STANDSTILL AGREEMENT dated as of September 19, 2008 between eTelecare Global Solutions, Inc. and Newbridge International Investment Ltd.
EXHIBIT
10.2
dated as of September 19, 2008
between
and
Newbridge International Investment Ltd.
This Standstill Agreement (this “Agreement”) is made and entered into as of September 19,
2008 between eTelecare Global Solutions, Inc., a Phillipines corporation (the “Company”) and
Newbridge International Investment Ltd., a British Virgin Islands company (the “Shareholder”). The
Company and the Shareholder shall be referred to herein as the “Parties.”
WITNESSETH
WHEREAS, the Shareholder has previously filed a Schedule 13D, as amended, under the United
States Securities Exchange Act of 1934, as amended (the “Exchange Act”), with the United States
Securities and Exchange Commission (“SEC”) indicating the Shareholder’s Beneficial Ownership of
6,392,550 shares of Company Common Stock and American Depositary Shares (such securities being
collectively referred to herein as the “Existing Securities”), representing approximately 21.58% of
the total outstanding Voting Securities (as defined below) as of the date hereof;
WHEREAS, concurrently with the execution of this Agreement, the Company and EGS Acquisition Co
LLC, a Delaware limited liability company (“Purchaser”), are entering into an Acquisition Agreement
of even date herewith which provides for the offer by the Purchaser to purchase any and all of the
Company’s outstanding Voting Securities (the “Offer”) which Offer is supported by the Shareholder;
and
WHEREAS, the Shareholder has, or will have, a direct or indirect interest in the Purchaser.
NOW, THEREFORE, in consideration of the mutual agreements and understandings set forth herein
and as an inducement to the Company to enter into the Acquisition Agreement, the Parties hereto
hereby agree as follows:
ARTICLE I
DEFINITIONS
DEFINITIONS
1.1. Defined Terms. (a) As used in this Agreement, the following terms shall have
the following meanings:
“Affiliate” shall mean with respect to any Person, a Person that directly or indirectly
through one or more intermediaries, controls, is controlled by, or is under common control with
such Person or group of Persons.
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“Agreement” shall mean this Agreement as in effect on the date hereof and as hereafter from
time to time amended, modified or supplemented in accordance with the terms hereof.
“Beneficial Ownership” and “Beneficially Owns” shall have the meaning set forth in Rules 13d-3
and 13d-5 under the Exchange Act.
“Company Acquisition Transaction” shall mean (i) any merger, consolidation, business
combination, share exchange, reorganization, restructuring or similar transaction or series of
related transactions involving the Company or (ii) a tender offer or exchange offer for at least
50% of the outstanding Voting Securities.
“Governmental Authority” shall mean any United States (federal, state, local) or foreign court
or tribunal, or administrative, governmental or regulatory body, agency or authority.
“group” shall have the meaning set forth in Section 13(d)(3) of the Exchange Act and Rule
13d-5 promulgated thereunder.
“Other Directors” shall mean each member of the board of directors of the Company who is not a
nominee or employee of the Shareholder or an Affiliate of the Shareholder.
“Person” shall mean an individual, a corporation, a partnership, an association, a joint-stock
company, a trust, any unincorporated organization, or a government or political subdivision or an
agency or instrumentality thereof, including its Affiliates.
“Securities Act” shall mean the United States Securities Act of 1933, as amended.
“Voting Securities” shall mean any securities of the Company having the power to vote, in the
absence of contingencies, in the election of directors of the Company; provided that American
Depositary Shares and the shares of Common Stock representing such American Depositary Shares shall
not be double-counted for purposes of determining the number of Voting Securities.
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ARTICLE II
STANDSTILL PROVISIONS
STANDSTILL PROVISIONS
2.1. Standstill Provisions.
(a) In consideration of the execution by the Company of the Acquisition Agreement with the
Purchaser, the Shareholder agrees with the Company that prior to termination of the Acquisition
Agreement, the Shareholder will not (and
the Shareholder will cause its Affiliates not to) directly or indirectly in any way acquire or
agree to acquire Beneficial Ownership of any Voting Securities (other than the acquisition of
Voting Securities by the Purchaser in accordance with the Acquisition Agreement).
(b) If the Acquisition Agreement is terminated pursuant to Section 5.4(a)(ii) or 5.5(c)(ii)
thereof, then for a period of six months from the date of such termination, or, if the Acquisition
Agreement is terminated pursuant to Section 5.1, 5.2(a), 5.2(b), 5.2(c), 5.3(b), 5.4(a)(i), 5.4(b),
5.4(c)(i) or 5.4(d) thereof, then for a period of 18 months from the date of such termination, or,
if the Acquisition Agreement is terminated pursuant to Section 5.3(a), 5.3(c) or 5.3(d) thereof,
then for a period of three years from the date of such termination (in either case, the date of
such termination, the “Commencement Date” and such six-month period, 18-month period or 3-year
period, as the case may be, the “Standstill Period”), the Shareholder agrees with the Company that,
except as may be specifically permitted by this Agreement or unless specifically approved by
resolution of a majority of the Other Directors of the Company, the Shareholder will not (and the
Shareholder will cause its Affiliates not to), acting alone or in concert with others (i) directly
or indirectly in any way acquire or agree to acquire Beneficial Ownership of any Voting Securities
if such acquisition or agreement to acquire would result in the Shareholder and its Affiliates
Beneficially Owning more than thirty-two percent (32%) of the then outstanding Voting Securities
(the “Maximum Amount”) as measured on such date, (ii) publicly offer, seek or propose any Company
Acquisition Transaction, (iii) seek to nominate and elect more than two (2) directors out of seven
(7) directors to the Company’s board of directors or (iv) except as otherwise required by
applicable law, disclose publicly any intention, plan or arrangement inconsistent with the
foregoing. Notwithstanding the foregoing, during the Standstill Period, the Shareholder shall have
the right to request, and the Other Directors shall consider in good faith in light of the facts
and circumstances, a suspension of this Section 2.1(b) in the event that, and for so long as, any
Person or “group” other than Shareholder (A) acquires more than fifteen percent (15%) of the
outstanding Voting Securities, (B) publicly announces a bona fide tender or exchange offer by such
Person or group which would result, if consummated in accordance with its terms, in the Beneficial
Ownership by such Person or group of in excess of fifteen percent (15%) of the then outstanding
Voting Securities, whether or not such offer
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is approved by the Other Directors or (C) publicly
seeks or proposes to seek a Company Acquisition Transaction.
(c) Notwithstanding anything herein to the contrary, in the case of an 18-month Standstill
Period, during the six-month period, or, in the case of a 3-year Standstill Period, during the
two-year period (such 6-month period or 18-month period, as the case may be, the “Additional
Limitation Period”) following the expiration or termination of the Standstill Period, Shareholder
shall not (and Shareholder shall cause its Affiliates not to) acquire or agree to acquire
Beneficial
Ownership of any securities of the Company if such acquisition or agreement to acquire would
result in the Shareholder and its Affiliates collectively Beneficially Owning Voting Securities in
excess of the Maximum Amount, except as follows:
(i) In the event Shareholder or its Affiliates intends to acquire any Voting Securities of the
Company in excess of the Maximum Amount, Shareholder shall provide (and shall cause its Affiliates
to provide) written notice to the Company of such intent not less than 25 business days prior to
any such acquisition (the “Notice Period”). If prior to the end of the Notice Period, the Company
provides written notice (the “Company Notice”) to Shareholder or its Affiliates of the Company’s
intent to undertake a Company Acquisition Transaction, the Shareholder shall not (and Shareholder
shall cause its Affiliates not to) acquire any Voting Securities of the Company in excess of the
Maximum Amount for a period of six months after the receipt by the Shareholder or its Affiliates of
the Company Notice. Subject to any other legal restrictions, if the Company shall not have entered
into a definitive agreement related to a Company Acquisition Transaction at the end of such
six-month period, then the restrictions set forth in this Section 2.1(c) shall terminate and be of
no further force or effect. If the Company has entered into a definitive agreement related to a
Company Acquisition Transaction within such six-month period, then the provisions of Sections
2.1(e)(i) and 2.1(e)(ii) shall apply in full force and effect.
(ii) In the event the Company fails to provide the Shareholder with a Company Notice or
otherwise indicates in the Company Notice that it will not undertake a Company Acquisition
Transaction, then the Shareholder and its Affiliates shall be entitled to purchase Voting
Securities in excess of the Maximum Amount.
(d) It is expressly agreed that if, during the Standstill Period or at any time thereafter,
and for so long as the Shareholder Beneficially Owns not less than ten percent (10%) of the
outstanding Voting Securities, the board of directors of the Company authorizes the Company to
undertake a Company Acquisition Transaction (either through a public or private auction or other
similar sale process), then Shareholder and its Affiliates shall be permitted to participate in the
bidding process on the same terms and conditions as any other bidder. The board
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of directors of
the Company (or a committee thereof as may be constituted for such purpose) will in good faith and
in the proper discharge of its fiduciary duties consider and evaluate the bid of the Shareholder or
its Affiliates for the acquisition of the Company; provided that, nothing herein shall obligate the
Company to negotiate with or accept any bid or other proposal submitted by Shareholder or its
Affiliates.
(e) From the Commencement Date until the expiration of the Additional Limitation Period (or
the Standstill Period, in the case of a six-month Standstill Period), in the event that a majority
of the board of directors of the Company and the holders of a majority of the outstanding Voting
Securities of the
Company shall approve a Company Acquisition Transaction with a party other than the
Shareholder or any other transaction that requires at least two-thirds of the then outstanding
Voting Securities, then (i) Shareholder shall (and Shareholder shall cause its Affiliates to) vote
all Voting Securities held by it in excess of the Existing Securities in favor of such Company
Acquisition Transaction or any other transaction that requires at least two-thirds of the then
outstanding Voting Securities and grant to persons designated by the Other Directors a proxy, which
shall be irrevocable and coupled with an interest, to vote such excess as provided herein (it being
understood that Shareholder and its Affiliates will at all times be permitted to vote the Existing
Securities in its sole discretion in any manner it deems appropriate), and (ii) Shareholder shall
(and Shareholder shall cause its Affiliates to) sell or otherwise transfer all Voting Securities
then held by it and its Affiliates in excess of the Existing Amount to the winning bidder in any
such Company Acquisition Transaction on the same terms and conditions as all other Shareholders of
the Company and pursuant to the terms and conditions contained in any definitive agreement executed
by the Company in connection therewith. It is expressly understood that neither Shareholder nor
its Affiliates shall have any obligation to transfer any Voting Securities representing the
Existing Amount in connection with any Company Acquisition Transaction. Shareholder will (and
Shareholder shall cause its Affiliates to) take all reasonably necessary or desirable actions in
connection with the consummation of the Company Acquisition Transaction as requested by the Other
Directors including, without limitation, executing and delivering any documents, certificates or
other instruments required to be signed by any other Shareholder, and delivering such Shareholder’s
and its Affiliates’ stock certificates free and clear of any encumbrances; provided that any
indemnification obligations or other contractual liability of any stockholders incurred in
connection with the Company Acquisition Transaction shall be apportioned among all of the
stockholders of the Company in proportion to the amount of consideration received by each such
stockholder.
2.2. Recording Provisions. The Parties agree that the Company shall (i) advise its
stock transfer agent or other relevant agents (each a “Transfer Agent”)
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of the existence and
restrictions of this Agreement and (ii) authorize such Transfer Agent to notify the Parties of a
potential breach of this Agreement and refrain from recording any transfer of Voting Securities
that the Company advises would be in violation of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
3.1. Each Party hereto represents and warrants to the other as follows:
(a) Authorization. Such Party has the requisite power, authority and legal capacity
to execute, deliver and perform and to consummate the transactions contemplated by this Agreement.
This Agreement constitutes a legal, valid and
binding obligation of such Party, enforceable against such Party in accordance with its terms,
except as such enforcement may be limited by any applicable bankruptcy, insolvency, moratorium or
similar law affecting creditors’ rights generally.
(b) No Conflicts; Consents. No consent of any Governmental Authority or other person
is required to be obtained by such Party in connection with the execution and delivery by such
Party of this Agreement.
ARTICLE IV
MISCELLANEOUS
MISCELLANEOUS
4.1. Severability. If any term, provision, covenant or restriction of this Agreement
is determined to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and effect, unless such
action would substantially impair the benefits to either Party of the remaining provisions of this
Agreement.
4.2. Specific Enforcement. The Parties hereto acknowledge and agree that irreparable
damage would occur in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is accordingly agreed that the
Parties shall be entitled to an injunction or injunctions to prevent or cure breaches of the
provisions of this Agreement and to enforce specifically the terms and provisions of this Agreement
(without the necessity of posting any bond), this being in addition to any other remedy to which
they may be entitled by law or equity.
4.3. Further Assurances. The Shareholder shall use its reasonable best efforts to
cause its Affiliates to comply in all respects with the provisions of this Agreement applicable to
the Shareholder to the same extent as if such Affiliates were original parties hereto.
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4.4 Entire Agreement; Amendments. This Agreement contains the entire understanding
of the Parties with respect to the matters covered hereby and thereby. This Agreement may be
amended only by an agreement in writing executed by the Parties hereto. The Parties hereto may
amend this Agreement without notice to or the consent of any third party, including any Affiliate
of Shareholder.
4.5. Notices. Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be effective (a) when personally delivered or transmitted
by telecopier or other electronic means, such as electronic mail, on a business day during normal
business hours where such notice is to be received at the address or number designated below or (b)
on the business day that is three (3) days following the date of mailing by courier, fully prepaid,
addressed
to such address, whichever shall first occur. The addresses for such communications shall be:
| If to the Company: | eTelecare Global Solutions, Inc. | |||
| 0000 Xxxx Xxxxxxxx, Xxxxx 000 | ||||
| Xxxxxxxxxx, XX 00000 | ||||
| Telecopier: (000) 000-0000 | ||||
| Email: xxxx.xxxxxx@xxxxxxxxx.xxx | ||||
| Attention: J. Xxxxxxx Xxxxxx | ||||
| With a copy to: | Pillsbury Xxxxxxxx Xxxx Xxxxxxx LLP | |||
| 0000 Xxxxxxx Xxxxxx | ||||
| Xxxx Xxxx, XX 00000 | ||||
| Telecopier: (000) 000-0000 | ||||
| Email: xxxxx@xxxxxxxxxxxx.xxx | ||||
| Attention: Xxxxx del Xxxxx | ||||
| If to the Shareholder: | Newbridge International Investment Ltd. | |||
| c/x Xxxxx Corporation | ||||
| 00/X Xxxxx Xxx Xxxxxxxx Xxxxx, Xxxxx Xxxxxx | ||||
| Xxxxxx Xxxx, Xxxxx Xxxxxx, Xxxxxxxxxxx 1226 | ||||
| Telecopier: (000) 0000000 | ||||
| Email: xxxxxxxxx.xx@xxxxx.xxx.xx | ||||
| Attention: Xxxxxxx X. Xxxxxxxxx | ||||
| With a copy to: | Xxxxx Xxxx & Xxxxxxxx | |||
| 000 Xxxxxxxxx Xxxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
| Telecopier: (000) 000-0000 | ||||
| Email: xxxx.xxxxxx@xxx.xxx | ||||
| Attention: Xxxx Xxxxxx |
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Any Party hereto may from time to time change its address for notices under this Section 4.5 by
giving at least 10 days’ notice of such changed address to the other Party hereto.
4.6. Waivers. No waiver by either Party of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in
the future thereof or a waiver of any other provision, condition or requirement of this Agreement;
nor shall any delay or omission of either Party to exercise any right hereunder in any manner
impair the exercise of any such right accruing to it thereafter.
4.7. Headings. The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect any of the provisions of this
Agreement.
4.8. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the Parties and their successors and legal representatives. No Party shall assign this
Agreement or any rights hereunder without the prior written consent of the other Party (which
consent may be withheld for any reason in the sole discretion of the Party from whom consent is
sought).
4.9. No Third Party Beneficiaries. This Agreement is intended for the benefit of the
Parties hereto and their respective permitted successors and assigns and is not for the benefit of,
nor may any provision of this Agreement be enforced by, any other person.
4.10. Governing Law; Venue. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without regard to the principles of
conflicts of laws. The parties hereby irrevocably submit to the jurisdiction of the courts of the
State of Delaware and the federal courts of the United States of America located in the State of
Delaware in respect of the interpretation and enforcement of the provisions of this Agreement.
4.11. Counterparts. This Agreement may be executed in separate counterparts
(including by facsimile), each of which when so executed and delivered shall be deemed an original,
but both such counterparts shall together constitute one and the same instrument.
[Remainder of this page is intentionally blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the date hereof.
| eTelecare Global Solutions, Inc. |
||||
| By: | /s/ Xxxx X. Xxxxxx | |||
| Name: | Xxxx X. Xxxxxx | |||
| Title: | President and Chief Executive Officer | |||
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| NEWBRIDGE INTERNATIONAL INVESTMENTS LTD. |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxxxx | |||
| Title: | Authorized Signatory | |||
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