller and any Seller Affiliate is not a party or by which any of such are bound.

(c) Each Registered Transferred Intellectual Property Right is valid and subsisting. Seller has provided or prior to the Closing will provide to Buyer all of the file histories, correspondence, fee documents, and other information relevant to obtaining, maintaining, and perfecting such Registered Transferred Intellectual Property Rights (“File History”), and the File History for each item of Registered Transferred Intellectual Property is accurate and complete.

(d) In each case in which Seller or any Seller Affiliate has acquired, other than through a written license, any Intellectual Property Right from any Person related to the Business or the Acquired Assets, Seller or Seller Affiliate has obtained a valid and enforceable assignment sufficient to irrevocably transfer all rights in and to all such Intellectual Property Rights to Seller or Seller Affiliate. As of the Closing, where such Transferred Intellectual Property Right was registered, or is now a Registered Transferred Intellectual Property Right or part thereof, Seller or its Subsidiaries have recorded or caused to be recorded, or have taken appropriate actions to record or have recorded, each such prior assignment of such Intellectual Property Right with the relevant Governmental Entity in accordance with applicable laws and regulations in each jurisdiction in which such recordation is required.

(e) Seller has no knowledge of any facts or circumstances that would render any Transferred Intellectual Property Rights invalid or unenforceable, including any fact or circumstance that would operate as a statutory bar to obtaining a final patent from an application, as those statutory bars are set forth in 35 U.S.C. § 102.

(f) No assignment or transfer of the Transferred Intellectual Property Rights, and no subsequent licensing of the Transferred Intellectual Property Rights by the Buyer, would result in any breach, modification, cancellation, termination or suspension of any rights in respect of the Transferred Intellectual Property Rights or require the consent of, or additional payment of any kind to, any Person.

(g) Each item of the Transferred Intellectual Property Rights is free and clear of any liens or encumbrances other than non-exclusive licenses to third parties. For all the Transferred Intellectual Property Rights (including the Copyrighted works that are included or incorporated into the Products), (a) Seller is either the exclusive owner or (b) Seller or another member of the Seller Group obtained those Transferred Intellectual Property Rights pursuant to (i) a Contract listed in Section 4.10(p) of the Disclosure Schedule as an inbound license agreement, or (ii) an inbound end-user license agreement for generally and commercially available “off-the-shelf” third party software in binary code form. Without limiting the generality of the foregoing, Seller is the exclusive owner of all Trademarks used in connection with the operation or conduct of the Business, including the sale, distribution or provision of the Product by Seller or any Seller Affiliate.

Exhibits

(h) Neither Seller nor any Seller Affiliate has transferred ownership of, or granted any exclusive license of or exclusive right to use, or authorized the retention of any exclusive rights to use or joint ownership of, any Intellectual Property Right that is Transferred Intellectual Property Rights, to any other Person.

(i) Seller owns or is licensed to use and possesses sufficient and legally enforceable right to all Transferable Intellectual Property Rights. No third party owns or has any rights to or under any of the Transferred Intellectual Property Rights, except for non-exclusive licenses granted to end-user customers in the ordinary course of business (“Customer Licenses”).

(j) Transferred Intellectual Property Rights constitute all the Intellectual Property Rights material to the Business as it currently is conducted or as conducted in substantially the same manner following the Closing, or which are used in and/or necessary to the conduct of the Business.

(k) No Person who has licensed any Intellectual Property Rights to Seller related to the Business or the Acquired Assets has ownership rights or license rights to improvements made by or for Seller in such Intellectual Property Rights.

(l) Seller has the right to use, pursuant to valid licenses, all software development tools, library functions, compilers and all other third-party Software that are material to the operation of the Business or that are required to create, modify, compile, operate or support any Software that is incorporated into the Product.

(m) No government funding, facilities of a university, college, other educational institution or research center was used in the development of any Transferred Intellectual Property Rights. To the knowledge of Seller, no current or former employee, consultant or independent contractor of Seller, who was involved in, or who contributed to, the creation or development of any Transferred Intellectual Property Rights, has performed services for the government, university, college, or other educational institution or research center during a period of time during which such employee, consultant or independent contractor was also performing services for Seller.

(n) To the knowledge of Seller, the operation of the Business as it is currently conducted, and to the extent conducted in the same manner following the Closing, including the design, development, use, import, branding, advertising, promotion, marketing, manufacture and sale of Products related to the Business or the Acquired Assets does not, and will not (when conducted as described above), infringe or misappropriate any Intellectual Property Right of any Person, violate any right of any Person, and does not constitute unfair competition or unfair trade practices under the laws of any jurisdiction; Seller has not received written notice from any Person claiming that such operation of the Business, or any act, product, technology or service related to the Business or the Acquired Assets (including products, technology or services currently under development) of Seller infringes or misappropriates any Intellectual Property Right of any Person or constitutes unfair competition or unfair trade practices under the laws of any jurisdiction (nor does Seller have knowledge of any basis therefor).

Exhibits

(o) No Transferred Intellectual Property Rights or Product related to the Business or the Acquired Assets is subject to any proceeding or outstanding decree, order, judgment or settlement agreement or stipulation that would reasonably be expected to adversely affect the validity or enforceability of such Transferred Intellectual Property Rights.

(p) Other than inbound end-user license agreements for generally and commercially available “off-the-shelf” third party software in binary code form, and other than outbound “shrink-wrap” licenses in substantially the forms set forth on Section 4.10(p) of the Disclosure Schedule, Section 4.10(p) of the Disclosure Schedule lists all Contracts to which Seller and any Seller Affiliate is a party with respect to any Transferred Intellectual Property Rights. All such Contracts are in full force and effect. Seller is not in material breach of nor has Seller failed to perform in any material respect under, any of the foregoing Contracts and, to Seller’s knowledge, as of the date hereof, no other party to any such Contract is in material breach thereof or has failed to perform in any material respect thereunder. The consummation of the transactions contemplated by this Agreement will neither violate nor result in the breach, modification, cancellation, termination or suspension of such Contracts. Section 4.10(p) of the Disclosure Schedule also includes the following information with respect to each Contract otherwise listed above: (i) whether that Contract is an “Inbound License” or an “Outbound License,” (ii) whether there are royalties or fees due or payable by Seller or another Person in the Seller Group to a Third Party under such Contract.

(q) Section 4.10(q) of the Disclosure Schedule lists all Contracts other than Customer Licenses between Seller or Seller Affiliates and any other Person wherein or whereby Seller or any Seller Affiliate has agreed to, or assumed, any obligation or duty to warrant, indemnify, reimburse, hold harmless, guaranty or otherwise assume or incur any obligation or liability or provide a right of rescission with respect to the infringement or misappropriation by Seller or such other Person of the Intellectual Property Rights of any Person other than Seller related to the Business or the Acquired Assets.

(r) To the knowledge of Seller, there are no Contracts between Seller (or any Seller Affiliates) and any other Person with respect to Transferred Intellectual Property Rights under which there is any dispute regarding the scope of such agreement, or performance under such agreement, including with respect to any payments to be made or received by Seller thereunder.

(s) To the knowledge of Seller, no Person is infringing or misappropriating any Transferred Intellectual Property Rights.

(t) Seller has protected Seller’s rights in Confidential Information (as defined in the Confidentiality Agreement) and trade secrets of Seller related to the Business or the Acquired Assets or provided by any other Person to Seller to the extent reasonable and customary in the industry in which Seller operates. To the extent relevant to the Business and the Acquired Assets, Seller has and enforces a policy requiring each employee and consultant of Seller to execute an employment or consulting agreement substantially in the form attached to the Disclosure Schedule as Exhibit 4.10(t) thereto and all current and former employees and consultants of Company who have created or modified any of Transferred Intellectual Property Rights have executed such an

Exhibits

agreement and such agreement assigns all of such employees’ and consultants’ rights (and waives, to the extent permitted by law, applicable moral rights of such employees and consultants) in and to Transferred Intellectual Property Rights to Seller.

(u) Neither this Agreement nor the transactions contemplated by this Agreement, including the assignment to Buyer, by operation of law or otherwise, of any Contracts to which Seller is a party, will result in (i) Buyer granting to any third party any right to or with respect to any Intellectual Property Right owned by, or licensed to pursuant to any Contract to which Seller is a party or by which it is bound, (ii) Buyer being bound by, or subject to, any non-compete or other restriction on the operation or scope of its businesses, or (iv) Buyer being obligated to pay any royalties or other amounts to any third party in excess of those payable by Buyer prior to the Closing Date pursuant to any Contract to which Seller is a party or by which it is bound.

(v) Immediately following the consummation of the transactions contemplated by this Agreement, Seller will not own or control any Patents that claim priority from, or are continuations or divisionals of, those Patents included in the Acquired Assets; none of the Patents included in the Transferred Assets claim priority from, or are continuations or divisionals of, any other Patent owned or controlled by Seller. None of the Patents included in the Transferred Intellectual Property Rights is subject to a terminal disclaimer. None of the Continuing Employees are listed as the inventor for a Patent owned by Seller or a Seller Affiliate and not included in the Transferred Intellectual Property Rights, and none of the Patents retained by Seller originate from the subject of the Business or were invented in the course of or in relation to the operations of the Business.

(w) The Transferred Technology constitutes all of the Technology that is used in or reasonably necessary for the operation of the Business, and for Buyer to further develop, license, support, market, distribute, maintain and otherwise exploit the Product after Closing, and to conduct the Business after Closing, each in substantially the same manner as prior to the Closing. After the Closing Date, Seller will not own or have control of any product that is derived from the Product, or any product or software of which the Product is a derivative work.

(x)

(i) Section 4.11(x) of the Disclosure Schedule lists all software or other material that is distributed as “free software”, “open source software” or under a similar licensing or distribution model (including but not limited to the GNU General Public License) that is incorporated into the Product, combined with the Product or distributed in conjunction with the Product (“Incorporated Open Source Materials”).

(ii) None of the Incorporated Open Source Materials are licensed under license terms that create, or purport to create, obligations for Seller or its Subsidiaries with respect to Intellectual Property Rights or Technology, or grant, or purport to grant, to any third party, any rights to Technology or Intellectual Property Rights, or any immunities under Intellectual Property Rights (including but not limited to using any Incorporated Open Source Materials that require, as a

Exhibits

condition of use, modification and/or distribution of such Incorporated Open Source Materials that other software incorporated into, derived form or distributed with such Incorporated Open Source Materials be (i) disclosed or distributed in source code form, (ii) be licensed for the purpose of making derivative works, or (iii) be redistributable at no charge).

(y) All Schedules describing or listing the Product, other of Seller’s products and services related to the Business, the Acquired Assets, the Transferred Intellectual Property are complete and accurate.

(z) Neither Seller nor any Seller Affiliate has received any opinion of counsel regarding a potential allegation of infringement, or the application of any Patent to the Product or the operation of the Business.

(aa) All Products sold, licensed, or delivered by or for Seller, and all services provided by Seller in connection with the Business on or prior to the Closing Date conform in all material respects to applicable contractual commitments, express and implied warranties, product specifications and product documentation and to any representations provided to customers. Seller has provided Buyer with all documentation and notes relating to the testing of the Product, and all material information about unresolved bugs and unresolved non-conformities in the Product.

(bb) Section 4.10(bb) of the Disclosure Schedule identifies each Contract pursuant to which, or each circumstance under which (i) Seller or any Seller Affiliate has deposited, or is or may be required to deposit any source code related to the Product with an escrow holder or any other Person, and (ii) Seller or any Seller Affiliate has disclosed, delivered or licensed to any Person other than Buyer any source code related to the Product, or (iii) Seller or any Seller Affiliate (or any third party of for which Seller has knowledge) has permitted the disclosure or delivery to any escrow agent or other Person, of any source code related to the Product. The execution of this Agreement, in and of itself, will not, or would not reasonably be expected to, result in the release from escrow of any such source code. No event has occurred, and no circumstance or condition exists that (with or without notice or lapse of time, or both) will, or would reasonably be expected to, result in the disclosure or delivery of any source code related to the Product to any Person by Seller, any Seller Affiliate, or any Person acting on their behalf. After the Closing, Seller will have either delivered to Buyer or destroyed all copies of the source code to the Product or related to the Product.

(cc) Seller has implemented procedures consistent with standard industry practices to ensure that the Product and the Transferred Technology are free from viruses or other disabling codes.

(dd) Section 4.10(dd) of the Disclosure Schedule identifies all of Seller’s TrustedWorld Partners. Seller represents that other than the agreements with SecureNet (Australia) and with Baltimore Japan, the agreements with all of the TrustedWorld Partners are substantially in the form of agreement set forth in Section 4.10(dd) of the Disclosure Schedule and that no such agreement contains any exclusivity provisions.

Exhibits

4.11 No Defaults. Seller and each Seller Affiliate is in compliance with and has not materially breached, violated or defaulted under, or received written notice that it has breached, violated or defaulted under, any of the terms or conditions of any Transferred Contract or any Contract required to be disclosed under Section 4.10 hereof, nor is Seller aware of any event that would constitute such a breach, violation or default with the lapse of time, giving of notice or both.

4.12 Governmental Authorization. Each consent, license, permit, grant or other authorization (i) pursuant to which Seller or any Seller Affiliate currently operates or holds any interest in the Acquired Assets, or (ii) which is required for the operation of the Business as currently conducted has been issued or granted to Seller or any Seller Affiliate, and is in full force and effect.

4.13 Litigation. There is no action, suit, claim or proceeding of any nature related to the Business or the Acquired Assets pending, or to the knowledge of Seller, threatened, against Seller, any Seller Affiliate or any of their officers or directors. To the knowledge of Seller, there is no investigation or other proceeding related to the Business or the Acquired Assets pending or threatened against Seller, any Seller Affiliate or any of their officers or directors in their respective capacities as such by or before any Governmental Entity. No Governmental Entity has provided Seller with written notice challenging or questioning the legal right of Seller or any Seller Affiliate to conduct the Business as conducted at that time or as presently conducted.

4.14 Environmental Matters.

(a) Hazardous Material. Neither Seller nor any Seller Affiliate has, to the extent relevant to the Business or the Acquired Assets, illegally released any amount of Hazardous Material, but excluding office and janitorial supplies properly and safely maintained.

(b) Hazardous Materials Activities. Neither Seller nor any Seller Affiliate has released or exposed its Business Employees or others to Hazardous Materials in violation of any law or in a manner that would result in liability to Seller or any Seller Affiliate, nor has Seller or any Seller Affiliate disposed of, transported, sold, or manufactured any product containing a Hazardous Material (any or all of the foregoing being collectively referred to herein as “Hazardous Materials Activities”) in violation of any rule, regulation, treaty or statute promulgated by any Governmental Entity to prohibit, regulate or control Hazardous Materials or any Hazardous Material Activity.

(c) Environmental Liabilities. No action, proceeding, revocation proceeding, amendment procedure, writ, injunction or claim is pending, or to the knowledge of Seller threatened, concerning any environmental permit, Hazardous Material or any Hazardous Materials Activity related to the Business or the Acquired Assets. Seller has no knowledge of any fact or circumstance which could involve Seller in any environmental litigation or impose upon Seller or any Seller Affiliate any environmental liability.

Exhibits

4.15 Employee Matters.

(a) Section 4.15(a) of the Disclosure Schedule contains (i) a list of the Business Employees and (ii) a true and complete list of all remuneration payable and other benefits provided which Seller or any Seller Affiliate is bound to provide (whether at present or in the future) to each such employee, or any person affiliated with any such employee, and includes, if any, particulars of all profit sharing, incentive and bonus arrangements to which Seller or any of Seller Affiliate is a party, whether legally binding or not.

(b) Section 4.15(b) of the Disclosure Schedule contains an accurate and complete list of each Employee Plan. Seller has delivered to Buyer correct and complete copies of all documents embodying each Employee Plan, including all amendments thereto and all related trust documents.

(c) None of the Business Employees has received a pension grant or any other kind of voluntary pension benefit.

(d) Each of the Employee Plans is, and has been, established, registered, qualified, administered and invested materially in compliance with (i) the terms thereof, (ii) all applicable laws, including, without limiting the generality of the foregoing, the applicable pension and tax legislation, (iii) the administrative practices of the applicable pension regulator and tax authorities; and the Seller Group has not received, since December 31, 2002, any notice from any person questioning or challenging such compliance (other than in respect of any claim related solely to that person), and the Seller Group has no knowledge of any such notice from any person questioning or challenging such compliance prior to December 31, 2002.

(e) None of the Offered Employees has given or received notice of termination of employment and neither Seller nor any Seller Affiliate has, since December 31, 2002, given notice of any reduction to any employee or Governmental Entity or started consultations with any trade union pursuant to any statute or regulation.

(f) No collective bargaining agreement exists that is binding on Seller or any Seller Affiliate with respect to the Business Employees, and to Seller’s knowledge, no petition has been filed or proceeding instituted, or any action taken in contemplation of any such filing or institution, by an employee or group of employees of Seller or any Seller Affiliate, seeking recognition of a bargaining representative.

(g) There is no labor strike, dispute, slow down or stoppage pending or, to the knowledge of Seller or any Seller Affiliate, threatened against Seller or any Seller Affiliate by any of the Business Employees, and neither Seller nor any Seller Affiliate has received any demand letters, civil rights charges, suits or drafts of suits with respect to claims made by any of the Business Employees.

(h) Other than Technical writers Xxxxxx XxXxxx and Xxxxx Xxxxx, Curriculum developers Xxxxxxx Xxxxxxx and Xxxxxxx XxXxxx, permanent contractors Xxxx Xxxxxxx and Xxx Xxxxxxxx, temporary contractors Xxxxx Xxxxx and Xxxxxx Xxxxx, and Xxxxx Xxxx (the “Contractors”),

Exhibits

no person is performing consulting services for the Business or in connection with the Acquired Assets. To Seller’s knowledge, each of the Contractors has been properly classified as an “independent contractor” for purpose of withholding obligations with respect to any Taxes.

(i) Seller and each Seller Affiliate is in compliance in all material respects with all applicable foreign, federal, state, provincial and local laws, rules and regulations respecting employment, employment practices, terms and conditions of employment and wages and hours, in each case, with respect to the Business Employees.

(j) Seller and each Seller Affiliate has withheld and reported all amounts required by law or by agreement to be withheld and reported with respect to wages, salaries and other payments to the Business Employees.

(k) There are no pending, or to Seller’s or any Seller Affiliate’s knowledge, threatened claims or actions by any Business Employee against Seller or any Seller Affiliates under any worker’s compensation policy or long-term disability policy.

(l) To the knowledge of Seller and each Seller Affiliate, no Business Employee is obligated under any agreement or subject to any judgment, decree or order of any court or administrative agency that would interfere with such Business Employee’s efforts to promote the interests of the Business or that would interfere with the Business. To Seller’s and each Seller Affiliate’s knowledge, neither the execution nor delivery of this Agreement, nor the carrying on of the Business as presently conducted nor any activity of the Business Employees in connection with the carrying on of the Business as presently conducted or currently proposed to be conducted, will conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any agreement under which any of such Business Employees is now bound.

4.16 Compliance with Laws. Seller and each Seller Affiliate has to their knowledge complied in all material respects with, is not in violation of, and has not received any notices of violation with respect to, any foreign, federal, state, provincial or local statute, law or regulation related to the Business or the Acquired Assets.

4.17 Warranties; Indemnities. Except for warranties implied by law or those provided for in the Transferred Contracts or other documents or materials delivered to Buyer, neither Seller nor any Seller Affiliate has given any warranties or indemnities relating to products or technology sold or services rendered by Seller or any Seller Affiliates related to the Business or the Acquired Assets.

4.18 Complete Copies of Materials. Seller has delivered true and complete copies of each document (or summaries of same) that has been requested by Buyer or its counsel.

4.19 Suppliers and Customers. Except as disclosed in the Transferred Contracts delivered to Buyer, since December 31, 2002 no licensor, vendor, supplier, licensee or customer of Seller or any Seller Affiliate has cancelled or otherwise materially modified its relationship with Seller or any Seller Affiliate in a manner adverse to the Business or the Acquired Assets, taken as a whole, and

Exhibits

(i) no such Person has communicated in writing to the officers, directors or other senior managers of Seller any intention to do so, (ii) to the knowledge of Seller, no such Person has any intention to do so, and (iii) to the knowledge of Seller, the consummation of the transactions contemplated hereby will not adversely affect any of such relationships.

4.20 Sufficiency of Assets. The Seller Group owns or has sufficient rights to use all of the assets, tangible and intangible, necessary to operate the Business, and no other affiliate of Seller owns or has rights to use any assets, tangible or intangible, necessary to operate the Business.

4.21 Authority to Direct Seller Affiliates. Each Seller Affiliate is a direct or indirect wholly-owned subsidiary of Parent, and Parent has the authority to direct each Seller Affiliate to perform its obligations under this Agreement and Ancillary Agreements.

4.22 UAE Agreement. The UAE Agreement terminates on or before December 31, 2003, and the terms of exclusivity contained therein expire on such date.

4.23 Cryptomatic Notification. Seller has received notification of a claim of patent infringement from Cryptomatic in relation to custom code developed for BSS. The code which is the subject of the claim was developed solely for BSS and is not incorporated into any Product or anywhere else. Seller will indemnify, defend, and hold Buyer harmless from and against any Loss in connection with such claim. The provisions of this Section 4.23 shall survive the Closing.

4.24 Representations Complete. None of the representations or warranties made by Seller (as modified by the Disclosure Schedule) in this Agreement, and none of the statements made in any exhibit, schedule or certificate furnished by Seller pursuant to this Agreement contains, or will contain at the Closing Date, any untrue statement of a material fact, or omits or will omit at the Closing Date to state any material fact necessary in order to make the statements contained herein or therein, in the light of the circumstances under which made, not misleading. The information furnished on or in any documents mailed, delivered or otherwise furnished to the shareholders of Seller in connection with the solicitation of their consent to this Agreement and the Acquisition, will not contain, at or prior to the Closing Date, any untrue statement of a material fact and will not omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which made, not misleading.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer hereby represents and warrants to Seller and Parent as follows:

5.1 Organization. Buyer is a company duly organized and validly existing under the laws of the United States and State of Delaware.

Exhibits

5.2 Authorization. Buyer has all requisite power and authority to enter into this Agreement and each of the Ancillary Agreements to which it is a party and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and each of the Ancillary Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of Buyer, and no further corporate action is required on the part of Buyer or its shareholders to approve, adopt or authorize this Agreement, any of the Ancillary Agreements or any of the transactions contemplated hereby or thereby. This Agreement has been duly executed and delivered by Buyer and, assuming the due authorization, execution and delivery by Seller, constitutes the valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to the laws of general application relating to bankruptcy, insolvency and the relief of debtors and to rules of law governing specific performance, injunctive relief and other equitable remedies.

5.3 Noncontravention. The execution and delivery of this Agreement and the Ancillary Agreements to which Buyer is a party does not, and the consummation of the transactions contemplated hereby and thereby will not, conflict with (i) any provision of Buyer’s memorandum and articles of association; (ii) any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to it; or (iii) any contract or agreement to which it is a party or otherwise bound.

5.4 Consents. No consent, waiver, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity, is required by, or with respect to, Buyer in connection with the execution and delivery of this Agreement or the Ancillary Agreements to which Buyer is a party or the consummation of the transactions contemplated hereby or thereby.

ARTICLE 6

COVENANTS AND AGREEMENTS

6.1 Conduct of Seller Prior to the Closing. Between the date of this Agreement and the earlier to occur of the termination of this Agreement pursuant to Section 9.1 and the Closing, unless otherwise agreed in writing by Buyer, Seller will conduct the Business and operate the Acquired Assets in the usual, regular and ordinary course in substantially the same manner as heretofore conducted or operated; pay the debts and Taxes of the Business when due; pay or perform other obligations of the Business when due; use reasonable, good faith efforts to preserve intact the current business organization of Seller relating to the Business, keep available the services of the current officers, employees and agents of Seller relating to the Business, and maintain the relations and goodwill with the suppliers, customers, distributors, licensors, licensees, landlords, trade creditors, employees, agents, and others having business relationships with Seller relating to the Business; confer with Buyer concerning material business or operational matters relating to the Business; use reasonable, good faith efforts to maintain all of the Acquired Assets in their current condition and to promptly replace, repair or restore such Acquired Assets in the event of any damage to or destruction of any of the Acquired Assets prior to the Closing; and maintain the Books and Records in the usual, regular and ordinary manner, on a basis consistent with prior years; all with the goal of preserving unimpaired through the Closing the Acquired Assets and Seller’s current goodwill with regard to the

Exhibits

Business. Seller shall promptly respond to queries of Buyer concerning the status and operation of the Business and the Acquired Assets. In particular, Seller specifically agrees to continue the development of UniCERT Version 5.2 in accordance with the provisions of the development schedule annexed hereto as Exhibit F and to dedicate resources in such effort in accordance with its past practice. Except as otherwise agreed to in writing by Buyer, Seller shall not:

(a) purchase or enter into any inbound license agreement with respect to, the Intellectual Property Rights of any third party to be incorporated in or used in connection with the Products;

(b) sell, lease or otherwise transfer or dispose of, or enter into any outbound license agreement with respect to, any of the Acquired Assets with any third party, except for non-exclusive outbound license agreements entered into in the ordinary course of Business, consistent with past practice;

(c) enter into any Contract relating to (i) the sale, license or distribution of any Product, (ii) the provision of any services relating to the Business, or (iii) any of the Acquired Assets, except in the ordinary course of Business, consistent with past practice;

(d) change pricing or royalties charged to customers or licensees of Seller related to the Business, except in the ordinary course of Business, consistent with past practice;

(e) enter into any strategic arrangement or relationship or joint marketing arrangement or agreement relating to the Business;

(f) terminate the employment of, or give notice of termination of employment to, any Business Employee;

(g) hire any Business Employee;

(h) change, increase or amend the rate of remuneration or amount of bonuses or other benefits or any other terms of employment of any Business Employee;

(i) grant any severance or termination pay to any Business Employee, or adopt any new severance plan, amend or modify or alter in any manner any severance plan, agreement or arrangement relating to any Business Employee, except as may be required by applicable law;

(j) adopt or amend any Employee Plan;

(k) amend or modify, or violate the terms of, any of the Consent Required Contracts or Transferred Contracts;

(l) commence, settle, institute, prosecute, compromise any action, suit, proceeding, arbitration, or governmental or regulatory investigation or audit or obtain the release of any threatened action, suit, proceeding, arbitration, or governmental or regulatory investigation or audit involving or related to the Business or the Acquired Assets;

Exhibits

(m) take or agree in writing or otherwise to take, any of the actions described in (a) through (l) above, or any other action that would prevent Seller from performing or cause Seller not to perform any of its other covenants in this Agreement.

6.2 Notice of Certain Events. Buyer and Seller shall give prompt notice to the other of: (a) the occurrence or non-occurrence of any event, the occurrence or non-occurrence of which is likely to cause any representation or warranty of such party contained in this Agreement to be untrue or inaccurate at or prior to the Closing, and (b) any failure of such party to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder.

6.3 Circular. As soon as practicable following the date of this Agreement, Parent shall prepare and use all reasonable efforts to have cleared by the United Kingdom Listing Authority (“UKLA”) and thereafter send to its shareholders the requisite circular (including notice of the Shareholders’ Meeting) (the “Circular”) which will comply with all applicable requirements of law and the UKLA. In preparing the Circular, Parent shall notify Buyer promptly upon the receipt of any comments from the UKLA and shall consult and co-operate with the Buyer regarding all issues related to the Circular.

6.4 Meeting of Shareholders; Board Recommendation

(a) Shareholders’ Meetings. As soon as practicable following the date of this Agreement (and in any event within five weeks thereafter), Parent will take all action necessary in accordance with the rules of the UKLA to duly call, give notice of, convene and hold a meeting of its shareholders (the “Shareholders’ Meeting”) for the purpose of passing a separate ordinary resolution approving each of (i) the entering into of this Agreement by the Parent (the “Resolution”); and (ii) the payment to Buyer of the amounts disclosed in Section 9.3(ii). If the Resolution is not approved at the Shareholders’ Meeting and it appears likely that the Resolution would be approved at a further meeting of the Shareholders, Parent shall convene such further meeting to approve the Resolution and take all such other action as the Buyer may reasonably request to secure approval of the Resolution as soon as reasonably practicable.

(b) Board Recommendation. The Board of Directors of Parent (i) shall, in the Circular convening the Shareholders’ Meeting, recommend to its shareholders the passing of the Resolution, and (ii) subject to Section 6.5(c), shall not terminate, withdraw or contradict such recommendation prior to or at the Shareholders’ Meeting (or any adjournment thereof or any further meeting of the shareholders).

6.5 No Solicitation.

(a) Prior to termination of this Agreement and subject in each case to Section 6.5(c), any confidentiality obligations on Parent or any other laws or regulations applicable

Exhibits

to Parent, Parent shall not, nor shall it permit any of its subsidiaries or their respective officers, directors or employees (nor authorize or encourage any of its investment bankers or other advisers or representatives) (collectively in this Section 6.5, “Parent’s Representatives”) to (i) actively solicit, initiate or encourage the submission of any Conflicting Proposal, (ii) enter into any agreement with respect to, or approve or recommend, or propose to approve or recommend, any Conflicting Proposal or (iii) participate in any discussions or negotiations regarding, or furnish to any person any information with respect to, or take any other action to facilitate any enquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to, any Conflicting Proposal. Prior to completion or termination of this Agreement, and subject in each case to Section 6.5(c), Parent shall, and shall procure that the Parent’s Representatives shall, (i) notify third parties with whom Parent has commenced discussion in relation to a possible Code Offer prior to the date of this Agreement that Parent is seeking such offers only on the basis that such offers shall not constitute Conflicting Proposals, (ii) cease discussions with any such third party who indicates that it is only prepared to consider an offer which is a Conflicting Proposal, and (iii) not give to any party who may be considering an offer any information relating to the Business or the Acquired Assets unless required to do so by the Rules of the City Code on Takeovers and Mergers.

(b) Prior to termination of this Agreement, Parent shall promptly (and in no event later than one day after such occurrence) notify Buyer of any participation by Parent in discussions or negotiations entered into, as described in Section 6.5(a)(iii) above and whether or not the Directors of Parent have determined that Parent is required to participate in such discussions or negotiations, as required pursuant to the provisions of Section 6.5(c) below.

(c) Parent’s obligations under Section 6.4(b)(ii) and under Section 6.5(a) are subject to: (i) the fiduciary duties of the Directors of Parent duly to consider any Superior Proposal and, if required by such fiduciary duties, to terminate, withdraw or contradict such recommendation prior to or at the Shareholders’ Meeting (or any adjournment thereof or any further meeting of shareholders) having determined that a proposal (received other than in breach of clause 6.5(a)) is a Superior Proposal; and (ii) the obligations of Parent and such Directors under the City Code on Takeovers and Mergers or any other laws or regulations applicable to them which would require the taking of action otherwise prohibited by this Section.

(d) Before it can accept any Superior Proposal, and subject to the provisions of Section 6.4(c), any confidentiality obligations on Parent or any other laws or regulations applicable to Parent, Parent must notify Buyer of the material provisions of such Superior Proposal and that it intends to accept such proposal, and Parent must give Buyer a reasonable amount of time in order to have the opportunity to make a further offer in response to the Superior Proposal.

(e) For the purposes of this Section 6.5, (i) “Conflicting Proposal” means any proposal which could reasonably be expected to prevent or materially impede, interfere with or significantly delay the transactions contemplated by this Agreement, including any Code Offer (or an offer to purchase specific assets) which is on terms that are inconsistent with completion of the transactions contemplated by this Agreement, (ii) a “Code Offer” shall mean an offer to acquire all

Exhibits

or substantially all of the issued share capital of Parent duly made under the City Code on Takeovers and Mergers, and (iii) a “Superior Proposal” shall mean a proposal which constitutes a Conflicting Proposal, which has not been solicited, initiated or encouraged by Parent and/or the Parent’s Representatives in contravention of Section 6.5(a), and which will, in the reasonable good faith opinion of the Directors of Parent, be of more benefit to the shareholders of Parent than completion of this Agreement.

6.6 Access to Information. Between the date of this Agreement and the earlier of the Closing or the termination of this Agreement, Seller shall afford Buyer and its respective officers, employees, accountants, counsel, agents and other representatives, reasonable access during normal business hours upon reasonable prior notice to (i) all of the properties, books, contracts, commitments and records of the Business and the Acquired Assets, and (ii) all Business Employees.

6.7 Confidential Information. The parties shall comply with all of their respective obligations under the Confidentiality Agreement.

6.8 Public Disclosure. No party shall issue any statement or communication to any third party (other than to their respective agents) regarding the subject matter of this Agreement or the transactions contemplated hereby, including, if applicable, the termination of this Agreement and the reasons therefor, without the prior written consent of the other party, which consent shall not be unreasonably withheld, except that this restriction shall be subject to the parties’ respective obligations to comply with applicable securities laws.

6.9 Consents. Seller or a Seller Affiliate shall assign each of the Transferred Contracts to Buyer as of the Closing. Seller shall use reasonable efforts, during the period from the date of this Agreement until the Closing, to obtain the consents, waivers, approvals and assignments under the Consent Required Contracts as may be required in connection with the Acquisition so as to assign all rights of and benefits of Seller, to Buyer, and upon the receipt of such consent, waiver, approval or assignment, as applicable, such Consent Required Contract shall be moved to Schedule 1.1(dddd) from Schedule 1.1(u). Following the Closing, Seller shall continue to use reasonable efforts for a period of six months to obtain the consents, waivers, approvals and assignments to those Contracts identified as Consent Required Contracts on Schedule 1.1(u) that were not moved to Schedule 1.1(dddd) prior to the Closing and to the extent that Seller is able to obtain any such consents, waivers, approvals or assignments, such Consent Required Contracts shall be deemed to be Transferred Contracts for all purposes under this Agreement from the time such consent, waiver, approval or assignment was delivered to Buyer, notwithstanding anything else in this Agreement to the contrary. If any such consent, waiver, confirmation or approval is not obtained with respect to any Consent Required Contracts, then Seller and Buyer will cooperate to establish an arrangement reasonably satisfactory to Buyer and Seller under which Buyer would obtain, to the extent practicable, the claims, rights, and benefits and assume the corresponding liabilities and obligations thereunder in accordance with this Agreement.

6.10 Reasonable Efforts. Subject to the terms and conditions provided in this Agreement, the parties shall use reasonable efforts to promptly take, or cause to be taken, all actions, execute and

Exhibits

deliver such instruments, and to do promptly, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and effectuate the transactions contemplated hereby, to obtain all necessary waivers, consents and approvals and to effect all necessary registrations and filings and to remove any injunctions or other impediments or delays, legal or otherwise, in order to consummate and effectuate the transactions contemplated by this Agreement for the purpose of securing to the Parties the benefits contemplated by this Agreement. After the Closing, each party will use its reasonable efforts to cooperate to execute such applications, specifications, oaths, assignments and other instruments, and take such other reasonable actions, which are necessary to apply for or perfect the other party’s interest (i) in the case of Seller, in Seller’s retained Intellectual Property Rights and (ii) in the case of Buyer, in the Transferred Intellectual Property Rights and the Intellectual Property Rights included in the Transferred Technology. Notwithstanding anything in this Section 6.10 to the contrary, nothing herein shall require any party or any of its Seller Affiliates or affiliates to agree to any divestiture of any of its respective businesses, assets or properties, or otherwise agree to the imposition of any limitation on the ability of any of them to conduct their respective businesses or to own or exercise control of such businesses, assets or properties.

6.11 Employee Matters. The parties acknowledge and agree that it is their intention and belief that by virtue of the transactions anticipated hereunder, pursuant to the Transfer Regulations (European Communities (Protection of Employees on Transfer of Undertakings) Regulations, 2003) and applicable laws (the applicable law governing transfer of employees in UK, Holland, Germany, France and other European countries), the contracts of employment between the Seller and the Business Employees who accept Offer Letters from Buyer shall have effect on and after Closing as if originally made between the Buyer and the Employees. Accordingly, as and from Closing, the Buyer shall continue the employment of such Business Employees on the terms and conditions of employment which applied to such Business Employees prior to Closing. Seller shall indemnify Buyer against any costs, claims, liabilities and expenses in relation to the employment of the Business Employees during the period up to Closing. Buyer shall indemnify Seller against any costs, claims, liabilities and expenses in relation to the employment, or termination of employment, of the Business Employees accepting Offer Letters from the Buyer as and from Closing. Each of Seller and Buyer shall comply with its obligations under Regulation 8 of the Transfer Regulations and applicable laws and shall indemnify the other in respect of any breach of such Regulations and applicable laws. The Buyer ensures that where Business Employees are governed by US employment contracts those Business Employees will be offered terms and conditions no less favourable than those in existence.

Exhibits

Prior to the Closing Date and subject to Buyer receiving evidence that each such employee has a legal right to work in his or her country of current employment, each Key Employee and other Business Employees shall be given an Offer Letter by Buyer or an affiliate of Buyer. Such Offer Letters will, in addition to the terms identified above, provide that the offers of employment will be conditional on the completion of the transactions contemplated by this Agreement and that such offers of employment will be effective as of the Closing Date. Other than as required by applicable law or as set forth above, Buyer shall not be obligated to recognize or give credit for service or deemed service of the Offered Employees prior to the Closing Date.

The Seller Group agrees to administer the accrued benefits under the Employee Plans in respect of the Continuing Employees materially in accordance with (i) the terms thereof, (ii) all applicable laws, including, without limiting the generality of the foregoing, the applicable pension and tax legislation, and (iii) the administrative practices of the applicable pension regulator and tax authorities.

6.12 Covenant Not to Solicit.

(a) Beginning on the Closing Date and ending on the first anniversary of the Closing Date, Seller shall not directly or indirectly solicit, encourage or take any other action which is intended to induce or encourage any Continuing Employee to terminate his or her employment with Buyer, or hire any Continuing Employee.

(b) Beginning on the Closing Date and ending on the first anniversary of the Closing Date, Buyer shall not directly or indirectly solicit, encourage or take any other action which is intended to induce or encourage any employee of Seller Group (other than the Continuing Employees) to terminate his or her employment with Seller or any member of the Seller Group, or hire any employee of Seller Group (other than the Business Employees); provided, however, Buyer shall not be in breach of this provision if any employee of Seller Group (i) is involuntarily terminated as an employee of Seller or any member of the Seller Group; (ii) voluntarily and independently approaches and obtains employment with Buyer after a date which is at least six (6) months following the date that such employee is no longer employed by Seller or any member of the Seller Group, (iii) is presented to Buyer by an executive search firm or similar business engaged by Buyer in the ordinary course of Buyer’s business, or (iv) is presented to Buyer by any solicitation through the placement of general employment advertising, internet postings, or other publication for general circulation.

6.13 Transition. During the period between the signing of this Agreement and the Closing, Seller and Buyer shall cooperate with one another in creating joint plans for the transition of the Business and the Acquired Assets from Seller to Buyer at and after the Closing. Seller shall not take any action that is intended or likely to have the effect of discouraging any licensor, customer,

Exhibits

supplier, or other business associate of the Business from maintaining the same business relationship with Buyer after the Closing as it maintained with Seller prior to the Closing. For a period of six (6) months following the Closing, Seller shall use its reasonable efforts to refer all customer inquiries relating to the Business to Buyer.

6.14 Allocation of the Purchase Price. The Seller Group and Buyer agree to work together between the date hereof and the Closing Date to allocate the Purchase Price among the Acquired Assets and to report the sale and purchase of the Purchased Assets for all federal, provincial and local tax purposes in a manner consistent with such allocation. Buyer and the Seller Group agree that if any taxing authority does not agree with any allocation of the Purchase Price agreed to between the parties in accordance with the foregoing, the Seller Group and Buyer shall use their best efforts and good faith to agree upon a different allocation acceptable to the relevant authority and, if the parties are so able to agree, they shall thereafter amend the allocation and their income tax returns accordingly; provided, however that nothing contained herein shall be construed so as to require any party to commence or participate in any litigation or administrative process challenging the determination so made by any applicable authority.

6.15 Mail Handling. After the Closing Date, to the extent Seller receives any mail or packages addressed and delivered to Seller but related to the Business or the Acquired Assets, Seller agrees that it will promptly transfer or deliver or cause to be promptly transferred or delivered to Buyer.

6.16 Obligations of Seller Affiliates. Parent shall cause and direct each Seller Affiliate to (i) perform the obligations of such Seller Affiliate under this Agreement and Ancillary Agreements; and (ii) take all such actions as are necessary to effect the transactions contemplated by this Agreement and Ancillary Agreements.

6.17 Additional Documents, Further Assurances and Cooperation; Power of Attorney. Effective at the Closing, Seller hereby constitutes and appoints Buyer the true and lawful attorney of Seller, with full power of substitution, in the name of Seller or Buyer, but on behalf of and for the benefit of Buyer and at Buyer’s cost and expense: (i) to demand and receive from time to time any and all the Acquired Assets and to make endorsements and give receipts and releases for and in respect of the same and any part thereof; (ii) with Seller’s consent (not to be unreasonably withheld), to institute, prosecute and settle any and all actions or proceedings that Buyer may deem proper in order to collect, assert or enforce any claim, right or title of any kind in or to the Acquired Assets; (iii) with Seller’s consent (not to be unreasonably withheld), to defend or settle any or all actions proceedings in respect of any of the Acquired Assets (other than actions or proceedings which Seller acknowledges and agrees in a written instrument signed by Seller and delivered to Buyer constitute Excluded Liabilities); and (iv) to do all such acts and things in relation to the matters set forth in the preceding clauses (i) through (iii) as Buyer shall deem necessary or desirable. Seller hereby acknowledges that the appointment hereby made and the powers hereby granted are coupled with an interest and are not and shall not be revocable by it in any manner or for any reason. Seller shall deliver to Buyer at the Closing an acknowledged power of attorney to the foregoing effect executed by Seller.

Exhibits

6.18 Confidential Information known to Continuing Employees. The Parties agree that Seller’s Confidential Information related to the Business and known to the Continuing Employees is included in the Acquired Assets under this Agreement. Accordingly, to the extent a Continuing Employee hired by Buyer would, as a result of an employment or other agreement between Seller and that Continuing Employee, be restricted from disclosing Confidential Information to Buyer or from using information on Buyer’s behalf or otherwise in connection with the Continuing Employee’s employment by Buyer, Seller agrees to, and hereby does waive, in favor of Buyer, any right that it may have to enforce such restrictions and consents to Buyer’s use and disclosure of such information for its own benefit and on its own behalf, without restriction.

6.19 Knowledge of Buyer. Any due diligence review, audit or other investigation or inquiry undertaken or performed by or on behalf of Buyer shall not limit, qualify, modify or amend the representations, warranties or covenants of, or indemnities by, Seller made or undertaken pursuant to this Agreement, irrespective of the knowledge and information received (or which should have been received) therefrom by Buyer. However, Buyer acknowledges and confirms that at the time of entering into this Agreement it is not aware of any matter or thing which constitutes a breach of any of the representations and warranties other than as has been disclosed to Buyer, such as could give rise to a claim under this Agreement.

6.20 Books and Records. After the Closing Date and for a period consistent with Buyer’s standard record retention policies, Buyer will, in connection with any Tax or other matter relating to the Business for any period ending on or prior to the Closing Date retain and, as Seller may reasonably request, permit Seller and its agents to inspect and copy, at Seller’s expense, all Books and Records that pertain to the matter in question and relating to the periods ending on or prior to the Closing date. After the Closing Date, Seller shall provide Buyer and its agents reasonable access to books and records retained by Seller for any reasonable business purpose specified by Buyer.

6.21 Additional Payment. INTENTIONALLY OMITTED

6.22 UAE Agreement. Parent shall not extend the termination date of the UAE Agreement as it relates to the Product beyond December 31, 2003.

6.23 Excluded Tangible and Other Fixed Assets. Buyer shall have the right to elect, at its sole discretion, not to have transferred to it any tangible assets related to the Business other than the Tangible and Other Fixed Assets, and shall notify Seller of its election thereof prior to the Closing Date.

Exhibits

6.24 Acknowledgement and Covenant by Buyer. Buyer acknowledges that Seller and Parent have entered into (i) the Distribution Agreement and (ii) the Franchise Agreement and acknowledges that it has received copies of those agreements. Furthermore, Buyer:

(a) acknowledges and agrees that it shall acquire all assets related to the Business subject to the rights granted to SecureNet under the Distribution Agreement; and

(b) undertakes to use all reasonable efforts to negotiate and enter a reseller/distribution agreement with BTJ on terms substantially similar to those contained in the Franchise Agreement and to grant BTJ an exclusive right to sell in Japan, all products acquired by Buyer under the Acquisition constituting “Products” and “Non-Software Products” (as each are defined in the Franchise Agreement).

ARTICLE 7

CONDITIONS TO THE CLOSING

7.1 Conditions to Each Party’s Obligation. The respective obligations of Buyer and Seller to effect the Acquisition shall be subject to the satisfaction at or prior to the Closing of the following conditions:

(a) No Injunctions or Restraints. No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Acquisition shall be in effect, nor shall any proceeding brought by an administrative agency or commission or other governmental authority or instrumentality, domestic or foreign, seeking any of the foregoing be pending.

(b) No Order. No Governmental Entity shall have enacted, issued, promulgated or enforced any statute, rule, regulation, executive order, decree, injunction or other order (whether temporary, preliminary or permanent) which is in effect and which has the effect of making the Acquisition or the other transactions contemplated by this Agreement or any of the Ancillary Agreements illegal or otherwise prohibit the consummation of any of the foregoing.

(c) Shareholder Approval. This Agreement shall have been approved and adopted by an ordinary resolution at a duly convened meeting of the shareholders of Parent, in accordance with the rules of the UKLA.

(d) Governmental Approvals. All approvals from Governmental Entities, if any, required to consummate the transactions contemplated hereby shall have been timely obtained.

Exhibits

7.2 Condition to Buyer’s Obligation. The obligation of Buyer to effect the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of each of the following conditions, any of which may be waived, in writing, exclusively by Buyer:

(a) Representations and Warranties. The representations and warranties of Seller in this Agreement shall have been true and correct on the date of this Agreement and shall have been true and correct in all material respects on and as of the Closing (other than those representations and warranties which were qualified by terms such as “material,” “materially,” or “Material Adverse Effect,” which representations and warranties so qualified shall have been true and correct in all respects on and as of the Closing).

(b) Covenants. Seller shall have performed and complied in all material respects with all covenants and obligations under this Agreement required to be performed and complied with by Seller as of or prior to the Closing, in particular its agreement to continue development of UniCERT Version 5.2 in accordance with the development schedule set forth on Exhibit G.

(c) Litigation. There shall be no material action, suit, proceeding, arbitration, or governmental or regulatory investigation or audit of any nature pending against (i) Seller, its properties or any of its officers or directors arising out of, or in any way connected with, the transactions contemplated hereby, or (ii) the Business, the Products, the Acquired Assets or the Offered Employees.

(d) Third Party Consents. Subject to clause 6.9, Buyer shall have received all consents, waivers, approvals, and assignments identified on Schedule 7.2(d), which Schedule may be updated by Buyer, at its sole discretion, between the date hereof and October 6, 2003.

(e) Release of Liens. Buyer shall have received from Seller a duly and validly executed copy of all agreements, instruments, certificates and other documents, in form and substance reasonably satisfactory to Buyer, that are necessary or appropriate to evidence the release of all Liens identified on Schedule 7.2(e).

(f) No Material Adverse Effect. There shall not have occurred any event or condition of any character that has had or is reasonably likely to have a Material Adverse Effect.

(g) New Employment Arrangements. Each of the Key Employees and eighty percent (80%) of other Business Employees to whom Buyer has given an Offer Letter shall have entered into employment arrangements with Buyer or one of its affiliates pursuant to his or her execution of an Offer Letter which indicates that, conditioned upon the Closing, he or she agrees to be an employee of Buyer or one of its affiliates.

(h) Deliveries. Seller shall have delivered to Buyer executed copies of the Ancillary Agreements to which it is a party, and such Ancillary Agreements shall be in full force and effect.

Exhibits

(i) Allocation of the Purchase Price. Seller and Buyer shall have agreed to an allocation of the Purchase Price among the Acquired Assets in a manner reasonably acceptable to Buyer.

(j) Certificate of Seller. Buyer shall have received a certificate, validly executed by an executive officer of Seller for and on its behalf, to the effect that:

(i) All representations and warranties made by Seller in this Agreement were true and correct on the date of this Agreement and are true and correct in all material respects on and as of the Closing (other than those representations and warranties which were qualified by knowledge or terms such as “material,” “materially,” or “Material Adverse Effect,” which representations and warranties so qualified are true and correct in all respects on and as of the Closing); provided that the representation in the first sentence of Section 4.10(n) will be considered to be qualified to the Seller’s knowledge for purposes of this Section;

(ii) All covenants and obligations under this Agreement to be performed or complied with by Seller on or prior to the Closing have been so performed or complied with in all material respects; and

(iii) The conditions to the obligations of Buyer set forth in this Section 7.2 have been satisfied (unless otherwise waived in accordance with the terms of this Agreement).

(k) Certificate of Secretary of Parent. Buyer shall have received a certificate, validly executed by the Secretary or an Assistant Secretary of Parent, certifying as to (i) the terms and effectiveness of the Constating Documents of Parent, Seller and any Seller Affiliates executing any Ancillary Agreements, (ii) the valid adoption of resolutions of the Board of Directors of Parent approving this Agreement and the consummation of the transactions contemplated hereby and (iii) the incumbency of the officers executing this Agreement or any of the Ancillary Agreements to which Seller or any Seller Affiliate is a party.

(l) Retail Sales Tax Certificate. Buyer shall have been furnished by Seller or a Seller Affiliate any retail tax certificate or the like required by any applicable taxing authority.

(m) Intellectual Property Deliveries. Seller shall have:

(i) Delivered to Buyer a duly completed form of registration and transfer for the Copyright in the current version of the Product, in a form acceptable to Buyer;

(ii) Delivered to Buyer a complete and accurate list of the files comprising the current version of the Product, which will be added to Schedule 1.1(ggg);

(iii) Delivered to Buyer documents demonstrating that Seller has taken all reasonable actions to have Seller be listed as the owner of record at the PTO for any Patents included in the Transferred Intellectual Property Rights.

Exhibits

(n) Restriction Release. With respect to each Restriction, Parent shall have delivered to Buyer (i) a fully executed copy of the associated Restriction Release and (ii) an officer’s certificate executed by an executive officer of Parent stating that each Restriction is no longer in effect and that each Restriction Release has been duly authorized, executed and delivered by Parent and is a binding and enforceable Contract.

(o) Amendment of Agreement. The Source Code Escrow Agreement among Baltimore Technologies Limited, NCC Escrow International Limited and Baltimore Technologies Japan Co., Ltd. (the “BTJ Source Code Agreement”) shall have been amended such that the source code release events in such agreement shall contain only the standard release events described paragraph 6.1 of the NCC Escrow Form attached as Schedule 7.2(n) and Buyer shall be reasonably satisfied, and an officer of the Seller shall certify, that (a) no events shall have occurred prior to Closing that would result in a source code release event under the BTJ Source Code Escrow Agreement and that (b) consummation of the transactions contemplated by this Agreement, in and of itself, would not result in a source code release event under such agreement.

7.3 Condition to Seller’s Obligation. The obligation of Seller to effect the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of each of the following conditions, any of which may be waived, in writing, exclusively by Seller:

(a) Representations and Warranties. The representations and warranties of Buyer in this Agreement shall have been true and correct on the date of this Agreement and shall have been true and correct in all material respects on and as of the Closing (other than those representations and warranties which were qualified by terms such as “material,” “materially,” or “Material Adverse Effect,” which representations and warranties so qualified shall have been true and correct in all respects on and as of the Closing).

(b) Covenants. Buyer shall have performed and complied in all material respects with all covenants and obligations under this Agreement required to be performed and complied with by Buyer as of or prior to the Closing.

(c) Deliveries. Buyer shall have delivered to Seller executed copies of the Ancillary Agreements to which it is a party, and such Ancillary Agreements shall be in full force and effect.

(d) Officer’s Certificate of Buyer. Seller shall have received a certificate, validly executed by an executive officer of Buyer for and on its behalf, to the effect that:

(i) All representations and warranties made by Buyer in this Agreement were true and correct on the date of this Agreement and are true and correct in all material respects on and as of the Closing (other than those representations and warranties which were qualified by terms such as “material,” “materially,” or “Material Adverse Effect,” which representations and warranties so qualified are true and correct in all respects on and as of the Closing).

Exhibits

(ii) All covenants and obligations under this Agreement to be performed or complied with by Buyer on or prior to the Closing have been so performed or complied with in all material respects; and

(iii) The conditions to the obligations of Seller set forth in this Section 7.3 have been satisfied (unless otherwise waived in accordance with the terms of this Agreement).

(e) Certificate of Secretary of Buyer. Seller shall have received a certificate, validly executed by the Secretary or an Assistant Secretary of Buyer, certifying as to (i) the terms and effectiveness of the Constating Documents of Buyer, (ii) the valid adoption of the resolutions of the Board of Directors of Buyer approving this Agreement and the consummation of the transactions contemplated hereby, and (iii) the incumbency of the officers executing this Agreement or any of the Ancillary Agreements to which Buyer is a party.

ARTICLE 8

SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

8.1 Survival. The representations and warranties of Seller and Parent contained in this Agreement, or in any certificate or other instrument delivered pursuant to this Agreement, shall terminate on the date which is one year following the Closing Date (the “Indemnification Period”); provided, however that the representations and warranties of Seller contained in Section 4.2 shall survive indefinitely, and the representations and warranties contained in Section 4.7 and Section 4.10 shall not terminate until the expiration of the applicable statute of limitations. The representations warranties of Buyer contained in this Agreement, or in any certificate or other instrument delivered pursuant to this Agreement, shall terminate at the Closing.

8.2 Indemnification.

(a) Parent agrees to indemnify and hold the Indemnified Parties harmless against all Losses paid, incurred, accrued or sustained by the Indemnified Parties (or any of them), directly or indirectly, as a result of (i) any breach of a representation or warranty of Seller or Parent contained in this Agreement (including the Disclosure Schedule) or in any certificate, instrument, or other document delivered pursuant to this Agreement, (ii) any failure by Seller or Parent to perform or comply with any covenant applicable to it contained in this Agreement or any Ancillary Agreement to which it is a party, (iii) any Excluded Liabilities, (iv) Seller’s or Parent’s failure to deliver (or have delivered) to Buyer any of the Acquired Assets, or (v) any failure of Seller to obtain Restriction Release for each Restriction; provided, however, that Parent’s indemnification obligations pursuant to Section 9.2(a)(v) shall terminate immediately upon payment by Parent to Buyer of the amount described in Section 7.23.

Exhibits

8.3 Limitations on Indemnification.

(a) Parent shall not be liable under Section 8.2 for any Loss paid, incurred, accrued or sustained by an Indemnified Party as a result of any breach or inaccuracy of a representation or warranty of Seller or Parent contained in this Agreement or in any certificate, instrument, or other document delivered pursuant to this Agreement until the Indemnified Parties (or any of them), have delivered to Seller or Parent one or more Officer’s Certificates identifying Losses paid, incurred, accrued or sustained are in excess of the Basket Amount in which case the Indemnified Parties, or any of them, shall be entitled to recover all Losses so identified, to the extent such Losses have been finally determined to be payable by Seller or Parent pursuant to Section 8.4 or Section 8.5. Notwithstanding the immediately preceding sentence, Buyer shall be entitled to recover for, and the Basket Amount shall not apply as a threshold to, (i) any Loss incurred, accrued or sustained by an Indemnified Party arising or resulting from fraud or fraudulent misrepresentation with respect to representations and warranties of Seller or Parent contained in this Agreement or in any certificate, instrument, or other document delivered pursuant to this Agreement, or (ii) any Losses incurred as a result of Excluded Liabilities.

(b) Notwithstanding anything in this Agreement to the contrary, the maximum aggregate liability of Parent under this Agreement shall not exceed fifteen percent (15%) of the Purchase Price; provided, however, that notwithstanding the foregoing, nothing contained in this Section 8.3(b) or elsewhere in this Agreement shall be deemed to limit, restrict or otherwise impair or deny any claim or right that Buyer or any other Indemnified Party may have against Parent or any other person as a result of: (i) intentional, knowing or willful breach of this Agreement, fraud, or similar circumstances or (ii) Losses incurred as a result of Excluded Liabilities. Buyer agrees that its exclusive remedy against Seller and Parent in respect of Losses is as set forth in this Article 8. Buyer agrees that its indemnification rights pursuant to this Article 8 shall be its sole and exclusive remedy against Parent with respect to any Loss paid, incurred, accrued or sustained after the Closing.

8.4 Indemnification Procedure. An Indemnified Party seeking indemnification shall deliver an Officer’s Certificate to Seller. Seller may object to such any claim set forth in such Officer’s Certificate by providing written notice to such Indemnified Party specifying the basis for Seller’s objection, within ten (10) business days following delivery of such Officer’s Certificate to Seller. If an objection to the amount of Losses specified in such Officer’s Certificate is provided by Seller, and Seller and the Indemnified Party are unable to resolve such dispute after good faith discussions within ten (10) business days following the delivery of such objection notice, such dispute shall be resolved in accordance with a mediation proceeding conducted by the Centre for Dispute Resolution, in London, England, in accordance with theist Model Mediation Procedures. If no such objection is made, Seller shall promptly pay the claim.

8.5 Third Party Claims. In the event Buyer becomes aware of a third-party claim that Buyer reasonably believes may result in a demand for indemnification pursuant to this Article 8, Buyer shall notify Seller of such claim, and Seller shall be entitled, at its expense, to participate in, but not to determine or conduct, the defense of such claim. Buyer shall have the right in its sole discretion to conduct the defense of and settle any such claim; provided, however, that except with the consent of the Seller, no settlement of any such claim with third-party claimants shall be determinative of the

Exhibits

amount of Losses relating to such matter. In the event that Seller has consented to any such settlement, Seller shall have no power or authority to object under any provision of this Article 8 to the amount of any claim by Buyer against Seller with respect to such settlement. If there is a third-party claim that, if adversely determined would give rise to a right of recovery for Losses hereunder, then any amounts incurred or accrued in defense of such third-party claim, regardless of the outcome of such claim, shall be deemed Losses hereunder.

ARTICLE 9

TERMINATION, AMENDMENT AND WAIVER

9.1 Termination. Except as provided in Section 9.2, this Agreement may be terminated and the Acquisition abandoned at any time prior to the Closing:

(a) By the mutual written agreement of the parties;

(b) By either Buyer or Seller, if (i) the Closing has not occurred by December 31, 2003; provided, however, that the right to terminate this Agreement under this Section 9.1(b), (i) shall not be available to any party whose willful failure to fulfill any obligation hereunder or other breach of this Agreement has been the cause of, or resulted in, the failure of the Closing to occur on or before such date; (ii) there shall be in effect a final nonappealable order of a federal, state or provincial court preventing consummation of the Acquisition; or (iii) there shall be any statute, rule, regulation or order enacted, promulgated or issued or deemed applicable to the Acquisition by any Governmental Entity that would make consummation of the Acquisition illegal;

(c) By Buyer, if it is not in material breach of its obligations under this Agreement and there has been a breach of any representation, warranty, covenant or agreement contained in this Agreement on the part of Seller and (i) Seller is not using its commercially reasonable efforts to cure such breach, or has not cured such breach within 15 days, after notice of such breach has been give by Buyer to Seller in accordance with Section 10.1; provided, however, that, no cure period shall be required for any such breach which by its nature cannot be cured and (ii) as a result of such breach, one or more of the conditions set forth in Section 7.1 or Section 7.2 would not be satisfied at or prior to the Closing;

(d) By Seller, if it is not in material breach of its obligations under this Agreement and there has been a breach of any representation, warranty, covenant or agreement contained in this Agreement on the part of Buyer and (i) Buyer is not using its commercially reasonable efforts to cure such breach, or has not cured such breach within 15 days, after notice of such breach has been give by Seller to Buyer in accordance with Section 10.1; provided, however, that, no cure period shall be required for any such breach which by its nature cannot be cured and (ii) as a result of such breach, one or more of the conditions set forth in Section 7.1 or Section 7.3 would not be satisfied at or prior to the Closing;

Exhibits

(e) By Buyer, if there shall have occurred any event or condition of any character that has had a Material Adverse Effect;

(f) By Buyer, if there shall be any action taken, or any statute, rule, regulation or order enacted, promulgated or issued after the date of this Agreement by any Governmental Entity, which would (i) prohibit or materially and adversely restrict Buyer’s ownership or operation of any portion of the Business of the Acquired Assets or (ii) compel Buyer to dispose of or hold separate all or any portion of the Acquired Assets or the Business as a result of the Acquisition; or

(g) By either Buyer or Seller if (i) the Resolution is not duly passed at the Shareholders’ Meeting (or any adjournment thereof) or at any further meeting required to be convened under Section 6.4; provided, however, that the right to terminate this Agreement under this Section 9.1(g) shall not be available to Seller where the failure to obtain approval of the Resolution shall have been caused by the action or failure to act of Seller or its Board of Directors, except to the extent otherwise permitted by Section 6.5; or (ii) Seller enters into an agreement to complete a transaction based on a Conflicting Proposal in compliance with Section 6.5.

(h) By Buyer upon any failure by Parent to comply with the requirements of Section 6.5(b).

9.2 Procedure for and Effect of Termination.

(a) In the event of the termination of this Agreement by any of the parties in accordance with Section 9.1, written notice to the non-terminating party shall be given by the terminating party in accordance with Section 10.1.

(b) In the event of the termination of this Agreement as provided in Section 9.1, this Agreement shall forthwith become void and there shall be no liability or obligation on the part of Buyer or Seller, or their respective officers, directors or stockholders, provided that each Party shall remain liable for any fraud, intentional misrepresentation or willful or intentional breach of this Agreement prior to its termination; and provided further, that the provisions of Section 6.7, Article 10, this Section 9.2 and the applicable definitions in Article 1 shall remain in full force and effect and survive any termination of this Agreement.

9.3 Payment by Seller. Seller agrees that it shall pay to Buyer (i) GBP 50,000 (which Seller acknowledges is not subject to approval of Parent’s shareholders in general meeting); and (ii) subject to approval of the shareholders of Parent in general meeting in accordance with the Listing Rules of the UKLA, GBP 200,000, in each case exclusive of any value added tax chargeable thereon, (in aggregate the “Termination Fee”) as compensation for its out-of-pocket costs and expenses incurred in connection with the entering into of this Agreement and the transactions contemplated by this Agreement in the event this Agreement is terminated by Buyer or Seller:

(a) pursuant to Section 9.1(g)(i), provided that within 12 months of the date of termination of this Agreement, Seller shall have completed a transaction based on a Conflicting Proposal (in which case Seller shall pay the Termination Fee to Buyer upon consummation of such transaction); or

Exhibits

(b) pursuant to Section 9.1(g)(ii) (in which case Seller shall pay the Termination Fee to Buyer within two business days of the Termination of this Agreement).

9.4 Amendment. This Agreement may be amended by the parties only by the execution and delivery of an instrument in writing signed on behalf of both parties.

9.5 Extension; Waiver. At any time prior to the Closing, Buyer, on the one hand, and Seller, on the other hand, may, to the extent legally allowed, (a) extend the time for the performance of any of the obligations of the other party, (b) waive any inaccuracies in the representations or warranties made to such party contained herein or in any certificate, instrument or other document delivered pursuant the this Agreement, on or prior to the Closing Date, (c) waive compliance with any of the agreements or conditions for the benefit of such party contained herein and (d) waive any conditions to the Closing contained herein. No such waiver shall operate as a waiver of any further or other inaccuracies or breaches. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in a written instrument and signed and delivered on behalf of such party.

ARTICLE 10

MISCELLANEOUS

10.1 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by pre-paid overnight or same-day commercial messenger or courier service, or mailed by registered or certified mail (return receipt requested) or sent via facsimile (with acknowledgment of complete transmission) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

(a) if to Buyer, to:

beTRUSTed US Inc.

00000 Xxxxxx Xxxx Xxxxxxx

Xxxxxxxx, Xxxxxxxx 00000

Fax:

(b) if to Parent, to:

Baltimore Technologies plc

Xxxxxxxxxx Xxxxx

Xxxx Xxxx

Xxxxx Xxxxxxxxx

Xxxxxxxxxxxxx

XX0 0XX

Fax: x00 0000 000 000

Exhibits

(c) if to Seller, to:

Baltimore Technologies Limited

00 Xxxxxxxx Xxxxxx

Xxxxxx 0, Xxxxxxx

Fax:

with a copy to (which shall not constitute notice):

All such notices, requests and other communications will (a) if delivered personally to the address as provided in this Section 10.1, be deemed given upon delivery, (b) if delivered by facsimile transmission to the facsimile number as provided for in this Section 10.1, be deemed given upon facsimile confirmation, and (c) if delivered by messenger or courier to the address as provided in this Section 10.1, be deemed given on the earlier of the first business day following the date sent by such messenger or courier upon receipt (in each case regardless of whether such notice, request or other communication is received by any other Person to whom a copy of such notice is to be delivered pursuant to this Section 10.1). Any party from time to time may change its address, facsimile number or other information for the purpose of notices to that party by giving notice specifying such change to the other parties hereto.

10.2 Entire Agreement. This Agreement, the Exhibits and Schedules hereto, the Ancillary Agreements and the documents and instruments and other agreements among the parties referenced herein or therein constitute the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and thereof.

10.3 No Third Party Beneficiaries. This Agreement is solely for the benefit of (a) Buyer and its successors and permitted assigns with respect to the obligations of Seller under this Agreement, (b) Seller and its successors and permitted assigns with respect to the obligations of Buyer under this Agreement; and (c) SecureNet and BTJ with respect to the obligations of Buyer under clause 6.24 of this Agreement. This Agreement shall not be deemed to confer upon or give to any other third party (other than the successors and permitted assigns of Buyer and Seller and SecureNet and BTJ, upon which Buyer, Seller and Parent expressly agree to confer rights and benefits (as described above) under this Agreement) any remedy, claim, right to reimbursement, cause of action or other right by virtue of the Contracts (Rights of Third Parties) Xxx 0000, unless expressly provided for in this Agreement.

Exhibits

10.4 Headings. The headings and table of contents used in this Agreement have been inserted for convenience of reference only and do not define, limit, describe, explain, modify, amplify or add to the interpretation, construction or meaning of any provision of, or scope or intent of, this Agreement nor in any way effect this Agreement.

10.5 Severability. In the event that any provision of this Agreement or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other Persons or circumstances will be interpreted so as reasonably to effect the intent of the parties. The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.

10.6 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of England and Wales, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.

10.7 Consent to Jurisdiction. In the event either party to this Agreement commences any litigation, proceeding or other legal action in connection with or relating to this Agreement, any Ancillary Agreement or any matters contemplated hereby or thereby, each party to this Agreement hereby (a) agrees that any such litigation, proceeding or other legal action may be brought in a court of competent jurisdiction located within England and Wales, (b) agrees that in connection with any such litigation, proceeding or action, such party will consent and submit to personal jurisdiction in any such court described in clause (a) of this Section 10.7 and to service of process upon it in accordance with the rules and statutes governing service of process, (c) agrees to waive to the full extent permitted by applicable law any objection that it may now or hereafter have to the venue of any such litigation, proceeding or action in any such court or that any such litigation, proceeding or action was brought in an inconvenient forum, (d) agrees as an alternative method of service to service of process in any such litigation, proceeding or action by mailing of copies thereof to such party at its address set forth in Section 10.1, (e) agrees that any service made as provided herein shall be effective and binding service in every respect, and (f) agrees that nothing herein shall affect the rights of either party to effect service of process in any other manner permitted by applicable law.

10.8 Waiver of Jury Trial. EACH OF BUYER AND SELLER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF BUYER OR SELLER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF, INCLUDING THE REPUDIATION OF THIS AGREEMENT.

Exhibits

10.9 Assignment. No party may assign or delegate either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other party, except that Buyer make assign its rights and obligations under this Agreement to a subsidiary of Buyer without the consent of Seller, provided that such assignment shall not release Buyer from any of its obligations under this Agreement.

10.10 Successors and Assigns. The obligations of Buyer and each member of the Seller Group under this Agreement shall be binding upon each of them and their respective successors and permitted assigns. The rights of Buyer and each member of the Seller Group under this Agreement shall inure to the benefit of each of them and their respective successors and permitted assigns. Seller shall ensure that any third party purchasing the shares or assets of any member of the Seller Group shall continue to be bound by the obligations hereunder or the Seller Group shall retain sufficient resources to ensure that it is able to continue to provide the benefits hereunder.

10.11 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party, it being understood that all Parties need not sign the same counterpart.

10.12 Fees and Expenses. Subject to Section 8.2 all fees, costs and expenses incurred by a party in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees, costs and expenses, including fees, costs and expenses of any broker, finder, attorney or other similar agent.

10.13 Service of Process. Buyer shall at all times maintain an agent for service of the process in England. Such agent shall be Xxxxx Xxxxx of Buyer’s offices in Bedfont Lakes. Any claim form, judgment or other notice of legal process shall be sufficiently served on Buyer if delivered to such agent at its address for the time being. Buyer undertakes not to revoke the authority of such agent, and if for any reason such agent no longer serves as agent of Buyer to receive service of process, Buyer shall promptly appoint another person as its agent (with an address for service within the jurisdiction of the English courts) and notify the other parties thereof.

10.14 Exhibits and Schedules. The Exhibits and Schedules to this Agreement, including the Disclosure Schedule, form an integral part of this Agreement and are hereby incorporated by reference into this Agreement wherever reference is made to them to the same extent as if they were set out in full.

10.15 Other Remedies. Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy.

Exhibits

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Exhibits

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

beTRUSTed HOLDINGS INC.

By:

Name:

Title:

BALTIMORE TECHNOLOGIES LIMITED

By:

Name:

Title:

BALTIMORE TECHNOLOGIES PLC

By:

Name:

Title: