<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): DECEMBER 17, 1999
DANKA BUSINESS SYSTEMS PLC
------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
UNITED KINGDOM 0-20828 98-0052869
--------------- ------------ -------------------
(STATE OR OTHER (COMMISSION (IRS EMPLOYER
JURISDICTION OF FILE NUMBER) IDENTIFICATION NO.)
INCORPORATION)
11201 DANKA CIRCLE NORTH
ST. PETERSBURG, FLORIDA 33716
---------------------------------------- ----------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 727-576-6003
<PAGE> 2
ITEM 5. OTHER EVENTS.
On December 17, 1999, Danka Business Systems PLC ("Danka" or the
"Company") announced the closing of the investment by equity investment funds
(the "Cypress Funds") managed by affiliates of The Cypress Group LLC
("Cypress"), a New York based private equity firm, of U.S.$200 million in
200,000 new convertible participating shares of Danka and the closing of the
investment by The Prudential Assurance Company Limited ("Prudential"), a
subsidiary of Prudential Corporation plc, of U.S.$18 million in 18,000 new
shares of the same series.
A copy of a press release issued by the Company in connection with the
closing of the transactions is filed as Exhibit 1 hereto and incorporated
herein by this reference.
2
<PAGE> 3
ITEM 7: EXHIBITS
1. Press Release dated December 17, 1999 by Danka Business Systems PLC
announcing the closing of the investment by the Cypress Funds and
Prudential.
2. Amendment, dated as of December 16, 1999, to Subscription Agreement
dated as of November 2, 1999 among Danka Business Systems PLC, Cypress
Merchant Banking Partners II L.P., a Delaware limited partnership,
Cypress Merchant Banking II C.V., a limited partnership organized and
existing under the laws of The Netherlands and 55th Street Partners II
L.P., a Delaware limited partnership.
3. Registration Rights Agreement dated as of December 17, 1999, among
Danka Business Systems PLC, Cypress Merchant Banking Partners II L.P.,
a Delaware limited partnership, Cypress Merchant Banking II C.V., a
limited partnership organized and existing under the laws of The
Netherlands and 55th Street Partners II L.P., a Delaware limited
partnership.
3
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
DANKA BUSINESS SYSTEMS PLC
By: /s/ David Berg
----------------------------------------------------
David P. Berg
Its: Executive Vice President and
General Counsel
Dated: December 17, 1999
4
<PAGE> 1
Exhibit 1
(DANKA LOGO)
For Immediate Release Kristin L. Wiemer
727-576-6003
Paul G. Dumond
011-44171-603-1515
DANKA ANNOUNCES COMPLETION OF $218 MILLION INVESTMENTS
AND AMENDMENT OF ITS CREDIT AGREEMENT
St. Petersburg, FL, December 17, 1999 - Danka Business Systems PLC (NASDAQ:
DANKY) ("Danka") today announced the completion of $218 million in investments
for an aggregate 218,000 new convertible participating shares of Danka and an
amendment to the Company's Credit Agreement providing financing through March
31, 2002.
Equity funds managed by affiliates of The Cypress Group LLC ("Cypress")
invested $200 million in 200,000 new convertible participating shares of Danka.
Under the terms of the agreement with Cypress, Danka has expanded its Board of
Directors from nine to eleven members, and, with effect from December 17, 1999,
James L. Singleton and Anthony D. Tutrone have been appointed to the board of
Danka as non-executive directors. Both Mr. Singleton and Mr. Tutrone are
executives of Cypress. "We are pleased with Cypress' commitment to Danka's
future and look forward to Jamie's and Tony's contributions as new members of
our Board," commented Larry K. Switzer, Chief Executive Officer of Danka.
In addition, The Prudential Assurance Company Limited ("Prudential"), a
subsidiary of Prudential Corporation plc, invested $18 million for an
additional 18,000 new shares of the same issue. "The investments by Cypress and
Prudential are a substantial vote of confidence in Danka and will be
instrumental in our future growth," continued Switzer.
The net proceeds to Danka for the share subscription by Cypress and Prudential
total approximately $204.6 million, after deducting estimated transaction
expenses. Eighty-five percent (85%) of the net proceeds, or approximately $174
million, of the share subscription has been used to make a required repayment
of Danka's existing bank indebtedness and the remainder will be used for
general corporate purposes.
The new participating shares are entitled to dividends equal to the greater of
6.5% per annum and ordinary share dividends on an as converted basis. Dividends
will be paid in the form of additional participating shares for the first five
years. The participating shares are convertible into ordinary shares at a
conversion price of $3.125 per ordinary share (equal to $12.50 per ADS),
subject to adjustment in certain circumstances to avoid dilution of the
interests of participating shareholders. The new participating shares (218,000)
have voting rights initially corresponding to approximately 23% of the total
voting power of Danka's capital stock. The terms of the participating shares
issued to Cypress and
Page 1 of 3
<PAGE> 2
Prudential are set out in full in the articles of association of Danka, which
were adopted at the extraordinary general meeting of its shareholders on
December 17, 1999. Details of the terms of the shares are also included in the
circular sent to Danka's shareholders and the proxy sent to Danka's U.S.
shareholders and American Depositary shareholders on November 24, 1999.
AMENDED CREDIT AGREEMENT
Upon the closing of the Cypress investment and receipt by the bank lenders of
the required payment from the net proceeds received, Danka and its bank lenders
entered into an amendment to its Credit Agreement with effect from December 1,
1999. While Danka plans to refinance its principal bank indebtedness during the
first quarter of calendar 2000, the amendment provides Danka with a commitment
of approximately $750 million through March 31, 2002. Mr. Switzer continued,
"We are delighted with the confidence and continued support our bank lenders
have provided to us and are pleased to have their financing commitment to the
Company into 2002. With this amendment, we are in a stronger position to
evaluate all our refinancing options."
The amendment also amends, among other things, the minimum net worth covenant
and removes any obligation of Danka to use its best efforts to sell Danka
Services International, Danka's document outsourcing division. The amendment
also provides that the $10 million payment which would have been due upon such
sale became due upon the completion of the issue of the participating shares to
Cypress, which payment has now been made.
As a result of the reduction in the Company's outstanding indebtedness, the
payment due under the Credit Agreement on December 31, 1999 has been reduced
from approximately $4.7 million to approximately $3.8 million. In addition, if
the bank indebtedness remains outstanding at March 31, 2000, the payment due on
that date has been reduced from approximately $9.3 million to approximately
$7.5 million.
Danka, headquartered in London, England, and St. Petersburg, Florida, is one of
the world's largest independent suppliers of office imaging equipment, supplies
and services. Danka provides office products and services globally in 30
countries around the world. Danka's ordinary shares are listed on the London
Stock Exchange and its ADSs are listed on NASDAQ. For additional information
about Danka's copier, printer and other office imaging products, please visit
the company's web site at www.danka.com.
Cypress is a private equity firm which currently manages more than $3.5 billion
of equity capital on behalf of major public and private pension funds,
university endowments, trusts and other leading financial institutions. Cypress
seeks to invest alongside experienced executives in growth businesses to
achieve long term capital appreciation. The Cypress professionals have employed
this strategy in numerous other investments such as Infinity Broadcasting
Corporation, Lear Corporation, R.P. Scherer Corporation, Cinemark USA, Inc.,
Williams Scotsman, Inc., Frank's Nursery & Crafts, Inc., WESCO International,
Inc. and ClubCorp, Inc.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release, or otherwise made by
officers of Danka, including statements related to Danka's future business and
financial performance, are forward-looking, and contain information relating to
Danka that is based on the beliefs of management as well as assumptions, made
by, and information currently available to, management. The words "goal,"
"anticipate," "expect," "believe" and similar expressions as they relate to
Danka or Danka's management, are intended to
Page 2 of 3
<PAGE> 3
identify forward-looking statements. Such statements reflect the current views
of Danka with respect to future events and are subject to certain risks,
uncertainties and assumptions that could cause actual results to differ
materially from those reflected in the forward-looking statements. Danka claims
the protection of the safe harbor for forward-looking statements provided for
in the U.S. Private Securities Litigation Act of 1995 for such statements.
Factors that might cause such differences include, among other things, the risk
of the failure to refinance Danka's bank indebtedness on satisfactory terms or
any material adverse change in financial markets or Danka. No assurance can be
given that the results in any forward-looking statement will be achieved.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which reflect management's analysis only as of the date they are
made. Readers are referred to Danka's Form 8-K filings with the Securities and
Exchange Commission related to the transactions described in this announcement.
Danka undertakes no obligation and does not intend to update these
forward-looking statements to reflect events or circumstances that arise after
the date such statements are made.
11201 Danka Circle North 107 Hammersmith Road
St. Petersburg, FL 33716 London W14 0QH
Page 3 of 3
<PAGE> 1
EXHIBIT 2
AMENDMENT TO SUBSCRIPTION AGREEMENT
AMENDMENT (the "Amendment"), dated as of December 16, 1999, to the
SUBSCRIPTION AGREEMENT (the "Original Subscription Agreement"), dated as of
November 2, 1999, between DANKA BUSINESS SYSTEMS PLC, a limited liability
company organized and existing under the laws of England and Wales (the
"Company"), and CYPRESS MERCHANT BANKING PARTNERS II L.P., a Delaware limited
partnership, CYPRESS MERCHANT BANKING II C.V., a limited partnership organized
and existing under the laws of The Netherlands and 55TH STREET PARTNERS II
L.P., a Delaware limited partnership (collectively, the "Subscribers").
WHEREAS, the Company and the Subscribers have entered into the
Original Subscription Agreement; and
WHEREAS, the Company and the Subscribers desire to amend the Original
Subscription Agreement as provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Company and the Subscribers hereby agree that
the Original Subscription Agreement is amended as follows:
ARTICLE I
AMENDMENTS
SECTION 1.1. Section 5.8(b) of the Original Subscription Agreement is
hereby amended by deleting the text thereof in its entirety and replacing it
with the following:
"After the Closing, the Company shall use its best efforts to
obtain a financing commitment from one or more major banks or
financial institutions with respect to the refinancing of the
substantial portion of its outstanding Indebtedness, which
shall be in form and substance reasonably satisfactory to the
Subscribers."
SECTION 1.2. Section 6.1(f)(ii) of the Original Subscription Agreement
is hereby amended by deleting the text thereof in its entirety and replacing it
with the words "Intentionally Omitted".
SECTION 1.3. Section 6.2(f)(ii) of the Original Subscription Agreement
is hereby amended by deleting the text thereof in its entirety and replacing it
with the words "Intentionally Omitted".
SECTION 1.4. Section 9.1(a)(iii) of the Original Subscription
Agreement is hereby amended by deleting the text thereof in its entirety and
replacing it with the words "Intentionally Omitted".
SECTION 1.5. Section 2.4 of the Original Subscription Agreement is
hereby amended and restated in its entirety as follows:
<PAGE> 2
"SECTION 2.4. Closing Deliveries by the Company. (a) At the Closing,
the Company shall deliver to the Subscribers:
(i) certificates evidencing the Participating Shares,
registered in the name of the applicable Subscriber;
(ii) a receipt for the Subscription Price; and
(iii) an executed Registration Rights Agreement.
(b) On January 5, 2000, in consideration of the subscription by the
Subscribers for the Participating Shares, the Company shall deliver to the
Subscribers a non-refundable commission payable to the Subscribers or, at their
direction, to an Affiliate of the Subscribers, by wire transfer of immediately
available funds to a bank account or accounts to be designated by the
Subscribers in writing at least two Business Days prior to the Closing Date in
an amount equal to U.S.$4,000,000, which represents 2% of the Subscription
Price (for the avoidance of doubt, the Company being responsible for any VAT
payable in respect of such commission)."
SECTION 1.6. Schedule 2.2 of the Original Subscription Agreement is
hereby amended and restated in its entirety as set forth in Exhibit A hereto.
ARTICLE II
MISCELLANEOUS
SECTION 2.1 This Amendment shall become effective upon the execution
and delivery hereof by the Company and the Subscribers.
SECTION 2.2 Capitalized terms defined in the Original Subscription
Agreement and not otherwise defined herein shall have the meanings assigned
thereto in the Original Subscription Agreement.
SECTION 2.3 This Amendment may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other party, it being understood that each
party need not sign the same counterpart.
SECTION 2.4 THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 2.5 All references in the Original Subscription Agreement to
"this Agreement," "hereof," "herein," or "hereunder" and words of similar
import shall mean and refer
2
<PAGE> 3
to the Original Subscription Agreement as amended by this Amendment (as well as
by all other subsequent amendments, restatements, modifications and supplements
thereto).
SECTION 2.6 Except as expressly amended herein, the Original
Subscription Agreement shall continue to be, and shall remain, in full force
and effect in accordance with its terms.
IN WITNESS WHEREOF, each of the undersigned has caused this Amendment
to be executed as of the date first written above by their respective officers
thereunto duly authorized.
DANKA BUSINESS SYSTEMS PLC
By: /s/ Larry K. Switzer
----------------------------------
Name: Larry K. Switzer
Title: Chief Executive Officer
[Signatures continue on following page]
3
<PAGE> 4
CYPRESS MERCHANT BANKING
PARTNERS II L.P.
By: Cypress Associates II LLC,
its General Partner
By: /s/ James L. Singleton
---------------------------
Name: James L. Singleton
Title: Vice Chairman
CYPRESS MERCHANT BANKING II C.V.
By: Cypress Associates II LLC,
its Managing General Partner
By: /s/ James L. Singleton
---------------------------
Name: James L. Singleton
Title: Vice Chairman
55TH STREET PARTNERS II L.P.
By: Cypress Associates II LLC,
its General Partner
By: /s/ James L. Singleton
---------------------------
Name: James L. Singleton
Title: Vice Chairman
4
<PAGE> 5
EXHIBIT A
SCHEDULE 2.2
PURCHASERS OF PARTICIPATING SHARES
<TABLE>
<CAPTION>
Number of Participating
Shares to be Purchased
----------------------
<S> <C>
Cypress Merchant Banking Partners II L.P. 190,085
Cypress Merchant Banking II C.V. 8,081
55th Street Partners II L.P. 1,834
-------
200,000
=======
</TABLE>
5
<PAGE> 1
EXHIBIT 3
===============================================================================
REGISTRATION RIGHTS AGREEMENT
BETWEEN
DANKA BUSINESS SYSTEMS PLC
AND
CYPRESS MERCHANT BANKING PARTNERS II L.P.,
CYPRESS MERCHANT BANKING II C.V.
AND
55TH STREET PARTNERS II L.P.
DATED AS OF DECEMBER 17, 1999
===============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I DEFINITIONS
SECTION 1.1 Certain Defined Terms.......................................................1
SECTION 1.2 Other Defined Terms.........................................................4
SECTION 1.3 Other Definitional Provisions...............................................4
ARTICLE II REGISTRATION RIGHTS
SECTION 2.1 Demand Registrations........................................................5
SECTION 2.2 Piggyback Registrations.....................................................7
SECTION 2.3 Piggyback Listings..........................................................8
SECTION 2.4 Preservation of Rights.....................................................10
ARTICLE III REGISTRATION PROCEDURES
SECTION 3.1 Registration Procedures....................................................10
SECTION 3.2 Registration Expenses......................................................15
SECTION 3.3 Limitations on Sale or Distribution of Other Securities....................15
SECTION 3.4 Company Right to Postpone Registration.....................................15
SECTION 3.5 No Required Sale...........................................................16
ARTICLE IV INDEMNIFICATION AND CONTRIBUTION
SECTION 4.1 Indemnification............................................................16
SECTION 4.2 Contribution...............................................................19
ARTICLE V GENERAL PROVISIONS
SECTION 5.1 Rule 144...................................................................20
SECTION 5.2 Further Assurances.........................................................20
SECTION 5.3 Amendment..................................................................20
SECTION 5.4 Waiver of Jury Trial.......................................................21
SECTION 5.5 Judgment Currency..........................................................21
SECTION 5.6 Severability...............................................................21
SECTION 5.7 Effective Date.............................................................21
SECTION 5.8 Entire Agreement; No Third Party Beneficiaries.............................21
SECTION 5.9 Assignment.................................................................21
SECTION 5.10 Counterparts...............................................................22
SECTION 5.11 Remedies...................................................................22
SECTION 5.12 Notices....................................................................22
SECTION 5.13 Governing Law; Consent to Jurisdiction.....................................23
SECTION 5.14 Interpretation.............................................................24
</TABLE>
-i-
<PAGE> 3
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of December 17, 1999 between
DANKA BUSINESS SYSTEMS PLC, a limited liability company organized and existing
under the laws of England and Wales (the "Company") and CYPRESS MERCHANT
BANKING PARTNERS II L.P., a Delaware limited partnership, CYPRESS MERCHANT
BANKING II C.V., a limited partnership organized under the laws of The
Netherlands, and 55TH STREET PARTNERS II L.P., a Delaware limited partnership
(collectively, the "Subscribers").
W I T N E S S E T H :
WHEREAS, the Company and the Subscribers have entered into a
Subscription Agreement, dated as of November 2, 1999, as amended by the
Amendment to Subscription Agreement dated as of December 16, 1999 (the
"Subscription Agreement"), pursuant to which the Company has agreed to issue
its 6.50% Senior Convertible Participating Shares (the "Participating Shares"),
which are convertible into Ordinary Shares, nominal value 1.25 pence per share
("Ordinary Shares"), of the Company and which may, in certain circumstances, be
delivered to such holders in the form of American Depositary Shares
representing such Ordinary Shares ("ADSs"), and the Subscribers have agreed to
subscribe for the Participating Shares;
WHEREAS, as a condition and inducement to the Subscribers' willingness
to enter into the Subscription Agreement, the Company has agreed to provide the
registration rights set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and obligations hereinafter set forth, the Company and the
Subscribers hereby agree as follows:
ARTICLE 1.
DEFINITIONS
SECTION (a) Certain Defined Terms. As used herein, the following terms
shall have the following meanings:
"Affiliate" means, with respect to any Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with, such specified Person, for so
long as such Person remains so associated to the specified Person.
-1-
<PAGE> 4
"Agreement" means this Registration Rights Agreement, as it may be
amended, supplemented, restated or modified from time to time.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in New York City or London are authorized or
required by law to close.
"Closing" has the meaning ascribed to such term in the Subscription
Agreement.
"Control" means, with respect to the relationship between or among two
or more Persons, the possession, directly or indirectly, of the power to direct
or cause the direction of the affairs or management of a Person, whether
through the ownership of voting securities, as trustee or executor, by contract
or otherwise, and the terms "controlled by" and "under common control with"
shall have correlative meanings.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended.
"Expenses" means any and all fees and expenses incident to the
Company's performance of or compliance with its obligations under this
Agreement (other than internal expenses incurred by the Company including the
services of the Company's executive officers and legal department), including,
without limitation: (i) registration, filing and other fees of the SEC or
relating to any U.S. or U.K. securities exchange or market registration or
qualification, (ii) fees and expenses of compliance with U.S. state and local
securities or "blue sky" laws and in connection with the preparation of a "blue
sky" survey, including reasonable fees and expenses of "blue sky" counsel,
(iii) printing and copying expenses, (iv) messenger and delivery expenses, (v)
expenses incurred in connection with any road show, (vi) fees and disbursements
of U.S., English and other counsel for the Company, (vii) with respect to each
registration, the reasonable fees and disbursements of one counsel for the
selling Holder(s) (selected by the Initiating Holder, in the case of a Demand
Registration, or by the Requisite Percentage of Participating Holders, in the
case of a Piggyback Registration), (viii) fees and disbursements of the
Company's independent public accountants (including the expenses relating to
any audit or limited review and "comfort" letters) and (ix) any other fees and
disbursements of underwriters, if any, customarily paid by issuers of
securities in the United States or the United Kingdom, as the case may be.
"Governmental Authority" means any governmental, regulatory or
administrative agency, authority, instrumentality or commission or any court,
tribunal or judicial or arbitral body of the United States (federal, state or
local), the United Kingdom, any other country or the European Community or any
other supranational organization or body.
"Holder" means each Person who owns Registrable Securities and is
either (a) a Subscriber or (b) any direct or indirect transferee of a
Subscriber which agrees to be bound by the provisions of this Agreement as a
"Holder" hereunder; provided that only a transferee to whom a Subscriber
specifically assigns the rights to make a Demand Registration shall be
permitted to make a Demand Registration Request pursuant to Section 2.1(a).
-2-
<PAGE> 5
"Independent Investment Banking Firm" means an investment banking firm
of nationally recognized standing that is, in the reasonable judgment of the
Person engaging such firm, qualified to perform the task for which it has been
engaged.
"Initial Interest" means, with respect to any Shareholder, all of the
Participating Shares beneficially owned by such Shareholder immediately
following the Closing.
"Person" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, government or any agency or
political subdivisions thereof or any group comprised of two or more of the
foregoing.
"Registrable Ordinary Shares" means the Ordinary Shares issued upon
conversion of the Participating Shares, including any additional Ordinary
Shares issued in respect thereof in connection with a share split, share
dividend or similar event with respect to the Ordinary Shares.
"Registrable ADSs" means the ADSs, if any, representing the Ordinary
Shares issued upon conversion of the Participating Shares, including any
additional ADSs issued in respect thereof in connection with a share split,
share dividend or similar event with respect to the Ordinary Shares underlying
such ADSs.
"Registrable Securities" means (a) the Participating Shares (including
Participating Shares issued as dividends or by way of bonus issues), (b) the
Registrable Ordinary Shares and (c) the Registrable ADSs, in each case whether
beneficially owned by a Holder as of the Closing or thereafter acquired by such
Holder. As to any particular Registrable Securities, such securities shall
cease to be Registrable Securities when (i) a registration statement with
respect to the sale of such securities shall have been declared effective under
the Securities Act and such securities shall have been disposed of in
accordance with such registration statement, (ii) such securities shall have
been sold (other than in a privately-negotiated sale) pursuant to Rule 144 (or
any successor provision) under the Securities Act, (iii) such securities are
eligible for sale pursuant to Rule 144 without being subject to applicable
volume limitations thereunder or (iv) such securities shall have ceased to be
outstanding.
"Registration Period" means the period ending on the date when there
are no Holders of Registrable Securities.
"Requisite Percentage of Participating Holders" means, with respect to
any registration pursuant to Section 2.2., Holders of a majority in interest of
the total Registrable Securities which the Company has been requested to
register by all Holders.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the U.S. Securities Act of 1933, as amended.
-3-
<PAGE> 6
"Share Capital" means any and all shares, interest, participation or
other equity equivalents (however designated and whether voting or non-voting)
and any and all rights (other than any evidence of indebtedness), warrants or
options exchangeable for or convertible into such shares, interest,
participation or other equity equivalents, including, to the fullest extent
applicable, American depository receipts or similar instruments representing
any such Share Capital.
"Transfer" means, as to any security, directly or indirectly, to sell,
transfer, assign, pledge, encumber, hypothecate or similarly dispose of, either
voluntarily or involuntarily, or to enter into any contract, option or other
arrangement or understanding with respect to the sale, transfer, assignment,
pledge, encumbrance, hypothecation or similar disposition, of such security
beneficially owned by a Person or any interest in any such security
beneficially owned by a Person.
"Voting Shares" means shares of the class or classes of Share Capital
(including, in the case of the Company, the Ordinary Shares and the
Participating Shares) pursuant to which the holders thereof have the general
voting power to vote at meetings of Shareholder (irrespective of whether or not
at the time shares of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).
SECTION (b) Other Defined Terms. The following terms shall have the
meanings defined for such terms in the Sections set forth below:
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
ADSs preamble
Claims 2.8(a)
Demand Exercise Notice 2.1(a)
Demand Registration Request 2.1(a)
Demand Registrations 2.1(a)
Initiating Holder 2.1(a)
Initiating Holder Group 2.1(a)
Litigation 5.13
Ordinary Shares preamble
Other Holders 2.1(b)
Participating Share preamble
Piggyback Registration 2.2(a)
Piggyback Listing 2.3(a)
Subscription Agreement preamble
</TABLE>
SECTION (c) Other Definitional Provisions. (1) The words "hereof",
"herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this
-4-
<PAGE> 7
Agreement as a whole and not to any particular provision of this Agreement, and
Article and Section references are to this Agreement unless otherwise
specified;
(2) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms; and
(3) All references to U.S. federal or New York state legal terms or
concepts in this Agreement shall be deemed to include, to the fullest extent
applicable, the equivalent legal terms or concepts in or of other
jurisdictions. Notwithstanding the preceding sentence or any provision of this
Agreement to the contrary, the preceding sentence and the application of the
definitional provisions thereof shall be subject in all respects to Section
5.13 hereof.
ARTICLE 2.
REGISTRATION RIGHTS
SECTION (a) Demand Registrations. (1) At any time and from time to
time after the first anniversary of the Closing and during the Registration
Period, any Subscriber (and any other Holder to whom a Subscriber has
specifically transferred its rights under this Section 2.1) shall have the
right to require the Company to file a registration statement under the
Securities Act covering all or any part of their respective Registrable
Securities, by delivering a written request therefor to the Company specifying
the number of Registrable Securities to be included in such registration by
such Holder(s), a price range acceptable to such Holder for the sale of such
Registrable Securities and the intended method of distribution thereof. All
such requests pursuant to this Section 2.1(a) are referred to herein as "Demand
Registration Requests" and the registrations so requested are referred to
herein as "Demand Registrations" (with respect to any Demand Registration, the
Holder making such demand for registration being referred to as the "Initiating
Holder" and, in the case that the Initiating Holder is a Subscriber, such
initiating Holder, together with the other Subscribers, the "Initiating Holder
Group"). As promptly as practicable, but no later than 10 Business Days after
receipt of a Demand Registration Request, the Company shall give written notice
(the "Demand Exercise Notice") of such Demand Registration Request to all
Holders of record of Registrable Securities.
(2) The Company shall include in a Demand Registration (i) the
Registrable Securities of the Initiating Holder and the other members of the
Initiating Holder Group that shall have made a written request to the Company
for inclusion thereof in such registration (which request shall specify the
maximum number of Registrable Securities intended to be disposed of by such
other members) within the time period specified below and (ii) the Registrable
Securities of any other Holder (other than members of the Initiating Holder
Group) (collectively, the "Other Holders") that shall have made a written
request to the Company for inclusion thereof in such registration (which
request shall specify the maximum number of Registrable Securities intended to
be disposed of by such Holder(s)) within 30 days after the receipt of the
Demand Exercise Notice.
-5-
<PAGE> 8
(3) The Company shall, as expeditiously as practicable following a
Demand Registration Request, use its best efforts to (i) effect the
registration under the Securities Act (including by means of a shelf
registration pursuant to Rule 415 under the Securities Act if so requested by
the Initiating Holder and if the Company is then eligible to use such a
registration) of the Registrable Securities which the Company has been so
requested to register by the Initiating Holder Group and the Other Holders (to
the extent permitted to be included in accordance with the terms hereof), for
distribution, in accordance with such intended method of distribution, and (ii)
if requested by the Initiating Holder, obtain acceleration of the effective
date of the registration statement relating to such registration.
(4) The rights of Holders of Registrable Securities to request Demand
Registrations pursuant to Section 2.1(a) are subject to the following
limitations: (i) in no event shall the Company be required to effect more than
four Demand Registrations pursuant to this Agreement; (ii) the Company shall
not be required to take any action to effect any Demand Registration within the
six-month period following the effective date of a previous Demand
Registration; and (iii) the Company shall not be obligated to effect more than
one Demand Registration under which the aggregate number of Registrable
Securities to be included in such Demand Registration would not exceed 10% of
the Subscribers' Initial Interest.
(5) A registration requested pursuant to this Section 2.1 will not be
deemed to have been effected unless the relevant registration statement has
become effective; provided that if, after it has become effective, the offering
of Registrable Securities pursuant to such registration is subject to any stop
order, injunction or other order or requirement of the SEC or other
governmental agency or court for an aggregate of more than 30 days in the 180
days following the date of effectiveness, such registration will be deemed not
to have been effected.
(6) If a requested registration pursuant to this Section 2.1 involves
an underwritten offering, the Initiating Holder shall have the right to select
in good faith an investment banker or bankers and managers of nationally
recognized standing to administer the offering; provided, however, that such
investment banker or bankers and managers shall be reasonably satisfactory to
the Company. The Company shall notify the Initiating Holder if the Company
objects to any investment banker or manager selected by the Initiating Holder
pursuant to this Section 2.1(f) within 10 Business Days after the Initiating
Holder has notified the Company of such selection.
(7) If the managing underwriter of any underwritten offering shall
advise the Holders participating in a Demand Registration that the Registrable
Securities covered by the registration statement cannot be sold in such
offering within a price range acceptable to the Initiating Holder, then the
Initiating Holder shall have the right to notify the Company that it has
determined that the registration statement be abandoned or withdrawn, in which
event the Company shall abandon or withdraw such registration statement. If a
requested registration pursuant to this Section 2.1 involves an underwritten
offering and the managing underwriter advises the Company that, in its opinion,
the number of securities requested to be included in
-6-
<PAGE> 9
such registration (including securities of the Company which are not
Registrable Securities) exceeds the number which can be sold in such offering
within a price range reasonably acceptable to the Initiating Holder, the
Company will include in such registration only the Registrable Securities
requested to be included in such registration pursuant to this Section 2.1. In
the event that the number of Registrable Securities requested to be included in
such registration exceeds the number which, in the opinion of such managing
underwriter, can be sold in such offering within a price range acceptable to
the Initiating Holder, the Company shall include in such registration the
number of Registrable Securities proposed to be sold by the Initiating Holder
Group (to the extent the managing underwriter believes that such Registrable
Securities can be sold in such offering within such price range, and if they
cannot and the Initiating Holder chooses not to exercise its rights provided in
the first sentence of this paragraph, such smaller number of Registrable
Securities of the members of the Initiating Holder Group as specified by the
Initiating Holder) and, to the extent the managing underwriter believes that
additional Registrable Securities can be sold in such offering within such
price range, the number of Registrable Securities proposed to be sold by the
Other Holders, allocated pro rata among the Other Holders on the basis of the
relative number of shares of Registrable Securities requested to be registered
pursuant to clause (ii) of Section 2.1(b) by each such Holder. In the event
that the number of Registrable Securities requested by all Holders to be
included in such registration is less than the number which, in the opinion of
the managing underwriter, can be sold, the Company or other holders who are
entitled to exercise "piggyback" or similar registration rights may include in
such registration a number of securities that the Company proposes to sell up
to the number of securities that, in the opinion of the managing underwriter,
can be sold in such offering within a price range acceptable to the Initiating
Holder.
(8) If the Company at any time grants to any other holders of Voting
Shares (or securities that are convertible, exchangeable or exercisable into
Voting Shares) any rights to request the Company to effect the registration
under the Securities Act of any such Voting Shares (or any such securities) on
terms (other than with respect to the number of demands permitted to be
requested) more favorable to such holders than the terms set forth in this
Section 2.1, then the Holders shall be entitled to such more favorable rights
and benefits.
SECTION (b) Piggyback Registrations. (1) If, at any time following the
first anniversary of the Closing, the Company proposes or is required to
register any shares of its Share Capital under the Securities Act (other than
pursuant to (i) registrations on such form or similar form(s) solely for
registration of securities in connection with an employee benefit plan or
dividend reinvestment plan or a merger, consolidation or acquisition or (ii) a
Demand Registration pursuant to Section 2.1) on a registration statement on
Form S-1, Form S-2 or Form S-3 (or an equivalent general registration form then
in effect), whether or not for its own account, the Company shall give
reasonable written notice of its intention to do so to each of the Holders of
record (but in no event less than 20 days before the anticipated filing date).
Upon the written request of any Holder, made within 15 days following the
receipt of any such written notice (which request shall specify the maximum
number of Registrable Securities intended to be disposed of by such Holder and
the intended method of distribution thereof), the Company shall, subject to the
remainder of this Section 2.2, use its best efforts to cause all such
Registrable
-7-
<PAGE> 10
Securities, the Holders of which have so requested the registration thereof, to
be registered under the Securities Act (with the securities that the Company at
the time proposes to register) to permit the sale or other disposition by such
Holders (in accordance with the intended method of distribution thereof) of the
Registrable Securities to be so registered (such registration, a "Piggyback
Registration"). There is no limitation on the number of Piggyback Registrations
pursuant to the preceding sentence that the Company is obligated to effect. No
registration effected under this Section 2.2(a) shall relieve the Company of
its obligations to effect Demand Registrations.
(2) If, at any time after giving written notice of its intention to
register any shares of its Share Capital and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
shares of its Share Capital, the Company may, at its election, give written
notice of such determination to all Holders of record and (i) in the case of a
determination not to register, shall be relieved of its obligation to register
any Registrable Securities in connection with such abandoned registration,
without prejudice, however, to the rights of Holders under Section 2.1, and
(ii) in the case of a determination to delay such registration of its shares of
its Share Capital, shall be permitted to delay the registration of such
Registrable Securities for the same period as the delay in registering such
other shares of its Share Capital.
(3) Any Holder shall have the right to withdraw its request for
inclusion of its Registrable Securities in any registration statement pursuant
to this Section 2.2 by giving written notice to the Company of its request to
withdraw; provided, however, that (i) such request must be made in writing
prior to the earlier of the execution of the underwriting agreement or the
execution of the custody agreement with respect to such registration and (ii)
such withdrawal shall be irrevocable and, after making such withdrawal, a
Holder shall no longer have any right to include Registrable Securities in the
registration as to which such withdrawal was made.
(4) If the managing underwriter of any underwritten offering shall
inform the Company in writing of its belief that the number of Registrable
Securities requested to be included in a registration under this Section 2.2
would materially adversely affect such offering, then the Company will include
in such registration, first, the securities proposed by the Company to be sold
for its own account, second, the Registrable Securities and any other
securities of the Company with respect to which the holders thereof are
entitled to and desire "piggyback" or similar registration rights, pro rata
among all such holders on the basis of the relative number of securities of the
Company requested to be registered pursuant to Section 2.2(a) or such other
"piggyback" or similar registration rights by each such holder and third, other
securities of the Company.
(5) If a Piggyback Registration pursuant to this Section involves an
underwritten offering, the Company shall have the right in its reasonable
discretion to select an investment banker or bankers and managers of nationally
recognized standing to administer the offering.
-8-
<PAGE> 11
SECTION (c) Piggyback Listings. (1) If, at any time following the
first anniversary of the Closing, the Company proposes or is required to list
any shares of its Share Capital on the London Stock Exchange (other than
following registration under the Securities Act in accordance with this
Agreement), whether or not for its own account, the Company shall give
reasonable written notice of its intention to do so to each of the Holders of
record. Upon the written request of any Holder, made within 15 days following
the receipt of any such written notice (which request shall specify the maximum
number of Ordinary Shares or, if securities issued by the Company similar to
other Registrable Securities are then listed or quoted on the London Stock
Exchange, such other Registrable Securities ("U.K. Listed Shares") intended to
be disposed of by such Holder and the intended method of distribution thereof),
the Company shall, subject to the remainder of this Section 2.3, use its best
efforts to cause all such U.K. Listed Shares, the Holders of which have so
requested the listing thereof, to be listed on the London Stock Exchange (with
the securities that the Company at the time proposes to list) to permit the
sale or other disposition by such Holders (in accordance with the intended
method of distribution thereof) of the U.K. Listed Shares to be so listed (such
listing, a "Piggyback Listing"). There is no limitation on the number of
Piggyback Listings pursuant to the preceding sentence that the Company is
obligated to effect. No listings effected under this Section 2.3(a) shall
relieve the Company of its obligations to effect Demand Registrations.
(2) If, at any time after giving written notice of its intention to
list any shares of its Share Capital in accordance with Section 2.3(a) and
prior to the listing of such shares, the Company shall determine for any reason
not to list or to delay listing of such shares of its Share Capital, the
Company may, at its election, give written notice of such determination to all
Holders of record and (i) in the case of a determination not to list, shall be
relieved of its obligation to list any U.K. Listed Shares in connection with
such abandoned listing, without prejudice, however, to the rights of Holders
under Section 2.1, and (ii) in the case of a determination to delay such
listing of its shares of its Share Capital, shall be permitted to delay the
listing of such U.K. Listed Shares for the same period as the delay in listing
such other shares of its Share Capital.
(3) Any Holder shall have the right to withdraw its request for
inclusion of its U.K. Listed Shares in any listing pursuant to this Section 2.3
by giving written notice to the Company of its request to withdraw; provided,
however, that (i) such request must be made in writing prior to the earlier of
the execution of the underwriting agreement or the execution of the custody
agreement with respect to such listing and (ii) such withdrawal shall be
irrevocable and, after making such withdrawal, a Holder shall no longer have
any right to include U.K. Listed Shares in the listing as to which such
withdrawal was made.
(4) If the managing underwriter of any underwritten offering shall
inform the Company in writing of its belief that the number of U.K. Listed
Shares requested to be included in a listing under this Section 2.3 would
materially adversely affect such offering, then the Company will include in
such listing, first, the securities proposed by the Company to be sold for its
own account, second, the U.K. Listed Shares and any other securities of the
Company with respect to which the holders thereof are entitled to and desire
"piggyback" or similar rights, pro
-9-
<PAGE> 12
rata among all such holders on the basis of the relative number of securities
of the Company requested to be listed pursuant to Section 2.3(a) or such other
"piggyback" or similar registration rights by each such holder and third, other
securities of the Company.
(5) If a Piggyback Listing pursuant to this Section 2.3 involves an
underwritten offering, the Company shall have the right in its reasonable
discretion to select an investment banker or bankers and managers of nationally
recognized standing to administer the offering.
(6) If and whenever the Company is required by the provisions of this
Section 2.3 to effect or cause the listing of any U.K. Listed Shares, the
Company shall (A) comply with all applicable laws and the requirements of the
relevant securities exchange or market or quotation system in respect of such
listing; (B) consult with the Holders in respect of all aspects of such
listing; and (C) comply with the reasonable requests of the Holders in respect
of the form and content of any documents (including, without limitation,
listing particulars and circulars) prepared in connection with such listing,
and otherwise in connection with the procedural requirements for listing.
SECTION (d) Preservation of Rights. The Company shall not grant any
registration or listing rights to third parties which contravene the rights of
Holders granted hereunder.
ARTICLE 3.
REGISTRATION PROCEDURES
SECTION (a) Registration Procedures. Subject to Section 2.2(b), if and
whenever the Company is required by the provisions of this Agreement to effect
or cause the registration of any Registrable Securities under the Securities
Act as provided in this Agreement, the Company shall, as expeditiously as
practicable:
(1) prepare and file with the SEC a registration statement on an
appropriate registration form of the SEC for the disposition of such
Registrable Securities in accordance with the intended method of disposition
thereof, which form (i) shall be selected by the Company (provided, that if any
registration requested pursuant to this Agreement which is proposed by the
Company to be effected by filing of a registration statement on Form S-3 (or
any successor or similar short-form registration statement) shall be in
connection with an underwritten public offering, and if the managing
underwriter shall advise the Company in writing that, in its opinion, it is of
material importance to the success of such proposed offering to include in such
registration statement information not required to be included pursuant to Form
S-3, then the Company shall supplement such registration statement as
reasonably requested by such managing underwriter) and (ii) shall, in the case
of a shelf registration, be available for the sale of the Registrable
Securities by the selling Holders thereof and such registration statement shall
comply as to form in all material respects with the requirements of the
applicable form and include all financial statements required by the SEC to be
filed therewith, and the Company shall
-10-
<PAGE> 13
use its best efforts to cause such registration statement to become effective
(provided, however, that before filing a registration statement or prospectus
or any amendments or supplements thereto, or comparable statements under U.S.
state securities or "blue sky" laws, the Company will furnish to one counsel
for the Holders participating in the planned offering (selected by the
Initiating Holder, in the case of a Demand Registration, or the Requisite
Percentage of Participating Holders, in the case of a Piggyback Registration)
and the underwriters, if any, copies of all such documents proposed to be filed
(including all exhibits thereto), which documents will be subject to the
reasonable review and, in the case of a Demand Registration, reasonable comment
of such counsel, and the Company shall not file any registration statement or
amendment thereto or any prospectus or supplement thereto with respect to a
Demand Registration to which the Holders of a majority of the Registrable
Securities covered by such registration statement or the managing underwriter,
if any, shall reasonably object in writing;
(2) prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of all Registrable
Securities covered by such registration statement in accordance with the
intended methods of disposition by the seller or sellers thereof set forth in
such registration statement in each case until the earlier of (i) such time as
all such Registrable Securities have been disposed of in accordance with the
intended methods of disposition set forth in such registration statement by the
Holder or Holders thereof and (ii) the expiration of 120 days from the date
such registration statement first becomes effective;
(3) furnish, without charge, to each seller of such Registrable
Securities and each underwriter, if any, of the securities covered by such
registration statement such number of copies of such registration statement,
each amendment and supplement thereto (in each case including all exhibits),
and the prospectus included in such registration statement (including each
preliminary prospectus and summary prospectus), in conformity with the
requirements of the Securities Act, such documents incorporated by reference in
such registration statement, and such other documents, as such seller and
underwriter may reasonably request in order to facilitate the disposition of
the Registrable Securities as contemplated by such registration statement;
(4) use its best efforts to register or qualify all Registrable
Securities covered by such registration statement under such other securities
or "blue sky" laws of such jurisdictions within the United States as any
sellers of Registrable Securities or any managing underwriter, if any, shall
reasonably request, to the extent such registration or qualification is
required by law, and do any and all other acts and things that may be necessary
or advisable to enable such sellers or underwriter, if any, to consummate the
disposition of the Registrable Securities in such jurisdictions, except that in
no event shall the Company be required to qualify generally to do business as a
foreign corporation in any jurisdiction where it would not, but for the
requirements of this paragraph (d), be required to be so qualified, to subject
itself to taxation in any such jurisdiction or to consent to general service of
process in any such jurisdiction;
-11-
<PAGE> 14
(5) enter into such customary agreements (including an underwriting
agreement in customary form, which may include customary indemnification
provisions in favor of underwriters and other persons in addition to, or in
substitution for, the provisions of Section 4.1 hereof) and take such other
actions as the Initiating Holder, in the case of a Demand Registration, or the
underwriters, if any, shall reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities;
(6) obtain (i) any opinion of U.S., English and other counsel for the
Company, dated the date of the closing under the underwriting agreement with
respect to such offering, in customary form and in form and scope reasonably
satisfactory to the underwriter and its counsel and (ii) any "comfort" letter
signed by the independent public accountants in customary form and covering
matters of the type customarily covered by "comfort" letters;
(7) notify each Holder selling Registrable Securities covered by such
registration statement and each managing underwriter, if any, as soon as
practicable: (i) when the registration statement, any pre-effective amendment,
the prospectus or any prospectus supplement related thereto or post-effective
amendment to the registration statement has been filed and, with respect to the
registration statement or any post-effective amendment, when the same has
become effective; (ii) of any request by the SEC or state securities authority
for amendments or supplements to the registration statement or the prospectus
related thereto or for additional information; (iii) of the issuance by the SEC
of any stop order suspending the effectiveness of the registration statement or
the initiation of any proceedings for that purpose; (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of any Registrable Securities for sale under the U.S. state securities or "blue
sky" laws or the initiation of any proceeding for such purpose; and (v) of the
existence of any fact of which the Company becomes aware that results in the
registration statement, the prospectus related thereto or any document
incorporated therein by reference containing an untrue statement of a material
fact or omitting to state a material fact required to be stated therein or
necessary to make any statement therein not misleading; and, if the
notification relates to an event described in clause (v), the Company shall, as
soon as reasonably practicable, subject to Section 3.1(b), prepare and furnish
to each such seller and each underwriter, if any, a reasonable number of copies
of a prospectus as supplemented or amended so that, as thereafter delivered to
the Holders of such Registrable Securities, the prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein in the light
of the circumstances under which they were made not misleading;
(8) use its best efforts to comply with all applicable rules and
regulations of the SEC, and make available to its security holders, as soon as
reasonably practicable after the effective date of the registration statement
(and in any event within 16 months thereafter), an earning statement (which
need not be audited) covering the period of at least 12 consecutive months
beginning with the first day of the Company's first calendar quarter after the
effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and the rules and
regulations thereunder;
-12-
<PAGE> 15
(9) use its best efforts to (i) cause all such Registrable Securities
covered by such registration statement to be listed on each U.S. or U.K.
securities exchange or market or quotation system on which similar securities
issued by the Company are then listed or quoted (if any), and provide a
transfer agent and registrar for such Registrable Securities not later than the
effective date of such registration statement; (ii) comply with all applicable
laws and the requirements of the relevant securities exchange or market or
quotation system in respect of such listing; (iii) consult with the Holders in
respect of all aspects of such listing; and (iv) comply with the reasonable
requests of the Holders in respect of the form and content of any documents
(including, without limitation, listing particulars and circulars) prepared in
connection with such listing, and otherwise in connection with the procedural
requirements for listing;
(10) deliver, as soon as practicable, to each Holder and one counsel
for the selling Holders participating in the offering and each underwriter, if
any, copies of all correspondence between the SEC and the Company, its counsel
or auditors and any memoranda relating to discussions with the SEC or its staff
with respect to the registration statement, other than those portions of any
such memoranda that contain information subject to attorney-client privilege
with respect to the Company or other shareholders, and, upon receipt of such
confidentiality agreements as the Company may reasonably request, make
reasonably available for inspection by any seller of such Registrable
Securities covered by such registration statement, by any underwriter, if any,
participating in any disposition to be effected pursuant to such registration
statement and by any attorney, accountant or other agent retained by any such
seller or any such underwriter, all pertinent financial and other records,
pertinent corporate documents and properties of the Company, and cause all of
the Company's officers, directors and employees to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement;
(11) use reasonable efforts to prevent the issuance of any stop order
suspending the effectiveness of the registration statement or of any order
preventing or suspending the use of any preliminary prospectus and, if any such
order is issued, to obtain the withdrawal of any such order at the earliest
possible moment;
(12) provide a CUSIP number for all Registrable Securities sold
pursuant to the Registration Statement, not later than the effective date of
the registration statement;
(13) make reasonably available its employees and personnel and
otherwise provide reasonable assistance to the underwriters (taking into
account the needs of the Company's businesses and the requirements of the
marketing process) in the marketing of Registrable Securities in any
underwritten offering;
(14) promptly prior to the filing of any document that is to be
incorporated by reference into the registration statement or the prospectus
(after the initial filing of such registration statement), provide copies of
such document to one counsel for the selling Holders and to each managing
underwriter, if any, and make the Company's representatives reasonably
available for discussion of such document and make such changes in such
document concerning
-13-
<PAGE> 16
the selling Holders prior to the filing thereof as such counsel for such
selling Holders or underwriters may reasonably request;
(15) furnish to each Holder participating in the offering and the
managing underwriter, without charge, at least one signed copy of the
registration statement and each post-effective amendment thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference);
(16) cooperate with each seller of Registrable Securities and each
underwriter or agent participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with the National Association of Securities Dealers, Inc.;
(17) use reasonable efforts to make available the executive officers
of the Company to participate with the Holders of Registrable Securities and
any underwriters in any "road shows" or other selling efforts that may be
reasonably requested by the selling Holders in connection with the methods of
distribution for the Registrable Securities;
(18) cooperate with the selling Holders of Registrable Securities and
the managing underwriter, if any, to facilitate the timely preparation and
delivery of certificates not bearing any restrictive legends representing the
Registrable Securities to be sold, and cause such Registrable Securities to be
issued in such denominations and registered in such names in accordance with
the underwriting agreement prior to any sale of Registrable Securities to the
underwriters or, if not an underwritten offering, in accordance with the
instructions of the selling Holders of Registrable Securities at least two
Business Days prior to any sale of Registrable Securities; and
(19) take all such other reasonable actions as are necessary or
advisable or reasonably requested by the selling Holders of Registrable
Securities in order to expedite or facilitate the disposition of such
Registrable Securities.
The Company may require as a condition precedent to the Company's obligations
under this Section 3.1 that each seller of Registrable Securities as to which
any registration is being effected furnish the Company such information
regarding such seller and the distribution of such securities as the Company
may from time to time reasonably request in writing and as shall be required by
law, by the SEC or by any securities exchange or market or quotation system on
which the Registrable Securities are to be listed or quoted in connection
therewith; provided, that such information shall be used only in connection
with such registration and the fulfillment of the Company's obligations under
this Agreement. Each Holder of Registrable Securities agrees that upon receipt
of any notice from the Company of the happening of any event of the kind
described in clause (v) of paragraph (g) of this Section 3.1, such Holder will
discontinue such Holder's disposition of Registrable Securities pursuant to the
registration statement covering such Registrable Securities until such Holder's
receipt of the copies of a supplemented or amended prospectus as contemplated
by paragraph (g) of this Section 3.1 and, if so directed by
-14-
<PAGE> 17
the Company, will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in such Holder's possession of any
prospectus covering such Registrable Securities that was in effect at the time
of receipt of such notice. In the event the Company shall give any such notice,
the 120-day period mentioned in paragraph (b) of this Section 3.1 shall be
extended by the number of days during such period from and including the date
of the giving of such notice to and including the date when each seller of any
Registrable Securities covered by such registration statement shall have
received the copies of the supplemented or amended prospectus contemplated by
paragraph (g) of this Section 3.1. If any such registration statement or
comparable statement under "blue sky" laws refers to any Holder by name or
otherwise as the Holder of any securities of the Company, then such Holder
shall have the right to require (i) the insertion therein of language, in form
and substance satisfactory to such Holder and the Company, to the effect that
the holding by such Holder of such securities is not to be construed as a
recommendation by such Holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such
Holder will assist in meeting any future financial requirements of the Company
or (ii) in the event that such reference to such Holder by name or otherwise is
not in the judgment of the Company, as advised by counsel, required by the
Securities Act or any similar federal statute or any state "blue sky" or
securities law then in force, the deletion of the reference to such Holder.
SECTION (b) Registration Expenses. To the fullest extent permitted by
applicable laws, the Company will pay (or promptly reimburse the payment of)
all Expenses incurred in connection with each registration statement filed
pursuant to this Agreement and the fulfillment of the Company's obligations
under this Agreement, provided, however, that all underwriting discounts and
selling commissions applicable to the sale of the Registrable Securities in
connection with any registration statement filed pursuant to this Agreement
shall be borne by the Holders of the Registrable Securities sold pursuant to
such registration statement, pro rata in proportion to the number of
Registrable Securities of each such Holder included in such registration.
SECTION (c) Limitations on Sale or Distribution of Other Securities.
(1) To the extent requested in writing by a managing underwriter, if any, of
any registration effected pursuant to Section 2.1 and 2.2, each Holder of
Registrable Securities agrees not to Transfer, including, without limitation,
any sale pursuant to Rule 144 under the Securities Act, any Registrable
Securities (other than as part of such underwritten public offering) during the
time period reasonably requested by the managing underwriter, not to exceed 90
days from the effective date of the registration statement (and the Company
hereby also so agrees (except that the Company may effect any sale or
distribution of any such securities pursuant to a registration on Form S-8 or
any successor or similar form that is then in effect or upon the conversion,
exchange or exercise of any then outstanding options, warrants, rights or other
securities convertible into or exchangeable or exercisable for Registrable
Securities or on Form S-4 or any successor or similar form that is then in
effect for a merger, acquisition or other transaction and related distributions
of securities) to use its reasonable best efforts to cause each holder,
directly or indirectly, of at least 1% of any Share Capital of the Company
purchased from the Company at any time other than in a public offering so to
agree); provided that with respect to
-15-
<PAGE> 18
registrations effected pursuant to Section 2.2, each Holder of Registrable
Securities shall only be required to agree to one such period of restriction on
Transfer in any 365-day period.
(2) The Company hereby agrees that, if it shall previously have
received a request for registration pursuant to Section 2.1 hereof or postponed
pursuant to Section 3.4 hereof, and if such previous registration shall not
have been withdrawn or abandoned, the Company shall not Transfer any
Registrable Securities (other than as part of such underwritten public
offering, a registration on Form S-8 or any successor or similar form that is
then in effect or upon the conversion, exchange or exercise of any then
outstanding options, warrants, rights or other securities convertible into or
exchangeable or exercisable for Registrable Securities or on Form S-4 or any
successor or similar form that is then in effect for a merger, acquisition or
other transaction and related distributions of securities) during the time
period reasonably requested by the managing underwriter, not to exceed 90 days
from the effective date of the registration statement.
SECTION (d) Company Right to Postpone Registration. The Company shall
be entitled to postpone for a reasonable period of time (but not exceeding 120
days) the filing or effectiveness of any registration statement otherwise
required to be prepared and filed by it pursuant to this Agreement if the
Company determines (i) in its good faith judgment after consultation with its
external U.S. securities counsel of nationally recognized standing that such
registration and offering would require premature disclosure of material
information which the Company has a bona fide business purpose for preserving
as confidential or (ii) in its good faith judgment after consulting with an
Independent Investment Banking Firm that the filing of the registration
statement and the related sale of securities of the Company would be reasonably
likely to have an adverse affect on the Company's financing plans or any
planned material transaction involving the Company, including, without
limitation, sales of securities of the Company, in each case provided that the
Company promptly gives the Holders of Registrable Securities requesting
registration thereof pursuant to Section 2.1 written notice of such delay. If
the Company shall so postpone the filing or effectiveness of a registration
statement, such Holders of Registrable Securities requesting registration
thereof pursuant to Section 2.1 shall have the right to withdraw the request
for registration by giving written notice to the Company within 30 days after
receipt of the notice of postponement and, in the event of such withdrawal,
such request shall not be counted for purposes of the requests for registration
to which Holders of Registrable Securities are entitled pursuant to Section 2.1
hereof. The Company shall not be permitted to postpone registration pursuant to
this Section 3.4 more than once in any 365-day period.
SECTION (e) No Required Sale. Nothing in this Agreement shall be
deemed to create an independent obligation on the part of any Holder to sell
any Registrable Securities pursuant to any effective registration statement.
-16-
<PAGE> 19
ARTICLE 4.
INDEMNIFICATION AND CONTRIBUTION
SECTION (a) Indemnification. (1) In the event of any registration of
any securities of the Company under the Securities Act pursuant this Agreement,
the Company will, and hereby does, indemnify and hold harmless, to the fullest
extent permitted by all applicable laws, each seller of any Registrable
Securities covered by such registration statement, its directors, officers,
affiliates, employees, shareholders, members and general and limited partners
(and the directors, officers, affiliates, employees, shareholders, members and
general and limited partners thereof), each other Person who participates as an
underwriter in the offering or sale of such securities, each director, officer,
employee, shareholder, member or general and limited partner of such
underwriter, and each other Person, if any, who controls such seller or any
such underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, against any and all losses, claims, damages or
liabilities, joint or several, actions or proceedings (whether commenced or
threatened) in respect thereof ("Claims") and expenses (including reasonable
fees of counsel and any amounts paid in any settlement effected with the
Company's consent, which consent shall not be unreasonably withheld) to which
each such indemnified party may become subject under the Securities Act or
otherwise, insofar as such Claims or expenses arise out of or are based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in any registration statement under which such securities were
registered under the Securities Act, together with the documents incorporated
by reference therein or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary, final or summary
prospectus or listing particulars or any amendment or supplement thereto,
together with the documents incorporated by reference therein, or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided,
however, that the Company shall not be liable to any such indemnified party in
any such case to the extent such Claim or expense arises out of or is based
upon any untrue statement or alleged untrue statement of a material fact or
omission or alleged omission of a material fact made in such registration
statement or amendment thereof or supplement thereto or in any such prospectus
or any preliminary, final or summary prospectus in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such indemnified party specifically for use therein. Such indemnity and
reimbursement of expenses shall remain in full force and effect regardless of
any investigation made by or on behalf of such indemnified party and shall
survive the Transfer of such securities by such seller.
(2) Each Holder of Registrable Securities that are included in the
securities as to which any registration under Section 2.1 or 2.2 is being
effected (and, if the Company requires as a condition to including any
Registrable Securities in any registration statement filed in accordance with
Section 2.1 or 2.2, any underwriter) shall, severally and not jointly,
indemnify and hold harmless (in the same manner and to the same extent as set
forth in paragraph (a) of this Section 4.1) to the extent permitted by law the
Company, its directors and officers, each Person controlling the Company within
the meaning of the Securities Act and all other
-17-
<PAGE> 20
prospective sellers and their directors, officers, general and limited partners
and respective controlling Persons with respect to any untrue statement or
alleged untrue statement of any material fact in, or omission or alleged
omission of any material fact from, such registration statement, any
preliminary, final or summary prospectus or listing particulars, or any
amendment or supplement thereto, if such statement or alleged statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company or its representatives by or on
behalf of such Holder specifically for use therein and reimburse such
indemnified party for any legal or other expenses reasonably incurred in
connection with investigating or defending any such Claim as such expenses are
incurred; provided, however, that the aggregate amount that any such Holder
shall be required to pay pursuant to this Section 4.1(b) and Section 4.2 shall
in no case be greater than the amount of the net proceeds received by such
person upon the sale of the Registrable Securities pursuant to the registration
statement giving rise to such Claim.
(3) Indemnification similar to that specified in the preceding
paragraph (a) of this Section 4.1 (with appropriate modifications) shall be
given by the Company with respect to any required registration or other
qualification of securities under any U.S. state securities and "blue sky"
laws.
(4) Any person entitled to indemnification under this Agreement shall
notify promptly the indemnifying party in writing of the commencement of any
action or proceeding with respect to which a claim for indemnification may be
made pursuant to this Section 4.1, but the failure of any indemnified party to
provide such notice shall not relieve the indemnifying party of its obligations
under the preceding paragraphs of this Section 4.1, except to the extent the
indemnifying party is materially prejudiced thereby, and shall not relieve the
indemnifying party from any liability that it may have to any indemnified party
otherwise than under this Article IV. In case any action or proceeding is
brought against an indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, unless in the reasonable opinion of outside counsel to
the indemnified party a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, to assume the defense
thereof jointly with any other indemnifying party similarly notified, to the
extent that it chooses, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation;
provided, however, that if (i) the indemnifying party fails to take reasonable
steps necessary to defend diligently the action or proceeding within 20 days
after receiving notice from such indemnified party that the indemnified party
believes it has failed to do so; (ii) such indemnified party who is a defendant
in any action or proceeding that is also brought against the indemnifying party
reasonably shall have concluded that there may be one or more legal defenses
available to such indemnified party that are not available to the indemnifying
party; or (iii) representation of both parties by the same counsel is otherwise
inappropriate under applicable standards of professional conduct, then, in any
such case, the indemnified party shall
-18-
<PAGE> 21
have the right to assume or continue its own defense as set forth above (but
with no more than one firm of counsel for all indemnified parties in each
jurisdiction who shall be approved by the majority of the participating Holders
in the registration in respect of which such indemnification is sought), and,
to the fullest extent permitted by all applicable laws, the indemnifying party
shall be liable for any expenses therefor. No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is
an actual or potential party to such action or claim) unless such settlement,
compromise or judgment (x) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (y) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party.
(5) The indemnity agreements contained herein shall be in addition to
any other rights to indemnification or contribution that any indemnified party
may have pursuant to law or contract and shall remain operative and in full
force and effect regardless of any investigation made or omitted by or on
behalf of any indemnified party and shall survive the Transfer of the
Registrable Securities by any such party.
(6) The indemnification and contribution required by this Section 4.1
and Section 4.2 shall be made by periodic payments of reasonable frequency of
the amount thereof during the course of the investigation or defense, as and
when bills are received or expense, loss, damage or liability is incurred.
SECTION (b) Contribution. (1) If for any reason the indemnity provided
for in Section 4.1 is unavailable or is insufficient to hold harmless an
indemnified party under Sections 4.1(a), (b) or (c) in respect of any Claims or
expenses (including reasonable fees of counsel and any amounts paid in any
settlement effected with the indemnifying party's consent, which consent shall
not be unreasonably withheld), then each indemnifying party, in lieu of
indemnifying such indemnified party, shall, to the fullest extent permitted by
all applicable laws, contribute to the amount paid or payable by such
indemnified party as a result of such Claims or expenses (i) as between the
Company and the Holders of Registrable Securities covered by a registration
statement, on the one hand, and the underwriters, on the other, in such
proportion as is appropriate to reflect the relative benefits received by the
Company and such Holders, on the one hand, and the underwriters, on the other,
from the offering of the Registrable Securities, or if such allocation is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits but also the relative fault of the Company and
such Holders, on the one hand, and of the underwriters, on the other, in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations, and (ii) as between the Company, on the one hand, and each
holder of Registrable Securities covered by a registration statement, on the
other, in such proportion as is appropriate to reflect the relative fault of
the Company and of each such holder in connection with such statements or
omissions, as well as any other relevant equitable considerations. The relative
benefits received by the Company and
-19-
<PAGE> 22
such Holders, on the one hand, and the underwriters, on the other, shall be
deemed to be in the same proportion as the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting expenses)
received by the Company and such Holders bear to the total underwriting
discounts and commissions received by the underwriters. The relative fault of
the Company and such Holders, on the one hand, and of the underwriters, on the
other, shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company and such Holders or by the underwriters. The relative fault of the
Company, on the one hand, and of each such Holder, on the other, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact relates to information supplied by such
party, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(2) The Company and the Holders of Registrable Securities agree that
it would not be just and equitable if contribution pursuant to this Section 4.2
were determined by pro rata allocation (even if the underwriters were treated
as one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in the next
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the next
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 4.2, no underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Registrable Securities underwritten by it and
distributed to the public exceeds the amount of any damages that such
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no holder of
Registrable Securities shall be required to contribute any amount in excess of
the amount by which the total price at which the Registrable Securities of such
holder were offered to the public exceeds the amount of any damages that such
holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Each Holder's obligation to
contribute pursuant to this Section 4.2 is several in the proportion that the
proceeds of the offering received by such Holder bears to the total proceeds of
the offering received by all the Holders and not joint. The aggregate amount
that any such Holder shall be required to pay pursuant to this Section 4.2 and
Section 4.1(b) shall in no case be greater than the amount of the net proceeds
received by such person upon the sale of the Registrable Securities pursuant to
the registration statement giving rise to such Claim.
-20-
<PAGE> 23
ARTICLE 5.
GENERAL PROVISIONS
SECTION (a) Rule 144. The Company covenants and agrees that (i) so
long as it remains subject to the reporting provisions of the Exchange Act, it
will timely file the reports required to be filed by it under the Securities
Act or the Exchange Act (including, but not limited to, the reports under
Sections 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of
Rule 144 under the Securities Act), and (ii) it will take such further action
as any Holder of Registrable Securities may reasonably request, all to the
extent required from time to time to enable Holders to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (x) Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or (y) any similar rule or regulation
hereafter adopted by the SEC. Upon the request of any Holder, the Company will
deliver to such Holder a written statement as to whether it has complied with
such requirements.
SECTION (b) Further Assurances. At any time or from time to time after
the date hereof, the parties agree to cooperate with each other, and at the
request of any other party, to execute and deliver any further instruments or
documents and to take all such further action as the other party may reasonably
request in order to evidence or effectuate the consummation of the transactions
contemplated hereby and to otherwise carry out the intent of the parties
hereunder.
SECTION (c) Amendment. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
SECTION (d) Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY
LAW, THE PARTIES HERETO HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION.
SECTION (e) Judgment Currency. The Company agrees that, if a judgment
or order given or made by any court for the payment of any amount due to the
Subscribers hereunder is expressed in currency (the "judgment currency") other
than the currency (the "denomination currency") in which such amount is
payable, to the fullest extent permitted by all applicable laws, it shall
indemnify the Subscribers against any deficiency arising or resulting from any
variation in rates of exchange between the date as of which the amount in the
denomination currency is notionally converted into the amount in the judgment
currency for the purposes of such judgement or order and the date of actual
payment thereof. This indemnity shall constitute a separate and independent
obligation from the other obligations contained in this Agreement, shall give
rise to a separate and independent cause of action, will apply irrespective of
any indulgence granted from time to time and shall continue in full force and
effect notwithstanding any judgment or order for a liquidated sum or sums in
respect of any amounts so due in respect hereof under any such judgment or
order.
-21-
<PAGE> 24
SECTION (f) Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party.
SECTION (g) Effective Date. This Agreement shall become effective
immediately upon the Closing.
SECTION (h) Entire Agreement; No Third Party Beneficiaries. (1) This
Agreement constitutes the entire agreement and supersedes all prior agreements
and undertakings, both written and oral, between the parties with respect to
the subject matter hereof.
(2) Except for the provisions of Article IV relating to Indemnified
Parties, this Agreement shall be binding upon and inure solely to the benefit
of each party hereto and their permitted assigns, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
Person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.
SECTION (i) Assignment. Except as expressly provided herein, neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto, in whole or in part (whether by
operation of law or otherwise), without the prior written consent of the other
parties hereto, and any attempt to make any such assignment without such
consent shall be null and void; provided, however, that the Subscribers may,
without the consent of any of the other parties to this Agreement, (i) assign
its rights and obligations hereunder to any Person or Persons to whom it is
entitled to assign the Participating Shares in accordance with the Subscription
Agreement, subject to such Person or Persons agreeing to be bound by the terms
of this Agreement and (ii) subject to compliance with the terms of the legend
set forth in Section 5.12 of the Subscription Agreement, transfer any or all of
the Participating Shares to one or more other Persons. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by, the parties and their respective successors and assigns.
SECTION (j) Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other party, it being understood that
each party need not sign the same counterpart.
SECTION (k) Remedies. (1) Each party hereto acknowledges that money
damages would not be an adequate remedy in the event that any of the covenants
or agreements in this Agreement are not performed in accordance with its terms,
and it is therefore agreed that in addition to and without limiting any other
remedy or right it may have, the non-breaching party will have the right to an
injunction, temporary restraining order or other equitable relief in
-22-
<PAGE> 25
any court of competent jurisdiction enjoining any such breach and enforcing
specifically the terms and provisions hereof.
(2) All rights, powers and remedies provided under this Agreement or
otherwise available in respect hereof at law or in equity shall be cumulative
and not alternative, and the exercise or beginning of the exercise of any
thereof by any party shall not preclude the simultaneous or later exercise of
any other such right, power or remedy by such party.
SECTION (l) Notices. Any notice, request, claim, demand or other
communication under this Agreement shall be in writing, shall be either
personally delivered, delivered by facsimile transmission or sent by reputable
overnight courier service (charges prepaid) to the address for such Person set
forth below or such other address as the recipient party has specified by prior
written notice to the other parties hereto and shall be deemed to have been
given hereunder when receipt is acknowledged for personal delivery or facsimile
transmission or one day after deposit with a reputable overnight courier
service:
(1) if to the Subscribers:
c/o The Cypress Group
65 East 55th Street, 19th Floor
New York, New York 10022
Fax: (212) 705-0199
Attention: James L. Singleton
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Fax: (212) 455-2502
Attention: Glenn M. Reiter, Esq.
(2) if to the Company:
Danka Business Systems PLC
107 Hammersmith Road
London W14 OQH, England
Fax: (011-44-171) 603-8448
Attention: Corporate Secretary
-23-
<PAGE> 26
with copies to:
Danka Holding Company
11201 Danka Circle North
St. Petersburg, Florida 33716
Fax: (727) 579-2880
Attention: General Counsel
Altheimer & Gray
10 South Wacker Drive
Chicago, IL 60606
Fax: (312) 715-4800
Attention: Richard F. Levy, Esq.
Peter H. Lieberman, Esq.
John E. Lowe, Esq.
SECTION (m) Governing Law; Consent to Jurisdiction. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK.
Each of the parties hereto hereby irrevocably and unconditionally
consents to submit to the exclusive jurisdiction of the courts of the State of
New York and the United States District Court for the Southern District of New
York for any action, order, writ, injunction, judgment, fine or decree
outstanding or suit, litigation, proceeding, arbitral action, investigation or
claim, including, without limitation, those involving any Governmental
Authority ("Litigation") in any court or before any Governmental Authority
arising out of or relating to this Agreement and the transactions contemplated
hereby and further agrees that service of any process, summons, notice or
document by U.S. mail to its respective address set forth in this Agreement
shall be effective service of process for any Litigation brought against it in
any such court. Each of the parties hereto hereby irrevocably and
unconditionally waives any objection to the laying of venue of any Litigation
arising out of this Agreement or the transactions contemplated hereby in the
courts of the State of New York sitting in the Borough of Manhattan in the City
of New York, and hereby further irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any such Litigation brought
in any such court has been brought in an inconvenient forum.
SECTION (n) Interpretation. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.
-24-
<PAGE> 27
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be executed as of the date first written above by their respective officers
thereunto duly authorized.
DANKA BUSINESS SYSTEMS PLC
By: /s/ Larry K. Switzer
--------------------------
Name: Larry K. Switzer
Title: Chief Executive Officer
[Signatures for this Agreement continue on the following page]
<PAGE> 28
CYPRESS MERCHANT BANKING PARTNERS II L.P.
By: Cypress Associates II LLC, its
General Partner
By: /s/ James L. Singleton
-------------------------------------
Name: James L. Singleton
Title: Vice Chairman
CYPRESS MERCHANT BANKING II C.V.
By: Cypress Associates II LLC, its
Managing General Partner
By: /s/ James L. Singleton
-------------------------------------
Name: James L. Singleton
Title: Vice Chairman
55TH STREET PARTNERS II L.P.
By: Cypress Associates II LLC, its
General Partner
By: /s/ James L. Singleton
-------------------------------------
Name: James L. Singleton
Title: Vice Chairman
