EXHIBIT 99.1
Dated 19th June 2002
SHARE PURCHASE AGREEMENT
between
Redwave plc
as vendor
GlobalWave Group plc
as group
and
Wave Systems Corp.
as purchaser
relating to
the sale and purchase of the whole issued share capital of
GlobalWave Limited and its wholly owned subsidiaries
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CONTENTS
1. Interpretation.........................................................1
1.1 Definitions.......................................................1
1.2 Construction of certain references................................3
1.3 Headings..........................................................4
1.4 Schedules.........................................................4
2. Sale of shares.........................................................4
2.1 Sale and purchase.................................................4
2.2 Full Title Guarantee..............................................4
2.3 No sale of part only..............................................4
3. Consideration..........................................................4
4. Condition..............................................................5
4.1 Condition.........................................................5
4.2 Satisfaction......................................................5
4.3 Disclosure of difficulties in satisfying the Condition............5
4.4 Waiver............................................................5
5. Completion.............................................................5
5.1 Completion Escrow.................................................5
5.2 Material Adverse Change...........................................6
5.3 Vendor's obligations..............................................6
5.4 Purchaser's obligations...........................................7
5.5 Insurances........................................................8
6. Warranties.............................................................8
6.1 General...........................................................8
6.2 Warranties by Vendor and Group....................................8
6.3 Purchaser's Remedies..............................................8
6.4 Warranties by Purchaser...........................................9
6.5 Undertaking by Purchaser.........................................10
7. Post Completion Obligations...........................................10
7.1 Books and Records................................................10
8. External Claims.......................................................10
8.1 Notification and consultation....................................10
8.2 Conduct of External Claims by Vendor.............................11
8.3 Reports by Vendor................................................11
8.4 Conduct of External Claims by the Purchaser......................11
9. Confidentiality.......................................................12
9.1 Confidentiality..................................................12
9.2 Permitted disclosures............................................12
9.3 Continuance of restrictions......................................12
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10. Announcements.........................................................13
10.1 Restrictions.....................................................13
10.2 Permitted announcements..........................................13
10.3 Continuance of restrictions......................................13
11. Provisions relating to this Agreement.................................13
11.1 Successors and assigns...........................................13
11.2 Whole agreement and variations...................................13
11.3 Agreement survives Completion....................................13
11.4 Rights etc cumulative and other matters..........................13
11.5 Invalidity.......................................................14
11.6 Counterparts.....................................................14
11.7 Costs............................................................14
11.8 Notices..........................................................14
12. Law and Jurisdiction..................................................15
12.1 English Law......................................................15
12.2 Jurisdiction.....................................................15
12.3 Contracts (Rights of Third Parties) Act 1999.....................15
schedule 1: THE COMPANY....................................................16
schedule 2: THE SUBSIDIARIES...............................................17
schedule 3: WARRANTIES.....................................................19
1. Construction..........................................................19
2. Warranties............................................................19
3. The Company and the Vendor............................................19
3.1 Capacity.........................................................19
3.2 Ownership of Sale Shares.........................................20
3.3 Loans owing to or by Vendor......................................20
4. The Company's Constitution............................................20
4.1 Share Capital....................................................20
4.2 Options etc......................................................20
4.3 Memorandum and Articles..........................................20
5. The Company and its investments.......................................20
5.1 Particulars of the Company and Subsidiaries.......................20
5.2 Investments, associations and branches............................20
6. The Company and the law...............................................21
6.1 Orders, decrees and judgements....................................21
6.2 Litigation........................................................21
6.3 Employees.........................................................21
6.4 Licence...........................................................21
6.5 Equipment.........................................................22
schedule 4: THE AUDITED ACCOUNTS...........................................23
schedule 5: EQUIPMENT LIST.................................................50
schedule 6: AGREED FORM DOCUMENTS..........................................52
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THIS AGREEMENT is dated the 19th day of June 2002 and made
BETWEEN:
(1) REDWAVE PLC, (the "Vendor"), registered in England and Wales as company
number 03838649 and having its registered office at 00 Xxxxxxx Xxx, Xxxxxxx
Xxxxxx XX0 0XX
(2) GLOBALWAVE GROUP PLC, ("Group"), registered in England and Wales as company
number 14134697 and having its registered office at 00 Xxxxxxx Xxx,
Xxxxxxx, Xxxxxx XX0 0XX.; and
(3) WAVE SYSTEMS CORP., (the "Purchaser"), a NASDAQ listed company with symbol
"WAVX" and having its registered office at 000 Xxxxxxxx Xxxxxx, Xxx,
Xxxxxxxxxxxxx, XX00000 XXX
BACKGROUND:
The Vendor wishes to sell and the Purchaser wishes to acquire the entire issued
share capital of GlobalWave Limited, which owns the entire issued share capital
of Wave Europe Limited and The Hub Post Productions Limited on and subject to
the terms of this Agreement.
THE PARTIES AGREE THAT:
1. INTERPRETATION
1.1 DEFINITIONS
In this Agreement where the context admits:
"AFFILIATE" means, in relation to a body corporate, any subsidiary or
holding company of such body corporate, and any subsidiary of any such holding
company for the time being.
"AGREED FORM" means, in relation to any document, a document in the terms
signed or initialled by or on behalf of the parties for identification.
"AUDITED ACCOUNTS" means the audited balance sheet of the Company and the
Subsidiaries made up as at the Balance Sheet Date and the audited profit and
loss account of the Company and the Subsidiaries in respect of the financial
year ended on the Balance Sheet Date including, in each case, the notes thereto
and the directors' report and auditors' report.
"BALANCE SHEET DATE" means 30 June 2001.
"BUSINESS DAY" means a day (other than a Saturday or Sunday) on which banks
are open for ordinary banking business in London.
"COMPANY" means GlobalWave Limited, a company registered in England and
Wales under company number 03402827 and incorporated on 08 July 1997 as a
private company limited by shares under the Companies Xxx 0000 details of which
are set out in Schedule 1.
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"COMPANIES ACTS" means statutes from time to time in force concerning
companies including (without limitation) the Companies Xxx 0000, the Companies
Xxx 0000, Part V of the Criminal Justice Xxx 0000 and the Companies
Consolidation (Consequential Provisions) Xxx 0000.
"COMPLETION" means completion of the sale and purchase of the Sale Shares
in accordance with clause 5.
"COMPLETION DATE" means 24 July 2002, but if the Condition has not been
satisfied or waived on or before such date, "COMPLETION DATE" shall mean such
other date as the parties may agree but, in any event, not later than 30 August
2002.
"COMPLETION ESCROW" means the pre-completion meeting set out in clause 5.1
"CONDITION" means the condition set out in clause 4.1.
"CONSIDERATION SHARES" means common stock of the Purchaser credited as
fully paid together with all registration rights relating thereto.
"CONTINUING DIRECTORS" means in relation to the Company or the
Subsidiaries, its directors remaining in office after the Completion Date.
"DEED OF RELEASE" means the deed between the parties releasing certain
obligations.
"DIRECTORS" means in relation to the Company or the Subsidiaries, its
directors.
"ENCUMBRANCE" means any mortgage, charge, pledge, lien, assignment,
hypothecation, security interest (including any created by law), or other
security agreement or arrangement but does not include any retention of title
provision.
"ESCROW AGENT" means Simlaw Services Limited, a company owned by Xxxxxxx &
Xxxxxxx.
"ESCROW LETTER" means a letter to be signed in Agreed Form by the Escrow
Agent, the Vendor, Group and the Purchaser relating to the arrangements for
Completion Escrow.
"FIRST INSTALMENT" means the amount of Consideration Shares so designated
in clause 3.1(A).
"PURCHASER'S GROUP" means the Purchaser and each of its Affiliates
including, after Completion, the Company and the Subsidiaries.
"SALE SHARES" means the shares to be bought and sold pursuant to clause 0
being all the issued shares in the capital of the Company.
"SECOND INSTALMENT" means such further amount of Consideration Shares to be
held in escrow by the Escrow Agent and issued to the Vendor in accordance with
clause 5.5(D).
"XXXXXXX & XXXXXXX" means Xxxxxxx & Xxxxxxx, the solicitors to Redwave plc,
whose address is CityPoint, Xxx Xxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX.
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"SUBSCRIPTION AGREEMENT" means the agreement between the Vendor and the
Purchaser relating to certain matters connected with the holding of the
Consideration Shares.
"SUBSIDIARIES" means Wave Europe Limited, a company registered in
England and Wales under number 03406429 and incorporated on 16 July 1997 as a
private company limited by shares under the Companies Xxx 0000 and The Hub
Post Productions Limited, a company registered in England and Wales under
number 04361126 which is dormant, further details of which are set out in
Schedule II.
"TOTAL CONSIDERATION" means the First Instalment Shares and the Second
Instalment Shares.
"VENDOR'S GROUP" means the Vendor and each of its Affiliates other than the
Company and the Subsidiaries.
"WARRANTIES" means the warranties by the Vendor and Group implied by the
words "with full title guarantee" in clause 2.2 and the Warranties set out in
clause 6, and in paragraphs 3 - 6 of Schedule 3, and all other warranties,
covenants and indemnities contained in this Agreement or implied by law.
1.2 CONSTRUCTION OF CERTAIN REFERENCES
In this Agreement, where the context admits:
(A) words and phrases the definitions of which are contained or referred to in
Part XXVI Companies Act 1985 shall be construed as having the meanings
thereby attributed to them;
(B) references to, or to any provision of, any treaty, statute, directive,
regulation, decision, order, instrument, by-law, or any other law of, or
having effect in, any jurisdiction ("LAWS") shall be construed also as
references to all other Laws made under the Law referred to, and to all
such Laws as amended, re-enacted, consolidated or replaced or as their
application is modified by other Laws as at the date of this Agreement;
(C) where any statement is to the effect that the Vendor is not aware of any
matter or circumstance, or is a statement qualified by the expression "SO
FAR AS THE VENDOR IS AWARE" or "TO THE BEST OF THE VENDOR'S KNOWLEDGE AND
BELIEF" or any similar expression, that statement shall refer to the state
of the actual knowledge of the Directors of the Vendor and of no other
persons and neither the Vendor nor such Directors shall be obliged to
enquire of any other persons;
(D) references to clauses and schedules are references to clauses of and
schedules to this Agreement, references to paragraphs are, unless otherwise
stated, references to paragraphs of the schedule in which the reference
appears;
(E) references to the singular shall include the plural and vice versa and
references to the masculine, the feminine and the neuter shall include all
such genders;
(F) "PERSON" includes any individual, partnership, body corporate, corporation
sole or aggregate, state or agency of a state, and any unincorporated
association or organisation, in each case whether or not having separate
legal personality; and
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(G) "COMPANY" includes any body corporate.
1.3 HEADINGS
The headings and sub-headings are inserted for convenience only and shall
not affect the construction of this Agreement.
1.4 SCHEDULES
Each of the schedules shall have effect as if set out herein.
2. SALE OF SHARES
2.1 SALE AND PURCHASE
Subject to the terms of this Agreement, the Vendor shall sell and the
Purchaser shall purchase, free from all Encumbrances and together with all
rights now or hereafter attaching thereto the entire issued share capital of the
Company comprising of 660,000 ordinary class A shares and 440,000 ordinary class
B shares of (pound)1 each.
2.2 FULL TITLE GUARANTEE
Upon Completion the Vendor shall be deemed to have given to the Purchaser
in relation to the Sale Shares sold by it the same covenants for title in
relation to the sale of the Sale Shares as are implied by Part 1 of the Law of
Property (Miscellaneous Provisions) Xxx 0000 where a disposition is expressed to
be made with full title guarantee.
2.3 NO SALE OF PART ONLY
Neither the Vendor nor the Purchaser shall be obliged to complete the sale
and purchase of any of the Sale Shares unless the sale and purchase of all the
Sale Shares is completed.
3. CONSIDERATION
3.1 The Total Consideration for the Sale Shares shall be the allotment to the
Vendor of the aggregate of:-
(A) 900,000 Consideration Shares credited as fully paid together with all
registration rights relating thereto (the "FIRST INSTALMENT SHARES"); and
(B) 800,000 Consideration Shares credited as fully paid together with all
registration rights relating thereto to be held in escrow (the "SECOND
INSTALMENT SHARES").
3.2 The Consideration Shares shall rank pari passu and as a single class with
the common stock of the Purchaser in issue at the date of this Agreement, and
shall carry the right to receive in full all dividends and other distributions
declared, made or paid after the date of this Agreement.
3.3 The First Instalment Shares shall be allotted to the Vendor on Completion in
accordance with clause 5.4(C).
3.4 The Second Instalment Shares shall be held in escrow by the Escrow Agent in
accordance with clause 5.1 and released to the Vendor in accordance with clause
5.4(D).
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3.5 The Vendor and Group hereby agree to assume and pay all liabilities of the
Company and the Subsidiaries on Completion (whether such liabilities are known
or unknown and including any contingent liabilities).
4 CONDITION
4.1 CONDITION
Completion is conditional upon the passing at a duly convened and held
general meeting of Group of a resolution in Agreed Form to approve the sale of
the Sale Shares and other arrangements on the terms of this Agreement;
In the event that the above Condition shall not have been satisfied or
waived by the Purchaser or the Vendor on or before 30 August 2002 this Agreement
shall lapse and no party shall make any claim against any other in respect
hereof, save for any antecedent breach and subject to clause 11.7.
4.2 SATISFACTION
The Vendor and Group shall use their reasonable endeavours to satisfy or
procure the satisfaction of the Condition set out in clause 4.1 and shall notify
the Purchaser immediately upon the satisfaction thereof. The Vendor and Group
undertake to the Purchaser that the Directors will post a circular to their
shareholders on or around 20 June 2002 recommending such shareholders to vote in
favour of the resolution referred to in clause 4.1 and stating that the
directors are of the opinion that the sale is in the best interests of such
shareholders.
4.3 DISCLOSURE OF DIFFICULTIES IN SATISFYING THE CONDITION
Should the Vendor or the Purchaser become aware of anything which will or
may prevent any of the Conditions from being satisfied, it shall forthwith
disclose the same to the other of them.
4.4 WAIVER
The Purchaser or the Vendor may waive in whole or in part all or any of the
Conditions or extend the period in which the Conditions are is to be satisfied.
5 COMPLETION
5.1 COMPLETION ESCROW
(A) On the Business Day after the satisfaction of the Condition contained in
clause 4.1 (expected to be on 24 July 2002) the parties hereto shall hold a
pre-completion meeting at the offices of the Escrow Agent at which they
shall sign the Escrow Letter and deliver to the Escrow Agent all documents
referred to in the Escrow Letter.
(B) Following the Escrow Letter being signed by the parties, Completion shall
take place.
5.2 MATERIAL ADVERSE CHANGE
Notwithstanding any other provision of this Agreement, the Vendor shall not
be obliged to proceed with the purchase of the Consideration Shares and shall be
entitled by notice to the Purchaser to rescind this Agreement without any
liability whatsoever should any of the following events occur or be discovered
at any time after the entry into the Agreement and before Completion namely:-
(A) if there is a material deterioration in the share price of the Purchaser;
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(B) if there is a material deterioration in the financial position,
profitability, or turnover of the Purchaser and its Affiliates as shown in
the last Audited Accounts or in their prospects;
(C) a deterioration occurs in the general economic position of the US economy
which is reasonably likely to result in a material deterioration in the
financial position, profitability or turnover of the Purchaser and its
Affiliates taken as a whole as shown in the last Audited Accounts or in
their prospects; or
(D) the Purchaser or any of its Affiliates ceases its business for any reason,
becomes insolvent, becomes the subject of a bona fide petition for, or
enters into, liquidation or administration or suffers the appointment of a
receiver or administrative receiver of the whole over any part of its
assets or undertaking, or makes, or seeks to make any composition or
arrangement with its creditors.
5.3 VENDOR'S OBLIGATIONS
On Completion the Vendor shall subject to the due performance by the
Purchaser of its obligations under clause 5.4:
(A) deliver to the Purchaser:
1. transfers of the Sale Shares duly executed by the registered holders thereof
in favour of the Purchaser or its nominees together with the relative share
certificates or an indemnity in respect of any missing certificates;
2. such waivers or consents as the Purchaser may require to enable the Purchaser
or its nominees to be registered as holders of the Sale Shares;
3. powers of attorney in Agreed Form;
4. a legal opinion from Xxxxxxx & Xxxxxxx as to the capacity of Group and Vendor
to enter into this Agreement in Agreed Form;
5. the signed copy of Deed of Release executed by the Vendor and Group of the
Purchaser's Group; and
6. the Subscription Agreement signed by the Vendor and Group.
(B) procure that the Directors (other than the Continuing Directors) and the
secretary or secretaries of the Company and the Subsidiaries retire from
all their offices and employments with the Company and the Subsidiaries;
(C) procure the resignation of the auditors of the Company and the Subsidiaries
in accordance with s.392 Companies Xxx 0000;
(D) deliver to the Purchaser as agent for the Company and the Subsidiaries:
(1) all the statutory and other books of the Company and the Subsidiaries
and its certificates of incorporation, any certificates of
incorporation on change of name and common seals; and
(2) certificates in respect of all issued shares in the capital of the
Subsidiaries and transfers of all shares in any Subsidiary not
registered in the name of the
9
Company or another Subsidiary in favour of such persons as the
Purchaser shall direct;
(E) procure board meetings of the Company and of the Subsidiaries to be held at
which there shall be:
(1) passed a resolution to approve, in the case of the Company, the
transfers of the Sale Shares and, in the case of the Subsidiaries, the
share transfers referred to in clause (D)(2) and (subject only to due
stamping) to register, in the register of members, each transferee as
the holder of the shares concerned;
(2) appointed as directors and/or secretary such persons as the Purchaser
may nominate such appointments to take effect immediately; and
(3) tendered and accepted the resignations and acknowledgements of the
directors and secretary referred to in clause (B) each such acceptance
to take effect at the close of the meeting;
(F) procure the discharge of all guarantees and like obligations given by the
Company or any of the Subsidiaries in respect of the obligations of any
member of the Vendor's Group.
5.4 PURCHASER'S OBLIGATIONS
On Completion the Purchaser shall:
(A) deliver to the Vendor a legal opinion from Xxxxxxx Xxxx LLP as to the
Purchaser's capacity to enter into the Subscription Agreement,
(B) deliver to the Vendor a signed copy of the Deed of Release executed by the
Purchaser.
(C) allot and issue to the Vendor the First Instalment Shares (to be credited
to the account of the Vendor's nominee), and shall deliver to the Vendor's
nominee a share certificate for the First Instalment Shares; and
(D) allot and issue to the Escrow Agent the Second Instalment Shares (to be
credited to the account of the Escrow Agent's nominee), and shall deliver
to the Escrow Agent's nominee a share certificate for the Second Instalment
Shares.
5.5 INSURANCES
The Vendor shall be entitled to cancel all insurances of the Company and
the Subsidiaries which also cover companies within the Vendor's Group, with
effect from Completion.
6 WARRANTIES
6.1 GENERAL
The Vendor and Group hereby jointly and severally warrant to the Purchaser
in the terms of the Warranties subject to the provisions of this Agreement. Any
sum payable by the Vendor or Group in respect of any breach of the Warranties
shall be treated as a reduction in the Consideration and may be deducted from
the Second Instalment Shares (on the basis of the price per share of the
Consideration Shares on their date of issue and the exchange rates prevailing on
that date).
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6.2 WARRANTIES BY VENDOR AND GROUP
Each of the Warranties given by the Vendor and Group is given on the basis
that it will remain true and accurate in all respects up to and including
Completion and the Vendor and Group undertake to disclose forthwith in writing
to the Purchaser any matter or thing which may arise or become known to the
Vendor or Group after the date of this Agreement and before Completion which is
inconsistent with any of the Warranties or which is material to be known to the
Purchaser. In the event of it becoming apparent on or before Completion that the
Vendor or Group is in breach of any of the Warranties or any other term of this
Agreement the Purchaser may at its option either:
(1) rescind this Agreement by notice in writing to the Vendor; or
(2) proceed to Completion but without prejudice to its right to claim for
breach of this Agreement or the Warranties.
6.3 PURCHASER'S REMEDIES
(A) The Purchaser acknowledges that it has not been induced to enter into this
Agreement by, and that it does not in connection with this Agreement or its
subject matter rely on, any representation, warranty, promise or assurance
by the Vendor or any other person, except for the Warranties. The Purchaser
agrees that, except as otherwise provided herein and subject to clause (B),
it shall have no right or remedy in respect of, and shall not in connection
with any claim arising in relation to this Agreement, or their respective
subject matters plead or assert the making or existence of, any
representation, warranty, promise or assurance save for those therein
contained in respect of which the Purchaser shall have no right to rescind
or terminate this Agreement and the only remedy of the Purchaser shall be
damages for breach of this Agreement.
(B) Nothing in this clause 6.3 shall exclude or affect any right or remedy
available to the Purchaser in respect of fraud.
(C) The Purchaser acknowledges that its legal advisers have explained to it the
effect of this clause 6.3.
6.4 WARRANTIES BY PURCHASER
The Purchaser warrants to the Vendor as follows:-
(A) the Purchaser has the requisite power and authority to enter into and
perform this Agreement and any other agreement referred to herein to which
it is or has agreed to become a party (the "PURCHASER DOCUMENTS");
(B) this Agreement constitutes and the Purchaser Documents will, when executed,
constitute binding obligations of the Purchaser in accordance with their
respective terms;
(C) the Purchaser has paid its debts as such debts become due and has not
admitted in writing its inability to pay its debts generally;
(D) the Purchaser has not made a general assignment for the benefit of its
creditors;
(E) no proceedings have been instituted by or against the Purchaser seeking to
adjudicate it as bankrupt or insolvent, or seeking liquidation, winding up,
dissolution, reorganization, arrangement, adjustment, protection, relief or
composition of its debts under any law
11
relating to bankruptcy, insolvency, liquidation, dissolution or
reorganization or relief of its debtors, or seeking the entry of an order
for relief or the appointment of a receiver, trustee or similar official
for it or any substantial part of its property;
(F) the Purchaser has sufficient working capital to carry on its business in
the ordinary and usual course for a period of 12 months from the date of
this Agreement;
(G) the Purchaser has obtained all necessary shareholder and board approvals in
respect of the entry into this Agreement and the Purchaser Documents; and
(H) the execution and delivery of, and the performance by the Purchaser of its
obligations under, this Agreement and the Purchaser Documents will not:
(1) be or result in a breach of any provision of the memorandum or
articles of association of the Purchaser;
(2) be or result in a breach of, or constitute a default under, any
instrument to which the Purchaser is a party or by which the Purchaser
is bound and which is material in the context of the transactions
contemplated by this Agreement;
(3) be or result in a breach of any order, judgment or decree of any court
or governmental agency to which the Purchaser is a party or by which
the Purchaser is bound and which is material in the context of the
transactions contemplated by this Agreement; or
(4) save as provided herein require the Purchaser to obtain any consent or
approval of, or give any notice to or make any registration with, any
governmental or other authority which has not been obtained or made at
the date hereof both on an unconditional basis and on a basis which
cannot be revoked (save pursuant to any legal or regulatory
entitlement to revoke the same other than by reason of any
misrepresentation or misstatement); and
(I) the Purchaser has immediately available on an unconditional basis (subject
only to Completion) the necessary resources to meet its obligations under
this Agreement and the Purchaser Documents.
Each of the foregoing warranties given by the Purchaser (the "PURCHASER'S
WARRANTIES") is given on the basis that it will remain true and accurate in all
respects up to and including Completion and the Purchaser undertakes to
forthwith disclose in writing to the Vendor any matter or thing which may arise
or become known to the Purchaser after the date of this Agreement and before
Completion which is inconsistent with any of the Purchaser's Warranties or which
is material to be known to the Vendor accepting the consideration stipulated by
this Agreement. In the event of it becoming apparent on or before Completion
that the Purchaser is in breach of any of the Purchaser's Warranties or any
other term of this Agreement the Vendor may at its option either:
(1) rescind this Agreement by notice in writing to the Purchaser; or
(2) proceed to Completion but without prejudice to its right to claim for
breach of this Agreement or the Purchaser's Warranties.
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6.5 UNDERTAKING BY PURCHASER
The Purchaser agrees and undertakes that (in the absence of fraud or except
as otherwise provided herein) it has no rights against and shall not make any
claim against any member of the Vendor's Group (other than the Vendor) or any
present or former employee, director, agent or officer of any member of the
Vendor's Group in connection with this Agreement or its subject matter.
7 POST COMPLETION OBLIGATIONS
7.1 BOOKS AND RECORDS
The Purchaser shall procure that:-
(A) the Company and the Subsidiaries shall preserve until the sixth anniversary
of Completion all books, records and documents of the Company and the
Subsidiaries which are at Completion in the possession under the control of
each of them or insofar as the same record matters occurring on or before
Completion; and
(B) until the sixth anniversary of Completion (or in the event of any claim
being made by the Purchaser under the Warranties until such later time as
the same is determined) the Vendor and its agents, accountants, solicitors
and other professional advisers shall be allowed the right to inspect and,
at the Purchaser's expense, take copies of the books, records and documents
referred to in clause (A) (but only in relation to matters recorded therein
which occurred on or before Completion) at all reasonable times upon the
Vendor giving reasonable notice of such requirement to the Company or the
relevant Subsidiary.
8 EXTERNAL CLAIMS
8.1 NOTIFICATION AND CONSULTATION
If the Purchaser or any other member of the Purchaser's Group becomes aware
of any actual or threatened claim, demand or proceeding against any member of
the Purchaser's Group (an "EXTERNAL CLAIM"), or of any fact or matter which may
give rise to an External Claim, in relation to which it appears that the
Purchaser or any other member of the Purchaser's Group is, or might be or
become, entitled to claim against the Vendor in respect of any of the
Warranties:-
(A) the Purchaser shall, or shall procure that such other member of the
Purchaser's Group shall, as soon as reasonably practicable after so
becoming aware and in any event within 7 Business Days notify the Vendor in
writing; and
(B) the Purchaser shall thereafter consult with the Vendor in respect of the
External Claim and permit, and procure that any relevant member of the
Purchaser's Group shall permit, the Vendor and its advisers reasonable
access to relevant employees, premises, chattels, documents and records
(including the right to take copies at the Vendor's expense of such
documents and records) for the purposes of investigating the matter and
enabling the Vendor to take any action permitted by this clause 8.
8.2 CONDUCT OF EXTERNAL CLAIMS BY VENDOR
Subject to the Vendor indemnifying the Purchaser or other relevant member
of the Purchaser's Group against any liabilities, losses or expenses which it
may reasonably suffer or incur thereby and which it would not otherwise suffer
or incur:
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(A) the Vendor shall be entitled by notice in writing to the Purchaser at any
time to require that the Vendor shall thereafter have the sole conduct and
control on behalf of the Purchaser or other member of the Purchaser's Group
of any External Claim and following such notice, without prejudice to the
generality of the foregoing, the Vendor shall in its absolute discretion be
entitled to avoid, dispute, resist, settle, compromise, defend or appeal
the External Claim and the Purchaser shall not do and shall procure that no
member of the Purchaser's Group shall do anything inconsistent therewith;
(B) the Purchaser shall and shall procure that each member of the Purchaser's
Group shall give to the Vendor all such information and assistance as the
Vendor may reasonably require for any purpose referred to in clause (A),
including without limitation instructing any such solicitors, Counsel or
other professional advisers as the Vendor may nominate to act on behalf of
the Purchaser or other member of the Purchaser's Group but in accordance
with the Vendor's instructions.
8.3 REPORTS BY VENDOR
The Vendor shall keep the Purchaser informed of all material developments
in relation to any External Claim in respect of which the Vendor has served a
notice pursuant to clause (A) by providing written quarterly reports containing
such information as the Purchaser shall reasonably require.
8.4 CONDUCT OF EXTERNAL CLAIMS BY THE PURCHASER
Where the Vendor has not by a notice pursuant to clause (A) assumed sole
conduct and control in relation to an External Claim the Purchaser shall and
shall procure that each relevant member of the Purchaser's Group shall:
(A) keep the Vendor informed of all material developments in relation to the
External Claim by providing written quarterly reports containing such
information as the Vendor shall reasonably require;
(B) not make any admission of liability, agreement, settlement or compromise
with any third party in relation to the External Claim without the prior
written consent of the Vendor; and
(C) take all actions that the Vendor may reasonably request to avoid, dispute,
resist, defend or appeal the External Claim.
9 CONFIDENTIALITY
9.1 CONFIDENTIALITY
Subject to clause 9.2 and to clause 10, each party:-
(A) shall treat as strictly confidential the provisions of this Agreement and
the process of their negotiation and all information about the other party
obtained or received by it as a result of negotiating, entering into or
performing its obligations under this Agreement ("CONFIDENTIAL
INFORMATION"); and
(B) shall not, except with the prior written consent of each other party (which
shall not be unreasonably withheld or delayed), publish or otherwise
disclose to any person any Confidential Information.
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9.2 PERMITTED DISCLOSURES
Clause 9.1 shall not apply if and to the extent that the party disclosing
Confidential Information can demonstrate that:
(A) such disclosure is required by law or by any securities exchange or
regulatory or governmental body having jurisdiction over it (including but
not limited to the London Stock Exchange, the Panel on Take-overs and
Mergers and the Serious Fraud Office) and whether or not the requirement
has the force of law; or
(B) such disclosure is to its professional advisers in relation to the
negotiation entry into or performance of this Agreement or any matter
arising out of the same;
(C) such disclosure is required to facilitate the satisfaction of the
Condition; or
(D) the Confidential Information concerned was lawfully in its possession (as
evidenced by written records) prior to its being obtained or received as
described in clause (A); or
(E) the Confidential Information concerned has come into the public domain
other than through its fault or the fault of any person to whom such
Confidential Information has been disclosed in accordance with clause
(B).
9.3 CONTINUANCE OF RESTRICTIONS
The restrictions contained in this clause 9 shall survive Completion and
shall continue without limit of time.
10 ANNOUNCEMENTS
10.1 RESTRICTIONS
Subject to clause 10.2 and whether or not any restriction contained in
clause 9 applies, no party to this Agreement shall make any public announcement
concerning the provisions or subject matter of this Agreement or containing any
information about the other party without the prior written approval of the
other (which shall not be unreasonably withheld or delayed).
10.2 PERMITTED ANNOUNCEMENTS
Clause 10.1 shall not apply if and to the extent that such announcement is
required by law or by any securities exchange or regulatory or governmental body
having jurisdiction over it (including but not limited to the London Stock
Exchange, The Panel on Take-overs and Mergers and the Serious Fraud Office) and
whether or not the requirement has the force of law and provided that any such
announcement shall be made only after consultation with the other party.
10.3 CONTINUANCE OF RESTRICTIONS
The restrictions contained in this clause 10 shall survive until Completion
has taken place.
11 PROVISIONS RELATING TO THIS AGREEMENT
11.1 SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and enure for the benefit of the
successors of the parties but shall not be assignable.
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11.2 WHOLE AGREEMENT AND VARIATIONS
(A) This Agreement, together with any documents referred to in it, constitutes
the whole agreement between the parties relating to its subject matter and
supersedes and extinguishes any prior drafts, agreements, and undertakings,
whether in writing or oral, relating to such subject matter.
(B) No variation of this Agreement shall be effective unless made in writing
and signed by each of the parties.
11.3 AGREEMENT SURVIVES COMPLETION
The Warranties and all other provisions of this Agreement, in so far as the
same shall not have been performed at Completion, shall remain in full force and
effect notwithstanding Completion.
11.4 RIGHTS ETC CUMULATIVE AND OTHER MATTERS
(A) The rights, powers, privileges and remedies provided in this Agreement are
cumulative and are not exclusive of any rights, powers, privileges or
remedies provided by law or otherwise.
(B) No failure to exercise nor any delay in exercising any right, power,
privilege or remedy under this Agreement shall in any way impair or affect
the exercise thereof or operate as a waiver thereof in whole or in part.
(C) No single or partial exercise of any right, power, privilege or remedy
under this Agreement shall prevent any further or other exercise thereof or
the exercise of any other right, power, privilege or remedy.
11.5 INVALIDITY
If any provision of this Agreement shall be held to be illegal, void,
invalid or unenforceable under the laws of any jurisdiction, the legality,
validity and enforceability of the remainder of this Agreement in that
jurisdiction shall not be affected, and the legality, validity and
enforceability of the whole of this Agreement in any other jurisdiction shall
not be affected.
11.6 COUNTERPARTS
This Agreement may be executed in any number of counterparts, which shall
together constitute one Agreement. Any party may enter into this Agreement by
signing any such counterpart.
11.7 COSTS
Save as otherwise expressly provided herein, each party shall bear its own
costs arising out of or in connection with the preparation, negotiation and
implementation of this Agreement.
11.8 NOTICES
(A) Any notice or other communication required to be given under this Agreement
or in connection with the matters contemplated by it shall, except where
otherwise specifically provided, be in writing in the English language and
shall be addressed as provided in this clause 11.8 and may be:
(1) personally delivered, in which case it shall be deemed to have been
given upon delivery at the relevant address; or
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(2) if within the United Kingdom, sent by first class pre-paid post, in
which case it shall be deemed to have been given two Business Days
after the date of posting; or
(3) if from or to any place outside the United Kingdom, sent by pre-paid
priority airmail, in which case it shall be deemed to have been given
seven Business Days after the date of posting; or
(4) sent by fax, in which case it shall be deemed to have been given when
despatched, subject to confirmation of uninterrupted transmission by a
transmission report provided that any notice despatched by fax after
17.00 hours (at the place where such fax is to be received) on any day
shall be deemed to have been received at 08.00 on the next Business
Day.
(B) The addresses and other details of the parties referred to in this clause 0
are, subject to clause 0:
Name: Redwave plc
For the attention of: Xxxxx Xxxxx
Address: 00 Xxxxxxx Xxx
Xxxxxxx
Xxxxxx
Xxxx Xxxxxxxx XX0 0XX
Fax number: x0000 (0) 0000 000 000
Name: Wave Systems Corp.
For the attention of: Xxxxxx Xxxxxxx
Address: 000 Xxxxxxxx Xxxxxx
Xxx
Xxxxxxxxxxxxx
XX00000 XXX
Fax number: x000 000 000 0000
(C) Any party to this Agreement may notify the other parties of any change to
its address or other details specified in clause 0, provided that such
notification shall only be effective on the date specified in such notice
or five Business Days after the notice is given, whichever is later.
12 LAW AND JURISDICTION
12.1 ENGLISH LAW
This Agreement shall be governed by, and construed in accordance with,
English law.
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12.2 JURISDICTION
In relation to any legal action or proceedings to enforce this Agreement or
arising out of or in connection with this Agreement ("PROCEEDINGS") each of the
parties irrevocably submits to the exclusive jurisdiction of the English courts
and waives any objection to Proceedings in such courts on the grounds of venue
or on the grounds that the Proceedings have been brought in an inappropriate
forum.
12.3 CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
No person who is not a party to this Agreement shall have any right under
the Contracts (Rights of Third Parties) Xxx 0000 to enforce any term of this
Agreement.
AS WITNESS the hands of the duly authorised representatives of the parties on
the date first before written.
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