20 January 2003
(1) HERTAL ACQUISITIONS PLC
(2) XXXXXXX XXXXXXXX
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UNDERWRITING AGREEMENT
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XXXXXXXX XXXXXX XXXXXXXX
00 Xxxxxxx Xxxxxx
Xxxxxx 0
Xxxxxxx
TEL + 000 0 000 0000
FAX + 000 0 000 0000
CONTENTS
Page No
1 Interpretation...........................................................1
2 Loan.....................................................................4
3 Subscription for Hertal Shares...........................................5
4 Waivers..................................................................6
5 Pre-Conditions...........................................................6
6 Board Meeting............................................................6
7 Completion...............................................................6
8 Commission...............................................................7
9 Miscellaneous Provisions.................................................7
AGREED FORM DOCUMENT "A"...................................................10
Press Announcement................................................10
THIS AGREEMENT is made on . 20th January 2003
BETWEEN
(1) HERTAL ACQUISITIONS PLC a company incorporated under the laws of Ireland
(registration number 364049) having its registered office at 00 Xxxxxxx
Xxxxxx, Xxxxxx 0 (hereinafter called the "Company"); and
(2) XX XXXXXXX XXXXXXXX of Xxxxxxxx Lodge, Kilsallaghan, Co Dublin (the
"Individual" which expression shall include his personal representatives
and permitted assigns).
WHEREAS:
A. The Company is a public limited company incorporated in Ireland under the
Companies Acts 1963 to 2001.
B. The Company is proposing to make the Offer.
C. The Offer will substantially reflect the terms and conditions set out in
the Press Announcement to be issued immediately prior to the execution of
this Agreement.
D. The Individual has agreed with the Company to underwrite the Partial Share
Alternative so that in the event that Riverdeep Shareholders or holders of
Riverdeep ADSs do not elect to accept the Partial Share Alternative and,
accordingly, all of the Hertal Shares available for subscription pursuant
to the Partial Share Alternative are not subscribed for, the Individual
will subscribe at the Offer Price for such Hertal Shares not subscribed for
on the Second Completion Date.
E. The Company may require the Individual's Subscription Monies on the First
Completion Date. However, it will not be possible to determine the number
of Hertal Shares for which the Individual may be obliged to subscribe at
the First Completion Date as further Hertal Shares may be issued to
Riverdeep Shareholders after that date as a result of elections made
pursuant to Section 204(10) of the Act. For that reason the Individual
will, if applicable, provide a loan to the Company on the First Completion
Date of an amount calculated on the basis as if the Individual were obliged
to subscribe for Hertal Shares on the First Completion Date as opposed to
on the Second Completion Date and without taking account of subsequent
elections for the Partial Share Alternative pursuant to Section 204(10) of
the Act. This loan shall be applied on the Second Completion Date to the
extent required to discharge the Individual's obligations to provide the
Individual's Subscription Monies and any amount not so required shall be
repaid to the Individual.
F. The parties have agreed to enter into this Agreement for the purposes of
providing for the said subscriptions and loan arrangements.
NOW IT IS HEREBY AGREED as follows:
1 INTERPRETATION
1.1 Definitions
In this Agreement and in the recitals hereto, unless the context otherwise
requires or unless otherwise specified:
"Act" means the Companies Act, 1963 as amended;
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the "Board" means the board of directors of the Company as constituted from
time to time;
"Business Day" means a day (other than a Saturday or Sunday) on which
clearing banks are normally open for business in both Dublin and New York;
"Cash Offer" means the recommended cash offer for the entire issued, and to
be issued, share capital of Riverdeep (other than that beneficially owned
by the Company on the date of despatch of the Offer Document) subject to
the conditions set out in the Press Announcement and to be set out in the
Offer Document and accompanying acceptance documents;
"Completion" means completion pursuant to clause 7;
"Compulsory Acquisition Procedure" the procedure or application to be
implemented pursuant to Section 204 of the Act to compulsorily acquire
Riverdeep Shares held by persons who have not otherwise accepted the Offer;
"Encumbrance" means any mortgage, charge, pledge, lien, option,
restriction, right of first refusal, right of pre-emption, third party
right or interest, any other encumbrance or security interest of any kind
and any other type of preferential arrangement (including, without
limitation, title, transfer and retention arrangements) having similar
effect;
"First Acceptances Notification" means the notice to be sent by the Company
to the Individual on the First Notification Date, detailing (i) the number
of Riverdeep Shares in respect of which valid acceptances of the Offer have
been received by the Company on the last Business Day immediately prior to
the First Notification Date; (ii) the First Acceptance Shares; and (iii)
the amount of the Individual's Loan;
"First Acceptance Shares" means the total number of Riverdeep Shares in
respect of which valid elections to accept Hertal Shares pursuant to the
Partial Share Alternative have been received on the First Notification Date
(and which were not, where permitted, withdrawn);
"First Completion Date" means the date that is 4 Business Days after
receipt by the Individual of the First Acceptances Notification;
"First Notification Date" has the meaning set out in clause 2.1;
"Hertal Shares" means ordinary shares of US$0.01 each in the capital of the
Company and "Hertal Share" means any one of them;
"Individual's Loan" means the loan facility to be given by the Individual
to the Company, if applicable, on the First Completion Date, in the amount
calculated in accordance with clause 2.3 which loan shall be applied on the
Second Completion Date to the extent required to discharge the Individual's
obligation to provide the Individual's Subscription Monies for the
Individual's Subscription Shares, if any, and any amount not so required
shall be repaid by the Company to the Individual in accordance with clause
3.4;
"Individual's Subscription Monies" means that portion, if any, of the
Individual's Loan to be applied in the subscription for the Individual's
Subscription Shares, being an amount calculated in accordance with clause
3.2.1;
"Individual's Subscription Shares" means the Hertal Shares to be subscribed
for by the Individual, if any, as calculated in accordance with clause 3.2;
"Offer" means the Cash Offer and the Partial Share Alternative;
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"Offer Document" means the formal document which will be despatched to
Riverdeep Shareholders and holders of Riverdeep ADSs and, for information
only, to holders of options over Riverdeep Shares, detailing the terms and
conditions of the Offer;
"Offer Price" means US$1.51 for each Riverdeep Share;
"Panel" means the Irish Takeover Panel established under the Irish Takeover
Panel Act, 1997;
"Partial Share Alternative" means the alternative to the Cash Offer under
which Riverdeep Shareholders and holders of Riverdeep ADSs who accept the
Offer will be able to receive in aggregate 1 Hertal Share for every
Riverdeep Share held by them and 6 Hertal Shares for every Riverdeep ADS
held by them as an alternative to all or part of their entitlement to cash
under the Cash Offer, subject to the terms of the Offer whereby elections
for the Partial Share Alternative may be scaled down;
"Press Announcement" means the press announcement in the agreed form marked
"A";
"Riverdeep" means Riverdeep Group Plc;
"Riverdeep ADSs" means American Depositary Shares issued in respect of
Riverdeep Shares, each representing six Riverdeep Shares, and each a
"Riverdeep ADS";
"Riverdeep Shareholders" means the holders of Riverdeep Shares;
"Riverdeep Shares" means ordinary shares in the capital of Riverdeep and
"Riverdeep Share" means any one of them, and for the avoidance of doubt for
the purposes of this definition, a Riverdeep ADS shall be deemed to be the
equivalent of six Riverdeep Shares;
"Second Acceptances Notification" means the notice to be sent by the
Company to the Individual on the Second Notification Date detailing the
Second Acceptance Shares;
"Second Acceptance Shares" means the total number of Riverdeep Shares in
respect of which valid elections for Hertal Shares have been received under
the Partial Share Alternative by the Second Notification Date and the total
number of Riverdeep Shares in respect of which valid elections for Hertal
Shares are received pursuant to any Compulsory Acquisition Procedure, in
each case as specified in the Second Acceptances Notification (and which
were not, where permitted, withdrawn);
"Second Completion Date" means the date which is the later of (i) one month
after service of notice by the Company on Riverdeep Shareholders pursuant
to a Compulsory Acquisition Procedure; or (ii) if a person makes an
application pursuant to Section 204(1) of the Act the date on which a court
orders that the Company is or is not entitled to purchase the relevant
Riverdeep Shares pursuant to a Compulsory Acquisition Procedure;
"Second Notification Date" shall have the meaning set out in clause 3.1;
"Senior Credit Agreement" means the agreement dated on or about the date of
this Agreement and entered into by the Company, Barclays Leveraged Finance
and The Royal Bank of Scotland Plc, Barclays Bank Plc and the financial
institutions listed in Schedule 1 of that agreement pursuant to which the
Company is granted certain credit facilities;
"Underwritten Riverdeep Shares" means 21,500,000 Riverdeep Shares;
"US$" means US dollars, the lawful currency for the time being of the
United States of America.
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1.2 Interpretation Generally
In this Agreement, unless the context otherwise requires or unless
otherwise specified:-
1.2.1 any reference to any statute, statutory provision or to any order
or regulation shall be construed as a reference to that statute,
provision, order or regulation extended, modified, amended,
replaced or re-enacted from time to time (whether before or after
the date of this Agreement) and all statutory instruments,
regulations and orders from time to time made thereunder or
deriving validity therefrom (whether before or after the date of
this Agreement);
1.2.2 words denoting any gender include all genders and words denoting
the singular include the plural and vice versa;
1.2.3 all references to recitals, sections, clauses, paragraphs,
schedules and annexures are to recitals in, sections, clauses and
paragraphs of and schedules and annexures to this Agreement;
1.2.4 headings are for convenience only and shall not affect the
interpretation of this Agreement;
1.2.5 words such as "hereunder", "hereto", "hereof" and "herein" and
other words commencing with "here" shall unless the context
clearly indicates to the contrary refer to the whole of this
Agreement and not to any particular section, clause or paragraph
hereof;
1.2.6 any reference to "Agreement" or any other document or to any
specified provision of this Agreement or any other document is to
this Agreement, that document or that provision as in force for
the time being and as amended from time to time in accordance
with the terms of this Agreement or that document;
1.2.7 any reference to a person includes his xxxxxxxxxx, xxxxx,
xxxxxxx, personal representatives and permitted assigns;
1.2.8 "writing" or any similar expression includes transmission by
facsimile;
1.2.9 if any action or duty to be taken or performed under any of the
provisions of this Agreement would fall to be taken or performed
on a day which is not a Business Day such action or duty shall be
taken or performed on the Business Day next following such day;
1.2.10 a document in the "agreed form" is a reference to a document in
the form approved and for the purposes of identification signed
by or on behalf of the Company and the Individual.
2 LOAN
2.1 First Acceptances Notification
Within two (2) Business Days of the date on which the Offer becomes or is
declared unconditional in all respects (the "First Notification Date"), the
Company shall send the First Acceptances Notification to the Individual.
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2.2 Individual's Loan
On the terms and subject to the conditions of this Agreement and in
particular clause 2.4, at the First Completion Date, the Individual shall
provide cleared funds in respect of the entire amount of the Individual's
Loan by telegraphic transfer, for same day value, to such bank account as
the Company may nominate in the First Acceptances Notification.
2.3 Calculation of Loan
The amount of the Individual's Loan, if any, shall be Z where
Z = (RS - C) x OP
where: RS = the total number of Underwritten Riverdeep Shares;
OP = Offer Price;
C = the First Acceptance Shares as specified in the First
Acceptances Notification.
2.4 Terms of the Individual's Loan
The Individual's Loan shall be unsecured, interest free and repayable in
accordance with clause 3.4 hereof and shall, if appropriate be discharged
in payment up of the Individual's Subscription Monies in accordance with
clause 3.3 hereof.
3 SUBSCRIPTION FOR HERTAL SHARES
3.1 Notification
Two Business Days prior to the Second Completion Date (the "Second
Notification Date"), the Company shall send the Second Acceptances
Notification to the Individual.
3.2 Allotment of Shares
On the terms and subject to the conditions of this Agreement, on the Second
Completion Date, the Individual shall be deemed to have made application to
the Company for and the Company shall allot and issue to the Individual the
Individual's Subscription Shares against receipt of the Individual's
Subscription Monies which shall be applied in accordance with clause 3.3.
3.2.1 The amount of the Individual's Subscription Monies shall be X,
where:
X = (RS - C) x OP
rounded up to the nearest whole number
where: RS = the total number of Underwritten Riverdeep Shares;
OP = Offer Price;
C = the Second Acceptance Shares as specified in the
Second Acceptances Notification.
3.2.2 The number of Individual's Subscription Shares shall be equal to
RS - C, calculated in accordance with clause 3.2.1 above and
rounded up to the nearest whole number.
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3.3 Subscription Monies
The Company shall apply that part of the Individual's Loan as is equivalent
to the Individual's Subscription Monies in discharge of the obligation (if
any) of the Individual to pay the Individual's Subscription Monies.
3.4 Repayment of the Individual's Loan
The Company shall repay to the Individual on the Second Completion Date, an
amount equal to the difference between the Individual's Loan and the
Individual's Subscription Monies.
4 WAIVERS
4.1 Waiver of Pre-Emption Rights
The Company shall procure the waiver of any pre-emption rights which may
exist in respect of the issue of the Individual's Subscription Shares to
the Individual whether such rights be under the current articles of
association of the Company or otherwise.
5 PRE-CONDITIONS
Notwithstanding any other provision of this Agreement, the obligations of
the Individual hereunder and Completion are conditional upon the following
matters having occurred:
5.1 the Press Announcement having been delivered to the Irish Stock
Exchange and the Panel;
5.2 the Offer having been made by the Company to Riverdeep Shareholders at
the Offer Price; and
5.3 the Offer having become or having been declared unconditional in all
respects.
The Individual covenants with the Company to use his reasonable endeavours
to procure (insofar as it is within his power so to do) that the conditions
set out in the above are satisfied.
6 BOARD MEETING
The Company shall procure that on the date of this Agreement a meeting of
the Board shall be held at which the entering into and execution of this
Agreement by the Company is approved and authorised.
7 COMPLETION
7.1 If applicable, Completion of the subscription for the Individual's
Subscription Shares shall take place at the offices of Xxxxxxxx Xxxxxx
Xxxxxxxx, Dublin on the Second Completion Date whereupon the Individual
shall, if applicable, be deemed to have made application to the Company for
the Individual's Subscription Shares and the Company shall, if applicable,
procure that a meeting of the Board shall be held at which:
7.1.1 the application for the Individual's Subscription Shares is
accepted and the Individual's Subscription Shares shall be
allotted and issued to the Individual free from all Encumbrances
and registered in the Individual's name credited as fully paid on
receipt of the Individual's Subscription Monies; and
7.1.2 duly sealed share certificates shall be issued and delivered to
the Individual in respect of the Individual's Subscription
Shares.
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8 COMMISSION
In consideration of the Individual entering into this Agreement, the
Company shall on the first Drawdown Date (as such term is defined in the
Senior Credit Agreement) pay to the Individual (together with VAT where
applicable) a commission of US$486,975, save that in the event that a
Default (as that term is defined and used in the Senior Credit Agreement)
occurred and is continuing on such date the payment of the said commission
shall be deferred until the date that such Default has been cured or
ceased.
9 MISCELLANEOUS PROVISIONS
9.1 Survival of Obligations
The provisions of this Agreement which shall not have been performed on
Completion shall remain in full force and effect notwithstanding
Completion.
9.2 Binding on successors
This Agreement shall be binding upon and enure to the benefit of the
respective parties and their respective personal xxxxxxxxxxxxxxx, xxxxx,
xxxxxxx, successors and permitted assigns.
9.3 Waiver, release and remedies
9.3.1 A waiver by any party of any breach by any party hereto of any of
the terms, provisions or conditions of this Agreement or the
acquiescence of any party in any act (whether commission or
omission) which but for such acquiescence would be a breach as
aforesaid shall not constitute a general waiver of such term,
provision or condition or an acquiescence to any subsequent act
contrary thereto.
9.3.2 Any remedy or right conferred upon any party for breach of this
Agreement shall be in addition to and without prejudice to all
other rights and remedies available to that party whether
pursuant to this Agreement or provided for by law.
9.3.3 No failure or delay by any party in exercising any claim, remedy,
right, power or privilege under this Agreement shall operate as a
waiver nor shall a single or partial exercise of any claim,
remedy, right, power or privilege preclude any further exercise
thereof or exercise of any other claim, right, power or
privilege.
9.3.4 Any liability of any party hereto to a party under the provisions
of this Agreement may in whole or in part be released, varied,
postponed, compounded or compromised by that party in its
absolute discretion as regards such party without in any way
prejudicing or affecting its rights against any other party
hereto under the same or a like liability whether joint and
several or otherwise. Should any provision of this Agreement
transpire not to be enforceable against any of the parties
hereto, such non-enforceability shall not render such provision
unenforceable against any other party hereto.
9.4 Counterparts
This Agreement may be executed in any number of counterparts and by the
different parties to this Agreement on separate counterparts each of which
when executed and delivered shall constitute an original and all such
counterparts together constituting but one and the same instrument.
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9.5 No Partnership
This Agreement shall not be deemed to create any partnership between the
parties in relation to the Company or otherwise.
9.6 Notices
Any notice or other communication to any party hereto which is required or
permitted to be given under or in connection with this Agreement shall be
in writing and shall (at the option of the party giving the notice) be:
(a) delivered by hand;
(b) sent by facsimile; or
(c) sent by prepaid post
to the address or facsimile number set out below, or to such other address
or facsimile number as is from time to time notified to the party giving
the notice in compliance with the provisions of this clause 9.6:-
The Company
Address: the registered office of the Company from time to time,
being, at the date of this Agreement, 00 Xxxxxxx Xxxxxx,
Xxxxxx 0
for the urgent attention of Xxxxx X'Xxxxxxxxx
The Individual
Address: C/O Ms Xxxxxxxx Xxxxxxxx
Binchys Solicitors
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxx 0
Facsimile: 662 3328 FAO: Ms Xxxxxxxx Xxxxxxxx
9.7 Notice Deemed to be Served
Any notice or communication referred to in clause 9.6 shall be deemed to
have been served:-
(a) if delivered by hand, on delivery;
(b) if sent by facsimile, when the sender's facsimile machine issues
confirmation that the relevant pages have been transmitted to the
recipient's facsimile machine; and
(c) if sent by prepaid post, 48 (forty-eight) hours after posting.
9.8 Confirmation of Notice
Each person giving a notice or making a communication hereunder by
facsimile shall promptly confirm such notice or communication by post to
the person to whom such notice or communication was addressed but the
absence of any such confirmation shall not affect the validity of any such
notice or communication or the time upon which it is deemed to have been
served.
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9.9 Variation
No variation of this Agreement shall be valid unless it is in writing and
signed by or on behalf of each of the parties hereto.
9.10 Announcement
No announcement or disclosure regarding all or any part of the transactions
contemplated by this Agreement shall be made by any of the parties hereto
without the prior written approval of the other parties save for any such
announcement as is required to be made under any applicable law or
regulatory requirement.
9.11 Severability
Each of the provisions of this Agreement are separate and severable and
enforceable accordingly and if at any time any provision is adjudged by any
court or regulatory authority or agency of competent jurisdiction to be
void or unenforceable in whole or in part the validity, legality and
enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby.
9.12 Whole Agreement
Save as otherwise provided in this Agreement, this Agreement and the
agreements referred to herein contain the whole agreement between the
parties relating only to the underwriting of the Partial Share Alternative
above and supersede all previous agreements (if any) between the parties in
respect of such matters and each of the parties to this Agreement
acknowledges that in agreeing to enter into this Agreement it has not
relied on any representations or warranties except for those contained in
this Agreement.
9.13 Governing law and jurisdiction
This Agreement shall be governed by and construed in accordance with the
laws of Ireland. Each of the parties hereto hereby agrees that the courts
of Ireland shall have jurisdiction to hear and determine any suit, action
or proceedings that may arise out of or in connection with this Agreement
and for such purposes irrevocably submits to the jurisdiction of such
courts.
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AGREED FORM DOCUMENT "A"
Press Announcement
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IN WITNESS whereof these presents have been entered into the day and year first
herein written.
PRESENT when the Common Seal
of HERTAL ACQUISITIONS PLC
was affixed hereto:
/s/Xxxxxxx Xxxxxxxx
------------------------------- --------------------------------
Director
-------------------------------
/s/Xxxxx XxXxxxxx
------------------------------- --------------------------------
Director/Secretary
SIGNED SEALED AND DELIVERED
by XXXXXXX XXXXXXXX /s/Xxxxxxx XxXxxxxx
in the presence of:-
/s/Xxxxxxxx Xxxxxxxx
Xxxxxx 0
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