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CWORKS ANNOUNCEMENTS

General Announcement Reference No CC-060327-36295
Date Announced	18/04/2006
Subject	CWORKS SYSTEMS BERHAD ("THE COMPANY") - ACQUISITION OF BUSINESS FOR DEVELOPMENT AND MARKETING OF MOBILE TECHNOLOGY SOFTWARE
Type	Announcement
Contents : 1. INTRODUCTION Avenue Securities Sdn Bhd, on behalf of the Board of Directors of CWorks, is pleased to announce that Nextkind Products Sdn Bhd ("NPSB"), a 51%-owned subsidiary of the Company, has entered into two agreements dated 17 April 2006 to acquire certain assets, liabilities and intellectual properties rights from Sapura Nokia Software Sdn Bhd ("SNS") as follows:- a) Sale of Business Agreement ("SBA") between NPSB and SNS for NPSB to acquire/assume certain assets and liabilities (details of which are set under Section 2.1.1 hereunder) of SNS's business in the development and marketing of mobile technology software for a cash consideration of RM250,000 ("Purchase Consideration"); and b) Deed of Absolute Assignment of Intellectual Property Rights ("DOA") between NPSB and SNS wherein SNS shall assign its intellectual property rights of its business to NPSB as part of the Purchase Consideration. (The transactions contemplated under the SBA and DOA shall collectively be referred to as "the Business Acquisition") 2. DETAILS OF THE BUSINESS ACQUISITION NPSB, which is currently dormant, was incorporated on 23 November 2005 in Malaysia with an authorised share capital of RM100,000 comprising 100,000 ordinary shares of RM1.00 each of which 50,000 ordinary shares have been issued and fully paid up. With the Business Acquisition, NPSB's principal activities will be to research, design, implement, test, promote, market and sell software products focusing in mobile technologies. 2.1 Salient terms of the SBA 2.1.1 Purchase of assets and liabilities The assets to be acquired by NPSB from SNS comprise office equipment, fixture and fittings and intellectual property rights currently held by SNS ("Assets"). The liabilities to be assumed by NPSB comprise lease, hire-purchase and rental agreements for computer hardware currently being used by SNS ("Liabilities"). The Liabilities amount to approximately RM50,000. Pursuant to the above, SNS shall novate to NPSB various agreements with third parties for provision of mobile content, maintenance and applications as well as rental/lease agreement entered into by SNS. 2.1.2 Approval NPSB and SNS shall obtain the approvals of their respective Boards of Directors for the Business Acquisition. 2.1.3 Completion The Business Acquisition shall be deemed effected and completed on 1 January 2006 or such other date as may be agreed by NPSB and SNS ("Effective Date"). 2.1.4 Payment Terms The Purchase Consideration shall be paid in the following manner: (i) RM50,000 shall be payable within 7 business days upon the execution of the SBA; (ii) RM100,000 shall be payable within 6 months from the Effective Date; and (iii) the remaining consideration of RM100,000 shall be payable within 12 months from the Effective Date. 2.2 Salient Terms of the DOA 2.2.1 Assignment In consideration of the Purchase Consideration (to be paid pursuant to the SBA) payable by NPSB, SNS as the registered and beneficial owner of its software copyrights ("IP Rights") agree to absolutely assign to the NPSB the IP Rights. 2.2.2 Conditionality of the DOA The DOA is conditional upon the following:- (i) the completion of the SBA; and (ii) all approval consents and approvals required to effect the assignment of the IP Rights. The Purchase Consideration (which will also include consideration for the IP Rights as well) was arrived at on a willing-buyer willing-seller basis. 3. SOURCE OF FUNDS The Purchase Consideration will be financed in cash, through the internally generated funds of CWorks. 4. RATIONALE FOR THE BUSINESS ACQUISITION The Business Acquisition would enable CWorks to further expand its current scope of services and products to include mobile technology software to its existing computerised maintenance management systems. 5. FINANCIAL EFFECT OF THE BUSINESS ACQUISITION 5.1 Earnings The Business Acquisition is expected to contribute positively to the Company's consolidated earnings for the financial year ending 31 December 2006 and beyond. 5.2 Net Assets, Share Capital and Substantial Shareholders' Shareholdings The Business Acquisition is not expected have significant effects on the net assets of CWorks for financial year ending 31 December 2006. The Business Acquisition will not have any effect on the share capital and shareholding structure of CWorks. 6. APPROVALS REQUIRED FOR THE BUSINESS ACQUISITION Save for the approvals from the Board of Directors of NPSB and SNS, no other approvals are required for the Business Acquisition. 7. DIRECTORS AND SUBSTANTIAL SHAREHOLDERS' INTEREST To the best of the knowledge and belief of the Board of Directors of CWorks, none of the directors and / or substantial shareholders of CWorks and /or any persons connected to them have any interest, direct or indirect in the Business Acquisition. 8. DIRECTORS STATEMENT The Directors of CWorks, after careful deliberation, are of the opinion that the Business Acquisition is in the best interest of the Company. This announcement is dated 18 April 2006.