Exhibit 10.1(b)
[TRAQUEUR logo]
a French public share corporation (societe anonyme) with a Management Board
(Directoire) and a Supervisory Board (Conseil de surveillance) and with a
capital of (Euro)422,955 Registered office: 00, Xxxxx xx xx Xxxxxxxxxx -
00000 Xxxx-xxx-Xxxxxxxxxx
412 027 492 Commercial Register of Nanterre
AGREEMENT TO ISSUE CONVERTIBLE BONDS
BETWEEN THE UNDERSIGNED:
TRAQUEUR, a French public share corporation (societe anonyme) with a capital of
(euro)423,120, having its registered office in Issy-les-Moulineaux (92130), 00
Xxxxx xx xx Xxxxxxxxxx, registered under the number 412 027 492 at the
Commercial Register of Nanterre, duly represented by Xx. Xxxxxxxx Xxxxxxx in his
capacity as Chairman of the Management Board,
Hereafter, the "Issuer" or the "Company",
of the first part,
- Xx. Xxxx-Xxxxxxx XXXXXXX, residing 000 xxx xx Xxxxxxxxx - 00000 Xxxxx, married
under the matrimonial regime of community of property1
- Xx. Xxxxxxxx XXXXXXX, residing 00 xxx Xxxxxxxxx - 00000 Xxxxxx, married under
the matrimonial regime of community of acquired xxxxxxxx0 hereafter referred to
together as the "Directors"
- Xx. Xxx XXXXXXX, residing 000 xxx xx x'Xxxxxxxxxx - 00000 Xxxxx, married under
the matrimonial regime of community of acquired property. Mssrs. Xxxxxxxx
Xxxxxxx and Xxx Xxxxxxx hereafter referred to together as the "Management Board"
of the second part,
- LOJACK, INC. a Delaware corporation registered under FED ID number 00-0000000,
duly represented by Xx. Xxxxxx X. Xxxxx, duly empowered for the purposes of the
present,
- SIGEFI VENTURES GESTION, a French public share corporation with a capital of
(Euro)422,670, having its registered office in Lyon (69006), 139 rue Vendome,
registered under the number is 420 732 661 RCS Lyon, acting as a management
company in the name and on behalf of SIPAREX VENTURES 1, ING (F) ACTIONS
INNOVATION 2, UNIINNOVATION 1, and acting furthermore as delegated manager of
unlisted assets of the "FCPI" (venture capital fund specialized in innovative
companies) INDOCAM INNOVATION 1, represented by Xx. Xxxxxx XXXXX, is duly
empowered for the purposes of the present,
- SIPAREX CROISSANCE, a French limited partnership with share capital, with a
capital of (Euro)65,683,095, having its registered office at 139 rue Vendome,
96006, registered under the number 312 056 641 at the Commercial Register of
Lyon, represented by its management company SIGEL, a French simplified
joint-share company with a capital of (Euro)1,891,336, having its registered
office at 139 rue Vendome, 69006 Lyon, registered under the number 331 595 587
at the Commercial Register of Lyon, itself represented by Xx. Xxxxxx XXXXX, duly
empowered for the purposes of the present,
------------------------------------------------------------------------------
- regime de communaute universelle::legal marriage contract, as defined by the
Code Civil, which stipulates that the property of both spouses, as acquired
before and after the marriage, belongs to both.
2 regime de communaute de biens reduite aux acquets: legal marriage contract
under which each spouse's individual property prior to the marriage remains his
or her own, whereas property acquired, either jointly or individually, during
the marriage (with the exception of certain personal items such as clothing or
tools of a trade which are defined by article 1404 of the Code Civil) becomes
community property.
2
- SIPAREX DEVELOPPEMENT, a French limited partnership with share capital, with a
capital of (Euro)34,009,245, having its registered office at 000 xxx xx Xxxxxxxx
Xxxxx-Xxxxxx, 00000 Xxxxx, represented by its management company SIGEFI, a
French simplified jointshare company with a capital of (Euro)1,891,336, having
its registered office at 139 rue Vendome, 69006 Lyon, registered under the
number 331 595 587 at the Commercial Register of Lyon, itself represented by Xx.
Xxxxxx XXXXX, duly empowered for the purposes of the present,
- CREDIT LYONNAIS PRIVATE EQUITY, a French public share corporation with a
Management Board and a Supervisory Board, with a capital of (Euro)8,000,000,
having its registered office in Paris (75116), 00/00 xxxxxx xx xx Grande Armee,
registered at the Commercial Register of Paris under the number B 428 711 196,
represented by Xx. Xxxxxx XXXXXXX, acting as a management company in the name
and on behalf of the "FCPR" (authorized venture capital fund) CL Developpement 1
and of the "FCPI" (see above) Credit Lyonnais Innovation 1,
- VIVERIS MANAGEMENT, a French simplified joint-share company with a capital of
(Euro)91,500, having its registered office in Marseille, registered at the
Commercial Register of Marseille under the number 432 544 773, represented by
Mr. Marc VILLECROZE ABDELOUHAB, duly empowered for the purposes of the present,
acting as a management company in the name and on behalf of the "FCPI"
INNOVERIS,
- BNP PARIBAS DEVELOPPEMENT, a French simplified joint-share company with a
capital of (Euro)68,000,000, having its registered office in Paris (75009), rue
Chauchat, registered at the Commercial Register of Paris under the number B 348
540 592, represented by Xx. Xxxxxx ALHEN, duly empowered for the purposes of the
present. hereafter referred to collectively as the "Subscribers", acting without
joint and several liability, on the third part,
AND
- Xx. Xxxxxx XXXXXX, residing 00 xxxxxxxxx Xxxxxxxxxx, 00000 Xxxxx, married
under the matrimonial regime of community of acquired property,
- Mr. Herve RIPAULT, residing 0 xxxxxxxxx xxx Xxxxxxx, 00000 Xxxxxxx-xxx-Xxxxx,
married under the matrimonial regime of separate property.3
- MERCURE EPARGNE LONGUE S.A., a "SICAV" (variable capital investment company),
having its registered office at 0-0 Xxxx Xxxxx xxx Xxxxxx-Xxxxxxx, 00000 Xxxxx,
registered at the Commercial Register of Paris under the number 438 848 848,
represented by Ms. Anouk BARA, duly empowered for the purposes of the present
through a proxy signed by Xx. Xxxxxxx TREBOUTA,
- Xx. Xxxx XXXXXXX, residing 00 xxx xx Xxxxxxxx, 00000 Xxxxx, married under the
matrimonial regime of separate property hereafter referred to as the "Group A
Subscribers", acting without joint and several liability,
on the fourth part,
--------------------------------------------------------------------------------
3 separation de biens: legal marriage contract which recognizes only two estates
in the marriage, that of the husband and that of the wife, ie there is no
community property.
3
Hereafter referred to individually as a "Party" and collectively as the
"Parties"
RECITALS:
To date, the allocation of the share capital and voting rights of the company is
as follows:
Shareholder Shares Category ORA (Bonds BSA / BSPCE (Share
Redeemable Share Warrants for
in shares) 1-2 Entrepreneurs
Directors 7,262 A 1,310
Others 10,109 A 108 1,598
Total Founders 17,371 - 108 2,908
FCPI CLI 1,138 C 57
BNP P-D 848 C 38
Tracker B 44
LoJack 2,232 B 1,116
EDSN 2,823 C 335 200
FPCR CL CDI 670 C 335
FCPR Siparex VI 1,140 C 570
Siparex Croissance 44 C 22
Siparex Dev. 22 C 11
FCPI ING (F) AI 1 156 C 78
FCPI ING (F) AI 2 312 C 156
FCPI 1 1 1 446 C 223
FCPI U 11 112 C 56
Innoveris 894 C 447
Total 10,837 3,444
Subscribers
TOTAL 28,208 - 3,552 3,152
A four-month delay in the commencement of commercial operations with respect to
the business plan forecast caused a significant decrease in the Company's
available liquid assets.
Therefore, the Management Board agreed to make its best efforts, vis-a-vis
Subscribers, to recruit, before April 30, 2003, an executive officer in charge
of directing operations. After a satisfactory trial period, this executive
officer shall become a member of the Management Board.
The professional qualifications of this executive officer were defined by the
Management Board and presented to the members of the Supervisory Board at the
meeting of February 3, 2003, the minutes of which are attached as Appendix 1 to
the present.
However, the Parties are persuaded of the market's high expectations, the
necessity of meeting these demands, and thus of ensuring adequate funds for the
commencement of the Company's operations.
Accordingly, the Parties agree on the necessity of setting up short-term
financing of the business, it being stipulated that the business's final
financing requirement shall call for a new capital increase by the Company,
which will be carried out definitively at the end of August 2003
at the latest. For that purpose, the Company currently seeks a Third-party
Investor (as such term is defined below in Article 3.1.2).
4
In order to structure this short-term financing, the Parties approved, at the
Extraordinary General Shareholders Meeting on February 21, 2003, the first
resolution authorizing the Management Board to proceed with the issue of bonds
convertible into Company shares, with the upholding of shareholders'
preferential subscription rights. At a General Meeting the same day, the
bondholders revoked the third resolution consisting in the waiver, by Category
01 and 02 bondholders, of the system of reservation of their preferential
subscription rights with regard to the issue of convertible bonds.
However, in order to facilitate the present issue of convertible bonds, the
holders of Category 01 and 02 ORA (bonds redeemable in shares), as well as the
holders of share warrants and BSPCE (share warrants for entrepreneurs), decided
individually to relinquish their reserved rights.
In return, the Group A Subscribers decided to limit the total subscription of
Group A Shareholders to eight hundred and twenty-six thousand nine hundred and
ninety-five euros (Euro)826,995), the balance of the issue, one million one
hundred and seventy-three thousand euros (Euro)1,173,000) being subscribed
entirely by the Subscribers (Category B or C Shareholders) holding reducible and
irreducible preferential subscription rights.
The Management Board resolved at its meeting of February 27, 2003 (the minutes
of which are attached as Appendix 2) to use the authorization by the
extraordinary shareholders meeting and to proceed with the issue of convertible
bonds. The Management Board consequently sent to the shareholders, by letter of
February 28, 2003, an offer for the subscription of convertible bonds (a copy of
which is attached as Appendix 3) informing them of the commencement of the
subscription period, from Friday, March 7, 2003 to Thursday, March 20 included.
The Company's shareholders benefit from reducible and irreducible preferential
subscription rights, under which one hundred (100) old shares entitle them to an
irreducible right to four hundred and seventy-two point sixty-eight (472.68)
convertible bonds.
ARTICLE 1 - PURPOSE OF THE CONVERTIBLE BOND ISSUE
The convertible bond issue made by the Issuer is for a maximum amount of one
million nine hundred and ninety-nine thousand nine hundred and ninety-five
(1,999,995) euros, in the form of one hundred and thirty-three thousand one
hundred and thirty-three (133,133) bonds convertible into Company shares, at the
Bondholder's option, for a nominal unit price, issue premium included, of
fifteen (15) euros, under the conditions set out in Article 4 below (hereafter,
the "Convertible Bonds"), it being understood that the holders of the bonds
redeemable in Company shares ("ORA") and the holders of share warrants ("BSA")
and of share warrants for entrepreneurs ("BSPE") have waived their reserved
rights.
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES
2.1 General Representations
Each regularly constituted individual or legal entity signatory of the Agreement
hereby represents and warrants to the other signatories:
- that it is a company or a legal entity validly incorporated under the
applicable law and acting in compliance with such applicable law,
- that it, or its permanent representative, is duly empowered and has the
capacity to execute and implement the Agreement,
- that the execution and the implementation of the obligations under the
Agreement have been duly authorized by its competent bodies and neither do nor
shall cause breach, termination or modification of any provision of any
contracts or agreements to which it is a party and that the Agreement does not
contradict the terms of any of these contracts or agreements.
5
2.2 Directors' Representations on the Company's Accounts
2.2.1 The Directors represent that the Company's accounts for the
period ending September 30, 2002, (i) were prepared in conformity with generally
accepted French accounting principles, (ii) duly, correctly and fairly represent
the financial situation of the Company as at September 30, 2002 (iii) were
unconditionally approved by the Management Board, and (iv) were submitted for
inspection by the Company's statutory auditor.
2.2.2 The Company further warrants:
- that all capital items and claims set out on the balance sheet indeed existed
as at September 30, 2002;
- that the Company indeed owns, without restrictions or reserves, all tangible
and intangible assets set out on the balance sheet or inventories, that these
assets are free of any mortgage, collateral, pledge or any other real rights4,
and that it is not encumbered by any impediment, servitude or restriction which
could limit its ownership or beneficiary ownership rights, except with respect
to the capital items set out in the LoJack license.
- that, particularly, the trademarks, patents, industrial designs and utility
models mentioned on its balance sheet or inventory were duly filed, registered
and published at the Institut National de la Propriete Industrielle (national
institute of industrial property), and that the corresponding taxes and fees are
duly acquitted to date;
- that the presentation and evaluation of the assets and liabilities on the
balance sheet of September 30, 2002 comply with applicable legal, accounting and
fiscal regulations and that the capital items susceptible to depreciation due to
events occurring of ongoing at September 30, 2002, were duly subject, at that
date's cut-off control, to adequate provisions to record such depreciation, if
any;
- that the Company, in order in insure its property and operations against the
risks to which they may be exposed, and to insure against material and personal
damage by a third party, has taken out an insurance policy such as would any
prudent merchant or industrialist and that it is up-to-date with the payment of
its insurance premiums;
- that the Company is bound by no commitment of backing, aval or guarantee for
the execution of contracts by a third party (or by its shareholders), its
directors or employees;
- that there is no litigation, legal action, or judicial or administrative
proceeding concerning the Company, its operations, securities, employees or
property, for which the amounts claimed exceed (euro) 15,000 and in any event,
these were covered by adequate provisions in the balance sheet of September 30,
2002;
- that the Company is neither a partner to an undisclosed partnership or a
general partnership, nor the sole shareholder of an incorporated sole
proprietorship, nor a member of a "grouping of mutual economic interest"5, and
has no holding of more than 10% of the share capital or voting rights in another
company, with the exception of 48.4% of the share capital and voting rights in
LoJack International Benelux Sprl;
- that the Company was, at September 30, 2002, up to date with its fiscal and
social declarations and had paid or adequately provided for all faxes, fees and
contributions required by the applicable regulations, and that it had not, at
this date, received notification of any adjustment or inspection by tax or
social security (URSSAF) authorities, due to inadequate provisions on its
September 30, 2002 balance sheet;
- that it has strictly complied with economic and competition regulations, as
well as with the legal or regulatory provisions applying to hygiene, safety and
environmental protection, and that no certificate of offence relating thereto
has been drawn up against it;
6
- that it is not in infringement of customs or exchange regulations with regard
to any commercial or financial transactions it has entered into to this day, and
that no certificate of offence relating thereto has been drawn up against it;
- that the fixtures and installations in the buildings used for its operations
are in conformity with the regulations applying to its business activity;
- that all employment contracts comply with the provisions of applicable laws
and collective agreements:
- that, generally speaking, with the exception of the LoJack license agreement
and the agreements executed with law enforcement officials, the Company has not
entered into any agreements with its suppliers, clients or other third parties
subjecting it to the overriding regime of ordinary law (French administrative
law), notably with respect to the exclusive nature of these agreements;
- that the Company has received no notice of offense, even contested, which
could result in an order forbidding it partially or totally to carry out
operations, or restricting operations, or devaluating its assets;
- that it has carried out, since this date, no transaction outside of the normal
everyday management of its operations, and has taken no decision which could
bring about a negative change in its financial or commercial situation;
- that it has proceeded with no allocation of assets, of any kind whatsoever, to
shareholders or directors, since this date.
2.2.3 None of the above representations omits to disclose any important
fact, the disclosure of which would be material to the Subscribers' awareness of
the Company's assets and undertakings and of its financial result. Otherwise,
the Subscribers are authorized to request early redemption of the Convertible
Bonds under the conditions set out below in Article 4.4.
ARTICLE 3 - COVENANTS OF THE PARTIES
3.1 Covenants of Holders of Securities giving access to the share capital on
maturity
The Directors undertake that each individual or legal entity holding securities
giving access, on maturity, to the Company's share capital has relinquished its
rights to subscribe to additional Convertible Bonds.
--------------------------------------------------------------------------------
4 droit reel : in civil law, a right that is attached to a thing rather than a
person (the right of ownership...may be burdened with a real right in favor of
another person as allowed by law Louisiana Civil Code)
A real right is not restricted to real property since it can also be attached to
movable property. Real rights include ownership, use, pledge, usufruct,
mortgage, and predial servitude.
5 Groupement d'Interet Economique (GIE): legal entity created under French Law
in 1967 in order to facilitate the constitution of collaborative ventures
between companies.
7
3.2 Covenants of Subscribers
Under the present Agreement, the subscribers subscribe to the number of
convertible bonds set out in the table in Article 3.3 below, by cash payment for
the corresponding amount, and undertake to fully pay up the amount of their
subscription, excluding LoJack, which subscribes in compensation, with one or
several certain, liquid and payable claims against the Company.
In the event the holders of Class B or C Traqueur shares who are not signatories
to the present Agreement wish to exercise their preferential subscription rights
within the framework of the Convertible Bond issue, the Subscribers undertake to
reduce the individual amount of their subscription proportionally to the amounts
indicated next to their names in the table below, so that the total amount of
this subscription may not exceed a total of seventy-eight thousand two hundred
(78,200) Convertible Bonds for a total amount of one million, one hundred and
seventy-three thousand (1,173,000) euros.
Each holder of Class B or C shares which is not a signatory to the present
Agreement and which chooses to exercise its preferential subscription right at
the Convertible Bond issue must first adhere to the present Agreement in writing
and without reserves by signing a deed of accession in terms identical to those
of the sample attached as Appendix 4, the Company undertaking vis-a-vis the
Subscribers to accept from such holders of Class B or C shares only those
subscriptions accompanied by such duly signed deed.
3.3 Covenants of Directors and Group A Subscribers
The Directors hereby declare (i) that they do not exercise their preferential
subscription rights at the Convertible Bond issue, and (ii) that they either
have assigned or shall assign their preferential subscription rights to the
benefit of Group A subscribers, or else have relinquished or shall relinquish
their rights, it being specified that the Management Board shall recap such
assignment or relinquishment of preferential subscription rights in its minutes
reporting the closure and thecompletion of the Convertible Bond issue.
Group A subscribers which are signatories to the present Agreement respectively
subscribe to the number of Convertible Bonds set out next to their names in the
table below.
Each subscriber of Group A which is not a signatory to the present Agreement and
which chooses to exercise its preferential subscription rights at the
Convertible Bond issue must first expressly adhere in writing and without
reserve to the present Agreement in signing the adhesion document in the
identical terms to those shown in Appendix 4. The Company undertake vis-a-vis
the Subscribers only to accept from Group A subscribers subscriptions
accompanied by the abovementioned adhesion document signed and within the limit
of fifty five thousand one hundred and thirty-three Convertible Bonds for a
total amount of eight hundred and twenty-six thousand nine hundred and
ninety-five (826.995) euros.
Subscribers Irreducible Reducible Amounts
Preferential Preferential Subscribed
Subscription Subscription Total (in (Euro))
Rights Rights
LoJack 5,847 17,081 22,928 343,920
Sigefi and SVG Funds 9,811 13,117 22,928 343,920
FCPI CLI 0 0 0 0
CLCD 1 7,450 10,786 18,236 273,540
BNP Developpement 2,220 2,699 4,919 73,785
Innoveris 2,343 6,846 9,189 137,835
Sub-total of Subscribers 27,671 50,529 78,200 1,173,000
8
Xx. Xxxxxx Xxxxxx 3,967 9,433 13,400 200,100
Mr. Herve Ripault 761 573 1,334 20,010
Mercure Epargne Longue SA 1 11,656 11,657 174,855
Xx. Xxxx Xxxxxxx 1,853 388 2,241 21,975
Sub-total of Group A 6,582 22,050 28,632 429,480
Subscribers
Total 34,253 72,579 106,832 1,602,480
ARTICLE 4 - CHARACTERISTICS OF THE CONVERTIBLE BONDS
4.1 Duration of the Convertible Bond Issue
The Convertible Bonds shall be issued for a duration expiring July 1, 2005,
included. At the expiration of this duration, providing they have not already
been converted, the Convertible Bonds will be subject to a full cash refund.
Fifteen (15) days before this term, the Company will address to each holder of
Convertible Bonds still in circulation a notification by registered mail with
proof of receipt notifying them of the imminent term and of the option available
to them before this date to proceed with the conversion of all or part of their
Convertible Bonds.
4.2 Interest - Non-Conversion Premium
The Convertible Bonds will accrue an annual fixed interest of 5%,
non-capitalized and payable in fine, at the conversion date (in the proportion
of Convertible Bonds converted, in the event of partial conversion) or
redemption.
In the event of early redemption, whether obligatory or at the bearer's
initiative, under Article 4.4 the interest will be paid pro-rata according to
the number of days between the dates of subscription and redemption, repurchase
or conversion of the Convertible Bonds. This calculation will be made on the
basis of the 365-day year.
However, it is stipulated that where a Transaction is carried out as defined in
Article 5.1.2, the interest will cease to accrue from the date the conversion
ratio is determined and independently of the date upon which the owners of the
Convertible Bonds exercise their conversion rights.
Moreover, for each Convertible Bond not converted will be entitled, in addition
to redemption of the principal, to a non conversion premium calculated so as to
assure the owner of the Convertible Bond an annual actuarial remuneration equal
to seven and one-half per cent (7.5%). It should be noted that the interest runs
from the date of subscription of the Convertible Bonds until the date of
redemption.
4.3 Form of the Convertible Bonds
The Convertible Bonds will be issued only in nominative form. Ownership will
result from their inscription in book entry bearer form under the name of the
holder(s).
The Convertible Bonds will be inscribed in the company's corporate register and
will be negotiable from their issue.
The Convertible Bonds are transferable securities as set out in the shareholders
agreement executed among the Company's shareholders November 26, 2001
(hereafter, the "Shareholders Agreement") their transmission being consequently
subject to the provisions of this Shareholder Agreement, notably the pre-emptive
right.
9
The assignment or transmission of the Convertible Bonds, with regard to the
Company and third parties, will be carried out by the payment from one account
to another, upon the production of a transfer form signed by the assignor. Each
transfer of ownership of the Convertible Bonds shall entail the recipient to the
full rights and obligations attached to the Convertible Bonds as set out in the
Agreement.
4.4 Early Redemption
Each bond holder may request that its Convertible Bonds be immediately redeemed
at par, this redemption being increased by the amount of interest accrued and
the non-conversion premium in the following cases:
(i) Court decision commencing bankruptcy or liquidation proceedings against the
Company,
(ii) failure, even partial, by the Company, to satisfy an obligation pursuant to
the agreement to issue the Convertible Bonds,
(iii) failure by the company to pay an amount due, by the Directors or the
Management Board, to the Bondholders,
(iv) assignment of 100% of Company shares before July 31, 2003, under the
conditions set out below.
Each holder of Convertible Bonds must, in such case, notify the Company by
registered mail with proof of receipt, of its choice immediately to redeem the
total number of its Convertible Bonds.
ARTICLE 5- CONVERSION OF THE CONVERTIBLE BONDS
5.1 Conversion Right
5.1.1 Conversion Ratio
a) If the Transaction is carried out as set out in Article 5.1.2, the
Company will inform Bondholders (hereafter, the "Bondholders") of such
Transaction by registered mail with proof of receipt mail (hereafter,
the "Notification").
Upon receipt of this Notification, the Bondholders shall undertake to
request the conversion of the Convertible Bonds into new shares to be
issued by the Company under the conditions set out below.
b) By exception to 5.1.1 (a), should the Transaction (as set out in
Article 5.1.2 (a) below) be subscribed by a Third Party (as defined in
Article 5.1.2 (b)) for a total amount of at least three million
(3,000,000) euros, issue premium included, the Company has the option
of proposing to the Bondholders who so desire an early cash redemption
of their Convertible Bonds.
This option may be stipulated, if the Company so chooses, in the
Notification to the Bondholders, who then dispose of eight (8) days to
notify the Company if they intend to appeal this option of early
redemption.
Failure to reply within this timeframe shall constitute a refusal by
the Bondholders, who must then request the conversion of their
Convertible Bonds within eight (8) days, in accordance with the
conditions stipulated below.
(c) In the absence of a Transaction (as defined in Article 5.1.2 below)
or of an Extraordinary General Meeting (as defined in Article 5.1.3
below) before July 31, 2003,
10
the Bondholders shall be free, from August 1, 2003, to convert or to
opt for redemption at term, under the conditions set out below.
(d) In any event, the number of Convertible Bonds (N0) to be presented
for conversion into one Company share will be calculated by application
of the following formula:
N0 = (P*Nt)/(M+I)
Where:
"M" is the total amount of the bond issue,
"I" is the nominal amount of interest due by the Company at the date of
completion of the Transaction (as set out in Article 5.1.2 below) or at the date
of an Extraordinary General Meeting (as defined in Article 5.1.3 below),
"Nt" is the total number of Convertible Bonds issued,
"P" designates the issue price of a new share following the conversion of the
Convertible Bonds, to be determined by application of the formula under Article
5.1.2 below, according to the cases set out under
Articles 5.1.2 and 5.1.3.
5.1.2 Case 1: A capital increase before July 31, 2003
(a) If on July 31, 2003, at the latest, the Company reports a
definitive cash increase in the Company's capital to the benefit of one
or several Third Parties (as defined below in Article 5.1.2 (b)) of a
minimum amount of (Euro)1,000,000, including the issue premium
(hereafter, the "Minimum Amount"), (hereafter, the "Transaction"),
then:
P = p(1-d)
Where:
"p" designates the unitary subscription price, in cash, issue premium included,
for the share issued within the Transaction,
d will be equal to :
20% where the conversion is effected the 31 May 2003 at the latest
25% where the Transaction is completed between June 1 and 30, 2003
30% where the Transaction is completed between July 1 and 31, 2003
For example :
If the issue price per share within the Transaction carried out in May 2003,
seventy(70) days after the present Convertible Bond issue, is equal to 455 euros
and if the par value of the issue is 1.999.995 euros for 133.333 Convertible
Bonds issued, then
N0 = [(455-91)*99 755]/ [1.999.995+(1 510 673,32*(70/365)*5%)] = 24,0362
(b) For the purposes of the present Convertible Bond issue, an individual legal
entity shall be considered as a third party if it does not hold, at the time of
the Transaction, any transferable securities giving immediate or future access
to the capital of Traqueur (hereafter the "Third Party(ies)"):
11
- In the event the Transaction is completed for the Minimum Amount for the
benefit of two (2) Third Parties, these must each invest an amount of five
hundred thousand (500,000) euros, or if one of them invests less than that
amount (provided the amount is not less than two hundred thousand (200,000)
euros) then the other party must invest the remainder of the total Minimum
Amount.
- In the event the Transaction is carried out for the benefit of three (3) or
four (4) Third Parties, (i) the Third Parties must each invest an amount of five
hundred thousand (500,000) euros, and (ii) one of them must obligatorily be an
investment fund directed by a management company approved by the Trade
Commission ("Commission des operations de Bourse" i.e., the French SEC) in
compliance with the provisions of articles L. 214-2 and following the French
Monetary and Financial Code. The Transaction may in no case be subscribed and
paid up by more than four (4) Third Parties.
(c) The Third Party(ies) must furthermore, before the realization of the
Transaction, undertake to adhere to the Shareholder Agreement in its entirety.
(d) It is specified that neither of the following shall be taken into account
for the calculation of the Minimum Amount:
- the amount that could be invested by the those subscribers which shall in fact
have subscribed to the present Convertible Bond issue under the conditions
above,
- the amount corresponding to the share issue resulting from the conversion of
the Convertible Bonds.
(e) Requests for conversion must be made from July, 15 2003 at the earliest in
order that they be effective from August 1, 2003, it being stipulated that the
interest attached to the Convertible Bonds will cease to accrue from the date at
which the conversion ratio is determined in conformity with the application of
the above formulae and independently of the actual date upon which the
Bondholders exercise their conversion rights.
(f) In any case, the conversion ratio will not be superior to the par value of
the Convertible Bond divided by the par value of the Company share on the date
of conversion, i.e., on that date one share for one bond. Consequently, in the
event where N0 is inferior to 1, N0 shall be considered equal to 1.
(g) In the event of disagreement on the determination of N0 between the Company
and the Bondholders at a special meeting, the points of disagreement shall be
submitted by either party to an expert designated by the Tribunal de Commerce de
Paris who shall make a final determination of N0.
The expert will use his best efforts to accomplish this mission within
30 days from his designation. The expert may exercise all powers to
xxxxxxxxx X0, with respect to the above formulae, in such a way that
the number of new Company shares resulting will bedetermined.
The expert's conclusions will be definitive and without appeal. The
expert's fees will be paid equally between the Company, for one half,
and the Bondholders, for the other half. The expert will act as a
mediator and will enforce the dispositions under articles 1443 and
following of the new civil procedures code.
5.1.3 Case 2: Convening of an Extraordinary General Meeting of the Company
Shareholders before July, 31 2003
(a) If on July 15, 2003, at the latest, the Company addresses to the
Bondholders, either in person or by registered mail with proof of receipt, a
notification informing them of the convening of an Extraordinary General Meeting
of the Company Shareholders, to take place no later than July 31, 2003, the
agenda of which shall include a vote on the following:
12
(i) a resolution to proceed with a capital increase for a maximum
amount of three million (3.000,000) euros through the issue of shares,
with suppression of preferential subscription rights, for an amount of
one million (1,000,000) euros ("Resolution no. 1"), or
(ii) a resolution authorizing the Management Board to proceed with a
capital increase of a maximum amount of three million (3,000,000) euros
through the issue of shares, with suppression of preferential
subscription rights, for an amount of one million (1,000,000) euros
("Resolution no. 2"),
(iii) a resolution on a capital increase or authorizing the Management
Board to increase the capital by a maximum amount of three million
(3.000.000) euros through the issue of shares, with upholding of
preferential subscription rights ("Resolution no. 3"),
(hereafter, an "Extraordinary General Meeting"),
but where the completion of the Transaction cannot occur before July
31, 2003 and calls for a supplementary period of time until August 31,
2003, the Bondholders agree not to request the conversion of their
Convertible Bonds before August 15, 2003, for a conversion to be
effective September 1, 2003.
The conversion ratio of the Convertible Bonds will be established in
accordance with the procedure set out in Article 5.1.2 above.
If the Transaction is not completed before August 31, 2003, the
conversion ratio of the Convertible Bonds will be established in
conformity with the procedure set out in Article 5.1.4 below.
(b) Each party undertakes, acting without joint and several liability, to attend
the Extraordinary General Meeting and to vote for the adoption of Resolution no.
1, Resolution no. 2 or Resolution no. 3.
5.1.4 Hypothesis 3: The case of no capital increase before June 30, 2003
If by July 31, 2003, at the latest, (i) the Company has not held an
Extraordinary General Meeting, or if (ii) the termination of the Transaction has
not been reported, then:
N0 = 6,66
the Bondholders may, from August, 1 2003 until the term of the bond issue,
request the conversion of all or part of their Convertible Bonds. The remainder
of the Convertible Bonds unconverted will be redeemed pursuant to the provisions
of Article 4.2 below.
5.2 Means of exercising the conversion right
5.2.1 The Bondholders agree not to request the conversion of their Convertible
Bonds before July 15, 2003, for a conversion to be effective from August 1,
2003. By exception, the Convertible Bonds shall be convertible before this date
in the event a Transaction has been carried out.
5.2.2 In conformity with the conditions set out in Article 5.1.3, the
Bondholders agree, if an Extraordinary General Meeting is convened before July
31, 2003, not to request the conversion of their Convertible Bonds before August
15, 2003, for the conversion effective September 1, 2003.
5.2.3 Throughout the duration of the bond issue, requests for conversion shall
be delivered in person in exchange of a receipt, or by registered mail with
proof of receipt, to the registered office, accompanied by a subscription form
for new shares.
13
5.2.4 The release of the new shares will be offset against the debt securities
held in relation to the Convertible Bonds.
5.2.5 The new shares issued following the conversion will be of Class A, B, or
C, as defined in the Company's bylaws:
- Category A for the holders of class A shares at the day of the conversion of
the Convertible Bonds,
- Category B for the holders of class B shares at the day of the conversion of
the Convertible Bonds,
- Category C for the holders of class C shares at the day of the conversion of
the Convertible Bonds.
If the shares of a class other than A, B, or C are issued to the benefit of one
or several Third Party investor(s), it is agreed that the agreement to issue the
Convertible Bonds will be modified so that the new shares issued after the
conversion of the Convertible Bonds will be shares of the same class as those
issued for the profit of a Third Party investor under the Transaction.
The new shares shall entitle to rights from the first day of the relevant
financial period at the day of conversion. The surplus shares shall be, from
their creation, completely assimilated with old shares, enjoying the same rights
and subject to all Company bylaws and decisions of the General Meetings.
5.2.6 To enable the conversion of all of the Convertible Bonds, the
Extraordinary General Meeting authorized a capital increase of a maximum par
value of nine hundred and ten thousand (910,000) euros through the creation of a
number of shares equal to the amount of the capital increase divided by the par
value of the share at the day of the conversion of the Convertible Bonds.
In the event of a capital increase or a merger during the conversion period, the
Company reserves the right to suspend the conversion right for a period no
longer than three months.
5.2.7 If the Bondholder opts to convert a number of shares comprising a broken
fraction, he may request that these be allocated to him as follows:
- the next whole number of shares lower; in which case the Bondholder will be
paid in cash an amount equal to the value of the supplementary fraction of the
share, to be determined upon the basis of Company's own capital, as set out in
the latest balance sheet approved by the General Shareholders Meeting at the day
the request for conversion was filed, or else
- the next whole number of shares higher, provided that the Company be paid an
amount equal to the value of the supplementary fraction of the share as
requested, to be evaluated as set out in the above paragraph.
5.3 Impossibility to Convert Bonds
If the Transaction is not carried out, or an Extraordinary General Meeting not
held by July 31, 2003 at the latest, and in the event an assignment of 100% of
the Company capital is made by July 31, 2003 at the latest, the present bond
issue may not be converted. Such assignment shall entail the immediate
enforceability of the present bond issue, pursuant to the provisions of Article
4.4.
For the purposes of this article, the term "assignment" applies to any
transaction, for or without remuneration, including the transfer of absolute
ownership, bare ownership or usufruct of securities issued by the Company
including, inter alia, assignments or exchanges, including in cases of merger or
spin-off.
14
ARTICLE 6 - ADMINISTRATION OF CONVERTIBLE BONDS
Article 6.1 Bondholders' Rights
For so long as the Convertible Bonds shall exist, the Company shall maintain the
rights of the Bondholders under the following conditions.
6.1.1 In the event of an equity transaction affecting the preferential
subscription rights of the shareholders the Company shall:
(a) first inform the Bondholders of the nature of such equity
transaction, the subscription price, the lot of subscription
rights and other conditions attached to the securities to be
issued and the provisions made by the Company to maintain the
rights of the Bondholders.
(b) allow Bondholders who opt for the conversion of an irreducible
right to subscribe for shares, new convertible bonds,
exchangeable bonds, complex securities, warrants, or, generally,
securities issued after the exercise by shareholders of a
preferential subscription right, in the same proportions and
under the same conditions, except with respect to rights enjoyed,
only if the Bondholders were shareholders at the time of such
issue; consequently, the Extraordinary General Meeting of
shareholders which approves the share issue must resolve to
approve an additional issue reserved for the Bondholders opting
for the conversion.
6.1.2 In the case of a share issue to be subscribed by cash, of new convertible
bonds or exchangeable bonds, after suppression of the preferential shareholder
subscription right by Extraordinary General Meeting of shareholders, this
decision must be approved by a general meeting of the Bondholders.
6.1.3 In the event of a capital increase by means of the incorporation of
reserves, profits or issue premiums, the Extraordinary General Meeting of the
Shareholders which proceeds with such capital increase must pay into an
inaccessible reserve account the required amount, either to proceed with the
increase of the par value of shares remitted to the Bondholders subsequently
opting for conversion, or else to allocate free shares to these Bondholders
under the same conditions, excluding the enjoyment of rights, in a number equal
to that which they would have received if they had been shareholders at the time
of the principal allocation.
6.1.4 In the case of a distribution of reserves, the General Meeting of
Shareholders proceeding with the distribution must pay into an inaccessible
reserve account the necessary amount and, as the case may be, keep the
securities necessary, in order to remit to Bondholders who subsequently opt for
conversion, the amounts or the securities - under reserve of a different
enjoyment of rights - that they would have received if they had been
shareholders at the time of the distribution.
6.1.5 In the event of a merger of the Company, or its participation in a merger
through the creation of a new company:
(a) the merger shall be submitted to the prior approval of the
general meeting of the Bondholders;
(b) the Convertible Bonds shall be convertible during a pre-determined
conversion period, into shares of the absorbed or new company in
conformity with the conditions set out at the issue;
(c) the basis of conversion into shares of the merged or new company
shall be determined by correction of the exchange ratio of bonds
into shares of the issuing company originally set by the share
exchange ratio of the issuer against the shares of the absorbed
or the new company; this company will replace the issuing company
for the application of the above provisions with the object of
reserving, as the case may be, the rights of Bondholders in the
event of capital or equity transactions and, generally
15
speaking, to ensure the expenses of the issue with respect to legal,
regulatory and contractual provisions.
6.1.6 In the case of a reduction of capital motivated by losses, by decrease,
either of the par value amount of shares, or of the number of these, the rights
of the Bondholders opting for conversion of their securities shall accordingly
be reduced as if they had been shareholders from the date of the issue of the
bonds.
6.2 Company's Undertakings
In the event the Company should carry out Transactions for which an adjustment
was not made according to the terms and set out above and where a subsequent
legislative act or regulation should provide an adjustment, the Company will
proceed with this adjustment in compliance with the applicable legislative
provisions or regulations.
The company undertakes, from this day and throughout the circulation of the
Convertible Bonds, neither to process nor to amortize its capital, nor reduce
its capital by means of redemption, nor to modify the allocation of its profits
in conformity with the French Commercial Code.
Moreover, the issuing company undertakes, throughout the circulation of the
Convertible Bonds, and provided that this undertaking has no effect on its
freedom to dispose of its property, not to create on behalf of the other note or
bond holders any mortgage on their property or real estate that it can possess
and no security over the goodwill of the business assets (nantissement de fonds
de commerce), without benefiting "pari passu" the holders of the present
Convertible Bonds.
6.3 Enjoyment of new shares
The new shares remitted to the bondholders from the conversion of their
Convertible Bonds shall be subject to all statutory provisions; they will
entitle to enjoyment from the first day of the current financial year to the
conversion date, and, under the provisions of the Commercial Code, they will
entitle to a dividend paid corresponding to the financial period during which
the conversion shall have been demanded.
6.4 Bondholders' special meeting
The Bondholders will be grouped together pursuant to the provisions of the law.
After the subscription they will convene a general meeting, at the request of
the Company's Chairman, in order to designate their representatives.
ARTICLE 7 - NOTIFICATION
Every notification, motion, summons, authorization or other communication
concerning the Agreement will only be effective if it is made in writing and
sent extra-judicially by registered mail with proof of receipt, by facsimile, or
by electronic message (receipt of faxes and electronic messages must be
confirmed the same day by registered mail with proof of receipt) to the
following addresses:
For the Company:
To its registered office as set out on the first page of this Agreement, to the
attention of one of the Directors.
For the Subscribers:
To the registered offices of their respective companies and to the attention of
their representative, as set out on the first page of this Agreement.
The date of the notification is the date of reception of the letter by
registered mail with proof or receipt by the addressee.
16
ARTICLE 8 - COSTS
The Company undertakes to meet the costs incurred by it in the preparation and
the writing of this agreement and the fees associated with the implementation of
the Transaction, including all costs, fees and disbursements associated with
legal, accounting, and other advice.
ARTICLE 9 - APPLICABLE LAW - ELECTION OF DOMICILE - COMPETENT JURISDICTION
The application and execution of the present Agreement are subject to French
law.
For the execution of the present Agreement, the Parties elect domicile at their
respective registered offices, as set our on the first page of this Agreement.
Every dispute concerning the interpretation or the execution of the present
Agreement shall be, in the absence of an amicable agreement between the Parties,
submitted to the Tribunal de Commerce de Paris.
Signed in 15 original copies,
In Paris, on March 10, 2003
--------------------------------------------------------------------------------
Traqueur SA Xx. Xxxxxxxx XXXXXXX
Represented by Xx. Xxxxxxxx XXXXXXX
--------------------------------------------------------------------------------
Xx. Xxxx-Xxxxxxx XXXXXXX Xx. Xxx XXXXXXX
--------------------------------------------------------------------------------
SIPAREX CROISSANCE SIGEFI VENTURES GESTION
Represented by Xx. Xxxxxx XXXXX Represented by Xx. Xxxxxx XXXXX
--------------------------------------------------------------------------------
SIPAREX DEVELOPPEMENT LOJACK Inc.
Represented by Xx. Xxxxxx XXXXX Represented by Xx. Xxxxxxxx XXXXXXX
--------------------------------------------------------------------------------
CREDIT LYONNAIS PRIVATE EQUITY VIVERIS MANAGEMENT
Represented by Xx. Xxxxxx XXXXXXX Represented by Mr. Marc VILLECROZE
ABDELOUHAB
--------------------------------------------------------------------------------
BNP PARIBAS DEVELOPPEMENT Xx. Xxxxxx XXXXXX
Represented by Xx. Xxxxxx ALHEN
--------------------------------------------------------------------------------
Xxx. Xxxx XXXXXXX Mr. Herve REPAULT
--------------------------------------------------------------------------------
Mercure Epargne Longue
Represented by Ms. Anouk BARA
--------------------------------------------------------------------------------
17
APPENDICES
APPENDIX 1
Minutes of the Supervisory Board of February 3, 0000
XXXXXXXX 2
Minutes of the Management Board of February 27, 0000
XXXXXXXX 3
Letter calling for the subscription of convertible bonds dated
February 28, 0000
XXXXXXXX 4
Specimen Accession Deed for subscribers who are not signatories to the
Agreement
18
