EXHIBIT 10.12
DRAFT (1): 25 September 2000
5CT/X67766/EJL : LN:66BDC1_38(3)
AGREEMENT
between
Redwave plc
as "Redwave"
Wave Systems Corp
as "Wave"
Global Wave Limited
as the "Company"
and
Earthquest Limited
as "Earthquest"
relating to
GLOBAL WAVE LIMITED
XXXXXXX & XXXXXXX
00 Xxxxxx Xxxxxx Xxxxxx XX0X 0XX
Tel: x00(0)00 0000 0000 / 0000 0000 Fax: x00(0)00 0000 0000 DX
Box No 12
CONTENTS
1. Definitions and Interpretation............................................................................1
2. Transactions to be formalised.............................................................................3
3. Constitution and Share Subscription.......................................................................3
4. Development of the Transaction Processing System..........................................................4
5. Costs.....................................................................................................5
6. Entire agreement..........................................................................................5
7. Miscellaneous.............................................................................................5
8. Notices...................................................................................................5
9. Choice of law, submission to jurisdiction and address for service.........................................6
SCHEDULE 1 : Minutes of a Meeting of the Directors.................................................................7
SCHEDULE 2 : Draft Notice of Extraordinary General Meeting of the Company..........................................9
SCHEDULE 3 : Draft Minutes of a Meeting of the Company............................................................11
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THIS
AGREEMENT is dated 2000 and made
BETWEEN:
(1) REDWAVE PLC, (No. 3838649) a company incorporated under the laws of
England whose registered office is at Xxxxx Xxxxx, 00 Xxxxxxxxxxx Xxxx,
Xxxxxx X00 0XX ("Redwave");
(2)
WAVE SYSTEMS CORP, a company incorporated under the laws of the State
of Delaware whose principal office is at 000 Xxxxxxxx Xxxxxx, Xxx,
Xxxxxxxxxxxxx, Xxxxxx Xxxxxx of America ("Wave");
(3) GLOBAL WAVE LIMITED, (No. 3402827) a company incorporated under the
laws of England and Wales whose registered office is at Xxxxx Xxxxx, 00
Xxxxxxxxxxx Xxxx, Xxxxxx X00 0XX (the "Company"); and
(4) EARTHQUEST LIMITED, (No. 4007347) a company incorporated under the
laws of England and Wales whose registered office is at 00 Xxxxx Xxxxx
Xxxxxx, Xxxxxx XX0X 0XX ("Earthquest").
WHEREAS:
(A) the Company is a private company limited by shares incorporated in
England under the Act on 8 July 1997 and at the date hereof has an
authorised share capital of L 1,000,000 divided into 600,000 "A"
Shares of L 1 each and 400,000 "B" Shares of L 1 each of which
all the "A" Shares are owned by Redwave and all the "B" Shares are owned
by Wave;
(B) the Company was established for the purpose of exploiting certain
intellectual property and associated services known as the "Wave System"
in the Territory;
(C) by an
agreement dated 19 June 2000 Redwave and Earthquest subscribed
for additional shares in the capital of the Company and expanded the
scope of their co-operation; and
(D) Redwave and Earthquest now wish to make further investments in the
Company and make arrangements with respect to certain expenditure
incurred in developing the technology.
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this
Agreement unless the context otherwise requires:
(a) the following expressions have the following meaning:
"ACT" means the Companies Xxx 0000 (as amended)
""A" SHARES" means "A" Ordinary Shares of L 1 each in the
capital of the Company
"BOARD" means the Board of Directors of the Company for the time
being
""B" SHARES" means "B" Ordinary Shares of L 1 each in the
capital of the Company
"DEBENTURE" means the first fixed and floating charge over the
assets and undertaking of the Company granted by the Company in
favour of Redwave to
1
secure the obligations of the Company under the Prior Indebtedness
Loan
Agreement
"DIRECTOR" means an "A" Director or "B" Director, as the case may
require, and "Directors" shall be construed accordingly
"INTELLECTUAL PROPERTY" means all intellectual property rights of
whatever nature including (without limitation) patents, registered
designs, trade marks and service marks (whether registered or
not), copyright, design rights, licensing rights and all similar
proprietary rights and interests, all other claims, rights, title,
interest and extensions of the foregoing and any protection
similar to the foregoing including those subsisting (in any part
of the world) in any computer programs, software, hardware, source
codes, prototypes, models, presentation boards, photographic
transparencies, advertising film separations, confidential
information, business or brand names, goodwill or the style of
presentation of goods or services and in applications for
protection thereof comprised in the Patents and the Know-How
"KNOW-HOW" means the know-how and business model developed and
used by Wave for the exploitation of the Patents
"LICENCE" means the revised licence of the Intellectual Property
in the agreed form
"PARTIES" means the parties to this
Agreement
"FACILITY LETTER" means the loan
agreement, dated 19 June 2000
between Redwave and the Company
"PATENTS" means the patent licences referred to in the Licence
"REDWAVE SOLICITORS" means Xxxxxxx & Xxxxxxx, 00 Xxxxxx Xxxxxx,
Xxxxxx, XX0X 0XX
"SHAREHOLDERS" means the "A" Shareholder and the "B" Shareholder
together and "Shareholder" shall mean either of them
"SHARES" means "A" Shares or "B" Shares or, as the context
requires, "A" Shares and "B" Shares
"TRANSACTION PROCESSING SYSTEM" means a computer system with
proprietary software which will create user accounts, charge and
recharge Wave metering hardware devices, poll Wave metering
hardware devices to collect usage statistics, calculate amounts
due to content providers and assist in the payment of such third
parties; such operational features to be capable of operating to
generally accepted commercial standards and with commercially
appropriate levels of resilience and security as might ordinarily
be expected from the operation of a payment system
"WAVE'S LEGAL COUNSEL" means Xxxxxxx Xxxx LLP in respect of US law
and Marriott Xxxxxxxx of 00 Xxxxx Xxxxx Xxxxxx, Xxxxxx XX0X 0XX in
respect of English law
any document expressed to be "in the agreed form" means a document
in a form approved by (and for the purpose of identification
signed by or on behalf of) the Parties;
(b) references:
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(i) to clauses and schedules are unless otherwise stated to
clauses of and the schedules to this
Agreement; and
(ii) to any English legal term for any action, remedy, method of
of judicial proceeding, legal document, legal status,
Court, official or any legal concept or thing shall in
respect of any jurisdiction other than England be deemed to
include that which most nearly approximates in that
jurisdiction to the English legal term;
(c) to any enactment (meaning any statute or statutory provision,
whether of the United Kingdom or elsewhere subordinate legislation
(as defined by section 2(1) of the Interpretation Act 1978) and
any other subordinate legislation made under any such statute or
statutory provision) shall be construed as references to that
enactment as re-enacted, replaced or modified from time to time,
whether before, on or after the date hereof;
(d) words importing the singular include the plural and vice versa,
words importing a gender include every gender and references to
persons include bodies corporate or unincorporate;
(e) the headings to the clauses and the schedules are for convenience
only and shall not affect the construction or interpretation of
this
Agreement; and
(f) the Interpretation Xxx 0000 shall apply in the same way as it
applies to an enactment.
2. TRANSACTIONS TO BE FORMALISED
2.1 As at the date hereof the sum of L 5,966,615 is outstanding from the
Company to Redwave pursuant to the terms of the Facility Letter and the
Debenture. Redwave has agreed to capitalise this debt and subscribe an
additional L 33,385 in cash for 60,000 "A" Shares.
2.2 Pursuant to the terms of the Licence, Wave has been actively developing a
Transaction Processing System and has incurred costs of L 1.5m on
the internationalisation of that Transaction Processing System for use by
the Company. The Company has agreed to pay to Wave the sum of L 1.5m
for this work, subject to the provisions of clause 4.3.
2.3 In order to maintain its holding of 40% of the issued share capital of
the Company, Wave has agreed to subscribe for a further 40,000 "B" Shares
in the capital of the Company at a price of L 100 per "B" Share
partly paid as to L 72.50 per "B" Share (through the capitalisation
of the receivable referred to in clause 2.2 in the sum of L 1.5m in
respect of the internationalisation of the Transaction Processing System
and L 1.4m in cash (being US$2,000,000 at an agreed exchange rate of
L 1 : US$1.428)). The balance due on the "B" Shares, in total, the
sum of L 1.1m (being L 27.50 per "B" Share) (subject to
adjustment in accordance with clause 4.2) shall be reduced from time to
time by any amount payable by the Company for further development
services (other than in respect of the Transaction Processing System)
provided by Wave or any party nominated by Wave and agreed by the
Company, such amount to be approved by the Company prior to such
reduction. Any balance of the sum of L 1.1m outstanding as at 01
January 2002 shall be paid in cash by Wave to the Company by no later
than 15 January 2002 or any other date to be determined by the Board.
3. CONSTITUTION AND SHARE SUBSCRIPTION
3.1 Forthwith upon the execution of this Agreement:
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(A) Redwave and Wave shall procure that a meeting of the Board is convened
and held at which will be transacted the business set out in the draft
minutes in schedule 1 and Redwave and Wave shall join in taking all such
steps as may be requisite to procure that:
(1) the resolutions of the Board set out in such minutes shall be
passed unanimously; and
(2) at the Extraordinary General Meeting referred to in and convened
at such Board meeting the Special Resolution set out in the draft
Notice of Extraordinary General Meeting in schedule 2 shall be
passed by the requisite majority.
(B) Subject to and forthwith upon the passing of the Special Resolution set
out in schedule 2:
(1) Redwave shall subscribe for 60,000 "A" Shares the consideration
for which shall be those sums set out in clause 2.1;
(2) Wave shall procure that Earthquest subscribes for 40,000 "B"
Shares at L 100 per "B" Share (to be issued credited as
partly paid at L 72.50 per "B" Share), the consideration for
which shall be the capitalisation of L 1.5m of development
costs and L 1.4m in cash; and
(3) the Facility Letter and the Debenture shall be terminated and
released by Redwave.
3.2 Forthwith following the due performance of the provisions of clause 3.1,
the Parties shall procure that a meeting of the Board is convened and
held at which will be transacted the business set out in the draft
minutes in schedule 3 and the Parties shall join in taking such steps as
may be requisite to procure that the resolutions of the Board set out in
such minutes shall be passed.
4. DEVELOPMENT OF THE TRANSACTION PROCESSING SYSTEM
4.1 Pursuant to the terms of the Licence, Wave has agreed to develop an
internationalised Transaction Processing System for operation by the
Company. Pursuant to clause 2 of this Agreement the Company has agreed to
pay Wave L 1.5m for such work (which, for the avoidance of doubt,
shall include all further versions of any Transaction Processing System
developed or required to function in conjunction with the Wave System (as
the same is defined in the Licence) as enhanced or developed from time to
time. The payment of this sum by the allotment of the "B" Shares shall be
deemed to be the full discharge by the Company of its obligations to pay
pursuant to clause 5(A) of the Licence.
4.2 Wave agrees to complete development of the internationalised Transaction
Processing System and to deliver the Transaction Processing System to the
Company for acceptance testing, such acceptance testing to be carried out
by Wave in conjunction with the Company for a period of 14 days
thereafter and to be completed by 01 March 2001. Acceptance testing will
include the functionality, capacity and resilience of the Transaction
Processing System.
4.3 In the event that Wave fails to deliver the Transaction Processing System
and acceptance testing has not been completed to the satisfaction of the
Company by 01 April 2001 Wave shall pay to the Company by way of
liquidated damages, a sum equal to 5% (five per cent.) per month on the
principal sum of L 1.5m (paid by the Company to Wave pursuant to
clause 2.3). Any such sum shall not be paid in cash to the Company but
shall accrue as a credit to the Company in the accounting records of Wave
to be applied against future
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development costs that the Company may incur with Wave (other than in
respect of the Transaction Processing System and development in relation
thereto for which full consideration has been received by Wave).
5. COSTS
Each of the Parties shall be responsible for its respective legal and
other costs incurred in relation to the preparation and completion of
this Agreement.
6. ENTIRE AGREEMENT
6.1 This Agreement and the agreed form documents referred to herein together
set forth the entire agreement and understanding between the Parties or
any of them in connection with the Company and the arrangements described
herein.
6.2 No purported variation of this Agreement shall be effective unless made
in writing.
7. MISCELLANEOUS
7.1 If any term or provision in this Agreement shall be held to be illegal or
or unenforceable, in whole or in part, under any enactment or rule of
law, such term or provision or part shall to that extent be deemed not to
form part of this Agreement but the enforceability of the remainder of
this Agreement shall not be affected.
7.2 This Agreement may be entered into in any number of counterparts and by
the Parties to it on separate counterparts, each of which when executed
and delivered shall be an original, but all the counterparts shall
together constitute one and the same instrument.
8. NOTICES
8.1 Any notice or other document to be given under this Agreement shall be in
writing and shall be deemed duly given:
(a) if to be given to Wave or Earthquest, if left at or sent by (i)
airmail or express or other fast postal service or (ii) facsimile
transmission or other means of telecommunication in permanent
written form to the following address or number:
(A) name
Wave Systems Corp and Earthquest Ltd
address 000 Xxxxxxxx Xxxxxx
Xxx
Xxxxxxxxxxxxx
XXX
attention The President
facsimile no. 001 413 243 0045
or to such other address and/or number as the relevant
Party may by notice to all other Parties hereto expressly
substitute therefor;
(b) if to be given to Redwave, if left at or sent by (i) first class
post post or airmail or express or other fast postal service or
(ii) facsimile transmission or other means of telecommunication in
permanent written form to the following address or number:
(A) name Redwave pIc
5
address Xxxxx Xxxxx
00 Xxxxxxxxxxx Xxxx
Xxxxxx
X00 0XX
attention Xxxxx Xxxxx
facsimile no. + 00 (0) 000 000 0000
or to such other address and/or number as such Party may by notice
to all other Parties hereto expressly substitute therefor;
(c) if to be given to the Company, if left at or sent by (i) first
class post or express or other fast postal service or (ii)
facsimile transmission or other means of telecommunication in
permanent written form to the following address or number:
name Global Wave Limited
address Xxxxx Xxxxx
00 Xxxxxxxxxxx Xxxx
Xxxxxx
X00 0XX
attention Xxxxx Xxxxx
facsimile no. + 00 (0) 000 000 0000
or to such other address and/or number as such Party may by notice
to all other Parties hereto expressly substitute therefor; and
(d) when in the ordinary course of the means of transmission it would
first be received by the addressee in normal business hours.
8.2 In proving the giving of a notice it shall be sufficient to prove that
the notice was left or that the envelope containing such notice was
properly addressed and posted or that the applicable means of
telecommunications was properly addressed and despatched (as the case may
be).
8.3 The Company undertakes with each of the Shareholders that it will
forthwith supply to each of such Shareholders a copy of any notice which
may be given to or served on it under this Agreement.
9. CHOICE OF LAW, SUBMISSION TO JURISDICTION AND ADDRESS FOR SERVICE
9.1 This Agreement shall be governed by and interpreted in accordance with
English law.
9.2 The Parties hereby submit to the jurisdiction of the High Court of
Justice in England, but this Agreement may be enforced in any court of
competent jurisdiction.
9.3 Wave hereby irrevocably authorises and appoints Marriott Xxxxxxxx ( or
such other person, being a firm of solicitors resident in England, as
Wave may by notice to all other Parties substitute) to accept service of
all legal process arising out of or connected with this Agreement and
service on Marriott Xxxxxxxx (or such substitute) shall be deemed to be
service on Wave.
IN WITNESS whereof this Agreement has been entered into the day and year first
above written
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SCHEDULE 1: MINUTES OF A MEETING OF THE DIRECTORS
GLOBAL WAVE LIMITED
MINUTES of a Meeting of the Directors held at 00 Xxxxxx Xxxxxx, Xxxxxx XX0X 0XX
on - 2000 at .................pm
PRESENT: Xxxxxxxx Xxxxxxxx (In the Chair)
Xxx Xxxxxx
Xxxxxxx Xxxxxxx
IN ATTENDANCE: Xx Xxxxxx (Xxxxxxx & Xxxxxxx)
1. IT WAS RESOLVED THAT Xxxxxxxx Xxxxxxxx be appointed Chairman of the
Meeting and it was noted that a quorum was present.
2. There was produced to the Meeting a Notice convening an Extraordinary
General Meeting of the Company containing a proposed Special Resolution
to:
(a) increase the authorised share capital of the Company from
L 1,000,000 to L 1,500,000 by the creation of 460,000
"A" Shares of L 1.00 each and 40,000 "B" Shares of
L 1.00 each; such "A" and "B" Shares having attached thereto
the respective rights set out in the Articles of Association to be
adopted by the Company pursuant to paragraph 1(c) below;
(b) grant authority to the Directors of the Company to allot the
shares referred to in paragraph 1(a) above; and
(c) adopt new Articles of Association;
such Notice containing a form for consents to short notice.
3. IT WAS RESOLVED that:
(a) the said Notice be and it is hereby approved;
(b) the Extraordinary General Meeting be held forthwith; and
(c) the Meeting be adjourned for that purpose.
4. The Meeting was thereupon adjourned.
5. When the Meeting reconvened it was reported that the Extraordinary
General Meeting had been duly convened and held and that the Special
Resolution (a print of which, signed by the Chairman of the Extraordinary
General Meeting, was produced to the Meeting) had been duly passed.
IT WAS RESOLVED that the Secretary be instructed to arrange for the
filing with the Registrar of Companies of all necessary returns.
7
6. There being no further business, the meeting was closed.
.........................
Chairman
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SCHEDULE 2: DRAFT NOTICE OF EXTRAORDINARY GENERAL MEETING OF THE COMPANY
GLOBALWAVE LIMITED
(NO 3402827)
NOTICE OF EXTRAORDINARY GENERAL MEETING
Notice is hereby given that an Extraordinary General Meeting of the Company will
be held at 00 Xxxxxx Xxxxxx, Xxxxxx XX0X 0XX at ................pm on - 2000 for
the purpose of considering and, if thought fit, passing the following resolution
as a special resolution:
SPECIAL RESOLUTIONS
THAT:
1. the share capital of the Company be increased from L 1,000,000 to
L 1,500,000 by the creation of 460,000 "A" Shares of L 1.00
each and 40,000 "B" Shares of L 1.00 each, such shares having the
rights set out in the new Articles of Association adopted pursuant to
Resolution 4 below;
2. the Directors be and they are hereby generally and unconditionally
authorised in accordance with section 80 of the Companies Act 1985 (the
"Act"), and in substitution for any existing powers to allot relevant
securities (as defined in section 80 of the Act), to exercise all the
powers of the Company to allot relevant securities up to an aggregate
nominal amount of L 500,000, such authority to expire five years from
the date of the passing of this Resolution (both dates inclusive) except
that the Company may make any offer or agreement before the expiry of
this authority that would or might require relevant securities to be
allotted after this authority has expired and the Directors may allot
relevant securities in pursuance of any such offer or agreement as if
this authority had not expired;
3. the Directors be and they are hereby empowered, pursuant to section 95 of
the Act, to allot equity securities (as defined by section 94 of the
Act), pursuant to the authority referred to in Resolution 4 below as if
section 89(1) of the Act did not apply to any such allotment and shall
expire on the fifth anniversary of the date of the passing of this
Resolution, except that the Company may before such expiry make offers or
agreements which would or might require equity securities to be allotted
after such expiry and notwithstanding such expiry the Directors may allot
equity securities in pursuance of such offers or agreements; and
4. the articles of association produced to the meeting be adopted as the
Articles of Association of the Company.
Dated - 2000 By order of the Board
Registered Office:
Xxxxx Xxxxx
00 Xxxxxxxxxxx Xxxx
Xxxxxx X00 0XX
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GLOBAL WAVE LIMITED
FORM OF CONSENT TO SHORT NOTICE
We, the undersigned, being all the members of the Company having a right to
attend and vote at the Extraordinary General Meeting convened to be held on -
2000 and together holding all the shares giving that right HEREBY AGREE that the
said Meeting shall be deemed to have been duly called and that the Special
Resolutions set out in the Notice of the said Meeting may be proposed and passed
notwithstanding that shorter notice than that specified in the Companies Xxx
0000 or the Company's Articles of Association has been given.
Dated - 2000
...................................
Duly authorised
for and on behalf of
Earthquest Limited
...................................
Duly authorised
for and on behalf of
Redwave plc
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SCHEDULE 3: DRAFT MINUTES OF A MEETING OF THE COMPANY
GLOBAL WAVE LIMITED
MINUTES of a Meeting of the Directors
held at 00 Xxxxxx Xxxxxx, Xxxxxx XX0X 0XX
on - 2000 at .............pm
PRESENT: Xxxxxxxx Xxxxxxxx (In the Chair)
Xxx Xxxxxx
Xxxxxxx Xxxxxxx
IN ATTENDANCE: Xx Xxxxxx (Xxxxxxx & Xxxxxxx)
1. IT WAS RESOLVED THAT Xxxxxxxx Xxxxxxxx be appointed Chairman of the
Meeting and it was noted that a quorum was present.
2. There were produced to the Meeting:
2.1 an agreement to be made between
Wave Systems Corp, Earthquest Limited,
Redwave plc and the Company (the "Agreement") dealing with certain
further subscriptions of shares in the capital of the Company and
treatment of certain development costs; and
2.2 the following applications for the allotment of shares in the capital of
the Company:
(A) Redwave plc applying for the allotment of 60,000 "A" Shares in the
capital of the Company; and
(B) Earthquest Limited applying for the allotment of 40,000 "B" Shares
in the capital of the Company.
3. IT WAS RESOLVED THAT:
3.1 the Agreement be approved;
3.2 the applications for the allotment of "A" Shares and "B" Shares of the
Company produced to the Meeting be and they are hereby approved and that
the respective Shares be issued, credited as fully paid up in the case of
the "A" Shares, the consideration being the capitalisation of a loan of
L 5,966,615 and L 33,385 in cash, and in the case of the "B"
Shares credited as partly paid to the extent of L 72.50 against a
subscription price of L 100 per "B" Share;
3.3 Share Certificates for the "A" Shares and the "B" Shares in the names of
the allotted be issued by the Company;
3.4 the Share Option Scheme produced to the meeting be approved for execution
by the Company and that options be granted to employees in accordance
with the schedule annexed to these minutes; and
3.5 the Secretary be directed to arrange for filling of the following forms
with the Registrar of Companies:
(A) 88(2) in respect of the allotments of "A" Shares and "B" Shares
respectively; and
(B) 123 in respect of the increase in the authorised share capital of
the Company.
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4. There being no further business, the Meeting was closed.
...........................
Chairman
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SIGNED by )
- ) ....................................
duly authorised )
for and on behalf of )
REDWAVE PLC )
in the presence of: )
SIGNED by )
- ) ....................................
duly authorised )
for and on behalf of )
WAVE SYSTEMS CORP )
in the presence of: )
SIGNED by )
- ) ....................................
duly authorised )
for and on behalf of )
GLOBAL WAVE LIMITED )
in the presence of: )
SIGNED by )
- ) ....................................
duly authorised )
for and on behalf of )
EARTHQUEST LIMITED )
in the presence of: )
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