EXHIBIT 4.(a)(xvii)
DATED September 10, 2001
RED-M (COMMUNICATIONS) LIMITED (1)
- and -
M XXXXXX AND OTHERS (2)
- and -
XXXXX NETWORKS NV (3)
- and -
THE APAX FUNDS (4)
- and -
THE AMADEUS FUNDS (5)
- and -
INTEL CAPITAL CORPORATION (6)
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SHAREHOLDERS AGREEMENT
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XXXXXXXX XXXXXX XXXXXXXXXXX
Chichester House
000/000 Xxxx Xxxxxxx
Xxxxxx XX0X 0XX
Ref: TRA/RED22.1
CONTENTS
1. Definitions and Interpretation
2. Company Option
3. Strategic Investors
4. Management of the Company
5. Financial Information
6. Matters Requiring Consent
7. Management Non-Compete Undertakings
8. Xxxxx Non-Compete Undertakings
9. Nominated Directors and New Directors
10. Intel Board Observer
11. The Audit Committee and the Remuneration Committee
12. Transfers and New Members
13. Xxxxx Securitisation
14. Management and Employee Shares
15. Investor's Consent
16. Sale or Listing
17. Duration of Obligations
18. Enforcement of the Company's Rights
19. Company Confidential Information
20. General Provisions
21. April Investment Agreement
22. Contracts (Rights of Third Parties) Xxx 0000
23. Notices
24. Governing Law and Jurisdiction
SCHEDULES
Schedule 1 - The Senior Managers
Schedule 2 - Particulars of the Company and Subsidiaries
Schedule 3 - Deed of Adherence
AGREED FORM DOCUMENT
1. Articles
2
AGREEMENT dated September 10, 2001
PARTIES:
(1) RED-M (COMMUNICATIONS) LIMITED a company incorporated in England and
Wales under Number 03985301 whose registered office is at Wexham
Springs, Xxxxxxxxx Xxxx, Xxxxxx, Xxxxxx, Xxxxxxxxx XX0 0XX ("COMPANY").
(2) THE PERSONS whose names and addresses are set out in Schedule 1.
(3) XXXXX NETWORKS NV a company incorporated in the Netherlands whose
address is at Transpolis Schiphol Airport, Polaris Avenue, 23, 2132 JH
Hoofddorp, The Netherlands ("XXXXX").
(4) APAX EUROPE V - A, L.P., a Delaware limited partnership established
under the Delaware Revised Uniform Limited Partnership Act (the "EUROPE
A FUND"), APAX EUROPE V - B, L.P., an English limited partnership
established under the Limited Partnerships Xxx 0000 (the "EUROPE B
FUND"), APAX EUROPE V-C GMBH & CO KG, a German limited partnership
(Kommanditgesellschaft) established under the German Civil Code
(Handelsgesetzbuch) (the "EUROPE C FUND"), APAX EUROPE V - D, L.P., an
English limited partnership established under the Limited Partnerships
Xxx 0000 (the "EUROPE D FUND"), APAX EUROPE V - E, L.P., an English
limited partnership established under the Limited Partnerships Xxx 0000
(the "EUROPE E FUND"), APAX EUROPE V - F, C.V., a Dutch limited
partnership (commanditaire vennootschap) established under the Wetboek
van Koophandel (the "EUROPE F FUND"), and APAX EUROPE V - G, C.V., a
Dutch limited partnership (commanditaire vennootschap) established
under the Wetboek van Koophandel (the "EUROPE G FUND"), each having its
principal place of business at 00-00 Xxxxxxxx Xxxx, Xx. Xxxxx Xxxx,
Xxxxxxxx, XX0 0XX and each acting by its investment manager Apax
Partners Europe Managers Limited whose registered office is at 00
Xxxxxxxx Xxxxx, Xxxxxx X0X 0XX, (collectively referred to as "APAX" and
individually referred to as an "APAX FUND"); and
(5) AMADEUS II A, a limited partnership established in England under the
Limited Partnership Xxx 0000, whose principal place of business is at 0
Xxxxxxxxxxx Xxxx, Xxxxxxxxx, XX0 0XX acting by its manager, AMADEUS
CAPITAL PARTNERS LIMITED having its registered office at 0 Xxxxxxxxxxx
Xxxx, Xxxxxxxxx, XX0 0XX ("AIIA"), AMADEUS II B, a limited partnership
established in England under the Limited Partnership Xxx 0000, whose
principal place of business is at 0 Xxxxxxxxxxx Xxxx, Xxxxxxxxx, XX0
0XX acting by its manager, AMADEUS CAPITAL PARTNERS LIMITED having its
registered office at 0 Xxxxxxxxxxx Xxxx, Xxxxxxxxx, XX0 0XX ("AIIB"),
AMADEUS II C, a limited partnership established in England under the
Limited Partnership Xxx 0000, whose principal place of business is at 0
Xxxxxxxxxxx Xxxx Xxxxxxxxx XX0 0XX acting by its manager, AMADEUS
CAPITAL PARTNERS LIMITED having its registered office at 0 Xxxxxxxxxxx
Xxxx,
0
Xxxxxxxxx, XX0 0XX ("AIIC"), AMADEUS II GMBH & CO KG, a German limited
partnership acting by its manager AMADEUS CAPITAL PARTNERS LTD ("AKG"),
AMADEUS II AFFILIATES, a limited partnership established in England
under the Limited Partnership Xxx 0000, whose principal place of
business is at 0 Xxxxxxxxxxx Xxxx, Xxxxxxxxx, XX0 0XX acting by its
manager, AMADEUS CAPITAL PARTNERS LIMITED having its registered office
at 0 Xxxxxxxxxxx Xxxx, Xxxxxxxxx, XX0 0XX ("AII AFFILIATES"). (AIIA,
AIIB and AIIC, AKG and AII Affiliates collectively referred to as
"AMADEUS" and individually to as an "AMADEUS FUND");
(6) INTEL CAPITAL CORPORATION a Cayman Islands company whose registered
office is situated at the offices of Caledonian Bank & Trust Limited,
Caledonian House, PO Box 1043, Xxxxxx Town, Grand Cayman, Cayman
Islands ("INTEL").
RECITALS:
The parties (with the exception of the Company) are all shareholders
(directly or through a nominee) in the Company and wish to record
certain matters agreed between them relating to the Company
(particulars of which are set out in Schedule 2).
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION*
In this Agreement (which expression shall be deemed to include the
Schedules hereto):
1.1 Unless the context otherwise requires:
"AGREED FORM" means in the form previously agreed by the parties to
this Agreement and initialled for the purposes of identification by or
on their behalf;
"AMADEUS DIRECTOR" means the non-executive director of the Company
nominated by Amadeus pursuant to clause 9.2 and the Articles;
"ANNUAL PLAN" means the Group operating plan and financial budget
(including inter alia annual revenue and capital expenditure budgets)
to be prepared for each financial year and approved in accordance with
clause 5.1.2;
"APRIL INVESTMENT AGREEMENT" means the investment agreed entered into
by the parties hereto (excluding Intel) on 12th April 2001;
"APAX DIRECTOR" means the non-executive director of the Company
nominated by Apax pursuant to clause 9.2 and the Articles;
"ARTICLES" means the articles of association of the Company as amended
from time to time (and "ARTICLE" shall be construed accordingly);
"ASSOCIATE" means, in relation to any person, an associated company of
that person or a person who is connected with that person determined in
accordance with Sections 416 and 839 of the Taxes Act (save that in
construing Section 839 the term "control" shall have the meaning given
by Section 840 or Section 416 of the Taxes
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*Confidential treatment for various items in this section requested by Xxxxx
Networks N.V.
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Act so that there shall be control wherever either of the said Sections
would so require);
"AUDITORS" means the auditors of the Company from time to time;
"BOARD" means the board of directors of the Company;
"BUSINESS DAY" means a day on which the banks are open for business in
the country of receipt of any notice;
"BUSINESS PLAN" means the business plan and profit and cash flow
projections prepared by the Senior Managers dated 10th April 2001;
"COMPANY OPTION" means the option for the Company to call for the
subscription for further Convertible Shares in accordance with clause
2;
"CONFIDENTIAL INFORMATION" means the Intellectual Property Rights,
trade secrets, accounts, financial or trading information or other
confidential information relating to the businesses, transactions,
property, finances, dealings or affairs of the Group including, without
limitation, any information regarding the formulae, products,
processes, research projects or the other technical data of the Group
or the names and addresses of any customers, suppliers or agents of the
Group and including, without limitation, any papers or records
howsoever recorded (whether in writing or print or by photographic,
electrical, magnetic, symbolic or other means);
"CONNECTED PERSON" has the meaning given to that expression in Section
839 Taxes Act;
"CONVERTIBLE SHARES" means the Series A Convertible Preferred shares of
$1 each in the capital of the Company;
"DEED OF ADHERENCE" means a deed in the form set out in Schedule 3 or a
deed in such other form as the Shareholders may agree;
"$" means US dollars;
"EASDAQ STOCK MARKET" means the recognised investment exchange (as
defined in s285 of the Financial Services and Markets Act 2000) which
is regulated by the Belgian Banking and Finance Commission and any
successor thereof;
ENCUMBRANCE" means a mortgage, charge, pledge, lien, option,
restriction, right of first refusal, right of pre-emption, third party
right or interest, other encumbrance or security or equity interest of
any kind, or another type of preferential arrangement (including,
without limitation, a title transfer and retention arrangement) having
similar effect;
"EXISTING SCHEMES" means the Red-M 2000 stock plan adopted by a
resolution of the board dated 31st May 2000 and the Red-M 2000
California stock plan adopted by a resolution of the Board dated 31st
May 2000;
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"FACILITIES AGREEMENT" means the agreement entered into by the Company
and Xxxxx on 12th April 2001.
"GROUP" means, in relation to a company, that company and any company
which is from time to time a holding company of that company or a
subsidiary of that company or of such holding company;
"GROUP" means the Company and its subsidiary undertakings (if any) from
time to time and "MEMBER OF THE GROUP" or "GROUP COMPANY" is to be
construed accordingly;
"INITIAL INVESTORS" means Apax, Amadeus and Intel (and the expression
"INITIAL INVESTOR" shall be construed accordingly);
"INTELLECTUAL PROPERTY" means:
(a) patents, trade marks, service marks, registered designs,
applications for any of those rights, trade and business
names, domain names, unregistered trade marks and service
marks, semi-conductor topography rights, copyrights (including
copyright in computer software), database rights and all other
semi-generis rights, know-how, rights in designs and
inventions; and
(b) rights under licences, consents, orders, statutes or otherwise
in relation to a right in paragraph (a);
in either case in any jurisdiction;
"INTELLECTUAL PROPERTY RIGHTS" means all Intellectual Property used by
the Company in, or in connection with its business;
"INVESTORS" means Apax, Amadeus and Intel and, to the extent applicable
at the time, the Strategic Investors (and the expression "INVESTOR"
shall be construed accordingly);
"LAN" means local area network;
"LISTING" means the admission of any part of the ordinary share capital
of the Company to the Official List (as defined in s103(1) of the
Financial Services and Markets Act 2000) or the grant of permission to
deal in the same (or in any instruments representing any such ordinary
share capital) on the NASDAQ Stock Market, EASDAQ Stock Market or the
Neuer Markt Stock Market and specifically excludes the Alternative
Investment Market;
"XXXXX DIRECTORS" means the non-executive directors of the Company
nominated by Xxxxx pursuant to clause 9.2 and the Articles (and the
expression "XXXXX DIRECTOR" shall be construed accordingly);
"MANAGERS" means the Senior Managers and each of Xxxxxx Xxxxxxx and
Alison Edge (and the expression "MANAGER" shall be construed
accordingly);
6
"NASDAQ STOCK MARKET" means the recognised investment exchange (as
defined in s285 of the Financial Services and Markets Act 2000) which
is regulated by the National Association of Securities Dealers, Inc., a
self-regulatory organisation which operates under the authority granted
it by the 1938 Xxxxxxx Act Amendment to the Securities Xxxxxxxx Xxx
0000;
"NEUER MARKT STOCK MARKET" means the recognised investment exchange (as
defined in s285 of the Financial Services and Markets Act 2000) owned
and operated by the Deutsche Borse AG group of companies;
"NOMINATED DIRECTORS" means the Apax Director, Amadeus Director and
Xxxxx Directors (and the expression "NOMINATED DIRECTOR" shall be
construed accordingly);
"PAN" means personal area network;
"PRINCIPAL WARRANTIES" means the warranties referred to in clause 7 of
the April Investment Agreement;
"SENIOR MANAGERS" means Xxxxxxx Xxxxxx, Xxxxx Xxxxx and Xxxxx Xxxxx;
"SHARE" means a share in the capital of the Company of whatever class;
"SHAREHOLDERS" means all those persons holding shares (and the
expression "SHAREHOLDER" shall be construed accordingly);
"STRATEGIC INVESTORS" means the new investors in the Company proposed
pursuant to clause 3 (and the expression "STRATEGIC INVESTOR" shall be
construed accordingly);
"SYNDICATION SHARES" means XXX Convertible Shares to be dealt with
pursuant to clause 3;
"TRADE INVESTORS" means any person which is not an independent
financial investor. For this purpose independent financial investor
means an investor which is not a trading company, or an associate of
any trading company (other than in respect of financial investments
made by it in such trading companies). For the avoidance of doubt a
venture capital fund which is an associate of a trading company (other
than in respect of a financial investment made by it in such trading
company) is deemed a Trade Investor;
1.2 A reference to a "SUBSIDIARY" or "HOLDING COMPANY" is to be construed
in accordance with Section 736 of the Companies Xxx 0000 and a
reference to a "SUBSIDIARY UNDERTAKING" or a "GROUP UNDERTAKING" is to
be construed in accordance with Sections 258 and 259 of the Companies
Xxx 0000.
1.3 References to statutes or statutory provisions include those statutes
or statutory provisions as amended, extended, consolidated, re-enacted
or replaced from time to time and any orders, regulations, instruments
or other subordinate legislation made thereunder.
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1.4 Subject as herein otherwise expressly defined, words and phrases
defined in Part XXVI of the Companies Xxx 0000 (the "ACT") and in the
Articles bear the same respective meanings.
1.5 Unless otherwise specified, words importing the singular include the
plural, words importing any gender include every gender, words
importing persons include bodies corporate and unincorporate and
references to the whole include the part; and (in each case) vice
versa.
1.6 References to clauses and other provisions are references to clauses
and other provisions of this Agreement.
1.7 The headings shall not affect interpretation.
2. COMPANY OPTION*
2.1 The Investors hereby grant to the Company the right to call upon the
Investors to subscribe, in the proportions specified in clause 2.2, for
2,396,166 new Convertible Shares at a subscription price of $3.13 per
share at any time within the period 9 to 12 months from 12th April 2001
by serving written notice on the Investors exercising the option. The
Investors shall pay the subscription monies within 21 days of such
notice and within 7 days thereafter the Company shall allot and issue
the new Convertible Shares to the Investors (or their nominee(s)) and
the Company shall register the Investors (or their nominee(s)) as the
holders of such Convertible Shares and shall prepare and deliver the
requisite share certificate to the Investors (or their nominee(s)).
2.2 The Investors (or their nominee(s)) shall subscribe for the new
Convertible Shares in proportion to their respective share holdings in
Convertible Shares.
2.3 The right to exercise the Company Option is conditional upon there
being no Material Adverse Change in the business of the Company at the
date notice of exercise of the Company Option is given and "MATERIAL
ADVERSE CHANGE" shall mean:
2.3.1 that Xxxx Xxxxxx is no longer employed by the Company (other
than by reason of Dismissal Without Cause); or
2.3.2 that more than one of the Senior Managers has left the employ
of the Company (excluding any Senior Manager leaving by reason
of Dismissal Without Cause);
where "DISMISSAL WITHOUT CAUSE" shall mean where an employee of the
Company ceases to be an employee of the Company for any of the
following reasons:
(i) the Company giving notice to terminate his employment under
the terms of any service agreement for reasons other than a
breach by the employee of
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*Confidential treatment for various items in this section requested by Xxxxx
Networks N.V.
8
such service agreement or such employee's wilful neglect or
gross misconduct; or
(ii) the serious illness, death, injury or disability of the
employee which renders the employee incapable of working;
(iii) by the mutual consent of the Company and the employee;
(iv) in circumstances in which it has been legally established by a
court or tribunal of competent jurisdiction that he has a
successful claim against the Company for redundancy, unfair
dismissal or wrongful dismissal; or
(v) by reason of the employee terminating his service agreement
due to the Company's breach or by reason of his service
agreement expiring and not being renewed by the Company; or
2.3.3 that there have been material adverse variances in the OEM
relationships from those existing at 12th April 2001 (if any)
or envisaged by the Business Plan, and "MATERIAL ADVERSE
VARIANCE" for the purposes of this clause 2.3.3 shall mean the
Company failing to establish at least XXX major strategic OEM
relationships within 12 months of 12th April 2001 with
entities such as XXX or entities of equivalent standing; or
2.3.4 there has been a material breakdown in the operability of the
technology of the Company, and "MATERIAL BREAKDOWN IN THE
OPERABILITY OF THE TECHNOLOGY" for the purposes of this clause
2.3.4 shall mean:
2.3.4.1 the Company either (i) not developing a commercial
PICONET product within twelve months of 12th April
2001, or (ii) not releasing a commercial product
that conforms and has been qualified/certified with
the Bluetooth 1.1 ratification or such other
equivalent ratification for the market, assuming
such ratification implies wide scale
interoperability of devices; or
2.3.4.2 the Company not developing a saleable product that
is capable of supporting voice calls in a way that
conforms with the Bluetooth Standard; or
2.3.4.3 a dissolvement of the Bluetooth SIG; or
2.3.4.4 the Company not being allowed to be an associate
member of the Bluetooth SIG or being excluded from
the SIG PAN working group;
2.3.5 the Company not achieving XXX million of revenues (excluding
bad and doubtful debts) to 31st December 2001; or
2.3.6 that there has been a material breach of any of the Principal
Warranties (which for the purposes of the this clause 2.3.6
only shall mean a breach
9
of the Principal Warranties resulting in a claim or claims in
excess of the aggregate limit set by clause 7.7.3 of the April
Investment Agreement).
2.4 There shall be no deemed material breakdown in the operability of the
technology for the purposes of clause 2.3.4 if Apax agree in writing
any variance to the criteria set out in clause 2.3.4. Apax before
agreeing any such variance will consult with Amadeus and Intel.
3. STRATEGIC INVESTORS*
3.1 The Company, with the support of the Shareholders, shall use its
reasonable endeavours to procure Strategic Investors to subscribe on
the terms of this Agreement for the Syndication Shares at a minimum
price of $3.13 per share.
3.2 The Company shall endeavour to procure subscription for the Syndication
Shares from ideally XXX Strategic Investors. The Board shall approve
the Strategic Investors which, ideally, shall comprise any of: XXX.
3.3 Insofar as the Company has not been able to procure Strategic Investors
(to be approved in accordance with clause 3.2 above) to subscribe in
cash for some or all of the Syndication Shares, within a period
expiring midnight 11th October 2001, the Initial Investors shall, if
requested in writing by the Company prior to expiry of such period (or
such further period as may be agreed in writing by the Company and the
Initial Investors), forthwith subscribe for the amount of the remaining
Syndication Shares on the terms of this Agreement in proportion to
their respective shareholdings in Convertible Shares.
3.4 Each of the parties to this Agreement hereby waives both compliance
with any restriction relating to pre-emption and enforcement of any
rights relating to pre-emption which he or it may have which exist
pursuant to this Agreement, the Articles or otherwise or pursuant to
clause 6 and which may prevent the subscription, syndication and
allotment of the Syndication Shares contemplated in this Agreement.
3.5 Upon receipt of the subscription monies due the Company shall forthwith
allot the Syndication Shares and issue certificates in respect thereof.
3.6 Notwithstanding clause 20.1 the terms of this clause 3 may be varied in
writing by the Company, Xxxxx and the Initial Investors alone.
4. MANAGEMENT OF THE COMPANY
4.1 The Company undertakes with the Initial Investors (for such period as
they hold in aggregate at least 2.5% of the issued share capital of the
Company) and Xxxxx (for such period as it holds at least 2.5% of the
issued share capital of the Company), and the Senior Managers shall
procure, that (save as otherwise provided or contemplated in this
Agreement or in the Business Plan or in any Annual Plan approved by
each of the Nominated Directors ) the Company (and each of the other
members of the Group) will (to the extent it is within each of their
respective powers to do so):
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*Confidential treatment for various items in this section requested by Xxxxx
Networks N.V.
10
4.1.1 carry on and conduct its business and affairs in a proper and
efficient manner in accordance with all applicable laws and
regulations, for its own benefit and in accordance with the
Business Plan or any Annual Plan approved by each of the
Nominated Directors;
4.1.2 utilise the monies subscribed for new shares pursuant to this
Agreement solely for the purposes of fulfilment of the
Business Plan and Annual Plan;
4.1.3 transact all its business on arm's length terms;
4.1.4 unless otherwise agreed by all the members of the Board,
ensure that its business, other than routine day to day
business, shall be undertaken and transacted by the Board;
4.1.5 unless otherwise agreed by all members of the Board ensure
that there shall be no less than six meetings of the Board
each year of which the Nominated Directors shall receive at
least ten days' prior notice of meetings of the Board
accompanied by an agenda and all relevant board papers;
4.1.6 subject to the Business Plan and the Annual Plan, carry on its
business pursuant to policies laid down from time to time by
the Board;
4.1.7 maintain with a well established and reputable insurer
adequate insurance against all risks usually insured against
by companies carrying on the same or a similar business, in
amounts which the Board considers prudent, and (without
prejudice to the generality of the foregoing) for the full
replacement or reinstatement value of all its assets of an
insurable nature and against damage, injury, third party loss
(including product liability) and loss of profits;
4.1.8 not acquire, dispose, hire, lease, licence or receive licences
of any assets, goods, rights or services otherwise than on the
best terms reasonably obtainable in the circumstances;
4.1.9 keep proper books of account containing true and complete
entries of all its dealings and transactions of and in
relation to its business;
4.1.10 prepare its accounts in accordance with UK GAAP;
4.1.11 not have as an accounting reference period any period other
than a period of 12 calendar months and subject as provided in
Section 223(3) of the Companies Xxx 0000;
4.1.12 to the extent that it is commercially and economically viable
for the Group to do so, if it requires any approval, consent
or licence for the carrying on of its business in the places
and in the manner in which it is for the time being carried on
or proposed to be carried on, obtain and maintain the same in
full force and effect;
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4.1.13 procure that appropriate conditions are inserted into the
contracts of employment of all senior employees and executive
directors of the Group requiring them to devote their full
time and effort wholly and exclusively to the affairs of the
Group and not to make significant investments in, take other
interests in or (save with the written consent of the Board)
accept directorships or other positions of a consultancy or
executive nature with any other person;
4.1.14 effect and maintain directors and officers insurance (which
insurance shall, for the avoidance of doubt, cover the
Nominated Directors) with an insurance company of good repute
and on terms approved by Apax and Amadeus;
4.1.15 effect and maintain Key Man life insurance with an insurance
company of good repute in respect of Xxxxx Xxxxx and Xxxxx
Xxxxx for not less than (pound)1,000,000 each and for not less
than (pound)2,000,000 in respect of Xxxx Xxxxxx and on terms
approved by the Apax and Amadeus; and
4.1.16 endeavour to release Xxxxx from any guarantees given by Xxxxx
in favour of any Group Company.
4.2 Each of the Senior Managers severally undertakes with the Initial
Investors and Xxxxx to use his reasonable endeavours to:
4.2.1 use all reasonable and proper means in his power to maintain,
improve and extend the business of the Group and to further
the reputation and interests of the Group; and
4.2.2 use all their respective powers to procure that any expansion,
development or evolution of any business of the Group will
only be effected through the Company or a wholly-owned
subsidiary of the Company unless any such expansion,
development or evolution consists of joint development
arrangements in the ordinary course of business.
4.3 Each of the Company, the Initial Investors and Xxxxx, shall use their
respective rights and powers to procure that no alteration is made to
any service agreement without the written consent of the relevant
Manager.
5. FINANCIAL INFORMATION
5.1 The Company shall supply the Initial Investors (for such period as they
hold in aggregate at least 2.5% of the issued share capital of the
Company) and Xxxxx (for such period as it holds at least 2.5% of the
issued share capital of the Company) with the following information:
5.1.1 the audited consolidated accounts of the Group for each
financial year as soon as practicable, and at the latest by
three months after the end of that financial year;
5.1.2 no later than one month before the start of each financial
year:
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5.1.2.1 the draft Group operating plan and financial budget
which the Company, having consulted Apax and Xxxxx,
shall adopt as the Annual Plan for that financial
year;
5.1.2.2 the draft budget for allocation of employee share
options for that financial year which the Company,
having consulted Apax and Xxxxx and obtained their
approval (not to be unreasonably withheld or
delayed) shall adopt as the option budget for that
financial year;
5.1.3 monthly and quarterly management accounts, in a form approved
by the Board (having consulted with Xxxxx and Apax),
consisting of a balance sheet, profit and loss account, cash
flow statement, as soon as practicable, and at the latest by
three weeks after the end of each month or quarter (as
appropriate):
5.1.3.1 on a consolidated basis for the Group; and
5.1.3.2 for the Company and each trading subsidiary
undertaking; and
5.1.4 such other financial or management information relating to the
Group as the Initial Investors and Xxxxx may reasonably
request from time to time.
5.2 The Nominated Directors and the Board Observer shall be entitled (in
each case, provided that the respective appointor of such person holds
at least 2.5% of the issued share capital of the Company (or such lower
threshold share percentage as specified in clause 6.5.2)) during the
Company's normal hours of business to inspect and take copies of the
books of account and all other records and documents of the Group on
giving not less than 48 hours' written notice to the secretary (or, if
there is none for the time being, the chairman).
5.3 The Nominated Directors and the Board Observer may pass any information
received from the Company to the Initial Investors and Xxxxx as
appropriate.
5.4 An Initial Investor or Xxxxx may pass any information received from the
Company or the Nominated Directors to any of its investment or
professional advisers and the Initial Investors may include in
quarterly reports to a committee of unit holders, certain abridged
current financial information on the Company and in annual reports to
unit holders, historical audited financial information of the Company.
5.5 The Company shall keep the Initial Investors and Xxxxx fully informed
as to all material developments regarding its financial and business
affairs and shall notify them promptly of:
5.5.1 any event which is not in the public domain and which
materially affects the business of the Group;
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5.5.2 any offer for any business of the Group or for any member of
the Group; and
5.5.3 any significant litigation affecting or likely to affect any
member of the Group.
5.6 Each of the Senior Managers shall make every effort to procure full and
prompt performance by the Company of its obligations under this clause
5.
6. MATTERS REQUIRING CONSENT
6.1 Each of the parties (other than the Company) agrees that the following
acts, unless required by this Agreement or unless already contained
within the Business Plan or in any Annual Plan (provided such Annual
Plan has been approved by the Board), shall not be carried out without
first obtaining the written consent of the Initial Investors and Xxxxx
(such consent not to be unreasonably withheld or delayed) and each
party (other than the Company) shall use his respective rights and
powers as a director or Shareholder to procure so far as he is able
that no such act is carried out unless such consent has been given:
6.1.1 the variation of the authorised or issued share capital of the
Company (other than the redemption or conversion of
Convertible Shares as provided in the Articles) or any
subsidiary undertaking or the creation or the granting of any
option (other than pursuant to the Existing Schemes) or other
right to subscribe for shares or convert into shares in the
capital of the Company or any subsidiary undertaking; the
variation of the rights attaching to shares in the capital of
the Company (other than as provided in the Articles) or any
subsidiary undertaking;
6.1.2 the alteration of the memorandum of association or Articles
(or equivalent documents) of the Company or a subsidiary
undertaking of the Company;
6.1.3 the declaration or distribution of any dividend or other
payment out of the distributable profits of the Company or of
any subsidiary undertaking of the Company, other than a
wholly-owned subsidiary;
6.1.4 the reduction of the Company's share capital, share premium
accounts, capital redemption reserve or any other reserve,
other than as required by the Articles; the reduction of any
uncalled liability in respect of partly paid shares of the
Company;
6.1.5 unless the person concerned has had legal advice in writing
that to honour this commitment would be a breach of his
fiduciary duties to the Company or under the Insolvency Xxx
0000 would or could render him personally liable for having
failed so to act, the taking of steps to wind up or dissolve
the Company or a subsidiary undertaking of the Company;
6.1.6 any material change in the nature of the business of the
Company or any subsidiary undertaking;
14
6.1.7 other than any of the Nominated Directors or otherwise
approved by the Remuneration Committee the fixing of
remuneration of any director or vice-President (or similar
officer) of the Company or of a subsidiary undertaking of the
Company;
6.1.8 the appointment of auditors of the Company or any subsidiary
undertaking, other than the re-appointment of an existing
auditor;
6.1.9 the alteration of the accounting reference date of the Company
or any subsidiary undertaking;
6.1.10 the alteration of the accounting policies of any member of the
Group;
6.1.11 the appointment or termination of employment of any director
of the Company whose basic salary is to be or is in excess
of (pound) 100,000 a year;
6.1.12 the entry into, termination or variation of any contract or
arrangement between (1) the Company or any subsidiary
undertaking and (2) a Manager or a person who in relation to a
Manager is a Connected Person, including the variation of the
remuneration or other benefits under such a contract or
arrangement, and the waiver of any breach of such a contract
or arrangement;
6.1.13 the delegation by the directors of the Company or any
subsidiary undertaking of any of their powers to a committee;
6.1.14 the incurring by the Company or any subsidiary undertaking of
any borrowing or other indebtedness or liability in the nature
of borrowing, other than in the ordinary course of trading in
any such case;
6.1.15 capital expenditure of the Company or any subsidiary
undertaking which is greater than $50,000 or which would cause
capital expenditure of the Group in any financial year to
exceed $150,000 which is not specifically provided for in the
Annual Plan for the relevant financial year;
6.1.16 the entering into by the Company or any subsidiary undertaking
of any lease, licence or similar obligation under which the
rental and all other payments exceed $50,000 a year or which
would make the Group liable for payments exceeding $150,000 a
year under all its leases, licences or similar obligations;
6.1.17 the creation of any mortgage, charge or other encumbrance over
any asset of the Company or any subsidiary undertaking and the
giving of any guarantee by the Company or any subsidiary
undertaking, other than in the ordinary course of trading in
any such case;
6.1.18 the entering into by the Company or any subsidiary undertaking
of any contract or arrangement outside the ordinary course of
trading or otherwise than at arm's length;
15
6.1.19 the incorporation of a new subsidiary undertaking of the
Company or the acquisition by the Company or any subsidiary
undertaking of an interest in any shares in the capital of any
body corporate;
6.1.20 the instigation or settlement of any litigation or arbitration
proceedings by the Company or any subsidiary undertaking when
the amounts claimed exceed $50,000; and
6.1.21 the termination or any variation of the terms of the directors
and officers insurance and Key Man insurance referred to in
clause 4.1.15 of this Agreement or the Facilities Agreement.
6.2 For the purposes of clause 6.1, the written consent of the Initial
Investors in respect of any matter listed in clause 6.1.7 to 6.1.21 may
be given by Apax on behalf of the Initial Investors.
6.3 For the purposes of clause 6.1 the written consent of the Initial
Investors in respect of any matter referable to clause 6.1.6 may be
given by Apax on behalf of the Initial Investors Provided that Amadeus
and Intel shall be notified by Apax of its intention to give any such
consent and, if Amadeus and Intel both notify Apax (within 10 business
days of notice from Apax) that they disagree that consent should be
given, then Apax shall withhold such consent.
6.4 The written consent of Apax (and for this purpose the Amadeus and Intel
shareholdings shall be deemed included in that of Apax) or Xxxxx in
respect of any matter listed in clause 6.1.6 to 6.1.21 shall not be
required if the shareholding of that party falls below 15% percent of
the issued share capital of the Company.
6.5 For the purposes of clause 6.1, the written consent of Apax, Xxxxx,
Intel or Amadeus in respect of any matter listed in clause 6.1.1 to
6.1.5 shall not be required if the shareholding of that party falls
below 2.5% of the issued share capital of the Company;
6.5.1 Provided that the requirement to seek such consent will
transfer to any one transferee of Apax or Xxxxx acquiring in
aggregate more than 25% of the issued share capital of the
Company; and
6.5.2 Provided further that in respect of any matter listed in
clauses 6.1.2 to 6.1.5, in the event of an issue or issues of
further shares or securities convertible into shares, at a
purchase price per share lower than $3.13 per share ("Purchase
Price"), such that the shareholding of the relevant party
falls below 2.5%, the consent threshold for that party shall
fall from 2.5% to its percentage shareholding following such
share issue provided always that the consent threshold shall
always be 1% or greater. The Purchase Price is to be adjusted
proportionally on any consolidation or division of the share
capital or upon any further issue of shares or a dividend of
shares.
6.6 Each of the Initial Investors and Xxxxx shall exercise its consent
rights pursuant to this clause 6 having full regard to the best
interests of the Company.
16
7. MANAGEMENT NON-COMPETE UNDERTAKINGS
7.1 Each of the Senior Managers undertakes with the Company that, except
with the written consent of the Nominated Directors:
7.1.1 that for a period commencing on the date hereof and expiring
on the date twelve months after the Termination Date he will
not whether by himself, through his employees or agents or
otherwise howsoever and whether on his behalf or on behalf of
any person, firm, company or other organisation, directly or
indirectly:
7.1.1.1 in competition with any member of the Group within
the Restricted Area be employed or engaged or
otherwise interested in the business of
manufacturing, designing, distributing, selling,
supplying or otherwise dealing with the Goods or the
Services. For the avoidance of doubt, subject to the
Board's consent (not to be unreasonably withheld)
and subject to the employing entity being informed
of these obligations, after the Termination Date,
the Senior Manager may be permitted to work on
non-competitive activities in businesses which may
have different independent divisions which compete
with the Company but may not work in or with such
competing division;
7.1.1.2 in competition with any member of the Group, solicit
business from or canvas any Customer or Prospective
Customer if such solicitation or canvassing is in
respect of the Goods or the Services;
7.1.1.3 in competition with any member of the Group accept
orders for the Goods or the Services from any
Customer or Prospective Customer;
7.1.1.4 solicit or induce or endeavour to solicit or induce
any person who on the Termination Date was a
director/manager/employee earning in excess of
(pound)30,000 of any member of the Group with whom
the Senior Manager had dealings during the 12 months
preceding the Termination Date to cease working for
or providing services to the Group, whether or not
any such person would thereby commit a breach of
contract;
7.1.1.5 employ or otherwise engage in the business of
manufacturing, distributing, designing, selling,
supplying or otherwise dealing with the Goods or the
Services any person who was during the 12 months
preceding the Termination Date employed or otherwise
engaged by any member of the Group and who by reason
of such employment or engagement is in possession of
any trade secrets or confidential information
relating to the business of any member of the Group
or who has acquired influence over its
17
Customers and Prospective Customers (defined as in
subclauses 7.1.3.3 and 7.1.3.4 but so that
references to the Senior Manager shall be replaced
by references to the relevant employee);
7.1.1.6 interfere or seek to interfere with the continuance
of supplies to any member of the Group (or the terms
of such supplies) from any suppliers who shall have
been supplying components for material or services
to any member of the Group at any time during the
course of his employment by a member of the Group;
7.1.2 while employed by a member of the Group he shall, unless
prevented by illness or specifically permitted by his service
agreement, devote his whole time and attention to the business
of the Group and shall not:
7.1.2.1 be employed or engaged as consultant without the
consent of the Board in any other business; or
7.1.2.2 be concerned or interested in any business competing
with that carried on by a member of the Group or the
business of a supplier or customer of a member of
the Group provided that a Senior Manager may be
interested in securities which are for the time
being quoted on a recognised investment exchange (as
defined by Section 285 (1) Financial Services Act
2000) or which are dealt on the Alternative
Investment Market of the London Stock Exchange if
the Senior Manager's interest in the securities does
not exceed 5% of the total amount of the securities
in issue;
7.1.3 for the purposes of this clause 7.1 the following words shall
have the following meanings:
7.1.3.1 "GOODS" shall mean any product that materially
performs the same function as any goods
manufactured, designed, distributed or sold by any
member of the Group with which the duties of the
Senior Manager were concerned or for which he was
responsible during the one year immediately
preceding the Termination Date and, for the
avoidance of doubt, including Bluetooth or 802.11
wireless LAN or PAN networking solutions or directly
competing technology;
7.1.3.2 "SERVICES" shall mean any services (including but
not limited to technical and product support,
technical advice and customer services) directly
relating to the Goods supplied by any member of the
Group with which the duties of the Senior Manager
were concerned or for which he was responsible and
for the avoidance of doubt, including, Bluetooth or
802.11 wireless LAN or PAN networking solutions or
directly competing technology;
18
7.1.3.3 "CUSTOMER" shall mean any person, firm, company, or
other organisation whatsoever to whom or which any
member of the Group distributed, sold or supplied
Goods or Services during the one year immediately
preceding the Termination Date and with whom or
which during such period, the Senior Manager had
personal dealings in the course of his employment
(or consultancy, as appropriate) or with whom any
employee who was under the direct supervision of the
Senior Manager had personal dealings in the course
of his employment (or consultancy, as appropriate).
7.1.3.4 "PROSPECTIVE CUSTOMER" shall mean any person, firm,
company or other organisation whatsoever with whom
or which any member of the Group had negotiations or
material discussions regarding the distribution,
sale or supply of Goods or Services during the
twelve months immediately preceding the Termination
Date and with whom, during such a period, the Senior
Manager had personal dealings in the course of his
employment or with whom any employee who was under
the direct supervision of the Senior Manager had
personal dealings in the course of their employment;
7.1.3.5 "RESTRICTED AREA" shall mean
7.1.3.5.1 United Kingdom, the European Union, the
United States, Canada and Japan; and
7.1.3.5.2 any other country in the world where, on
the Termination Date, any member of the
Group was engaged in the manufacture,
distribution, design, sale or supply or
otherwise dealt with Goods or Services.
7.1.3.6 "TERMINATION DATE" shall mean the date of
termination of employment within the Group.
7.2 Each Senior Manager (having taken independent legal advice) agrees with
the Initial Investors that the above non-compete undertakings are
reasonable and necessary for the protection of the legitimate interests
of the Initial Investors.
7.3 While the above undertakings are considered to be reasonable it is
agreed that if any such undertakings shall be adjudged to go beyond
what is reasonable for the protection of the interests of the Company
but would be reasonable if part or parts were deleted or modified, the
relevant undertaking or undertakings shall apply with such deletion
and/or modification as may be necessary to make it or them valid and
effective.
7.4 Should a Senior Manager's employment with the Company or any Group
Company be terminated at any time "without cause" (which shall include
paragraphs (i) to (v) of clause 2.3.2 only):
19
7.4.1 the Company agrees that, at the election of the Company,
clause 7.1 will remain enforceable provided that the Company
shall continue to pay the Senior Manager the salary (excluding
any bonus) and medical benefits the Senior Manager was
entitled to receive under the Senior Manager's service
agreement at that time for the period of restriction imposed
under clause 7 or the Senior Manager becoming employed or
self-employed (whichever is the shorter period);
7.4.2 the Company agrees that, if it (or any member of the Group who
is employing the Senior Manager at the relevant Termination
Date) requires the Senior Manager not to perform any of the
Senior Manager's duties and/or excludes the Senior Manager
from the premises of the Company for some or all of the Senior
Manager's notice period ("GARDEN LEAVE"), the period of
restriction set out in clause 7.1 above shall be reduced by
the length of Garden Leave served prior to the Termination
Date.
8. XXXXX NON-COMPETE UNDERTAKINGS
8.1 Xxxxx undertakes with the Company that, except with the written consent
of the Board (excluding the Xxxxx Directors):
8.1.1 that for a period commencing on the date hereof and expiring
on the date twelve months after the Termination Date it will
not whether by itself, through its employees or agents or
otherwise howsoever and whether on its behalf or on behalf of
any person, firm, company or other organisation, directly or
indirectly:
8.1.1.1 in competition with any member of the Group within
the Restricted Area be engaged or otherwise
interested in the business of manufacturing,
designing, distributing, selling, supplying or
otherwise dealing with Goods;
8.1.1.2 in competition with any member of the Group, solicit
business from or canvas any Customer or Prospective
Customer if such solicitation or canvassing is in
respect of Goods;
8.1.1.3 in competition with any member of the Group accept
orders for Goods from any Customer or Prospective
Customer;
8.1.1.4 solicit or induce or endeavour to solicit or induce
any person who on the Termination Date was a
director/manager of any member of the Group to cease
working for or providing services to the Group,
whether or not any such person would thereby commit
a breach of contract;
8.1.1.5 employ or otherwise engage in the business of
manufacturing, distributing, designing, selling,
supplying or otherwise dealing with Goods any person
who was during
20
the 12 months preceding the Termination Date
employed or otherwise engaged by any member of the
Group and who by reason of such employment or
engagement is in possession of any trade secrets or
confidential information relating to the business of
any member of the Group or who has acquired
influence over its Customers and Prospective
Customers;
8.1.1.6 interfere or seek to interfere with the continuance
of supplies to any member of the Group (or the terms
of such supplies) from any suppliers who shall have
been supplying components for material or services
to any member of the Group;
8.1.2 for the purposes of clauses 8.1 to 8.7 the following words
shall have the following meanings:
8.1.2.1 "GOODS" shall mean Bluetooth or 802.11 wireless LAN
or PAN networking solutions or directly competing
technology;
8.1.2.2 "SERVICES" shall mean the provision of managed
services relating to Bluetooth or 802.11 wireless
LAN or PAN networking solutions or directly
competing technology;
8.1.2.3 "CUSTOMER" shall mean any person, firm, company, or
other organisation whatsoever to whom or which any
member of the Group distributed, sold or supplied
Goods during the one year immediately preceding the
Termination Date;
8.1.2.4 "PROSPECTIVE CUSTOMER" shall mean any person, firm,
company or other organisation whatsoever with whom
or which any member of the Group had negotiations or
discussions regarding the possible distribution,
sale or supply of Goods during the twelve months
immediately preceding the Termination Date;
8.1.2.5 "RESTRICTED AREA" shall mean
8.1.2.5.1 United Kingdom, the European Union, the
United States, Canada and Japan; and
8.1.2.5.2 any other country in the world where, on
the Termination Date, any member of the
Group was engaged in the manufacture,
distribution, design, sale or supply or
otherwise dealt with Goods;
8.1.2.6 "TERMINATION DATE" shall mean the date that Xxxxx
ceases to hold 20% or more of the issued share
capital of the Company.
21
8.2 Xxxxx (having taken independent legal advice) agrees with the Company
that the above non-compete undertakings are reasonable and necessary
for the protection of the legitimate interests of the Initial
Investors.
8.3 While the above undertakings are considered to be reasonable it is
agreed that if any such undertakings shall be adjudged to go beyond
what is reasonable for the protection of the interests of the Company
but would be reasonable if part or parts were deleted or modified, the
relevant undertaking or undertakings shall apply with such deletion
and/or modification as may be necessary to make it or them valid and
effective.
8.4 Xxxxx shall procure that each group company of Xxxxx complies with this
clause 8.
8.5 Nothing contained in clause 8.1 shall preclude or restrict Xxxxx or a
group company of Xxxxx acquiring another company, group of companies,
business or undertaking (the "ACQUIRED UNDERTAKING") whose business or
businesses include(s) any of the businesses which would, following such
acquisition, be subject to the restrictions set out in clause 8.1 (the
"RELEVANT BUSINESS") provided that the annual turnover of the Relevant
Business as shown in the most recently audited annual accounts of the
Acquired Undertaking prior to the date of the acquisition did not
account for more than 5 per cent of the aggregate turnover of the
Acquired Undertaking, as shown by such accounts and Xxxxx shall ensure
that such part of the Relevant Business as is subject to the
restriction set out in clause 8.1 is disposed of within 6 months of
acquisition to a third party or parties.
8.6 In relation to any Board meetings to consider, or action to be taken by
the Company in respect of any breach or suspected breach by Xxxxx of
this clause 8, Xxxxx shall procure that its Nominated Directors shall
not attend such Board meetings (unless requested by the Initial
Investors) and shall not vote thereat and will permit the prosecution
of such matter by the Apax Director and Amadeus Director on behalf of
the Board (or a committee of the Board appointed by them).
8.7 Notwithstanding the provisions of the above non-compete undertakings,
in the event that:
8.7.1 Xxxxx shall during the term of this Agreement supply any
services within the Restricted Area, which compete with any
Services provided by the Company; or
8.7.2 the Company shall during the term of this Agreement supply any
Services within the Restricted Area, which compete with any
services provided by Xxxxx or any member of the Xxxxx group;
the board of Xxxxx shall meet with the Board in order to resolve the
conflict of interests between the respective businesses of the Company
and Xxxxx and the Company and Xxxxx acting in good faith shall use
their respective best endeavours to reach a workable solution to their
mutual benefit.
22
9. NOMINATED DIRECTORS AND NEW DIRECTORS
9.1 Save with the prior written consent of the Initial Investors and Xxxxx,
the number of Directors of the Company shall initially (at the date of
this Agreement) be 7 but shall be no greater than 9. The parties shall
use reasonable endeavours to agree on the appointment of a new
independent non-executive chairman within three months of 12th April
2001.
9.2 Subject to the shareholding requirements specified in the Articles each
of the Initial Investors (excluding Intel) and Xxxxx shall be entitled
at any time and from time to time by the delivery of written notice to
the Company to appoint a director of the Company (and in the case of
Xxxxx two directors) and in like manner to remove such person from
office and the Company shall give effect to the provisions of any such
notice. Each of the Initial Investors (so appointing) agrees that it
shall not appoint a Nominated Director (or, if already appointed, as
soon as is reasonably practicable remove a Nominated Director) whose
other directorships include a directorship of a company in direct
competition with the business of the Company (a "COMPETING INTEREST").
In the event of any dispute between the parties concerning whether any
directorship of a proposed Nominated Director (or an existing Nominated
Director) amounts to a competing interest the matter shall be put to a
resolution of the Board. The existing directorships of Xxxxxxx Xxxxxx
and Xxxxxxx Xxxxxx shall not for the purposes of this clause 9.2 be
deemed to amount to a competing interest.
9.3 A Director nominated by an Initial Investor or Xxxxx shall be entitled
to appoint any person to be his alternate director.
9.4 The Company shall not remove or purport to remove the Apax Director,
the Amadeus Director or a Xxxxx Director without the prior approval of
Apax, Amadeus or Xxxxx (as appropriate).
9.5 In addition to the four Nominated Directors the following shall
comprise the Board :
9.5.1 the chief executive officer;
9.5.2 an independent non-executive director approved by the parties;
9.5.3 an independent non-executive chairman appointed pursuant to
clause 9.1;
9.5.4 two further Board members if agreed upon by the parties;
Provided that if an independent non-executive director to be appointed
pursuant to clause 9.5.2 cannot be agreed upon within three months of
12th April 2001 then Apax shall be entitled to make such appointment
but in this event the CEO (Xxxx Xxxxxx) shall be entitled to select the
independent non-executive chairman of the Board. "INDEPENDENT" in this
context shall mean economically independent of the Initial Investors
and Xxxxx and, if the CEO is not satisfied that the Apax appointee is
independent, the CEO may veto such appointment.
23
9.6 Each of the Initial Investors shall be entitled to appoint an observer
to attend Board meetings but not to vote thereat.
9.7 The Company agrees that Apax Partners Europe Managers Ltd and Amadeus
Capital Partners Limited shall, in respect of the provision of the
services of the Apax Director, Amadeus Director and their respective
observers, be paid, in aggregate, a fee at the rate of $50,000 per
annum (plus value added tax) payable quarterly in arrears from 12th
April 2001. Such fee shall be subject to upward review during the month
before and with effect from each anniversary of 12th April 2001, and if
the Company and the Apax Director and Amadeus Director cannot agree a
revised fee the annual fee payable immediately before each anniversary
shall be increased to the annual sum which reflects the increase in the
Retail Prices Index over the previous year. In addition, the Apax
Director, the Amadeus Director and any of their respective observers
shall be reimbursed such reasonable expenses that they may properly
incur in providing their services to the Company.
9.8 The Company agrees that Xxxxx shall, in respect of the provision of the
services of the Xxxxx Directors, be paid, in aggregate, a fee at the
rate of $50,000 per annum (plus value added tax) payable quarterly in
arrears from 12th April 2001. Such fee shall be subject to upward
review during the month before and with effect from each anniversary of
12th April 2001, and if the Company and Xxxxx cannot agree a revised
fee the annual fee payable immediately before each anniversary shall be
increased to the annual sum which reflects the increase in the Retail
Prices Index over the previous year. In addition, the Xxxxx Directors
shall be reimbursed such reasonable expenses that they may properly
incur in providing their services to the Company.
9.9 If a Nominated Director is not appointed from time to time the relevant
Initial Investor and/or Xxxxx shall during such periods be sent notice
of all directors' meetings and the minutes thereof and all other
documents and papers circulated to the Board.
10. INTEL BOARD OBSERVER
10.1 In accordance with clause 9.6 so long as Intel, together with its
subsidiaries holds at least 2.5% in aggregate of the issued share
capital of the Company (or such lower threshold share percentage as
specified in clause 6.5.2), the Company will permit a representative of
Intel (the "OBSERVER") to attend all meetings of the Board and all
committees thereof (whether in person, by telephone or otherwise) in a
non-voting, observer capacity and shall provide to Intel, concurrently
with the members of the Board, and in the same manner, notice of such
meeting and a copy of all materials provided to such members.
10.2 The Company acknowledges that Intel is likely to have, from time to
time, information that may be of interest to the Company
("INFORMATION") regarding a wide variety of matters including, by way
of example only: (1) Intel's technologies, plans and services, and
plans and strategies relating thereto; (2) current and future
investments Intel has made, may make, may consider or may become aware
of with respect to other companies and other technologies, products and
services, including, without limitation, companies that may be
competitive with the Company's; and (3) developments with respect to
the technologies, products and services, and plans and
24
strategies relating thereto, of other companies, including, without
limitation, companies that may be competitive with the Company. The
Company recognises that a portion of such Information may be of
interest to the Company. Such Information may or may not be known by
the Observer. The Company, as a material part of the consideration for
this Agreement, agrees that Intel and its Observer shall have no duty
to disclose any Information to the Company or permit the Company to
participate in any projects or investments based on any Information, or
to otherwise take advantage of any opportunity that may be of interest
to the Company if it were aware of such Information, and hereby waives,
to the extent permitted by law, any claim based on the corporate
opportunity doctrine or otherwise that could limit Intel's ability to
pursue opportunities based on such Information or that would require
Intel or Observer to disclose any such Information to the Company or
offer any opportunity relating thereto to the Company.
11. THE AUDIT COMMITTEE AND THE REMUNERATION COMMITTEE
11.1 The Board of the Company (and, at the request of the Apax Director or a
Xxxxx Director, the board of any other Group Company) shall establish
an audit committee (the "AUDIT COMMITTEE") and a remuneration committee
(the "REMUNERATION COMMITTEE") having the membership and duties set out
in this clause 11.
11.2 The members of the Audit Committee shall be the chairman of the Board,
the Amadeus Director and a Xxxxx Director (or in default appointed by
the Chairman of the Board). At the request of the Audit Committee, the
Company and/or any Group Company shall ensure the attendance of the
Auditors or of any other director or employee of the Company or any
Group Company and shall ensure the disclosure to the committee of any
books and records of the Company or any Group Company or other
information which it may require. The Company or any Group Company
shall upon request provide authorisation to the Audit Committee to seek
directly from the financiers and Auditors or any Group Company such
information as the Audit Committee shall see fit.
11.3 The Audit Committee shall consider, report and make recommendations to
the Board on:
11.3.1 appropriate accounting policies, compliance with accounting
standards and material accounting matters (such as contingent
liabilities);
11.3.2 the adequacy and effectiveness of internal systems of
reporting and control;
11.3.3 the scope of the audit, action required as a result of the
Auditors' findings and conclusion, and the Auditors'
remuneration;
11.3.4 compliance with the policies of the Company or any Group
Company and with external codes of conduct or regulations; and
11.3.5 any other matters which it considers appropriate or otherwise
at the request of the Board.
25
11.4 The members of the Remuneration Committee shall be the chairman of the
Board, the Apax Director and a Xxxxx Director (or in default appointed
by the Chairman of the Board). The chief executive officer shall, upon
the request of the Remuneration Committee, prepare and deliver a report
and recommendations on remuneration.
11.5 The Remuneration Committee, subject to clause 6.1.11, shall be
authorised to determine on behalf of the Board the terms of appointment
or dismissal and the remuneration of both executive and non-executive
directors (including, subject to the provisions of clause 9 the
Nominated Directors).
11.6 The decisions of the Audit Committee and the Remuneration Committee
shall be reached by a majority of its members voting.
12. TRANSFERS AND NEW MEMBERS*
12.1 No Shareholder shall transfer shares (pursuant to one or more
transfers) constituting more than 3% in aggregate of the issued share
capital of the Company to a Trade Investor unless such transfer is a
transfer following the making of an offer for the whole of the issued
share capital of the Company. No Shareholder may transfer shares to a
Strategic Investor. For the purpose of this clause Xxxxx shall not be
deemed a Trade Investor.
12.2 Apax and Amadeus on the one hand and Xxxxx on the other mutually agree
to procure that the provisions of Article 11.15.1 (tag provisions) will
apply as between themselves (and for the avoidance of doubt not to a
sale by any other Shareholder) in respect of any offer not amounting to
an offer for a controlling interest (as defined in such Article) in
respect of the number of shares sought to be purchased by the purchaser
pro rata to their respective holdings of shares in the Company
("TAG-RIGHTS") Provided that:
12.2.1 XXX;
12.2.2 XXX; and
12.2.3 XXX
12.3 It is the parties intention that Strategic Investors will waive all or
part of their rights of pre-emption (whether arising under this
Agreement, the Articles or otherwise) on the issue of any new shares or
on the transfer of shares.
12.4 Notwithstanding the provisions of this clause 12, the Initial Investors
may transfer up to 25% of each of their shares in the Company to any
non-Trade Investor provided always that such transfer takes place by
the end of January 2002 and provided always that such transferee is
acceptable to the Company (such acceptance not to be unreasonably
withheld or delayed). For the avoidance of doubt, any of Kreditanstalt
fur Wiederaufbau or other Apax related funds are deemed acceptable
transferees. The Shareholders (to include any successors in title)
shall and hereby waive any rights of pre-emption (whether arising under
this Agreement, the Articles, or
----------
*Confidential treatment for various items in this section requested by Xxxxx
Networks N.V.
26
otherwise) on any transfer of shares by Apax pursuant to this clause
12.4. The parties are aware that the financing of AP V-C GmbH & Co KG
is provided by the Risk Capital program of the Kredittanstalt fur
Wiederaufbau.
12.5 Notwithstanding any provision of this Agreement (as between the parties
apart from the Company) or the Articles to the contrary, no shares
shall be issued or transferred to a person who is not already a party
to this Agreement, unless that person has already executed a Deed of
Adherence by which he is treated as a Senior Manager or an Investor (or
Initial Investor in the event of transfer by Apax or Amadeus pursuant
to clause 12.4 to a related fund) or a Strategic Investor (as the case
may be) or unless that person is an employee of the Group (but not a
Senior Manager) purchasing shares pursuant to the Existing Schemes (or
any future employee share scheme of the Company) or pursuant to clause
18 of the April Investment Agreement.
12.6 All executed Deeds of Adherence shall be delivered to and held by the
Company.
13. XXXXX SECURITISATION*
13.1 Notwithstanding Article 11.7.2 the parties agree that Xxxxx shall be
entitled to secure up to XXX of its shares ("SECURITISED SHARES")
("SECURITISATION") to a non Trade Investor ("COMMERCIAL LENDER"). The
parties agree such concession on the following basis:
13.1.1 The Commercial Lender must be regulated in the UK with the
Financial Services Authority and have as one of its primary
activities the provision of debt financing; for the avoidance
of doubt the Commercial Lender may include the commercial
lending division of a UK clearing bank. It is agreed that the
Commercial Lender may include GE Capital Commercial Finance
notwithstanding that it is a Trade Investor.
13.1.2 The Securitisation shall not provide for a transfer of the
Securitised Shares to the Commercial Lender until there is an
event of default under the terms of the Securitisation between
Xxxxx and the Commercial Lender which also triggers a Transfer
Event pursuant to any of Articles 12.1.1 to 12.1.4
(inclusive) and in respect of which the Transfer Price (as
defined in the Articles) shall be calculated in accordance
with clause 13.1.3.
13.1.3 Before any proposed transfer (or other disposition pursuant to
Article 11.7.2) of the Securitised Shares from Xxxxx to the
Commercial Lender or any other person a Transfer Notice shall
be served pursuant to Article 11.10 or other relevant
provision of the Articles and the Transfer Price shall be the
lower of:
(a) XXX and
(b) XXX.
----------
*Confidential treatment for various items in this section requested by Xxxxx
Networks N.V.
27
13.1.4 The Commercial Lender under the terms of its agreement with
Xxxxx shall not, and shall have no right to, instruct or
advise Xxxxx as to how it exercises its rights and obligations
under this Agreement or otherwise in relation to the Company
and in the event of any such instruction or advice received
from the Commercial Lender in breach of its agreement with
Xxxxx, the Company may resolve (a resolution from which the
Xxxxx Directors shall abstain) that a Transfer Event in
accordance with Article 12.1.5 shall have occurred to which
the provisions of Article 12 shall apply save that the
Transfer Price shall be calculated in accordance with clause
13.1.3 and Article 12.8 shall not apply.
13.1.5 For the avoidance of doubt, if any of the events specified in
Article 12.1 occur in relation to Xxxxx then a Transfer Event
will have occurred in respect of the Securitised Shares on the
basis of the relevant provision of Article 12.1 and the
remaining provisions of Article 12 shall apply save that the
Transfer Price for the Securitised Shares shall be calculated
in accordance with clause 13.1.3 and Article 12.8 shall not
apply.
13.1.6 None of the rights of Xxxxx under this Agreement or the
Articles shall be exerciseable by the Commercial Lender prior
to any transfer of the Securitised Shares to the Commercial
Lender. For the avoidance of doubt, following any lawful
transfer of the Securitised Shares to the Commercial Lender
under this Agreement and the Articles (only ever to happen
after the Securitised Shares have been offered to the
Shareholders pursuant to the rights of pre-emption under the
Articles), the Commercial Lender's rights under this Agreement
and the Articles shall be as an ordinary shareholder only and
no rights granted specifically to Xxxxx under this Agreement
or the Articles (except as per clause 13.3 and 13.4 below)
will transfer to the Commercial Lender including without
limitation any rights pursuant to clause 4 (management of the
Company), clause 6.5.1 (matters requiring consent), clause 9.2
(Nominated Director) and clause 11 (Audit and Remuneration
Committee).
13.2 For the purposes of clause 8.1.2.6 (Restrictive Covenants) Xxxxx shall
be deemed to be the holder of 20% or more of the issued share capital
of the Company for so long as Xxxxx and/or the Commercial Lender hold
or have a beneficial or equitable interest in 20% or more of the issued
share capital of the Company.
13.3 Notwithstanding the foregoing if Xxxxx is no longer entitled to receive
financial information pursuant to clause 5.1 the Commercial Lender
shall be so entitled (provided it holds at least 2.5% of the issued
share capital of the Company) to exercise the rights under clause 5.1
stated to be exerciseable by Xxxxx (excluding the rights exercisable by
the Xxxxx Nominated Director).
13.4 Notwithstanding the foregoing, the Commercial Lender shall have no tag
rights as defined in clause 12.2 in respect of any transfer by Apax
and/or Amadeus but shall have the corresponding obligations of Xxxxx
set out in clause 12.2 subject to the provisions in clause 12.2.1,
12.2.2 and 12.2.3 (such that Xxxxx and the Commercial Lender are
treated as one party).
28
13.5 For the avoidance of doubt clause 16.3 (sale of the Company at less
than $XXX per share) shall not apply if Xxxxx is no longer a
shareholder.
14. MANAGEMENT AND EMPLOYEE SHARES*
14.1 The Board will consider the establishment of an employee benefit trust
empowered to buy shares from employees leaving the Group and for sale
to new recruits.
14.2 Exercise of options granted and to be granted under the Existing
Schemes will be conditional on the option holder discharging all
National Insurance liability of the Company.
14.3 It is intended that the Company shall have a pool of XXX share options
available to grant employees (this figure to include share options
already granted).
14.4 Xxxxx hereby agrees to fully indemnify the Company against any National
Insurance liability the Company may incur in respect of the Xxxxx
Networks NV 1993 Stock Plan and/or the Xxxxx Networks NV 1993 Employee
Stock Purchase Plan.
15. INVESTOR'S CONSENT
15.1 Where this Agreement provides that any particular transaction or matter
requires the consent, approval or agreement of the Investors or Xxxxx
such consent, approval or agreement must be given in writing and may be
given subject to such terms and conditions as the Investors or Xxxxx
may impose and any breach of such terms and conditions by any person
subject thereto shall ipso facto be deemed to be a breach of the terms
of this Agreement.
15.2 If the consent, approval or agreement of an Investor or Xxxxx is
required under more than one provision of this Agreement for any one
transaction or matter then any consent, approval or agreement given in
relation to that transaction or matter by the Investor or Xxxxx shall
be deemed to cover all consents, approvals or agreements required for
that transaction or matter unless otherwise specified by the relevant
Investor or Xxxxx.
16. SALE OR LISTING*
16.1 It is the parties' mutual objective to achieve a Listing of the
Company.
16.2 In the event of the right of Shareholders to sell shares on a Listing
then in relation to the first XXX shares (subject to adjustment upward
and downward - to reflect any subdivision, consolidation or other
capital reorganisation in relation to the Ordinary Shares after the
date hereof but excluding any conversion of the Convertible Shares) to
be allocated to Shareholders for sale the Initial Investors (pro rata
to shareholdings) shall have prior rights of sale and any balance
thereafter shall be dealt with pro rata to shareholdings. It is
understood by the Senior Managers that save in exceptional
circumstances IPO underwriters and investors will wish to restrict the
sale of shares by the Managers to whatever level they regard as
reasonable and
----------
*Confidential treatment for various items in this section requested by Xxxxx
Networks N.V.
29
consequently may allow the Managers to sell no more than a nominal
amount of their shareholdings.
16.3 Subject to clause 16.4, if a sale of the entire issued share capital of
the Company is proposed at a price of less than $XXX per share (subject
to adjustment upward and downward - as the case may be - to reflect any
subdivision, consolidation or other capital reorganisation in relation
to the shares after the date hereof) (prior to any conversion of
Convertible Shares) then the decision of whether a sale should proceed
shall be determined by the independent directors (who are not the CEO
or Nominated Directors). The independent directors shall have regard to
the effect of the sale on Xxxxx provided that no special consideration
shall be given to the position of Xxxxx if on such sale it shall
receive a gross consideration at least equal to its Original Basis.
"ORIGINAL BASIS" for this purpose shall mean $XXX but reduced
proportionately by reference to any shares sold (or transferred
pursuant to the Securitisation) by Xxxxx after 12th April 2001.
16.4 In the event that the proposed sale referred to in clause 16.3 is to an
associate of Apax then the decision as to whether the sale should
proceed (on the terms proposed in clause 16.3) shall be determined by
the Board (save for the Apax Director).
16.5 The Company agrees that prior to a Listing on a stock exchange in the
United States, the Company will enter into a Registration Rights
Agreement, subject to Delaware Law and on terms normal for such
agreements, with the Investors such agreement to include the following
terms:
16.5.1 XXX;
16.5.2 XXX;
16.5.3 XXX;
16.5.4 XXX.
17. DURATION OF OBLIGATIONS
17.1 On a Listing the provisions of this Agreement shall cease to have
effect except that the parties' accrued rights and obligations shall
not be affected.
17.2 When Xxxxx, a Senior Manager or an Investor ceases to hold shares
Xxxxx, the Senior Manager or the Investor (as the case may be) shall
cease to be party to this Agreement except that any accrued rights and
obligations shall not be affected.
18. ENFORCEMENT OF THE COMPANY'S RIGHTS
If it appears that any Senior Manager or any associate of a Senior
Manager (in whatever capacity) is in breach of any obligation which he
owes to any company in the Group (whether under this Agreement or
otherwise), then the conduct of the right of action of such company in
respect thereof shall be passed to the Nominated Directors (or to a
committee of the Board selected by them) who shall have full authority
to negotiate, litigate and settle any claim arising and the Senior
Managers
30
and the Company shall take all reasonable steps within their power to
give effect to the provisions of this clause 18.
19. COMPANY CONFIDENTIAL INFORMATION
19.1 Each of the Shareholders undertakes to each of the other Shareholders
and the Company that he will not any time hereafter use or divulge or
communicate to any person other than officers or employees of the
Company whose province it is to know the same or on the instructions of
the Board any Confidential Information which may come to his knowledge
and he shall use all reasonable endeavours to prevent the publication
or disclosure of any Confidential Information and these obligations
shall continue to apply after that Shareholder shall cease to be a
party to this Agreement or otherwise involved in the affairs of the
Company without limit in point of time but shall cease to apply to
information which shall come into the public domain other than by a
breach of this clause or which for any other reason, other than through
the default of that Shareholder, shall have ceased to be confidential.
19.2 The Investors and Xxxxx shall not without the prior approval of the
Board disclose Confidential Information to any third party. For the
avoidance of doubt, and subject to the provisions of this clause 19, no
such consent shall be required for the making of any announcement or
communication relating to this Agreement or the Group by an Investor or
Xxxxx solely to its investment bankers, accountants, legal counsel,
employees and lenders (and in the case of the Initial Investors to
their investment partners), in each case only where such persons or
entities are, in turn under appropriate non-disclosure obligations.
19.3 Each Shareholder may disclose information about the Company or this
Agreement as required by:
19.3.1 the London Stock Exchange or other recognised investment
exchange;
19.3.2 any regulatory authority to which the relevant Shareholder is
subject; or
19.3.3 law.
19.4 This clause 19 shall not apply in respect of any Shareholder to the
extent that such Shareholder has in place from time to time a separate
valid non-disclosure agreement with the Company.
20. GENERAL PROVISIONS
20.1 A variation of this Agreement is valid only if it is in writing and
signed by or on behalf of each party.
20.2 The failure to exercise or delay in exercising a right or remedy
provided by this Agreement or by law does not constitute a waiver of
the right or remedy or a waiver of other rights or remedies. No single
or partial exercise of a right or remedy provided by this Agreement or
by law prevents further exercise of the right or remedy or the exercise
of another right or remedy.
31
20.3 The parties rights and remedies contained in this Agreement are
cumulative and not exclusive of rights or remedies provided by law.
20.4 Nothing contained in this Agreement is to be construed as creating a
partnership between any of the parties.
20.5 If there is any conflict or inconsistency between the provisions of
this Agreement and the Articles, this Agreement prevails.
20.6 The invalidity, illegality or unenforceability of any provision of this
Agreement does not affect the continuation in force of the remainder of
this Agreement.
20.7 This Agreement shall be binding upon and shall enure for the benefit of
the successors and assigns and personal representatives (as the case
may be) of each of the parties hereto.
20.8 Save as otherwise herein expressly provided neither the Company nor
Xxxxx nor any of the Senior Managers, nor the Initial Investors shall
be entitled to assign or otherwise transfer any of its or his rights
and obligations under this Agreement (save where this is to a permitted
transferee in accordance with Article 11.9 of the Articles) without the
prior written consent of non-assigning parties.
20.9 The parties hereto shall, and shall use their respective reasonable
endeavours to procure that any necessary third parties shall, do and
execute and perform all such further deeds, documents, assurances, acts
and things as any of the parties hereto may reasonably require by
notice in writing to the others to carry the provisions of this
Agreement and the Articles into full force and effect.
20.10 This Agreement may be executed in any number of counterparts, each of
which when executed and delivered is an original, but all the
counterparts together constitute the same document.
21. APRIL INVESTMENT AGREEMENT
This Agreement shall supersede all (if any) previous agreements and
understandings between the parties in respect of the matters set out in
this Agreement and (together with the Articles and the other agreements
and documents referred to in this Agreement) represents the entire
agreement between the parties hereto in relation to all matters the
subject matter hereof. In this connection those parties hereto who are
also parties to the April Investment Agreement hereby agree, in
consideration of the parties entering into this Agreement, that the
following clauses of the April Investment Agreement shall cease to have
effect from the date hereof, save in respect of any prior breach; the
relevant clauses are clauses 2, 5, 6, 10, 11, 13, 14, 15, 16, 17, 18,
19 (inclusive).
22. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
A person who is not a party to this Agreement may not enforce any term
of this Agreement. The parties agree that the Contracts (Rights of
Third Parties) Act 1999 shall not apply to this Agreement or to any
agreement or document entered into pursuant to this Agreement.
32
23. NOTICES
23.1 All notices and other communications made pursuant to this Agreement
shall be in writing and shall be conclusively deemed to have been duly
given:
23.1.1 in the case of hand delivery to the address shown below, on
the next Business Day after delivery;
23.1.2 in the case of delivery by an internationally recognised
overnight courier to the address set forth below, freight
prepaid, on the next Business Day after delivery;
23.1.3 in the case of a notice sent by facsimile transmission to the
number, and addressed as, set forth below, on the next
Business Day after delivery, if facsimile transmission
confirmed;
23.1.4 in the case of a notice sent by email to the email address set
forth below, on the date of written acknowledgment of receipt
of such email by the recipient.
23.2 In the event that notices are given pursuant to one of the methods
listed in Sub-sections 23.1.1 to 23.1.4 above, a copy of the notice
should also be sent by email.
23.3 Contact details:
23.4 Red M: Xxxxxxxx Xxxxxx Xxxxxxxxxxx
Chichester House
000/000 Xxxx Xxxxxxx
Xxxxxx
XX0X 0XX
Fax + 00 (0) 00 0000 0000 and marked 'Attn: Xxx Xxxxxxxx'
Always with copy to: xxx@xxx.xx.xx
Xxxx Xxxxxx: to the address set out in Schedule 1
Xxxxx Xxxxx: to the address set out in Schedule 1
Xxxxx Xxxxx: to the address set out in Schedule 1
Alison Edge: to the address set out in Schedule 1
Xxxxxx Xxxxxxx: to the address set out in Schedule 1
Red-M Trustee Limited: to the address set out in Schedule 1
Tel: 000 0000 0000
Fax: 000 0000 0000 and marked "Attention: Xxxxxxxx Xxxxxxxx"
Always with a copy to: xxx@xxx.xx.xx
Compass Trustees Limited: to the address set out in Schedule 1
33
Tel: 00000 000000
Fax: 00000 000000 and marked "Attention: Xxx Xxxxx-Xxxxxx"
Always with a copy to: xxxxx@xxxxxxxxxxx.xxx
Xxxxx Networks:
Wexham Springs
Xxxxxxxxx Xxxx
Xxxxxx
Xxxxxx
Xxxxxxxxx
XX0 0XX
Tel: 00000 000000
Fax: 00000 000000 and marked `Attn: Kirstie Hallgate'
Always with a copy to: xxxxxxx.xxxxxxxx@xxxxx.xxx
Apax Funds:
Apax Partners & Co Ventures Limited
00 Xxxxxxxx Xxxxx
Xxxxxx
X0X 0XX
Tel : 000 0000 0000
Fax : 000 0000 0000 and marked `Attn: Xxxx Xxxxxx'
Always with a copy to: xxxxxxx.xxxxxx@xxxx.xx.xx
Amadeus Funds:
Amadeus Capital Partners Limited
0 Xxxxxxxxxx Xxxx
Xxxxxxxxx
XX0 0XX
Tel : 00000 000000
Fax : 00000 000000 and marked 'Attn: Xxxxxx Xxxxxxxxxx'
Always with a copy to: xxxxxxxx@xxxxxxxxxxxxxx.xxx
23.5 Intel: EMEA Portfolio Management
c/o Intel Corporation (UK) Ltd.
Mail-stop iSw 00
Xxxxxx Xxx, Xxxxxxx
Xxxxxxxxx XX0 0XX
Xxxxxx Xxxxxxx
Always with copy to: XXXXxxxxxxxxx@xxxxx.xxx.
23.6 A party may change or supplement the contact details for service of any
notice pursuant to this Agreement, or designate additional addresses,
facsimile numbers and email addresses for the purposes of this clause
23 by giving the other party written notice of the new contact details
in the manner set forth above.
34
24. GOVERNING LAW AND JURISDICTION
24.1 This Agreement shall be governed by and construed in accordance with
English law and the parties hereto irrevocably submit to the
non-exclusive jurisdiction of the English courts.
24.2 The parties agree to negotiate in good faith to resolve any dispute
between them regarding this Agreement. If the negotiations do not
resolve the dispute to the reasonable satisfaction of both parties,
then each party shall nominate one senior officer of the rank of Vice
President or higher as its representative. These representatives shall,
within thirty (30) days of a written request by either party to call
such a meeting, meet in person and alone (except for one assistant for
each party) and shall attempt in good faith to resolve the dispute. If
the disputes cannot be resolved by such senior managers in such
meeting, the parties agree that they shall, if requested in writing by
either party, meet within thirty (30) days after such written
notification for one day with an impartial mediator and consider
dispute resolution alternatives other than litigation. If an
alternative method of dispute resolution is not agreed upon within
thirty (30) days after the one day mediation, either party may begin
litigation proceedings. This procedure shall be a prerequisite before
taking any additional action hereunder.
24.3 The parties shall not be required to institute the procedure set out in
clause 24.2 in the event that such party considers it necessary to
commence immediate court proceedings to protect its intellectual
property and/or confidential information.
EXECUTED the day and year first before written.
35
SCHEDULE 1
(Employee and Trustee Shareholders)
SCHEDULE 2
(Particulars of the Company and Subsidiaries)
THE COMPANY
RED-M (COMMUNICATIONS) LIMITED
Registered Address: Wexham Springs
Xxxxxxxxx Xxxx
Xxxxxx
Xxxxxx, XX0 0XX
Registered Number: 03985301
Country/State of Incorporation: England & Wales
Date: 27th April 2000
Purpose: Manufacturing & Distribution
Shareholder(s): Xxxxx Networks N.V.
Apax (OCS) Nominees Limited
Amadeus II A
Amadeus II B
Amadeus II C
Amadeus II GmbH & Co. K.G.
Amadeus II Affiliates
Xxxxxxx Xxxxxx
Xxxxx Xxxxx
Xxxxx Xxxxx
Alison Edge
Xxxxxx Xxxxxxx
Red-M Trustee Limited
Compass Trustees Limited
Number of Shares Authorised: 50,000,000
Par Value Per Share: US$1.00
Number of Shares Issued: 17,190,014
Issued Share Capital: US$17,190,014
Additional Capital: US$8,753,500 (injected 24/11/00)
Directors: Xxxx Xxxxxx
Xxxxxxxxxxx Xxxxxxx
Kirstie Hallgate
Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxx
Officers: Xxxxxxxxx Xxxxxxx - Secretary
36
Auditors: Ernst & Young
Accounting Reference Date: 31st December
Charges: None registered
SUBSIDIARY 1
RED-M INC
Registered Address: 0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
XXX
Principal Office: 0 Xxxxx Xxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Country/State of Incorporation: Delaware
Date: 11th May 2000
Purpose: Manufacturing & Distribution
Shareholder(s): Red-M (Communications) Limited
(100%)
Number of Shares Authorised: 1,000
Par Value Per Share: US$0.01
Number of Shares Issued: 100
Issued Share Capital: US$1.00
Additional Capital: US$8,753,500 (injected 24/11/00)
Directors: Xxxxxxx X Xxxxxx
Officers: Xxxxxx Xxxxxxx - Secretary
Auditors: Ernst & Young
Accounting Reference Date: 31st December
Charges: None registered
SUBSIDIARY 2
RED-M TRUSTEE LIMITED
Registered Address: Xxxxxxxxxx Xxxxx
000/000 Xxxx Xxxxxxx
Xxxxxx
XX0X 0XX
37
Registered Number: 04205911
Country/State of Incorporation: England & Wales
Date: 25th April 2001
Purpose: Trust established for the holding
of Employee Shares
Shareholder(s): Red-M (Communications) Limited
Number of Shares Authorised: 100
Par Value Per Share: (pound)1.00
Number of Shares Issued: 1
Issued Share Capital: (pound)1.00
Directors: Xxxxxxx Xxxxxxx Xxxxx Xxxxx
Xxxxxxxx Xxxxx Xxxxxxxx
Officers: Xxxxxxxx Xxxxxx Xxxxxxxxxxx -
Secretary
Auditors: Ernst & Young
Accounting Reference Date: 30th April
Charges: None registered
38
SCHEDULE 3
(Deed of Adherence)
THIS DEED OF ADHERENCE is made on [ ] 200[ ] by [ ] of [ ] (the "COVENANTOR") in
favour of the persons whose names are set out in the schedule to this Deed and
is SUPPLEMENTAL to the Shareholders Agreement dated [ ] 2001 made by (1) Red-M
(Communications) Limited (2) Xxxx Xxxxxx and Others (3) Xxxxx Networks NV (4)
The Apax Funds (5) The Amadeus Funds and (6) Intel Capital Corporation
("INVESTMENT AGREEMENT").
THIS DEED WITNESSETH as follows:
49. The Covenantor confirms that [it] [(s)he] has been given and read a
copy of the Shareholders Agreement and covenants with each person named
in the Schedule to this Deed to perform and be bound by all the terms
of the Shareholders Agreement as if the Covenantor were [an
Investor/Strategic Investor/a Senior Manager or as provided in clause
12.5 an Initial Investor] who is party to the Shareholders Agreement.
50. This Deed is governed by English law.
IN WITNESS WHEREOF this Deed has been executed by the Covenantor and is intended
to be and is hereby delivered on the date first above written.
SCHEDULE
[Parties to Shareholders Agreement including those who have executed earlier
deeds of adherence.]
SIGNED and UNCONDITIONALLY )
DELIVERED as a Deed by [ ] )
in the presence of: )
39
SIGNED for and on behalf of RED-M )/s/ M XXXXXX
(COMMUNICATIONS) LIMITED in the )
presence of: ) /s/ C XXXXXXX
SIGNED by XXXXXXX XXXXXX in the presence of: ) /s/ M XXXXXX
) /s/ C XXXXXXX
SIGNED by XXXXX XXXXX in the presence of: ) /s/ S XXXXX
) /s/ C XXXXXXX
SIGNED by XXXXX XXXXX in the presence of: ) /s/ C MAYNE
) /s/ C XXXXXXX
SIGNED by ALISON EDGE in the presence of: ) /s/ A EDGE
) /s/ C XXXXXXX
SIGNED by XXXXXX XXXXXXX in the presence of: ) /s/ X XXXXXXX
) /s/ C XXXXXXX
SIGNED for and on behalf of RED-M TRUSTEE LIMITED ) /s/ J WATMOUGH
in the presence of: ) /s/ T XXXXXXXX
40
SIGNED for and on behalf of COMPASS TRUSTEES ) /s/ T XXXXX-XXXXXX
LIMITED in the presence of: ) WITNESSED
SIGNED for and on behalf of XXXXX NETWORKS NV in ) /s/ R XXXXX
the presence of: ) /s/ R XXXXXXXX
EXECUTED for and on behalf of APAX PARTNERS )
EUROPE MANAGERS LIMITED acting in )
its capacity as manager of )
APAX EUROPE V-A, L.P. by: ) /s/ M XXXXXX
EXECUTED for and on behalf of APAX PARTNERS )
EUROPE MANAGERS LIMITED acting in its capacity as )
manager of APAX EUROPE V-B, L.P. by: ) /s/ M XXXXXX
41
EXECUTED for and on behalf of APAX PARTNERS )
EUROPE MANAGERS LIMITED acting in its capacity as )
manager of APAX EUROPE V-C, GMBH & CO. KG by: ) /s/ M XXXXXX
EXECUTED for and on behalf of APAX PARTNERS )
EUROPE MANAGERS LIMITED acting in its capacity as )
managers of APAX EUROPE V-D, L.P. by: ) /s/ M XXXXXX
EXECUTED for and on behalf of APAX PARTNERS )
EUROPE MANAGERS LIMITED acting in its capacity as )
manager of APAX EUROPE V-E, L.P. by: ) /s/ M XXXXXX
42
EXECUTED for and on behalf of APAX PARTNERS )
EUROPE MANAGERS LIMITED acting in its capacity as )
manager of APAX EUROPE V-F, C.V. by: ) /s/ M XXXXXX
Authorised Signatory
Authorised Signatory
EXECUTED for and on behalf of APAX PARTNERS )
EUROPE MANAGERS LIMITED acting in its capacity as )
manager of APAX EUROPE V-G, C.V. by: ) /s/ M XXXXXX
EXECUTED for and on behalf of AMADEUS CAPITAL )
PARTNERS LIMITED acting in its capacity as )
manager of AMADEUS II A by: ) /s/ H XXXXXX
43
EXECUTED for and on behalf of AMADEUS CAPITAL )
PARTNERS LIMITED acting in its capacity as )
manager of AMADEUS II B by: ) /s/ H XXXXXX
EXECUTED for and on behalf of AMADEUS CAPITAL )
PARTNERS LIMITED acting in its capacity as )
manager of AMADEUS II C by: ) /s/ H XXXXXX
EXECUTED for and on behalf of AMADEUS CAPITAL )
PARTNERS LIMITED acting in its capacity as )
manager of AKG by: ) /s/ H XXXXXX
EXECUTED for and on behalf of AMADEUS CAPITAL )
PARTNERS LIMITED acting in its capacity as )
manager of AII AFFILIATES by: ) /s/ H XXXXXX
44
EXECUTED for and on behalf of INTEL CAPITAL )
CORPORATION by: )
)
By: /s/ G KERSHAW
Name: XXXX XXXXXXX
Title: ASSISTANT TREASURER
45
