Exhibit 2.2
STOCK PURCHASE AGREEMENT
between
Assurandorgruppen A/S
Xxxxxx Xxxxxxx Europe B.V.
As of 28 September 1998 this Stock Purchase Agreement has been entered into
between Assurandorgruppen A/S (Xxx.Xx. A/S 164.725), Xxxxxxxxxxxxx 0, XX-0000
Xxxxxxx, Xxxxxxx (the "Company") and Xxxxxx Xxxxxxx Europe B.V., Marten Xxxxxxx
00, XX 0000 Xxxxxxxxx, xxx Xxxxxxxxxxx (the "Investor") (the Company and the
Investor also individually referred to as a "Party" and collectively as the
"Parties").
RECITALS
WHEREAS at an extraordinary general meeting held on 18 June 1998 the current
shareholders of the Company (the "Current Shareholders") adopted a resolution to
authorize the board of directors of the Company (the "Board of Directors")
during the period until 31 December 1998 and without pre-emption rights for the
Current Shareholders to increase the share capital of the Company by an amount
not exceeding DKK 5,000,000 at market price.
WHEREAS the Board of Directors has decided to exercise this authority by
adopting at Closing (as defined below) a resolution in the form attached hereto
as Exhibit 1 (the "Board Resolution") for an increase of the Company's share
capital from nominal DKK 10,000,000 to nominal DKK 14,285,700 by issuing nominal
DKK 4,285,700 shares to the Investor.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements set forth herein, the Parties hereto agree as follows:
1. Purchase and Sale of Shares
1.1 Subject to the terms and conditions of this Agreement, the Investor agrees
to purchase at Closing and the Company agrees to sell and issue to the
Investor at Closing DKK 4,285,700 nominal value of the Company's shares
(the "Shares") for a purchase price of DKK 54,000,000 (the "Purchase
Price")
2. Closing
2.1 The purchase and sale of the Shares shall take place at the offices of
Kromann & Xxxxxx, 14 Radhuspladsen, DK-1550 Copenhagen V on 28 September
1998 or
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at such other time and place as the Company and the Investor mutually
agree upon orally or in writing (which time and place are designated as
the "Closing"). At the Closing the Company shall deliver to the Investor
an updated share register evidencing that the title of the Shares is
recorded in the name of the Investor against payment of the Purchase Price
by check or wire transfer.
2.2 At Closing the Parties undertake to adopt no later than 30 days from
Closing a resolution in the form attached hereto as Exhibit 2 (the
"Shareholders' Resolution") at an extraordinary general meeting of
shareholders (the "EGM") for election of directors and for the restated
Articles of Association of the Company in the form attached hereto as
Exhibit 3 (the "Restated Articles").
2.3 The Company shall file with the Danish Commerce and Companies Agency
immediately after the Closing the Board Resolution, and immediately after
the EGM the Shareholders' Resolution and the Restated Articles.
3. Shareholders' Agreement
3.1 At Closing the Investor and the Current Shareholders shall enter into a
Shareholders' Agreement in the form attached hereto as Exhibit 4.
4. Partnership Agreement
4.1 At Closing the Company, the Current Shareholders and the Investor shall
enter into a Partnership Agreement in the form attached hereto as Exhibit
5 regarding their interests in Assurandorgruppen I/S (the "Partnership").
Together the Company and the Partnership is referred to as the "AG Group".
4.2 The Company and the Partnership have not in all instances informed third
parties to contracts with Assurandorgruppen ost I/S, Assurandorgruppen
Midt I/S, Assurandorgruppen Syd I/S and Assurandorgruppen Alborg I/S about
the merger as of 1 January 1998. The Current Shareholders covenant to
indemnify and hold harmless the Investor from any damage or losses
resulting from such third parties' refusal to consent to the merger.
5. Transfer of Xxxxxx Xxxxxxx A/S
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5.1 At Closing the Partnership and Xxxxxx Xxxxxxx A/S shall enter into a
Business Transfer Agreement in the form attached hereto as Exhibit 6
regarding the Partnership's acquisition of the business of Xxxxxx Xxxxxxx
A/S.
6. Warranties
6.1 The Company and the Current Shareholders by their signature hereto hereby
represents and warrants to the Investor in the terms of the warranties
(set out in Schedule 1), and the Company undertakes to indemnify and hold
harmless the Investor for any damage, loss, liability or expense after tax
resulted from a breach hereof provided that
(i) subject to Section 6.2 no claim shall be made against the Company in
respect of a misrepresentation or breach of any of the warranties
unless the Investor's damage, loss, liability or expense after tax
exceed DKK 100,000 for each separate misrepresentation or breach of
warranty and unless the aggregate amount of such damage, loss,
liability or expense after tax exceeds DKK 1,000,000, that
(ii) subject to Section 6.2 no claim shall be made against the Company in
respect of a misrepresentation or breach of any one of the
warranties unless written notice of such claim containing specific
details and documentation regarding the claim has been received by
the Company from the Investor no later than 18 months from Closing,
that
(iii) the Investor's damage, loss, liability or expense shall be
determined in proportion to the Investor's ownership share in the
Company and with due regard to the Investor being held neutral
against the Company's indemnification, and that
(iv) the Current Shareholders by their signatures to this Agreement
undertake to act as guarantors for the Company's obligations
pursuant to this Clause 6.
6.2 The de minimis provision and the time limitation of claims in respect of a
breach of the warranties as set out in Section 6.1 (i) and (ii),
respectively, shall not apply
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in respect of claims arising out of the warranties in respect of tax as
set out in Section 6 of Schedule 1. Such claims can be made against the
Company six months from the time where the Company received the claim from
the tax authorities.
6.3 All warranties shall apply mutatis mutandis to the Partnership in which
the Company holds a capital stake of 91.2% the remainder being held by 44
individual partners identical to the Current Shareholders. All references
to the Company shall be construed as references also to the Partnership
and by its co-signature to this Agreement the Partnership and the Current
Shareholders confirm the warranties as applicable to the Partnership too.
6.4 The Company and the Current Shareholders acknowledge that the Investor has
entered into this Agreement in reliance upon the warranties.
6.5 Each of the warranties (other than such which are fully performed at
Closing) shall continue in full force and effect notwithstanding Closing,
subject to 6.1-6.2.
6.6 To the extent that any breach of or claim under the warranties is capable
of remedy, the Investor shall afford the Company such opportunity as is
reasonable to remedy or procure the remedy of the breach or the situation
complained of within a reasonable time (and in any event not exceeding 60
days from when the Company became aware of the breach unless the Investor
consents to a longer period, such consent not to be unreasonably
withheld).
7. Assignments
7.1 This Agreement and the benefit of each of the obligations and warranties
undertaken or given by the Company shall be assignable by the Investor to
any group company of the Investor provided the Investor remains fully
liable for the fulfilment of the Agreement. Save for such assignment to a
group company of the Investor, none of the rights or obligations under
this Agreement may be assigned or transferred to any other person or
entity without the prior written consent of both Parties hereto.
8. Notices
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8.1 All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally, sent by telefax (receipt of
which is confirmed by the recipient) or sent and received by registered
post to the respective Parties at the following addresses (or at such
other address for a Party as shall be specified by like notice):
If to the Investor, to:
Xxxxxx Xxxxxxx Europe B.V.
Marten Xxxxxxx 00
XX 0000 Xxxxxxxxx
Xxx Xxxxxxxxxxx
Telefax: + 31 20 661 0654
for the attention of Xxxxx Xxxxxxxxx
with copies to
Xxxxxx Xxxxxxx International Holdings Ltd.
Xxx Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Telefax: x00 000 000 0000
for the attention of Xxxxx Xxxxxxx and
Kromann & Xxxxxx
00 Xxxxxxxxxxxxxx
XX-0000 Xxxxxxxxxx X
Xxxxxxx
Telefax x00 00 00 00 00
for the attention of Xxxx Xxxxxx
If to the Company, to:
Assurandorgruppen A/S
Xxxxxxxxxxxxx 0, 0
XX-0000 Xxxxxxx
Telefax: x00 00 00 00 00
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for the attention of Xxxxx Xxxxx
with a copy to
Advokatfirmaet Xxx & Xxxxxx
Xxxxxxxxx 0
XX-0000 Xxxxxxx
Telefax: x00 00 00 00 00
for the attention of Xxxxx Xxxxxxxx.
9. Announcements
9.1 Neither the making of this Agreement nor its terms shall be disclosed by
any Party hereto without the prior consent of the other Party, unless
disclosure is required by law or the rules of the London Stock Exchange,
and disclosure shall then only be made
(a) after prior consultation with the other Party as to the terms of
such disclosure;
(b) strictly in accordance with any agreements as to the terms of
disclosure; and
(c) only to the person or persons and in the manner required by law or
the London Stock Exchange or as otherwise agreed between the Parties
hereto.
10. Effects of Closing
10.1 The terms of this Agreement shall insofar as not performed at Closing and
subject as specifically otherwise provided in this Agreement continue in
force after and notwithstanding Closing.
11. Entire Agreement
11.1 Subject to Section 12.3 this Agreement (together with any documents
referred to herein) constitutes the entire agreement between the Parties
hereto in
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connection with the subject-matter of this Agreement. No Party has relied
upon any representation save for any representation especially set out in
this Agreement (or any document referred to herein).
12. Waiver, Amendment
12.1 No waiver of any term, provision or condition of this Agreement shall be
effective unless such waiver is evidenced in writing and signed by the
waiving Party.
12.2 No omission or delay on the part of either Party hereto in exercising any
right, power or privilege hereunder shall operate as a waiver hereof, nor
shall any single or partial exercise of any such right, power or privilege
preclude any other or further exercise hereof, or of any other right,
power or privilege. The rights and remedies herein provided are cumulative
with and exclusive of any rights or remedies provided by the law.
12.3 No variation of this Agreement shall be effective unless made in writing
and signed by both parties hereto.
13. Invalidity
13.1 If at any time any one or more of the provisions hereof is or becomes
invalid, illegal or unenforceable in any respect under any law, the
validity, legality and enforceability of the remaining provisions hereof
shall not be in any way affected or impaired thereby.
14. Costs
14.1 Each Party to this Agreement shall pay its own costs incidental to this
Agreement, and the sale and purchase hereby agreed to be made. The Current
Shareholders shall reimburse the Company for any costs borne by the
Company in this connection.
15. Governing Law and Arbitration
15.1 This Agreement shall be governed and construed in accordance with the laws
of the Kingdom of Denmark.
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15.2 Any dispute between the Parties arising out of or in connection with this
Agreement shall, provided the parties can not agree on a settlement
through negotiation, be determined by arbitration with final, binding and
enforceable effect in agreement with the following rules:
15.3 In the event of a dispute, either party shall be entitled to request that
an arbitration tribunal be set up.
15.4 The party seeking resolution of a dispute by arbitration shall appoint an
arbitrator and send a letter by registered mail to the other party (the
"Respondent") requesting the Respondent to appoint its arbitrator within
14 days. The letter shall also contain a short statement of the question
or questions to be determined by the arbitration. Where the Respondent
does not appoint an arbitrator within the time-limit mentioned above, that
arbitrator shall instead be appointed by the Danish Arbitration Institute.
15.5 The two arbitrators appointed for the parties shall jointly appoint an
umpire. Failing agreement on the choice of an umpire, the appointed
arbitrators shall jointly approach the Danish Arbitration Institute and
request that it, following prior discussion with the parties, appoint an
umpire to act as chairman of the arbitration tribunal.
15.6 The arbitration tribunal shall determine the matter according to
applicable law and shall lay down the rules for its hearing of the matter
in agreement with the general principles of the Danish Administration of
Justice Act (Retsplejeloven).
15.7 The arbitration tribunal shall also decide how the costs of the
arbitration are to be borne. The arbitration tribunal shall set a date for
implementation of the award, which date shall normally be no later than 14
days after the award has been made.
15.8 The venue for the arbitration shall be Copenhagen, and the language of the
proceedings shall be English.
In witness whereof, the Parties hereto have caused this Agree-ment to be duly
signed on
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28/9 1998 28/9 1998
Assurandorgruppen A/S Xxxxxx Xxxxxxx Europe B.V.
By: By:
------------------------- -----------------------------
Acceded to Acceded to
28/9 1998 28/9 1998
Assurandorgruppen I/S by:
-----------------------------
By:
-------------------------
The Current Shareholders
represented by the Board of
Directors acting through Xx
Xxxxx Xxxxxxxx and Xx Xxxx
Risvad
List of Appendices:
Schedule 1: Warranties
Schedule 2: Disclosed Information
Exhibit 1: Board Resolution
Exhibit 2: Shareholders' Resolution
Exhibit 3: Restated Articles
Exhibit 4: Shareholders' Agreement
Exhibit 5: Deed of Partnership
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Exhibit 6: Business Transfer Agreement
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Schedule 1
(Warranties)
1. Interpretation
1.1 Where any of the following paragraphs of this Schedule is qualified by the
expression "to the best of the knowledge, information and belief of the
Company" or "so far as the Company is aware" or any similar expression,
that paragraph shall be deemed to include an additional warranty to the
effect that the statement has been made after due diligent and careful
enquiry and that the Company has used its best endeavours to ensure that
all information given is true and accurate in all respects.
2. Disclosed Information
2.1 The statement of fact and information relating to the Company and/or its
shareholders and/or officers and/or connected persons and associates (or
any of them) and/or the business, finances, assets, liabilities,
contracts, prospects, suppliers and customers of the Company given by or
on behalf of the Company to the Investor or its advisers in the course of
the negotiations leading to this Agreement listed in Schedule 2 to the
Stock Purchase Agreement (the "Disclosed Information") are true complete
and accurate in all respects and not misleading in any respect.
2.2. To the best of the knowledge information and belief of the Company there
is no fact information or other matter which is not fairly and expressly
disclosed which renders or which might render any of the Disclosed
Information untrue, incomplete inaccurate or misleading in any material
respect or which might reasonably be expected adversely to affect the
willingness of a purchaser to purchase shares of the Company on the terms
contemplated by this Agreement.
3. The Company
3.1 The Company is a private company limited by shares duly organized, validly
existing and in good standing under the laws of the Kingdom of Denmark and
has all requisite powers to enter into and perform this Agreement and the
obligations to be assumed or performed by it pursuant thereto and the
execution and delivery and completion of this Agreement:-
a) does not and will not cause the Company to be in breach of any of
the terms and provisions of any agreement or arrangement or order or
injunction of any Court or competent tribunal;
b) does not and will not relieve any person of or entitle any person to
terminate any contractual or other obligation to the Company; and
c) will not so far as the Company is aware result in any customer,
supplier or other business partner of the Company ceasing to deal or
substantially reducing the existing level of its dealings with the
Company or terminate or result in the termination of any present or
future benefit or privilege enjoyed by the Company.
3.2 The Shares when issued, sold and delivered in accordance with the terms of
this Agreement for the consideration expressed herein will be duly and
validly issued, fully paid and non-assessable and will be free from
restrictions of transfer other than restrictions in the Restated Articles
and the Shareholders' Agreement and free from all claims liens
encumbrances and equities.
3.3 There are not outstanding any options, warrants, rights or agreements for
the purchase or acquisition from the Company of any of its shares.
3.4 The share register of the Company is correct and properly written up to
date and there has been no notice of any proceedings to correct or rectify
any such register.
3.5 Since the Accounting Date (as defined below) neither the Company nor any
class of its members has passed any resolution, except from resolutions
passed at the ordinary general meeting of Shareholders held on 27 May 1998
and at the extraordinary general meeting of shareholders held on 18 June
1998.
4. Accounts
4.1 The Annual Accounts as of 31 December 1997 (the "Accounts") comply with
the provisions of Danish company and accounting laws and all other
applicable legislative requirements and have been prepared in accordance
with generally accepted accountancy practice and principles consistently
applied and give an accurate and true and fair view of all the assets and
liabilities (whether actual or contingent or otherwise) and of the state
of affairs of the Company at the Accounting Date and of its results for
the accounting period ended thereon. An exemption is made, however, as
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regards the dividend paid to the Current Shareholders in 1998 which is in
contravention of Danish law. Any damage, loss, liability or expense in
this connection will be the responsibility of the Company and the Current
Shareholders, cf. Section 6 of the Stock Purchase Agreement.
4.2 The value of the assets, included in the Accounts and, in respect of the
position at the date hereof, the books and records of the Company is not
materially overstated nor are the liabilities provided for therein
understated and (in accordance with the said accountancy practice and
principles) full provision or reserve has been made in the Accounts or
such books and records for depreciation and all bad or doubtful debtors
and liabilities (including contingent liabilities) and all present or
contingent burdens and commitments as at the Accounting Date or at the
date hereof, save from commitments relating to returned premiums.
4.3 The Accounts have been prepared on bases and policies consistent with
those used in preparing the audited accounts of the Company for the last
three financial periods of the Company ended on the Accounting Date.
4.4 All proper and necessary books of account and records (including records
held in computer form) have been fully and accurately kept and promptly
completed by the Company, and the same contain full and correct
information relating to all transactions to which the Company has been a
party in accordance with the law and generally accepted accounting
practice and principles and all such books and records (including print
outs of such records held in computer form) are in the exclusive
possession of and are readily accessible to the Company.
5. Position since 31 December 1997 (the "Accounting Date")
5.1 Since the Accounting Date (i) there has been no material adverse change in
the financial or trading position or prospects of the Company; (ii) the
business of the Company has been carried on in the normal course; (iii)
the Company has not declared or paid any dividends or effected any
distribution (for tax purposes or otherwise) of or in respect of its
assets or share capital except as disclosed in the Accounts; (iv) the
Company has not acquired or disposed of any business or material assets
other than in the ordinary course of business; and (v) the Company has not
made or agreed to make any loan or payment or entered into any transaction
or assumed or incurred any liabilities (including contingent liabilities)
except in the ordinary course of trading and for full value and in the
case of capital commitments all commitments made have been described in
the Disclosed Information.
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5.2 No order has been made or position presented or resolution passed for the
winding-up or other dissolution of the Company and no receiver or manager
or administrator or similar officer under the laws of any jurisdiction has
been appointed over any of its assets and there are no grounds on which
any such appointment may be made.
6. Taxation
6.1 The Company has within the requisite time duly made all returns, given all
notices, and supplied all other information required to be supplied to the
Danish authorities with responsibility for taxation, and customs and
excise and/or any other competent fiscal authority and all such
information returns and notices were when given or supplied and are now
accurate in all material respects and made on a proper basis and are not,
so far as the Company is aware, likely to be the subject of any dispute
with any of the relevant authorities concerned.
6.2 The Company has duly deducted, withheld, paid and accounted for all tax
due to have been deducted, withheld, paid or accounted for by it before
the date of this Agreement and is not and has not at any time since the
Accounting Date been liable to pay interest on any unpaid taxation.
6.3 Since the Accounting Date the Company has not made and the Company is not
subject to any present or future liability to make or provide any payments
or consideration which could be disallowed as a deduction in computing the
profits of the Company or as a charge on the Company's income for taxation
purposes other than as described in the Disclosed Information.
6.4 The book value of each of the capital or fixed assets of the Company shown
in the Accounts does not exceed their original cost and is such that on a
disposal or deemed disposal of such assets or any of the same at that
value no balancing charge or chargeable gain will arise accrue or
crystallise.
6.5 The Company is not under any liability to taxation, contingent or
otherwise, in respect of any other company which at any time has been a
member of the same group or consortium as the Company or an associated
company of the Company for taxation purposes or in respect of any
transaction effected with or asset or benefit received from or given by
the Company to any such other company.
6.6 The Company has not entered into or been a party to any scheme or
arrangement
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designed partly or wholly for the purposes of avoiding or deferring
taxation, and no scheme or transaction of any nature has been carried out
by or proposed in relation to the Company which has given rise or could
give rise to a charge to taxation.
6.7 All of the documents relating to or necessary to prove the title of the
Company to its assets or otherwise relating to the Company's business and
affairs have been properly stamped with applicable stamp or other duty and
such duty has been duly paid.
7. Assets
7.1 The Company was at the Accounting Date and (subject only to sales of
current assets in the ordinary course of its day to day business) now is
the owner of and has good and marketable title to all of the assets
included in the Accounts and all assets now owned or used by it or in its
possession except for leased assets.
8. Mortgages and Charges
8.1 The Company has not created nor has it agreed to create and nor is there
subsisting any mortgage debenture lien charge or other similar encumbrance
or security interest over all or any of its property whether present or
future, save for the Company's treasury shares which are mortgaged in
favour of Unibank A/S.
9. Guarantees
9.1 Except in the ordinary course of business and as disclosed to the Investor
the Company is not and has not agreed to become bound by any guarantee,
bond, warranty or indemnity or suretyship or similar commitment and there
is not now outstanding any such guarantee bond warranty indemnity
suretyship or similar commitment given for the accommodation of or in
respect of any obligation or liability of the Company.
10. Borrowing Arrangements
10.1 The Disclosed Information contains full particulars in relation to all
borrowings of the Company and all arrangements in the nature of borrowing
or loan facilities.
10.2 The Company is not in breach of the terms of any of its borrowing
obligations and in particular of any document governing the terms of or
securing such borrowings and no event has occurred which will or might
give any person the right to call for the immediate or early repayment of
any of its borrowings or to terminate any loan facilities placed at its
disposal or which is likely to cause a demand for the immediate
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repayment of any of its borrowings which are repayable on demand.
10.3 There is no indebtedness of the Company exceeding DKK 100,000 in aggregate
which is overdue for payment or discharge by more than three months and
the Company has sufficient working capital for the purposes of carrying on
its business in its present form for the period of twelve months after
Closing.
10.4 The Company's credit facility agreement with its bank can continue
unvaried regardless of the transaction.
11. Material Commitments and Agreements
11.1 The Company is not party to nor liable in respect of and none of the
assets of or used by the Company is affected by:-
a) any contract, covenant, commitment or arrangement (i) of an unusual
nature or (ii) made otherwise than in the ordinary and usual course
of the business of the Company as now carried on;
b) any partnership, joint venture or consortium, other than the
partnership agreement of 18 June 1998 regarding the Partnership;
c) any contract, covenant, commitment or arrangement which in any
material way restricts the freedom of the Company to carry on its
business or any part thereof in any part of the world in such a
manner as it thinks fit; save for (i) the Company's agreement with
the Nordania Leasing Group according to which the Company is
prevented from having any other leasing companies as customers
without the prior approval of the Nordania Leasing Group, (ii) the
Company's agreement with Advokaternes Serviceselskab I/S in
principle preventing the Company from acting as broker in respect of
Non-life business for the members of Advokaternes Serviceselskab I/S
and (iii) the Company's agreement with Boligselskabernes
Landsforening preventing the Company from having other housing
associations East of the Great Belt as customers or
d) any contract, covenant, commitment or arrangement which is or is
liable to be terminated or altered by another party as a result of
any change in the management or shareholders of the Company.
e) No person is authorised to act as agent or attorney for the Company
or to bind the Company otherwise than its Directors acting as a
Board and Xx Xxxx Risvad,
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Mr Lars Gundorph and Xx Xxxxx Xxxxx acting as Managers and others
using the authority vested in them as employees.
12. Properties
12.1 Copies of all material documents relating to the premises used by the
Company (the "Properties") have been supplied to the Investor prior to the
date hereof.
12.2 The Company is entitled, without restriction and without breaching the
terms of any lease or other rights of occupation or the provisions of any
legislation to use the Properties for the purpose for which it presently
uses the same or any part thereof.
12.3 The Company has fully complied with all its obligations in respect of such
occupation and no notice has been served to terminate the right of the
Company to continue the same and, there are no circumstances which could
result in such right of occupation being determined otherwise than by the
Company except as provided in the Landlord and Tenant Act (lejeloven).
13. Business of the Company
13.1 The Company does not carry on any business other than the business
described in the Disclosed Information and the Company's business has
always been carried out in compliance with all applicable legislation.
13.2 Other than what appears in the Disclosed Information as far as the Company
is aware the Company has not received any process notice or communication
(formal or informal) from any governmental, legislative, regulatory or
consumer authority or other authority of any jurisdiction or competence.
13.3 The Company will incur expenses no greater than DKK 750,000 per year (1998
- figure as increased annually in accordance with the increase in the
Danish Net Consumer Price Index) in relation to administration costs
including without limitation directors' fees, D&O insurance, legal and
audit fees.
14. Litigation
14.1 The Company is not engaged in any litigation arbitration prosecution or
other legal proceedings (whether as plaintiff defendant or third party)
and there are no such proceedings pending or threatened or any proceedings
in respect of which the Company is or might be liable to indemnify or
compensate any other person
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concerned therein and to the best of the knowledge information and belief
of the Company there are no claims facts event or other circumstances
which are likely to give rise to any such proceedings which are not
covered by the Company's e&o policy, save from claims put forward by Xx
Xxxx Xxxxxxxx in connection with his retirement from the Partnership, cf.
14.2.
14.2 The claims put forward by Xx Xxxx Xxxxxxxx in connection with his
retirement from the Partnership are unsubstantiated and unfounded.
Moreover, the Company's refusal to consent to Xx Xxxxxxxx'x contemplated
business activities as insurance auditor and/or independent insurance
broker is substantiated in the Deed of Partnership.
15. Insurance
15.1 To the best of the Company's knowledge the Company is and at all material
times has been adequately covered by valid insurances against all normal
risks including, without limitation, professional and all other
liabilities having regard to the type of business carried on and assets
owned or used by it.
15.2 The policies of insurance to which the Company is a party are valid and
enforceable; all premiums due have been paid; there are no outstanding
claims or circumstances likely to give rise to a claim thereunder other
than what is referred to in the Disclosed Information; and nothing has
been done or omitted to be done which has made or could make any such
policy void or voidable or whereby the renewal of any such policy might be
affected or the premiums due in respect thereof are likely to be
increased.
15.3 Claims or incidents reported under the policies of insurance to which the
Company is a party do not give the Company reason to reserve potential
losses in its financial statements.
16. Employees etc.
16.1 The Disclosed Information details the names and material particulars of
all officers, employees, consultants and agents of the Company and their
respective ages, length of service with or engagement by the Company and
their special terms of employment or engagement including (without
limitation) special payments and emoluments, bonuses, profit sharing
arrangements and benefits in kind, commissions, fees, remuneration and
other benefits.
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16.2 Bonuses paid to personnel in Copenhagen which they may have earned a legal
right to receive in future years amounts to a maximum of DKK 300,000 in
1997.
16.3 No Key Personnel has given or received notice terminating his employment
or engagement or is entitled (without giving proper notice) to terminate
his employment or engagement with the Company.
17. Associates and Connected Persons
17.1 No shareholders of the Company nor any connected person or associate of
any of them has any interest, direct or indirect, in any agreement or
arrangement to which the Company is a party or in any business which has a
close trading relationship with that of the Company or which is or is
likely to become competitive with the business of the Company other than
what follows from the Partnership Agreement as of 18 June 1998 and save
for partners' interest regarding the lease in Aalborg.
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Assurandorgruppen I/S
DEED OF PARTNERSHIP
TABLE OF CONTENTS
Name, registered address, object page 2
Partners page 2
Financial matters page 3
The management of the partnership page 5
Various provisions page 8
Termination page 9
Breach page 10
Retirement for other reasons page 10
Financial matters in case of retirement page 11
Non-competition page 13
Arbitration page 14
List of appendices page 16
Signatures page 15
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2
ASSURANDORGRUPPEN I/S
The following deed of partnership shall apply to the cooperation of the partners
in Assurandorgruppen I/S and shall replace the deeds of partnership applying so
far.
1.0 NAME, REGISTERED ADDRESS AND OBJECT
1.1 Name: Assurandorgruppen I/S (hereinafter called I/S).
1.2 The registered address of I/S is in the district of Arhus.
For the time being I/S has branch offices at the following addresses:
Xxxxxxxxxx 0, XX-0000 Xxxxxxxxxx K
Xxxxxxxxxxxxxxxxxxx 00, XX-0000 Xxxxx N
Xxxxxxxxx 00, XX-0000 Xxxxxx C
Hasserisvej 000, XX-0000 Xxxxxxx
Xxxxxxxxxxxxx 6, DK-8900 Randers
1.3 The object of I/S is to carry on insurance broking and related business.
2.0 PARTNERS
2.1 The partners in I/S are:
2.1.1 Assurandorgruppen A/S, reg. no. 164725 (hereinafter called A/S) with a 90
percentage share of I/S.
2.1.2 The remaining 10 percent is distributed on 50 shares of 0.2 percent as it
is a condition that - apart from A/S - each partner shall and may only own
a share of 0.2 percent.
2.1.3 For the time being A/S moreover possesses 6 shares of 0.2 percent which
are presumed to be sold to new partners.
2.1.4 For the time being the remaining 44 I/S shares, a total of 8.8 percent,
are distributed on the partners mentioned in appendix 1.
2.1.5 In addition Xxxxxx Xxxxxxx Europe B.V. ("WCE") has a right to a share of
the profits of I/S as long as WCE remains a shareholder of A/S as further
described in appendix 5.
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2.2 For the time being the shares of A/S are distributed as stated in the
survey, appendix 2.
2.3 New partners may be taken in by resolution passed by the executive
committee of I/S with a 5/6 majority after prior information to
life/non-life partners respectively, depending on the field of activity of
the new partner.
Only insurance brokers and executives who place their entire working
capacity at the disposal of I/S and who - upon demand by the executive
committee acquire a block of shares in A/S, the size of which to be
decided by the executive committee, can be taken in as partners. Efforts
are being made to ensure that the acquisition of shares can take place in
connection with the entry as a partner but by a simple majority of votes
the executive committee may decide that the acquisition of shares shall be
postponed. The purchase price for shares shall be decided in accordance
with the share price fixed at the closing of the financial statements, cf.
clause 9 below.
A partner shall be entitled to acquire and hold the block of shares
mentioned in a public or private limited company wholly owned by him.
3.0 FINANCIAL MATTERS
3.1 The balance sheet of I/S as at January 1 1998 is enclosed as appendix 3.
The partners invest their respective shares in the existing regional
partnerships and acquire/surrender shares so that subsequently the
individual partners own an 0.2 percent share in I/S, cf. appendix 4.
3.2 The partners are pro rata owners of the assets and liabilities of I/S
according to their I/S shares.
3.3 The partners shall be liable personally, directly and jointly and
severally to third parties for the obligations of I/S; but among
themselves the partners shall be liable pro rata in proportion to their
I/S share.
3.4 A brokers' third party liability insurance policy shall be effected and
maintained for the account of I/S.
In the case of technical errors involving liability for damages where, for
reasons ascribable to the partner, the insurance company does not cover
the loss, the partner shall be liable for the loss suffered by I/S. As
regards technical errors covered by the third party liability insurance
the partner shall be liable for the first DKK 25,000 of the excess,
whereas the
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remaining excess shall be the liability of I/S. Where particular
justifying elements speak for it, or where I/S chooses to make an ex
gratia payment, the executive committee can reduce the liability of the
partner or remove it entirely.
3.5 As regards the distribution of profit or loss according to the result for
the year, including the calculation and advance payment of profit and
profit for the year on account to the partners, reference is made to the
enclosed appendix 5, which is an integral part of this deed of
partnership.
3.6 The partners shall jointly obtain the necessary operating credits from A/S
and they are under an obligation to provide security by way of assignment
of existing and future outstanding accounts.
3.7 The financial year of I/S is the calendar year.
3.8 The accounts of I/S shall be prepared in accordance with proper and
prudent accounting policy.
3.9 The accounts of I/S shall be audited by the state-authorized public
accountant appointed as auditor of A/S. The auditor is entitled to
participate in the meetings of I/S.
3.10 As regards guidelines and procedure for the financial statements and
budgets of I/S, reference is made to the enclosed appendix 6 which is an
integral part of this deed of partnership.
4.0 THE MANAGEMENT OF THE PARTNERSHIP
4.1 The meeting of partners
4.1.1 The meeting of partners is the highest authority of I/S.
4.1.2 Ordinary meetings of partners shall be held in April/May and
November/December.
At the April/May meeting the presentation and adoption of the
financial statements for the preceding financial year shall be on
the agenda. At the November/December meeting presentation and
adoption of the budget for the next financial year shall be on the
agenda.
Proposals from the partners or from WCE to be dealt with at the
April/May meeting must be submitted to the executive committee not
later than on April 1 and proposals to be dealt with at the
November/December meeting not later than on November 1. Provided
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always that the executive committee is entitled to accept proposals
received after these closing dates to the extent it deems possible.
4.1.3 Extraordinary meetings of partners shall be held, when convened by the
executive committee or WCE or the management or at the written request of
at least 5 partners, stating the agenda.
4.1.4 The executive committee shall convene meetings of partners at 14 days'
notice at least by letter or e-mail to each partner and WCE. The agenda
shall accompany the notice convening the meeting.
4.1.5 The executive committee shall decide where the meeting is to be held.
4.1.6 The meeting of partners shall be quorate, when A/S is represented and at
least half of the other partners are present or represented. At the
meetings of partners A/S shall be represented by a member of the
management and/or of the board of directors. A representative of WCE is
entitled to attend the meeting of partners with a right of speech.
Partners who do not attend a meeting of partners can issue an instrument
of proxy authorizing the holder to vote at the meeting of partners on
behalf of the partner issuing the proxy. No person can appear with more
than one proxy. The proxy must be in writing, dated and without
reservations of any kind and it shall not be given for a period exceeding
one year.
4.1.7 Where a meeting of partners held in accordance with the above provisions
is found not to be quorate, another meeting of partners with the same
agenda may be convened by the executive committee at 14 days' notice at
least. This meeting will be quorate, when A/S is represented irrespective
of the number of partners attending.
4.1.8 Meetings of partners shall be presided over by a chairman elected by the
executive committee.
The management shall cause minutes of the meeting to be prepared and sent
to each of the partners.
4.1.9 At the meetings of partners, unless this deed of partnership prescribes
otherwise, resolutions shall be made by a simple majority of votes in
proportion to shares owned.
4.2 The executive committee
4.2.1 The board of directors of A/S elected at the time in question shall also
be the executive
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committee of I/S and shall be in charge of the overall management of the
activities of I/S.
4.2.2 The chairman shall convene and preside over the meetings of the executive
committee. Meetings shall be convened when decided by the chairman or when
requested by 2 members of the executive committee. Meetings shall be
convened at 8 days' notice but the chairman may convene meetings at
shorter notice, if he deems it necessary.
4.2.3 The executive committee is quorate when at least half the members are
present. Resolutions are passed by a simple majority of votes unless this
deed of partnership or the Shareholders' Agreement regarding A/S provides
otherwise. Each member of the executive committee has one vote. In case of
equality of votes the chairman shall have the casting vote.
4.2.4 The executive committee shall cause minutes of the meetings of the
committee to be prepared.
4.3 Management
4.3.1 The executive committee shall engage a management to be in charge of the
day-to-day business. Members of the management cannot be members of the
executive committee. The current organization will appear from appendix 7.
Details of the duties and spheres of authority and other terms shall be
laid down in service agreements.
4.3.2 The management shall decide on the engagement and dismissal of employees.
4.4 Power to bind I/S
4.4.1 I/S shall be bound by the chairman of the executive committee signing
jointly with 1 manager or by the joint signatures of 3 members of the
executive committee or by the joint signatures of the entire executive
committee.
5.0 VARIOUS PROVISIONS
5.1 Each partner is under an obligation to use his entire capacity for work to
promote the cooperative enterprise, cf. clause 10 below.
5.2 Each partner is under an obligation continuously to maintain and update
his professional knowledge.
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5.3 With the exceptance of guarantee obligations for children or spouses of
amounts which are not of decisive importance for their financial position,
the partners commit themselves not to undertake any guarantee obligations
or the like for third parties.
5.4 Each partner is under an obligation not to third parties to divulge
internal or business matters which come to his knowledge through his
participation in the activities of I/S and this obligation shall remain in
force also after the partner has retired from I/S.
5.5 Each partner is entitled to holiday in accordance with the rules of the
Holidays Act in force at the time in question.
5.6 In case of temporary loss of working capacity as a consequence of illness
or accident, partners with less than 3 years' seniority shall receive
advance payment of profit for the first 3 months in accordance with the
provisions laid down in appendix 5, provided always that such advance
payments of profit will be reduced by the amounts of benefit, if any, paid
to them by the public authorities by reason of the loss of working
capacity. In case of loss of working capacity for a period exceeding 3
consecutive months, the right to advance payment of profit will be lost
whereas the share of profit/loss remains unchanged.
In case of temporary loss of working capacity, partners with more than 3
years' seniority are entitled to advance payment of profit in accordance
with appendix 5 for a period of 6 months, provided always that there will
be a similar reduction as regards any benefits paid by the public
authorities, cf. the above. Provided always that the advance payment of
profit is reduced by 50 percent in case of loss of working capacity
lasting more than 6 months and until 24 months.
As regards loss of working capacity for a period exceeding 24 months
reference is made to clause 8.4 below.
Similar rules shall apply to administrative partners, provided always that
advance payment of profit is replaced by the agreed consideration.
5.7 When a partner is absent on holiday or by reason of loss of working
capacity, the other partners are under an obligation to attend to the
client portfolio of the absent partner according to lines agreed on and
adapted to the specific situation .
5.8 Spouses, cohabitees and children of partners shall only be engaged by I/S
subject to resolution passed by the executive committee by a 5/6 majority
of votes.
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5.9 The deed of partnership is a personal agreement between the partners for
which reason the share shall only be transferred subject to the provisions
concerning retirement, etc. stated below. By transfer in this connection
is understood the sale, charging, succession, other administration of
property and enforcement proceedings. The charging of shares as security
for bank credits of I/S or A/S and bank loans for the purchase of I/S
shares is permitted, however, provided that the lender respects this deed
of partnership.
6. TERMINATION
6.1 Each partner is entitled to terminate his participation in I/S subject to
3 months' notice to the last day of a month (the date of retirement).
6.2 Subject to 3 months' notice and by a 5/6 majority of votes the executive
committee can decide that a partner shall retire from I/S, provided always
that the partner shall be entitled to an interview with the executive
committee before the decision is made by the latter. Where a partner has a
seniority exceeding 3 years, the notice given shall be 6 months, however.
7.0 BREACH
7.1 Where a partner significantly violates his obligations under this deed of
partnership, the executive committee can demand the immediate retirement
of the partner in question. Provided always that such demand shall be made
within 1 month of the executive committee having received notice of the
violation.
8.0 RETIREMENT FOR OTHER REASONS
8.1 Where a partner dies or is declared legally incompetent, he shall retire
from I/S. The date of retirement shall be the death-day or the date of the
declaration of legal incompetence.
At the death of a partner 3 months' advance profit, in accordance with the
provisions laid down in appendix 5, and in the case of administrative
partners 3 months' consideration, shall be paid to a surviving
spouse/cohabitee or children below 21 years of age.
8.2 A partner shall retire from I/S not later than on December 31 in the year
in which he reaches the age of 67.
8.3 A partner against whom bankruptcy proceedings are instituted, or who makes
a compulsory composition with his creditors, or who obtains debt relief,
or against whom other general enforcement proceedings are instituted shall
retire from I/S. The date of
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retirement shall be the date of the making of the bankruptcy order or the
date of the making of the decision to institute enforcement proceedings.
8.4 A partner whose incapacity for work on account of illness or accident has
lasted for more than 24 months, and who has no prospects of lasting
restoration to health, shall retire from I/S with the 1st day of the month
following the 24-month period as date of retirement.
8.5 When a partner sells all of his shares in A/S he shall automatically
retire from the I/S.
9.0 FINANCIAL MATTERS IN CASE OF RETIREMENT
9.1 At the retirement of a partner - irrespective of the reason for the
retirement - his share of I/S shall be made up and paid to him according
to the following guidelines. The partner's share of I/S shall be
transferred to A/S unless a new partner is admitted at the same time in
which case the share of I/S may be transferred to the new partner.
9.1.1 Prior to the meeting of partners in April/May the executive committee
shall fix a price for the current financial year of a share of 0.2
percent. At the fixing of the price the assets of I/S, including the
goodwill value and its liabilities shall be fixed at market value and in
consideration of generally applicable accounting principles of
depreciation and provisions.
At the meeting of partners the executive committee shall give an account
of the conditions forming the basis of the price fixing.
In case a partner cannot accept the price fixed by the executive
committee, an objection in writing and stating his reasons shall be
submitted to the chairman of the executive committee not later than 2
weeks after the meeting of partners. The partnership's auditor shall then
decide the price fixing issue and shall fix the price in an account to the
executive committee stating his reasons. Within 1 week of having received
the price fixed by the auditor, the executive committee shall inform the
partners in writing about the price fixed by the auditor. In case a
partner will not accept the price fixed by the auditor, he shall, within 2
weeks of having received information about the price fixed by the auditor,
refer the matter to arbitration, cf. clause 11 below. Reference to
arbitration shall be by complaint in writing forwarded to the executive
committee and stating the reasons. The price fixed by the arbitration
tribunal shall be final and binding on the partners and shall apply in
case of retirement which takes place during the financial year, unless
subsequent changes of applicable law or of the conditions of the trade or
the like, which occur in the financial year, significantly change the
conditions forming the basis of the fixing of the price. Where such
changes occur, a partner shall be entitled to the executive committee to
submit a written request for a change of the price fixed. The executive
committee is
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under an obligation within 2 weeks of having received such request to ask
the partnership's auditor for a statement, and if the latter finds that
the condition has been met, he shall change the price fixed. Both the
fixing of a new price by the auditor and his refusal of making the change
can be referred to arbitration.
Where a request made by a partner for a change of the price fixed does not
lead to changes of more than +/- 15 percent, the partner requesting the
change shall pay all expenses in connection with it, including expenses
for auditor and possible arbitration.
9.1.2 At the retirement of a partner A/S is entitled and under an obligation to
the cash payment, as at the date of retirement at the latest, of the price
fixed for the share of the retiring partner according to prior decision.
Where the price fixed is not available until after the date of retirement,
the price shall be paid 1 week at the latest, after the final price has
been fixed.
9.1.3 In addition the retiring partner's capital account shall be paid out in
cash as at the date of retirement together with a payment on account,
according to the estimate of the executive committee, of the expected
share of profits for the current financial year. This amount shall be made
up when the financial statements have been finally adopted by the meeting
of partners.
9.1.4 The executive committee shall be entitled to withhold payments to retiring
partners in connection with possible claims for the repayment of too large
account payments of profit and of any claim which I/S might have against
the retiring partner, including claims for damages for breach.
9.1.5 Where the retirement is due to material breach, a 25 percent reduction
shall be made when the price of the share is fixed.
9.1.6 Where the purchase price or capital account has not been paid, interest
shall be payable on the amounts at the rate corresponding to the official
discount rate + 5 percent as from the due date and until payment is
effected. Interest shall similarly be paid on claims for the repayment of
too large amounts paid out.
9.2 In case a partner gives notice of retirement, I/S is entitled to "lay off"
the retiring partner for immediate retirement. I/S shall pay the usual
share of profits for the period until the time of retirement according to
the notice given.
10.0 NON-COMPETITION
10.1.1 No partner may without the permission of the executive committee be the
owner of or take part
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in any other business, whether in the same or another trade.
10.1.2 Investment of capital without any personal performance of any kind is
permitted, provided always that such investment is not made in any firm
or company, except such as are listed on the stock exchange, which
directly or indirectly compete with I/S or are customers of I/S.
10.2 At the retirement of a partner, including at the dissolution of I/S
irrespective of the reason for it, the following non-competition clause
shall apply:
10.2.1 The partner shall not be entitled:
a) for a period of 2 years from the time of the retirement directly
or indirectly to carry on business in competition with the
business carried on by I/S at the time of the retirement - whether
on his own or in corporate form,
b) for a period of 2 years from the time of the retirement to take up
employment in any business which directly or indirectly carries on
business, which competes with the business carried on by I/S at
the time of the retirement.
The provisions mentioned in a) and b) shall not prevent the partner from
taking up employment in an insurance company, provided always that the
partner shall not be entitled for a period of 2 years after the time of
the retirement directly or indirectly to contribute to the acquisition of
business from parties who were customers of I/S at the time of the
retirement.
The executive committee may grant exemption from the above.
10.2.2 The non-competition clause shall apply to competing activities everywhere
in Denmark.
10.2.3 Violation of the non-competition clause may be stopped by a restraining
injunction without security being given.
10.2.4 For each case of violation of the non-competition clause the partner in
question shall pay a penalty corresponding to the purchase price received
by him for his share at his retirement, provided always that the mimimum
amount of such penalty shall be DKK 300,000 and in addition the partner
shall pay damages according to the general rules of Danish law. The
amount mentioned shall be adjusted in accordance with the Net
Consumer-Price Index with effect as from July 1 1998.
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11.0 ARBITRATION
11.1 Disputes between the partners concerning the interpretation or violation
of the provisions of this deed of partnership shall be settled by
arbitration if one of the parties so requests. The arbitration tribunal
consists of two persons appointed by the parties and an umpire appointed
by the President of the Maritime and Commercial Court in Copenhagen. In
case of equality of votes the umpire shall have the casting vote. The
arbitration tribunal shall decide its own procedure. Where questions
arise as to whether either of the arbitrators appointed are incompetent
or unqualified for the task, the question shall be decided with binding
effect by the President of the Maritime and Commercial Court and in case
it is decided that the person in question is incompetent or unqualified,
the President of the Maritime and Commercial Court will appoint another
arbitrator instead. In connection with its award, which is final and
conclusive and which cannot be brought before the courts of law, the
arbitration tribunal may make a decision as regards the costs of the case
and which of the parties is to pay the costs of the arbitration.
11.2 A dispute is referred to arbitration by the complainant writing to the
executive committee stating the content of the complaint and the
allegations he intends to raise before the arbitration tribunal. The
complaint shall contain information as to who the complainant appoints
arbitrator.
11.3 Otherwise the provisions of Act no. 181 of May 24 1972 on arbitration
shall apply.
Xxxxxxxxxx, 00/0 0000
Xxxxxxxxxxxxxxxxx A/S The Individual Partners
By: By:
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Xx Xxxxx Xxxxxxxx and
Xx Xxxx Risvad according
to authority vested in
the Board of Directors
of Assurandorgruppen A/S
Xxxxxx Xxxxxxx Europe B.V.:
By:
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LIST OF APPENDICES
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1. List of partners as at January 1 1998, 0.2 percent shares.
2. List of shareholders of Assurandorgruppen A/S as at today.
3. Balance sheet as at January 1 1998.
4. Survey of partners' contribution/sale/acquisition of shares as at
January 1 1998.
5. Distribution of profit/loss.
6. Accounting principles, etc.
7. Organizational chart.
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APPENDIX 5 to the deed of partnership of Assurandorgruppen I/S
I. PROFIT / LOSS DISTRIBUTION
1. THE LIFE AND PENSIONS DIVISION
1.1. The profit made up according to appendix 6, shall be distributed with 30%
to the partners according to ownership shares and with 70% (the "Advance
Profit") among the partners who are insurance brokers, the administrative
partners being paid via the operating costs, provided always, however,
that the aggregate salaries of I/S (including both Life and Non-Life
partners' salaries and normal salaries as defined in schedule A) shall
not exceed 62% (in 1998), 61% (in 1999) and 60% (in 2000-2005),
respectively, of the total income of I/S (excluding investment income).
If the aggregate salaries of I/S exceed those thresholds a reduction of
30% of the excess amount shall be made in the Advance Profit and
distributed to WCE. The reference to 30% above shall be changed to always
correspond to WCE's percentage ownership of the shares of A/S.
The parties agree to use their best endeavours to reach an operating
margin as defined in Schedule B of at least 20%. In any event the parties
agree that AG Group shall have a minimum operating margin of 15% in the
years 2000 - 2005 and that in the event this figure is not reached the
partners' salaries shall be reduced to an amount which enables AG Group
to have a profit margin of 15%.
In 2005 the shareholders and partners shall undertake a review process
which shall determine both whether 60% remains a fair and reasonable
demarcation for "aggregate salaries" and whether 20% remains a fair and
reasonable expected operating margin; after having undertaken bench
marking against other similar companies engaged in the same or similar
businesses; and AG Group's profitability".
1.1.2. The advance profit is divided into a base consideration and a bonus
consideration.
1.1.3. Between 90 and 95 percent of the budgetted advance profit shall be used
as base consideration. The remaining 5-10 percent and advance profit in
excess of the budgeted amount shall be set aside for bonus consideration.
1.1.4. Where the share of advance profit called base consideration is smaller
than the budgeted amount, the deficit shall be distributed among the
partners in proportion to the base consideration fixed for the year for
the individual partner.
1.2. CONSIDERATION COMMITTEE
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1.2.1. A consideration committee shall be set up in which the life division
manager participates as an ex-officio member and in which the other
members shall be one partner (elected by lot or by agreement between the
partners) from each office.
1.2.2. Election of members for next consideration year shall take place each
year in November/December.
1.2.3. The committee shall be set up for one consideration year at a time so
that the committee which has fixed the base consideration for the
financial year shall also fix the bonus consideration for the same
financial year.
1.2.4. Within the framework stated above the consideration committee shall
decide the share of the advance profit to be used for base consideration
and the share to be used for bonus consideration.
1.2.5. Prior to the 3rd payment of consideration in the coming year and not
later than on February 15 the consideration committee shall decide the
distribution of the base consideration for the coming year on the basis
of an evaluation of the individual partner and of the whole and the
committee shall decide the evaluation criteria.
1.2.6. For the first 2 months account payments shall be made corresponding to
the amounts paid the foregoing year. When the base consideration for the
coming year has been decided, the account payments for the first 2
months shall be adjusted.
1.2.7. At the end of the financial year, when the financial result is known the
consideration committee distributes the bonus consideration. The bonus
consideration is granted to the individual partner on the basis of a
careful evaluation of his/her performance for the year and the committee
shall decide the evaluation criteria.
1.2.8. Where the individual partner is not satisfied with the base
consideration fixed by the consideration committee for him/her or with
the distribution of the bonus consideration, he/she may bring the issue
before the management, which shall then decide whether changes of the
distribution should be made.
The issue shall be brought before the management not later than one week
after the partner has received information about his/her base
consideration for the coming year.
The decision of the management may be brought before the executive
committee not later than 4 weeks after a partner has been notified of
it.
1.2.9. When new partners are taken in, the base consideration shall be decided
by the life division manager, who shall obtain the approval of the
consideration committee, prior to the admission of the new partner.
1.2.10. By way of advance profit partners may draw a monthly amount on account
corresponding to 1/12 of the budgeted base consideration.
Where in the course of the year the budgeted base consideration pool
becomes smaller than expected, the monthly amounts on account may be
proportionally reduced.
The monthly amounts on account shall be paid monthly in advance.
The payment of monthly advance profit on account is effected on the
condition that the
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partners place their entire working capacity at the disposal of I/S.
2. THE NON-LIFE DIVISION
2.1.1. The profit made up according to appendix 6, shall be distributed with
30% to the partners according to ownership shares and with 70% (the
"Advance Profit") among the partners who are insurance brokers, the
administrative partners being paid via the operating costs, provided
always, however, that the aggregate salaries of I/S (including both Life
and Non-Life partners' salaries and normal salaries as defined in
schedule A) shall not exceed 62% (in 1998), 61% (in 1999) and 60% (in
2000-2005), respectively, of the total income of I/S (excluding
investment income). If the aggregate salaries of I/S exceed those
thresholds a reduction of 30% of the excess amount shall be made in the
Advance Profit and distributed to WCE. The reference to 30% above shall
be changed to always correspond to WCE's percentage ownership of the
shares of A/S.
The parties agree to use their best endeavours to reach an operating
margin as defined in Schedule B of at least 20%. In any event the
parties agree that AG Group shall have a minimum operating margin of 15%
in the years 2000 - 2005 and that in the event this figure is not
reached the partners' salaries shall be reduced to an amount which
enables AG Group to have a profit margin of 15%.
In 2005 the shareholders and partners shall undertake a review process
which shall determine both whether 60% remains a fair and reasonable
demarcation for "aggregate salaries" and whether 20% remains a fair and
reasonable expected operating margin; after having undertaken bench
marking against other similar companies engaged in the same or similar
businesses; and AG Group's profitability".
2.1.2. The advance profit is divided into a base consideration and a bonus
consideration.
2.1.3. Between 90 and 95 percent of the budgetted advance profit shall be used
as base consideration. The remaining 5-10 percent and advance profit in
excess of the budgeted amount shall be set aside for bonus
consideration.
2.1.4. Where the share of advance profit called base consideration is smaller
than the budgeted amount, the deficit shall be distributed among the
partners in proportion to the base consideration fixed for the year for
the individual partner.
2.2. CONSIDERATION COMMITTEE
2.2.1. A consideration committee shall be set up in which the non-life division
manager and the regional manager participate as ex-officio members and
in which the other members shall be one partner (elected by lot or by
agreement between the partners) from each office.
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2.2.2. Election of members for next consideration year shall take place each
year in November/December. (The election for 1998 has taken place, the
next election will take place in November/December 1998 applying to the
consideration year 1999).
2.2.3. The committee shall be set up for 1 consideration year at a time so that
the committee which has fixed the base consideration for the financial
year shall also fix the bonus consideration for the same financial year.
2.2.4. Within the framework stated above the consideration committee shall
decide the share of the advance profit to be used for base consideration
and the share to be used for bonus consideration.
2.2.5. Prior to the 4th payment of consideration in the coming year and not
later than on March 15 the consideration committee shall decide the
distribution of the base consideration for the coming year on the basis
of an evaluation of the individual partner and of the whole and the
committee shall decide the evaluation criteria.
2.2.6. For the first 3 months payments on account shall be made corresponding
to the amounts paid the foregoing year. When the base consideration for
the coming year has been decided, the payments on account for the first
3 months shall be adjusted.
2.2.7. At the end of the financial year, when the financial result is known the
consideration committee distributes the bonus consideration. The bonus
consideration is granted to the individual partner on the basis of a
careful evaluation of his/her performance for the year and the committee
shall decide the evaluation criteria.
2.2.8. Where the individual partner is not satisfied with the base
consideration fixed by the consideration committee for him/her for the
coming year, he/she may bring the issue before the management, which
shall then decide whether changes of the distribution should be made.
The decision made by the management shall then apply to the coming year.
The issue shall be brought before the management not later than one week
after the partner has received information about his/her base
consideration for the coming year.
2.2.9. Where the individual partner is not satisfied with the base
consideration fixed by the consideration committee for him/her or with
the distribution of the bonus consideration, he/she may bring the issue
before the management, which shall then decide whether changes of the
distribution should be made.
The issue shall be brought before the management not later than one week
after the partner has received information about his/her base
consideration for the coming year.
The decision of the management may be brought before the executive
committee not later than 4 weeks after a partner has been notified of
it.
2.2.10. When new partners are taken in, the base consideration shall be decided
by the non-life division manager, who shall obtain the approval of the
consideration committee, prior to the admission of the new partner.
2.2.11. By way of advance profit partners may draw a monthly amount on account
corresponding
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to 1/12 of the budgeted base consideration.
Where in the course of the year the budgeted base consideration pool
becomes smaller than expected, the monthly amounts on account may be
proportionally reduced.
The monthly amounts on account shall be paid monthly in advance.
The payment of monthly advance profit on account is effected on the
condition that the partners place their entire working capacity at the
disposal of I/S.
3. OTHER PROVISIONS CONCERNING PROFIT
3.1. Payments of profit received/payments of deficit made according to owner
shares shall take place not later than two weeks after the adoption of
the financial statements at the meeting of partners in April/May.
List of Appendices
Schedule A: Defintion of normal salaries and related excl. 70% partner's salary
Schedule B: Profit Allocation model, including operating profit
--------------------------------------------------------------------------------
BUSINESS TRANSFER AGREEMENT
between
Xxxxxx Xxxxxxx A/S
Assurandorgruppen I/S
This Agreement is made the 28th day of September 1998 between Xxxxxx Xxxxxxx A/S
(Xxx.Xx. A/S 198.529) Christian IX's Xxxx 0, 0xx Xxxxx, XX-0000 Xxxxxxxxxx K
(hereafter referred to as the "Vendor") and Assurandorgruppen I/S,
Xxxxxxxxxxxxxxxxxxx 00, XX-0000 Xxxxx N (hereafter referred to as the
"Purchaser").
WHEREAS Xxxxxx Xxxxxxx Europe B.V. a company incorporated under the laws of the
Netherlands and being affiliated with the Vendor has decided to make an
investment in Purchaser.
WHEREAS Xxxxxx Xxxxxxx Europe B.V. desires after the investment to concentrate
the activities in Denmark of the Xxxxxx Xxxxxxx Group which has hitherto been
carried out by the Vendor in the Purchaser's business.
NOW THEREFORE in consideration of the foregoing and the mutual covenants and
agreements set forth herein the Vendor agrees to sell and the Purchaser agrees
to purchase the business hitherto operated by the Vendor as further defined in
this Agreement (the "Business") on the terms and conditions set out below.
1. Transfer Date
1.1 Effective from 28 September 1998 (the "Transfer Date") the Business
shall be transferred from the Vendor to the Purchaser.
1.2 From the Transfer Date the Business shall be held for the account and
risk of the Purchaser. The Vendor is solely responsible for any actions
with regard to the Business made prior to the Transfer Date regardless
of whether the effect of such actions are first seen after the Transfer
Date.
1.3 The Vendor will receive commission in all instances where invoices are
submitted by the Vendor prior to the Transfer Date. For invoices
submitted by the Purchaser after the Transfer Date payment will be in
the favour of the Purchaser.
-2-
2. Assets Transferred and their Valuation
2.1 Equipment and Furniture
2.1.1 The Purchaser shall acquire all equipment, furniture and moveable
property of any sort belonging to the Business for DKK 275,000.
2.2 Goodwill
2.2.1 The Purchaser shall acquire the goodwill of the Business for DKK
5,550,000.
3. Contracts
3.1 Service Contract
3.1.1 The Service Contract with Xx Xxxx Xxxxxxx shall be transferred to the
Purchaser.
3.1.2 The Purchaser will permit Xx Xxxx Xxxxxxx in a reasonable period after
the Transfer Date to use part of his time for the purpose of
facilitating the transfer of the Vendor's business to the Purchaser
including administration of receivables.
3.2 Employees
3.2.1 The employees hitherto employed in the Business, i.e. Jesper Danvad,
Xxxxx Xxxxx and Xxx Xxxxxx Xxxxxxxx shall be transferred to the
Purchaser pursuant to the Transfer Undertakings' Act
(Virksomhedsoverdragelsesloven).
3.2.2 The Vendor and the Purchaser shall inform their own employees of the
transfer no later than 28 September 1998 in accordance with Sections 5
and 6 of the Transfer Undertakings' Act.
3.2.3 Remuneration earned by employees but not due for payment before or on
the Transfer Date including pay for holidays and weekdays contributions
to ATP
-3-
and AUD, bonuses, profit bonuses, exgratia payments and the value of
overtime not yet taken as time off in lieu shall be refunded in the
statement of repayments, cf. Clause 5.3. The same shall apply to
expenses defrayed by employees transferred which have not yet fallen due
for payment. The Purchaser shall assume without indemnity obligations
arising from length of service.
3.3. Commercial Contracts
3.3.1 The Purchaser shall assume the Vendor's rights and obligations in
relation to all of the Vendor's commercial contracts entered into with
insurance companies and clients for the purpose of the Business. The
Purchaser shall not assume any other contracts unless provided for
elsewhere in this Agreement.
3.3.2 Where the consent of a third party is required before the Purchaser may
replace the Vendor in a contract the Purchaser shall be responsible for
obtaining such consent. The Vendor shall render assistance when
necessary but does not warrant the transferability of any contracts.
3.4 Insurance Policies
3.4.1 The Vendor's insurance policies connected with the Business shall not be
assigned to the Purchaser.
4. Liabilities
4.1 The Purchaser shall not assume any of the Vendor's liabilities unless
expressly provided for elsewhere in this Agreement.
5. Purchase Price Value Added Tax and Statement of Repayments
5.1 Purchase Price
5.1.1 The purchase price for the assets detailed in 2.0 shall be as follows:
-4-
equipment and furniture DKK 275,000
goodwill DKK 5,550,000
total purchase price DKK 5,825,000
5.1.2 The purchase price shall be paid on the Transfer Date in cash by wire
transfer of same day funds to Xxxxxx Xxxxxxx Europe B.V.'s account no.
3100 3486 (Sort Code 30-94-55) at Lloyds Bank, 00 Xxxxxxxx, Xxxxxxx,
Xxxxxxx, XXXXX XXXXXX0X.
5.1.3 After the Transfer Date the Purchaser shall maintain separate accounts
for the Business until 31 December 1998. If it can be concluded that the
sustainable income of the Business on the basis of the continued
accounts prepared by the Purchaser does not exceed DKK 3.5m for the year
1998 or does not generate after tax profits after restructuring costs of
a minimum of DKK 1m the parties shall enter into negotiations about a
possible reduction of the purchase price.
5.2 Danish VAT
5.2.1 The transfer shall not be subject to VAT, cf. the Danish Value Added Tax
Act, Section 8(1) as the Purchaser is registered for VAT.
5.3 Statement of Repayments
5.3.1 A usual statement of repayment shall be prepared by the Vendor's
accountant no later than 31 October 1998 with the Transfer Date as the
cut off date. The statement shall cover all current expenses, deposits,
sums paid in advance etc. as well as payments according to 3.2.3 and
returned premiums. The statement of repayments shall be prepared in
accordance with normal accounting concepts for accruals, and shall be
submitted to the Purchaser's accountant for approval. The balance shall
be paid in cash with the addition of interest at the rate of 5% p.a.
from the Transfer Date until payment is made.
6. Administrative Provisions
6.1 Administration of Receivables
-5-
6.1.1 The transfer shall not include receivables due to the Vendor. The Vendor
shall undertake collection of the receivables itself.
7. Miscellaneous Provisions
7.1 Confidentiality
7.1.1 Information received by the parties concerning each other in connection
with the negotiations for and the implementation of this Agreement shall
be deemed to be confidential information which the parties are without
limit of time not entitled to use or pass on to third parties unless the
information in question is available to the public or can be shown to
have been received by one of the parties from a third party who is in
lawful possession thereof and who may use the information in this way. A
corresponding duty of confidentiality applies to the Vendor in relation
to the information the Vendor has concerning the Business transferred.
7.2 Headings
7.2.1 The headings of the sections on this Agreement are for convenience only
and shall not constitute a part hereof or affect in any way the meaning
or interpretation of this Agreement.
7.3 Severability
7.3.1 If any provisions of this Agreement is invalid, illegal or unenforceable
the remainder of this Agreement shall remain in effect and if any
provision is inapplicable to one of the parties it shall nevertheless
remain applicable to the other party.
7.4 Non-waiver
7.4.1 The waiver expressly or implied by either of the parties hereto of any
rights hereunder for any failure to perform or breach by the other party
hereto shall not constitute or be deemed to be a waiver of any other
right hereunder for any
-6-
other failure to perform or breach hereof by the other party whether a
similar or a dissimilar nature thereto.
7.5 Modification of Agreement
7.5.1 No oral explanation or oral information by either of the parties hereto
shall alter the meaning or interpretation of this Agreement. No
amendment, change or addition hereto shall be effective or binding on
either of the parties hereto unless drawn up in writing and executed by
the parties hereto. If any part of this Agreement is held unlawful,
invalid or is declared void for any reason whatsoever the remaining
provisions of this Agreement shall nevertheless remain in full force and
effect.
7.6 Expenses
7.6.1 Expenses incurred in connection with stamping this Agreement shall be
borne by the Purchaser.
7.6.2 Each party shall bear the fees and other expenses payable to its own
advisors incurred in connection with entering into this Agreement.
7.7 Disputes
7.7.1 This Agreement shall be governed and construed in accordance with the
laws of the Kingdom of Denmark.
7.7.2 Any dispute between the parties arising out of or in connection with
this Agreement shall, provided the parties can not agree on a settlement
through negotiation, be determined by arbitration with final, binding
and enforceable effect in agreement with the following rules:
7.7.3 In the event of a dispute, either party shall be entitled to request
that an arbitration tribunal be set up.
7.7.4 The party seeking resolution of a dispute by arbitration shall appoint
an arbitrator
-7-
and send a letter by registered mail to the other party (the
"Respondent") requesting the Respondent to appoint its arbitrator within
14 days. The letter shall also contain a short statement of the question
or questions to be determined by the arbitration. Where the Respondent
does not appoint an arbitrator within the time-limit mentioned above,
that arbitrator shall instead be appointed by the Danish Arbitration
Institute.
7.7.5 The two arbitrators appointed for the parties shall jointly appoint an
umpire. Failing agreement on the choice of an umpire, the appointed
arbitrators shall jointly approach the Danish Arbitration Institute and
request that it, following prior discussion with the parties, appoint an
umpire to act as chairman of the arbitration tribunal.
7.7.6 The arbitration tribunal shall determine the matter according to
applicable law and shall lay down the rules for its hearing of the
matter in agreement with the general principles of the Danish
Administration of Justice Act (Retsplejeloven).
7.7.7 The arbitration tribunal shall also decide how the costs of the
arbitration are to be borne. The arbitration tribunal shall set a date
for implementation of the award, which date shall normally be no later
than 14 days after the award has been made.
7.7.8 The venue for the arbitration shall be Copenhagen, and the language of
the proceedings shall be English.
This Agreement has been executed in two original copies and one copy has been
given to each of the parties.
Xxxxxxxxxx, 00/0 0000 Xxxxxxxxxx, 28/9 1998
----------------------- -----------------------
-8-
Xxxxxx Xxxxxxx A/S Assurandorgruppen I/S
-9-
Exhibit 1
On 28 September 1998 a meeting of the Board of Directors of Assurandorgruppen
A/S was held at the offices of Kromann & Xxxxxx, 14 Radhuspladsen, XX-0000
Xxxxxxxxxx V. All board members were present.
The only item on the agenda was a proposal to increase the share capital of the
company.
At the extraordinary general meeting of the company held on 18 June 1998 the
Board of Directors were authorized to increase the share capital of the company
by an amount not exceeding DKK 5,000,000, cf. clause 3.5 of the Articles of
Association.
The Board of Directors unanimously decided to exercise this authority by issuing
nominal DKK 4,285,700 shares in the company at a price of DKK 12.60 per DKK 1
share to Xxxxxx Xxxxxxx Europe B.V. in accordance with the attached draft
subscription list. The Board of Directors further approved the attached report
according to section 29, subsection 2 of the Companies Act.
As a consequence of the resolution passed the Board of Directors decided to
abolish clause 3.5 of the Articles of Association of the Company.
Copenhagen, on 28 September 1998
In the Board of Directors:
Xxxxx Xxxxxxxx Xxxx Xxxxxx Xxxxxx Xxxxxxxxx
-------------------
Xxxxxxx Xxxxxx
Report from the Board of Directors in accordance with section 29, subsection 2
of the Companies Act
In connection with the proposal to increase the capital of the company by DKK
4,285,700 through cash payment the Board of Directors states that since the end
of the last fiscal period and the submission of the annual report no event of
material importance to the position of the company including the equity capital
of the company have occurred.
Copenhagen, on 18 September 1998
In the Board of Directors:
Xxxxx Xxxxxxxx Xxxx Xxxxxx Xxxxxx Xxxxxxxxx
-------------------
Xxxxxxx Xxxxxx
As the accountant for Assurandorgruppen A/S the undersigned hereby states under
section 29, subsection 2 of the Companies Act that the report of the Board of
Directors does not give any grounds for comments or additions thereto concerning
the financial position of the company.
Arhus, on 18 September 1998
----------------------------
KPMG X. Xxxxxxxxx
State Authorized Accountants
Subscription list
In accordance with the above transcript of the minute book of the Board of
Directors and subject to the terms and conditions of the attached Stock Purchase
Agreement of today's date we, the undersigned, hereby subscribe to the following
amount:
Name: Amount: Date and signature:
Xxxxxx Xxxxxxx Europe B.V. DKK 4,285,700 28/9-98
Xxxxx Xxxxxxx according to proxy
