MANAGEMENT SERVICES AGREEMENT
Exhibit
10.3
This
Management Services Agreement (the “Agreement”) is entered into
this ___ day of November, 2008, by and among Vanco plc (in administration),
a
company incorporated under the laws of England and Wales with registered
number
3470117 (“Vanco”), Simon Xxxx Xxxxxxx and Xxxx Xxxxxxx, each an insolvency
practitioner of FTI Consulting Limited, a company with its principal offices
at
Holborn Gate, 00 Xxxxxxxxxxx Xxxxxxxxx, Xxxxxx, XX0X 0XX, in their respective
capacities as joint administrators of Vanco (together the “Administrators,”
which term shall include their successors in office), and Capital Growth
Acquisition, Inc., a corporation organized under the laws of Delaware
(“Manager”). Individually, each of Manager, the Administrator, and Vanco is a
“Party” and collectively they are the “Parties.”
WHEREAS,
Administrators
were appointed to act as
joint administrators of Vanco on May 25, 2008 by Lloyds TSB Bank plc in
accordance with paragraph 14 to Schedule B1 to the (English) Insolvency Xxx
0000;
WHEREAS,
Vanco has inter alia one U.S.
subsidiary, Vanco Direct USA LLC (“VDUL”), a Delaware limited liability company
which holds domestic and international Section 214 authorizations from the
U.S.
Federal Communications Commission (“FCC”) and certificates of public convenience
and necessity or the equivalent from various state telecommunications regulatory
commissions (the “State Commissions” and, collectively with the FCC, the
“Commissions”) (such authorizations and certificates collectively referred to as
the “Licenses”);
WHEREAS,
Manager has made a bid to purchase the
limited liability company interests of VDUL from Vanco, which bid has been
approved by the Administrators;
WHEREAS,
Vanco
has entered into an Interest Purchase
Agreement with Manager of even date herewith for the sale of the limited
liability company interests in VDUL (the “Purchase Agreement”), pursuant to
which Manager will acquire VDUL in a manner consistent with applicable
law;
WHEREAS,
the Parties acknowledge and agree that
certain Regulatory Approvals must be obtained before control of VDUL can
be
transferred to Manager; the effective date of the closing of the Purchase
Agreement pursuant to which the limited liability company interests of VDUL
shall be conveyed to Manager is the “Closing Date.”
WHEREAS,
Vanco has retained de facto and
de jure control of VDUL pending receipt of all Regulatory
Approvals;
WHEREAS,
in order to ensure uninterrupted service to
customers of the VDUL Systems pending issuance of the approvals, and to avoid
associated potential disruption to customers, the Parties desire to enter
into
an arrangement for Manager to manage VDUL and VDUL’s network and operations in
the United States that is the subject of the Licenses (the “VDUL Systems”), at
all times subject to the oversight, review, supervision and control of Vanco;
WHEREAS,
the parties hereto believe it to be in
their mutual best interests for Manager to provide certain services as described
below to VDUL until the requisite Regulatory Approvals can be obtained and
the
proposed transaction can be completed;
WHEREAS,
Vanco and Manager desire that Manager
provide management services to VDUL in conformity with the rules and policies
of
the FCC, the State Commissions, and the terms and conditions of the Purchase
Agreement and this Agreement; and
WHEREAS,
Manager desires to serve as the manager of
VDUL and the VDUL Systems pursuant to the terms set forth in this
Agreement;
NOW
THEREFORE, in consideration of the mutual
promises contained herein, the sufficiency of which is acknowledged, the
Parties, intending to be legally bound, hereby agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.1 Definitions. Each term capitalized herein and
not otherwise defined shall have the meaning assigned to it in the Purchase
Agreement.
“Communications
Licenses” means those licenses, registrations,
authorizations or other authorities which permit VDUL to provide regulated
interstate, intrastate and local regulated telecommunications services.
“Confidential
Materials” means any information or materials, whether
written or oral, tangible or intangible; (i) concerning Vanco, its subsidiaries,
businesses, markets, products, prospects, finances and member(s), and (ii)
which
Manager develops, or with respect to which Manager gains access or knowledge,
as
a direct result of Vanco’s, Administrators' or VDUL’s provision to Manager of
information and/or materials. Notwithstanding the foregoing, the Confidential
Material shall not include (A) information that was known to, and material
that
was in the possession of, Manager prior to the commencement of any negotiations
with Vanco and Administrators, (B) information that is or becomes generally
known to, and materials possessed by, the public at large or entities involved
in the business of VDUL (other than as a result of a breach of this agreement
by
Manager or by disclosure of any other party which Manager knows, or has reason
to know, is under an obligation of confidentiality to Vanco and Administrators),
(C) information or material acquired by Manager independently from a third
party
(other than a third party that Manager knows, or has reason to know, is under
an
obligation of confidentiality to Vanco and Administrators), and (D) information
or material independently developed by Manager and not as a result of the
disclosure of information or provision of materials by Vanco or Administrators.
The Confidential Materials may include, but are not necessarily limited to,
concepts; techniques; data; documentation; research and development; customer
lists; advertising plans; distribution networks; new product concepts; designs;
patterns; sketches; planned introduction dates; processes; marketing procedures;
"know-how"; marketing techniques and materials; development plans; names
and
other information related to strategic partners, suppliers, or vendors; pricing
policies and strategic, business or financial information, including business
plans and financial pro formas.
-2-
ARTICLE
II
APPOINTMENT
OF MANAGER
Section
2.1 Appointment, Authority, Obligations of
Manager.
(a) Manager
hereby agrees, subject to the terms, conditions, and
limitations set forth in this Agreement, to provide supervision and management
services to VDUL so as to meet any and all ongoing obligations associated
with
the VDUL Systems and the services provided using the VDUL Systems (the “VDUL
Services,” and together with the VDUL Systems, the “VDUL Business”), including
without limitation obligations of VDUL to provide service to the customers
pursuant to existing contractual relationships and to any new customers that
may
from time to time during the Term of this Agreement purchase such services.
The
duties of Manager under this Agreement shall include doing all things
commercially reasonable and necessary to carry out the supervision, operation
and management of the VDUL Business in a manner, and at a level of service
quality, substantially consistent with past practices and the manner and
level
of service quality in which the VDUL Business has been operated and services
have been provided by VDUL prior to the Effective Date of this Agreement.
(b) Manager
hereby accepts such appointment and agrees to
perform its obligations and responsibilities hereunder and agrees to devote
such
time and resources as are necessary to ensure proper and efficient operation
of
VDUL and the VDUL Business, and shall make available to Vanco the full range
of
its expertise and experience.
(c) Vanco
hereby grants to Manager as much access as Vanco and
VDUL has to all facilities, equipment, personnel, books, records and operational
assets as is necessary to permit Manager to perform its obligations
hereunder.
ARTICLE
III
MANAGEMENT
OF THE VDUL BUSINESS
|
Section
3.l
|
Management
of the VDUL
Business.
|
(a) During
the Term, the Manager shall have the duty to manage
the VDUL Business authorized under the Communications Licenses on behalf
of
Vanco consistent with the provisions of this Agreement and subject to Vanco’s
continued ownership, control and reasonable supervision and direction. Upon
reasonable request, Manager hereby agrees to report to Vanco’s Administrators
the status of the operations of the VDUL Business.
(b) Vanco
and Manager desire that this Agreement and the
performance of Vanco’s and Manager’s obligations hereunder be in full compliance
with (i) the terms and conditions of the Communications Licenses; (ii) the
Communications Act of 1934, as amended (the “Act”); (iii) all applicable
rules, regulations and policies of the Commissions; and (iv) any other
applicable federal, state and local law or regulation. It is expressly
understood by Vanco and Manager that nothing in this Agreement is intended
to
give Manager any right which would be deemed to constitute a transfer of
control
(as is defined in the Act and/or any applicable FCC or state rules, regulations
or case law) by Vanco of any of the Communications Licenses from Vanco to
Manager to the extent prohibited by the applicable federal and state law,
or the
rules or regulations of any Commission.
-3-
(c) Manager
acknowledges and agrees that Vanco has certain
rights and obligations pursuant to the Communications Licenses with respect
to
activities authorized thereunder, which include compliance with the Act,
and the
rules, regulations, and policies of the Commissions. The services provided
by
Manager hereunder are not intended to diminish or restrict Vanco’s compliance
with its obligations under applicable law or before the Commissions, and
this
Agreement shall not be construed to diminish or interfere with the obligations
of Vanco or its ability to comply with the rules, regulations or directives
of
any governmental or jurisdictional authority with respect to the Communications
Licenses or the VDUL Business.
(d) Vanco
shall have unfettered access and authority to inspect
the books and records, equipment and related hardware that is required to
transmit and/or receive telecommunications, including but not limited to
network
facilities, switching equipment, customer premises equipment and testing
equipment, for any reason and at any time, including but not limited to access
for purposes of determining whether, under the Manager’s supervision and
management, the VDUL Business is operating in a manner that violates the
terms
of this Agreement, the Act or the Commissions’ rules, regulations, or policies,
or is otherwise operating in a harmful or unlawful manner.
(e) Manager
shall be responsible for providing the management
services in compliance with VDUL’s existing tariffs and service contracts, and
all applicable laws, including, without limitation, tariffs in effect from
time
to time. Manager shall perform the management services in a professional
manner
and in accordance with all applicable professional or industry standards.
ARTICLE
IV
PAYMENT
OF COSTS AND MANAGER’S COMPENSATION
Section
4.1 Payment of Costs. As of the Effective Date,
Manager shall be responsible for payment by VDUL of all costs and expenses
(the
“Costs”) incurred or due with respect to the maintenance and operation of VDUL,
the VDUL Systems, the compensation of VDUL’s employees, and the provision of the
VDUL Services, and shall be given full access and signatory authority to
all
VDUL financial accounts (the “Accounts”), including VDUL funds as of the
Effective Date and all revenues collected by VDUL (or on behalf of VDUL by
Manager) during the Term of this Agreement in connection with the operation
of
the VDUL Business (the “Revenue” and together with the Accounts, the “VDUL
Funds”). VDUL hereby authorizes Manager to use the VDUL Funds to pay its Costs
and the Monthly Management Fee (as defined below).
Section
4.2 Monthly Management Fee. As consideration for
Manager providing the management services described herein, Vanco agrees
that
Manager shall be paid out of the VDUL Funds a monthly fee
(“Monthly Management Fee”) equal to 30% of the Revenues received each month;
provided that, in any month during the Term in which the
Monthly Management Fee would otherwise exceed VDUL’s Revenues less its Costs
(the “Net Revenue”), the Monthly Management Fee shall be no greater than the Net
Revenue, if any, and VDUL shall not have any obligation to pay Manager any
greater amount. The Monthly Management Fee shall be paid solely from the
VDUL
Funds on the last business day of each month, with the final Monthly Management
Fee being paid at the end of the Term (as defined below).
-4-
Section
4.3 Status Reports. At Vanco’s request, Manager
shall provide Vanco with updates on the status of the operation of the VDUL
Business and the overall financial condition of VDUL.
Section
4.4 Books and Records. Manager shall create and
maintain complete and accurate records of all financial and other material
transactions relating to performance of this Agreement in a manner consistent
with records prepared and maintained by Manager in the ordinary course of
business and with U.S. generally accepted accounting principles. At its
discretion and expense, Vanco may conduct periodic audits of Vanco’s records
relating to performance of this Agreement and its operation and management
of
the VDUL Business.
ARTICLE
V
COMPLIANCE
WITH APPLICABLE LAWS
Section
5.1 Compliance with Applicable Laws and
Regulations.
(a) Manager
agrees that, in connection with providing the
management services hereunder, it shall comply in all material respects with
all
applicable laws, ordinances, rules, regulations, and restrictions, including
but
not limited to the Act, the FCC and State Commission rules, regulations,
and
policies, and local ordinances, and shall respond promptly to all regulatory
correspondence or inquiries and any and all adversarial pleadings of whatever
nature filed with the Commissions or any other governmental authority and
will
promptly notify Vanco of the receipt thereof.
(b) Vanco
and Manager agree that they shall not take any action
that would violate any Communications License or that could reasonably be
expected to cause the cancellation, revocation, or adverse modification of
any
Communications License or that could be expected to otherwise impair the
good
standing or renewal of any License.
(c) Manager
acknowledges and agrees that Vanco has certain
rights and obligations pursuant to the Communications Licenses with respect
to
activities authorized thereunder, which include compliance with the Act and
similar state statutes, and the rules, regulations, and policies of the
Commissions. The services provided by Manager hereunder are not intended
to
diminish or restrict Vanco’s compliance with its respective obligations under
applicable law or before the Commissions, and this Agreement shall not be
construed to diminish or interfere with any Vanco’s obligation or ability to
comply with the rules, regulations or directives of any governmental or
jurisdictional authority with respect to the Communications Licenses. On
behalf
of Vanco, Manager shall take or cause to be taken all reasonable and appropriate
steps necessary to keep the Communications Licenses in full force and effect
and
in good standing.
(d) Manager
and Vanco recognize that VDUL, and ultimately Vanco,
remain responsible for compliance with the terms of the Communications Licenses.
In that regard, the Manager shall not, without the prior consent of Vanco’s
Administrators, such consent not to be unreasonably withheld if consistent
with
past practice of operations by VDUL, take the following actions:
-5-
|
(i)
|
enter
into, modify, intentionally breach or terminate any
material agreement relating to the assets managed by Manager, other
than
in the ordinary course of business;
|
|
(ii)
|
sell,
assign, lease, transfer or otherwise dispose of any
material asset or purchase or otherwise acquire any assets for
VDUL except
for non-material assets acquired in the ordinary course of
business;
|
|
(iii)
|
initiate,
settle or terminate any material litigation relating
to the regulated aspects of the VDUL Business or waive any material
rights
of VDUL or Vanco;
|
|
(iv)
|
demote
or terminate any employee of VDUL other than with
respect to headcount reduction amounts previously disclosed to
Manager;
|
|
(v)
|
hire
any employee for VDUL; or
|
|
(vi)
|
cause
VDUL to take any action or neglect to take any action
which would constitute a default under this Agreement or the Purchase
Agreement.
|
(e)
The
parties hereby agree that Manager shall request
Vanco’s consent to the actions referenced in Section 5.1(d) above in writing to
Vanco’s Administrators. For purposes of this Section 5, notice and consent
by any party can be achieved by electronic mail. Unless Vanco refuses in
writing
to grant consent within two (2) business days of receipt of a request for
consent by Manager, Vanco’s consent will be deemed granted.
(f) Vanco
shall be responsible for the filing of all
applications, reports, correspondence and other documentation with the
Commissions relating to the VDUL Business; provided, however, that
Manager shall assist Vanco by preparing such filings for Vanco’s review; and
provided, further, that Manager shall reimburse Vanco out of the VDUL
Funds for all of its reasonable out-of-pocket legal fees and other expenses
incurred in connection with such applications, correspondence and other related
matters, to the extent that any such review results in material changes to
any
of the materials prepared by Manager. Manager shall provide upon Vanco’s
reasonable request any information which will enable it to review and complete
any records and reports required by the Commissions and other federal, state
or
local government authorities.
-6-
ARTICLE
VI
TERM
Section
6.1 Term. The term (“Term”) of this Agreement
shall commence upon the “Initial Closing” as that term is defined in the IPA
(the “MSA Effective Date”) and automatically end on the earlier of (i) the
Closing Date; or (ii) termination of the Purchase Agreement pursuant to Section
8.13 thereof.
Section
6.2 Automatic Termination. This Agreement shall
automatically terminate if any Commission issues a formal written order,
which
is final and non-appealable, that Manager is precluded from performing its
duties hereunder and any period of time provided by such Commission to Manager
to remedy such situation has expired.
Section
6.3 Performance After Termination. After receipt
of written notice of termination, but prior to the effective date of such
termination, Manager shall continue to perform under this Agreement unless
specifically instructed to discontinue such performance.
Section
6.4 Termination Transition. On the effective date
of any termination, or before such date if so instructed, Manager shall
relinquish to Vanco, or its designee, possession of all property of VDUL,
including but not limited to the VDUL Systems, The VDUL Funds, and all
documents, data and records pertaining to the VDUL Business, including without
limitation complete records of all financial and other material transactions
relating to Manager’s performance of this Agreement. Notwithstanding anything to
the contrary contained herein, in the event of a successful closing of the
Purchase Agreement on the Closing Date, then VDUL shall retain all property
of
VDUL, however Vanco shall be entitled to inspect and copy all records pertaining
to VDUL necessary for Vanco to complete its tax returns, to monitor compliance
of Manager with respect to its obligations hereunder and to enable Vanco
to
address any regulatory issues that may arise as a result of its ownership
of
VDUL through the Closing Date.
ARTICLE
VII
MISCELLANEOUS
Section
7.1 Amendment and Modification; Obligation to
Renegotiate. This Agreement may be amended, modified or supplemented only by
written agreement of Vanco and Manager. In the event that a governmental
entity
with jurisdiction over any or all of the Parties or over this Agreement
determines that one or more provisions of this Agreement are unlawful, contrary
to public policy, or otherwise unenforceable, the Parties will negotiate
in good
faith to amend the Agreement in order to comply with any such applicable
regulatory requirements or policies while preserving the business objectives
of
all Parties.
Section
7.2 Waiver of Compliance; Consents. Except as
otherwise provided in this Agreement, any failure of any of the parties to
comply with any obligation, covenant or condition herein may be waived by
the
Party entitled to the benefits thereof only by a written instrument signed
by
the Party granting such waiver, but such waiver or failure to insist upon
strict
compliance with such obligation, covenant, or condition shall not operate
as a
waiver of or estoppel with respect to any subsequent or other failure.
-7-
Section
7.3 Notices. All notices under this Agreement
shall be sufficiently given for all purposes if made in writing and delivered
personally, sent by documented overnight delivery service or, to the extent
receipt is confirmed, facsimile or other electronic transmission, to following
addresses and numbers:
|
Notices
to Seller shall be addressed to:
|
|
|
Vanco
plc (in administration)
Xxxxxxx
Xxxx
00
Xxxxxxxxxxx Xxxxxxxxx
Xxxxxx
XX0X 0XX
Fax: x00-000-000-0000
E-Mail:
xxxxx.xxxxxxx@xxxxxxxxxxxxx.xxx
Attn: The
Administrators
|
|
|
Notices
to Administrators shall be addressed to:
|
|
|
The
Administrators
Xxxxxxx
Xxxx
00
Xxxxxxxxxxx Xxxxxxxxx
Xxxxxx
XX0X 0XX
Fax: x00-000-000-0000
E-Mail:
xxxxx.xxxxxxx@xxxxxxxxxxxxx.xxx
Attn: Xxxxx
Xxxxxxx
|
|
|
Each
with a copy to:
|
|
|
Xxxxxxx
XxXxxxxxx LLP
0000
X Xxxxxx, X.X., Xxxxx 0000
Xxxxxxxxxx,
XX 00000
Fax: (000)
000-0000
E-Mail:
xxxx.xxxxxx@xxxxxxx.xxx
Attn: Xxxx
X. Xxxxxx, Esq.
|
|
or
at such other address and to the attention to such other person as
Seller and/or Administrators may designate by written notice to Manager.
|
Notices
to Manager shall be addressed to:
|
|
|
Capital
Growth Acquisition, Inc.
000
X. Xxxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxxx 00000
Fax:
000-000-0000
E-Mail:
xxxxxx@xxxxxxxxxxxxxx.xxx;
Attn.:
Xxxxxxx Xxxxx, CEO
|
|
-8-
|
With
a copy to:
|
|
|
Xxxxxxx
&
Xxxxxxxx
Ltd.
000
X. Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxxx 00000
Fax:
000-000-0000
E-Mail:
xxxxxxxxxx@xxxxxxxxxx.xxx;
Attn.:
Xxxxxxxx X. Xxxxxxxxx,
Esq.
|
|
or
at such other address and to the attention of such other person as
Manager may designate by written notice to Seller and Administrators.
Section
7.4 Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns but neither
this
Agreement nor any of the rights, interests or obligations hereunder shall
be
assigned by any party hereto, including by operation of law, without the
prior
written consent of the other party; provided however, that Vanco’s consent to a
request by Manager to assign this Agreement to a special purpose acquisition
company shall not be unreasonably withheld so long as Manager provides assurance
that such special purpose vehicle is financially qualified to undertake
Manager’s responsibilities under this Agreement, which assurance may include, at
Vanco’s request, a guarantee by the parent company of the special purpose
vehicle. Any assignment of this Agreement or any of the rights, interests
or
obligations hereunder in contravention of this Section 7.4 shall be null
and
void ab initio.
Section
7.5 No Third-Party Beneficiaries; Limitation of
Liability. Nothing in this Agreement shall be construed as giving any person
other than the Parties hereto any legal or equitable right, remedy or claim
under or with respect to this Agreement.
Section
7.6 Invalidity. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any
rule of
law or public policy all other terms, the conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any Party.
Section
7.7 Governing Law and Binding Effect. This
Agreement shall be governed by and construed and enforced in accordance with
the
internal laws of the State of Delaware applicable to contracts made and to
be
performed entirely therein without giving effect to the conflicts of laws
principles thereof. This Agreement shall also be governed
by and construed and enforced in accordance with applicable federal law.
This Agreement shall bind and inure to the benefit of
each of the Parties and their permitted successors and assigns.
Section
7.8 Counterparts. This Agreement may be executed
in counterparts each of which shall be deemed an original and all of which
together shall constitute one and the same instrument; and, in pleading or
proving any provision of this Agreement, it shall not be necessary to produce
more than one counterpart. Delivery of an executed counterpart of a signature
page to this Agreement by telecopy shall be as effective as delivery of a
manually executed counterpart of this Agreement. In proving this Agreement,
it
shall not be necessary to produce or account for more than one such counterpart
signed by the party against whom enforcement is sought.
-9-
Section
7.9 Entire Agreement; Amendments and Waivers.
This Agreement, together with the Purchase Agreement (including the schedules
and exhibits thereto) constitute the entire agreement between the parties
pertaining to the subject matter hereof and supersede all prior agreements,
understandings, negotiations, and discussions, whether oral or written, of
the
Parties. No supplement, modification or waiver of this Agreement shall be
binding unless the same is executed in writing by all parties. No waiver
of any
of the provisions of this Agreement shall be deemed or shall constitute a
waiver
of any other provision hereof (whether or not similar), and no such waiver
shall
constitute a continuing waiver unless otherwise expressly provided.
Section
7.11 Headings. The headings of the Articles and
Sections herein are inserted for convenience of reference only and are not
intended to be a part of, or to affect the meaning or interpretation of,
this
Agreement. Whenever used herein the singular number shall include the plural,
the plural shall include the singular, and the use of any gender shall include
all genders.
Section
7.12 Remedies. Vanco and Manager hereby
acknowledge and agree that money damages may not be an adequate remedy for
any
breach or threatened breach of any of the provisions of this Agreement and
that,
in such event, Vanco or its successors or assigns, or Manager or its successors
or assigns, as the case may be, may, in addition to any other rights and
remedies existing in their favor, apply to the courts for specific performance,
injunctive and/or other relief, without the necessity of posting bond, in
order
to enforce or prevent any violations of this Agreement.
Section
7.13 No Partnership or Joint Venture Created.
Each Party shall be an independent contractor of the other Parties and nothing
herein shall be construed as creating any other relationship among the Parties.
The relationship established by this Agreement will not be construed to create
a
partnership, joint venture, or any other form of legal entity, nor establish
any
fiduciary relationship among the Parties or any affiliate of any Party. The
provision of the services described in this Agreement does not establish
any
joint undertaking, joint venture, pooling arrangement, partnership, fiduciary
relationship or formal business organization of any kind. Except as provided
in
this Agreement, no Party shall act as or hold itself out as agent for any
other
Party or create or attempt to create liabilities for any other Party.
Section
7.14 Confidentiality. Administrators, Vanco and
Manager, and their respective officers, directors, partners and affiliates,
agree to keep the terms and conditions of this Agreement and the transactions
contemplated hereby confidential, and each agree not to disclose to any party
not a party to this Agreement any of the terms hereof, except where such
disclosure is: (i) to its professional advisers; (ii) current and
prospective financing sources and their advisors; or (iii) is required by
applicable law or the rules or standards of the United States Securities
&
Exchange Commission, the London Stock Exchange or the Listing Rules of the
UK
Listing Authority, or the rules and requirements of any other competent
regulatory body, which determination may be made in the good faith opinion
of
counsel to the Party that is subject to the regulatory body in question.
Manager
expressly acknowledges that it has received, and will receive in the future,
Confidential Materials (as hereinafter defined), and that disclosure of such
Confidential Materials to parties not a party to this Agreement or otherwise
permitted hereunder would cause irreparable harm to Vanco or
Administrators. Except with the prior written consent of Vanco or Administrators
or as required by law (including as set forth in clause (iii) immediately
above), neither Manager nor its officers, directors, partners or affiliates,
shall (i) disclose any Confidential Materials to any party not a party to
this
Agreement, or (ii) use any Confidential Materials for any purpose except
in
connection with their efforts on behalf of Vanco or Administrators. Manager
and
its officers, directors, partners and affiliates shall use their reasonable
best
efforts to preserve the confidentiality of all Confidential Materials. In
the
event that a party concludes that it is legally obligated to disclose any
provision of this Agreement or any Confidential Materials, such party shall
provide the other party with prompt written notice, and shall seek to limit
the
dissemination of such Confidential Materials subject to the requirement for
dissemination as may be required in the good faith opinion of its counsel
as it
relates to disclosure to meet regulatory body approval. In the case of legal
proceedings in which such disclosure is required, the parties shall cooperate
to
obtain an appropriate protective order limiting the disclosure of such material.
The parties acknowledge that they may be required to disclose certain terms
of
this Agreement, or the entirety hereof, to the FCC or certain State Commissions
in connection with applying for the Regulatory Approvals or in filings with
the
SEC. Notwithstanding the foregoing, Administrators may disclose details of
this
Agreement to their appointors, advisers and any liquidator of Vanco and also
for
the purpose of enforcing its terms, or if required to do so by any court.
They
may also include appropriate details in their administration records, accounts
and returns.
-10-
Notwithstanding
the foregoing, Vanco or Administrators may disclose
the amount of the Purchase Price to any third party if, in the sole and absolute
discretion of Seller or Administrators, such disclosure is necessary to enable
Vanco and/or Administrators to fulfill its/their obligations under the terms
of
any contract or arrangement with such third party.
7.15 Events
of Default, Remedies.
(a)
Manager
shall be in default under this Agreement upon the
occurrence of any of the following events (regardless whether any such event
is
voluntary or involuntary or occurs by operation of law or pursuant to any
judgment, decree, order, rule or regulation of any court or administrative
or
governmental body):
|
i.
|
the
failure of Manager to perform its obligations hereunder or
to observe in any material respect any covenant or agreement to
be
performed or observed by it hereunder and the continuation of such
failure
for a period of thirty days after Manager receives written notice
thereof;
|
|
ii.
|
Manager
loses the requisite authority to perform its
obligations hereunder if (1) the loss is not
remedied within sixty (60) days of the loss thereof and
(2) the loss has a material adverse effect upon
Vanco, VDUL or Administrators; or
|
-11-
|
iii.
|
any
of the representations or warranties of Manager contained
herein shall cease to be true in any material
respect.
|
(b) Upon
the occurrence and during the continuance of any event
of default and expiration of any related cure period, Vanco and/or the
Administrators may, at their option, terminate this Agreement by written
notice,
which shall be effective immediately (subject to the obligation to provide
prior
notice of default if the default was the type that was susceptible of a cure).
This remedy is not intended to be exclusive, and all remedies shall be
cumulative and may be exercised concurrently with any other remedy available
to
a Party at law or in equity.
7.16 Indemnification;
Limitation of Liability.
(a) Manager
hereby agrees to defend, indemnify and hold harmless
Vanco, Administrators and their respective officers, directors, managers,
members, employees, agents, attorneys and affiliates, as well as the managers
and officers of VDUL, from and against, and to promptly pay, all damages
asserted against or incurred by reason of or resulting from any action,
proceeding, claim or demand of any kind (actual or contingent) that may be
brought or made against Vanco, the Administrators and/or the managers or
officers of VDUL, and any loss, damage, award, cost, charge, penalty or expense
incurred by Vanco, the Administrators and/or the managers or officers of
VDUL as
a result of Manager’s management of VDUL and the VDUL Systems hereunder. IN NO
EVENT SHALL VANCO BE LIABLE, WHETHER IN CONTRACT, TORT (INCLUDING BUT NOT
LIMITED TO LIABILITY FOR NEGLIGENCE), MISREPRESENTATION, WARRANTY OR ANY
OTHER
LEGAL OR EQUITABLE GROUNDS, FOR SPECIAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE
DAMAGES AS A RESULT OF THE PERFORMANCE OR NON-PERFORMANCE OF ITS OBLIGATIONS
UNDER THIS AGREEMENT.
(b) For
purposes of the indemnifications, defense, hold harmless
and other limitations of liability set forth in this section, the officers,
managers, members, employees, agents, attorneys and affiliates of VDUL as
of the
MSA Effective Date shall be considered third party beneficiaries of this
Agreement.
7.17 Force
Majeure. No Party shall be liable to another
Party for any failure of performance under this Agreement due to causes beyond
its control, including fire, flood or other catastrophes; any law, order,
regulation, direction, action, or request of the United States Government,
or of
any other government, including state and local governments having or claiming
jurisdiction over such party, or of any department, agency, commission, bureau,
corporation or other instrumentality of any one or more of these federal,
state
or local governments, or of any civil or military authority; national
emergencies; unavailability of materials or rights-of-way; insurrections;
riots;
wars; or strikes, lock-outs, significant work stoppages or other significant
labor difficulties. In the event of any delay resulting from such causes,
upon
notice to the other parties promptly following the occurrence of the event
giving rise to the delay, the time for performance hereunder shall be extended
for a period of time reasonably necessary to overcome the effects of such
delay.
-12-
7.18 Disclaimers.
THERE ARE NO AGREEMENTS, WARRANTIES OR
REPRESENTATIONS, EXPRESS OR IMPLIED EITHER IN FACT OR BY OPERATION OF LAW,
STATUTORY OR OTHERWISE, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR
A PARTICULAR PURPOSE OR USE, EXCEPT THOSE EXPRESSLY SET FORTH HEREIN AND
ALL
OTHER WARRANTIES ARE DISCLAIMED TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW.
7.19 Severability.
If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule
of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any
manner
adverse to any Party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the Parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the Parties as closely as possible in an acceptable manner to the
end
that transactions contemplated hereby are fulfilled to the greatest extent
possible.
7.20 Further
Assurances. Each Party agrees to execute all
such further instruments and documents and to take all such further actions
as
any other Party may reasonably request in order to effectuate the terms and
purposes of this Agreement; provided preparation of any such instruments
and
documents and any such further actions shall be at Manager’s expense.
7.21 Manager’s
Risk. Failure to obtain any requisite
license, consent, permit, registration, right or Regulatory Approval shall
not
prejudice this Agreement, the Purchase Agreement or, in particular, the Purchase
Price payable under the Purchase Agreement. Manager shall solely and exclusively
bear all risks associated with not obtaining any or all of the Regulatory
Approvals.
7.22 Exclusion
of Liability.
(a) All
conditions, representations (including pre-contractual
negligent and innocent misrepresentations) and warranties express or implied,
and whether statutory or otherwise, relating to VDUL are expressly excluded.
In
particular, but without limitation, all representations and warranties as
to
title, quiet possession, enjoyment, quality, condition, state or description
of
VDUL or their fitness or suitability for any purpose whatsoever or whether
the
Regulatory Approvals or any of them will be forthcoming are expressly
excluded.
-13-
(b) Any
claim of Manager, or of any person claiming through it,
against Vanco or the Administrators shall take effect as an unsecured claim
and
not as an administration expense.
(c) The
exclusions of liability in this Agreement shall:
|
(i)
|
arise
and continue notwithstanding the termination of
Administrators' agency before or after the signing of this Agreement
and
shall operate as waivers of any claims in tort as well as under
the law of
contract;
|
|
(ii)
|
be
in addition to and not in substitution for and
notwithstanding any right of indemnity or relief otherwise
available;
|
|
(iii)
|
continue
after termination
hereof.
|
(d) Nothing
in this Agreement shall operate to restrict or
affect in any way any right of Administrators to be indemnified, or to exercise
a lien howsoever.
(e) In
the absence of an express provision to the contrary,
nothing in this Agreement shall require Vanco or Administrators to carry
out or
continue to carry out any arrangement or contract, whether single or of
continuing effect, with third parties and whether in relation to VDUL or
otherwise.
(f) Any
claim against Vanco and/or against Administrators (or
their firm, partners, employees, agents, advisers or representatives) related
to
this Agreement shall in any event and in addition to the exclusions of liability
contained in this Agreement, be irrevocably waived by Manager unless made
in
writing by notice to Administrators within 30 days after the Closing Date.
(g) The
exclusions and limitations contained in this Agreement
shall not apply in the case of any fraudulent misrepresentation made by Seller
or Administrators or their respective agents or insofar as any action against
any of them is based upon the fraud of Seller or Administrators or their
respective agents.
(h) Administrators
are party to this Agreement solely to obtain
the benefit of the exclusions and limitations on liability and undertakings
in
their favor.
7.23 Exclusion
of Personal Liability.
(a) Administrators
are agents of Seller and have been acting in
that capacity in the negotiation, preparation and implementation of this
Agreement.
(b) Neither
Administrators nor their firm, staff, employees,
advisers and agents shall incur personal liability under this Agreement or
any
other deed, instrument or document entered into pursuant to it and any liability
to which Administrators or their staff, employees, advisers and agents would
otherwise be subject (whether in contract, tort or otherwise) is expressly
excluded.
-14-
(c) Any
right under this Agreement which is for the benefit of
Administrators (and in particular, without prejudice to the generality of
the
foregoing, any right to be indemnified by Manager and the rights granted
hereunder and all rights to receive any payment from Manager) shall also
be for
the benefit of, and shall be exercisable by, any subsequent administrator,
liquidator or other insolvency practitioner (a "Subsequent Appointee") appointed
in respect of Seller and so that, as regards such Subsequent Appointee, the
relevant clause shall apply mutatis mutandis so that references to
Administrators shall be treated as references to such Subsequent
Appointee.
[SIGNATURES
APPEAR ON THE FOLLOWING PAGE]
-15-
IN
WITNESS WHEREOF, the parties have caused this
Agreement to be executed and delivered as of the date first above written.
|
“Vanco”
|
||
|
Vanco
plc (in administration) represented by one of its
Administrators
(acting
as agent for and on behalf of Vanco without personal
liability)
|
||
|
By:
|
____________________________________
|
|
|
Name:
|
Xxxxx
Xxxxxxx
|
|
|
Title:
|
Administrator
|
|
|
“Administrators”
|
||
|
On
behalf of the Administrators (without personal
liability)
|
||
|
By:
|
____________________________________
|
|
|
Name:
|
Xxxxx
Xxxxxxx
|
|
|
Title:
|
Administrator
|
|
|
“Manager”
|
||
|
Capital
Growth Acquisition, Inc.
|
||
|
By:
|
____________________________________
|
|
|
Name:
|
Xxxxxxx
X. Xxxxx
|
|
|
Title:
|
CEO
|
|
-16-
