EX-7 6 dex7.htm FORM OF ANTI-DILUTION AGREEMENT ANTI-DILUTION AGREEMENT
Exhibit 7
THIS ANTI-DILUTION AGREEMENT (the “Agreement”) is dated as of August , 2003 and is by and among MINORPLANET SYSTEMS USA, INC., a Delaware corporation (the “Company” or “MPUSA”), MINORPLANET SYSTEMS PLC, a United Kingdom public limited company (“MPS UK”).
SECTION 1. Additional Issuances.
(a) At any time after the date hereof, if the Company shall issue or propose to issue any additional shares of the Company’s common stock, par value, $0.01 per share (“Common Stock”), or warrants, options (excluding any options granted to employees of the Company in accordance with any employee plans, now or hereinafter in effect) or other rights or instruments of any kind convertible into or exercisable or exchangeable for shares of Common Stock (the “Additional Securities”), MPS UK shall have the right to subscribe for and to purchase at the same price per share that number of Additional Securities necessary to maintain a Fully-Diluted Ownership Percentage (as defined herein below) in the Company equal to the lesser of: (i) Fully-Diluted Ownership Percentage of the Company on the date that a Subscription Notice (as defined below) is delivered to MPS UK hereunder, and (ii) of 19.9% of the Company’s issued and outstanding Common Stock. Any offer of Additional Securities made to MPS UK under this Section 1 shall be made by notice in writing (the “Subscription Notice”) at least 20 Business Days prior to the issuance of such Additional Securities. The Subscription Notice shall set forth (i) the number of Additional Securities proposed to be issued to any Person other than MPS UK and the terms of such Additional Securities, (ii) the consideration (or manner of determining the consideration), if any, for which such Additional Securities are proposed to be issued and the terms of payment, (iii) the number of Additional Securities offered to MPS UK in compliance with the provisions of this Section 1 and (iv) the proposed date of issuance of such Additional Securities. Not later than 5 Business Days after delivery of a Subscription Notice in accordance with the notice provisions hereof, MPS UK shall deliver a notification to the Company in writing whether it elects to purchase all or any portion of the Additional Securities offered to MPS UK, pursuant to the Subscription Notice; provided however, that the failure of MPS UK to respond in writing within 5 Business Days shall be deemed a waiver and negative
election by MPS UK to purchase any of the Additional Securities offered by such Subscription Notice. If MPS UK elects to purchase any such Additional Securities, the Additional Securities that it shall have elected to purchase shall be issued and sold to MPS UK by the Company at the same time and on the same terms and conditions as the Additional Securities are issued and sold to third parties. If, for any reason, the issuance of Additional Securities to third parties is not consummated, MPS UK’s right to its share of such issuance shall lapse, subject to MPS UK’s ongoing subscription right with respect to issuances of Additional Securities at later dates or times.
(b) The Company represents and covenants to MPS UK that (i) upon issuance, all the shares of Additional Securities sold to MPS UK pursuant to this Section 1 shall be duly authorized, validly issued, fully paid and nonassessable and will be approved (if outstanding securities of the Company of the same type are at the time already approved) for listing on the Nasdaq Stock Market or for quotation or listing on the principal trading market for the securities of the Company at the time of issuance, (ii) upon delivery of such shares, they shall be free and clear of all liens, claims and encumbrances (other than any restrictions imposed by applicable federal, state and foreign securities laws (including, without limitations, the laws of the United Kingdom) of any nature and shall not be subject to any preemptive right of any stockholder of the Company and (iii) this Section 1 does not and upon the issuance of such Additional Securities will not (a) violate or conflict with any provision of the Certificate of Incorporation or Bylaws of MPUSA, each as amended then to date (b) conflict with or constitute a violation by MPUSA of any applicable law (including the General Corporation Law of Delaware), judgment, order, injunction, decree, rule, regulation or ruling of any governmental authority applicable to MPUSA the enforcement of which would have a material adverse effect on MPUSA or on MPUSA’s ability to perform its obligations hereunder or the ability of MPUSA to consummate issuance of the Additional Securities and (c) either alone or with the giving of notice or the passage of time, or both, modify, violate, conflict with, constitute grounds for termination of, or accelerate the performance required by, or result in a breach or default of the terms, conditions or provisions of, or constitute a default under any contract, agreement, note bond, mortgage, indenture, deed of trust, license, franchise, permit, commitment, waiver, exemption, order, obligation, lease, sublease, undertaking, agreement, offer or other instrument, which violation, conflict, termination, acceleration, breach or default would have a material adverse effect on MPUSA or on the ability of MPUSA to perform its obligations hereunder or the ability of MPUSA to issue such shares.
(c) As used herein, the term “Business Day” shall mean any day other than a Saturday, Sunday, U.S. national legal holiday, or a legal holiday under the laws of the State of Delaware or the United Kingdom, and the term “Person” shall mean an individual, corporation, partnership, joint venture, joint stock company, association, trust, business trust, unincorporated organization, government authority, or any other entity of whatever nature. As used herein, the term “Fully-Diluted Ownership Percentage” shall mean the percentage ownership calculated by dividing (i) the aggregate number of shares of Common Stock (including any shares of Common Stock issuable upon exercise or conversion of options, warrants or other securities or rights) beneficially owned (as such term is determined in accordance with the Rule 13d-3 promulgated under the Securities
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Exchange Act of 1934, as amended) by the applicable Person or Persons, howsoever and whenever acquired, by (ii) the aggregate number of all issued and outstanding shares of Common Stock of the Company (including any shares of Common Stock which are issuable upon exercise or conversion of options, warrants or other securities or rights within 60 days of the date on which such calculation is being made).
(d) Notwithstanding anything to the contrary contained herein, the rights granted to MPS UK hereunder shall not apply to that certain stock option repurchase agreement by and between the Company and Xxxx Xxxxx Investment Corporation, dated August , 2003, and the Company may enter into, execute and deliver said agreement and consummate the transactions thereby without delivering any Subscription Notice or other notice to MPS UK.
(e) If the Company, at any time while this Agreement is in force and effect, by reclassification of securities or otherwise (including, but not limited to, a “reincorporation,” merger with or into a wholly owned subsidiary of the Company, an exchange or stock swap or another type of reorganization or recapitalization), shall change or exchange its Common Stock into (or for) different securities of another class or classes or ceases to have common stock, then MPS UK’s rights hereunder shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities that were subject to the Agreement immediately prior to such reclassification or other change. All such adjustments shall be made so as to equitably adjust MPS UK’s rights hereunder.
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SECTION 6. Extensions; Waivers; Remedies Cumulative.
(a) The conditions to each of the parties’ obligations to consummate this Agreement are for the sole benefit of such party and may be waived by such party in whole or in part to the extent permitted by applicable law. With regard to this Agreement, any party may (i) extend the time for the performance of any of the obligations or other acts of any other party with such first party, or (ii) waive compliance with any of the agreements of any party with such first party or with any conditions to its own obligations. Any agreement on the part of a party hereto to any such extension or waiver of any provision of this Agreement shall be valid and effective only if set forth in an instrument in writing signed on behalf of such party against whom enforcement of any waiver or consent is sought by such first party or a duly authorized officer thereof, if applicable.
(b) No failure or delay on the part of any party in exercising any right, privilege, power, or remedy under this Agreement, and no course of dealing among the parties, shall operate as a waiver of such right, privilege, power, or remedy, nor shall any single or partial exercise of any right, privilege, power, or remedy under this Agreement preclude any other or further exercise of such right, privilege, power, or remedy, or the exercise of any other right, privilege, power, or remedy. No notice to or demand on any party in any case shall entitle such party to any other or further notice or demand in any similar or other circumstances or constitute a waiver of the right of the party giving such notice or making such demand to take any other or further action in any circumstances without notice or demand.
SECTION 8. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware applicable to agreements made and to be performed entirely within the State of Delaware without giving effect to the laws that might otherwise govern under applicable principles of conflict of laws thereof.
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(a) | If to the Company: |
Minorplanet Systems USA, Inc. |
0000 Xxx Xxxxx |
Xxxxx 000 |
Xxxxxxxxxx, XX 00000 |
Attn: J. Xxxxxxx Xxxxxx |
Telephone: (000) 000-0000 |
Facsimile: (000) 000-0000 |
with a copy to: |
Xxxxx Liddell & Xxxx LLP |
0000 Xxxx Xxxxxx |
Xxxxx 0000 |
Xxxxxx, XX 00000 |
Attn: Xxxxxxx X. Xxxx |
Telephone: (000) 000-0000 |
Facsimile: (000) 000-0000 |
(b) | If to MPS UK: |
Minorplanet Systems PLC |
Xxxxxxxxx Xxxxx |
Xxxxxxxxx, Xxxxx XX0 0XX |
Xxxxxx Xxxxxxx |
Attn: Xxxxxx Xxxxx |
Telephone: 000 00 000 000 0000 |
Facsimile: 011 44 113 251 1672 |
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with a copy to: |
Xxxxxxxx Xxxxxxxxx Professional Corporation |
One Oxford Centre |
000 Xxxxx Xxxxxx, 00xx Xxxxx |
Xxxxxxxxxx, XX 00000 |
Telephone: (000) 000-0000 |
Facsimile: (000) 000-0000 |
SECTION 10. Consent to Jurisdiction. Each of the parties agrees to submit itself to the jurisdiction of any state or federal court sitting in the State of Delaware. In addition, each of the parties hereto agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, and that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than such court.
(Signature Page Follows)
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This Agreement has been duly executed by an authorized officer by each of the following parties as of the date first set forth above.
MINORPLANET SYSTEMS USA, INC. | ||||
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Title: |
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MINORPLANET SYSTEMS PLC | ||||
By: | ||||
Name: |
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Title: |
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