EXECUTION VERSION
CONTRIBUTION IN KIND AGREEMENT
among
AXALTO HOLDING N.V.
and
TPG GIANT, LLC
And
TPG PARTNERS, III, L.P.
and
T3 PARTNERS, L.P.
DECEMBER 6, 2005
CONTRIBUTION IN KIND AGREEMENT
This agreement (the "AGREEMENT") is made and entered into as of December 6,
2005, among:
1. TPG GIANT, LLC, TPG PARTNERS III, L.P. and T3 PARTNERS, L.P., jointly and
severally among them ("TPG");
AND
2. AXALTO HOLDING N.V. ("AXALTO").
RECITALS
A. Axalto, whose shares are listed on the French Eurolist of Euronext Paris
S.A., operates directly and through its subsidiaries in the business of
microprocessor cards products and applications.
B. Gemplus International S.A., a corporation organized under the laws of the
Grand Duchy of Luxembourg, whose registered office is located 00X, Xxxxxx
X.X. Xxxxxxx X-0000, Xxxxxxxxxx, Grand Duchy of Luxembourg ("GEMPLUS") and
whose shares are listed on the French Eurolist of Euronext Paris S.A. and
the NASDAQ National Market system through an American depositary shares
Facility, also operates directly and through its subsidiaries in the
business of microprocessor cards products and applications.
C. TPG owns a total of 159,305,600 shares of outstanding Gemplus Common Stock,
held as follows: 76,074,300 by TPG Giant, LLC; 59,350,150 by TPG Partners
III, L.P.; and 23,881,150 by T3 Partners, L.P. (the "TPG SHARES")
representing at the date of execution of this Agreement 25.32% of the share
capital and 25.38% of the voting rights of Gemplus.
D. The Boards of Directors of each of Axalto N.V. and Gemplus have determined
that it is in the best corporate interests of Axalto and Gemplus to effect
the combination of their respective businesses as set forth under the terms
of a Combination Agreement entered into between Axalto, Gemplus, TPG, Xxx.
Xxxxxxx Xxxxxx, Xx. Xxxxxx Xxxxxx, Acton 1 Beteiligungs GmbH, Acton 2
Beteiligungs GmbH and Acton 3 Beteiligungs GmbH, on or around the date of
this agreement (the "COMBINATION AGREEMENT") in a "merger of equals".
E. Pursuant to and in accordance with the terms and conditions of the
Combination Agreement, TPG has agreed to contribute the TPG Shares to
Axalto and Axalto has agreed to allot and issue to TPG 12,744,448 newly
issued shares of Axalto Common Stock (the "TPG CONTRIBUTION IN KIND").
IN CONSIDERATION OF THE FOREGOING, IT IS AGREED AS FOLLOWS
ARTICLE I
DEFINITIONS; INTERPRETATION
1.1 Unless otherwise defined herein, words and expressions defined in the
Combination Agreement shall bear the same meaning when used in this Agreement.
ARTICLE II
TPG CONTRIBUTION IN KIND
2.1 Upon and subject to the terms and conditions of this Agreement and the
Combination Agreement, TPG hereby agrees, in consideration of the allotment and
issue by Axalto to TPG of 12,744,448 newly issued shares of Axalto Common Stock
ranking pari passu with all other shares of Axalto Common Stock to contribute on
the date of Closing of the Contribution in Kind (as defined in Section 2.5 of
the Combination Agreement) the TPG Shares to Axalto free and clear of all
Encumbrances together with all rights and advantages (other than any rights,
title, interest or advantages in, to or in respect of the Gemplus Distribution)
which are at the date of this Agreement attached to the TPG Shares.
2.2 The TPG Contribution in Kind described in Section 2.1 above shall be
implemented pursuant to and in accordance with the terms and subject to the
conditions of the Combination Agreement.
2.3 TPG agrees that it shall not sell, transfer, pledge, lease, dispose of or
encumber the TPG Shares in any manner, or agree or otherwise commit to do any of
the foregoing, other than pursuant to the TPG Contribution in Kind and the
Combination Agreement.
2.4 Completion of the transactions described in this Agreement shall take place
in accordance with Section 2.5 of the Combination Agreement.
2.5 For the avoidance of doubt, it is hereby specified that the TPG Shares
contributed to Axalto in the TPG Contribution in Kind will be transferred with
any and all rights and benefits attached thereto, including all shares issued or
property distributed and/or that may be so issued or distributed by Gemplus
following the date of the Transfer Instruction and to which the TPG Shares give
right, without any effect on the consideration set forth in Section 2.1 above;
provided, however, that Axalto shall not be entitled to any portion of the
amount of the Gemplus Distribution to be made by Gemplus to the holders of
Gemplus Shares pursuant to the terms of the Combination Agreement paid with
respect to the TPG Shares.
2.6 TPG and Axalto undertake to notify to Gemplus or cause to be notified to
Gemplus pursuant to the Combination Agreement the transfer of the TPG Shares to
Axalto by way of the TPG Contribution in Kind under this Agreement for the
purpose of article 40 of the Luxembourg law on commercial companies of August
10, 1915, as amended, and article 1690 of the Luxembourg Civil Code. In
addition, TPG and Axalto undertake, for the purpose of the Luxembourg Law of
December 4, 1992 on major holdings (the "LUXEMBOURG LAW ON MAJOR HOLDINGS"), to
notify at the same time Gemplus and the Luxembourg Commission de Surveillance du
Secteur Financier within seven calendar days following the Closing of the
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Contribution in Kind, of the transfer of the TPG Shares to Axalto by way of the
TPG Contribution in Kind (the "MAJOR HOLDING TRANSFER NOTIFICATION"), and for
such a purpose TPG and Axalto hereby jointly instruct and authorize any lawyer
of Loyens Xxxxxxx to proceed on their behalf with such a notification.
TPG and Axalto acknowledge that Gemplus must take any action as may be necessary
to have the transfer of the TPG Shares to Axalto by way of the TPG Contribution
in Kind made of public knowledge in France in accordance with the relevant
provisions of French law, as soon as possible following receipt by Gemplus of
the Major Holding Notification and in any event no later than nine working days
after such receipt.
2.7 This Agreement and its terms are intended by the parties hereto to be in
addition to, and so shall not limit or otherwise affect the validity of, the
provisions of the Combination Agreement, and, for the avoidance of doubt, all
applicable provisions of the Combination Agreement shall apply to the TPG
Contribution in Kind as though stated herein. In the event of any conflict
between the terms of the this Agreement and the Combination Agreement, the terms
of the Combination Agreement shall prevail.
ARTICLE III
TERMINATION
3.1 In the event that:
(a) the Combination Agreement is terminated and becomes null and void in
accordance with its terms; or
(b) the conditions set forth in the Combination Agreement to the Completion
of the TPG Contribution in Kind are not satisfied by the time specified therein,
this Agreement shall automatically terminate and become wholly null and void and
have no effect, with no liability on the part of any Party, but without
prejudice to any rights or liabilities any Party may have against any other
Party for breach of the Combination Agreement.
ARTICLE IV
MISCELLANEOUS
4.1 Representations of TPG
TPG represents to Axalto that:
(a) It is acquiring the shares of Axalto Common Stock ("AXALTO SHARES")
pursuant to the TPG Contribution in Kind for its own account for investment and
not with a view towards the resale, transfer or distribution thereof, nor with
any present intention of distributing the Axalto Shares.
(b) It is an "accredited investor" as that term is defined in Regulation D
promulgated under the United States Securities Act of 1933, as amended (the
"SECURITIES ACT") and has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of its
investment in the Axalto Shares as contemplated by this Agreement and
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the Combination Agreement, and is able to bear the economic risk of such
investment for an indefinite period of time.
(c) It understands that the newly issued Axalto Shares (i) have not been
and will not upon issuance be registered under the Securities Act and are
"restricted securities" within the meaning of Rule 144 under the Securities Act
and (ii) cannot be sold, transferred or otherwise disposed of unless they are
subsequently registered under the Securities Act or an exemption from
registration is then available, including for transfers outside the United
States. It agrees that it will not offer to sell Axalto Shares other than in
accordance with the foregoing and no such transfer shall be made that could be
integrated with the Offer for purposes of the Securities Act.
4.2 Governing Law
This Agreement is governed by and shall be construed in accordance with the laws
of The Netherlands.
4.3 Jurisdiction
Any and all disputes arising out of or in connection with this Agreement shall
be finally settled under the then-prevailing Rules of Arbitration of the
International Chamber of Commerce by three arbitrators appointed in accordance
with the Rules. The venue of the arbitration shall be Geneva (Switzerland) and
the language shall be English. The arbitrators shall not act in amiable
composition.
4.4 Further Actions
Each party to this Agreement shall from time to time do and perform such other
and further acts and execute and deliver any and all such further instruments,
as may be necessary, proper or required by law to consummate and make effective
the transactions contemplated by this Agreement.
IN WITNESS WHEREOF, this Agreement has been signed in Amsterdam, The
Netherlands, by or on behalf of each of the parties as of the day first above
written in four (4) original copies.
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TPG PARTNERS III, L.P.
By: TPG GenPar III, L.P.,
its General Partner
By: TPG Advisors III, Inc.,
its General Partner
By: /s/ Xxxxxxxx Xxxx
---------------------------------
Name: Xxxxxxxx Xxxx
Title: Attorney-in-fact
T3 PARTNERS, L.P.
By: T3 GenPar, L.P.,
its General Partner
By: T3 Advisors, Inc.,
its General Partner
By: /s/ Xxxxxxxx Xxxx
---------------------------------
Name: Xxxxxxxx Xxxx
Title: Attorney-in-fact
TPG GIANT, LLC
By: TPG Parallel III, L.P.,
its Manager
By: TPG GenPar III, L.P.,
its General Partner
By: TPG Advisors III, Inc.,
its General Partner
By: /s/ Xxxxxxxx Xxxx
---------------------------------
Name: Xxxxxxxx Xxxx
Title: Attorney-in-fact
AXALTO HOLDING N.V.
By: /s/ Olivier Piou
---------------------------------
Name: Olivier Piou
Title: Chief Executive Officer
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