EXHIBIT 4.34
THIS SPONSORS' AGREEMENT is made on 31 March 2003
BETWEEN:
MARCONI PLC, whose registered office is at Xxx Xxxxxxx Xxxx, X.X. Xxx 00,
Xxxxxxxx, Xxxxxxxxxxxx XX0 0XX (PLC);
MARCONI CORPORATION PLC, whose registered office is at Xxx Xxxxxxx Xxxx, X.X.
Xxx 00, Xxxxxxxx, Xxxxxxxxxxxx XX0 0XX (the COMPANY);
LAZARD BROTHERS & CO., LIMITED of 00 Xxxxxxxxxx, Xxxxxx XX0X 0XX (LAZARD); and
XXXXXX XXXXXXX & CO. LIMITED of 00 Xxxxx Xxxxxx, Xxxxxx X00 0XX (XXXXXX XXXXXXX
and together with Lazard, the JOINT SPONSORS).
WHEREAS:
(A) The Company is a corporation organised under the laws of England and
Wales. The Company and PLC are proposing to restructure their financial
indebtedness (and certain other obligations) pursuant to the arrangements
described in the Schemes Document and the Prospectus (the RESTRUCTURING).
(B) Application has been made to the UK Listing Authority to admit all of
the Ordinary Shares (to be issued in connection with the Corp Scheme), the Notes
and the Warrants to the Official List and to the London Stock Exchange to admit
those Ordinary Shares, Notes and Warrants to trading on its market for listed
securities. The Joint Sponsors have been appointed by the Company and have
agreed to act as joint sponsors in connection with the application for Listing
and as the Company's joint nominated representatives in connection with the
application for Admission to Trading.
(C) The Company proposes to issue Ordinary Shares, Notes and Warrants
pursuant to the arrangements described in the Schemes Document, the Prospectus
and this Agreement. Upon Admission, it is expected that the Company will have
issued:
(i) 1 billion Ordinary Shares;
(ii) the Euro equivalent of L450 million Senior Secured Notes due
2008;
(iii) the US$ equivalent of the aggregate of (1) US$300 million and
(2) L117.27 million of Junior Secured Notes due 2008; and
(iv) Warrants in respect of up to 50 million Ordinary Shares.
(D) The Court ordered the calling of meetings of creditors of PLC and Corp
on 24 March 2003 and it is expected that the Schemes Document will be posted to
creditors of the Company and PLC on the date hereof. It is expected that the
Schemes will become effective on or around 19 May 2003.
(E) It is expected that the Prospectus will be formally approved by the UK
Listing Authority and published on the date hereof and that a letter from the
Chairman of PLC to PLC shareholders will be posted to shareholders of PLC
shortly thereafter. It is expected that the Ordinary Shares, Notes and Warrants
will be admitted to the Official List and admitted to trading on the market for
listed securities of the London Stock Exchange on or around 19 May 2003.
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 This Agreement (and the Recitals and Schedules to it) is to be
construed and interpreted in accordance with Schedule 1.
1.2 The Recitals and Schedules to this Agreement are to have effect as
parts of this Agreement.
2. APPOINTMENTS
2.1 Subject to Clause 10.2, the Company hereby confirms the exclusive
appointment of Lazard and Xxxxxx Xxxxxxx as joint sponsors in connection with
the proposed admission of the Ordinary Shares, Notes and Warrants to the
Official List and as the Company's nominated representatives in connection with
its application for Admission to Trading and each of Lazard and Xxxxxx Xxxxxxx
hereby accept such appointment on the terms set out in this Agreement. PLC
hereby confirms the appointment of Lazard and Xxxxxx Xxxxxxx as joint sponsors
for the purpose solely of the PLC Shareholders Letter and the application to the
UKLA for waiver of the requirement for a vote of the shareholders of PLC in
relation to the Restructuring and each of Lazard and Xxxxxx Xxxxxxx accept such
appointment on the terms set out in this Agreement.
2.2 The appointments in Clause 2.1 give the Joint Sponsors all powers,
authorities and discretions which are necessary for, or reasonably incidental
to, the performance of their functions as sponsors provided that the Joint
Sponsors will, where reasonably practicable, consult with the Company and PLC
before making any commitment on behalf of the Company or PLC (as the case may
be) that is material in the context of this Agreement. The Company (and, if
relevant, PLC) shall ratify and confirm all actions which the Joint Sponsors
lawfully take in good faith pursuant to this appointment.
2.3 Without limitation to the Joint Sponsors' obligations under this
Agreement, each of the Company and PLC acknowledges that each of Lazard's and
Xxxxxx Xxxxxxx'x obligations under the Listing Rules as sponsor are owed solely
to the UK Listing Authority and that their agreement to act as sponsor does not
extend any duties or obligations to anyone else including any of the parties to
this Agreement.
2.4 Each of the Joint Sponsors' power to appoint sub-agents or delegate the
exercise of any of its powers is subject to the consent of the Company or PLC
(as the case may be) in writing except that such consent is not required where
such appointment or delegation is made in respect of or to an Indemnified Person
or
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adviser of the Joint Sponsors or any other person who is, in the reasonable
opinion of the Joint Sponsors, capable of competently performing the services in
question. The Company hereby consents to the appointment of Cazenove & Co. Ltd
as the Joint Sponsors' agent under paragraph 2.23 of the Listing Rules to
discharge on behalf of the Joint Sponsors the services set out or referred to in
paragraph 2.21 of the Listing Rules.
2.5 Each of the Company and PLC agrees and acknowledges that,
notwithstanding their appointment pursuant to this Agreement, the Joint Sponsors
have, prior to the date of this Agreement and in anticipation of the proposed
Admission and the Restructuring proceeding, performed the obligations of sponsor
and nominated representative as if they had been so appointed. Accordingly, each
of the Company and PLC agrees that the provisions of this Agreement shall apply
in respect of the Joint Sponsors' performance of those obligations whether
before or after the date of this Agreement.
3. ADMISSION AND APPROVAL
3.1 The Company:
(a) confirms that application has been made to the UK Listing Authority for
Listing;
(b) confirms that application has been made to the London Stock Exchange
for Admission to Trading;
(c) confirms that application has been made to CRESTCo Limited to admit the
Ordinary Shares (to be issued in connection with the Corp Scheme), the
Notes and the Warrants as participating securities within CREST; and
(d) shall use all reasonable endeavours to ensure that Admission becomes
effective and that the Ordinary Shares (to be issued in connection with
the Corp Scheme), the Notes and the Warrants are admitted as
participating securities within CREST not later than 8.00 a.m. on 19
May 2003 or such later date as the Joint Sponsors and the Company may
agree.
3.2 Each of the Company and PLC undertakes to the Joint Sponsors that it
will at any time before or after the date of Admission execute or procure to be
executed all such deeds and documents, to provide or procure to be provided all
such information and assistance and to do or procure to be done all such things
as it shall have the right or power to provide or procure to be provided or to
do or procure to be done (a) as may be reasonably required by the Joint Sponsors
to enable the Joint Sponsors to discharge their obligations under this Agreement
or pursuant to or in connection with Admission or (b) as may be required by, or
necessary to comply with the requirements of, the Listing Rules, the Admission
and Disclosure Standards, the UK Listing Authority, the London Stock Exchange,
the Companies Court or any applicable law or regulation for the purposes of, or
in connection with, the Schemes or Admission.
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3.3 Nothing in Clauses 3.1 or 3.2 shall impose any obligation on the
Company to proceed with the Restructuring or Admission.
3.4 The Company and PLC shall supply all such information, give all such
undertakings, pay all such fees and execute all such deeds and documents as may
be required by CRESTCo in connection with the admission of the Ordinary Shares,
Notes and Warrants as participating securities within CREST.
3.5 Subject to the UK Listing Authority having approved the Prospectus, the
Company shall ensure that on or before 2 p.m. on 31 March 2003 (or such later
time and date as the Company and the Joint Sponsors may agree):
(a) one copy of the Prospectus is delivered to the Registrar of Companies
in London for registration pursuant to section 83 of the FSMA; and
(b) the Prospectus is published in accordance with paragraph 8.4 of the
Listing Rules.
4. DELIVERY OF DOCUMENTS
4.1 The Company and PLC shall procure that there are delivered to the Joint
Sponsors the documents specified in Schedule 2 at the times specified in
Schedule 2 and, as soon as reasonably practicable following the making of a
request in writing therefore by either of the Joint Sponsors to the Company or
PLC, the Company or PLC (as the case may be) shall deliver to the Joint Sponsors
all such further information and documents (including any executed documents) as
the Joint Sponsors may reasonably require for the purpose of fulfilling their
obligations under this Agreement or as may be necessary to comply with the
requirements of the UK Listing Authority, London Stock Exchange or any other
regulatory body in connection with any matter contemplated by the Schemes
Document, the Prospectus or this Agreement.
4.2 The Joint Sponsors are hereby authorised and undertake to deliver any
such information or document to the London Stock Exchange, the UK Listing
Authority or any other regulatory body if and to the extent required in
connection with Admission.
4.3 The Company and PLC shall promptly provide to the Joint Sponsors as
many copies of the Schemes Document and the Prospectus and any supplements or
amendments thereto as the Joint Sponsors may reasonably request.
5. UNDERTAKINGS OF THE COMPANY PLC AND THE JOINT SPONSORS
5.1 The provisions of Schedule 3 to this Agreement shall have effect on and
from the date of this Agreement.
5.2 Each of the Joint Sponsors hereby severally undertakes to the Company
not to distribute copies of the Listing Documents or the Schemes Document
outside of the United Kingdom, except that such distribution will be permitted
to sophisticated investors which are existing clients of one of the Joint
Sponsors in accordance with such requirements, practices and guidelines as are
customarily complied with by
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international investment banks in the distribution of similar documentation (or
otherwise as agreed with the Company or PLC).
6. FEES, COSTS AND EXPENSES
6.1 The parties agree that the Company and PLC shall be jointly and
severally liable for all fees payable under the terms of the Engagement Letters
in connection with Admission.
6.2 Irrespective of whether Admission occurs or whether this Agreement is
terminated, the Company and PLC undertake to pay or cause to be paid (with, in
each case, any related VAT in accordance with Clause 6.5) all costs, charges,
Taxes, fees and expenses of, in connection with, or incidental to, the
Restructuring, the Schemes or Admission and the arrangements referred to in or
contemplated by the Schemes Document or the Prospectus or this Agreement,
including (without limitation):
(a) all fees, costs and expenses incurred in connection with Admission and
the Schemes and implementation of the Restructuring generally
(including registration, listing and court filing fees and expenses)
and the admission of the Ordinary Shares, Notes and Warrants as
participating securities within CREST;
(b) all costs and expenses payable in connection with the preparation of
each of the Schemes Document, the PLC Shareholders Letter and the
Listing Documents and all other expenses in connection with the
preparation, printing, filing and posting of the Schemes Document, the
PLC Shareholders Letter and the Listing Documents;
(c) the cost of preparing or producing this Agreement and any other
documents in connection with the Schemes and/or Admission and/or the
arrangements contemplated by the Schemes Document, the Prospectus or
this Agreement;
(d) the costs and expenses relating to any road shows, presentations or
meetings (including to or with analysts, institutional shareholders or
the press);
(e) fees and expenses payable to the Registrar;
(f) the costs of delivery and distribution of the Ordinary Shares, Notes
and Warrants to the persons who will receive them pursuant to the
Schemes or the Restructuring (including any shareholders of PLC)
(including any transfer of Ordinary Shares, Notes or Warrants prior to
distribution under the Schemes and cancellation of the Bonds);
(g) all printing, public relations and advertising expenses, courier,
postage and telecommunications expenses;
(h) all its legal, accountancy, valuation, actuarial, insurance,
environmental and other professional fees and expenses; and
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(i) all other costs and expenses incurred by the Company or PLC in
connection with the performance of the Company's or PLC's obligations
under this Agreement.
6.3 The Company and PLC undertake, promptly upon request by the Joint
Sponsors, to reimburse to the Joint Sponsors:
(a) all reasonable travel and other out-of-pocket expenses incurred by the
Joint Sponsors (including, without limitation, the fees and expenses of
the Joint Sponsors' legal advisers) in connection with the Admission
and the arrangements referred to in, or contemplated by the Listing
Documents or this Agreement; and
(b) the amount of any costs, charges, fees and expenses payable by the
Company and PLC under Clause 6.2 which the Joint Sponsors may have paid
or incurred.
The Joint Sponsors undertake to use reasonable endeavours to comply with the
travel and expenses policies of the Company applicable to senior executives of
which they have been notified in writing. For the avoidance of doubt, the
Company confirms that it has already approved the appointment of and payment of
fees and expenses to the Joint Sponsors' legal advisers.
6.4 Notwithstanding Clauses 6.1 to 6.3 (inclusive) the Joint Sponsors will,
in relation to any third party expense under Clause 6.2 to be commissioned by
either of them in connection with Admission and Listing and payable by the
Company, obtain quotes and estimates from any relevant third party and will
obtain the approval of the Company prior to commissioning such expense.
6.5 Where a sum is payable under this Agreement to the Joint Sponsors, the
Company or PLC will, in addition, pay, in respect of VAT:
(a) where the payment (or any part of it) constitutes the consideration (or
any part thereof) for any supply of services made or treated as made by
either of the Joint Sponsors to the Company or PLC, such amount as
equals any VAT properly payable in respect of such supply against
presentation of a VAT invoice issued by the relevant Joint Sponsor to
the Company or PLC, as appropriate; and
(b) where the payment is to reimburse the Joint Sponsors for any cost,
charge or expense incurred by either of them (except where the payment
falls within (c) below) such amount in respect of VAT charged to or
incurred by such Joint Sponsor in respect of the relevant cost, charge
or expense which gives rise to or is reflected in the payment and which
such Joint Sponsor certifies in writing to the Company or PLC, as
appropriate, is not recoverable by it by repayment or credit (such
certificate to be conclusive in the absence of manifest error); and
(c) where the payment is in respect of costs or expenses incurred by the
Joint Sponsors as agents for the Company or PLC (except in
circumstances where
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the treatment in section 47(3) Value Added Tax Act 1994 is applied),
such amount as equals the amount included in the costs or expenses in
respect of VAT provided that in such case the Joint Sponsors shall use
reasonable endeavours to procure that the actual supplier of the goods
or services which the Joint Sponsors received as agent issues a valid
VAT invoice directly to the Company or PLC (as relevant).
6.6 The parties agree that the Joint Sponsors shall not be liable for
(a) any Tax (other than stamp duty or stamp duty reserve tax) which is or
may be required to be paid under the laws of the United Kingdom or any
other jurisdiction or by any Tax authority thereof; and
(b) all and any ad valorem stamp duty, stamp duty reserve tax, documentary
or registration duties or taxes (including any interest and penalties
thereon) payable in connection with the creation, issue and initial
delivery of the Notes, Ordinary Shares, ADRs and Warrants, including
any such duty or tax,
which arises in respect of any transfer, or acquisition of, or agreement to
transfer or acquire the Notes, Ordinary Shares and Warrants or the cancellation
of the Bonds, as contemplated by, or effected to implement, the Schemes and the
execution and delivery of this Agreement.
7. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS OF THE COMPANY AND PLC
7.1 The Company and PLC undertake to the Joint Sponsors in the terms of the
Undertakings set out in Schedule 3 and represent and warrant to the Joint
Sponsors in the terms of the Warranties set out in Schedule 4.
7.2 The Warranties are given as at the date of this Agreement and (unless
inconsistent with the words of the Warranty itself) shall be deemed to be
repeated and given as at and on the day of publication of any supplementary
Prospectus and on the day of Admission by reference to the facts and
circumstances then existing.
7.3 If, at any time prior to Admission, either of the Joint Sponsors
becomes aware that any of the Warranties was, is, has become or is reasonably
likely to become, untrue, inaccurate or misleading in any respect which, in the
Joint Sponsors' reasonable opinion, is material in the context of Admission or
the Schemes, the Joint Sponsors may (without prejudice to their right to
terminate this Agreement pursuant to Clause 10) require the Company and/or PLC
at the Company's and/or PLC's expense to make any necessary amendment, update or
supplement to the Schemes Document and/or the Prospectus to correct such
untruth, inaccuracy or misleading statement (such amendment, update or
supplement to be in a form approved by the Joint Sponsors solely for the
purposes of their obligations as sponsors (such approval not to be unreasonably
withheld or delayed)) and/or require the Company and/or PLC at their own expense
to make such announcements and/or despatch such communications and/or take such
other steps as the Joint Sponsors reasonably consider necessary or desirable in
connection with the untruth, inaccuracy or misleading nature of the
representation, warranty or undertaking concerned.
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8. EXCLUSIONS OF LIABILITY
8.1 No claim shall be made by the Company or PLC or by any director of such
body corporate or any of their respective subsidiary undertakings or associates
or by any director of such body corporate and the Company and PLC shall use
reasonable endeavours to ensure that no officer, employee or agent of any such
body corporate makes any claim, against either of the Joint Sponsors, any
holding company of either of the Joint Sponsors, any subsidiary undertaking of
either of the Joint Sponsors or of any such holding company, or any of their
respective associates, or any of the directors, partners, officers, employees,
agents or advisers of any such person (each of the foregoing, an INDEMNIFIED
PERSON) to recover any loss, damage, cost, charge or expense which the Company
or PLC or any of their respective subsidiary undertakings or associates or, as
the case may be, any director, officer, employee or agent of any such body
corporate may suffer or incur and which arises out of the carrying out by any
Indemnified Person of obligations or services in connection with this Agreement
or any other agreements relating to the Restructuring, the Schemes or Admission
or in connection with the Restructuring, the Schemes or Admission or otherwise
in connection with the despatch of the Schemes Document or the Listing Documents
or the fact that the Schemes Document or the Listing Documents are untrue,
inaccurate or misleading in any material respect or do not contain all facts
material to a potential acquiror of the Ordinary Shares, Notes or Warrants
except, in each case, to the extent only that the loss, damage, cost, charge or
expense arises (otherwise than in connection with the matters referred to in
Clause 9.1(b), (d), (e), (f) and (g) and otherwise than as a result of a payment
made or an obligation or liability to make payment arising under Clause 9)
primarily from (i) any conduct, action or omission comprising negligence or
wilful default of the relevant Indemnified Person or (ii) the negligent failure
by that Indemnified Person to comply with its obligations under this Agreement
in any material respect.
8.2 Notwithstanding any rights or claims which the Company or PLC may have
or assert against the Joint Sponsors in connection with this Agreement, the
Restructuring, the Schemes, Admission or any of the other arrangements
contemplated by the Schemes Document, Prospectus, PLC Shareholders Letter or
this Agreement, no claim will be brought by the Company or PLC or any of their
respective subsidiary undertakings or associates, and the Company and PLC shall
use reasonable endeavours to ensure that no director, officer, employee or agent
of any such body corporate makes any claim, against any director, partner,
officer, employee or agent of the Joint Sponsors in respect of any conduct,
action or omission by the individual concerned in connection with this
Agreement, the Restructuring, the Schemes or Admission or any of the other
transactions contemplated by the Schemes Document, the Prospectus or this
Agreement.
9. INDEMNITIES
9.1 Each of the Company and PLC jointly and severally agrees and undertakes
to the Joint Sponsors to indemnify each Indemnified Person against all or any
claims (whether or not successful, compromised or settled), actions,
liabilities, demands, investigations, proceedings or judgments (each a CLAIM)
asserted or established against that Indemnified Person in any jurisdiction by
any person whatsoever and
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against all losses, costs, penalties, charges or expenses (including legal fees)
and Taxes (other than corporation tax incurred by the Indemnified Person on its
actual net income or profits arising in respect of fees paid to such Indemnified
Person pursuant to any of the Engagement Letters) (each an EXPENSE) which that
Indemnified Person may suffer or incur (including, but not limited to, all
Expenses suffered or incurred in disputing any Claim and/or in establishing a
right to be indemnified pursuant to this Clause 9.1 and/or in seeking advice
regarding any Claim or in any way related to or in connection with this
indemnity) if the Claim or Expense arises, directly or indirectly, under, out
of, or is connected with anything done or omitted to be done by any person
(including that Indemnified Person) in connection with the Restructuring, the
Schemes or Admission or the arrangements contemplated by the Restructuring
Agreement, the Schemes Document or the Prospectus or this Agreement, including
but not limited to:
(a) the provision of the Joint Sponsors' services under this Agreement and
the performance by the Joint Sponsors or any other Indemnified Person
on their behalf of their obligations under this Agreement; and/or
(b) the Schemes Document or Listing Documents or any of them not
containing, or being alleged not to contain or not fairly to present,
all information required by law or regulation to be contained therein
or any statement therein being or being alleged to be in any respect
untrue, inaccurate, incomplete, misleading or not based on reasonable
grounds; and/or
(c) the distribution, issue or approval in any jurisdiction of the Schemes
Document or Listing Documents or any of them or other documents or
materials in connection with the Schemes or Admission (including the
issue or approval for the purpose of section 21 of the FSMA of any
financial promotion); and/or
(d) any breach or alleged breach by the Company or PLC of any of their
obligations (including the Warranties) in this Agreement or any other
agreement to be entered into by the Company and/or PLC in connection
with the Schemes, Admission or the arrangements contemplated by the
Schemes Document, the Prospectus or this Agreement; and/or
(e) any failure or alleged failure by the Company or PLC or any of their
respective agents, employees or advisers to comply with the FSMA, the
Companies Act, the Listing Rules, the Rules or the Admission and
Disclosure Standards or any other legal or regulatory requirements in
any jurisdiction in relation to the Restructuring, the Schemes or the
arrangements contemplated by the Schemes Document, the proposed listing
of the Ordinary Shares, Notes and Warrants on the Official List of the
UK Listing Authority and Admission to Trading on the London Stock
Exchange; and/or
(f) the issue or distribution of cash, Ordinary Shares, Notes or Warrants
pursuant to the Schemes or the Restructuring; and/or,
(g) in the case of PLC only, the PLC Shareholders Letter containing, or
being alleged not to contain or not fairly to present, all information
required by law
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or regulation to be contained therein or any statement therein being or
being alleged to be in any respect untrue, inaccurate, incomplete,
misleading or not based on reasonable grounds,
provided that an Indemnified Person shall not be entitled to any indemnity under
Clause 9.1(a) or (c) in relation to any Claim or Expense to the extent that the
Claim or Expense concerned results primarily from (i) the negligence or wilful
default of the relevant Indemnified Person or (ii) the negligent failure by that
Indemnified Person to comply with its obligations under this Agreement in any
material respect.
9.2
(a) Each Indemnified Person shall notify the Company (and, if relevant,
PLC) as soon as reasonably practicable of any Claim asserted or
established against it, and shall keep the Company (and, if relevant,
PLC) reasonably informed of progress in respect of any such Claim,
including steps proposed to be taken to defend any related proceedings,
and shall, to the extent reasonably practicable, consult with the
Company (and, if relevant, PLC) as to any such Claim, proceedings or
steps. Any failure to notify the Company (and, if relevant, PLC), to
keep the Company (and, if relevant, PLC) informed or to consult with
the Company (and, if relevant, PLC) as aforesaid shall not relieve the
Company (or PLC) of any obligations under this Agreement and shall not
relieve the Company (or PLC) from any other obligation or liability
that the Company (or PLC) may have to any Indemnified Person otherwise
than under this Agreement.
(b) The Company and PLC shall not, without the prior written consent of the
Indemnified Person (such consent not to be unreasonably withheld or
delayed), admit any liability in respect of, settle, compromise,
consent to the entry of any judgment in or otherwise seek to terminate
any pending or threatened Claim in respect of which any Indemnified
Person is or could reasonably have been a party and indemnity could
have been sought hereunder by such Indemnified Person, unless such
settlement or other action includes an unconditional release of such
Indemnified Person from all liability in relation to such Claim.
(c) Each Indemnified Person shall not, without the prior written consent of
the Company and PLC (such consent not to be unreasonably withheld or
delayed), admit liability in respect of, settle, compromise, consent to
the entry of any judgement in or otherwise seek to terminate any
pending or threatened Claim in respect of which indemnity or
contribution will be sought hereunder.
9.3 The Company shall promptly notify the Joint Sponsors of any limitation,
restriction or exclusion (whenever arising) on the extent to which the Company,
PLC and/or any of their respective subsidiary undertakings or associates may
claim against any third party or parties and/or of any waiver or release of any
right of the Company, PLC or any of their subsidiary undertakings or associates
to so claim (each a LIMITATION) in respect of anything which may arise, directly
or indirectly, out of or is based upon or is in connection with the Schemes,
Admission or the subject matter of the obligations or services to be performed
under this Agreement or in connection
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with the Schemes or Admission by the Joint Sponsors or on their behalf. Without
prejudice to the rights of any Indemnified Person under the other provisions of
this Clause 9, where any damage or loss is suffered by the Company or PLC for
which any Indemnified Person would otherwise be jointly and severally liable
with any third party or third parties to the Company or PLC or any of their
respective subsidiary undertakings or associates, the extent to which such loss
will be recoverable from the Indemnified Person shall be limited so as to be in
proportion to the contribution of the Indemnified Person to the overall fault
for such damage or loss, as agreed between the parties, or, in the absence of
agreement, as finally determined by a court of competent jurisdiction but, in
any event, the Indemnified Person shall have no greater liability than if the
Limitation did not apply.
9.4 The degree to which any Indemnified Person shall be entitled to rely on
the work of any adviser to the Company or PLC or any other third party will be
unaffected by any Limitation (as defined in Clause 9.3) which the Company or PLC
may have agreed with the third party.
9.5 Each Indemnified Person will have the right under the Contracts (Rights
of Third Parties) Xxx 0000, to enforce its rights against the Company under
Clause 9, provided that, save to the extent notified in writing by Lazard to any
Lazard Indemnified Person or by Xxxxxx Xxxxxxx to any Xxxxxx Xxxxxxx Indemnified
Person, Lazard and Xxxxxx Xxxxxxx (without obligation) will have the sole
conduct of any action on behalf of any Lazard Indemnified Person or Xxxxxx
Xxxxxxx Indemnified Person (as the case may be) indemnified pursuant to this
Clause 9. The Joint Sponsors will have no responsibility to any person who is
not a party to this Agreement under or as a result of this Agreement. The
consent of any person who is not a party to this Agreement shall not be required
for the amendment or termination of it.
9.6 Nothing in this Agreement shall be taken to exclude or restrict any
duty or liability to the Company or PLC which the Joint Sponsors may have and
which cannot be excluded under the FSMA or under the regulatory system.
9.7 Without prejudice to any other rights of an Indemnified Person, the
indemnity provided in Clause 9.1 shall not apply to any Expense or Claim to the
extent that it (a) arises from the acquisition by such Indemnified Person of
Ordinary Shares, Notes or Warrants or other securities or derivatives referenced
to Ordinary Shares or (b) relates to the value of time spent by such Indemnified
Person in connection with the defence of any Claim.
10. TERMINATION
10.1 If at any time before Admission:
(a) it shall come to the notice of either of the Joint Sponsors that any
statement contained in either the Schemes Document or any Listing
Document is or has become untrue, incorrect or misleading in any
material respect, or any matter has arisen, which would, if Admission
occurred at that time, constitute a material omission from the Schemes
Document or Listing Documents, or any
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of them, and which the Joint Sponsors consider to be material in the
context of Admission; or
(b) any of the Warranties given by the Company or PLC is not, or has ceased
to be, true and accurate in all material respects by reference to the
facts and circumstances subsisting at that time or that a matter has
arisen which might reasonably be expected to give rise to a claim under
Clause 9 and which, in any such case, the Joint Sponsors consider to be
material in the context of Admission; or
(c) the Company or PLC have not complied or cannot comply in all material
respects with their obligations under this Agreement or otherwise
relating to Admission; or
(d) Admission does not occur prior to 19 June 2003; or
(e) the Interim Security is enforced; or
(f) the Corp Scheme is not approved by the requisite number of creditors at
a Meeting; or
(g) the High Court refuses to sanction the Corp Scheme; or
(h) if the Joint Sponsors jointly agree on reasonable grounds that one or
more of the conditions to the Corp Scheme becoming effective has become
incapable of being satisfied,
each of the Joint Sponsors may, in its absolute discretion, by notice in writing
given to the Company, terminate this Agreement, except to the extent specified
in Clause 10.4. Where practicable, prior to giving such notice, the relevant
Joint Sponsor will consult with the Company but a failure to do so will not
invalidate any notice given under this Clause 10.1. Termination of this
Agreement by one Joint Sponsor shall not terminate the Agreement to the extent
it concerns the other Joint Sponsor, whose rights and obligations under this
Agreement shall be unaffected by such termination.
10.2 The Company may terminate this Agreement in respect of any Joint
Sponsor at any time before Admission and shall be entitled to replace or
substitute any Joint Sponsor in respect of whom this Agreement is terminated.
10.3 A Joint Sponsor shall be entitled, at any time following termination of
this Agreement in respect of itself, on behalf of the Company to withdraw any
application to the UK Listing Authority and/or to the London Stock Exchange for
Admission (but provided that, to the extent any such application can be varied
so that the Joint Sponsor is removed, without any continuing obligation, from
the application, the application will not be so withdrawn but will be varied
accordingly) and to require the Company to make (or, failing which, the Joint
Sponsors will itself be entitled to make) an announcement of such withdrawal.
10.4 The termination of this Agreement (save to the extent specified in
this Clause 10.4) pursuant to Clause 10.1 or Clause 10.2 shall be without
prejudice to:
Page 12
(a) any claim in respect of a breach of this Agreement prior to the
termination save to the extent that such breaches have been remedied or
waived to the satisfaction of the Joint Sponsors;
(b) the provisions of Clauses 1 and 6 to 16 (inclusive), which will
continue to apply; and
(c) for the avoidance of doubt, the provisions of the Engagement Letters.
11. WITHHOLDING AND GROSSING-UP
11.1 All sums payable to the Joint Sponsors or any other Indemnified Person
(for the purposes of this Clause 11 only, each a PAYEE) under this Agreement
shall be paid free and clear of all deductions or withholdings unless the
deduction or withholding is required by law, in which event the Company or PLC
(as relevant) shall pay such additional amount as shall be required to ensure
that the net amount received by the payee will equal the full amount which would
have been received by it had no such deduction or withholding been made.
11.2 If the United Kingdom Inland Revenue, the United States Internal
Revenue Service or any other Tax authority brings into charge to Tax (or into
any computation of income, profit or gains for the purposes of any charge to
Tax) any sum payable to a payee under this Agreement or any sum withheld in
accordance with Clause 11.1 from any payment made to such a person under this
Agreement (other than, in either case, to the extent that any sum due under
Clause 6 is due in respect of a payment which is allowable to Lazard or Xxxxxx
Xxxxxxx or the relevant Indemnified Person (as the case may be) as a deduction
for tax purposes against income, profit or gains arising in the same accounting
period as that in which the payment was made or accrued) the Company or PLC (as
relevant) shall pay such additional amount as shall be required to ensure that
the total amount received by the payee, less the Tax chargeable thereon (or that
would be so chargeable but for the availability of relief in respect of that
charge to Tax), is equal to the amount that would otherwise be so received
(additional payments being made on demand of the payee).
11.3 If and to the extent that a payee receives an additional amount under
Clause 11.1 and the payee receives and retains the benefit of a refund of Tax or
credit against Tax on its overall net income which is identified by the payee as
attributable to the Tax that was withheld or deducted, then the payee shall
reimburse to the Company or PLC (as relevant) such amount as the payee shall
determine so as to leave that payee, after that reimbursement, in no better or
worse position (having regard to the time value of money) than it would have
been in if payment of the relevant additional amount had not been required. Each
payee shall have absolute discretion as to whether to claim any refund of Tax or
credit against Tax and, if it does so claim, the extent, order and manner in
which it does so and which reliefs and credits are to be regarded as used for
these purposes. No payee shall be obliged to disclose any information regarding
its Tax affairs or computations to the Company or PLC.
Page 13
12. COMPLIANCE
12.1 In relation to the Schemes, Admission and the implementation of the
Restructuring, the Company and PLC shall comply with the statutory requirements
referred to below, and all applicable requirements of the Listing Rules, the
Rules, the Admission and Disclosure Standards, the CREST Rules and other
requirements relating to CREST and the requirements of the City Code which
affect the Company or PLC. The statutory requirements for the purposes of this
subclause (1) are those of the FSMA, the Companies Act, Part V of the Criminal
Justice Xxx 0000 and the CREST Regulations.
12.2 The Company shall not, in the period prior to the publication of its
report and accounts for the year ending 31 March 2004, take any steps which
would either be inconsistent with any statement of its intention in relation to,
or otherwise reduce the Company's level of, compliance with the Combined Code
without first consulting the Joint Sponsors.
13. GENERAL PROVISIONS
13.1 The obligations expressed to be owed by both the Company and PLC under
this Agreement shall be owed on a joint and several basis, provided that if the
Schemes become effective:
(a) the obligations of PLC to the Joint Sponsors and the obligations of
each of the Joint Sponsors to PLC, in each case under this Agreement
(other than in respect of PLC's obligations under Clauses 2 (to the
extent they relate to the appointment by PLC of the Joint Sponsors as
sponsor to PLC), 5, 8 and 9 (insofar as it relates to the indemnity in
Clause 9.1(g))), shall terminate forthwith with effect from that date
and none of them shall have any liability to the other(s) hereunder in
respect of any breach of any such obligations owed to the other(s)
prior to such termination, save in the case of PLC for any breach of
any undertaking under Clauses 5 and 8 and of the warranty in paragraph
58 of Schedule 4;
(b) save for the obligations of the Company and PLC in Clauses 5 and 8 (for
which each shall continue to be jointly and severally liable), there
shall be no continuing joint and several liability of the Company and
PLC; and
(c) the indemnity given by the Company in Clause 9.1(b) shall not extend to
the sections of the Schemes Document listed in Schedule 5.
13.2 This Agreement shall operate for the benefit of and be binding upon the
parties hereto and the Indemnified Persons referred to in Clause 8 (subject to
the terms thereof) and their respective successors or legal personal
representatives. Except as expressly stated in this Agreement, a person who is
not a party to this Agreement may not enforce any of its terms under the
Contract (Rights of Third Parties) Xxx 0000, nor shall the consent of any such
third party be required for the amendment or termination hereof.
Page 14
13.3 Time shall be of the essence of this Agreement, both in relation to the
times, dates and periods specified in it and any time, dates and periods which
may, by agreement in writing between the parties, be substituted for them.
13.4 The respective agreements, representations, warranties, undertakings,
indemnities and other statements contained in or made pursuant to this Agreement
are to have effect, irrespective of anything revealed in any investigation made
by or on behalf of any person, and will survive Admission.
13.5 If any provisions of 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 and enforceability of the remainder of
this Agreement shall not be affected.
13.6 The indemnities set out or referred to in this Agreement shall be in
addition to and shall not limit, affect or prejudice any other right or remedy
available to any Indemnified Person against any person (whether or not a party
to this Agreement).
13.7 No neglect, delay or indulgence on the part of the Joint Sponsors or
any other Indemnified Person in enforcing or invoking any provision of this
Agreement shall operate as a waiver or release.
13.8 Notwithstanding any other rule of law or equity, any release, waiver or
compromise or any other arrangement of any kind whatsoever which the Joint
Sponsors may adopt or effect in connection with this Agreement shall not affect
any right or privilege of any other party to this Agreement nor any other rights
or privileges of any such party at law, in equity or otherwise.
13.9 No party may assign any of its rights under this Agreement without the
consent of the other parties save that the Joint Sponsors may assign their
rights under this Agreement to any other member of their group without the
consent of the other parties.
13.10 This Agreement and the documents referred to in it contain the whole
agreement between the Company, Plc and the Joint Sponsors relating to Admission
and Listing and supersede all previous agreements between them relating to
Admission and Listing, save that nothing in this Agreement shall affect the
rights and obligations of Xxxxxx, Xxxxxx Xxxxxxx, PLC and the Company under the
Engagement Letters to the extent that they relate to (i) their role as financial
advisers and (ii) fees payable to them in connection with the Restructuring, the
Schemes, Admission or Listing.
13.11 Each of the Joint Sponsors agrees that it shall not be entitled to
recover damages or obtain payment, reimbursement, restitution or indemnity from
PLC or the Company under this Agreement or the Engagement Letters or otherwise
more than once in respect of the same loss.
13.12 Each of the parties acknowledges that in agreeing to enter into this
Agreement it has not relied on any representation, warranty, collateral contract
or other assurance
Page 15
(except those set out in this Agreement and the documents referred to in it)
made by or on behalf of any other party before the signature of this Agreement.
Each of the parties waives all rights and remedies which, but for this
subclause, might otherwise be available to him in respect of any such
representation, warranty, collateral contract or other assurance, provided that
nothing in this subclause shall limit or exclude any liability for fraud.
13.13 The Company and PLC undertake with the Joint Sponsors to do all in
their power to ensure that the other Group Companies comply with those
provisions of this Agreement which are applicable to them.
14. COUNTERPARTS
This Agreement may be executed by any one of the parties hereto in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute the same instrument.
15. NOTICES
15.1 Save as otherwise provided in this Agreement, any notice, demand or
other communication to be served under this Agreement shall be in writing and
shall be served upon any party hereto only by posting by first class post (if to
an address in the same country) or air mail (if to an address in a different
country) or delivering the same to its address given or referred to in this
Clause 15 or sending the same by facsimile transmission to the number given in
this Clause 15 for the addressee or at such other address or number as it may
from time to time notify in writing in accordance with this Clause 15 to the
other party hereto.
15.2 A notice or demand served by first class post shall be deemed duly
served on an addressee in the same country forty-eight hours (disregarding days
which are not Business Days) after posting, a notice or demand served by air
mail shall be deemed duly served on an addressee in a different country on
receipt and a notice or demand delivered personally or sent by facsimile
transmission shall be deemed duly served at the time of delivery or transmission
(save that if the delivery or transmission occurs after 6 p.m. on a Business Day
or on a day which is not a Business Day the notice or demand shall be deemed
duly served at 8.30 a.m. on the next Business Day following delivery or
transmission) and in proving service of the same it will be sufficient to prove,
in the case of a letter, that such letter was left at or delivered to the
correct address of the party to be served as provided in this Agreement or in
the case of properly stamped or franked first class post or air mail, addressed
to the address of the party to be served given in this Clause 15 and placed in
the post and, in the case of a facsimile transmission, that such facsimile was
duly transmitted to the number of the party to be served given in this Clause 15
and an electronic acknowledgement was received.
15.3 All notices, demands or other communications given under this
Agreement, shall be given to the following addresses and numbers:
Page 16
If to the Company or PLC to: Marconi Corporation plc/Marconi plc
Regents Place, 4(th) Floor, 000 Xxxxxx Xxxx,
Xxxxxx XX0 0XX
For the attention of: Company Secretary
Fax Number: 000 0000 0000
Telephone Number: 000 0000 0000
If to Lazard: Lazard Brothers & Co., Limited
00 Xxxxxxxxxx
Xxxxxx XX0X 0XX
For the attention of: Xxxxx Xxxxxx
Fax Number: 000 0000 0000
Telephone Number: 000 0000 0000
If to Xxxxxx Xxxxxxx: Xxxxxx Xxxxxxx & Co. Limited
00 Xxxxx Xxxxxx
Xxxxxx X00 0XX
For the attention of: Xxxxxxx Xxxx
Fax Number: 000 0000 0000
Telephone Number: 000 0000 0000
16. GOVERNING LAW AND JURISDICTION
16.1 This Agreement and the relationship among the parties to it shall be
governed by and interpreted in accordance with English law and each of the
parties submits to the non-exclusive jurisdiction of the English courts for all
purposes relating to this Agreement.
16.2 The parties irrevocably agree that a judgment order of any court
referred to in this Clause in connection with this Agreement is to be conclusive
and binding on it and may be enforced against it in the courts of any other
jurisdiction.
IN WITNESS WHEREOF this Agreement has been entered into the day and year first
above written.
Page 17
SCHEDULE 1
DEFINITIONS AND INTERPRETATION
1. In this Agreement, the following expressions shall have the meanings
set out below:
ACCOUNTANTS means the United Kingdom firm of Deloitte & Touche;
ACCOUNTS DATE means 30 September 2002;
ACTUARIAL VALUATION means the valuation report prepared by Xxxxxx Xxxxx in
relation to the GEC 1972 Plan dated 6 February 2003 and the examination of that
plan as at 5 April 2002;
ADMISSION means admission of the Ordinary Shares (to be issued in connection
with the Corp Scheme), the Notes and the Warrants to the Official List and
Admission to Trading;
ADMISSION TO TRADING means the admission of the whole of the Company's ordinary
share capital, the Notes and the Warrants to trading on the market for listed
securities of the London Stock Exchange;
ADMISSION AND DISCLOSURE STANDARDS means the admission and disclosure standards
of the London Stock Exchange;
ANNOUNCEMENT DATE means the date of announcement of the preliminary results of
the Group for the year ending on 31 March 2003;
ADR means an American Depositary Receipt representing Ordinary Shares issued
under a programme which the Company intends to establish and list on the NASDAQ
as described in Part VII of the Prospectus;
ASSOCIATE means, in relation to a party to this Agreement, a company or
undertaking in which the party has or, at the relevant time to which any
provision of this Agreement in which the term is used relates, had a direct or
indirect interest entitling it to receive, or to include or reflect in its
accounts, more than 30 per cent. of the annual income or profits of the company
or undertaking concerned or in relation to which the relevant party to this
Agreement is able to remove directors (or their equivalent) able to cast the
majority of votes on any material matter;
BONDS means the Eurobonds and the Yankee bonds as defined in the Prospectus;
BUSINESS DAY means a day (excluding Saturdays and Sundays) on which banks are
generally open for normal banking business in the City of London;
CITY CODE means the City Code on Takeovers and Mergers and the Rules Governing
the Substantial Acquisitions of shares published by the Panel on Takeovers and
Mergers;
Page 18
CLAIM has the meaning given in Clause 9.1;
COMBINED CODE means the combined code as defined in and appended to the Listing
Rules;
COMPANIES ACT means the United Kingdom Companies Xxx 0000, as amended;
CONSTITUTIONAL DOCUMENTS means the certificate of incorporation and bye-laws of
a company from time to time in force;
CODE means the United States Internal Revenue Code of 1986, as amended;
CORP SCHEME means the scheme of arrangement of the Company pursuant to section
425 of the Companies Act contained in the Schemes Document;
CREST means the system enabling title to securities to be evidenced and
transferred in dematerialised form operated by CRESTCo Limited in accordance
with the CREST Regulations;
CREST REGULATIONS means the Uncertificated Securities Regulations 2001;
CREST RULES means those rules made by CRESTCo Limited with respect to the
provision of CREST;
DIRECTORS means the directors of the Company and includes those who have agreed
to become directors of the Company;
DOCUMENT VIEWING FACILITY means the document viewing facility defined in the
Listing Rules;
EMPLOYEE BENEFIT PLAN has the meaning set out in Section 3(3) of ERISA.
ENGAGEMENT LETTERS means the engagement letter between Lazard and PLC dated 4
December 2001, as amended by letter dated 7 May 2002 and by letter dated 13
March 2003, and the indemnity given by PLC to Lazard dated the same date and the
engagement letter between Xxxxxx Xxxxxxx and PLC dated 20 June 2002 as amended
by letter dated on or around 18 March 2003, and the indemnity given by PLC to
Xxxxxx Xxxxxxx and dated the same date;
ERISA means the Employee Retirement Income Security Xxx 0000 (as amended) in the
United States of American;
EXCHANGE ACT means the United States Securities Exchange Act of 1934, as
amended;
EXPENSE has the meaning given to it in Clause 9.1;
EXPLANATORY STATEMENT means the explanatory statement in relation to the Schemes
in the agreed form;
FORMAL NOTICE means the formal notice in a form to be agreed to be published in
connection with Admission as required by the Listing Rules;
Page 19
FSMA means the United Kingdom Financial Services and Markets Xxx 0000;
GROUP means the Company and its subsidiary undertakings and associates
immediately following Admission and GROUP COMPANY means any of them;
HIGH COURT means the High Court of Justice of England and Wales;
INDEMNIFIED PERSON has the meaning given in Clause 8.1;
INFORMAL COMMITTEE OF BONDHOLDERS means the informal ad hoc committee of certain
bondholders which has participated in the negotiation of the Restructuring;
INTERIM SECURITY means the security granted by Highrose Limited to the Syndicate
Banks and Informal Committee of Bondholders over certain cash assets of the
Group on 13 September 2002;
JOINT SPONSORS means Lazard and Xxxxxx Xxxxxxx;
LAZARD INDEMNIFIED PERSON means Lazard, any holding company of Lazard, any
subsidiary undertaking of Lazard or of any such holding company, or any of their
respective associates, or any of the directors, partners, officers, employees or
agents of any such person.
LIMITATION has the meaning given in Clause 9.3;
LISTING means the official listing of the Ordinary Shares (to be issued in
connection with the Corp Scheme), the Notes and the Warrants on the Official
List in accordance with the Listing Rules;
LISTING DOCUMENTS means the Prospectus, the Formal Notice and the press
announcements to be issued by PLC and the Company on publication of the Schemes
Document and on publication of the Prospectus;
LISTING RULES means the listing rules made by the UK Listing Authority;
LONDON STOCK EXCHANGE means London Stock Exchange plc;
LONG FORM REPORT means the long form report in the agreed form in respect of the
Group prepared by the Accountants, including any updates and supplements
thereto;
MATERIAL means, when used in Schedule 4, material for the purposes of making an
informed assessment of the assets, liabilities, profits, losses, financial
position and prospects of the Company, PLC or the Group (as relevant);
MATERIAL ADVERSE EFFECT means any adverse effect upon, or any adverse change in,
the condition, financial or otherwise, or in the earnings, business affairs or
prospects of the Group, whether or not arising in the ordinary course of
business, which is material in the context of Schemes or Admission or the
arrangements contemplated by the Schemes Document or the Prospectus or this
Agreement;
Page 20
MEETING means the meeting ordered by the High Court for creditors to consider
and, if thought fit, approve the Corp Scheme pursuant to section 425 of the
Companies Act or, if such meeting is adjourned, the date of such adjourned
meeting;
XXXXXX XXXXXXX INDEMNIFIED PERSON means Xxxxxx Xxxxxxx, any holding company of
Xxxxxx Xxxxxxx, any subsidiary undertaking of Xxxxxx Xxxxxxx or of any such
holding company, or any of their respective associates, or any of the directors,
partners, officers, employees or agents of any such person.
NOTES means the 1 billion Ordinary Shares, the Euro equivalent of L450
million Senior Secured Notes due 2008 and the US$ equivalent of the aggregate of
(1) US$300 million and (2) L117.27 million of Junior Secured Notes due
2008 to be issued by the Company described in Appendix 8 of the Schemes
Document;
OFFICIAL LIST means the Official List of the UK Listing Authority;
ORDINARY SHARES means ordinary shares of 5p each in the capital of the Company;
PLC SHAREHOLDERS LETTER means the letter to shareholders of PLC to be dated on
or around the date hereof in the agreed form;
PROSPECTUS means the prospectus in a form to be agreed to be published by the
Company in relation to Admission, and shall include any supplements thereto;
PUBLICATION DATE means the date of the publication of the Prospectus in
accordance with Clause 3.5;
REGISTRARS means Computershare Investor Services PLC;
RESTRUCTURING has the meaning given to it in Recital A;
REGULATORY SYSTEM shall have the meaning given to it for the purposes of the
rules and regulations made by the United Kingdom Financial Services Authority
under FSMA;
RULES means the rules of the London Stock Exchange;
SCHEMES means the Corp Scheme and the scheme of arrangement of PLC pursuant to
section 425 of the Companies Act contained in the Schemes Document;
SCHEMES DOCUMENT means the document describing the Schemes and incorporating,
inter alia, the Explanatory Statement in the agreed form, including any
supplements thereto;
SEC means the US Securities and Exchange Commission;
SECURITIES ACT means the United States Securities Act of 1933, as amended;
SYNDICATE BANKS means the banks, financial and other institutions that are
participants from time to time in the Euro 6,000,000,000 syndicated credit
facility dated 25 March 1998 between the General Electric Company plc (now the
Company), HSBC
Page 21
Investment Bank, Marine Midland Bank and the other financial institutions named
therein as amended from time to time;
TAX OR TAXES means all taxes, levies, imposts, duties, charges or withholdings
of any nature whatsoever, together with all penalties, charges and interest
relating to any of the foregoing and regardless of whether the person concerned
is primarily liable or not, including (without limitation) corporation tax,
advance corporation tax, income tax, capital gains tax, VAT, national insurance
contributions, capital duty, stamp duty, stamp duty reserve tax, and all other
taxes on gross or net income, profits or gains, distributions, receipts, sales,
use, occupation, franchise, value added, and personal property;
TAX AUTHORITY means any taxing or other authority (whether within or outside the
United Kingdom) competent to impose any liability to Tax;
US DISCLOSED BENEFIT PLAN means each "employee benefit plan", as defined in
Section 3(3) of ERISA, referred to in the Prospectus.
VAT means United Kingdom value added tax and any other similar sales or turnover
tax within the European Union or elsewhere;
WARRANTS means the warrants to subscribe for Ordinary Shares to be issued by the
Company;
WARRANTY means a representation and warranty given pursuant to Clause 7 and/or
set out in Schedule 4;
WORKING CAPITAL REPORT means the working capital report in the agreed form in
respect of the Group prepared by the Accountants, including any updates and
supplements thereto.
2. References in this Agreement to any Recital, Clause or Schedule are to
recitals of, clauses of, and schedules to, this Agreement (except where the
context otherwise requires).
3. Headings in this Agreement shall not affect its interpretation.
4. In this Agreement, words incorporating the singular only shall include
the plural and vice versa and references to PERSONS shall include individuals,
bodies corporate (wherever incorporated), unincorporated associations and
partnerships (including limited partnerships) and wherever any such associations
or partnerships are formed or organised.
5. References in this Agreement to times and dates are to London times and
dates.
6. References in this Agreement to any document expressed to be in the
AGREED FORM means a document in the form initialled, for the purpose of
identification only, by the respective legal advisers to the parties to this
Agreement subject to any changes which the Company and the Joint Sponsors may
agree; no such initialling
Page 22
shall imply approval of all or any part of its contents by or on behalf of the
person initialling it or either of the parties to this Agreement.
7. Each reference in this Agreement to a breach of any of its provisions
includes a reference to any of the warranties given in this Agreement being
inaccurate or misleading.
8. Each reference in this Agreement to the subsidiary undertakings or
associates of the Company includes a reference to undertakings of that nature
immediately following Admission.
9. References in this Agreement to Admission becoming effective are
references to its becoming effective in accordance with paragraph 7.1 of the
Listing Rules and paragraph 2.1 of the Admission and Disclosure Standards.
10. References in this Agreement to expenses include costs, charges and
expenses of every description.
11. References, express or implied, to an enactment includes references to:
(a) that enactment as re-enacted, amended, extended or applied by or under
any other enactment (before or after the signature of this Agreement);
(b) any enactment which that enactment re-enacts (with or without
modification); and
(c) any subordinate legislation made (before or after the signature of this
Agreement) under that enactment, as re-enacted, amended, extended or
applied as described in paragraph (a) above, or under any enactment
referred to in paragraph (b) above,
and for the avoidance of doubt "ENACTMENT" includes any rule, regulation,
standard or requirement of UK Listing Authority, the London Stock Exchange, the
Financial Services Authority and any other body or authority acting under the
authority of any enactment, and any legislation in any jurisdiction.
12. If a supplementary prospectus is published in connection with the
Listing, references in this Agreement to the Prospectus (or any of them) are, as
the context permits, to be read as references to:
(a) the supplementary prospectus; or
(b) the Prospectus (or any of them) and the supplementary prospectus taken
together.
13. Paragraphs 1 to 13 of this schedule apply throughout this Agreement,
unless the contrary intention appears.
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SCHEDULE 2
DELIVERY OF DOCUMENTS
DOCUMENTS TO BE DELIVERED ON SIGNING OF THIS AGREEMENT
1. Two copies of the Schemes Document.
2. Two copies of the signed applications for Listing and application for
Admission to Trading in relation to the Ordinary Shares, Notes and Warrants,
each certified by a Director or the Secretary of the Company.
3. Two originals of the verification notes and answers, in the agreed
form, in relation to the Schemes Document, duly signed by or on behalf of each
Director and each director of PLC or by each of the persons responsible for the
replies thereto and dated the same date as the Schemes Document.
4. Two certified copies of the minutes of the meetings of the Board of
Directors of the Company (or a duly authorised committee thereof) and the Board
of directors of PLC (or a duly authorised committee thereof), approving the
Schemes Document and the Prospectus (in the case of the Company) (in the agreed
form) and (where appropriate) the other documents referred to in this Agreement
and authorising the steps to be taken by the Company and PLC in connection with
the Schemes and the Company's application for Admission, including the execution
of this Agreement and appointing a committee of the Board of Directors in
relation to the Restructuring, the Schemes and Admission.
5. Two certified copies of the Constitutional Documents of the Company.
6. Two copies of each of the other documents stated in the Schemes
Document as being available for inspection.
7. Two original letters duly signed by the Accountants and dated the date
of the Schemes Document:
(a) confirming the accuracy of certain financial information in the Schemes
Document;
(b) containing confirmations concerning the working capital statement in
the Schemes Document;
(c) providing comfort on there being no significant change in the financial
or trading position of the Group and PLC and its subsidiaries, and
providing comfort on the statement of indebtedness of the Group
contained in the Schemes Document; and
(d) reporting on the pro forma financial information in the forms to be
included in the Schemes Document.
Page 24
8. Two originals of each power of attorney pursuant to which any party
executes this Agreement.
9. Two original opinions in the agreed form dated the date of this
Agreement from Xxxxx & Xxxxx.
10. Two certified copies of each power of attorney pursuant to which any
party executes any of the documents referred to in this Schedule 2.
DOCUMENTS TO BE DELIVERED PRIOR TO DISTRIBUTION OF THE PROSPECTUS IN ACCORDANCE
WITH CLAUSE 3.5(b).
1. Two copies of the Prospectus bearing evidence of the formal approval of
the UK Listing Authority, pursuant to the Listing Rules.
2. Two copies of evidence, in a form reasonably satisfactory to the Joint
Sponsors, that copies of the Prospectus have been delivered to the Registrar of
Companies for registration pursuant to Section 83(1) of the FSMA.
3. Three copies of the Prospectus, each signed by each of the Directors
(or by their agents or attorneys duly authorised in writing, in which case,
together with three certified copies of any such authorisation) and four copies
of each of the other Listing Documents.
4. Two original letters duly signed by the Company, the Accountants, Xxxxx
& Overy, Cazenove & Co. Ltd, Talbot Xxxxxx and L.E.K. Consulting in relation to
paragraph 2.12 of the Listing Rules and dated the same date as the Prospectus.
5. Two letters to the UK Listing Authority duly signed by each of the
Directors in the terms of paragraph 5.5 of the Listing Rules and dated the same
date as the Prospectus.
6. Two original letters duly signed by the Company pursuant to paragraphs
2.15, 2.18 and 2.20 of the Listing Rules and dated the same date as the
Prospectus.
7. Two original letters addressed to the Joint Sponsors duly signed by
Deloitte & Touche in relation to the taxation summary in Part X of the
Prospectus and dated the same date as the Prospectus.
8. Two copies of the final versions of the reports prepared by Xxxxx &
Overy pursuant to their engagement letter dated 26 March 2003 and addressed to
the Company and the Joint Sponsors.
9. Two originals of the verification notes and answers, in a form to be
agreed, in relation to the Prospectus, duly signed by or on behalf of each
Director or by each of the persons responsible for the replies thereto and dated
the same date as the Prospectus.
10. Two originals of the Working Capital Report, in the agreed form, duly
signed by the Accountants and dated the same date as the Prospectus.
Page 25
11. Two copies of each of the other documents stated in the Prospectus as
being available for inspection.
12. Two original letters duly signed by the Accountants and dated the date
of the Prospectus:
(a) confirming the accuracy of certain financial information in the
Prospectus;
(b) containing confirmations concerning the working capital statement in
the Prospectus;
(c) confirming that the Company's statement relating to paragraph 2.15 of
the Listing Rules has been made after due and careful enquiry;
(d) reporting on the pro forma financial information in the forms to be
included in the Prospectus;
(e) providing comfort on there being no significant change in the financial
position or trading position of the Group and, providing comfort on the
statement of indebtedness of the Group contained in the Prospectus
pursuant to the Accountants' UK and international engagement letters;
(f) concerning the omission of information from the Prospectus in
accordance with paragraph 6.E.11(d) of the Listing Rules;
(g) concerning the omission of the Company's own balance sheet from the
Prospectus in accordance with paragraph 6.E.3(b) of the Listing Rules;
(h) giving their consent to the inclusion in the Prospectus of their
letters and reports in the form and context in which they are included
in the Prospectus.
13. Two copies of the share dealing code adopted by the Company.
14. Two copies of the Listing Rules checklist.
15. Two certified copies of the Directors' representation letter to the
Accountants provided under the terms of the engagement letter between the
Accountants, the Company and the Joint Sponsors dated 25 March 2003.
16. Two signed responsibility letters relating to the Prospectus from each
Director or proposed Director addressed to the Company and the Joint Sponsors.
17. Two copies of the Directors' service contracts and appointment letters.
18. Two copies of each of the short form accountants report on the Group
and the report on pro forma financial information in the form in which such
reports appear in the Prospectus.
19. Two copies of the Long Form Report dated the date of the Prospectus and
two copies of the report prepared by the Accountants in relation to the
financial reporting procedures of the Company pursuant to paragraph 2.15 of the
Listing Rules.
Page 26
20. Two directors' and officers' questionnaires duly signed and completed
by each Director, each proposed director and each member of senior management of
the Company, as agreed with the Joint Sponsors, dated the same date as the
Prospectus, being those persons referred to in Part I of the Prospectus.
DOCUMENTS TO BE DELIVERED PRIOR TO ADMISSION
21. Two certified copies of CREST application form.
22. Two certified copies of CREST enablement letter.
23. Two final bring-down letters (as defined in the Accountants' engagement
letters) provided under each of the Accountants' UK and international engagement
letters in relation to the Prospectus and the Accountants' Schemes Document
engagement letter in relation to the Schemes Document.
24. Two certified copies of the Order of the Companies Court sanctioning
the Schemes, duly sealed by the High Court.
25. Two forms of the definitive share certificate.
26. Two original bring-down opinions in the agreed form dated the date of
Admission from Xxxxx & Xxxxx.
Page 27
SCHEDULE 3
UNDERTAKINGS OF THE COMPANY AND PLC
1. The Company and PLC shall procure that the Schemes Document is
published in accordance with the Companies Act and that:
(a) sufficient copies of the Schemes Document are made available at the
registered office of the Company and PLC;
(b) the documents described in the Schemes Document as being available for
inspection are made available as described.
2. The Company and PLC undertake to bring to the notice of the Joint
Sponsors as soon as reasonably practicable any new information or matter or
significant change of which the Company or PLC is, or becomes aware, which is
not disclosed in the Schemes Document and which may be material to a creditor of
the Company or PLC in deciding whether to vote in favour of the Schemes. The
Company and PLC will consult with the Joint Sponsors in determining whether a
supplement to the Schemes Document is required to be sent to the relevant
creditors of the Company or PLC.
3. The Company shall procure that each of the Listing Documents is
published in accordance with the Listing Rules (insofar as they apply) and that:
(a) the Formal Notice shall be published in the Financial Times (or other
national newspaper approved by the Joint Sponsors and published in the
United Kingdom) no later than the next Business Day after the
Publication Date;
(b) immediately after the Prospectus is published in accordance with this
Agreement, sufficient copies of the Prospectus are made available at
the registered office of the Company, the Document Viewing Facility (by
delivery of such copies to the UK Listing Authority) and other
locations referred to in the Formal Notice to satisfy public demand in
accordance with paragraphs 8.4 and 8.5 of the Listing Rules; and
(c) the documents described in the Prospectus as being available for
inspection are made available as described.
4. The Company undertakes to bring to the notice of the Joint Sponsors as
soon as reasonably practicable any significant change or significant new matter
of which it is, or becomes, aware (each as defined in Section 81 of the FSMA)
and that every such change or matter shall be dealt with in accordance with
Section 81 of the FSMA and the Listing Rules.
5. The Company and PLC undertake immediately to notify the Joint Sponsors
if it comes to their knowledge at any time on or before Admission that any of
the representations or warranties given by them in this Agreement was (or may
have been) untrue, inaccurate or misleading in any material respect when given
or has ceased (or may have ceased) to be true and accurate or has become (or may
have
Page 28
become) misleading in any material respect or if either becomes aware of any
circumstance which would or might cause any of those representations or
warranties to become untrue, inaccurate or misleading in any material respect if
they were repeated at any time on or before Admission or if either becomes
aware, prior to such date, that a matter has arisen which might give rise to a
claim under any of the indemnities in Clause 9.
6. The Company and PLC undertake that they will not (and will use all
reasonable endeavours to procure that no member of the Group will):
(a) at any time prior to the Announcement Date, circulate,
distribute, publish, issue or make (nor authorise any other person to
circulate, distribute, publish, issue or make) any press or public
announcement or advertisement, statement or communication in relation
to the Restructuring or Admission or otherwise relating to the assets,
liabilities, profits, losses, financial or trading condition or
prospects of the Company or the Group, whether in response to enquiries
or otherwise, or relating to any matters, events or circumstances
(PUBLICATION ACTION), which may be necessary:
(i) to be made known to the public in order to enable the
shareholders of the Company, the creditors of the
Company and PLC and the public to appraise the
position of the Company and the Group; or
(ii) to avoid the establishment of a false market in its
securities or which is otherwise material to the
Restructuring, the Schemes or Listing; or
(b) at any time between the date of this Agreement and Admission,
enter into any agreement or arrangement or do or permit to be done any
other act or thing (ANNOUNCEMENT ACTION) which, in any case, would give
rise to any obligation to make any announcement to a Regulatory
Information Service in accordance with the Listing Rules or the
Admission and Disclosure Standards other than as a consequence of the
requirements of Part VI of the Companies Act or Part X of the Companies
Act (provided not as a result of the actions of any Director of the
Company or any director of PLC),
without first obtaining the prior written consent (such consent not to be
unreasonably withheld) of the Joint Sponsors in relation to the Announcement
Action or, where reasonably practicable, notifying and consulting with the Joint
Sponsors in relation to the content, form and manner of the Publication Action,
and making available drafts of any such Publication Action to the Joint Sponsors
in sufficient time prior to its publication to allow the Joint Sponsors an
opportunity to consider and comment on the same.
7. The Company and PLC undertake to the Joint Sponsors that they will not,
before the Announcement Date and without the prior written consent (such consent
not to be unreasonably withheld) of the Joint Sponsors, provide a supplement to,
amend or vary, or agree to an amendment or variation of, the Schemes Document,
the Listing Documents or take any steps which would be inconsistent to a
material extent
Page 29
with any expression of intention or any undertaking or commitment given in such
documents.
8. The Company and PLC undertake to the Joint Sponsors that they will not,
without the prior written consent of both of the Joint Sponsors (such consent
not to be unreasonably withheld), use the Prospectus or any part thereof to
facilitate a placing or other sale or disposal of the Ordinary Shares, Notes or
Warrants (including by way of promotion of a repositioning of such securities)
prior to Admission or for a period of 3 months thereafter. The Joint Sponsors
may require, as a condition of providing their consent, additional comfort from
the Company and its advisers in relation to the Prospectus and any other
documents to be used in connection with the placing, sale or disposal but may
not require either the Company or PLC to engage either or both of the Joint
Sponsors in connection with the placing, sale or disposal.
Page 30
SCHEDULE 4
REPRESENTATIONS AND WARRANTIES
SCHEMES DOCUMENT
1. The Schemes Document does not contain any material untrue or inaccurate
statement of fact or omit to state any fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading in any material respect, and all material expressions of
opinion, intention, expectation, forecasts or estimates contained in that
document are honestly held and made after such inquiries (if any) as were
reasonable. Each forecast, estimate and expression of opinion, intention or
expectation contained in the Schemes Document is made on reasonable grounds, is
honestly held, is fairly based and has been made after due and careful enquiry
and consideration and no information has been omitted which makes such forecast,
estimate or expression of opinion, intention or expectation untrue, inaccurate
or misleading.
2. The Schemes and the Schemes Document comply in all material respects
with sections 425 and 426 of the Companies Act.
3. Each financial promotion (to which section 21 of the FSMA applies)
issued by the Company and/or PLC in connection with the Schemes (if any) and
approved by one or more of the Joint Sponsors for the purposes of that section
was clear, fair and not misleading as of its date.
4. All statements made orally or in writing to the Companies Court by or
on behalf of the Company in connection with the Schemes are true and accurate in
all material respects and are not materially misleading and there are no
material facts which have not been disclosed to the Companies Court in
connection therewith which by their omission make any such statements misleading
in any material respect or which, on the basis of discussions with their
advisers, the Company considers are material for disclosure to the Companies
Court.
5. The verification notes relating to the Schemes Document have been
prepared and approved by suitable persons having appropriate knowledge and all
verification confirmations given by or on behalf of the Company and, so far as
the Company is aware, all verification confirmations given by the persons other
than the Company have been given in good faith after reasonable enquiry.
6. Financial information for the Company and its subsidiaries appearing in
Appendix 1 of the Schemes Document has been prepared in accordance with all
relevant accounting standards and with generally accepted accounting principles
in the United Kingdom consistently applied in the United Kingdom during the
periods involved, and:
(a) gives, for the purposes of the Schemes Document, a true and fair view
of the state of affairs and financial condition of the Group as at the
dates stated and
Page 31
of its profits and losses, cashflows and recognised gains and losses
for the periods then ended;
(b) in accordance with such accounting standards and principles, make
proper provision for all liabilities, whether actual, deferred,
contingent; and
(c) are presented therein on the basis of the accounting policies set out
in Appendix 1 of the Schemes Document.
7. The pro forma financial information set out in Appendix 2 of the
Schemes Document has been duly and carefully prepared on the bases set out in
Appendix 2 of the Schemes Document and is presented therein on a basis
consistent with the accounting policies applied by the Group.
LISTING DOCUMENTS
8. None of the Listing Documents contains any material untrue or
inaccurate statement of fact or omit to state any fact necessary in order to
make the statements made therein, in the light of the circumstances under which
they were made, not misleading in any material respect, and all material
expressions of opinion, intention, expectation, forecasts or estimates contained
in such documents are honestly held and made after such inquiries (if any) as
were reasonable. Each forecast, estimate and expression of opinion, intention or
expectation contained in the Prospectus is made on reasonable grounds, is
honestly held, is fairly based and has been made after due and careful enquiry
and consideration and no information has been omitted which makes such forecast,
estimate or expression of opinion, intention or expectation untrue, inaccurate
or misleading.
9. Each of the Prospectus and the Listing Documents contains all
particulars and information (if any) required by, and will comply with, the
Companies Act, the FSMA and the Listing Rules (save for any derogations approved
by the UK Listing Authority and items agreed by the UK Listing Authority to be
non-applicable) and all other relevant laws and regulations of the United
Kingdom and, having regard to the particular nature of the Company and the Group
and the Company's share capital and the other matters referred to in Sections
80(3) and (4) of the FSMA, contain all such information as investors and their
professional advisers would reasonably require, and reasonably expect to find
therein, for the purpose of making an informed assessment of the matters
specified in Section 80 of the FSMA in relation to the Company and the Group.
10. The Formal Notice will comply with the Listing Rules and is true and
accurate in all material respects and each financial promotion (to which Section
21 of the FSMA applies) communicated by the Company in connection with Admission
was clear, fair and not misleading as of its date.
11. All statements made in writing by or on behalf of the Company in
connection with any application to the UK Listing Authority for certain
information to be omitted from the Prospectus, are true and accurate in all
material respects and are not materially misleading and there are no material
facts which have not been fairly disclosed to the UK Listing Authority in
connection therewith which by their
Page 32
omission make any such statements misleading in any material respect or which,
on the basis of discussions with its advisers, the Company considers are
material for disclosure to the UK Listing Authority.
12. There are no matters other than those fairly disclosed in the
Prospectus which should be taken into account by the UK Listing Authority in
considering the suitability for listing of the shares the subject of Admission.
13. The verification notes relating to the Prospectus have been prepared or
approved by suitable persons having appropriate knowledge and all verification
confirmations given by or on behalf of the Company and, so far as the Company is
aware, all verification confirmations given by the persons other than the
Company, have been given in good faith after reasonable enquiry.
14. The financial information appearing in Part IV of the Prospectus has
been prepared in accordance with all relevant accounting standards and with
generally accepted accounting principles in the United Kingdom consistently
applied in the United Kingdom during the periods involved, and:
(a) gives, for the purposes of the Prospectus, a true and fair view of the
state of affairs and financial condition of the Group as at the dates
stated and of its profits and losses, cash flows and recognised gains
and losses for the periods then ended;
(b) in accordance with such accounting standards and principles, makes
proper provision for all liabilities, whether actual, deferred or
contingent; and
(c) are presented on the basis set out in Part IV of the Prospectus and are
presented therein on the basis of the accounting policies set out in
the Prospectus.
15. The pro forma financial information set out in Part V of the Prospectus
has been prepared in accordance with the rules and guidelines of the UK Listing
Authority and on the bases set out in Part V of the Prospectus and is presented
therein on a basis consistent with the accounting policies applied by the Group.
CORPORATE MATTERS
16. Save as fairly disclosed in the Prospectus, each member of the Group
and PLC has been duly incorporated and is validly existing as a company with
limited liability under the laws of the country of its incorporation with full
power and authority to own, lease and operate the properties which it owns,
leases and operates and to own its other assets and conduct its business as
currently carried on and will at Admission have such power as may be required to
conduct its business as it will be carried on as described in the Prospectus.
17. The share capital of the Company will, upon Admission, be as described
in the Prospectus; all of the Ordinary Shares, Notes and Warrants will upon
Admission be duly and validly authorised and issued, fully paid; all of the
issued share capital of each other member of the Group excluding those that are
not required to be disclosed
Page 33
in the Prospectus under the Listing Rules or any other relevant requirement has
been duly and validly authorised and issued, is fully paid and (except as fairly
disclosed in the Schemes Document and/or the Prospectus) is owned by the Company
or one or more wholly-owned subsidiaries of the Company and is free of all
encumbrances and third party rights and interests.
18. There are no outstanding securities convertible into or exchangeable
for, or warrants, rights or options to purchase from the Company or any member
of the Group, or obligations, commitments or intentions of the Company or any
member of the Group to create the same or to issue, sell or otherwise dispose
of, any shares of the Company or of any member of the Group, except, in each
case, for any which are held by the Company or one of its wholly-owned
subsidiaries or as fairly disclosed in the Schemes Document and the Prospectus.
19. The Directors have established procedures which provide a reasonable
basis for them to make proper judgments as to the financial position and
prospects of the Company and the Group and the Company maintains a system of
internal financial and accounting controls sufficient to provide assurance that
transactions are recorded as necessary to permit preparation of returns and
reports complete and accurate in all material respects, to regulatory bodies as
and when required by them and financial statements in accordance with applicable
accounting standards and principles.
AUTHORITY, VALIDITY, DEFAULTS AND APPROVALS
20. This Agreement and the other agreements to be entered into by the
Company in connection with the Restructuring, the Schemes or Admission, have
been duly authorised, executed and delivered on behalf of the Company and/or PLC
(as the case may be) and constitute valid and binding obligations enforceable
against it in accordance with their terms.
21. The execution and delivery by the Company and PLC of this Agreement and
the other agreements entered or to be entered into by the Company and/or PLC in
connection with the Restructuring, the Schemes or Admission, the performance by
them of their obligations hereunder or thereunder and the distribution of the
Schemes Document and the Listing Documents, will not to any extent which would
or might have a material effect on the Group (except as fairly disclosed in the
Schemes Document and/or Prospectus) (i) violate the Company's Constitutional
Documents or any other or equivalent governing documents or (ii) conflict with,
or result in a breach of, any of the terms or provisions of, or constitute a
default or event of default (however described) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
it under, any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument to which the Company is a party or by which it may
be bound or to which any of their properties may be subject or (iii) result in
any violation of any existing applicable law, rule, regulation, judgment, order
or decree of any government, governmental instrumentality or court, domestic or
foreign, having jurisdiction over the Company or PLC or any of their properties.
22. Neither PLC or any member of the Group to any extent which would or
might have a material effect on the Group (except as fairly disclosed in the
Schemes
Page 34
Document and/or Prospectus) (a) is in violation of its Constitutional Documents
or any other or equivalent governing or constitutional documents or (b) is in
default in the performance or observance of any obligation, agreement, covenant
or condition contained in any contract, any document of title or in any bond,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or
other agreement or instrument to which the Company, PLC or any other member of
the Group is a party or by which the Company, PLC or any other member of the
Group may be bound, or to which any of their properties or assets are subject or
(c) has received notice of any intention to terminate, repudiate or disclaim any
agreement, arrangement or obligation of the type referred to in paragraph (b)
above, in any such case to an extent that might, individually or in the
aggregate, have a material adverse effect.
23. All material consents, approvals, licences and authorisations required
by any member of the Group for the purposes of its businesses, as carried on by
that member at the date of this Agreement, are in full force and effect save as
fairly disclosed in the Prospectus. No member of the Group has received any
notice of proceedings relating to the revocation or modification of any such
consent, approval, licence or authorisation which, singly or in the aggregate,
if the subject of an unfavourable decision, ruling or finding, could have a
material adverse effect, except as described in the Schemes Document and the
Prospectus.
24. No registration under the Securities Act is required for the issue and
distribution of Ordinary Shares, Warrants and Notes in the manner contemplated
by the Schemes Document.
25. The Ordinary Shares, Warrants and Notes issued will not, upon
distribution by the Company in the manner contemplated in the Prospectus and the
Schemes Document (other than to affiliates of the Company) constitute
"restricted securities" as defined in Rule 144(a)(3) under the Securities Act.
26. The Company is not, and upon Admission will not be, an "investment
company" as such terms is defined in the U.S. Investment Company Act of 1940, as
amended.
27. After due inquiry, the Company does not expect to be a "passive foreign
investment company" within the meaning of Section 1297 of the U.S. Internal
Revenue Code of 1986, as amended, in the current taxable year or in the future
years.
LITIGATION, DISPUTES AND INSOLVENCY
28. Other than as fairly disclosed in the Schemes Document and/or the
Prospectus, no member of the Group has been engaged in legal or arbitration
proceedings or government or official proceedings or investigations or enquiries
of which the Company is aware which are pending or threatened which may have, or
have had in the recent past (covering at least the previous 12 months) a
significant effect on the Group's financial position.
29. Neither the Company nor any other member of the Group to any material
extent has taken any action, nor to any extent which would be material to the
Group as a whole, so far as the Company is aware, have any other steps been
taken or legal
Page 35
proceedings commenced or threatened against it or any other such member for
their winding-up, insolvency, bankruptcy, liquidation or dissolution or for any
similar or analogous proceeding in any jurisdiction, or for it or any other such
member to enter into any arrangement or composition for the benefit of
creditors, or for the appointment of a receiver, administrative receiver,
trustee or similar officer which may in each case have a material adverse
effect.
30. No material labour dispute with the employees, the Company or any
member of the Group exists, or, to the knowledge of the Company, is imminent,
except as described in the Schemes Document and/or the Prospectus; and the
Company is not aware of any existing, threatened or imminent labour disturbance
by the employees of any of its principal suppliers, manufacturers or contractors
that could have a material adverse effect on the Group.
WORKING CAPITAL
31. Having regard to the facilities available, the Group will have
sufficient working capital for its present requirements, that is for at least 12
months from the date of the Prospectus.
32. The information contained in the Working Capital Report was and remains
true and accurate in all material respects and is not misleading in any material
respect and no fact or matter has been omitted from it which would be necessary
to make the information therein not misleading in any material respect. The
Working Capital Report has been approved by the Directors of the Company and has
been prepared after due and careful enquiry and on the bases and assumptions
stated in the report, which the Directors believe to be reasonable. There is no
other material fact known to the Company or its Directors, and no other material
assumption, which ought reasonably to have been taken into account in preparing
the report.
33. The cash flow and working capital projections contained in the Working
Capital Report have been carefully prepared, all assumptions on which such
projections are based are set out in the Working Capital Report and are
reasonable and such projections take into account all material matters
concerning the Company, its subsidiary undertakings and associates or the
markets in which any of them is expected to carry on business and all factual
information supplied to the auditors by the Company, any of its subsidiary
undertakings or associates or any of such person's officers for the purpose of
enabling the auditors to identify or evaluate the assumptions underlying the
projections is true, accurate and not misleading in any material respect and all
other information (including any forecast or projection) supplied for that
purpose was given in good faith.
34. Save as fairly disclosed in the Working Capital Report, no member of
the Group has received notice to repay or is aware of any right which any person
may have to serve notice on or any member of the Group requiring it to repay
under an agreement relating to any borrowing or indebtedness the repayment of
which is on demand where the amount concerned is material to the Group as a
whole.
ASSETS
Page 36
35. There is no deficiency in title to the Group's title to all real
property and personal property taken as a whole owned by it which is material to
the business of the Group and any real property and buildings held under lease
by the Group are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere to a material
extent with the use made and proposed to be made of such property and buildings
by the Group, in each case except as described in the Schemes Document and/or
the Prospectus.
36. Save as fairly disclosed in the Prospectus and/or Schemes Document, so
far as each member of the Group is aware, each member of the Group owns, has
licences of, or can acquire licences on reasonable terms (where required) or
where licences are not available on reasonable terms, can make necessary changes
to materials incorporating, all material patents, patent rights, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary systems or procedures), trademarks, service marks and
trade names (the INTELLECTUAL PROPERTY) currently employed by them in connection
with the business now operated by them, and so far as each member of the Group
is aware, no member of the Group has received any notice of infringement in the
previous 18 months of asserted rights of others with respect to any of the
Intellectual Property which, singly or in the aggregate, if the subject of a
final unfavourable decision, ruling or finding that is not capable of appeal,
would have a material adverse effect on the Group.
INFORMATION
37. All information relating to the Group supplied by any member of the
Group to:
(a) the Accountants or the Joint Sponsors for the purposes of their
examination and review of the working capital and cash flow projections
of the Group;
(b) the Accountants for the purposes of the Long Form Report, short form
report, indebtedness statement, report on pro forma financial
information and report on financial reporting procedures in relation to
the Group; and
(c) the Joint Sponsors in connection with the Listing Documents or their
obligations as sponsor under the Listing Rules or otherwise in relation
to Listing or Admission,
has been supplied in good faith and, so far as the Company is aware, is accurate
and complete.
CONSENTS
38. All consents, clearances, approvals, authorisations, orders,
registrations or qualifications of or with any court, governmental agency or
regulatory body (including any stock exchange) required by the Company for or in
connection with:
(a) the change of control of the Company as a result of the Schemes; or
Page 37
(b) the assignment or novation to the Company (or another member of the
Group) of any current or ongoing contracts to which PLC is a party,
which are material have been obtained and are in full force and effect or will
be obtained and will be in full force and effect prior to Admission.
INSURANCE
39. The Group is insured by reputable insurers against such losses and
risks and in such amounts as are considered by the Group to be appropriate in
the businesses in which they are engaged; the Group has no reason to believe
that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that would not have a material
adverse effect, except, in each case, to the extent that failure to obtain such
renewal or similar coverage would not have a material adverse effect or as
described in the Schemes Document and/or the Prospectus.
TAX
40. All consents, clearances, authorisations or approvals necessary for the
purposes of the Restructuring, the Schemes and/or Admission have been obtained
in so far as they are material to the Restructuring, the Schemes and/or
Admission and neither the Restructuring, the Schemes nor Admission will have any
material adverse consequences for the Group's Tax liability save as fairly
disclosed in the Long Form Report.
SAFETY, HEALTH AND THE ENVIRONMENT
41. Each member of the Group (i) is in compliance with any and all
applicable laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants ("ENVIRONMENTAL Laws"), (ii) has received all permits, licences
or other approvals required of them under applicable Environmental Laws to
conduct their respective businesses and (iii) is in compliance with all terms
and conditions of any such permit, licence or approval, except where such
non-compliance with Environmental Laws, failure to receive required permits,
licences or other approvals or failure to comply with the terms and conditions
of such permits, licences or approvals would not, singly or in the aggregate,
have a material adverse effect, except as described in the Schemes Document and
the Prospectus.
42. There are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or any
permit, licence or approval, any related constraints on operating activities and
any potential liabilities to third parties) which would, singly or in the
aggregate, have a material adverse effect, except as described in the
Prospectus.
UK PENSIONS
Page 38
43. Except for the pension and death in service schemes referred to in the
Prospectus (each a DISCLOSED SCHEME), there is not in operation and no binding
intention has been expressed and no agreement or commitment has been given to
any director, former director, employee or former employee of the Company (or
another member of the Group) or any of their dependants or any other person to
continue, modify, change, improve, increase, enter into or establish, a material
agreement, arrangement, custom or practice (whether legally enforceable or not)
for any material payment of, or material payment of a contribution towards, a
pension, allowance, lump sum or similar benefit on retirement or death for the
benefit of a director, former director, employee or former employee of the
Company (or another member of the Group) or any of their dependants. No power or
discretion has been exercised under a Disclosed Scheme to increase materially
any benefit which would not otherwise have been increased or provide any
material benefit in respect of any director, former director, employee or former
employee of the Company or any of their dependants or any other person which
would not otherwise have been provided in respect of them as an entitlement
under the rules of a Disclosed Scheme.
No Disclosed Scheme has been wound up, terminated or closed in whole or in part
and no winding up has been triggered in relation to a Disclosed Scheme.
44. Except as set out in the Prospectus, no material contribution due to a
Disclosed Scheme:
(a) remains unpaid; or
(b) (insofar as the GEC 1972 Plan is concerned) has, since the date of the
Actuarial Valuation, been made at a rate lower than that recommended in
the Actuarial Valuation (where applicable). The employers will continue
to pay contributions of 8.2% of pensionable earnings until 5 April 2003
and (subject to the draft schedule of contributions being signed in
materially unchanged form) thereafter at the same rate.
45. As at the date of the Actuarial Valuation the GEC 1972 Plan was not in
deficit in accordance with the minimum funding requirement prescribed under
Sections 56 and 57 of the Pensions Xxx 0000. The Company believes that, as at
the 5 April 2002, no statutory debt under section 75 of the Pensions Act 1995
would be placed on the Company if the GEC 1972 Plan were to wind up and the debt
calculation be performed as at that date. No representation is made that this
position will not alter, in particular as a consequence of a change to the GEC
1972 Plan's statement of investment principles, the investment performance its
assets, the estimated costs of annuities or the level of retirements within the
GEC 1972 Plan.
46. The Actuarial Valuation indicates that the GEC 1972 Plan was between
115% and 120% funded as at 5 April 2002 on an MFR basis. The actuarial valuation
as at 6 April 1999 showed that the same plan was 121% funded on an MFR basis as
at that date.
47. The trustees of each Disclosed Scheme have unencumbered legal title to
each asset of the Disclosed Scheme.
Page 39
48. In all material respects, the Disclosed Schemes have at all material
times complied with and been administered in accordance with all applicable
legislation, regulations and requirements (including the requirements of the
Pension Schemes Office of the Inland Revenue, the Occupational Pensions
Regulatory Authority, and the National Insurance Contributions Office). The
Company and other members of the Group have, in all material respects, each
complied with and are in compliance with all their obligations and duties
(including statutory obligations) under and in respect of the Disclosed Schemes.
So far as the Company is aware, no material reports have been made to the
Occupational Pensions Regulatory Authority in respect of the Disclosed Schemes.
49. Other than as set out in the Prospectus, there are no material actions,
suits or claims pending or threatened in respect of the Disclosed Schemes (other
than routine claims for benefits). Other than as set out in the Prospectus, so
far as the Company is aware there are no, and have not been any, matters or
circumstances that could give rise to any material action, suit or claim.
50. The Restructuring will not trigger a change of control provision in
respect of any Disclosed Scheme or other pension arrangement and there are no
proposed changes to pension provision as a result of the Restructuring.
51. Other than as set out in the Prospectus, the Company and other members
of the Group have no material liability in respect of pensions on past
subsidiary and business sales. Other than as set out in the Prospectus, all bulk
transfer payments from the UK Plan have been met.
52. The Prospectus describes fully and accurately the potential for a claim
against the Company in respect of the deficits in the defined benefit pension
plans in the United States.
U.S. PENSIONS
53. Each US Disclosed Benefit Plan has been maintained and administered in
all material respects in accordance with its terms.
54. Each US Disclosed Benefit Plan that is intended to be a tax-qualified
plan has been the subject of a determination letter from the Internal Revenue
Service to the effect that such US Disclosed Benefit Plan is qualified and
exempt from United States Federal income taxes under Sections 401(a) and 501(a),
respectively, of the Code; no such determination letter has been revoked, and,
to the knowledge of the Company, revocation has not been threatened; no event
has occurred and no circumstances exist that would adversely affect the tax
qualification of such US Disclosed Benefit Plan; and such US Disclosed Benefit
Plan has not been amended since the effective date of its most recent
determination letter in any respect that might adversely affect its
qualification, materially increase its cost or require security under Section
307 of ERISA. It should be noted, however, that a cash balance feature has been
added to one of the US Disclosed Benefit Plans, effective as of 1 April 2002,
and such plan, as amended, will be submitted to the Internal Revenue Service for
a determination letter within the permissible remedial amendment period under
the Code.
Page 40
55. Except as set forth in the Listing Prospectus, the Company does not
maintain, sponsor or contribute to any post-retirement health, medical or life
insurance benefits for retired, former or current employees of the Company under
which there is any material liability.
56. As at 30 September 2002, the present value of all benefits accrued
under each US Disclosed Benefit Plan that is subject to the minimum funding
standards of ERISA and the Code (excluding for these purposes any accrued but
unpaid contributions) determined on a basis consistent with that used to fund
the plans, and using the assumptions employed by the plans' enrolled actuary in
funding such plans did not exceed the fair market value of the assets of such
plans by more than US$34,200,000. As at 30 September, 2002 the aggregate
unfunded liability of the Company and any Subsidiary in respect of all US
Disclosed Benefit Plans which are unfunded, nonqualified benefit plans, computed
using reasonable actuarial assumptions and determined as if all benefits under
such plans were vested and payable as of such date, did not exceed US$1,150,000.
The Company is not aware of any action having been taken or the occurrence of
any other event, in either case since 30 September 2002, that would or might
have a materially adverse effect on the funding position of any US Disclosed
Benefit Plan.
SIGNIFICANT CHANGE
57. Since the Accounts Date, the Company and each other member of the Group
has carried on its businesses in the ordinary and usual course, and there has
been no material adverse effect or any development involving a prospective
material adverse effect except as fairly disclosed in the Prospectus; and, since
the Accounts Date, neither the Company nor any other member of the Group or any
associate of the Company has, except as fairly disclosed in the Prospectus,
entered into or assumed or incurred any contract, commitment, borrowing,
indebtedness in the nature of borrowing, guarantee, liability (including
contingent liability) or other obligation, or entered into any transactions not
in the ordinary course of business in each case which could reasonably be
expected to have a material adverse effect; and, except as described in the
Schemes Document and/or the Prospectus, since the Accounts Date there has been
no significant change in the financial or trading position of the Group.
LETTER TO PLC SHAREHOLDERS
58. The PLC Shareholders Letter does not contain any material untrue or
inaccurate statement of fact or omit to state any fact necessary in order to
make the statements made therein, in the light of the circumstances under which
they were made, not misleading in any material respect, and all material
expressions of opinion, intention, expectation, forecasts or estimates contained
in such documents are honestly held and made after such inquiries (if any) as
were reasonable. The PLC Shareholders Letter contains all particulars and
information (if any) required by, and will comply with, the Companies Act, the
FSMA and the Listing Rules (save for any derogations approved by the UK Listing
Authority and items agreed by the UK Listing Authority to be non-applicable) and
all other relevant laws and regulations of the United Kingdom.
Page 41
SCHEDULE 5
SECTIONS IN THE SCHEMES DOCUMENT WHICH APPLY ONLY TO PLC AND WHICH
ARE EXCLUDED FROM THE INDEMNITY IN CLAUSE 9.1(B)
- part I Section 2 Part C.2: sub-heading "plc Scheme", the paragraphs
beginning with "The plc Scheme will compromise" and ending with the
words "one of the Scheme Creditors of Corp."
- part I Section 2 Part D.8: Waiver of plc Shareholder vote.
- part III: The plc Scheme.
- part IV Appendix 3: plc financial information to 30 September 2002.
- part IV Appendix 9 Parts III and IV: Excluded Claims (List of excluded
claims under the plc Scheme and Explanation for exclusions at plc
level).
- part VI Notice B: Notice of plc Scheme Meeting.
- part I, Section 1: Letter from Chairman of Corp and plc:
(a) under the heading "Purpose of the Explanatory Statement", the
sentence beginning with "The claims of plc Scheme Creditors
will be compromised" and ending with the words "net of a
reserve in respect of plc's Ongoing Costs" and the sentence
"The liability of plc in respect of the claims of plc Scheme
Creditors will be extinguished.";
(b) under the heading "Schemes", sub-heading "plc Scheme", the
paragraphs beginning with "plc proposes" and ending with the
words "sanctioning of the plc Scheme";
(c) under the sub-heading "plc stakeholders", the paragraphs
beginning with "The plc Scheme will take effect" and ending
with "would have had in a liquidation of plc", the paragraphs
beginning "plc Scheme Creditors include creditors with" and
ending with "in the interests of the general body of
creditors" and the paragraphs beginning with "By the
Termination Date" and ending with "Restructuring from plc
Shareholders";
(d) under the heading "Summary of principal terms of the Schemes",
sub-heading "plc Scheme", the paragraphs beginning with "The
mechanism for calculating" and ending with "through the First
Initial Distribution";
(e) under the heading "Summary of principal terms of the Schemes",
sub-heading "plc Scheme", the paragraphs beginning with "In
summary,
Page 42
each plc Scheme Creditor" and ending with "Scheme
Consideration on a strictly pari passu basis"; and
(f) under the heading "What happens if either or both of the
Schemes do not become effective?", the sentence "The plc
Scheme will not become effective unless the Corp Scheme
becomes effective." and the sentence beginning with "If the
Corp Scheme does", and ending with "commence an insolvency
proceeding".
- part I, Section 2, Part A.10: Directors, Senior Management and
Employees:
(a) under the sub-heading "Directors of plc", the paragraph
beginning with "The current members of" and ending with
"Xxxxxx Xxxx Xxxxx, Non-Executive Director, 61"; the paragraph
beginning with "Xxxxx Xxxxxxx Xxxxxx" and ending with
"Accounting Standards Committee (UK)"; and
(b) under the sub-heading "Share incentive plans", the paragraph
beginning with "Due to plc's current share price" and ending
with "plc Shares will be valueless".
- part I, Section 2.B: Background to and reasons for the Restructuring,
the paragraph beginning with "The trading statement" and ending with
"its shares for a day"; the paragraph beginning with "plc issued a
second" and ending with "cost reduction measures".
- part I, Section 2, Part C.4: Summary of key actual and contingent
claims, under the paragraph beginning with "Schedule 3 to the plc
Scheme" and ending with "as well as other potential claims".
- part I, Section 2, Part C.5: under the sub-heading "Conditions to
effectiveness of the Schemes", the paragraph beginning with "plc will
not take" and ending with "provided such conditions are satisfied on or
before 19 June 2003".
- part I, Section 2, Part C.7: Mechanics of the proposed Restructuring
under the sub-heading "Worked Examples", the paragraph beginning with
"Similarly, a Scheme Creditor" and ending with "x KCS".
- part I Section 2, Part D.10: Share incentive plans:
(a) under the sub-heading "Introduction", the paragraph beginning
with "The Group" and ending with "plc Shares will have no
value";
(b) under the sub-heading "Impact of the proposed Restructuring",
the paragraphs beginning with "Nil-cost Option Plans" and
ending with "approximately L937.45 in cash"; and
(c) under the sub-heading "Underwater Option Plans", the paragraph
beginning with "The GEC Manager's 1984 Share Option Scheme"
and ending with "no outstanding options or awards under it".
Page 43
- part I, Section 2, Part D.11: Pensions: under the sub-heading
"Description of the main Scheme", the sentence beginning "The executive
directors of Corp" and ending with "UK Plan".
- part I, Section 2, Part D.22: Costs of the Restructuring, the paragraph
beginning with "The categories of the costs" and ending with "meet
plc's Ongoing Costs".
- part I, Section 2, Part D.23: Principal Subsidiary and associated
undertakings, the paragraph beginning with "With the exception of
Ancrane" and ending with "losses of plc Group as it will then be".
- part I, Section 2, Part E.1: Material interests of Directors and
Trustees:
(a) under the sub-heading "Directors' service agreements and
emoluments" the paragraph beginning with "Xxxxx Xxxxxx" and
ending with "providing his services to plc)"; and
(b) under the sub-heading, "Shareholdings and management
incentives", the columns headed "Number of plc shares
currently held" and "Percentage of plc Shares currently held".
- part IV, Appendix 6: Insolvency Analysis:
(a) under the sub-heading, "What happens if the Schemes are
approved and become effective?", the columns headed " L
equivalent in aggregate principal amount/number of New Shares"
and "Estimated % recovery" in the "plc" section of Table 1;
(b) under the sub-heading, "What happens if the Schemes are
approved and become effective?", the column headed
"Plc-[32,426] New Shares (see Table 1)" in Table 2;
(c) under the sub-heading "What are the alternatives?", the
sentence beginning with "As plc is not a trading company" and
ending with "or a liquidation";
(d) under the sub-heading "Liquidating administration analysis",
the sentence beginning with "The assets of plc" and ending
with "from subsidiaries";
(e) under the sub-heading "Estimated outcomes from a liquidating
administration", the sentence beginning with "Similarly, the
return" and ending with "approximately 2 per cent."and the
part of the sentence beginning with "the return to plc
unsecured creditors" and ending with "less than 1 per cent.";
(f) under the sub-heading "Estimated outcome from a trading
administration", the sentence beginning with "Because plc is
not" and
Page 44
ending with "liquidating administration or a liquidation (See
Section 1.6 above)"; and
(g) under the sub-heading "Interim security", the sentence
beginning with "The return to plc unsecured creditors" and
ending with "less than 1 per cent.".
- part IV, Appendix 20: Litigation, under the sub-heading "Claims against
the plc Group":
(a) the paragraphs beginning with "plc and four" and ending with
"Esprit de Corp described at paragraph 5 above. Potential
liabilities in respect of the claim against plc will be
compromised pursuant to the plc Scheme"; and
(b) the paragraphs beginning with "In April 2002 Salomon" and
ending with "Potential liabilities in respect of this claim
are excluded from the Schemes.".
Page 45
SIGNED by X. XXXXXXX )
for and on behalf of ) X. XXXXXXX
XXXXXXX CORPORATION PLC )
SIGNED by X. XXXXXX )
for and on behalf of ) X. XXXXXX
XXXXXXX PLC )
SIGNED by [AUTHORIZED SIGNATURE] )
for and on behalf of ) [AUTHORIZED SIGNATURE]
LAZARD BROTHERS & CO., LIMITED )
SIGNED by XXXXXXX XXXX )
for and on behalf of ) XXXXXXX XXXX
XXXXXX XXXXXXX & CO. LIMITED )
Page 46
CONTENTS
CLAUSE PAGE
1. DEFINITIONS AND INTERPRETATION............................................................. 2
2. APPOINTMENTS............................................................................... 2
3. ADMISSION AND APPROVAL..................................................................... 3
4. DELIVERY OF DOCUMENTS...................................................................... 4
5. UNDERTAKINGS OF THE COMPANY PLC AND THE JOINT SPONSORS..................................... 4
6. FEES, COSTS AND EXPENSES................................................................... 5
7. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS OF THE COMPANY AND PLC........................ 7
8. EXCLUSIONS OF LIABILITY.................................................................... 8
9. INDEMNITIES................................................................................ 8
10. TERMINATION................................................................................ 11
11. WITHHOLDING AND GROSSING-UP................................................................ 13
12. COMPLIANCE................................................................................. 14
13. GENERAL PROVISIONS......................................................................... 14
14. COUNTERPARTS............................................................................... 16
15. NOTICES.................................................................................... 16
16. GOVERNING LAW AND JURISDICTION............................................................. 17
SCHEDULE 1 DEFINITIONS AND INTERPRETATION........................................................... 18
SCHEDULE 2 DELIVERY OF DOCUMENTS.................................................................... 24
SCHEDULE 3 UNDERTAKINGS OF THE COMPANY AND PLC...................................................... 28
SCHEDULE 4 REPRESENTATIONS AND WARRANTIES........................................................... 31
SCHEDULE 5 SECTIONS IN THE SCHEMES DOCUMENT WHICH APPLY ONLY TO PLC AND WHICH ARE
EXCLUDED FROM THE INDEMNITY IN CLAUSE 9.1(B)............................................. 42
Page 1
31 MARCH 2003
MARCONI PLC
MARCONI CORPORATION PLC
LAZARD BROTHERS & CO., LIMITED
XXXXXX XXXXXXX & CO. LIMITED
=====================================
SPONSORS' AGREEMENT
=====================================
[FRESHFIELDS BRUCKHAUS XXXXXXXX LOGO]
