EXHIBIT 10
CONFORMED COPY
SETTLEMENT AGREEMENT
BY AND AMONG
THE CRONOS GROUP,
CRONOS CONTAINERS N.V.,
CONTRIN WORLDWIDE CONTAINER LEASING GmbH,
CONTRIN UEBERSEE TRANSPORTGERAETE
HANDELSGESELLSCHAFT m.b.h. & CO KG 1989,
AND
KARADAS GmbH
Dated as of November 17, 2003
TABLE OF CONTENTS
Page
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Article I DEFINED TERMS.............................................................................. 6
1.1 Certain Defined Terms...................................................................... 6
1.2 Other Defined Terms........................................................................ 9
Article II CRONOS' PAYMENTS IN SETTLEMENT OF CONTRIN PLAINTIFFS' CLAIMS............................... 10
2.1 The Initial Payment........................................................................ 10
2.2 The Cronos Net Proceeds: Minimum Payment................................................... 11
2.3 The 2005 Installment....................................................................... 16
2.4 The Final Payment.......................................................................... 17
2.5 Interest on Past Due Payments.............................................................. 21
2.6 Responsibility For Payments; Payees; Method of Payment..................................... 21
Article III CONTRIN'S PROSECUTION OF THE AUSTRIAN ACTION; REGISTRATION AND ASSIGNMENT OF AUSTRIAN
JUDGMENT TO CRONOS; ENFORCEMENT OF THE PARTIES' CHARGING ORDERS AGAINST THE AMERSHAM
ESTATE..................................................................................... 22
3.1 Prosecution of the Austrian Action......................................................... 22
3.2 Contrin Freezing Injunction; Preservation of Amersham Freezing Injunction.................. 22
3.3 Registration of Austrian Judgment in the U.K.; Assignment to Cronos........................ 23
3.4 Deposit of Austrian Charging Order Net Proceeds to the Escrow.............................. 25
3.5 Consequences of CWC's Abandonment of the Austrian Action................................... 27
Article IV THE ESCROW................................................................................. 28
4.1 Establishment of the Escrow Account........................................................ 28
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TABLE OF CONTENTS
Page
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4.2 Deposits and Disbursements From the Escrow Account......................................... 29
Article V DISMISSAL OF THE CONTRIN ACTIONS; EFFECTIVE DATE OF THIS AGREEMENT......................... 31
5.1 Dismissal of the Contrin Actions........................................................... 31
5.2 Calculation of the Effective Date.......................................................... 32
Article VI RELEASE OF THE RELEASED PERSONS............................................................ 32
Article VII PARTIES TO COOPERATE IN THE PROSECUTION OF THE AUSTRIAN ACTION AND THE FORECLOSURE OF
THE PARTIES' CHARGING ORDERS UPON THE AMERSHAM ESTATE; TOEMT............................... 33
7.1 Cooperation in the Prosecution of the Austrian Action...................................... 33
7.2 Cooperation in the Enforcement of the Parties' Charging Orders............................. 34
7.3 Cooperation in the Foreclosure and Sale of the Amersham Estate............................ 34
7.4 Cooperation in the Liquidation of TOEMT.................................................... 35
Article VIII AMENDMENT OF CONTRIN MANAGEMENT AGREEMENTS................................................. 36
Article IX MISCELLANEOUS.............................................................................. 37
9.1 Execution and Validity of this Agreement................................................... 37
9.2 Karadas' and CG's Authority................................................................ 38
9.3 Disposals Action Settlement Agreement...................................................... 38
9.4 Further Assurances......................................................................... 38
9.5 Further Use of this Agreement.............................................................. 39
9.6 Return of Discovery Documents.............................................................. 39
9.7 Application of Austrian Stamp Duty......................................................... 40
9.8 Notices.................................................................................... 41
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TABLE OF CONTENTS
Page
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9.9 Governing Law.............................................................................. 43
9.10 Consent to Jurisdiction.................................................................... 43
9.11 Expenses................................................................................... 44
9.12 Judgment Currency.......................................................................... 44
9.13 Rule of Construction....................................................................... 45
9.14 Binding Provisions......................................................................... 45
9.15 Entire Agreement........................................................................... 45
9.16 Amendments/Waivers......................................................................... 46
9.17 Counterparts............................................................................... 46
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LIST OF EXHIBITS
Primary Section
Exhibit Description Reference
------- ----------- ---------
A Form of Escrow Agreement 4.1
B List of Contrin Container Owners Art. VIII
C Form of Amendment to Container Managements Art. VIII
Agreement between CNV and Contrin
Container Owners
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SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT ("Agreement") is made and entered
into as of this 17th day of November, 2003, by and among THE CRONOS GROUP, a
Luxembourg societe anonyme holding ("CG"), CRONOS CONTAINERS N.V., a Netherlands
Antilles corporation and a wholly-owned subsidiary of CG ("CNV") (CG and CNV
referred to collectively as "Cronos" or the "Cronos Defendants"), CONTRIN
WORLDWIDE CONTAINER LEASING GmbH, an Austrian company ("CWC"), CONTRIN UEBERSEE
TRANSPORTGERAETE HANDELSGESELLSCHAFT m.b.h. & Co KG 1989, an Austrian
corporation ("CUT 89"), and KARADAS GmbH, an Austrian company ("Karadas") (CWC,
CUT 89, and Karadas referred to collectively as "Contrin"), with reference to
the following:
A. On August 8, 2000, CWC filed an action against CG in
the Luxembourg District Court (Roll No. 67154) (the "Luxembourg Action") seeking
recovery of U.S. $2,600,000, plus interest and costs, arising out of the
transfer of U.S. $2,600,000 by CWC, over the period of July 21, 1994 through
November 24, 1994 (the "$2,600,000 1994 Transfer") to a bank account maintained
with Barclays Bank, Amersham, England, under the control of CG's former
Chairman, Xxxxxx X. Xxxxxxx ("X. Xxxxxxx"), and his wife, Xxxxxx Xxxxxxx ("M.
Palatin").
B. On August 2, 2001, CWC filed an action in the High
Court of Justice, London, England (2001 Folio No. 882) (the "CWC $500,000
Action")
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against CNV, seeking the recovery of U.S. $500,000, plus interest and costs,
arising from a distribution CWC claims CNV owed CWC but did not make for the
second through the fourth calendar quarters of 1996.
C. On September 18, 2002, CUT 89 and Karadas, on behalf
of itself and the other partners in Contrin Konsortium 1988/S, an Austrian
partnership ("CK 1988/S") and Contrin Konsortium 1988/1, an Austrian partnership
("CK 1988/1") (CK 1988/S and CK 1988/1 referred to collectively hereinafter as
the "Contrin Partnerships", and Karadas and the Contrin Partnerships referred to
collectively hereinafter as the ("Disposals Action Claimants"), filed an action
in the High Court of Justice, London, England (No. HT-02-367) (the "Disposals
Action") against CNV, seeking damages by reason of CNV's alleged failure to
properly remit proceeds from the sale of containers managed by CNV for the
Disposals Action Claimants under container management agreements between the
Disposals Action Claimants and CNV. (The Luxembourg Action, the CWC $500,000
Action, and the Disposals Action are referred to collectively hereinafter as the
"Contrin Actions", and the plaintiffs identified in the Contrin Actions are
referred to collectively hereinafter as the "Contrin Plaintiffs").
D. On November 23, 2001, Cronos Equipment (Bermuda)
Limited, a Bermuda company ("CEB") and a wholly-owned subsidiary of CG, filed an
action in the High Court of Justice, London, England (No. HQ01X04865, later
designated 2002 Folio No. 1248) (the "Collection Action") against S. Palatin
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seeking recovery of the balance due under a judgment secured by CEB against S.
Palatin on February 8, 2000 in the Supreme Court of New York, U.S.A. CEB secured
a judgment against S. Palatin from the High Court of Justice in the Collection
Action on May 23, 2003 in the amount of U.S. $1,286,618, together with interest
of U.S. $164,851, for a total judgment of $1,451,459. On August 13, 2003, CEB
obtained from the High Court of Justice a charging order absolute, in the amount
of U.S. $1,451,469 (the "Collection Action Charging Order), against S. Palatin's
interest in Xxx Xxx Xxxxxxx, Xxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxxxxxx, Xxxxxxx
(Title No. BM178381) (the "Amersham Estate").
E. On December 11, 2001, CNV filed an action in the High
Court of Justice, London, England (2001 Folio No. 1353) (the CNV $500,000
Action") against S. Palatin, M. Palatin, and Klamath Enterprises S.A., a
Panamanian corporation ("Klamath") seeking recovery of $500,000, plus interest
and costs, arising from S. Palatin's alleged diversion of $500,000 from CNV in
or about December 1994. On May 2, 2003, the High Court of Justice entered its
judgment awarding CNV U.S. $100,000, together with interest in the amount of
U.S. $75,200, against S. Palatin, and awarding U.S. $400,000, together with
interest of U.S. $300,800, against S. Palatin and M. Palatin, for a total
recovery of U.S. $876,000. On July 11, 2003, the High Court of Justice entered
its charging order absolute against S. Palatin in the amount of U.S. $876,000,
charging S. Palatin's interest in the Amersham Estate, and entered a separate
charging order absolute against M. Palatin, charging her interest in the
Amersham Estate in the
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amount of U.S. $700,800 (said two charging orders, together with the Collection
Action Charging Order, referred to as the "Cronos Charging Orders").
F. On June 1, 2000, CNV and CG filed an action in the
High Court of Justice, London, England (2000 Folio No. 626) (the "Indemnity
Action"). The Indemnity Action, as amended on March 30, 2001, names as
defendants S. Palatin, M. Palatin, and Klamath. By the Indemnity Action, CNV and
CG seek indemnity from the defendants by reason of the $2,600,000 1994 Transfer
(Recital (A)). On March 29, 2001, the High Court of Justice, upon the
application of CNV and CG, issued its freezing injunction (the "Amersham
Freezing Injunction"). By the terms of the Amersham Freezing Injunction, and
subject to the terms thereof, S. Palatin, M. Palatin, and Klamath are prohibited
from selling, charging, or in any other way disposing of or dealing with or
diminishing the value of the Amersham Estate.
G. The Contrin Plaintiffs have vigorously prosecuted the
Contrin Actions. The Contrin Plaintiffs and their counsel have participated in
settlement discussions with the Cronos Defendants and their counsel because of
the uncertainty, time, and expense entailed in the litigation process. The
Contrin Plaintiffs and their counsel believe that the terms of this settlement
are reasonable and fair to the Contrin Plaintiffs and to the partners of the
Contrin Partnerships, and provide substantial benefits to the Contrin Plaintiffs
and to the partners of the Contrin Partnerships.
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H. The Cronos Defendants deny any liability whatsoever
to the Contrin Plaintiffs and to the partners of the Contrin Partnerships. The
Cronos Defendants have participated in settlement discussions with the Contrin
Plaintiffs and their counsel because of the uncertainty, time, and expense
entailed in the litigation process, and because defending the Contrin Actions
has distracted the Cronos Defendants, and their officers and directors, from the
conduct of their businesses.
I. Trial in the Disposals Action was set to commence on
October 6, 2003. On October 3, 2003, the Disposals Action Claimants and CNV
entered into a settlement agreement (the "Disposals Action Settlement
Agreement"). Pursuant to the terms of the Disposals Action Settlement Agreement,
the parties agreed to enter into good faith negotiations with a view to settling
all of the Contrin Actions. The Disposals Action Settlement Agreement further
provided for the payment of monetary consideration by CNV to the Disposals
Action Claimants in the event that a global settlement of the Contrin Actions
was not reached by November 5, 2003. Promptly after the parties entered into the
Disposals Action Settlement Agreement they entered into good faith settlement
negotiations to settle all of the Contrin Actions. The parties resolved all
substantive issues on November 6, 2003, and, on that date, pursuant to the terms
of the Disposals Action Settlement Agreement and in contemplation of entering
into this Agreement, CNV paid $300,000 to CK 1988/1 for and on behalf of the
Disposals Action Claimants. This Agreement reflects the terms of the parties'
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settlement of the Contrin Actions, and supercedes the Disposals Action
Settlement Agreement.
IN CONSIDERATION OF THE PREMISES, and subject to the terms and
conditions of this Agreement, Contrin and Cronos hereby agree as follows:
ARTICLE I
DEFINED TERMS
1.1 CERTAIN DEFINED TERMS
The defined terms used in this Agreement shall, unless the
context otherwise requires, have the meanings specified in this Article 1. The
singular shall include the plural and the masculine gender shall include the
feminine and neuter, and vice versa, as the context requires.
"Affiliate" means, when used with reference to a specified
person, (i) any person that directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with the
specified person, (ii) any person owning or controlling 10% or more of the
outstanding voting securities of the specified person, or (iii) any person who
is an officer, director, or managing director of, general partner in, or serves
in a similar capacity to the specified person or of which the specified person
is an officer, director, managing
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director or general partner or with respect to which the specified person serves
in a similar capacity.
"Austrian Action" refers to the civil action to be filed by
CWC in Austria against S. Palatin seeking recovery of the $2,600,000 1994
Transfer from S. Palatin.
"Austrian Judgment" refers to the final, non-appealable
judgment secured by CWC in the Austrian Action.
"Claims Settled" refers to all claims, demands, rights,
liabilities, and causes of action of every nature and description, known or
unknown, asserted in the Contrin Actions or that might have been asserted in the
Contrin Actions or in any other court or tribunal by the Contrin Plaintiffs, or
any of them, in connection with or arising out of the acts, facts, transactions,
occurrences, or omissions alleged or otherwise referred to in the Contrin
Actions. The term "Claims Settled" includes all claims asserted or that might be
asserted by the Contrin Container Owners, other than the Disposals Action
Claimants, similar to those asserted by the Disposals Action Claimants in the
Disposals Action.
"Contrin Group" refers to the Contrin Plaintiffs, the partners
of the Contrin Partnerships, and to each and every Affiliate of the Contrin
Plaintiffs; provided, however, that the Contrin Group does not include
Transocean Equipment Manufacturing and Trading Limited, a U.K. company, or
Transocean Equipment Manufacturing and Trading Limited, an Isle of Man company.
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"Effective Date" refers to the first business day subsequent
to the filing of dismissals of both the CWC $500,000 Action and the Disposals
Action as required by Section 5.1 hereof.
"Escrow" or "Escrow Account" refers to the escrow account
established with the Escrow Agent.
"Escrow Agent" refers to an international bank having offices
in London, England, selected jointly by CG and by Karadas pursuant to the
provisions of Section 4.1 hereof.
"Escrow Agreement" refers to an escrow agreement substantially
in the form of Exhibit A hereto.
"Parties" refers collectively to the Contrin Plaintiffs and to
the Cronos Defendants.
"Parties' Charging Orders" refers collectively to the Cronos
Charging Orders and to the Austrian Charging Order.
"person" refers to an individual, partnership, limited
liability company, corporation, trust, or other entity.
"Released Persons" refers to the Cronos Defendants, and to
each of them, and to their respective present and former Affiliates,
shareholders, directors, officers, employees, agents, attorneys, predecessors,
successors, executors, trustees, and assigns; provided, however, that Released
Persons does not include S. Palatin, M. Palatin, or Klamath.
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"TOEMT" refers to Transocean Equipment Manufacturing and
Trading Limited.
1.2 OTHER DEFINED TERMS
The following terms shall have the meanings defined for such
terms in the Sections or provisions of this Agreement set forth below:
Term Section
---- -------
2005 Installment 2.3
$2,600,000 1994 Transfer Recital A
Agreement Introductory
Amersham Estate Recital D
Amersham Freezing Injunction Recital F
Austrian Charging Order Net Proceeds 3.4
CEB Recital D
CG Introductory
CK 1988/1 Recital C
CK 1988/S Recital C
CNV Introductory
CNV $500,000 Action Recital E
Collection Action Recital D
Collection Action Charging Recital D
Order
Contrin Introductory
Contrin Actions Recital C
Contrin Management Agreements Article VIII
Contrin Container Owners Article VIII
Contrin Freezing Injunction 3.2
Contrin Partnerships Recital C
Contrin Plaintiffs Recital C
Cronos Introductory
Cronos Charging Orders Recital E
Cronos Defendants Introductory
Cronos Net Proceeds 2.2(b)
CUT 89 Introductory
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Term Section
---- -------
CWC Introductory
CWC $500,000 Action Recital B
Disposals Action Recital C
Disposals Action Claimants Recital C
Disposals Action Settlement Agreement Recital I
Final Payment 2.4
Indemnity Action Recital F
Initial Payment 2.1
Interserve 9.10
Karadas Introductory
Klamath Recital E
Luxembourg Action Recital A
M. Palatin Recital A
Minimum Payment 2.2(d)
Minimum Payment Contribution 2.2(d)
S. Palatin Recital A
TOEMT (Isle of Man) 7.4
TOEMT (U.K.) 7.4
ARTICLE II
CRONOS' PAYMENTS IN
SETTLEMENT OF CONTRIN PLAINTIFFS' CLAIMS
2.1 THE INITIAL PAYMENT
Subject to the provisions of Sections 2.2(c) and 3.5 hereof,
and to Contrin's performance of its obligations under Section 5.1 hereof (as to
the payments called for by paragraphs (ii) and (iii) below), the Cronos
Defendants shall make an initial payment (the "Initial Payment") to the Contrin
Plaintiffs in
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the amount of One Million U.S. Dollars (U.S. $1,000,000). Payment of the Initial
Payment shall be made in accordance with the following schedule:
(i) U.S. $300,000, which the Parties acknowledge was made
on November 6, 2003;
(ii) U.S. $250,000 on or before February 16, 2004; and
(iii) The balance, U.S. $450,000, (A) by the later of (x)
July 1, 2004, or (y) within five (5) business days after CWC registers
the Austrian Judgment with the High Court of Justice, London, England,
and assigns the same to CG pursuant to the provisions of Section 3.3
hereof, or (B) if the balance has not been paid under the provisions of
clause (A) by January 5, 2005, then the balance shall be payable on
January 5, 2005.
2.2 THE CRONOS NET PROCEEDS: MINIMUM PAYMENT
(a) CG shall cause CNV and CEB to pursue, diligently and
at Cronos' sole cost and expense, the enforcement of the Cronos Charging Orders
against the Amersham Estate. In order to permit CWC sufficient time to apply for
and obtain the Contrin Freezing Injunction (Section 3.2(a) hereof), CNV and CEB
shall not, without CWC's consent, request the High Court of Justice to order a
foreclosure and sale of the Amersham Estate to occur prior to March 31, 2004.
(b) The sum of the two Cronos Charging Orders is U.S.
$2,327,469. Upon the foreclosure and sale of the Amersham Estate pursuant to
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the Cronos Charging Orders, and subject to the provisions of subsection (d)
below, Cronos shall deposit or cause to be deposited with the Escrow Agent,
pursuant to the terms of the Escrow Agreement, the "Cronos Net Proceeds" of the
foreclosure in payment of the Cronos Charging Orders. The "Cronos Net Proceeds"
shall equal the gross foreclosure proceeds from the sale of the Amersham Estate
payable in satisfaction of the Cronos Charging Orders minus (i) the costs of
filing and prosecuting to foreclosure an action in the High Court of Justice
seeking the enforcement of the Cronos Charging Orders against the Amersham
Estate, including reasonable attorneys' fees and expenses, to the extent that
such costs, fees, and expenses are includable, by statute or by court rule or
order, in the amount recoverable from foreclosure as part of the Cronos Charging
Orders; (ii) the costs of the foreclosure of the Amersham Estate, including the
commissions and expenses of real estate brokers, agents, and appraisers incurred
in selling the Amersham Estate and allocable to the foreclosure proceeds payable
in satisfaction of the Cronos Charging Orders; (iii) the amount of the
installments of the Initial Payment theretofore paid by Cronos to Contrin
pursuant to the provisions of Section 2.1 hereof; and (iv) the amount of the
payments, if any, of the 2005 Installment theretofore paid by Cronos to Contrin
pursuant to the provisions of Section 2.3 hereof.
(c) If the Cronos Net Proceeds and/or the Austrian
Charging Order Net Proceeds (Section 3.4) are deposited in Escrow on or before
the due
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date of any installment of the Initial Payment payable pursuant to the
provisions of Section 2.1 hereof, then and in such event, and subject to the
provisions of Section 4.2(b) hereof, Cronos shall be relieved from making that
installment and all subsequent installments of the Initial Payment otherwise
called for by the provisions of Section 2.1 hereof.
(d) (1) Subject to the provisions of paragraph (2) of
this subsection (d), if, and only if, by the date of the foreclosure and sale of
the Amersham Estate pursuant to the Cronos Charging Orders, the gross proceeds
of the foreclosure and sale of the Amersham Estate are not then subject to
either of the Contrin Freezing Injunction (Section 3.2(a) hereof) or the
Austrian Charging Order (Section 3.3(a) hereof), then and in such event, if the
Cronos Net Proceeds do not, together with the installments of the Initial
Payment theretofore made by Cronos to Contrin under Section 2.1 hereof and the
payments, if any, of the 2005 Installment theretofore made by Cronos to Contrin
under Section 2.3 hereof, total at least Two Million Eight Hundred Thousand U.S.
Dollars (U.S. $2,800,000) (the "Minimum Payment"), then Cronos shall contribute
an amount (the "Minimum Payment Contribution") sufficient so that the sum of (i)
the installments of the Initial Payment theretofore paid by Cronos to Contrin
pursuant to the provisions of Section 2.1 hereof, (ii) the payments, if any, of
the 2005 Installment theretofore made by Cronos to Contrin pursuant to the
provision of Section 2.3 hereof, (iii) the Cronos Net Proceeds, and (iv) the
Minimum Payment Contribution equal the
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Minimum Payment. In the event that the Minimum Payment is called for by the
provisions of this subsection (d), then Cronos shall make the Minimum Payment
Contribution to Contrin and pay over to Contrin the Cronos Net Proceeds within
five (5) business days of Cronos' receipt of proceeds from the foreclosure and
sale of the Amersham Estate pursuant to the Cronos Charging Orders. Upon Cronos'
making of the Minimum Payment to Contrin under the provisions of this subsection
(d), subject to the provisions of paragraph (2) of this subsection (d), Cronos
shall have fulfilled its obligation to make payments to Contrin under the
provisions of this Article II, and shall have no further obligation to make
payments to Contrin hereunder, including, without limitation, the Final Payment.
(2) As a condition of Cronos' obligation to make the
Minimum Payment pursuant to the provisions of this subsection (d), Contrin shall
assign to Cronos all of its right, title, and interest in and to the Austrian
Action, the claims advanced by CWC in the Austrian Action, any final judgment
secured by Contrin in the Austrian Action, without recourse, and without any
further payment by Cronos, so as to enable Cronos, at Cronos' sole cost and
expense, to pursue S. Palatin and Klamath to recoup all monies theretofore paid
by Cronos to Contrin under the terms of this Agreement, plus interest and costs.
Any recovery of damages by Cronos by reason of the assignment contemplated
hereby shall be allocated and paid by Cronos in the following order of priority:
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(A) First, to Cronos so as to return to
Cronos the amount of the Minimum Payment plus interest at the simple rate of
interest of 3.5% per annum from the date of the Minimum Payment Contribution,
plus all costs and expenses, including attorneys' fees, incurred by Cronos in
pursuing S. Palatin and Klamath on the claims advanced in the Austrian Action,
regardless of whether such costs and expenses, including attorneys' fees, are
included in any final judgment obtained by Cronos against S. Palatin and/or
Klamath;
(B) Second, to Contrin, so that, together
with all prior payments made to Contrin by Cronos under the provisions of this
Agreement, Contrin is paid U.S. Four Million Eight Hundred and Fifty Thousand
dollars (U.S. $4,850,000); and
(C) The balance, to be retained by Cronos.
Nothing in this Section 2.2(d) or by reason of any assignment made pursuant to
this Section 2.2(d) shall obligate Cronos to pursue the Austrian Action or the
claims asserted therein against S. Palatin and Klamath. Whether to pursue the
Austrian Action or the claims asserted therein against S. Palatin and/or Klamath
shall be in the sole discretion of Cronos.
(e) Cronos shall retain, for its own
account, the proceeds of foreclosure of the Amersham Estate in payment of the
Cronos Charging Orders that are not included as part of the Cronos Net Proceeds
or, if applicable, the Minimum Payment.
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2.3 THE 2005 INSTALLMENT
(a) Subject to the provisions of subsection (b) of this
Section 2.3 and Section 3.5 hereof, and to Contrin's performance of its
obligations under Section 5.1 hereof, in the event that, by April 4, 2005, the
Amersham Estate has not been foreclosed upon and sold pursuant to either the
Cronos Charging Orders or the Austrian Charging Order, then and in such event,
Cronos shall make the following payments (the "2005 Installment") to Contrin:
(i) U.S. $250,000 on or before April 4, 2005;
(ii) U.S. $250,000 on or before July 4, 2005;
(iii) U.S. $250,000 on or before October 3, 2005; and
(iv) U.S. $250,000 on or before January 4, 2006.
(b) If the Cronos Net Proceeds and/or the Austrian
Charging Order Net Proceeds are deposited in Escrow on or before the due date of
any payment of the 2005 Installment pursuant to subsection (a) above, then and
in such event, Cronos shall be relieved from making that payment and all
subsequent payments of the 2005 Installment otherwise called for by the
provisions of subsection (a) above.
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2.4 THE FINAL PAYMENT
(a) In the event that, by the third anniversary of the
Effective Date, and subject to the provisions of subsection (b) of this Section
2.4 and Sections 3.3(d) and 3.5 hereof, one of the following conditions applies:
(i) The Amersham Estate has not been
foreclosed upon and sold pursuant to the Cronos Charging Orders;
(ii) Notwithstanding that Contrin has
secured the Contrin Freezing Injunction on or prior to the date of the
foreclosure and sale of the Amersham Estate pursuant to the Cronos
Charging Orders, Cronos has not deposited the Austrian Charging Order
Net Proceeds to the Escrow pursuant to the provisions of Section 3.4(a)
hereof; or
(iii) Cronos has deposited the Austrian
Charging Order Net Proceeds to the Escrow pursuant to the provisions of
Section 3.4(a) hereof, but the sum of (A) the installments of the
Initial Payment made by Cronos to Contrin under Section 2.1 hereof
(including all supplements made by Cronos to the disbursements made by
the Escrow Agent pursuant to the provisions of Section 4.2(b) hereof),
(B) the payments of the 2005 Installment made by Cronos to Contrin
under Section 2.3 hereof, (C) the disbursements made by the Escrow
Agent to Contrin pursuant to the provisions of Section 4.2(b) and (c)
hereof, (D) the
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amount of Cronos Net Proceeds deposited by Cronos to Escrow pursuant to
the provisions of Section 2.2(b) hereof (and not disbursed by the
Escrow Agent to Contrin pursuant to the provisions of Section 4.2(b)
and (c) hereof), and (E) the Austrian Charging Order Net Proceeds
deposited by Cronos to the Escrow (and not disbursed by the Escrow
Agent to Contrin pursuant to the provisions of Section 4.2(b) hereof)
do not total U.S. Three Million Five Hundred Thousand Dollars (U.S.
$3,500,000),
then and in any such event, the Cronos Defendants shall make a final payment
(the "Final Payment") by deposit to the Escrow in an amount equal to the
difference between (i) U.S. Three Million Five Hundred Thousand Dollars (U.S.
$3,500,000) and (ii) the sum of (A) installments theretofore made by Cronos to
Contrin of the Initial Payment pursuant to the provisions of Section 2.1 hereof
(including all supplements made by Cronos to the disbursements made by the
Escrow Agent pursuant to the provisions of Section 4.2(b) hereof), (B) the
payments of the 2005 Installment made by Cronos to Contrin under Section 2.3
hereof, (C) the amount of any disbursement made by the Escrow Agent to Contrin
pursuant to the provisions of Section 4.2(b) and (c) hereof, (D) the amount of
the Cronos Net Proceeds previously deposited by Cronos to the Escrow pursuant to
the provisions of Section 2.2(b) hereof (and not disbursed by the Escrow Agent
to Contrin pursuant to the provisions of Section 4.2(b) and (c) hereof), and (E)
the amount of the Austrian Charging Order Net Proceeds deposited by Cronos to
the Escrow
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pursuant to the provisions of Section 3.4(a) hereof (and not disbursed by the
Escrow Agent to Contrin pursuant to the provisions of Section 4.2(b) hereof).
(b) Cronos shall have no obligation to make the Final
Payment in the event that, by the third anniversary of the Effective Date,
Cronos has made the Minimum Payment to Contrin pursuant to the provisions of
Section 2.2(d) hereof.
(c) In the event that Cronos makes the Final Payment to
the Escrow under the condition specified in paragraph (ii) of subsection (a)
above, and Cronos, subsequent to the third anniversary of the Effective Date,
obtains a final order of the High Court of Justice ordering foreclosure of the
Austrian Charging Order upon the proceeds of the foreclosure and sale of the
Amersham Estate that remain subject to the Contrin Freezing Injunction, then the
Austrian Charging Order Net Proceeds shall be allocated and paid by Cronos in
the following order of priority:
(i) First, to Cronos so as to return to Cronos
the amount of the Final Payment (Section 2.4 hereof) plus interest at
the simple rate of 3.5% per annum from the date of the Final Payment,
plus all costs and expenses, including attorneys' fees, incurred by
Cronos in obtaining and enforcing the Austrian Charging Order against
the Amersham Estate and/or against the proceeds of any prior
foreclosure of the Amersham Estate pursuant to the Cronos Charging
Orders, regardless of whether such costs
19
and expenses, including attorneys' fees, are included in the amount
recoverable, by statute or by court rule or order, as part of the
Austrian Charging Order;
(ii) Second, to Contrin, so that, together with
all prior payments made to Contrin by Cronos under the provisions of
this Article II and by the Escrow Agent pursuant to the provisions of
Section 4.2 hereof, Contrin is paid U.S. Four Million Eight Hundred
Thousand and Fifty Dollars (U.S. $4,850,000); plus interest on the
amount payable to Contrin under this paragraph (ii) at the simple rate
of 3.5% per annum from the date of the foreclosure and sale of the
Amersham Estate; and
(iii) The balance, to be retained by Cronos.
(d) In the event that Cronos makes the Final Payment to
the Escrow under the conditions specified under paragraph (ii) of subsection (a)
above, and Cronos, subsequent to the third anniversary of the Effective Date,
executes upon the Austrian Judgment in a manner other than by foreclosure of the
Austrian Charging Order upon the Amersham Estate or upon the proceeds of the
foreclosure and sale of the Amersham Estate, then the proceeds of Cronos'
execution of the Austrian Judgment shall be allocated in the amounts, and order
of priority, as set forth in subsection (c)(i) - (iii) above; provided, however,
that no interest shall be payable to Contrin as set forth in paragraph (ii) of
subsection (c) above. Nothing in this subsection (d) shall obligate Cronos to
pursue execution of the Austrian Judgment against any asset of S. Palatin other
than the Amersham
20
Estate. Whether to pursue execution of the Austrian Judgment against assets of
S. Palatin other than the Amersham Estate shall be in the sole discretion of
Cronos.
2.5 INTEREST ON PAST DUE PAYMENTS
In the event that Cronos fails to make any payment or deposit
when due under the provisions of this Article II, then and in such event, in
addition to all other remedies available to Contrin for Cronos' failure to make
the payment or deposit called for hereunder, Contrin shall be entitled to
interest on the past-due payment or deposit at the rate of interest specified in
Section 4.2(d)(i) hereof, plus 200 basis points.
2.6 RESPONSIBILITY FOR PAYMENTS; PAYEES; METHOD OF PAYMENT
The Cronos Defendants shall be jointly and severally
responsible for the payments and deposits to be made by Cronos as called for by
this Article II. As between the Cronos Defendants, CG shall determine, in its
sole discretion, the allocation of responsibility for the making of the payments
and deposits by the Cronos Defendants under this Article II. The payments called
for by Sections 2.1, 2.2(d), and 2.3 hereof shall be made to such of the Contrin
Plaintiffs, and in such amounts, as are designated by Karadas to CG. Cronos may
conclusively rely upon instructions given by Karadas as to the Contrin
Plaintiffs to which payments are to be made pursuant to Sections 2.1, 2.2(d),
and 2.3 hereof and the amount of such
21
payments. All payments called for hereunder by Cronos to Contrin shall be made
by wire transfer, to one or more bank accounts, as designated by Karadas.
ARTICLE III
CONTRIN'S PROSECUTION OF THE AUSTRIAN ACTION;
REGISTRATION AND ASSIGNMENT OF AUSTRIAN JUDGMENT TO
CRONOS; ENFORCEMENT OF THE PARTIES' CHARGING ORDERS
AGAINST THE AMERSHAM ESTATE
3.1 PROSECUTION OF THE AUSTRIAN ACTION
Promptly after the execution of this Agreement, CWC agrees to
file and prosecute, diligently and at its sole cost and expense, the Austrian
Action against S. Palatin for recovery of U.S. $2,600,000, plus interest and
costs, by reason of the $2,600,000 1994 Transfer. CWC may, in its discretion,
and without increasing its responsibilities under this Section 3.1 to prosecute
diligently the Austrian action against S. Palatin, join as party defendants to
the Austrian Action one or more of M. Palatin and Klamath.
3.2 CONTRIN FREEZING INJUNCTION;
PRESERVATION OF AMERSHAM FREEZING INJUNCTION
(a) Promptly after its filing of the Austrian Action, CWC
agrees to pursue, diligently and at its sole cost and expense, the securing of a
freezing injunction (the "Contrin Freezing Injunction") from the High Court of
Justice, London, England, against the Amersham Estate in aid of its claims in
the Austrian Action. Subject to Contrin's right of approval of any sale of the
Amersham Estate
22
in response to the Cronos Charging Orders as set forth in Section 7.3 hereof,
the Contrin Freezing Injunction shall not prohibit the sale of the Amersham
Estate upon foreclosure of the Cronos Charging Orders.
(b) Cronos agrees to maintain in place the Amersham
Freezing Injunction until such time as the Luxembourg Action has been dismissed
pursuant to the provisions of Section 5.1(b) hereof.
3.3 REGISTRATION OF AUSTRIAN JUDGMENT IN THE U.K.;
ASSIGNMENT TO CRONOS
(a) Promptly after obtaining the Austrian Judgment
against S. Palatin in the Austrian Action, CWC agrees to register the Austrian
Judgment in the High Court of Justice, London, England, at its sole cost and
expense, so as to permit the obtaining of a charging order absolute
(hereinafter, the "Austrian Charging Order") in order to enforce the Austrian
Judgment against the Amersham Estate.
(b) As such time as CWC registers the Austrian Judgment
with the High Court of Justice, London, England, it shall assign the same and
the Contrin Freezing Injunction to CG (or to CG's designee) so as to permit CG
(or its designee) to apply for the Austrian Charging Order and to enforce the
same against the Amersham Estate.
23
(c) Cronos agrees, once Contrin has registered the
Austrian Judgment in the U.K. and assigned the same and the Contrin Freezing
Injunction to Cronos, to diligently and at its sole cost and expense, apply for
the Austrian Charging Order based upon the Austrian Judgment and to enforce the
Austrian Charging Order against S. Palatin and Klamath so as to obtain an order
of the High Court of Justice, London, England, ordering the foreclosure and sale
of the Amersham Estate in satisfaction of the Austrian Charging Order and/or
ordering the foreclosure of the Austrian Charging Order upon the proceeds of a
prior foreclosure of the Amersham Estate in satisfaction of the Cronos Charging
Orders. Without the consent of Contrin, Cronos shall not request the High Court
of Justice to order the foreclosure and sale of the Amersham Estate in
satisfaction of the Austrian Charging Order prior to the foreclosure and sale of
the Amersham Estate in satisfaction of the Cronos Charging Orders.
(d) In the event that by the third anniversary of the
Effective Date CWC has not registered the Austrian Judgment in the High Court of
Justice, London, England, and assigned the same to Cronos pursuant to the
provisions of this Section 3.3, then and in such event, and as a condition to
Cronos' obligation to make the Final Payment to Escrow pursuant to the
provisions of Section 2.4 hereof, Contrin shall assign to Cronos all of its
right, title, and interest in and to the Austrian Action, the claims advanced by
CWC in the Austrian Action, the Contrin Freezing Injunction, any final judgment
secured by Contrin in the
24
Austrian Action, without recourse, and without any further payment by Cronos, so
as to enable Cronos, at Cronos' sole cost and expense, to pursue S. Palatin and
Klamath to recoup all monies theretofore paid by Cronos to Contrin under the
terms of this Agreement, plus interest and costs, as provided by Section 2.4(c)
or 2.4(d) hereof, as applicable. Any recovery of damages by Cronos by reason of
the assignment contemplated hereby, other than by reason of an execution of the
Austrian Judgement against the Amersham Estate or the proceeds of the
foreclosure and sale of the Amersham Estate, shall be allocated in the amounts,
and order of priority, set forth in Section 2.4(d) hereof. Nothing in this
Section 3.3(d) or by reason of any assignment pursuant to this Section 3.3(d)
shall obligate Cronos to pursue the Austrian Action or the claims asserted
therein against S. Palatin or Klamath. Whether to pursue the Austrian Action or
the claims asserted therein against S. Palatin and/or Klamath shall be in the
sole discretion of Cronos.
3.4 DEPOSIT OF AUSTRIAN CHARGING ORDER NET PROCEEDS TO THE ESCROW
(a) Subject to the provisions of subsection (b) hereof,
upon any foreclosure and sale of the Amersham Estate in payment of the Austrian
Charging Order, or upon any foreclosure of the Austrian Charging Order upon the
proceeds of any earlier foreclosure and sale of the Amersham Estate in payment
of the Cronos Charging Orders, Cronos, as the assignee of the Austrian Judgment
and holder of the Austrian Charging Order, agrees to deposit the "Austrian
Charging
25
Order Net Proceeds" of the foreclosure to the Escrow, to be administered
pursuant to the terms of the Escrow Agreement. The "Austrian Charging Order Net
Proceeds" shall equal the gross foreclosure proceeds from the sale of the
Amersham Estate payable in satisfaction of the Austrian Charging Order minus (i)
the costs of filing and prosecuting to foreclosure an action in the High Court
of Justice seeking the enforcement of the Austrian Charging Order against the
Amersham Estate, including reasonable attorneys' fees and expenses, to the
extent that such costs, fees, and expenses are includable, by statute or by
court rule or order, in the amount recoverable from foreclosure as part of the
Austrian Charging Order; and (ii) the costs of the foreclosure of the Amersham
Estate, including the commissions and expenses of real estate brokers, agents,
and appraisers incurred in selling the Amersham Estate and allocable to the
foreclosure proceeds payable in satisfaction of the Austrian Charging Order.
(b) In the event that the foreclosure of the Austrian
Charging Order upon the Amersham Estate or upon the proceeds of a prior
foreclosure of the Amersham Estate in satisfaction of the Cronos Charging Orders
occurs after the third anniversary of the Effective Date, and after Cronos has
made the Final Payment to the Escrow pursuant to the provisions of Section 2.4
hereof, then and in such event Cronos shall not deposit the Austrian Charging
Order Net Proceeds to the Escrow, but shall, instead, allocate the Austrian
Charging Order Net Proceeds pursuant to the provisions of Section 2.4(c) hereof.
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3.5 CONSEQUENCES OF CWC's ABANDONMENT OF THE AUSTRIAN ACTION
In the event that CWC (i) does not file the Austrian Action by
December 31, 2003, (ii), promptly after filing the Austrian Action, does not
apply for the Contrin Freezing Injunction (Section 3.2(a) hereof), (iii)
voluntarily dismisses the Austrian Action, (iv) does not oppose a motion to
dismiss the Austrian Action brought by S. Palatin, (v) abandons the prosecution
of the Austrian Action, (vi) compromises its claims against S. Palatin in the
Austrian Action without CG's prior consent in violation of Section 7.1 hereof,
or (vii) does not, after securing a final judgment in the Austrian Action,
register the same with the High Court of Justice, London, England, then and in
any such event the obligation of Cronos to pay installments of the Initial
Payment pursuant to Section 2.1 hereof and not theretofore made by Cronos, the
obligation of Cronos to make the Minimum Payment as called for by Section 2.2(d)
hereof, to make the 2005 Installment as called for by Section 2.3 hereof, or to
deposit the Final Payment in Escrow or allocate the Austrian Charging Order Net
Proceeds or other proceeds recovered against S. Palatin and/or Klamath pursuant
to the provisions of Section 2.4 hereof, shall become null and void. In such
event, CWC agrees to assign to Cronos, without recourse, and without further
payment by Cronos to Contrin, all of Contrin's right, title and interest in and
to the claims brought by CWC against S. Palatin in the Austrian Action to enable
Cronos to pursue, at
27
Cronos' sole cost and expense, S. Palatin to recoup all monies theretofore paid
by Cronos to Contrin under the terms of this Agreement, plus interest and costs.
ARTICLE IV
THE ESCROW
4.1 ESTABLISHMENT OF THE ESCROW ACCOUNT
The Escrow Agent shall be an international bank having offices
in the London, England, with total assets of at least $1 Billion. The terms of
the Escrow shall be as set forth in the Escrow Agreement (Exhibit A). All
instructions to the Escrow Agent shall be in writing and shall require the
signature of a duly authorized representative of Contrin and a duly authorized
representative of CG; provided, however, that in the event that CG files a
petition in bankruptcy in Luxembourg or in any other jurisdiction, assigns all
or substantially of its assets for the benefit of its creditors, or does not
oppose a petition in bankruptcy filed against it by its creditors in Luxembourg
or in any other jurisdiction, then and in such event Contrin shall have the sole
right, power, and authority to instruct the Escrow Agent under the terms of this
Agreement; provided further, however, that Contrin shall exercise any such
right, power, or authority solely pursuant to the terms and provisions of this
Agreement. Karadas and CG shall be jointly responsible for the cost and expense
of establishing and maintaining the Escrow Account to the extent there are not
sufficient funds in the Escrow Account to cover such expenses.
28
4.2 DEPOSITS AND DISBURSEMENTS FROM THE ESCROW ACCOUNT
(a) The Deposits that may be made to the Escrow Account
include the Cronos Net Proceeds called for by Section 2.2(b) hereof, the
Austrian Charging Order Net Proceeds called for by Section 3.4(a) hereof, and
the Final Payment called for by Section 2.4 hereof.
(b) In the event that Cronos deposits the Cronos Net Proceeds
and/or the Austrian Charging Order Net Proceeds to the Escrow prior to the time
that any installment or installments of the Initial Payment is made by Cronos
pursuant to the provisions of Section 2.1 hereof, thereby relieving Cronos of
the obligation to make one or more installments of the Initial Payment pursuant
to the provisions of Section 2.2(c) hereof, then and in such event, the Escrow
Agent shall make one or more disbursements to Contrin in the amounts and at the
times the installments of the Initial Payment are to be made to Contrin under
the provisions of Section 2.1 hereof. In the event that the Cronos Net Proceeds
and/or the Austrian Charging Order Net Proceeds deposited into Escrow are not
sufficient to enable the Escrow Agent to make an installment of the Initial
Payment in the amount called for by Section 2.1 hereof, then Cronos shall
supplement the disbursement made by the Escrow Agent hereunder so that the
disbursement, and Cronos' payment, equal the amount of the installment of the
Initial Payment called for by the provisions of Section 2.1 hereof.
29
(c) With five (5) business days after Cronos obtains the
Austrian Charging Order (Section 3.3(a) hereof) or, if earlier, by the sixtieth
(60th) day after CWC registers the Austrian Judgment in the High Court of
Justice, London, England (Section 3.3(a) hereof), the Escrow Agent shall make a
disbursement to Contrin of the Cronos Net Proceeds minus the amount disbursed to
Contrin under the provisions of subsection (b) above.
(d) Other than as called for by subsections (b) and (c)
hereof, disbursements from the Escrow Account shall be made to the Parties as
soon as practicable after the third anniversary of the Effective Date, or sooner
upon the joint instruction of Karadas and CG, in the order of priority set forth
in this subsection (d). It shall be a condition to any disbursement to Contrin
hereunder that Contrin shall have complied with the provisions of Section 3.3(d)
hereof in the event that Contrin has not registered the Austrian Judgment with
the High Court of Justice, London, England, and assigned the same to Cronos
pursuant to the provisions of Section 3.3 hereof by the third anniversary of the
Effective Date. Subject to the foregoing, the order of disbursements from the
Escrow Account shall be as follows:
(i) First, to Contrin in an amount equal to the lesser of
(A) the balance in the Escrow Account, or (B) U.S. Four Million Eight
Hundred and Fifty Thousand Dollars (U.S. $4,850,000) minus (v) the
amount of the installments of the Initial Payment theretofore paid by
30
Cronos to Contrin pursuant to the provisions of Section 2.1 hereof, (x)
the amounts disbursed and/or paid to Contrin under the provisions of
subsection (b) above, (y) the payments, if any, of the 2005 Installment
theretofore paid by Cronos to Contrin pursuant to the provisions of
Section 2.3 hereof, and (z) the amount disbursed to Contrin under the
provisions of subsection (c) above, and plus interest on said net
amount from the Effective Date until the third anniversary of Effective
Date, at the simple rate of interest of 3.5% per annum; and
(ii) The balance, to Cronos.
ARTICLE V
DISMISSAL OF THE CONTRIN ACTIONS;
EFFECTIVE DATE OF THIS AGREEMENT
5.1 DISMISSAL OF THE CONTRIN ACTIONS
(a) Promptly after the Parties have executed this Agreement,
Contrin shall file dismissals, with prejudice, of each of the CWC $500,000
Action and the Disposals Action. The dismissals shall be in a form satisfactory
to Cronos' U.K. counsel. By "with prejudice" the Parties intend that the
dismissals shall be final and complete and that the claims advanced therein by
the Contrin Plaintiffs may not be re-filed in the U.K. or in any other court or
forum.
(b) Promptly after the parties have executed this Agreement,
Contrin shall suspend further prosecution of the Luxembourg Action. Promptly
31
after Contrin secures the Contrin Freezing Injunction (Section 3.2(a) hereof) or
within five (5) business days after Contrin's application for the Contrin
Freezing Injunction is denied by the High Court of Justice, London, England,
whichever first occurs, and, in all events, by no later than March 31, 2004,
Contrin shall file a dismissal, with prejudice, of the Luxembourg Action (a
desistement d'action). The dismissal shall be in a form satisfactory to Cronos'
Luxembourg counsel.
5.2 CALCULATION OF THE EFFECTIVE DATE
For purposes of this Agreement, the Effective Date shall be
the first business day after Contrin has provided CG with court-certified copies
of the dismissals of both the CWC $500,000 Action and the Disposals Action as
called for by Section 5.1(a) hereof.
ARTICLE VI
RELEASE OF THE RELEASED PERSONS
The Contrin Group, and all persons making claims by or through
the Contrin Group or any member of the Contrin Group, hereby fully, finally, and
forever, release, relinquish, and discharge each and every of the Claims Settled
against the Released Persons, and each of them. The Contrin Group, and each
member of the Contrin Group, acknowledge that they may have sustained damages,
losses, costs, or expenses that are presently unknown and unsuspected in
connection with the Claims Settled. Nevertheless, the Contrin Group and each
32
member of the Contrin Group acknowledges that the release of the Claims Settled
against the Released Persons has been agreed upon with knowledge and awareness
that such additional damages, losses, costs, or expenses may be discovered in
the future.
ARTICLE VII
PARTIES TO COOPERATE IN THE PROSECUTION
OF THE AUSTRIAN ACTION AND THE FORECLOSURE
OF THE PARTIES' CHARGING ORDERS UPON THE AMERSHAM ESTATE; TOEMT
The Parties acknowledge that it is in their mutual interest
that the Austrian Action be pursued to a successful completion by CWC, that the
Cronos and Austrian Charging Orders be secured and foreclosed upon the Amersham
Estate, and that the Amersham Estate be foreclosed upon and sold at the highest
price, and upon the best terms, reasonably available. The Parties agree to
cooperate, in good faith, in the achievement of these objectives.
7.1 COOPERATION IN THE PROSECUTION OF THE AUSTRIAN ACTION
Cronos agrees to provide Contrin with copies of all pleadings
and papers Cronos has filed with the Court in the Indemnity Action to facilitate
Contrin's institution and prosecution of the Austrian Action. Contrin agrees,
concurrently with their filing in the Austrian Action, to provide copies of all
pleadings and papers filed by Contrin with the Austrian court in the Austrian
Action to CG, care of its Austrian counsel (Section 9.8 hereof). CWC agrees not
33
to compromise its claim for $2,600,000, plus interest and costs, brought in the
Austrian Action without CG's prior consent, which consent shall not be
unreasonably withheld or delayed.
7.2 COOPERATION IN THE ENFORCEMENT OF THE PARTIES' CHARGING ORDERS
Cronos agrees to provide Contrin, concurrently with their
filing in the High Court of Justice, London, England, with copies of all
pleadings and papers Cronos files in the prosecution of the Cronos Charging
Orders against S. Palatin and Klamath. Contrin agrees to provide to Cronos,
concurrently with their filing in the High Court of Justice, London, England,
with copies of all pleadings and papers Contrin files with the Court with
respect to the registration of the Austrian Judgment. Cronos agrees to provide
Contrin, concurrently with their filing in the High Court of Justice, London,
England, with copies of all pleadings and papers Cronos files to secure and
foreclose the Austrian Charging Order against the Amersham Estate. Contrin
agrees to cooperate with Cronos in connection with Cronos' application for the
Austrian Charging Order and foreclosure of the same against the Amersham Estate.
7.3 COOPERATION IN THE FORECLOSURE AND SALE OF THE AMERSHAM ESTATE
Cronos agrees to confer with Contrin in pursuing the
foreclosure and sale of the Amersham Estate. Subject to any directions from the
High Court of Justice in its Orders ordering the foreclosure of the Cronos
and/or Austrian
34
Charging Orders against the Amersham Estate, Cronos agrees not to enter into or
approve any agreement of sale of the Amersham Estate without Karadas' approval
thereof, which approval shall not be unreasonably withheld or delayed.
7.4 COOPERATION IN THE LIQUIDATION OF TOEMT
There are two companies known as TOEMT, one organized under
the laws of England ("TOEMT (U.K.)"), and one organized under the laws of the
Isle of Man ("TOEMT (Isle of Man)"). Both are in liquidation in the High Court
of Justice, Chancery Division, Companies Court (TOEMT (U.K.) under Xx. 0000 xx
0000, xxx XXXXX (Xxxx xx Xxx) under No. 151 of 2003). CWC is a creditor of one
or both of TOEMT (U.K.) and TOEMT (Isle of Man), and CNV manages containers for
TOEMT. Contrin and Cronos agree to cooperate in good faith to accomplish their
mutual objectives with respect to the administration of the liquidations of the
two TOEMTs. Without prejudicing their rights with respect to the liquidation of
the two TOEMTs, Contrin and Cronos agree to exchange information and to confer
with a view to expediting the administration of the liquidation of the two
TOEMTs and minimizing the disruption of the business of Cronos arising from the
liquidation of the two TOEMTs. The Parties acknowledge that Contrin has no right
or power to act for or on behalf of the liquidator of the two TOEMTs.
35
ARTICLE VIII
AMENDMENT OF CONTRIN MANAGEMENT AGREEMENTS
CNV and certain Affiliates of Contrin are parties to container
management agreements (the "Contrin Management Agreements"). The Contrin parties
to the Contrin Management Agreements are listed on Exhibit B hereto (the
"Contrin Container Owners"). To avoid future disputes over the disposal of
containers under the Contrin Management Agreements, Cronos and Contrin agree
that, from and after the Effective Date, the net proceeds, including any
insurance proceeds, of all retirements and disposals of containers which are
lost, destroyed, or rendered unfit or uneconomical for continued leasing, in
CNV's business judgment as manager of the containers and agent of the Contrin
Container Owners, shall be allocated and paid 80% to the Contrin Container
Owners and 20% to CNV, and, with respect to any such containers, CNV shall have
no obligation to pay the "Termination Value" (as defined in the Contrin
Management Agreements) of such containers to the Contrin Container Owner. Cronos
and Contrin further agree that, under the Contrin Management Agreements, all
repair cost reimbursements paid by lessees of containers to CNV, as manager,
shall be included within "Gross Lease Revenue," and that the cost of repair of
containers shall be included in the "Operating Expenses" of containers (as such
terms are defined, including the clarification set forth herein, in the Contrin
Management Agreements). Promptly after the Effective Date, CNV and Karadas,
acting for and on behalf of each of the Contrin Container Owners, shall enter
into an amendment
36
substantially in the form of Exhibit C hereto, amending the existing Contrin
Management Agreements between CNV and the Contrin Container Owners to implement
the agreements reflected in this Article VIII.
ARTICLE IX
MISCELLANEOUS
9.1 EXECUTION AND VALIDITY OF THIS AGREEMENT
(a) Each of the Contrin Plaintiffs hereby represents and
warrants to the Cronos Defendants that this Agreement has been duly authorized
and executed by the Contrin Plaintiffs and, upon its due execution by the Cronos
Defendants, this Agreement shall be a valid and binding agreement of the Contrin
Plaintiffs, and each of them, enforceable against them in accordance with its
terms and conditions.
(b) Each of the Cronos Defendants hereby represents and
warrants to the Contrin Plaintiffs that this Agreement has been duly authorized
and executed by the Cronos Defendants, and, upon its due execution by the
Contrin Plaintiffs, this Agreement shall be a valid and binding agreement of the
Cronos Defendants, and each of them, enforceable against them in accordance with
its terms and conditions.
37
9.2 KARADAS' AND CG'S AUTHORITY
Karadas is expressly authorized by each of the Contrin
Plaintiffs to represent the Contrin Plaintiffs in connection with the
implementation of this Agreement, and to provide all notices, consents, and
agreements for and on behalf of the Contrin Plaintiffs required or permitted by
this Agreement. CG is expressly authorized by each of the Cronos Defendants to
represent the Cronos Defendants in connection with the implementation of this
Agreement, and to provide all notices, consents, and agreements for and on
behalf of the Cronos Defendants required or permitted by this Agreement.
9.3 DISPOSALS ACTION SETTLEMENT AGREEMENT
This Agreement subsumes and replaces the Disposals Action
Settlement Agreement, which, upon the Parties' execution of this Agreement,
shall have no further force and effect.
9.4 FURTHER ASSURANCES
Each Party hereto agrees to use such Party's best efforts to
cause this Agreement to be implemented in accordance with its terms. Each of the
Parties hereto agrees to execute and deliver any and all further agreements,
documents, or instruments as are reasonably requested by the other Party to
effectuate this Agreement.
38
9.5 FURTHER USE OF THIS AGREEMENT
Neither this Agreement nor any act performed or document
executed pursuant to or in furtherance of this Agreement is or may be deemed to
be an admission of, or evidence of, any wrongdoing or liability on the part of
the Cronos Defendants, or is or may be deemed to be an admission of, or evidence
of, any fault of any of the Cronos Defendants in any civil, criminal, or
administrative proceeding in any court, administrative agency, or other
tribunal. However, this Agreement may be used in such proceedings as may be
necessary to consummate or enforce this Agreement, and any Party may file this
Agreement in any action that may be brought against the Party in order to
support a defense or counterclaim based on principles of res judicata,
collateral estoppel, release, good faith settlement, judgment bar, or reduction,
or any other theory of claim preclusion or issue preclusion or similar defense
or counterclaim.
9.6 RETURN OF DISCOVERY DOCUMENTS
Within twenty (20) days after the Effective Date, all
documents produced in discovery or by way of exchange between counsel
representing the Parties to the Contrin Actions or in preparation for the trial
of the Contrin Actions, and not filed with the court in the Contrin Actions,
shall be returned to the Party or Parties producing the documents. The return
shall include all copies of the documents produced and all extracts thereof. In
lieu of returning the documents, the responding party may, by certification to
CG or to Karadas, as the case may
39
be, confirm that the documents, and all copies and extracts thereof, have been
destroyed by the responding party.
9.7 APPLICATION OF AUSTRIAN STAMP DUTY
The Parties have been advised that this Agreement may be
subject to the imposition of a stamp duty under Austrian law in the event that
the Agreement, as executed, or a copy of the Agreement, as executed, is sent or
brought to Austria. In light of the Parties' agreement to resolve any disputes
concerning the implementation or interpretation of this Agreement in the U.K.
under the laws of the United Kingdom (Sections 9.9 and 9.10 hereof), each Party
agrees not to send or submit in Austria this Agreement, as executed by the
Parties. In the event that a party willfully or recklessly violates this
provision, and, as a result, a stamp duty is imposed upon this Agreement under
Austrian tax law, then in such event the breaching Party shall indemnify the
other Parties for the amount of the stamp tax imposed upon them by reason of the
disclosure; provided, however, that the foregoing indemnity shall not apply in
the event that a Party is compelled to disclose or submit this Agreement in
Austria by reason of another Party's refusal to abide by the governing law
agreement of Section 9.9 hereof or the dispute resolution agreement of Section
9.10 hereof.
40
9.8 NOTICES
Any notice, demand, or communication required or permitted to
be given by any provision of this Agreement shall be in writing or transmitted
electronically and shall be deemed to have been duly given when received, if
personally delivered; upon confirmation of receipt (by use of "confirmation to
sender" or other means), if transmitted by telecopy or by electronic or digital
transmission method; or on the second business day after it is sent, if sent for
overnight delivery by a recognized international overnight delivery service,
charges prepaid, addressed as follows:
(a) If to the Contrin Plaintiffs, to:
Xxxxxxx XxxX
Xxxxxx
Xxxxxxxxxxx 00/0
X-0000 Xxxxxx
Xxxxxxx
Attention: Mag. Xxxxxxx Xxxxxxxxxx
With a copy to:
Mag. Xx. Xxxxxxxx Xxxxxxxx
Xxxxxxxx & Xxxxxx
Xxxxxxxxxxxx(xxxx)x 0
0000 Xxxxxx
Xxxxxxx
41
(b) If to the Cronos Defendants, to:
The Cronos Group
c/o Cronos Capital Corp.
Xxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
With a copy to:
Xxxxxx Xxxxxxxx Xxxxxxx & Share LLP
Four Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
For notices required by Section 7.1, with a copy to:
Xx. Xxxxxx Xxxxx, LL.M
Xxxxxxxxxxxxx 0/0
X-0000 Xxxxxx
Xxxxxxx
Any party identified above may change the address to which notices are to be
sent hereunder by giving notice to each other party in the manner herein
provided.
/ / / /
/ / / /
/ / / /
42
9.9 GOVERNING LAW
This Agreement, and the application and interpretation
thereof, shall be governed, construed and enforced exclusively by its terms and
by the laws of England, without giving effect to the principles of conflicts of
law.
9.10 CONSENT TO JURISDICTION
To facilitate the prompt and efficient enforcement of this
Agreement, the Parties agree that the High Court of Justice, London, England,
shall have jurisdiction to resolve any dispute arising between the Parties
concerning the enforcement or interpretation of the terms of this Agreement.
Each of the Parties hereby waives any objection which it may now or hereinafter
have to the jurisdiction of the High Court of Justice to resolve any suit,
action, or proceeding brought by one or more of the Parties to enforce the
provisions of this Agreement. Each of the Parties hereby irrevocably submits to
the jurisdiction of the High Court of Justice in any such suit, action, or
proceeding. CG and Karadas hereby irrevocably appoint and designate Interserve
(UK) Limited ("Interserve"), having an address at 0 Xxxxxxx Xxxxxx, Xxxxxx, X0X
0XX, Xxxxxxx, as its duly authorized agent for the limited purpose of receiving
and forwarding legal process in any such suit, action or proceeding. CG and
Karadas each agree that service or process upon Interserve shall constitute
personal service upon the Cronos
43
Defendants or the Contrin Plaintiffs, as the case may be. Each of CG and Karadas
shall each maintain the designation and appointment of such authorized agent
until the third anniversary of the Effective Date, unless such designation is
jointly revoked by CG and Karadas.
9.11 EXPENSES
Except as otherwise specified in this Agreement, each Party
hereto shall pay its own legal, accounting, out-of-pocket, and other expenses
incident to this Agreement and to any action taken by such Party in preparation
for or in the implementation of this Agreement. The dismissal of the Contrin
Actions, as called for by Section 5.1 hereof, shall not obligate any Party to
such Actions to pay to the other Party the cost and expenses, including
attorneys' fees, of prosecuting or defending the Contrin Actions.
9.12 JUDGMENT CURRENCY
United States Dollars shall be the currency of account in
connection with all obligations under this Agreement. The payment obligations of
the Cronos Defendants under this Agreement shall not be discharged by an amount
paid in a currency, other than U.S. Dollars, to the extent that the amount so
paid on prompt conversion to U.S. Dollars under normal banking procedures does
not yield the amount of U.S. Dollars due or specified under this Agreement. In
the event that any payment made hereunder in a currency other than U.S. Dollars
upon
44
conversion and transfer does not result in the payment of such amount of U.S.
Dollars as specified by the terms of this Agreement, then the obligor of such
payment shall make payment of an additional amount necessary to yield the amount
due and owing in U.S. Dollars under this Agreement.
9.13 RULE OF CONSTRUCTION
The rule of construction that ambiguities in a document are to
be resolved against the party drafting the document shall have no applicability
to this Agreement. This Agreement has been fully negotiated by the Parties, each
of which has been represented by counsel.
9.14 BINDING PROVISIONS
The covenants and agreements contained herein shall be binding
upon and inure to the benefit of the executors, administrators, personal
representatives, successors and assigns of the respective Parties hereto.
9.15 ENTIRE AGREEMENT
This Agreement, together with the Exhibit hereto, constitutes the entire
agreement between the Parties pertaining to the subject matter hereof and
supersedes all prior agreements and understandings of the Parties in connection
herewith.
45
9.16 AMENDMENTS/WAIVERS
Any amendment hereof must be in writing and signed by the
Parties hereto or their duly authorized representatives. Any provision hereof
may be waived in writing by the Party entitled to the benefit of such provision.
Other than as contemplated by this Agreement, nothing herein is intended to
confer any rights or remedies upon any person not a Party hereto.
9.17 COUNTERPARTS
This Agreement may be executed in several counterparts, all of
which together shall constitute one agreement binding upon all Parties hereto,
notwithstanding that all Parties have not signed the same counterpart.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the day and year first above written.
[THE REST OF THIS PAGE INTENTIONALLY BLANK]
46
THE CONTRIN PLAINTIFFS:
KARADAS GmbH,
on its own behalf and as a partner of
CONTRIN CONSORTIUM 1988/S and
CONTRIN CONSORTIUM 1988/1
By: XXXXXXX XXXXXXXXXX
-------------------------------
Mag. Xxxxxxx Xxxxxxxxxx
Managing Director
And: XXXXXX X. XXXXX
------------------------------
Xxxx. Xxxxxx X. Xxxxx
Shareholder Representative
CONTRIN WORLDWIDE
CONTAINER LEASING GmbH
By: XXXXXXX XXXXXXXXXX
-------------------------------
Mag. Xxxxxxx Xxxxxxxxxx
Managing Director
And: XXXXXX X. XXXXX
------------------------------
Xxxx. Xxxxxx X. Xxxxx
Shareholder Representative
47
CONTRIN UEBERSEE
TRANSPORTGERAETE
XXXXXXXXXXXXXXXXXXX x.x.x. &
Xx XX 0000,
Xx: XXXXXXX XXXXXXXXXX
------------------------------
Mag. Xxxxxxx Xxxxxxxxxx
Managing Director
And: XXXXXX X. XXXXX
------------------------------
Xxxx. Xxxxxx X. Xxxxx
Shareholder Representative
APPROVED AS TO FORM:
XXXXXXXX & XXXXXX
By: XXXXXXXX XXXXXXXX
---------------------------------
Mag. Xx. Xxxxxxxx Xxxxxxxx
A Partner
Counsel to the Contrin Plaintiffs
48
THE CRONOS DEFENDANTS:
---------------------
THE CRONOS GROUP
By: XXXXXX X. XXXXX
-------------------
Xxxxxx X. Xxxxx
Chief Executive Officer
And: XXXXX X. XXXXXXX
----------------
Xxxxx X. Xxxxxxx
Chief Financial Officer
CRONOS CONTAINERS N.V.
By: XXXXXX X. XXXXX
---------------------
Xxxxxx X. Xxxxx
Director
APPROVED AS TO FORM:
XXXXXX RADOVSKY XXXXXXX &
SHARE LLP
Xxxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
By: X.X. XXXXXXX
---------------------------
Xxxxx X. Xxxxxxx, A Partner
Counsel to the Cronos Defendants
49
EXHIBIT A
FORM OF ESCROW AGREEMENT
(Section 4.1 of Settlement Agreement)
________________, 2003
___________________________
___________________________
___________________________
Attention: ____________________
____________________
Re: Escrow Agreement and Instructions
The Cronos Group
Karadas GmbH
Ladies and Gentlemen:
The following shall serve as escrow instructions to
______________________ (hereinafter, "you" or the "Escrow Agent") from The
Cronos Group, a Luxembourg societe anonyme holding ("Cronos") and Karadas GmbH,
an Austrian company ("Karadas") acting on behalf of the parties to that certain
Settlement Agreement, dated as of November 17, 2003 (hereinafter, the
"Settlement Agreement") by and among Cronos, Cronos Containers N.V. ("CNV")
(Cronos and CNV referred to herein collectively as the "Cronos Defendants"),
Contrin Worldwide Container Leasing GmbH ("CWC"), Contrin Uebersee
Transportgeraete Handelsgesellschaft m.b.h. & Co KG 1989 ("CUT"), and Karadas
(CWC, CUT and Karadas referred to herein collectively as the "Contrin
Plaintiffs"). These escrow instructions shall not become binding upon the Escrow
Agent until acknowledged by an authorized officer of the Escrow Agent as
indicated on page 8 hereof.
1. THE SETTLEMENT AGREEMENT
The Settlement Agreement resolves claims brought by the
Contrin Plaintiffs in certain actions against the Cronos Defendants. Terms
capitalized herein and not defined herein shall have the meanings ascribed to
them by Article I of the Settlement Agreement. Pursuant to the terms of the
Settlement Agreement, the Cronos Defendants are obligated to make certain
deposits into escrow. The deposits that may be made by the Cronos Defendants are
identified in the
______________________
___________________, 2003
Page 2
Settlement Agreement as the "Cronos Net Proceeds" (Section 2.2 of the Settlement
Agreement), the "Austrian Charging Order Net Proceeds" (Section 3.4 of the
Settlement Agreement), and the "Final Payment" (Section 2.4 of the Settlement
Agreement).
2. ESTABLISHMENT OF ESCROW ACCOUNT
(a) You shall establish one escrow account hereunder
(hereinafter, the "Escrow Account") into which you shall deposit all payments
made by the Cronos Defendants under the terms of the Settlement Agreement,
including one or more of the Cronos Net Proceeds, the Austrian Charging Order
Net Proceeds, and the Final Payment. At the time the Cronos Defendants makes a
deposit with you under the terms of these instructions, Cronos shall provide a
notice to you in the form of Exhibit A hereto.
(b) To the extent that Cronos Defendants make any deposit
with you in Pound Sterling you shall promptly convert the same, in accordance
with the exchange rates then in effect, to U.S. Dollars.
(c) All deposits made by the parties with you under these
escrow instructions to the Escrow Account shall be invested in short-term
securities issued or guaranteed by the United States Government,
interest-bearing bank accounts, short-term bank certificates of deposit, or
________________.
3. MAINTENANCE AND DISBURSEMENT OF THE MONIES IN THE ESCROW
ACCOUNT
(a) You shall withhold and pay taxes, if any, on the
income earned on the monies deposited by the Cronos Defendants to the Escrow
Account as follows: until such time as the monies deposited by the Cronos
Defendants to the Escrow Account total the equivalent of U.S. $4,850,000, all
income earned on the monies in the Escrow Account shall be allocated to Karadas.
From and after such point in time, if any, that the monies deposited in the
Escrow Account total more than U.S. $4,850,000, then you shall allocate that
income allocable to U.S. $4,850,000 to Karadas and that income allocable to the
balance of the monies in the Escrow Account to Cronos. You are to withhold taxes
on the income earned on the monies in the Escrow Account as required by
applicable law.
(b) Pursuant to the provisions of Section 4.2(d) of the
Settlement Agreement, disbursements from the Escrow Account are to be made as
soon as
______________________
___________________, 2003
Page 3
practicable after the third anniversary of the Effective Date of the settlement,
or sooner upon the joint instruction of Cronos and Karadas. The instructions for
disbursement of the monies in the Escrow Account shall be in the form of Exhibit
B hereto, signed by both Cronos and Karadas.
4. TERM OF THIS AGREEMENT
The parties to the Settlement Agreement anticipate that the
disbursements from the Escrow Account shall be made as soon as practicable after
the third anniversary of the Effective Date of the settlement, or sooner upon
the joint instruction of Cronos and Karadas, in the form of Exhibit B hereto.
Once the monies in the Escrow Account are fully disbursed, and you have provided
to Cronos and Karadas a report for the period in which the final disbursements
have occurred, then your duties hereunder shall cease.
5. FEE FOR SERVICES
(a) For the Escrow Agent's services rendered hereunder,
the Escrow Agent shall be paid a fee of ____________ (___________). Other than
as permitted by paragraph 13 hereof, the Escrow Agent shall be entitled to no
additional fee or payment for the rendition of its services hereunder.
(b) The Escrow Agent shall be entitled to charge its fee
for acting as Escrow Agent hereunder by debit to the Escrow Account established
hereunder or, if there are not sufficient monies in the Account to cover the
Escrow Agent's fee, then by demand upon Cronos and Karadas. Cronos and Karadas
agree to be jointly and severally responsible for the payment of the Escrow
Agent's fees for services hereunder.
6. REVISION OF INSTRUCTIONS
These instructions shall not be revoked, supplemented,
amended, or modified in any way without the express written consent of Cronos,
Karadas, and the Escrow Agent.
7. SETTLEMENT AND OTHER AGREEMENTS
The Escrow Agent shall have no responsibility for the
performance by any party to the Settlement Agreement of the terms thereof. The
Escrow Agent is not a party to, or bound by, any other agreement which may be
deposited with the Escrow Agent or referred to in these instructions. Without
limiting the
______________________
___________________, 2003
Page 4
foregoing, the Escrow Agent shall have no responsibility to any person should it
follow the instructions of Cronos and Karadas pursuant to the provisions of
these escrow instructions.
8. ESCROW AGENT'S RESPONSIBILITY
The Escrow Agent acts as a depository only and is not
responsible or liable in any manner whatsoever for the sufficiency, correctness,
genuineness or validity of any instrument deposited with it hereunder, or with
respect to the form or execution of the same, or the identity, authority, or
right of any person executing or depositing the same.
9. NOTICES
Escrow Agent shall be protected in acting upon any notice,
request, waiver, consent, receipt or other paper or document believed by Escrow
Agent to be signed by the proper party or parties. Any notice, demand, or
communication required or permitted to be given by any provision of these
instructions shall be in writing or transmitted electronically and shall be
deemed to have been duly given when received, if personally delivered; upon
confirmation of receipt (by use of "confirmation to sender" or other means), if
transmitted by telecopy or by electronic or digital transmission method; or on
the second business day after it is sent, if sent for overnight delivery by a
recognized international overnight delivery service, charges prepaid, addressed
as follows:
(a) If to Karadas, to:
Xxxxxxx XxxX
Xxxxxx
Xxxxxxxxxxx 00/0
X-0000 Xxxxxx
Xxxxxxx
Attention: Mag. Xxxxxxx Xxxxxxxxxx
Tel. No.: 00.000.00.00.00
Fax No.: 00.000.00.00.00
Email: x.xxxxxxxxxx@xxxxxxx.xxx0xxx.xx
______________________
___________________, 2003
Page 5
(b) If to Cronos, to:
The Cronos Group
x/x Xxxxxx Xxxxxxx Xxxx.
Xxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Tel. No.: 000.000.0000
Fax No.: 000.000.0000
Email: xxx@xxxxxx.xxx
(c) If to the Escrow Agent, to:
_____________________________
_____________________________
_____________________________
Attention: _________________
Tel. No.: __________________
Fax No.: ___________________
Email: ______________________
Any party identified above may change the address to which
notices are to be sent hereunder by giving notice to each other party in the
manner herein provided.
10. ERRORS OF JUDGMENT
Escrow Agent shall not be liable for any error of judgment or
for any act done or step taken or omitted by it in good faith or for any mistake
of fact or law, or for anything which it may do or refrain from doing in
connection herewith, except its own willful misconduct or gross negligence, and
Escrow Agent shall have no duties to anyone except those signing these
instructions. Escrow Agent shall not be held to have notice of the terms of the
Settlement Agreement unless expressly stated in writing herein, and shall have
no obligation with respect to the performance by Cronos, Karadas, or any other
party to the Settlement Agreement of the terms thereof.
11. ESCROW AGENT'S COUNSEL
Escrow Agent may consult with legal counsel in the event of
any dispute or question as to the construction of the foregoing instructions, or
Escrow
______________________
___________________, 2003
Page 6
Agent's duties hereunder, and Escrow Agent shall incur no liability and shall be
fully protected in acting in accordance with the opinion and instructions of
counsel.
12. DISAGREEMENTS
In the event of any disagreement between the undersigned or
any of them, and/or the person or persons named in the foregoing instructions,
and/or any other person, resulting in adverse claims and demands being made in
connection with or for any papers, money or property involved herein or affected
hereby, Escrow Agent shall be entitled at its option to refuse to comply with
any such claim or demand, so long as such disagreement shall continue, and in so
doing Escrow Agent shall not be or become liable for damages or interest to the
undersigned or any of them or to any person named in the foregoing instructions
for its failure or refusal to comply with such conflicting or adverse demands;
and Escrow Agent shall be entitled to continue so to refrain and refuse so to
act until:
(i) The rights of the adverse claimants have been finally
adjudicated in a court assuming and having jurisdiction of the parties and the
money, papers, and property involved herein or affected hereby;
(ii) All differences shall have been adjusted by agreement
and Escrow Agent shall have been notified thereof in writing by all of the
persons interested; and/or interested; and/or
(iii) In the event of such disagreement, Escrow Agent, in
its discretion, may file a suit in interpleader for the purpose of having the
respective rights of the claimants adjudicated, and deposit with the court all
documents and property held hereunder, and the undersigned agree to pay all
costs and counsel fees incurred by Escrow Agent in such action and said costs
and fees be included in the judgment in any such action.
13. FEES AND CHARGES
In the event that Escrow Agent performs any service not
specifically provided herein, or there is any assignment or attachment of any
interest in the subject matter of this escrow or modification thereof, or that
any controversy arises hereunder, or that Escrow Agent is made a party to, or
intervenes in, any litigation pertaining to this escrow or the subject matter
thereof, Escrow Agent shall be reasonably compensated therefor and reimbursed
for all costs and expenses, including attorneys' fees, occasioned thereby.
______________________
___________________, 2003
Page 7
14. RESIGNATION OF ESCROW AGENT
Notwithstanding anything in these instructions to the
contrary, the Escrow Agent may, at its discretion, upon sixty (60) days prior
written notice to Cronos and Karadas, resign as Escrow Agent; notwithstanding
any such resignation, the Escrow Agent shall be entitled to reimbursement for
those costs and expenses incurred by the Escrow Agent to the date of such
resignation. Upon its resignation, the Escrow Agent shall disburse or transfer
the monies in the Escrow Account as jointly instructed by Cronos and Karadas.
15. AUTOMATIC SUCCESSION
Any company into which the Escrow Agent may be merged or with
which it may be consolidated, or any company to whom Escrow Agent may transfer a
substantial amount of its escrow business, shall be the successor to the Escrow
Agent without the execution or filing of any paper or any further act on the
part of any of the Escrow Agent, Cronos, and Karadas, anything herein to the
contrary notwithstanding.
16. SIGNATURES
These instructions may be executed in counterparts, each of
which so executed shall be deemed as original, irrespective of the date of its
execution and delivery, and said counterparts together shall constitute one and
the same instrument.
THE CRONOS GROUP
By: __________________________________________
Xxxxxx X. Xxxxx
Chief Executive Officer
KARADAS GmbH
By: __________________________________________
Mag. Xxxxxxx Xxxxxxxxxx
Managing Director
______________________
___________________, 2003
Page 8
Escrow Agent hereby acknowledges receipt of these escrow
instructions, and upon receipt of the papers, money or property therein referred
to, agrees, in consideration of the foregoing, to hold and dispose of the same
in accordance with said instructions, and upon the terms and conditions set
forth.
___________________________________
By: _______________________________
Its: ______________________________
Dated: _______________________,2003
Address: __________________________
__________________________
Telephone: ________________________
Fax: ______________________________
Email: ____________________________
EXHIBIT A
_______________, ____
_______________________
_______________________
_______________________
Attention: ____________________
____________________
Re: Escrow Agreement and Instructions
The Cronos Group
Karadas GmbH
Escrow No.
Ladies and Gentlemen:
Pursuant to Paragraph 2(a) of the Escrow Agreement and
Instructions ("Instructions") by and among you, The Cronos Group, and Karadas
GmbH, the undersigned hereby confirms that it has made a deposit of
___________________ to Escrow Account No. _______________, representing the
[Cronos Net Proceeds] [the Austrian Charging Order Net Proceeds] [the Final
Payment] called for pursuant to the provisions of Section _______ of the
Settlement Agreement referred to in the Instructions. The deposit is to be held
by you pursuant to the terms and conditions of the Instructions.
THE CRONOS GROUP
By: __________________________________
Name: _________________________________
Its: __________________________________
EXHIBIT B
_______________, ____
_______________________
_______________________
_______________________
Attention: ____________________
____________________
Re: Escrow Agreement and Instructions
The Cronos Group
Karadas GmbH
Escrow No.
Ladies and Gentlemen:
Pursuant to the provisions of Paragraph 3(b) of the
above-referenced Escrow Agreement and Instructions, and as called for by Section
4.2 of the Settlement Agreement referred to therein, the undersigned hereby
jointly instruct you to make the following disbursements, by wire transfer, and
net of your charges, from the above-referenced escrow account:
(a) Transfer ________________ to:
Karadas GmbH
c/o __________________________ Bank
___________________________________
Account No. _______________________
Swift No. _________________________
Confirmation to:
___________________________________
Tel. No.: _________________________
Email: ____________________________
______________________
___________________, 2003
Page 2
[(b) The balance, to:
The Cronos Group
c/o __________________________ Bank
___________________________________
___________________________________
Account No. _______________________
ABA Routing No. ___________________
Confirmation to:
___________________________________
Tel. No.: _________________________
Email: ____________________________]
THE CRONOS GROUP
By: _______________________
Xxxxxx X. Xxxxx
Chief Executive Officer
KARADAS GmbH
By: _______________________
Mag. Xxxxxxx Xxxxxxxxxx
Managing Director
EXHIBIT B
LIST OF CONTRIN CONTAINER OWNERS
(Article VIII of Settlement Agreement)
LIST OF CONTRIN CONTAINER OWNERS
1. Contrin Konsortium 1987/2
2. Contrin Konsortium 1988/1.
3. Contrin Konsortium 1988/S.
4. Contrin Ubersee Transportgeraete Handelsgesellschaft m.b.h. & Co KG
1989.
5. Contrin Ubersee Transportgeraete Handelsgesellschaft m.b.h. & Co KG
1990.
6. Contrin Ubersee Transportgeraete Handelsgesellschaft m.b.h. & Co KG
1991.
7. Contrin Container GmbH.
8. Contrin Container GmbH 1993.
9. Contrin Worldwide Container Leasing GmbH.
1
EXHIBIT C
FORM OF AMENDMENT TO CONTAINER
MANAGEMENT AGREEMENTS BETWEEN
CRONOS CONTAINERS N.V.
AND CONTRIN CONTAINER OWNERS
(Article VIII of Settlement Agreement)
AMENDMENT TO CONTAINER MANAGEMENT AGREEMENT
THIS AMENDMENT TO CONTAINER MANAGEMENT AGREEMENT ("Amendment") is
entered into as of this ____ day of _________, 2003 by and between Cronos
Containers N.V., a Netherlands Antilles company ("Manager") and _____________,
an Austrian _____________ ("Owner"), with reference to the following:
A. CNV, The Cronos Group, Karadas GmbH, Contrin Worldwide Container
Leasing GmbH, and Contrin Ubersee Transportgeraete Handelsgesellschaft m.b.h. &
Co KG 1989, are parties to that certain Settlement Agreement, dated as of
November 17, 2003 (the "Settlement Agreement").
B. Pursuant to the terms of the Settlement Agreement, the parties
thereto have resolved disputes that have arisen among them, one of which is the
treatment by the Manager of certain proceeds of containers deemed "Casualty
Losses" by Manager under the terms of certain container management agreements by
and between CNV and the "Contrin Container Owners" (as said term is defined in
the Settlement Agreement). The Owner is one of the Contrin Container Owners
identified in the Settlement Agreement.
C. Pursuant to the provisions of Article VIII of the Settlement
Agreement, the Manager and Karadas, acting for and on behalf of the Contrin
Container Owners, including the Owner identified above, have agreed to amend the
container management agreements between CNV and Contrin Container Owners to
clarify the allocation of the net proceeds of containers deemed Casualty Losses
or obsolete by Manager.
D. CNV and Owner are parties to that certain Management Agreement,
dated as of December 9, 1993, as amended by the First Amendment thereto, dated
as of January 3, 1994, and as further amended by that certain Agreement, dated
December 15, 1999 (the Management Agreement, as amended, referred to hereinafter
as the "Management Agreement").
E. All defined terms not defined herein shall have the meanings
ascribed to them by the Management Agreement.
1
NOW, THEREFORE, in consideration of the premises, Manager and Owner
hereby agree as follows:
1. THE DISPOSAL OF CONTAINERS WHICH ARE LOST, DESTROYED, OR UNFIT
OR UNECONOMICAL FOR CONTINUED LEASING.
Section 3(__) of the Management Agreement is hereby amended to read in
its entirety as follows:
"(__) This Agreement shall terminate with respect to any
Container which is lost, destroyed, or rendered unfit or uneconomical,
in Manager's business judgment as Manager of the Containers and agent
of Owner, for continued leasing (collectively, a "Retirement"). No
consent or approval of Owner is required in connection with Manager's
determination that a Container is unfit or uneconomical for continued
leasing. Upon the Retirement of a Container, with respect to the
proceeds, including insurance proceeds, attributable to any such
Retirement, and after paying or reserving therefrom all reasonable and
necessary third-party expenses incurred in connection with the
Retirement, the net proceeds of the Retirement shall be allocated and
paid 20% to the Manager and 80% to the Owner. The foregoing allocation
and payment of the net proceeds from the Retirement of Containers shall
be in lieu of, and replace, Manager's obligation to pay the
"Termination Value" of the Containers upon any Retirement thereof."
2. CONFIRMATION OF TREATMENT OF REPAIR COST REIMBURSEMENTS.
Owner and Manager confirm that "Gross Lease Revenues" includes lessee
reimbursements for repair charges and other expenses related to the repair and
maintenance of the Containers and that "Operating Expenses" includes all repair
charges and other expenses related to the repair and maintenance of the
Containers.
3. PERIODIC REPORTING OF RETIREMENTS.
With its quarterly reports to Owner, Manager shall include therein a
report of all Retirements of Containers for the quarter, indicating the amount
thereof, the proceeds realized by Manager with respect to the Retirements, and
the third-party costs, if any, incurred in connection with the Retirements.
2
4. MANAGEMENT AGREEMENT TO REMAIN IN FULL FORCE AND EFFECT.
Other than as amended hereby, the Management Agreement shall remain in
full force and effect.
IN WITNESS WHEREOF, Manager and Owner have executed this Amendment as
of the day and year first above written.
"MANAGER"
CRONOS CONTAINERS N.V.
By: ____________________________
Its: ___________________________
"OWNER"
________________________________
By: ____________________________
Its: __________________________
3
