Exhibit 4.10
DEFERRED SHARE EXCHANGE AGREEMENT
DEFERRED SHARE EXCHANGE AGREEMENT, dated as of November 14, 2001 by and
among X.X. Xxxxxxx & Co. Ltd., a Bermuda company ("WPS Ltd."), X.X. Xxxxxxx
Asset Management (Europe), Ltd., a Bermuda company ("WPSAM Europe"), and TPR
Holding B.V., a corporation organized under the laws of The Netherlands ("TPR
Holding").
WHEREAS, on the date hereof WPS Ltd. has acquired from TPR Holding 9,000
shares, par value US$1.00 per share, of WPSAM Europe and TPR Holding holds an
additional 3,000 such shares of WPSAM Europe (the "Seller Exchange Shares"); and
WHEREAS, TPR Holding and WPS Ltd. desire to provide for the acquisition of
such 3,000 Seller Exchange Shares by WPS Ltd. upon the terms and subject to the
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and other covenants and
conditions contained herein, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms below shall have
the following meanings:
"Affiliate" as applied to any Person, means any other Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with, such Person. For purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as applied to any Person, shall mean (a) the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise, or (b) ownership, directly or indirectly, of 50% or more
of the Equity Interests of such Person.
"Agreement" shall mean this Deferred Share Exchange Agreement by and among
WPS Ltd., WPSAM Europe and the Sellers, as such agreement may be amended from
time to time.
"Closing Date" shall mean the close of business on August 15, 2006, or such
other date as may be mutually agreed upon in writing by the parties hereto.
"Consenting Party" shall mean any Person whose consent or waiver is or may
be required in connection with the Transaction Documents or the consummation by
either party of any of the transactions contemplated thereby.
"Effective Date" shall mean 12:01 a.m. (Bermuda time) on July 1, 2006.
"Encumbrance" shall mean any claim, mortgage, deed of trust, restrictive
covenant, reservation, lien, pledge, option, charge, easement, security
interest, right-of-way or other encumbrance of any kind or other rights of third
parties (including, without limitation, preemptive rights), whether or not
filed, recorded or otherwise perfected under applicable law, as well as the
interest of any vendor, vendee or lessor or lessee under any conditional sales
agreement, capital lease or other title retention agreement.
"Equity Interests" shall mean the capital stock or other equity interests
or options, warrants, rights to subscribe to, scrip calls, contracts,
undertakings, arrangements, commitments to issue or other rights of any kind to
acquire, capital stock or other equity interests of any Person.
"Legal Requirement" shall mean any action, law, statute, treaty, rule,
regulation, order, ordinance, judgment, injunction, decree, award, determination
or direction of an arbitrator, court or government entity, including without
limitation, any zoning, environmental or safety requirement, motor vehicle
safety requirements or standards or any requirements arising thereunder.
"Permits" shall mean any and all of the licenses, permits and other
regulatory or governmental authorizations, accreditations, approvals, waivers,
consents, declarations or filings necessary or required to enter into the
Transaction Documents and to consummate the transactions contemplated thereby.
"Permitted Seller Assignee" shall mean WPS Ltd., any Affiliate of WPS Ltd.,
Hermanus Theordorus Xxxx, Xxxxx Xxx Xxxxxxx, Fokke Xxx Xxxxxx, Antonius Xxxxxxxx
Xxxxxxx or any full-time employee of either TPR or any Affiliate thereof at the
time of the transfer in question. For purposes of this Agreement, "full-time"
refers to a minimum of 20 hours per week for one's principal employer.
"Permitted WPS Ltd. Assignee" shall mean any Affiliate of WPS Ltd.
"Person" shall mean an individual, partnership, sole proprietorship,
corporation, association, joint stock company, limited liability company, trust,
joint venture, unincorporated organization, governmental or regulatory authority
or any other entity or organization of any kind whatsoever.
"Reports" shall mean those certain reports filed on March 30, 2001 and May
11, 2001 and August 8, 2001 and November 6, 2001 by WPS Ltd. with the U.S.
Securities and Exchange Commission on its Form 20-F and Form 6-K respectively.
"Representative" shall mean, with respect to any Person, any officer,
director, partner, shareholder, principal, attorney, accountant, consultant,
financial advisor, agent, employee or other representative of such Person.
"Securities Act" shall mean the United States Securities Act of 1933, as
amended.
"Sellers" shall mean TPR Holding and each Permitted Seller Assignee that
shall be the registered holder of Seller Exchange Shares from time to time.
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"Tax" shall mean any domestic or foreign income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupational, premium, windfall
profits, environmental, customs duties, capital stock, franchise, profits,
withholding, unemployment, disability, real property, personal property, sales,
use, Transfer Tax, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including without limitation any
interest, penalty or addition thereto, whether disputed or not.
"TPR" shall mean TPR & Partners N.V., a corporation organized under the
laws of The Netherlands.
"Transaction Documents" shall mean this Agreement and all exhibits,
statements, schedules, instruments, certificates and other documents and
agreements to be entered into or delivered by any Person in connection with the
transactions contemplated to be consummated pursuant to any of the foregoing.
"Transfer Taxes" shall mean any and all sales, use, transfer, real property
transfer, recording, gains, stock transfer and other similar Taxes and fees,
including without limitation any interest, penalty or addition thereto, whether
disputed or not.
"U.S. GAAP" shall mean generally accepted accounting principles in the
United States of America.
"WPS Ltd. Common Shares" shall mean the issued and outstanding common
shares of WPS Ltd., par value US$0.001 per share.
"WPS Ltd. Exchange Shares" shall mean the WPS Ltd. Common Shares to be
issued by WPS Ltd. to the Sellers in accordance with Section 2. 2 hereof.
"WPS Ltd. Expenses" shall mean all costs and expenses incurred by WPS Ltd.
or any of its Representatives and Affiliates in connection with the negotiation,
preparation, execution and delivery of the Transaction Documents and the
consummation of the transactions contemplated hereby and thereby.
"WPS Share Price" shall mean the average closing price per share for WPS
Ltd. Common Shares on the principal national securities exchange on which the
WPS Ltd. Common Shares are admitted to trading or listed if the WPS Ltd. Common
Shares are admitted to trading or listed on the New York Stock Exchange or
American Stock Exchange, on The Nasdaq Stock Market if included in such system,
or if not admitted to trading or listed on such exchange or system, the average
of the highest bid and lowest asked prices as reported by Nasdaq or the National
Quotation Bureau, Inc. or another similar organization if Nasdaq is no longer
reporting such information, for the last 20 trading days prior to July 1, 2006,
or, if not so available, the fair market price as determined by the Board of
Directors of WPS Ltd.
"WPSAM Europe Operating Statements" shall mean, collectively, the
consolidated statements of operations of WPSAM Europe and the WPSAM Europe
Subsidiaries for the four (4) fiscal quarters next ended before July 1, 2006,
reviewed or audited by the independent auditors for WPS Ltd.
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"WPSAM Europe Subsidiary" shall mean any entity more than 50% of the Equity
Interests in which is owned directly or indirectly by WPSAM Europe.
1.2 Other Defined Terms. The following terms shall have the meanings
assigned to such terms in the corresponding Sections of this Agreement set forth
below:
Term Section
---- -------
Closing 3.1
Damages 8.2
Indemnification Claim Notice 8.3
Indemnified Party 8.3
Indemnifying Party 8.3
Proceeding 8.3
Seller Exchange Shares Preamble
Seller Indemnitees 8.2
TPR Exchange Agreement 7.4
TPR Holding Preamble
WPS Ltd. Preamble
WPS Ltd. Indemnitees 8.2
WPSAM Europe Preamble
ARTICLE 2
EXCHANGE OF SHARES
2.1 Sellers Exchange of Shares. Upon the terms and subject to the
conditions contained herein, in consideration for the WPS Ltd. Exchange Shares,
and in reliance upon the representations, warranties, covenants and
indemnifications contained herein, each Seller hereby agrees to convey,
transfer, assign and deliver to WPS Ltd., or, as the case may be, a Permitted
WPS Ltd. Assignee, as provided for in Section 11.1 of this Agreement, and WPS
Ltd. hereby agrees or, as the case may be, WPS Ltd. hereby agrees on behalf of a
Permitted WPS Ltd. Assignee, to acquire from such Seller, on the Closing Date,
and as of the Effective Date, all of the rights, title and interest of such
Seller, in and to the Seller Exchange Shares.
2.2 WPS Ltd. Exchange of Shares. Upon the terms and subject to the
conditions contained herein, in consideration for the Seller Exchange Shares,
and in reliance upon the representations, warranties, covenants and
indemnifications contained herein, WPS Ltd. hereby agrees to issue to each
Seller on the Closing Date, and each Seller hereby agrees to acquire from WPS
Ltd., fully vested WPS Ltd. Exchange Shares in such respective numbers as shall
be determined pursuant to Section 2.3
2.3 Exchange Ratio. The number of WPS Ltd. Exchange Shares to be exchanged
for each Seller's Seller Exchange Shares shall be based upon the fair value of
the Seller Exchange Shares and determined as follows:
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(a) The fair value of 100% of the shares of WPSAM Europe as of June
30, 2006 shall be determined according to the same formula that was
utilized by the parties to the TPR Exchange Agreement in determining the
price of the TPR Exchange Shares (as defined in the TPR Exchange Agreement)
for purposes of the TPR Exchange Agreement or such other formula, if any,
as may be necessary so that the value so determined can be independently
confirmed as representing fair value;
(b) The result obtained in (a) above shall be divided by the WPS Share
Price;
(c) The result obtained in (b) above shall be divided by the total
number of WPSAM Europe shares outstanding on June 30, 2006; and
(d) The result obtained in (c) above shall be multiplied by the number
of Seller Exchange Shares registered in the name of such Seller on the
Closing Date.
2.4 WPSAM Europe Consideration. WPSAM Europe agrees to enter into this
Agreement in consideration of the payment to it by TPR Holding of US$1.00
(receipt of which is acknowledged).
ARTICLE 3
CLOSING
3.1 Closing. The closing of the transaction contemplated by Article 2 (the
"Closing") shall be held at such time on the Closing Date and at such offices as
the parties agree.
3.2 Deliveries. To effect the transfers referred to in Sections 2.1 and 2.2
hereof, the following deliveries shall be made on the Closing Date:
(a) The Sellers shall deliver to WPS Ltd. (or a Permitted WPS Ltd.
Assignee) such documents as shall be acceptable to WPS Ltd. and its counsel
evidencing the transfer of the Seller Exchange Shares, free and clear of
any and all Encumbrances, and the registration of such transfer in the
shareholder register of WPSAM Europe.
(b) Subject to Section 7.4, as soon as practicable after the Closing,
WPS Ltd. shall issue to the Sellers the WPS Ltd. Exchange Shares and
certificates evidencing the WPS Ltd. Exchange Shares to be issued by WPS
Ltd., evidencing the registered ownership of such shares by the respective
Sellers.
All instruments and documents to be executed by or on behalf of the Sellers
and delivered to WPS Ltd. pursuant hereto shall be in form and substance, and
shall be executed in a manner, reasonably satisfactory to WPS Ltd. All
instruments and documents to be executed by or on behalf of WPS Ltd. and
delivered to the Sellers pursuant hereto shall be in form and substance, and
shall be executed in a manner, reasonably satisfactory to the Sellers.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of the Sellers hereby represents and warrants to WPS Ltd. as follows:
4.1 Ownership of Shares; No Conflict or Violation. Such Seller has all
necessary power and authority to hold the Seller Exchange Shares and to enter
into, deliver and carry out its obligations under the Transaction Documents.
Such Seller has taken all action necessary to enter into the Transaction
Documents and consummate the transactions contemplated hereby and to perform its
obligations hereunder. Each of the Transaction Documents to which such Seller is
a party has been duly executed and delivered by such Seller. Each Transaction
Document to which such Seller is a party is the legal, valid and binding
obligation of such Seller enforceable against such Seller in accordance with its
terms except as such enforcement may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting the
enforceability of contractual obligations and creditor's rights generally and by
the application of equitable principles by courts of competent jurisdiction
sitting at law or in equity. Such Seller owns as the registered holder and
beneficially all of such Seller's Seller Exchange Shares, free and clear of all
Encumbrances. Such Seller owns, of record or beneficially, no Equity Interests
of WPSAM Europe other than such Seller's Seller Exchange Shares. Upon the
transfer on the Closing Date by such Seller to WPS Ltd. or a Permitted WPS Ltd.
Assignee of such Seller's Seller Exchange Shares in accordance with Section 2.1
of this Agreement, WPS Ltd. or such Permitted WPS Ltd. Assignee, as the case may
be, will receive good title to such shares, free and clear of all Encumbrances.
Neither the execution and delivery of the Transaction Documents nor the
consummation of the transactions contemplated thereby will result in the
violation by such Seller of any Legal Requirement.
4.2 No Brokers; No Agreements to Sell. Neither such Seller nor any
Representative or Affiliate thereof, has any written or oral agreement,
arrangement or understanding with any Person which could result in the
obligation of WPS Ltd. or any Affiliate thereof to pay any finder's fee,
brokerage commission or similar payment in connection with any of the
transactions contemplated by the Transaction Documents. Except in connection
with this Agreement and the other Transaction Documents, such Seller has no
obligation, absolute or contingent, to any other Person to sell any shares or
other Equity Interest in WPSAM Europe or to enter into any agreement with
respect thereto.
4.3 Organization; No Conflict or Violation. Each Seller that is a
corporation or a company with limited liability is duly formed and validly
existing under the laws of the jurisdiction of its organization. Neither the
execution and delivery of the Transaction Documents nor the consummation of the
transactions contemplated thereby will result in a violation of or a conflict
with any Legal Requirement or the articles of association, by-laws or other
organizational documents of such Seller.
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4.4 Reports. Such Seller has received and reviewed the Reports.
4.5 Investment. Such Seller will be acquiring the WPS Ltd. Exchange Shares
for such Seller's own account, for investment, and without a view toward the
public distribution thereof in violation of the Securities Act.
4.6 Securities Not Registered. Such Seller hereby acknowledges that (i) the
WPS Ltd. Exchange Shares will not be registered under the Securities Act, (ii)
the WPS Ltd. Exchange Shares will therefore be subject to restrictions on
transfer and resale as prescribed therein, and (iii) the certificates
representing the WPS Ltd. Exchange Shares will contain appropriate restrictive
legends.
4.7 Sophisticated Investor. Such Seller hereby acknowledges that such
Seller is a sophisticated investor who is capable of evaluating such Seller's
investment in the WPS Ltd. Exchange Shares and the risks involved in such
investment and has been provided the opportunity to make appropriate inquiries
of members of WPS Ltd. management with respect to the business of WPS Ltd.
ARTICLE 5
REPRESENTATIONS AND
WARRANTIES OF WPS LTD. AND WPSAM EUROPE
WPS Ltd. and WPSAM Europe hereby represent and warrant to the Sellers as
follows:
5.1 Organization; Capitalization. Each of WPS Ltd. and WPSAM Europe is an
exempted company limited by shares, duly organized and validly existing under
the laws of Bermuda and has full corporate power and authority to conduct its
business as is presently being conducted and to own and lease its properties and
assets and to enter into, deliver and carry out its obligations under the
Transaction Documents. The authorized capital of WPS Ltd. consists of
125,000,000 WPS Ltd. Common Shares approximately 47,069,073 of which, as of the
date of this Agreement, are issued and outstanding. The authorized capital of
WPSAM Europe consists of 12,000 common shares, par value US$1.00 per share and
of which, as of the date of this Agreement, 12,000 are issued and outstanding.
5.2 Authorization. WPS Ltd. had taken all necessary corporate action to
consummate the transactions contemplated by the Transaction Documents and to
perform its obligations thereunder. Each of the Transaction Documents to which
WPS Ltd. is a party has been duly executed and delivered by WPS Ltd. and is a
valid and binding obligation of WPS Ltd. enforceable against WPS Ltd. in
accordance with its terms except as enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting the enforceability of contractual obligations and creditor's rights
generally and by the application of equitable principles by courts of competent
jurisdiction sitting at law or in equity.
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5.3 Issuance and Ownership of WPS Ltd. Exchange Shares. Upon the issuance
to the Sellers of the WPS Ltd. Exchange Shares in accordance with Section 2.2 of
this Agreement and entry of their respective names in the register of members of
WPS Ltd., the Sellers will receive good title to such WPS Ltd. Exchange Shares
free and clear of all Encumbrances. Such WPS Ltd. Exchange Shares have been duly
authorized and will be validly issued, fully paid and non-assessable.
5.4 No Brokers. Neither WPS Ltd. nor any of its Representatives or
Affiliates has any written or oral agreement, arrangement or understanding with
any Person which will result in the obligation of the Sellers to pay any
finder's fee, brokerage commission or similar payment in connection with the
transactions contemplated by the Transaction Documents.
5.5 No Conflict or Violation. Neither the execution and delivery of the
Transaction Documents nor the consummation of the transactions contemplated
thereby will result in (a) a violation of or a conflict with any provision of
the memorandum of association or bye-laws of WPS Ltd. or WPSAM Europe, (b) a
breach of, or a default under, any term or provision of any contract, agreement,
Indebtedness, lease, commitment, franchise, Permit, authorization or concession
to which WPS Ltd. or WPSAM Europe is a party, (c) a violation by WPS Ltd. or
WPSAM Europe of any applicable Legal Requirement, or (d) an imposition of any
Encumbrance on any of the WPS Ltd. Exchange Shares.
ARTICLE 6
CONDITIONS TO THE OBLIGATIONS OF WPS LTD.
The obligation of WPS Ltd. to issue the WPS Ltd. Exchange Shares to each
Seller on the Closing Date is subject, in the sole and absolute discretion of
WPS Ltd., to the satisfaction or waiver, on or prior to the Closing Date, of
each of the following conditions:
6.1 Representations, Warranties and Covenants. All representations and
warranties of such Seller contained in this Agreement shall be true and correct
in all material respects at and as of the Closing Date, and such Seller shall
have performed in all material respects all agreements and covenants required
hereby to be performed by him prior to or at the Closing Date.
6.2 Permits and Consents. All Permits, consents of Consenting Parties and
notices or filings necessary or required to permit the transactions contemplated
by the Transaction Documents shall have been made or obtained.
6.3 No Governmental Proceeding or Litigation. No action shall have been
instituted or threatened by any governmental or regulatory authority or other
Person which questions the validity or legality of the transactions contemplated
by the Transaction Documents.
6.4 Compliance with Legal Requirements. The consummation of the
transactions contemplated by the Transaction Documents will not be prohibited by
any applicable Legal Requirement or subject WPS Ltd. or WPSAM Europe to any
penalty, liability or other onerous condition arising out of any such Legal
Requirement.
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6.5 Certificates and Corporate Documents. Such Seller shall have delivered
to WPS Ltd. such documents and certificates to evidence compliance with the
conditions set forth in this Article 7 as may be reasonably requested by WPS
Ltd., including without limitation:
(a) such instruments of conveyance of the Seller Exchange Shares
reasonably requested by WPS Ltd. in order to effect the transfer to WPS
Ltd. or a Permitted WPS Ltd. Assignee of the Seller Exchange Shares; and
(b) such other documents relating to the transactions contemplated by
the Transaction Documents as WPS Ltd. reasonably requests.
ARTICLE 7
INDEMNIFICATION
7.1 Survival of Representations, etc. All statements contained in any
schedule or in any certificate or instrument of conveyance delivered by or on
behalf of the respective parties pursuant to this Agreement or in connection
with the transactions contemplated hereby shall be deemed to be representations
and warranties by the applicable parties hereunder. The representations and
warranties of WPS Ltd. and the Sellers contained herein or in any instrument
delivered pursuant to this Agreement shall, without regard to any investigation
made by any of the parties hereto, survive the Closing Date for a period of 18
months, other than those representations and warranties set forth in Sections
4.1, 4.3, 5.1, 5.2 and 5.3 which shall survive the Closing Date for the period
of any applicable statute of limitations (after giving effect to any extensions
or waivers thereof). Anything to the contrary contained in this Agreement
notwithstanding, the termination or expiration of any representation or warranty
or indemnification obligation under this Article 7 shall not affect any claims
made in writing by any Indemnified Party hereunder prior to such expiration or
termination. All covenants and agreements of the parties contained in this
Agreement shall survive the Closing Date.
7.2 Indemnification.
(a) In addition to any other right or remedy available to WPS Ltd. at
law or in equity and subject to Section 7.2(c), each Seller shall indemnify
WPS Ltd. and its Affiliates, Representatives and successors and permitted
assigns (collectively, the "WPS Ltd. Indemnitees") against, and hold each
WPS Ltd. Indemnitee harmless from, any diminution in value, demand, damage,
claim, action, cause of action, deficiency, fine, liability, Tax or other
loss or expense including, without limitation, interest, penalties and
attorneys' fees and expenses (collectively, "Damages") arising out of or
resulting from (i) any inaccuracy, misrepresentation or breach of any
representations or warranties made by such Seller contained in any of the
Transaction Documents, or (ii) the nonfulfillment of any covenant or
agreement of such Seller contained in any of the Transaction Documents,
including any Damages arising out of transactions entered into or events
occurring prior to the Closing.
(b) In addition to any other right or remedy available to the Sellers
at law or in equity and subject to Section 7.2(c), WPS Ltd. shall indemnify
the Sellers and their Affiliates, Representatives and successors and
permitted assigns (collectively, the "Seller Indemnitees")
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against, and hold each Seller Indemnitee harmless from any Damages arising
out of or resulting from (i) any inaccuracy, misrepresentation or breach of
any representations or warranties of WPS Ltd. contained in any of the
Transaction Documents or (ii) the nonfulfillment of any covenant or
agreement of WPS Ltd. contained in any of the Transaction Documents,
including any Damages arising out of transactions entered into or events
occurring prior to the Closing.
(c) None of the WPS Ltd. Indemnitees or Seller Indemnitees shall be
entitled to indemnification for Damages incurred unless the cumulative
aggregate amount of Damages incurred by the WPS Ltd. Indemnitees or the
Seller Indemnitees, respectively, under this Agreement exceeds $10,000 (the
"Basket Amount"); provided, however, that in the event that the cumulative
aggregate amount of all Damages incurred by the WPS Ltd. Indemnitees or the
Seller Indemnitees, respectively, exceeds the Basket Amount, the applicable
Seller or WPS Ltd. shall be required to indemnify the WPS Ltd. Indemnitees
or the Seller Indemnitees, respectively, for all Damages for which the
applicable Seller or WPS Ltd. have an indemnity obligation as provided in
Section 7.2(a) or (b) hereof, including all amounts up to the Basket Amount
(without giving effect for purposes of measuring the amount of any Damage
to any materiality limitations included in any representation, warranty or
covenant).
The term "Damages" as used in this Section 7.2 is not limited to matters
asserted by any Persons against the WPS Ltd. Indemnitees or Seller Indemnitees,
but includes Damages incurred or sustained thereby in the absence of claims by
other Persons.
7.3 Indemnification Procedures.
(a) Notice of Claim. Any Person making a claim for indemnification
pursuant to Section 7.2 (an "Indemnified Party") must give any party hereto
from whom indemnification is sought (an "Indemnifying Party") written
notice of such claim (an "Indemnification Claim Notice") promptly after the
Indemnified Party receives any written notice of any action, lawsuit,
proceeding, investigation or other claim or potential claim (a
"Proceeding") against or involving the Indemnified Party by any government
entity or other Person or otherwise discovers or becomes aware of the
liability, obligation or facts giving rise to such claim for
indemnification; provided that the failure to notify or delay in notifying
an Indemnifying Party will not relieve any Indemnifying Party of its
obligations pursuant to Section 7.2.
(b) Control of Defense. With respect to the defense of any Proceeding
against or involving an Indemnified Party in which a governmental entity or
other Person in question seeks only the recovery of a sum of money for
which indemnification is provided, at its option an Indemnifying Party may
appoint as lead counsel of such defense any legal counsel selected by the
Indemnifying Party; provided that before the Indemnifying Party assumes
control of such defense it must first:
(i) enter into an agreement with the Indemnified Party (in form
and substance satisfactory to the Indemnified Party) pursuant to which
the Indemnifying Party agrees to be fully responsible (with no
reservation of any rights other than the right to be subrogated to the
rights of the Indemnified Party) for all Damages relating to such
Proceeding and unconditionally guarantees the payment and performance
of any liability or obligation which may arise with
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respect to such Proceeding or the facts giving rise to such claim for
indemnification; and
(ii) furnish the Indemnified Party with reasonable assurance that
the Indemnifying Party has the financial capacity to defend such
Proceeding and to satisfy any such liability.
(c) Control of Defense: Exceptions, etc. The Indemnified Party will be
entitled to participate in the defense of such claim and to employ counsel
of its choice for such purpose at its own expense (provided that the
Indemnifying Party will bear the reasonable fees and expenses of such
separate counsel incurred prior to the date upon which the Indemnifying
Party effectively assumes control of such defense pursuant to Section
7.3(b)). The Indemnifying Party will not be entitled to assume control of
the defense of such claim, and will pay the fees and expenses of legal
counsel retained by the Indemnified Party, if:
(i) the Indemnified Party reasonably believes that an adverse
determination of such Proceeding could be detrimental to or injure the
Indemnified Party's reputation or future business prospects,
(ii) the Indemnified Party reasonably believes that there exists
or could arise a conflict of interest which, under applicable
principles of legal ethics, could prohibit a single legal counsel from
representing both the Indemnified Party and the Indemnifying Party in
such Proceeding, or
(iii) the Indemnifying Party has failed or is failing to
prosecute or defend vigorously such claim.
The Indemnifying Party must obtain the prior written consent of the
Indemnified Party (which the Indemnified Party will not unreasonably withhold)
prior to entering into any settlement of such Proceeding or ceasing to defend
such Proceeding.
7.4 Security. Notwithstanding anything herein to the contrary, in the event
that on the Closing Date there shall be pending against any Seller a claim for
indemnification under Article 8 of that certain Share Exchange Agreement, of
even date herewith, by and among WPS Ltd., TPR Holding B.V., Hermanus Theodorus
Xxxx, Xxxxx Xxx Xxxxxxx, Fokke Xxx Xxxxxx and Antonius Xxxxxxxx Xxxxxxx (the
"TPR Exchange Agreement"), any or all of the WPS Ltd. Exchange Shares otherwise
issuable to such Seller or his Permitted Seller Assignees pursuant to Section
2.2 may, at the option of WPS Ltd., be retained thereby until the final
resolution of such claim and offset against any amount due from such Seller to
WPS Ltd. upon such resolution. For this purpose, the WPS Ltd. Exchange Shares
shall be valued at the WPS Share Price.
ARTICLE 8
RESTRICTIVE COVENANTS
8.1 Covenants Against Competition. The Sellers acknowledge that (i) WPSAM
Europe and the WPSAM Europe Subsidiaries are involved in the business of (A)
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soliciting assets for management by professional investment managers and (B)
providing client liaison services in respect of asset management accounts (such
businesses collectively referred to herein as the "Business"); (ii) the Business
is international in scope; and (iii) WPS Ltd. would not purchase the Seller
Exchange Shares but for the agreements and covenants of the Sellers contained in
this Article 8. Accordingly, the Sellers severally covenant and agree that:
(a) they shall not, directly or indirectly, as principals, employees
or otherwise, within any country within the scope of their respective
duties as employees of WPSAM Europe and its Affiliates, for a period
commencing on November 14, 2001 and terminating two years following the
Closing Date (the "Restricted Period"), (1) engage in the Business (other
than on behalf of WPS Ltd. or any Affiliate thereof) or (2) solicit,
knowingly accept or divert from WPSAM Europe and its Affiliates any orders,
enquiries or business related to the Business from any person or entity
that shall have done business related to the Business with WPSAM Europe or
any Affiliate thereof during the Restricted Period;
(b) during and after the Restricted Period, they shall (i) keep secret
and retain in strictest confidence, and (ii) shall not use for the benefit
of themselves or others, except in connection with the business affairs of
WPS Ltd. and its Affiliates, all or any confidential matters relating to
WPS Ltd. and its Affiliates learned heretofore or hereafter directly or
indirectly from WPS Ltd. or TPR (the "Confidential Information"), and shall
not disclose such Confidential Information to anyone outside of WPS Ltd.
and its Affiliates except with the express prior written consent of WPS
Ltd. and except for Confidential Information which (i) is at the time of
receipt or thereafter becomes publicly known through no wrongful act of the
Sellers or (ii) is received from a third party not under an obligation to
keep such information confidential and without breach of this Agreement;
(c) during the Restricted Period, they shall not, directly or
indirectly, knowingly solicit or encourage any senior, managerial,
professional or other non-clerical employee of WPS Ltd. or any Affiliate
thereof to leave the employment of WPS Ltd. or any Affiliate thereof, or
hire any such employee, who has left the employment of WPS Ltd. or any
Affiliate thereof after the date of this Agreement, within one year of the
termination of such employee's employment with WPS Ltd. or any Affiliate
thereof; and
(d) all memoranda, notes, lists, records and other documents (and all
copies thereof) made or compiled by or made available to the Sellers
concerning WPS Ltd. or any of its Affiliates shall be WPS Ltd.'s property
and shall be delivered to WPS Ltd. at any time on request.
8.2 Rights and Remedies Upon Breach. If any Seller commits a breach of any
of the provisions of Section 8.1 hereof (the "Restrictive Covenants"), WPS Ltd.
shall have the following rights and remedies (upon compliance with any necessary
prerequisites imposed by law upon the availability of such remedies), each of
which rights and remedies shall be independent of the other and severally
enforceable and shall not be affected by the provisions of Article 7 hereof and
all of which rights and remedies shall be in addition to, and not in lieu of,
any other rights and remedies available to WPS Ltd. at law or in equity:
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(a) The right and remedy to have the Restrictive Covenants
specifically enforced by any court having equity jurisdiction, including,
without limitation, the right to an entry against such Seller of
restraining orders and injunctions (preliminary, mandatory, temporary and
permanent) against violations, threatened or actual, and whether or not
then continuing, of such covenants, it being acknowledged and agreed that
the Restrictive Covenants are of a special and unique character which gives
them peculiar value and that any such breach or threatened breach will
cause irreparable injury to WPS Ltd. and that money damages will not
provide adequate remedy to WPS Ltd.
(b) The right and remedy to require such Seller to account for and pay
over to WPS Ltd. all compensation, profits, monies, accruals, increments or
other benefits (collectively, "Benefits") derived or received by such
Seller as the result of any transactions constituting a breach of any of
the Restrictive Covenants, and such Seller shall account for and pay over
such Benefits to WPS Ltd.
8.3 Severability of Covenants. Each of the Restrictive Covenants gives rise
to a separate obligation independent of the others. If any court determines that
any of the Restrictive Covenants, or any part thereof, is invalid or
unenforceable, the remainder of the Restrictive Covenants shall not be affected
and shall be given full force, without regard to the invalid portions.
8.4 Blue Pencilling. If any court determines that any of the Restrictive
Covenants, or any part thereof, is unenforceable because of the duration of such
provision or the area covered thereby, such court shall have the power to reduce
the duration or area of such provision and, in its reduced form, such provision
shall then be enforceable and shall be enforced. By written notice to the
Sellers, WPS Ltd. may at any time and from time to time reduce the scope,
duration or geographical application of one or more of the Restrictive
Covenants.
8.5 Enforceability in Jurisdictions. The parties intend to and hereby
confer jurisdiction to enforce the Restrictive Covenants upon the courts of any
jurisdiction within the geographical scope of such Restrictive Covenants. If the
courts of any one or more of such jurisdictions hold the Restrictive Covenants
wholly unenforceable by reason of the breach of such scope or otherwise, it is
the intention of the parties that such determination not bar or in any way
affect WPS Ltd.'s right to the relief provided above in the courts of any other
jurisdiction within the geographical scope of such covenants as to breaches of
such covenants in such other respective jurisdictions, such covenants as they
relate to each jurisdiction being, for this purpose, severable into diverse and
independent covenants subject, where appropriate, to the doctrine of res
judicata.
8.6 Consideration. The Sellers severally acknowledge and agree that they
will receive a direct, material and substantial benefit from the consummation of
the transactions contemplated by this Agreement and that such direct, material
and substantial benefit is good and sufficient consideration to them for the
performance of their respective obligations under this Article 8.
8.7 Reasonableness of Covenant. The Sellers severally recognize and
acknowledge that the Restrictive Covenants, together with their performance
thereunder, is
13
necessary in order to protect and maintain the proprietary interests and other
legitimate business interests of WPS Ltd. and to afford WPS Ltd. the benefit of
its bargain under this Agreement and that the Restrictive Covenants are
reasonable in all respects.
ARTICLE 9
TRANSFER RESTRICTIONS; ADDITIONAL CLASS B SHARES
9.1 Transfer Restrictions. Except as permitted by Section 2.1 or 9.2, no
Seller Exchange Share may be sold, transferred or made subject to any
Encumbrance by any Seller. The Sellers acknowledge that the Seller Exchange
Shares are, and shall remain, uncertificated and that the ownership of WPSAM
Europe common shares is, and shall be, evidenced solely by the register of
members maintained by WPSAM Europe. WPSAM Europe shall not register any transfer
of Seller Exchange Shares that is not in accordance with Section 2.1 or 9.2;
provided, however, that WPS Ltd. may waive this covenant in its sole discretion.
9.2 Permitted Transfers. Notwithstanding any provision to the contrary
herein, each Seller shall be permitted to transfer Seller Exchange Shares to any
Permitted Seller Assignee, and any Permitted Seller Assignee may in turn
transfer Seller Exchange Shares owned by it to another Permitted Seller
Assignee, if, but only if, the transferee in the proposed transfer shall have
executed a written undertaking, in form and substance satisfactory to WPS Ltd.,
acknowledging notice of, and agreeing to be bound by, the terms of this
Agreement as a Seller.
ARTICLE 10
CORPORATE GOVERNANCE
10.1 Officers and Directors. As of the date of this Agreement or as soon
thereafter as practicable, the officers and directors of WPSAM Europe and the
WPSAM Europe Subsidiaries shall be as set forth on Schedule 10.1. Such officers
and directors shall be subject to change in accordance with applicable law and
the organizational documents of the respective companies; provided, however,
that without the written consent of WPS Ltd. and the registered holders of a
majority of the Seller Exchange Shares, prior to July 1, 2006, (a) so long as
Xxxxx X. Xxxxxxx shall be employed by WPS Ltd. and its Affiliates, he shall not
be involuntarily removed from any of his positions set forth on Schedule 10.1
and (b) the number of directors of WPSAM Europe or the number of managing
directors of any WPSAM Europe Subsidiary shall not be increased or decreased.
Prior to July 1, 2006, in the event of the resignation or removal of Xxxxx X.
Xxxxxxx, Xxxxx X. Xxxxxxxxxx, Xxxxxx X. Vis or the respective successor of any
of them as a director of WPSAM Europe or a managing director of any other
company shown on Schedule 10.1, such individual shall be replaced by a candidate
of the registered owners of a majority of the Seller Exchange Shares, provided
that such candidate shall be an employee of WPSAM Europe or a WPSAM Europe
Subsidiary .
10.2 Dividends. As soon as practicable following the end of each fiscal
quarter and the review of WPSAM Europe's accounts by the independent auditors of
WPS Ltd., the parties shall cause the board of directors of WPSAM Europe to
declare a dividend payable on its
14
shares equal in the aggregate to the lesser of the consolidated net income of
WPSAM Europe and the WPSAM Europe Subsidiaries for such fiscal quarter or the
maximum dividend allowable under applicable law, in either case less any
required repayment of the principal of any indebtedness of WPSAM Europe;
provided, however, that a lesser or no dividend may be declared by affirmative
vote of no fewer than 75% of the directors of WPSAM Europe.
10.3 Certain Actions. Without the affirmative vote of at least 75% of the
directors of WPSAM Europe, (a) WPSAM Europe shall issue no additional shares,
(b) WPSAM Europe shall ensure that no WPSAM Europe Subsidiary shall issue
additional shares, except to WPSAM Europe or another WPSAM Europe Subsidiary;
and (c) neither the articles of association of WPSAM Europe or any WPSAM Europe
Subsidiary nor any agreement between WPSAM Europe and either WPS Ltd. or X.X.
Xxxxxxx Asset Management Ltd., a Bermuda company, shall be modified in any way
that is materially adverse to WPSAM Europe. Each of the Sellers undertakes, for
so long as such Seller remains the registered holder of shares of WPSAM Europe,
not in any way to exercise any rights under Section 74 of the Companies Act 1981
of Bermuda to requisition any special general meeting of WPSAM Europe for any
purpose.
10.4 WPSAM Europe Income. The charge to WPSAM Europe for the compensation
of certain employees located in London shall be consistent with Schedule 10.4.
ARTICLE 11
MISCELLANEOUS
11.1 Assignment. Except pursuant to Section 9.2, neither this Agreement nor
any of the rights or obligations hereunder may be assigned by either party
without the prior written consent of the other party; provided, however, that
WPS Ltd. may assign its right to receive Seller Exchange Shares hereunder to any
Permitted WPS Ltd. Assignee. Subject to the foregoing, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, and no other Person shall have any right,
benefit or obligation hereunder.
11.2 Notices. Unless otherwise provided herein, any notice, request,
instruction or other document to be given hereunder by any party to the others
shall be in writing and delivered in person or by courier or by facsimile
transmission or mailed by certified mail, postage prepaid, return receipt
requested, as follows:
If to the Sellers:
c/o X.X. Xxxxxxx Asset Management (Europe) N.V.
"Duinzigt"
Xxxxxxxxxxxxxxxxxxxxx 00-X
0000 X.X. Xxxxxxxxxx
[Mail: Xxxxxxx 0000
0000 XX Xxxxxxxxxx]
Xxx Xxxxxxxxxxx
Telephone: 00-00-000-0000
Facsimile: 00-00-000-0000
15
With a copy to: Houthoff Buruma
Xxxxx 000
X.X. Xxx 0000
0000 XX Xxxxxxxxx
Attention: Xxxxxxx X.X. Xxxxxxxx
Telephone: 00-00-000-0000
Facsimile: 00-00-000-0000
If to WPS Ltd. X.X. Xxxxxxx & Co., Ltd.
or WPSAM Europe: Xxxxxxx Xxxx, 00 Xxxxx Xxxxxx
P.O. Box HM 2905
Xxxxxxxx XX LX
Bermuda
Attention: Managing Director
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxxx & Whitney LLP
000 Xxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Attention: Xxxx X. Xxxx, III, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other place and with such other copies as either party may designate
as to itself by written notice to the others.
All such notices, requests, instructions, documents and other
communications will (i) if delivered personally to the address as provided in
this Section 11.2, be deemed given upon delivery, (ii) if delivered by facsimile
transmission to the facsimile number as provided in this Section 11.2, be deemed
given upon receipt, and (iii) if delivered by mail in the manner described above
to the address as provided in this Section 11.2, be deemed given upon receipt
(in each case regardless of whether such notice is received by any other Person
to whom a copy of such communication is to be delivered pursuant to this Section
11.2).
11.3 Choice of Law; Choice of Forum. This Agreement shall be construed and
interpreted and the rights of the parties hereto shall be determined in
accordance with the laws of Bermuda, without giving effect to any choice of law
or conflict provision or rule (whether of Bermuda or any other jurisdiction)
that would cause the laws of any jurisdiction other than Bermuda to be applied.
In furtherance of the foregoing, the internal law of Bermuda will control the
interpretation and construction of this Agreement, even if under such
jurisdiction's choice of law or conflict of law analysis, the substantive law of
some other jurisdiction would ordinarily apply. Each of the parties hereto
consents that any legal action or proceeding related to this Agreement may be
brought in any appropriate court in Bermuda and waives any objection that it may
now or hereafter have to the venue of any such action.
11.4 Entire Agreement, Amendments and Waivers. This Agreement, together
with all exhibits and schedules hereto (which form a part of this Agreement and
are incorporated
16
into this Agreement for all purposes) and the TPR Exchange Agreement,
constitutes the entire agreement among the parties hereto pertaining to the
subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties. No
supplement, modification or waiver of this Agreement shall be binding unless
executed in writing by the party to be bound thereby. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
11.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.6 Invalidity. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein shall,
for any reason, be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement or any other such instrument.
11.7 Headings. The headings of the Articles and Sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
11.8 Singulars and Plurals. All references to the plural herein shall also
mean the singular and to the singular shall also mean the plural, in each case,
as applicable.
11.9 Expenses. Except as otherwise provided herein, the Sellers shall be
responsible for the Seller Expenses, and WPS Ltd. shall be responsible for the
WPS Ltd. Expenses.
11.10 Publicity. Unless required to do so by applicable law or legal
process, prior to the Closing Date no party hereto shall issue any press release
or make any public statement regarding the Transaction Documents or the
transactions contemplated thereby without the prior written approval of the
other party (which approval may not be unreasonably withheld or delayed). If
prior to the Closing Date any party hereto is required by law or legal process
to make any public statement regarding the Transaction Documents or the
transactions contemplated thereby, such party must first provide to the other
parties the content of the proposed public statement, the reasons that such
disclosure is required by law or legal process, and the time and place that the
public statement will be made, in each case to the extent permitted by law or
legal process and to the extent reasonably practicable.
11.11 Remedies. No failure to exercise, and no delay in exercising, any
right, remedy, power or privilege under this Agreement by any party hereto will
operate as a waiver of such right, remedy, power or privilege, nor will any
single or partial exercise of any right, remedy, power or privilege under this
Agreement preclude any other or further exercise of such right, remedy, power or
privilege or the exercise of any other right, remedy, power or privilege. The
rights, remedies, powers and privileges provided pursuant to this Agreement are
cumulative and not exhaustive of any other rights, remedies, powers and
privileges which may be provided by law.
17
11.12 Effective Time. The parties agree that notwithstanding the actual
Closing Date, the transactions contemplated by Article 2 shall be deemed to have
been consummated at the close of business on the Effective Date.
11.13 Further Assurances. On and after the Closing Date, each party will
take all appropriate action and execute all documents, instruments or
conveyances of any kind which may be reasonably necessary or advisable to carry
out any of the provisions hereof.
THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY
LEFT BLANK. SIGNATURE PAGES FOLLOW.
18
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or (in
the case of companies) have caused this Agreement to be duly executed on their
behalf by their respective officers thereunto duly authorized, as of the day and
year first above written.
X.X. XXXXXXX & CO., LTD.
By:_________________________________
Name: Xxxxx Xxxxx
Title: Deputy Managing Director
X.X. XXXXXXX ASSET MANAGEMENT (EUROPE), LTD.
By:_________________________________
Name: Xxxxx Xxxxx
Title: Finance Director
TPR HOLDING B.V.
By:_________________________________
Name: Xxxxx Xxx Xxxxxxx
Title: Managing Director
19
Schedule 10.1
WPSAM Europe
Xxxx X. Xxxxxxx Director Chairman
Hermanus Xxxxxxxxx Xxxx* Director Deputy Chairman
Xxxxx Xxx Xxxxxxx Director Managing Director
Xxxx X. Xxxxxxxxx Director Managing Director
Xxxxxx X. Xxxxxxxxx Director
Xxxxx Xxxxx Director Finance Director
Xxxxx X. Xxxxx Deputy Finance Director
Xxxxx Xxxxxxx Secretary
Xxxx X. Xxxxx Assistant Secretary
X.X. Xxxxxxx Asset Management (Curacao) N.V.
--------------------------------------------
Xxxxxxx X. Xxxxxxx Managing Director
Xxxx X. Xxxxxxx Managing Director
Xxxxx Xxxxx Managing Director
Xxxxx Xxx Xxxxxxx Managing Director
Xxxxxx X. Vis Managing Director
X.X. Xxxxxxx Asset Management (Europe) N.V.
(formerly TPR & Partners N.V.)
-------------------------------------------------
Xxxxxxx X. Xxxxxxx Managing Director
Xxxx X. Xxxxxxx Managing Director
Xxxxx Xxxxx Managing Director
Xxxxx X. Xxxxxxxxxx Managing Director
Xxxxx Xxx Xxxxxxx Managing Director
Xxxx X. Xxxxxxxxx Managing Director
Xxxxx X. Xxxxx Managing Director
TPR Curacao N.V.
-----------------
Xxxxxxx X. Xxxxxxx Managing Director
Xxxx X. Xxxxxxx Managing Director
Xxxxx Xxxxx Managing Director
Xxxxx Xxx Xxxxxxx Managing Director
Xxxx X. Xxxxxxxxx Managing Director
Xxxxxx X. Vis Managing Director
Xxxxx X. Xxxxx Managing Director
--------
* Upon the resignation or retirement of Hermanus Xxxxxxxxx Xxxx, Xxxxx X.
Xxxxxxxxxx shall replace him as a Director.
Schedule 10.4
WPSAM Europe Income. There shall be added or subtracted such portion of the
employee compensation paid to Xxxx Xxxxxxxxx and Xxxxx Xxxxxx (or any successor
to substantially all of the duties of either as an employee of WPSAM Europe or a
WPSAM Europe Subsidiary) by WPS Ltd. and its Affiliates, during the 12-month
period ended June 30, 2006, such that 80% of such compensation shall have been
charged to WPSAM Europe; provided, however, that the portion of Xxxx Xxxxxxxxx'x
compensation charged to WPSAM Europe shall not exceed 80% of Xxxxx Xxx Xxxxxxx'x
compensation from WPS Ltd. and its Affiliates for the same period. In the event
of a material change in the portion of the working time of any such individual
that is devoted to WPSAM Europe and the WPSAM Europe Subsidiaries, the board of
directors of WPSAM Europe shall make an equitable adjustment to the foregoing
sentence. At all times, the charge to WPSAM Europe for employees shared with WPS
Ltd. or its other Affiliates shall otherwise be consistent with the actual
allocation of their working time and effort.
