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Delaware
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001-32887
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11-3547680
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(State or Other Jurisdiction
of Incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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23 Main Street, Holmdel, NJ
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07733
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(Address of Principal Executive Offices)
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(Zip Code)
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o
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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(d)
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Exhibits
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Exhibit No.
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Exhibit
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2.1
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10.1
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10.2
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10.3
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VONAGE HOLDINGS CORP.
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Date:
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September 20, 2018
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By:
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/s/ Randy K. Rutherford
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Randy K. Rutherford
Chief Legal Officer
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Page
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Part 1
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LETTER FROM THE CHAIRMAN OF NEWVOICEMEDIA
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3
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Part 2
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LETTER FROM THE CHIEF EXECUTIVE OFFICER OF VONAGE
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8
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Part 3
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CONDITIONS AND FURTHER TERMS OF THE OFFER
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18
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Part 4
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DOCUMENTS AVAILABLE FOR INSPECTION
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30
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Part 5
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DEFINITIONS
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31
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1.
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Introduction
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2.
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Summary of terms of the Offer
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2.1
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Consideration
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for each:
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B Ordinary Share or Restricted Share
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US$1.00344 in cash
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for each:
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A Preferred Share
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US$1.31694 in cash
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B Preferred Share
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US$1.31308 in cash
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C Preferred Share
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US$1.33920 in cash
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C (Tranche 1) Ordinary Share
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US$1.31287 in cash
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C (Tranche 2) Ordinary Share
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US$1.37250 in cash
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D Preferred Share
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US$1.77255 in cash
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E Preferred Share
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US$2.17867 in cash
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F Preferred Share
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US$2.52470 in cash
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3.
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Irrevocable undertakings
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4.
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NewVoiceMedia Options
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5.
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NewVoiceMedia Warrants
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6.
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Taxation
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7.
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Drag Along or Squeeze-Out
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8.
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Overseas Shareholders
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9.
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Action to be taken to accept the Offer
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10.
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Recommendation
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Directors:
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Corporate Headquarters
:
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Hamid Akhavan 23 Main Street
Jeffrey Citron Holmdel Naveen Chopra New Jersey 07733 Stephen Fisher United States Carolyn Katz Alan Masarek John Roberts Gary Steel |
23 Main Street
Holmdel
New Jersey 07733
United States
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1.
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Introduction
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2.
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Identity of Vonage, background to and reasons for the Offer
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3.
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Summary terms of the Offer
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3.1
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Consideration
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for each:
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B Ordinary Share or Restricted Share
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US$1.00344 in cash
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for each:
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A Preferred Share
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US$1.31694 in cash
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B Preferred Share
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US$1.31308 in cash
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C Preferred Share
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US$1.33920 in cash
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C (Tranche 1) Ordinary Share
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US$1.31287 in cash
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C (Tranche 2) Ordinary Share
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US$1.37250 in cash
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D Preferred Share
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US$1.77255 in cash
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E Preferred Share
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US$2.17867 in cash
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F Preferred Share
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US$2.52470 in cash
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3.2
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Effect of the Offer
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3.3
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Conditions to and further terms of the Offer
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(A)
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the First Closing Date, if, at such time, Vonage has received valid acceptances under the Offer in respect of (or has otherwise acquired) all the NewVoiceMedia Shares, but in any event on the First Closing Date, the NewVoiceMedia Shares which are the subject of valid acceptances of the Offer at such date will be (or will be deemed) sold; and
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(B)
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the Drag Closing Date, if the Drag Along Provisions are exercised (as set out in paragraph 3.4 below) prior to the First Closing Date, but only in respect of the NewVoiceMedia Shares which are sold pursuant to the Drag Along Provisions, and such NewVoiceMedia Shares will be (or will be deemed) sold on the Drag Closing Date.
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3.4
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Drag Along or Squeeze-Out
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4.
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Warranty Deed
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5.
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Irrevocable undertakings
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6.
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Financing of the Offer
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7.
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NewVoiceMedia Options
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8.
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NewVoiceMedia Warrants
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9.
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Recommendation
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10.
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Taxation
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11.
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Overseas Shareholders
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12.
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Procedure for acceptance of the Offer
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12.1
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General
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12.2
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Procedure for acceptance
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(A)
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To accept the Offer
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(B)
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Return of Form of Acceptance
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(C)
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Share certificate(s) and document(s) of title not readily available or lost
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12.3
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Overseas Shareholders
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12.4
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Validity of acceptances
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13.
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Settlement
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13.1
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Subject to the Offer becoming unconditional in all respects (and, in the case of NewVoiceMedia Shareholders who are citizens, nationals or residents of jurisdictions outside the United Kingdom or who are in a Restricted Jurisdiction, except as provided in paragraph 4 of Section B
of Part 3 of this Offer Document), settlement of the consideration to which each NewVoiceMedia Shareholder is entitled under the Offer will be effected to validly accepting NewVoiceMedia Shareholders:
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(A)
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in the case of acceptances received, valid and complete in all respects, by the date on which the Offer becomes wholly unconditional, within 3 Business Days after the First Closing Date; or
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(B)
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in the case of acceptances received, valid and complete in all respects, after such date but while the Offer remains open for acceptance, on a rolling weekly basis commencing with the first settlement set out in paragraph 13.1(A) of this Part 2,
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13.2
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For NewVoiceMedia Shareholders who do not validly accept the Offer (or for whom the Offer is deemed accepted pursuant to the terms of this Offer Document) and whose NewVoiceMedia Shares are transferred to Vonage pursuant to:
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(A)
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the Drag Along Provisions, their consideration shall be received by NewVoiceMedia on the applicable NewVoiceMedia Shareholder’s behalf and NewVoiceMedia shall pay such amounts into a separate bank account (which is not required to earn or pay interest) to be held on trust for such NewVoiceMedia Shareholder pending receipt from such NewVoiceMedia Shareholder of a valid address to send such consideration, which shall then be settled within 10 Business Days of receipt of such details by cheque (despatched by first class post) but in any event not into a Restricted Jurisdiction. All cash payments to be made by cheque will be made in US$ by cheque drawn on a branch of a UK clearing bank; or
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(B)
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the Squeeze-Out Provisions, their consideration shall be received and dealt with under the Squeeze-Out Provisions.
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13.3
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If the Offer does not become unconditional in all respects by the Lapse Date and lapses, completed Forms of Acceptance, share certificate(s) and/or other document(s) of title will be returned by post, within 14 days of the Offer lapsing, at the risk of the NewVoiceMedia Shareholder concerned, to the person or agent whose name and address are set out in Box 2 or 4 of the Form of Acceptance, or, if none is set out, to the first named holder at his or her registered address (in all cases outside a Restricted Jurisdiction).
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13.4
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All documents and remittances sent by, to or from NewVoiceMedia Shareholders or their appointed agents will be sent at their own risk.
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14.
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Further information
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15.
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Action to be taken
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1.
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valid acceptances of the Offer being received in respect of the Threshold (including at least two of the Investors);
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2.
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the expiration or termination of the waiting period (and any extension thereof) applicable to the consummation of the Offer under the HSR Act;
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3.
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no Governmental Entity shall have enacted, issued, promulgated, enforced or entered into any laws or Orders, whether temporary, preliminary, or permanent, that make illegal, enjoin, or otherwise prohibit consummation of the Offer; and
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4.
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the Management Warranties set forth in paragraphs 2.1.1, 2.1.4, 2.2.1, 2.2.2, 2.2.3, 2.2.5, 2.3.1, 2.3.2, 2.3.6, 2.3.8 and 2.3.9 of Schedule 1 (Organization, Shares and Subsidiaries) of the Management Warranty Deed shall be true and correct (other than de minimis inaccuracies) when made and as of immediately prior to the consummation of the Offer, as if made at and as of the First Closing Date (except those representations and warranties that address matters only as of a particular date, which shall be true and correct in all material respects as of that date).
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(a)
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“
Offer
” means the Offer and any revision, variation, renewal or extension of the Offer in accordance with the terms of this Offer Document;
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(b)
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“
acceptances of the Offer
” includes deemed acceptances of the Offer;
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(c)
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the Offer being, or becoming “
unconditional
” means all the Conditions being satisfied or (if permissible) waived prior to the Lapse Date;
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(d)
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any statute or any statutory provision includes a statute or statutory provision which amends, consolidates or replaces the same (whether before or after the date of this Offer Document);
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(e)
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“
Acceptance Shares
” means NewVoiceMedia Shares in respect of which the Offer has been accepted;
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(f)
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“
Exchange Act
” mean the US Securities Exchange Act of 1934, as amended, and the regulations promulgated thereunder;
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(g)
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“
Offer Document
” means this Offer Document and any other document containing, or containing details of, the Offer; and
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(h)
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“
Offer Period
” means the period of time during which the offer remains open for acceptances, which pursuant to Rule 14(e)-1 of the Exchange Act, shall be no less than 20 Business Days.
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1.
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Acceptance period
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1.1
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The Offer is made on 20 September 2018 and is capable of acceptance from and after that time.
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1.2
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Subject to paragraph 1.3 below, the Offer will remain open for acceptances until 3.00 p.m. London time on the later of:
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(A)
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the First Closing Date, if, at such time, Vonage has received valid acceptances under the Offer in respect of (or has otherwise acquired) all the NewVoiceMedia Shares, but in any event on the First Closing Date, the NewVoiceMedia Shares which are the subject of valid acceptances of the Offer at such date will be (or will be deemed) sold; and
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(B)
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the Drag Closing Date, if the Drag Along Provisions are exercised prior to the First Closing Date, but only in respect of the NewVoiceMedia Shares which are sold pursuant to the Drag Along Provisions, and such NewVoiceMedia Shares will be (or will be deemed) sold on the Drag Closing Date.
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1.3
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If Vonage provides notice to the Company on or prior to the later of the First Closing Date and the Drag Closing Date that it anticipates utilizing the Squeeze-Out Provisions, the Offer will remain open until further notice (but in any event shall lapse on the Lapse Date).
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1.4
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Under the Exchange Act, Vonage may also be required to extend the Offer Period in the event it changes the Offer in any material respect, in any event as permitted under paragraph 3.19 below.
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1.5
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The Offer is irrevocable, save that the Offer will automatically lapse if all of the Conditions relating to the Offer have not been fulfilled or (if permissible) waived by the Lapse Date, and in such a case the Offer shall cease to be capable of further acceptance, and Vonage and NewVoiceMedia Shareholders and holders of NewVoiceMedia Options who have conditionally elected to exercise their NewVoiceMedia Options shall thereupon cease to be bound by prior acceptances.
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2.
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Adjustment to the Consideration
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2.1
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It is a term of the Offer that each NewVoiceMedia Shareholder severally undertakes, in the Form of Acceptance, to pay to Vonage on demand, on a dollar for dollar basis an amount equal to the Leakage (other than Permitted Leakage) received or benefitting (or deemed to be received by or benefitting) such NewVoiceMedia Shareholder or such NewVoiceMedia Shareholder’s Affiliates. Subject to paragraph 2.2 below, if any Leakage (other than Permitted Leakage): (i) is received by or benefits, or is deemed to be received by or benefit, more than one NewVoiceMedia Shareholder or NewVoiceMedia Shareholder Affiliate; or (ii) has no identifiable recipient or beneficiary that is a NewVoiceMedia Shareholder or a NewVoiceMedia Shareholder Affiliate, each relevant NewVoiceMedia Shareholder shall be deemed to have received or benefitted from the proportion of Leakage as is equal to the proportion that the price paid for the Shares held by them pursuant to the Offer bears to the aggregate amount of the price paid pursuant to the Offer for the Shares held by all NewVoiceMedia Shareholders who have, or who are deemed to have, benefitted from the Leakage in question (which in the case of (ii) shall be all NewVoiceMedia Shareholders who have accepted the Offer).
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2.2
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Where any Leakage constitutes Tax under limb (j) of the definition of Leakage, such Leakage shall be deemed to be received by, or benefit, the relevant NewVoiceMedia Shareholder or NewVoiceMedia Shareholder Affiliate (as applicable) who received or benefitted from (or is deemed to have received or benefitted from) the Leakage giving rise to such Tax.
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2.3
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No NewVoiceMedia Shareholder shall have any liability under this paragraph 2 of this Section B of this Part 3 unless
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(A)
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a claim has been notified to the relevant NewVoiceMedia Shareholder pursuant to this paragraph 2 of this Section B of this Part 3 on or before the date which is six months from the First Closing Date; and
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(B)
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proceedings have been brought against the relevant NewVoiceMedia Shareholder in respect of its recovery within six months of its being notified in accordance with paragraph 2.3(A) above, unless the relevant claim has been agreed in writing by that NewVoiceMedia Shareholder.
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3.
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General
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3.1
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The instructions, terms, provisions and authorities contained in or deemed to be incorporated in the Form of Acceptance form part of the terms of the Offer. Words and
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3.2
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Any omission or failure to (or decision not to) despatch this Offer Document, the Form of Acceptance or any document required to be given under the terms of the Offer and/or any notice required to be despatched under the terms of the Offer to, or any failure to receive the same by, any person to whom the Offer is made, or should be made, shall not invalidate the Offer in any way or create any implication that the Offer has not been made to any such person. Subject to paragraph 4 of this Section B of this Part 3, the Offer will extend to any persons to whom this Offer Document, the Form of Acceptance or any related documents may not be despatched, and such persons may collect copies of those documents from Osborne Clarke LLP, 2 Temple Back East, Temple Quay, Bristol BS1 6EG.
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3.3
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Vonage reserves the right to notify any matter, including the making of the Offer or the terms thereof, to all or any NewVoiceMedia Shareholder(s) with (a) registered address(es) outside the United Kingdom or whom Vonage knows to be a nominee, trustee or custodian holding NewVoiceMedia Shares for persons who are citizens, residents or nationals of jurisdictions outside the United Kingdom, by announcement in the United Kingdom or by paid advertisement in the London Gazette published and circulated in the United Kingdom, in which event such notice shall be deemed to have been sufficiently given notwithstanding any failure by any NewVoiceMedia Shareholder to receive or see such notice. All references in this Offer Document to notice or the provision of information in writing by or on behalf of Vonage shall be construed accordingly. No such document will be sent to an address in a Restricted Jurisdiction.
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3.4
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If the Offer does not become or is not declared unconditional in all respects on or before the Lapse Date, the Form of Acceptance, share certificate(s) and/or other document(s) of title will be returned by post, within 14 days of the Offer lapsing, at the risk of the NewVoiceMedia Shareholder concerned, to the person or agent whose name and address is set out in Box 2 or 4 of the Form of Acceptance or, if none is set out, to the first-named holder at his/her registered address (in all cases outside a Restricted Jurisdiction).
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3.5
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All powers of attorney, appointments as agents and authorities on the terms conferred by or referred to in this Section B of this Part 3 or in the Form(s) of Acceptance are given by way of security for the performance of the obligations of the NewVoiceMedia Shareholder concerned and are irrevocable (in respect of powers of attorney, in accordance with section 4 of the Powers of Attorney Act 1971).
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3.6
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No acknowledgement of receipt of any Form of Acceptance, share certificate(s) and/or other document(s) of title, communication or notice will be given by or on behalf of Vonage.
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3.7
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All communications, notices, certificates, documents of title and remittances to be delivered by or sent to or from any NewVoiceMedia Shareholder (or their designated agents) will be delivered by or sent to or from them (or their designated agent(s)) at their risk.
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3.8
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In the event Vonage elects to extend the Offer Period or make any material changes with respect to the Offer in any event as permitted under paragraph 3.19 below, including (i) a change in the amount of the consideration, (ii) a change in the percentage of NewVoiceMedia Shares sought or (iii) any commissions related to the Offer, the Offer shall be extended for a period of at least 10 Business Days. Any notice of material changes to the Offer will be made in a form designed to inform all NewVoiceMedia Shareholders under the Exchange Act and applicable regulatory guidance.
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3.9
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Without prejudice to any other provision of this Part 3, Vonage reserves the right to treat any Form of Acceptance as valid if not entirely in order or not accompanied by the relevant share certificate(s) and/or other relevant document(s) of title, or if received, by or on its behalf, at any place or places or in any manner determined by it otherwise than as specified in this Offer Document or in the Form of Acceptance.
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3.10
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If sufficient acceptances are received and/or purchases made, Vonage may apply the provisions of sections 974 to 991 (inclusive) of the Act to acquire compulsorily any outstanding NewVoiceMedia Shares to which the Offer relates (as construed in accordance with sections 974 to 991 (inclusive) of the Act).
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3.11
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Vonage reserves the right to nominate, as the person entitled to acquire all (but not part) of the NewVoiceMedia Shares pursuant to the Offer, such wholly-owned subsidiary of Vonage as Vonage shall in its absolute discretion select for such purpose and following any such nomination references in this document to Vonage shall be construed accordingly, provided that Vonage shall remain liable in the event of any failure by such subsidiary to settle the consideration to which each NewVoiceMedia Shareholder is entitled as set out in paragraph 3.1 of Part 2 of this Offer Document.
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3.12
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All acceptances of the Offer are irrevocable and may not be withdrawn.
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3.13
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If an optionholder exercises his NewVoiceMedia Options or any NewVoiceMedia Warrants are exercised once the Offer has been made (other than by executing and returning a Form of Instruction in respect of the NewVoiceMedia Unapproved Share Option Plan and ticking Choice A of such Form of Instruction), the optionholder or warrantholder (as applicable) will be issued NewVoiceMedia Shares. These shares will be purchased by Vonage, either pursuant to this Offer, by way of a private treaty with such optionholder, under the Drag Along Provisions or the Squeeze-Out Provisions.
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3.14
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The Offer, all acceptances of it and elections under it, this Offer Document and the Form of Acceptance and any action taken or made or deemed to be taken or made under any of the foregoing, shall be governed by and construed in accordance with the laws of England.
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3.15
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Execution by or on behalf of a NewVoiceMedia Shareholder of a Form of Acceptance, constitutes, subject to paragraph 3.16 of this Section B of this Part 3, his or her irrevocable submission, in relation to all matters arising out of the Offer and the Form of Acceptance to the exclusive jurisdiction of the courts of England.
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3.16
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Execution by or on behalf of a NewVoiceMedia Shareholder of a Form of Acceptance constitutes his or her agreement that the provisions of paragraph 3.15 of this Section B of this Part 3 are included for the benefit of Vonage and NewVoiceMedia and his or her agreement that nothing shall limit the right of Vonage or NewVoiceMedia to bring any action, suit or proceeding arising out of or in connection with the Offer in any other manner permitted by law or in any court of competent jurisdiction and that he/she irrevocably submits to the jurisdiction of any such court.
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3.17
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Settlement of the consideration to which any NewVoiceMedia Shareholder is entitled under the Offer will be implemented in full in accordance with the terms of the Offer without regard to any lien, deduction, withholding, right of set-off, counterclaim or other analogous right to which Vonage may otherwise be, or claim to be, entitled as against such NewVoiceMedia Shareholder.
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3.18
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The consideration to be received by all NewVoiceMedia Shareholders will be paid in US$ (and for the purposes of calculating the consideration per share to be paid for any applicable class of NewVoiceMedia Shares in accordance with the NewVoiceMedia Articles, any amounts due to
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3.19
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The terms of the Offer (including, without limitation, the circumstances in which the Offer may be extended) may be revised or amended by Vonage provided that any such revision or amendment:
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(A)
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represents no diminution in the value of the Offer as so revised compared with the consideration or terms previously offered; and
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(B)
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is approved by the NewVoiceMedia Board.
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4.
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Overseas Shareholders
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4.1
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The making of the Offer to Overseas Shareholders may be prohibited or affected by the laws of the relevant jurisdiction. Overseas Shareholders should inform themselves about and observe any applicable legal requirements. It is the responsibility of any Overseas Shareholders wishing to accept the Offer to satisfy themselves as to the full observance of the laws and regulatory requirements of the relevant jurisdiction in connection with the Offer, including the obtaining of any governmental, exchange control or other consents which may be required, the compliance with other necessary formalities and the payment of any issue, transfer or other taxes or duties or payments due in such jurisdiction.
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4.2
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Any Overseas Shareholder will be responsible for any such issue, transfer or other taxes or duties or payments arising in connection with the Offer outside the UK for their NewVoiceMedia Shares, by whomever payable, and Vonage and any person acting on its behalf shall be fully indemnified and held harmless by such shareholder for such taxes, duties or payments as Vonage may be required to pay in respect of the Offer insofar as it relates to such shareholder.
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4.3
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In particular, the Offer is not being and will not be made, directly or indirectly, in, into, or by use of the mails of, or by any means or instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce of, or of any facilities of a national securities exchange of, a Restricted Jurisdiction, and the Offer will not be capable of acceptance by any such use, means, instrumentality or facilities or otherwise from or within a Restricted Jurisdiction, except where Vonage is satisfied that the transaction in question can be undertaken in compliance with applicable law and regulation.
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4.4
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Copies of this Offer Document and the Form of Acceptance and any related documents are not being, and must not be, mailed, transmitted, or otherwise distributed or sent, in whole or in part, in or into or from a Restricted Jurisdiction, including to NewVoiceMedia Shareholders with registered addresses in a Restricted Jurisdiction or to persons whom Vonage knows to be custodians, trustees or nominees holding NewVoiceMedia Shares for such persons. Persons receiving such documents (including, without limitation, custodians, nominees and trustees) must not mail or otherwise distribute or send them in or into or from a Restricted Jurisdiction or use the mails of a Restricted Jurisdiction or any means or instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce of, or any facilities of a national securities exchange of, a Restricted Jurisdiction for any purpose, directly or indirectly, in connection with the Offer, and so doing may invalidate any related purported acceptance of the Offer. Persons wishing to accept the Offer must not use the mails of a Restricted Jurisdiction or any such means, instrumentality or facilities for any purpose, directly or indirectly, relating to acceptance of the Offer. Envelopes containing Forms of Acceptance, evidence of title or other related documents must not be postmarked in, or otherwise despatched from, a Restricted Jurisdiction and all acceptors must provide addresses outside a Restricted Jurisdiction for the
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4.5
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Save as provided in the remainder of this paragraph 4 of this Section B, a NewVoiceMedia Shareholder may be deemed not to have validly accepted the Offer if:
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(A)
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he/she does not make the relevant warranties set out in paragraph 1(C) of Section C of this Part 3; or
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(B)
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he/she completes Box 2 of the Form of Acceptance with an address in, or has a registered address in, a Restricted Jurisdiction and in either case he/she does not insert in Box 4 of the Form of Acceptance the name and address of a person or agent outside the Restricted Jurisdiction to whom he/she wishes the consideration to which he/she is entitled under the Offer to be sent, subject to the provisions of this paragraph 4.5 of this Section B and applicable laws; or
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(C)
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he/she inserts in Box 4 of the Form of Acceptance the name and address and/or telephone number of a person or agent in a Restricted Jurisdiction to whom he/she wishes the consideration to which he/she is entitled under the Offer to be sent; or
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(D)
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the Form of Acceptance received from him/her is in an envelope postmarked in, or otherwise appears to Vonage or its agents to have been sent from, a Restricted Jurisdiction.
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4.6
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If, in connection with the making of the Offer, notwithstanding the restrictions described above, any person (including without limitation, custodians, nominees and trustees), whether pursuant to a contractual or legal obligation or otherwise, forwards this Offer Document, the Form of Acceptance or any related document in, into or from a Restricted Jurisdiction or uses the mails of or any means or instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce of, or any facilities of a national securities exchange of, a Restricted Jurisdiction in connection with such forwarding, such person should:
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(A)
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inform the recipient of such fact;
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(B)
|
explain to the recipient that such action may invalidate any purported acceptance by the recipient; and
|
|
(C)
|
draw the attention of the recipient to this paragraph 4 of this Section B.
|
|
4.7
|
The provisions of this paragraph 4 of this Section B
and any other terms of the Offer relating to Overseas Shareholders may be waived, varied or modified as regards specific NewVoiceMedia Shareholders or on a general basis by Vonage, with the prior written consent of NewVoiceMedia, in writing in its absolute discretion but only if Vonage is satisfied that such waiver, variance or modification will not constitute a breach of the NewVoiceMedia Articles, any applicable securities or other law.
|
|
4.8
|
Neither Vonage nor its advisers nor any person acting on behalf of any of them shall have any liability to any person for any loss or alleged loss arising from any decision as to the treatment of acceptances of the Offer on any of the bases set out above or otherwise in connection therewith.
|
|
4.9
|
The provisions of this paragraph 4 of this Section B supersede any terms of the Offer inconsistent with them.
|
|
4.10
|
References in this paragraph 4 of this Section B to “
a NewVoiceMedia Shareholder
” shall include references to the person or persons executing a Form of Acceptance and, in the event of one or more persons executing a Form of Acceptance, the provisions of this paragraph 4 of this Section B
shall apply to them jointly and to each of them.
|
|
4.11
|
Neither the United States Securities and Exchange Commission nor any US state securities commission has approved or disapproved this Offer or passed upon the fairness or merits of this document or adequacy or completeness of this document or any documentation relating to the Offer. Any representation to the contrary is a criminal offence.
|
|
4.12
|
Overseas Shareholders should inform themselves about and observe any applicable legal or regulatory requirements. If you are in any doubt about your position, you should consult your professional adviser in the relevant jurisdiction.
|
|
1.
|
Each NewVoiceMedia Shareholder by whom, or on whose behalf, the Form of Acceptance is executed and received by Computershare or by or on behalf of Vonage, irrevocably undertakes, warrants and agrees to and with Vonage (so as to bind him, his executors, personal representatives, heirs, successors and assignees) that:
|
|
(A)
|
the execution of the Form of Acceptance and its delivery to Computershare shall constitute, subject to the provisions of paragraph 4 of Section B
of this Part 3:
|
|
(i)
|
an acceptance or deemed acceptance of the Offer in respect of all NewVoiceMedia Shares held by such NewVoiceMedia Shareholder;
|
|
(ii)
|
an authority to Vonage or its agents to execute any further documents and give any further assurances which may be required in connection with any of effecting paragraph 1(A)(i) above and an undertaking to execute all or any further documents and/or give any such further assurances as may be required to enable Vonage to obtain the full benefit of this Section C of this Part 3 and/or to perfect any of the authorities expressed to be given under this Section C of this Part 3; and
|
|
(iii)
|
conditional, and subject to, the Offer going unconditional, and effective only upon the First Closing Date, an irrevocable, unconditional and permanent waiver, release and discharge of the Vonage Group (and the NewVoiceMedia Group after the First Closing Date) from any and all actions, proceedings, claims, demands and costs, which relate to or arise out of such NewVoiceMedia Shareholder’s rights as a shareholder of NewVoiceMedia, other than any claims which arise in connection with the failure by Vonage to comply with its obligations hereunder (or if a party thereto, the Management Warranty Deed), including settlement of the consideration to which each NewVoiceMedia Shareholder is entitled as set out in paragraph 3.1 of Part 2 of this Offer Document,
|
|
(B)
|
such NewVoiceMedia Shareholder is the beneficial owner of the relevant NewVoiceMedia Shares sold pursuant to the Offer or, if it is not, has the right to dispose of the NewVoiceMedia Shares held by it and that such NewVoiceMedia Shares are sold fully paid and with full title guarantee free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and any other third party rights or interests of any nature whatsoever and together with all rights now and in the future attaching to them including the right to receive and retain all dividends, interest and other distributions declared, made or paid in the future and by his execution of the Form of Acceptance each NewVoiceMedia Shareholder shall be deemed to have expressly given the same covenants which are implied into a disposition made with full title guarantee by the Law of Property (Miscellaneous Provisions) Act 1994;
|
|
(C)
|
unless “No” is put in Box 3 of the Form of Acceptance, such NewVoiceMedia Shareholder:
|
|
(i)
|
if such NewVoiceMedia Shareholder is a citizen, resident or national of a jurisdiction outside of the United Kingdom has observed the laws of the relevant jurisdiction, obtained all requisite governmental, exchange control and other required consents, complied with all other necessary formalities and paid any issue, transfer or other taxes or other requisite payments due in any such jurisdiction in connection with such acceptance and has not taken or omitted to take any action that will or may result in Vonage or any other person acting in breach of the legal or regulatory requirements of any such jurisdiction in connection with the Offer or his acceptance thereof; or
|
|
(ii)
|
(a) is not a person located or resident in a Restricted Jurisdiction, does not hold any NewVoiceMedia Shares in respect of which he has accepted the Offer on behalf of any resident of a Restricted Jurisdiction and is not acting on behalf of a resident of a Restricted Jurisdiction for the account or benefit of any resident of a Restricted Jurisdiction or with a view to the offer, sale or delivery, directly or indirectly, of any in or into a Restricted Jurisdiction or to a resident of a Restricted Jurisdiction; and
|
|
(b)
|
has not received, mailed or otherwise transmitted, forwarded or sent, in whole or in part, copies or originals of this Offer Document, the Form of Acceptance or any related offering documents in, into or from a Restricted Jurisdiction and has not utilised in connection with the Offer, directly or indirectly, the mails of, or any means or instrumentality (including, without limitation, e-mail, facsimile, telex, telephone, the internet or other electronic transmission) of interstate or foreign commerce, or any facilities of a national securities exchange, of a Restricted Jurisdiction; and
|
|
(a)
|
the Form of Acceptance has not been mailed or otherwise sent in, into or from a Restricted Jurisdiction and such NewVoiceMedia Shareholder is accepting the Offer from outside a Restricted Jurisdiction;
|
|
(A)
|
no Leakage (other than Permitted Leakage) has been received by or on behalf of such NewVoiceMedia Shareholder,
|
|
(B)
|
the execution of the Form of Acceptance and its receipt by Computershare constitutes, subject to the Offer becoming wholly unconditional, a separate irrevocable authority and request (subject to paragraph 4 of Section B of this Part 3) to NewVoiceMedia or its agents, to procure the registration of the transfer of the NewVoiceMedia Shares pursuant to the Offer and the delivery of the share certificate(s) and/or other document(s) of title in respect thereof to Vonage or as it may direct;
|
|
(C)
|
the execution of the Form of Acceptance and its receipt by Computershare will constitute, the irrevocable appointment of Vonage as such shareholder’s attorney and/or agent and
|
|
(D)
|
after the Offer has become unconditional in all respects:
|
|
(i)
|
Vonage or its agents shall be entitled to direct the exercise of any votes and any or all other rights and privileges attaching to any Acceptance Shares (including the right to requisition the convening of a general meeting of NewVoiceMedia or of any class of its shareholders);
|
|
(ii)
|
the execution of the Form of Acceptance, subject to the Offer becoming wholly unconditional, constitutes separate and irrevocable:
|
|
(a)
|
authorities and requests to NewVoiceMedia or its agents from the holder of Acceptance Shares to send any notice, warrant, circular, document or other communication which may be required to be sent to him/her as a member of NewVoiceMedia (including any share certificates) in respect of the Acceptance Shares to Vonage at its registered office, and the irrevocable appointment of any director of Vonage or its agents as such holder of Acceptance Share’s agent or attorney to sign such documents and do such things as may in the opinion of such attorney and/or agent be necessary or desirable in connection with the exercise of any votes or other rights or privileges attaching to the Acceptance Shares held by such holder of Acceptance Shares as such holder of Acceptance Share’s attorney and on his/her behalf;
|
|
(b)
|
authorities and requests to Vonage or its agents from such holder to sign any consent to short notice of a general meeting or separate class meeting on his/her behalf and/or to execute a form of proxy in respect of such Acceptance Shares appointing any person nominated by Vonage, to attend general meetings and separate class meetings of NewVoiceMedia or its members or any of them (and any adjournment) and to exercise the votes attaching to such Acceptance Shares on his behalf, such votes to be cast, where relevant, so far as possible to satisfy any outstanding condition of the Offer;
|
|
(c)
|
the agreement of such shareholder not to exercise any of such rights without the consent of Vonage and the irrevocable undertaking of such shareholder not to appoint a proxy or corporate representative for or to attend general meetings or separate class meetings of NewVoiceMedia Shareholder (or any adjournment);
|
|
(d)
|
authorities and requests to NewVoiceMedia or its agents to procure the registration of the transfer of the NewVoiceMedia Shares referred to in paragraph 1(A) above of this Section C pursuant to the Offer, and the delivery of the share certificate(s) and/or other document(s) of title in respect thereof to Vonage or as it may direct; and
|
|
(e)
|
to Vonage to procure the despatch by post of a cheque drawn on a branch of a UK clearing bank, or, at the option of Vonage, and subject to the NewVoiceMedia Shareholder having correctly completed Box 6 of the Form of Acceptance, an electronic transfer, in respect of the consideration due to him pursuant to his acceptance of the Offer;
|
|
(E)
|
he/she will deliver or procure delivery to Computershare
at Corporate Actions Projects, Bristol BS99 6AH, his/her share certificate(s) and/ or other document(s) of title in respect of Acceptance Shares, or an indemnity acceptable to Vonage in lieu thereof, as soon as possible and in any event within four months of the Offer becoming unconditional in all respects;
|
|
(F)
|
the execution of the Form of Acceptance constitutes his or her irrevocable submission, in relation to all matters arising out of the Offer and the Form of Acceptance, to the exclusive jurisdiction of the courts of England or of such other court as Vonage or NewVoiceMedia may bring proceedings pursuant to paragraphs 3.15 or 3.16 of Section B of this Part 3; and
|
|
(G)
|
the terms and conditions to the Offer in this Offer Document shall be deemed to be incorporated in, and form part of, the Form of Acceptance, which shall be read and construed accordingly;
|
|
(H)
|
if he/she accepts the Offer, subject to the Offer becoming wholly unconditional:
|
|
(i)
|
he/she shall promptly, following request by or on behalf of Vonage, do all such acts and things as shall, in the opinion of Vonage, be necessary or expedient to vest in Vonage, or its nominee(s) or such other person as Vonage may decide, the Acceptance Shares; and accordingly grants power(s) of attorney and authorities on the terms conferred by or referred to in these paragraphs which are given by way of security for the performance of the obligations of such shareholder and which are irrevocable (in respect of powers of attorney, in accordance with section 4 of the Powers of Attorney Act 1971);
|
|
(ii)
|
he/she agrees to ratify each and every act or thing which may be done or effected by Vonage or its respective directors or agents, as the case may be, in the exercise of any of his/her or their respective powers and/or authorities hereunder and to indemnity each such person from losses arising therefrom; and
|
|
(iii)
|
if any provisions of Section B or this Section C of this Part 3 shall be unenforceable or invalid or shall not operate to afford Vonage or its respective directors or agents the benefit of the authority expressed to be given therein, he/she will with all practicable speed do all such acts and things and execute all such documents that may be required by them to enable them or any of them to secure the full benefit of Section B and this Section C of this Part 3.
|
|
2.
|
References in this Section C of this Part 3 to a “
NewVoiceMedia Shareholder
” shall include references to the person or persons executing a Form of Acceptance and, in the event of more than one person executing a Form of Acceptance, the provisions of this Section C of this Part 3 shall apply to them jointly and to each of them. On execution, the Form of Acceptance shall take effect as a deed.
|
|
1.
|
Copies of the following documents will be available for inspection at Osborne Clarke LLP, 2 Temple Back East, Temple Quay, Bristol BS1 6EG up to and including the First Closing Date (or, if applicable, the Drag Closing Date):
|
|
(A)
|
the NewVoiceMedia Articles;
|
|
(B)
|
the irrevocable undertakings to accept the Offer referred to in paragraph 5 of Part 2 of this document;
|
|
(C)
|
the Management Warranty Deed;
|
|
(D)
|
the Locked Box Accounts;
|
|
(E)
|
the Permitted Leakage schedule;
|
|
(F)
|
the Form of Acceptance; and
|
|
(G)
|
this Offer Document.
|
|
“
A Preferred Shares
”
|
the A preferred shares of £0.01 each in the capital of NewVoiceMedia
|
|
“
Act
”
|
the Companies Act 2006
|
|
“
Australian Shareholders
”
|
NewVoiceMedia Shareholders who have a registered address in Australia
|
|
“
B Ordinary Shares
”
|
the B ordinary shares of £0.01 each in the capital of NewVoiceMedia
|
|
“
B Preferred Shares
”
|
the B preferred shares of £0.01 each in the capital of NewVoiceMedia
|
|
“
Business Day
”
|
a day of the week other than a Saturday, Sunday or a day upon which banks are generally closed for business in London, United Kingdom or New York, New York, United States
|
|
“
Conditions
”
|
has the meaning given in Section A of Part 3 of this Offer Document
|
|
“
C Preferred Shares
”
|
the C preferred shares of £0.01 each in the capital of NewVoiceMedia
|
|
“
C (Tranche 1) Ordinary Shares
”
|
the 3,183,361 C ordinary shares of £0.01 each in the capital of NewVoiceMedia held by Heartwood Nominees Limited on the date of this Offer Document
|
|
“
C (Tranche 2) Ordinary Shares
”
|
the 2,491,104 C ordinary shares of £0.01 each in the capital of NewVoiceMedia held by Heartwood Nominees Limited on the date of this Offer Document
|
|
“
D Preferred Shares
”
|
the D preferred shares of £0.01 each in the capital of NewVoiceMedia
|
|
“
Drag Along Provisions
”
|
has the meaning given in paragraph 7 of Part 1 of this Offer Document
|
|
“
Drag Closing Date
”
|
3 p.m. London Time on such date as Vonage may decide in its absolute discretion, provided that such date shall fall no later than 15 Business Days after the First Closing Date
|
|
“
Dragging Shareholders
”
|
the NewVoiceMedia Shareholders who wish to accept the Offer and who hold between them at least the Threshold (including at least two of the Investors)
|
|
“
E Preferred Shares
”
|
the E preferred shares of £0.01 each in the capital of NewVoiceMedia
|
|
“
Exchange Rate
”
|
1.31335, being the close spot mid-trade Composite (London) rate for a transaction between Sterling and Dollars as quoted on Bloomberg on 18 September 2018
|
|
“
First Closing Date
”
|
the Return Date, unless the Conditions have not been satisfied or (if permissible) waived on or before the Return Date in which case the First Closing Date shall be automatically extended to 3 p.m. London Time on the date falling five (5) Business Days after all Conditions have been satisfied or (if permissible) waived
|
|
“
Form of Acceptance
”
|
the form of acceptance and authority relating to the Offer accompanying this Offer Document
|
|
“
F Preferred Shares
”
|
the F convertible shares of £0.01 each in the capital of NewVoiceMedia
|
|
“
Governmental Entity
”
|
any supranational, national, state, municipal, local, or foreign government, any instrumentality, subdivision, court, administrative agency or commission, or other governmental authority, or any quasi-governmental, arbitrator or private body exercising any regulatory or other governmental or quasi-governmental authority
|
|
“
HSR Act
”
|
the US Hart-Scott-Rodino Antitrust Improvements Act of 1976
|
|
“
Investors
”
|
has the meaning given in the NewVoiceMedia Articles
|
|
“
Lapse Date
”
|
3.p.m. London Time on 4 January 2019 or on such later date as Vonage and NewVoiceMedia may otherwise agree in writing
|
|
“
Leakage
”
|
any of the following which occurs after (but excluding) the Locked Box Date up to (and including) the First Closing Date:
(a)
the making or payment of any dividend or distribution (whether in cash, stock or in kind) to, in favour of or for the benefit of a NewVoiceMedia Shareholder or any of its NewVoiceMedia Shareholder Affiliates by a member of the NewVoiceMedia Group;
(b)
the payment of any sum to or in favour of, or on behalf of, a NewVoiceMedia Shareholder or any of its NewVoiceMedia Shareholder Affiliates by a member of the NewVoiceMedia Group;
(c)
any payments made by any member of the NewVoiceMedia Group to a NewVoiceMedia Shareholder or any of its NewVoiceMedia Shareholder Affiliates in respect of share or loan capital or other securities of the NewVoiceMedia Group being issued, redeemed, purchased or repaid or any other return of capital;
(d)
the sale, purchase, transfer or disposal of any asset to or in favour of, or for the benefit of, a NewVoiceMedia Shareholder or any of its NewVoiceMedia Shareholder Affiliates from a member of the NewVoiceMedia Group;
(e)
the entry into by a member of the NewVoiceMedia Group of a guarantee or indemnity relating to obligations of a NewVoiceMedia Shareholder or any of its NewVoiceMedia Shareholder Affiliates;
(f)
the forgiveness, release or waiver of any debt owed by or claim outstanding against, or for the benefit of, a NewVoiceMedia Shareholder or any of its NewVoiceMedia Shareholder Affiliates by a member of the NewVoiceMedia Group;
(g)
any payment (whether paid or payable) by any member of the NewVoiceMedia Group of any transaction bonus, incentive or similar payment in connection with the Offer or otherwise out of the ordinary course of employment consistent with past practice to or in favour of any director, employee or consultant of a member of the NewVoiceMedia Group;
(h)
any payment by any member of the NewVoiceMedia Group of any third party advisor fees or expenses in connection with the preparation for, negotiation or consummation of the Offer;
(i)
creation by any member of the NewVoiceMedia Group of any Encumbrance over the assets of the NewVoiceMedia Group in favour of, or for the benefit of, a NewVoiceMedia Shareholder or any of its NewVoiceMedia Shareholder Affiliates;
|
|
|
(j)
any Taxes paid or payable by any member of the NewVoiceMedia Group (including any VAT or National Insurance contributions) which are incurred as a result of any of the payments or matters described in any of the foregoing sub-paragraphs, other than any VAT which is recovered as input tax by a member of the NewVoiceMedia Group or the representative member of any VAT group of which it is a member;
(k)
any enforceable commitment on a member of the NewVoiceMedia Group to do any of the foregoing; or
(l)
any Taxes arising from the issuance of Shares and/or making of payments pursuant to the exercise of and/or cash cancellation of NewVoiceMedia Options other than Taxes made good by the holder of such NewVoiceMedia Options to the relevant member of the NewVoiceMedia Group,
but, in each case, the amount of any Leakage shall be reduced by the value of any Relief arising to a member of the NewVoiceMedia Group, in each case, as a consequence of any of the matters referred to in sub-paragraphs (a) to (l) above to the extent such Relief operates to reduce the amount of Tax actually payable by a member of the NewVoiceMedia Group
|
|
“
Locked Box Accounts
”
|
has the meaning given in the Management Warranty Deed
|
|
“
Locked Box Date
”
|
31 July 2018
|
|
“
Management Warranty Deed
”
|
the implementation and management warranty deed, made as of 20 September 2018, among the Warrantors, NewVoiceMedia and Vonage
|
|
“
NewVoiceMedia
”
|
NewVoiceMedia Limited, a private company incorporated in England and Wales with registered number 03602868
|
|
“
NewVoiceMedia Articles
”
|
the articles of association of NewVoiceMedia as at the date of this Offer Document
|
|
“
NewVoiceMedia Board
”
|
the board of directors of NewVoiceMedia
|
|
“
NewVoiceMedia Directors
”
|
the directors of NewVoiceMedia and “
NewVoiceMedia Director
” means any director of NewVoiceMedia
|
|
“
NewVoiceMedia Group
”
|
NewVoiceMedia and its subsidiary undertakings and “
member of the NewVoiceMedia Group
”
shall be construed accordingly
|
|
“
NewVoiceMedia Shareholders
”
|
holders of NewVoiceMedia Shares and for such purposes shall include any persons who become holders of NewVoiceMedia Shares upon such shares being allotted and issued (whether conditionally or otherwise) on or prior to the Offer ceasing to be open to acceptance following exercise or automatic conversion of any NewVoiceMedia Options and/or NewVoiceMedia Warrants
|
|
“
NewVoiceMedia Shareholder Affiliate
”
|
a person connected with a NewVoiceMedia Shareholder within the meaning of section 1122 of the Corporation Tax Act 2010 but shall in any event exclude (i) any portfolio or investee company in which the applicable NewVoiceMedia Shareholder or its NewVoiceMedia Shareholder Affiliates have an investment; and (ii)
in respect of Leakage only, any of Barclays, Lloyd's, RBS, HSBC or Standard Chartered in so far as they have a direct or indirect interest in any NewVoiceMedia Shareholder and do not benefit from any Leakage solely as a result of their direct or indirect interest in a NewVoiceMedia Shareholder
|
|
“NewVoiceMedia Shares”
|
the A Preferred Shares, B Ordinary Shares, B Preferred Shares, C Ordinary Shares, C Preferred Shares, D Preferred Shares, E Preferred Shares, F Preferred Shares and Restricted Shares, and for such purposes shall include any such shares which are allotted and issued (whether conditionally or otherwise) on or prior to the Offer ceasing to be open to acceptance following exercise or automatic conversion of any NewVoiceMedia Options and/or NewVoiceMedia Warrants
|
|
“
NewVoiceMedia Options
”
|
the outstanding options granted by the Company to employees of the NewVoiceMedia Group over NewVoiceMedia Shares under the rules of the NewVoiceMedia Limited EMI General Share Option Plan, the rules of the NewVoiceMedia Limited Unapproved Share Option Plan and various standalone option agreements
|
|
“
NewVoiceMedia Warrants
”
|
the warrants to subscribe for:
(a)
B Preferred Shares issued to Venture Lending & Leasing VI, LLC pursuant to an instrument executed by the Company and dated 4 November 2011;
(b)
B Preferred Shares issued to RCC Ventures, LLC pursuant to an instrument executed by the Company and dated 23 April 2013 (and in substitution of an instrument dated 28 November 2011); and
(c)
E Preferred Shares issued to Hercules Technology Growth Capital, Inc.
pursuant to an instrument executed by the Company and dated 18 December 2014
|
|
“
Offer
”
|
the recommended offer made by Vonage to acquire all of the issued and to be issued share capital of NewVoiceMedia, on the terms and subject to the conditions set out in this Offer Document and the Form of Acceptance and, where the context so requires, any subsequent revision, variation, extension or renewal thereof in accordance with the terms of this Offer Document
|
|
“
Offer Document
”
|
this Offer Document
|
|
“
Overseas Shareholders
”
|
NewVoiceMedia Shareholders who are resident in, ordinarily resident in or citizens of, jurisdictions other than the United Kingdom
|
|
“
Permitted Leakage
”
|
(a)
any payment made in respect of salaries, pension contributions, bonuses, directors’ fees or benefits, employee remuneration, benefits (including pension payments), consultant’s fees or director’s, employee’s or consultant’s expenses not connected with the Offer or other reimbursements, benefits or expenses due to any employee, officer or consultant of any member of the NewVoiceMedia Group in the ordinary course of their employment consistent with past practice;
(b)
any amount payable by any member of the NewVoiceMedia Group specifically accrued or accounted for in the Locked Box Accounts;
(c)
any payment made or cost incurred in connection with any matter undertaken at the written request of, or with the prior written consent of, Vonage;
(d)
any payments set out in the Permitted Leakage schedule agreed between the Buyer and NewVoiceMedia which is available for inspection pursuant to Part 4 of this Offer Document);
(e)
the issuance of NewVoiceMedia Shares and/or making of payments pursuant to the exercise of and/or cash cancellation of NewVoiceMedia Options; and
(f)
any Taxes paid or payable by any member of the NewVoiceMedia Group (including any VAT or National Insurance contributions) which are incurred as a result of any of the payments or matters described in any of the foregoing sub-paragraphs, other than any Taxes paid or payable in connection with sub-paragraph (e)
|
|
“
Relief
”
|
includes any right to repayment of Tax and any relief, loss, allowance, set-off or credit in respect of Tax and any deduction in computing, or against, profits for Tax purposes
|
|
“
Restricted Jurisdiction
”
|
Canada, Japan and any other jurisdiction where extension or acceptance of the Offer would violate the law of that jurisdiction
|
|
“
Restricted Shares
”
|
the restricted shares of £0.01 each in the capital of NewVoiceMedia
|
|
“
Return Date
”
|
3.00 p.m. London time on 31 October 2018
|
|
“
Squeeze-Out Provisions
”
|
has the meaning given in paragraph 7 of Part 1 of this Offer Document
|
|
“
subsidiary
”
,
“
subsidiary undertaking
”
and
“
undertaking
”
|
have the meanings respectively ascribed to them under the Act
|
|
“
Tax
”
|
all forms of taxation, duties, levies, imposts, whether of the United Kingdom or any other jurisdiction including corporation tax, including instalment payments in respect thereof, income tax, capital gains tax, value added tax, duties of excise, customs and other import duties, inheritance tax, stamp duty, stamp duty reserve tax, stamp duty land tax, capital duties, national insurance contribution, charges, fees, levies or other assessments in the nature of a tax of any kind whatsoever, imposed by any Tax Authority, together with any interest, fines, penalties or additional amounts attributable to, or imposed upon, or with respect to, any such taxes, charges, fees, levies or other assessments in the nature of a tax
|
|
“
Tax Authority
”
|
any local, municipal, governmental, state, federal or fiscal, revenue, customs or excise authority, body, agency or official anywhere in the world competent to impose a liability to Tax
|
|
“
Threshold
”
|
55% of NewVoiceMedia’s issued share capital at the date the Drag Along Notice (as defined in the NewVoiceMedia Articles) is served under the Drag Along Provisions
|
|
“
UK
”
or
“
United Kingdom
”
|
the United Kingdom of Great Britain and Northern Ireland
|
|
“
United States
”
or
“
US
”
|
the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia and all other areas subject to its jurisdiction
|
|
“
Vonage
”
|
Vonage Holdings Corp., a Delaware corporation
|
|
“
Vonage Group
”
|
Vonage and its subsidiary undertakings excluding the NewVoiceMedia Group and “
member of the Vonage Group
” shall be construed accordingly
|
|
“
Warrantors
”
|
Dennis Fois, Guy Sochovsky, Artur Michalczyk, Moni Manor and Fiona Talbot and any other shareholder who elects to adhere to the Warranty Deed when accepting the Offer
|
|
To:
|
Vonage Holdings Corp.
|
|
From:
|
[____]
|
|
1.
|
Background
|
|
(a)
|
on the date hereof:
|
|
(i)
|
the Offeror intends to make an offer to all shareholders, option holders and warrant holders of the Company to acquire all of the issued and to be issued (pursuant to the exercise of options or warrants) shares in the capital of the Company (the “
Offer
Shares
”) (the “
Acquisition
”); and
|
|
(ii)
|
neither the Offeror nor any of its subsidiaries own any of the Offer Shares;
|
|
(b)
|
it is intended that the Acquisition will be implemented by way of a contractual takeover offer (within the meaning of section 974 of the Companies Act 2006) (referred to in this undertaking as the “
Offer
”);
|
|
(c)
|
the Acquisition will be substantially on the terms and conditions to be set out in the formal document containing details of the Offer (the “
Offer Document
”); and
|
|
(d)
|
the Acquisition will extend to any Offer Shares allotted, issued or transferred while the Offer remains open for acceptance, including any Offer Shares allotted, issued or transferred in relation to the outstanding options granted by the Company to employees of the NewVoiceMedia Group over NewVoiceMedia Shares (as each such term is defined in the Offer Document) under the rules of the NewVoiceMedia Limited EMI General Share Option Plan, the rules of the NewVoiceMedia Limited Unapproved Share Option Plan and various standalone option agreements
(the “
Company Options
”) operated by the Company.
|
|
2.
|
Shareholdings
|
|
(a)
|
I have full legal capacity to enter into this undertaking and perform any obligations under it in accordance with their terms;
|
|
(b)
|
I am, or one or more of my Connected Persons (as defined below) is, the registered holder and/or beneficial owner of (or otherwise able to control the exercise of all rights attaching to, including the ability to procure the transfer of), the number and class of Offer Shares specified in column 3 of Schedule 1 to this undertaking (the “
Shares
”), which expression shall be deemed to include any other shares in the Company (i) issued in respect of Shares or into which the Shares may be converted, sub-divided or consolidated as a result of any reorganisation of the share capital of the Company; and (ii) in which I acquire an interest, in each case after the date hereof) and such Shares are free from all mortgages, liens, charges, equities, encumbrances and other third party rights;
|
|
(c)
|
the details of the holdings in interests in securities of the Company set out in Schedule 1 to this undertaking are complete and accurate; and
|
|
(d)
|
save as set out in Schedule 1 to this undertaking, I do not, and my Connected Persons do not have any interests in any Offer Shares or securities of the Company or any rights to subscribe for, purchase or otherwise acquire any Offer Shares or securities of the Company.
|
|
3.
|
Dealings and undertakings
|
|
(a)
|
I shall not, and shall procure that my Connected Persons shall not, prior to the earlier of the Acquisition closing (of if applicable, becoming effective) or lapsing (in accordance with paragraph 7 below):
|
|
(i)
|
sell, transfer, charge, encumber, grant any option over or otherwise dispose of or permit the sale, transfer, charging or other disposition or creation or grant of any other encumbrance or option of or over all or any of the Shares (or rights, warrants or options to subscribe for Shares other than in respect of the exercise and/or cancellation of the same in accordance with paragraph 4(a) below) except under the Acquisition or enter into any transaction with the same or a substantially similar economic effect as, or agree to do any of the foregoing, including, without limitation, entering into or agreeing to enter into any derivative transaction in respect of the Shares; or
|
|
(ii)
|
(save pursuant to the Acquisition) enter into any agreement or other arrangement or permit any agreement or arrangement to be entered into or incur any obligation or permit any obligation to arise:
|
|
(A)
|
to do all or any of the acts or things referred to in paragraph 3(a)(i); or
|
|
(B)
|
which, in relation to the Shares, would or might preclude me from complying with my obligations under paragraph 4 below,
|
|
(b)
|
prior to the earlier of the Acquisition closing (or, if applicable, becoming effective) or lapsing (in accordance with paragraph 7 below), I shall not, in my capacity as a shareholder of the Company, without the consent of the Offeror, requisition or join in requisitioning, any general or class meeting of the Company which would or might restrict or impede the Offer becoming unconditional;
|
|
(c)
|
prior to the earlier of the Acquisition closing (or, if applicable, becoming effective) or lapsing (in accordance with paragraph 7 below), I will not (and shall procure that my Connected Persons shall not) acquire any interest in any relevant securities of the Company or the Offeror, unless such interest arises by virtue of the grant to me or exercise by me of options or vesting of awards over Offer Shares under the Company Options or any other share option scheme, and, if any such interest in relevant securities (including for these purposes shares arising on exercise of the options set out in Schedule 1 to this undertaking) is acquired by me or my Connected Persons, such interest in relevant securities shall be deemed to be included in the expression “Shares” for the purposes of this undertaking; and
|
|
(d)
|
I shall keep confidential to the extent not already publicly available, the terms (but not existence) of this undertaking, provided that I may disclose the same to: (i) the extent required by applicable law; (ii) the extent disclosed in the Offer Document or otherwise already in the public domain; (iii) the Company and its advisers; and (iv) my professional advisers and their representatives for the purposes of negotiating and advising on the content of this undertaking, in the case of (iii) and (iv), if it is reasonable to do so and in which case I shall direct that they treat such information as confidential in the same terms. Nothing in this paragraph 3(d) shall survive termination of this undertaking.
|
|
4.
|
Contractual Offer
|
|
(a)
|
I shall accept or, where applicable, procure the acceptance of the Offer in respect of the Shares in accordance with the procedure for acceptance set out in the Offer Document as soon as possible and in any event immediately after the posting of the Offer Document (or, in respect of any Shares allotted to me or my Connected Persons after the posting of the Offer Document, within 48 hours of such allotment or acquisition) and, in respect of any Shares held in certificated form, shall forward the relevant share certificate(s) to the Offeror or its nominated representative (or a form of indemnity acceptable to the directors of the Company in respect of lost share certificate(s)) at the time of acceptance;
|
|
(b)
|
I shall not withdraw any acceptance of the Offer in respect of the Shares and shall procure that no rights to withdraw any acceptance in respect of the Shares are exercised;
|
|
(c)
|
I shall, subject to the terms of the articles of association of the Company as at the date hereof (the “
Articles
”), at the written request of the Offeror (including by email to the email address set out on page 1) automatically, unconditionally and immediately release to the Offeror (whereupon it shall be: (I) deemed to be executed; and (II) immediately delivered by the Offeror to the Company on my behalf) the Drag Along Notice (as defined in the Articles) signed by me on the date hereof and held to the Offeror’s order; and
|
|
(d)
|
in the event that the Offer is modified or amended in a non-material respect with the consent of the Company, I confirm and agree that this undertaking shall continue to be binding mutatis mutandis in respect of the Shares.
|
|
5.
|
Further provisions
|
|
(a)
|
I shall promptly supply you with all information at my disposal in my capacity as shareholder in the Company and in relation to the interests of any Connected Person required by you in connection with the Acquisition in order for you to comply with the Companies Act 2006 and any legal or regulatory requirements and immediately to notify you in writing of any material change in the accuracy or import of any such information previously supplied by me to you.
|
|
(b)
|
The Offeror shall acquire the Shares free of any lien, charge, option, equity or encumbrance and any third party rights and interest of any nature and together with all rights now and hereafter attaching or accruing to them, including voting rights and the right to receive and retain in full all dividends of any nature and other distributions (if any) hereafter declared, made or paid.
|
|
(c)
|
I consent to the issue of the Offer Document incorporating references to me and to the provisions of this undertaking. I understand that, if the Acquisition proceeds, this undertaking will be made available for the duration of the Offer period and that particulars of it will be contained in the Offer Document, and I consent to such document incorporating references to me and to the provisions of this undertaking.
|
|
(d)
|
Subject to paragraph 7, in order to secure the performance of my obligations hereunder, I irrevocably appoint any director for the time being of the Offeror to be my attorney in my name and (if I fail to comply with any obligations under this undertaking) on my behalf to execute and deliver forms of acceptance to be issued with the Offer Document in respect of the Shares, and to sign, execute and deliver any documents and to do all acts and things as may be necessary for the performance of the obligations under this undertaking.
|
|
(e)
|
I shall cause the registered holder of any Shares to comply with the undertakings in paragraphs 3 to 6 (inclusive) of this undertaking in respect of the relevant Shares as if they were a party to this undertaking and so obliged;
|
|
(f)
|
In the case where any Shares are registered in the name of a nominee, I shall direct the nominee to act as if the nominee were bound by the terms of this irrevocable undertaking and I shall do all acts and things necessary to carry the terms hereof into effect as if I had been the registered holder of the Shares registered in the name of such nominee.
|
|
6.
|
Voting rights
|
|
(a)
|
in my capacity as a shareholder, I shall, exercise and procure the exercise of, the voting rights attaching to the Shares on a Relevant Resolution (as defined below) only to approve the Acquisition and any directly related matter or not in a manner inconsistent with the approval and implementation of the Acquisition;
|
|
(b)
|
in my capacity as a shareholder, I shall exercise, and procure the exercise of, the rights attaching to the Shares to requisition or join in requisitioning any general or class meeting of the Company pursuant to section 303 of the Companies Act 2006 for the purpose of considering a Relevant Resolution and to require the Company to give notice of such a resolution only to approve the Acquisition and any directly related matters or not in a manner inconsistent with the approval and implementation of the Acquisition;
|
|
(c)
|
for the purpose of voting on a Relevant Resolution to approve the Acquisition and any directly related matter, I shall complete, execute and deliver (or procure the completion, execution and delivery of) any form of proxy relating to the Shares required in writing by the Offeror appointing any person nominated by the Offeror; and
|
|
(d)
|
for the purposes of this paragraph, “
Relevant Resolution
” means:
|
|
(i)
|
a shareholders’ resolution (whether or not amended) proposed at a general or class meeting of the Company, or at an adjourned meeting, the passing of which is necessary to implement the Acquisition or which, if passed, would result in any condition of the Acquisition not being fulfilled or which would impede or frustrate the Acquisition (including, for the avoidance of doubt, any resolution to approve any scheme of arrangement in relation to the Company which is proposed in competition with the Acquisition);
|
|
(ii)
|
a shareholders’ resolution to adjourn a general or class meeting of the Company whose business includes the consideration of a resolution falling within paragraph (i); and
|
|
(iii)
|
a shareholders’ resolution to amend a resolution falling within paragraphs 6(d)(i) or 6(d)(ii).
|
|
7.
|
Termination
|
|
8.
|
Miscellaneous
|
|
(a)
|
In this undertaking “
Connected Persons
” shall mean family members (within the meaning of section 253 of the Companies Act 2006) and trusts of which I am a beneficiary.
|
|
(b)
|
In this undertaking references to a document in the “
agreed form
” are to that document in the form agreed to and initialled for the purposes of identification by or on behalf of myself and the Offeror.
|
|
(c)
|
The benefit of this undertaking may not be assigned by Offeror or its successors.
|
|
(d)
|
This undertaking shall bind my estate and personal representatives.
|
|
(e)
|
Without prejudice to any other rights or remedies that the Offeror may have, I acknowledge and agree that damages may not be an adequate remedy for any breach by me of any of my obligations under this undertaking. The Offeror shall be entitled to seek the remedies of injunction, specific performance and other equitable relief for any threatened or actual breach of any such obligation and the proof of special damages shall be necessary for the enforcement by the Offeror of its rights under this undertaking.
|
|
(f)
|
Any time, date or period mentioned in this undertaking may be extended by mutual agreement between me and the Offeror but as regards any time, date or period originally fixed or as extended, time shall be of the essence.
|
|
(g)
|
This undertaking may be executed in more than one counterpart, each of which shall constitute an original and all of which, when taken together, shall constitute one agreement.
|
|
(h)
|
This undertaking shall be governed by and construed in accordance with English law and all claims and disputes (including non-contractual claims and disputes) arising out of or in connection with this undertaking, its subject matter, negotiation or formation shall be governed by and construed in accordance with English law. The parties each irrevocably submit to the exclusive jurisdiction of the English courts, provided that a judgment of any court may be enforced in any court of competent jurisdiction.
|
|
Column 1
|
Column 2
|
Column 3
|
Column 4
|
|
Registered holder
|
Beneficial owner
|
Number and class of Shares
|
Options, warrants or other rights to acquire or subscribe for Shares
|
|
|
|
|
|
|
|
|
|
|
|
To:
|
Vonage Holdings Corp.
|
|
From:
|
[____]
|
|
1.
|
Background
|
|
(a)
|
on the date hereof:
|
|
(i)
|
the Offeror intends to make an offer to all shareholders, option holders and warrant holders of the Company to acquire all of the issued and to be issued (pursuant to the exercise of options or warrants) shares in the capital of the Company (the “
Offer
Shares
”) (the “
Acquisition
”); and
|
|
(ii)
|
neither the Offeror nor any of its subsidiaries own any of the Offer Shares;
|
|
(b)
|
it is intended that the Acquisition will be implemented by way of a contractual takeover offer (within the meaning of section 974 of the Companies Act 2006) (referred to in this undertaking as the “
Offer
”);
|
|
(c)
|
the Acquisition will be substantially on the terms and conditions to be set out in the formal document containing details of the Offer (the “
Offer Document
”); and
|
|
(d)
|
the Acquisition will extend to any Offer Shares allotted, issued or transferred while the Offer remains open for acceptance, including any Offer Shares allotted, issued or transferred in relation to the outstanding options granted by the Company to employees of the NewVoiceMedia Group over NewVoiceMedia Shares (as each such term is defined in the Offer Document) under the rules of the NewVoiceMedia Limited EMI General Share Option Plan, the rules of the NewVoiceMedia Limited Unapproved Share Option Plan and various standalone option agreements
(the “
Company Options
”) operated by the Company.
|
|
2.
|
Shareholdings
|
|
(a)
|
we have full legal capacity to enter into this undertaking and perform any obligations under it in accordance with their terms;
|
|
(b)
|
we are, or one or more of our Affiliates (as defined below) is, the registered holder and/or beneficial owner of (or otherwise able to control the exercise of all rights attaching to, including the ability to procure the transfer of), the number and class of Offer Shares specified in column 3 of Schedule 1 to this undertaking (the “
Shares
”), which expression shall be deemed to include any other shares in the Company (i) issued in respect of Shares or into which the Shares may be converted, sub-divided or consolidated as a result of any reorganisation of the share capital of the Company; and (ii) in which we acquire an interest, in each case after the date hereof, and such Shares are free from all mortgages, liens, charges, equities, encumbrances and other third party rights;
|
|
(c)
|
the details of the holdings in interests in securities of the Company set out in Schedule 1 to this undertaking are complete and accurate; and
|
|
(d)
|
save as set out in Schedule 1 to this undertaking, we do not, and our Affiliates do not have any interests in any Offer Shares or securities of the Company or any rights to subscribe for, purchase or otherwise acquire any Offer Shares or securities of the Company.
|
|
3.
|
Dealings and undertakings
|
|
(a)
|
we shall not, and shall procure that our Affiliates shall not, prior to the earlier of the Acquisition closing (of if applicable, becoming effective) or lapsing (in accordance with paragraph 7 below):
|
|
(i)
|
sell, transfer, charge, encumber, grant any option over or otherwise dispose of or permit the sale, transfer, charging or other disposition or creation or grant of any other encumbrance or option of or over all or any of the Shares (or rights, warrants or options to subscribe for Shares other than in respect of the exercise and/or cancellation of the same in accordance with paragraph 4(a) below) except under the Acquisition or enter into any transaction with the same or a substantially similar economic effect as, or agree to do any of the foregoing, including, without limitation, entering into or agreeing to enter into any derivative transaction in respect of the Shares; or
|
|
(ii)
|
(save pursuant to the Acquisition) enter into any agreement or other arrangement or permit any agreement or arrangement to be entered into or incur any obligation or permit any obligation to arise:
|
|
(A)
|
to do all or any of the acts or things referred to in paragraph 3(a)(i); or
|
|
(B)
|
which, in relation to the Shares, would or might preclude us from complying with our obligations under paragraph 4 below,
|
|
(b)
|
prior to the earlier of the Acquisition closing (or, if applicable, becoming effective) or lapsing (in accordance with paragraph 7 below), we shall not, in our capacity as a shareholder of the Company, without the consent of the Offeror, requisition or join in requisitioning, any general or class meeting of the Company which would or might restrict or impede the Offer becoming unconditional;
|
|
(c)
|
prior to the earlier of the Acquisition closing (or, if applicable, becoming effective) or lapsing (in accordance with paragraph 7 below), we will not (and shall procure that our Affiliates shall not) acquire any interest in any relevant securities of the Company or the Offeror, unless such interest arises by virtue of the grant to us or exercise by us of options or vesting of awards over Offer Shares under the Company Options or any other share option scheme, and, if any such interest in relevant securities (including for these purposes shares arising on exercise of the options set out in Schedule 1 to this undertaking) is acquired by us or our Affiliates, such interest in relevant securities shall be deemed to be included in the expression “Shares” for the purposes of this undertaking; and
|
|
(d)
|
we shall keep confidential to the extent not already publicly available, the terms (but not existence) of this undertaking, provided that we may disclose the same to: (i) the extent required by applicable law; (ii) the extent disclosed in the Offer Document or otherwise already in the public domain; (iii) the Company and its advisers; and (iv) our professional advisers and their representatives for the purposes of negotiating and advising on the content of this undertaking, in the case of (iii) and (iv), if it is reasonable to do so and in which case we shall direct that they treat such information as confidential in the same terms. Nothing in this paragraph 3(d) shall survive termination of this undertaking.
|
|
4.
|
Contractual Offer
|
|
(a)
|
we shall accept or, where applicable, procure the acceptance of the Offer in respect of the Shares in accordance with the procedure for acceptance set out in the Offer Document as soon as possible and in any event immediately after the posting of the Offer Document (or, in respect of any Shares allotted to us or our Affiliates after the posting of the Offer Document, within 48 hours of such allotment or acquisition) and, in respect of any Shares held in certificated form, shall forward the relevant share certificate(s) to the Offeror or its nominated representative (or a form of indemnity acceptable to the directors of the Company in respect of lost share certificate(s)) at the time of acceptance;
|
|
(b)
|
we shall not withdraw any acceptance of the Offer in respect of the Shares and shall procure that no rights to withdraw any acceptance in respect of the Shares are exercised; and
|
|
(c)
|
we shall, subject to the terms of the articles of association of the Company as at the date hereof (the “
Articles
”), at the written request of the Offeror (including by email to the email address set out on page 1) automatically, unconditionally and immediately release to the Offeror (whereupon it shall be: (i) deemed to be executed; and (ii) immediately delivered by the Offeror to the Company on our behalf) the Drag Along Notice (as defined in the Articles) signed by us on the date hereof and held to the Offeror’s order; and
|
|
(d)
|
we shall not interfere with (i) the delivery of the Call Notice (as defined in the Articles) in the agreed form to all shareholders in the Company who have not accepted the Offer on or before the Return Date; and (ii) the completion of the sale of the Called Shares (as defined in the Articles) and the registration of the Offeror as the holder of the Called Shares in the register of members of the Company.
|
|
5.
|
Further provisions
|
|
(a)
|
We shall promptly supply you with all information at our disposal in our capacity as shareholder in the Company and in relation to the interests of any Affiliate required by you in connection with the Acquisition in order for you to comply with the Companies Act 2006 and any legal or regulatory requirements and immediately to notify you in writing of any material change in the accuracy or import of any such information previously supplied by us to you.
|
|
(b)
|
The Offeror shall acquire the Shares free of any lien, charge, option, equity or encumbrance and any third party rights and interest of any nature and together with all rights now and hereafter attaching or accruing to them, including voting rights and the right to receive and retain in full all dividends of any nature and other distributions (if any) hereafter declared, made or paid.
|
|
(c)
|
We consent to the issue of the Offer Document incorporating references to us and to the provisions of this undertaking. We understand that, if the Acquisition proceeds, this undertaking will be made available for the duration of the Offer period and that particulars of it will be contained in the Offer Document, and we consent to such document incorporating references to us and to the provisions of this undertaking.
|
|
(d)
|
Subject to paragraph 7, in order to secure the performance of our obligations hereunder, we irrevocably appoint any director for the time being of the Offeror to be our attorney in our name and (if we fail to comply with any obligations under this undertaking) on our behalf to execute and deliver forms of acceptance to be issued with the Offer Document in respect of the Shares, and to sign, execute and deliver any documents and to do all acts and things as may be necessary for the performance of the obligations under this undertaking provided that:
|
|
(i)
|
the attorney shall not tick Box 5 of the form of acceptance to the Offer Document and shall have no power to bind us to the terms of the Management Warranty Deed (as defined in the Offer Document); and
|
|
(ii)
|
the attorney shall provide that any consideration due to us is payable in US Dollars.
|
|
(e)
|
We shall cause the registered holder of any Shares to comply with the undertakings in paragraphs 3 to 6 (inclusive) of this undertaking in respect of the relevant Shares as if they were a party to this undertaking and so obliged;
|
|
(f)
|
In the case where any Shares are registered in the name of a nominee, we shall direct the nominee to act as if the nominee were bound by the terms of this irrevocable undertaking and we shall do all acts and things necessary to carry the terms hereof into effect as if we had been the registered holder of the Shares registered in the name of such nominee.
|
|
6.
|
Voting rights
|
|
(a)
|
in our capacity as a shareholder, we shall, exercise and procure the exercise of, the voting rights attaching to the Shares on a Relevant Resolution (as defined below) only to approve the Acquisition and any directly related matter or not in a manner inconsistent with the approval and implementation of the Acquisition;
|
|
(b)
|
in our capacity as a shareholder, we shall exercise, and procure the exercise of, the rights attaching to the Shares to requisition or join in requisitioning any general or class meeting of the Company pursuant to section 303 of the Companies Act 2006 for the purpose of considering a Relevant Resolution and to require the Company to give notice of such a resolution only to approve the Acquisition and any directly related matters or not in a manner inconsistent with the approval and implementation of the Acquisition;
|
|
(c)
|
for the purpose of voting on a Relevant Resolution to approve the Acquisition and any directly related matter other than any Relevant Resolution relating to any modification or amendment to the Offer that is materially adverse to us (including but not limited to any modification or amendment which represents a diminution in the value of the Offer as so revised compared with the consideration or terms previously offered), we shall complete, execute and deliver (or procure the completion, execution and delivery of) any form of proxy relating to the Shares required in writing by the Offeror appointing any person nominated by the Offeror; and
|
|
(d)
|
for the purposes of this paragraph, “
Relevant Resolution
” means:
|
|
(i)
|
a shareholders’ resolution (whether or not amended) proposed at a general or class meeting of the Company, or at an adjourned meeting, the passing of which is necessary to implement the Acquisition or which, if passed, would result in any condition of the Acquisition not being fulfilled or which would impede or frustrate the Acquisition (including, for the avoidance of doubt, any resolution to approve any scheme of arrangement in relation to the Company which is proposed in competition with the Acquisition);
|
|
(ii)
|
a shareholders’ resolution to adjourn a general or class meeting of the Company whose business includes the consideration of a resolution falling within paragraph (i); and
|
|
(iii)
|
a shareholders’ resolution to amend a resolution falling within paragraphs 6(d)(i) or 6(d)(ii).
|
|
7.
|
Termination
|
|
8.
|
Miscellaneous
|
|
(a)
|
In this undertaking “
Affiliates
” shall mean, with respect to any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or governmental body (a “
Person
”), any other Person which directly or indirectly, through one or more intermediaries, Controls, is Controlled by or is under Common Control with such Person, but shall in any event exclude any portfolio or investee company in which we or our Affiliates have an investment. Where “
Control
” means, as to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. The terms “
Controlled by
”, “
under Common Control with
” and “
Controlling
” shall have correlative meanings.
|
|
(b)
|
In this undertaking references to a document in the “
agreed form
” are to that document in the form agreed to and initialled for the purposes of identification by or on behalf of us and the Offeror.
|
|
(c)
|
The benefit of this undertaking may not be assigned by Offeror or its successors.
|
|
(d)
|
Without prejudice to any other rights or remedies that the Offeror may have, we acknowledge and agree that damages may not be an adequate remedy for any breach by us of any of my obligations under this undertaking. The Offeror shall be entitled to seek the remedies of injunction, specific performance and other equitable relief for any threatened or actual breach of any such obligation and the proof of special damages shall be necessary for the enforcement by the Offeror of its rights under this undertaking.
|
|
(e)
|
Any time, date or period mentioned in this undertaking may be extended by mutual agreement between us and the Offeror but as regards any time, date or period originally fixed or as extended, time shall be of the essence.
|
|
(f)
|
This undertaking may be executed in more than one counterpart, each of which shall constitute an original and all of which, when taken together, shall constitute one agreement.
|
|
(g)
|
This undertaking shall be governed by and construed in accordance with English law and all claims and disputes (including non-contractual claims and disputes) arising out of or in connection with this undertaking, its subject matter, negotiation or formation shall be governed by and construed in accordance with English law. The parties each irrevocably submit to the exclusive jurisdiction of the English courts, provided that a judgment of any court may be enforced in any court of competent jurisdiction.
|
|
Column 1
|
Column 2
|
Column 3
|
Column 4
|
|
Registered holder
|
Beneficial owner
|
Number and class of Shares
|
Options, warrants or other rights to acquire or subscribe for Shares
|
|
|
|
|
|
|
|
IMPLEMENTATION
AND
MANAGEMENT WARRANTY DEED
|
|
|
(1)
|
The Persons whose names and addresses are set out in Schedule 4 to this Deed (collectively, the “
Warrantors
” and each a “
Warrantor
”);
|
|
(2)
|
NewVoiceMedia Limited
a company incorporated in England & Wales (registered no. 03602868), whose registered office is at NewVoiceMedia House, Jays Close, Basingstoke, Hampshire RG22 4BS (the “
Company
”); and
|
|
(3)
|
Vonage Holdings Corp.
a company incorporated in Delaware, whose principal place of business is at 23 Main Street, Holmdel, New Jersey 07733, United States (the “
Buyer
”).
|
|
(A)
|
On the date hereof, the respective boards of directors of the Company and the Buyer announced that they had reached agreement on the terms of a recommended offer (the “
Offer
”) to be made by the Buyer to acquire all of the issued and outstanding, and to be issued, shares (the “
Shares
”) in the capital of the Company.
|
|
(B)
|
In connection with the Offer and on the terms set out in this Deed, (i) each Warrantor has agreed to give the Management Warranties; and (ii) each Warrantor and the Company has agreed to comply, or procure compliance with, certain obligations relating to the conduct of business prior to Completion.
|
|
(C)
|
The Buyer can only make Claims if the Offer is completed in accordance with its terms.
|
|
1.
|
INTERPRETATION
|
|
1.1
|
The Schedules form part of this Deed and have the same force and effect as if set out in the body of this Deed. Any reference to this Deed includes the Schedules.
|
|
1.2
|
References to a document in the “
agreed form
” are to that document in the form agreed to and initialled for the purposes of identification by or on behalf of the Company and the Buyer.
|
|
1.3
|
In this Deed, the following terms have the meanings specified or referred to in this Clause 1.3, which meanings shall be equally applicable to both the singular and plural forms.
|
|
2.
|
EFFECT
|
|
2.1
|
Other than Clauses 3.1 to 3.7, 5.1 and 8 (which shall be effective immediately on and from the date of this Deed), this Deed shall only become effective upon, and subject to, Completion having occurred. If the Offer is terminated or rescinded or lapses for any reason, then this Deed shall automatically and immediately terminate and cease to be of any effect whatsoever (other than in respect of any previously accrued rights under Clauses 3.2 to 3.7, 5.1 and 8).
|
|
2.2
|
If Completion does not take place by the Lapse Date, this Deed shall immediately terminate and cease to have effect and the Warrantors and the Company shall have no liability under or in connection with this Deed (other than in respect of any previously accrued rights under Clauses 3.2 to 3.7, 5.1 and 8).
|
|
3.
|
PRE-COMPLETION OBLIGATIONS
|
|
3.1
|
From the date of this Deed until Completion the Company and each of the Warrantors shall comply with the obligations set out in Schedule 3.
|
|
3.2
|
The Buyer hereby irrevocably undertakes:
|
|
3.2.1
|
to send the Offer Document to the Warrantors, Other Shareholders and holders of options under the Company Stock Option Plans within three (3) Business Days of the date of this Deed;
|
|
3.2.2
|
not to terminate, rescind, revoke or withdraw the Offer pursuant to the Offer Document, unless it lapses on the Lapse Date in accordance with its terms; and
|
|
3.2.3
|
not to (and will procure that none of its Affiliates shall) transfer any Shares in the period before the First Closing Date and the Drag Closing Date.
|
|
3.3
|
The Company shall (and shall procure that the Acquired Group shall) at its own cost:
|
|
3.3.1
|
file a Notification and Report Form as required to be made by the Acquired Companies in connection with the satisfaction of the HSR Condition (in consultation with the Buyer), as soon as possible (and, in any event, within 10 Business Days) after the date of this Deed;
|
|
3.3.2
|
promptly supply to: (i) the relevant authority, where requested or required; and/or (ii) the Buyer, to the extent reasonably requested by the Buyer, all information in respect of the Acquired Companies necessary for making any notifications, filings and other communications in respect of the HSR Condition (or responding to any request for further information consequent upon such notifications, filings and communications); and
|
|
3.3.3
|
procure that all information supplied in accordance with Clause 3.3.2 above, is complete and accurate in all material respects.
|
|
3.4
|
The Buyer undertakes to the Company that it shall (and shall procure that its Affiliates shall) at its own cost (including the cost of filing fees incurred):
|
|
3.4.1
|
File a Notification and Report Form as required to be made by the Buyer in connection with the satisfaction of the HSR Condition (in consultation with the Company), as soon as possible (and, in any event, within 10 Business Days) after the date of this Deed; and
|
|
3.4.2
|
use its reasonable endeavours to procure that the HSR Condition is fulfilled after the date of this Deed and in any event before the Lapse Date, including by promptly supplying all information required or requested by any relevant authority or under applicable laws and regulations; and
|
|
3.4.3
|
promptly notify the Company, and provide copies, of any communications from any Governmental Body relating to the HSR Condition, to the extent not prohibited by any Governmental Body.
|
|
3.5
|
The Buyer shall provide the Company (or its advisors) with:
|
|
3.5.1
|
draft copies of all notifications, filings and other communications to be sent to any Governmental Body in relation to the HSR Condition at such time as will allow the Company a reasonable opportunity to provide comments (any such reasonable comments to be considered before the relevant notification, filing or communication is sent to the relevant Governmental Body);
|
|
3.5.2
|
copies of all such notifications, filings and other communications in the form submitted or sent to and copies of all communications received from any Governmental Body in relation to the HSR Condition, to the extent not prohibited by any Governmental Body and excluding any information covered by any privilege,
|
|
3.5.3
|
access to advisors appointed by the Buyer to work with the Company and its advisors in connection with all matters relating to the satisfaction of the HSR Condition;
|
|
3.5.4
|
sufficient advance notice of any meetings or calls with any Governmental Body or regulatory authority in connection with the HSR Condition, to the extent not prohibited by any Governmental Body; and
|
|
3.5.5
|
where permitted by the relevant Governmental Body or regulatory authority, the opportunity to have persons nominated by the Company to attend all meetings and calls with any Governmental Body in connection with the HSR Conditions and, where appropriate, to make oral submissions at such meetings or calls provided however that the Buyer shall not be required to permit persons nominated by the Company to attend any part of such meetings or calls during which information of a commercially sensitive or privileged nature with regard to the Buyer or its Affiliates is likely to be disclosed.
|
|
3.6
|
The Buyer shall notify the Company in writing promptly, and no later than one (1) Business Day, after:
|
|
3.6.1
|
the HSR Condition has been fulfilled; or
|
|
3.6.2
|
the HSR Condition ceases to be capable of being fulfilled on or before 3 p.m. London Time on the Lapse Date or the Buyer has reasonable grounds to believe this to be the case.
|
|
3.7
|
In relation to certain amounts, that would be characterized as an “excess parachute payment” (as defined in Section 280G(b)(1) of the Code) (the “
Parachute Payments
”) payable in connection with the Offer to certain executives of the Acquired Companies who are identified after the date of this Deed by the Company as “disqualified individuals” (within the meaning of Section 280G of the Code and related regulations) receiving Parachute Payments (the “
Relevant Executives
”), the Company and the Warrantors shall use reasonable endeavours to:
|
|
3.7.1
|
prior to sending notices to Shareholders in relation to the Payment Approval (defined below), obtain a waiver from the Relevant Executives of the right to receive the Parachute Payments pending receipt of the Payment Approval; and
|
|
3.7.2
|
at least five (5) days prior to the Completion Date, obtain the approval (the “
Payment Approval
”) of more than 75% of the voting Shares (not taking into account the votes on Shares held by the Relevant Executives) with the effect of rendering the parachute payment provisions of Section 280G of the Code inapplicable to the Parachute Payments, with such shareholder approval to be solicited in a manner which satisfies all applicable requirements of such Section 280G(b)(5)(B) of the Code and the Treasury Regulations thereunder.
|
|
4.
|
MANAGEMENT WARRANTIES
|
|
4.1
|
Each Warrantor, severally (and not jointly or jointly and severally) warrants to the Buyer that each Management Warranty set forth in this Deed is true and accurate as at the date of this Deed and as of the Completion Date.
|
|
4.2
|
Each Management Warranty is given subject to, and is qualified by, the matters Disclosed in the Disclosure Letter and the limitations and exclusions expressly provided for in this Deed.
|
|
4.3
|
Each Management Warranty set out in the first column of the table below shall be given subject to, and is qualified by, the matters Disclosed in the Data Room folders specified adjacent thereto (and the subfolders of such folders).
|
|
4.4
|
Each Warrantor’s liability for Claims shall be limited or excluded, as the case may be, as set out in Schedule 2.
|
|
4.5
|
No warranty, express or implied, is given by any Warrantor whatsoever in respect of any budget, forecast or other projection of any nature made or supplied by or on behalf of any Person.
|
|
4.6
|
The Buyer undertakes to each of the Warrantors, and to each of the other persons mentioned below, each of whom may enforce this Clause 4.6 subject to and in accordance with the Act not (except in the case of fraud or willful misconduct) to initiate or pursue (either directly or through any other person including without limitation any Acquired Company) proceedings of any kind against any present or former director, officer, employee or partner of any Acquired Company (other than any of the Warrantors (but then strictly in accordance with the terms of this Deed)) or the Shareholders (other than in accordance with the Offer
|
|
4.7
|
The Buyer shall ensure that the W&I Insurance Policy includes an express waiver of any rights of subrogation against any Warrantor (except in the case of fraud or willful misrepresentation by a Warrantor, in which case such waiver shall cease to apply in respect of the relevant fact, matter, or circumstance in respect of that Warrantor only).
|
|
4.8
|
Except in the case of fraud or willful misrepresentation by a Warrantor, the Buyer shall indemnify and hold harmless each Warrantor for, and will pay to such Warrantor on demand, on a dollar for dollar basis, the amount of any Damages arising from or in connection with any insurer’s right of subrogation with the W&I Insurance Policy.
|
|
5.
|
COMPLETION AND FIRST CLOSING DATE
|
|
5.1
|
The Buyer:
|
|
5.1.1
|
shall pay the consideration required to be paid to the Warrantors and the Other Shareholders pursuant to the terms of the Offer Document to the Receiving Agent on or prior to the First Closing Date (the “
First Closing Amount
”);
|
|
5.1.2
|
shall upon such payment provide notice and evidence to the Company of such payment; and
|
|
5.1.3
|
undertakes not, directly or indirectly, to withdraw, extract or cause to be repaid the First Closing Amount from the Receiving Agent, other than to settle the consideration amounts payable to the Warrantors and the Other Shareholders pursuant to the terms of the Offer Document.
|
|
5.2
|
On the First Closing Date:
|
|
5.2.1
|
the Company shall deliver to the Buyer or procure the delivery to the Buyer of:
|
|
(1)
|
a director resignation letter in the agreed form duly executed by each of Mark Farmer, Alex Ferrara, Laurence Garrett and Christopher Tottman (each, a “
Resigning Director
”); and
|
|
(2)
|
duly executed board resolutions of the Company accepting the resignation from the board of the Company of each of the Resigning Directors, pending the First Closing Date.
|
|
5.2.2
|
the Company shall procure that each applicable Acquired Company discharges all of its liabilities in respect of the SVB Bank Debt including releasing any existing security interests in connection with the SVB Bank Debt by way of a payment by
|
|
6.
|
POST COMPLETION UNDERTAKINGS
|
|
6.1
|
During the Restricted Period, each Warrantor shall not, directly or indirectly:
|
|
6.1.1
|
engage in or assist others in engaging in the Restricted Business;
|
|
6.1.2
|
have an interest in any Person that engages directly or indirectly in the Restricted Business in any capacity, including as a partner, shareholder, member, lender, investor, employee, director, manager, principal, agent, trustee or consultant; or
|
|
6.1.3
|
intentionally interfere with the business relationships (whether formed prior to or after the date of this Deed) between the Acquired Companies and the customers of the Acquired Companies.
|
|
6.2
|
During the Restricted Period, each Warrantor shall not directly or indirectly:
|
|
6.2.1
|
hire or solicit any Person who is an officer or employee of the Acquired Companies engaged in skilled or managerial work;
|
|
6.2.2
|
encourage any such Person to leave or terminate such employment; or
|
|
6.2.3
|
hire any such employee who has left or terminated such employment;
|
|
6.3
|
During the Restricted Period, each Warrantor shall not directly or indirectly, solicit or entice, or attempt to solicit or entice, any customer of the Acquired Companies, or potential customer of the Acquired Companies for the purposes of diverting their business or services from the Acquired Companies.
|
|
6.4
|
Each Warrantor acknowledges that a breach or threatened breach of this Clause 6 could give rise to irreparable harm to the Buyer, for which monetary damages would not be an adequate
|
|
6.5
|
Each Warrantor acknowledges that the restrictions contained in this Clause 6 are reasonable and necessary to protect the legitimate interests of the Buyer and constitute a material inducement to the Buyer to enter into this Deed and conduct the Offer.
|
|
6.6
|
In the event that any covenant contained in this Clause 6 should ever be adjudicated to exceed the time, geographic, product or service, or other limitations permitted by applicable Law in any jurisdiction, then any court is expressly empowered to reform such covenant, and such covenant shall be deemed reformed, in such jurisdiction to the maximum time, geographic, product or service, or other limitations permitted by applicable Law (and the Buyer and Warrantors shall negotiate in good faith to make such modification as is required to make the restriction valid and effective).
|
|
6.7
|
The covenants contained in this Clause 6 and each provision hereof are severable and distinct covenants and provisions. The invalidity or unenforceability of any such covenant or provision as written shall not invalidate or render unenforceable the remaining covenants or provisions hereof, and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such covenant or provision in any other jurisdiction.
|
|
6.8
|
The undertakings in this Clause 6 are intended for the benefit of the Buyer (including the Acquired Companies after Completion) and apply to actions carried out by a Warrantor in any capacity whatsoever (other than in the proper performance of such Warrantor’s duties as a director, officer or employee of any Acquired Company) and whether directly or indirectly, on his own, on behalf of any other Person, by any other Person on such Warrantor’s behalf or jointly with any other Person and whether as principal, shareholder, manager, employee, partner, director, investor, contractor, consultant, agent or otherwise.
|
|
6.9
|
Following the First Closing Date, the Buyer shall ensure that any indemnity and/or immunity provisions contained in the articles of association (or similar constitutional documents) of each Acquired Company of which a Resigning Director was a director immediately prior to the First Closing Date are not amended, repealed or modified in any manner that would affect adversely the rights of any Resigning Director and that the Resigning Directors retain the benefit of such indemnity and/or immunity provisions to the extent that the same are enforceable.
|
|
6.10
|
The Buyer shall, and shall procure that each Acquired Company shall, to the fullest extent permitted in accordance with applicable laws, waive, release and discharge each of the Resigning Directors from any and all claims, demands, proceedings, causes of action, orders, obligations and liabilities arising out of any event occurring on or before the First Closing
|
|
6.11
|
Following the First Closing Date, if any person alleges that any Resigning Director has breached the duty he or she owes or owed to any Acquired Company in his or her capacity as a director prior to the First Closing Date, the Buyer shall, and shall procure that each Acquired Company shall, in each case to the fullest extent permitted by law, vote in favour of a resolution ratifying any act and/or omission of such director which it is alleged constitutes a breach of duty.
|
|
7.
|
PRESERVATION OF INFORMATION
|
|
7.1
|
The Buyer shall, and following Completion shall cause the Acquired Companies to, until the sixth (6th) anniversary of the Completion Date, use reasonable endeavours to retain all books, records and other documents pertaining to the business of the Acquired Companies relating to periods prior to the Completion Date, and make the same available for inspection and copying by each Warrantor, Other Shareholder and their respective Affiliates and its and their officers, directors, employees or professional advisers, at the expense of the Warrantor or Other Shareholder (as applicable), during the normal business hours of the Buyer and the Acquired Companies upon reasonable request and upon reasonable notice, as the applicable Warrantor, Other Shareholder or their respective Affiliates may reasonably require:
|
|
(a)
|
to enable the relevant person to prepare their respective statutory or management accounts; or
|
|
(b)
|
for any other accounting purpose or other purpose relating to Taxes required by applicable law, regulation, governmental or regulatory authority or the rules of any stock exchange to which they are subject.
|
|
7.2
|
Each Warrantor shall until the sixth (6th) anniversary of the Completion Date use reasonable endeavours to retain all books, records and other documents of such Warrantor pertaining to the business of the Acquired Companies relating to periods prior to the Completion Date, and make the same available for inspection and copying by the Buyer or any of its Affiliates and its and their officers, directors, employees or professional advisers, at the expense of the Buyer, during the normal business hours of the Company upon reasonable request and upon reasonable notice, as the Buyer or its Affiliates may reasonably require:
|
|
(a)
|
to enable the relevant person to prepare their respective statutory or management accounts; or
|
|
(b)
|
for any other accounting purpose or other purpose relating to Taxes required by applicable law, regulation, governmental or regulatory authority or the rules of any stock exchange to which they are subject.
|
|
7.3
|
Any Party may refuse access under Clauses 7.1 and 7.2 to the extent that such access would in the opinion of such Party (acting reasonably) be contrary to any applicable Law or regulation. Clauses 7.1 and 7.2 shall not require any Party to carry out any act or omission or provide or otherwise give access to any information which may cause it to waive or result in the waiver of any legal privilege in any documentation or information subject to legal privilege.
|
|
8.
|
CONFIDENTIALITY
|
|
8.1
|
Subject to Clause 8.4, each Party:
|
|
8.1.1
|
shall treat as strictly confidential:
|
|
(1)
|
the provisions of the Disclosure Letter and the process of the negotiation of this Deed and the Disclosure Letter; and
|
|
(2)
|
in the case of the Warrantors, any information received by or held by the Warrantors or any of their Representatives in connection with the transaction contemplated by the Offer which relates to the Buyer or its Affiliates,
|
|
8.1.2
|
shall not, except with the prior written consent of the other Parties, make use of (save for the purposes of performing its obligations under this Deed) or disclose to any person (other than Representatives and providers of debt finance) any Confidential Information.
|
|
8.2
|
Each Party undertakes that it shall only disclose Confidential Information to Representatives and providers of debt finance for the purposes of the Offer where it is reasonably required for the purposes of performing its obligations under this Deed or the Offer Document and only where such recipients are informed of the confidential nature of the Confidential Information and the provisions of this Clause 8 and instructed to comply with this Clause 8 as if they were a party to it.
|
|
8.3
|
Subject to Clause 8.4, any announcement (including any communication made to the public, to any customers, suppliers or employees of any of the Acquired Companies) concerning the Offer shall be in a form approved in writing by the Buyer and the Warrantors’ Representative in advance of issue or in the agreed form.
|
|
8.4
|
Clauses 8.1.1, 8.1.2 and 8.3 shall not apply if and to the extent that the Party using or disclosing Confidential Information or making such announcement can demonstrate that:
|
|
8.4.1
|
such disclosure or announcement is required by the Offer Document, by Law or by any stock exchange or any supervisory, regulatory, governmental or anti-trust body (including any Tax Authority) having applicable jurisdiction; or
|
|
8.4.2
|
the Confidential Information concerned has come into the public domain other than through its fault (or that of its Representatives) or the fault of any person to whom such Confidential Information has been disclosed in accordance with this Clause 8.4.
|
|
8.5
|
The provisions of this Clause 8 shall survive termination of this Deed or Completion, as the case may be.
|
|
9.
|
GENERAL
|
|
9.1
|
A variation of this Deed is valid only if it is in writing and signed by or on behalf of each Party.
|
|
9.2
|
Any payment made by a Warrantor to the Buyer pursuant to this Deed shall, to the extent permitted by law, be treated by the Buyer and such Warrantor as a reduction of the consideration received by such Warrantor pursuant to the Offer.
|
|
9.3
|
Save as otherwise provided herein, any payment to be made by any Party shall be made in full without any set off, restriction, condition or deduction for or on account of any counterclaim.
|
|
9.4
|
All sums payable by any Party under this Deed shall be paid free and clear of all deduction, withholdings, set-offs or counterclaims, unless otherwise required by law. The Buyer hereby waives and relinquishes any right of set-off or counterclaim, deduction or retention which the Buyer might otherwise have in respect of any claim under or in relation to this Deed or out of any payments which the Buyer may be obliged to make (or procure to be made) to the Warrantors pursuant to this Deed, the Offer Document or otherwise.
|
|
9.5
|
The liability of each of the Warrantors under this Deed is several (and not joint or joint and several) and no Warrantor shall have any liability for any act or omission of any other Warrantor.
|
|
9.6
|
Other than as set out in Clauses 3.4, 4.6, 6.9, 6.10, 6.11, 7.1 and 7.2, a Person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the “
Act
”) to enforce any term of this Deed, but this does not affect any right or remedy of a third party which exists or is available apart from the Act.
|
|
9.7
|
Except as otherwise provided in this Deed, each Party shall pay its own costs and expenses in relation to the negotiation, preparation, and implementation of this Deed (and the documents referred to herein), including the fees and disbursements of their respective legal, accountancy and other advisers.
|
|
10.
|
ENTIRE AGREEMENT
|
|
10.1
|
This Deed, and the documents referred to in it, constitute the entire agreement among the Parties about the subject matter of this Deed and in relation to such subject matter, supersede any arrangements, understanding or previous agreement among the Parties and all earlier statements by any Party.
|
|
10.2
|
Each of the Parties acknowledges and agrees that, in entering into this Deed, it does not rely on, nor has been induced to enter into this Deed or the Offer, and will have no remedy (in equity or tort, under the Misrepresentation Act 1967 or in any other way) in respect of, any statement, representation or warranty (whether negligently or innocently made) of any person (whether a Party or not) made in connection with the Offer other than as expressly set out in this Deed. No Party shall have any claim for innocent or negligent misrepresentations based upon any statement in this Deed.
|
|
10.3
|
Nothing in this Deed shall have the effect of limiting or excluding any liability arising from fraud or fraudulent misrepresentation.
|
|
11.
|
ASSIGNMENT
|
|
11.1
|
Except as provided in this Clause 11, no Party may assign, transfer, charge or otherwise deal with all or any of its rights under this Deed, nor grant, declare, create or dispose of any right or interest in it. Any purported assignment in contravention of this Clause 11 shall be void.
|
|
11.2
|
Subject to Clause 11.3, the Buyer may assign, charge or transfer any of its rights or benefits under this Deed (whether in whole or in part) to:
|
|
11.2.1
|
an Affiliate of the Buyer,
provided
that if such assignee, chargee or transferee is to cease to be an Affiliate of the Buyer then prior to such cessation such assignee, chargee or transferee must re-assign, re-charge or re-transfer such rights and benefits to the Buyer or another continuing Affiliate of the Buyer, otherwise such rights and benefits will upon such cessation immediately lapse and be of no further effect; and
|
|
11.2.2
|
any lender (or any agent or trustee acting on its behalf) to the Buyer solely for purposes of financing the Offer (the “
Acquisition Facility
”),
provided
that such assignment, charge or transfer is only by way of and in order to provide security in respect of the borrowings of the Buyer under such Acquisition Facility,
|
|
11.3
|
As soon as practicable, but in any event within five (5) Business Days after any assignment in accordance with Clause 11.2, the Buyer shall give written notice of the assignment to the Warrantors, such notice to contain reasonable details of the assignment.
|
|
12.
|
NOTICES
|
|
12.1
|
All notices, requests, claims, demands and other communications under this Deed (a “
Notice
”) shall be in writing and will be delivered personally, sent by pre-paid recorded delivery or by email to the Parties at the following addresses (or at such other address for a Party as specified by like notice):
|
|
Dennis Fois
|
Guy Sochovsky
|
|
3561 Jackson St.
San Francisco CA 94118 United States E-mail: dennis.fois@newvoicemedia.com |
427 Riviera Circle
Larkspur CA 94939 United States E-mail: guy.sochovsky@newvoicemedia.com |
|
12.2
|
Unless there is evidence that it was received earlier, a Notice is deemed given if:
|
|
12.2.1
|
delivered personally, when left at the address referred to in Clause 12.1;
|
|
12.2.2
|
sent by mail, two Business Days after posting it;
|
|
12.2.3
|
sent by email, when the email is sent, provided that a copy of the Notice is sent by another method referred to in this Clause 12 within two Business Days of sending the email,
|
|
13.
|
SERVICE OF PROCESS
|
|
13.1
|
the Buyer irrevocably and unconditionally agrees to accept service of any proceedings commenced in accordance with Clause 12 if delivered by post or courier to its registered address; and
|
|
13.2
|
the Warrantors irrevocably and unconditionally agrees to accept service of any proceedings commenced in accordance with Clause 12 if delivered by post or courier to the Warrantor Representative at the address stated in Clause 12.
|
|
14.
|
INVALIDITY
|
|
14.1
|
If any provision of this Deed is held to be illegal, invalid or unenforceable, in whole or in part, the provision shall apply with whatever deletion or modification is necessary so that the provision is legal, valid and enforceable and gives effect to the commercial intent of the Parties. Subject to the previous sentence, the illegality, invalidity or unenforceability of any provision of this Deed shall not affect the validity or enforceability of any other provision of this Deed.
|
|
15.
|
COUNTERPARTS
|
|
16.
|
DELIVERY
|
|
17.
|
GOVERNING LAW AND JURISDICTION
|
|
17.1
|
This Deed and all non-contractual or other obligations arising out of or in connection with it are governed by English law.
|
|
17.2
|
The courts of England have exclusive jurisdiction to settle any dispute arising from or connected with this Deed (a “
Dispute
”) including a dispute regarding the existence, validity or termination of this Deed, relating to any non-contractual or other obligation arising out of or in connection with this Deed or the consequences of its nullity.
|
|
17.3
|
The Parties agree that the courts of England are the most appropriate and convenient courts to settle any Dispute and, accordingly, that they will not argue to the contrary.
|
|
17.4
|
The Parties agree that the documents which start any proceedings relating to a Dispute (“
Proceedings
”) and any other documents required to be served in relation to those Proceedings may be served in accordance with Clause 12. These documents may, however, be served in any other manner allowed by law. This Clause 17.4 applies to all Proceedings wherever started.
|
|
1.
|
AUTHORITY OF THE WARRANTORS
|
|
1.1
|
If a Warrantor is an entity, such Warrantor (i) is duly formed and organized, validly existing and in good standing under the Laws of its jurisdiction of organization and (ii) has full power and authority (x) to execute and deliver this Deed, (y) to carry out its obligations hereunder and (z) to consummate the transactions contemplated hereby.
|
|
1.2
|
If a Warrantor is an individual, such Warrantor has full legal capacity (i) to execute and deliver this Deed, (ii) to carry out such Warrantor’s obligations hereunder and (iii) to consummate the transactions contemplated hereby.
|
|
1.3
|
This Deed constitutes valid, legal and binding obligations on the Warrantor in accordance with its terms.
|
|
1.4
|
The execution and delivery by the Warrantor of this Deed, and compliance with its terms shall not breach or constitute a default:
|
|
1.4.1
|
under any agreement or instrument to which the Warrantor is a party or by which the Warrantor is bound; or
|
|
1.4.2
|
of any order, judgment, decree or other restriction applicable to the Warrantor.
|
|
2.
|
ORGANIZATION, SHARES AND SUBSIDIARIES
|
|
2.1
|
Organization
|
|
2.1.1
|
The Company has been duly formed and organized and is validly existing and in good standing under the laws of England and Wales.
|
|
2.1.2
|
Section 2.1.2 of the Disclosure Letter sets forth each jurisdiction in which the Company is licensed or qualified to do business and the Company is duly qualified to transact business in each jurisdiction where the character of its properties owned or held under lease or the nature of its activities makes such qualification necessary, except where the failure to be so
|
|
2.1.3
|
The Company has full corporate power and authority to own or lease and operate its properties and assets now owned, operated or leased by it and to carry on its business as it has been and is currently conducted by it.
|
|
2.1.4
|
The Governing Documents of the Company have been made available to the Buyer and are correct, complete and in full force and effect, and the Company is not in violation of any term thereof.
|
|
2.2
|
Shares
|
|
2.2.1
|
As at the date of this Deed, the issued share capital of the Company is set forth in
Section 2.2.1 of the Disclosure Letter
.
|
|
2.2.2
|
As at the date of this Deed, a true, complete and correct copy of the capitalization table of the Company which (i) includes a list of all issued Shares, all vested and unvested Company Stock Options and all warrants to subscribe for Shares; and (ii) identifies the legal owner of each of the foregoing Equity Interests, is set forth in the Disclosure Documents.
|
|
2.2.3
|
As at the date of this Deed, the Shares comprise the entire allotted and issued share capital of the Company, have been duly authorized, are validly issued, fully paid or credited as fully paid, and, as at the date of this Deed, are held of record by each Person as set forth in
Section 2.2.3 of the Disclosure Letter
.
|
|
2.2.4
|
The Warrantors are entitled to transfer the legal and beneficial title to their respective Shares to the Buyer free from all Encumbrances, without the consent of any other Person.
|
|
2.2.5
|
Save with respect to the Company Stock Option Plans, there are no outstanding Commitments of any kind relating to the Company.
|
|
2.2.6
|
There is no Encumbrance, and there is no agreement, arrangement or obligation to create or give an Encumbrance, in relation to any of the Shares, or any un-issued shares in the capital of the Company.
|
|
2.2.7
|
None of the Shares were issued in violation of any Contract or Commitment to which the Warrantors or the Company is a party or is subject to or in violation of any preemptive or similar rights of any Person.
|
|
2.2.8
|
There are no voting agreements, voting trusts, shareholder agreements, revocable or irrevocable proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Shares.
|
|
2.2.9
|
There are no voting agreements, voting trusts, shareholder agreements, revocable or irrevocable proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Shares, in each case to which the Company is a party that shall not terminate automatically at such time that the Company becomes a wholly-owned subsidiary of the Buyer.
|
|
2.2.10
|
There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any Equity Interests of the Company.
|
|
2.2.11
|
With respect to the Company Stock Options, (i) each grant of an option was duly authorized no later than the date on which the grant of such option was by its terms to be effective (the “
Grant Date
”) by all necessary corporate action, (ii) all options issued to U.S. taxpayers have an exercise price equal to no less than the fair market value of the underlying Shares on the Grant Date, as determined in accordance with Section 409A of the Code, (iii) each such grant was made in accordance with the terms of the Company Stock Option Plan and all applicable Laws, including valid exemptions from registration under the Securities Act and all other applicable securities laws, (iv) the Company Stock Option Plan is the only plan or program the Company maintains under which outstanding options to acquire Company Stock Options, stock appreciation rights or other compensatory equity-based awards have been or may be granted, (v) each award of Company Stock Options has been made using the standard form award agreement under the Company Stock Option Plan, a true, correct and complete copy of which has been made available to the Buyer and (vi) no Company Stock Options differ in any material respect from such form agreement.
|
|
2.3
|
Subsidiaries
|
|
2.3.1
|
Section 2.3.1 of the Disclosure Letter sets forth the names of the direct and indirect Subsidiaries of the Company, the jurisdictions in which each Subsidiary is organized and the equity ownership thereof. Other than the Company Subsidiaries, the Company does not own any Equity Interest in any Person.
|
|
2.3.2
|
Each Company Subsidiary has been duly formed and organized and is validly existing and in good standing under the Laws of the jurisdiction of its formation.
|
|
2.3.3
|
Each Company Subsidiary is duly qualified to transact business in each jurisdiction where the character of its properties owned or held under lease or the nature of its activities makes such qualification necessary, except where the failure to be so qualified or in good standing has not had and would not reasonably be expected to have a Material Adverse Effect.
|
|
2.3.4
|
Each Company Subsidiary has the full corporate power and authority to own or lease and operate its properties and assets now owned, operated or leased by it and to carry on its business as currently conducted by it.
|
|
2.3.5
|
The Company has made available to the Buyer copies of the Governing Documents of each Company Subsidiary and each Governing Document is in full force and effect, and no Company Subsidiary is in violation of any term thereof.
|
|
2.3.6
|
The Company holds all of the outstanding Equity Interests of the Company Subsidiaries, free and clear of any Encumbrances other than those imposed by applicable Laws.
|
|
2.3.7
|
All of the issued and outstanding Equity Interests of the Company Subsidiaries have been duly authorized, and are validly issued, fully paid or credited as fully paid.
|
|
2.3.8
|
There is no Encumbrance, and there is no agreement, arrangement or obligation to create or give an Encumbrance, in relation to any of the Equity Interests of the Company Subsidiaries, or any un-issued shares in the capital of the Company Subsidiaries.
|
|
2.3.9
|
There are no outstanding Commitments of any kind relating to any Company Subsidiary.
|
|
2.3.10
|
There are no voting agreements, voting trusts, shareholder agreements, revocable or irrevocable proxies or other agreements or understandings in effect with respect to the voting or transfer of any Equity Interests of the Company Subsidiaries.
|
|
2.3.11
|
There are no outstanding contractual obligations of the Company Subsidiaries to repurchase, redeem or otherwise acquire any Equity Interests of the Company Subsidiaries.
|
|
2.3.12
|
None of the Acquired Companies is, in relation to any company (other than a Subsidiary), a limited liability partnership or Societas Europaea registered in the UK, a registrable relevant legal entity within the meaning of section 790C of the CA 2006.
|
|
2.3.13
|
No warning notice or restrictions notice has been issued under Schedule 1B (Enforcement of disclosure requirements) of the CA 2006 in respect of any shares or voting rights in, or any right to appoint or remove any member of the board of directors of, any of the Acquired Companies.
|
|
3.
|
CONSENTS
|
|
3.1
|
A change of Control of the Acquired Companies does not and will not:
|
|
3.1.1
|
violate, conflict with or result in a default (whether after the giving of notice, lapse of time or both) under, give rise to a right of termination of, or require any notice or approval under, any Material Contract to which any Acquired Company is a party or by which any Acquired Company’s assets are bound;
|
|
3.1.2
|
conflict with, or result in any violation of, any provision of the Governing Documents of any Acquired Company;
|
|
3.1.3
|
violate or result in a violation of, or constitute a default under (whether after the giving of notice, lapse of time or both), any provision of any Law, or any Governmental Order of, or any restriction imposed by, any Governmental Body applicable to any Acquired Company;
|
|
3.1.4
|
require the consent, notice or approval by any Person under, any Contract to which any Acquired Company is a party or by which any Acquired Company is bound or to which any of their respective properties and assets are subject (including any Material Contract) or require the consent, notice or approval by any Person under, or result in a violation or breach of, any Permit affecting the properties, assets or business of the Acquired Companies; or
|
|
3.1.5
|
result in the creation or imposition of any Encumbrance other than Permitted Encumbrances on any properties or assets of the Acquired Companies, except, in the case of paragraphs 3.1.2 and 3.1.3 of this Schedule 1, for any such conflicts, defaults or violations that have not had, and would not reasonably be expected to have, a Material Adverse Effect.
|
|
3.2
|
No notice to, declaration or filing with, or consent or approval of any Governmental Body, is required by or with respect to the Acquired Companies purely as a result of the Offer (or the implementation thereof), and for the avoidance of doubt excluding any such declaration or filing with, or consent or approval of any Governmental Body which is required as a result of the identity or nature of the Buyer in any respect.
|
|
4.
|
ACCOUNTS
|
|
4.1
|
The Accounts are based on the books and records of the Acquired Companies and have been prepared and audited on a consistent basis in accordance with the Law and UK GAAP.
|
|
4.2
|
The Accounts show a true and fair view of the assets, liabilities, state of affairs and profits and losses of the Acquired Companies as a whole as at the Last Accounts Date.
|
|
4.3
|
The Acquired Companies have no material liabilities or commitments, (absolute or contingent, accrued or unaccrued, matured or unmatured) in each case that would be required to be reflected in the audited consolidated accounts of the Company for the relevant accounting period (“
Liabilities
”), except (i) those which are adequately reflected or reserved against in the Accounts, Locked Box Accounts or the Disclosure Letter, and (ii) those that
|
|
4.4
|
No Acquired Company is a party to or is liable under a guarantee, indemnity or other agreement to secure a financial obligation (except in the Ordinary Course of Business) with respect to the obligations of any Person (except for a Company Subsidiary).
|
|
5.
|
MANAGEMENT ACCOUNTS
|
|
6.
|
LOCKED BOX ACCOUNTS
|
|
7.
|
CONDUCT SINCE THE LOCKED BOX DATE
|
|
7.1.1
|
event, occurrence or development that has had a Material Adverse Effect;
|
|
7.1.2
|
amendment of the Governing Documents;
|
|
7.1.3
|
split, combination or reclassification of any shares of their respective Equity Interests;
|
|
7.1.4
|
any issuance, sale or other disposition of, or creation of any Encumbrance on, any of their respective Equity Interests, or grant of any options, warrants or other rights to purchase or obtain (including upon conversion, exchange or exercise) any of their respective Equity Interests;
|
|
7.1.5
|
change in any method of financial reporting, accounting or accounting practice of the Acquired Companies;
|
|
7.1.6
|
material change in the Acquired Companies’ cash management practices and its policies, practices and procedures with respect to collection of accounts receivable, establishment of reserves for uncollectible accounts, accrual of accounts receivable, inventory control, prepayment of expenses,
|
|
7.1.7
|
entry into any Contract that would constitute a Material Contract;
|
|
7.1.8
|
incurrence, assumption or guarantee of any Indebtedness except unsecured current obligations and liabilities incurred in the Ordinary Course of Business;
|
|
7.1.9
|
transfer, assignment, sale or other disposition of any of the assets shown or reflected in the Accounts other than in the Ordinary Course of Business;
|
|
7.1.10
|
any capital investment in, or any loan to, any other Person;
|
|
7.1.11
|
acceleration, termination, material modification to or cancellation of any Material Contract;
|
|
7.1.12
|
any capital expenditures in excess of One Hundred Thousand Dollars ($100,000) individually or Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate;
|
|
7.1.13
|
imposition of any Encumbrance upon any of the Acquired Companies properties (other than a Permitted Encumbrance), tangible or intangible assets (other than a Permitted Encumbrance), or Equity Interest;
|
|
7.1.14
|
(i) grant of any bonuses, whether monetary or otherwise, or increase in any wages, salary, severance, pension or other compensation or benefits in respect of the Acquired Companies’ current or former employees, officers, directors, independent contractors or consultants, other than as provided for in any written agreements or required by applicable Law, (ii) change in the terms of employment or status for any employee or any termination of any employee for whom the aggregate costs and expenses exceed Fifty Thousand Dollars ($50,000), or (iii) action to accelerate the vesting or payment of any compensation or benefit for any current or former employee, officer, director, independent contractor or consultant;
|
|
7.1.15
|
hiring or promoting any employee except in the Ordinary Course of Business;
|
|
7.1.16
|
adoption, modification or termination of any: (i) employment, severance, retention or other agreement with any current or former employee, officer, director, independent contractor or consultant, (ii) Benefit Plan or (iii) collective bargaining or other agreement with a Union, in each case whether written or oral;
|
|
7.1.17
|
any loan to (or forgiveness of any loan to), or entry into any other transaction with, any of their respective shareholders or current or former directors, officers and employees;
|
|
7.1.18
|
entry into a new line of business or abandonment or discontinuance of existing lines of business;
|
|
7.1.19
|
adoption of any plan of merger, consolidation, reorganization, liquidation or dissolution or filing of a petition in bankruptcy under any provisions of federal, state or non-U.S. bankruptcy Law or consent to the filing of any bankruptcy petition against it under any similar law;
|
|
7.1.20
|
acquisition by merger or consolidation with, or by purchase of substantially all of the assets or equity of, or by any other manner, any business or any Person or any division thereof;
|
|
7.1.21
|
action by or on behalf of the Acquired Companies to make, change or rescind any Tax election, amend, refile or otherwise revise any previously filed Tax Return, settle or compromise any claim, notice, audit report, assessment or other proceeding in respect of Taxes, consent to any extension or waiver of the statute of limitations period applicable to any Tax claim or assessment, make any change to (or make a request to any Tax Authority to change) any of its methods of Tax accounting, enter into or terminate any agreement with any Tax Authority, enter into a Tax allocation, sharing, indemnity or similar agreement (other than credit or other commercial agreements the primary purpose of which does not relate to Taxes), grant any power of attorney relating to Tax matters, or take any position on any Tax Return, take any action, omit to take any action or enter into any other transaction that would have the effect of increasing the Tax liability or reducing any Tax asset of the Acquired Companies or Buyer in respect of any post-completion tax period;
|
|
7.1.22
|
commencement, settlement, or offer or proposal to commence or settle (i) any Action involving or against the Acquired Companies, (ii) any Action with the Warrantors involving or against the Acquired Companies or (iii) any Action that relates to the transactions contemplated hereby;
|
|
7.1.23
|
any declaration or payment of dividends or distributions (including a distribution within the meaning of section 1000 of the CTA 2010) to any Person other than a Subsidiary except as provided in the Accounts; or
|
|
7.1.24
|
any Contract to do any of the foregoing, or any action or omission that would result in any of the foregoing.
|
|
8.
|
TAX
|
|
8.1
|
Each of the Acquired Companies (A) has properly completed and timely filed all Tax Returns required to be filed by it, and all such Tax Returns are true, correct and complete in all material respects and (B) has timely paid all Taxes due and owing by it (whether or not shown on any Tax Returns).
|
|
8.2
|
No deficiencies for any Tax have been threatened, claimed, proposed or assessed in each case against any of the Acquired Companies.
|
|
8.3
|
None of the Acquired Companies has received from any Tax Authority any written (A) notice indicating an intent to open an audit or enquiry, (B) request for information related to Tax matters, or (C) notice of deficiency or proposed adjustment of any amount of Tax. No Tax Return of any of the Acquired Companies is under audit by any Tax Authority and all past audits (if any) have been completed and fully resolved to the satisfaction of the applicable Tax Authority conducting such audit and all Taxes determined by such audit to be due from any of the Acquired Companies have been paid in full to the applicable Tax Authority. No claim has ever been made by a Tax Authority in a jurisdiction where any Acquired Company does not file a particular type of Tax Return or pay a particular type of Tax that such Acquired Company is or may be required to file such Tax Return or pay such Tax in that jurisdiction.
|
|
8.4
|
There are no Encumbrances for Taxes upon the assets of the Acquired Companies, except for Permitted Encumbrances. There is not in effect any waiver by any of the Acquired Companies of any statute of limitations with respect to any Taxes and no Acquired Company has agreed to any extension of time for filing any Tax Return that has not since been filed. None of the Acquired Companies has consented to extend the period in which any Tax may be assessed or collected by any Tax Authority which extension is still in effect.
|
|
8.5
|
None of the Acquired Companies will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Completion Date as a result of: (A) the application of Section 481 of the Code, (B) any “closing agreement,” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. Tax Law) executed on or prior to the Completion Date, (C) any “intercompany transaction” or any “excess loss account” (within the meaning of Treasury Regulations Sections 1.1502-13 and 1502-19, respectively) (or any corresponding or similar provisions of state, local or non-U.S. Tax Law) occurring or arising with respect to any transaction on or prior to the Completion Date, (D) any installment sale, open transaction or other transaction made on or prior to the Completion Date, or (E) any prepaid amount received on or prior to the Completion Date.
|
|
8.6
|
Each of the Acquired Companies has complied in all material respects with all applicable Laws relating to the payment, collection and withholding of Taxes (including withholding of Taxes pursuant to Sections 1441, 1442, 1445 and 1446 of the Code or any corresponding
|
|
8.7
|
No Acquired Company is a party to or bound by any Tax indemnity, Tax sharing or Tax allocation agreement, excluding any agreement entered into in the Ordinary Course of Business, the principal purpose of which is unrelated to Taxes.
|
|
8.8
|
None of the Acquired Companies is now, or has during the period of six years prior to the date of this Agreement been, a member of a consolidated, combined, unitary or aggregate group of which the Company was not the ultimate parent corporation. None of the Acquired Companies has any liability for Taxes of any Person (other than another Acquired Company) under Treasury Regulations Section 1.1502-6 (or any corresponding or similar provision of state, local or non-U.S. Tax Law), as a transferee or successor, by contract or otherwise.
|
|
8.9
|
None of the Acquired Companies has constituted within the two years prior to the date of this Deed either a “distributing corporation” or a “controlled corporation” in a distribution of stock intended to qualify in whole or in part for Tax-free treatment under Section 355 of the Code (or so much of Section 356 of the Code as relates to Section 355 of the Code).
|
|
8.10
|
None of the Acquired Companies is or has been a party to a transaction or contract that is in conflict with the Tax rules on transfer pricing in any relevant jurisdiction. All applicable transfer pricing rules have been complied with, and all documentation required by all relevant transfer pricing Laws has been timely prepared.
|
|
8.11
|
None of the Acquired Companies is or has been a party to any joint venture, partnership or other arrangement or contract that would likely be treated as a partnership for federal income Tax purposes. No entity classification election pursuant to Treasury Regulations Section 301.7701-3 has ever been filed with respect to any of the Acquired Companies.
|
|
8.12
|
None of the Acquired Companies is the beneficiary of any Tax exemption.
|
|
8.13
|
None of the Acquired Companies has a permanent establishment (within the meaning of an applicable Tax treaty) in any country other than the country in which it was formed. None of the Acquired Companies operates or conducts business through any branch in any country other than the country in which it was formed.
|
|
8.14
|
None of the Acquired Companies has ever requested or received a ruling from any Tax Authority or signed a closing or other agreement with any Tax Authority.
|
|
8.15
|
No amount payable as a result of or in connection with the consummation of the transaction contemplated hereby to any Person could be characterized as any “excess parachute payment” (as defined in Section 280G(b)(1) of the Code). There is no Benefit Plan by which any of the Acquired Companies are bound to compensate any employee of such Acquired Company or other service provider of such Acquired Company for excise Taxes paid pursuant to Section 409A or 4999 of the Code.
|
|
8.16
|
All Company Stock Options (whether current outstanding or not) issued to service providers based in the United States have an exercise price equal to no less than the fair market value of the underlying Shares on the grant date, as determined in accordance with Section 409A of the Code.
|
|
8.17
|
Every claim, election and disclaimer which has been taken into account for the purposes of the Accounts has been duly submitted by the applicable Acquired Company within the requisite periods and either has been accepted as valid or its validity has not been questioned or challenged by the relevant Tax Authority.
|
|
8.18
|
The Company is a close company as defined in s.439 CTA 2010 but has never been a close investment holding company as defined in s.34 CTA 2010 for financial years before the financial year commencing 1 April 2015.
|
|
8.19
|
The Company is registered as a taxable person for the purposes of VAT and has never been registered as a member of a group of companies under s.43 VATA nor applied to be treated as such a member.
|
|
9.
|
ASSETS
|
|
9.1
|
Each of the Acquired Companies owns or otherwise has the right to use each material asset used by it, in the conduct or operation of the Company Business as conducted or operated, and no such owned assets are subject to any Encumbrance (other than any Encumbrance which is to be discharged on or prior to Completion).
|
|
9.2
|
The Acquired Companies have title to, or rights to use, all material tangible assets used by the Acquired Companies to conduct the business of the Acquired Companies as currently conducted. All such tangible assets are adequate for the use to which they are being put and are in reasonable operating condition and repair.
|
|
9.3
|
None of the Affiliates of the Warrantors owns, holds, or controls any of the rights, property, or assets necessary to conduct the business of the Acquired Companies as currently conducted.
|
|
10.
|
INTELLECTUAL PROPERTY
|
|
10.1
|
Section 10.1 of the Disclosure Letter sets forth a complete and accurate list of all (i) Registered Company Intellectual Property Rights and (ii) unregistered Marks owned by each of the Acquired Companies, other than any such unregistered Marks that are neither material nor used in a material manner by any of the Acquired Companies. For each item of Registered Company Intellectual Property Rights, such document lists (A) the record owner of such item, and, if different, the legal owner and beneficial owner of such item, (B) whether such item is issued, registered or pending, (C) the jurisdiction in which such item is issued, registered or pending, (D) the issuance, registration or application date and number of such item, and (E) for each Domain Name registration, the applicable Domain Name registrar, the name of the registrant and the expiration date for the registration.
|
|
10.2
|
All necessary fees and filings with respect to any Registered Company Intellectual Property Rights (other than Registered Company Intellectual Property Rights which an Acquired Company has, in its reasonable business judgment, chosen to abandon) have been timely submitted to the relevant Governmental Body and Domain Name registrars to maintain such Registered Company Intellectual Property Rights. No issuance or registration obtained and no application filed by any of the Acquired Companies for any Intellectual Property Rights has been cancelled, abandoned, allowed to lapse or not renewed, except where such Acquired Company has, in its reasonable business judgment, decided to cancel, abandon, allow to lapse or not renew such issuance, registration or application.
|
|
10.3
|
The Acquired Companies are the sole and exclusive owner of all right, title and interest in and to (i) all Registered Company Intellectual Property Rights and (ii) all other Company Intellectual Property Rights and Company Technology owned or purported to be owned by any of the Acquired Companies (clauses (i) and (ii) collectively, the “
Owned Company IP
”), free and clear of all Encumbrances. All Company Intellectual Property Rights and Company Technology that are not Owned Company IP (“
Licensed IP
”) are duly licensed to the Acquired Companies. The Acquired Companies have continuing rights (including under any Contracts) to use, sell, license and otherwise exploit, as the case may be, all Licensed IP as the same are currently used, sold, licensed and otherwise exploited by the Acquired Companies.
|
|
10.4
|
All Owned Company IP is freely transferable and assignable or may be extended to the Buyer without restriction and without payment of any kind to the Warrantors or any other Person.
|
|
10.5
|
The Owned Company IP and the Licensed IP constitute all of the Intellectual Property Rights and Technology necessary and sufficient to enable the Acquired Companies to conduct the Company Business as currently conducted. The preceding sentence shall not constitute any representation or warranty regarding infringement, misappropriation or other violation of any Intellectual Property Rights of any Person.
|
|
10.6
|
To the Warrantors’ Knowledge, none of the Registered Company Intellectual Property Rights have been or are subject to any interference, derivation, reexamination (including ex parte
|
|
10.7
|
Section 10.7 of the Disclosure Letter sets forth a complete and accurate list of all Intellectual Property Licenses under which the licensed rights expressly include exclusive licenses to Patents and that are granted (i) from another Person to any of the Acquired Companies, and (ii) from any of the Acquired Companies to another Person.
|
|
10.8
|
To the Warrantors' Knowledge, neither the conduct of the Company Business nor any Company Offering (including the use, practice, offering, licensing, provision, sale, distribution or other exploitation of any Company Offering) (i) has been or is infringing, misappropriating (or resulting from the misappropriation of), diluting, using or disclosing without authorization, or otherwise violating any Intellectual Property Rights of any third Person, (ii) when conducted immediately following Completion in the same manner as conducted immediately prior to Completion, will infringe, misappropriate, dilute, use or disclose without authorization, or otherwise violate any Intellectual Property Rights of the Warrantors or any third Person; (iii) has been or is contributing to or inducing any infringement, misappropriation, or other violation of any Intellectual Property Rights of any third Person, (iv) when conducted immediately following Completion in the same manner as conducted immediately prior to Completion, will contribute to or induce any infringement, misappropriation, or other violation of any Intellectual Property Rights of the Warrantors or any third Person; or (v) has been or is constituting (or, when conducted immediately following Completion in the same manner as conducted immediately prior to Completion, will constitute) unfair competition or trade practices under the applicable Laws of any relevant jurisdiction.
|
|
10.9
|
None of the Acquired Companies has received any written notice, or, to the Warrantors’ Knowledge, any other notice, from any Person (i) alleging any infringement, misappropriation, misuse, dilution, violation, or unauthorized use or disclosure of any Intellectual Property Rights or Technology or unfair competition, (ii) inviting any of the Acquired Companies to consider the applicability of any Intellectual Property Rights to any Company Offerings or the conduct of the Company Business or (iii) challenging the ownership, use, validity or enforceability of any Owned Company IP, or Company Technology, nor, to the Warrantors’ Knowledge, is there any basis for any Person to make any such allegation, invitation, or challenge as set forth in the foregoing subschedules (i)-(iii).
|
|
10.10
|
To the Warrantors’ Knowledge, no Person is infringing, misappropriating, diluting or violating any Company Intellectual Property Rights, Company Technology owned by or exclusively licensed to any of the Acquired Companies, or Company Offering. None of the Acquired Companies has made any claim against any Person alleging any infringement, misappropriation, misuse, dilution or violation of any Company Intellectual Property Rights, Company Technology owned by or exclusively licensed to any of the Acquired Companies, or Company Offering.
|
|
10.11
|
Each of the Acquired Companies has taken commercially reasonable measures to protect all Proprietary Information of the Acquired Companies and all Proprietary Information of any other Person in any of the Acquired Companies’ possession or control, or to which any of the Acquired Companies has access, with respect to which any of the Acquired Companies has a confidentiality obligation. No such Proprietary Information has been authorized to be disclosed, or, to the Warrantors’ Knowledge, has been actually disclosed, to any Person other than pursuant to a written confidentiality Contract restricting the disclosure and use of such Proprietary Information. Each current and former employee and consultant of any of the Acquired Companies that has been involved in the authorship, invention, creation, conception or other development of any Owned Company IP has entered into a written non-disclosure and invention assignment Contract with such Acquired Company that assigns to such Acquired Company all Intellectual Property Rights and Technology authored, invented, created or otherwise developed by such employee or consultant in the scope of his, her or its employment or engagement with such Acquired Company, save where ownership of such Intellectual Property Rights automatically vests in an Acquired Company upon creation by operation of applicable Law (an “
Invention Assignment Agreement
”). No current or former employee or consultant of any of the Acquired Companies has (i) (having been asked to do so) failed to affirmatively indicate that he, she or it has no Technology (and no Intellectual Property Rights in or to any Technology) that is excluded from his, her or its assignment of inventions pursuant to such Person’s Invention Assignment Agreement, or (ii) alleged to any of the Acquired Companies or, to the Knowledge of the Warrantors, any other Person, ownership or other exclusive rights by such employee or consultant in any Intellectual Property authored, invented, created, conceived or otherwise developed by such employee or consultant in the scope of his, her or its employment or engagement with such Acquired Company, using any of the applicable Acquired Company’s Intellectual Property Rights or Technology, or that is otherwise purportedly within the scope of his, her or its assignment of inventions pursuant to such Person’s Invention Assignment Agreement.
|
|
10.12
|
Section 10.12 of the Disclosure Letter sets forth an accurate and complete list of all material third party Software (other than Open Source Software disclosed in Section 10.13 of the Disclosure Letter) that is (i) incorporated or embedded in or bundled with any Company Software or (ii) except for Software licensed under Non-Negotiated Vendor Contracts, otherwise used by any of the Acquired Companies in the Company Business. None of the source code for any Company Software has been licensed or provided by any Acquired Company to, or, to the Warrantors’ Knowledge, used or accessed by, any Person other than employees, consultants and contractors of the Acquired Companies who have entered into written confidentiality obligations with respect to such source code. None of the Acquired Companies is a party to any source code escrow Contract or any other Contract (or a party to any Contract obligating any of the Acquired Companies to enter into a source code escrow Contract or other Contract) requiring the deposit of any source code for any Company Software.
|
|
10.13
|
Section 10.13 of the Disclosure Letter sets forth an accurate and complete list of all Open Source Software that is or has been included, incorporated or embedded in, combined or distributed with, or used in the delivery or provision of any Company Software or any
|
|
10.14
|
No Open Source Software is or has been included, incorporated or embedded in, combined or distributed with or used in the delivery or provision of any Company Software or any Company Offering, in each case, in a manner that subjects any Company Software to any Copyleft License or that requires any of the Acquired Companies to grant any Intellectual Property License with respect to their Patents.
|
|
10.15
|
To the Warrantors’ Knowledge, the Company Software and Company Offerings are free from any material defect or bug, or programming, design or documentation error. To the Warrantors’ Knowledge, none of the Company Software or Company Offerings constitutes or contains any Contaminants. Except in accordance with the applicable Company Privacy Policies and Laws, none of the Company Software or the Company Offerings (i) sends information of a user to another Person without the user’s consent, (ii) monitors or records a user’s actions without such user’s knowledge and, to the extent required by applicable Law, consent, or (iii) employs a user’s Internet connection without such user’s knowledge and, to the extent required by applicable Law, consent, to gather or transmit information regarding such user or such user’s behavior.
|
|
10.16
|
No government funding and no facilities of any university, college, other educational institution or research center were used by the Acquired Companies in the development of any Owned Company IP, nor does any Governmental Body or any university, college, other educational institution, or research center own, have any other rights in or to (including through any Intellectual Property License), or have any option to obtain any rights in or to, any Owned Company IP.
|
|
10.17
|
The Offer will not, pursuant to any Contract to which any of the Acquired Companies is a party or otherwise bound, result (or purport to result) in the transfer or grant by any of the Acquired Companies or the Buyer or any of its Affiliates to any Person of any ownership interest or Intellectual Property License with respect to any Company Intellectual Property Rights or Company Technology or any Intellectual Property Rights or Technology of the Buyer or any of its Affiliates.
|
|
11.
|
IT SYSTEMS
|
|
11.1
|
The IT Systems are adequate and sufficient (including with respect to working condition and capacity) to conduct the Company Business as currently conducted.
|
|
11.2
|
Each of the Acquired Companies (i) has taken reasonable measures to preserve and maintain the performance, security and integrity of the IT Systems (and all Software, information or data stored on any IT Systems) and (ii) maintains reasonable (taking into account, to the extent applicable, the cloud-based nature of the Acquired Companies’ products and services) documentation regarding all IT Systems, their methods of operation and their support and maintenance.
|
|
11.3
|
During the twelve month period prior to the date hereof, (A) there has been no failure with respect to any IT Systems that has had a material effect on the operations of any of the Acquired Companies and (B) to the Knowledge of the Warrantors, there has been no unauthorized access to or use of any IT Systems (or any Software, information or data stored on any IT Systems).
|
|
11.4
|
Immediately following Completion, the Acquired Companies shall have and be permitted to exercise the same rights (whether ownership, license or otherwise) with respect to the IT Systems as the Acquired Companies would have had and been able to exercise had this Deed, and such other agreements, documents and instruments to be executed and delivered after the date hereof, not been entered into and the transactions contemplated by this Deed and the Offer not occurred, without the payment of any additional amounts or consideration other than ongoing fees, royalties or payments which the Acquired Companies would otherwise have been required to pay.
|
|
12.
|
DATA PROTECTION
|
|
12.1
|
Each of the Acquired Companies maintains a policy that governs its collection, use, storage, retention, disclosure and disposal of Personal Information (each, a “
Privacy Policy
”). Each of the Acquired Companies’ practices conform in all material respects to the applicable Privacy Policy. Each of the Acquired Companies has during the five years prior to the date of this Agreement complied in all material respects with all applicable Laws (including the Data Protection Act 1998, the General Data Protection Regulation (EU) 2016/679, the Data Protection Act 2018, the Privacy and Electronic Communications (EC Directive) Regulations 2003, Part I of the Regulation of Investigatory Powers Act 2000) relating to: (i) the privacy of users of each of the Acquired Companies’ websites, mobile applications, and other Company Offerings; (ii) the collection, compilation, use (including, without limitation, for communications and direct marketing purposes), storage, processing, retention, safeguarding, transfer (including cross-border transfer), disclosure, and disposal of any Personal Information by or on behalf of any of the Acquired Companies; and (iii) the Payment Card Industry Data Security Standard (“
PCI DSS
”) with respect to any payment card data that the Acquired Company has collected or processed. To the Warrantors' Knowledge, any third party that processes payment card data on behalf of an Acquired Company complies and at all times has complied with the PCI DSS. At all times since inception, each of the Acquired Companies has provided notice of its applicable Privacy Policy on all of its websites and mobile applications where required by applicable Laws at such time. These notices and all materials distributed or marketed by, and to the Warrantors' Knowledge, on behalf of the Acquired Companies to users or customers (i) are materially in compliance with all applicable Laws and (ii) do not contain any material omissions and are not misleading or deceptive.
|
|
12.2
|
The Acquired Companies have during the five years prior to the date of this Agreement implemented and maintained a written security plan which implements and monitors commercially reasonable administrative, technical, and physical safeguards designed to ensure that Personal Information, intellectual property that derives its value from not being
|
|
12.3
|
No Person has, to the Warrantors' Knowledge, made any written claim or commenced any claim or investigation with respect to an Acquired Company’s compliance with applicable Laws relating to data privacy or data security.
|
|
13.
|
ENVIRONMENTAL MATTERS
|
|
14.
|
INSURANCE
|
|
14.1
|
The Buyer has been provided with a list of the material insurance policies held by, or for the benefit of, the Acquired Companies (the “
Insurance Policies
”).
|
|
14.2
|
Each Insurance Policy is in full force and effect as of the date hereof and all premiums have been paid in full.
|
|
14.3
|
As of the date hereof, no notice of cancellation, premium increase, alteration of coverage or termination has been received by the Acquired Companies with respect to any such Insurance Policy.
|
|
14.4
|
There are no claims related to the business of the Acquired Companies pending under any Insurance Policies as to which coverage has been questioned, denied or disputed or in respect of which there is an outstanding reservation of rights.
|
|
14.5
|
The Acquired Companies are not in default under, or have otherwise failed to comply with, in each case in any material respect, any provision contained in any Insurance Policy.
|
|
14.6
|
The Insurance Policies are sufficient for compliance with all applicable Laws and Contracts to which the Acquired Companies are a party or by which they are bound.
|
|
15.
|
MATERIAL CONTRACTS
|
|
15.1
|
No
Acquired Company is party to a Contract which:
|
|
15.1.1
|
is with a Material Client as a counterparty or is a customer contract which cannot be cancelled by the applicable Acquired Company without penalty or without more than three months’ notice;
|
|
15.1.2
|
is a partnership agreement or joint venture Contract pursuant to which an Acquired Company has an obligation to make an investment in or loan to any Person or that involves a sharing of revenues, profits, losses, costs or liabilities by an Acquired Company with any Person (other than the Company);
|
|
15.1.3
|
requires any Acquired Company to purchase its total requirements of any product or service from a third party or that contain “take or pay” provisions;
|
|
15.1.4
|
provides for the assumption of any Tax or environmental Liability of, any Person other than an Acquired Company;
|
|
15.1.5
|
establishes a contractual relationship between any Acquired Company and any worker, independent contractors or consultants (or similar arrangements) providing for fixed compensation in excess of Two Hundred Fifty One Thousand Dollars ($251,000) per annum other than such employment agreements or Contracts which are terminable without cost or liability to the Acquired Companies;
|
|
15.1.6
|
is a collective bargaining agreement or Contract with any Union to which any Acquired Company is a party;
|
|
15.1.7
|
other than in the Ordinary Course of Business, any Contract (excluding for the avoidance of doubt any contract of employment with any employee, or former employee or consultant) that (i) provides for the authorship, invention, creation, conception or other development of any Technology or Intellectual Property Rights (A) by any of the Acquired Companies for any other Person or (B) for any of the
|
|
15.1.8
|
is a Contract under which any Acquired Company (A) grants any exclusive rights, noncompetition rights, rights of first refusal, rights of first negotiation or most-favored customer rights, or (B) limits or purports to limit the ability of the Acquired Companies to compete in any line of business or with any Person or in any geographic area or during any period of time, time, (C) contains “clawback” or similar undertakings by the Acquired Companies requiring the reimbursement or refund of any fees, (D) contains waivers of fees or other expenses, (E) contains “key person” covenants, undertakings or notice or termination provisions or (F) contains performance-based fee or allocation provisions;
|
|
15.1.9
|
any Contract that following Completion would or would purport to require Buyer or any of its Affiliates (other than the Acquired Companies) to (i) grant any Intellectual Property License, (ii) assign or transfer to any Person any Company Owned IP, or (iii) subject any Company Owned IP to any Encumbrance;
|
|
15.1.10
|
is a Related Party Contracts which are not on arm's length terms;
|
|
15.1.11
|
all franchise, agency, commission and/or revenue share arrangements with third parties, sales promotion, market research, marketing consulting and advertising Contracts to which the Acquired Companies are a party;
|
|
15.1.12
|
relates to the sale of any of the assets of an Acquired Company within the 12 months prior to Completion, other than any such sale in the Ordinary Course of Business or the disposition or sale of obsolete assets or assets with de minimis or no book value;
|
|
15.1.13
|
relating to the acquisition by an Acquired Company of any operating business; or the assets constituting substantially all of any operating business; or Equity Interests of any other Person, other than agreements entered into in the Ordinary Course of Business for the acquisition of goods and services and confidentiality agreements;
|
|
15.1.14
|
is with any Governmental Body;
|
|
15.1.15
|
any Contracts relating to Indebtedness (including guarantees) of the Acquired Companies, any currency exchange, commodities or other hedging arrangement
|
|
15.1.16
|
contains provisions requiring future contingent or non-contingent “earnout” or similar payments to be made by any Acquired Company;
|
|
15.1.17
|
any Contract providing for future payments or the acceleration or vesting of payments that are conditioned, in whole or in part, on a change in control of any Acquired Company;
|
|
15.1.18
|
an Acquired Company has made advances or loans to any other Person, other than advances made to any employee of such Acquired Company in the Ordinary Course of Business; and
|
|
15.1.19
|
is for the supply of goods and/or services by or to any of the Acquired Companies on terms under which retrospective or future discounts, price reductions or other financial incentives are given.
|
|
15.2
|
Each of the contracts referred to in paragraph 15.1 of this Schedule 1 to which an Acquired Company is a party and each of the contracts between an Acquired Company and a Material Client or Material Supplier (“
Material Contract
”) is the legal, valid and binding obligation of the applicable Acquired Company, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors’ rights generally and by general equitable principles (regardless of whether enforcement is sought in a proceeding at law or in equity).
|
|
15.3
|
Each of the Material Contracts is in full force and effect, and the applicable Acquired Company is not and, to the Knowledge of the Warrantors, no other party to any such agreement is, in material default under any such agreement.
|
|
15.4
|
To the Warrantors’ Knowledge, no event or circumstance has occurred that, with notice or lapse of time or both, would constitute an event of default under any Material Contract or result in a termination thereof or would cause or permit the acceleration or other changes of any right or obligation or the loss of any benefit thereunder.
|
|
15.5
|
Complete and correct copies of each Material Contract (including all modifications, amendments and supplements thereto and waivers thereunder) have been made available to the Buyer.
|
|
15.6
|
No party with whom an Acquired Company has entered into a Material Contract has within the twelve (12) months immediately preceding the date of this Deed given notice in writing to such Acquired Company of its intention to terminate such Material Contract.
|
|
15.7
|
No Acquired Company is a party to any Contract having an annual value of not less than Two Hundred Fifty Thousand Dollars ($250,000), which in accordance with its terms may
|
|
16.
|
KEY RELATIONSHIPS
|
|
16.1
|
Section 16.1 of the Disclosure Letter sets forth a list of each of the top 30 customers of the Acquired Companies by annual recurring revenue (as calculated in August 2018) (“
Material Client
”). As of the date of this Deed, none of the Acquired Companies has received any written notice from any Material Clients that such Material Client has ceased to use, or intends to cease to use the respective services of the Acquired Companies after Completion or to otherwise terminate or materially (in the context of the relevant Material Client relationship) reduce or modify their relationship with any Acquired Company (whether related to payment, price or otherwise).
|
|
16.2
|
Section 16.2 of the Disclosure Letter sets forth a list of those suppliers of the Acquired Companies which, in the Warrantors’ reasonable opinion, are key to the service offerings of the Acquired Companies (“
Material Supplier
”). During the previous twelve (12) months, none of the Acquired Companies has received any written notice that any of their respective Material Suppliers has ceased, or intends to cease, to supply goods or services to any Acquired Company or to otherwise terminate or materially (in the context of the relevant Material Supplier relationship) reduce their relationship with any Acquired Company.
|
|
17.
|
RELATED PARTY TRANSACTIONS
|
|
18.
|
EMPLOYEES
|
|
18.1
|
Each Acquired Company is in compliance with all Laws applicable to them relating to the employment of labor and employment practices, including all applicable Laws relating to labor relations, fair employment practices, employment discrimination, harassment, retaliation, reasonable accommodation, disability rights or benefits, immigration, including the Immigration Reform and Control Act, wages, hours, overtime compensation, holiday pay, sick pay, wage statements, payment and required publication of wages equitably based on gender, race, and ethnicity, working during rest days, child labor, hiring, promotion and termination of employees, worker classification (including the proper classification of
|
|
18.2
|
Section 18.2 of the Disclosure Letter sets forth a true, correct and complete list (anonymized in so far as necessary to comply with applicable data protection laws) of all employees, workers, independent contractors, and other non-employee service providers currently performing services for each Acquired Company, and information indicating whether the Person is an employee, worker, consultant or independent contractor and, as applicable, each Person’s (i) job title, (ii) location, (iii) commencement date of service with the Acquired Company, (iv) full-time or part-time classification, (v) for U.S. based individuals, exempt or non-exempt classification, (vi) hours of work per week (for all non U.S. based individuals and all US based non-exempt and part time employees), (vii) base compensation and benefits, (viii) bonus and commission eligibility, (ix)
confirmation of right to work, and (x) the length of notice necessary to terminate employment or engagement or, if a fixed term, the expiry date of that fixed term and details of any previous renewals.
|
|
18.3
|
Complete and correct copies of (i) the terms of employment or engagement applicable to those employees, independent contractors or consultants of any Acquired Company whose base salary or compensation exceeds Two Hundred Fifty One Thousand Dollars ($251,000), (ii) the standard terms and conditions of employment utilized by any Acquired Company for employees; and (iii) the staff handbook(s) and any other material staff policies or procedures applicable to employees of the Acquired Companies have been made available to the Buyer (anonymized in so far as necessary to comply with applicable data protection laws).
|
|
18.4
|
Within the past three (3) years, there have been no pending or, to the Warrantors’ Knowledge, threatened labor or employment disputes brought or filed by any Person or Governmental Body in connection with the employment of any current or former applicant, employee, worker, consultant, or independent contractor of any Acquired Company, including any claims alleging unlawful harassment, employment discrimination (including discrimination based upon sex, gender, gender identity, gender expression, race, citizenship, disability, pregnancy, religion, religious creed, national origin, age, sexual orientation, whistleblowing or any other characteristic protected by applicable Law), unfair labor practices, unpaid wages, unlawful wage or immigration practices, wrongful termination, or unlawful Tax withholding practices regarding the Acquired Companies (or their representatives) any of which could reasonably be expected to result in a material liability.
|
|
18.5
|
To the Warrantors’ Knowledge, none of the Acquired Companies’ employees are subject to any non-compete, non-solicitation, non-disclosure, confidentiality, employment, consulting or similar contracts in conflict with the business of any Acquired Company. No Acquired Company has received any written notice alleging that any violation of any such contracts has occurred.
|
|
18.6
|
Within the past three (3) years, no Acquired Company has (i) in respect of US-based individuals implemented any “mass layoff” or “plant closing” as those terms are defined in
|
|
18.7
|
No current director, officer, employee, worker or independent contractor employed or engaged by any Acquired Company has given or received notice terminating his employment or engagement, and Completion will not entitle any such director, officer, employee, worker or independent contractor to terminate his employment or engagement or trigger any entitlement to a severance payment or liquidated damages.
|
|
18.8
|
No Acquired Company is or has at any time been a party to or otherwise bound by any collective bargaining agreement or other agreement with a Union. Within the past three (3) years no Acquired Company has been subject to any demand, petition or representation proceeding seeking to compel, require or demand it to bargain with any Union nor is there pending or, to the Warrantors’ Knowledge, threatened in writing, any labor strike, walkout, work stoppage, slow-down or lockout involving an Acquired Company.
|
|
18.9
|
Within the past five (5) years, no Acquired Company has at any time been a party to a relevant transfer for the purposes of any national law under the EU Transfer of Undertakings Directive 2001/23/EC (including the Transfer of Undertakings (Protection of Employment) Regulations 2006) and no such transfer is proposed by any Acquired Company.
|
|
19.
|
EMPLOYEE BENEFIT PLANS
|
|
19.1
|
Section 19.1 of the Disclosure Letter sets forth each US Benefit Plan.
|
|
19.2
|
Section 19.2 of the Disclosure Letter sets forth each Non-US Benefit Plan.
|
|
19.3
|
None of the Acquired Companies or any of their Affiliates intends to or has committed to establish or enter into any new Benefit Plan, or to modify or terminate any Benefit Plan (except to conform any such Benefit Plan to the requirements of any Law, in each case as previously disclosed to the Buyer in writing or as required by this Deed). None of the US Benefit Plans provides for post‑employment life or health insurance benefits for any participant or any beneficiary of a participant, except as may be required under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (or similar state Law).
|
|
19.4
|
The Company has made available to the Buyer, to the extent applicable: (i) correct and complete copies of each material Benefit Plan, including all amendments thereto, and all related trust documents, (ii) the three most recent annual reports (Form Series 5500 and all schedules and financial statements attached thereto), if any, required under ERISA or the Code in connection with each US Benefit Plan, (iii) the most recent summary plan
|
|
19.5
|
None of the Acquired Companies or any of their current or former ERISA Affiliates has in the six years prior to the date of this Agreement maintained, established, sponsored, participated in, or contributed to (or had an obligation to sponsor or contribute to) any: (i) pension plan subject to Title IV of ERISA, (ii) a “multiemployer plan” within the meaning of Section (3)(37) of ERISA, (iii) a “multiple employer plan” as defined in Section 413(c) of the Code, (iv) a plan subject to the minimum funding standards of Section 412 of the Code or Section 302 of ERISA, (v) a “multiple employer welfare arrangement” within the meaning of Section 3(40) of ERISA, (vi) a funded welfare plan within the meaning of Section 419 of the Code, or (vii) a plan maintained in connection with any trust described in Section 501(c)(9) of the Code.
|
|
19.6
|
Each Benefit Plan has been established, administered and maintained in all material respects in accordance with applicable Laws, including ERISA and the Code. Each US Benefit Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination or opinion letter from the IRS regarding its qualification thereunder, or may rely on an opinion letter issued by the IRS with respect to a prototype plan adopted in accordance with the requirements for such reliance, or has time remaining for application to the IRS for a determination of the qualified status of such Benefit Plan for any period for which such Benefit Plan would not otherwise be covered by an IRS determination and, to the Knowledge of the Warrantors, no event or omission has occurred that would cause any Benefit Plan to lose such qualification.
|
|
19.7
|
No “prohibited transaction,” within the meaning of Section 4975 of the Code or Sections 406 and 407 of ERISA, and not otherwise exempt under Section 408 of ERISA, has occurred or could reasonably be expected to occur with respect to any US Benefit Plan. There is no Action pending, or, to the Knowledge of the Warrantors, threatened (other than routine claims for benefits), against any Benefit Plan or against the assets of any Benefit Plan that could reasonably be expected to result in a material liability.
|
|
19.8
|
There is no Action pending or, to the Knowledge of the Warrantors, threatened by the IRS, U.S. Department of Labor, or any other Governmental Body with respect to any Benefit Plan. None of the Acquired Companies or any ERISA Affiliate has ever incurred any penalty or Tax with respect to any US Benefit Plan under Section 502(i) of ERISA or Sections 4975 through 4980 of the Code.
|
|
19.9
|
Each Non-U.S. Benefit Plan and related trust is, and has been operated in material compliance with the laws of the applicable country, its terms, and the terms of any collective bargaining, collective labor or works council agreements. Each Non-U.S. Benefit Plan which, under
|
|
19.10
|
Except as expressly contemplated by this Deed, neither the execution and delivery of this Deed by the Company nor the consummation of the transactions contemplated hereby will (i) result in any payment becoming due to any employee of any Acquired Company, (ii) increase any benefits otherwise payable under any Benefit Plan or (iii) result in the acceleration of the time of payment or vesting of any such benefits under any such plan.
|
|
19.11
|
There have been no (i) disqualifying events in respect of EMI Options under Section 534 of ITEPA 2003, (ii) material amendments to any of the terms of any EMI Options, or (iii) any withdrawal of HM Revenue & Customs’ approval before 6 April 2014 of any EMI Options.
|
|
19.12
|
The Warrantors are not aware of (i) any failure to notify the grant of any EMI Options to HM Revenue & Customs within the required time limit under paragraph 44 of Schedule 5 of ITEPA 2003, or (ii) any dispute (or potential dispute) with HM Revenue & Customs as to whether any EMI Options are qualifying options for the purpose of paragraph 1(2) of schedule 5 of ITEPA 2003.
|
|
19.13
|
No employment-related securities (as defined in Sections 420 and 421B(8) of ITEPA 2003), including, without limitation, any shares acquired under section 205A of the Employment Rights Act 2003, have been issued or transferred and there are no agreements, schemes or promises to make any such issues or transfers (i) by any Acquired Company, (ii) under any arrangement established by any Acquired Company or (iii) by a shareholder of any Acquired Company (or under arrangements established by such a person) to any current, former or proposed employees or directors of any Acquired Company (or to associates of such employees or directors).
|
|
19.14
|
For any restricted securities (as defined in Section 423 of ITEPA 2003) acquired by any current employees or directors of any Acquired Company (or any nominees or associates of such employees or directors) a joint election to fully disapply Chapter 2 of Part 7 of ITEPA 2003 has been made under Section 431(1) of ITEPA 2003 and all such joint elections have been properly made using forms approved by HM Revenue & Customs and within the applicable time limits.
|
|
19.15
|
There are no other shares, securities or interests in them held by any or for any current employee or director of any Acquired Company (or any nominees or associates of such employees or directors), including, without limitation, any shares acquired under section 205A of the Employment Rights Act 2003, which (i) do not fall within this paragraph 19 of this Schedule 1 of this Deed, and (ii) may give rise to a liability of any Acquired Company to account for PAYE, income tax or national insurance contributions (or equivalent liabilities in another jurisdiction).
|
|
19.16
|
No loans have been made to any current, former or proposed employees or directors of any Acquired Company (or to any nominees or associates of such employees or directors) which were made or arranged by any Acquired Company or any employee benefit trust or similar arrangement established by any Acquired Company.
|
|
19.17
|
All reasonably foreseeable liabilities of any Acquired Company to account for PAYE or employee national insurance contributions (or equivalent liabilities in other jurisdictions) in connection with any securities, options, loans, employee benefit trust or similar arrangement are covered by enforceable contractual arrangements for those liabilities to be met in full by the relevant employee or director or some other person.
|
|
19.18
|
Section 19.18 of the Disclosure Letter contains details of all (i) agreements and joint elections made by the Company or any Subsidiary with any current employees or directors (or any nominees or associates of such employees or directors) for the reimbursement or transfer of employer national insurance contributions (or any similar liability in another jurisdiction), (ii) joint elections in respect of restricted securities made by the Company or any Subsidiary with any current employees or directors (or any nominees or associates of such employees or directors) under Chapter 2 of Part 7 of ITEPA 2003, and (iii) valuations of securities prepared in respect of any securities or options within 19.11 of this paragraph 19 of this Schedule 1 of this Deed and any agreements concerning such valuations reached with HM Revenue & Customs Shares and Assets Valuation.
|
|
20.
|
PENSIONS
|
|
20.1
|
Other than the Defined Contribution Scheme, there is no scheme or arrangement in relation to which the Acquired Companies have incurred or may incur a legal obligation to make payments for or in relation to the provision of benefits on death or retirement in respect of or by reference to any employee or former employee, or any current or former director of the Acquired Companies and no proposal or announcement has been made by the Acquired Companies to any employee about the introduction, continuance, increase or improvement of, or payment of a contribution towards any such scheme, agreement, arrangement or practice.
|
|
20.2
|
Copies of documents containing details which are at least sufficient to enable the Buyer to form a fair and accurate assessment of the Defined Contribution Scheme have been Disclosed.
|
|
20.3
|
The Defined Contribution Scheme only provides benefits that are money purchase benefits within the meaning of section 181(1) of the Pension Schemes Act 1993.
|
|
20.4
|
No Acquired Company has, in relation to the Defined Contribution Scheme, received any written notice that it is in breach of or applicable laws (including without limitation sex and other discrimination laws and equal pay laws) nor has any Acquired Company received any notification that any such notice is threatened to be issued.
|
|
20.5
|
There has been disclosed in relation to the Defined Contribution Scheme full details of the eligibility, employer and employee contributions for employees of the Acquired Companies.
|
|
20.6
|
No contributions payable by the Acquired Companies to the Defined Contribution Scheme have fallen due but remain unpaid.
|
|
20.7
|
No Acquired Company nor to the Warrantors' Knowledge any connected or associated person participates or has in the last six years participated in any pension scheme to which the provisions of sections 38 to 51 of the Pensions Act 2004 apply.
|
|
20.8
|
No current employee of the Acquired Companies is employed by the Acquired Companies as a result of a "relevant transfer" (for the purposes of the Transfer of Undertakings (Protection of Employment) Regulations 1981 or 2006 as applicable) that occurred on or after 1 May 1982 where prior to that transfer that employee enjoyed rights under a pension arrangement that may be payable other than on old age, invalidity or death.
|
|
20.9
|
In relation to the Defined Contribution Scheme, there are no complaints under the internal disputes resolution procedure, complaints to any Ombudsman, reports to the Pensions Regulator, arbitrations, mediations, actions or claims in progress, pending or threatened and to the Warrantors’ Knowledge there is no fact or circumstances likely to give rise to such action or proceedings.
|
|
20.10
|
The Acquired Companies have complied with their obligations under the provisions of Part 1 of the Pensions Act 2008 relating to automatic enrolment.
|
|
20.11
|
No Contribution Notice or Financial Support Direction has been received by (or has been threatened to be issued against) any Acquired Company and to the Warrantors' Knowledge there are no facts or circumstances that could reasonably be expected to give rise to such notice or direction.
|
|
20.12
|
To the Warrantors’ Knowledge, the Disclosed Schemes have been operated and administered in accordance with the terms of its governing documentation, all legal obligations, and the requirements of all regulatory bodies, including, without limitation, the Pensions Regulator and HMRC.
|
|
21.
|
REAL PROPERTY
|
|
21.1
|
No Acquired Company owns, or has ever owned, any real property.
|
|
21.2
|
Section 21.2 of the Disclosure Letter sets forth a list of all Contracts under which any of the Acquired Companies leases, subleases or otherwise occupies or uses any real property or any interest therein and all amendments thereto (each a “
Lease
” and collectively, the “
Leases
”) (such underlying property interests, with all easements and other rights appurtenant to such property, the “
Leased Real Property
”). The Company has delivered or made available to the Buyer true, complete and correct copies of each Lease.
|
|
21.3
|
With respect to each Leased Real Property:
|
|
21.3.1
|
the applicable Acquired Company has a valid and enforceable leasehold interest to the leasehold estate pursuant to each pertinent Lease, free and clear of any Encumbrances, other than Permitted Encumbrances;
|
|
21.3.2
|
each such Lease listed has been duly authorized and executed by the applicable Acquired Company;
|
|
21.3.3
|
none of the Acquired Companies is a sublessor of, or has assigned any lease covering, any item of Leased Real Property; and
|
|
21.3.4
|
no Acquired Company nor, to the Warrantors’ Knowledge, any other party to any Lease, is in material default under any of the Leases.
|
|
21.4
|
The Leased Real Property constitutes all interests of the Acquired Companies in real property currently used in connection with the respective businesses of the Acquired Companies.
|
|
22.
|
MATERIAL LITIGATION
|
|
22.1
|
There are no Actions pending or, to the Warrantors’ Knowledge, threatened in writing (a) against or by the Acquired Companies or affecting any of their respective properties or assets (or by or against the Warrantors or any Affiliate of the Warrantors and relating to the Acquired Companies); or (b) against or by the Acquired Companies, the Warrantors or any Affiliate of the Warrantors that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Deed. To the Warrantors’ Knowledge, no event has occurred or circumstance exists that would reasonably be expected to give rise to, or serve as a basis for, any such Action.
|
|
22.2
|
There are no outstanding Governmental Orders and no unsatisfied judgments, penalties or awards against or affecting the Acquired Companies or any of their respective properties or assets.
|
|
23.
|
COMPLIANCE WITH LAW
|
|
23.1
|
The Acquired Companies have complied, and are now complying, in all material respects, with all Laws applicable to them or their businesses, properties or assets, and to the Warrantors’ Knowledge, no facts or circumstances exist which would reasonably be expected to cause the Acquired Companies to violate or fail to comply in any material respect with any such Laws.
|
|
23.2
|
The Acquired Companies have not (i) received any written notice from any Governmental Body with respect to any alleged violation by the Acquired Companies of any applicable Law or (ii) entered into or been subject to any Governmental Order with respect to the Acquired Companies or their respective properties or assets, or received any written request for information, notice, demand letter, inquiry, complaint or claim from any Governmental Body with respect to the foregoing.
|
|
23.3
|
To the Warrantors’ Knowledge, none of the Warrantors, employees, consultants or agents of the Acquired Companies, in their respective capacities as such, has been charged, has received written notice or communication that he or she is or was, under investigation, by any Governmental Body with respect to any violations of any applicable Laws.
|
|
23.4
|
All Permits required for the Acquired Companies to conduct their businesses have been obtained by them and all Permits required for the Acquired Companies to conduct their businesses as currently conducted are valid and in full force and effect, and the Acquired Companies are in compliance in all material respects with such Permits.
|
|
23.5
|
All fees and charges with respect to such Permits as of the date hereof have been paid in full.
|
|
23.6
|
Neither the Acquired Companies, nor the Warrantors has received any written notification, regarding any actual or alleged failure to comply with any such Permit and no Action is pending or, to the Warrantors’ Knowledge, is threatened in writing to revoke, suspend deny, terminate, cancel, withdraw or limit any such Permit.
|
|
23.7
|
To the Warrantors’ Knowledge, no event has occurred and no circumstance exists that would reasonably be likely to result in a violation of or failure on the part of the Acquired Companies to comply with the terms of, or the revocation, withdrawal, termination, cancellation, suspension or modification of, any such Permit.
|
|
24.
|
ANTI-MONEY LAUNDERING LAWS AND SANCTIONS AND EXPORT COMPLIANCE
|
|
24.1
|
None of the Acquired Companies, or their respective officers, directors, or employees, or to the Knowledge of the Warrantors, any agent of any of the Acquired Companies, is a Prohibited Person.
|
|
24.2
|
None of the Acquired Companies is a party to any Contract or bid with, or has conducted any business directly or indirectly within the past five (5) years involving, (i) an OFAC Sanctioned Country or (ii) any Prohibited Person.
|
|
24.3
|
Each of the Acquired Companies (i) is in compliance in all material respects with all applicable Anti-Money Laundering Laws and Sanctions and Export Laws and (ii) has instituted and maintains policies and procedures designed to promote and achieve compliance with all applicable Anti-Money Laundering Laws and Sanctions and Export Laws.
|
|
24.4
|
No notice has been received by any of the Acquired Companies nor, to the Knowledge of the Warrantors, is there any threatened claim or investigation against any of the Acquired Companies, nor has any Governmental Order been imposed (or, to the Knowledge of the Warrantors, is any such order threatened to be imposed) upon the businesses of the Acquired Companies by or before any Governmental Body, nor pending voluntary disclosure to any
|
|
25.
|
ANTI-CORRUPTION LAWS; CERTAIN REGULATORY MATTERS
|
|
25.1
|
None of the Acquired Companies, or their respective officers, directors or employees, or, to the Knowledge of the Warrantors, any agent of the Acquired Companies, in the past five (5) years either (i) violated any Anti-Corruption Laws or (ii) offered, paid, promised to pay, or authorized the payment of any money, or offered, gave, promised to give, or authorized the giving of anything of value, including cash, checks, wire transfers, tangible and intangible gifts, favors, services, and those entertainment and travel expenses that go beyond what is reasonable and customary and of modest value:
|
|
25.1.1
|
to any FCPA Government Official, whether directly or through any other Person, for the purpose of: (i) influencing any act or decision of a FCPA Government Official in his or her official capacity; (ii) inducing a FCPA Government Official to do or omit to do any act in violation of his or her lawful duties; (iii) securing any improper advantage; (iv) inducing a FCPA Government Official to influence or affect any act or decision of any FCPA Governmental Authority or (v) assisting any Representative in obtaining or retaining business for or with, or directing business to, any Person;
|
|
25.1.2
|
to any Person under circumstances in which any of the Acquired Companies, or their respective officers, directors, employees, or vendors knew or had reason to know that all or a portion of such money or thing of value would be offered, given or promised, directly or indirectly, to any FCPA Government Official; or
|
|
25.1.3
|
to any Person in a manner which would constitute or have the purpose or effect of public or commercial bribery, or the acceptance of or acquiescence in extortion, kickbacks, or other unlawful or improper means of obtaining business or any improper advantage.
|
|
25.2
|
None of the Acquired Companies, or their respective officers, directors or employees, or, to the Knowledge of the Warrantors, any agent of the Acquired Companies, has, either (i) (A) conducted or initiated any review, audit, or internal investigation or (B) made a voluntary, directed, or involuntary disclosure to any Governmental Body responsible for enforcing Anti-Corruption Laws, in each case with respect to any alleged act or omission arising under or relating to noncompliance with any Anti- Corruption Law or (ii) received any notice, request, or citation from any Person alleging noncompliance with any Anti-Corruption Law.
|
|
26.
|
SOLVENCY
|
|
26.1
|
No Acquired Company is insolvent or unable to pay (within the meaning of section 123 of the Insolvency Act 1986) its Third-Party Debts.
|
|
26.2
|
No order has been made, petition presented or resolution passed for the winding up of an Acquired Company or for the appointment of a liquidator or provisional liquidator to an Acquired Company.
|
|
26.3
|
No Acquired Company has received notice in writing that a floating charge created by any Acquired Company has crystallized.
|
|
26.4
|
No Acquired Company has proposed or agreed to a composition, compromise, assignment or arrangement with any of its creditors in the two year period prior to the date of this Deed.
|
|
26.5
|
No Acquired Company has received notice in writing that distress, execution or other process has been levied on any of its material assets.
|
|
27.
|
BOOKS AND RECORDS
|
|
28.
|
BROKERAGE OR COMMISSIONS
|
|
29.
|
LEAKAGE
|
|
1.
|
TIME LIMITS FOR BRINGING CLAIMS
|
|
1.1
|
The Management Warranties shall survive Completion. The Buyer will not be entitled to bring any Claim:
|
|
1.1.1
|
unless the Buyer notifies the Warrantors of the Claim in accordance with paragraph 1.2 of this Schedule 2 in any event on or before the expiry of:
|
|
(a)
|
the full period of applicable statutes of limitations (giving effect to any waiver, mitigation or extension thereof) in respect of the Fundamental Warranties and the Management Warranties set forth in paragraph 8 of Schedule 1 (Tax) and paragraph 19 of Schedule 1 (Employee Benefit Plans); or
|
|
(b)
|
36 months after the Completion Date in respect of any Claim for breach of Clauses 6.1 to 6.8; and
|
|
(c)
|
18 months after the Completion Date in respect of all other Claims,
|
|
1.1.2
|
which is not satisfied, settled or withdrawn within six months of the date of notification of such Claim under sub-paragraph 1.1.1 of this Schedule 2 unless proceedings in respect of it have been commenced by being both issued and served on the relevant Warrantors and which the Buyer undertakes to pursue as soon as reasonably practicable upon giving notice pursuant to paragraph 1.2 of this Schedule 2.
|
|
1.2
|
If the Buyer becomes aware of any fact, matter or circumstance which gives rise or could give rise to a Claim, the Buyer shall, as soon as reasonably practicable on becoming aware of such fact, matter or circumstance, give notice to the Warrantors of that fact, matter or circumstance (including reasonable details of such fact, matter of circumstance, the due date for any payment and so far as practicable the amount in respect of which a Claim may be made), but the failure to include such details shall not prejudice the Buyer’s right to seek recovery or compensation for any such Claim or potential Claim).
|
|
2.
|
LIMITATION ON QUANTUM
|
|
2.1
|
Except for claims arising from fraud or fraudulent misrepresentation, any Damages for which the Warrantors shall be liable pursuant to a Warranty Claim shall be satisfied only by recovery by the Buyer under the W&I Insurance Policy. The Warrantors shall be directly liable to the Buyer for Damages up to an amount not to exceed the Cap, up to their respective Allocable Share. It is acknowledged by the Buyer that its only recourse for its losses in respect of all such Warranty Claims in excess of the Cap shall be solely under the W&I Insurance Policy
|
|
2.2
|
For purposes of determining (i) whether there has been any misrepresentation or breach of a representation or warranty and (ii) the amount of any Damages resulting therefrom, all qualifications or exception in any representation or warranty relating to or referring to the terms “material”, “materiality”, “Material Adverse Effect”, “in all material respects” or any similar qualification, term or phrase shall be disregarded.
|
|
2.3
|
The Buyer will not be entitled to bring any Claim for any breach of Clause 3.1 unless the aggregate amount of such Claims exceeds $175,000, in which case the Warrantors will be liable for whole amount (and not just the excess).
|
|
2.4
|
Without prejudice to any other provisions of this Deed, the total aggregate liability (including interest, costs and expenses) of each Warrantor in respect of any and all Claims shall not, in any event, exceed the Aggregate Cap and shall (other than in respect of a Claim under Clause 6.1 to 6.8) be limited to their Allocable Share of any Damages in respect of any such Claim.
|
|
2.5
|
No Warrantor shall be liable in respect of any Warranty Claim to the extent that it relates to a matter Disclosed in the Disclosure Letter and/or the Data Room in accordance with Clause 4.3 or the Buyer has or had actual knowledge of the Warranty Claim or of the matters giving rise to the Warranty Claim on or before the date of this Deed (and the Buyer agrees and undertakes not to make any Warranty Claim where such knowledge exists or existed). For the purpose of this paragraph, the Buyer’s knowledge shall be deemed to be limited to the actual knowledge of each of Alan Masarek, David Pearson, Randy Rutherford, Vinod Lala and Omar Javaid immediately prior to the execution of this Deed.
|
|
3.
|
CONTINGENT LIABILITIES
|
|
4.
|
CONDUCT OF THIRD-PARTY CLAIMS
|
|
4.1
|
If the Buyer becomes aware of any claim by a third party (a “
Third-Party Claim
”) after Completion which is likely to result in a Warranty Claim, the Buyer shall promptly give notice of the Third-Party Claim to the Warrantors’ Representative and, subject to the Buyer and each of its Affiliates being indemnified to the Buyer’s reasonable satisfaction in writing by the Warrantors against all reasonable costs and expenses, including those of its legal
|
|
4.1.1
|
not make any knowing admission of liability or make any agreement or compromise in relation to that Third Party Claim without prior consultation with the Warrantors’ Representative; and
|
|
4.1.2
|
(subject to the Warrantors having accepted liability to the Buyer in respect of the Warranty Claim in writing and the Buyer being entitled to engage its own legal advisers) take such action as the Warrantors’ Representative may reasonably request to avoid, resist, dispute, appeal, compromise, remedy or defend that Third Party Claim, except where, in the reasonable opinion of the Buyer, such action would be materially prejudicial to the business of the Buyer or any of the Acquired Companies or would be misleading or inaccurate in any material respect.
|
|
4.2
|
The rights of the Warrantors’ Representative under this paragraph 4 of this Schedule 2 shall only apply to a Third-Party Claim if the Warrantors’ Representative gives notice to the Buyer in writing of its intention to exercise its rights within 10 Business Days of the Buyer giving notice of the Third-Party Claim. If the Warrantors’ Representative does not give notice during that period, the Buyer shall be entitled in its absolute discretion to settle, compromise, or resist any action, proceedings or claim against the Buyer, its Affiliates or any of the Acquired Companies out of which that Third-Party Claim arises.
|
|
5.
|
WARRANTOR ACCESS
|
|
6.
|
NO DUPLICATION OF RECOVERY
|
|
7.
|
EXCLUSIVE REMEDY
|
|
8.
|
W&I INSURANCE POLICY PROCESS
|
|
9.
|
RECOVERY FROM INSURANCE
|
|
9.1
|
The Warrantors will not be liable in respect of any Claim to the extent that the amount of such Claim is actually recovered (after taking into account any costs, expenses and any irrecoverable Taxes incurred in obtaining such recovery) under any policy of insurance in force prior to or after the date of this Deed.
|
|
9.2
|
If the Buyer and/or an Acquired Company are at any time entitled under an insurance policy to recover any sum in respect of any matter giving rise to a Claim (whether before or after the Warrantors have made a payment hereunder), the Buyer will first take, or procure that the Acquired Company takes steps to enforce such recovery and thereafter any Claim against the Warrantors will be limited (in addition to the other limitations in this Schedule 2) to the amount by which the loss or damage suffered by the Buyer as a result of the matter giving rise to the Claim exceeds the amount so recovered.
|
|
10.
|
RELEASE
|
|
10.1
|
Each Warrantor on behalf of itself and any of its predecessors, Affiliates, successors and assigns, and any of their respective past, present or future Representatives (the “
Releasing Party
”), irrevocably and unconditionally fully and forever waives, releases and discharges the Buyer and any of its Affiliates (including the Acquired Companies after Completion), successors and assigns (the “
Released Party
”) from any and all actions, costs, expenses, losses, liabilities, penalties, damages, claims, and demands, of every kind and nature whatsoever, whether now known or unknown, foreseen or unforeseen, actual or contingent (collectively, “
Claims
”) which relate to or arise out of the Releasing Party’s rights as a shareholder of the Company or any rights or commitments to any Equity Interest in the Acquired Companies, other than any Claims which arise out of (a) this Deed or the Offer
|
|
10.2
|
Nothing in this Deed will in any way restrict or limit the general obligation at law of the Buyer to mitigate any loss or damage which it may suffer in consequence of any breach by any of the Warrantors of this Deed.
|
|
10.3
|
No Claim for any breach of Clause 3.1 shall be admissible and no Warrantor shall be liable in respect of such only to the extent that any such claim by the Buyer or the subject matter thereof has been or is made good or is otherwise compensated in full (otherwise than by the Buyer or any of its Affiliates or any Acquired Company) at no cost or liability to the Buyer or any of its Affiliates or any Acquired Company within 30 Business Days of the matter, event, fact or circumstance giving rise to that such claim occurring (or failing to occur).
|
|
11.
|
WARRANTORS’ REPRESENTATIVE
|
|
11.1
|
Each Warrantor appoints Dennis Fois and Guy Sochovsky (acting jointly) to act as the initial Warrantors’ representatives (the “
Warrantors’ Representatives
”) under this Deed.
|
|
11.2
|
Each Warrantor hereby appoints the Warrantors’ Representatives as such Warrantor’s true and lawful attorneys (acting jointly), with full power of substitution and resubstitution, in such Warrantor’s name, place and stead, in any and all capacities, in connection with this Deed, granting to said attorneys full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection with the Offer as fully to all intents and purposes as such Warrantor might or could do in person.
|
|
11.3
|
The Warrantors’ Representatives shall have the full power and authority on behalf of the Warrantors, jointly and not severally, to take any and all actions and make any and all determinations in respect of this Deed. Without limiting the generality of the foregoing, each Warrantor hereby authorizes the Warrantors’ Representatives to (i) negotiate, execute and deliver all amendments, modifications and waivers to this Deed, (ii) take all actions on behalf of the Warrantors in connection with any claims or disputes with respect to this Deed, and (iii) accept notices on behalf of the Warrantors.
|
|
11.4
|
No Warrantor will be permitted to take any action pursuant to this Deed without the prior written approval of the Warrantors’ Representatives.
|
|
11.5
|
The Warrantors’ Representatives will not receive a fee for serving as the Warrantors’ Representatives under this Deed.
|
|
11.6
|
The Warrantors’ Representatives will be entitled to engage counsel and other advisors, and the reasonable fees and expenses of such counsel and advisors will be paid by the Warrantors.
|
|
11.7
|
The Warrantors’ Representatives will not be liable to any Warrantor for any action taken by them (or either of them) pursuant to this Deed and the Warrantors will jointly and severally indemnify and hold the Warrantors’ Representatives harmless from any Damages arising
|
|
11.8
|
Any Person serving as a Warrantors’ Representative under this Deed may resign as a Warrantors’ Representative upon at least ten (10) days prior written notice to the Warrantors and the Buyer. All rights of a Warrantors’ Representative to indemnification under this Deed will survive such Warrantors’ Representative’s resignation or removal.
|
|
11.9
|
The Warrantors will indemnify, hold harmless and reimburse the Warrantors’ Representatives for all costs and expenses incurred by the Warrantors’ Representatives acting in such capacity under this Deed (with such amount allocated among the Warrantors based on their respective Allocable Share of such amount).
|
|
11.10
|
As the representative of the Warrantors, the Warrantors’ Representatives shall act as the agent for all the Warrantors and shall have authority to bind each Warrantor in accordance with this Deed, and the Buyer may rely on such appointment and authority until the receipt of notice of the appointment of a successor upon five (5) Business Days’ prior written notice to Buyer.
|
|
1.
|
BUYER’S RIGHT OF ACCESS
|
|
1.1
|
From the date of this Deed the Buyer, and up to ten individuals authorised by it (or such additional persons authorized in writing by the Warrantors’ Representative), shall after giving reasonable notice to the Company be allowed reasonable access during normal business hours and so as to minimize the disruption caused to the Business to all the Leased Real Property, premises, books and records of each Acquired Company, and the Company shall supply or procure the supply of any information reasonably required by the Buyer relating to each Acquired Company and their respective affairs, in each case at the Buyer’s cost and solely in connection with consummating the transactions contemplated by the Offer (or such other purpose approved in writing by the Warrantors’ Representative), provided in each case that nothing in this paragraph shall require the Company or the Warrantors to carry out any act or omission or provide or otherwise give access to any information which may cause it to waive or result in the waiver of any legal privilege in any documentation or information subject to legal privilege.
|
|
1.2
|
The Buyer shall not and shall procure that none of its Affiliates or any of its or their Representatives shall make use of or divulge to any other person any confidential information relating to any Acquired Company which the Buyer may obtain in the exercise of its rights under paragraph 1.1 of this Schedule 3. Such obligation shall cease to apply with effect from Completion in respect of all such confidential information, whenever obtained, but should Completion not take place such obligation shall continue without limit of time.
|
|
2.
|
CONDUCT OF COMPANY’S BUSINESS PENDING COMPLETION
|
|
2.1
|
From the date of this Deed until Completion (both dates inclusive) the Company and (to the extent of their respective rights as a Shareholder or as a director of any Acquired Company) each of the Warrantors shall procure that:
|
|
2.1.1
|
the Business is carried on in the Ordinary Course of Business;
|
|
2.1.2
|
they shall use their reasonable endeavours to preserve the goodwill of the Business and encourage customers and suppliers to continue to deal with them and shall do nothing which will or would be reasonably likely to materially damage such goodwill; and
|
|
2.1.3
|
no Acquired Company shall, without the prior consent in writing of the Buyer (such consent not to be unreasonably withheld or delayed in respect of the matters set out in sub-paragraphs (d), (g), (h), (l), (m), (n) or (s) below):
|
|
(a)
|
make any alteration to its memorandum or articles of association or its constitution; or
|
|
(b)
|
create, allot or issue, repay or redeem or grant any option over any shares or loan capital or securities convertible into shares, or modify the rights attaching to any of its issued shares or loan capital, or purchase any of its shares or loan capital or reduce its share capital; or
|
|
(c)
|
alter the nature or scope of its Business; or
|
|
(d)
|
enter into any transaction other than on arms’ length terms and for full and proper consideration; or
|
|
(e)
|
acquire (whether by one transaction or by a series of transactions) the whole or a substantial or material part of the business, undertaking or assets of any other person; or
|
|
(f)
|
dispose of (whether by one transaction or by a series of transactions related or not) and whether or not in the ordinary course of business the whole or any substantial or material part of its business, undertaking or (except in the ordinary course of business) assets; or
|
|
(g)
|
incur any capital expenditures in excess of One Hundred Fifty Thousand Dollars ($150,000) individually or Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate;
|
|
(h)
|
other than in respect of drawing down less than $500,000 under the SVB Facilities, take any loans, borrowings or other form of funding or financial facility or assistance, or enter into any foreign exchange contracts, interest rate swaps, collars, guarantees or agreements or other interest rate instruments or any contracts or arrangements relating to derivatives or differences (other than normal trade credit or between another Acquired Company); or
|
|
(i)
|
grant any loans or other financial facilities to, or any guarantees for the benefit of, any person, or create any Encumbrance (other than a Permitted Encumbrance) over the whole or any part of its undertaking, property or assets; or
|
|
(j)
|
enter into any joint venture, partnership or other agreement or arrangement for the sharing of profits or assets; or
|
|
(k)
|
enter into any death, retirement, pension, profit sharing, bonus, share option, share incentive or other similar scheme for the benefit of any of its officers or employees or make any variation (including, but without limitation, any increase in the rates of contribution) to any such existing scheme or effect any key man insurance; or
|
|
(l)
|
commence, compromise, settle, waive a right in respect of or discontinue any legal or arbitration proceedings (other than routine debt collection) where the
|
|
(m)
|
prematurely repay or prepay or amend the terms of any loans, borrowings or other financial facilities made available to it or change its policy in relation to the payment of creditors; or
|
|
(n)
|
terminate the employment or office of any of its Key Employees or appoint any person who is not already an employee of an Acquired Company and whose annual salary would exceed One Hundred Thousand Dollars ($100,000) or materially alter the terms of employment or engagement of any Key Employee; or
|
|
(o)
|
declare, make or pay any dividend or distribution (whether of capital or of profits); or
|
|
(p)
|
enter into any agreement or arrangement with, or materially vary any existing agreement or arrangement with any Shareholder or any Affiliate of any Shareholder not on arms’ length terms or outside the Ordinary Course of Business; or
|
|
(q)
|
fail to maintain in force all its Insurance Policies at their current or better level of cover or to pay all premiums which may become due in respect thereof;
|
|
(r)
|
do anything to affect the continuation and validity of all licences and consents upon which the Business depends or fail to renew any such licence or consent;
|
|
(s)
|
make any material alterations to any of the leased Real Property or terminate or giving a notice to terminate any lease or licence under which any such Leased Real Property is held or varying the terms thereof;
|
|
(t)
|
make any change to its accounting reference date or to any accounting procedures or policies or basis of drawing up accounts;
|
|
(u)
|
make any Leakage other than Permitted Leakage;
|
|
(v)
|
enter into, grant or materially modify or agree to terminate any rights or enter into any agreement relating to the Intellectual Property Rights or otherwise allow any of its rights relating to Intellectual Property Rights to lapse in each case other than in the Ordinary Course of Business;
|
|
(w)
|
enter into any agreement or obligation to do anything prohibited by the foregoing paragraphs.
|
|
2.1.4
|
Nothing in this Schedule 3 shall restrict or prevent any act or omission by any Person:
|
|
(a)
|
as a result of, or to comply with, any applicable law and/or regulation;
|
|
(b)
|
in due performance of any agreement or other obligation entered into by or otherwise binding on that person as Disclosed in the Data Room or Disclosure Letter prior to the date of this Deed;
|
|
(c)
|
pursuant to any matter expressly permitted by this Deed or required to give effect to, implement or complete the Offer;
|
|
(d)
|
any allotment and issuance of Shares pursuant to the Company Stock Options;
|
|
(e)
|
any matter reasonably undertaken by any Acquired Company in an emergency or disaster situation with the bona fide intention of, and to the extent only of those matters strictly required with a view to, minimising any adverse effect of any steps or measures taken and preserving value of the Acquired Companies for the benefit of the Buyer, provided that the Buyer is immediately notified thereof and is, as far as reasonably practicable, consulted in advance in relation to such steps or measures;
|
|
(f)
|
any matter undertaken at the written request of or with the prior consent of the Buyer; and/or
|
|
(g)
|
pursuant to any matter specifically and expressly contemplated in the Business Plan.
|
|
Name
(1) |
Contact Details
(2) |
Allocable Share
(3) |
Aggregate Cap
(4) |
|
Dennis Fois
|
3561 Jackson St.
San Francisco
CA 94118 United States
E-mail: dennis.fois@newvoicemedia.com |
48.9%
|
$650,639
|
|
Guy Sochovsky
|
427 Riviera Circle
Larkspur
CA 94939 United States
E-mail: guy.sochovsky@newvoicemedia.com |
27.5%
|
$366,014
|
|
Artur Michalczyk
|
20 The Courtyard
Beggarwood
Basingstoke
Hampshire
RG22 4FJ United Kingdom
E-mail: artur.michalczyk@newvoicemedia.com
|
8.4%
|
$112,151
|
|
Moni Manor
|
1508 Wildrose Way
Mountain View
CA 94043 United States
E-mail: moni.manor@newvoicemedia.com
|
9.6%
|
$128,115
|
|
Fiona Talbot
|
Flat 319
Ben Jonson House
Barbican
London
Middlesex
EC2Y 8NQ United Kingdom
E-mail: fiona.talbot@newvoicemedia.com
|
5.6%
|
$74,719
|