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EXHIBIT 10.18
▇▇▇▇ ▇▇▇▇▇▇▇▇ PLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ SERVICES LIMITED
WTT UK LIMITED
WT TECHNOLOGIES, INC.
FORTDOVE LIMITED
SHAREHOLDERS AGREEMENT
RELATING TO
The establishment and operation of Fortdove Limited as a joint venture company
▇▇▇▇▇▇▇▇▇, WILL & ▇▇▇▇▇
▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
TEL: ▇▇▇ ▇▇▇▇ ▇▇▇▇
FAX: ▇▇▇ ▇▇▇▇ ▇▇▇▇
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TABLE OF CONTENTS
Page
1. Interpretation..............................................................................................1
2. Conditions..................................................................................................6
3. Representations, Warranties and Indemnities.................................................................6
4. Constitution of the Company.................................................................................7
5. Business of Joint Venture...................................................................................7
6. Enforcement of Company's Rights.............................................................................8
7. Management of the Company...................................................................................8
8. Provision of Finance and Accounting Records................................................................12
9. The Business...............................................................................................15
10. Competition.................................................................................................16
11. Employees...................................................................................................20
12. Confidentiality.............................................................................................20
13. Tax Matters.................................................................................................21
14. Share Transfers.............................................................................................24
15. Resolution..................................................................................................26
16. Termination.................................................................................................27
17. Consequences of Notice under Clauses 15.2 and 16.2..........................................................31
18. Guarantees..................................................................................................34
19. Supremacy and General Covenant..............................................................................35
20. Announcements...............................................................................................36
21. Remedies....................................................................................................37
22. Warranty and Indemnity......................................................................................37
23. Provisions relating to this Agreement.......................................................................37
24. Law and Settlement of Disputes..............................................................................41
SCHEDULE 1: BUSINESS PLAN........................................................................................42
SCHEDULE 2: COMPLETION AGREEMENTS................................................................................54
SCHEDULE 3: DEED OF ADHERENCE....................................................................................55
SCHEDULE 4: TARGETS..............................................................................................56
ANNEX A: ARTICLES................................................................................................58
ANNEX B: COMPLETION BOARD RESOLUTION.............................................................................81
ANNEX C: COMPLETION SPECIAL RESOLUTION...........................................................................86
ANNEX D: OBJECTS CLAUSE (NOT USED)...............................................................................87
ANNEX E: LOAN NOTE...............................................................................................88
ANNEX F: WTT LICENCE (NOT USED)..................................................................................99
ANNEX G: WTT LOAN NOTE (NOT USED)...............................................................................100
ANNEX H: PRODUCTS CREATED BY HRPLC..............................................................................101
ANNEX I: BUSINESS CONTEMPLATED BY THE SHAREHOLDERS..............................................................102
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THIS AGREEMENT is dated 2000 and made
BETWEEN:
(1) ▇▇▇▇ ▇▇▇▇▇▇▇▇ PLC a company incorporated in England and Wales under
number 2107443 whose registered office is at Abbey House, ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ("HRPLC");
(2) ▇▇▇▇ ▇▇▇▇▇▇▇▇ SERVICES LIMITED a company incorporated in England and
Wales under number 756582 whose registered office is at Abbey House,
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ("▇▇▇▇");
(3) WTT UK LIMITED a company incorporated in England and Wales under
number 3854369 whose registered office is at c/o Jordans Limited,
▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ("WTT");
(4) WT TECHNOLOGIES INC., a Georgia company whose principal place of
business is at ▇▇▇▇▇ ▇▇▇, ▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
▇▇▇ (and whose name shall be changed to TRX Inc.) ("WT
TECHNOLOGIES"); and
(5) FORTDOVE LIMITED a company incorporated in England and Wales under
number 3841799 whose registered office is at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (the "COMPANY")
WHEREAS:
(A) ▇▇▇▇ and WTT have agreed to operate the Company as an equal joint
venture between them for the purpose of developing and supplying
technology and information management services and transaction
processing services to the travel industry;
(B) The Company has an authorised share capital of(pound)100 divided
into 100 ordinary shares of(pound)1 each (of which one share has
been issued and is fully paid up); and
(C) WTT has agreed to subscribe for one "B" Ordinary Share in the
Company and the parties have each agreed to finance the Company and
to regulate their rights and interests in relation to the Company in
the manner and on the terms hereinafter appearing.
NOW IT IS HEREBY AGREED as follows:
1. INTERPRETATION
1.1 DEFINITIONS
In this Agreement, where the context admits:
""A" ORDINARY SHARES" means the "A" Ordinary Shares in the capital of
the Company and ""A" Ordinary Share" means any one of them;
""A" ORDINARY SHAREHOLDER" means the registered holder of any "A"
Ordinary Share;
"ACT" means the Companies ▇▇▇ ▇▇▇▇ (as amended);
"ADDITIONAL DIRECTORS" means the Directors appointed to the Board in
accordance with clause 7.3;
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"AGREED FORM" means, in relation to any document, a document in the
terms signed, annexed to this Agreement or initialled by or on behalf
of a party, for identification;
"AMERICAS" means all countries and territories in continental North
America and continental South America (including Central America) and
includes any territories of the United States of America not forming
part of continental North America;
"ARTICLES" means the articles of association of the Company in the
Agreed Form attached to this Agreement as Annex A, as amended from time
to time and any reference to an "Article" in this Agreement shall mean
an article contained in the Articles;
"ASSOCIATE" means any subsidiary undertaking or parent undertaking, or
any other subsidiary undertaking of such parent undertaking, and for
these purposes "parent undertaking" means, in relation to another
undertaking (a subsidiary undertaking) an undertaking which holds
(directly or indirectly) at least 75 per cent. of the Voting Rights in
the undertaking and "subsidiary undertaking" shall be construed
accordingly;
"AUDITORS" means the auditors of the Company from time to time
appointed pursuant to section 384 of the Act and the first Auditors
shall be PriceWaterhouseCoopers;
"AVAILABLE PROFITS" means those profits of the Company available for
distribution within the meaning of Part VIII of the Act;
""B" ORDINARY SHARES" means "B" Ordinary Shares in the capital of the
Company and ""B" Ordinary Share" means any one of them;
""B" ORDINARY SHAREHOLDER" means a Shareholder who holds "B" Ordinary
Shares;
"BOARD" means the board of Directors, or the Directors present at a
duly convened meeting ("Board Meeting") of the Directors for the time
being (or a committee of the Directors) at which a quorum is present;
"BTI" shall have the meaning given to it in the WTT Licence;
"BTI GROUP" means those companies and their Associates who, from time
to time, enter into a partnership agreement with BTI or its Associates
but does not include Rider Travel;
"BUSINESS" means the business of the Company described in Clause 5.1;
"BUSINESS DAY" means any day (other than a Saturday or a Sunday) on
which banks are open for business in England and the United States;
"BUSINESS PLAN" in respect of each financial year has the meaning set
out in Clause 9.2;
"CHAIRMAN" means the chairman of the Board from time to time appointed
in accordance with Clause 7.1.5;
"CHANGE OF CONTROL NOTICE" shall have the meaning given in Clause
16.3.3;
"COMPLETION" means completion of the matters referred to in Clause 4.1;
"COMPLETION AGREEMENTS" means the agreements in the agreed form listed
in Schedule 2 and "COMPLETION AGREEMENT" shall mean any one of them;
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"COMPLETION BOARD RESOLUTIONS" means the resolutions of the Board in
the Agreed Form attached to this Agreement as Annex B;
"COMPLETION SPECIAL RESOLUTIONS" means the special resolutions of the
Company in the Agreed Form attached to this Agreement as Annex C;
"CONTROL" means, in relation to a body corporate, the power of a person
to secure that its affairs are conducted in accordance with the wishes
of that person:
(a) by means of the holding of shares or the possession of Voting
Rights in or in relation to that or any other body corporate;
or
(b) by virtue of any powers conferred by the articles of
association or any other document regulating that or any other
body corporate;
and a "Change of Control" shall occur if a person who controls any
company or undertaking ceases to do so, or if another person acquires
Control of it;
"CONFIDENTIAL INFORMATION" has the meaning set out in Clause 12.1;
"DIRECTORS" means the directors of the Company from time to time and
"DIRECTOR" shall mean any one of them;
"DISPOSITION" means any transfer, pledge, mortgage, charge or other
encumbrance or grant of an option (including an agreement relating to
voting rights) or other legal or beneficial interest in respect of any
Ordinary Share;
"FAIR VALUE" has the meaning set out in Clause 17.2.2;
"FINANCIAL YEAR" means the accounting reference period of the Company
determined in accordance with the Act from time to time;
"GROUP" means the Company and its Subsidiaries from time to time and a
"GROUP COMPANY" shall mean any one of them;
"▇▇▇▇ DIRECTOR" means a Director appointed by ▇▇▇▇ pursuant to Clause
7.1.2(a);
"HRPLC GROUP" means HRPLC and its Subsidiaries from time to time;
"ICC DISTRIBUTION AGREEMENT" means the Software Distribution Agreement
entered into on 29 November 1996 by and between Travel Technologies
Group, L.P. ("TTG") and Independent Computer Company Limited ("ICC")
for the distribution, marketing and servicing of certain of TTG's
software products within specified territory;
"LOAN NOTE" means the loan note in the Agreed Form attached to this
Agreement as Annex E constituted by the Company on the date of this
Agreement;
"LICENSED PRODUCTS" means the Software and any other software or
Product that may be licensed, assigned or otherwise transferred by WTT
or its Affiliates or any member of the HRPLC Group to any member of the
Group;
"MEMORANDUM" means the memorandum of association of the Company from
time to time;
"NON-BREACHING PARTY" shall have the meaning given in Clause 16.2.1;
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"OBJECTS CLAUSE" means the objects clause of the Memorandum in the
agreed form attached to this Agreement as Annex D;
"OFS CORPORATE PRODUCTS" means the software products specified in
Schedule 1 of the Service Bureau Agreement between the Company and
HRPLC;
"OFS CORPORATE SERVICES" means corporate travel services (as defined in
the WTT Licence) processed using OFS Corporate Products;
"OFS PRODUCTS" means those software products (other than OFS Corporate
Products) identified as such in Schedule A (as amended from time to
time) of the WTT Licence;
"OFS SERVICES" means travel services (other than OFS Corporate
Services) processed using OFS Products;
"OFS TERRITORY" shall have the meaning given to in clause 2.5 of the
WTT Licence;
"ORDINARY SHARES" means the A and B ordinary shares of (pound)1 in the
capital of the Company AND "ORDINARY SHARE" shall mean any one of them;
"PARTY" and "PARTIES" shall be construed as references to a party or
the parties to this Agreement;
"PRODUCT" means software products relating to travel transaction
processing;
"SHARE" means any share of any class in the capital of the Company;
"SHAREHOLDERS" means, from time to time, the registered holders of the
Ordinary Shares and "Shareholder" shall mean any one of them;
"SOFTWARE" means the software described in Schedule A of the WTT
Licence;
"SUBSIDIARY" means in relation to an undertaking (the holding
undertaking), any other undertaking in which the holding undertaking
directly or indirectly holds or controls either:
(a) a majority of the Voting Rights; or
(b) the right to appoint or remove directors having a majority of
the voting rights exercisable at meetings of the board of
directors of that undertaking,
and any undertaking which is a Subsidiary of another undertaking shall
also be a Subsidiary of that undertaking's holding undertaking. For the
avoidance of doubt, "undertaking" shall include a body corporate,
unincorporated association, joint venture or partnership;
"TERMINATION NOTICE" shall have the meaning given in Clause 15.2;
"TERRITORY" shall have the meaning given to it in the WTT Licence;
"TLC" means Technology Licensing Company, LLC, a Georgia limited
liability company whose registered address is at c/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇ ("TLC");
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"TTG PRODUCTS" means the software products set out in Schedule 1 (as
amended from time to time) to the Service Software Bureau Agreement
between the Company and HRPLC to be entered into on the date of this
Agreement;
"TTG SERVICES" means travel services processed using TTG Products;
"US AGREEMENTS" means the US Operating Agreement and the US Licence and
all ancillary documents contemplated by those agreements;
"US LICENCES" means the software licence between (1) WTT and (2) TLC in
the Agreed Form and entered into on the date of this Agreement;
"US OPERATING AGREEMENT" means the operating agreement between
WorldTravel Technologies LLC and ▇▇▇▇ ▇▇▇▇▇▇▇▇ International Benefits
Limited in respect of TLC in the Agreed Form to be entered into on the
date of this Agreement;
"VOTING RIGHTS" means voting rights exercisable at general meetings of
the members of the relevant company;
"WTT DIRECTOR" means a Director appointed by WTT pursuant to Clause
7.1.2(b); and
"WTT LICENCE" means the software licence between the Company and TLC in
the Agreed Form to be entered into on the date of this Agreement.
1.2 CONSTRUCTION OF CERTAIN REFERENCES
In this Agreement, except as otherwise provided and where the context
admits:
1.2.1 words and phrases the definitions of which are contained or
referred to in Part XXVI Companies Act 1985 shall be
construed as having the meanings thereby attributed to them;
1.2.2 references to, or to any provision of, any treaty, directive,
statute, regulation, decision, order, instrument, by-law, or
any other law of, or having effect in, any jurisdiction
("Laws") shall be construed also as references to all other
Laws made under the Law referred to, and to all such Laws as
amended, re-enacted, consolidated or replaced or as their
application is modified by other Laws from time to time and
whether before or after the date of this Agreement;
1.2.3 references to Clauses, Annexes and Schedules are references
to clauses of, and annexes and schedules to, this Agreement,
references to Paragraphs are, unless otherwise stated,
references to paragraphs of the Clause, Annex or Schedule in
which the reference appears and references to this Agreement
include the Annexes and Schedules;
1.2.4 references to the singular shall include the plural and vice
versa;
1.2.5 "person" includes any individual, partnership, company, body
corporate, corporation sole or aggregate, state or agency of
a state, and any unincorporated association or organisation,
in each case whether or not having separate legal
personality;
1.2.6 "company" includes any body corporate; and
1.2.7 a document in the "agreed form" is a reference to a document
in a form approved, and for the purposes of identification
signed, by or on behalf of the parties.
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1.3 HEADINGS
The headings and sub-headings are inserted for convenience only and
shall not affect the construction of this Agreement.
2. CONDITIONS
NOT USED
3. REPRESENTATIONS, WARRANTIES AND INDEMNITIES
3.1 As at the date of this Agreement, ▇▇▇▇ represents and warrants to WTT
that:
3.1.1 ▇▇▇▇ is the sole beneficial owner of all the issued and
allotted Shares free of all liens, charges, encumbrances or
other third party rights;
3.1.2 the Company has not traded nor has it received any income or
made any gains since its date of incorporation;
3.1.3 the Company has no assets (other than cash with accrued
interest in respect of its one fully paid up Ordinary Share)
or liabilities (whether actual, contingent or otherwise); and
3.1.4 the Ordinary Share referred to in Clause 3.1.3 constitutes the
whole of the issued and allotted share capital of the Company.
3.2 As at the date of this Agreement, each of HRPLC and ▇▇▇▇ represents and
warrants to WTT and WT Technologies that it has the right, power and
authority, and has taken all action and sought all approvals and
consents necessary to execute, deliver and exercise its rights, and
perform its obligations under this Agreement and the Completion
Agreements to which it is a party.
3.3 As at the date of this Agreement, each of WTT and WT Technologies
represents and warrants to ▇▇▇▇ and HRPLC that it has the right, power
and authority, and has taken all action and sought all approvals and
consents necessary to execute, deliver and exercise its rights, and
perform its obligations under this Agreement and the Completion
Agreements to which it is a party.
3.4 WT Technologies represents and warrants to ▇▇▇▇ and the Company that
WorldTravel Technologies LLC has adequate title to the Software for the
purposes of granting the software licence to TLC and that to the best
of its knowledge there are no third party rights or claims in respect
of the Software.
3.5 ▇▇▇▇ and HRPLC agree with WT Technologies and WTT (contracting for
itself and as trustee for the Company) to indemnify WT Technologies,
WTT and the Company against all losses (excluding indirect or
consequential loss), liabilities and costs which WT Technologies, WTT
or the Company may incur arising out of, or in connection with, any
breach of the representations or warranties set out in Clauses 3.1
and/or 3.2.
3.6 WTT and WT Technologies agree with HRPLC and ▇▇▇▇ (contracting for
itself and as trustee for the Company) to indemnify HRPLC, ▇▇▇▇ and the
Company against all losses (excluding indirect or consequential loss),
liabilities and costs which HRPLC, ▇▇▇▇ or the Company may incur
arising out of, or in connection with, any breach of the
representations or warranties set out in Clause 3.3.
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3.7 Without prejudice to the indemnity given in Clause 6 of the WTT
Licence, WT Technologies agrees to indemnify the Company in respect of
any loss arising from any claim made by ICC in respect of the use of
any intellectual property rights granted under the WTT Licence
following the termination of the ICC Distribution Agreement.
4. CONSTITUTION OF THE COMPANY
4.1 COMPLETION ARRANGEMENTS
At Completion:
4.1.1 ▇▇▇▇ shall procure that the Completion Special Resolutions are
passed, inter alia, to replace the Company's articles of
association with the Articles;
4.1.2 WTT shall subscribe for, and ▇▇▇▇ shall procure the passing of
the Completion Board Resolutions to authorise the allotment
and issue of, one 'B' Ordinary Share to WTT or such other
number of 'B' Ordinary Shares as shall ensure both ▇▇▇▇ and
WTT hold equal numbers of Shares;
4.1.3 each of the parties (other than the Company) shall enter into
the Completion Agreements to which it is a party; and
4.1.4 the Shareholders shall procure that the Company enters into
the Completion Agreements to which it is a party.
5. BUSINESS OF JOINT VENTURE
5.1 PRINCIPAL BUSINESS OF JOINT VENTURE
The business of the Company is the development of technology and
information management services and transaction processing services to
the travel industry, the supply of transaction processing services to
the travel industry and the sale of the Licensed Products in the
Territory.
5.2 DIVIDEND POLICY
5.2.1 Subject to Clause 5.2.2, each Shareholder shall approve, and
the Company shall distribute, by way of an interim or final
dividend, an amount equivalent to the full amount of Available
Profits that is not reasonably needed by the Group for
contingencies and capital expenditures in each financial year
within six months of the end of that financial year.
5.2.2 It is understood among the parties that it is the intention
that after the first financial year in which there are
Available Profits available for distribution, the Company will
distribute 50% of its Available Profits to the Shareholders.
5.2.3 The Company shall distribute any dividends declared in
accordance with Clauses 5.2.1 or 5.2.2 to the Shareholders in
accordance with the Articles.
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6. ENFORCEMENT OF COMPANY'S RIGHTS
Any rights of action which the Company may have in respect of breach of
this Agreement or any of the Completion Agreements or any obligation
owed to the Company under this Agreement or any of the Completion
Agreements shall be prosecuted by the directors of the Company
appointed by the Shareholder which is not, or whose Associate is not,
responsible for the breach (the "Non-Breaching Shareholder"). Those
Directors shall have full authority on behalf of the Company to take
any steps to enforce any rights, negotiate, litigate and settle any
claim arising out of the breach or exercise of any right of termination
arising out of the breach and the Shareholders shall take all steps
within their power to give effect to the provisions of this Clause. For
the avoidance of doubt, the quorum required to transact any of the
business or pass any Board resolutions referred to in this Clause shall
be two Directors appointed by the Non-Breaching Shareholder.
7. MANAGEMENT OF THE COMPANY
7.1 DIRECTORS
7.1.1 Number of Directors
The Shareholders shall procure that the number of Directors
shall be not less than five and not more than seven.
7.1.2 Shareholders' nominees
(a) Subject to Clauses 7.1.6 and 16.3.1, ▇▇▇▇ shall be
entitled to appoint three Directors to the Board (each
being a "▇▇▇▇ Director") at any time and to remove (and
replace) any Director so appointed by it.
(b) Subject to Clauses 7.1.6 and 16.3.1, WTT shall be
entitled to appoint two Directors to the Board (each
being a "WTT Director") at any time and to remove (and
replace) any Director so appointed by it.
(c) The first Directors appointed by ▇▇▇▇ and WTT are as
specified in the Completion Board Resolutions.
7.1.3 Additional Directors
(a) Subject to Clause 7.1.6 and the provisions of the Act,
the Shareholders shall be entitled to remove from the
Board the Additional Directors appointed pursuant to
Clause 7.3.
(b) In the event of any appointment made pursuant to Clause
7.1.2(a), the voting rights of the Directors shall be
governed in accordance with Article 27.3.
7.1.4 Alternate Directors
Subject to Clause 7.1.6 and the provisions of the Act, each
Shareholder shall be entitled to appoint to or remove from the
Board an alternate director for each of its Directors
appointed in accordance with Clause 7.1.2.
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7.1.5 Chairman
The Chairman shall be appointed by ▇▇▇▇. The Chairman shall
chair meetings of the Board and any committee of the Board of
which he is a member. The Chairman shall not have a second or
casting vote. A deputy Chairman shall be appointed by WTT who
shall chair meetings at which the Chairman is not present.
7.1.6 Consultation
Notwithstanding the provisions of the Articles, no Shareholder
shall appoint or remove any Director or any alternate director
without reasonable prior consultation, where practically
possible, with the other Shareholder.
7.2 BOARD MEETINGS
7.2.1 Board Meetings shall be convened and held at least four times
a year. Where reasonably practicable, at least seven days
prior to each Board Meeting, each Director shall be sent a
written agenda specifying the matters to be raised at the
relevant Board Meeting (together with a notice convening the
Board Meeting). Unless all the Directors present at the Board
Meeting otherwise unanimously agree, no resolution relating to
any business may be proposed or passed at any Board Meeting
unless the nature of the business is specified in the relevant
agenda.
7.2.2 Board Meetings shall be held in London or another location in
the United Kingdom agreed by the Shareholders.
7.2.3 At each Board Meeting, and in respect of each resolution
proposed to the Board at a Board Meeting, each WTT Director
(or his alternate) shall have three votes, each ▇▇▇▇ Director
(or his alternate) shall have three votes and any Additional
Directors appointed to the Board shall be entitled to one vote
each, provided that if one or more WTT Directors or ▇▇▇▇
Directors (as the case may be) are absent from such meeting,
any WTT Director or ▇▇▇▇ Director (or his alternate)(as the
case may be) present at the meeting in person, or represented
by an alternate, shall be entitled to cast the votes of the
WTT Director or ▇▇▇▇ Director (as the case may be) not
present. All resolutions of the Board shall be passed by
simple majority of the number of votes cast.
7.2.4 No Board Meeting (or meeting of any committee thereof) may
proceed to business nor transact any business unless a quorum
is present at the start of and throughout such meeting. Except
as otherwise provided in Clause 6, a quorum shall be one WTT
Director and one ▇▇▇▇ Director.
7.3 OPERATING COMMITTEE
The Board shall establish an operating committee to conduct the
day-to-day business of the Company. ▇▇▇▇ will nominate and appoint the
members of the operating committee including the managing director and
the finance director (the "Finance Director") (together, "Additional
Directors"), subject to WTT's prior approval of such candidates (which
in the case of the managing director shall not be unreasonably withheld
or a decision thereon unreasonably delayed).
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7.4 FUNCTIONS OF THE OPERATING COMMITTEE
The Operating Committee shall be accountable to and shall report to the
Board and the Shareholders but otherwise shall carry out its functions
in such manner as it thinks fit and may appoint sub-committees to carry
out any of its functions on its behalf as it considers appropriate.
7.5 MAJOR ACTIONS
The Shareholders shall procure that no member of the Group shall,
without the prior written consent of the Shareholders:
7.5.1 amend, supplement, repeal, or otherwise change the Memorandum
or Articles of the Company in any manner or permit any Group
Company to amend, supplement, repeal, or otherwise change its
memorandum or articles or other governing documents, as
applicable, in any manner;
7.5.2 incorporate or form any new Group Company;
7.5.3 vary the authorised or issued share capital of the Company or
any Group Company (including by reduction or repurchase of
share capital) or vary the rights attaching to shares in the
capital of the Company or any Group Company;
7.5.4 allow any Group Company to authorise, designate, issue or sell
any additional shares or other securities of such Group
Company (including any options, warrants, and purchase rights)
except to another Group Company or pursuant to Clause 7.5.6
below;
7.5.5 establish, or allow any Group Company to establish, any option
or other equity based incentive plan or any bonus, profit
sharing or other incentive scheme for its management,
directors, or employees or grant, or allow any Group Company
to grant, any share options or other rights to purchase
securities;
7.5.6 redeem or repurchase any security of the Company (except for
repurchase from departing employees) or allow any Group
Company to purchase any security of the Company unless done on
a pro rata basis with respect to all shareholders of the
Company or pursuant to the terms of Clause 14.3;
7.5.7 declare, make distributions or pay, or allow any Group Company
to declare, make distributions, or pay any dividends (whether
interim or final) in cash or in kind with respect to any
security of such Group Company other than in accordance with
Clause 5.2;
7.5.8 change the name of the Company or the name of any of the
Company's Products other than in accordance with Clause 17.4;
7.5.9 sell, exchange, transfer, or otherwise dispose of any shares
or other security of any Group Company or other security of
any other, except to another Group Company or pursuant to
Clauses 7.5.4, 7.5.5 and 7.5.6, or pursuant to Clause 5.6.5
above;
7.5.10 enter into, or allow any Group Company to enter into, any
merger, consolidation, or statutory share exchange with any
other entity, except with another Group Company;
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7.5.11 sell, exchange, lease, licence, or otherwise dispose of, or
allow any Group Company to sell, exchange, lease, licence, or
otherwise dispose of, any material asset or assets with an
aggregate value in excess of (pound)50,000 in any one
transaction or series of related transactions in a financial
year;
7.5.12 take any action to voluntarily dissolve, liquidate, wind up or
carry out any partial liquidation or distribution of any Group
Company;
7.5.13 acquire, or allow any Group Company to acquire, assets of any
other person or entity, except for acquisitions with an
aggregate purchase consideration of less than (pound)250,000
in any one transaction or series of related transactions in a
financial year;
7.5.14 acquire, or allow any Group Company to acquire, securities of
any other person or entity;
7.5.15 amend the Business Plan other than in accordance with Clause
9.2;
7.5.16 save insofar as any Group Company is contractually bound to do
so or as provided in the Business Plan establish any pension
or other similar scheme for any director or employee (or his
dependents) or provide or pay contributions in respect of any
pensions or annuities;
7.5.17 enter into any material agreement, licence, lease,
transaction, or other arrangement with any Associate or Group
Company, provided that the Shareholders will not unreasonably
withhold their consent to such agreement, licence, lease,
transaction, or other arrangement if the terms are equivalent
to those in an arms length transaction;
7.5.18 enter into, or allow any Group Company to enter into, any new
line of business that is unrelated to an existing business
operation unless the entry into the new line of business is
provided for in the Business Plan;
7.5.19 incur, or allow any Group Company to incur, any single expense
or capital expenditure of an amount in excess of (pound)50,000
unless such expenditure is provided for in the Business Plan;
7.5.20 borrow, or allow any Group Company to borrow, money in excess
of (pound)100,000 unless such arrangement is set forth in the
Business Plan;
7.5.21 issue any debenture or loan stock (whether secured or
unsecured) or create any mortgage, charge, lien, encumbrance
or other third party right over any Group Company assets or
give any guarantee or indemnity to, or become surety for, any
third party;
7.5.22 make any arrangement in respect of any joint venture or
partnership or for the acquisition of the whole or
substantially the whole of the assets and undertaking of that
company or acquire any part of the issued share capital or the
assets and undertakings of another company;
7.5.23 make any change in the accounting policies or the Company's
Auditors, bankers or financial year;
7.5.24 make, grant or allow any claim, disclaimer, surrender,
election or consent by any Group Company for taxation
purposes;
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7.5.25 approve the appointment, remuneration, transfer and discharge
of the managing director or Finance Director;
7.5.26 make, approve, grant or allow any claim, disclaimer,
surrender, election or consent for taxation purposes; or
7.5.27 authorize, ratify, or enter into any agreement to undertake
any of the matters specified in items 7.5.1 through 7.5.26
above.
The Company shall address all requests for approval of any of the above
listed actions to a shareholder representative or his successor
indicated in writing by his appointing Shareholder. The decision
regarding such request shall, unless otherwise agreed between the
Shareholders, be sent by the Shareholders to the Company within ten
Business Days of its receipt of such request. If the decision is not
sent within such ten Business Day period, the request for approval
shall be deemed to have been denied.
8. PROVISION OF FINANCE AND ACCOUNTING RECORDS
8.1 CAPITAL FUNDING
8.1.1 Capital needs of the Group shall be funded by available funds
from operations of the Group. In the event the funds from
operations are insufficient to fund the capital needs of the
Group, the Company shall seek to obtain additional capital
from third-party lending sources, including banks in
accordance with the provisions of Clause 8.1.3. If the Company
is unable to satisfy the Group's capital requirements after
making a good faith effort to secure such funding from
third-party lending sources, then the Company may subscribe
for such number of Loan Notes as it may require PROVIDED THAT
such borrowing shall be simultaneously and in equal amounts
from both loan notes. Subject to Clause 7.5.3 and 7.5.21, the
Company may issue debt or equity securities of the Company
(the "Issued Securities").
8.1.2 In the event the Company plans to issue the Issued Securities
pursuant to Clause 8.1.1, the Shareholders have the right to
buy the Issued Securities, PRO RATA. The Company shall notify
the Shareholders of the type, amount and price of the Issued
Securities. Each Shareholder shall have 30 days within which
to elect to purchase all or part of its PRO RATA portion of
the Issued Securities. In the event a Shareholder does not
elect to purchase its entire PRO RATA portion of the Issued
Securities, the other Shareholder shall be notified thereof
and shall have three Business Days to agree to purchase all or
part of those remaining Issued Securities but only on the
price and terms offered to the Shareholders. Any Issued
Securities not purchased by the Shareholders may be sold to
third-party purchasers within 120 days. Any Issued Securities
not so purchased by a third party within such period shall
again become subject to the procedures of this Clause.
8.1.3 Any member of the Group may borrow additional sums from third
parties on the most favourable terms available as to interest,
repayment and security compatible with its needs, but shall
not, without the prior written consent of the Shareholders,
allow any prospective lender the right to participate in the
share capital of any Group Company or otherwise in the
Business as a condition or term of any loan or advance.
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8.1.4 Except with the written consent of each Shareholder, no party
shall be obliged to guarantee or provide security for any
indebtedness of any Group Company, but where the Shareholders
agree that any or all of the parties shall do so they shall do
so severally in the proportions of their participation in the
equity share capital of the Company.
8.1.5 Each of the Shareholders will take all reasonable steps
necessary to procure that relevant bonding arrangements are
made available to support the business of the Company. Where a
Shareholder (or its Associate) makes a bond available to the
Company with the other Shareholder's prior written consent:
(a) the liability of that Shareholder (or its Associate)
under such bond (other than liability solely
attributable to its act or default) shall be borne by
each of the Shareholders in the same proportion as its
holding of Shares at the time of the provision of the
bond; and
(b) the other Shareholder shall indemnify the Shareholder
(or its Associate) for all amounts payable by it
pursuant to sub-clause (a) above.
8.1.6 Notwithstanding Clause 8.1.4, where the Shareholders give a
joint and several guarantee or indemnity to a third party in
respect of any obligations of the Company, the following
provisions shall apply:
(a) the aggregate liability of a Shareholder under the
guarantee or indemnity shall be in the same proportion
as its holding of Shares at the time the guarantee or
indemnity is given;
(b) a Shareholder shall be responsible for the whole of any
liability pursuant to the guarantee or indemnity which
is solely attributable to its act or default; and
(c) each Shareholder shall indemnify the other Shareholders
for all amounts payable by the first-named Shareholder
pursuant to sub-clauses (a) and (b).
8.2 ACCOUNTING RECORDS
8.2.1 The Shareholders shall each procure that each member of the
Group shall at all times maintain accurate and complete
accounting and other financial records in accordance with the
requirements of all applicable laws and generally accepted
accounting principles applicable in the United Kingdom ("UK
GAAP").
8.2.2 The Company shall deliver the following information to each of
the Shareholders:
(a) Audited Annual Financial Statements.
As soon as practicable and, in any case, within 90 days
after the end of each financial year, audited financial
statements of the Company, consisting of a consolidated
balance sheet of the Company as of the end of such
financial year and consolidated statements of
operations, statements of Shareholders' equity and
statements of cash flows of the Company for such
financial year, setting forth in each case, in
comparative form, the figures for the preceding
financial year, all in reasonable detail and fairly
presented in accordance with UK generally accepted
accounting principles ("GAAP") applied on a consistent
basis throughout the periods reflected therein, and
accompanied by an opinion thereon of the Auditors.
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(b) Quarterly Financial Statements.
Within 45 days after the end of each of the first three
calendar quarters and no later than 20 days after the
end of the final calendar quarter, copies of the
unaudited consolidated balance sheet of the Company as
at the end of such calendar quarter and the related
unaudited consolidated statements of operations and cash
flows for such calendar quarter and the portion of the
calendar year through such calendar quarter, setting
forth in comparative form the figures for the
corresponding periods of (a) the previous calendar year
and (b) the budget for the current year, prepared in
reasonable detail and in accordance with UK GAAP applied
consistently throughout the periods reflected therein
and certified by the Finance Director of the Company as
presenting fairly the financial condition and results of
operations of the Company (subject to customary
exceptions for interim unaudited financial statements).
The above information representing the first calendar
quarter shall be reviewed by the Auditors at WTT's
expense.
(c) Monthly Unaudited Financial Statements.
As soon as available, but in any event within 20 days
after the end of each calendar month, copies of the
unaudited consolidated balance sheet of the Company as
at the end of such calendar month and the related
unaudited consolidated statements of operations and cash
flows for such calendar month and the portion of the
calendar year through such calendar month, in each case
setting forth in comparative form the figures for the
corresponding periods of (a) the previous calendar year
and (b) the budget for the current year, prepared in
reasonable detail and in accordance with UK GAAP applied
consistently throughout the periods reflected therein
and certified by the Finance Director of the Company as
presenting fairly the financial condition and results of
operations of the Company (subject to customary
exceptions for interim unaudited financial statements).
(d) Management's Analysis.
All the financial statements delivered pursuant to
paragraphs (a), (b) and (c) shall be accompanied by an
informal narrative description of material business and
financial trends and developments and significant
transactions that have occurred in the appropriate
period or periods covered thereby.
8.3 INSPECTION
The Company shall (for itself and as agent for any member of the Group)
permit any Shareholder, by its representatives, agents or attorneys
(provided that such entity or person executes an appropriate
confidentiality agreement as may be necessary):
8.3.1 on reasonable notice and during business hours, to examine all
books of account, records and other papers of any member of
the Group and to make copies and take extracts from any
thereof;
8.3.2 to discuss the affairs, finances and accounts of the any
member of the Group with the Group's officers and Auditors
(and by this provision the Company, as agent as aforesaid,
hereby authorises the Auditors to discuss with any Shareholder
and its representatives, agents or attorneys the finances and
accounts of any member of the Group); and
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8.3.3 to visit and inspect, at reasonable times and on reasonable
notice during normal business hours, the properties of any
member of the Group.
8.4 OTHER INFORMATION
The Company shall deliver the following to the Shareholders:
8.4.1 promptly after the submission thereof to the Company, copies
of any detailed reports (including the Auditors' comment
letter to management, if any such letter is prepared)
submitted to the Company by its independent Auditors in
connection with each annual or interim audit of the accounts
of the Group;
8.4.2 with reasonable promptness, notice of any default by any
member of the Group under any material agreement to which it
is a party; and
8.4.3 promptly upon request therefor, such other data, filings and
information any Shareholder may from time to time reasonably
request.
9. THE BUSINESS
9.1 CONTENT OF BUSINESS PLAN
The Shareholders and the Company agree that the Group's business and
finances shall be managed in accordance with the Business Plan. The
Shareholders shall procure that the Board procures that two months
before the beginning of each financial year the Operating Committee
prepares a "rolling" business plan which shall (except as otherwise
provided in Clause 9.3) include a budget for that financial year and
the two succeeding financial years which shall be in a form from time
to time agreed. The draft business plan shall include at least each of
the following:
9.1.1 a summary of business objectives;
9.1.2 a review of the projected business;
9.1.3 projected funding and method of funding;
9.1.4 a projected profit and loss account, balance sheet, capital
expenditure (including technology related items) and cash
flow; and
9.1.5 details of the technology platform to be used by the Group.
9.2 APPROVAL OF BUSINESS PLAN
Subject to Clause 9.3, a draft business plan shall be presented to the
Shareholders before the beginning of each financial year, for approval
by the Shareholders. The draft business plan shall be approved by the
Shareholders, subject to such amendments as they think fit, and the
approved business plan shall be the "Business Plan" for the next
financial year.
9.3 FIRST BUSINESS PLAN
The provisions of Clause 9.2 shall not apply to the first Business Plan
(as set out in Schedule 1 to this Agreement) which shall be deemed to
be approved by the Shareholders pursuant to Clause 9.2 on the date of
this Agreement.
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10. COMPETITION
10.1 Save as otherwise provided in this Agreement and the Completion
Agreements:
(a) each Shareholder covenants for itself and on behalf of
its Associates that it shall not, either alone or
jointly, directly or indirectly, carry on or be engaged
or concerned or interested in or solicit any business
which is in competition with the Business of the Company
(or any Group Company) as carried on at any time during
the term of this Agreement in the Territory; and
(b) the Company covenants for itself and on behalf of the
Group that it shall not, either alone or jointly,
directly or indirectly, carry on or be engaged or
concerned or interested in or solicit any business which
is in competition with the business of a Shareholder or
its Associates carried on at the date of this Agreement.
10.2 For the avoidance of doubt, a Shareholder or its Associates which
provide travel services shall not be deemed to be in breach of Clause
10.1 by virtue of:
10.2.1 using a Product in the Territory which competes with a
Licensed Product upon receipt of a written request by an
existing or prospective client of that Shareholder so long as
such requested Product is used only for such client;
10.2.2 using and selling Products in the Territory which compete with
ResAssist and Highlighter, so long as such competing Products
are compatible with the technology and systems used by ▇▇▇▇
and HRPLC and are either of a higher quality, lower price or
better performance;
10.2.3 carrying on, alone or jointly, directly or indirectly, in the
Territory any business which it carried on in the Territory at
the date of this Agreement or at any time in the twelve months
preceding this Agreement or which are contemplated in Annex I
to this Agreement;
10.2.4 holding less than ten per cent of any class of shares or
debentures of any company listed on any recognised stock
exchange which competes directly or indirectly with the
Business; or
10.2.5 any of the matters contemplated in terms of Clauses 10.3 or
10.4.
10.3 WT Technologies and its Subsidiaries may only provide processing
services (then offered by any Group Company) (other than OFS Services)
if requested in writing to do so by an existing client of WT
Technologies or its Subsidiaries located within in the Territory
provided that such services may only be processed outside the
Territory. WT Technologies shall immediately notify the Group when such
written notice is received from such a client. WT Technologies pay to
the Group within 30 days of the end of each financial year of WT
Technologies a sum equivalent to 50 per cent. of net profits generated
by WT Technologies as a result of such request from such a client in
that financial year.
10.4 WT Technologies and its Subsidiaries may only provide and process OFS
Services in the OFS Territory if requested in writing to do so by an
existing OFS client of WT Technologies or its Subsidiaries. For the
avoidance of doubt, WT Technologies and its Subsidiaries may provide
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OFS Services outside the OFS Territory without restriction. WT
Technologies shall immediately notify the Company when such written
request is received from such a client. WT Technologies shall have no
obligation to account to the Group for any profits generated by it as a
result of such a request from a client unless the aggregate of all
transaction volumes generated by the provision of such services in a
financial year of WT Technologies exceed 10 per cent. of the Group's
OFS Service transaction volumes in that financial year (the "OFS
Services Thresholds"), in which case WT Technologies shall pay to the
Group within 30 days of the end of that financial year a sum equivalent
to 50 per cent. of net profits generated from the transaction volume
that exceeds 10 per cent. of the Group's OFS Service transaction
volumes in that financial year.
10.5 Subject to Clause 10.7, any Group Company may use OFS Corporate
Products only in the Territory.
10.6 Subject to Clause 10.8, any Group Company may use OFS Products only in
the OFS Territory.
10.7 Any Group Company may only process services (then offered by WT
Technologies and its Subsidiaries) (other than OFS Services) if
requested in writing to do so by an existing client of the Group
Company located outside the Territory provided that such services may
only be processed within the Territory. The Company shall immediately
notify WT Technologies when such written request is received from such
a client. The Group Company shall pay to WT Technologies within 30 days
of the end of each financial year a sum equivalent to 50 per cent. of
any net profits generated by the Group as a result of such request from
such a client in that financial year. For the avoidance of doubt,
processing services provided to Rider Travel in the Americas cannot be
processed through any Group Company.
10.8 Any Group Company may only process OFS Services at a location outside
the OFS Territory for an existing OFS client if requested in writing to
so do by such a client. The Group Company shall immediately notify WT
Technologies when such written request is received from such a client.
The Group Company shall have no obligation to account to WT
Technologies for any profits generated by it as a result of such a
request from a client unless the aggregate of all transaction volumes
generated by the provision of such services in a financial year exceed
10 per cent. of WT Technologies' OFS Services transaction volumes, in
which case, the Group Company shall pay to WT Technologies within 30
days of the end of that financial year a sum equivalent to 50 per cent.
of net profits generated from the transaction volume that exceed 10 per
cent. of WT Technologies' OFS Services transaction volumes in that
financial year.
10.9 If WT Technologies and its Subsidiaries receives a request in writing
from an existing OFS client to provide and process OFS Services within
the OFS Territory and WT Technologies and its Subsidiaries transfers
the request to any Group Company, the Group Company shall pay to WT
Technologies within 30 days of the end of each financial year a
commission equivalent to 20% of net profits generated by the Group
Company's OFS Services transactions in that financial year in respect
of such client for a period of 42 months starting at the beginning of
the first month in which OFS Services for such client commences.
10.10 If a Group Company receives a request in writing from an existing
client to provide OFS Services outside the OFS Territory and the Group
Company transfers the request to WT Technologies and its Subsidiaries,
WT Technologies shall pay the Group within 30 days of the end of each
financial year of WT Technologies a commission equivalent to 20% of net
profits generated by WT Technologies transacting in that financial year
in respect of such client for a period of 42 months starting at the
beginning of the first month in which services for such client
commences.
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10.11 For the purposes of this Clause 10, 'existing client' shall have its
ordinary meaning and 'existing OFS client' shall mean clients of the
relevant party to whom OFS Services are currently being or have, within
the previous twelve months been, provided as at the date of the
provision of the relevant services .
10.12 At the Company's written request, a non-exclusive licence (which
licence shall be capable of being sub-licensed on conditions reasonably
acceptable to HRPLC) in respect of the use of a Product created by any
existing member of the HRPLC Group (other than Rider Travel) and
described in Annex H hereto shall be granted at the Company's cost to
the Company (or such member of the Group as the Company may in writing
direct) for a consideration equivalent to the reasonable development
cost of the relevant Product incurred during the period commencing from
the date of this Agreement until the date of grant of such licence.
10.13 At the Company's written request, a non-exclusive licence (which
licence shall be capable of being sub-licensed on conditions reasonably
acceptable to HRPLC) in respect of the use of any Product (other than
those referred to in Clause 10.12 above) created by any member of the
HRPLC Group (other than Rider Travel) after the date of this Agreement
shall be granted at the Company's cost to the Company (or such other
member of the Group as the Company may in writing direct) for a
consideration equivalent to the fair market value of such Product at
the date of grant of such licence PROVIDED that:
(a) the foregoing obligation shall not apply in relation to
any Product developed for the use in the business of any
member of the HRPLC Group which is not subject to the
restrictions set out in Clauses 10.1;
(b) a Product to which this Clause 10.13 applies may only be
used by WT Technologies in the Americas or under Clause
10.3 or 10.4;
(c) upon request by WT Technologies, the Company shall grant
a sub-licence to WT Technologies (or such Subsidiary of
WT Technologies as WT Technologies may request) of a
product to which this Clause 10.13 applies on such terms
as are in the spirit of this Agreement and at fair
market value provided that such sub-licence may only be
used by WT Technologies or its Subsidiary in the
Americas or under Clause 10.3 or 10.4.
10.14 An exclusive licence in respect of the use of any Product created by a
member of the Group shall be offered at WT Technologies' cost to WT
Technologies (or such Subsidiary of WT Technologies as WT Technologies
may request) in respect only of those territories in which WT
Technologies is not restrained from competing in terms of Clause 10.1
((or Clause 10.3) as the case may be) at a price equivalent to the fair
market value of such Product at the date of grant of such licence. In
the event WT Technologies refuses such offer (or does not accept such
offer within 60 days of the date of receipt of such offer, in which
case the offer shall be deemed to have been refused by WT
Technologies), the Company shall be entitled to exploit such Product in
those territories in which the Company would otherwise be restrained
from competing in terms of Clauses 10.1 or 10.3 (as the case may be)
(save that this shall not entitle the Company to compete with Rider
Travel).
10.15 An exclusive licence in respect of the use of any Product created by WT
Technologies (or any of its Subsidiaries) shall be offered at the
Company's cost to the Company (or such Group Company as the Company may
request) in respect only of the Territory at a price equivalent to the
fair market value of such Product at the date of grant of such licence.
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In the event the Company refuses such offer (or does not accept such
offer within 60 days of the date of receipt of such offer, in which
case the offer shall be deemed to have been refused by the Company), WT
Technologies shall be entitled to exploit such Product in the
Territory.
10.16 Each party undertakes (for itself and on behalf of its Subsidiaries) to
keep the other parties promptly and fully informed in relation to the
creation of any Products that may be capable of being licensed pursuant
to Clauses 10.13, 10.14, 10.15 or 10.16.
10.17 For the avoidance of doubt, the obligations specified in Clauses 10.13,
10.14, 10.15 and 10.16 shall cease to apply to:
10.17.1 any member of the HRPLC Group in the event that ▇▇▇▇ ( or a
Permitted Transferee of all of ▇▇▇▇'▇ Shares) ceases to hold
Shares in the Company; or
10.17.2 to WT Technologies and its Associates in the event that WTT
(or a Permitted Transferee) of all of WTT's Shares) ceases to
hold Shares in the Company.
10.18 The obligations contained in clause 10.1 shall continue to apply to a
Shareholder for a period of one year after the transfer of its Shares
in accordance with this Agreement provided that this restriction shall
not apply where, at the time of transfer, a Shareholder holds less than
ten per cent. of the entire issued share capital of the Company and has
no Director appointed by it to the Board where that party ceases to be
a Shareholder other than by reason of the termination of this
Agreement.
10.19 For the avoidance of doubt, Products licensed to the Group under
Clauses 10.13 and 10.14 may also be used by members of the HRPLC Group
for their own use and may be licensed non-exclusively to other parties
provided that the use of such Products by such other party does not
contravene Clause 10.1. Upon the granting of the licenses to a Group
Company in accordance with clause 10.13 and/or 10.14, the Group Company
and HRPLC shall negotiate in good faith with a view to outsourcing the
operations of HRPLC in relation to the licence at a price to be less
than the then current HRPLC Group cost of such operations.
10.20 Where a member of the HRPLC Group licenses a Product to the Company
pursuant to Clauses 10.13 or 10.14 and the Company sub-licenses that
Product to WTT or WT Technologies, the relevant sub-licensee shall not
use such Product in competition with a member of the HRPLC Group in
Canada and outside the Americas.
10.21 WT Technologies undertakes on behalf of itself and its Subsidiaries to
procure that accurate records are maintained in respect of any profit
generated by the processing services permitted in terms of Clauses 10.3
and 10.4 and in respect of the OFS Service transaction volumes and to
allow any authorised representative, agent or employee of any member of
the Group to access for the purposes of verifying the net profits
referred to in Clauses 10.3 and 10.4, such records at reasonable times
and upon reasonable notice, subject to the entering into of any
reasonable confidentiality undertakings, as WT Technologies considers
necessary.
10.22 The Company undertakes on behalf of itself and each member of the Group
to procure that accurate records are maintained in respect of any
profit generated in terms of Clauses 10.7 and 10.8 and in respect of
the OFS Services transaction volumes under clause 10.8 and to allow any
authorised representative, agent or employee of WTT or WT Technologies
to access for the purposes of verifying the net profit referred to
Clauses 10.7 and 10.8, such records at reasonable times and upon
reasonable notice, subject to entering into any reasonable
confidentiality undertakings as the Group Company considers necessary.
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10.23 No Group Company shall or be entitled to waive any breach or attempted
breach of Clause 10.1(a) by a Shareholder or its Associate, whether or
not on the application of such Shareholder, without the consent of the
other Shareholder.
11. EMPLOYEES
11.1 Each Shareholder covenants to the Company that, for so long as it is a
Shareholder in the Company, it shall not and shall procure that none of
its Subsidiaries or Associates and no person on its behalf shall
engage, employ, canvass, solicit or endeavour to entice away from any
Group Company any person who is an officer, employee or manager of such
Group Company or who has been an officer, employee or manager of such
Group Company at any time during the term of this Agreement and in
either case has confidential information or know-how or would be in a
position to exploit trade connections of the Group.
11.2 The Company covenants to each party hereto that, for so long as each
party remains a party to this Agreement, it shall not and shall procure
that no Group Company and no person on its behalf shall engage, employ,
canvass, solicit or endeavour to entice away from such party (or any
Associate or Subsidiary of such party) any person who is an officer,
employee or manager of such party or who has been an officer, employee
or manager of such party at any time during the term of the Agreement
and in either case has confidential information or know-how or would be
in a position to exploit trade connections of the such party. This
Clause will not prevent the appointment of employees, officers or
managers of each party as the party's nominees on the Board in
accordance with Clause 7.1.2 or the secondment to a Group Company from
time to time by any party of its employees, officers or managers.
12. CONFIDENTIALITY
12.1 CONFIDENTIALITY
12.1.1 Each party shall:
(a) treat as strictly confidential:
(1) all information of a confidential nature obtained
or received by it as a result of negotiating,
entering into or performing its obligations under
this Agreement which relates to the negotiation
of, or the provisions or subject matter of, this
Agreement or to any other party; and
(2) all other business, financial, operational and
marketing information (or any other information of
a secret or proprietary nature) relating to any
other party, (together "Confidential
Information"); and
(b) not, except with the prior written consent of the
relevant other party (which shall not be unreasonably
withheld or delayed), publish or otherwise disclose to
any person any Confidential Information.
12.1.2 Each agrees with the other only to make Confidential
Information available to its directors, consultants,
employees, advisers or other representatives who need to know
that information for the purposes and implementation of this
Agreement or the Business and shall not use, directly or
indirectly, Confidential Information for any other purpose
whatsoever.
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12.2 PERMITTED DISCLOSURES
Clause 12.1 shall not apply if and to the extent that the party
disclosing Confidential Information can demonstrate that:
12.2.1 such disclosure is required by law or by any securities
exchange or regulatory or governmental body having
jurisdiction over it and whether or not the requirement has
the force of law; or
12.2.2 the Confidential Information concerned was lawfully in its
possession (as evidenced by written records) prior to its
being obtained or received as described in Clause 12.1; or
12.2.3 the Confidential Information concerned has come into the
public domain other than through its fault or the fault of any
person to whom such Confidential Information has been
disclosed as permitted by Clause 12.1; or
12.2.4 such disclosure is necessary for the purposes of applying for
or obtaining any clearances or approvals referred to in Clause
22.5.
12.3 CONTINUANCE OF RESTRICTIONS
The restrictions contained in this Clause 12 shall survive Completion
and shall continue in relation to each party throughout the term of
this Agreement and indefinitely thereafter.
13. TAX MATTERS
13.1 INTERPRETATION
In this Clause 13:
"CHAPTER IV" means Chapter IV Part X of ICTA 1988 as supplemented by
Schedule 18 of ICTA 1988;
"GROUP RELIEF" means any consortium relief in respect of losses of a
company or other amounts eligible for relief which may be available to
any of the Shareholders, the Company, or any member of the same group
of companies as a Shareholder hereto pursuant to sections 402 to 413
ICTA 1988;
"ICTA 1988" means the Income and Corporation Taxes ▇▇▇ ▇▇▇▇;
"MEMBER OF THE SAME GROUP OF COMPANIES" shall mean a company which is a
member of a group of companies (defined in section 413 ICTA 1988) of
which the respective Shareholder is a member;
"RATE OF CORPORATION TAX APPLICABLE TO ANY RELEVANT ACCOUNTING PERIOD"
means the full rate of corporation tax (ignoring any application of
section 13 of ICTA 1988) applicable to such Relevant Accounting Period
or where more than one rate is applicable, the average rate over that
Relevant Accounting Period calculated on a time basis;
"RELEVANT ACCOUNTING PERIOD" means an accounting period within the
meaning of section 12 ICTA 1988; and
"VALUE ADDED TAX" means value added tax as provided for in the Value
Added Tax ▇▇▇ ▇▇▇▇ and legislation supplemental thereto or replacing
modifying or consolidating such legislation and any reference to "VAT"
shall be construed accordingly.
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13.2 GROUP INCOME ELECTIONS
13.2.1 The Shareholders shall each join with the Company in making
elections under section 247 ICTA 1988 ("group income
elections") with a view to enabling interest to be paid by the
Company to the Shareholders without deducting income tax.
13.2.2 Once group income elections have been accepted by the
Inspector of Taxes, all payments from the Company to the
Shareholders shall be paid in accordance with such elections.
13.2.3 If any Shareholder transfers all or any part of its
shareholding in the Company, the transferor and the other
Shareholders will procure that the Company enters into new
group income elections if available under section 247 ICTA
1988.
13.3 GROUP RELIEF
13.3.1 The Shareholders and any other company which is a member of
the same group of companies as any Shareholder ("Claimant
Company") may claim Group Relief from the Company
("Surrendering Company") to which they may be entitled for any
Relevant Accounting Period of the Company. The Shareholders
shall consent to any such claim and shall take such action as
is requisite to procure that the Company surrenders such Group
Relief in accordance with the provisions of Chapter IV.
13.3.2 The Shareholders and any other company which is a member of
the same group of companies as any Shareholder ("Surrendering
Company") may offer to surrender Group Relief to the Company
("Claimant Company") by written notification to the Company
(with a copy to the other Shareholder) in respect of any
Relevant Accounting Period of the Surrendering Company of such
amount as is permitted under Chapter IV. If the other
Shareholder (not being the Surrendering Company) shall agree
in writing such surrender within thirty days of such
notification, the Shareholders shall consent to any such
surrender and take such action as is requisite to procure that
the Company accepts such Group Relief.
13.3.3 The Company shall not be obliged to accept surrenders of Group
Relief to the extent that its corporation tax liability can be
relieved in the Relevant Accounting Period by credit for tax
paid or suffered by it, in any jurisdiction outside the United
Kingdom.
13.4 PAYMENT FOR GROUP RELIEF
In consideration of any surrender of Group Relief within Clause 13.3,
the Claimant Company shall pay to the Surrendering Company an amount
equal to the amount of corporation tax for which, but for the
surrender, the Claimant Company would have been liable or (as the case
may be, where the Company is the Surrendering Company) an amount equal
to the product of the Group Relief surrendered to the Claimant Company
and the Rate of Corporation Tax applicable to the Relevant Accounting
Period of the Claimant Company. Any such payment shall be made on the
later of:
13.4.1 the normal due date or dates for payment of corporation tax by
the Claimant Company; and
13.4.2 seven days after a notice of claim has been submitted to the
Inland Revenue in respect of the Group Relief.
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13.5 GROUP RELIEF SURRENDERS
13.5.1 When the reduction in the liability of any Claimant Company to
corporation tax as a result of a surrender of Group Relief has
been determined (whether by agreement with the Inland Revenue
or otherwise on appeal), the Shareholders shall procure that
the Claimant Company shall promptly produce and deliver within
30 days to each of the Shareholders a certificate setting out
the extent to which such liability has been reduced, together
with copies of any correspondence with the Inland Revenue
agreeing such reduction of liability.
13.5.2 In the event that any of the Shareholders shall object to such
certificate, such Shareholder(s) may, within 14 days of the
certificate being delivered to it, require the Claimant
Company to refer the reduction in liability to be determined
by an independent firm of chartered accountants to be agreed
upon between them or, in default of such agreement, to be
selected (at the instance of any Shareholder) by the President
for the time being of the Institute of Chartered Accountants
in England and Wales. Any such firm of chartered accountants
(whose fees and expenses shall be paid by the Shareholder
objecting to the certificate if such firm of chartered
accountants does not alter the extent to which the relevant
liability is to be reduced and by the Claimant Company in any
other case) shall act as experts and not arbitrators in
connection with the giving of such decision.
13.5.3 The Shareholders shall provide, and shall procure that the
Company shall provide, within a reasonable period and in any
event within 21 days of any written request, the independent
firm of chartered accountants with such information as it may
reasonably require for the purpose of giving its
determination.
13.5.4 The certificate referred to in Clause 13.5.1 (unless any of
the Shareholders have exercised its or their rights to refer
the matter to an independent firm of chartered accountants in
accordance with Clause 13.5.2 or (if the matter is referred to
an independent firm of chartered accountants) the
determination of such firm shall, save for manifest error, be
binding on the Shareholders, the Company and the relevant
Claimant Company and Surrendering Company.
13.5.5 Within seven days of the reduction in the liability of a
Claimant Company to corporation tax as a result of a surrender
of Group Relief becoming final under Clause 13.5.4,
appropriate adjustments to the payment made under Clause 13.4
for such Group Relief shall be made.
13.5.6 The provisions of this Clause 13.5 shall prevail over the
provisions of Clause 24.2 (save as to questions of compliance
with the provisions of this Clause 13.5).
13.6 INTEREST
Payments for Group Relief and any adjustments thereto shall carry
interest at the rate of 2 per cent. per annum above the base lending
rate of Barclays Bank plc from time to time from the due date for
payment to the date on which such payment for Group Relief is actually
made or such adjustment is paid.
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13.7 COMMUNICATION WITH INLAND REVENUE
If the Inland Revenue does not accept any particular surrender of Group
Relief whether in whole or in part, then the Claimant Company may take,
and direct the Surrendering Company to take, such action as may be
reasonable with a view to establishing to the satisfaction of the
Inland Revenue that such Group Relief has been validly surrendered and
claimed. The Claimant Company will keep the parties informed as to the
content of all correspondence and discussions with the Inland Revenue
relevant to the surrender. The cost of taking any such action shall be
borne by the Claimant Company.
13.8 GROUPS OF COMPANIES
Where any Claimant Company or Surrendering Company is not a party to
this Agreement, the party which is a member of the same group of
companies as the Claimant Company or Surrendering Company shall procure
that the Claimant Company or Surrendering Company shall take all steps
contemplated by this Clause 13 as if the Claimant Company or
Surrendering Company were a party to this Agreement.
13.9 MAINTENANCE OF CONSORTIUM
Each Shareholder shall, until this Agreement is terminated, take such
steps as are reasonably available to it to ensure that the Shareholders
are and remain a consortium in relation to the Company for Group Relief
purposes, and in particular to ensure that:
13.9.1 the Shareholders and the Company are treated as resident only
in the United Kingdom for United Kingdom tax purposes and for
the purposes of any double taxation treaty;
13.9.2 no shares are transferred and no further shares issued or
allotted if as a result more than 25% of the issued ordinary
share capital (as defined in section 832 ICTA 1988) of the
Company would be held by persons not being companies resident
only in the United Kingdom;
13.9.3 all shares of the Company held by each Shareholder from time
to time will be held as beneficial owner;
13.9.4 all shares of the Company held by each Shareholder from time
to time will not be held such that a profit on a sale of such
shares would be treated as a trading receipt; and
13.9.5 no one Shareholder owns, beneficially, more than 75% or less
than 5% of the issued ordinary share capital (as defined in
Section 832 ICTA 1988) of the Company.
13.10 VALUE ADDED TAX
13.10.1 The Company shall not apply to HM Customs & Excise to be
members of a group registration for VAT purposes other than a
registration comprising only two or more of the Company and
any Subsidiary company of the Company.
13.10.2 Where any taxable supply for VAT purposes is made under or in
connection with this Agreement by one party (or by the
Company) to the other (or to the Company), the payer shall in
addition to any consideration required for that supply pay,
upon presentation of a VAT invoice, such VAT as is chargeable
in respect of it.
14. SHARE TRANSFERS
14.1 MORATORIUM
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Save as otherwise provided in Clause 14.3, no Shareholder may for a
period of three years from the date of this Agreement transfer, sell or
dispose of any Shares for the time being held by it (the "MORATORIUM
PERIOD").
14.2 RESTRICTION
14.2.1 Save as otherwise expressly provided herein or in the Articles
no Shareholder shall during the term of this Agreement make
any Disposition other than a Permitted Transfer (as
hereinafter defined). Each Shareholder shall, to the extent it
is able by virtue of its power of appointment of Directors,
procure that the Board only approves the registration of a
transfer of Shares transferred in accordance with the
Articles.
14.2.2 No transfer of Shares shall be made by a Shareholder without
that Shareholder procuring the delivery to the Company of an
executed Deed of Adherence in or substantially in the same
form as Schedule 3.
14.3 PERMITTED TRANSFERS
14.3.1 Any Shareholder may at any time transfer all (but not some
only) of its Shares (a "Permitted Transfer") to an Associate
in accordance with, and subject to the provisions of, the
Articles PROVIDED THAT the transferee (the "Permitted
Transferee") shall execute and deliver to the Company a Deed
of Adherence in or substantially in the form of Schedule 3.
14.3.2 Any Shareholder transferring Shares in accordance with this
Clause 14.3 (which expression shall not include a second or
subsequent transferor in a series of Permitted Transfers)
shall be jointly and severally liable with the transferee for
the obligations of this Agreement as a Shareholder in respect
of each Share transferred.
14.4 SALE TO THIRD PARTIES
14.4.1 After the expiry of the Moratorium Period a Shareholder may,
subject to this clause, sell all (but not some only) of its
Shares to a third party or parties. In the event that a
Shareholder (the "Vendor") desires to sell all of its Shares
in accordance with this clause (the "Offered Shares"), the
Vendor agrees to first give written notice (the "Offer
Notice") to the other Shareholder (the "Purchaser") of its
intention to sell the Offered Shares and to negotiate with the
Purchaser in good faith the price and corresponding terms of
purchase for the Offered Shares. In the event that by the
forty-fifth day after the date of the Offer Notice (the "Third
Party Date") the Vendor does not accept the Purchaser's final
proposed price and corresponding terms (the "Final Offer"),
the Vendor shall notify the Purchaser in writing that the
Purchaser's final price and terms have been rejected.
14.4.2 In the event the Purchaser's Final Offer is not accepted, the
Vendor may sell the Offered Shares to a third party or
parties; provided, however, that any sale to a third party of
the Offered Shares must be evidenced by a letter of intent
which must be signed within six months of the Third Party Date
and the contemplated transaction must be completed within one
year of the Third Party Date. The sale of the Offered Shares
to a third party or parties shall be for a price not less than
95% of the Final Offer.
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14.4.3 In the event of a sale of Shares to a third party in
accordance with Clause 14.4.2;
(a) the Board shall be reconstituted at the date of transfer
of the Shares to such party so that each Shareholder
shall be entitled to and shall appoint three Directors
(who shall, in the case of the Directors appointed by
the "A" Shareholder, be designated "A" Directors and, in
the case of the Directors appointed by the "B"
Shareholder, be designated "B" Directors) and each such
Director shall be entitled to one vote;
(b) the Shareholders shall procure that the necessary Board
and Shareholders resolutions are passed to affect the
reconstitution of the Board and/or amendments required
to reflect such constitution in the Articles including
an amendment to the Articles to provide that all
resolutions of the Board be passed by a two-thirds
majority;
(c) the Vendor shall procure that the Purchaser executes a
Deed of Adherence on or prior to the date of transfer of
the Shares; and
(d) the provisions of Clause 14.5 shall become effective.
14.5 DEADLOCK RESOLUTION
14.5.1 In the event of a Deadlock, either Shareholder shall be
entitled to serve upon the other notice of such Deadlock (a
"DEADLOCK NOTICE") and the provisions of Clause 15.2 shall
apply save that "Fundamental Disagreement" shall be read as
"Deadlock".
14.5.2 A "Deadlock" shall be deemed to have occurred if, after the
expiry of the Moratorium Period:
(a) any Shareholder has failed to give his consent or is
deemed to have refused his consent within ten Business
Days to any major action in accordance with Clause 7.5;
or
(b) (1) a matter relating to or affecting the Company has
been raised at and/or considered by a Board
Meeting; and
(2) no resolution has been passed by such meeting by
reason of an equality of votes for and against any
resolution proposed relating to such matter; and
(3) a Shareholder has subsequently failed to notify
the other Shareholders within 28 days after such
Board Meeting that the matter has not been
resolved to its satisfaction.
15. RESOLUTION
15.1 FUNDAMENTAL DISAGREEMENT
A "Fundamental Disagreement" shall be deemed to have occurred if ▇▇▇▇
and WTT are unable to agree on any of the matters described in Clauses
7.5 and 9.2 (which in the case of Clause 7.5 shall include any deemed
refusal of consent in terms of that Clause) and one of them serves
notice on the other stating that it believes there exists a Fundamental
Disagreement (a "Fundamental Disagreement Notice") PROVIDED THAT for
the purpose of this Clause 15, no Fundamental Disagreement shall arise
or be deemed to arise before the expiry of the Moratorium Period.
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15.2 PROCEDURE FOLLOWING FUNDAMENTAL DISAGREEMENT
15.2.1 In the event of Fundamental Disagreement, the Shareholders
shall refer the matter for consideration to such persons as
they consider appropriate (such individuals together the
"Representatives") for discussion between them. Each party to
the Agreement shall procure that the Representatives use all
reasonable endeavours to resolve any differences between the
Shareholders which led to the Fundamental Disagreement. Unless
otherwise agreed, the matter shall be so referred within seven
days of the service of a Fundamental Disagreement Notice.
15.2.2 Unless otherwise agreed between the Shareholders, if within
ten days (or such longer period as the parties may agree) of
reference to the Representatives as above they are not able,
or agree not to be so able, to resolve the relevant
differences either Representatives may on behalf of the party
it represents serve a notice (the "Termination Notice") on the
other (the "Recipient").
15.2.3 In the event that a Termination Notice is served by one
Shareholder on the other in accordance with Clause 15.2.2, the
terms of Clause 17.1.1 (b) shall apply.
16. TERMINATION
16.1 TERMINATION GENERALLY
This Agreement shall continue in full force and effect until terminated
in accordance with the provisions of this Clause, whereupon Clause 17,
without limitation, shall apply.
16.2 BREACH BY OR WINDING UP OF HRPLC OR WTT
16.2.1 A Shareholder (the "Non-Breaching Party") may, without
prejudice to any other rights it may have in respect thereof,
elect to terminate this Agreement forthwith by notice in
writing to the other (the "Terminal Breach Notice") (but not
after 90 days of the event in question first coming to the
attention of the Non-Breaching Party) if any of the following
shall occur:
(a) if the other Shareholder (the "Breaching Party") shall
act or omit to act as described in Clause 16.2.3 and
shall fail to remedy such breach (if capable of remedy)
within 30 days after being given notice by the
Non-Breaching Party (by the first party) so to do; or
(b) if the other (being a company) shall go into liquidation
whether compulsory or voluntary (except for the purposes
of a bona fide reconstruction or amalgamation with the
consent of the first Non-Breaching Party, such consent
not to be unreasonably withheld) or if the other party
shall have an administrator appointed or if a receiver,
administrative receiver or manager shall be appointed
over any part of the assets or undertaking of the other
party.
16.2.2 If the Non-Breaching Party serves a Terminal Breach Notice on
the Breaching Party, it may further elect that the terms of
either Clause 17.1.1(a) or 17.1.1(b) shall apply and shall be
entitled to the rights to the Company's Brand Name in
accordance with Clause 17.4. In addition, where WTT is the
Non-Breaching Party it may also make the election in clause
17.1.1(c).
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16.2.3 Subject to the terms (where appropriate) of Clause 16.2.1(a),
any of the following acts or omissions will entitle the
Non-Breaching Party to serve a Terminal Breach Notice in
accordance with Clause 16.2.1:
(a) failure to seek Shareholder consent prior to undertaking
a major action in accordance with Clause 7.5;
(b) failure to provide funding in accordance with the
capital funding requirements in Clause 8.1;
(c) competing with the Company in contravention of Clause
10.1;
(d) attempting to transfer Shares in contravention of Clause
14;
(e) failure to exercise voting rights so as to procure the
obligations under this Agreement and the Articles are
duly observed in accordance with Clause 19.3;
(f) an intentional act or intentional omission to act to
prevent the operation of the Company in accordance with
the Business Plan;
(g) failure by a Shareholder to procure that at least one of
its Directors or alternates is in attendance at two
consecutive Board Meetings (including any adjournment of
such meeting);
(h) failure by a Shareholder to attend two consecutive
Shareholders Meetings (including any adjournment of such
meeting);
(i) commission of a material breach, and failure to remedy
such breach (if capable of remedy) within 30 days after
being given notice by the Non-Breaching Party, of any of
the Completion Agreements (excluding the Shared Services
Agreement between the Company and HRPLC); or
(j) default by HRPLC or WT Technologies under the terms of
the HRPLC Loan Note or the WTT Loan Note respectively.
16.3 CHANGE OF CONTROL OF ▇▇▇▇, HRPLC OR WTT
16.3.1 In the event of:
(a) a Change of Control of HRPLC which results in the
resignation or removal (other than by reason of
retirement, illness, disqualification or mental
incapacity) of a majority of the Directors appointed by
▇▇▇▇ to the Board of the Company within six months of
such Change of Control; or
(b) failure by the acquirer of Control of ▇▇▇▇ to agree in
writing to endorse and adhere to the then current
Business Plan within 30 days of such Change of Control,
WTT may elect (within a period of six months of the events
specified in Clause 16.3.1(a)) to take over the management and
operational control of the Company in which event the
Shareholders shall procure that ▇▇▇▇'▇ "A" Ordinary Shares are
reclassified as "B" Ordinary Shares, that WTT's "B" Ordinary
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Shares be reclassified as "A" Ordinary Shares and that one of
the Directors appointed by ▇▇▇▇ be removed from the Board.
HRPLC undertakes to notify WTT promptly (and in any event
within seven days) of a Change of Control affecting it.
16.3.2 In the event that WTT exercises its option in accordance with
Clause 16.3.1 in the Moratorium Period, ▇▇▇▇ shall have the
option (to be exercised within six months of the exercise of
WTT's option) to sell its Shares to any third party, subject
however to the provisions of Clause 14.4. The restrictions
contained in Clauses 14.1 and 14.3 with regard to the
Moratorium Period shall not apply to the exercise by ▇▇▇▇ of
its option under this Clause.
16.3.3 In the event of a Change of Control of a Shareholder (other
than for the purposes of amalgamation, merger, consolidation,
reorganisation or other similar arrangement between members of
the HRPLC Group or WTT and its Associate, as the case may be),
the other Shareholder may elect by giving written notice
("Change of Control Notice") whereupon Clauses 17.2.2 to
17.2.6 and 17.6 shall apply, within six months from such
Change of Control, to buy all of the Shares of the other
Shareholder at a purchase price equal to 50% of the Fair Value
of the Company (taking into account, only in the case of a
change of control of ▇▇▇▇, the fact that the Company will have
a non-exclusive licence of the Licensed Products).
16.3.4 Upon WTT giving the Change of Control Notice but prior to the
completion of the sale and purchase, in accordance with Clause
16.3.3, the Shareholders shall procure that ▇▇▇▇'▇ "A"
Ordinary Shares are reclassified as "B" Ordinary Shares, that
WTT's "B" Ordinary Shares be reclassified as "A" Ordinary
Shares and that one of the Directors appointed by ▇▇▇▇ be
removed from the Board. ▇▇▇▇ undertakes to notify WTT promptly
(and in any event within seven days) of a Change of Control
affecting it. In the event that WTT does not purchase ▇▇▇▇'▇
Shares in accordance with Clause 17.6.1 having given a Change
of Control Notice, the Shareholders shall procure that
respective positions of WTT and ▇▇▇▇'▇ shall be re-instated as
if a Change of Control Notice had not been given.
16.3.5 In the event that WTT gives a Change of Control Notice to
▇▇▇▇, the WTT Licence shall terminate and WTT shall offer ▇▇▇▇
a non-exclusive licence of the Licensed Products for the fair
market value of such licence on terms and conditions contained
in the Licence Software Licence Agreement between the Company
and HRPLC.
16.4 FAILURE TO MEET SALES TARGETS
16.4.1 The Shareholders acknowledge and agree that the Company's
primary objectives include providing services to third party
travel agencies, as well as to the ▇▇▇▇ Group and BTI Group,
in Europe.
16.4.2 Subject to Clause 16.4.9, on 31 October 2002, the Company
shall deliver to WT Technologies a 12 month rolling forward
projection of each of its OFS Corporate Products and Services,
OFS Products and Services and TTG Product and Services, based
upon the preceding six months historical data together with
details of any new signed or lost accounts (eg accounts which
have not been trading for the full six month period). The
targeted values in respect of the foregoing projections shall
be as described in Schedule 4 (the "OFS Corporate Services
Target", "OFS Services Target" and the "TTG Target"
respectively and each a "Target").
16.4.3 Subject to Clause 16.4.9, in the event that any of the
information set out in Clause 16.4.2 in respect of a Target
has not been delivered to WT Technologies by 30 November 2002,
WT Technologies shall have the right to conclude that the
Company has failed to meet the relevant Targets.
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16.4.4 Subject to Clause 16.4.9, in the event the Company has failed
or is deemed to have failed to meet the OFS Services Target by
30 November 2002 WT Technologies may elect, by written notice
to the Company to be delivered within six months of such
failure or deemed failure by the Company under Clause 16.4.3,
to:
(a) terminate any exclusive technology licenses in respect
of the OFS Products which have been granted to the
Company and grant a non-exclusive licence in respect of
the OFS Products to the Company on substantially the
same terms as the WTT Licence and compete with the
Company and the HRPLC Group; or
(b) waive the Company's failure to meet the Target.
16.4.5 Subject to Clause 16.4.9, in the event the Company has failed
or is deemed to have failed to reach the OFS Services Target
by 30 November 2002, Clause 10.1 shall be waived to the extent
that it applies to WT Technologies and its Associates and WT
Technologies and its Associates shall be entitled to compete
with the Company in the OFS Territory in respect of the OFS
Services. If WT Technologies elects to compete with the
Company and begins to market the OFS Products and Services in
competition with the Company in the Territory (in such a
manner as would otherwise be a breach of Clause 10):
(a) this Agreement shall be amended so that the consent of
WTT to any major action in terms of Clause 7.5 shall not
be required by any Group Company; and
(b) HRPLC (or such member of the HRPLC Group as HRPLC in
writing directs) may, within six months of delivery of a
notice pursuant to Clause 16.4.6, elect by written
notice (which notice shall be deemed to be a Change of
Control Notice) to buy all of WTT's Shares at a purchase
price equal 50% of the Fair Value of the Company (taking
into account the fact that the Company will have a
non-exclusive licence to the relevant products).
16.4.6 WT Technologies shall give the Company 30 days' notice of its
intention to compete with the Company prior to competing with
the Company in terms of Clause 16.4.5.
16.4.7 Subject to Clause 16.4.9, in the event the Company fails or is
deemed to have failed to meet the TTG Target by 30 November
2002, WT Technologies may, by written notice to be delivered
within six months of such failure or deemed failure, terminate
any exclusive licenses in respect of the TTG Products which
have been granted to the Company and grant a non-exclusive
licence in respect of the TTG Products to the Company and it
may grant non-exclusive licenses in respect of the TTG
Products to third parties provided that WT Technologies shall
not enter into any corporate equity joint venture arrangements
with third parties in competition with the Business which
would otherwise be a contravention of Clause 10.
16.4.8 If, subject to clause 16.4.9, the Company fails or is deemed
to have failed to meet the TTG Target by 30 November 2002 and
the Company has failed or is deemed to have failed to meet the
OFS Corporate Services Target by 30 November 2002, WT
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Technologies may, by written notice to be delivered within six
months of such failure or deemed failure, terminate any
exclusive licenses in respect of OFS Corporate Products which
have been granted to the Company and grant a non-exclusive
licence in respect of the OFS Corporate Products to the
Company and it may grant non-exclusive licenses in respect of
OFS Corporate Products to third parties provided that WT
Technologies shall not enter into any corporate equity joint
venture arrangement with third parties in competition with the
Business which would otherwise be a contravention to clause
10.
16.4.9 The Company shall notify WTT in writing if it reasonably
believes that it is unlikely to meet a Target as a result of a
failure by WT Technologies or TLC to meet its obligations to
the Company to deliver a technology product specified in
Schedule A of the WTT Licence the use of which has a direct
impact on the ability of the Company to meet such Target and
the parties shall negotiate in good faith a modification of
the date for satisfaction of the relevant Target to take
account of such delay.
16.4.10 WTT will act reasonably in determining whether a relevant
Target has been met, or that the date for satisfaction of such
Target be extended, take into account the economic conditions
affecting the Company, the Company's competitive environment,
staffing requirements and timely delivery of technology
products by WT Technologies.
16.5 CEASING TO BE A PARTY
The benefit of this Agreement shall cease to accrue to a party if, at
any time as a result of a transfer of shares made in accordance with
this Agreement and/or the Articles, that party holds no Shares (but
without prejudice to any rights which any party may have against any
other party arising prior to such termination).
16.6 WINDING UP
Save to the extent provided to the contrary, this Agreement shall
terminate forthwith if an effective resolution is passed to wind up the
Company or if (except for the purposes of a bona fide reconstruction or
amalgamation) a liquidator, receiver, administrative receiver or
manager is otherwise appointed (but without prejudice to any rights any
party may have against any other arising prior to such termination).
17. CONSEQUENCES OF NOTICE UNDER CLAUSES 15.2 AND 16.2
17.1 SALE AND PURCHASE
17.1.1 Subject to Clauses 15.2 and 16.2, if the Non-Breaching Party
shall serve a notice under Clause 15.2.2 or 16.2 that party
(the "terminator") shall require:
(a) the Breaching Party to sell to it all (but not some
only) of the Breaching Party's Shares in the Company at
the price determined in accordance with sub-clause 17.2;
or
(b) the assets and liabilities of the Company to be divided
between the parties in the manner described in Clause
17.3; or
(c) where ▇▇▇▇ is the Breaching Party, WTT may take over the
management and operational control of the Company in
which event that Shareholders shall procure that ▇▇▇▇'▇
"A" Ordinary Shares are reclassified as "B" Ordinary
Shares, that WTT's "B" Ordinary Shares are reclassified
as "A" Ordinary Shares and that one of the Directors
appointed by ▇▇▇▇ be removed from the Board.
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17.2 PRICE
17.2.1 The purchase price of the shares to be bought and sold
pursuant to Sub-Clause 17.1 shall be a sum equal to 50 per
cent. of the Fair Value of the Company less a discount of ten
per cent.
17.2.2 "Fair Value" shall be determined by the Auditors on the
following principles:
(a) the Auditors shall be considered to be acting as experts
and not as arbitrators; and
(b) the Auditors shall value the relevant Shares using the
following principles:
(1) valuing the relevant Shares as on an arm's length
sale between a willing vendor and a willing
purchaser;
(2) if the Company is then carrying on business as a
going concern, on the assumption that it will
continue to do so;
(3) the relevant Shares are capable of being
transferred without restriction;
(4) each Share whatever its class has the same value
corresponding to its proportion of the value of
all the Shares taken as a whole;
(5) no reduced or additional value is attached to any
holding of Shares by virtue only of the transferor
not having the right to appoint a majority of
Directors to the board or the number of votes
which may be cast at a Board Meeting by a
Director;
(6) the application in all other respects of
principles and practices consistent with those
customarily applied in the previous audited
accounts of the Company.
(c) the Auditors shall deduct from the fair value of the
Company the Sterling equivalent of any sum paid in terms
of Clause 12.5(a) of the US Operating Agreement.
17.2.3 The Shareholders shall procure that the Auditors prepare and
deliver to the Shareholders, within 45 days of the date of the
Termination Notice or Change of Control Notice, a report (the
"Report") setting out the details of their determination
pursuant to Clause 17.2.2 (the "Fair Value Determination").
17.2.4 Unless a Shareholder shall, within 15 days of receipt of such
Report, serve a notice ("Objection Notice") in writing on the
other that it objects to the Fair Value Determination
(identifying the reason for any objection and the amount or
item or all calculation which is/are in dispute), the parties
shall be deemed to have agreed to the Fair Value
Determination.
17.2.5 If, within the period referred to in 17.2.4, a party shall
give to the other an Objection Notice then the parties shall
use their respective best endeavours to reach agreement on
adjustments to the Fair Value Determination as applicable.
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17.2.6 If the parties are unable to reach agreement in respect of the
Fair Value Determination, within thirty days of the date of
the Objection Notice, the Fair Value will be determined by two
appraisers, one chosen by each Shareholder, in accordance with
the assumptions described in Clause 17.2.2. If the two
appraisal values (the "Fair Value Appraisal") differ by 10% or
less (such percentage difference to be computed by subtracting
the lesser of the Fair Value Appraisals from the greater of
the Fair Value Appraisals and dividing that difference by the
greater of the Fair Value Appraisals), then the Fair Value of
the Shares shall equal the average of the two Fair Value
Appraisals. In the event that the Fair Value Appraisals vary
by more than 10%, a third appraiser shall be chosen by the
initial two appraisers to conduct an independent appraisal of
the Shares, and on the basis of that independent appraisal,
the third appraiser shall, in the exercise of his own
professional judgment, determine which of the two Fair Value
Appraisals is the most commercially reasonably, and that Fair
Value Appraisal shall be the Fair Value.
17.3 DIVISION OF ASSETS AND LIABILITIES
17.3.1 The Company shall, as soon as practicable, and in any event
within 15 days after receipt of a copy of a Termination Notice
containing the election in Clause 17.1.1(b) procure that the
Auditors prepare a financial statement (the "Financial
Statement") for the Company as at the date of the Termination
Notice within 45 days of receipt of the Termination Notice.
The Financial Statement shall contain such information as is
reasonably required for the parties to identify all of the
assets and liabilities of the Company.
17.3.2 The Financial Statement shall be delivered to both
Shareholders and unless either party shall, within 15 days of
receipt of such Financial Statement, serve a notice
("Objection Notice") in writing on the other that it objects
to the Financial Statement (identifying the reason for any
objection and the amount or item or all calculation which
is/are in dispute), the parties shall be deemed to have agreed
to the Financial Statement.
17.3.3 If, within the period referred to in Clause 17.3.2, either
Shareholder shall give to the other an Objection Notice then
the parties shall use their respective best endeavours to
reach agreement on adjustments to the Financial Statement as
applicable.
17.3.4 The parties shall thereafter enter into good faith
negotiations for the division of the assets and liabilities of
the Company.
17.3.5 If the Shareholders are unable to reach agreement in respect
of the terms for division of the assets and liabilities of the
Company the Shareholders shall negotiate in good faith for a
further period of 90 days for the sale of the Company to a
third party.
17.3.6 If, after the expiry of the 90 days referred to in Clause
17.3.5, the Shareholders have not agreed on the terms of the
sale of the Company to a third party, the Shareholders shall
procure that the Company be wound up.
17.4 COMPANY BRAND NAME
17.4.1 Where termination is pursuant to Clause 16.2.1, the
Non-Breaching Party shall;or
17.4.2 upon WTT ceasing to be a Shareholder pursuant to Clause
16.4.5(b), WTT shall
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in addition to any other rights it may have, also be entitled to all
rights in respect of the corporate name of the Company PROVIDED THAT
where the corporate name of the Company (or any part) contains any word
or words the same or similar to the corporate name or any distinctive
part of the corporate name or ▇▇▇▇ of such Shareholder or an Associate
of the Shareholder including, in the case of WTT, TRX Inc.(or any
person controlling such Shareholder) the remaining party shall procure
that within 30 days thereof the corporate name and/or ▇▇▇▇ of the
Company shall be changed so as to exclude such word or words or name or
▇▇▇▇.
17.5 LICENCE
Upon the division of the assets of the Company in accordance with
Clause 17.3 the WTT Licence shall terminate and WTT shall offer ▇▇▇▇ a
non-exclusive licence in respect of use of the TTG Products and OFS
Corporate Products in the Territory and the OFS Products in the OFS
Territory on terms substantially the same as the Software Licence
Agreement between the Company and HRPLC.
17.6 COMPLETION
17.6.1 Completion of the sale and purchase of Shares pursuant to the
provisions of Clauses 16.3.3 or 17.1.1(a) shall take place at
the registered office of the Company on (i) the date specified
in those Clauses, where applicable, or (ii) on the second
Business Day after the price payable therefor has been agreed
or determined in accordance with the provisions thereof, or
(iii) such other time and/or place as the affected parties may
agree.
17.6.2 At any completion of the sale and purchase of Shares pursuant
to Clauses 16.3.3 or 17.1.1(a), the relevant seller shall
deliver to the purchaser duly executed share transfers for the
Shares being sold in favour of the purchaser (or as it may
direct) together with the relevant share certificate(s)
therefor (or an acceptable indemnity in lieu thereof) in
return for cleared funds representing the sum due.
17.7 RELEASE OF GUARANTEES/INDEMNITIES
If either party (the "Defaulting Party") shall become bound to transfer
all its Shares, the other party shall upon, or immediately prior to
completion of such transfer, procure:
17.7.1 the immediate release of all guarantees, indemnities and
similar covenants (if any) given by the defaulting party in
favour (or for the benefit) of the Company and pending such
release shall indemnify and keep the defaulting party fully
and effectively indemnified from and against all claims
arising thereunder except where the breach relates to such
guarantee indemnity or covenant); and
17.7.2 the immediate repayment to the defaulting party of all monies
advanced to the Company by that outgoing party by way of loan
(or loan stock) and then outstanding (if any) together with
all interest (if any) down to the date of actual payment; and
17.7.3 Nothing in this Clause 17.7 shall apply to a transfer of
Shares in accordance with Clause 14.3 or affect the liability
of any person to whom this Clause applies in respect of any
liabilities incurred prior to the transfer of its Shares under
Clause 17.1.1(a).
18. GUARANTEES
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18.1 HRPLC, in consideration of WTT and WT Technologies entering into this
Agreement, undertakes with WTT and WT Technologies that ▇▇▇▇ will
perform its obligations under this Agreement and shall indemnify WTT
and WT Technologies against all losses, liabilities and costs which WTT
or WT Technologies may incur as a result of any breach of ▇▇▇▇'▇
obligations under this Agreement .
18.2 WT Technologies, in consideration of HRPLC and ▇▇▇▇ entering into this
Agreement, undertakes with ▇▇▇▇ and HRPLC that WTT will perform its
obligations under this Agreement and shall indemnify ▇▇▇▇ and HRPLC
against all losses, liabilities and costs which WTT or WT Technologies
may incur as a result of any breach of WTT's obligations under this
Agreement.
18.3 The following provisions shall apply to the undertakings in Clauses
18.1 and 18.2:
18.3.1 the undertakings shall be continuing obligations and shall
remain in full force and effect until the discharge in full of
the obligations of ▇▇▇▇ or WTT (as the case may be) under this
Agreement and shall not be satisfied by any intermediate
satisfaction of the whole or any part of those obligations;
18.3.2 the liability of HRPLC or WT Technologies (as the case may be)
shall not be affected or released by any neglect or
forbearance in enforcing the obligations of ▇▇▇▇ or WTT (as
the case may be) or by any amendment or variation of their
obligations or by any other act, omission, matter or thing
whatsoever whereby HRPLC or WT Technologies as a surety only
would or might have been affected or released;
18.3.3 although as between HRPLC and ▇▇▇▇, HRPLC is a surety for
▇▇▇▇, HRPLC shall for all purposes under this Clause 18 be
treated as a principal obligor rather than as a surety; and
18.3.4 although as between the WT Technologies and WTT, WT
Technologies is a surety for WTT, WT Technologies shall for
all purposes under this Clause 18 be treated as a principal
obligor rather than as a surety.
19. SUPREMACY AND GENERAL COVENANT
19.1 AGREEMENT TO PREVAIL
If any provisions of the Memorandum or Articles conflict with any of
the provisions of this Agreement the provisions of this Agreement shall
prevail. To the extent permitted by law, ▇▇▇▇ and WTT shall each
exercise all Voting Rights and other rights and powers available to
them to procure the alteration of the Memorandum or Articles to the
extent necessary to permit the Company and its affairs to be carried
out as provided herein. For the avoidance of doubt, the Memorandum and
Articles do not conflict and are not to be treated as conflicting with
any provision of this Agreement by which the parties agree to procure
that anything be or not be done.
19.2 LEGEND ON SHARES
19.2.1 The Shareholders shall procure that all certificates
representing Shares shall bear the following restrictive
legend:
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THE SHARES REPRESENTED BY THIS CERTIFICATE ARE HELD SUBJECT
TO, AND TRANSFER OR PLEDGE OF SUCH SHARES IS RESTRICTED BY,
THE TERMS OF AN AGREEMENT, DATED ________, 2000, A COPY OF
WHICH IS ON FILE AT THE REGISTERED OFFICE OF THE COMPANY. NO
TRANSFER OR PLEDGE OF ANY SHARE REPRESENTED BY THIS
CERTIFICATE SHALL BE VALID UNLESS MADE IN ACCORDANCE WITH THE
TERMS OF THE AGREEMENT.
19.2.2 The Secretary shall endorse each certificate with any
additional legend (or legends) as he or she shall deem
necessary, upon the opinion of counsel to the Company, to
comply with any applicable laws and regulations. In the event
that any additional legend (or legends) are required, each
Shareholder shall surrender to the Company all of its
certificates representing shares of the Company. After such
endorsement, each of the certificates so surrendered shall be
returned to the Shareholder owning such certificate.
Thereafter, all certificates representing shares of the
Company shall bear an identical endorsement. A copy of this
Agreement shall be filed with the Secretary of the Company.
19.3 FURTHER ASSURANCE
To the extent permitted by law, the Shareholders shall each exercise
all Voting Rights and other powers of control available to them in
relation to the Company so as to procure (so far as each is
respectively able by the exercise of such rights and powers) that the
obligations under this Agreement and the Articles are duly observed and
given full force and effect and all actions required of the parties
hereunder are carried out and in a timely manner. Without limitation
▇▇▇▇ and WTT shall each use their best endeavours to procure that each
of the Directors appointed by them shall execute and do all such acts
and things and give and confer all such powers and authorities as they
would have been required to execute, do, give and/or confer had they
been a party to this Agreement.
19.4 QUORA OF MEETINGS
To the extent permitted by law, each of ▇▇▇▇ and WTT shall exercise all
Voting Rights and other powers of control available to them to ensure
that any Board Meeting or Shareholder meeting has the necessary quorum
throughout.
20. ANNOUNCEMENTS
20.1 RESTRICTIONS
No party to this Agreement shall make any announcement concerning the
provisions or subject matter of this Agreement or containing any
information about the other without the prior written consent of the
other parties (which shall not be unreasonably withheld or delayed).
20.2 PERMITTED ANNOUNCEMENTS
Clause 20.1 shall not apply if and to the extent that such announcement
is required by law or by any securities exchange or regulatory or
governmental body having jurisdiction over it and whether or not the
requirement has the force of law but any such announcement shall be
made only after consultation with the other parties hereto.
20.3 CONTINUANCE OF RESTRICTIONS
The restrictions contained in this Clause 20 shall survive Completion
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and shall continue throughout the term of this Agreement and for the
period ending on the third anniversary of its termination or, if
earlier, in respect of any party, the period ending on the third
anniversary of it ceasing to be a party.
21. REMEDIES
The parties agree that damages would not be an adequate remedy for a
breach of this Agreement and that each party is entitled to the
remedies of injunction, specific performance and any other equitable
relief in respect of any threatened or actual breach of this Agreement.
22. WARRANTY AND INDEMNITY
22.1 WTT warrants at the date of this Agreement that the aggregate worldwide
turnover of all economic interests over which Mr ▇. ▇. Fentener van
Vlissingen exercises decisive influence including, for the avoidance of
doubt, the BCD Group for the purposes of Council Regulation (EEC) No.
4064/89, as amended and taking into account the regulations and notices
of the Commission of the European Communities on Council Regulation
(EEC) No. 4064/89 (together the "EC Merger Regulation"), and calculated
in accordance with the EC Merger Regulation does not exceed
(pound)1,000,000,000 for the year ending 31 December 1998.
22.2 In the event of a breach of Clause 22.1 by WTT, to the extent permitted
by applicable law, WTT agrees to indemnify ▇▇▇▇ and its Associates for
the total amount of any fine, penalty payment or other sum levied by
the Commission of the European Communities on ▇▇▇▇ and its Associates
as a result of a failure to notify this Agreement and all related
agreements to the Commission of the European Communities in accordance
with the EC Merger Regulation including, without limitation, all
reasonable costs and expenses incurred by it.
22.3 ▇▇▇▇ warrants at the date of this Agreement that the worldwide turnover
of the HRPLC Group for the purpose of the EC Merger Regulation and
calculated in accordance with the EC Merger Regulation does not exceed
(pound)1,000,000,000 for the year ending 31 March 1999.
22.4 In the event of a breach of Clause 22.4 by ▇▇▇▇, to the extent
permitted by applicable law, ▇▇▇▇ agrees to indemnify WTT and its
Associates for the total amount of any fine, penalty payment or other
sum levied by the Commission of the European Communities on WTT and its
Associates as a result of a failure to notify this Agreement and all
related agreements to the Commission of the European Communities in
accordance with the EC Merger Regulation including, without limitation,
all reasonable costs and expenses incurred by it.
22.5 If circumstances arise under which any Shareholder determine that a
notification is advisable under any applicable competition laws or
regulations to the relevant competition authority, both parties shall
cooperate in the preparation, drafting and submission of said
notification and in the timely response to all enquiries from the
relevant competition authority and shall provide all information
necessary for the preparation of such a notification.
23. PROVISIONS RELATING TO THIS AGREEMENT
23.1 ENUREMENT
This Agreement shall be binding upon and enure for the benefit of (i) a
Permitted Transferee and (ii) any other successors of the parties
hereto upon execution of a Deed of Adherence in the form attached in
Schedule 3 hereto.
23.2 ASSIGNMENT
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This Agreement shall not be assignable without the prior written
agreement of ▇▇▇▇ and WTT.
23.3 WHOLE AGREEMENT AND VARIATIONS
23.3.1 This Agreement, together with any documents referred to in it,
constitutes the whole agreement between the parties relating
to its subject matter and supersedes and extinguishes any
prior drafts, agreements and undertakings, whether in writing
or oral, relating to such subject matter except to the extent
the same are repeated in this Agreement.
23.3.2 Each of the parties acknowledges that it has not been induced
to enter into this Agreement by any representation, statement,
warranty, promise or assurance by the other (or any other
person).
23.3.3 No variation of this Agreement shall be effective unless made
in writing and signed by each of the relevant parties directly
affected by the relevant provision of this Agreement.
23.4 RIGHTS AND OTHER MATTERS
23.4.1 The rights, powers, privileges and remedies provided in this
Agreement are cumulative and are not exclusive of any rights,
powers, privileges or remedies provided by law or otherwise.
23.4.2 No failure to exercise nor any delay in exercising any right,
power, privilege or remedy under this Agreement shall in any
way impair or affect the exercise thereof or operate as a
waiver thereof in whole or in part.
23.4.3 No single or partial exercise of any right, power, privilege
or remedy under this Agreement shall prevent any further or
other exercise thereof or the exercise of any other right,
power, privilege or remedy.
23.5 INVALIDITY
If any provision or term of this Agreement is held or rendered illegal,
invalid or unenforceable under any applicable law, such provision or
term shall, insofar as it is severable from the remaining provisions or
terms, be deemed omitted from this Agreement and shall not adversely
affect the remaining provisions or terms. Any such illegal, invalid or
unenforceable provision or term shall be considered not severable if
and to the extent that its omission from this Agreement would or may
materially alter or affect the commercial intent or effect of this
Agreement. In such event, the parties shall use their best endeavours
to replace any such illegal, invalid or unenforceable provision or term
with valid provisions and terms which most closely reflect their
commercial intent and effect. For the avoidance of doubt, if and to the
extent required by law, the parties' performance of the obligations
under this Agreement which have been held or rendered illegal, invalid
or unenforceable shall be deemed suspended pending such modification or
termination (as appropriate) of this Agreement in accordance with this
Clause 23.5.
23.6 COUNTERPARTS
This Agreement may be executed in any number of counterparts which
shall together constitute one Agreement. Any party may enter into this
Agreement by signing any such counterpart.
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23.7 COSTS
Except as otherwise expressly provided herein each party shall bear its
own costs and expenses arising out of or in connection with the
preparation, negotiation and implementation of this Agreement.
23.8 NOTICES
23.8.1 Any notice or other communication required to be given under
this Agreement or in connection with the matters contemplated
by it shall, except where otherwise specifically provided, be
in writing in the English language and shall be addressed as
provided in this Clause and may be:
(a) personally delivered, in which case it shall be deemed
to have been given upon delivery at the relevant
address; or
(b) if within the United Kingdom, sent by first class
pre-paid post, in which case it shall be deemed to have
been given two Business Days after the date of posting;
or
(c) if from or to any place outside the United Kingdom, sent
by pre-paid priority airmail, in which case it shall be
deemed to have been given six Business Days after the
date of posting; or
(d) sent by fax, in which case it shall be deemed to have
been given when confirmation of its transmission has
been recorded by the sender's fax machine provided that
any notice dispatched by fax after 17.00 hours (at the
place where such fax is to be received) on any day shall
be deemed to have been received at 08.00 a.m. on the
next Business Day.
23.8.2 The addresses and other details of the parties referred to in
this Clause are, subject to notification of change, as below:
Name: ▇▇▇▇ /HRPLC
For the attention of: The Company Secretary
Address: Abbey House
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Fax number: 01252 542 444
Name: WTT/WT Technologies
For the attention of: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Address: Suite 635
6 W. Druid Hills Drive
Atlanta ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
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Fax number: 001 404 814 2967
With copies to:
For the attention of: the President
WT Technologies
Address: Suite 635
6W Druid Hills Drive
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
Fax Number: 001 404 814 2967
and:
For the attention of: ▇▇▇▇ ▇▇▇▇▇▇
Long ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
Fax Number: 001 404 527 5198
Name: Fortdove Limited
For the attention of: The Managing Director
Address: Abbey House
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Fax number: 01252 542444
23.8.3 Any party to this Agreement shall use reasonable endeavours to
notify the others of any change to its address or other
details specified in Clause 23.8.2 as soon as possible prior
to such change and, if after, immediately thereafter, provided
that such notification shall only be effective on the date
specified in such notice or five business days after the
notice is given, whichever is later.
23.9 NOT A PARTNERSHIP/AGENCY
Nothing in this Agreement shall, nor shall it be deemed to, constitute
a partnership between the parties, or any of them. Nothing in this
Agreement shall authorise any party to act as agent or representative
of the others (or any of them) or to authorise any such party to assume
or create an obligation on behalf of the other (or others), except as
expressly provided in this Agreement.
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24. LAW AND SETTLEMENT OF DISPUTES
24.1 ENGLISH LAW
This Agreement shall be governed by, and construed in accordance with,
English law and the parties hereby submit to the exclusive jurisdiction
of the English courts.
24.2 SETTLEMENT OF DISPUTES
24.2.1 The parties agree to work together in good faith
constructively to resolve any disputes between them. In the
event that any dispute arises, then the parties shall continue
to meet their obligations and rights under this Agreement
during the dispute resolution process.
24.2.2 Without prejudice to Clause 24.2.1, in the event that either
Shareholder is negotiating the sale of Shares to the other (in
accordance with Clauses 14.4.1, 16.3.3, 16.4.5 or 17.7.1) or
to a third party (in accordance with Clauses 14.4.2 or 17.3.5)
both Shareholders shall procure that the Company continues to
operate the Business in its usual manner and, in the case of a
sale to a third party, to cooperate (at the selling
Shareholder's cost) with the selling Shareholder's reasonable
requests in relation to the provision of due diligence
information to such third parties.
24.3 MEETING OF REPRESENTATIVES
Except as otherwise provided in this Agreement, in the event of any
dispute between the parties arising from this Agreement, or any duty of
care arising from or connected with the subject matter of this
Agreement, the parties agree that a representative of the board of each
of the Shareholders shall meet and seek resolution of the dispute in
good faith.
24.4 RECOURSE TO COURT
Nothing in this Clause 24 shall prevent either party from having
recourse to a court of competent jurisdiction for the sole purpose of
seeking a preliminary injunction or such other provisional declaratory
relief (for the avoidance of doubt this does not include summary
judgment) as it considers necessary to avoid irreparable damage.
AS WITNESS the hands of the duly authorised representatives of the parties the
day and year first above written.
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SCHEDULE 1: BUSINESS PLAN
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The establishment and 4 year plan of travel technology and online fulfillment
services for Europe.
AUTHOR: ▇.▇▇▇▇▇▇▇
VERSION: 1.21
DATE: SUNDAY, FEBRUARY 06, 2000
1.
2.
3.
4.
TABLE OF CONTENTS
1. Executive Summary
1.1 FINANCIAL SUMMARY
2. Background
3. Products
4. Target Market
5. Market Analysis
6. Competition
7. Market Opportunity
8. Financials
8.1 - TTG BUREAU
8.2 - OFS
1. EXECUTIVE SUMMARY
As travel agencies turn their revenue stream away from commission into
one of product and service charging, the need for creating new service
entities is becoming more important.
With the predicted growth of online technology and the subsequent
changes in the existing distribution model and revenue streams, there
is a growing demand for special services as new business opportunities
in travel emerge with e-commerce.
The NewCo plan is structured to take advantage of the products,
knowledge and leading edge activities in this area within WTT and ▇▇▇▇
▇▇▇▇▇▇▇▇.
NewCo will carry its own brand image well apart from BTIUK and will
form part of the ▇▇▇▇ ▇▇▇▇▇▇▇▇ e-commerce division. All support, email,
business models etc. will be the same for both the US and European
entities.
NewCo will focus its operations on
the European travel market, including 3rd party agents and travel
portals
BTI Partners
▇▇▇▇ ▇▇▇▇▇▇▇▇ entities
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NewCo will consist of 2 departments, one dealing in Bureau software
services (hereinafter referred to as TTG) and the other dealing in
Online Fulfilment Services (OFS).
The initial focus will be on three business opportunities that exist in
Europe. These are:
i. Bureau Services
ii. Managed Travel (focusing on online fulfillment of Web enabled
Corporate Travel requirement)
iii. Unmanaged Travel (servicing travel direct Portals)
Further opportunities exist with regards to a.o. MIS, Meetings Planning
software and also establishing a full service online travel agent.
These will be addressed after Newco has started operations although the
online agent could form a key element of Newco's strategy.
As the borders breakdown within Europe and E-commerce permits Euro
E-Centres to grow, the demand for centralized fulfillment and service
models will increase. With the rationalization to the Euro and growth
of E-ticket on European and intercontinental routes, the need for a
local market corporate online service will diminish.
We are just at the start of this change and many of the services
offered by NewCo will be leading edge for the travel industry.
There are several challenges ahead in the start up of NewCo, but cost
pressures and the commoditisation of certain travel types will force
change in the market.
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1.1 FINANCIAL SUMMARY
The following outlines a summary of the financial projections for the business:
FINANCIAL YEAR PROJECTIONS
TTG SOFTWARE/ OFS COMBINED
00/01 01/02 02/03 03/04
YEAR 1 YEAR 2 YEAR 3 YEAR 4
----------------------------------------------------------------------------------
BUREAU PNRS .......... 1,417,000 3,984,500 5,216,000 6,441,000
RESASSIST PNRS ....... 52,100 220,550 482,500 988,500
OFS TICKETS .......... 72,517 533,833 1,215,000 2,078,333
INCOME CORRE
CoRRe UK .......... $ 148,750 $ 350,000 $ 370,000 $ 370,000
CoRRe SK .......... $ 81,250 $ 258,000 $ 275,000 $ 275,000
CoRRe Kuoni ....... $ 91,875 $ 306,250 $ 336,000 $ 336,000
CoRRe BTI ......... $ 58,800 $ 96,000 $ 110,400 $ 110,400
CoRRe 3rd Party ... $ 35,000 $ 175,000 $ 560,000 $ 1,050,000
INCOME RESASSIST
ResAssist HR ...... $ 50,063 $ 230,175 $ 365,625 $ 496,125
ResAssist BTI ..... $ 23,813 $ 76,875 $ 143,750 $ 170,000
ResAssist 3rd Party $ 101,625 $ 437,500 $ 1,312,500 $ 3,500,000
HIGHLIGHTER
Highliter HR ...... $ 59,500 $ 140,000 $ 148,000 $ 148,000
Highliter SK ...... $ 32,500 $ 103,200 $ 110,000 $ 110,000
Highliter BTI ..... $ 22,050 $ 36,000 $ 41,400 $ 41,400
Highliter 3rd Party $ 10,500 $ 52,500 $ 168,000 $ 315,000
OFS SALES
HR OFS Corp PNRs .. $ 182,400 $ 692,000 $ 1,828,000 $ 3,200,000
OFS Corp PNRs ..... $ 35,938 $ 382,662 $ 1,211,000 $ 3,266,667
OFS Portal ........ $ 330,050 $ 2,520,000 $ 4,500,000 $ 5,780,000
----------------------------------------------------------------------------------
TOTAL REVENUE ........ $ 1,264,113 $ 5,856,162 $11,479,675 $19,168,592
----------------------------------------------------------------------------------
TOTAL COSTS .......... $ 3,404,126 $ 4,929,213 $ 7,448,100 $10,304,578
----------------------------------------------------------------------------------
BALANCE .............. ($2,140,013) $ 926,949 $ 4,031,575 $ 8,864,013
----------------------------------------------------------------------------------
RUNNING BALANCE ...... ($2,140,013) ($1,213,064) $ 2,818,511 $11,682,525
==================================================================================
2.
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BACKGROUND
The corporate travel business is set for major change, largely driven
by
o Increasingly complex customer demands
o The need to pay by transaction differentiation
o Reduced remunerations from producers
o Rapid technology developments
These four drivers of change all create the rapid growth of
opportunities to make travel reservations without using the travel
agent (either leisure or Corporate). Both producers (airlines, hotels
etc.) and new entrants have set up Self Service Reservation (SSR)
systems on the Internet. These systems have initially targeted the
individual leisure traveler, but are today being more and more refined
for corporations and corporate travelers through growth in business to
business intranets.
In most business developed for the Internet, the traditional rules of
diminishing returns have been displaced by rules of increasing returns,
i.e. early adopters stand a good chance to become decisive market
leaders, as is the case with companies such as Microsoft, Intel and
Cisco.
The lead in these areas has definitely been taken by the USA. The
lessons learned however in the USA have caused faster uptakes and
demand in Europe as the technology being used is now more mature.
NewCo is being formed to take control of this change as it happens in
Europe.
The following chart reflects the growth of MS Expedia in the UK vs the
same start-up in the USA. Although it is consumer rather than corporate
traffic it shows the faster acceptance curve now that the technology is
becoming globally accepted.
[GRAPHIC]
Although managed corporate travel online may have had a slow growth in the USA,
if you apply the same logic as has happened to consumer acceptance in the UK
then the corporations will move at a quicker pace as well. It also suggests that
direct portal take up should be quicker.
(A)
Newco will be made up of two sales lines creating 2 departments. The rationale
for this is based upon a different sales/product approach to different market
segments.
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A. Bureau and software services will provide a wide array of travel
transaction software to corporations, industry suppliers, and travel
agencies. Major products include:
o CORRE(R): an automated quality control system
o RESASSIST(TM): an electronic booking system
o CRS SCREEN HIGHLIGHTER(R)/RESNOTEs(TM): an agent point of sale
tool.
Over the past few years, TTG in the USA has been moving towards service bureau
sales and operations and away from pure software license sales. At the present
time, TTG offers ResAssist and CoRRe combined as a service bureau.
B. OFS will operate in two different market areas within the travel
industry: Travel Portal and Corporate. From a high level perspective,
OFS will grow by offering the most cost effective operational
infrastructure. o diversify into new customer areas.
o PORTAl
The Consumer segment covers leisure-related transactions for
air, hotel, and car that are not part of formal vacation
packages. This will also enable the non-managed same market
that is going to direct to Airline travel portals to be
secured.
o CORPORATe
The corporate electronic fulfillment market consists of two
large segments: Agency Managed and Corporate Direct. Agency
managed is for an agency that holds a contract with a
Corporation and we conduct the e-fulfilment of the online
business behind the agency. Corporate Direct is targeted
directly at the corporate who wants to use the fulfillment
options independently of their agency.
As the use of online bookings grows in Corporations, agents are being tasked
with stripping cost out of the structure to provide a cheaper alternative. This
can primarily be achieved by obtaining economies of scale through combining
services, adopting and incorporating technology. Travel Agents are not
delivering the services as cheap as the corporations are looking for. As
electronic media (e-ticket, phone and web) integrate themselves into travel the
users themselves are starting to segment. If a corporation has a high volume of
point to point traffic which enables automation to drop the voice and human
booking process, then the cost of that service has got to be cheaper. This is
the segment that the airlines and new entrants are chasing.
3. Products
Newco will offer 2 product lines, Service Bureau and Online Fulfilment.
3.1 SERVICE BUREAU & SOFTWARE SERVICES
Over the past few years, TTG in the USA has been moving towards service
bureau sales and operations and away from pure software license sales. At
the present time, TTG offers ResAssist and CoRRe combined as a service
bureau. These products are aimed at the travel transaction software market
and the European variants of their US counterparts.
CoRRe - Quality Assurance
This product offering will be centered around the heart of the
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transaction process. CoRRe robotic applications and a bureau is being
established to maintain QC on bookings for ▇▇▇▇ and BTI partners in the
first stage. The bureau will be set up to sell its services to other
agencies and providers (like web engines) from day one as well.
▇▇▇▇ ▇▇▇▇▇▇▇▇ is already implementing the Quality Assurance products
(the CoRRe family of products) and significant experience in the
development of the bureau services is already in place within ▇▇▇▇
▇▇▇▇▇▇▇▇.
A repositioning and widening of a range of bureau services to European
agencies and to BTI partners outside the Americas is a logical next
step.
As cost pressure continues to increase on conventional travel agencies,
the necessity of outsourcing a range of services to reliable cost
effective outsourcers is inevitable. The demand for our bureau services
can be increased by demand form the Corporate community and also from
the halo effect created as the products and services are offered by HR
and other major agencies in response to RFP's. Major Corporations are
now very aware of the tools an agency requires to operate their
business efficiently. This will soon create a major demand on quality
applications and agencies will dispose of their own applications.
It is planned to run the bureau as a sister company of ▇▇▇▇▇▇▇▇▇ being
housed in the same building and sharing bureau operator staff during
the start-up phase.
o ResAssist
Will become the de facto online booking product of NewCo. It
will be adapted to provide automated bookings within the
European arena on Galileo and Amadeus. The Sabre variant
remains as the USA version. ResAssist will be sold as a
managed bureau service, to travel agents and corporations
direct.
o ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Will be sold alongside ResAssist for online (web) updating of
client profiles by the corporate user.
o CRS Screen Highlighter/Res Notes
Definition needed
o Technology Consulting/License Sales
Definition needed
3.2 ONLINE FULFILMENT SERVICES
3.2.1 AGENCY MANAGED AND CORPORATE DIRECT
The objective of business fulfillment is to offer wither Travel Agents
or Corporations the ability to offer or be offered a utility service
for bookings made electronically.
This service can also be combined with MIS offer for statistical
reporting. It is clear that Managed Travel will dramatically change the
Business Travel services sector although debate continues on the actual
pace of change. We are developing low, medium and high takeoff
scenarios to shape our forecasts in this arena. Partnerships are key
but note essential to optimize growth. Microsoft (AXI) and Saber (BTS)
are two targeted partners with Amadeus of significant interest because
of its initiatives with both SAP and Cap Gemini. Oracle is also a
potential partner now that it has purchased E-Travel.
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The Managed Travel Service is however based on ResAssist being
installed and used within the plane.
The service is based on electronic servicing where the cost of
producing an online reservation for the best value and service is where
business will be won. The cheapest option, without loss of service, is
the target.
3.2.2 NON-MANAGED /TRAVEL PORTAL
The European scenario is more complex to drive to ▇▇▇▇▇▇▇▇ ▇▇▇▇ for a
number of reasons, e.g. Charter airlines not included in the CRS
inventory, significant package holiday market rather than mix and
match, language variation, internet usage by country.
The TravelPortal product will be targeted at airline, hotel, car and
rail (producers) websites. The service will consist of the following:-
4. Target Market
4.1 Territory
Newco's market has ben defined in a Shareholders Agreement to be
Europe, BTI Partners and ▇▇▇▇ ▇▇▇▇▇▇▇▇ owned entities. For
Non-managed/Portal OFS business, Newco is restricted to deliver
services from UK and Nordic. The initial focus for OFS will thus be in
the UK and Nordic markets, and for TTG, Galileo and Amadeus markets.
This will give a European spread.
The only product that will require market control will be Highlighter.
Its distributed design means that local site support and installation
will be required. Therefore only a single site sale in one market could
be expensive and difficult to support.
4.2 TARGET CLIENTS FOR OFS
Target is Corporations and Travel Management Companies for managed
travel. Primary markets will be UK & Nordic for Yr1 and Yr2, with the
validity of the service to be built on HR Corporate business.
This will be GDS derived fulfillment.
The travel portal business is targeted at the airlines' and other
producers' direct sites. These portals will need to be serviced by the
specific host service. Therefore, large producer support will be
targeted for ▇▇▇▇▇▇▇▇ ▇▇▇▇ of development. As explained in market
analysis, the financial models are based on UK market % growth rather
than specific producer.
4.3 SERVICE BUREAU SOFTWARE SERVICES
CORRE(1)
Unlike OFS, the initial markets will be GDS focused with start up
volume transferring in from HR BTI UK, Nordic, France, Italy. Other BTI
partners will be added from the Germanic regions. Once this volume is
secured and performing, 3rd party activity will step up with approaches
to agencies and corporations. Both GDS of Amadeus & Galileo will be
approached for endorsement and even to form part of their own QC
program as well and then Sabre and Worldspan. This will give a broad
European coverage and extra channels to market.
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Advertisements and interviews will be made with trade and business
publications to start promoting the company's bureau services. The
objective will be to build brand neutrality as well as product
knowledge and superiority.
Work on the megas will commence on Amex through their Nordic subsidiary
Nymn & ▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ through local UK contacts.
The expected sales cycle for these accounts will be long, so a
concerted effort on smaller agencies will be made to also build a
neutral image.
CORRE (2)
This market is the QC & process engineering for the travel portals. To
support a fully automated PNR, CoRRe will be offered to portals as a
way of automating processes as it does for a normal agency operation.
RESASSIST
A similar approach will be made as for CoRRe, but the real customers
will be the corporations. The mega agencies will not approach ResAssist
due to their existing system deals (Amex & GetThere, ▇▇▇▇▇▇▇ and BTS),
but we will target the rest of the agency community, along with
Corporations direct. The bundling of an online model encapsulating QC,
booking and fulfillment will represent an attractive offer to
corporations and certain agencies.
HIGHLIGHTER
Unlike the other 2 products, Highlighter is a distributed application.
Its market is only travel agents, and English language. Within the plan
Highlighter has been given a transaction fee, however the market spread
of the product will need to be reviewed so as not to deplete support
too much.
5. Market Analysis
The travel transaction software and services business is moving towards
a service bureau offering as opposed to a straight software license
business model. Under the service bureau approach, a fee is collected
for each transaction processed by the system. A service bureau is more
desirable than standalone software sales mainly due to the ongoing
revenue stream without the latter's constant re-selling efforts.
There are four basic reasons for the move towards the service bureau.
o CORPORATIONS ARE UNBUNDLING TRADITIONAL AGENCY SERVICES,
INCLUDING TECHNOLOGY SOLUTIONS. In the past, travel agencies
have performed most technology development and transaction
processing services on an in-house basis. In turn, agencies
provided a one-stop source of technology services to corporate
customers. Now, however, corporations are beginning to
unbundle agency services in favor of the most efficient value
provider. In certain cases, they are even specifying the use
of specific technology products such as ResAssist in their
travel RFP regardless of which agency ultimately wins the bid.
o THE BUSINESS USE OF TRANSACTIONAL OUTSOURCING HAS BECOME A
RELATIVELY STANDARD PRACTICE IN MANY BUSINESSES. The agency
community has begun to recognize that their core competencies
involve customer management and relationship building as
opposed to processes involving transactional operations. As a
result, more agencies are becoming open to the idea of
outsourcing.
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o THE SERVICE BUREAU APPROACH GENERALLY INVOLVES PROCESSES THAT
DO NOT TOUCH THE CUSTOMER. Examples include quality control,
expense management, and customer fulfillment.
o THE ECONOMICS OF A SERVICE BUREAU ARE EXTREMELY COMPELLING IN
A LOW-MARGIN BUSINESS. As the full effects of the commission
caps take hold, and with further reductions in commissions and
overrides likely over the next few years, the potential cost
reduction from an efficient service bureau operation becomes
extremely attractive.
At present, most of the major software products for sale within the
industry are associated with a service bureau configuration. However,
travel specific products tend to still associate themselves with local
agency control. Therefore software components tend to be distributed rather
than in a bureau today.
As input to the business plan, we have analysed the European market GDS
PNRs and the projected development for UK airline portals.
The following figures show the available GDS PNR volume, booked by travel
agents, by market in Europe :
------------------------------------ ----------------------------------
UK 13.9M
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
IRELAND 1.2M
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
GERMANY 12.2M
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
SWITZERLAND 2.1M
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
AUSTRIA 1.2M
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
FRANCE 9.5M
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
BELGIUM 1.8M
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
THE NETHERLANDS 2.6M
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
ITALY 4.5M
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
GREECE 1.0M
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
SWEDEN 4.2M
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
NORWAY 3.5M
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
DENMARK 2.0M
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
FINLAND 2.0M
------------------------------------ ----------------------------------
There are 61.7 Million agency booked PNRs available in the above countries in
the European market.
Of this volume:-
15m in the UK and Ireland representing 24% of the overall volume. 11.7m
in Nordic, representing 18.9% of the overall volume.
Of the UK and Nordic volumes:-
Amex has 2.2m of UK and 2.0m of Nordic
Cwlit 1.1m of UK and 1.2m of Nordic
BTI 1.2m of UK and 1.6m of Nordic
Therefore 4.5m PNRs rest in the megas in the UK and 4.8m in Nordic. Within these
two territories, 6.5m PNRs are with Amex and CWL who are longer term sales
targets leaving 10.5m PNRs with other third parties for target in the UK and
6.9m for Nordic.
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Campaigns will start in the UK, Ireland and Nordic first with France and Germany
as secondary focus markets. That enables the focus to be on ▇▇▇▇ ▇▇▇▇▇▇▇▇ main
markets to build ▇▇▇▇▇▇▇▇ ▇▇▇▇, and also for English language focus.
The business plan for CoRRe bureau is based upon a percentage conversion of the
17.4m third party (non mega) UK/Nordic business. ResAssist HR is based upon a
percentage pick-up of the BTI UK projected e-commerce volume. ResAssist 3rd
party is based on converting a percentage of the 17.5m market volume to
self-service reservations.
OFS:
CORPORATE
The take up of online bookings has been slow, but within Europe this
has mainly been due to lack of travel policy and systems. More
corporations are now requesting travel intranets to be built that offer
the ability to conduct e-commerce transactions. By providing systems
that maintain policy/compliance and book quickly, corporations are
beginning to realize the potential cost savings. They are also slowly
realizing that an e-commerce programme requires commitment.
The business plan for HR business has been built on the assumption of
2%, 4%, 8% and 12% conversion from Y1 to Y4. The 3rd party corporate
market plan has been based on converting 33% of the 3rd party ResAssist
sales.
NON-MANAGED/TRAVEL PORTAL
The portal direct model is a fast growing business as travel is a top
focus for internet portals. Industry figures for the US show that
5.4%(1) of airline bookings were made online in 1999. To assess the
business potential from the UK, the total scheduled air passenger
volumes were researched. The CAA shows that the UK Air Market equates
to 61m(2) uplifted passengers in 1998. 35m of these were directly
attributable to BA ,showing the dominant volume the main carrier holds.
The business plan is based on capturing a percentage of the online
volume for fulfilment. Without growing the available air volume, the
assumption of a growth in online bookings with 5 percentage points per
annum has been taken, giving an online market of 5% (of total airline
bookings) in YR1, 10% YR2, 15% YR3 and 20% YR4. BA, who has contributed
with the assumptions, would themselves produce in the region of 1.75m,
3.5m, 5.25m and 7m transactions respectively over the four years with
these assumptions.
OFS has targeted a market share of 2.5%, 7%, 10% and 12% of that e-
online market.
6. COMPETITION
NewCo's competitors include those organizations offering comparable travel
software products and service bureau-style transaction processing operations.
Technology companies in Europe have tended to build upon Back Office Systems.
More recently large travel management companies in Amadeus markets have been
developing their own systems.
US companies active in the European market place are Aqua, ATS and TTG. Neither
have claimed a significant business volume due to the costs associated with
achieving ▇▇▇▇▇▇▇▇ ▇▇▇▇ on a variable distributed platform.
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The main market in Europe is the UK, and all 3 of the above systems, plus some
smaller domestic players can be found. The main reason for this is language and
that the main US systems of Galileo, Sabre and Worldspan are prevalent in the
market.
The major European system houses have built their domestic business on the back
of large travel management companies, and have started venturing outside of
their markets. Partner S/W (Eurolloyd), TRISS (▇▇▇▇▇▇▇) ICSAT (Kuoni, CWLIT) are
some examples of this.
New market entrants have started to offer European self booking systems that
will compete with ResAssist. The most well known of these systems is KDS (▇▇▇▇
Data Systems), who supply a variety of applications to the French speaking
markets. The KDS Wave system is not a Service Bureau configuration though and
needs to be installed by each client on individual server structures.
Apart from the private companies as listed above, the US system houses of
▇▇▇▇▇▇▇▇.▇▇▇ and Oracle E-travel also have a presence within Europe.
▇▇▇▇▇▇▇▇.▇▇▇ is by far the most aggressive system in Europe winning a few
accounts, but they are now focusing mainly on being a B2B supplier to start-up
travel portals.
The GDS also have their products available in the market, but no QC products.
Sabre BTS, Amadeus Corporate Traveller, Worldspan TripManager and Galileo
TravelPoint are all on offer but have limited success.
Amadeus has most recently started a program of investment into 3rd party
software companies, they have a 49% interest in ICSAT and the Amadeus NDC in
Germany has the controlling interest in Partner Software. Relationships between
Amadeus and SAP, Amadeus and Eriksson pose probably the strongest threat in the
future.
In general the European market does not have a class international travel
software house with large backing. The barriers to entry have always been to
great and local market focus has been the only way.
7. MARKET OPPORTUNITY
Both service bureau and software competitors are at a competitive disadvantage
relative to NewCo. This is primarily due to the fact that they have no client as
large as BTI for reference and ongoing development. In addition, NewCo will have
a cost advantage through the transaction volume of ▇▇▇▇ ▇▇▇▇▇▇▇▇ in Europe and
WTP in the USA.
The market for electronic booking transactions is expected to grow
significantly. Fulfillment is becoming an import part of the e-commerce world
both from a customer retention and cost reduction perspective.
OFS in the USA has the lowest cost structure in the market along with no direct
competitors for its core fulfillment service. This model will be used as a key
opportunity to gain business within Europe. NewCo will also leverage ▇▇▇▇
▇▇▇▇▇▇▇▇'▇ strong relations with key players in the travel industry and with the
corporate community.
Like the USA, Corporate travel transaction services are undergoing a fundamental
change in Europe. All participants in the market value lower transaction costs,
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and corporations are looking at the cost of a process rather than its value
relative to the ticket price. Outsourcing will become more accepted by potential
customers, as the cost of the process will be driven by volume.
As online corporate transaction volume grows, the demand for a neutral processor
will also grow. This will free up corporate travel management companies from
basic staff requirements, and enable them to focus on developing added-value
skills to differentiate themselves.
NewCo will be positioned to take advantage of this change as it happens.
The above scenarios are however relatively reactive to the fact that someone
else will take the lead and we will offer certain services.
Another opportunity could be creating our own online travel agent. A few already
exist like e-bookers and ▇▇▇▇▇▇▇▇▇.▇▇▇, but this could be a new avenue for NewCo
to investigate and establish a separate company.
Both ▇▇▇▇ ▇▇▇▇▇▇▇▇ and WTP will be offering online travel agency services but
aimed at the B2B market and not B2C. We have the knowledge and the product to
offer a BTC service and the timing could be perfect to start such a venture. A
separate business case will need to be built for this venture.
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SCHEDULE 2: COMPLETION AGREEMENTS
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(a) WTT Licence
(b) Shared Services Agreement between the Company and HRPLC
(c) Software Development Agreement between the Company and HRPLC
(d) Software Licence Agreement between the Company and HRPLC
(e) Software Licence Agreement between HRPLC and the Company
(f) Service Bureau Software Services Agreement between the Company and
HRPLC
(g) Service Bureau/Outsourcing Agreement for Online Fulfillment Services
between the Company and HRPLC
(h) Reciprocal Software Development Agreement between the Company and WTT
(i) Software Support Agreement between the Company and WTT
(j) Software Support Agreement between the Company and HRPLC
(k) Operating Agreement between WT Technologies and ▇▇▇▇ ▇▇▇▇▇▇▇▇
International Benefits Limited
(l) ▇▇▇▇ of Sale and General Assignment between WT Technologies and ▇▇▇▇
▇▇▇▇▇▇▇▇ International Benefits Limited
(m) Loan Note
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SCHEDULE 3: DEED OF ADHERENCE
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THIS DEED OF ADHERENCE is made on [ ] 200[ ]
By [ ] of [ ] (the "COVENANTOR") in favour of the persons whose names are set
out in the schedule to this Deed and is SUPPLEMENTAL to the Shareholders
Agreement dated [ ] made by [ ] (the "SHAREHOLDERS AGREEMENT")
THIS DEED WITNESSES as follows:
1. The Covenantor confirms that it has been given and read a copy of the
Shareholders Agreement and covenants with each person name in the
schedule to this Deed to perform and be bound by all the terms of the
Shareholders Agreement, except clauses [ ], as if the Covenantor were a
Shareholder who is a party to the Shareholders Agreement.
2. This Deed is governed by English law.
IN WITNESS WHEREOF this Deed has been executed by the Covenantor and is intended
to be and is hereby delivered on the date first above written.
SCHEDULE
[Parties to Shareholders Agreement including those who have executed earlier
deeds of adherence.]
EXECUTED as a deed by )
[ ] ) ..........................................
Director's signature
..........................................
Director's name
..........................................
Director/Secretary's signature
..........................................
Director/Secretary's name
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SCHEDULE 4: TARGETS
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OFS SERVICES TARGET BUSINESS PLAN TARGET TARGET # ACTUAL STATUS
75%
UK Airline passengers
61,000,000
Portal share 15.0%
Portal passengers
9,150,000
NEWCO MARKET SHARE 10.0% 7.5% 2 FAIL
Newco transactions
915,000
Price/Transaction, USD
6
NEWCO OFS SERVICES SALES 1 FAIL
5,490,000 4,117,500
If the Company fails to meet OFS Services ▇▇▇▇▇▇ # ▇, then Target # 2 shall be
measured. If the Company also fails to meet Target # 2, then the Company has
failed to meet the OFS Services Target.
TTG TARGET (CORRE ONLY) BUSINESS PLAN TARGET TARGET #
75%
TTL Newco CoRRe PNR's
4,240,000
3RD PARTY SHARE 10.0% 7.5% 2 FAIL
3rd party PNR's
424,000
Price/Transaction, USD
0.50
NEWCO TTG CORRE SALES 1 FAIL
212,000 159,000
If the Company fails to meet TTG Target # 1, then Target # 2 shall be measured.
If the Company also fails to meet Target 2, the Company has failed to meet the
TTG Target.
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OFS CORPORATE SERVICES TARGET BUSINESS PLAN TARGET TARGET # ACTUAL STATUS
75%
PNR's in UK and Nordic Countries
17,500,000
Percentage of PNR:s on SSR 15.0%
SSR PNR's
2,625,000
Newco market share 10.0%
Newco ResAssist transactions
262,500
OFS CORPORATE SHARE 33.33% 25.0% 2 FAIL
OFS Corporate transactions
87,500
Price/Transaction, USD
14.00
OFS CORPORATE SERVICES SALES 1 FAIL
1,225,000 918,750
If the Company fails to meet the TTG Target, then the OFS Corporate Services
Target shall be measured.
If the Company fails to meet OFS Corporate Services Target # 1, then Target # 2
shall be measured. If the Company also fails to meet Target # 2, the Company has
failed to meet the OFS Corporate Services Target.
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ANNEX A: ARTICLES
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COMPANY NUMBER: 3841799
COMPANIES ACTS 1985 AND 1989
---------------------------------------
ARTICLES OF ASSOCIATION
FOR
FORTDOVE LIMITED
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Adopted by a Written Resolution dated February 2000
▇▇▇▇▇▇▇▇▇, WILL & ▇▇▇▇▇
▇ ▇▇▇▇▇▇▇▇▇▇▇
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TEL: ▇▇▇ ▇▇▇▇ ▇▇▇▇
FAX: ▇▇▇ ▇▇▇▇ ▇▇▇▇
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COMPANY NUMBER: 3841799
1. INTERPRETATION
1.1 In these Articles:
""A" DIRECTOR" means a Director appointed an "A" Director pursuant to
ARTICLE 20.1;
""A" SHARE" means an "A" Share of (pound)1 in the capital of the
CompaNY;
""A" SHAREHOLDER" means a holder of "A" Shares;
"ACT" means the Companies ▇▇▇ ▇▇▇▇ including any statutory modification
or re-enactment thereof for the time being in force;
"ADDITIONAL DIRECTOR" means a Director appointed pursuant to Article
20.3;
"ARTICLES" means these articles of association of the Company;
"ASSOCIATE" means in relation to any Shareholder any subsidiary
undertaking or parent undertaking of that Shareholder, or any other
subsidiary undertaking of such parent undertaking, and for these
purposes "parent undertaking" means, in relation to another undertaking
(a subsidiary undertaking) an undertaking which holds (directly or
indirectly) at least 75 per cent. of the Voting Rights in the
undertaking and "subsidiary undertaking" shall be construed
accordingly;
"AUDITORS" means the auditors from time to time of the Company;
""B" DIRECTOR" means a Director appointed a "B" Director pursuant to
ARTICLE 20.2;
""B" SHARE" means a "B" Share of (pound)1 in the capital of the
CompaNY;
""B" SHAREHOLDER" means a holder of "B" Shares;
"BOARD" means the board of Directors of the Company from time to time;
"BUSINESS DAY" means any day (other than a Saturday or Sunday) on which
banks are open for business in England and Atlanta, Georgia;
"CLEAR DAYS" in relation to the period of a notice means that period
excluding the day when the notice is given or deemed to be given and
the day for which it is given or on which it is to take effect;
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"DIRECTOR" means any director from time to time of the Company,
including (where applicable) any alternate director;
"EXECUTED" includes any mode of execution;
"OFFICE" means the registered office of the Company;
"HOLDER" or "MEMBER" in relation to Shares means the person whose name
is entered in the register of members as the holder of the Shares;
"SEAL" means the common seal of the Company;
"SECRETARY" means the secretary of the Company or any other person
appointed to perform the duties of the secretary of the Company,
including a joint, assistant or deputy secretary;
"SHARES" means any and/or all of the "A" Shares and "B" Shares;
"TRANSFER NOTICE" has the meaning set out in ARTICLE 10;
"UNITED KINGDOM" means Great Britain and Northern Ireland;
"VOTING RIGHTS" means voting rights exercisable at general meeting of
members of a Company;
"WRITING" shall be deemed to include photocopy, telex, facsimile,
telegram and other methods of reproducing or communicating in writing
in visible form.
1.2 Unless the context otherwise requires, words or expressions contained
in these Articles bear the same meaning as in the Act but excluding any
statutory modification thereof not in force when these Articles become
binding on the Company.
2. PRIVATE COMPANY
The Company is a "Private Company" within the meaning of Section 1 of
the Act and accordingly no shares in or debentures of the Company shall
be offered to the public (whether for cash or otherwise) and the
Company shall not allot or agree to allot (whether for cash or
otherwise) any shares in or debentures of the Company with a view to
all or any of those shares or debentures being offered for sale to the
public.
3. SHARE CAPITAL
3.1 The share capital of the Company at the date of adoption of these
Articles is (pound)100 divided into 50 "A" Shares and 50 "B" Shares.
The "A" Shares and the "B" Shares shall entitle the holders of those
shares to the respective rights and privileges and subject them to the
respective restrictions and provisions contained in these Articles.
3.2 Subject to the provisions of the Act, Shares may be issued which are to
be redeemed or are to be liable to be redeemed at the option of the
Company or the holder on such terms and in such manner as the Company
may by special resolution determine.
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3.3 The Company may exercise the powers of paying commissions conferred by
the Act. Subject to the provisions of the Act, any such commission may
be satisfied by the payment of cash or by the allotment of fully or
partly paid Shares or partly in one way and partly in the other.
3.4 Except as required by law, no person shall be recognised by the Company
as holding any Share upon any trust and (except as otherwise provided
by these Articles or by law) the Company shall not be bound by or
recognise any interest in any Share except an absolute right to the
entirety thereof in the holder.
3.5 The rights conferred upon the holders of the "A" Shares and "B" Shares
shall be deemed to be varied by:
3.5.1 the reduction of the capital paid up on any of those Shares;
3.5.2 by the creation or issue of further Shares ranking in priority
to them for the payment of a dividend or of capital; or
3.5.3 any amendment to the Memorandum of Association or these
Articles;
but shall not be deemed to be varied by:
3.5.4 the creation or issue of further Shares ranking subsequent to
them; or
3.5.5 by the Company purchasing an equal number of "A" Shares and
"B" Shares.
4. ALLOTMENT OF SHARES
4.1 Subject to the provisions of these Articles and the Act, the Directors
shall have authority to allot, grant options over, offer or otherwise
deal with or dispose of any unissued Shares (whether forming part of
the original or any increased share capital) on such terms and
conditions as the Company may by ordinary resolution determine.
4.2 In exercising their authority under ARTICLE 4.1 the Directors shall not
be required to have regard to Sections 89(1) and 90(1) to (6)
(inclusive) of the Act which Sections shall be excluded from applying
to the Company.
5. SHARE CERTIFICATES
5.1 Every member, upon becoming the holder of any Shares, shall be entitled
without payment to one certificate for all the Shares held by him (and,
upon transferring a part of his holding of Shares, to a certificate for
the balance of such holding) or several certificates each for one or
more of his Shares upon payment for every certificate after the first
of such reasonable sum as the Directors may determine. Every
certificate shall be sealed with the seal and shall specify the number,
class and distinguishing numbers (if any) of the Shares to which it
relates and the amount or respective amounts paid up thereon.
5.2 The Company shall not be bound to issue more than one certificate for
Shares held jointly by several persons and delivery of a certificate to
one joint holder shall be a sufficient delivery to all of them.
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5.3 If a share certificate is defaced, worn-out, lost or destroyed, it may
be renewed on such terms (if any) as to evidence and indemnity and
payment of the expenses reasonably incurred by the Company in
investigating evidence as the Directors may determine but otherwise
free of charge, and (in the case of defacement or wearing-out) on
delivery up of the old certificate.
6. LIEN
6.1 The Company shall have a first and paramount lien on every Share,
whether fully paid or not, for all moneys (whether presently payable or
not) payable at a fixed time or called in respect of that Share. The
Company shall also have a first and paramount lien on all Shares,
whether fully paid or not, standing registered in the name of any
person indebted or under liability to the Company, whether he shall be
the sole registered holder thereof or shall be one of two or more joint
holders, for all moneys presently payable by him or his estate to the
Company. The Directors may at any time declare any Share to be wholly
or in part exempt from the provisions of this ARTICLE 6.1. The
Company's lien on a Share shall extend to any amount payable in respect
of it.
6.2 The Company may sell in such manner as the Directors determine any
Shares on which the Company has a lien if a sum in respect of which the
lien exists is presently payable and is not paid within fourteen clear
days after notice has been given to the holder of the Share or to the
person entitled to it in consequence of the death or bankruptcy of the
holder, demanding payment and stating that if the notice is not
complied with the Shares may be sold.
6.3 To give effect to a sale the Directors may authorise some person to
execute an instrument of transfer of the Shares sold to, or in
accordance with the directions of, the purchaser. The title of the
transferee to the Shares shall not be affected by any irregularity in
or invalidity of the proceedings in reference to the sale.
6.4 The net proceeds of the sale, after payment of the costs, shall be
applied in payment of so much of the sum for which the lien exists as
is presently payable, and any residue shall (upon surrender to the
Company for cancellation of the certificate for the Shares sold and
subject to a like lien for any moneys not presently payable as existed
upon the Shares before the sale) be paid to the person entitled to the
Shares at the date of the sale.
7. CALLS ON SHARES AND FORFEITURE
7.1 Subject to the terms of allotment, the Directors may make calls upon
the members in respect of any moneys unpaid on their Shares (whether in
respect of nominal value or premium) and each member shall (subject to
receiving at least fourteen clear days' notice specifying when and
where payment is to be made) pay to the Company as required by the
notice the amount called on his Shares. A call may be required to be
paid by instalments. A call may, before receipt by the Company of any
sum due thereunder, be revoked in whole or part and payment of a call
may be postponed in whole or part. A person upon whom a call is made
shall remain liable for calls made upon him notwithstanding the
subsequent transfer of the Shares in respect whereof the call was made.
7.2 A call shall be deemed to have been made at the time when the
resolution of the Directors authorising the call was passed.
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7.3 The joint holders of a Share shall be jointly and severally liable to
pay all calls in respect thereof.
7.4 If a call remains unpaid after it has become due and payable the person
from whom it is due and payable shall pay interest on the amount unpaid
from the day it became due and payable until it is paid at the rate
fixed by the terms of allotment of the Share or in the notice of the
call or, if no rate is fixed, at the appropriate rate (as defined by
the Act) but the Directors may waive payment of the interest wholly or
in part.
7.5 An amount payable in respect of a Share on allotment or at any fixed
date, whether in respect of nominal value or premium or as an
instalment of a call, shall be deemed to be a call and if it is not
paid the provisions of these Articles shall apply as if that amount had
become due and payable by virtue of a call.
7.6 Subject to the terms of allotment, the Directors may make arrangements
on the issue of Shares for a difference between the holders in the
amounts and times of payment of calls on their Shares.
7.7 If a call remains unpaid after it has become due and payable the
Directors may give to the person from whom it is due not less than
fourteen clear days' notice requiring payment of the amount unpaid
together with any interest which may have accrued and all expenses that
may have been incurred by the Company by reason of such non-payment.
The notice shall name the place where payment is to be made and shall
state that if the notice is not complied with the Shares in respect of
which the call was made will be liable to be forfeited.
7.8 If the notice is not complied with any Share in respect of which it was
given may, before the payment required by the notice has been made, be
forfeited by a resolution of the Directors and the forfeiture shall
include all dividends or other moneys payable in respect of the
forfeited Shares and not paid before the forfeiture.
7.9 Subject to the provisions of the Act, a forfeited Share may be sold,
re-allotted or otherwise disposed of on such terms and in such manner
as the Directors determine either to the person who was before the
forfeiture the holder or to any other person and at any time before
sale, re-allotment or other disposition, the forfeiture may be
cancelled on such terms as the Directors think fit. Where for the
purposes of its disposal a forfeited Share is to be transferred to any
person the Directors may authorise some person to execute an instrument
of transfer of the Share to that person.
7.10 A person any of whose Shares have been forfeited shall cease to be a
member in respect of them and shall surrender to the Company for
cancellation the certificate for the Shares forfeited but shall remain
liable to the Company for all moneys which at the date of forfeiture
were presently payable by him to the Company in respect of those Shares
with interest at the rate at which interest was payable on those moneys
before the forfeiture or, if no interest was so payable, at the
appropriate rate (as defined in the Act) from the date of forfeiture
until payment but the Directors may waive payment wholly or in part or
enforce payment without any allowance for the value of the Shares at
the time of forfeiture or for any consideration received on their
disposal.
7.11 A statutory declaration by a Director or the Secretary that a Share has
been forfeited on a specified date shall be conclusive evidence of the
facts stated in it as against all persons claiming to be entitled to
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the Share and the declaration shall (subject to the execution of an
instrument of transfer if necessary) constitute a good title to the
Share and the person to whom the Share is disposed of shall not be
bound to see to the application of the consideration, if any, nor shall
his title to the Share be affected by any irregularity in or invalidity
of the proceedings in reference to the forfeiture or disposal of the
Share.
8. TRANSFER OF SHARES
8.1 The instrument of transfer of a Share may be in any usual form or in
any other form which the Directors may approve and shall be executed by
or on behalf of the transferor and, unless the Share is fully paid, by
or on behalf of the transferee.
8.2 The Directors may refuse to register the transfer of a Share on which
the Company has a lien. The Directors may also refuse to register a
transfer unless:
8.2.1 it is permitted by ARTICLE 9 or has been made in accordance
with ARTICLE 10 and 11;
8.2.2 it is lodged at the office or at such other place as the
Directors may appoint and is accompanied by the certificate
for the Shares to which it relates and such other evidence as
the Directors may reasonably require to show the right of the
transferor to make the transfer;
8.2.3 it is in respect of only one class of shares; and
8.2.4 it is in favour of not more than four transferees; and
8.3 If the Directors refuse to register a transfer of a Share, they shall
within 10 Business Days after the date on which the transfer was lodged
with the Company send to the transferee and the transferor notice of
the refusal.
8.4 No fee shall be charged for the registration of any instrument of
transfer or other document relating to or affecting the title to any
Share.
8.5 The Company shall be entitled to retain any instrument of transfer
which is registered, but any instrument of transfer which the Directors
refuse to register shall be returned to the person lodging it when
notice of the refusal is given.
9. PERMITTED TRANSFERS
9.1 A member may at any time transfer all of its Shares (the "Relevant
Shares") to an Associate. The Associate may at any time transfer all of
the Relevant Shares to the member or another Associate of the member.
Article 10 shall not apply to the transfer of any Relevant Shares
pursuant to this Article 9.1.
9.2 If the Relevant Shares have been transferred under ARTICLE 9.1 by a
member (the "Transferor" to its Associate (the "Transferee") and
subsequently the Transferee ceases to be an Associate of the Transferor
then the Transferee shall forthwith transfer the Relevant Shares to the
Transferor or at the Transferor's option to an Associate of the
Transferor. If the Transferee fails to transfer the Relevant Shares
within twenty-eight days of the Transferee ceasing to be an Associate
of the Transferor then the Transferee shall be deemed to have served a
Transfer Notice in respect of the Relevant Shares and the provisions of
ARTICLE 10 shall apply accordingly. The Transfer Notice shall be
irrevocable.
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9.3 The Directors may require the holder of the Relevant Shares or the
person named as transferee in any transfer lodged for registration to
furnish the Directors with such information and provide such other
documentation as the Directors may reasonably consider necessary for
the purpose of ensuring that a transfer of Shares is permitted under
ARTICLE 9.1. If the information is not provided within twenty-eight
days of the request the directors may refuse to register the transfer
of the Relevant Shares.
10. TRANSFERS SALE TO THIRD PARTIES
10.1 Before a member (the "Vendor") transfers or disposes all, but not some
only of its shares ("Offered Shares") the Vendor shall give notice in
writing (the "Transfer Notice") to the other member (the "Purchaser")
of its intention to sell the Offered Shares and to negotiate with the
Purchaser in good faith the price and corresponding terms of purchase
for the Offered Shares. In the event that by the forty-fifth day after
the date of the Offer Notice (the "Third Party Date") the Vendor does
not accept the Purchaser's final proposed price and corresponding terms
(the "Final Offer"), the Vendor shall notify the Purchaser in writing
that the Purchaser's final price and terms have been rejected.
10.2 In the event the Purchaser does not accept the Final Offer, the Vendor
may sell the Offered Shares to a third party or parties; provided,
however, that any sale to a third party of the Offered Shares must be
evidenced by a letter of intent which must be signed within six months
of the Third Party Date and the contemplated transaction must be
completed within one year of the Third Party Date. The sale of the
Offered Shares to a third party or parties shall be for a price not
less than 95% of the Final Offer.
10.3 In the event of a sale to a third party in accordance with Article
10.2, the Board shall be reconstituted and the "A" Shareholder and the
"B" Shareholder shall each be entitled to and shall appoint three
Directors (who shall be designated "A" Directors and "B" Directors
respectively) and each such Director shall be entitled to one vote. For
the avoidance of doubt, the members may also agree to jointly appoint
such further number of Directors as they may determine and each such
further Director shall be entitled to one vote.
11. CONVERSION OF "A" AND "B" SHARES
11.1 When an "A" Share is transferred to a "B" Shareholder it shall be
converted into a "B" Share.
11.2 When a "B" Share is transferred to an "A" Shareholder it shall be
converted into an "A" Share.
12. TRANSMISSION OF SHARES
12.1 If a member dies the survivor or survivors where he was a joint holder,
and his personal representatives where he was a sole holder or the only
survivor of joint holders, shall be the only persons recognised by the
Company as having any title to his interest; but nothing herein
contained shall release the estate of a deceased member from any
liability in respect of any Share which had been jointly held by him.
12.2 A person becoming entitled to a Share in consequence of the death or
bankruptcy of a member may, upon such evidence being produced as the
Directors may properly require, elect either to become the holder of
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the Share or to have some person nominated by him registered as the
transferee. If he elects to become the holder he shall give notice to
the Company to that effect. If he elects to have another person
registered he shall execute an instrument of transfer of the Share to
that person. ARTICLE 10 relating to the transfer of Shares shall apply
to the notice or instrument of transfer as if it were an instrument of
transfer executed by the member and the death or bankruptcy of the
member had not occurred.
12.3 A person becoming entitled to a Share in consequence of the death or
bankruptcy of a member shall have the rights to which he would be
entitled if he were the holder of the Share, except that he shall not,
before being registered as the holder of the Share, be entitled in
respect of it to attend or vote at any meeting of the Company or at any
separate meeting of the holders of any class of shares in the Company.
13. ALTERATION OF SHARE CAPITAL
13.1 Subject to the provisions of the Act, the Company may by Ordinary
Resolution:
13.1.1 increase its share capital by new shares of such amount as the
resolution prescribes;
13.1.2 consolidate and divide all or any of its share capital into
shares of larger amount than its existing shares;
13.1.3 subject to the provisions of the Act, sub-divide its shares,
or any of them, into shares of smaller amount and the
resolution may determine that, as between the shares resulting
from the sub-division, any of them may have any preference or
advantage as compared with the others; and
13.1.4 cancel shares which, at the date of the passing of the
resolution, have not been taken or agreed to be taken by any
person and diminish the amount of its share capital by the
amount of the shares so cancelled.
13.2 Whenever as a result of a consolidation of shares any members would
become entitled to fractions of a share, the Directors may, on behalf
of those members, sell the shares representing the fractions for the
best price reasonably obtainable to any person (including, subject to
the provisions of the Act, the Company) and distribute the net proceeds
of sale in due proportion among those members, and the Directors may
authorise some person to execute an instrument of transfer of the
shares to, or in accordance with the directions of, the purchaser. The
transferee shall not be bound to see to the application of the purchase
money nor shall his title to the shares be affected by any irregularity
in or invalidity of the proceedings in reference to the sale.
13.3 Subject to the provisions of the Act, the Company may by Special
Resolution reduce its share capital, any capital redemption reserve and
any share premium account in any way.
14. PURCHASE OF OWN SHARES
Subject to the provisions of the Act, the Company may purchase its own
shares (including any redeemable shares) and, for so long as it is a
private company, make a payment in respect of the redemption or
purchase of its own shares whether out of its distributable profits or
out of the proceeds of a fresh issue of shares or otherwise.
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15. GENERAL MEETINGS
15.1 All General Meetings other than Annual General Meetings shall be called
Extraordinary General Meetings.
15.2 The Directors may call General Meetings and, on the requisition of
members pursuant to the provisions of the Act, shall forthwith proceed
to convene an Extraordinary General Meeting for a date not later than
twenty-eight days after receipt of the requisition. If there are not
within the United Kingdom sufficient Directors to call a General
Meeting, any Director or any member of the Company may call a General
Meeting.
16. NOTICE OF GENERAL MEETINGS
16.1 An Annual General Meeting and an Extraordinary General Meeting called
for the passing of a Special Resolution or a resolution appointing a
person as a Director shall be called by at least twenty-one clear days'
notice. All other Extraordinary General Meetings other than a meeting
called for the passing of an elective resolution may be called by
shorter notice if it is so agreed:
16.1.1 in the case of an Annual General Meeting, by all the members
entitled to attend and vote thereat; and
16.1.2 in the case of any other meeting by a majority in number of
the members having a right to attend and vote, being (i) a
majority together holding not less than such percentage in
nominal value of the shares giving that right as has been
determined by elective resolution in accordance with the Act
or (ii) if no such elective resolution is in force a majority
together holding not less than ninety-five per cent in nominal
value of the Shares giving that right.
16.2 Every notice convening a General Meeting shall specify the time and
place of the meeting and the general nature of the business to be
transacted and, in the case of an Annual General Meeting, shall specify
the meeting as such. Every notice convening a General Meeting shall
also comply with the provisions of Section 372(3) of the Act as to
giving information to members in regard to their right to appoint
proxies.
16.3 Subject to the provisions of these Articles and to any restrictions
imposed on any Shares, notices of and other communications relating to
any General Meeting shall be given to all the members entitled to
receive the same, to all persons entitled to a Share in consequence of
the death or bankruptcy of a member and to the Directors and Auditors.
16.4 The accidental omission to give notice of a meeting to, or the
non-receipt of notice of a meeting by, any person entitled to receive
notice shall not invalidate the proceedings at that meeting.
17. PROCEEDINGS AT GENERAL MEETINGS
17.1 No business shall be transacted at any General Meeting unless a quorum
is present at the time when the meeting proceeds to business and whilst
the business of the meeting is being transacted. A quorum shall consist
of at least one "A" Shareholder and one "B" Shareholder, present in
person or by proxy or (being a corporation) represented in accordance
with Section 375 of the Act, together owning not less than one half in
nominal value of the issued shares.
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17.2 If a quorum is not present, within half an hour from the time appointed
for a General Meeting the General Meeting shall stand adjourned to the
same day in the next week at the same time and place or to such other
day and at such other time and place as the Directors may determine;
and if at the adjourned General Meeting a quorum is not present within
half an hour from the time appointed therefor such adjourned General
Meeting shall be dissolved.
17.3 The Chairman, if any, of the Board or in his absence the deputy
Chairman of the Board or in his absence some other Director nominated
by the Directors shall preside as chairman of the General Meeting, but
if neither the Chairman nor the deputy Chairman nor such other Director
(if any) be present within fifteen minutes after the time appointed for
holding the General Meeting and willing to act, the Directors present
shall elect one of their number to be chairman and, if there is only
one Director present and willing to act, he shall be chairman.
17.4 If no Director is willing to act as Chairman, or if no Director is
present within fifteen minutes after the time appointed for holding the
General Meeting, the members present and entitled to vote shall choose
one of their number to be chairman.
17.5 A Director shall, notwithstanding that he is not a member, be entitled
to attend and speak at any General Meeting and at any separate meeting
of the holders of any class of shares in the Company.
17.6 The Chairman may, with the consent of a General Meeting at which a
quorum is present (and shall if so directed by the meeting), adjourn
the General Meeting from time to time and from place to place, but no
business shall be transacted at an adjourned General Meeting other than
business which might properly have been transacted at the General
Meeting had the adjournment not taken place. It shall not be necessary
to give any such notice of such adjourned General Meetings.
17.7 A resolution put to the vote of a General Meeting shall be decided on a
show of hands unless before, or on the declaration of the result of,
the show of hands a poll is duly demanded. Subject to the provisions of
the Act, a poll may be demanded:
17.7.1 by the Chairman; or
17.7.2 by at least two members having the right to vote at the
meeting; or
17.7.3 by a member or members representing not less than one-tenth of
the total voting rights of all the members having the right to
vote at the meeting; or
17.7.4 by a member or members holding shares conferring a right to
vote at the meeting being shares on which an aggregate sum has
been paid up equal to not less than one-tenth of the total sum
paid up on all the shares conferring that right;
and a demand by a person as proxy for a member shall be the same as a
demand by the member.
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17.8 The demand for a poll may, before the poll is taken, be withdrawn but
only with the consent of the chairman and a demand so withdrawn shall
not be taken to have invalidated the result of a show of hands declared
before the demand was made.
17.9 A poll shall be taken as the chairman directs and he may appoint
scrutineers (who need not be members) and fix a time and place for
declaring the result of the poll. The result of the poll shall be
deemed to be the resolution of the meeting at which the poll was
demanded.
17.10 In the case of an equality of votes, whether on a show of hands or on a
poll, the Chairman shall not be entitled to a casting vote in addition
to any other vote he may have.
17.11 A poll demanded on the election of a Chairman or on a question of
adjournment shall be taken forthwith. A poll demanded on any other
question shall be taken either forthwith or at such time and place as
the Chairman directs not being more than thirty days after the poll is
demanded. The demand for a poll shall not prevent the continuance of a
meeting for the transaction of any business other than the question on
which the poll was demanded. If a poll is demanded before the
declaration of the result of a show of hands and the demand is duly
withdrawn, the meeting shall continue as if the demand had not been
made.
17.12 No notice need be given of a poll not taken forthwith if the time and
place at which it is to be taken are announced at the meeting at which
it is demanded. In any other case at least seven clear days' notice
shall be given specifying the time and place at which the poll is to be
taken.
17.13 Subject to any statutory provision a resolution in writing expressed to
be an ordinary, special or extraordinary resolution signed by or on
behalf of all the members of the Company who would be entitled to
receive notice of and attend and vote on such resolution at a General
Meeting or of the holders of any class of shares thereof shall be as
valid and effectual as if the same had been passed at such a General
Meeting duly convened and held, or of the holders of any such class of
shares, duly convened and held, and may consist of several documents in
the like form each signed by one or more persons. In the case of a
corporation the resolution may be signed on its behalf by a director
thereof or by its duly appointed attorney or duly authorised
representative.
17.14 Any member or his proxy may validly participate in a General Meeting
through the medium of conference telephone, video-conferencing
equipment or similar form of communication equipment provided that all
persons participating in the meeting are able to hear and speak to each
other throughout the meeting. A person so participating shall be deemed
to be present in person at the meeting and shall be counted in a quorum
and entitled to vote. A resolution passed at any meeting held in this
manner and signed by the Chairman shall be as valid and effectual as if
it had been passed at a meeting of the Board (or, as the case may be,
of that committee) duly convened and held, notwithstanding that fewer
than two directors or alternate directors are physically present at the
same place. Such a meeting shall be deemed to take place where the
largest group of those participating is assembled, or, if there is no
such group, at the location of the Chairman.
18. VOTES OF MEMBERS
18.1 Subject to any rights or restrictions attached to any Shares contained
in these Articles, on a show of hands every member who (being an
individual) is present in person or (being a corporation) is present by
a duly authorised representative, not being himself a member entitled
to vote, shall have one vote and on a poll every member shall have one
vote for every Share of which he is the holder.
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18.2 In the case of joint holders the vote of the senior who tenders a vote,
whether in person or by proxy, shall be accepted to the exclusion of
the votes of the other joint holders; and seniority shall be determined
by the order in which the names of the holders stand in the register of
members.
18.3 A member in respect of whom an order has been made by any court having
jurisdiction (whether in the United Kingdom or elsewhere) in matters
concerning mental disorder may vote, whether on a show of hands or on a
poll, by his receiver, curator bonis or other person authorised in that
behalf appointed by that court, and any such receiver, curator bonis or
other person may, on a poll, vote by proxy. Evidence to the
satisfaction of the Directors of the authority of the person claiming
to exercise the right to vote shall be deposited at the office before
the time appointed for holding the meeting or adjourned meeting at
which the right to vote is to be exercised and in default the right to
vote shall not be exercisable.
18.4 No member shall vote at any General Meeting or at any separate meeting
of the holders of any class of shares in the Company, either in person
or by proxy, in respect of any Share held by him unless all moneys
presently payable by him in respect of that Share have been paid.
18.5 No objection shall be raised to the qualification of any voter except
at the meeting or adjourned meeting at which the vote objected to is
tendered, and every vote not disallowed at the meeting shall be valid.
Any objection made in due time shall be referred to the chairman whose
decision shall be final and conclusive.
18.6 On a poll votes may be given either personally or by proxy. A member
may appoint more than one proxy to attend on the same occasion.
18.7 An instrument appointing a proxy shall be in writing, executed by or on
behalf of the appointor and shall be in the following form (or in a
form as near thereto as circumstances allow or in any other form which
is usual or which the Directors may approve):
" PLC/Limited
I/We, , of
being a member/members of the above-named company, hereby appoint
of , or failing him,
of , as my/our proxy to vote in my/our name[s] and on my/our
behalf at the annual/extraordinary general meeting of the company to be
held on 19 , and at any adjournment thereof.
Signed on 19 ."
18.8 Where it is desired to afford members an opportunity of instructing the
proxy how he shall act the instrument appointing a proxy shall be in
the following form (or in a form as near thereto as circumstances allow
or in any other form which is usual or which the Directors may
approve):
" PLC/Limited
I/We, , of
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being a member/members of the above-named company, hereby appoint
of , or failing him, of , as my/our
proxy to vote in my/our name[s] and on my/our behalf at the
annual/extraordinary general meeting of the company to be held on
19 , and at any adjournment thereof.
This form is to be used in respect of the resolutions mentioned below
as follows:
Resolution No 1 *for *against
Resolution No 2 *for *against.
*Strike out whichever is not desired.
Unless otherwise instructed, the proxy may vote as he thinks fit or
abstain from voting.
Signed this day of 19 ."
18.9 The instrument appointing a new proxy and any authority which it is
executed or a copy of such authority certified notarially or in some
other way approved by the Directors may:
18.9.1 be deposited at the office or at such other place within the
United Kingdom as is specified in the notice convening the
meeting or in any instrument of proxy sent out by the Company
in relation to the meeting before the time for holding the
meeting or adjourned meeting at which the person named in the
instrument proposes to vote; or
18.9.2 in the case of a poll taken more than 48 hours after it is
demanded, be deposited as aforesaid after the poll has been
demanded and before the time appointed for the taking of the
poll; or
18.9.3 where the poll is not taken forthwith but is taken not more
than 48 hours after it was demanded, be delivered at the
meeting at which the poll was demanded to the Chairman or to
the Secretary or to any Director;
and an instrument of proxy which is not deposited or delivered in a
manner so permitted shall be invalid.
18.10 A vote given or poll demanded by proxy or by the duly authorised
representative of a corporation shall be valid notwithstanding the
previous determination of the authority of the person voting or
demanding a poll unless notice of the determination was received by the
Company at the office or at such other place at which the instrument of
proxy was duly deposited before the commencement of the meeting or
adjourned meeting at which the vote is given or the poll demanded or
(in the case of a poll taken otherwise than on the same day as the
meeting or adjourned meeting) the time appointed for taking the poll.
19. NUMBER OF DIRECTORS
The number of Directors (other than alternate directors) shall be not
less than five and not more than seven.
20. APPOINTMENT AND REMOVAL OF DIRECTORS
20.1 A majority of the "A" Shareholders shall be entitled at any time and
from time to time to appoint up to three Directors to the Board and
shall at any time be entitled to require the removal or substitution of
any such Director so appointed by it. Any Director so appointed by the
"A" Shareholder shall be designated as an "A" Director. A vacancy in
the appointment of an "A" Director must be filled within 30 days.
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20.2 A majority of the "B" Shareholders shall be entitled at any time and
from time to time to appoint up to two Directors to the Board and shall
at any time be entitled to require the removal or substitution of any
such Director so appointed by it. Any Director so appointed by the "B"
Shareholder(s) shall be designated as a "B" Director. A vacancy in the
appointment of a "B" Director must be filled within 30 days.
20.3 The Shareholders shall be entitled to appoint or remove up to two
Additional Directors to the Board.
20.4 No share of either class shall confer any right to vote upon a
resolution for the removal from office of a director appointed by
holders of shares of the other class.
20.5 Any appointment of a director shall be made by notice served in writing
on the Company and signed by the persons appointing the director. In
the case of a corporation the notice may be signed on its behalf by a
director or the secretary of the corporation or by its duly appointed
attorney or duly authorised representative.
21. DISQUALIFICATION AND REMOVAL OF DIRECTORS
21.1 The office of a Director shall be vacated if:
21.1.1 a Director resigns his office by notice in writing to the
Company delivered to the office or tenders such resignation at
a meeting of Directors;
21.1.2 a Director is removed from office by his appointor in
accordance with ARTICLES 20.1 AND 20.2;
21.1.3 he ceases to be a director by virtue of any provision of the
Act or he becomes prohibited by law from being a director;
21.1.4 he becomes bankrupt or makes any arrangement or composition
with his creditors generally;
21.1.5 he is, or may be, suffering from mental disorder and either:
(a) he is admitted to hospital in pursuance of an
application for admission for treatment under the Mental
Health ▇▇▇ ▇▇▇▇ or, in Scotland, an application for
admission under the Mental Health (Scotland) ▇▇▇ ▇▇▇▇,
or
(b) an order is made by a court having jurisdiction (whether
in the United Kingdom or elsewhere) in matters
concerning mental disorder for his detention or for the
appointment of a receiver, curator bonis or other person
to exercise powers with respect to his property or
affairs; or
21.1.6 the member who appointed the Director transfers or no longer
holds the Shares which entitled it to appoint the Director.
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21.2 The Directors shall not be required to retire by rotation.
21.3 No person shall be disqualified from being or becoming a Director of
the Company by reason of his attaining or having attained the age of 70
years or any other age.
22. CHAIRMAN
22.1 A majority of the "A" Shareholders shall appoint a Chairman and a
majority of the "B" Shareholders shall appoint a deputy Chairman.
22.2 If the Chairman is unable to attend any meeting of the Board or of the
Company, the deputy Chairman shall chair the meeting at which the
Chairman is not present and if the deputy Chairman is not present
within five minutes after the time appointed for the meeting the
Directors or members present at such meeting shall be entitled to
appoint another Director to act in his place.
22.3 The Chairman and the deputy Chairman shall not have a second or casting
vote on any matter.
23. ALTERNATE DIRECTORS
23.1 Any Shareholder (other than an alternate director) may appoint any
Director, or any other person approved by resolution of the Directors
and willing to act, to be an alternate director and may remove from
office an alternate director so appointed by him.
23.2 A Director, or any other such person may act as an alternate director
to represent more than one Director and an alternate director shall be
entitled at any meeting of the Directors or of any committee of the
Directors to one vote for every Director whom he represents in addition
to his own vote (if any) as a Director, but he shall count as only one
for the purpose of determining whether a quorum is present.
23.3 An alternate director shall be entitled to receive notice of all
meetings of Directors and of all meetings of committees of Directors of
which his appointor is a member, to attend and vote at any such meeting
at which the Director appointing him is not personally present, and
generally to perform all the functions of his appointor as a Director
in his absence but shall not be entitled to receive any remuneration
from the Company for his services as an alternate director save that he
may be paid by the Company such part (if any) of the remuneration
otherwise payable to his appointor as such appointor may by notice in
writing to the Company from time to time direct.
23.4 An alternate director shall cease to be an alternate director if his
appointor ceases to be a Shareholder; but, if a Director retires but is
reappointed or deemed to have been reappointed at the meeting at which
he retires, any appointment of an alternate director made by him which
was in force immediately prior to his retirement shall continue after
his reappointment. The appointment of an alternate director shall also
terminate automatically on the happening of any event which if he were
a Director would cause him to vacate his office as a Director.
23.5 Any appointment or removal of an alternate director shall be by notice
to the Company signed by the Shareholder making or revoking the
appointment or in any other manner approved by the Directors provided
that no Shareholder shall appoint or remove any alternate director
without reasonable prior consultation, where practically possible, with
the other Shareholder.
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23.6 Save as otherwise provided in these Articles, an alternate director
shall be deemed for all purposes to be a Director and shall alone be
responsible for his own acts and defaults and he shall not be deemed to
be the agent of the Shareholder appointing him.
24. POWERS OF DIRECTORS
24.1 Subject to the provisions of the Act and any directions given by
Special Resolutions of the Company the business of the Company shall be
managed by the Directors who may exercise all the powers of the
Company. No alteration of the memorandum or these Articles or any such
direction shall invalidate any prior act of the Directors which would
have been valid if that alteration had not been made or that direction
had not been given. The powers given by this ARTICLE 24.1 shall not be
limited by any special power given to the Directors by these Articles
and a meeting of Directors at which a quorum is present may exercise
all powers exercisable by the Directors.
24.2 The Directors may, by power of attorney or otherwise, appoint any
person to be the agent of the Company for such purposes and on such
conditions as they determine, including authority for the agent to
delegate all or any of his powers.
25. DELEGATION OF DIRECTORS' POWERS
The Directors may delegate any of their powers to an operating
committee consisting of such members as shall be nominated and
appointed by a majority of the "A" Shareholders, subject to the prior
approval of such candidates by the "B" Shareholders . They may also
delegate to any managing director or any Director holding any other
executive office such of their powers as they consider desirable to be
exercised by him. Subject to any such conditions, the proceedings of a
committee with two or more members shall be governed by ARTICLE 27
relating to the proceedings of Directors so far as they are capable of
applying.
26. DIRECTORS' APPOINTMENTS AND INTERESTS
26.1 Subject to the provisions of the Act the Directors may appoint one or
more of their number to the office of managing director or to any other
executive office under the Company and may enter into an agreement or
arrangement with any Director for his employment by the Company or for
the provision by him of any services outside the scope of the ordinary
duties of a Director. Any such appointment, agreement or arrangement
may be made upon such terms as the Directors determine and they may
remunerate any such Director for his services as they think fit. Any
appointment of a Director to an executive office shall terminate if he
ceases to be a Director but without prejudice to any claim to damages
for breach of the contract of service between the Director and the
Company.
26.2 Provided that any Director has disclosed his interest in accordance
with section 317 of the Act a Director:
26.2.1 may be a party to, or otherwise interested in, any transaction
or arrangement with the Company or in which the Company is
otherwise interested;
26.2.2 may be a director or other officer of, or employed by, or a
party to any transaction or arrangement with, or otherwise
interested in, any body corporate promoted by the Company or
in which the Company is otherwise interested;
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26.2.3 shall not, by reason of his office, be accountable to the
Company for any benefit which he derives from any such office
or employment or from any such transaction or arrangement or
from any interest in any such body corporate and no such
transaction or arrangement shall be liable to be avoided on
the ground of any such interest or benefit; and
26.2.4 may vote at a meeting of directors or of a committee of
directors on any resolution concerning a matter in which he
has, directly or indirectly, an interest or duty and if he
does so vote, his vote shall be counted and he shall be
counted in the quorum present at a meeting in relation to any
such resolution.
26.3 For the purposes of ARTICLE 26.2:
26.3.1 a general notice given to the Directors that a Director is to
be regarded as having an interest of the nature and extent
specified in the notice in any transaction or arrangement in
which a specified person or class of persons is interested
shall be deemed to be a disclosure that the Director has an
interest in any such transaction of the nature and extent so
specified; and
26.3.2 an interest of which a Director has no knowledge and of which
it is unreasonable to expect him to have knowledge shall not
be treated as an interest of his.
27. PROCEEDINGS OF DIRECTORS
27.1 Subject to the provisions of these Articles, the Directors may regulate
their proceedings as they think fit. A Director may, and the Secretary
at the request of a Director shall, call a meeting of the Board which
shall be held in London or such other location in the United Kingdom as
the members shall agree in writing. Each of the Directors (and, where
appropriate, their alternates) shall be entitled to receive written
notice of every meeting of the Board and of every committee meeting of
the Board of which they are a member. The notice shall specify the
place, the day and the hour of the meeting and a written agenda
outlining the matters to be discussed at the meeting and shall be given
to each Director (unless all the Directors shall otherwise agree) at
least seven days prior to the commencement of the meeting in the manner
described in ARTICLE 27.2. No business other than those specified in
the notice may be conducted at the meeting unless all the Directors
unanimously agree.
27.2 A notice may be given to any Director either personally or by sending
it by post or facsimile machine to him at the address supplied by him
to the Company for the giving of such notices. Any such notice, if sent
by post, shall be deemed to have been served or delivered on the day
after the same was put in the post, and in proving such service or
delivery it shall be sufficient to prove that the notice or document
was properly addressed, stamped first class (airmail if overseas) and
put in the post. Any such notice, if sent by facsimile machine, shall
be deemed to have been served or delivered at the time of the
transmission.
27.3 Save where agreed in writing by all the members to the contrary,
questions arising at a Board meeting shall be decided by a majority of
votes. Each "A" and "B" Director (or his alternate) shall be entitled
to three votes each and any Additional Directors shall be entitled to
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one vote each save that if one or more "A" Director(s) or "B"
Director(s) (as the case may be) is absent from such meeting, any "A"
Director or "B" Director or their alternates (as the case may be)
present at such meeting shall be entitled to cast the number of votes
of all the "A" Directors or "B" Directors (as the case may be) not
present at such meeting.
27.4 The quorum for meetings of the Board shall be one "A" Director and one
"B" Director. A person who holds office only as an alternate director
shall, if his appointor is not present, be counted in the quorum. No
meeting of the Board (or any committee thereof) may proceed to business
no transact any business unless a quorum is present at the start of and
through such meeting.
27.5 If and for so long as the number of Directors is reduced below the
quorum prescribed by ARTICLE 27.4, the continuing Directors may act for
the purpose of convening a general meeting of the Company but for no
other purpose.
27.6 All acts done by a meeting of Directors, or of a committee of
Directors, or by a person acting as a Director shall, notwithstanding
that it be afterwards discovered that there was a defect in the
appointment of any Director or that any of them were disqualified from
holding office, or had vacated office, or were not entitled to vote, be
as valid as if every such person had been duly appointed and was
qualified and had continued to be a Director and had been entitled to
vote.
27.7 A resolution in writing signed or approved by letter, telex or
facsimile transmission by all the Directors entitled to receive notice
of a meeting of Directors or of a committee of Directors shall be as
valid and effectual as if it had been passed at a meeting of Directors
or (as the case may be) a committee of Directors duly convened and held
and, when signed or approved as aforesaid, may consist of several
documents in the like form each signed by one or more Directors; but a
resolution signed by an alternate director need not also be signed by
his appointor and, if it is signed by a Director who has appointed an
alternate director, it need not be signed by the alternate director in
that capacity.
27.8 Any director or his alternate may validly participate in a meeting of
the directors through the medium of conference telephone,
video-conferencing equipment or similar form of communication equipment
provided that all persons participating in the meeting are able to hear
and speak to each other throughout the meeting. A person so
participating shall be deemed to be present in person at the meeting
and shall be counted in a quorum and entitled to vote. A resolution
passed at any meeting held in this manner and signed by the Chairman
shall be as valid and effectual as if it had been passed at a meeting
of the Board (or, as the case may be, of that committee) duly convened
and held, notwithstanding that fewer than two directors or alternate
directors are physically present at the same place. Such a meeting
shall be deemed to take place where the largest group of those
participating is assembled, or, if there is no such group, at the
location of the Chairman.
27.9 A Director may vote, at any meeting of the Directors or of any
committee of the Directors, on any resolution, notwithstanding that it
in any way concerns or relates to a matter in which he has, directly or
indirectly, any kind of interest whatsoever, and of he shall vote on
any such resolution as aforesaid his vote shall be counted; and in
relation to any such resolution as aforesaid he shall (whether or not
he shall vote on the same) be taken into account in calculating the
quorum present at the meeting.
28. REMUNERATION AND EXPENSES OF DIRECTORS
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The Directors shall not be entitled to any remuneration or other
benefits or any reimbursement of expenses incurred in the performance
of their duties as a Director except in accordance with the terms of
their service agreement (if any) or unless otherwise agreed by all the
members in writing.
29. SECRETARY
Subject to the provisions of the Act, the Secretary shall be appointed
by the Directors for such term, at such remuneration and upon such
conditions as they may think fit; and any Secretary so appointed may be
removed by them.
30. MINUTES
30.1 The Directors shall cause minutes to be kept (including the names of
the Directors present) of all proceedings at General Meetings, of
meetings of the holders of any class of shares in the Company, of Board
meetings, and of committees of Directors.
30.2 Draft minutes of the meetings referred to in ARTICLE 30.1 shall be
circulated by the Secretary to each Director for approval prior to the
relevant meeting or the next subsequent meeting of the Board.
31. THE SEAL
31.1 If the Company has a seal it shall only be used with the authority of
the Directors or of a committee of Directors. The Directors may
determine who shall sign any instrument to which the seal is affixed
and unless otherwise so determined it shall be signed by a Director and
by the Secretary or a second Director. The obligation under ARTICLE 5
relating to the sealing of share certificates shall apply only if the
Company has a seal.
31.2 The Company may exercise the powers conferred by Section 39 of the Act
with regard to having an official seal for use abroad, and such powers
shall be vested in the Directors.
32. DIVIDENDS
32.1 Subject to the provisions of the Act the Company may by Ordinary
Resolution declare interim or final dividends in accordance with the
respective rights of the members, but no dividend shall exceed the
amount recommended by the Directors.
32.2 Subject to the provisions of the Act, the Directors may approve the
distribution of interim dividends if it appears to them that they are
justified by the profits of the Company available for distribution and
the Shareholders approve such payment.
32.3 Except as otherwise provided by the rights attached to shares, all
dividends shall be declared and paid according to the amounts paid up
on the shares on which the dividend is paid. All dividends shall be
apportioned and paid proportionately to the amounts paid up on the
shares during any portion or portions of the period in respect of which
the dividend is paid; but, if any share is issued on terms providing
that it shall rank for dividend as from a particular date, that share
shall rank for dividend accordingly.
32.4 A General Meeting declaring a dividend may, upon the recommendation of
the Directors, direct that it shall be satisfied wholly or partly by
the distribution of assets and, where any difficulty arises in regard
to the distribution, the Directors may settle the same and in
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particular may issue fractional certificates and fix the value for
distribution of any assets and may determine that cash shall be paid to
any member upon the footing of the value so fixed in order to adjust
the rights of members and may vest any assets in trustees.
32.5 Any dividend or other moneys payable in respect of a share may be paid
by cheque sent by post to the registered address of the person entitled
or, if two or more persons are the holders of the share or are jointly
entitled to it by reason of the death or bankruptcy of the holder, to
the registered address of that one of those persons who is first named
in the register of members or to such person and to such address as the
person or persons entitled may in writing direct. Every cheque shall be
made payable to the order of the person or persons entitled or to such
other person as the person or persons entitled may in writing direct
and payment of the cheque shall be a good discharge to the Company. Any
joint holder or other person jointly entitled to a share as aforesaid
may give receipts for any dividend or other moneys payable in respect
of the share.
32.6 The Directors may deduct from any dividend or other moneys payable to
any member or in respect of a Share any moneys presently payable by
that member to the Company in respect of that Share.
32.7 No dividend or other moneys payable in respect of a share shall bear
interest against the Company unless otherwise provided by the rights
attached to the share.
32.8 Any dividend which has remained unclaimed for twelve years from the
date when it became due for payment shall, if the Directors so resolve,
be forfeited and cease to remain owing by the Company.
33. ACCOUNTS
Each member shall have a right to inspect any accounting records and
other books or documents of the Company.
34. CAPITALISATION OF PROFITS AND RESERVES
34.1 The Directors may, with the sanction of an ordinary resolution of the
Company, capitalise any sum standing to the credit of any of the
Company's reserve accounts (including its share premium account and
capital redemption reserve) or any sum standing to the credit of its
profit and loss account by appropriating such sum to the members in the
proportions in which such sum would have been divisible amongst them
had the same been a distribution of profits by way of dividend.
34.2 The Directors may do all acts and things considered necessary or
expedient to give effect to any such capitalisation, with full power to
the Directors to make such provisions as they think fit for the case of
Shares becoming distributable in fractions (including provisions
whereby the benefit of fractional entitlements accrues to the Company
rather than to the members concerned). The Directors may authorise any
person to enter on behalf of all the members interested into an
agreement with the Company providing for any such capitalisation and
matters incidental thereto and any agreement made under such authority
shall be effective and binding on all concerned.
35. NOTICES
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35.1 Any notice to be given to or by any person pursuant to these Articles
shall be in writing except that a notice calling a meeting of the
Directors need not be in writing.
35.2 The Company may give any notice to a member either personally, by
sending it by post in a prepaid envelope addressed to the member at his
registered address, by sending it to the member by facsimile
transmission or by leaving it at that address. In the case of joint
holders of a Share, all notices shall be given to the joint holder
whose name stands first in the register of members in respect of the
joint holding and notice so given shall be sufficient notice to all the
joint holders.
35.3 A member present, either in person or by proxy, at any meeting of the
Company or of the holders of any class of shares in the Company shall
be deemed to have received notice of the meeting and, where requisite,
of the purposes for which it was called.
35.4 Every person who becomes entitled to a Share shall be bound by any
notice in respect of that Share which, before his name is entered in
the register of members, has been duly given to a person from whom he
derives his title.
35.5 Proof that an envelope containing a notice was properly addressed,
prepaid and posted shall be conclusive evidence that the notice was
given. A notice shall be deemed to be given at the expiration of 48
hours after the envelope containing it was posted except in the case of
a facsimile transmission, where notice shall be deemed to have been
given on receipt by the Company from its facsimile machine of a report
of successful transmission.
35.6 A notice may be given by the Company to the persons entitled to a Share
in consequence of the death or bankruptcy of a member by sending or
delivering it, in any manner authorised by these Articles for the
giving of notice to a member, addressed to them by name, or by the
title of representatives of the deceased, or trustee of the bankrupt or
by any like description at the address, if any, within the United
Kingdom supplied for that purpose by the persons claiming to be so
entitled. Until such an address has been supplied, a notice may be
given in any manner in which it might have been given if the death or
bankruptcy had not occurred.
36. WINDING UP
If the Company is wound up, the liquidator may, with the sanction of an
extraordinary resolution of the Company and other sanction required by
the Act, divide among the members in specie the whole or any part of
the assets of the Company and may, for that purpose, value any assets
and determine how the division shall be carried out as between the
members or different classes of members. The liquidator may, with the
like sanction, vest the whole or any part of the assets in trustees
upon such trusts for the benefit of the members as he with the like
sanction determines, but no member shall be compelled to accept any
assets upon which there is a liability.
37. INDEMNITY
37.1 Every Director or other officer of the Company or the Auditors shall be
indemnified out of the assets of the Company against all losses or
liabilities which he may sustain or incur in or about the execution of
the duties of his office or otherwise in relation thereto including any
liability incurred by him in defending any proceedings whether civil or
criminal, or in connection with any application under Section 144 or
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Section 727 of the Act in which relief is granted to him by the Court,
and no Director or other officer shall be liable for any loss, damage
or misfortune which may happen to or be incurred by the Company in the
execution of the duties of his office or in relation thereto. But this
ARTICLE 37.1 shall only have effect in so far as its provisions are not
avoided by Section 310 of the Act.
37.2 The Directors shall have power to purchase and maintain for any
Director, officer of the Company or the Auditors insurance against any
such liability as is referred to in Section 310(1) of the Act.
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ANNEX B: COMPLETION BOARD RESOLUTION
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FORTDOVE LIMITED (THE "COMPANY")
MINUTES OF A MEETING OF THE BOARD OF DIRECTORS
HELD AT ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
▇▇ FEBRUARY 2000 AT PM
---------------------------------------------
PRESENT:
IN ATTENDANCE:
---------------------------------------------
1. CHAIRMAN
took the chair. The chairman declared that a quorum was
present and that notice of the meeting had been given to all directors
in accordance with the articles of association of the Company.
2. PURPOSE OF MEETING
The chairman reported that the meeting had been convened for the
purpose of considering and, if thought fit, approving (i) the entering
into of a shareholders agreement between ▇▇▇▇ ▇▇▇▇▇▇▇▇ plc ("HRPLC"),
▇▇▇▇ ▇▇▇▇▇▇▇▇ Services Limited ("HRSL"), WTT UK Limited ("WTT"), WT
Technologies Inc. and the Company (the"SHAREHOLDERS AGREEMENT") and
(ii) all actions and the entering into of all documents contemplated by
the Shareholders Agreement.
3. DIRECTORS' INTERESTS
Each of the directors declared his interest, direct or indirect, in the
business to be transacted at the meeting, as required by the articles
of association of the Company, statute or otherwise.
4. EXECUTION OF SHAREHOLDERS AGREEMENT
4.1 An execution copy of the Shareholders Agreement was produced to the
meeting:
4.2 After full and careful consideration, IT WAS UNANIMOUSLY RESOLVED that:
4.2.1 The arrangements reflected in, and the transactions
contemplated by the Shareholders Agreement, were in the best
commercial interests of the Company and accordingly were
approved;
4.2.2 each of the directors be severally authorised to execute the
Shareholders Agreement on behalf of the Company in the form of
the copy produced to the meeting, with any amendments he may
in his absolute discretion approve; and
4.2.3 each director or the secretary be severally authorised to sign
any document and to do any other acts and things as he may in
his or her absolute discretion, consider necessary or
desirable, in connection with the Sharehoders Agreement.
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5. WRITTEN RESOLUTIONS
5.1 There was produced to the meeting a form of written resolutions which
would be effective to pass resolutions to:
5.1.1 reclassify the existing issued ordinary shares of(pound)1 as
an "A" Ordinary Share of(pound)1;
5.1.2 reclassify the 99 unissued but authorised ordinary shares
of(pound)1 each as 49 "A" shares of(pound)1 each and 50 "B"
shares of(pound)1 each;
5.1.3 alter the Company's articles of association; and
5.1.4 change the Company's name to e-TRX Limited.
6. APPROVAL OF WRITTEN RESOLUTIONS
6.1 IT WAS RESOLVED that:
6.1.1 the form of written resolutions be approved; and
6.1.2 the secretary be instructed to submit the form of the written
resolutions to the members for consideration and, if
appropriate, signature.
7. ADJOURNMENT
The meeting was then adjourned for consideration of the form of written
resolutions by or on behalf of all the members. On resumption it was
reported that the special and ordinary resolutions set out in the form
of written resolutions had been passed.
8. ALLOTMENT OF NEW SHARES
8.1 The following application for shares was produced to the meeting:
NAME OF APPLICANT NUMBER AND CLASS OF AMOUNT TO BE PAID
SHARES APPLIED FOR
(POUND)
WTT 1 "B" Ordinary Share of(pound)1 1
8.2 IT WAS RESOLVED that:
8.2.1 one "B" Ordinary Share of(pound)1 each be allotted fully paid
for cash at par to the applicant;
8.2.2 the name of the allottee be entered in the register of members
as the holder of the shares allotted to it; and
8.2.3 a certificate in respect of the shares allotted be executed
and issued to the allottee.
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9. RESIGNATION OF SECRETARY
A letter from ▇▇▇▇▇▇▇▇ Chance Secretaries Limited resigning from the
office of secretary was produced to the meeting. IT WAS RESOLVED that
the resignation be accepted with effect from the close of the meeting
and be recorded in the Company's books.
10. APPOINTMENT OF DIRECTORS AND REPLACEMENT OF SECRETARY
10.1 IT WAS RESOLVED that:
10.1.1 ▇▇▇▇▇ ▇▇▇▇▇▇▇ and N.H. ▇▇▇▇▇ having consented in writing to
act, be appointed directors of the Company with immediate
effect;
10.1.2 ▇▇▇▇▇ ▇▇▇▇▇▇▇, having consented in writing to act, be
appointed secretary of the Company with effect from the close
of the meeting; and
10.1.3 these appointments be recorded in the Company's books.
11. REGISTERED OFFICE
It was reported that the Company had been incorporated with its
registered office at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ and IT WAS
RESOLVED that the registered office be changed to Abbey House, ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇.
12, AUDITORS
IT WAS RESOLVED that Pricewaterhouse Coopers (London) be appointed
auditors of the Company on terms and at a remuneration to be agreed.
13. CHANGE IN ACCOUNTING REFERENCE DATE
IT WAS RESOLVED that the Company's accounting reference date for the
purposes of section 224 of the Act be changed to 31 March in every year
and that the Company's current accounting reference period which would
otherwise end on 30 September 2000 be extended to end on 31 March 2001.
14. TABLING OF ANCILLARY DOCUMENTS
14.1 Execution copies of each of the following documents were produced to
the meeting:
14.1.1 a licence agreement between Technology Licensing Company LLC
and the Company;
14.1.2 a reciprocal software development agreement between the
Company and WorldTravel Technologies LLC ("WTT LLC");
14.1.3 a software support agreement between WTT LLC and the Company;
14.1.4 an Escrow agreement between WTT LLC, TLC and the Company;
14.1.5 a software licence agreement between the Company and HRPLC;
14.1.6 a software development agreement between the Company and
HRPLC;
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14.1.7 a software support agreement between the Company and HRPLC;
14.1.8 a service bureau/outsourcing agreement for online fulfilment
services between the Company and HRPLC;
14.1.9 a service bureau software services agreement between the
Company and HRPLC;
14.1.10 a shared services agreement between the Company and HRPLC;
14.1.11 a licence agreement between HRPLC and the Company;
14.1.12 deed poll constituting (pound)1,250,000 floating rate
unsecured loan notes 2002, such notes to be issued in
accordance with the terms of the Shareholders' Agreement.
(together the "DOCUMENTS")
15. EXECUTION OF ANCILLARY DOCUMENTS
15.1 After full and careful consideration, IT WAS UNANIMOUSLY RESOLVED that:
15.1.1 The arrangements reflected in, and the transactions
contemplated by the Documents, were in the best commercial
interests of the Company and accordingly were approved;
15.1.2 each of the directors be severally authorised to execute the
Documents on behalf of the Company in the form of the copy
produced to the meeting, with any amendments he may in his
absolute discretion approve; and
15.1.3 each director or the secretary be severally authorised to sign
any document and to do any other acts and things as he may in
his or her absolute discretion, consider necessary or
desirable, in connection with the Documents.
16. FILING OF DOCUMENTS
16.1 The secretary was instructed to arrange for the filing of the following
documents with the Registrar of Companies:
16.1.1 notice of change in situation of registered office (form 287);
16.1.2 change of accounting reference date (form 225);
16.1.3 copies of the special resolutions passed by written resolution
today together with a cheque for (pound)10 being the fee for
the proposed change in the Company's name; and
16.1.4 a copy of the articles of association of the Company as
altered, signed by the chairman.
16.1.5 return of allotments (form 88(2)); and
16.1.6 notices of appointments and resignations of directors and
secretary (forms 288a and 288b).
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17. CLOSING OF MEETING
There being no further business, the Chairman declared the meeting
closed.
..........................
Chairman
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ANNEX C: COMPLETION SPECIAL RESOLUTION
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Company No. 3841799
THE COMPANIES ACTS 1985 AND 1989
-----------------------------------------
PRIVATE COMPANY LIMITED BY SHARES
-----------------------------------------
RESOLUTIONS IN WRITING
OF
FORTDOVE LIMITED
We, ▇▇▇▇ ▇▇▇▇▇▇▇▇ Services Limited, being the sole member of the Company who at
the date of these resolutions is entitled to attend and vote at a general
meeting of the Company, RESOLVE, in accordance with section 381A of the
Companies ▇▇▇ ▇▇▇▇, to pass the following as written resolutions:
1. THAT the one existing Ordinary Share of (pound)1 be reclassified as an
"A" Ordinary Share of (pound)1, having the rights set out in the new
articles of association referred to in resolution 4.
2. THAT the 99 unissued but authorised shares of (pound)1 each be
reclassified as 49 "A" ordinary shares of (pound)1 each 50 "B" ordinary
shares of (pound)1, each having the rights set out in the new articles
of association referred to in resolution 4.
3. THAT the name of the Company be changed to e-TRX LIMITED.
4. THAT new articles of association in the form of the annexed draft,
initialled by the chairman for the purpose of identification, be adopted
in substitution for the Company's existing articles of association.
SIGNATURE: __________________________________
FOR AND ON BEHALF OF ▇▇▇▇ ▇▇▇▇▇▇▇▇ SERVICES LIMITED
DATE: __________________________________
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ANNEX D: OBJECTS CLAUSE
NOT USED
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ANNEX E: LOAN NOTE
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98
FORTDOVE LIMITED
(the "COMPANY")
DEED POLL CONSTITUTING
UNSECURED LOAN NOTES 2002
▇▇▇▇▇▇▇▇▇, WILL & ▇▇▇▇▇
▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
TEL: ▇▇▇ ▇▇▇▇ ▇▇▇▇
FAX: ▇▇▇ ▇▇▇▇ ▇▇▇▇
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THIS DEED POLL is made on February 2000
BY
FORTDOVE LIMITED, a company incorporated in England and Wales (registered no.
3841799) whose registered office is at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇(▇▇▇ "COMPANY").
WHEREAS:
In order to evidence the funding of the activities of the Company
provided by the noteholder (the "NOTEHOLDER"), the Company has agreed
to issue Notes to the Noteholder for the term and on the conditions
contained herein.
THIS DEED WITNESSES as follows:
1. INTERPRETATION
1.1 In this Deed:
"BOARD" means the board of directors of the Company from time to time;
"BUSINESS DAY" means a day other than a Saturday or Sunday on which clearing banks
are open for business in London;
"CONDITIONS" means the conditions of the Notes in the form set out in the
Schedule (as they may be modified in accordance with the provisions
of this Deed);
"MATURITY DATE" means 31 March 2002 (or, if such day is not a business day, the next
business day);
"NOTES" means the floating rate unsecured loan Notes 2002 originally
constituted by this Deed or, as the case may be, the amount thereof for
the time being issued and outstanding;
"PRINCIPAL AMOUNT means, in relation to a Note, the principal amount of the Note at
OWING" par less any deductions made pursuant to Condition 3 upon redemption
of the Note;
"RATE" means the bank base rate of Barclays Bank plc from time to time; and
"REGISTER" means the register of Notes referred to in Clause 5.
1.2 In this Deed, reference to:
1.2.1 a "SUBSIDIARY" or "HOLDING COMPANY" is to be construed in
accordance with section 736 of the Companies ▇▇▇ ▇▇▇▇;
1.2.2 a statutory provision includes the statutory provision as
modified or re-enacted or both before the date of this Deed
and any subordinate legislation made under the statutory
provision before the date of this Deed;
1.2.3 a person includes a body corporate, association or
partnership;
1.2.4 a clause or schedule, unless the context otherwise requires,
is a reference to a clause or schedule of or to this Deed; and
1.2.5 a condition is to one of the Conditions.
1.3 The headings in this Deed do not affect its interpretation.
2. CONSTITUTION OF THE NOTES
2.1 The Notes are called(pound)1,250,000 Floating Rate Unsecured Loan Notes
2002.
2.2 The Board may issue the Notes to the Noteholder at such times and on
such conditions as provided for in this Deed and in the Conditions.
2.3 Notes may be issued in the amount of(pound)25,000 or an integral
multiple thereof.
2.4 The principal amount of the Notes is limited to(pound)1,250,000 (THE
"MAXIMUM PRINCIPAL AMount").
2.5 The Notes shall be held subject to and with the benefit of the
Conditions, which shall be binding on the Company and on the
Noteholder, and which shall have effect in the same manner as if they
were set out in this Deed.
3. REDEMPTION AND INTEREST
3.1 As and when a Note is due to be redeemed in accordance with this Deed
and the Conditions, the Company shall pay to the Noteholder the
Principal Amount Owing of the Note together with accrued interest
(after deduction of tax, if any) up to but excluding the date of
redemption.
3.2 Until a Note is redeemed in accordance with this Deed and the
Conditions, the Company shall pay to the Noteholder interest (after
deduction of tax, if any) on the principal amount of the Note in
accordance with the Conditions.
4. CERTIFICATES
4.1 The Noteholder is entitled without charge to a certificate
substantially in the form of the certificate in the Schedule upon the
issue of a Note.
4.2 Each certificate shall be substantially in the form set out in the
Schedule, shall have the Conditions endorsed on it and shall be
executed by the Company in accordance with its articles of association
or in such other manner as may be permitted by statute.
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4.3 Upon redemption of part of the principal amount of a Note the relevant
certificate shall be cancelled and a new certificate for the balance of
the principal amount shall be issued in lieu without charge.
5. REGISTER
5.1 The Company shall keep a Register of Notes issued at its registered
office and enter in it:
5.1.1 The date of issue of each Note;
5.1.2 The principal amount of each Note;
5.1.3 The serial number of each certificate issued; and
5.1.4 The date of redemption of each Note.
5.2 The Company shall enter in the Register any change to the information
specified in Clause 5.1.
5.3 The Noteholder may inspect the Register at all reasonable times during
office hours and may request, and be provided with a copy of the
Register or any part of it without charge. The Register may be closed
during such period or periods not exceeding in whole 30 days in any
year.
6. OBLIGATIONS
6.1 The Company shall comply in all respects with the provisions of this
Deed and the provisions of the Schedule.
6.2 This Deed is for the benefit of the Noteholder and the Noteholder may
▇▇▇ for compliance by the Company with its obligations under this Deed
in relation to Notes held by the Noteholder.
7. AMENDMENT OF THE DEED
7.1 The Company may amend this Deed from time to time by deed expressed to
be supplemental to this Deed without the written consent of the
Noteholder if such change would not (in the opinion of the Board) be
prejudicial to the interests of the Noteholder, or if such amendment is
of a formal, minor or technical nature, or if it is made to correct a
manifest error in its terms.
7.2 The Company shall endorse on this Deed a memorandum of execution of any
deed supplemental to this Deed.
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8. GOVERNING LAW AND JURISDICTION
8.1 This Deed is governed by English Law.
8.2 The courts of England shall have jurisdiction to hear and decide any
suit, action or proceedings, and to settle any disputes which may arise
out of or in connection with this Deed or the Notes (respectively,
"PROCEEDINGS" and "DISPUTES") and, for these purposes, the Company and
the Noteholder irrevocably submit to the jurisdiction of the courts of
England.
8.3 The Company and the Noteholder irrevocably waive any objection which
they might at any time have to the courts of England being nominated as
the forum to hear and decide any Proceedings and to settle any Disputes
and agree not to claim that the courts of England are not a convenient
or appropriate forum.
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SCHEDULE - CERTIFICATE AND CONDITIONS
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103
Certificate No. [ ] Amount(POUND)[ ]
FORTDOVE LIMITED (REGISTERED NO. 3841799)
(Incorporated in England and Wales under the Companies Act 1985)
----------------------
(POUND)1,250,000 FLOATING RATE UNSECURED LOAN NOTES 2002
Issued pursuant to the Memorandum and Articles of Fortdove Limited (the
"COMPANY") and created by resolution of the Board of Directors of the Company
passed on [ ].
THIS IS TO CERTIFY THAT [ ] is the holder of [ ] Unsecured Loan Notes 2002 of
the Company (the "NOTES") which are constituted by a Deed Poll (the "DEED") made
by the Company and dated [ ] February 2000. The Notes are issued with the
benefit of and subject to the provisions contained in the Deed and the
Conditions endorsed hereon.
Interest (after deduction of tax, if any) is payable on the Notes represented by
this certificate as specified in Condition 3. The Notes are redeemable in
accordance with Condition 4.
A copy of the Deed is available for inspection at the Company's registered
office.
The Notes are governed by English law.
Issued on [ ]
Executed as a Deed by: )
FORTDOVE LIMITED ) ....................................
Director's Signature
....................................
Director's name
....................................
Director/Secretary's signature
....................................
Director/secretary's name
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CONDITIONS
1. INTERPRETATION
Words and expressions defined in the Deed unless the context otherwise requires
have the same meanings in these Conditions.
2. STATUS OF NOTE
The Note constitutes direct, general and unconditional obligations of the
Company which at all times rank at least pari passu with all other future,
unsecured obligations of the Company, except for those obligations preferred by
law.
3. PAYMENT OF PRINCIPAL
3.1 Unless previously redeemed, the Company will pay to the Noteholder the
Principal Amount Owing together with interest calculated in accordance
with Condition 4 on the Maturity Date.
3.2 Any amounts payable under this Condition 3 are subject to any
deductions or withholdings for or on account of any tax, as may be
required by law.
4. INTEREST
4.1 Interest on a Note is payable on the date of redemption of the Note,
which date shall be no later than the Maturity Date.
4.2 The annual rate of interest on a Note is the Rate plus one (1) per
cent.
4.3 Interest is calculated on the basis of a 365 day year and actual days
elapsed.
4.4 Interest ceases to accrue on a Note as and from the date of redemption
of the Note.
4.5 The Company shall pay interest in accordance with Condition 4.1 (after
deduction of tax, if any) to the Noteholder at the close of business on
the day specified in Condition 4.1.
4.6 Any amounts payable under this Condition 4 are subject to any
deductions or withholdings for or on account of any tax, as may be
required by law.
5. REDEMPTION
5.1 Notwithstanding any other provision of these Conditions, the Company
may at any time before the Maturity Date redeem a Note by giving not
less than 30 days' notice of such redemption to the Noteholder and by
paying to the Noteholder the Principal Amount Owing together with
accrued interest (after deduction of tax, if any) up to but excluding
that date.
5.2 The Notes become immediately redeemable together with accrued interest
(after deduction of tax, if any) up to but excluding the date of
redemption on the occurrence of any of the following events:
5.2.1 the passing by the Company of an effective resolution for its
winding up or the making by a court of competent jurisdiction
of an order for the winding up of the Company or the
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dissolution of the Company otherwise than for the purpose of a
solvent amalgamation or reconstruction on terms previously
sanctioned by the Noteholder;
5.2.2 the making of an administration order in relation to the
Company or the appointment of a receiver over, or the taking
possession or sale by an encumbrancer of, any of the Company's
assets; or
5.2.3 the making by the Company of an arrangement or composition
with its creditors generally or the making by the Company of
an application to a court of competent jurisdiction for
protection of its creditors generally.
6. SET-OFF
In the event that any payments of interest or principal become due and
payable to the Noteholder at a time when there is a claim against the
Noteholder by the Company, the Company shall be entitled to pay any
such interest or principal due into a joint interest-bearing deposit
account in the joint names of the Noteholder's solicitors and the
Company's solicitors (the "ESCROW ACCOUNT") pending resolution of such
claim. Upon resolution of such claim the Company shall be entitled to
payment from the Escrow Account of an amount which does not exceed the
amount due to it from the Noteholder in relation to the resolved claim,
with the balance standing to the credit of the Escrow Account being
payable to the Noteholder. Interest accrued in the Escrow Account shall
follow capital. This Condition is without prejudice to the Noteholder's
right to accrue and receive interest on Notes.
7. DEALINGS
No application has been or will be made to any stock exchange for the
Notes to be listed or dealt in.
8. PROCEDURE ON REDEMPTION AND IN RELATION TO UNCLAIMED MONEYS
8.1 No later than the due date for redemption of each Note, the Noteholder
shall deliver to the Company at its registered address (or at another
address of which notice is given for that purpose) the certificate for
the Note for cancellation. Upon delivery, and upon provision of a
receipt (if the Company so requires) for the amount payable in respect
of the Note, the Company will pay to the Noteholder such amount.
8.2 The Company may invest or otherwise use all unclaimed amounts in
respect of a Note until claimed in accordance with Condition 8.1. The
payment of an unclaimed amount into a bank account does not constitute
the Company a trustee in respect of it. The Company is not responsible
for the safe custody of the amount or related interest and the Company
is, and the Noteholder is not, entitled to interest accrued on the
amount. Amounts of interest on a Note which remain unclaimed by the
Noteholder for a period of five years and amounts of principal which
remain unclaimed for a period of ten years, in each case from the date
on which the relevant payment first becomes due, revert to the Company,
and the Noteholder ceases to be entitled to the amounts.
9. NOTICES
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9.1 A notice to be given to or by the Noteholder under the Deed or these
Conditions shall be in writing.
9.2 A notice or other document may be given to the Noteholder by the
Company either personally or by sending it by post in a pre-paid
envelope addressed to the Noteholder at its registered address, by
leaving it at that address (or at another address of which notice is
given for that purpose) in an envelope addressed to the Noteholder, or
by sending it by facsimile to the Noteholder at the facsimile number of
the Noteholder of which notice is given for that purpose.
9.3 A notice or other document addressed to the Noteholder at its
registered address or address for service in the United Kingdom is, if
sent by post, deemed to be given or delivered within 24 hours after it
was posted if pre-paid as first class post and within 48 hours after it
was posted if pre-paid as second class post, and in proving service it
is sufficient to prove that the envelope containing the notice or
document was properly addressed, pre-paid and posted. A notice or
document left at a registered address or address for service in the
United Kingdom is deemed to be given or delivered on the day it is
left. A notice or document sent by facsimile is deemed to be given or
delivered upon production of a record of successful transmission by the
sender's facsimile machine.
10. PAYMENT OF AMOUNTS IN RESPECT OF NOTES
10.1 The Company may pay principal amounts, interest or any other amount
payable in respect of a Note in cash or by cheque, warrant or money
order, by a bank or other funds transfer system, or by such other
method as the Noteholder may in writing direct. The Noteholder may give
an effective receipt for principal amounts, interest or any other
amount paid in respect of a Note.
10.2 Every cheque, warrant or order is sent at the risk of the person
entitled to the payment and shall be made payable to the order of the
person or persons so entitled. The payment of the cheque, warrant or
order is a good discharge for the Company. If payment is made by a bank
or other funds transfer, or by another method at the direction of the
Noteholder, the Company is not responsible for amounts lost or delayed
in the course of the transfer or in carrying out those directions.
10.3 If the due date for payment of an amount in respect of a Note is not a
business day, the Noteholder is not entitled to payment of the amount
until the next following business day and is not entitled to any
further interest or other payment as a result of the delay in payment.
11. TRUSTS NOT RECOGNISED
Except as ordered by a court of competent jurisdiction or as required
by law, the Company shall not recognise the Noteholder as holding a
Note on trust and is not bound by or otherwise compelled to recognise
(even if it has notice of it) an equitable, contingent, future, partial
or other claim to or interest in a Note other than an absolute right in
the Noteholder to the whole of the Note.
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12. TRANSFERS
The Noteholder may not transfer a Note and is deemed to be the holder
of a Note until the Maturity Date unless redeemed by the Company before
that date.
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IN WITNESS WHEREOF this Deed has been executed by the Company and is hereby
delivered on the date first above written.
Executed as a Deed by: )
FORTDOVE LIMITED ) ....................................
Director's Signature
....................................
Director's name
....................................
Director/Secretary's signature
....................................
Director/secretary's name
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ANNEX F: WTT LICENCE
107
110
ANNEX F: WTT LICENCE
NOT USED
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111
ANNEX G: WTT LOAN NOTE
NOT USED
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112
ANNEX H: PRODUCTS CREATED BY ▇▇▇▇▇
▇▇▇
▇▇▇
▇▇ TRAVEL RELATED PRODUCTS
HARDWARE CRS SOFTWARE
1. E-Ticket Reclaim PC/AS400 Galileo Visual Basic, RPG, DB2
2. Visa Checker PC Galileo Galileo Focalpoint, Visual Basic
3. Central Air Ticket Refund AS400 Galileo DB2, RPG
DESCRIPTION
1) E-RECLAIM
Application that checks for eligibility of e-tickets for refunds. VB
code interrogates DB2 database of e-tickets issued with travel date of
more than one month ago and then checks ticket status on Galileo.
2) VISA CHECKER
VB Application that checks bookings queued to it. Compares nationality
of travellers against countries being visited and advises if visa is
required.
3) CENTRAL AIR REFUNDS
Produces computer generated refund notices for any air refund required.
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ANNEX I: BUSINESS CONTEMPLATED BY THE SHAREHOLDERS
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WTT AND ITS ASSOCIATES
E-COMMERCE SOLUTIONS
WTPI's E-Commerce Solutions group is charged with the design, development and
operation of WTP's intranet, Internet and all E-Commerce products. It will be
staffed with web designers, software developers, website managers, marketing and
advertising specialists, content editors and other Internet experts.
In the year 2000, the E-Commerce Solutions Group will focus on the following
five key web and E-Commerce projects:
WORLDTRAVEL PARTNERS CORPORATE INTRANET
The first project for WTPI is the development of a corporate intranet, a
powerful inter-company web site for sharing and disseminating information. The
site will offer a global employee directory, document repository, bulletin
boards, divisional and departmental sections, news and information, travel
features and articles, employment listings, and many other useful sections. The
intranet will be introduced in March 2000.
WORLDTRAVEL PARTNERS CORPORATE WEBSITE
The WTPI team is redesigning the WTP corporate Internet site
(▇▇▇.▇▇▇▇▇▇▇▇▇▇▇.▇▇▇), the external web site for sharing information about our
company. The site will get an updated, high-tech look-and-feel and will be
integrated with our intranet site to share important information, such as
employment listings, WTP product and service information and travel news. The
WTP Internet site will be re-launched in the March/April 2000 timeframe.
WORLDTRAVELNET CORPORATE TRAVEL MANAGEMENT ENVIRONMENT
WTPI will be developing WorldTravelNet (WTN), a "next generation" business
travel tool for our travelers. WorldTravelNet will provide travel services
directly to our travelers including expense reporting, travel news and features
and customized vacations. WTN will be designed to integrate with mobile devices,
such as personal digital assistants and cellular phones, so the traveler can
take advantage of a host of en route services. In addition, the product will be
connected with our corporate booking engine, so they can make travel plans from
virtually anywhere. WTPI is targeting July 2000 for completion.
WORLDTRAVELVACATIONS
The team will be redesigning and re-launching ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ with an
upscale look-and-feel and many advanced capabilities. The new site will have
loads of valuable vacation information to produce more qualified leads. It also
will be outfitted with a "vacation shopper" graphical comparison tool, which
will allow visitors to compare and choose vacations. The re-launch of
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ is targeted for August 2000.
SMALL/UNMANAGED BUSINESS TRAVEL MANAGEMENT SYSTEM
Another project on the drawing board is an online travel management tool for
small and/or unmanaged business--currently an untapped market for WTP. The
proposed system will use technology developed by Travel Technologies Group, as
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well as the capabilities built into WTN. It will include client self-management
and setup functionality, along with a new simplified financial model.
TRAVELER LOGISTICS
In addition, WTPI's Traveler Logistics group will be implementing enhanced
traveler services, such as concierge services, traveler advocacy services, a
frequent traveler program, a 24-hour E-Commerce help desk and continued
enhancements to our corporate on-line fulfillment services.
▇▇▇▇ AND ITS ASSOCIATES
E-COMMERCE SOLUTIONS
▇▇▇▇ Robinson's E-Commerce Solutions group is charged with the design,
development and operation of HR's intranet, Internet and all E-Commerce
products. It will be staffed with web designers, software developers, website
managers, marketing and advertising specialists, content editors and other
Internet experts.
In the year 2000 and onwards HR E-Commerce will focus on the following key web
and E-Commerce projects:
▇▇▇▇ ▇▇▇▇▇▇▇▇ Corporate Intranet
HR is developing a corporate intranet, a powerful inter-company web site for
sharing and disseminating information. The site will offer a global employee
directory, document repository, bulletin boards, divisional and departmental
sections, news and information, travel features and articles, employment
listings, and many other useful sections. The first phase is now active.
▇▇▇▇ ▇▇▇▇▇▇▇▇ Corporate Website
The HR team is redesigning the HR corporate Internet site
(▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇), and all associated sites sharing information about our
company. The site will get an updated, high-tech look-and-feel and will be
integrated with our intranet site to share important information, such as
employment listings, HR product and service information and travel news. All HR
companies will have the websites developed through HR e-Commerce.
BTI Travel Portal
HR is developing a Corporate Travel Portal, a business travel tool for our
travelers. HR will provide travel services directly to our travelers including
expense reporting, travel news and links to non-bookable services. HR will be
designed to integrate with mobile devices, such as personal digital assistants
and cellular phones, so the traveler can take advantage of a host of en route
services. In addition, the product is connected with our corporate booking
engine, so they can make travel plans from virtually anywhere.
Your Leisure Online
Available as a service for corporate clients to book leisure vacations.
Business Travel Direct Online
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HR is creating an online travel management tool for small and/or unmanaged
business. The proposed system will use technology developed by HR and NewCo as
well as the capabilities built into BTI Travel Portal. The site will also offer
the HR services such as healthcare, and purchasing clubs.
In addition, ▇▇▇▇ ▇▇▇▇▇▇▇▇ Travel companies will be implementing enhanced
traveler services, such as concierge services, traveler advocacy services, a
frequent traveler program, a 24-hour E-Commerce help desk and continued
enhancements to our corporate on-line fulfillment services.
In addition to the above ▇▇▇▇ ▇▇▇▇▇▇▇▇ E-Commerce will continue to develop
products and solutions for all ▇▇▇▇ ▇▇▇▇▇▇▇▇ companies.
Others
1. Portal business and fulfillment in the Health & Financial Services
sectors.
2. Development and selling of products to support th business in (1)
above.
3. Fulfillment of the following travel Portal sites:
(a) ▇▇▇▇▇▇▇▇.▇▇▇
(b) Hotel Chain Fulfillment (Rainbow Hotels)
(c) Any portal where service commencement must be prior to supply
of the OFS prodcut suite running without reliance on Tbase.
(d) Hotel Bank
(e) web Travel Services (FSS)
4. Delivery of Third Party services for HR Travel Portal sites such as
Mapping products, Passport & Visa Policy, and Destination Weather data.
5. Sabre QCS deployment and support of BTS
6. ICSAT backend product deployment
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AS WITNESS the hands of the duly authorised representatives of the parties the
day and year first above written.
Signed by )
for and on behalf of )
▇▇▇▇ ▇▇▇▇▇▇▇▇ plc ) ..................................
Signed by )
for and on behalf of )
▇▇▇▇ ▇▇▇▇▇▇▇▇ SERVICES LTD ) ..................................
Signed by )
for and on behalf of )
WTT UK LIMITED ) ..................................
Signed by )
for and on behalf of )
WT TECHNOLOGIES, INC ) ..................................
Signed by )
for and on behalf of )
FORTDOVE LIMITED ) ..................................
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