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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
September 6, 2002
ELEVON, INC.
(Exact name of Registrant as specified in its Charter)
303 Second Street
(415) 495-8811
Item 2. Acquisition or Disposition of Assets On September 6, 2002, Elevon, Inc. (the "Company") sold all
of the outstanding shares of Elevon International Limited and its subsidiaries,
the Company's Elevon 5 intellectual property, and certain of the Company's North
American Elevon 5 net assets (the "Sale") to Novele Limited for $16.5
million in cash pursuant to a Share Purchase Agreement and a Deed of Assignment
of e-5. The Company received approximately $15.7 million at the closing with
the remaining $800,000 due on or before December 31, 2002 subject to certain
conditions under the terms of the Share Purchase Agreement. In connection with
the Sale, the Company entered into software distribution agreements (the
"Software Distribution Agreements") with Elevon Limited, a subsidiary
of Novele Limited, covering the Company's Active Financial Planning and Elevon 2
intellectual property. The Share Purchase Agreement, Deed of Assignment of e-5
and Software Distribution Agreements are attached hereto as Exhibits 2.1, 2.2,
2.3 and 2.4, respectively, and are incorporated into this item of this report as
if fully set forth herein. The full text of the press release announcing the
transactions described above is attached hereto as Exhibit 99.1 and is
incorporated into this item of this report as if fully set forth herein. Item 5. Other Events On September 6, 2002, in connection with the Sale described in
Item 2 of this Report, the Company entered into software distribution agreements
(the "Software Distribution Agreements") with Elevon Limited, a
subsidiary of Novele Limited, covering the Company's Active Financial Planning
and Elevon 2 intellectual property. The Software Distribution Agreements are
attached hereto as Exhibits 2.3 and 2.4, respectively, and are incorporated into
this item of this report as if fully set forth herein. Item 7. Financial Statements and Exhibits (a) Financial Statements of Business to be Acquired N/A (b) Pro Forma Financial Information The unaudited pro forma consolidated financial information gives effect to
the Sale described in Item 2 of this Report. The pro forma information is based
on the historical consolidated statement of operations of Elevon, Inc. for the
six month period ending June 30, 2002 and the twelve month period ending
December 31, 2001 as if the Sale had occurred on June 30, 2002, or January 1,
2001, respectively, giving effect to the adjustments as discussed in the
accompanying notes. Additionally the pro forma consolidated balance sheet of
Elevon, Inc. is based on the historical consolidated balance sheet at June 30,
2002 as if the Sale had occurred on June 30, 2002, giving effect to the
adjustments as discussed in the accompanying notes. The unaudited pro forma consolidated financial information is not necessarily
indicative of the actual operating results or financial position of Elevon, Inc.
for the period presented, nor is it necessarily indicative of future operating
results or financial position. The pro forma adjustments are based upon current
available information and certain assumptions set forth below in the notes to
the unaudited pro forma consolidated financial statements.
ELEVON, INC.
ELEVON, INC.
ELEVON, INC.
(c) Exhibits. Number 2.1 Share Purchase Agreement, dated as of September 6, 2002, by and
between Elevon Inc., a Delaware corporation, and Novele Limited, a United
Kingdom company. 2.2 Deed of Assignment of e-5 2.3 Software Distribution Agreement for AFP, dated as of September 6,
2002, by and between Elevon Inc., a Delaware corporation, and Elevon Limited, a
subsidiary of Novele Limited. 2.4 Software Distribution Agreement for e-2, dated as of September 6,
2002, by and between Elevon Inc., a Delaware corporation, and Elevon Limited, a
subsidiary of Novele Limited. 99.1 Press Release dated September 6, 2002 announcing the Sale and the
Software Distribution Agreements.
ELEVON SYSTEMS, INC.
FORM 8K
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
San Francisco, California 94107
(Address of Principal Executive Offices including Zip Code)
(Registrant's Telephone Number, Including Area Code)
PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED)
AS OF JUNE 30, 2002
(in thousands)
HISTORICAL
Elevon UK Pro Forma
Elevon, Inc. Operations Adjustments Notes Pro Forma
------------ ------------ ----------- ---- ---------
(Note 1)
ASSETS
Current assets:
Cash and cash equivalents........................... $5,060 $15,700 (2) $20,760
Accounts receivable, net of allowances.............. 11,332 (5,374) 5,958
Prepaid expenses.................................... 1,483 (814) 669
Other receivables................................... 56 (54) 800 (3) 802
------------ ------------ ----------- ---------
Total current assets............................ 17,931 (6,242) 16,500 28,189
Property and equipment, net 1,625 (459) 1,166
Capitalized software, net of accumulated amortization 3,403 (1,333) (4) 2,070
Long-term accounts receivable.......................... 112 112
Other assets........................................... 366 366
------------ ------------ ----------- ---------
Total assets........................................... $23,437 ($6,701) $15,167 $31,903
============ ============ =========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable.................................... $2,312 ($743) $1,569
Accrued liabilities................................. 7,139 (2,945) 750 (5) 4,944
Income taxes payable................................ 200 (7) 200
Deferred revenue.................................... 13,483 (6,098) 7,385
------------ ------------ ----------- ---------
Total current liabilities....................... 22,934 (9,786) 950 14,098
Deferred revenue....................................... 1,162 1,162
Other long-term obligations............................ 2,428 (935) 1,493
------------ ------------ ----------- ---------
Total liabilities............................... 26,524 (10,721) 950 16,753
------------ ------------ ----------- ---------
Stockholders' equity (deficit):
Common Stock........................................ 15 15
Additional paid-in capital.......................... 76,773 76,773
Accumulated other comprehensive income.............. 371 (230) 141
Accumulated deficit................................. (80,246) 4,250 14,417 (6) (61,579)
(200) (7) (200)
------------ ------------ ----------- ---------
Total stockholders' equity/(deficit)............ (3,087) 4,020 14,217 15,150
------------ ------------ ----------- ---------
Total liabilities and stockholders' equity/(deficit)... $23,437 ($6,701) $15,167 $31,903
============ ============ =========== =========
Notes:
(1) Includes assets and liabilities of Elevon International Limited ("EIL") and Elevon 5 North America operations as of June 30, 2002
sold to Novele Limited.
(2) To reflect cash proceeds received from Novele Limited.
(3) To reflect proceeds due from Novele Limited on or before December 31, 2002, subject to certain conditions under the terms of the Share Purchase Agreement.
(4) To reflect sale of Elevon 5 intellectual property to Novele Limited.
(5) To reflect estimated transaction costs, including legal and accounting fees.
(6) To reflect the estimated gain on sale, including elimination of net deficit in EIL and Elevon 5 North America operations as of June 30, 2002, calculated as follows:
Gross proceeds received or receivable $ 16,500
Elevon 5 capitalized software (net) (1,333)
Estimated liabilities incurred as a result of the sale (750)
------------
Subtotal 14,417
Elimination of net deficit in EIL and Elevon 5 North America operations as of June 30, 2002 4,020
------------
Estimated gain on sale before income taxes $ 18,437
============
(7) To reflect estimated taxes payable associated with gain on sale.
PRO FORMA COMBINED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDING JUNE 30, 2002
(in thousands, except per share amounts)
HISTORICAL
Elevon UK Pro Forma
Elevon, Inc. Operations Adjustments Notes Pro Forma
---------- ---------- ---------- ----- ---------
REVENUES: (Note 1)
License............................ $2,027 ($1,509) $516 (2) $1,034
Maintenance........................ 11,253 (4,139) 7,114
Consulting......................... 11,937 (4,255) 7,682
---------- ---------- ---------- ---------
Total revenues.................. 25,217 (9,903) 516 15,830
OPERATING EXPENSES:
Costs of revenues:
Cost of licenses,
maintenance and consulting..... 10,492 (4,292) 6,200
Amortization of
capitalized software........... 1,933 (498) (3) 1,435
Sales and marketing................ 6,054 (2,195) 3,859
Product development................ 3,141 (326) 2,815
General and administrative......... 3,600 (1,048) 2,552
Restructuring charge............... 892 (180) 712
Impairment of capitalized
software......................... 365 365
Special credit..................... (1,732) (1,732)
---------- ---------- ---------- ---------
Total operating expenses........ 24,745 (8,041) (498) 16,206
---------- ---------- ---------- ---------
Operating income..................... 472 (1,862) 1,014 (376)
Interest income, net............ 43 43
---------- ---------- ---------- ---------
Income before income taxes........... 515 (1,862) 1,014 (333)
Provision for income taxes...... 50 50
---------- ---------- ---------- ---------
NET INCOME........................... $465 ($1,862) $1,014 ($383)
========== ========== ========== =========
BASIC NET INCOME PER SHARE........... $0.03 ($0.03)
========== =========
Shares used to compute basic
net income per share............ 15,186 15,186
========== =========
DILUTED NET INCOME PER SHARE......... $0.03 ($0.03)
========== =========
Shares used to compute diluted
net income per share............ 15,602 15,186
========== =========
Notes:
(1) Reflects elimination of results of operations relative to EIL and Elevon 5 North America operations for the six months ending June 30, 2002.
(2) To reflect estimated royalty income that would have been earned under the terms of the Master Distribution Agreements.
(3) To reflect elimination of amortization resulting from disposal of Elevon 5 intellectual property.
PRO FORMA COMBINED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE YEAR ENDING DECEMBER 31, 2001
(in thousands, except per share amounts)
HISTORICAL
Elevon UK Pro Forma
Elevon, Inc. Operations Adjustments Notes Pro Forma
---------- ---------- ---------- ----- ---------
REVENUES: (Note 1)
License............................ $8,665 ($2,532) $1,641 (2) $7,774
Maintenance........................ 22,110 (5,505) 16,605
Consulting......................... 18,290 (4,060) 14,230
---------- ---------- ---------- ---------
Total revenues.................. 49,065 (12,097) 1,641 38,609
OPERATING EXPENSES:
Costs of revenues:
Cost of licenses,
maintenance and consulting..... 18,206 (5,700) 12,506
Amortization of
capitalized software........... 3,398 (167) (3) 3,231
Sales and marketing................ 12,459 (3,119) 9,340
Product development................ 8,324 (87) 8,237
General and administrative......... 5,869 (1,243) 4,626
---------- ---------- ---------- ---------
Total operating expenses........ 48,256 (10,149) (167) 37,940
---------- ---------- ---------- ---------
Operating income..................... 809 (1,948) 1,808 669
Interest income, net............ 778 778
---------- ---------- ---------- ---------
Income before income taxes........... 1,587 (1,948) 1,808 1,447
Provision for income taxes...... 100 100
---------- ---------- ---------- ---------
NET INCOME........................... $1,487 ($1,948) $1,808 $1,347
========== ========== ========== =========
BASIC NET INCOME PER SHARE........... $0.10 $0.09
========== =========
Shares used to compute basic
net income per share............ 14,917 14,917
========== =========
DILUTED NET INCOME PER SHARE......... $0.10 $0.09
========== =========
Shares used to compute diluted
net income per share............ 14,958 14,958
========== =========
Notes:
(1) Reflects elimination of results of operations of EIL for the year ending December 31, 2001.
(2) To reflect estimated royalty income that would have been earned under the terms of the Master Distribution Agreements.
(3) To reflect elimination of amortization resulting from disposal of Elevon 5 intellectual property.
ELEVON, INC.
Date: September 20, 2002
(Registrant)
By:
/s/ Stanley V. Vogler
Stanley V. Vogler
Chief Financial Officer
(Principal Financial and Accounting Officer)
EX-99.1
FOR IMMEDIATE RELEASE
Contact:
Stanley V.Vogler
Chief Financial Officer
(415) 243-2737
stanley.vogler@elevon.cc
ELEVON INC. ANNOUNCES SALE OF UNITED KINGDOM OPERATIONS
SAN FRANCISCO, Calif.- September 6, 2002-Elevon, Inc. ("Elevon") (OTCBB:ELVN), a provider of advanced business solutions in the areas of collaborative commerce and knowledge management, today announced the sale of its United Kingdom operations, headquartered in Aylesbury, United Kingdom, and its Elevon 5 intellectual property to Novele Limited ("Novele"), located in London, England.
Under the terms of a Sale Purchase Agreement ("Agreement") dated September 6, 2002, Elevon sold the stock of its wholly owned subsidiary, Elevon International Limited, to Novele for consideration of $16.5 million. Approximately $15.7 million cash was received at closing. The remaining balance of $800,000 is due on or before December 31, 2002 subject to certain conditions under the terms of the Agreement.
In addition to acquiring the Elevon operations headquartered in the United Kingdom, Novele acquired the Elevon 5 intellectual property, which Elevon had acquired from the administrative receiver for the QSP Group PLC in November 2001. Novele will also become an exclusive distributor of Elevon software, including Elevon 2 and Active Financial Planning, in the United Kingdom and certain other territories, as defined in a Master Distribution Agreement.
"The current United Kingdom management team will continue to lead the new organization," said Frank Richardson, chief executive officer of Elevon. "We are pleased to have the on-going relationship with them as a distributor of our Elevon products."
About Elevon
Elevon, Inc. (OTCBB:WALK) headquartered in San Francisco, is a leading provider of advanced business solutions in the areas of collaborative commerce and knowledge management. Over the last three years, Elevon, Inc. (formerly Walker Interactive Systems Inc.), has been providing e-business solutions to Global 2000 organizations. After working extensively with these leading organizations, Elevon has identified the need to deliver collaborative solutions that extend beyond the four walls of the enterprise. Elevon calls this Collaborative Synergies. Elevon is elevating collaborative commerce to the next level and elevating a company's performance. More information about Elevon is available at elevon.cc or 1-877- COLLABORATE.
Copyright © 2002 Elevon, Inc. All rights reserved. Elevon is a trademark of Elevon, Inc.
This news release contains forward-looking statements including those related to future profitability and cashflows, quarterly operating costs and revenue growth. Actual results may differ materially from any forward-looking statements contained in this news release due to a number of factors that could materially and adversely affect the Company's business, financial condition, operating results and stock price. These factors are discussed in the Company's most recent Annual Report to Stockholders, which includes the most recent Annual Report on Form 10-K, and in the Company's quarterly 10-Q reports. The information contained in such discussions should be considered in evaluating the Company's prospects and future financial performance.
EX-2.2
ELEVON, INC.
and
NOVELE LIMITED
____________________________
DEED OF ASSIGNMENT OF e-5
____________________________
Charles Russell
8-10 New Fetter Lane
London EC4A 1RS
Tel: 020 7203 5000
Ref: YPG/JJP/059132/02
THIS DEED OF ASSIGNMENT is made on September 6, 2002
BETWEEN:
RECITALS:
(A) Pursuant to the Assignment Agreement, Elevon Limited assigned to Elevon with effect from 1 November 2001 certain rights in the Programs and Program Documentation.
(B) Elevon wishes to assign to Novele the Intellectual Property Rights upon the terms and subject to the conditions of this Deed.
IT IS AGREED as follows:
In this Deed the following words shall have the following meanings unless the context requires otherwise:
"Assignment Agreement" |
means the intellectual property rights assignment agreement entered into between Elevon (then, Walker Interactive Systems, Inc.) and Elevon Limited (then, Walker Financial Solutions Limited) with effect from 1 November 2001, a copy of which is attached hereto as annex A; |
"Deed" |
means this deed, including the schedules and annexes attached hereto; |
"Intellectual Property Rights" |
means the rights in the Programs and Program Documentation acquired by Elevon from Elevon Limited under the Assignment Agreement together with any amendments, modifications and developments by or for Elevon of the Programs and Program Documentation, all technical information and other information of commercial value owned by Elevon and relating to the Programs and the Program Documentation, and the Trade Mark; |
"Programs" |
means the software programs specified in schedule 1; |
"Program Documentation" |
means all instruction manuals, user guides and other information in printed and/or machine readable form in relation to the Programs in the possession or control of Elevon; |
"Sale and Purchase Agreement" |
means the share sale and purchase agreement for the entire share capital of Elevon International Limited entered into between Elevon and Novele and executed on or about today's date; and |
"Trade Mark " |
means the unregistered trade mark "e-5" and all goodwill in or associated with it. |
The terms and conditions contained in this Deed, as well as the provisions of the Sale and Purchase Agreement and any documents referred to therein (which are incorporated in this Deed by reference) constitute the entire agreement between the parties and shall supersede all previous communications, whether oral or written between the parties with respect to the subject matter of this Deed.
This Deed shall be governed by and construed in accordance with the Laws of England and the parties hereto submit to the exclusive jurisdiction of the English Courts.
IN WITNESS whereof this document has been executed as a Deed and delivered the day and year first above written.
SIGNED and DELIVERED as a DEED )
by ELEVON, INC. )
acting by: )
Director: /s/ Frank M. Richardson
Director/Secretary: /s/ Stanley V. Vogler
SIGNED and DELIVERED as a DEED )
by NOVELE LIMITED )
acting by: )
Director: /s/ Roger Llewellyn
Director/Secretary: /s/ William Strachan
EX-2.3
_________________________________________
SOFTWARE DISTRIBUTION AGREEMENT
_________________________________________
THIS AGREEMENT is made on September 6, 2002
"Agreement" means this Agreement, including its Schedules;
"AFP" means Active Financial Planning, Elevon's software product line which includes the analytical software product known as "Horizon"
"Business Day" means 8.00 am to 5.00 pm, on any day on which banks in London and New York are generally open for business;
"Confidential Information" means and includes all information of a confidential nature (defined below in this paragraph) disclosed by one Party to the other during the term of this Agreement which relates to the subject matter of this Agreement, or is learned by a Party by reason of the relationship established by this Agreement or its access to the premises or information of the other Party. Such information may be communicated orally, visually, in writing or in any other recorded or tangible form. Information shall be considered confidential if; (i) the disclosing Party has marked it as such; (ii) the disclosing Party, has advised the other Party, orally or in writing, of its confidential nature; or (iii) due to its character or nature or the context of its disclosure, a reasonable person in like position and under like circumstances would understand it to be confidential;
"Customer List" means the list of Licensees of the Master Distributor in the Non- Exclusive Territory set out in Schedule 6 and amended from time to time in accordance with the provisions of this Agreement;
"End- User Agreement" means a software licence and support agreement entered into between the Master Distributor or its Sub-Distributor and a Licensee which includes as a minimum the terms and conditions set out in Schedule 1 as amended in writing by agreement with Elevon from time to time;
"Exclusive Territory" means the territory set out in paragraph 1 of Schedule 3 as amended from time to time in accordance with the provisions of this Agreement;
"Force Majeure" means the following: (i) Acts of God; (ii) outbreak of hostilities, riot, civil disturbance, acts of terrorism; (iii) the act of any government or authority (including refusal or revocation of any licence or consent); (iv) fire, explosion, flood, fog or bad weather; (v) power failure, failure of telecommunication lines, failure or breakdown of plant, machinery or vehicles; (vi) default of supplies or sub-contractors; (vii) theft, malicious damage, strike, lock-out or industrial action of any kind; and (viii) any cause or circumstance whatsoever beyond the reasonable control of a Party which, by practice of standard industry practice and reasonable care, would not have been avoided;
"Intellectual Property Rights" means rights in all inventions (whether patentable or not), patents, utility models, designs (both registered and unregistered and including rights in semiconductor topographies), copyright, database right, trade and service marks (both registered and unregistered) together with all applications for, rights to the grant of and extensions and re-issues of the same, and all other intellectual and industrial property rights including but not limited to all similar and analogous rights throughout the world, in each case for the full term of the relevant right;
"Licence Royalty" means 40 per cent of Elevon's standard licence fee for the Software as set out in the Price List;
"Licensee" means a person who is a party to an End-User Agreement with the Master Distributor or a Sub-Distributor in respect of the Software;
"Non-Exclusive Territory" means the territory set out in paragraph 2 of Schedule 3 as amended from time to time in accordance with the provisions of this Agreement;
"Parties" means Elevon and the Master Distributor collectively; and "Party" means either one of them;
"Price List" means the list in Schedule 4 detailing Elevon's license fees, support charges and training rates for the Software as amended from time to time by Elevon;
"Product Description" means the product description of the Software as modified, enhanced or adapted by Elevon from time to time describing the facilities and functions thereof and supplied to the Master Distributor by Elevon from time to time but excluding any sales and marketing material relating to the Software;
"Releases" means a release of a program comprised in the Software which program has been adapted and/or enhanced for the purpose of correcting errors or malfunctions and/or enabling a part of the system to interoperate with one or more items of equipment and/or software;
"Royalties" means the Licence Royalty and/or the Support Royalty;
"Royalty Targets" means the royalty targets set out in Schedule 5 or such other targets as may be agreed between the Parties in writing from time to time;
"Software" means the software product line of Elevon known as "AFP" including any new Releases and Versions thereto provided by Elevon and made available to the Master Distributor from time to time pursuant to this Agreement;
"Software Documentation" means the operating manuals and other literature provided by Elevon to the Master Distributor from time to time for use by or in conjunction with the Software;
"Software Materials" means the Software, the Product Description and the Software Documentation;
"Sub-Distributor" means a sub- distributor of the Software sub-contracted by the Master Distributor in accordance with the provisions of this Agreement to exercise any of the rights or perform any of the duties of the Master Distributor under this Agreement;
"Support Royalty" means 12.5 per cent of the monies received by the Master Distributor or its Sub-Distributor from Licensees in respect of the maintenance and support services provided by the Master Distributor or its Sub-Distributors to the Licensees;
"Trade Mark" means the trade marks of Elevon details of which are set out in Schedule 7;
"Version" means a version of a program comprised in the Software which is not a Release and which contains improved or additional facilities and functions when compared with the previous version of the same which Elevon makes generally available at a charge to its other licensees provided that Version 2.0 shall be deemed a Release for the purposes of this Agreement; and
"Year" means any period of 12 months commencing on the date hereof or any anniversary of the date hereof.
Subject to the provisions for earlier termination contained in Clause 19, this Agreement shall commence on the date hereof for an initial period of 3 years ("the Initial Period") and shall continue thereafter for successive periods of one year unless and until terminated by either Party giving to the other not less than 6 months' written notice expiring at the end of the Initial Period or at the end of any successive periods of one year.
The right set out in this Clause 12.2 shall be Elevon's sole remedy in respect of any failure of the Master Distributor to meet the Royalty Targets. In particular, Clause 19.1 shall not apply to such failure.
All payments shall be made in US dollars. If necessary, the Parties shall agree a rate of exchange, failing which they shall use the rate published in the London Financial Times at the time of payment.
Subject to completion of a suitable non-disclosure agreement the Master Distributor shall give the accountant full access to its premises, computers, employees and relevant records for such purpose and the accountant shall be permitted to take copies and extracts of such records. The Master Distributor shall procure that its employees shall provide such assistance, information and explanations as the accountant shall reasonably require. The audit shall be conducted in such a manner as to minimise any interference with the Master Distributor's normal business activities and will not include access to the Master Distributor's cost or profit information.
Each audit shall cover the period since the last most recent audit or, if none, the date of this Agreement down to the Business Day immediately preceding the commencement of the audit ("Audit Period").
Elevon shall use its reasonable endeavours to procure that the accountant shall keep confidential the information which comes to its knowledge as a consequence of the audit (and to enter into any confidentiality undertaking reasonably requested by the Master Distributor in respect thereof prior to any disclosure) except that the accountant shall be entitled to reveal to Elevon any information necessary to provide Elevon with confirmation of the whether the Master Distributor is complying with the provisions of this Agreement Royalty remittances or any deviations therefrom.
Upon written request, Elevon agrees to make available to the Master Distributor, in the event Elevon makes any claim with respect to an audit, a copy of the records and reports pertaining to the audit.
Elevon agrees not to cause such audits to be carried out more frequently than twice a year, except where Elevon has reasonable cause to believe that correct payments are not being tendered by the Master Distributor in which case Elevon may cause any number of audits to be carried out until such time as Elevon is reasonably satisfied that the position has been corrected.
Each such audit shall be carried out at Elevon's expense unless it reveals a deficiency of 10 per cent or more of the Royalties remitted for the relevant Audit Period, in which event the Master Distributor shall pay the costs thereof. Payment of such costs and any Royalty deficiency shall be made by the Master Distributor within 7 days after the Master Distributor shall have received written notice thereof from Elevon together with a copy of the accountant's report and, if applicable, fee note showing the amount(s) due. Any such deficiency shall carry interest in accordance with Clause 13.9.3 from the date it was originally due.
The Master Distributor shall use its reasonable endeavours to ensure that its Sub-Distributors shall comply with this Clause 13.8 to the same extent that the Master Distributor is obligated to comply.
Clauses 13.9.1 and 13.9.2 shall not apply where payments are in dispute and delayed as a result thereof provided that the Master Distributor promptly provides Elevon with documentary evidence of the dispute and its prompt attempts to resolve the dispute.
and the Master Distributor shall use all reasonable endeavours to prevent the unauthorised publication or disclosure of any such information, materials or documents.
Any failure or delay on the part of either Party to exercise any power or right under this Agreement shall not operate as a waiver of it, nor shall any single or partial exercise of any such right or power preclude any other or further exercise of the right or power. Any of the rights and remedies of either Party under this Agreement may at any time be enforced separately or concurrently with any other rights and remedies, whether under this Agreement or arising by operation of law with the effect that the rights and remedies are cumulative and not exclusive of each other.
The foregoing states the entire liability of Elevon to the Master Distributor in respect of the infringement of the Intellectual Property Rights of any unaffiliated third party.
Elevon's aggregate liability under this Clause 22.2 shall be limited to a sum equal to the total Royalties received by Elevon from the Master Distributor in the then current Year pursuant to this Agreement.
The Master Distributor's aggregate liability under this Clause 23.3 shall be limited to a sum equal to the total Royalties received by Elevon from the Master Distributor in the then current Year.
The Master Distributor acknowledges that the Software is of such complexity that it may have certain defects when delivered, and the Master Distributor agrees that in respect of such defects Elevon's sole liability and save as provided in Clause 22 the Master Distributor's sole remedy in respect of any breach of the warranty shall be for Elevon to provide corrections of documented program errors in accordance with Clause 8.2. If Elevon fails (other than through the act or default of the Master Distributor) within a reasonable time to correct non-conforming Software as aforesaid its liability therefor shall be limited to a sum equal to the total Royalties received by Elevon from the Master Distributor in any one Year pursuant to this Agreement.
Address: 303 2nd Street, 3 North, San Francisco 94107, California USA
For attention of: Frank Richardson
E-mail: frank.richardson@elevon.cc
Address: The Gate House, Gatehouse Way, Aylesbury, Buckinghamshire, HP19 8HG
For attention of: Roger Llewellyn
E-mail: roger.llewellyn@elevon.cc
Any Party may change any details of its address, facsimile number or electronic mail address by notice in the manner described above.
If any term or provision of this Agreement or its application to any Party or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Agreement or the application of the term or provision to any other Party or circumstances, other than those as to which it is already invalid or unenforceable, shall not be affected, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. The Parties shall negotiate in good faith to replace any invalid or unenforceable provisions by substitute provisions.
No amendment to this Agreement whether oral or written shall be binding on either Party unless in writing and signed on behalf of the Parties.
The Master Distributor shall not be entitled to assign or otherwise transfer or dispose of this Agreement or any of its rights or obligations under it in whole or in part without the prior written consent of Elevon such consent not to be unreasonably withheld or delayed.
Each Party shall be responsible for all its own costs incurred in the performance of its obligations hereunder.
This Agreement may be entered into in any number of counterparts and by the Parties to it on separate counterparts, each of which when so executed and delivered shall be an original.
A person who is not a Party to this Agreement has no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement but this does not affect any right or remedy of a third party which exists or is available apart from that Act.
The Master Distributor acknowledges and agrees that the Software Materials, and all of the Confidential Information, are subject to export controls under the laws and regulations of the United States, including the Export Administration Regulations, 15 C.F.R. Parts 730-774. In the exercise of its rights and the performance of its obligations under this Agreement, the Master Distributor shall comply strictly with all such United States export control laws and regulations applicable to the Software Materials, and the Confidential Information, and shall not export, re-export, transfer, divert or disclose any such Software Materials or Confidential Information, or any direct product thereof, to any destination restricted or prohibited under U.S. export controls, or to any national or resident thereof, except in accordance with all U.S. export controls. The Master Distributor's obligations under this Clause shall survive the termination of this Agreement for any reason whatsoever.
Signature /s/ Frank M Richardson
EX-2.4
_________________________________________
SOFTWARE DISTRIBUTION AGREEMENT
_________________________________________
INDEX
1 DEFINITIONS AND INTERPRETATION *
2 APPOINTMENT *
3 DURATION *
4 GRANT OF LICENCE, DISTRIBUTION AND SUB-LICENSING *
5 SUPPORT SERVICES *
9 TRAINING *
10 MASTER DISTRIBUTOR'S OBLIGATIONS *
11 ELEVON'S OBLIGATIONS *
12 ROYALTY TARGETS *
13 ROYALTIES AND PAYMENTS *
14 INTELLECTUAL PROPERTY RIGHTS *
15 CONFIDENTIALITY *
16 EMPLOYEES AND CONTRACTORS *
17 RESERVATION OF RIGHTS *
18 LEGAL RELATIONSHIP *
19 TERMINATION *
20 CONSEQUENCES OF TERMINATION *
21 WAIVER OF REMEDIES *
22 INDEMNITIES *
23 WARRANTIES AND LIABILITY *
24 FORCE MAJEURE *
25 NOTICES *
26 GENERAL *
27 CHANGE OF CONTROL AND TRANSFER OF BUSINESS *
THIS AGREEMENT is made on September 6, 2002
"Agreement" means this Agreement, including its Schedules;
"Business Day" means 8.00 am to 5.00 pm, on any day on which banks in London and New York are generally open for business;
"Cedar" means Cedar Plc and any of its subsidiary or holding companies and all subsidiaries of its holding companies;
"Confidential Information" means and includes all information of a confidential nature (defined below in this paragraph) disclosed by one Party to the other during the term of this Agreement which relates to the subject matter of this Agreement, or is learned by a Party by reason of the relationship established by this Agreement or its access to the premises or information of the other Party. Such information may be communicated orally, visually, in writing or in any other recorded or tangible form. Information shall be considered confidential if; (i) the disclosing Party has marked it as such; (ii) the disclosing Party, has advised the other Party, orally or in writing, of its confidential nature; or (iii) due to its character or nature or the context of its disclosure, a reasonable person in like position and under like circumstances would understand it to be confidential;
"Controlling Interest" means the right to direct the affairs of a company whether by ownership of shares, by the board of directors, by agreement or otherwise; and (without limitation) a change of control of a company shall occur if a person acquires 50 per cent or more of the voting rights exercisable at general meetings of that company;
"Custodian" means an escrow agent agreed between the Parties, or if they fail to agree an escrow agent, shall mean the National Computing Centre;
"Customer List" means the list of Licensees of the Master Distributor in the Non-Exclusive Territory set out in Schedule 6 and amended from time to time in accordance with the provisions of this Agreement;
"Distributor Modifications" means all modifications or enhancements to the Software made by or on behalf of the Master Distributor pursuant to Clause 8.5 for the purpose of fulfilling the requirements of a Licensee;
"End-User Agreement" means that part of each software licence and support agreement entered into between the Master Distributor or its Sub-Distributor and a Licensee after the date of this Agreement which includes as a minimum the terms and conditions set out in Schedule 1 as amended in writing by agreement with Elevon from time to time or such terms having equivalent effect as those set out in Schedule 1. For the avoidance of doubt, other terms outside the scope of but consistent with these identified in Schedule 1 may be included in the software licence and support agreement entered into between the Master Distributor or its Sub-Distributor and a Licensee but such terms shall not form part of the End-User Agreement for the purposes of this Agreement;
"Exclusive Territory" means the territory set out in paragraph 1 of Schedule 3 as amended from time to time in accordance with the provisions of this Agreement;
"Force Majeure" means the following: (i) Acts of God; (ii) outbreak of hostilities, riot, civil disturbance, acts of terrorism; (iii) the act of any government or authority (including refusal or revocation of any licence or consent); (iv) fire, explosion, flood, fog or bad weather; (v) power failure, failure of telecommunication lines, failure or breakdown of plant, machinery or vehicles; (vi) default of supplies or sub-contractors; (vii) theft, malicious damage, strike, lock-out or industrial action of any kind; and (viii) any cause or circumstance whatsoever beyond the reasonable control of a Party;
"Initial Period" means a period of 4 years commencing on the date of this Agreement;
"Intellectual Property Rights" means rights in all inventions (whether patentable or not), patents, utility models, designs (both registered and unregistered and including rights in semiconductor topographies), copyright, database right, trade and service marks (both registered and unregistered) together with all applications for, rights to the grant of and extensions and re-issues of the same, and all other intellectual and industrial property rights including but not limited to all similar and analogous rights throughout the world, in each case for the full term of the relevant right;
"Licence Royalty" means 40 per cent of the threshold amounts set out in Schedule 4 as amended from time to time by Elevon and received by the Master Distributor or its Sub- Distributors as a licence fee from each Licensee or 40 per cent of the licence fee received by the Master Distributor or its Sub-Distributors from each Licensee, whichever, Licensee by Licensee, is the greater;
"Licensee" means a person who is a party to an End-User Agreement with the Master Distributor or a Sub-Distributor in respect of the Software;
"Non-Exclusive Territory" means the territory set out in paragraph 2 of Schedule 3 as amended from time to time in accordance with the provisions of this Agreement;
"Parties" means Elevon and the Master Distributor collectively; and "Party" means either one of them;
"Product Description" means the product description of the Software as modified, enhanced or adapted by Elevon from time to time describing the facilities and functions thereof and supplied to the Master Distributor by Elevon from time to time but excluding any sales and marketing material relating to the Software;
"Royalties" means the Licence Royalty and/or the Support Royalty;
"Royalty Targets" means the royalty targets set out in Schedule 5 or such other targets as may be agreed between the Parties in writing from time to time;
"Releases" means a release of a program comprised in the Software which program has been adapted and/or enhanced for the purpose of correcting errors or malfunctions and/or enabling a part of the system to interoperate with one or more items of equipment and/or software;
"Software" means the software product line of Elevon known as "e-2" including the products set out in Schedule 4 and including any new Releases and Versions thereto provided by Elevon and made available to the Master Distributor from time to time pursuant to this Agreement but excluding the Distributor Modifications;
"Software Documentation" means the operating manuals and other literature provided by Elevon to the Master Distributor from time to time for use in conjunction with the Software;
"Software Materials" means the Software, the Product Description and the Software Documentation;
"Source Materials" means all logic, logic diagrams, flowcharts, orthographic representations, algorithms, routines, sub-routines, utilities, modules, file structures, coding sheets, coding, source codes listings, functional specifications, program specifications and all other materials and documents necessary to maintain, amend and enhance the Software without reference to any other person or documentation whether in eye-readable or machine-readable form;
"Sub-Distributor" means a sub- distributor of the Software sub-contracted by the Master Distributor in accordance with the provisions of this Agreement to exercise any of the rights or perform any of the duties of the Master Distributor under this Agreement;
"Support Royalty" means 12.5 per cent of monies received by the Master Distributor or its Sub- Distributors from each Licensee in respect of maintenance and support services provided by the Master Distributor or its Sub-Distributors to the Licensee (but not in respect of the creation or support of Distributor Modifications) or 1.9 per cent of the threshold amounts set out in Schedule 4 as amended from time to time by Elevon and received by the Master Distributor or its Sub-Distributor from each Licensee for the support and maintenance of the Software, whichever, Licensee by Licensee is the greater;
"Support Services" means the support services provided to the Master Distributor and to its Sub-Distributors and Licensees in accordance with Clause 5;
"Trade Mark" means the trade marks of Elevon details of which are set out in Schedule 8;
"Version" means a version of a program comprised in the Software which is not a Release and which contains improved or additional facilities and functions when compared with the previous version of the same which Elevon makes generally available at a charge to its other licensees of the Software; and
"Year" means any period of 12 months during the term of this Agreement commencing on the date hereof or any anniversary of the date hereof.
Subject to the provisions for earlier termination contained in Clause 19, this Agreement shall commence on the date hereof for the Initial Period and shall continue thereafter for successive periods of one year unless and until terminated by either Party giving to the other not less than 6 months' written notice expiring at the end of the Initial Period or at the end of any successive periods of one year.
and then only if Elevon fails to rectify the position within the six months' period.
For the avoidance of doubt, this Clause 4.16 does not grant the Master Distributor any right to exercise the Additional Rights outside the Exclusive Territory or the Non-Exclusive Territory or terminate or suspend the Royalty payments to Elevon.
4.17 If Elevon rectifies the position described in Clause 4.16 after the grant of the Additional Rights has become effective and the Master Distributor is reasonably satisfied that Elevon or its successor are able to support and develop the Software in accordance with the service levels set out in Schedule 2, the Master Distributor shall immediately cease to exercise the Additional Rights and effectively terminate any sub-licences that it has granted under Clause 14.16.
4.18 The Master Distributor shall ensure that the sub- contractors granted sub-licences pursuant to Clause 4.16 shall be subject to confidentiality and non-disclosure obligations in relation to the Confidential Information equivalent or stronger than those set out in Clause 15 and that it shall indemnify Elevon against any loss or damage it may sustain or incur as a result of any breach of confidence by the sub-contractor.
and shall be entitled to make such number of copies as is reasonably necessary for those purposes and for purposes of disaster recovery.
The right set out in this Clause 12.2 shall be Elevon's sole remedy in respect of any failure of the Master Distributor to meet the Royalty Targets. In particular, Clause 19.1 shall not apply to such failure.
All payments shall be made in US dollars. If necessary, the Parties shall agree a rate of exchange, failing which they shall use the rate published in the London Financial Times at the time of payment.
Subject to completion of a suitable non- disclosure agreement the Master Distributor shall give the accountant full access to its premises, computers, employees and relevant records for such purpose and the accountant shall be permitted to take copies and extracts of such records. The Master Distributor shall procure that its employees shall provide such assistance, information and explanations as the accountant shall reasonably require. The audit shall be conducted in such a manner as to minimise any interference with the Master Distributor's normal business activities and will not include access to the Master Distributor's cost or profit information.
Each audit shall cover the period since the last most recent audit or, if none, the date of this Agreement down to the Business Day immediately preceding the commencement of the audit ("Audit Period").
Elevon shall use its reasonable endeavours to procure that the accountant shall keep confidential the information which comes to its knowledge as a consequence of the audit (and to enter into any confidentiality undertaking reasonably requested by the Master Distributor in respect thereof prior to any disclosure) except that the accountant shall be entitled to reveal to Elevon any information necessary to provide Elevon with confirmation of the whether the Master Distributor is complying with the provisions of this Agreement Royalty remittances or any deviations therefrom.
Upon written request, Elevon agrees to make available to the Master Distributor, in the event Elevon makes any claim with respect to an audit, a copy of the records and reports pertaining to the audit.
Elevon agrees not to cause such audits to be carried out more frequently than twice a year, except where Elevon has reasonable cause to believe that correct payments are not being tendered by the Master Distributor in which case Elevon may cause any number of audits to be carried out until such time as Elevon is reasonably satisfied that the position has been corrected.
Each such audit shall be carried out at Elevon's expense unless it reveals a deficiency of 10 per cent or more of the Royalties remitted for the relevant Audit Period, in which event the Master Distributor shall pay the costs thereof. Payment of such costs and any Royalty deficiency shall be made by the Master Distributor within 7 days after the Master Distributor shall have received written notice thereof from Elevon together with a copy of the accountant's report and, if applicable, fee note showing the amount(s) due. Any such deficiency shall carry interest in accordance with Clause 13.9.3 from the date it was originally due.
The Master Distributor shall use its reasonable endeavours to ensure that its Sub-Distributors shall comply with this Clause 13.8 to the same extent that the Master Distributor is obligated to comply.
Clauses 13.9.1 and 13.9.2 shall not apply where payments are in dispute and delayed as a result thereof provided that the Master Distributor promptly provides Elevon with documentary evidence of the dispute and its prompt attempts to resolve the dispute.
and the Master Distributor shall use all reasonable endeavours to prevent the unauthorised publication or disclosure of any such information, materials or documents.
Any failure or delay on the part of either Party to exercise any power or right under this Agreement shall not operate as a waiver of it, nor shall any single or partial exercise of any such right or power preclude any other or further exercise of the right or power. Any of the rights and remedies of either Party under this Agreement may at any time be enforced separately or concurrently with any other rights and remedies, whether under this Agreement or arising by operation of law with the effect that the rights and remedies are cumulative and not exclusive of each other.
The foregoing states the entire liability of Elevon to the Master Distributor in respect of the infringement of the Intellectual Property Rights of any unaffiliated third party.
Elevon's aggregate liability under this Clause 22.2 shall be limited to a sum equal to the total Royalties received by Elevon from the Master Distributor in the then current Year pursuant to this Agreement.
The Master Distributor's aggregate liability under this Clause 23.3 shall be limited to a sum equal to the total Royalties received by Elevon from the Master Distributor in the then current Year.
The Master Distributor acknowledges that the Software is of such complexity that it may have certain defects when delivered, and the Master Distributor agrees that in respect of such defects Elevon's sole liability and save as provided in Clause 22 the Master Distributor's sole remedy in respect of any breach of the warranty shall be for Elevon to provide corrections of documented program errors in accordance with Clause 8.2. If Elevon fails (other than through the act or default of the Master Distributor) within a reasonable time to correct non-conforming Software as aforesaid its liability therefor shall be limited to a sum equal to the total Royalties received by Elevon from the Master Distributor in any one Year pursuant to this Agreement.
Address: 303 2nd Street, 3 North, San Francisco 94107, California USA
For attention of: Frank Richardson
E-mail: frank.richardson@elevon.cc
Address: The Gatehouse, Gatehouse, Aylesbury, Buckinghamshire HP19 8HG
For attention of: Roger Llewellyn
E-mail: roger.llewellyn@elevon.cc
Any Party may change any details of its address, facsimile number or electronic mail address by notice in the manner described above.
If any term or provision of this Agreement or its application to any Party or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Agreement or the application of the term or provision to any other Party or circumstances, other than those as to which it is already invalid or unenforceable, shall not be affected, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. The Parties shall negotiate in good faith to replace any invalid or unenforceable provisions by substitute provisions.
No amendment to this Agreement whether oral or written shall be binding on either Party unless in writing and signed on behalf of the Parties.
Except as expressly permitted in this Agreement, the Master Distributor shall not be entitled to assign or otherwise transfer or dispose of this Agreement or any of its rights or obligations under it in whole or in part without the prior written consent of Elevon, such consent not to be unreasonably withheld or delayed provided that the Master Distributor may assign or otherwise transfer or dispose of this Agreement without the prior written consent of Elevon as part of a sale or transfer of all, or substantially all, of its business provided further that the Master Distributor may not assign or otherwise transfer or dispose of this Agreement to one of the parties listed in Schedule 9.
Each Party shall be responsible for all its own costs incurred in the performance of its obligations hereunder.
This Agreement may be entered into in any number of counterparts and by the Parties to it on separate counterparts, each of which when so executed and delivered shall be an original.
A person who is not a Party to this Agreement has no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement but this does not affect any right or remedy of a third party which exists or is available apart from that Act.
The Master Distributor acknowledges and agrees that the Software Materials, and all of the Confidential Information, are subject to export controls under the laws and regulations of the United States, including the Export Administration Regulations, 15 C.F.R. Parts 730-774. In the exercise of its rights and the performance of its obligations under this Agreement, the Master Distributor shall comply strictly with all such United States export control laws and regulations applicable to the Software Materials, and the Confidential Information, and shall not export, re-export, transfer, divert or disclose any such Software Materials or Confidential Information, or any direct product thereof, to any destination restricted or prohibited under U.S. export controls, or to any national or resident thereof, except in accordance with all U.S. export controls. The Master Distributor's obligations under this Clause shall survive the termination of this Agreement for any reason whatsoever.
(iii) audit the Master Distributor's use of the Software Materials in accordance with Clause 10.1.16 at all reasonable times during the continuance of this Agreement.
Signature /s/ Frank M Richardson
EX-2.1
NOVELE LIMITED
SHARE PURCHASE AGREEMENT
relating to the acquisition of the entire
issued share capital of
Elevon International Limited
CONTENTS
Clause Page
1 Definitions, interpretation and third party rights 1
2 Sale and purchase 7
3 Consideration 8
4 Completion 8
5 Warranties 9
6 Protection of Goodwill 11
7 Indemnity 15
8 Taxation 15
9 Release by Vendor 15
10 Insurance 16
11 Announcements 16
12 Assignment 16
13 General 17
14 Notices 18
15 Guarantees 20
16 Transfer of Commercial Contracts 21
17 Transfer of WIPI Commercial Contracts 23
18 The Properties 24
19 Pensions 29
20 Retained Employees 29
21 Governing law and jurisdiction 30
1 The Company
2 The Subsidiaries
3 Completion obligations of the Vendor
4 Warranties
1 Disclosed information 31
2 The Vendor 31
3 The Shares and the Company 32
4 Compliance with laws and regulation 34
5 The Accounts and accounting records 35
6 Business since the Accounts Date 36
7 Debts 37
8 Financial arrangements 38
9 Trading arrangements 38
10 Liabilities and commitments 39
11 Insurances 41
12 Assets 41
13 Intellectual Property 44
14 Properties 46
15 The Environment 48
16 Employees and consultants 48
17 Pensions 50
18 Taxation 51
5 Limitations on Liability
6 Properties
7 Intellectual Property
8 Tax Covenant
1 Definitions 71
2 Covenant 73
3 Limitations 74
4 Grossing up 75
5 Conduct of taxation claims 75
6 Payment 76
7 Recovery 77
8 Pre-Completion tax affairs 78
9 Guarantees
10 The Management Team
List of Agreed Form Documents
A1 to A4 Letters of Resignation
B Vendor's Power of Attorney
C1 to C3 Board Minutes
D1 to D3 Written Resolutions (and new Articles of Association)
E1 to E2 Distribution Agreements
F Transitional Services Agreement
G Legal Opinion
H1 to H3 The Intellectual Property Assignments
I July 31 Statement
J The Termination Letter
K The Property Assignment
N The NC Acquisition Agreement
O Vendor Group Company Inter-Company Debt acknowledgement
SHARE PURCHASE AGREEMENT
PARTIES
1 ELEVON, INC. a corporation incorporated under the laws of the State of Delaware of 303 2nd Street, 3 North, San Francisco 94107, California USA ("the Vendor")
2 NOVELE LIMITED (registered in England and Wales under number 4507111) whose registered office is at 20 Bedfordbury, London WC2N 4BL ("the Purchaser")
INTRODUCTION
A The Company is a private company limited by shares. Details of the Company are set out in Schedule 1.
B The Vendor has agreed to procure that WIPI shall sell and the Purchaser has agreed to buy the Shares, the WIPI Commercial Contracts and the Vendor Group Commercial Contracts on the terms and subject to the conditions of this Agreement.
AGREEMENT
Definitions, interpretation and third party rightsthe Accounts: the audited accounts of the Company and EL and the audited consolidated accounts of the Company and EL for the accounting reference period which ended on the Accounts Date (comprising in each case a balance sheet and profit and loss account or, as the case may be, a consolidated balance sheet and consolidated profit and loss account, notes and directors' and auditors' reports);
the Accounts Date: 31 December 2001;
the Agreed Form: the form agreed between and signed by or on behalf of the Vendor and the Purchaser;
Business Day: any day other than a Saturday, Sunday or any other day which is a public holiday in England or the United States of America;
CAA 2001: Capital Allowances Act 2001;
Claim: means any claim made by the Purchaser in connection with the Warranties or under the Tax Covenant or under an indemnity set out in this Agreement or the E5 Assignment and "Claims" shall be construed accordingly;
Commercial Confidential Information: all information other than Technical Confidential Information but including: trade secrets; customer/client lists, contact details of clients, customers and suppliers and individuals within those organisations; financial projections, target details and accounts; fee levels, pricing policies, commissions and commission charges; budgets, forecasts, reports, interpretations, records and corporate and business plans; planned products and services; marketing and advertising plans, requirements and materials, marketing surveys and research reports and market share and pricing statistics; and passwords;
the Company: Elevon International Limited;
the Companies Acts: the Companies Act 1985, the Companies Consolidation (Consequential Provisions) Act 1985, the Companies Act 1989 and Part V of the Criminal Justice Act 1993;
Completion: completion of the sale and purchase of the Shares and other assets being acquired by the Purchaser in accordance with this Agreement;
the Completion Date: 6 September 2002 at such time immediately following the closing of all financial markets in the United States on which the Vendor's shares are traded;
the Consideration: the sum referred to in Clause 3.1, being the consideration payable by the Purchaser to the Vendor (or as the Vendor directs) for the sale and purchase of the Shares and the benefit (subject to the burden) of the WIPI Commercial Contracts and the Vendor Group Commercial Contracts pursuant to this Agreement;
the Disclosure Letter: the letter dated the date of this Agreement from the Vendor to the Purchaser making certain disclosures against the Warranties;
the Distribution Agreements: the distribution agreements to be entered into by the Vendor and EL in the Agreed Form marked "E1" to "E2";
Domain Names: the internet domain names identified in Schedule 7;
E5 Assignment: the assignment of Intellectual Property relating to the E5 Software to be entered into by the Vendor and the Purchaser in the Agreed Form marked H1;
E5 Business: the business of licensing, maintaining, developing and installing the E5 Software for use in a client/server environment, (but not for use in conjunction with mainframe operating systems or environments) and providing associated business consulting services;
E5 Software: the computer software and associated Intellectual Property purchased by EL (then known as Walker Financial Solutions Limited) from the administrative receivers of QSP Group plc and QSP Solutions Limited pursuant to an agreement dated 1 November 2001, together with all software engineering modifications and developments thereto;
EL: Elevon Limited;
Exclusivity Letter: the letter agreement dated 17 July 2002 between the Vendor and Redac Limited;
GBCSL: Global Business Consulting Solutions Limited;
Group Company: in relation to any company, any body corporate which is from time to time a holding company of that company, a subsidiary of that company or a subsidiary of a holding company of that company and "Group Companies" shall mean all such companies;
Intellectual Property: patents, petty patents, utility models, registered designs, design right, copyright, database right, registered trade marks and service marks, trade or business names, domain names, logos, get-up or trade dress, or secret processes, formulae, know-how, patentable inventions and all rights or forms of protection of a similar nature or effect subsisting anywhere in the world, including applications or registrations for any such right;
Inter-Company Debt: the net debt outstanding from EL to the Vendor Group at the Completion Date, being the sum of £3,258,445;
July 31 Statement: the consolidated statement of working capital of EL in the Agreed Form marked "I";
KPMG Report: the report prepared for Alchemy by KPMG Transaction Services in connection with the acquisition of the Company;
the Management Accounts: the unaudited accounts of EL for the period from the Accounts Date to 31 July 2002 (comprising a balance sheet and profit and loss account), a copy of which is annexed to the Disclosure Letter;
the Management Team: the individuals who are identified in Schedule 10;
the NC Acquisition Agreement: the agreement in the Agreed Form marked "N" for the acquisition by the Purchaser (or a subsidiary of the Purchaser) of the Vendor's business in North Carolina;
the Parties: the Purchaser and the Vendor and "Party" shall mean either of them;
the Products: the software products of the Vendor commonly known as E2, Steps, E5, AFP and Horizon;
the Properties: the leasehold properties located in England and Wales owned or occupied by WIPI, the Company or one of the Subsidiaries, details of which are given in Part 1 of Schedule 6;
the Purchaser Group: the Purchaser and any subsidiary of the Purchaser from time to time and "member of the Purchaser Group" shall mean any such company;
Purchaser's Solicitors: Macfarlanes of 10 Norwich Street, London EC4A 1BD;
Relevant WIPI Contract: has the meaning ascribed to it in clause 17.5;
the Restricted Territories:
(a) the United Kingdom, the Channel Islands, the Isle of Man and the Republic of Ireland;
(b) Iceland, the Kingdom of Saudi Arabia, the Republic of South Africa, the Netherlands, Finland and Sweden;
(c) any other country in which the Company or any of the Subsidiaries carries on the E5 Business at Completion;
Retained Employees: means John C Curd, Martin A Frost, Paul Dillan, Peter G Willson, Stephen M Blasdale and Christine Buckley being those employees of EL who will not remain with EL on Completion but will instead be transferred to Seller or a Seller Affiliate at or before Completion (the "Retained Employees");
Shared Group Contract: any contract which, were the word "exclusively" deleted from the definition of "Vendor Group Commercial Contracts", would have constituted a Vendor Group Commercial Contract other than a Relevant WIPI Contract;
the Shares: the A and B ordinary shares referred to in paragraph 8 of Schedule 1, comprising the entire issued share capital of the Company;
the Subsidiaries: EL and GBCSL, details of which are set out in Schedule 2 and "Subsidiary" shall mean either of them;
Target Business: the business of licensing, maintaining, developing and installing the Products and associated business consultancy services in the Target Territories;
the Target Group: the Company and the Subsidiaries taken together and "member of the Target Group" shall mean any such company;
Target Group Commercial Contracts: all distribution, representation and agency agreements, sales agreements, purchase agreements, lease agreements, services agreements, licence agreements, co-operation agreements and other trading contracts to which a member of the Target Group is a party and which relate exclusively to the Vendor Business being those identified in Part 2 of Schedule 11 and "Target Group Commercial Contract" shall mean any such agreement or contract;
Target Group Guarantee: any guarantees, indemnities, suretyships, letters of comfort or other assurance, security or rights of set- off to which any member of the Target Group is a party relating to the business carried on by the Vendor Group including but not limited to those set out in Part 2 of Schedule 9 (and "Target Group Guarantees" shall mean all such Target Group Guarantees);
the Target Territories:
(a) the United Kingdom, the Channel Islands, the Isle of Man and the Republic of Ireland; and
Netherlands, Sweden and Finland; and
(c) in relation to the E5 Business only, any other country in which the Company or any of the Subsidiaries carries on business at Completion;
Taxation: has the meaning attributed to it in Schedule 8;
the Tax Covenant: the covenant contained in Schedule 8;
Taxes Act 1988: Income and Corporation Taxes Act 1988;
TCGA 1992: Taxation of Chargeable Gains Act 1992;
Technical Confidential Information: information of a technical nature and not being Commercial Confidential Information including: technical information, know-how, research and development; technical reports and interpretations; and computer software;
Termination Letter: the letter agreement in the Agreed Form marked "J" to be entered into by the Vendor and Redac Limited terminating the Exclusivity Letter with effect from Completion;
a third party: any person other than the Parties and "third parties" shall be construed accordingly;
Transitional Services Agreement: the transitional services agreement to be entered into by the Vendor and EL in the Agreed Form marked F;
VATA 1994: Value Added Tax Act 1994;
Vendor Business: the business of licensing, maintaining, developing and installing the Products outside the Target Territories;
Vendor Group: the Vendor and any subsidiary of the Vendor from time to time (other than members of the Target Group) and "member of the Vendor Group" shall mean any such company;
Vendor Group Guarantee: the guarantees, indemnities, suretyships, letters of comfort or other assurance, security or rights of set- off to which any member of the Vendor Group is a party relating wholly to the Target Business set out in Part 1 of Schedule 9 (and "Vendor Group Guarantees" shall mean all such Vendor Group Guarantees);
Vendor Group Commercial Contracts: all distribution, representation and agency agreements, sales agreements, purchase agreements, lease agreements, services agreements, licence agreements, co-operation agreements and other trading contracts to which the Vendor or a member of the Vendor Group other than WIPI is a party and which relate exclusively to the Target Business and the benefit of which has been, and is, held for the Target Group including but not limited to those agreements and contracts identified in Part 1 of Schedule 11 and "Vendor Group Commercial Contract" shall mean any of them;
the Vendor Territories: those countries which are not Restricted Territories;
the Warranties: the warranties set out in Schedule 4 and "Warranty" shall be construed accordingly; and
Warranty Claim: a claim made for breach of Warranty (or the warranties in the NC Acquisition Agreement) and "Warranty Claims" shall be construed accordingly; and
WIPI: Walker Interactive Products International, Inc.
WIPI Commercial Contracts: all distribution, representation and agency agreements, sales agreements, purchase agreements, lease agreements, services agreements, licence agreements, co-operation agreements and other trading contracts to which WIPI is a party and relate exclusively or predominantly to the Target Business and the benefit of which has been, and is, held for the Target Group, including but not limited to those listed in Part 3 of Schedule 11;
provided that in the case of those matters which fall within sub-Clause 1.3.3.1 above, as between the Parties, no such amendment or modification shall apply for the purposes of this Agreement to the extent that it would impose any new or extended obligation, liability or restriction on, or otherwise adversely affect the rights of, any Party;
Bank: Barclays Bank plc
Fleet Street Business Centre
Strand Corporate Banking Group
55 Hatton Garden
London
EC1N 8DN
Swift Code: BARCGB22
Sort Code: 20-30-19
Acct Name: Charles Russell USD Account
Acct Number: 47929288
shall prejudice any claim which the Purchaser shall be entitled to bring or shall operate to reduce any amount recoverable by the Purchaser under this Agreement or the Agreed Form Documents.
any business carried on within any part of the Restricted Territories which competes with the E5 Business carried on by the Company or any of the Subsidiaries at the Completion Date provided always that this Clause shall not prevent the Vendor from being interested as a holder or beneficial owner solely for investment purposes of less than five per cent. of any securities of any company whose securities are listed or quoted on any recognised investment exchange in the United Kingdom;
any customer of the Company or any of the Subsidiaries for the purpose of providing that customer with goods or services which are the same as or similar to any goods or services which it was involved in providing to that customer as part of the E5 Business at any time in the twelve months preceding the Completion Date;
any officer, consultant or senior or managerial employee of the Company or either of the Subsidiaries who has been employed at any time in the 6 months prior to Completion by such a company (whether or not such person would commit any breach of his contract of employment or engagement by reason of leaving the service of such company) for the purposes of providing services the same as or similar to those provided to the Company or any of the Subsidiaries save that this Clause 6.2.2.5 shall not apply to any such officer, consultant or senior or managerial employee of the Company or either of the Subsidiaries who makes an unsolicited approach to the Vendor (or a recruitment agency acting on behalf of the Vendor) or who responds to an advertisement placed in good faith by the Vendor (or on behalf of the Vendor);
any Commercial Confidential Information concerning the business, finances or affairs of the Company or of any of the Subsidiaries or of any of their respective customers or suppliers save for information: (a) that is in the public domain or which enters the public domain (other than where such information enters the public domain due to breach or default of the Vendor of this Agreement), (b) which is not capable of protection, (c) that is acquired from a third party other than as a result of a breach of an obligation of confidence owed to the Purchaser under this Agreement, or (d) to the extent that the Vendor continues to use such Commercial Confidential Information relating to the Vendor Business only in the Vendor Territories; or
any Technical Confidential Information concerning the business, finances or affairs of the Company or of any of the Subsidiaries or of any of their respective customers or suppliers save for information: (a) that is in the public domain or which enters the public domain (other than where such information enters the public domain due to breach or default of the Vendor of this Agreement), (b) which is not capable of protection, (c) that is acquired from a third party other than as a result of a breach of an obligation of confidence owed to the Purchaser under this Agreement, or (d) to the extent that the Vendor continues to use such Technical Confidential Information relating to the Vendor Business only in the Vendor Territories.
any officer, consultant or senior or managerial employee of the Vendor or any of its Group Companies who has been employed at any time in the 6 months prior to Completion by such a company (whether or not such person would commit any breach of his contract or employment or engagement by reason of leaving the service of such company) for the purposes of providing services the same as or similar to those provided to Inc. or any of its Group Companies, save that this Clause 6.3.1.1 shall not apply to any such officer, consultant or senior or managerial employee, who makes an unsolicited approach to a member of the Purchaser's Group (or a recruitment agency acting on their behalf), or who responds to an advertisement placed in good faith by a member of the Purchaser's Group (or on their behalf);
any Commercial Confidential Information concerning the business, finances or affairs of the Vendor or of any of its Group Companies or any of their respective customers or suppliers save for information: (a) that is in the public domain or which enters the public domain (other than where such information enters the public domain due to breach or default of the Purchaser or any of its Group Companies of this Agreement), (b) which is not capable of protection, (c) that is acquired from a third party other than as a result of a breach of an obligation of confidence owed to the Vendor under this Agreement, or (d) to the extent that the Target Group continues to use such Commercial Information relating to the Target Business only outside in the Vendor Territories;
any Technical Confidential Information concerning the business, finances or affairs of the Vendor or of any of its Group Companies or any of their respective customers or suppliers save for information: (a) that is in the public domain or which enters the public domain (other than where such information enters the public domain due to breach or default of the Purchaser or any of its Group Companies of this Agreement), (b) which is not capable of protection, (c) that is acquired from a third party other than as a result of a breach of an obligation of confidence owed to the Vendor under this Agreement, or (d) the Target Group continues to use such Technical Confidential Information relating to the Target Business only outside the Vendor Territories;
the names "Walker Interactive Products", "Elevon", "Horizon", "AFP", "Rarevision", "Tamaris", "Walker", "APTOS", "Immpower" or "Collaborative Synergis" (in each case whether alone or in conjunction with other names) or any name similar to those names or likely to be confused with them.
The Vendor covenants to indemnify and keep indemnified the Purchaser against all damages, actions, claims, demands, losses, costs and expenses incurred by the Purchaser or any member of the Target Group in connection with any liabilities of GBCSL (but not, for the avoidance of doubt, any liabilities of either of the Company or EL which do not relate to GBCSL) to the extent arising out of or relating to events occurring prior to Completion.
The provisions of Schedule 8 shall have effect.
In respect of any event occurring prior to Completion giving rise to a liability of the Target Group and in respect of which a claim under any policy of insurance in force immediately prior to Completion could be made, and where the benefit of such policy cannot be transferred or assigned to the Company the Vendor shall make and pursue any such claim at the Purchaser's cost as the Purchaser or the Target Group shall reasonably request including, but not limited to:-
in reliance, inter alia, upon the warranties, covenants, indemnities, agreements and undertakings set out in this Agreement. In the event of any such grant, assignment, sale or transfer, it is agreed that any person to whom such security has been granted, to whom such rights have been assigned or transferred or to whom such Shares have been sold or transferred shall in its own right be able to enforce any of the warranties, covenants, indemnities, agreements and undertakings set out in this Agreement, provided always that, as a condition thereto, (i) the Purchaser shall notify the Vendor in writing forthwith upon such grant, assignment, sale or transfer and (ii) any such third party shall (a) obtain the prior written consent of the Purchaser, (b) serve written notice on the Parties agreeing to be bound by the terms of Clause 19.2 (jurisdiction) and (c) not be entitled to assign its rights under this Clause 12.4.
Any notice or other communication given under this Agreement shall be in writing and signed by or on behalf of the Party giving it and shall be served by delivering it personally or sending it by pre-paid recorded delivery or registered post or fax to the address and for the attention of the relevant Party set out in sub-Clause 14.2 (or as otherwise notified by that Party under this Agreement). Any such notice shall be deemed to have been received:-
provided that if deemed receipt (but for this proviso) would have occurred before 9 a.m. on a Business Day the notice shall be deemed to have been received at 9 a.m. on that day, and if deemed receipt (but for this proviso) would have occurred after 5 p.m. on a Business Day, or on a day which is not a Business Day, the notice shall be deemed to have been received at 9 a.m. on the next Business Day.
Elevon Inc.
Address: 303 2nd Street
3 North
San Francisco 94107
California
USA
For the attention of: Frank Richardson
Fax number: 001 415 243 2828
With a copy to: The Company Secretarial Department
Ref: GXT/AYC
Charles Russell
8-10 New Fetter Lane
London
EC4A 1RS
Fax No: 00 44(2)7203 0202
Novele Limited
Address: 20 Bedfordbury
London
WC2N 4BL
For the attention of: Robert Barnes and Jon Moulton
Fax number: 00 44(0)20 7240 9594
With a copy to: Nicola Richards
Macfarlanes
10 Norwich Street
London EC4A 1BD
Fax number: 00 44(0)20 7831 9222
or such other address or fax number in the United Kingdom as may be notified in writing from time to time by the relevant Party to the other Party for the purposes of this Clause.
the Purchaser shall pay to the Gatehouse Landlord such sum as may be required to obtain the release of the Vendor Group Guarantee (up to a maximum of £100,000).
IN WITNESS WHEREOF, the duly authorised representatives of the Parties have duly signed this Agreement the day and year first before written.
SCHEDULE 1
The Company
Elevon International Limited
Gatehouse Way
Aylesbury
Buckinghamshire
HP19 3DL
Paul Andrew Lord
Keith Bertram Milton
Stanley Vogler
(a) Amount: £10,002
(b) Number and class of shares: 10,000 A Shares of £1 each
2 B Shares of £1 each
(a) Amount: £5,004
(b) Number and class of shares: 5,002 A Shares held by WIPI
2 B Shares held by WIPI
SCHEDULE 2
The Subsidiaries
Part 1
Elevon Limited
Gatehouse Way
Aylesbury
Buckinghamshire
HP19 3DL
Paul Andrew Lord
Keith Bertram Milton
Stanley Vogler
(a) Amount: £100,000
(b) Number and class of shares: 100,000 Ordinary Shares of £1 each
(a) Amount: £100,000
(b) Number and class of shares: 1 Ordinary Share held by WIPI
99,999 Ordinary Shares held by the
Company
Date of charge: |
Date of registration: |
Property charged: |
Sums secured: |
Chargee: |
9 November 2001 |
23 November 2001 |
All property |
All monies |
Barclays Bank plc |
Part 2
Global Business Consulting Solutions Limited
1 Registered number: 03760336
2 Date of incorporation: 23 April 1999
3 Place of incorporation: England and Wales
4 Registered office address: The Gatehouse
Gatehouse Way
Buckinghamshire
HP19 3DL
5 Directors William Roger Llewellyn
Paul Andrew Lord
Kevin John Lyons
Stanley Vogler
6 Secretary William Roger Llewellyn
7 Authorised share capital:
(a) Amount: £100
(b) Number and class of shares: 100 Ordinary Shares of £1 each
8 Issued share capital:
(a) Amount: £100
(b) Number of class of shares: 100 Ordinary Shares each held by EL
9 Issued loan capital: None
10 Charges: None
11 Accounting Reference Date: 31 December
SCHEDULE 3
Completion obligations of the Vendor
At Completion, the Vendor shall deliver or procure to be delivered to the Purchaser:-
SCHEDULE 4
Warranties
The facts set out in Schedules 1, 2, 9 and 11 are true and accurate in all respects.
The Vendor has disclosed to the Purchaser the existence and terms of any warranty and indemnity insurance cover or cover of a similar nature, in each case obtained specifically for the purposes of this Agreement, and relating to the subject matter of this Agreement.
Neither the Vendor nor WIPI nor, so far as the Vendor is aware, any person connected with the Vendor or WIPI has any interest, direct or indirect, in any business other than that now carried on by the Company which is competitive with the business of the Company.
There is not outstanding any agreement or arrangement to which the Company is a party and to which the Vendor is a party and in which any person beneficially interested in the Company's share capital, any director of the Company or any person connected with any of them is or has been interested, whether directly or indirectly.
Save only as provided in this Agreement, there are no agreements or arrangements in force which call for the present or future creation, allotment, issue, transfer, redemption or repayment of, or grant to any person the right (whether exercisable now or in the future and whether conditional or not) to call for the creation, allotment, issue, transfer, redemption or repayment of, any share or loan capital of the Company (including by way of option or under any right of conversion or pre-emption).
The Company is entitled to carry on the business now carried on by it without conflict with any valid right of any person, firm or company and the Company has conducted its business materially in accordance with all applicable laws and regulations of the United Kingdom or any foreign country and there is no violation of, or default with respect to, any statute, regulation, order, decree or judgment of any Court or any governmental agency of the United Kingdom or any foreign country which may have a material adverse effect upon the assets or business of the Company.
So far as the Vendor is aware, all necessary material licences (other than local branch registrations in jurisdictions outside the UK), consents, permits and authorisations (public or private) have been obtained by the Company to enable the Company to carry on its business effectively in the places and in the manner in which such business is now carried on and all such licences, consents, permits and authorisations are valid and subsisting and the Vendor knows of no reason why any of them should be suspended, cancelled or revoked.
So far as the Vendor is aware, none of the activities, contracts or rights of the Company which are material in the context of the business of the Target Group is ultra vires, unauthorised, invalid or unenforceable or in breach of any contract or covenant and all documents of a material nature in the enforcement of which the Company may be interested are valid and have been duly stamped.
Neither the Company, nor any person for whose acts or defaults the Company may be vicariously liable, is subject to any outstanding order, decree or court stipulation or involved in any civil, criminal or arbitration proceedings. So far as the Vendor is aware, no such order, decree, stipulation or proceedings are pending or threatened by or against the Company or any such person and, so far as the Vendor is aware, there are no facts or circumstances which are reasonably likely to lead to any such order, decree, stipulation or proceedings and no person or authority has made any statement suggesting that he or it might initiate such order, decree, stipulation or proceedings.
The Accounts:-
So far as the Vendor is aware, the accounting records of the Company:-
Since the Accounts Date:-
No person apart from the Company has given any guarantee of or security for any overdraft, loan or loan facility granted to the Company.
There are no debts owing by the Company, other than debts which have arisen in the ordinary course of business.
So far as the Vendor is aware, the Company is not subject to any option or pre-emption right or party to any guarantee or suretyship or any other obligation (whatever called) to pay, purchase or provide funds (whether by the advance of money, the purchase of or subscription for shares or other securities, the purchase of assets or services, or otherwise) for the payment of, indemnity against the consequences of default in the payment of, or otherwise to be responsible for, any indebtedness of any other person.
So far as the Vendor is aware, during the period of six years ending on the date of this Agreement, the Company has not applied for or received any grant or allowance from any authority or agency other than of a tax or revenue nature.
So far as the Vendor is aware, other than in the ordinary course of business the Company has not given any guarantee or warranty or made any representation more onerous than would otherwise be implied by law in respect of products or services sold or contracted to be sold by it.
Material contracts
For the purpose of the Warranties contained in paragraphs 10.1 and 10.2, an agreement, transaction, obligation, commitment, understanding, arrangement or liability is "material" if it accounts for 5% or more of the turnover of EL by reference to the Accounts.
So far as the Vendor is aware, neither the Company nor the Vendor, WIPI or any member of the Vendor Group in relation to the WIPI Commercial Contracts or the Vendor Group Commercial Contracts, nor any other party to any agreement with the Company, WIPI or any member of the Vendor Group (insofar as it relates to the Target Business), as the case may be, is in default under any such agreement (other than where such breach or default (either individually or in aggregate) is not material in the context of the Target Business, taken as a whole) nor (so far as the Vendor is aware) are there any circumstances likely to give rise to such a default (other than by reason of a default arising by virtue of the applicability of a change of control provision) and the Vendor is not aware of the invalidity of or grounds for rescission, avoidance or repudiation of any of such agreements or any allegation of such a thing, and, so far as the Vendor is aware, the Company, WIPI or any member of the Vendor Group, as the case may be, has not received notice of any intention to terminate any of such agreements by reason of such default.
So far as the Vendor is aware, the Company is not party to, nor have its profits or financial position been affected by, any agreement or arrangement which is not entirely of an arm's length nature.
So far as the Vendor is aware, no offer, tender or the like is outstanding which is capable of being converted into an obligation of the Company by an acceptance or other act of some other person.
the Data: any and all data or information used in connection with the business of the Company at any time and stored electronically at any time;
the Hardware: any and all computer, telecommunications and network equipment used in connection with the business of the Company (including PCs, mainframes, servers, screens, terminals, keyboards, disks, printers, cabling, associated and peripheral electronic equipment, but excluding the Software and the Data) other than items that are used as part of the Vendor's Group;
the IT Services: any and all services relating to the IT Systems or to any other aspect of the Company's internal data processing or data transfer requirements (including facilities management, bureau services, hardware maintenance, software development or support, consultancy, source code deposit, recovery and network services);
the IT Systems: the Hardware, the Software and the Data;
the Software: any and all computer programs used in connection with the business of the Company, other than all items which the Company licenses, or sub-licences to its customers, irrespective of application, language or medium (including but not limited to programs in both source and object code form, all source and other preparatory materials, including all user requirements, functional specifications and programming specification, algorithms, flow charts, logic, logic diagrams, orthographic representations, file structures, coding sheets, coding and including any manuals and other related documentation and computer generated works).
So far as the Vendor is aware, all IT Services are being and have been provided in material accordance with all applicable specifications.
So far as the Vendor is aware, in respect of the personal data (whether automatically or manually recorded) held by the Company:-
In this Warranty 13.3 "personal data", and "processed" shall have the meanings attributed to such expressions in the Data Protection Act 1998.
The particulars of Directors shown in paragraph 5 of Part 1 of Schedule 1 and in paragraph 5 of each Part of Schedule 2 are true and complete and, so far as the Vendor is aware, no person not named as such in that paragraph is or is held out as a director of the Company (other than Dean Dickinson, Bill Strachan, John Day and Kevin Lyons).
So far as the Vendor is aware, the Company is not a party to any agreement or arrangement with or commitment to any trades union or staff association nor, to the best of the Vendor's knowledge, information and belief, are any of its employees members of any trades union or staff association. No request made pursuant to Part 1 of Schedule A1 to the Trade Union and Labour Relations (Consolidation) Act 1992 for recognition of any trade union has been received by the Company nor, to the best of the Vendor's knowledge, information and belief, does any trade union propose submitting any such request to the Company.
So far as the Vendor is aware, there is no outstanding claim against the Company by any person who is now or has been an officer or employee of the Company or any dispute between the Company and a material number or class of its employees and no payments are due by the Company under the provisions of the Employment Rights Act 1996.
In the 12 months preceding the date of this Agreement, the Company has not:-
So far as the Vendor is aware, there is not now outstanding any contract or arrangement to which the Company is a party for the payment to any person or body of any consultancy or like fees.
So far as the Vendor is aware, since the Accounts Date, no material ex-gratia payments have been made by the Company to any officer or employee or former officer or employee of the Company or to their dependants or relatives nor is the Company considering making any such payments.
So far as the Vendor is aware, the Company has, in relation to each of its officers and employees (and, so far as relevant, to each of its former officers and employees):-
Words and expressions defined for the purposes of Schedule 8 (Tax Covenant) shall have the same meaning for the purposes of this Part of Schedule 4.
Since the Accounts Date:-
All sums of a revenue nature (including rents, interest, management charges and annual payments) payable by the Company pursuant to an obligation incurred by the Company before the Accounts Date and which will continue to bind the company after Completion have been and will continue to be fully deductible for the purposes of corporation tax (or any corresponding tax on profits in any relevant foreign jurisdiction), either in computing the profits of the Company or in computing the corporation tax or corresponding tax chargeable on it.
The Company is not and has never been a party to a group payment arrangement with the Inland Revenue under Finance Act 1998 section 36.
There has been no change of ownership of the Company nor has there been any major change in the nature or conduct of a trade or business carried on by the Company, within the meaning of Taxes Act 1988 section 768(4) or section 768B or The Corporation Tax (Treatment of Unrelieved Surplus Advance Corporation Tax) Regulations 1999 Regulation 16(6) (restrictions on utilisation of trading losses, investment company expenditure and surplus advance corporation tax).
No loss which might accrue on the disposal by the Company of any asset is liable to be reduced or eliminated and no chargeable gain is liable to be created or increased by virtue of any depreciatory transaction or any reduction in value of that or any related asset for the purposes of corporation tax on chargeable gains or any corresponding tax of any relevant foreign jurisdiction.
No circumstances exist which have or could require there to be apportioned to the Company any amount of the profits of a controlled foreign company (as defined in Taxes Act 1988 section 747(2)).
The Company has no:-
The Company has not been, and is not, required by Taxes Act 1988 Schedule 28AA paragraph 1 or any other foreign legislation relating to transfer pricing to compute its profits or losses as if an arm's length provision had been made instead of any actual provision.
The Company has made all deductions and retentions of or on account of taxation as it was or is obliged or entitled to make and has made all such payments of or on account of taxation as should have been made to any taxation authority in respect of such deductions or retentions.
The Company is not, nor at any time within the past six years has it been, a close company as defined in Taxes Act 1988 section 414.
The Company has not at any time been a party to or otherwise involved in a transaction or series of transactions in relation to which advisers considered that there was a risk that the Company could be liable to taxation under the provisions of Taxes Act 1988 Part XVII or as a result of the principles in W.T. Ramsay Limited v IRC (54 TC 101) or Furniss v Dawson (55 TC 324), as developed in subsequent cases.
The Company has not become liable to pay to a taxation authority any taxation in consequence of the failure by any other person (other than a Subsidiary) to discharge that taxation within any specified period where that other person was primarily liable for such taxation to the relevant taxation authority and where the taxation relates to a profit, income or gain arising, occurring or deemed to arise or occur before Completion.
SCHEDULE 5
Limitations on Liability
13 In the case of any Claim in respect of the Tax Warranties paragraphs 3 and 5 of the Tax Covenant shall apply mutatis mutandis."
SCHEDULE 6
Properties
Part 1
Property Details
1. Ground Floor, The Gatehouse, Aylesbury
Document |
Parties |
Commencement |
Expires |
Cost |
Termination/ Break Clauses |
Main Headlease of whole Building (assigned to Memec Europe Limited) |
Alton House Limited (1) Walker Interactive Products International (2) Walker Interactive Systems Inc (3) |
24 June 1991 |
24 March 2016 |
£260,800.00 per annum |
None |
Sub-lease from Memec |
Memec Europe Limited (1) Walker Interactive Products International (2) |
11 Feb 2002 |
10 August 2003 |
£128,640.00 per annum |
3 months' notice at any time on or after 11 November 2002 |
2. Walker House, Aylesbury
Document |
Parties |
Commencement |
Expires |
Cost |
Termination/ Break Clauses |
|
Main Headlease of whole |
Bryant Properties (Aylesbury) Limited (1) Walker Interactive Products International (2) Walker Interactive Products (3) |
25 December 1984 |
24 December 2009 |
£140,000.00 per annum |
None |
Subleases granted on Walker House
Document |
Parties |
Commencement |
Expires |
Cost |
Termination/ Break Clauses |
Careers Enterprise Sublease |
Walker Interactive Products International (1) Careers Enterprise Limited (2) |
1 April 2000 |
31 March 2005 |
£55,500.00 per annum |
3 months' notice exercisable on 31 March 2001, 2002 or 2003 |
Parsec Sublease |
Walker Interactive Products International (1) Parsec Systems Limited (2) |
23 March 2001 |
22 March 2004 |
£72,600.00 per annum |
6 months' notice exercisable on expiry of 2nd year |
3. Ground Floor, North and South Suites, Prismtech House, Gateshead
Document |
Parties |
Commencement |
Expires |
Cost |
Termination/ Break Clauses |
Main Sublease |
Prismtech Limited (1) Elevon Limited (2) |
1 April 2002 |
31 March 2005 |
£74,220.00 per annum |
Mutual break right - 6 months' notice exercisable on: (i) any anniversary of 16 April; or (ii) in respect of North or South Suite, on 16 April 2003/2004. |
First Floor Office Suite, Grove House, Basingstoke
Document |
Parties |
Commencement |
Expires |
Cost |
Termination/ Break Clauses |
Serviced office tenancy |
Absolutely Offices Limited (1) EL (2) |
9 September 2001 |
Either party may determine upon giving to the other at least one month's prior written notice to expire on the next quarter day |
£19,500 plus VAT per annum |
Either party may determine upon giving to the other at least one month's prior written notice to expire on the next quarter day |
SCHEDULE 6
Properties
Part 2
8.6.1 If following the expiry of a period of 12 months following Completion the Reversioner's Licence (or any superior landlord's consent) has not been obtained for any Transferring Property EL may give notice to WIPI that it wishes to take an assignment of such Transferring Property without the Reversioner's Licence (or any superior landlord's consent) whereupon the provisions of Clause 8.6.3 and Clause 8.6.4 shall apply.
8.6.2 If, following the expiry of a period of 6 months from the end of the 12 month period referred to in Clause 8.6.1 the Reversioner's Licence (or any superior landlord's consent) has not been obtained for a Transferring Property and Provided that WIPI may not give such a notice or effect such an assignment without the Reversioner's Licence (or superior landlord's consent) if proceedings pursuant to Clause 5.3 have been commenced or WIPI is in breach of its obligations under this Part 2 of Schedule 6, WIPI may give notice to EL that it wishes to effect an assignment of such Transferring Property without the Reversioner's Licence (or any superior landlord's consent) whereupon the provisions of Clause 8.6.3 and Clause 8.6.5 shall apply.
8.6.3 In the event that the circumstances contemplated in Clause 8.6.1 or Clause 8.6.2 arise then WIPI shall be under no obligation to obtain such consent and WIPI shall assign and EL shall accept an assignment of such Transferring Property in accordance with the terms hereof such assignment to incorporate an indemnity on the part of EL in favour of WIPI and any member of WIPI's Group Companies which at the time guarantees the tenant covenants and obligations contained in the relevant Lease against all actions costs claims demands expenses and other liabilities arising from the failure of EL to pay the rents reserved by or observe and perform the covenants liabilities obligations and conditions and other matters contained or referred to in the relevant Lease arising after the date of the assignment .
SCHEDULE 7
Intellectual Property
Identify where application has been made but not granted.
Patents, petty patents
EL has no patents or petty patents.
Trade Marks, service marks
Mark: |
SMART ANALYTIC APPLICATIONS |
Proprietor: |
EL |
Country of grant: |
SOUTH AFRICA |
Number: |
98/20453 |
Date of registration: |
15 OCTOBER 1998 |
Class Number: |
CLASS 9 |
Goods/services for which registered: |
COMPUTER SOFTWARE |
Details of disclaimers or restrictions: |
- |
Licensees: |
- |
Next renewal date: |
15 NOVEMBER 2008 |
Associated Marks: |
- |
Mark: |
SMART ANALYTIC APPLICATIONS |
Proprietor: |
EL |
Country of grant: |
SOUTH AFRICA |
Number: |
98/20454 |
Date of registration: |
15 OCTOBER 1998 |
Class Number: |
CLASS 42 |
Goods/services for which registered: |
SERVICES OF ALL KINDS |
Details of disclaimers or restrictions: |
- |
Licensees: |
- |
Next renewal date: |
15 NOVEMBER 2008 |
Associated Marks: |
- |
Mark: |
VIRTUAL CLOSE |
Proprietor: |
EL |
Country of Grant: |
SOUTH AFRICA |
Number: |
98/20455 |
Date of registration: |
15 OCTOBER 1998 |
Class Number: |
CLASS 9 |
Goods/services for which registered: |
COMPUTER SOFTWARE |
Details of disclaimers or restrictions: |
- |
Licensees: |
- |
Next renewal date: |
15 NOVEMBER 2008 |
Associated Marks: |
- |
Mark: |
VIRTUAL CLOSE |
Proprietor: |
EL |
Country of grant: |
SOUTH AFRICA |
Number: |
98/20456 |
Date of registration: |
15 OCTOBER 1998 |
Class Number: |
CLASS 42 |
Goods/services for which registered: |
SERVICES OF ALL KINDS |
Details of disclaimers or restrictions: |
- |
Licensees: |
- |
Next renewal date: |
15 NOVEMBER 2008 |
Associated Marks: |
- |
Mark: |
VIRTUAL CLOSE |
Proprietor: |
EL |
Country of grant: |
COMMUNITY TRADE MARK |
Number: |
963090 |
Date of registration: |
23 NOVEMBER 1998 |
Class Number: |
CLASSES 09/41/42 |
Goods/services for which registered: |
SCIENTIFIC EQUIPMENT, DATA PROCESSING EQUIPMENT AND COMPUTERS, LEISURE AND EDUCATION SERVICES, SCIENTIFIC, COMPUTER AND LEGAL SERVICES. |
Details of disclaimers or restrictions: |
- |
Licensees: |
- |
Next renewal date: |
- |
Associated Marks: |
- |
Registered designs
EL has no registered designs.
Trade Names/Copyright/Topgraphy rights/Design right
Save for the legal interest in copyright in research and development work done on E5 Software by EL, EL has no trade names, copyright, topography rights or design rights.
Domain names
elevon.co.uk
elevonasp.cc
elevonasp.co.uk
elevonasp.com
elevonusergroup.cc
elevonusergroup.co.uk
elevonusergroup.com
elevonusergroup.net
elevonusergroup.org
elevonusergroup.org.uk
schoolgovernor.org.uk
schoolgovernors.net
subscribe.co.uk
subscribe.com
subscribe.net
subscriber.co.uk
subscriber.com
subscriber.net
subscriber.org
subscriber.org.uk
subscyber.co.uk
subscyber.com
subscyber.net
walkerasp.co.uk
SCHEDULE 8
Tax Covenant
In this Schedule, unless the context requires otherwise, the following words and expressions have the following meanings and in the event of conflict the definitions in this Schedule shall prevail over the definitions in Clause 1 of this Agreement:-
provided always that paragraphs 3.1.2.1, 3.1.2.2 and 3.1.2.3 shall not apply to any change in transfer pricing policy by the Company, the Purchaser or any Subsidiary (save where necessary to comply with the provisions of Schedule 28AA, ICTA 1988 or analogous provisions in the relevant jurisdiction) after Completion;
the Purchaser shall procure that the Company or, as the case may be, the relevant Subsidiary, so far as is possible, uses the Relevant Relief in priority to any other Relief and pays to the Covenantor an amount equal to the amount by which the Company's taxation liability is reduced as a result of utilisation of the Relevant Relief.
then the Purchaser shall or shall procure that the Company or, as the case may be, the relevant Subsidiary shall make a payment to the Covenantor of an amount equal to the amount by which the Company's or as the case may be the relevant Subsidiary's taxation liability is reduced as a result of utilisation of the relief referred to in sub-paragraph 9.2.2 hereof.
SCHEDULE 9
Guarantees
Part 1
Vendor Group Guarantees
1. Deed of Guarantee provided by Walker Interactive Systems, Inc. (doing business as Elevon, Inc.) to The Mayor and Burgess of the Royal Borough of Kingston Upon Thames dated 13 March 2002.
2. Deed of Guarantee provided by Walker Interactive Systems, Inc. (doing business as Elevon, Inc.) to The Bank of England dated 21 May 2002.
3. Deed of Guarantee provided by Walker Interactive Systems, Inc. (doing business as Elevon, Inc.) to AXA Technology Services UK Limited dated 21 May 2002.
4. Deed of Guarantee provided by Walker Interactive Systems, Inc. (doing business as Elevon, Inc.) to London Electricity plc dated 21 May 2002.
5. Guarantee provided by Walker Interactive Systems Inc in respect of default of payment of rent or non-observance/performance of tenant covenants and obligations contained in the main headlease of the Property known as the Gatehouse, Aylesbury dated 7 November 1991, details of such Lease being set out in Part 1 of Schedule 6.
6. Guarantee provided by Walker Interactive Products Inc in respect of default of payment of rent or non-observance/performance of tenant covenants and obligations contained in the Lease of the Property known as Walker House, dated 26 February 1985, details of such Lease being set out in Part 1 of Schedule 6.
Part 2
Target Group Guarantees
None
SCHEDULE 10
The Management Team
Roger Llewellyn
Dean Dickinson
Keith Milton
William Strachan
John Day
Kevin Lyons
SCHEDULE 11
Commercial Contracts
Part 1
Vendor Group Commercial Contracts
Part 2
Target Group Commercial Contracts
None
Part 3
WIPI Commercial Contracts
1. Letter to Miss A Applegarth dated 3 April 199 signed by PHH Allstar Ltd and Walker Interactive Systems Incorporated together with All Star Fuel Card Price List and Special Options Menu, Terms and Conditions of use; and in name of Walker Interactive Products International: Application Form, Client Set-Up Form and Client Amendment Form.
/s/ Frank M Richardson
SIGNED by )
for and on behalf of ELEVON INC. )
/s/ Roger Llewellyn
SIGNED by )
for and on behalf of NOVELE LIMITED )