Exhibit 10.4


 


CONFORMED COPY


 


Dated           August 2003


 


 


THE
MANAGERS


 


and


 


XTX HGCAPITAL JERSEY LIMITED


 


and


 


THE COMPANY


 


and


 


THE EXISTING SHAREHOLDERS


 


and


 


THE
ADDITIONAL WARRANTY COVENANTORS


 


 


INVESTMENT
AND SHAREHOLDERS

AGREEMENT RELATING TO

XYRATEX GROUP LIMITED


 


 





 


One Silk
Street


London EC2Y
8HQ


 


 


Telephone
(44-20) 7456 2000


Facsimile
(44-20) 7456 2222


 


Ref Richard
Youle


 

















 


Table of Contents


 


	
  Clause

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1

  	
  Interpretation

  	
   

  
	
   

  	
   

  	
   

  
	
  2

  	
  Conditions

  	
   

  
	
   

  	
   

  	
   

  
	
  3

  	
  Completion and subscription

  	
   

  
	
   

  	
   

  	
   

  
	
  4

  	
  Warranties

  	
   

  
	
   

  	
   

  	
   

  
	
  5

  	
  Limitation of
  Warrantors’ liability

  	
   

  
	
   

  	
   

  	
   

  
	
  6

  	
  Fraud and
  wilful misconduct or concealment

  	
   

  
	
   

  	
   

  	
   

  
	
  7

  	
  Mitigation of Losses

  	
   

  
	
   

  	
   

  	
   

  
	
  8

  	
  Claims
  by NewCo

  	
   

  
	
   

  	
   

  	
   

  
	
  9

  	
  Warranties
  and undertakings relating to NewCo

  	
   

  
	
   

  	
   

  	
   

  
	
  10

  	
  Covenants by the Managers

  	
   

  
	
   

  	
   

  	
   

  
	
  11

  	
  Covenants relating to
  the Company

  	
   

  
	
   

  	
   

  	
   

  
	
  12

  	
  Directors

  	
   

  
	
   

  	
   

  	
   

  
	
  13

  	
  Board
  meetings and committees of Directors

  	
   

  
	
   

  	
   

  	
   

  
	
  14

  	
  Reserved
  matters

  	
   

  
	
   

  	
   

  	
   

  
	
  15

  	
  Budgets and information

  	
   

  
	
   

  	
   

  	
   

  
	
  16

  	
  Confidentiality

  	
   

  
	
   

  	
   

  	
   

  
	
  17

  	
  Exit

  	
   

  
	
   

  	
   

  	
   

  
	
  18

  	
  Transfers and issue of
  Shares

  	
   

  
	
   

  	
   

  	
   

  
	
  19

  	
  Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  20

  	
  Public announcements

  	
   

  
	
   

  	
   

  	
   

  
	
  21

  	
  Notices

  	
   

  



 


i

















 


	
  22

  	
  Whole agreement and
  remedies

  	
   

  
	
   

  	
   

  	
   

  
	
  23

  	
  General

  	
   

  
	
   

  	
   

  	
   

  
	
  24

  	
  Governing
  law and submission to jurisdiction

  	
   

  
	
   

  	
   

  	
   

  
	
  25

  	
  Authority to Deliver

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1
  Part 1 The Managers

  	
   

  
	
   

  	
   

  
	
  Schedule 1 Part 2
  NewCo

  	
   

  
	
   

  	
   

  
	
  Schedule 1
  Part 3 Existing Shareholders

  	
   

  
	
   

  	
   

  
	
  Schedule 1
  Part 4 Additional Warranty Covenantors

  	
   

  
	
   

  	
   

  
	
  Schedule 2
  Part 1 Particulars of the Company pre-completion of this Agreement

  	
   

  
	
   

  	
   

  
	
  Schedule 2
  Part 2 Particulars of the Subsidiaries pre-completion of this Agreement

  	
   

  
	
   

  	
   

  
	
  Schedule 3 Warranties

  	
   

  
	
   

  	
   

  
	
  Schedule 4
  Part 1 Matters to be effected on or prior to signature of this Agreement

  	
   

  
	
   

  	
   

  
	
  Schedule 4
  Part 2 Matters to be effected on or prior to Completion of this Agreement

  	
   

  
	
   

  	
   

  
	
  Schedule 5 Deed
  of Adherence

  	
   

  
	
   

  	
   

  
	
  Schedule 6
  Existing Incentive Schemes

  	
   

  



 


ii

















 


This Agreement is made
on                August 2003
between:


 


(1)          THE PERSONS
whose names and addresses are set out in Part 1 of Schedule 1 (the “Managers”
and each a “Manager”);


 


(2)          XTX HGCAPITAL JERSEY LIMITED, (registered no. 85828) whose registered office is at 22
Grenville Street, St Helier, Jersey JE4 8PX (the “NewCo”);


 


(3)          XYRATEX GROUP LIMITED, (registered no. 4057904) whose registered
office is at Langstone Road, Havant, Hampshire PO9 1SA (the “Company”); and


 


(4)          THE
PERSONS whose names and addresses are set out in
Part 3 of Schedule 1 (the “Existing
Shareholders”).


 


(5)          THE
ADDITIONAL WARRANTY COVENANTORS whose names and
addresses are set out in Part 4 of Schedule 1 (the “Additional Warranty Covenantors”)


 


Recitals:


 


(A)         The Company is a private
company limited by shares, brief particulars of which are set out in Part 1 of
Schedule 2.


 


(B)          The Managers are the legal
and beneficial owners of the Xyratex Shares set opposite their names in Part 1
of Schedule 1.


 


(C)          The Existing Shareholders
are the legal and beneficial owners of the Xyratex Shares set opposite their
names in Part 3 of Schedule 1.


 


(D)         The matters set out in Clause
2 have been or will be effected on or prior to Completion and on that basis,
NewCo will subscribe for the NewCo Shares.


 


(E)          Taking into account the
Share Repurchase, NewCo intends to acquire up to 60% of the fully diluted
issued share capital of the Company pursuant to the Offer.


 


(F)          The Additional Warranty
Covenantors have agreed to join in this agreement solely for the purpose of
giving the covenant set out in Clause 4.3.


 


It is agreed as follows:


 


1             Interpretation


 


In this Agreement (including the Recitals):


 


1.1         Definitions


 


“A
Shareholder” means a holder of A Shares;


 


“A Shares” means the A Preferred Ordinary
Shares of £0.01 each in the capital of the Company having the rights set out in
the Articles;


 


“A
Director” means the director to be appointed pursuant to Clause
12.3;


 


“Accountants’ Report” means the report on
the Company by PricewaterhouseCoopers dated 6 August 2003 in the agreed
form;


 


“Accounts”
means the consolidated audited accounts of the Group for the 12 month period
ending 30 November 2002;


 


“Act” means the Companies Act 1985 as
amended by the Companies Act 1989;


 


1

















 


“acting
in concert” shall have the meaning set out in the Code, save that
the parties to this Agreement shall not be deemed to be acting in concert
solely by reason of their having executed and their acting in accordance with
this Agreement;


 


“agreed form” means a document in the form
agreed on behalf of the Managers, the Existing Shareholders and NewCo and
initialled on behalf of each of them for the purposes of identification only;


 


“Articles”  mean the new articles of
association of the Company in the agreed form to be adopted on Completion, as
amended from time to time;


 


“Auditors” mean PriceWaterhouseCoopers LLP
of The Quay, 30 Channel Way, Ocean Village, Southampton, SO14 3QG or such other
firm of Chartered Accountants appointed auditors of the Company from time to
time;


 


“B Director” means a director appointed by
the holders of a Majority of B Shares in accordance with Clause 12.1 and “B Directors”
shall be construed accordingly;


 


“B
Shareholder(s)” means a holder of B Shares;


 


“B Shares” means the B Preferred Ordinary
Shares of £0.01 each in the capital of the Company having the rights set out in
the Articles;


 


“Bank”
means HSBC Bank plc;


 


“Board” means the board of directors of the
Company or an authorised committee of the Board;


 


“Business”  means the business of the
Group, as more fully described in the Business Plan;


 


“Business Day” means a day which is not a
Saturday or Sunday or a bank or public holiday in England and Wales;


 


“Business Plan” means the business plan for
the Group prepared from time to time by the Managers and approved in accordance
with Clause 13.2;


 


“Business Prospects Warranties” means those
Warranties other than the Existing Business Warranties, and the Warranties at
paragraphs 7.2, 7.3, 7.5 and 7.6 of Schedule 3;


 


“C
Shareholder” means a holder of C Shares;


 


“C Shares” means the C Ordinary Shares of
£0.01 each in the capital of the Company having the rights set out in the
Articles;


 


“Code” means the City Code on Takeovers and
Mergers;


 


“Completion”  means completion of this
Agreement in accordance with Clause 3;


 


“connected
person” shall have the meaning given to that expression in
Section 839 of ICTA;


 


“Conditions”
means the conditions to Completion set out in Clause 2;


 


“Deed of Adherence” means a deed
substantially in the form set out in Schedule 5;


 


2

















 


“Directors” means the directors for the time
being of the Company and “Director” means any one of them;


 


“Disclosure Documents” means the documents
listed in the Schedule to the Disclosure Letter;


 


“Disclosure Letter” means the letter dated
the same date as this Agreement from the Warrantors to NewCo in the agreed form
relating to the Warranties;


 


“EBT” means the Havant International Employee Benefits Trust;


 


“Effective
Date” shall mean in the case of the Existing Shareholders the date
of Completion and in the case of the Managers shall mean the date such Manager
ceases to be employed by a Group Company;


 


“Existing
Business Warranties” means those Warranties contained at paragraphs
1 to 6 (inclusive), 7.4, 7.8.1(i) and 7.8.2(i) of Schedule 3;


 


“Existing Incentive
Schemes” means the existing share option and
other share based incentive schemes operated by the Company at the date hereof
for the benefit of employees
of the Company and each other Group Company as listed in schedule 6;


 


“Existing
Incentive Shares” means all Shares in the authorised but unissued share capital of the
Company which are, at the date of this Agreement, the subject of option or
similar arrangements under the Existing Incentive Schemes and all Shares which
are registered in the name of the EBT at that time;


 


“Existing
Shareholder Irrevocable Undertakings” means the irrevocable
undertakings to be given by the Existing Shareholders in favour of NewCo to
accept the Offer in the agreed form;


 


“Existing
Shareholder Shares” means the A Shares held by the Existing
Shareholders after the exercise of any options and Completion of the Offer and
the Share Repurchase in accordance with their respective terms;


 


“Facility Documents” means the Loan
Agreement and Security Documents;


 


“Fee
Schedule” means the schedule of fees in the agreed form to be
paid pursuant to Clause 23.11;


 


“Finally
Determined” means a final decision of a court or tribunal of
competent jurisdiction;


 


“Golden
Share” the special rights share (such special rights are detailed in
the NewCo Articles) to be issued jointly to Mr Wilkie and Mr Barber by NewCo on
Completion in accordance with Clause 3.3;


 


“Group” means the Company and its
Subsidiaries and its subsidiary undertakings from time to time and “Group
Company” means any one of them;


 


“Hart
Scott Rodino Condition” means the condition set out at Part A (h) of
Appendix 1 of the Offer Document;


 


“HgCapital”
means Hg Investment Managers Limited, a company registered in England and Wales
under company no. 1579496 and whose registered office is at Third Floor,
Minerva House, 3-5 Montague Close, London SE1 9BB;


 


3

















 


“ICTA”
means the Income and Corporation Taxes Act 1988;


 


“Initial
Business Plan” means the business plan dated 31 July 2003 in
the agreed form;


 


“Insurance
Report” means the report in the agreed form on the insurance of the
Group prepared by Marsh Ltd;


 


“Investment
Fund” means any person, company, trust, limited partnership or fund
holding shares for investment purposes connected or associated with HgCapital
and not being a member of the Company (including a unit trust or an investment
trust);


 


“Legal
Due Diligence Report” means the due diligence report in the agreed
form on the Company prepared by NewCo’s Solicitors;


 


“Liable
Party” means in relation to all claims under the Warranties each
Manager who is in breach thereof; and


 


(i)            in relation to claims
under the Existing Business Warranties, each Warranty Covenantor;  and


 


(ii)           in relation to claims under
the Business Prospects Warranties, Mr Wilkie;


 


“Listing” means the admission of any of the
Ordinary Share Capital or of the ordinary shares of a holding company of the
Company to the Official List in the United Kingdom and the trading of those
Shares on the London Stock Exchange becoming effective, or the granting of
permission for any of the Ordinary Share Capital to be dealt on another
recognised investment exchange (as defined by section 285(1)(a) of the
Financial Services and Markets Act 2000) or the Alternative Investment Market,
regulated by the London Stock Exchange PLC or the National Association of
Securities Dealers Automated Quotations and “Listed” shall be construed
accordingly;


 


“Loan Agreement” means the Loan Agreement in
the agreed form to be entered into between the Company and the Bank, as amended
from time to time, to finance the Share Repurchase;


 


“Losses” means all losses, liabilities,
damages, costs (including, without limitation, legal costs and experts’ and
consultants’ fees), charges, expenses, actions, proceedings, claims and
demands;


 


“Majority”
means as regards members of a class or classes of Shares, a majority by
reference to the number of Shares of such class or classes held and not by
reference to the number of members holding Shares of such class or classes;


 


“Management
Accounts” means the management accounts of the Group for the period
to 30
June 2003 in the agreed form;


 


“Managers’
Irrevocable Undertakings” means the irrevocable undertakings to be
given by the Managers in favour of NewCo to accept the Offer in the agreed
form;


 


“Managers’ Questionnaires” means the
questionnaires completed by each Manager in the agreed form;


 


“Market
Value” shall have the meaning given to it in Article 42.1 of
the Articles;


 


“Maximum
Liability Amount” means


 


4

















 


(i)            in relation to the
Managers, the net amount of salary in the period 30 November 2002 to 30
November 2003 and the net amount of bonuses paid to each Manager in
respect of business performance for that period in each case by any Group
Company; and


 


(ii)           in relation to each
Warranty Covenantor in respect of all breaches of the Existing Business
Warranties 15% of the proceeds (before tax) received by that Warranty
Covenantor pursuant to the Offer or Optionholder Proposals; and


 


(iii)          in respect of all breaches
of the Business Prospects Warranties, nil in relation to each Warranty
Covenantor other than Mr Wilkie and, in relation to Mr Wilkie, the net amount
of salary and bonuses paid to Mr Wilkie by any Group Company in the period 30
November 2002 to 30 November 2003;


 


“Mr
Barber” means Stephen Barber, one of the Managers;


 


“Mr
Wilkie” means William Kennedy Wilkie, one of the Existing
Shareholders;


 


“NewCo
Shares” means the B Shares subscribed for by NewCo at Completion
pursuant to Clause 3;


 


“NewCo’s Solicitors” means Linklaters of One
Silk Street, London, EC2Y 8HQ;


 


“New ISO
Plan” means the proposed incentive stock option plan in the agreed
form proposed to be adopted by the Company pursuant to the Resolutions;


 


“Offer”
means the offer to be made by NewCo to acquire up to 11,631,164 Xyratex Shares on the terms and subject to the conditions described
in the Offer Document, which expression shall include any revision or extension
of such offer or any offer made in substitution therefore;


 


“Offer
Document” means the document in the agreed form to be sent to the
shareholders of the Company containing the Offer;


 


“Official
List” means the list maintained by the competent authority (as
defined in Section 74 of the Financial Services and Markets Act 2000) for
the purpose of admitting securities to listing pursuant to Part VI of that Act;


 


“Optionholder
Proposals” means the proposals to be made to the holders of options
over shares in the capital of the Company on or about the date hereof in
connection with the Offer;


 


“Ordinary Share Capital” means the A Shares,
the B Shares and the C Shares;


 


“Press
Announcement” means the press announcement relating to the Offer and
this Agreement in the agreed form;


 


“Relevant Managers’
Percentage” means in relation to each
Manager who is a Liable Party the amount which the Maximum Liability Amount
applicable to that Manager represents as a percentage of the aggregate amount
of the Maximum Liability Amounts of all other Managers who are Liable Parties;


 


“Relevant
Warranty Covenantors’ Percentage” means in relation to each Warranty
Covenantor who is a Liable Party the amount which the Maximum Liability Amount
applicable to that Warranty Covenantor represents as a percentage of the
aggregate


 


5

















 


amount of the Maximum Liability Amounts of
all Warranty Covenantors who are Liable Parties;


 


“Remuneration”
means the aggregate of salary, bonuses, payments in kind, ex gratia payments,
commissions, pension contributions, participation in share options, profit
sharing and incentive remuneration schemes and any other benefit flowing to a
person or anyone connected with him by reason of that person’s employment,
office or directorship in or of any member of the Group;


 


“Remuneration
Committee” means the remuneration committee as defined in Clause
12.2 below;


 


“Reports”
means the Accountants’ Report and the Legal Due Diligence Report;


 


“Resolutions” means the resolutions of the
Board and the Company in the agreed form;


 


“Sale” means the acquisition of Shares
representing not less than 50 per cent. of the Ordinary Share Capital by any
person and any other person:


 


(i)            who, in relation to him,
is a connected person; or


 


(ii)           with whom he is acting in
concert;


 


“Security Documents” means the documents
listed in schedule 7 to the Loan Agreement;


 


“Share
Repurchase” means the proposed purchase by the Company of all the
Xyratex Shares registered in the names of Ace LP, Murray Johnstone Private
Acquisitions Partnership I ‘A’ and Murray Johnstone Private Acquisitions
Partnership I ‘B’ and part of the Xyratex Shares registered in the joint names
of Ken Wilkie, Derek Holt and David Martin as trustees of a funded unapproved
retirement benefit scheme pursuant to the terms of the Share Repurchase
Agreements;


 


“Share
Repurchase Agreements” means the agreements to be entered into
between (i) the Company and Ace LP, Murray Johnstone Private Acquisitions
Partnership I ‘A’ and Murray Johnstone Private Acquisitions Partnership I ‘B’
and (ii) the Company and Ken Wilkie, Derek Holt and David Martin to effect the
Share Repurchase in the agreed form;


 


“Share
Repurchase Resolutions” shall have the meanings given thereto in the
Offer Document;


 


“Shareholders” means the holders of the
Shares;


 


“Shares” mean the A Shares, the B Shares and
the C Shares and (1) any shares issued in exchange for those shares or by way
of conversion or reclassification and (2) any shares representing or deriving
from those shares as a result of an increase in, reorganisation or variation of
the capital of the Company;


 


“Subsidiaries”
means those companies which are subsidiaries of the Company, brief details of
which are set out in Part 2 of Schedule 2 or, as the case may be, any
subsidiary of the Company from time to time;


 


“Warrantors”
means each of the Managers;


 


“Warranties” means the warranties set out in
Clause 4 and Schedule 3 and a “Warranty”
means any of them;


 


6

















 


“Warranty Covenantors” means Mr Wilkie, Derek Holt, Michael Dinham and the Additional
Warranty Covenantors.


 


“Xyratex
Shares” shall have the meaning given to it in the Offer Document.


 


1.2         Interpretation Act 1978


 


The Interpretation Act 1978 shall apply to
this Agreement in the same way as it applies to an enactment.


 


1.3         Subordinate legislation


 


References to a statutory provision include
any subordinate legislation made from time to time under that provision.


 


1.4         Modification etc. of statutes


 


References to a statute or statutory
provision include that statute or provision as from time to time modified or
re-enacted or consolidated whether before or after the date of this Agreement
so far as such modification or re-enactment or consolidation applies or is
capable of applying to any transactions entered into in accordance with this
Agreement and (so far as liability thereunder may exist or can arise) shall
include also any past statute or statutory provision (as from time to time
modified or re-enacted or consolidated) which such provision has directly or
indirectly replaced provided that nothing in this Clause 1.4 shall operate to
increase the liability of any party beyond that which would have existed had
this Clause 1.4 been omitted.


 


1.5         Companies Act 1985


 


The expressions “holding company” and “subsidiary”
and “subsidiary
undertaking”
shall have the same meanings in this Agreement as their respective definitions
in the Act.


 


1.6         Clauses, Schedules etc.


 


References to this Agreement include any
Recitals and Schedules to it and this Agreement as from time to time amended
and references to Clauses and Schedules are to Clauses of and Schedules to this
Agreement. References to paragraphs are to paragraphs of the Schedules.


 


1.7         Headings


 


Headings shall be ignored in construing
this Agreement.


 


1.8         Time of day


 


References to time of day are to London
time.


 


1.9         Winding-up


 


References to the winding-up of a person
include the amalgamation, reconstruction, reorganisation, administration,
dissolution, liquidation, merger or consolidation of such person and any
equivalent or analogous procedure under the law of any jurisdiction in which
that person is incorporated, domiciled or resident or carries on business or
has assets.


 


7

















 


1.10       Information


 


Any reference to books, records or other
information means books, records or other information in any form including
paper, electronically stored data, magnetic media, film and microfilm.


 


1.11       Definitions in Articles


 


Words and expressions defined in the
Articles have the same meanings in this Agreement unless the context otherwise
requires.


 


1.12       Representatives and persons


 


References to those of the parties that are
individuals include their respective legal personal representatives and
references to persons shall include bodies corporate, partnerships and
unincorporated associations.


 


1.13       Gender


 


References to the masculine or feminine
genders include the neuter and vice versa.


 


1.14       Alternate Directors


 


References to a B Director or an A Director
(as the case may be) shall include any alternate appointed to act in his place
from time to time.


 


1.15       NewCo Consents


 


In relation to NewCo except where otherwise
expressly provided in this Agreement;


 


1.15.1    consents,
approvals, agreements, actions and rights to be made or given by or that have
been granted to NewCo may be validly made or given or exercised by HgCapital
and/or a B Director (if appointed at the relevant time); and


 


1.15.2    notices,
information or documents to be given to NewCo shall also be given to HgCapital
and any one of the B Directors (if appointed at the relevant time).


 


1.16       A Directors


 


For so long as Mr Wilkie holds office as a
director of the Company references in this Agreement to ‘A Directors’ shall be
construed as references to Mr Wilkie unless some other person has been
appointed as the A Director pursuant to Clause 12.3.


 


2             Conditions


 


2.1         Conditions precedent


 


Completion of this Agreement is conditional
on:


 


2.1.1      the
Facility Documents becoming unconditional in all respects;


 


2.1.2      the Offer
becoming or (where permitted by the terms of the Offer) being declared
unconditional in all respects on or before 30 September 2003 (the “Long Stop Date”) provided always that if
the Offer cannot be declared unconditional in all respects due to the Hart
Scott Rodino Condition not being satisfied such Long Stop


 


8

















 


Date shall automatically be extended to 30
October 2003 or, in each case, such later date as may be agreed by NewCo
and the Company; and


 


2.1.3      those
matters set out in Part 2 of Schedule 4 having been effected.


 


The parties hereto agree to use their
reasonable endeavours to procure that (i) the above conditions are satisfied by
the Long Stop Date or such other date as may be agreed by NewCo and (ii) within
5 Business Days of the date hereof, NewCo and the Company make valid and
binding filings, pay all relevant fees and take all such further action as is
reasonably required with the intention of ensuring that the Hart Scott Rodino
Condition is satisfied.


 


2.2         Responsibility of the Managers and Existing
Shareholders


 


2.2.1      Each
Manager and Existing Shareholder severally undertakes to NewCo subject always to
his fiduciary duties to the Company that prior to Completion or the Long Stop
Date whichever is the sooner he shall use his reasonable endeavours in his
capacity as a director or employee of the Company and its Subsidiaries (as
appropriate) to procure that each member of the Group shall:


 


(i)           conduct the Business in the
ordinary course and on an arm’s length basis;


 


(ii)          continue to pay its
creditors in the ordinary course of business or within the usual terms of
payment of such creditors;


 


(iii)         seek to maintain its trade
and trade connections and not deliberately by any action, omission, neglect or
default, damage or risk the same;


 


(iv)         maintain the insurances as
have been maintained prior to the date of this Agreement, as set out in
sections 5,6,7 and 8 of the Insurance Report.


 


2.2.2      The
Managers, Existing Shareholders and the Company agree not to vary the terms or
waive any of the conditions to or any rights under the Facility Documents
without the written consent of NewCo.


 


2.2.3      Each
Manager and Existing Shareholder hereby agrees to keep NewCo reasonably
informed from the date of this Agreement until such time as the Offer is
declared wholly unconditional in all respects as to their proposals for the
implementation of the provisions of Clause 3.7 including all discussions with
the Inland Revenue.


 


2.3         Responsibility of the Company


 


2.3.1      The Company
agrees to:


 


(i)           post the Offer Document to
each Shareholder of the Company who is entitled to receive the same in
accordance with the terms of the Offer; and


 


(ii)          post such letters as are
required to holders of options over shares in the capital of the Company to
implement the Optionholder Proposals; in each case within 3 Business Days of
the execution of this Agreement.


 


9

















 


2.4         Non-satisfaction


 


If the Conditions are not satisfied or
waived on or before the Long Stop Date, this Agreement shall lapse and no party
shall have any claim against any other under it, save with respect to any
antecedent rights arising hereunder.


 


2.5         Restrictions


 


Each Manager and Existing Shareholder
severally undertakes to NewCo that prior to Completion he will:-


 


2.5.1      other than
pursuant to options granted to him prior to the date hereof in respect of
Xyratex Shares, not purchase or otherwise acquire any ordinary shares or other
securities in the Company or any interest therein or rights thereover;


 


2.5.2      not solicit
any other offer in respect of any or all of the issued share capital of the
Company; and


 


2.5.3      not enter
into any agreement, arrangement or obligation with any person whether
conditional or unconditional to do all or any of the acts referred to in this
Clause 2.5.


 


2.6         Undertakings as a Director or Employee


 


Each Manager and Existing Shareholder
severally undertakes to NewCo that, in his capacity as director or employee of
the Company and/or any of its Subsidiaries (as appropriate) but subject to his
fiduciary and other duties as a director or employee of the Company or any of
its Subsidiaries, he will:


 


2.6.1      at all times
prior to the Offer becoming or being declared wholly unconditional:


 


(i)           use
all his reasonable endeavours to procure in so far as he is able that no
announcement is made by or on behalf of him or the Company in connection with
the Offer or the Share Repurchase without prior consultation with NewCo;


 


(ii)          refrain
from taking any action or making any statement which he reasonably believes is
or may be prejudicial to the success of the Offer or the Share Repurchase;


 


(iii)         procure
so far as he is able that such meetings of the directors of the Company or
members of the Group (if so requested by NewCo) as may be necessary to propose
such resolutions as may be required to enable the Offer and/or the Share
Repurchase to be implemented will be convened;


 


(iv)         procure
as far as he is able that no dividend is recommended to the shareholders of the
Company without the consent of NewCo;


 


(v)          procure
as far as he is able that no allotment or grant of options over Shares is
effected (except pursuant to existing obligations or to the extent that such
allotment or grant has been approved or authorised in accordance with the
provisions of this agreement or to the extent previously agreed in writing by
NewCo) ;


 


10

















 


(vi)         procure
so far as he is able that no issue of any debt or other securities convertible
into Shares takes place and no Agreement is entered into to do any of the
foregoing;


 


2.6.2      upon the
Offer having become or been declared unconditional in all respects so far as he
is able vote to approve the registration of all transfers of shares made
pursuant to or in connection with the Offer (subject to the same being duly
stamped) and vote in favour of the appointment of Nic Humphries and such other
person as is nominated by NewCo as directors of the Company; and


 


2.6.3      upon the
Offer being declared unconditional in all respects procure that the Company:


 


(i)           issues
a valid and binding and unconditional Utilisation Request to the Bank in
accordance with and as defined in the Loan Agreement; and


 


(ii)          completes
the Share Repurchase in accordance with the terms of the Share Repurchase
Agreements.


 


2.7         The parties hereto agree that in the event the board with such majority
as is detailed in Article 5.3.1 and having due regard to all relevant
factors including the principles set out in Article 7.1 reasonably
considers (i) that some or all of the profits of the Company available for
distribution should be so distributed and/or (ii) that a transaction or
transaction(s) are contemplated which is in the best interests of the Company
and may give rise to the creation of such available distributable reserves (for
example the disposal by the Company of a significant part of its business) then
to the extent that the board so resolves each party hereto undertakes to use
their reasonable endeavours to procure that such action as is required is taken
to reflect and implement such resolution.


 


3             Completion and subscription


 


3.1         Completion


 


3.1.1      Subject to
satisfaction or waiver of the Conditions, Completion shall take place at the
offices of NewCo’s Solicitors (or such other place as may be agreed between the
parties).


 


3.1.2      On
Completion, those matters detailed in Part 2 of Schedule 4 shall take
place in such order as NewCo may require.


 


3.2         NewCo Subscription


 


NewCo hereby applies for the issue and
allotment to it at Completion of 665,188  NewCo Shares at a price of 5
pence per B Share and the Company accepts such application.


 


3.3         Issue of Golden Share by NewCo


 


3.3.1      Mr Wilkie
and Mr Barber hereby jointly apply for the issue and allotment to them at
Completion of the Golden Share at a price of £1.


 


3.3.2      On
Completion NewCo shall issue to Mr Wilkie and Mr Barber (jointly) the Golden
Share credited as fully paid and enter their names in the register of members
of NewCo as the joint holders thereof and deliver to Mr Barber a certificate
for such Golden Share.


 


11

















 


3.4         Registration


 


NewCo shall be entitled to direct that some
or all of the NewCo Shares may be issued and registered in the name of any
nominee or custodian holding such NewCo Shares on its behalf as bare nominee
and the provisions of Clauses 3.2 shall be interpreted accordingly. Subject to
the foregoing NewCo and each Manager agrees to accept the NewCo Shares and
Management Shares (as appropriate) for which it has subscribed subject to the
terms of the Articles and to the entry of its name, or the name of its nominee
or custodian in the register of members as the holder thereof.


 


3.5         Application of moneys


 


The Company shall apply the moneys
subscribed by NewCo and all moneys lent to the Company pursuant to the Facility
Documents in the following manner and order:


 


3.5.1      in paying
amounts due under the terms of the Share Repurchase;


 


3.5.2      in paying
the costs and expenses associated with the transactions referred to in this
Agreement; and


 


3.5.3      for working
capital purposes in the furtherance of the Business in accordance with the
Business Plan.


 


3.6         Rights of pre-emption etc.


 


Each of the Managers and the Existing
Shareholders hereby irrevocably waives any and all rights or restrictions
(whether rights of pre-emption or otherwise) which may be conferred upon them
by the Articles or this Agreement or otherwise which would otherwise entitle
them to frustrate or impede the Share Repurchase and the Offer.


 


3.7         Employee option pool


 


3.7.1      The parties
hereby agree that up to 2,576,041 C Shares and up to 400,000A Shares (the “New Incentive Shares”) and any Existing
Incentive Shares which from time to time cease to be subject to option or other
arrangements pursuant to the Existing Incentive Schemes (whether by reason of
the termination of employment by the persons entitled thereto or otherwise
howsoever) (together the “Employee Option
Pool”), shall subject to Clauses 3.7.2 and 3.7.3 below be available
for issue after Completion to the Managers and other employees of the Group in
accordance with the rules of one or more of the Existing Incentive Schemes and/or any other employee share incentive or option plan which may be
adopted subject to the approval of the Board by resolution in respect of which
at least one B Director has voted in favour and NewCo, each Manager and the
Existing Shareholders shall procure that (and insofar as their own holdings of
Xyratex Shares are concerned, hereby waive irrevocably) any and all rights or
restrictions (whether rights of pre-emption or otherwise) which may be
contained in or conferred by the Articles or this Agreement or otherwise are
waived irrevocably by the persons entitled thereto to the extent necessary to
enable issues of shares to take place pursuant to the Existing Incentive
Schemes and/or any such plan.


 


3.7.2      The Shares
comprised in the Employee Option Pool shall be issued to such employees of the
Group as may from time to time be approved by the


 


12

















 


Remuneration Committee, such approval to
include the positive vote of any one B Director.


 


3.7.3      Immediately
prior to an Exit, to the extent that any of the shares comprised in the
Employee Option Pool are not held by or under option to employees of the Group
pursuant to Clause 3.7.2 (such employees being the “Existing Optionholders”), the remainder of the Employee Option
Pool shall be issued to the Existing Optionholders and/or such other employees
of the Group in such amounts as the Chief Executive Offer of the Company and
any one B Director shall agree and in default of such agreement shall be issued
to the Existing Optionholders (other than the Chief Executive Officer of the
Company) on a basis pro rata to their respective holdings of C Shares and
options over C Shares at that time.


 


4             Warranties


 


4.1         Warrantors’ Warranties


 


4.1.1      Each of the
Warrantors severally warrants for himself alone to NewCo and its successors in
title that, each of the Warranties is true and accurate subject only to:


 


(i)           any matter which is fairly
disclosed in the Disclosure Letter; and


 


(ii)          any limitations, exceptions
or exclusions expressly provided for in Clause 4.


 


4.1.2      The
Warrantors confirm and agree that each of the Warranties shall be separate and
independent and shall not be limited by reference to any other Warranty or by
anything in this Agreement.


 


4.1.3      Any
Warranty qualified by the expression “so far as the Warrantor is aware”, “to
the Warrantors’ knowledge, information and belief”, “known to the Warrantor” or
any similar expression shall, unless otherwise stated, be deemed to be given to
the best of the actual knowledge, information and belief (without having made
enquiry of any other person) of the relevant Warrantor.


 


4.2         Several liability


 


The liability of each of the Warrantors
under or pursuant to any of the provisions of this Agreement shall be several
provided that no claim against any Warrantor made hereunder shall be validly
made unless at the same time as such claim is made a claim in respect of such
breach of Warranty is also made against each other Manager who is or who is
reasonably believed to be a Liable Party and the liability of each such party shall
not in whole or in part be released, compounded or compromised nor shall any
time or indulgence be given by NewCo in favour of such party unless the
release, compounding, compromise, time or indulgence is also granted to each
other Liable Party.


 


4.3         Warranty Covenantors


 


4.3.1      Each
Warranty Covenantor hereby irrevocably and unconditionally covenants that in
the event that it is Finally Determined that any Manager is liable to make any
payment under the Warranties then to the extent that the loss suffered by NewCo
in respect of the breach of Warranty giving rise to such liability exceeds the
amount recoverable hereunder from that Manager and any other Manager who is a
Liable Party (such excess being the “Excess
Liability”) that Warranty Covenantor shall


 


13

















 


pay to NewCo an amount equal to his or her
Relevant Warranty Covenantors’ Percentage of such Excess Liability provided
that the aggregate liability of each Warranty Covenantor in respect of all
amounts payable by that Warranty Covenantor pursuant to this Clause 4 shall in
no event exceed an amount equal to his or her Maximum Liability Amount.


 


4.3.2      The
Managers shall be deemed not to be liable to make any payment under the
Warranties for the purpose of clause 4.3.1 unless such liability is Finally
Determined or they have entered into a binding compromise agreement with the
consent of each of the Warranty Covenantors.


 


4.4         Managers’ waiver of rights against Group
Companies etc.


 


Each of the Warrantors with effect from
Completion waives any rights, remedies or claims which they may have against
the Group in respect of any misrepresentation, inaccuracy or omission in or
from any information or advice supplied or given by any other Warrantors or by
any member of the Group or its directors, officers, employees or agents, in
connection with assisting the Warrantors in the making of any representation,
the giving of any Warranty or the preparation of the Disclosure Letter.


 


4.5         Effect of Completion


 


The Warranties and all other provisions of
this Agreement insofar as the same shall not have been performed at Completion
shall not be extinguished or affected by Completion, or by any other event or
matter whatsoever (including, without limitation, any satisfaction and/or
waiver of any Condition).


 


4.6         Information supplied


 


Any information supplied by any Group
Company or any of their agents, representatives or advisers to the Warrantors
or their agents, representatives or advisers in connection with, or which forms
the basis of, any of the Warranties or the Disclosure Letter or otherwise in
relation to the business and affairs of any Group Company (whether before or
after the date hereof) shall not be treated as a representation, warranty or
guarantee of the accuracy thereof by the relevant Group Company to the
Warrantors and shall not constitute a defence to any claim by the Investors
under the Warranties and each of the Warrantors hereby irrevocably waives any
and all claims against the relevant Group Company in respect thereof.


 


4.7         Payment by a third party


 


If, subsequent to any payment to NewCo by
the Warrantors in respect of any Warranty claim, any Group Company receives any
payment from any third party in respect of any Losses suffered by a Group
Company which resulted in the claim, NewCo shall reimburse to the Warrantors an
amount equal to the proportion of such payment which the amount paid by the
Warrantors to NewCo in respect of the matter giving rise to the claim bears to
such Losses.


 


5             Limitation of Warrantors’ liability


 


Notwithstanding the provisions of Clause 4,
the Warrantors shall not be liable for breach of Warranty:


 


14

















 


5.1         Time limitation for claims


 


in respect of any claim unless written
notice of such claim is given by NewCo to the Warrantor(s) who is/are believed
by NewCo to be a Liable Party with a copy to Mr Wilkie and to the Company’s
Solicitors, DLA of 3 Noble Street, London, EC2V 7EE for the attention of Mark
Taylor, setting out such details as are available of the specific matter giving
rise to the claim including, if practicable, an estimate of the amount of
Losses which are, or are to be, the subject of the claim, including any Losses
which are contingent on the occurrence of any future event, on or prior to 31
July 2004:


 


5.2         Individual de minimis claims


 


in respect of any claim unless the amount
of such claim exceeds £100,000 (“Qualifying
Claim”).


 


5.3         Aggregate minimum claims


 


in respect of any claim unless the value of
the Company has been significantly impaired and the aggregate amount of all
Qualifying Claims exceeds £5,000,000, but if the value of
the Company having been significantly impaired, and the aggregate liability in
respect of all such Qualifying Claims exceeds that figure then all Qualifying
Claims shall accrue against and be recoverable from the Warrantors in full;


 


5.4         Maximum liability


 


in respect of any claim to the extent that
the amount of the liability of the Warrantor in respect of that claim exceeds
that Warrantor’s Relevant Managers’ Percentage of the liability arising
therefrom and in any event to the extent that the aggregate amount of the
liability of such Warrantor in respect of that claim and all previous claims
made for breach of Warranty would exceed that Warrantor’s Maximum Liability
Amount.


 


5.5         Calculation of damages


 


if the profits of any Group Company are
less than they would otherwise have been by virtue of a claim for breach of
Warranty then the loss suffered by NewCo shall be calculated in accordance with
the principles ordinarily applied but by reference only to the profits or
revenues in those particular years in which the loss arises without applying a
multiple of profits or revenues for that period.


 


5.6         Reduction of consideration


 


any amounts paid by the Managers and the
Warranty Covenantors pursuant to clause 5 shall be treated as a reduction in
the consideration paid to such persons pursuant to the Offer.


 


5.7         Contingent liabilities


 


in respect of any liability which is
contingent unless and until such contingent liability becomes an actual
liability and is due and payable but this Clause 5.4 shall not operate to avoid
a claim made in respect of a contingent liability within the time limit
specified in Clause 5.1 and in the manner specified in Clauses 5.1 and 8.1;


 


15

















 


5.8         Provisions in the Accounts


 


in respect of any claim if and to the
extent that specific provision or reserve is made for the matter giving rise to
the claim in the Accounts (and is not subsequently released);


 


5.9         Voluntary acts, etc.


 


in respect of any matter, act, omission or
circumstance (or any combination thereof), including the aggravation of a
matter or circumstance to the extent that the same would not have occurred but
for:


 


5.9.1      any
voluntary act, omission or transaction of NewCo, or its directors, officers,
employees or agents or successors in title, after Completion done or omitted
otherwise than in the ordinary course of business of NewCo and in the knowledge
that such act, omission or transaction might give rise to, or increase the
extent of, a claim under this Agreement or in circumstances where such claim
was reasonably foreseeable as a result of such act, omission or transaction;


 


5.9.2      the passing
of, or any change in, after the date of this Agreement any law, rule,
regulation or administrative practice of any government, governmental
department, agency or regulatory body or any change of any generally accepted
interpretation or application of any of the same;


 


5.9.3      any change
in accounting bases or policies in accordance with which the Company values its
assets or calculates its liabilities or any other change in accounting practice
from the treatment or application of the same used in preparing the Accounts
(save to the extent that such changes are required to correct errors or because
relevant generally accepted accounting principles have not been complied with).


 


5.10       Insurance


 


in respect of any claim to the extent that
any Losses arising from such claim are covered by a policy of insurance in
force on the date of this Agreement and payment is made by the insurer or would
have been made if a claim had been submitted under such policy.


 


6             Fraud and wilful misconduct or concealment


 


None of the limitations contained in Clause
5 shall apply to any claim against a Warrantor which arises or is increased, or
to the extent to which it arises or is increased, as the consequence of, or
which is delayed as a result of, fraud or dishonest misconduct or dishonest
concealment by that Warrantor provided that the liability of the Warranty
Covenantors in such circumstances shall not be increased as a result of such
fraud or dishonest misconduct or dishonest concealment and shall be calculated
as if the provisions of Clause 5 still applied.


 


7             Mitigation
of Losses


 


NewCo shall procure that all reasonable
steps are taken and all reasonable assistance is given to avoid or mitigate any
Losses which in the absence of mitigation might give rise to a liability in
respect of any claim for breach of Warranty.


 


16

















 


8             Claims
by NewCo


 


8.1         Admission of liability and settlement


 


If any matter comes to the notice of NewCo
in respect of which NewCo is aware any of the Warrantors may be or become
liable under any Warranty NewCo shall (insofar as it is able) procure that the
Company:


 


8.1.1      shall not
make any admission of liability, agreement or compromise to or with any person
in relation thereto without first consulting with the Warrantors and Mr Wilkie;
and


 


8.1.2      shall be
permitted a reasonable opportunity to avoid, dispute, resist, appeal or
compromise any claim in respect of which the Warrantors may be or become liable
under any Warranty subject to:


 


(i)           the Company being
indemnified by the Warrantors to the reasonable satisfaction of NewCo against
all costs and expenses which the Company may incur by reason of such action;
and


 


(ii)          the best interests of the
Business not being likely to be prejudiced by any such action.


 


8.2         Double claims


 


NewCo shall not be entitled to recover from
the Warrantors under this Agreement more than once in respect of the same
Losses suffered.


 


9             Warranties and undertakings relating to NewCo


 


9.1         Warranties


 


NewCo warrants that:


 


(i)           the
particulars relating to NewCo set out in Part 2 of Schedule 1 are true and
accurate in all respects; and


 


(ii)          NewCo
has the power and authority to enter into and perform this agreement.


 


9.2         Undertakings


 


NewCo undertakes that it will not register
the transfer of any of its shares (“NewCo
Shares”) by any holders of shares in NewCo (“NewCo Shareholder”) to any person other
than:


 


9.2.1      a Corporate
Permitted Transferee (as defined in the Articles) in relation to NewCo; or


 


9.2.2      an
Investment Fund (or its trustee, custodian or nominee) or any person which is:


 


(i)           any trustee, nominee or
custodian for such fund and vice versa;


 


(ii)          any unitholder, shareholder,
partner, participant, manager or adviser (or an employee of such manager or
adviser) in any such fund;


 


(iii)         any other Investment Fund or
its trustee, nominee or custodian, managed or advised by the same manager or
adviser as any such fund; or


 


17

















 


9.2.3      a trustee,
nominee, custodian or Corporate Permitted Transferees thereof of any of the
persons referred to in sub-paragraph as (i), (ii) or (iii) of Clause 9.2.2.
above; or


 


9.2.4      any person
who manages or advises any or all of the assets for the time being of any of
the NewCo Shareholders or any of its Corporate Permitted Transferees;


 


unless they have first procured that the
proposed transferee has made an offer to the A Shareholders and the C
Shareholders to acquire the same proportion of their holdings of Shares as that
proposed to be transferred by the NewCo Shareholders on the same terms as those
offered to the NewCo Shareholders at the price specified in Article 41.


 


10          Covenants by the Managers


 


10.1       Restrictions on the Managers and Existing
Shareholders


 


For the purposes of assuring to NewCo the
value of the Business and the full benefit of the goodwill of the Business,
each of the Managers and Existing Shareholders severally undertakes with NewCo
and the Company that, except with the written consent of NewCo:


 


10.1.1    he shall not,
except in the course of his or her duties as an employee (if applicable), use
or disclose to any person any Confidential Information and will use his
reasonable endeavours to prevent the use or disclosure of such Confidential
Information;


 


10.1.2    for 12 months
after the Effective Date, the Manager or Existing Shareholder (as the case may
be) shall not (on his or her own behalf or on behalf of any person) within a
territory in which any Group Company operates at the Effective Date, directly
or indirectly in competition with a business of any Group Company:


 


(i)           seek
to procure orders from or do business with any person who has been a customer
of any Group Company at any time during the year before the Effective Date; or


 


(ii)          engage,
employ, solicit or contact with a view to his or her engagement or employment
any person who is or has been employed by any Group Company at a salary in
excess of £40,000 (or the local currency equivalent) per annum at any time
during the year before the Effective Date; 
and


 


10.1.3    for 12 months
after the Effective Date, the Manager or Existing Shareholder (as the case may
be) shall not within a territory in which any Group Company operates at the
Effective Date either alone or jointly with or as manager, adviser, consultant,
agent or employee of any person directly or indirectly carry on or be engaged
in any business in competition with the business of any Group Company as
operated at the Effective Date.


 


10.2       Invalidity


 


10.2.1    Each of the
restrictions in this Clause 9 is an entirely separate and independent
restriction on each Manager and Existing Shareholder and the validity of one
restriction shall not be affected by the invalidity or unenforceability of
another.


 


10.2.2    Each Manager
and Existing Shareholder considers the restrictions in this Clause 9 to be
reasonable and necessary for the protection of the interests of the Company and
NewCo. If any such restriction shall be held to be void but would be valid if


 


18

















 


deleted in part or reduced in application,
such restriction shall apply with such deletion or modification as may be
necessary to make it valid and enforceable.


 


11          Covenants relating to the Company


 


11.1       Company’s undertakings


 


The Company agrees and undertakes (and,
where relevant, agrees and undertakes to procure) and each of the Managers and
Existing Shareholders undertakes to procure (so far as they are reasonably able
so to do), that:


 


11.1.1    each Group
Company shall carry on its business in the manner contemplated by the Business
Plan;


 


11.1.2    the Company
will, if so requested in writing by NewCo, enforce its rights under or pursuant
to this Agreement, the Articles and the Facility Documents (including the
agreements made pursuant thereto);


 


11.1.3    all steps
necessary are taken to ensure performance of the terms of this Agreement;


 


11.1.4    the Company
will, if so requested by NewCo, enforce its rights under or pursuant to the
terms of employment of a Manager or any employee earning a base salary of at
least £40,000 (or local currency equivalent) per annum under his Service
Agreement in circumstances where the Company is permitted to do so; and


 


11.1.5    as soon as
reasonably possible after becoming aware of the same, NewCo is notified in
writing of any breach or threatened or impending breach of any of the
covenants, warranties or other terms of the Facility Documents and of any
material litigation by or against any Group Company or which affects the
Business or any dispute or other circumstances which are outside the ordinary
course of business and are likely to give rise to any such litigation.


 


12          Directors


 


12.1       B Directors


 


12.1.1    The B
Shareholder(s) (acting by Majority) shall have the right to appoint and
maintain in office (i) two persons as the B Shareholder(s) may from time to
time nominate as non-executive Directors (and each as a member of each and any
committee of the Board) and to remove any Directors so appointed and, upon his
or her removal, whether by the B Shareholder(s) or otherwise, to appoint
another Director in his place and (ii) whilst ever two B Directors are not so
appointed as set out above, to appoint a representative to attend as an
observer at each and any meeting of the Board and each and any committee of the
Board.


 


12.1.2    The Directors
appointed under Clause 12.1.1 shall each be a B Director. Nic Humphries will be
the first B Director.


 


12.1.3    Appointment
and removal of a B Director shall be by written notice to the Company from the
holders of a Majority of the B Shares which shall take effect on delivery at
the Company’s registered office or at any meeting of the Board or committee
thereof.


 


19

















 


12.1.4    NewCo shall
indemnify and hold harmless the Company and each member of the Group in respect
of any costs claims, expenses or other liabilities which may be suffered or
incurred by the Company or any other member of the Group as a consequence of
the removal from office of any B Director whether pursuant to clause 12.3 or
otherwise other than amounts payable by the Company to such B Director in
respect of any accrued but unpaid director’s fees or expenses to which such B
Director is entitled.


 


12.1.5    The Company
shall pay to the B Shareholder(s) (or as it shall direct) in respect of the
provision of services a fee of £30,000 per annum per B Director in office
appointed pursuant to Clause 12.1.1 exclusive of VAT. Such fee shall accrue due
from day to day and be payable upon receipt of an invoice quarterly in arrears.


 


12.1.6    The fee
specified in Clause 12.1.5 shall not be increased for two years following the
date hereof but thereafter shall be increased on each anniversary of the date
of Completion by the lower of (i) a minimum percentage increase equal to the
annual percentage increase in the general index of retail prices for all items,
currently published by the Office for National Statistics or any equivalent
index if replaced during the 12 month period prior to the date of the most
recently published figure for such index; and (ii) the percentage equal to the
average percentage increase of basic salary for each executive director of the
Company in the relevant period.


 


12.1.7    The Company
will reimburse each B Director and any observer appointed pursuant to Clause
12.1 with the reasonable costs and out of pocket expenses incurred by him or
such observer in respect of attending meetings of the Company or carrying out
authorised business on behalf of the Company.


 


12.1.8    The B
Shareholder(s) may appoint another Director, or in exceptional circumstances
any other person, as an alternate director for each B Director appointed by it
by notice to the Company. An alternate director may attend speak and vote on
behalf of the B Director for whom he/she is appointed at any one or more
meetings of the Board at which such B Director is not present.


 


12.2       Reporting


 


The B Directors may report to NewCo and its
shareholders on the affairs of the Company and any Group Company and disclose
to such shareholders such information as he or she or it, in their absolute
discretion, think fit subject always to clause 15.3.


 


12.3       A Director


 


12.3.1    From and
after the date on which Mr Wilkie ceases to hold office as Chairman a simple
majority of the 5 largest A Shareholders (by reference to the number of A
Shares held by them at the relevant time) (“Principal
A Shareholders”) shall have the right by written notice to the
Company to appoint and maintain in office and remove from office one person
whom they shall from time to time nominate as a non-executive Director provided
always that such A Director:


 


(i)           is one of the Principal A
Shareholders; or


 


(ii)          is another A Shareholder
holding at least 75,000 A Shares provided that prior to such appointment the B
Directors are given a reasonable


 


20

















 


opportunity
to consult as to the identity and suitability for appointment as an A Director
of such person; or


 


(iii)         is pre-agreed by a B
Director.


 


12.3.2    Appointment
and removal of the A Director shall be by written notice to the Company which
shall take effect on delivery at the Company’s registered office or at any
meeting of the Board or committee thereof.


 


12.3.3    If Mr Wilkie
is a Director, he shall be deemed for all purposes to be the A Director unless
he is no longer the Chairman and some other person has been nominated as the A
Director pursuant to Clause 12.3.1.


 


12.4       Chairman


 


12.4.1    The parties
hereto agree, insofar as is reasonably possible, to procure that at all times a
Chairman is appointed that satisfies the requirements of NASDAQ as to the
independence and qualifications of chairmen provided that this provision shall
not apply for so long as Mr Wilkie holds office as the Chairman of the Company.


 


12.4.2    The Chairman
shall be appointed and removed by resolution of the Board.


 


12.4.3    The first
chairman of the Company shall be Mr Wilkie who shall hold office as chairman
until such time as the Board shall resolve to the contrary.


 


12.4.4    In
circumstances where the parties anticipate a new Chairman will require to be
appointed they shall follow the following procedure:


 


(i)           the Board shall meet to
discuss and where possible agree on the identity of the proposed Chairman;


 


(ii)          if the proposed Chairman is
not agreed and appointed pursuant to paragraph (i) above, an independent firm
of recruitment consultants shall be instructed to produce a list of
appropriately qualified candidates; and


 


(iii)         the Board shall then meet to
discuss and agree in good faith following appropriate interviews and
referencing of such candidates, the proposed Chairman.


 


13          Board meetings and committees of Directors


 


13.1       Board meetings


 


13.1.1    The members
of the Board immediately following Completion shall be Steve Barber, Richard
Pearce, the B Directors, Mr Wilkie and a non executive director to be appointed
by the Board following Completion.


 


13.1.2    Board
meetings shall be held at least ten times a year and at not more than two
monthly intervals. At least five Business Days’ written notice shall be given
to each of the Directors of all Board meetings (except if there are exceptional
circumstances and one of the B Directors agrees to shorter notice).  If the notice is to be sent to an address
outside the United Kingdom it shall be sent by courier or facsimile
transmission.


 


21

















 


13.1.3    At least two
Business Days prior to each Board meeting, the Company shall send to each
person entitled to receive notice of the Board meeting:


 


(i)           a reasonably detailed
agenda; and


 


(ii)          any relevant papers,
including (if not previously sent) the most recently prepared monthly
management accounts referred to in Clause 14.1.1 (v).


 


13.1.4    Any matter
which is not set out in the notice of meeting or the papers referred to in
Clause 13.1.3 above or, if the relevant papers do not arrive in the time period
detailed in Clause 13.1.3 above, shall not be discussed or resolved at that
meeting without the consent of a B Director and the A Director.


 


13.1.5    As soon as
practicable after each meeting of the Board (or committee of the Board) a copy
of the minutes thereof shall be sent by the Company to the Directors.


 


13.2       Committees of Directors


 


13.2.1    The Board may
constitute committees of Directors.


 


13.2.2    The quorum
for Board committee meetings shall be a B Director and the Chairman.


 


13.2.3    There shall
be an Audit Committee which shall comprise at least two directors including a B
Director and the A Director. The Audit Committee shall review the Audited
Accounts and discuss with the Auditors the accounting policies to be adopted.


 


13.2.4    There shall
be a Remuneration Committee which shall comprise at least two directors
including a B Director and the Chairman. The Remuneration Committee shall make
determinations on all matters concerning the Remuneration of all directors of
the Company other than the B Director(s), the appointment or dismissal of all
directors of the Company other than the B Director(s) and the A Director and
may agree variations to the terms of any Service Agreement from time to time.
For any resolution to be validly passed by the Remuneration Committee such
resolution must include the positive affirmative vote of a B Director


 


13.3       Enhancement of Voting rights of B Directors


 


13.3.1    In the event
that:


 


(i)           there
has been a material breach of this Agreement or the Articles by the Company,
the Managers, the Existing Shareholders or any person other than a holder of B
Shares who has, by the execution of a Deed of Adherence acceded to the terms of
this Agreement which has or might, in the reasonable opinion of HgCapital,
reasonably be considered likely to have a material and adverse effect on NewCo’s
investment in the Company and which (to the extent capable of remedy) the
defaulting party has failed to remedy within five Business Days of being
requested in writing to do so; or


 


(ii)          any
act, omission or event has occurred which constitutes or may constitute (with
the passage of time or the giving of notice) an Event of Default under the
Facility Documents in circumstances where as a result of such act, omission or
event the Bank has indicated that it may take action


 


22

















 


to enforce its rights under the Facility
Documents or may materially vary the terms on which financial facilities are
provided to the Company or NewCo reasonably considers that the Bank may take
any such action; or


 


(iii)         if EBIT
(as defined in the Facility Documents) is, in respect of any two consecutive
quarters, negative and greater than $3,000,000 below the amount budgeted for
each of those two quarters in the relevant Business Plan or the EBIT (as
defined in the Facility Documents) is in any quarter both negative and
$10,000,000 or more below the amount budgeted therefor in the relevant Business
Plan(as amended and updated in accordance with Clause 14 and 15)


 


then, for so long as the circumstances
comprising such event continue to subsist and solely for the purpose of taking
such action as NewCo reasonably considers to be necessary for the purpose of
remedying such circumstances, on any matter tabled at a meeting of the Board or
a meeting of a committee of the Board, those B Directors present and voting at
such meetings shall, when voting, between them be deemed to exercise one vote
more than the total number of votes exercised by the other directors present
and voting at the same meeting provided always that NewCo will to the maximum
extent reasonably practicable in the circumstances first consult with the Board
as a whole prior to any exercise of its rights under this clause.


 


13.3.2    NewCo agrees
to procure that for so long as the circumstances detailed in Clause 13.3.1
continue to exist


 


(i)           the B Directors do not take
any action which is unfairly prejudicial to any other Shareholder; and


 


(ii)          to the extent that pursuant
to such enhanced voting powers the B Directors require a new issue of shares or
other securities convertible into shares in the capital of the Company each
Shareholder holding in excess of 0.5% of the Ordinary Share Capital shall be
offered a reasonable opportunity (being to the extent reasonable and practical
in all the circumstance on at least 5 days notice) to participate in such new
issue on a basis proportionate to the amount of the Company’s Ordinary Share
Capital held by him expressed as a percentage of the whole of the Company’s
issued Ordinary Share Capital on the same terms as are being offered to the B
Shareholders.


 


14          Reserved
matters


 


14.1       NewCo Consent


 


14.1.1    Each of the
parties hereto shall exercise all voting rights and powers of control available
to him in relation to the Company to procure that, save with the positive
affirmative vote of a B Director or, to the extent a B Director is not
appointed at the relevant time, the prior written consent of NewCo, the Company
shall not effect or propose any of the matters in Clause 14.2 or their nearest
equivalent in the case of a Group Company (“Reserved
Matters”).


 


14.1.2    As a separate
obligation, severable from the obligations in Clause 14.1.1, the Company agrees
that, save with the positive affirmative vote of a B Director or, to


 


23

















 


the extent a B Director is not appointed at
the relevant time, the prior written consent of NewCo, it shall not effect or
propose any of the Reserved Matters.


 


14.2       NewCo Reserved Matters


 


The following Reserved Matters require the
consent of a resolution of the Board in respect of which at least one B
Director has voted in favour or, to the extent a B Director is not appointed,
the prior written consent of NewCo (save for those matters detailed in the
relevant Business Plan approved pursuant to Clause 14.2.18 below or which are
required to be effected pursuant to this agreement):


 


14.2.1    any change to
the Company’s memorandum and articles of association or the articles of
association of any Group Company;


 


14.2.2    any change of
name;


 


14.2.3    the
appointment and removal of the Auditors;


 


14.2.4    any change to
the accounting reference date or accounting policies, bases or methods from
those set out in the Audited Accounts and the Accountants’ Report (other than
as recommended by the Auditors);


 


14.2.5    the
presentation of any petition for winding-up or petition for an administration
order;


 


14.2.6    (save to the
extent contemplated by clause 3.7) any change in the share capital or the
creation, allotment or issue of any shares or of any other security or the
grant of any option or rights to subscribe for or to convert any instrument
into such shares or securities or the waiver of any right to receive payment in
respect of any of the Company’s shares that are issued partly paid;


 


14.2.7    any reduction
of the share capital or variation of the rights attaching to any class of
shares or any redemption, purchase or other acquisition of any shares or other
securities of the Company other than a conversion of shares by operation of
Article 8;


 


14.2.8    any
application by way of capitalisation of any sum in or towards paying up any
shares or of any other security or of any amount standing to the credit of the
share premium account or capital redemption reserve for any purpose;


 


14.2.9    the
appointment, removal and conditions of employment of the Company secretary or
any director of any Group Company (other than the appointment or removal of
Directors of the Company in accordance with this Agreement or the Articles);


 


14.2.10  the
appointment, discharge, Remuneration and conditions of employment of any
employee situated in the United Kingdom earning £80,000 or more each year or
any employee situated in the United States earning $170,000 or more each year;


 


14.2.11  the
adoption or variation of any bonus or profit-sharing scheme, any share option
or share incentive scheme or employee share trust or share ownership plan or
retirement benefit scheme save as detailed in this Agreement;


 


14.2.12  the
entry into of any joint venture, partnership, consortium or other similar
arrangement;


 


24

















 


14.2.13  the
sale of any Group Company or any consolidation or amalgamation with any other
company;


 


14.2.14  the
acquisition or disposal (including the lease to a third party) in any financial
year, otherwise than in accordance with any relevant capital forecast in the
Business Plan of:


 


(i)           assets
having an aggregate book or market value greater than £500,000;


 


(ii)          the
whole or a significant part of its undertaking; or


 


(iii)         a
subsidiary undertaking;


 


14.2.15  capital
expenditure (including obligations under hire-purchase and leasing
arrangements) of any item or project of greater than £500,000 in aggregate in
any financial year which is not provided for in the Business Plan;


 


14.2.16  the
entering into of any lease, licence or similar obligation under which the
rental and all other payments exceed £500,000 a year which is not provided for
in the Business Plan;


 


14.2.17  the
cessation or any material change to the nature or geographical area of any
material business operation;


 


14.2.18  the
adoption of and any amendment to the Business Plan;


 


14.2.19  the
entry into, surrender or material variation of any unusual (being a contract
outside the ordinary course of business) or in the reasonable opinion of the
Board, unusually onerous contract;


 


14.2.20  the
entry into of any material transaction with a party to this Agreement or any of
its Associated Companies or his or her connected persons not in the ordinary
course of business or not on arm’s length commercial terms;


 


14.2.21  the
entry into, termination, variation, waiver or breach of any arrangement or any
contract with a Manager or a connected person of a Manager, including the
variation of remuneration or other benefits under such arrangement or contract
save to the extent contemplated by clause 3.7;


 


14.2.22  the
sale of any of its debts on a discounted basis to a third party or the
borrowing of amounts (or indebtedness in the nature of borrowings) exceeding
£1,000,000 in aggregate in any financial year other than pursuant to the Facility
Documents or the creation of or permitting the creation of or suffering to
subsist any charge, mortgage, lien (other than a lien arising by operation of
law) or other security over any of its assets or property other than pursuant
to the Facility Documents or in the ordinary course of trading;


 


14.2.23  the
giving of any guarantee or indemnity other than pursuant to the Facility
Documents or in the ordinary course of trading;


 


14.2.24  the
making of any loan or advance to any person, firm, body corporate or other
business, other than to a Group Company or otherwise than in the normal course
of business and on an arm’s length basis;


 


25

















 


14.2.25  the
payment or declaration by any Group Company of any dividend or other
distribution (as defined under sections 209, 418 and 419 of ICTA) on account of
shares in its capital;


 


14.2.26  the
conduct of any litigation material to the Company, save for the collection of
debts arising in the ordinary course of the Business or any application for an
interim injunction or other application or action (including interim defence)
which is urgently required in the best interests of the Company in
circumstances in which it is not reasonably practicable to obtain prior
consent;


 


14.2.27  the
granting of any power of attorney or other delegation of directors’ powers
other than a valid delegation to a committee of the Board pursuant to Clause
13.2;


 


14.2.28  the
incorporation of a new subsidiary undertaking or the acquisition of any share
capital or other securities of any body corporate;


 


14.2.29  a
Sale or Listing;


 


14.2.30  dealing
in any way (including the acquisition or disposal, whether outright or by way
of licence or otherwise howsoever) with Intellectual Property other than in the
ordinary course of business;


 


14.2.31  establishing
any new branch, agency, trading establishment or business or closing any such
branch, agency, trading establishment or business; or


 


14.2.32  making
any change to its bankers.


 


14.3       A Director Reserved Matters


 


Each of
the parties hereto shall exercise all voting rights and powers of control
available to him in relation to the Company to procure that, save with the
consent of the Chairman, or if the Chairman is not Mr Wilkie, the A Director,
the Company shall not effect or propose any of the following matters or their
nearest equivalent in the case of a Group Company:


 


14.3.1    the entry
into, termination, variation, waiver or breach of any arrangement or any
contract with HgCapital, NewCo or any shareholders of NewCo save where


 


(i)           it is detailed in the
Business Plan; or


 


(ii)          the circumstances detailed
in Clause 13.3.1 exist and any such arrangement or contract is, in the
reasonable opinion of NewCo, required to avoid or to remedy an Event of Default
under the Facility Documents (provided that if such arrangement or contract so
required comprises a loan facility, guarantee or similar agreement or
arrangement for or in connection with the provision of a loan facility,
guarantee or other security or similar arrangement it shall be on reasonable
and usual commercial terms having regard to the current trading position of the
Group and the time frame within which such arrangement has to be provided).


 


14.3.2    (save to the
extent contemplated by clause 3.7) any issue of Shares or other securities
pursuant to any employee share scheme and which is not, by reason of its
nature, subject to the provisions of section 89 of the Act.


 


26

















 


15          Budgets
and information


 


15.1       Financial Information


 


15.1.1    The Company
shall prepare and submit to NewCo the following information as soon as possible
and no later than the dates/times set out below:


 


(i)           the audited consolidated
accounts of the Group together with the related audit and management letters
and all material and relevant correspondence between the Company and the
auditors of the Company concerning such Audited Accounts completed and approved
by the Board for the previous financial year within four months of the end of
each financial year;


 


(ii)          the unaudited consolidated
results of the Company for the previous financial year within 25 Business Days
of the end of each financial year;


 


(iii)         if so requested by NewCo and
at NewCo’s cost, interim consolidated un-audited accounts of the Group for the
period 1 December 2003 to 31 May 2004 provided that (i) NewCo shall only
be entitled to make such request where if considers that any Warranty has been
breached and (ii) the preparation of such interim accounts shall be at the cost
of the Company if, having been requested so to do, it fails to prepare the same
on or prior to 20 June 2004;


 


(iv)         a detailed draft Business
Plan for the Group for the following financial year one month before the end of
each financial year (including estimated major items of revenue and capital
expenditure) in such form and detail as NewCo reasonably require. The Business
Plan shall be broken down on a monthly basis, shall contain a cash flow
forecast and a balance sheet showing the projected position of the Group as at
the end of the following financial year;


 


(v)          monthly unaudited management
accounts including (1) a profit and loss account, balance sheet and cash flow
statement and cash flow forecast for the next three months (2) an analysis of
other revenue and (3) a comparison of results with the Budget within 20
Business Days after the end of each month; and


 


(vi)         such further financial or
management information as NewCo may on reasonable notice reasonably require
from time to time relating to the Group.


 


Each of the Managers shall use his
reasonable endeavours (according to his position in the Group) to procure full
and prompt performance by the Company of its obligations under this Clause
15.1.


 


15.2       Failure to provide information


 


If the Company fails to provide any of the
information provided for in this Clause 15 within the time period specified,
NewCo shall be entitled to appoint a firm of accountants to produce such
financial information at the Company’s expense. The Managers and the Company
shall use reasonable endeavours to procure, so far as they are able, that the


 


27

















 


Company provides all information and
assistance reasonably required by the accountants appointed pursuant to this
Clause 15.2.


 


15.3       Rights to information


 


15.3.1    NewCo and any
person designated by it may at all reasonable times discuss the affairs,
finances and Audited Accounts of the Company and the Group with its
Shareholders, officers and principal executives.


 


15.3.2    NewCo and a
firm of accountants nominated by NewCo at NewCo’s expense will be entitled to
examine the books and Audited Accounts of the Company upon reasonable notice
and, whether or not there is a B Director, the Company shall supply NewCo with
all information relating to the business affairs and financial position of the
Company as NewCo may on reasonable notice from time to time reasonably require.


 


15.4       Facility Documents


 


The Company shall deliver to NewCo at the same time as
it delivers the information to the Bank or its advisers, any information
(including any document) which is required to be given under the Facilities
Documents.


 


16          Confidentiality


 


16.1       Confidential Information


 


Subject to Clauses 11.2 and 16.4, the
parties shall use all reasonable endeavours to keep confidential and to ensure
that their respective officers, employees, agents and professional and other
advisers keep confidential any information (the “Confidential Information”):


 


16.1.1    relating to
the customers, business, assets or affairs of the Group which they may have or
acquire through ownership of an interest in the Company; or


 


16.1.2    relating to
the customers, business, assets or affairs of the other parties or any member
of their group which they may have or acquire through being a Shareholder or
making appointments to the Board or through the exercise of its rights or
performance of its obligations under this Agreement,


 


and no party may use for its own business
purposes or disclose to any third party any Confidential Information belonging
to another party without the consent of such other party.


 


16.2       Restrictions


 


This Clause 16 does not apply to:


 


16.2.1    information
which is or becomes publicly available (otherwise than as a result of a breach
of this Clause 16);


 


16.2.2    information
which is independently developed by the relevant party or acquired from a third
party, to the extent that it is acquired with the right to disclose it;


 


16.2.3    information
which was lawfully in the possession of the relevant party free of any
restriction on disclosure as can be shown by that party’s written records or
other reasonable evidence;


 


28

















 


16.2.4    information
which following disclosure under this Clause 16, becomes available to the
relevant party (as can be demonstrated by that party’s written records or other
reasonable evidence) from a source which is not bound by any obligation of
confidentiality in relation to such information;


 


16.2.5    subject to
clause 16.3 the disclosure by a party of Confidential Information to its
directors or employees or to those of its Associated Companies who need to know
that confidential information in its reasonable opinion for purposes relating
to this Agreement but those directors and employees shall not use that
Confidential Information for any other purpose;


 


16.2.6    the
disclosure of information to the extent required to be disclosed by law or any
court of competent jurisdiction, any governmental official or regulatory
authority (including the Financial Services Authority, the London Stock
Exchange PLC and the Panel on Takeovers and Mergers) or any binding judgment,
order or requirement of any other competent authority;


 


16.2.7    the
disclosure of information to any tax authority to the extent reasonably
required for the purposes of the tax affairs of the party concerned or any
member of its group;


 


16.2.8    the
disclosure to a party’s professional advisers of information reasonably
required to be disclosed for purposes relating to this Agreement;


 


16.2.9    any
announcement, or circular made, or information provided in accordance with the
terms of Clause 20.


 


16.3       Restrictions on forwarding Confidential
Information


 


Each party shall inform any shareholder,
officer, employee or agent or any professional or other adviser advising it in
relation to matters relating to this Agreement, or to whom it provides
Confidential Information (each a “Permitted Recipient”), that such information
is confidential and shall instruct them:


 


16.3.1    to keep it
confidential; and


 


16.3.2    not to
disclose it to any third party (other than those persons to whom it has already
been or may be disclosed to in accordance with the terms of this Clause 16) and
such party shall remain liable for any breach of confidentiality by its
Permitted Recipients to the same extent as would be the case if such breach had
been committed by the disclosing party itself.


 


16.4       Damages not an adequate remedy


 


Without prejudice to any other rights or
remedies which a party may have, the parties acknowledge and agree that damages
would not be an adequate remedy for any breach of this Clause 16 and the
remedies of injunction, specific performance and other equitable relief are
appropriate for any threatened or actual breach of any such provision and no
proof of special damages shall be necessary for the enforcement of the rights
under this Clause 16.


 


29

















 


16.5       Survival


 


16.5.1    A disclosing
party shall remain responsible for any breach of this Clause 16 by the person
to whom that Confidential Information is disclosed.


 


16.5.2    The
provisions of this Clause 16 shall survive the termination of this Agreement
for whatever cause.


 


17          Exit


 


17.1       Consultation


 


17.1.1    It is the
parties’ intention to effect a Sale or Listing within the period of two to five
years of the date of this Agreement. Except in respect of any matter where any
party could have a conflict of interest, the parties agree to keep one another
informed of all and any developments which might lead to any Sale or Listing.


 


17.1.2    If the
parties agree to seek an Exit, they shall co-operate fully with each other and
the Company and their respective financial and other advisers to achieve such a
Sale or a Listing in accordance with the rules and regulations of the
recognised investment exchange to which the application for Listing is made
(the “Exchange”)
and other applicable laws.


 


17.1.3    No Listing
shall be obtained unless all of the A, B and C Shares have either been
redeemed, are Shares of the class to be listed or are converted in accordance
with the Articles into Shares of the class to be Listed.


 


17.2       No Warranties


 


In relation to an Exit, NewCo will not give
any warranty or indemnity to any person (other than a warranty as to title to
any Shares of the Company to be sold by them at that time) nor any undertakings
in respect of the disposal of any of their Shares.


 


17.3       No restrictions on sale of Shares


 


Following Listing, NewCo and the Existing
Shareholders may deal freely in any Shares subject to any orderly marketing
undertakings which they may agree.


 


17.4       Information


 


NewCo shall be entitled to pass information
to third parties (subject to the third party agreeing to suitable
confidentiality restrictions) with a view to effecting or facilitating an Exit.


 


17.5       Managers undertaking on Exit


 


Each of the Managers acknowledges that to
assist in achieving a Sale or a Listing he may be requested:


 


17.5.1    to make
presentations and prepare information memoranda or a prospectus with a view to
effecting such Sale or Listing;


 


17.5.2    upon a Listing,
to undertake not to sell his shares or a proportion of his shares for a period
following the Listing, in the manner, to the extent and for such period as


 


30

















 


shall be recommended by the Board and NewCo
subject to the advice of the sponsors of the Listing; and


 


17.5.3    upon a
Listing or Sale, to provide warranties to potential acquirers or underwriters,


 


provided that no Manager shall be obliged to give any
such undertaking or warranty and each Manager undertakes that he will not seek
any additional benefit from NewCo or the Company as consideration for his
agreement to give any such undertaking or warranty.


 


18          Transfers and issue of Shares


 


18.1       Transfer restrictions for Managers


 


Save in respect of transfers permitted by
the Articles each of the Managers undertakes to NewCo not to, nor to agree to,
do any of the following other than with the consent of the Board by resolution
in respect of which a B Director has voted in favour:


 


18.1.1    pledge,
mortgage, charge or otherwise encumber any of their Shares or any interest in
any of their Shares;


 


18.1.2    sell,
transfer or otherwise dispose of, or grant any option over, any of their Shares
or any interest in its Shares; or


 


18.1.3    enter into
any agreement in respect of the votes attached to any of their Shares.


 


18.2       Assumption of obligations


 


The parties shall procure that no person
other than an existing Shareholder acquires any Shares either (i) from a party
hereto or (ii) in excess of 5% of the Ordinary Shares Capital unless it enters
into a Deed of Adherence.


 


19          Termination


 


19.1       If NewCo and / or it’s
Corporate Permitted Transferees and/or its Investment Funds have at the
relevant time received Cash Receipts equal to at least one and half times the
Investment Commitment, this agreement shall terminate forthwith in the event
that the Shares held by NewCo and its Corporate Permitted Transferees and its
Investment Funds (as defined in the Articles) shall at any time represent less
than 15 per cent of the issued share capital of the Company, such termination
to be without prejudice to the rights of the parties hereto in respect of any
antecedent breach of the terms of this Agreement.


 


19.2       This Agreement will
terminate forthwith upon the occurrence of a Conversion Event, such termination
to be without prejudice to the rights of the parties hereto in respect of any
antecedent breach of the terms of this Agreement.


 


20          Public
announcements


 


Save for the Press Announcement, no party
may make any public announcement or issue any circular relating to the Group or
this Agreement without the prior written approval of a B Director, the A
Director and another Director, such consent not to be unreasonably withheld.
This does not affect any announcement or circular required by law or any
regulatory body or the rules of any recognised stock exchange, but the party
with an


 


31

















 


obligation to make an announcement or issue
a circular shall consult with the other party/parties so far as is reasonably
practicable before complying with such obligation.


 


21          Notices


 


21.1       Addresses


 


Any notice, claim or demand in connection
with this Agreement shall be in writing in English (each a “Notice”)
and shall be sufficiently given if delivered or sent to the recipient at its
fax number, telex number or address set out in Schedule 1 or any
other fax number, telex number or address notified to the sender by the
recipient for the purposes of this Agreement and marked “IMPORTANT LEGAL
NOTICE” and in the case of a notice to NewCo a copy shall be sent to NewCo’s
Solicitors marked for the attention of “Graham White” and to HgCapital marked
for the attention of “Nic Humphries”. 
In the case of a notice to the Company, a copy shall also be sent to the
Company’s Solicitors, DLA at 3 Noble Street, London, EC2V 7EE, marked for the
attention of Mark Taylor.  Where sent to
a recipient’s address it may be sent by messenger or prepaid post (first class
in the case of service in the United Kingdom and airmail in the case of
international service). Any Notice shall be deemed to have been received on the
next working day in the place to which it is sent, if sent by telex, fax or
messenger, or 48 hours from the time of posting, if sent by post.


 


21.2       Death


 


If any such person dies, until the party
giving a Notice has received notice in writing of the grant of probate of his
or her will or letters of administration of his or her estate (or equivalent)
any Notice so given shall be as effectual as if he or she were still living.


 


22          Whole agreement and remedies


 


22.1       Whole agreement


 


22.1.1    This
Agreement and any other documents referred to herein contain the whole
agreement between the parties relating to the subject matter of this Agreement
at the date hereof to the exclusion of any terms implied by law which may be
excluded by contract and supersedes any previous written or oral agreement
between the parties in relation to the matters dealt with in this Agreement.


 


22.1.2    The Managers
and the Existing Shareholders hereby confirm that there are no other agreements
between any of them or any of them and the Company other than this Agreement
and any agreements referred to in this Agreement.


 


22.2       No inducement


 


Each of the parties acknowledges that it
has not been induced to enter into this Agreement by any representation,
warranty or undertaking not expressly incorporated into it.


 


22.3       Legal advice


 


Each party to this Agreement confirms it
has received proper legal advice relating to all the matters provided for in
this Agreement, including the provisions of this Clause 22, and


 


32



















agrees, having
considered the terms of this Clause 22 and the Agreement as a whole, that the
provisions of this Clause 22 are fair and reasonable.


 


23          General


 


23.1       Survival of rights, duties and obligations


 


Termination of
this Agreement for any cause shall not release a party from any liability which
at the time of termination has already accrued to another party or which
thereafter may accrue in respect of any act or omission prior to such
termination.


 


23.2       Conflict with the Articles


 


In the event
of any ambiguity, discrepancy or conflict between the provisions of this
Agreement and the Articles, it is intended that the provisions of this
Agreement shall prevail and accordingly the Managers, the Existing Shareholders
and NewCo shall exercise all voting and other rights and powers available to
them so as to give effect to the provisions of this Agreement and shall further
if necessary use reasonable endeavours to procure any required amendment to the
Articles. The Company is excluded from any obligation contained in this
Agreement to the extent that such obligation would constitute an unlawful
fetter on the Company’s statutory powers.


 


23.3       No partnership


 


Nothing in
this Agreement shall be deemed to constitute a partnership between the parties
nor constitute any party the agent of any other party for any purpose.


 


23.4       Release etc.


 


Any liability
to any party under this Agreement may in whole or in part be released,
compounded or compromised or time or indulgence given by that party in its
absolute discretion as regards any party under such liability without in any
way prejudicing or affecting its rights against any other party under the same
or a like liability, whether joint and several or otherwise.


 


23.5       Waiver


 


No failure of
any party to exercise, and no delay by it in exercising, any right, power or
remedy in connection with this Agreement (each a “Right”) shall operate as a
waiver of that Right, nor shall any single or partial exercise of any Right
preclude any other or further exercise of that Right or the exercise of any
other Right.


 


23.6       Variation


 


No variation
of this Agreement shall be effective unless in writing and signed by each of
the parties.


 


23.7       Successors and Assigns


 


23.7.1    The parties hereto agree that the benefit of every provision in this
Agreement is given to NewCo for itself and its successors in title.
Accordingly, NewCo (and its successors in title) may, without the consent of
the other parties hereto, assign to the beneficial owner for the time being of
the B Shares the benefit of all or any of


 


33

















 


the Managers’ and Existing Shareholders’ obligations
under this Agreement, and/or any benefit arising under or out of this
Agreement.


 


23.7.2    This Agreement shall not be capable of being assigned without the
consent of the parties hereto.


 


23.8       Further assurance


 


At any time
after the date of this Agreement the parties shall, and shall use all
reasonable endeavours to procure that any necessary third party shall, at the
cost of the relevant party execute such documents and do such acts and things
as that party may reasonably require for the purpose of giving to that party
the full benefit of all the provisions of this Agreement.


 


23.9       Invalidity


 


If any
provision in this Agreement shall be held to be illegal, invalid or
unenforceable, in whole or in part, under any enactment or rule of law, such
provision or part shall to that extent be deemed not to form part of this
Agreement but under the law of any jurisdiction, the legality, validity or
enforceability of such provision or part under the law of any other
jurisdiction and the legality, validity and enforceability of the remainder of
this Agreement shall not be affected.


 


23.10     Counterparts


 


This Agreement
may be entered into in any number of counterparts (whether original or
facsimile counterparts), all of which taken together shall constitute one and
the same instrument. Any party may enter into this Agreement by executing any
such counterpart.


 


23.11     Costs


 


The Company shall pay:


 


23.11.1  all the fees set out in the Fee Schedule; and


 


23.11.2  the annual costs incurred by NewCo in relation to its ongoing
administration and audit such amount not to exceed £12,000 plus disbursements
per annum.


 


23.11.3  upon the occurrence of a Conversion Event, provided that immediately
after the Conversion Event the B Shares shall have received the Acquisition
Price in full on each B Share, a fee to NewCo of:


 


(i)           £250,000 if the Investment Commitment at Completion is less than
£44,000,000; or


 


(ii)          £400,000 if the Investment Commitment at Completion is more than
£44,000,000.


 


23.12     Contracts (Rights of Third Parties) Act
1999


 


A person who
is not a party to this Agreement has no right under the Contracts (Rights of
Third Parties) Act 1999 to enforce any term of this Agreement.


 


34

















 


24          Governing law and submission to jurisdiction


 


24.1       Governing law


 


This Agreement
and the documents to be entered into pursuant to it, save as expressly referred
to therein shall be governed by and construed in accordance with English law.


 


24.2       Jurisdiction


 


All the
parties irrevocably agree that the courts of England are to have exclusive
jurisdiction to settle any dispute which may arise out of or in connection with
this Agreement and the documents to be entered into pursuant to it and
accordingly any proceedings arising out of or in connection with this Agreement
shall be brought in such courts.


 


24.3       Submission and Waiver


 


All the
parties irrevocably submit to the jurisdiction of such courts and waive any
objection to proceedings in any such court on the ground of venue or on the
ground that the proceedings have been brought in an inconvenient forum.


 


25          Authority
to Deliver


 


The signature
or sealing of this Agreement by or on behalf of a party shall constitute an
authority to the solicitors, or an agent or employee of the solicitors, acting
for that party in connection with this Agreement to deliver it as a deed on
behalf of that party.


 


35

















 


Schedule 1

Part 1

The Managers


 


	
  Name

  	
   

  	
  Address

  	
   

  	
  Number of
  Ordinary

  Shares held

  
	
  Stephen Ian Lee Barber

  	
   

  	
  Little Robertson

  Sleepers Hill

  Winchester

  Hampshire  S022 4NA

  	
   

  	
  304,250 C Shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Richard Charles Pearce

  	
   

  	
  18 Idsworth Close

  Horndean

  Hampshire  PO8 0DW

  	
   

  	
  58,501 C Shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Stephen Thompson

  	
   

  	
  23 Hazel Grove

  Clanfield

  Hampshire  PO8 0LE

  	
   

  	
  120,000 A Shares

  75,000 C Shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Paul William Hannah

  	
   

  	
  10 Avon Castle Drive

  Ringwood

  Hampshire  BH24 2BA

  	
   

  	
  1 A Share

  131,049 C Shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Paul Anthony Holmes

  	
   

  	
  The Woodpeckers

  54 The Avenue

  Fareham

  Hampshire  PO14 1NZ

  	
   

  	
  120,000 A shares

  81,400 C shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Anthony William Leonard

  	
   

  	
  20 College Close

  Rowlands Castle

  Hampshire  PO9 6AJ

  	
   

  	
  25,200 C Shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Matthew Cornell

  	
   

  	
  36 Parkstone Avenue

  Southsea

  Hampshire  PO4 0QZ

  	
   

  	
  65,817 C Shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Adam Peter Wray

  	
   

  	
  21 Beacon Square

  Emsworth

  Hampshire  PO10 7HU

  	
   

  	
  18,334 C Shares

  



 


36

















 


Schedule 1

Part 2

NewCo


 




	
  Name:

  	
   

  	
  XTX
  HgCapital Jersey Limited

  
	
   

  	
   

  	
   

  
	
  Registered Number:

  	
   

  	
  85828

  
	
   

  	
   

  	
   

  
	
  Registered Office:

  	
   

  	
  22 Grenville
  Street, St Helier, Jersey JE4 8PX

  
	
   

  	
   

  	
   

  
	
  Directors:

  	
   

  	
  Nic
  Humphries

  Gareth Essex-Cater

  Helen Grant

  
	
   

  	
   

  	
   

  
	
  Authorised Share Capital:

  	
   

  	
  £56,000,000
  divided into 56,000,000 ordinary shares of £1 each

  
	
   

  	
   

  	
   

  
	
  Issued Share Capital:

  	
   

  	
  £2

  
	
   

  	
   

  	
   

  
	
  Shareholders:

  	
   

  	
  Rowan
  Nominees Limited A/C RR 1 x £1 Ordinary Share

  Rowan Nominees Limited 1 x £1 Ordinary Share

  






 


37

















 


Schedule 1

Part 3

Existing Shareholders


 


	
  Name

  	
   

  	
  Address

  	
   

  	
  Number of
  Ordinary Shares held

  
	
  William Kennedy Wilkie

  	
   

  	
  Cranmere House

  East Lavant

  Chichester

  West Sussex  PO18 0AD

  	
   

  	
  1,624,774 A Shares

  145,987 C Shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Derek Holt

  	
   

  	
  Marley Wood

  Chilworth Road

  Chilworth

  Southampton  SO16 7LA

  	
   

  	
  790,226 A Shares

  94,453 C Shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Michael John Dinham

  	
   

  	
  Westfield House

  St Andrews Park

  Burnetts Lane

  Horton Heath  SO50 7DG

  	
   

  	
  1,050,000 A Shares

  55,200 C Shares

  



 


38

















 


Schedule 1

Part 4

Additional Warranty Covenantors


 


	
  Name

  	
   

  	
  Address

  
	
  Alison Griffiths

  	
   

  	
  Greenmount Cottage

  Shaldon

  Alton

  Hampshire  GU34 4DU

  
	
   

  	
   

  	
   

  
	
  David Martin

  	
   

  	
  4 Chilbolton Mews

  19 Chilbolton Avenue

  Winchester

  Hampshire  SO22 5HU

  
	
   

  	
   

  	
   

  
	
  Piotr Nahajski

  	
   

  	
  9 Christchurch Road

  Winchester

  Hampshire  SO23 9SR

  



 


39

















 


Schedule 2

Part 1

Particulars of the Company pre-completion of this Agreement


 




	
  Registered
  Number:

  	
   

  	
  4057904

  
	
   

  	
   

  	
   

  
	
  Registered
  Office:

  	
   

  	
  Langstone
  Road, Havant, Hampshire PO9 1SA

  
	
   

  	
   

  	
   

  
	
  Date and
  place of incorporation:

  	
   

  	
  22 August 2002,
  UK

  
	
   

  	
   

  	
   

  
	
  Directors:

  	
   

  	
  Stephen Ian
  Lee Barber

  Michael John Dinham

  Derek Holt

  David Hugh Martin

  Piotr Jan Nahajski

  William Kennedy Wilkie

  
	
   

  	
   

  	
   

  
	
  Secretary:

  	
   

  	
  Derek Holt

  
	
   

  	
   

  	
   

  
	
  Accounting
  reference date:

  	
   

  	
  30/11

  
	
   

  	
   

  	
   

  
	
  Auditors:

  	
   

  	
  PricewaterhouseCoopers
  LLP

  
	
   

  	
   

  	
   

  
	
  Authorised
  Share Capital:

  	
   

  	
  £450,000
  divided into:

  

  7,458,734 A Ordinary Shares of 1 pence each;

  1,856,250 B Ordinary Shares of 1 pence each and

  35,685,016 C Ordinary Shares of 1 pence each

  
	
   

  	
   

  	
   

  
	
  Charges:

  	
   

  	
  Debenture -
  HSBC Bank PLC

  






 


40

















 


Schedule 2

Part 2

Particulars of the Subsidiaries pre-completion of this Agreement


 




	
  Company
  Name:

  	
   

  	
  Xynet
  Limited

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Registered
  Number:

  	
   

  	
  2857525

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Registered
  Office

  	
   

  	
  Langstone
  Road, Havant,

  Hampshire

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date and
  place of incorporation:

  	
   

  	
  28/09/1993,
  UK

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Directors:

  	
   

  	
  Michael John
  Dinham

  Derek Holt

  William Kennedy Wilkie

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Secretary:

  	
   

  	
  Derek Holt

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accounting
  reference date:

  	
   

  	
  30/11

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Auditors:

  	
   

  	
  no auditors

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Authorised
  Share Capital:

  	
   

  	
  £10,000,000
  divided into £1 shares

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Issued and
  fully paid-up Share Capital:

  	
   

  	
  Registered
  Member

  	
   

  	
  Beneficial
  Owner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6,000,000

  Xyratex Technology Limited

  	
   

  	
  Xyratex
  Technology Limited

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Charges:

  	
   

  	
  (1)  Fixed and floating charge - HSBC Bank PLC

  

  (2)  Fixed and floating charge -
  Murray Johnstone Limited as trustee for the noteholders.

  	
   

  	
   

  






 


41

















 




	
  Company
  Name:

  	
   

  	
  Xyratex
  Technology Limited

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Registered
  Number:

  	
   

  	
  3134912

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Registered Office

  	
   

  	
  Langstone
  Road

  Havant, Hampshire

  PO9 1SA

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date and
  place of incorporation:

  	
   

  	
  6/12/1995,
  UK

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Directors:

  	
   

  	
  Derek Holt

  Michael John Dinham

  William Kennedy Wilkie

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Secretary:

  	
   

  	
  Derek Holt

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accounting
  reference date:

  	
   

  	
  31/11

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Auditors:

  	
   

  	
  PricewaterhouseCoopers

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Authorised
  Share Capital:

  	
   

  	
  £1,000
  divided into £1 shares

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Issued and
  fully paid-up Share Capital

  	
   

  	
  Registered
  Member

  	
   

  	
  Beneficial
  Owner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1 ordinary
  share

  Xyratex Group Limited

  	
   

  	
  Xyratex
  Group Limited

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Charges

  	
   

  	
  Fixed and floating charge - HSBC Bank PLC

  	
   

  	
   

  






 


42

















 




	
  Company
  Name:

  	
   

  	
  Xyratex
  International Limited

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Registered
  Number:

  	
   

  	
  3078508

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Registered
  Office

  	
   

  	
  Langstone
  Road

  Havant, Hampshire

  PO9 1SA

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date and
  place of incorporation:

  	
   

  	
  6/7/1995, UK

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Directors:

  	
   

  	
  Derek Holt

  Michael John Dinham

  William Kennedy Wilkie

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Secretary:

  	
   

  	
  Derek Holt

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accounting
  reference date:

  	
   

  	
  30/11

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Auditors:

  	
   

  	
  PricewaterhouseCoopers

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Authorised
  Share Capital:

  	
   

  	
  £100 divided
  into £1 shares

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Issued and
  fully paid-up Share Capital

  	
   

  	
  Registered
  Member

  	
   

  	
  Beneficial
  Owner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2 ordinary
  shares

  Xyratex Technology Limited

  	
   

  	
  Xyratex
  Technology Limited

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Charges

  	
   

  	
  Fixed and Floating charge - HSBC Bank PLC

  	
   

  	
   

  






 


43

















 




	
  Company
  Name:

  	
   

  	
  Xyratex
  Trustees Limited

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Registered
  Number:

  	
   

  	
  4057598

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Registered
  Office

  	
   

  	
  Langstone
  Road

  Havant, Hampshire

  PO9 1SA

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date and
  place of incorporation:

  	
   

  	
  22/8/2000,
  UK

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Directors:

  	
   

  	
  Derek Holt

  William Kennedy Wilkie

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Secretary:

  	
   

  	
  Derek Holt

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accounting
  reference date:

  	
   

  	
  30/11

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Auditors:

  	
   

  	
  no auditors

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Authorised
  Share Capital:

  	
   

  	
  £1,000 divided
  into £1 shares

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Issued and
  fully paid-up Share Capital

  	
   

  	
  Registered
  Member

  	
   

  	
  Beneficial
  Owner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2 ordinary
  shares

  Xyratex Technology Limited

  	
   

  	
  Xyratex
  Technology Limited

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Charges

  	
   

  	
  none

  	
   

  	
   

  






 


44

















 




	
  Company
  Name:

  	
   

  	
  Xyratex
  Holdings (UK) Limited

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Registered
  Number:

  	
   

  	
  3175681

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Registered
  Office

  	
   

  	
  Langstone
  Road

  Havant, Hampshire

  PO9 1SA

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date and
  place of incorporation:

  	
   

  	
  20/3/96, UK

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Directors:

  	
   

  	
  Derek Holt

  William Kennedy Wilkie

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Secretary:

  	
   

  	
  Derek Holt

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accounting
  reference date:

  	
   

  	
  30/11

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Auditors:

  	
   

  	
  PricewaterhouseCoopers

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Authorised
  Share Capital:

  	
   

  	
  £5,000,000
  divided into £1 shares

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Issued and
  fully paid-up Share Capital

  	
   

  	
  Registered
  Member

  	
   

  	
  Beneficial
  Owner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4,380,000
  ordinary shares

  Xyratex Technology Limited

  	
   

  	
  Xyratex
  Technology Limited

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Charges

  	
   

  	
  Debenture - HSBC Bank PLC

  	
   

  	
   

  






 


45

















 




	
  Company
  Name:

  	
   

  	
  Xyratex
  (Singapore) Limited

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Registered
  Number:

  	
   

  	
  02857496

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Registered
  Office

  	
   

  	
  Langstone
  Road

  Havant, Hampshire

  PO9 1SA

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date and
  place of incorporation:

  	
   

  	
  28/9/1993 UK

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Directors:

  	
   

  	
  Derek Holt

  Michael John Dinham

  William Kennedy Wilkie

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Secretary:

  	
   

  	
  Derek Holt

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accounting
  reference date:

  	
   

  	
  30/11

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Auditors:

  	
   

  	
  PricewaterhouseCoopers

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Authorised
  Share Capital:

  	
   

  	
  £1,000
  divided into £1 shares

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Issued and
  fully paid-up Share Capital

  	
   

  	
  Registered
  Member

  	
   

  	
  Beneficial
  Owner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2 ordinary
  shares

  Xyratex Technology Limited

  	
   

  	
  Xyratex
  Technology Limited

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Charges

  	
   

  	
  none

  	
   

  	
   

  






 


46

















 


	
  Company
  Name:

  	
   

  	
  Xyratex Integrated Systems Limited

  
	
   

  	
   

  	
   

  
	
  Registered
  Number:

  	
   

  	
  01926146

  
	
   

  	
   

  	
   

  
	
  Registered
  Office

  	
   

  	
  Langstone
  Road, Havant, Hampshire, PO9 1SA

  
	
   

  	
   

  	
   

  
	
  Date and
  Place of Incorporation:

  	
   

  	
  26
  June 1985, England & Wales

  
	
   

  	
   

  	
   

  
	
  Directors:

  	
   

  	
  Stephen
  Barber

  
	
   

  	
   

  	
  Paul Anthony
  Holmes

  
	
   

  	
   

  	
  Anthony
  William Leonard

  
	
   

  	
   

  	
   

  
	
  Secretary:

  	
   

  	
  Paul Anthony
  Holmes

  
	
   

  	
   

  	
   

  
	
  Accounting
  Reference Date:

  	
   

  	
  30 November

  
	
   

  	
   

  	
   

  
	
  Auditors:

  	
   

  	
  PricewaterhouseCoopers

  
	
   

  	
   

  	
   

  
	
  Authorised
  Share Capital:

  	
   

  	
  £4,000
  divided into 4,000,000 ordinary shares of £0.001 pence each

  
	
   

  	
   

  	
   

  
	
  Issued Share
  Capital:

  	
   

  	
  £4,000
  divided into 4,000,000 ordinary shares of £0.001 pence each

  
	
   

  	
   

  	
   

  
	
  Registered
  Member:

  	
   

  	
  Xyratex
  Technology Limited

  
	
   

  	
   

  	
   

  
	
  Charges:

  	
   

  	
  None

  



 


47

















 


	
  Company
  Name:

  	
   

  	
  Xyratex Holdings Inc

  
	
   

  	
   

  	
   

  
	
  Registered
  Number:

  	
   

  	
  3122528

  
	
   

  	
   

  	
   

  
	
  Registered
  Office:

  	
   

  	
  2031
  Concourse Drive, San Jose, California 95131, USA.

  
	
   

  	
   

  	
   

  
	
  Date and
  Place of Incorporation:

  	
   

  	
  22
  November 1999, State of Delaware, USA.

  
	
   

  	
   

  	
   

  
	
  Directors:

  	
   

  	
  Stephen
  Barber

  
	
   

  	
   

  	
  Mark Samson

  
	
   

  	
   

  	
  Chris
  Sharman

  
	
   

  	
   

  	
   

  
	
  Secretary:

  	
   

  	
  N/A

  
	
   

  	
   

  	
   

  
	
  Accounting
  Reference Date:

  	
   

  	
  30th
  November

  
	
   

  	
   

  	
   

  
	
  Authorised
  Share Capital:

  	
   

  	
  6,000,000
  stock at US$0.01 per unit of stock

  
	
   

  	
   

  	
   

  
	
  Issued Share
  Capital:

  	
   

  	
  3,000,000
  stock at US$0.01 per unit of stock

  
	
   

  	
   

  	
   

  
	
  Registered
  Member:

  	
   

  	
  Xyratex
  Group Limited

  
	
   

  	
   

  	
   

  
	
  Charges:

  	
   

  	
  None

  



 


48

















 


	
  Company Name

  	
   

  	
  Xyratex International Inc

  
	
   

  	
   

  	
   

  
	
  Registered
  Number:

  	
   

  	
  C1394516

  
	
   

  	
   

  	
   

  
	
  Registered
  Office

  	
   

  	
  2031
  Concourse Drive, San Jose, California 95131, USA.

  
	
   

  	
   

  	
   

  
	
  Date and
  Place of Incorporation:

  	
   

  	
  18
  December 1986, State of California USA

  
	
   

  	
   

  	
   

  
	
  Directors:

  	
   

  	
  Stephen
  Barber

  
	
   

  	
   

  	
  Mark Samson

  
	
   

  	
   

  	
  Chris
  Sharman

  
	
   

  	
   

  	
   

  
	
  Secretary:

  	
   

  	
  N/A

  
	
   

  	
   

  	
   

  
	
  Accounting
  Reference Date:

  	
   

  	
  30th
  November

  
	
   

  	
   

  	
   

  
	
  Authorised
  Share Capital:

  	
   

  	
  20,000,000
  units of stock

  
	
   

  	
   

  	
   

  
	
  Issued Share
  Capital:

  	
   

  	
  9,600,000
  units of stock

  
	
   

  	
   

  	
   

  
	
  Registered
  Member:

  	
   

  	
  Xyratex
  Holdings Inc

  
	
   

  	
   

  	
   

  
	
  Charges:

  	
   

  	
  None

  



 


49

















 


	
  Company
  Name:

  	
   

  	
  Xyratex Holdings (Netherlands) BV

  
	
   

  	
   

  	
   

  
	
  Registered
  Number:

  	
   

  	
  BV 563.396

  
	
   

  	
   

  	
   

  
	
  Registered
  Office

  	
   

  	
  Herengracht
  469, 1017 BS, Amsterdam.

  
	
   

  	
   

  	
   

  
	
  Date and
  Place of Incorporation:

  	
   

  	
  3rd
  June 1996, Netherlands.

  
	
   

  	
   

  	
   

  
	
  Director

  	
   

  	
  Stephen
  Barber

  
	
   

  	
   

  	
  Derek Holt

  
	
   

  	
   

  	
   

  
	
  Secretarial
  Agents:

  	
   

  	
  First
  Alliance Trust NV

  
	
   

  	
   

  	
   

  
	
  Accounting
  Reference Date:

  	
   

  	
  30th
  November

  
	
   

  	
   

  	
   

  
	
  Authorised
  Share Capital:

  	
   

  	
  NLG200,000
  divided into 200 shares of NLG 1,000 each.

  
	
   

  	
   

  	
   

  
	
  Issued Share
  Capital:

  	
   

  	
  180 shares
  of NLG 1,000 each.

  
	
   

  	
   

  	
   

  
	
  Registered
  Member:

  	
   

  	
  Xyratex
  Holdings (UK) Limited

  
	
   

  	
   

  	
   

  
	
  Charges:

  	
   

  	
  None

  



 


50

















 


	
  Registered
  Name:

  	
   

  	
  Bigbyte Europe BV

  
	
   

  	
   

  	
   

  
	
  Registered
  Number:

  	
   

  	
  BV 517.924

  
	
   

  	
   

  	
   

  
	
  Registered
  Office

  	
   

  	
  Herengracht
  469, 1017 BS, Amsterdam.

  
	
   

  	
   

  	
   

  
	
  Date and
  Place of Incorporation:

  	
   

  	
  28th
  April 1995, Netherlands.

  
	
   

  	
   

  	
   

  
	
  Directors:

  	
   

  	
  Stephen
  Barber

  
	
   

  	
   

  	
  First
  Alliance Trust NV

  
	
   

  	
   

  	
   

  
	
  Secretarial
  Agents:

  	
   

  	
  First
  Alliance Trust NV

  
	
   

  	
   

  	
   

  
	
  Accounting
  Reference Date:

  	
   

  	
  30th
  November

  
	
   

  	
   

  	
   

  
	
  Authorised
  Share Capital:

  	
   

  	
  NLG200,000
  divided into 100 shares of NLG2,000 each

  
	
   

  	
   

  	
   

  
	
  Issued Share
  Capital:

  	
   

  	
  NLG40,000
  divided into 400 shares of NLG100 each

  
	
   

  	
   

  	
   

  
	
  Registered
  Member:

  	
   

  	
  Xyratex
  Holdings (Netherlands) BV

  
	
   

  	
   

  	
   

  
	
  Charges:

  	
   

  	
  None

  



 


51

















 


	
  Company
  Name:

  	
   

  	
  Xyratex (Malaysia) Sdn Bhd

  
	
   

  	
   

  	
   

  
	
  Registered
  Number:

  	
   

  	
  450236-W

  
	
   

  	
   

  	
   

  
	
  Registered
  Office

  	
   

  	
  22nd
  Floor, Wisma Cyclecarri, 288 Jalan Raja Laut, 50350, Kuala Lumpur.

  
	
   

  	
   

  	
   

  
	
  Date and
  Place of Incorporation:

  	
   

  	
  16th
  October 1997, Malaysia

  
	
   

  	
   

  	
   

  
	
  Directors:

  	
   

  	
  Stephen
  Barber

  
	
   

  	
   

  	
  Neil Watson

  
	
   

  	
   

  	
  Yeow Seng
  Lee (known as YS Lee)

  
	
   

  	
   

  	
   

  
	
  Secretarial
  Agents:

  	
   

  	
  See Siew
  Cheng and Leong Shiak Wan.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Evatthouse
  Corporate Services Private Limited (an affiliate of PricewaterhouseCoopers),
  8 Cross Street, #11-00, PWC Building, Singapore, 048424.

  
	
   

  	
   

  	
   

  
	
  Accounting
  Reference Date:

  	
   

  	
  30th
  November

  
	
   

  	
   

  	
   

  
	
  Auditors:

  	
   

  	
  PricewaterhouseCoopers

  
	
   

  	
   

  	
   

  
	
  Authorised
  Share Capital:

  	
   

  	
  RM
  25,000,000 divided into 25,000,000 shares of RM1.00 each

  
	
   

  	
   

  	
   

  
	
  Issued Share
  Capital:

  	
   

  	
  RM
  15,000,000 divided into 15,000,000 shares of RM1.00 each

  
	
   

  	
   

  	
   

  
	
  Registered
  Member:

  	
   

  	
  Xyratex
  Technology Limited

  
	
   

  	
   

  	
   

  
	
  Charges:

  	
   

  	
  None

  



 


52

















 


Schedule 3

Warranties


 


1             Accounts and
Management Accounts


 


(i)            The
Accounts have been prepared in accordance with applicable law and on a basis
consistent with that adopted in the preparation of the audited accounts of the
Company for the previous financial year of the Company and in accordance with
all Financial Reporting Standards and Statements of Standard Accounting
Practice in force at the date hereof as made or adopted by the Accounting
Standards Board and all generally accepted accounting principles and practices
in the United Kingdom and give a true and fair view of the assets and
liabilities and state of affairs of the Group as at 30 November 2002 and
its profits and losses for the relevant period ended on the 30
November 2002.


 


(ii)           The
Management Accounts have been carefully prepared on a basis consistent with the
previous monthly management accounts of the Group and in accordance with the
accounting policies applied to the Accounts and each Manager is not aware of
any material inaccuracy in those management accounts.


 


2             Material Litigation


 


So far as the Warrantor is aware otherwise than as
claimant in the routine collection of debts arising in the ordinary course of
business for amounts not exceeding £200,000,


 


(i)            no Group Company is a claimant, defendant or otherwise a party to
any litigation which is in progress against or concerning the relevant Group
Company and pursuant to which damages in excess of £200,000 are claimed; and


 


(ii)           there are no circumstances which are likely to give rise to any such
litigation.


 


3             Material customers


 


So far as the
Warrantor is aware, no material customer of any Group Company has given notice
to the Company of its intention to cease to do business with such Group Company
and the Warrantor is not otherwise aware that any such material customer
intends to cease to do business or materially vary the terms on which such
customer does business with the relevant Group Company.


 


4             Assets


 


So far
as the Warrantor is aware, all of the material assets of the Group which are
described and included in the Accounts and/or the Management Accounts are:


 


(i)            legally and beneficially owned by a member of the Group; and


 


(ii)           are so owned free from all encumbrances; and


 


(iii)          there are no agreements or commitments to give or create, and no
claim has been made by any person entitled to any encumbrance over such assets;


 


5             Material contracts


 


So far
as the Warrantor is aware, no Group Company is in default in relation to any
material contract which would or is reasonably likely to have a material and
adverse effect


 


53

















 


on the
financial or trading position of any member of the Group and so far as the
Warrantor is aware, all such contracts are valid and binding obligations on the
parties thereto.


 


6             Warranties in relation to the Company


 


The particulars of the Company and the Subsidiaries
set out in Schedule 2 are correct.


 


7             Warranties in relation to the Managers


 


7.1         Managers free to become Directors
etc.


 


The Warrantor
is free to be or become or continue to be an employee, director and shareholder
of the Company and to devote the whole of his time and attention to the
business and affairs of the Company and he is not bound by any restriction,
covenant or other obligation or commitment which would in any way impair his
ability so to do.


 


7.2         The Managers


 


Save as
disclosed by the Warrantor in his Managers’ Questionnaires:


 


7.2.1      there are no existing contracts or arrangements to which the Company
or any Subsidiary is a party and in which he and/or any person who is a
connected person with him is interested;


 


7.2.2      he is neither alone or jointly with or as manager, adviser,
consultant, agent or employee of any person directly or indirectly engaged in
any business other than that of the Company and its Subsidiaries;


 


7.2.3      he is not concerned or interested in any way in any business
competing with that carried on by the Company or any Subsidiary or the business
of any supplier or customer of the Company or any Subsidiary; and


 


7.2.4      he has never been charged with or convicted of any criminal offence
other than a road traffic offence (except one for which a custodial sentence,
whether suspended or not, was imposed) nor have bankruptcy or any analogous
proceedings been brought or threatened in respect of him, and he is not aware
of any facts or matters which they believe might give rise to any such criminal
or bankruptcy proceedings.


 


7.3         Managers’ Questionnaires


 


The answers
given by him in his Manager’s Questionnaire are true and accurate save for the
statement as to the his net assets which is materially accurate.


 


7.4         Brokerage or Commissions


 


There is no
agreement or arrangements under which he or any of his connected persons is to
receive from any person and, so far as he is aware, no person (other than SSSB
is entitled to receive from any Group Company, any finders’ or other fee,
brokerage or commission in connection with this Agreement or any of the matters
contemplated or referred to in those agreements.


 


7.5         Statutory Declaration under
Section 155


 


He is, and
knows of no reason why he will not remain, of the opinion required by
section 156(2) of the Act in relation to the granting by the Company (and
each or any of its Subsidiary) of security for the secured facilities under the
Facility Documents so as to be


 


54

















 


able to give
the statutory declaration for at least the three months following the date of
this Agreement.


 


7.6         General


 


This Agreement
constitutes a legal, valid and binding obligation on him enforceable in
accordance with its terms.


 


7.7         Initial Business Plan


 


7.7.1      All factual information contained in the Initial Business Plan was
when given and is at the date of this Agreement true and accurate in all
material respects. The financial forecasts, projections and estimates contained
in the Initial Business Plan have been diligently prepared have been carefully
considered by the Warrantor and are believed to be fair and reasonable having
regard to the information available and the market conditions prevailing at the
time of their preparation and are not in need of any amendment.


 


7.7.2      All material assumptions on which the Initial Business Plan has been
based have been carefully considered by him and are honestly believed to be
reasonable or made on reasonable grounds having regard to the information
available and the market conditions prevailing at the time of their preparation
and are not in need of any amendment, modification or other alteration;


 


7.8         Reports


 


7.8.1      He has read the Accountants Report and he:


 


(i)           is not
aware of any material inaccuracy as to the factual matters in the Accountants’
Report;


 


(ii)          believes
the assumptions upon which the forecasts and projections in respect of the
three years ending 30 November 2005 are based, to be reasonable at the
present time in all material respects to the extent that they are consistent
with those set out in the Initial Business Plan;


 


(iii)         does not
believe the Accountants’ Report taken as a whole to be misleading in any
material respect.


 


7.8.2      He has read the Legal Due Diligence Report and:


 


(i)           he confirms that so far as he is aware all statements of fact
therein are true and accurate in all material respects;


 


(ii)          with the exception of those matters which are specifically excluded
from the scope of the Legal Due Diligence Report, confirms that he is not aware
of any material facts or matters relating to the Business not stated in the
Legal Due Diligence Report, the omission of which makes any statements
contained therein misleading in any material respect;


 


(iii)         does not materially disagree with any of the expressions of opinion
stated therein;


 


provided
always that for the purposes of this warranty the Legal Due Diligence Report
shall be deemed to only include:-


 


55

















 


(i)           the
Executive Summary;


 


(ii)          the
Group Structure Chart contained at Annex 5;


 


(iii)         Annex 6;


 


(iv)         Annex 7;


 


(v)          the
list of properties currently occupied by the Group as contained on pages 1 and
2 of Annex 10;


 


(vi)         paragraph
1.2 and Schedule 1 of Annex 11;


 


(vii)        Annex 12;


 


(viii)       Annex 13;
and


 


(ix)          Annex
15.


 


56

















 


Schedule 4

Part 1

Matters to be effected on or prior to signature of this Agreement


 


1             the delivery to NewCo of the Reports and the Business Plan;


 


2             the delivery to NewCo of the Manager’ Questionnaires;


 


3             the receipt by NewCo of references satisfactory to NewCo in respect
of each Manager;


 


4             the delivery to NewCo of the Disclosure Letter;


 


5             the delivery to NewCo of the Existing Shareholder Irrevocable
Undertakings and the Managers Irrevocable Undertakings and the Additional
Warranty Covenantors Irrevocable Undertakings;


 


6             the delivery to NewCo of duly executed Share Repurchase Agreements
signed by the Selling Shareholder;


 


7             the delivery to the Company of an opinion letter from Mourants
confirming that NewCo is duly incorporated and has the required capacity to
enter into this Agreement and that the execution by NewCo of this Agreement has
been duly authorised.


 


57

















 


Schedule 4

Part 2

Matters to be effected on or prior to Completion of this Agreement


 


1             The passing of directors’ and shareholders’ resolutions in the
agreed form at a duly convened Board meeting and an extraordinary general
meeting convened at short notice inter alia to:


 


(a)           authorise the allotment of the NewCo Shares;


 


(b)          adopt the New Articles;


 


(c)           approve the Share Repurchase and the transfer of the shares pursuant
to the Offer;


 


(d)          issue the NewCo Shares credited as fully paid to NewCo and enter its
name in the register of members in respect thereof;


 


(e)          deliver
to NewCo certificates for the Shares subscribed by them;


 


(f)           appoint
Nic Humphries and such
other person as nominated by NewCo (if any) as
directors of the Company;


 


(g)          decrease
the authorised share capital of the Company to £300,000;


 


(h)          adopt
the Xyratex Group Limited 2003 Stock Option Plan.


 


2             NewCo shall pay to the Company the sum due from it/them pursuant to
Clause 3.2 by telegraphic transfer to the bank account of the Company or as it
shall direct.


 


3             The Articles of Association of NewCo shall be altered so as to
incorporate the amendments set out in the attached draft.


 


58

















 


Schedule 5

Deed of Adherence


 


THIS DEED is made the [•] day of
[•] by [•]


 


WHEREAS


 


(A)         By a [transfer]/[subscription for shares] dated [of even date
herewith] [•] [(the “Transferor”)
transferred to [•] (the “Transferee”)]
[(the “Subscriber”) subscribed
for] [•] Shares of [•] each in the capital of [•]
(the “Company”) (the “Shares”).


 


(B)          This Agreement is entered into in compliance with the terms of
Clause 18.2 of an Agreement dated [•] made between (1) the Managers (2)
NewCo; (3) the Company; (4) the Existing Shareholders; and (5) the Additional
Warranty Covenantors (all such terms as are therein defined) (the “Subscription Agreement”).


 


It is hereby agreed as follows:


 


1             The [Transferee] [Subscriber] hereby agrees to assume the benefit of
the rights [of the Transferor] under the Subscription Agreement in respect of
the Shares and (subject to Clause [4] below) hereby agrees to assume and
assumes the burden of the [Transferor’s] obligations under the Subscription
Agreement to be performed after the date hereof in respect of the Shares.


 


2             The [Transferee] [Subscriber] hereby agrees to be bound by the
Subscription Agreement in all respects as if it were a party to the
Subscription Agreement as [an Investor] [a Manager] and to perform[:


 


2.1         all the obligations of the Transferor in that capacity thereunder;
and


 


2.2         all the obligations expressed to be imposed on such a party to the
Subscription Agreement


 


[in both
cases], to be performed or on or after the date hereof and subject always to
Clause [4].


 


3             This Agreement is made for the benefit of:


 


3.1         the parties to the Subscription Agreement; and


 


3.2         any other person or persons who may after the date of the
Subscription Agreement (and whether or not prior to or after the date hereof)
assume any rights or obligations under the Subscription Agreement and be
permitted to do so by the terms thereof,


 


and this
Agreement shall be irrevocable for so long as the [Transferee] [Subscriber]
holds any Ordinary Shares in the capital of the Company without the consent of
the Investors.


 


4             [For the avoidance of doubt:


 


4.1         no transferee who acquires shares from a Manager shall be liable
under any of the Warranties (as defined in the Subscription Agreement)
liability for which shall remain with the Manager; and


 


59

















 


4.2         nothing in this Deed shall release the Transferor from any liability
in respect of any obligations under the Subscription Agreement due to be
performed prior to the date hereof.]


 


5             Each party to the Subscription Agreement does not:


 


5.1         make any representation or warranty or assumes any responsibility
with respect to the legality, validity, effectiveness, adequacy or
enforceability of the Subscription Agreement (or any agreement entered into
pursuant thereto); or


 


5.2         make any representation or warranty or assumes any responsibility
with respect to the content of any information regarding the Company [or any
member of the group] or which otherwise relates to the
[acquisition]/[subscription] of shares in the Company; or


 


5.3         assume any responsibility for the financial condition of the company
[or any member of the Group] or any other party to the Agreement or any other
document or for the performance and observance of the Agreement by the Company
or any other party to the Agreement (save as expressly provided therein),


 


and any and
all conditions and warranties, whether express or implied by law or otherwise,
are excluded save for the representations, warranties and undertakings
contained in the Warranties.


 


6             This Agreement shall be governed by and construed in accordance with
the laws of England and Wales.


 


In witness whereof this Deed of Adherence has been duly executed as a deed.


 


60

















 


Schedule 6

Existing Incentive Schemes


 


(i)            Xyratex
plc Unapproved Company Share Option Plan


 


(ii)           Xyratex
plc 2001 Approved Company Share Option Plan (No.2)


 


(iii)          Unapproved
Schedule to the Xyratex plc 2001 Approved Company Share Option Plan (No.2)


 


(iv)          NSO
Plan (Stock Option Plan for Employees of Xyratex Limited)


 


(v)           Ex-Employee
Plan (Stock Option Plan for Non-Employees of Xyratex plc)


 


(vi)          ISO
Plan (Xyratex plc 2000 Stock Option Plan)


 


(vii)         Xyratex
Group Limited 2002 Employee Stock Purchase Plan


 


(viii)        Xyratex
plc Phantom Share Plan (adopted 14 November 2001)


 


61

















 


ATTESTATIONS


 


 


In witness whereof this
Agreement has been duly executed as a deed.


 


 


	
  SIGNED as a
  DEED by STEPHEN IAN LEE BARBER in
  the presence of:

  	
   

  	
  }

  	
   

  	
  STEPHEN IAN
  LEE BARBER

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SIGNED as a
  DEED by RICHARD CHARLES PEARCE in
  the presence of:

  	
   

  	
  }

  	
   

  	
  RICHARD
  CHARLES PEARCE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SIGNED as a
  DEED by STEPHEN THOMPSON in the
  presence of:

  	
   

  	
  }

  	
   

  	
  RICHARD
  CHARLES PEARCE

  
	
   

  	
   

  	
   

  	
   

  	
  AS ATTORNEY
  FOR AND ON BEHALF OF STEPHEN THOMPSON

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SIGNED as a
  DEED by PAUL WILLIAM HANNAH in
  the presence of:

  	
   

  	
  }

  	
   

  	
  RICHARD
  CHARLES PEARCE

  
	
   

  	
   

  	
   

  	
   

  	
  AS ATTORNEY
  FOR PAUL HANNAH

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SIGNED as a
  DEED by PAUL ANTHONY HOLMES in
  the presence of:

  	
   

  	
  }

  	
   

  	
  PAUL ANTHONY
  HOLMES

  



 


62

















 


	
  SIGNED as a
  DEED by ANTHONY WILLIAM LEONARD in
  the presence of:

  	
   

  	
  }

  	
   

  	
  PAUL ANTHONY
  HOLMES

  

  AS ATTORNEY FOR WILLIAM LEONARD

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SIGNED as a
  DEED by MATTHEW CORNELL in the
  presence of:

  	
   

  	
  }

  	
   

  	
  RICHARD
  CHARLES PEARCE

  
	
   

  	
   

  	
   

  	
   

  	
  AS ATTORNEY
  FOR MATTHEW CORNELL

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SIGNED as a
  DEED by ADAM PETER WRAY in the
  presence of:

  	
   

  	
  }

  	
   

  	
  PAUL ANTHONY
  HOLMES

  
	
   

  	
   

  	
   

  	
   

  	
  AS ATTORNEY
  FOR ADAM WRAY

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SIGNED as a
  DEED by MICHAEL JOHN DINHAM in
  the presence of:

  	
   

  	
  }

  	
   

  	
  MICHAEL JOHN
  DINHAM

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SIGNED as a
  DEED by DEREK HOLT in the
  presence of:

  	
   

  	
  }

  	
   

  	
  D W BRADLEY

  
	
   

  	
   

  	
   

  	
   

  	
  AS ATTORNEY

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SIGNED as a
  DEED by DAVID HUGH MARTIN in the
  presence of:

  	
   

  	
  }

  	
   

  	
  DAVID HUGH
  MARTIN

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SIGNED as a
  DEED by PIOTR JAN NAHAJSKI in
  the presence of:

  	
   

  	
  }

  	
   

  	
  PIOTR JAN
  NAHAJSKI

  



 


63

















 


	
  SIGNED as a
  DEED by WILLIAM KENNEDY WILKIE in
  the presence of:

  	
   

  	
  }

  	
   

  	
  WILLIAM
  KENNEDY WILKIE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SIGNED as a
  DEED by ALISON GRIFFITHS in the
  presence of:

  	
   

  	
  }

  	
   

  	
  ALISON
  GRIFFITHS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SIGNED as a
  DEED by XTX HgCapital Holdings Jersey acting by power of attorney

  	
   

  	
  }

  	
   

  	
  NIC
  HUMPRHIES

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SIGNED as a
  DEED by Xyratex Group Limited acting by two Directors or one Director and the
  Secretary

  	
   

  	
  }

  	
   

  	
  MICHAEL JOHN
  DINHAM

  STEPHEN IAN LEE BARBER

  



 


64