COOPERATION AGREEMENT
EXECUTION VERSION
Dated as of June 12, 2023
by and between
NORTHGATE TELECOMMUNICATIONS PLC
a Delaware corporation
and
GREYSTONE CAPITAL PARTNERS LP
a Delaware limited partnership
COOPERATION AGREEMENT
This COOPERATION AGREEMENT (this "Agreement") is entered into as of June 12, 2023 (the "Effective Date"), by and between Northgate Telecommunications PLC, a Delaware corporation (the "Company" or "Northgate"), and Greystone Capital Partners LP, a Delaware limited partnership ("Greystone" or the "Investor"). The Company and Greystone are sometimes referred to herein individually as a "Party" and collectively as the "Parties."
This Agreement constitutes a definitive, binding cooperation agreement between the Parties, setting forth the terms and conditions upon which the Parties have agreed to resolve certain matters, as more fully described herein.
RECITALS
WHEREAS, Northgate Telecommunications PLC is a public limited company incorporated in the State of Delaware, with its principal executive offices located at 45 Broadwick Street, London W1F 0DB, United Kingdom, and its shares of common stock, par value $0.01 per share, are listed on the New York Stock Exchange (the "NYSE") under the ticker symbol "NTP";
WHEREAS, as of the date hereof, the Company has 412,000,000 shares of common stock issued and outstanding;
WHEREAS, Greystone Capital Partners LP is a Delaware limited partnership with its principal place of business at 590 Madison Avenue, 34th Floor, New York, New York 10022, whose sole general partner is Greystone Capital Management LLC, a Delaware limited liability company;
WHEREAS, as of the date hereof, Greystone Beneficially Owns (as defined herein) 28,016,000 shares of common stock of the Company, representing approximately 6.8% of the outstanding shares of common stock of the Company (calculated as 28,016,000 shares divided by 412,000,000 outstanding shares);
WHEREAS, on February 14, 2023, Greystone filed a Schedule 13D with the U.S. Securities and Exchange Commission (the "SEC") under SEC file number SC 13D/005-91482, disclosing its beneficial ownership position in the Company and its intentions with respect to the Company;
WHEREAS, on February 22, 2023, Greystone published a public letter addressed to the Board of Directors of the Company (the "Board") setting forth certain proposals and demands relating to, among other things, the strategic direction of the Company, capital allocation, and board composition;
WHEREAS, on March 8, 2023, Greystone filed an advance notice of intention to nominate two director candidates — Catherine "Kate" Sinclair-Moreau and marshall Henning — for election at the Company's 2023 Annual General Meeting of Stockholders, which was originally scheduled for July 12, 2023;
WHEREAS, following the filing of such advance notice, the Parties have engaged in extensive good-faith negotiations regarding the matters raised by Greystone and desire to enter into this Agreement to resolve such matters on the terms and conditions set forth herein;
WHEREAS, the Board, upon the recommendation of its advisors, including Esterline Partners LLC (the Company's financial advisor) and Hargrove Advisory Group LLC (the Company's proxy solicitation advisor), and based upon the advice of its outside legal counsel, Calderwood & Harkness LLP, has determined that entering into this Agreement is advisable and in the best interests of the Company and its stockholders; and
WHEREAS, the Board has approved the execution and delivery of this Agreement and the performance of the Company's obligations hereunder.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 — Definitions.
As used in this Agreement, the following terms shall have the meanings set forth below:
"Affiliate" means, with respect to any person, any other person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such person, as such terms are used in and construed under Rule 12b-2 promulgated under the Exchange Act. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by," and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.
"Agreement" means this Cooperation Agreement, dated as of June 12, 2023, by and between the Company and Greystone, including all exhibits and schedules hereto, as the same may be amended, supplemented, or otherwise modified from time to time in accordance with the terms hereof.
"Applicable Law" means, with respect to any person, all applicable provisions of (a) constitutions, treaties, statutes, laws (including the common law), rules, regulations, decrees, ordinances, codes, proclamations, declarations, or orders of any governmental authority, including the laws of the State of Delaware and the federal securities laws of the United States, (b) any consents or approvals of any governmental authority, and (c) any orders, decisions, advisory or interpretive opinions, injunctions, judgments, awards, decrees of, or agreements with, any governmental authority, in each case that are applicable to such person or any of its respective properties, assets, officers, agents, employees, or activities, including, without limitation, the rules and listing standards of the NYSE.
"Beneficial Owner" and "Beneficially Own" and similar terms have the meanings set forth in Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in effect on the date hereof, and the term "Beneficial Ownership" shall have a corresponding meaning. For purposes of this Agreement, a person shall be deemed to Beneficially Own any securities that such person has the right to acquire, whether or not such right is exercisable immediately or only after the passage of time.
"Board" means the Board of Directors of the Company as constituted from time to time.
"Bylaws" means the Amended and Restated Bylaws of the Company, as last amended on November 3, 2022, as the same may be further amended, restated, supplemented, or otherwise modified from time to time in accordance with their terms, the Certificate of Incorporation, and Applicable Law.
"Certificate of Incorporation" means the Amended and Restated Certificate of Incorporation of the Company, as last amended on May 14, 2021, as the same may be further amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms and Applicable Law.
"Change of Control" means (a) any merger, consolidation, tender offer, exchange offer, business combination, or similar transaction resulting in a person or Group acquiring, directly or indirectly, Beneficial Ownership of more than 50% of the outstanding voting securities of the Company, (b) any sale, lease, exchange, transfer, or other disposition, in one transaction or a series of related transactions, of all or substantially all of the consolidated assets of the Company and its subsidiaries, taken as a whole, to any person or Group (other than a wholly-owned subsidiary of the Company), or (c) the adoption by the Board of a plan of liquidation or dissolution of the Company.
"Company" or "Northgate" means Northgate Telecommunications PLC, a Delaware corporation, with its shares of common stock listed on the NYSE under the ticker symbol "NTP" (SEC CIK: 0001847263; EIN: 84-3291057; Delaware incorporation file number: 5738291), and its successors and assigns.
"Cooperation Agreement" means this Agreement.
"Designee" means Catherine "Kate" Sinclair-Moreau, in her capacity as the Greystone-designated director appointed to the Board pursuant to Section 2.1 of this Agreement, or any replacement director appointed in accordance with Section 2.6.
"Enterprise Software Division" or "ESD" means the enterprise software and software-as-a-service ("SaaS") business segment of the Company, as reported in the Company's periodic filings with the SEC, which contributed approximately $1.82 billion of the Company's $6.38 billion total consolidated revenue for the fiscal year ended December 31, 2022, representing approximately 28.5% of total consolidated revenue.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder, in each case as in effect from time to time.
"Extraordinary Transaction" means any merger, acquisition, consolidation, business combination, tender offer, exchange offer, recapitalization, restructuring, disposition (including any sale, lease, exchange, transfer, license, or other disposition), spin-off, split-off, or similar transaction involving the Company or any of its subsidiaries in which the aggregate consideration payable or receivable (including any assumption of liabilities, earn-out payments, or other contingent consideration) exceeds 25% of the Company's market capitalization, as measured by the volume-weighted average closing price of the Company's common stock on the NYSE for the 30 consecutive trading days immediately preceding the date of the first public announcement of such transaction, multiplied by the number of Outstanding Shares as of such date.
"Group" means a "group" as such term is defined in Section 13(d)(3) of the Exchange Act.
"Greystone" or "Investor" means Greystone Capital Partners LP, a Delaware limited partnership (EIN: 83-2674510), together with Greystone Capital Management LLC, a Delaware limited liability company, its sole general partner, and their respective controlled Affiliates.
"Greystone Parties" means, collectively, Greystone Capital Partners LP, Greystone Capital Management LLC, and their respective directors, officers, partners, members, employees, agents, and controlled Affiliates, in each case acting in their capacity as such.
"New Director" means Catherine "Kate" Sinclair-Moreau.
"NTP Shares" means shares of common stock, par value $0.01 per share, of the Company.
"Outstanding Shares" means, as of any date of determination, the total number of issued and outstanding NTP Shares as reported in the Company's most recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K filed with the SEC, or as otherwise publicly disclosed by the Company.
"Parties" means the Company and Greystone, collectively; "Party" means either one individually.
"SEC" means the United States Securities and Exchange Commission.
"Standstill Period" means the period commencing on the date of this Agreement (June 12, 2023) and ending at 11:59 p.m. (Eastern Time) on the date that is 30 calendar days prior to the last date on which a stockholder may deliver an advance notice of intention to nominate director candidates for the Company's 2025 Annual General Meeting of Stockholders, as determined pursuant to the advance notice provisions set forth in the Bylaws (or any successor provision thereto).
"Strategic Review" means the strategic review of the Enterprise Software Division to be conducted by the Board with the assistance of the Company's financial advisor, as described in Section 4.1 of this Agreement.
"Technology & Strategy Committee" means the Technology & Strategy Committee of the Board, as constituted from time to time.
"Transfer Agent" means Pinnacle Trust Company, N.A., the transfer agent and registrar for NTP Shares, with offices at 6201 15th Avenue, Brooklyn, New York 11219, or any successor transfer agent appointed by the Company.
Section 1.2 — Other Definitional Provisions.
Terms defined in the singular shall have a corresponding meaning when used in the plural and vice versa. As used in this Agreement, the words "herein," "hereof," "hereto," "hereunder," and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All references in this Agreement to "Sections," "Articles," "Exhibits," and "Schedules" shall be deemed to refer to Sections and Articles of, and Exhibits and Schedules to, this Agreement. The word "including" (and words of similar import) shall mean "including, without limitation." All references to "days" shall mean calendar days unless otherwise specified. The word "person" means an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, governmental authority, or other entity.
ARTICLE II — BOARD MATTERS
Section 2.1 — Board Expansion and Appointment of New Director.
(a) Effective as of the execution of this Agreement, the Board shall take all actions necessary to expand the size of the Board from 11 directors to 12 directors and to appoint Catherine "Kate" Sinclair-Moreau as a director of the Company to fill the newly created directorship resulting from such expansion. Ms. Sinclair-Moreau shall be classified as a Class II director, with a term expiring at the Company's 2025 Annual General Meeting of Stockholders. Ms. Sinclair-Moreau's biographical information is set forth in Exhibit C attached hereto.
(b) Ms. Sinclair-Moreau (age 48) is an independent director who satisfies the independence requirements of Section 303A of the NYSE Listed Company Manual and Rule 10A-3 under the Exchange Act. Ms. Sinclair-Moreau formerly served as Chief Operating Officer of Ridgeline Networks Inc., a position she held from 2016 to 2021, and currently serves as an independent director of Brindoval Data Holdings Corp. (NYSE: CDHC) and Arden Communications Group Inc. (NASDAQ: ACGI).
(c) From and after the date of her appointment, Ms. Sinclair-Moreau shall be subject to, and shall comply with, all policies, procedures, codes of conduct, corporate governance guidelines, confidentiality obligations, stock ownership guidelines, insider trading policies, related-person transaction policies, and other requirements applicable to non-employee directors of the Company generally, including but not limited to the Company's Code of Business Conduct and Ethics (as adopted by the Board on March 15, 2019, and as amended from time to time), the Company's Corporate Governance Guidelines (as adopted by the Board on June 10, 2020, and as amended from time to time), and any director indemnification agreement in the form customarily entered into between the Company and its non-employee directors.
(d) The Company shall enter into a standard form of director indemnification agreement with Ms. Sinclair-Moreau on terms no less favorable than those provided to other non-employee directors of the Company, and Ms. Sinclair-Moreau shall be entitled to the same compensation, benefits, equity awards, expense reimbursement, and insurance coverage as are made available to all other non-employee directors of the Company generally.
Section 2.2 — Committee Appointment.
Promptly following her appointment to the Board (and in any event within five business days following the date hereof), Ms. Sinclair-Moreau shall be appointed to the Technology & Strategy Committee of the Board, which is currently chaired by Margaret Liu. Ms. Sinclair-Moreau shall serve on the Technology & Strategy Committee for so long as she remains a director of the Company, unless the Parties mutually agree otherwise or unless the Board determines, in its reasonable discretion after consultation with Greystone, that a different committee assignment would be more appropriate in light of the then-current committee composition and the Board's assessment of the Company's needs.
Section 2.3 — Withdrawal of Greystone Nominee.
(a) Effective upon execution of this Agreement, Greystone hereby irrevocably withdraws its nomination of marshall Henning (age 55, former Chief Financial Officer of Lakeshore Broadband Corp.) as a director nominee for the Company's 2023 Annual General Meeting of Stockholders, originally scheduled for July 12, 2023. Such withdrawal shall be irrevocable and shall be effective with respect to the 2023 Annual General Meeting and any adjournment, postponement, or rescheduling thereof.
(b) Promptly following execution of this Agreement (and in any event within two business days following the date hereof), Greystone shall deliver written notice of such withdrawal, in the form set forth in Exhibit B attached hereto, to the Company's Corporate Secretary, Priya Nandakumar, at the Company's principal executive offices at 45 Broadwick Street, London W1F 0DB, United Kingdom, or by electronic transmission to such email address as the Company's Corporate Secretary may designate in writing.
(c) Greystone acknowledges and agrees that the nomination of Catherine "Kate" Sinclair-Moreau previously made by Greystone in connection with the advance notice delivered on March 8, 2023 shall also be deemed withdrawn with respect to the 2023 Annual General Meeting in light of her appointment to the Board pursuant to Section 2.1 hereof.
Section 2.4 — 2025 AGM Slate Commitment.
During the Standstill Period, the Company shall include Ms. Sinclair-Moreau (or any replacement director appointed in accordance with Section 2.6) on its slate of director nominees recommended by the Board for election at the Company's 2025 Annual General Meeting of Stockholders, and the Board shall recommend that stockholders vote in favor of her election, subject to (a) her willingness to serve as a director, (b) her continued satisfaction of applicable independence requirements under the NYSE Listed Company Manual and Rule 10A-3 under the Exchange Act, and (c) her continued compliance with the Company's corporate governance guidelines and other applicable policies. The Company shall use the same level of effort in support of the election of Ms. Sinclair-Moreau as it uses for the election of the other Company-nominated directors at such meeting, including through the engagement of the Company's proxy solicitation advisor.
Section 2.5 — Board Size Cap.
During the Standstill Period, the Company shall not increase the size of the Board beyond 12 directors without the prior written consent of Greystone, which consent shall not be unreasonably withheld, conditioned, or delayed. For the avoidance of doubt, this Section 2.5 shall not restrict the Board from reducing the size of the Board below 12 directors, provided that any such reduction does not result in the removal of Ms. Sinclair-Moreau (or any replacement director appointed in accordance with Section 2.6) from the Board. Nothing in this Section 2.5 shall restrict the Board's authority to fill any vacancy on the Board arising from the death, disability, resignation, or removal of any director other than the Designee.
Section 2.6 — Replacement of New Director.
(a) If Ms. Sinclair-Moreau ceases to serve as a director of the Company for any reason (including death, disability, resignation, or removal) other than the expiration of her term at the 2025 Annual General Meeting of Stockholders or the termination of this Agreement in accordance with its terms, the Company and Greystone shall cooperate in good faith to identify and agree upon a mutually acceptable replacement director (a "Replacement Director"), who shall be appointed to the Board within 30 calendar days following the date on which Ms. Sinclair-Moreau ceased to serve as a director.
(b) Any Replacement Director shall (i) be classified as a Class II director with a term expiring at the 2025 Annual General Meeting of Stockholders, (ii) satisfy applicable independence requirements under the NYSE Listed Company Manual and Rule 10A-3 under the Exchange Act, (iii) be appointed to the Technology & Strategy Committee, and (iv) be subject to and comply with all policies, procedures, codes of conduct, corporate governance guidelines, and other requirements applicable to non-employee directors of the Company generally.
(c) In identifying a Replacement Director, Greystone shall be entitled to propose up to three candidates and the Company shall give due and good-faith consideration to each such proposed candidate. The Company shall not unreasonably withhold its consent to any candidate proposed by Greystone who satisfies the qualifications set forth in clause (b) above and who does not have a material conflict of interest with the Company.
(d) If the Parties are unable to agree on a Replacement Director within the 30-calendar-day period described in clause (a) above, the provisions of Section 8.1(c) shall apply, and Greystone shall be entitled, in its sole discretion, to treat such failure as a termination event under this Agreement.
ARTICLE III — STANDSTILL PROVISIONS
Section 3.1 — Greystone Standstill Obligations.
During the Standstill Period, Greystone shall not, and shall cause each of the Greystone Parties not to, directly or indirectly (whether acting alone or in concert with any other person):
(a) Ownership Cap. Acquire, offer or propose to acquire, or agree to acquire, directly or indirectly, by purchase, tender or exchange offer, through the acquisition of control of another person, by joining a partnership, limited partnership, syndicate, or other group (including a Group), through swap or hedging transactions or otherwise, Beneficial Ownership of NTP Shares such that the Greystone Parties would, in the aggregate, Beneficially Own more than 9.9% of the Outstanding Shares (which, based on 412,000,000 shares currently outstanding as of the date hereof, would equal 40,788,000 NTP Shares); provided, however, that this limitation shall not require Greystone to divest or otherwise dispose of any NTP Shares in the event that Greystone's Beneficial Ownership exceeds 9.9% of the Outstanding Shares solely as a result of a reduction in the total number of Outstanding Shares (including, without limitation, as a result of share repurchases by the Company), and in such event, Greystone shall not acquire Beneficial Ownership of any additional NTP Shares until such time as the Greystone Parties' aggregate Beneficial Ownership of NTP Shares has decreased to 9.9% or less of the then-Outstanding Shares.
(b) Proxy Solicitations. Solicit proxies or written consents of stockholders, or conduct any other type of referendum (whether binding or non-binding) with respect to, or from the holders of, NTP Shares, or become a "participant" in any "solicitation" of proxies or consents (as such terms are defined in Regulation 14A under the Exchange Act) with respect to any matter to be voted on by stockholders of the Company; provided, however, that this restriction shall not prohibit Greystone from engaging in private communications with stockholders of the Company that do not constitute a "solicitation" within the meaning of Regulation 14A.
(c) Consent Solicitations and Stockholder Proposals. Seek to call, or request the call of, a special meeting of stockholders of the Company, or seek to make, or make, a stockholder proposal at any annual or special meeting of stockholders or through action by written consent, or make any request for a list of the Company's stockholders or for any books and records of the Company pursuant to Section 220 of the Delaware General Corporation Law or otherwise.
(d) Vote-No Campaigns. Encourage, advise, or knowingly influence any other person with respect to the voting or disposition of any NTP Shares in connection with any "vote no," "withhold," or similar campaign with respect to any matter to be voted on by stockholders of the Company, or publicly announce an intention to vote any NTP Shares against any director nominee recommended by the Board.
(e) Special Meetings. Seek to call, or request the call of, or take any action to convene, a special meeting of stockholders of the Company.
(f) Public Proposals. Make, or cause to be made, any public proposal, whether conditional or unconditional, with respect to any Extraordinary Transaction or any other extraordinary corporate transaction involving the Company or any of its subsidiaries or any of their respective securities, including any merger, acquisition, tender offer, exchange offer, consolidation, restructuring, recapitalization, spin-off, split-off, or similar transaction, or publicly comment on any such proposal made by a third party, except that Greystone may privately communicate its views on any such matter to the Board or management of the Company on a confidential basis.
(g) Group Formation. Form, join, or in any way participate in a "group" (within the meaning of Section 13(d)(3) of the Exchange Act) with any other person with respect to any NTP Shares for the purpose of acquiring, holding, voting, or disposing of NTP Shares, other than a group consisting solely of the Greystone Parties; provided that nothing in this clause (g) shall be deemed to prevent Greystone from engaging in ordinary-course communications with stockholders that do not involve the formation of a Group.
(h) Non-Disparagement. Make, or cause to be made, any public statement, public communication, or public filing with the SEC or any other governmental authority that constitutes an ad hominem attack on, or that disparages, defames, slanders, or is otherwise derogatory of, the Company, its subsidiaries, or any of their respective current or former directors, officers, or employees, in their capacity as such; provided, however, that this clause (h) shall not restrict Greystone from making truthful statements required by Applicable Law or in connection with any legal, regulatory, or governmental proceeding or investigation, or from making private communications to the Board or management of the Company.
(i) Other Restricted Activities. Take any action, or encourage, advise, or assist any other person to take any action, that would reasonably be expected to require the Company or any of its Affiliates to make a public announcement regarding any of the actions described in clauses (a) through (h) above.
Section 3.2 — Company Standstill Obligations.
During the Standstill Period, the Company shall not, and shall cause its directors, officers, and authorized agents not to, directly or indirectly:
(a) Non-Disparagement. Make, or cause to be made, any public statement, public communication, or public filing with the SEC or any other governmental authority that constitutes an ad hominem attack on, or that disparages, defames, slanders, or is otherwise derogatory of, Greystone, its Affiliates, or any of their respective current or former partners, members, directors, officers, or employees, including without limitation Dominic Ferraro and Lena Ostrowski, in their capacity as such; provided, however, that this clause (a) shall not restrict the Company from making truthful statements required by Applicable Law or in connection with any legal, regulatory, or governmental proceeding or investigation, or from responding factually and in good faith to any public statements made by Greystone that do not comply with this Agreement.
(b) Slate Commitment. The Company shall comply with its obligations under Section 2.4 to include Ms. Sinclair-Moreau (or any duly appointed Replacement Director) on the Company's slate of director nominees recommended by the Board for election at the 2025 Annual General Meeting of Stockholders, subject to the conditions set forth therein.
(c) Board Size Cap. The Company shall comply with its obligations under Section 2.5 not to expand the Board beyond 12 directors without Greystone's prior written consent.
Section 3.3 — Termination of Standstill Obligations.
The standstill obligations set forth in Section 3.1 shall automatically terminate, and shall be of no further force or effect, upon the earliest to occur of (a) the expiration of the Standstill Period, (b) the termination of this Agreement pursuant to Section 8.1, or (c) a material breach by the Company of any of its material obligations under this Agreement, which breach remains uncured for 15 business days following the delivery of written notice thereof by Greystone to the Company specifying in reasonable detail the nature of such breach.
ARTICLE IV — STRATEGIC REVIEW
Section 4.1 — Strategic Review of Enterprise Software Division.
(a) Concurrent with the public announcement of this Agreement contemplated by Section 9.1, the Board shall announce the initiation of a comprehensive strategic review of the Enterprise Software Division (the "Strategic Review"). The Board shall direct the Technology & Strategy Committee, in coordination with Company management and the Board's financial advisor, Esterline Partners LLC, to oversee and conduct the Strategic Review.
(b) The Strategic Review shall consider all reasonably available strategic alternatives with respect to ESD, including but not limited to (i) a potential sale of all or a portion of ESD to one or more third-party purchasers, (ii) a spin-off or split-off of ESD to the Company's stockholders, (iii) the formation of a joint venture or strategic partnership with respect to ESD, (iv) an operational restructuring or reorganization of ESD to enhance profitability and growth, (v) an initial public offering of a minority interest in ESD, and (vi) retention and continued investment in ESD as a wholly-owned business segment of the Company. In evaluating such alternatives, the Board and its advisors shall consider, among other factors, the potential impact on stockholder value, tax efficiency, execution risk, market conditions, employee retention, and the Company's overall strategic direction.
(c) For context, ESD contributed approximately $1.82 billion of the Company's $6.38 billion total consolidated revenue for the fiscal year ended December 31, 2022, representing approximately 28.5% of total consolidated revenue. ESD's adjusted EBITDA for such period was approximately $412 million, representing an adjusted EBITDA margin of approximately 22.6%.
(d) The Strategic Review shall be conducted diligently and in good faith, and shall be completed no later than December 31, 2023. The Board shall provide Greystone with a written summary of the Strategic Review's conclusions and the Board's resulting determinations within 15 business days following the completion of the Strategic Review. Such written summary shall include a description of the alternatives considered, the factors evaluated, and the Board's rationale for its determination.
(e) Nothing in this Section 4.1 shall require the Company or the Board to (i) take any specific action with respect to ESD, (ii) consummate any transaction involving ESD, or (iii) accept or pursue any particular strategic alternative. The Company and the Board shall retain full and complete discretion with respect to any strategic decisions relating to ESD, subject to the Board's fiduciary duties under Applicable Law.
(f) Greystone acknowledges and agrees that the Strategic Review may involve the disclosure to Ms. Sinclair-Moreau of confidential and/or material non-public information regarding ESD and the Company's business, and that Ms. Sinclair-Moreau shall be subject to all applicable confidentiality obligations and insider trading restrictions with respect to any such information.
ARTICLE V — VOTING COMMITMENTS
Section 5.1 — Voting in Favor of Company Nominees and Board Recommendations.
During the Standstill Period, Greystone shall, and shall cause each of the Greystone Parties to:
(a) cause all NTP Shares Beneficially Owned by the Greystone Parties to be present, in person or by proxy, at each annual or special meeting of stockholders of the Company (and at any adjournment, postponement, or rescheduling thereof) so that such shares shall be counted as present for purposes of establishing a quorum;
(b) vote (or cause to be voted), or deliver (or cause to be delivered) a written consent with respect to, all NTP Shares Beneficially Owned by the Greystone Parties in favor of each of the Company's director nominees recommended by the Board for election at each annual meeting of stockholders of the Company held during the Standstill Period; and
(c) vote (or cause to be voted), or deliver (or cause to be delivered) a written consent with respect to, all NTP Shares Beneficially Owned by the Greystone Parties in accordance with the Board's recommendation on all other proposals submitted to a vote of the Company's stockholders at each annual or special meeting of stockholders held during the Standstill Period, including but not limited to (i) the advisory vote on executive compensation ("say-on-pay"), (ii) the ratification of the appointment of Whitfield & Keane LLP as the Company's independent registered public accounting firm, and (iii) any proposal to approve or amend the Company's equity incentive plans.
Section 5.2 — Exception for Extraordinary Transactions.
Notwithstanding anything in Section 5.1(c) to the contrary, with respect to any proposal submitted to a vote of the Company's stockholders that relates to an Extraordinary Transaction (as defined in Section 1.1), Greystone shall have the right to vote (or cause to be voted) all NTP Shares Beneficially Owned by the Greystone Parties in its sole and absolute discretion. For the avoidance of doubt, the Extraordinary Transaction threshold is 25% of the Company's market capitalization as measured in the manner set forth in the definition thereof. This exception shall apply regardless of whether such Extraordinary Transaction has been approved or recommended by the Board.
Section 5.3 — Compliance Verification.
Upon reasonable request by the Company (which request shall not be made more than once per calendar quarter), Greystone shall provide to the Company, within 10 business days following receipt of such request, a written certification from a duly authorized officer of Greystone Capital Management LLC confirming (a) the total number of NTP Shares Beneficially Owned by the Greystone Parties as of the date of such certification, and (b) Greystone's compliance with the voting commitments set forth in this Article V. Such certification may be delivered by electronic transmission to the Company's General Counsel and Corporate Secretary at the address specified in Section 11.5.
ARTICLE VI — EXPENSE REIMBURSEMENT
Section 6.1 — Reimbursement of Greystone Expenses.
(a) In consideration of Greystone's agreement to enter into this Agreement and to comply with the standstill and other obligations set forth herein, the Company shall reimburse Greystone for its documented, reasonable, and actual out-of-pocket expenses incurred in connection with Greystone's engagement with the Company, including expenses incurred in connection with Greystone's review of the Company's business and strategic alternatives, Greystone's activism campaign, and the negotiation, documentation, and execution of this Agreement. Reimbursable expenses shall include, without limitation, (i) reasonable attorneys' fees and expenses of Greystone's legal counsel, Whitaker, Drummond & Chase LLP, and (ii) financial advisory fees and expenses of Greystone's financial advisor, Veltrano Advisors LLC. The aggregate amount of reimbursable expenses under this Section 6.1 shall not exceed $1,750,000 (one million seven hundred fifty thousand dollars).
(b) Greystone shall submit invoices and reasonably detailed supporting documentation for all expenses for which reimbursement is sought to the Company within 60 calendar days following the date of this Agreement. Such documentation shall include, at a minimum, a description of the services rendered or expenses incurred, the date(s) on which such services were rendered or expenses were incurred, and the amount charged; provided that Greystone shall be entitled to redact any information in such documentation that is protected by the attorney-client privilege, work product doctrine, or any other applicable privilege.
(c) The Company shall pay all undisputed amounts within 30 calendar days of receipt of such documentation by wire transfer of immediately available funds to an account designated in writing by Greystone. In the event the Company disputes any portion of the invoices submitted, the Company shall promptly notify Greystone in writing of the specific basis for such dispute, and the Parties shall cooperate in good faith to resolve such dispute within 15 business days following such notice.
ARTICLE VII — MUTUAL NON-DISPARAGEMENT AND CONFIDENTIALITY
Section 7.1 — Mutual Non-Disparagement.
(a) During the Standstill Period and for a period of 12 months following the expiration or termination of the Standstill Period (such 12-month period, the "Non-Disparagement Survival Period"), neither Party shall, and each Party shall cause its respective directors, officers, partners, members, employees, agents, and representatives not to, directly or indirectly, make or cause to be made any public statement, public communication, press release, or public filing with the SEC or any other governmental authority that disparages, defames, slanders, or is otherwise derogatory of the other Party, its Affiliates, or any of their respective current or former directors, officers, partners, members, or employees, in their capacity as such.
(b) Notwithstanding clause (a) above, this Section 7.1 shall not prohibit either Party from (i) making truthful statements in connection with any legal, regulatory, or governmental proceeding or investigation, whether initiated by such Party or by a third party, (ii) making truthful statements in response to a valid subpoena, civil investigative demand, or other compulsory legal process, (iii) making truthful statements as otherwise required by Applicable Law or the rules of the NYSE, or (iv) making internal communications between a Party and its directors, officers, partners, members, employees, agents, and professional advisors that are not intended for public dissemination.
(c) The Parties acknowledge and agree that this Section 7.1 supplements, and does not supersede or replace, the non-disparagement obligations of Greystone set forth in Section 3.1(h) and the non-disparagement obligations of the Company set forth in Section 3.2(a), which obligations shall remain in full force and effect during the Standstill Period.
Section 7.2 — Confidentiality.
(a) Each Party shall, and shall cause its respective directors, officers, partners, members, employees, agents, and representatives to, keep confidential and not disclose to any third party, all non-public information exchanged between the Parties (or their respective representatives) in connection with the negotiation of this Agreement and all terms and conditions of any proposals, counterproposals, drafts, term sheets, correspondence, presentations, analyses, or other communications exchanged during the negotiation process (collectively, "Confidential Information").
(b) The confidentiality obligations set forth in this Section 7.2 shall survive the expiration or termination of the Standstill Period for a period of 24 months (the "Confidentiality Survival Period").
(c) Notwithstanding the foregoing, this Section 7.2 shall not prohibit disclosures of Confidential Information that are:
(i) required by Applicable Law or the rules of the NYSE, provided that the disclosing Party shall, to the extent permitted by law, provide the other Party with prior written notice of such required disclosure and cooperate with the other Party in seeking a protective order or other appropriate remedy to preserve the confidentiality of such Confidential Information;
(ii) made in connection with any SEC filing required to be made in connection with this Agreement, including the Current Report on Form 8-K and the amendment to the Schedule 13D contemplated by Section 9.2, or any subsequent SEC filing in which a Party is required to reference or describe this Agreement;
(iii) made to a Party's legal counsel, financial advisors, accountants, or other professional advisors who have a need to know such information in connection with the performance of this Agreement and who are bound by obligations of confidentiality (whether by professional obligation or contractual undertaking) at least as restrictive as those set forth in this Section 7.2;
(iv) made to limited partners or investors of Greystone in the ordinary course of Greystone's fund reporting obligations, provided that such limited partners or investors are subject to customary confidentiality restrictions; or
(v) made with the prior written consent of the other Party.
ARTICLE VIII — TERMINATION
Section 8.1 — Termination Events.
This Agreement shall terminate automatically, without the requirement for any further action by either Party, upon the earliest to occur of the following:
(a) Expiration of Standstill Period. The expiration of the Standstill Period (i.e., 11:59 p.m. (Eastern Time) on the date that is 30 calendar days prior to the last date on which a stockholder may deliver an advance notice of intention to nominate director candidates for the Company's 2025 Annual General Meeting of Stockholders, as determined pursuant to the advance notice provisions of the Bylaws).
(b) Material Breach. A material breach by either Party of any material provision of this Agreement, which breach remains uncured for a period of 15 business days following the delivery of written notice thereof by the non-breaching Party to the breaching Party, which notice shall specify in reasonable detail the nature of such breach and the specific provision(s) of this Agreement that have been breached; provided, however, that this Agreement shall not terminate under this clause (b) if (i) the breaching Party cures such breach within such 15-business-day cure period, or (ii) the non-breaching Party has waived such breach in writing. For the avoidance of doubt, termination pursuant to this clause (b) shall not limit the non-breaching Party's right to seek damages, specific performance, or other remedies available at law or in equity.
(c) Failure to Replace Designee. Ms. Sinclair-Moreau ceases to serve on the Board for any reason other than her voluntary resignation or the expiration of her term at the 2025 Annual General Meeting of Stockholders, and the Company fails to appoint a mutually agreed Replacement Director within 30 calendar days following the date on which Ms. Sinclair-Moreau ceased to serve on the Board, in accordance with Section 2.6. In such event, Greystone shall have the right, in its sole discretion, to terminate this Agreement by delivering written notice of termination to the Company.
(d) Change of Control. The Company enters into a definitive agreement with respect to a Change of Control transaction (as defined in Section 1.1); provided, however, that if such definitive agreement is subsequently terminated without the Change of Control transaction having been consummated, the Parties may agree in writing to reinstate this Agreement on terms to be mutually agreed.
Section 8.2 — Effect of Termination.
Upon termination of this Agreement pursuant to Section 8.1, neither Party shall have any further rights, obligations, or liabilities under this Agreement, except that:
(a) the mutual non-disparagement provisions of Section 7.1 shall survive and remain in full force and effect for the applicable 12-month Non-Disparagement Survival Period following the date of termination;
(b) the confidentiality provisions of Section 7.2 shall survive and remain in full force and effect for the applicable 24-month Confidentiality Survival Period following the date of termination;
(c) the expense reimbursement obligations of the Company under Article VI shall survive with respect to any amounts that have been documented and submitted in accordance with Section 6.1(b) but remain unpaid as of the date of termination; and
(d) the provisions of Article X (Representations and Warranties), Article XI (Miscellaneous), and this Section 8.2 shall survive in accordance with their respective terms.
Section 8.3 — Voluntary Resignation by Designee.
For the avoidance of doubt, the voluntary resignation of Ms. Sinclair-Moreau from the Board shall not constitute a termination event under Section 8.1(c), and in such event, the provisions of Section 2.6 shall apply and the Company and Greystone shall cooperate in good faith to identify and appoint a mutually agreed Replacement Director within the timeframes specified therein. The Standstill Period and all other provisions of this Agreement shall continue in full force and effect during such replacement process.
ARTICLE IX — SEC FILINGS AND PUBLIC ANNOUNCEMENTS
Section 9.1 — Joint Press Release.
(a) Promptly following the execution of this Agreement (and in any event on the first business day following the date hereof), the Parties shall issue a joint press release in the form mutually agreed upon by the Parties (the "Joint Press Release"), announcing (i) the execution of this Agreement, (ii) the appointment of Catherine "Kate" Sinclair-Moreau to the Board and to the Technology & Strategy Committee, (iii) the withdrawal of the nomination of marshall Henning, and (iv) the initiation of the Strategic Review of the Enterprise Software Division.
(b) The Joint Press Release shall include a quote from Sir Edmund Prumvane, Chairman of the Board, expressing the Board's support for the Agreement and the appointment of Ms. Sinclair-Moreau, and a quote from Dominic Ferraro, Founding and Managing Partner of Greystone Capital Partners LP, expressing Greystone's support for the Agreement and its confidence in the Company's leadership and strategic direction. The form of the Joint Press Release is attached hereto as Exhibit A.
(c) Neither Party shall make any public statement or public communication regarding this Agreement or the transactions contemplated hereby, other than the Joint Press Release and the SEC filings contemplated by Section 9.2, without the prior written consent of the other Party; provided, however, that either Party may make such public statements as may be required by Applicable Law or the rules of the NYSE, subject to providing the other Party with reasonable prior notice and an opportunity to review and comment on such statement.
Section 9.2 — SEC Filings.
(a) Form 8-K. On the first business day following execution of this Agreement, the Company shall file a Current Report on Form 8-K with the SEC (the "Form 8-K") reporting under Item 1.01 (Entry into a Material Definitive Agreement) and Item 5.02 (Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers), disclosing the entry into this Agreement and the appointment of Ms. Sinclair-Moreau as a director of the Company. The Company's CIK number is 0001847263. The Form 8-K shall attach this Agreement as Exhibit 10.1 and the Joint Press Release as Exhibit 99.1 thereto.
(b) Schedule 13D/A. Within two business days following execution of this Agreement, Greystone shall file an amendment to its Schedule 13D (SEC file number SC 13D/005-91482) with the SEC (the "Schedule 13D/A"), reflecting the entry into this Agreement and amending Item 4 (Purpose of Transaction) thereof to describe the terms of this Agreement and Greystone's obligations and commitments hereunder. The Schedule 13D/A shall attach this Agreement as an exhibit thereto.
(c) Review of Filings. Each Party shall provide the other Party with a reasonable opportunity (which shall be no less than 24 hours, to the extent practicable) to review and comment on any SEC filing that references this Agreement or the other Party prior to the filing thereof, and shall give due consideration to any comments timely received from the other Party. Each Party shall promptly provide the other Party with final copies of any SEC filings that reference this Agreement following the filing thereof.
Section 9.3 — NYSE Notification.
Promptly following execution of this Agreement (and in any event within two business days following the date hereof), the Company shall provide notice to the NYSE of the change in the composition of the Board resulting from the appointment of Ms. Sinclair-Moreau, in accordance with the applicable rules and listing standards of the NYSE, including Section 303A of the NYSE Listed Company Manual.
ARTICLE X — REPRESENTATIONS AND WARRANTIES
Section 10.1 — Representations and Warranties of the Company.
The Company hereby represents and warrants to Greystone as of the date hereof as follows:
(a) Organization. The Company is a corporation duly incorporated, validly existing, and in good standing under the laws of the State of Delaware.
(b) Power and Authority. The Company has all requisite corporate power and authority to enter into, execute, and deliver this Agreement and to perform all of its obligations hereunder.
(c) Authorization. The execution and delivery of this Agreement by the Company and the performance by the Company of its obligations hereunder have been duly and validly authorized by all necessary corporate action on the part of the Company, including the approval of the Board. No other corporate proceedings on the part of the Company are necessary to authorize the execution, delivery, or performance of this Agreement.
(d) Binding Obligation. This Agreement has been duly and validly executed and delivered by the Company and constitutes the legal, valid, and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other similar laws affecting creditors' rights generally and to general principles of equity (whether considered in a proceeding at law or in equity).
(e) No Conflicts. The execution, delivery, and performance of this Agreement by the Company does not and will not (i) conflict with or result in a violation of the Certificate of Incorporation or the Bylaws, (ii) conflict with or result in a breach of, or constitute a default (or an event that, with notice or lapse of time or both, would constitute a default) under, any material agreement, contract, or other instrument to which the Company is a party or by which the Company or any of its properties or assets is bound, or (iii) violate any Applicable Law applicable to the Company, except, in the case of clauses (ii) and (iii), as would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the Company's ability to perform its obligations under this Agreement.
(f) Outstanding Shares. As of the date hereof, the Company has 412,000,000 shares of common stock, par value $0.01 per share, issued and outstanding.
Section 10.2 — Representations and Warranties of Greystone.
Greystone hereby represents and warrants to the Company as of the date hereof as follows:
(a) Organization. Greystone Capital Partners LP is a limited partnership duly formed, validly existing, and in good standing under the laws of the State of Delaware. Greystone Capital Management LLC is a limited liability company duly formed, validly existing, and in good standing under the laws of the State of Delaware.
(b) Power and Authority. Greystone has all requisite partnership and limited liability company power and authority, as applicable, to enter into, execute, and deliver this Agreement and to perform all of its obligations hereunder.
(c) Authorization. The execution and delivery of this Agreement by Greystone and the performance by Greystone of its obligations hereunder have been duly and validly authorized by all necessary partnership and limited liability company action on the part of Greystone. No other partnership or limited liability company proceedings on the part of Greystone or Greystone Capital Management LLC are necessary to authorize the execution, delivery, or performance of this Agreement.
(d) Binding Obligation. This Agreement has been duly and validly executed and delivered by Greystone and constitutes the legal, valid, and binding obligation of Greystone, enforceable against Greystone in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other similar laws affecting creditors' rights generally and to general principles of equity (whether considered in a proceeding at law or in equity).
(e) Ownership. As of the date hereof, the Greystone Parties Beneficially Own, in the aggregate, 28,016,000 NTP Shares, representing approximately 6.8% of the Outstanding Shares (based on 412,000,000 shares outstanding). The Greystone Parties do not, as of the date hereof, Beneficially Own any other equity securities of the Company (including options, warrants, convertible securities, or other rights to acquire equity securities of the Company) other than the NTP Shares described in the foregoing sentence.
(f) No Group. Neither Greystone nor any of the other Greystone Parties is, as of the date hereof, a member of any Group (other than a Group consisting solely of the Greystone Parties) with respect to any NTP Shares or other securities of the Company.
ARTICLE XI — MISCELLANEOUS
Section 11.1 — Governing Law.
This Agreement, and any claim, controversy, dispute, or cause of action (whether in contract, tort, or otherwise) based upon, arising out of, or relating to this Agreement and the transactions contemplated hereby, shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
Section 11.2 — Jurisdiction; Venue.
(a) Each Party hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, any state court of the State of Delaware, or if jurisdiction over a particular matter is vested exclusively in the federal courts, the United States District Court for the District of Delaware) in any action, suit, or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, or for recognition and enforcement of any judgment relating thereto, and each Party hereby irrevocably and unconditionally agrees that all claims in respect of any such action, suit, or proceeding shall be heard and determined in such courts.
(b) Each Party hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, (i) any objection that it may now or hereafter have to the laying of venue of any action, suit, or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in any of the courts referred to in clause (a) above, and (ii) the defense of an inconvenient forum to the maintenance of such action, suit, or proceeding in any such court.
(c) Each Party agrees that a final judgment in any such action, suit, or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
Section 11.3 — Waiver of Jury Trial.
EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY, OR THE ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE, AND ENFORCEMENT HEREOF. EACH PARTY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.3.
Section 11.4 — Specific Performance.
The Parties acknowledge and agree that (a) the obligations of each Party under this Agreement are unique, (b) irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, and (c) monetary damages would not be an adequate remedy for any such non-performance or breach. Accordingly, each Party shall be entitled to an injunction or injunctions, specific performance, and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in each case without the necessity of proving actual damages or posting any bond or other security, in addition to all other remedies available to such Party at law or in equity. Each Party further agrees that it will not oppose the granting of such relief on the basis that any other Party has an adequate remedy at law.
Section 11.5 — Notices.
All notices, requests, demands, claims, consents, and other communications under this Agreement shall be in writing and shall be deemed duly given or made (a) when delivered in person, (b) on the date sent if sent by email (with confirmation of receipt), (c) on the business day after being sent by a nationally recognized overnight courier service, or (d) on the fifth business day after being mailed by registered or certified mail (return receipt requested, postage prepaid), in each case addressed to the intended recipient as set forth below (or at such other address as a Party may designate by written notice to the other Party in accordance with this Section 11.5):
If to the Company:
Northgate Telecommunications PLC 45 Broadwick Street London W1F 0DB, United Kingdom
Attention: Priya Nandakumar, General Counsel & Corporate Secretary
With a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP 450 Lexington Avenue New York, New York 10017
Attention: Angela Fontaine
If to Greystone:
Greystone Capital Partners LP 590 Madison Avenue, 34th Floor New York, New York 10022
Attention: Dominic Ferraro, Managing Partner
With a copy (which shall not constitute notice) to:
Whitaker, Drummond & Chase LLP 787 Seventh Avenue New York, New York 10019
Attention: Jonathan Whitaker