EXHIBIT 2.1
MALLESONS XXXXXXX XXXXXX
Subscription and Shareholders
Agreement for ABN Australasia
Holdings Pty Limited
Dated 6 April 2004
ABN Australasia Holdings Pty Limited ("Company")
LM SPV Pty Limited ("SPV")
ABN Australasia Limited ("Limited")
American Banknote Australasia Holdings Inc ("ABN")
Xxxxx Xxxx ("Xxxxx Xxxx")
MALLESONS XXXXXXX XXXXXX
Xxxxx 00
Xxxxxxxx Xxxxxxx Tower
0 Xxxxxx Xxxxx
Xxxxxx XXX 0000
Xxxxxxxxx
T x00 0 0000 0000
F x00 0 0000 0000
DX 000 Xxxxxx
xxx.xxxxxxxxx.xxx
ASM:RA:REC
SUBSCRIPTION AND SHAREHOLDERS AGREEMENT FOR ABN AUSTRALASIA HOLDINGS PTY LIMITED
CONTENTS
1 PART 1 COMPLETION 5
1.1 Time and place of Part 1 Completion 5
1.2 Obligations of SPV at Part 1 Completion 5
1.3 Obligations of Xxxxx Xxxx at Part 1 Completion 5
1.4 Obligations of Limited at Part 1 Completion 6
1.5 Obligations of ABN at Part 1 Completion 6
1.6 Company's obligations at Part 1 Completion 7
2 PART 2 COMPLETION 7
2.1 Time and place of Part 2 Completion 7
2.2 Obligations of SPV at Part 2 Completion 8
2.3 Obligations of ABN at Part 2 Completion 8
2.4 Obligations of ABN and SPV at Part 2 Completion 8
2.5 Obligations of Limited on Part 2 Completion 8
2.6 Obligations of the Company on Part 2 Completion 9
3 PART 3 COMPLETION 9
3.1 Time and place of Part 3 Completion 9
3.2 Obligations of the Company at Part 3 Completion 9
3.3 Obligations of ABN at Part 3 Completion 9
3.4 Obligations of Limited at Part 3 Completion 9
3A PART 4 COMPLETION 9
3A.1 Time and place of Part 4 Completion 9
3A.2 Obligations of the Company at Part 4 Completion 10
3A.3 Obligations of Xxxxx Xxxx at Part 4 Completion 10
3A.4 Obligations of SPV at Part 4 Completion 10
4 INTERDEPENDENCY, TIMING OF COMPLETION, RELEASE AND INDEMNITY 10
4.1 Interdependency 10
4.2 Timing 10
4.3 Release 10
4.4 Fraud or dishonesty 11
4.5 Subsidiaries and LM Gemplus 11
4.6 Xxxxx Xxxx tax costs indemnity 12
4.7 SPV's costs 12
4.8 Waiver 13
5 RELATIONSHIP OF LIMITED AND ABN 13
5.1 Winding up of ABN Australasia Limited 13
5.2 ABN undertaking to wind up Limited 13
5.3 Limited warranty re assets and liabilities 13
5.4 ABN undertaking to transfer any Limited assets 14
5.5 Promissory note 14
5.6 Ownership of shares 14
6 GUARANTEE 14
6.1 Guarantee 14
6.2 Indemnity 15
6.3 Extent of guarantee and indemnity 15
6.4 Rights of each other party are protected 15
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6968475 17 Agreement for ABN Australasia
Holdings Pty Limited
6 April 2004
6.5 ABN's rights are suspended 16
6.6 Reinstatement of rights 16
6.7 Costs 16
6.8 Consideration 16
7 STAGES I, II AND III 17
7.1 Stages of repayment and redemption 17
7.2 Stage I 17
7.3 Stage II 17
7.4 Stage III 18
7.5 Implementation of Stage II 18
7.6 Implementation of Stage III 19
7.7 Return of value to holders of Preference Shares 19
7.8 Election of holders of Class B Preference Shares 20
8 SHAREHOLDER RIGHTS 20
8.1 Classes of Shares 20
8.2 Shareholders not to exercise Board powers 20
9 BOARD CONTROL 20
9.1 Role of the Board 20
9.2 Matters to be determined by the Board 21
9.3 Voting by the Board 21
9.4 Maximum number of Directors 22
9.5 Composition of the Board 22
9.6 Initial Directors 22
9.7 Nominee Directors 22
9.8 Chairman 23
9.9 No casting vote 23
9.10 Duties of Directors 24
9.11 Directors and officers' insurance 24
9.12 Directors indemnity and insurance 24
9.13 Directors' fees 24
9.14 Expenses of Directors 24
9.15 Conflicts 25
9.16 Subsidiaries 25
10 CONSENTS FROM SHAREHOLDERS 25
10.1 Sale within first year 25
10.2 Transaction with related party 26
10.3 Change to indebtedness in absence of breach 26
10.4 Change to indebtedness during breach 27
10.5 Acquisition of business 27
10.6 Issue of Securities in Subsidiaries 27
11 CHAIRMAN, MANAGING DIRECTOR AND CHIEF FINANCIAL OFFICER 28
11.1 Day-to-day management 28
11.2 Appointment of Chairman and Managing Director 28
11.3 Appointment of Chief Financial Officer 28
11.4 Employment Agreement 28
11.5 Salary 28
12 MEETINGS AND RESOLUTIONS 28
12.1 Shareholder resolutions and Deadlock 28
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Holdings Pty Limited
6 April 2004
12.2 Frequency of Directors meetings 29
12.3 Timing of Directors meetings 29
12.4 Directors meeting quorum 29
12.5 Adjournment of Directors meeting if no quorum 29
12.6 Quorum at adjourned Directors meeting 29
12.7 Directors resolutions and Deadlock 30
12.8 Circulating resolutions of Directors 30
12.9 Notice of Directors meetings 30
12.10 Business at meeting 30
13 DEADLOCK 30
13.1 Reference to senior executives 30
13.2 Resolution by Deadlock Representatives and mediation 31
14 AGREEMENTS BETWEEN THE COMPANY AND ITS SHAREHOLDERS 31
14.1 No existing agreements 31
14.2 Future agreements 31
15 BUDGET, BUSINESS PLAN AND ACCOUNTS 31
15.1 Drafts to be prepared 31
15.2 Board to consider drafts 31
15.3 Approval of Budget 31
15.4 Audit 32
16 REPORTING OBLIGATIONS 32
16.1 Access 32
16.2 Information to Shareholders 32
16.3 Information from the Company 33
16.4 Information for ABN and SPV 34
16.5 Remedies of a Shareholder 34
16.6 Conduct of audit 35
16.7 Other rights 35
16.8 Costs of US audit 35
17 GENERAL RIGHTS AND OBLIGATIONS OF SHAREHOLDERS 35
17.1 Funding 35
17.2 Distribution policy 36
17.3 Refinancing 36
18 FURTHER ISSUE OF SHARES 36
18.1 General prohibition 36
19 DEALING WITH SHARES 37
19.1 Transfers of Shares 37
19.2 Permitted family transfer by Xxxxx Xxxx 37
19.3 Permitted transfers to a Related Body Corporate or Family
Company 38
19.4 No registration with Accession Agreement 38
19.5 General restriction on Encumbrances over Shares 38
19.6 Condition for granting Encumbrance 39
19.7 Release of Encumbrance and Power of Attorney 39
20 PERMITTED SALE OF SHARES 39
20.1 Permitted Sale after first year 39
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Holdings Pty Limited
6 April 2004
20.2 Sale Notice 40
20.3 Effect of Sale Notice 41
20.4 Power of attorney to implement Sale Notice 41
20.5 Transfer of Deferred Shares on a Sale of Ordinary Shares 41
20.6 Elimination of remaining Deferred Shares from 1 July 2007 41
20.7 Power of attorney for Deferred Shares 41
21 CONFIDENTIAL INFORMATION 42
21.1 Disclosure of Confidential Information 42
21.2 Disclosure by recipient of Confidential Information 42
21.3 Use of Confidential Information 42
21.4 Excluded Information 42
21.5 Announcements or releases 43
21.6 Return of Confidential Information 43
22 PROTECTION OF GOODWILL 43
22.1 Restraint on ABN and Xxxxx Xxxx 43
22.2 Restraint on the Company 44
22.3 Deletion of restrictions 45
22.4 Severance 45
22.5 Shares in a public company 45
22.6 Acknowledgment 45
23 ACKNOWLEDGEMENTS AND WARRANTIES 46
23.1 Warranty of power and authority 46
23.2 Xxxxx Xxxx options 46
24 DISPUTE RESOLUTION 46
24.1 Reasonable endeavours to settle 46
24.2 No court proceedings 46
24.3 Dispute Notice 47
24.4 Reply 47
24.5 Negotiation 47
24.6 Mediation 47
24.7 Appointment of mediator 47
24.8 Exchange of information 48
24.9 Failure of mediation 48
25 TERM 48
25.1 Commencement 48
25.2 Transfer of Shares 48
25.3 Certain provisions continue 48
26 APPLICATION OF FREE CASH FLOW 49
26.1 Use of Free Cash Flow 49
26.2 Free Cash Flow 49
27 APPLICATION OF PROCEEDS OF SALE 49
27.1 Application of clause to all sales 49
27.2 Early Exit Event 50
27.3 Terms for Non-cash Proceeds 51
27.4 Valuation of Non-cash Proceeds 51
27.5 Independent Valuer 51
27.6 SPV election to pay cash 52
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Holdings Pty Limited
6 April 2004
27.7 Future dealing with Non-cash Proceeds 52
27.8 Terms of Relevant Sale 53
27A TRADE SALE 54
27A.2 Further steps 54
27B SALE OF SHARES 54
27B.1 Application to Sale of Shares 54
27B.2 Structure of Sale of Shares 54
27B.3 Instructions to apply proceeds 56
28 NOTICES 56
28.1 Form 56
28.2 Delivery 56
28.3 When effective 57
28.4 Receipt - post 57
28.5 Receipt - fax 57
29 GENERAL 57
29.1 Discretion in exercising rights 57
29.2 Partial exercising of rights 57
29.3 No liability for loss 57
29.4 Approvals and consents 57
29.5 Remedies cumulative 57
29.6 Variation and waiver 57
29.7 No merger 57
29.8 Indemnities 58
29.9 Further steps 58
29.10 Time of the essence 58
29.11 Construction 58
29.12 Costs 58
29.13 Stamp duty 59
29.14 Supervening legislation 59
29.15 Entire agreement 59
29.16 Counterparts 59
29.17 Inconsistency 59
29.18 No partnership or agency 59
30 GOVERNING LAW 59
30.1 Governing law 59
30.2 Jurisdiction 60
31 INTERPRETATION 60
31.1 Definitions 60
31.2 General interpretation 71
31.3 Headings 72
SCHEDULE 1 - APPLICATION FOR SHARES (CLAUSE 1.2) 74
SCHEDULE 2 - MATTERS REQUIRING DIRECTORS RESOLUTION (CLAUSE 9.2) 76
SCHEDULE 3 - AGREEMENTS BETWEEN THE COMPANY OR SUBSIDIARIES
AND SHAREHOLDERS (CLAUSE 14.1) 79
SCHEDULE 4 - ACCESSION AGREEMENT (CLAUSE 19.3) 80
SCHEDULE 5 - CONSTITUTION (CLAUSE 1.4) 84
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6968475 17 Agreement for ABN Australasia
Holdings Pty Limited
6 April 2004
SCHEDULE 6 - MD DELEGATION RESOLUTION (CLAUSE 1.4) 85
SCHEDULE 7 - LIMITED CONSTITUTION (CLAUSE 2.4) 89
SCHEDULE 8 - CASH FLOW STATEMENT 90
SCHEDULE 9 - OPERATING FORECAST 91
SCHEDULE 10 - FORECAST CASH FLOW STATEMENT 92
SCHEDULE 11 - STRUCTURE CHART 1
ANNEXURE A - INITIAL BUDGET AND BUSINESS PLAN (CLAUSE 15) 4
ANNEXURE B - SERVICE AGREEMENT FOR XXXXX XXXX (CLAUSE 11.4) 5
ANNEXURE C - EBITDA PROJECTION RE MATERIAL ADVERSE PERFORMANCE
(CLAUSE 10.1) 7
ANNEXURE D - LETTER OF TERMINATION (CLAUSE 1) 8
LETTER AGREEMENT 8
1 TERMINATION 9
2 RELEASE 9
3 COUNTERPARTS 9
ANNEXURE E - ASSIGNMENT DEED 11
ANNEXURE F - SUPPLEMENTAL AGREEMENT (CLAUSE 1) 00
XXXXXXXX X - XXXXX XXXX XXXX LETTER (CLAUSE 1) 13
ANNEXURE H - NZ LETTER (CLAUSE 3A) 14
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6968475 17 Agreement for ABN Australasia
Holdings Pty Limited
6 April 2004
SUBSCRIPTION AND SHAREHOLDERS AGREEMENT FOR ABN AUSTRALASIA HOLDINGS PTY LIMITED
Details
INTERPRETATION - definitions are at the end of the General terms
PARTIES COMPANY, SPV, LIMITED, ABN and XXXXX XXXX
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COMPANY Name ABN AUSTRALASIA HOLDINGS PTY LIMITED
ABN 11 000 000 000
Incorporated in Commonwealth of Australia
Address 0000 Xxxxxx Xxxxxxx, Xxxxxxx, XXX 0000,
Xxxxxxxxx
Fax 00 0000 0000
Attention Managing Director
SPV Name LM SPV PTY LIMITED
ABN/ACN/ARBN 108 316 598
Incorporated in Commonwealth of Australia
Address 00 Xxxxxx Xxxxxx, Xxxxxxxxxxx, XXX 0000,
Xxxxxxxxx
Fax 00 0000 0000
Attention Xxxxx Xxxxxxxxxx
(C) Mallesons Xxxxxxx Xxxxxx Subscription and Shareholders 1
6968475 17 Agreement for ABN Australasia
Holdings Pty Limited
6 April 2004
LIMITED Name ABN AUSTRALASIA LIMITED
ABN 42 000 000 000
Incorporated in Commonwealth of Australia
Address 0000 Xxxxxx Xxxxxxx, Xxxxxxx, XXX 0000
Fax x0 000 000 0000
Attention Xxxxxx Xxxxxx
ABN Name AMERICAN BANKNOTE AUSTRALASIA HOLDINGS
INC
Incorporated in United States of America
Address 000 Xxxxxx Xxxxxx, Xxxxxxxxx Xxxxxx,
XX00000, Xxxxxx Xxxxxx of America
Fax x0 000 000 0000
Attention Xxxxxx Xxxxxx
XXXXX XXXX Name XXXXX XXXX
Address 0000 Xxxxxx Xxxxxxx, Xxxxxxx, XXX 0000
Fax 00 0000 0000
RECITALS A The Company, SPV, Limited, ABN and Xxxxx Xxxx have
agreed to undertake a debt restructuring and
recapitalisation of the Company and its Related
Bodies Corporate
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6968475 17 Agreement for ABN Australasia
Holdings Pty Limited
66 April 2004
B After Completion on the Completion Date, the issued
share capital of the Company will be 870 Ordinary
Shares, 870 Deferred Shares and 25,275,000 Preference
Shares held as follows:
- 870 (100%) Ordinary Shares held by the SPV;
- 696 (80%) Deferred Shares held by Limited
and 174 (20%) Deferred Shares held by Xxxxx
Xxxx;
- 22,000,000 Class A Preference Shares (face
value $22,000,000) (87% of Preference
Shares) held by the SPV
- 2,775,000 Class B Preference Shares (face
value $2,775,000) (11% of Preference Shares)
held by Limited; and
- 500,000 Class B Preference Shares (face
value $500,000) (2% of Preference Shares)
held by Xxxxx Xxxx.
C As at the Completion Date, the business of the
Company is the manufacture and/or supply of
transaction and identification products, services and
logistics.
D The business objectives of the Shareholders in
relation to the Company and its Related Bodies
Corporate are to:
(a) carry on the business of the Company and its
Related Bodies Corporate;
(b) operate and improve the business of the
Company and its Related Bodies Corporate in
accordance with the Business Plan;
(c) maximise the value of the Company;
(d) repay or refinance the Senior Secured Debt;
and
(e) return value to the holders of the
Preference Shares as set out in Recital E.
The Shareholders intend that in entering into any
material commitments or agreements, or in applying
its resources, the Company will observe the spirit of
the objectives in (d) and (e) above so as to reduce
the leverage of the Company and reduce the number of
Preference Shares remaining on issue.
E It is the intention of the Shareholders to:
(a) take all reasonable steps in their capacity
as
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6968475 17 Agreement for ABN Australasia
Holdings Pty Limited
66 April 2004
Shareholders as are necessary to assist the
Company and the Board to:
(i) approve and implement a Stage III
Refinancing or a Stage II
Refinancing which the Board has
recommended; and
(ii) return value equal to the issue
price for the Preference Shares to
the holders of the Preference
Shares, by approving and
implementing on the terms of this
agreement any one or combination of
the following:
(A) redemption of the
Preference Shares for
their full issue price;
(B) buy back of the Preference
Shares for their full
issue price; and
(C) other purchase of the
Preference Shares for
their full issue price;
and
(b) exercise the rights attaching to their
Shares so as to give effect to, and not
oppose or object to, proposals recommended
by the Board for the purpose of giving
effect to the terms of this agreement and
the intentions of the parties as set out in
these Recitals C to E to this agreement
provided that such proposals are consistent
with the intentions of the parties recited
here and treat the economic rights of each
Shareholder equally to those of other
Shareholders of the same class of Shares.
F The purpose of this agreement is for the parties to
record their agreement for the control and management
of the Company.
GOVERNING LAW Victoria
DATE OF See signing page
AGREEMENT
(C) Mallesons Xxxxxxx Xxxxxx Subscription and Shareholders 4
6968475 17 Agreement for ABN Australasia
Holdings Pty Limited
66 April 2004
SUBSCRIPTION AND SHAREHOLDERS AGREEMENT FOR ABN AUSTRALASIA HOLDINGS PTY LIMITED
General terms
1 PART 1 COMPLETION
1.1 TIME AND PLACE OF PART 1 COMPLETION
Part 1 Completion will take place at 11:00 am on the Completion Date at
the offices of Mallesons Xxxxxxx Xxxxxx, Solicitors, Governor Xxxxxxx
Tower, 0 Xxxxxx Xxxxx, Xxxxxx, or any other time and place agreed by
the Company and SPV.
1.2 OBLIGATIONS OF SPV AT PART 1 COMPLETION
At Part 1 Completion, SPV agrees to:
(a) deliver to the Company an application for the SPV Subscription
Shares which shares are to be issued in consideration of the
assignment by the Lenders to the Company of all right, title
and interest of the Lenders to be paid or repaid
$64,074,166.61 outstanding under the Previous Cash Advance
Facility to the Company, duly completed and executed by SPV,
in the form set out in schedule 1 to this agreement and
subscribe for those shares;
(b) deliver to the Company the Deed of Assignment, Amendment and
Novation duly executed by the Lenders and by the Agent as
agent and security trustee and the Release duly executed by
the Agent as security trustee, in consideration of acceptance
by the Company of the novation of $23,441,780,82 of the Senior
Secured Debt to the Company;
(c) deliver to the Shareholders the Supplemental Agreement duly
executed by the Lenders, the members of SPV and SPV; and
(d) appoint at least one Director to the board of each of the
Company and Xxxxx Xxxxxx pursuant to clause 9.7 and deliver to
the Company a consent to act for each Director so appointed.
1.3 OBLIGATIONS OF XXXXX XXXX AT PART 1 COMPLETION
At Part 1 Completion, Xxxxx Xxxx agrees to:
(a) exercise the Xxxxx Xxxx Share Options;
(b) deliver to the Company his Service Agreement duly executed by
him;
(c) deliver to the Shareholders the Supplemental Agreement duly
executed by him; and
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6968475 17 Agreement for ABN Australasia
Holdings Pty Limited
66 April 2004
(d) deliver the Parent Option and Support Termination Agreement
duly executed by him.
1.4 OBLIGATIONS OF LIMITED AT PART 1 COMPLETION
At Part 1 Completion, Limited agrees to:
(a) pass special resolutions of the Company to adopt the
Constitution and to change the name of the Company to
Xxxxx-Xxxxxx Group Pty Ltd;
(b) pass the necessary resolutions to convert all of the ordinary
shares in the capital of the Company held by Limited into the
Limited Conversion Shares and surrender any share certificates
relating to those ordinary shares to the Company;
(c) deliver to the Company the Deed of Assignment, Amendment and
Novation and the Release, duly executed by Limited;
(d) deliver to the Shareholders the Supplemental Agreement duly
executed by Limited;
(e) appoint Xxxxxx Xxxxxx to the board of the Company pursuant to
clause 9.7;
(f) procure that a Board meeting of the Company (and, as
necessary, of each of its Subsidiaries) is held at which:
(i) the registration of the issue of the SPV Subscription
Shares, the Xxxxx Xxxx Subscription Shares and the
conversion of the ordinary shares held by Limited is
approved and the register of members amended and
share certificates issued accordingly;
(ii) Xxxxxx Xxxx and Xxxxxx Xxx Xxxx resign as directors
of the Company, Xxxxx Xxxxxx and Xxxxx Xxxxxx Payment
Systems Pty Limited (if not already);
(iii) a resolution is passed specifying the scope of
delegation of authority by the Company to the
Managing Director, as set out in schedule 6,
(iv) a resolution is passed by the newly constituted board
of the Company adopting the initial Budget and
Business Plan attached as annexure A; and
(g) deliver the Parent Option and Support Termination Agreement
duly executed by Limited.
1.5 OBLIGATIONS OF ABN AT PART 1 COMPLETION
At Part 1 Completion, ABN agrees to
(a) deliver to the Shareholders the Supplemental Agreement duly
executed by ABN; and
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6968475 17 Agreement for ABN Australasia
Holdings Pty Limited
66 April 2004
(b) procure the delivery of the Parent Option and Support
Termination Agreement duly executed by American Banknote
Corporation.
1.6 COMPANY'S OBLIGATIONS AT PART 1 COMPLETION
At Part 1 Completion, the Company agrees to:
(a) issue to SPV the SPV Subscription Shares and issue to Xxxxx
Xxxx the Xxxxx Xxxx Subscription Shares; and
(b) register SPV as the holder of the SPV Subscription Shares,
Xxxxx Xxxx as the holder of the Xxxxx Xxxx Subscription Shares
and Limited as the holder of the Limited Conversion Shares;
(c) procure the change of name of Xxxxx Xxxxxx to Xxxxx-Xxxxxx
Australasia Pty Ltd and of American Banknote New Zealand
Limited to LM New Zealand Limited;
(d) deliver to the SPV the Deed of Assignment, Amendment and
Novation duly executed by the Company, Limited, Xxxxx Xxxxxx,
Xxxxx-Xxxxxx Payment Systems Pty Limited; Xxxxx Xxxxxx
(Taiwan) Limited, American Banknote Pacific Pty Ltd and
American Banknote New Zealand Limited and the Release duly
executed by Limited, the Company, American Banknote Pacific
Pty Limited, Xxxxx Xxxxxx and American Banknote New Zealand
Limited;
(e) deliver to the Shareholders the Supplemental Agreement duly
executed by the Company;
(f) deliver to Xxxxx Xxxx his Service Agreement duly executed by
Xxxxx Xxxxxx;
(g) procure the delivery of the Parent Option and Support
Termination Agreement duly executed by Xxxxx Xxxxxx; and
(h) deliver to Xxxxx Xxxx the Xxxxx Xxxx Side Letter duly executed
by the Company,
For the avoidance of doubt, the parties acknowledge that the 2,775,000
Class B Preference Shares held by Limited immediately prior to
Completion remain on issue following Completion, and Limited
acknowledges and confirms that its Class B Preference Shares have the
rights as set out for redeemable preference shares in schedule 1 of the
Constitution.
2 PART 2 COMPLETION
2.1 TIME AND PLACE OF PART 2 COMPLETION
Subject to Part 1 Completion having taken place, Part 2 Completion will
take place at 11:05 am on the Completion Date at the offices of
Mallesons Xxxxxxx Xxxxxx, Solicitors, Governor Xxxxxxx Tower, 0 Xxxxxx
Xxxxx, Xxxxxx, or any other time and place agreed by the Company and
the SPV.
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6968475 17 Agreement for ABN Australasia
Holdings Pty Limited
66 April 2004
2.2 OBLIGATIONS OF SPV AT PART 2 COMPLETION
At Part 2 Completion, SPV agrees to:
(a) procure the delivery to ABN of an executed transfer of the
shares in Limited held by the Agent as security trustee;
(b) deliver to ABN the share certificates (if any) in respect of
those shares; and
(c) deliver to ABN a letter of termination of the existing
shareholders agreement between American Banknote Australasia
Holdings Inc, the Agent and Limited dated 26 June 2001, in the
form attached as Annexure D, duly executed by the Agent.
2.3 OBLIGATIONS OF ABN AT PART 2 COMPLETION
At Part 2 Completion, ABN agrees to:
(a) pay SPV on behalf of the Agent the sum of $1 in consideration
of the transfer of the shares in Limited held by the Agent as
security trustee to ABN; and
(b) deliver to the Shareholders a letter of termination of the
existing shareholders agreement between American Banknote
Australasia Holdings Inc, the Agent and Limited dated 26 June
2001, in the form attached as Annexure D, duly executed by
ABN.
2.4 OBLIGATIONS OF ABN AND SPV AT PART 2 COMPLETION
At Part 2 Completion, ABN and SPV agree to (or in the case of SPV to
procure that the Agent does):
(a) procure that a Board meeting of Limited is held at which:
(i) the registration of the transfer of the shares in
Limited from the Agent to ABN is approved;
(ii) Xxxxx Xxxx and Xxxxx Xxxxxxxx resign as directors of
Limited;
(b) procure the change of name of Limited to 000 000 000 Limited;
(c) in their capacity as shareholders in Limited, pass a special
resolution of Limited to adopt the New Limited Constitution.
2.5 OBLIGATIONS OF LIMITED ON PART 2 COMPLETION
At Part 2 Completion, Limited agrees to:
(a) register the transfer of shares in Limited from SPV to ABN;
(b) procure the change of name of American Banknote Pacific Pty
Limited to 072 977 265 Pty Limited;
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6968475 17 Agreement for ABN Australasia
Holdings Pty Limited
66 April 2004
(c) procure that a Board meeting of American Banknote Pacific Pty
Limited is held at which Xxxxx Xxxx and Xxxxx Xxxxxxxx resign
as directors of American Banknote Pacific Pty Limited; and
(d) deliver to the Shareholders a letter of termination of the
existing shareholders agreement between American Banknote
Australasia Holdings Inc, the Agent and Limited dated 26 June
2001, in the form attached as Annexure D, duly executed by
Limited.
2.6 OBLIGATIONS OF THE COMPANY ON PART 2 COMPLETION
At Part 2 Completion, the Company agrees to deliver to Limited a letter
of termination of the existing agreement dated 31 December 2003 by
Xxxxx Xxxxxx to lend to Limited such amounts as Limited may require to
pay interest due and payable on the Senior Secured Debt.
3 PART 3 COMPLETION
3.1 TIME AND PLACE OF PART 3 COMPLETION
Subject to Part 1 Completion and Part 2 Completion having taken place,
Part 3 Completion will take place at 11:10 am on the Completion Date at
the offices of Mallesons Xxxxxxx Xxxxxx, Solicitors, Governor Xxxxxxx
Tower, 0 Xxxxxx Xxxxx, Xxxxxx, or any other time and place agreed by
the Company and the SPV.
3.2 OBLIGATIONS OF THE COMPANY AT PART 3 COMPLETION
At Part 3 Completion, the Company agrees to deliver to ABN an executed
copy of the Assignment Deed.
3.3 OBLIGATIONS OF ABN AT PART 3 COMPLETION
At Part 3 Completion, ABN agrees to deliver to the Company an executed
copy of the Assignment Deed.
3.4 OBLIGATIONS OF LIMITED AT PART 3 COMPLETION
At Part 3 Completion, Limited agrees to deliver to the Company an
executed copy of the Assignment Deed.
3A PART 4 COMPLETION
3A.1 TIME AND PLACE OF PART 4 COMPLETION
Subject to Part 1 Completion, Part 2 Completion and Part 3 Completion
having taken place, Part 4 Completion will take place at 11.15 am on
the Completion Date the offices of Mallesons Xxxxxxx Xxxxxx,
Solicitors, Governor Xxxxxxx Tower, 0 Xxxxxx Xxxxx, Xxxxxx, or any
other time and place agreed by the Company and SPV.
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6968475 17 Agreement for ABN Australasia
Holdings Pty Limited
66 April 2004
3A.2 OBLIGATIONS OF THE COMPANY AT PART 4 COMPLETION
At Part 4 Completion, the Company agrees to:
(a) procure that Xxxxx Xxxxxx lends the sum of $1.5 million (being
a portion of the proceeds of sale of the business of American
Banknote New Zealand Limited) to the Company; and
(b) pay the sum borrowed under clause 3A.2(a) to the Agent in
order to reduce the amounts owing under the Senior Secured
Debt.
3A.3 OBLIGATIONS OF XXXXX XXXX AT PART 4 COMPLETION
At Part 4 Completion, Xxxxx Xxxx agrees to deliver the NZ Letter duly
executed by him.
3A.4 OBLIGATIONS OF SPV AT PART 4 COMPLETION
At Part 4 Completion, SPV agrees to procure the delivery of the NZ
Letter duly executed on behalf of the Agent.
4 INTERDEPENDENCY, TIMING OF COMPLETION, RELEASE AND INDEMNITY
4.1 INTERDEPENDENCY
All of the Completion obligations of the parties under this agreement
are interdependent and each Completion event, and each document
referred to in or contemplated by clauses 1,2,3 and 3A, is conditional
upon all of the Completion obligations of all of the parties having
been performed.
4.2 TIMING
(a) All actions required to be performed under Part 1 Completion
will be taken to have occurred simultaneously on the
Completion Date;
(b) all actions required to be performed under Part 2 Completion
will be taken to have occurred simultaneously on the
Completion Date;
(c) all actions required to be performed under Part 3 Completion
will be taken to have occurred simultaneously on the
Completion Date; and
(d) all actions required to be performed under Part 4 Completion
will be taken to have occurred simultaneously on the
Completion Date.
4.3 RELEASE
(a) Subject to clause 4.4 upon Completion each party ("RELEASING
PARTY") shall release the other parties and each Subsidiary
and LM Gemplus ("RELEASED PARTIES") from all liability arising
from or in any way relating to the obligations of the Released
Parties to the Releasing Party under the Previous Relationship
Documents, and
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each Releasing Party agrees (subject to clause 4.4) not to
make a Claim against any Released Party in respect of such
obligations.
(b) Except in respect of:
(i) audit fees payable pursuant to clause 16.8; and
(ii) unreimbursed expenses relating to the payment of
premiums for directors and officers insurance,
ABN also releases the Company, its Subsidiaries and LM
Gemplus on Completion from all liabilities (if any) they may
owe to it by way of intra-group loan or any other obligations
or other arrangements, and agrees not to make a claim against
them in respect of any such matters.
(c) The Company, its Subsidiaries and LM Gemplus also release ABN
on Completion from all liabilities (if any) it may owe to them
by way of intra-group loan or any other obligations or other
arrangements and agree not to make a claim against it in
respect of any such matters.
4.4 FRAUD OR DISHONESTY
The release and agreement in clause 4.3 shall not apply in relation to
any liability where, and to the extent that, the liability arises from
or in any way relates to fraud or dishonesty in relation to the
Released Party's obligations under the Previous Relationship Documents
which:
(a) where the Company, a Subsidiary or LM Gemplus is the Released
Party, Xxxxxx Xxxxxx or Xxxxx Xxxx has committed or is
actually aware of;
(b) where Xxxxx Xxxx is the Released Party, he has committed or is
actually aware of;
(c) where ABN is the Released Party, Xxxxxx Xxxxxx has committed
or is actually aware of; and
(d) where Limited is the Released Party, Xxxxxx Xxxxxx has
committed or is actually aware of.
For the avoidance of doubt, no provision of this agreement imposes any
liability on Xxxxxx Xxxxxx, and no provision of this clause 4.4 imposes
any liability on Xxxxx Xxxx that he would not otherwise have as a party
to this agreement.
4.5 SUBSIDIARIES AND LM GEMPLUS
The Company shall hold the benefit of clause 4.3 on trust for the
Subsidiaries and LM Gemplus.
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4.6 XXXXX XXXX TAX COSTS INDEMNITY
(a) In consideration of Xxxxx Xxxx entering into certain
transactions affecting his holding of options and shares in
the Company and Limited, at the request of the Company and to
the benefit of the Company, the Company agrees that if the
Australian Taxation Office issues an amended assessment of
income tax to Xxxxx Xxxx in relation to his shares in the
Company or the options to acquire shares in the Company as a
result of his variation of the terms of his options in
December 2003 or return of value to Xxxxx Xxxx in respect of
those options or shares, other than in respect of capital
gains tax upon the disposal or deemed disposal of those
options or shares ("RELEVANT CLAIM"), the Company will
indemnify and hold Xxxxx Xxxx harmless from and against all
third party costs incurred in relation to any objection or
appeal against the Relevant Claim. This indemnity includes the
costs of any initial legal advice reasonably necessary to
ascertain whether or not the amended assessment is within the
scope of the matters covered by this indemnity.
(b) Clause 4.6(a) will not apply unless:
(i) Xxxxx Xxxx has obtained advice in relation to the
Relevant Claim from a solicitor who is reasonably
acceptable to the Company; and
(ii) that solicitor's advice is that the objection or
appeal has a reasonable chance of being wholly or
partly successful.
(c) If, after the commencement of any objection or appeal in
relation to the Relevant Claim, the solicitor advises Xxxxx
Xxxx that his prospects for success are less than those
referred to in clause 4.6(b)(ii) and Xxxxx Xxxx does not
immediately discontinue the objection or appeal, the Company
will not indemnify Xxxxx Xxxx against any costs or expenses
incurred after the time that such advice is given.
(d) The maximum amount payable by the Company under clause 4.6(a)
is $50,000, plus any fringe benefits tax liability (if any)
and payroll tax (if any) which is imposed on the Company in
relation to the payment to be made to Xxxxx Xxxx.
4.7 SPV'S COSTS
In consideration of SPY entering into this agreement and the
Supplemental Agreement, the Company agrees to indemnify and hold SPV
harmless from and against all costs and expenses incurred by SPV:
(a) in connection with its incorporation;
(b) in connection with the administration of SPV's affairs
relating to this agreement, the Supplemental Agreement and its
Shares;
(c) comprising fees and costs of the director of SPV from time to
time;
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(d) comprising fees and costs payable by SPV in connection with
preparation of its and its subsidiaries' (as defined in the
Corporations Act) financial reports and any annual audit of
those financial reports; and
(e) comprising Taxes payable by SPV to the extent that such Taxes
exceed the amount of Taxes that would have been payable (based
on the generally applicable rate of tax imposed on an
Australian resident company), had a single entity held the
Shares directly (instead of through SPV), but excluding
capital gains tax upon the disposal of Shares.
4.8 WAIVER
The parties agree that if each of SPV, ABN and Xxxxx Xxxx agree in
writing to waive or defer any of the Completion obligations of the
parties under this agreement, then Completion may still occur
notwithstanding what would otherwise be a failure to perform that
Completion obligation.
5 RELATIONSHIP OF LIMITED AND ABN
5.1 WINDING UP OF ABN AUSTRALASIA LIMITED
The parties acknowledge that ABN intends to wind up Limited after
Completion.
5.2 ABN UNDERTAKING TO WIND UP LIMITED
ABN undertakes to wind up Limited as soon as practicable following
Completion (and after the guarantee referred to in clause 5.3 below has
been released) in a way that results in the assets and rights of
Limited, including the shares held by Limited in the Company, being
distributed to ABN. From the date of such distribution:
(a) ABN replaces Limited under this agreement as if ABN was the
original party to this agreement instead of Limited;
(b) ABN is bound by this agreement as it relates to Limited and
enjoys all the rights and benefits conferred on Limited under
this agreement as if it had been a party to this agreement in
place of Limited from the date of execution of this agreement;
and
(c) each reference to Limited in this agreement must be read as a
reference to ABN (except in respect of obligations which have
already been fully performed and except for references in
clause 6).
5.3 LIMITED WARRANTY RE ASSETS AND LIABILITIES
Limited warrants in favour of the Company, SPV and Xxxxx Xxxx on the
date of this agreement that, apart from its obligations under this
agreement and the Promissory Note and the guarantee which Limited has
provided in respect of a document processing agreement between
Victorian Workcover Authority and Xxxxx Xxxxxx:
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(a) Limited has no liabilities (including so far as Limited is
aware any potential liability for Taxes) and will not incur
any such liabilities other than pursuant to this agreement;
and
(b) no person has or will have any right or interest in the Shares
which Limited holds in the Company, or is or will be entitled
to require Limited to sell its Shares in the Company.
5.4 ABN UNDERTAKING TO TRANSFER ANY LIMITED ASSETS
ABN confirms that neither Limited nor American Banknote Pacific Pty
Limited has any rights or assets other than (in the case of Limited)
pursuant to this agreement and Limited's Shares in the Company and (in
the case of both Limited and American Banknote Pacific Pty Limited)
pursuant to the Promissory Note. If any rights or assets are in fact
identified, and including the contract already identified between
Astron On-Line Limited and Limited, ABN agrees to procure the transfer
of such rights and assets to the Company or one of its Subsidiaries (as
nominated by the Company) as soon as practicable after such rights and
assets (if any) are identified. Pending such transfer ABN agrees to
hold the benefit of any such assets and rights for the Company or its
nominated Subsidiary, and agrees to do all things necessary to ensure
that all such assets and rights are effectively transferred to the
Company or its nominated Subsidiary, at ABN's cost, in consideration of
the entering into of this agreement by the other parties and for no
further consideration.
5.5 PROMISSORY NOTE
Limited acknowledges that as a result of the endorsement of the
promissory note which Xxxxx Xxxxxx endorsed to it on or around 31
December 2003, no further amount is payable to Limited by either Xxxxx
Xxxxxx or the Company.
5.6 OWNERSHIP OF SHARES
ABN warrants in favour of the Company, SPV and Xxxxx Xxxx that schedule
11 correctly shows the registered owner of all Securities on issue in
Limited and in its Subsidiaries, and in particular ABN does not own any
Securities in the Company.
6 GUARANTEE
6.1 GUARANTEE
Provided that ABN's liability under this clause 6.1 shall in no event
be greater than:
(a) Limited's liability would have been had the obligation been
enforceable against Limited (except to the extent that ABN is
liable to pay or reimburse a party under clause 6.7); and
(b) such liability, costs, charges and expenses as ABN must incur
so as to comply with or procure that Limited complies with
Limited's
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obligations as if those obligations had been performed by
Limited in compliance with this agreement,
ABN unconditionally and irrevocably guarantees to each other party
Limited's compliance with Limited's obligations in connection with this
agreement.
If Limited does not comply with those obligations on time and in
accordance with this agreement, then ABN agrees to comply, or procure
that Limited will comply, with those obligations on demand from any
other party. A demand of ABN by another party may only be made at least
7 Business Days following a demand made on Limited by that other party
where Limited has failed to comply with such demand.
6.2 INDEMNITY
ABN indemnifies each other party against any liability or loss arising
from, and any costs, charges or expenses it incurs, if an obligation of
Limited under this agreement is unenforceable against, or a monetary
obligation due from Limited under this agreement cannot be recovered
from Limited, provided that ABN's liability under this clause 6.2 shall
in no event be greater than Limited's liability would have been had the
obligation been enforceable against Limited (except to the extent that
ABN is liable to pay or reimburse a party under clause 6.6).
ABN agrees to pay amounts due under this clause no later than 7
Business Days following a demand from any other party, if ABN is so
liable under this clause.
6.3 EXTENT OF GUARANTEE AND INDEMNITY
The guarantee in clause 6.1 is a continuing obligation despite any
intervening payment, settlement or other thing and extends to all of
Limited's obligations in connection with this agreement. ABN waives any
right it has of first requiring any other party to commence proceedings
or enforce any other right against Limited or any other person before
claiming from ABN under this clause 6.
6.4 RIGHTS OF EACH OTHER PARTY ARE PROTECTED
The rights given to each other party under the guarantee in this clause
6, and ABN's liabilities under it, are not affected by any act or
omission of any other party or any other person. For example, those
rights and liabilities are not affected by:
(a) any act or omission releasing Limited or giving Limited a
concession (such as more time to pay);
(b) any variation or replacement of this agreement, approved in
writing in advance by ABN; or
(c) acquiescence or delay by any other party or any other person.
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6.5 ABN'S RIGHTS ARE SUSPENDED
As long as any obligation is required, or may be required, to be
complied with in connection with the guarantee in this clause 6, ABN
may not, without any other party's consent:
(a) exercise any legal right to claim to be entitled to the
benefit of another guarantee of Limited's obligations,
indemnity, mortgage, charge or other encumbrance given in
connection with this agreement or any other amount payable
under the guarantee in this clause 6;
(b) claim an amount from Limited, or another guarantor, under a
right of indemnity; or
(c) claim an amount in the liquidation, administration or
insolvency of any other guarantor of Limited's obligations.
6.6 REINSTATEMENT OF RIGHTS
Under law relating to liquidation, administration, insolvency or the
protection of creditors, a person may claim that a transaction
(including a payment) in connection with the guarantee in this clause 6
or this agreement is void or voidable. If a claim is made and upheld,
conceded or compromised, then:
(a) each other party is immediately entitled as against ABN to the
rights which it would have had if the claim had not been so
made and upheld, conceded or compromised, but only to the
extent that such rights have been prejudiced by such claim;
and
(b) on request from any other party, ABN agrees to do anything
commercially reasonable (including signing any document) to
restore to each other party any mortgage, charge or other
encumbrance (including the guarantee under this clause 6) held
by it from ABN immediately before the transaction.
6.7 COSTS
If a Claim is made under this guarantee and indemnity, then if the
Claim is successful, ABN must pay or reimburse each other party on
demand for:
(a) that other party's costs, charges and expenses in making and
enforcing a valid claim against it in connection with the
guarantee and indemnity under this clause 6 including legal
costs, charges and expenses on a full indemnity basis; and
(b) all duties, fees, Taxes and charges which are payable in
connection with the valid claim against it in connection with
this guarantee and indemnity or a payment or receipt arising
from such claim.
6.8 CONSIDERATION
ABN acknowledges that each other party is acting in reliance on ABN
incurring obligations and giving rights under the guarantee and
indemnity in this clause 6.
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7 STAGES I, II AND III
7.1 STAGES OF REPAYMENT AND REDEMPTION
The rights and obligations of the Company, SPV, Limited, ABN and Xxxxx
Xxxx under this agreement vary depending on whether the Company is in
Stage I, Stage II or Stage III. If a right or obligation is not
expressed to apply specifically to only Stage I, Stage II and/or Stage
III, then it applies during all Stages.
7.2 STAGE I
Stage I commences on the Completion Date and continues until either
Stage II or Stage III commences or termination of this agreement
pursuant to clause 25 (whichever is the earlier).
7.3 STAGE II
Stage II commences upon the following events occurring and continues
until Stage III commences or termination of this agreement pursuant to
clause 25 (whichever is the earlier). Those events are that before 1
July 2007:
(a) either
(i) the amounts owing under the Senior Secured Debt have
been reduced by:
(A) repayment of A$23 million of the amounts
owing under the Cash Advance Facility and the LC
Facility; and
(B) payment of Capitalised Interest, payment in
full of all other interest (whether capitalised
or not) owing under the Senior Debt Facility
Agreement and payment of all other amounts due
and payable under the Senior Debt Facility
Agreement; or
(ii) the Lenders have received an amount equal to the
amounts referred to in clause 7.3(a)(i) pursuant to
repayment or refinancing of the Senior Secured Debt
pursuant to clause 17.3; but
(b) the Class A Preference Shares have not all:
(i) been redeemed for their full issue price being $22
million;
(ii) been bought back or purchased for an amount equal to
their full issue price being $22 million; or
(iii) received an amount in total equal to their full issue
price being $22 million by any combination of (i) to
(ii) above.
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7.4 STAGE III
Stage III commences upon the following events occurring. Those events
are that before 1 July 2007:
(a) either:
(i) the amounts owing under the Senior Secured Debt have
been reduced by:
(A) repayment of A$23 million in respect of
repayment of the of the amounts owing under
the Cash Advance Facility and the LC
Facility; and
(B) payment of Capitalised Interest, payment in
full of all other interest (whether
capitalised or not) owing under the Senior
Debt Facility Agreement and payment of all
other amounts due and payable under the
Senior Debt Facility Agreement; or
(ii) the Lenders have received an amount equal to the
amounts referred to in clause 7.4(a)(i) pursuant to
repayment or refinancing of the Senior Secured Debt
pursuant to clause 17.3; and
(b) the Class A Preference Shares have all:
(i) been redeemed for their full issue price being $22
million;
(ii) been bought back or purchased for an amount equal to
their full issue price being $22 million; or
(iii) received an amount in total equal to their full issue
price being $22 million by any combination of (i) to
(ii) above.
7.5 IMPLEMENTATION OF STAGE II
Upon the day on which the events in clause 7.3 occur, the Company and
the Shareholders must take the following steps:
(a) the Company will cancel Xxxxx Xxxx'x share certificate in
respect of his Deferred Shares;
(b) Limited must deliver to the Company its share certificate in
respect of its Deferred Shares; and
(c) the Company must:
(i) cancel the share certificates relating to Xxxxx
Xxxx'x Deferred Shares and register him as the holder
of 20 Ordinary Shares;
(ii) cancel the share certificates relating to Limited's
Deferred Shares and register Limited as the holder of
110 Ordinary Shares;
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(iii) issue share certificates to Xxxxx Xxxx for 154
Deferred Shares and 20 Ordinary Shares; and
(iv) issue share certificates to Limited for 586 Deferred
Shares and 110 Ordinary Shares.
7.6 IMPLEMENTATION OF STAGE III
Upon the day on which the events in clause 7.4 occur, the Company and
the Shareholders must take the following steps:
(a) the Company will cancel Xxxxx Xxxx'x share certificate in
respect of his Deferred Shares;
(b) Limited must deliver to the Company its share certificate in
respect of its Deferred Shares; and
(c) the Company must:
(i) cancel share certificates relating to all of Xxxxx
Xxxx'x Deferred Shares and register him as the holder
of 174 Ordinary Shares;
(ii) cancel share certificates relating to all of
Limited's Deferred Shares and register Limited as the
holder of 696 Ordinary Shares;
(iii) issue a Share Certificate to Xxxxx Xxxx for 174
Ordinary Shares; and
(iv) issue a Share Certificate to Limited for 696 Ordinary
Shares,
in each case the number of Shares referred to in (i) to (iv)
above being subject to adjustment to take into account any
Shares already issued to Xxxxx Xxxx or ABN under clause 7.5.
7.7 RETURN OF VALUE TO HOLDERS OF PREFERENCE SHARES
Unless otherwise agreed, value shall only be returned to the holders of
Preference Shares, as follows:
(a) either:
(i) subject to clause 7.8, by redemption of the
Preference Shares for their full issue price out of
the proceeds of a fresh issue of shares by the
Company; or
(ii) subject to clause 7.8, if the Preference Shares are
not redeemed under (i) above, then by the holders of
the Preference Shares accepting an offer by the
Company to buy back the Preference Shares for an
amount equal to their full issue price and otherwise
on terms consistent with this agreement and the
Constitution, and the Shareholders agree that they
must accept any such offer when it is made within 5
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Business Days of receipt of a written offer by the
Company under this paragraph (ii) (There will not be
constituted in any circumstances an agreement to buy
back any Preference Shares until the Shareholder
notifies its acceptance of the offer to the Company);
or
(b) by declaration and payment of dividends on the Preference
Shares; or
(c) by payment of consideration by a third party for purchase of
the Preference Shares; or
(d) on a winding up, in accordance with their rights set out in
schedule 1 of the Constitution.
7.8 ELECTION OF HOLDERS OF CLASS B PREFERENCE SHARES
If Limited and Xxxxx Xxxx notify the Company in writing not less than 5
Business Days prior to any proposed redemption or buy-back under clause
7.7(a), that they waive their entitlement to have their Class B
Preference Shares redeemed or bought back under clause 7.7(a), then
notwithstanding any other provision of this agreement and the
Constitution, the holders of Class A Preference Shares will be paid the
amount required for their Class A Preference Shares to be bought back
or redeemed in accordance with this agreement and the Constitution
without the holders of Class B Preference Shares receiving the amount
required for their Class B Preference Shares to be bought back or
redeemed. The rights of the Class B Preference Shares, after the
buy-back or redemption of the Class A Preference Shares, continue
unaffected.
8 SHAREHOLDER RIGHTS
8.1 CLASSES OF SHARES
After Completion on the Completion Date, the Company will have on issue
Ordinary Shares, Deferred Shares, Class A Preference Shares and Class B
Preference Shares as described in Recital B. The rights attaching to
each of these classes of Shares are as set out in the Constitution.
8.2 SHAREHOLDERS NOT TO EXERCISE BOARD POWERS
If a matter has been reserved for the decision of the Board under
clause 9, then the Shareholders will not have the power or authority to
exercise decision making rights as Shareholders in respect of that
matter.
9 BOARD CONTROL
9.1 ROLE OF THE BOARD
Subject to clause 10, the Board is responsible for:
(a) the overall direction and management of the Company;
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(b) the formulation of the policies to be applied in the Business;
and
(c) any matters outside the ordinary course of the Business or
which are material to the financial performance of the Company
and the Subsidiaries.
9.2 MATTERS TO BE DETERMINED BY THE BOARD
Subject to clause 9.15, each of the matters listed in schedule 2 is to
be reserved to the Board for determination by a Board resolution in
accordance with clauses 9.3 and 12.7.
9.3 VOTING BY THE BOARD
Subject to clause 9.15 and the Constitution, each Director is entitled
to vote on all resolutions of the Board. However, the voting rights of
each Director for each Stage shall be as follows:
STAGE I STAGE II STAGE III
% OF VOTES % OF VOTES % OF VOTES
1 SPV 51% 51% 50%
Representative(s)
(together)
2 ABN 16 1/3% 16 1/3% 40%
Representative
3 Managing 16 1/3% 16 1/3% 10%
Director
4 Chairman 16 1/3% 16 1/3% 0%
100% 100% 100%
provided that in Stage III, if at any time during Stage III Xxxxx Xxxx
does not continue to hold the position of Managing Director, he shall
be entitled to appoint one Director from time to time who shall have
the votes set out in the above table for the Managing Director for
Stage III (and for so long as he so nominates a director, the votes
exercisable in that Stage III by any serving Managing Director shall be
0%).
Any reference in this agreement to a decision, resolution or discretion
being made, agreed or determined by the Board, or similar expression,
shall be determined on the basis of the weighted voting proportions
described above.
If there are two SPV Representatives present, each SPY Representative
exercises half of the votes specified in row 1 of the table above, but
if there is only one SPY Representative or only one SPY Representative
is present he exercises all of the votes specified in row 1 of the
table above.
If there is no representative appointed or present for any of the
positions listed in the above table (including if the Chairman is not
fulfilling the role of Chairman at the meeting in question), then
subject to the presence of a quorum the weighted voting rights set out
in the table above which may be
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cast by each representative who is present will be increased pro rata
to one another so that the total weighted votes exercised together
equal 100%. By way of illustration, if there is no ABN Representative
appointed or present then the votes that may be cast would be as set
out in the following table for the relevant Stage:
STAGE I STAGE II STAGE III
% OF VOTES % OF VOTES % OF VOTES
1 SPV 61% 61% 83 1/3%
Representative(s)
(together)
2 Managing Director 19.5% 19.5% 16 2/3%
3 Chairman 19.5% 19.5% 0%
100% 100% 100%
9.4 MAXIMUM NUMBER OF DIRECTORS
The maximum number of Directors will be five.
9.5 COMPOSITION OF THE BOARD
On and from the Completion Date, the Board will comprise:
(a) a Chairman;
(b) one or two SPV Representative(s);
(c) an ABN Representative; and
(d) a Managing Director.
9.6 INITIAL DIRECTORS
The initial Directors are:
(a) Xxxxx Xxxxxxxx as Chairman;
(b) Xxxx Xxxxxx as SPV Representative;
(c) Xxxxxx Xxxxxx as ABN Representative; and
(d) Xxxxx Xxxx as Managing Director.
9.7 NOMINEE DIRECTORS
The following applies to the ABN Representative and the SPV
Representative(s) (or as otherwise specified):
(a) ABN may appoint one Director and the SPV may appoint up to two
Directors from time to time;
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(b) a Director appointed under (a) above automatically ceases to
be a Director if their appointing Shareholder ceases to hold
any Shares in the Company;
(c) subject to the Corporations Act, and to paragraph (b), a
Director may only be removed by their appointing Shareholder;
(d) an appointment or removal under this clause 9.7 must be by
written notice to the Company, signed by a director or officer
of the Shareholder. The notice takes effect immediately upon
receipt by the Company, or at any later time specified in the
notice; and
(e) subject to the Corporations Act:
(i) the Shareholders acknowledge that a Director
appointed by SPV does not have the capacity and is
not entitled to bind the SPV or any of the members of
the SPV in any dealings with the Company or a third
party;
(ii) in addition to any rights a Shareholder may have to
information under clause 16.1,16.2,16.3 and 16.4 of
this agreement, a Director appointed under clause
9.7(a) may, except to the extent to which such
information is subject to confidentiality or privacy
obligations of the Company or the Subsidiaries,
disclose any information that becomes known to the
Director as a result of the Director's position, to
the Director's appointees and its shareholders and
their Related Bodies Corporate; and
(iii) each of ABN and SPV must procure that each Director
it has appointed gives to the other Directors (and
any new Directors appointed to the Board) a standing
notice, in accordance with section 192 of the
Corporations Act, notifying the other Directors that
their role as a nominee director may result in them
having an interest in certain matters which may come
before the Board with the result that they may be put
in a position of conflict.
9.8 CHAIRMAN
The Chairman of the Board will be determined from time to time by the
Directors.
If the Chairman is not present within 20 minutes after the time
appointed for the holding of a meeting of the Board, or is unable or
unwilling to act, the Directors present must appoint an alternative
chairman for that meeting.
9.9 NO CASTING VOTE
The Chairman is entitled to vote on resolutions of the Board in
accordance with clauses 9.3 and 9.15. The Chairman is not entitled to a
casting vote.
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9.10 DUTIES OF DIRECTORS
The Directors must act in accordance with their duties under the
Corporations Act. Subject to those obligations:
(a) the Shareholders acknowledge that a Director appointed under
clause 9.7(a) is appointed to specifically represent the
interests of their appointer on the Board, that a Director so
appointed may have regard to and represent the interests of
their appointor, and that a Director so appointed may act on
the wishes of their appointor in performing any of his duties
or exercising any power, right or discretion as a Director,
except (in each case) where no honest and reasonable director
could have formed the view that, in so doing, the Director was
acting in good faith in the best interests of the Company; and
(b) subject to clause 9.15, and provided that notice or standing
notice of an interest has been given in accordance with
sections 191 and 192 of the Corporations Act, each Director is
allowed, to the maximum extent permitted by law, to vote even
when in a position of conflict.
9.11 DIRECTORS AND OFFICERS' INSURANCE
The Company must, to the full extent permitted by law and subject to
the provisions of the Constitution, purchase and maintain insurance for
each Director against any liability incurred by the Director as an
officer of the Company and the Subsidiaries including, but not limited
to, liability for negligence, and for reasonable costs and expenses
incurred in defending proceedings, whether civil or criminal.
9.12 DIRECTORS INDEMNITY AND INSURANCE
The Constitution will provide an authority for the Company to:
(a) give an indemnity to the Directors; and
(b) pay insurance premiums in relation to directors and officers'
insurance for the Directors,
[and the Company will resolve to give such an indemnity and pay such
premiums at the Board meeting of the Company held at Completion.]
9.13 DIRECTORS' FEES
All fees payable to any non-executive Director must be at market rates
as reasonably determined by the Board in its discretion.
9.14 EXPENSES OF DIRECTORS
(a) Subject to clause 9.14(b), a non-executive Director except the
ABN Representative is entitled to be reimbursed out of the
funds of the Company reasonable economy fare traveling,
accommodation and other expenses which the Director incurs
when traveling to or from meetings or when otherwise engaged
in the business of the Company.
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(b) The ABN Representative is entitled to be reimbursed out of the
funds of the Company reasonable business class fare traveling,
accommodation and other expenses which the Director incurs
when traveling to or from one board meeting each year plus to
or from any additional board meeting or other meetings in
respect of which the board reasonably determines that his
physical presence at that board meeting is in the best
interests of the Company and he chooses to so attend.
9.15 CONFLICTS
During Stage I or Stage II, the SPV Representative may:
(a) notify the Board that the subject matter of a resolution,
proposal, determination or other matter before the Board puts
or may put the SPV Representative in a position of conflict;
and
(b) request that the matter be referred to the Chairman for
resolution instead of being determined by the Board.
If the SPV Representative makes a request under (b) above, the Board
shall have no power to pass any resolution, make any proposal, make a
determination or take any other steps in relation to a matter which is
subject to such a request. The power to so determine the matter shall
vest exclusively with the Chairman whose decision shall for the
purposes of this agreement be treated as it if were a decision made by
resolution of the Board.
9.16 SUBSIDIARIES
Clauses 9.2 to 9.16 also apply to the Subsidiaries and their boards of
directors.
10 CONSENTS FROM SHAREHOLDERS
10.1 SALE WITHIN FIRST YEAR
The parties agree that before the first anniversary of the Completion
Date:
(a) the Company may not enter into a contract for a Trade Sale;
and
(b) the Shareholders may not sell any of the Shares,
without ABN's and Xxxxx Xxxx'x prior written consent, unless at the
date of such a sale, which in any event shall occur no earlier than 90
days after Completion, the Company is in Material Adverse Performance,
in which case such consent is not required under this clause 10.1 and
the sale must:
(c) if the sale is a Trade Sale, be implemented in accordance with
clauses 27 and 27A (as otherwise applicable); and
(d) if the sale is a sale of Shares, be implemented in accordance
with clauses 20, 27 and 27B (as otherwise applicable),
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as if the sale was after the first anniversary of the Completion Date.
10.2 TRANSACTION WITH RELATED PARTY
The parties agree that:
(a) the Company may not without ABN's prior written consent:
(i) enter into a contract for a Trade Sale; or
(ii) agree to provide services other than on arms' length
terms; and
(b) the Shareholders may not without ABN's prior written consent
sell any of the Shares,
in each case to a shareholder in SPV or a Related Body Corporate of any
shareholder in the SPV or to the SPV.
10.3 CHANGE TO INDEBTEDNESS IN ABSENCE OF BREACH
The Company may not until the Equity Vesting End Date without ABN's
prior written consent:
(a) make a material change to the terms of the Senior Secured Debt
Documents which makes the obligations of the Company or any
Subsidiary under the Senior Secured Debt Documents materially
more onerous on the Company or any Subsidiary; or
(b) increase the Senior Secured Debt by, or incur additional
borrowings of, more than $500,000 in aggregate but excluding:
(i) asset leases, finance leases or other similar lease,
hire purchase or rental agreements;
(ii) borrowings incurred for the purpose of redeeming,
buying back or purchasing the Preference Shares as
contemplated under clause 7.4(b); and
(iii) borrowings incurred for the purpose of refinancing
the Senior Secured Debt and Preference Shares such
that the events in clauses 7.3 or 7.4 occur,
unless:
(A) the Company or a Guarantor is in breach of
the Senior Secured Debt Documents or the
Board has reasonably determined that it
reasonably expects the Company or a
Guarantor will within one year from the date
of the Board's determination become in
breach of the Senior Secured Debt Documents;
or
(B) the change or increase is only implemented
in connection with a sale in accordance with
clause 20.1
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and under which SPV, Xxxxx Xxxx, Limited and
ABN all cease to own any Shares in the
Company,
in which case such consent is not required.
10.4 CHANGE TO INDEBTEDNESS DURING BREACH
If prior to the Equity Vesting End Date the Company or a Guarantor is
in breach of the Senior Secured Debt Documents or the Board has
reasonably determined that it reasonably expects the Company or a
Guarantor will within one year from the date of the Board's
determination become in breach of the Senior Secured Debt Documents,
then the Company may only take the steps in clauses 10.3(a) or (b):
(a) to the extent that:
(i) the steps are reasonably considered by the Board as
necessary to remedy the existing breach or prevent
the expected breach of the Senior Secured Debt
Documents; and
(ii) the Board passes a resolution recommending the steps
referred to in clause 10.4(a) above which has the
support of at least two Directors (who may both be
SPV Representatives), unless the SPV Representative
has made a request under clause 9.15(a) to refer the
matter to the Chairman (in which case a decision of
the Chairman recommending such steps shall be treated
as a resolution which satisfies the requirements of
(i) above and of this clause (ii)); or
(b) if the change or increase is only implemented in connection
with a sale in accordance with clause 20.1 and under which
SPV, Xxxxx Xxxx, Limited and ABN all cease to own any Shares
in the Company.
Until the Equity Vesting End Date, such steps will otherwise require
the prior written consent of ABN.
10.5 ACQUISITION OF BUSINESS
The Company or any Subsidiary may not before the Equity Vesting End
Date without ABN's prior written consent acquire a new going concern
undertaking, whether by purchase of assets, shares or other transaction
having a similar effect, which is material to the Company in the
context of the Business which it and the Subsidiaries are carrying on
as at the Completion Date.
10.6 ISSUE OF SECURITIES IN SUBSIDIARIES
A Subsidiary may not until the Equity Vesting End Date without ABN's
prior written consent issue any Securities, other than to its immediate
holding company (as defined in the Corporations Act) from time to time
of that Subsidiary.
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11 CHAIRMAN, MANAGING DIRECTOR AND CHIEF FINANCIAL OFFICER
11.1 DAY-TO-DAY MANAGEMENT
Subject to clause 9.2, the Company and the Subsidiaries will be managed
on a day-to-day basis by the Managing Director within defined limits as
delegated by the Board from time to time. The Managing Director will
report to, and be responsible to, the Board. The initial such
delegation is on the terms of the MD Delegation Resolution set out in
schedule 6.
11.2 APPOINTMENT OF CHAIRMAN AND MANAGING DIRECTOR
Subject to clause 9, the Board may:
(a) appoint, remove and replace the Chairman and the Managing
Director; and
(b) delegate any of its powers, on terms which are subject to
amendment from time to time, to the Managing Director.
11.3 APPOINTMENT OF CHIEF FINANCIAL OFFICER
The parties agree that it is intended that a Chief Financial Officer is
identified and appointed as soon as reasonably practicable after
Completion. The Company will identify potential candidates for
appointment by the Board. The Chief Financial Officer will report to
the Managing Director and otherwise be appointed, removed and replaced
(subject to clause 9) by the Board.
11.4 EMPLOYMENT AGREEMENT
The Managing Director from time to time must enter into a service
agreement on terms approved by the Board. The SPV and ABN acknowledge
that Xxxxx Xxxx has entered into an service agreement dated 24 December
1999 (as amended in June 2001, June 2003) and that the terms of his
employment following Completion will be governed by his Service
Agreement.
11.5 SALARY
The Manager Director will receive remuneration only in accordance with
the terms of his employment agreement.
12 MEETINGS AND RESOLUTIONS
12.1 SHAREHOLDER RESOLUTIONS AND DEADLOCK
Subject to the Corporations Act, all Shareholder resolutions will be
passed by Majority Resolution. A written resolution signed by the
number of Shareholders (who are entitled to vote and are not
disqualified from voting on that resolution) which would be sufficient
to pass that resolution at a meeting of Shareholders is taken to be a
resolution of Shareholders without the need for a meeting.
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If during Stage III the Shareholders are unable to pass a resolution
due to an equal number of votes being cast for and against the
resolution, that constitutes a Deadlock which must be submitted for
attempted resolution in accordance with clause 13.
12.2 FREQUENCY OF DIRECTORS MEETINGS
The Directors must meet at least six times a year or more frequently as
otherwise resolved by the Board. The Directors may agree the dates for
meetings of Directors for each calendar year. Any changes or additions
to the agreed dates must be agreed to by the Directors in accordance
with clause 9.3.
12.3 TIMING OF DIRECTORS MEETINGS
Each meeting of Directors must as far as reasonably practicable be held
at a time convenient to all the Directors (taking into account
different time zones) and must be held at a location where a telephone
conference facility is available.
12.4 DIRECTORS MEETING QUORUM
Subject to clause 12.6, the quorum for a meeting of Directors is two,
of whom at least one must be a SPV Representative (unless a SPV
Representative consents in writing to the meeting proceeding without
any SPV Representative) and at least one must be a director who is not
a SPV Representative.
12.5 ADJOURNMENT OF DIRECTORS MEETING IF NO QUORUM
If a quorum is not present at a meeting of Directors within one hour
from the time stated in the notice of meeting, the meeting must be
adjourned to the same time and place on the next Business Day. Each
Director must be notified of the adjourned meeting.
12.6 QUORUM AT ADJOURNED DIRECTORS MEETING
If a quorum is not present at the adjourned meeting under clause 12.5
within one hour after the time notified for the meeting:
(a) in respect of a meeting convened during Stage I or Stage II,
the quorum will be any two Directors of the Company provided
that at least one is an SPV Representative and if no SPV
Representative is present that constitutes a Deadlock which
must be submitted for attempted resolution in accordance with
clause 13 but which may alternatively be resolved by the
holding of a Directors meeting prior to resolution in
accordance with clause 13 provided that the quorum
requirements of clause 12.4 are complied with; and
(b) in respect of a meeting convened during Stage III the quorum
at the second adjourned meeting will be any two Directors of
the Company.
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12.7 DIRECTORS RESOLUTIONS AND DEADLOCK
All Directors resolutions must be decided by a simple majority vote (as
weighted under clause 9.3 and subject to clauses 9.15 and 10.4(b)) of
the Directors who are present (and who are entitled to vote and are not
disqualified from voting on that resolution). For the avoidance of
doubt a sole Director may be entitled to pass a Directors resolution
under this clause.
If the Directors are unable to pass a resolution due to an equal number
of votes being cast for and against the resolution, that constitutes a
Deadlock which must be submitted for attempted resolution in accordance
with clause 13.
12.8 CIRCULATING RESOLUTIONS OF DIRECTORS
A written resolution signed by all the Directors (who are entitled to
vote and are not disqualified from voting on that resolution) is taken
to be a decision of the Board, without the need for a meeting.
12.9 NOTICE OF DIRECTORS MEETINGS
Each Director must receive at least five Business Days' written notice
of each meeting of Directors unless:
(a) all the Directors agree otherwise in writing; or
(b) two Directors of whom at least one is a SPV Representative
(but both may be SPV Representatives) agree in writing that
urgent circumstances require a more rapid holding of a Board
Meeting than such notice permits, in which case each Director
must be given as much notice as is reasonable and practicable,
in the circumstances and in any event not less than one
Business Days written or verbal notice;
(c) the meeting is an adjourned meeting under clause 12.5.
12.10 BUSINESS AT MEETING
The only business that may be transacted at a Directors meeting or an
adjourned Directors meeting is the business specified in the original
notice convening the meeting (or accompanying agenda).
13 DEADLOCK
13.1 REFERENCE TO SENIOR EXECUTIVES
If a Deadlock arises, the parties involved in the Deadlock must
escalate the matter to:
(a) the senior executives of the SPV, Limited and ABN who are:
(i) in respect of the SPV - ; and
(ii) in respect of Limited and ABN, Xxxxxx Xxxxxx; and
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(b) Xxxxx Xxxx,
together "DEADLOCK REPRESENTATIVES".
13.2 RESOLUTION BY DEADLOCK REPRESENTATIVES AND MEDIATION
If the Deadlock Representatives are unable to resolve the Deadlock
within 1 month of referral of the matter to them, they must refer the
Deadlock to a mediator to attempt to facilitate a resolution of the
Deadlock in accordance with clauses 24.6 and 24.7.
14 AGREEMENTS BETWEEN THE COMPANY AND ITS SHAREHOLDERS
14.1 NO EXISTING AGREEMENTS
Each of the Shareholders warrants that as at the Completion Date they
are not party to any agreement or other arrangement (whether written or
unwritten) with the Company or Subsidiaries other than as specifically
disclosed in schedule 3 of this agreement or otherwise referred to in
this agreement.
14.2 FUTURE AGREEMENTS
Any agreement between the Company or a Subsidiary and a Shareholder (or
a Related Body Corporate of a Shareholder) entered into after the
Completion Date must be notified on reasonable prior written notice to
all other Shareholders.
15 BUDGET, BUSINESS PLAN AND ACCOUNTS
15.1 DRAFTS TO BE PREPARED
The initial Budget and Business Plan for the Company for the financial
year ending 31 December 2004 are attached as annexure A. The Board
shall from time to time determine any changes to the form and content
of the draft Budget and Business Plan for subsequent years. For each
subsequent year, the Managing Director must submit a draft Budget and
Business Plan to the Board for its approval, at least 30 days before
the end of the previous financial year.
15.2 BOARD TO CONSIDER DRAFTS
The Board will consider and vote on each draft Budget and Business Plan
at least 15 days before the commencement of the period to which it
relates. The Board may approve a Budget and Business Plan with or
without amendment, and may give conditional or unconditional approval
of any item in the Budget or Business Plan.
15.3 APPROVAL OF BUDGET
If the Board approves an item in the draft Budget, the Managing
Director and the Company are authorised to take any relevant action and
incur all
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expenditure approved in the draft Budget for that matter, subject to
compliance with any condition of that approval.
15.4 AUDIT
The consolidated Accounts of the Company and the Subsidiaries must be
audited annually by the Auditor as soon as practicable but, commencing
with the 2005 financial year, no later than 120 days after the end of
each financial year (or by a later date with the consent of SPV such
consent not to be unreasonably withheld where the Company has been
given an extension of time to file its annual Accounts with the
relevant Government Agency).
16 REPORTING OBLIGATIONS
16.1 ACCESS
Subject to the confidentiality obligation contained in clause 21 and
subject to any confidentiality agreement or obligation to any customer
or third party, the Company will give each Shareholder and its
Representatives access at the cost of the requesting Shareholder to the
Records of the Company at all reasonable times, on reasonable notice.
16.2 INFORMATION TO SHAREHOLDERS
The Company will provide to each Shareholder:
(a) (MONTHLY REPORTS) within 15 Business Days after the end of
each month, monthly management accounts for Xxxxx Xxxxxx, LM
Taiwan and the LM Group, including:
(i) financial covenant calculations in relation to the
Group;
(ii) balance sheet;
(iii) profit and loss statement;
(iv) cashflow statement in the form set out in Schedule 8,
in relation to Xxxxx Xxxxxx from the Completion Date
and in relation to LM Taiwan and the LM Group from 1
July 2004; and
(v) an executive summary:
(A) comparing the monthly financial results to
the Cash Flow Projections (including an
explanation of any material variances); and
(B) detailing the progress made in achieving
targets set out in the Profit Improvement
Plan (including an explanation of any
material variances);
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(b) (QUARTERLY ACCOUNTS) within 15 Business Days after the end of
each calendar quarter (or such other time as agreed by the
Company and the Agent), quarterly management accounts for the
Company and the Subsidiaries, in a form approved by the Board,
which (until the Board decides otherwise) will include the
following:
(i) a copy of the operating forecast for the current
calendar quarter for the Group, LM Taiwan and the SDL
Division and Cards and ID Systems Division of Xxxxx
Xxxxxx in the form set out in Schedule 9 and
attaching an executive summary; and
(ii) a forecast cash flow statement for the current
calendar quarter for Xxxxx Xxxxxx, and from 1 July
2004 LM Taiwan in the form of Schedule 10;
(c) (ANNUAL ACCOUNTS) as soon as practicable,
(i) (but no later than 140 days) after the close of its
financial year 2003 a copy of its consolidated
audited Accounts;
(ii) (but no later than 120 days) after the close of each
of its financial years after 2003, copies of its
consolidated audited Accounts; and
(iii) (but no later than 150 days), in relation to each
financial year ending after 31 December 2003, copies
of its unconsolidated audited Accounts,
in respect of that financial year including balance sheets,
cashflow and profit and loss statements (or by any later date
with the consent of SPV such consent not to be unreasonably
withheld where the Company has been given an extension of time
to file its annual Accounts with the relevant Government
Agency); and
(d) (ADDITIONAL INFORMATION) any other information that a
Shareholder may at any time reasonably require, relating to
the Business, the Company or the Subsidiaries.
16.3 INFORMATION FROM THE COMPANY
The Company must, except to the extent to which such information is
subject to confidentiality or privacy obligations of the Company or the
Subsidiaries, give prompt written particulars of notice to the
Shareholders of:
(a) (MATERIAL CONTRACTS) the entry into or termination of any
material contracts including supplier agreements (excluding
leases) with an estimated annual expenditure exceeding
A$2.5 million (for the first year following Completion, with
this threshold increasing by 5% per year thereafter) and
client contracts with an estimated annual revenue to the
Company or the Subsidiaries exceeding A$5 million (for the
first year following Completion, with this threshold
increasing by 5% per year thereafter);
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(b) (OPERATING CHANGES) any material operating changes to the
Business and any events which will materially impact the
achievement of the Business Plan;
(c) (LITIGATION) any litigation, arbitration, Tax Claims,
administrative or other proceedings in relation to its assets
or the assets of its Subsidiaries involving a claim exceeding
$100,000 and, in the case of a dispute, involving a claim
exceeding $500,000 or, in each case, its equivalent, other
than a claim for worker's compensation;
(d) (COMPULSORY ACQUISITION) any proposal by a Government Agency
to acquire any assets or the Business of the Company or the
Subsidiaries or to dispose of or to limit the Company's or the
Subsidiaries' enjoyment of title to its freehold or leasehold
properties;
(e) (PURCHASE OFFERS) any proposal for the acquisition of the
Company, the Subsidiaries, the Business, or any major asset of
or substantially all of the assets of the Business;
(f) (DOCUMENTS) any material documents or material information
relating to the Business, the Company or the Subsidiaries
which may be relevant to a decision or proposed decision of
the Board or the Shareholders; and
(g) (OTHER MATTERS) any other matters reasonably requested in
writing by a Shareholder, at the cost of that Shareholder.
16.4 INFORMATION FOR ABN AND SPV
Notwithstanding and without prejudice to the Company's other
obligations under this clause 16, the Company shall on reasonable
request of a Shareholder, except to the extent to which such
information is subject to confidentiality or privacy obligations of the
Company or the Subsidiaries, provide that Shareholder with all
information concerning the Company and its Subsidiaries, necessary for
that Shareholder or (where appropriate) any of its shareholders and
their Related Bodies Corporate (as applicable) to comply with its legal
obligations to complete its audits, public filings, tax filings and
comply with all applicable laws.
SPV may provide information received under this clause 16 to its
shareholders and their Related Bodies Corporate, provided they agree to
keep such information confidential on the same terms as apply to SPV
under this agreement.
16.5 REMEDIES OF A SHAREHOLDER
If there is a material failure to provide any of the access, reports or
information referred to in clauses 16.1 to 16.3, each Shareholder has
the additional right, exercisable at any time in its discretion, to:
(a) direct an audit to be conducted of the affairs of the Company
in respect of the period for which (or the matter for which)
there has
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been a material failure to provide that access, reports or
information; and
(b) enter the premises occupied by the Company to search for,
inspect and take copies of the Records and accounts.
16.6 CONDUCT OF AUDIT
The audit referred to in clause 16.5 must be conducted by an
independent firm of auditors. The Company must give the auditors full
access to all premises and Records and accounts for the purpose of the
audit. The requesting Shareholder must agree to pay for the cost of any
audit or other action taken under clause 16.5.
16.7 OTHER RIGHTS
Nothing in clause 16.5 limits the remedies otherwise available to a
Shareholder for the failure of the Company to provide the access and
Records specified in clauses 16.1 to 16.3.
16.8 COSTS OF US AUDIT
The parties agree that if ABN is required to procure an audit of the
Company and its Subsidiaries in respect of the period 1 January 2004
until Completion in order to comply with its audit obligations under
the law of the United States, the Company must pay to the accounting
firm which undertakes such audit that firm's reasonable costs of
performing the audit up to a maximum cost to the Company of A$20,000,
as soon as practicable following receipt of an appropriate invoice from
the accounting firm.
17 GENERAL RIGHTS AND OBLIGATIONS OF SHAREHOLDERS
17.1 FUNDING
The parties acknowledge and agree that none of the Shareholders are
required to advance any funding to the Company or the Subsidiaries for
any reason whatsoever on and from the Completion Date. This clause 17.1
is without prejudice to the obligations of the Lenders under the Senior
Secured Debt Documents.
Subject to clause 10, if the Company requires additional funding
outside of the terms of, and to the extent specified in, the Deed of
Assignment, Amendment and Novation, this will be a matter for
consideration and resolution by the Board.
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17.2 DISTRIBUTION POLICY
Subject to clause 26 and to the Corporations Act, the amount of any
dividend payable to the Shareholders (if any) is at the discretion of
the Board.
17.3 REFINANCING
After the first anniversary of the Completion Date and until the Equity
Vesting End Date, the Company must review the opportunities available
for a Stage III Refinancing, or if that cannot be achieved on
reasonable commercial terms, for a Stage II Refinancing, within the
following timeframes:
(a) at least once in 2004 and at least once in 2005;
(b) from 1 January 2006 until 31 December 2006, at least once
every six months; and
(c) from 1 January 2007, at least once every three months, but in
any event the Company must actively review opportunities for a
Stage III Refinancing, or if that cannot be achieved on
reasonable commercial terms, for a Stage II Refinancing, from
that date until the Equity Vesting End Date,
with a view to implementing such a Stage III Refinancing or a Stage II
Refinancing (as appropriate) if the Board (acting reasonably)
determines that the terms available for the Stage III Refinancing or
Stage II Refinancing (as appropriate) are reasonable commercial terms.
18 FURTHER ISSUE OF SHARES
18.1 GENERAL PROHIBITION
The Company must not issue any New Securities except:
(a) with Limited's and Xxxxx Xxxx'x prior written consent and
provided that the subscriber for the New Securities enters
into an Accession Agreement (unless the subscriber is already
an existing party to this agreement); or
(b) for one of the following issues of Securities approved by a
resolution of the Board:
(i) (SHARE SCHEME) Securities issued to employees or
Directors of the Company under an Employee Incentive
Plan; or
(ii) (CAPITAL STRUCTURE) Securities issued in connection
with any Share split or dividend by the Company, or
on conversion of any convertible Securities, provided
that each holder of Deferred Shares must continue to
be entitled to convert his Deferred Shares into the
same proportion of the total number of Ordinary
Shares on issue after such event, as that to which he
would have been entitled before such event.
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19 DEALING WITH SHARES
19.1 TRANSFERS OF SHARES
A Shareholder may not Transfer any of its Shares except:
(a) with the prior written consent of each other Shareholder; or
(b) in accordance with clause 19.2 (Permitted family transfers by
Xxxxx Xxxx); or
(c) in accordance with clause 19.3 (Permitted transfers to a
Related Body Corporate); or
(d) in accordance with clause 20 (Transfers of all Ordinary
Shares),
and in each such case where the Transfer is of less than all of the
Shares provided that the transferee enters into an Accession Agreement
or other shareholders agreement approved by all parties who will
continue to be Shareholders after the Transfer.
19.2 PERMITTED FAMILY TRANSFER BY XXXXX XXXX
Xxxxx Xxxx may at any time transfer all of his Shares:
(a) to a Qualifying Relation; or
(b) to trustees to be held upon a Family Trust of Xxxxx Xxxx.
Where Shares are held by trustees upon a Family Trust under this clause
19.2:
(i) such Shares may on any change of trustee be
transferred to the new trustees of the Family Trust;
(ii) such Shares may at any time be transferred to any
person to whom the Shares could have been transferred
by Xxxxx Xxxx under this clause if he had remained
the holder of those Shares; and
(iii) if such Shares cease to be held upon a Family Trust
(otherwise than pursuant to a Transfer permitted
under this clause) or there cease to be any
beneficiaries of that Family Trust other than a
charity or charities, the trustees must immediately
transfer the Shares back to Xxxxx Xxxx.
Xxxxx Xxxx undertakes to procure compliance, by his Qualifying
Relations and any Family Trust which own Shares, with the terms of this
clause and the other provisions of this agreement as if they were party
to this agreement, and indemnifies the other parties to this agreement
against any liability or loss arising from, and any costs, charges or
expenses incurred, if such Qualifying Relations or Family Trust do not
comply with the terms of this agreement as if they were party to this
agreement.
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19.3 PERMITTED TRANSFERS TO A RELATED BODY CORPORATE OR FAMILY COMPANY
(a) Limited and SPV may at any time transfer all of their Shares
to a Related Body Corporate ("RELATED TRANSFEREE"), provided
that if the Related Transferee (or any subsequent Related
Transferee) will cease to be a Related Body Corporate of the
original Shareholder, then the original Shareholder and
Related Transferee must immediately Transfer the relevant
Shares back to the transferor of those Shares before the
Related Transferee ceases to be a Related Body Corporate.
Limited and SPV each undertake that, if they Transfer Shares
under this clause 19.3, then they will procure compliance by
their respective Related Transferee with the terms of this
clause and the other provisions of this agreement as if the
Related Transferee were party to this agreement, and each
indemnifies all the other parties to this agreement against
any liability or loss arising from, and any costs, charges or
expenses incurred, if their respective Related Transferee does
not comply with the terms of this agreement.
(b) Xxxxx Xxxx may at any time transfer all of his Shares to a
company which is wholly owned by one or more of Xxxxx Xxxx and
his Qualifying Relations ("FAMILY COMPANY"), provided that if
the Family Company will cease to be a company which is wholly
owned by one or more of Xxxxx Xxxx and his Qualifying
Relations, then Xxxxx Xxxx and the Family Company must
immediately Transfer the relevant Shares back to Xxxxx Xxxx
before the Family Company ceases to be a company which is
wholly owned by one or more of Xxxxx Xxxx and his Qualifying
Relations. Xxxxx Xxxx undertakes that, if he Transfers Shares
under this clause 19.3, then he will procure compliance by his
Family Company with the terms of this clause and the other
provisions of this agreement as if the Family Company were
party to this agreement, and Xxxxx Xxxx indemnifies all the
other parties to this agreement against any liability or loss
arising from, and any costs, charges or expenses incurred, if
his Family Company does not comply with the terms of this
agreement.
19.4 NO REGISTRATION WITH ACCESSION AGREEMENT
A person may not be registered as the holder of Shares (whether those
Shares have been acquired upon an issue or Transfer or otherwise)
unless the person is a party to this agreement, or has entered into an
Accession Agreement with the Company or other shareholders agreement
approved by all parties who will continue to be Shareholders after the
Transferor issue of shares.
19.5 GENERAL RESTRICTION ON ENCUMBRANCES OVER SHARES
A Shareholder may not create an Encumbrance over any of its Shares
without the prior written consent of each of the other Shareholders,
except that each of Xxxxx Xxxx and Limited may Encumber their Shares
("ENCUMBERED SHARES") on the following terms:
(a) Xxxxx Xxxx and Limited (as applicable) must remain the
registered holder of the Encumbered Shares at all times, and
the terms of the
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Encumbrance must not (until enforcement of the charge) place
the Shareholder under any obligation to exercise any of the
voting rights attached to the Encumbered Shares in accordance
with anyone else's directions or subject to anyone else's
consent;
(b) Encumbrances may only be taken by a Reputable Financial
Institution; and
(c) the Reputable Financial Institution must have complied with
the condition in clause 19.6.
19.6 CONDITION FOR GRANTING ENCUMBRANCE
The Reputable Financial Institution referred to in clause 19.5(b) must
undertake to the other parties to this agreement to be bound by the
terms of this agreement in respect of their interest in the Encumbered
Shares on the same terms as the grantor of the Encumbrance to the
Reputable Financial Institution is bound, prior to taking an
Encumbrance over the Shares. This must include releasing their interest
in the Encumbered Shares if those Shares are required to be Transferred
under the terms of this agreement or of the Supplemental Agreement,
regardless of whether the proceeds raised by such sale are sufficient
to satisfy in full the obligations which are secured by the
Encumbrance.
19.7 RELEASE OF ENCUMBRANCE AND POWER OF ATTORNEY
If immediately prior to a transfer of any Encumbered Shares under
clause 20 those Shares remain subject to any Encumbrance, the holders
of those Encumbered Shares must procure that such Encumbrance is
discharged and released before the settlement date for transfer of
those Encumbered Shares and completion of such sale under clause 20. If
the holders of such Encumbered Shares fail to deliver unencumbered
title to those Shares on such settlement date, then without prejudice
to any other rights or remedies available to the other parties, each
holder of Ordinary Shares (and its directors if it is a company) is
individually appointed as attorney of the defaulting party, with power
to deduct from the sale proceeds (to which the defaulting party is
otherwise entitled in accordance with clause 20) and apply to discharge
and release of the Encumbrance, such amount as is required to satisfy
the Encumbrance and procure delivery of clear unencumbered title to
those Shares to the purchaser(s) in accordance with clause 20.
20 PERMITTED SALE OF SHARES
20.1 PERMITTED SALE AFTER FIRST YEAR
On or after the first anniversary of the Completion Date (or earlier if
the exception in clause 10.1 applies because the Company is in Material
Adverse Performance) and during Stage I or Stage II (but for the
avoidance of doubt not in Stage III), SPV may implement a sale of all
(but not part only) of the Ordinary Shares in accordance with this
clause 20. SPV must apply the proceeds of sale of the Ordinary Shares
in accordance with clause 27.
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20.2 SALE NOTICE
If SPV proposes to implement a sale under clause 20.1, SPV must give a
Sale Notice to each other Shareholder. The Sale Notice must state:
(a) the identity of the purchaser(s);
(b) the total number of issued Shares being sold to the
purchaser(s), which must include all Ordinary Shares (and, if
applicable, any Deferred Shares which are entitled to convert
into Ordinary Shares on or prior to the sale under the terms
of the Constitution);
(c) how any Shares not being sold, and any remaining Senior
Secured Debt, is to be treated to the extent necessary to
satisfy the requirements of clause 27;
(d) the sale price and any other terms of the proposed Transfer to
the purchaser(s);
(e) that each other Shareholder is required and entitled to sell
its Ordinary Shares and (if applicable) any Deferred Shares
which are entitled to convert into Ordinary Shares on or prior
to the sale under the terms of the Constitution (if any), to
the purchaser at the sale price and on the Same Terms and
Conditions per Ordinary Share as SPV is selling each of its
Ordinary Shares, except that the other Shareholders must not
be required to give any warranties to the purchaser(s), other
than a warranty that they will give the purchaser clear
unencumbered title to their Ordinary Shares, including any
Deferred Shares which are entitled to convert into Ordinary
Shares on or prior to the sale under the terms of the
Constitution); and
(f) if SPV proposes to sell any Preference Shares, then each other
Shareholder is required and entitled to sell the same
proportion of its Preference Shares (if any) to the
purchaser(s) on the Same Terms and Conditions per Preference
Share as SPV is selling each of its Preference Shares, except
that
the other Shareholders must not be required to give any
warranties to the purchaser(s), other than a warranty that
they will give the purchaser (or other transferee as directed
on the terms of (c) above clear unencumbered title to their
Preference Shares), or as otherwise directed on the terms of
(c) above;
(g) if there are any remaining Deferred Shares not covered by (e)
above and SPV requires them to be transferred pursuant to
clause 20.5(a), that each holder of such remaining Deferred
Shares is required to sell those Deferred Shares (if any) to
the purchaser(s) (without being required to give any
warranties to the purchaser(s), other than a warranty that
they will give the purchaser (or other transferee as directed
on the terms of (c) above) clear unencumbered title to those
Deferred Shares), or as otherwise directed on the terms of (c)
above; and
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(h) the settlement date for completion of the sale, which (unless
otherwise agreed) must be not less than 10 days after the Sale
Notice is given.
20.3 EFFECT OF SALE NOTICE
If a Sale Notice is given, then the Shareholders must sell their
Ordinary Shares (and any other Shares specified under clause 20.2(f) or
(g)) to the purchaser(s), or as otherwise directed on the terms stated
in the Sale Notice.
SPV may not implement a sale under this clause 20 unless all Shares
required to be sold under the terms of the Sale Notice are sold in
accordance with that Sale Notice.
20.4 POWER OF ATTORNEY TO IMPLEMENT SALE NOTICE
If a Shareholder fails to complete the transfer of its Shares in
accordance with a Sale Notice, then SPV and each director of SPV is
individually appointed as the attorney of that Shareholder, with power
to transfer the Shares of that Shareholder in accordance with the Sale
Notice, to do everything else and sign all documents necessary to
implement the transfer of those Shares, and to receive the sale price
on trust for that Shareholder.
20.5 TRANSFER OF DEFERRED SHARES ON A SALE OF ORDINARY SHARES
If all of the Ordinary Shares are required or agreed to be, or are,
transferred to a third party in accordance with this agreement:
(a) the Company or any holder of Ordinary Shares may by written
notice to the holder(s) of Deferred Shares which are not
entitled to convert into Ordinary Shares on or prior to the
sale require them to Transfer these Deferred Shares for $10 in
aggregate to such person or persons as they direct (including
the Company), on the same date as the date of sale of the
Ordinary Shares; and
(b) Deferred Shares which are entitled to convert into Ordinary
Shares under the terms of the Constitution on or prior to the
sale will convert into Ordinary Shares and be transferred to
the purchaser(s) in accordance with the Sale Notice.
20.6 ELIMINATION OF REMAINING DEFERRED SHARES FROM 1 JULY 2007
If Deferred Shares remain on issue on or after 1 July 2007, which are
not entitled to convert to Ordinary Shares under the terms of the
Constitution, the Company or any other holder of Ordinary Shares may by
written notice to the holder(s) of Deferred Shares require them to
transfer their Deferred Shares for $10 in aggregate to such person or
persons as they direct (including the Company), as soon as practicable
after receipt of such notice.
20.7 POWER OF ATTORNEY FOR DEFERRED SHARES
If a holder of Deferred Shares fails to complete a transfer of its
Deferred Shares in accordance with clauses 20.5 or 20.6, then each
other holder of Ordinary Shares (and its directors if it is a company)
is appointed individually
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as the attorney of that holder of Deferred Shares, with power to
Transfer those Deferred Shares, to do everything else and sign all
documents necessary to implement the transfer of those Shares, and to
receive the sale price on trust for that holder of Deferred Shares.
21 CONFIDENTIAL INFORMATION
21.1 DISCLOSURE OF CONFIDENTIAL INFORMATION
No Confidential Information may be disclosed by a Shareholder to any
person except:
(a) with the written consent of the other Shareholders;
(b) in the case of Xxxxx Xxxx, to his Qualifying Relations or the
trustee of a Family Trust if a transfer of Shares pursuant to
clause 19.2 is contemplated;
(c) in the case of the Shareholders, to their Representatives;
(d) by Xxxxx Xxxx in his capacity as Managing Director of the
Company;
(e) if it is required to do so by law, a Government Agency or by a
stock exchange;
(f) to enforce or conduct any claim or proceeding which arises in
connection with this agreement or any associated agreement or
document;
(g) to any prospective purchaser of Shares who gives an
appropriate confidentiality undertaking to the prospective
seller, for the benefit of the Company and each Shareholder;
or
(h) in the case of SPV or ABN, to its shareholders and their
Related Bodies Corporate.
21.2 DISCLOSURE BY RECIPIENT OF CONFIDENTIAL INFORMATION
Any party disclosing information under clause 21.1 must use all
reasonable endeavours to ensure that persons receiving Confidential
Information from it do not disclose the information except in the
circumstances permitted in clause 21.1.
21.3 USE OF CONFIDENTIAL INFORMATION
A party who has received Confidential Information from another party
must not use it except for the purpose of exercising its rights or
performing its obligations under this agreement.
21.4 EXCLUDED INFORMATION
Clauses 21.1, 21.2 and 21.3 do not apply to the Excluded Information.
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21.5 ANNOUNCEMENTS OR RELEASES
A party may not make press or other announcements or releases relating
to this agreement and the matters referred to in this agreement
containing information which is not already in the public domain
without the prior approval of the other parties to the form and manner
of the announcement or release. To the extent that the announcement or
release is required to be made by the party by law or by a stock
exchange, the disclosing party will advise the other parties as to the
content of any such announcement or release in sufficient time (to the
extent practicable) to give the other parties opportunity to object to
or injunct such proposed announcement or release.
21.6 RETURN OF CONFIDENTIAL INFORMATION
(a) Subject to clause 21.6(b) and to the rights of any person in
his or her capacity as a director of the Company or of any of
its Subsidiaries, upon ceasing to be a Shareholder, a party
must immediately deliver to the Company all documents or other
materials containing or referring to the Confidential
Information which are in their possession, power or control or
in the possession, power or control of persons who have
received Confidential Information under clause 21.1 or
otherwise confirm in writing that such information has been
destroyed, except to the extent that (in the case of the SPV)
it is entitled to that Confidential Information under the
terms of the Novation and Amendment Deed.
(b) Clause 21.6(a) shall only apply to ABN in relation to
documents or other materials received by or created by ABN
following Completion. Documents or other materials received by
or created by ABN before Completion shall remain subject to
the provisions of clauses 21.1 to 21.5, except that ABN agrees
that the only permitted disclosure which may be applicable to
it under clauses 21.1 and 21.2 after ABN has ceased to be a
Shareholder is where disclosure:
(i) is required by law, a Government Agency or by a stock
exchange; or
(ii) is necessary to enforce or conduct any claim or
proceeding which arises in connection with this
agreement or any associated agreement or document.
22 PROTECTION OF GOODWILL
22.1 RESTRAINT ON ABN AND XXXXX XXXX
For the sole purpose of protecting the other Shareholders in respect of
the goodwill of the Business:
(a) each of SPV, ABN and Xxxxx Xxxx undertake to the Company and
each other Shareholder that while they are a Shareholder they
will not:
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(i) be Involved in any capacity in any business or
activity which is the same as or similar to the
Business , or any material part of it. This
restriction applies throughout Australia Taiwan and
New Zealand;
(ii) solicit the custom for the supply of goods and/or
services in Australia, Taiwan or New Zealand of
anyone who was a customer or prospective customer of
the Company, its Subsidiaries or LM Gemplus at any
time within the 12 months prior to the date of this
agreement; or
(iii) entice away or endeavour to entice away from the
Company, the Subsidiaries or LM Gemplus any employee
or anyone who was an employee of the Company, any
Subsidiary or LM Gemplus in Australia, Taiwan or New
Zealand at any time during the 12 months prior to the
date of this agreement;
(b) each of SPV, ABN and Xxxxx Xxxx undertake to the Company and
each other Shareholder that they will not at any time use a
logo, symbol, trademark or business name identical or
deceptively similar to a trade xxxx or business name owned or
used by the Company or the Subsidiaries provided that, for the
avoidance of doubt, ABN may use the "ABN" logo, symbol,
trademark or business name anywhere in the world subject to
clause 22.1(c) and provided that this does not cause ABN to be
in breach of clause 22.1(a); and
(c) ABN will procure that neither of the following companies will
at any time after the Completion Date have a name
incorporating the words "ABN" or "American Banknote" or "Xxxxx
Xxxxxx" or any deceptively similar name:
(i) the company incorporated in the Commonwealth of
Australia with the Australian company number 072 664
692 and having at the date of this agreement the name
ABN Australasia Limited; or
(ii) the company incorporated in the Commonwealth of
Australia with the Australian Company Number 072 977
265 and having at the date of this agreement the name
American Banknote Pacific Pty Limited.
For the avoidance of doubt, nothing in this clause 22.1 is intended to
bind the members of SPV, as distinct from SPV itself.
22.2 RESTRAINT ON THE COMPANY
For the sole purpose of protecting the goodwill of ABN's continuing
business, the Company undertakes to ABN that:
(a) while Limited or ABN is a Shareholder, the Company and its
Subsidiaries will not:
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(i) be Involved in any capacity in any business or
activity which is the same as or similar to the US
Business of ABN as at the date of this agreement], or
any material part of it. This restriction applies
throughout the United States and South America;
(ii) solicit the custom for the supply or goods and/or
services in the United States or South America of
anyone who was a customer or prospective customer of
ABN at any time within the 12 months prior to the
date of this agreement; or
(iii) entice away or endeavour to entice away from ABN any
employee or anyone who was at any time during the 12
months prior to the date of this agreement an
employee of ABN in the United States or South
America; and
(b) the Company and its Subsidiaries will not at any time use a
logo, symbol, trademark or business name identical or
deceptively similar to a trade xxxx or business name owned or
used after the Completion Date by ABN provided that, for a
period of 60 days following Completion, the Company and its
Subsidiaries may continue to use stationery and other
materials which were purchased or ordered before Completion
despite the fact that these materials may contain logos,
symbols, trade marks or business names owned or used after the
Completion Date by ABN.
22.3 DELETION OF RESTRICTIONS
If any part of the Restraints are judged to go beyond what is
reasonable in the circumstances and necessary to protect the business
which is the subject of the relevant Restraint, but would be judged
reasonable and necessary if any activity were deleted or a period or
area reduced, then the relevant Restraint applies with that activity
deleted or period or area reduced by the minimum amount necessary to
make that Restraint reasonable in the circumstances.
22.4 SEVERANCE
Each of the Restraints has effect as a separate and severable
prohibition or restriction and is to be enforced accordingly.
22.5 SHARES IN A PUBLIC COMPANY
Notwithstanding clause 22.1(a)(i) and 22.2(a)(i), ABN and the Company
may each hold in aggregate up to 5% of the shares in any public company
which are quoted on a recognized stock exchange, even though that
company carries on any of the activities referred to in clause
22.1(a)(i) or 22.2(a)(i) (as applicable).
22.6 ACKNOWLEDGMENT
ABN, Xxxxx Xxxx and the Company each acknowledge that the Restraints
given by them under this clause 22 are necessary to protect the
legitimate business interests of the beneficiaries of the relevant
Restraint.
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23 ACKNOWLEDGEMENTS AND WARRANTIES
23.1 WARRANTY OF POWER AND AUTHORITY
Each party warrants that:
(a) it has full power and authority to enter into and perform its
obligations under this agreement;
(b) it has taken all necessary action to authorise the execution,
delivery and the performance of this agreement; and
(c) this agreement constitutes its legal, valid and binding
obligations, enforceable in accordance with its terms.
23.2 XXXXX XXXX OPTIONS
Xxxxx Xxxx acknowledges and confirms to the other Shareholders, the
Company and Limited that the issue to him of the Xxxxx Xxxx
Subscription Shares on the terms of this agreement and the Constitution
is accepted by him in full satisfaction and performance of any and all
entitlements he had or has to receive Securities in the Company or in
Limited, including entitlements arising under his Employment Agreement
referred to in clause 11.4 (including the amendments made to those
option entitlements on or around 19 June 2002 and 31 December 2003).
Xxxxx Xxxx agrees to release and not to make any claim against the
Company or Limited for such Securities other than pursuant to the terms
of this agreement and the Constitution.
24 DISPUTE RESOLUTION
24.1 REASONABLE ENDEAVOURS TO SETTLE
If a Dispute arises the SPV, Limited, ABN and Xxxxx Xxxx undertake in
good faith to:
(a) notify the others of the Dispute in accordance with clause
24.3; and
(b) use all reasonable endeavours to settle the Dispute
expeditiously.
24.2 NO COURT PROCEEDINGS
Unless a party has complied with this clause 24, that party may not
commence court proceedings or arbitration relating to the Dispute
except where that party seeks urgent interim or interlocutory relief.
If a party fails to comply with this clause 24, the other parties need
not comply with this clause before commencing court proceedings.
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24.3 DISPUTE NOTICE
A Dispute Notice must:
(a) identify the party's representative for negotiations relating
to the Dispute, being a person with authority to settle the
Dispute on behalf of that party; and
(b) set out succinctly the issues the subject of the Dispute and,
with all relevant particulars, a description of the
circumstances giving rise to the Dispute and the relief sought
including, to the extent possible, any amount claimed.
24.4 REPLY
The recipients of the Dispute Notice must within 15 Business Days of
receipt of the Dispute Notice reply in writing to the other parties.
That reply must:
(a) identify the recipient's representative for negotiations
relating to the Dispute, being a person with authority to
settle the Dispute on behalf of the recipient; and
(b) set out succinctly the recipient's response to the matters set
out in the Dispute Notice and any additional matters the
recipient considers relevant.
24.5 NEGOTIATION
The representatives designated under clauses 24.3 and 24.4 will make
whatever investigations each considers appropriate and, within 10
Business Days of receipt of the reply under clause 24.4, use their
reasonable endeavours to resolve the Dispute on a without prejudice
basis and taking such steps as are considered appropriate.
24.6 MEDIATION
Any Dispute that is not resolved in accordance with clauses 13.2 or
24.5 is to be mediated. Mediation is to be administered by the
Australian Commercial Disputes Centre Limited ("ACDC"), conducted in
Melbourne, Victoria and held in accordance with the ACDC Guidelines for
Commercial Mediation. The costs of the mediation are to be borne as
determined by the mediator, and if no such determination is made are to
be borne equally between SPV and ABN unless Xxxxx Xxxx is a party to
the Dispute as a Shareholder in which event the costs of mediation are
to be borne equally between the Shareholders.
24.7 APPOINTMENT OF MEDIATOR
For the purpose of mediation of a Dispute under clauses 13.2 or 24.6,
the representatives designated under clauses 24.3 and 24.4 must in good
faith endeavour to agree on the appointment of a suitable mediator. If
the parties do not agree on the mediator to be appointed, then the
mediator is to be appointed by ACDC in accordance with the ACDC
Guidelines for Commercial Mediation.
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24.8 EXCHANGE OF INFORMATION
The parties acknowledge that the purpose of any exchange of information
or documents or the making of any offer of settlement under clause 13
or this clause 24 is to attempt to settle the Dispute. No party may
disclose any information or documents created for the dispute
resolution process established by clause 13 or this clause 24 for any
purpose other than in an attempt to settle the Dispute. The parties
acknowledge that any exchange of information or documents or the making
of any offer of settlement under clause 13 or this clause 24 is
strictly on a without prejudice basis as regards any rights that a
party may have.
24.9 FAILURE OF MEDIATION
If mediation of the Dispute does not result in resolution of the
dispute within 45 days of appointment of a mediator under clause 24.7,
then the parties may take such court proceeding, arbitration or other
action or steps as is available to them at law or in equity.
25 TERM
25.1 COMMENCEMENT
This agreement is effective from the Completion Date and remains in
effect until:
(a) it ceases to apply to a Shareholder under this clause 25;
(b) the parties agree to terminate this agreement; or
(c) the Ordinary Shares are listed on a recognised stock exchange.
25.2 TRANSFER OF SHARES
Subject to clause 25.3, this agreement ceases to apply to a Shareholder
that has transferred all of its Shares under this agreement.
25.3 CERTAIN PROVISIONS CONTINUE
The termination of this agreement with respect to a party does not
affect:
(a) any obligation of that party which accrued prior to that
termination and which remain unsatisfied; and
(b) clause 21 (Confidential Information), clause 27.8 (Future
dealing with Non-cash Proceeds), and any provision of this
agreement which is expressed to come into effect on, or to
continue in effect after, that termination.
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26 APPLICATION OF FREE CASH FLOW
26.1 USE OF FREE CASH FLOW
Subject to law, the Company must until the Equity Vesting End Date use
all Free Cash Flow from time to time as follows:
(a) first, to pay the Capitalised Interest (if any) and all other
interest under the Senior Debt Facility Agreement;
(b) second, to repay the amounts owing under the Cash Advance
Facility and the LC Facility; and
(c) third, to return value to the holders of the Preference Shares
as contemplated under clause 7.4(b).
26.2 FREE CASH FLOW
Free Cash Flow means any cash of the Company and its Subsidiaries
remaining after the Company has set aside all cash which the Board
reasonably and properly determines is required to adequately provide
for the continuing successful operation of the Business by the Company
and its Subsidiaries, including in particular:
(a) to pay existing, or provide against anticipated, debts or
other liabilities, obligations and costs of the Company and
Subsidiaries properly incurred for the continued operation and
improvement of the Business;
(b) to provide against, and in due course pay, new debts or other
liabilities, obligations and costs properly incurred for the
continued operation and improvement of the Business;
(c) to provide and pay for other working capital requirements for
continued operation and improvement of the Business in the
ordinary course of Business;
(d) to provide and pay for capital expenditure for continued
operation of the Business in the ordinary course of Business;
and
(e) to provide and pay for any other expenditure required for the
continued survival of the Company and its Subsidiaries.
27 APPLICATION OF PROCEEDS OF SALE
27.1 APPLICATION OF CLAUSE TO ALL SALES
This clause 27 applies to any Early Exit Event, and to any Sale of
Shares or Trade Sale after the Equity Vesting End Date, except that
clause 27.2 only applies to an Early Exit Event.
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27.2 EARLY EXIT EVENT
If there is an Early Exit Event, the Sale Proceeds must be applied as
soon as practicable after receipt as follows:
(a) first, to pay the fees and expenses of the Company in
implementing the Early Exit Event, including any Taxes and
stamp duties payable by it or its Related Bodies Corporate
(including SPV to the extent required under clause 4.8 but not
otherwise) in respect of the Early Exit Event, and including
any costs of any valuer appointed under clause 27.4;
(b) second, to pay the Lenders and each Shareholder an amount
equivalent to the proportion to which they are entitled,
calculated in accordance with the formula set out in this
clause 27.2(b), of the aggregate of the then outstanding
Senior Secured Debt and the full issue price of the Preference
Shares:
P(b) = RP + RD/TP + TD x 100
where:
P(b) means the percentage of the total amount payable
under this clause 27.2(b) which is to be made to the
relevant Shareholder or Lender under this clause 27.
2(b);
RD for a Shareholder is nil, and for a Lender is the
total Senior Secured Debt as at the date of the Early
Exit Event which is outstanding to that Lender;
RP for a Lender is nil, and for a Shareholder means the
total issue price of the relevant Shareholder's
Preference Shares;
TD means the total Senior Secured Debt as at the date of
the Early Exit Event; and
TP means the total issue price of the Preference Shares
remaining on issue;
(c) then, the balance of any remaining Sale Proceeds pro rata
between:
(i) the holders of Ordinary Shares; and
(ii) the holders of Deferred Shares who are entitled to
immediate conversion of their Deferred Shares into
Ordinary Shares under the terms of the Constitution
but who have not yet had such conversion registered
by the Company in its register of members,
in proportion to the number of Ordinary Shares and Qualifying
Deferred Ordinary Shares held by each of them.
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For the avoidance of doubt, paragraph 27.2(c)(ii) above includes any
Deferred Shares which are converted into Ordinary Shares under the
terms of the Constitution as a result of payments made under 27.2(b)
above.
27.3 TERMS FOR NON-CASH PROCEEDS
Subject to clause 27.6, if some or all of the Sale Proceeds comprise
Non-cash Proceeds, the allocation of such Non-cash Proceeds must be on
the basis that each person entitled to Sale Proceeds receives their
Relevant Proportion (as applicable) of cash proceeds, of Non-cash
Proceeds and of each category (if there is more than one) of Non-cash
Proceeds respectively, in each case on the Same Terms and Conditions.
For example:
(a) if Non-cash Proceeds comprise more than one class of
Securities, each person entitled to Sale Proceeds must receive
or retain its Relevant Proportion of each class of Securities;
and
(b) if Non-cash Proceeds comprise any Senior Secured Debt which
will remain outstanding, each person entitled to Sale Proceeds
must receive or retain (and each such person agrees that it
assumes or retains, as applicable) its Relevant Proportion of
the Senior Secured Debt on the terms of the Senior Secured
Debt Documents.
27.4 VALUATION OF NON-CASH PROCEEDS
If all or part of the Sale Proceeds comprise Non-cash Proceeds and
either:
(a) it is necessary to attribute a value to the Non-cash Proceeds
so as to determine the application of Sale Proceeds under this
clause 27; or
(b) SPV elects to pay cash to Limited and Xxxxx Xxxx under clause
27.6,
then unless all the Shareholders have agreed a valuation of the
Non-cash Proceeds amongst themselves, the Company must within 10
Business Days of written request to the Company by any Shareholder
(which must be copied to the other Shareholders) appoint an Independent
Valuer in accordance with clause 27.5 to determine the value of the
Non-cash Proceeds. The Independent Valuer is to be requested to
determine the value within 10 Business Days of their appointment or as
soon as practicable after that period, as at the date of completion of
the Trade Sale.
27.5 INDEPENDENT VALUER
The Independent Valuer must be:
(a) a member of the Institute of Chartered Accountants in
Australia of at least 5 years' standing as a valuer, agreed to
by all the Shareholders; or
(b) if the Shareholders cannot reach agreement on the appointment
of the Independent Valuer within 10 Business Days of receipt
of a Shareholder's request under clause 27.4, the Company or
any Shareholder may request that the President of the
Institute of
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Chartered Accountants of Australia appoint a valuer who shall
be the Independent Valuer.
The Independent Valuer so appointed must determine the Fair Market
Value of the Non-cash Proceeds. The valuation conducted by the
Independent Valuer is conclusive and binding on the Shareholders in the
absence of manifest error. Any Independent Valuer appointed under this
agreement must act as an expert and not an arbitrator. The Independent
Valuer's procedures for determination of the Fair Market Value of the
Non-cash Proceeds are to be decided by the Independent Valuer in their
discretion.
Each Shareholder must bear its own costs in respect of a valuation in
accordance with this clause 27. The costs of any valuer appointed under
clause 27.4 must be borne by the Company.
27.6 SPV ELECTION TO PAY CASH
If a Trade Sale or Sale of Shares is proposed under which all or part
of the Sale Proceeds would comprise Non-cash Proceeds, and the proposed
purchaser does not wish Xxxxx Xxxx or Limited to receive Non-cash
Proceeds pursuant to the Trade Sale or Sale of Shares, then:
(a) if SPV wishes to proceed with such Trade Sale or Sale of
Shares, SPV must use all reasonable efforts to persuade the
purchaser to agree a structure under which Limited and Xxxxx
Xxxx receive Non-cash Proceeds in accordance with their
entitlements under clauses 27, 27A and 27B; and
(b) if SPV has complied with (a) above and a structure as
described in clause (a) above has not been agreed with the
proposed purchaser within 20 Business Days of commencing
negotiations regarding the terms of a proposed Sale of Shares
or Trade Sale, then the parties agree that SPV may by notice
in writing to Xxxxx Xxxx and Limited before the Sale Proceeds
are received elect to pay or procure payment to Xxxxx Xxxx and
Limited of an amount of cash equivalent to the value of the
Non-cash Proceeds to which they are entitled. The value of the
Non-cash Proceeds must be either:
(i) agreed in writing by all of the Shareholders; or
(ii) determined by an Independent Valuer in accordance
with clause 27.5.
SPV must pay or procure payment of the cash equivalent of Limited's and
Xxxxx Xxxx'x respective entitlements to Non-cash Proceeds to Limited
and Xxxxx Xxxx within 5 Business Days of agreement or determination of
the value of the Non-cash Proceeds or payment of the Non-cash Proceeds
(whichever is later).
27.7 FUTURE DEALING WITH NON-CASH PROCEEDS
If on a Sale of Shares or on a Trade Sale some of all of the Sale
Proceeds comprise Non-cash Proceeds, SPV agrees with Limited and Xxxxx
Xxxx that on any subsequent sale by it of its Non-Cash Proceeds, it
must:
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(a) notify Xxxxx Xxxx and Limited in writing that it intends to
sell its Non-cash Proceeds and of the proposed terms of such
sale, and request them to notify SPV if they wish to also sell
their Non-cash Proceeds on the Same Terms and Conditions;
(b) at any time after 10 Business Days after giving notice under
(a) above, SPV may:
(i) to the extent that Limited and Xxxxx Xxxx have by
that date declined to sell their Non-cash Proceeds on
the terms notified under (a) above or have failed to
respond to such notice, sell its Non-cash Proceeds on
terms no more favourable to it than those notified
under (a) above; and
(ii) to the extent that Limited or Xxxxx Xxxx have
notified SPV by that date that they wish to sell
their Non-cash Proceeds on the terms notified under
(a) above, sell its Non-cash Proceeds on terms no
more favourable to it than those notified under (a)
above, provided that it procures the sale of
Limited's and/or Xxxxx Xxxx'x (as applicable)
Non-cash Proceeds at the same time and on the Same
Terms and Conditions , except that neither Xxxxx Xxxx
nor Limited will be required to give any warranties,
other than a warranty that they will give the
purchaser clear unencumbered title to their Non-cash
Proceeds. If Xxxxx Xxxx or Limited fail to take any
steps required, or to deliver or execute any
documents required, so as to effect the sale of their
Non-cash Proceeds, within 5 Business Days of being
notified of the steps and documents required, then
SPV may proceed to sell its Non-cash Proceeds without
procuring the sale of Limited's and Xxxxx Xxxx'x
Non-cash Proceeds at the same time, notwithstanding
the proviso in this clause 27.7(b)(ii).
If SPV proposes to sell only some of its Non-cash Proceeds, then this
clause 27.7 applies to the same proportion of each of Limited's and
Xxxxx Xxxx'x Non-cash Proceeds, as the part of the Non-cash Proceeds
which SPV proposes to sell bears to the total Non-cash Proceeds then
held by SPV.
27.8 TERMS OF RELEVANT SALE
The parties agree as follows if a Relevant Sale is proposed:
(a) the Relevant Sale must be on arm's length terms to a party
other than SPV, a Related Body Corporate of SPV or any member
of SPV;
(b) SPV will, if requested, at the time of the Relevant Sale
provide to each of Limited and Xxxxx Xxxx a statement of all
consideration received by SPV, any Related Body Corporate of
SPV or any member of SPV in relation to the Relevant Sale, and
warrant to each of Limited and Xxxxx Xxxx that none of those
entities are entitled to any other consideration in relation
to the Relevant Sale;
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(c) if any proposed Relevant Sale is the result of a formal sale
process conducted to solicit offers to purchase the Company or
its Business, it is noted that the parties' intention in
undertaking such a sale process is to pursue as a preferred
outcome a sale for cash of all the Shares; and
(d) a particular proposed Relevant Sale may only be entered into
if at the time of entry into of such a transaction the Board
is not aware of another offer (being one which the Board
determines is a competitive offer reasonably capable of ready
acceptance) which:
(i) is to acquire all the Shares for cash consideration
which the Board determines is taken as a whole
greater than the value of the proposed Sale Proceeds
from the proposed Relevant Sale; or
(ii) is to acquire all the Shares for non-cash
consideration which the Board determines is taken as
a whole of materially greater value than the value of
the proposed Sale Proceeds from the proposed Relevant
Sale.
27A TRADE SALE
27A.1 APPLICATION TO TRADE SALE
This clause 27A applies to any Trade Sale.
27A.2 FURTHER STEPS
In order to give effect to clause 27.2 or any other distributions
following a Trade Sale after the Equity Vesting End Date, the
Shareholders must take all steps necessary to assist the Company to
implement the application of the Sale Proceeds of a Trade Sale,
including, without limitation, passing a special resolution on short
notice to wind up the Company and the Subsidiaries.
27B SALE OF SHARES
27B.1 APPLICATION TO SALE OF SHARES
This clause 27B applies to any Sale of Shares which is an Early Exit
Event.
27B.2 STRUCTURE OF SALE OF SHARES
If a Sale of Shares is proposed which is an Early Exit Event:
(a) the parties must use their best endeavours to agree a
structure with the proposed purchaser under the proposed Sale
of Shares which will result in the purchaser paying direct to
SPV, the Lenders, Xxxxx Xxxx and ABN (each a "RECIPIENT") such
portion of the Sale Proceeds to which they are entitled under
clause 27.2, in consideration for the transfer by them of
their Shares (of whatever class) or Senior Secured Debt to the
purchaser;
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(b) if SPV has complied with clause (a) above and a structure as
described in clause (a) above has not been agreed with the
proposed purchaser within 20 Business Days of commencing
negotiations regarding the terms of a proposed Sale of Shares
with the proposed purchaser, then the parties agree that the
Sale of Shares may be implemented by SPV (and the Lenders) on
such terms and pursuant to such structure as it deems
appropriate subject to compliance with the terms of this
agreement, provided that the Sale Proceeds must be dealt with
as follows:
(i) each party agrees that SPV (and the Lenders) must
deduct from the Sale Proceeds an amount equal to the
Tax Cost (as defined below) of each Recipient
(including itself) to reimburse them for their Tax
Cost; and
(ii) after deducting any amounts which may be deducted
under (i) above, the balance of the Sale Proceeds
must otherwise be applied in accordance with clauses
27.2(a), (b) and (c);
(c) to the extent that a Recipient receives Sale Proceeds under
clause 27B.2(b) which exceed its entitlement under clause 27,
it must apply that excess amount towards reimbursement of each
other Recipient's Tax Cost under clause 27B.2(b)(i) and to
comply with clause 27B.2(b) (ii), as directed by SPV to
satisfy the requirements of this clause 27B.2; and
(d) each Recipient must give SPV such information as SPV
reasonably requests for the purposes of SPV (or its members
and their Related Bodies Corporate, including the Lenders)
implementing a Sale of Shares as contemplated in clause
27B.2(b) in accordance with this clause 27B.2.
In this clause 27B.2, TAX COST for each Recipient means T x P,
where:
T = either:
(a) in the case where the Recipient is Xxxxx
Xxxx or any other individual - the highest
marginal rate of income tax which is imposed
on the taxable income of an individual plus
the applicable medicare levy; or
(b) in the case of a Family Trust - the
applicable rate of income tax generally
imposed on receipts by the Family Trust; or
(c) in the case of any other Recipient - the
generally applicable rate of income tax
which is imposed on the taxable income of an
Australian resident company.
P = so much of the Sale Proceeds which that Recipient
receives or is entitled to receive under the terms of
the Early Exit
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Event, but which that Recipient must pay (or direct
be paid) to another Recipient under clauses 27.2(a),
(b) and (c) (disregarding for this purpose any
amounts to be deducted under clause 27B.2(b)(i))
("PAYMENT AMOUNT"), as reduced by the following:
(a) so much of the Payment Amount (if any) as is
not included in the assessable income of the
Recipient for income tax purposes; and
(b) so much of the Payment Amount (if any) in
respect of which the payer is entitled to an
allowable deduction for income tax purposes.
27B.3 INSTRUCTIONS TO APPLY PROCEEDS
In the case of a Sale of Shares which is an Early Exit Event, subject
to clause 27B.2 the parties must instruct the third party purchaser to
pay the Sale Proceeds as set out in clause 27.2.
If the Sale Proceeds of a Sale of Shares which is an Early Exit Event
are not paid as set out in clause 27.2 then (without prejudice to any
other remedy available at law or in equity), subject to clause 27B.2
each party has a claim against each other party who has received any
Sale Proceeds for its entitlement to part of the Sale Proceeds in
accordance with clause 27.2.
28 NOTICES
28.1 FORM
Unless expressly stated otherwise in this agreement, all communications
in connection with this agreement must be in writing, signed by the
sender (if an individual) or by an authorised representative on behalf
of the sender and marked as set out or referred to in the Details or,
if the recipient has notified otherwise, then marked for attention in
the way last notified.
28.2 DELIVERY
They must be:
(a) left at the address set out or referred to in the Details; or
(b) sent by prepaid ordinary post (airmail if addressed to ABN) to
the address set out or referred to in the Details; or
(c) sent by fax to the fax number set out or referred to in the
Details; or
(d) given in any other way permitted by law.
However, if the intended recipient has notified a changed postal
address or changed fax number, then the communication must be to that
address or number.
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28.3 WHEN EFFECTIVE
They take effect from the time they are received unless a later time is
specified.
28.4 RECEIPT - POST
If sent by post, they are taken to be received three days after posting
(or seven days after posting if sent to or from a place outside
Australia).
28.5 RECEIPT - FAX
If sent by fax, they are taken to be received at the time shown in the
transmission report as the time that the whole fax was sent.
29 GENERAL
29.1 DISCRETION IN EXERCISING RIGHTS
A party may exercise a right or remedy or give or refuse its consent in
any way it considers appropriate (including by imposing conditions),
unless this agreement expressly states otherwise.
29.2 PARTIAL EXERCISING OF RIGHTS
If a party does not exercise a right or remedy fully or at a given
time, the party may still exercise it later.
29.3 NO LIABILITY FOR LOSS
A party is not liable for loss caused by the exercise or attempted
exercise of, failure to exercise, or delay in exercising a right or
remedy under this agreement.
29.4 APPROVALS AND CONSENTS
By giving its approval or consent a party does not make or give any
warranty or representation as to any circumstance relating to the
subject matter of the consent or approval.
29.5 REMEDIES CUMULATIVE
The rights and remedies provided in this agreement are in addition to
other rights and remedies given by law independently of this agreement.
29.6 VARIATION AND WAIVER
A provision of this agreement or a right created under it, may not be
waived or varied except in writing, signed by the party or parties to
be bound.
29.7 NO MERGER
The warranties, undertakings and indemnities in this agreement do not
merge on the Completion Date.
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29.8 INDEMNITIES
The indemnities in this agreement are continuing obligations,
independent from the other obligations of the parties under this
agreement and continue after this agreement ends. It is not necessary
for a party to incur expense or make payment before enforcing a right
of indemnity under this agreement.
29.9 FURTHER STEPS
Each party agrees to do all things reasonably necessary (including
casting their votes as Shareholders of the Company, negotiating in good
faith, obtaining consents, signing and producing documents including
share transfers, getting documents completed and signed, delivering up
share certificates and passing resolutions) to give effect to the
provisions of this agreement and the transactions contemplated by it,
including to:
(a) approve, implement and (as applicable) accept in full before 1
July 2007:
(i) a redemption by the Company of some or all of the
Preferred Shares for their full issue price if such
redemption is recommended by the Board;
(ii) any offer by the Company to buy back some or all of
the Preference Shares in accordance with clause 7.7;
and
(iii) a transfer of their Preference Shares in
consideration of receipt of the full issue price of
those Preference Shares;
(b) approve and implement a Stage III Refinancing or a Stage II
Refinancing which is recommended by the Directors in
accordance with clause 17.3 and give effect to the conversion
of the relevant number of Deferred Shares to Ordinary Shares
in those circumstances; and
(c) implement any Sale of Shares or Trade Sale in accordance with
clause 20, clause 27, clause 27A and clause 27B.
29.10 TIME OF THE ESSENCE
Time is of the essence in this agreement.
29.11 CONSTRUCTION
No rule of construction applies to the disadvantage of a party because
that party was responsible for the preparation of, or seeks to rely on,
this agreement or any part of it.
29.12 COSTS
The Company shall pay the legal and other costs and expenses of the
parties in connection with the preparation execution and completion of
this agreement and other related documentation except for stamp duty.
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29.13 STAMP DUTY
The Company agrees to:
(a) pay all stamp duty (including fines and penalties) chargeable
by legislation or by any revenue office on this agreement, on
any instruments entered into under this agreement or in
connection with the steps contemplated under clauses 1, 2, 3
or 3A, and in respect of a transaction evidenced by this
agreement; and
(b) indemnify on demand the Shareholders against any liability for
that stamp duty (including fines and penalties).
29.14 SUPERVENING LEGISLATION
Any present or future legislation which operates to vary the
obligations of a party in connection with this agreement with the
result that another party's rights, powers or remedies are adversely
affected (including, by way of delay or postponement) is excluded
except to the extent that its exclusion is prohibited or rendered
ineffective by law.
29.15 ENTIRE AGREEMENT
This agreement, the Constitution and the Diligence Enquiries constitute
the entire agreement of the parties about the subject matter and
supersedes all previous agreements, understandings and negotiations on
that subject matter.
29.16 COUNTERPARTS
This agreement may consist of a number of copies, each signed by one or
more parties to the agreement. If so, the signed copies are treated as
making up the one document.
29.17 INCONSISTENCY
If there is any inconsistency between this agreement and the
Constitution this agreement prevails as between the parties to the
extent of the inconsistency and the parties will examine their voting
rights as Shareholders and take any steps which are necessary to ensure
that the Constitution is consistent with this agreement.
29.18 NO PARTNERSHIP OR AGENCY
Nothing in this agreement makes a Shareholder a partner, agent or legal
representative of any other Shareholder, except as expressly stated in
this agreement.
30 GOVERNING LAW
30.1 GOVERNING LAW
This agreement is governed by the law in force in the place stated in
the Details.
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30.2 JURISDICTION
Each party submits to the non-exclusive jurisdiction of the courts of
the place specified in the Details and courts of appeal from them. Each
party waives any right it has to object to an action being brought in
those courts including, without limitation, by claiming that the action
has been brought in an inconvenient forum or that those courts do not
have jurisdiction.
31 INTERPRETATION
31.1 DEFINITIONS
These meanings apply unless the contrary intention appears:
ABN REPRESENTATIVE means a Director appointed by ABN under clause 9.
ACCESSION AGREEMENT means an agreement in the form of schedule 4.
ACCOUNTS means profit and loss accounts, balance sheets and cash flow statements
together with any statements, reports (including, without limitation, any
directors' and auditors' reports) and notes attached to or intended to be read
with any of them.
AGENT means X.X. Xxxxxx Australia Limited.
ASSIGNMENT DEED means the document dated the date of this agreement, in the form
annexed as Annexure G.
AUDITOR means Ernst & Young or such other auditor approved by the Board from
time to time.
AUSTRALIAN COMPANIES means the Company, American Banknote Pacific Pty Ltd (ABN
19 072 977 265), Xxxxx Xxxxxx and Xxxxx Xxxxxx Payment Systems Pty Limited (ABN
32 006 412 657).
BOARD means all or some of the Directors acting as a board.
BUDGET means the budget adopted under clause 15 for the next financial year
which will project the income, expenses and profits (both on revenue and capital
account) and cash flow of the Company and the Subsidiaries based on their
position at the commencement of the financial year and the projected operations
under the Business Plan.
BUSINESS means the manufacture and supply of transaction and identification
products, service and logistics carried on at the date of this agreement by the
Group, as it may develop or be expanded from time to time. It includes, without
limitation:
(a) the manufacture and supply of personalised cheques and cheque books,
deposit books, bank cheques, medical and other forms, postal money
orders, gift or title certificates, promissory notes, drafts, bearer
securities and warrants;
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(b) the provision of electronic printing services and distribution of
bills, statements, dividend and disbursement cheques, local government
rate notices, statements for insurances purposes and vehicle
registration labels;
(c) the managing of business process outsourcing of customers' operational
and marketing print requirements;
(d) the management of content data, and interpretation of data from
customers core systems into multiple forms of output;
(e) provision of postage management services including the sorting,
appending and aggregating of mail, and return mail processing;
(f) the manufacture and distribution of a wide range of cards, including
financial cards, telecommunication cards and commercial cards;
(g) the provision of bureau personalisation services for financial and non-
financial cards;
(h) the provision of licence issuance software solutions including the
manufacture and distribution of photographic identification cards;
(i) the manufacture and distribution of photographic and high resolution
bar code labels;
(j) through LM Gemplus, the manufacture and distribution of smart cards,
including financial and telecommunication cards and the sale of
hardware and software that enables the use of smart cards;
(k) anything developed from or substantially similar to the above.
BUSINESS DAY means a day other than a Saturday, Sunday or a public holiday in
New South Wales or Victoria.
BUSINESS PLAN means the business plan for the Company and the Business adopted
under clause 15 from time to time.
CAPITALISED INTEREST means all interest that has accrued from 15 September 2003
to the Completion Date under the Previous Senior Debt Facility Agreement, and
which remains unpaid.
CASH ADVANCE COMMITMENT means, in relation to each Lender, the amount opposite
that Lender's name in Column 2 of Part A of Schedule 2 of the Senior Debt
Facility Agreement, as reduced or cancelled under that agreement.
CASH ADVANCE FACILITY means the facility provided under clause 9 of the Senior
Debt Facility Agreement.
CASH FLOW PROJECTION means the cash flow projections provided to the Agent under
clause 2.3 of the Deed of Assignment, Amendment and Novation.
CHAIRMAN means the person appointed as Chairman under clause 9 of this
agreement.
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CHARGE has the meaning set out in the Senior Debt Facility Agreement.
CLAIM means any allegation, debt, cause of action, liability, claim, proceeding,
suit or demand of any nature howsoever arising and whether present or future,
fixed or unascertained, actual or contingent whether at law, in equity, under
statute or otherwise.
CLASS A PREFERENCE Share means a redeemable preference share issued by the
Company to the SPV on or around the date of this agreement and having the rights
for redeemable preference shares set out in schedule 1 of the Constitution.
CLASS B PREFERENCE Share means a redeemable preference share issued by the
Company to Limited or Xxxxx Xxxx on or around the date of this agreement and
having the rights for redeemable preference shares set out in schedule 1 of the
Constitution.
COLLATERAL SECURITY has the meaning set out in the Senior Debt Facility
Agreement.
COMPLETION means Part 1 Completion, Part 2 Completion, Part 3 Completion and
Part 4 Completion and Complete has a corresponding meaning.
COMPLETION DATE means 5 April 2004 or any other day agreed by the Company and
SPV.
CONFIDENTIAL INFORMATION means all confidential, non-public or proprietary
information regardless of how the information is stored or delivered, exchanged
between the parties before, on or after the date of this agreement relating to
the business, technology or other affairs of the Company or the Subsidiaries,
including all trade secrets, financial, marketing, systems, technology, ideas,
concepts, know how, techniques, designs, specifications, blueprints, tracings,
diagrams, models, functions, capabilities and designs (including without
limitation, computer software, manufacturing processes or other information
embodied in drawings or specifications), intellectual property or any other
information which is indicated to be subject to an obligation of confidence,
owned or used by or licensed to the Company or the Subsidiaries, and including
information obtained by a party under the Previous Relationship Documents.
CONSTITUTION means the constitution of the Company in the form attached at
schedule 5, as otherwise amended or adopted from time to time after the
Completion Date in accordance with the Corporations Act.
CORPORATIONS ACT means the Corporations Xxx 0000 (Cwlth).
XXXXX XXXX SHARE OPTIONS means the options over shares in the capital of the
Company held by Xxxxx Xxxx entitling him to the Xxxxx Xxxx Subscription Shares.
XXXXX XXXX SIDE LETTER means the letter to be provided by the Company to Xxxxx
Xxxx in the form attached to this agreement as annexure G.
XXXXX XXXX SUBSCRIPTION SHARES means:
(a) 174 Deferred Shares; and
(b) 500,000 Class B Preference Shares.
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DEADLOCK has the meaning given in clause 12.1, 12.6 or 12.7.
DEBENTURE TRUST DEED means the debenture trust deed dated 3 June 1996 between
Limited, BT Securities Limited and others as amended in the agreed form.
DEED OF ASSIGNMENT, AMENDMENT AND NOVATION means the deed entitled "Deed of
Assignment, Amendment and Novation" dated on or about the Completion Date
between the Company, Limited, the Lenders, X.X. Xxxxxx Australia Limited as
agent and security trustee, the Guarantors and American Banknote Pacific Pty
Ltd, in the form agreed by or on behalf of the parties immediately prior to
signing this agreement, together with its schedules and annexures
DEFERRED SHARE means a fully paid up deferred share in the capital of the
Company having the rights for deferred shares set out in schedule 1 of the
Constitution.
DETAILS means the section of this agreement headed "Details".
DERIVATIVE CONTRACT has the meaning set out in the Senior Debt Facility
Agreement.
DILIGENCE ENQUIRIES means:
(a) the Due Diligence Request addressed to ABN Australasia Holdings Pty
Limited dated 18 December 2003;
(b) the Xxxxx Xxxxxx Response to Due Diligence Request dated 12 March 2004;
(c) the request for further information contained in email from Xxxxxxxx
Xxxxxxxx to Xxxx Xxxxx dated 18 March 2004; and
(d) the response to the request for further information dated 31 March
2004.
DIRECTORS means directors of the Company from time to time.
DISPUTE means any dispute, controversy, difference or Claim between any of the
parties as to:
(a) the construction of this agreement; or
(b) the rights or obligations of a party under this agreement; or
(c) any other matter arising out of or relating to this agreement including
any question regarding the existence, validity or termination of this
agreement,
other than one entitling a party to claim for urgent or interlocutory relief.
DISPUTE NOTICE means a notice under clause 24.1 (a).
DRAWDOWN NOTICE has the meaning set out in the Senior Debt Facility Agreement.
EARLY EXIT EVENT means completion before 1 July 2007 of:
(a) a Sale of Shares; or
(b) a Trade Sale.
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EMPLOYEE INCENTIVE PLAN means an employee share, phantom share or option share
plan in respect of shares in the Company other than Ordinary Shares or other
Shares carrying rights to vote, under which up to a maximum of 5% of the total
fully diluted issued share capital of the Company may be allocated to employees
of the Company and the Subsidiaries.
ENCUMBRANCE means any mortgage, lien, charge, pledge, assignment by way of
security, security interest, title retention, preferential right or trust
arrangement, Claim, covenant, profit a prendre, easement or any other security
arrangement or any other arrangement having the same effect, and ENCUMBER has a
corresponding meaning.
EQUITY VESTING END DATE means the date of commencement of Stage III, or 30 June
2007, whichever is the earlier.
EXCLUDED INFORMATION means Confidential Information which:
(a) is in, or becomes part of, the public domain other than through breach
of this agreement or an obligation of confidence owed to the Company;
or
(b) a party can prove by contemporaneous written documentation was already
known to it at the time of disclosure by the Company or a Shareholder
(unless such knowledge arose from disclosure of information in breach
of an obligation of confidentiality); or
(c) a party acquires from a source other than the Company or a Shareholder
where the source is entitled to disclose it.
FAIR MARKET VALUE means the fair market value of the Non-cash Proceeds which are
the subject of the valuation, determined based on the following principles:
(a) if the Non-cash Proceeds include Securities, the valuation of the
Securities is on the basis of the company which issues the Securities
continuing to carry on business as a going concern;
(b) the value is that which would be paid on a sale is by a knowledgeable
willing but not anxious seller to a knowledgeable willing but not
anxious buyer;
(c) it is to be assumed that there would be a reasonable time available in
which to obtain a sale of the Non-cash Proceeds in the open market (and
for that purpose 60 Business Days will be deemed to be a reasonable
time);
(d) if the Non-cash Proceeds include Securities, the value for the
Securities the subject of the valuation bears the same proportion to
the total valuation for the company which issues the Securities as the
number of those Securities being valued bears to the total number of
Securities on issue; and
(e) subject to (a) to (d) above, such other normal share valuation factors
as are considered relevant by the person conducting the valuation.
FAMILY TRUST means, in relation to Xxxxx Xxxx, a trust:
(a) which does not permit any of the settled property or the income from
the trust to be applied otherwise than for the benefit of Xxxxx Xxxx, a
Qualifying
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Relation of Xxxxx Xxxx, or any charity or charities as default
beneficiaries (meaning that such charity or charities have no immediate
beneficial interest in any of the settled property or the income from
the trust when the trust is created but may become so interested if
there are no other beneficiaries from time to time except another such
charity or charities); and
(b) under which no power of control over the voting powers conferred by any
Shares the subject of the trust is capable of being exercised by or
subject to the consent of any person other than the trustee, Xxxxx Xxxx
or his Qualifying Relations.
FREE CASH FLOW has the meaning given in clause 26.2.
GOVERNMENT AGENCY means any governmental, semi-governmental, administrative,
fiscal, judicial or quasi-judicial body, department, commission, authority,
tribunal, agency or entity.
GROUP means the Company and its Subsidiaries.
GUARANTOR means each person described in Schedule 1 of the Senior Debt Facility
Agreement, and any new guarantor appointed under the Senior Debt Facility
Agreement, and if there is more than one, means each of them individual and
every two or more of them jointly.
INDEPENDENT VALUER means the person agreed or appointed under clause 27.4.
INVOLVED includes direct or indirect involvement as a principal, agent, partner,
employee, shareholder, unitholder, director, trustee, beneficiary, manager,
consultant, adviser or financier.
LC COMMITMENT means, in relation to each Lender, the amount opposite that
Lender's name in Column 2 of Part B of Schedule 2 of the Senior Debt Facility
Agreement, as reduced or cancelled under that agreement.
LC FACILITY means the facility provided under clause 10 of the Senior Debt
Facility Agreement.
XXXXX XXXXXX means American Banknote Australasia Pty Limited (ACN 072 977 292),
trading as Xxxxx Xxxxxx.
LENDERS means the Participants as defined in the Senior Debt Facility Agreement.
LIMITED CONVERSION SHARES means 696 Deferred Shares in the Company.
LM GEMPLUS means LM Gemplus Pty Ltd (ACN 088 231 672).
LM GROUP means Xxxxx Xxxxxx and LM Taiwan.
LM TAIWAN means Xxxxx-Xxxxxx (Taiwan) Ltd.
MAJORITY RESOLUTION means a resolution of the Shareholders of the relevant class
of Shares present and voting (who are entitled to vote and are not disqualified
from voting on that resolution) who between them hold more than one half of the
total number of Shares held by all of the Shareholders of the relevant class of
Shares who
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are entitled to vote and are not disqualified from voting on that resolution and
who are present and voting that resolution. For the avoidance of doubt, a sole
Shareholder may be entitled to pass a Shareholders resolution pursuant to clause
12.1.
MANAGING DIRECTOR means the managing director from time to time of the Company
being Xxxxx Xxxx as at the date of this agreement.
MATERIAL ADVERSE PERFORMANCE means:
(a) the occurrence or existence of an event, condition or change which
materially and adversely affects, or could reasonably be expected to
materially and adversely affect, in the reasonable opinion of the
Board:
(i) the Company's or its Subsidiaries' ability to comply
with its obligations under this agreement or any
Senior Secured Debt Document; or
(ii) the value of the Company, its Subsidiaries or their
material assets and liabilities; or
(iii) the rights of a Shareholder under this agreement or
of the Lenders under any Senior Secured Debt
Document; or
(iv) the financial condition and performance of the
Company, its Subsidiaries or their prospects or
business; or
(b) a negative variance of the performance of the Company and its
Subsidiaries against the EBITDA projection contained in annexure C,
which is a variance of 20% or more over the period commencing on 1
January 2004 and ending on the date on which the Material Adverse
Performance is being measured, excluding the costs of negotiating and
implementing this agreement and the transactions contemplated by it.
NEW LIMITED CONSTITUTION means the constitution of Limited in the form attached
in Schedule 7.
NEW SECURITIES means Securities proposed to be issued by the Company.
NON-CASH PROCEEDS means such part (or all) of the Sale Proceeds as comprises
non-cash consideration.
NZ LETTER means the letter to be signed by the Agent and Xxxxx Xxxx in the form
attached to this agreement as annexure H.
ORDINARY SHARE means a fully paid up ordinary share in the capital of the
Company having the rights for ordinary shares set out in schedule 1 of the
Constitution, and for the avoidance of doubt does not include any Deferred
Share.
PARENT OPTION AND SUPPORT TERMINATION AGREEMENT means [the agreement of that
title to be entered into by Xxxxx Xxxx, Xxxxx Xxxxxx, Limited and ABN] on
Completion in the form attached to this agreement as annexure B1.
PART 1 COMPLETION means the completion of the matters set out in clause 1.
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PART 2 COMPLETION means the completion of the matters set out in clause 2.
PART 3 COMPLETION means the completion of the matters set out in clause 3.
PART 4 COMPLETION means the completion of the matters set out in clause 3A.
PREFERENCE SHARE means a Class A Preference Share or a Class B Preference Share.
PREVIOUS CASH ADVANCE FACILITY means the facility provided under clause 9 of the
agreement entitled "Senior Debt Facility Agreement" dated 3 June 1996 between,
amongst others, Limited as borrower, the Lenders and X.X. Xxxxxx Australia
Limited as security trustee (as amended).
PREVIOUS RELATIONSHIP DOCUMENTS means:
(a) the Previous Senior Debt Facility Agreement; and
(b) the Shareholders Agreement between American Banknote Australasia
Holdings Inc, the Agent and Limited dated 26 June 2001.
PREVIOUS SENIOR DEBT FACILITY AGREEMENT means the agreement entitled "Senior
Debt Facility Agreement" dated 3 June 1996 between Limited, the Guarantors,
American Banknote Pacific Pty Ltd, the Lenders and the Agent (as security
trustee and agent) (as amended).
PROFIT IMPROVEMENT PROGRAM means the plan presented to the Board as set out in
the Budget.
PROMISSORY NOTE means the promissory note issued by Limited on 31 December 2003
in favour of the Company which was endorsed on that date by the Company to Xxxxx
Xxxxxx and by that company to American Banknote Pacific Pty Limited.
QUALIFYING DEFERRED ORDINARY SHARES means Deferred Shares which the holder is
entitled to convert into Ordinary Shares on the terms of the Constitution as at
the date of application of clause 27.1(c)(ii), including after taking into
account the effect of payments made under clause 27.1(b).
QUALIFYING RELATION means, in relation to Xxxxx Xxxx, his parents, his brothers
and sisters, his spouse (or widow) and his lineal descendants.
RECORDS means:
(a) originals and copies, in machine readable or printed form, of all
books, files, reports, records, correspondence, documents and other
material of or relating to or used in connection with the Company and
the Subsidiaries including minute books, statutory books and registers,
books of account and copies of taxation returns;
(b) sales literature, market research reports, brochures and other
promotional material;
(v) all sales and purchasing records;
(vi) all trading and financial records; and
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(vii) lists of all regular suppliers and customers.
RELATED BODY Corporate has the meaning given in the Corporations Act.
RELEVANT PROPORTION means, for a person who is entitled to Sale Proceeds, the
proportion which the amount of that person's entitlement to Sale Proceeds bears
to the total amount of the Sale Proceeds.
RELEASE means the deed entitled "Deed of Release (Partial)" dated on or about
the Completion Date between Limited, the Lenders, X.X. Xxxxxx Australia Limited
as security trustee and the Guarantors.
RELEVANT SALE means a Trade Sale or Sale of Shares to a person who is not,
before such transaction, carrying on or controlling a business similar to the
Business and where some (being not merely a nominal portion) or all of the Sale
Proceeds is something other than cash. For this purpose control has the meaning
given in section 50AA of the Corporations Act.
REPRESENTATIVE means an employee, consultant, officer, director or adviser.
REPUTABLE FINANCIAL INSTITUTION means a bank or financial institution with a
credit rating equal to or greater than BBB+ by Standard & Poor's rating agency
(or its equivalent by a different internationally recognised rating agency).
RESTRAINT means the prohibitions and restraints contained in clauses 22.1 and
22.2.
SALE NOTICE has the meaning in clause 20.
SALE PROCEEDS means:
(a) in the case of a Trade Sale the aggregate value attributed to the cash
and non-cash consideration (including any Securities, which without
limitation may include ordinary shares or preference shares in the
purchaser, its Related Bodies Corporate, the Company or its
Subsidiaries, or in any other entity), for the whole or that part of
the Business being sold or all or that part of the assets of the
Company and its Subsidiaries being sold; and
(b) in the case of a Sale of Shares the aggregate value attributed to each
of the following in the context of the Sale of Shares:
(i) all cash and non-cash consideration for the Ordinary Shares;
(ii) any issue price of Preference Shares which a Shareholder will
continue to hold in the Company after the Sale of Shares; and
(iii) any face value of Senior Secured Debt which will remain
outstanding after the Sale of Shares; and
(iv) any cash and non-cash consideration received for transfer of
any other Shares or for transfer, assignment or novation of
any Senior Secured Debt, as part of the terms of the Sale of
Shares,
and for the avoidance of doubt such non-cash consideration may include
any Securities, which without limitation may include ordinary shares or
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preference shares in the purchaser, its Related Bodies Corporate, the
Company or its Subsidiaries, or in any other entity.
SALE OF SHARES means a sale of all of the issued Ordinary Shares in the Company.
SAME TERMS AND CONDITIONS means having the benefit of the same terms and
conditions as each other recipient of Non- cash Proceeds, but for the avoidance
of doubt on the basis that where any minority protection rights (other than
rights conferred by law or generally applying across all instruments in the same
class of Non- cash Proceeds), special consent or voting rights or veto or
blocking rights apply in relation to any Securities or debt included in the
Non-cash Proceeds held by SPV, Limited or Head they may be exercised as
determined by a simple majority of the votes of the persons entitled to exercise
those rights.
SECURITIES means shares, any securities or instruments convertible into shares,
and any options to subscribe for any such shares or convertible securities.
SECURITY INTEREST has the meaning set out in the Senior Secured Debt Facility
Agreement.
SENIOR SECURED DEBT means the amount outstanding under the Cash Advance Facility
and LC Facility and includes Capitalised Interest.
SENIOR DEBT FACILITY AGREEMENT means the agreement entitled "Senior Debt
Facility Agreement" dated 3 June 1996 between Limited, the Guarantors and the
Lenders as amended on 31 August 1998, 31 March 2000, 26 June 2001, and as
novated and amended as set out in the annexure to the Deed of Assignment,
Amendment and Novation.
SENIOR SECURED DEBT DOCUMENTS means:
(a) the Deed of Assignment, Amendment and Novation;
(b) Senior Debt Facility Agreement;
(c) Debenture Trust Deed;
(d) each Charge;
(e) any Collateral Security;
(f) any Drawdown Notice or any debenture or other certificate or Security
Interest issued under a Charge;
(g) any Derivative Contract relating to the Senior Debt Facility Agreement.
SERVICE AGREEMENT means the service agreement to be entered into by Xxxxx Xxxx
and Xxxxx Xxxxxx on Completion in the form attached to this agreement as
annexure B.
SHARE means an Ordinary Share, a Deferred Share or a Preference Share.
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SHAREHOLDERS means holders of Shares from time to time, other than a shareholder
who holds Shares pursuant to an excluded issue under clause 18.1(b).
SHAREHOLDING means the Shares held by a Shareholder,
SHARE OPTIONS means all of the options to acquire Preference Shares and Deferred
Shares held by Xxxxx Xxxx pursuant to the letter to Xxxxx Xxxx from Limited and
the Company dated 24 December 2003.
SPV REPRESENTATIVE means a Director appointed by the SPV under clause 9.
SPV SUBSCRIPTION SHARES means 22,000,000 Class A Redeemable Preference Shares
and 870 Ordinary Shares;
STAGE means Stage I, Stage II or Stage III (as applicable).
Stage I means the period during which clause 7.2 applies.
STAGE II means the period during which clause 7.3 applies.
STAGE II REFINANCING means a refinancing of the Senior Secured Debt which
results in the events in clause 7.3 occurring before 1 July 2007.
STAGE III means the period during which clause 7.4 applies.
STAGE III REFINANCING means a refinancing of the Senior Secured Debt and
Preference Shares which results in the events in clause 7.4 occurring before 1
July 2007.
SUBSIDIARIES means Xxxxx Xxxxxx, Xxxxx Xxxxxx Payment Systems Pty Limited,
American Banknote New Zealand Limited, Xxxxx - Xxxxxx (Taiwan) Limited, LM
Embossing (Singapore) Pte Limited and Xxxxx Xxxxxx (Hong Kong) Limited.
SUPPLEMENTAL AGREEMENT means the agreement dated on or around the same date as
this agreement between the shareholders of SPV and the parties to this
agreement, in the form attached as Annexure F.
TAXES means taxes, levies, imposts, deductions, charges, withholdings and duties
(excluding stamp duties), together with any related interest, penalties, fines
and other statutory charges.
TRADE SALE means the sale of the whole or substantially all of the Business or
the sale of all or substantially all of the assets of the Company and its
Subsidiaries including by way of a sale of shares of some or all of the
Subsidiaries.
TRANSFER means sell, transfer or otherwise dispose of or deal with any legal or
equitable interest in a Share.
US BUSINESS means the manufacture and supply of transactions and identification
products, services and logistics carried on at the date of this agreement by
American Banknote Corporation and its subsidiaries , as it may develop or be
expanded from time to time. It includes, without limitation:
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(a) the manufacture and supply of personalised cheques and cheque books,
(and related systems in connection with counterfeit protection),
deposit books, bank cheques, medical and other forms, postal money
orders, gift, stock, bond or title certificates, birth certificates and
other vital records, promissory notes, drafts, bearer securities and
warrants;
(b) the provision of electronic printing services and distribution of
bills, statements, dividend and disbursement cheques, local government
rate notices, statements for insurances purposes and vehicle
registration labels and/or manufacturer certificates of origin;
(c) the managing of business process outsourcing of customers' operational
and marketing print requirements;
(d) the management of content data, and interpretation of data from
customers core systems into multiple forms of output;
(e) provision of postage management services including the sorting,
appending and aggregating of mail, and return mail processing;
(f) the manufacture and distribution of a wide range of cards, including
financial cards, telecommunication cards and commercial cards;
(g) the provision of bureau personalisation services for financial and non-
financial cards;
(h) the provision of licence and/or identification issuance software
solutions including the manufacture and distribution of photographic
identification cards;
(i) the manufacture and distribution of photographic and high resolution
bar code labels;
(j) the manufacture and distribution of smart cards, including financial
and telecommunication cards and the sale of hardware and software that
enables the use of smart cards;
(k) the manufacture and supply of passport books as well as passport -
related systems;
(l) the provision of stored value or loyalty card processing services;
(m) the provision of secure distribution, fulfilment or reconciliation
services; and
(n) anything developed from or substantially similar to the above.
31.2 GENERAL INTERPRETATION
Unless the contrary intention appears a reference in this agreement to:
(a) (CLAUSES, ANNEXURES AND SCHEDULES) a clause, annexure or schedule is a
reference to a clause in or annexure or schedule to this agreement;
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(b) (VARIATIONS OR REPLACEMENT) a document (including this agreement)
includes any variation or replacement of it;
(c) (LAW) means common law, principles of equity, and laws made by
parliament (and laws made by parliament including State, Territory and
Commonwealth laws and regulations and other instruments under them, and
considerations of any of them);
(d) (SINGULAR INCLUDES PLURAL) the singular includes the plural and vice
versa;
(e) (PERSON) the word "person" includes an individual, a firm, a body
corporate, a partnership, joint venture, an unincorporated body or
association or any Government Agency;
(f) (EXECUTORS, ADMINISTRATORS, SUCCESSORS) a particular person includes a
reference to the person's executors, administrators, successors,
substitutes (including persons taking by novation) and assigns;
(g) (TWO OR MORE PERSONS) an agreement, representation or warranty in
favour of two or more persons is for the benefit of them jointly and
each of them individually;
(h) (SEVERAL WARRANTIES) an agreement, representation or warranty by two or
more persons is given severally and binds each of them individually on
their own behalf;
(i) (CALCULATION OF TIME) if a period of time dates from a given day or the
day of an act or event, it is to be calculated exclusive of that day;
(j) (REFERENCE TO A DAY) a day is to be interpreted as the period of time
commencing at midnight and ending 24 hours later;
(k) (FROM TIME TO TIME) a power, an authority, or a discretion given to the
Board, the Directors, the Shareholders or any other person may be
exercised at any time and from time to time;
(l) (MEANING NOT LIMITED) the words "include", "including", "for example"
or "such as" are not used as, nor is it to be interpreted as, a word of
limitation and when introducing an example, do not limit the meaning of
the words to which the example relates to that example or examples of a
similar kind.
(m) (NEXT BUSINESS DAY) if an event must occur on a stipulated day which is
not a Business Day then the stipulated day will be taken to be the next
Business Day;
(n) (TIME OF DAY) to time is a reference to Sydney time;
(o) (DOLLARS) Australian dollars, dollars, $, A$ or AUD is a reference to
the lawful currency of Australia.
31.3 HEADINGS
Headings are inserted for convenience and do not affect the
interpretation of this agreement.
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EXECUTED as a deed
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