EXHIBIT 10.56
DATED 23 JUNE 2000
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THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND (1)
NOVA CORPORATION (2)
- and -
EUROCONEX TECHNOLOGIES LIMITED (3)
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JOINT VENTURE AGREEMENT
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CONTENTS
No Clause Page
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1. Definitions and interpretation.................................................................... 1
2. Completion........................................................................................ 10
3. The Business...................................................................................... 11
4. Directors......................................................................................... 13
5. Management of the Company......................................................................... 15
6. Finance........................................................................................... 15
7. Transfer of Shares................................................................................ 16
8. Deadlock.......................................................................................... 17
9. Distribution policy............................................................................... 19
10. Warranties........................................................................................ 19
11. Undertakings...................................................................................... 20
12. Confidentiality................................................................................... 32
13. Restrictions on announcements..................................................................... 33
14. No partnership.................................................................................... 33
15. Conflict with Articles of Association............................................................. 33
16. Remedies.......................................................................................... 33
17. Payments and costs................................................................................ 34
18. Transfer.......................................................................................... 34
19. Entire agreement.................................................................................. 35
20. Variation......................................................................................... 35
21. Notices........................................................................................... 35
22. Waiver............................................................................................ 36
23. Severability...................................................................................... 36
24. Counterparts...................................................................................... 37
25. Further assurance................................................................................. 37
26. Governing law and jurisdiction.................................................................... 37
Schedule 1 Details of the Company................................................................... 39
Schedule 2 Completion............................................................................... 40
Schedule 3 Memorandum and Articles of Association................................................... 41
Schedule 4 Deed of Adherence........................................................................ 42
Schedule 5 Pre-emption provisions................................................................... 44
Schedule 6 Asset Contribution Agreement............................................................. 50
Schedule 7 Outsourcing Agreement.................................................................... 51
Schedule 8 NOVA Software License Agreement.......................................................... 52
Schedule 9 BOI Services Agreement................................................................... 53
Schedule 10 Sphere of operations..................................................................... 53
Schedule 11 Matters requiring Shareholder consent or Board approval.................................. 55
Schedule 12 Business Plan............................................................................ 59
Schedule 13 Econex Distribution Agreement............................................................ 60
THIS AGREEMENT is made on the 23/rd/ day of June 2000 with the intent that it
should be effective from 1/st/ April 2000
BETWEEN:
(1) THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND, an unregistered
company established in Ireland, whose head office is Xxxxx Xxxxxx
Xxxxxx, Xxxxxx 0, Xxxxxxx ("BOI");
(2) NOVA CORPORATION, a company incorporated under the laws of the State of
Georgia, whose registered office is at Xxx Xxxxxxxxx Xxxxxxx, Xxxxx
000, Xxxxxxx, Xxxxxxx 00000, XXX ("NOVA"); and
(3) EUROCONEX TECHNOLOGIES LIMITED a company incorporated in Ireland with
registered number 327239, whose registered office is at Xxxxxx Xxx
Building, Earlsfort Centre, Earlsfort Terrace, Dublin 2 (the
"Company").
RECITALS:
(A) The Company is an Irish private company limited by shares incorporated
on 26th day of April, 2000 under the Companies Acts, 1963 to 1999.
Further details of the Company are set out in Schedule 1.
(B) NOVA and BOI each hold 1 Share in the capital of the Company and now
wish to enter into this Agreement for the purposes of regulating their
joint venture on the terms set out below.
(C) Each of the Parties enters into this Agreement in consideration of each
of the other Parties entering into this Agreement and accepting the
terms, undertakings and covenants contained herein.
IT IS AGREED as follows:
1. Definitions and interpretation
1.1 In this Agreement, where the context so admits, the following words and
expressions shall have the following meanings:
"Ancillary means the Asset Transfer Agreement, the
Agreement" Outsourcing Agreement, the Econex Distribution
Agreement, the NOVA Software License Agreements,
the BOI Services Agreement, and the NOVA Services
Agreement;
"Articles means the articles of association to be adopted
of Association" by the Company in the form set out in Schedule 3
and any reference to an "Article" shall be a
reference to that article of the Articles of
Association;
"Asset Contribution the asset contribution agreement between BOI and
Agreement" the Company in the form set out in Schedule 6;
"Associated means
Company"
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(a) in relation to BOI, any subsidiary
undertaking of BOI or any joint venture
vehicle of any of them (excluding any Member
of the Group); and
(b) in relation to NOVA, any subsidiary
undertaking of NOVA or any joint venture
vehicle of any of them (excluding any Member
of the Group);
"Board" means the Company's board of directors or the
Directors present (personally or by their
alternates) at any meeting of the Directors duly
convened and held;
"BOI Director" means a non-executive Director appointed by the
BOI Shareholder pursuant to Clause 4.1;
"BOI Merchant at any time, means merchant customers of the
Customers" Company located in Ireland, Northern Ireland or
the United Kingdom at such time which are
introduced to the Company by BOI pursuant to the
provisions of the Outsourcing Agreement, including
merchant customers of BOI immediately prior to
Completion but excluding any such merchant
customers at such time who no longer receive a
significant portion of their banking requirements
from BOI or its subsidiary undertakings;
"BOI Services means the services agreement between BOI and the
Agreement" Company, in the form set out in Schedule 9;
"BOI Share" means an Ordinary Share of 1 par value in the
share capital of the Company held by BOI or its
permitted transferee hereunder, having the rights
and benefits and being subject to the restrictions
set out in the Articles of Association;
"BOI Shareholder" means the registered holder of one or more BOI
Shares;
"Business" means the business of the Group as described in
Clause 3.1 and such other business as the
Shareholders may agree in writing from time to
time should be carried on by the Company and the
other Members of the Group (provided that the
provisions of Clauses 11.1 and 11.3(a)(ii) shall
not apply to the Business as extended without the
prior approval of each Shareholder);
"Business Day" means any day (except any Saturday or Sunday) on
which banks in Dublin generally are open for
business;
"Business Plan" means, at the date of this Agreement, the
Company's first annual business plan in the form
set out in Schedule 12 and at any subsequent date,
the most recent annual business plan of the
Company and the Group approved in accordance with
Clause 11.7;
"Buy-Sell Notice" has the meaning given to that phrase in Clause
8.4(a);
"Card" means any form of credit card, debit card, charge
card, stored value
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card, loyalty card or any virtual card which
permits or enables transactions on a customer's
account;
"Change in Control" shall be deemed to occurred in relation to BOI or
NOVA, as the case may be, if:
(a) any person acquires or controls, whether
directly or indirectly, shares or securities
that ultimately confer in aggregate not less
than 51% of the voting rights in BOI or NOVA,
as the case may be; or
(b) any two or more persons who actively
cooperate in the doing, or procuring of the
doing of, any act, with the result that one
or more of them acquires or controls, whether
directly or indirectly, shares or securities
that ultimately confer in aggregate not less
than 51% of the voting rights in BOI or NOVA,
as the case may be;
"Circulation Period" has the meaning given to that phrase in Clause
8.1;
"Companies Acts" means the Companies Acts, 1963 to 1999;
"Competitor" means
(a) in the case of BOI, a person actually
competing with BOI in the provision of
general banking and financial services in
Ireland; and
(b) in the case of NOVA, a person actually
competing with NOVA in the United States;
"Completion" means completion of the matters referred to in
Schedule 2;
"Completion Date" means the date of this Agreement;
"Confidential means:
Information"
(a) (i) all information of whatever nature
(whether oral, written or in any other
form, in whatever medium stored or
maintained, including magnetic or digital
form) containing, consisting or being in
the nature of:
(A) non-public, proprietary,
confidential or business information
relating to; or
(B) intellectual property, business
methods or know-how of any kind
owned or developed by,
any member of the Group, any other Party,
any of their respective Associated
Companies (the "Relevant
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Person") or any customer of any of them,
which is obtained from time to time by or
on behalf of any Relevant Person (in any
capacity), either orally, in writing or
otherwise from any other Relevant Person
or anyone acting on a Relevant Person's
behalf or any Relevant Person's
customers, or pursuant to discussions
with directors, employees, advisers or
agents of any Relevant Person;
(ii) the terms and conditions of this
Agreement; and
(iii) the terms and conditions of the Ancillary
Agreements; and
(b) all notes, analyses, valuations, opinions,
papers, compilations, studies or other data or
materials or documents prepared by a Relevant
Person (in any capacity), his agents and/or
advisers which are derived from or generated from
or otherwise relating to or reflecting or
containing any such information as is described
in (a) above;
"Deed of Adherence" means a deed in the form attached as Schedule 4
pursuant to which a transferee of Shares agrees
to be bound by all the terms of this Agreement as
if it had been a signatory hereto;
"Deemed Transfer has the meaning given to that phrase in
Notice" paragraph 3 of Schedule 5;
"Director" means any director of the Company from time to
time;
"Dissolution Period" has the meaning given to that phrase in Clause
8.3;
"Econex Distribution means the software distribution agreement
Agreement" between NOVA and the Company in the form set out
in Schedule 13;
"Effective Date" means 1st April 2000;
"Exclusive up to 31/st/ December 2002, means the Territory
and after 00/xx/ Xxxxxxxxx" December 2002, means
those countries in the Territory in which the
Group's management:
(a) has conducted (or procured the conduct of);
or
(b) is conducting (or procuring the conduct of),
significant marketing efforts by 31 December
2002, provided that there shall be deemed to be
excluded from (a) and (b) above:
(i) any countries in the Territory in respect of
which the Group has formally ceased to
conduct marketing efforts by 31 December
2002; and
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(ii) any countries in the Territory in which the
Group is not actively processing
transactions on behalf of merchants located
in such countries by 30 June 2004,
and provided further that:-
(A) if BOI or NOVA or their Associated no longer
hold any Shares, any countries in which the
Group is not at the time of such cessation
actually carrying on the Business or
conducting significant and ongoing marketing
efforts shall be deemed not to form part of
the Exclusive Territory; and
(B) the Shareholders may by agreement in writing
extend the scope of the Exclusive Territory
to cover countries in the Extended
Territory;
"Expert" has the meaning given to that phrase in paragraph
6.6 of Schedule 5;
"Extended Territory" at any time, means those countries specified in
Part 2 of Schedule 10 where the Group conducts the
Business at such time;
"Financial Year" means the financial year (as defined in the
Companies Acts, 1963 to 1999) of the Company
determined by the Board;
"Group" means the Company, its subsidiary from time to
time and any other persons or vehicles in which
the Group has an ownership interest and through
whom the Group conducts the Business and the
expression "Member of the Group" shall be
construed accordingly;
"Initiating the meaning given to that phrase in Clause 8.4(a);
Shareholder"
"Management" means the Chief Executive, the Chief Financial
Officer, the Chief Operations Officer and the
Chief Officer of the Company;
"Merchant means any customer who has a contract or other
Customer" arrangement with BOI for the provision of services
included in the Business and receives the benefit
of services provided by the Company pursuant to
the Outsourcing Agreement, including, without
limitation, any BOI Merchant Customer;
"Notice Period" has the meaning given to such expression in sub-
clause 8.4(a);
"NOVA Director" means a non-executive Director appointed by the
NOVA Shareholder pursuant to Clause 4.1;
"NOVA Services means the agreement on terms to be agreed
Agreement" NOVA concerning the provision of Merchant
accounting services from NOVA to the Company;
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"NOVA Share" means an Ordinary Share of []1 par value in the
share capital of the Company held by NOVA or its
permitted transferee hereunder, having the rights
and benefits and being subject to the restrictions
set out in the Articles of Association;
"NOVA Shareholder" means the registered holder of one or more NOVA
Shares;
"NOVA Software means the software licence agreement between
License Agreement" NOVA (as licensor) and the Company, in the form
set out in Schedule 8;
"Open Market the meaning given to that phrase in paragraph
Value" 6.7 of Schedule 5;
"Outsourcing means the outsourcing agreement between the
Agreement" Company and BOI in the form set out in Schedule 7;
"Parties" means the parties to this Agreement and "Party"
means any one of them, including any other person
who becomes a member of the Company and who agrees
to be bound by the provisions of this Agreement by
executing a Deed of Adherence;
"Period" has the meaning given to that phrase in Clause
11.1(a):
"Permitted Target" has the meaning given to that phrase in Clause
11.6(e);
"Potential Business" has the meaning given to that phrase in Clause
11.3(a)(ii)(A);
"Potential Deadlock" means any situation in which:
(a) by virtue of a substantial disagreement
amongst the Shareholders, which is manifested
by an equality of votes at any two
consecutive votes or meetings of the
Shareholders;
(b) by virtue of a substantial disagreement
amongst the Shareholders, which is manifested
by the Group not proceeding to carry out or
agreeing to carry out any of the matters
referred to in Part 1 of Schedule 11 within
10 Business Days of the matter being formally
presented to the Shareholders for approval at
a time when one Shareholder wishes the
Company to proceed with such matter; or
(c) by virtue of an inability to form a quorum at
any two meetings or adjourned Shareholders'
meetings,
any of the matters referred to in Part 1 of
Schedule 11 cannot be resolved;
"Proceedings" has the meaning given to that phrase in Clause
26.2;
"Prescribed Price" has the meaning given to that phrase in paragraphs
6.2 and 6.3 of Schedule 5;
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"Purchase Offer" has the meaning given to that phrase in Clause
8.4(a);
"Receiving has the meaning given to that phrase in Clause
Shareholder" 8.4(a);
"Relevant Date" has the meaning given to that phrase in Clause
11.5(g);
"Relevant Shares" has the meaning given to that phrase in paragraph
4.1(a), 5.1 or 5.2 of Schedule 5, as the case may
be;
"Representative" in relation to a Shareholder, means any person or
persons who have (or will) become entitled to
legal or beneficial ownership of its Shares:
(a) by reason of such Shareholder's insolvency;
or
(b) for any reason specified in paragraph 3(e) of
Schedule 5;
"Sale Offer" has the meaning given to that phrase in Clause
8.4(a);
"Scheme Rules" the scheme rules if any from time to time
in force governing participation in the operation
of a Card scheme;
"Share" means a share in the capital of the Company;
"Shareholder" means any registered holder of one or more Shares
from time to time;
"Territory" means the countries in which the Group conducts,
or intends to conduct, the Business, being those
countries specified in Part 1 of Schedule 10;
"Third Party means and includes any interest or equity of any
Interest" person (including any right to acquire, option or
right of pre-emption), voting arrangement,
mortgage, charge, pledge, xxxx of sale, lien,
deposit, hypothecation, assignment or any other
encumbrance, priority or security interest or
arrangement or interest under any contract or
trust or any other third party interest of
whatsoever nature over or in the relevant
property;
"Transfer Notice" has the meaning given to that phrase in paragraph
4.1 of Schedule 5;
"Transferee" has the meaning given to that phrase in paragraph
4.2 of Schedule 5; and
"Transferor" has the meaning given to that phrase in paragraph
4.1 of Schedule 5.
1.2 In this Agreement, unless the context otherwise requires:
(a) references to this Agreement or any other document include
this Agreement or such other document as varied, modified or
supplemented in any manner from time to time;
(b) subject to Clauses 7 (Transfer of Shares) and 18 (Transfer),
references to any Party shall,
9
where relevant, be deemed to be references to or to include,
as appropriate, its respective permitted successors, assigns
or transferees;
(c) references to recitals, Clauses, Schedules, paragraphs and
sub-divisions of them are references to the recitals, Clauses
and paragraphs of, and Schedules to, this Agreement and
sub-divisions of them respectively;
(d) references to any enactment include references to such
enactment as re-enacted, amended, consolidated or extended on,
after or before the date of this Agreement and any subordinate
legislation made from time to time under it;
(e) references to a "person" include any individual, company,
corporation, firm, partnership, joint venture, association,
organisation, institution, trust or agency, whether or not
having a separate legal personality;
(f) references to the one gender include all genders, and
references to the singular include the plural and vice versa;
(g) headings are inserted for convenience only and shall be
ignored in construing this Agreement;
(i) the words "parent undertaking" and "subsidiary undertaking"
shall have the meanings ascribed to them in Regulations 3 and
4 respectively of the European Communities (Companies: Group
Accounts) Regulations, 1992;
(j) the symbols "(pound)," and "IR(pound)", shall be construed as
a reference to the currency of Ireland and shall, where
relevant or necessary, be converted into euro ("[]") using
the fixed conversion rate adopted by the member states of the
European Community participating in the third stage of
European Monetary Union;
(k) references to "Ireland" and similar expressions shall be
construed to mean Ireland, excluding Northern Ireland; and
(l) references to a time of day shall be construed as a reference
to Dublin time.
1.3 The Recitals and Schedules to this Agreement form part of it.
1.4 Any reference in this Agreement to a document being "in the agreed
terms" is to a document in the terms agreed between the parties and
initialled by them for identification purposes.
1.5 In construing this Agreement, general words shall not be given a
restrictive meaning by reason of the fact that they are followed by
particular examples intended to be embraced by the general words.
2 Contribution and Completion
2.1 On the Completion Date, the Parties will implement the provisions of
Schedule 2.
2.2 The contribution by NOVA to the Company shall be:
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(a) the NOVA Software Licences and the provision by NOVA to the Company of
consultation and advice pertaining to operating practices and mergers
and acquisitions/conversion expertise and fraud management;
(b) the delivery by NOVA of operating specifications for the development
of the facility of the Company at Arklow;
(c) the delivery by NOVA of specifications for the customisation of the
NOVA information technology platform to market specification of the
Territory; and
(d) NOVA making available US$5 million to the Company on terms previously
discussed by the Shareholders.
2.3 The contribution by BOI to the Company shall be the transfer contemplated
by the Asset Contribution Agreement.
2.3 Notwithstanding anything to the contrary contained in this Agreement or in
the Articles of Association for the period from the date hereof until NOVA
has satisfied the conditions in clauses 2.2(b) and (c) and has indicated
the availability to the Company from NOVA of funds of an amount not less
than US$5,000,000, the BOI Shares shall carry the right to receive 70% of
all dividends on Shares and the NOVA Shares shall carry the right to
receive 30% of all such dividends declared. The parties shall procure that
50% of the profits of the Company available for distribution (in respect of
the first financial year of the Company many less any amount considered by
the Board to be required for the working capital requirements or capital
expenditure programme of the Company) shall be distributed to the
Shareholders.
3. The Business
3.1 The Parties shall procure that the Group's business shall, subject to
Clause 3.3, constitute the provision to merchants which operate in the
Territory of payment processing services for Cards in accordance with the
Scheme Rules.
3.2 The Business shall be conducted in accordance with the Business Plan from
time to time (subject to such amendments or changes as the Board may make
to take account of changed circumstances).
3.3 The Shareholders may from time to time amend the nature and/or scope and/or
the geographical extent of the Business, including extending the Business
to include the provision of e-commerce services to merchants and other
potential customers and the supply of additional products and services to
merchants and other potential customers. If the nature and/or scope and/or
geographical extent of the Business is extended in this manner, BOI and
NOVA will negotiate in good faith to decide whether or not the non-compete
provisions and other exclusivity restrictions contained in this Agreement
will apply to the Business so extended.
3.4 The Shareholders acknowledge that it may be prudent from time to time to
review and/or amend the Group's operations in light of technological
developments (including changes in the method of data delivery) and/or
regulatory changes which are not envisaged by the Shareholders at the date
of this Agreement. In such event, the Shareholders will enter into good
faith negotiations to address such developments and/or changes in an
equitable manner.
3.5 The parties acknowledge their respective intention that the arrangements
contemplated by this
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Agreement and the Ancillary Agreements (save the NOVA Services Agreement)
are, to the greatest extent practicable, to be effective from the Effective
Date.
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4. Directors
4.1 The maximum number of Directors shall be four. The BOI Shareholder
shall be entitled to appoint two BOI Directors and the NOVA Shareholder
shall be entitled to appoint two NOVA Directors and at any time to
require the removal or substitution of any Director so appointed by it.
The first Directors shall be:
BOI Directors NOVA Directors
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Xxxxx Xxxxxxxx Xx Xxxxxxxxxxx
Xxxx X'Xxxxx Xxxxxx Xxxxxx
4.2 A Shareholder may appoint or remove a Director appointed by it by
depositing written notice at the Company's registered office and by
sending a copy of the same to the other Shareholder.
4.3 If any Shareholder disposes of all its Shares (other than pursuant to
clause 7.2), such Shareholder shall procure the resignation of the
Directors at the time holding office by reason of their nomination by
such Shareholder.
4.4 Any Shareholder removing a Director which it has appointed in
accordance with this Clause 4 and the relevant provisions of the
Articles of Association shall be responsible for and shall hold
harmless the other Shareholder and the Company from and against any
claim for unfair or wrongful dismissal arising out of such removal and
any reasonable costs and expenses incurred in defending such
proceedings.
4.5 The Board shall meet in person in Ireland not less than once in every
Financial Year. The Board shall also meet in Ireland at such other
times as may be required. Subject to Clauses 4.9 at each meeting of the
Board and in respect of each resolution proposed to the Board or at a
meeting of the Board, each Director shall have one vote. Subject to
Clauses 4.9, 4.15 and 4.16, all resolutions of the Board shall be
passed by simple majority vote.
4.6 Unless waived by a majority of the BOI Directors and a majority of the
NOVA Directors, not less than 14 clear days' notice of all meetings of
the Board shall be given to each Director and shall be accompanied by
an agenda of the business to be transacted at such meeting together
with all papers to be circulated or presented to the same. A Director
may raise issues for discussion at any meeting of the Board, whether or
not notice of such issues was provided in the manner set out in the
previous sentence provided that no resolution of which no notice (or
less than 14 clear days notice) has been given may be passed if it
relates to any matter specified in Schedule 14, unless it is approved
by at least one BOI Director and at least one NOVA Director. Within no
more than 10 days after each such meeting, a copy of the draft minutes
of that meeting shall be delivered to each Director.
4.7 The Directors shall elect one of their number to be chairman of the
Company. The chairman shall be appointed on a rotating basis by the BOI
Directors and the NOVA Directors respectively. Each chairman so
appointed shall hold office for two years. The BOI Directors and the
NOVA Directors may each remove a chairman appointed by it respectively
and appoint a replacement chairman in his place for the remainder of
the term of the outgoing chairman by depositing written notice at the
Company's registered office and by sending a copy of the same to the
other Directors. The first chairman shall be Xx Xxxxxxxxxxx and he
shall be deemed to have been elected by the NOVA Directors. In the case
of an equality of votes at any meeting of the Board
13
or of the Shareholders, the chairman shall not be entitled to a second
or casting vote.
4.8 No meeting of the Board or of any committee thereof may proceed to
business nor transact any business unless a quorum is present at the
start of and throughout such meeting. Subject to Clause 4.16, a quorum
of the Board shall be 1 BOI Director and 1 NOVA Director present in
person or represented by an alternate. Subject to Clause 4.16, if a
quorum of the Directors is not so present at the start of and
throughout a duly convened Board or committee meeting, that meeting
shall be adjourned to a day not earlier than 5 Business Days, and no
later than 10 Business Days from the date of such meeting, unless all
the Directors agree otherwise.
4.9 Each Director may, in accordance with and subject to the Articles of
Association, appoint an alternate to represent him at meetings of the
Board which he is unable to attend. Such alternate shall be entitled to
attend and vote at meetings of the Board and to be counted in
determining whether a quorum is present, without the need for such
alternate to be approved by the Directors. Each alternate director
shall have one vote for every Director whom he represents in addition
to any vote of his own. If a Director (the "First Director") does not
attend at a meeting of the Board or vote on a resolution, and if such
Director has not appointed an alternate, then unless the First Director
notifies the Company in writing to the contrary, the other Director
appointed by the Shareholder who appointed the First Director shall
have two votes on each resolution put to the Board for approval.
4.10 Subject only to Clause 5.1, a resolution of the Board shall be validly
passed as a written resolution if the text of the resolution has been
signed by a majority of the Directors (or their respective alternates)
in accordance with the Articles.
4.11 The Directors shall from time to time select a chief executive officer,
a chief financial officer, a chief operations officer and a chief
information officer of the Company. The first chief executive officer
shall be Xxxxx Xxxxxxxxxx. The first chief financial officer shall be
Xxxxx Xxxxxx. The first chief operations officer shall be Xxxxxx
Xxxxxx. The first chief information officer shall be Xxxxx Xxxxx. The
persons filling these executive positions shall have the
responsibilities delegated to them by the Board but they shall not be
appointed to the Board as Directors. The Directors shall be appointed
by the Board.
4.12 Subject only to Clause 5.1, the Board may delegate any of its powers
and functions to a committee or committees consisting of an equal
number of BOI Directors and NOVA Directors. Any committee so formed
shall, in the exercise of the powers so delegated, conform to any
regulations that may be imposed on it by the Board. If the Board so
authorises or requests, auditors, consultants, advisers and employees
of the Group shall be permitted to attend and speak at meetings of the
Board, but not to vote.
4.13 The remuneration (if any) of the Directors shall be determined by, and
shall be subject to the unanimous approval of, the Shareholders. The
Company shall reimburse to the Directors all reasonable expenses
incurred by them in the performance of their duties.
4.14 Subject to Clause 5.1, the Company shall, to the extent possible,
determine the constitution of the boards of directors and management of
the other Members of the Group.
4.15 If a Deemed Transfer Notice is served, the quorum requirement shall be
satisfied if two Directors appointed by the Transferee are present and
any resolution necessary to implement such Deemed Transfer Notice shall
be deemed to have validly passed if approved by such Directors. The
provisions of this Clause 4.15 apply only to resolutions necessary to
implement a Deemed
14
Transfer Notice and not to any other resolutions. For the avoidance of
doubt, nothing in this Clause 4.15 shall prejudice the right of any
Director to receive notice of and to attend Board meetings.
4.16 Notwithstanding anything contained in the foregoing provisions of this
Clause 4, any two Directors may meet and pass resolutions necessary for
the institution by the Company of proceedings under this Agreement or
any of the Ancillary Agreement if there is a legal opinion from a
senior counsel practising in commercial law to the effect that the
Company has suffered or is likely to suffer material damage and has a
stateable case in any such proceedings.
5. Management of the Company
5.1 Following Completion and save as otherwise provided in this Agreement,
the Shareholders shall not do, or agree to do, any of the acts set out
in Schedule 11, without the consent or approval required by that
Schedule and the Shareholders shall exercise all voting rights and
other powers of control available to them in relation to the Company to
procure that the Company and/or the Board shall not, do, or agree to
do, any of the acts set out in Schedule 11, without the consent or
approval required by that Schedule.
5.2 The Parties shall, to the extent practicable, use all reasonable
endeavours to procure that each Member of the Group shall observe and
perform the provisions and conditions contained in this Agreement
relating to the Company and the conduct of the Business as if they
applied directly to each such Member of the Group and its respective
business and assets.
5.3 As a separate and independent undertaking, the Company agrees with each
Shareholder that it shall (so far as it is legally able to do so)
observe and comply with the prohibitions and restrictions in this
Clause 5.
6. Finance
6.1 All capital requirements of the Group exceeding the Group's own
resources from time to time required for the purpose of financing the
Group's operations shall be procured either:
(a) by equal contributions of capital to be made by the
Shareholders to the Company upon request made to them, such
contributions, if made, to be made in such manner (including
loans) and upon such terms as may be agreed by the
Shareholders.
(b) by borrowing other than from Shareholders or NOVA or their
Associated Companies (save that no third party shall thereby
be or become entitled to acquire the right to participate in
the share capital or profits of the Group).
6.2 For the avoidance of doubt, the provisions of Clause 6.1 do not
constitute any undertaking from the Shareholders to the Group to
provide funds to the Group nor to give any guarantee, security or
indemnity in respect of any of the liabilities or obligations of any
Member of the Group.
6.3 If BOI (or its Associated Companies) or NOVA (or its Associated
Companies), as the case may be (the "transferor"), disposes of all its
Shares to the other Shareholder or its Associated Companies (the
"transferee") then the transferee:
(a) shall use all reasonable endeavours to procure the assumption
by it of all the obligations (including, guarantees and
indemnities) of the transferor or any of its Associated
15
Companies to, on behalf of or provided for the benefit of the
Member of the Group (but excluding monies advanced by the
transferor and any of its Associated Companies) and pending
the transferor being fully released from such obligations
shall keep the transferor fully and effectively indemnified on
demand against any liability pursuant thereto; and
(b) shall procure the immediate repayment to the transferor of all
monies advanced by the transferor and any of its Associated
Company to any Member of the Group and then outstanding
(excluding overdrafts on a bank account and loans which are in
addition to pari passu loan finance (if any) provided by BOI
and NOVA (or their respective Associated Companies or
successors) to the Company), together with any accrued
interest and any other monies then due to the transferor in
respect of any loan.
7. Transfer of Shares
7.1 (a) Save for transfers of Shares made pursuant to the provisions
of Clause 7.2, Clause 8 or paragraph 3 of Schedule 5 and
subject to paragraph 2(b) of Schedule 5, no transfer of any
Share (or of any interest in a Share) to a third party shall
be effected or registered prior to the third anniversary of
the date of this Agreement.
(b) No transfer of any Share (or of any interest in a Share) shall
be effected or registered unless:
(i) the proposed transferee (if not already bound by the
provisions of this Agreement) has entered into a Deed
of Adherence; and
(ii) such transfer is made in compliance with (x) Clause
7, (y) the provisions contained in Schedule 5 or (z)
Clause 8; and
(iii) except where the transfer is in accordance with
Clause 7.2, the transferee makes a loan or loans to
the Company on the same terms as, and for the purpose
of repaying, all loans made to the Company by the
transferor or any of its Associated Companies and for
the time being outstanding (excluding overdrafts on a
bank account and loans which are in addition to pari
passu loan finance (if any) provided by BOI and NOVA
(or their respective Associated Companies or
successors) to the Company) and assumes all the
obligations of the transferor in respect of each
guarantee and/or indemnity given by the transferor on
behalf of the Company,
and no Shareholder shall otherwise sell, transfer or dispose
of any Share or Shares or any interest therein or (save as
permitted by paragraph 2 of Schedule 5) create or permit to
subsist any Third Party Interest in respect thereof.
7.2 Notwithstanding Clause 7.1, the Parties agree that a transfer of the
legal and beneficial interest in all of the BOI Shares or the NOVA
Shares, as the case may be, to a transferee who is and remains a
wholly-owned subsidiary undertaking of the ultimate parent undertaking
of the transferor Shareholder shall be permitted, provided that:
(a) the obligations of the transferor Shareholder under this
Agreement will remain unaffected by the proposed transfer;
16
(b) the transferee executes a Deed of Adherence contemporaneously
with such transfer;
(c) the Shares will be re-transferred to the transferor
Shareholder immediately upon the transferee ceasing to be a
wholly-owned subsidiary undertaking of such ultimate holding
company and failure to so re-transfer such Shares within 14
days of the transferee ceasing to be such a wholly-owned
subsidiary undertaking shall result in a Deemed Transfer
Notice in respect of all the Shares held by the transferee
shareholder being deemed to be immediately given.
BOI and NOVA shall provide to the other such information as the other
may reasonably require to ascertain that the transferee has not ceased
to be such a wholly-owned subsidiary undertaking.
7.3 The Shareholders will procure that the Directors shall register any
transfer of Shares which complies with the provisions of (i) Clause 7,
(ii) Schedule 5 or (iii) Clause 8.
8. Deadlock
8.1 In the event of a Potential Deadlock, each Shareholder shall within 3
Business Days after such Potential Deadlock has arisen (the
"Circulation Period"), cause its appointees on the Board to prepare and
circulate to the senior management of each of BOI and NOVA a memorandum
setting out its position on the matter in dispute and its reasons for
adopting such position. Each such memorandum shall be considered by
appropriate members of the respective senior management (including the
chief executives) of BOI and NOVA, who shall meet together within 14
days of receipt of the memoranda and use their reasonable endeavours to
resolve the Potential Deadlock.
8.2 If the appropriate senior management as aforesaid do so agree, they
shall jointly issue a statement setting out the terms of such agreement
and they shall procure that each Shareholder shall exercise the voting
rights and other powers of control available to it in relation to the
Company to procure that the terms of such agreement are implemented and
that the Company shall do all things within its power to implement such
terms.
8.3 If the appropriate senior management as aforesaid do not so agree
within 30 days of the end of the Circulation Period, then for a period
of 30 days thereafter (the "Dissolution Period"), they shall attempt to
reach agreement on the most appropriate mechanism to dissolve the joint
venture in a manner satisfactory to both BOI and NOVA, either by the
acquisition by BOI of the NOVA Shares, the acquisition by NOVA of the
BOI Shares, the disposal of the entire issued share capital of the
Company or the splitting of the Group's business, assets and
liabilities between BOI and NOVA.
8.4 If, at the end of the Dissolution Period, agreement has not been
reached between the appropriate senior management as aforesaid as to an
appropriate mechanism to dissolve the joint venture constituted by this
Agreement, the following procedure shall apply:
(a) either Shareholder wishing to initiate this procedure (the
"Initiating Shareholder") shall give written notice (a "Buy-
Sell Notice") to the other Shareholder (the "Receiving
Shareholder"), with a copy to the Directors at the registered
office of the Company, referring to this Clause, and
containing two unconditional and (subject to Clauses 8.4(h)
irrevocable offers in writing to the Receiving Shareholder,
the first of which shall be an offer to purchase all (and not
some only) of the Shares beneficially owned by the Receiving
Shareholder (the "Purchase Offer") and the second of which
17
shall be an offer to sell to the Receiving Shareholder all
(and not some only) of the Shares beneficially owned by the
Initiating Shareholder (the "Sale Offer"). The Buy-Sell Notice
must be served within 14 days after the expiry of the
Dissolution Period (the "Notice Period");
(b) the price to be contained in the Purchase Offer shall be such
price as the Initiating Shareholder shall determine. The price
to be specified in the Sale Offer shall be the same amount (in
euro) as the price specified in the Purchase Offer;
(c) upon due submission of the irrevocable offers, the Receiving
Shareholder may, within 14 days of receipt, accept either the
Purchase Offer or the Sale Offer (and any acceptance of one
such offer shall constitute a rejection of the other) and if
the Receiving Shareholder has not accepted in writing one of
the offers within such 14 day period, the Receiving
Shareholder shall be deemed to have accepted on the fourteenth
day the Purchase Offer for the price specified in the Buy-Sell
Notice;
(d) acceptance or deemed acceptance of the Purchase Offer shall
bind the Receiving Shareholder to sell its Shares to the
Initiating Shareholder for the price specified in the Buy-Sell
Notice and shall bind the Initiating Shareholder to purchase
the Shares of the Receiving Shareholder for the price
specified in the Buy-Sell Notice. Acceptance of the Sale Offer
shall bind the Initiating Shareholder to sell its Shares to
the Receiving Shareholder for the price specified in the
Buy-Sell Notice and shall bind the Receiving Shareholder to
purchase the Shares of the Initiating Shareholder for the
price specified in the Buy-Sell Notice;
(e) the sale and purchase of any Shares pursuant to this Clause
8.4 shall be completed within 28 days of acceptance or deemed
acceptance of the relevant offer at the head office of the
Company in Ireland. Any Shares so sold shall be sold free of
liens, charges and encumbrances and together with all rights
attaching thereto. The provisions of paragraphs 11 and 13 of
Schedule 5 shall apply mutatis mutandis (with any necessary
consequential amendments) to the sale and purchase of such
Shares;
(f) other than dividends declared and approved by the Shareholders
prior to date the occurrence of the Potential Deadlock, no
dividend shall be declared or paid at any time after a
Buy-Sell Notice has been served until the sale and purchase of
Shares consequent thereon has been completed and the
transferee of such Shares has become registered as the holder
thereof or until such sale and purchase is no longer capable
of being completed as a result of a failure to obtain any
third party consent or approval;
(g) no Shareholder shall be entitled to serve a Buy-Sell Notice if
a Transfer Notice, a Deemed Transfer Notice, or Buy-Sell
Notice has already been served pursuant to this Clause 8,
unless the sale and purchase of Shares consequent thereon has
been completed or is no longer capable of being completed as a
result of a failure to obtain any third party consent or
approval;
(h) if both Shareholders despatch a Buy-Sell Notice on the same
day in accordance with Clause 8.4(a), the Buy-Sell Notice with
the higher Purchase Offer price shall be the Buy-Sell Notice
to which this Clause 8.4 shall apply and the other Buy-Sell
Notice shall be of no effect and shall be deemed to have been
rescinded; and
(i) if either a Purchase Offer or a Sale Offer is not capable of
being completed as a result
18
of a failure to obtain any third party consent or approval,
either party shall be entitled to require the other party to
complete the Sale Offer or Purchase Offer (as the case may be)
which is capable of being completed.
8.5 If, at the end of the Dissolution Period, agreement has not been
reached between appropriate senior management of BOI and NOVA on an
appropriate mechanism to dissolve the joint venture and/or the
procedures set out in Clause 8.4 have not been implemented, the
Shareholders shall jointly instruct an international investment bank of
repute (with offices in London and New York) that is not connected with
any Party agreed upon by the Shareholders (or in the absence of
agreement within 21 days of the end of the Notice Period, such
international investment bank of repute with offices in London and New
York appointed by the President for the time being of The Law Society
of Ireland on the application of either Shareholder) to conduct a sale
of the entire issued share capital of the Company to the highest bidder
(excluding any Party or any of their Associated Companies) at the best
price reasonably available. Each Party shall cooperate with such
investment bank and the other Parties to enable a sale of the entire
issued share capital of the Company to take place (including providing
reasonable access to its premises, employees and officers and
information within its control and signing such documents as the
investment bank may advise as being necessary to effect a sale).
9. Distribution policy
Unless otherwise expressly agreed by each of the Shareholders in
writing, the Parties shall procure that the profits of the Company
available for distribution shall be dealt with as the Board may from
time to time determine.
10. Warranties
10.1 Each Shareholder warrants to the other that:
(a) it is incorporated with limited liability and is duly
incorporated or organised and validly existing under the
applicable laws of its jurisdiction of incorporation or
organisation and has the power and all necessary governmental
and other consents, approvals, licences and authorities under
any applicable jurisdiction to own its material assets and
carry on its business substantially as it is conducted on the
date of this Agreement;
(b) it has the power to enter into, exercise its rights and
perform and comply with its obligations contained in this
Agreement and any Ancillary Agreement to which it is a party,
and no limits on its powers will be exceeded as a result of
the taking of any action contemplated by any such agreement;
(c) all actions, conditions and things required to be taken,
fulfilled and done (including the obtaining of any necessary
consents and approvals), in order to enable it lawfully to
enter into, exercise its rights and perform and comply with
its obligations contained in this Agreement and any Ancillary
Agreement to which it is a party have been so taken,
fulfilled, or done and the requisite resolutions of its board
of directors have been duly and properly passed at a duly
convened and constituted meeting at which all statutory and
other relevant formalities were observed to authorise its
execution and performance of this Agreement and any Ancillary
Agreement to which it is a party and such resolutions are in
full force and effect and have not been varied or rescinded;
(d) its obligations under this Agreement and any Ancillary
Agreement to which it is a party
19
constitute its legal, valid and binding obligations
enforceable in accordance with their terms;
(e) neither the execution or delivery of this Agreement nor any
Ancillary Agreement to which it is a party, nor the carrying
out of any transaction or the exercise of any rights or the
performance of any obligations contemplated by this Agreement
and any Ancillary Agreement to which it is a party will result
in any:
(i) violation of any law to which it is subject;
(ii) any breach of its constitutional documents;
(iii) any breach of any deed, agreement or obligation made
with or owed to any other person; or
(iv) any breach of any limits on any of its powers; and
(f) it is not involved in or engaged in any litigation,
arbitration or other legal proceedings of a litigious nature
(whether as plaintiff, claimant or defendant and whether
civil, criminal or administrative) which is likely to be
adversely determined and, if adversely determined, would have
an adverse effect on its ability to perform its obligations
under this Agreement and any Ancillary Agreement to which it
is a party.
10.2 BOI agrees that it will on demand indemnify and keep indemnified NOVA
from and against any loss arising out of or in connection with any
breach of its warranties in Clause 10.1
10.3 NOVA agrees that it will on demand indemnify and keep indemnified BOI
from and against any loss arising out of or in connection with any
breach of its warranties in Clause 10.1
11 Undertakings
11.1 Non-compete
-----------
(a) Each Shareholder covenants in favour of the other Shareholder
and in favour of the Company that for as long as it or its
nominees or Associated Companies own any Shares, and for a
period of two years thereafter (in this Clause 11.1(a),
referred to as the "Period"), it will not, and it will procure
that none of its Associated Companies shall:
(i) in the Exclusive Territory, either on its own account
or in conjunction with, or on behalf of, any other
person, carry on or be engaged, concerned or
interested, or provide services to (in each case,
whether directly or indirectly, whether as principal,
shareholder, manager, independent contractor,
consultant, partner or otherwise) any business which
engages in the provision to merchants of payment
processing services for Cards other than:-
(A) as a holder of not more than 5 per cent of
the issued shares or debentures of any
company listed, or dealt in, on any
recognised stock exchange;
(B) as a holder of any shares or debentures of
any company in the conduct of any fund
management or similar business conducted by
it at the date
20
of this Agreement;
(C) pursuant to any acquisition made pursuant to
Clause 11.6, (1) in the country in which the
Permitted Target has an operation which is
material to its business and (2) in a
country in which the Permitted Target has an
operation which is not material to its
business provided that the Permitted Target
shall not increase the resources employed by
it in such country beyond the level of
resources employed by it in such country at
the time that the proposal concerning the
Permitted Target is first considered by the
Company;
(D) in the case of BOI, by way of the provision
of banking or financial services (other than
payment processing services for Cards) on
arms' length terms, provided BOI has no
ownership interest in, and derives no
benefit from its relationship with, the
recipient of such services save for normal
fees or margins on such services;
(E) in the case of NOVA, by way of the provision
of services (other than payment processing
services for Cards) or by way of conducting
business expressly permitted by the terms of
the Econex Distribution Agreement;
(ii) (save as provided in Clause 11.1(a)(i)(C)) with a
view to providing payment processing services for
Cards either on their own account or in conjunction
with or on behalf of any other person, solicit or
entice away or attempt to solicit or entice away from
any Member of the Group the custom or services of any
person in the Exclusive Territory who is an existing
customer or client (or any person who, at the time
that the relevant Shareholder (or its Associated
Companies) ceases to hold the Shares, is known to
such Shareholder or to such Associated Companies to
be a specifically identified prospective significant
customer or client of any Member of the Group which
the Group is expending reasonable efforts to procure
as a customer or client);
(iii) excluding any persons responding directly to an
advertisement placed in a national newspaper, whether
on its own account, or in conjunction with, or on
behalf of, any other person, employ, solicit or
entice away or attempt to employ, solicit or entice
away from any Member of the Group any person who is,
or shall have been at the date of or within 90 days
prior to the Shareholder or its nominee or Associated
Companies ceasing to own any Shares, an officer,
manager, consultant or employee of any Member of the
Group, whether or not such person would commit a
breach of contract by reason of leaving such
employment or position (provided that nothing herein
shall prevent either Shareholder from re-employing
any employee who transferred to the Company on terms
approved by the other Shareholder providing to such
employee the right to transfer his employment back to
such Shareholder); or
(iv) do or say anything which is untrue and detrimental to
the reputation of any Member of the Group or which
may lead any person to cease to deal with any Member
of the Group on substantially equivalent terms to
those previously offered or at all.
21
(b) Each Shareholder covenants in favour of the other Shareholder
and in favour of the Company that at any time after it or its
nominee cease to owns any Shares it will not, and it will
procure that none of its Associated Companies shall, in
relation to any trade, business or company, use a name, domain
name or e-mail address which includes the word "Euroconex" or
any similar word in such a way as to be capable of or likely
to be confused with the names, domain names, e-mail addresses,
symbols or businesses of any Member of the Group and shall use
all reasonable endeavours to procure that no such names,
domain names, e-mail addresses or symbols shall be used by any
person with which it is connected.
(c) Each and every obligation under this Clause 11.1 shall be
treated as a separate obligation and shall be severally
enforceable as such, and in the event of any obligation or
obligations being or becoming unenforceable in whole or in
part, such part or parts as are unenforceable shall be deleted
from this Clause, and any such deletion shall not affect the
enforceability of all such parts of this Clause as remain not
so deleted.
(d) While the restrictions contained in this Clause 11.1 are
considered by the Parties to be reasonable in all the
circumstances, it is recognised that restrictions of the
nature in question may fail for technical reasons and
accordingly it is hereby agreed and declared that if any of
such restrictions shall be adjudged (whether by a competent
court or otherwise) to be void as going beyond what is
reasonable in all the circumstances for the protection of the
interest of the Parties but would be valid if part of the
wording thereof were deleted or the periods thereof reduced or
the range of activities or area dealt with thereby reduced in
scope the said restriction shall apply with such modifications
as may be necessary to make it valid and effective.
(e) For purposes of the exclusivity and non-compete obligations
contained in this Agreement and the Ancillary Agreements, the
provision to a merchant of a service (which at the relevant
time falls within the scope of the Business) via the internet
shall be deemed to have been performed in the same physical
location as the location of the financial institution
appointed by such merchant to ultimately receive payment on
the merchants behalf in respect of transactions processed by
such merchant's transaction processor.
11.2 Covenants of the Company
------------------------
11.2.1 The Company undertakes to each of the Shareholders that (and each of
the Shareholders shall use all reasonable endeavours to procure that)
it shall, both with respect to itself and, where applicable, each other
Member of the Group:
(a) maintain adequate insurance with a well established and
reputable insurer against all risks usually insured against by
companies carrying on the same or similar business to the
Business and (without prejudice to the generality of the
foregoing) for the full replacement or reinstatement value of
all its assets of an insurable nature;
(b) keep books of account and therein make true and complete
entries of all its dealings and transactions of and in
relation to the Business and, where applicable, the business
of any other relevant Member of the Group;
(c) keep its books of account and all other records, documents and
information relating to the business affairs of the Company
(or any other relevant Member of the Group, as
22
applicable) open to inspection by each of the Shareholders
during normal business hours and on reasonable prior notice
and they shall be permitted to take and remove copies thereof
and give each Shareholder reasonable access to its officers
and employees for the purpose of providing such information
and answering such questions that the Shareholders deem
necessary;
(d) provide each Shareholder within 2 weeks of the end of each
calendar month with management accounts for such month in a
form acceptable to the Shareholders,
(e) prepare such accounts in respect of each accounting reference
period as are required by statute and procure that such
accounts are audited as soon as practicable and in any event
not later than 2 months after the end of the relevant
accounting reference period;
(f) keep each of the Shareholders fully informed as to all its
financial and business affairs and in particular shall provide
each of the Shareholders with full details of any actual or
prospective material change in such affairs as soon as such
details are available; and
(g) provide each of the Shareholders with such financial or other
information as may be reasonably requested by such Shareholder
for use in the preparation by such Shareholder of its tax
returns;
(h) provide such access to the records and business activities of
the Company as the Central Bank of Ireland may require from
time to time.
11.2.2 The Company undertakes to each Shareholder that it shall at its own
cost do, execute and provide, or procure to be done, executed and
provided, all such acts, deeds, documents, information and things as
may be within its power (including the passing of resolutions by the
Board and powers which it has in respect of any shareholders' or
directors' votes in any other Member of the Group) to ensure that it
and each Shareholder can comply with any requirements imposed on any of
them by any regulatory authority.
11.3 General covenants of BOI and NOVA
---------------------------------
(a) Each Shareholder covenants in favour of the other that:
(i) it will use all reasonable endeavours to promote the
business and profitability of each Member of the Group;
(ii) subject to any acquisitions made pursuant to Clause
11.6:
(A) it will use all reasonable endeavours to
ensure that all business opportunities of
which it becomes aware, which arise in the
Exclusive Territory and which fall within the
scope of the Business (the "Potential
Business"), are undertaken by the Group;
(B) it will not undertake the Potential Business
itself or jointly with any other person in
competition with the Group; and
(C) it will promptly notify the others if it
receives any approach, offer or proposal from
any third party in relation to Potential
Business, including providing details and
copies of any documents supplied to it
23
in connection with such approach, offer or
proposal;
(iii) it will not (except as expressly provided for in this
Agreement):
(A) exercise, or agree to exercise, any control
which it may have in relation to the Group;
or
(B) cast, or agree to cast, any of the voting
rights exercisable in respect of any of
shares held by it in any Member of the
Group,
in accordance with the directions, or subject to the
consent of, any other person;
(iv) it shall at its own cost do, execute and provide, or
procure to be done, executed and provided, all such
acts, deeds, documents, information and things as may
be within its power, including in relation to the
Shareholders, (without prejudice to the generality of
the foregoing) the passing of resolutions (whether by
the Board or in general meeting or any class meeting
of the Company or any other Member of the Group) to
ensure that it and each other Party can comply with
any requirements imposed on any of them by any
regulatory authority;
(v) it will use all reasonable means (including its
voting power, whether direct or indirect, in relation
to the Group) to give effect to the objectives of
this Agreement and to ensure compliance by the
Company with its obligations;
(vi) it shall seek to procure that the Company shall enter
into arrangements with the XXX to obtain from the XXX
a level of grant aid and other supports that are
acceptable to each Shareholder;
(vii) it will co-operate and work together with each other
Party in order to attempt to persuade VISA and
Europay to permit the Company to operate as closely
as possible to the manner in which NOVA operates in
the United States of America, any business model
adopted by the Company to be consistent in all
respects with applicable Scheme Rules; and
(viii) it shall co-operate to ensure that the Group's
initial structure, Business and tax affairs are
implemented and operated in the most effective manner
possible for taxation purposes, subject in each case
to them being consistent with the tax policies of
each of BOI and NOVA in force at the date of this
Agreement. If changes are made to BOI's or NOVA's tax
policies, (as the case may be), the other will
cooperate at the request of BOI or NOVA and use all
means reasonably available to it (including its
voting power, whether direct or indirect, in relation
to the Group) to give effect to the terms of this
Clause 11.3.(a)(viii) and to ensure compliance by the
Company with the terms of this Clause 11.3.(a)(viii),
provided that this will not impose any financial or
any other unduly onerous obligations or liabilities
on the other Shareholder or the Company.
(b) The Company and BOI covenant to cooperate in the outsourcing
arrangement contemplated by the Outsourcing Agreement and, in
connection therewith, acknowledge and agree that the Company
will have the following rights and obligations which, in the
case of the rights referred to below, shall not require the
approval of the Board or the
24
Shareholders for their exercise:
(i) to administer all contracts and arrangements between
BOI and any Merchant Customer;
(ii) to notify BOI when the Company desires to amend the
terms of, or terminate, the contracts between BOI and
Merchant Customers, or cause BOI to assign such
contracts to another member in good standing of
Visa/Europay;
(iii) to execute contracts in the agreed form with Merchant
Customers for and in the name of BOI subject to the
applicable underwriting guidelines set out in the
Second Schedule to the Outsourcing Agreement;
(iv) to receive all revenues attributable to the provision
of merchant acquiring transaction services to BOI
Merchant Customers with effect from the Effective
Date;
(v) to approve the entry by BOI into any agreement or
arrangement with a Member Service Provider or
Independent Sales Organisation (as each such term is
defined in the Scheme Rules);
(vi) to decline to accept any Merchant Customer referred
by BOI pursuant to Section 7 of the Outsourcing
Agreement provided that BOI shall have the right:
(1) to offer to the Company such assurances and
guarantees as may reasonably be requested by
the Company to take on the declined Merchant
Customer and provided further the Company
shall not suffer or incur (and BOI shall
indemnify and hold the Company harmless
from) any losses associated with the
acceptance of such declined Merchant
Customer; or
(2) to refer such declined Merchant Customer to
a third party.
If the Company deems the assurances and guarantees
referred to in (1) above satisfactory the Company
will accept the Merchant Customer. Notwithstanding
the previous sentence, the Company shall not be
obligated to approve any such BOI referred Merchant
Customer with respect to whom BOI has offered such
assurances and guarantees if approval of such
Merchant Customer would cause the Company to violate
an existing contract with a third party. Further, and
for the avoidance of doubt, it is hereby agreed that
the Company shall have no obligation to indemnify or
hold harmless BOI from any liability, loss, cost or
expense related to or arising out of the acceptance
by the Company of a Merchant Customer pursuant to (1)
above.
The provisions of this clause 11.3(b) shall survive the
termination of this Agreement.
(c) Further, in connection with the outsourcing arrangement
contemplated by the Outsourcing Agreement, the Company and BOI
acknowledge and agree that BOI will have the following rights
and obligations:
25
(i) to terminate the contract between BOI and any
Merchant Customer in accordance with the terms of the
applicable contract upon, and in accordance with, the
Company's notice requesting such termination
provided, however, that if the contract is with a BOI
Merchant Customer and the reason the Company seeks to
terminate such contract is due to fraud exposure,
material violation of such contract by the customer,
or potential credit losses to the Company, BOI may,
upon written notice to the Company, elect not to
terminate such merchant, but instead to indemnify the
Company for any loss, damage, expense, or liability
incurred by the Company attributable to such
customer;
(ii) not to terminate the contract of any Merchant
Customer unless either:
(A) specifically directed to do so by the
Company, or
(B) the Company consents to such termination.
Notwithstanding the previous sentence, if a Merchant
Customer is engaged in an unlawful, or morally or
ethically offensive business that may harm BOI's
reputation, BOI may, upon 60 days' prior written
notice to the Company, require the Company, at its
election either:
(A) to move such Merchant Customer to another
settlement sponsoring bank on or prior to the
end of such 60 day period; or
(B) to consent to BOI's termination of such
Merchant Customer, effective at the end of
such 60 day period;
(iii) to maintain at least one full-time employee dedicated
to act as a liaison between BOI and the Company;
(iv) to distribute in BOI branches through BOI's sales and
marketing department and in accordance with the sales
and marketing rota those marketing materials provided
by the Company and approved by BOI pursuant to the
Outsourcing Agreement;
(v) to sponsor Econex as a Processor in Visa and as an
Member Service Provider in Europay, subject to the
satisfaction by Econex of the Scheme Rules regarding
such sponsorship;
(vi) to assign:
(A) any contract with any Merchant Customer
(other than a BOI Merchant Customer) to any
other Visa/Europay member bank designated by
the Company upon notice to that effect by
the Company; or
(B) any contract with any Merchant Customer to
any other Visa/Europay member bank upon
notice to that effect by the Company at any
time that BOI owns less than 10% of the then
issued and outstanding equity interests of
the Company
(vii) to conduct all communications with Europay or Visa
that may impact the
26
Company only in cooperation with the Company and to
attempt to procure the Company's participation in
meetings to the extent permitted by Europay or Visa.
BOI will use reasonable efforts within its control to
present such communications in a manner that is in
the best interests of the Company and BOI and not to
take any position that may be contrary to the
Company's interests;
(viii) to amend contracts with Merchant Customers upon, and
in accordance with, notice from the Company provided
that BOI shall not be obligated to effect any
amendment that in BOI's reasonable discretion, would
be unlawful or contrary to Scheme Rules or may cause
material damage to BOI's reputation;
(ix) to fully and expeditiously cooperate in any
deconversion of Merchant Customers assigned pursuant
to Clause 11.3(c)(vi) hereof, in order to ensure a
smooth transition of member bank responsibilities to
the Visa/Europay member designated by the Company;
(x) to assist, at its option, a BOI Merchant Customer in
finding a different Card processor upon receipt of
notice from such customer that it desires to switch
processors due to materially substandard service by
the Company.
Notwithstanding the provisions of this Clause, it is hereby understood
and agreed that BOI shall not be obligated to take, or refrain from
taking, any action pursuant to this Agreement or the Outsourcing
Agreement if the taking, or refraining to take, such action if done by
BOI of its own volition would result in a violation of Scheme Rules. In
the event of any dispute between the parties as to whether or not any
act or omission by BOI would result in a violation of Scheme Rules, the
determination of this issue shall rest with the relevant Card scheme
who shall act as expert and not as arbitrator and whose decision shall
be final and binding on the parties. The provisions of this clause 11.3
(c) shall survive the termination of this Agreement.
11.4 Covenants of BOI
----------------
(a) BOI undertakes in favour of the Company that:
(i) it will use all reasonable endeavours to provide the
Company with access to potential customers through
BOI's Irish and European commercial contacts with a
view to speeding up the establishment and development
of the Business; and
(ii) for so long as the Company is in compliance with all
its material obligations under this Agreement and
each Ancillary Agreement to which it is a party, it
will not do, or omit to do, any act or thing which
may jeopardise the contractual relationship of the
Company with any Card Scheme.
(b) BOI undertakes in favour of NOVA that it will:
(i) co-operate and work together with NOVA with a view to
procuring that the Company has available to it
immediately after Completion sufficient of the
current BOI employees who work in BOI's card services
division so that the Company can provide service
standards to BOI Merchant Customers following
Completion that are at least equal to the standards
in effect immediately prior
27
to Completion; and
(ii) use all reasonable endeavours to channel through NOVA
any card processing transactions proposed to be
undertaken in the United States of America by any of
BOI's European-based Merchant Customers who request
BOI to provide such services.
11.5 Covenants of NOVA
-----------------
NOVA undertakes in favour of BOI (and in favour of the Company, in the
case of (c) and (d) below) that:
(a) at any time after BOI ceases to be Shareholder, it will use
all efforts within its control to ensure that the Group will
continue to provide to BOI's Merchant Customers a service
standard at least equal to that provided to them prior to the
date of BOI, its nominees or Associated Companies ceasing to
be a Shareholder;
(b) it will co-operate and work together with BOI with a view to
procuring that the Company has available to it immediately
after Completion sufficient of the current BOI employees who
work in BOI's card services division so that the Company can
provide service standards to BOI Merchant Customers following
Completion that are at least equal to the standards in effect
immediately prior to Completion;
(c) subject to any acquisitions made by it or its Associated
Companies pursuant to Clause 11.6, it will use all reasonable
endeavours to channel through the Group any card processing
transactions proposed to be undertaken in the Territory by any
of its current or future US based merchants who request NOVA
to provide such services;
(d) it will provide the Group with access to NOVA's expertise
pertaining to:
(i) all relevant information with regard to NOVA's
business operating practices know-how, including in
relation to sales, marketing and transaction
processing;
(ii) the acquisition and conversion of merchant
portfolios; and
(iii) risk management, particularly in the areas of
internet and "card not present" transactions.
(e) at any time when BOI or any of its nominees or subsidiary
undertakings retains a legal or beneficial interest in 10% or
more of the Shares, it shall procure that BOI shall not be
replaced as the Company's settlement bank with respect to BOI
Merchant Customers unless:
(i) BOI is in material breach of the Outsourcing
Agreement, having given effect to any applicable cure
period; or
(ii) (A) the Group can demonstrate that BOI is providing
the relevant settlement services to the Group on
financial terms which are materially worse than
the terms that the Company can obtain from a
third party bank on an arms' length basis; and
28
(B) the Group has offered BOI a reasonable
opportunity to match such arms' length terms and
BOI has failed to do so;
(f) while BOI or its nominees or subsidiary undertakings retains a
legal or beneficial interest in 10% or more of the Shares, if
at any time after BOI is replaced as the Company's settlement
bank with respect to the BOI Merchant Customers pursuant to
(e) above, it will procure that no information concerning the
BOI Merchant Customers is given to the replacement settlement
bank, save such information as is strictly necessary for the
performance of the settlement bank function for the Company;
(g) except with the prior written consent of BOI, which may be
given or withheld at its sole discretion, if any Competitor of
BOI at any time proposes to acquire any interest in the Group
(the date of acquisition referred to herein as the "Relevant
Date"), it shall procure that prior to any such Competitor
acquiring an interest in the Group, the Competitor provides a
deed of undertaking to BOI (in a form acceptable to BOI,
acting reasonably) confirming that it and its affiliates
(other than the Company) will not for a period of 2 years
after the Relevant Date solicit or offer to any BOI Merchant
Customer (a list of which may be provided to such Competitor)
other than BOI Merchant Customers who on the Relevant Date
already have a substantial banking relationship with such
Competitor any service.
11.6 Acquisitions
------------
(a) The pursuit of any proposed business or share acquisition by
the Group in the Exclusive Territory relating to the Business
("Relevant Acquisition Proposal") shall be the responsibility
of the Management.
(b) (i) Each Shareholder shall notify the Board and the
Management of any potential specific Relevant
Acquisition Proposal which the Shareholder believes
is worthy of consideration.
(ii) Following receipt by Management of a notification
from a Shareholder pursuant to Clause 11.6 (b) (i)
containing a brief description of the opportunity and
contact information, Management shall, as soon as
reasonably practicable but in any event within a
period of 30 days following such receipt, either:
(A) notify the Board that Management have
determined not to proceed to investigate
such Relevant Acquisition Proposal with a
view to making a recommendation to the
Board, or
(B) make a recommendation to the Board as to
whether or not they believe the Group should
proceed with the Relevant Acquisition
Proposal.
(iii) If Management fail to comply with Clause 11.6 (b)
(ii) within 3 Business Days of a notice from the
Shareholder requiring them to so comply or if
Management notify the Board in the terms of Clause
11.6 (b) (ii) (A) or if the Directors appointed by
the Shareholders who made the notification pursuant
to Clause 11.6 (b) (i) indicate their wish that the
Group proceed with the Relevant Acquisition Proposal
but the Directors appointed by the other Shareholder
do not support such resolution within a further 30
days of the recommendation being made to the Board
pursuant Clause 11.6 (b) (ii) (B), then in each such
29
case the Shareholder who made the notification
pursuant to Clause 11.6 (b) (i) may itself or via an
Associated Company, proceed to complete such proposal
independently, outside the Group, provided that:
(A) a legally binding agreement relating to the
acquisition is entered into within 180 days
after the date upon which proposal was
rejected by the Company's senior management;
and
(B) the acquisition is concluded on terms and
conditions which are not materially less
favourable in the aggregate than those made
known to, and rejected by, the Management or
the Directors appointed by the other
Shareholder (as the case may be).
(c) Upon receiving Management's recommendation for any Relevant
Acquisition Proposal, if the Directors appointed by one
Shareholder endorse such proposal, but the Directors appointed
by the other Shareholder reject such proposal, the Shareholder
who appointed the Directors who approved the proposal may
itself or via an Associated Company, proceed to complete such
proposal independently, outside of the Group, provided that:
(A) a legally binding agreement relating to the
acquisition is entered into within 180 days after the
proposal was rejected by the Directors appointed by
the other Shareholder; and
(B) the acquisition is concluded on terms and conditions
which are not materially less favourable in the
aggregate than those made known to, or offered to,
the Group and which were rejected by the Directors
appointed by the other Shareholder.
(d) If any Relevant Acquisition Proposal is presented to the Board
by Management for approval, but it is determined that the
Group is unable to engage in such acquisition due to (i)
regulatory constraints imposed by BOI's status as a credit
institution or (ii) other competitive or market reasons
connection with BOI's involvement in the Group (and the Board,
in its reasonable discretion, concurs in such determination),
NOVA may proceed to complete such acquisition proposal
independently, outside the Group, provided that:
(i) a legally binding agreement relating to the
acquisition is entered into within 180 days
after the Directors indicated their
concurrence with the determination referred
to above; and
(ii) the acquisition is concluded on terms and
conditions which are not materially less
favourable in the aggregate than those made
known to or offered to, the Group.
(e) Any business or company acquired pursuant to Clauses 11.6 (b),
(c) or (d) is referred to in this Clause as a "Permitted
Target".
(f) The Shareholders and the Company hereby agree to shorten the
30 day periods referred to in Clauses 11.6 (b) (ii) and 11.6
(b) (iii) as appropriate to take due account of the timetable
laid down by the sellers of the shares or business comprised
in a Relevant Acquisition Proposal;
30
(g) If the Group is capable of providing payment processing
services to the Permitted Target's merchants at the time of
acquisition, the Shareholder which is the ultimate parent
undertaking of the purchaser will procure that the purchaser
offers to the Group the right to provide if permitted by the
Scheme Rules, services (on an outsourcing basis) which
merchants of the Permitted Target require and which form part
of the Business at a price that is equal to or less than the
price that the relevant merchant can from time to time obtain
from a third party on an arm's length basis (or, in the case
of an acquisition made by NOVA, the lesser of such price or
the internal cost at which NOVA can otherwise provide such
services, such services being provided pursuant to applicable
service standards and on standard terms and conditions).
(h) If the Group elects not to process such transactions for the
Permitted Target or if the Permitted Target conducts business
in a geographic area in which the Group does not have such
transaction processing capabilities, the purchaser may process
such transaction on behalf of merchants directly (or through a
local affiliate) or outsource such transaction processing to a
third party.
(i) In addition to the right of access provided by Clause 11.2.1
(c), but subject always to Clause 11.6 (a), the Company shall
seek such documents and information in relation to a Relevant
Acquisition Proposal as may be reasonably requested from time
to time by any Shareholder except where the Company reasonably
considers that seeking such documents and information would
materially prejudice its commercial interests.
11.7 Business Plan
-------------
(a) The Company shall procure that, not later than 45 days before
the beginning of each Financial Year, the management of the
Company prepares and delivers to the Board a draft Business
Plan, incorporating the proposed annual budget, balance sheet,
cash flow forecast, capital requirements and Business
expansion plans, and any proposed acquisitions and/or joint
ventures for the next Financial Year.
(b) The Board shall within 30 days of receiving the draft Business
Plan, approve it subject to any amendments which it deems
appropriate, whereupon, subject to the approval of the
Shareholders in accordance with Part 1 of Schedule 11 it shall
become the Business Plan for that Financial Year.
(c) At any time during a Financial Year, the Board may make
written changes to the Business Plan.
(d) The Business Plan set out in Schedule 12 shall be the Business
Plan for the Company's first Financial Year.
11.8 Duration of covenants
---------------------
The Shareholders' covenants and warranties contained in this Clause 11
(save for the covenants in Clause 11.5(a) and Clause 11.5(g)):
(a) which are given to the Company, shall bind the Shareholder who
gives such covenants and warranties for so long as it or its
nominees or Associated Companies continue to retain any direct
or indirect legal or beneficial interest in the Shares
(without prejudice
31
to any liability which it may have for any antecedent breaches
of this Clause 11); and
(b) which are given to the other Shareholder, shall bind the
Shareholder who gives such covenants and warranties for so
long as it or its nominees or Associated Companies continue to
retain any direct or indirect legal or beneficial interest in
the Shares, in each case, without prejudice to any liability
which it may have for any antecedent breaches of this Clause
11.
12. Confidentiality
12.1 Each Shareholder undertakes (other than in respect of Confidential
Information relating to that Shareholder and not the other Shareholder
or the Company) to the other Shareholder and to the Company, and the
Company undertakes to each Shareholder (in respect of Confidential
Information relating to such Shareholder), that it will not, and will
procure that its respective officers, employees, agents, advisers and
other persons which it controls and the respective officers, employees
and agents of each such person, will not during the period of this
Agreement, and after its termination (for whatever reason) use or
divulge to any person, or publish or disclose or permit to be published
or disclosed, any such Confidential Information belonging to any other
Party, except in the proper course of the provision of services to or
on behalf of the Company or the relevant Member of the Group;
PROVIDED THAT the obligations of this Clause shall not apply to:
(i) any Confidential Information which the recipient can
reasonably demonstrate is in the public domain through no
fault of its own;
(ii) any Confidential Information which is required to be disclosed
by law, pursuant to a court order or by any recognised stock
exchange or governmental or other regulatory body or
requirement (and in such cases, the Party concerned shall, if
practicable, supply an advance copy of the required disclosure
to the other Parties and incorporate any additions or
amendments reasonably requested by them);
(iii) any Confidential Information which is disclosed to any adviser
to any of the Parties, provided the recipient is required to
treat it as confidential;
(iv) any Confidential Information which is disclosed by any Party
to a potential purchaser of all or any of its Shares which is
not a competitor of the Company and which has entered into
obligations of confidentiality similar to those contained in
this Clause (and the Party disclosing Confidential Information
in such circumstances shall not disclose any Confidential
Information relating to the other Shareholder); or
(v) any general business information relating to the Group of a
nature customarily disclosed:
(A) as part of a general investor relations exercise to
professional financial analysts or investors in the
Shareholder; or
(B) to employees or for the purposes of public relations of
BOI or NOVA.
12.2 Whilst the Shareholders shall use all reasonable endeavours to ensure
compliance with this Clause, a Shareholder in breach of its terms shall
not thereby commit a breach of this Agreement
32
if it can show that it took reasonable steps to prevent the breach and
it could not reasonably have been expected to have prevented it.
12.3 If a Shareholder ceases to hold Shares and ceases to be the ultimate
beneficial owner of Shares, it shall forthwith upon request by any
other Party:
(i) deliver to such other Party or the Company (as appropriate)
all copies or records of Confidential Information relating to
such other Party or the Company (as appropriate) which was
provided to it or which is then in its possession or under its
control and expunge, and procure that there is expunged, from
any computer or similar system in its possession or under its
control all such Confidential Information; and
(ii) supply written confirmation to such other Party that it has
complied with its obligations under this Clause 12.
13. Restrictions on announcements
Subject to the disclosures permitted pursuant to Clause 12, each of the
Parties undertakes in favour of the others that it will not make any
announcement, statement or disclosure in connection with this Agreement
or the arrangements contemplated by this Agreement unless (i) such
announcement, statement or disclosure is consistent with any
announcement, statement or disclosure made by the other Parties and
(ii) the other Parties shall have given their respective consents to
such announcement, statement or disclosure (which consents may not be
unreasonably withheld or delayed and may be given either generally or
in a specific case or cases and may be subject to conditions), save
that a Party may make any such announcement, statement or disclosure
that is required by law or any applicable regulatory body or
requirement provided that such announcement, statement or disclosure
shall be no more extensive than is usual or necessary to meet the
requirements imposed upon the Party making such announcement, statement
or disclosure.
14. No partnership
Nothing in this Agreement shall constitute a partnership between any of
the Parties or, save as expressly provided for in this Agreement,
constitute any Party as agent or attorney of any other Party for any
purpose whatever and, save as expressly provided for in this Agreement,
no Party shall have authority or power to bind any other Party or to
contract in the name of or create liability against any other Party in
any way or for any purpose save as expressly authorised in writing one
Party in favour of another from time to time.
15. Conflict with Articles of Association
The Shareholders agree (and the Company agrees, in relation only to the
articles of association of other members of the Group) that if and to
the extent that the Articles of Association or the articles of any
other Member of the Group conflict with the provisions of this
Agreement, this Agreement shall prevail for so long as it is in force
to regulate the way in which they exercise their respective voting
rights as Shareholders and each Party (in the manner aforesaid) shall
at its own cost take all such further reasonable steps as may be
necessary or requisite to ensure that the provisions of this Agreement
shall prevail and that the Group is administered as provided in this
Agreement.
16. Remedies
33
Each Party acknowledges and agrees that if any of them shall breach the
warranties, representations, indemnities, covenants, agreements,
undertakings, and obligations (for the purposes of this Clause referred
to as the "Agreed Terms") on each of their parts contained in this
Agreement or any other agreement entered into pursuant to it, damages
may not be an adequate remedy in which case the Agreed Terms shall be
enforceable by injunction, order for specific performance or such other
equitable relief as a court of competent jurisdiction may see fit.
17. Payments and Costs
17.1 Except as may be agreed between any relevant Parties, all payments made
by any Party to another Party in connection with or pursuant to this
Agreement or any Ancillary Agreement shall be in euro.
17.2 All sums payable by BOI or NOVA pursuant to this Agreement shall be
paid free and clear of all deductions or withholdings, save only as may
be required by law. If any such deductions or withholdings are required
by law, the payor shall pay such sum as will after such deduction or
withholding has been made leave the payee with the same amount as it
would have been entitled to receive in the absence of any such
requirement to make a deduction or withholding. It is acknowledged that
value added tax is not a "deduction" or "withholding" for the purposes
of this Clause 17.2.
17.3 If:
(a) for any reason any amount payable under this Agreement is paid
or is recovered by a Party (in whatever manner) in a currency
(the "payment currency") other than euro (or such other
currency as the payor and the payee may have agreed) (the
"contractual currency"); and
(b) the payment made in the payment currency to the payee, when
converted at the applicable rate of exchange into the
contractual currency at or about 12:00 p.m. on the date upon
which payment is made, is less than the amount payable in
connection with or pursuant to this Agreement,
then the payor shall, as a separate and independent obligation, and
notwithstanding any previous such conversion, on demand fully indemnify
the payee against the amount of the shortfall. For the purposes of this
Clause, the expression "applicable rate of exchange" means the spot
rate at which the payee could purchase the contractual currency in
Dublin with the payment currency, taking into account any costs
associated with the exchange.
17.4 Each Party shall pay its own costs and disbursements of and incidental
to the preparation and execution of this Agreement and each Ancillary
Agreement to which it is a party.
18. Transfer
Save as otherwise provided herein, the benefits and obligations
conferred by this Agreement upon each of the Parties are personal to
that Party and shall not be, and shall not be capable of being,
assigned, delegated, transferred, sub-contracted or otherwise disposed
of.
34
19. Entire agreement
This Agreement (together with any documents referred to herein or
executed contemporaneously by the Parties in connection herewith)
constitute the whole agreement between the Parties and supersedes any
previous agreements, arrangements or understandings (both oral and
written) between them relating to the subject matter hereof. Each of
the Parties acknowledges that it is not relying on any statements,
warranties or representations given or made by any of them relating to
the subject matter hereof, save as expressly set out in this Agreement
and the Ancillary Agreements. In the event of any inconsistency between
the provisions of this Agreement and the provisions of the Outsourcing
Agreement, the provisions of this Agreement shall prevail.
20. Variation
No variation of any of the terms of this Agreement shall be effective
unless it is in writing and signed by authorised representatives of
each of the Parties. The expression "variation" shall include any
variation, supplement, deletion or replacement however effected.
21. Notices
21.1 Any notice or other communication to be given under this Agreement
shall be in writing, shall be deemed to have been duly served on, given
to or made in relation to a Party if it is left at the authorised
address of that Party, posted by pre-paid post addressed to that Party
at such address, or sent by facsimile transmission to a machine
situated at such address and shall if:
(a) personally delivered (whether by courier or otherwise), be
deemed to have been received at the time of delivery;
(b) posted from and to an inland address in Ireland, be deemed to
have been received on the second Business Day after the date
of posting and if posted from or to an overseas address, be
deemed to have been received on the fifth Business Day after
the date of posting; or
(c) sent by facsimile transmission, be deemed to have been
received upon receipt by the sender of a facsimile
transmission report (or other appropriate evidence) that the
facsimile has been transmitted to the addressee,
PROVIDED that where, in the case of delivery by hand or facsimile
transmission, delivery or transmission occurs after 6:00 p.m. (local
time in the place to which a notice is being sent) on a Business Day or
on a day which is not a Business Day, receipt shall be deemed to occur
at 9:00 a.m. (local time in the place to which a notice is being sent)
on the next following Business Day.
35
21.2 For the purposes of this Clause the authorised address of each Party
shall be the address and contact details set out below (including the
details of the facsimile number) or such other address (and details) as
that Party may notify to the others in writing from time to time in
accordance with the requirements of this Clause:
----------------------------- -------------------------- --------------------------------------------
Name Address Fax Marked for the
attention of:
----------------------------- -------------------------- ---------------------- ---------------------
The Governor and Company of Head Office, (x000 0) 0000000 Chief Financial
the Bank of Ireland Lower Baggot Street, (x000 0) 0000000 Officer ("CFO")
Xxxxxx 0, and a copy to Group
Ireland Secretary
----------------------------- -------------------------- ---------------------- ---------------------
NOVA Corporation One Concourse Parkway, (+1) 770698 1046 CEO and copies to CFO
Suite 300, and General Counsel
Xxxxxxx,
Xxxxxxx 00000,
XXX
----------------------------- -------------------------- ---------------------- ---------------------
Euroconex Technologies c/o Card Services, (x000 0) 0000000 CEO and copy to CFO.
Limited 00 Xxxxxxxxxx Xxxxxx, Xxxx also to
Xxxxxx 0. Shareholders
----------------------------- -------------------------- ---------------------- ---------------------
21.3 In proving such service, it shall be sufficient to prove that personal
delivery was made, or that the envelope containing such notice was
properly addressed and delivered into the custody of the postal
authorities as a pre-paid letter, or that a confirmed facsimile
transmission report has been obtained.
22. Waiver
22.1 Any waiver of a breach of any of the terms of this Agreement or of any
default hereunder shall not be deemed a waiver of any subsequent breach
or default and shall in no way affect the other terms of this
Agreement.
22.2 No failure to exercise and no relaxation, forbearance, indulgence or
delay on the part of any party in exercising any right, remedy, power
or privilege of that Party under this Agreement and no course of
dealing between the Parties shall be construed or operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy,
power or privilege preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights
and remedies provided by this Agreement are cumulative and are not
exclusive of any rights or remedies provided by law.
23. Severability
If any provision or part of a provision of this Agreement or its
application to any Party, shall be, or be found by any authority of
competent jurisdiction to be, illegal, invalid or unenforceable, such
illegality, invalidity or unenforceability shall not affect the other
provisions or parts of such provisions of this Agreement, all of which
shall remain in full force and effect.
36
24. Counterparts
This Agreement may be executed in any number of counterparts, each of
which when executed and delivered shall be an original, but all of
which when taken together shall constitute a single instrument and
shall take effect from the time of execution of the last engrossment.
Immediate evidence that an engrossment has been executed may be
provided by transmission of such engrossment by facsimile machine with
the executed original to be promptly put in the post.
25. Further assurance
At its own cost, each Party shall, and shall use all reasonable efforts
to procure that any other person shall, do and execute and perform all
such further deeds, documents, assurances, acts and things as may
reasonably be required to give effect to this Agreement and to ensure
that all provisions of this Agreement are observed and performed.
26. Governing law and jurisdiction
26.1 This Agreement shall be governed by, and shall be construed in
accordance with, Irish law.
26.2 Each of the Parties irrevocably agrees that, subject to the last
sentence of Clause 11.3(c), the courts of Ireland shall have
non-exclusive jurisdiction to hear and determine any claim, suit,
dispute, action, matter of difference or proceeding (together referred
to in this Clause 26 as "Proceedings"), and to settle any Proceedings,
which may arise out of or in connection with this Agreement and, for
such purposes, irrevocably submits to the jurisdiction of such courts.
26.3 Each Party irrevocably waives any objection which it might now or
hereafter have to the courts referred to in Clause 26.2 being nominated
as the forum to hear, determine and settle any Proceeding which may
arise out of or in connection with this Agreement and agrees not to
claim that any such court is not a convenient or appropriate forum.
26.4 BOI and the Company irrevocably agree that in the event of any
Proceeding between any of the Parties hereto being commenced in respect
of this Agreement or any matters arising under it, the process by which
it is commenced (where consistent with the applicable court rules), may
be served on them in accordance with Clause 21 (Notices). NOVA
irrevocably agrees that the process by which any Proceeding commenced
in Ireland is begun may be served on it by being delivered to Xxxxxxx
Xxx, solicitors, marked for the attention of Xxxxxxx Xxxxxx (and NOVA
confirms that Xxxxxxx Xxx has irrevocably consented to its appointment
as process agent). Copies of such proceedings shall be sent also to
NOVA in accordance with Clause 21. Nothing contained herein shall
affect the right to serve process in any other manner permitted by law.
26.5 The submission to the jurisdiction of the courts referred to in Clause
26.2 shall not (and shall not be construed so as to) limit the right of
any Party to take proceedings against any other Party in any other
court of competent jurisdiction nor shall the taking of proceedings in
any one or more jurisdictions preclude the taking of proceedings in any
other jurisdiction (whether concurrently or not) if and to the extent
permitted by applicable law.
26.6 Each Party consents generally in respect of any legal action or
proceeding arising out of or in connection with this Agreement to the
making, enforcement or execution against any property whatsoever
(irrespective of its use or intended use) of any final order or final
judgment which may be given in such action or proceeding.
37
26.7 To the extent that any Party may in any jurisdiction claim for itself
or its assets immunity from suit, execution, attachment (whether in aid
of execution, before judgment or otherwise) or other legal process and
to the extent that in any such jurisdiction there may be attributed to
itself or its assets such immunity (whether or not claimed), such Party
irrevocably agrees not to claim and hereby irrevocably waives such
immunity to the full extent permitted by the laws of such jurisdiction.
IN WITNESS whereof the Parties have entered into this Agreement the day and year
first before written.
38
SCHEDULE 1
Details of the Company
------------------------------ -----------------------------------------------------------------------
Name Euroconex Technologies Limited
------------------------------ -----------------------------------------------------------------------
Date of incorporation: 26/th/ April, 2000
------------------------------ -----------------------------------------------------------------------
Class of company Irish private company limited by shares
------------------------------ -----------------------------------------------------------------------
Registered number 327239
------------------------------ -----------------------------------------------------------------------
Registered office Xxxxxx Xxx Xxxxxxxx, Xxxxxxxxx Xxxxxx, Xxxxxxxxx Xxxxxxx, Xxxxxx 0
------------------------------ -----------------------------------------------------------------------
Directors Xxxxx Xxxxxxxx, Xxxx X'Xxxxx, Xx Xxxxxxxxxxx,
Xxxxxx Xxxxxx.
------------------------------ -----------------------------------------------------------------------
Secretary Xxxxx Xxxxxxx
------------------------------ -----------------------------------------------------------------------
Subsidiaries None
------------------------------ -----------------------------------------------------------------------
Auditor Pricewaterhouse Coopers
------------------------------ -----------------------------------------------------------------------
Authorised share capital immediately after Completion
-----------------------------------------------------
-------------------------------------------------- --------------------------------
Class Authorised
-------------------------------------------------- --------------------------------
Ordinary Shares of [] 1.00 each 50,000,000
-------------------------------------------------- --------------------------------
Issued share capital immediately after Completion
-------------------------------------------------
---------------------------------------- ------------------------------------------
Name of registered holder Number and class of shares held
---------------------------------------- ------------------------------------------
BOI 1 BOI Ordinary Share
---------------------------------------- ------------------------------------------
XXXX 0 XXXX Xxxxxxxx Share
---------------------------------------- ------------------------------------------
39
SCHEDULE 2
Completion
1. On the Completion Date:
(a) the Parties will procure that a meeting of the Board shall be
held to approve and pass resolutions substantially in the form
specified in draft minutes in the agreed terms; and
(b) the Parties will procure that an Extraordinary General Meeting
of the Company shall be convened and that the resolutions
specified in the draft notice of meeting of the Company in the
agreed terms shall be proposed and passed at such meeting,
such proposed resolutions including the adoption of the new
Articles of Association referred to in the said resolution and
attached as Schedule 3.
2. Subject to completion of the matters referred to in 1 above, the
Parties who are also parties to the Ancillary Agreements (other than
the NOVA Services Agreement) shall enter into the same and the
Shareholders shall procure that the Company enters into those Ancillary
Agreements (other than the NOVA Services Agreement) it is a party to.
40
SCHEDULE 3
The Articles of Association
41
SCHEDULE 4
Form of Deed of Adherence
THIS DEED OF ADHERENCE is made the day of
BETWEEN:
(1) [ ] whose contact details appear in the Schedule (the "New Party").
(2) [All the Parties to the Principal Agreement including any person who
has entered into a Supplemental Agreement pursuant to the Principal
Agreement but excluding any Shareholder (other than the Transferor) who
has ceased to hold Shares.]
RECITALS:
(A) Under the terms of a joint venture agreement dated [ ] 2000 (the
"Principal Agreement") and entered into between [ ] [and to which [ ]
(the "Transferor") is [an original party] [a party by virtue of a
Supplemental Agreement dated [ ] the Transferor has sold and
transferred to the New Party [insert number and type of Shares] subject
to the New Party entering into this Deed of Adherence].
(B) The New Party wishes to accept such Shares subject to such condition
and to enter into this Deed of Adherence pursuant to Clause 7 (Transfer
of Shares) of the Principal Agreement.
IT IS AGREED AS FOLLOWS:
1. Expressions defined in the Principal Agreement shall (unless the
context otherwise requires) have the same meaning when used in this
Deed.
2. The New Party hereby undertakes to and covenants with all the Parties
to the Principal Agreement (including any person who has entered into a
Supplemental Agreement pursuant to the Principal Agreement) to comply
with the provisions of and to perform all the obligations in the
Principal Agreement so far as they become due to be observed and
performed on or after the date hereof as if the New Party had been an
original Party to the Principal Agreement in place of the Transferor.
3. The New Party shall become a [BOI/NOVA] Shareholder and the Transferor
shall cease to be a Shareholder and on and after the date hereof the
New Party shall have the benefit of the provisions of the Principal
Agreement as if the New Party had been an original Party thereto in
place of the Transferor and the Principal Agreement shall be construed
and apply accordingly.
4. For the avoidance of doubt, the New Party shall not be entitled to any
amount which has fallen due for payment to the Transferor before the
date hereof and shall not be liable in respect of any breach or
non-performance of the obligations of the Transferor pursuant to the
Principal Agreement before the date hereof and the Transferor shall
remain entitled to each such amount and shall not be released from any
liability in respect of any such breach or non-performance.
5. Except as expressly varied by this Deed, the Principal Agreement shall
continue in full force and
42
effect, and the Principal Agreement shall be interpreted accordingly.
6. The provisions of Clauses 1(Definitions and interpretation), 17
(Payments and costs), 19 (Entire agreement), 20 (Variation), 21
(Notices), 22 (Waiver), 23 (Severability), 24 (Counterparts) and 27
(Governing law and jurisdiction) of the Principal Agreement shall apply
to this Deed mutatis mutandis as if those provisions had been set out
expressly in this Deed, which shall take effect from the date set out
above.
IN WITNESS whereof the parties have executed and delivered this document as
their deed the day and year first above written.
The Schedule
Details of New Party
Name:
Registered no. (if a company):
Country of incorporation (if a company):
Address:
Facsimile no.:
Other notice details:
[Execution clause]
43
SCHEDULE 5
Pre-emption provisions
1 The Directors in their absolute discretion and without assigning any
reason therefor may decline to register any transfer of Shares on which
the Company has a lien or which are not fully paid. The Directors shall
not register a transfer to a person who is known to them to be an
infant, bankrupt or person of unsound mind provided that the Directors
shall not be bound to enquire into the age or soundness of mind of any
transferee or whether or not he is a bankrupt.
2 (a) Save for transfers of Shares made pursuant to the provisions
of Clause 7.2, Clause 8 and/or paragraph 3 of Schedule 5 and
subject to paragraph 2(b), no sale, transfer or disposal of
any Shares or any interest in any Shares shall be made by a
Shareholder except in compliance with the following provisions
of this Schedule and no Shareholder shall otherwise sell,
transfer or dispose of any Share or any interest therein, or
create or permit to subsist any Third Party Interest in
respect thereof.
(b) If necessary for the procurement of financing for BOI or NOVA
or its Associated Companies, BOI or NOVA may create a Third
Party Interest over its Shares in favour of any bank providing
such financing, provided that:
(i) it notifies the other Shareholder of its intent to do
so in advance of the creation of, or any variation of
the terms of, the Third Party Interest;
(ii) it provides a copy of all documents and instruments
constituting such Third Party Interest, together with
any variations thereto from time to time to the other
Shareholder;
(iii) the terms of the Third Party Interest do not result
in such Shareholder having to cast, or agree to cast,
any of the voting rights exercisable in respect of
any Shares held by it in accordance with the
directions of, or subject to the consent of the
beneficiary(ies) of the Third Party Interest; and
(iv) the Third Party Interest does not, prior to its
enforcement, constitute or operate as a transfer of
any legal or beneficial interest in the Shares.
3 If:-
(a) a Shareholder at any time attempts to deal with or dispose of
any Share or any interest therein or right attaching thereto
otherwise than as permitted by this Agreement;
(b) a petition is presented or a proceeding is commenced (and such
petition or proceeding is not discharged or dismissed within 5
Business Days of presentation thereof) or an order is made or
an effective resolution is passed for the winding-up,
insolvency, court protection, administration, re-organisation,
re-construction, dissolution or bankruptcy of a Shareholder or
for the appointment of a liquidator, receiver, examiner,
administrative receiver, examiner, administrator, trustee or
similar or analogous officer of a Shareholder of all or any
part of its business or assets PROVIDED THAT these provisions
shall not apply to a bona fide reorganisation or
reconstruction of a Shareholder whilst solvent;
44
(c) a Shareholder stops or suspends payments to its creditors
generally or is unable or admits its inability to pay its
debts as they fall due or seeks to enter into any composition
or other arrangement with its creditors or is declared or
becomes bankrupt or insolvent; if a creditor takes possession
of all or any part of the business or assets of a Shareholder
or any execution or other legal process is enforced against
the business or a material part of the assets of a Shareholder
and is not discharged within 5 Business Days;
(d) a Change in Control occurs with respect to BOI or NOVA;
(e) a Shareholder at any time commits a breach of paragraphs
2(b)(iii) or (iv) and fails to cure the breach within 3 days
of a notice from the other Shareholder requiring remedy, or if
enforcement action is taken by or on behalf of the
beneficiary(ies) of any Third Party Interest in respect of a
Shareholder's Shares;
(f) a Shareholder agrees in writing that it will provide funds in
excess of (Euro) 1,000,000 euros to the Group for the capital
requirements of the Group and such Shareholder fails to
provide such funds by the date specified and, following notice
from the Company referring to this sub-paragraph (f) and
allowing a further 14 day period to provide such funds, the
Shareholder has failed to provide the funds within the further
14 day period (provided that such failure is not attributable
to reasons outside of the control of such Shareholder and
provided further that such Shareholder contributes such funds
as soon as is reasonably possible following the cessation of
the event(s) outside its control which delayed its
contribution and in any event within 90 days following such
cessation);
(g) anything analogous or having a substantially similar effect to
any of the events specified in this paragraph 3 happens under
the laws of any applicable jurisdiction,
that Shareholder or his Representative in the case of paragraphs (b)
(or, if relevant, (e)), shall be deemed to be a Transferor and to have
given immediately prior to such attempt or event (as the case may be),
a transfer notice (herein a "Deemed Transfer Notice") in respect of
such Share, which shall be governed by paragraph 5.
4.1 Before selling, transferring or otherwise disposing of any Share or any
interest in any Share, the Shareholder proposing to sell, transfer or
dispose of the same (hereinafter called the "Transferor", which term
shall be deemed to include all nominees and Associated Companies of
such Shareholder which hold any Shares) shall give a notice in writing
(hereinafter called a "Transfer Notice") to the Company and each
Director (at the Company's registered office) that it wishes to sell,
transfer or dispose of the same. The Transfer Notice shall specify:
(a) the class and number of Shares and/or any interest therein
which the Transferor wishes to transfer or dispose of (which
shall be all (but not part only) of the Shares then held by
the Transferor) (hereinafter called the "Relevant Shares");
and
(b) the price at which the Transferor is willing to sell the
Relevant Shares (such price being irrevocable, save with the
consent of the other Shareholder),
and shall have annexed to it the share certificate(s) in respect of the
Relevant Shares.
45
4.2 The Transfer Notice shall constitute the Company the agent of the
Transferor for the sale of the Relevant Shares at the Prescribed Price
(as hereinafter defined) during the Prescribed Period (as hereinafter
defined) to the other Shareholder which is not the Transferor (the
"Transferee") and save as provided in paragraph 6 of this Schedule
shall not be revocable except with the written consent of such other
Shareholder.
5.1 Within 2 Business Days after the receipt of any Transfer Notice, the
Directors shall serve a copy of that Transfer Notice on the Transferee.
In the case of a Deemed Transfer Notice (other than a Deemed Transfer
Notice which arises as a result of a Change in Control), the Directors
shall similarly serve notice on all the Shareholders (including the
Transferor), notifying them that the same has been deemed to have been
given, within 5 Business Days after (i) the date of the event giving
rise to the Deemed Transfer Notice or (ii) (if later) the date on which
the Directors (as a whole) actually become aware of such event and
shall specify in such notice the number and class of Shares which the
Transferor is deemed to wish to transfer (which shall be all (but not
part only) of the Shares then held by the Transferor) (also referred to
in this Schedule as the "Relevant Shares"). That notice shall then
constitute a Transfer Notice and the provisions of this Schedule shall
apply mutatis mutandis thereto save that:-
(a) it shall not be revocable; and
(b) the Transferor shall not be entitled to specify a price at
which it is willing to sell the Relevant Shares.
5.2 In the case of a Deemed Transfer Notice arising as a result of a Change
in Control of BOI or NOVA, the Directors shall similarly serve notice
on all the Shareholders (including the Transferor), notifying them that
the same has been deemed to have been given, within 5 Business Days
after (i) the date of the event giving rise to the Deemed Transfer
Notice or (ii) (if later) the date on which the Directors (as a whole)
actually become aware of such event and shall specify in such notice
the number and class of Shares which the Transferor is deemed to wish
to transfer (which shall be all (but not part only) of the Shares then
held by the Transferor) (also referred to in this Schedule as the
"Relevant Shares"). That notice shall then constitute a Transfer Notice
and the provisions of this Schedule shall apply mutatis mutandis
thereto save that:-
(a) it shall not be revocable;
(b) the Transferor shall not be entitled to specify a price at
which it is willing to sell the Relevant Shares;
(c) the Prescribed Period shall not have the meaning given to it
in paragraph 7 of this Schedule but shall be the period
commencing on the date of the Transfer Notice or the date of
such agreement, if later, and expiring 12 months thereafter;
and
(d) BOI and NOVA shall negotiate in good faith with the acquiror
to determine whether the existing Share arrangements and the
Business can be preserved in a manner which is acceptable to
each of them, acting reasonably.
6.1 If the price stated in the Transfer Notice shall be accepted by the
Transferee, such price shall be the Prescribed Price (as determined
pursuant to paragraphs 6.2 or 6.3 below). If such price shall not be so
accepted, or because a Deemed Transfer Notice was served, no such price
was served, the Shareholders shall seek to agree in good faith a price
for the Relevant Shares.
46
6.2 If within 20 Business Days after the date on which the Transfer Notice
was given by the Directors, the Transferor and the Transferee shall
have agreed a price for the sale of the Relevant Shares, then such
price shall be the Prescribed Price.
6.3 In default of such agreement within such period, the Directors shall
forthwith request the Expert to determine and certify in writing the
sum considered by it to be the Open Market Value of the Relevant Shares
as at the date of the Transfer Notice. The lesser of:
(a) the Open Market Value as at the date of the Transfer Notice;
and
(b) the price (if any) specified in the Transfer Notice,
shall be the Prescribed Price.
6.4 The Expert shall act as an expert and not as an arbitrator and its
written determination shall be final and binding on the Shareholders.
The Shareholders will, and will procure that the Company will, give all
reasonable assistance to the Expert to enable the Expert to determine
the sum considered by it to be the Open Market Value of the Relevant
Shares as at the date of the Transfer Notice. The Expert shall make its
working papers relating thereto available to each Shareholder upon
request. The costs and expenses of the Expert shall be borne by the
Shareholders equally PROVIDED THAT if the Transferor is in liquidation,
receivership or is the subject of a court protection order or any
analogous proceeding under the laws of any jurisdiction or is otherwise
unable or unwilling to pay such costs, an amount equal to the
Transferor's share of such costs shall be deducted from any purchase
monies otherwise to be paid to the Transferor.
6.5 The Parties shall use their respective reasonable endeavours to ensure
that the Expert makes its determination within 20 Business Days of
referral of the matter to it. The Transferor shall be entitled by
written notice to the Directors to withdraw the Transfer Notice (not
being a Deemed Transfer Notice) within 2 weeks of the date on which it
is notified of the Expert's determination of the Prescribed Price.
6.6 The "Expert" shall be such investment bank or international accounting
practice not connected to any Party as may be agreed by the
Shareholders or, in the absence of agreement, such international
investment bank (with offices in New York and London) or international
accounting practice not connected to any Party as may be nominated at
the request of any Shareholder by the President from time to time of
the Law Society of Ireland.
6.7 For the purpose of this Schedule, the "Open Market Value" of the
Relevant Shares at the date of the Transfer Notice shall be ascertained
on the following assumptions and bases:
(i) valuing the Relevant Shares as on an arms' length sale between
a willing vendor and a willing purchaser taking into account
any bona fide arms' length offer from an independent third
party made within the preceding twelve months in respect of
all the Shares but not taking any account of any expenses that
might be incurred in connection with the sale and purchase of
the Relevant Shares;
(ii) if the Company is then carrying on business as a going
concern, on the assumption that it will continue to do so;
(iii) that the Relevant Shares are capable of being transferred
without restriction;
47
(iv) taking full account of any rights and obligations attached to
the Relevant Shares, whether by virtue of any contract or
otherwise;
(v) taking no account of whether or not the Relevant Shares carry
a majority of the voting rights capable of being exercised at
general meetings of the Company;
(vi) that the Ancillary Agreements will operate in the manner set
out therein after the transfer; and
(vii) having regard to the valuation of companies in the same
business sector as the Company whose shares are listed, or
quoted, or traded, on the New York Stock Exchange or through
the NASDAQ National Market System, or on EASDAQ, or on the
London Stock Exchange, or on any other recognised stock
exchange in Europe.
7. If the Prescribed Price is accepted or agreed as aforesaid, the
Prescribed Period shall commence on the date of the Transfer Notice (or
the date of such agreement, if later), and shall expire 30 days
thereafter. If the Prescribed Price is not so accepted or agreed then
the Prescribed Period shall commence on the date on which the Expert
shall have notified the Directors of its determination of the
Prescribed Price and shall expire 30 days thereafter.
8. Promptly following acceptance or agreement of the Prescribed Price or 2
weeks after the Transferor has been notified of the determination of
the Prescribed Price by the Expert and has not withdrawn its Transfer
Notice pursuant to paragraph 6.5 of this Schedule, the Relevant Shares
shall be offered by the Company by notice in writing to the Transferee
for purchase at the Prescribed Price. Such offer shall be open for
acceptance at any time within the Prescribed Period. Every such offer
shall specify the total number of Relevant Shares and shall be
accompanied by a form of application for use by the Transferee in
applying for all (but not part only) of the Relevant Shares.
9. If the Shareholder which is not the Transferor applies for all or any
of the Relevant Shares within the Prescribed Period, the Directors
shall promptly give notice in writing thereof to the Transferor and the
Transferor shall be bound upon payment to transfer such of the Relevant
Shares to the Transferee as it has applied for. The purchase shall be
completed at a place and time specified by the Directors being not less
than 2 Business Days nor more than 10 Business Days after the date of
such notice, and the Directors shall be bound to register the transfer.
10. An offer of sale of the Relevant Shares made by the Directors pursuant
to this Schedule shall only be capable of acceptance when all of the
Relevant Shares shall have been accepted by the Transferee. If by the
foregoing procedures the Directors shall not have received acceptances
in respect of all of the Relevant Shares within the Prescribed Period,
they shall forthwith give notice in writing of that fact to the
Transferor. The Transfer Notice shall then be deemed to have been
withdrawn and no transfers shall take place provided that the
Transferor shall then be entitled at any time within 90 days after the
date of the Directors' said notice:
(a) to sell and transfer all (but not part) of the Relevant Shares
which have not been accepted as aforesaid to any person at any
price greater than the Prescribed Price and the Directors
shall be bound to register the same; or
(b) if the Transferor is a Representative, to elect to be
registered himself as the holder of all
48
or part of those Relevant Shares which have not been accepted
as aforesaid, without triggering the pre-emption rights in
this Schedule.
11. A Transferor, having become bound to transfer any Shares pursuant to
this Agreement shall deliver to the transferee duly executed transfers
in respect of such Shares in favour of the transferee together with the
relative share certificate(s) against payment by the transferee of the
price due in respect thereof. If the Transferor makes default in
transferring the same, each Director is hereby irrevocably and
unconditionally appointed as the attorney of the Transferor to complete
and to execute and deliver the necessary instrument of transfer of such
Shares together with an indemnity from the Transferor in respect of
non-production of share certificates in respect of such Shares and may
deliver them on the Transferor's behalf and the Company shall receive
the purchase money on trust for the Transferor and shall thereupon
(subject to such instrument being duly stamped) cause the transferee to
be registered as the holder of such Shares. The Company shall not be
bound to earn or pay interest on any money so held and shall not pay
such money to the Transferor until it shall have delivered its share
certificates (or an appropriate indemnity in respect of any lost
certificates) to the Company. The receipt of the Company for such
purchase money shall be a good discharge to the transferee who shall
not be bound to see to the application thereof, and after the name of
the transferee has been entered in the register of members in purported
exercise of the aforesaid power, the validity of the proceedings shall
not be questioned by any person.
12. For the purpose of ensuring that a particular transfer of a Share is
permitted under this Agreement, the Directors appointed by the holders
of Shares not the subject of the relevant transfer may require the
Transferor or the person named as transferee in any transfer lodged for
registration to furnish the Company with such information and evidence
as they may, acting reasonably, think necessary or relevant. Failing
such information or evidence being furnished to the satisfaction of
such Directors within a period of 28 days after such request, the
Directors shall be entitled to refuse to register the transfer in
question.
13. An obligation to transfer a Share under the provisions of this
Agreement shall be deemed to be an obligation to transfer as legal and
beneficial owner the entire legal and beneficial interest in such Share
free from any lien, charge or other encumbrance or Third Party Interest
and together with all rights attaching thereto and shall bind each
Party accordingly.
14. Upon the transfer of any Shares pursuant to the provisions of this
Agreement, the Transferor shall be entitled to all dividends and
interest accrued in relation to those Shares up to the date of
transfer.
15. The provisions of this Schedule may be waived in whole or in part in
any particular case with the prior written consent of each of the
Shareholders.
49
SCHEDULE 6
Asset Contribution Agreement
50
SCHEDULE 7
Outsourcing Agreement
51
SCHEDULE 8
NOVA Software License Agreements
52
SCHEDULE 9
BOI Services Agreement
SCHEDULE 10
Sphere of operations
Part 1 - The Territory
----------------------
Ireland
United Kingdom (includes Isle of Man, Channel Islands)
France
Spain
Italy
Germany
Belgium
The Netherlands
Denmark
Sweden (includes Bear Island, Faeroe Island, Greenland)
Greece
Luxembourg
Austria
Finland
Portugal
Norway
Switzerland
Part 2 - The Extended Territory
-------------------------------
European countries as listed under the VISA and Europay Card Scheme rules
(excluding countries listed in Part 1).
Albania
Andorra
Armenia
Azerbaijian
Belarus
Bulgaria
Cyprus
Czech Republic
Estonia
Monaco
Georgia
Gibraltar
Hungary
Iceland
Israel
Kyrgzstan
00
Xxxxxx
Xxxxxxxxxxxxx
Xxxxxxxxx
Xxxxx
Xxxxxxx
Xxxxxx
Poland
Republic of Bosnia-Herzegovnia
Republic of Croatia
Republic of Kazakhstan
Republic of Macedonia
Republic of Slovenia
Romania
San Marino
Slovak Republic
Tadjikistan
Turkey
Turkmenistan
Ukraine
Uzebekistan
Vatican City
Yugoslavia
54
SCHEDULE 11
Matters requiring Shareholder consent or Board approval
The provisions of this Schedule 11 may be amended from time to time by agreement
in writing between the Shareholders
Part 1 - Matters requiring Shareholders consent
Each of the matters set out in Part 1 of this Schedule in relation to the
Company, and to the extent possible, the other Members of the Group, shall
require prior approval by the consent in writing of the BOI Shareholder and the
NOVA Shareholder respectively (and all references to "shares" in this Schedule
shall be deemed to include a reference to the Shares):
(a) the acquisition or disposal of any interest in any real property,
whether freehold or leasehold, with a value in excess of 10,000,000
euros (or such other figure as the Shareholders may agree in writing);
(b) except for borrowing between Group members, borrowing any money, or
obtaining credit (other than normal trade credit) or making any other
arrangement having a similar effect (including, without limitation,
debt factoring, invoice discounting, hire purchase, equipment leasing,
conditional or credit sales, or any off balance sheet borrowings), or
materially varying the terms of any credit arrangement in each case,
whereby the aggregate amount outstanding and owing by the Group from
time to time (including sums attributable to capital under the then
current accounting practice) exceeds 10,000,000 euros (or such other
figure as the Shareholders may agree in writing);
(c) except as provided for in this Agreement, any alteration to the
Memorandum and Articles of Association;
(d) (A) the modification of any of the rights attached to any shares or
the creation or allotment or issue of any shares or (except
pursuant to a share option or similar scheme for employees the
terms of which have been agreed by the Shareholders) the grant of,
or agreement to grant, an option over, or the issue of a right to
call for the issue of any shares or uncalled capital or the issue
of any obligations convertible into shares;
(B) consolidating, subdividing, purchasing, redeeming or cancelling
any Shares or any other share capital reorganisation;
(C) capitalising any reserves, or reducing any amount standing to the
credit of its share premium account or capital redemption or other
reserve or approving any dividend or any other distribution (in
cash or in specie);
(D) the making of any contribution to the capital of the Company;
(e) (A) entering into an agreement or letter of intent with any person or
with a view to a disposal of any interest in shares;
(B) taking any steps with a view to a liquidation, winding up or
examinership of any Member of the Group or the appointment of a
receiver to all or a material part of its
55
assets;
(f) except as provided for in or permitted by this Agreement or the
Articles concerning the appointment and removal by BOI and NOVA of
their respective nominees to the Board, appointing or removing (other
than as an alternate pursuant to the Articles) any person as a director
of any Member of the Group;
(g) except as provided for in or permitted by this Agreement or the
Articles, approving the transfer (whether legal or beneficial) of any
Shares in any Members of the Group;
(h) approving any substantial alterations to (including cessation of) the
nature or geographical area of the Business or the commencement of any
materially new type of business;
(i) entering into, materially varying or terminating any transaction or
arrangement (whether or not constituting a contract and including,
without limitation, any gift or loan and including the giving of any
Board or other consent or approval under any service agreement):
(A) with any member of the Board; or
(B) with any person related to otherwise closely connected with
any member of the Board; or
(C) in which any member of the Board or any such person has an
interest,
except for any transaction for which provision is made in the service
agreements with the Management;
(j) whether by a single transaction or by a series of transactions,
acquiring, selling, leasing, assigning, disposing of, parting with
possession of or transferring or entering into any other agreement for
the acquisition, sale, transfer, surrender or other disposition of any
of the undertaking, property, assets or business of any Member of the
Group member for a consideration in excess of 10,000,000 euros;
(k) acquiring or entering into any other agreement for the acquisition
(including by way of outsourcing) of any business, or for the
acquisition of any company shares for a consideration in excess of
10,000,000 euros;
(l) incurring or agreeing to incur capital expenditure in any one financial
year exceeding in the aggregate 10,000,000 euros;
(m) entering into (other than as contemplated by this Agreement), varying
or terminating any Ancillary Agreement (other than in accordance with
its terms) or any other agreement with a Shareholder or any Associated
Company (excluding normal banking arrangements);
(n) the formation of any subsidiary undertaking;
(o) the participation in any partnership or joint venture;
(p) any material change to the technology platform used by the Company; and
(q) the approval, adoption or any material change to the Business Plan.
56
Part 2 - Matters requiring Board approval
Each of the matters set out in Part 2 of this Schedule in relation to the
Company, and to the extent possible, the other Members of the Group, shall,
unless the relevant matter below has been included in any Business Plan adopted
in accordance with Clause 11.7, require prior approval of the Board (and all
references to "shares" in this Schedule shall be deemed to include a reference
to the Shares):
(a) establishing or modifying any profit sharing scheme, incentive
arrangements, bonuses, pension plan or appointing or removing any
trustees or managers of any pension scheme;
(b) adopting any material new accounting policy or practice or making any
material change to any existing accounting policy or practice, except
as required by law to comply with a new accounting standard;
(c) engaging or dismissing any employee or consultant whose annual
remuneration (including benefits and bonuses) exceeds 125,000 euros (or
such other amount as the Board may resolve) or making any material
variation in the terms of engagement (including remuneration) of such a
person;
(d) entering into, materially varying or terminating any lease, licence,
tenancy, contract or similar arrangement where the rental and all other
payments under it exceeds 200,000 euros annually;
(e) the entry into any contract otherwise than on an arm's length basis;
(f) approval of or amendment to the long term strategic plan of the
Company;
(g) whether by a single transaction or by a series of transactions,
acquiring, selling, leasing, assigning, disposing of, parting with
possession of or transferring or entering into any other agreement for
the acquisition, sale, transfer, surrender or other disposition of any
of the undertaking, property, assets or business of any Member of the
Group member for a consideration greater than 500,000 euros;
(h) incurring or agreeing to incur capital expenditure in any one financial
year exceeding in the aggregate 500,000 euros;
(i) except for borrowing between Group members, borrowing any money, or
obtaining credit (other than normal trade credit) or making any other
arrangement having a similar effect (including, without limitation,
debt factoring, invoice discounting, hire purchase, equipment leasing,
conditional or credit sales, or any off balance sheet borrowings), or
materially varying the terms of any credit arrangement in each case,
whereby the aggregate amount outstanding and owing by the Group from
time to time (including sums attributable to capital under the then
current accounting practice) exceeds 1,000,000 euros (or such other
figure as the Shareholders may agree in writing);
(j) the appointment of auditors, consultants, tax advisers and solicitors
to the Company;
(k) making any loan or advance (other than a deposit of money with a bank,
normal trade credit or advances to merchants in the ordinary course of
business) to any person;
57
(l) the creation or issue or allowing to come into being of any Third Party
Interest (other than a lien on assets arising by operation of law in
the ordinary course of business and securing sums not more than 30 days
overdue) upon any part of the undertaking, property or assets or
uncalled capital of the Group or the creation or issue of any debenture
or debenture stock or the issue of any guarantee or indemnity (other
than in the ordinary course of business);
(m) engaging in any derivative or hedging transaction outside the cash
management policy set out in the annual budget contained in the
Business Plan;
(n) commencing or settling any litigation or arbitration proceedings
involving payments by the Company in excess of 100,000 euros in any one
case (other than (i) in relation to an Ancillary Agreement and/or (ii)
in respect of debt collection in relation to a person which is not a
Party or an Associated Company);
(o) the acquisition or disposal of any interest in any real property,
whether freehold or leasehold with a value in excess of 500,000 euros.
58
SCHEDULE 12
Business Plan
59
SCHEDULE 13
Econex Distribution Agreement
60
SIGNED by )
for and on behalf of )
THE GOVERNOR AND COMPANY OF )
THE BANK OF IRELAND ) /s/ Xxxxx Xxxxxxx
in the presence of: ) -----------------
/s/ Xxxxx Xxxxxxx
-----------------
SIGNED by )
for and on behalf of )
NOVA CORPORATION ) /s/ Xxxxxx Xxxxxxxxxxx
in the presence of: ) ----------------------
/s/ Xxxxxx Xxxxxxx
------------------
SIGNED by )
for and on behalf of )
EUROCONEX TECHNOLOGIES LIMITED ) /s/ X. X. Xxxxxxxxxx
in the presence of: ) --------------------
/s/ Xxxx Xxxxxxxx
-----------------
61
"SCHEDULES INTENTIONALLY OMITTED"
