EXHIBIT 2.1
CONFORMED COPY
--------------
DATED 7th September, 1999
INTERNET TECHNOLOGY GROUP PLC
and
CONCENTRIC NETWORK CORPORATION
and
RED WAVE PLC
and
XXX XXXXXX
and
XXXXXXXX XXXXXXXX
and
THE MONUMENT TRUST COMPANY LIMITED
______________________________________
IMPLEMENTATION AGREEMENT
______________________________________
Xxxxxxxxx and May
00 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
(JCXT/RRO)
CONTENTS
Page
1. INTERPRETATION 2
2. DOCUMENTATION 7
3. THE SCHEME 9
4. SALE AND PURCHASE 11
5. CONDITIONS 11
6. CONSIDERATION AND COMPLETION 12
7. TAX COVENANT 15
8. WITHHOLDINGS 17
9. XXXXXXXXX 00
00. CONDUCT OF BUSINESS 18
11. THE OFFER AND THE RED WAVE OFFER 21
12. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS 22
13. TERMINATION 26
14. FURTHER ASSURANCE 27
15. ANNOUNCEMENTS 27
16. CONFIDENTIALITY 28
17. COSTS AND EXPENSES 29
18. EFFECT OF COMPLETION 29
19. ASSIGNMENT 29
20. NOTICES 29
21. COUNTERPARTS 30
22. TIME OF ESSENCE 30
23. INVALIDITY 30
24. CHOICE OF GOVERNING LAW 30
25. JURISDICTION 31
SCHEDULE 1 (PRESS ANNOUNCEMENT) 34
SCHEDULE 2 (IRREVOCABLE VOTING UNDERTAKINGS) 35
SCHEDULE 3 (COMPLETION ARRANGEMENTS) 37
SCHEDULE 4 (DEED OF NOVATION) 39
SCHEDULE 5 (SEQUENCE OF EVENTS) 42
THIS IMPLEMENTATION AGREEMENT is made 7th September 1999
BETWEEN:
1. Internet Technology Group plc (the "Company") (incorporated in Scotland
under no. 115367) of 00 Xxxxx Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx; and
2. Concentric Network Corporation (a corporation incorporated in the State of
Delaware Federal ID No. 00-0000000 of 0000 Xxxxxxxx Xxxxxx, Xxx Xxxx,
Xxxxxxxxxx 00000, Xxxxxx Xxxxxx of America (the "Offeror"); and
3. Red Wave plc (a company registered in England and Wales under no. 3838649)
of Xxxxxxx Xxxxx, Xxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX (the "Purchaser");
4. Xxx Xxxxxx of 00 Xxx Xxxxxxx, Xxxx Xxxxxx, Xxxxx Xxxxx Xxxx, Xxxxxxxx XX0
0XX and Xxxxxxxx Xxxxxxxx of 00 Xxxxxxx Xxxx, Xxxxxx XX00 0XX (each a
"Nominated Director"); and
5. The Monument Trust Company Limited of 00 Xxx Xxxxxx, Xxxxx Xxxxx Port,
Guernsey (the "Trustee").
WHEREAS:
(A) The Company is the owner, directly or indirectly, of the Non-ISP Interests
as well as certain other businesses and the Purchaser has agreed to
purchase the Non-ISP Interests on the terms and subject to the conditions
of this agreement.
(B) The Purchaser was incorporated on 6th September, 1999 and is owned as to
100 per cent. of its issued share capital of 1,250,000 ordinary shares of 1
xxxxx each by the Trustee.
(C) The Nominated Directors have agreed to guarantee the obligations of the
Purchaser hereunder and to provide certain further undertakings as set out
herein.
(D) The Trustee is the owner of the entire issued share capital of Global
Internet Corporation (registered in the Island of Nevis under number 4680)
("GIC"). GIC is the registered owner of 14,975,605 ITG Shares. The
beneficiaries of the Trust are Xxx Xxxxxx and his family. The Trustee has
entered into this agreement in order to give certain undertakings in its
capacity as trustee of the Trust.
(E) The Company has informed the Offeror of certain funding requirements to
meet committed expenditures (and in respect of which the Company does not
have committed funding) and the Offeror has in reliance, inter alia, on the
various undertakings of the Company set out in this agreement agreed to
provide the Loan in advance of the Scheme becoming effective.
(F) In reliance on the undertakings of the Nominated Directors, the Trustee,
the Purchaser and the Company (without which the Offeror would not proceed
with the Offer), the Offeror intends to make a takeover offer for the
Company to be implemented by way of, and the Company has agreed to
implement, a scheme of arrangement of the Company, substantially on the
terms and subject to the pre-conditions and conditions set out in the Press
Announcement.
(G) Prior to entry into this agreement, Bear, Xxxxxxx International, financial
adviser to the Offeror has confirmed to the Company that it will be able to
provide the confirmation as to the availability of cash to the Offeror
required by Rule 24.7 of the City Code.
(H) Prior to the date of this agreement all of the holdings of Allerby of
Redstone Shares have been transferred to the Company, the resulting charge
to stamp duty (if any) has been paid and the transfer has been lodged with
Redstone Telecom for registration of the transfers.
(I) It is the intention of the parties that this document be executed as a
deed.
WHEREBY IT IS AGREED as follows:
1. Interpretation
1.1 In this agreement (but not in Schedules 1, 2 and 4) unless the context
otherwise requires:
"Actions" any action, suit, claim, or proceedings, whether
civil, criminal, administrative or regulatory;
"Agents" means, in relation to a relevant person, that
person's directors, officers, employees, advisers
and representatives;
"Aggregate Additional means the aggregate amount of the Additional Cash
Cash Payment" Payments that is made or which may fall to be made
to ITG Shareholders and Warrantholders pursuant to
the terms of the Offer, the Warrant Proposals and,
if relevant, any proposals to be made to holders
of options issued pursuant to the terms of the ITG
Share Option Schemes;
"Allerby" means Allerby Investments Holdings Limited, a
wholly owned subsidiary of the Company
incorporated in Guernsey;
"Base Value" means 50 xxxxx per Redstone Share held by ITG and
38 xxxxx per Redstone Share held by Ballynatray at
the Effective Date;
"Completion" means payment of the Consideration by the
Purchaser to the Company in accordance with the
terms of this agreement which shall be deemed to
have occurred to the extent of the Shareholder
Retained Amount and the Nominated Directors'
Retained Amount without more upon the Scheme
becoming effective;
"Conditions" the conditions set out in clause 5.1 and
"Condition" shall be construed accordingly;
"Consideration" has the meaning given in clause 6.1;
"Costs" damages, liabilities, losses, compensation, costs
and expenses;
"Court" the Court of Session in Edinburgh;
"Court Meeting" means any meeting or meetings convened by the
Court as referred to in clause 3.2;
"Deed of Novation" a deed of novation substantially in the form set
out in schedule 4;
"Effective Date" the date upon which the Scheme becomes effective
in accordance with section 425 of the Companies
Xxx 0000 following filing of the Order with the
Registrar;
"Escrow Completion" shall mean completion of the sale and purchase of
the Non-ISP Interests in accordance with the terms
of this agreement subject to the Escrow Condition;
"Escrow Completion Date" means the business day prior to the Hearing Date;
"Escrow Condition" means that the steps taken towards, and the
documents delivered for the purposes of,
completing the sale and purchase of the Non-ISP
Interests are taken and/or delivered subject only
to the condition that if the Scheme
has not become effective by filing of the
Order with the Registrar within 15 days after
the Escrow Completion Date, those steps shall
be deemed not to have been taken and all
documents shall be returned and deemed never
to have been delivered;
"Extraordinary General Meeting" has the meaning given in clause 3.4;
"FSA" Financial Services Xxx 0000;
"Global Wave Debts" the amounts (as determined from the books and
records of the Company) outstanding as at the
Effective Date and owed to the Company by
Global Wave Limited pursuant to the
agreements dated 16th July, 1997 between the
Company and Wave ITG Limited;
"Hearing" the final hearing of the Scheme by the Court
at which the Order is granted;
"Hearing Date" the date upon which the Hearing takes place;
"Loan" the advance or advances to be made pursuant
to the Loan Agreement;
"Loan Agreement" the note purchase agreement and the secured
promissory note in the form agreed between
the Offeror and the Company and initialled
for the purposes of identification by or on
behalf of the Offeror and the Company;
"Loan Documents" the Loan Agreement and the Security
Documents;
"Longstop Date" 31st October, 1999 or such later date as the
Offeror and the Company may, if required,
with the leave of the Court, agree;
"Meetings" the court convened, and the extraordinary
general, meetings of ITG Shareholders and
Warrantholders for the purposes of approving
the Scheme and the Warrant Proposals;
"Red Wave Offer" the offer to be made by Red Wave to ITG
Shareholders and Warrantholders of rights to
subscribe for Red Wave Shares, to the extent
of their entitlement to Additional Cash
Payments and, save to the extent of any
existing holding of the Nominated Directors
or the Trustee in Red
Wave, pro rata to their holdings, or to their
subscription rights in respect of shares, in
the Company;
"Nominated Directors' Retained has the meaning given in clause 11.5;
Amount"
"Offer Consideration" the new Concentric Shares and cash payable to
ITG Shareholders and Warrantholders as
described in the Press Announcement;
"POS Regs" Public Offers of Securities Regulations 1995,
as amended;
"Posting Date" the date upon which the Scheme Document is
posted to ITG Shareholders and
Warrantholders;
"Pre-emption Rights" the pre-emption rights in favour of
shareholders in Redstone Telecom set out in
article 4 of the articles of association of
Redstone Telecom;
"Press Announcement" means the draft press announcement attached
hereto in Schedule 1;
"Prospectus" the prospectus to be prepared by the
Purchaser in respect of the Red Wave Shares
and the Non-ISP Interests and making the Red
Wave Offer, drawn up in compliance with the
POS Regs, referred to in clause 2.1(i);
"Redstone Articles" the articles of association of Redstone
Telecom;
"Redstone Shares" the 2,725,344 ordinary shares of 10p in
Redstone Telecom held by the Company and
Ballynatray or, if applicable, such lesser
number of ordinary shares in Redstone Telecom
held by the Company and Ballynatray at the
Effective Date;
"Redstone Telecom" Redstone Telecom plc
"Registrar" The Registrar of Companies for Scotland;
"Security Documents" means the first fixed charge over the Non-ISP
Interests and the second fixed and floating
charge over the assets and undertaking of the
Company in the agreed form initialled for the
purposes of identification by or on behalf of
the Offeror and the Company;
"Scheme" the scheme of arrangement of the Company
described in the Press Announcement and this
agreement and to be implemented pursuant to
section 425 of the Companies Xxx 0000;
"Sequence of Events" the sequence of events set out in Schedule 5;
"Shareholder Retained Amount" has the meaning given in clause 11.4;
"Tax" means:
(a) within the United Kingdom, corporation
tax, advance corporation tax, income tax
(including income tax required to be
deducted or withheld from or accounted
for in respect of any payment), capital
gains tax, development land tax, capital
transfer tax, inheritance tax, value
added tax, national insurance
contributions, capital duty, stamp duty
reserve tax, duties of customs and
excise, any liability arising under
section 601 of the Income and
Corporation Taxes Xxx 0000, and any
other taxes, levies, duties, charges,
imposts or withholdings corresponding
to, similar to, replaced by or replacing
any of them, together with all
penalties, charges and interest relating
to any of them or to any failure to file
any return required for the purposes of
any of them; and
(b) outside the United Kingdom, all taxes,
levies, duties, imposts, charges and
withholdings of any nature whatsoever,
including (without limitation) taxes on
gross or net income, profits or gains
and taxes on receipts, sales, use,
occupation, franchise, value added and
personal property, together with all
penalties, charges and interest relating
to any of them;
"Tax Authority" means any taxing or other authority (whether
within or outside the United Kingdom)
competent to impose any Tax Liability;
"Tax Liability" means a liability to make actual payments of
Tax (or amounts in respect of Tax); and
"Trust" the Xxx Xxxxxx-Obodynski Trust established by
declaration of trust dated 18th March, 1991.
1.2 Terms used but not defined expressly herein shall, unless the context
otherwise requires, have the meaning given to them in the Press
Announcement.
1.3 Obligations or undertakings set out in this agreement on the part of the
Trustee shall, wherever the context so permits, be deemed to include an
obligation or undertaking on the part of the Trustee to procure that GIC
does whatever is necessary to fulfil the relevant obligations or
undertaking and, wherever the context so permits, the agreement of the
Trustee shall be construed as the agreement of the Trustee and of GIC.
2. Documentation
2.1 (i) As soon as practicable following the date of this agreement:
(a) the Purchaser shall commence preparation of a Prospectus in
relation to the Red Wave Shares and the Non-ISP Interests on the
basis that it will acquire the Non-ISP Interests for cash on the
terms of this agreement. The Prospectus shall include a
statement to the effect that the Purchaser and/or its directors
accept responsibility for the Prospectus and, if required by the
Offeror, a disclaimer of responsibility for the Prospectus on
the part of the Offeror and its Agents. The Purchaser shall
instruct and retain appropriate professional advisers and
registrars for the purposes of the Prospectus and the Red Wave
Offer, at its sole cost;
(b) the Company shall allow the Purchaser and its advisers all
reasonable access to its Agents, books and records and all
reasonable assistance (but at the Purchaser's sole cost) for the
purposes of the preparation of the Prospectus; and
(c) the Company shall exercise the subscription rights attaching to
the Wave Warrants in accordance with their terms.
(ii) As soon as practicable following the date of this agreement, the
Company shall, in conjunction with the Offeror, commence preparation
of the Scheme Document in relation to the Offer and the Warrant
Proposals and for these purposes the Offeror and the Purchaser shall
provide to the Company all reasonable assistance and information.
(iii) The Company, the Offeror (with respect to the Scheme Document) and
the Purchaser shall ensure that each of the Scheme Document and the
Prospectus is finalised in sufficient time in advance of the Longstop
Date to permit application to the Court to be made for leave to convene
shareholder meetings and for the Scheme Document to be posted prior to
the Longstop Date together with the Prospectus.
(iv) Without prejudice to sub-clauses (i), (ii) or (iii), each party
undertakes to co-operate with and to consult with the others in good
faith in the preparation and publication by it of all documents in
connection with this agreement and the transactions contemplated by it
and to provide the others with such information as may be reasonably
necessary or desirable in connection with the publication of the various
documents required to implement this agreement.
(v) The Purchaser shall, promptly upon finalising the Prospectus and leave to
convene the Court Meeting being granted to the Company, file the
Prospectus with the Registrar of the Companies for England and Wales as
required by the Regulation 4 of the POS Regs and make the Prospectus
available to the public in the manner required by the POS Regs.
(vi) Promptly following lodging of the Prospectus with the Registrar of
Companies for England and Wales as described in sub-clause (v), the
Purchaser shall make available to the Company sufficient number of
printed copies of the Prospectus together, if appropriate, with
accompanying forms of election for the purposes of the Red Wave Offer to
enable the Company or its Agents to post the Prospectus to ITG
Shareholders and Warrantholders on behalf of the Purchaser with the
Scheme Document, relevant proxy forms and the Form of Election.
(vii) The Purchaser represents, warrants and undertakes to the Offeror and the
Company that the Prospectus, when finalised, will comply with the POS
Regs, the FSA and all other applicable laws and regulations and the
Purchaser shall indemnify and hold harmless the Offeror and the Company
and each of their respective Agents (save the Nominated Directors) with
respect to any inaccuracy or omission, or other failure so to comply, of
the Prospectus and in respect of and against all Costs and Actions
(including all Costs incurred in investigating, settling or defending any
Actions incurred by the Offeror or the Company or any of such Agents)
resulting from or arising in any way in respect of the Prospectus, the
making of the Red Wave Offer or the arrangements with respect to the Non-
ISP Interests contemplated by this agreement.
(viii) None of the Nominated Directors, the Trustee or the Purchaser shall have
any Action against the Company, any member of the ITG Group, the Offeror,
any member of the Concentric Group, or any of their respective Agents
with respect to any Costs or Actions resulting from
or arising in any way in respect of the Prospectus, the making of the
Red Wave Offer or the arrangements with respect to the Non-ISP
Interests contemplated by this agreement or any information provided
to the Purchaser by any person upon which the Purchaser may have
relied in the preparation of the Prospectus, the making of the Red
Wave Offer or such arrangements.
2.2 The Offeror and the Company shall enter into and execute the Loan Documents
immediately following signature of this agreement.
3. The Scheme
3.1 The parties undertake to implement the Scheme in accordance with, and
subject to the terms and conditions of, the Press Announcement and, so far
as possible, the Sequence of Events.
3.2 The following principal commercial terms will apply to the Scheme of
Arrangement:
(a) In consideration for the payment of the Offer Consideration to ITG
Shareholders and Warrantholders, the entire issued share capital of
the Company, at the record date for the purpose of the Scheme, will be
transferred to the Offeror.
(b) The Offeror will, if required, undertake to the Court to be bound by
the terms of the Scheme insofar as it relates to the Offeror,
including as to payment of the Offer Consideration.
(c) Each of the Nominated Directors and the Trustee undertakes to give its
separate written approval to or (where counsel has advised the Company
and the Offeror that it is permissible) to vote their ITG Shares
(including those ITG Shares allotted to them following the exercise of
their holdings of Warrants in the Company) in favour of the Scheme at
the meeting(s) of ITG Shareholders to be convened by the Court to
approve the Scheme (the "Court Meeting") or (where counsel has so
advised the Company that the same is not permissible) to vote their
Iguana Shares in favour of the Scheme at any separate class meeting of
shareholders convened for that purpose or, in the event that counsel
advises that no separate class meeting is required, to undertake to
the Court to be bound by the Scheme.
3.3 The Company will, and the Nominated Directors and the Trustee shall use
their respective best endeavours to procure that the Company will take or
cause to be taken all such steps as are within their power and necessary to
implement the Scheme in accordance with the Sequence of Events and, in
particular, but without limitation:
(a) the Company will apply to the Court for leave to convene the Court
Meeting and file such documents as may be necessary in connection
therewith;
(b) upon (i) the Court making the order necessary for the purpose of
convening the Court Meeting, (ii) the necessary documents being
settled with the Court, and (iii) such documents (insofar as required)
being approved by the Alternative Investment Market team of the London
Stock Exchange, the Company shall publish the requisite documents and
thereafter publish and/or post such other documents and information as
the Court or the Alternative Investment Market team of the London
Stock Exchange may approve or require from time to time in connection
with the due implementation of the Scheme;
(c) following the Court Meeting and the Extraordinary General Meetings (as
defined below), assuming the necessary resolutions are passed, the
Company shall seek the sanction of the Court to the Scheme at the
Hearing; and
(d) as soon as practicable after the sanction of the Court of the Scheme
at the Hearing, the Company shall cause an office copy of the Order to
be filed with the Registrar.
3.4 The Company will convene an extraordinary general meeting of ITG
Shareholders and the holders of the First Issue Warrants and the Third
Issue Warrants ("Extraordinary General Meetings") to be held on the same
date as the Court Meeting to confirm special or, in the case of the
Warrants, extraordinary resolutions to approve, inter alia, the Scheme, the
transfer of the entire issued share capital of the Company as at the record
date for the Scheme to the Offeror, any alteration of the Company's
articles of association considered appropriate for the purposes of
implementing the Scheme and the Warrant Proposals and such other matters as
may be agreed between the Company and the Offeror necessary or desirable
for the purposes of implementing the Scheme.
3.5 Each of the Nominated Directors and the Trustee undertakes to vote their
ITG Shares (including those ITG Shares allotted to them following the
exercise of their holdings of Warrants in the Company) in favour of the
special resolutions to be proposed at the Extraordinary General Meetings.
3.6 Notwithstanding clause 3.3(c) and (d), the Company shall not proceed to
seek the sanction of the Court at the Hearing unless either Escrow
Completion has taken place prior to 5.00 p.m. on the business day prior to
the Hearing Date or, Escrow Completion not having taken place by such time,
the Offeror serves notice on the Company requiring it to proceed with
seeking the sanction of the Court at the Hearing. If the Offeror serves
such notice then the rights and
obligations of the Purchaser and the Company in so far as they relate
exclusively to the sale and purchase of the Non-ISP Interests and the Red
Wave Offer shall terminate and any elections pursuant to the Red Wave Offer
to subscribe Red Wave shares shall not be accepted but without prejudice to
accrued rights and liabilities.
3.7 The Company agrees with the Offeror that it will give the notice required
by paragraph 3.7 of the terms of issue of each of the First Issue Warrants,
the Second Issue Warrants, the Third Issue Warrants and the Fourth Issue
Warrants and as required by paragraph 2.2 of the terms of issue of the
Fifth Issue Warrants promptly upon the conditions therefor being satisfied
if, in each case, any such Warrants are outstanding at such time.
4. Sale and Purchase
4.1 Subject to the terms and conditions of this agreement, the Company agrees
to sell (or procure the sale of) and the Purchaser agrees to purchase the
Non-ISP Interests for the Consideration.
4.2 The Non-ISP Interests shall be sold with limited title guarantee.
4.3 The Purchaser shall be entitled to exercise and enjoy all rights attached
or accruing to the Non-ISP Interests in respect of periods commencing on or
after Completion.
5. Conditions
5.1 The obligations of the Company and the Purchaser pursuant to clause 4 are
conditional upon:
(i) all conditions to the Scheme having been satisfied or, where
permissible waived, save any condition thereto relating to Escrow
Completion and/or Completion;
(ii) the Prospectus having been lodged with the Registrar of Companies in
England and Wales in accordance with the POS Regs and posted to ITG
Shareholders, Warrantholders and, if required, participants in the
Iguana Share Option Schemes together with the Scheme Document by no
later than the Longstop Date; and
(iii) none of the Non-ISP Interests being subject to any encumbrance or
restrictions on transfer.
5.2 Each of the parties agrees to use its best endeavours to procure (and the
Nominated Directors and the Trustee shall use their respective best
endeavours to procure that the Company and the Purchaser use their best
endeavours to procure) that Condition (ii) is fulfilled as soon as
practicable after the date hereof and in any case by no later than the
Longstop Date and that Condition (iii) is fulfilled as soon as practicable
after the date hereof and in any case prior to the Escrow Completion Date.
5.3 Condition (iii) may be waived by agreement between the Company and the
Offeror.
5.4 Each of the parties agrees that it will not, and the Nominated Directors
and the Trustee agree that they will use their respective best endeavours
to procure that the Purchaser and the Company will not, take or permit to
be taken any action which is reasonably likely to impede or prevent the
satisfaction of any of the Conditions.
5.5 To the extent that any of the Conditions have not been satisfied or, where
permissible, waived by the dates referred to in clause 5.2, the rights and
obligations of the Company and the Purchaser under this agreement insofar
as they relate exclusively to the sale and purchase of the Non-ISP
Interests and the making of the Red Wave Offer shall terminate (with the
effect, inter alia, that neither Escrow Completion nor Completion will take
place) but without prejudice to accrued rights and liabilities.
5.6 Where for any reason the rights and obligations of the Company and the
Purchaser under this agreement with respect to the sale and purchase of the
Non-ISP Interests are terminated, the Offeror may elect (in its absolute
discretion) by serving notice in writing on the Company and the Purchaser:
(i) not to proceed with the Offer in which case the Company shall not seek
the sanction of the Court to the Scheme and this agreement, save for
clauses 16,17, 20, 24 and 25 shall terminate but without prejudice to
accrued rights and liabilities; or (ii) to proceed with the Offer, in which
case the Company shall proceed to seek the sanction of the Court to the
Scheme in accordance with clause 3.
5.7 Without prejudice to any other terms of this agreement, the obligations of
the Company and the Offeror to effect the Scheme will be subject to the
conditions and other terms set out in Appendix I to the Press Announcement.
6. Consideration and Completion
6.1 Subject to clause 6.3, the Consideration payable by the Purchaser to the
Company for the Non-ISP Interests shall be the aggregate of the following:
(a) (Pounds)4,422,298 with respect to the Wave Shares;
(b) the value of the Redstone Shares (including the Redstone Shares held
by Ballynatray) which for this purpose shall be:
(i) if, at the Effective Date, the Pre-emption Rights have been
waived or the Redstone Articles have been validly amended so that
in either case, the Redstone Shares are freely transferable or if
the Redstone Shares are nevertheless transferable to Red Wave
pursuant to article 4 of the Redstone Articles or if at the
Effective Date the share capital of Redstone Telecom has been
admitted to listing or trading or been quoted on a recognised
investment exchange, (Pounds)1.50 per Redstone Share; or
(ii) in any other circumstance, zero,
provided that to the extent that any Redstone Shares held by the
Company or Ballynatray at the date of this agreement have at the
Effective Date been disposed of (or an unconditional agreement for
their disposal has been entered into) by the Company or Ballynatray
and the Company or Ballynatray has received (or is unconditionally
entitled to receive) cash therefor, then the Consideration calculated
in accordance with this sub-clause 6.1(b) shall be reduced in
proportion to the number of Redstone Shares which are the subject of
the disposal and increased by the relevant amount of cash received or
receivable;
(c) (Pounds)76 (being the value agreed as payable by Red Wave to the
Company in respect of the Global Wave Shares and the Ballynatray
Shares, excluding the value of the Redstone Shares held by
Ballynatray) plus an amount equal to the Global Wave Debts,
and any amounts expressed in a currency other than sterling shall for these
purposes be translated into sterling using the spot rate of exchange for
the relevant currency at the close of business on the last business day
prior to the Effective Date. Such aggregate amount shall be referred to in
this agreement as the "Consideration". The Offeror shall procure that Bear,
Xxxxxxx International shall certify the elements of the Consideration
referred to above and the calculation of the Consideration. The Company
shall supply to the Offeror for these purposes details of all disposals of
Redstone Shares promptly after the disposal has been agreed and details of
the Global Wave Debts, in each case certified by the finance director of
the Company to be true and accurate. Bear, Xxxxxxx International shall be
entitled to rely on these certificates. The certificate of Bear, Xxxxxxx
International shall be final and binding as between the parties in the
absence of manifest error. The Offeror shall announce the amount of the
Aggregate Additional Cash Payment on the basis of the above as soon as
practicable after the Scheme has become effective. For the avoidance of
doubt, the Redstone Shares shall not be transferred to the Purchaser, shall
not form part of the Non-ISP Interests and no value therefor shall be given
in the calculation of the Consideration if, at the Effective Date, the Pre-
emption Rights have not been waived, the Redstone Articles have not been
validly amended so that the Redstone Shares are freely
transferable, the share capital of Redstone Telecom has not been admitted
to listing or trading and is not quoted on a recognised investment exchange
and the Redstone Shares have not become transferable to the Purchaser
pursuant to article 4 of the Redstone Articles. In these circumstances, the
Company undertakes to procure that Ballynatray executes a transfer of its
legal interest in the Redstone Shares held by it to the Company prior to
Escrow Completion.
6.2 In the event that the sale and purchase of the Non-ISP Interests pursuant
to this agreement is terminated for any reason and the Scheme nonetheless
becomes effective at the election of the Offeror, Concentric undertakes to
use its best endeavours to dispose of its interest in the Wave Shares and
(in the event that the Redstone Shares have been admitted to trading or
listing or been quoted on a recognised investment exchange at the Effective
Date) the Redstone Shares on or before the tenth business day following the
Scheme becoming effective at the best price reasonably obtainable on the
relevant day.
6.3 Subject to Escrow Completion having taken place and the Scheme becoming
effective, the Consideration shall be payable in cash in sterling cleared
funds and shall be paid by or on behalf of the Purchaser in the manner
described in clauses 11.4 and 11.5 and otherwise in accordance with the
directions of the Offeror. Receipt by the Company of the Shareholder
Retained Amount and the Nominated Directors' Retained Amount shall
discharge the obligation of the Purchaser to pay the Consideration to the
extent of such receipt.
6.4 Immediately prior to Escrow Completion, the Offeror shall notify the
Company and the Purchaser whether the conditions to the Scheme (save for
any condition thereto relating to Escrow Completion or Completion) have
been satisfied or waived. At Escrow Completion, the parties shall do those
things ascribed to them in Schedule 3 subject to the Escrow Condition.
6.5 The Company hereby irrevocably appoints any director of the Offeror as its
lawful attorney for the purposes of executing transfers in relation to the
Non-ISP Interests in favour of the Purchaser and the Deed of Novation and
any other documents necessary to implement Escrow Completion on the
Company's behalf, such appointment to be by way of security for the
Company's obligations in respect of Escrow Completion.
6.6 The Purchaser hereby irrevocably appoints any director of the Offeror as
its lawful attorney for the purposes of executing the Deed of Novation and
any other documents necessary to implement Escrow Completion on its behalf,
such appointment to be by way of security for the Purchaser's obligations
in respect of Escrow Completion.
6.7 Escrow Completion shall take place at the offices of Xxxxxxxxx and May at 0
Xxxxxxx Xxxxxx Xxxxxx XX0X 0XX at 12.00 noon on the Escrow Completion
Date, or such other place, time and date as the parties may agree. To the
extent that, at Escrow Completion, the Purchaser or the Company has not
complied with its obligations under schedule 3, the Offeror shall, to the
extent practicable, exercise its power of attorney under clauses 6.4 and
6.5 to effect Escrow Completion.
6.8 The Purchaser undertakes promptly following Completion to pay all
applicable stamp duty and/or transfer taxes on the transfer of the Non-ISP
Interests.
7. Tax Covenant
7.1 The Purchaser covenants with the Company to pay to the Company an amount
equal to any Tax Liability of the Company or any member of the ITG Group
arising directly or indirectly as a consequence of or by reference to the
transfer to the Purchaser of the Non-ISP Interests.
7.2 The covenant in clause 7.1 will not apply except to the extent that such
Tax Liability exceeds the Consideration plus where clause 6.1(b)(ii) is
relevant, the product of the number of Redstone Shares at the Effective
Date multiplied by the applicable Base Value, less the Aggregate Additional
Cash Payment.
7.3 Where the Purchaser becomes liable to make any payment under this clause,
the due date for making that payment shall be the last date on which the
Company or member of the ITG Group would have had to have paid to the
appropriate Tax Authority the Tax that has given rise to the Purchaser's
liability under this clause in order to avoid incurring a liability to
interest or a charge or penalty in respect of that Tax Liability.
7.4 If a payment required to be made by the Purchaser under this clause is not
made by the due date for the making thereof, that payment shall carry
interest from that due date until the date when the payment is actually
made at the rate of two per cent. above the base rate from time to time of
National Westminster Bank plc.
7.5 The Purchaser shall not be liable for any Tax Liability if:
(i) such Tax Liability would not have arisen but for any act, omission or
transaction done, made or carried out by the Company or the Offeror
after Completion otherwise than:
(a) as required by law;
(b) pursuant to a legally binding commitment of the Company or the
Offeror created on or before the Effective Date; or
(c) in the ordinary course of business of the Company or the Offeror
as carried on immediately before the Effective Date; or
(ii) such Tax Liability would not have arisen but for a change in the
accounting policies or practices of any one or more of the Company or
Concentric introduced after the Effective Date other than a change
which is required in order to comply with the accounting requirements
of the Companies Xxx 0000, statements of standard accounting
practice, financial reporting standards and any other accounting
standards issued by the Accounting Standards Board Limited (including
abstracts issued by the Urgent Issues Task Force of the Accounting
Standards Board Limited) or any other body from time to time
prescribed by regulations pursuant to section 256 Companies Act 1985
and any other accounting principle observance of which by the Company
is required in order to ensure its accounts and those of any other
company with which its accounts are consolidated comply with
applicable law, or
(iii) such Tax Liability arises as a result of the failure to submit the
returns, self-assessment and/or computations required to be made by,
or on behalf of, the Company or the failure to submit such returns
and computations within the appropriate time limits or otherwise than
on a proper basis, in each case after the Effective Date.
7.6 No claim shall be brought by the Company under this agreement against the
Purchaser unless notice of the claim has been given to the Purchaser not
later than 7 years after the Effective Date.
7.7 The Company shall take or cause to be taken such action as the Purchaser
may by written notice given to the Company reasonably request to dispute,
resist, appeal against, compromise or defend the imposition of any Tax
Liability and any determination in respect thereof or to apply to postpone
(so far as legally possible) the payment of any Tax Liability pending the
determination of any appeal but subject to the Company being indemnified to
its reasonable satisfaction against all losses (including any additional
Taxation Liability of such person), interest, costs, damages and expenses
which may be thereby incurred by or charged against the Company or any
member of the ITG Group, provided that:
(a) any request made by the Purchaser shall be made within the shorter of
21 days from receipt of any notice of a Tax Liability from the Company
and five days before any time limit expires; and
(b) the Company shall not be obliged to comply with any request of the
Purchaser which involves contesting any Tax Liability before any court
or any other appellate body (including any VAT tribunal or the Special
or General Commissioners) unless they have been advised in writing, at
the expense of the Purchaser, by leading tax counsel instructed by
agreement between the Purchaser and the Company that an appeal against
the assessment for the Tax Liability in question will, on the balance
of probabilities, be won by the Company.
8. Withholdings
8.1 If any deductions or withholdings are required by law to be made from any
sums payable by the Purchaser or the Nominated Directors or the Trustee
under any provision of this agreement, the Purchaser, the Nominated
Directors or the Trustee as the case may be shall be obliged to pay to the
Company or to the Offeror, as the case may be, such sum as will, after the
deduction or withholding has been made, leave the Company or the Offeror,
as the case may be, with the same amount as it would have been entitled to
recover in the absence of any such requirement to make a deduction or
withholding.
8.2 If any sum payable by the Purchaser or the Nominated Directors or the
Trustee to the Company or the Offeror as the case may be, under any
provision of this agreement shall be subject to a Tax Liability in the
hands of the Company or of the Offeror, as the case may be, the Purchaser,
the Nominated Directors or the Trustee as the case may be shall be under
the same obligation to make an increased payment in relation to that Tax
Liability as if the liability were a deduction or withholding required by
law.
9. Guarantee
9.1 (i) The Nominated Directors and the Trustee unconditionally and
irrevocably guarantee to the Offeror and to the Company the due and
punctual discharge and performance by the Purchaser of its obligations
pursuant to this agreement and agree that if at any time or from time
to time any amount payable by the Purchaser or other obligation of the
Purchaser is not paid or performed in full on the due date therefor,
they will promptly after being given not less than two Business Days'
notice of the failure of the Purchaser to make such payment or perform
such other obligation (and if such failure is not remedied by the
Purchaser in the interim) unconditionally pay or perform or procure
the payment or performance of the relevant amount or obligation to the
Offeror or to the Company;
(ii) Each of the Nominated Directors and the Trustee shall be liable under
paragraph (i) above as if he were a primary obligor of the Purchaser's
obligations contained in this agreement (the "Guaranteed
Obligations");
(iii) The obligations of the Nominated Directors and the Trustee under
paragraphs (i) and (ii) above:
(a) shall be continuing obligations and shall not be satisfied,
discharged or affected by any intermediate payment or settlement
of account or any change in the constitution or control of, or
the insolvency of, or any liquidation, winding-up or analogous
proceedings relating to, the Purchaser or any change in the
terms or nature of the Guaranteed Obligations; and
(b) shall not be discharged, prejudiced, lessened, affected or
impaired by any act, omission or circumstance whatsoever which
but for this provision might operate to release or exonerate the
Purchaser from all or any part of the Guaranteed Obligations;
(iv) As a separate and independent stipulation each of the Nominated
Directors and the Trustee agrees that if any of the Guaranteed
Obligations are not enforceable against or recoverable from the
Purchaser by reason of any legal limitation, disability or incapacity
or any fact or circumstances or otherwise (together "Factors"), they
shall nevertheless be enforceable against and recoverable from him as
though the same had been incurred by him and he were the sole or
principal obligor in respect thereof and shall be performed or paid
by him on demand provided that the foregoing provisions of this
paragraph (D) shall not be construed so as to impose on Nominated
Directors and the Trustee any liabilities or obligations in excess of
those the Purchaser would have been under had such Factors not
pertained;
(v) This guarantee shall constitute primary obligations of the Guarantor
and the Offeror shall not be obliged to make any demand on or enforce
any rights against the Purchaser or any other person before being
entitled to enforce its rights against either of the Guarantor under
this clause 9.1.
9.2 The liabilities and obligations of the Nominated Directors and the Trustee
pursuant to this clause 9, and pursuant to any other clause of this
agreement in which representations, warranties, undertakings or obligations
of the Nominated Directors and the Trustee are set out, shall be joint and
several.
10. Conduct of Business
10.1 (A) The Purchaser agrees that, without the prior consent of the Offeror,
between the date of this agreement and the Effective Date, it will
conduct no business, enter into no agreements, documents or make any
commitments or arrangements save, in each case, solely for the
purposes of the implementation of the matters contemplated by this
agreement and in furtherance of the Red Wave Offer. In particular,
but without limitation, if shall not do any of the matters referred to
in clause 10.2, mutatis mutandis.
(B) The Purchaser undertakes at all times to comply with applicable law
and regulations in the conduct its business, in the making of the Red
Wave Offer and in the performance of its obligations pursuant to this
agreement.
10.2 Save as may be necessary to give effect to the Scheme, the Warrant
Proposals or the matters contemplated by this agreement, the Company agrees
that, between this date of this agreement and the Effective Date, the
Company and each member of the ITG Group shall conduct its business in the
ordinary and usual course and, without limitation, shall not do or commit
to do any of the following matters without the prior written consent of the
Offeror (such consent not to be unnecessarily withheld or delayed):
(a) alter the nature or scope of its business in any material way; or
(b) enter into, amend to a significant extent, terminate or supplement to
a significant extent any material agreement; or
(c) take any action which might materially delay or prejudice the
implementation of the Scheme; or
(d) dispose of, agree to dispose of, or grant or agree to grant any option
or licence in respect of its business or acquire or agree to acquire
any assets, business or undertaking, in each such case except in the
ordinary course of trading; or
(e) declare, make or pay any dividend or other distribution or in any way
reduce its reserves; or
(f) except pursuant to the exercise of Warrants or existing share options
under the ITG Share Options Schemes, create, allot or issue or agree
to create, allot, or issue, or sub-divide, consolidate or redesignate
any shares or other securities of whatsoever nature convertible into
shares; or
(g) create, issue redeem or grant any option or right to subscribe in
respect of any share capital or agree so to do; or
(h) incur any capital expenditure (other than pursuant to binding
commitments in existence at the date of this agreement) greater than
(Pounds)100,000; or
(i) form, enter into, terminate or withdraw from any partnership,
consortium, joint venture or similar arrangement which is or is
reasonably likely to be material to it; or
(j) alter the provisions of its Memorandum or Articles of Association (or
equivalent constitutional documents) or adopt or pass further
regulations or resolutions inconsistent therewith or re-register as an
unlimited company; or
(k) change its accounting reference date; or
(l) discontinue or cease to operate all or a part of its business; or
(m) change its residence for tax purposes or become resident in any other
jurisdiction for tax purposes; or
(n) reduce its share capital or purchase or redeem its own shares; or
(o) pass any resolution in general meeting or by way of written resolution
for winding-up or the appointment of an administrator, receiver or
administrative receiver or over any part of its business or assets; or
(p) except as required by law or by a change in generally accepted
accounting principles in the United Kingdom, make any material change
to the accounting principles by reference to which would have a
material effect on the information disclosed to the Offeror prior to
the date hereof; or
(q) (except in the usual course of trading) amend the terms of employment
or engagement of a director, other officer or senior employee who is
proposed to be a director, officer or employee of it or employ, engage
or terminate the employment or engagement of, such a person ("senior
employee" for this purposes meaning an employee earning more than
(Pounds)40,000 per annum); or
(r) increase borrowings or incur other indebtedness other than pursuant to
existing arrangements and other than trade creditors in the ordinary
and normal course of trading; or
(s) enter into or render itself liable for any capital commitment which
exceeds (Pounds)100,000; or
(t) except in the ordinary course of its trading, start any material
litigation or arbitration proceedings; or
(u) except in the ordinary course of its trading, compromise, settle,
release or discharge any material litigation or arbitration
proceedings or a material liability, claim, action, demand or dispute
or waive a material right in relation to any material litigation or
arbitration proceedings; or
(v) dispose of any interest in any of the Non-ISP Interests; or
(w) increase the amount of the Global Wave Debts other than in the
ordinary course of business; or
(x) pay, discharge or satisfy any material claim, liability or obligation
other than payment, discharge or satisfaction in the ordinary course
of business.
11. The Offer and the Red Wave Offer
11.1 Immediately after execution of this agreement, the Nominated Directors
shall each execute an irrevocable voting undertaking in favour of the
Offeror and Bear, Xxxxxxx International substantially in the form set out
in Schedule 2 Part A and the Trustee shall execute on behalf of GIC an
irrevocable voting undertaking in favour of the Offeror and Bear, Xxxxxxx
International substantially in the form set out in Schedule 2 Part B.
11.2 Each of the Nominated Directors and the Trustee hereby irrevocably
undertakes not to make an election for additional cash under the Mix and
Match Election and to elect to apply their respective entitlements to
Additional Cash Payments in subscribing Red Wave Shares pursuant to the
terms of the Red Wave Offer .
11.3 Subject to the rights and obligations of the Purchaser and the Company with
respect to the sale and purchase of the Non-ISP Interests not having been
terminated, the Purchaser agrees to make the Red Wave Offer and to allot
and issue Red Wave Shares to ITG Shareholders and Warrantholders validly
exercising their entitlement under the Red Wave Offer to elect to receive
such Red Wave Shares, such allotment and issue to be effected within
fourteen days of the Effective Date. The Red Wave Offer shall be made on
the basis that the existing shares held in Red Wave by the Trustee shall be
deducted from the Trustee's pro rata entitlement.
11.4 The Purchaser and the Company agree that the Offeror shall be entitled to
retain (and the Offeror hereby agrees to retain) from the cash
consideration payable to ITG Shareholders under the Offer and the Warrant
Proposals upon
the Scheme becoming effective an amount equal to the aggregate amount of
cash that ITG Shareholders and Warrantholders have elected to subscribe
for Red Wave Shares pursuant to the Red Wave Offer (the "Shareholder
Retained Amount"), such amount to be determined by reference to the
certificate to be delivered by the Purchaser to the Offeror at Escrow
Completion pursuant to schedule 3, and the Purchaser irrevocably and
unconditionally directs the Offeror to apply such retained amount towards
discharge of the Purchaser's obligations to the Company under this
agreement. Application of the Shareholder Retained Amount as aforesaid
shall discharge the Offeror's obligation to pay Additional Cash Payments
to such electing Shareholders and Warrantholders to the extent so applied.
11.5 The Nominated Directors and the Trustee each agree with the Offeror that
the Offeror shall be entitled to retain (and the Offeror hereby agrees to
retain) from the cash consideration which would otherwise be payable to
each of them respectively under the Offer and/or pursuant to the Warrant
Proposals such amount as is necessary, taken together with the Shareholder
Retained Amount, to discharge the Purchaser's obligations to pay the
Consideration to the Company (the "Nominated Directors' Retained Amount").
The Nominated Directors and the Trustee irrevocably and unconditionally
direct the Offeror to apply the Nominated Directors' Retained Amount
towards discharge of the Purchaser's obligations to the Company under this
agreement. Application of the Nominated Directors' Retained Amount as
aforesaid shall discharge the Offeror's obligations to pay cash pursuant
to the offers to the Nominated Directors and the Trustee to the extent so
applied.
12. Representations, warranties and undertakings
(A) Each of the parties that are bodies corporate represent and warrant
to each other on the date hereof and immediately prior to the Posting
Date in the following terms:
(i) it is a company duly incorporated and in good standing under
the laws of its place of incorporation;
(ii) it has the legal right and the necessary corporate power and
authority to enter into and perform this agreement;
(iii) this agreement will, when executed, constitute valid and
binding obligations of the relevant party and neither such
execution, or the performance of this agreement, will result
in a breach of, or constitute a default under, any instrument
to which the relevant party is a party or by which the
relevant party is bound or result in a breach of any order,
judgment or decree by which the relevant party is bound;
(iv) the execution and delivery of, and the performance by the
relevant party of its obligations under, this agreement and as
contemplated by the Red Wave Offer, the Offer and the Warrant
Proposals will not result in a breach of any provision of the
constitutional documents of the relevant party or require the
consent of its shareholders.
(B) (i) Each of the Nominated Directors represent and warrant to each
other party on the date hereof and immediately prior to the
Posting Date:
(a) in the terms of paragraphs (ii) and (iii) of sub-clause
(A); and
(b) that he is not bankrupt, nor is he the subject of any
bankruptcy petition, or application for an interim order
under section 253 of the Insolvency Xxx 0000, he is able
to pay his debts when they falls due, no person has been
ordered by any court to prepare a report with respect to
him under section 273 of the Insolvency Xxx 0000 and no
interim receiver has been appointed in respect of his
property under section 286 of the Insolvency Xxx 0000.
(ii) Each of the Nominated Directors and the Trustee irrevocably
undertakes not to grant any charge, security, lien or other
encumbrance or third party interest over any consideration to
which he may become entitled pursuant to the Offer or the
Warrant Proposals.
(iii) The Purchaser represents and warrants to the Company and the
Offeror that it has obtained a certificate pursuant to section
117(1) of the Companies Xxx 0000.
(iv) The Nominated Directors and the Company hereby represent and
warrant to the Offeror that:
(i) the Company has not provided unlawful financial
assistance within the meaning of section 152 of the
Companies Xxx 0000 directly or indirectly in connection
with this agreement, the matters contemplated by it, the
Scheme or the Offer and that the estimate of expenses
provided to the Offeror sets out all material items of
expense to be incurred in connection with the negotiation
and implementation of this agreement;
(ii) there are no circumstances that have not been fairly
disclosed to the Offeror or its Agents which would, or
would be reasonably likely to, give rise to a breach of
any of the conditions set out in Part B of Appendix I to
the Press Announcement or which would prevent any such
condition from being fulfilled or satisfied or from being
waived.
(v) The Company undertakes to the Offeror:
(a) to comply with all applicable law and regulations
including, without limitation, rules, regulations and
requirements from time to time of the Alternative
Investment Market of the London Stock Exchange; and
(b) to inform the Offeror promptly upon becoming aware of any
matter or circumstance which would or would be reasonably
likely to give rise to a breach of any of the conditions
set out in Part B of Appendix I to the Press Announcement
or which would prevent any such condition from being
fulfilled or satisfied or from being waived
(vi) The Purchaser, the Company, the Trustee and the Nominated
Directors each severally undertake to the Offeror, not to take
any action outside the requirements of this agreement which
could commit the Offeror to any obligation under the City Code
without the prior written consent of the Offeror. In
particular, but without limitation, neither the Nominated
Directors nor the Trustee shall acquire any interests in ITG
Shares either by exercise of share options or subscription
rights attaching to Warrants or otherwise (other than as may
be required by this agreement).
(vii) Each of the parties undertake to each other party to comply in
all respects with the rules of the City Code and with the
determinations of the Panel with respect to the Offer and the
Warrant Proposals.
(viii) The Trustee represents, warrants and undertakes that:
(a) GIC is the registered owner of the number of ITG Shares
referred to in recital (D) to this agreement; and
(b) it has full power and authority to bind GIC, and to
ensure compliance by GIC, on the terms of this agreement.
12.2 Each of the Nominated Directors hereby undertakes to procure that
immediately prior to the Effective Date, the Purchaser shall have
sufficient authorised and unissued ordinary share capital, and the
requisite authorities and disapplication under sections 80 and 89 of the
Companies Xxx 0000, to permit ITG Shareholders to subscribe their maximum
entitlement to the Red Wave Shares under the Red Wave Offer.
12.3 The Company and the Offeror agree to use their respective reasonable
endeavours to reach agreement with 2PR Holding BV to vary the terms of the
agreement dated 27th January, 1999 between ITG, ITG (Europe) Limited and
2PR Holding BV (as amended) which requires the Company to issue ITG Shares
to 2PR Holding BV on terms satisfactory to the Company and the Offeror.
12.4 Unless, in the reasonable opinion of the directors of the Company other
than the Nominated Directors, the Company would be unable to pay its debts
as they fall due as a result of complying with this undertaking, the
Company undertakes to the Offeror that for the period commencing with the
date of this agreement and ending six months after lapse of the Scheme or
the Offer for any reason it will not, and that it will procure that no
member of the ITG Group, or its or their respective Agents shall, solicit,
initiate, encourage or enter into (or continue) discussions or
negotiations relating to any proposal whereby any third party would
acquire control of a majority of the voting rights normally exerciseable
at a general meeting of the Company or the implementation of which would
be inconsistent with or which would or would be reasonably likely to
frustrate the acquisition of control of the Company by the Offeror, the
implementation of the Scheme or any of the transactions contemplated by
this agreement. In addition, save as may be required by law, regulation or
the City Code, the Company shall ensure that no member of the ITG Group
(nor any Agents of such members) discloses any information which is
confidential to the relevant member to any third party making any such
proposal.
12.5 The Company undertakes to keep the Offeror fully informed, subject to
compliance with legal and regulatory requirements, with respect to any
approaches made to it by any third party concerning an offer for the
Company (howsoever to be implemented) or any transaction which would be
inconsistent with or which would or would be reasonably likely to
frustrate the acquisition of control of the Company by the Offeror, the
implementation of the Scheme or any of the transactions contemplated by
this agreement.
12.6 In consideration of the Offeror agreeing to the release of the Press
Announcement and to make available to the Company the Loan, the Company
undertakes that if any other person announces a firm intention (within the
meaning of the Code) to make an offer or proposal for the takeover of ITG,
or merger of that person and the Company, howsoever effected, either
without preconditions or with only such preconditions as are accepted by
or acceptable to the Panel and the Scheme does not become effective then,
within two business days after written demand by the Offeror, the Company
shall pay to the Offeror the sum of (Pounds)1 million.
12.7 If the Scheme becomes effective the Company agrees to use its reasonable
endeavours to procure the release of Xxx Xxxxxx from the security given to
Lucent Technologies in respect of the obligations of the Company.
12.8 The Company, Xxx Xxxxxx and the Trustee each represent and warrant to the
Offeror that the acquisition of ITG Shares by Xxx Xxxxxx and the Trustee
pursuant to the exercise of subscription rights attaching to any Warrants
will not give rise to an obligation pursuant to Rule 9 of the City Code
imposed on Xxx Xxxxxx, the Trustees, Xxxxxxxx Xxxxxxxx or the Offeror.
13. Termination
13.1 Without prejudice to any other provision of this agreement, if the Scheme
Document is not posted to ITG Shareholders and Warrantholders on or before
the Longstop Date, the Company or the Offeror shall be entitled to
terminate this agreement by serving notice in writing upon each other
party in which case the Offer and the Warrant Proposals, the Scheme and
the sale of the Non-ISP Interests shall not proceed.
13.2 (i) If, prior to the Posting Date any event, circumstance or matter
occurs with respect to the Company or any member of the ITG Group
which would (or would be reasonably likely to), if it were to occur
subsequent to the Posting Date, result in any of the conditions set
out in Part B of Appendix 1 to the Press Announcement not being
satisfied or fulfilled or would or would be reasonably likely to
prevent any such condition from being satisfied or fulfilled, or
would or would be reasonably likely to give the Offeror grounds not
to proceed with the Offer for any reason, then, with the consent of
the Panel, the Offeror may terminate this agreement by serving notice
in writing upon each other party.
(ii) If, prior to the Posting Date any event, circumstance or matter
occurs with respect to the Offeror or any member of the Concentric
Group which would (or would be reasonably likely to), if it were to
occur subsequent to the Posting Date and on the basis that the
conditions set out in Part B of Appendix 1 of the Press Announcement
were to apply
to the Offeror and the Concentric Group on the same terms as to the
Company, mutatis mutandis, result in any of such conditions not being
satisfied or fulfilled, or would be reasonably likely to prevent any
such condition from being satisfied or fulfilled then, with the
consent of the Panel, the Company may terminate this agreement by
serving notice in writing upon each other party.
13.3 This agreement shall terminate upon lapsing of the Offer or in the event
that the Scheme does not become effective on or before 31 January, 2000.
13.4 In the event of termination of this agreement, all the rights and
obligations of the parties hereunder shall terminate (but without
prejudice to accrued rights and liabilities) save that clauses 12.4 and
12.6, 16, 17, 20 and 24 shall continue to apply.
14. Further assurance
Each of the parties shall from time to time, on being required to do so by any
other party to this agreement now or at any time in the future, do or procure
the doing of all such acts and/or execute or procure the execution of all such
documents in a form reasonably satisfactory to the requesting party as the
requesting party may reasonably consider necessary for giving full effect of
this agreement and securing to the requesting party the full benefit of the
rights, powers and remedies conferred upon the requesting party in this
agreement.
15. Announcements
15.1 Subject to sub-clause 15.2, no announcement (other than the Press
Announcement) concerning the Offer, the Scheme, the Warrant Proposals or
the Red Wave Offer or any ancillary matter contemplated by this agreement
shall be made by any party hereto without the prior written approval of
the Offeror, such approval not to be unreasonably withheld or delayed.
15.2 The Company and the Offeror may make such announcements as are required
by:
(i) the law of any relevant jurisdiction; or
(ii) any securities exchange or regulatory or governmental body to which
either party is subject or submits, wherever situated, including
(without limitation) the Nasdaq National Market and the London Stock
Exchange, whether or not the requirement has the force of law,
in which case the party concerned shall take all such steps as may be
reasonable and practicable in the circumstances to agree the contents of
such announcement with the other party before making such announcement.
16. Confidentiality
16.1 Subject to sub-clause 16.2 and clause 15, each party shall treat as
strictly confidential all information received or obtained as a result of
entering into or performing this agreement which relates to:
(i) the provisions of this agreement;
(ii) the negotiations relating to this agreement;
(iii) the subject matter of this agreement; or
(iv) any other party.
16.2 Each party may disclose information which would otherwise be confidential
if and to the extent:
(i) required by the law of any relevant jurisdiction;
(ii) required by existing contractual obligations;
(iii) required by any securities exchange or regulatory or governmental
body to which either party is subject or submits, wherever situated,
including (without limitation) the Nasdaq National Market and the
London Stock Exchange, whether or not the requirement for
information has the force of law;
(iv) required to vest the full benefit of this agreement in the relevant
party;
(v) disclosed to the professional advisers, auditors and bankers of each
party;
(vi) the information has come into the public domain through no fault of
that party; or
(vii) the party which has provided the relevant information has given
prior written approval to the disclosure,
provided that any such information disclosed pursuant to paragraph (i),
(ii) or (iii) of this sub-clause shall be disclosed only after
consultation with the Offeror and the Company and if such information is
in the form of an announcement, then the party concerned shall take all
such steps as may be reasonable and practicable in the circumstances to
agree the contents of such announcement with the other party before making
such announcement.
17. Costs and Expenses
Each party shall pay its own costs and expenses in relation to the negotiation
and preparation of this agreement and the implementation of the transactions
contemplated hereby.
18. Effect of Completion
Any provision of this agreement which is capable of being performed after but
which has not been performed at or before the Effective Date and all covenants
and other undertakings contained in or entered into pursuant to this agreement
shall remain in full force and effect notwithstanding the Effective Date.
19. Assignment
No party shall, save with the consent of each other party, be entitled to assign
any of its rights or benefits under this agreement.
20. Notices
20.1 Except where expressly stated otherwise, a notice or other communication
given, or required to be given, under this agreement shall only be
effective if it is in writing (other than writing on the screen of a visual
display unit or other similar device which shall not be treated as writing
for the purposes of this clause).
20.2 Notices or other communications under this agreement shall be sent to a
party at its address set out above or number and for the attention of the
individual or department set out below:
Party Attention of: Facsimile no.
The Company X. Xxxxxxxx (00) 000 000 0000
Chief Executive
The Offeror X. Xxxxxxxx (0) 000 000 0000
Chief Financial Officer
The Purchaser X. Xxxxxx (00) 000 000 0000
Xxx Xxxxxx - (00) 000 000 0000
Xxxxxxxx Xxxxxxxx - (00) 000 000 0000
The Trustee Xxxxxxx Xxxxxx (00) 0000 000 000
29
provided that a party may change its notice details on giving notice to
each other party of the change in accordance with this clause. That notice
shall only be effective on the day falling five clear Business Days after
the notification has been deemed duly given in accordance with clause 20.3
or such later date as may be specified in the notice.
20.3 Any notice given under this agreement shall, in the absence of earlier
receipt, be deemed to have been duly given as follows:
(a) if delivered personally, on delivery;
(b) if sent by first class post, two (or, if sent by air mail, ten) clear
Business Days after the date of posting;
(c) if sent by facsimile, on completion of its transmission if
confirmation of good receipt is obtained by the sender.
20.4 Any notice given under this agreement outside working hours in the place to
which it is addressed shall be deemed not to have been given until the
start of the next period of working hours in such place.
21. Counterparts
21.1 This agreement may be executed in any number of counterparts, and by the
parties on separate counterparts, but shall not be effective until each
party has executed at least one counterpart.
21.2 Each counterpart shall constitute an original of this agreement, but all
the counterparts shall together constitute but one and the same instrument.
22. Time of Essence
Except as otherwise expressly provided, time is of the essence of this
agreement.
23. Invalidity
If at any time any provision of this agreement is or becomes illegal, invalid or
unenforceable in any respect under the law of any jurisdiction, that shall not
affect or impair the legality, validity or enforceability in that jurisdiction
of any other provision of this agreement.
24. Choice of Governing Law
This agreement shall be governed by and construed in accordance with English
law.
25. Jurisdiction
25.1 Each of the parties to this agreement irrevocably agrees that the courts of
England shall have exclusive jurisdiction to settle any disputes which may
arise out of or in connection with this agreement and that accordingly any
proceedings may be brought in the courts of England.
25.2 Each party irrevocably waives any objection which it may have now or
hereafter to the laying of the venue of any proceedings in the courts of
England and any claim that any such proceedings have been brought in an
inconvenient forum and further irrevocably agrees that a judgement in any
proceedings brought in the courts of England shall be conclusive and
binding upon such party and may be enforced in the courts of England.
Executed as a deed by
the Company acting by:
XXXXXXXX XXXXXXXX
......................................
Director
XXX XXXXXX
......................................
Director
Executed as a deed by
the Offeror acting by:
XXXXX X. XXXXXXXX
......................................
Director & Officer
XXXXXXX XXXXXXXX
......................................
Officer, Senior Vice President and CFO
Executed as a deed by
the Purchaser acting by:
XXX XXXXXX
......................................
Director
XXXXXXX XXXXXXXX
......................................
Secretary
Executed and delivered as a deed by in the presence of:
Xxx Xxxxxx:
XXXXXX XXXXXX
XXX XXXXXX ...........................
...................................... XXXXXXX XXX, XXXXXX XX0X 0XX
............................
(name and address of witness
Executed and delivered as a deed by in the presence of:
Xxxxxxxx Xxxxxxxx:
XXXXXX XXXXXX
XXXXXXXX XXXXXXXX ...........................
...................................... XXXXXXX XXX, XXXXXX XX0X 0XX
...........................
(name and address of witness
Executed as a deed by
the Trustee acting by
XXXXXXX XXXXXX
..........................................
Director
X. XXXXXX
..........................................
For Consultancy & Secretarial Services Ltd.
Secretary
Schedule 1
(Press Announcement)
Schedule 2
(Irrevocable Voting Undertakings)
Part A: Nominated Directors
(Signed copies received on execution)
Part B: Trustee
(Signed copy received on execution)
Schedule 3
(Completion Arrangements)
At Completion:
1. The Company shall deliver to the Purchaser:
(A) Duly executed transfers in respect of:
(i) the Wave Shares;
(ii) subject to clause 6.1, the Redstone Shares;
(iii) the Ballynatray Shares;
(iv) the Global Wave Shares; and
(v) the share certificates for the above in the name of the relevant
transferor and any power of attorney under which any transfer is
executed;
(B) A counterpart of the Deed of Novation executed by those parties thereto
which are members of the ITG Group.
(C) A deed of release in a form reasonably satisfactory to Red Wave whereunder
the Company releases Global Wave Limited from its obligations to repay the
Global Wave Debts to the Company in consideration of a payment by Red Wave
of an equivalent amount to the Company as part of the Consideration.
(D) A copy of the minutes of a duly held meeting of the directors of the
Company authorising the execution by the Company of this agreement.
2. The Purchaser shall deliver to each other party hereto:
(i) a copy of the resolution of the directors of the Purchaser authorising
the execution by the Purchaser of this agreement; and
(ii) a certificate from the registrars appointed for the purposes of
administering the Red Wave Offer of the aggregate amount of cash in
respect of which elections to subscribe Red Wave Shares pursuant to
the Red Wave Offer have been received as at the close of business on
the day prior to the Effective Date.
3. The Purchaser shall deliver to the Company an executed counterpart of the
Deed of Novation.
4. The Offeror shall deliver to each other party hereto a certified copy of
the certificate of Bear, Xxxxxxx International referred to in clause 6.1.
Schedule 4
(Deed of Novation)
THIS DEED OF NOVATION is made the [ ] day of [ ], 1999
BETWEEN:
1. [Red Wave plc], a company registered in England and Wales under No.
[ ] ("Red Wave")
2. Global Internet Limited, a company registered in England and Wales under
No. [ ]("Debtor 1")
3. GX Networks Limited, a company registered in England and Wales under No.
[ ]("Debtor 2")
AND
4. Ballynatray Holdings plc, a company registered in England and Wales under
No. [ ]("Creditor")
WHEREAS:
(A) Pursuant to an agreement dated [ ] ("Agreement 1"), Debtor 1
owes Creditor certain amounts of principal and interest (the "First Debt")
which at the date hereof amount to [ ].
(B) Pursuant to an agreement dated [ ] ("Agreement 2"), Debtor 2
owes Creditor certain amounts of principal and interest (the "Second Debt")
which at the date hereof amount to [ ].
(C) The parties hereto have agreed that the First Debt and the Second Debt
should be novated to Red Wave so that Debtor 1 and Debtor 2 are released
and discharged from their obligations to the Creditor in respect of the
First Debt and the Second Debt respectively in consideration of Red Wave
assuming like obligations.
NOW IT IS AGREED as follows:
1. Interpretation
In this agreement, unless other specified:
(i) references to clauses are to clauses of this agreement; and
(ii) headings to clauses and schedules are for convenience only and do not
affect interpretation of this agreement.
2. Red Wave's Undertaking
With effect from the date of this agreement and in consideration of the
undertakings given by Debtor 1 and Debtor 2 (together the "Debtors") in
clause 3, Red Wave hereby undertakes to observe, perform, discharge and be
bound by Agreement 1 and Agreement 2 (together the "Agreements") as if Red
Wave were an original party to the Agreements in place of the Debtors and
as principal obligor in respect of the First Debt and the Second Debt.
3. Debtors' Undertakings and Release of Creditor
With effect from the date of this agreement and in consideration of the
undertakings given by Red Wave in clause 2 and the Creditor in clause 4,
the Debtors hereby release and discharge the Creditor from all obligations
to observe, perform, discharge and be bound by the Agreements.
4. Creditor's Undertaking and Release of Debtors
With effect from the date of this agreement and in consideration of the
undertakings given by Red Wave in clause 2 and the Debtors in clause 3, the
Creditor hereby:
(i) releases and discharges the Debtors from all obligations to observe,
perform, discharge and be bound by the Agreements; and
(ii) accepts Red Wave's undertaking to observe, perform, discharge and be
bound by the Agreements (such undertaking being set out in clause 2).
5. Notices
For the purposes of all provisions in the Agreements concerning the service
of notices, the address of Red Wave is its registered office from time to
time.
6. Counterparts
6.1 This agreement may be executed in any number of counterparts, and by the
parties on separate counterparts, but shall not be effective until each
party has executed at least one counterpart.
6.2 Each counterpart shall constitute an original of this agreement, but all
the counterparts shall together constitute but one and the same instrument.
Executed as a deed by Red Wave ) ........................ Director
acting by a director and its )
secretary/two ) ........................ [Secretary/
directors ) Director]
Executed as a deed by Global ) ........................ Director
Internet Limited
acting by a director and its )
secretary/two ) ........................ [Secretary/
directors ) Director
Executed as a deed by GX Networks ) ........................ Director
Limited
acting by a director and its )
secretary/two ) ........................ [Secretary/
directors ) Director]
Executed as a deed by Ballynatray ) ........................ Director
Holdings plc acting by a director
and its secretary/two directors )
) ........................ [Secretary/
) Director]
Schedule 5
(Sequence of Events)
Indicative Outline timetable for Court Procedure
Indicative Timetable Step
-------------------------------------------------------------------------------------------------------
D -32 Preparation of Scheme Document, incorporating an explanatory note of the
Scheme
-------------------------------------------------------------------------------------------------------
D -3 Application submitted by way of Petition to the Court to convene the
Court Meeting and to sanction the Scheme (under S.425(1)). (N.B.
finalised Scheme Document required).
-------------------------------------------------------------------------------------------------------
D -1 First Interlocutor (First Order) granted convening the Court Meeting, and
containing orders for advertisement
-------------------------------------------------------------------------------------------------------
D Day Issue of Scheme Document to ITG Shareholders, incorporating the Notice of
the Court Meeting (N.B. minimum of 21 days' notice required)
-------------------------------------------------------------------------------------------------------
D Day to D +6 Advertisements (of Court Meeting) made in newspapers, usually FT,
Edinburgh Gazette and The Herald or Scotsman (21 days' notice from day of
advertisement is required prior to meeting)
-------------------------------------------------------------------------------------------------------
D +29 Court Meeting (N.B. may be held in Scotland or England)
-------------------------------------------------------------------------------------------------------
D +30 Motion enrolled at Court for the Second Order - to order advertisement of
the Scheme and giving a period for the lodging of answers
-------------------------------------------------------------------------------------------------------
D +56 Last day for lodging of answers (21 days' notice after advertisement)
-------------------------------------------------------------------------------------------------------
D +56 to D +66 Motion enrolled for Third Order - to appoint Reporter to prepare a Report
on the terms of the Petition (generally this takes approximately 3-4
weeks, but the timescale may be minimised if the Reporter is instructed
before his formal appointment (e.g. on or about D Day))
-------------------------------------------------------------------------------------------------------
D +66 to D +68 Motion enrolled for Final Order
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
D +70 Application to Court to grant the Final Order requested in the Petition
(i.e. to sanction the resolution of the Court Meeting in terms of
S.425(2))
-------------------------------------------------------------------------------------------------------
D +72 Delivery to Registrar of a certified copy Interlocutor (i.e. of the Court
Order)
-------------------------------------------------------------------------------------------------------
D +72 Effective Date
-------------------------------------------------------------------------------------------------------
