This STANDSTILL
AGREEMENT (this “Agreement” ) is made as of
December 1, 2005, by and between Spark Networks plc, a public
limited company registered in England and Wales under number
3628907 whose registered office is located at 24-26 Arcadia Avenue,
Finchley Central, London N3 2JU, England (the
“Company” ), and Great Hill Equity Partners II,
Limited Partnership, a Delaware limited liability company whose
registered office is located at One Liberty Square Boston,
Massachusetts 02109 ( “Shareholder”
).
WHEREAS,
Shareholder has requested that it and its Affiliates (as defined
below) be permitted to own beneficially in the aggregate up to
29.9% of the outstanding Voting Securities (as defined
below);
WHEREAS, the
Company and Shareholder have previously entered into that certain
confidentiality agreement dated October 14, 2005 (the
“Confidentiality Agreement” ) which contains a
provision (the “Standstill Provision” ) pursuant
to which Shareholder agreed not to, among other things, directly or
indirectly acquire, offer to acquire, or propose to acquire more
than 2% of any class of securities or rights to acquire more than
2% of any class of securities of the Company for a period of one
year from the date of the Confidentiality Agreement without the
prior written consent of the Company or its Board of Directors;
and
WHEREAS, the Board
of Directors of the Company has determined that it would be in the
best interests of the Company and its shareholders to waive the
Standstill Provision and permit Shareholder to increase its
beneficial ownership subject to the terms and conditions set forth
in this Agreement.
NOW, THEREFORE, in
consideration of the foregoing, and other good and valuable
consideration, the receipt and sufficiency of which is
acknowledged, and intending to be legally bound hereby, the parties
hereto agree as follows:
SECTION 1.01.
Definitions .
(a) The
following terms, as used herein, have the following
meanings:
“Affiliate” means, with respect to any Person,
any Person directly or indirectly controlling, controlled by, or
under common control with, such other Person. For the purposes of
this definition, “control” when used with respect to
any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting
securities, by contract or otherwise; the terms
“controlling” and “controlled” have
meanings correlative to the foregoing. Affiliates of Shareholder
shall include, but not be limited to, Great Hill Affiliate Partners
II Limited Partnership and Great Hill Investors, LLC but shall
exclude any Person that is an Affiliate solely by reason of
Shareholder and its Affiliates (i) owning less than 50% of the
Total Voting Power of such Person, (ii) designating or having
the right to designate less than a majority of the board of
directors of such Person, and/or (iii) having customary
shareholder rights pursuant to an agreement entered into in
connection with a bona fide investment in such Person.
“Beneficial Ownership” and
“Beneficially Own” shall be determined in
accordance with Rules 13d-3 and 13d-5 under the Exchange
Act.
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“Governmental Authority” means any federal,
state, local or foreign court, legislative, executive or regulatory
authority or agency.
“group” shall have the meaning given to such
term in Section 13(d)(3) of the Exchange Act.
“Exchange Act” means the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated
thereunder.
“Person” means an individual, a corporation, a
partnership, an association, a trust or other entity or
organization, including a government or political subdivision or an
agency or instrumentality thereof, including its
Affiliates.
“Securities Act” means the Securities Act of
1933, as amended, and the rules and regulations promulgated
thereunder.
“Shareholder Group” means Shareholder and its
Affiliates.
“Total
Voting Power” means the aggregate number of votes (by
reference to the Company’s register of members) which may (at
the relevant time) be cast by holders of outstanding Voting
Securities on a poll at a general meeting of the Company, having
regard to any restrictions on voting imposed from time to time by
the Company’s Articles of Association.
“Voting
Securities” of any Person means all securities of such
Person entitled, in the ordinary course, to vote in the election of
directors of such Person.
ARTICLE 2
COVENANTS OF THE COMPANY
SECTION 2.01.
Waiver of Standstill Provision . The Company shall waive
Shareholder’s obligation to comply with the Standstill
Provision as contained in the Confidentiality Agreement, which
shall hereby be amended to delete the Standstill Provision, the
language of which is set forth below:
You also agree
that for a period of one year from the date of this letter
agreement that without the prior written consent of the Company or
its Board of Directors, neither you nor any of your affiliates or
Representatives will, in any manner, directly or indirectly:
(a) acquire, offer to acquire, propose (whether publicly or
otherwise) to acquire, announce any intention to effect or cause or
participate in or in any way assist or encourage any other person
to effect or seek, offer or propose (whether publicly or otherwise)
to acquire or agree to acquire, directly or indirectly, by purchase
or otherwise, more than 2% of any class of securities (or
beneficial ownership thereof) or direct or indirect rights to
acquire more than 2% of any class of securities of the Company or
any subsidiary thereof, or of any successor to or person in control
of the Company, or any assets of the Company or any subsidiary or
division thereof or of any such successor or controlling person;
(b) participate in (i) any tender or exchange offer,
merger or other business combination involving the Company or any
of its affiliates; (ii) any recapitalization, restructuring,
liquidation, dissolution or other extraordinary transaction with
respect to the Company or any of its affiliates; or (iii) any
“solicitation” of “proxies” (as such terms
are used in the proxy rules of the Securities and Exchange
Commission) or consents to vote any voting securities of the
Company or any of its affiliates; (c) form, join or in any way
participate in a “group as defined in Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended, in
connection
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with any of the
foregoing; (d) otherwise act, alone or in concert with others,
to seek to control the management, Board of Directors or policies
of the Company; (e) take any action which might force the
Company to make a public announcement regarding any of the types of
matters set forth in (a) above; or (f) enter into any
discussions or arrangements with any third party with respect to
any of the foregoing.
Except as amended
by this Section 2.01, the Confidentiality Agreement shall
remain in full force and effect.
SECTION 2.02.
Request of Total Voting Power . Not more than 2 U.K.
business days following each written request from the Shareholder
Group, the Company shall inform the Shareholder Group of the Total
Voting Power then outstanding.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Each
party hereto represents and warrants to the other as
follows:
(a)
Authorization . Such party has the requisite power,
authority and legal capacity to execute, deliver and perform and to
consummate the transactions contemplated by this Agreement. This
Agreement constitutes a legal, valid and binding obligation of such
party, enforceable against such party in accordance with its terms,
except as such enforcement may be limited by any applicable
bankruptcy, insolvency, moratorium or similar law affecting
creditors’ rights generally.
(b) No
Conflicts; Consents . No consent of any Governmental Authority
or other person is required to be obtained by such party in
connection with the execution and delivery by such party of this
Agreement.
SECTION 3.02.
Shareholder represents and warrants to the Company as
follows:
(a) The
limited partnership agreement of the Shareholder contains a
provision that states that the Shareh
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