CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(b)(4),
AND 240.24b-2
--------------------------------------------------------------------------------
AGREEMENT
--------------------------------------------------------------------------------
BETWEEN
UTi SPAIN SL.
AND
Xx. Xxxxxx Xxxx Xxxxxxx Xxxxxxx
Xx. Xxxxxxx Xxxxxx Xxxxxxx Xxxxxxx
Xx. Xxxx Xxxxx Xxxxxxx Xxxxxxx
Xx Xxxx Xxxxxxx Xxxxxxx Xxxxxxx,
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
AGREEMENT
In Madrid, on January 25, 2002.
GATHERED
ON ONE PART,
Xx. Xxxxxx Xxxx Xxxxxxx Xxxxxxx, of legal age, Economist, married in joint and
several marriage regime, with domicile at [...***...], and tax identification
number [...***...], and his wife, Mrs. Xxxxxxx de la Xxxx Xxxxxxxxx-Lascoiti, of
legal age, with same domicile, and tax identification number [...***...];
ON THE OTHER PART,
Xx. Xxxxxxx Xxxxxx Xxxxxxx Xxxxxxx, of legal age, Economist, single, with
domicile at [...***...], and tax identification number [...***...];
ON THE OTHER PART,
Xx. Xxxx Xxxxx Xxxxxxx Xxxxxxx, of legal age, Director, married in joint and
several economic marriage regime, with domicile at [...***...], and tax
identification number [...***...], and his wife Mrs. Xxxxxxx de la Xxxx
Xxxxxxxxx-Lascoiti, of legal age, with same domicile, and tax identification
number [...***...];
ON THE OTHER PART,
Xx. Xxxx Xxxxxxx Xxxxxxx Xxxxxxx, of legal age, Economist, single, with domicile
at [...***...], and tax identification number [...***...];
AND ON THE OTHER PART,
Xx. Xxxxx Xxxxxxx Xxxxx Xxxxxxxx, of legal age, lawyer, married, with
professional domicile at [...***...], and tax identification number [...***...];
INTERVENE
(1) Xx. Xxxxx Xxxxxxx Xxxxx Xxxxxxxx, in the name and behalf of UTi Spain,
S.L., a company duly incorporated and existing under the laws of Spain, by
virtue of the public deed granted before the Public Notary of Madrid Xx.
Xxxxxxx Xxxx Xxxxxxx, on January 2, 2002 with number 3 of his public
record, with Tax Identity Code [...***...], with registered office at
Xxxxx xx xx Xxxxxxxxxx 00, 0 xxxxxxx Xxxxx., 00000 Xxxxxx, and not yet
registered at the Commercial Registry of Madrid (hereinafter referred to
as the "PURCHASER").
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
2
He acts as legal representative of the Sole Administrator of the
Purchaser, post for which was appointed upon incorporation of the Company.
(2) Xx. Xxxxxx Xxxx Xxxxxxx Xxxxxxx, Xx. Xxxxxxx Xxxxxx Xxxxxxx Xxxxxxx, Xx.
Xxxx Xxxxx Xxxxxxx Xxxxxxx and Xx. Xxxx Xxxxxxx Xxxxxxx Xxxxxxx, in their
own name and behalf.
All the individuals referred to in section (2) shall be hereinafter
jointly referred to as the "SELLERS" and each of them a "SELLER".
(3) Xx. Xxxxx Xxxxxxx Xxxxx Xxxxxxxx, acting also in the name and on behalf of
UTi Worldwide Inc, a company duly incorporated under the laws of British
Virgin Islands, duly incorporated and in existence, with corporate
domicile at 0 Xxxxxxxx Xxxxxx, Xxxxxxx Xxxxx, Xxxx Town Tortola, British
Virgin Islands (hereinafter, "UTI WORLDWIDE"), registered with number
141257 of the Commercial Registry of British Virgin Islands.
He acts by virtue of the powers of attorney granted in Rancho Xxxxxxxxx,
United States of America, on December 12, 2001 before Xxx. Xxxxx Xxxxx,
Public Notary, duly apostilled.
The Purchaser and the Sellers will be hereinafter jointly referred to as the
"PARTIES" and each of them as a "PARTY".
WHEREAS
I. The Purchaser belongs to a group of companies whose holding company is UTi
Worldwide. This group to be referred hereinafter as the "UTI GROUP". UTi
Group has a wide experience in the field of transportation where GRUPO SLI
& UNION, S.L. and its subsidiaries carry out their business, with which
group the UTi Group has been maintaining a close commercial relationship
during the two last decades.
II. GRUPO SLI & UNION, S.L. (hereinafter the "COMPANY") is a company duly
incorporated and existing under the laws of Spain by virtue of Deed of
Incorporation granted before the Public Notary of Madrid, Xx. Xxxx Xxxx
Xxxxxx, on July 29, 1998, with number 3,718 of his public record; it is
registered with the Commercial Registry of Madrid, at Volume 13548, Sheet
144, Section 8, Page M-220315; its Tax Identification Number (C.I.F) is
[...***...] and its registered office is at Oficina 000, Xxxxxx xx Xxxxx
Xxxxx xx Xxxxxxx, Xxxxxx.
III. The current share capital of the Company amounts to Euros 2,241,775.15
divided into 37,300 shares ("participaciones sociales"), numbers 1 to
37,300, both inclusive, of Euro 60.10 nominal value each, fully subscribed
and paid up.
The Sellers are the absolute legal owners of the shares representing one
hundred per cent (100%) of the share capital of the Company (hereinafter
the "SHARES"), in the following way and by virtue of the titles explained
below, as shown in the Shareholders' Register Book of the Company:
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
3
(i) Xx. Xxxxxx Xxxx Xxxxxxx Xxxxxxx is the owner of [...***...] shares,
numbers [...***...] to [...***...], both inclusive, by virtue of:
* shares numbers [...***...] to [...***...], both inclusive,
subscription and disbursement in the public deed of
incorporation, and
* shares numbers [...***...] to [...***...], both inclusive,
purchased from Mr. [...***...] effected by virtue of an
agreement intervened by the Stock Broker Xx. Xxxxxxxx Xxxxxx
Xxxxxx on August 3, 2000.
(ii) Xx. Xxxxxxx Xxxxxx Xxxxxxx Xxxxxxx is the owner of [...***...]
shares, numbers [...***...] to [...***...], both inclusive, by
virtue of subscription and disbursement in the public deed of
incorporation.
(iii) Xx. Xxxx Xxxxx Xxxxxxx Xxxxxxx is the owner of [...***...] shares,
numbers [...***...] to [...***...], both inclusive, by virtue of:
* shares numbers [...***...] to [...***...], subscription and
disbursement in the public deed of incorporation, and
* shares numbers [...***...] to [...***...], both inclusive,
purchased from Xx. Xxxx Xxxxxxx Xxxxxxx Xxxxxxx effected by
virtue of an agreement intervened by the Stock Broker Xx.
Xxxxxxxx Xxxxxx Xxxxxx on August 3, 2000.
(iv) Xx. Xxxx Xxxxxxx Xxxxxxx Xxxxxxx is the owner of [...***...] shares,
numbers [...***...] to [...***...], both inclusive, by virtue of
subscription and disbursement in the public deed of incorporation.
The Shares are free of any liens, charges, encumbrances, third party
rights or restrictions on their transferability (save for the
first-refusal-rights set out in Articles 10, 11 and 12 of the Company's
By-laws as registered with the Commercial Register) and are equal in
rights.
IV. The Company is the absolute legal owner, directly or indirectly, of the
following shares:
IV.1 [...***...] shares of the company SERVICIOS LOGISTICOS INTEGRADOS SLI,
S.A., numbers [...***...] to [...***...], both inclusive, representing
[...***...] per cent ([...***...]%) of the shares of its share capital, by
virtue of the in-kind contribution of said shares to the share capital of
the Company effected upon its incorporation.
SERVICIOS LOGISTICOS INTEGRADOS SLI, S.A. was incorporated under the name
of SOCIEDAD LIMITADA DE SERVICIOS LOGISTICOS INTEGRADOS TACISA, S.L. by
virtue of Deed of Incorporation granted on October 4, 1991 before the
Public Notary of Madrid, Xx. Xxxxxx Xxxxxxxxxx Xxxxxx, with number 1,377
of his public record; its By-laws were adapted to the currently in force
Joint Stock Companies' Act by virtue of deed granted on January 27, 1993,
before the Notary of Madrid Xx. Xxxxxxx
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
4
Xxxxx xx Xxxxxx y Pala with number 1,959 of his public record; its
registered office is at Madrid, Xxxxx xx xxx Xxxxxxxx 00 and it is
registered at the Madrid Commercial Registry, Volume 1,718, Page 14,
Section 8, Sheet M-31,110; its Tax Identification Code (C.I.F.) is
[...***...].
Its current share capital amounts to [...***...] Euros, divided into
[...***...] shares, numbers 1 to [...***...], both inclusive, of
[...***...] Euros par value each, fully subscribed and paid up. All of its
shares are free of any liens, charges, encumbrances, third party rights or
restrictions on their transferability (save for the restrictions to their
free transferability set out in this Company's By-laws as registered with
the Commercial Register).
The remaining shares of SERVICIOS LOGISTICOS INTEGRADOS SLI, S.A., i.e.
shares number [...***...] to [...***...], both inclusive, are held by:
(i) Shares number [...***...] to [...***...], both inclusive, Xx. Xxxx
Xxxxx Xxxxxxx Xxxxxxx, by virtue of the sale and purchase public
deed granted on January 23, 2002 before the Public Notary of Madrid,
Xx. Xxxxxxx Xxxxx de Madrid y Pala with number 276 of his public
record.
(ii) Shares number [...***...] to [...***...], both inclusive, Xx. Xxxxxx
Xxxx Xxxxxxx Xxxxxxx, by virtue of the sale and purchase public deed
granted on January 23, 2002 before the Public Notary of Madrid, Xx.
Xxxxxxx Xxxxx de Madrid y Pala with number 276 of his public record.
IV.2 5,904 shares of the company UNION DE SERVICIOS LOGISTICOS INTEGRADOS,
S.A., numbers 1 to 5,904, both inclusive, representing one hundred per
cent (100%) of shares of its share capital, by virtue of:
(i) Shares numbers 1 to 5,000, both inclusive, by the in-kind
contribution of said shares to the share capital of the Company
effected upon its incorporation.
(ii) Shares numbers 5,001 to 5,904, both inclusive, by virtue of Capital
Increase Deed granted before the Public Notary of Madrid, Xx.
Xxxxxxx Xxxx Xxxxxx Xxxxxxxxx, dated on December 20, 1999, with
number 2,266 of his public record.
UNION DE SERVICIOS LOGISTICOS INTEGRADOS, S.A. was incorporated by virtue
of Deed of Incorporation granted on July 12, 1993 before Public Notary of
Madrid, Xx. Xxxxxxx Xxxxx de Madrid y Pala with number 3,025 of his public
record; its registered office is at Madrid, Paseo de las Delicias 65 and
it is registered at the Madrid Commercial Registry, Volume 6,781, Page 81,
Section 8, Sheet M-110,424; its Tax Identification Code (C.I.F.) is
[...***...].
Its current share capital amounts to 354,837.54 Euros, divided into 5,904
shares, numbers 1 to 5,904, both inclusive, of 60.01 Euros par value each,
fully subscribed and paid up. All of its shares are free of any liens,
charges, encumbrances, third party rights or restrictions on their
transferability (save for the restrictions to their free transferability
set out in this Company's By-laws as registered with the Commercial
Register).
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
5
IV.3 50,000 shares of the company WEAR LINK, S.L., numbers 1 to 50,000, both
inclusive, representing one hundred per cent (100%) of shares of its share
capital, by virtue of the in-kind contribution of said shares to the share
capital of the Company effected upon its incorporation.
WEAR LINK, S.L. was incorporated by virtue of the deed granted on July 1,
1994 before the Public Notary of Madrid, Xx. Xxxxxxx Xxxxx de Madrid y
Pala, with number 3,323 of his public record; its By-laws were adapted to
the currently in force Limited Liability Companies Act by virtue of Deed
granted on May 26, 1998 before the Public Notary of Madrid, Xx. Xxxxxxx
Xxxxx de Madrid y Pala, with number 2,128 of his public record; its
registered office is at Madrid, Paseo de las Delicias 65 and it is
registered at the Madrid Commercial Registry, Volume 179, Page 135,
Section 8, Sheet Gu-1068; its Tax Identification Code (C.I.F.) is
[...***...].
Its current share capital amounts to 300,506.05 Euros, divided into 50,000
shares, numbers 1 to 50,000, both inclusive, of 6.01 Euros par value each,
fully subscribed and paid up. All of its shares are free of any liens,
charges, encumbrances, third party rights or restrictions on their
transferability (save for the restrictions to their free transferability
set out in this Company's By-laws as registered with the Commercial
Register).
IV.4 1,500 shares of the company TECNICOS ASESORES DE SEGUROS BROKERS
CORREDURIA DE SEGUROS, S.A., numbers 1 to 1,500, both inclusive,
representing one hundred per cent (100%) of shares of its share capital,
by virtue of the in-kind contribution of said shares to the share capital
of the Company effected upon its incorporation.
TECNICOS ASESORES DE SEGUROS BROKERS CORREDURIA DE SEGUROS, S.A. was
incorporated by virtue of by virtue of Deed of Incorporation, granted on
October 21, 1987 before the Public Notary of Madrid, Xx. Xxxxxx Xxxx
Jarabo Xxxxxxx, with number 3,323 of his public record; its By-laws were
adapted to the currently in force Joint Stock Companies' Act by virtue of
Deed granted on May 22, 1992 before the Public Notary of Madrid Xx. Xxxx
Xxxxxxxxxxx Xxxx, with number 4,558 of his public record; its registered
office is at Madrid, Xxxxx xx xxx Xxxxxxxx 00 and it is registered at the
Madrid Commercial Registry, Volume 3,175, Page 82, Section 8, Sheet
M-54,200; its Tax Identification Code (C.I.F.) is [...***...].
Its current share capital amounts to 90,151.82 Euros, divided into 1,500
shares, numbers 1 to 1,500, both inclusive, of 60.10 Euros par value each,
fully subscribed and paid up. All of its shares are free of any liens,
charges, encumbrances, third party rights or restrictions on their
transferability (save for the restrictions to their free transferability
set out in this Company's By-laws as registered with the Commercial
Register).
IV.5 3,006 shares of the company VALUE 4 LOGISTICS, S.L., numbers 1 to 3,006,
both inclusive, representing one hundred per cent (100%) of shares of its
share capital, by virtue of subscription and disbursement of the same
effected in the public deed of incorporation.
VALUE 4 LOGISTICS, S.L. was incorporated by virtue of the public deed
granted on
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
6
September 15, 2000 before the Public Notary of Madrid, Xx Xxxxxxx Xxxxx de
Madrid y Pala, with number 4,441 of his public record; its registered
office is at Madrid, Paseo de las Delicias 65 and it is registered at the
Madrid Commercial Registry, Volume 15,800, Page 1, Section 8, Sheet
M-266,709; its Tax Identification Code (C.I.F.) is [...***...].
Its current share capital amounts to THREE THOUSAND SIX (3,006.00) Euros,
divided into 3,006 shares, numbers 1 to 3,006, both inclusive, of 1 Euro
par value each, fully subscribed and paid up. All of its shares are free
of any liens, charges, encumbrances, third party rights or restrictions on
their transferability (save for the restrictions to their free
transferability set out in this Company's By-laws as registered with the
Commercial Register).
IV.6 3,006 shares of the company SLI INTERNALIZACION DE SERVICIOS, S.L.,
numbers 1 to 3,006, both inclusive, representing one hundred per cent
(100%) of shares of its share capital, by virtue of subscription and
disbursement of the same in the public deed of incorporation.
SLI INTERNALIZACION DE SERVICIOS, SL. was incorporated by virtue of deed
of incorporation granted on August 1, 2000 before the Public Notary of
Madrid, Xx Xxxxx Xxxx Xxxxxxxx, with number 3,839 for the public record of
the Public Notary of Madrid Xx. Xxxxxxx Xxxxx de Madrid y Pala; its
registered office is at Madrid, Paseo de las Delicias 65 and it is
registered at the Madrid Commercial Registry, Volume 15,645, Page 188,
Section 8, Sheet M-263,499; its Tax Identification Code (C.I.F.) is
[...***...].
Its current share capital amounts to THREE THOUSAND SIX (3,006.00) Euro,
divided into 3,006 shares, numbers 1 to 3,006, both inclusive, of 1 Euro
par value each, fully subscribed and paid up. All of its shares are free
of any liens, charges, encumbrances, third party rights or restrictions on
their transferability (save for the restrictions to their free
transferability set out in this Company's By-laws as registered with the
Commercial Register).
IV.7 3,006 shares of the company SLI MANTENIMIENTO INTEGRAL, S.L., numbers 1 to
3,006, both inclusive, representing one hundred per cent (100%) of shares
of its share capital, by virtue of the subscription and disbursement of
the same in the public deed of incorporation.
SLI MANTENIMIENTO INTEGRAL, S.L. was incorporated by virtue of the deed of
incorporation granted on August 1, 2000 before the Public Notary of
Madrid, Xx Xxxxx Xxxx Xxxxxxxx, with number 3,846 for the public record of
the Public Notary of Madrid, Xx. Xxxxxxx Xxxxx de Madrid y Pala; its
registered office is at Madrid, Paseo de las Delicias 65 and it is
registered at the Commercial Registry of Madrid at Volume 15,645, Page
196, Section 8, Sheet M-263500; its Tax Identification Code (C.I.F.) is
[...***...].
Its current share capital amounts to THREE THOUSAND SIX (3,006.00) Euro,
divided into 3,006 shares, numbers 1 to 3,006, both inclusive, of 1 Euro
par value each, fully subscribed and paid up. All of its shares are free
of any liens, charges, encumbrances, third party rights or restrictions on
their transferability (save for the restrictions to their free
transferability set out in this Company's By-laws as registered with the
Commercial Register).
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
7
IV.8 3,006 shares of the company PLATAFORMA LOGISTICA XX XXXXXXX, X.X., numbers
1 to 3,006, both inclusive, representing one hundred per cent (100%) of
shares of its share capital, by virtue of the subscription and
disbursement of the same effected in the public deed of incorporation.
PLATAFORMA LOGISTICA XX XXXXXXX, X.X. was incorporated by virtue of the
deed of incorporation granted on June 23, 2000 before the Public Notary of
Madrid, Xx Xxxx Xxxxxx de la Xxxx Xxxxxxxx, with number 3,846 of his
public record; its registered office is at Madrid, Xxxxx xx xxx Xxxxxxxx
00 and it is registered at the Madrid Commercial Registry, Volume 15,596,
Page 203, Section 8, Sheet M-262,579; its Tax Identification Code (C.I.F.)
is [...***...].
Its current share capital amounts to THREE THOUSAND SIX (3,006.00) Euro,
divided into 3,006 shares, numbers 1 to 3,006, both inclusive, of 1 Euro
par value each, fully subscribed and paid up. All of its shares are free
of any liens, charges, encumbrances, third party rights or restrictions on
their transferability (save for the restrictions to their free
transferability set out in this Company's By-laws as registered with the
Commercial Register).
IV.9 5,000 shares of the company GSLI-GRUPO DE SERVICOS LOGISTICOS INTEGRADOS
LDA., numbers 1 to 5,000 shares, both inclusive, representing one hundred
per cent (100 %) of shares of its share capital, by virtue of:
* shares 1 to 4,900, both inclusive, subscription and disbursement of
the same in the public deed of incorporation; and
* shares 4,901 to 5,000, both inclusive, purchase from Xx. Xxxx
Xxxxxxx Xxxxxxx Xxxxxxx by virtue of the deed granted before the
Public Notary of Madrid, Xx. Xxxxxxx Xxxxx de la Madrid y Pala on
January 23, 2002 with number 278 of his public record.
GSLI-GRUPO DE SERVICOS LOGISTICOS INTEGRADOS LDA. was incorporated by
virtue of the public deed granted in Lisbon, before the Public Notary of
Lisbon, Mrs.Xxxxx do Xxxxx Xxxxxxx dos Xxxxxx, granted on October 1, 1999;
its registered office is at Zona Industrial do Cabo, freguesia xx
Xxxxxxxxxxx do Ribatejo, concelho de Vila Franca de Xira (Portugal) and it
is registered at the Commercial Registry of Vila Franca de Xira, number
04629; its Tax Identification Code (C.I.F.) is [...***...].
Its current share capital amounts to FIVE THOUSAND (5,000.00) Euros,
divided into 5,000 shares, numbers 1 to 5,000, both inclusive, of 1 Euro
par value each, fully subscribed and paid up. All of its shares are free
of any liens, charges, encumbrances, third party rights or restrictions on
their transferability.
IV.10 Indirectly, through SERVICIOS LOGISTICOS INTEGRADOS SLI, S.A., 3,000
shares of the company SLI TACISA, INC., representing one hundred per cent
(100 %) of shares of its share capital,. Said shares are of the full
property of SERVICIOS LOGISTICOS INTEGRADOS SLI, S.A.
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
8
SLI TACISA, INC. was incorporated under the name TECNICOS ASESORES DE
COMERCIO INTERNACIONAL, INC by virtue of the deed granted on May 19, 1988
by Commisioner for oaths of the State of New York (U.S.A); its registered
office is at Xxxxxxx Xxxx 0, Xxxxx Xxxxxxxx, XX 00000 (U.S.A.) and it is
registered at State Department of New York under number B 642791-3; its
Employer Identification Number is [...***...].
Its current share capital amounts to US$ 3,000, divided into 3,000 shares,
both inclusive, of US$ 1.00 par value each, fully subscribed and paid up.
All of its shares are free of any liens, charges, encumbrances, third
party rights or restrictions on their transferability.
The companies described under sections (IV.1) through (IV.10), both
inclusive, are herein jointly referred to as "THE SUBSIDIARIES".
The Company and the Subsidiaries are herein jointly referred to as the
"SLI GROUP".
V. The Sellers have excluded from SLI Group the assets, employees and
business directly and exclusively related to the road freight business
("transporte terrestre") formerly carried out by SLI Group (hereinafter
the "EXCLUDED BUSINESS"), by means of the sale and purchase agreement and
transfer of the same to [...***...] effected by virtue of the public deed
granted on January 25, 2002 before the Public Notary of Madrid Xx. Xxxxxx
Xxxxxxxxx Lenzano, attached in ANNEX (V) hereto, and following the
criteria for the segregation of the Excluded Business also attached in
that same Annex. [...***...] shall hereinafter be referred to as the
"OWNER OF THE EXCLUDED BUSINESS".
VI. In the context of the existing agreements for a strategic alliance between
the UTi Group and SLI Group, the Parties are interested in allowing SLI
Group access to UTi Group's global world network and simultaneously
granting to UTi Group its own business structure in Spain and Portugal. In
this regard, the Purchaser is interested in acquiring, and the Sellers are
interested in transferring the Shares and, indirectly, the stake held by
the Company in the Subsidiaries, pursuant to the terms and conditions set
forth herein, for the purpose of acquiring (and transferring,
respectively) the total business currently carried out by SLI Group
("ACQUIRED BUSINESS"), once the Excluded Business has been taken out of
SLI Group. Moreover, the present Agreement grants to the Sellers the
possibility of receiving part of the purchase price for the Shares in UTi
Worldwide's unregistered ordinary shares.
VII. The Sellers are interested in the employees of SLI Group having access to
standard professional and other employees promotion policies of UTi Group
as a consequence of the consummation of this transaction and in the
Purchaser not planning to carry out any employee redundancy plan within
SLI Group as a result of this transaction.
VIII. The Sellers, in their position as owners of shares representing 100% of
the Company's share capital, hereby express their consent to the transfer
of the Shares, in compliance with the procedure established by the
Company's By-laws for the transfer of the shares of the Company.
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
9
IX. Prior to the execution of this Agreement, the Purchaser has carried out a
due diligence review on legal, economic/financial, tax, premises,
information systems, human resources and contractual/commercial main
aspects relating to the Company and its Spanish Subsidiaries based on the
information provided by the Sellers in response to a checklist of
documentation requested by the Purchaser from the Sellers, on the visit to
the main premises of the Company and its Subsidiaries and on the
interviews and conversations with Xx. Xxxxxx Xxxx Xxxxxxx Xxxxxxx and Xx.
Xxxx Xxxxx Xxxxxxx Xxxxxxx , with the purpose of obtaining information on
the status and situation of the Company and said Subsidiaries, as well as
their respective businesses (hereinafter, the "DUE DILIGENCE"); after
taking such information into account, the Purchaser is interested in
continuing with this transaction in the terms and conditions agreed below.
However, following the practice in this kind of transactions, the Sellers
acknowledge that any due diligence review by a third party cannot be
exhaustive and have, therefore, agreed to provide the Purchaser with the
representations and warranties appearing below.
X. The Parties hereby state that they have obtained all the authorisations
and approvals required for the execution and delivery of this Agreement
and acknowledge each other's full legal capacity for such execution and
delivery.
Now, therefore, the Parties hereby agree to enter into this agreement (the
"AGREEMENT") pursuant to the following:
CLAUSES
1. PURPOSE.
1.1 SALE AND PURCHASE.
The Sellers sell and transfer to the Purchaser, and the Purchaser
purchases and acquires, the Shares with all rights attached thereto and
free of any liens, charges, encumbrances, third party rights or
restrictions on their transferability, other than those established in the
By-Laws of the Company registered with the Commercial Register.
1.2 TRANSFER OF THE SHARES.
The Sellers hereby deliver possession of the Shares and transfer title
thereto to the Purchaser, who receives them and acquires full ownership
over the Shares, by means of the execution of this Agreement and its
subsequent recording at the Shareholders' Register Book of the Company.
The Sellers hereby deliver to the Purchaser the following:
1.2.1 A certificate signed by the Company's Secretary of the Board,
stating that the transfer to the Purchaser of the Shares and,
indirectly, of the shares held by the Company in the Subsidiaries,
has complied with all formalities and requirements established by
the Company's and each and all of the Subsidiaries' By-Laws
regarding the restrictions to the transferability of the Shares.
1.2.2 The duly signed resignations of all the members of the
Administration Bodies of the Company and of the Subsidiaries and the
Sellers (and any person related to
10
any of them) from their respective positions, stating that their
relationships with said companies, whether of an employment,
consultant, agency or other nature are thereby extinguished and that
full settlement has been reached and that they will not make any
claim against the Company and the Subsidiaries for any reason,
including, if appropriate, the loss of their work post, unilateral
termination of the existing relationship or unfair dismissal, save
for the exceptions mentioned in the following paragraphs (ii) and
(iii).
Notwithstanding the above, it its agreed between the Parties that:
(i) Xx. Xxxxxx Xxxx Xxxxxxx Xxxxxxx and Xx. Xxxx Xxxxx Xxxxxxx
Xxxxxxx, directly or through a wholly owned company, will
perform their offices as members of the Board of the Company ,
as representative of the sole administrator of the
Subsidiaries and as first executive managers of SLI Group, as
per Clause 6 below;
(ii) Xx. Xxxxxxx Xxxxxx Xxxxxxx Xxxxxxx will continue to render his
services as Air Freight and Ocean Freight Manager for Madrid
offices of SLI Group according to the terms and conditions set
forth in ANNEX (1.2.2.ii) attached hereto; and,
(iii) Xx. Xxxxxx Xxxxxx Xxxxxxxxxx will continue to perform his
duties as Head of the Logistics Business Unit of SLI Group
according to the terms and conditions set forth in ANNEX
(1.2.2.iii) attached hereto.
1.2.3 Property title to the Shares (titulos de propiedad de las
participaciones). Such titles shall be returned to the Sellers once
the Public Notary has intervened such titles in order to reflect the
sale and purchase carried out herein.
1.2.4 Authorised copy (copia autorizada) of the sale and purchase public
deed by virtue of which the Excluded Business has been sold to the
Owner of the Excluded Business.
2. PRICE.
2.1 TOTAL PURCHASE PRICE.
The Parties agree that the total consideration for the purchase of the
Shares (the "TOTAL PURCHASE PRICE"), including the compensation for the
obligation not to compete established in Clause 6 below, shall be the
amount resulting from adding up the five following different tranches:
(i) Initial consideration (hereinafter "THE INITIAL CONSIDERATION").
The Initial Consideration shall be the amount resulting from adding
up:
a) The net worth of SLI Group (hereinafter the "NET WORTH OF SLI
GROUP") as of the date hereof (hereinafter the "COMPLETION
DATE"), calculated and determined to such effect in accordance
with the accounting rules and adjustments criteria set forth
in ANNEX (2.1.i.a) attached hereto, and
11
b) [...***...] of [...***...] the Earnings After Taxes of SLI
Group (as defined below) during the year starting on January
1st, 2001 and ending on December 31st, 2001, calculated and
determined in accordance with the accounting rules and
adjustments criteria set forth in ANNEX (2.1.i.b); and
(ii) Second tranche (hereinafter the "SECOND TRANCHE").
The Second Tranche shall be equal to [...***...] of [...***...] the
Earnings After Taxes of SLI Group obtained during the period
starting on January 1, 2002 and ending on January 31, 2003,
calculated and determined in accordance with the accounting rules
and adjustments criteria set forth in ANNEX (2.1.ii).
(iii) Third tranche (hereinafter the "THIRD TRANCHE"):
The Third Tranche shall be equal to [...***...] of [...***...] the
Earnings After Taxes of SLI Group obtained during the year starting
on February 1, 2003 and ending on January 31, 2004, calculated and
determined in accordance with the accounting rules and adjustments
criteria set forth in Annex (2.1.ii).
(iv) Fourth tranche (hereinafter the "FOURTH TRANCHE"):
The Fourth Tranche shall be equal to [...***...] of [...***...] the
Earnings After Taxes of SLI Group obtained during the year starting
on February 1, 2004 and ending on January 31, 2005, calculated and
determined the accounting rules and adjustments criteria set forth
in Annex (2.1.ii).
(v) Fifth tranche (hereinafter the "FIFTH TRANCHE"):
The Fifth Tranche shall be equal to [...***...] of [...***...] the
Earnings After Taxes of SLI Group obtained during the year starting
on February 1, 2005 and ending on January 31, 2006, calculated and
determined in accordance with the accounting rules and adjustments
criteria set forth in Annex (2.1.ii).
For the purposes of this Agreement, the Initial Consideration, the Second,
Third, Fourth and Fifth Tranches shall be hereinafter jointly referred to
as the "TRANCHES" and each of them, separately as a "TRANCHE". Each period
taken into account for the calculations of each of the above-mentioned
Tranches (including the calendar year starting on January 1 and ending on
December 31, 2001) shall be hereinafter referred to as an "ACCOUNTING
YEAR". Likewise, for the purposes of this Agreement, the "EARNINGS AFTER
TAXES OF SLI GROUP" during each of the Accounting Years shall be defined
as the consolidated earnings after taxes of SLI Group for that Accounting
Year as determined and calculated pursuant to the present Agreement and
its relevant Annex.
For the above-mentioned purposes, the Purchaser hereby undertakes, as soon
as possible after Completion Date, to adopt the necessary corporate
resolutions for the purposes of changing the fiscal year of the Company
and of its Subsidiaries to the period comprised between February 1 and
January 31 in the succeeding year, so that the Accounting Years coincide
with the Company's and the Subsidiaries' fiscal years.
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
12
2.2. RULES FOR THE DETERMINATION OF THE TOTAL PURCHASE PRICE.
In respect of the calculation of the Total Purchase Price, the Parties
hereto agree as follows:
(i) The Net Worth of SLI Group as of Completion Date and the Earnings
After Taxes of SLI Group for the Accounting Year ending on December
31, 2001 will be determined by the auditors of the Company, which
are GESEM AUDITORES, S.A.
The Earnings After Taxes of SLI Group for the remaining Accounting
Years will be determined by the auditors of the Company, which will
be any international auditing firm as appointed, from time to time,
by the Company.
The auditors referred to in the two preceding paragraphs shall be
hereinafter referred to as the "AUDITORS".
As soon as the Auditors calculate the Net Worth of SLI Group and the
Earnings After Taxes of SLI Group they shall notify their
calculation to both Parties simultaneously. Should neither Party
notify any disagreement with said calculation within the period
established in section (ii) below of the present sub-Clause 2.2, the
same shall become definitive and binding for both Parties and shall
not be subject to any claims of any nature whatsoever by the
Parties.
The fees of the Auditors incurred as a consequence of the
calculation provided for in the present section 1 will be borne by
the Company.
Notwithstanding the above, the Sellers may appoint their own
auditors, at their own discretion and sole cost, for the purpose of
calculating the Earnings After Taxes of SLI Group for any of the
Accounting Years. The Purchaser shall give the auditors appointed by
the Sellers access to the documentation and information necessary
for this purpose. For the avoidance of doubt, the Parties expressly
acknowledge and accept that the calculation effected by the auditors
appointed by the Sellers pursuant to the present paragraph will in
no way bind the Purchaser, the Auditors and/or the Expert (as
defined below), and that its purpose is to assist the Sellers in
assessing the calculation of the Auditors.
(ii) In the event any of the Parties (hereinafter the "DISPUTING PARTY")
disagrees with the calculation notified by the Auditors, the
Disputing Party shall communicate such disagreement (hereinafter a
"DISPUTE") in written form to the other Party within twenty (20)
calendar days as from the date on which it is notified by the
Auditors. The Parties will try in good faith to reach an agreement
on the Dispute within the ten (10) calendar days following said
communication or, failing such agreement, the Parties will try to
agree within the same time period on the independent expert to whom
the Dispute will be submitted. In default of agreement, the
Disputing Party shall immediately, and the other Party will also be
entitled to request the President of the Spanish Chartered
Accountants Institute to nominate an independent expert.
Hereinafter, the aforementioned expert designated by agreement of
the Parties or, if applicable, by the President of the
13
Spanish Chartered Accountants Institute shall be referred to as the
"EXPERT". The Expert, who shall be appointed by the President of the
Spanish Chartered Accountants Institute within fifteen (15) calendar
days following the request from either Party to such effect, shall
be a well reputed international auditing firm, not related to either
Party, not only at the moment when the designation takes place, but
also in the two (2) years preceding thereto. In particular, in view
of the current relation existing with the Parties, the Parties agree
to instruct the President of the Spanish Chartered Accountants
Institute so that neither Xxxxxxxx and Touche, nor Xxxxxx Xxxxxxxx
nor KPMG be appointed as the Expert.
The Disputing Party shall, and the other Party will also be entitled
to, immediately upon designation of the Expert and acceptance of its
designation as such, submit the Dispute to the Expert, clearly and
expressly reflecting the reasons for such Dispute. The Expert shall
(acting as an expert and not as an arbitrator) decide on the Dispute
and on the final calculation of the Net Worth of SLI Group as of
Completion Date and/or of the Earnings After Taxes of SLI Group (as
the case may be) according and subject to the agreements contained
in this Agreement and its Annexes. The Parties will use their best
endeavours to ensure that the calculation shall be made by the
Expert and shall be notified simultaneously to the Purchaser and the
Sellers within the thirty (30) calendar days following submission of
the Dispute. Said calculation shall be definitive and binding for
both Parties, and shall not be subject to any claims of any nature
whatsoever by either of the Parties between them.
The fees incurred by the Expert for making the calculation provided
for in the present section (ii) of this Clause 2.2: [...***...].
The Parties shall instruct the Auditors and the Expert to make and
notify their calculations as soon as possible and, in any case:
(a) in respect of the calculations by the Auditors: (1) of the Net
Worth of SLI Group and of the Earnings After Taxes of SLI
Group for year 2001, no later than March 22, 2002 and (2) of
the Earnings After Taxes of SLI Group for the remaining
Accounting Years, no later than three (3) months after the
closing of the corresponding Accounting Year; and
(b) in respect of the calculation of the Expert, in case there is
a Dispute: (1) of the Net Worth of SLI Group and the Earnings
After Taxes of SLI Group for year 2001, on or before the later
of the following dates (1.x) April 30, 2002 and (1.y) thirty
(30) calendar days after the submission to the Expert of the
Dispute; and (2) of the Earnings After Taxes of SLI Group, on
or before the later of the following dates (2.x) four (4)
months after the closing of the corresponding Accounting Year
and (2.y) thirty (30) calendar days after the submission of
the Dispute to the Expert.
The Parties agree that interests at a rate of 6 months EURIBOR plus
1.5% shall accrue over the amounts payable to the Sellers by the
Purchaser for the Remaining
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
14
Amount of the Initial Consideration or the Tranche corresponding to
each Accounting Year. Said interests shall accrue from April 30 of
the year subsequent to the Accounting Year of reference in each case
and until the Payment Date (as defined below) of the Remaining
Amount of the Initial Consideration or of the corresponding Tranche,
as applicable.
For the purpose of the present Agreement, the day on which the
Remaining Amount of the Initial Consideration and on which the
Amount Payable under each Tranche shall be paid by the Purchaser to
the Sellers pursuant to Clause 2.3.(i).b) and Clause 2.3.(ii).b),
respectively shall be hereinafter referred to as "PAYMENT DATE" or
"PAYMENT DATES".
The date on which the amount calculated by the Auditors or the
Expert (as the case may be) becomes binding and definitive for both
Parties pursuant to the preceding section (i) of the present Clause
2.2 or to this section (ii) of the present Clause 2.2, respectively,
shall be hereinafter referred to as the "NOTIFICATION DATE".
(iii) The earnings after taxes arising from the Excluded Business will not
be taken into account for the purpose of calculating either the Net
Worth of SLI Group or the Earnings After Taxes of SLI Group of any
Accounting Year even after the same is acquired by SLI Group, as the
case may be (except in case of Clause 7.4.vii below); as an
exception to the above, if during the year ending on December 31,
2001 the Excluded Business has suffered a loss, such a loss shall be
taken into account in calculating the Net Worth of SLI Group as of
Completion Date.
(iv) For the purpose of calculating the Net Worth of SLI Group and the
Earnings After Taxes of SLI Group, the Auditors and the Expert will
apply the same principles as those applied for the purpose of
calculating the earnings obtained by the UTi Group, i.e. US GAAP
accounting principles modified as explained in ANNEX (2.2.iv) hereto
(the general and particular accounting rules and criteria referred
to in this paragraph as modified in Annex 2.2.iv shall be
hereinafter referred to as the "AGREED ACCOUNTING BASIS"), without
prejudice to the other adjustments and criteria established for each
of the Tranches.
(v) Should the Earnings After Taxes of SLI Group for any given
Accounting Year, except for the one ending on January 31st, 2006, be
a loss, said loss will be set-off against the earnings obtained in
the subsequent Accounting Year for the purpose of calculating its
Earnings After Taxes of SLI Group and so on in succeeding Accounting
Years until the loss has been fully set-off against the earnings
arising in such Accounting Years. No Tranche shall be payable for
the Accounting Year in question where the loss has occurred or has
been deemed to have occurred as a consequence of the application of
the set-off provisions referred to above because of the losses
set-off being greater than the earnings obtained that Accounting
Year (but only up to the necessary amount to set-off the
corresponding loss in full).
(vi) The Parties expressly agree that, as long as the payment of any of
the Tranches from the Purchaser to the Sellers is pending according
to this Agreement, Xx. Xxxxxx Xxxx Xxxxxxx Xxxxxxx and Xx. Xxxx
Xxxxx Xxxxxxx Xxxxxxx shall actively intervene, as first executive
officers, in the management and performance of the
15
Company's and the Subsidiaries' Board, as per Clause 6.1 below.
Notwithstanding the above, the Chief Financial Officer of SLI Group
will be appointed by the Board of Directors of the Company following
the Purchaser's proposal, at the Purchaser's own discretion, having
into account that he/she will be a person with an adequate profile
for that post. Xx. Xxxxxx Xxxx Xxxxxxx Xxxxxxx and Xx. Xxxx Xxxxx
Xxxxxxx Xxxxxxx will not be entitled to remove said Chief Financial
Officer from his/her post.
The aforementioned paragraph shall not be understood as limiting in
any way the full ability of the Purchaser, as owner of 100% of the
Shares, to adopt or make the Company and/or any of the Subsidiaries
adopt any action and/or corporate resolution affecting SLI Group,
although such actions and/or resolutions affecting SLI Group shall
be expressly communicated in writing to the Sellers.
Notwithstanding the above, the Sellers jointly, through the Sellers'
Representative, may object (expressly and in writing) to any action
or corporate resolution to be adopted by the Company and/or any of
the Subsidiaries and proposed by the Purchaser, which:
(a) is outside the ordinary course of business of the SLI Group;
or,
(b) is other than under an arm's length terms and conditions; or,
(c) consists on entering into a long-term contract where the
costs, in aggregate, to be incurred up to the of January 31st,
2006 by SLI Group will materially exceed the income generated
for SLI Group up to such date; for this purpose, an excess of
costs over income of [...***...] Euros or greater shall be
considered material.
Should the Parties fail to reach an agreement on the above-mentioned
circumstances, the issue shall be submitted to arbitration as per
subClause 12.2 below. The arbitrator shall determine whether any
proposal falls into any of the circumstances under (a), (b) or (c)
above and, thus, whether it may or may not be objected by the
Sellers, in default of agreement by the Parties in this respect. The
arbitrator determination being definitive and binding for the
Parties.
In case that, despite the express and written joint objection of the
Sellers to an action and/or resolution, the Purchaser and/or the
Company and/or the corresponding Subsidiary decides to adopt the
same, the Purchaser shall compensate the Sellers for any adverse
effect caused to the Sellers during the effectiveness of this
Agreement arising from such an action or corporate resolution, in
order to place the Sellers in the same position as if such action
and/or corporate resolution had not been adopted.
Should the Parties fail to reach an agreement on the quantification
of such compensation, the arbitrator shall determine the same in a
definitive and binding way for the Parties.
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
16
2.3 PAYMENT OF THE TOTAL PURCHASE PRICE.
The Total Purchase Price shall be paid by the Purchaser to the Sellers on
the following dates and by the following means:
(i) Payment of the Initial Consideration.
The Initial Consideration shall be paid in cash, on the following
dates:
a) On the date hereof 1,537,664,082 Pesetas, i.e. 9,241,547.26
Euros, are hereby paid to the Sellers by means of four
nominative bank checks issued in favour of each of the Sellers
in proportion to the Shares transferred by each of them,
resulting in the following amounts:
- [...***...] Euros in favour of Xx. Xxxxxx Xxxx Xxxxxxx
Xxxxxxx.
- [...***...] Euros in favour of Xx. Xxxx Xxxxx Xxxxxxx
Xxxxxxx.
- [...***...] Euros in favour of Xx. Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxxx.
- [...***...] Euros in favour of Xx. Xxxx Xxxxxxx Xxxxxxx
Xxxxxxx.
All of the Sellers grant in favour of the Purchaser a formal
receipt of payment for the aforementioned amount.
b) The remaining amount of the Initial Consideration, which shall
be calculated as per Clauses 2.1 and 2.2 above, should the
same be a positive amount, plus the interests defined in
paragraph (ii) of sub-Clause 2.2, if applicable (the
"REMAINING AMOUNT OF THE INITIAL CONSIDERATION"), shall be
paid by the Purchaser to the Sellers on the Payment Date,
which shall be: (i) March 31, 2002, should the Auditors have
determined the amount by March 22, 2002 and there not be a
Dispute; (ii) should the Auditors determine the amount after
said date, the fifth calendar day after the Notification Date
of the Auditors' calculation; and (iii) should there be a
Dispute, the fifth calendar day after the Notification Date of
the Expert's calculation of the Net Worth of SLI Group as of
Completion Date and of the Earnings After Taxes of SLI Group
for the year 2001. The Remaining Amount of the Initial
Consideration shall be paid through bank transfer in
immediately available funds to the Sellers, value that same
date.
Should the Remaining Amount of the Initial Consideration be a
negative amount, the Sellers shall reimburse to the Purchaser
said amount on the same period indicated in the preceding
paragraph.
The Parties agree that should the Purchaser or the Sellers, as
applicable, not pay punctually to the other Party the amounts
due pursuant to the present section b) of sub-Clause 2.3.(i),
nominal annual interests at a rate of 6 months EURIBOR plus 3%
shall accrue daily over said amounts from the corresponding
Payment Date until the day in which it is effectively paid to
the said Party.
(ii) Payment of the following Tranches.
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
17
The payment of the Second, Third, Fourth and Fifth Tranches shall be
carried out in accordance with the following terms and conditions:
a) Should the Tranche for any given Accounting Year, except for the one
ending on January 31st, 2006, be negative due to the Earnings After
Taxes of SLI Group for that Accounting Year being a loss, section
(v) of Clause 2.2 shall apply.
b) Should the Tranche for any given Accounting Year be a positive
amount (hereinafter "THE AMOUNT PAYABLE"), the Purchaser shall pay
to the Sellers the Amount Payable in the proportion established in
sub-Clause 2.4 below.
The Purchaser shall pay the Sellers the Amount Payable (without any
request to that extent from the Sellers to the Purchaser being
necessary) on the Payment Date, which shall be the tenth calendar
day after the corresponding Notification Date.
c) The Purchaser shall pay the Amount Payable under any Tranche to the
Sellers in the following way:
(1) The Purchaser shall transfer to the Sellers, without any
disbursement from the latter, a number of unregistered
ordinary shares issued by UTi Worldwide (whether issued for
that purpose or otherwise), free from any liens, charges or
encumbrances or rights in favour of third parties and with
voting and economic rights equal to and no more obligations
than the currently existing ordinary shares of UTi Worldwide,
which value shall equal the Amount Payable. The ordinary
unregistered shares to be delivered to the Sellers shall be
hereinafter referred to as the "UTI WORLDWIDE'S SHARES". For
that purpose, the Parties agree that the value of each of the
UTi Worldwide's Shares (hereinafter the "AGREED VALUE") is
equal to the average market price of the UTi Worldwide's
shares on NASDAQ during the three (3) calendar-month term
immediately prior to the Completion Date, which amounts to
15.8176 US $ per share.
(2) However, should the Agreed Value be greater than the lower of
the following prices:
(x) the average (media aritmetica) market price of the UTi
Worldwide's Shares on NASDAQ during the month
immediately prior to the corresponding Notification
Date; or
(y) the closing market price of the UTi Worldwide's Shares
on NASDAQ on the Notification Date (the lower of (x) and
(y) shall be hereinafter referred to as the "MARKET
PRICE").
the Sellers shall be entitled to jointly request the Purchaser
to pay the Amount Payable according to one of the following
methods (at the Sellers' joint discretion):
(A) all in cash (in funds immediately available to the
Sellers); or
(B) through the transfer in favour of the Sellers of the UTi
Worldwide's Shares (as defined above) and, in addition
thereto, paying to the Sellers in
18
cash, in immediately available funds, the difference between
the Agreed Value and the Market Price per UTi Worldwide Share
multiplied by the number of UTi Worldwide Shares transferred.
The joint option of the Sellers shall be notified to the
Purchaser within the five (5) days following Notification
Date; shall the Purchaser not receive said joint notification
within that period of time, it shall be understood that the
Sellers jointly choose to be paid as established under
sub-Section (B) above.
For the purpose of this Agreement, the market price of UTi
Worldwide's Shares at any day shall be the last sale price on
NASDAQ for that day or, should there not be a published last
sale price for UTi Worldwide's Shares corresponding to that
day for any reason, for the closest preceding day for which
there is such a published last sale price.
(3) Should the Purchaser fail to punctually pay all or part of the
Amount Payable (hereinafter the "DEFAULTED AMOUNT PAYABLE"),
due to any reason whatsoever not attributable to the Sellers,
according to the terms and time periods provided for under
this section 2.3.(ii) and in any of the remaining Clauses of
the present Agreement:
(A) The Sellers will be automatically entitled to jointly
claim from the Purchaser any of the following
performances:
(i) to request the transfer of the UTi Worldwide's
Shares pending under the Defaulted Amount Payable;
or
(ii) to request the payment in cash (in funds
immediately available to the Sellers) of the
greater of the following amounts: (a) the
Defaulted Amount Payable; (b) the closing market
value of the UTi Worldwide's Shares pending under
the Defaulted Amount Payable on NASDAQ on the
Notification Date; (c) the average market value on
NASDAQ of the UTi Worldwide's Shares pending under
the Defaulted Amount Payable during the calendar
month immediately prior to the Notification Date;
and (d) the highest closing market value of the
UTi Worldwide's Shares pending under under the
Defaulted Amount Payable on NASDAQ on any day as
from Notification Date to the day on which the
Sellers are paid in full by the Purchaser.
The joint option by the Sellers of any of the
above-cited alternatives shall not prevent the Sellers
from choosing any of the other alternatives, for as long
as the payment chosen by the Sellers has not been made
in full by the Purchaser. For that purpose, the Sellers'
Representative will notify the Purchaser the Sellers'
joint option and the Purchaser will have five (5)
working days as from said notification to pay in
accordance with the same.
19
(B) Likewise, the joint option by the Sellers between
alternative under 2.3.(ii)c)(2).(A) and alternative
under 2.3.(ii).c).(2).(B), shall not prevent the Sellers
from subsequently jointly choosing (for the payment of
the Defaulted Amount Payable) the other alternative by
means of a written notification sent to the Purchaser,
for as long as the Defaulted Amount Payable has not been
paid in full by the Purchaser. For that purpose, the
Sellers' Representative will notify the Purchaser the
Sellers' joint option and the Purchaser will have five
(5) working days as from said notification to pay in
accordance with the same.
(C) In addition to the above, for any part of the Defaulted
Amount Payable which is to be paid in cash by the
Purchaser in accordance to the present Clause 2.3.(ii),
the Sellers will be automatically entitled to jointly
claim from the Purchaser the payment of delay interest
(hereinafter "DELAY INTEREST"). The Delay Interest shall
accrue over the cash part of the Defaulted Amount
Payable during the period going from the corresponding
Payment Date to the day in which it is effectively paid
to the Sellers' Representative by the Purchaser
(hereinafter "DELAY PERIOD").
The nominal annual interest rate of the Delay Interest
shall be 6 months EURIBOR plus 3% during the first month
of the Delay Period, and shall increase 1% on an annual
basis for each subsequent month of the Delay Period.
(D) The fulfilment by the Purchaser of its obligation
deriving from the joint option by the Sellers of any of
the alternatives mentioned under section (B) of this
sub-Clause 2.3.(ii).c).(3) together with the payment of
the corresponding Delay Interest, as applicable, shall
prevent the Sellers from further claiming any damages
against or requesting any other remedy from the
Purchaser for reason of or in relation to the delay in
the payment of the Amount Payable.
(E) In case of exchange of the shares of UTi Worldwide or
any other modification or alteration of said shares due
to any reason including, without limitation, merger,
split-off, spin-off, share split, reorganisation or any
other reason whatsoever, the Parties hereto shall
immediately initiate negotiations in good faith in order
to introduce, prior to the carrying out of such
alterations, any changes to the foregoing calculation
procedures, as are required in order to obtain the same
economic effects for both Parties as envisaged above.
Should the Parties fail to reach an agreement in the
term of thirty (30) days from the beginning of the
negotiations, the matter shall be submitted to
arbitration as per Clause 12.2 below.
(F) All calculations of UTi Worldwide's Shares to be
delivered to the Sellers yielding a fractional number
shall be understood, for purposes of this clause, to be
rounded upwards to the nearest whole integer.
20
2.4 DISTRIBUTION OF PAYMENTS AMONG THE SELLERS.
Any payment to be made by the Purchaser to the Sellers hereunder will
be delivered to the Sellers' Representative, who shall distribute the
same among the Sellers in the following proportion:
SELLER %
Xx. Xxxxxx Xxxx Xxxxxxx Xxxxxxx [...***...]%
Xx. Xxxx Xxxxx Xxxxxxx Xxxxxxx [...***...]%
Xx. Xxxxxxx Xxxxxx Xxxxxxx Xxxxxxx [...***...]%
Xx. Xxxx Xxxxxxx Xxxxxxx Xxxxxxx [...***...]%
Except otherwise provided for under the present Agreement, any amount
to be paid by the Purchaser to the Sellers shall be paid by means of
transfer (in funds immediately available to the Sellers) to the bank
account, opened on behalf of the Sellers' Representative, as notified
by the Sellers' Representative to the Purchaser from time to time.
2.5 INDEMNITY TO THE SELLERS.
The Purchaser will indemnify the Sellers of any loss or damage suffered
by them if, following the transfer to them of the UTi Worldwide's
Shares they are, through events outside their control, unable to
register them within a reasonable time.
3. REPRESENTATIONS AND WARRANTIES.
3.1 REPRESENTATIONS AND WARRANTIES OF THE SELLERS.
The Sellers hereby jointly and severally (solidariamente) represent and
warrant (hereinafter "THE REPRESENTATIONS AND WARRANTIES OF THE
SELLERS") to the Purchaser, with effect as of the date hereof, as
follows:
3.1.1 Due Incorporation and Existence.
3.1.1.1 The Company and the Subsidiaries are validly and duly incorporated and
existing under the laws of the respective jurisdictions and, if
applicable, are duly registered, at the appropriate Commercial
Registries according to the law applicable to each of them. The Company
and all the Subsidiaries have the necessary legal capacity to own their
respective assets and to carry out their activities and have been
operating since their incorporation in accordance with the laws and
regulations applicable to the same (including, without limitation,
those related to anti-trust, personal data protection and corporate).
3.1.1.2 Neither the Company nor any of the Subsidiaries has been dissolved or
liquidated; no resolution to dissolve or liquidate the same has been
adopted and there is no action or request pending or, to the best of
the Sellers' knowledge, threatened to accomplish such dissolution or
liquidation.
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
21
3.1.1.3 Neither the Company nor any of the Subsidiaries has been declared
bankrupt and no action or request is pending or, to the best of the
Sellers' knowledge, threatened to declare it bankrupt. Neither the
Company nor any of the Subsidiaries has been granted or has filed for a
provisional moratorium of payment ("suspension de pagos"). Neither the
Company nor any of the Subsidiaries will incur in any liability nor
suffer any loss as a result or in relation to the prior holding of
[...***...], nor to the transfer of the same.
3.1.1.4 The Company and the Subsidiaries are governed by their respective
By-laws which are registered with the corresponding Commercial Register
or, otherwise, attached hereto as ANNEX (3.1.1.4); there are no other
agreements, arrangements or understandings of any type governing the
relationships among their respective shareholders or their organisation
or business activities.
3.1.1.5 The Company's and all of the Subsidiaries' books of minutes have been
duly legalised, contain complete, accurate and reliable records of the
meetings and company resolutions of directors and shareholders since
their incorporation until the date hereof, as well as other information
due pursuant to applicable laws, and bear all appropriate signatures.
None of the Company's and the Subsidiaries' corporate resolutions have
been challenged or suspended by any Court and, to the best of the
Sellers' knowledge, there is no ground for challenges against them in
the future. All resolutions which have to be registered at a Commercial
Registry and all other documents required to be delivered by law or
regulation by or in respect of the Company and/or the Subsidiaries to
the competent authorities have been duly registered and delivered,
except for those referred to in ANNEX (3.1.1.5) hereto. Neither the
Company nor any of the Subsidiaries has passed any corporate resolution
since August 31, 2001 (save for those necessary for carrying out the
transactions to which Recital V refers).
3.1.1.6 A complete and updated list of the persons to which the Company and/or
any of the Subsidiaries has granted powers of attorney, whether general
or special (including banking powers), which are in force as of the
date hereof, is attached hereto as ANNEX (3.1.1.6).
3.1.2 Share Capital.
3.1.2.1 The total share capital of the Company and the Subsidiaries and their
respective shareholders is that provided for in Recital IV of the
present Agreement. All of the shares of the Company and the
Subsidiaries have equal economic and voting rights, and are fully
subscribed and paid-up.
3.1.2.2 The Sellers have absolute legal title to the Shares, having no
obligation to transfer the Shares to a third party, or to create any
claim, pledge, lien, charge or encumbrance, with respect to the Shares,
having also absolute right, power and authority to sell, transfer and
deliver the Shares and, indirectly, the shares of the Subsidiaries held
by the Company.
3.1.2.3 The Shares and the shares issued by the Subsidiaries: (i) have been
validly issued; (ii) are freely transferable, the formalities and
requirements for their transfer provided for in the By-laws having been
previously complied with; (iii) are not subject to any voting
agreements or arrangements ("pactos de sindicacion"); and (iv) are free
of encumbrances,
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
22
charges, options, claims, liens, pledges, burdens, attachments, third
party's rights or any other type of "in rem" rights, or rights to
purchase ("call") or to sell ("put").
3.1.2.4 No shares in the Company or in the Subsidiaries or preferential
subscription rights, exchangeable or convertible debentures, warrants
or any other type of security or instrument which may give rise,
directly or indirectly, to the subscription or acquisition of shares in
the Company or any of the Subsidiaries have been issued (different from
those referred to in Clause (3.1.2.1.)) or are in the process of being
issued.
3.1.2.5 Neither the Company nor any of the Subsidiaries has created and does
not hold, directly or indirectly, shares or interest in any subsidiary
or branch, different from the Subsidiaries.
3.1.3 Financial Statements.
3.1.3.1 The annual accounts (balance sheet, profit and loss account and annual
report) of the Company and all of the Subsidiaries, corresponding to
the fiscal year closed on December 31, 2000 and the financial
statements (balance sheet and profit and loss account) as of September
30, 2001 and the management non-audited non-consolidated accounts as of
December 31, 2001 (all such documents shall be jointly hereinafter
referred to as the "DISCLOSED FINANCIAL STATEMENTS"), a copy of which
is attached hereto as ANNEX (3.1.3.1), have been drawn up according to
the Spanish applicable laws and regulations and generally accepted
accounting principles in Spain consistently applied, have been audited
in the cases so required by law applicable in the applicable
jurisdiction, and accurately reflect a true and fair view of the
economic and financial situation and the result of operations of the
Company and the Subsidiaries at the date and during the period covered
by such Disclosed Financial Statements,; the Disclosed Financial
Statements do not contain any untrue statement of a material fact which
would render them misleading; the Disclosed Financial Statements duly
reflect all actions and transactions carried out, and contingencies,
liabilities and obligations incurred, by the Company and the
Subsidiaries in the period covered therein and up to their
corresponding date; and the Disclosed Financial Statements contain all
the provisions which are required to be made according to any
applicable law or regulation and generally accepted accounting
principles in Spain consistently applied.
The Company's and all of the Subsidiaries' accounting duly legalised
records precisely record all income and expense items, and all assets
and liabilities in relation to the Company and each of the
Subsidiaries, respectively, in accordance with accounting principles
generally accepted in Spain. In particular, the Sellers represent that
the value of the assets of the Company and the Subsidiaries as of
Completion Date is neither less than (a) the book value of the assets
reflected in the Disclosed Financial Statements as of December 31, 2001
nor than (b) the value taken into account by the Auditors (and the
Expert in case of Dispute) in calculating the Net Worth of SLI Group as
at the Completion Date.
There are no outstanding commitments to make further investments
whether in fixed assets or otherwise, including contributions and
investments in respect of the Subsidiaries.
The Sellers represent the existence and legitimacy of all loans and
accounts receivables recorded by the Company and/or the Subsidiaries in
the Disclosed Financial Statements
23
and those accrued up to the date hereof as from the date of the
Disclosed Financial Statements, net of any provision for bad or
doubtful debts that may have been recorded at that date. All loans and
accounts receivable reflected in the Disclosed Financial Statements as
of December 31, 2001 and those accrued between that date and Completion
Date have been or will be satisfied or recoverable in full in the
ordinary course at the date they fall due in accordance with the usual
terms of trading. It is understood that a loan or account receivable
will be deemed to not have been collected in full at maturity when they
are provisioned for, contested or protested.
3.1.3.2 The sales effected to clients, as from January 1, 2001 until the date
hereof, are consistent with usual purchase volumes and they have not
been artificially or extraordinarily promoted or increased by means of
unusual (either for their quantity or for the nature of the same)
bonuses, discounts or payment conditions. To the best of the Sellers'
knowledge, there is no circumstance which can give rise or is likely to
give rise to any claim for repayment of amounts paid to the Company
and/or any of the Subsidiaries by any of their clients.
3.1.3.3 Except for the transactions referred to under the Recital V and those
transactions referred to in ANNEX (3.1.3.3), as from December 31, 2001,
the Company and all of the Subsidiaries have carried out their
respective activities in an absolutely normal and ordinary fashion,
following the ordinary course of business and the practices, policies
and lines of action followed until that time, the Company and/or the
Subsidiaries have not undergone any substantial adverse change or loss
of any kind (including without limitation their financial or market
position), and the Sellers have not omitted any relevant information to
the Purchaser whatsoever (including distribution of dividends or
granting of any other rights to shareholders, administrators or any
other third party and extension or change of the conditions of any
agreement).
3.1.3.4 The Company and each of the Subsidiaries, as appropriate, are the
absolute legal owners, the registered owners (if applicable) and the
sole possessors of the assets which are reflected on the asset side of
the Disclosed Financial Statements, free from any mortgages, pledges,
charges, encumbrances, liens, attachments or any other type of "in rem"
rights, restrictions to transfer, or reservations of title ("reserva de
dominio"), except for those referred to in ANNEX (3.1.3.4) and those of
the Excluded Business which have been transferred to the Owner of the
Excluded Business.
All the assets used by the Company and all of the Subsidiaries are in
adequate operational conditions and have been duly maintained and, if
still under warranty, all conditions and requirements necessary to
benefit from the warranties have been met.
3.1.3.5 The Company and all of the Subsidiaries have duly deposited their
respective annual accounts and management reports for all the fiscal
years lapsed since their incorporation until and including fiscal year
2000, included, with the applicable Commercial Registry, if so required
by the law applicable in the corresponding jurisdiction.
3.1.3.6 The Company and all of the Subsidiaries keep all accounting books
legally required; such books have been duly legalised and contain
complete, accurate and reliable records of all credits, debits and
other information due pursuant to applicable laws and generally
accepted accounting principles in Spain.
24
3.1.3.7 Neither the Company nor any of the Subsidiaries has, at any time as
from December 31, 2001, condoned or waived any debt, right or claim
against any shareholder or any Associated Party.
For the purposes of this Agreement, "ASSOCIATED PARTY" is defined as:
(i) any of the Sellers; (ii) any relative of any of the foregoing up to
the fourth degree, and (iii) any company which is controlled by any of
the foregoing (as the term "control" is defined in Section 4 of Law
24/1988 of 28 July on the Securities Market).
3.1.3.8 The Sellers expressly represent and warrant that the assets and
liabilities of SLI Group transferred to the Owner of the Excluded
Business and which are reflected in the agreement attached as ANNEX (V)
hereto and its exhibits thereto (hereinafter "THE EXCLUDED BUSINESS
DETAILS") belong to the Excluded Business; in particular, they
represent that the Excluded Business Details: (i) reflect all the
assets and liabilities of the Excluded Business; (ii) do not reflect
any asset used for the purpose of developing the other businesses of
SLI Group; and (iii) do not omit any liability related to the Excluded
Business and do not include any liability related to the remaining
businesses of SLI Group.
Further, the Sellers expressly represent and warrant that the
transactions referred to in the Recital V above, have not had and will
not have as a consequence any contingency, debt, claim, obligation,
undertaking or damage of any kind for SLI Group.
3.1.4 Real Estate.
3.1.4.1 The Company and the corresponding Subsidiary are the absolute legal
owners of the real estate identified in ANNEX (3.1.4.1) hereto (the
"REAL ESTATES"), which are free from lessees, liens and encumbrances of
any kind, except as indicated in the aforementioned Annex. The Company
and the corresponding Subsidiary have good title thereto and all rights
necessary to enjoy the Real Estates. The Company and the Subsidiaries
are in possession of the title deeds and documents necessary to prove
their respective title, and the absolute and clear ownership of the
Real Estates by the Company or the corresponding Subsidiary is duly
recorded at the Land Registry. The Sellers are not aware of any
circumstances which would affect the Company's or the corresponding
Subsidiary's title to the Real Estates, such as a compulsory purchase
order or notification of potential expropriation and there are no
circumstances likely to lead to any such circumstances to appear.
3.1.4.2 ANNEX (3.1.4.2) lists the buildings occupied by the Company and/or any
of the Subsidiaries by virtue of lease agreements ("LEASED PREMISES").
With respect to these lease agreements, except for those matters
expressly stated in said Appendix:
(i) There are no sub-leases.
(ii) None of the parties concerned have failed to comply with the
terms and conditions set out in the above-mentioned lease
agreements and the respective lessors have never made any
claim relating to the payment of rent by the Company or the
corresponding Subsidiary or for any other failure to comply
with the relevant agreement.
25
(iii) There are no restrictions affecting the lease arrangement
which impedes or restricts the use of the Leased Premises in
the manner and circumstances that they are currently used or
in which they are intended to be used.
(iv) Even where the Company or the corresponding Subsidiary has
modified or altered any of the Leased Premises with
appropriate approval or authorisation, there is no obligation
to return the Leased Premises to their original state at the
end of the lease concerned.
(v) Currently no negotiations or discussions are being held
relating to any change in the amount of rent being paid.
3.1.4.3 The legal requirements concerning the use and condition of the Real
Estates and the Leased Premises have been complied with, including
those established in the applicable town planning regulations and the
Real Estate and Leased Premises have the applicable building and
opening licenses and, until the date hereof, to the best of the
Sellers' knowledge, no circumstances should restrict the use of the
above cited Real Estate in the same terms as they are currently being
used.
3.1.4.4 The Real Estate and Leased Premises are in good state of repair and
maintenance and are suitable to be used for the same purposes for which
they have been used until the date hereof.
3.1.4.5 No right of access to the Real Estate and Leased Premises is shared
with or subject to determination by a third party, save for those
referred in ANNEX (3.1.4.1).
3.1.4.6 No actions, claim, proceeding, demand, dispute or liability (contingent
or otherwise) in connection with the Real Estate and Leased Premises is
outstanding or is any likely to be made or arise.
3.1.4.7 No Real Estate and no Leased Premises has been transferred as part of
the Excluded Business.
3.1.5 Agreements.
3.1.5.1 ANNEX (3.1.5.1.) contains a list or copy of all agreements and
obligations entered into by the Company and/or any of the Subsidiaries
currently in force: (a) of an amount exceeding [...***...], or (b) of a
duration exceeding 1 year, or (c) for which termination by any of the
parties thereto requires the payment of a penalty exceeding [...***...]
or advance notice exceeding six months. All contracts, agreements and
understandings entered into by the Company and/or any of the
Subsidiaries or by which the Company and/or any of the Subsidiaries has
been or is bound (i) have been entered into on an arm's length basis;
(ii) are respectively within the scope of the Company's or the
corresponding Subsidiary's corporate purpose and ordinary business;
(iii) are or have been valid, binding and
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
26
enforceable in accordance with their terms and in full force and
effect; (iv) do not violate any applicable law or regulation; (v) are
not of a loss making nature, that is, known to be likely to result in a
loss on completion or performance; and (vi) contain termination
provisions which are reasonable and customary for the type of
transactions and activities to which they are related, however, such
termination provisions do not grant the right of unilateral termination
by any other party due to a change of control over the Company and/or
any of the Subsidiaries nor does such change of control directly
trigger termination of any such contract, agreement and understanding.
Neither the Company nor any of the Subsidiaries is (and no other party
thereto is) in breach of any of their respective obligations under any
of the aforesaid contracts, agreements and understandings.
3.1.5.2 Neither the Company nor any of the Subsidiaries has sold or otherwise
disposed of, since the date of its respective incorporation, any
shares, or other assets or rights except in the ordinary course of
business in circumstances from which any liability (whether contingent
or otherwise) may arise by virtue of any obligation, representation,
warranty or indemnity in connection with such sale or disposal.
3.1.5.3 Neither the Company nor any of the Subsidiaries does currently have nor
will it have in the future any liability arising from past
relationships with any Associated Party..
3.1.5.4 Neither the Company nor any of the Subsidiaries has entered into any
agency or distribution agreements different from those referred to in
ANNEX (3.1.5.1). To the best of the Sellers' knowledge, no current or
former agent or distributor is entitled to any kind of indemnity or
severance payments.
3.1.5.5 The Sellers expressly represent that the agreement of intent (acuerdo
de intenciones) signed by [...***...] and attached hereto as ANNEX
(3.1.5.5), will be terminated by the Sellers and [...***...] for the
purpose of releasing the Company and/or any other company of the SLI
Group from the obligations assumed therein at no cost for SLI Group.
3.1.6 Taxes.
3.1.6.1 The Company and all of the Subsidiaries have complied, and are current
and up-to-date, with the required taxes, tax withholdings (including,
but not limited to, tax withholdings on any remuneration paid to any
persons respectively rendering services to the same), payments,
declarations, returns, filings, information disclosures, formalities or
any other obligations established in any applicable law or regulation
as well as any other fees, duties, including customs duties or special
contributions, or payments to any governmental, regional or local
authority or agency or to any third party as may be required to conduct
their business.
3.1.6.2 Neither the Company nor any of the Subsidiaries has any tax liabilities
(whether actual, contingent or deferred) other than those provided for
in the Disclosed Financial
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
27
Statements and except for the outcome of the proceedings mentioned in
ANNEX (3.1.6.2.).
3.1.6.3 Neither the Company nor any of the Subsidiaries has carried out,
co-operated in or induced any third party to commit acts or omissions
which constitute an offence, infringement or breach of tax laws.
3.1.6.4 The Company and all of the Subsidiaries have sufficient records
relating to past events, including any elections made, to calculate the
tax liability or relief which would arise on any disposal or on the
realisation of any asset respectively owned by the Company and/or any
of the Subsidiaries.
3.1.6.5 At the date of this Agreement, except for the proceeding referred to in
Annex (3.1.6.2), no event has occurred which may have interrupted,
according to Spanish legal provisions or other applicable legislation,
the statute of limitation of any of the fiscal years 1997, 1998, 1999
and 2000, with regard to any of the taxes which the Company and/or any
of the Subsidiaries is subject to.
3.1.6.7 Except for the tax audit referred to in Annex (3.1.6.2), neither the
Company nor any of the Subsidiaries has suffered a tax inspection
audit.
3.1.6.8 Notwithstanding the exceptions regarding Annex (3.1.6.2) made in the
present sub-Clause 3.1.6, the Sellers will be liable (in accordance
with Clause 4 below) vis-a-vis the Purchaser for the outcome of the
proceedings mentioned in said Xxxxx.
3.1.6.9 Notwithstanding anything of the foregoing, the Sellers expressly
represent that no tax contingency, liability or any kind of damage will
arise for SLI Group and/or for the Purchaser as a consequence of or in
relation to: (i) the sale by the Company of shares number [...***...]
to [...***...] of SERVICIOS LOGISTICOS INTEGRADOS SLI, S.A. to Mr. Xxxx
Xxxxx and Xx. Xxxxxx Xxxxxxx Xxxxxxx by virtue of the public deed
granted on January 23, 2002 and/or (ii) the granting of an option and
usufruct by Mr. Xxxx Xxxxx and Xx. Xxxxxx Xxxxxxx Xxxxxxx in favour of
the Company over said shares, by virtue of the public deed granted on
January 25, 2002, before the Public Notary of Madrid, Xx. Xxxxxx
Xxxxxxxxx Xxxxxxx, with number 228 of his public record, which
settlement from Stamp Duty (i.e. liquidacion del Impuesto sobre
Transmisiones Patrimoniales y Actos Juridicos Documentados) is attached
hereto as ANNEX (3.1.6.9).
3.1.7 Labour and Social Security.
3.1.7.1 Labour:
(i) Attached as ANNEX (3.1.7.1.i)) is a list of all the employees
on the payroll of the Company and all of the Subsidiaries and
a detailed breakdown showing their seniority, employment term,
occupational category and remuneration.
For the purposes of this Agreement, "remuneration" will
include the salary; extra payments; bonuses; premiums;
incentives; stock options; profit sharing
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
28
arrangements; travel, accident, disability, life or medical
insurance; formal or informal pension plans; company cars;
loans; luncheon vouchers; or any other type of labour
condition or compensation (whether in cash or in kind, whether
formal or informal) received by any employee, executive,
officer or director of the Company and all of the
Subsidiaries.
(ii) The Company and all of the Subsidiaries have complied with the
laws and regulations governing employment relations including
any applicable Collective Bargaining Agreements, and are
up-to-date in the payment of all remuneration due to their
respective employees. The employment contracts entered into by
the Company and all of the Subsidiaries with their respective
employees reflect the actual works and other circumstances
carried out by the Company's and the respective Subsidiary's
employees, and there is not any circumstance, either legal or
otherwise, under which said employment contracts should be
modified, extended or transformed without the Company's or the
respective Subsidiary's consent.
The employment relationships between the Company and all of
the Subsidiaries and their respective employees are subject to
the Collective Bargaining Agreements set out in ANNEX
(3.1.7.1.ii), which have and will continue to be complied with
in full, and no other collective agreement affects these
employment relationships. No private company agreements are
being negotiated which affect or could affect the Company's
and/or any of the Subsidiaries' employees.
(iii) Neither the Company nor any of the Subsidiaries has entered
into top executive employment contracts ("contratos de alta
direccion") as regulated in Royal Decree 1382/1985, of August
1, except for that contained in ANNEX (3.1.7.1.iii).
(iv) No current or former employee, executive, officer or director
of the Company and/or any of the Subsidiaries is entitled to
any kind of termination indemnity or severance payment
exceeding that established as a minimum by any applicable law,
regulation or the aforementioned Collective Bargaining
Agreement.
(vi) Neither the Company nor any of the Subsidiaries has had any
collective dispute regarding their employees in the last three
(3) years. Neither the Company nor any of the Subsidiaries are
involved, nor have they given notice to any of their employees
of any redundancies, whether individual or collective. The
Sellers are not aware of any circumstances which are likely to
give rise to any collective dispute or which could make a
collective redundancy procedure to be necessary or convenient.
(vii) Neither the Company nor any of the Subsidiaries has undergone
any employment inspection over the past five (5) years and
they are currently not undergoing any such inspection.
(viii) There is no loan, advance payment, guarantee or financing of
any type granted by the Company or any of the Subsidiaries to
any past or current employee, executive or director or any of
their relatives up to the fourth degree of consanguinity or
affinity, which is currently pending payment or execution.
29
(ix) None of the service agreements entered into by the Company
and/or any of the Subsidiaries, whether or not currently in
force, could be deemed to constitute an employment
relationship with the Company and/or the corresponding
Subsidiary. However, this representation is not made in
respect of the truck drivers ("autonomos") rendering transport
services to the Company and/or any of the Subsidiaries, in
respect of which the Sellers will not assume any liability
under this Agreement.
(x) The employees identified in ANNEX (3.1.7.1.x) are exclusively
related to the Excluded Business and have been duly
transferred to the Excluded Business. None of the employees
identified in Annex (3.1.7.1.i) should have been transferred
to the Excluded Business.
3.1.7.2 Social Security:
(i) Until the date hereof, the Company and all of the Subsidiaries
have complied with the laws and regulations governing Social
Security ("Seguridad Social") and have made the required
withholdings, payments, filings and information disclosures.
(ii) There are no obligations to pay any medical insurance, any
pension premiums to any pension funds or other similar
schemes, covering the current or former employees, officers,
directors or shareholders of the Company and the Subsidiaries,
except as shown in ANNEX (3.1.7.1.i) attached hereto.
(iii) Neither the Company nor any of the Subsidiaries is bound to
any commitment towards current or former employees, officers,
directors or shareholders to pay any complementary amount to
the subsidies provided by the Social Security system in the
event of any type of employees' disability.
3.1.8 Intellectual and Industrial Property.
3.1.8.1 All intellectual and industrial property rights including, but not
limited to, patents, inventions, designs, industrial designs,
copyrights, authors' rights, databases, trademarks, computer programs,
brand names, company signs, internet domains, know-how and any other
right contained in Legislative Royal Decree 1/1996, of 12 April, and
all confidential information and rights with a similar or analogous
content which could exist world-wide, whether registered or not, and
all applications made in this respect used in the business of the
Company and/or any of the Subsidiaries ("Intellectual or Industrial
Property"):
(i) are the property of the Company or the respective Subsidiary,
or have been validly licensed to the Company or the
corresponding Subsidiary in accordance to the agreements
attached hereto as ANNEX (3.1.8.1.i);
(ii) are valid and may be exercised;
(iii) to the Sellers' best knowledge, are not being violated or
attacked by any person and there is no opposition to them;
(iv) are not licensed to any other person and no authorisation has
been granted in this respect;
30
(v) ANNEX (3.1.8.v) contains a list of rights which have been
registered with the Spanish Patent and Trademark Office or
similar organisation abroad, when registration was requested
and if there is an exclusive right to use such items; and
(vi) there are no claims or applications outstanding which could
affect the veracity and accuracy of the above in the event of
being granted or denied.
3.1.8.2 The procedures employed and products and services commercialised by the
Company and/or the Subsidiaries do not require the use, appropriation
or violation of the intellectual or industrial property rights of third
parties which are not held by the Company and/or the corresponding
Subsidiary.
3.1.8.3 Neither the Sellers, nor the Company, nor any of the Subsidiaries have
failed to comply with their confidentiality obligations and no third
party may make any claim as a result of owning or using any
intellectual or industrial right and, neither the acquisition of the
Shares or the disclosure to the Purchaser of this confidential
information will give rise to the failure to maintain confidentiality
which could be the subject of a claim by third parties against the
Sellers, the Company or any of the Subsidiaries.
3.1.8.4 Neither the Company nor any of the Subsidiaries has violated, and does
not violate, any use authorisation and does not unlawfully appropriate
any patent, trademark, brand name, copyright, exclusive know-how,
commercial secret or any other intellectual or industrial property
right which pertains or is owned by any individual or company and
neither the Sellers, nor the Company, nor any of the Subsidiaries have
any knowledge of the existence of any pending lawsuits or any threat to
file any lawsuit against any of them by third parties as a result of
any alleged violation of these rights.
3.1.9 Business Continuity.
The personal property used by the Company and/or any of the
Subsidiaries in the ordinary course of the Acquired Business, including
"inter alia", machinery, tools, data processing equipment, computer
programs, furniture and other tangible personal property, as well as
the material components of any type used by the Company and/or any of
the Subsidiaries have been sufficient for carrying out their respective
business activities until the date hereof.
3.1.10 Insurance.
Attached as ANNEX (3.1.10) is a list of all the insurance policies in
force taken by the Company and each of the Subsidiaries. Said insurance
policies are sufficient to duly insure all of the Company's and each of
the Subsidiaries' activities, assets and risks affecting their
respective business in accordance with habitual practice in the sector
and currently all premiums have been paid as agreed.
31
All the obligations arising from said insurance policies including, but
not limited to, disclosure obligations, have been complied with.
3.1.11 Quality and normalisation.
The machinery, assets and procedures used by the Company and each of
the Subsidiaries comply with the standards of quality and health
generally accepted in the relevant industry, and have obtained the
legally required official approvals.
3.1.12 Subsidies.
No subsidies have been granted in favour of the Company and/or the
Subsidiaries.
3.1.13 Administrative and Environmental Matters.
3.1.13.1 The Company and the Subsidiaries have not been and may not be held
liable under, and comply and have complied with, the administrative and
environmental laws and regulations applicable to their business, assets
and activities (whether of a local, Autonomous Region, State nature, as
well as International Treaties to which Spain is a party and European
Region or any other kind).
The Sellers expressly represent that there are no sanctions proceedings
initiated or, to the best of their knowledge, pending due to a
potential environmental infringement.
3.1.13.2 There exist no soils or underground water polluted by the Company or
any of the Subsidiaries, their respective business, assets or
activities.
3.14 United States Foreign Corrupt Practices Act and other matters.
Neither the Sellers nor any of the companies within SLI Group, and none
of their respective directors, employees or representatives, as
applicable,
(a) have taken any action which is or could be deemed to be a violation
of the Foreign Corrupt Practices Act in respect of the Company and/or
the Subsidiaries on the assumption that it applied to the Company
and/or the Subsidiaries,
(b) are aware of any action or conduct which could be deemed to be a
violation of the Foreign Corrupt Practices Act in respect of the
Company and/or the Subsidiaries on the said assumption and
(c) have received, offered, given, paid, authorized the payment of, or
promised, directly or indirectly, any asset, money, gift or other thing
of value (whether of the Company, any of the Subsidiaries or otherwise)
to any person, including but not limited to any foreign official, for
the purpose of unlawfully obtaining or granting any advantage (whether
of a business nature or not) to any person, which could affect the
Company and/or any of the Subsidiaries in any way.
32
3.1.15 Litigation.
Except for that reflected in ANNEX (3.1.15), there is no litigation,
nor any disputes, administrative proceedings, arbitration, written
charges or written complaints, current or pending or, to the best of
the Sellers' knowledge, threatened, which may adversely affect or
involve the Company and/or any of the Subsidiaries. Neither the Company
nor any of the Subsidiaries is in default in the compliance of any
judicial, administrative or arbitration judgement and is not undergoing
an inspection or investigation of any kind by any authority (except for
those mentioned in the present Agreement or in any Annex hereto).
3.1.16 Licenses and permits.
The Company and all of the Subsidiaries have obtained and hold the
licences, permits, approvals and authorisations which are required
regarding their respective business activities as they are currently
carried out, and their assets. Such licenses, permits, approvals and
authorisations are in full force and effect, have not been cancelled,
revoked, suspended or changed in any way, have not been assigned,
transferred, or granted to third parties, and are not subject to any
condition, restriction or any other limitation and, to the best of the
Sellers' knowledge, there is no reason to believe (including without
limitation the execution and completion of this Agreement) that they
might be suspended, cancelled, revoked, changed or not renewed.
3.1.17 No Conflict.
The execution and performance of this Agreement and all other documents
to be executed or performed hereunder: (i) will not require any
consent, approval or notice to or from any of the Sellers, the Company
or any of the Subsidiaries (save for those already obtained and
established in the Company's or in the Subsidiaries' By-laws), and (ii)
will not conflict with, result in the breach, termination or, to the
best of the Sellers' knowledge, not renewal of, or constitute a default
under, any contract, agreement, obligation, resolution or other
instrument to which the Sellers, the Company or either one of the
Subsidiaries are a party or by which the Sellers, the Company or any of
the Subsidiaries are bound or affected (including, without limitation,
those related to the military business of SLI Group).
Without limitation of the foregoing, the Sellers expressly represent
that they have not been informed that, nor are they aware of any
circumstance which could lead them to suspect that any of the
agreements entered into by the Company and/or any of the Subsidiaries
in relation to the military business will be terminated.
3.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser represents and warrants to the Sellers as follows (the
"REPRESENTATIONS AND WARRANTIES OF THE PURCHASER"):
(i) The Purchaser is a corporation duly incorporated and validly
existing under the Spanish law, not yet recorded at the
Commercial Registry and UTi Worldwide is a corporation duly
incorporated and validly existing under the laws of British
Virgin Islands and recorded at the Commercial Registry of
British Virgin Islands with number 141257. Both of them are in
good standing, and have the required legal capacity for
entering into this Agreement and for performing the terms and
33
conditions hereof, without breaching their respective By-laws,
any applicable legal provisions or any agreement or contract
to which it is a party.
(ii) This Agreement is duly executed by the Purchaser and UTi
Worldwide and constitutes a valid and binding agreement for
both the Purchaser and UTi Worldwide, enforceable against the
Purchaser and UTi Worldwide in accordance with its terms.
(iii) All the UTi Worldwide Shares currently are of the same class
and serie and are equal in voting and economical rights and
obligations.
(iv) The Purchaser and UTi Worldwide have the necessary capacity
and have and/or will carry out any and all actions that may be
necessary to ensure the transfer in favour of the Sellers of
the property over the UTi Worldwide's Shares during the
validity of this Agreement in order to be able to pay to the
Sellers, from time to time, the Amount Payable when it becomes
due and payable according to the provisions established
herein. Likewise, the Purchaser and UTi Worldwide represent
and warrant that there are currently no legal, corporate or of
any other nature impediments (and there are no reasons to
believe that such impediments could appear in the future) that
could prevent the Sellers from receiving the UTi Worldwide
Shares that could correspond to them according to the
provisions of this Agreement, even if such transfer in favour
of the Sellers would have to be made on the date hereof.
(v) The Purchaser declares that, as far as it is aware, UTi
Worldwide complies with the United States Securities
regulations and, specifically with the public information
obligations, so that an orderly diligent businessman could
rely on such publicly available information in order to make a
proper judgement on the UTi Worldwide's Shares for purposes of
accepting them as payment of the Amount Payable.
The Purchaser shall hold the Sellers' fully indemnified and harmless in
respect of any damages and losses suffered as a result of the breach by
the Purchaser of any of the Representations and Warranties of the
Purchaser.
3.3 NO MATERIAL INFORMATION UNDISCLOSED.
The Representations and Warranties of the Sellers contained in the
present Agreement and its Annexes, as well as all of the documents
provided to the Purchaser by the Sellers and/or the Company, their
employees and advisors with respect to the present Agreement and its
Annexes are true and accurate. None of the Representations and
Warranties of the Sellers in the present Agreement and its Annexes hide
or omit any significant fact or information whatsoever, or any whose
importance could be reasonably considered as necessary for a third
party to have an adequate knowledge of the Company and all of the
Subsidiaries.
3.4 NO EXCEPTIONS.
The Representations and Warranties of the Sellers contained herein are
not subject to any exception, save those expressly stated above and/or
expressly stated by the Sellers in this Agreement, and will not be
affected by any examination made by, for or on behalf of the Purchaser
(including the due diligence referred to under Recital IX above), the
knowledge of the Purchaser and of any of the Purchaser's respective
officers, directors, stockholders,
34
employees, advisors or agents, or the acceptance by the Purchaser of
any certificate or opinion from the Sellers, their respective officers,
directors, stockholders, employees, advisors or agents, except as
otherwise provided in this agreement and/or its annexes.
3.5 ANNEXES.
Each and all the exceptions to the Representations and Warranties of
the Sellers pursuant to Clause 3.1 above are deemed to have been made
as of the date hereof, regardless of the specific dates stated in each
of the Annexes attached hereto containing such exceptions.
4. LIABILITY.
4.1 DAMAGES AND LOSSES.
The Sellers hereby jointly and severally undertake to hold the
Purchaser fully indemnified and harmless in respect of any damages and
losses suffered as a result of the inaccuracy, incompleteness or breach
of any Representation and Warranty of the Sellers contained herein or
breach of any obligation assumed herein (save for those obligations
that are undertaken individually by any of the Sellers such as, for
instance, confidentiality or non compete, among others), including
reimbursement of all professional fees (including reasonable lawyers'
fees), expenses incurred as a result thereof and the interests over
said damages and losses suffered until the full indemnification of the
same at a nominal annual interest rate of 6 months EURIBOR plus 1.5%,
which originates prior to the date of the present Agreement or which,
if arising after this date, is due to a circumstance occurring prior to
this date (the "DAMAGES"). For the purpose of establishing the Damages,
any award or determination should be made with a view to placing the
Purchaser in the position it would have been in if the inaccuracy,
incompleteness or breach had not existed. In relation to the
aforementioned interests to be accrued over damages and losses and to
be paid by the Sellers to the Purchaser, the Parties expressly agree
that they will accrue (i) as from Completion Date, regarding Damages
arising from the lower value of any of the Company's or any of the
Subsidiaries' assets, as well as the amount of any fictitious or
non-existent asset, and (ii) as from the date on which the
corresponding Notice is sent to the Sellers, for Damages arising from
any other circumstance.
In particular, and without limitation to the generality of the
foregoing, the following would be considered Damages, given the
circumstances established in the preceding paragraph and provided
always that such Damages refer to circumstances occurring prior to the
date hereof:
a) Any charge or tax levied against the Company or any of the
Subsidiaries, their respective businesses or properties for
which no provision has been made in the Disclosed Financial
Statements, if legally required.
b) Any Social Security obligation relating to the Company or any
of the Subsidiaries, their respective businesses or properties
for which no provision has been made in the Disclosed
Financial Statements, if legally required.
In the event any tax or Social Security claim being lodged,
the Sellers shall reimburse the Purchaser for the principal,
surcharges, interest, fines and court or
35
out-of-court expenses incurred during negotiations, in
particular, with the tax or Social Security authorities or for
any opposition or defence processes in courts.
c) All debts and liabilities of the Company and/or of any of the
Subsidiaries which have not been revealed or for which no
provision has been made in the Disclosed Financial Statements,
if legally required..
d) The amount of any loan and/or account receivable mentioned in
Clause 3.1.3.1 above which is not collected in accordance with
said Clause.
e) The lower value of any of the Company's or any of the
Subsidiaries' assets which are not recorded in the accounts in
accordance with accounting principles generally accepted in
Spain, as well as the amount of any fictitious or non-existent
asset.
Notwithstanding the foregoing, should the Purchaser be fully
indemnified by the Sellers, including, if applicable, through the
provision of an adequate bank guarantee, for the Damages arising from a
Contingency (as defined below) which had been taken into account as
losses or expenses of SLI Group for the purposes of calculating the
Earnings After Taxes for any of the Second to the Fifth Tranches, the
amount accounted as losses and expenses shall be added up again for the
purpose of calculating the Earnings After Taxes of the Accounting Year
in which the Purchaser has been indemnified.
The full payment by the Sellers to the Purchaser of the Damages
suffered as a result of any inaccuracy, incompleteness or breach of any
Representation and Warranty of the Sellers, shall prevent the Purchaser
from requesting any other remedy from the Sellers for reason of said
inaccuracy, incompleteness or breach.
4.2 STATUTE OF LIMITATIONS.
As a general rule, the Sellers shall be liable vis-a-vis the Purchaser
for a term of [...***...] from the date hereof with regard to the
untruthfulness, inaccuracy or incompleteness of any Representation and
Warranty of the Sellers. As an exception, the Sellers' liability with
regard to taxes, labour, social security, environmental and
administrative matters shall expire when the respective statute of
limitations expires. The Sellers expressly waive the lapsing periods
envisaged in Article 1490 of the Spanish Civil Code and Articles 336
and 342 of the Spanish Code of Commerce.
Upon the expiration of the respective statute of limitations, the
Sellers' indemnity obligation will continue in full force and effect
with regard to any Contingency (as defined under Clause 5.1 below)
which has been the subject of a Notice (as defined under Clause 5.1
below) within the term of the respective statute of limitations.
4.3 SELLERS' LIABILITY AMOUNT LIMITATIONS.
The Parties agree the following thresholds and limitations to the
Sellers' liability for Damages:
(i) The Purchaser shall not be entitled to be indemnified by the
Sellers for:
36
(a) any claim for Damages of an amount less than
[...***...] Euro. For this purpose, all claims
related to or arising from one same or substantially
the same event, circumstance, act or omission (or a
series of or related events, circumstances, acts or
omissions) shall be deemed to constitute just one
claim.
(b) unless and until the aggregate Damages claimed
(without taking into account the claims under the
threshold referred to under (a) above) exceeds
[...***...] Euro; once the amount of Damages claimed
exceeds the aforementioned threshold, the Parties
expressly agree that the Sellers shall be liable in
front of the Purchaser of all the Damages claimed up
to that moment, from the first Euro.
(ii) The maximum liability assumed by the Sellers for Damages
amounts to the Total Purchase Price received and to be
received during the validity of the present Agreement.
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
37
4.4 SELLERS' LIABILITY IN RESPECT OF THE EXCLUDED BUSINESS.
The Parties expressly agree that should the Purchaser or any of the
companies of the SLI Group receive any claim under the agreement
attached hereto as Annex (V) or in any way related to the Excluded
Business, the Purchaser will notify that claim to the Sellers and the
Sellers will have to immediately and fully indemnify the Purchaser (in
accordance to Clause 4.1) of all the Damages arising from that claim.
In that case, Clauses 4.2, 4.3 and 5 will not be applicable and, thus,
the Sellers' liability to indemnify such Damages will have no
limitation (of a time, amount or any other nature) and the Sellers will
not be entitled to object, defend or reject any such claim in any way.
5. CLAIMS' PROCEDURE.
5.1 NOTICE.
The Purchaser will notify to the Sellers any fact, act, circumstance or
third party claim which gives or may give rise to liability hereunder
as a result of the untruthfulness, inaccuracy, incompleteness or breach
of a Representation and Warranty or any covenant or obligation
hereunder (a "CONTINGENCY"). The Contingency will be notified in
writing to the Sellers' Representative, pursuant to Clause 11.2 below
(the "NOTICE") as soon as possible after the Purchaser becomes aware of
the same, and, in any case, in the maximum term of thirty (30) calendar
days from the moment when the Purchaser became effectively aware of the
Contingency, without prejudice of that established for under Clause
5.2. The Notice will include a reasonably detailed explanation of the
facts and, if possible, an estimate of the amount claimed from the
Sellers (the "CLAIMED AMOUNT"). Once the aforementioned period of
thirty (30) calendar days (or, if applicable, in respect of third party
claims, the period established in section 5.2 below for the Notice to
be given by the Purchaser) has elapsed, the Purchaser shall
automatically lose its right to claim for Damages in respect of the
corresponding Contingency.
Within thirty (30) calendar days of the receipt of the Notice or, in
case of a Third Party Claim (as defined below) within the term
indicated in Clause 5.2 below, the Purchaser and the Sellers will
negotiate in good faith in order to reach an agreement with regard to
(i) the existence of the Contingency, and (ii) the amount to be paid to
the Purchaser in order to keep it harmless. Within the aforementioned
thirty (30) calendar day period, the Sellers will jointly reply in
writing to the Purchaser, through the Sellers' Representative, whether:
(i) They fully accept the Contingency and the Claimed Amount; or
(ii) They accept the Contingency and/or the Claimed Amount only in
part;
(iii) They do not have enough information to be in a position as to
neither accept nor reject the Contingency and/or the Claimed
Amount; or,
(iv) They reject the Contingency, and thus the full Claimed Amount.
If the Sellers' Representative do not reply to the Purchaser in writing
within the above-mentioned thirty (30) calendar day period, the Sellers
will be deemed to have delivered the reply referred to under (iii)
above.
38
In cases (i) and (ii) above, the Sellers will pay the Claimed Amount
(or the accepted part thereof) within thirty (30) business days from
the date of the Sellers' Representative reply to the Notice.
In cases (ii) (in respect of the non-accepted part of the Claimed
Amount), (iii) and (iv) above, the decision as to whether or not the
Claimed Amount shall be borne by the Sellers, shall be submitted to
arbitration pursuant to Clause 12.2 below, in case the Purchaser and
the Sellers fail to reach an agreement in this respect within a further
period of ten (10) days.
Should the Sellers pay to the Company the Claimed Amount and,
afterwards, there results (in a definitive way) that there was no
Damage (as defined hereunder) arising from the circumstance referred to
in said Notice, the Company shall return to the Sellers the
aforementioned Claimed Amount received from them.
5.2 THIRD PARTY CLAIMS.
In the event that the Contingency is a claim raised by a third party
against the Purchaser, the Company and/or any of the Subsidiaries (a
"THIRD PARTY CLAIM") the following rules shall apply:
(i) In case the law requires that defence against the Third Party
Claim be submitted before the expiration of a term, the Notice
shall be sent to the Sellers' Representative within the
maximum period of thirty (30) calendar days from the moment
when the Purchaser became aware of the Third Party Claim and,
in any case, within the first half of said legal term and, in
any case, the Sellers shall not be held liable for any
Contingencies arising therefrom should the Notice have been
sent to the Sellers' Representative after the expiration of
the first half of said term.
(ii) The Sellers will jointly reply to the Purchaser's Notice,
through the Sellers' Representative, pursuant to Clause 11.2.
below, in the maximum term of fifteen (15) calendar days
starting on the date after receipt of the Notice and, in any
case, with sufficient time in advance to enable the
preparation of an answer to the claim, any of the possible
replies referred to under (i), (ii), (iii) or (iv) of Clause
5.1. above.
(iii) If and when the Sellers accept the Contingency and the Claimed
Amount in full (i.e. if their reply is that established under
(i) of Clause 5.1 above), they will be jointly entitled to
direct the legal defence against the Third Party Claim until a
final judgement or decision is rendered or a settlement is
reached; and, the Purchaser undertakes to provide them with
the information, documentation and cooperation of the Company
and/or its Subsidiaries that are reasonably necessary,
including the granting of powers of attorney in favour of the
advisors jointly designated by the Sellers. In such case, all
fees and expenses will be borne by the Sellers, including the
obligation to place bonds or provide guarantees in any
judicial, administrative or arbitration proceedings. The
attorney will be instructed to provide both the Purchaser and
the Sellers with copies of all correspondence and any other
legal documents and information in relation to the claim
during the course of the proceedings. The Sellers shall keep
the Purchaser punctually informed of all the acts and
documents of the proceedings, giving notice to the Purchaser,
in particular, of the summons and the pleadings to be filed on
behalf of the Purchaser, the Company and/or its Subsidiaries
in reasonable advance. The Purchaser, the
39
Company and its Subsidiaries shall have the right to attend
the proceedings to be carried out vis-a-vis third parties, as
well as to review in advance the pleadings that are going to
be filed on its behalf.
(iv) If the Sellers' reply is either of those provided for under
section (ii) or (iii) of Clause 5.1 above, the Sellers will be
jointly entitled to direct the legal defence against the Third
Party Claim in accordance with section (iii) of this
sub-Clause 5.2, provided that said direction is expressly
requested in the Sellers' Representative reply and section
(iii) will apply, except that, in this case, the Sellers: (a)
will not be allowed to settle the Third Party claim without
the Purchaser's prior and written express consent (which shall
not be unreasonably withheld), and (b) shall consider the
comments/suggestions of the Purchaser regarding the pleadings
or writs that are going to be filed by the Seller and, as long
as reasonably possible, include said comments/suggestions in
the pleadings and writs. In case the Sellers are not found
liable of the Third Party Claim and the Third Party Claim is
fully won against the corresponding third party by the Company
and/or the Subsidiary, the Sellers will be entitled to claim
from the Company and/or the Subsidiaries, as applicable, the
reimbursement of any reasonable and justified cost, reasonable
fees and expenses incurred for the direction of the legal
defence of said Third Party Claim; in any other case, the
Sellers will bear all the costs incurred for the direction of
the legal defence of said Third Party Claim and will not be
entitled to claim any reimbursement from the Purchaser, the
Company and/or the Subsidiaries.
Nevertheless, should the Purchaser deem, at any moment:
* that the Third Party Claim, despite of having been notified to
the Sellers, is not under the Sellers' liability, the
Purchaser (and not the Sellers) would be entitled to
immediately recover the exclusive direction of the legal
defence against the Third Party Claim and the Sellers shall be
obliged to deliver to the Purchaser all the documents related
thereto and do anything necessary for the purpose of changing
the legal direction of said Third Party Claim. The Company
shall reimburse the Sellers any reasonable and justified
costs, reasonable fees and expenses incurred for the direction
of the legal defence of said Third Party Claim up to that
moment and the Purchaser shall acknowledge that the Sellers
are not at all liable for such Third Party Claim and expressly
waive its right to claim against them for any such reasons.
For anything else (including, the legal direction, settlement,
knowledge or information) it would be as if the Third Party
Claim would have never been notified to the Sellers. Thus, the
Sellers will have no rights in relation to the Third Party
Claim.
* that the direction of the legal defence by the Sellers in this
case could reasonably adversely affect the interests of the
Company and/or of any of the Subsidiaries, the Purchaser (and
not the Sellers), acting reasonably and following previous
consultation with the Sellers, would be entitled to direct the
legal defence against the Third Party Claim but: (a) the
Purchaser will not be entitled to settle the Third Party Claim
without consulting with the Sellers' Representative, and (b)
the Purchaser shall consider the comments/suggestions of the
Sellers regarding the pleadings or writs that are going to be
filed by the Purchaser and, as long as reasonably possible,
include said comments/suggestions in the pleadings or writs.
40
(v) If the Sellers' Representative's reply is that referred to
under (iv) of Clause 5.1 above or, either one of those
referred to under sections (ii) or (iii) of Clause 5.1 but
without expressly requesting the direction of the legal
defence for the Sellers or if the Sellers' Representative does
not reply within the term established for that purpose under
section (ii) of the present Clause 5.2, the Purchaser may, at
its discretion and without incurring any liability towards the
Sellers, direct and control the legal defence. In particular,
the Purchaser will be entitled to settle the claim without the
Sellers' consent.
(vi) In the cases referred to under (iv) (in case the Purchaser
directs the legal defence pursuant thereto) and (v) above, the
Purchaser shall keep the Sellers punctually informed of all
the acts and documents of the proceedings, giving notice to
the Sellers' Representative, in particular, of the summons and
the pleadings to be filed on behalf of the Purchaser, the
Company and/or its Subsidiaries in reasonable advance. The
Sellers shall have the right to attend the proceedings to be
carried out vis-a-vis third parties, as well as to review in
advance the pleadings that are going to be filed. The attorney
will be instructed to provide both the Purchaser and the
Sellers with copies of all correspondence and any other legal
documents and information in relation to the claim during the
course of the proceedings.
6. PERMANENCE. NON-COMPETE. CONFIDENTIALITY. SALE AND CHANGE OF CONTROL.
6.1. PERMANENCE.
For the purpose of the present Clause 6.1, the Company shall be
understood to be replaced by the Purchaser and/or any other company or
entity, in case the Company is merged into the Purchaser and/or any
other company or entity.
6.1.1 The Parties recognise their mutual interest in Xx. Xxxx Xxxxx Xxxxxxx
Xxxxxxx and Xx. Xxxxxx Xxxxxxx Xxxxxxx (hereinafter the "MANAGERS") to
be the chief executive officers of the Company and its Subsidiaries
with all the necessary faculties to such effect (and only subordinated
to the Board), and to direct the day to day management of the Company
and the Subsidiaries for at least the period going from Completion Date
to the Payment Date of the Fifth Tranche (hereinafter the "PERMANENCE
PERIOD"). The Purchaser expressly undertakes to maintain the Managers
as Board members and top executive managers of the day-to day
management of the Company and the Subsidiaries during the Permanence
Period. The Managers expressly undertake to remain as such Board
members and top executive managers for the Permanence Period, subject
to the terms of this Agreement. The Purchaser declares that the Board
of Directors of the Company will initially consist of 6 members and
that such Board of Directors will initially include Xx. Xxxxx
Xxxxxxxxxxx and Xx. Xxxx Xxxxxxx as Board members. However, the
Purchaser may change the number of the members of the Board of
Directors and, subject to the present Clause 6.1, the Directors to be
appointed as such at any moment.
The Parties expressly acknowledge that the permanence and direct
involvement of Messrs. Xxxxxx and Xxxx Xxxxx Xxxxxxx Xxxxxxx in the
ordinary management of the SLI Group pursuant to the present Clause 6.1
is an essential reason for them to enter into this Agreement in the
terms contained herein; notwithstanding the above, the only
consequences of the breaching by the Purchaser of the present Clause
6.1 are those
41
expressly referred to herein and in no case will give the Sellers the
right to resolve or terminate this Agreement.
6.1.2 For the above-mentioned purpose, the Purchaser will appoint,
immediately after the execution of the present Agreement or as soon as
possible thereafter: (i) both Managers as Joint and Several Managing
Directors (Consejeros Delegados Solidarios) of the Company; (ii)Xx.
Xxxxxx Xxxxxxx Xxxxxxx as representative of the Company as Sole
Administrators of all the Spanish Subsidiaries (except for SERVICIOS
LOGISTICOS INTEGRADOS SLI, S.A.) and (iii) Xx. Xxxx Xxxxx Xxxxxxx
Xxxxxxx as representative of the Company as Sole Administrator of
SERVICIOS LOGISTICOS INTEGRADOS SLI, S.A.. Both Managers shall also
remain as Directors of SLI TACISA, INC. and of GSLI-GRUPO DE SERVICOS
LOGISTICOS INTEGRADOS LDA.
However, should the Purchaser reasonably consider that either of the
Managers does not comply with or does not follow the general guidelines
of UTi Group attached hereto as ANNEX (6.1.2), as amended from time to
time by UTi Group, the Purchaser will be entitled (without any penalty
or obligation to indemnify neither the Sellers nor the Managers in any
way whatsoever, other than as expressly provided for hereunder, if
applicable), to remove the Manager in breach from its post as Managing
Director, and immediately appoint him, i.e. either Xx. Xxxxxx Xxxxxxx
Xxxxxxx or Xx. Xxxx Xxxxx Xxxxxxx Xxxxxxx, as General Manager (Director
General) of the Company and/or the corresponding Subsidiary, as
applicable, and immediately grant the necessary powers of attorney to
such effect in his favour, with the scope usual for General Managers.
In that case, the terms and conditions of his employment as General
Managers will be those provided for under the Service Agreement for
that case. This is without prejudice of this lack of compliance by any
of the Managers being considered (as the case may be) a "fair cause"
for the Voluntary Cessation (as defined below) of the same.
The Company and the Managers, will sign immediately after the execution
of the present Agreement one service agreement (the "SERVICE
AGREEMENT") attached hereto as ANNEX (6.1.2.bis).
The obligations established in the present Clause 6.1 are undertaken by
the Purchaser in favour of the Managers and by the Managers in favour
of the Purchaser in their condition of Sellers under the present
Agreement and also in their condition as experienced managers of the
SLI Group. Thus, the Managers will not be entitled to allege their
condition under the Services Agreement, as General Managers or under
any other relationship with the Company and/or the Subsidiaries
(including that of an employment nature), as the case may be, for the
purpose of objecting to the full compliance of their obligations
undertaken in the present Clause 6.1.
Moreover, the Managers undertake to accept and to carry out their posts
as Managing Directors (Consejeros Delegados) of the Company with the
required due diligence for which they will be appointed immediately
after the execution of the present Agreement.
The Purchaser undertakes to ensure that:
(i) Xx. Xxxxxx Xxxxxxx Xxxxxxx is proposed for his appointment as
member of the European Regional Executive Team of UTi
Worldwide and as Vice President thereof, with functional
responsibility in warehousing and distribution division; and
42
(ii) Xx. Xxxxxx Xxxxxxx Xxxxxxx and Xx. Xxxx Xxxxx Xxxxxxx Xxxxxxx
are proposed for their appointment as Iberia Vice Presidents
of UTi Worldwide, being entitled to include reference to this
post on their UTi Worldwide's business cards.
6.1.3 In case either of the Managers cease or are ceased (in the terms
defined in the Services Agreement) as Joint and Several Managing
Directors (except in the case provided for under Clause 6.1.2 above) or
as General Managers (in the case established in Clause 6.1.2 above) of
the Company and/or the Subsidiaries, the following will apply:
(1) Should the cause for the cease of either or both of the
Managers be the expiration of their Services Agreement's term
or one of the Managers' death, retirement, inability to
continue working (incapacidad permanente) or serious illness
("INVOLUNTARY TERMINATION") , neither the Purchaser nor the
Sellers will be entitled to any indemnification.
Should both of the Managers (either simultaneously or
successively) cease before the expiration of their Services
Agreement's term due to Involuntary Termination, neither the
Purchaser nor the Sellers shall be entitled to any
indemnification whatsoever and any pending Tranches shall be
payable in accordance with Clause 2 of the present Agreement.
However, the Sellers should be jointly entitled, but not
obliged, to jointly request the payment from the Purchaser (by
means of a written notification sent to the Purchaser and as
an alternative obligation to the payment of the Tranches that
have not been yet paid by the Purchaser at that time) the
greater of the following amounts, to be divided into as many
equal annual instalments as the number of Tranches pending to
be paid upon occurrence of the last Involuntary Termination
and each of said instalments to be paid on the 30th of April
of each year after the occurrence of the last Involuntary
Termination:
(a) an amount equivalent to [...***...] of [...***...]
the average of the Earnings After Taxes of SLI Group
during the Accounting Years closed before the last
Involuntary Termination multiplied by the number of
Tranches pending to be paid by the Purchaser to the
Sellers; and
(b) an amount equivalent to [...***...] of [...***...]
the Earnings After Taxes of SLI Group during the last
Accounting Year closed before the Involuntary
Termination, multiplied by the number of Tranches
pending to be paid by the Purchaser to the Sellers.
The Parties expressly agree that the amount to be paid by the
Purchaser to the Sellers according to this sub-Clause 6.1.3(1)
shall never be lower than [...***...] (depending on whether
the last Involuntary Termination took place during the course
of the Second, Third, Fourth or Fifth Tranche, respectively)
of [...***...] the Earnings After Taxes of SLI Group during
the year starting on January 1 and ending on December 31,
2001.
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
43
(2) Should either of the Managers cease from either of the
aforementioned posts, due to any of the following causes
(hereinafter referred to as a "VOLUNTARY TERMINATION"): (i)
resignation of the Manager (other than as a result of the
factual deprival of his responsibilities or authorities as
Managing Director or, if applicable, as General Manager; other
than as a result of the serious and imputable non compliance
of the Company's obligations under the Services Agreement; or,
other than as a result of the reorganisation of SLI Group
pursuant to Section (4) of the present Clause 6.1.3);;or (ii)
as a result of the decision of the Company based on a "fair
cause", as defined below, the Purchaser shall be entitled, but
not obliged, to replace the Amount Payable (calculated as
provided for under Clause 2 above) under the Tranches not yet
paid by the Purchaser at the moment of the Voluntary
Termination, by the lower of the following amounts:
(a) an amount equivalent to [...***...] of [...***...]
the average of the Earnings After Taxes of SLI Group
during the Accounting Years closed before the
Voluntary Termination multiplied by the number of
Tranches pending to be paid by the Purchaser to the
Sellers; and
(b) an amount equivalent to [...***...] of [...***...]
the Earnings After Taxes of SLI Group during the last
Accounting Year closed before the Voluntary
Termination multiplied by the number of Tranches
pending to be paid by the Purchaser to the Sellers.
However, should the "fair cause" be the decrease of the
Earnings After Taxes of SLI Group (as provided below) the
Purchaser shall be entitled, but not obliged, to replace the
Amount Payable (calculated as provided for under Clause 2
above) under the Tranches not yet paid by the Purchaser at the
moment of the Voluntary Termination only by an amount
calculated as per (a) above.
In any case, the Parties expressly agree that the total amount
to be paid by the Purchaser to the Sellers for all the
Tranches not paid by the Purchaser at the moment of the
Voluntary Termination according to this sub-Clause 6.1.3(2)
shall never be greater than [...***...] (depending on whether
the Voluntary Termination took place during the course of the
Second, Third, Fourth or Fifth Tranche, respectively) of
[...***...] the Earnings After Taxes of SLI Group during the
year starting on January 1 and ending on December 31, 2001.
The Purchaser shall exercise the right granted in the present
section (2) by means of the corresponding notification sent to
the Sellers' Representative within one (1) month as from the
Voluntary Termination.
In case said right is exercised, the Purchaser shall pay to
the Sellers' Representative the amount owed hereunder on the
following Payment Date. The Purchaser shall also be entitled
to elect, at its own discretion, in the aforementioned
notification to be sent to the Sellers' Representative, to pay
to the
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
44
Sellers the amount payable pursuant to the present section (2)
either in cash or in UTi Worldwide shares valuated as
established in Clause 2.3(ii)c, understanding as "Notification
Date" for that purpose, the date on which the aforementioned
notification is sent to the Sellers' Representative. Should
the Purchaser not pay punctually the amounts owed to the
Sellers under the present section (2), Clause 2.3.(ii).c).(3)
will apply.
The Parties expressly acknowledge that the Purchaser may
elect, at its sole option, to exercise the aforementioned
option in respect of all, some or none of the Sellers.
The right granted in the present section 6.1.2.(2) to the
Purchaser excludes any other remedy (notwithstanding that
provided for under the Services Agreement), including any
further claim of damages. The full payment by the Purchaser of
the amounts referred to in this section 6.1.2.(2) replaces
(and consequently extinguishes) the right of the Sellers to
request from the Purchaser the payment of the remaining part
of the Total Purchase Price that was still pending to be paid
by the Purchaser in favour of the Sellers.
For the purpose of the present section, the cessation by the
Purchaser of any of the Managers for the following causes
shall be understood to be based on a "fair cause":
- Any cause which would be considered as a
cause for "fair dismissal" by the Spanish
labour legislation, including the serious
and imputable breach of the Manager's
obligations.
- Due to a decrease of the Earnings After
Taxes of SLI Group of [...***...] or more
each quarter (in respect of the Earnings
After Taxes of the respective preceding
quarter) for three (3) consecutive quarters,
taking into account for this purpose: (a)
that a loss in any quarter should be
considered a [...***...] decrease in the
Earnings After Taxes of SLI Group for that
quarter; and (b) that costs for employment
redundancy and/or early termination of lease
incurred for the purpose of reorganising the
Company and/or any of the Subsidiaries will
not be computed for the purpose of
calculating the Earnings After Taxes of any
quarter.
(3) Should either of the Managers cease due to any other cause
(different from those provided for under sections (1) or (2)
above or (4) below) (hereinafter referred to as a "UNFAIR
TERMINATION"), and without prejudice to the consequences
provided for under the Services Agreement, the Sellers shall
be jointly entitled, but not obliged, to declare immediately
due and payable the part of the Total Purchase Price not paid
by the Purchaser at the moment of the Unfair Termination and,
to such effect, jointly request the Purchaser to pay (as an
alternative obligation to the payment of the Tranches that
have not been yet paid by the Purchaser at that time) the
greater of the following amounts:
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
45
(a) an amount equivalent to [...***...] of [...***...]
the average of the Earnings After Taxes of SLI Group
during the Accounting Years closed before the Unfair
Termination multiplied by the number of Tranches
pending to be paid by the Purchaser to the Sellers;
and
(b) an amount equivalent to [...***...] of [...***...]
the Earnings After Taxes of SLI Group during the last
Accounting Year closed before the Unfair Termination,
multiplied by the number of Tranches pending to be
paid by the Purchaser to the Sellers.
The Parties expressly agree that the amount to be paid by the
Purchaser to the Sellers according to this sub-Clause 6.1.3(2)
shall never be lower than [...***...] (depending on whether
the Unfair Termination took place during the course of the
Second, Third, Fourth or Fifth Tranche, respectively) of
[...***...] the Earnings After Taxes of SLI Group during the
year starting on January 1 and ending on December 31, 2001.
The Sellers shall exercise the right granted in the present
section (3) by means of the corresponding notification sent by
Sellers' Representative to the Purchaser within one (1) month
as from the Unfair Termination.
In case said right is exercised, the Purchaser shall pay to
the Sellers' Representative the amount owed hereunder within
one (1) month following the aforementioned notification.
Should the Sellers jointly exercise the right granted to them
in the present section, in the notification sent to the
Purchaser for that purpose they would also express if they
jointly elect that the amount payable under this section
6.1.3.(3) be paid in cash or in UTi Worldwide's Shares. Should
the latter be elected, UTi Worldwide's Shares would be
valuated as established in Clause 2.3(ii)c) above,
understanding as "Notification Date" the date on which the
aforementioned notification is sent to the Purchaser.
Should the Purchaser not pay punctually the amounts owed to
the Sellers under the present section (3), Clause
2.3.(ii).c).(3) will apply.
The right granted in the present section 6.1.3.(3) to the
Sellers excludes any other remedy (notwithstanding the rights
of the Managers under the Services Agreement), including any
further claim of damages arising from the cease of either
Manager. The full payment by the Purchaser of the amounts
referred to in this section 6.1.3.(3) replaces (and
consequently extinguishes) the right of the Sellers to request
from the Purchaser the payment of the remaining part of the
Total Purchase Price that was still pending to be paid by the
Purchaser in favour of the Sellers.
(4) In the event of the acquisition of shareholding control by a
third party, directly or indirectly, over the Company and/or
UTi Worldwide Inc together with a substantial renewal of the
governing bodies of the Company and/or the
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
46
Subsidiaries and/or of UTi Worldwide (i.e. replacement of at
least 50% of the members of the Board of Directors of the
Company and/or of UTi Worldwide by Directors which were not
related with UTi Group up to the moment of the acquisition of
said control), the Managers may resign from their posts only
within the three (3) months following the aforementioned
change or renewal and the Sellers will have the same rights as
provided for under Section 6.1.3.(3) above.
For the avoidance of doubt, the Parties expressly state that
the preceding paragraph will not be applicable and, thus, the
Managers shall not be entitled to resign from their posts, in
case of: (i) an acquisition of shareholding control if it does
not coincide with a substantial renewal of the governing
bodies of UTi Worldwide, the Company and/or the Subsidiaries
as per the preceding paragraph or (ii) any change in the
governing bodies of UTi Worldwide, the Company and/or the
Subsidiaries if it does not coincide with an acquisition of
shareholding control as per the preceding paragraph.
For the avoidance of doubt, the Parties expressly state that,
for the purposes of this section 6.1.3.(4), the notion of
"shareholding control" shall be the one contained in article
42 of the Spanish Code of Commerce ("Codigo de Comercio")..
6.2 NON-COMPETE.
The Sellers undertake:
(i) that they will not, unless prior written authorisation is
granted by the Purchaser, directly or indirectly, through a
related individual or company, during all time in which they
remain rendering their services to the Company and, in any
case, during [...***...] thereafter, employ or hire any person
who has been an employee, agent or representative of any of
the companies of SLI Group during the two-year period prior to
said date, or own, manage, operate, join, control, finance or
participate in any other form in, or be connected as a
principal, agent, representative, consultant, investor, owner,
partner, director, manager, joint venture, employee or
otherwise with, or establish any contractual ties with, or
carry out any other business or professional activity in
respect of any employee, company, partnership, business or
enterprise competing directly or indirectly with any of the
companies of SLI Group; and
(ii) to remove from the corporate name of the companies involved in
the Excluded Business all of the following words and to not
use any of them in any other company directly or indirectly
held or controlled by them: "TACISA", "SISTEMAS LOGISTICOS
INTERNACIONALES", "SISTEMAS LOGISTICOS DE INTERMEDIACION" and
any other which may be confusing with "SERVICIOS LOGISTICOS
INTEGRADOS" or "SLI". With respect to the Excluded Business,
such removal of corporate's name shall take place the earlier
of:
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
47
(a) the transfer of the Excluded Business to a third
party; and
(b) the Payment Date of the Fifth Tranche.
Notwithstanding the above, the Purchaser expressly authorises the
Sellers to participate in the shareholding of the Excluded Business
and/or to carry out non-executive posts (i.e. vocal del Consejo) within
the Board of Directors of the Owner of the Excluded Business,
[...***...], provided that the Sellers do not carry out any other
activities related therewith (including, without limitation, any
executive administration post, as sole/joint administrator or Managing
Director or any other).
The non-compete obligations under the present Clause 6.2 is assumed by
the Sellers in their condition as such, notwithstanding the rights and
obligations assumed by the Purchaser and the Managers under the
Services Agreement.
6.3 CONFIDENTIALITY.
The Sellers undertake, on their own behalf and on behalf of their
agents and professional advisors, to safeguard the secrecy and
confidentiality of all information regarding the Company and/or the
Subsidiaries, and to refrain from using for their own interests and
purposes or disclosing to third parties, without the prior written
consent of the Purchaser, any such confidential information, reports
and documents regarding SLI Group's business activities, including
without limitation the operation methods and systems, names and
addresses of customers and suppliers, prices charged and paid by its
suppliers and customers, technical data on the business' assets
operations and product manufacture know-how of the Company and/or its
Subsidiaries.
This confidentiality undertaking shall not apply when the disclosure of
such information is required:
(a) in order to comply with a legal duty or with a judicial or
administrative imperative order;
(b) to request or make possible the fulfilment of the rights and
obligations hereunder;
(c) to comply with the information requirements made by the
competition authorities, if applicable; and
(d) to inform its advisors and auditors, provided always that they
are legally or contractually obliged to maintain the
confidentiality of the information received;
6.4 PENALTY CLAUSE.
Each of the Sellers acknowledges and accepts that the obligations
undertaken under Clauses 6.2 and 6.3 above, have been essential for the
Purchaser to adopt its decision to purchase the Shares.
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
48
In the event of breach by any of the Sellers of any of the obligations
established under Clause 6.2, the Purchaser shall have the right to
receive a penalty from the Sellers in the amount of [...***...].
In the event of breach by any of the Sellers of any of the obligations
established under Clause 6.3, the Purchaser shall have the right to
receive a penalty from the Sellers in the amount of [...***...].
The Sellers shall not be freed from the obligations referred to in
Clauses 6.2 and 6.3 above upon payment of the penalties stipulated in
this Clause 6.4, the Purchaser having the right to demand compliance
with those obligations together with the payment of the penalty.
In any case, the Parties expressly acknowledge that the breach by the
Sellers of the obligations established under Clauses 6.2 and 6.3 will
in no case give the Purchaser the right to resolve or terminate this
Agreement.
6.5 EMPLOYEES OF SLI GROUP
The Purchaser hereby undertakes to ensure that the employees of SLI
Group have access to standard professional promotion policies of UTi
Group after the consummation of this transaction. The Purchaser further
declares that it does not currently plan to carry out an employee
redundancy plan within SLI Group.
6.6 OTHER UNDERTAKINGS
6.6.1 The Purchaser acknowledges the relevance of the foreign Subsidiaries of
SLI Group (and, in particular, of [...***...]) for the international
development of the Acquired Business and, therefore, undertakes to make
its best endeavours to ensure that the activities and the treatment of
such Subsidiaries remain as currently. In particular, the Purchaser
acknowledges the relevance of the good service of UTi Worldwide's
office in New York as regards the military business currently carried
out by SLI Group.
6.6.2 The Purchaser further undertakes to make its best endeavours to ensure
that all the computer and software systems, devices, hardware and
programmes of the UTi Group are implemented in the SLI Group as soon as
possible.
7. OTHER COVENANTS.
7.1 SLI NAME AND TRADEMARK.
SLI Group shall retain the property and right of use of all the
Intellectual and Industrial Property rights (including the trade name,
the trade marks, the patents, the computer programs and software, the
know-how and the good will) currently used by SLI Group.
Notwithstanding that provided for under Clause 6.2, the Purchaser
hereby expressly authorises (and further undertakes to ensure that the
Company and its Subsidiaries
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
49
authorise) the use by the Sellers of the intellectual and industrial
property rights and the distinguishing marks of SLI Group attached
hereto as ANNEX (7.1) in respect of the Excluded Business during a
period of twelve (12) months as from Completion Date. Once this period
has elapsed, the Excluded Business may not continue using said
intellectual and industrial property.
In any event, the Purchaser hereby undertakes that, at least for as
long as this Agreement remains in force, the Company and its
Subsidiaries shall use the distinguishing marks ("signos distintivos")
of the SLI Group (and namely the trademarks and commercial names) in
the exercise of its business, together with the UTi marks (but not
subordinated to UTi's), in such manner that the SLI Group is not
prejudiced by the decrease or stoppage in their use.
7.2 DEVELOPMENT OF BUSINESS IN SPAIN AND PORTUGAL.
The Parties hereto agree that any business to be carried out by the UTi
Group in Spain and/or in Portugal whose purpose is any of the
activities within the current ordinary course of the Acquired Business
or any other activity directly or indirectly related thereto, shall be
carried out by any of the companies of SLI Group.
This obligation shall be deemed breached by the Purchaser, in the event
that (i) any of the companies of the UTi Group or (ii) any of the
companies in which the Purchaser or other companies of the UTi Group
hold a majority stake carry out in Spain and/or Portugal without SLI
Group any activities within the current ordinary course of the Acquired
Business or any other activity directly or indirectly related thereto.
7.3 ESTABLISHMENT OF OPERATIONS IN PORTUGAL.
The Parties hereto agree to continue their current relationships of
cooperation as regards the exploitation of the Acquired Business in
Portugal and, in particular, they agree that such exploitation shall be
carried out (as at the present time) by [...***...].
Without prejudice of that provided for under Clause 3.1.5.5 of the
present Agreement, the Sellers expressly undertake to sign the
termination of the agreement of intent signed by [...***...] and
attached hereto as Annex (3.1.5.5), at their sole cost and expense. Any
amount paid, owed or committed to be paid (whether verbally or in
writing) to [...***...], for any reason (including the termination of
said agreement of intent), shall be directly and solely borne by the
Sellers except for the amount paid to them as salary up to the date
hereof and for the salary and/or any other amounts to be paid in
relation to their performance by SLI Group to these two gentlemen in
the future, if applicable. Accordingly, the Sellers shall indemnify and
hold the Purchaser and/or the Company and/or the Subsidiaries harmless
for any amount that any of them have paid in excess of such amount or
are obliged to pay to [...***...] in the future (save for the salary
and/or any other amounts to be paid in relation to their performance by
SLI Group to these two gentlemen in the future, if applicable).
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
50
7.4 THE EXCLUDED BUSINESS.
The Parties hereto agree as follows in respect of the Excluded
Business:
(i) The agreement entered into for the segregation of the Excluded
Business has been attached in Annex (V) hereto.
(ii) The Owner of the Excluded Business shall enter into a
management agreement with the Company, according to which the
Company undertakes to provide the Owner of the Excluded
Business with certain basic general management services and
the Owner of the Excluded Business undertakes to pay SLI Group
a monthly management fee (hereinafter the "MANAGEMENT FEE")
all of the above in the terms and conditions established in
the document attached hereto as ANNEX (7.4.ii).
(iii) Notwithstanding the non-competition obligation as per Clause
6.2 above, the Purchaser expressly authorises the Sellers to
keep the property of the shares of the Owner of the Excluded
Business, except if either of the following circumstances
occurs:
(a) If in the period going from January 1 to June 30,
2002, the earnings after taxes obtained by the
Excluded Business are losses in excess of
[...***...].
(b) If in any corporate year occurring after June 30,
2002, the earnings after taxes obtained by the
Excluded Business are losses in excess of
[...***...].
For the purpose of verifying the occurrence of any of those
circumstances, the Owner of the Excluded Business shall timely
provide the Purchaser with monthly management accounts and its
Annual Accounts shall be audited by a well reputed
international auditing firm previously approved by the
Purchaser. The fees incurred by the auditors for carrying out
said verification will be borne by the Parties on a
[...***...] split.
Should the Purchaser not receive the report of the auditors
pursuant to the preceding paragraph within the four (4) months
following the end of the corresponding period to be verified
by them, the Purchaser may request that said verification be
carried out by the auditing firm chosen by it, at the sole
cost of the Owner of the Excluded Business, which shall in any
event have to be previously approved by the Sellers'
Representative (whose approval shall not be unreasonably
withheld).
In the event any of the circumstances occur for any given
period, according to the auditors' report, the Sellers shall
dispose of the Owner of the Excluded Business within six (6)
months as from the moment in which said auditors' report is
notified to the Purchaser.
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
51
(iv) Should the Excluded Business be transferred to a third party
on or before the date when the last Tranche has been paid to
the Sellers (or should have been paid according to this
Agreement), either by means of the sale of the shares of the
Owner of the Excluded Business or directly by transferring the
Excluded Business, the Sellers undertake to either: (a) make
the acquirer of the Excluded Business assume the obligation to
pay to SLI Group the management fee referred to under
sub-Clause (i) of the present Clause 7.4 or (b) indemnify and
hold SLI Group harmless for any surplus of the administrative
capacity of SLI Group directly or indirectly attributable to
the Excluded Business.
The Purchaser is hereby granted a pre-emption right to acquire
the Excluded Business, with preference to any party. For the
purpose of exercising such a pre-emption right, the Sellers
undertake to notify the transfer of the Excluded Business to
the Purchaser with, at least, two (2) months in advance of
said transfer and its main terms and conditions. The Purchaser
shall exercise its right by means of notifying within thirty
(30) days as from said notification its desire to acquire the
Excluded Business in the same terms and conditions as those
reflected in the aforementioned notification.
Should the Sellers breach any of the obligations established
in sub-Clause (iii) and/or (iv) of the present Clause 7.4, the
Purchaser shall be entitled to offset the amounts with which
it should be indemnified according to the above from the
Amount Payable of any of the Tranches otherwise due hereunder.
(v) Should the Sellers breach any of the obligations established
in sections (iii) or (iv) of the present Clause 7.4, the
Purchaser shall have the right to receive a penalty from the
Sellers in the amount of [...***...] the Management Fee
corresponding to the [...***...] immediately preceding said
breach. The Sellers shall be freed from the obligations
referred to in this section upon payment of said penalty, the
Purchaser having the right to demand compliance with those
obligations together with the payment of the penalty.
(vi) In the event that the Excluded Business is still owned
(directly or indirectly) by the Sellers after December 31,
2003, because of neither of the circumstances referred to in
section (iii) of the present Clause 7.4 having occurred, SLI
Group will have the option to purchase the Excluded Business
(or, as the case may be, the shares of the Owner of the
Excluded Business) at any time as from December 31, 2003 until
the Payment Date of the Fifth Tranche at the lower of:
(a) the market value of the Excluded Business; in the
event that the Parties cannot agree on said market
value during the sixty (60) days following the notice
of SLI Group to the Sellers exercising its option,
such market value shall be determined by a well
reputed international auditing firm appointed by the
Purchaser and previously approved by the Sellers
(which approval shall not be unreasonably withheld);
the fees of said auditing firm shall be borne
[...***...] by the Parties; and
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
52
(b) an amount equivalent to [...***...] the earnings
after taxes obtained by the Excluded Business during
the last fiscal year closed upon exercising the
option by SLI Group, according to the last annual
accounts audited by the auditors appointed in the
manner established under section (a) of the present
paragraph.
The Parties expressly agree that in any event the purchase
price of the Excluded Business in case SLI Group exercises the
aforementioned option shall not be less than the net asset
value of the Excluded Business.
The expenses arising from the option and the subsequent
transfer of the Excluded Business (directly or indirectly) to
SLI Group shall be borne by the Parties on a [...***...]
basis, and the taxes arising from the exercise of the option
shall be borne by the Parties according to Law.
(vii) In case that, according to section (vi) above, the Excluded
Business is acquired by SLI Group for its net asset value, the
Sellers shall be entitled to elect at the time of such
acquisition whether they want the Excluded Business's earnings
to be computed or not for the purpose of calculating the
Earnings After Taxes of SLI Group for the Accounting Year in
which it is acquired and onwards.
8. MISCELLANEOUS.
8.1 AMENDMENTS.
No amendment to the Agreement will be valid unless it is made in
writing and signed by and on behalf of each of the Parties.
8.2 WAIVERS.
The failure to exercise or delay in exercising a right, action or
remedy under the Agreement will not be deemed as a waiver of the right,
action or remedy or a waiver of any other rights, actions or remedies
and no single or partial exercise of any right, action or remedy under
the Agreement will prevent any further exercise of any other right,
action or remedy.
8.3 INVALIDITY.
The invalidity, illegality or unenforceability of any provision of the
Agreement will not affect or impair the enforceability of the other
provisions of the Agreement. Furthermore, it is the Parties' intention
to include, in order to replace any such void, illegal or unenforceable
provision, a provision as similar in terms to such void, illegal or
unenforceable provision as may be possible which at the same time is
valid and enforceable.
8.4 ASSIGNMENT.
The Purchaser may assign its rights and obligations hereunder to any
person or company belonging or that might belong in the future to its
group (as defined in Article 4 of the
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
53
Spanish Securities Market Act). Assignment to any other person or
company will require the Sellers' prior written consent, through the
Sellers' Representative, that will not be unreasonably withheld.
This notwithstanding, in the event that the Purchaser merges into or
becomes absorbed by any other company, the merging or absorbing entity
will automatically become surrogated in the Purchaser's rights and
obligations hereunder, with or without the Sellers' consent.
The Sellers shall not be entitled to assign any right and obligation
hereunder to anyone, except their credit rights under the present
Agreement to the Total Purchase Price or any part thereof and, in
particular, their right to acquire, if applicable, the UTi Worldwide
Shares arising from Clause 2 above, which may be assigned to one or
several entities chosen by them, as long as the assignees (hereinafter
the "ASSIGNEES") comply with the United States Securities regulation
for that purpose, with which the Sellers comply with, as they represent
hereby, and that are the following:
(i) That UTi Worldwide's Shares will be acquired for investment
for each of the Sellers' or each of the Assignees' (as the
case may be) own account, not as a nominee or agent, and not
with a view to the resale or distribution of any part thereof
in violation of applicable U.S. state and federal securities
laws, and each Seller and each of Assignees, has no present
intention of selling, granting any participation in, or
otherwise distributing the same in violation of applicable
U.S. state and federal securities laws. No Seller and no
Assignee has any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with
respect to any of the UTi Worldwide's Shares. No Seller and no
Assignee has been or will be formed for the specific purpose
of acquiring the UTi Worldwide's Shares.
(ii) Each Seller and each Assignee is an "accredited investor" as
defined in Rule 501(a) of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Securities Act").
Thus, each Seller and each Assignee (1) has an individual net
worth, or joint net worth with such Seller's spouse (or such
Assignee's spouses, if an individual), at the time of this
Agreement, in excess of $1,000,000 or (2) had an individual
income in excess of US$200,000 in each of the two most recent
years or joint income with his/her spouse (as the case may be)
in excess of US$300,000 in each of those years and such Seller
or Assignee has a reasonable expectation of reaching the same
income level in the current year. Each Seller and each
Assignee, by reason of such Seller's or Assignee's or their
business and financial experience, has the capacity to protect
such Seller's or such Assignee's interests in connection with
the purchase of the UTi Worldwide's Shares. Each Seller and
each Assignee is capable of bearing the economic risks of such
Seller's or such Assignee's investment in the UTi Worldwide's
Shares. No Seller and no Assignee has received or seen any
advertisement or general solicitation with respect to the sale
of the UTi Worldwide's Shares.
(iii) Each Seller and each Assignees is aware of UTi Worldwide's
business affairs and financial condition and has acquired
sufficient information about UTi Worldwide to reach an
informed and knowledgeable decision to acquire the UTi
Worldwide's Shares. Each Seller and each Assignee has had
access to information about UTi Worldwide and has received
full and adequate information concerning UTi Worldwide.
54
The acquisition by each Seller or by each Assignee of the UTi
Worldwide's Shares shall constitute a reconfirmation of the
representations made by such Seller or such Assignee, as applicable, in
the present Clause 8.4.
8.5 LANGUAGE.
The Agreement is executed in English, thus being the governing language
of the Agreement.
8.6 DAYS.
For the purposes of the Agreement, and unless otherwise agreed herein,
every term established in days in the present Agreement shall be
understood to refer to business days; for the purpose of this
agreement, every day of the year except Saturdays, Sundays, and
holidays in the city of Madrid will be deemed business days.
Should any term be expressly established in calendar days and should
said term end on a non business day, the term shall be automatically
extended to the next business day.
8.7 CONFIDENTIALITY OF THE AGREEMENT.
The Parties agree to keep confidential the terms of the Agreement as
well as all undertakings or obligations assumed hereunder and not to
make any press release or other public disclosures related to the
Agreement or other transactions contemplated hereby unless required by
any applicable law or regulation (whether or not having the force of
law) or by any order issued by an administrative or judicial authority.
If any applicable law or regulation currently in force requires the
issue or disclosure of any information concerning the Agreement, the
Party compelled to make such issue or to disclose such information will
give prior notice to the other Party of the need to do so.
Notwithstanding the confidentiality obligation assumed by the Parties
in the preceding paragraph, the Parties may reveal to their managers
and employees those aspects of the Agreement that they deem necessary
for its performance.
Furthermore, either Party may disclose to third parties or to the
public the mere fact that the Company and, indirectly, the Subsidiaries
have been acquired by the Purchaser.
The Parties agree to negotiate in good faith any press releases to be
made in the context of this transaction, in order to present the
transaction to the market in the most favourable way for SLI Group's
interests.
9. GUARANTEES.
9.1 SETTING-OFF.
Without limitation of the unlimited liability of the Sellers hereunder,
the Parties expressly agree that the Remaining Amount of the Initial
Consideration, as well as the Amount Payable under any of the Tranches
of the Total Purchase Price shall secure any liabilities of any or all
of the Sellers arising hereunder due to Damages and any other amounts
due hereunder, including, without limitation, the payment of the amount
resulting from that
55
provided for under section 2.3.1.(c) above in the terms established
below, as well as the payment of the penalties established under Clause
6.4 and 7.4 above.
For that purpose, if at the time any the Remaining Amount of the
Initial Consideration or any of the Tranches Total Purchase Price
becomes due, liquid and payable ("vencida, liquida y exigible")
hereunder, there shall be due, liquid and payable debts under the
present Agreement owed by the Sellers to the Purchaser (and, in
particular, under Clauses 2.3, 4, 6 and 7.4) the amounts due, liquid
and payable owed by the Sellers shall be automatically offset against
the amounts due, liquid and payable of the corresponding Tranches owed
by the Purchaser to the Sellers by virtue of Articles 1.195 et seq. of
the Spanish Civil Code.
Additionally, if at the time the Fourth and/or the Fifth Tranches
become due hereunder, a Notice (as defined under Clause 5.1 above) has
been delivered to the Sellers' Representative, the Purchaser's
obligation to pay it shall be suspended in an amount equivalent to the
Claimed Amount (as defined under Clause 5.1 above) until final
resolution regarding the Claimed Amount. Notwithstanding the above, the
Purchaser shall pay to the Sellers (by means of payment to the Sellers'
Representative) interests at a nominal annual interest rate of 6 months
EURIBOR plus 1.5% over the amount suspended of payment exceeding the
amount of which the Sellers were declared to be liable by the final
resolution regarding the Claimed Amount or by agreement between the
Parties. Such interests shall accrue from the date on which the payment
of said exceeding amount although being due, was suspended in
accordance to the present Clause and until the date on which the same
is effectively paid to the Sellers' Representative.
The Parties agree that, if the Sellers present a first demand bank
guarantee as the one attached hereto as ANNEX (9.1), for the Claimed
Amount in favour of the Purchaser, the latter shall be obliged to
immediately pay to the Sellers the part of the Remaining Amount of the
Tranche that has been suspended as per the preceding paragraph, if
applicable.
9.2 PURCHASER'S GUARANTEE.
UTi Worldwide hereby guarantees in favour of the Sellers, jointly and
severally ("solidariamente") with the Purchaser, its successors or
assignees of the present Agreement, and expressly waiving any privilege
of order and division ("beneficios de orden o excusion y division")
that could correspond to it, if applicable, the full and punctual
fulfilment of the obligations arising hereunder for the Purchaser,
and/or its successors or assignees of the present Agreement, including,
without limitation, the obligation relating the delivery of the Shares
of UTi Worldwide according to that provided for under Clause 2 of this
Agreement.
10. EXPENSES AND TAXES.
Unless otherwise established herein, each Party, the Sellers on one
side and the Purchaser on the other side, will bear half of the costs
and expenses arising from the formalisation of the present Agreement
into public deed.
Apart from the above and unless otherwise provided for in this
Agreement, each Party will bear its own costs and expenses arising from
the preparation, execution, performance and enforcement of this
Agreement.
56
The Parties will bear the taxes arising from the execution of the
Agreements in accordance to Law.
11. NOTICES.
11.1 NOTICES.
Any notice or other communication required or permitted hereunder shall
be in writing and shall be delivered by hand, telegraph, telex, or
facsimile transmission or sent by certified, registered or express mail
or courier (with acknowledgement of receipt), postage prepaid. Any such
notice shall be deemed given upon delivery if delivered by hand,
courier, telegraph, e-mail, telex or facsimile transmission or, if
mailed by postal service, five (5) days after the date of dispatch to
the addresses referred to in Clause 11.3 or certified mail, on the date
and at the time recorded by the post office.
11.2 SELLERS' REPRESENTATIVES.
For all the purposes of this Agreement, the Sellers appoint the Spanish
company [...***...] (with tax identification code [...***...] and
domicile at c/ General Xxxxxx n degrees 11, 28003 Madrid) as their
representative (the "SELLERS' REPRESENTATIVE") vis-a-vis the Purchaser.
The Sellers' Representative will be the addressee of any notice to be
served upon all or any of the Sellers (or their successors or
assignees) by the Purchaser pursuant to this Agreement; likewise, any
notice to be served by all or any of the Sellers (or their successors
or assignees) upon the Purchaser pursuant to this Agreement will be
made through the Sellers' Representative.
For the purposes of this Agreement, all the actions carried out by the
Sellers' Representative shall be considered to have been jointly
carried out by each and all of the Sellers.
In case [...***...] is extinguished, the Sellers will decide among them
who will act as the Sellers' Representative and will give written prior
notice to the Purchaser of their decision. Up to the moment of said
notification, all notices sent by the Purchaser to [...***...] will be
valid even after the [...***...] is extinguished.
Such representation will also apply with respect to any of the Sellers'
successors or assignees.
11.3. ADDRESSES.
The Parties have designated the following addresses for the purpose of
receiving notices hereunder:
[...***...]
11.4 CHANGE OF ADDRESSES.
Any notice sent to the above addresses will be deemed to be received by
the addressee,
Items indicated with "[...***...]" are subject to a Confidential Treatment
Request
57
except if prior to the sending of such notice the addressee has
notified the sender a change of address or facsimile number.
12. GOVERNING LAW AND ARBITRATION.
12.1. GOVERNING LAW.
This Agreement will be governed by and construed in accordance with the
laws of Spain ("Derecho comun espanol").
12.2. ARBITRATION.
All disputes out of or in connection with the present Agreement shall
be finally settled under the Rules of Arbitration of the International
Chamber of Commerce ("ICC") by one or more arbitrators appointed in
accordance with said Rules. The arbitration shall be administered by
the ICC in accordance with the aforementioned Rules.
The arbitration shall be held in Madrid. The language of the
arbitration shall be Spanish; however, the Parties may submit documents
drafted in English to the arbitration procedure.
The Parties undertake to comply with the arbitration award (including
partial awards) granted by the arbitrators.
13. ENTIRE AGREEMENT.
This Agreement and its Annexes hereto represent all the agreements
between the Parties and supersede all previous agreements and
commitments between the Parties regarding the object of this Agreement
and, in particular, leaves without effect the letter of intent executed
by the Parties on September 24, 2001.
14. FORMALISATION INTO PUBLIC DEED.
The Parties hereto agree to execute this Agreement in one counterpart
to one effect and to formalise the same into public deed immediately
after its execution, before the Public Notary of Madrid, Xx. Xxxxxxx
Xxxx Xxxxxxx.
IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be
executed in one (1) counterpart on its behalf in the place and as of the date
first above written.
UTi Spain, S.L. UTi Worldwide Inc
P.p. P.p.
________________________ ___________________________
Xx. Xxxxx Xxxxx Xxxxxxxx Xx. Xxxxx Xxxxx Xxxxxxxx
Xx. Xxxxxx Xxxx Xxxxxxx Xxxxxxx Xx. Xxxxxxx Xxxxxx Xxxxxxx Xxxxxxx
58
______________________________ _______________________________
Xx. Xxxx Xxxxx Xxxxxxx Xxxxxxx Xx Xxxx Xxxxxxx Xxxxxxx Xxxxxxx
______________________________ _______________________________
Mrs. xxxxxxx de la Xxxx Xxxxxxxxx- Mrs. Xxxxxxx de la Xxxx Xxxxxxxxx-
Lascoiti Lascoiti
______________________________ _______________________________
Note: The Exhibits and Schedules have been omitted and are available upon
request.
59
