AGREEMENT FOR THE SALE AND PURCHASE OF SPV MANAGEMENT LIMITED
DATED JANUARY 1, 2002 BY AND AMONG XXXXXXX XXXXXXX XXXXXX AND
PIERS MINOPRIO AND WILMINGTON TRUST (UK) LIMITED AND
WILMINGTON TRUST CORPORATION
EXHIBIT 10.53
XXXXXXX XXXXXXX XXXXXX AND XXXXX XXXXXXXX
AND
WILMINGTON TRUST (UK) LIMITED
AND
WILMINGTON TRUST CORPORATION
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AGREEMENT FOR THE SALE AND PURCHASE OF SPV
MANAGEMENT LIMITED
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CONTENTS
Clause Page
1. Conditionality/Interpretation................................................................ 3
2. Sale And Purchase............................................................................ 8
3. Conditions................................................................................... 9
4. Completion................................................................................... 11
5. Issue Of Interim And Final Loan Notes........................................................ 13
6. Escrow Account............................................................................... 13
7. Warranties And Pre-Completion Conduct........................................................ 16
8. The Buyers Remedies.......................................................................... 17
9. Limitations On The Seller's Liability........................................................ 18
10. Use Of Intellectual Property Rights.......................................................... 24
11. Further Undertakings By The Sellers.......................................................... 24
12. Confidential Information..................................................................... 26
13. Guarantor's Obligations...................................................................... 26
14. Announcements................................................................................ 28
15. Costs........................................................................................ 28
16. General...................................................................................... 28
17. Set-Off...................................................................................... 29
18. Entire Agreement............................................................................. 29
19. Assignment................................................................................... 30
20. Notices...................................................................................... 30
21. Governing Law And Jurisdiction............................................................... 32
22. Counterparts................................................................................. 33
Schedule 1 THE SELLERS....................................................................
Schedule 2 INFORMATION ABOUT THE COMPANY AND THE SUBSIDIARY UNDERTAKINGS..................
Schedule 3 REVENUE PERFORMANCE PREMIUM....................................................
Schedule 4 COMPLETION REQUIREMENTS........................................................
Schedule 5 PART 1 - WARRANTIES............................................................
Schedule 5 Part 2 - WARRANTIES............................................................
SCHEDULE 7 REAL PROPERTY..................................................................
SCHEDULE 8 REGISTERED INTELLECTUAL PROPERTY RIGHTS
APPENDIX ONE
The Accounts
APPENDIX TWO (INCORPORATED FOR INFORMATION PURPOSES ONLY)
Agreement for the Sale and Purchase of SPV Management Limited between Xxxxxx
XxXxxxxxx and Xxxxx Xxxxxxx Xxxxxxxx Fairrie and Wilmington Trust (UK) Limited
and Wilmington Trust Corporation.
AGREED FORM DOCUMENTS
1. Tax Deed
2. Employment Agreements
3. Xxxxxx Services Agreement
4. Irrevocable power of attorney in relation to the Shares
-2-
THIS AGREEMENT is made on 25 January 2002
BETWEEN:
(1) XXXXXXX XXXXXXX XXXXXX ("AFR") AND PIERS MINOPRIO ("PM") (each, a
"SELLER" and together, the "SELLERS"); and
(2) WILMINGTON TRUST (UK) LIMITED, a company incorporated in England and
Wales (registered no. 04330127) whose registered office is at 000
Xxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx (the "BUYER"); and
(3) WILMINGTON TRUST CORPORATION, a corporation incorporated in the State of
Delaware whose principal place of business is at Xxxxxx Square North,
1100 North Market Street, Wilmington, Delaware (the "GUARANTOR").
THE PARTIES AGREE as follows:
1. CONDITIONALITY/INTERPRETATION
1.1 Clauses 1, 3, 7, 8, 9, 10, 11.1.6, 12-16, and 18-22 of this Agreement
shall be immediately effective and enforceable.
1.2 The remaining clauses of this Agreement are conditional upon
satisfaction of (or where permitted waiver of) the conditions set out in
clause 3 on or before the times specified therein.
1.3 In this Agreement:
"ACCOUNTS" means the accounts set out in the Appendix;
"ACT" means the Companies Xxx 0000;
"BUSINESS DAY" means a day other than a Saturday or Sunday or public
holiday in England and Wales or the United States of America;
"BUYER'S GROUP UNDERTAKING" means the Buyer or an undertaking which is,
on the date of this Agreement, a subsidiary undertaking or parent
undertaking of the Buyer or a subsidiary undertaking of a parent
undertaking of the Buyer;
"BUYER'S SOLICITORS" means Xxxxxxxx Chance Limited Liability Partnership
of 000 Xxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX;
"COMPANY", other than when used in part 1 of schedule 5, means SPV
Management Limited, a company incorporated in England and Wales
(registered number 02548079), whose registered office is at 00 Xxxxxx
Xxxxxx, Xxxxxx XX0X 0XX;
"COMPLETION" means completion of the sale and purchase of the Shares in
accordance with this Agreement;
"COMPLETION DATE" means the date which is five Business Days after the
date (not being later than the ninetieth day after today's date) on
which the last of the Conditions to be satisfied or waived is satisfied
or waived, other than the Conditions in clauses 3.1.2 and 3.1.9;
-3-
"CONDITION" means a condition set out in clause 3.1 and "Conditions"
means all those conditions;
"CONFIDENTIAL INFORMATION" means all information which is used in or
otherwise relates to a Group Company's business, customers or financial
or other affairs including, without limitation, information relating to:
(a) the marketing of goods or services including, without
limitation, customer names and lists and other details of
customers, sales targets, sales statistics, market share
statistics, prices, market research reports and surveys, and
advertising or other promotional materials; or
(b) future projects, business development or planning, commercial
relationships and negotiations;
but does not include information which is already publicly known or
becomes publicly known (other than as a result of, a breach of this
Agreement by either of the Sellers);
"DISCLOSURE LETTER" means the letter from the Sellers to the Buyer in
relation to the Warranties including for the avoidance of doubt all
annexes thereto having the same date as this Agreement the receipt of
which has been acknowledged by the Buyer;
"EMPLOYMENT AGREEMENTS" means the employment agreements between the
Company and each of Xxxxx Xxxxxxx and Xxxxxx XxXxxxxxx in the Agreed
Form;
"ENCUMBRANCE" means a mortgage, charge, pledge, lien, option,
restriction, right of first refusal, right of pre-emption, third-party
right or interest, other encumbrance or security interest of any kind,
or another type of preferential arrangement (including, without
limitation, a title transfer or Escrow arrangement) having similar
effect;
"ENRON SPVS" means Northern Gas Processing Limited, Omegron Limited and
Teesside Investments Limited;
"ESCROW ACCOUNT" means the account referred to in clause 6;
"ESCROW AMOUNT" means the monies from time to time held in the Escrow
Account;
"ESCROW AGENTS" means Xxxxxxxx Chance Limited Liability Partnership of
000 Xxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX and Eversheds of 00 Xxxxx
Xxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX;
"ESCROW LETTER" means the letter in relation to the Escrow Account from
the Escrow Agents to the Buyer and the Sellers in a form to be agreed
between the parties within thirty days of today's date on terms
consistent with this Agreement;
"ESCROW LOAN NOTES" means loan notes in such form as AFR may reasonably
request which shall have a face value of [pound][*] and carry interest
at 1% a year and which shall be non qualifying corporate bonds. Such
notes shall be subject to rights of set off for valid claims made under
this Agreement and provide for redemption as follows:
[pound][*] plus interest of [pound][*] on the first anniversary of
Completion;
* CONFIDENTIAL TREATMENT REQUESTED
-4-
[pound][*] plus interest of [pound][*] on the second anniversary of
Completion;
[pound][*] plus interest of [pound][*] on the third anniversary of
Completion.
"EVENT" has the meaning given to it in the Tax Deed;
"FINAL LOAN NOTES" means the loan notes in such form as the Sellers may
reasonably request which shall carry interest at LIBOR and can be
redeemable on or anytime after six months from their date of issue and
which shall be non-qualifying corporate bonds with an aggregate face
value of up to [pound][*] to be issued by the Buyer to the Sellers
within 5 Business Days of finalisation of the SPV Revenue Certificate
(as defined in Schedule 3) in respect of the Financial Year ending 31st
December 2004 in the proportions set out in Schedule 1;
"GROUP" means the Company and each Subsidiary Undertaking;
"GROUP COMPANY" means the Company or a Subsidiary Undertaking;
"INTELLECTUAL PROPERTY" means:
(a) patents, trade marks, service marks, registered designs,
applications and rights to apply for any of those rights,
trade, business and company names, internet domain names and
e-mail addresses, unregistered trade marks and service marks,
copyrights, database rights, rights in software, know-how,
rights in designs and inventions;
(b) rights under licences, consents, orders, statutes or otherwise
in relation to a right in paragraph (a);
(c) rights of the same or similar effect or nature as or to
those in paragraphs (a) and (b) which now or in the future may
subsist; and
(d) the right to xxx for past infringements of any of the
foregoing rights;
"INTELLECTUAL PROPERTY RIGHTS" means all Intellectual Property owned,
used or required to be used by a Group Company;
"INTERIM LOAN NOTES" means the loan notes in such form as the Sellers
may reasonably request which shall carry interest at LIBOR and can be
redeemable on or anytime after six months from their date of issue and
which shall be non-qualifying corporate bonds with an aggregate face
value of up to [pound][*] to be issued by the Buyer to the Sellers
within 5 Business Days of finalisation of the SPV Revenue Certificate
(as defined in Schedule 3) in respect of the Financial Year ending 31st
December 2003 in the proportions set out in Schedule 1;
"LAST ACCOUNTING DATE" means 31 December 2000;
"LOAN NOTES" means the Escrow Loan Notes, the Interim Loan Notes and the
Final Loan Notes;
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
condition (financial, legal or business) or future prospects of the
Group and, without limitation to the
* CONFIDENTIAL TREATMENT REQUESTED
-5-
generality of the foregoing, shall include an impairment of the Group's
capacity to conduct business in any material respect as it was conducted
before the occurrence of the Material Adverse Effect;
"MATERIAL SPV CLIENT" means First Active Financial plc, First Active plc
and Anthea srl;
"PERMIT" means:
(a) a permit, licence, consent, approval, certificate,
qualification, specification, registration or other
authorisation; or
(b) a filing of a notification, report or assessment,
in each case necessary for the effective operation of a Group Company's
business, its ownership, possession, occupation or use of an asset or
the execution or performance of this Agreement;
"PREFERENCE SHARES" means 25,000 fully paid preference shares of
[pound]1 each of the Company having the rights set out in the articles
of association of the Company;
"PROPERTY" means the property or properties details of which are set out
in schedule 6 and includes an individual property and a part of an
individual property;
"XXXXXX OPTIONS" means the share options over 3,750 ordinary shares of
[pound]1 each in the capital of the Company granted on 25 January 2002
to Xxxxxx XxXxxxxxx and Xxxxx Xxxxxxx;
"XXXXXX SERVICES AGREEMENT" means the agreement in the Agreed Form
between the Buyer and AFR as modified or extended in writing from time
to time;
"RELEVANT CLAIM" means a Warranty Claim, or a claim by the Buyer under
clause 7.7.2 or under the Tax Deed;
"RELEVANT PROPORTIONS" means 87% in respect of AFR and 13% in respect of
PM;
"RELIEF" has the meaning given to it in the Tax Deed;
"RESTRICTED PERIOD" means the period commencing on the Completion Date
and ending on the fourth (4th) anniversary of the Completion Date;
"SECOND DISCLOSURE LETTER" means the letter or letters (if any) given by
the Sellers to the Buyer prior to Completion in relation to the
Warranties repeated immediately prior to Completion;
"SHARES" means the ordinary shares of [pound]1, comprising the whole
of the allotted and issued share capital of the Company other than those
subject to the Xxxxxx Options;
"SPV CORE BUSINESS" means the provision of directors, secretaries, and
registered offices for special purpose companies in the European
securitisation market;
-6-
"SPV REVENUE" means the consolidated revenue of the Group calculated in
accordance with Schedule 3;
"STATUTORY ACCOUNTS" means the accounts referred to in clause 3.1.7;
"STATUTORY ACCOUNTS DATE" means 31 March 2002;
"SUBSIDIARY UNDERTAKING" means a subsidiary undertaking of the Company
listed in part B of schedule 2 (and in relation to Schedule 3 any new
subsidiary undertaking of the Company acquired or formed after today's
date for the purposes of carrying on the SPV Core Business) and
"Subsidiary Undertakings" means all those subsidiary undertakings;
"TAX" has the meaning given in the Tax Deed;
"TAX AUTHORITY" has the meaning given in the Tax Deed;
"TAX DEED" means the tax deed in the Agreed Form between the Sellers and
the Buyer;
"TAXES ACT" means the Income and Corporation Taxes Xxx 0000;
"TCGA" means the Taxation of Chargeable Gains Xxx 0000;
"US GAAP" means the applicable accounting standards, principles and
practices generally accepted in the United States of America;
"VATA" means, in the United Kingdom, the Value Added Tax Xxx 0000 and,
in a jurisdiction outside the United Kingdom, any equivalent
legislation;
"WARRANTY" means a statement contained in schedule 5 and "WARRANTIES"
means all those statements; and
"WARRANTY CLAIM" means a claim by the Buyer under or pursuant to the
provisions of clause 7.1.
1.4 In this Agreement, a reference to:
1.4.1 a "SUBSIDIARY UNDERTAKING" or "PARENT UNDERTAKING" is to be
construed in accordance with section 258 of the Act and to a
"SUBSIDIARY" or "HOLDING COMPANY" is to be construed in
accordance with section 736 of the Act;
1.4.2 liability under, pursuant to or arising out of (or any
analogous expression) any agreement, contract, deed or other
instrument includes a reference to contingent liability under,
pursuant to or arising out of (or any analogous expression)
that agreement, contract, deed or other instrument;
1.4.3 a document in the "AGREED FORM" is a reference to a document
in a form approved and either signed by the each relevant
party or initialled by or on behalf of each party;
1.4.4 a statutory provision includes a reference to the statutory
provision as modified or re-enacted or both from time to time
before the date of this Agreement and
-7-
any subordinate legislation made under the statutory provision
(as so modified or re-enacted) before the date of this
Agreement;
1.4.5 a "PERSON" includes a reference to any individual, firm,
company, corporation or other body corporate, government,
state or agency of a state or any joint venture, association
or partnership, works council or employee representative body
(whether or not having separate legal personality);
1.4.6 a person includes a reference to that person's legal personal
representatives, successors and permitted assigns;
1.4.7 a "PARTY" includes a reference to that party's successors and
permitted assigns;
1.4.8 a clause, paragraph or schedule, unless the context otherwise
requires, is a reference to a clause or paragraph of, or
schedule to, this Agreement;
1.4.9 any English legal term for any action, remedy, method of
judicial proceeding, legal document, legal status, court,
official or any legal concept or thing shall in respect of any
jurisdiction other than England be deemed to include what most
nearly approximates in that jurisdiction to the English legal
term and to any English statute shall be construed so as to
include equivalent or analogous laws of any other
jurisdiction; and
1.4.10 times of the day is to London time.
1.5 All obligations of the Sellers contained in this Agreement are
undertaken by them in a several capacity and accordingly any breach by
AFR alone shall be actionable only against him and any breach by PM
alone shall be actionable only against him. Any liability for any
Relevant Claim in respect of which both Sellers are liable shall be
dealt with in accordance with clause 9.
1.6 The headings in this Agreement do not affect its interpretation.
1.7 A reference in Schedule 5 to a Seller's knowledge, information or belief
is deemed to include knowledge, information and belief which such Seller
would have if such Seller had made all reasonable enquiries.
2. SALE AND PURCHASE
2.1 Subject to clause 3.1 below, the Sellers agree to sell with full title
guarantee and the Buyer agrees to buy the Shares set out opposite the
name of each Seller in column (2) of Schedule 1 and each right attaching
to the Shares at or after the date of this Agreement, free of any
Encumbrance.
2.2 The initial purchase price of the Shares shall be [pound][*] and shall
be satisfied in the proportions identified in Schedule 1, in accordance
with clause 4.
2.3 In addition to the initial purchase price, the Sellers shall be
entitled to additional consideration in the circumstances described in
Schedule 3.
* CONFIDENTIAL TREATMENT REQUESTED
-8-
2.4 In the event that the SPV Revenue for the financial year which ends on
31 December 2001 ("Actual 2001 Revenue"), as determined under Schedule 3
is less than [pound][*], the initial purchase price shall be reduced to
such amount as is equal to [pound][*] multiplied by (Actual 2001
Revenue/[pound][*]) on the basis that
2.4.1 any such price reduction shall be shared between the Sellers
in the following proportions:
(i) AFR: 75/85ths; and
(ii) PM: 10/85ths.
2.4.2 the reduction referable to each Seller shall be set off
against the cash payments otherwise due to him at Completion.
2.5 If either of the Sellers is or becomes liable to make any payment to the
Buyer under this Agreement the payment in question shall be deemed to be
a reduction in the purchase price due to that Seller.
2.6 The Sellers waive all rights of pre-emption and other restrictions on
transfer over the Shares and the shares of the Company subject to the
Xxxxxx Options conferred on them under the Articles or in any other
manner whatsoever and shall procure that all such rights conferred on
any other person are waived no later than Completion so as to permit the
sale and purchase of the Shares.
2.7 If either of the Xxxxxx Options lapses, AFR shall additionally sell,
with full title guarantee and the Buyer shall additionally buy free from
any Encumbrance the shares previously subject to that Xxxxxx Option at
the same price as the Buyer would otherwise have paid to the
optionholder pursuant to the agreement between Xxxxxx XxXxxxxxx and
Xxxxx Xxxxxxx and the Buyer and the Guarantor of today's date.
3. CONDITIONS
3.1 Completion is conditional on the following conditions being satisfied or
waived by the Buyer (or as appropriate the Sellers), on or before the
ninetieth day following today's date, but in the case of condition 3.1.2
on or before 6pm on the fourth Business Day after the date on which all
of the other Conditions (other than condition 3.1.9) have been satisfied
(or where permitted waived) and in the case of condition 3.1.9 on or
before 10am on the Completion Date:
3.1.1 the Employment Agreements shall have been entered into;
3.1.2 a matter, fact or circumstance has not occurred on or after
today's date save as contemplated in the Disclosure Letter
which has or is likely to have a Material Adverse Effect or
that the Buyer has not given written notice to the Sellers
that it is aware that such a matter, fact or circumstance has
occurred;
3.1.3 the Buyer shall have obtained clearances from the US Banking
Authorities for the purchase of the Company's shares on terms
reasonably satisfactory to it;
* CONFIDENTIAL TREATMENT REQUESTED
-9-
3.1.4 the Buyer shall have obtained the favourable opinion of its
auditors that the persons and entities in respect of which a
Group Company provides corporate services will not be
consolidated in the annual audited consolidated accounts of
the Buyer for the purposes of US GAAP;
3.1.5 the Sellers shall have procured that the Company has redeemed
in full all of the Company's Preference Shares;
3.1.6 the parties shall have notified and obtained if required the
approval of the Jersey Financial Services Commission or any
similar regulatory body in Jersey in relation to the proposed
change in ownership and directors of Xxxxxx SPV Management
(Jersey) Ltd and SPV Jersey Limited, as contemplated by this
Agreement;
3.1.7 the consolidated audited accounts of the Company for the
financial period ending on 31 March 2002 comprising the
reporting periods (for Tax purposes) ended 31 December 2001
and ending 31 March 2002 shall have been signed and delivered
to the Buyer and shall not have shown a material adverse
change in the state of affairs of the Group as compared with
the management accounts for the year ended 31 December 2001,
save to the extent that they reflect the matters disclosed in
the Disclosure Letter, and shall show consolidated revenues of
at least [pound][*];
3.1.8 the Sellers shall have obtained tax clearances from the Inland
Revenue for the sale of the Company on terms reasonably
acceptable to them;
3.1.9 the Buyer being reasonably satisfied with the Second
Disclosure Letter, if any, or no Second Disclosure Letter
being delivered by 10.00 am on the Completion Date;
3.1.10 the parties shall have obtained consent from Xxxxxx Xxxxxxx
Trust Company Limited within 30 days of today's date firstly
for the Buyer to proceed with its acquisition of the Company
as contemplated by this Agreement and secondly that it is not
required to consult with Xxxxxx Xxxxxxx Trust Company Limited
in connection with the expansion of any operations of the
Company in a jurisdiction other than in Jersey or Guernsey as
contemplated by an agreement between Xxxxxx Xxxxxxx Trust
Company Limited and the Company and AFR dated 11 January 2000
or the Buyer shall have waived this condition within 40 days
of today's date;
3.1.11 the parties shall have notified and if required obtained the
approval of the appropriate regulatory bodies in Ireland,
Italy and the Cayman Islands in relation to the proposed
change in ownership and directors of SPV Management (Dublin)
Limited, SPV Management (Italia) SRL, and SPV Cayman Limited
respectively, as contemplated by this Agreement, provided that
this condition shall be deemed satisfied in 30 days after
today's date in respect of each of the above companies unless
and to the extent that either of the parties has written to
the others identifying any specific notifications and/or
approvals required under this clause; and
* CONFIDENTIAL TREATMENT REQUESTED
-10-
3.1.12 either:
(i) the directors of the Enron SPVs who are directors or
employees of a Group Company resigning as directors
and being replaced as directors by persons who are
not directors or employees of a Group Company and all
shares held or owned by a Group Company being
transferred to a person who is not a Group Company;
or
(ii) the Buyer being satisfied in its absolute discretion
that neither Group Companies nor the Buyer may suffer
adversely in any way whatsoever arising from the
Enron SPV transactions other than as a result of the
loss of the Enron SPV appointments.
3.2 The Buyer shall make all reasonable efforts to achieve satisfaction of
each Condition set out in clauses, 3.1.3, 3.1.4, 3.1.6, 3.1.9, 3.1.10
and 3.1.11 as soon as possible.
3.3 The Sellers shall make all reasonable efforts to achieve satisfaction of
each Condition set out in clauses 3.1.1, 3.1.5, 3.1.6, 3.1.7, 3.1.8,
3.1.10, 3.1.11 and 3.1.12 within ninety days of today's date.
3.4 If, at any time, the Sellers or the Buyer becomes aware of a fact or
circumstance that might prevent a Condition being satisfied, it shall
immediately inform the other party.
3.5 At any time on or before the ninetieth day after today's date the Buyer
may waive a Condition (other than a Condition in clauses 3.1.2, 3.1.5,
3.1.7, 3.1.8 or 3.1.10) by written notice to the Sellers on any terms it
decides and the Sellers may waive the condition in clause 3.1.8) by
written notice to the Buyer on any terms they decide.
3.6 If:
3.6.1 a Condition (other than the Conditions in clauses 3.1.2 and
3.1.9) has not been waived pursuant to clause 3.5 or has not
been satisfied on or before the ninetieth day after today's
date; or
3.6.2 the Condition in clause 3.1.2 is not satisfied as at 6pm on
the fourth Business Day after the date on which all of the
other Conditions (other than the condition in clause 3.1.9)
have been satisfied and has not been waived by the Buyer
pursuant to clause 3.5; or
3.6.3 the Condition in clause 3.1.9 is not satisfied as at 10am on
the Completion Date
this Agreement shall automatically terminate with immediate effect.
3.7 Save for clauses 1, 8.2, 9, 13-16, and 18-21 each party's further rights
and obligations cease immediately on termination, but termination does
not affect a party's accrued rights and obligations at the date of
termination.
4. COMPLETION
4.1 Completion shall take place at 10.00 am at the office of the Buyer's
Solicitors on the Completion Date or at such other place and time as the
parties may agree.
-11-
4.2 At Completion:
4.2.1 AFR will comply with his obligations under the Xxxxxx Options
if they are exercised and the Buyer shall comply with its
obligations under the agreement of today's date between the
Buyer, the Guarantor, Xxxxxx XxXxxxxxx and Xxxxx Xxxxxxx, but
if either of the Xxxxxx Options is not exercised and thereby
lapses AFR and the Buyer shall instead complete the sale of
the relevant shares in accordance with clause 2.7;
4.2.2 the Sellers and the Buyer shall do all those things
respectively required of them in Schedule 4 and the Buyer
shall issue the Escrow Loan Notes to AFR;
4.2.3 the Sellers and the Buyer shall sign the Escrow Letter and
deliver the Escrow Letter to the Escrow Agents as soon as
practicable after Completion;
4.2.4 the Buyer shall, subject to clause 4.3, pay [pound][*] by
telegraphic transfer into Eversheds' client account with HSBC
Bank PLC, 00 Xxxxxxx, Xxxxxx XX0X 0XX [*];
4.2.5 the Buyer shall pay [pound][*] by telegraphic transfer into
Eversheds' client account as above in satisfaction of the
Sellers' obligation to make loan funds available under the
loan agreements of today's date, between Xxxxxx XxXxxxxxx, the
Sellers and the Company and Xxxxx Xxxxxxx Xxxxxxx Fairrie, the
Sellers and the Company;
4.2.6 the Buyer shall pay [pound][*] by telegraphic transfer into
the Escrow Account, of which [pound][*] shall continue to
belong to the Buyer but be held as security for the Buyer's
obligations under the Escrow Loan Notes and of which
[pound][*] shall belong to PM but be held as security for his
obligations under this Agreement, in accordance with clause 6;
and
4.2.7 the Buyer shall execute a charge in such form as the Seller
reasonably requests in respect of the [pound][*] mentioned
above that is held as security for the Escrow Loan Notes.
4.3 If the Company has an overdraft as at the close of business on the day
prior to the Completion Date, after giving effect to uncashed cheques
issued by the Company as at the close of business on the day prior to
the Completion Date, AFR shall lend the Company an amount equal to such
overdraft. In such event the amount payable to Eversheds on AFR's behalf
under clause 4.2.4 shall be reduced and the Buyer shall instead pay the
loan amount to the Company on behalf of AFR. Such loan shall be interest
free and the Buyer shall procure that it is repaid by the Company out of
the Company's future receipts on the basis that one third of such
receipts shall be applied in arrears on the calendar quarterly dates to
repay the loan until it is extinguished.
4.4 The Buyer is not obliged to complete this Agreement unless:
4.4.1 the Sellers comply with all their obligations under clause 4
and Schedule 4; and
4.4.2 the purchase of all the Shares is completed simultaneously.
* CONFIDENTIAL TREATMENT REQUESTED
-12-
4.5 Neither Seller shall be obliged to complete this Agreement unless the
Buyer complies with all its obligations under clause 4 and Schedule 4.
4.6 If Completion does not take place on the Completion Date because one of
the parties fails to comply with any of its or his obligations under
clause 4 and Schedule 4 (whether such failure amounts to a repudiatory
breach or not), the other parties may by notice to the party in default:
4.6.1 proceed to Completion to the extent reasonably practicable
(but if a party exercises its or his rights pursuant to this
clause, completion of the purchase of some of the Shares does
not affect that party's rights in connection with the others);
4.6.2 postpone Completion to a date not later than 31 May 2002; or
4.6.3 terminate this Agreement.
4.7 If a party postpones Completion to another date in accordance with
clause 4.6.2, the provisions of this Agreement apply as if that other
date is the Completion Date.
4.8 Save for clauses 1, 8.2, 9, and 13-16, and 18-21 if a party terminates
this Agreement pursuant to clause 4.6.3, each party's further rights and
obligations under it shall cease immediately on termination, but
termination does not affect a party's accrued rights and obligations at
the date of termination.
4.9 The Buyer will procure that the Company discharges its own obligations
post Completion with Royal Bank of Scotland plc.
5. ISSUE OF INTERIM AND FINAL LOAN NOTES
5.1 If appropriate under Schedule 3, the Buyer shall issue the Interim
and/or the Final Loan Notes to the Sellers in accordance with that
schedule.
5.2 If the Buyer has acquired any of the shares subject to the Xxxxxx Option
direct from AFR the amount of Interim or Final Loan Notes (as the case
may be) shall be increased accordingly.
6. ESCROW ACCOUNT
6.1 The parties agree that money in the Escrow Account shall only be used in
accordance with the provisions set out in this clause and in the Escrow
Letter. Each party shall ensure that all rights to the Escrow Account
remain free from any Encumbrance, set-off or counterclaim except as
referred to in this clause.
6.2 The Escrow Account will be a joint on-demand interest bearing deposit
account with HSBC Bank Plc in the name of the Escrow Agents who will
hold the Escrow Amount as stakeholders upon trust for the Buyer and the
Sellers on the following terms:
6.3 Subject as provided in clauses 6.6 and 6.7, the Escrow Agents will make
payments out of the Escrow Amount to AFR in the amounts (inclusive of
interest) and on the dates provided in the Escrow Loan Notes
-13-
6.4 Subject as provided in clauses 6.6 and 6.7, the Escrow Agents will make
payments out of the Escrow Amount to PM as follows:
6.4.1 [pound][*] on the first anniversary of Completion;
6.4.2 [pound][*] on the second anniversary of Completion; and
6.4.3 [pound][*] on the third anniversary of Completion.
6.5 If, the Buyer believes that at any time on or before the third
anniversary of Completion, (i) either of the Sellers is in breach of any
of the undertakings given by each of the Sellers to the Buyer under
clause 11; (ii) a liability is due and owing by a Seller under a
Warranty; (iii) AFR has breached a covenant in the Xxxxxx Services
Agreement or (iv) liability is due and owing by a Seller under the Tax
Deed (in each case a "Claim");
6.5.1 the Buyer shall as soon as is reasonably practicable send
notice to the relevant Seller and the Escrow Agents specifying
the Seller which is in breach and setting out in reasonable
detail the nature of the Claim and the amount thereof;
6.5.2 within twenty Business Days starting on the day of receipt of
the notice given under clause 6.5.1 the relevant Seller shall
notify the Buyer and the Escrow Agents whether or not it
accepts the Claim and if not, setting forth in reasonable
detail the basis of its objection to the Claim (an
"OBJECTION") and whether or not he requires the Buyer to
obtain an opinion from a Queen's Counsel selected by the
Buyer, of a minimum of 10 years' call, indicating that he
regards the amount claimed under clause 6.5.1 to be a
reasonable amount in the circumstances
6.5.3 if the relevant Seller fails to deliver to the Buyer and the
Escrow Agents its Objection to the Claim in accordance with
clause 6.5.2, such Seller shall be deemed to have accepted
that the Claim may be paid out of the Escrow Account and the
Escrow Agents shall be authorised to make and continue payment
of the amount thereof in accordance with clause 6.6 hereof
without further action by the Sellers;
6.5.4 if the Seller delivers an Objection to the Claim, upon
resolution of the Claim the amount of such Claim shall be paid
in accordance with clause 6.6 hereof.
6.6 Upon receipt of notice of a Claim, the Escrow Agents shall hold back the
amount of the Claim from any amount that it would otherwise have paid to
the relevant Seller(such amount, a "Held-over Amount").
6.6.1 In the event the Seller shall accept (or be deemed to have
accepted) the Claim, the Buyer shall be entitled to obtain
from the Escrow Agents forthwith payment in the amount of the
Claim Provided Always that the maximum amount that may be paid
to the Buyer out of the Escrow Account in respect of any claim
against either one of the Sellers shall not exceed the amounts
potentially still due to that Seller out of the Escrow
Account.
* CONFIDENTIAL TREATMENT REQUESTED
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6.6.2 In the event that a Seller shall have delivered a notice
of its Objection to an Escrow Claim to the Escrow Agents, the
relevant Seller or the Buyer, as the case may be, shall be
entitled to obtain from the Escrow Agents payment in the
amount of the Claim upon delivery of (i) written direction
executed by both parties authorising the payment and
specifying the amount thereof, or (ii) a written decision of
an appropriate court in England (together with a written
certification by counsel to such party that no appeal has or
may be taken from such decision), in each case specifying the
amount agreed or determined to be payable, in which case the
Escrow Agents shall forthwith pay to the party indicated by
such writing the amount so agreed or awarded in respect of the
Escrow Claim (and to the Seller as and when due any remaining
portion of the Held-over Amount not directed to be paid to the
Buyer) Provided Always that the maximum amount that may be
paid to the Buyer out of the Escrow Account in respect of any
claim against either one of the Sellers shall not exceed the
amounts potentially still due to that Seller in respect of the
Escrow Account.
6.6.3 If an Objection notice given by a Seller indicates that he
requires the Buyer to obtain an opinion from a Queen's
Counsel, the Buyer shall have thirty Business Days from the
date of service of such notice, to provide that Seller and the
Escrow Agents with a copy of a signed Opinion from a Queen's
Counsel selected by the Buyer, of a minimum of 10 years' call,
giving reasonable details of the Claim and indicating that he
regards the amount claimed under clause 6.5.1 or such other
amount as the Queen's Counsel considers reasonable to be a
reasonable amount in the circumstances
6.6.4 If the Buyer does not provide the relevant Seller and the
Escrow Agents with such a copy opinion within such thirty
Business Days, or if the opinion shows a lower amount to be
reasonable than was claimed, the Claim shall be deemed to have
been withdrawn either in full or, if the opinion did show a
lower amount, in respect of the excess and the Escrow Agents
shall pay the amount for which the Claim is deemed to have
been withdrawn to the relevant Seller if it would otherwise
have been due for payment.
6.6.5 If the Buyer does provide the relevant Seller and the Escrow
Agents with such a copy opinion within such thirty Business
Days, the amount in question shall be retained in the Escrow
account until delivery of a written direction or decision
under clause 6.6.2 and the relevant Seller shall reimburse the
Buyer for the reasonable fees of the Queen's Counsel for the
delivery of the above opinion. If both Sellers requested
delivery of such an opinion they shall reimburse such fees in
the Relevant Proportions.
6.7 If the maximum amount which may be paid by the Escrow Agents in respect
of a Claim is insufficient to satisfy such Claim, the Buyer shall be
entitled at any time prior to the date on which a Loan Note becomes due
for issue to the relevant Seller under Schedule 3 to exercise a right of
hold back in respect of the shortfall. If the Buyer exercises such
right, it shall issue a Loan Note for the amount in dispute and if
applicable, a Loan Note for the balance. The Loan Note for the amount in
dispute shall be in the Agreed Form but shall not be transferable and
shall provide for payment to be suspended pending a written
-15-
agreement between such Seller and the Buyer or a written decision of an
appropriate court in England from which no appeal has or may be taken
and shall provide for a right of set off in respect of any such amount
as is ultimately agreed or determined by such a court to be due to the
Buyer from the relevant Seller.
6.8 Subject to clause 6.9, any interest accruing on the Escrow Amount shall
be paid to the Buyer as it arises, save that any interest accruing on a
Held-over Amount after the date on which it would otherwise have been
paid to a Seller shall be retained in the Escrow Account. Such interest
shall be paid to the Seller once the claim has been determined or
agreed, unless (but then only to the extent that) the Held-over Amount
is insufficient to cover any amount determined or agreed to be payable
to the Buyer in respect of the relevant claim (including any amount
determined or agreed to be due in respect of interest or costs), in
which case it shall be paid to the Buyer.
6.9 All payments of interest to the Buyer and/or a Seller shall be paid
after deduction of any tax on such interest for which the Escrow Agents
may be accountable and the Escrow Agents shall be entitled to withdraw
from the Escrow Account an amount equal to such tax, subject to their
providing appropriate certificates.
6.10 The Sellers and the Buyer shall each pay one half of the Escrow Agents'
costs in respect of any work done pursuant to this clause.
7. WARRANTIES AND PRE-COMPLETION CONDUCT
7.1 AFR warrants to the Buyer that each Warranty is true, accurate and not
misleading at the date of the Agreement. PM warrants to the Buyer that
each Warranty is true, accurate and not misleading as at 9 October 2001
by reference to the facts and circumstances as at that date. For this
purpose only, as to PM where there is an express or implied reference in
a Warranty by PM or the Sellers, to the date of this Agreement or to a
date after 9 October 2001, such references as to PM only are to be
construed as a reference to 9 October 2001. Immediately before
Completion, AFR is deemed to warrant to the Buyer, and PM in respect of
Warranties 1.2.1, 3.1.1 and 3.1.3, that each Warranty is true, accurate
and not misleading by reference to the facts and circumstances as at
Completion. For this purpose only, where there is an express or implied
reference in a Warranty to the "date of this Agreement", that reference
is to be construed as a reference to Completion.
7.2 The Sellers acknowledge that the Buyer:
7.2.1 is entering into this Agreement in reliance on each Warranty
which has also been given as a representation and with the
intention of inducing the Buyer to enter into this Agreement;
and
7.2.2 may rely on the Warranties in warranting to any subsequent
buyer of all or any of the Shares or of all or any part of the
undertaking of a Group Company.
7.3 The Warranties are qualified by the facts and circumstances fairly and
specifically disclosed in the Disclosure Letter or in the Second
Disclosure Letter in relation to the Warranties repeated prior to
Completion under clause 7.1. No other knowledge relating to a Group
Company (actual, constructive or imputed) prevents or limits a claim
made by
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the Buyer for breach of clause 7.1. The Sellers shall not invoke the
Buyer's knowledge (actual, constructive or imputed) of a fact or
circumstance which might make a Warranty untrue, inaccurate or
misleading as a defence to a claim for breach of clause 7.1.
7.4 Reference to any facts and circumstances being disclosed shall be deemed
to be a reference to them being fully and specifically disclosed in the
Disclosure Letter or the Second Disclosure Letter in such a manner that:
7.4.1 in the context of the disclosures contained in the Disclosure
Letter:
(a) the significance of the information disclosed and its
relevance to a particular Warranty ought reasonably
to be appreciated by the Buyer, taking into account
the paragraphs or subject matters in relation to
which the information was disclosed;
(b) there is not omitted from the information disclosed
any information which would have the effect of
rendering the information so disclosed misleading in
relation to the relevant Warranty; and
7.4.2 in the context of any document treated as disclosed by the
Disclosure Letter, the matter disclosed is reasonably apparent
from the terms of the document;
and nothing disclosed by the Sellers to the Buyer other than in the
Disclosure Letter and in accordance with the provisions of this clause
shall constitute disclosure for the purposes of this Agreement.
7.5 The Sellers undertake not to make any claim against a Group Company or a
director, officer or employee of a Group Company which they may have in
respect of a misrepresentation, inaccuracy or omission in or from
information or advice provided by a Group Company or a director, officer
or employee of a Group Company for the purpose of assisting the Sellers
to make a representation, give a Warranty or prepare the Disclosure
Letter.
7.6 Each Warranty is to be construed independently and (except where this
Agreement provides otherwise) is not limited by a provision of this
Agreement or another Warranty.
7.7 Between the execution of this Agreement and Completion the Sellers
shall:
7.7.1 ensure that each Group Company complies with schedule 6; and
7.7.2 notify the Buyer immediately if they become aware of a fact or
circumstance which constitutes or which would or might
constitute a breach (whether repudiatory in nature or not) of
clause 7.1 or 7.7.1 or which would or might cause a Warranty
to be untrue, inaccurate or misleading if given in respect of
the facts or circumstances as at Completion.
8. THE BUYERS REMEDIES
8.1 If, at any time before Completion, the Sellers are in material breach of
any provision of this Agreement, the Buyer may by notice in writing to
the Sellers elect to proceed to Completion or terminate this Agreement.
-17-
8.2 If the Buyer terminates this Agreement pursuant to clause 8.1:
8.2.1 the Sellers shall indemnify the Buyer, and keep the Buyer
indemnified, on demand against all its costs relating to the
negotiation, preparation, execution or termination of this
Agreement and the satisfaction of any Condition and of any
legal proceedings against the Sellers in respect of any
failure by them to comply with this Agreement; and
8.2.2 save for clauses 1, 8.2.1, 9, 13-16, and 18-21 each party's
further rights and obligations shall cease immediately on
termination, but termination does not affect a party's accrued
rights and obligations at the date of termination.
9. LIMITATIONS ON THE SELLER'S LIABILITY
9.1 Neither of the Sellers shall be liable in respect of a Relevant Claim:
9.1.1 unless the aggregate amount that would otherwise be
recoverable from the Sellers (but for this sub clause) in
respect of that Relevant Claim exceeds [pound][*]; and
9.1.2 unless and until the aggregate amount that would otherwise be
recoverable from the Sellers (but for this sub clause) in
respect of that Relevant Claim, when aggregated with any other
amount or amounts recoverable in respect of other Relevant
Claims, exceeds [pound][*] and in the event that the
aggregated amounts exceed [pound][*] the Sellers shall be
liable in respect of the total aggregated amounts (subject to
the other limitations in this clause 9) and not the excess
only.
9.2 AFR's total liability in respect of all Relevant Claims and PM's total
liability in respect of all Relevant Claims is limited to the sum of
such amounts as shall have been paid to them or to their order under
this Agreement except in cases of fraud by one of them in relation to
the negotiation of this Agreement when no limit is to attach to that
Seller.
9.3 PM shall not be liable for any Relevant Claim (other than one regarding
title to the Shares sold by him and/or his capacity to sell them) to the
extent that it relates to matters arising after 9 October 2001 and
(subject to the other provisions of this clause 9) AFR shall accordingly
be wholly liable for the relevant part of any such valid Relevant Claim.
9.4 Subject to clause 9.3, AFR shall be liable for only 87% of any valid
Relevant Claim (unless it relates to his title to the Shares sold by him
under this Agreement and/or his capacity to sell them (in which case he
shall be liable for 100% of such claim)) and PM shall be liable for only
13% of any valid Relevant Claim (unless it relates to his title to the
Shares sold by him under this Agreement and/or his capacity to sell them
(in which case he shall be liable for 100% of such claim))
Provided That if the aggregate value of all valid Relevant Claims
(including AFR's share, if applicable) for which PM would otherwise be
liable (other than any regarding title to the Shares sold by him and/or
his capacity to sell them) is less than [pound][*], PM shall have no
liability for any such Claims and AFR's liability for such Relevant
Claim(s) shall be increased accordingly.
* CONFIDENTIAL TREATMENT REQUESTED
-18-
9.5 The Sellers shall not be liable for a Relevant Claim in respect of:
9.5.1 a claim under the Tax Deed or under the Warranties contained
in paragraph 6 of Schedule 5 unless the Buyer has notified the
Sellers of the claim stating in reasonable detail the nature
of the Claim and, if practicable, the amount claimed not later
than 31 January 2008; and
9.5.2 any other Warranty unless the Buyer has notified the Sellers
of the Warranty Claim stating in reasonable detail the nature
of the Warranty Claim and, if practicable, the amount claimed
on or before 30 June 2004.
9.6 A Seller shall not be liable for a Relevant Claim unless proceedings in
respect of the Relevant Claim are issued and served on him within 6
months following the day of notification to him of the Relevant Claim.
9.7 Clauses 9.1, 9.2, 9.5 and 9.6 do not apply in respect of a valid
Relevant Claim involving or relating to breach of clause 7.1 in respect
of a Warranty contained in paragraph 3.1 of Schedule 5.
9.8 The Sellers shall not be liable in respect of any Relevant Claim:
9.8.1 to the extent that it arises or is increased as a result of
the passing of, or a change in, any law, rule, regulation,
interpretation of the law or administrative practice of a
government, government department, agency or regulatory body
or an increase in rates of taxation after the Last Accounting
Date, or any provision or reserve in the Accounts or
management accounts for the year ended 31 December 2001 being
insufficient by reason of any increase in rates of taxation
after the Last Accounting Date;
9.8.2 if it would not have arisen but for any act, omission,
transaction or arrangement carried out at the written request
of or with the written consent of the Buyer before Completion;
9.8.3 if it would not have arisen but for any voluntary act,
omission, transaction or arrangement carried out after
Completion by the Buyer or any Group Company and which the
Buyer ought reasonably have anticipated would give rise to the
loss in question;
9.8.4 to the extent that such Relevant Claim arises, or has
otherwise arisen and is increased, as a result of any
reorganisation or change made in the ownership of the Group
after Completion or any change in any accounting or taxation
policies or practice or accounting reference date of any Group
Company or the Buyer made after Completion;
9.8.5 to the extent that it relates to any loss for which the Buyer
or any Group Company has a right of recovery whether by
contribution or indemnity by insurance or would have been
entitled to recover if valid and adequate insurance:
(a) had been maintained at the relevant time; and
-19-
(b) was of a type in force in relation to any Group
Company at the date of this Agreement or normally
effected by prudent companies carrying on a business
similar to that of any Group Company;
9.8.6 to the extent that it relates to:
(a) any matter in respect of which a provision or reserve
is made in the Statutory Accounts; or
(b) any liability for Taxation arising as a result of an
Event occurring in the ordinary course of business of
any Group Company after the Statutory Accounts Date,
and without limitation, the exercise of any share options
granted prior to Completion by Xxxxx Xxxxxxx Xxxxxxxx Fairrie
or Xxxxxx XxXxxxxxx SHALL be regarded for the purposes of
9.8.6 (b) as an Event occurring in a Group Company's ordinary
course of business but each of the following SHALL NOT be
regarded for the purposes of that sub-clause as an Event
occurring in a Group Company's ordinary course of business:
(i) an Event giving rise to a liability under
section 126 or Schedule 23 of the Finance
Xxx 0000 (UK representatives of
non-residents etc.);
(ii) an Event giving rise to a liability under
Part XVII of the Taxes Act (tax avoidance);
(iii) a distribution within the meaning given by
Part VI or section 418 of the Taxes Act;
(iv) an acquisition or deemed acquisition of
assets, goods, services or business
facilities of any kind (including a loan of
money or a letting, hiring or licensing of
tangible or intangible property) to the
extent that the consideration as treated for
Tax purposes is less than the actual
consideration or, a disposal or supply or
deemed disposal or supply of assets, goods,
services or business facilities of any kind
(including a loan of money or a letting,
hiring or licensing of tangible or
intangible property) to the extent that the
consideration as treated for Tax purposes is
more than the actual consideration;
(v) an Event which results in a Group Company
being liable for Tax for which it is not
primarily liable;
(vi) a Group Company's failure to deduct or
account for Tax or pay Tax when due;
(vii) a disposal of capital assets giving rise to
a balancing charge for capital allowances
purposes;
(viii) an Event giving rise to a liability within
section 419 of the Taxes Act;
-20-
(ix) a release of all or part of any debt to the
extent that a deduction would not be
available for Tax purposes in respect of
such release;
(x) the making of, or providing for, any
redundancy or similar payments not
authorised by the Buyer; and
(xi) an Event which results in a chargeable gain
being attributed to a Group Company under
section 13 or 87 TCGA.
9.8.7 to the extent that the amount of the Relevant Claim is taken
into account in calculating the SPV Revenue for any of the 4
years ending on 31st December 2004 and to the extent that it
thereby reduces the amount payable under Schedule 3.
9.8.8 to the extent that such liability for Tax or other liability
is discharged on or before the Statutory Accounts Date and the
discharge of such liability is recognised in the Statutory
Accounts;
9.8.9 to the extent that such liability for Tax or other liability
is in respect of the actual (as opposed to the deemed)
earning, receipt or accrual for any Tax purposes of any
income, profit or gain which is not recognised in the
Statutory Accounts;
9.8.10 to the extent that such liability for Tax or other liability
would not have arisen or would have been reduced or eliminated
but for the failure or omission on the part of any Group
Company or the Buyer on or after Completion to make any claim,
election, surrender or disclaimer or to give any notice or
consent or to do any other thing, the making, giving or doing
of which was taken into account in the preparation of the
Statutory Accounts and the details of which have been notified
to the Buyer on or before the date on which the relevant
action is required to be taken;
9.8.11 to the extent that such liability to Tax or other liability
would not have arisen but for the withdrawal or amendment by
the Buyer or any Group Company after Completion of any
election, claim, surrender, disclaimer, notice or consent made
by the Group Company prior to Completion in relation to any
Relief;
9.8.12 to the extent that such liability for Tax or other liability
would not have arisen but for any failure or delay by the
Buyer or any Group Company in paying over to any Tax Authority
any payment previously made by the Sellers under the Tax Deed
or for breach of the Warranties contained in paragraph 6 of
Schedule 5 of this Agreement;
9.8.13 to the extent that at the Statutory Accounts Date there was
available to any Group Company any Relief which was not
included or taken into account in the provision or reserve for
Tax in the Statutory Accounts or to the extent that any losses
attributable to periods ending on or before the Statutory
Accounts Date become available to any Group Company and such
repayment, credit, set-off or such losses can, in the opinion
of the Buyer's auditors, be used by any Group Company or the
Buyer to avoid any liability to Tax which but for this
sub-
-21-
paragraph would have given rise to a claim under the Tax Deed
or under the Warranties contained in paragraph 6 of Schedule 5
of this Agreement by the Buyer, to the intent and effect that
such Relief, or losses should as far as possible be utilised
in:-
9.8.13.1 discharge of any liability for Tax which
could otherwise form the subject matter of a
claim against the Sellers under this Deed or
under the Warranties contained in paragraph
6 of Schedule 5 of this Agreement; and
9.8.13.2 reduction of any other liability for Tax of
any Group Company or the Buyer (whether by
way of carry forward and set-off against
future profits or otherwise) and in such
case the amount for which the Sellers would
otherwise be liable under this Deed or under
the Warranties contained in paragraph 6 of
Schedule 5 of the Agreement shall be reduced
by an amount which is equal to the amount of
the said reduction and if the said reduction
occurs after a liability under the Tax Deed
or under the Warranties contained in
paragraph 6 of Schedule 5 of this Agreement
has been discharged, the relevant Group
Company or the Buyer shall be liable to
repay to the Sellers the amount of such
reduction (up to the amount of the liability
previously discharged);
9.8.14 to the extent that such liability arises solely by virtue of
any Group Company's average rate of corporation tax increasing
as a result of becoming a member of the Buyer's group;
9.8.15 to the extent that such liability arises as a result of the
grant of share options or other benefits to or the exercise of
share options by Xxxxx Xxxxxxx Xxxxxxxx Fairrie or Xxxxxx
XxXxxxxxx;
9.8.16 to the extent that such liability is stamp duty arising on
documents other than those documents in the enforcement of
which the Company is interested.
9.9 If the Buyer or any Group Company is able to recover from some other
person any sum in respect of any matter or event which could give rise
to a Relevant Claim, the Buyer will (or will procure that any relevant
Group Company will) take all reasonable steps to recover that sum before
making such Relevant Claim, and any sum recovered will reduce the amount
of such Relevant Claim after deduction of all reasonable costs and
expenses of recovery.
9.10 If a Seller pays the Buyer a sum to settle or discharge a Relevant Claim
and the Buyer or any Group Company subsequently recovers whether by
payment, discount, credit, relief or otherwise from any third party
(including any Tax Authority) a sum which is referable to the Relevant
Claim the Buyer will repay the Seller immediately the Relevant
Proportion of the amount recovered from the third party less the
Relevant Proportion of any reasonable costs and expenses incurred in
recovering the same and less any Tax
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payable on such amount, or if less such amount as is equivalent to the
sum paid by the Seller in settlement or discharge of that Relevant
Claim.
9.11 The Buyer shall not be entitled to recover damages or otherwise obtain
payment, reimbursement or restitution more than once under this
Agreement (including the Tax Deed) in respect of the same loss or
liability.
9.12 If any potential Relevant Claim arises as a result of a contingent or
unquantifiable liability of any Group Company, the Sellers shall be
obliged to pay any sum in respect of the potential Relevant Claim at
such time (if at all) as the liability or a portion thereof either
ceases to be contingent or becomes quantifiable (and then only to the
extent that it does so).
9.13 If the Buyer or a Group Company becomes aware that matters have arisen
which will or are likely to give rise to a Relevant Claim, the Buyer
will (and will procure that any Relevant Group Company will):
9.13.1 immediately notify the Sellers in writing of the potential
Relevant Claim;
9.13.2 not make any admission of liability, agreement or compromise
with any person, body or authority in relation to the
potential Relevant Claim without prior written consent of the
Sellers (not to be unreasonably withheld or delayed);
9.13.3 disclose promptly in writing to the Sellers all information
and documents relating to the potential Relevant Claim or the
matters which will or are likely to give rise to the potential
Relevant Claim;
9.13.4 if requested by the Sellers give each Seller and his
professional advisers reasonable access (at the relevant
Seller's cost) to:
(a) the personnel of the Buyer and/or any relevant Group
Company in order to interview the personnel;
(b) any relevant premises, chattels, accounts, documents
and records within the power, possession or control
of the Buyer and/or any relevant Group Company in
order to, at the Sellers' own expense, examine and
photograph the premises and chattels and to examine,
photograph and take copies of the accounts, documents
and records;
9.13.5 take such action as either Seller may reasonably request to
avoid, resist, contest, defend, compromise or remedy the
potential Relevant Claim or the matters which will or are
likely to give rise to such Relevant Claim and in each case on
the basis that the Sellers shall indemnify the Buyer in the
Relevant Proportions for all reasonable costs incurred as a
result of a request by the Sellers;
9.13.6 in connection with any actions or proceedings relating to the
matter or Relevant Claim, and subject to the Buyer being
indemnified for all reasonable costs incurred, use advisers
nominated by the Sellers and, if the Sellers (or the relevant
Seller if only one of them is potentially liable) request,
consult with the
-23-
Sellers or relevant Seller regarding the exclusive conduct of
such actions or proceedings.
9.14 Nothing in this clause 9 shall in any way restrict or limit the Buyer's
or any relevant Group Company's common law duty to mitigate its loss.
9.15 The Buyer confirms to the Sellers that it is not aware at the date of
this Agreement, after discussion with its accountants and solicitors, of
any matter or thing which in its reasonable opinion will or may give
rise to any Relevant Claim.
9.16 Save as provided herein, the sole remedy of the Buyer for any breach of
any of the Warranties or any other breach of this Agreement by the
Sellers shall be an action for damages and the Buyer shall not be
entitled to terminate or rescind this Agreement.
9.17 Nothing in clause 9 shall have the effect of limiting or restricting any
liability of a Seller in respect of a Relevant Claim arising as a result
of any fraud committed by that Seller in connection with the
negotiation, preparation, execution and performance of this Agreement.
10. USE OF INTELLECTUAL PROPERTY RIGHTS
Each of the Sellers shall not, either alone or jointly with, through or
as manager, adviser, consultant or agent for a person, directly or
indirectly use or authorise, encourage or assist any person to use in
connection with a business which competes, directly or indirectly, with
a business of a Group Company as operated at the date of this Agreement,
any of the Intellectual Property Rights (in particular, a name
consisting of or including word "SPV") or use in that connection
anything which is intended, or is likely to be confused with, any of the
Intellectual Property Rights.
11. FURTHER UNDERTAKINGS BY THE SELLERS
11.1 Each of the Sellers undertakes to the Buyer, for itself and as agent
and trustee for each Group Company, that subject to clause 11.2, he will
not do any of the following things:
11.1.1 for a period of 4 years starting on the date of Completion,
either alone or jointly with, through, or as adviser to or
manager for, any person, carry on or be engaged, concerned or
interested in a business which competes with a Group Company
in respect of the SPV Core Business Provided that a Seller may
be involved in a business if not more than 5% of the revenue
of that business arises from activities that are competitive
with the SPV Core Business as at the time of such involvement;
11.1.2 for a period of 4 years starting on the date of Completion, do
or say anything which is harmful to a Group Company's goodwill
(as subsisting at the date of this Agreement) or which may
lead a person who has dealt with a Group Company at any time
during the twelve months prior to the date of this Agreement
to cease to deal with a Group Company in respect of the SPV
Core Business on substantially equivalent terms to those
previously offered or at all;
11.1.3 for a period of 4 years starting on the date of Completion, on
his own account or in conjunction with or on behalf of any
other person in respect of the products
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or services of a business of a Group Company, either seek to
obtain orders from, or do business with, or encourage another
person to obtain orders from or do business with, a person who
has been a customer of that business at any time during the
twelve months prior to the date of this Agreement, in respect
of the SPV Core Business provided that a Seller may be
involved in a business if not more than 5% of the revenue of
that business arises from activities that are competitive with
the SPV Core Business as at the time of such involvement;
11.1.4 for a period of 4 years starting on the date of this
Agreement, engage, employ, solicit or contact with a view to
his engagement or employment by another person, a person who
was a director, officer, employee or manager of a Group
Company at the date of this Agreement, where the person in
question either has Confidential Information or would be in a
position to exploit a Group Company's trade connections; or
11.1.5 for a period of 4 years starting on the date of Completion,
seek to contract with or engage (in such a way as to affect
adversely a Group Company in respect of the SPV Core Business)
a person who has been contracted with or engaged to supply
services to that Group Company at any time during the twelve
months prior to the date of this Agreement.
11.1.6 pending Completion each of the Sellers shall not, directly or
indirectly:
(i) enter into or be involved in any discussion or
negotiation with any person except the Buyer in
connection with the sale of any Group Company or the
business or any part of the business of or (except in
the usual course of business) any of the assets of
the business of any Group Company;
(ii) enter into an agreement or arrangement with any
person except the Buyer or any person designated by
the Buyer in connection with the sale of any Group
Company or the business or any part of the business
of or (except in the usual course of business) any of
the material assets of any Group Company; or
(iii) make available to any person except their own
advisors, the Buyer, its directors, officers, duly
authorised representatives, advisers or agents any
information relating to the sale of any Group Company
or the business or any part of the business of or
(except in the usual course of business) any of the
assets of any Group Company (except in the usual
course of business).
11.2 Nothing in this clause 11 shall prevent either Seller from:
11.2.1 holding or acquiring any business or the shares or other
securities of any company if:
(i) not more than 5 per cent of the business or that
company's business is competitive with the SPV Core
Business; and
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(ii) the principal reason for doing so is not the
ownership of an interest in that part of the business
in question;
11.2.2 holding or acquiring shares in any public company if the
shares in question represent less than 5% of the issued shares
of the relevant company.
11.3 Each undertaking in clause 11.1 constitutes an entirely independent
undertaking and if one or more of the undertakings is held to be against
the public interest or unlawful or in any way an unreasonable restraint
of trade the remaining undertaking shall continue to bind each of the
Sellers.
11.4 On receiving the Buyer's reasonable request each of the Sellers shall
(at the Buyer's cost):
11.4.1 do and execute, or arrange to be done and executed, each act,
document and thing reasonably requested by the Buyer from the
relevant Seller to implement this Agreement; and
11.4.2 give to the Buyer all documents in their possession (if any)
that belong to a Group Company and copies of any other
documents that the Buyer might reasonably request.
12. CONFIDENTIAL INFORMATION
12.1 Each of the Sellers undertakes to the Buyer, for itself and as agent and
trustee for each Group Company, that before and after Completion each of
the Sellers shall not use or disclose to any person Confidential
Information he has or acquires and shall make every reasonable effort to
prevent the use or disclosure of Confidential Information by any third
party not authorised by the Company to have it.
12.2 Clause 12.1 does not apply to disclosure of Confidential Information:
12.2.1 to a director, officer or employee of the Buyer or of a Group
Company whose function requires him to have the Confidential
Information;
12.2.2 required to be disclosed provided that the disclosure shall be
made after consultation with the Buyer and after taking into
account the Buyer's reasonable requirements as to its timing,
content and manner of making or despatch; or
12.2.3 to an adviser for the purpose of advising the relevant Seller
in connection with his affairs provided that such disclosure
is essential for these purposes and is on the basis that
clause 12.1 applies to the disclosure by the adviser.
13. GUARANTOR'S OBLIGATIONS
13.1 In consideration of the Sellers entering into this Agreement, the
Guarantor irrevocably and unconditionally:
13.1.1 guarantees to the Sellers the due and punctual payment,
observance and performance by the Buyer of all of the Buyer's
liabilities and obligations, whether present or future,
express or implied, actual or contingent, under or
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arising out of this Agreement, including any liability or
obligation to pay any sums due and payable under the Loan
Notes; and
13.1.2 agrees as a primary obligation to indemnify each of the
Sellers from time to time on demand against each loss,
liability and cost which he may incur as a result of any of
the obligations of the Buyer under the Agreement being or
becoming void, voidable, unenforceable or ineffective for any
reason whatsoever whether or not known to either Seller, the
amount of such loss being the amount which the relevant Seller
would otherwise have been entitled to recover from the Buyer.
13.2 The Sellers will not be obliged before exercising any of the rights,
powers or remedies conferred upon them in respect of the Guarantor
under this clause or by law:
13.2.1 to make any demand of the Buyer;
13.2.2 to enforce or seek to enforce any claim, right or remedy
against the Buyer or any other person; or
13.2.3 to make or file any claim or proof in connection with the
insolvency of the Buyer or any other person; or
13.2.4 to take any action or obtain judgement in any court against
the Buyer or any other person.
13.3 Neither the liability of the Guarantor under this clause nor the rights,
powers and remedies conferred on the Sellers under this clause or by law
will in any way be released, prejudiced, diminished or affected by any
of the following:
13.3.1 any time or other indulgence being granted to the Buyer in
respect of its obligations under the Agreement;
13.3.2 any amendment to, or any variation, waiver or release of, any
obligation of the Buyer under this Agreement;
13.3.3 any failure to take, or fully to take, any security
contemplated by this Agreement or otherwise agreed to be taken
in respect of the Buyer's obligations under the Agreement;
13.3.4 any failure to realise or fully to realise the value of, or
any release, discharge, exchange or substitution, of any such
security taken in respect of the Buyer's obligations under the
Agreement;
13.3.5 the insolvency, incapacity, disability, or any change in the
constitution, name, control or style of, the Buyer, the
Guarantor or any other person;
13.3.6 any invalidity, illegality, unenforceability, irregularity or
frustration in any respect of any of the liabilities or
obligations referred to in clause 13.1.1; and
13.3.7 any act, omission event or circumstances which, but for this
provision, might operate to prejudice, affect or otherwise
affect the liability of the Guarantor
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under this clause or any of the rights, powers or remedies
conferred upon the Sellers under this clause or by law.
14. ANNOUNCEMENTS
14.1 Subject to clause 14.2, none of the parties shall, before or after
Completion, and, before Completion, the Sellers shall procure that the
Company shall not, make or send a public announcement, communication or
circular concerning the transactions referred to in this Agreement
unless it has first obtained the other parties' written consent which
may not be unreasonably withheld or delayed.
14.2 Clause 14.1 does not apply to a public announcement, communication or
circular required by law, or by a governmental authority or other
authority with relevant powers to which a party is subject or submit,
whether or not the requirement has the force of law, provided that the
public announcement, communication or circular shall be made after
consultation with the other parties and after taking into account the
reasonable requirements of the other parties as to its timing, content
and manner of making or despatch.
15. COSTS
Except where this Agreement or the relevant document provides otherwise,
each party shall pay its own costs relating to the negotiation,
preparation, execution and performance by it of this Agreement and of
each document referred to in it.
16. GENERAL
16.1 A variation of this Agreement is valid only if it is in writing and
signed by or on behalf of each party.
16.2 The failure to exercise or delay in exercising a right or remedy
provided by this Agreement, or by law, does not impair or constitute a
waiver of the right or remedy or an impairment of, or a waiver of, other
rights or remedies. No single or partial exercise of a right or remedy
provided by this Agreement or by law prevents further exercise of the
right or remedy or the exercise of another right or remedy.
16.3 The parties' rights and remedies contained in this Agreement are
cumulative and not exclusive of rights or remedies provided by law.
16.4 Except to the extent that they have been performed and except where this
Agreement provides otherwise, the obligations contained in this
Agreement remain in force after Completion.
16.5 If a party fails to pay a sum due from it under this Agreement on the
due date of payment in accordance with the provisions of this Agreement,
that party shall pay interest on the overdue sum from the due date of
payment until the date on which its obligation to pay the sum is
discharged at the rate of 2 per cent. per annum over the base lending
rate of Barclays Bank plc (whether before or after judgement). Interest
accrues and is payable from day to day, but without compounding.
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16.6 Except as provided in clause 18.6, a person who is not a party to this
Agreement has no right under the Contracts (Rights of Third Parties) Xxx
0000 to enforce any term of this Agreement, but this does not affect any
right or remedy of a third party which exists or is available apart from
that Act.
17. SET-OFF
17.1 The Buyer shall not be entitled to set off any liability of either
Seller to the Buyer in respect of a Relevant Claim against any liability
of the Buyer to that Seller under this Agreement, except as provided in
clause 6, or in the Loan Notes, under the Tax Deed and subject to clause
9.
17.2 If the Buyer does exercise a right of set off in accordance with clause
17.1, the withholding by the Buyer shall not discharge the Sellers from
their obligations under this Agreement (save to the extent of the set
off), whether under clause 7, or otherwise, or under the Tax Deed. If,
however, it is subsequently agreed between the relevant parties or
determined that the Buyer was not entitled to withhold anything, or that
it withheld more than it was entitled to withhold, the Buyer shall pay
to the Seller the amount improperly withheld, together with interest
under clause 16.5, save that the Buyer shall be entitled to a credit
against such obligation for any interest paid to the relevant Seller
under clause 6.
18. ENTIRE AGREEMENT
18.1 This Agreement and each document referred to in it constitutes the
entire agreement and supersedes any previous agreements between the
parties relating to the subject matter of this Agreement.
18.2 The Buyer acknowledges and represents that it has not relied on or been
induced to enter into this Agreement and the documents referred to in it
by a representation, warranty or undertaking (whether contractual or
otherwise) given by the Sellers other than the Warranties or otherwise
as set out in this Agreement or each document referred to in it.
18.3 The Sellers are not liable to the Buyer (in equity, contract or tort
(including negligence), under the Xxxxxxxxxxxxxxxxx Xxx 0000 or in any
other way) for a representation, warranty or undertaking that is not set
out in this Agreement or any document referred to in this Agreement.
18.4 The Sellers acknowledge and represent that they have not relied on or
been induced to enter into this Agreement and the documents referred to
in it by a representation, warranty or undertaking (whether contractual
or otherwise) given by the Buyer other than as set out in this Agreement
or any document referred to in this Agreement.
18.5 The Buyer is not liable to the Sellers (in equity, contract or tort
(including negligence), under the Xxxxxxxxxxxxxxxxx Xxx 0000 or in any
other way) for a representation, warranty or undertaking relating to the
subject matter of this Agreement that is not set out in this Agreement
or any document referred to in this Agreement.
18.6 The Sellers agree that no Buyer's Group Undertaking or adviser or
provider of finance to the Buyer or other Buyer's Group Undertaking
shall have any liability to the Sellers (in
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equity, contract or tort (including negligence), under the
Xxxxxxxxxxxxxxxxx Xxx 0000 or in any other way) for a representation,
warranty or undertaking relating to the subject matter of this Agreement
that is not set out in this Agreement or any document referred to in
this Agreement.
18.7 The Buyer and the Sellers agree that neither party shall bring any
action against any of the others or against any Buyer's Group
Undertaking in relation to (a) any previous agreement(s) between them
relating to the subject matter of this Agreement or (b) any
representation, warranty or undertaking relating to the subject matter
of this Agreement other than the Warranties or otherwise as set out in
this Agreement or each document referred to in it, save that this clause
shall not affect any rights that either of the Sellers may have against
each other under any other agreement between them in relation to the
Group.
In particular, but without limitation, the only remedy available to the
Buyer for breach of the Warranties shall be the right to terminate under
clause 8 prior to Completion and/or to seek damages for breach of
contract under the terms of this Agreement.
18.8 Nothing in this clause 18 shall have the effect of limiting or
restricting any liability arising as a result of any fraud committed by
any of the parties in connection with the negotiation, preparation,
execution and performance of this Agreement and of each document
referred to in it.
19. ASSIGNMENT
19.1 The Sellers agree that the benefit of every provision in this Agreement
is given to the Buyer for itself and its successors in title and
assigns. Accordingly, the Buyer (and its successors and assigns) may,
without the consent of the Sellers, assign the benefit of all or any of
the Sellers' obligations under this Agreement and/or any other benefit
arising under or out of this Agreement.
Provided Always that the Buyer shall not be entitled to assign the
benefit of any of the provisions of this Agreement or to transfer
ownership of the Shares without the written consent of the Sellers
(except to a member of the Buyer's consolidated group and provided the
Guarantor remains obligated) unless it has first paid to the Sellers all
sums potentially due to them under the Loan Notes, measured at their
outstanding face value (or potential face value if they have not yet
been issued) inclusive of interest up to the date of payment, or out of
the Escrow Account free from any set off that has not been agreed by the
relevant Seller.
19.2 Subject to the limited transferability rights set out in the Escrow Loan
Notes, each of the Sellers shall be entitled either in whole or in part
to assign, or otherwise transfer, declare a trust of the benefit of, or
in any other way alienate any of his rights under this Agreement
(including his rights under the Loan Notes or to receive those Loan
Notes that have not yet been issued).
20. NOTICES
20.1 A notice or other communication under or in connection with this
Agreement (a "Notice") shall be:
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20.1.1 in writing;
20.1.2 in the English language; and
20.1.3 delivered personally or sent by first class post pre-paid
recorded delivery (and air mail if overseas) or by fax to the
party due to receive the Notice to the address set out in
clause 20.3 or to another address, person, or fax number
specified by that party by not less than seven days' written
notice to the other party received before the Notice was
despatched.
20.2 Unless there is evidence that it was received earlier, a Notice is
deemed given if:
20.2.1 delivered personally, when left at the address referred to in
clause 20.1.3;
20.2.2 sent by mail, except air mail, two Business Days after posting
it;
20.2.3 sent by air mail, six Business Days after posting it; and
20.2.4 sent by fax, when confirmation of its transmission has been
recorded by the sender's fax machine.
20.3 The address referred to in clause 20.1.3 is:
NAME OF PARTY ADDRESS FACSIMILE NO. MARKED FOR THE
ATTENTION OF
AFR Tower Mill 0189 285 2587
Xxxx Xxxxx
Xxxxxxxxxxx
Xxxx Xxxxxx XX0 0XX
COPY TO SPV Management Limited 020 7220 7819 Xxxxxx
00 Xxxxxx Xxxxxx XxXxxxxxx/Xxxxx
Xxxxxx Xxxxxxx
XX0X 0XX
COPY TO Eversheds 020 7919 4919 Xxxxx Xxxxxxx
Senator House
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
PM The Old Coach House 01580 819 154
Shoyswell Xxxxx
Xxxxxxxxxxx Xxxx
Xxxxxxxxxx
Xxxx Xxxxxx
XX00 0XX
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COPY TO Xxxxxxxx Xxxxxx 020 7247 5091 Xxxxxx Xxxxxxx
Xxxxxxxx Xxxxx
00 Xx Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
THE BUYER Wilmington Trust x00000000000 Xxxxxx Xxxxx,
Xxxxxx Square North
AND/OR THE 0000 X. Xxxxxx Xxxxxx Senior Vice President
GUARANTOR Xxxxxxxxxx
Xxxxxxxx 00000
XXX
COPIES TO Wilmington Trust x00000000000 Xxxxx X Xxxxxxxx, Esq.
Xxxxxx Square North
0000 X.Xxxxxx Xxxxxx
Xxxxxxxxxx
Xxxxxxxx 00000
XXX
Xxxxxxxx Chance LLP x000000000000 Xxxxxx Xxxxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
(Ref: MER/W1539/00081).
21. GOVERNING LAW AND JURISDICTION
21.1 This Agreement is governed by English law.
21.2 The courts of England have exclusive jurisdiction to settle any dispute
arising from or connected with this Agreement (a "DISPUTE").
21.3 The parties agree that they shall not commence proceedings in any court
other than the courts of England.
21.4 The parties agree that the documents which start any Proceedings and any
other documents required to be served in relation to those Proceedings
may be served on the Seller in accordance with clause 21. These
documents may, however, be served in any other manner allowed by law.
21.5 The Guarantor irrevocably agrees that any notice or document may be
sufficiently and effectively served on it in connection with proceedings
in England by service on the Buyer, if no replacement agent has been
appointed and notified to the Sellers under clause 21.7, or on the
replacement agent if one has been so appointed and notified to the
Sellers.
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21.6 Any notice or document served pursuant to this clause shall be marked
for the attention of:
21.6.1 The Company Secretary at the registered office of the Buyer or
such other address within England as may be notified to the
Sellers by the Guarantor; or
21.6.2 such other person as is appointed as agent for service
pursuant to clause 21.7 below.
21.7 If the agent referred to in clause 21.5 (or any replacement agent
appointed pursuant to this clause) at any time ceases for any reason to
act as such, the Guarantor shall appoint a replacement agent to accept
service having an address for service in England and shall notify the
Sellers of the name and address of the replacement agent. Failing such
appointment and notification, the Sellers shall be entitled by notice to
the Guarantor to appoint such a replacement; provided that in cases
where service is effected upon a replacement agent appointed by the
Sellers in accordance with this sub-clause a copy of the relevant notice
or document shall at the same time be forwarded to the last known
business address of the Guarantor.
22. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which when executed and delivered is an original and all of which
together evidence the same agreement.
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EXECUTED by the parties:
Signed by XXXXXXX XXXXXXX ) X. X. XXXXXX
XXXXXX )
Signed by PIERS MINOPRIO ) P. MINORPIO
Signed by XXXXX XXXXX ) X. XXXXX
a duly authorised )
representative of )
WILMINGTON TRUST )
(UK) LIMITED )
Signed by XXXXXX XXXXX ) X. XXXXX
a duly authorised )
representative of )
WILMINGTON TRUST )
CORPORATION )
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