STANDSTILL AGREEMENT dated as of September 19, 2008 between eTelecare Global Solutions, Inc. and Newbridge International Investment Ltd.
Exhibit 7.06
________________________________________
dated as
of September 19, 2008
between
eTelecare
Global Solutions, Inc.
and
Newbridge
International Investment Ltd.
________________________________________
This Standstill Agreement (this
"Agreement") is made and entered into as of September 19, 2008
between eTelecare Global Solutions, Inc., a Phillipines corporation (the
"Company") and Newbridge International Investment Ltd., a British Virgin Islands
company (the “Shareholder”). The Company and the Shareholder shall be
referred to herein as the “Parties.”
WITNESSETH
WHEREAS, the Shareholder has previously
filed a Schedule 13D, as amended, under the United States Securities Exchange
Act of 1934, as amended (the “Exchange Act”), with the United States Securities
and Exchange Commission (“SEC”) indicating the Shareholder’s Beneficial
Ownership of 6,392,550 shares of Company Common Stock and American Depositary
Shares (such securities being collectively referred to herein as the “Existing
Securities”), representing approximately 21.58% of the total outstanding Voting
Securities (as defined below) as of the date hereof;
WHEREAS, concurrently with the
execution of this Agreement, the Company and EGS Acquisition Co LLC, a Delaware
limited liability company (“Purchaser”), are entering into an Acquisition
Agreement of even date herewith which provides for the offer by the Purchaser to
purchase any and all of the Company’s outstanding Voting Securities (the
“Offer”) which Offer is supported by the Shareholder; and
WHEREAS, the Shareholder has, or will
have, a direct or indirect interest in the Purchaser.
NOW, THEREFORE, in consideration of the
mutual agreements and understandings set forth herein and as an inducement to
the Company to enter into the Acquisition Agreement, the Parties hereto hereby
agree as follows:
ARTICLE
I
DEFINITIONS
1.1. Defined
Terms. (a) As used in this Agreement, the following terms
shall have the following meanings:
“Affiliate”
shall mean with respect to any Person, a Person that directly or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with such Person or group of Persons.
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“Agreement”
shall mean this Agreement as in effect on the date hereof and as hereafter from
time to time amended, modified or supplemented in accordance with the terms
hereof.
"Beneficial
Ownership" and “Beneficially Owns” shall have the meaning set forth in Rules
13d-3 and 13d-5 under the Exchange Act.
“Company
Acquisition Transaction” shall mean (i) any merger, consolidation, business
combination, share exchange, reorganization, restructuring or similar
transaction or series of related transactions involving the Company or (ii) a
tender offer or exchange offer for at least 50% of the outstanding Voting
Securities.
“Governmental
Authority” shall mean any United States (federal, state, local) or foreign court
or tribunal, or administrative, governmental or regulatory body, agency or
authority.
“group” shall
have the meaning set forth in Section 13(d)(3) of the Exchange Act and Rule
13d-5 promulgated thereunder.
“Other
Directors” shall mean each member of the board of directors of the Company who
is not a nominee or employee of the Shareholder or an Affiliate of the
Shareholder.
“Person”
shall mean an individual, a corporation, a partnership, an association, a
joint-stock company, a trust, any unincorporated organization, or a government
or political subdivision or an agency or instrumentality thereof, including its
Affiliates.
“Securities
Act” shall mean the United States Securities Act of 1933, as
amended.
“Voting
Securities” shall mean any securities of the Company having the power to vote,
in the absence of contingencies, in the election of directors of the Company;
provided that American Depositary Shares and the shares of Common Stock
representing such American Depositary Shares shall not be double-counted for
purposes of determining the number of Voting Securities.
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ARTICLE
II
STANDSTILL
PROVISIONS
2.1. Standstill
Provisions.
(a) In
consideration of the execution by the Company of the Acquisition Agreement with
the Purchaser, the Shareholder agrees with the Company that prior to termination
of the Acquisition Agreement, the Shareholder will not (and the Shareholder will
cause its Affiliates not to) directly or indirectly in any way acquire or agree
to acquire Beneficial Ownership of any Voting Securities (other than the
acquisition of Voting Securities by the Purchaser in accordance with the
Acquisition Agreement).
(b) If
the Acquisition Agreement is terminated pursuant to Section 5.4(a)(ii) or
5.5(c)(ii) thereof, then for a period of six months from the date of such
termination, or, if the Acquisition Agreement is terminated pursuant to Section
5.1, 5.2(a), 5.2(b), 5.2(c), 5.3(b), 5.4(a)(i), 5.4(b), 5.4(c)(i) or 5.4(d)
thereof, then for a period of 18 months from the date of such termination, or,
if the Acquisition Agreement is terminated pursuant to Section 5.3(a), 5.3(c) or
5.3(d) thereof, then for a period of three years from the date of such
termination (in either case, the date of such termination, the “Commencement
Date” and such six-month period, 18-month period or 3-year period, as the case
may be, the “Standstill Period”), the Shareholder agrees with the Company that,
except as may be specifically permitted by this Agreement or unless specifically
approved by resolution of a majority of the Other Directors of the Company, the
Shareholder will not (and the Shareholder will cause its Affiliates not to),
acting alone or in concert with others (i) directly or indirectly in any way
acquire or agree to acquire Beneficial Ownership of any Voting Securities if
such acquisition or agreement to acquire would result in the Shareholder and its
Affiliates Beneficially Owning more than thirty-two percent (32%) of the then
outstanding Voting Securities (the “Maximum Amount”) as measured on such date,
(ii) publicly offer, seek or propose any Company Acquisition Transaction, (iii)
seek to nominate and elect more than two (2) directors out of seven (7)
directors to the Company’s board of directors or (iv) except as otherwise
required by applicable law, disclose publicly any intention, plan or arrangement
inconsistent with the foregoing. Notwithstanding the foregoing,
during the Standstill Period, the Shareholder shall have the right to request,
and the Other Directors shall consider in good faith in light of the facts and
circumstances, a suspension of this Section 2.1(b) in the event that, and for so
long as, any Person or “group” other than Shareholder (A) acquires more than
fifteen percent (15%) of the outstanding Voting Securities, (B) publicly
announces a bona fide tender or exchange offer by such Person or group which
would result, if consummated in accordance with its terms, in the Beneficial
Ownership by such Person or group of in excess of fifteen percent (15%) of the
then outstanding Voting Securities, whether or not such offer
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is
approved by the Other Directors or (C) publicly seeks or proposes to seek a
Company Acquisition Transaction.
(c) Notwithstanding
anything herein to the contrary, in the case of an 18-month Standstill Period,
during the six-month period, or, in the case of a 3-year Standstill Period,
during the two-year period (such 6-month period or 18-month period, as the case
may be, the “Additional Limitation Period”) following the expiration or
termination of the Standstill Period, Shareholder shall not (and Shareholder
shall cause its Affiliates not to) acquire or agree to acquire Beneficial
Ownership of any securities of the Company if such acquisition or agreement to
acquire would result in the Shareholder and its Affiliates collectively
Beneficially Owning Voting Securities in excess of the Maximum Amount, except as
follows:
(i) In
the event Shareholder or its Affiliates intends to acquire any Voting Securities
of the Company in excess of the Maximum Amount, Shareholder shall provide (and
shall cause its Affiliates to provide) written notice to the Company of such
intent not less than 25 business days prior to any such acquisition (the “Notice
Period”). If prior to the end of the Notice Period, the Company
provides written notice (the “Company Notice”) to Shareholder or its Affiliates
of the Company’s intent to undertake a Company Acquisition Transaction, the
Shareholder shall not (and Shareholder shall cause its Affiliates not to)
acquire any Voting Securities of the Company in excess of the Maximum Amount for
a period of six months after the receipt by the Shareholder or its Affiliates of
the Company Notice. Subject to any other legal restrictions, if the
Company shall not have entered into a definitive agreement related to a Company
Acquisition Transaction at the end of such six-month period, then the
restrictions set forth in this Section 2.1(c) shall terminate and be of no
further force or effect. If the Company has entered into a definitive
agreement related to a Company Acquisition Transaction within such six-month
period, then the provisions of Sections 2.1(e)(i) and 2.1(e)(ii) shall apply in
full force and effect.
(ii) In
the event the Company fails to provide the Shareholder with a Company Notice or
otherwise indicates in the Company Notice that it will not undertake a Company
Acquisition Transaction, then the Shareholder and its Affiliates shall be
entitled to purchase Voting Securities in excess of the Maximum
Amount.
(d) It
is expressly agreed that if, during the Standstill Period or at any time
thereafter, and for so long as the Shareholder Beneficially Owns not less than
ten percent (10%) of the outstanding Voting Securities, the board of directors
of the Company authorizes the Company to undertake a Company Acquisition
Transaction (either through a public or private auction or other similar sale
process), then Shareholder and its Affiliates shall be permitted to participate
in the bidding process on the same terms and conditions as any other
bidder. The board
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of
directors of the Company (or a committee thereof as may be constituted for such
purpose) will in good faith and in the proper discharge of its fiduciary duties
consider and evaluate the bid of the Shareholder or its Affiliates for the
acquisition of the Company; provided that, nothing herein shall obligate the
Company to negotiate with or accept any bid or other proposal submitted by
Shareholder or its Affiliates.
(e) From
the Commencement Date until the expiration of the Additional Limitation Period
(or the Standstill Period, in the case of a six-month Standstill Period), in the
event that a majority of the board of directors of the Company and the holders
of a majority of the outstanding Voting Securities of the Company shall approve
a Company Acquisition Transaction with a party other than the Shareholder or any
other transaction that requires at least two-thirds of the then outstanding
Voting Securities, then (i) Shareholder shall (and Shareholder shall cause its
Affiliates to) vote all Voting Securities held by it in excess of the Existing
Securities in favor of such Company Acquisition Transaction or any other
transaction that requires at least two-thirds of the then outstanding Voting
Securities and grant to persons designated by the Other Directors a proxy, which
shall be irrevocable and coupled with an interest, to vote such excess as
provided herein (it being understood that Shareholder and its Affiliates will at
all times be permitted to vote the Existing Securities in its sole discretion in
any manner it deems appropriate), and (ii) Shareholder shall (and Shareholder
shall cause its Affiliates to) sell or otherwise transfer all Voting Securities
then held by it and its Affiliates in excess of the Existing Amount to the
winning bidder in any such Company Acquisition Transaction on the same terms and
conditions as all other Shareholders of the Company and pursuant to the terms
and conditions contained in any definitive agreement executed by the Company in
connection therewith. It is expressly understood that neither
Shareholder nor its Affiliates shall have any obligation to transfer any Voting
Securities representing the Existing Amount in connection with any Company
Acquisition Transaction. Shareholder will (and Shareholder shall
cause its Affiliates to) take all reasonably necessary or desirable actions in
connection with the consummation of the Company Acquisition Transaction as
requested by the Other Directors including, without limitation, executing and
delivering any documents, certificates or other instruments required to be
signed by any other Shareholder, and delivering such Shareholder’s and its
Affiliates’ stock certificates free and clear of any encumbrances; provided that
any indemnification obligations or other contractual liability of any
stockholders incurred in connection with the Company Acquisition Transaction
shall be apportioned among all of the stockholders of the Company in proportion
to the amount of consideration received by each such stockholder.
2.2. Recording
Provisions. The Parties agree that the Company shall (i)
advise its stock transfer agent or other relevant agents (each a “Transfer
Agent”)
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of the
existence and restrictions of this Agreement and (ii) authorize such Transfer
Agent to notify the Parties of a potential breach of this Agreement and refrain
from recording any transfer of Voting Securities that the Company advises would
be in violation of this Agreement.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
3.1. Each
Party hereto represents and warrants to the other as follows:
(a) Authorization. Such
Party has the requisite power, authority and legal capacity to execute, deliver
and perform and to consummate the transactions contemplated by this
Agreement. This Agreement constitutes a legal, valid and binding
obligation of such Party, enforceable against such Party in accordance with its
terms, except as such enforcement may be limited by any applicable bankruptcy,
insolvency, moratorium or similar law affecting creditors’ rights
generally.
(b) No Conflicts;
Consents. No consent of any Governmental Authority or other
person is required to be obtained by such Party in connection with the execution
and delivery by such Party of this Agreement.
ARTICLE
IV
MISCELLANEOUS
4.1. Severability. If
any term, provision, covenant or restriction of this Agreement is determined to
be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect, unless such action would substantially impair the benefits to either
Party of the remaining provisions of this Agreement.
4.2. Specific
Enforcement. The Parties hereto acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the Parties shall
be entitled to an injunction or injunctions to prevent or cure breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions of this Agreement (without the necessity of posting any bond), this
being in addition to any other remedy to which they may be entitled by law or
equity.
4.3. Further
Assurances. The Shareholder shall use its reasonable best efforts
to cause its Affiliates to comply in all respects with the provisions of this
Agreement applicable to the Shareholder to the same extent as if such Affiliates
were original parties hereto.
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4.4 Entire Agreement;
Amendments. This Agreement contains the entire understanding
of the Parties with respect to the matters covered hereby and
thereby. This Agreement may be amended only by an agreement in
writing executed by the Parties hereto. The Parties hereto may amend
this Agreement without notice to or the consent of any third party, including
any Affiliate of Shareholder.
4.5. Notices. Any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be effective (a) when personally delivered or
transmitted by telecopier or other electronic means, such as electronic mail, on
a business day during normal business hours where such notice is to be received
at the address or number designated below or (b) on the business day that is
three (3) days following the date of mailing by courier, fully prepaid,
addressed to such address, whichever shall first occur. The addresses
for such communications shall be:
|
If
to the Company:
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eTelecare
Global Solutions, ▇▇▇. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
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▇▇ ▇▇▇▇▇
Telecopier:
(▇▇▇) ▇▇▇-▇▇▇▇
Email:
▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
Attention:
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
|
|
With
a copy to:
|
Pillsbury
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier:
(▇▇▇) ▇▇▇-▇▇▇▇
Email:
▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Attention: ▇▇▇▇▇
del ▇▇▇▇▇
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If
to the Shareholder:
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Newbridge
International Investment Ltd.
c/▇
▇▇▇▇▇ Corporation
▇▇/▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ 1226
Telecopier: (▇▇▇)
▇▇▇-▇▇▇▇
Email:
▇▇▇▇▇▇▇▇▇.▇▇@▇▇▇▇▇.▇▇▇.▇▇
Attention:
▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇
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With
a copy to:
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▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇)
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Email:
▇▇▇▇.▇▇▇▇▇▇@▇▇▇.▇▇▇
Attention: ▇▇▇▇
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Any Party
hereto may from time to time change its address for notices under this Section
4.5 by giving at least 10 days’ notice of such changed address to the other
Party hereto.
4.6. Waivers. No
waiver by either Party of any default with respect to any provision, condition
or requirement of this Agreement shall be deemed to be a continuing waiver in
the future thereof or a waiver of any other provision, condition or requirement
of this Agreement; nor shall any delay or omission of either Party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.
4.7. Headings. The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions of
this Agreement.
4.8. Successors and
Assigns. This Agreement shall be binding upon and inure to the
benefit of the Parties and their successors and legal
representatives. No Party shall assign this Agreement or any rights
hereunder without the prior written consent of the other Party (which consent
may be withheld for any reason in the sole discretion of the Party from whom
consent is sought).
4.9. No Third Party
Beneficiaries. This Agreement is intended for the benefit of
the Parties hereto and their respective permitted successors and assigns and is
not for the benefit of, nor may any provision of this Agreement be enforced by,
any other person.
4.10. Governing Law;
Venue. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without regard to
the principles of conflicts of laws. The parties hereby irrevocably
submit to the jurisdiction of the courts of the State of Delaware and the
federal courts of the United States of America located in the State of Delaware
in respect of the interpretation and enforcement of the provisions of this
Agreement.
4.11. Counterparts. This
Agreement may be executed in separate counterparts (including by facsimile),
each of which when so executed and delivered shall be deemed an original, but
both such counterparts shall together constitute one and the same
instrument.
[Remainder
of this page is intentionally blank.]
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IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed by
their respective authorized officers as of the date hereof.
| eTelecare Global Solutions, Inc. | |||
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||
|
Name:
▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
President and Chief Executive Officer
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NEWBRIDGE
INTERNATIONAL INVESTMENTS LTD.
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| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | ||
| Name: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇
Title:
Authorized Signatory
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