Exhibit 10.118
Private & Confidential
DATED 4th July 2003
MARCONI CORPORATION PLC (1)
AND
HOARE GOVETT LIMITED (2)
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PLACING AGREEMENT
RELATING TO THE PLACING OF ORDINARY SHARES
OF EASYNET GROUP PLC
BY MARCONI CORPORATION PLC
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(XXXXXX XXXX LOGO)
CONTENTS
CLAUSE PAGE
1 Definitions....................................................... 3
2 Conditions........................................................ 6
3 Specific obligations.............................................. 6
4 The Placing....................................................... 7
5 Settlement........................................................ 7
6 Commissions and fees.............................................. 8
7 Warranties, representations and undertakings...................... 9
8 Hoare Govett's indemnity.......................................... 9
9 Warranties and indemnities - supplemental provisions.............. 00
00 Xxx XX Xxxxxxxxxxxxxxx............................................ 00
00 Xxxxxx Xxxxxx Selling Restrictions................................ 13
12 General........................................................... 14
13 Time of the essence............................................... 15
14 Notices........................................................... 15
15 Effects of this Agreement......................................... 15
16 Counterparts...................................................... 15
17 Governing law and jurisdiction.................................... 15
Schedule Warranties..................................................... 17
AGREED FORM DOCUMENTS
Announcement
Placing Press Release
THIS AGREEMENT is dated 2003 and made BETWEEN:
(1) MARCONI CORPORATION PLC (registered in England and Wales No. 67307) whose
registered office is at Xxx Xxxxxxx Xxxx, XX Xxx 00, Xxxxxxxx XX0 0XX
("MARCONI"); and
(2) HOARE GOVETT LIMITED (registered in England and Wales No. 2026375) whose
registered office is at 000 Xxxxxxxxxxx, Xxxxxx XX0X 0XX ("HOARE GOVETT").
WHEREAS:
(A) Marconi intends to place up to 36,135,948 Ordinary Shares of the Company
with institutional investors.
(B) On and subject to the terms and conditions of this Agreement, Hoare Govett
has agreed, as agent for and on behalf of Marconi, to use its reasonable
endeavours to procure placees for the Placing Shares at the Placing Price.
(C) Marconi currently legally and beneficially owns, save as disclosed in Part
II of the Schedule, 30,111,162 Ordinary Shares and 50,707,150 Convertible
Shares. The Placing involves the delivery to placees of up to a maximum of
36,135,948 Placing Shares (comprising Existing Ordinary Shares and New
Ordinary Shares). The maximum number of Placing Shares will be comprised of
the Existing Ordinary Shares and up to 6,024,786 New Ordinary Shares. The
New Ordinary Shares will result from the conversion of an equivalent number
of Convertible Shares currently owned by Marconi in accordance with Article
17 of the Articles of Association of the Company. Application will be made
for Admission of the New Ordinary Shares.
(D) The Placing is to be made outside the United States to non-US persons
within the meaning of and pursuant to Regulation S under the Securities Act
("REGULATION S") and may, subject to demand, be made within the United
States to a limited number of institutional investors, who are qualified
institutional buyers ("QIBS") within the meaning of and in reliance on Rule
144A under the Securities Act ("RULE 144A").
NOW IT IS HEREBY AGREED as follows:
1 DEFINITIONS
1.1 In this Agreement (including the recitals and the schedules to this
Agreement) unless the context otherwise requires the following expressions
have the following meanings:
"ADDITIONAL CONDITION" means the condition applicable to the Additional
Placing set out in clause 2.2;
"ADDITIONAL PLACING" means the conditional placing by Hoare Govett of New
Ordinary Shares on the terms of this Agreement and the Placing Press
Release;
"ADDITIONAL PLACING PROCEEDS" means the Placing Price multiplied by the
number of New Ordinary Shares that are placed with Placees pursuant to
clause 4;
"ADMISSION" means the admission of such number of the New Ordinary Shares
as are placed with Placees pursuant to clause 4 to the Official List of the
UK Listing Authority becoming effective in accordance with the Listing
Rules and the admission of such New Ordinary Shares to trading by the
London Stock Exchange on its market for listed securities becoming
effective in accordance with the Standards;
"ANNOUNCEMENT" means the announcement in the agreed form as amended to give
details of the outcome of the Placing;
"BOOKBUILD" means the process of building demand for the Placing;
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"BUSINESS DAY" means a day not being a Saturday or a Sunday on which banks
are open for business in the City of London;
"CA 1985" means the Companies Xxx 0000, as amended;
"COMPANY" means Easynet Group plc (registered number 3137522) whose
registered office is at 00-00 Xxxxxxxxx Xxxxxx, Xxxxxx X0X 0XX;
"CONDITION" means the condition applicable to the Placing set out in clause
2.1;
"CONVERSION" means the conversion of up to 6,024,786 of the Convertible
Shares into an equivalent number of New Ordinary Shares in accordance with
Article 17 of the Articles of Association of the Company;
"CONVERTIBLE SHARES" means the 50,707,150 non-voting unlisted Ordinary
Shares of 4p each in the capital of the Company held by Marconi;
"CREST" means the relevant system of which CRESTCo is the Operator;
"CRESTCO" means CRESTCo Limited, a company incorporated in England and
Wales, being the Operator of CREST;
"EXISTING ORDINARY SHARES" means the 30,111,162 Ordinary Shares currently
owned by Marconi;
"FSA" means The Financial Services Authority Limited;
"FSMA 2000" means the Financial Services and Markets Xxx 0000;
"HOARE GOVETT GROUP" means Hoare Govett, any parent company of Hoare Govett
and any subsidiary or subsidiary undertaking of Hoare Govett or of such
parent company and any body corporate in which any of those entities is a
controller (within the meaning of section 422 FSMA 2000);
"INDEMNIFIED PERSONS" means Hoare Govett, each other member of the Hoare
Govett Group and all their respective directors, officers or employees each
of whom shall be an "INDEMNIFIED PERSON" for the purposes of this
Agreement;
"LISTING RULES" means the listing rules made under section 74 FSMA 2000 (as
amended from time to time);
"LONDON STOCK EXCHANGE" means London Stock Exchange plc;
"MAIN PLACING" means the proposed placing by Hoare Govett of some or all of
the Existing Ordinary Shares on the terms of this Agreement and the Placing
Press Release;
"MAIN PLACING PROCEEDS" means the Placing Price multiplied by the number of
Existing Ordinary Shares that are placed with Placees pursuant to clause 4;
"NEW ORDINARY SHARES" means up to 6,024,786 Ordinary Shares which will
result from the conversion of an equivalent number of Convertible Shares
currently owned by Marconi automatically in accordance with Article 17 of
the Articles of Association of the Company following their transfer by
Marconi;
"OPERATOR" has the meaning ascribed thereto in the Regulations;
"ORDINARY SHARES" means ordinary shares of 4p each in the capital of the
Company;
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"PLACEES" means persons with whom the Placing Shares are to be placed
pursuant to the Placing;
"PLACING" means the Main Placing and the Additional Placing;
"PLACING PRESS RELEASE" means the press release in the agreed form to be
released for and on behalf of Marconi on the date hereof announcing
Marconi's intention to carry out the Placing;
"PLACING PRICE" means the price agreed by Marconi and Hoare Govett
determined as a result of the Bookbuild in accordance with clause 4.4,
being the price at which the Placing Shares are to be sold pursuant to the
Placing;
"PLACING PROCEEDS" means the Main Placing Proceeds and the Additional
Placing Proceeds;
"PLACING SHARES" means the number of Ordinary Shares to be sold in the
Placing determined pursuant to clause 4;
"PTM LEVY" means the aggregate of all levies payable to the Panel on
Takeovers and Mergers pursuant to rule 2.19 of the Rules of the London
Stock Exchange in relation to the Placing;
"REGISTRARS" means Capita IRG Plc of The Registry, 00 Xxxxxxxxx Xxxx,
Xxxxxxxxx, Xxxx XX0 0XX;
"REGULATIONS" means the Uncertificated Securities Regulations 2001;
"RELEVANT SYSTEM" has the meaning ascribed thereto in the Regulations;
"RELIEF" means any allowance, credit, exemption, deductions or relief
available, in computing, or available for offset against or in respect of
tax;
"SECURITIES ACT" means the United States Securities Act of 1933, as
amended;
"STANDARDS" means the current edition of the Admission and Disclosure
Standards produced by the London Stock Exchange;
"SUBSIDIARY" has the meaning ascribed thereto by section 736 CA 1985 and
includes subsidiary undertakings as defined in section 258 CA 1985 and
"SUBSIDIARIES" shall mean more than one subsidiary;
"TAX" or "TAXATION" means any form of taxation whenever created or imposed
and whether of the United Kingdom or elsewhere and, without prejudice to
the generality of the foregoing, includes income tax, corporation tax,
advance corporation tax, capital gains tax, value added tax, inheritance
tax, withholding tax, rates, customs and excise duties, National Insurance
and any other taxes, levies, duties or imposts similar to, replaced by or
replacing any of them and all penalties, fines and interest included in or
relating to any tax assessment therefor;
"TAXATION AUTHORITY" means the Inland Revenue, HM Customs & Excise or any
other revenue, customs, fiscal, governmental, statutory, provincial, local
government or municipal authority, body or person whether of the United
Kingdom or elsewhere competent to impose, administer or collect any
taxation;
"UK LISTING AUTHORITY" means the Financial Services Authority acting in its
capacity as competent authority for the purposes of Part VI of the FSMA
2000; and
"WARRANTIES" means the warranties, representations and undertakings given
pursuant to clause 7 and the Schedule and "WARRANTY" shall mean any one of
them.
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1.2 References to clauses and schedules are unless otherwise stated to clauses
of and schedules to this Agreement and references to this Agreement include
recitals and schedules to this Agreement.
1.3 A reference to any document "IN THE AGREED FORM" means in the form of the
draft or proof of the document agreed by the parties and signed by them or
on their behalf for the purposes of identification with such alterations
(if any) as may subsequently be agreed between the parties. References to
such documents in this Agreement shall, where the context so admits, be
references to such documents as so amended.
1.4 References to statutory provisions shall be construed as references to
those provisions as respectively replaced, amended or re-enacted (whether
before or after the date hereof) and shall include any provisions of which
they are re-enactments (whether with or without modification) and any
subordinate legislation made under such provisions.
1.5 Words importing the singular include the plural and vice versa, words
importing any gender include every gender and references to persons include
bodies corporate or unincorporate, unincorporated associations and
partnerships.
1.6 The headings to the clauses are for convenience only and have no legal
effect.
2 CONDITIONS
2.1 The Placing is conditional upon the Placing Press Release being released by
no later than 10.00 am on the date hereof.
2.2 In addition to the satisfaction of the Condition, the Additional Placing is
also conditional upon Admission becoming effective by announcement in
accordance with the Listing Rules not later than 9.00 am on 11 July 2003.
2.3 If the Condition shall not have been fulfilled by the specified time and
date or if Hoare Govett and Marconi shall have failed to determine and
agree the Placing Price and the number of Placing Shares pursuant to clause
4.4 by 4.30 p.m. on the date hereof then the obligations of Hoare Govett
under this Agreement shall ipso facto cease and determine and neither party
shall have any claim against the other for costs, damages, charges,
compensation or otherwise save that the provisions of clauses 8, 9, 12.4,
12.5, 14, 15, 16 and 17 shall remain in full force and effect.
2.4 If the Additional Condition shall not have been fulfilled by its specified
time and date but the Condition shall have been fulfilled by its specified
time and date then the obligations of Hoare Govett under this Agreement in
respect of the Additional Placing shall ipso facto cease and determine and
neither party shall have any claim against the other for costs, damages,
charges, compensation or otherwise in respect of the Additional Placing,
save that Marconi shall pay Hoare Govett the costs and expenses payable by
it in accordance with clause 6.3. For the avoidance of doubt the provisions
of clauses 8, 9, 12.4, 12.5, 14, 15, 16 and 17 shall remain in full force
and effect notwithstanding the failure to complete the Additional Placing.
2.5 Marconi undertakes to use its reasonable endeavours to procure that the
Condition is fulfilled by the specified time and date.
2.6 Hoare Govett undertakes to use its reasonable endeavours to procure that
the Additional Condition is fulfilled by the specified time and date.
3 SPECIFIC OBLIGATIONS
3.1 Marconi hereby undertakes to Hoare Govett to provide all such information
known to it to execute all such documents, pay such fees and do or procure
to be done all such things as may reasonably be required by Hoare Govett
for the purpose of complying with the requirements of law, the UK Listing
Authority or of the London Stock Exchange in connection with the Placing.
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4 THE PLACING
4.1 Marconi:
4.1.1 hereby irrevocably appoints Hoare Govett as its agent for the purpose of
carrying out the Placing on the terms and subject to the conditions set
out in this Agreement and the Placing Press Release; and
4.1.2 hereby confirms that the foregoing appointment confers on Hoare Govett
all powers, authorities and discretions on behalf of Marconi which are
necessary for, or reasonably incidental to, the procuring of purchasers
for the Placing Shares on the terms and conditions contained in this
Agreement and hereby agrees to ratify and confirm everything which Hoare
Govett shall lawfully and properly do in the exercise of such powers,
authorities and discretions in accordance with the terms of this
Agreement.
4.2 Relying on the indemnities, representations, undertakings and warranties
contained in this Agreement and upon the terms and conditions contained
in this Agreement Hoare Govett undertakes to use reasonable endeavours to
procure Placees to purchase the Placing Shares on the terms and
conditions of this Agreement.
4.3 Hoare Govett shall have absolute discretion, prior to the release of the
Announcement, to accept or reject any application for Placing Shares
either in whole or in part.
4.4 As soon as practicable after release of the Placing Press Release and in
any event no later than 4.30pm on the date hereof, Hoare Govett and
Marconi shall determine the number of Placing Shares to be sold in the
Placing and the Placing Price. To the extent that the number of Placing
Shares agreed pursuant to this clause are equal to or less than the
number of Existing Ordinary Shares, then the Placing Shares shall
comprise such Existing Ordinary Shares. To the extent that the number of
Placing Shares agreed pursuant to this clause exceed the number of
Existing Ordinary Shares, then the Placing Shares shall comprise the
Existing Ordinary Shares and a number of New Ordinary Shares equal to
such excess.
4.5 As soon as practicable after the Placing Price and the number of Placing
Shares has been determined and agreed pursuant to clause 4.4 Marconi
shall arrange for the release of the Announcement.
5 SETTLEMENT
5.1 Subject to satisfaction of the Condition and the determination and
agreement of the Placing Price and the number of Placing Shares pursuant
to clause 4.4:
5.1.1 (a) Hoare Govett will pay or procure to be paid to Marconi the Main
Placing Proceeds; and
(b) subject also to satisfaction of the Additional Condition, Hoare
Govett will pay or procure to be paid to Marconi the Additional
Placing Proceeds (if any),
(less in each case, any sums due to Hoare Govett as provided for by
clause 6) on the fifth Business Day after the date of this Agreement but
only to the extent that such proceeds are received from Placees.
5.1.2 by no later than the first Business Day after the date of this Agreement
Marconi shall deliver to Hoare Govett (free of payment) a CREST transfer
form or a stamped stock transfer form (as Hoare Govett may request) in
respect of such number of Convertible Shares as are subject to the
Additional Placing, in favour of such nominee company as Hoare Govett may
specify, to be transferred to such nominee as nominee for Marconi,
together with the relevant definitive certificate(s); and
5.1.3 by no later than the first Business Day after the date of this Agreement,
Marconi shall deliver to Hoare Govett (free of payment) a CREST transfer
form in respect of such number of
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Existing Ordinary Shares as are subject to the Main Placing, in favour of
such nominee company as Hoare Govett may specify, to be transferred to
such nominee as nominee for Marconi, together with the relevant
definitive certificate(s).
5.2 Hoare Govett shall deliver, or procure delivery of, all documents
referred to in clauses 5.1.2 and 5.1.3 to the Registrars.
5.3 The payments referred to in clause 5.1.1 shall be made in cleared funds
available on the same day to the following bank account:
Account Number: 00000000
Account Name: Marconi Corporation plc
Sort Code: 40-05-30
Bank: HSBC Bank plc, Xxxxxxx Xxxxxx, Xxxxxx XX0
Swift Code: XXXXXX00
5.4 Payments by Hoare Govett in accordance with clause 5.1.1 shall constitute
a complete discharge for Hoare Govett of its obligations under this
clause 5.
5.5 Marconi shall transfer the Placing Shares to the Placees free and clear
of any lien, charge, claim or other encumbrance or any right of any third
party whatsoever attaching thereto and subject thereto with full title
guarantee.
5.6 In the event of any difficulties or delays in the use of CREST in
relation to the transfer of Placing Shares pursuant to this clause 5,
including but not limited to any delay in the admission of the Placing
Shares to CREST, Hoare Govett and Marconi agree that all of the Placing
Shares shall be transferred in certificated form and the provisions in
this Agreement relating to the Placing arrangements will then be deemed
to be modified accordingly.
5.7 Marconi undertakes to issue the Confirmation Certificate (as defined in
the Schedule hereto) to the Security Trustee (as defined in the Schedule
hereto) as soon as reasonably practicable following the determination of
the number of Placing Shares to be sold pursuant to clause 4.4 of this
Agreement and to take such other steps as may be required to procure the
release of any security interests over the Existing Ordinary Shares and
Convertible Shares that are to be the subject of the Placing.
5.8 If Hoare Govett does not pay or procure payment of any of the Placing
Proceeds payable to Marconi pursuant to clause 5.1, Hoare Govett shall,
as soon as practicable, transfer or procure transfer of such number of
Ordinary Shares in respect of which payment has not been received to
Marconi.
6 COMMISSIONS AND FEES
6.1 Marconi shall pay Hoare Govett an initial commission of 2 per cent on the
gross amount of the Main Placing Proceeds and the Additional Placing
Proceeds (if any) (the "INITIAL COMMISSION") and, if the Placing Price
exceeds:
6.1.1 105 xxxxx then, in addition to the Initial Commission, Marconi shall pay
Hoare Govett an additional commission of 8 per cent on an amount equal to
the number of Placing Shares multiplied by the difference between the
Placing Price and 105 xxxxx (the "FIRST ADDITIONAL COMMISSION")
6.1.2 110 xxxxx then, in addition to the Initial Commission and the First
Additional Commission, Marconi shall pay Hoare Govett an additional
commission of 5 per cent on an amount equal to the number of Placing
Shares multiplied by the difference between the Placing Price and 110
xxxxx (the "SECOND ADDITIONAL COMMISSION").
6.1.3 115 xxxxx then, in addition to the Initial Commission, the First
Additional Commission and the Second Additional Commission, an additional
commission of 5 per cent will be payable
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on an amount equal to the number of Placing Shares multiplied by the
difference between the Placing Price and 115 xxxxx.
Such commission will be deducted from the Placing Proceeds paid to
Marconi pursuant to clause 5.1.1 (together with any other amount payable
to Hoare Govett pursuant to this clause 6).
6.2 In addition to the commission referred to above, Marconi shall pay all
the other costs, charges and expenses properly and reasonably incurred in
connection with, or incidental to, the Placing, including (but not
limited to) the PTM Levy, the UK Listing Authority and London Stock
Exchange listing fees, printing and advertising costs, postage,
Registrars' fees and Hoare Govett's legal and other professional
expenses.
6.3 If the Condition is not satisfied, Marconi shall not be obliged to pay to
Hoare Govett the commission on the Main Placing Proceeds referred to in
clause 6.1 and if the Additional Condition is not satisfied Marconi shall
not be obliged to pay to Hoare Govett the commission on the Additional
Placing Proceeds referred to in clause 6.1, but if the provisions of
clause 2.4 apply, on receipt of the appropriate VAT invoice Marconi shall
pay, or reimburse, to Hoare Govett the costs, charges and expenses
(together with VAT chargeable thereon) referred to in clause 6.2.
6.4 In the event that any stamp duty or stamp duty reserve tax (as
applicable) is payable by Hoare Govett or any Placee in connection with
their purchase of any of the Placing Shares pursuant to the arrangements
contemplated hereby, Marconi agrees with Hoare Govett that such stamp
duty or stamp duty reserve tax (up to 0.5 per cent of the consideration
and if stamp duty rounded up to the nearest Pound Sterling5 for each
share transfer) shall be borne by Marconi and Marconi shall indemnify
Hoare Govett in connection with enforcing its liability under this
clause 6.4.
6.5 Where Marconi reimburses Hoare Govett in respect of any expenses, it
shall in addition pay to Hoare Govett in respect of value added tax:
6.5.1 if any reimbursement in respect of expenses constitutes part of the
consideration for any supply of services to Marconi by Hoare Govett and
Hoare Govett does not charge value added tax on it under clause 6.6, such
amount as equals any value added tax charged to Hoare Govett in respect
of the said expenses which is not recoverable by Hoare Govett by
repayment or set-off; and
6.5.2 if any such expenses constitute disbursements incurred by Hoare Govett as
agent on behalf of Marconi, any value added tax charged thereon to Hoare
Govett.
6.6 Any value added tax properly chargeable in respect of any amount payable
to Hoare Govett pursuant to this clause 6 or clause 5.1 shall be paid in
addition to and together with such amount on production of an appropriate
value added tax invoice and in respect of a payment under clause 6.5.2,
Hoare Govett shall issue, or use reasonable endeavours to procure that
the relevant third party issue, a valid value added tax invoice to
Marconi.
7 WARRANTIES, REPRESENTATIONS AND UNDERTAKINGS
7.1 Marconi hereby warrants, represents and undertakes to Hoare Govett as an
inducement to Hoare Govett to enter into this Agreement, as at the date
hereof in the terms set out in the Schedule.
7.2 Marconi undertakes to Hoare Govett not to cause and to use all reasonable
endeavours not to permit any event to occur after the date hereof and
prior to Admission which if it had occurred or arisen before the date
hereof would have rendered any of the Warranties untrue or incorrect.
8 HOARE GOVETT'S INDEMNITY
8.1 No claim shall be made against any Indemnified Person by Marconi to
recover any damage, loss, liability, cost, charge or expense which
Marconi may suffer or incur or claim to have suffered or incurred by
reason of or arising out of the carrying out or performance by Hoare
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Govett (or by an Indemnified Person on its behalf) of its obligations and
services hereunder or otherwise in connection with the Placing unless and
to the extent that such damage, loss, liability, cost, charge or expense
arises from the material breach of contract, negligence or wilful default
of an Indemnified Person, or the material breach by Hoare Govett of any
of its duties or obligations under the FSMA 2000 or the regulatory system
as defined in the definitions section of the FSA handbook.
8.2 Marconi undertakes to and with Hoare Govett (for itself and as trustee
for each and every Indemnified Person) that it will (to the extent
permitted by the CA 1985) indemnify each Indemnified Person and at all
times keep each Indemnified Person fully and effectively indemnified
against all claims, costs, charges, expenses, liabilities, actions,
demands, proceedings and judgements whatsoever which any Indemnified
Person may wheresoever suffer or incur or which may be brought or
threatened to be brought against or incurred by any of them in any
jurisdiction whatsoever (and in the case of a claim whether or not such
claim is successful, compromised or settled) by any Placee of the Placing
Shares or any subsequent purchaser or transferee thereof or of any other
shares in the Company or by any other person, government, governmental
agency or regulatory body whatsoever and against all reasonably and
properly incurred costs, charges and expenses (including legal fees) and
taxes (excluding taxes on its remuneration under or in connection with
the Placing or any stamp duty or stamp duty reserve tax) which it may
reasonably and properly pay, suffer or incur as a result thereof
(including but without limitation all such reasonable costs, charges and
expenses (including legal fees) and taxes as it may reasonably and
properly pay or incur in responding to, disputing or considering any such
actual or potential actions, claims, demands or proceedings aforesaid
and/or in establishing its rights to be indemnified pursuant to this
clause 8 and/or in seeking advice as to any claim, action, liability,
demand or proceedings aforesaid or in any way related to or in connection
with this indemnity or the Placing) and which in any such case arises out
of or in connection with or results from or is attributable to:
8.2.1 any breach or alleged breach by Marconi of its obligations or
undertakings in this Agreement or any breach or alleged breach of any of
the representations and warranties contained in this Agreement; or
8.2.2 the performance by Hoare Govett or any Indemnified Pension of its
obligations and services hereunder or otherwise in connection with the
Placing and the preparation and distribution of the Placing Press Release
and any financial promotion or written material issued, caused to be
issued and used, in each case by Marconi, in connection with the Placing;
or
8.2.3 the Placing; or
8.2.4 the content, publication and distribution of the Placing Press Release,
any financial promotion or written material issued caused to be issued or
used by Marconi or with their consent in connection with the Placing, or
the Placing Press Release not containing, or being alleged not to
contain, all the information required to be stated therein by any law or
regulation, or any statement therein being, or being alleged to be,
untrue, inaccurate, incomplete or misleading or defamatory or not based
on reasonable grounds or as having been made negligently or otherwise
without the required standard of skill and care or reasonableness; or
8.2.5 any misrepresentation or alleged misrepresentation (by whomsoever made)
being contained, or being alleged to be contained, in the Placing Press
Release or any financial promotion or written material issued or caused
to be issued by Marconi or with their consent in connection with the
Placing; or
8.2.6 any breach or alleged breach of the laws or regulations of any country or
the regulations of any stock exchange or the rules or requirements of
CREST in connection with the Placing or the distribution of the Placing
Press Release; or
8.2.7 any material issued or caused to be issued by Hoare Govett at the request
of Marconi, or by or at the request of Marconi but which is approved by
Hoare Govett, before, on or after the date hereof in relation to the
Placing and which in any such case contains a rubric to that effect or
would but for an exemption pursuant to any statute, statutory instrument
or the rules of the FSA contain such a rubric,
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and which do not in any case arise from the material breach of contract,
negligence or wilful default of Hoare Govett and/or an Indemnified
Person, or material breach by Hoare Govett of any of its duties or
obligations under the FSMA 2000 or regulatory system as defined in the
definitions section of the FSA handbook. This clause 8.2 shall not
preclude Hoare Govett or any Indemnified Person from exercising any
rights it may have at common law including, without prejudice to the
generality of the foregoing, any right of contribution. Such rights shall
be in addition to any liability in respect of Hoare Govett's services to
Marconi which Marconi might otherwise have to Hoare Govett or any
Indemnified Person and shall survive completion of all matters and
arrangements referred to or contemplated by this Agreement.
8.3 If any claim is made by a third party against any Indemnified Person the
relevant Indemnified person shall promptly notify Marconi and Marconi may
assume conduct of the defence of any claim or action against such
Indemnified Person (other than any regulatory or governmental
investigation or proceedings) (an "Action") with counsel approved by such
Indemnified Person (such approval not to be unreasonably withheld)
provided that:
8.3.1 it does so within 21 days of receiving notice from the relevant
Indemnified Person of a potential claim under this indemnity;
8.3.2 the Indemnified Person has the right to full information, consultation
and representation concerning the development and defence of any
litigation or threatened litigation;
8.3.3 no admission of liability or compromise whatsoever in connection with the
Action may take place without Hoare Govett's prior written consent
unless, following consultation with Hoare Govett, such admission or
compromise acknowledges that no Indemnified Person had any responsibility
for the matters giving rise to such Action, such admission or compromise
contains an unconditional release of such Indemnified Person from any and
all liabilities under such Action and the terms of such settlement or
compromise are final, confidential, documented and in writing; and
8.3.4 Hoare Govett or the appropriate Indemnified Person has the right at any
time to re-assume the defence of any claim or action assumed by Marconi,
with the full benefit of the indemnification constituted by the terms of
this indemnity.
In the event that Hoare Govett or any other Indemnified Person assumes or
re-assumes the defence of any Action against an Indemnified Person it
will keep Marconi informed about the conduct of the proceedings and will
consult with Marconi and take account of the views of Marconi so far as
reasonably possible (and only to the extent that its insurance policies
are not prejudiced thereby), but will have sole conduct of any
proceedings or dispute that may arise and absolute discretion with regard
to the progress, negotiations and settlement thereof. Notwithstanding the
foregoing, Marconi shall not be entitled to assume or continue with the
defence of any Action if (i) in the opinion of counsel to the Indemnified
Person, to do so would be inappropriate due to any actual or potential
differing interests between Marconi and such Indemnified Person; or (ii)
the Indemnified Person's insurers do not consent to Marconi assuming
control of the defence of any such Action and/or, in the reasonable
opinion of the Indemnified Person, to do so would conflict with the terms
of the Indemnified Person's relevant insurance policy. In either case the
relevant Indemnified Person shall be entitled to retain or resume the
defence of the Action with the full benefit of the indemnification
constituted by the terms of this Indemnity.
8.4 Each Indemnified Person shall have the right under the Contracts (Rights
of Third Parties) Xxx 0000 to enforce its rights against Marconi under
this clause 8 provided that:
8.4.1 Hoare Govett may, by agreement in writing with Marconi, vary any of the
rights conferred on any Indemnified Person under this clause 8 (without
requiring the consent of any Indemnified Person) and Hoare Govett shall
not be liable to any such Indemnified Person for any of its acts or
omissions under this clause 8; and
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8.4.2 Hoare Govett shall have sole discretion in deciding whether or not to
enforce an Indemnified Person's rights under this clause 8, and in
determining the terms and conditions of such enforcement.
8.5 Except as expressly agreed by Hoare Govett in writing or in respect of
documents issued by Hoare Govett without Marconi's knowledge or in
respect of any comfort letter issued by Hoare Govett to Marconi, neither
Hoare Govett nor any Indemnified Person or any of its advisers will be
responsible to Marconi, any of its Directors from time to time, or to any
other person responsible for the Placing for verifying the accuracy or
fairness of the information published in the Placing Press Release or any
document issued in connection with the Placing.
8.6 All sums payable to Hoare Govett or any Indemnified Person pursuant to
this clause 8 shall be paid free and clear of all deductions or
withholdings unless the deduction or withholding is required by law, in
which event the payer shall pay such additional amount (referred to
herein as a "gross-up amount") as will be required to ensure that the net
amount received by the relevant person will equal the full amount which
would have been received by it had not such deduction or withholding been
made.
8.7 If the United Kingdom Inland Revenue or any other Taxation Authority in
any jurisdiction brings into any charge to taxation (or into any
computation of income, profits or gains for the purpose of any charge for
taxation) any sum payable to an Indemnified Person under this clause 8,
the amount so payable shall be increased by such amount (referred to
herein as a "gross-up amount") as will ensure that after deduction of the
amount equal to taxation so chargeable (or which would have been
chargeable but for the availability of relief to Hoare Govett or any
Indemnified Person) there shall remain a sum equal to the amount that
would otherwise be payable under the terms of this Agreement (additional
payments being made on demand as may be necessary).
8.8 To the extent that an Indemnified Person subsequently obtains any tax
credit, allowance, repayment or relief as a result of Marconi paying to
the Indemnified Person the gross-up amount under clause 8.6 or 8.7, the
Indemnified Person shall pay to Marconi so much of the economic benefit
from that tax credit, allowance, repayment or relief which the
Indemnified Person has received as does not exceed the gross-up amount
(any question as to the accrual or amount of any such economic benefit,
the order and manner of making any claim for any tax credit, allowance,
repayment or relief, and the timing of any payment, being determined by
the Indemnified Person's auditors, or by Hoare Govett's auditors if the
relevant Indemnified Person does not have auditors).
9 WARRANTIES AND INDEMNITIES - SUPPLEMENTAL PROVISIONS
9.1 Subject as otherwise provided in this Agreement, all indemnities,
representations, undertakings and warranties contained in this Agreement
shall remain in full force and effect notwithstanding completion of this
Agreement.
9.2 The indemnities, representations, undertakings and warranties contained
in this Agreement shall be in addition to and shall not be construed to
limit, affect or prejudice any other right or remedy available to any
Indemnified Person.
9.3 No neglect, delay or indulgence on the part of any Indemnified Person in
enforcing the indemnities, representations, undertakings and warranties
contained in this Agreement or any other terms or conditions hereof shall
be construed as a waiver thereof and no single or partial exercise of any
rights or remedy under this Agreement will preclude or restrict the
further exercise or enforcement of any such right or remedy.
9.4 Any release, waiver or compromise or any other arrangement of any kind
whatsoever which any Indemnified Person may agree to or effect as regards
Marconi in connection with the indemnities, representations, undertakings
and warranties contained in this Agreement shall not affect the rights of
any Indemnified Person as regards any other person liable thereunder.
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10 NON US REPRESENTATIONS
10.1 Hoare Govett represents, warrants and undertakes to Marconi that:
10.1.1 to the best of its knowledge and belief, acting as a reasonable broker in
the UK market, it has not offered and sold, and will not offer and sell,
any Placing Shares to persons in the United Kingdom except to persons
whose ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of
their businesses, or otherwise in circumstances which have not resulted
in or will not result in an offer to the public in the United Kingdom for
the purposes of the Public Offers of Securities Regulations 1995, as
amended;
10.1.2 it has complied with and will comply in all material respects with all
applicable provisions of FSMA 2000 with respect to anything done by it in
relation to the Placing Shares in, from or otherwise involving the United
Kingdom;
10.1.3 to the best of its knowledge and belief, acting as a reasonable broker in
the UK market, neither Hoare Govett nor any of its affiliates nor any
person acting on any of their behalf has offered or sold nor will it or
they offer to sell any Placing Shares in any jurisdiction in which such
offer, sale or distribution would be in breach of any legal or regulatory
requirement or otherwise unlawful;
10.1.4 it has full power and authority to enter into this Agreement; and
10.1.5 it has full power under its constitutional documents and applicable law,
and all authorisations, approvals, consents and licenses required by it
have been unconditionally obtained and are in full force and effect, to
permit it to enter into and perform this Agreement; and this Agreement
has been duly authorised, executed and delivered by it and is a valid and
binding agreement of it enforceable in accordance with its terms.
11 UNITED STATES SELLING RESTRICTIONS
11.1 Hoare Govett and Marconi acknowledge and agree that the Placing Shares
have not been and will not be registered under the Securities Act and may
not be offered or sold within the United States or to, or for the account
or benefit of, U.S. persons except in accordance with Regulation S, to
QIBs in accordance with Rule 144A, or pursuant to another exemption from
the registration requirements of the Securities Act.
11.2 Marconi undertakes to Hoare Govett as follows:
11.2.1 neither Marconi, nor any of its affiliates (as defined in Rule 405 under
the Securities Act), nor any person acting on its or their behalf (other
than Hoare Govett, as to whom no representation, warranty or undertaking
is made) has engaged or will engage in any "directed selling efforts" (as
defined in Regulation S) with respect to the Placing Shares;
11.2.2 neither Marconi, nor any of its affiliates (as defined in Rule 501(b)
under the Securities Act), nor any person acting on its or their behalf
(other than Hoare Govett, as to whom no representation, warranty or
undertaking is made) has engaged or will engage in any form of general
solicitation or general advertising in connection with any offer or sale
of the Placing Shares, including but not limited to the methods described
in Rule 502(c) under the Securities Act; and
11.2.3 neither Marconi, nor any of its affiliates (as defined in Rule 501(b)
under the Securities Act), nor any person acting on its or their own
behalf (other than Hoare Govett, as to whom no representation, warranty
or undertaking is made) has taken or will take, directly or indirectly,
any action that would require the registration of the Placing Shares
under the Securities Act.
11.3 Hoare Govett represents, warrants and undertakes to Marconi that it has
not offered or sold, and will not offer or sell, any Placing Shares
constituting part of its allocation except (i) in accordance with Rule
903 of Regulation S, in which connection Hoare Govett represents and
agrees that
13
neither it, nor any of its affiliates (as defined in Rule 501(b) under
the Securities Act), nor any person acting on its or their behalf has
engaged or will engage in any directed selling efforts (as such term is
defined in Regulation S) with respect to the Placing Shares, (ii) to
those persons it reasonably believes to be QIBs, in which connection
Hoare Govett represents and agrees that (a) it has taken or will take
reasonable steps to ensure that the purchaser of such Placing Shares is
aware that such sale is being made in reliance on Rule 144A or pursuant
to another exemption from the registration requirements of the Securities
Act and (b) neither it nor any of its affiliates (as defined in Rule
501(b) under the Securities Act) nor any person acting on its or their
behalf has made or will make offers or sales of the Placing Shares in the
United States by means of any form of general solicitation or general
advertising in connection with any offer or sale of the Placing Shares,
including but not limited to the methods described in Rule 502(c) under
the Securities Act.
11.4 Hoare Govett represents, warrants and undertakes to Marconi that it has
not entered and will not enter into any contractual arrangement with
respect to the distribution or delivery of the Placing Shares, except
with or through its affiliates (who will be bound by these selling
restrictions) or with the prior written consent of Marconi.
11.5 Hoare Govett represents, warrants and undertakes to Marconi that it has
not taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or which might reasonably have been
expected to cause or result in stabilisation or manipulation of the price
of the Placing Shares, except for stabilisation activities conducted in
accordance with all applicable legal, regulatory and stock exchange
requirements.
11.6 Hoare Govett represents that all offers and sales of the Placing Shares
in the United States shall be made through the its U.S. registered
broker-dealer affiliate in compliance with all applicable U.S.
broker-dealer requirements.
12 GENERAL
12.1 Marconi will give all such assistance and provide all such information as
Hoare Govett shall reasonably require for the purposes of this Agreement
and will execute all such documents and do all such acts and things as
Hoare Govett may reasonably require in order to give effect to the terms
of this Agreement.
12.2 Any of the documents in the agreed form may be amended with the prior
approval of Hoare Govett and Marconi and references to such documents in
this Agreement shall, where appropriate, be construed as references to
such documents as so amended.
12.3 All payments provided for in this Agreement shall be made in pounds
sterling currency.
12.4 If Marconi has entered into or enters into any agreement or arrangement
with any adviser for the purpose of, or in connection with, the Placing
and the terms of which provide that the liability of the adviser to
Marconi or any other person is excluded or limited in any manner and
Hoare Govett may have joint and/or several liability with such adviser to
Marconi or to any other person arising out of the performance of its
duties under this Agreement then Marconi shall:
12.4.1 not be entitled to recover any amounts from Hoare Govett in excess of
what would have been the net amount of Hoare Govett's liability in the
absence of such exclusion or limitation;
12.4.2 indemnify Hoare Govett in respect of any increased liability to any third
party which would not have arisen in the absence of such exclusion or
limitation; and
12.4.3 take such other action as Hoare Govett may require to ensure that Hoare
Govett is not prejudiced as a consequence of such agreement or
arrangement.
12.5 Save as provided in clause 8, no term of this Agreement is enforceable
under the Contracts (Rights of Third Parties) Xxx 0000 by a person who is
not a party to this Agreement.
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12.6 Hoare Govett shall not be required to place or to procure that there are
placed on deposit any sums received by them or any of their agents by way
of purchase moneys for the Placing Shares (or any of them). Marconi
agrees that all moneys payable to it under the Placing or hereunder shall
not be treated as client money subject to any regulations made under or
pursuant to the FSMA 2000.
13 TIME OF THE ESSENCE
Any time, date or period mentioned in this Agreement may be extended by
mutual agreement between the parties hereto or otherwise as provided
herein, but as regards any time, date or period originally fixed or so
extended as aforesaid time shall be of the essence. All references in
this Agreement to a time of day are to London time.
14 NOTICES
14.1 Any notice or other document to be served under this Agreement may be
delivered or sent by first class recorded delivery post or facsimile
process:
14.1.1 if to Hoare Govett, to 000 Xxxxxxxxxxx, Xxxxxx XX0X 0XX (present fax no.
000 0000 0000) marked for the attention of Xxxxxxx Xxxxx/Company
Secretary;
14.1.2 if to Marconi, to 000 Xxxxxx Xxxx, Xxxxxx XX0 0XX (present fax no. 020
0000 0000) marked for the attention of the Company Secretary;
or as otherwise notified by the relevant party in accordance with the
provisions of this clause 14.
14.2 Any notice or document shall be deemed to have been served:
14.2.1 if delivered, at the time of delivery; or
14.2.2 if posted, at 10.00 a.m. on the second Business Day, or the fourth
Business Day if posted by air mail, after it was put in the post; or
14.2.3 if sent by facsimile process, upon receipt by the sender of the correct
answerback or transmission report.
14.3 In proving service of a notice or document it shall be sufficient to
prove that delivery was made or that the envelope containing the notice
or document was properly addressed and posted as a prepaid first class
recorded delivery letter, or full rate air mail if the address is
overseas or that the facsimile message was properly addressed and
despatched as the case may be.
15 EFFECTS OF THIS AGREEMENT
This Agreement shall be binding on each party's successors.
16 COUNTERPARTS
This Agreement may be entered into in any number of counterparts and by
the parties to it on separate counterparts, each of which when executed
and delivered shall be an original, but all the counterparts shall
together constitute one and the same instrument.
17 GOVERNING LAW AND JURISDICTION
17.1 This Agreement shall be governed by and construed in accordance with
English law.
17.2 The parties hereby submit for all purposes connected herewith to the
exclusive jurisdiction of the High Court of Justice in England in
relation to any matter arising out of this Agreement. All parties
expressly waive any objections on the grounds of venue.
15
IN WITNESS whereof this Agreement has been entered into the day and year
first above written.
16
SCHEDULE
WARRANTIES
PART I
1 THE PLACING SHARES
Save as disclosed in Part II of this Schedule, Marconi is the legal and
beneficial owner of 30,111,162 Ordinary Shares and 50,707,150 Convertible
Shares free and clear of any lien, charge, claim or other encumbrance or
any right of any third party whatsoever and will remain so entitled up
until completion of the sale and purchase of the Placing Shares pursuant to
the Placing and that, save as disclosed in Part II of the Schedule, it has
full power and authority to enter into this Agreement and to sell, transfer
and deliver the Placing Shares as contemplated herein free and clear of any
lien, charge, claim or other encumbrance or any right of any third party
whatsoever now or hereafter attaching thereto.
2 CORPORATE POWER AND AUTHORITY
Save as disclosed in Part II of this Schedule, Marconi has full power under
its constitutional documents and applicable law, and all authorisations,
approvals, consents and licenses required by it have been unconditionally
obtained and are in full force and effect, to permit it to enter into and
perform this Agreement; and this Agreement has been duly authorised,
executed and delivered by it and is a valid and binding agreement of it
enforceable in accordance with its terms.
3 REGULATORY COMPLIANCE
To the best of its knowledge and belief, Marconi has complied with and will
comply with all applicable provisions of FSMA with respect to anything done
by it in relation to the Placing Shares in, from or otherwise involving the
United Kingdom.
4 NO INSIDE INFORMATION
The sale of the Placing Shares to be sold by Marconi under this Agreement
will not constitute a breach by it of the Criminal Justice Xxx 0000 or
other applicable law or regulations prohibiting "insider dealing" in
securities.
5 UNITED STATES REPRESENTATIONS
5.1 Neither Marconi, nor any of its affiliates (as defined in Rule 501(b) under
the US Securities Act of 1933, as amended (the "SECURITIES ACT")), nor any
person acting on its or their behalf (excluding Hoare Govett, as to whom no
representation, warranty or undertaking is made) (a) has taken or will take
any action that would require the registration of the Placing Shares under
the Securities Act; or (b) has engaged or will engaged or will engage in
any form of general solicitation or general advertising (within the meaning
of Rule 502(c) under the Securities Act) in connection with any offer or
sale of the Placing Shares in the United States.
5.2 The Placing Shares are not of the same class (within the meaning of Rule
144A) as securities listed on a national securities exchange registered
under Section 6 of the US Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), or quoted in a US automated inter-dealer quotation system.
5.3 Neither Marconi nor any of its affiliates (as defined in Rule 405 under the
Securities Act), nor any person acting on its or their behalf (excluding
Hoare Govett, as to whom no representation is made) has taken or will take,
directly or indirectly, any action designed to cause or result in, or that
has constituted or which might reasonably be expected to cause or result
in, the stabilisation in violation of applicable laws or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Placing Shares.
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5.4 Neither Marconi, nor any of its affiliates (as defined in Rule 405 under
the Securities Act) nor any person acting on its or their behalf (excluding
Hoare Govett, as to whom no representation is made) have engaged or will
engage in any "directed selling efforts" (as defined in Regulation S) with
respect to the Placing Shares.
5.5 The Company is not, and following the offer and sale of the Placing Shares
pursuant to this Agreement will not be, an "investment company" under, and
as such term is defined in, the US Investment Company Act of 1940, as
amended.
5.6 The Company is a "FOREIGN ISSUER" (as such term is defined in Regulation S)
and Marconi reasonably believes that there is no "substantial US market
interest" (as such term is defined in Regulation S) in the Placing Shares
or in any securities of the same class as the Placing Shares.
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PART II
Pursuant to a composite debenture between Marconi and certain of its
subsidiaries and The Law Debenture Trust Corporation p.l.c. ("SECURITY TRUSTEE")
dated 19 May 2003 (the "UK DEBENTURE"), security was granted by Marconi over
certain of its assets, including, but not limited to, the Placing Shares.
The Security Trustee has agreed, pursuant to a deed poll dated 3 July 2003 in
favour of Marconi (the "DEED POLL"):
(a) to irrevocably and unconditionally release and discharge the Placing Shares
from all security and trusts constituted by the UK Debenture; and
(b) to re-assign to Marconi all right, title and interest in and to the Placing
Shares assigned to it under the UK Debenture,
to the intent that the Placing Shares shall henceforth be held freed and
discharged from such security and from all claims under the UK Debenture.
The release of security over the Placing Shares is expressed under the Deed Poll
to take effect upon the determination and agreement of the Placing Price and the
number of Placing Shares pursuant to clause 4.4. The Deed Poll and the share
certificates evidencing the Existing Ordinary Shares and the Convertible Shares
will be held in escrow until the Security Trustee confirms that it has received
a certificate from Marconi notifying the Security Trustee of the description and
number of Existing Ordinary Shares and Convertible Shares to be placed under the
Placing (the "CONFIRMATION CERTIFICATE"), at which time the Deed Poll and such
share certificates will be released to Marconi.
19
SIGNED by )
for and on behalf of )
HOARE GOVETT LIMITED ) /s/ Xxxxxxx Xxxxx
...........................
Duly authorised
SIGNED by )
for and on behalf of )
MARCONI CORPORATION PLC ) /s/ Xxxxxxx XxXxxxx
...........................
Duly authorised
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