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Exhibit 4.(a)(xiv)
DATED 12TH APRIL 2001
RED-M (COMMUNICATIONs) LIMITED (1)
- and -
M XXXXXX AND OTHERS (2)
- and -
XXXXX NETWORKS NV (3)
- and -
THE APAX FUNDS (4)
- and -
THE AMADEUS FUNDS (5)
INVESTMENT AGREEMENT
XXXXXXXX XXXXXX XXXXXXXXXXX
Chichester House
000/000 Xxxx Xxxxxxx
Xxxxxx XX0X 0XX
Ref: TRA/APA1.2
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CONTENTS
1. Definitions and Interpretation
2. Conditions
3. Purchase and Subscription
4. Completion
5. Company Option
6. Strategic Investors
7. Principal Warranties
8. Management Warranties
9. Completion Accounts
10. Management of the Company
11. Financial Information
12. Matters Requiring Consent
13. Management Non-Compete Undertakings
14. Xxxxx Non-Compete Undertakings
15. Nominated Directors and New Directors
16. The Audit Committee and the Remuneration Committee
17. Transfers and New Members
18. Management and Employee Shares
19. Investor's Consent
20. Sale or Listing
21. Duration of Obligations
22. Enforcement of the Company's Rights
23. Announcements
24. Costs
25. General Provisions
26. Contracts (Rights of Third Parties) Xxx 0000
27. Notices
28. Governing Law and Jurisdiction
SCHEDULES
Schedule 1 - The Senior Managers
Schedule 2 - Particulars of the Company and Subsidiary
Schedule 3 - Written Resolution
Schedule 4 - Principal Warranties
Schedule 5 - Management Warranties
Schedule 6 - Deed of Adherence
Schedule 7 - Properties
Schedule 8 - Completion Accounts
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AGREED FORM DOCUMENTS
1. Articles
2. Business Plan
3. Service Agreements
4. Managers' Questionnaires
5. Facilities Agreement
6. IP Licence
7. Term Sheet for Underlease
8. Disclosure Letter
9. Exhibit
10. Senior Manager Accelerated Vesting Waiver
11. Managers' Subscription Letters
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AGREEMENT dated 12th April 2001
PARTIES:
(1) RED-M (COMMUNICATIONS) LIMITED a company incorporated in England and
Wales under Number 03985301 whose registered office is at Wexham
Springs, Xxxxxxxxx Xxxx, Xxxxxx, Xxxxxx, Xxxxxxxxx XX0 0XX ("COMPANY").
(2) THE PERSONS whose names and addresses are set out in Schedule 1
("SENIOR MANAGERS" and each a "SENIOR MANAGER").
(3) XXXXX NETWORKS NV a company incorporated in the Netherlands whose
address is at Transpolis Schiphol Airport, Polaris Avenue, 23, 2132 JH
Hoofddorp, The Netherlands ("XXXXX").
(4) APAX EUROPE V - A, L.P., a Delaware limited partnership established
under the Delaware Revised Uniform Limited Partnership Act (the "EUROPE
A Fund"), APAX EUROPE V - B, L.P., an English limited partnership
established under the Limited Partnerships Xxx 0000 (the "EUROPE B
FUND"), APAX EUROPE VC GMBH & CO KG, a German limited partnership
(Kommanditgesellschaft) established under the German Civil Code
(Handelsgesetzbuch) (the "EUROPE C FUND"), APAX EUROPE V - D, L.P., an
English limited partnership established under the Limited Partnerships
Xxx 0000 (the "EUROPE D FUND"), APAX EUROPE V - E, L.P., an English
limited partnership established under the Limited Partnerships Xxx 0000
(the "EUROPE E FUND"), APAX EUROPE V - F, C.V., a Dutch limited
partnership (commanditaire vennootschap) established under the Wetboek
van Koophandel (the "EUROPE F FUND"), and APAX EUROPE V - G, C.V., a
Dutch limited partnership (commanditaire vennootschap) established
under the Wetboek van Koophandel (the "EUROPE G FUND"), each having its
principal place of business at 00-00 Xxxxxxxx Xxxx, Xx. Xxxxx Xxxx,
Xxxxxxxx, XX0 0XX and each acting by its investment manager Apax
Partners Europe Managers Limited whose registered office is at 00
Xxxxxxxx Xxxxx, Xxxxxx X0X 0XX, (collectively referred to as "APAX" and
individually referred to as an "APAX FUND"); and
(5) AMADEUS II A, a limited partnership established in England under the
Limited Partnership Xxx 0000, whose principal place of business is at 0
Xxxxxxxxxxx Xxxx, Xxxxxxxxx, XX0 0XX acting by its manager, AMADEUS
CAPITAL PARTNERS LIMITED having its registered office at 0 Xxxxxxxxxxx
Xxxx, Xxxxxxxxx, XX0 0XX ("AIIA"), AMADEUS II B, a limited partnership
established in England under the Limited Partnership Xxx 0000, whose
principal place of business is at 0 Xxxxxxxxxxx Xxxx, Xxxxxxxxx, XX0
0XX acting by its manager, AMADEUS CAPITAL PARTNERS LIMITED having its
registered office at 0 Xxxxxxxxxxx Xxxx, Xxxxxxxxx, XX0 0XX ("AIIB"),
AMADEUS II C, a limited partnership established in England under the
Limited Partnership Xxx 0000, whose principal place of business is at 0
Xxxxxxxxxxx Xxxx Xxxxxxxxx XX0 0XX acting by its manager, AMADEUS
CAPITAL PARTNERS LIMITED having its registered office at 0 Xxxxxxxxxxx
Xxxx, Xxxxxxxxx, XX0 0XX ("AIIC"), AMADEUS II GMBH & CO KG, a German
limited partnership acting by its manager AMADEUS CAPITAL PARTNERS LTD
("AKG"), AMADEUS II AFFILIATES, a limited partnership established in
England under the Limited
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Partnership Xxx 0000, whose principal place of business is at 0
Xxxxxxxxxxx Xxxx, Xxxxxxxxx, XX0 0XX acting by its manager, AMADEUS
CAPITAL PARTNERS LIMITED having its registered office at 0 Xxxxxxxxxxx
Xxxx, Xxxxxxxxx, XX0 0XX ("AII AFFILIATES"). (AIIA, AIIB and AIIC, AKG
and AII Affiliates collectively referred to as "AMADEUS" and
individually to as an "AMADEUS FUND").
RECITALS:
(A) The Company, particulars of which are set out in Schedule 2, is
wholly-owned by Xxxxx.
(B) Xxxxx has agreed to sell shares in the Company to Apax and Amadeus and
Apax and Amadeus have agreed to subscribe for further shares in the
Company upon the terms and conditions set out in this Agreement.
(C) The Senior Managers have agreed to subscribe for shares in the Company
and to give to the Initial Investors the Management Warranties and
certain undertakings on the terms and conditions set out in this
Agreement.
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION(1)
In this Agreement (which expression shall be deemed to include the
Schedules hereto):
1.1 Unless the context otherwise requires:
"AGREED FORM" means in the form previously agreed by the parties to
this Agreement and initialled for the purposes of identification by or
on their behalf;
"AMADEUS ACQUISITION SHARES" shall mean XXX fully paid Series A Voting
Shares to be purchased by Amadeus from Xxxxx at $3.13 per share;
"AMADEUS DIRECTOR" means the non-executive director of the Company
nominated by Amadeus pursuant to clause 15.2 and the Articles;
"AMADEUS SUBSCRIPTION SHARES" means XXX Series A Voting Shares and XXX
Series A Conditional Voting Shares to be subscribed for by Amadeus;
"ANNUAL PLAN" means the Group operating plan and financial budget
(including inter alia annual revenue and capital expenditure budgets)
to be prepared for each financial year and approved in accordance with
clause 11.1.2;
"APAX ACQUISITION SHARES" shall mean XXX fully paid Series A Voting
Shares to be purchased by Apax from Xxxxx at $3.13 per share;
"APAX DIRECTOR" means the non-executive director of the Company
nominated by Apax pursuant to clause 15.2 and the Articles;
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(1) Confidential treatment for various items in this section requested by Xxxxx
Networks N.V.
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"APAX'S SOLICITORS" means Xxxxxxxx Xxxxxx Xxxxxxxxxxx of Chichester
House, 000-000 Xxxx Xxxxxxx, Xxxxxx XX0X 0XX;
"APAX SUBSCRIPTION SHARES" means XXX Series A Voting Shares and
1,840,818 Series A Conditional Voting Shares to be subscribed for by
Apax;
"ARTICLES" means the new articles of association of the Company in the
agreed form to be adopted pursuant to the written resolution set out in
Schedule 3 and, once adopted, those articles of association as amended
from time to time (and "ARTICLE" shall be construed accordingly);
"ASSOCIATE" means, in relation to any person, an associated company of
that person or a person who is connected with that person determined in
accordance with Sections 416 and 839 of the Taxes Act (save that in
construing Section 839 the term "control" shall have the meaning given
by Section 840 or Section 416 of the Taxes Act so that there shall be
control wherever either of the said Sections would so require);
"AUDITORS" means the auditors of the Company from time to time;
"BOARD" means the board of directors of the Company;
"BUSINESS PLAN" means the business plan and profit and cash flow
projections in the agreed form prepared by the Senior Managers dated
10th April 2001;
"COMPANY OPTION" means the option for the Company to call for the
subscription for further Convertible Shares in accordance with clause
5;
"COMPLETION" means the performance by the parties of the obligations
assumed by them respectively under clause 4;
"COMPLETION ACCOUNTS" means the unaudited balance sheet to be delivered
to the Initial Investors by the Company pursuant to clause 2.1.5
showing the net asset position and cash position of the Group at the
Completion Accounts Date to be audited following Completion pursuant to
clause 9;
"COMPLETION ACCOUNTS DATE" means 31st March 2001;
"CONFIDENTIAL INFORMATION" means the Intellectual Property Rights,
trade secrets, accounts, financial or trading information or other
confidential information relating to the businesses, transactions,
property, finances, dealings or affairs of the Group including, without
limitation, any information regarding the formulae, products,
processes, research projects or the other technical data of the Group
or the names and addresses of any customers, suppliers or agents of the
Group and including, without limitation, any papers or records
howsoever recorded (whether in writing or print or by photographic,
electrical, magnetic, symbolic or other means);
"CONNECTED PERSON" has the meaning given to that expression in Section
839 Taxes Act;
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"CONVERTIBLE SHARES" means the Series A Voting Shares and the Series A
Conditional Voting Shares;
"DEED OF ADHERENCE" means a deed in the form set out in Schedule 6 or a
deed in such other form as the Shareholders may agree;
"DISCLOSURE BUNDLE" means the index to the Disclosure Letter and all
documents listed therein and as attached to the Disclosure Letter;
"DISCLOSURE LETTER" means the letter of even date herewith in the
agreed form from Xxxxx, the Company and the Senior Managers to the
Initial Investors relating to the Warranties and such term shall
include the Disclosure Bundle;
"$" means US dollars;
"EASDAQ STOCK MARKET" means the recognised investment exchange (as
defined in s285 of the Financial Services and Markets Act 2000) which
is regulated by the Belgian Banking and Finance Commission and any
successor thereof;
"ENCUMBRANCE" means a mortgage, charge, pledge, lien, option,
restriction, right of first refusal, right of pre-emption, third party
right or interest, other encumbrance or security or equity interest of
any kind, or another type of preferential arrangement (including,
without limitation, a title transfer and retention arrangement) having
similar effect;
"EXHIBIT" means the exhibit to this Agreement in the agreed form
setting out the Profit Line and Revenue Line for the purposes of the
Articles;
"EXISTING OPTIONS" means existing options granted to employees and
directors of the Company in accordance with the terms of the Existing
Schemes to subscribe for 2,206,500 shares;
"EXISTING SCHEMES" means the Red-M 2000 stock plan adopted by a
resolution of the board dated 31st May 2000 and the Red-M 2000
California stock plan adopted by a resolution of the Board dated 31st
May 2000;
"FACILITIES AGREEMENT" means an agreement in the agreed form to be
entered into by the Company and Xxxxx regarding the provision of
various administrative services and facilities;
"GROUP" means, in relation to a company, that company and any company
which is from time to time a holding company of that company or a
subsidiary of that company or of such holding company;
"GROUP" means the Company and its subsidiary undertakings (if any) from
time to time and "MEMBER OF THE GROUP" or "GROUP COMPANY" is to be
construed accordingly;
"GROUP SERVICES AGREEMENT" means the services agreement dated 27th
April 2000 between Xxxxx, Xxxxx Networks Limited, Xxxxx Group Service
Limited, the Company, Red-M Inc. and others;
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"INITIAL INVESTORS" means Apax and Amadeus (and the expression "Initial
Investor" shall be construed accordingly);
"INTELLECTUAL PROPERTY" means:
(a) patents, trade marks, service marks, registered designs,
applications for any of those rights, trade and business
names, domain names, unregistered trade marks and service
marks, semi-conductor topography rights, copyrights (including
copyright in computer software), database rights and all other
semi-generis rights, know-how, rights in designs and
inventions; and
(b) rights under licences, consents, orders, statutes or otherwise
in relation to a right in paragraph (a);
in either case in any jurisdiction;
"INTELLECTUAL PROPERTY RIGHTS" means all Intellectual Property used by
the Company in, or in connection with its business;
"INVESTORS" means Apax, Amadeus and, to the extent applicable at the
time, the Strategic Investors (and the expression "INVESTOR" shall be
construed accordingly);
"IP LICENCE" means the agreed form licence of Intellectual Property to
be entered into by Xxxxx in favour of the Company;
"LAN" means local area network;
"LAST MANAGEMENT ACCOUNTS DATE" means 28th February 2001;
"LISTING" means the admission of any part of the ordinary share capital
of the Company to the Official List (as defined in s103(1) of the
Financial Services and Markets Act 2000) or the grant of permission to
deal in the same (or in any instruments representing any such ordinary
share capital) on the NASDAQ Stock Market, EASDAQ Stock Market or the
Neuer Markt Stock Market and specifically excludes the Alternative
Investment Market;
"XXXXX DIRECTORS" means the non-executive directors of the Company
nominated by Xxxxx pursuant to clause 15.2 and the Articles (and the
expression "XXXXX DIRECTOR" shall be construed accordingly);
"MANAGEMENT ACCOUNTS" means the Company's unaudited profit and loss
account for the period starting on incorporation and ending on the Last
Management Accounts Date, and the Company's unaudited balance sheet as
at the Last Management Accounts Date;
"MANAGERS" means the Senior Managers and each of Xxxxx Rollafson,
Xxxxxx Xxxxxxx and Xxxxxx Edge (and the expression "MANAGER" shall be
construed accordingly);
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"MANAGERS' SUBSCRIPTION LETTERS" means the applications for
subscription from each Manager to the Company in respect of the
Managers' Subscription Shares and each in the agreed form;
"MANAGERS' SUBSCRIPTION SHARES" means the XXX Series A Voting Shares to
be subscribed by the Senior Managers prior to Completion;
"MANAGEMENT WARRANTIES" means those Warranties to be given by the
Senior Managers contained in Schedule 5 or referred to in clause 8 and
"MANAGEMENT WARRANTY" means any of such Management Warranties;
NASDAQ STOCK MARKET" means the recognised investment exchange (as
defined in s285 of the Financial Services and Markets Act 2000) which
is regulated by the National Association of Securities Dealers, Inc., a
self-regulatory organisation which operates under the authority granted
it by the 1938 Xxxxxxx Act Amendment to the Securities Xxxxxxxx Xxx
0000;
"NEUER MARKT STOCK MARKET" means the recognised investment exchange (as
defined in s285 of the Financial Services and Markets Act 2000) owned
and operated by the Deutsche Borse AG group of companies;
"NOMINATED DIRECTORS" means the Apax Director, Amadeus Director and
Xxxxx Directors (and the expression "NOMINATED DIRECTOR" shall be
construed accordingly);
"PAN" means personal area network;
"PRINCIPAL WARRANTIES" means the warranties contained in Schedule 4 or
referred to in clause 7 and "PRINCIPAL WARRANTY" means any of such
Warranties;
"PRINCIPAL WARRANTORS" means the Company and Xxxxx (and the expression
"PRINCIPAL WARRANTOR" shall be construed accordingly);
"PROPERTY" means the property or properties, details of which are set
out in Schedule 7 and includes an individual property and part of an
individual property;
"SENIOR MANAGER ACCELERATED VESTING WAIVER" means the waiver of each
Senior Manager in the agreed form, in respect of the exercise of
Existing Options to be delivered in accordance with clause 2.1;
"SERIES A CONDITIONAL VOTING SHARES" means the Series A conditional
voting shares of $1 each in the capital of the Company which will be
created pursuant to the written resolution set out in Schedule 3;
"SERIES A VOTING SHARES" means the series A voting shares of $1 each in
the capital of the Company which will be created pursuant to the
written resolution set out in Schedule 3;
"SERVICE AGREEMENTS" means the agreements in the agreed form to be
entered into by the Company and each of the Senior Managers;
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"SHARE" means a share in the capital of the Company of whatever class;
"SHAREHOLDERS" means all those persons holding shares (and the
expression "SHAREHOLDER" shall be construed accordingly);
"STRATEGIC INVESTORS" means the new investors in the Company proposed
pursuant to clause 6 (and the expression "STRATEGIC INVESTOR" shall be
construed accordingly);
"SYNDICATION SHARES" means XXX Series A Conditional Voting Shares to be
dealt with pursuant to clause 6;
"TAX" means any form of taxation, levy, duty, charge, contribution or
impost of whatever nature (including any related fine, penalty,
surcharge or interest) imposed by any Tax Authority;
"TAX AUTHORITY" means any local, municipal, governmental, state,
federal or other fiscal, revenue, customs or excise authority, body or
official anywhere in the world including, without limitation, the
Inland Revenue and H.M. Customs & Excise;
"TAXES ACT" means the Income and Corporation Taxes Xxx 0000;
"TERM SHEET OF UNDERLEASE" means the term sheet relating to an
underlease of the Company's premises at Wexham Springs in the agreed
form;
"TRADE INVESTORS" means any person which is not an independent
financial investor. For this purpose independent financial investor
means an investor which is not a trading company, or an associate of
any trading company (other than in respect of financial investments
made by it in such trading companies). For the avoidance of doubt a
venture capital fund which is an associate of a trading company (other
than in respect of a financial investment made by it in such trading
company) is deemed a Trade Investor;
"WARRANTIES" means the Principal Warranties and the Management
Warranties.
1.2 A reference to a "SUBSIDIARY" or "HOLDING COMPANY" is to be construed
in accordance with Section 736 of the Companies Xxx 0000 and a
reference to a "SUBSIDIARY UNDERTAKING" or a "GROUP UNDERTAKING" is to
be construed in accordance with Sections 258 and 259 of the Companies
Xxx 0000.
1.3 References to statutes or statutory provisions include those statutes
or statutory provisions as amended, extended, consolidated, re-enacted
or replaced from time to time and any orders, regulations, instruments
or other subordinate legislation made thereunder.
1.4 Subject as herein otherwise expressly defined, words and phrases
defined in Part XXVI of the Companies Xxx 0000 (the "ACT") and in the
Articles bear the same respective meanings.
1.5 Unless otherwise specified, words importing the singular include the
plural, words importing any gender include every gender, words
importing persons include bodies
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corporate and unincorporate and references to the whole include the
part; and (in each case) vice versa.
1.6 References to clauses and other provisions are references to clauses
and other provisions of this Agreement.
1.7 Obligations and liabilities assumed by more than one person, are
assumed severally unless otherwise specified.
1.8 The headings shall not affect interpretation.
2. CONDITIONS
2.1 Completion is subject to and conditional upon the following conditions
being fulfilled to the satisfaction of the Initial Investors
immediately after the execution of this Agreement:
2.1.1 execution of, and delivery to the Initial Investors from each
of the Senior Managers of a Senior Manager Accelerated Vesting
Waiver;
2.1.2 the passing of a written resolution of the Company in the form
set out in Schedule 3;
2.1.3 the Company and each of the Senior Managers having entered
into the Service Agreements;
2.1.4 the Company and Xxxxx having entered into the Facilities
Agreement;
2.1.5 the Company delivering to the Initial Investors unaudited
Completion Accounts showing net assets of at least $2.2
million and cash in its bank accounts of at least $2.7 million
in respect of the Group;
2.1.6 evidence satisfactory to the Initial Investors of the
repayment by Xxxxx and its associates of all debt owed to the
Group;
2.1.7 the delivery, duly executed by Xxxxx to the Company, of the IP
Licence;
2.1.8 receipt by the Company in a form satisfactory to the Initial
Investors of confirmatory assignments to the Company of
Intellectual Property Rights from those employees of the Group
responsible for creation of any of the Group's patent rights;
2.1.9 evidence satisfactory to the Initial Investors that the Group
has insurance in respect of all those risks commonly insured
to include, without limitation, product liability, employer's
liability, fire and theft;
2.1.10 the Company shall execute the Group Services Agreement which
shall insofar as it relates to the Company upon Completion
automatically terminate in accordance with the relevant
provisions therein;
2.1.11 termination by the Company of the following agreements:
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2.1.11.1 intercompany netting agreement;
2.1.11.2 procurement services agreements (save in respect of
existing orders);
2.1.11.3 revolving loan agreement; and
2.1.12 the delivery to the Company of the Managers' Subscription
Letters duly executed.
2.2 Each of the Initial Investors may, in relation to their respective
subscriptions for Convertible Shares only and in their absolute
discretion waive (in whole or in part) any or all of the above
conditions.
3. PURCHASE AND SUBSCRIPTION
3.1 Forthwith after the requirements in clause 2 have been met or waived
and in full reliance upon the Principal Warranties and Management
Warranties and the covenants contained in clauses 7 and 8:
3.1.1 Apax and Amadeus shall subscribe for the Apax Subscription Shares and
Amadeus Subscription Shares respectively upon the terms and conditions
hereinafter contained; and
3.1.2 Apax and Amadeus respectively shall purchase from and Xxxxx shall sell
the Apax Acquisition Shares and Amadeus Acquisition Shares with full
title guarantee.
3.2 Each of Xxxxx and the Senior Managers (so far as each such Senior
Manager is able) hereby grants to the Board full, irrevocable and
unconditional authority to allot the Apax Subscription Shares and
Amadeus Subscription Shares to Apax and Amadeus respectively and to
transfer the Apax Acquisition Shares to Apax and Amadeus Acquisition
Shares to Amadeus without any requirement that any of such shares be
offered first to Xxxxx.
4. COMPLETION(2)
Immediately after the fulfilment or waiver, to the satisfaction of the
Initial Investors, of the conditions set out in clause 2:
4.1 Xxxxx shall deliver duly executed transfers in respect of the Apax
Acquisition Shares and Amadeus Acquisition Shares and the relative
share certificate(s);
4.2 the Company shall, and each of the Senior Managers shall (insofar as
they are able) procure that the Company shall:
4.2.1 allot and issue to the Initial Investors the shares subscribed
by them and register those shares in the name of each Initial
Investor (or its nominee) and issue share certificates in
respect of them;
------------------------------------
(2) Confidential treatrment for various items in this section requested by Xxxxx
Xxxxxxxx X.X.
000
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4.2.2 approve the transfers (subject only to stamping) of the Apax
Acquisition Shares and Amadeus Acquisition Shares and register
those shares in the names of Apax and Amadeus (or its nominee)
respectively and issue share certificates in respect of them;
4.2.3 appoint Xxxxxxx Xxxxxx to the Board as the Apax Director;
4.2.4 appoint Xxxxxxx Xxxxxx to the Board as the Amadeus Director;
4.2.5 appoint Kirstie Hallgate to the Board as a Xxxxx Director
(Xxxxxxxxxxx Xxxxxxx being the second Xxxxx Director);
4.2.6 appoint Xxxxxx Xxxxxxx secretary of the Company;
4.2.7 appoint Xxxxxx Xxxxxxx as company secretary of Red-M Inc in
the stead of Kirstie Hallgate and receive the resignation of
Xxxxxxxxxxx Xxxxxxx as a director;
4.2.8 deliver to the Initial Investors the resignation of Xxxxxxx
Xxxxxx as a director of each group company of Xxxxx.
4.3 Conditional on all matters set out in clauses 4.1. and 4.2 being
completed:
4.3.1 Apax shall remit by telegraphic transfer to such account as
the Company shall nominate an amount equivalent to the
subscription price for the Apax Subscription Shares at the
subscription price of $3.13 per Convertible Share being XXX in
the aggregate;
4.3.2 Amadeus shall remit by telegraphic transfer to such account as
the Company shall nominate an amount equivalent to the
subscription price for the Amadeus Subscription Shares at
subscription price of $3.13 per Convertible Share being XXX in
the aggregate;
4.3.3 Apax shall make payment to Xxxxx by telegraphic transfer of
the sum of XXX for the Apax Acquisition Shares in the
aggregate;
4.3.4 Amadeus shall make payment to Xxxxx by telegraphic transfer of
the sum of XXX for the Amadeus Acquisition Shares in the
aggregate.
4.4 As soon as practicable following Completion, Xxxxx and the Company
shall enter into an underlease of the property at Wexham Springs upon
the terms set out in the draft Term Sheet of Underlease.
5. COMPANY OPTIONS(3)
5.1 The Investors hereby grant to the Company the right to call upon the
Investors to subscribe, in the proportions specified in clause 5.2, for
2,396,166 new Series A Conditional Voting Shares at a subscription
price of $3.13 per share at any time within the period 9 to 12 months
from the date of Completion by serving written
----------------------------------
(3) Confidential treatrment for various items in this section requested by Xxxxx
Networks N.V.
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notice on the Investors exercising the option. The Investors shall pay
the subscription monies within 21 days of such notice and within 7 days
thereafter the Company shall allot and issue the new Series A
Conditional Voting Shares to the Investors (or their nominee(s)) and
the Company shall register the Investors (or their nominee(s)) as the
holders of such Series A Conditional Voting Shares and shall prepare
and deliver the requisite share certificate to the Investors (or their
nominee(s)).
5.2 The Investors (or their nominee(s)) shall subscribe for the new Series
A Conditional Voting Shares in proportion to their respective share
holdings in Convertible Shares.
5.3 The right to exercise the Company Option is conditional upon there
being no Material Adverse Change in the business of the Company at the
date notice of exercise of the Company Option is given and "MATERIAL
ADVERSE CHANGE" shall mean:
5.3.1 that Xxxx Xxxxxx is no longer employed by the Company (other
than by reason of Dismissal Without Cause); or
5.3.2 that more than one of the Senior Managers has left the employ
of the Company (excluding any Senior Manager leaving by reason
of Dismissal Without Cause);
where "DISMISSAL WITHOUT CAUSE" shall mean where an employee of the
Company ceases to be an employee of the Company for any of the
following reasons:
(i) the Company giving notice to terminate his employment under
the terms of any service agreement for reasons other than a
breach by the employee of such service agreement or such
employee's wilful neglect or gross misconduct; or
(ii) the serious illness, death, injury or disability of the
employee which renders the employee incapable of working;
(iii) by the mutual consent of the Company and the employee;
(iv) in circumstances in which it has been legally established by a
court or tribunal of competent jurisdiction that he has a
successful claim against the Company for redundancy, unfair
dismissal or wrongful dismissal; or
(v) by reason of the employee terminating his service agreement
due to the Company's breach or by reason of his service
agreement expiring and not being renewed by the Company; or
5.3.3 that there have been material adverse variances in the OEM
relationships from those existing at Completion (if any) or
envisaged by the Business Plan, and "MATERIAL ADVERSE
VARIANCE" for the purposes of this clause 5.3.3 shall mean the
Company failing to establish at least XXX major strategic OEM
relationships within 12 months of Completion with entities
such as Motorola and Toshiba or entities of equivalent
standing; or
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5.3.4 there has been a material breakdown in the operability of the
technology of the Company, and "MATERIAL BREAKDOWN IN THE
OPERABILITY OF THE technology" for the purposes of this clause
5.3.4 shall mean:
5.3.4.1 the Company either (i) not developing a commercial
PICONET product within twelve months of Completion,
or (ii) not releasing a commercial product that
conforms and has been qualified/certified with the
Bluetooth 1.1 ratification or such other equivalent
ratification for the market, assuming such
ratification implies widescale interoperability of
devices; or
5.3.4.2 the Company not developing a saleable product that is
capable of supporting voice calls in a way that
conforms with the Bluetooth Standard; or
5.3.4.3 a dissolvement of the Bluetooth SIG; or
5.3.4.4 the Company not being allowed to be an associate
member of the Bluetooth SIG or being excluded from
the SIG PAN working group; or
5.3.5 the Company not achieving XXX of revenues (excluding bad and
doubtful debts) to 31st December 2001; or
5.3.6 that there has been a material breach of any of the Principal
Warranties (which for the purposes of the this clause 5.3.6
only shall mean a breach of the Principal Warranties resulting
in a claim or claims in excess of the aggregate limit set by
clause 7.7.3 hereof).
5.4 There shall be no deemed material breakdown in the operability of the
technology for the purposes of clause 5.3.4 if Apax agrees in writing
any variance to the criteria set out in clause 5.3.4.
6. STRATEGIC INVESTORS(4)
6.1 The Company, with the support of the Shareholders, shall use its
reasonable endeavours to procure Strategic Investors to subscribe on
the terms of this Agreement for the Syndication Shares at a minimum
price of $3.13 per share.
6.2 The Company may not procure subscription for the Syndication Shares
from less than two Strategic Investors and, ideally, there should be
three. The Board shall approve the Strategic Investors which, ideally,
shall comprise any of: XXX
6.3 Insofar as the Company has not been able to procure at least two
Strategic Investors (to be approved in accordance with clause 6.2
above) to subscribe in cash for some or all of the Syndication Shares,
within ten weeks of Completion, the Initial Investors shall, if
requested in writing by the Company prior to expiry of such ten week
period
-------------------------------------
(4) Confidential treatment requested by Xxxxx Xxxxxxxx X.X.
000
00
(or such further period as may be agreed in writing by the Company and
the Initial Investors), forthwith subscribe for the amount of the
remaining Syndication Shares on the terms of this Agreement in
proportion to their respective shareholdings in Convertible Shares.
6.4 Each of the parties to this Agreement hereby waives both compliance
with any restriction relating to pre-emption and enforcement of any
rights relating to pre-emption which he or it may have which exist
pursuant to this Agreement, the Articles or otherwise or pursuant to
clause 12 and which may prevent the subscription, syndication and
allotment of the Syndication Shares contemplated in this Agreement.
6.5 Upon receipt of the subscription monies due the Company shall forthwith
allot the Syndication Shares and issue certificates in respect thereof.
6.6 Notwithstanding clause 25.1, the terms of this clause 6 may be varied
in writing by the Company, Xxxxx and the Initial Investors alone.
7. PRINCIPAL WARRANTIES
7.1 The Company (in consideration of the subscription by Apax for the Apax
Subscription Shares and subscription by Amadeus for the Amadeus
Subscription Shares) hereby warrants to the Initial Investors that each
Principal Warranty is true, accurate, and not misleading at the date of
this Agreement and acknowledges that the Initial Investors are entering
into and/or becoming a party to this Agreement in reliance on each of
the Principal Warranties.
7.2 Xxxxx (in consideration of the purchase by Apax of the Apax Acquisition
Shares and Amadeus of the Amadeus Acquisition Shares) hereby warrants
to the Initial Investors that each Principal Warranty is true,
accurate, and not misleading at the date of this Agreement and
acknowledges that the Initial Investors are entering into and/or
becoming a party to this Agreement in reliance on each of the Principal
Warranties.
7.3 The Principal Warranties are qualified by matters fully and fairly
disclosed in the Disclosure Letter and by any matter expressly provided
for under this Agreement. No other knowledge relating to the Company
and its subsidiaries (actual, constructive or imputed) prevents or
limits a claim made by the Initial Investors for breach of a Principal
Warranty. The Principal Warrantors may not invoke the Initial
Investors' knowledge (actual, constructive or imputed) of facts which
might make a Principal Warranty untrue, inaccurate, incomplete or
misleading as a defence to a claim for breach of a Principal Warranty.
The Initial Investors confirm that at the date of this Agreement they
have not been advised by Apax's Solicitors or PricewaterhouseCoopers of
any right or potential right to bring a claim under the Principal
Warranties.
7.4 Each Principal Warrantor waives and may not enforce a right which it or
he may have in respect of a misrepresentation, inaccuracy or omission
in or from information or advice supplied or given by any officer or
employee of the Company or any of its subsidiaries for the purpose of
assisting the Principal Warrantors to give a Principal Warranty or
prepare the Disclosure Letter.
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7.5 Each Principal Warranty is to be construed separately and independently
and (except where this Agreement provides otherwise) is not limited by
another provision of this Agreement or another Principal Warranty.
7.6 A reference in Schedule 4 or the Disclosure Letter to a person's
knowledge, information, belief or awareness is deemed to include
knowledge, information, belief or awareness only of the Senior
Managers, Kirstie Hallgate and Xxxxx Xxxxxxx.
7.7 Except for claims in respect of a breach of a Principal Warranty
arising as a result of fraudulent or wilful concealment on the part of
the Principal Warrantor:
7.7.1 the aggregate liability of each Principal Warrantor for all
claims pursuant to the Principal Warranties shall not exceed
the amount set opposite its name below:
7.7.1.1 Company: $27,500,000;
7.7.1.2 Xxxxx: $8,650,000;
7.7.2 unless the Initial Investors discovery of the breach of the
Principal Warranty is delayed as a result of fraudulent or
wilful concealment on the part of the relevant Principal
Warrantor, no Principal Warrantor shall be liable in respect
of a claim for breach of a Principal Warranty unless he or it
has been given written notice of the claim within the period
expiring one month following submission to the Initial
Investors of the consolidated audited accounts of the Group to
31st December 2001 and legal proceedings in respect of such
claim have been commenced within six months following the
service of such notice being both issued and served;
7.7.3 no claim shall be made in respect of any breach or
non-fulfilment of any of the Principal Warranties unless the
amount payable by the Principal Warrantors in respect of any
such claim exceeds L20,000 and the aggregate amount payable by
the Principal Warrantors in respect of all such claims exceeds
L100,000 in which event the full amount of all such claims
shall be recoverable;
7.7.4 in the event that any company in the Group actually recovers
any sum from any third party (including but not limited to any
insurer or any Tax Authority) in respect of any matter which
is the subject of a claim under the Principal Warranties the
Initial Investors and the Principal Warrantors shall procure
that any such sum paid by the Principal Warrantors shall be
reimbursed to them pro-rata;
7.7.5 if the Principal Warrantors pay to the Initial Investors an
amount in respect of a claim under the Principal Warranties
and the Initial Investors subsequently recover (whether by
recovery from insurers, payment, discount, credit, set-off or
otherwise) from a third party a sum which is directly
referable to that claim, the Initial Investors shall repay (as
soon as reasonably practicable after receipt) to the Principal
Warrantors so much of such sum as is equal to the sum
recovered from the third party
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(or such lesser amount as the Principal Warrantors shall have
paid to the Initial Investors) less all costs reasonably and
properly incurred by the Initial Investors in making such
recovery;
7.7.6 the Initial Investors shall not be entitled to recover damages
in respect of any claim for breach of the Principal Warranties
or otherwise obtain reimbursement or restitution more than
once in respect of the same subject matter giving rise to
breach of Principal Warranties; and
7.7.7 the Principal Warrantors shall not be liable under the
Principal Warranties to the extent that:
7.7.7.1 the subject matter of a claim is provided for or
reserved for in the Management Accounts;
7.7.7.2 the claim arises as a result of the passing of any
enactment or coming into force of any statutory
instrument or other rule of law after the date hereof
with retrospective effect; or
7.7.7.3 the claim is attributable (in whole or in part) to an
event occurring after Completion by or involving an
Initial Investor or any of their respective officers,
employees or agents arising other than in the
ordinary course of business; or
7.7.7.4 the claim is attributable (in whole or in part) to,
or is increased as a result of, a change made after
Completion in the accounting policies or accounting
or commercial practices or any Tax reporting practice
or the length of any accounting period for Tax
purposes of Xxxxx or the Initial Investors or the
Company; or
7.7.7.5 the matter giving rise to the claim arises (in whole
or in part) from an event occurring before or after
Completion at the request or direction of, or with
the acquiescence or consent of, an Initial Investor
or an authorised representative or professional
adviser of the Initial Investor; or
7.7.7.6 the claim is attributable to, or is increased as a
result of an expression of a future intention or a
forecast, speculation, assessment, illustration,
projection, budget, estimate or advice in each case
made, prepared, provided or given (as the case may
be) by or on behalf of the Principal Warrantors; or
7.7.7.7 the Initial Investors assign or purport to assign any
of their respective rights under this Agreement other
than in accordance with the provisions of clause
25.10 (Assignment) or makes or purports to make a
declaration of trust in respect of any of those
rights.
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7.8 The Initial Investors confirm to the Principal Warrantors that in
entering into this Agreement, they have not relied upon any
representation, warranty or undertaking except as expressly set out in
this Agreement. The Initial Investors irrevocably and unconditionally
waive any right they may have to claim damages for any representation
or warranty not contained in this Agreement unless such representation
or warranty was made fraudulently.
7.9 The Initial Investors agree amongst themselves that no claim shall be
brought by any of the Initial Investors without the consent of Apax.
7.10 Nothing herein shall be deemed to relieve the Initial Investors (or any
assignee of the whole or any part of the Initial Investors' interests
hereunder) from any common law duty to mitigate any loss or damage
incurred by it.
8. MANAGEMENT WARRANTIES
8.1 Each of the Senior Managers severally warrants to the Initial Investors
that, where the statement in the Management Warranty is a statement of
fact, the facts stated in the Management Warranty are, so far as he is
actually aware, true at the date of this Agreement and, where the
statement in the Management Warranty is a statement of opinion, the
opinion expressed in the Management Warranty was his actual opinion at
the date of this Agreement. The Senior Managers, when considering
whether a fact is true or opinion validly held, have made enquiry only
of Kirstie Hallgate, Xxxxx Xxxxxxx, the Managers and the functional
heads of manufacturing and services.
8.2 The Senior Managers acknowledge that the Initial Investors are entering
into and/or becoming a party to this Agreement in reliance on each of
the Management Warranties.
8.3 The Management Warranties are qualified by matters fairly disclosed in
the Disclosure Letter and by any matter expressly disclosed in this
Agreement. The Initial Investors confirm that at the date of this
Agreement they have not been advised by Apax's Solicitors or
PricewaterhouseCoopers of any right or potential right to bring a claim
under the Management Warranties.
8.4 Each Senior Manager waives and may not enforce a right which he may
have in respect of a misrepresentation, inaccuracy or omission in or
from information or advice supplied or given by any officer or employee
of the Company or any of its subsidiaries for the purpose of assisting
the Senior Managers to give a Management Warranty or prepare the
Disclosure Letter.
8.5 Each Management Warranty is to be construed separately and
independently and (except where this Agreement provides otherwise) is
not limited by another Management Warranty.
8.6 Except for claims in respect of a breach of a Management Warranty
arising as a result of fraudulent or wilful concealment on the part of
the Senior Manager:
8.6.1 the aggregate liability of each Senior Manager for all claims
pursuant to the Management Warranties shall not exceed the
amount set opposite his name below:
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8.6.1.1 Xxxxxxx Xxxxxx half gross annual salary on
Completion;
8.6.1.2 Xxxxx Xxxxx half xxxxx annual salary on Completion;
8.6.1.3 Xxxxx Xxxxx half gross annual salary on Completion;
8.6.2 unless the Initial Investors discovery of the breach of the
Management Warranty is delayed as a result of fraudulent or
wilful concealment on the part of the relevant Senior Manager,
no Senior Manager shall be liable in respect of a claim for
breach of a Management Warranty unless he has been given
written notice of the claim within the period expiring: one
month following submission to the Initial Investors of the
consolidated audited accounts of the Group to 31st December
2001 and legal proceedings in respect of such claim have been
commenced within six months following the service of such
notice being both issued and served;
8.6.3 no claim shall be made in respect of any breach or
non-fulfilment of any of the Management Warranties unless the
aggregate amount payable by the Principal Warrantors and the
Senior Managers in respect of any such claim exceeds L20,000
and the aggregate amount payable by the Principal Warrantors
and the Senior Managers in respect of all such claims exceeds
L100,000 in which event, subject to the provisions of this
clause 8 the full amount of all such claims shall be
recoverable;
8.6.4 in the event that any company in the Group actually recovers
any sum from any third party (including but not limited to any
insurer or any Tax Authority) in respect of any matter which
is the subject of a claim under the Management Warranties the
Initial Investors and the Senior Managers shall procure that
any such sum paid by the Senior Managers shall be reimbursed
to them pro-rata;
8.6.5 if the Senior Managers pay to the Initial Investors an amount
in respect of a claim under the Management Warranties and the
Initial Investors subsequently recover (whether by recovery
from insurers, payment, discount, credit, set-off or
otherwise) from a third party a sum which is directly
referable to that claim, the Initial Investors shall repay (as
soon as reasonably practicable after receipt) to the Senior
Managers so much of such sum as is equal to the sum recovered
from the third party (or such lesser amount as the Senior
Managers shall have paid to the Initial Investors) less all
costs reasonably and properly incurred by the Initial
Investors in making such recovery;
8.6.6 the Initial Investors shall not be entitled to recover damages
in respect of any claim for breach of the Management
Warranties or otherwise obtain reimbursement or restitution
more than once in respect of the same subject matter giving
rise to breach of Management Warranties; and
8.6.7 the Senior Managers shall not be liable under the Management
Warranties to the extent that:
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8.6.7.1 the subject matter of a claim is provided for or
reserved for in the Management Accounts;
8.6.7.2 the claim arises as a result of the passing of any
enactment or coming into force of any statutory
instrument or other rule of law after the date hereof
with retrospective effect; or
8.6.7.3 the claim is attributable (in whole or in part) to an
event occurring after Completion by or involving an
Initial Investor or any of their respective officers,
employees or agents arising other than in the
ordinary course of business; or
8.6.7.4 the claim is attributable (in whole or in part) to,
or is increased as a result of, a change made after
Completion in the accounting policies or accounting
or commercial practices or any Tax reporting practice
or the length of any accounting period for Tax
purposes of Xxxxx or the Initial Investors or the
Company; or
8.6.7.5 the matter giving rise to the claim arises (in whole
or in part) from an event occurring before or after
Completion at the request or direction of, or with
the acquiescence or consent of, an Initial Investor
or an authorised representative or professional
adviser of the Initial Investor; or
8.6.7.6 the claim is attributable to, or is increased as a
result of an expression of a future intention or a
forecast, speculation, assessment, illustration,
projection, budget, estimate or advice in each case
made, prepared, provided or given (as the case may
be) by or on behalf of the Principal Warrantors; or
8.6.7.7 the Initial Investors assign or purport to assign any
of their respective rights under this Agreement other
than in accordance with the provisions of clause
25.10 (Assignment) or makes or purports to make a
declaration of trust in respect of any of those
rights; or
8.6.7.8 the Initial Investors cease to own shares in the
capital of the Company; or
8.6.7.9 the claim is attributable (in whole or in part) to
the fact that the Company has lost possible business
after Completion provided that this exclusion shall
not apply to the extent that the Senior Managers have
reason to believe at Completion that any such future
business prospects envisaged in this Agreement and/or
the Business Plan will be lost; or
8.6.7.10 the Initial Investors are entitled and do recover
such loss from the Company pursuant to clause 9 (and
the Initial
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Investors acknowledge that if such claim does lie
against the Company they shall only pursue the Senior
Managers if and to the extent that recovery from the
Company has not been possible).
8.7 The Initial Investors confirm to the Senior Managers that in entering
into this Agreement, they have not relied upon any representation,
warranty or undertaking except as expressly set out in this Agreement.
The Initial Investors irrevocably and unconditionally waive any right
they may have to claim damages for any representation or warranty not
contained in this Agreement unless such representation or warranty was
made fraudulently.
8.8 Nothing herein shall be deemed to relieve the Initial Investors (or any
assignee of the whole or any part of the Initial Investors' interests
hereunder) from any common law duty to mitigate any loss or damage
incurred by it.
8.9 Notwithstanding any other provision in this Agreement to the contrary,
if a Senior Manager becomes liable to make any payment to the Initial
Investors in consequence of a breach of any of the terms of this clause
8, the Senior Manager may choose, at his absolute discretion, to sell
up to such number of Managers' Subscriptions Shares as he then holds to
realise sufficient proceeds to satisfy such liability. For the purposes
of this clause 8.9, the maximum number of Managers' Subscription Shares
that may be sold by a Senior Manager to satisfy any single liability
under this clause 8 shall be the number of Manager Subscription Shares
necessary to realise the amount of the liability, where the Manager
Subscription Shares are valued at the lower of their acquisition cost
to the Senior Manager and the fair value of those shares (determined in
accordance with Article 11.18 of the Articles). For the avoidance of
doubt, the Senior Managers may choose to satisfy any number of separate
liabilities arising under this clause 8 as may arise by a sale of
Managers' Subscription Shares as contemplated by this clause 8.9, until
they have sold all the Managers' Subscription Shares then held by them.
9. COMPLETION ACCOUNTS
9.1 Following Completion the unaudited Completion Accounts shall be audited
in accordance with Schedule 8.
9.2 The Company acknowledges that the Initial Investors are entering into
this Agreement and subscribing for shares in reliance upon the
representations of the Company (the "REPRESENTATIONS") that the net
assets of the Group at Completion are not less than $2.2 million and
cash in its bank account is not less than $2.7 million. If the net
assets of the Group are less than $2.1 million or if the cash position
is less than L2.6 million as shown by the audited Completion Accounts
then the Company agrees to indemnify the Initial Investors for every $1
by which such net assets fall below $2.1 million or the cash position
is less than $2.6 million (whichever is the greater) by the issue fully
paid to the Initial Investors of such number of Series A Voting Shares
(issued at a price of $3.13) as equals the shortfall and the parties
shall procure such issue of shares and hereby waive any rights of
pre-emption in respect thereof. The Series A Voting Shares issued shall
be distributed to the Initial Investors in proportion to their
respective shareholdings of Convertible Shares.
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9.3 The Company warrants that since the Completion Accounts Date there has
been no material deviation in the cash or net asset position of the
Company and shall indemnify the Initial Investors as set out in clause
9.2 if and to the extent there has been a material deviation.
9.4 This clause 9 sets out the Initial Investors sole remedies exclusively
in relation to the Representations.
10. MANAGEMENT OF THE COMPANY
10.1 The Company undertakes with the Initial Investors (for such period as
they hold in aggregate at least 5% of the issued share capital of the
Company) and Xxxxx (for such period as it holds at least 5% of the
issued share capital of the Company), and the Senior Managers shall
procure, that (save as otherwise provided or contemplated in this
Agreement or in the Business Plan or in any Annual Plan approved by
each of the Nominated Directors ) the Company (and each of the other
members of the Group) will (to the extent it is within each of their
respective powers to do so):
10.1.1 carry on and conduct its business and affairs in a proper and
efficient manner in accordance with all applicable laws and
regulations, for its own benefit and in accordance with the
Business Plan or any Annual Plan approved by each of the
Nominated Directors;
10.1.2 utilise the monies subscribed for new shares pursuant to this
Agreement solely for the purposes of fulfilment of the
Business Plan and Annual Plan;
10.1.3 transact all its business on arm's length terms;
10.1.4 unless otherwise agreed by all the members of the Board,
ensure that its business, other than routine day to day
business, shall be undertaken and transacted by the Board;
10.1.5 unless otherwise agreed by all members of the Board ensure
that there shall be no less than six meetings of the Board
each year of which the Nominated Directors shall receive at
least ten days' prior notice of meetings of the Board
accompanied by an agenda and all relevant board papers;
10.1.6 subject to the Business Plan and the Annual Plan, carry on its
business pursuant to policies laid down from time to time by
the Board;
10.1.7 maintain with a well established and reputable insurer
adequate insurance against all risks usually insured against
by companies carrying on the same or a similar business, in
amounts which the Board considers prudent, and (without
prejudice to the generality of the foregoing) for the full
replacement or reinstatement value of all its assets of an
insurable nature and against damage, injury, third party loss
(including product liability) and loss of profits;
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10.1.8 not acquire, dispose, hire, lease, licence or receive licences
of any assets, goods, rights or services otherwise than on the
best terms reasonably obtainable in the circumstances;
10.1.9 keep proper books of account containing true and complete
entries of all its dealings and transactions of and in
relation to its business;
10.1.10 prepare its accounts in accordance with UK GAAP;
10.1.11 not have as an accounting reference period any period other
than a period of 12 calendar months and subject as provided in
Section 223(3) of the Companies Xxx 0000;
10.1.12 to the extent that it is commercially and economically viable
for the Group to do so, if it requires any approval, consent
or licence for the carrying on of its business in the places
and in the manner in which it is for the time being carried on
or proposed to be carried on, obtain and maintain the same in
full force and effect;
10.1.13 procure that appropriate conditions are inserted into the
contracts of employment of all senior employees and executive
directors of the Group requiring them to devote their full
time and effort wholly and exclusively to the affairs of the
Group and not to make significant investments in, take other
interests in or (save with the written consent of the Board)
accept directorships or other positions of a consultancy or
executive nature with any other person;
10.1.14 within one month of Completion effect directors and officers
insurance (which insurance shall, for the avoidance of doubt,
cover the Nominated Directors) with an insurance company of
good repute and on terms approved by the Initial Investors;
10.1.15 within one month of Completion effect Key Man life insurance
with an insurance company of good repute in respect of Xxxxx
Xxxxx, Xxxxx Xxxxx and Xxxxx Rollafson for not less than
L1,000,000 each and for not less than L2,000,000 in respect of
Xxxx Xxxxxx and on terms approved by the Initial Investors;
and
10.1.16 endeavour to release Xxxxx from any guarantees given by Xxxxx
in favour of any Group Company within 30 days of Completion.
10.2 Each of the Senior Managers severally undertakes with the Initial
Investors and Xxxxx to use his reasonable endeavours to:
10.2.1 use all reasonable and proper means in his power to maintain,
improve and extend the business of the Group and to further
the reputation and interests of the Group; and
10.2.2 use all their respective powers to procure that any expansion,
development or evolution of any business of the Group will
only be effected through the Company or a wholly-owned
subsidiary of the
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Company unless any such expansion, development or evolution
consists of joint development arrangements in the ordinary
course of business.
10.3 Each of the Company, the Initial Investors and Xxxxx, shall use their
respective rights and powers to procure that no alteration is made to
any service agreement without the written consent of the relevant
Manager.
10.4 The CEO, Xxxx Xxxxxx, shall use his reasonable endeavours to procure as
soon as practicable following Completion that the other Managers
execute new service agreements similar to those signed by the Senior
Managers.
11. FINANCIAL INFORMATION
11.1 The Company shall supply the Initial Investors (for such period as they
hold in aggregate at least 5% of the issued share capital of the
Company) and Xxxxx (for such period as it holds at least 5% of the
issued share capital of the Company) with the following information:
11.1.1 the audited consolidated accounts of the Group for each
financial year as soon as practicable, and at the latest by
three months after the end of that financial year;
11.1.2 no later than one month before the start of each financial
year:
11.1.2.1 the draft Group operating plan and financial budget
which the Company, having consulted Apax and Xxxxx,
shall adopt as the Annual Plan for that financial
year;
11.1.2.2 the draft budget for allocation of employee share
options for that financial year which the Company,
having consulted Apax and Xxxxx and obtained their
approval, shall adopt as the Option Budget for that
financial year;
11.1.3 monthly management accounts, in a form approved by the Board
(having consulted with Xxxxx and Apax), consisting of a
balance sheet, profit and loss account, cash flow statement as
soon as practicable, and at the latest by three weeks after
the end of each month:
11.1.3.1 on a consolidated basis for the Group; and
11.1.3.2 for the Company and each trading subsidiary
undertaking; and
11.1.4 such other financial or management information relating to the
Group as the Initial Investors and Xxxxx may reasonably
request from time to time.
11.2 The Nominated Directors shall be entitled (in each case, provided that
the respective appointor of such person holds at least 5% of the issued
share capital of the Company) during the Company's normal hours of
business to inspect and take copies of the books of account and all
other records and documents of the Group on giving
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not less than 48 hours' written notice to the secretary (or, if there
is none for the time being, the chairman).
11.3 The Nominated Directors may pass any information received from the
Company to the Initial Investors and Xxxxx as appropriate.
11.4 An Initial Investor or Xxxxx may pass any information received from the
Company or the Nominated Directors to any of its investment or
professional advisers and the Initial Investors may include in
quarterly reports to a committee of unit holders, certain abridged
current financial information on the Company and in annual reports to
unit holders, historical audited financial information of the Company.
11.5 The Company shall keep the Initial Investors and Xxxxx fully informed
as to all material developments regarding its financial and business
affairs and shall notify them promptly of:
11.5.1 any event which is not in the public domain and which
materially affects the business of the Group;
11.5.2 any offer for any business of the Group or for any member of
the Group; and
11.5.3 any significant litigation affecting or likely to affect any
member of the Group.
11.6 Each of the Senior Managers shall make every effort to procure full and
prompt performance by the Company of its obligations under this clause
11.
12. MATTERS REQUIRING CONSENT
12.1 Each of the parties (other than the Company) agrees that the following
acts, unless required by this Agreement or unless already contained
within the Business Plan or in any Annual Plan (provided such Annual
Plan has been approved by the Board), shall not be carried out without
the written consent of the Initial Investors and Xxxxx (such consent
not to be unreasonably withheld or delayed) or without the vote of each
of the Nominated Directors at a duly convened meeting of the Board and
each party (other than the Company) shall use his respective rights and
powers as a director or Shareholder to procure so far as he is able
that no such act is carried out unless such consent has been given:
12.1.1 the variation of the authorised or issued share capital of the
Company (other than the redemption or conversion of
Convertible Shares as provided in the Articles) or any
subsidiary undertaking or the creation or the granting of any
option (other than pursuant to the Existing Schemes) or other
right to subscribe for shares or convert into shares in the
capital of the Company or any subsidiary undertaking; the
variation of the rights attaching to shares in the capital of
the Company (other than as provided in the Articles) or any
subsidiary undertaking;
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12.1.2 the alteration of the memorandum of association or Articles
(or equivalent documents) of the Company or a subsidiary
undertaking of the Company;
12.1.3 the declaration or distribution of any dividend or other
payment out of the distributable profits of the Company or of
any subsidiary undertaking of the Company, other than a
wholly-owned subsidiary;
12.1.4 the reduction of the Company's share capital, share premium
accounts, capital redemption reserve or any other reserve,
other than as required by the Articles; the reduction of any
uncalled liability in respect of partly paid shares of the
Company;
12.1.5 unless the person concerned has had legal advice in writing
that to honour this commitment would be a breach of his
fiduciary duties to the Company or under the Insolvency Xxx
0000 would or could render him personally liable for having
failed so to act, the taking of steps to wind up or dissolve
the Company or a subsidiary undertaking of the Company;
12.1.6 other than any of the Nominated Directors or otherwise
approved by the Remuneration Committee the fixing of
remuneration of any director or vice-President (or similar
officer) of the Company or of a subsidiary undertaking of the
Company;
12.1.7 the appointment of auditors of the Company or any subsidiary
undertaking, other than the re-appointment of an existing
auditor;
12.1.8 any material change in the nature of the business of the
Company or any subsidiary undertaking;
12.1.9 the alteration of the accounting reference date of the Company
or any subsidiary undertaking;
12.1.10 the alteration of the accounting policies of any member of the
Group;
12.1.11 the appointment or termination of employment of any employee
of the Company or any subsidiary undertaking whose basic
salary is to be or is in excess of L100,000 a year;
12.1.12 the entry into, termination or variation of any contract or
arrangement between (1) the Company or any subsidiary
undertaking and (2) a Manager or a person who in relation to a
Manager is a Connected Person, including the variation of the
remuneration or other benefits under such a contract or
arrangement, and the waiver of any breach of such a contract
or arrangement;
12.1.13 the delegation by the directors of the Company or any
subsidiary undertaking of any of their powers to a committee;
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12.1.14 the incurring by the Company or any subsidiary undertaking of
any borrowing or other indebtedness or liability in the nature
of borrowing, other than in the ordinary course of trading in
any such case;
12.1.15 capital expenditure of the Company or any subsidiary
undertaking which is greater than $50,000 or which would cause
capital expenditure of the Group in any financial year to
exceed $150,000 which is not specifically provided for in the
Annual Plan for the relevant financial year;
12.1.16 the entering into by the Company or any subsidiary undertaking
of any lease, licence or similar obligation under which the
rental and all other payments exceed $50,000 a year or which
would make the Group liable for payments exceeding $150,000 a
year under all its leases, licences or similar obligations;
12.1.17 the creation of any mortgage, charge or other encumbrance over
any asset of the Company or any subsidiary undertaking and the
giving of any guarantee by the Company or any subsidiary
undertaking, other than in the ordinary course of trading in
any such case;
12.1.18 the entering into by the Company or any subsidiary undertaking
of any contract or arrangement outside the ordinary course of
trading or otherwise than at arm's length;
12.1.19 the incorporation of a new subsidiary undertaking of the
Company or the acquisition by the Company or any subsidiary
undertaking of an interest in any shares in the capital of any
body corporate;
12.1.20 the instigation or settlement of any litigation or arbitration
proceedings by the Company or any subsidiary undertaking when
the amounts claimed exceed $50,000; and
12.1.21 the termination or any variation of the terms of the directors
and officers insurance and Key Man insurance referred to in
clause 10.1 or the Facilities Agreement.
12.2 For the purposes of clause 12.1, the written consent of the Initial
Investors in respect of any matter listed in clause 12.1.6 to 12.1.21
may be given by Apax on behalf of the Initial Investors. The written
consent of Apax (and for this purpose the Amadeus shareholding shall be
deemed included in that of Apax) or Xxxxx in respect of any matter
listed in clause 12.1.6 to 12.1.21 shall not be required if the
shareholding of that party falls below fifteen percent of the issued
share capital of the Company.
12.3 For the purposes of clause 12.1, the written consent of Apax, Xxxxx or
Amadeus in respect of any matter listed in clause 12.1.1 to 12.1.5
shall not be required if the shareholding of that party falls below 5%
of the issued share capital of the Company Provided that the
requirement to seek such consent will transfer to any one transferee of
Apax or Xxxxx acquiring in aggregate more than 25% of the issued share
capital of the Company.
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12.4 Each of the Initial Investors and Xxxxx shall (and shall procure that
its Nominated Director shall) exercise its consent rights pursuant to
this clause 12 having full regard to the best interests of the Company.
13. MANAGEMENT NON-COMPETE UNDERTAKINGS
13.1 Each of the Senior Managers undertakes with the Company that, except
with the written consent of the Nominated Directors:
13.1.1 that for a period commencing on the date hereof and expiring
on the date twelve months after the Termination Date he will
not whether by himself, through his employees or agents or
otherwise howsoever and whether on his behalf or on behalf of
any person, firm, company or other organisation, directly or
indirectly:
13.1.1.1 in competition with any member of the Group within
the Restricted Area be employed or engaged or
otherwise interested in the business of
manufacturing, designing, distributing, selling,
supplying or otherwise dealing with the Goods or the
Services. For the avoidance of doubt, subject to the
Board's consent (not to be unreasonably withheld) and
subject to the employing entity being informed of
these obligations, after the Termination Date, the
Senior Manager may be permitted to work on
non-competitive activities in businesses which may
have different independent divisions which compete
with the Company but may not work in or with such
competing division;
13.1.1.2 in competition with any member of the Group, solicit
business from or canvas any Customer or Prospective
Customer if such solicitation or canvassing is in
respect of the Goods or the Services;
13.1.1.3 in competition with any member of the Group accept
orders for the Goods or the Services from any
Customer or Prospective Customer;
13.1.1.4 solicit or induce or endeavour to solicit or induce
any person who on the Termination Date was a
director/manager/employee earning in excess of
L30,000 of any member of the Group with whom the
Senior Manager had dealings during the 12 months
preceding the Termination Date to cease working for
or providing services to the Group, whether or not
any such person would thereby commit a breach of
contract;
13.1.1.5 employ or otherwise engage in the business of
manufacturing, distributing, designing, selling,
supplying or otherwise dealing with the Goods or the
Services any person who was during the 12 months
preceding the Termination Date employed or otherwise
engaged by any member of the
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Group and who by reason of such employment or
engagement is in possession of any trade secrets or
confidential information relating to the business of
any member of the Group or who has acquired influence
over its Customers and Prospective Customers (defined
as in subclauses 13.1.3.3 and 13.1.3.4 but so that
references to the Senior Manager shall be replaced by
references to the relevant employee);
13.1.1.6 interfere or seek to interfere with the continuance
of supplies to any member of the Group (or the terms
of such supplies) from any suppliers who shall have
been supplying components for material or services to
any member of the Group at any time during the course
of his employment by a member of the Group;
13.1.2 while employed by a member of the Group he shall, unless
prevented by illness or specifically permitted by his Service
Agreement, devote his whole time and attention to the business
of the Group and shall not:
13.1.2.1 be employed or engaged as consultant without the
consent of the Board in any other business; or
13.1.2.2 be concerned or interested in any business competing
with that carried on by a member of the Group or the
business of a supplier or customer of a member of the
Group provided that a Senior Manager may be
interested in securities which are for the time being
quoted on a recognised investment exchange (as
defined by Section 285 (1) Financial Services Act
2000) or which are dealt on the Alternative
Investment Market of the London Stock Exchange if the
Senior Manager's interest in the securities does not
exceed 5% of the total amount of the securities in
issue;
13.1.3 for the purposes of this clause 13.1 the following words shall
have the following meanings:
13.1.3.1 "GOODS" shall mean any product that
materially performs the same function as any
goods manufactured, designed, distributed or
sold by any member of the Group with which
the duties of the Senior Manager were
concerned or for which he was responsible
during the one year immediately preceding
the Termination Date and, for the avoidance
of doubt, including Bluetooth or 802.11
wireless LAN or PAN networking solutions or
directly competing technology;
13.1.3.2 "SERVICES" shall mean any services
(including but not limited to technical and
product support, technical advice and
customer services) directly relating to the
Goods supplied by any member of the Group
with which the duties of the Senior Manager
were concerned or for which he was
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responsible and for the avoidance of doubt,
including, Bluetooth or 802.11 wireless LAN
or PAN networking solutions or directly
competing technology;
13.1.3.3 "CUSTOMER" shall mean any person, firm,
company, or other organisation whatsoever to
whom or which any member of the Group
distributed, sold or supplied Goods or
Services during the one year immediately
preceding the Termination Date and with whom
or which during such period, the Senior
Manager had personal dealings in the course
of his employment (or consultancy, as
appropriate) or with whom any employee who
was under the direct supervision of the
Senior Manager had personal dealings in the
course of his employment (or consultancy, as
appropriate).
13.1.3.4 "PROSPECTIVE CUSTOMER" shall mean any
person, firm, company or other organisation
whatsoever with whom or which any member of
the Group had negotiations or material
discussions regarding the distribution, sale
or supply of Goods or Services during the
twelve months immediately preceding the
Termination Date and with whom, during such
a period, the Senior Manager had personal
dealings in the course of his employment or
with whom any employee who was under the
direct supervision of the Senior Manager had
personal dealings in the course of their
employment;
13.1.3.5 "RESTRICTED AREA" shall mean
13.1.3.5.1 United Kingdom, the European
Union, the United States, Canada
and Japan; and
13.1.3.5.2 any other country in the world
where, on the Termination Date, any
member of the Group was engaged in
the manufacture, distribution,
design, sale or supply or otherwise
dealt with Goods or Services.
13.1.3.6 "TERMINATION DATE" shall mean the date of
termination of employment within the Group.
13.2 Each Senior Manager (having taken independent legal advice)
agrees with the Initial Investors that the above non-compete
undertakings are reasonable and necessary for the protection
of the legitimate interests of the Initial Investors.
13.3 While the above undertakings are considered to be reasonable
it is agreed that if any such undertakings shall be adjudged
to go beyond what is reasonable for the protection of the
interests of the Company but would be reasonable if part or
parts were deleted or modified, the relevant undertaking or
undertakings shall apply with such deletion and/or
modification as may be necessary to make it or them valid and
effective.
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32
13.4 Should a Senior Manager's employment with the Company or any
Group Company be terminated at any time "without cause" (which
shall include paragraphs (i) to (v) of clause 5.3.2 only):
13.4.1 the Company agrees that, at the election of the
Company, clause 13.1 will remain enforceable provided
that the Company shall continue to pay the Senior
Manager the salary (excluding any bonus) and medical
benefits the Senior Manager was entitled to receive
under the Senior Manager's service agreement at that
time for the period of restriction imposed under
clause 13 or the Senior Manager becoming employed or
self-employed (whichever is the shorter period);
13.4.2 the Company agrees that, if it (or any member of the
Group who is employing the Senior Manager at the
relevant Termination Date) requires the Senior
Manager not to perform any of the Senior Manager's
duties and/or excludes the Senior Manager from the
premises of the Company for some or all of the Senior
Manager's notice period ("GARDEN LEAVE"), the period
of restriction set out in clause 13.1 above shall be
reduced by the length of Garden Leave served prior to
the Termination Date.
14. XXXXX NON-COMPETE UNDERTAKINGS
14.1 Xxxxx undertakes with the Company that, except with the
written consent of the Board (excluding the Xxxxx Directors):
14.1.1 that for a period commencing on the date hereof and
expiring on the date twelve months after the
Termination Date it will not whether by itself,
through its employees or agents or otherwise
howsoever and whether on its behalf or on behalf of
any person, firm, company or other organisation,
directly or indirectly:
14.1.1.1 in competition with any member of the Group
within the Restricted Area be engaged or
otherwise interested in the business of
manufacturing, designing, distributing,
selling, supplying or otherwise dealing with
Goods;
14.1.1.2 in competition with any member of the Group,
solicit business from or canvas any Customer
or Prospective Customer if such solicitation
or canvassing is in respect of Goods;
14.1.1.3 in competition with any member of the Group
accept orders for Goods from any Customer or
Prospective Customer;
14.1.1.4 solicit or induce or endeavour to solicit or
induce any person who on the Termination
Date was a director/manager of any member of
the Group to cease working for or providing
services to the Group, whether or not any
such person would thereby commit a breach of
contract;
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14.1.1.5 employ or otherwise engage in the business
of manufacturing, distributing, designing,
selling, supplying or otherwise dealing with
Goods any person who was during the 12
months preceding the Termination Date
employed or otherwise engaged by any member
of the Group and who by reason of such
employment or engagement is in possession of
any trade secrets or confidential
information relating to the business of any
member of the Group or who has acquired
influence over its Customers and Prospective
Customers;
14.1.1.6 interfere or seek to interfere with the
continuance of supplies to any member of the
Group (or the terms of such supplies) from
any suppliers who shall have been supplying
components for material or services to any
member of the Group;
14.1.2 for the purposes of clauses 14.1 to 14.7 the
following words shall have the following meanings:
14.1.2.1 "GOODS" shall mean Bluetooth or 802.11
wireless LAN or PAN networking solutions or
directly competing technology;
14.1.2.2 "SERVICES" shall mean the provision of
managed services relating to Bluetooth or
802.11 wireless LAN or PAN networking
solutions or directly competing technology;
14.1.2.3 "CUSTOMER" shall mean any person, firm,
company, or other organisation whatsoever to
whom or which any member of the Group
distributed, sold or supplied Goods during
the one year immediately preceding the
Termination Date;
14.1.2.4 "PROSPECTIVE CUSTOMER" shall mean any
person, firm, company or other organisation
whatsoever with whom or which any member of
the Group had negotiations or discussions
regarding the possible distribution, sale or
supply of Goods during the twelve months
immediately preceding the Termination Date;
14.1.2.5 "RESTRICTED AREA" shall mean
14.1.2.5.1 United Kingdom, the European
Union, the United States, Canada
and Japan; and
14.1.2.5.2 any other country in the world
where, on the Termination Date, any
member of the Group was engaged in
the manufacture, distribution,
design, sale or supply or otherwise
dealt with Goods;
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34
14.1.2.6 "TERMINATION DATE" shall mean the date that
Xxxxx ceases to hold 20% or more of the
issued share capital of the Company.
14.2 Xxxxx (having taken independent legal advice) agrees with the
Company that the above non-compete undertakings are reasonable
and necessary for the protection of the legitimate interests
of the Initial Investors.
14.3 While the above undertakings are considered to be reasonable
it is agreed that if any such undertakings shall be adjudged
to go beyond what is reasonable for the protection of the
interests of the Company but would be reasonable if part or
parts were deleted or modified, the relevant undertaking or
undertakings shall apply with such deletion and/or
modification as may be necessary to make it or them valid and
effective.
14.4 Xxxxx shall procure that each group company of Xxxxx complies
with this clause 14.
14.5 Nothing contained in clause 14.1 shall preclude or restrict
Xxxxx or a group company of Xxxxx acquiring another company,
group of companies, business or undertaking (the "ACQUIRED
UNDERTAKING") whose business or businesses include(s) any of
the businesses which would, following such acquisition, be
subject to the restrictions set out in clause 14.1 (the
"RELEVANT BUSINESS") provided that the annual turnover of the
Relevant Business as shown in the most recently audited annual
accounts of the Acquired Undertaking prior to the date of the
acquisition did not account for more than 5 per cent of the
aggregate turnover of the Acquired Undertaking, as shown by
such accounts and Xxxxx shall ensure that such part of the
Relevant Business as is subject to the restriction set out in
clause 14.1 is disposed of within 6 months of acquisition to a
third party or parties.
14.6 In relation to any Board meetings to consider, or action to be
taken by the Company in respect of any breach or suspected
breach by Xxxxx of this clause 14, Xxxxx shall procure that
its Nominated Directors shall not attend such Board meetings
(unless requested by the Initial Investors) and shall not vote
thereat and will permit the prosecution of such matter by the
Apax Director and Amadeus Director on behalf of the Board (or
a committee of the Board appointed by them).
14.7 Notwithstanding the provisions of the above non-compete
undertakings, in the event that:
14.7.1 Xxxxx shall during the term of this Agreement supply
any services within the Restricted Area, which
compete with any Services provided by the Company; or
14.7.2 the Company shall during the term of this Agreement
supply any Services within the Restricted Area, which
compete with any services provided by Xxxxx or any
member of the Xxxxx group;
the board of Xxxxx shall meet with the Board in order to
resolve the conflict of interests between the respective
businesses of the Company and Xxxxx and the
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Company and Xxxxx acting in good faith shall use their
respective best endeavours to reach a workable solution to
their mutual benefit.
15. NOMINATED DIRECTORS AND NEW DIRECTORS
15.1 Save with the prior written consent of the Initial Investors
and Xxxxx, the number of Directors of the Company shall
initially (at the date of this Agreement) be 7 but shall be no
greater than 9. The parties shall use reasonable endeavours to
agree on the appointment of a new independent non-executive
chairman within three months of Completion.
15.2 Subject to the shareholding requirements specified in the
Articles each of the Initial Investors and Xxxxx shall be
entitled at any time and from time to time by the delivery of
written notice to the Company to appoint a director of the
Company (and in the case of Xxxxx two directors) and in like
manner to remove such person from office and the Company shall
give effect to the provisions of any such notice. Each of the
Initial Investors agrees that it shall not appoint a Nominated
Director (or, if already appointed, as soon as is reasonably
practicable remove a Nominated Director) whose other
directorships include a directorship of a company in direct
competition with the business of the Company (a "COMPETING
INTEREST"). In the event of any dispute between the parties
concerning whether any directorship of a proposed Nominated
Director (or an existing Nominated Director) amounts to a
competing interest the matter shall be put to a resolution of
the Board. The existing directorships of Xxxxxxx Xxxxxx and
Xxxxxxx Xxxxxx shall not for the purposes of this clause 15.2
be deemed to amount to a competing interest.
15.3 A Director nominated by an Initial Investor or Xxxxx shall be
entitled to appoint any person to be his alternate director.
15.4 The Company shall not remove or purport to remove the Apax
Director, the Amadeus Director or a Xxxxx Director without the
prior approval of Apax, Amadeus or Xxxxx (as appropriate).
15.5 In addition to the four Nominated Directors the following
shall comprise the Board :
15.5.1 the chief executive officer;
15.5.2 an independent non-executive director approved by the
parties;
15.5.3 an independent non-executive chairman appointed
pursuant to clause 15.1;
15.5.4 two further Board members if agreed upon by the
parties;
Provided that if an independent non-executive director to be
appointed pursuant to clause 15.5.2 cannot be agreed upon
within three months of Completion then Apax shall be entitled
to make such appointment but in this event the CEO (Xxxx
Xxxxxx) shall be entitled to select the independent
non-executive chairman of the Board. "INDEPENDENT" in this
context shall mean economically independent of the Initial
Investors and Xxxxx and, if the CEO is not satisfied that the
Apax appointee is independent, the CEO may veto such
appointment.
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15.6 Each of the Initial Investors shall be entitled to appoint an
observer to attend Board meetings but not to vote thereat.
15.7 The Company agrees that Apax Partners Europe Managers Ltd and
Amadeus Capital Partners Limited shall, in respect of the
provision of the services of the Apax Director, Amadeus
Director and their respective observers, be paid, in
aggregate, a fee at the rate of $50,000 per annum (plus value
added tax) payable quarterly in arrears from Completion. Such
fee shall be subject to upward review during the month before
and with effect from each anniversary of Completion, and if
the Company and the Apax Director and Amadeus Director cannot
agree a revised fee the annual fee payable immediately before
each anniversary shall be increased to the annual sum which
reflects the increase in the Retail Prices Index over the
previous year. In addition, the Apax Director, the Amadeus
Director and any of their respective observers shall be
reimbursed such reasonable expenses that they may properly
incur in providing their services to the Company.
15.8 The Company agrees that Xxxxx shall, in respect of the
provision of the services of the Xxxxx Directors, be paid, in
aggregate, a fee at the rate of $50,000 per annum (plus value
added tax) payable quarterly in arrears from Completion. Such
fee shall be subject to upward review during the month before
and with effect from each anniversary of Completion, and if
the Company and Xxxxx cannot agree a revised fee the annual
fee payable immediately before each anniversary shall be
increased to the annual sum which reflects the increase in the
Retail Prices Index over the previous year. In addition, the
Xxxxx Directors shall be reimbursed such reasonable expenses
that they may properly incur in providing their services to
the Company.
15.9 If a Nominated Director is not appointed from time to time the
relevant Initial Investor and/or Xxxxx shall during such
periods be sent notice of all directors' meetings and the
minutes thereof and all other documents and papers circulated
to the Board.
16. THE AUDIT COMMITTEE AND THE REMUNERATION COMMITTEE
16.1 The Board of the Company (and, at the request of the Apax
Director or a Xxxxx Director, the board of any other Group
Company) shall establish an audit committee (the "AUDIT
COMMITTEE") and a remuneration committee (the "REMUNERATION
COMMITTEE") having the membership and duties set out in this
clause 16.
16.2 The members of the Audit Committee shall be the chairman of
the Board, the Amadeus Director and a Xxxxx Director. At the
request of the Audit Committee, the Company and/or any Group
Company shall ensure the attendance of the Auditors or of any
other director or employee of the Company or any Group Company
and shall ensure the disclosure to the committee of any books
and records of the Company or any Group Company or other
information which it may require. The Company or any Group
Company shall upon request provide authorisation to the Audit
Committee to seek directly from the financiers and Auditors or
any Group Company such information as the Audit Committee
shall see fit.
16.3 The Audit Committee shall consider, report and make
recommendations to the Board on:
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37
16.3.1 appropriate accounting policies, compliance with
accounting standards and material accounting matters
(such as contingent liabilities);
16.3.2 the adequacy and effectiveness of internal systems of
reporting and control;
16.3.3 the scope of the audit, action required as a result
of the Auditors' findings and conclusion, and the
Auditors' remuneration;
16.3.4 compliance with the policies of the Company or any
Group Company and with external codes of conduct or
regulations; and
16.3.5 any other matters which it considers appropriate or
otherwise at the request of the Board.
16.4 The members of the Remuneration Committee shall be the
chairman of the Board, the Apax Director and a Xxxxx Director.
The chief executive officer shall, upon the request of the
Remuneration Committee, prepare and deliver a report and
recommendations on remuneration.
16.5 The Remuneration Committee shall be authorised to determine on
behalf of the Board the terms of appointment or dismissal and
the remuneration of both executive and non-executive directors
(including, subject to the provisions of clause 15 the
Nominated Directors).
16.6 The decisions of the Audit Committee and the Remuneration
Committee shall be reached by a majority of its members
voting.
17. TRANSFERS AND NEW MEMBERS(5)
17.1 No Shareholder shall transfer shares (pursuant to one or more
transfers) constituting more than three percent in aggregate
of the issued share capital of the Company to a Trade Investor
unless such transfer is a transfer following the making of an
offer for the whole of the issued share capital of the
Company. No Shareholder may transfer shares to a Strategic
Investor. For the purpose of this clause Xxxxx shall not be
deemed a Trade Investor.
17.2 Apax and Amadeus on the one hand and Xxxxx on the other
mutually agree to procure that the provisions of Article
11.15.2 (tag provisions) will apply as between themselves in
respect of any offer not amounting to an offer for a
controlling interest (as defined in such Article) in respect
of the number of shares sought to be purchased by the
purchaser pro rata to their respective holdings of shares in
the Company ("TAG-RIGHTS") Provided that:
17.2.1 XXX
17.2.2 XXX
----------------------
(5) Confidential treatment for various items in this section
requested by Xxxxx Xxxxxxxx X.X.
000
00
17.2.3 XXX
17.3 It is the parties intention that Strategic Investors will
waive all or part of their rights of pre-emption (whether
arising under this Agreement, the Articles or otherwise) on
the issue of any new shares or on the transfer of shares.
17.4 Notwithstanding Article 11.12.1 if any Strategic Investor
offers its shares for sale pursuant to a Transfer Notice (as
the same is defined in the Articles), and provided they are
non-voting shares, they shall offer the shares the subject of
the Transfer Notice to all Shareholders (other than to
employees, which for the avoidance of doubt shall not include
the Senior Managers) on a pro rata basis and Article 11.12
shall be modified accordingly.
17.5 In the event that as a result of the operation of Article 12
relating to any of Articles 12.1.1 to 12.1.4 (Compulsory
Transfers), Apax or Amadeus shall acquire any shares in the
Company from Xxxxx, which, within 3 months of the date of this
Agreement, Apax or Amadeus sell Apax and Amadeus agree to pay
to Xxxxx (in aggregate) 50% of such sum (if any) as equals any
excess between the Transfer Price paid by Apax or Amadeus (in
accordance with Article 12) and the price per share received
by Apax or Amadeus (less sale costs) on such subsequent sale.
17.6 Notwithstanding the provisions of this clause 17, the Initial
Investors may transfer up to 25% of each of their shares in
the Company to any non-Trade Investor provided always that
such transfer takes place within 22 weeks of Completion and
provided always that such transferee is acceptable to the
Company (such acceptance not to be unreasonably withheld or
delayed). For the avoidance of doubt, any of KfW or other Apax
related funds are deemed acceptable transferees. The Senior
Managers, Xxxxx, Amadeus and/or Apax (as appropriate) hereby
waive any rights of pre-emption (whether arising under this
Agreement, the Articles, or otherwise) on any transfer of
shares by Apax pursuant to this clause 17.6.
17.7 Notwithstanding any provision of this Agreement (as between
the parties apart from the Company) or the Articles to the
contrary, no shares shall be issued or transferred to a person
who is not already a party to this Agreement, unless that
person has already executed a Deed of Adherence by which he is
treated as a Senior Manager or an Investor or a Strategic
Investor (as the case may be) or unless that person is an
employee of the Group (but not a Senior Manager) purchasing
shares pursuant to the Existing Schemes (or any future
employee share scheme of the Company) or pursuant to clause
18.
17.8 All executed Deeds of Adherence shall be delivered to and held
by the Company.
18. MANAGEMENT AND EMPLOYEE SHARES(6)
18.1 It is the intention of the Company to sell in aggregate XXX
Series A Voting Shares at a price of $3.13 to the Managers and
employees of the Group which figure includes the Managers'
Subscription Shares.
----------------------
(6) Confidential treatment for various items in this section
requested by Xxxxx Networks N.V.
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18.2 In respect of shares offered to employees of the Group, they
will be asked to commit to purchase and pay the subscription
monies within three months of Completion.
18.3 The offer of shares to employees of the Group (excluding the
Managers) will be made on terms acceptable to the Initial
Investors, and in particular but without limitation, that the
shares are held by one trust on behalf of all such employees
such trust to include powers of sale. It is further intended
that the Existing Scheme rules be altered such that there is
no accelerated vesting on a change of control of the Company.
18.4 The Board will consider granting options relative to the
number of shares purchased.
18.5 The Board will consider the establishment of an employee
benefit trust empowered to buy shares from employees leaving
the Group and for sale to new recruits.
18.6 Exercise of options granted and to be granted under the
Existing Schemes will be conditional on the option holder
discharging all National Insurance liability of the Company.
18.7 It is intended that the Company shall have XXX share options
available to grant (to include that part of the Existing
Schemes currently unallocated).
18.8 Xxxxx hereby agrees to fully indemnify the Company against any
National Insurance liability the Company may incur in respect
of the Xxxxx Networks NV 1993 Stock Plan and/or the Xxxxx
Networks NV 1993 Employee Stock Purchase Plan.
19. INVESTOR'S CONSENT
19.1 Where this Agreement provides that any particular transaction
or matter requires the consent, approval or agreement of the
Investors or Xxxxx such consent, approval or agreement must be
given in writing and may be given subject to such terms and
conditions as the Investors or Xxxxx may impose and any breach
of such terms and conditions by any person subject thereto
shall ipso facto be deemed to be a breach of the terms of this
Agreement.
19.2 If the consent, approval or agreement of an Investor or Xxxxx
is required under more than one provision of this Agreement
for any one transaction or matter then any consent, approval
or agreement given in relation to that transaction or matter
by the Investor or Xxxxx shall be deemed to cover all
consents, approvals or agreements required for that
transaction or matter unless otherwise specified by the
relevant Investor.
20. SALE OR LISTING(7)
20.1 It is the parties' mutual objective to achieve a Listing of
the Company.
20.2 In the event of the right of Shareholders to sell shares on a
Listing then in relation to the first XXX shares (subject to
adjustment upward and downward - to reflect any subdivision,
consolidation or other capital reorganisation in relation to
the Ordinary
----------------------
(7) Confidential treatment for various items in this section
requested by Xxxxx Networks N.V.
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Shares after the date hereof but excluding any conversion of
the Convertible Shares) to be allocated to Shareholders for
sale the Initial Investors (pro rata to shareholdings) shall
have prior rights of sale and any balance thereafter shall be
dealt with pro rata to shareholdings. It is understood by the
Senior Managers that save in exceptional circumstances IPO
underwriters and investors will wish to restrict the sale of
shares by the Managers to whatever level they regard as
reasonable and consequently may allow the Managers to sell no
more than a nominal amount of their shareholdings.
20.3 Subject to clause 20.4, if a sale of the entire issued share
capital of the Company is proposed at a price of less than XXX
per share (subject to adjustment upward and downward - as the
case may be- to reflect any subdivision, consolidation or
other capital reorganisation in relation to the shares after
the date hereof) (prior to any conversion of Convertible
Shares) then the decision of whether a sale should proceed
shall be determined by the independent directors (who are not
the CEO or Nominated Directors). The independent directors
shall have regard to the effect of the sale on Xxxxx provided
that no special consideration shall be given to the position
of Xxxxx if on such sale it shall receive a gross
consideration at least to equal to its Original Basis.
"ORIGINAL BASIS" for this purpose shall mean XXX less the
consideration received on all sales of shares by Xxxxx
following Completion.
20.4 In the event that the proposed sale referred to in clause 20.3
is to an associate of Apax then the decision as to whether the
sale should proceed (on the terms proposed in clause 20.3)
shall be determined by the Board (save for the Apax Director).
21. DURATION OF OBLIGATIONS
21.1 On a Listing the provisions of this Agreement shall cease to
have effect except that the parties' accrued rights and
obligations shall not be affected.
21.2 When Xxxxx, a Senior Manager or an Investor ceases to hold
shares Xxxxx, the Senior Manager or the Investor (as the case
may be) shall cease to be party to this Agreement except that
any accrued rights and obligations shall not be affected.
22. ENFORCEMENT OF THE COMPANY'S RIGHTS
If it appears that any Senior Manager or any associate of a
Senior Manager (in whatever capacity) is in breach of any
obligation which he owes to any company in the Group (whether
under this Agreement or otherwise), then the conduct of the
right of action of such company in respect thereof shall be
passed to the Nominated Directors (or to a committee of the
Board selected by them) who shall have full authority to
negotiate, litigate and settle any claim arising and the
Senior Managers and the Company shall take all reasonable
steps within their power to give effect to the provisions of
this clause 22.
23. ANNOUNCEMENTS
23.1 No announcement in relation to the transactions contemplated
by this Agreement shall be made without the written consent of
the Nominated Directors, except that an announcement
previously consented to may be repeated by any of the parties.
It is the intention of Xxxxx, Apax and the Company to agree
post Completion press
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releases. Save as agreed, the parties shall keep the terms of
this Agreement confidential.
23.2 Each of the Shareholders undertakes to each of the other
Shareholders and the Company that he will not any time hereafter use or
divulge or communicate to any person other than officers or employees
of the Company whose province it is to know the same or on the
instructions of the Board any Confidential Information which may come
to his knowledge and he shall use all reasonable endeavours to prevent
the publication or disclosure of any Confidential Information and these
obligations shall continue to apply after that Shareholder shall cease
to be a party to this Agreement or otherwise involved in the affairs of
the Company without limit in point of time but shall cease to apply to
information which shall come into the public domain other than by a
breach of this clause or which for any other reason, other than through
the default of that Shareholder, shall have ceased to be confidential.
23.3 The Investors and Xxxxx shall not without the prior approval of
the Board disclose Confidential Information to any third party. For the
avoidance of doubt, and subject to the provisions of this clause 23, no
such consent shall be required for the making of any announcement or
communication relating to this Agreement or the Group by an Investor or
Xxxxx solely to its investment bankers, accountants, legal counsel,
employees and lenders (and in the case of the Initial Investors to
their investment partners), in each case only where such persons or
entities are, in turn under appropriate non-disclosure obligations.
23.4 Each Shareholder may disclose information about the Company or
this Agreement as required by:
23.4.1 the London Stock Exchange or other recognised
investment exchange;
23.4.2 any regulatory authority to which the relevant
Shareholder is subject; or
23.4.3 law.
24. COSTS
The Company shall pay the costs and expenses of the Investors in
connection with the negotiation, preparation, execution and performance
of this Agreement relating to the subscription for shares hereunder
(which shall not be deemed to include implementation of clause 18) and
all documents referred to in it, subject to a cap of $150,000 plus VAT
and disbursements.
25. GENERAL PROVISIONS
25.1 A variation of this Agreement is valid only if it is in
writing and signed by or on behalf of each party.
25.2 The failure to exercise or delay in exercising a right or
remedy provided by this Agreement or by law does not
constitute a waiver of the right or remedy or a waiver of
other rights or remedies. No single or partial exercise of a
right or remedy provided by this Agreement or by law prevents
further exercise of the right or remedy or the exercise of
another right or remedy.
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25.3 The parties rights and remedies contained in this Agreement
are cumulative and not exclusive of rights or remedies
provided by law.
25.4 Except to the extent that they have been performed and except
where this Agreement provides otherwise, the Warranties and
obligations contained in this Agreement remain in force after
Completion.
25.5 Nothing contained in this Agreement is to be construed as
creating a partnership between any of the parties.
25.6 If there is any conflict or inconsistency between the
provisions of this Agreement and the Articles, this Agreement
prevails.
25.7 The invalidity, illegality or unenforceability of any
provision of this Agreement does not affect the continuation
in force of the remainder of this Agreement.
25.8 This Agreement shall be binding upon and shall enure for the
benefit of the successors and assigns and personal
representatives (as the case may be) of each of the parties
hereto.
25.9 This Agreement shall supersede all (if any) previous
agreements and understandings between the parties and
(together with the Articles and the other agreements and
documents referred to in this Agreement) represents the entire
agreement between the parties hereto in relation to all
matters the subject matter hereof.
25.10 Save as otherwise herein expressly provided neither the
Company nor Xxxxx nor any of the Senior Managers, nor the
Initial Investors shall be entitled to assign or otherwise
transfer any of its or his rights and obligations under this
Agreement (save where this is to a permitted transferee in
accordance with Article 11.9 of the Articles) without the
prior written consent of non-assigning parties.
25.11 The parties hereto shall, and shall use their respective
reasonable endeavours to procure that any necessary third
parties shall, do and execute and perform all such further
deeds, documents, assurances, acts and things as any of the
parties hereto may reasonably require by notice in writing to
the others to carry the provisions of this Agreement and the
Articles into full force and effect.
25.12 This Agreement may be executed in any number of counterparts,
each of which when executed and delivered is an original, but
all the counterparts together constitute the same document.
25.13 The parties hereby agree that the Exhibit has been attached to
this Agreement for the purposes of the proper construction and
interpretation of Article 4.2.7 of the Articles.
26. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
A person who is not a party to this Agreement may not enforce any
term of this Agreement. The parties agree that the Contracts
(Rights of Third Parties) Act 1999 shall not apply to this
Agreement or to any agreement or document entered into pursuant to
this Agreement.
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27. NOTICES
27.1 Any notice or other communication under or in connection with
this Agreement shall be in writing and shall be delivered
personally or sent by first class post in a pre-paid envelope
(and air mail if overseas) or by telefax, to the party due to
receive the notice or communication at its address set out in
this Agreement or such other address as a party may specify by
notice in writing to the others.
27.2 In the absence of evidence of earlier receipt, any notice or
other communication shall be deemed to have been duly given:
27.2.1 if delivered personally, when left at the address
referred to in clause 27.1;
27.2.2 if sent by mail other than air mail, two days after
posting it;
27.2.3 if sent by air mail, six days after posting it; and
27.2.4 if sent by telefax, on completion of its
transmission, provided that the sender's machine has
generated a message confirming that the entire
message has been successfully transmitted.
28. GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by and construed in accordance with
English law and the parties hereto irrevocably submit to the
non-exclusive jurisdiction of the English courts.
EXECUTED the day and year first before written.
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SCHEDULE 1
(The Senior Managers)
SCHEDULE 2
(Particulars of the Company and Subsidiary)
SCHEDULE 3
(Written Resolution)
SCHEDULE 4
(Principal Warranties)
SCHEDULE 5
(Management Warranties)
SCHEDULE 6
SCHEDULE 7
(Properties)
SCHEDULE 8
(Completion Accounts)
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SIGNED for and on behalf of RED-M )
(COMMUNICATIONS) LIMITED in the presence of: ) /s/ Xxxxxxx X. Xxxxxx
)
SIGNED by XXXXXXX XXXXXX in the presence of: )
) /s/ Xxxxxxx X. Xxxxxx
SIGNED by XXXXX XXXXX in the presence of: )
) /s/ Xxxxx Xxxxx
SIGNED by XXXXX XXXXX in the presence of: )
) /s/ Xxxxx Xxxxx
SIGNED for and on behalf of XXXXX )
NETWORKS NV in the presence of: ) /s/ Xxxxxxxxxxx Xxxxxxx
EXECUTED for and on behalf of APAX )
PARTNERS EUROPE MANAGERS )
LIMITED acting in its capacity as )
manager of APAX EUROPE V-A, L.P. )
by: ) /s/ Xxxxxxx Xxxxxx
Authorised Signatory
Authorised Signatory
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46
EXECUTED for and on behalf of APAX )
PARTNERS EUROPE MANAGERS )
LIMITED acting in its capacity as )
manager of APAX EUROPE V-B, L.P. )
by: ) /s/ Xxxxxxx Xxxxxx
Authorised Signatory
Authorised Signatory
EXECUTED for and on behalf of APAX )
PARTNERS EUROPE MANAGERS )
LIMITED acting in its capacity as )
manager of APAX EUROPE VC, )
GMBH & CO. KG by: ) /s/ Xxxxxxx Xxxxxx
Authorised Signatory
Authorised Signatory
EXECUTED for and on behalf of APAX )
PARTNERS EUROPE MANAGERS )
LIMITED acting in its capacity as )
managers of APAX EUROPE V-D, L.P. )
by: ) /s/ Xxxxxxx Xxxxxx
Authorised Signatory
Authorised Signatory
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EXECUTED for and on behalf of APAX )
PARTNERS EUROPE MANAGERS )
LIMITED acting in its capacity as )
manager of APAX EUROPE V-E, L.P. )
by: ) /s/ Xxxxxxx Xxxxxx
Authorised Signatory
Authorised Signatory
EXECUTED for and on behalf of APAX )
PARTNERS EUROPE MANAGERS )
LIMITED acting in its capacity as )
manager of APAX EUROPE V-F, C.V. )
by: ) /s/ Xxxxxxx Xxxxxx
Authorised Signatory
Authorised Signatory
EXECUTED for and on behalf of APAX )
PARTNERS EUROPE MANAGERS )
LIMITED acting in its capacity as )
manager of APAX EUROPE V-G, C.V. )
by: ) /s/ Xxxxxxx Xxxxxx
Authorised Signatory
Authorised Signatory
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EXECUTED for and on behalf of )
AMADEUS CAPITAL PARTNERS )
LIMITED acting in its capacity as ) /s/ Xxxx X. Xxxxxx
manager of AMADEUS II A by: )
Authorised Signatory
Authorised Signatory
EXECUTED for and on behalf of )
AMADEUS CAPITAL PARTNERS )
LIMITED acting in its capacity as ) /s/ Xxxx X. Xxxxxx
manager of AMADEUS II B by: )
Authorised Signatory
Authorised Signatory
EXECUTED for and on behalf of )
AMADEUS CAPITAL PARTNERS )
LIMITED acting in its capacity as ) /s/ Xxxx X. Xxxxxx
manager of AMADEUS II C by: )
Authorised Signatory
Authorised Signatory
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49
EXECUTED for and on behalf of )
AMADEUS CAPITAL PARTNERS )
LIMITED acting in its capacity as )
manager of AMADEUS II GMBH & CO KG by: ) /s/ Xxxx X. Xxxxxx
Authorised Signatory
Authorised Signatory
EXECUTED for and on behalf of )
AMADEUS CAPITAL PARTNERS )
LIMITED acting in its capacity as ) /s/ Xxxx X. Xxxxxx
manager of AII AFFILIATES by: )
Authorised Signatory
Authorised Signatory
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