<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): June 30, 1998
Citrix Systems, Inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-27084 75-2275152
- ---------------------------- ------------ -------------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
6400 N.W. 6th Way
Fort Lauderdale, Florida 33309
- ---------------------------------------- ----------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (954) 267-3000
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Item 2. Acquisition or Disposition of Assets.
-------------------------------------
On June 30, 1998, Citrix Systems, Inc. (the "Company") completed its
acquisition of all of the outstanding securities of APM Ltd. ("APM"), a
company organized under the laws of England. APM, based in Cambridge,
England, is engaged in consulting and development of application
deployment, management and security products for Java. The Company
intends to integrate the businesses of APM with the Company's existing
operations.
The transaction was valued at approximately US $41 million. The Company
paid cash of approximately US $39 million and assumed net liabilities
and transaction costs of approximately US $2 million. A substantial
portion of the purchase price was allocated by the Company to in-
process research and development for which the Company incurred a one-
time charge to its operations, amounting to approximately US $34
million, in the quarter ended June 30, 1998. The source of the funds
used in this acquisition was the Company's working capital, and this
acquisition was accounted for by the Company as a purchase. The
purchase price and terms for the transaction were determined in arms-
length negotiations.
Forward-looking statements in this report are made pursuant to the safe
harbor provisions of Section 21E of the Securities Exchange Act of
1934. Investors are cautioned that statements in this press report
which are not strictly historical statements, including, without
limitation, statements regarding current or future financial
performance, management's plans and objectives for future operations,
product plans and performance, management's assessment of market
factors, as well as statements regarding the strategy and plans of the
Company and its strategic partners, constitute forward-looking
statements which involve risks and uncertainties, including, without
limitation, the successful and timely integration of APM into the
Company and the Company's existing or future products, market
acceptance of the Company's new or enhanced products, and the impact of
competitive products and pricing, in addition to risks associated with
the Company's reliance upon its strategic relationships with Microsoft
and other strategic partners, dependence upon broad-based acceptance of
the Company's ICA protocol, management of growth, the possibility of
undetected software errors, and dependence on proprietary technology.
For a more detailed description of the risk factors associated with the
Company, please refer to the Company's 1997 Form 10-K and its Form 10-Q
for the quarter ended March 31, 1998 filed with the Securities and
Exchange Commission.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(a) Financial Statements of Business Acquired: None required.
(b) Pro Forma Financial Information: None required.
(c) Exhibits:
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Exhibit No. Description
----------- -----------
2.1 Agreement and Undertaking by and among the Non-Executive
Directors of APM Limited, the Executive Directors of APM
Limited, and Citrix Systems, Inc. (the "Agreement and
Undertaking").*
2.2 Recommended Offers by Citrix Systems, Inc. for APM
Limited (the "Offer Document").*
* The exhibits to the Agreement and Undertaking and Offer Document are
not being filed herewith. The Agreement and Undertaking and Offer Document filed
herewith contain a list briefly identifying the contents of all exhibits to such
documents. The Company undertakes to furnish supplementally a copy of any
omitted exhibit to the Commission upon request. Pursuant to Item 601(b)(2) of
Regulation S-K, set forth below is a list of the omitted exhibits.
Agreement and Undertaking (Exhibit 2.1 hereto)
----------------------------------------------
Exhibit 1-4 Employment Agreements
Exhibit 5 Citrix Letter
Exhibit 6 APM Disclosure Memorandum
Exhibit 7-9 Forms of Acceptance
Exhibit 10 Irrevocable Undertaking
Exhibit 11 Offer Document
Exhibit 12 Mutual Non-Disclosure Agreement
Offer Document (Exhibit 2.2 hereto)
-----------------------------------
Selected financial data of APM for the 3 years ended December 31, 1995,
December 31, 1996 and December 31, 1997.
<PAGE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned authorized officer.
CITRIX SYSTEMS, INC.
July 15, 1998
By: /s/ James J. Felcyn, Jr.
--------------------------------
James J. Felcyn, Jr.
Vice President - Finance and
Administration, Chief Financial
Officer
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EXHIBIT INDEX
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Exhibit No. Description
- ----------- -----------
2.1 Agreement and Undertaking by and among the Non-Executive
Directors of APM Limited, the Executive Directors of APM Limited,
and Citrix Systems, Inc.
2.2 Recommended Offers by Citrix Systems, Inc. for APM Limited
<PAGE>
EXHIBIT 2.1
DATED 8th June 1998
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THE NON-EXECUTIVE DIRECTORS OF APM LIMITED
THE EXECUTIVE DIRECTORS OF APM LIMITED
- and -
CITRIX SYSTEMS, INC.
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AGREEMENT AND UNDERTAKING
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TAYLOR JOYNSON GARRETT
Carmelite
50 Victoria Embankment
Blackfriars
London EC4Y 0DX
Tel: 0171 353 1234
Fax: 0171 936 2666
DX: 41 London
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I N D E X
<TABLE>
<CAPTION>
CLAUSE NO. PAGE NO.
<S> <C>
1. DEFINITIONS AND INTERPRETATION................................... 1
2. THE OFFERS AND IRREVOCABLE UNDERTAKINGS.......................... 5
3. UNDERTAKINGS BY THE DIRECTORS.................................... 7
4. RESTRICTIONS ON EXECUTIVE DIRECTORS.............................. 11
5. UNDERTAKINGS BY CITRIX........................................... 14
6. UNDERTAKINGS BY ALL PARTIES...................................... 15
7. TERMINATION...................................................... 16
8. LIABILITY........................................................ 16
9. MISCELLANEOUS.................................................... 17
</TABLE>
SCHEDULE
Part 1 The Non-Executive Directors
Part 2 The Executive Directors
EXHIBITS
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
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<S> <C>
1 to 4 Employment Agreements
5 Citrix Letter
6 APM Disclosure Memorandum
7 to 9 Forms of Acceptance
10 Irrevocable Undertaking
11 Offer Document
12 Mutual Non-Disclosure Agreement
</TABLE>
<PAGE>
THIS AGREEMENT AND UNDERTAKING is made on 8th June, 1998
(1) THE PERSONS whose names and addresses are set out in part 1 of the Schedule
(the "Non-Executive Directors");
(2) THE PERSONS whose names and addresses are set out in part 2 of the Schedule
(the "Executive Directors"); and
(3) CITRIX SYSTEMS, INC, whose principal place of business is at 6400 NW 6/th/
Way Fort Lauderdale Florida, 33309, USA ("Citrix").
(A) Citrix desires to acquire the entire issued share capital of APM Limited
(Company No. 2300071) ("APM").
(B) Citrix will make the Offers (as defined below) subject to the terms and
conditions of this Agreement.
(C) In consideration of agreeing to make the Offers the Directors (as defined
below) have agreed to enter into this Agreement.
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
(a) The following terms, as used herein, have the following meanings:
"ACCEPTORS" means those APM shareholders, Loan Stock Holders and
Optionholders who accept the Offers and those APM shareholders whose
APM shares are compulsorily acquired under the Articles of Association
of APM:
"ACCOUNTS DATE" means 31 December 1997;
"AGENCY MEMORANDUM" means the Agency Memorandum to be entered into
between APM and Digitivity Inc.;
"AGREED FORM" means in a form which is agreed to by all of the Parties
and which is signed, for the purposes of identification only, by
Citrix's Solicitors and APM's Solicitors, and the "EXHIBITS" to this
Agreement shall be in the Agreed Form;
"AGREEMENT" means this agreement and undertaking including the
introduction and the Schedule;
<PAGE>
"APM COMPANIES" means APM and its Subsidiaries and "APM COMPANY" shall
be construed accordingly;
"APM DEFERRED SHARES" means deferred ordinary shares of 1 pence each
in the capital of APM;
"APM DISCLOSURE MEMORANDUM" means the memorandum relating to APM of
even date herewith including the documents annexed thereto, as set out
in Exhibit 6;
"APM LOAN STOCK" means 5 per cent. convertible unsecured loan stock
2007 of APM;
"APM ORDINARY SHARES" means ordinary shares of 1 pence each in the
capital of APM;
"APM RESTRICTED SHARES" means restricted ordinary shares of 1 pence
each in the capital of APM;
"APM SHARES" means APM ordinary shares, APM restricted shares and APM
deferred ordinary shares issued and those issued by APM prior to the
Closing Date;
"APM SHAREHOLDERS" means the holders of APM shares;
"APM SHARE OPTIONS" means subsisting options granted under the APM
Limited Share Option Scheme 1996 which have not lapsed prior to the
date of the Offers;
"APM'S SOLICITORS" means Hewitson Becke + Shaw, Cambridge, England;
"ASSOCIATE" means, with respect to any Person, any Person directly, or
indirectly controlling, controlled by, or under common control with
such Person and, in the case of any Person being a trustee, includes
the principal beneficiaries of the relevant trust, and "ASSOCIATES"
shall be construed accordingly;
"BUSINESS DAY" means a day on which banks are open for the transaction
of all business in England and the United States;
"CITRIX'S GROUP" means Citrix and its Subsidiaries;
"CITRIX LETTER" means the letter to be written by Citrix to APM as set
out in Exhibit 5;
<PAGE>
"CITRIX'S SOLICITORS" means Taylor Joynson Garrett, London, England;
"CLOSING" means the closing of the Offers;
"DEPOSITARY" means Citrix's Solicitors and APM's Solicitors jointly to
be appointed as the depositary under the Depositary Agreement;
"DEPOSITARY AGREEMENT" means the depositary agreement to be entered
into on the Closing Date among Citrix and the Depositary;
"EMPLOYMENT AGREEMENTS" means the contracts of employment to be
entered into by each of the Executive Directors other than Metcalf and
confidentiality and proprietary information agreements to be entered
into by each of the Executive Directors other than Metcalf and the
consulting agreement to be entered into by Metcalf as set out in
Exhibits 1 to 4;
"ENCUMBRANCE" means, with respect to any asset, any mortgage,
encumbrance, pledge, charge, security interest or restriction of any
kind in respect of such asset;
"FORMS OF ACCEPTANCE" means the separate forms of acceptance for use
in connection with the Offers, as set out in Exhibits 7 to 10;
"IRREVOCABLE UNDERTAKING" means the undertaking for use in connection
with the Offers as set out in Exhibit 10;
"HERBERT" means Mr A J Herbert whose full name and address are set out
in Part 2 of the Schedule;
"LETTER OF CONSENT" means the letter of consent from APM to Sun
MicroSystems Inc.;
"LOAN STOCK HOLDERS" means the holders of APM loan stock;
"METCALF" means Mr SM Metcalf whose full name and address are set out
in Part 2 of the Schedule;
"OFFER DOCUMENT" means the offer document as set out in Exhibit 11;
"OFFERS" means the offers to be made by Citrix for APM contained in
the Offer Document;
"OPTIONHOLDERS" means holders of options to subscribe for APM
restricted Shares;
"PARTIES" means the parties to this Agreement and "PARTY" shall be
construed accordingly:
<PAGE>
"PERSON" means an individual, corporation, partnership, association,
trust or other entity or organisation, including a government or
political subdivision or an agency or instrumentality thereof;
"PHOENIX" means Mr CJ Phoenix whose full name and address are set out
in Part 2 of the Schedule;
"SCHEDULE" means the schedule comprising parts 1 and 2 annexed hereto;
"SUBSIDIARY" means any entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are
owned directly or indirectly by APM or Citrix, as the case may be, and
"SUBSIDIARIES" shall be construed accordingly.
Each of the following terms is defined in the clause set forth
opposite such term:
Term Clause
"Closing Date" 2.7
"APM Statements" 8.3
1.2 Interpretation
In this Agreement:
(a) All references to a statutory provision herein shall be construed as
including references to:
(i) any statutory modification, consolidation or re-enactment
(whether before or after the date of this Agreement) for the
time being in force;
(ii) all statutory instruments or orders made pursuant to a
statutory provision; and
(iii) any statutory provisions of which a statutory provision is a
consolidation, re-enactment or modification.
PROVIDED that this shall not operate to impose any additional or
extended liability on any party to this Agreement;
(b) the singular includes a reference to the plural and vice versa;
(c) any clause or sub-clause is to a clause or sub-clause (as the case may
be) of or to this Agreement;
(d) any gender includes a reference to all other genders.
<PAGE>
1.3 Consistency with Past Practice
The phrase "consistent with its past practice" means consistent with
such practice(s) (if any) established by APM by any of its
Subsidiaries and observed in relation to the conduct of each APM
Company's business during the year preceding the Accounts Date.
2. THE OFFERS AND IRREVOCABLE UNDERTAKINGS
2.1 Documents to be delivered on signing
On the date hereof:
(a) each of the Executive Directors shall deliver to Citrix copies of
his Employment Agreement duly executed by him, APM and by Citrix
and be conditional on all matters referred to in clause 2.7 being
completed;
(b) each of the Executive Directors shall procure that there is
delivered to Citrix's Solicitors the current draft of APM
Disclosure Memorandum; and
(c) there shall be delivered to Citrix's Solicitors the Letter of
Consent duly signed by Sun MicroSystems, Inc.
2.2 Recommendation of the Offers
Each of the Directors hereby irrevocably and unconditionally
undertakes to Citrix, subject always to such Director's fiduciary
duties, which shall be determined by each Director in his sole
discretion, to recommend acceptance of the Offers.
2.3 Irrevocable Undertakings
Each of the Executive Directors shall upon signing the Agreement sign
an Irrevocable Undertaking in respect of all of his APM shares.
2.4 The Offers
Citrix hereby unconditionally and irrevocably undertakes to each of
the Directors to despatch the Offer Document and deliver the Citrix
Letter to APM as soon as reasonably practicable (and in any event
within three Business Days) after Citrix has received:
(a) Irrevocable Undertakings in respect of at least 50 per cent of
the issued share capital of APM; and
(b) the APM Disclosure Memorandum updated to reflect events solely
occuring following the date of this Agreement and relating solely
to the business of APM which in Citrix's sole discretion is in a
form and substance acceptable to Citrix save that Citrix may not
decline to accept any part of that APM Disclosure Memorandum
which is contained in Exhibit 6.
<PAGE>
2.5 Implementation of drag along
Each of the Directors hereby irrevocably and unconditionally undertakes to
Citrix to do all acts as are required of him by Article 41 of the Articles
of Association of APM to give effect to the rights of the Vendors (as
defined in that Article).
2.6 Offers Becoming Wholly Unconditional
(a) At the meeting convened for the purposes set out in clause 2.7 Citrix
shall, following receipt of the supplemental disclosure memorandum
pursuant to clause 2.7(a), consider whether the conditions of Citrix
set out in paragraph 1 of part 1 of Appendix I to the Offer Document
have been satisfied or should be waived.
(b) Subject to the satisfaction (or waiver) of the conditions in favour of
Citrix set out in Appendix I of the Offer Document, Citrix shall
declare the Offers wholly unconditional on the Closing Date provided
that such conditions have been so satisfied prior to 1 August 1998. If
such conditions have not been so satisfied the Offers will lapse.
2.7 Closing Meeting
On or before 1 July 1998 (or at such other date as Citrix and the
Executive Directors may agree) (hereinafter referred to as the "CLOSING
DATE"), the following shall take place at the offices of Citrix's
Solicitors:
(a) There shall be delivered to Citrix or to its Solicitors the final form
of a supplemental disclosure memorandum (if any) updating the
information shown in the APM Disclosure Memorandum to the Closing
Date; provided, however, that such supplemental disclosure memorandum
shall be solely for information and shall not be deemed to amend or
restate the APM Disclosure Memorandum.
(b) Board meetings shall be held of each of the APM Companies at which:
(i) the Directors (other than Phoenix) shall resign as directors of
such companies together with the Company Secretary and deliver
letters of resignation in the Agreed Form, and those persons as
Citrix may designate shall be appointed additional directors and
as Company Secretary; and
(ii) there shall be presented the written resignation of the auditors
of each APM Company together with a statement in accordance with
section 394 of the Companies Act 1985 that there are no
circumstances connected with such resignation which they consider
should be brought to the attention of the members or creditors of
any APM Company and that there are no fees or other payments due
to them from the relevant APM Company.
(c) There shall be delivered to Citrix or to its Solicitors:-
<PAGE>
(i) the statutory books of each APM Company complete and accurate
up to the Closing Date and any company seal(s), certificates of
incorporation, certificates of incorporation on change of name
and all unused share certificates of each APM Company;
(ii) duly completed and signed transfers in favour of Citrix or such
person or persons as it may direct of all shares in each of the
Subsidiaries of APM which are not registered in the name of APM
together with the relative share certificates;
(iii) lists certified by APM's Company Secretary of names and address
of the APM shareholders, Loan Stock Holders and Optionholders
and the tax identification numbers for each of the APM
shareholders and Loan Stock Holders who are resident in the
United States but not employed by any of the APM Companies;
(iv) the Agency Memorandum duly executed by APM and Digitivity, Inc,
together with the written advice from the advisers to APM and
Digitivity, Inc. supporting the conclusions reached in the
Agency Memorandum; and
(v) copies, certified by APM's Company Secretary, of a letter to
each of Mr P Dawe and Mr R Sanson terminating immediately the
arrangements set out in the letters dated 17 January 1997 from
APM to each of them.
(d) The Depositary Agreement shall be executed by or on behalf of the
parties thereto.
(e) Each of the Parties shall execute and deliver any other instruments,
documents and certificates that are required to be delivered pursuant
to this Agreement, the Offer Document or as may be reasonably
requested by any Party in order to consummate the transactions
contemplated by this Agreement and the Offers.
Each of the Executive Directors shall use his reasonable endeavours to
procure that each of the acts, documents and events specified in clause
2.7 shall be done, delivered and/oroccur as provided in such clause.
3. UNDERTAKINGS BY THE DIRECTORS
3.1 Conduct of Business
From the date hereof until the earlier of the date on which the Offers
lapse and the Closing Date, each of the Directors shall use his respective
reasonable endeavours to procure that each of the APM Companies shall,
conduct its business in the ordinary course and use his reasonable
endeavours to preserve intact its business and its relationships with third
parties and use his reasonable endeavours to keep available the services of
its present officers and employees, save with the prior written consent of
Citrix. Without limiting the generality of the foregoing, from the date
hereof until the earlier of the date on which the Offers lapse and the
Closing Date, without the prior
<PAGE>
written consent of Citrix, no APM Company shall, and each of the Directors
shall use his respective reasonable endeavours to procure that no APM
Company shall:
(a) adopt or propose any change in its memorandum or articles of
association;
(b) merge or consolidate with any other Person or acquire a material
interest in the share capital or business of any other Person;
(c) sell, lease, license or otherwise dispose of or acquire any assets or
property except pursuant to existing contracts or commitments;
(d) effect any direct or indirect redemption, purchase or other
acquisition of any securities of APM, or declare, set aside or pay any
dividend or make any other distribution of assets of any kind
whatsoever with respect to any securities of APM;
(e) save pursuant to a legal obligation existing prior to the signing of
this Agreement issue any securities of APM or create any Encumbrance;
(f) borrow any money or incur any credit or make any loan or other advance
to any Person;
(g) compromise or settle any legal or arbitration proceedings by or
against it;
(h) enter into any licensing, development, sales, employment, severance or
settlement agreements or any other agreement (whether or not in the
ordinary course of business) in each case that is material to the APM
Companies taken as a whole, ("material" in this context means any long
term agreement or arrangement exceeding 3 months in duration or any
agreement or arrangement with a value of over (Pounds)25,000 or any
agreement or arrangement of strategic importance to APM and Citrix);
(i) incur any expenditure from the date of this Agreement to the Closing
Date which in aggregate exceeds that disclosed in the APM Disclosure
Memorandum; and
(j) agree or commit to do any of the foregoing.
3.2 Access to Information
From the date hereof until the earlier of the date on which the Offers
lapse and the Closing Date:
(a) upon Citrix giving notice to the Directors, each of the Directors
shall use his reasonable endeavours to procure that each APM Company
shall:
(i) give Citrix, its lawyers, financial advisers, auditors and other
authorised representatives reasonable access to the offices,
properties, books and records of each APM Company;
<PAGE>
(ii) furnish to Citrix, its counsel, financial advisers, auditors and
other authorised representatives such financial and operating
data and other information relating to each APM Company as such
persons may reasonably request; and
(iii) instruct the employees of each APM Company to co-operate with
the reasonable requests of Citrix in its investigation of that
APM Company; provided that:
(A) compliance with the above shall not unreasonably interfere
with the business of the APM Companies being conducted in
the ordinary course; and
(B) no information provided to Citrix pursuant to this clause
shall affect the rights of Citrix under the Offer Document
or this Agreement.
(b) each of the Executive Directors shall use his respective reasonable
endeavours to procure that each APM Company shall co-operate with the
reasonable requests of Citrix in relation to the combining of the
businesses of Citrix and each APM Company; provided that:
(i) compliance with the above shall not unreasonably interfere with
the business of the APM Companies being conducted in the ordinary
course; and
(ii) Citrix shall consult with the Directors regarding any proposals
it may have in relation to the combining of the businesses before
entering into discussions with any employees, customers,
suppliers, distributors, VARs and professional advisers of the
APM Companies.
3.3 Notices of Certain Events
From the date hereof until the earlier of the date on which the Offers
lapse and the Closing Date, each of the Directors shall use his respective
reasonable endeavours to procure that each APM Company shall, promptly
notify Citrix of:
(a) any notice or other communication received by him or it from any
Person alleging that the consent of such Person is or may be required
in connection with the transactions contemplated by this Agreement or
the Offers;
(b) any notice or other communication received by him or it from any
governmental or regulatory agency or authority, that relates to the
consummation of the transactions contemplated by this Agreement or the
Offers; and
(c) any actions, suits, claims, investigations or proceedings commenced
or, to the knowledge of him or it, threatened against such APM
Company, that relate to the consummation of the transactions
contemplated by this Agreement or the Offers.
<PAGE>
3.4 No Negotiations with Third Parties
From the date hereof until the earlier of the Closing Date and the date on
which the Offers lapse, each of the Directors shall not, directly or
indirectly, encourage, solicit or engage in any discussions or negotiations
with, or provide any information to, any Person, concerning the possible
acquisition by a third party of all or any material part of the business of
any APM Company, whether by purchase of assets, shares, merger or otherwise
(an "Acquisition Proposal"), other than as contemplated or permitted by
this Agreement and the Offers. Each of the Directors agrees promptly to
notify Citrix of the expression of an interest by any Person to such
Director with respect to any such Acquisition Proposal and to provide
Citrix with copies of any documents received relating thereto and each of
the Directors shall use his respective reasonable endeavours to procure
that each APM Company shall do likewise.
3.5 Continuing Disclosure
From the date hereof until the earlier of the Closing Date and the date on
which the Offers lapse, each of the Executive Directors shall have the
continuing obligation to cause APM promptly (upon becoming aware of the
same) to advise Citrix with respect to any matter hereafter arising or
discovered that, if existing or known at the date of this Agreement, would
have rendered any statement set out in Part 2 of Appendix III of the Offer
Document untrue in any material respect, or that places such Executive
Director in breach, or is likely to place such party in breach of this
Agreement.
3.6 Undertakings on Statements
Each of the Executive Directors shall use his respective reasonable
endeavours to procure that the APM Companies shall not prior to the Closing
Date:
(a) take or agree or commit to take any action that would make any
statement set out in Part 2 of Appendix III of the Offer Document (as
varied by the APM Disclosure Memorandum) inaccurate in any material
respect at the Closing Date, or as at any time after the date hereof
and prior to the Closing Date; or
(b) omit or agree or commit to omit to take any action necessary to
prevent any such statement from becoming so inaccurate in any material
respect at any such time.
3.7 Non-Solicitation
If the Offer lapses each of the Executive Directors agrees that he shall
not and shall use his respective reasonable endeavours to procure that the
APM Companies in respect of Citrix and its Subsidiaries and, for a period
of two years from the date hereof, shall not:
(a) solicit, induce or recruit any of Citrix's employees to leave their
employment; or
<PAGE>
(b) hire any of Citrix's former or current employees, except that the
foregoing prohibition on hiring shall not apply with respect to any
former employee whose employment was terminated without cause or to
any former employee whose employment terminated prior to 30 June 1998;
or
(c) use any confidential information now or hereafter received or obtained
with respect to any of the business or operations of Citrix.
3.8 Contracts
Upon receiving a written request from Citrix, each of the Executive
Directors (in their capacity as directors) shall use all reasonable
endeavours to obtain appropriate waivers from third parties of any rights
which they may have to terminate agreements with APM Companies consequent
upon any change of control or the like.
3.9 401(k) Plan
Prior to the Closing Date the Directors shall procure the termination of
the Digitivity Inc. 401(k) Plan.
4. RESTRICTIONS ON EXECUTIVE DIRECTORS
4.1 For the purposes of this clause the following words have the following
meanings:
"the Restricted - the design, sale of and procuring of
Business" customers for the Products and the
sale and procuring of customers for
maintenance training and consultancy
services in respect of the
installation and running of the
Products but limited to products and
services for which the Executive
Director has been responsible or
involved with on behalf of one or
more of the APM Companies during the
twelve months prior to the Closing
Date;
"the Restricted - the countries with which the
Area" Executive Director has been
responsible or involved with on
behalf of APM or in respect of any
branch of APM with respect to the
Restricted Business during the twelve
months prior to the Closing Date
including without limitation the
United States and the United Kingdom;
"the Products" - products which provide secured
deployment or managed deployment of
Java applications for internet,
intranet and extranet use;
"the Restricted Period" - the period of 24 months from the
Closing Date APM.
4.2 In consideration of Citrix purchasing APM shares from each of the Executive
Directors each of them hereby severally covenants and undertakes with
Citrix that he will not:
<PAGE>
(a) for the Restricted Period whether alone or jointly with or as agent of
any person or persons and whether directly or indirectly:
(i) engage, take up or hold any office in or with any business
which is engaged or is intended to be engaged in the field of
the Restricted Business within the Restricted Area;
(ii) take up or hold any post or position which enables or permits
him to exercise whether personally or by an agent and whether
on his own account or in association with or for the benefit of
any other person any influence over any business which is
engaged or is intended to be engaged in the field of the
Restricted Business within the Restricted Area; or
(iii) take up or hold any employment or consultancy with any person
which is engaged or is intended to be engaged in the field of
the Restricted Business within the Restricted Area
and which would have the necessary or probable result of him being engaged
within the Restricted Area in business activities which are the same or
similar to the Restricted Business;
(b) for the Restricted Period either personally or by an agent and either
on his own account or for or in association with any other person or
otherwise directly or indirectly engage in any capacity in any
business concern (of whatever kind) which shall be in competition at
the Closing Date with the Restricted Business provided always that he
may hold as an investment not more than 1% of the issued share capital
of a company quoted on a stock exchange;
(c) for the Restricted Period either personally or by an agent and either
on his own account or for or in association with any other person
directly or indirectly canvass or by any other means solicit, approach
or seek out or cause to be canvassed, solicited, approached or sought
out any person for orders or instructions in respect of any goods or
services provided or supplied by APM in the course of the Restricted
Business who or which has within the period of 12 months prior to the
Restricted Period transacted the Restricted Business with him;
(d) for the Restricted Period either personally or by an agent or either
on his own account or for or in association with any other person
canvass approach solicit seek out or by any other means endeavour to
entice away from APM or induce to break their contract of employment
with APM, or aid or assist any other person or persons in employing or
otherwise retaining the services of any one who is employed by APM or
who is a consultant to APM and in either case was engaged in any
executive, technical or advisory capacity at APM (excluding junior
clerical and administrative staff) during the 12 months prior to the
Restricted Period;
<PAGE>
(e) for the Restricted Period either personally or by an agent and either
on his own account or for or in association with any other person in
connection with the carrying on of business in the field of the
Restricted Business offer employment to or retain as a consultant
(whether by way of a contract of services, a consultancy agreement,
partnership or howsoever and whether on his own behalf or on behalf of
any other person) any person who is employed by any of APM Companies
or who is a consultant to any of APM Companies and in either case is
engaged in any executive, technical or advisory capacity (excluding
junior clerical and administrative work) at the time of the
commencement of the Restricted Period;
(f) at any time, use whether directly or indirectly or in connection with
any trade or business, the name "APM" "ANSA" or "Digitivity" or "CAGE"
or any colourable imitation thereof or any name resembling the same or
capable of causing confusion.
4.3 Each of the Executive Directors hereby agrees that he will at the request
and cost of Citrix enter into a direct agreement or undertaking with any
Associate of Citrix whereby he will accept restrictions and provisions
corresponding to the restrictions and provisions above (or such of them as
may be appropriate in the circumstances) in relation to such activities and
such areas and/or such periods not greater than those set out above as any
such Associate of Citrix may require for the protection of its legitimate
interests.
4.4 Each of the Executive Directors hereby acknowledges and agrees that:
(a) each of the covenants contained in sub-clauses 4.2(a), 4.2(b), 4.2(c),
4.2(d), 4.2(e), 4.2(f) and 4.3 constitute an entirely separate and
independent restriction on him; and
(b) the duration extent and application of each of the restrictions are no
greater than as necessary for the protection of the interests of APM.
4.5 Whilst the restrictions in sub-clauses 4.2 and 4.3 are considered by the
Parties to be reasonable in all the circumstances as at the date of this
Agreement it is acknowledged that restrictions of such a nature may be
invalid because of changing circumstances or other unforeseen reasons and
accordingly it is hereby agreed and declared that if any one or more of
those restrictions is judged to be void as going beyond what is reasonable
in all the circumstances for the protection of the interests of APM but
would be valid if part of the wording of the restriction was deleted or its
duration was reduced or the range of activities covered by it was reduced
in scope then each restriction(s) shall apply with such modification(s) as
may be necessary to make it valid and effective and any such modification
shall not thereby affect the validity of any other restriction contained in
this clause.
4.6 Each of the Executive Directors further undertakes with Citrix and agrees
that:
(a) he will observe any substitute restrictions (in place of these set out
in sub-clauses 4.2 and 4.3 as Citrix may from time to time specify in
writing which are
<PAGE>
in all respects less restrictive in extent than those specified in
sub-clauses 4.2 and 4.3;
(b) if any breach or violation of any of the terms of sub-clauses 2 and 3
occurs damages alone cannot compensate for such breach of violation
and that injunctive relief is reasonable and essential to safeguard
the interests of APM and that an injunction in addition to any other
remedy may accordingly be obtained by APM. No waiver of any such
breach or violation shall be implied from the forbearance or failure
by APM to take action in respect of such breach or violation;
(c) any covenant or undertaking given by him under this clause 4 to Citrix
is given to Citrix in its capacity as trustee for APM, any parent or
other holding company of APM and any Associate of APM which has a
legitimate interest to protect.
4.7 None of the Executive Directors shall be treated as committing a breach or
violation of the provisions of this clause at any time after Closing Date
while he is acting solely in his capacity as a director or employee of any
of the APM Companies in accordance with the terms of this Agreement.
4.8 Each of Herbert and Phoenix hereby respectively agree until the 18 month
anniversary of the Closing Date not to transferencumber or dispose
(collectively, "TRANSFER") 55.5 per cent. of the Initial Consideration (as
defined in the Offer Document) he receives from the Offers (with respect to
each, his Restricted Consideration) except that he may Transfer 28 per
cent. of his Restricted Consideration on or after the 12 month anniversary
of the Closing Date. Notwithstanding the foregoing, Herbert and Phoenix
each may transfer all or any of his Restricted Consideration (a) by way of
gift to any member of his respective family or to any trust for the benefit
of any such family member, provided that any such transferee shall agree in
writing with Citrix, as a condition precedent to such transfer, to be bound
by all of the provisions of this clause 4.8 to the same extent as if such
transferee were Herbert or Phoenix, as the case may be, or (b) by will or
otherwise following his death in which event such transferee shall not be
bound by the provisions of this clause 4.8. Herbert and Phoenix each
hereby acknowledges that he shall not be entitled to Transfer any of his
Retained Consideration (as defined in the Offer Document) until such
consideration has been released to him in accordance with the provisions of
Appendix II of the Offer Document but on such release such Retained
Consideration shall not be subject to any restrictions on Transfer. These
restrictions shall cease to apply to Herbert or Phoenix if his employment
by Citrix Group or any of the APM Companies is terminated by reason of
redundancy following a decision by Citrix to withdraw from the Java
deployment market. The Restricted Consideration shall be invested by each
of Herbert and Phoenix within such reasonably prudent investment parameters
as shall be mutually agreed upon by Citrix and each of Herbert and Phoenix
prior to closing. Until the release of all of the Restricted Consideration
Herbert and Phoenix shall provide Citrix with quarterly reports of how the
Restricted Consideration has been invested.
5. UNDERTAKINGS BY CITRIX
Citrix agrees that:
<PAGE>
5.1 Non-Solicitation
If the Offer lapses Citrix agrees that for a period of two years from the
date hereof, it shall not:
(a) solicit, induce or recruit any of the employees of the APM Companies
to leave their employment; or
(b) hire any of the APM Companies former or current employees, except that
the foregoing prohibition on hiring shall not apply with respect to
any former employee whose employment was terminated without cause or
to any former employee whose employment terminated prior to 30 June
1998; or
(c) use any of the confidential information now or hereafter received or
obtained with respect to any of the business or operations of the APM
Companies.
5.2 COBRA
Citrix acknowledges the obligations of Digitivity, Inc. (and APM as parent
of Digitivity, Inc.) under United States Federal law to provide, to the
extent possible, COBRA benefits to all United States employees of
Digitivity, Inc. After Closing Date, Citrix shall cause Digitivity, Inc.
to offer or shall itself offer COBRA benefits to all United States
employees of Digitivity, Inc.
6. UNDERTAKINGS BY ALL PARTIES
Each of the Parties agrees that:
6.1 Reasonable Endeavours
Subject to the terms and conditions of this Agreement, such Party will use
his reasonable endeavours to take, or cause to be taken, all actions and to
do, or cause to be done, all things necessary or desirable under applicable
laws and regulations to consummate the transactions contemplated by this
Agreement or the Offers such that the Closing Date shall occur on or prior
to 1 July 1998. Each of the Parties agrees that he shall use all reasonable
endeavours, after the Closing Date, to execute and deliver such other
documents, certificates, agreements and other writings as may be reasonably
necessary in order to consummate or implement expeditiously the
transactions contemplated by this Agreement or the Offers; provided that
this does not involve such party incurring substantial expenditure.
6.2 Certain Filings
Each of the Executive Directors and Citrix shall co-operate with each
other:
(a) in determining whether any action by or in respect of, or filing with,
any governmental body, agency, official or authority is required, or
any actions, consents, approvals or waivers are required to be
obtained from parties to any
<PAGE>
material contracts, in connection with the consummation of the
transactions contemplated by this Agreement or the Offers; and
(b) in taking such actions or making any such filings, and furnishing any
information required in connection therewith and seeking timeously to
obtain any such actions, consents, approvals or waivers;
provided that this does not involve such party incurring substantial
expenditure.
6.3 Public Announcements
(a) None of the Parties shall issue prior to the Closing Date any press
release or make any public statement with respect to this Agreement or
the Offers or the transactions contemplated hereby or thereby without
the prior written consent of the other Parties save as may be required
by applicable law or regulation (including regulations of the Nasdaq
Stock Market).
(b) A Party shall be deemed to have given his written consent to any such
proposed press release or public statement if he shall fail to object
in writing within 24 hours of receipt of the other Party's proposed
press release or written description of its proposed public statement.
7. TERMINATION
7.1 Automatic Termination
This Agreement shall automatically terminate in the event that the Offers
lapse.
7.2 Survival
The provisions of clauses 3.7, 5.1, 6.3, 8, 9.1, 9.3, 9.5, 9.8 and 9.9
together with the Non-Disclosure Agreement shall survive any termination
hereof.
8. LIABILITY
8.1 General
(a) If this Agreement is terminated (including in circumstances where the
Offers are not declared or do not become wholly unconditional for any
reason) or is rescinded, none of the Parties shall have any liability
of any nature whatsoever to any of the other Parties either under this
Agreement or under the Offers or under any of the agreements entered
into pursuant to or as contemplated by this Agreement or by the Offer
Document and whether to recover damages or compensation or otherwise
and whether under breach of contract to make restitution or under any
statute save in relation to any of the provisions of clauses 3.7 and
5.1 of this Agreement.
(b) Until such termination or rescission, each of the Parties shall comply
in all respects with its obligations under this Agreement, the Offers
and each of the agreements entered into pursuant or as contemplated by
this Agreement,
<PAGE>
including, but not limited to, such obligations of performance as
would facilitate the consummation of the transactions contemplated
hereby or thereby.
8.2 If the Offers become or are declared unconditional in all respects and
Closing takes place:
(a) none of the Parties shall have any rights or remedies of any nature
whatsoever against any of the other Parties under this Agreement and
whether to recover damages or compensation or otherwise and whether
for breach of contract or to make restitution or under any statute or
otherwise save in relation to any of the provisions of clauses 3.7, 4,
5.3 or 5.4;
(b) none of the Parties shall have any rights or remedies of any nature
whatsoever against APM in respect of the Offers or under this
Agreement in circumstances which would entitle Citrix to exercise its
remedies under Part 2 of the Appendix II of the Offer Document.
8.3 The statements set out in part 2 of the Appendix III of the Offer Document
("the APM Statements") shall not be construed as being any form of
warranty, representation, undertaking or covenant or by any of the Non-
Directors or Executive Directors or by APM conferring upon Citrix any
rights or remedies; provided that the foregoing is without prejudice to
Citrix's rights in respect of the APM Statements as provided for in Part 2
of Appendix II of the Offer Document.
8.4 Each of the Parties acknowledges that it does not enter into this Agreement
in reliance on any of the warranties, representations or undertakings
howsoever or to whomsoever made except in so far as embodied in this
Agreement, subject to this clause 8.
8.5 For the avoidance of doubt, the provisions of this clause 8 shall not apply
to release a Party from liability in the case of fraud on the part of such
party.
9. MISCELLANEOUS
9.1 Notices
All notices, requests and other communications to either party hereunder
shall be in writing (including telecopy or similar writing) and shall be
given,
if to Citrix, to: with a copy to:
Citrix Sytems, Inc. Testa, Hurwitz & Thibeault LLP
Attn: Daniel P Roy Attn: George W Lloyd
6400 NW 6th Way High Street Tower
Fort Lauderdale 125 High Street
Florida 33309 Boston, Massachusetts 02110
Telecopy: 001 954 267 2503 Telecopy: 001 617 248 7100
<PAGE>
if to the Directors: with a copy to:
to each of them at his address Hewitson Becke + Shaw
as set out in the Schedule Attn: Bridget Kerle
Shakespeare House
42 Newmarket Road
Cambridge CB5 8EP
Telecopy: 011 44 1223 316511
9.2 Amendments: No Waivers
(a) Any provision of this Agreement may be amended or waived prior to the
Closing Date or the termination of this Agreement if such amendment or
waiver is in writing and signed by or on behalf of the Parties.
(b) No failure or delay by any Party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege.
9.3 Expenses
(a) Subject to sub-clause (a) below, if this Agreement is terminated, each
Party shall pay his own expenses incurred in connection with this
Agreement together with its Exhibits, and the Offer Document,
including without limitation the fees and expenses of his or its
professional advisers.
(b) If the Offers are closed in accorance with clause 2.6 Citrix shall pay
the reasonable expenses of all of the Parties in connection with this
Agreement, together with its Exhibits and the Offer Document.
9.4 Successors and Assigns
The provisions of this Agreement shall be binding upon and inure to the
benefit of the Parties and their respective successors and assignees;
provided that no party may assign, delegate or otherwise transfer any of
his or its rights or obligations under this Agreement without the consent
of the other Parties,except that Citrix may transfer or assign, in whole or
from time to time in part, to one or more of its Associates, its rights
under this Agreement, but no such transfer or assignment will relieve
Citrix of its obligations hereunder. The employees of Digitivity, Inc. are
third party beneficiaries of the Agreement entitled to bring an action to
enforce the covenant in Clause 5.2. Any Executive Director is permitted to
enforce such covenant on their behalf.
9.5 Entire Agreement
This Agreement together with its Exhibits, and the mutual Non-Disclosure
Agreement between Citrix and APM attached hereto as Exhibit 12 constitute
the entire agreement
<PAGE>
between the Parties with respect to the subject matter hereof and supersede
all prior agreements, understandings and negotiations, both written and
oral, between the Parties with respect to the subject matter hereof. No
representation, inducement, promise, understanding, condition or warranty
not set forth herein or therein has been made or relied upon by any Party .
Neither this Agreement nor any provision hereof is intended to confer upon
any Person other than the Parties any rights or remedies hereunder.
9.6 Saving
Save as otherwise expressly provided herein or in the Offer Document, the
rights and obligations of the Parties shall not be restricted by or
extinguished by the Offers becoming or being declared wholly unconditional
save to the extent performed in accordance with this Agreement.
9.7 Headings
The headings herein are included for convenience of reference only and
shall be ignored in the construction or interpretation hereof.
9.8 Counterparts
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one and the same agreement and any party
may enter into this Agreement by executing any such counterpart.
9.9 Governing Law
This Agreement shall be construed in accordance with and governed by the
laws of England.
9.10 Jurisdiction
(a) Any action or proceeding seeking to enforce any provision of, or based
on any right arising out of, this Agreement and/or the Offer Document
shall be brought against any of the parties in the High Court of
Justice, London, England and each of the parties hereby submits to the
non-exclusive jurisdiction of such court (and of the appropriate
appellate courts) in any such action or proceeding.
(b) Citrix hereby irrevocably appoints Citrix's solicitors as its agent to
accept service of legal proceedings in connection with all matters
arising out of this Agreement and the transactions contemplated by
this Agreement and agrees that any writ, judgment or other notice of
legal process in connection with any such legal action or proceedings
shall be sufficiently served if delivered to Citrix's solicitors.
This Agreement has been entered into as a deed on the date first above written.
<PAGE>
THE SCHEDULE
PART 1
THE NON EXECUTIVE DIRECTORS
Name Address
James Edwin Goodman 43 Stanton Lane
Keyworth
Nottingham
Nottinghamshire
NG12 5BE
Paul Matthew Linkstone Frew Cloverlea
Birtley Road
Bramley
Surrey
GU5 0HX
<PAGE>
PART 2
THE EXECUTIVE DIRECTORS
NAMES ADDRESSES
Scott McKenzie Metcalf 1876 Grand Teton
Milpitas
California 95035
USA
Christopher Jon Phoenix The Crofters
19 Church Hill
Camberley
Surrey GU15 2HA
Robertus Johannes van der Linden 93 Histon Road
Cottenham
Cambridge CB4 4UQ
Andrew James Herbert 35 Fairway
Girton
Cambridge
Cambridgeshire CB3 0QF
<PAGE>
Executed as a deed by )
JAMES EDWIN GOODMAN ) /s/ James Edwin Goodman,
in the presence of: ) by his attorney
Executed as a deed by )
PAUL MATTHEW LINKSTONE FREW ) /s/ Paul Matthew Linkstone Frew,
in the presence of: ) by his attorney
Executed as a deed by )
SCOTT MCKENZIE METCALF ) /s/ Scott McKenzie Metcalf
in the presence of: )
Executed as a deed by )
CHRISTOPHER JON PHOENIX ) /s/ Christopher Jon Phoenix
in the presence of: ) by his attorney
Executed as a deed by )
ROBERTUS JOHANNES VAN DER LINDEN ) /s/ Robertus Johannes Van Der Linden
in the presence of: )
Executed as a deed by )
ANDREW JAMES HERBERT ) /s/ Andrew James Herbert
in the presence of: )
<PAGE>
Executed as a deed )
on behalf of )
CITRIX SYTEMS, INC. )
by )
/s/ Mark B. Templeton
.....................................
President
Its duly authorized representative
/s/ Dan P. Roy
.....................................
Secretary
<PAGE>
EXHIBIT 2.2
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in
any doubt as to the action you should take, you should immediately consult your
stockbroker, solicitor, accountant or other independent financial adviser
authorised under the Financial Services Act 1986.
IF YOU HAVE SOLD OR TRANSFERRED all your APM shares and APM loan stock, please
send this document and the accompanying Form(s) of Acceptance and reply-paid
envelope to the purchaser or transferee or to the stockbroker, bank or other
agent through whom the sale or transfer was effected, for onward transmission to
the purchaser or transferee.
This document should be read in conjunction with the accompanying Form(s) of
Acceptance.
RECOMMENDED OFFERS
BY
CITRIX SYSTEMS, INC.
FOR
APM LIMITED
Acceptances should be despatched as soon as possible, and in any event so as to
be received no later than 3:00 pm on 29 June 1998.
The procedure for acceptance is set out on pages 21 and 22 of this document and
in the Forms of Acceptance.
Hambrecht & Quist, which is regulated by in the United Kingdom by The Securities
and Futures Authority Limited, is acting as financial adviser to Citrix in
relation to the transactions and arrangements described in this document and as
an authorised person has approved this document as an investment advertisement
for the purposes of the Financial Services Act 1986. Hambrecht & Quist will not
be responsible to any other person for providing the protections afforded to
clients of Hambrecht & Quist nor for providing advice in relation to the Offers.
BVA Associates Limited ("Broadview"), which is regulated in the United Kingdom
by The Securities and Futures Authority Limited, is acting for APM Limited and
no-one else in connection with the Offers and will not be responsible to anyone
other than APM for providing the protections afforded to customers of Broadview
or for providing advice in relation to the Offers.
-1-
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
PART I Definitions 3
PART II Letter from APM 6
Recommended Offers for APM 6
Agreement and Undertaking 6
Details of the Offers 6
Background to the Offers 7
Timetable 7
Procedure for acceptance 7
Compulsory acquisition 8
APM loan stock 8
Recommendation 8
PART III Letter from Citrix 10
Recommended Offers for APM 10
The Offers 10
Citrix's right to receive back the Retained
Consideration in certain circumstances 12
Financial Data relating to APM 14
Arrangements for APM Directors 14
Reasons for the Offers 14
Agreement and Undertaking 14
United Kingdom Taxation 15
United States Taxation 17
Conditions of the Offers 20
Expected timetable for the Offers 21
Procedure for acceptance of the Offers 21
Settlement 23
Further information 23
APPENDIX I Conditions and further terms of the Offers 24
APPENDIX II Retained Consideration 31
Part 1 - Retained Consideration and appointment of
Depositary 32
Part 2 - Citrix's right of indemnification 32
Part 3 - How claims are made by Citrix 33
Part 4 - Vendors' Representative 34
Part 5 - Limitations on liability 36
APPENDIX III Statements 38
Part 1 - Definitions 38
Part 2 - Statements relating to the business and affairs
of APM 46
EXHIBIT Selected financial data of APM for the 3 years ended 31 December
1995, 31 December 1996 and 31 December 1997
</TABLE>
-2-
<PAGE>
PART I
DEFINITIONS
The following definitions apply throughout this document unless the context
requires otherwise:
ACCEPTORS each APM shareholder by whom, or on whose behalf, a
Form of Acceptance is executed and shall include
those APM shareholders whose APM shares are acquired
by virtue of the provisions of the Articles of
Association of APM and each APM loan stock holder by
whom, or on whose behalf, a Form of Acceptance is
executed and each holder of APM share options by
whom or on whose behalf, the relevant Offer is
accepted;
AGREEMENT AND the agreement and undertaking dated 8 June 1998
UNDERTAKING among the Non-Executive Directors, the Executive
Directors and Citrix, short particulars of which are
set out on pages 14 and 15 under the heading
"Agreement and Undertaking";
APM OR THE COMPANY APM Limited (Registered No. 2300071)
APM DEFERRED ORDINARY existing issued and fully paid deferred ordinary
SHARES shares of 1 pence each in APM and any further fully
paid deferred ordinary shares of 1 pence each
unconditionally allotted or issued by APM while the
Offers remain open for acceptance;
APM DISCLOSURE the memorandum dated 15 June 1998 containing
MEMORANDUM exceptions to and qualifications of the APM
Statements;
APM GROUP APM and its subsidiaries;
APM LOAN STOCK (Pounds)2,000,000 5 per cent. convertible unsecured
loan stock due 2007 issued by APM;
APM LOAN STOCK HOLDERS holders of APM loan stock;
APM ORDINARY SHARES existing issued and fully paid ordinary shares of 1
pence each in APM and any further fully paid
ordinary shares of 1 pence each unconditionally
allotted or issued by APM while the Offers remain
open for acceptance;
APM RESTRICTED SHARES existing issued and fully paid restricted ordinary
shares of 1 pence each in APM and any further fully
paid restricted ordinary shares of 1 pence each
unconditionally allotted or issued by APM while the
Offers remain open for acceptance;
-3-
<PAGE>
APM SHARE OPTION the APM Limited Share Option Scheme 1996;
SCHEME
APM SHARE OPTIONS options granted under the APM Share Option Scheme
which subsist and have not lapsed at the date of
this document;
APM SHAREHOLDERS holders of APM ordinary shares, APM restricted
shares and APM deferred ordinary shares, as the
context may require;
APM SHARES APM ordinary shares, APM restricted shares and APM
deferred ordinary shares, as the context may
require;
APM STATEMENTS means the statements with respect to the business
and affairs of APM as set out in Part 2 of Appendix
III of this document;
APM WARRANTS warrants issued at the election of APM loan stock
holders upon conversion of APM loan stock conferring
the right to subscribe for APM ordinary shares;
APM WARRANT HOLDERS holders of APM warrants;
BOARD the board of APM
CONSIDERATION the aggregate of the Initial Consideration and the
Retained Consideration;
CITRIX Citrix Systems, Inc. whose principal place of
business is at 6400 NW 6th Way, Fort Lauderdale,
Florida, USA;
CITRIX SHARES common stock, par value $.001 per share, of Citrix;
CLOSING the closing of the Offers;
CLOSING DATE the date upon which the Offers become or are closed;
DEPOSITARY Taylor Joynson Garrett and Hewitson Becke + Shaw
acting as joint depositary under the Depositary
Agreement;
DEPOSITARY AGREEMENT an agreement to be entered into on the Closing Date
among Citrix, the Vendors' Representative (as agent
for the Acceptors) and the Depositary, for the
purposes explained in Appendix II of this document;
EXECUTIVE DIRECTORS SM Metcalf, AJ Herbert, CJ Phoenix and RJ van der
Linden;
FORM OF ACCEPTANCE the appropriate form of acceptance applicable to
each of the Offers as detailed on page 21 under the
heading "Procedure for acceptance of the Offers";
-4-
<PAGE>
INITIAL CONSIDERATION has the meaning ascribed to it on page 12 under the
heading "The Offers";
IRREVOCABLE UNDERTAKING the undertaking to accept the Offers for APM shares;
LOAN STOCK INSTRUMENTS the Loan Stock Instruments executed by APM on 20
February 1998;
OFFERS the offers by Citrix to acquire the APM ordinary
shares, the APM restricted shares, the APM deferred
ordinary shares, the APM loan stock, the APM
warrants and to make a payment for the surrender of
the APM share options contained in this document and
any extensions or amendments thereof, and "OFFER"
means any one of such offers as the context
requires;
NON-EXECUTIVE DIRECTORS PML Frew and JE Goodman;
RETAINED CONSIDERATION has the meaning ascribed to it on page 12 under the
heading "The Offers";
SIGNING DATE means 15 June 1998;
STATEMENT RELATED LOSS has the meaning ascribed to it on page 32 under the
heading "Citrix's rights of indemnification";
TAYLOR JOYNSON GARRETT all references to Taylor Joynson Garrett are to be
construed as references to Taylor Joynson Garrett
acting as agent of Citrix;
VENDORS' REPRESENTATIVE SM Metcalf (and his successors) acting as the
Vendors' Representative for the purposes set out in
Part 4 of Appendix II of this document.
IN THIS DOCUMENT, ALL CONVERSIONS BETWEEN US$ AND (Pounds) STERLING HAVE BEEN
MADE AT THE EXCHANGE RATE OF US$1.6407 TO (Pounds)1.00 STERLING BEING THE RATE
ON 2 JUNE 1998. PLEASE NOTE THAT CHANGES IN RATES OF EXCHANGE BETWEEN CURRENCIES
MAY CAUSE THE VALUE OF AMOUNTS REALISED FROM THE SALE OF INVESTMENTS TO DIMINISH
OR TO INCREASE.
-5-
<PAGE>
PART II
APM LIMITED
(Registered in England and Wales with registered number 2300071)
S M Metcalf (Chairman) Poseidon House
A J Herbert Castle Park
C J Phoenix Cambridge
R J van der Linden CB3 0RD
J E Goodman (Non-executive) United Kingdom
P M L Frew (Non-executive)
15 June 1998
To the APM shareholders, APM loan stock holders and holders of options under the
APM Share Option Scheme
Dear Sir or Madam
RECOMMENDED OFFERS FOR APM
I am pleased to be able to advise you that Citrix and APM announced on 12 June
1998 that agreement has been reached on the terms of recommended offers to be
made by Citrix for APM. Full details of the Offers are set out in this
document. I am now writing to explain the background to the Offers and the
reasons for the recommendation of your Board, as advised by Broadview, that you
accept the Offers.
AGREEMENT AND UNDERTAKING
Your Board, on 8 June 1998, entered into an Agreement and Undertaking with
Citrix, whereby Citrix has agreed to make the Offers, subject to receiving
Irrevocable Undertakings to accept the Offers, when made, from the holders of
more than 50 per cent. of the issued APM shares. Such Irrevocable Undertakings
have been received.
DETAILS OF THE OFFERS
The Offers, the terms of which are set out in Part III of this document, are
being made on the following basis:-
-6-
<PAGE>
<TABLE>
<S> <C>
For each APM ordinary share US$2.2902 in cash
For each APM restricted share US$2.2902 in cash
For each APM deferred ordinary share US$2.2902 in cash
For each (Pounds)1 of APM loan stock US$3.5234 in cash
For each (Pounds)1 of accrued interest on
the APM loan stock US$3.5234 in cash
For each APM warrant US$1.2237 in cash
For each APM share option US$2.2738 in cash
</TABLE>
In addition, Citrix has agreed to assume certain fees and expenses of the
transaction up to US$1.4 million. The Offers value APM at US$38.6 million. Ten
per cent. of the Consideration is to be retained for one year to satisfy any
claims made by Citrix under its indemnity, details of which can be found in
Appendix II of this document.
BACKGROUND TO THE OFFERS
In October 1997 Citrix approached APM to discuss the possibility of a business
relationship between the parties. The parties had various discussions about
licensing and distribution. In March 1998, it became apparent to the boards of
Citrix and APM that a combination of the two companies would enable them to
serve customers in the market better. The subsequent discussions between the
boards of Citrix and APM have culminated in these recommended Offers.
Citrix is a leader in system software for thin-client/server computing and the
boards of Citrix and APM believe that the businesses of Citrix and APM have a
strategic and complementary fit, which will allow the enlarged group access to
new product markets. The acquisition of APM is intended to provide Citrix with
key technologies and products which will enable customers to obtain a broader
array of application server technologies.
TIMETABLE
The expected timetable for the Offers is as follows:
3:00 pm on 29 June 1998 Date for return of Form(s) of Acceptance.
30 June 1998 Closing Date
7 July 1998 Latest date for wiring of Initial Consideration
PROCEDURE FOR ACCEPTANCE
Your attention is drawn to the section headed "Procedure for Acceptance of the
Offers" on pages 21 and 22 of this document and the enclosed Form(s) of
Acceptance which set out the procedures for acceptance of the Offers.
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In order to accept the Offers, you should complete and return the appropriate
Form(s) of Acceptance, together with the relevant documents of title, in
accordance with the instructions printed on it/them, so as to be received as
soon as possible, but in any event no later than 3:00 pm on 29 June 1998.
COMPULSORY ACQUISITION
The Articles of Association of APM contain provisions which enable the holder or
holders of over 50 per cent. of the APM shares to require all APM shareholders
to accept a cash offer which is recommended by the Board of APM and endorsed in
writing by an appropriate institution. Immediately following such a request,
recommendation and endorsement, that offer shall be deemed to have been accepted
by all APM shareholders and a director of APM is authorised, by the Articles of
Association of APM, to transfer the APM shares to the offeror.
Those who have given Irrevocable Undertakings to accept the Offers have stated
that if any APM shareholder has not accepted the Offers by 3:00 pm on 29 June
1998 then immediately prior to Closing they will exercise their rights as
described above following which a director of APM will execute Forms of
Acceptance regarding those APM shares in respect of which the Offers have not
been accepted. Notwithstanding the execution of Forms of Acceptance on behalf
of those APM shareholders who have not accepted the Offers, such APM
shareholders will not receive their share of the Consideration until their share
certificate(s), loan stock certificate(s), share option certificate(s) and/or
other documents of title have been received in accordance with the procedure set
out under the heading "Procedure for acceptance of the Offers" on pages 21 and
22 of this document.
APM LOAN STOCK
APM loan stock holders should note that this document constitutes formal notice
under condition 2.2.1 of Part One of the First Schedule to the Loan Stock
Instruments that the anticipated Conversion Date (as defined in the Loan Stock
Instruments) is 30 June 1998. However, an APM loan stock holder, if he wishes
to accept the Offers, need take no steps to convert his APM loan stock or
exercise his APM warrants, but should instead follow the procedure for
acceptance of the Offers. Any APM loan stock holder who does not wish to accept
the Offers should consider whether he wishes to serve a Conversion Notice (as
defined in the Loan Stock Instruments).
RECOMMENDATION
The Board of APM, which has been so advised by Broadview, considers the terms of
the Offers to be fair and reasonable. In providing advice to the Board,
Broadview has taken account of the commercial assessments of the directors of
APM. Your directors unanimously recommend APM shareholders, APM loan stock
holders and holders of APM share options to accept the Offers. Your directors
have irrevocably undertaken to accept the Offers in respect of their own
personal holdings of APM ordinary shares, APM restricted shares, APM deferred
ordinary shares, APM loan stock and accrued interest, APM warrants and APM share
options representing 24.11 per cent, of APM ordinary shares, 88.53 per cent, of
APM restricted
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<PAGE>
shares, 26.50 per cent. of APM deferred ordinary shares, 2.94 per cent. of APM
loan stock, accrued interest and APM warrants and 36.01 per cent. of APM share
options.
Yours faithfully,
S M METCALF
CHAIRMAN
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<PAGE>
PART III
CITRIX SYSTEMS, INC.
6400 NW 6th Way
Fort Lauderdale
Florida, 33309
United States
15 June 1998
To the APM shareholders, APM loan stock holders and holders of APM share
options.
Dear Sir or Madam,
RECOMMENDED OFFERS FOR APM
Citrix and APM announced on 12 June 1998 that they have reached agreement on the
terms of the Offers to be made by Citrix for APM. This document, contains the
Offers by Citrix and should be read in conjunction with the Form(s) of
Acceptance.
Citrix has received Irrevocable Undertakings to accept the Offers from APM
shareholders holding, in aggregate:
3,445,800 APM ordinary shares representing 38.72 per cent. of the APM ordinary
shares currently in issue;
1,560,000 APM restricted shares representing 92.38 per cent. of the APM
restricted shares currently in issue; and
1,290,250 APM deferred ordinary shares representing 99.25 per cent. of the APM
deferred ordinary shares currently in issue.
THE OFFERS
Offers for APM ordinary shares, APM restricted shares and APM deferred ordinary
shares
Citrix hereby offers to acquire, on and subject to the terms and conditions set
out in this document and the Form of Acceptance, all the APM shares on the
following basis:
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FOR EACH APM ORDINARY SHARE: US$2.2902 IN CASH
FOR EACH APM RESTRICTED SHARE: US$2.2902 IN CASH
FOR EACH APM DEFERRED ORDINARY SHARE: US$2.2902 IN CASH
Offers for APM loan stock, accrued interest on APM loan stock and APM warrants
The APM loan stock holders are entitled to convert the whole of their APM loan
stock and accrued interest on their APM loan stock into APM ordinary shares upon
a sale of APM. In addition, they are entitled to acquire APM warrants which
confer a right to subscribe for APM ordinary shares. Citrix hereby offers to
acquire, on and subject to the terms and conditions set out in this document and
the Form of Acceptance, all APM loan stock, the right to interest accrued on
the APM loan stock prior to the Closing Date and all APM warrants that would be
issued upon a conversion of the APM loan stock on the following basis:
FOR EACH (Pounds)1.00 OF APM LOAN STOCK: US$3.5234 IN CASH
FOR EACH (Pounds)1.00 OF ACCRUED INTEREST ON THE APM
LOAN STOCK: US$3.5234 IN CASH
FOR EACH APM WARRANT: US$1.2237 IN CASH
(less the purchase price of (Pounds)0.65 (US$1.0665)
per APM warrant)
The Offer for APM warrants has been reduced by the purchase price of
(Pounds)0.65 (US$1.0665) per APM warrant.
In accordance with the Loan Stock Instruments, any APM loan stock that is not
sold pursuant to the Offers or converted prior to the Closing will be redeemed
at par, together with accrued interest on such loan stock, immediately following
the Closing Date.
Offers for APM share options
The holders of APM share options are entitled to exercise their vested options
upon a sale of APM. However, Citrix hereby makes an offer, on and subject to
the terms and conditions set out in this document and the Form of Acceptance, to
pay to the holders of all APM share options, both vested and unvested, the
following amounts, in consideration of the surrender of those APM share options:
FOR EACH APM SHARE OPTION: US$2.2738 IN CASH
(less the exercise price of (Pounds)0.01 (US$0.0164)
per APM share option)
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<PAGE>
The attention of holders of APM share options is drawn to the sections headed
"United Kingdom Taxation" and "United States Taxation". If an Offer for APM
share options is accepted the holder will be subject to an income tax charge on
the sums paid for the surrender of those APM share options. APM Group will be
responsible for accounting to the Inland Revenue or Internal Revenue Service (as
the case may be) in respect of that income tax charge on behalf of that holder.
Accordingly, Citrix will retain from the amount to be paid for the surrender of
APM share options to a holder of APM share options, an amount to cover such
liability so that APM Group can be placed in funds to meet its obligations.
THE OFFERS WILL NOT BE INCREASED. ACCEPTANCES OF THE OFFERS SHOULD BE RECEIVED
BY NO LATER THAN 3:00PM ON 29 JUNE 1998.
The Offers value APM at US$38.6 million. In addition, Citrix has agreed to
assume certain fees and expenses of the transaction up to US$1.4 million.
The APM shares, APM loan stock and APM warrants will be acquired and the APM
share options will be surrendered free of all liens, charges, equities,
encumbrances, rights of pre-emption and any other third party rights of any
nature and together with all rights attaching thereto at the date of the Offers
or thereafter, including the right to all dividends and other distributions
hereafter declared, paid or made.
Each Acceptor will receive cash representing 90 per cent. of the Consideration
("Initial Consideration") to which he is entitled following the Closing Date;
the balance of 10 per cent. of such entitlement to the Consideration ("Retained
Consideration") to which he is entitled will be transferred on his behalf to the
Depositary (under the terms of the Depositary Agreement, the principal terms of
which are set out in Part 1 of Appendix II of this document), for the purposes
described below under the heading "Citrix's right to receive back the Retained
Consideration in certain circumstances". All interest accruing on the Retained
Consideration will be paid to the Acceptors or Citrix, as the case may be,
whenever an amount of the principal is paid.
CITRIX'S RIGHT TO RECEIVE BACK THE RETAINED CONSIDERATION IN CERTAIN
CIRCUMSTANCES
The right of the Acceptors to receive their proportion of the whole or any part
of the Retained Consideration is subject to the right of Citrix to receive back
that consideration in satisfaction of any valid claim which Citrix may have
under the indemnity to be given by each Acceptor to Citrix in accordance with
the provisions set out in Part 2 of Appendix II of this document.
These indemnity provisions could apply if certain statements relating to the
business and affairs of APM prove not to be true as at 15 June 1998 and/or as at
the Closing Date. These APM Statements are set out in Part 2 of Appendix III of
this document.
You will note that the APM Statements are expressed to be subject to the APM
Disclosure Memorandum which contains exceptions to and qualifications of the APM
Statements. Accordingly, Citrix will not be able to make a claim against
Acceptors for indemnification under Part 2 of Appendix II of this document if
the relevant matter was disclosed to Citrix in
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<PAGE>
the APM Disclosure Memorandum or in the documents which are listed in the
schedule to the APM Disclosure Memorandum. The Acceptors' liability is also
limited by Part 5 of Appendix II of this document.
You should also note that the Executive Directors have undertaken in the
Agreement and Undertaking to inform Citrix until the Closing Date of matters
which would have rendered any of the APM Statements which are made as at the
Closing Date untrue in any material respect if known on 15 June 1998. In
addition, APM will have to deliver a supplement to the APM Disclosure Memorandum
on the Closing Date containing further information, if any, which was not
disclosed in the APM Disclosure Memorandum and which constitutes exceptions to
the APM Statements. If the Offers are closed Citrix may be entitled to make a
claim under Part 2 of Appendix II of this document if Citrix can prove that a
relevant APM Statement was untrue on 15 June 1998 and/or on the Closing Date or
if the matters disclosed to Citrix on an ongoing basis or as contained in the
supplement to the APM Disclosure Memorandum show that a relevant APM Statement
was untrue on 15 June 1998 and/or on the Closing Date (and in each case the
Citrix or the APM Group thereby suffered loss or damage).
Any Retained Consideration which is not needed to satisfy any claims or pending
claims of Citrix under the indemnity provisions relating to the APM Statements
will be released to Acceptors by the Depositary on the first anniversary of the
Closing Date. The rules governing the release of the Retained Consideration
under the Depositary Agreement are more fully described in Part 3 of Appendix II
of this document.
Acceptors should note that if Citrix were to make a claim or claims under the
indemnity this could result in the whole or part (depending on the amount of the
claim) of the Retained Consideration being held by the Depositary following the
first anniversary of the Closing Date pending resolution of the claim.
SUCCESSFUL CLAIMS BY CITRIX UNDER THE INDEMNITY COULD RESULT IN ALL OF THE
RETAINED CONSIDERATION BEING RETURNED TO CITRIX BY THE DEPOSITARY AND THEREFORE
NOT BEING DISTRIBUTED TO ACCEPTORS.
To facilitate the handling of the arrangements relating to the Retained
Consideration and any claims in relation to the indemnities, Acceptors, by
executing the Form(s) of Acceptance, thereby agree to appoint Scott Metcalf, the
present chairman of APM, as the Vendors' Representative to act on behalf of the
Acceptors. The Vendors' Representative is entitled to obtain funding from the
Retained Consideration for (i) reasonable professional fees and expenses and
(ii) certain fees and out of pocket expenses incurred by him. Accordingly, the
amount of Retained Consideration will be diminished in the event that the
Vendors' Representative requires such funding in order to deal with a claim by
Citrix. Full details of the operation of the Depositary Agreement, the
functions and powers of the Vendors' Representative and the delivery of the
Retained Consideration are set out in Appendix II of this document.
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<PAGE>
FINANCIAL DATA ON APM
A summary of selected financial data of APM for the three years ended 31
December 1995, 31 December 1996 and 31 December 1997 is attached to this
DOCUMENT AS AN EXHIBIT AND INCORPORATED BY REFERENCE HEREIN.
ARRANGEMENTS FOR APM DIRECTORS
Citrix has entered into employment contracts with A J Herbert, C J Phoenix and R
J van der Linden, all executive directors of APM, to be effective upon the
Closing Date. Citrix has also entered into a 6 month consulting agreement with S
M Metcalf, an executive director of APM, to be effective one month after the
Closing Date. These employment and consulting agreements provide for the payment
of compensation which is substantially the same as current arrangements. The
Executive Directors have also agreed with Citrix to certain non-competition and
non-solicitation of employees and customers restrictions for a period of two
years after the Closing Date with respect to the business of APM as at the
Closing Date, and for a period of six months after termination of the employment
or consulting arrangements with respect to the business of APM and Citrix as at
the date of termination. In addition, A J Herbert and C J Phoenix have agreed
with Citrix not to transfer encumber or dispose of certain portions of the
Initial Consideration they receive under the Offers for a period of up to 18
months after the Closing Date.
A J Herbert, S M Metcalf, R J van der Linden, J E Goodman and P M L Frew will
resign as directors of APM as of the Closing Date and Citrix will appoint J
Felcyn, Vice President-Finance and Administration, Chief Financial Officer and
Treasurer of Citrix, and M Boisseau, Controller of Citrix, to serve as directors
of APM along with C J Phoenix.
REASONS FOR THE OFFERS
Citrix is a leader in system software for thin-client/server computing. APM has
developed technical expertise in the secure deployment of Java applications.
Citrix is making the Offers to acquire all of the APM shares, APM loan stock and
APM warrants and making a payment for surrender of the APM share options as it
believes that, from the combination of the two companies' people, technology and
products, will emerge a strong, global thin-client server computing group.
Citrix believes that the businesses of Citrix and APM have a strategic and
complementary fit which will allow the enlarged group access to new product
markets. The acquisition of APM is intended to provide Citrix with key
technologies and products that will enable customers to obtain a broader array
of application server technologies.
AGREEMENT AND UNDERTAKING
On 8 June 1998, the Non-Executive Directors, the Executive Directors and Citrix
entered into the Agreement and Undertaking under the terms of which the Non-
Executive Directors and the Executive Directors have given certain undertakings
to Citrix in respect of the conduct of the business of APM up to the Closing
Date. It is a condition of the Offers that there is no
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<PAGE>
material breach of such undertakings prior to or at the Closing Date. The
Agreement and Undertaking also specifies the parties' obligations upon the
Offers being declared unconditional.
UNITED KINGDOM TAXATION
THE COMMENTS SET OUT BELOW ARE INTENDED AS A GENERAL GUIDE TO THE CAPITAL GAINS
TAX AND, WHERE RELEVANT, INCOME TAX POSITION UNDER CURRENT UNITED KINGDOM LAW
AND INLAND REVENUE PRACTICE OF ACCEPTORS WHO ARE RESIDENT OR ORDINARILY RESIDENT
IN THE UNITED KINGDOM AND WHO, IN THE CASE OF APM SHAREHOLDERS, HOLD THEIR APM
SHARES AS AN INVESTMENT. THE COMMENTS RELATE ONLY TO CERTAIN ASPECTS OF THE
TAXATION TREATMENT OF THE OFFERS AND EACH ACCEPTOR IS STRONGLY RECOMMENDED TO
CONSULT WITH THEIR INDEPENDENT PROFESSIONAL ADVISERS WITH A VIEW TO CONFIRMING
THEIR TAX POSITION IN THE LIGHT OF THEIR OWN INDIVIDUAL CIRCUMSTANCES.
TAXATION OF CAPITAL GAINS
APM shareholders
Liability to United Kingdom taxation in respect of capital gains on acceptance
of the Offers, if the Offers become wholly unconditional, will depend upon the
individual circumstances of APM shareholders.
APM shareholders will be treated as making a disposal of their shares for the
purposes of United Kingdom taxation of capital gains on accepting the Offers for
the Consideration. Any capital gain accruing on the disposal will be taxed at
the APM shareholder's appropriate marginal rate of tax.
APM loan stock holders
The following comments are made on the assumption that loan stock held by APM
loan stock holders does not, and will not, fall to be treated for the purposes
of United Kingdom taxation as a relevant discounted security which would, or
could, have the effect of requiring a conversion or of the loan stock to be
treated as a disposal on income account and as not within the capital gains tax
regime.
APM loan stock holders who transfer their APM loan stock to Citrix on accepting
the Offers for the Consideration will be treated as making a disposal of the APM
loan stock for the purposes of United Kingdom taxation of capital gains. Any
capital gain accruing on the disposal will be taxed at the APM loan stock
holder's appropriate marginal rate of tax.
APM loan stock holders who elect to convert their loan stock into APM ordinary
shares instead of accepting the Offer should not by reason of that conversion be
treated as having made a disposal of the APM loan stock for the purposes of
United Kingdom taxation of capital gains. However, APM loan stock holders who
convert their loan stock into APM ordinary shares will
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<PAGE>
also become entitled to subscribe for additional APM ordinary shares under the
APM warrants and should, therefore, seek independent professional advice as to
the potential United Kingdom capital gains tax consequences of the issue of
these warrants.
APM ordinary shares acquired following conversion of the loan stock, or acquired
following subscription for APM ordinary shares under the APM warrants, and which
are then transferred to Citrix for the Consideration will be treated as the
subject of a disposal for the purposes of United Kingdom taxation of capital
gains on the same basis and principles as set out above for existing APM
shareholders.
An APM loan stock holder who neither accepts the Offers nor converts his loan
stock whose loan stock is redeemed by APM at par, together with payment of
accrued interest, will be treated as having made a disposal of the loan stock on
its redemption for the purposes of United Kingdom taxation of capital gains but
no capital gain should accrue.
INCOME TAX
APM loan stock holders
Interest which has accrued in respect of the APM loan stock and which has not
been paid since the date of its issue will be treated as received for income tax
or corporation tax purposes by each APM loan stock holder on or before the
conversion, transfer or redemption of the relevant loan stock.
APM Share Option Scheme
Holders of APM share options will be liable to an income tax charge, under
Schedule E, in respect of the Consideration received or receivable for the
surrender of their options. It is expected that any income tax charge arising in
respect of the surrender of the options will be required to be accounted for to
the Inland Revenue by APM under PAYE on behalf of the option holder following
the end of the income tax month in which the release or surrender of the share
option occurs.
Although the position is not entirely clear from doubt, it is not expected that
the surrender by a holder of APM share options would give rise to a liability to
the Class I National Insurance Contribution.
RETAINED CONSIDERATION
Acceptors are likely to be treated as in receipt of taxable income in respect of
interest arising as a result of the placing on deposit of the Retained
Consideration. Acceptors should seek independent professional advice as to when
such interest will be treated as received for United Kingdom income tax or
corporation tax purposes and any United Kingdom withholding tax implications on
the payment of such interest.
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STAMP DUTY AND STAMP DUTY RESERVE TAX ("SDRT")
No stamp duty or SDRT should be payable by Acceptors as a result of accepting
the Offers.
US TAXATION
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS APPLICABLE TO UNITED
STATES PERSONS
The following is a general discussion of the principal United States federal
income tax considerations that may be applicable to (i) APM shareholders who are
"United States Persons" (each such APM shareholder, a "US shareholder") who
surrender their APM shares for Consideration pursuant to the Offers, (ii) APM
loan stock holders who are "United States Persons" who surrender their APM loan
stock for Consideration pursuant to the Offers (each such holder a "US APM loan
stock holder"), and (iii) holders of APM share options granted under the APM
Share Option Scheme who are "United States Persons" and who surrender their APM
share options for Consideration pursuant to the Offers (each such holder, a "US
option holder"), (US shareholders, US APM loan stock holders and US option
holders, collectively, "US holders".) For purposes of this discussion, the term
"United States Person" has the meaning set forth in Section 7701(a)(30) of the
United States Internal Revenue Code of 1986, as amended (the "Code"), and
includes (i) a citizen or resident of the United States, (ii) a partnership or
corporation created or organized under the laws of the United States, (iii) any
estate (other than a foreign estate within the meaning of Section 7701(a)(31) of
the Code) or (iv) any trust if (A) a court within the United States is able to
exercise primary supervision over the administration of the trust and (B) one or
more United States persons have the authority to control all substantial
decisions of the trust.
This discussion does not address United States federal income tax considerations
that may be relevant to certain APM shareholders, APM loan stock holders or
holders of APM share options in light of their particular circumstances (for
example, individuals who receive their APM shares in connection with the
performance of services, foreign corporations, individuals who are not citizens
or residents of the United States for federal income tax purposes, US holders
who are dealers in securities, US holders who do not use the cash receipts and
disbursements method of accounting or US holders who do not hold their APM
shares as capital assets). This discussion also assumes that APM is not, and
has never been, (i) a "passive foreign investment company" within the meaning of
Section 1297 of the Code, (ii) a "foreign personal holding company" within the
meaning of Section 553 of the Code, or (iii) a "controlled foreign corporation"
within the meaning of Section 957 of the Code. Although it has also been
assumed that APM is not and has not ever been a "collapsible corporation", the
matter is uncertain. If, in fact, APM is or has ever been a "collapsible
corporation", then the US federal income tax consequences to US holders may be
different than as described in this discussion and income that would have been
capital gain may, in fact, be ordinary income. In addition, the following
discussion assumes that APM is and has always been properly classified for
United States federal income tax purposes as an association taxable as a
corporation rather than a partnership, that the APM shares represent equity
rather than debt for United States federal income tax purposes, that the APM
loan stock represents debt rather than equity for United States federal income
tax purposes, that the US APM loan stock holders acquired their
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APM loan stock from APM at original issue and that no declaration of accrued and
unpaid dividends on the APM shares has been made.
The discussion, insofar as it relates to US option holders, assumes that all of
such holders received their options in connection with the performance of
services for APM and that such services were performed in the United States.
The discussion does not address the foreign earned income provisions of Section
911 of the Code, the foreign tax credit provisions of Subpart A of Part III of
Subchapter N of the Code, or any provisions of the Convention between the
Government of the United States of America and the Government of the United
Kingdom of Great Britain and Northern Ireland for the Avoidance of Double
Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income
and Capital Gains.
The discussion addresses only the principal United States federal income tax
consequences that may be applicable to (i) US shareholders of the surrender of
APM shares for Consideration, (ii) US APM loan stock holders of the surrender of
APM loan stock for Consideration, and (iii) US option holders of the surrender
of APM share options for Consideration, and does not address any tax
consequences of other transactions or events (whether or not any such
transactions or events are undertaken in connection with such exchange),
including but not limited to the tax treatment of indemnification payments,
whether pursuant to the Depositary Agreement or otherwise, that may occur in
connection with the Offers. Further, no non-US, state or local tax
considerations are addressed herein.
The discussion is based upon the provisions of the Code, regulations, rulings
and judicial decisions now in effect, all of which are subject to change. No
ruling from the United States Internal Revenue Service (the "IRS") has been
requested or will be sought, and there can be no assurance that the IRS will
take the same view of the tax consequences described below.
THE FOLLOWING IS A GENERAL SUMMARY ONLY AND DOES NOT ADDRESS EVERY SITUATION
APPLICABLE TO EACH PARTICULAR US HOLDER. US HOLDERS ARE URGED TO CONSULT THEIR
OWN TAX ADVISERS AS TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE TRANSACTIONS
DESCRIBED IN THE OFFERS, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL AND
NON-US TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN SUCH TAX LAWS.
The surrender of APM shares, APM loan stock and APM share options for
Consideration pursuant to the Offers will not constitute a reorganisation within
the meaning of Section 368(a) of the Code. Instead, the surrender of APM
shares, APM loan stock and APM share options for Consideration is intended to be
a taxable transaction for United States federal income tax purposes.
US shareholders
Upon the surrender of APM shares for Consideration pursuant to the Offers each
US shareholder will recognise capital gain or loss equal to the difference
between (i) the Consideration received pursuant to the Offers and (ii) such US
shareholder's tax basis in the APM shares surrendered; and depending on the
holding period of the APM shares surrendered by such US shareholders, any
capital gain recognised on such surrender may be taxable at
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preferential tax rates. US Shareholders are advised to consult their tax
advisers as to the application of such rates.
US APM loan stock holders
Assuming that the APM loan stock constitutes debt rather than equity for US
federal income tax purposes and that the US APM loan stock holders acquired
their APM loan stock from APM at original issue, the following tax consequences
should generally result upon the surrender of APM loan stock for Consideration
pursuant to the Offers:
(a) each APM loan stock holder will recognise ordinary income equal to the
amount of interest which is accrued on the APM loan stock as of the
date of the exchange; and
(b) each APM loan stock holder will recognise short-term capital gain or
loss equal to the difference between (i) the Consideration received
and (ii) such APM loan stock holder's tax basis in his, her or its APM
loan stock surrendered plus the amount of interest income recognised
by such holder upon surrender of the APM loan stock.
Although Citrix believes that the APM loan stock is more likely to constitute
debt rather than equity for US federal income tax purposes, if the APM loan
stock were to constitute equity the tax consequences to US APM loan stock
holders upon the surrender of APM loan stock for Consideration pursuant to the
Offers would be different and could be more favourable
If either (i) a US APM loan stock holder elects to convert such holder's loan
stock into APM ordinary shares or (ii) a US APM loan stock holder's loan stock
is redeemed by APM, then the US federal income tax consequences to such holder
upon such conversion or redemption (as the case may be) may be different than as
described above.
US option holders
Upon the receipt of Consideration by a US option holder upon the surrender of
such holder's APM share options pursuant to the Offers, a US option holder will
recognise ordinary income in the nature of compensation equal to the amount of
Consideration received. Such ordinary income will be subject to United States
withholding taxes.
In general, any gain or loss recognised by a US holder upon the conversion of
Pounds Sterling into United States dollars will be ordinary income or loss.
THE RETAINED CONSIDERATION
With regard to the Retained Consideration, it is not clear whether US
shareholders, US APM loan stock holders and US option holders will be treated as
having received the Retained Consideration on the closing of the transactions
contemplated by the Offers or upon actual distribution of the Retained
Consideration to such holders. If the Retained Consideration is treated as
having been received by such holders on the closing of the transactions
contemplated by the Offers, the entire amount of gain or ordinary income
realised by such holder may be
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included as gross income for the taxable year of such transactions. In the event
that such holder loses his, her or its right to receive part or all of the
Retained Consideration pursuant to the Offers and the Depositary Agreement, such
holder may be entitled to a loss (which in general should have the same
character as the gain, loss or ordinary income recognised on the transactions
set forth in the Offers), in the taxable year in which it is determined that
such holder is not entitled to receive such Retained Consideration.
Alternatively, in the case of a US shareholder or a US APM loan stock holder,
such holder may be entitled to report gain attributable to the Retained
Consideration on the instalment method, unless such holder elects out of such
treatment. Under the instalment method, a US shareholder or US APM loan stock
holder may be treated as having received the Retained Consideration when such
amount is released from the Depositary. Any gain will be recognised in the year
(or years) during which the Retained Consideration is released from the
Depositary. If and when all or a portion of the Retained Consideration is
released from the Depositary, it will be released together with the actual net
interest, if any, earned thereon by the Depositary. A US holder will recognise
ordinary interest income at the time of such release equal to the amount of such
interest received. Citrix expects that the interest actually earned by the
Depositary on the Retained Consideration will be sufficient to avoid imputation
of interest under the instalment sale rules.
BACKUP WITHHOLDING
Payments made to a US shareholder or a US APM loan stock holder (other than
payments which represent accrued interest) pursuant to the surrender of APM
shares for Consideration may be subject to United States "backup withholding"
tax of 31 per cent. unless such US shareholder or US APM loan stock holder
complies with certain identification requirements. Any withheld amounts
generally should be allowed as a credit against such holder's United States
federal income tax liability if a timely federal income tax return is filed. To
avoid backup withholding, each such holder must complete a Form W-9. On that
form, such holder must provide his, her or its correct taxpayer identification
number and certify under penalties of perjury that such number is correct and
that such holder is not subject to backup withholding.
CONDITIONS OF THE OFFERS
The Offers are subject to a number of conditions imposed by Citrix and these are
set out in full in Appendix I of this document. These conditions must be
fulfilled or waived by Citrix before the Acceptors will be entitled to receive
any Consideration. UNLESS AGREED OTHERWISE BY CITRIX THE FINAL DATE FOR
SATISFACTION OR WAIVER OF THESE CONDITIONS IS THE CLOSING DATE.
The principal conditions of the Offers are as follows:-
. None of the relevant APM Statements being untrue at the Closing Date such
that the circumstances giving rise to the APM Statements being untrue would
have a material adverse effect on the APM Group.
. There being no material breach by the Executive Directors or the Non-
Executive Directors of any of their obligations under the Agreement and
Undertaking.
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EXPECTED TIMETABLE FOR THE OFFERS
3:00 pm on 29 June Date for return of Form(s) of Acceptance.
1998
30 June 1998 Closing Date
By 7 July 1998 Latest date for wiring of Initial Consideration to
Acceptors.
30 June 1999 Final date for claims by Citrix against the Retained
Consideration in respect of Statement Related Loss.
PROCEDURE FOR ACCEPTANCE OF THE OFFERS
To accept the Offer for the APM ordinary shares you must complete Boxes 1, 5, 6
and sign Box 4 on the enclosed white Form of Acceptance in the presence of a
witness, who should also sign in accordance with the instructions printed
thereon.
To accept the Offer for the APM restricted shares you must complete Boxes 2, 5,
6 and sign Box 4 on the enclosed white Form of Acceptance in the presence of a
witness, who should also sign in accordance with the instructions printed
thereon.
To accept the Offer for the APM deferred ordinary shares you must complete Boxes
3 and 5, 6 and sign Box 4 on the enclosed white Form of Acceptance in the
presence of a witness, who should also sign in accordance with the instructions
printed thereon.
To accept the Offer for the APM loan stock, accrued interest on the APM loan
stock and APM warrants you must complete Boxes 1, 2, 3, 5, 6 and sign Box 4 on
the enclosed blue Form of Acceptance in the presence of a witness, who should
also sign in accordance with the instructions printed thereon.
To accept the Offer to surrender the APM share options you must complete Boxes
1, 3, 4 and sign Box 2 on the enclosed yellow Form of Acceptance in the presence
of a witness, who should also sign in accordance with the instructions printed
thereon.
Return Form(s) of Acceptance
The completed, signed and witnessed Form(s) of Acceptance together with the
share certificate(s), the loan stock certificate(s), share option certificate(s)
and/or other document(s) of title, should be returned by post or by hand to
Taylor Joynson Garrett, ref SXW/CSI5-4, Carmelite, 50 Victoria Embankment,
Blackfriars, London, EC4Y 0DX as soon as possible, but in any event so as to be
received not later than 3:00 pm on 29 June 1998. In view of possible postal
delays and to ensure arrival of Form(s) of Acceptance before 3:00 pm on 29 June
1998, Acceptors' are urged to return Form(s) of Acceptance and all accompanying
documents as early as possible. A reply-paid envelope is enclosed for your
convenience. No acknowledgement of receipt of documents will be given.
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If you are in any doubt as to the procedure for acceptance, please contact Simon
Walker at the above address or on 0171 353 1234.
Certificates not readily available or lost
Even if your share certificate(s), loan stock certificate(s), share option
certificate(s) and/or other document(s) of title is/are not readily available or
is/are lost, the Form(s) of Acceptance should nevertheless be completed, signed
and returned to Taylor Joynson Garrett at the above address so as to arrive not
later than 3:00 pm on 29 June 1998, together with any share certificate(s), loan
stock certificate(s), share option certificate(s), and/or other document(s) of
title that you have available, accompanied by a letter stating that the balance
will follow or that you have lost one or more of your share certificate(s), loan
stock certificate(s), share option certificate(s), and/or other document(s) of
title. You should then arrange for the relevant share certificate(s), loan
stock certificate(s), share option certificate(s), and/or other document(s) of
title to be forwarded as soon as possible thereafter.
If you have lost your share certificate(s), loan stock certificate(s), share
option certificate(s), and/or other document(s) of title you should then write
to Taylor Joynson Garrett, Ref SXW/CSI5-4, Carmelite, 50 Victoria Embankment,
Blackfriars, London, EC4Y 0DX, or telephone Simon Walker on 0171 353 1234 for a
letter of indemnity for lost share certificate(s), loan stock certificate, share
option certificate(s) and/or other document(s) of title which, when completed,
should be sent to Taylor Joynson Garrett at their address as shown above.
Validity of acceptances
AN ACCEPTANCE OF THE OFFERS WILL NOT BE VALID UNLESS THE FORM(S) OF ACCEPTANCE
CORRECTLY COMPLETED IN ALL RESPECTS, TOGETHER WITH THE RELEVANT SHARE
CERTIFICATE(S), LOAN STOCK CERTIFICATE(S), SHARE OPTION CERTIFICATE(S) AND/OR
OTHER DOCUMENT(S) OF TITLE, ARE RECEIVED BY 3:00 PM ON 29 JUNE 1998.
Without prejudice to the preceding paragraph and to Appendix I of this document,
Citrix reserves the right to treat as valid any acceptance of the Offers which
is not entirely in order or which is not accompanied by the relevant share
certificate(s), loan stock certificate(s), share option certificate(s) and/or
other document(s) of title. In that event, no payment of Consideration will be
made until the relevant share certificate(s), loan stock certificate(s), share
option certificate(s) and/or other document(s) of title or indemnities
satisfactory to Citrix have been received.
SETTLEMENT
Within 7 days of the Closing Date or within 14 days after receipt of a valid and
completed acceptance, whichever is the later, Citrix will wire to Acceptors the
Initial Consideration to which they are entitled together with certificates of
entitlement evidencing their ownership of the Retained Consideration, subject to
Citrix's rights as set out in this document.
Within 7 days of the Closing Date, Citrix will wire to the Depositary the
Retained Consideration. Acceptors will be sent cheques in respect of their
entitlement, if any, to the
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Retained Consideration, immediately following the first anniversary of the
Closing Date or, if later, the resolution of any disputed Citrix claims.
All amounts will be remitted to Acceptors in US dollars and Citrix will not be
responsible for any losses arising from fluctuations in the exchange rates. All
documents and remittances sent by or to Acceptors or their appointed agents will
be sent at such Acceptors' own risk. If the Offers are not closed, the Form(s)
of Acceptance, share certificate(s), loan stock certificate(s), share option
certificate(s) and/or other document(s) of title will be returned by post within
14 days of the Offers lapsing or being withdrawn to the person or agent whose
name and address is set out in the appropriate Box on the Form(s) of Acceptance
or, if none is set out, to the first named Acceptor at his/her registered
address.
FURTHER INFORMATION
Your attention is drawn to the additional information contained in the following
Appendices:
APPENDIX I Conditions and Further Terms of the Offers
APPENDIX II Retained Consideration and remedy for breach of APM
Statements
APPENDIX III Statements relating to APM
Yours faithfully,
Mark B Templeton
President
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APPENDIX I
CONDITIONS AND FURTHER TERMS OF THE OFFERS
PART 1 - CONDITIONS OF THE OFFERS
The Offers are subject to the following conditions and each Offer is conditional
upon all of the Offers becoming or being declared unconditional in all respects
simultaneously:
1. No proceedings challenging the Offers or seeking to prohibit, alter,
prevent or materially delay the Closing Date shall have been instituted by
any person before any court, arbiter or governmental body, agency or
official and be pending.
2. No court, arbiter or governmental body, agency or official shall have
issued any order, and there shall not be any statute, rule or regulation,
restraining the effective operation by Citrix of the business of APM or its
subsidiaries after the Closing Date, and no proceedings challenging the
Agreement and Undertaking, the Offers or the transactions contemplated
thereby or seeking to prohibit, alter, prevent or materially delay the
Closing Date shall have been instituted by any person before any court,
arbiter or governmental body, agency or official or be pending.
3.
(a) The Executive Directors and the Non-Executive Directors shall
have performed, in all material respects, all of their
obligations under the Agreement and Undertaking required to be
performed on or prior to the Closing Date.
(b) The APM Statements set out in Part 2 of Appendix III,
disregarding all exceptions and qualifications contained therein
relating to materiality, and disregarding all references to the
Signing Date shall be true on 15 June 1998 and/or as at the
Closing Date, as if made at and as at such date with only such
exceptions as would not in the aggregate reasonably be expected
to have a Material Adverse Effect (as agreed between Citrix and
the Executive Directors).
(c) Citrix shall have received a certificate signed by the Executive
Directors to the effect set out in sub-paragraphs (a) and (b) of
this condition 3.
4. Citrix shall have received all other documents to be provided to it on the
Closing Date pursuant to the Agreement and Undertaking.
Citrix reserves the right to waive all or any of the conditions above, in whole
or in part.
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PART 2 - FURTHER TERMS OF THE OFFERS
Each of the Offers is a separate Offer. The following further terms apply, where
the context permits, to each of the Offers. Each of the Offers and any extension
thereof is referred to in this Part 2 as the "Offer". Except where the context
otherwise requires, references in this Part 2 and in the Form(s) of Acceptance
to the Offer becoming unconditional includes references to the Offer being
declared unconditional. References in this Part 2 to "APM shareholders" shall be
construed as a reference to holders of (i) APM ordinary shares, and/or (ii) APM
restricted shares, and/or (iii) APM deferred ordinary shares, and/or (iv) APM
loan stock, and/or (v) APM warrants, and/or (vi) APM share options as
appropriate, and references to "APM shares" shall be construed as a reference to
(i) APM ordinary shares, and/or (ii) APM restricted shares, and/or (iii) APM
deferred ordinary shares, and/or (iv) APM loan stock, and/or (v) APM warrants,
and/or (vi) APM share options as appropriate.
1. ACCEPTANCE PERIOD
(a) The Offer will remain open for acceptance at least until 3:00 pm
on 29 June 1998.
(b) In the event of the Agreement and Undertaking terminating, Citrix
may withdraw the Offers by notice in writing to all APM
shareholders.
(c) Citrix reserves the right to treat as valid, in whole or in part,
acceptances of the Offer which are not entirely in order or which
are not accompanied by the relevant share certificate(s), loan
stock certificate(s), share option certificate(s) and/or other
document(s) of title.
2. ANNOUNCEMENTS
In this Appendix, references to the making of an announcement by Citrix
shall mean the posting of a letter to APM shareholders and may include the
release of an announcement by or on behalf of Citrix to the press.
3. GENERAL
(a) The Offer will lapse unless all the conditions have been
fulfilled or (if capable of waiver) waived by midnight on 1
August 1998. In the event of the Offer lapsing, the Offer will
cease to be capable of further acceptance and Citrix and APM
shareholders will cease to be bound by prior acceptances of the
Offer.
(b) If, before the Closing Date, the Offer is referred to the
Monopolies and Mergers Commission, the Offer will lapse.
(c) The expression "Offer Period", when used in this document means,
in relation to the Offer, the period commencing on 15 June 1998
and
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ending on the latest of (i) 3:00 pm on 29 June 1998; (ii) the
date on which the Offer lapses; and (iii) the Closing Date.
(d) Settlement of the consideration to which any APM shareholder is
entitled under the Offer will be implemented in full in
accordance with the terms of the Offer without regard to any
lien, right of set-off, counterclaim or other analogous right to
which Citrix may otherwise be, or claim to be, entitled as
against such shareholder and will be posted within 7 days of the
Closing Date or, if later, within 14 days of the date of receipt
of a valid and complete Form of Acceptance.
(e) The Offer is made at 3:00 pm on 15 June 1998 and is capable of
acceptance from that time; Forms of Acceptance are available at
the offices of Taylor Joynson Garrett at the address stated in
this document, from that time. The Offer is being made only by
means of this document.
(f) The terms, instructions, authorities and provisions contained in,
or deemed to be incorporated in, the Form of Acceptance
constitute part of the terms of the Offer. Words and expressions
defined in this document have the same meanings when used in the
Form of Acceptance.
(g) The Offer and all acceptances thereof and all elections pursuant
thereto and the Form of Acceptance shall be governed by, and
construed in accordance with, the laws of England.
(h) Any accidental omission to despatch this document or any notice
required to be despatched under the terms of the Offer to, or any
failure to receive the same by, any persons to whom the Offer is
made, or should be made, shall not invalidate the Offer in any
way.
(i) If the Offer does not become unconditional in all respects, the
Form of Acceptance, share certificate(s), loan stock
certificate(s), share option certificate(s) and/or other
document(s) of title will be returned by post within 14 days of
the Offer lapsing, at the risk of the person entitled thereto, to
the person or agent whose name and address is set out in the
relevant place on the Form of Acceptance or, if none is set out,
to the first-named holder at his/its registered address.
(j) All powers of attorney and authorities in the terms conferred by,
or referred to in, this Appendix or in the Irrevocable
Undertaking or in the Form of Acceptance are given to enable the
performance of the obligations of the APM shareholder concerned
under the Offer and are irrevocable.
(k) No acknowledgement of receipt of any Form of Acceptance, share
certificate(s), loan stock certificate(s), share option
certificate(s) and/or other document(s) of title will be given.
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(l) Citrix reserves the right to treat acceptances of the Offer as
valid if received by or on its behalf at any place or places
determined by it otherwise than as set out herein or in the Form
of Acceptance.
(m) All communications, notices, certificates, documents of title and
remittances to be delivered by, or sent to or from, any APM
shareholder will be delivered by, or sent to or from, them (or
their designated agents) at their own risk.
(n) All amounts will be remitted to Acceptors in US dollars and
Citrix will not be responsible for any losses arising from
fluctuations in the exchanges rates.
(o) All references in this document and in the Form of Acceptance to
29 June 1998 shall, except where the context otherwise requires,
be deemed, if the expiry date of the Offer be extended by Citrix,
to refer to the expiry of the Offer as so extended.
PART 3 - FORM OF ACCEPTANCE
Each Acceptor irrevocably undertakes, represents, warrants and agrees to and
with Citrix (so as to bind him, his personal representatives, heirs, successors
and assignees) to the effect that:
1. the execution of the Form of Acceptance shall constitute acceptance of the
Offer by such Acceptor in respect of the number of APM shares, APM loan
stock and APM share options, (as the case may be) (the "Securities")
inserted or deemed to be inserted in the relevant boxes of the Form of
Acceptance, on and subject to the terms and conditions set out or referred
to in this document and the Form of Acceptance and shall be irrevocable;
2. he is entitled to sell the Securities in respect of which the Offer is
accepted or deemed to be accepted and that such Securities are sold with
full title guarantee free from all liens, charges and encumbrances and,
save as otherwise provided herein, together with all rights attaching
thereto;
3. the execution of the Irrecovable Undertaking or the Form of Acceptance
constitutes, subject to the Offer becoming unconditional in all respects in
accordance with its terms, the irrevocable appointment by such Acceptor of
any corporate officer of Citrix and any Executive Director as such
Acceptor's attorney and an irrevocable instruction to the attorney to
execute all or any form(s) of transfer, surrender and/or other document(s)
at the attorney's discretion in relation to the Securities referred to in
paragraph 2 above in favour of Citrix or such other person or persons as
Citrix may direct, to deliver such form(s) of transfer, surrender and/or
other document(s) at the attorney's discretion together with the
certificate(s) and/or other document(s) relating to such Securities for
registration within six months of the Offer becoming unconditional in all
respects and to do all such acts and things as may in the opinion of such
attorney be necessary or expedient for the purposes of, or in connection
with, the acceptance of the Offer and to
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surrender or vest in Citrix or its nominee(s), the Securities as aforesaid
provided that the terms of this paragraph (3) shall not apply to any
Acceptor who, by virtue of his or its constitution, is expressly prohibited
from granting a power of attorney in such terms;
4. the execution of the Form of Acceptance constitutes, subject to the Offer
becoming unconditional in all respects in accordance with its terms, an
irrevocable authority and request by such Acceptor:
(a) to APM or its agents, to procure the registration of the transfer
or surrender of such Acceptor's Securities pursuant to the Offer
and the delivery of the share certificate(s), loan stock
certificate(s), share option certificate(s) and/or other
document(s) of title in respect thereof, to Citrix or as it may
direct;
(b) to Citrix or their agents or the Depositary to procure the
despatch by wire, in the case of the Initial Consideration, and
cheque, in the case of the Retained Consideration, of any
Consideration to which such Acceptor becomes entitled pursuant to
his acceptance of the Offer at the risk of such Acceptor, to the
person or agent whose name and address is set out in the relevant
box of the Form of Acceptance or, if none is set out, to the
first-named holder at his/its registered address;
(c) to Citrix or its agents to record and act upon any instructions
with regard to payments or notices which have been recorded in
the records of APM in respect of such Acceptor's holding(s) of
Securities;
5. once the Offer becomes unconditional in all respects, Citrix shall be
entitled to direct the exercise of any votes and any or all other rights
and privileges attaching to any Securities in respect of which the Offer
has been accepted or is deemed to have been accepted and the execution of
the Form of Acceptance will constitute an authority to APM from such
Acceptor to send any notice or other communication which may be required to
be sent to him as an APM shareholder, APM loan stock holder or holder of
options in APM to Citrix at its principal office and an authority to Citrix
or any person appointed by Citrix to sign any consent to short notice of a
general meeting on his behalf and/or to execute a form of proxy in respect
of such Securities appointing any person determined by Citrix to attend
general meetings of APM or its members or any class of them or any of them
or its loan stock holders (and any adjournments thereof) and to exercise
the votes attaching to or any other rights attaching to such Securities
without reference to such Acceptor on his behalf and will also constitute
the agreement of such Acceptor not to exercise any of such rights without
the consent of Citrix and the irrevocable undertaking of such Acceptor that
he will not appoint a proxy himself to attend such general meetings;
6. Citrix shall deliver to the Depositary such Acceptor's Retained
Consideration which shall be held by the Depositary on the terms of the
Depositary Agreement and on the terms of Appendix II of this document;
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7. he grants to Citrix the indemnities set out in Part 2 of Appendix II of
this document, subject to the terms of Appendix III of this document and
the APM Disclosure Memorandum;
8. he confirms the appointment of Scott Metcalf as the Vendors' Representative
to act on behalf of the Acceptors for all of the purposes and in the terms
set out in Part 4 of Appendix II of this document (in particular, such
Acceptor confirms that the Vendors' Representative is authorised and
entitled to deal with any claims made by Citrix in respect of the Retained
Consideration under Part 2 of Appendix II of this document, to receive
funding therefor and otherwise to act in accordance with the terms of the
Depositary Agreement);
9. he will deliver to Taylor Joynson Garrett at the address stated in this
document his share certificate(s) and/or loan stock certificate(s) and/or
share option certificate(s) and/or other document(s) of title in respect of
his Securities or an indemnity acceptable to Citrix, in lieu thereof, by
3:00 pm on 29 June 1998;
10. the conditions and further terms of the Offer and of this Part 3 of this
Appendix I shall be deemed to be incorporated in, and to form part of, the
Form of Acceptance, which shall be read and construed accordingly;
11. if he accepts the Offer and the Offer becomes unconditional in all
respects, such Acceptor shall do all such acts and things as shall be
necessary or expedient to surrender or to vest in Citrix or its nominees,
the Securities;
12. he agrees to ratify each and every act or thing which may be validly done
or effected by Citrix, or by any officer or director of Citrix, in exercise
of any of the powers and/or authorities hereunder;
13. if any provision of this Part 3 of this Appendix I shall in any way be
unenforceable, invalid or not operate so as to afford Citrix or any
corporate officer of Citrix or any Executive Director or the Vendors'
Representative the full benefit of the powers and/or authorities expressed
to be given herein, he shall, with all practicable speed, do all such acts
and execute all such documents as may be required to enable Citrix and/or
any corporate officer of Citrix and/or any Executive Director and/or the
Vendors' Representative to secure the full benefit of the powers and/or
authorities conferred by or referred to in this Part 3;
14. the execution of the Irrevocable Undertaking or the Form of Acceptance
constitutes his irrevocable submission, in relation to all matters arising
out of the Offers and the Form of Acceptance, to the non-exclusive
jurisdiction of the High Court of Justice in England;
15. Hewitson Becke + Shaw, whose address is Shakespeare House, 42 Newmarket
Road, Cambridge CB5 8EP, are irrevocably appointed as his agent to accept
service of legal proceedings on such Acceptor in connection with all
matters arising out of the Offers and such Acceptor agrees that any writ,
judgment or other notice of legal process in
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connection with any such legal action or proceedings shall be sufficiently
served if delivered to Hewitson Becke + Shaw; and
16. Taylor Joynson Garrett are irrevocably appointed as agent to accept service
of legal proceedings on Citrix in connection with all matters arising out
of the Offers and Citrix agrees that any writ, judgment or other notice of
legal process in connection with any such legal action or proceedings shall
be sufficiently served if delivered to Taylor Joynson Garrett.
References in this Part 3 of this Appendix I to an Acceptor shall include
references to the person or persons executing a Form of Acceptance on his behalf
and in the event of more than one person executing a Form of Acceptance thereof,
the provisions of this Part 3 shall apply to those persons jointly and to each
of them.
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APPENDIX II
RETAINED CONSIDERATION
SUMMARY
The following statements summarise the operation of the arrangements for the
Retained Consideration. The detailed terms governing the operation of these
arrangements and the rights of Citrix to be indemnified out of the Retained
Consideration are detailed in Parts 2, 3 and 4 of this Appendix II and in the
Depositary Agreement:
1. On the Closing Date, 10 per cent. of the Consideration to which Acceptors
would otherwise be entitled will be placed in the custody of the
Depositary, as an independent party. The terms under which the Depositary
will act in such capacity are set out in a Depositary Agreement. The
principal provisions of the Depositary Agreement are set out in Part I of
this Appendix II.
2. The Retained Consideration is to be held by the Depositary to provide a
pool of money against which Citrix can seek indemnification for the
purposes set out in paragraph 3 below.
3. To the extent that Citrix has evidence (or considers that it has evidence)
that a relevant APM Statement is untrue on 15 June 1998 and/or as at the
Closing Date (as the case may be) and that any such Statement has not been
disclosed against in the APM Disclosure Memorandum, it will be entitled to
make a claim for the return to it of up to the total amount of the Retained
Consideration on the terms of the indemnity arrangements set out in Part 2
of this Appendix II.
4. Citrix is entitled to seek indemnification for all damages, loss, liability
and expenses which it incurs or suffers arising out of any such APM
Statement being untrue provided and to the extent that the amount of such
damages, loss, liability and expenses in the aggregate exceeds US$500,000.
Full details of these indemnification provisions are set out in Part 2 of
this Appendix II. The provisions relating to how claims must be made are
set out in the provisions of Part 3 of this Appendix II. The maximum
liability of Acceptors under these provisions will not exceed the total
amount of the Retained Consideration plus any interest that has accrued
thereon, retained in accordance with Part 1 of this Appendix II.
5. The administration of claims will be dealt with by the Vendors'
Representative. The terms under which the Vendors' Representative will act
are set out in Part 4 of this Appendix II.
6. No claim for indemnification may be brought by Citrix in relation to the
APM Statements after the first anniversary of the Closing Date and
Acceptors will receive, following such date, such amount of the Retained
Consideration to which they are entitled as are not necessary to meet such
indemnification claims or such pending indemnification claims.
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PART 1 - RETAINED CONSIDERATION AND APPOINTMENT OF DEPOSITARY
The following is a summary of the terms of the Depositary Agreement:
1. Within 7 days of the Closing Date, Citrix will wire to the Depositary the
amount of the Retained Consideration which will be, in aggregate, 10 per
cent. of the Consideration. The Retained Consideration will be held in a
US$ denominated account in the joint names of the Depositary who will hold
such Retained Consideration for the benefit of Acceptors on the terms of
the Depositary Agreement.
2. The Depositary has agreed to act on the basis that Citrix shall be
responsible for the Depositary's professional fees and reasonable out-of-
pocket expenses.
3. If any amount of the Retained Consideration is paid to Citrix it shall be
paid, together with an appropriate proportion of the interest accrued
thereon to the date of such payment. If any amount of the Retained
Consideration is paid to the Acceptors it shall be paid, together with an
appropriate proportion of the interest accrued thereon to the date of such
payment. The Retained Consideration shall be invested by the Depositary in
accordance with agreed instructions given to it, from time to time, by
Citrix and the Vendors' Representative.
PART 2 - CITRIX'S RIGHTS OF INDEMNIFICATION
Subject to the provisions of Part 5 of this Appendix, each Acceptor agrees to
indemnify Citrix against, and agrees to hold it harmless from, any and all
damage, loss, liability and expenses (including, without limitation, reasonable
legal fees and expenses in connection with any action, suit or proceeding)
("Statement Related Loss") incurred or suffered by Citrix or the APM Group
arising out of any of the APM Statements being untrue (determined after taking
into account exceptions in the APM Disclosure Memorandum) on 15 June 1998 and/or
as at the Closing Date (as the case may be), provided that:
1. such Acceptor shall only be liable under this Part 2 of this Appendix II to
the extent that the aggregate amount of Statement Related Loss with respect
to all matters referred to in this Part 2 of this Appendix (determined
without regard to any qualification relating to materiality or Material
Adverse Effect (as defined in Part 1 of Appendix III) contained in any of
the APM Statements (other than claims arising from paragraph 24 of Part 2
of Appendix III) giving rise to the claim for indemnity hereunder) exceeds
US$500,000 and then only in respect of such excess;
2. each such Acceptor shall only be so liable in respect of any claim or
claims arising from paragraph 24 of Part 2 of Appendix III to the extent
that the aggregate amount of Statement Related Loss relating thereto
exceeds US$400,000 and then only in respect of such excess;
3. no liability shall arise under this Part 2 of this Appendix II in respect
of any individual claim which does not exceed US$5,000;
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4. such Acceptor shall be liable only to the extent of his Pro Rata Share (as
defined below) of such Statement Related Loss; and
5. such Acceptor's maximum liability under this Part 2 of this Appendix II
shall not exceed the amount of Retained Consideration plus interest which
has accrued thereon held by the Depositary on behalf of such Acceptor.
"PRO RATA SHARE" means in respect of an Acceptor, a fraction, the numerator of
which is the total amount of Retained Consideration held by the Depositary in
respect of such Acceptor pursuant to the Offers at the time the claim is made by
Citrix and the denominator of which is the aggregate amount of Retained
Consideration held by the Depositary in respect of all Acceptors pursuant to the
Offers after all of the Consideration (including the Retained Consideration) has
been paid.
PART 3 - HOW CLAIMS ARE MADE BY CITRIX
The Depositary Agreement contains the following provisions for dealing with
claims for indemnification which Citrix may make pursuant to the terms of Part 2
of this Appendix II. It should be noted that the following provisions in this
Part 3 are only a summary of the terms of the Depositary Agreement and, to the
extent that a conflict arises, the Depositary Agreement will prevail:
1. SUBMISSION OF CLAIMS
If Citrix has a claim pursuant to Part 2 of this Appendix II for which it
seeks indemnification, Citrix will deliver a written notice thereof to (i)
the Depositary and (ii) the Vendors' Representative. Such notice will
include a description of the facts upon which such claim is based (so far
as then known to Citrix) and the amount of such claim with respect thereto
(the "Notice of Claim"). No Notice of Claim requesting satisfaction of
Statement Related Loss may be submitted if any of the provisos listed in
Part 2 of this Appendix II applies to exclude the liability of the
Acceptors. If Citrix has not received a written notice of objection
("Notice of Objection") to the Notice of Claim from the Vendors'
Representative within 20 business days of receipt of the same, Citrix may
deliver a notice to the Depositary instructing the Depositary to transfer
to Citrix the amount of Retained Consideration equal to the amount of the
Statement Related Loss described in the relevant Notice of Claim. No Notice
of Claim may be served by Citrix in respect of Statement Related Loss after
the first anniversary of the Closing Date.
2. DISPUTED CLAIMS
If a timely Notice of Objection in respect of Statement Related Loss is
submitted by Citrix and Citrix and the Vendors' Representative are unable
to settle the claim within 20 business days of the date of the Notice of
Objection, in whole or in part, then Citrix may raise proceedings in the
High Court of Justice in England which shall have non-exclusive
jurisdiction in respect of any such claim. If such proceedings are not
commenced within 16 months of the Closing Date, such claim will lapse.
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3. SATISFACTION OF INDEMNIFICATION PAYMENTS
Citrix's rights to indemnification are to be satisfied by the transfer to
it of an amount of Retained Consideration equal to the relevant Statement
Related Loss.
4. PROFESSIONAL FEES AND OUT-OF-POCKET EXPENSES OF THE VENDORS' REPRESENTATIVE
The Vendors' Representative shall be entitled to require the Depositary to
make a payment to him from the Retained Consideration to fund professional
fees and expenses (including any fees arising as a result of the indemnity
referred to in paragraph 3 of Part 5 of this Appendix II) and the Vendors'
Representative of (pound)500 for each day (reduced pro rata for part days)
spent on dealing with any claims submitted by Citrix, together with out-of-
pocket expenses incurred or to be incurred by the Vendors' Representative
in connection with the operation of this Appendix II and the Depositary
Agreement.
5. RELEASE OF RETAINED CONSIDERATION
Acceptors will receive, following the first anniversary of the Closing
Date, such amount of Retained Consideration and interest to which they are
entitled as are not necessary to meet indemnification claims or pending
indemnification claims in respect of Statement Related Loss.
PART 4 - VENDORS' REPRESENTATIVE
1. Such of the APM shareholders (hereinafter together the "Majority APM
shareholders" or individually a "Majority APM shareholder") as hold a
majority of the APM shares on the Closing Date shall be entitled, from time
to time, to appoint such person as they shall in their sole discretion
decide (and to remove such person) as the Vendors' Representative, for the
purposes set out in this Part 4 of this Appendix II, by notice in writing
to Citrix signed by or on behalf of the Majority APM shareholders.
2. Each Acceptor Irrevocably Agrees:
(a) that he grants the Vendors' Representative full power and
authority on behalf of such Acceptor to (i) dispute or refrain
from disputing any claim made by Citrix in respect of the
Retained Consideration under the indemnity provisions set out in
Part 2 of this Appendix II and the Depositary Agreement; (ii)
remedy or seek to remedy the circumstances giving rise to any
Statement Related Loss; (iii) negotiate and compromise any such
claim; (iv) engage lawyers, attorneys, accountants, other
professional advisers and agents; (v) execute any settlement
agreement, release or other document with respect to such claim;
and (vi) to perform all other duties and obligations and to
exercise all rights with respect to any of the foregoing as are
set out in the Depositary Agreement;
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(b) that he grants the Vendors' Representative full power and
authority on behalf of such Acceptor to give such instructions
and to take such action or refrain from taking such action as the
Vendors' Representative deems, in his sole discretion, necessary
or appropriate to carry out the provisions of, and to consummate,
the transactions contemplated by this Part 4 of this Appendix II;
(c) Citrix shall be entitled to rely on any and all action taken by
the Vendors' Representative evidenced by a document appearing to
be signed by the Vendors' Representative without any liability
to, or obligation to inquire of, any Acceptors;
(d) a notice, validly delivered to the Vendors' Representative, of
the intimation of a claim in respect of Citrix's rights to be
indemnified under Part 2 of this Appendix II, shall be sufficient
notice and Citrix shall not be required to give notice of such
claim to such Acceptor;
(e) the authority of the Vendors' Representative hereunder shall be
effective until the date upon which no Retained Consideration is
held by the Depositary;
(f) the Vendors' Representative shall be entitled to communicate the
receipt by him of any claim from Citrix under Part 3 of this
Appendix II to Acceptors by placing an advertisement to this
effect in one national daily newspaper in the United Kingdom; and
(g) in carrying out his functions hereunder, the Vendors'
Representative shall be entitled to exercise his discretion and
shall not be obliged to consult with such Acceptor provided that
if the Vendors' Representative elects to consult with such
Acceptor such consultation shall not in any way affect the right
of the Vendors' Representative to exercise his discretion as
aforesaid and the acts of the Vendors' Representative shall in
all circumstances bind such Acceptor.
3. Any claim, action, suit or other proceeding, to enforce any right, benefit
or remedy granted to Citrix under Part 2 of this Appendix II may be
asserted, brought, prosecuted, or maintained by Citrix against the
Acceptors by service of process on the Vendors' Representative and without
the necessity of serving process on, or otherwise joining or naming, any
other party as a defendant in such claim, action, suit or other proceeding.
With respect to any matter contemplated by the appointment of the Vendors'
Representative, the Acceptors shall be bound by any determination in favour
of or against the Vendors' Representative or the terms of any settlement or
release to which the Vendors' Representative shall become a party.
4. The Vendors' Representative shall not be liable to any Acceptor with
respect to any act or omission taken or omitted to be taken by the Vendors'
Representative pursuant to this Part 4 of this Appendix II, except to the
extent that the relevant loss results from such Vendors' Representative's
gross negligence or wilful misconduct.
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PART 5- LIMITATIONS ON ACCEPTORS' LIABILITY
The liability of each Acceptor under, arising out of, or in connection with the
indemnification rights of Citrix set out in Part 2 of this Appendix II shall be
limited in each of the following respects:
1. Citrix shall have no rights under Part 2 of this Appendix II:
(a) to the extent of any Statement Related Loss in respect of which
Citrix and/or APM is entitled to make a claim under any policy of
insurance;
(b) to the extent that such liability would not have arisen but for
an act or omission before Closing Date by Citrix or by APM in
accordance with Citrix's directions;
(c) to the extent that such liability would not have arisen but for a
voluntary act or failure to act, omission or transaction on the
part of Citrix and/or any APM Group company after the Closing
Date, otherwise than in the ordinary course of business of APM
Group;
(d) in respect of any state of affairs which has arisen after 15 June
1998 and shall have rendered any APM Statement untrue as at the
Closing Date, to the extent that Citrix shall have consented in
writing to the bringing about of such state of affairs pursuant
to clause 3 of the Agreement and Undertaking;
(e) to the extent that such liability would not have arisen but for
any alteration or enactment made after the Closing Date of any
Act of Parliament or Statutory Instrument or any change or
interpretation of any law following the Closing Date or any
change in administrative practice of any government, governmental
department, agency or regulatory body or any increase in the
rates of taxation or alteration in methods of applying or
calculating taxation or any imposition of taxation not in effect
at the Closing Date or any change in accounting or taxation
policy or practice of Citrix or APM, including the method of
submission of taxation returns introduced or having effect after
the Closing Date.
2. Nothing in this Offer document shall be construed as a warranty by the
Acceptors concerning the application to the Offers of the merger control
provisions of the Fair Trading Act 1973, Council Regulation 4064/89 (as
amended by Council Regulation (EC) No. 1310/97) or the merger control laws
of any other jurisdiction, or concerning any government licence,
authorisation, consent, approval or requirement thereunder.
3. Citrix shall provide the Vendors' Representative and his professional
advisers with all such information and reasonable assistance as may be
reasonably requested by them, including reasonable access to all relevant
books, records, documents and other information and personnel as shall be
reasonably required for the purpose of evaluating
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what action to take in respect of such matter. If such matter in question
is in connection with a claim made by, or a liability of, a third party,
Citrix shall take, and shall cause APM or a member of the APM Group to
take, such action as the Vendors' Representative may reasonably request to
avoid, dispute, resist, appeal, compromise or defend the relevant claim or
liability (including giving the Vendors' Representative the conduct of any
proceedings or negotiations with third parties and employing professional
advisers of its own choice), provided that the Vendors' Representative
shall have first agreed that the Retained Consideration shall be used to
indemnify and to free and relieve and hold harmless Citrix and, if
appropriate, APM or a member of the APM Group from and against any
Statement Related Loss, cost, expenses or liability reasonably incurred by
Citrix and/or APM or a member of the APM Group as a result of such action
being taken.
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APPENDIX III
DISCLAIMER
The APM Statements relating to the APM Group set out in Part 2 of this Appendix
III are made or given for the sole purpose of providing the rights and remedies
to Citrix specified in Appendix II in the event that any of the APM Statements
prove to be untrue at 15 June 1998 and/or at the Closing Date. The APM
Statements set out in Part 2 of this Appendix III are not made or given to any
person other than Citrix.
Neither APM nor any of its subsidiaries nor any of their respective directors or
employees accepts any responsibility of any kind whatsoever whether in contract
or to make restitution or under any statute to any person whatsoever, including
without prejudice to the foregoing generality, any person who is or who may in
future be a shareholder in APM, in respect of the APM Statements set out in Part
2 of this Appendix III save to the extent provided in Appendix II.
PART I
DEFINITIONS AND INTERPRETATION
In this Appendix III:
1. DEFINITIONS
"ACCOUNTING REQUIREMENTS" means the accounting requirements of the
Companies Act, SSAPs, FRSs, abstracts of the Urgent Issues Task Force, any
other requirement of a United Kingdom accounting body having mandatory
effect and other generally accepted accounting principles and practices in
the United Kingdom;
"ACCOUNTS" means the consolidated audited accounts of APM for the financial
period ended on the Account Date including the auditors' and directors'
reports, the audited profit and loss account, the balance sheet and the
notes thereto;
"AFFILIATE" means, in respect of any person:
(a) any person connected with such person (and "connected with" bears the
meaning set out in section 839 of ICTA); and/or
(b) any company under the control of such person (and "control" bears the
meaning set out in section 840 of ICTA); and/or
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(c) any associated company of such person (and "associated company" bears
the meaning set out in section 416 of ICTA);
"ACCOUNTS DATE" means 31 December, 1997;
"AGREEMENT AND UNDERTAKING" means the agreement and undertaking dated June
1998 among the Non-Executive, the Executive Directors and Citrix;
"APM'S CONFIDENTIAL INFORMATION" means all technical, commercial and other
confidential information and techniques relating to the Business and the
Software including (without prejudice to the generality of the foregoing)
the Source Code and the Supporting Material;
"APM DISCLOSURE MEMORANDUM" means the disclosure memorandum relating to APM
including any document annexed thereto, as set out in Exhibit 6 to the
Agreement and Undertaking;
"APM'S IPRS" means APM's non-Product IPRs and APM's Product IPRs;
"APM'S NON-PRODUCT IPRS" means all Intellectual Property Rights owned by or
licensed to APM as a result of its entering into the Research Contracts and
the Consultancy Contracts or its performance of obligations or exercise of
rights under them;
"APM'S PRODUCT IPRS" means all Intellectual Property Rights owned by or
licensed to APM other than APM's non-Product IPRs;
"BUSINESS" means the business of research and consulting in advanced
information technology systems and software, diversifying into the
commercial production of software designed to provide protection in
internet/intranet environment;
"BUSINESS DAY" means any day other than a Saturday, Sunday or any day which
is a public holiday in England;
"CAA" means the Capital Allowances Act 1990;
"CLOSING" means the closing of the sale and purchase of the APM shares;
"CLOSING DATE" means the date of the Closing;
"COMPANIES ACT" means the Companies Act 1985;
"CONSULTANCY CONTRACTS" means the contracts between APM and other entities
contained in Section 3 of Part B of the Schedule to the APM Disclosure
Memorandum;
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"COMPUTER SYSTEM" means the computer system, including all its equipment,
hardware, firmware, software and accessories, used in the Business;
"CURRENT DATE" means for any computer system at any given time when that
system is operating, the date which that computer takes to be, and uses as,
the current date at that particular time;
"CUSTOMER CONTRACTS" means all VAR Agreements and all outward licence,
maintenance, technical support and other agreements relating to the
Software or any other Products to which APM is a party, and pursuant to
which no software is licensed other than in object code form only and on a
non-exclusive basis;
"CUSTOMERS" means the licensees of the Software or any other customers of
APM including but not limited to those listed in the APM Disclosure
Memorandum;
"ENCUMBRANCE" means any mortgage, charge, security interest, lien, pledge,
hypothecation, assignment by way of security, equity, claim, right of pre-
emption, option, charge, covenant, restriction, reservation, lease, trust,
order, decree, judgment, title defect (including retention of title claim),
conflicting claim of ownership or any other encumbrance of any nature
whatsoever (whether or not perfected, other than liens arising by operation
of law);
"ENVIRONMENTAL LAWS" means all laws of the United Kingdom, United States
and elsewhere relating to pollution or the protection of the environment,
or to health and safety matters (including laws relating to workers and
public health and safety, to emissions, discharges or threatened releases
of Hazardous Materials into the environment and to the production,
processing, distribution, management, use, treatment, storage, burial,
disposal, transport or handling of any Hazardous Materials) and all bye-
laws, codes, regulations, directives, decisions, decrees, demands or demand
letters, injunctions, notices, orders, plans or recommendations, issued,
promulgated or approved thereunder or in connection therewith;
"EXECUTIVE DIRECTORS" means SM Metcalf, AJ Herbert, CJ Phoenix and RJ van
der Linden;
"FINANCIAL YEAR" shall be construed in accordance with section 223 of the
Companies Act;
"FRSs" means the financial reporting standards established by the
Accounting Standards Board Limited;
"HAZARDOUS MATERIALS" means wastes, pollutants, contaminants, petroleum,
petroleum products, dangerous, hazardous or toxic substances and materials
(including liquids, solids, gases, ions and noise and substances) which may
be harmful to human health or other life or the environment or a nuisance
to any
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person or which may make the use or ownership of any affected land or
property more costly or onerous;
"ICTA" means the Income and Corporation Taxes Act 1988;
"IHTA" means the Inheritance Tax Act 1984;
"INTELLECTUAL PROPERTY RIGHTS" means all patents, copyright, rights in
relation to databases, design right, registered designs, Trade Marks, know-
how, rights in trade secrets, confidential information and all other
intellectual property rights throughout the world for the full term of the
rights concerned (including but not limited to the rights specifically
identified in the APM Disclosure Memorandum) and including:
(a) all registrations and pending registrations relating to any such
rights and the benefit of any pending applications for any such
registrations;
(b) all reversions, extensions and renewals of any such rights; and
(c) all accrued rights of action in relation to such rights
(including the right to sue for and recover damages for past
infringements);
"KNOW-HOW" means all technical, commercial and other information
experience, knowledge, skill, know-how and techniques owned by APM
including (without prejudice to the generality thereof) drawings, formulae,
test reports, operating and testing procedures, practices, instruction
manuals, tables of operating conditions, lists and particulars of
customers, marketing methods and procedures and advertising material other
than those materials which are clearly intended for the benefit of the
public domain;
"MANAGEMENT ACCOUNTS" means the management accounts of APM comprising the
profit and loss account and balance sheet for the period from the Accounts
Date to the Management Accounts Date;
"MANAGEMENT ACCOUNTS DATE" means 31 May 1998;
"MATERIAL ADVERSE CHANGE" means a material adverse change in the business,
assets, financial condition, results of operation or (to the knowledge of
the Executive Directors), prospects of APM and its Subsidiaries taken as a
whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the business,
assets, financial condition, results of operations, or prospects of APM and
its Subsidiaries taken as a whole.
"MILLENNIUM-COMPLIANT" means, in relation to any computer software, that
neither its performance nor its functionality is adversely affected by
dates prior to, during or after the year 2000, and in particular:
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(a) no value for Current Date will cause any interruption in
operation of the Software;
(b) no value for any date element in any data used as input by the
Software will cause any interruption in the operation of the
software, which will either correctly interpret the date element
(where it is a valid date) or else detect and report it as an
invalid date and continue processing accordingly;
(c) date-based functionality shall behave consistently for dates
prior to, during and after the year 2000 and produce correct
results in accordance with the Software's specifications;
(d) in all interfaces and data storage, the century in any date will
be specified either explicitly or by unambiguous algorithms or
inferencing rules; and
(e) the Year 2000 will be recognised as a leap year;
"NON-DISCLOSURE AGREEMENTS" means the contracts between APM and other
entities (i) contained in Section 6 of Part B of the Schedule to the APM
Disclosure Memorandum, or (ii) not so contained but in substantially the
form of APM's standard non-disclosure agreement repeatedly appearing in
that Section;
"PRODUCTS" means products of APM, including any which comprise any software
or materials within part (a) of the definition of Supporting Materials;
"PROPERTIES" means:
(a) first and second floor offices and Poseidon Place (otherwise
known as Block B), Castle Park, Cambridge as more particularly
described in and denoted by two sub underleases (of first and
second floors respectively) both dated 2 March 1998 made between
SAIC Limited (1) and APM (2); and
(b) property leased to APM at 4410 El Camino Real, Los Altos,
California;
"RESEARCH CONTRACTS" means the contracts between APM and other entities
contained in Section 1 Part B of the Schedule to the APM Disclosure
Memorandum;
"SIGNING DATE" means 15 June 1998;
"SOFTWARE" means all computer software described and detailed in the
Software Statement including (even if not so listed) (i) any related
utilities and interfaces, and (ii) on-line help software, and also
including all other versions of any of the foregoing, but excluding any
Third Party Software;
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"SOFTWARE STATEMENT" means the document titled 'Statement of Product
Derivation and Ownership' listed as document 1 in Section 8 of Part B of
the Schedule to the APM Disclosure Memorandum, together with any Appendices
to it which are referenced in it and also appear in that Section 8;
"SOURCE CODE" means the source code versions of the Software, together with
all manuals and materials necessary to maintain and update the Software
(and in machine-recordable form);
"SSAPs" means the statements of standard accounting practice adopted by the
Accounting Standards Board Limited;
"SUBSIDIARY" means a subsidiary company as defined in section 736 of the
Companies Act;
"SUPPLIER" means any supplier (other than utilities in respect of the
supply of services in the ordinary and normal course of their business to
their general body of customers) or sub-contractor of APM in connection
with the Business with whom APM has traded during the twelve months
immediately prior to Closing Date;
"SUPPORTING MATERIAL" means:
(a) all functional and technical design documentation, programmer
documentation and all other documents (in electronic, hard copy
or any other format) relating to design or workings of the
Software, and including without limitation:
(i) all documentation of the overall architectural design of
the Software;
(ii) all descriptions of the design of each module contained
in all Software;
(iii) all descriptions of the data models used in both memory
and on disk for all Software;
(iv) all materials describing the relation between any
software and any Third Party Software (including
"shareware") embedded in or bundled with it;
(b) all information relating to the support and maintenance of the
Software, including details of all bugs known to the Executive
Directors in the Software or any of it and any work to correct
any such bugs;
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(c) all other software, manuals, text, documents, designs, artwork,
photographs, information and other material devised or used by
the Business in relation to the Software (but not including the
Third Party Software); and
(d) all designs, drafts, documents and other works underlying any of
the items listed at (a) to (d) above
and including all items specifically listed in the Software Statement;
"TCGA" means the Taxation of Chargeable Gains Act 1992;
"TAXATION" means all forms of taxation, charges, duties, imposts, levies
and rates whenever imposed and whether of the United Kingdom, the United
States, or elsewhere and whether chargeable directly or primarily against
or attributable directly or primarily to APM or to any other person,
including without limitation income tax, withholding taxes, corporation
tax, state income and franchise tax, municipal tax, user fees, advance
corporation tax, capital gains tax, capital transfer tax, inheritance tax,
value added tax, federal or state sales taxes, customs duties, excise
duties, community charges, stamp duty, stamp duty reserve tax, national
insurance, social security or other similar contributions, together with
any interest, penalty or fine in connection therewith;
"THIRD PARTY AGREEMENTS" means the agreements for the use, maintenance or
other dealing by APM with Third Party Software or any third party
Intellectual Property Rights as listed in the APM Disclosure Memorandum;
"THIRD PARTY SOFTWARE" means all computer programs and software owned by
persons other than APM and identified as so owned either in the Software
Statement or in Section 4 of Part B of the Schedule to the APM Disclosure
Memorandum;
"TRADEMARKS" means registered or unregistered trademarks, service marks and
applications therefor and all other business names, brand names, devices,
logos, get up and signs (and whether or not registered or applied for)
together with all goodwill associated with or symbolised by any of the
foregoing;
"USER MANUALS" means the user manuals relating to the Software;
"VAR AGREEMENT" means the value added reseller agreements contained in
Section 2 of Part B of the Schedule to the APM Disclosure Memorandum;
"VAT" means value added tax;
"VATA" means the Value Added Tax Act 1994.
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2. KNOWLEDGE OF THE EXECUTIVE DIRECTORS
Where any of the Statements is qualified by the expression "so far as the
Executive Directors are aware" or any similar expression, each of the
Executive Directors shall be deemed to have the awareness of each of the
other Executive Directors and to have the awareness that would be
attributed to a competent and reasonable director in the relevant
circumstances.
3. DIGITIVITY, INC.
Each of the APM Statements shall be deemed to be repeated in respect of
Digitivity, Inc. save insofar as they are qualified by disclosures in the
APM Disclosure Memorandum.
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PART 2
STATEMENTS RELATING TO THE BUSINESS AND AFFAIRS OF THE APM GROUP
PART A - APM
1. CONSTITUTION
1.1 APM is a private company limited by shares duly incorporated and
validly existing under the laws of England and has all corporate
powers and all governmental licenses, authorisations, consents
and approvals required to carry on its business as now conducted.
A true, complete and accurate copy of the memorandum and articles
of association of APM and the resolutions required to be filed
with the Registrar of Companies (save where already reflected in
the such memorandum and articles) are annexed to the APM
Disclosure Memorandum. Such documents contain full details of the
rights and restrictions attached to the share capital of APM, and
all such resolutions have been properly passed as resolutions of
APM.
1.2 The register of members and statutory books of APM contain
complete, true and accurate records of the members of APM and all
the other information which they are required to contain under
the Companies Act and are fully, properly and accurately drawn up
to the date of this agreement and comply with all the
requirements of the Companies Act and all returns, particulars,
resolutions and other documents required to be delivered by APM
to the Registrar of Companies have been duly delivered within the
required time limits and no fines or penalties are outstanding or
known to be due.
1.3 At the Signing Date APM has not received any notice of any
application or intended application for the rectification of its
register of members.
1.4 The only directors of APM are the persons whose names are listed
in the APM Disclosure Memorandum and APM has no alternate or
shadow directors.
1.5 APM has not provided any financial assistance within section 151
of the Companies Act or otherwise directly or indirectly for the
purchase or the proposed purchase of its shares.
1.6 APM has not purchased or redeemed any of its own shares.
1.7 APM has no assets outside the United Kingdom nor does it have a
branch, agency or place of business or any permanent
establishment (as that expression is defined in the relevant
double taxation relief orders current at the date of this
agreement) outside the United Kingdom.
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1.8 Other than Subsidiaries, APM has no shares or other securities in
any other company and no interest in any other business and has
not agreed to acquire any such shares, securities or interest.
2. SUBSIDIARIES
(a) Each Subsidiary is a corporation duly incorporated and validly
existing under the laws of its jurisdiction of incorporation and
has all corporate powers and all governmental licenses,
authorisations, consents and approvals required to carry on its
business as now conducted. The Subsidiaries of APM and their
respective jurisdictions of incorporation are: ANSA Limited and
Digitivity Limited, each of which is incorporated under the laws
of England and Wales and Digitivity, Inc., which is incorporated
under the laws of Delaware. True and complete copies of the
organisational documents for each of the Subsidiaries are annexed
to the APM Disclosure Memorandum.
(b) All of the issued shares of, or other ownership interests in,
each Subsidiary, are owned by APM, directly or indirectly, free
and clear of any Lien and free of any other limitation or
restriction (including any restriction on the right to vote, sell
or otherwise dispose of such shares or other ownership
interests). There are no (i) outstanding securities of APM or any
Subsidiary convertible into or exchangeable for shares or other
voting securities or ownership interests in any Subsidiary or
(ii) outstanding options or other rights to acquire from APM or
to require any Subsidiary to issue, any shares, voting securities
or ownership interests in, or any securities convertible into or
exchangeable for any shares, voting securities or ownership
interests in, any Subsidiary (the items in clauses (i) and (ii)
being referred to collectively as the "Subsidiary Securities").
There are no outstanding obligations of APM or any Subsidiary to
repurchase, redeem or otherwise acquire any Subsidiary
Securities.
(c) Neither ANSA Limited nor Digitivity Limited has any assets,
liabilities nor has ever traded.
3. CONSENTS
No consent, approval, waiver or other action by any Person under any
contract, agreement, indenture, lease, instrument or other document to
which APM is a party or by which it is bound is required or necessary for
the execution, delivery and performance of the Agreement and Undertaking or
the consummation of the transactions contemplated by the Agreement and
Undertaking.
4. NON-CONTRAVENTION
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The consummation of the transactions contemplated by the Agreement and
Undertaking does not and will not (i) contravene the memorandum and
articles of association of APM, (ii) contravene or constitute a violation
of any provision of any law, regulation, judgment, injunction, order or
decree binding upon or applicable to APM, (iii) constitute a default under
or give rise to any right of termination, cancellation or acceleration of
any material right or material obligation of APM or give rise to any right
on the part of any person to withdraw any benefit to which APM is entitled
under any provision of any agreement, contract or other instrument binding
upon APM or any permit held by APM or (iv) result in the creation or
imposition of any Encumbrance on any asset of APM.
5. SHARES
5.1 Details of APM's share capital at the Signing Date are accurately
set out in the APM Disclosure Memorandum. All issued shares of
APM have been duly authorised and validly issued and are fully
paid. No right to acquire shares in APM will be granted by APM
after the Signing Date.
5.2 Details of share options granted by APM prior to the Signing Date
are accurately set out in the APM Disclosure Memorandum. No share
options will be granted by APM after the Signing Date.
5.3 Except as set forth in the APM Disclosure Memorandum, there are
no (i) issued shares, loan capital or other interests giving a
right to participate in the distribution of the assets or
revenues ("Relevant Interests") of APM, (ii) outstanding
securities of APM convertible into or exchangeable for shares,
loan capital or Relevant Interests of APM or (iii) outstanding
options or other rights to subscribe for any shares, loan capital
or Relevant Interests of APM (the items in clauses (i), (ii) and
(iii) being referred to collectively as the "Company
Securities"). Except as set forth in the APM Disclosure
Memorandum, there are no outstanding obligations of APM, actual
or contingent, to issue or deliver or to repurchase, redeem or
otherwise acquire any Company Securities.
6. THE ACCOUNTS
6.1 A true, complete and accurate copy of the Accounts is annexed to
the APM Disclosure Memorandum.
6.2 The Accounts and the audited accounts of APM for each of the
three years immediately preceding its financial period ended on
the Accounts Date were prepared under the historical cost
convention and complied with and were prepared in accordance with
all applicable Accounting Requirements.
6.3 In accordance with applicable Accounting Requirements the
Accounts:
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(a) give a true and fair view of the assets and liabilities of
APM as at the Accounts Date and of its profits or losses for
the financial period ended on the Accounts Date;
(b) fully disclose all the assets of APM as at the Accounts
Date;
(c) make proper provision for, reserve for or disclose, as
appropriate, all liabilities, whether actual, contingent,
unquantified or disputed, all capital commitments, whether
actual or contingent, and all bad or doubtful debts of APM
as at the Accounts Date; and
(d) make proper provision for or reserve for deferred Taxation
payable.
6.4 The bases and policies of accounting, adopted for the purpose of
preparing the Accounts are the same as those adopted in preparing the
audited accounts of APM in respect of the three immediately preceding
financial periods.
7. THE MANAGEMENT ACCOUNTS
7.1 A true, complete and accurate copy of the Management Accounts which
have been extracted from the books of APM is annexed to the APM
Disclosure Memorandum.
7.2 The Management Accounts disclose with reasonable accuracy the state of
affairs and of the assets and liabilities of APM as at the Management
Accounts Date and in accordance the Accounting Requirements on a basis
registered with the Accounts make proper provision for, reserve for or
disclose, as appropriate, all liabilities, whether actual, contingent,
unquantified or disputed, all capital commitments, whether actual or
contingent, and all debts considered to be bad or doubtful as at the
Management Accounts Date.
7.3 No changes have occurred between the Accounts Date and the Management
Accounts Date in the assets and liabilities shown or included in the
Accounts other than as shown in the Management Accounts.
7.4 No changes in accounting policies or practices have been made in the
preparation of Management Accounts compared with the Accounts, and in
particular the basis of depreciation adopted in the Management
Accounts is the same as that adopted in the Accounts and in the
audited accounts of APM for the three immediately preceding financial
periods.
8. EXCEPTIONAL ITEMS
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The profits or losses of APM for the accounting period ended on the
Accounts Date as shown in the Accounts and in the audited accounts for
three immediately preceding financial periods (and for the period between
the Accounts Date and the Management Accounts Date as shown by the
Management Accounts) and the trend of profits or losses thereby shown have
not (except as disclosed in such accounts) been affected by changes or
inconsistencies in accounting policies or practices, by the inclusion of
non-recurring items of income or expenditure, by transactions of an
abnormal or an unusual nature or which have been entered into otherwise
than on normal commercial terms.
9. POSITION SINCE THE ACCOUNTS DATE
In the period between the Accounts Date and the Management Accounts Date:
9.1 no dividend or other distribution (within the meaning of that
expression as contained in section 209 or 210 or 418 of ICTA) has been
declared, paid or made by APM and no such dividend or distribution
will be declared, paid or made prior to the Closing Date;
9.2 APM has carried on its business in the ordinary and usual course
without any interruption in its nature, scope or manner and so as
to maintain the same as a going concern;
9.3 APM has not written off or provided against any debts, no debt
has been released by APM on terms that the debtor pays less than
the book value of its debt, and no debt owing to APM has proved
to any extent to be irrecoverable and none of the aforesaid shall
be done prior to the Closing Date save as expressly agreed with
Citrix;
9.4 APM has not entered into any contract involving expenditure on
capital account or the purchase of any capital equipment or other
items of a capital nature and none of the aforesaid shall be done
prior to the Closing Date save as expressly agreed with Citrix;
9.5 the profits or losses of APM have not been affected by changes or
inconsistencies in accounting treatment, by any non-recurring
items of income or expenditure, by transactions of an abnormal or
unusual nature or which have been entered into otherwise than on
normal commercial terms;
9.6 the business of APM has not been materially or adversely affected
by the loss of any customer which in either of the two financial
periods immediately preceding the Accounts Date accounted for 5
per cent or more of the turnover of APM;
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9.7 there has been no material adverse change in the financial
position or trading prospects or turnover of APM and no event,
fact or matter has occurred or so far as the Executive Directors
are aware is likely to occur which will or is in the reasonable
opinion of the Executive Directors likely to give rise to any
such change;
9.8 no contract or commitment (whether in respect of capital
expenditure or otherwise) has been entered into by APM on terms
which will allow for less than full recovery of costs, overheads
and profit or which is of a long term or unusual nature, or which
involves or could involve an obligation of a material nature or
magnitude; and for this purpose a long term contract or
commitment is one which will not be performed in accordance with
its terms within three months after the date it was entered into
or undertaken or which is incapable of termination by APM on
three months' notice or less;
9.9 APM has not acquired or disposed of or agreed to acquire or
dispose of any business or any asset or assumed or acquired any
liability (including any contingent liability) or made any
payment otherwise than in the ordinary course of business and at
arm's length;
9.10 APM has not disposed of or agreed to dispose of any asset for a
consideration payable by instalments where any instalment remains
unpaid;
9.11 all cash and payments of any kind received by APM have been
credited to its accounts with its bankers and will be so credited
until the Closing Date;
9.12 APM has paid its creditors in accordance with the same policy as
that adopted throughout the financial period ended on the
Accounts Date and will continue to do so until the Closing Date
save as expressly agreed with Citrix;
9.13 none of the assets of APM has been diminished by the wrongful act
of any person;
9.14 no share or loan capital or any other security giving rise to a
right over the capital of APM has been created, allotted or
issued or agreed to be issued or placed under any option, and APM
has not redeemed or purchased or agreed to redeem or purchase any
of its share capital or passed any resolutions or made any
capitalisation of reserves;
9.15 there has not been any material change in the level of borrowing
or in the working capital requirements of APM and in addition APM
has not entered into any agreements or arrangements which are
likely to cause a material increase in the level of borrowing or
in the working capital requirements of APM;
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9.16 there has not been any unusual increase or decrease in the work
in progress of APM;
9.17 no provision in the accounting records has been released.
10. ACCOUNTING AND OTHER RECORDS
10.1 All the accounts, books, ledgers and financial and other records
of whatsoever kind of APM (including all invoices) have been
properly kept in accordance with sections 221 and 222 of the
Companies Act and are in the possession of APM or under its
control, and all transactions relating to its business have been
duly and correctly recorded therein.
10.2 APM has none of its records, systems, controls, data or
information, recorded, stored, maintained, operated or otherwise
wholly or partly dependent on or held by any means (including any
electronic, mechanical or photographic process whether
computerised or not) which (including all means of access thereto
and therefrom) are not under the exclusive ownership and direct
control of APM.
11. INDEBTEDNESS
11.1 APM has not incurred any indebtedness in the nature of borrowings
which it has not repaid in full or satisfied.
11.2 The amounts borrowed by APM do not exceed any limitation on its
borrowing contained in its articles of association or in any
debenture or other deed or document binding upon APM and APM has
not incurred any indebtedness except indebtedness arising in the
ordinary course of business.
11.3 APM has not received notice to repay under any agreement relating
to any borrowing or indebtedness in the nature of borrowing on
the part of APM which is repayable on demand, and there has not
occurred any event of default under any agreement relating to any
other borrowing or indebtedness in the nature of borrowing on the
part of APM or any event which with the giving of notice and/or
the lapse of time and/or a relevant determination would
constitute such an event of default or entitle any person to
require repayment of the same prior to the full term of the
borrowing or indebtedness in the nature of borrowing.
11.4 APM has no bank overdraft facilities, acceptance credits or other
financial facilities outstanding or available to it.
11.5 APM has not entered into any debt factoring, discounting or
inventory finance arrangement or engaged in financing of a type
which would not
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require to be shown or reflected in the Accounts, had such
arrangement or financing been entered into prior to the Accounts
Date.
11.6 APM has not entered into or agreed to enter into any performance
or other bonds and no such bonds have been given by any other
person on behalf of APM or in relation to any of its obligations.
11.7 There is not at the Signing Date, except for the registered
charges full details of which are set out in the APM Disclosure
Memorandum, any Encumbrance of any nature (including a
conditional obligation) on or affecting the assets or property or
any part of the assets or property of APM nor any debenture
whether secured or otherwise or floating charge.
11.8 All charges by or in favour of APM have been registered in
accordance with the provisions of the Companies Act or comply
with all necessary formalities as to registration or otherwise in
any other relevant jurisdiction; and the registered particulars
of all charges over any assets of APM are complete and accurate
in all respects.
12. DEBTS/UNPAID LIABILITIES
12.1 No part of the sum shown in the Management Accounts, in respect
of debtors is represented by debts which were then more than 30
days overdue for payment and not provided for therein.
12.2 None of the debts owed to APM at the Signing Date is subject to
any counterclaim or set-off; and for the avoidance of doubt a
debt shall not be regarded as realising its full value to the
extent that it is paid, received or otherwise recovered in
circumstances in which such payment, receipt or recovery is or
may be void, voidable or otherwise liable to be reclaimed or set
aside.
12.3 APM is not owed any sums other than debts incurred in the
ordinary course of trading.
12.4 APM does not have any unpaid liability where the relevant bill or
account was received more than 30 days prior to the Signing Date.
13. NO UNDISCLOSED MATERIAL LIABILITIES
At the Signing Date there are no material liabilities of Company or any
Subsidiary of any kind whatsoever, whether accrued, contingent, absolute,
determined or determinable, and to the knowledge of the Executive
Directors, there is no existing condition, situation or set of
circumstances that could reasonably be expected to result in such a
liability, other than:
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(a) liabilities disclosed or provided for in the Management Accounts
as of the Management Accounts Date; and
(b) liabilities incurred in the ordinary course of business
consistent with its past practice since the Management Accounts
Date.
14. ASSETS
14.1 All vehicles and office furniture and equipment and other assets
used by APM are its property both legally and beneficially and
APM has a good and marketable title thereto and none is the
subject of any Encumbrance.
14.2 All of the tangible assets owned and/or used by APM at the
Signing Date (including all equipment, furniture, fixtures and
vehicles) are, subject to normal wear and tear, at the Signing
Date in good repair and over the period of time during which they
will be written down to a nil value in the accounts of APM they
are capable of being efficiently and properly used in connection
with the business of APM.
14.3 The asset register of APM at the Signing Date comprises a
complete and accurate record of all the vehicles, equipment,
furniture and other assets owned or possessed by APM.
14.4 As at the Signing Date APM has not entered into any leasing or
hiring agreement, hire purchase agreement, conditional sale or
credit sale agreement, agreement for payment on deferred terms or
any similar agreement or arrangement and it will not do so
between the Signing Date and the Closing Date.
14.5 As at the Signing Date APM is not in default in the performance
or observance of any of the provisions of any agreement or
arrangement of a type described in paragraph 14.4 full details of
which are disclosed in the APM Disclosure Memorandum.
15. BUSINESS NAMES
15.1 APM does not use on its letterhead, books or vehicles or
otherwise carry on the Business under any name other than its
corporate name and does not own or use any trade name or business
name other than ANSA, Digitivity, APM and Object Lab.
16. EMPLOYEES AND CONSULTANTS
16.1 Full particulars of the identity, job title and position, dates
of commencement of employment and/or appointment to office,
age, notice period, salary, benefits, restrictive covenants,
confidentiality obligations and
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all other terms and conditions of employment or engagement of
each director, consultant or employee of APM as at the Signing
Date are fully and accurately set out in the APM Disclosure
Memorandum and no variation in such terms and conditions of
employment or engagement will be made by APM between the Signing
Date and the Closing Date.
16.2 At the Signing Date there are no outstanding offers of employment
or engagement made to any person by APM and there is no one who
has accepted an offer of employment or engagement made by APM but
who has not yet taken up that employment or engagement. No such
offers of employment or engagement will be made by APM between
the Signing Date and the Closing Date.
16.3 All service and employment agreements entered into by APM and in
force at the Signing Date may be terminated by not more than six
months' notice and without payment of compensation or damages
other than any payments arising under statute or payment for
wrongful dismissal. All consultancy agreements entered into by
APM prior to the Signing Date may be terminated by not more than
three months' notice without giving rise to any claim for damages
or compensation. At the Signing Date there are no fixed term
employment contracts of any nature.
16.4 At the Signing Date no director, employee or consultant of APM:
(a) has given or received notice terminating his employment or
engagement or altering its terms, and no such person will be
entitled as a result of the entering into of this agreement
to give notice of termination or to claim for any payment or
benefit or to treat himself as being released from any
obligation; or
(b) is currently on sick leave which (as at the Signing Date)
has been continuing for more than 14 consecutive days; or
(c) is currently on maternity leave.
16.5 There are no outstanding arrears of salary, wages, holiday pay or
other remuneration due to any of APM's directors, consultants or
employees.
16.6 Since the Accounts Date:
(a) no change has been made in the rate or basis of
remuneration, fee or the pension or other benefits paid to
or provided for any director, consultant or employee of APM;
(b) no change has been made in any other terms of employment or
engagement of any such director, consultant or employee.
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16.7 APM has not entered into any agreement or given any assurance
(whether legally binding or not) or created any expectation
regarding any future variation in any contract of employment or
consultancy agreement in respect of any of its directors,
employees or consultants or any agreement imposing an obligation
on APM or any expectation on the part of any director, employee
or consultant to increase the basis and/or rates of remuneration
or payment and/or the provision of other benefits to or on behalf
of any of its directors, employees or consultants at any future
date.
16.8 The APM Disclosure Memorandum contains full details of each of
the following which at the Signing Date or at any time within the
18 months immediately preceding the Signing Date been operated by
APM or which APM is under any obligation (whether or not legally
binding) to provide at any future date:
(a) any scheme or arrangement whereby directors or employees
and/or former directors or employees and/or their relevant
relatives or dependants may acquire shares of any class in
APM or option over or in respect of any such shares;
(b) any employee trust under which employees and/or former
employees and/or their relatives or dependants are the
beneficiaries or are entitled to receive any benefits.
(c) any cash bonus scheme or other employee incentive
arrangements not involving the issue of shares;
(d) any arrangement by which any commission or remuneration of
any kind payable or due to any director or employee or any
former director or employee which may be calculated by
reference in whole or in part to the turnover, profits or
sales of APM.
16.9 In relation to any share schemes referred to in the APM
Disclosure Memorandum:
(a) all documents governing such share schemes have been annexed
to the APM Disclosure Memorandum;
(b) such share schemes have at all times been operating in
accordance with their governing rules or terms and all
applicable laws;
(c) all documents relating to such share schemes which are
required to be filed with any regulatory authority have been
so filed, and all regulatory requirements relating to such
share schemes have been complied with in full;
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(d) all tax clearances and/or approvals necessary or desirable
to obtain favourable tax treatment for the operator of such
share schemes and/or the participants therein have been
obtained and have not been withdrawn, and no act or omission
has occurred which has or would prejudice any such tax
clearance and/or approval; and
(e) no employee, former employee or relative or dependent or
other participants in any of such share schemes has made any
claim against APM in respect thereof.
16.10 APM has no outstanding undischarged liability to pay any
governmental or regulatory authority in any jurisdiction any
taxation, contribution or other impost arising in connection with
the employment or engagement by APM of employees, directors or
consultants other than in the United Kingdom Pay As You Earn and
National Insurance Contributions and in the United States federal
and state withholding and other payroll related taxes and
Medicare in respect of employees as directors and VAT in respect
of consultants registered for VAT.
16.11 APM has not entered into any union membership, security of
employment, redundancy, recognition or other collective agreement
(whether legally binding or not) with a trade union, association
of trade unions, works council, staff association or other
organisation or body of employees, nor has APM done any act which
might be construed as recognition, nor has APM in respect of any
employee entered into any agreement with any trade union or other
employee body representing employees concerning the introduction
of new equipment or technology.
16.12 At the Signing Date APM is not involved in any industrial or
trade dispute or any dispute or negotiation regarding a claim or
the dismissal, suspension, disciplining or varying of the terms
and conditions of employment of any present or former employee,
staff association or other organisation or body of employees, and
there are no facts known, or which on reasonable enquiry would be
known, to the Executive Directors which might indicate that there
may be any such dispute or negotiation.
16.13 At the Signing Date no disciplinary action, whether formal or
informal, has been taken against and no grievance or complaint of
sex, race or disability discrimination, whether formal or
informal, has been raised by any employee or former employee in
the twelve months ending on the Signing Date.
16.14 At the Signing Date the Executive Directors are not aware of any
facts or matters affecting any of the employees of APM which
might reasonably be considered grounds for dismissing such
employee or for warning such
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employee that the continuation of any conduct, behaviour or
performance might lead to dismissal and no warning (whether
formal or informal) has been given to any employee and no notice
of termination of employment has been given to or received from
any such employee.
16.15 At the Signing Date no past or present director, employee or
consultant has any claim against APM for loss of office or
arising out of the termination of his office or employment or in
respect of any accident or injury which is not fully covered by
insurance and at the Signing Date there is no event which would
or might give rise to any such claim.
16.16 At the Signing Date no liability has been or may be incurred by
APM for breach of any contract of service or for services, for
redundancy payments, protective awards or for compensation for
wrongful dismissal or unfair dismissal or for failure to comply
with any order for the reinstatement or re-engagement of any
employee or for any other liability accruing from the actual or
proposed termination or variation of any contract of employment
or for services or arising from the sale of the APM shares in
accordance with this document.
16.17 No gratuitous payment has been made or promised by APM:
(a) in respect of or contingent upon the sale of the APM shares;
or
(b) in connection with the actual or proposed termination or
suspension of employment or engagement or variation of any
contract of employment or engagement of any present or
former director, consultant or employee.
16.18 At the Signing Date all monies paid or goods or services provided
directly or indirectly or made available (whether by way of the
provision of a credit card or otherwise howsoever) by APM whether
as principal or surety to any of its directors or employees
whether in respect of emoluments of employment or reimbursement
or otherwise howsoever have been expenditure properly incurred by
APM so as to be deductible in computing its taxable profits and
have been declared to the Inland Revenue.
16.19 There is no person previously employed by APM who now has or may
have a right to return to his work or a right to be reinstated by
APM under the provisions of the Employment Rights Act 1996.
16.20 APM is not under any present, future or contingent liability to
provide any goods, services, accommodation or benefit whatsoever
(whether by way of remuneration or otherwise) to any of its
employees or former employees.
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16.21 APM does not have outstanding any loans or quasi loans (as
defined in the Companies Act) or entered into any credit
transaction (as so defined) with any of its directors or
employees.
16.22 All directors or employees of APM who require a work permit will
have such a permit in force at Closing and such permit will
remain in force for at least three months following Closing.
16.23 APM has in relation to each of its directors and employees (and
so far as relevant to each of its former directors and employees)
complied with all obligations imposed on it by the Equal Pay Act
1970, Article 119 of the Treaty of Rome, the Trade Union and
Labour Relations (Consolidation) Act 1992, the Sex Discrimination
Act 1975, the Race Relations Act 1976, the Disability
Discrimination Act 1995 and the Trade Union Reform and Rights Act
1993, the Employment Rights Act 1996 and all other statutes,
regulations, codes of conduct and practices relevant to the
relations between APM and its directors and employees and APM has
maintained adequate and suitable records regarding their service.
16.24 Within the period of one year preceding the Signing Date APM has
not been a party to any relevant transfer as defined in the
Transfer of Undertakings (Protection of Employment) Regulations
1981 nor has APM failed to comply with any duty to inform and
consult any independent trade union or employee representatives
under such Regulations.
17. TRANSACTIONS WITH APM SHAREHOLDERS' AFFILIATES
17.1 There are no:
(a) loans made by APM to any of the APM shareholders and/or to
any director of APM and/or to any Affiliate of any of the
APM shareholders or of any such director;
(b) debts owing to APM by any of the APM shareholders and/or any
director of APM and/or by any Affiliate of any of the APM
shareholders or of any such director.
17.2 There are no mortgages, charges, guarantees or other security
arrangements entered into by APM in respect of any loans, debts
or other obligations of any of the APM shareholders and/or any
director of APM and/or of any Affiliate of the APM shareholders
or of any such director.
17.3 There are no existing contracts, transactions or arrangements to
which APM is a party or under which it may be liable and in which
any of the APM shareholders and/or any director of APM and/or any
Affiliate of any APM shareholder and/or any Affiliate of any
director is interested whether directly
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or indirectly, and APM has not been a party to any such
contracts, transactions or arrangements during the three years
preceding the Signing Date.
17.4 None of the APM shareholders nor any Affiliate of any APM
shareholder nor any director of APM is at the Signing Date either
individually or with any other person or persons engaged or
concerned or interested in any way whatsoever (and whether by a
holding of shares (other than holdings of not more than 5 per
cent. of the issued share capital of a company quoted on a stock
exchange) or otherwise) in any other business of a similar nature
to or competitive with that carried on by APM.
17.5 The APM Disclosure Memorandum sets out full details of any formal
or informal arrangements with any of the APM shareholders'
Affiliates and copies of any agreements (whether or not legally
binding) relating thereto in force or to come into force between
APM and either of the APM shareholders and/or any Affiliate of a
APM shareholder.
17.6 Save in relation to services provided to APM pursuant to a APM
shareholder's employment contract with APM, APM does not depend
in any material respect upon the use of any property, right or
asset owned by, or facilities or services provided by any APM
shareholder or any Affiliate of a APM shareholder.
18. MATERIAL CONTRACTS
18.1 There is not outstanding any agreement or arrangement to which
APM is a party:
(a) which was entered into otherwise than at arm's length; or
(b) which establishes any guarantee, indemnity, suretyship,
comfort arrangement (whether or not legally binding) given
by APM in respect of the obligations or solvency of any
third party; or
(c) which establishes any joint venture, cooperation agreement
or arrangement, consortium or profit (or loss) sharing
agreement or arrangement; or
(d) which involves future capital expenditure by APM in excess
of (pound)50,000; or
(e) which, by virtue of the acquisition of the APM shares by the
Citrix will or may result in: (i) any third party being
relieved of any obligation or becoming entitled to exercise
any right (including a right of termination or any right of
pre-emption or other option); or
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(ii) APM being in default under any such agreement or
arrangement or losing any benefit, right or licence which it
currently enjoys or (iii) a liability or obligation of APM
being created or increased; or
(f) which will result in APM becoming liable for any finder's
fee, brokerage or other commission in connection with the
acquisition of the APM shares by the Citrix; or
(g) to which any of the provisions of section 317, 320 or 330 of
the Companies Act apply; or
(h) pursuant to which APM has sold or otherwise disposed of any
company, business or undertaking in circumstances such that
it remains subject to any liability (whether contingent or
otherwise) which is not fully provided for in the Accounts;
or
(i) which is a power of attorney given by APM or any other
authority other than authority given to a director of APM
which would enable any person to enter into any contract or
commitment on behalf of APM; or
(j) which is an unusual or abnormal contract having regard to
the nature, scope and extent of APM's business or the manner
in which it has been carried on in the two years ended on
the Management Accounts Date; or
(k) which has more than three months left to run and is not
capable of being terminated by three months' notice or less
without payment of compensation or damages; or
(l) which is of a loss-making nature (that is, considered to be
likely to result in a loss on Closing of performance) or
which cannot readily be fulfilled or performed by APM on
time and without undue or unusual expenditure of money or
effort; or
(m) restricting the freedom of APM to provide and take goods and
services by such means and from and to such persons as it
may from time to time think fit; or
(n) which is a sole or purchase option or similar agreement or
arrangement affecting any assets owned or used by APM.
18.2 Each agreement, contract, lease, scheme, arrangement and
commitment described in the APM Disclosure Memorandum or required
to be disclosed pursuant to paragraph 18.1 to which APM is a
party is a valid and binding agreement of APM and at the Signing
Date is in full force and effect, and at
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Signing Date neither APM nor, to the knowledge of the Executive
Directors, any other party thereto is in default in any material
respect under the terms of any agreement, contract, lease,
arrangement or commitment.
18.3 Full disclosure is made in the APM Disclosure Memorandum of any
negotiations or offers or the like at the Signing Date which are
capable or likely to result in APM entering into any agreement or
arrangement of a kind described in paragraph 18.1.
18.4 APM has not assigned or sublet any of its rights under and at the
Signing Date is not in default under agreement or arrangement of
a kind described in paragraph 18.1 to which it is a party and
there are no circumstances at the Signing Date likely to give
rise to any such default, and no other party thereto is in
default of any such agreement or arrangement and there are no
circumstances expected to give rise to any such default.
18.5 No agreement or transaction to which APM is a party is invalid or
ultra vires and at the Signing Date there are no grounds for
rescission, breach, avoidance or repudiation of any agreement or
other transaction to which APM is a party.
18.6 No party with whom APM has entered into any agreement or
arrangement is at the Signing Date in default thereunder, being a
default which would have a Material Adverse Effect on the
financial or trading position or prospects of APM; and, so far as
the Executive Directors are aware there are no circumstances
which are likely to give rise to any default.
19. BUSINESS
19.1 So far as the Executive Directors are aware at the Signing Date:
(a) no customer or client of APM has ceased or has indicated an
intention to cease trading or dealing with APM or is
expected by the Executive Directors to do so;
(b) no director, consultant or employee will leave the
employment or engagement of APM as a result of the Citrix
acquiring APM.
19.2 At the Signing Date no disclosure has been made by APM of any of
its financial or trade secrets (save to Citrix and save in the
ordinary course of business after having secured the confidential
nature of any such disclosure) and no such disclosure will be
authorised by APM prior to Closing.
20. INSOLVENCY
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20.1 No order has been made, petition presented, resolution passed or
meeting convened for the winding up of APM or for an
administration order in respect of APM; no receiver, receiver and
manager, administrative receiver or liquidator has been appointed
of the business or the whole or any part of the assets or
undertaking of APM; and there are no circumstances likely to give
rise to the appointment of any such receiver, receiver and
manager, administrative receiver or liquidator.
20.2 There are no unfulfilled or unsatisfied judgments or court orders
outstanding against APM or by which it may be affected.
20.3 No distress, distraint, charging order, garnishee order,
execution or other process which a court or a similar body may
use to enforce payment of a debt has been levied or applied for
in respect of the whole or any part of the property, assets or
undertaking of APM.
20.4 No event has occurred causing, or which upon intervention or
notice by any third party may cause, any floating charge created
by APM to crystallise or any charge created by it to become
enforceable, nor has any crystallisation occurred or is any such
enforcement in process.
20.5 In relation to any property or assets held by APM under any hire,
hire purchase, conditional or credit sale, leasing or retention
of title agreement or otherwise belonging to a third party, at
the Signing Date no event has occurred which entitles, or which
upon intervention or notice by the third party may entitle, the
third party to repossess the property or assets concerned or to
terminate the agreement or any licence in respect thereof.
20.6 APM has not stopped payment nor is it insolvent or unable to pay
its debts for the purposes of section 123 of the Insolvency Act
1986.
20.7 Prior to the Signing Date APM has not been a party to any
transaction with any third party which in the event of such third
party going into liquidation or an administration order or a
bankruptcy order being made in relation to it or to him, would
constitute (in whole or in part) a transaction at an undervalue,
a preference, an invalid floating charge or an extortionate
credit transaction or part of a general assignment of debts,
under sections 238 to 245 and sections 339 to 344 of the
Insolvency Act 1986.
20.8 No person who at present is, or who at any time within the three
years prior to the Signing Date was, a director or officer of APM
is, or at any material time was, subject to any disqualification
order under the Act or under any other legislation relating to
the disqualification of directors and officers, or was the
subject of any investigation or proceedings capable of leading to
a disqualification order being made.
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21. REGULATORY MATTERS
21.1 APM has been granted and there are now in force and effect all
necessary approvals, permits, authorities, consents and licences
for the carrying on of its business in the places and in the
manner in which such business is now carried on.
21.2 The approvals, permits, authorities, consents and licences
referred to in paragraph 21.1 are not subject to any unusual or
onerous conditions and APM has complied with all conditions
attached to such approvals, permits, authorities, consents and
licences. There are no investigations, proceedings, enquiries,
communications or other circumstances which indicate that any
such approvals, permits, authorities, consents and licences may
be revoked, cancelled, suspended, modified or not renewed.
21.3 APM has at all times carried on its business and affairs in all
respects in accordance with its memorandum and articles of
association and all applicable laws and regulations (whether in
the United Kingdom or any other jurisdiction).
21.4 No outstanding notices in relation to any statutory obligation
have been served on APM in respect of any of its assets or in
respect of any contravention or non-compliance with or alleged
contravention or non-compliance with any obligation or otherwise.
21.5 APM is not a party to any agreement, arrangement or concerted
practice and is not carrying on any practice which in whole or in
part:
(a) is or requires to be registered under the Restrictive Trade
Practices Act 1976;
(b) contravenes Articles 85 or 86 of the Treaty of Rome or which
has been notified to the European Commission for a negative
clearance or exemption or which ought to have been so
notified;
(c) contravenes or is invalidated by the provisions of the
Resale Prices Act 1976;
(d) constitutes an anti-competitive practice as defined in the
Competition Act 1980;
(e) contravenes the Fair Trading Act 1973; or
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(f) contravenes or is invalidated by any anti-trust, fair
trading, consumer protection or similar legislation in any
jurisdiction where APM has any assets or carries on
business.
21.6 APM has not been a party to any acquisition, merger or joint
venture which was or was required to be notified to the European
Commission under Council Regulation 4064/89 (as amended by
Council Regulation (EC) No. 1310/97) or which qualified for
investigation, or in respect of which merger clearance was
sought, under the Fair Trading Act 1973.
21.7 There is not in existence any practice of APM which is or has
been under investigation by or on behalf of the Office of Fair
Trading, the Monopolies and Mergers Commission, the Secretary of
State for Trade and Industry or the Commission of the European
Communities or any authority having jurisdiction in anti-trust,
monopoly, competition or consumer protection matters. APM has not
received any process, notice or communication (formal or
informal) by or on behalf of the Office of Fair Trading, the
Monopolies and Mergers Commission, the Secretary of State for
Trade and Industry or the Commission of the European Communities
or any authority having jurisdiction in anti-trust, monopoly,
competition or consumer protection matters in relation to any
aspect of the business of APM or any agreement or arrangement to
which it is or is alleged to be a party, and no circumstances
exist which may might give rise to APM receiving any such
process, notice or communication.
21.8 There have not been and are not at the Signing Date pending, or
in existence, any investigations or enquiries by, or on behalf
of, any governmental or administrative or other body in respect
of any of the affairs of APM.
21.9 APM has not paid any commission or made any payment whether to
secure business or otherwise to any person, firm or company which
in the hands of such person, firm or company would in accordance
with the relevant law be regarded as illegal or improper.
21.10 No director, officer, agent, employee or other person acting on
behalf of APM has been party to the use of any assets of APM for
unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political or other activity, or to the
establishment or maintenance of any unlawful or unrecorded fund
of monies or other assets, or to the making of any false or
fictitious entries in the books or records of APM, or to the
making of any unlawful payment.
21.11 All statements and declarations made to H.M. Customs & Excise or
any other customs authority, including all import declarations,
made by or on behalf of APM have been true complete and accurate.
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22. LITIGATION
22.1 APM is not a party (whether as plaintiff or defendant or otherwise)
to any claim, litigation, arbitration, prosecution or other legal or
quasi legal proceedings or enquiry and has not been engaged in any
such claim, proceedings or enquiry during the three years prior to
the Signing Date and so far as the Executive Directors are aware
there are no claims or actions (whether criminal or civil) pending
or threatened or anticipated by or against APM or any of its
directors, employees or consultants in relation to APM or its
business or in respect whereof APM is liable to indemnify any party
concerned or may be vicariously liable.
22.2 So far as the Executive Directors are aware, there are no
investigations, disciplinary proceedings or other facts or
circumstances likely to lead to any claim, action, proceeding, suit,
litigation, prosecution, investigation, enquiry or arbitration
involving APM.
23. INSURANCE
23.1 APM and its assets are insured against such risks and in such sums
as are disclosed in the APM Disclosure Memorandum. All premiums due
in respect of such insurances have been fully paid; and the next
renewal date for each of such insurances is a date at least 30 days
after the date of Closing. All such insurances are currently in full
force and effect, and nothing has been done or omitted to be done
which could make any policy of insurance void or voidable, or which
is likely to result in an increase in premium; and none of such
insurances is subject to any special or unusual terms or
restrictions or to the payment of any premium in excess of the
normal rate for companies similar to APM.
23.2 No claim is outstanding at the Signing Date or at the Signing Date
is likely to be made under any of such insurances and no
circumstances exist which are likely to give rise to any such claim.
23.3 So far as the Executive Directors are aware, there are no claims
which are likely to be brought against APM by an employee, a workman
or any other third party, in respect of any accident or injury
occurring before Closing, which are not fully covered by insurance.
24. ENVIRONMENTAL, HEALTH AND SAFETY CONSIDERATIONS
24.1 APM has complied with all Environmental Laws relating to it, and in
particular has obtained and complied with the terms and conditions
of all permits, licences and other authorisations, and has filed all
notifications, which are required under any Environmental Laws.
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24.2 APM does not have, and has never had, on, in or under its land and
property any Hazardous Materials, and APM has not manufactured, sold
or supplied any Hazardous Materials or any products which are, or
were, or will or are likely to become, Hazardous Materials or
contaminated or which do not comply with all Environmental Laws.
24.3 None of the Properties or any other properties at any time owned or
occupied by APM has been at any time used for the purpose of or in
any way involving the handling, manufacture, treatment, storage,
use, generation, recycling, release, discharge, refining or dumping
or disposal of any Hazardous Materials.
24.4 No Hazardous Materials have been transported to, from or across any
of the Properties or any other property at any time owned or
occupied by APM or have been deposited, stored or located on, under,
in or at any of the Properties or any such other property during the
period of occupation by APM of any of the Properties or any other
party.
24.5 APM has not illegally managed or allowed to escape from its control
or transferred to an unauthorised person any controlled waste as
defined in the Environmental Protection Act 1990.
24.6 No notices have been received concerning the disposal, storage,
deposit, treatment, recycling or transportation of controlled waste
at any time on the Properties or on any other property at any time
owned or occupied by APM or concerning the terms or conditions of
any authorisation, licence or permission relating to any such
controlled waste and as far as the Executive Directors are aware
there are no circumstances which may give rise to the service of any
such notice.
24.7 No disposal licence, site licence or waste management licence
granted or required to be granted under the Control of Pollution Act
1974 or the Environmental Protection Act 1990 is required in
relation to any of the Properties and (if granted) no such licence
has been revoked or suspended or is likely to be revoked or
suspended.
24.8 There is no civil, criminal or administrative action, claim,
investigation or other proceeding, suit or prosecution pending or
threatened against APM or any of its directors, officers or
employees under or relating to any Environmental Laws whether in
relation to the Properties or otherwise, and there are no
circumstances existing which may lead to any such action, claim,
investigation, proceeding, suit or prosecution.
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24.9 There are no circumstances which prevent or interfere with the full
compliance by APM with all Environmental Laws in relation to the
Properties.
24.10 There is no liability (actual or contingent) in relation to any of
the Properties or any other property at any time owned or occupied
by APM which would give rise to any liability to make good, repair,
reinstate or clean up.
24.11 There is no liability (actual or contingent) in relation to any of
the Properties or any other property at any time owned or occupied
by APM which could give rise to any liability to re-dispose or
reprocess any waste or to remedy any effects of a disposal, spillage
or leak or any emission of any waste or Hazardous Materials.
25. PENSIONS
25.1 Subject to paragraph 25.3, there are no:
(a) agreements or arrangements for the provision by APM of any
retirement or other benefit (including any pension, annuity,
lump sum, gratuity or other like benefit to be given on
retirement or in anticipation of retirement on or after
retirement in connection with past service, or to be given on
or in anticipation of or in connection with any change in the
nature of the service of the person in question) for any
director, officer or any employee or former director, officer
or employee of APM or for any dependants of any such person;
or
(b) any informal or ex-gratia pension arrangements, customs or
practices (whether or not legally enforceable) or schemes
involving APM.
25.2 No proposal has been announced by APM to establish any pension
agreement or arrangement and pending Closing no such agreements or
arrangements shall be entered into or established nor will any
proposal to establish such an arrangement be announced.
25.3 The 401(k) Plan disclosed in the APM Disclosure Memorandum which is
intended to be qualified under Section 401(a) of the Internal
Revenue Code, is so qualified and has been so qualified during the
period from its adoption to date, and each trust forming a part
thereof is exempt from tax pursuant to Section 501(a) of the
Internal revenue Code. APM has furnished to Citrix a copy of the
most recent Internal Revenue Service opinion, notification, advisory
or determination letter, as applicable, with respect to such 401(k)
Plan. Such 401(k) Plan has been maintained in material compliance
with its terms and with the requirements prescribed by any and all
statutes, orders, rules and regulations, including but not limited
to ERISA and the Internal Revenue
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Code, which are applicable to such plan. All contributions and
payments accrued under the 401(k) Plan determined in accordance with
prior funding and accrual practices will be discharged and paid on
or prior to the Closing Date. There has been no amendment to,
written interpretation of or announcement (whether or not written)
by APM relating to, or change in employee participation or coverage
under such 401(k) Plan that would increase materially the expense of
maintaining such 401(k) Plan above the level of the expense incurred
in respect thereof for the fiscal year ended prior to the date
hereof.
26. FINDERS' FEES
Except for BVA Associates Limited, there is no investment banker, broker,
finder or other intermediary that has been retained by or is authorised to
act on behalf of APM who might be entitled to any finder's fee or
commission from Citrix, APM or any of their respective Affiliates upon
consummation of the transactions contemplated by the Offers.
27. OFFER DOCUMENT
With respect to information supplied by or on behalf of APM contained in
this document, such information shall not at the time of delivery to
shareholders of APM contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
included therein not misleading.
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PART B - INTELLECTUAL PROPERTY
1. INTELLECTUAL PROPERTY RIGHTS
As to: (i) warranties 1.1 to 1.6 inclusive in so far as they relate to
APM's Product IPRs; and (ii) warranties 1.11 and 1.12; except as
directly disclosed:
1.1 All of APM's IPRs are:
(a) directly or indirectly identified or referred to in the APM
Disclosure Memorandum;
(b) (only in relation to (i) patent rights and applications
therefor and (ii) defects, in such of APM's IPRs as are
licensed to it, arising out of defects in the relevant
licensor's title and ability to grant licenses, so far as the
Executive Directors are aware) valid and subsisting; and
(c) (only in relation to (i) patent rights and applications
therefor and (ii) defects, in such of APM's IPRs as are
licensed to it, arising out of defects in the relevant
licensor's title and ability to grant licenses, so far as the
Executive Directors are aware) there is no impediment or
restriction on their use by APM in the Business (both as
currently conducted and including any planned, anticipated, or
reasonably foreseeable extension or change to that business).
1.2 APM's IPRs are:
(a) so far as the Executive Directors are aware, not subject to
any charges, mortgages, liens or encumbrances; and
(b) not subject to any licences or other agreements other than the
Customer Contracts and (in relation only to such of APM's IPRs
as are licensed to it) the Third Party Agreements;
affecting the same or restricting their use by APM in any way.
1.3 Save for the Customer Contracts, there are no agreements, consents,
permissions, undertakings or understandings which license the use of
or dealing with APM's IPRs and there are no such agreements or other
dealings which have been entered into or purportedly entered into by
or on behalf of any other person.
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1.4 There are no circumstances which could entitle a third party:
(a) to a licence, permission, consent or assignment of or in
respect of any of APM's IPRs; or
(b) to call for or exercise any right to use or work under any of
APM's IPRs;
save as may be provided for by the Customer Contracts.
1.5 APM's IPRs and the Third Party Agreements will not be adversely
affected by the acquisition contemplated by this document.
1.6 Save for the Customer Contracts, neither APM nor any of the directors
or employees of APM has entered, become a party to or become bound by
any agreement for the sharing, exchanging, passing on or otherwise of
APM's IPRs of any description to any other person, firm or
corporation neither are there any such agreements which were entered
into in relation to the Software.
1.7 There have not been any actions, claims, counterclaims, applications
or allegations impugning the validity or enforceability of any of
APM's IPRs (only in relation to Third Party Software, so far as the
Executive Directors are aware) or (for such as APM claims to own)
APM's ownership thereof and (only in relation to patent rights and
applications therefor and to Third Party Software, so far as the
Executive Directors are aware) there are no facts, matters or
circumstances which could give rise to any such action, claim,
counterclaim, application or allegation. The use and exercise of
APM's IPRs (only in relation to patent rights and applications
therefor and to Third Party Software, so far as the Executive
Directors are aware) does not constitute and has never constituted an
infringement of any intellectual property or other rights owned by
any third party.
1.8 There have not been any actions, claims or allegations against any
third party alleging infringement of any of APM's IPRs and (only in
relation to patent rights and applications therefor, so far as the
Executive Directors are aware) there are not and there have not been
any facts matters or circumstances which could give or which might
give or have given rise to any such action, claim or allegation.
1.9
(a) Insofar as Know-how owned or used by APM and/or APM's
Confidential Information or any part thereof has been
disclosed it has been disclosed only under the terms of
confidentiality agreements which are intended to protect (and
purport to have the effect of
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protecting) the confidentiality of that Know-how and/or APM's
Confidential Information and maintain APM's rights therein.
(b) Subject to sub paragraph (a) above, all Know-how owned or used
by APM and APM's Confidential Information has been maintained
as confidential and, so far as the Executive Directors are
aware, no recipient of APM's Confidential Information has made
any unauthorised disclosure or any commercial use of that
information.
(c) None of the Non-Disclosure Agreements contains any grant of
rights to use or exploit any of the Software in any way.
1.10 There are no Intellectual Property Rights (a) which were once owned
or licensed to APM, and (b) which are no longer so owned or licensed
due to the neglect, wilful act or default of APM, and (c) which if
still so owned and licensed would be (i) within the definition of
APM's Product IPRs and (ii) of substantial benefit to APM in the
conduct or expansion of the Business.
1.11 Excepting such of APM's IPRs as are identified in item 1.11 of Part B
of the APM Disclosure Memorandum as licensed to it (or, in relation
only to APM's non-Product IPRs, as are generally or impliedly
identified by the Research Contracts or the Consultancy Contracts as
licensed to it or jointly owned by it), all of APM's IPRs are:
(a) legally and beneficially owned by APM;
(b) all exclusively owned by APM and no third party has any
ownership rights in them; and
(c) not subject to any claims from employees or others.
1.12 None of APM's IPRs which are licensed to it are exclusively licensed
to it.
1.13 Insofar as any of APM's IPRs are the subject of registrations or
applications identified in Part B of the APM Disclosure Memorandum:
(a) all relevant registrations and applications therefor are in
the name of APM or (for such of APM's IPRs as APM does not
own) its licensor;
(b) all application and renewal fees have been paid; and
(c) so far as the Executive Directors are aware, all material
information (whether or not originally in written form)
relating to all such applications and registrations has been
disclosed in parts (I) and (II)
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of Section 7 of Part B of the Schedule to the APM Disclosure
Memorandum.
1.14 APM does not require or make use of any Intellectual Property Rights
(other than APM's IPRs) in carrying on the Business. APM has not done
or omitted to do any act which has resulted or which may result in
any breach or infringement of any third party's Intellectual Property
Rights.
1.15 All agreements and licenses (and all provisions thereof) for the use
by APM of Intellectual Property rights not owned by APM are valid and
subsisting, are described in the APM Disclosure Memorandum and APM is
not in breach of any of the provisions hereof and no disputes have
arisen or are reasonably foreseeable with respect to them.
1.16 There are no consents or agreements which are or may become
reasonably necessary in order (i) for APM to create and develop the
Software to the specifications and with the functionality which APM
is currently representing as reasonably achievable or (ii) for users
of the Software to fully benefit from those specifications and fully
exploit that functionality, other than consents or agreements which
either (A) are already obtained and assured for the relevant future
or (B) are made generally available and can be readily acquired on
usual commercial terms for a cost which has no material effect on APM
or on the commercial value of the Software to APM.
1.17 In particular but without limiting the preceding paragraph, there are
no Intellectual Property Rights or licences under them which are or
may become reasonably necessary in order (i) for APM to create and
develop the Software to the specifications and with the functionality
which APM is currently representing as reasonably achievable or (ii)
for users of the Software to fully benefit from those specifications
and fully exploit that functionality, other than Intellectual
Property Rights or licences under them which either (A) are already
obtained and assured for the relevant future or (B) are made
generally available and can be readily acquired on usual commercial
terms for a cost which has no material effect on APM or on the
commercial value of the Software to APM.
1.18 Notwithstanding any disclosure, APM has never, pursuant to any
Research Contract or Consultancy Contract, licensed or otherwise
supplied to any other party to any of those contracts (its
"Licensee") Intellectual Property Rights licensed or supplied to APM
by a third party (whether or not a party to any of those contracts)
(its "Licensor"), in any way that might give rise to any liability in
APM in relation to infringement of third party rights by its Licensee
resulting from Licensee's use or exploitation of Intellectual
Property Rights belonging to or represented as belonging to the
Licensor (other than liability fully covered by a right of APM to
claim compensation from its Licensor).
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2. THE SOFTWARE
Except as directly disclosed:
2.1 APM exclusively owns all Intellectual Property Rights in the Software
and Supporting Materials subject only to such end-user non exclusive
object code licences within any Customer Contract. The Software is
all the software ever developed or acquired by APM for commercial
exploitation (other than pursuant to any of the Research Contracts).
The Software and the Supporting Material were specified, designed,
written and produced entirely and solely by persons who were at all
material times either:
(a) employees of APM and who produced the Software and the
Supporting Material as part of their duties of employment, or
(b) third parties (or employees of them) who produced the Software
and the Supporting Materials pursuant to written contracts
under which, notwithstanding any disclosure, all ownership and
possession of, and Intellectual Property Rights in, the
resulting Software and Supporting Materials have passed into
the sole ownership of APM. Except as directly disclosed, so
far as the Executive Directors are aware no such person (or
any employee of such person) has ever indicated any intent to
claim or interest in claiming any Intellectual Property Rights
in the Software.
The persons concerned are listed in the Software Statement. No other
persons were or have been involved in the specification, design,
writing or production of the Software or the Supporting Material.
None of the Software is computer-generated within the meaning of the
Copyright Designs and Patents Act 1988 (as amended). All employees of
APM who did work for APM in relation to the Software but have since
ceased to be employees of APM parted from APM on good terms and so
far as the Executive Directors are aware no such person has ever
indicated any intent to claim or interest in claiming any
Intellectual Property Rights in the Software.
2.2 No person other than APM and the current and duly authorised
employees has the Source Code or the Supporting Material in its
possession or is entitled to possess or use the Source Code or the
Supporting Material in any way (including pursuant to a source code
escrow agreement). There are no escrow agreements in force under
which any third party might contingently become entitled to such use
or possession, nor is any person entitled to require such an escrow
agreement to be entered into by APM. APM has in its possession a
complete and functional copy of the Source Code and has verified it
to be complete and functional within the last 7 days.
2.3 The Software:
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(a) when used with such Third Party Software as is embedded in it
or supplied with it:
(i) conforms in all material respects with the User Manuals
and all other written statements as to its features and
capabilities; and
(ii) does not contain any defect which has a materially
adverse effect on its use or operation (save that it is
not warranted as being bug free or error free); and
(b) so far as the Executive Directors are aware, no Software is
not Millenium Compliant
save to the extent that the recorded errors are disclosed in print-
outs from the Radar Bugs Data Base included in Section 8 of Part B of
the Schedule to the APM Disclosure Memorandum.
2.4 The supply and licensing of the Software does not involve or result
in the infringement of any third party's Intellectual Property Rights
and does not require the permission or consent of any third party.
Except as directly disclosed, no Third Party Software is embedded in
any Software or otherwise included in any Product.
3. PRODUCTS, CUSTOMER CONTRACTS AND THIRD PARTY SOFTWARE
3.1 All Third Party Software is clearly identified as such in the APM
Disclosure Memorandum. (In relation to such Third Party Software as
is embedded in any of the Software or otherwise included in any
Product, notwithstanding any disclosure) APM is fully and properly
licensed to use or otherwise deal with all Third Party Software in
the manner in which it has been used or dealt with by APM up to and
including the Closing Date. Where APM has licensed or sub-licensed
the Third Party Software or any part of it to a Customer (whether in
association with the Software or otherwise) it has been and remains
duly authorised and licensed to do so. Save for the parties to the
Customer Contracts, there are no other parties to whom the Software
has been licensed or supplied or who are otherwise entitled to
possess, use or otherwise deal with any Products or to whom APM is
liable to perform any maintenance or other services or provide any
goods in relation to or connection with Products or their use.
3.2 So far as the Executive Directors are aware, there has been no breach
of any of the Customer Contracts nor any instance of any Customer
using, authorising or purporting to authorise the use of the Products
in a manner which is inconsistent with the relevant Customer
Contracts or not authorised by APM.
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3.3 APM had at the time it did so, full authority to enter into each of
the Customer Contracts. The Customer Contracts are valid and
subsisting and no disputes or potential disputes have arisen or been
notified to APM or are reasonably foreseeable with respect thereto.
3.4 APM is not in material breach or default in relation to any of the
Customer Contracts and no claims or allegations have been made by any
person to the effect that APM is in breach of any of the Customer
Contracts and there are no facts, matters or circumstances nor has
APM done or omitted to do any act which could amount to or result in
any such breach or give rise to any such claim or allegation.
3.5 So far as the Executive Directors are aware, no person other than APM
is in breach or default in relation to any of the Customer Contracts
and no claims or allegations have been made by any person to the
effect that any such person is in breach of any of the Customer
Contracts and there are no facts, matters or circumstances nor has
any such person done or omitted to do any act which could amount to
or result in any such breach or give rise to any such claim or
allegation.
3.6 So far as the Executive Directors are aware, there are no grounds for
rescission, breach, avoidance or repudiation of any of the Customer
Contracts or of any other agreement (in whole or in part) or other
transaction relating to the Business to which APM is a party.
3.7 There are no agreements or understandings (written or oral) whereby
any of the Customer Contracts or any other such agreement, instrument
or arrangement may be terminated or rescinded by any party other than
APM or the Customers or whereby the terms may be worsened as against
APM or whereby APM's IPRs or their ownership or exercise may be
prejudiced as a result of anything done or omitted or permitted to be
done by APM.
3.8 APM has obtained and maintained in force all registrations under the
Data Protection Act 1984 or any other similar legislation or
regulations within the European Union which are necessary in order
for APM (or any officer or employee of APM, as appropriate) to
conduct its business in the ordinary and usual course in a lawful and
appropriate manner.
3.9 Except for the claims particulars of which have been disclosed in the
APM Disclosure Memorandum, APM has not received any claims alleging
that the Products are defective or that they have caused or
contributed to damage or personal injury, and except as aforesaid, no
dispute exists between APM and any customer or client of it, nor are
there any circumstances which may give rise to any such dispute.
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3.10 APM has not received any notice or other intimation that any of the
Products infringe any United Kingdom or European Community
regulations relating to safety and manufacture or that any of the
Products sold outside the United Kingdom infringe any regulations in
the country of sale relating to the manufacture of products of their
kind.
3.11 APM's advertising for the Products makes no claims for the
performance and quality of the Products which are inaccurate; APM has
received no complaints from any regulatory body, customer or other
person that such advertising is misleading or deceptive or likely to
cause confusion; and neither the sale nor the manner or terms of sale
of the Products contravene or have contravened the Trade Descriptions
Act 1968, the Consumer Protection Act 1961 or the Unfair Contract
Terms Act 1977.
3.12 No warranties or guarantees have been given or any representation
made in respect of the Products save for the standard terms of APM (a
copy of which is attached to the APM Disclosure Memorandum) and save
for any guarantee or paragraph implied by law; and APM has not
(except as aforesaid) accepted any liability or obligation in respect
of the Products which would apply after the Products have been sold
or supplied.
3.13 Except as directly disclosed, APM has not entered into any agency,
distributorship or management agreements relating to the Products,
other than the VAR Agreements.
3.14 There are no outstanding bids or tenders or sales or service
proposals relating to the Products which, if accepted, would be
likely to result in a loss to APM on performance.
3.15 All sales, servicing and marketing arrangements entered into in
relation to the Products have been entered into at arm's length in
the normal course of business.
4. THE COMPUTER SYSTEM
4.1 The Computer System is effective and operational in all material
respects.
4.2 APM is the beneficial owner free from Encumbrances of all the items
of equipment, hardware, firmware and accessories relating to the
Computer System and no other person has any claims or rights in
respect thereof.
4.3 Save as provided for by the Research Contracts, the Customer
Contracts, and the Third Party Agreements, all information and data
held by APM on the Computer System is beneficially owned by APM free
from Encumbrances, and APM is not subject to any restriction with
regard to the
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use thereof and no third party enjoys any right or permission to copy
or hold any such information or data.
4.4 There are in existence maintenance and support arrangements in
respect of all material equipment, hardware, firmware, software and
accessories used in the Computer System, and APM has not done, or
omitted to do, any act which might entitle any provider of the
maintenance and support services to terminate applicable agreements
or to withhold or refuse to supply any services thereunder; and APM
is not in dispute with such provider regarding its maintenance and
support obligations.
4.5 The Computer System comprises all equipment, hardware, firmware,
software, including source code and object code, supporting materials
and accessories which are necessary to enable APM to carry on its
business in the same manner and to the same extent as it has been
carried on prior to the Closing Date and the rights to use the
Computer System or any part thereof will not be adversely affected by
the transactions effected by this agreement.
4.6 So far as the Executive Directors are aware, no software comprised in
or used with the Computer System is not Millenium Compliant.
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PART C - PROPERTY WARRANTIES
1. TITLE
1.1 The Properties comprise all the properties owned, occupied or
otherwise used in connection with its business by APM.
1.2 Those of the Properties which are occupied or otherwise used by APM
in connection with its business are so occupied or used by right of
ownership or under lease or licence, and the terms of any such lease
or licence permit such occupation or use.
1.3 APM is the legal and beneficial owner of its leasehold interest in
the Properties.
1.4 The information contained in the APM Disclosure Memorandum as to the
tenure of each of the Properties and the principal terms of the
leases, licences and tenancies with the benefit of which each of the
Properties is held is true and accurate in all respects.
2. ENCUMBRANCES
2.1 Save for service charges each of the Properties is free from any
mortgage, debenture, charge, rent-charge, liability to maintain
roadways, lien, annuity or other encumbrance securing the repayment
of monies or other obligation or liability of APM or of any other
person.
2.2 Each of the Properties is free of any tenancy, licence or other
arrangement entitling a person other than APM which owns the same to
occupy the whole or any part.
2.3 None of the Properties is subject to any outgoings, other than
general rates, water rates and insurance premiums and, in the case
of leasehold properties, rent and service charges.
2.4 None of the Properties is subject to any restrictive covenants,
stipulations, easements, profits a prendre, wayleaves, licences,
grants, restrictions, overriding interests or other rights vested in
third parties, and APM has not entered into any agreement or
commitment to give or create any of the foregoing.
2.5 Where any such matters as are referred to in the last four
Statements have been disclosed in the APM Disclosure Memorandum, the
obligations and liabilities imposed and arising under them have been
fully observed and performed, and any payments in respect of them
due and payable have been duly paid.
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2.6 None of the Properties is subject to any option, right of pre-
emption or right of first refusal.
2.7 At the Signing Date each of the Properties is free from any local
land charge, land charge, caution, inhibition or notice, and no
matter exists which is capable of registration against any of the
Properties.
2.8 At the Signing Date no notice relating to the use and enjoyment of
any of the Properties has been received or given or is likely to be
received or given in any circumstance.
2.9 Each of the Properties enjoys access and egress over roads which
prior to the date of this agreement have been adopted by the
appropriate highway authority and are maintainable at the public
expense. Each of the Properties drains into a public sewer and is
served by water and electricity utilities, pipes, sewers, wires,
cables, conduits and other conducting media which connect directly
to the mains without passing through land in the occupation or
ownership of a third party.
2.10 At the Signing Date there are no outstanding actions, disputes,
claims or demands between APM and any third party affecting any of
the Properties or any neighbouring property or any boundary walls
and fences, or with respect to any easement, right or means of
access to any of the Properties.
3. PLANNING MATTERS
3.1 None of the Properties is being or is intended or required by APM to
be used other than for the permitted user thereof for the purposes
of the Town and Country Planning Act 1990, the Planning (Listed
Buildings and Conservation Areas) Act 1990 and the Planning
(Consequential Provisions) Act 1990, the orders and regulations made
thereunder and all legislation of a like nature (the "Planning
Acts").
3.2 Planning permission has been obtained, or is deemed to have been
granted, for the purposes of the Planning Acts with respect to all
existing development on each of the Properties, and no such
permission has been suspended or called in, and no application for
planning permission is awaiting decision.
3.3 Building regulation consents have been obtained with respect to all
development, alterations and improvements to each of the Properties.
3.4 At the Signing Date compliance is being made and has at all times
been made prior to such date in all respects with all planning
permissions, orders, and regulations issued under the Planning Acts
and all building regulation
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consents and bye-laws for the time being in force with respect to
any of the Properties.
3.5 At the Signing Date compliance is being made and has at all times
been made with all agreements under section 106 of the Town and
Country Planning Act 1990 made with respect to any of the
Properties.
3.6 At the Signing Date compliance is being and has been made with all
agreements made under section 38 of the Highways Act 1980 with
respect to any of the Properties.
3.7 At the Signing Date none of the Properties is listed as being of
special historic or architectural importance or is located in a
conservation area.
3.8 All development charges, monetary claims and liabilities affecting
any of the Properties under the Planning Acts or any other such
legislation have been discharged, and no such liability, contingent
or otherwise, is outstanding.
3.9 All planning consents and permissions affecting the Properties are
either unconditional or are subject only to conditions which are
neither unusual, personal nor temporary and which have been
satisfied or fully observed and performed up to the date of this
agreement.
3.10 At the Signing Date there is no outstanding strategy or informal
notice under the Planning Acts relating to any of the Properties or
to any business carried on thereat or to the use thereof, and there
is no outstanding monetary claim or liability, contingent or
otherwise, in respect of any of the Properties in relation to the
Planning Acts.
4. STATUTORY OBLIGATIONS
4.1 At the Signing Date APM has received no notice alleging failure to
comply with any statutory and by-law requirements and all European
Union regulations directives and decisions whether implemented in
the United Kingdom and ratified international conventions.
4.2 At the Signing Date APM has received no notice alleging that there
is any outstanding and unobserved or unperformed obligation with
respect to any of the Properties necessary to comply with the
requirements of any competent authority exercising statutory or
delegated powers.
4.3 There are not in force or required to be in force any licences
whether under the Licensing Act 1964 or otherwise which apply to any
of the Properties.
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5. ADVERSE ORDERS
5.1 At the Signing Date there is no resolution, proposal, scheme or
order, whether or not formally adopted, for the compulsory
acquisition of the whole or any part of the Properties or of any
access or egress therefrom.
5.2 At the Signing Date there are no closing, demolition or clearance
orders, enforcement notices or stop notices affecting any of the
Properties, nor are there any circumstances likely to lead to any
being made.
6. CONDITION OF THE PROPERTIES
6.1 At the Signing Date the buildings and other structures on the
Properties or of which any of the Properties form part are in good
and substantial repair and fit for the purposes for which they are
presently used.
6.2 A fire certificate has been issued in respect of each of the
Properties and at the Signing Date there has been no breach of the
provisions or conditions contained therein.
6.3 As far as the Executive Directors are aware none of the Properties
has been affected by flooding.
6.4 No building or structure on any of the Properties has at any time
been affected by structural damage or electrical defects or by
timber infestation or disease or rising damp or wet or dry rot.
6.5 None of the Properties is subject to any rights of common.
7. LEASEHOLD PROPERTIES
7.1 APM has paid the rent and observed and performed the covenants on
the part of the tenant and the conditions contained in each of the
leases (which expression includes underleases) under which any of
the Properties is held and the last demand (or receipt for rent if
issued) was unqualified, and each such lease is valid and in full
force.
7.2 All licences, consents and approvals required from the landlords and
any superior landlords under any leases of any of the Properties
have been obtained, and the covenants on the part of the tenant
contained in such licences, consents and approvals have been duly
performed and observed.
7.3 There are no rent reviews currently in progress under any of the
leases of any of the Properties.
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7.4 There is not outstanding, unobserved or unperformed any obligation
necessary to comply with any notice or other requirement given by or
on behalf of the landlord under any lease of any of the Properties.
7.5 There are no restrictions in any leases of the Properties which
prevent them from being used now or in the future for their present
use.
7.6 There is no obligation to reinstate any of the Properties by
removing or dismantling any alteration made to it by APM or any of
its predecessors in title and all such alterations must under the
terms of the relevant leases be disregarded on rent reviews.
7.7 As at the Signing Date there have been and are no disputes and as at
such date there are not likely to be any disputes with any landlord.
7.8 No lease of any of the Properties is expressed to be subject to any
rights of re-entry save on the liquidation of the tenant (whether
compulsory or voluntary) or for non-payment of rent or breach of
covenant by the tenant.
8. SUBTENANCIES
The Properties are not held subject to and with the benefit of any
tenancies and subtenancies.
9. GUARANTEES
9.1 There is (save in relation to the Properties) no actual or
contingent liability on the part of APM arising directly or
indirectly out of any agreement, lease, underlease, tenancy,
conveyance, transfer, licence or any other deed or document
whatsoever relating to real property or to any estate or interest
therein entered into by APM including (but without limitation) any
actual or contingent liability arising directly or indirectly out
of:
(a) any estate or interest held by APM as original lessee or
underlessee; or
(b) any guarantee given by APM in relation to a lease or
underlease; or
(c) any other covenant made by APM in favour of any lessor or head
lessor.
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PART D - TAX WARRANTIES
1. RESERVE FOR TAXATION IN THE ACCOUNTS
The Accounts reserve or provide in full for all Taxation for which APM was
in respect of all periods up to the Accounts Date liable or able to be made
liable and the Accounts reserve for or contain a note regarding any
contingent liability or possible deferred liability to Taxation.
2. RETURNS AND PAYMENT OF TAXATION
2.1 All returns, computations and notices which should have been made by
APM for the purposes of Taxation in respect of any accounting period
up to and including the accounting period ending on the Accounts Date
(i) have been made punctually, are correct and on a proper basis, (ii)
contain all information required for all the purposes of Taxation and
(iii) are not the subject of any dispute with the Inland Revenue, the
U.S. Internal Revenue Service ("IRS") a United States State tax
authority or other taxation authority; APM has made all returns and
provided all information required to be provided under the Taxes
Management Act 1970 or other legislation relevant for the purpose or
pursuant to any notice served thereunder; and APM is not involved in
any dispute with the Inland Revenue Authority and/or IRS concerning
any matter likely to affect in any way the liability (whether accrued
contingent or future) of APM to Taxation and is under no liability to
pay any penalty or interest in connection with any claim for Taxation.
2.2 Computations of the profits and losses of APM and of its liability to
Taxation for each of the accounting periods in which it has been
trading or carrying on a business ending prior to the Accounts Date
have been agreed with the Inland Revenue or other appropriate
authority, and there is no unsettled appeal in respect of any year of
assessment nor any back duty claim or other dispute with the Inland
Revenue, HM Customs & Excise, IRS or any other relevant or appropriate
authority as at the date of this agreement, nor are the APM
shareholders aware of any facts or circumstances that may result in
any such appeal, claim or dispute.
2.3 APM has duly and punctually paid to the Inland Revenue, IRS or other
appropriate authority all Taxation for which it is liable as a result
of any act or omission prior to Closing.
2.4 APM has duly and punctually deducted, withheld, or collected for
payment (as appropriate) all Taxation which it has become liable to
deduct, withhold or collect for payment and has paid all such Taxation
to the Inland Revenue, the IRS or other appropriate authority.
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2.5 APM is in compliance with the rules and regulations of the Inland
Revenue, IRS and other authorities and the provisions of ICTA and of
the Internal Revenue Code with respect to transfer pricing, and has
all appropriate documentation to demonstrate that all inter company
pricing between companies under common control is at arms' length.
2.6 There are set out in the APM Disclosure Memorandum particulars of all
notifications and notices received by APM under section 166 of ICTA.
2.7 APM has properly operated the PAYE and National Insurance
Contributions systems and has kept and maintained complete, correct
and up-to-date records for the purposes of the legislation relating
thereto. APM has not paid any remuneration or other earnings and has
not provided any benefits in kind to any employees or any former
employees without deducting or withholding income tax under PAYE or
National Insurance Contributions (or similar provisions in other
countries to the extent applicable to such employees or any former
employees) therefrom.
2.8 APM has not within the six years prior to Closing paid or become
liable to pay any fine, penalty or interest charged by virtue of the
provisions of the Taxes Management Act 1970 or the VATA or similar
provisions in other countries.
2.9 APM has not in the last six years been the subject of a PAYE audit or
an investigation by the Inland Revenue and there are no facts which
are likely to cause a PAYE audit or such an investigation to be made.
2.10 No transaction has been entered into by APM since the Accounts Date
in respect of which APM is required to make a specific return or to
provide information to a relevant Taxation Authority and in respect
of which the time for making such return or providing such
information will expire on or after Closing.
3. TAX CLEARANCES
No transaction has been entered into by APM in respect of which any consent
or clearance from the Inland Revenue, IRS or other appropriate taxation or
governmental authority was required or was or could have been sought.
4. BASE VALUES AND ACQUISITION COSTS
4.1 Save as fully disclosed in the APM Disclosure Memorandum the aggregate
book value (exclusive of any value attributable to an asset in excess
of its cost) of each of the assets of APM in or adopted for the
purposes of the Accounts does not exceed the aggregate written-down
value of such asset for
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the purposes of CAA (or any other statute in another jurisdiction
making similar provision for giving effect for tax purposes to
depreciation of the assets of a business).
4.2 Save as fully disclosed in the APM Disclosure Memorandum if each of
the capital assets of APM were disposed of for a consideration equal
to the book value of that asset in, or adopted for the purposes of,
the Accounts, no liability to corporation tax (or any other Taxation
applicable in another jurisdiction) on chargeable gains or balancing
charge would arise.
4.3 APM does not own and has not agreed to acquire any asset, nor has it
received or agreed to receive any services or facilities (including
without limitation the benefit of any licences or agreements), the
consideration for the acquisition or provision of which was or will be
in excess of its market value or otherwise than on an arm's length
basis.
4.4 APM has not disposed nor agreed to dispose of any asset, nor has it
provided or agreed to provide any services or facilities (including
without limitation the benefit of any licences or agreements), the
consideration for the disposal or the provision of which was or will
be less than its market value or otherwise than on an arm's length
basis.
5. DISTRIBUTIONS AND PAYMENTS
5.1 No security issued by APM and remaining in issue as at today's date
was issued in such circumstances that the interest payable thereon
falls to be treated as a distribution under section 209 or section 418
of ICTA.
5.2 APM has not in the ten calendar years prior to Closing repaid, or
agreed to repay, or redeemed, or agreed to redeem, or purchased or
agreed to purchase any of its share capital, or capitalised or agreed
to capitalise, in the form of debentures or redeemable shares, any
profits or reserves of any class or description; and APM has also not
issued any share capital as paid up otherwise than by the receipt of
new consideration.
5.3 APM has not issued any share capital to which the provisions of
section 249 of ICTA could apply nor does it own any such share
capital.
6. TAXATION CLAIMS, LIABILITIES AND RELIEFS
6.1 There are set out in the APM Disclosure Memorandum full details of all
matters relating to Taxation in respect of which APM (either alone or
jointly with any other person) has, or at Closing will have, an
outstanding entitlement:
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(a) to make any claim for relief under the ICTA or any other statute
relating to Taxation;
(b) to make an appeal (including a further appeal) against an
assessment to Taxation; or
(c) to make an application for the postponement of, or the payment by
instalments of, any Taxation.
(d) to disclaim or require the postponement of any allowance or
relief.
6.2 APM is not, nor will it become, liable to pay, or make any
reimbursement or give any indemnity in respect of, any Taxation (or
any amounts corresponding thereto) in consequence of the failure of
any person to discharge that Taxation within any specified period or
otherwise, where such Taxation relates to a profit, income or gain,
transaction, event, omission or circumstance arising, occurring or
deemed to arise or occur (whether wholly or partly) prior to Closing.
6.3 There has been no major change in the nature or conduct of any trade
carried by APM since its incorporation and as at Closing none of the
activities of any such trade are or have at any time previously become
small or negligible in scale such that any losses of APM would or
could be precluded from being carried forward after Closing.
7. TAX RESIDENCE AND STATUS
7.1 APM has been resident for tax purposes in the United Kingdom at all
times since its incorporation and will be so resident at Closing, and
APM has never been resident in any other jurisdiction.
7.2 APM has not at any time been a trustee of any settlement for the
purposes of TCGA.
8. DISALLOWANCE OF DEDUCTIONS
No rents, interest, annual payments, emoluments, management or service fees
or charges or other sums of an income nature (including benefits in kind)
paid or provided by APM since the Accounts Date or which APM is under an
obligation to pay or provide in the future are or may under the law
currently in force be wholly or partially disallowable as deductions or
charges in computing profits or against profits for the purposes of
corporation tax (or any other applicable Taxation) by reason of any
statutory provision relating to Taxation.
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9. CORPORATION TAX ON CHARGEABLE GAINS
9.1 Neither the signing of this agreement nor Closing will result in any
profit or gain being deemed to accrue to APM for the purposes of
Taxation whether pursuant to section 179 of TCGA or otherwise.
9.2 APM has not disposed of or acquired any asset in such circumstances
that the provisions of section 17 of TCGA did or could apply thereto.
9.3 No Taxation is or may become payable by APM pursuant to section 189 of
TCGA in respect of any transaction or event occurring on or prior to
Closing.
9.4 APM has not at any time before or since the Accounts Date made any
claim under sections 152 to 156 or 175 or 247 of TCGA or under any
other provision which could affect the amount of any gain accruing or
treated as accruing on a disposal of any asset by APM; and no claim
has been made or is capable of being made by any other company which
affects or could affect the amount or value of the consideration for
the acquisition of any asset by APM which is to be taken into account
in calculating any gain on subsequent disposal.
9.5 APM has not made any claim under any of the following:
(a) section 279 of TCGA (assets situated outside the United Kingdom);
(b) sections 48 or 280 of TCGA (tax on chargeable gains payable by
instalments);
(c) section 24 of TCGA (assets of negligible value);
(d) sections 253 and 254 of TCGA (relief for loans to traders and
debts on qualifying corporate bonds).
9.6 APM is not liable to be assessed to corporation tax on chargeable
gains or to capital transfer tax or inheritance tax as donor or donee
of any gift or transferor or transferee of value.
9.7 There has not accrued any gain in respect of which APM may be liable
to corporation tax on chargeable gains by virtue of the provisions of
section 13 of TCGA.
9.8 APM has not since its incorporation been a member of any group or
consortium of companies for the purposes of group relief and/or
consortium relief (Chapter IV of Part X to ICTA), and corporation tax
on chargeable gains (Chapter 1 of Part VI of TCGA) and has not since
its incorporation
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been, or owned, a 51% subsidiary (as defined in section 838 of ICTA)
for the purposes of surrender of surplus advance corporation tax under
section 240 of ICTA or the making of group income elections under
section 247 of ICTA.
9.9 No consideration due to APM after disposal has, so far as the APM
shareholders are aware, become irrecoverable within the meaning of
section 48 of TCGA so as to entitle APM to an adjustment.
10. CLOSE COMPANIES
10.1 No distribution within section 418 of ICTA has ever been made by APM,
and no such distribution will be made prior to Closing.
10.2 No loan or advance within sections 419 to 422 of ICTA (inclusive) has
ever been made by APM, nor has APM released or written off or agreed
to release or write off the whole or any part of any such loan or
advance.
11. INHERITANCE TAX
11.1 APM has not made any transfers of value for the purposes of section 94
of IHTA.
11.2 APM has not been a party to associated operations in relation to a
transfer of value within the meaning of section 268 of IHTA.
11.3 No asset owned by, or shares or securities in, APM is liable to be
subject to any sale, mortgage or charge by virtue of section 212 of
IHTA.
11.4 There is not outstanding any Inland Revenue charge (as defined in
section 237 of IHTA) over any asset of APM or in relation to any
shares in the capital of APM.
12. TAX AVOIDANCE
12.1 APM has not entered into or been party to any transaction, scheme or
arrangement designed wholly or partly for the purpose of avoiding
Taxation, and in particular but without prejudice to the generality of
the foregoing any transaction, scheme or arrangement, which may result
in a liability to Taxation on APM pursuant to any of the following
sections, namely sections 56, 56A, 116, 395 and 399 of ICTA; sections
703-746 of ICTA (inclusive); section 767A of ICTA; section 770 of
ICTA; sections 774, 775 and 776 of ICTA; section 106 of TCGA; sections
29 and 30 of TCGA; sections 61, 75 and 142 of CAA.
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12.2 The Inland Revenue, the IRS or its equivalent in other countries has
not investigated any transactions or arrangements involving APM with
a view to applying section 770 of ICTA, or equivalent legislation in
other countries, and no circumstances exist which would result in
such an investigation, if started, resulting in any increased
liability to taxation of APM.
12.3 APM has not entered as lessor into any leasing transactions in
respect of which capital allowances may be restricted or disallowed
under section 22 or 47 of CAA.
12.4 APM has not without the prior consent of the Treasury entered into
any of the transactions specified in sections 765 to 767 of ICTA
(inclusive).
13. MISCELLANEOUS
13.1 APM has not made any claim under section 242 or section 584 or
section 585 of ICTA or any gain to which section 279 of TCGA could
apply.
13.2 APM has not entered into any such transaction as is mentioned in
sections 780, 781 and 782 of ICTA.
13.3 There has been no transfer of a trade or of part of a trade by APM in
respect of which the provisions of sections 140 - 140D of TCGA might
or would apply.
13.4 APM has not received any foreign loan interest on which double
taxation relief will, or may, be restricted under section 798 of
ICTA.
13.5 APM does not own, control or have any interest in any controlled
foreign company or companies within the meaning of section 747 of
ICTA.
13.6 APM has no material interest in an offshore fund which is a non
qualifying offshore fund within the meaning of section 757 of ICTA.
13.7 APM has not made any exempt distribution or received a chargeable
payment within sections 213 to 218 (inclusive) of ICTA with the
period of five years prior to the Closing Date.
13.8 APM has not redeemed, repaid or purchased, or agreed to redeem, repay
or purchase, any of its own shares or any of its loan capital.
13.9 APM has not declared or paid a foreign income dividend within section
246A of ICTA.
13.10 APM has not entered into any loan relationship which is for an
unallowable purpose as described in paragraph 13 of schedule 9 to the
Finance Act 1996.
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13.11 APM has not entered into any loan relationships or related
transactions which are not at arm's length for the purposes of
paragraph 11 of schedule 9 to the Finance Act 1996.
13.12 APM has not issued any relevant discounted security as defined in
schedule 13 to the Finance Act 1996.
13.13 APM has not entered into any loan relationship with a connected
person such that section 87 of the Finance Act 1986 could apply to
that relationship and APM has complied with all relevant provisions
contained in Chapter II of Part IV of the Finance Act 1996 in
respect of any loan relationships to which APM is a party.
13.14 All loan relationships to which APM is a party comprise normal
commercial loans for the purposes of Schedule 18 ICTA.
14. VALUE ADDED TAX
14.1 APM:
(a) is duly registered for the purposes of VAT and has been so
registered at all times when it has been required to be
registered by the relevant legislation;
(b) has complied [in all national reports] with all statutory
requirements, orders, provisions, directions or conditions
relating to VAT, including (for the avoidance of doubt) the
terms of any agreement reached with Customs and Excise;
(c) maintainsand has at all times maintained complete, correct and
up-to-date records for the purposes of the legislation
relating to VAT and has preserved such records in such form
and for such periods as are required by such legislation;
(d) is not in arrears with any payment or returns required under
any legislation relating to VAT, or liable to any abnormal or
non-routine payment, or any forfeiture or penalty or default
surcharge, or to the operation of any penal provision relating
to VAT or to pay any interest as a result of making late VAT
and returns;
(e) has not been required by Customs and Excise to give security.
14.2 APM is not and has not at any time been treated as a member of a
group of companies for VAT purposes and no application for it to be
so treated has at any time been made.
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14.3 No act or transaction has been effected in consequence whereof APM
is or may be held liable for any VAT chargeable against any other
company; and APM is not, and has not agreed to become an agent,
manager or factor for the purposes of section 47 of VATA of any
person who is not resident in the United Kingdom.
14.4 All supplies made by APM are taxable supplies and APM is not and
will not be denied credit for any input tax by reason of the
operation of any provisions of VATA and the regulations made
thereunder; and all input tax for which APM has claimed credit has
been paid by APM in respect of supplies made to it relating to goods
or services used or to be used for the purpose of APM's business.
14.5 No supplies have been made to APM to which the provisions of section
8 to VATA might apply.
14.6 The APM Disclosure Memorandum contains:
(a) details of all claims made by APM in the six years immediately
preceding the date of this agreement in respect of which a
refund of VAT has been received by APM under section 36 of
VATA;
(b) all particulars of any claim for bad debt relief made in the
six years immediately preceding the date of this agreement, or
which may be made, by APM under section 36 of VATA in respect
of the supply of goods or services for which the whole or part
of the consideration has been written off in the accounts of
APM;
and APM holds the records or documents required to be held by
regulations 167 and 168 of the Value Added Tax Regulations 1995 so
that a claim may be made at the date hereof or subsequently for a
refund of VAT under section 36 of VATA in respect of the supply of
any goods or services.
14.7 APM does not have an interest in any land in relation to which an
election has been made either by APM or by any other person to an
exemption from VAT pursuant to the provisions of schedule 10 of
VATA; and APM is not a party to any agreement or other arrangement
in relation to any land pursuant to which it has agreed not to elect
to waive exemption from VAT pursuant to schedule 10 of VATA, nor is
APM party to any such agreement or arrangement with any other person
pursuant to which that other person has agreed not to make such an
election.
14.8 All the buildings and civil engineering works on land in which APM
has any interest have been completed for the purposes of Group 1,
schedule 9 of VATA more than three years prior to Closing.
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14.9 APM is not a "developer" as defined in paragraph 5 of schedule 10 of
VATA in relation to any building or work within paragraph 5(2) of
that schedule or to any reconstructions, enlargements or extensions
within paragraph 5(8) of that schedule either currently being
constructed, reconstructed, enlarged or extended or whose
construction, reconstruction, enlargement or extension was completed
within the ten year period prior to Closing; and no tenant, lessee
or licensee of APM has notified APM, or could become liable to
notify APM, under paragraph 7 of that schedule if either of the
events referred to in paragraph 5(1)(a) or (b) of that schedule were
to occur in relation to any such building, work, reconstructions,
enlargements or extensions.
14.10 APM does not use in the course or furtherance of its business any
item to which Part XV of the Value Added Tax Regulations 1995
applies and in respect of which the period of adjustment will not
have expired on or before Closing.
15. PENSION SCHEMES
APM has not since the Accounts Date received any payment to which
section 601 of ICTA applies.
16. SHARE SCHEMES
16.1 APM is not a participating company in any scheme approved under
section 185 or 186 of ICTA.
16.2 APM does not have in issue any shares which fall within Chapter II
of Part III of the Finance 1988 Act.
16.3 APM has not established or contributed to a qualifying employees
share ownership trust as defined in schedule 5 of the Finance 1989
Act.
17. CAPITAL ALLOWANCES
17.1 APM has not since the Accounts Date done or omitted to do, or agreed
to do or permitted to be done, any act (other than the sale of an
asset at a price equal to its market value), nor has APM suffered
any occurrence, as a result of which any disposal value has been or
may be required to be brought into account under section 24 of CAA,
nor has there been, nor may there be, any recovery from APM of
excess relief within section 42 or 47 of CAA.
17.2 Since the Accounts Date APM has not done, nor has it omitted to do,
nor agreed to do, nor permitted to be done, any act, nor has it
suffered any
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occurrence, as a result of which any balancing charge has arisen or
may arise under section 4 of CAA.
17.3 APM has not made any election under section 37 of CAA or engaged in
any short-term leasing within section 40 of CAA.
17.4 APM has not taken or granted a lease of any assets in respect of
which an election has been made under section 53 or 55 of CAA.
18. STAMP DUTY AND STAMP DUTY RESERVE TAX
18.1 APM has duly paid all stamp duty and all stamp duty reserve tax for
which it has at any time been liable, and all documents which
require to be stamped and which form part of title to any asset or
which APM may need to produce in court in evidence have been duly
stamped.
18.2 Within the 5 years ending on the date of this agreement APM has not
made any claim for relief or exemption under section 42 of the
Finance 1930 Act or sections 75 to 77 of the Finance 1986 Act.
19. GENERAL
19.1 No act or transaction has been effected in consequence whereof APM
has is or may be held liable for any Taxation primarily chargeable
against some other person.
19.2 APM does not operate any scheme approved under section 202 (payroll
deduction scheme in respect of donations to charity) or under
sections 169 to 184 (profit related pay) of ICTA.
19.3 APM is not and has never been (i) a "passive foreign investment
company" within the meaning of Section 1297 of the Internal Revenue
Code, (ii) a "foreign personal holding company" within the meaning
of Section 553 of the Code, or (iii) a "controlled foreign
corporation" within the meaning of Section 957 of the Internal
Revenue Code. This warranty is being provided only for the purposes
of the US Taxation section in Part III of the Offer Document, and
shall be deemed to be untrue or incorrect only in the event that
Citrix incurs a loss as a result of a misstatement of material fact
or an omission to state a material fact in the US Taxation section
in Part III of the Offer Document directly related to this warranty.
The APM Statements are given subject to the matters which have been disclosed to
Citrix in terms of the APM Disclosure Memorandum (including all documents
annexed thereto). Citrix is not entitled to indemnification in respect of any
matter which is or is deemed by
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the terms of the APM Disclosure Memorandum to have been disclosed to it. A copy
of the APM Disclosure Memorandum (and all documents annexed thereto) is
available for inspection at the offices of Taylor Joynson Garrett, Carmelite, 50
Victoria Embankment, Blackfriars, London EC4Y 0DX during normal business hours
while the Offers remain open for acceptance.
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