EXHIBIT 99.1
LINKLATERS
& ALLIANCE
STANDARD MANAGEMENT FINANCIAL CORPORATION
and
STANDARD MANAGEMENT CORPORATION
and
STANDARD MANAGEMENT INTERNATIONAL S.AR.I.
and
PREMIER LIFE (BERMUDA) LTD.
and
WINTERTHUR LIFE
and
WINTERTHUR OVERSEAS LTD.
SHARE PURCHASE AND PORTFOLIO
TRANSFER AGREEMENT
relating to the
shares issued by Premier Life (Luxembourg) S.A.
and the portfolio of insurance policies of Premier Life (Bermuda) Ltd.
LINKLATERS XXXXXX
0 Xxx Xxxxx Xxxxxx
X.X. 0000
X-0000 Xxxxxxxxxx
Telephone: (352) 26 08 1
Telefax: (000) 00 00 00 00
Ref: jms /0580510/0001
Linklaters Xxxxxx is a
member firm of Linklaters & Alliance
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THIS AGREEMENT is made on 24 May 2002
BETWEEN:
(1) STANDARD MANAGEMENT FINANCIAL CORPORATION, a company incorporated in
Delaware, whose registered office is in Xxxxxxxxxx, Xxxxxxxx 00000, 000
Xxxxxxxx Xxxxxx, Xxxxx 000, ("XXXX")
(2) STANDARD MANAGEMENT CORPORATION, a company incorporated in Indiana,
whose registered office is in Xxxxxxxxxxxx, Xxxxxxx 00000, 00000 X.
Xxxxxxxxxxxx, ("SMC")
(3) STANDARD MANAGEMENT INTERNATIONAL S.AR.I, a company incorporated in
Luxembourg, whose registered office is in X-0000 Xxxxxxxxxx, 00X, xxx
xx Xxxxxxxx, ("XXX)
(4) PREMIER LIFE (BERMUDA) LTD. a company incorporated in Bermuda whose
registered office is in Hamilton, Xxxxxxxxx Xxxxx, 0 Xxxxxx Xxxxxx,
Xxxxxxxx, XX 00, Bermuda ("PLB")
(5) WINTERTHUR LIFE, a company incorporated in Switzerland, whose
registered office is in XX-0000 Xxxxxxxxxx, General Xxxxxx-Xxxxxxxx 00
("WLP"), and
(6) WINTERTHUR OVERSEAS LTD., a company incorporated in Bermuda, whose
registered office is in Xxxxxxxx, Xxxxxx Xxxxx, 00 Xxxxxxxxxx Xxxxxx,
Xxxxxxxx XX 00 ("WOB").
WHEREAS:
(A) SMFC, in its capacity of parent company of SMI, has agreed (i) that SMI
shall sell the Shares to WLP, (ii) that PLB shall assign that transfer
the Transferred Portfolio to WOB and (iii) to assume the obligations
imposed on it under this Agreement;
(B) SMI in its capacity of parent company of PLB, has agreed (i) that PLB
shall assign and transfer the Transferred Portfolio to WOB and (ii) to
assume the obligations imposed on it under this Agreement;
(C) SMI has agreed (i) to sell the Shares to WLP and (ii) to assume the
obligations imposed on it under this Agreement;
(D) PLB has agreed (i) to assign and transfer the Transferred Portfolio to
WOB and (ii) to assume the obligations imposed on it under this
Agreement;
(E) WLP has agreed (i) to acquire the Shares from SMI and (ii) to assume
the obligations imposed on it under this Agreement; and
(F) WOB has agreed (i) to acquire the Transferred Portfolio from PLB and
(ii) to assume the obligations imposed on it under this Agreement.
IT IS AGREED as follows:
1 INTERPRETATION
In this Agreement, unless the context otherwise requires, the
provisions in this Clause 1 apply:
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1.1 Definitions
"AGREED TERMS" means, in relation to a document, such document in the
terms agreed between the Sellers and Purchasers and signed for
identification by the Sellers and the Purchasers' representative(s)
with such alterations as may be agreed in writing between the Sellers
and Purchasers from time to time;
"AGREEMENT" means this Share Purchase and Portfolio Transfer Agreement;
"ASSETS" means all the property, rights and assets owned by PLB and PLL
respectively as indicated in PLB's Accounts and PLL's Accounts;
"BUSINESS DAY" means a day which is not a Saturday, a Sunday or a
public holiday in either the Grand-Duchy of Luxembourg, Switzerland,
the United States of America, or Bermuda;
"BUSINESS KNOW-HOW" means all rights and interest owned by any of the
Sellers in Know-how which at or before Closing is capable of being used
or enjoyed in any of PLL's and/or PLB's businesses;
"CAA" means the Luxembourg Commissariat aux Assurances;
"CLOSING" means in respect of any of the sale of the Shares and the
transfer of the Transferred Portfolio, the completion of such sale
and/or of such transfer pursuant to Clause 6 of this Agreement and any
relevant Local Transfer Documents and Procedures;
"CLOSING DATE" means, in respect of each Closing, the date on which
Closing takes place;
"CONSULTANT" means a worker providing services to PLL and/or to PLB
pursuant to a Consultancy Agreement;
"CONSULTANCY AGREEMENT" means an agreement other than a contract of
employment pursuant to which a worker provides services;
"DATA ROOM" means the data room containing documents and information
relating to the Sellers and PLL made available by the Sellers to the
Purchasers on 23 October 2001 as well as on 25 and 26 February 2002, in
Luxembourg each;
"EMPLOYEES" means all individuals such as without being limited to
employees, officers, and managers, engaged or employed by the person
and/or company referred to, including the Senior Employees and
"Employee" means any of them;
"ENCUMBRANCE" means any claim, charge, mortgage, lien, option, equity,
power of sale, hypothecation, usufruct, retention of title, right of
pre-emption, right of first refusal or other third party rights or
security interest of any kind or an agreement to create any of the
foregoing;
"FUND CUSTODIANS" means all custodians of the assets underlying to the
Transferred Policies and all other custodians the services of whom PLB
and/or PLL used in carrying out their business on or immediately prior
to the date of signature of this Agreement as set out in Schedule 9:
"INFORMATION TECHNOLOGY" means computer systems, communication systems,
software, including licenses, hardware and other rights listed in
Schedule 10 which at the date of signature of this Agreement as well on
or before Closing is owned, used, licenses or enjoyed by the Sellers in
relation to the business carried out by PLL and/or PLB on or
immediately prior to the date of signature of this Agreement;
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"INTELLECTUAL PROPERTY" means trade marks, service marks, trade names,
logos, patents, inventions, registered and unregistered design rights,
copyrights, semi-conductor topography rights, database and all other
similar proprietary rights which may subsist in any part of the world
(including Know-how) including, where such rights are obtained or
enhanced by registration, any registration of such rights and
applications and rights to apply for such registrations;
"INTERMEDIARY NETWORK" means all insurance agents, brokers and other
intermediaries set out in Schedule 8, via whom PLB and/or PLL sold the
Transferred Policies and the services of whom they used in carrying out
their business on or immediately prior to the date of signature of this
Agreement; provided, such persons have sold policies on or after
January 1, 1999;
"KNOW-HOW" means confidential and proprietary industrial and commercial
information and techniques in any form including (without limitation)
drawings, formulae, test results, reports, project reports and testing
procedures, instruction and training manuals, tables of operating
conditions, market forecasts, lists and particulars of customers and
suppliers;
"LOCAL TRANSFER DOCUMENTS AND PROCEDURES" has the meaning given in
Clause 2.5.1;
"LOSSES" means all losses, liabilities, costs (including without
limitation reasonable legal costs and experts' and consultants' fees),
charges, expenses, actions, proceedings, claims and demands;
"XX XXXXXXX" means Xx Xxxx Xxxxxxx, Financial Controller, residing at
00, xxx Xxxx x'Xxxxxxx, X-0000 Xxxxxxxxxx;
"XX XXXXXXXXX" means Xx Xxxxx Xxxxxxxxx, Operations Director, residing
at 00, xxx xxx Xxxxxxx, X-0000 Xxxxxxxxxxx;
"XX XXXXXXX" means Xx Xxxxxxx Xxxxxxx, Managing Director, residing at
00, xxx xx Xxx Xxxxxx, X-0000 Xxxxxxxxxx;
"PARTIES" means all parties to this Agreement and "PARTY" means any of
them;
"PLB'S ACCOUNTS" means PLB's Audit Accounts and PLB's Management
Accounts, as attached in Schedule 5;
"PLB'S AUDIT ACCOUNTS" means PLB's audited accounts for the
twelve-month period ended on 30 September 2001, as attached in Schedule
5;
"PLB'S MANAGEMENT ACCOUNTS" means PLB's interim accounts for the period
of 1 October 2001 to 31 March 2002, as attached in Schedule 5;
"PLL" means Premier Life (Luxembourg) S.A., a company incorporated in
Luxembourg, whose registered office is in L- 1273 Luxembourg, 13A. rue
de Bitbourg;
"PLL'S ACCOUNTS" means PLL's Audit Accounts and PLL's Management
Accounts, as attached in Schedule 6;
"PLL'S AUDIT ACCOUNTS" means PLL's audited accounts for the
twelve-month period ended on 30 September 2001, as attached in Schedule
6;
"PLL'S MANAGEMENT ACCOUNTS" means PLL's interim accounts for the period
of 1 October 2001 to 31 March 2002, as attached in Schedule 6;
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"PLB TRANSFERRED POLICIES" means all of the insurance policies
comprised in the Transferred Portfolio on Closing, as referred to in
Clause 2.3;
"PLL TRANSFERRED POLICIES" means all of the insurance policies
comprised in the portfolio of insurance policies held by PLL on
Closing, as referred to in Clause 2.3 and Schedule 7;
"PURCHASE PRICE" has the meaning set out in Clause 3.1;
"PURCHASERS" means WLP and WOB and "PURCHASER" means any of the
Purchasers;
"REGISTERED INTELLECTUAL PROPERTY" means such of the Sellers'
Intellectual Property as is registered or the subject of applications
for registration in any patent, trademark or other Intellectual
Property registry anywhere in the world;
"REGULATORS" means the relevant supervisory authorities in the
applicable jurisdictions, being e.g. without being limited to the
Commissariat aux Assurances in Luxembourg and the Bermuda Monetary
Authority in Bermuda, and "REGULATOR" means any of them;
"RESOURCES" has the meaning set out in Clause 7.1.2;
"SELLERS" means SMFC, SMC, SMI, and PLB and "SELLER" means any of the
Sellers;
"SELLERS' WARRANTIES" means the warranties given by the Sellers
pursuant to Clause 8 and Schedule 2 and "SELLERS' WARRANTY" means any
one of them;
"SENIOR EMPLOYEES" means Xx Xxxxxx Xxxxxx, Private Portfolio Manager,
residing at Maison 67, L-6835 Boudler, Xx Xxxxxxx, Xx Xxxxxxxxx, Ms
Xxxxxxxx Guest-Ball, Personnel Manager and Company Secretary residing
at 0, xxx Xxxxxxxxxxx, X-0000 Mamer, Ms Xxxxx Xxxxxx, Marketing
Manager, residing at 00, xxx Xxxxxx Xxxxx, X-0000 Xxxxxxxxxx, Xx Xxxxxx
Skalli, Data Processing Manager, residing at 0, xxx xx Xxxxxx, X-00000
Redange, and Xx Xxxxxxx, and "SENIOR EMPLOYEE" means any one of them;
"SHARES" means 100% of the shares, i.e. 5.154.800 registered shares
without any par value, out of which 416.000 ordinary and 4.738.800
redeemable non-cumulative preference shares, issued by PLL;
"TAXATION" OR "TAX" means all forms of taxation whether direct or
indirect and whether levied by reference to income, profits, gains, net
wealth, asset values, turnover, added value or other reference and
statutory governmental, state, provincial, local governmental or
municipal impositions, duties, contributions, rates and levies
(including without limitation social security contributions and any
other payroll taxes), whenever and wherever imposed (whether imposed by
way of a withholding or deduction for or on account of tax or
otherwise) and in respect of any person and all penalties, charges,
costs and interest relating thereto;
"TAX AUTHORITY" means any taxing or other authority competent to impose
any liability in respect of Taxation or responsible for the
administration and/or collection of Taxation or enforcement of any law
in relation to Taxation;
"TRANSFERRED POLICIES" means the PLL Transferred Policies and the PLB
Transferred Policies, and "TRANSFERRED POLICY" means any of them;
"TO THE KNOWLEDGE OF SELLERS" (or similar references to Seller's
knowledge) means the actual knowledge of (i) the Sellers' directors or
officers and (ii) PLL's directors, officers and Senior Employees.
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"TRANSFERRED PORTFOLIO" means the portfolio of PLB Transferred
Insurance Policies transferred by PLB to WOB as per the terms of this
Agreement;
"VAT" means within the European Union such Tax as may be levied in
accordance with (but subject to derogations from) the Directive
77/338/EEC and outside the European Union any Taxation levied by
reference to added value or sales.
1.2 Shares
References to shares shall include, where relevant, quotas.
1.3 Singular, plural, gender
References to one gender include all genders and references to the
singular include the plural and vice versa.
1.4 References to persons and companies
References to:
1.4.1 a person include any corporate entity, partnership or
unincorporated association (whether or not having separate
legal personality); and
1.4.2 a company shall include any company, corporation or any body
corporate, whenever incorporated.
1.5 Reference to Closing
Where this Agreement refers to circumstances or events at Closing or to
periods before or after Closing, such references shall be construed as
being reference to each such Closing, it being expressly agreed that
the completion of the sale of the Shares must not necessarily occur at
the same time as the completion of the transfer of the Transferred
Portfolio.
1.6 Schedules etc.
References to this Agreement shall include any Recitals and Schedules
to it and references to Clauses and Schedules are to Clauses of, and
Schedules to, this Agreement. References to paragraphs and Parts are to
paragraphs of this Agreement and Parts of the Schedules.
1.7 Information
References to books, records or other information means books, records
or other information in any form including paper, electronically stored
data, magnetic media, film and microfilm.
1.8 Legal Terms
References to any Luxembourg legal term shall, in respect of any
jurisdiction other than Luxembourg, be construed as references to the
term or concept, which most nearly corresponds to it in that
jurisdiction.
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2 AGREEMENT TO SELL
2.1 Sale and Purchase of the Shares
2.1.1 On and subject to the terms of this Agreement and the Local
Transfer Documents and Procedures, SMI agrees to sell the
Shares to WLP and WLP agrees to purchase the Shares from SMI.
2.1.2 The Shares are sold free from Encumbrances and together with
all rights, obligations and advantages attaching to them as at
Closing (including, without limitation, the right to receive
all dividends or distributions declared, made or paid on or
after Closing).
2.1.3 SMI shall procure that on or prior to Closing any and all
rights of pre-emption over the Shares are waived irrevocably
by the persons entitled thereto.
2.2 Transfer of Portfolio
2.2.1 On and subject to the terms of this Agreement and the Local
Transfer Documents and Procedures, PLB agrees to assign and
transfer to WOB all of its rights, obligations, title and
interest in and to the Transferred Portfolio, as well as all
benefits and rights thereof and associated therewith and WOB
agrees to acquire the Transferred Portfolio from PLB and to
accept all of PLB's rights, obligations, title and interest in
and to the Transferred Portfolio, as well as all benefits and
rights thereof and associated therewith.
2.2.2 Up to Closing, WOB shall have the right and authority to:
(i) exercise for and on the account of PLB all rights
under the Transferred Portfolio, and to endorse with
the name of PLB any other supplements notices or
other documents relating thereto;
(ii) enforce in PLB's name any contractual right or claim,
which are to be assigned and transferred to PLB to
WOB pursuant to this Agreement.
2.2.3 Up from Closing, WOB shall have the right and authority to:
(i) exercise in its own name and on its own account all
rights under the Transferred Portfolio, and to
endorse in its own name any other supplements notices
or other documents relating thereto;
(ii) enforce in its own name any contractual right or
claim, which are to be assigned and transferred by
PLB to WOB pursuant to this Agreement.
2.2.4 PLB's rights, title, benefit and/or interest in the
Transferred Portfolio are assigned and transferred free from
Encumbrances except for Encumbrances placed on the Transferred
Policies by the policyholder.
2.2.5 No liabilities related to PLB other than those underlying to
the Transferred Portfolio are transferred with the Transferred
Portfolio.
2.3 Transferred Policies
2.3.1 In no circumstances may the Transferred Policies comprise:
(i) any insurance policies with US residents at the time
of policy issuance, as either a policyholder or as an
insured person;
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(ii) any insurance policies sold prior to the year 1946;
(iii) any insurance policies from PLB that can not be
legally assigned and transferred as per the terms of
this Agreement due to any applicable law; and
(iv) those insurance policies from PLL that WLP will
before 60 Business Days after Closing on its own
discretion select form the insurance policies set out
in Schedule 12.
(v) those insurance policies from PLB that WLP will
before or at Closing on its own discretion select
from the insurance policies set out in Schedule 13.
2.3.2 In the event that it will appear that notwithstanding Clause
2.3.1, the Transferred Policies comprise insurance policies
referred to in such Clause 2.3.1 including but not limited to
those insurance policies that WLP will select from the
insurance policies set out in Schedule 12 and 13 in accordance
with Clause 2.3.1 (iv) and 2.3.1 (v), the Sellers undertake to
assist the Purchasers in the procedure to transfer said
policies to PLB and to take any action and sign any document
as far as legal under any applicable laws and required to
execute these transfers.
2.4 Transfer of Capabilities
2.4.1 It is expressly agreed between Sellers and Purchasers that,
transferred to WLP and WOB respectively together with the
Shares and Transferred Portfolio, are any properties, rights
and assets, including without being limited to all agreements,
licenses, Intellectual Property, Know-how, Information
Technology and other capabilities necessary to carry on the
business that PLL and PLB have carried on at and immediately
prior to the date of signature of the Agreement in the manner
in, and to the extent to, which PLL and PLB have conducted
said business at and immediately prior to the date of
signature of this Agreement, are transferred to WLP and WOB
respectively together with the Shares and the Transferred
Portfolio, and the Sellers and the Purchasers agree to execute
any agreement, sign any document, comply with any procedure or
take any other action necessary to implement that transfer.
2.4.2 Sellers undertake to use best endeavours to cooperate with PLL
and/or WOB, to encourage active members of PLL's and/or PLB's
Intermediary Network not to terminate and/or, as the case may
be, to execute terms of business agreements according to
existing terms with PLL and/or WOB after the Closing. Sellers
further undertake to use best endeavours to cooperate with PLL
and/or WOB to encourage Fund Custodians not to terminate
and/or, as the case may be, to execute appropriate custodian
agreements according to existing terms with PLL and/or WOB
after the Closing.
2.5 Local Transfer Documents and Procedures
2.5.1 On or prior to Closing, the Parties shall execute any
documents and comply with any procedures and provide such
information (subject to the relevant local law and otherwise)
where required to transfer the Shares to WLP and the
Transferred Portfolio to WOB on Closing (the "LOCAL TRANSFER
DOCUMENTS AND PROCEDURES")
2.5.2 To the extent that the provisions of this Agreement are
inconsistent with or additional to the provisions of the Local
Transfer Documents and Procedures;
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(i) the provisions of this Agreement shall prevail; and
(ii) the Parties shall procure that the provisions of the
relevant Local Transfer Documents and Procedures are
adjusted, so far as permissible under the laws of the
relevant jurisdiction, to the extent necessary to
give effect to the provisions of this Agreement.
2.5.3 No seller shall bring any claim against any Purchaser in
respect of or based upon the Local Transfer Documents and
Procedures save to the extent necessary to implement any
transfer of the Shares or of the Transferred Portfolio in a
manner consistent with the terms provided for by the
Agreement. To the extent that a Seller does bring a claim to
implement such a transfer, the Sellers shall indemnify each
Purchaser against all Losses which such Purchaser may suffer
through or arising from the bringing of such a claim.
2.5.4 No Purchaser shall bring any claim against any Seller in
respect of or based upon the Local Transfer Documents and
Procedures save to the extent necessary to implement any
transfer of the Shares or of the Transferred Portfolio in a
manner consistent with the terms provided for by this
Agreement. To the extent that a Purchaser does bring a claim
to implement such a transfer, the Purchasers shall indemnify
each Seller against all Losses which such Seller may suffer
through or arising from the bringing of such a claim.
3. CONSIDERATION
3.1 Amount
3.1.1 Whereas the consideration for the purchase of the Shares under
this Agreement shall be an amount equal to nineteen million
and five hundred thousand Dollars of the United States of
America (USD 19,500,000.), (the "SHARE PURCHASE PRICE"), the
consideration for the acquisition of the Transferred Portfolio
under this Agreement shall be an amount equal to either
million and three hundred thousand Dollars of the United
States of America (USD 8,300,000.) (the "PORTFOLIO PURCHASE
Price"), making an aggregate consideration for the acquisition
of the Shares and the Portfolio of twenty-seven million and
either hundred thousand Dollars of the United States of
American (USD 27,800,000.) (the "PURCHASE PRICE").
3.1.2 The Purchase Price has been agreed between the Parties upon
the express condition precedent that the debt in the amount of
two million eight hundred thirty-five thousand three hundred
and fifty-four Dollars of the United States of America (USD
2,835,354.) that SMC owes to PLL as per the terms of an
agreement signed on 16 December 1993 by PLL, SMC and SMI, has
been reimbursed to PLL together with any interest due under
said agreement.
3.1.3 In the event that the aggregate value of assets under
management underlying to any of either the PLL Transferred
Policies or the PLB Transferred Policies is decreased, solely
as a result of insurance policies not being transferred in
accordance with Clauses 2.3.1 (i) and 2.3.1 (ii), by an amount
of ten million Dollars of the United States of America (USD
10,000,000.) or more, against the aggregate value of assets
under management underlying to the aggregate insurance
portfolio as set out in PLL's Audit Accounts and in PLB's
Audit Accounts respectively, agreed to be for the purpose of
this Clause, one hundred five million six hundred forty-seven
thousand Euro (EUR 105,647,000,) for PLL and two hundred
ninety-six million nine hundred and eighty-seven thousand
Dollars of the United States of America (USD 296,987,000.) for
PLB, the Share Purchase Price and/or the Portfolio Purchase
Price, as the case may be, is decreased by one hundred
thousand Dollars of the United States of America (USD
100,000.) per three million Dollars of the United States of
America (USD 3,000,000.) of decrease of the value of assets
under management, it being agreed that no decrease in Purchase
Price shall be made for insurance policies not transferred in
accordance with Clauses 2.3.1 (iii) to 2.3.1 (v) of this
Agreement.
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3.1.4 The Share Purchase Price and the Portfolio Purchase Price
shall be paid by the Purchasers to the Sellers on each Closing
by wire transfer to the bank account of SMI designated by the
Sellers, it being agreed that SMI shall collect the Purchase
Price as Seller and as agent of PLB respectively, subject to
the first two million eight hundred thirty-five thousand three
hundred and fifty-four Dollars of the United States of America
(USD 2,835,354.) of the Share Purchase Price to be paid, at
the discretionary option of the Sellers, by way of a certified
international bank cheque to SMI.
3.1.5 If any payment is due by any Seller to any Purchaser in
respect of any claim for any breach of this Agreement or any
Local Transfer Documents and Procedures or pursuant to an
indemnity under this Agreement, before Closing, the payment
shall be made by way of adjustment of the consideration paid
by the Purchasers under this Agreement and the consideration
shall be deemed to be reduced by the amount of such payment,
and after Closing the payment shall be made by any Seller upon
first demand of any Purchaser by wire transfer to the bank
account of WLP designated by the Purchasers, it being agreed
that WLP shall collect any such payment as Purchaser and as
agent of the other Purchasers respectively.
3.2 VAT and Stamp Duty
The Sellers and the Purchasers acknowledge and agree that the sale of
the Shares and the transfer of the Transferred Portfolio are not
subject to any VAT nor stamp duty nor ad valorem registration taxes in
Luxembourg.
4 CONDITIONS
4.1 Conditions Precedent as to the Share Purchase
The agreement to buy and sell the Shares contained in Clause 2 is
conditional upon satisfaction of the following conditions precedent:
4.1.1 the passing at a board of directors' (or equivalent body under
the applicable laws) meeting of each of the Sellers and the
Purchasers of a resolution to approve the transactions
contemplated in this Agreement in the agreed terms or with
such amendments as the Parties may agree;
4.1.2 any applicable merger regulation condition in and outside the
EU, if any, being satisfied;
4.1.3 the Sellers and the Purchasers having fulfilled all legal
obligations, if any, to inform and consult employee
representatives about the sale and purchase of the Shares;
4.1.4 any consent from a third party other than those referred to in
Clause 4.1.6 required in relation to the sale and purchase of
the Shares, if any, having been obtained on terms acceptable
to the Purchasers and such approvals remaining in full force
and effect;
4.1.5 all applicable Local Transfer Documents and Procedures having
been executed and/or complied with;
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4.1.6 without prejudice to the generality of the foregoing, any
consent from the Regulators and/or the appropriate
governments, governmental, supranational or trade agencies,
courts or other regulatory bodies (including without
limitation exchange control authorities) required in relation
to the sale and purchase of the Shares, if any, having been
obtained on terms reasonably acceptable to the Purchasers and
such approvals remaining in full force and effect, including
without being limited to the Luxembourg Commissariat aux
Assurances having accepted the new shareholders of PLL;
4.1.7 neither the Regulators, nor any government, governmental,
supranational or trade agency, court, other regulatory body or
any other person in any jurisdiction having instituted or
threatened any action, proceedings, suit, investigation or
reference or made, proposed or enacted any statute, regulation
or order or having done anything which would or is likely to
make the acquisition of the Shares, or any part thereof, void,
illegal or unenforceable or otherwise restrain, prohibit,
delay or impose additional conditions or obligations with
respect thereto or otherwise challenge or interfere therewith
or require or prevent any divestiture of any part thereof by
any Purchaser or impose any limitation on the ability of any
Purchaser to carry on any business or own any assets and all
applicable waiting periods during which any such action,
proceedings, suit, investigation or reference may be taken,
having expired, lapsed or been terminated.
4.2 Conditions Precedent as to the Assignment and Transfer of the
Transferred Portfolio
The agreement to assign and transfer the Transferred Portfolio
contained in Clause 2 is conditional upon satisfaction of the following
conditions precedents:
4.2.1 the passing at a board of directors (or equivalent body under
the applicable laws) meeting of each of the Sellers and the
Purchasers of a resolution to approve the transactions
contemplated in this Agreement in the agreed terms or with
such amendments as the Parties may agree;
4.2.2 any applicable merger regulation condition in and outside the
EU, if any, being satisfied;
4.2.3 the Sellers and the Purchasers having fulfilled all legal
obligations, if any, to inform and consult employee
representatives about the assignment and the transfer of the
Transferred Portfolio;
4.2.4 any consent from a third party other than those referred to in
Clause 4.2.6 required in relation to the assignment and
transfer of the Transferred Portfolio, if any, having been
obtained unconditionally and on terms acceptable to the
Purchasers and such approvals remaining in full force and
effect at least until Closing;
4.2.5 all applicable Local Transfer Documents and Procedures having
been executed and/or complied with;
4.2.6 without prejudice to the generality of the foregoing, any
consent from the Regulators and/or the appropriate
governments, governmental, supranational or trade agencies,
courts or other regulatory bodies (including without
limitation exchange control authorities) required in relation
to the assignment and transfer of the Transferred Portfolio,
if any, having been obtained unconditionally and on terms
acceptable to the Purchasers and such approvals remaining in
full force and effect at least until Closing, including
without being limited to:
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(i) the registration of WOB under the Bermuda Segregated
Accounts Companies Xxx 0000; and
(ii) the obtaining of a Court Order in Bermuda sanctioning
the transfer of the Transferred Portfolio pursuant to
section 25 of the Insurance Xxx 0000;
4.2.7 neither the Regulators, nor any government, governmental,
supranational or trade agency, court, other regulatory body or
any other person in any jurisdiction having instituted or
threatened any action, proceedings, suit, investigation or
reference or made, proposed or enacted any statute, regulation
or order or having done anything which would or is likely to
make the assignment and transfer of the Transferred Portfolio
or any part thereof void, illegal or unenforceable or
otherwise restrain, prohibit, delay or impose additional
conditions or obligations with respect thereto or otherwise
challenge or interfere therewith or require or prevent any
divestiture of any part thereof by any Purchaser or impose any
limitation on the ability of any Purchaser to carry on any
business or own any assets and all applicable waiting periods
during which any such action, proceedings, suit, investigation
or reference may be taken, having expired, lapsed or been
terminated; and
4.2.8 any consent from the Regulators and/or the appropriate
governments, governmental, supranational or trade agencies,
courts or other regulatory bodies (including without
limitation exchange control authorities) required in order to
allow WOB to carry on a business in the manner in which PLB
carried on its business at the date of signature of this
Agreement or immediately prior thereto, if any, having been
obtained unconditionally and on terms reasonably acceptable to
the Purchasers and such approvals remaining in full force and
effect at least until Closing.
4.3 Responsibility for Satisfaction
4.3.1 The Sellers and the Purchasers shall use best endeavours to
ensure the satisfaction of the conditions precedent set out in
Clauses 4.1 and 4.2 as soon as possible.
4.3.2 The Sellers and the Purchasers agree that all action to be
taken to ensure satisfaction of the conditions precedent set
out in Clauses 4.1 and 4.2, including without being limited to
all requests and enquiries from any third party, including any
government, governmental, supranational or trade agency, court
or other regulatory body, shall be dealt with by the Sellers
and the Purchasers in consultation with each other and the
Sellers and the Purchasers shall promptly cooperate with and
provide all necessary information and assistance reasonably
required by such third party, including any government,
agency, court or body upon being requested to do so by the
other.
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4.4 Non-Satisfaction/Waiver
4.4.1 The Party responsible for satisfaction of each condition in
Clause 4 shall give notice to the other Party of the
satisfaction of the relevant condition(s) within two Business
Days of becoming aware of the same.
4.4.2 The Purchasers may at any time waive in whole or in part and
conditionally or unconditionally any condition precedent set
out in Clause 4.1 and 4.2 by notice in writing to the Sellers.
4.4.3 If the conditions in Clause 4 are not satisfied or waived on
or before 30 September 2002, the Purchasers may, in their sole
discretion, terminate this Agreement and the Sellers shall
have no claim against the Purchasers under it, save for any
claim arising from breach of any obligation contained in
Clause 4.
5 PRE-CLOSING
5.1 The Sellers' Obligations
5.1.1 Each of the Sellers undertakes to use best endeavours to
procure that between the date of signature of this Agreement
and Closing:
(i) the business of PLL and PLB is carried on as going
concern in the ordinary course as carried on prior to
the date of signature of this Agreement, save in so
far as agreed in writing by the Purchasers;
(ii) no action is taken to liquidate, wind up or otherwise
put any Seller and/or PLL into dissolution and no
application for the bankruptcy of any such company is
made and no request to grant to any such company a
moratorium of payments (sursis or concordat) is filed
with any court;
(iii) all material agreements, commitments or arrangements
(whether legally binding or not) taken by PLL and PLB
remain in place, save where the termination of the
relevant agreement, commitment or arrangement is one
of the conditions precedent to Closing and therefore
specifically provided for in this Agreement;
(iv) the Assets are preserved;
(v) PLL and PLB's benefits and rights under the
Transferred Policies are not materially varied and no
Transferred Policies are at any time terminated,
without the prior written consent of the Purchasers
and no rights or powers conferred on PLL and/or PLB
at any time following the occurrence of an event of
default under any Transferred Policy are exercised
unless and until requested to do so by the
Purchasers, whereupon PLL and PLB agree that they
will do so;
(vi) Intellectual Property or Know-how, which is held by
the Sellers and/or PLL and is required by PLL and PLB
in order to carry on their business in the manner in
which they carried on their business at the date of
signature of this
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Agreement, are preserved;
(vii) all existing licences and consents from the
Regulators and/or any other appropriate governments,
governmental, supranational or trade agencies, courts
or other regulatory bodies (including without
limitation exchange control authorities) obtained by
PLL and PLB before the date of signature of this
Agreement and required by said companies in order to
carry on their business in the manner in which they
carried on their business at the date of signature of
this Agreement are preserved and maintained in force;
and
(viii) the constitutional documents of PLL and PLB are not
amended; and
(ix) no directors and/or auditors of PLL and PLB are
dismissed and no additional directors and/or auditors
of PLL and PLB are appointed;
(x) any existing contractual relationship or any other
existing agreement or arrangement, be it in writing
or otherwise, between PLL and any of the Sellers is
terminated, with the exception of the Service
Agreement existing between PLL and PLB at the date of
signature of this Agreement regarding insurance
services to be provided by PLL to PLB.
5.1.2 Without prejudice to the generality of Clause 5.1.1, each of
the Sellers further undertakes to use best endeavours to
procure that between the date of signature of this Agreement
and Closing, neither PLL, nor PLB will:
(i) incur or enter into or amend any material agreement
or commitment, except in the normal course of
business;
(ii) acquire or dispose of, or agree to acquire or dispose
of, any material asset or material stocks, involving
consideration, expenditure or liabilities;
(iii) acquire or agree to acquire any share, shares or
other interest in any company, partnership or other
venture;
(iv) incur any additional borrowings or incur any other
indebtedness;
(v) create, allot or issue any share capital;
(vi) repay, redeem or repurchase any share capital;
(vii) declare, make or pay any dividend or other
distribution to shareholders;
(viii) save as required by law:
(a) make any material amendment to the terms and
conditions of employment (including, without
limitation, remuneration, pension
entitlements, health/life insurance and
other benefits) of any Employee;
(b) provide or agree to provide any gratuitous
payment or benefit to any employee or any of
his dependents;
(c) dismiss any Employee; or
(d) engage or appoint any additional Employee
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(ix) discontinue or amend any retirement benefit
arrangements and/or health/life insurance schemes or
commence to wind them up or terminate them or cause
them to cease to admit new members;
(x) communicate to any Employee any material plan,
proposal or intention to discontinue, amend, wind up,
terminate or exercise any discretion in relation to
any retirement benefit arrangements and/or any
health/life insurance schemes;
(xi) pay any benefits under any of the retirement benefit
arrangements otherwise than in accordance with the
terms of the documents governing such arrangements
(and not under any discretionary power);
(xii) enter into any guarantee, indemnity or other
agreement to secure any obligation of a third party
or create any Encumbrance over any of the Assets or
the Shares;
(xiii) make any material change to its accounting practices
or policies.
5.2 Obligations to Facilitate Closing
5.2.1 Without prejudice to the generality of Clause 5.1, each of the
Sellers undertakes to at any time prior to Closing:
(i) collaborate fully and consult with the Purchasers:
(a) in relation to all material matters
concerning the running of PLL and PLB;
(b) to ensure the transfer of the Shares and the
Transferred Portfolio as agreed in this
Agreement; and
(c) to facilitate Closing;
(ii) without prejudice to the generality of the foregoing,
do or permit to be done each and every act or thing
which the Purchasers may from time to time reasonably
require to be done for the purpose of enforcing WLP's
rights in the Shares and WOB's rights in the
Transferred Portfolio and effecting the sale and
purchase of the Shares and the assignment and
transfer of the Transferred Portfolio as agreed in
this Agreement and allow its name to be used when
reasonably required by any of the Purchasers for that
purpose; and
(iii) allow the Purchasers and their respective agents,
upon reasonable notice, and during regular business
hours, reasonable access to, and to take copies of,
the books and records of or relating in whole or in
part to PLL and PLB, provided that the obligations of
the Sellers under this Clause shall not extend to
allowing access to information which is regarded as
confidential under applicable law,
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5.2.2 Clause 5.2.1 is subject to compliance at any time by the
Parties with the Luxembourg professional secrecy rules set out
in article 111-1 of the Luxembourg law of 6 December 1991 on
the insurance sector, as amended.
5.3 Termination - Breach of Clause 5.1
Without prejudice to Clause 9.6 and without prejudice to its right to
claim damages or other compensation, if prior to Closing any Seller is
in material breach of its undertaking in Clause 5.1 and/or its
obligations under Clause 5.2, the Purchasers shall be entitled by
notice in writing to the Sellers to terminate this Agreement with
immediate effect, if such breach (provided it can be cured) has not
been cured within ten days of actual knowledge thereof by Sellers
(other than Clauses 1, 11, 12 and 13).
6 CLOSING
6.1 Date and Place
Subject to Clause 4, Closing shall take place in Luxembourg as soon as
reasonably practicable following fulfillment or waiver of the
condition(s) set out in Clause 4.1 and 4.2 respectively, or at such
other location, time or date as may be agreed between the Parties, it
being agreed that for Taxation and accounting purposes Closing shall be
with retroactive effect on the last day of the month preceding Closing
and it being further agreed that Closing of the sale of the Shares and
Closing of the transfer of the Transferred Portfolio shall be
considered individually for the purpose of this Clause.
6.2 Closing Events
On Closing, the Parties shall comply with their respective obligations
specified in Schedule 1. The Sellers may waive some or all of the
obligations of the Purchasers as set out in Schedule I and the
Purchasers may waive some or all of the obligations of the Sellers as
set out in Schedule 1.
6.3 Title and Risk
6.3.1 Title to the Shares and the Transferred Portfolio transferred
on Closing and the risk of loss or damage thereto shall pass
to the Purchasers on Closing.
6.3.2 If any Seller received any payment, interest, notice, demand
or any other receipt in connection with the Transferred
Portfolio, it shall promptly notify the Purchasers thereof,
and where applicable, hold the same in trust for WOB.
7 POST-CLOSING OBLIGATIONS
7.1 The Sellers' Continuing Obligations
Notwithstanding Closing, the Sellers shall from time to time:
7.1.1 use their relationships with third party consultants
(including but not limited to those third parties disclosed to
Purchasers in respect of the provision of Information
Technology development and programming services) as they
existed on and immediately prior to the date of signature of
this Agreement to introduce the Purchasers to said third party
consultants as the Purchasers may request and to use best
endeavours to procure that said
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third parties assist the Purchasers as the Purchasers may
request in carrying on the business that PLL and PLB carried
out on and immediately prior to the date of signature of this
Agreement and charge fees for any services rendered to the
Purchasers at a fair market price; Sellers make no
representation as to the quality of services rendered by any
such third party consultants;
7.1.2 provide the Purchasers, upon request and in exchange for fees
which may be charged at a fair market price, with Resources
(as hereinafter defined) for the purpose of educating and
training the Purchasers' employees or designated
representatives to operate and develop the LIFEfit system with
existing PLL and/or PLB policies, and to integrate such system
with existing systems used by WOB or WLP, provided that such
Resources shall only be provided as reasonably and
occasionally necessary for a period not to exceed twelve (12)
months from the date of Closing. For the purposes of this
Clause 7.1.2, "Resources" shall be limited to telephonic
conference call support and responses to specific questions
regarding LIFEfit and its specific use with PLL's or PLB's
policy portfolio (which cannot be otherwise answered by
third-party consultants hired pursuant to Clause 7.1.1), as
provided by those representatives of SMC listed in Schedule 11
from SMC's office in Indianapolis, Indiana, USA, during
reasonable and customary business hours, and is specifically
intended to exclude programming, development, coding, or
modification services or any services that require a Resource
to be physically present in Luxembourg, Bermuda, or any place
other than SMC's headquarters:
7.1.3 provide the Purchasers with the appropriate introductions, as
necessary, to any third-party owners or licensors of
Information Technology used by PLL and/or PLB at and
immediately prior to the date of signature of this Agreement,
such that Purchasers may independently negotiate, if they deem
it necessary or appropriate, with such owners or licensors
post-closing for sublicensing or franchising rights of such
Information Technology for other business purposes;
7.1.4 give to the Purchasers such information and assistance as they
may reasonably require relating to PLL and/or PLB, said
companies' business, Employees, intermediaries, customers and
suppliers, said companies' current contracts and engagements
and their trade debtors and trade creditors, as well the
Intermediary Network and the Fund Custodians, and pass on any
trade enquiry which any Seller receives;
7.1.5 execute such documents and perform such acts and things as the
Purchasers may reasonably require:
(i) for the purpose of vesting in the Purchasers the full
benefit of any rights, powers, remedies, claims or
defences (including benefit without limitation rights
of set-off and counterclaim) which the Sellers may
have in relation to any claim or liability assumed by
the Purchasers or otherwise providing the benefit of
the same to the Purchasers;
(ii) to enable any action, suit, prosecution, litigation,
proceedings, dispute or arbitration to which any of
the Sellers was a party or open to the Sellers and
which is continued or started by or against the
Purchasers; and
(iii) to enable any judgment or award obtained by the
Sellers and not fully satisfied as at Closing, to the
extent it regards PLL and/or the Transferred
Portfolio and enforceable by the Sellers, to be
enforced by the Purchasers, whether by any of the
Purchasers joining itself as a defendant or by any of
the Purchasers consenting to any plaintiff concerned
joining it as a defendant or otherwise;
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7.1.6 communicate all or any of the Business Know-how to such
Employees of the Purchasers as the Purchasers may request;
7.1.7 keep confidential and not disclose or make use of, and cause
any of their directors, auditors and Employees to keep
confidential and not to disclose or make use of, any part of
any confidential information regarding PLL, PLL's business,
the Transferred Policies issued by PLL and/or the holders
thereof, as per the professional secrecy rules set out in
article 111-1 of the Luxembourg law of 6 December 1991 on the
insurance sector, as amended;
7.1.8 without prejudice to the generality of and except as otherwise
provided in this Clause 7.1 and excepting Intellectual
Property, Know-how or other information in the public domain
(otherwise than through unauthorised disclosure by the
Sellers), keep confidential and not disclose or make use of
any part of the Sellers' Intellectual Property to the extent
comprised in PLL and/or PLB;
7.1.9 do all things reasonably necessary to assist the Purchasers,
at the sole cost and expense of Purchasers, in the prosecution
of all applications to register the Intellectual Property
comprised in PLL and/or PLB (whether such applications are
outstanding at Closing or made thereafter by the Purchasers)
and to establish, confirm or defend title to the Intellectual
Property
7.1.10 retain for a period of ten (10) years from Closing any books,
records or other information relating to PLL and/or PLB which
are not delivered to the Purchasers pursuant this Agreement
and shall allow the Purchasers' reasonable access to such
books, records and information, provided that prior to any
access the Purchasers shall have given a confidentiality
undertaking in such terms as the Sellers may reasonably
require;
7.1.11 comply with their obligations under Clause 10.
8 WARRANTIES
8.1 The Sellers' Warranties
8.1.1 The Sellers warrant to the Purchasers on the date of signature
of this Agreement, that all the statements set out in Schedule
2 are true and accurate.
8.1.2 The Sellers acknowledge that the Purchasers have entered into
this Agreement in reliance upon the Sellers' Warranties.
8.1.3 Each of the Sellers' Warranties shall be separate and
independent and shall not be limited by reference to anything
in this Agreement.
8.2 Seller's Disclosures
The Sellers' Warranties are subject to the specific matters which are
fully and fairly disclosed in this Agreement, including Schedule 6,
provided that such matters are disclosed in sufficient detail to enable
the Purchasers to assess their impact on the transactions dealt with in
this Agreement.
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8.3 Notification
If after the signing of this Agreement and before Closing:
8.3.1 any Seller shall become aware that any of the Sellers'
Warranties was untrue or inaccurate in any material respect as
of the signing of this Agreement; or
8.3.2 any event shall occur or matter shall arise of which any
Seller becomes aware which results or may result in any of the
Sellers' Warranties being untrue or inaccurate in any material
respect at Closing,
the Sellers shall notify the Purchasers in writing as soon as
practicable and in any event prior to Closing setting out full details
of the matter and the Sellers shall make any investigation concerning
the event or matter and take such action, at their own cost, as the
Purchasers may reasonably require.
8.4 Updating of the Sellers' Warranties to Closing
Subject to Clause 8.2, the Sellers further warrant to, and undertake
with, the Purchasers that the Sellers' Warranties will be fulfilled
down to and will be true and accurate in all respects at, and given as
of, Closing as if they had been repeated at Closing.
8.5 The Seller's Waiver of Rights
Save in the case of fraud, each of the Sellers undertakes to each of
the Purchasers and to its respective directors, officers, agents and
employees to waive any rights, remedies or claims which it may have in
respect of any misrepresentation, inaccuracy or omission in or from any
information or advice supplied or given by PLL and/or PLB or their
respective directors, officers, agents or employees in connection with
assisting the Sellers in the making of any representation, the giving
of any Warranty or the preparation of Schedule 4.
8.6 Termination Rights
8.6.1 If prior to Closing, any Seller is in material breach of any
Sellers' Warranty, the Purchasers shall be entitled (in
addition to and without the right to claim damages) by notice
in writing to the Sellers to terminate this Agreement with
immediate effect if such breach (provided it can be cured) has
not been cured within ten days of actual knowledge thereof by
Sellers (other than Clauses 1, 11, 12 and 13).
8.6.2 Any failure by the Purchasers to exercise their right to
terminate this Agreement under Clause 8.6.1 shall not
constitute a waiver of any other rights of the Purchasers
arising out of any material breach of any Sellers' Warranty.
8.7 Sellers' Undertaking to Pay
8.7.1 Without limiting the rights of any Purchaser to claim damages
for breach of any Sellers' Warranty on any basis, the Sellers
agree and undertake with the Purchasers in the case of a
breach of any Sellers' Warranty, to pay in cash to the
Purchasers a sum equal to the amount necessary to put PLL
and/or the Transferred Portfolio into the position which would
have existed had the Sellers' Warranty been true and accurate,
together with all costs and expenses (including, without
limitation, legal fees, experts' fees and consultants' fees on
an
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indemnity basis and all costs and expenses incurred in the
recovery of the amounts payable under the claim for breach of
any Sellers' Warranty) incurred directly or indirectly as a
result of or in connection with the breach of any Sellers'
Warranty.
8.7.2 Without prejudice to Clause 8.7.1, where the nature of the
breach of the Sellers' Warranty or the effect of the breach of
the Sellers' Warranty is that:
(i) the value of an asset (including one warranted to
exist but not existing) of PLL and/or PLB is or
becomes less than its value would have been had there
been no breach of Sellers' Warranty or
(ii) PLL and/or PLB has or incurs any liability or
increase in liability which would not have been
incurred if there had been no breach of Sellers'
Warranty,
the Sellers shall be liable to pay, in accordance with Clause
8.7.1, the full amount of such deficiency or diminution in
value of the relevant asset or of the relevant liability or
increase in liability. Provided, however, that Sellers shall
not be required to provide compensation for such deficiency or
diminution in value hereunder unless and until the aggregate
amount of all damages subject to recompense under this Clause
exceeds one hundred fifty thousand Dollars of the United
States of America (USD 150,000.) with the exception of Tax
matters.
8.7.3 For the purpose of assessing the damages for any breach of the
Sellers' Warranty, the Sellers acknowledge that the Purchasers
enter into this Agreement with the intention that the business
comprised within PLL and the business of PLB transferred to
WOB will be continued as going concerns.
8.7.4 Clause 13,9 shall apply mutatis mutandis to this Clause 8.7 as
if Clause 8.7 provided for an indemnity.
8.8 The Purchasers' Warranties and Continuing Obligations
8.8.1 Each of the Purchasers warrants to each of the Sellers that
the statements set out in Schedule 3 are true and accurate.
8.8.2 Each of the Purchasers further warrants to each of the Sellers
that the statements set out in Schedule 3 will be fulfilled
down to and will be true and accurate in all respects at
Closing as if they had been repeated at Closing.
8.8.3 Each of the Purchasers' Warranties shall be separate and
independent and shall not be limited by reference to anything
in this Agreement.
8.8.4 The Purchasers shall retain any books, records or other
information relating to PLL and/or PLB for a period of ten
(10) years after the date of Closing which are not otherwise
retained by Sellers pursuant to this Agreement, and shall
allow the Sellers reasonable access to such books, records and
information for the purpose of allowing Sellers to defend
themselves against any claims relating to the operation of PLL
and/or PLB which they engaged in prior to Closing, provided
that prior to any access the Sellers shall have given a
confidentiality undertaking in such terms as the Purchasers
may reasonably require; this clause is subject to the
Purchasers always complying with any applicable legislation,
including without being limited to any applicable secrecy
rules.
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8.9 Survival, Limitations
8.9.1 The representations and warranties of the Parties hereto
contained in this Agreement or in any certificate, instrument
or document delivered pursuant hereto shall survive the
Closing until the second (2nd) anniversary of the Closing Date
(such anniversary, the "Survival Date"). From and after the
Survival Date, no Party hereto or any shareholder, director,
officer, Employee or affiliate of such Party shall be under
any liability whatsoever (whether pursuant to this Section 8
or otherwise) with respect to any such representation or
warranty, except with respect to matters as to which notice
has been received in accordance with Section 9.1.
8.9.2 With respect to tax matters, the representations and
warranties of the Parties hereto contained in this Agreement
shall survive the Closing until the expiration of all
applicable statutes of limitations (including all periods of
extension, whether automatic or permissive) in the case of the
representations and warranties of the Seller respectively set
forth in Section 12 of Schedule 2 of this Agreement.
8.9.3 Provided, however, that Sellers shall not be required to
provide indemnification hereunder unless and until the
aggregate amount of all damages subject to indemnification
under this Agreement exceeds one hundred and fifty thousand
Dollars of the United States of America (USD 150,000.) with
the exception of Tax matters.
8.9.4 Notwithstanding anything to the contrary contained herein, the
maximum amount that may be collected by Purchasers and their
affiliates and their respective officers, directors,
Employees, and agents as indemnification under this Agreement
shall not exceed fifty percent (50%) of the Purchase Price,
with the exception of Tax matters.
9 CLAIMS
9.1 Notification
If any Purchaser becomes aware of any matter or circumstances that may
give rise to a claim against any Seller, and has reasonable grounds for
believing that such claim is recoverable, for breach of any Sellers'
Warranty, the Purchasers shall within twenty (20) Business Days give a
notice in writing to the Sellers setting out full details such details
as are available of the specific matter or circumstances in respect of
which the claim is made, the grounds for believing that such claim is
recoverable and, if practicable, an estimate of the amount of Losses
which are, or are to be, the subject of the claim (including any Losses
which are contingent on the occurrence of any future event) in the
manner provided. Failure to give notice within twenty (20) Business
Days shall not prejudice any Purchaser except to the extent that the
Seller's liability is thereby increased.
9.2 Commencement of Proceedings
Any claim notified pursuant to Clause 9.1 shall (if it has not been
previously satisfied, settled or withdrawn) be deemed to be withdrawn
six (6) months after the notice is given to the Sellers pursuant to
Clause 9.1 unless legal proceedings in respect of it (i) have been
commenced by being both issued and served and (ii) are being and
continue to be pursued with reasonable diligence.
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9.3 Investigation by the Seller
In connection with any claim notified by the Purchasers pursuant to
Clause 9.1:
9.3.1 the Purchasers shall allow any Seller and its respective
financial, accounting or legal advisers to investigate the
matter or circumstance alleged to give rise to such claim and
whether and to what extent any amount is payable in respect of
such claim; and
9.3.2 the Purchasers shall give subject to their being paid all
reasonable third party costs and expenses, all such
information and assistance, including access to premises and
personnel, and the right to examine and copy or photograph any
assets, accounts, documents and records, as any Seller or its
respective financial, accounting or legal advisers may
reasonably request subject to the Purchasers always complying
with any applicable legislation, including without being
limited to any applicable secrecy rules, and subject to the
Sellers agreeing in such form as the Purchasers may require to
keep all such information confidential and to use it only for
the purpose of investigating and defending the claim in
question.
9.4 Procedure for Third Party Claims - Seller Control
If the claim notified pursuant to Clause 9.1 is a result of or in
connection with a claim by or liability to a third party then:
9.4.1 no admission of liability shall be made by or on behalf of any
Purchaser and the claim shall not be compromised, disposed of
or settled without the consent of the Sellers, (such consent
not to be unreasonably withheld or delayed);
9.4.2 subject to Clause 9.5 and subject to the Sellers indemnifying
the Purchasers against all Losses, the Sellers shall be
entitled at their own expense and in their absolute
discretion, by notice in writing to the Purchaser, for
themselves and as agent for the other Purchasers, to take such
action as they shall deem necessary to avoid, dispute, deny,
defend, resist, appeal, compromise or contest such claim or
liability (including, without limitation, making counterclaims
or other claims against third parties) in the name of and on
behalf of the Purchasers and to have the conduct of any
related proceedings, negotiations or appeals; and
9.4.3 the Purchasers shall give, subject to their being paid all
reasonable costs and expenses, all such information and
assistance including access to premises and personnel, and the
right to examine and copy or photograph any assets, accounts,
documents and records, as the Sellers may reasonably request
for the purpose referred to in Clause 9.4.2, including
instructing such professional or legal advisers as the Sellers
may nominate to act on behalf of the Purchasers, but in
accordance with the Seller's instructions;
9.4.4 the Sellers shall, or shall procure that, the Purchasers are
kept fully informed of all relevant matters relating to the
claim and shall promptly forward or procure to be forwarded to
the Purchasers copies of all correspondence and other written
communications relating to the claim; and
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9.4.5 the Sellers shall consult as fully as reasonably practicable
with the Purchasers in relation to the conduct of any
proceedings arising out of the claim and shall not make any
admission of liability, agreement, settlement or compromise
with any third party without the prior written consent of the
Purchasers (such consent not to be unreasonably withheld or
delayed).
9.5 Exception
The Sellers shall not be entitled to take the action referred to in
Clause 9.4.2, if the Purchasers reasonably consider that such action
may be unduly onerous or materially prejudicial to them or to their
business and the Purchasers notify the Sellers in writing clearly
stating their reasons to that effect within twenty (20) Business Days
of the Sellers' notification referred to in Clause 9.4.2.
9.6 Procedure for Third Party Claims - Purchaser Control
If the claim in question is a result of or in connection with a claim
by or liability to a third party then:
9.6.1 subject to Clause 9.7 and subject to the Sellers indemnifying
the Purchasers against all Losses which may be incurred, the
Purchasers shall take such action as the Sellers may
reasonably request to avoid, dispute, deny, defend, resist,
appeal, compromise or contest such claim;
9.6.2 the Purchasers may admit, compromise, dispose of or settle
such claim if the Sellers unreasonably delay making a request
pursuant to Clause 9.6.1, provided that the Purchasers have
notified the Sellers of their intention to deal with such
claim and have given the Sellers a period of twenty (20)
Business Days to respond;
9.6.3 if the Sellers make any request pursuant to Clause 9.6.1, the
Purchasers shall take all reasonable steps to procure that the
Sellers are provided on reasonable notice with all material
correspondence and documentation relating to the claim as the
Sellers may reasonably request subject to the Sellers agreeing
in such form as the Purchasers may require to keep all such
correspondence and information confidential and to use it only
for the purpose of dealing with the relevant claim.
9.7 Exception
Neither Sellers nor Purchasers shall be required to take any action,
which they reasonably consider may be unduly onerous or materially
prejudicial to them or to their business.
10 RESTRICTIONS ON THE SELLERS NON COMPETITION
10.1 Restrictions
The Sellers undertake with the Purchasers and PLL that the Sellers will
not and will procure that none of their related companies, such as
without being limited to any parent company, sister company and/or
subsidiary, their directors, officers and/or Employees, as well as the
directors, officers and/or Employees of their related companies,
including without being limited to any parent company, sister company
and/or subsidiary, will, and will procure that no person, firm or
company, carrying on with the consent of any Seller and business in
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succession to the Sellers, will, in any capacity during the Restricted
Period:
10.1.1 carry on, be engaged in or be economically interested in any
business which is of the same or similar type to the business
of PLL and/or PLB as now carried on and which is or is likely
to be in competition with any part of the business of PLL
and/or WOB as now carried on and as carried on immediately
after closing nor be concerned or interested in any such
business;
10.1.2 canvass or solicit the customer of any person, firm or company
who has within five years prior to Closing been a regular
customer in relation to a Restricted Activity; or
10.1.3 canvass or solicit the services of any person, firm or company
who has within five years prior to Closing been a regular
insurance intermediary of PLL and/or PLB; or
10.1.4 induce or seek to induce any present Restricted Employee to
become employed whether as employee, consultant or otherwise
by any of the Sellers, whether or not such Restricted Employee
would thereby commit a breach of his contract of service.
10.2 Interpretation
The following terms shall have the following meanings respectively in
this Clause 10:
10.2.1 "RESTRICTED ACTIVITY" means any business of selling
unit-linked insurance policies within Europe, which is now
carried on or which is directly competitive with the business
as now carried on by the Sellers in connection with PLL and/or
PLB;
10.2.2 "RESTRICTED EMPLOYEE" means any Employee who (a) has access to
trade secrets or other confidential information of the
Sellers; (b) has participated in discussions relating to the
transaction pursuant to this Agreement; or (c) is a Senior
Employee;
10.2.3 "RESTRICTED PERIOD" means five (5) years commencing on Closing
or such period of time recognised by applicable law as being
binding on the Sellers.
10.3 Reasonableness of Restrictions
The Sellers agree that the restrictions contained in this Clause are no
greater than are reasonable and necessary for the protection of the
interest of the Purchasers but if any such restriction shall be held to
be void but would be valid if deleted in part or reduced in
application, such restriction shall apply with such deletion or
modification as may be necessary to make it valid and enforceable.
10.4 Penalties
10.4.1 In case of breach of the Sellers' obligations under this
Clause 10, the Sellers must pay to the Purchasers a penalty in
the amount of twenty percent (20%) of the higher amount of all
premiums cashed by and the turn over of, the person, firm or
company that causes the Sellers to be in breach of the
provisions of this Clause 10, during the time period during
which such person, firm or company causes the Sellers to be in
breach thereof.
10.4.2 The Purchasers reserve the right to claim damages exceeding
the amount of penalty provided for in Clause 10.4.1 and
payment of any penalty under this Clause 10.4 shall not affect
the right of the Purchasers to require specific performance
from the Sellers.
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10.5 Exception for Continuing Operation of PLB
The Parties hereby agree and acknowledge that it is anticipated that
the Sellers will run off the existing business of PLB at the date of
signature of this Agreement that is not transferred to the Purchasers.
Accordingly, the provisions of Clauses 10.1 through 10.4 shall not
apply to the Sellers to the extent they are required to engage in any
actions contrary to such Clauses which are reasonably necessary in the
course of ordinary business to continue during a reasonable time period
to administer the policies of PLB existing at the date of signature of
this Agreement which are not part of the Transferred Portfolio in the
course of the above mentioned run off.
11 GUARANTEE
11.1 Sellers' Guarantee
11.1.1 The Sellers unconditionally and irrevocably guarantee to the
Purchasers and PLL the due and punctual performance and
observance of all their obligations, commitments,
undertakings, warranties and indemnities under or pursuant to
this Agreement or any Local Transfer Documents and Procedures
("Sellers' Guaranteed Obligations") and agree to indemnify the
Purchasers and/or PLL against all Losses which the Purchasers
may suffer through or arising from any breach by any of the
Sellers of the Sellers' Guaranteed Obligations.
11.1.2 If and whenever any of the Sellers defaults for any reason
whatsoever in the performance of any of the Sellers'
Guaranteed Obligations, the Sellers shall forthwith upon
demand unconditionally perform (or procure performance of) and
satisfy (or procure the satisfaction of) the Sellers'
Guaranteed Obligations in regard to which such default has
been made in the manner prescribed by this Agreement and so
that the same benefits shall be conferred on the Purchasers
and/or on PLL as they would have received if the Sellers'
Guaranteed Obligations had been duly performed and satisfied
by the Sellers.
11.1.3 The Sellers, subject to the terms and limitations contained in
Clause 8.9, further unconditionally and irrevocably agree to
indemnify the Purchasers and/or PLL against all Losses which
the Purchasers may suffer through or arising from:
(i) the Sellers and/or PLL having breached prior to
Closing, To The Knowledge of Sellers, any applicable
law, including without being limited to, any
regulatory requirements to conduct their business, to
operate as an insurance undertaking and/or to sell
their insurance products in the relevant
jurisdictions, and the professional secrecy rules set
out in article 111-1 of the Luxembourg law of 6
December 1991 on the insurance sector, such as
amended; and
(ii) the outstanding options granted to some of the
Employees of PLL.
11.1.4 This guarantee is to be a continuing guarantee and accordingly
is to remain in force until all Sellers' Guaranteed
Obligations shall have been performed or satisfied. This
guarantee is in addition to and without prejudice to and not
in substitution for any rights or security, which the
Purchaser may now or hereafter have or hold for the
performance and observance of the Sellers' Guaranteed
Obligations.
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11.1.5 As a separate and independent stipulation the Sellers agree
that any of the Sellers' Guaranteed Obligations (including,
without limitation, any moneys payable) which may not be
enforceable against or recoverable from any of the other
Sellers by reason of any legal limitation, disability or
incapacity on or of any of the Sellers or any other fact or
circumstances (other than any limitation imposed by this
Agreement or Local Transfer Documents and Procedures) shall
nevertheless be enforceable against and recoverable from the
Sellers as though the same had been incurred by the Sellers
and the Sellers were the sole or principal obligor in respect
thereof and shall be performed or paid by the Sellers on
demand.
11.1.6 The Liability of the Sellers under this Clause 11.1 shall not
be released or diminished by any variation of the Sellers'
Guaranteed Obligations or any forbearance, neglect or delay in
seeking performance of the Sellers' Guaranteed Obligations or
any granting of time for such performance and shall not be
affected or impaired by reason of any other fact or event
which in the absence of this provision would or might
constitute or afford a legal or equitable discharge or release
or a defence to the a guarantor.
11.2 Tax and Social Security Indemnity
The Sellers shall
11.2.1 indemnify the Purchasers against the reasonable costs of
preparing and filing any returns or declarations in respect of
all Taxes including corporate taxes, VAT, payroll taxes and
social security contributions, due by PLL, Xx Xxxxxxx, Xx
Xxxxxxx and Xx Xxxxxxxxx in the course of PLL's business run
at and immediately prior to the date of signature of this
Agreement, for all periods of assessment which end on or
before Closing as well as for all periods of assessment which
commence before and end after Closing, these costs being
determined by an independent tax adviser as agreed between
Sellers and Purchasers; for any returns or declarations with
respect to all periods of assessment commencing before and
ending after Closing, the costs of preparing and filing these
returns or declarations shall be split pro rata tempore
between the Purchasers and the Sellers considering the time
period before Closing and the time period after Closing;
11.2.2 pay directly or promptly reimburse the Purchasers and
indemnify and hold the Purchasers harmless against and from
all Taxes including penalties and late interest payments due
by PLL, Xx Xxxxxxx, Xx Xxxxxxx and Xx Xxxxxxxxx, for all
periods of assessment which end on or before the date of
signature of this Agreement and with respect to any period of
assessment commencing before that date and ending after that
date; any payment under this provision shall be made within
ten (10) Business Days of the formal notification of the tax
assessment by the Purchasers to the Sellers; any payment not
made within such time period shall be subject to an interest
charge of 6% percent per annum;
11.2.3 assist the Purchasers in preparing any returns or declaration
referred to in Clause 11.2.1 above; and
11.2.4 cooperate fully in preparing for any audits of, or disputes
with the tax authorities regarding any returns or declaration
filed or to be filed in respect of periods of assessments
referred to in Clause 11.2.1 above.
11.2.5 The provisions of this Section 11.2 shall be subject to the
right of the Sellers, upon the granting of prior notice to the
Purchasers of their intent to do so, to participate in and/or
contest or appeal, through appropriate procedural channels,
any proceedings
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with any taxation authority which has assessed or expressed
its intention to assess any tax or penalty referred to in
Clause 11.2.1 above, without however being authorised to take
any action regarding such proceedings without the prior
written approval from the Purchasers. The provisions of this
Section 11.2 shall be subject to the right of Sellers, upon
the granting of prior notice to Purchasers of their intent to
do so, as far as legal, to participate in and /or contest or
appeal, through appropriate procedural channels, any
proceedings with any taxation, authority which has assessed or
expressed its intention to assess any tax or penalty referred
to in Clause 11.2.1 above. Moreover, the Purchasers undertake
to challenge any assessment of taxes or intention to assess
any tax which may give rise to liability for reimbursement by
the Sellers by whatever tax authorities in any case where (1)
the Purchasers and the Sellers agree that the assessment may
be reasonably challenged and (2) the Purchasers intend to seek
indemnification from the Sellers.
11.3 Reputational Damage
11.3.1 DEFINITION
A "REPUTATIONAL DAMAGE" occurs on the side of the Purchasers when a
Credit Suisse Group unit or Employee is facing public outrage,
critique, allegations for supposedly violating applicable legislation,
governmental or para governmental regulations.
11.3.2 COMMITMENT OF SELLERS IN THE EVENT OF A REPUTATIONAL DAMAGE
In the event that the Purchasers suffer Reputational Damage based on an
occurrence related to the time prior to Closing as well as to the
transaction contemplated by this Agreement, the Sellers shall give any
necessary support to the Purchasers in order to prevent, reduce, or
limit the reputational damage of the Purchasers or any other Credit
Suisse Group unit or Employee, such as, without being limited to, by
assisting in the clarification of the facts or issuing respective media
statements or any other appropriate measures deemed to be necessary by
the Purchasers.
11.4 The Purchasers' Guarantee
11.4.1 The Purchasers unconditionally and irrevocably guarantee to
the Sellers the due and punctual performance and observance of
all their obligations, commitments, undertakings, warranties
and indemnities under or pursuant to this Agreement or any
Local Transfer Documents and Procedures (the "PURCHASERS'
GUARANTEED OBLIGATIONS").
11.4.2 If and whenever any of the Purchasers defaults for any reason
whatsoever in the performance of any of the Purchasers'
Guaranteed Obligations, the Purchasers shall forthwith upon
demand unconditionally perform (or procure performance of) and
satisfy (or procure the satisfaction of) the Purchasers'
Guaranteed Obligations with regard to which such default has
been made in the manner prescribed by this Agreement and so
that the same benefits shall be conferred on the Sellers as
they would have received if the Purchasers' Guaranteed
Obligations had been duly performed and satisfied by the
Sellers.
11.4.3 This guarantee is to be a continuing guarantee and accordingly
is to remain in force until all of the Purchasers' Guaranteed
Obligations shall have been performed or satisfied. This
guarantee is in addition to and without prejudice to and not
in substitution for any rights or security, which the Sellers
may now or hereafter have or hold for the performance and
observance of the Purchasers' Guaranteed Obligations.
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11.4.4 As a separate and independent stipulation the Purchasers agree
that any of the Purchasers' Guaranteed Obligations (including,
without limitation, any moneys payable) which may not be
enforceable against or recoverable from any of the other
Purchasers by reason of any legal limitation, disability or
incapacity on or of any of the Purchasers or any other fact or
circumstances (other than any limitation imposed by this
Agreement or Local Transfer Documents and Procedures) shall
nevertheless be enforceable against and recoverable from the
Purchasers as though the same had been incurred by the
Purchasers and the Purchasers were the sole or principal
obligor in respect thereof and shall be performed or paid by
the Purchasers on demand.
11.4.5 The liability of the Purchasers under Clause 11 shall not be
released or diminished by any variation of the Purchasers'
Guaranteed Obligations or any forbearance, neglect or delay in
seeking performance of the Purchasers' Guaranteed Obligations
or any granting of time for such performance and shall not be
affected or impaired by reason of any other fact or event
which in the absence of this provision would or might
constitute or afford a legal or equitable discharge or release
or a defence to the guarantor.
12 CONFIDENTIALITY
12.1 Announcements
No announcement or circular in connection with the existence or the
subject matter of this Agreement shall be made or issued by or on
behalf of any Seller or Purchaser or any member of the Seller's Group
or the Purchaser's Group without the prior written approval of the
Sellers and the Purchasers. This shall not affect any announcement or
circular required by law or any regulatory or other governmental body
or the rules of any recognised stock exchange on which the shares of
either party are listed but the party with an obligation to make an
announcement or issue a circular shall consult with the other party
insofar as is reasonably practicable before complying with such an
obligation.
12.2 Confidentiality
12.2.1
(i) Subject to Clause 12.1 and Clause 12.2.3, each of the
Sellers and Purchasers shall, and shall procure that
its respective parent companies and/or subsidiaries,
if any, shall, treat as strictly confidential and not
disclose or use any information received or obtained
as a result of entering into this Agreement (or any
agreement entered into pursuant to this Agreement)
which relates to:
(a) the provisions of this Agreement and any
agreement entered into pursuant to this
Agreement;
(b) the negotiations relating to this Agreement
(and any such other agreement); or
(ii) Without prejudice to Clause 7.1.5, each of the
Sellers shall and shall procure that its respective
subsidiaries shall, treat as strictly confidential
and not disclose or use any information relating to
the Purchasers' and their respective subsidiaries'
business, financial or other affairs (including
future plans and targets).
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(iii) Without prejudice to Clause 7.1.5, each of the
Purchasers shall and shall procure that its
respective subsidiaries shall, treat as strictly
confidential and not disclose or use any information
relating to the Sellers' and their respective
subsidiaries' business, financial or other affairs
(including future plans and targets).
12.2.2 Clause 12.2.1 shall not prohibit disclosure or use of any
information if and to the extent:
(i) the disclosure or use is required by law, any
regulatory body or any recognised stock exchange on
which the shares of either Party are listed;
(ii) the disclosure or use is required to vest the full
benefit of this Agreement in either Party;
(iii) the disclosure or use is required for the purpose of
any judicial proceedings arising out of this
Agreement or any other agreement entered into under
or pursuant to this Agreement or the disclosure is
made to a Tax Authority in connection with the Tax
affairs of the disclosing party;
(iv) the disclosure is made to professional advisers of
the Sellers or the Purchasers on terms that such
professional advisers undertake to comply with the
provisions of Clause 12.2.1 in respect of such
information as if they were a party to this
Agreement;
(v) the information becomes publicly available (other
than by breach of this Agreement);
(vi) the other party has given prior written approval to
the disclosure or use; or
(vii) the information is independently developed after
Closing,
provided that prior to disclosure or use of any information
pursuant to Clause 12.2.2(i), (ii) or (iii), the Party
concerned shall promptly notify the other relevant Party of
such requirement with a view to providing the other party with
the opportunity to contest such disclosure or use or otherwise
to agree the timing and content of such disclosure or use.
12.2.3 On each Closing, the Sellers shall assign to the Purchasers,
to the extent permitted by the terms of the relevant
agreement, the benefit of any confidentiality agreements
entered into by the Sellers in relation to PLL and/or PLB.
12.3 Return of Documents
If Closing does not take place by 30 September 2002 or such later date
as the Sellers and Purchasers may agree, the Purchasers shall, subject
to the Purchasers always complying with any applicable legislation,
forthwith make reasonable efforts to:
12.3.1 return all written information of or relating to the Sellers
and PLL provided to the Purchasers or their advisers (the
"CONFIDENTIAL INFORMATION") which is in the Purchasers'
possession or under the custody and control of the Purchasers
without keeping any copies thereof;
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12.3.2 destroy all information, analyses, compilations, notes,
studies, memoranda or other documents derived from, containing
or reflecting Confidential Information; and
12.3.3 so far as it is practicable to do so (but, in any event,
without prejudice to the obligations of confidentiality
contained in this Agreement,) expunge any confidential
information from any computer, word processor or other device
in the Purchasers' possession or under the Purchasers' custody
and control.
13 OTHER PROVISIONS
13.1 Further Assurances
Each of the Parties shall from time to time execute such documents and
perform such acts and things as any other Party may reasonably require
to transfer the Shares and the Transferred Portfolio to the Purchasers
and to give any party the full benefit of this Agreement and any Local
Transfer Documents and Procedures.
13.2 Whole Agreement
13.2.1 This Agreement contains the whole agreement between the
Sellers and Purchasers relating to the subject matter of this
Agreement at the date hereof to the exclusion of any terms
implied by law which may be excluded by contract and
supersedes any previous written or oral agreement between the
Sellers and Purchasers in relation to the matters dealt with
in this Agreement.
13.2.2 Each of the Purchasers acknowledges that it has not been
induced to enter this Agreement by any representation,
warranty or undertaking not expressly incorporated into it.
13.2.3 So far as is permitted by law and except in the case of fraud,
each of the Sellers and Purchasers agrees and acknowledges
that its only right and remedy in relation to any
representation, warranty or undertaking made or given in
connection with this Agreement shall be for breach of the
terms of this Agreement to the exclusion of all other rights
and remedies (including those in tort or arising under
statute).
13.2.4 In Clauses 13.2.1 to 13.2.3, "this Agreement" includes all
documents entered into pursuant to this Agreement.
13.3 Successors and Assigns
13.3.1 Subject to Clause 13.3.2, this Agreement is personal to each
of the Sellers and Purchasers to it. Accordingly, no Purchaser
and no Seller may, without the prior written consent of the
other Sellers and Purchasers, assign, hold on trust or
otherwise transfer the benefit of all or any of the other's
obligations under this Agreement, nor any benefit arising
under or out of this Agreement.
13.3.2 Except as otherwise expressly provided in this Agreement, a
Seller or Purchaser may, without the consent of the other
Sellers and Purchasers, assign to a subsidiary the benefit of
all or any of the other Party's obligations under this
Agreement provided however that such assignment shall not be
absolute but shall be expressed to have effect only for so
long as the assignee remains a subsidiary of the Party
concerned.
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13.3.3 For the avoidance of doubt, any Purchaser shall continue to be
entitled to claim against any Seller for breach of this
Agreement, if the Purchasers disposed of any part of the
Shares and/or the Transferred Portfolio after the date of this
Agreement or ceased to be the owner of any part of the Shares
and/or the Transferred Portfolio.
13.4 Variation
No variation of this Agreement shall be effective unless in writing and
signed by or on behalf of each of the Sellers and Purchasers to this
Agreement.
13.5 Time of the Essence
Time shall be of the essence of this Agreement both as regards any
dates, times and periods mentioned and as regards any dates, times and
periods that may be substituted for them in accordance with this
Agreement or by agreement in writing between the Sellers and
Purchasers.
13.6 Method of Payment
13.6.1 Wherever in this Agreement provision is made for the payment
by one Party to another, such payment shall be effected net of
any banking fees or charges for the beneficiary by crediting
for same day value the account specified by the Party entitled
to the payment (reasonably in advance and in sufficient detail
to enable payment by telegraphic or other electronic means to
be effected) on or before the due date for payment.
13.6.2 Payment of such sum shall be a good discharge to the payer
(and those on whose behalf such payment is made) of its
obligation to make such payment and the payer (and those on
whose behalf such payment is made) shall not be obliged to see
to the application of the payment as between those on whose
behalf the payment is received.
13.6.3 Without prejudice to Clauses 13.6.1 and 13.6.2, wherever in
this Agreement provision is made for a payment by any Seller
to any Purchaser such payment shall be made by the Seller for
itself and as agent for the other Sellers to the Purchaser for
itself and as agent for the other Purchasers.
13.6.4 Without prejudice to Clauses 13.6.1 and 13.6.2, wherever in
this Agreement provision is made for a payment by any
Purchaser to any Seller such payment shall be made by the
Purchaser for itself and as agent for the other Purchasers to
the Seller for itself and as agent for the other Sellers.
13.7 Costs
13.7.1 The Sellers shall bear all costs incurred by them in
connection with the preparation, negotiation and execution of
this Agreement, the Local Transfer Documents and Procedures
and the sale of the Shares and the Transferred Portfolio.
13.7.2 The Purchasers shall bear all such costs incurred by them in
connection with the preparation, negotiation and execution of
this Agreement, the Local Transfer Documents and Procedures
and the purchase of the Shares and the Transferred Portfolio.
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13.8 Interest
If any Seller or any Purchaser defaults in the payment when due of any
sum payable under this Agreement, the Local Transfer Documents and
Procedures (howsoever determined), the liability of the Sellers or the
Purchasers (as the case may be) shall be increased to include interest
on such sum from the date when such payment is due until the date of
actual payment (as well after as before judgment) at a rate per annum
of one per cent (1%) above LIBOR from time to time. Such interest shall
accrue from day to day and shall be compounded with monthly rests.
13.9 Grossing-up of Indemnity Payments, VAT
13.9.1 Where any payment is made under this Agreement pursuant to an
indemnity, compensation or reimbursement provision and that
sum is subject to a charge to Taxation in the hands of the
recipient (other than Taxation attributable to a payment being
properly treated as an adjustment to the consideration paid by
the Purchasers) the sum payable shall be increased to such sum
as will ensure that after payment of such Taxation (and after
giving credit for any tax relief available to the recipient in
respect of the matter giving rise to the payment) the
recipient shall be left with a sum equal to the sum that it
would have received in the absence of such a charge to
taxation.
13.9.2 Where any sum (the "INDEMNITY SUM") constituting an indemnity,
compensation or reimbursement to any Party is paid to a person
other than the Party but is treated as taxable in the hands of
the Party the payer shall promptly pay to the Party such sum
as shall reimburse the Party for all Taxation suffered by it
in respect of the payment (after giving credit for any tax
relief available to the Party in respect of the matter giving
rise to the payment).
13.9.3 Where under the terms of this Agreement one Party is liable to
indemnify or reimburse another Party in respect of any costs,
charges or expenses, the payment shall include an amount equal
to any VAT thereon not otherwise recoverable by the other
Party, subject to that Party using all reasonable endeavours
to recover such amount of VAT as may be practicable.
13.10 Notices
13.10.1 Any notice, claim or demand in connection with this Agreement
shall be in writing (a "Notice") and shall be sufficiently
given or served if delivered or sent:
in the case of any of the Sellers to:
STANDARD MANAGEMENT CORPORATION,
Indianapolis (U.S.A.), Indiana 46280, 00000 X. Xxxxxxxxxxxx
Fax: x0-000-000-0000
Attention: Xx Xxxxxx X. Xxxxxx, Chairman, President & CEO
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With a copy to: Xx Xxxxxxx X. Xxxxx
Indianapolis (U.S.A.), Indiana 46280, 10689 N. Pennsylvania
Fax: (000) 000-0000
in the case of any of the Purchasers and/or PLL to:
WINTERTHUR LIFE,
XX-0000 Xxxxxxxxxx (Xxxxxxxxxxx), Xxxxxxxxxxxxxx 00,
Fax: x00-00-000-0000
Attention: Xx Xxxxx Xxxxxxx and Xx Xxxxxx Xxxxx
or to such other address, fax number or addressee as is
notified in writing by the Sellers or the Purchasers to the
other.
13.10.2 Any Notice may be delivered by hand or, sent by courier, fax
or registered letter. Without prejudice to the foregoing, any
Notice shall conclusively be deemed to have been received on
the next working day in the place to which it is sent, if sent
by courier or fax, or 60 hours from the time of posting, if
sent by registered letter, or at the time of delivery, if
delivered by hand.
13.11 Invalidity
If any provision in this Agreement shall be held to be illegal, invalid
or unenforceable, in whole or in part, under any enactment or rule of
law, such provision or part shall to that extent be deemed not to form
part of this Agreement but the legality, validity or enforceability of
the remainder of this Agreement shall not be affected.
13.12 Counterparts
This Agreement is entered into in as many originals as are Parties to
this Agreement, all of which are signed by all Parties and all of
which, taken together, shall constitute one and the same instrument.
Each of the Parties declares to have received one executed original.
13.13 Governing Law and Submission to Jurisdiction
13.13.1 This Agreement and the documents to be entered into pursuant
to it, save as expressly referred to therein, shall be
governed by and construed in accordance with Luxembourg law.
13.13.2 The Sellers and Purchasers irrevocably agree that the courts
of Luxembourg-City are to have exclusive jurisdiction to
settle any dispute which may arise out of or in connection
with this Agreement and the documents to be entered into
pursuant to it and that accordingly any proceedings arising
out of or in connection with this Agreement and the documents
to be entered into pursuant to it shall be brought in such
courts. The Sellers and Purchasers irrevocably submit to the
jurisdiction of such courts and waive any objection to
proceedings
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in any such court on the ground of venue or on the ground that
proceedings have been brought in an inconvenient forum.
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IN WITNESS whereof this Agreement has been duly executed.
SIGNED BY Xx. Xxxxxxx Xxxxx
Executive Vice President and Secretary }
on behalf of Standard Management Corporation
SIGNED by Xx. Xxxxxxx Xxxxx,
Manager, and Xx. Xxxxxxx Xxxxxxx,
Manager, }
on behalf of Standard Management
International S.ar.I
SIGNED BY Xx. Xxxxxxx Xxxxx
Executive Vice President and Secretary }
on behalf of Standard Management Financial
Corporation
SIGNED by Xx. Xxxxxxx Xxxxxxx,
Managing Director, }
on behalf of Premier Life (Bermuda) Ltd.
SIGNED by Xx. Xxxxx Xxxxxxx,
Executive Board Member [Operations]
and Xx. Xxxxxx Xxxxx, Head of Cross }
Border Business,
on behalf of Winterthur Life
SIGNED by Xx Xxxxx Xxxxxxx
Executive Board Member [Operations]
and Xx Xxxxxx Xxxxx, Head of Cross }
Border Business,
on behalf of Winterthur Life
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SCHEDULE 1
CLOSING OBLIGATIONS
SELLERS' GENERAL OBLIGATIONS
On each Closing, each of the Sellers shall deliver or make available to
the Purchasers or as the Purchasers may direct the following:
1.1.1 evidence of the due fulfilment of the conditions set out in
Clause 4 for which the Sellers are responsible;
1.1.2 evidence that the Sellers are authorised to execute this
Agreement;
1.1.3 evidence that the Sellers are authorised to execute and/or
fulfil the Local Transfer Documents and Procedures;
1.1.4 one or several legal opinions from the Sellers' local counsel
stating with respect to each of them as well as PLL that:
(i) each of the Sellers has been validly incorporated, is
duly organised and is existing under its applicable
laws;
(ii) each of the Sellers has the corporate power to enter
into and perform this Agreement as well as any Local
Transfer Documents and Procedures;
(iii) each of the Sellers has taken all necessary corporate
action to authorise its entry into and performance of
this Agreement as well as any Local Transfer
Documents and Procedures;
(iv) this Agreement as well as any Local Transfer
Documents and Procedures have been validly signed by
each of the Sellers.
(v) all governmental or regulatory consents, approvals or
authorisations required by each of the Sellers under
the applicable law for its entry into and performance
of this Agreement have been obtained;
(vi) under any applicable law, there are no registration,
filing or similar formalities required to ensure the
validity, binding effect and enforceability against
each of the Sellers of this Agreement as well as any
Local Transfer Documents and Procedures;
(vii) the entry into and performance of this Agreement as
well as any Local Transfer Documents and Procedures
by each of the Sellers does neither violate any
applicable law nor the relevant constitutive
documents of each of the Sellers;
(viii) under any applicable law, the choice of Luxembourg
law as the governing law of the Agreement will be
recognised in the applicable jurisdiction and
accordingly Luxembourg law governs the validity,
binding effect and enforceability against each of the
Sellers of the Agreement;
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(ix) a final and conclusive judgement for the payment of
money rendered by a court in Luxembourg which is
enforceable in Luxembourg will be recognised and
enforceable by any applicable courts without review
of its merits;
(x) no stamp duty or ad valorem registration or similar
tax is payable under any applicable law in connection
with the parties entering into this Agreement.
2 TRANSFER OF SHARES AND TRANSFERRED PORTFOLIO
2.1 GENERAL OBLIGATIONS
On each Closing, the Sellers and the Purchasers shall execute Local
Transfer Documents and Procedures as required to validly sell the
Shares and validly assign and transfer the Transferred Portfolio as
agreed under this Agreement.
2.2 SPECIFIC OBLIGATIONS
2.2.1 For the purposes of compliance with paragraph 2.1 as it
relates to the purchase of the Shares, the Sellers shall
deliver or make available to the Purchasers the following:
(i) evidence that the conditions precedents set out in
Clause 4.1 of the Agreement which are of the Sellers'
responsibility are met;
(ii) the shareholders register of PLL reflecting the
transfer of the Shares to WLP and the cancellation of
the share certificates issued to SMI and Xx Xxxxxxx
in a form complying with applicable law;
(iii) a share certificate in the name of WLP reflecting the
registration in PLL's shareholders register of WLP as
shareholder of PLL in a form complying with
applicable law,
(iv) confirmation from the CAA, that the new shareholders
of PLL are accepted;
(v) all books, records, minutes and documents, all
information relating to customers, suppliers, agents
and distributors and all other information in the
possession or control of the Sellers relating
exclusively or primarily to PLL as the Purchasers may
reasonably require; and
(vi) such other documents as the Purchasers may reasonably
request
2.2.2 For the purposes of compliance with paragraph 2.1 as it
relates to the assignment and transfer of the Transferred
Portfolio, the Sellers shall deliver or make available to the
Purchasers the following:
(i) evidence that the conditions precedents set out in
Clause 4.2 of the Agreement which are of the Sellers'
responsibility are met;
(ii) copies of the Transferred Policies;
(iii) all verification documents in the Sellers' possession
pertaining to the policyholders and beneficiaries of
the PLB Transferred Policies;
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(iv) sufficient access to information to enable the
Purchasers to cause to be prepared an independent
actuarial report on the Transferred Portfolio;
(v) evidence of the revocation of all mandates to bankers
in respect of any accounts connected to the
Transferred Portfolio and the giving of authority to
such persons as the Purchasers may nominate to
operate the bank accounts thereof; and
(vi) such other documents as the Purchasers may reasonably
request.
2.2.3 The Parties agree to terminate the Service Agreement, which
exists between PLL and PLB at the date of signature of this
Agreement, regarding insurance services to be provided by PLL
to PLB with immediate effect at Closing of the assignment and
transfer of the Transferred Portfolio.
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SCHEDULE 2
WARRANTIES GIVEN BY EACH OF THE SELLERS
CORPORATE INFORMATION
1.1 THE SHARES AND PLL
1.1.1 At Closing, SMI will be the sole owner of the Shares and have
the right to exercise all voting and other rights over the
Shares.
1.1.2 The Shares comprise the whole of the issued and subscribed
share capital of PLL, have been properly and validly issued
and subscribed and are each fully paid.
1.1.3 No person has the right (whether exercisable now or in the
future and whether contingent or not) to call for the
subscription conversion, issue, registration, sale or
transfer, amortisation or repayment of any share capital or
any other security giving rise to a right over, or an interest
in, the capital of PLL under any option, agreement or other
arrangement (including conversion rights and rights of
pre-emption).
1.1.4 There are no Encumbrances on the Shares.
1.1.5 All consents for the transfer of the Shares have been obtained
or will be obtained by Closing.
1.1.6 The Shares are not listed on any stock exchange or regulated
market.
1.1.7 PLL:
(i) has no interest in, or has not agreed to acquire, any
share capital or other security of any other company
(wherever incorporated); or
(ii) has any branch, division, establishment or operations
outside the jurisdiction in which it is incorporated.
1.1.8 The particulars contained in Schedule I are true and accurate.
1.2 CORPORATE REGISTERS AND MINUTE BOOKS OF PLL
1.2.1 The registers and minute books required to be maintained by
PLL under applicable law:
(i) are up-to-date;
(ii) are maintained in accordance with applicable law; and
(iii) contain complete and accurate records of all matters
required to be dealt with in such books and records,
in each case in all material respects.
1.2.2 All such registers and books are in the possession (or under
the control) of PLL and no notice or allegation that any of
such books and records is incorrect or should be rectified has
been received.
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1.2.3 All filings, publications, registrations and other formalities
required by applicable law to be delivered or made by PLL to
company registries in each relevant jurisdiction have been
duly delivered or made on a timely basis.
2 ACCOUNTS
2.1 AUDITED ACCOUNTS
PLL's Audit Accounts and PLB's Audit Accounts:
2.1.1 have been prepared in accordance with lAS (International
Auditing Standards) and any applicable accounting rules of
Luxembourg law, in the case of PLL's Audit Accounts, and UK
GAAP, in the case of PLB's Audit Accounts, applied on a
consistent basis; and
2.1.2 fairly present in all material respects the state of affairs
of PLL and PLB respectively for the period ended 30 September
2001.
2.2 MANAGEMENT ACCOUNTS
So far as the Sellers are aware, PLB's Management Accounts and PLL's
Management Accounts have been fairly prepared in accordance with
accounting policies consistent with those used in preparing the PLB's
Audit Accounts and the PLL's Audit Accounts respectively. PLB's
Management Accounts and PLL's Management Accounts fairly present the
assets, liabilities and state of affairs of PLB and PLL respectively as
at 31 March 2002 and the profits or losses for the period concerned in
all material respects.
3 FINANCIAL OBLIGATIONS
3.1 FINANCIAL FACILITIES
3.1.1 Except as disclosed in Schedule 4, there are no loan,
overdraft and other financial facilities outstanding or
available to PLL.
3.1.2 There are no loan, overdraft and other financial facilities
made by PLL.
3.2 GUARANTEES
Except as disclosed in Schedule 4, there is not outstanding guarantee,
indemnity or surety ship, security or comfort (whether or not legally
binding) given by or for the benefit of PLL.
3.3 LIABILITY FOR DEBTS OF OTHERS
PLL cannot, by virtue of any act or omission as director, shadow
director or "de facto" manager of another entity, be liable to pay all
or part of the debts of that other entity.
3.4 OFF-BALANCE SHEET FINANCING
PLL has not factored, discounted or securitised any of its debts, nor
engaged in any financing of a type which would not be required to be
shown or reflected in the PLL's Accounts or borrowed any money which it
has not repaid.
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3.5 GRANTS AND SUBSIDIES
3.5.1 PLL has not received any EC, government, regional, federal,
state or local authority investment grants, loan subsidies or
financial aid, nor have such investment grants, loan subsidies
or financial aid been pledged to it and no applications for
EC, government, regional, federal, state or local authority
investment grants, loan subsidies or financial aid have been
made during that period.
3.5.2 The entering into, and the performance of, this Agreement and
any of the documents to be entered into pursuant to or in
connection with this Agreement, will not result in the forfeit
or repayment of any grant, subsidy or financial aid received
by and/or pledged to PLL.
4 ASSETS
4.1 THE PROPERTIES
There are no material premises, buildings land or other property rights
owned by PLL
4.2 LEASES
Where any property is leased by PLL:
4.2.1 the requisite details have been disclosed in Schedule 4;
4.2.2 there is no material subsisting breach, nor any material
non-observance of any covenant, condition or agreement
contained in the lease under which PLL holds its interest in
the property, on the part of the relevant landlord or PLL;
4.2.3 there is no right for the landlord to terminate the lease
before the expiry of the contractual term; and
4.2.4 all steps in rent reviews have been duly taken and no rent
reviews are or should be currently under negotiation or the
subject of a reference to an expert or arbitrator in the
courts.
4.3 OWNERSHIP OF ASSETS
Excepting only rights and retention of title arrangements arising by
operation of law in the ordinary course of business:
4.3.1 PLL and PLB respectively have full and unrestricted title to
the Assets;
4.3.2 none of the Assets is the subject of an Encumbrance or the
subject of any factoring arrangement, conditional sale or
credit agreement.
4.4 SUFFICIENCY OF ASSETS
So far as the Sellers are aware, the Assets comprise all the property,
rights and assets necessary for the carrying on of the business of PLL
in the manner in, and to the extent to, which it is presently
conducted. No such property, right or asset will be adversely affected
by the transaction contemplated by this Agreement.
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5 INTELLECTUAL PROPERTY AND INFORMATION TECHNOLOGY
5.1 OWNERSHIP
Subject to any disclosures to the contrary given by Seller in Schedule
4, all Intellectual Property (whether registered or not) and all
pending applications therefore which have been, are, or are capable of
being used in or in relation to or which are necessary for the business
of PLL and the business carried out by PLB on and immediately prior to
the date of signature of this Agreement are (or, where appropriate in
the case of pending applications, will be):
5.1.1 legally and beneficially owned by PLL and PLB respectively or
lawfully used with the consent of the owner under a licence,
brief details of which are set out Schedule 4 and, as the case
may be, transferred to WOB under this Agreement;
5.1.2 valid and binding;
5.1.3 not being infringed or attacked or opposed by any person;
5.1.4 not subject to any Encumbrance or any licence or authority in
favour of another
5.1.5 in the case of rights in Registered Intellectual Property all
renewal fees which are due and steps which are required for
their maintenance and protection have been paid and taken;
and no claims have been made and no applications are pending, which if
pursued or granted might be material to the truth and accuracy of any
of the above.
5.2 PROCESSES ETC.
So far as the Sellers are aware, the principal processes employed and
the principal products and services dealt in by PLL and/or PLB at the
date of signature of this Agreement do not infringe any rights or
interests of third parties in Intellectual Property (other than those
belonging to or licensed to PLL and PLB respectively and referred to in
Schedule 4) and no claims of infringement of any such rights or
interests have been made by any third party.
5.3 LICENCES
The several licences and agreements (including all amendments,
novations, supplements or replacements to those licences and
agreements), brief details of which are set out in Schedule 4, are in
full force and effect, no notice having been given on either side to
terminate them; the obligations of all parties have been fully complied
with; and no disputes have arisen or are foreseeable in respect
thereof; and where such licences are of such a nature that they could
be registered with the appropriate authorities and where such
registration would have the effect of strengthening the relevant rights
of PLL and WOB, they have been so registered. The transaction
contemplated by this Agreement will not lead to any breach or right of
termination of any such licence.
5.4 KNOW-HOW
There has been and is no misuse of Know-how by any PLL and/or PLB and
the Sellers have not made any disclosure of Know-how to any person
other than to the Purchasers except properly and in the ordinary course
of business and on the basis that such disclosure is to be treated as
being of a confidential character.
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5.5 CONFIDENTIALITY
Neither PLL nor PLB is a party to a secrecy agreement or an agreement,
which restricts the use or disclosure of information. Neither PLL nor
PLB are in breach of any duty of confidentiality owed to any person
through ownership or use of any Intellectual Property or Know-how and
neither the sale of the Shares, nor the assignment and transfer of the
Transferred Portfolio nor the disclosure of any confidential
information to the Purchasers will constitute a breach of any duty of
confidentiality owed to any person.
5.6 Patents and Employee Rights
All patentable inventions made by Employees of PLL and/or PLB and used
or intended to be used in the business of PLL and PLB respectively were
made in the normal course of the duties of the Employees concerned and
there are no outstanding or potential claims against any of PLL and/or
PLB under any contract or under any law providing for employee
compensation or ownership in respect of any rights or interests in
Intellectual Property.
5.7 INFORMATION TECHNOLOGY
5.7.1 In the event that the persons providing maintenance or support
services for the Information Technology cease or are unable to
do so, PLL and/or PLB have and WOB will have up from Closing
all the necessary rights and information to continue to
maintain, develop and support and/or have a third party
maintain, develop and support the Information Technology. All
documentation which is currently in Sellers' possession with
respect to Information Technology, including without being
limited to the LIFEit system, shall be transferred to
Purchasers for their use in future development of the
Information Technology, without however, the Sellers
representing or warranting that such documentation will be
adequate for the purposes of Purchasers' anticipated future
development.
5.7.2 Each of PLL and/or PLB has in place procedures to help prevent
unauthorised access, the introduction of viruses, taking and
storing on-site and off-site back-up copies of the software
and data.
5.7.3 Details of material Information Technology and details of all
material agreements or arrangements relating to the
maintenance and support, security, disaster recovery,
management and utilisation (including escrow arrangements
relating to the deposit of source codes, facilities management
and computer bureau services agreements) of the Information
Technology are disclosed in Schedule 4.
5.7.4 On the date of signature of this Agreement, the Information
Technology is adequate to fulfil the requirements of PLL's and
PLB's operation post-Closing in the manner and to the extent
to which it is being conducted on and immediately prior to the
date of signature of this Agreement. Pursuant to their
responsibilities under Section 7.1.1 through 7.1.3 of the
Agreement, Sellers will provide the appropriate Resources,
introductions to consultants and introductions to Information
Technology owners and/or licensors so as to allow Purchasers
to accomplish any additional development of the Information
Technology in exchange for the fees therein contemplated.
5.7.5 The Information Technology and each component of it is fully
adapted to handle operations in the Euro (the currency
introduced on 1 January 1999 pursuant to the treaty
establishing the European Community), to convert data in
connection with the introduction of the Euro and comply with
the rules on conversion and rounding set out in EC Regulation
number 1103/97 or any legislation adopting or incorporating
that Regulation.
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5.7.6 Neither the performance nor functionality (including the
processes and results) of the Information Technology or of the
systems licensed by PLL and/or PLB to third parties is, has
been or will be, affected by the occurrence and/or passage of
any calendar dates. In particular, such Information Technology
will be able to:
(i) distinguish, store and process any past, present and
future calendar dates;
(ii) accept data and data input, and provide output; and
(iii) function accurately and without interruption, each
irrespective of the occurrence and/or passing any
given date, without any change in operations.
5.8 DATA PROTECTION
5.8.1 Each Seller as well as PLL have complied in all material
respects with applicable requirements (including registration
requirements) of appropriate data protection legislation.
5.8.2 No notice or allegation has been received by any Seller or PLL
from any competent authority alleging non-compliance with any
applicable data protection legislation.
5.8.3 Neither any Seller nor PLL has received a claim for
compensation from any individual in respect of inaccuracy,
loss, unauthorised destruction or unauthorised disclosure of
data in the previous 2 years and there is no outstanding order
against either any Seller or PLL in respect of the
rectification or erasure of data and no grounds exist for any
individual to claim compensation from PLL of from any Seller
for loss or unauthorised disclosure of personal data.
6 Contracts
6.1 CONTRACTS
As at the date of this Agreement, PLL is not party to or subject to any
contract, transaction, arrangement, understanding, obligation or
liability, which:
6.1.1 is not in the ordinary course of business;
6.1.2 is not wholly on an arm's length basis; or
6.1.3 is of an unusual long-term nature.
6.2 JOINT VENTURES
PLL has not agreed to become, a member of any joint venture,
consortium, partnership or other unincorporated association.
6.3 AGREEMENTS WITH CONNECTED PARTIES
6.3.1 There are no existing contracts or arrangements between two or
several Sellers, PLL and/or any shareholder of any of the
Sellers or any other member of the Sellers' group other than
those disclosed in Schedule 4.
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6.3.2 Neither any of the Sellers, nor PLL is or has been party to
any contract, arrangement or understanding with any current or
former Employee or current or former director or any current
or former consultant of any of the Sellers of PLL or any
person connected (as defined by applicable law in the relevant
jurisdiction) with any of such persons, or in which any such
person is interested (whether directly or indirectly), other
than on normal commercial terms in the ordinary course of
business.
6.4 COMPLIANCE WITH AGREEMENTS
As at the date of this Agreement,
6.4.1 all the material contracts to which PLL is a party are valid
and binding obligations of the parties thereto and the terms
thereof have been complied with in all material respects with
by PLL and by any other party to such contracts.
6.4.2 no notice of termination or of intention to terminate has been
received in respect of any such material contracts and there
are no grounds for rescission, avoidance or repudiation of any
of such material contracts.
6.5 LOCATION OF CONTRACTS
All contracts to which PLL is a party are in the possession (or under
the control) of PLL and will be physically handed over to the
Purchasers on Closing.
6.6 CHANGE OF CONTROL
To The Knowledge of Sellers, the entering into, and the performance of,
this Agreement and the other documents to be entered into pursuant to
or in connection with this Agreement, will not:
6.6.1 result in a breach of, or
6.6.2 give any third party a right to terminate or vary, or
6.6.3 result in the creation of any Encumbrance under,
any contract to which PLL and/or PLB is a party other than an insurance
policies issued by PLL and/or PLB and except as otherwise disclosed in
Schedule 4.
7 EMPLOYEES AND EMPLOYEE BENEFITS
7.1 EMPLOYEES AND TERMS OF EMPLOYMENT
Schedule 4 contains details, in relation to PLL of:
7.1.1 the total number of Employees (including those who are on
maternity or paternity or parental leave or absent on the
grounds of disability or other long-term leave of absence, and
have or may have a statutory or contractual right to return to
work with PLL);
7.1.2 date of commencement of employment, period of continuous
employment, location, salary
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and other benefits, grade and age of each Employee;
7.1.3 the terms of the contract of employment of each Employee and
specimen terms and conditions of each grade or category of the
relevant Employee; and
7.1.4 the terms of all Consultancy Agreements.
7.2 TERMINATION OF EMPLOYMENT
7.2.1 No current Employee or consultant of PLL has given or received
notice terminating his or her employment or consultancy, other
than those disclosed in Schedule 4.
7.2.2 There have been no proposals to terminate, or materially amend
the employment or consultancy (as the case may be) of any
Employee or Consultant other than those disclosed in Schedule
4.
7.2.3 No liability which remains undischarged has been or may be
incurred by PLL for breach of any contract of employment or
consultancy with any Employee or consultant including, without
limitation, redundancy payments, protective awards,
compensation for employment liabilities arising from breach of
any contract of employment or any statutory employment right
or for failure to comply with any order for the reinstatement
or re-engagement of any Employee.
7.2.4 Except as disclosed in Schedule 4, PLL has not made or agreed
to make any payment or provided or agreed to provide any
benefit to any Employee or Consultant or former Employee
employed by PLL or former Consultant to PLL or any dependant
of such Employee or Consultant or former Employee or
Consultant in connection with any termination or suspension of
employment or variation of any contract of employment or of
consultancy of any such Employee or Consultant or former
Employee or former Consultant.
7.2.5 To The Knowledge of Sellers, neither the entering into, nor
the compliance with, this Agreement or any documents to be
entered into pursuant to or in connection with this Agreement
will cause any Employee to leave his employment
7.3 WORKS COUNCILS AND EMPLOYEE REPRESENTATIVE BODIES
Schedule 4 lists all work councils and employee representative bodies,
which by law or any collective bargaining agreement have the right to
be informed and consulted on matters, which affect the Employees.
7.4 COLLECTIVE BARGAINING AGREEMENTS ETC.
Schedule 4 lists all union membership agreements, collective bargaining
agreements and undertakings or agreements affecting the Employees at
PLL's level (whether legally binding or not).
7.5 TRADE DISPUTES
PLL is not and has not in the past 5 years been involved in any trade
dispute or any dispute or negotiation regarding a claim of material
importance with any trade union or other body representing employees or
former employees of PLL.
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7.6 BONUS OR OTHER PROFIT-RELATED SCHEMES
7.6.1 Schedule 4 lists all share incentive, share option, profit
sharing, bonus or other incentive arrangements for or
affecting any Employees or former Employees employed by or
Consultants or former Consultants to PLL in the last eight (8)
years together with full details of all awards allocated and
options granted and the total potential liability of PLL in
respect of such awards and options.
7.6.2 To The Knowledge of Sellers, PLL could not be liable for any
social security contributions arising out of the grant,
exercise or release of the awards and options referred to in
paragraph 7.6.1.
7.7 RETIREMENT BENEFIT ARRANGEMENTS
7.7.1 Group Retirement Benefit Arrangements
The arrangements listed in Schedule 4 are the only
arrangements under which PLL makes or could become LIABLE TO
MAKE payments for providing retirement, death disability or
life assurance benefits (the "GROUP RETIREMENT BENEFIT
ARRANGEMENTS").
7.7.2 Regulation
The Group Retirement Benefit Arrangements are in compliance
and have since the date of commencement of the Group
Retirement Benefit Arrangements been in compliance, with their
terms and with all applicable laws, regulations and government
taxation or funding requirements. In particular, but without
limitation, there has been no failure to comply with any
applicable law, regulation or requirement, or any other
circumstance, which would or might result in the loss of tax
approval or qualification of any of the Group Retirement
Benefit Arrangements.
7.7.3 Financial status of the Group Retirement Benefit Arrangements
(i) The assets of the Group Retirement Benefit
Arrangements and/or the provisions made by PLL for
the liabilities under the Group Retirement Benefit
Arrangements ARE sufficient to discharge all benefits
(whether or not yet payable) under the Retirement
Benefit Arrangements. Each of the Retirement Benefit
Arrangements is fully funded or provided for in
accordance with the local actuarial and accounting
practice and principles for an ongoing pension
scheme.
(ii) If the Group Retirement Benefit Arrangements provide
benefits calculated by reference to a formula under
which the amount of benefit is linked to the years of
service of the employee to retirement and to salary
of the employee at or near to retirement or averaged
over a period of his service (a "SALARY RELATED
SCHEME") the liabilities of such Salary Related
Scheme shall for the purposes of paragraph 7.7.3(i)
above be estimated by reference to the completed
service of the employee at Closing and an estimate of
the future salary of the employee at the date of his
retirement based on reasonable assumptions consistent
with the said agreed local actuarial and accounting
practice and principles.
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(iii) PLL has no outstanding unfounded liability
(including, without limitation, liability for unpaid
benefits, contributions or insurance premiums) with
respect to any of the Group Retirement Benefit
Arrangements.
(iv) Except as disclosed in Schedule 4, PLL would not have
any further liability either to the Group Retirement
Benefit Arrangements or to any Employees if it ceased
to make contributions to the Group Retirement Benefit
Arrangements at Closing.
7.7.4 Termination Payments
The sale of the Shares contemplated by this Agreement will not
trigger any contractual termination or severance payment
obligations to any employee of PLL.
8 LEGAL COMPLIANCE
8.1 LICENCES AND CONSENTS
8.1.1 To The Knowledge of Sellers, all material licences, consents,
authorisations, orders, warrants, confirmations, permissions,
certificates, approvals, registrations and authorities other
than in respect of Intellectual Property necessary for the
carrying on of the business of PLL and/or PLB as carried on as
of the date of, and immediately prior to the date of,
signature of this Agreement:
(i) have been obtained or transferred to PLL, WOB and/or
WLP, as required by the Purchasers;
(ii) are in force;
(iii) do not contain conditions which would hinder the
ordinary course of business; and
(iv) are being complied with in all material respects.
8.1.2 The entering into, and the performance of, this Agreement and
any of the documents to be entered into pursuant to or in
connection with this Agreement, will not result in a breach of
the matters referred to in paragraph 8.1.1 or cause any such
matters to be suspended, modified or revoked.
8.2 COMPLIANCE WITH LAWS
8.2.1 To The Knowledge of Sellers, the business of PLL and/or PLB
has at all times been carried on and is being carried on in
all material respects so that there have not been and are not
any breaches of applicable laws and regulations in each
country in which they are carried on.
8.2.2 There have not been and are not any breaches by PLL and/or PLB
of its constitutional documents which would have a material
adverse effect on the business of PLL and PLB respectively.
8.2.3 To The Knowledge of Sellers, there is no investigation,
disciplinary proceeding or enquiry by, or order, decree,
decision or judgment of, any court, tribunal, arbitrator,
governmental
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agency or regulatory body outstanding or anticipated against
PLL and/or PLB or any person for whose acts or defaults it may
be vicariously liable which will have a material adverse
effect upon its assets or business.
8.2.4 Neither PLL nor PLB has received any notice or other
communication (official or otherwise) from any court,
tribunal, arbitrator, governmental agency or regulatory body
with respect to an alleged actual or potential violation
and/or failure to comply with any such applicable law,
regulation, bye-law or constitutional document, or requiring
it to take or omit any action.
9 ANTI-COMPETITIVE AGREEMENTS AND PRACTICES
PLL and/or PLB are not party to any agreement, arrangement or concerted
practice or is carrying on any practice:
9.1.1 which in whole or in part may contravene or may be invalidated
by any anti-trust, fair trading, dumping, state and consumer
protection or similar legislation in any jurisdiction;
9.1.2 in particular and without prejudice to the generality of the
foregoing, which in whole or in part may contravene Article
81(1) or 82 of the Treaty of Rome; or
9.1.3 in respect of which any filing, registration or notification
may be required or may be advisable pursuant to the
legislation referred to in paragraph 9.1 or 9.2 (whether or
not the same has in fact been made).
10 LITIGATION
10.1 CURRENT PROCEEDINGS
Except as otherwise disclosed in Schedule 4, neither PLL nor PLB (or
any person for whose acts or defaults PLL and/or may be vicariously
liable) is involved whether as plaintiff or defendant or other party in
any claim, legal action, proceeding, suit, litigation, prosecution,
investigation, enquiry or arbitration.
10.2 PENDING OR THREATENED PROCEEDINGS
Except as otherwise disclosed in Schedule 4, to the knowledge of
Sellers, no such claim, legal action, proceeding, suit, litigation,
prosecution, investigation, enquiry or arbitration is pending or
threatened by or against PLL and/or PLB (or any person for whose acts
or defaults PLL and/or PLB may be vicariously liable).
10.3 CIRCUMSTANCES LIKELY TO LEAD TO CLAIMS
To the knowledge of Sellers, there are no investigations, disciplinary
proceedings or other circumstances likely to lead to any such claim or
legal action, proceeding, suit, litigation, prosecution, investigation,
enquiry or arbitration.
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11 PRODUCTS
11.1.1 To The Knowledge of Sellers, all products and services
supplied or sold by PLL and/or PLB comply with the regulations
and standards applicable.
11.1.2 During the three year period prior to Closing, other than in
the normal course of business, no individual claims other than
those disclosed in Schedule 4 have been made against any of
PLL and/or PLB in relation to any products or services which
have been sold or supplied by any of PLL and or PLB.
12 TAX
12.1 COMPANY RESIDENCE
For tax purposes, PLL has been resident in Luxembourg and PLB in
Bermuda and both companies have not been resident anywhere else at any
time since December 15, 1993, and will be so resident at Closing. For
the avoidance of doubt, references to residence in this paragraph shall
be construed as references to residence as determined by the local law
of the jurisdiction or jurisdictions concerned and not by reference to
the provisions of any relevant double taxation treaty or convention.
Neither PLL nor PLB have any tax permanent establishment, this term
being defined under the legislation of the countries where PLL and/or
PLB are or have been distributing insurance contracts, outside their
territory.
12.2 RETURNS, INFORMATION AND CLEARANCES
12.2.1 All registrations, returns, computations, notices and
information which are or have been required to be made or
given by PLL and/or PLB for any Taxation purpose (i) have been
made or given within the requisite periods and on a proper
basis and are up-to-date and correct and (ii) none of them is,
or is likely to be, the subject of any dispute with any Tax
Authority.
12.2.2 Each of PLL and PLB has paid all Taxation which it has become
liable to pay and is under no liability to pay any penalty or
interest in connection with any claim for Taxation.
12.2.3 Each of PLL and PLB is in possession of sufficient information
or has reasonable access to such information to enable it to
compute its liability to Taxation insofar as it depends on any
transaction occurring on or before Closing.
12.2.4 Up from Closing, WOB will be in possession of sufficient
information or has reasonable access to such information to
enable it to compute its liability to Taxation insofar as it
depends on any transaction contemplated by this Agreement and
occurred on or before Closing.
12.3 TAXATION CLAIMS, LIABILITIES AND RELIEFS
12.3.1 Without prejudice to any liability, which may arise under
Clause 11.2, there is no liability to Taxation in respect of
which a claim could be made and there are no circumstances
likely to give rise to such a liability.
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12.3.2 There are set out in Schedule 4, with express reference to
this paragraph, details of all matters relating to Taxation in
respect of which PLL (either alone or jointly with any other
person) has, or at Closing will have, an outstanding
entitlement to make:
(i) any claim (including a supplementary claim) for
relief;
(ii) any election, including an election for one type of
relief, or one basis, system or method of Taxation,
as opposed to another; any appeal or further appeal
against an assessment to Taxation;
(iii) any application for the postponement of, or payment
by instalments of, Taxation or to disclaim or require
the postponement of any allowance or relief.
(iv) any court proceedings, which may be made or taken by
PLL within the appropriate time limit after Closing.
Such details are sufficient to enable the Purchasers to
procure that any time limit to such entitlement expiring
within six months after Closing can be met.
12.3.3 No relief (whether by way of deduction, reduction, set-off,
exemption, postponement, roll-over, hold-over, repayment or
allowance or otherwise) from, against or in respect of any
Taxation has been claimed and/or given to PLL which could or
might be effectively withdrawn, postponed, restricted, clawed
back or otherwise lost as a result of any act, omission, event
or circumstance arising or occurring at or at any time after
Closing.
12.3.4 PLL has not taken any action, which has had, or will have, the
result of altering, prejudicing or in any way disturbing any
arrangement or agreement, which it has previously had with any
Tax Authority.
12.3.5 There are no arrangements whereby PLL might be liable for the
Taxation of another company.
12.4 SPECIAL REGIMES/ELECTIONS/RULINGS
There are set out in Schedule 4,with express reference to this
paragraph, full particulars of any agreement, arrangement or election
between PLL and any Tax Authority pursuant to which PLL is authorised
not to comply with what but for such agreement or arrangement, would be
its statutory obligations, if any.
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12.5 SURRENDERABLE LOSSES
12.5.1 For the purposes of this paragraph, "TAXATION BENEFITS" means
any Taxation benefit or advantage, including any loss, relief,
allowance, exemption, set-off, deduction or credit available
in the computation of any liability to Taxation.
12.5.2 PLL is not liable to make a payment for utilisation, surrender
or other transfer of any Taxation Benefits ("TAXATION
EQUALISATION PAYMENT"), nor is it liable to refund any
Taxation Equalisation Payment received.
12.5.3 PLL is not under any obligation to surrender or otherwise
transfer any Taxation Benefits.
12.5.4 There are set out in Schedule 4, with express reference to
this paragraph, full particulars of all surrenders or other
transfers of any Taxation Benefits made by PLL since I January
1997.
12.6 VAT AND TURNOVER TAX
PLL has complied fully with all statutory requirements, orders,
provisions, directions or conditions relating to VAT or such turnover
taxes, including (for the avoidance of doubt) the terms of any
agreement reached with any appropriate Tax Authority.
12.7 STAMP DUTY
All documents to which PLL is a party, or which forms part of the title
to any asset owned or possessed by PLL, or which PLL or the Purchasers
may need to enforce or produce in evidence in any court of law have
been duly stamped and (where appropriate) adjudicated.
12.8 EMPLOYEES
To The Knowledge of Sellers and except as disclosed on Schedule 4, all
amounts payable to any Tax Authority in respect of any Employee
(including any Taxation deductible from any amounts paid to any
Employee and any social fund, national insurance or similar
contributions required to be made in respect of Employees) due or
payable by PLL have been duly paid and PLL has made all such deductions
and retentions as should have been made under applicable law and/or
applicable regulations.
13 IMPORTANT BUSINESS ISSUES SINCE 30 SEPTEMBER 2001
Since 30 September 2001:
13.1.1 there has been no material adverse change in the financial or
trading position or prospects of PLL and/or PLB (other than a
change affecting or likely to affect all companies carrying on
business in similar countries in which PLL and/or PLB carry on
business) and no event, fact or matter has occurred or is
likely to occur which will or is likely to give rise to any
such change;
13.1.2 the business of PLL and/or PLB has not been materially and
adversely affected by any abnormal factor whether or not
affecting similar businesses to a like extent and there are no
facts which are likely to give rise to any such effects;
13.1.3 the business of PLL and/or PLB has been carried on as a going
concern in the ordinary course, without any interruption or
alteration in its nature, scope or manner;
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13.1.4 no capital commitments in excess of five thousand Dollars of
the United States of America (USD 5,000.) individually and
twenty-five thousand Dollars of the United States of America
(USD 25,000.) in the aggregate have been entered into or
proposed by PLL and/or PLB;
13.1.5 neither PLL nor PLB has entered into any transaction or
assumed or incurred any liabilities (including contingent
liabilities) or made any payment not provided for in the PLL's
Accounts and the PLB's Accounts respectively~
13.1.6 the business of the PLL and/or PLB has not been materially and
adversely affected by the loss of any important customer or
source of supply, including the Intermediary Network and the
Fund Custodians, and there are no facts which are likely to
give rise to any such effects; and
13.1.7 PLL has not declared, made or paid any dividend or other
distribution to its shareholders;
13.1.8 PLL has not issued, nor have its shareholders' agreed to issue
any share capital or any other security giving rise to a right
over its capital;
13.1.9 PLL has neither redeemed nor purchased nor have its
shareholders agreed to redeem or purchase any of its share
capital;
13.1.10 PLL has not incurred any additional borrowings or incurred any
other indebtedness.
14 DISCLOSURE SCHEDULE DATA ROOM
14.1.1 Each document specified in Schedule 4 as being attached hereto
is a true and complete copy of the original of such document
and there is no later document, which supersedes or replaces
any such document.
14.1.2 The Seller has not included any matter in the Data Room, which
is untrue or knowingly omitted any matter the omission of
which would make the contents of the Data Room materially
misleading.
15 GENERAL
15.1 AUTHORITY AND CAPACITY
15.1.1 Each of the Sellers and PLL validly exists and is a company
duly incorporated, organised and registered under applicable
law.
15.1.2 Each of the Sellers and PLL has the legal right and full power
and authority to enter into, perform and, as the case may be,
comply with this Agreement and any Local Transfer Documents
and Procedures to which it is a party and any other documents
to be executed by it pursuant to or in connection with this
Agreement or any Local Transfer Documents and Procedures.
15.1.3 The documents referred to in paragraph 15.1.2 above will, when
executed, constitute valid and binding obligations on the
Sellers and PLL, in accordance with their respective terms.
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15.1.4 Each of the Sellers and PLL has taken or will have taken by
Closing all corporate action required by it to authorise it to
enter into and to perform this Agreement, any Local Transfer
Documents and Procedures to which it is a party and any other
documents to be executed by it pursuant to or in connection
with this Agreement or any Local Transfer Documents and
Procedures.
15.2 AUTHORITY TO CARRY ON ACTIVITIES
PLL and PLB have the legal right and full power and authority
to carry on their respective activities, as currently carried
out.
16 INSOLVENCY
16.1.1 Neither any Seller nor PLL is insolvent under the laws of its
jurisdiction or unable to pay its debts as they fall due.
16.1.2 There are no winding up, bankruptcy or other insolvency
proceedings (including in relation to any compromise or
arrangement with creditors) concerning any of the Sellers or
PLL and no events have occurred which, under applicable laws,
would justify such proceedings.
16.1.3 No steps have been taken to enforce any security over any
assets of any Seller of PLL and no event has occurred to give
the right to enforce such security.
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SCHEDULE 3
WARRANTIES GIVEN BY EACH OF THE PURCHASERS
AUTHORITY AND CAPACITY
1.1 INCORPORATION
Each of the Purchasers validly exists and is a company duly
incorporated under applicable law.
1.2 AUTHORITY TO ENTER INTO AGREEMENT
1.2.1 Each of the Purchasers has the legal right and full power and
authority to enter into, perform and, as the case may be,
comply with this Agreement, any Local Transfer Documents and
Procedures to which it is a party and any other documents to
be executed by it pursuant to or in connection with this
Agreement or any Local Transfer Documents and Procedures.
1.2.2 The documents referred to in paragraph 1.2.1 will, when
executed, constitute valid and binding obligations on the
Purchasers, in accordance with their respective terms.
1.3 AUTHORISATION
Each of the Purchasers has taken or will have taken by Closing all
corporate action required by it to authorise it to enter into and to
perform this Agreement, any Local Transfer Documents and Procedures to
which it is a party and any other documents to be executed by it
pursuant to or in connection with this Agreement or any Local Transfer
Documents and Procedures.
2 FINANCING
At Closing, the Purchasers will be able to pay the Purchase Price from
their existing banking facilities and available cash.
3 TAXATION ELECTIONS
3.1 NO U.S. I.R.C. SECTION 338 ELECTION
The Purchasers will not make an election under section 338(g) of the
Internal Revenue Code of the United States of America with respect to
the purchase of the PLL Shares.
3.2 NO EXTRAORDINARY GAIN
The Purchasers will not take steps to have PLL generate an
extraordinary gain prior to the close of PLL's tax year ending in 2002
for US tax purposes. For purposes of this Clause, an "extraordinary
gain" includes, but is not limited to, the following: (1) a transfer of
some or all of the PLL policies to another insurance company in a
reinsurance transaction; (2) distributing tangible or intangible assets
whose fair market value exceed their basis; and (3) selling some or all
tangible or intangible assets whose fair market value exceed their
basis. This Clause is subject to PLL and WLP retaining the right to
merge with any Luxembourg entity.
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