INTERIM INVESTORS AGREEMENT
Exhibit 7.04
EXECUTION
COPY
This
Interim Investors Agreement (this “Agreement”) is made as of
September 19, 2008 by and between Providence Equity Partners VI
International L.P. (the “Providence Investor”) and
Newbridge International Investment Ltd (the “Newbridge Investor,” each, an
“Investor” and,
together, the “Investors”). Capitalized
terms used but not otherwise defined herein shall have the meanings ascribed
thereto in the Acquisition Agreement, dated as of the date hereof (the “Acquisition Agreement”), by
and between EGS Acquisition Co LLC, a Delaware limited liability company
(together with any other entity designated as the purchaser in the Offer
pursuant to, and in accordance with, Section 6.12 of the Acquisition Agreement,
“Purchaser”), and
eTelecare Global Solutions, Inc., a Philippine corporation (the “Company”).
RECITALS
WHEREAS,
the Investors are the only members, and each of the Investors is a holder of 50%
of the membership interests, of Purchaser;
WHEREAS,
Purchaser and the Company have entered into the Acquisition Agreement, pursuant
to which Purchaser has agreed, subject to the terms and conditions set forth
therein, to commence the Offer for all of the issued and outstanding common
shares of the Company listed on the Philippine Stock Exchange, Inc. and all of
the Company’s issued and outstanding American Depositary Shares listed on the
Nasdaq Global Market (collectively, the “Shares”);
WHEREAS,
in connection with the execution of the Acquisition Agreement, Purchaser has
entered into a Support Agreement with each of the Principal Shareholders (as
defined in the Acquisition Agreement), each dated as of the date hereof (each, a
“Support Agreement”),
pursuant to which, among other things, the Principal Shareholders have agreed,
subject to the terms and conditions set forth therein, to tender all Shares they
beneficially own in the Offer;
WHEREAS,
each of the Investors has executed (i) an equity commitment letter, dated as of
the date hereof (each, an “Equity Commitment Letter”),
pursuant to which such Investor has agreed, subject to the terms and conditions
set forth therein, to make an equity investment in Purchaser on the Acceptance
Date (as defined in the Acquisition Agreement) in an amount equal to such
Investor’s Commitment Amount (as defined in the Equity Commitment Letter), and
(ii) a limited guarantee, dated as of the date hereof (each, a “Limited Guarantee”), pursuant
to which such Investor has agreed, subject to the terms and conditions set forth
therein, to guarantee 50% of Purchaser’s payment obligations with respect to the
payment of the Termination Fee (as defined in the Acquisition Agreement) if and
when due and the payment of damages resulting from any breach of the Acquisition
Agreement by Purchaser, in each case, pursuant to, and in accordance with, the
terms of the Acquisition Agreement; and
WHEREAS,
the Investors wish to agree to certain terms and conditions that will govern the
actions of Purchaser and the relationship between the Investors with respect to
the Acquisition Agreement, the Support Agreements, the Equity Commitment
Letters, the Limited Guarantees and the transactions contemplated by each of the
foregoing.
AGREEMENT
THEREFORE,
in consideration of the foregoing and the mutual covenants and agreements herein
contained, and intending to be legally bound hereby, the parties hereto hereby
agree as follows:
1. Effectiveness. This
Agreement shall become effective on the date hereof and shall terminate (except
with respect to this Section 1 and Sections 6, 7, 8, 10, 11, 12, 13, 14, 15, 16, 17 and 18, which Sections
shall continue in full force and effect) upon the earlier of (a) the
consummation of the purchase of Shares by Purchaser pursuant to the Offer (the
“Closing”) and
(b) the termination of the Acquisition Agreement in accordance with its
terms; provided
that any liability for failure to comply with the terms of this Agreement shall
survive the termination of this Agreement.
2. Board
Representation. The Investors agree that from the date hereof
until the termination of this Agreement in accordance with Section 1, Purchaser
shall be managed by a Board of Managers (the “Board”), which Board shall at
all times have two managers. Each of the Investors shall have the
right to designate one manager to the Board and may change its designee at any
time by providing written notice to the other Investor, and the Investors agree
to take all actions as may be necessary to effect such replacement.
3. Actions
of Purchaser. All actions and decisions of Purchaser,
including, without limitation, all actions and decisions relating to the Offer,
the Acquisition Agreement, the Support Agreements and the transactions
contemplated by each of the foregoing (including, without limitation, any
actions and decisions relating to (i) any amendment of the Acquisition
Agreement, (ii) any waiver of, or any determination of the satisfaction or
failure of, any Tender Offer Conditions specified in the Acquisition Agreement,
(iii) any amendment or waiver of the Support Agreements, (iv) any modification
of the terms of the Offer, including, without limitation, the Offer Price, (v)
any determination regarding the amount of funds required to pay any
consideration, fees and/or expenses contemplated by the Acquisition Agreement,
(vi) any amendment to the Commitments, (vii) the drafting of, and inclusion of
information in, any Financing Documents, (viii) the preparation, filing and/or
amendment of any of the Offer Documents, and (ix) any filing with the SEC, the
PSEC or any other Governmental Entity in connection with the transactions
contemplated by the Acquisition Agreement), shall require the approval of each
of the Investors. For the avoidance of doubt, the foregoing provision
shall not require either Investor to obtain the approval of the other Investor
in connection with any announcement or other disclosure that it is required to
make in accordance with any applicable law, rule or regulation; provided, that any
such announcement or other disclosure shall be made in accordance with the
provisions of Section
7.
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4. Equity
Commitment Letters; Limited Guarantees. Each of the Investors
hereby (a) acknowledges that it approves of the forms of, and has executed, as
of the date hereof, (i) its Equity Commitment Letter in favor of Purchaser with
respect to its commitment to provide equity financing in connection with the
transactions contemplated by the Acquisition Agreement and (ii) its Limited
Guarantee in favor of the Company with respect to its limited guarantee in
connection with Purchaser’s obligation to pay the Termination Fee and damages
resulting from any breach of the Acquisition Agreement by Purchaser, in each
case, pursuant to, and in accordance with, the terms of the Acquisition
Agreement, and (b) agrees that, (i) it is bound by the obligations set forth in
its Equity Commitment Letter and Limited Guarantee, (ii) it shall not be
permitted to amend, modify or terminate any provision of its Equity Commitment
Letter or Limited Guarantee without the prior written consent of the other
Investor, and (iii) it shall perform its obligations under its Equity Commitment
Letter and Limited Guarantee, subject to the terms and conditions set forth
therein.
5. Management
Arrangements. The Investors may cause Purchaser, or any
affiliates thereof, to negotiate and enter into definitive agreements with
members of management of the Company with respect to the terms of such members
of management’s employment, compensation, rollover equity investment and equity
incentives, which terms shall be acceptable to each of the
Investors.
6. Fees and
Expense Sharing Provisions. The Investors agree that , except
as provided in the next sentence, they shall each bear 50% of (a) all
third-party fees and expenses (including, without limitation, any fees and
expenses of legal counsel, accountants, financial advisors and other consultants
and advisors) incurred by either of the Investors in connection with the
negotiation and execution of, and the transactions contemplated by, the
Acquisition Agreement, the Support Agreements, the Equity Commitment Letters and
the Limited Guarantees and the taking of other actions contemplated hereunder,
and (b) all third-party fees and expenses (including, without limitation, any
fees and expenses of legal counsel, accountants, financial advisors and other
consultants and advisors) incurred by Purchaser (including, without limitation,
any HSR Act, SEC, PSEC and other regulatory filing fees and related expenses and
any fees and expenses in connection with any financing for the Offer)
(collectively, the “Transaction
Expenses”). In the event that the Acquisition Agreement is
terminated and no Termination Fee is received by Purchaser pursuant to the
Acquisition Agreement, the Providence Investor shall be solely responsible for
all of its third party fees and expenses relating to due diligence (including
legal, accounting, financial, but excluding tax (which shall be shared 50/50))
incurred prior to the date of this Agreement. The Investors may agree
to a budget with respect to the Transaction Expenses in connection with the
transactions contemplated by the Acquisition Agreement. Upon the
occurrence of the Closing, the Investors shall cause Purchaser to reimburse all
Transaction Expenses to the Investors and/or pay any Transaction Expenses that
remain unpaid. The Investors also agree that each Investor shall be
entitled to receive as a distribution from Purchaser 50% of the net proceeds of
any Termination Fee received by Purchaser pursuant to, and in accordance with,
the Acquisition Agreement.
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7. Public
Announcements; Confidentiality. Except as may be required by
law or the rules of any stock exchange or regulatory authority, none of the
parties to this Agreement may issue any press release or otherwise make any
public announcement or comment on this Agreement and the matters covered herein
(including, without limitation, the Acquisition Agreement, the Support
Agreements, the Equity Commitment Letters, the Limited Guarantees, the Offer and
the transactions contemplated by any of the foregoing) without the prior consent
of the other party hereto. Further, the parties to this Agreement
agree that this Agreement the Acquisition Agreement, the Support Agreements, the
Equity Commitment Letters and the Limited Guarantees (collectively, the “Confidential Information”)
will remain strictly confidential and that none of the existence of the
Confidential Information, its contents or the transactions contemplated therein
will be, directly or indirectly, discussed with or disclosed to any third party
(other than to the officers, directors, stockholders, advisors, attorneys,
accountants or other representatives of a party to this Agreement for purposes
of matters relating to the transactions contemplated therein and provided that such
parties agree to comply with the provisions of this paragraph), except as may be
required by applicable law, rule or regulation. To the extent a party
to this Agreement may be required by law, rule or regulation to make any public
announcement or other disclosure regarding the Confidential Information, its
contents or the transactions contemplated therein, such party shall give the
other party hereto prior written notice thereof and the opportunity to review
and comment on such disclosure.
8. Exclusivity. The
parties to this Agreement shall work exclusively together to accomplish the
purposes contemplated by this Agreement and neither party hereto shall
participate in, or cause or allow any of its affiliates to participate in, the
preparation or submission of any proposal competing with or inconsistent with
the transactions contemplated by the Acquisition Agreement.
9. Regulatory
Approvals. Each of the Investors agrees not to, and shall not
permit any of its respective controlled affiliates to, take any action that
would reasonably be expected to materially delay, materially impede or prevent
receipt of any regulatory approvals required in connection with the transactions
contemplated by the Acquisition Agreement.
10. Amendment. This
Agreement may be amended or modified, and the provisions hereof may be waived,
only by an agreement in writing signed by each of the Investors.
11. Indemnities. Each
Investor (an “Indemnifying
Investor”) hereby agrees to defend, indemnify and hold harmless the other
Investor (an “Indemnified
Investor”) from and against any damages sustained or suffered by such
Indemnified Investor resulting from any failure by such Indemnifying Investor to
perform its obligations, or any failure of its representations and warranties to
be true and accurate, under this Agreement, its Equity Commitment Letter or its
Limited Guarantee. Without limiting the foregoing, in the event that
(a) Purchaser (i) is required to pay damages to the Company or any other party
due to a breach of the Acquisition Agreement or any Support Agreement by
Purchaser or (ii) has an obligation to pay the Termination Fee or (b) the
Investors have obligations under the
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Limited
Guarantee, and such obligations are owed or damages are payable due to (i) a
breach by an Investor (such Investor, a “Breaching Investor”) of such
Breaching Investor’s obligations under its Equity Commitment Letter or Limited
Guarantee, or (ii) a breach of a representation or warranty in the Acquisition
Agreement or any Support Agreements that is in respect of information or matters
provided by, or with respect to, such Breaching Investor, then, as between the
Investors, such Breaching Investor will be solely responsible for any such
liability attributable to such a breach (including, without limitation and to
the extent applicable, payment in full of the Termination Fee) and shall
indemnify the other Investor for any liability suffered by such other
Investor. Except as set forth in the foregoing sentences of this
Section 11,
each Investor undertakes to provide the other Investor with cross-indemnities
and contributions such that, in the event that either Investor has any
liabilities or obligations under such Investor’s Equity Commitment Letter or
Limited Guarantee, each Investor shall bear 50% of such liabilities and
obligations.
12. No
Recourse. Notwithstanding anything that may be expressed or
implied in this Agreement, each of the parties to this Agreement covenants,
agrees and acknowledges that no recourse under this Agreement or any documents
or instruments delivered in connection with this Agreement shall be had against
any former, current or future directors, officers, agents, affiliates, general
or limited partners, members, managers or stockholders of either Investor or any
former, current or future directors, officers, agents, affiliates, employees,
general or limited partners, members, managers or stockholders of any of the
foregoing, as such, whether by the enforcement of any assessment or by any legal
or equitable proceeding, or by virtue of any statute, regulation or other
applicable law, it being expressly agreed and acknowledged that no personal
liability whatsoever shall attach to, be imposed on or otherwise be incurred by
any current or future director, officer, employee, general or limited partner or
member or manager of either Investor or of any partner, member, manager or
affiliate thereof, as such, for any obligation of either Investor under this
Agreement or any documents or instruments delivered in connection with this
Agreement for any claim based on, in respect of or by reason of such obligations
or their creation.
13. No Third
Party Beneficiaries. This Agreement shall be binding on the
parties hereto solely for the benefit of the parties hereto, and nothing set
forth in this Agreement, express or implied, shall be construed to confer,
directly or indirectly, upon or give to any person other than the parties hereto
any benefits, rights or remedies under or by reason of, or any rights to enforce
or cause such addressees to enforce, any provisions of this
Agreement.
14.
Governing
Law; Consent to Jurisdiction. All disputes, claims or
controversies arising out of or relating to this Agreement, or the negotiation,
validity or performance of this Agreement, or the transactions contemplated
hereby shall be governed by and construed in accordance with the laws of the
State of Delaware without regard to its rules of conflict of
laws. Each of the parties hereto hereby irrevocably and
unconditionally consents to submit to the sole and exclusive jurisdiction of the
Court of Chancery of the State of Delaware or, if said court lacks jurisdiction
by virtue of federal law, any court of the United States located in the State of
Delaware (the “Delaware Courts”) for
any litigation arising out
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of or
relating to this Agreement, or the negotiation, validity or performance of this
Agreement, or the transactions contemplated hereby (and agrees not to commence
any litigation relating thereto except in such courts), waives any objection to
the laying of venue of any such litigation in the Delaware Courts and agrees not
to plead or claim in any Delaware Court that such litigation brought therein has
been brought in any inconvenient forum.
15. Representations
and Warranties. Each Investor hereby represents and warrants
to the other Investor that (a) it has the requisite power and authority to
execute, deliver and perform this Agreement, (b) the execution, delivery
and performance of this Agreement by it have been duly authorized by all
necessary action on the part of such Investor and no additional proceedings are
necessary to approve this Agreement, and (c) this Agreement has been duly
executed and delivered by it and constitutes a valid and binding agreement of it
enforceable in accordance with the terms hereof. Each Investor
further represents and warrants to the other Investor that its execution,
delivery and performance of this Agreement will not (i) conflict with,
require a consent, waiver or approval under, or result in a breach of or default
under, any of the terms of any contract or agreement to which such Investor is a
party or by which such Investor is bound; (ii) violate any order, writ,
injunction, decree or statute, or any rule or regulation, applicable to such
Investor or any of the properties or assets of such Investor; or
(iii) result in the creation of, or impose any obligation on such person to
create, any lien, charge or other encumbrance of any nature whatsoever upon such
Investor’s properties or assets.
16. Assignments. Other
than as provided herein, the rights and obligations of each Investor hereunder
shall not be assigned without the prior consent of the other Investor; provided, however, that, to the
extent permitted by the Equity Commitment Letter of an Investor, such Investor
may assign its rights and obligations under this Agreement to assignees which
are permitted under such Equity Commitment Letter, but no such assignment shall
relieve any such assigning Investor from any of its obligations
hereunder.
17. Counterparts. This
Agreement may be executed in any number of counterparts, all of which will be
one and the same agreement. This Agreement will become effective when each party
to this Agreement will have received counterparts signed by all of the other
parties.
18. General. Nothing
in this Agreement shall be deemed to constitute a partnership between any of the
parties, nor constitute any part the agent of any other party for any
purpose.
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IN WITNESS
WHEREOF, each of the undersigned has duly executed this Agreement (or caused
this Agreement to be executed on its behalf by its officer or representative
thereunto duly authorized) as of the date first above written.
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PROVIDENCE
EQUITY PARTNERS VI INTERNATIONAL L.P.
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By:
Providence Equity GP VI International L.P., its sole general
partner
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By:
PEP VI International Ltd., its sole general partner
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| By: | /s/ Xxxxxxxx X. Xxxxxx | |
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Name:
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Xxxxxxxx X. Xxxxxx | |
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Title:
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Chief Executive Officer | |
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NEWBRIDGE
INTERNATIONAL INVESTMENT LTD.
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| By: | /s/ Xxxxxxx X. Xxxxxxxxx | |
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Name:
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Xxxxxxx X. Xxxxxxxxx | |
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Title:
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Authorized Signatory | |
Signature
Page to Interim Investors Agreement
