Exhibit 10.3
Dated:19th June 2002
5CT/Z07132/EJL/CRH
SHARE PURCHASE AGREEMENT
between
Redwave plc
as Vendor
GlobalWave Group plc
as Group
and
Wave Systems Corp.
as Purchaser
relating to
the sale and purchase of the whole issued share capital of GlobalWave
Limited and its wholly owned subsidiaries
Simmons&Simmons
XxxxXxxxx Xxx Xxxxxxxxx Xxxxxx Xxxxxx XX0X 0XX
T 020 7628 2020 F 020 7628 2070 DX Box No 12
ii
CONTENTS
1. Interpretation........................................................ 2
1.1 Definitions.................................................. 2
1.2 Construction of certain references........................... 4
1.3 Headings..................................................... 4
1.4 Schedules.................................................... 4
2. Sale of shares........................................................ 4
2.1 Sale and purchase............................................ 4
2.2 Full Title Guarantee......................................... 5
2.3 No sale of part only......................................... 5
3. Consideration......................................................... 4
4. Condition............................................................. 5
4.1 Condition.................................................... 5
4.2 Satisfaction................................................. 6
4.3 Disclosure of difficulties in satisfying the Condition....... 6
4.4 Waiver....................................................... 6
5. Completion............................................................ 6
5.1 Completion Escrow............................................ 6
5.2 Material Adverse Change...................................... 6
5.3 Vendor's obligations......................................... 7
5.4 Purchaser's obligations...................................... 8
5.5 Insurances................................................... 8
6. Warranties............................................................ 8
6.1 General...................................................... 8
6.2 Warranties by Vendor and Group............................... 8
6.3 Purchaser's Remedies......................................... 9
6.4 Warranties by Purchaser...................................... 9
6.5 Undertaking by Purchaser..................................... 10
7. Post Completion Obligations........................................... 10
7.1 Books and Records............................................ 10
8. External Claims....................................................... 11
8.1 Notification and consultation................................ 11
8.2 Conduct of External Claims by Vendor......................... 11
8.3 Reports by Vendor............................................ 12
8.4 Conduct of External Claims by the Purchaser.................. 12
9. Confidentiality....................................................... 12
9.1 Confidentiality.............................................. 12
9.2 Permitted disclosures........................................ 13
9.3 Continuance of restrictions.................................. 13
10. Announcements......................................................... 13
10.1 Restrictions................................................. 13
10.2 Permitted announcements...................................... 13
10.3 Continuance of restrictions.................................. 13
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11. Provisions relating to this Agreement................................. 14
11.1 Successors and assigns....................................... 14
11.2 Whole agreement and variations............................... 14
11.3 Agreement survives Completion................................ 14
11.4 Rights etc cumulative and other matters...................... 14
11.5 Invalidity................................................... 14
11.6 Counterparts................................................. 14
11.7 Costs........................................................ 15
11.8 Notices...................................................... 15
12. Law and Jurisdiction.................................................. 16
12.1 English Law.................................................. 16
12.2 Jurisdiction................................................. 16
12.3 Contracts (Rights of Third Parties) Act 1999................. 16
schedule 1 : THE COMPANY................................................... 16
schedule 2 : THE SUBSIDIARIES.............................................. 17
schedule 3 : WARRANTIES.................................................... 19
1. Construction.......................................................... 19
2. Warranties............................................................ 19
3. The Company and the Vendor............................................ 19
3.1 Capacity..................................................... 19
3.2 Ownership of Sale Shares..................................... 20
3.3 Loans owing to or by Vendor.................................. 20
4. The Company's Constitution............................................ 20
4.1 Share Capital................................................ 20
4.2 Options etc.................................................. 20
4.3 Memorandum and Articles...................................... 20
5. The Company and its investments....................................... 20
5.1 Particulars of the Company and Subsidiaries.................. 20
5.2 Investments, associations and branches....................... 20
6. The Company and the law............................................... 21
6.1 Orders, decrees and judgements............................... 21
6.2 Litigation................................................... 21
6.3 Employees.................................................... 21
6.4 Licence...................................................... 21
6.5 Equipment.................................................... 22
schedule 4 : THE AUDITED ACCOUNTS.......................................... 23
schedule 5 : EQUIPMENT LIST............................................... 50
schedule 6 : AGREED FORM DOCUMENTS......................................... 52
THIS AGREEMENT is dated the 19th day of June 2002 and made
BETWEEN:
(1) REDWAVE PLC, (the "VENDOR"), registered in England and Wales as company
number 03838649 and having its registered office at 00 Xxxxxxx Xxx,
Xxxxxxx, Xxxxxx XX0 0XX;
(2) GLOBALWAVE GROUP PLC, ("GROUP"), registered in England and Wales as
company number 14134697 and having its registered office at 00 Xxxxxxx
Xxx, Xxxxxxx, Xxxxxx XX0 0XX.; and
(3) WAVE SYSTEMS CORP., (the "PURCHASER"), a NASDAQ listed company with
symbol "WAVX" and having its registered office at 000 Xxxxxxxx Xxxxxx,
Xxx, Xxxxxxxxxxxxx, XX00000 XXX.
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BACKGROUND:
The Vendor wishes to sell and the Purchaser wishes to acquire the entire issued
share capital of GlobalWave Limited, which owns the entire issued share capital
of Wave Europe Limited and The Hub Post Productions Limited on and subject to
the terms of this Agreement.
THE PARTIES AGREE THAT:
1. INTERPRETATION
1.1 DEFINITIONS
In this Agreement where the context admits:
"AFFILIATE" means, in relation to a body corporate, any subsidiary or
holding company of such body corporate, and any subsidiary of any such
holding company for the time being.
"AGREED FORM" means, in relation to any document, a document in the
terms signed or initialled by or on behalf of the parties for
identification.
"AUDITED ACCOUNTS" means the audited balance sheet of the Company and
the Subsidiaries made up as at the Balance Sheet Date and the audited
profit and loss account of the Company and the Subsidiaries in respect
of the financial year ended on the Balance Sheet Date including, in
each case, the notes thereto and the directors' report and auditors'
report.
"BALANCE SHEET DATE" means 30 June 2001.
"BUSINESS DAY" means a day (other than a Saturday or Sunday) on which
banks are open for ordinary banking business in London.
"COMPANY" means GlobalWave Limited, a company registered in England and
Wales under company number 03402827 and incorporated on 08 July 1997 as
a private company limited by shares under the Companies Xxx 0000
details of which are set out in Schedule 1.
"COMPANIES ACTS" means statutes from time to time in force concerning
companies including (without limitation) the Companies Xxx 0000, the
Companies Xxx 0000, Part V of the Criminal Justice Xxx 0000 and the
Companies Consolidation (Consequential Provisions) Xxx 0000.
"COMPLETION" means completion of the sale and purchase of the Sale
Shares in accordance with clause 5.
"COMPLETION DATE" means 24 July 2002, but if the Condition has not been
satisfied or waived on or before such date, "COMPLETION DATE" shall
mean such other date as the parties may agree but, in any event, not
later than 30 August 2002.
"COMPLETION ESCROW" means the pre-completion meeting set out in
clause 5.1
"CONDITION" means the condition set out in clause 4.1.
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"CONSIDERATION SHARES" means common stock of the Purchaser credited as
fully paid together with all registration rights relating thereto.
"CONTINUING DIRECTORS" means in relation to the Company or the
Subsidiaries, its directors remaining in office after the Completion
Date.
"DEED OF RELEASE" means the deed between the parties releasing certain
obligations.
"DIRECTORS" means in relation to the Company or the Subsidiaries, its
directors.
"ENCUMBRANCE" means any mortgage, charge, pledge, lien, assignment,
hypothecation, security interest (including any created by law), or
other security agreement or arrangement but does not include any
retention of title provision.
"ESCROW AGENT" means Simlaw Services Limited, a company owned by
Xxxxxxx & Xxxxxxx.
"ESCROW LETTER" means a letter to be signed in Agreed Form by the
Escrow Agent, the Vendor, Group and the Purchaser relating to the
arrangements for Completion Escrow.
"FIRST INSTALMENT" means the amount of Consideration Shares so
designated in clause 3.1(A).
"PURCHASER'S GROUP" means the Purchaser and each of its Affiliates
including, after Completion, the Company and the Subsidiaries.
"SALE SHARES" means the shares to be bought and sold pursuant to clause
2.1 being all the issued shares in the capital of the Company.
"SECOND INSTALMENT" means such further amount of Consideration Shares
to be held in escrow by the Escrow Agent and issued to the Vendor in
accordance with clause 5.5(D).
"XXXXXXX & XXXXXXX" means Xxxxxxx & Xxxxxxx, the solicitors to Redwave
plc, whose address is CityPoint, Xxx Xxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX.
"SUBSCRIPTION AGREEMENT" means the agreement between the Vendor and the
Purchaser relating to certain matters connected with the holding of the
Consideration Shares.
"SUBSIDIARIES" means Wave Europe Limited, a company registered in
England and Wales under number 03406429 and incorporated on 16 July
1997 as a private company limited by shares under the Companies Xxx
0000 and The Hub Post Productions Limited, a company registered in
England and Wales under number 04361126 which is dormant, further
details of which are set out in schedule 2.
"TOTAL CONSIDERATION" means the First Instalment Shares and the Second
Instalment Shares.
"VENDOR'S GROUP" means the Vendor and each of its Affiliates other than
the Company and the Subsidiaries.
"WARRANTIES" means the warranties by the Vendor and Group implied by
the words "with full title guarantee" in clause 2.2 and the Warranties
set out in clause 6, and in paragraphs 3 - 6 of Schedule 3, and all
other warranties, covenants and indemnities contained in this Agreement
or implied by law.
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1.2 CONSTRUCTION OF CERTAIN REFERENCES
In this Agreement, where the context admits:
(A) words and phrases the definitions of which are contained or
referred to in Part XXVI Companies Act 1985 shall be construed
as having the meanings thereby attributed to them;
(B) references to, or to any provision of, any treaty, statute,
directive, regulation, decision, order, instrument, by-law, or
any other law of, or having effect in, any jurisdiction
("LAWS") shall be construed also as references to all other
Laws made under the Law referred to, and to all such Laws as
amended, re-enacted, consolidated or replaced or as their
application is modified by other Laws as at the date of this
Agreement;
(C) where any statement is to the effect that the Vendor is not
aware of any matter or circumstance, or is a statement
qualified by the expression "SO FAR AS THE VENDOR IS AWARE" or
"TO THE BEST OF THE VENDOR'S KNOWLEDGE AND BELIEF" or any
similar expression, that statement shall refer to the state of
the actual knowledge of the Directors of the Vendor and of no
other persons and neither the Vendor nor such Directors shall
be obliged to enquire of any other persons;
(D) references to clauses and schedules are references to clauses
of and schedules to this Agreement, references to paragraphs
are, unless otherwise stated, references to paragraphs of the
schedule in which the reference appears;
(E) references to the singular shall include the plural and vice
versa and references to the masculine, the feminine and the
neuter shall include all such genders;
(F) "PERSON" includes any individual, partnership, body corporate,
corporation sole or aggregate, state or agency of a state, and
any unincorporated association or organisation, in each case
whether or not having separate legal personality; and
(G) "COMPANY" includes any body corporate.
1.3 HEADINGS
The headings and sub-headings are inserted for convenience only and
shall not affect the construction of this Agreement.
1.4 SCHEDULES
Each of the schedules shall have effect as if set out herein.
2. SALE OF SHARES
2.1 SALE AND PURCHASE
Subject to the terms of this Agreement, the Vendor shall sell and the
Purchaser shall purchase, free from all Encumbrances and together with
all rights now or hereafter attaching thereto the entire issued share
capital of the Company comprising of 660,000 ordinary class A shares
and 440,000 ordinary class B shares of (pound)1 each.
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2.2 FULL TITLE GUARANTEE
Upon Completion the Vendor shall be deemed to have given to the
Purchaser in relation to the Sale Shares sold by it the same covenants
for title in relation to the sale of the Sale Shares as are implied by
Part 1 of the Law of Property (Miscellaneous Provisions) Xxx 0000 where
a disposition is expressed to be made with full title guarantee.
2.3 NO SALE OF PART ONLY
Neither the Vendor nor the Purchaser shall be obliged to complete the
sale and purchase of any of the Sale Shares unless the sale and
purchase of all the Sale Shares is completed.
3. CONSIDERATION
3.1 The Total Consideration for the Sale Shares shall be the allotment to
the Vendor of the aggregate of:-
(A) 900,000 Consideration Shares credited as fully paid together
with all registration rights relating thereto (the "FIRST
INSTALMENT SHARES"); and
(B) 800,000 Consideration Shares credited as fully paid together
with all registration rights relating thereto to be held in
escrow (the "SECOND INSTALMENT SHARES").
3.2 The Consideration Shares shall rank pari passu and as a single class
with the common stock of the Purchaser in issue at the date of this
Agreement, and shall carry the right to receive in full all dividends
and other distributions declared, made or paid after the date of this
Agreement.
3.3 The First Instalment Shares shall be allotted to the Vendor on
Completion in accordance with clause 5.4(C).
3.4 The Second Instalment Shares shall be held in escrow by the Escrow
Agent in accordance with clause 5.1 and released to the Vendor in
accordance with clause 5.4(D).
3.5 The Vendor and Group hereby agree to assume and pay all liabilities of
the Company and the Subsidiaries on Completion (whether such
liabilities are known or unknown and including any contingent
liabilities).
4. CONDITION
4.1 CONDITION
Completion is conditional upon the passing at a duly convened and held
general meeting of Group of a resolution in Agreed Form to approve the
sale of the Sale Shares and other arrangements on the terms of this
Agreement;
In the event that the above Condition shall not have been satisfied or
waived by the Purchaser or the Vendor on or before 30 August 2002 this
Agreement shall lapse and no party shall make any claim against any
other in respect hereof, save for any antecedent breach and subject to
clause 11.7.
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4.2 SATISFACTION
The Vendor and Group shall use their reasonable endeavours to satisfy
or procure the satisfaction of the Condition set out in clause 4.1 and
shall notify the Purchaser immediately upon the satisfaction thereof.
The Vendor and Group undertake to the Purchaser that the Directors will
post a circular to their shareholders on or around 20 June 2002
recommending such shareholders to vote in favour of the resolution
referred to in clause 4.1 and stating that the directors are of the
opinion that the sale is in the best interests of such shareholders.
4.3 DISCLOSURE OF DIFFICULTIES IN SATISFYING THE CONDITION
Should the Vendor or the Purchaser become aware of anything which will
or may prevent any of the Conditions from being satisfied, it shall
forthwith disclose the same to the other of them.
4.4 WAIVER
The Purchaser or the Vendor may waive in whole or in part all or any of
the Conditions or extend the period in which the Conditions are is to
be satisfied.
5. COMPLETION
5.1 COMPLETION ESCROW
(A) On the Business Day after the satisfaction of the Condition
contained in clause 4.1 (expected to be on 24 July 2002) the
parties hereto shall hold a pre-completion meeting at the
offices of the Escrow Agent at which they shall sign the
Escrow Letter and deliver to the Escrow Agent all documents
referred to in the Escrow Letter.
(B) Following the Escrow Letter being signed by the parties,
Completion shall take place.
5.2 MATERIAL ADVERSE CHANGE
Notwithstanding any other provision of this Agreement, the Vendor shall
not be obliged to proceed with the purchase of the Consideration Shares
and shall be entitled by notice to the Purchaser to rescind this
Agreement without any liability whatsoever should any of the following
events occur or be discovered at any time after the entry into the
Agreement and before Completion namely:-
(A) if there is a material deterioration in the share price of
the Purchaser;
(B) if there is a material deterioration in the financial
position, profitability, or turnover of the Purchaser and its
Affiliates as shown in the last Audited Accounts or in their
prospects;
(C) a deterioration occurs in the general economic position of the
US economy which is reasonably likely to result in a material
deterioration in the financial position, profitability or
turnover of the Purchaser and its Affiliates taken as a whole
as shown in the last Audited Accounts or in their prospects;
or
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(D) the Purchaser or any of its Affiliates ceases its business for
any reason, becomes insolvent, becomes the subject of a bona
fide petition for, or enters into, liquidation or
administration or suffers the appointment of a receiver or
administrative receiver of the whole over any part of its
assets or undertaking, or makes, or seeks to make any
composition or arrangement with its creditors.
5.3 VENDOR'S OBLIGATIONS
On Completion the Vendor shall subject to the due performance by the
Purchaser of its obligations under clause 5.4:
(A) deliver to the Purchaser:
(1) transfers of the Sale Shares duly executed by the
registered holders thereof in favour of the Purchaser
or its nominees together with the relative share
certificates or an indemnity in respect of any missing
certificates;
(2) such waivers or consents as the Purchaser may require
to enable the Purchaser or its nominees to be
registered as holders of the Sale Shares;
(3) powers of attorney in Agreed Form;
(4) a legal opinion from Xxxxxxx & Xxxxxxx as to the
capacity of Group and Vendor to enter into this
Agreement in Agreed Form;
(5) the signed copy of Deed of Release executed by the
Vendor and Group of the Purchaser's Group; and
(6) the Subscription Agreement signed by the Vendor and
Group.
(B) procure that the Directors (other than the Continuing
Directors) and the secretary or secretaries of the Company and
the Subsidiaries retire from all their offices and employments
with the Company and the Subsidiaries;
(C) procure the resignation of the auditors of the Company and the
Subsidiaries in accordance with s.392 Companies Xxx 0000;
(D) deliver to the Purchaser as agent for the Company and the
Subsidiaries:
(1) all the statutory and other books of the Company and
the Subsidiaries and its certificates of incorporation,
any certificates of incorporation on change of name and
common seals; and
(2) certificates in respect of all issued shares in the
capital of the Subsidiaries and transfers of all shares
in any Subsidiary not registered in the name of the
Company or another Subsidiary in favour of such persons
as the Purchaser shall direct;
(E) procure board meetings of the Company and of the Subsidiaries
to be held at which there shall be:
(1) passed a resolution to approve, in the case of the
Company, the transfers of the Sale Shares and, in the
case of the Subsidiaries, the share transfers referred
to in clause 5.3(D)(2) and (subject only to due
stamping) to register, in the register of members, each
transferee as the holder of the shares concerned;
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(2) appointed as directors and/or secretary such persons as
the Purchaser may nominate such appointments to take
effect immediately; and
(3) tendered and accepted the resignations and
acknowledgements of the directors and secretary
referred to in clause 5.3(B) each such acceptance to
take effect at the close of the meeting;
(F) procure the discharge of all guarantees and like obligations
given by the Company or any of the Subsidiaries in respect of
the obligations of any member of the Vendor's Group.
5.4 PURCHASER'S OBLIGATIONS
On Completion the Purchaser shall:
(A) deliver to the Vendor a legal opinion from Xxxxxxx Xxxx LLP as
to the Purchaser's capacity to enter into the Subscription
Agreement,
(B) deliver to the Vendor a signed copy of the Deed of Release
executed by the Purchaser.
(C) allot and issue to the Vendor the First Instalment Shares (to
be credited to the account of the Vendor's nominee), and shall
deliver to the Vendor's nominee a share certificate for the
First Instalment Shares; and
(D) allot and issue to the Escrow Agent the Second Instalment
Shares (to be credited to the account of the Escrow Agent's
nominee), and shall deliver to the Escrow Agent's nominee a
share certificate for the Second Instalment Shares.
5.5 INSURANCES
The Vendor shall be entitled to cancel all insurances of the Company
and the Subsidiaries which also cover companies within the Vendor's
Group, with effect from Completion.
6. WARRANTIES
6.1 GENERAL
The Vendor and Group hereby jointly and severally warrant to the
Purchaser in the terms of the Warranties subject to the provisions of
this Agreement. Any sum payable by the Vendor or Group in respect of
any breach of the Warranties shall be treated as a reduction in the
Consideration and may be deducted from the Second Instalment Shares (on
the basis of the price per share of the Consideration Shares on their
date of issue and the exchange rates prevailing on that date).
6.2 WARRANTIES BY VENDOR AND GROUP
Each of the Warranties given by the Vendor and Group is given on the
basis that it will remain true and accurate in all respects up to and
including Completion and the Vendor and Group undertake to disclose
forthwith in writing to the Purchaser any matter or thing which may
arise or become known to the Vendor or Group after the date of this
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Agreement and before Completion which is inconsistent with any of the
Warranties or which is material to be known to the Purchaser. In the
event of it becoming apparent on or before Completion that the Vendor
or Group is in breach of any of the Warranties or any other term of
this Agreement the Purchaser may at its option either:
(1) rescind this Agreement by notice in writing to the
Vendor; or
(2) proceed to Completion but without prejudice to its right to
claim for breach of this Agreement or the Warranties.
6.3 PURCHASER'S REMEDIES
(A) The Purchaser acknowledges that it has not been induced to
enter into this Agreement by, and that it does not in
connection with this Agreement or its subject matter rely on,
any representation, warranty, promise or assurance by the
Vendor or any other person, except for the Warranties. The
Purchaser agrees that, except as otherwise provided herein and
subject to clause 6.3(B), it shall have no right or remedy in
respect of, and shall not in connection with any claim arising
in relation to this Agreement, or their respective subject
matters plead or assert the making or existence of, any
representation, warranty, promise or assurance save for those
therein contained in respect of which the Purchaser shall have
no right to rescind or terminate this Agreement and the only
remedy of the Purchaser shall be damages for breach of this
Agreement.
(B) Nothing in this clause 6.3 shall exclude or affect any right
or remedy available to the Purchaser in respect of fraud.
(C) The Purchaser acknowledges that its legal advisers have
explained to it the effect of this clause 6.3.
6.4 WARRANTIES BY PURCHASER
The Purchaser warrants to the Vendor as follows:
(A) the Purchaser has the requisite power and authority to enter
into and perform this Agreement and any other agreement
referred to herein to which it is or has agreed to become a
party (the "PURCHASER DOCUMENTS");
(B) this Agreement constitutes and the Purchaser Documents will,
when executed, constitute binding obligations of the Purchaser
in accordance with their respective terms;
(C) the Purchaser has paid its debts as such debts become due and
has not admitted in writing its inability to pay its debts
generally;
(D) the Purchaser has not made a general assignment for the
benefit of its creditors;
(E) no proceedings have been instituted by or against the
Purchaser seeking to adjudicate it as bankrupt or insolvent,
or seeking liquidation, winding up, dissolution,
reorganization, arrangement, adjustment, protection, relief or
composition of its debts under any law relating to bankruptcy,
insolvency, liquidation, dissolution or reorganization or
relief of its debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee or similar
official for it or any substantial part of its property;
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(F) the Purchaser has sufficient working capital to carry on its
business in the ordinary and usual course for a period of 12
months from the date of this Agreement;
(G) the Purchaser has obtained all necessary shareholder and board
approvals in respect of the entry into this Agreement and the
Purchaser Documents; and
(H) the execution and delivery of, and the performance by the
Purchaser of its obligations under, this Agreement and the
Purchaser Documents will not:
(1) be or result in a breach of any provision of the
memorandum or articles of association of the
Purchaser;
(2) be or result in a breach of, or constitute a default
under, any instrument to which the Purchaser is a party
or by which the Purchaser is bound and which is
material in the context of the transactions
contemplated by this Agreement;
(3) be or result in a breach of any order, judgment or
decree of any court or governmental agency to which the
Purchaser is a party or by which the Purchaser is bound
and which is material in the context of the
transactions contemplated by this Agreement; or
(4) save as provided herein require the Purchaser to obtain
any consent or approval of, or give any notice to or
make any registration with, any governmental or other
authority which has not been obtained or made at the
date hereof both on an unconditional basis and on a
basis which cannot be revoked (save pursuant to any
legal or regulatory entitlement to revoke the same
other than by reason of any misrepresentation or
misstatement); and
(I) the Purchaser has immediately available on an unconditional
basis (subject only to Completion) the necessary resources to
meet its obligations under this Agreement and the Purchaser
Documents.
Each of the foregoing warranties given by the Purchaser (the
"PURCHASER'S WARRANTIES") is given on the basis that it will remain
true and accurate in all respects up to and including Completion and
the Purchaser undertakes to forthwith disclose in writing to the Vendor
any matter or thing which may arise or become known to the Purchaser
after the date of this Agreement and before Completion which is
inconsistent with any of the Purchaser's Warranties or which is
material to be known to the Vendor accepting the consideration
stipulated by this Agreement. In the event of it becoming apparent on
or before Completion that the Purchaser is in breach of any of the
Purchaser's Warranties or any other term of this Agreement the Vendor
may at its option either:
(1) rescind this Agreement by notice in writing to the
Purchaser; or
(2) proceed to Completion but without prejudice to its
right to claim for breach of this Agreement or the
Purchaser's Warranties.
6.5 UNDERTAKING BY PURCHASER
The Purchaser agrees and undertakes that (in the absence of fraud or
except as otherwise provided herein) it has no rights against and shall
not make any claim against any member of the Vendor's Group (other than
the Vendor) or any present or former employee, director, agent or
officer of any member of the Vendor's Group in connection with this
Agreement or its subject matter.
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7. POST COMPLETION OBLIGATIONS
7.1 BOOKS AND RECORDS
The Purchaser shall procure that:-
(A) the Company and the Subsidiaries shall preserve until the
sixth anniversary of Completion all books, records and
documents of the Company and the Subsidiaries which are at
Completion in the possession under the control of each of them
or insofar as the same record matters occurring on or before
Completion; and
(B) until the sixth anniversary of Completion (or in the event of
any claim being made by the Purchaser under the Warranties
until such later time as the same is determined) the Vendor
and its agents, accountants, solicitors and other professional
advisers shall be allowed the right to inspect and, at the
Purchaser's expense, take copies of the books, records and
documents referred to in clause 7.1(A) (but only in relation
to matters recorded therein which occurred on or before
Completion) at all reasonable times upon the Vendor giving
reasonable notice of such requirement to the Company or the
relevant Subsidiary.
8. EXTERNAL CLAIMS
8.1 NOTIFICATION AND CONSULTATION
If the Purchaser or any other member of the Purchaser's Group becomes
aware of any actual or threatened claim, demand or proceeding against
any member of the Purchaser's Group (an "EXTERNAL CLAIM"), or of any
fact or matter which may give rise to an External Claim, in relation to
which it appears that the Purchaser or any other member of the
Purchaser's Group is, or might be or become, entitled to claim against
the Vendor in respect of any of the Warranties:-
(A) the Purchaser shall, or shall procure that such other member
of the Purchaser's Group shall, as soon as reasonably
practicable after so becoming aware and in any event within 7
Business Days notify the Vendor in writing; and
(B) the Purchaser shall thereafter consult with the Vendor in
respect of the External Claim and permit, and procure that any
relevant member of the Purchaser's Group shall permit, the
Vendor and its advisers reasonable access to relevant
employees, premises, chattels, documents and records
(including the right to take copies at the Vendor's expense of
such documents and records) for the purposes of investigating
the matter and enabling the Vendor to take any action
permitted by this clause 8.
8.2 CONDUCT OF EXTERNAL CLAIMS BY VENDOR
Subject to the Vendor indemnifying the Purchaser or other relevant
member of the Purchaser's Group against any liabilities, losses or
expenses which it may reasonably suffer or incur thereby and which it
would not otherwise suffer or incur:
(A) the Vendor shall be entitled by notice in writing to the
Purchaser at any time to require that the Vendor shall
thereafter have the sole conduct and control on behalf of the
Purchaser or other member of the Purchaser's Group of any
External Claim and following such notice, without prejudice to
the generality of the foregoing, the
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Vendor shall in its absolute discretion be entitled to avoid,
dispute, resist, settle, compromise, defend or appeal the
External Claim and the Purchaser shall not do and shall
procure that no member of the Purchaser's Group shall do
anything inconsistent therewith;
(B) the Purchaser shall and shall procure that each member of the
Purchaser's Group shall give to the Vendor all such
information and assistance as the Vendor may reasonably
require for any purpose referred to in clause 8.2(A),
including without limitation instructing any such solicitors,
Counsel or other professional advisers as the Vendor may
nominate to act on behalf of the Purchaser or other member of
the Purchaser's Group but in accordance with the Vendor's
instructions.
8.3 REPORTS BY VENDOR
The Vendor shall keep the Purchaser informed of all material
developments in relation to any External Claim in respect of which the
Vendor has served a notice pursuant to clause 8.2(A) by providing
written quarterly reports containing such information as the Purchaser
shall reasonably require.
8.4 CONDUCT OF EXTERNAL CLAIMS BY THE PURCHASER
Where the Vendor has not by a notice pursuant to clause 8.2(A) assumed
sole conduct and control in relation to an External Claim the Purchaser
shall and shall procure that each relevant member of the Purchaser's
Group shall:
(A) keep the Vendor informed of all material developments in
relation to the External Claim by providing written quarterly
reports containing such information as the Vendor shall
reasonably require;
(B) not make any admission of liability, agreement, settlement or
compromise with any third party in relation to the External
Claim without the prior written consent of the Vendor; and
(C) take all actions that the Vendor may reasonably request to
avoid, dispute, resist, defend or appeal the External Claim.
9. CONFIDENTIALITY
9.1 CONFIDENTIALITY
Subject to clause 9.2 and to clause 10, each party:
(A) shall treat as strictly confidential the provisions of this
Agreement and the process of their negotiation and all
information about the other party obtained or received by it
as a result of negotiating, entering into or performing its
obligations under this Agreement ("CONFIDENTIAL INFORMATION");
and
(B) shall not, except with the prior written consent of each other
party (which shall not be unreasonably withheld or delayed),
publish or otherwise disclose to any person any Confidential
Information.
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9.2 PERMITTED DISCLOSURES
Clause 9.1 shall not apply if and to the extent that the party
disclosing Confidential Information can demonstrate that:
(A) such disclosure is required by law or by any securities
exchange or regulatory or governmental body having
jurisdiction over it (including but not limited to the London
Stock Exchange, the Panel on Take-overs and Mergers and the
Serious Fraud Office) and whether or not the requirement has
the force of law; or
(B) such disclosure is to its professional advisers in relation to
the negotiation entry into or performance of this Agreement or
any matter arising out of the same;
(C) such disclosure is required to facilitate the satisfaction of
the Condition; or
(D) the Confidential Information concerned was lawfully in its
possession (as evidenced by written records) prior to its
being obtained or received as described in clause 9.1(A); or
(E) the Confidential Information concerned has come into the
public domain other than through its fault or the fault of any
person to whom such Confidential Information has been
disclosed in accordance with clause 9.1(B).
9.3 CONTINUANCE OF RESTRICTIONS
The restrictions contained in this clause 9 shall survive Completion
and shall continue without limit of time.
10. ANNOUNCEMENTS
10.1 RESTRICTIONS
Subject to clause 10.2 and whether or not any restriction contained in
clause 9 applies, no party to this Agreement shall make any public
announcement concerning the provisions or subject matter of this
Agreement or containing any information about the other party without
the prior written approval of the other (which shall not be
unreasonably withheld or delayed).
10.2 PERMITTED ANNOUNCEMENTS
Clause 10.1 shall not apply if and to the extent that such announcement
is required by law or by any securities exchange or regulatory or
governmental body having jurisdiction over it (including but not
limited to the London Stock Exchange, The Panel on Take-overs and
Mergers and the Serious Fraud Office) and whether or not the
requirement has the force of law and provided that any such
announcement shall be made only after consultation with the other
party.
10.3 CONTINUANCE OF RESTRICTIONS
The restrictions contained in this clause 10 shall survive until
Completion has taken place.
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11. PROVISIONS RELATING TO THIS AGREEMENT
11.1 SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and enure for the benefit of the
successors of the parties but shall not be assignable.
11.2 WHOLE AGREEMENT AND VARIATIONS
(A) This Agreement, together with any documents referred to in it,
constitutes the whole agreement between the parties relating
to its subject matter and supersedes and extinguishes any
prior drafts, agreements, and undertakings, whether in writing
or oral, relating to such subject matter.
(B) No variation of this Agreement shall be effective unless made
in writing and signed by each of the parties.
11.3 AGREEMENT SURVIVES COMPLETION
The Warranties and all other provisions of this Agreement, in so far as
the same shall not have been performed at Completion, shall remain in
full force and effect notwithstanding Completion.
11.4 RIGHTS ETC CUMULATIVE AND OTHER MATTERS
(A) The rights, powers, privileges and remedies provided in this
Agreement are cumulative and are not exclusive of any rights,
powers, privileges or remedies provided by law or otherwise.
(B) No failure to exercise nor any delay in exercising any right,
power, privilege or remedy under this Agreement shall in any
way impair or affect the exercise thereof or operate as a
waiver thereof in whole or in part.
(C) No single or partial exercise of any right, power, privilege
or remedy under this Agreement shall prevent any further or
other exercise thereof or the exercise of any other right,
power, privilege or remedy.
11.5 INVALIDITY
If any provision of this Agreement shall be held to be illegal, void,
invalid or unenforceable under the laws of any jurisdiction, the
legality, validity and enforceability of the remainder of this
Agreement in that jurisdiction shall not be affected, and the legality,
validity and enforceability of the whole of this Agreement in any other
jurisdiction shall not be affected.
11.6 COUNTERPARTS
This Agreement may be executed in any number of counterparts, which
shall together constitute one Agreement. Any party may enter into this
Agreement by signing any such counterpart.
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11.7 COSTS
Save as otherwise expressly provided herein, each party shall bear its
own costs arising out of or in connection with the preparation,
negotiation and implementation of this Agreement.
11.8 NOTICES
(A) Any notice or other communication required to be given under
this Agreement or in connection with the matters contemplated
by it shall, except where otherwise specifically provided, be
in writing in the English language and shall be addressed as
provided in this clause 11.8 and may be:
(1) personally delivered, in which case it shall be deemed
to have been given upon delivery at the relevant
address; or
(2) if within the United Kingdom, sent by first class
pre-paid post, in which case it shall be deemed to have
been given two Business Days after the date of posting;
or
(3) if from or to any place outside the United Kingdom,
sent by pre-paid priority airmail, in which case it
shall be deemed to have been given seven Business Days
after the date of posting; or
(4) sent by fax, in which case it shall be deemed to have
been given when despatched, subject to confirmation of
uninterrupted transmission by a transmission report
provided that any notice despatched by fax after 17.00
hours (at the place where such fax is to be received)
on any day shall be deemed to have been received at
08.00 on the next Business Day.
(B) The addresses and other details of the parties referred to in
this clause 11.8(B) are, subject to clause 11.8(C):
Name: Redwave plc
For the attention of: Xxxxx Xxxxx
Address: 00 Xxxxxxx Xxx
Xxxxxxx
Xxxxxx
Xxxx Xxxxxxxx XX0 0XX
Fax number: x0000 (0) 0000 000 000
Name: Wave Systems Corp.
For the attention of: Xxxxxx Xxxxxxx
Address: 000 Xxxxxxxx Xxxxxx
Xxx
Xxxxxxxxxxxxx
XX00000 XXX
Fax number: x000 000 000 0000
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(C) Any party to this Agreement may notify the other parties of
any change to its address or other details specified in clause
11.8(B), provided that such notification shall only be
effective on the date specified in such notice or five
Business Days after the notice is given, whichever is later.
12. LAW AND JURISDICTION
12.1 ENGLISH LAW
This Agreement shall be governed by, and construed in accordance with,
English law.
12.2 JURISDICTION
In relation to any legal action or proceedings to enforce this
Agreement or arising out of or in connection with this Agreement
("PROCEEDINGS") each of the parties irrevocably submits to the
exclusive jurisdiction of the English courts and waives any objection
to Proceedings in such courts on the grounds of venue or on the grounds
that the Proceedings have been brought in an inappropriate forum.
12.3 CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
No person who is not a party to this Agreement shall have any right
under the Contracts (Rights of Third Parties) Xxx 0000 to enforce any
term of this Agreement.
AS WITNESS the hands of the duly authorised representatives of the parties on
the date first before written.
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