EXHIBIT 4.3
DATED 14 January 2000
(1) GLOBAL INFORMATION GROUP U.S.A., INC.
(2) CHATELIN CAPITAL PARTNERS LIMITED
(3) JOLEC TRADING LIMITED
(4) XXXXXXX XXXX
(5) XXXXXX INVEST AG
(6) NEWICK DEVELOPMENTS LIMITED
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SHARE PURCHASE AND SHAREHOLDERS' AGREEMENT
relating to GLOBAL INFORMATION GROUP U.S.A., INC.
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TITMUSS SAINER DECHERT
0 Xxxxxxxxx' Xxx
Xxxxxx XX0X 0XX
Ref: C353/062453
Date: 13.01.2000
INDEX
Clauses Headings
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1. Definitions and interpretation
2. Recitals
3. Conditions
4. Sale and purchase of the Sale Shares
5. Grant of the options
6. Completion
7. Warranties
8. Breach of Warranty
9. CCP Director
10. Business of the Company
11. Reporting
12. External funding
13. Exit provisions
14. Executive undertakings
15. Restrictions on the Executive
16. Further shareholders
17. Issues of Shares
18. Transfers of Shares
19. Announcements
20. General
21. Communications
22. Costs
23. Proper Law
Schedule Description
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First The Company
Second Warranties
Third Restricted Transactions
Fourth Deed of Adherence
Fifth Agreed Principles for First Loan Agreement
Sixth Agreed Principles for Second Loan Agreement
Seventh Agreed Principles for Consultancy Agreement
Eighth Agreed Principles for Service Agreement
Appendix Description
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A Business Plan
B Disclosed Documents
Exhibits Description
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A Written consent of Directors of GIG
B Resolutions to be passed
THIS AGREEMENT is made on 14th January 2000
BETWEEN:-
(1) GLOBAL INFORMATION GROUP U.S.A., INC. a company incorporated under the
General Corporation Law of the State of Delaware in the USA the
principal place of business of which is at Xxx Xxxxxxxxxxx Xxxxx, Xxx
Xxxx, XX 00000, XXX ("Company");
(2) CHATELIN CAPITAL PARTNERS LIMITED a company incorporated in England and
Wales under number 3755000 the registered office of which is at 2
Xxxxxxxxx' Xxx, Xxxxxx XX0X 0XX ("CCP");
(3) JOLEC TRADING LIMITED a company incorporated under the laws of the
British Virgin Islands under number 334217 the principal office of
which is at Waterfront Drive, Atlantic Tower, Road Town, Tortola,
British Virgin Islands ("Purchaser");
(4) XX XXXXXXX XXXX of 00 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxxxx 00000
XXX ("Executive");
(5) XXXXXX INVEST AG a company incorporated under the laws of Switzerland
under number CH-170.3.022.536-1 the principal place of business of
which is at c/o EMB Beratung und Service XX, Xxxxxxxxxxxxx 0x, XX-0000,
Xxx, Xxxxxxxxxxx ("Xxxxxx"); and
(6) NEWICK DEVELOPMENTS LIMITED a company incorporated under the laws of
the British Virgin Islands the principal place of business of which is
at Waterfront Drive, Atlantic Tower, Road Town, Tortola, British Virgin
Islands ("Newick").
1. DEFINITIONS AND INTERPRETATION
1.1 In this agreement unless the context otherwise requires:-
"Agreed Form" means in a form agreed by and signed by or on behalf of
the Parties with such alterations (if any) as may be agreed in writing
between them;
"Associates" has the meaning given to that expression in section 52 of
Part II of the Companies Xxx 0000;
"Auditors" means the auditors for the time being of the Company;
"Board" means the board of Directors as constituted from time to time;
"business day" means a day on which banks generally are open in the
city of New York, U.S.A. for the transaction of normal banking
business;
"Business Plan" means the business plan in the Agreed Form
(incorporating an action plan and the Financial Plan) as varied
pursuant to clause 10.4.3 and profit and cash flow projections which
have been supplied by the Executive and the Company to CCP, Xxxxxx,
Newick and the Purchaser a copy of which (initialled by the Parties
solely for the purposes of identification) is annexed as appendix "A";
"CCP Director" means a Director appointed by CCP pursuant to the
provisions of clause 9 of this agreement and holding office from time
to time;
"Code" means the Internal Revenue Code of 1986, as amended;
"Completion" means the date upon which completion of the sale and
purchase of the Sale Shares takes (or should take) place pursuant to
clause 6 of this agreement or (as the case may be) the date of actual
completion of the sale and purchase of the Sale Shares;
"Consultancy Agreement" means a consultancy agreement between the
Company and CCP incorporating the agreed principles set out in the
seventh schedule and otherwise on usual commercial terms to be executed
and delivered pursuant to clause 6.1.6;
"Deed of Adherence" means a deed in the form set out in the fourth
schedule;
"Designated Persons" means the former and present directors, officers
and employees of, and consultants to, the Company;
"Director" means any director for the time being of the Company;
"Disclosure Letter" means the letter in the Agreed Form from the
Warrantors to CCP, Xxxxxx, Newick and to the Purchaser as at the date
of this agreement together with the documents referred to in and
attached thereto;
"EASDAQ" means the European Association of Securities Dealers Automated
Quotation based in Brussels, Belgium;
"family" in relation to any principal shall mean any one or more of
such principal, his spouse, his parents, his descendants, including
persons claiming descendancy by adoption, his brothers and sisters, the
estates of any such persons and the trustees of a trust ("family
trust") exclusively for the benefit of the family of such principal;
"family member" means any shareholder who is a member of a principal's
family;
"Financial Plan" means the detailed operating plan and financial budget
for the Company, in the Agreed Form as varied pursuant to clause
10.4.3, referred to in clauses 6.1.4, 10.4.1 and 10.4.2;
"First Loan" means the unsecured shareholder loan in the principal sum
of $300,000 the subject of the First Loan Agreement;
"First Loan Agreement" means the loan agreement between CCP (as lender)
and the Company (as borrower) incorporating the agreed principles set
out in the fifth schedule and otherwise on usual commercial terms to be
executed and delivered pursuant to clause 6.1.8;
"First IPO Option" has the meaning given to that expression in clause
5.2;
"First Take-over Option" has the meaning given to that expression in
clause 5.3;
"Flotation" means the admission or readmission of all or any of the
equity share capital of the Company or its parent undertaking to a
Recognised Stock Exchange;
"Forfeit Shares" has the meaning given to that expression in clause
7.5;
"Initial Investors" means Heydael B.V., Xxxxxxx Xxxxxxxxx, Jouke V.P.J.
Bracha and Henri Sijthoff, being the other holders of Shares apart from
the Executive as at the date of this agreement;
"Intellectual Property" includes (i) patents, trade marks, registered
designs, database rights, and any applications for any of the
foregoing, and (ii) copyright, design rights and analogous rights,
trade and business names, rights in confidential information, in each
case howsoever arising and including any right or interest in any of
the foregoing;
"Investment Period" means the period commencing on Completion and
ending on the date of the first to occur of a Flotation and a Third
Party Sale;
"IPO" means a public offering of equity securities by the Company (or
its parent) or any other offering of shares of the Company or such
parent, which takes place simultaneously with, or which is conditional
upon or which follows, a Flotation or a Take-over by a listed parent;
"IPO Options" means the First IPO Option and the Second IPO Option;
"IPO Shares" means the securities sold in an IPO;
"Issue Price" means the price (after subtracting underwriting discounts
and commissions) of each security offered in an IPO;
"Parties" means all the parties to this agreement and the word
"Party" shall be construed accordingly;
"Permitted Transfers" means any transfer of any Share which is
permitted in accordance with the provisions of clause 18.1;
"principal" means any person being an individual who was a shareholder
of the Company but who has transferred shares to his family;
"Recognised Stock Exchange" means any internationally recognised stock
exchange;
"Relevant Proportion" in relation to a claim under the Warranties means
a percentage equal to the aggregate percentage ownership of CCP and the
Purchaser and their Associates of the issued share capital of the
Company (or its parent) as at the date of that claim;
"Restricted Transaction" means any of the acts, transactions and
dealings set out in the third schedule;
"Revenue" means all fiscal or taxing authorities (national or local)
whether of the USA or elsewhere;
"Revised Bylaws" means the proposed revised certificate of
incorporation and bylaws of the Company in the Agreed Form (or the
bylaws of its parent) and as amended from time to time;
"Sale Shares" means the 100 Shares, representing 10 per cent. of the
issued share capital of the Company at Completion, to be sold by the
Executive to the Purchaser pursuant to clause 4;
"SEC" means the US Securities and Exchange Commission;
"Second IPO Option" has the meaning given to that expression in clause
5.2;
"Second Loan Agreement" means the loan agreement between Xxxxxx and
Newick (as lenders) and the Company (as borrower) incorporating the
agreed principles set out in the sixth schedule and otherwise on usual
commercial terms to be executed and delivered pursuant to clause 6.1.8;
"Second Loan" means the unsecured shareholder loan in the principal sum
of $1,200,000 the subject of the Second Loan Agreement;
"Second Take-over Option" has the meaning given to that expression in
clause 5.3;
"Service Agreement" means the service agreement between the Company and
the Executive incorporating the agreed principles set out in the eighth
schedule and otherwise on usual commercial terms to be executed and
delivered pursuant to clause 6.1.7;
"Shareholder Loans" the First Shareholder Loan and the Second
Shareholder Loan;
"Shares" means the shares of common stock, par value $0.01 each, of the
Company or capital stock or share capital of its parent which has been
exchanged for such shares;
"Take-over" any share for share acquisition of 50 per cent. or more of
the Company's shares;
"Taxation" includes all forms of taxation, duties, value added tax,
levies, imposts, charges, withholdings, national insurance, social
security, payroll and other contributions, rates and liabilities in
respect of deductions at source from employees' emoluments (including
any related or incidental penalty, fine, interest or surcharge)
whenever created or imposed and whether of the USA or elsewhere;
"Third Party Sale" means the sale on arms length terms of the whole of
the outstanding capital stock of the Company to any person other than
any of the Parties or their Associates;
"transfer" means any sale, transfer, hypothication, charge, mortgage,
encumbrance, security interest, declaration of trust, proxy, voting
trust or other disposal of Shares or any interest in Shares;
"Transfer Notice" means the notice to be served on the Company by any
shareholder who desires or is obligated to transfer Shares in
accordance with clause 18.2.3;
"US" or "USA" means the United States of America;
"US GAAP" means generally accepted accounting principles and practices
in the USA, consistently applied; and
"Warranties" means the representations, warranties and undertakings on
the part of the Executive and the Company contained in the third
schedule and which are made by the Executive and the Company pursuant
to clause 7.
1.2 In this agreement unless the context otherwise requires:-
1.2.1 any reference to a clause, schedule or appendix (other than to a
schedule to a statutory provision) is a reference to a clause of or
schedule or appendix to this agreement; and the schedules and
appendices form part of and are deemed to be incorporated in this
agreement;
1.2.2 any reference to a statute or statutory provision includes a reference
to that provision as amended, re-enacted or replaced and any
regulations or orders made under such provisions from time to time
whether before or after the date of this agreement and any former
statutory provision replaced (with or without modification) by the
provision referred to;
1.2.3 any reference to persons includes a reference to firms, corporations or
unincorporated associations;
1.2.4 any reference to the singular includes a reference to the plural and
vice versa; and any reference to the masculine includes a reference to
the feminine and vice versa; and
1.2.5 any agreement, warranty, representation, indemnity, covenant or
undertaking on the part of two or more persons shall be deemed to be
given or made by such persons jointly and severally.
1.3 Headings and titles are used for ease of reference only and do not
affect the interpretation of this agreement.
1.4 The expression "parent" when used in this agreement in relation to a
company shall mean the ultimate parent of that company in accordance
with the definition contained in section 258 of the Companies Xxx
0000.
2. RECITALS
2.1 The Company is a corporation incorporated under the General
Corporation Law of the State of Delaware in the USA.
2.2 At the date of this agreement, the Company had authorised 10,000
shares of common stock, par value $0.01 per share ("Shares") of which
1,000 Shares have been duly issued and are fully paid and
non-assessable and are held by the Executive and the Initial
Investors in the proportions set out in the first schedule. Further
details of the Company are set out in the first schedule.
2.3 The Executive has agreed to sell to the Purchaser and the Purchaser
has agreed to purchase on the terms and subject to the conditions of
this agreement 100 Shares ("Sale Shares") representing 10 per cent.
of the outstanding Shares at Completion for an aggregate
consideration of $1.
2.4 Xxxxxx and Newick have together agreed on the terms and subject to
the conditions of the First Loan Agreement to advance to the Company
in the form of a subordinated loan the sum of $300,000 within 5
business days after Completion.
2.5 The Executive has granted to CCP an option to purchase Shares
representing 30 per cent. of the issued share capital of the Company
at the date of the purchase referred to in clause 2.4 for a
consideration comprising US$1. This option will become exercisable
upon the advance to the Company of a further subordinated loan in the
sum of $1,200,000 in accordance with the terms and conditions of the
Second Loan Agreement.
2.6 The Parties have agreed to pursue a flotation of the Company on
EASDAQ or (subject to the approval of CCP and the Purchaser) another
Recognised Stock Exchange within 18 months of the date of this
agreement or else as soon as practicable thereafter and to follow the
Business Plan and the Financial Plan prior to such Flotation. The
Company has granted to CCP an option to purchase from the Company
that number of newly issued shares in the Company or its parent equal
to $2.5 million divided by the Issue Price in connection with any IPO
and a further option ("Second IPO Option") to purchase from the
Company an additional 10 per cent. of the outstanding Shares or
shares in its parent (as enlarged pursuant to the IPO) at a price per
share equal to 70 per cent. of the Issue Price. The Second IPO Option
shall lapse upon the exercise of either or both of the options
referred to in clause 2.7 below.
2.7 Alternatively, the Company will be sold (by way of a Take-over) to or
merged with or into a company which is already listed on a Recognised
Stock Exchange. The Company has granted to CCP:- (i) an option,
exercisable immediately prior to any such transaction, to purchase
from the Company such number of shares as shall on the date of
exercise represent 10 per cent. of the issued share capital of the
Company at a price per share equal to 35 per cent. of the value given
to such shares for the purpose of the transaction ("relevant value");
and (ii) an option to purchase from the Company such number of shares
as shall on the date of exercise represent 5 per cent. of the issued
share capital of the Company at a price per share equal to 10 per
cent. of the relevant value. These options shall lapse upon the
exercise of the Second IPO Option.
3. CONDITIONS
3.1 The obligations of the Purchaser under this agreement are conditional
upon:-
3.1.1 CCP, Xxxxxx, Newick and the Purchaser being satisfied with the
results of their technical, financial, legal and accounting
investigations into the business and assets of the Company;
3.1.2 the Service Agreement, the Consultancy Agreement and the Loan
Agreements having been executed by the Parties thereto;
3.1.3 the Company having effected and there being in force a key man life
insurance policy covering death, accident and liability in respect of
the Executive on terms acceptable to CCP and the Purchaser;
3.1.4 the Executive and the Company not being in breach of any of the
Warranties or any other obligations or undertakings given or made by
him under the terms of this agreement; and
3.1.5 the Company not having, since the date of this agreement, effected
any Restricted Transaction without the prior written consent of CCP,
Xxxxxx, Newick and the Purchaser;
3.2 If any of such conditions are not fulfilled, or waived by CCP,
Xxxxxx, Newick and the Purchaser, on or before 31 January 2000 (or
such later date as CCP, Xxxxxx, Newick and the Purchaser may agree)
then all obligations and liabilities of the Parties under this
agreement shall cease and determine and no Party shall have any claim
against the other:-
3.2.1 except insofar as any such conditions shall not have been satisfied
due to any act or omission by the Executive or the Company, in which
event any claim by CCP, Xxxxxx, Newick and/or the Purchaser under
clause 3.3 arising by virtue of such failure shall be preserved; and
3.2.2 save in respect of the provisions of clause 17 and, where the
condition contained in clause 3.1.5 has not been satisfied (or waived
by CCP, Xxxxxx, Newick and the Purchaser), clauses 7 and 8.
3.3 The Executive and the Company and (solely in respect of the condition
contained in clause 3.1.2) CCP, Xxxxxx and Newick shall use their
best endeavours to procure fulfilment of the above conditions within
7 business days of the date of this agreement.
3.4 CCP, Xxxxxx, Newick and the Purchaser may at their sole discretion by
notice in writing to the Executive and the Company waive in whole or
part any or all of the above conditions.
4. SALE AND PURCHASE OF THE SALE SHARES
4.1 The Executive shall sell the Sale Shares to the Purchaser or as the
Purchaser shall otherwise direct and the Purchaser, relying on the
Warranties and the other obligations of the Executive and the Company
under this agreement, shall purchase or procure the purchase of the
Sale Shares. The consideration for the Sale Shares shall comprise the
sum of $1 payable in cash at Completion.
4.2 The Executive shall sell the Sale Shares with full title guarantee
free from all liens, charges, security interests, encumbrances and
adverse claims (and whether or not the Executive knows or could
reasonably be expected to know about such matters) together with all
rights now or hereafter attaching to them including all dividends
declared or payable or distributions made or proposed at any time
since the date of incorporation of the Company.
4.3 The Executive shall and shall procure that the Initial Investors
shall irrevocably and unconditionally waive all rights of pre-emption
or other restrictions on transfer which they may have, whether under
the certificate of incorporation or bylaws of the Company by contract
or otherwise, in respect of the transfer to the Purchaser or its
nominee(s) of the Sale Shares or any of them and all other transfers
of Shares contemplated to be made by the Executive under or pursuant
to this agreement including the option referred to in clause 5.1,
5.2, 5.3 and shall execute and deliver (and procure the execution and
delivery of) all such deeds of waiver in respect thereof as the
Purchaser may require. For the avoidance of doubt, this clause does
not affect the non-dilutable character of the Shares held by the
Initial Investors until the moment of IPO or Flotation. At such event
all Shares held by any of the Parties and the Initial Investors shall
be equally subject to dilution in case of any further issuance of
Shares.
4.4 The Purchaser shall not be obliged to complete the purchase of some
only of the Sale Shares unless the purchase of all the Sale Shares is
completed simultaneously in accordance with the provisions of this
agreement.
4.5 The Executive undertakes with the Purchaser that, if and for so long
as he remains the registered holder of any of the Sale Shares after
Completion, he will hold such Shares and the dividends and other
distributions of profits or surplus or other assets in respect of
such Shares and all rights arising out of or in connection with them
in trust for the Purchaser and will at all times after Completion
deal with and dispose of such Shares, dividends, distributions and
rights as the Purchaser shall direct and (if so requested by the
Purchaser) execute all instruments of proxy or other documents which
may be necessary or proper to enable the Purchaser to attend and vote
at any meeting of the Company.
5. GRANT OF OPTIONS
5.1 In consideration of CCP entering into this agreement and agreeing to
arrange the Shareholder Loans and of the payment by CCP to the
Executive of an option fee of US$1 on the date of this agreement (the
receipt of which is hereby acknowledged), the Executive grants to CCP
an option ("Executive Option") to purchase or to procure the purchase
of such number of Shares from the Executive ("Executive Option
Shares") as shall represent 30 per cent. of the outstanding shares as
at the date of completion of the sale and purchase of such Shares
pursuant to the exercise of the Executive Option on the following
terms and conditions:-
5.1.1 subject to clause 5.1.3, the Executive Option shall be exercisable
once only in whole but not in part at any time during the period of 6
months commencing on the day the Second Loan is advanced to the
Company by notice in writing to the Executive and the Company and
such exercise shall be irrevocable. If not exercised in such period,
the Executive Option shall lapse and become incapable of subsequent
exercise;
5.1.2 within 5 business days of the date of the notice exercising the
Executive Option, the Executive shall deliver to CCP or to such
person as CCP may direct stock powers or other instruments of
transfer in respect of the Executive Option Shares and duly signed
stock powers or other instruments of transfer transferring the
Executive Option Shares to CCP (or to such other persons as they may
direct) in the proportions notified by CCP. Upon receipt of such
stock certificates and stock powers, CCP shall pay to the Executive
the aggregate sum of $1 in full satisfaction of the consideration due
in respect of the transfer of the Executive Option Shares;
5.1.3 where an agreement is reached pursuant to which the Company will be
acquired by or merged with or into another company (including by way
of a Take-over), the Executive shall at completion of that agreement
grant to CCP an option over his shares in that other company on the
same terms and with the at least same value as the Executive Option
(based upon the valuations of the Company and the acquiring company
for the purposes of the merger or acquisition) and upon the effective
grant of such new option to the extent that it has not been exercised
the Executive Option shall lapse.
5.2 In consideration of CCP entering into this agreement and the payment
by CCP to the Company of the option fee of US$1 on the date of the
agreement (the receipt of which is hereby acknowledged) referred to
in clause 5.1, the Company grants to CCP an option ("First IPO
Option") to purchase that number of Shares equal to $2.5 million
divided by the Issue Price ("First IPO Option Shares") as part of an
IPO or Flotation and a further option ("Second IPO Option") to
purchase that number of Shares equal to 10 per cent. of the
outstanding Shares (as enlarged by the IPO Shares) ("Second IPO
Option Shares") as part of the IPO or Flotation at a price per share
equal to 70 per cent. of the Issue Price on the following terms and
conditions:-
5.2.1 subject to clause 5.2.3, each of the IPO Options shall be exercisable
once only in whole or in part at any time during the Investment
Period (including as part of any IPO) by notice in writing to the
Company. To the extent not exercised in such period, the IPO Options
shall lapse and become incapable of subsequent exercise;
5.2.2 if the IPO Options are exercised, on the date of the closing of the
IPO or admission to listing on a Recognised Stock Exchange the
Company shall deliver to CCP or to such persons as they may direct
stock powers or other instruments of transfer in respect of the First
IPO Option Shares or the Second IPO Option Shares (as the case may
be) and a certified copy of the Board minutes allotting the relevant
IPO Option Shares to CCP or to such other persons as it may direct in
the proportions notified by CCP and register CCP or any persons
nominated by it as holders of the shares as holders of the relevant
IPO Shares. Upon receipt of such stock certificates and certified
copy Board minutes and powers, CCP shall pay to the Company the
aggregate applicable purchase price determined pursuant to clause 5.2
in full satisfaction of the consideration in respect of the issue and
allotment of the relevant IPO Shares; and
5.2.3 where an agreement is reached pursuant to which the Company will be
acquired by or merged with another company, the Company shall grant
CCP prior to completion of that agreement grant to CCP options over
its shares with the at least same value as the IPO Options or deal
value and upon the effective grant of such new options any
unexercised IPO Options shall lapse; and
5.2.4 the Second IPO Option shall lapse upon exercise of either or both of
the Take-over Options;
5.3 In consideration of CCP entering into this agreement and the payment
by CCP to the Company of the option fee of US$1 on the date of the
agreement (the receipt of which is hereby acknowledged) referred to
in clause 5.1, the Company grants to CCP:- (i) an option, exercisable
immediately prior to a Take-over or a merger of the Company with or
into a company which is already listed on a Recognised Stock Exchange
("relevant event"), to purchase from the Company such number of
Shares as shall on the date of exercise represent 10 per cent. of the
issued share capital of the Company at a price per share equal to 35
per cent. of the value given to such shares for the purpose of the
transaction ("relevant value"); and (ii) an option, exercisable
immediately prior to a relevant event, to purchase from the Company
such number of Shares as shall on the date of exercise represent a
further 5 per cent. of the issued share capital of the Company on the
date of exercise at a price per share equal to 10 per cent. of the
relevant value. These options ("Take-over Options") shall be granted
on the following terms and conditions:-
5.3.1 each of them shall be exercisable once only in whole or in part at
any time between one month and five business days prior to the
occurrence of a relevant event by notice in writing to the Company
and such exercise shall be irrevocable. To the extent not exercised
in such period, the Take-over Options shall lapse and become
incapable of subsequent exercise;
5.3.2 within 5 business days of the date of the notice exercising a
Take-over Option (and prior to completion of the transaction giving
rise to the relevant event), the Company shall deliver to CCP or to
such persons as they may direct stock powers in respect of the shares
the subject of the relevant Take-over Option and a certified copy of
the Board minutes allotting the relevant shares to CCP or to such
other persons as it may direct in the proportions notified by CCP and
register CCP or any persons nominated by it as holders of the shares.
Upon receipt of such stock certificates and certified copy Board
minutes and powers, CCP shall pay to the Company the aggregate
applicable purchase price determined pursuant to clause 5.3 in full
satisfaction of the consideration in respect of the issue and
allotment of the relevant Shares; and
5.3.3 the Take-over Options shall lapse upon exercise of the Second IPO
Option.
6. COMPLETION
6.1 Completion shall take place at the offices of Titmuss Sainer Dechert
in the UK at 2 Xxxxxxxxx' Xxx, Xxxxxx XX0X 0XX (or at such other
place as the Parties may agree) on such date as the Executive and the
Purchaser may agree but in any event not later than 72 hours after
the conditions set out in clause 3.1 have been fulfilled, or waived
as provided in clause 3.4, when each of the Parties shall (so far as
it is within his or its powers so to do) take or cause the following
steps to be taken and, to the extent necessary, to be sanctioned by
the Board and/or the shareholder of the Company (as appropriate):-
6.1.1 the Executive shall deliver to the Purchaser the stock certificates
and duly signed stock powers or other instruments of transfer
relating to the transfer of the Sale Shares to the Purchaser;
6.1.2 the Purchaser shall pay to the Executive the aggregate sum of $1 in
consideration of the transfer of the Sale Shares;
6.1.3 the Company shall register the Purchaser or such persons as the
Purchaser may direct as holders of the Sale Shares and issue new
stock certificates to the Purchaser or as it may direct in respect of
the Sale Shares;
6.1.4 the Company shall adopt the Business Plan and the Financial Plan;
6.1.5 the Company shall appoint the CCP Director as provided by clause 9;
6.1.6 the Company shall deliver to the Purchaser and the Purchaser shall
deliver to the Company duly executed copies of the Consultancy
Agreement;
6.1.7 the Company shall deliver to the Purchaser copies of the Service
Agreement duly executed by the Company and the Executive;
6.1.8 the Company shall deliver to CCP, Xxxxxx and Newick and CCP, Xxxxxx
and Newick shall deliver to the Company duly executed copies of the
Loan Agreements and CCP shall advance to the Company the First Loan
in accordance with the terms of the First Loan Agreement;
6.1.9 the Company shall adopt the Revised Bylaws and revise its certificate
of incorporation by incorporating the restricted transactions set out
in the third schedule to this agreement as transactions which cannot
be conducted by the Company without the unanimous consent of the
Board, or, insofar as the transactions set out in the third schedule
are resolutions to be passed by the shareholders, without the consent
of at least 75% of the shareholders;
6.1.10 the Company shall pay to CCP the arrangement fee of $7,500 referred
to in clause 12.3.1 and the fifth schedule in respect of the First
Loan and the arrangement fee 2,5 per cent. of the principal amount of
the Second Loan Agreement, referred to in clause 12.3.2 and the sixth
schedule;
6.1.11 deeds of waiver of pre-emption rights in relation to the issues and
transfers of shares contemplated in this agreement in a form
satisfactory to the Purchaser duly executed by each of the Initial
Investors, such deeds to include confirmation by the Initial
Investors that they will cooperate with the other Parties in relation
to any Take-over or Flotation and that they have read and consent to
the terms of this agreement.
6.2 If any of the Parties (other than the Purchaser, CCP, Xxxxxx and/or
Newick) shall fail to perform on or before the date due for
Completion any of the obligations which this agreement requires it or
him to perform on or by that date, the Purchaser, CCP, Xxxxxx and/or
Newick (as the case may be) shall in addition to and without
prejudice to any other remedies that they may have be entitled to:-
6.2.1 defer Completion to a date not more than 14 days following the date
on which Completion should have taken place (and so that the
provisions of this clause shall apply to Completion as so deferred);
or
6.2.2 proceed to Completion so far as is practicable; or
6.2.3 rescind this agreement.
7. WARRANTIES
7.1 In consideration of CCP, Xxxxxx, Newick and the Purchaser, CCP,
Xxxxxx and Newick entering into this agreement and the Loan
Agreements and the payment by CCP of the option fee referred to in
clause 5.1, the Executive and the Company represent and warrant to
CCP, Xxxxxx, Newick and the Purchaser that, save only as and to the
extent fully and fairly disclosed to CCP, Xxxxxx, Newick and the
Purchaser in this agreement or in the Disclosure Letter, each of the
Warranties is now true and accurate and will continue to be true and
accurate on each day from now up to and including Completion as if
repeated on each such day with reference to the facts which shall
then exist and the rights and remedies of CCP, Xxxxxx, Newick and the
Purchaser in respect of the Warranties are not to be affected or
limited by any previous or other disclosures, express or implied, to,
or any investigations carried out by, CCP, Koenig, Newick, the
Purchaser their officers, representatives and professional advisers,
by the sale of the Sale Shares or by CCP, Xxxxxx, Newick or the
Purchaser failing to terminate or rescind this agreement, or by any
other matter whatsoever, except a specific and duly authorised
written waiver or release by CCP, Xxxxxx, Newick and the Purchaser.
7.2 The Executive and the Company will forthwith notify (in writing) CCP,
Xxxxxx, Newick and the Purchaser of any matter or thing which may
arise or become known to him after the date of this agreement
(whether or not prior to Completion) which renders any of the
Warranties untrue, inaccurate or misleading in any respect by
reference to the facts existing at that time or if he becomes aware
of any circumstances which would, or would be likely to, cause any of
the Warranties to become untrue, inaccurate or misleading. Any matter
or thing so notified shall not be and shall not be deemed to be a
disclosure for the purpose of qualifying or limiting the liability of
the Executive or the Company pursuant to this agreement.
7.3.1 The following provisions of this clause 7.3 shall operate to limit
the liability of the Executive and the Company pursuant to the
Warranties and references to "breach", "claim" and "liability" (and
any similar expression) shall, unless the context otherwise requires,
be references to a breach of or a claim or liability arising pursuant
to the Warranties notwithstanding any other provisions contained in
this agreement.
7.3.2 No claim shall be made unless the Executive and the Company shall
have been given written notice by or on behalf of CCP, Xxxxxx, Newick
or the Purchaser of that claim (in the case of a liability relating
to a matter other than Taxation or a Warranty in Sections 3 and 15)
during the Investment Period or (in the case of a liability relating
to Taxation) prior to the seventh anniversary of Completion together
with reasonable written details of the specific matter and amount in
respect of which a claim is made.
7.3.3 If the Executive or the Company shall be unable to satisfy his or its
liability under the Warranties by payment in cash, CCP, Xxxxxx,
Newick or the Purchaser shall be entitled to require him or it to do
so by written notice requiring him or it to transfer and/or to
procure the transfer of such number of Shares (in addition to the
Sale Shares and the Option Shares) as shall have an aggregate value
equal to the amount of such liability. For the purposes of the prior
sentence, the value of the Shares to be transferred shall be the
value (taking into account the effect of the breach in determining
the value) as agreed between the Parties or, failing agreement, as
the Auditors shall state in writing to be their opinion of a fair
value thereof. In arriving at such opinion the Auditors shall assume
a sale between a willing vendor and a willing purchaser on the
relevant date taking into account (if such be the case) any bona fide
offer received from any person not being a shareholder to purchase
the Shares or any of them. In producing such statement the Auditors
shall be deemed to be acting as experts and their decision shall be
final and binding upon the Parties.
7.3.4 If CCP, Xxxxxx, Newick or the Purchaser makes a claim against the
Executive under Clause 7.1, the Executive shall not have or pursue
any claim or third party action to join in, claim against, seek a
contribution from or otherwise claim or seek damages or compensation
from the Company in respect of any such claim and the Executive and
the Company hereby confirm to CCP, Xxxxxx, Newick and the Purchaser
that the Company has not entered into any indemnity or other
agreement or arrangement concerning the liability of the Executive or
the Company for any breach of the Warranties or any other provision
of this agreement.
7.3.5 Where notice of a claim is given to the Executive and/or the Company
(in accordance with clause 7.3.2), no legal proceedings may be
commenced in respect of that claim until one month after the date of
notification. During such one month period the relevant Parties shall
attempt in good faith to settle the claim between themselves or else
to agree upon an independent arbitration procedure for the claim.
7.4 Each of the Warranties, covenants, indemnities and undertakings set
out in this agreement is separate and independent.
7.5 If the Company shall not have achieved a market value of $6 million
at any time within the one year period commencing the day after
Completion, the Executive shall be deemed to have served a Transfer
Notice transferring or procuring the transfer to CCP (or to such
other persons as they may direct) in such proportions as they shall
direct of such number of Shares as shall equate to 21 per cent of the
issued share capital of the Company at the date of such Transfer
Notice ("Forfeit Shares") for an aggregate consideration of $1. For
the avoidance of doubt, if the Company shall have achieved a market
value of $6 million or more at any time within the one year period
commencing the day after Completion, the Executive shall not be
deemed to have served a Transfer Notice pursuant to this clause. For
the purposes of this clause, the "market value" of the Company shall
be: (i) based upon the highest price paid in an arms length sale or
the subject of a bona fide arms length offer during the Relevant
Period for a minimum of 10 per cent. of the issued share capital of
the Company; or (ii) where no such sale or offer takes place within
the Relevant Period, the Transfer Value of the Company (referred to
in clause 7.3.3) as determined by the Auditors based upon an arms
length sale of 10 per cent. of the issued share capital of the
Company. The Auditors shall be deemed to be acting as experts and
their decision shall be final and binding upon the Parties.
8. BREACH OF WARRANTY
8.1 Without restricting the rights or the ability of CCP, Xxxxxx, Newick
or the Purchaser to claim damages on any basis if it shall be found
that any matter which is the subject of any of the Warranties is not
as represented, warranted or undertaken then, if CCP, Xxxxxx, Newick
and/or the Purchaser (as appropriate) shall so elect by notice in
writing to the Executive or the Company, the Executive or the Company
(as the case may be) shall on demand pay to CCP, Xxxxxx, Newick
and/or the Purchaser (as appropriate):-
8.1.1 a sum equal to the Relevant Proportion of the amount by which the
value (or amount) at Completion of any asset or liability of the
Company (computed for this purpose on the basis that full provision
was made for the facts and circumstances in relation to which such
breach arose) was less or, in the case of a liability, greater than
the value (or amount) at Completion of such asset or liability
(computed for this purpose on the assumption that the facts and
circumstances had been such as to involve no such breach); and
8.1.2 all costs and expenses incurred by CCP, Xxxxxx, Newick and/or the
Purchaser as a result of such breach, together with such other
amounts as shall be required to compensate them for any other loss or
damage which they shall have suffered.
8.2 The Executive and the Company will forthwith notify (in writing) CCP,
Xxxxxx, Newick and the Purchaser of any matter or thing which may
arise or become known to either of them after the date of this
agreement (whether or not prior to Completion) which is inconsistent
with any of the Warranties or which is or may reasonably be
anticipated to be material to be known by a purchaser for value of
the Sale Shares. Any matter or thing so notified shall not be and
shall not be deemed to be a disclosure for the purpose of qualifying
or limiting the liability of the Executive or the Company pursuant to
this agreement.
8.3 If CCP, Xxxxxx, Newick or the Purchaser becomes aware (whether as a
consequence of any notification made by the Executive or the Company
or otherwise) of any breach of the Warranties, then CCP, Xxxxxx,
Newick or the Purchaser (as appropriate) may rescind this agreement
by giving notice in writing to the other Parties to that effect.
9. CCP DIRECTOR
9.1 CCP shall be entitled during the Investment Period and for a period
of twelve months thereafter to appoint one person to be Director and
to remove such Director and to appoint another person in his place as
necessary, by notice in writing to the Company which shall take
effect at the time it is served on the Company.
9.2 A CCP Director shall:-
9.2.1 (notwithstanding any provision from time to time of the Company) not
be required to hold any share qualification, shall not be subject to
retirement by rotation, may appoint any other person to be his
alternate director and may only be removed by CCP;
9.2.2 be entitled to disclose to CCP such information regarding the Company
as he shall in his absolute discretion determine; and
9.2.3 be entitled to be reimbursed by the Company for all expenses
reasonably incurred by him in connection with the performance of his
duties as a CCP Director.
9.3 At any meeting of the Company at which a resolution is proposed by
CCP to appoint or remove a CCP Director, the Executive hereby agrees
to vote in favour of any such appointment or removal.
9.4 Except as expressly provided under this agreement or as contemplated
in the Business Plan, the number of Directors shall not exceed 5 at
any time during the Investment Period except with the prior written
consent of CCP.
10. BUSINESS OF THE COMPANY
10.1 The Executive and the Company covenant and undertake to CCP, Xxxxxx,
Newick and the Purchaser that during the Investment Period, save with
the prior written consent of CCP, Xxxxxx, Newick and the Purchaser,
any expansion, development or evolution of the Company's business or
any part thereof (whether to be conducted as part of or in connection
with such main business or ancillary to it) will only be effected
through the Company or a wholly owned subsidiary of the Company.
10.2 The Executive undertakes to and covenants with CCP, Xxxxxx, Newick
and the Purchaser that (subject to all applicable legal requirements)
he will exercise his votes as director and/or shareholder in the
Company so as to procure so far as he is able, and the Company agrees
to ensure, that during the Investment Period, save with the prior
written consent of CCP, Xxxxxx, Newick and the Purchaser, the Company
does not carry out or agree (whether conditionally or
unconditionally) to carry out any Restricted Transaction. The Company
shall endeavor its best efforts to alter its certificate of
incorporation to reflect this on or prior to Completion, or in any
case no later than 30 days thereafter.
10.3 Each of the Parties agrees that at all times during the Investment
Period it shall fully and punctually perform and comply with all
obligations on its part under the Revised Bylaws and it is agreed
that each provision of the Revised Bylaws shall be enforceable by the
Parties between themselves in whatever capacity.
10.4.1 At Completion, the Company shall and the other Parties shall ensure
in so far as they are able that the Company shall adopt the Business
Plan (incorporating the Financial Plan).
10.4.2 The Parties agree that during the Investment Period: (i) the Company
shall pursue the Business Plan; (ii) no material action shall be
taken by the Company except as expressly contemplated in the Business
Plan; and (iii) no expenditure shall be incurred by the Company
except as expressly contemplated in the Financial Plan; in each case
except as approved by the CCP Director (who shall act in good faith
in the interests of the Company).
10.4.3 The Business Plan may be altered at any time with the prior agreement
of all the Directors but may not otherwise be altered.
10.5 The Company undertakes to CCP, Xxxxxx, Newick and to the Purchaser
that it shall keep in force key man insurance policy in respect of
the Executive for so long as he is a director or employee of the
Company.
11. REPORTING
11.1 The Company and the Executive agree that during the Investment Period
the Company shall provide to CCP, Xxxxxx, Newick and to the Purchaser
in relation to the Company:-
11.1.1 audited accounts and an annual report of the Company within four
months (or such longer period as CCP, Xxxxxx, Newick and the
Purchaser may agree) of the end of the accounting period to which
they relate as soon as reasonably practicable at the end of each
accounting period in accordance with US GAAP and such accounts shall
be laid before the Company in general meeting no later than five
months after the relevant accounting reference date;
11.1.2 such financial and other information about the Company as CCP,
Xxxxxx, Newick and the Purchaser may from time to time reasonably
require;
11.1.3 within three weeks of the end of each calendar month management
accounts in a format agreed with CCP, Xxxxxx, Newick and the
Purchaser and containing profit and loss account, balance sheet, cash
flow forecast for the next calendar month and provide a comparison
between budgeted and actual results together with a report on any
significant variations between such results and a report on the
Company's performance by the Executive;
11.1.4 proofs for approval of all notices of meeting (other than notices of
annual general meetings containing notice of routine business only)
reports, announcements or other documents (other than statutory
accounts) proposed to be sent to holders of any securities of the
Company.
11.1.5 all notices, reports, announcements or other documents at the same
time as they are sent to the holders of any securities of the Company
and copies of all resolutions passed by the holders of securities of
the Company within 14 days of such resolution being passed;
11.1.6 any proposed public announcement in relation to CCP, Xxxxxx, Newick
and/or the Purchaser and no such announcement shall be made without
the prior approval of CCP, Xxxxxx, Newick and/or the Purchaser (as
appropriate) unless required by law or other regulatory requirements;
11.1.7 copies of documents relating to transactions which are or may be
material to the business of the Company;
11.1.8 as soon as they are available, full details of any material adverse
change in the financial position or prospects of the Company; and
11.1.9 as soon as it or he become aware of the same, inform CCP, Xxxxxx,
Newick and the Purchaser of any general offer proposed to be made to
shareholders of the Company or any discussions likely to lead to the
same and any material litigation which may be made or threatened by
or against the Company or any circumstance likely to give rise to the
same.
11.2 The Company and the Executive agree with CCP, Xxxxxx, Newick and the
Purchaser that:-
11.2.1 all the business of the Company (other than day to day business)
shall be carried on by the Board and a meeting of the Board shall be
convened and held at least once in every calendar month;
11.2.2 unless the CCP Director agrees otherwise in relation to any
particular meeting, Board meetings shall be convened by not less than
7 clear business days notice given to all directors at the addresses
which they shall have supplied to the Company for the purpose of such
notice;
11.2.3 notice of all Board meetings shall be accompanied by a written agenda
specifying the business of such meeting and copies of all papers that
shall be relevant for such meeting and only the business so specified
may be transacted at such meeting save where (in an emergency) the
interests of the Company dictate otherwise or where the CCP Director
shall otherwise agree and as soon as practicable after each such
meeting a copy of the minutes of the meeting shall be sent to the CCP
Director.
11.3 CCP, Xxxxxx, Newick and the Purchaser shall be entitled to examine
all books and accounts of the Company.
12. EXTERNAL FUNDING
12.1 Following Completion, the initial external funding of the Company
shall be provided by way of the First Loan.
12.2 If during the Investment Period additional external funding
("Additional Funding") is required by the Company, then if so
approved by CCP:-
12.2.1 to the extent that CCP so elects, the Additional Funding shall first
be provided:-
12.2.1.1 by advances under the Second Loan Agreement and in the form of
consideration payable to the Company pursuant to the exercise of any
of the options referred to in this agreement; and/or
12.2.1.2 to the extent that the amount of the required Additional Funding
exceeds the principal sum of the Second Loan Agreement, by way of
funding on commercial terms agreeable to the Board provided or
procured by CCP; or
12.2.2 to the extent that CCP do not elect to provide or procure the
provision of the Additional Funding pursuant to clause 12.2.1 within
20 business days ("Funding Period") of receipt by CCP from the Board
of a written request for the Additional Funding (setting out in
reasonable detail the purpose for which the Additional Funding is
required), the Company shall be entitled to raise the Additional
Funding:-
12.2.2.1 from the other shareholders of the Company (and their Associates) on
terms no more favourable than those offered under clause 12.2.1.2; or
12.2.2.2 from third parties (excluding shareholders of the Company and their
Associates) on reasonable commercial terms acceptable to all those
Directors present at a meeting of the Board duly convened and held;
provided that the percentage shareholding in the Company represented
by Sale Shares (and any other Shares then owned by CCP or the
Purchaser or their Associates) shall not in any way be reduced
(ignoring for this purpose any increase in such percentage as a
result of funding provided to the Company by such shareholders under
this clause 12.2) as a result of any such funding.
12.3 The Company shall pay arrangement fees as follows:-
12.3.1 to CCP in respect of the First Loan, a fee of 2.5 per cent. of the
principal amount of the loan, being $7,500, payable at Completion;
12.3.2 to CCP a total fee of US$30,000, in each case in respect of the
Second Loan and payable at the grant of the Second Loan, subject to
the terms of the Second; and
12.3.3 to CCP, in respect of an IPO, 2.5 per cent. of the aggregate total
gross proceeds to the Company from such IPO payable within 3 business
days of an IPO (or, in the case of a Take-over, 2.5 per cent. of the
valuation of the Company for the purposes of such Take-over (which
valuation shall, in the case of disagreement, be confirmed by the
Auditors).
12.4.1 Subject to clause 12.4.2, at Completion, the Company shall deliver to
a Dutch civil law notary nominated by CCP, Xxxxxx and Newick the
source codes for all the bespoke computer software used in the
Company's business as security for the obligations of the Company
under the Loan Agreements. The source codes may at any time be
transferred to such other agent as CCP, Xxxxxx, Newick and the
Company may agree. The Dutch notary and such or other agreed agent
("Escrow Agent") shall hold the source codes in escrow on behalf of
CCP, Xxxxxx and Newick on the following terms:-
12.4.1.1 the source codes shall be released to CCP upon receipt by the Escrow
Agent from CCP of a written direction to do so; CCP shall only be
entitled to issue such direction where the Company is in material
breach of either of the Loan Agreements where any failure of the
Company to pay any interest or principal when due will constitute a
material breach;
12.4.1.2 subject to clause 12.4.1.1, the source codes shall be released to the
Company upon receipt by the Escrow Agent from CCP of a written
direction to do so; CCP shall issue such direction once the Company's
obligations under the Loan Agreements have been satisfied in full;
12.4.1.3 the fees and expenses of the Escrow Agent shall be borne by the
Company.
12.4.2 At the date of this agreement, the Company is in the process of
negotiating the acquisition of the source codes referred to in clause
12.4.1. If (because the Company does not then own the source codes or
for any other reason) the Company is not able to deposit the source
codes with the Escrow Agent at Completion then it shall use its best
endeavours to ensure that it does so as reasonably practicable
thereafter.
13. EXIT PROVISIONS
13.1 If , at any time during the Investment Period, the Executive whishes
to sell or dispose of his Shares to another party ("the Proposed
Transferee"), he shall not be able to consummate such sale unless the
following conditions have been complied with: (a) he shall have first
given CCP and the Purchaser or their assigns, pro rata to their
shareholdings in the Company, the right to purchase the Shares being
offered by the Executive upon the same terms and conditions that he
is willing to offer them to the Proposed Transferee and (b) in the
event that CCP and/or the Purchaser whish to exercise such right of
first refusal, the Executive shall have given CCP and Purchaser or
their assigns the opportunity to sell the same proportion of their
Shares as the Executive is willing to sell to the Proposed Transferee
and upon the same terms and conditions. If CCP and/or Purchaser have
not exercised either their right of first refusal or their right to
sell their Shares along with the sale of the Shares of Executive, the
Executive will be permitted to consummate the proposed sale but on
terms no more favorable to the Proposed Transferee than those first
proposed.
14. EXECUTIVE UNDERTAKINGS
14.1 The Executive undertakes to the Company, CCP, Xxxxxx, Newick and the
Purchaser that during the Investment Period save with the prior
written consent of CCP, Koenig, Newick, the Purchaser and the Company
(such consent not to be unreasonably withheld):-
14.1.1 he will during normal business hours and such other hours as may be
required under his Service agreement devote his full time and
attention to the business of the Company and shall not hold any other
office or appointment nor be concerned with any other business
whether or not in competition with any business carried on by the
Company; and
14.1.2 he will not transfer Shares: (i) to the extent that following such
transfer he holds less Shares than the number of Forfeit Shares
(except where the Forfeit Shares have been transferred to CCP
pursuant to clause 7.5) and the Executive Option Shares (except where
the Executive Option Shares have been transferred to CCP pursuant to
the exercise of the Executive Option); or (ii) otherwise than in
accordance clause 18 of this agreement and any relevant provisions of
the Revised Bylaws.
14.2 If during the Investment Period the Executive ceases to be a director
or employee of the Company (except as a result of his death, serious
illness or unlawful dismissal) then unless CCP and the Purchaser
otherwise agree a Transfer Notice shall be deemed to be served with
effect from the expiry of a period of 30 days of such cessation in
respect of 50 per cent. of the Shares of which the Executive and/or
his Permitted Transferees are the registered holders as at the date
of such Transfer Notice. The Transfer Price for the purpose of any
transfer of such Shares pursuant to such Transfer Notice shall be
equal to 50 per cent. of the market value of the Shares as agreed
between the relevant Parties or (in the absence of agreement)
determined by the Auditors.
14.3 The Company shall procure that provisions equivalent to those
contained in clause 14.1.1 shall apply to any director (other than
any CCP Director) who may be appointed in place of the Executive.
14.4 The Executive represents and warrants to CCP, Xxxxxx, Newick and to
the Purchaser that:-
14.4.1 he is not subject to any legally enforceable obligation (express,
implied, statutory, contractual or otherwise) or subject to any duty
which would or is likely to:-
14.4.1.1 prevent and/or restrict him from being engaged, concerned or
interested in any capacity in any part of the business of the
Company, unless this would be in the best interest of the Company;
14.4.1.2 prevent and/or restrict the Company from doing business with any
person, firm or company with which it might otherwise do business;
14.4.1.3 require him or any other person to give any account of profits or
render him or any other person liable in damages; or
14.4.1.4 adversely affect the implementation of this agreement and/or the
Business Plan; and
14.4.2 the Disclosure Letter contains full details of all legally
enforceable obligations undertaken by the Executive to his previous
employer and its subsidiary, associated or holding companies which
might operate to restrict his business activities, whether before or
after the cessation of his employment, by any such company and of any
legal advice obtained by him in relation to such arrangements and
their application to the business activities of the Company as
previously carried on or as envisaged by this agreement and/or the
Business Plan.
15. RESTRICTIONS ON THE EXECUTIVE
15.1 In this clause:-
"Business" means the existing business of the Company as carried out
at the date of this agreement and the proposed business of the
Company as described in the Business Plan;
"directly or indirectly" means (without prejudice to the generality
of the expression) either alone or jointly or in partnership with any
other person, firm or company or (except as the holder for investment
purposes only of securities in any company not exceeding 3 per cent
in nominal value of the securities of that class in issue or shares)
as the holder of any interest in or as an employee director agent or
representative of or consultant to any other person firm or company;
and
"Restriction Period" means the Investment Period;
15.2 The Executive undertakes to CCP, the Purchaser, Xxxxxx, Newick and
the Company that he will not (other than for and on behalf of the
Company) without the prior written consent of CCP, Xxxxxx, Newick and
the Purchaser directly or indirectly:-
15.2.1 at any time during the Restriction Period offer employment to or
employ or offer or conclude any contract for services with any person
who at any time during the Restriction Period shall have been a
director, employee, consultant or agent of the Company entitled to
emoluments (including commission if any) exceeding the annual rate of
$25,000 ("Senior Employee"); or
15.2.2 at any time during the Restriction Period knowingly assist any
competitor of the Company to a material extent in carrying on or
developing any business which may in any way be the same as or
similar to or in competition with the Business; or
15.2.3 at any time during the Restriction Period seek to contract with or
engage any person who has been contracted with or engaged to
manufacture, assemble, supply or deliver products or services to the
Company at any time during the Restriction Period or the period of 12
months prior to the date of this agreement; or
15.2.4 at any time solicit or entice or endeavour to entice any Senior
Employee of the Company away from the Company; or
15.2.5 at any time entice or endeavour to entice any person to breach his
contract for services with the Company; or
15.2.6 except as required by law at any time disclose to any person or use
for his own benefit (or that of any other person) any information or
know-how of a confidential nature concerning and relating to the
goodwill of the Company including (without limitation) information
and know-how as to products, processes, techniques, suppliers,
customers, finances, business policy and expansion or forward
planning programmes; or
15.2.7 at any time falsely represent himself as being connected with or
interested in the Company; or
15.2.8 except as required by law at any time do or say anything likely or
calculated to lead any person, firm or company to withdraw from or
cease to continue offering to the Company any rights (whether of
purchase, sale, distribution, agency or otherwise) then enjoyed by it
or in any other way to cease to do business or reduce the amount of
business it transacts with any shareholder of the Company; or
15.2.9 at any time carry on a business under the name "Global Information
Group" or any part combination or abbreviation thereof or any similar
or other name likely to confuse or mislead any part of the public.
15.3 The Executive acknowledges and agrees with CCP, Xxxxxx, Newick and
the Purchaser that:-
15.3.1 each of the sub-clauses contained in clause 15.2 constitutes an
entirely separate severable and independent covenant by and
restriction on him;
15.3.2 the duration, extent and application of each of the restrictions
contained in clause 15.2 are no greater than is necessary for the
protection of the goodwill and trade connections of the Business and
the value of the Company; and
15.3.3 if any restriction contained in clause 15.2 shall be found void but
would be valid if some part thereof were deleted such restriction
shall apply with any such deletion as may be necessary to make it
valid and effective.
16. FURTHER SHAREHOLDERS
16.1 Subject to clauses 12, 16.2 and 18.5, no allotment or transfer of any
Shares shall be made or registered other than in accordance with
clause 18 of this agreement and the Revised Bylaws nor until the
proposed allottee or transferee (if not already bound by the terms of
this agreement) has entered into a Deed of Adherence.
16.2 Within 6 months following Completion (or such longer period as CCP
shall determine) the Company shall establish an executive share
option scheme ("Scheme") for its executive directors and senior
employees. The terms of the Scheme shall be determined by the Board.
The Company shall issue such number of Shares to the Purchaser (or as
it may direct) so as to ensure that the percentage shareholdings
represented by the Sale Shares shall not in any way be reduced as a
result of the issue of new shares in the Company under the Scheme.
17. ISSUES OF SHARES
17.1 Notwithstanding anything to the contrary in this agreement or the
Revised Bylaws, no unissued Share may be issued without the consent
in writing of at least 75% of the shareholders of the Company.
17.2.1 Notwithstanding anything to the contrary in this agreement or the
Revised Bylaws but subject to clause 17.1 all unissued shares shall,
before sale or issue to any person on any terms, be offered on no
less favourable terms first to the holders of shares in the Company
in the following manner:-
17.2.1.1 the offer shall be by notice in writing and shall specify the number
and class of shares which the Company desires to issue ("Offer
Shares") and the proposed terms of the issue of the shares and shall
invite each shareholder of the Company to apply in writing within
such period ("Offer Period") as shall be specified in the notice
(being a period expiring not less than 21 days from the date of the
notice) for such maximum number of the Offer Shares as he wishes to
take and to submit his remittance for the full amount payable in
respect of the shares applied for;
17.2.1.2 the Offer Shares (or so many of them as shall have been applied for)
shall be allotted on the same terms to and amongst the shareholders
of the Company who have applied for them and who have submitted the
full remittance in respect of the shares applied for on the earlier
of:-
17.2.1.2.1 the date of expiration of the Offer Period; or
17.2.1.2.2 the date the Company receives notice in writing of the application
for or refusal of the Offer Shares from every shareholder of the
Company;
17.2.1.3 the Directors shall allocate the Offer Shares to and amongst the
applying shareholders of the Company according to the number of Offer
Shares applied for by each of such applying shareholders or, if the
number of shares applied for exceeds the number of Offer Shares, on
the basis that each such applying shareholder shall be allocated the
number of Offer Shares applied for by him up to the proportion (as
nearly as practicable) of the Offer Shares which the nominal value of
shares of whatever class held by each of them respectively bears to
the nominal value of the shares held by all such applying
shareholders. If any Offer Shares remain unallocated they shall be
allocated to and amongst those applying shareholders whose
applications have not been satisfied in full in the proportion (as
nearly as practicable) which the number of Offer Shares originally
applied for by each such applying shareholder less the number of
Offer Shares already allocated to him bears to the total number of
Offer Shares originally applied for by all such applying shareholders
less the number of Offer Shares already allocated to them;
17.2.1.4 if any shareholder of the Company is allotted fewer shares than he
has applied for, then the balance of the amount remitted by him shall
be returned to him (without interest) on the date the shares are
allotted to him;
17.2.1.5 no shareholder shall be obliged to take more than the maximum number
of shares applied for by him;
17.2.2 The Directors may dispose of any unissued shares not applied for by
the shareholders of the Company or which, by reason of any other
difficulty in apportioning the same, cannot in the opinion of the
directors be conveniently allotted under this clause 16.4 at a price
and on terms no more favourable than those at which the shares were
initially offered to the shareholders.
18. ANNOUNCEMENTS
Neither the Company nor the Executive shall (otherwise than as
required by law make any announcement or divulge any information
concerning each of CCP's, the Purchaser's, Xxxxxx'x and/or Newick's
involvement in the Company or the terms of the agreement without the
prior consent in writing of CCP, the Purchaser, Xxxxxx and Newick.
19. GENERAL
19.1 Nothing in this agreement or in any document referred to in it shall
constitute or be deemed to constitute a partnership or agency
relationship between any of the Parties, nor (save as expressly
provided herein) shall the execution, completion and implementation
of this agreement confer on any Party any power to bind or impose any
obligations on any other Party or to pledge the credit of any other
Party or to create any fiduciary relationship with any other Party.
19.2 This agreement together with the Revised Bylaws and any other
documents which this agreement expressly requires shall be signed as
executed shall constitute the entire understanding and agreement
between the Parties in relation to the subject matter of this
agreement, expressly exclude any warranty, condition or other
undertaking implied at law or by custom and supersede all previous
agreements and understandings between the Parties with respect
thereto and each of the Parties acknowledges and confirms that it
does not enter into this agreement in reliance on any representation,
warranty or other undertaking not fully reflected in the terms of
this agreement, the Revised Bylaws or any other document which this
agreement expressly requires shall be signed as executed.
19.3 Any variation of this agreement shall be binding only if it is
recorded in a document signed by or on behalf of the Parties.
19.4 The Executive may not assign or delegate any of his rights or
obligations under this agreement or any of the documents which this
agreement expressly requires to be signed or executed in whole or in
part (otherwise than pursuant to a transfer of Shares in accordance
in all respects with the provisions and requirements of this
agreement and of the Revised Bylaws). Notwithstanding anything to the
contrary contained in the Revised Bylaws, each of CCP, Xxxxxx, Newick
and the Purchaser shall be free to assign any of its rights or
obligations under this agreement or any of the documents which this
agreement expressly requires to be signed or executed in whole or in
part.
19.5 Any right or remedy of the Parties in respect of a breach of any
provision of this agreement shall be in addition and without
prejudice to all other rights and remedies of the Parties and no
failure to exercise or delay in exercising or enforcing any right or
remedy shall constitute a waiver by that Party of that or any of its
other rights or remedies and no single or partial exercise or
enforcement of any right or remedy shall preclude or restrict the
further exercise or enforcement of any such right or remedy.
19.6 In the event of any conflict between the Revised Bylaws and this
agreement, CCP, Koenig, Newick, the Purchaser and the Executive agree
to consent to the holding of a general meeting of the Company on
short notice at which a resolution in a form prepared by the Company
and approved by CCP, Xxxxxx, Newick and the Purchaser (such approval
not to be unreasonably withheld or delayed) is proposed to amend the
Bylaws so that they do not conflict with this agreement and pending
the passing of such resolution the Executive and CCP, Xxxxxx, Newick
and the Purchaser agree that the terms of this agreement shall
prevail so as to govern the exercise by the Executive and CCP and the
Purchaser of their respective rights as shareholders in the Company.
19.7 If any of the provisions of this agreement are held to be invalid,
illegal or unenforceable in any respect under any law, the validity
legality or enforceability of the remainder of this agreement shall
not be affected.
19.8 The Parties shall and shall use all reasonable endeavours to procure
that any necessary third party shall do, execute and perform all such
further deeds, documents, assurances, acts and things as may be
reasonably required to give effect to this agreement including,
without limitation, calling meetings of shareholders of the Company,
the Board and voting at all such meetings in favour of all
resolutions remaining if desirable for such purpose and the signing
of all waivers of pre-emption rights which any Shareholder may have
in relation to the issue of transfer of Shares.
19.9 Each of the obligations, representations, warranties, indemnities and
undertakings entered into or made by or on behalf of any of the
Parties (excluding any obligation fully performed at Completion)
shall continue in full force and effect notwithstanding Completion
taking place.
19.10 This agreement may be executed in any number of counterparts and by
the different Parties on separate counterparts, each of which when
executed and delivered shall constitute an original, but all the
counterparts together shall constitute one and the same agreement.
20. COMMUNICATIONS
20.1 All communications between the Parties with respect to this agreement
shall be in writing and delivered by hand or sent by pre-paid post
(first class if inland, airmail if overseas) or facsimile telecopier
("fax") to the address of the addressee as set out in this agreement,
or to such other address or fax number as the addressee may from time
to time have notified for the purposes of this clause.
20.2 All communications to be sent to CCP and/or the Purchaser and/or
Xxxxxx and/or Newick shall be sent to the person whose name is given
in clause 19.4 ("Representative") and each of CCP and the Purchaser
and Xxxxxx and Newick agrees that any communication received by the
Representative shall be deemed to be communication to each of them.
20.3 Communications shall be deemed to have been received:-
20.3.1 if delivered by hand, on the day of delivery;
20.3.2 if sent by first class post, two business days after posting
exclusive of the day of posting (or five business days in the case of
a posting to an address outside the United Kingdom);
20.3.3 if sent by fax at the time of transmission or, if the time of
transmission is not during the addressee's normal business hours, at
9.30 am on the next business day.
20.4 Communications addressed to the Company shall be marked for the
attention of the Directors and communications addressed to CCP and/or
the Purchaser and/or Xxxxxx and/or Newick shall be marked for the
attention of Xxx Xxxxxxxx and communications addressed to the
Executive shall be sent to the Executive .
20.5 In proving service:-
20.5.1 by delivery by hand, it shall be necessary only to produce a receipt
for the communication signed by or on behalf of the addressee;
20.5.2 by post it shall be necessary only to prove that the communication
was contained in an envelope which was duly addressed and posted in
accordance with this clause; and
20.5.3 by fax it shall be necessary only for the communication or a
confirmatory letter to have been delivered by hand or sent by first
class post on the same day but failure of the addressee to receive
such confirmation shall not invalidate the relevant communication
deemed given by fax.
21. COSTS
The Company shall pay each Party's costs in relation to the
preparation, execution and carrying into effect of this agreement and
of all the other documents referred to in it.
22. PROPER LAW
22.1 This agreement shall be governed by and construed in all respects in
accordance with the laws of England.
22.2 In relation to any legal action or proceedings arising out of or in
connection with this agreement ("Legal Proceedings"), each of the
parties to this agreement (other than CCP, Xxxxxx, Newick and the
Purchaser) who is not or who ceases to be resident in England
("Relevant Parties") hereby irrevocably submits to the exclusive
jurisdiction of the English Courts and waives any objection to Legal
Proceedings in such Courts on the grounds of venue or on the grounds
that the Legal Proceedings have been brought in an inconvenient
forum. These submissions shall not affect the right of any other
party to take Legal Proceedings in any other jurisdiction, nor shall
the taking of Legal Proceedings in any jurisdiction preclude any
party from taking Legal Proceedings in any other jurisdiction.
22.3 Each of the Relevant Parties hereby undertakes to CCP, Xxxxxx, Newick
and the Purchaser and agrees irrevocably to appoint, and each hereby
appoints, Titmuss Sainer Dechert to receive at its address set out at
the beginning of this agreement, for it and on its behalf, service of
process in any Legal Proceedings in England. Such service shall be
deemed completed on delivery to such address (whether or not it is
forwarded to or received by the relevant appointor).
Thus Agreed between the Parties, on 14 January 2000, and signed in threefold.
/s/Xxxxxxx X. Xxxx /s/Intertrust (Curacao) N.V.
-------------------------------------------- -------------------------------------------------
Xx. X.X. Xxxx, for and on behalf of Xxxxxxx Xxxxx, Managing Director of Intertrust
Global Information Group U.S.A. Inc. (Curacao) N.V. , for Jolec Trading Limited
/s/Xxxxxxx X. Xxxx /s/Xxxxx X. Xxxxxx
-------------------------------------------- ----------------------------------------
Xx. X.X. Xxxx Xxxxx X. Xxxxxx, for and on behalf of
Xxxxxx Invest AG
/s/Xxxxxx van Wijngaarden /s/Intertrust (Curacao) N.V.
-------------------------------------------- ----------------------------------------------------
Mr Philip van Wijngaarden Xxxxxxx Xxxxx, Managing Director of Intertrust
Chatelin Capital Partners Ltd. (Curacao) N.V., for and on behalf of
Newick Developments Limited
FIRST SCHEDULE
THE COMPANY
Date of Incorporation:- 6 April 1998
Incorporated in the State of Delaware
Registered Office:- 00 Xxxx Xxxxx xxxxxx Xxxxx Xxxxxxxx 00000 XXX
Authorised Capital:- 10,000 shares of common stock par value US$0.01 each
Issued Capital:- 1,000 shares of common stock
Shareholders:- Xxxxxxx Xxxx - 800 Shares; Xxxx Xxxx - 100 Shares; Jouke VPJ
Brada - 10 Shares; Henri BG Sijthoff - 45 Shares; Xxxxxxx Xxxxxxxxx - 45 Shares.
Director:- Xxxxxxx Xxxx
Secretary:- Xxxx Xxxx
Accounting Reference Date:- 31
December 1999 Subsisting Mortgages and Charges:- None
SECOND SCHEDULE
WARRANTIES
Representations and Warranties. The Executive and the Company hereby represent
and warrant to and undertake with CCP, Xxxxxx, Newick and to the Purchaser
as follows:-
Organization. The Company (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, (b) has
all requisite corporate power and authority to own, lease and operate its
properties, to carry on its business as presently conducted and to execute,
deliver and perform this agreement, and (c) is duly qualified as a foreign
corporation and in good standing to do business in all such jurisdictions, if
any, in which the conduct of its business or its ownership, leasing or operation
of property requires such qualification, except for those jurisdictions in which
failure to so qualify would not have a material adverse effect on the business
or assets of the Company. Executive has provided CCP with correct and complete
copies of the Company's Certificate of Incorporation and Bylaws as in effect on
the date hereof, which are contained in the Disclosure Letter.
Equity Investments. The Company has never had, nor does it presently
have, any subsidiaries, nor has it owned, nor does it presently own, any capital
stock or other proprietary interest or other voting control, directly or
indirectly, in any corporation, association, trust, partnership, limited
liability company, joint venture or other entity.
Capitalization. The authorized capital stock of the Company immediately
upon the consummation at the Closing of the transactions contemplated hereby,
and giving effect thereto, shall consist of 10,000 Shares, of which 1,000 Shares
are validly issued and outstanding, and fully paid and nonassessable, with only
limited liability attaching solely to the ownership thereof under applicable
state law. The first schedule contains accurate details of (i) all holders of
capital stock of the Company, including the number of shares of capital stock of
the Company held by each such holder, and (ii) all outstanding warrants,
options, agreements, convertible securities or other commitments pursuant to
which the Company is or may become obligated to issue any shares of its capital
stock or other securities of the Company, which names all persons entitled to
receive such shares or other securities and the shares of capital stock or other
securities required to be issued thereunder. There are no preemptive or similar
rights to purchase or otherwise acquire shares of capital stock of the Company
pursuant to any provision of law, the Certificate of Incorporation or Bylaws or
any agreement to which the Company is a party, or otherwise, except as
contemplated by this agreement and contained in Appendix B. There is no
agreement, restriction or encumbrance (such as a right of first refusal, right
of first offer, proxy, voting agreement, etc.) with respect to the sale or
voting of any shares of capital stock of the Company (whether outstanding or
issuable upon conversion or exercise of outstanding securities) except as
contemplated by this agreement. The information contained in the first schedule
is accurate and complete.
Financial Information. The Business Plan contains all basic information
which would be included in annual accounts of the Company for the period
beginning on the date of incorporation of the Company and ending on 31 December
1999. Within 30 days upon Completion the Company shall provide the annual
accounts in an agreed form to CCP.
Absence of Undisclosed Liabilities. Except as disclosed in the
Disclosure Letter, as of the date of this agreement, (a) the Company had no
liability of any nature (matured or unmatured, fixed or contingent) which was
not provided for or disclosed in the Disclosure Letter and on the statement of
accounts payable, and (b) all liability reserves established by the Company were
adequate in all respects. There are no loss contingencies (as such term is used
in Statement of Financial Accounting Standards No. 5 issued by the Financial
Accounting Standards Board in March 1975) .save as disclosed in the Disclosure
Letter.
Absence of Changes. Since December 1st, 1999, to the best of the
Executive's knowledge there has not been (a) any adverse change in the financial
condition, results of operations, assets, liabilities or business of the
Company, taken as a whole, (b) any borrowing or agreement to borrow any funds or
any liability or obligation of any nature whatsoever (contingent or otherwise)
incurred by the Company, other than current liabilities or obligations incurred
in the ordinary course of business, (c) any asset or property of the Company
made subject to a lien of any kind, except as documented in Appendix B (d) any
waiver of any valuable right of the Company, or the cancellation of any debt or
claim held by the Company, (e) any payment of dividends on, or other
distributions with respect to, or any direct or indirect redemption or
acquisition of, any shares of the capital stock of the Company, or any agreement
or commitment therefor, (f) any issuance of any stocks, bonds or other
securities of the Company or options, warrants or rights or agreements or
commitments to purchase or issue such securities or grant such options, warrants
or rights, (g) any mortgage, pledge, sale, assignment or transfer of any
tangible or intangible assets of the Company, except with respect to tangible
assets in the ordinary course of business, (h) any loan by the Company to any
officer, director, employee or stockholder of the Company, or any agreement or
commitment therefor, (i) any damage, destruction or loss (whether or not covered
by insurance) adversely affecting the assets, property or business of the
Company, (j) any extraordinary increase, direct or indirect, in the compensation
paid or payable to any officer, director, employee or agent of the Company, (k)
any change in the accounting methods or practices followed by the Company or (l)
any commitment (contingent or otherwise) to do any of the foregoing.
Encumbrances; Burdensome Restrictions. The Company owns outright all of
its property and assets, real, personal or fixed, tangible or intangible,
reflected which are used or useful in the business of the Company, subject to no
mortgages, liens, security interests, pledges, charges or other encumbrances of
any kind, except as represented in Appendix B, in document nr. 15. The Company
is not obligated under any contract or agreement or subject to any charter or
other corporate restriction which materially adversely affects the Company's
business, properties, assets, prospects or condition (financial or otherwise).
Intellectual Property Rights
Intellectual Property. There are no industrial and intellectual
property rights, including without limitation, proprietary information, patents,
patent applications, patent rights, mask works, mask work applications,
trademarks, trademark applications, trade names, service marks, service xxxx
applications, copyrights, copyright applications, know-how, certificates of
public convenience and necessity, franchises, licenses, trade secrets,
proprietary processes and formulae ("Intellectual Property Rights") necessary or
required to enable the Company to carry on its businesses as now conducted and
as presently proposed to be conducted as described in the Business Plan. A
complete list of the Company's Intellectual Property Rights is contained in the
Disclosure Letter. To the best of the Executive's knowledge, no third party has
any ownership right, title, interest, claim in or lien on any of the Company's
Intellectual Property Rights. The Company has not granted or assigned to any
other person or entity any right to make, have made, assemble or sell the
products or proposed products or to provide the services or proposed services of
the Company.
Proprietary Information of Third Parties. The Company has not
materially violated or infringed, and is not currently materially violating or
infringing, and the Company has not received any communications alleging that
the Company (or any of its employees or consultants) has materially violated or
infringed or, by conducting its businesses as presently proposed to be
conducted, would materially violate or infringe, the Intellectual Property
Rights of any other person or entity. No third party has claimed or has reason
to claim that any Designated Person has (a) materially violated or may be
violating any of the terms or conditions of his employment, non-competition or
non-disclosure agreement with such third party, (b) disclosed or may be
disclosing or utilized or may be utilizing any trade secret or proprietary
information or documentation of such third party or (c) interfered or may be
interfering in the employment relationship between such third party and any of
its present or former employees. No third party has requested information from
the Company which suggests that such a claim might be contemplated. No
Designated Person has employed or proposes to employ any trade secret or any
information or documentation proprietary to any former employer, and no
Designated Person has violated any confidential relationship which such
Designated Person may have had with any third party, in connection with the
development, manufacture or sale of any product or proposed product or the
development or sale of any service or proposed service of the Company, and the
Company has no reason to believe there will be any such employment or violation.
None of the execution or delivery of this agreement, or the carrying on of the
business of the Company as officers, employees or agents by any Designated
Person, or the conduct or proposed conduct of the business of the Company, will
conflict with or result in a breach of the terms, conditions or provisions of or
constitute a default under any contract, covenant or instrument under which any
such Designated Person is obligated or under any judgment, decree or order of
any court or administrative agency to which such Designated Person is subject.
Prior Art; Technical Information. All prior art known to the Company
which may be or may have been pertinent to the examination of any US patent or
patent application contained in the Disclosure Letter has been cited to the US
Patent and Trademark Office. To the best of the Company's knowledge, all
technical information developed by and belonging to the Company which has not
been patented has been kept confidential. The Executive, however, has disclosed
certain individuals possess illegal copies of the source code.
Litigation. There is no action, suit, proceeding, claim, arbitration or
investigation ("Action") pending (or, to the best of the Company's knowledge,
currently threatened) against the Company, its activities, properties or assets
or, to the best of the Company's knowledge, against any Designated Person in
connection with such Designated Person's relationship with, or actions taken on
behalf of, the Company, other than those referred to in appendix B, under
Litigation. There is no factual or legal basis for any such Action that might
result, individually or in the aggregate, in any material adverse change in the
business, properties or financial condition of the Company. The Company is not a
party to or subject to the provisions of any order, writ, injunction, judgment
or decree of any court or government agency or instrumentality and there is no
Action by the Company currently pending or which the Company intends to
initiate.
No Defaults. The Company is not in default (a) under its Certificate of
Incorporation or Bylaws, or under any note, indenture, mortgage, lease, purchase
or sales order, or any other material contract, agreement or instrument to which
it is a party or by which it or any of its property is bound or affected, except
for the defaults mentioned under Litigation or expressly mentioned therein, or
(b) with respect to any order, writ, injunction, judgment or decree of any court
or any federal, state, municipal or other domestic or foreign governmental
department, commission, board, bureau, agency or instrumentality. To the best of
its knowledge, there exists no condition, event or act which constitutes, or
which after notice, lapse of time or both, would constitute, a default under any
of the foregoing.
Labour agreements and Actions. The Company is not bound by or subject
to any contract, commitment or arrangement with any labour union, and to the
Company's best knowledge, no labour union has requested, sought or attempted to
represent any employees, representatives or agents of the Company. There is no
strike or other labour dispute involving the Company pending nor, to the
Company's best knowledge, threatened, nor is the Company aware of any labour
organization activity involving its employees. The Company is not aware that any
officer or employee intends to terminate their employment with the Company nor
does the Company have any present intention to terminate the employment of any
of its officers or employees.
Compliance. To the best of its and the Executive's knowledge the
Company (a) has complied in all material respects with all federal, state, local
and foreign laws, ordinances, regulations and orders applicable to its business
or the ownership of its assets, and the Company has not received notice of any
claimed default with respect to such laws, ordinances, rules and regulations;
and (b) has or has applied for all federal, state, local and foreign
governmental licenses and permits necessary or required to enable it to carry on
its business as now conducted and as presently proposed to be conducted. Such
licenses and permits, if issued, are in full force and effect, no violations
have been recorded in respect of any such licenses or permits, and no proceeding
is pending or, to the best of the Company's knowledge, threatened to revoke or
limit any thereof. None of the aforesaid licenses and permits shall be affected
in any material adverse respect by this agreement.
Authorization of this agreement.
The execution, delivery and performance by the Company of this
agreement have been duly authorized by all requisite corporate action by the
Company, and each constitutes the valid and binding obligation of the Company
and Executive, enforceable in accordance with its terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium and similar laws affecting
creditors' rights generally and to general principles of equity. The execution
and delivery of this agreement by the Company, the consummation of the
transactions contemplated hereby and thereby and compliance with the provisions
hereof and thereof by the Company, will not (a) violate any provision of law,
statute, rule or regulation, or any ruling, writ, injunction, order, judgment or
decree of any court, administrative agency or other governmental body applicable
to the Company or (b) materially conflict with or result in any material breach
of any of the terms, conditions or provisions of, or constitute (with due notice
or lapse of time, or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, the Certificate of Incorporation or Bylaws,
or under any note, indenture, mortgage, lease, purchase or sales order or other
material contract, agreement or instrument to which the Company is a party or by
which it or any of its property is bound or affected, or (c) result in the
creation of any lien, security interest, charge or encumbrance upon any of the
properties or assets of the Company.
Executive represents as to himself that he has full legal right, power
and authority to enter into this agreement and to perform his obligations
hereunder without the need for consent of any other person, and that this
agreement has been, and each other document, certificate or instrument to be
executed by Executive in connection herewith will be, duly and validly executed
and delivered by Executive and constitutes, or will constitute, the legal, valid
and binding obligation of Executive, enforceable against him in accordance with
its terms.
Transactions with Affiliates. None of Executive nor any affiliate, as
defined in Rule 405 under the Securities Act of 1933, as amended (the
"Securities Act") ("affiliate"), of Executive (other than the Company) nor any
of the Company's officers, directors or employees (or any associate of the
foregoing persons) has any interest, directly or indirectly, in any lease, lien,
contract, license, encumbrance, loan or other agreement or commitment to which
the Company is a party, or any property or asset used or owned by, or any
interest in any supplier of, the Company. The Company is not materially
indebted, directly or indirectly, to (a) Executive or to any such affiliate or
associate of Executive (other than in respect of items (and amounts) fully
disclosed in the Disclosure Letter) or (b) any officer, director or employee of
the Company (or to any of their affiliates or associates) for any liability or
obligation, whether arising by reason of stock ownership, oral or written
agreement or understanding or otherwise. The Disclosure Letter contains a
complete and accurate list of all employees of the Company owing more than
$1,000 (except in respect of advances for business expenses, none of which
exceeds $2,000 individually or $5,000 in the aggregate) in principal to the
Company, setting forth the amounts owned, the applicable interest rates, a
description of the security and the maturity dates of all such debts.
No Governmental Consent or Approval Required. Except for the filing of
any notice subsequent to the Completion that may be required under applicable
federal and/or state securities laws (which, if required, shall be filed on a
timely basis as may be so required), no consent, approval or authorization of,
or declaration to, or filing with, any person (governmental or private) is
required for the valid authorization, execution, delivery and performance by the
Company of this agreement.
Agreements. The Company is not a party to any written or oral contract
not made in the ordinary course of business and, whether or not made in the
ordinary course of business, the Company is not a party to any written or oral
(a) contract with any labour union, (b) contract for the future purchase of
fixed assets or for the future purchase of materials, supplies or equipment in
excess of normal operating requirements, (c) contract for the employment of any
officer, individual employee or other person on a full-time basis or any
contract with any person on a consulting basis, (d) bonus, pension,
profit-sharing, retirement, stock purchase, stock option, hospitalization,
medical insurance or similar plan, contract or understanding in effect with
respect to employees or any of them or the employees of others, (e) agreement or
indenture relating to the borrowing of money or to the mortgaging, pledging or
otherwise placing of a lien on any assets of the Company, (f) guaranty of any
obligation for borrowed money or otherwise, (g) lease or agreement under which
the Company is lessee of or holds or operates any property, real or personal,
owned by any other party, (h) lease or agreement under which the Company is
lessor of or permits any third party to hold or operate any property, real or
personal, owned or controlled by the Company, (i) agreement or other commitment
for capital expenditures in excess of $10,000.00, (j) distributor, dealer,
manufacturer's representative or sales agency agreement which is not terminable
on less than ninety (90) days' notice without cost or other liability to the
Company (except for agreements which, in the aggregate, are not material to the
business of the Company); (k) contract, agreement or commitment under which the
Company is obligated to pay any broker's fees, finder's fees or any such similar
fees, to any third party, (l) contract, agreement or commitment under which the
Company has issued, or may become obligated to issue, any shares of capital
stock of the Company, or any warrants, options, convertible securities or other
commitments pursuant to which the Company is or may become obligated to issue
any shares of its capital stock, (m) contract, agreement or commitment under
which the Company is obligated to repurchase or otherwise acquire or retire any
shares of its capital stock, or (n) any other contract, agreement, arrangement
or understanding which is material to the operation of the business of the
Company. The Company has furnished to counsel to CCP true and correct copies of
all such written agreements and other documents.
Brokers. The Executive has not employed any broker or finder in
connection with the transactions contemplated by this agreement.
Registration Rights. Except as contemplated by this agreement, no
person has any right to cause the Company to effect the registration under the
Securities Act of any shares of Common Stock or any other securities (including
without limitation, debt securities) of the Company.
Compliance with ERISA; Benefit Plans. The Company does not (a)
maintain, and it has never maintained, any employee benefit plan subject to
ERISA or (b) contribute to, and has never contributed to, any such employee
benefit plan maintained by any other person or entity.
Environmental Matters. No Hazardous Substances have been used, handled,
generated, processed, treated, stored, transported to or from, released,
discharged or disposed of by the Company or any third party on, about or beneath
any real property owned or leased by the Company, the result of which would have
a material adverse effect on the Company. For purposes of this agreement, the
term "Hazardous Substances" shall mean any substance regulated under any
federal, state or local environmental law or regulation.
Disclosure. Neither this agreement nor any other written document, certificate,
instrument or statement furnished or made to CCP by or on behalf of the Company
or the Executive in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein and therein not
misleading. There is no fact known to the Company which materially adversely
affects the business, properties or financial condition of the Company which has
not been set forth in this agreement or in the other documents, certificates,
instruments or statements furnished to CCP by or on behalf of the Company.
Inventory. All of the inventories of the Company are valued at the lower of cost
or market, the cost thereof being determined principally on an average cost
basis, except as disclosed in the Disclosure letter.
Accounts Receivable. All of the accounts and notes receivable of the Company
represent amounts receivable for merchandise actually delivered or services
actually provided (or, in the case of non-trade accounts or notes represent
amounts receivable in respect of other bona-fide business transactions), have
arisen in the ordinary course of business, have been billed and are generally
due and collectible within an average of 60 days after such billing and are not,
to the knowledge of the Company and the Executive, subject to any defenses,
counterclaims or offsets. The Disclosure Letter contains accurate details of (a)
the total amount of accounts receivable of the Company outstanding as of the
last day of the month immediately preceding the present month and (b) the agings
of such receivables based on the following Annex: 0-30 days, 31-60 days, 61-90
days, and over 90 days, from the due date thereof.
SECTION 23. Ownership of Shares. The Executive owns 800 Shares free and
clear of all liens, charges, claims, security interests and adverse claims.
THIRD SCHEDULE
RESTRICTED TRANSACTIONS
1. Increase, reduce or otherwise alter the authorised or issued share or
loan capital (including the share premium account or other capital
reserves) of the Company or its capital structure or make any variation
to the rights attached to any of its shares.
2. Grant or create any option or other like rights to acquire any shares
or securities convertible into shares in the Company, purchase or
redeem or make any payment to any person for giving up his rights to
any share capital on its cancellation or extinguishment.
3. Make any repayment of any loan stock or any loan notes issued by the
Company or any term loan made available to the Company.
4. Create or permit the creation of or suffer to subsist any mortgage or
charge whether fixed or floating or any other encumbrance or security
interest of a similar nature on the undertaking, property or assets or
any part thereof of the Company or issue any debentures or debenture
stock.
5. Enter into or give or permit or suffer to subsist any guarantee of or
indemnity in respect of the due payment of money or performance of any
contract, engagement or obligation by any other person or otherwise.
6. Borrow or raise monies or obtain any advance or credit (other than
normal trade credit and hire purchase and leasing commitments) if as a
result the aggregate amount of all borrowings would exceed $25,000 the
projections in the Financial Plan or factor or in any other way dispose
of or encumber any of the Company's book debts.
7. Borrow or raise any monies which are not available for use by the
Company.
8. Make any loans or advances or provide any credit (other than normal
trade credit) in excess of $10,000 or acquire any loan capital of any
corporate body.
9. Incur any capital expenditure exceeding the amount provided therefor in
the capital expenditure budget in the then current Financial Plan by
$15,000 for any individual item or $35,000 in aggregate and the
expression "capital expenditure" shall without limitation include the
following:-
9.1 entering into hire purchase or hiring or leasing agreements or
arrangements for purchase by instalments;
9.2 purchasing or selling any fixed assets;
9.3 paying compensation for loss of office;
9.4 providing or purchasing of any pension or annuity;
9.5 establishing any bonus, profit sharing or other incentive scheme for
directors and/or employees;
9.6 purchasing or acquiring any shares, debentures, debenture stock,
mortgages or securities or interest in any other company, trust,
partnership or other body.
10. Make any material deviation from the then current Financial Plan.
11.1 Engage or dismiss any director or employee earning remuneration
(including all fees payable to him by the Company) exceeding $50,000
per annum.
11.2 Increase the remuneration (including all fees payable to him by the
Company) of any director or employee currently earning at least $50,000
by more than 10% per annum.
11.3 In relation to any such director or employee agree to or accept any
variation in his terms of employment (other than agreeing to increase
his remuneration within the limitation referred to in paragraph 11.2),
waive or agree not to take any action in respect of any material breach
by any such person of his contract of employment.
12. Lease, assign or grant any licence in respect of any property or assets
other than the sale of current assets in the ordinary course of trading
or grant or dispose of any interest in land owned or leased by the
Company or take or omit to take any action which could prejudice the
continuation of any lease to which it is entitled.
13. Dispose, whether outright or by way of licence or otherwise howsoever,
any Investment Property rights owned by the Company.
14.1 Enter into or vary any unusual or onerous contract or agreement or
arrangement or transaction or, otherwise than in the ordinary course of
trading and on an arm's length basis, any material or major or long
term contract.
14.2 Enter into any transaction or carry out any dealing which is not on
arm's length terms or give any service otherwise than at market value.
15. Enter into or compromise or settle any substantial litigation other
than in the ordinary course of business.
16. Apply for any of the shares in the Company to be listed or dealt in on
the London Stock Exchange or any recognised investment exchange.
17. Make a substantial alteration or reduction in the nature or extent of
the business carried on by the Company.
18. enter into any partnership or joint venture or consortium arrangement.
19. Dispose of the whole or a material part of the undertaking assets or
shares of the Company or any interest therein or form or acquire any
subsidiary or subsidiary undertaking or acquire the whole or part of
the undertaking assets or shares of any other person, firm or company.
20. Cease or propose to cease to carry on the business of the Company or
take any steps to wind up the Company save where such company is
insolvent or apply to petition to the Court for any creditors' order to
be made in respect of the Company.
21. Appoint or remove any executive director of the Company.
22. Delegate any matter to any committee of directors of the Company unless
a CCP Director is a member of such committee or take any decisions
which are material to the Company otherwise than at a meeting of the
directors.
23. Make any change to the Company's:-
23.1 auditors;
23.2 bankers or the terms of the mandate given to such bankers in relation
to its accounts;
23.3 accounting reference date.
24. Make any alteration to the certificate or bylaws of the Company (other
than by adopting the Revised Bylaws).
25. Make any distribution by way of dividend out of the profits of the
Company or otherwise or agree to capitalise any reserves or apply any
amount standing to the credit of the share premium account or capital
redemption reserve for any purpose.
26. Establish any bonus, profit sharing, share option or other incentive
scheme (whether legally binding or not) for directors and/or employees
of the Company or vary any such scheme which has been established or
grant any option over or in respect of any shares in the capital of the
Company pursuant to such a scheme (except as set out in the Business
Plan).
27. Appoint or remove the Auditor as referred to, i.a. in Clause 7 of this
agreement.
FOURTH SCHEDULE
DEED OF ADHERENCE
THIS DEED is made on 200[ ]
BETWEEN:
(1) [include names and addresses of existing parties other than Transferor];
(2) [[ ] of [ ]] [[
], a company registered in [ ] under number [ ] the registered office of which is at [
]] ("Transferor");
(3) [[ ] of [ ]] [[
], a company registered in [ ] under number [ ] the registered office of which is at [
]] ("New Shareholder").
1. DEFINITIONS AND INTERPRETATIONS
1.1 In this deed, unless the context otherwise requires, words defined in the Shareholders agreement shall have the
same meanings in this deed and:
"Completion" means the completion of the sale and transfer of the Transferred Interest to take place at the
offices of [
] on [ ] in accordance with the Transfer agreement;
"Excepted Rights" has the meaning set out in clause 4;
"Share Purchase and Shareholders' agreement" means the agreement dated [ ] 2000 and made between (1)
Global Information Group USA, Inc., (2) Chatelin Capital Partners Limited, (3) Jolec Trading Limited (4) Xxxxxxx
Xxxx (5) Xxxxxx and (6) Newick and relating to the Company;
["Transfer agreement" means an agreement to be dated [ ] and made between the Transferor and the New
Shareholder;]
"Transfer Date" has the meaning set out in clause [3.1];
"Transferred Interest" means the transfer of [ ] Shares from the Transferor to the New Shareholder.
1.2 The provisions of clause 1.2 of the Share Purchase and Shareholders' agreement shall apply to this deed.
1.3 Headings and titles are used for ease of reference only and do not affect the interpretation of this agreement.
2. RECITALS
2.1 The Transferor [is a party to] [has acceded by means of a deed dated [ ] to] the Share Purchase
and Shareholders' agreement.
2.2 The Transferor wishes to transfer to the New Shareholder the Transferred Interest and the New Shareholder has
agreed to purchase the Transferred Interest [subject to and in accordance with the terms and conditions of the
Transfer agreement] and has agreed to execute this deed of adherence pursuant to clause 16.1] of the Share
Purchase and Shareholders' agreement.
3. UNDERTAKINGS OF THE NEW SHAREHOLDER
3.1 In consideration of the agreement of the Transferor to transfer the Transferred Interest to the New Shareholder,
the New Shareholder undertakes [subject to clause [3.2],] to each other party to this deed that it will, with
effect from the date of transfer by the Transferor to the New Shareholder of the Transferred Interest ("Transfer
Date") and without prejudice to any liability of the Transferor in respect of any breach by it of its
obligations under the Shareholders agreement prior to the Transfer Date, assume, perform and comply with each of
the obligations of the Transferor under the Share Purchase and Shareholders' agreement as if it had been a party
to the Share Purchase and Shareholders' agreement at the date of its execution.
[3.2 In consideration of the undertakings given by the New Shareholder under clause [3.1], the parties to this deed
acknowledge and agree that the obligations of the Transferor under the Share Purchase and Shareholders'
agreement shall, with effect from the Transfer Date cease.]
NOTE: This applies only of a transfer of all the Transferor's Shares.
4. RIGHTS OF THE NEW SHAREHOLDER
The parties to this deed (other than the New Shareholder) agree that there should be accorded to the New
Shareholder with effect from the Transfer Date all the rights of the Transferor with respect to the Transferred
Interest (in each case without prejudice to the rights of the Transferor under the Share Purchase and
Shareholders' agreement in respect of any breach by any other party to it of its obligations thereunder at any
time prior to the Transfer Date ("Excepted Rights") as if the New Shareholder had been a party to the Share
Purchase and Shareholders' agreement at the date of its execution and, with effect from the Transfer Date, the
Transferor shall cease to be entitled to those rights.
5. NOTICES
For the purposes of clause 21 of the Share Purchase and Shareholders agreement (relating to communications),
communications addressed to the New Shareholder shall be marked for the attention of [" "] to the address of the
New Shareholder as set out in this deed, or to such other address or fax number in England as the New
Shareholder may from time to time have notified to each of the other parties to this deed and the Company for
this purpose.
6. ASSIGNMENT AND TRANSFER
The parties to this deed hereby acknowledge and agree that no party shall have any right to assign, transfer or
dispose of the benefit (or any part thereof) or the burden (or any part thereof) of this deed without the prior
written consent of the other parties.
7. GENERAL PROVISIONS
The provisions of clauses 19 and 20 of the Shareholders' Agreement shall apply mutatis mutandis to this deed as
if they were expressly set out in this deed.
8. PROPER LAW
Clause 23 of the Share Purchase and Shareholders' agreement shall apply to this deed.
FIFTH SCHEDULE
AGREED PRINCIPLES FOR FIRST LOAN AGREEMENT
1. The Parties agree that the Company shall enter into a subordinated loan
agreement ("First Loan Agreement") with Xxxxxx and Newick ("Lenders")
as soon as reasonably practicable after the date of this agreement and
in any event no later than the date of Completion, pursuant to which
the Company shall agree to borrow from the Lenders and the Lenders
shall together agree to lend to the Company an aggregate principal
amount of US$300,000 ("First Loan"). The First Loan will be advanced at
Completion.
2. The First Loan shall carry interest at the rate of 6.5 per cent. per
annum. Interest shall accrue on a daily basis and shall be payable on
the date which falls 18 months from the date of Completion and every 3
months thereafter. The First Loan shall be repayable in full on the
sooner to occur of (i) an IPO or Third Party Sale and (ii) the date 5
years after the date of Completion.
3. The principal of the First Loan shall be advanced in one tranche on the
date of Completion.
4. The Company shall pay to CCP a fee of 2.5 per cent. of the principal
amount of the First Loan, payable on the date on which the First Loan
is advanced.
5. The First Loan Agreement will contain usual events of default and
conditions precedent and the usual commercial covenants, warranties,
indemnities and representations from the Company.
SIXTH SCHEDULE
AGREED PRINCIPLES FOR SECOND LOAN AGREEMENT
1. The Parties agree that the Company shall enter into a subordinated loan
agreement ("Second Loan Agreement") with Xxxxxx and Newick ("Lenders")
as soon as reasonably practicable after the date of this agreement and
in any event no later than 180 days after Completion, pursuant to which
the Company shall agree to borrow from the Lenders and the Lenders
shall together agree to lend to the Company an aggregate principal
amount of US$1,200,000 ("Second Loan").
2. The Second Loan shall carry interest at the rate of 6.5 per cent. per
annum. Interest shall accrue on a daily basis and shall be payable on
the date which falls 18 months from the date of Completion and every 3
months thereafter. The Second Loan shall be repayable in full on the
sooner to occur of (i) an IPO or Third Party Sale and (ii) the date 5
years after the date of Completion.
3. The principal of the Second Loan shall be advanced in four equal
tranches if in the reasonable opinion of the Board the Company's cash
flow statements show a need for such advances.
4. The Company shall provide the lender with cash flow statements in a
form acceptable to the lender on a monthly basis.
5. The Company shall pay to CCP a fee of 2.5 per cent. of the principal
amount of the Second Loan Agreement, payable on the date of advance of
the Second Loan.
6. The Second Loan Agreement will contain usual events of default and
conditions precedent and the usual commercial covenants, warranties,
indemnities and representations from the Company.
7. The Second Loan shall be applied in accordance with the Business Plan
subject to the terms of this agreement
8. The Second Loan shall be secured in accordance with the provisions of
clause 12.4 of this agreement and shall be conditional upon the
Company's compliance with that clause.
SEVENTH SCHEDULE
AGREED PRINCIPLES FOR CONSULTANCY AGREEMENT
1. The Parties agree that the Company shall enter into a consultancy
agreement ("Consultancy Agreement") with CCP as soon as reasonably
practicable after the date of this agreement and in any event no later
than the date of Completion, pursuant to which CCP shall agree to
provide the Company with the consultancy services set out in paragraph
5 below ("Services") for the duration of the Investment Period.
2. The fees payable under the Consultancy Agreement shall be the
arrangement fees referred to in this agreement.
3. All travel and other reasonable expenses of CCP incurred for the
benefit of and approved by the Company are to be borne by the Company.
4. CCP shall be expected to work for such period as CCP may reasonably
consider necessary to devote to the Company for the proper performance
of the Services.
5. CCP shall advise the Company on any Take-over, Flotation or IPO.
EIGHTH SCHEDULE
SERVICE AGREEMENT
