Document/Exhibit Description Pages Size
1: 10-K Annual Report 65 388K
2: EX-2.03 Business Sale Agreement 39 141K
3: EX-3.02 Certificate of Amendment 1 8K
4: EX-3.03 Amended and Restated Bylaws 17 104K
6: EX-10.07 Offer Letter 3 20K
5: EX-10.3 Amended and Restated Stock Option Plan 6 37K
7: EX-10.31 Key Employee Agreement for Matthew Christiano 9 48K
8: EX-10.32 Key Employee Agreement for Sallie Calhoun 10 49K
9: EX-10.33 Standard Office Lease 31 147K
10: EX-21.01 List of Subsidiaries 1 6K
11: EX-23.01 Consent of Independent Auditors 1 7K
EXHIBIT 2.03
LINKLATERS
& ALLIANCE
--------------------------------------------------------------------------------
[** Confidential treatment has been requested for certain provisions of this
document, which information has been separately filed with the Commission and
the appropriate Section marked with a [*] ]
Dated 4 October 2000
PRODUCTIVITY THROUGH SOFTWARE PLC
and
C-DILLA LIMITED
and
MR JOHN ROWLINSON
and
MACROVISION CORPORATION
BUSINESS SALE AGREEMENT
relating to the Sale and Purchase
of part of the Software Business of
PRODUCTIVITY THROUGH SOFTWARE PLC
LINKLATERS
One Silk Street
London EC2Y 8HQ
Telephone: (44-020) 7456 2000
Facsimile: (44-020) 7456 2222
Ref: JAYG
Table of Contents
Clause Page
1 Interpretation.....................................................1
2 Agreement to sell the Business....................................10
3 Consideration.....................................................12
4 Completion........................................................15
5 Post Completion Obligations.......................................16
6 Warranties........................................................19
7 Contracts and Third Party Consents................................20
8 The Relevant Employees............................................22
9 Restrictions on the Vendors.......................................24
10 Restrictions on the Purchaser.....................................26
11 Post-Completion Obligations.......................................27
12 Guarantees........................................................29
13 Other Provisions..................................................30
Schedule 1 Part 1 Intellectual Property...................................38
Schedule 2 Allocation of Consideration....................................39
Schedule 3 Completion Obligations.........................................40
Schedule 4 Warranties given by the Vendor under clause 6..................42
Schedule 5 Limitations on Liability Under Clause 6.3......................50
Schedule 6 Warranties given by Macrovision under clause 6.................51
Schedule 7 Specifications.................................................52
Schedule 8 Asset List.....................................................53
Schedule 9 Customer Contracts.............................................55
Schedule 10 Web Hosting Agreement.........................................81
Schedule 11 Database Agreement............................................82
Schedule 12 Consultant Services Agreement.................................83
Schedule 13 Employees.....................................................84
Schedule 14 Licence to Occupy the Premises................................85
Schedule 15 Contracts with a Value of 30,000 or greater...................86
Schedule 16 Contingent Consideration......................................87
Schedule 17 Gross Bookings................................................89
Schedule 18 Motor Vehicles Lease..........................................90
Schedule 19 Draft Press Release...........................................91
Schedule 20 Bonus Payments................................................93
Agreement for Sale of Business
This Agreement is made on 4th October 2000.
Between:
(1) Productivity Through Software PLC (Registered No. 2536709) whose
registered office is at Manor Park Avenue, Manor Park, Runcorn, Cheshire,
WA7 1TL, United Kingdom (the "Vendor");
(2) C-Dilla Limited (Registered No.2863202 ) whose registered office is at
Woodley House, Crockhamwell Road, Woodley, Berkshire, RG5 3JP, United
Kingdom (the "Purchaser"); and
(3) Mr John Rowlinson of The Kennels, Park Lane, Higher Walton, Warrington,
WA4 5LH, United Kingdom ("Mr Rowlinson"); and
(4) Macrovision Corporation whose registered address is at 1341 Orleans Drive,
Sunnyvale, California, 94089, USA ("Macrovision").
Whereas:
The Vendor wishes to sell the Business (as defined below), and the Purchaser
wishes to purchase the Business, on and subject to the terms of this Agreement.
It is agreed as follows:
1 Interpretation
In the interpretation of this Agreement, unless the context otherwise
requires, the provisions in this Clause 1 apply:
1.1 Definitions
"agreed terms" means, in relation to any document, such document in the
terms agreed between the parties and signed for identification by or on
behalf of the Purchaser and the Vendor with such alterations as may be
agreed in writing between the parties from time to time for any reason;
"Assets" means the property, rights and assets agreed to be sold pursuant
to Clause 2.1 of this Agreement;
"Assumed Liabilities" means the Liabilities of the Vendor to be assumed by
the Purchaser under Clause 2.2 of this Agreement and "Assumed Liability"
means any one of them;
"Audited Accounts" means the audited accounts relating to the Vendor for
the financial periods ending on 30 September in each of the years 1998
and1999;
"Balance Sheet Date" means 30 June 2000;
"Business" means the business of sublicensing, distribution, and
maintenance of the Software pursuant to the Sublicensor Agreement and
products and services relating to the Software, carried on by the Vendor
in the Territory from the Premises under the name "Productivity through
Software PLC", including the Assets and the Assumed Liabilities subsisting
at Completion;
"Business Day" means a day on which banks are open for business in London
(excluding Saturdays, Sundays and public holidays);
1
"CHAPS" means clearing houses automated payment systems;
"Claims" means all rights and claims of the Vendor to the extent that they
arise at any time (whether before or after Completion) out of or in
connection with the Business (whether arising under any warranties,
conditions, guarantees, indemnities, insurance policies, contracts,
agreements (in each case whether express or implied) or otherwise
howsoever) in so far as they relate to any of the Assets or any Assumed
Liability;
"Completion" means the completion of the sale and purchase of the Business
pursuant to sub-clauses 4.1 to 4.3;
"Consultant Services Agreement" means the agreement to be executed at
Completion by the Vendor and the Purchaser in the form set out in Schedule
12;
"Contracts" means the Customer Contracts and the Licence Agreements;
"Customer Contracts" means the customer contracts executed by the Vendor
in relation to the Software and associated services, whether expired or
terminated, which are listed in Schedule 9;
"Database" shall have the meaning given to that term in the Database
Agreement;
"Database Agreement" means the agreement to be executed at Completion by
the Vendor and the Purchaser in relation to the Database and the licence
from the Vendor to the Purchaser of the database management program in the
form set out in Schedule 11;
"Deferred Revenue" means, in relation to orders that have been invoiced by
the Vendor but which, but for this Agreement, would have resulted in a
contractual obligation on the Vendor to provide services or maintenance
beyond the date of Completion, the aggregate of the amounts calculated in
relation to each such order using the following formula:
(A / B) x C
where:
A = the number of days between the date of Completion and the date of
expiration of the contractual obligation arising in connection with the
order;
B = the total period (in days) of the contractual obligation arising in
connection with the order; and
C = the value of the invoice, exclusive of VAT;
"Disclosure Letter" means the letter of even date with this Agreement,
from the Vendor to the Purchaser, disclosing:
(i) information constituting exceptions to the Warranties; and
(ii) details of other matters referred to in this Agreement;
"Employment Contracts" means the employment contracts between the Vendor
and the employees listed in Schedule 13;
"Encumbrance" means any claim, charge, mortgage, security, lien, option,
equity, power of sale, hypothecation or other third party rights,
retention of title, right of pre-emption, right of first refusal or
security interest of any kind;
"Excluded Assets" means:
2
(i) "Plns": the Vendor's Intranet Server responsible for the
delivery of all internal information that is of a proprietary
nature to the Vendor including but not limited to telephone
directory, call statistics, policies and procedures, sales
statistics, pricing and social information;
(ii) "Call Statistics": the call logging system that takes data
from the Vendor's telephone exchange and displays information
and statistics based on this information on PlnS;
(iii) "ptsplc": the predecessor to the current sales database
Software (as that term is defined in the Database Agreement)
covered under the Database Agreement, written as a UNIX based
system and displaying all information on dumb terminal or
terminals emulation software. This sub-clause shall not in any
way limit or reduce the Purchasers rights as described in the
Database Agreement;
(iv) "WordPerfect System": the UNIX based WordPerfect word
processing package and documents used in conjunction with
ptsplc prior to the introduction of the current sales database
and MSWord as company standards;
(v) "FilemakerPro database": the Vendor's internal database system
including but not limited to salaries, pricing and price list
management and miscellaneous databases of secondary importance
to the running of the Vendor; and
(vi) The tradenames "PtS" and "Productivity through Software"
including the unique visual attributes of the Vendor's
corporate look and feel and all Intellectual Property which
subsists in them;
"Expert" means an independent firm of chartered accountants:
(i) agreed by the parties within two Business Days of the receipt
by a party of a Dispute Notice (as defined in Clause 5.2.7), a
New Bookings Dispute Notice (as defined in Clause 5.3.5) or a
T&C Dispute Notice (as defined in Clause 5.4.7); or
(ii) in default of agreement by the parties within two Business
Days of receipt by a party of one of the notices referred to
above, the London office of an independent firm of chartered
accountants nominated by the President for the time being of
the Institute of Chartered Accountants in England and Wales on
the application of either of the Vendor or Purchaser;
"Globetrotter" means Globetrotter Software, Inc whose registered address
is 1530 Meridian Avenue, San Jose, California, USA;
"Goodwill" means the goodwill of the Vendor in connection with the
Business;
"GPP" means the Group Personal Pension arrangement known as the "PTS Group
Personal Pension Scheme Number 67213" provided by Scottish Equitable with
commencement date November 1998;
"Gross Bookings" means the information set out in Schedule 17 (which
schedule shall be deemed to incorporate the information required to be
provided by the Vendor pursuant to Clause 5.2.1), being the value at
Completion of the written orders for Software and maintenance received by
the Vendor, exclusive of Value Added Tax, which have not been paid at
Completion and excludes:
(i) any customer orders which the Vendor has induced any customer
to place prior to Completion other than in the ordinary course
of business consistent with the Vendor's past practices; and
(ii) orders for FLEXLM dongles;
3
[** Confidential treatment has been requested for certain provisions of
this document]
"Information Technology" means computer systems, communication systems,
software and hardware;
"Intellectual Property" means trade marks, service marks, trade names,
logos, get-up, patents, inventions, registered and unregistered design
rights, copyrights, semi-conductor topography rights, domain names,
database and all other similar proprietary rights which may subsist in any
part of the world (including Know-how) including, where such rights are
obtained or enhanced by registration, any registration of such rights and
applications and rights to apply for such registrations;
"Key Employees" means each of [*] and [*];
"Know-how" means the following: confidential industrial and commercial
information in any form (including paper, electronically stored data,
magnetic media, film and microfilm) including but not limited to sales
letters, sales proposals, sales presentations, technical presentations,
project reports, instruction and training manuals, tables of operating
conditions, sales and market forecasts, lists and particulars of prospects
and customers and all similar and related items
"Letter Agreement" means the Letter Agreement between Macrovision
Corporation, the Vendor, Mr Rowlinson and Sheila Rowlinson dated 15 June
2000;
"Liabilities" means all liabilities, duties and obligations of every
description, whether deriving from contract, common law, statute or
otherwise, whether present or future, actual or contingent, ascertained or
unascertained or disputed and whether owed or incurred severally or
jointly and as principal or surety and "Liability" means any one of them;
"Licence Agreements" means the licence agreements relating to the
provision of software to the Vendor brief details of which are set out in
Part 1.2 of Schedule 1;
"Losses" means all losses (other than indirect losses), liabilities, costs
(including without limitation legal costs), charges, expenses, actions,
proceedings, claims and demands;
"Motor Vehicles" means the motor vehicles listed in the Motor Vehicles
Lease;
"Motor Vehicles Lease" means the lease to be executed at Completion by
SuperStore Limited (which shall have been procured by the Vendor) and the
Purchaser in relation to the Motor Vehicles in the form set out in
Schedule 18;
"New Bookings" means the value of orders for Software and for the
maintenance training and consulting of, or in relation to, Software
received from customers located in the Territory by any entity which is
part of the Purchaser's Group (regardless of which entity receives the
orders):
(i) which are evidenced by a formal, written customer purchase
order;
(ii) for which an invoice has been delivered to the customer by the
Purchaser; and
(iii) which includes the amount that would have been payable to
Globetrotter in accordance with the Sublicensor Agreement had
it remained in force;
4
"Office Equipment" means the loose items of office equipment, furniture
and furnishings used in connection with the Business at Completion which
are listed in Schedule 8;
"Order" means the Value Added Tax (Special Provisions) Order 1995;
"Payment Account Details" means, in relation to any payment to be made
under or pursuant to this Agreement, the name, account number, sort code,
account location and other details specified by the payee and necessary to
effect payment (whether by cheque, banker's draft, telegraphic or other
electronic means of transfer) to the payee;
"Post Completion Conditions" means:
(i) the delivery at Completion to the Purchaser of all customer
and prospect lists and databases held by or under the control
of the Vendor in relation to the Business; and
(ii) the implementation at Completion (in a form reasonably
satisfactory to the Purchaser) of standalone data processing
systems to provide the specifications set out in Schedule 7.
"Premises" means those parts of the ground and first floor of Manor Park
Avenue, Manor Park, Runcorn, Cheshire, WA7 1TL, United Kingdom which are
more particularly described in the Premises Licence;
"Premises Licence" means the licence allowing the Purchaser to occupy the
premises in the form set out in Schedule 14;
"Purchaser's Group" means the Purchaser and any subsidiary undertaking of
the Purchaser and any holding company or fellow subsidiary undertaking of
the Purchaser;
"Purchaser's Solicitors" means Linklaters of One Silk Street, London EC2Y
8HQ;
"Related Agreements" means the Consultant Services Agreement, the Database
Agreement and the Web-Hosting Agreement;
"Relevant Employees" means those employees of the Vendor who are
immediately prior to Completion employed in the Business (other than any
specifically excluded by agreement with the Purchaser) and whose names are
set out in Schedule 13;
"Reporting Accountants" means such firm as the Vendor and Purchaser agree,
or if they are unable to agree within 7 days or if that firm is unable or
unwilling to act in any matter referred to them under this Agreement, a
firm of Chartered Accountants independent of the Vendor and of the
Purchaser to be agreed by the Vendor and the Purchaser within seven days
of a notice by one to the other requiring such agreement or failing such
agreement to be nominated on the application of either of them by or on
behalf of the President for the time being of the Institute of Chartered
Accountants of England and Wales;
"Residual Business" has the meaning given to it in Clause 10.4;
"Software" means the Globetrotter software systems, namely FlexLM,
FlexBill, GT Licensing, GT Licensing-Web, FlexLock, FlexAdmin, FlexWrap,
Globetrack, SAMWrap and SAMSuite and includes upgrades and successors to
these software systems;
"Sublicensor Agreement" means the Globetrotter Software, Inc. Authorised
International Sublicensor Agreement between the Vendor and Globetrotter
dated 1 January 1996 as amended and renewed in March 2000 for a 2 year
term beginning 1 January 2000 and ending 31 December 2001;
5
"Taxation" or "Tax" means all forms of taxation whether direct or indirect
and whether levied by reference to income, profits, gains, net wealth,
asset values, turnover, added value or other reference and statutory,
governmental, state, provincial, local governmental or municipal
impositions, duties, contributions, rates and levies (including without
limitation social security contributions and any other payroll taxes),
whenever and wherever imposed (whether imposed by way of a withholding or
deduction for or on account of tax or otherwise) and in respect of any
person and all penalties, charges, costs and interest relating thereto;
"Territory" means Austria, Belgium, Denmark, Finland, France, Germany,
Greece, Holland, Ireland, Italy, Luxembourg, the Netherlands, Norway,
Portugal, Spain, Sweden, Switzerland and the United Kingdom;
"Third Party Consents" means all consents, licences, approvals,
authorisations or waivers (other than those pertaining to the Customer
Contracts for the Software) required from third parties for the
conveyance, transfer, assignment or novation in favour of the Purchaser of
any of the Assets or Assumed Liabilities in terms acceptable to the
Purchaser; and "Third Party Consent" means any one of them;
"Training and Consulting Bookings" means the value at Completion of
written orders for training and consulting in relation to the Software,
exclusive of Value Added Tax, which are unperformed as at Completion. For
the avoidance of doubt, Training and Consulting Bookings do not include
any customer orders for items licensed under the Sublicensor Agreement;
"Transfer Regulations" means the Transfer of Undertakings (Protection of
Employment) Regulations 1981;
"VAT" means United Kingdom Value Added Tax; and "VATA 1994" means the
Value Added Tax Act 1994;
"VAT Records" has the meaning given in Clause 3.5.1;
"Vendor's Group" means the Vendor and any subsidiary undertaking of the
Vendor and any holding company or fellow subsidiary undertaking of the
Vendor;
"Vendor's Intellectual Property" means the Intellectual Property owned by
the Vendor and all other intellectual property which at or in the six
months prior to Completion is or was used or enjoyed in a commercially
significant way in connection with the Business excluding any Intellectual
Property in the Excluded Assets. For the avoidance of doubt, Vendor's
Intellectual Property shall include all documentation created by the
Vendor related to the Software to the extent that such documentation
exists. To the extent that any of the Vendor's Intellectual Property is
used or enjoyed in a commercially significant way in both the Business and
the Residual Business, this Clause shall not in any way limit the Vendor's
right to continue using the Intellectual Property in the Residual Business
or future business subject to the provisions of Clause 9 of this
Agreement;
"Vendor's Know-how" means all rights and interest owned by the Vendor in
Know-how which at or in the six months prior to Completion is or was
commercially significant to the Business;
"Vendor's Solicitors" means Maclay Murray & Spens, Solicitors of 151 St.
Vincent Street, Glasgow, G2 5NJ;
"Warranties" means the warranties and representations contained in
Schedule 4; and "Warranty" means any one of them;
6
"Web Hosting Agreement" means the agreement to be executed at Completion
by the Vendor and Purchaser, in the form set out in Schedule 10, which
sets out the terms upon which the Vendor agrees to (i) make available to
the Purchaser space on the PTS site (as defined in the Web Hosting
Agreement) and (ii) to allow the Purchaser to use the Vendor's web-based
software.
1.2 Subordinate Legislation
Any reference to a statutory provision shall include any subordinate
legislation made from time to time under that provision.
1.3 Modification etc. of Statutes
Any reference to a statute or statutory provision shall include such
statute or provision as from time to time modified, re-enacted or
consolidated whether before or after the date of this Agreement so far as
such modification, re-enactment or consolidation applies or is capable of
applying to any transactions entered into under this Agreement prior to
Completion and (so far as liability thereunder may exist or can arise)
shall include also any past statute or statutory provision (as from time
to time modified, re-enacted or consolidated) which such provision has
directly or indirectly replaced, provided that such modification,
re-enactment or consolidation does not result in any liability of any
party hereunder being more onerous.
1.4 Connected Persons
A person shall be deemed to be connected with another if that person is
connected with such other within the meaning of Section 839 of the Income
and Corporation Taxes Act 1988.
1.5 Accounts
Any reference to "accounts" shall include, where relevant, the directors'
and auditors' reports, relevant balance sheets and profit and loss
accounts and related notes together with all documents which are or would
be required by law to be annexed to the accounts of the company concerned
to be laid before that company in general meeting in respect of the
accounting reference period in question.
1.6 Companies Act 1985
The words "subsidiary" and "holding company" and "subsidiary undertaking"
shall have the same meanings in this Agreement as their respective
definitions in the Companies Act 1985.
1.7 Interpretation Act 1978
The Interpretation Act 1978 shall apply to this Agreement in the same way
as it applies to an enactment.
1.8 Interpretation
For the avoidance of doubt, references to "property" do not refer to real
property.
1.9 References
References to this Agreement shall include any Recitals and Schedules to
it and references to Clauses and Schedules are to Clauses of and Schedules
to this Agreement. References to paragraphs are to paragraphs of the
Schedules.
7
1.10 Information
Any reference to books, records or other information means books, records
or other information in any form including paper, electronically stored
data, magnetic media, film and microfilm.
1.11 Headings
Headings shall be ignored in construing this Agreement.
2 Agreement to sell the Business
2.1 Sale and purchase of Business
2.1.1 On Completion, the Vendor agrees to sell with full title guarantee
(subject to Clause 2.1.4) and the Purchaser, relying on the several
representations, warranties and undertakings contained in this
Agreement, agrees to purchase free from all Encumbrances as at
Completion the whole of the Business as a going concern.
2.1.2 Without prejudice to the generality of Clause 2.1.1 and subject to
Clause 2.1.3 and Clause 2.1.5, there shall be included in the sale
under this Agreement the following:
(i) the benefit, subject to the burden, of each of the Contracts;
(ii) the Goodwill;
(iii) the Office Equipment owned by the Vendor as set out in the
Asset List;
(iv) the Vendor's Intellectual Property;
(v) the benefit (so far as the same can lawfully be assigned or
transferred to or held in trust for the Purchaser) of the
Claims;
(vi) the Deferred Revenue; and
(vii) the Training and Consulting Bookings.
2.1.3 There shall be excluded from the sale under this Agreement the
following:
(i) all assets of the Vendor other than the Assets;
(ii) the Excluded Assets; and
(iii) any Liabilities that are not Assumed Liabilities.
2.1.4 Without prejudice to any other provision of this Agreement or the
Database Agreement, both the Vendor's Intellectual Property and the
benefit of each of the Contracts shall be sold or transferred
without the benefit of the covenants of title implied by use of the
words "full title guarantee" in Clause 2.1.1.
2.1.5 For the avoidance of doubt, in relation to the Vendor's Intellectual
Property in the Database, it is agreed that this Agreement shall not
operate to transfer any such Intellectual Property but rather that
the provisions of Clause 2.2.1 of the Database Agreement shall be
the operative provisions in terms of which the Vendor shall assign
to the Purchaser and the Vendor as tenants in common, equal shares
of all the Vendor's rights and interest in the Database.
8
[** Confidential treatment has been requested for certain provisions of
this document]
2.2 Assumption of Liabilities
2.2.1 The Purchaser shall assume, duly and punctually pay, satisfy,
discharge, perform or fulfil all Liabilities in relation to:
(vi) Customer Contracts to the extent that they were incurred by
the Vendor in the ordinary course of carrying on the Business;
(vii) Employment Contracts subject to Clause 8; and
(viii) all Liabilities which relate to or arise out of any act or
omission by the Purchaser on or after Completion in respect of
the Licence Agreements.
2.2.2 Clause 2.2.1 shall not apply to:
(ix) any Liability expressly reserved to the Vendor under any
provision of this Agreement;
(x) any Liability that arises as a result or by reason of gross
negligence, wilful default or fraud on the part of the Vendor;
(xi) any Liability in respect of an insured risk to the extent that
payment to the Vendor is made pursuant to insurance cover; and
(xii) any Liability arising out of any past or future breach by the
Vendor of any data protection legislation in the United
Kingdom or elsewhere.
2.2.3 As a result of the assumption of the Assumed Liabilities by the
Purchaser, the Purchaser shall have assigned to it by the Vendor,
and be entitled to the benefit of, all rights, powers, remedies,
claims, defences, obligations, conditions and incidents (including,
without limitation, rights of set-off and counterclaim and rights
under contracts with third parties) as the Vendor enjoyed.
2.3 Indemnities
2.3.1 The Purchaser shall indemnify and agrees to keep indemnified the
Vendor against all Assumed Liabilities and any Liability incurred by
the Purchaser in the course of carrying on the Business after
Completion (including, for the avoidance of doubt, any Liability of
the Purchaser which is deemed to be, or becomes, a Liability of the
Vendor by virtue of applicable law), provided that the Purchaser
shall not be liable under this Clause 2.3.1:
(i) to the extent that the Liability in question has been
increased or caused by the Vendor's non-compliance with its
obligations under this Agreement; or
(ii) unless the Vendor has notified the Purchaser of the Loss it
has incurred in relation to the Assumed Liabilities or
Liability within the period of 3 years from Completion
(provided that this limitation will only apply in relation to
the Assumed Liabilities referred to in Clause 2.2.1(i).
2.3.2 The Vendor shall, for a period of [*] from Completion, indemnify and
agrees to keep indemnified the Purchaser against any Liability of
the Vendor which is not an Assumed Liability (including, for the
avoidance of doubt, any Liability of the Vendor which is not an
Assumed Liability and which is deemed to be, or becomes, a Liability
of the Purchaser by virtue of any applicable law).
9
[** Confidential treatment has been requested for certain provisions of
this document]
2.4 Form of transfers
The parties agree that the Business shall be transferred to the Purchaser
in the following manner:
2.4.1 in the case of the Contracts, by means of assignments and novations
in such form as may be agreed by the Vendor and the Purchaser
together with any Third Party Consents as may have been obtained;
2.4.2 in the case of Office Equipment, by delivery;
2.4.3 in the case of Goodwill and the Training and Consulting Bookings, by
means of absolute legal assignments in the agreed terms; and
2.4.4 in the case of the other Assets and any other rights, obligations
and liabilities required to be transferred pursuant to this
Agreement, by means of documents in the agreed terms.
3 Consideration
3.1 Amount and Payment
3.1.1 The consideration for the purchase of the Business is as follows:
(i) an amount of USD$[*] payable to the Vendor on Completion;
(ii) an amount calculated in accordance with Schedule 16, based on
the New Bookings received by the Company during the first [*]
days following Completion (the "Contingent Consideration"),
payable monthly fifteen days after each relevant month end to
the Vendor by reference to the total amount of orders
comprising New Bookings which are made in respect of New
Bookings during the relevant month and not, for the avoidance
of doubt, by reference to the payments actually received by
the Purchaser;
(iii) an amount equal to [*]% of all sums received by the Purchaser
for Training and Consulting Bookings, payable monthly to the
Vendor fifteen days after each month end for each month after
Completion during which such a sum is received, but only up to
a maximum aggregate amount of USD$[*].
3.2 Conduct of the Business
3.2.1 For the [*] period following Completion, the Purchaser agrees to
conduct the Business in a commercial and businesslike manner with a
view to trading profitably and, without prejudice to the foregoing
generality, shall not take or permit any action whereby the number
or value of New Bookings made in the [*] period following Completion
nor the sums received by the Purchaser in respect thereof are
artificially reduced and the Purchaser shall ensure, so far as it is
reasonably able, that all contracts entered into by it for the sale,
supply or maintenance of, or training or consulting with respect to
the Software in relation to the Business fall within the definition
of New Bookings.
3.2.2 During the [*] period following Completion, the Purchaser agrees to
use commercially reasonable efforts to ensure all services to be
provided pursuant to the Training and Consulting Bookings are fully
and properly performed as soon as reasonably practicable after
Completion.
10
3.3 Allocation of Consideration
The consideration shall initially be allocated as set out in Schedule 2,
subject to adjustment in such manner as the Vendor and the Purchaser shall
agree following finalisation of the payments in relation to Gross
Bookings, New Bookings and Training and Consulting Bookings, or failing
agreement as determined by the Reporting Accountants on the application of
the Vendor or the Purchaser and that allocation as subsequently adjusted
shall be adopted by both parties for all Tax purposes.
3.4 Method of Payment
Wherever in this Agreement provision is made for the payment by one party
to another, such payment shall be effected by crediting for same day value
the account specified in the Payment Account Details of the party entitled
to the payment by way of CHAPS on or before the due date for payment
unless the payee by notice to the payer, not later than three Business
Days prior to the due date for payment, elects to be paid by banker's
draft drawn on any international bank reasonably acceptable to the payer
and having an office in London. Payment of such sum shall be a good
discharge to the payer of its obligation to make such payment.
3.5 VAT
3.5.1 General
The parties intend that the Business shall be sold as a going
concern for VAT purposes and accordingly:
(i) the Vendor and the Purchaser shall (when required to do so)
give notice of such sale to H.M. Customs & Excise pursuant to
paragraph 11 of Schedule 1 VATA 1994 or paragraph 6 of the
Value Added Tax Regulations 1995 or as otherwise required by
law;
(ii) the Vendor shall provide the Purchaser with access to all
records referred to in Section 49 VATA 1994 (the "VAT
Records");
(iii) the Vendor shall, if the Purchaser so requests, provide, at
the Purchaser's cost, copies of the VAT Records; and
(iv) the Vendor undertakes to preserve the VAT Records for such
periods as may be required by law.
3.5.2 Going Concern
(i) The Vendor and the Purchaser intend that the sale of the
Business shall be treated under the Order as neither a supply
of goods nor a supply of services. It is not contemplated by
this sub-clause that any application shall be made by either
of the parties to H.M. Customs & Excise seeking confirmation
that the sale is to be so treated, but if either party
subsequently proposes that such an application be made then
the Vendor and Purchaser shall promptly agree the form of that
application (but failing agreement within a reasonable period
the Vendor's accountants shall determine the form of that
application) and use all reasonable endeavours to ensure that
satisfactory confirmation is obtained as soon as possible
thereafter from H.M. Customs & Excise that the sale is to be
so treated.
11
(ii) If and to the extent H.M. Customs & Excise has before
Completion expressly indicated that the sale of the Business
cannot be treated in the manner contemplated by sub-clause
3.5.2(i), the Purchaser shall (against production of tax
invoices in respect thereof) in addition to any amounts
expressed in this Agreement to be payable by the Purchaser pay
seven days before the Vendor has to account for the same to
H.M. Customs & Excise the amount of any VAT which as a result
of that indication may be chargeable on the sale of the
Business under this Agreement. If no such indication shall
have been given before Completion, then (subject to sub-clause
3.5.4(i) below) no amount in respect of VAT shall be paid by
the Purchaser on Completion, but to the extent that VAT shall
subsequently be determined by H.M. Customs & Excise to be
payable on the sale, the Purchaser shall (unless it gives
written notice to the Vendor that it requires such
determination to be challenged in accordance with sub-clause
3.5.2(iii) below) in addition to any amount expressed in the
Agreement to be payable by the Purchaser pay to the Vendor
such VAT, such payment by the Purchaser to be made forthwith
against evidence that the due date for payment of such tax has
fallen due or will fall due within seven days or if later
against delivery by the Vendor to the Purchaser of the
appropriate tax invoice.
(iii) Nothing in this sub-clause shall require the Vendor to make
any appeal to any tribunal or court against or otherwise
challenge any determination of H.M. Customs & Excise that the
sale does not fall to be treated as the transfer of a going
concern unless the Purchaser shall by such date as shall
reasonably allow the Vendor to make such appeal or challenge
within any applicable time limit give written notice to the
Vendor that it requires such appeal or challenge to be made
and shall first agree to indemnify the Vendor against all
irrecoverable costs and expenses that the Vendor may incur by
taking any such action and, in any case where an appeal cannot
be made against the determination of H.M. Customs & Excise
without the Vendor accounting for the VAT and any penalty or
interest in question, unless the Purchaser shall first pay to
the Vendor an amount equal to that VAT and any such penalty or
interest (against delivery by the Vendor of the appropriate
tax invoice). Any VAT that is finally determined to be payable
on the sale and for which the Purchaser has not previously
accounted to the Vendor shall following such final
determination be paid by the Purchaser forthwith to the Vendor
against production of the appropriate tax invoice.
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(iv) If any amount paid by the Purchaser to the Vendor in respect
of VAT pursuant to this Agreement is subsequently found to
have been paid in error the Vendor shall if the Vendor has not
yet accounted for such VAT to H.M. Customs & Excise promptly
repay such amount to the Purchaser and, if the Vendor has
already so accounted, then the Vendor shall at the expense of
the Purchaser use all reasonable endeavours to obtain
repayment thereof from H.M. Customs & Excise or, if entitled,
the Vendor shall correct its VAT account pursuant to
Regulation 34 of the Value Added Tax Regulations 1995 and
forthwith on receiving repayment from H.M. Customs & Excise or
receiving the benefit of the correction to its VAT account, as
the case may be, shall pay to the Purchaser the amount repaid
and issue to the Purchaser a valid credit note showing the
amount of VAT repaid.
3.6 Reduction of Consideration
If any payment is made by the Vendor to the Purchaser in respect of any
claim against the Vendor for any breach of this Agreement (or any
agreement entered into pursuant to this Agreement) or pursuant to any
indemnity hereunder, the payment shall be made by way of adjustment of the
consideration paid by the Purchaser for the particular category of Asset
(if any) to which the payment and/or claim relates under this Agreement
and if the payment and/or claim relates to more than one category of Asset
shall be allocated rateably to the relevant category or categories of
Asset or if the payment and/or claim relates to no particular category of
Asset shall be allocated rateably to all the Assets in each case by
reference to the proportions in which the consideration referred to in
Clause 3.1 is initially allocated as set out in Part 1 of Schedule 2 and
the consideration shall be deemed to have been reduced by the amount of
such payment.
4 Completion
4.1 Date and Place
Completion shall take place at the offices of the Purchaser's Solicitors
on the date hereof or at such other place, time or date as may be agreed
between the Purchaser and the Vendor.
4.2 Obligations of the Vendor, Purchaser and Macrovision on Completion
On Completion:
4.2.1 the Vendor shall procure that its obligations specified in Schedule
3 are fulfilled;
4.2.2 the Purchaser shall procure that its obligations specified in
Schedule 3 are fulfilled; and
4.2.3 Macrovision shall procure that its obligations specified in Schedule
3 are fulfilled.
4.3 Payment of Price
Against compliance with the foregoing provisions, the Purchaser shall pay
the consideration in accordance with provisions of Clause 3.1 and the
Purchaser and Macrovision shall procure that their respective obligations
specified in Schedule 3 are fulfilled.
4.4 Right to Terminate
If the foregoing provisions of this Clause are not fully complied with by
the Vendor or the Purchaser by or on the date set for Completion, the
Purchaser, in the case of non compliance by the Vendor, or the Vendor, in
the case of non compliance by the Purchaser, shall be entitled (in
addition to and without prejudice to all other rights or remedies
available to it including the right to claim damages) by written notice to
the Vendor or, as the case may be, the Purchaser served on such date:
4.4.1 to elect to terminate this Agreement without liability on its part;
or
4.4.2 to effect Completion notwithstanding the defaults which have
occurred in which case the non-defaulting party shall be deemed to
have waived or been satisfied as to the relevant obligation of the
other party and to have waived any remedy which might otherwise have
been available to it; or
4.4.3 to fix a new date for Completion (not being more than 20 Business
Days after the agreed date for Completion) in which case the
foregoing provisions of this Clause 4.4 shall apply to Completion as
so deferred but provided such deferral may only occur once.
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[** Confidential treatment has been requested for certain provisions of
this document]
4.5 Title and Risk
Title and risk of loss or damage to the Assets transferred on Completion
shall pass to the Purchaser at Completion.
5 Post Completion Obligations
5.1 Stand Alone Data Processing System
The Purchaser agrees to pay up to USD$[*] within 7 days of presentation by
the Vendor of an invoice in respect thereof (accompanied by actual
invoices from the Vendor's suppliers to substantiate such invoice from the
Vendor) to the Vendor toward the acquisition and implementation (from
vendors recommended by the Vendor but approved by the Purchaser) of a
standalone data processing system meeting the specifications set out in
Schedule 7 which has been acquired and implemented by the Vendor on behalf
of the Purchaser. The Purchaser confirms that it has accepted such
acquisition and implementation work and, as between the Vendor and
Purchaser, is satisfied with the system so acquired and implemented.
5.2 Collection of Gross Bookings
5.2.1 The Vendor shall within 3 Business Days of Completion provide to the
Purchaser details of all Gross Bookings made between 2 October 2000
and Completion and these details shall be deemed to be incorporated
into Schedule 17.
5.2.2 The Purchaser undertakes to use all reasonable endeavours to recover
the Gross Bookings in accordance with the Purchaser's standard debt
collection procedures.
5.2.3 During the [*] period following Completion, the Purchaser shall
report and pay to the Vendor, 15 days after the end of each calendar
month during the relevant period, [*]% of the aggregate sum received
in respect of Gross Bookings during the period from Completion to
each such reporting date (the "Payable Gross Bookings"), provided
that the Purchaser shall only be required to pay the Vendor a
maximum aggregate amount of Payable Gross Bookings of USD$[*]. The
Purchaser shall provide the Vendor with such evidence as the Vendor
may reasonably require in relation to the collection and receipt of
the Gross Bookings.
5.2.4 For the avoidance of doubt, the regime in relation to Gross Bookings
under this Clause 5.2 supersedes any obligation of the Vendor under
the Sublicensor Agreement to pay any monies to Globetrotter and
Macrovision, the holding company of Globetrotter, represents and
warrants on behalf of Globetrotter that Globetrotter shall make no
claims in this regard against the Vendor under the Sublicensor
Agreement and shall indemnify and keep indemnified the Vendor
against any claim made against the Vendor by Globetrotter that the
Vendor is liable to pay to it any amounts under the Sublicensor
Agreement in relation to the period following Completion in respect
of which payment has been made to the Purchaser pursuant to this
Clause 5.3.
5.2.5 The Purchaser shall allow the Vendor to consult with the Purchaser
and to have access to sales ledgers to assess progress with regard
to the collection of the Gross Bookings.
5.2.6 Following each such meeting the Purchaser shall comply with all
reasonable requests of the Vendor in respect of action to be taken
towards the recovery of the Gross
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Bookings save that nothing is this provision shall oblige the
Purchaser itself to institute legal proceedings for recovery or to
take action to collect the Gross Bookings.
5.2.7 The Vendor shall be entitled at any time, within the period of 30
days following the date for payment, to dispute the payment of
Payable Gross Bookings by notice in writing (the "Dispute Notice")
to the Purchaser. The Dispute Notice shall set out the amount of
Payable Gross Bookings in dispute and the reasons for the dispute.
If no Dispute Notice is given by the Purchaser before the expiry of
such 30 day period, the Payable Gross Bookings shall be deemed to
have been paid and agreed by the Purchaser and Vendor. If a Dispute
Notice is served on the Purchaser, the Purchaser agrees to procure
that the Vendor and its accounting and other advisers are given
reasonable access to the relevant books, personnel and accounting
records in relation to the Payable Gross Bookings.
5.2.8 The Purchaser and the Vendor shall use all reasonable endeavours to
resolve any matters in dispute and agree the amount payable in
relation to the Payable Gross Bookings within 14 Business Days of
the date of receipt of a Dispute Notice by the Purchaser. If they
fail to do so by the expiry of 14 Business Days after the date of
receipt by the Purchaser of the Dispute Notice, the Purchaser or the
Vendor may refer any remaining matters in dispute to the Expert,
with a request that the Expert determine the matters within dispute
45 Business Days of receiving the reference. Any reference to Expert
shall be deemed to be a joint reference by the Purchaser and the
Vendor and, in any such reference, the Expert shall act as an expert
and not as an arbitrator. The determination of the Expert shall be
final and binding on both parties in relation to the matters in
dispute.
5.2.9 The charges of any Expert shall be apportioned between the parties
as the Expert shall decide or, in the absence of such directions, by
the Purchaser and the Vendor in equal shares.
5.2.10 If either the Vendor or the Purchaser receives any monies from a
customer of the Business relating to a Gross Booking, they shall
immediately deposit those monies into the bank account to be
established pursuant to Clause 5.2.11.
5.2.11 The Purchaser shall (and the Vendor shall provide the Purchaser
with all necessary assistance as is required for this purpose), as
soon as practicably possible after Completion, open a bank account
to be called the "PTS Gross Bookings" account into which the parties
shall deposit all monies received from customer of the Business in
relation to Gross Bookings and from which the Purchaser shall pay
the Payable Gross Bookings to the Vendor.
5.2.12 The Purchaser shall use all reasonable endeavours not to deposit
monies other than monies relating to Gross Bookings into the account
referred to in Clause 5.2.10 above, but to the extent that any
monies other than Gross Bookings are deposited into the account,
will immediately refund them to the Vendor.
5.3 New Bookings
5.3.1 The Purchaser undertakes to use all reasonable endeavours to recover
the New Bookings in accordance with the Purchaser's standard debt
collection procedures.
5.3.2 Following Completion, the Purchaser shall pay the Contingent
Consideration in the manner set out in Clause 3.1.1(ii). The
Purchaser shall maintain proper accounts, setting out the aggregate
value of all New Bookings and monies received in relation
15
thereto, and shall provide the Vendor with such evidence as the
Vendor may reasonably require in relation to the collection and
receipt of the New Bookings.
5.3.3 The Purchaser shall allow the Vendor to consult with the Purchaser
and to have access to sales ledgers to assess progress with regard
to the collection of the New Bookings.
5.3.4 Following each such meeting, the Purchaser shall comply with all
reasonable requests of the Vendor in respect of action to be taken
towards the recovery of the New Bookings save that nothing is this
provision shall oblige the Purchaser itself to institute legal
proceedings for recovery or to take action to collect the New
Bookings sooner than is provided in the Purchaser's debt collection
procedures.
5.3.5 The Vendor shall be entitled at any time, within the period of 30
days following the date for payment, to dispute the payment of
Contingent Consideration by notice in writing (the "New Bookings
Dispute Notice") to the Purchaser. The New Bookings Dispute Notice
shall set out the amount of Contingent Consideration in dispute and
the reasons for the dispute. If no New Bookings Dispute Notice is
given by the Vendor before the expiry of such 30 day period, the
Contingent Consideration shall be deemed to have been paid and
agreed by the Vendor and Purchaser. If a New Bookings Dispute Notice
is served on the Purchaser, the Purchaser agrees to procure that the
Vendor and its accounting and other advisers are given reasonable
access to the relevant books, personnel and accounting records in
the relation to the Contingent Consideration.
5.3.6 The Vendor and the Purchaser shall use all reasonable endeavours to
resolve any matters in dispute and agree the amount payable in
relation to the Contingent Consideration within 14 Business Days of
the date of receipt of a New Bookings Dispute Notice by the
Purchaser. If they fail to do so by the expiry of 14 Business Days
after the date of receipt by the Purchaser of the New Bookings
Dispute Notice, the Vendor or the Purchaser may refer any remaining
matters in dispute to the Expert, with a request that the Expert
determine the matters within dispute 45 Business Days of receiving
the reference. Any reference to Expert shall be deemed to be a joint
reference by the Vendor and the Purchaser and, in any such
reference, the Expert shall act as an expert and not as an
arbitrator. The determination of the Expert shall be final and
binding on both parties in relation to the matters in dispute.
5.3.7 The charges of any Expert shall be apportioned between the parties
as the Expert shall decide or, in the absence of such directions by
the Vendor and the Purchaser in equal shares.
5.3.8 If the Vendor receives any monies from a customer of the Business
relating to a New Booking, the Vendor shall hold those monies on
trust for the Purchaser and pay the Monies over to the Purchaser
within 5 Business Days of receipt.
5.4 Training and Consulting Bookings
5.4.1 The Vendor shall, immediately following Completion, notify in
writing any customers of the Business which have made a Training and
Consulting Booking of the sale of the Business and request that they
send all payments relating to the relevant Training and Consulting
Booking directly to the Purchaser.
5.4.2 The Purchaser undertakes to use all reasonable endeavours to recover
the Training and Consulting Bookings in accordance with the
Purchaser's standard debt collection procedures.
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[** Confidential treatment has been requested for certain provisions of
this document]
5.4.3 Notwithstanding Clause 5.4.1, if the Vendor receives any monies from
a customer of the Business relating to a Training and Consultancy
Booking, the Vendor shall hold those monies on trust for the
Purchaser and immediately pay the monies over to the Purchaser or,
if the Purchaser agrees, net the monies off against any sum owing by
the Purchaser to the Vendor under this Clause.
5.4.4 Following Completion, the Purchaser shall pay the Vendor the amounts
required in accordance with Clause 3.1.1(iii) (up to a maximum
aggregate amount of (pound)[*]) (the "Payable Training and
Consulting Bookings"). The Purchaser shall provide the Vendor with
such evidence as the Vendor may reasonably require in relation to
the collection and receipt of the Training and Consulting Bookings.
5.4.5 The Purchaser shall allow the Vendor to consult with the Purchaser
and to have access to sales ledgers to assess progress with regard
to the collection of the Training and Consulting Bookings.
5.4.6 Following each such meeting, the Purchaser shall comply with all
reasonable requests of the Vendor in respect of action to be taken
towards the recovery of the Training and Consulting Bookings save
that nothing is this provision shall oblige the Purchaser itself to
institute legal proceedings for recovery or to take action to
collect the Training and Consulting Bookings sooner than is provided
in the Purchaser's debt collection procedures.
5.4.7 The Vendor shall be entitled at any time, within the period of 30
days following the date for payment, to dispute the payment of
Payable Training and Consulting Bookings by notice in writing (the
"T&C Dispute Notice") to the Purchaser. The T&C Dispute Notice shall
set out the amount of Payable Training and Consulting Bookings in
dispute and the reasons for the dispute. If no T&C Dispute Notice is
given by the Vendor before the expiry of such 30 day period, the
Payable Training and Consulting Bookings shall be deemed to have
been paid and agreed by the Vendor and Purchaser. If a T&C Dispute
Notice is served on the Purchaser, the Purchaser agrees to procure
that the Vendor and its accounting and other advisers are given
reasonable access to the relevant books, personnel and accounting
records in the relation to the Payable Training and Consulting
Bookings.
5.4.8 The Vendor and the Purchaser shall use all reasonable endeavours to
resolve any matters in dispute and agree the amount payable in
relation to the Payable Training and Consulting Bookings within 14
Business Days of the date of receipt of a T&C Dispute Notice by the
Purchaser. If they fail to do so by the expiry of 14 Business Days
after the date of receipt by the Vendor of the T&C Dispute Notice,
the Vendor or the Purchaser may refer any remaining matters in
dispute to the Expert, with a request that the Expert determine the
matters within dispute 45 Business Days of receiving the reference.
Any reference to Expert shall be deemed to be a joint reference by
the Vendor and the Purchaser and, in any such reference, the Expert
shall act as an expert and not as an arbitrator. The determination
of the Expert shall be final and binding on both parties in relation
to the matters in dispute.
5.4.9 The charges of any Expert shall be apportioned between the parties
as the Expert shall decide or, in the absence of such directions by
the Vendor and the Purchaser in equal shares.
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6 Warranties
6.1 Incorporation of Schedule 4
6.1.1 The Vendor warrants and represents to the Purchaser and its
successors in title in the terms set out in Schedule 4 subject only
to:
(i) any matter which is fairly disclosed in the Disclosure Letter
and any matter expressly provided for under the terms of this
Agreement; and
(ii) any matter or thing hereafter done or omitted to be done
pursuant to this Agreement or otherwise at the request in
writing or with the approval in writing of the Purchaser.
6.1.2 The Vendor acknowledges that the Purchaser has entered into this
Agreement in reliance upon the Warranties and on the undertakings
contained in Clause 9. Save as expressly otherwise provided, the
Warranties shall be separate and independent and shall not be
limited by reference to any other paragraphs of Schedule 4 or by
anything in this Agreement.
6.1.3 Any statement qualified by the expression "so far as the Vendor is
aware", "to the Vendor's knowledge, information and belief", "known
to the Vendor" or any similar expression shall, unless otherwise
stated, be deemed to be a reference to the aggregate knowledge,
information or belief which each Key Employee has or could
reasonably be expected to have.
6.2 Incorporation of Schedule 6
Macrovision warrants and represents to the Vendor in terms set out in
Schedule 6 and acknowledges that the Vendor has entered into this
Agreement in reliance on those warranties.
6.3 Limitation of Liability
The provisions of Schedule 5 shall apply.
6.4 Effect of Completion
The Warranties and all other provisions of this Agreement (other than
those contained in Schedule 3), in so far as the same shall not have been
performed at Completion, shall not be extinguished or affected by
Completion, or by any other event or matter whatsoever, except by a
specific and duly authorised written waiver or release by the Purchaser or
by the Vendor (as the case may be).
6.5 Waiver
Save in the case of fraud, the Vendor undertakes to the Purchaser not to
make or pursue any claim against any Relevant Employee on whom it may have
relied in giving the Warranties, preparing the Disclosure Letter and/or
entering into this Agreement and the documents entered into pursuant to
this Agreement.
6.6 Waiver of Set-Off
The Purchaser hereby waives all and any rights of set-off which it may
have with respect to any sums under this Agreement and in particular
agrees that it shall have no right of set-off of any sums due by the
Vendor for breach of any of the Warranties against any sums owed to the
Vendor by operation of Clause 3.1.1 in respect of New Bookings or Training
and Consulting Bookings.
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7 Contracts and Third Party Consents
7.1 Obligation to obtain Third Party Consents
To the extent any Licence Agreement is not assignable without a Third
Party Consent, this Agreement shall not be construed as an assignment or
an attempted assignment and the Vendor and the Purchaser shall use
reasonable endeavours both before and after Completion to obtain all
necessary Third Party Consents and shall keep the Purchaser informed of
progress in obtaining such Third Party Consents. The Vendor shall deliver
to the Purchaser, as soon as possible after receipt, any Third Party
Consent.
7.2 Obligations until Third Party Consents are obtained
In respect of any Licence Agreement, until the relevant Third Party
Consent has been obtained as contemplated by Clause 7.1:
7.2.1 the Vendor shall (to the extent that it is lawfully able to do so)
hold the benefit of the Licence Agreement on trust for the Purchaser
from Completion and, in so acting, shall:
(i) receive any payments made to the Vendor after Completion as
trustee, place the same in a separate bank account, record the
payment separately in its books and account to the Purchaser
for the same within four Business days of receipt but where
the Vendor is liable to account for VAT in respect of any
supply to which the payments relate, the Vendor shall only be
liable to account to the Purchaser amounts net of any VAT
liability;
(ii) deliver to the Purchaser as soon as practicable after receipt
any notice or other document concerning or relating to such
Licence Agreement received by the Vendor in the case where
such notice or other document relates exclusively to the
Business;
(iii) deliver to the Purchaser as soon as possible after receipt a
summary of the relevant part of any notice or other document
concerning or relating to such Licence Agreement received by
the Vendor in the case of a notice or other document relating
in part to the Business;
(iv) receive any goods delivered to it by any supplier pursuant to
such Licence Agreement as agent and trustee for the Purchaser
and deliver such goods as directed by the Purchaser;
(v) notify the Purchaser of any payment required to be made to any
supplier pursuant to any Licence Agreement whereupon the
Purchaser shall either pay the supplier direct or indemnify
the Vendor for any payment required to be made by it to the
supplier in respect thereof after Completion and when
indemnifying the Vendor the Purchaser shall be entitled to
have regard to the extent to which the Vendor is able to
obtain credit or repayment of input tax for VAT purposes in
respect of supplies of goods and/or services made to the
Vendor to which the amounts relate and the liability of the
Purchaser shall be reduced accordingly;
19
7.2.2 to the extent that the Vendor is not lawfully able to hold the
Licence Agreement on trust for the Purchaser, the parties shall make
such other arrangements between themselves as the Purchaser may
reasonably require to provide the benefits of the Licence Agreement
for the Purchaser, including the enforcement of all rights of the
Vendor against any other party thereto;
7.2.3 to the extent that the Purchaser is lawfully able to do so, the
Purchaser shall perform the Vendor's obligations under the Licence
Agreement as agent or sub-licensee or otherwise and shall indemnify
the Vendor in respect thereof. To the extent that the Purchaser is
not lawfully able to do so, the Vendor shall at its cost do all such
things as the Purchaser may reasonably require to enable due
performance of the Licence Agreement and the Purchaser shall
indemnify the Vendor in respect thereof.
7.3 Failure to Obtain Third Party Consents
If a Third Party Consent is refused or otherwise not obtained on terms
reasonably satisfactory to the Purchaser within 6 months of Completion,
the Purchaser shall be entitled by notice to the Vendor to exclude the
relevant Licence Agreement and references in this Agreement to the Licence
Agreements and the Business (other than in this Clause 7.3) shall be
construed as excluding such Licence Agreement, provided that the Vendor
shall indemnify the Purchaser against all Losses incurred by the Purchaser
in connection with the exclusion of such Licence Agreement arising from
claims made by the other party to such Licence Agreement.
8 The Relevant Employees
8.1 Transfer Regulations
The parties accept that this Agreement and the sale of the Business to be
effected by it are governed by the Transfer Regulations and the following
provisions shall apply in connection therewith:
8.1.1 the contract of employment of each of the Relevant Employees
including obligations towards each of the Relevant Employees in
respect of the GPP (save insofar as such contract relates to any
occupational pension scheme) shall have effect from Completion as if
originally made between the Relevant Employee and the Purchaser;
8.1.2 subject to Clause 8.1.11, the Vendor shall be responsible for all
wages, salaries, emoluments and other amounts due or accruing and
Taxation and National Insurance Contributions payable in respect of
the Relevant Employees in respect of the period to Completion and
will discharge all such obligations in respect of the Relevant
Employees when they become payable and whether or not the
obligations fall due for payment prior to Completion;
8.1.3 the Vendor shall indemnify the Purchaser and keep the Purchaser
indemnified against all Employment Losses which relate to or arise
out of any act or omission by the Vendor or any other event or
occurrence prior to Completion (including, for the avoidance of
doubt, Employment Losses which relate to or arise out of any
personal injury claim which has its origins before Completion) and
which the Purchaser incurs in relation to any contract of
employment, or the employment relationship or collective agreement
concerning one or more of the Relevant Employees pursuant to the
Transfer Regulations or otherwise provided that, for the avoidance
of doubt, the indemnity in this clause 8.1.3 does not relate to the
Purchaser's obligation in terms of the Transfer Regulations to
employ the Relevant Employees on the terms
20
and conditions of employment to which they were entitled immediately
prior to Completion nor does it relate to the Purchaser's obligation
to recognise their periods of continuous employment as at
Completion;
8.1.4 if any contract of employment, employment relationship of anyone
other than an employee who is listed in Schedule 13 or collective
agreement not disclosed in writing to the Purchaser shall have
effect as if originally made between the Purchaser and any employee
("Undisclosed Employee") or a trade union or other body that
represents employees as a result of the provisions of the Transfer
Regulations (without prejudice to any other rights or remedies which
may be available to the Purchaser):
(i) the Purchaser may, upon becoming aware of the application of
the Transfer Regulations to any such contract of employment or
collective agreement, terminate such contract or agreement
immediately; and
(ii) the Vendor shall indemnify the Purchaser and keep the
Purchaser indemnified against all Losses relating to or
arising out of such termination and reimburse the Purchaser
for all costs and expenses (including, without limitation, any
Taxation) incurred in employing such employee in respect of
his employment following Completion; and
(iii) the Vendor shall indemnify the Purchaser and keep the
Purchaser indemnified in respect of any Undisclosed Employee
on the same terms mutatis mutandis as the Vendor has
indemnified the Purchaser in respect of a Relevant Employee
pursuant to the terms of Clause 8.1.3;
8.1.5 the Vendor shall indemnify the Purchaser and keep the Purchaser
indemnified against all Losses which relate to or arise out of any
dismissal by the Vendor of any employee (not being a Relevant
Employee) and which the Purchaser incurs pursuant to the Transfer
Regulations;
8.1.6 the Vendor shall not take any steps to terminate the contracts of
employment of or collective agreements concerning the Relevant
Employees;
8.1.7 the Vendor shall indemnify the Purchaser and keep the Purchaser
indemnified against all Losses which relate to or arise out of any
failure by the Vendor to comply with its obligations under
Regulation 10 of the Transfer Regulations (save where those Losses
were caused as a result of the Purchaser failing to comply with its
obligations under Regulation 10 of the Transfer Regulations); and
8.1.8 the Purchaser shall deliver to each of the Relevant Employees a
letter from the Vendor and the Purchaser in the agreed terms.
8.1.9 The Purchaser hereby undertakes to indemnify and keep indemnified
the Vendor on demand from and against all Losses suffered or
incurred by the Vendor in relation to the Relevant Employees which
relate to or arise out of any act or omission by the Purchaser or
any other event or occurrence after Completion (including, without
prejudice to the foregoing generality, in relation to negligence
claims by any Relevant Employee, unfair dismissal, redundancy,
unlawful discrimination, breach of contract, unlawful deduction of
wages and equal pay).
8.1.10 The Purchaser hereby undertakes to indemnify and keep indemnified
the Vendor on demand from and against any Losses suffered or
incurred by the Vendor as a result of
21
any failure by the Purchaser to comply with its obligations under
Regulation 10(3) of the Transfer Regulations.
8.1.11 The Vendor and the Purchaser agree that, in respect of the bonuses
payable to the Relevant Employees, which are set out at Schedule 20
to this Agreement (the "Bonuses") the Purchaser will pay the
payments listed in the column headed PTS Payments on behalf of the
Vendor within 5 days of Completion, and the Purchaser will pay the
amounts listed in the column headed GSI Payments for its own parts
within 90 days of Completion. Accordingly, the Purchaser agrees to
pay to each of the Relevant Employees, within 5 days of Completion,
the payments listed in the column headed "PTS Payment" in Schedule
20 less such deductions as the Purchaser is required to make by law.
The Vendor shall, on demand, reimburse the Purchaser:-
(i) the amount of such payments made by the Purchaser to the
Relevant Employees on behalf of the Vendor; and
(ii) the amount of any Taxation and National Insurance
Contributions thereon.
8.2 Conduct of Claims
If the Purchaser becomes aware of any matter that may give rise to a claim
against the Vendor under the provisions of Clause 8.1.3, the following
provisions shall apply:
8.2.1 The Purchaser shall give notice to the Vendor of such matter or
claim as soon as reasonably practicable.
8.2.2 The Purchaser agrees that:-
(i) no admission of liability shall be made by or on behalf of the
Purchaser and the claim shall not be compromised, disposed of
or settled without the consent of the Vendor (such consent not
to be unreasonably withheld or delayed); and
(ii) the Purchaser shall be entitled to take such action as it
shall deem necessary to avoid, dispute, deny, defend, resist,
appeal, compromise or contest such claim or liability
(including, without limitation, making counterclaims or other
claims against third parties) but will not take any such
action without the consent of the Vendor, such consent not to
be unreasonably withheld or delayed.
8.2.3 Each party shall (at the expense of the Vendor) give the other party
and any of its professional advisers access to all documentation
(and shall allow them to copy such documentation), premises
personnel or other information which the other party reasonably
requires and which relate to the claim.
8.3 Definitions
For the purposes of this Clause 8:
8.3.1 the terms "contract of employment", "collective agreement" and
"trade union" shall have the same meanings respectively as are given
to those terms in the Transfer Regulations; and
8.3.2 "Employment Losses" means all Losses, Liabilities, costs (including
without limitation legal costs), charges, expenses, actions,
proceedings, claims and demands.
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9 Restrictions on the Vendors
9.1 Restrictions
9.1.1 The Vendor and Mr Rowlinson each undertake and agree with the
Purchaser and its successors in title that the Vendor and Mr
Rowlinson will not in any Relevant Capacity during the Restricted
Period:
(i) directly or indirectly carry on within Europe any business
which is of the same or substantially similar type to the
Business as now carried on by the Vendor and which is or is
reasonably considered to be in competition with any part of
the Business as now carried on ("Restricted Business") nor be
concerned or interested within Europe in any Restricted
Business;
(ii) for the purpose of a Restricted Business, canvass or solicit
the custom of any person, firm or company who has within two
years prior to Completion been a customer of the Business; or
(iii) induce or seek to induce any Restricted Employee to become
employed (whether as employee, consultant or otherwise) by the
Vendor or any member of the Vendor's Group, whether or not
such Restricted Employee would thereby commit any breach of
his contract of service.
9.1.2 The Vendor and Mr Rowlinson each further undertake and agree with
the Purchaser that they will not in any Relevant Capacity adopt, use
or carry on business under, or use as a trade mark or name for any
of its products or services, "Globetrotter" or any other trade marks
relating to the Software or the Business or any name resembling the
same, other than "PTS" or "Productivity through Software" or the
word "software".
9.2 Exceptions
The restrictions in Clause 9.1 shall not operate to prohibit the Vendors
and/or Mr Rowlinson from:
9.2.1 holding or being interested in up to 5 per cent of the outstanding
issued share capital of a company listed on any recognised stock
exchange;
9.2.2 fulfilling any obligation pursuant to this Agreement and any
agreement to be entered in to pursuant to this Agreement;
9.2.3 carrying on or being engaged or economically interested in a
Permitted Activity.
9.3 Use of Trademarks
The Vendor agrees that it will not in any Relevant Capacity adopt, use or
carry on business under, or use as a trade mark or name for any of its
products or services "Globetrotter" or any other trade marks relating to
the Software or the Business or any name resembling the same.
9.4 Reasonableness of Restrictions
The Vendor confirms that it has received independent legal advice relating
to all the matters provided for in this Agreement, including the
provisions of this Clause. The Vendor agrees that it considers that the
restrictions contained in this Clause are no greater than is reasonable
and necessary for the protection of the interest of the Purchaser but if
any such restriction shall be held to be void but would be valid if
deleted in part or reduced in application, such restriction
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shall apply with such deletion or modification as may be necessary to make
it valid and enforceable.
9.5 Interpretation
The following terms shall have the following meanings respectively in this
Clause 9:
9.5.1 "Permitted Activity" means:
(i) consulting, training and support on the use of the Software
(except to third parties who are at Completion or thereafter
at any time during the Restricted Period a party to a Customer
Contract), within or alongside any product other than the
Software resold by the Vendor where such software has been
licensed for distribution, sale, support to the Vendor by a
licensee of the Purchaser as a component part of such product
resold by the vendor and where the consulting, training or
support is solely being provided with respect to the use of
the Software embedded within the product;
(ii) any business with respect to any product or tool (a "Tool")
which may be used by a third party to develop products
substantially similar to the Software where the Tool does not
itself perform any of the functions of the Software (other
than incidental functions) and where the Tool has not been
specifically designed with the purpose of developing products
substantially similar to the Software;
(iii) any business with respect to any software component or tool
sold by the Vendor (a "Component") with a functionality
similar to the Software which is sold as a component of
another product sold by the Vendor (a "Combined Product")
where the functionality of such Component does not perform
more than an incidental part of the Combined Product as
relates to a significant function of such Combined Product and
where the Combined product is not promoted in the marketplace
as having a functionality substantially similar to the
Software;
(iv) any business with respect to any software product which does
not perform any of the commercially significant functions of
the Software and which is not promoted in the marketplace as
having functionality substantially similar to the Software;
and
(v) any business related to any customer relationship management,
bug tracking or incident tracking software that may cause the
Vendor to compete with the Purchaser in relation to its
Globetrack software product, provided that such business does
not constitute a Restricted Business with respect to the
Software other than Globetrack.
9.5.2 "FLEXlm" means a software programme which enables software vendors,
either through their customers, re-sellers or service providers to
electronically license, monitor, control, limit, use or report on
the use of their software;
9.5.3 "Relevant Capacity" means for its own account or for that of any
person, firm or company (other than the Purchaser) or in any manner
whether through the medium of any company controlled by it or as a
principal, partner, director, employee, consultant or agent.
9.5.4 "Restricted Employee" means any Relevant Employee and any other
person employed by the Purchaser during the Restricted Period who
works in relation to the Business and who, (a) has or had access to
trade secrets or other confidential information in relation to the
Business; or (b) has participated in discussions relating to the
transaction pursuant to this Agreement;
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9.5.5 "Restricted Period" means [*] following Completion in relation to
Clauses 9.1.1, in each case commencing on Completion.
10 Restrictions on the Purchaser
10.1 Restrictions
The Purchaser undertakes with the Vendor that the Purchaser will not, in
any Relevant Capacity during the [*] following Completion, induce or seek
to induce any Restricted Employee to become employed whether as employee,
consultant or otherwise of the Purchaser or any subsidiary undertaking or
fellow subsidiary undertaking or holding company of the Purchaser whether
or not such Restricted Employee would thereby commit any breach of his
contract of service without Mr Rowlinson's consent.
10.2 Reasonableness of Restrictions
The Purchaser confirms that it has received independent legal advice
relating to all the matters provided for in this Agreement, including the
provisions of this Clause. The Purchaser agrees that they consider that
the restrictions contained in this Clause are no greater than is
reasonable and necessary for the protection of the interest of the
Purchaser but if any such restriction shall be held to be void but would
be valid if deleted in part or reduced in application, such restriction
shall apply with such deletion or modification as may be necessary to make
it valid and enforceable.
10.3 Use of Vendor's name and trademarks
10.3.1 The Purchaser shall, from Completion, use its best endeavours not
to adopt, carry on or represent itself in any Relevant Capacity as
carrying on business under the Vendor's name.
10.3.2 The Purchaser agrees that it will not in any Relevant Capacity
adopt, use or carry on business under, or use as a trademark or name
for any other products or services "PtS" and/or "Productivity
through Software" and/or any logo or get up used in conjunction
therewith or any trademarks, logo or get up or any name resembling
any of them.
10.3.3 The Purchaser shall indemnify and agrees to keep indemnified the
Vendor, up to a maximum aggregate amount of USD$[*], against any
Losses suffered or incurred by the Vendor resulting from a breach by
the Purchaser of its obligations under Clause 10.3.1.
10.4 Interpretation The following terms shall have the following meanings
respectively in this Clause 10:
"Relevant Capacity" means for its own account or for that of any person,
firm or company (other than the Vendor) or in any manner whether through
the medium of any company controlled by it or as a principal, partner,
director, employee, consultant or agent;
"Residual Business" means any business operated by the Vendor following
the sale of the Business which is not in breach of Clause 9 hereof; and
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"Restricted Employee" means any employee of the Vendor (excluding for the
avoidance of doubt, any Relevant Employee) during the Restricted Period
who (a) has access to trade secrets or other confidential information in
relation to the Residual Business; or (b) has participated in discussions
relating to the transaction pursuant to this Agreement.
11 Post-Completion Obligations
11.1 The Assumed Liabilities
11.1.1 If the Vendor becomes aware after Completion of any claim which
constitutes or may constitute an Assumed Liability, the Vendor shall
as soon as reasonably practicable give written notice thereof to the
Purchaser and shall not admit, compromise, settle, discharge or
otherwise deal with such claim without prior consultation with or
the prior agreement of the Purchaser.
11.1.2 In connection therewith the Vendor shall make or procure to be made
available to the Purchaser or its duly authorised agents, at the
Purchaser's request, acting reasonably and on reasonable notice
during normal business hours all relevant books of account, records
and correspondence relating to the Business which have been retained
by the Vendor (and shall permit the Purchaser to take copies thereof
at its own cost) for the purposes of enabling the Purchaser to
ascertain or extract any information relevant to the claim.
11.2 Insurance and other Recoveries
If at any time after Completion, the Vendor receives any insurance or
other monies in respect of any Claim, then the Vendor shall pay to the
Purchaser as soon as reasonably practicable the amount recovered.
11.3 Vendor's Continuing Obligations
Notwithstanding Completion, the Vendor shall as part of its obligations
under the Consultants Services Agreement:
11.3.1 continue to give to the Purchaser, at the Purchaser's reasonable
request, such information and assistance as the Purchaser may
reasonably require, and at the Purchaser's expense, relating to the
Business, its employees, customers and suppliers, its current
contracts and engagements and its trade debtors and trade creditors
and pass on any trade enquiry which the Vendor receives;
11.3.2 (without prejudice to the provisions of Clause 7), from time to
time execute and perform all such acts, deeds and documents and
afford to the Purchaser, at the Purchaser's expense, such assistance
as the Purchaser may reasonably require:
(i) for the purpose of vesting in the Purchaser the full benefit
of the Business and implementing all the provisions of this
Agreement;
(ii) for the purpose of vesting to the extent possible under law in
the Purchaser or as it may direct the full benefit of any
rights, powers, remedies, claims or defences (including
without limitation rights of set-off and counterclaim) which
the Vendor may have in relation to any Claim or Assumed
Liability or otherwise ensuring that the same ensure for the
benefit of the Purchaser and to the extent not possible under
law to hold the same on trust for the Purchaser;
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(iii) to enable to the extent possible under law any claim, action,
suit, prosecution, litigation, proceeding, dispute or
arbitration to which the Vendor was a party and which relates
to any Claim or Assumed Liability to be continued by or
against the Purchaser and to the extent not possible under law
to hold the same on trust for the Purchaser; and
(iv) to enable to the extent possible under law any judgment or
award obtained by the Vendor and not fully satisfied as at
Completion, to the extent to which it is a Claim enforceable
by the Vendor, to be enforced by the Purchaser, whether by the
Purchaser joining itself as a defendant or by the Purchaser
consenting to any plaintiff concerned joining it as a
defendant or otherwise and to the extent not possible under
law to hold the same on trust for the Purchaser;
11.3.3 at the Purchaser's expense, communicate all or any of the Vendor's
Know-how to such persons in the employment of the Purchaser or any
of its subsidiaries as the Purchaser may request ;
11.3.4 except as provided in Clauses 13.3.4 and 13.3.6, keep confidential
and not disclose or make use of any part of the Vendor's
Intellectual Property or the Vendor's Know-how or any other
Intellectual Property or Know-how which is the subject of the
Licence Agreements or any other confidential information relating to
the Business (except to the extent that the Vendor's Know-how or any
part thereof has come into the public domain otherwise than through
unauthorised disclosure by the Vendor) and at the Purchaser's
expense assist the Purchaser in the prosecution of all applications
to register the Vendor's Intellectual Property (whether such
applications are outstanding at Completion or made thereafter by the
Purchaser) and to establish, confirm or defend title to the Vendor's
Intellectual Property. For the avoidance of doubt, the Vendor shall
not be prohibited from using or disclosing such information for the
purposes of the Residual Business, to the extent that such
information was not used exclusively in the Business by the Vendor
as at or within 6 months prior to Completion; and
11.3.5 allow the Purchaser reasonable access to, and copies of any books,
records or other information relating to the Business which is not
delivered to the Purchaser pursuant to paragraph 1.1.8 of Schedule
3.
11.4 Duration
This Clause 11 will apply for a period of 1 year following Completion.
12 Guarantees
12.1 Macrovision Guarantee
12.1.1 In consideration for the benefits conferred on it herein,
Macrovision unconditionally and irrevocably guarantees to the Vendor
the full due and punctual performance and observance by the
Purchaser of all the Purchaser's obligations, commitments,
undertakings, warranties and indemnities under or pursuant to the
terms of this Agreement and all other documents referred to in the
Agreement. If the Purchaser fails in the full due and punctual
performance and observance of its obligations hereunder and
thereunder then Macrovision shall be liable for such obligations of
the Purchaser as if it were a primary obligator and not a surety.
12.1.2 The obligations of Macrovision under Clause 12.1:
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(i) shall be continuing obligations and shall not be satisfied,
discharged, lessened, impaired or affected by any intermediate
payment or settlement of account or any change in the
constitution or control of, or the insolvency of, or any
liquidation, winding up or analogous proceedings relating to,
the Purchaser or any changes in the terms, conditions and
undertakings on the part of the Purchaser contained in this
Agreement or in any other document referred to in this
Agreement; and
(ii) shall not be discharged, prejudiced, lessened, affected or
impaired by any act, omission or circumstance whatsoever which
but for these provisions might operate to release or exonerate
the Purchaser from all or any part of such obligations or in
any way discharge, prejudice, lessen, affect or impair the
same.
12.2 Mr Rowlinson Guarantee
12.2.1 In consideration for the benefits conferred on him herein, Mr
Rowlinson unconditionally and irrevocably guarantees to the
Purchaser the full due and punctual performance and observance by
the Vendor of all the Vendor's obligations, commitments,
undertakings, warranties and indemnities under or pursuant to the
terms of this Agreement and all other documents referred to in the
Agreement. If the Vendor fails in the full due and punctual
performance and observance of its obligations hereunder and
thereunder then Mr Rowlinson shall be liable for such obligations of
the Vendor as if he were a primary obligator and not a surety,
provided that the Vendor shall not seek to enforce the guarantee
granted to it by Mr Rowlinson under this Clause 12.2 until it has
first used all reasonable endeavours to pursue its rights against
the Vendor.
12.2.2 The obligations of Mr Rowlinson under Clause 12.2.1:
(i) shall be continuing obligations and shall not be satisfied,
discharged, lessened, impaired or affected by any intermediate
payment or settlement of account or any change in the
constitution or control of, or the insolvency of, or any
liquidation, winding up or analogous proceedings relating to,
the Vendor or any changes in the terms, conditions and
undertakings on the part of the Vendor contained in this
Agreement or in any other document referred to in this
Agreement; and
(ii) shall not be discharged, prejudiced, lessened, affected or
impaired by any act, omission or circumstance whatsoever which
but for these provisions might operate to release or exonerate
the Vendor from all or any part of such obligations or in any
way discharge, prejudice, lessen, affect or impair the same.
12.3 Limit on Mr Rowlinson's Liability
The maximum liability of Mr Rowlinson pursuant to his obligations under
Clause 12.2 of this Agreement shall be USD$[*].
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13 Other Provisions
13.1 Announcements
13.1.1 Pending and following Completion, the Vendor and the Purchaser
shall, subject to the requirements of law or by any regulatory body,
or the rules and regulations of any recognised stock exchange,
consult together as to the terms of, the timetable for and manner of
publication of, any formal announcement or circular to shareholders,
employees, customers, suppliers, distributors and sub-contractors
and to any recognised stock exchange or other authorities or to the
media or otherwise which either party may desire or be obliged to
make regarding this Agreement and transactions contemplated by this
Agreement. The Vendor will consult with the Purchaser on any press
release which the Vendor may desire to issue, and any such press
release shall require the Purchaser's consent, which consent shall
not be unreasonably withheld. The Purchaser will consult with the
Vendor regarding any press releases that the Purchaser desires to
issue following Completion, and any such press release shall require
the Vendor's consent, which consent shall not be unreasonably
withheld, except for the issue of the Press Release in the agreed
terms as set out in Schedule 19.
13.1.2 Subject to Clause 13.1.1, no party shall pending Completion make or
authorise or issue any formal announcement or circular or other
communication concerning the subject matter of this Agreement or any
transaction referred to in or contemplated by this Agreement.
13.2 Entire Agreement
This Agreement and the documents referred to herein (including, without
limitation, any Related Agreements) set out the entire agreement and
understanding between the parties in relation to the subject matter of
this Agreement and each of the parties hereto hereby confirms that it has
not entered into this Agreement in reliance upon any representation,
warranty or undertaking which is not set out or referred to in this
Agreement or any Related Agreements. Nothing in this Clause shall operate
to limit or exclude liability for fraud.
13.3 Confidentiality
13.3.1 This Agreement supersedes the Letter Agreement.
13.3.2 Subject to Clause 13.3.6, during the period ending [*] from the
date of Completion, each party shall treat as confidential and not
disclose or use any information received or obtained as a result of
entering into this Agreement (or any agreement entered into pursuant
to this Agreement) which relates to:
(i) the provisions of this Agreement, any Related Agreement and
any agreement entered into pursuant to this Agreement;
(ii) the negotiations relating to this Agreement (and such other
agreements); or
(iii) without prejudice to Clause 13.3.5, the other party's
business, financial or other affairs (including future plans
and targets) including, for the avoidance of doubt, any such
information provided by or obtained from any of the Relevant
Employees.
29
13.3.3 On Completion, the Vendor shall assign to the Purchaser, to the
extent permitted by the terms of the relevant agreement, the benefit
of any confidentiality agreements entered into by the Vendor in
connection with the sale of the Business.
13.3.4 Subject to Clause 13.3.6, the Vendor hereby undertakes that it
shall not make use of or divulge or communicate to any person, and
shall use its best endeavours to prevent the use, publication or
disclosure of, any confidential information exclusively or primarily
concerning the Business or any dealings, transactions or affairs or
other information exclusively or primarily relating to the Business
which it shall have received or obtained as an owner of the
Business. For the avoidance of doubt, the Vendor shall not be
prohibited from using or disclosing such information for the
purposes of the Residual Business, to the extent that such
information was not used exclusively in the Business by the Vendor
as at or within 6 months prior to Completion.
13.3.5 Confidential information for the purposes of Clause 13.3.4 shall
include any information relating exclusively or primarily to the
Business and, in particular shall, include:
(i) the business methods and information of the Vendor (to the
extent it relates exclusively or primarily to the Business),
including prices charged, discounts, given to customers or
obtained from suppliers, product development, marketing and
advertising programmes, costing, budgets, turnover, sales
targets or other financial information;
(ii) lists and particulars of any Business customers or prospective
customers and the individual contracts with such customers,
whether or not in the case of documents or other written materials
they are or were marked as confidential and whether or not, in the
case of other information, such information is identified or treated
by the Vendor as being confidential.
13.3.6 Neither Clause 13.3.2 nor Clause 13.3.4 shall prohibit disclosure
or use of any information if and to the extent:
(i) the disclosure or use is required by law, any regulatory body
or the rules and regulations of any recognised stock exchange;
(ii) the disclosure or use is required to vest the full benefit of
this Agreement in either party;
(iii) the disclosure or use is required for the purpose of any
judicial proceedings arising out of this Agreement or any
other agreement entered into under or pursuant to this
Agreement or the disclosure is made to a Tax authority in
connection with the Tax affairs of the disclosing party;
(iv) the disclosure is made to professional advisers of the
Purchaser or the Vendor on terms that such professional
advisers undertake to comply with the provisions of Clause
13.3.2 in respect of such information as if they were a party
to this Agreement;
(v) the information becomes publicly available (other than by
breach of the Letter Agreement or of this Agreement);
(vi) the other party has given prior written approval to the
disclosure or use; or
(vii) the information is independently developed after Completion,
30
provided that, prior to disclosure or use of any information
pursuant to Clause 13.3.2(i),13.3.2(ii) or13.3.2(iii) (except in the
case of disclosure to a Tax authority), the party concerned shall
promptly notify the other party of such requirement with a view to
providing the other party with the opportunity to contest such
disclosure or use or otherwise to agree the timing and content of
such disclosure or use.
13.4 Return of Documents etc.
If Completion does not take place, the Purchaser shall forthwith return
all written information of or relating to the Vendor or the Vendor's Group
provided to the Purchaser or its advisers (the "Confidential Information")
which is in the Purchaser's possession or under the Purchaser's custody
and control without keeping any copies thereof provided that the
Purchaser's advisers may keep one copy of any document in their possession
for record purposes without prejudice to any duties of confidentiality in
relation to such Confidential Information contained in this Agreement or
the Letter Agreement.
13.5 Successors and Assigns
13.5.1 Subject to Clause 13.5.2, this Agreement is personal to the parties
to it. Accordingly, neither the Purchaser nor the Vendor may,
without the prior written consent of the other, assign the benefit
of all or any of the other's obligations under this Agreement, nor
any benefit arising under or out of this Agreement except as
contemplated by Clause 13.5.2.
13.5.2 Except as otherwise expressly provided in this Agreement, either
the Vendor or the Purchaser may, without the consent of the other,
assign to a connected company the benefit of all or any of the other
party's obligations under this Agreement. For the purposes of this
sub-clause a "connected company" is a company which is a subsidiary
of the party concerned or which is a holding company of such party
or a subsidiary of such holding company. 13.6 Third Party Rights A
person who is not a party to this Agreement has no right under the
Contracts (Rights of Third Parties) Act 1999 to enforce any term of
this Agreement.
13.7 Variation etc.
13.7.1 No variation of this Agreement shall be effective unless in writing
and signed by or on behalf of each of the parties to this Agreement.
13.7.2 For the purposes of Section 2 of the Law of Property (Miscellaneous
Provisions) Act 1989, this Agreement shall be deemed to incorporate
all documents directly or indirectly required to be executed
pursuant to it.
13.8 Time of the Essence
Time shall be of the essence of this Agreement both as regards any dates,
times and periods mentioned and as regards any dates, times and periods
which may be substituted for them in accordance with this Agreement or by
agreement in writing between parties.
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13.9 Costs
The Vendor shall bear all costs incurred by it in connection with the
preparation, negotiation and entry into of this Agreement and the sale of
the Business. The Purchaser shall bear all such costs incurred by it.
13.10 Interest
If the Vendor or the Purchaser defaults in the payment when due of any sum
payable under this Agreement (howsoever determined) the liability of the
Vendor or the Purchaser (as the case may be) shall be increased to include
interest on such sum from the date when such payment is due until the date
of actual payment (as well after as before judgment) at a rate per annum
of [*] per cent above the base rate from time to time of Barclays Bank
PLC. Such interest shall accrue from day to day and shall be compounded
with monthly rests.
13.11 Grossing-up of Indemnity Payments, VAT
13.11.1 Where any payment is made under this Agreement pursuant to an
indemnity, compensation or reimbursement provision and that sum is
subject to a charge to taxation in the hands of the recipient, then
to the extent that such charge to taxation would not have arisen had
any amounts, for the loss of which indemnity is made, compensation
or reimbursement made, been received the sum payable shall be
increased to such sum as will ensure that after payment of such
taxation (and after giving credit for any tax relief available to
the recipient in respect of the matter giving rise to the payment)
the recipient shall be left with a sum equal to the sum that it
would have received in the absence of such a charge to taxation.
13.11.2 Where any sum (the "Indemnity Sum") constituting an indemnity,
compensation or reimbursement to any party to this Agreement (the
"Recipient") is paid to a person other than the Recipient but is
treated as taxable in the hands of the Recipient except to the
extent that Clause 13.11.1 is or has been applied to the Indemnity
Sum, the payer shall promptly pay to the Recipient such sum as shall
reimburse the Recipient for all Taxes suffered by it in respect of
the payment (after giving credit for any tax relief available to the
Recipient in respect of the matter giving rise to the payment).
13.11.3 Where under the terms of this Agreement one party is liable to
indemnify or reimburse another party in respect of any costs,
charges or expenses, the payment shall include an amount equal to
any VAT thereon not otherwise recoverable by the other party,
subject to that party using all reasonable endeavours to recover
such amount of VAT as may be practicable.
13.11.4 If any payment made by the Vendor to the Purchaser or by the
Purchaser to the Vendor under this Agreement constitutes the
consideration for a taxable supply for VAT purposes, then in
addition to that payment the payer shall pay any VAT due.
13.12 Notices
13.12.1 Any notice or other communication in connection with this
Agreement or with any arbitration or intended arbitration under this
Agreement shall be in writing in English (a "Notice") and shall be
sufficiently given or served if delivered or sent:
In the case of the Vendor to:
Manor Park Avenue
Manor Park
32
Cheshire WA7 I1L
United Kingdom
Fax: 01928 579 701
Attention: The Company Secretary
In the case of the Purchaser:
Woodley House, Crockhamwell Road, Woodley RG5 3JP
United Kingdom
Fax: 020 8839 0409
Attention: The Company Secretary
33
In the case of Macrovision to:
1341 Orleans Drive
Sunnyvale, CA 94089
Fax: 001 408 743 8610
Attention: Chief Financial Officer
In the case of Mr Rowlinson to:
The Kennels
Park Lane, Higher Walton
Warrington WA4 5LH
United Kingdom
Fax: o
Attention: Mr Rowlinson
or (in any case) to such other address or fax number in the United
Kingdom as the relevant party may have notified to the other in
accordance with this Clause.
13.12.2 Any Notice may be delivered by hand or sent by courier, fax or
prepaid first class post. Without prejudice to the foregoing, any
Notice shall conclusively be deemed to have been received on the
next working day in the place to which it is sent, if sent by
courier or fax, or 60 hours from the time of posting, if sent by
post, or at the time of delivery, if delivered by hand.
13.13 Appointment of Process Agent by Macrovision
13.13.1 Macrovision hereby irrevocably appoints the Purchaser as its agent
to accept service of process in England in any legal action or
proceedings arising out of this Agreement, service upon whom shall
be deemed completed whether or not forwarded to or received by
Macrovision.
13.13.2 The Purchaser on behalf of Macrovision shall inform the Vendor, in
writing, of any change in the address of the process agent of
Macrovision within 28 days.
13.13.3 If such process agent ceases to be able to act as such or to have
an address in England, Macrovision irrevocably agrees to appoint a
new process agent in England acceptable to the Vendor and to deliver
to the Vendor within 14 days a copy of a written acceptance of
appointment by the process agent.
13.13.4 Nothing in this Agreement shall affect the right to serve process
in any other manner permitted by law or the right to bring
proceedings in any other jurisdiction for the purposes of the
enforcement or execution of any judgement or other settlement in any
other courts.
13.14 Severance
If any term or provision of this Agreement is held to be illegal or
unenforceable, in whole or in part, under any enactment or rule of law,
such term or provision or part shall to that extent be deemed not to form
part of this Agreement, but the enforceability of the remainder of this
Agreement shall not be affected thereby.
34
13.15 Counterparts
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument. Any party may
enter into this Agreement by executing any such counterpart.
13.16 Governing Law and Submission to Jurisdiction
13.16.1 This Agreement and the documents to be entered into pursuant to it
shall be governed by and construed in accordance with English law.
13.16.2 The parties irrevocably agree that the courts of England are to
have exclusive jurisdiction to settle any disputes which may arise
out of or in connection with this Agreement and the documents to be
entered into pursuant to it. The parties irrevocably submit to the
jurisdiction of such courts and waive any objection to proceedings
in any such court on the ground of venue or on the ground
proceedings have been brought in an inconvenient forum.
Executed as an Agreement.
35
SIGNED by John Rowlinson
on behalf of
Productivity Through Software plc }
Date: 4 October 2000
SIGNED by David Simmons as attorney for
on behalf of C-Dilla Limited
C-Dilla Limited }
Date: 4 October 2000
Name
Address
Occupation
SIGNED by David Simmons as attorney for
on behalf of Macrovision Corporation
Macrovision Corporation }
Date: 4 October 2000
Name
Address
Occupation
SIGNED by Mr John Rowlinson
36
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