Termination Payment. (a) If this Agreement is terminated: (i) by Parent pursuant to Section 10.01(c)(i) or (ii) by the Company pursuant to Section 10.01(d)(iii), then the Company shall pay to Parent (or its designee), in cash and by way of compensation, a payment in an amount equal to $1,180,000,000 (the “Company Termination Payment”) at or prior to, and as a condition to the effectiveness of, the termination of this Agreement in the case of a termination pursuant to Section 10.01(d)(iii) or as promptly as practicable (and, in any event, within two Business Days following such termination) in the case of a termination pursuant to Section 10.01(c)(i). (b) If (i) this Agreement is terminated by Parent or Company pursuant to Section 10.01(b)(iii), (ii) prior to such termination and after the date of this Agreement, a Company Acquisition Proposal shall have been publicly announced or publicly made known and shall not have been publicly withdrawn at least four Business Days prior to the Company Stockholder Meeting and (iii) on or prior to the twelve-month anniversary of such termination of this Agreement: (A) a transaction constituting a Company Acquisition Proposal is consummated; or (B) a definitive agreement relating to a Company Acquisition Proposal is entered into by the Company or any of its Affiliates (in each case, whether or not such Company Acquisition Proposal is the same as the original Company Acquisition Proposal publicly made known or publicly announced), then, the Company shall pay to Parent (or its designee) by way of compensation the Company Termination Payment no later than the consummation of such Company Acquisition Proposal; provided, that if the Company shall have actually paid the Company No Vote Payment pursuant to Section 10.03(e), then only the incremental amount between the Company No Vote Payment and the Company Termination Payment shall be payable. “Company Acquisition Proposal” for purposes of this Section 10.03(b) shall have the meaning assigned thereto in the definition thereof set forth in Section 1.01, except that references in the definition to “20%” shall be replaced by “50%”. (c) If this Agreement is terminated by the Company pursuant to Section 10.01(d)(i), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to $1,415,000,000 (the “Parent Termination Payment”), subject to any adjustment in accordance with Section 10.03(i). (d) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iv), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to the Parent Termination Payment; provided, that such amount shall be payable only if either (i) the Company Stockholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iii) has not been satisfied at the time of such termination, (B) the Company has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iv). (e) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iii), the Company shall pay to Parent (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement, a payment in an amount equal to $270,000,000 (the “Company No Vote Payment”); provided, that such amount shall be payable only if either (i) the Parent Shareholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iv) has not been satisfied at the time of such termination, (B) Parent has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iii). (f) Any payment of the Company Termination Payment or the Company No Vote Payment (each, a “Company Payment”) or the Parent Termination Payment shall be made by wire transfer of immediately available funds to an account designated in writing by Parent or the Company, as applicable. Any Company Payment or Parent Termination Payment shall be made free and clear of and without deduction or withholding of any Taxes; provided: (i) in the case of the Company Payment, Parent has supplied the Company with a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to the payment of the Company Payment; (ii) in the case of the Company Payment, in the event that deductions or withholdings on account of U.S. federal income Taxes should have been made under applicable law, then Parent shall bear the cost of such Taxes; (iii) in the case of the Parent Termination Payment, in the event that deductions or withholdings on account of UK income Tax should have been made under applicable law, then the Company shall bear the cost of such Taxes; and (iv) in the case of the Parent Termination Payment, Parent may deduct or withhold any amounts in respect of VAT required or permitted to be withheld in accordance with the following provisions of this Section 10.03. (g) The parties agree and understand that (x) in no event shall the Company be required to pay the Company Termination Payment on more than one occasion or the Company No Vote Payment on more than one occasion, in each case under any circumstances, and the Company No Vote Payment shall be credited toward any subsequent payment of the Company Termination Payment, and in no event shall Parent be required to pay the Parent Termination Payment on more than one occasion under any circumstances, and (y) except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, in no event shall Parent be entitled, pursuant to this Section 10.03, to receive an amount greater than the Company Termination Payment and Company No Vote Payment, as applicable (subject to the understanding that the Company No Vote Payment is set off against the Company Termination Payment when the payment of the Company Termination Payment follows the payment of the Company No Vote Payment under Section 10.03(e)), and any applicable additional amounts pursuant to the last two sentences of this Section 10.03(g) (such additional amounts, collectively, the “Parent Additional Amounts”), and in no event shall the Company be entitled, pursuant to this Section 10.03, to receive an amount greater than the Parent Termination Payment and any applicable additional amounts pursuant to Section 6.03(c) and/or the last two sentences of this Section 10.3(g) (such additional amounts, collectively, the “Company Additional Amounts”). Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, (i) if Parent receives a Company Payment and any applicable Parent Additional Amounts from the Company pursuant to this Section 10.03, or if the Company receives the Parent Termination Payment and any applicable Company Additional Amounts from Parent pursuant to this Section 10.03, such payment shall be the sole and exclusive remedy of the receiving party against the paying party and its Subsidiaries and their respective former, current or future partners, equityholders, managers, members, Affiliates and Representatives, and none of the paying party, any of its Subsidiaries or any of their respective former, current or future partners, equityholders, managers, members, Affiliates or Representatives shall have any further liability or obligation, in each case relating to or arising out of this Agreement or the transactions contemplated hereby and (ii) if (A) Parent, Bidco or either Merger Sub receives any payments from the Company in respect of any breach of this Agreement and thereafter Parent receives a Company Payment pursuant to this Section 10.03 or (B) the Company receives any payments from Parent, Bidco or either Merger Sub in respect of any breach of this Agreement and thereafter the Company receives the Parent Termination Payment, the amount of such Company Termination Payment or such Parent Termination Payment, as applicable, shall be reduced by the aggregate amount of such payments made by the party paying the Company Payment or the Parent Termination Payment, as applicable, in respect of any such breaches (in each case, after taking into account any Parent Additional Amounts or Company Additional Amounts, as applicable). The parties acknowledge that the agreements contained in this Section 10.03 are an integral part of the transactions contemplated hereby, that, without these agreements, the parties would not enter into this Agreement and that any amounts payable pursuant to this Section 10.03 do not constitute a penalty. Accordingly, if any party fails to promptly pay any Company Payment or the Parent Termination Payment due pursuant to this Section 10.03, such party shall also pay any out-of-pocket costs and expenses (together with any irrecoverable VAT incurred thereon, and including reasonable legal fees and expenses) incurred by the party entitled to such payment in connection with a legal action to enforce this Agreement that results in a judgment for such amount against the party failing to promptly pay such amount. Any Company Payment or Parent Termination Payment not paid when due pursuant to this Section 10.03 shall bear interest from the date such amount is due until the date paid at a rate equal to the prime rate as published in The Wall Street Journal, Eastern Edition in effect on the date of such payment. (h) The Parent Termination Payment and the Company Termination Payment (in each case if any) shall be VAT inclusive. (i) The parties hereto intend that any payment of a Parent Termination Payment, being compensatory in nature, shall not be treated (in whole or in part) as consideration for a supply for the purposes of VAT and, accordingly, Parent shall: (i) file its relevant VAT return on the basis that the payment of any such Parent Termination Payment falls outside the scope of VAT; and (ii) pay the full amount of any such Parent Termination Payment free and clear of any deduction or adjustment on account of VAT, it being understood and agreed that if it is finally determined that the Parent Termination Payment is (in whole or in part) consideration for a supply for the purposes of VAT then: (A) Parent shall (1) subject to having received the relevant amount from the Company as provided in sub-clause (C) below, promptly account for and pay to HMRC such VAT together with any associated interest and penalties; and (2) use its reasonable best efforts to recover (by refund, credit or otherwise) any such VAT at the residual recovery rate generally applied by Parent in respect of input VAT incurred on its overheads from time to time; (B) the amount of the Parent Termination Payment payable by Parent shall be reduced so that the sum of (1) the Parent Termination Payment (as so reduced) and (2) any VAT reverse charge thereon that Parent certifies acting in good faith that it is not entitled to recover (by way of credit or repayment) as input tax (together with any related interest or penalties in respect of such VAT reverse charge but excluding any interest or penalties arising as a result of the unreasonable delay or default of Parent), is equal to the amount of the Parent Termination Payment that would be payable but for this subclause (B) (the amount of such reduction being the “Adjustment Amount”); and (C) the Company covenants to pay to Parent on written demand and on an after-Tax basis an amount equal to the Adjustment Amount save to the extent that such Adjustment Amount has previously been adjusted by way of refund of such part of the Parent Termination Payment, the due date for payment of which shall be five Business Days after the date such written demand is received by the Company. This section 10.03(i) is subject to the provisions of Section 10.03(i) of the Company Disclosure Schedule. (j) Any reference in Section 10.03(i) or Section 10.03(i) of the Company Disclosure Schedule to Parent shall where applicable be regarded as referring to the representative member of any VAT group of which Parent is a member, and “finally determined” shall mean determined by HMRC or, if such determination is appealed, a court or tribunal in a decision or judgment in respect of which no right of appeal exists (or in relation to which any periods for appeal have expired) or, whether or not such determination is appealed, as provided in a binding agreement made with HMRC. (k) The parties anticipate that any Company Payment shall be outside the scope of UK VAT and not otherwise subject to VAT. (l) For the purposes of Section 10.03(i)(ii)(C), and Section 10.03(i) of the Company Disclosure Schedule, a covenant or indemnity being given on an “after-Tax basis” means that the amount payable (the “Payment”) pursuant to such covenant or indemnity (as applicable) shall be calculated in such a manner as will ensure that, after taking into account: (A) any Tax required to be deducted or withheld from the Payment (save to the extent that Parent has not provided a W-8BEN-E when it was entitled to do so, and provision of a W-8BEN-E would have prevented such deduction or withholding being required) and any additional amounts required to be paid by the payer of the Payment in consequence of such withholding; (B) the amount and timing of any additional Tax which becomes (or would become, but for the use of any credit or other relief which would otherwise have been available to reduce the Tax liabilities of any member of the recipient’s Group) payable by the recipient of the Payment as a result of the Payment’s being chargeable to Tax in the hands of that person; and (C) the amount and timing of any Tax benefit which is obtained by the recipient of the Payment (or any member of the recipient’s Group) to the extent that such Tax benefit is attributable to the matter giving rise to the obligation to make the Payment or the receipt of the Payment, the recipient of the Payment is in the same position as that in which it would have been if the matter giving rise to the obligation to make a Payment under this Section 10.03(l) had not occurred, provided that if any party to this Agreement shall have assigned or novated the benefit of this Agreement in whole or in part or shall, after the date of this Agreement, have changed its Tax residence or the permanent establishment to which the rights under this Agreement are allocated then no Payment to that party shall be increased by reason of the operation of clauses (A) through (C) (inclusive) to any greater extent than would have been the case had no such assignment, novation or change taken place. In this Section 10.03(l), references to “Tax” shall exclude “VAT” and references to a “W-8BEN-E” shall mean a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such Payment. (m) None of the Financing Sources shall have any liability to the Company, any of its Subsidiaries or any Person that is an Affiliate of the Company prior to giving effect to the Mergers relating to or arising out of this Agreement or the Debt Financing, whether at law, or equity, in contract, in tort or otherwise, and neither the Company nor any Person that is an Affiliate of the Company prior to giving effect to the Mergers shall have any rights or claims directly against any of the Financing Sources hereunder or thereunder. The foregoing shall not impair, supplement, or otherwise modify any of the commitments and other o
Appears in 3 contracts
Sources: Merger Agreement (Astrazeneca PLC), Merger Agreement (Alexion Pharmaceuticals, Inc.), Merger Agreement (Alexion Pharmaceuticals, Inc.)
Termination Payment. Any provision in this Agreement to the contrary notwithstanding,
(a) If this If, but only if, the Agreement is terminated: terminated by:
(i) by either Parent pursuant to Section 10.01(c)(i) or (ii) by the Company pursuant to Section 10.01(d)(iii), then 7.1(b)(i) and (A) an Acquisition Proposal has been made to the Company shall pay after the date hereof and prior to Parent (the Termination Date and has been publicly made or its designee), in cash and by way of compensation, a payment in an amount equal to $1,180,000,000 (the “Company Termination Payment”) at or prior topublicly disclosed, and as a condition to the effectiveness of, (B) within twelve (12) months of the termination of this Agreement Agreement, the Company (1) enters into a definitive agreement for the consummation of an Acquisition Proposal (regardless of when such Acquisition Proposal was initially made) and such Acquisition Proposal is subsequently consummated (regardless of whether such consummation occurs within the twelve (12) month period) or (2) consummates an Acquisition Proposal (regardless of when such Acquisition Proposal was initially made) (provided, however, that for purposes of this Section 7.3(a)(i), the references to “fifteen percent (15%)” in the case definition of a termination Acquisition Proposal shall be deemed to be references to “fifty percent (50%)”);
(ii) the Company pursuant to Section 10.01(d)(iii7.1(c)(ii); or
(iii) Parent pursuant to Section 7.1(d)(ii) or as promptly as practicable Section 7.1(d)(iii); then, the Company shall, (and, in any event, within two Business Days following such terminationA) in the case of a termination pursuant to Section 10.01(c)(i).
(b) If clause (i) this Agreement is terminated by Parent or above, no later than two (2) Business Days after the date on which the Company pursuant to Section 10.01(b)(iii)consummates such Acquisition Proposal, (B) in the case of clause (ii) prior to such termination above, concurrently with termination, and after (C) in the date case of this Agreement, a Company Acquisition Proposal shall have been publicly announced or publicly made known and shall not have been publicly withdrawn at least four Business Days prior to the Company Stockholder Meeting and clause (iii) on or prior to the twelve-month anniversary of such termination of this Agreement: (A) a transaction constituting a Company Acquisition Proposal is consummated; or (B) a definitive agreement relating to a Company Acquisition Proposal is entered into by the Company or any of its Affiliates (in each caseabove, whether or not such Company Acquisition Proposal is the same as the original Company Acquisition Proposal publicly made known or publicly announced), then, the Company shall pay to Parent (or its designee) by way of compensation the Company Termination Payment no later than the consummation of such Company Acquisition Proposal; provided, that if the Company shall have actually paid the Company No Vote Payment pursuant to Section 10.03(e), then only the incremental amount between the Company No Vote Payment and the Company Termination Payment shall be payable. “Company Acquisition Proposal” for purposes of this Section 10.03(btwo (2) shall have the meaning assigned thereto in the definition thereof set forth in Section 1.01, except that references in the definition to “20%” shall be replaced by “50%”.
(c) If this Agreement is terminated by the Company pursuant to Section 10.01(d)(i), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to $1,415,000,000 (the “Parent Termination Payment”), subject to any adjustment in accordance with Section 10.03(i).
(d) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iv), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to the Parent Termination Payment; provided, that such amount shall be payable only if either (i) the Company Stockholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iii) has not been satisfied at the time of such termination, (B) the Company has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iv).
(e) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iii), the Company shall pay to Parent (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement, a payment in an amount equal to $270,000,000 (the “Company No Vote Payment”); provided, that such amount shall be payable only if either (i) the Parent Shareholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iv) has not been satisfied at the time of such termination, (B) Parent has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iii).
(f) Any payment of the Company Termination Payment or the Company No Vote Payment (eachFee in cash, a “Company Payment”) or the Parent Termination Payment shall be made by wire transfer of immediately available funds to an account one or more accounts designated in writing by Parent or the Company, as applicable. Any Company Payment or Parent Termination Payment shall be made free and clear of and without deduction or withholding of any Taxes; provided:
(i) in the case of the Company Payment, Parent has supplied the Company with a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to the payment of the Company Payment;
(ii) in the case of the Company Payment, in the event that deductions or withholdings on account of U.S. federal income Taxes should have been made under applicable law, then Parent shall bear the cost of such Taxes;
(iii) in the case of the Parent Termination Payment, in the event that deductions or withholdings on account of UK income Tax should have been made under applicable law, then the Company shall bear the cost of such Taxes; and
(iv) in the case of the Parent Termination Payment, Parent may deduct or withhold any amounts in respect of VAT required or permitted to be withheld in accordance with the following provisions of this Section 10.03Parent.
(gb) The Notwithstanding anything to the contrary set forth in this Agreement, the parties agree and understand that (x) in no event shall the Company be required to pay the Company Termination Payment on more than one occasion or the Company No Vote Payment Fee on more than one occasion, in each case under any circumstances, and the Company No Vote Payment shall be credited toward any subsequent payment of the Company Termination Payment, and in no event shall Parent be required to pay the Parent Termination Payment on more than one occasion under any circumstances, and .
(yc) except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, in no event shall Parent be entitled, pursuant to this Section 10.03, to receive an amount greater than the Company Termination Payment and Company No Vote Payment, as applicable (subject to the understanding that the Company No Vote Payment is set off against the Company Termination Payment when the payment of the Company Termination Payment follows the payment of the Company No Vote Payment under Section 10.03(e)), and any applicable additional amounts pursuant to the last two sentences of this Section 10.03(g) (such additional amounts, collectively, the “Parent Additional Amounts”), and in no event shall the Company be entitled, pursuant to this Section 10.03, to receive an amount greater than the Parent Termination Payment and any applicable additional amounts pursuant to Section 6.03(c) and/or the last two sentences of this Section 10.3(g) (such additional amounts, collectively, the “Company Additional Amounts”). Notwithstanding anything to the contrary set forth in this Agreement, except in the case event of fraud or a Willful Breach of Section 5.4 by the other party Company and subject to Section 8.5 with respect to the enforcement of any covenant or agreement set forth in the provisions of this AgreementSection 7.3, (i) if Parent receives a Company Payment and any applicable Parent Additional Amounts Parent’s right to receive payment from the Company of the Company Termination Fee pursuant to this Section 10.03, or if the Company receives the Parent Termination Payment and any applicable Company Additional Amounts from Parent pursuant to this Section 10.03, such payment 7.3 shall be constitute the sole and exclusive remedy of the receiving party Parent and Merger Sub against the paying party Company and its Subsidiaries subsidiaries and their respective former, current or future partners, equityholders, managers, members, Affiliates and Representatives, and none of the paying party, any of its Subsidiaries or any of their respective former, current or future general or limited partners, equityholdersstockholders, members, managers, membersdirectors, Affiliates officers, employees, agents, affiliates or Representatives assignees (collectively, the “Company Specified Person”) for all losses and damages suffered as a result of the failure of the Transactions to be consummated or for a breach or failure to perform hereunder or otherwise, and upon payment of such amount, none of the Company Specified Persons shall have any further liability or obligation, in each case obligation relating to or arising out of this Agreement or the transactions contemplated hereby and Transactions.
(iid) if (A) Parent, Bidco or either Merger Sub receives any payments from the Company in respect of any breach of this Agreement and thereafter Parent receives a Company Payment pursuant to this Section 10.03 or (B) the Company receives any payments from Parent, Bidco or either Merger Sub in respect of any breach of this Agreement and thereafter the Company receives the Parent Termination Payment, the amount of such Company Termination Payment or such Parent Termination Payment, as applicable, shall be reduced by the aggregate amount of such payments made by the party paying the Company Payment or the Parent Termination Payment, as applicable, in respect of any such breaches (in each case, after taking into account any Parent Additional Amounts or Company Additional Amounts, as applicable). The parties acknowledge that the agreements contained in this Section 10.03 7.3 are an integral part of the transactions contemplated herebyby this Agreement, and that, without these agreements, the parties would not enter into this Agreement and that any amounts payable pursuant to this Section 10.03 do not constitute a penaltyAgreement. Accordingly, if any party If the Company fails to promptly timely pay any Company Payment or the Parent Termination Payment an amount due pursuant to this Section 10.037.3, such party the Company shall also pay any out-of-pocket costs and expenses (together with any irrecoverable VAT incurred thereon, and including reasonable legal fees and expenses) incurred by the party entitled to such payment in connection with a legal action to enforce this Agreement that results in a judgment for Parent interest on such amount against the party failing to promptly pay such amount. Any Company Payment or Parent Termination Payment not paid when due pursuant to this Section 10.03 shall bear interest from the date such amount is due until the date paid at a rate equal to the prime rate as published in The the Wall Street Journal, Eastern Edition Journal in effect on the date of such payment.
(h) The Parent Termination Payment and the Company Termination Payment (in each case if any) shall payment was required to be VAT inclusive.
(i) The parties hereto intend that any payment of a Parent Termination Payment, being compensatory in nature, shall not be treated (in whole or in part) as consideration for a supply for the purposes of VAT and, accordingly, Parent shall:
(i) file its relevant VAT return on the basis that the payment of any such Parent Termination Payment falls outside the scope of VAT; and
(ii) pay the full amount of any such Parent Termination Payment free and clear of any deduction or adjustment on account of VAT, it being understood and agreed that if it is finally determined that the Parent Termination Payment is (in whole or in part) consideration for a supply for the purposes of VAT then:
(A) Parent shall (1) subject to having received the relevant amount from the Company as provided in sub-clause (C) below, promptly account for and pay to HMRC such VAT together with any associated interest and penalties; and (2) use its reasonable best efforts to recover (by refund, credit or otherwise) any such VAT at the residual recovery rate generally applied by Parent in respect of input VAT incurred on its overheads from time to time;
(B) the amount of the Parent Termination Payment payable by Parent shall be reduced so that the sum of (1) the Parent Termination Payment (as so reduced) and (2) any VAT reverse charge thereon that Parent certifies acting in good faith that it is not entitled to recover (by way of credit or repayment) as input tax (together with any related interest or penalties in respect of such VAT reverse charge but excluding any interest or penalties arising as a result of the unreasonable delay or default of Parent), is equal to the amount of the Parent Termination Payment that would be payable but for this subclause (B) (the amount of such reduction being the “Adjustment Amount”); and
(C) the Company covenants to pay to Parent on written demand and on an after-Tax basis an amount equal to the Adjustment Amount save to the extent that such Adjustment Amount has previously been adjusted by way of refund of such part of the Parent Termination Payment, the due date for payment of which shall be five Business Days after made through the date such written demand is received by the Company. This section 10.03(i) is subject to the provisions of Section 10.03(i) of the Company Disclosure Schedulepayment was actually received.
(j) Any reference in Section 10.03(i) or Section 10.03(i) of the Company Disclosure Schedule to Parent shall where applicable be regarded as referring to the representative member of any VAT group of which Parent is a member, and “finally determined” shall mean determined by HMRC or, if such determination is appealed, a court or tribunal in a decision or judgment in respect of which no right of appeal exists (or in relation to which any periods for appeal have expired) or, whether or not such determination is appealed, as provided in a binding agreement made with HMRC.
(k) The parties anticipate that any Company Payment shall be outside the scope of UK VAT and not otherwise subject to VAT.
(l) For the purposes of Section 10.03(i)(ii)(C), and Section 10.03(i) of the Company Disclosure Schedule, a covenant or indemnity being given on an “after-Tax basis” means that the amount payable (the “Payment”) pursuant to such covenant or indemnity (as applicable) shall be calculated in such a manner as will ensure that, after taking into account: (A) any Tax required to be deducted or withheld from the Payment (save to the extent that Parent has not provided a W-8BEN-E when it was entitled to do so, and provision of a W-8BEN-E would have prevented such deduction or withholding being required) and any additional amounts required to be paid by the payer of the Payment in consequence of such withholding; (B) the amount and timing of any additional Tax which becomes (or would become, but for the use of any credit or other relief which would otherwise have been available to reduce the Tax liabilities of any member of the recipient’s Group) payable by the recipient of the Payment as a result of the Payment’s being chargeable to Tax in the hands of that person; and (C) the amount and timing of any Tax benefit which is obtained by the recipient of the Payment (or any member of the recipient’s Group) to the extent that such Tax benefit is attributable to the matter giving rise to the obligation to make the Payment or the receipt of the Payment, the recipient of the Payment is in the same position as that in which it would have been if the matter giving rise to the obligation to make a Payment under this Section 10.03(l) had not occurred, provided that if any party to this Agreement shall have assigned or novated the benefit of this Agreement in whole or in part or shall, after the date of this Agreement, have changed its Tax residence or the permanent establishment to which the rights under this Agreement are allocated then no Payment to that party shall be increased by reason of the operation of clauses (A) through (C) (inclusive) to any greater extent than would have been the case had no such assignment, novation or change taken place. In this Section 10.03(l), references to “Tax” shall exclude “VAT” and references to a “W-8BEN-E” shall mean a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such Payment.
(m) None of the Financing Sources shall have any liability to the Company, any of its Subsidiaries or any Person that is an Affiliate of the Company prior to giving effect to the Mergers relating to or arising out of this Agreement or the Debt Financing, whether at law, or equity, in contract, in tort or otherwise, and neither the Company nor any Person that is an Affiliate of the Company prior to giving effect to the Mergers shall have any rights or claims directly against any of the Financing Sources hereunder or thereunder. The foregoing shall not impair, supplement, or otherwise modify any of the commitments and other o
Appears in 2 contracts
Sources: Merger Agreement (MWI Veterinary Supply, Inc.), Merger Agreement (Amerisourcebergen Corp)
Termination Payment. (a) If this Agreement is terminated: (i) by Parent pursuant to Section 10.01(c)(i) or (ii) by the Company pursuant to Section 10.01(d)(iii), then the The Company shall pay to Parent the Termination Payment, by wire transfer of immediately available funds to an account or accounts designated in writing by Parent, in the event that:
(i) (A) this Agreement is terminated by Parent or its designeethe Company (1) pursuant to Section 10.1(b)(i) (End Date), (2) pursuant to Section 10.1(b)(iii) (Company Shareholder Approval) or (3) pursuant to Section 10.1(b)(iv) (Scheme of Arrangement), (B) following the execution and delivery of this Agreement and prior to the Company Shareholder Meetings, an Acquisition Proposal (whether or not conditional and whether or not withdrawn) shall have been publicly announced or shall have become publicly disclosed and (C) within twelve (12) months following such termination of this Agreement, (x) the Company enters into a definitive agreement with any third party with respect to an Acquisition Proposal or (y) an Acquisition Proposal is consummated, in cash and by way of compensation, a payment in an amount equal to $1,180,000,000 (which case the “Company Termination Payment”Payment shall be payable concurrently with the earlier of the Company’s entry into a definitive agreement with respect to and the consummation of such Acquisition Proposal;
(ii) this Agreement is terminated by Parent or the Company pursuant to Section 10.1(b)(iv) (Scheme of Arrangement), if the Company shall have communicated to the Court at the hearing to sanction the Scheme of Arrangement that the Company Board no longer supports the consummation of the Transaction or prior tono longer wishes the Court to sanction the Scheme of Arrangement, or that the Company Board favors or approves of any Acquisition Proposal, or shall have made any other statement or communication to the Court to the effect of any of the foregoing, in which case the Termination Payment shall be payable substantially concurrently with and as a condition to the effectiveness of, of the termination of this Agreement in the case of a termination pursuant to Section 10.01(d)(iii) by the Company or as promptly as practicable (and, in any event, within two (2) Business Days following such termination) in the case of a termination pursuant to Section 10.01(c)(i).by Parent;
(b) If (i) this Agreement is terminated by Parent or Company pursuant to Section 10.01(b)(iii), (ii) prior to such termination and after the date of this Agreement, a Company Acquisition Proposal shall have been publicly announced or publicly made known and shall not have been publicly withdrawn at least four Business Days prior to the Company Stockholder Meeting and (iii) on or prior to the twelve-month anniversary of such termination of this Agreement: (A) a transaction constituting a Company Acquisition Proposal is consummated; or (B) a definitive agreement relating to a Company Acquisition Proposal is entered into by the Company or any of its Affiliates (in each case, whether or not such Company Acquisition Proposal is the same as the original Company Acquisition Proposal publicly made known or publicly announced), then, the Company shall pay to Parent (or its designee) by way of compensation the Company Termination Payment no later than the consummation of such Company Acquisition Proposal; provided, that if the Company shall have actually paid the Company No Vote Payment pursuant to Section 10.03(e), then only the incremental amount between the Company No Vote Payment and the Company Termination Payment shall be payable. “Company Acquisition Proposal” for purposes of this Section 10.03(b) shall have the meaning assigned thereto in the definition thereof set forth in Section 1.01, except that references in the definition to “20%” shall be replaced by “50%”.
(c) If this Agreement is terminated by the Company pursuant to Section 10.01(d)(i), Parent shall pay to the Company Section 10.1(c)(ii) (or its designeeSuperior Proposal), in cash which case the Termination Payment shall be payable substantially concurrently with and by way of compensation within three Business Days after as a condition to the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date effectiveness of termination), a payment in an amount equal to $1,415,000,000 (the “Parent Termination Payment”), subject to any adjustment in accordance with Section 10.03(i).; or
(div) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iv), Parent shall pay to the Section 10.1(d)(ii) (Company (or its designeeBoard Recommendation Change), in cash and by way of compensation within three Business Days after which case the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to the Parent Termination Payment; provided, that such amount shall be payable only if either (i) the Company Stockholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iii) has not been satisfied at the time of such termination, (B) the Company has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iv).
(e) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iii), the Company shall pay to Parent (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement, a payment in an amount equal to $270,000,000 (the “Company No Vote Payment”); provided, that such amount shall be payable only if either (i) the Parent Shareholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iv) has not been satisfied at the time of such termination, (B) Parent has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iii).
(f) Any payment of the Company Termination Payment or the Company No Vote Payment (each, a “Company Payment”) or the Parent Termination Payment shall be made by wire transfer of immediately available funds to an account designated in writing by Parent or the Company, as applicable. Any Company Payment or Parent Termination Payment shall be made free and clear of and without deduction or withholding of any Taxes; provided:
(i) in the case of the Company Payment, Parent has supplied the Company with a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to the payment of the Company Payment;
(ii) in the case of the Company Payment, in the event that deductions or withholdings on account of U.S. federal income Taxes should have been made under applicable law, then Parent shall bear the cost of such Taxes;
(iii) in the case of the Parent Termination Payment, in the event that deductions or withholdings on account of UK income Tax should have been made under applicable law, then the Company shall bear the cost of such Taxes; and
(iv) in the case of the Parent Termination Payment, Parent may deduct or withhold any amounts in respect of VAT required or permitted to be withheld in accordance with the following provisions of this Section 10.03.
(g) The parties agree and understand that (x) in no event shall the Company be required to pay the Company Termination Payment on more than one occasion or the Company No Vote Payment on more than one occasion, in each case under any circumstances, and the Company No Vote Payment shall be credited toward any subsequent payment of the Company Termination Payment, and in no event shall Parent be required to pay the Parent Termination Payment on more than one occasion under any circumstances, and (y) except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, in no event shall Parent be entitled, pursuant to this Section 10.03, to receive an amount greater than the Company Termination Payment and Company No Vote Payment, as applicable (subject to the understanding that the Company No Vote Payment is set off against the Company Termination Payment when the payment of the Company Termination Payment follows the payment of the Company No Vote Payment under Section 10.03(e)), and any applicable additional amounts pursuant to the last payable within two sentences of this Section 10.03(g) (such additional amounts, collectively, the “Parent Additional Amounts”), and in no event shall the Company be entitled, pursuant to this Section 10.03, to receive an amount greater than the Parent Termination Payment and any applicable additional amounts pursuant to Section 6.03(c) and/or the last two sentences of this Section 10.3(g) (such additional amounts, collectively, the “Company Additional Amounts”). Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, (i) if Parent receives a Company Payment and any applicable Parent Additional Amounts from the Company pursuant to this Section 10.03, or if the Company receives the Parent Termination Payment and any applicable Company Additional Amounts from Parent pursuant to this Section 10.03, such payment shall be the sole and exclusive remedy of the receiving party against the paying party and its Subsidiaries and their respective former, current or future partners, equityholders, managers, members, Affiliates and Representatives, and none of the paying party, any of its Subsidiaries or any of their respective former, current or future partners, equityholders, managers, members, Affiliates or Representatives shall have any further liability or obligation, in each case relating to or arising out of this Agreement or the transactions contemplated hereby and (ii) if (A) Parent, Bidco or either Merger Sub receives any payments from the Company in respect of any breach of this Agreement and thereafter Parent receives a Company Payment pursuant to this Section 10.03 or (B) the Company receives any payments from Parent, Bidco or either Merger Sub in respect of any breach of this Agreement and thereafter the Company receives the Parent Termination Payment, the amount of such Company Termination Payment or such Parent Termination Payment, as applicable, shall be reduced by the aggregate amount of such payments made by the party paying the Company Payment or the Parent Termination Payment, as applicable, in respect of any such breaches (in each case, after taking into account any Parent Additional Amounts or Company Additional Amounts, as applicable). The parties acknowledge that the agreements contained in this Section 10.03 are an integral part of the transactions contemplated hereby, that, without these agreements, the parties would not enter into this Agreement and that any amounts payable pursuant to this Section 10.03 do not constitute a penalty. Accordingly, if any party fails to promptly pay any Company Payment or the Parent Termination Payment due pursuant to this Section 10.03, such party shall also pay any out-of-pocket costs and expenses (together with any irrecoverable VAT incurred thereon, and including reasonable legal fees and expenses) incurred by the party entitled to such payment in connection with a legal action to enforce this Agreement that results in a judgment for such amount against the party failing to promptly pay such amount. Any Company Payment or Parent Termination Payment not paid when due pursuant to this Section 10.03 shall bear interest from the date such amount is due until the date paid at a rate equal to the prime rate as published in The Wall Street Journal, Eastern Edition in effect on the date of such payment.
(h) The Parent Termination Payment and the Company Termination Payment (in each case if any) shall be VAT inclusive.
(i) The parties hereto intend that any payment of a Parent Termination Payment, being compensatory in nature, shall not be treated (in whole or in part) as consideration for a supply for the purposes of VAT and, accordingly, Parent shall:
(i) file its relevant VAT return on the basis that the payment of any such Parent Termination Payment falls outside the scope of VAT; and
(ii) pay the full amount of any such Parent Termination Payment free and clear of any deduction or adjustment on account of VAT, it being understood and agreed that if it is finally determined that the Parent Termination Payment is (in whole or in part) consideration for a supply for the purposes of VAT then:
(A) Parent shall (1) subject to having received the relevant amount from the Company as provided in sub-clause (C) below, promptly account for and pay to HMRC such VAT together with any associated interest and penalties; and (2) use its reasonable best efforts to recover (by refund, credit or otherwise) any such VAT at the residual recovery rate generally applied by Parent in respect of input VAT incurred on its overheads from time to time;
(B) the amount of the Parent Termination Payment payable by Parent shall be reduced so that the sum of (1) the Parent Termination Payment (as so reduced) and (2) any VAT reverse charge thereon that Parent certifies acting in good faith that it is not entitled to recover (by way of credit or repayment) as input tax (together with any related interest or penalties in respect of such VAT reverse charge but excluding any interest or penalties arising as a result of the unreasonable delay or default of Parent), is equal to the amount of the Parent Termination Payment that would be payable but for this subclause (B) (the amount of such reduction being the “Adjustment Amount”); and
(C) the Company covenants to pay to Parent on written demand and on an after-Tax basis an amount equal to the Adjustment Amount save to the extent that such Adjustment Amount has previously been adjusted by way of refund of such part of the Parent Termination Payment, the due date for payment of which shall be five Business Days after the date such written demand is received by the Companytermination. This section 10.03(i) is subject to the provisions of Section 10.03(i) For purposes of the Company Disclosure Schedule.
references to an “Acquisition Proposal” or an “Acquisition Transaction” in Section 10.3(c)(i), all references in the definition of “Acquisition Transaction” to “twenty percent (j) Any reference in Section 10.03(i) or Section 10.03(i) of the Company Disclosure Schedule to Parent shall where applicable be regarded as referring to the representative member of any VAT group of which Parent is a member, 20%)” and “finally determinedseventy-five percent (75%)” shall mean determined by HMRC or, if such determination is appealed, a court or tribunal in a decision or judgment in respect of which no right of appeal exists (or in relation to which any periods for appeal have expired) or, whether or not such determination is appealed, as provided in a binding agreement made with HMRC.
(k) The parties anticipate that any Company Payment shall each be outside the scope of UK VAT and not otherwise subject to VAT.
(l) For the purposes of Section 10.03(i)(ii)(C), and Section 10.03(i) of the Company Disclosure Schedule, a covenant or indemnity being given on an “after-Tax basis” means that the amount payable (the “Payment”) pursuant to such covenant or indemnity (as applicable) shall be calculated in such a manner as will ensure that, after taking into account: (A) any Tax required deemed to be deducted or withheld from the Payment (save to the extent that Parent has not provided a W-8BEN-E when it was entitled to do so, and provision of a W-8BEN-E would have prevented such deduction or withholding being required) and any additional amounts required to be paid by the payer of the Payment in consequence of such withholding; (B) the amount and timing of any additional Tax which becomes (or would become, but for the use of any credit or other relief which would otherwise have been available to reduce the Tax liabilities of any member of the recipient’s Group) payable by the recipient of the Payment as a result of the Payment’s being chargeable to Tax in the hands of that person; and (C) the amount and timing of any Tax benefit which is obtained by the recipient of the Payment (or any member of the recipient’s Group) to the extent that such Tax benefit is attributable to the matter giving rise to the obligation to make the Payment or the receipt of the Payment, the recipient of the Payment is in the same position as that in which it would have been if the matter giving rise to the obligation to make a Payment under this Section 10.03(l) had not occurred, provided that if any party to this Agreement shall have assigned or novated the benefit of this Agreement in whole or in part or shall, after the date of this Agreement, have changed its Tax residence or the permanent establishment to which the rights under this Agreement are allocated then no Payment to that party shall be increased by reason of the operation of clauses (A) through (C) (inclusive) to any greater extent than would have been the case had no such assignment, novation or change taken place. In this Section 10.03(l), references to “Tax” shall exclude “VAT” and references to a “W-8BEN-E” shall mean a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such Paymentfifty percent (50%).
(m) None of the Financing Sources shall have any liability to the Company, any of its Subsidiaries or any Person that is an Affiliate of the Company prior to giving effect to the Mergers relating to or arising out of this Agreement or the Debt Financing, whether at law, or equity, in contract, in tort or otherwise, and neither the Company nor any Person that is an Affiliate of the Company prior to giving effect to the Mergers shall have any rights or claims directly against any of the Financing Sources hereunder or thereunder. The foregoing shall not impair, supplement, or otherwise modify any of the commitments and other o”
Appears in 2 contracts
Sources: Transaction Agreement (Verona Pharma PLC), Transaction Agreement (Verona Pharma PLC)
Termination Payment. In the event of a Termination, as defined in ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ shall provide the Executive the following benefits:
(a) If this Agreement is terminated: (i) by Parent pursuant to Section 10.01(c)(i) or (ii) by the Company pursuant to Section 10.01(d)(iii), then the Company Saia shall pay to Parent (the Executive on or its designee)before the Executive’s last day of employment with the Corporation, in cash and by way of compensationas additional compensation for services rendered to the Corporation, a payment in an lump sum cash amount (subject to the minimum applicable federal, state or local lump sum withholding requirements, if any, unless the Executive requests that a greater amount be withheld) equal to $1,180,000,000 (two times the “Company Termination Payment”) at highest base salary and annual cash incentive bonuses paid or prior to, and as a condition payable to the effectiveness of, Executive by the termination Corporation with respect to any 12 consecutive month period during the three years ending with the date of this Agreement in the case of a termination pursuant to Section 10.01(d)(iii) or as promptly as practicable (and, in any event, within two Business Days following such termination) in the case of a termination pursuant to Section 10.01(c)(i)Executive’s Termination.
(b) If (i) this Agreement is terminated by Parent or Company pursuant to Section 10.01(b)(iii), (ii) prior to such termination and after During the date of this Agreement, a Company Acquisition Proposal shall have been publicly announced or publicly made known and shall not have been publicly withdrawn at least four Business Days prior to two years following the Company Stockholder Meeting and (iii) on or prior to the twelve-month anniversary of such termination of this Agreement: (A) a transaction constituting a Company Acquisition Proposal is consummated; or (B) a definitive agreement relating to a Company Acquisition Proposal is entered into by the Company or any of its Affiliates (in each case, whether or not such Company Acquisition Proposal is the same as the original Company Acquisition Proposal publicly made known or publicly announced), thenExecutive’s Termination, the Company shall pay to Parent (or its designee) by way of compensation the Company Termination Payment no later than the consummation of such Company Acquisition Proposal; provided, that if the Company shall have actually paid the Company No Vote Payment pursuant to Section 10.03(e), then only the incremental amount between the Company No Vote Payment and the Company Termination Payment Executive shall be payable. “Company Acquisition Proposal” deemed to remain an employee of the Corporation for purposes of this Section 10.03(b) the applicable medical, life insurance and long-term disability plans and programs covering key executives of the Corporation and shall have be entitled to receive the meaning assigned thereto benefits available to key executives thereunder, provided; however, that in the definition thereof set forth event the Executive’s participation in Section 1.01any such employee benefit plan or program is barred, except that references in the definition Corporation shall arrange to “20%” shall be replaced by “50%”provide the Executive with substantially similar benefits.
(c) If this Agreement is terminated by the Company pursuant to Section 10.01(d)(i), Parent The Executive shall pay be entitled to the Company (or its designee)Gross-Up Payment, if any, described in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to $1,415,000,000 (the “Parent Termination Payment”), subject to any adjustment in accordance with Section 10.03(i)Paragraph 6.
(d) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iv), Parent The Corporation shall pay to the Company (or its designee), Executive the Termination Payment set forth in cash this paragraph upon termination of the Executive’s employment following a Potential Change in Control but before a Change in Control and by way of compensation within three Business Days after during the date of termination term of this Agreement if: (i) the termination is initiated, caused or such other later date as directed by any person or group which has initiated a transaction, the Company has notified consummation of which would result in writing to Parent a Change of Control; and (ii) the termination would have been by the Executive for any of the reasons enumerated in paragraph 3(a)-3(d) or by the Corporation without Cause if a Change of Control had occurred on the date of termination), a payment the Potential Change in an amount equal to the Parent Termination Payment; provided, that such amount shall be payable only if either (i) the Company Stockholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iii) has not been satisfied at the time of such termination, (B) the Company has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iv)Control.
(e) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iii), the Company shall pay to Parent (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement, a payment in an amount equal to $270,000,000 (the “Company No Vote Payment”); provided, that such amount shall be payable only if either (i) the Parent Shareholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iv) has not been satisfied at the time of such termination, (B) Parent has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iii).
(f) Any payment of the Company Termination Payment or the Company No Vote Payment (each, a “Company Payment”) or the Parent Termination Payment shall be made by wire transfer of immediately available funds to an account designated in writing by Parent or the Company, as applicable. Any Company Payment or Parent Termination Payment shall be made free and clear of and without deduction or withholding of any Taxes; provided:
(i) in the case of the Company Payment, Parent has supplied the Company with a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to the payment of the Company Payment;
(ii) in the case of the Company Payment, in the event that deductions or withholdings on account of U.S. federal income Taxes should have been made under applicable law, then Parent shall bear the cost of such Taxes;
(iii) in the case of the Parent Termination Payment, in the event that deductions or withholdings on account of UK income Tax should have been made under applicable law, then the Company shall bear the cost of such Taxes; and
(iv) in the case of the Parent Termination Payment, Parent may deduct or withhold any amounts in respect of VAT required or permitted to be withheld in accordance with the following provisions of this Section 10.03.
(g) The parties agree and understand that (x) in no event shall the Company be required to pay the Company Termination Payment on more than one occasion or the Company No Vote Payment on more than one occasion, in each case under any circumstances, and the Company No Vote Payment shall be credited toward any subsequent payment of the Company Termination Payment, and in no event shall Parent be required to pay the Parent Termination Payment on more than one occasion under any circumstances, and (y) except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, in no event shall Parent be entitled, pursuant to this Section 10.03, to receive an amount greater than the Company Termination Payment and Company No Vote Payment, as applicable (subject to the understanding that the Company No Vote Payment is set off against the Company Termination Payment when the payment of the Company Termination Payment follows the payment of the Company No Vote Payment under Section 10.03(e)), and any applicable additional amounts pursuant to the last two sentences of this Section 10.03(g) (such additional amounts, collectively, the “Parent Additional Amounts”), and in no event shall the Company be entitled, pursuant to this Section 10.03, to receive an amount greater than the Parent Termination Payment and any applicable additional amounts pursuant to Section 6.03(c) and/or the last two sentences of this Section 10.3(g) (such additional amounts, collectively, the “Company Additional Amounts”). Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, (i) if Parent receives a Company Payment and any applicable Parent Additional Amounts from the Company pursuant to this Section 10.03, or if the Company receives the Parent Termination Payment and any applicable Company Additional Amounts from Parent pursuant to this Section 10.03, such payment shall be the sole and exclusive remedy of the receiving party against the paying party and its Subsidiaries and their respective former, current or future partners, equityholders, managers, members, Affiliates and Representatives, and none of the paying party, any of its Subsidiaries or any of their respective former, current or future partners, equityholders, managers, members, Affiliates or Representatives shall have any further liability or obligation, in each case relating to or arising out of this Agreement or the transactions contemplated hereby and (ii) if (A) Parent, Bidco or either Merger Sub receives any payments from the Company in respect of any breach of this Agreement and thereafter Parent receives a Company Payment pursuant to this Section 10.03 or (B) the Company receives any payments from Parent, Bidco or either Merger Sub in respect of any breach of this Agreement and thereafter the Company receives the Parent Termination Payment, the amount of such Company Termination Payment or such Parent Termination Payment, as applicable, shall be reduced by the aggregate amount of such payments made by the party paying the Company Payment or the Parent Termination Payment, as applicable, in respect of any such breaches (in each case, after taking into account any Parent Additional Amounts or Company Additional Amounts, as applicable). The parties acknowledge that the agreements contained in this Section 10.03 are an integral part of the transactions contemplated hereby, that, without these agreements, the parties would not enter into this Agreement and that any amounts payable pursuant to this Section 10.03 do not constitute a penalty. Accordingly, if any party fails to promptly pay any Company Payment or the Parent Termination Payment due pursuant to this Section 10.03, such party shall also pay any out-of-pocket costs and expenses (together with any irrecoverable VAT incurred thereon, and including reasonable legal fees and expenses) incurred by the party entitled to such payment in connection with a legal action to enforce this Agreement that results in a judgment for such amount against the party failing to promptly pay such amount. Any Company Payment or Parent Termination Payment not paid when due pursuant to this Section 10.03 shall bear interest from the date such amount is due until the date paid at a rate equal to the prime rate as published in The Wall Street Journal, Eastern Edition in effect on the date of such payment.
(h) The Parent Termination Payment and the Company Termination Payment (in each case if any) shall be VAT inclusive.
(i) The parties hereto intend that any payment of a Parent Termination Payment, being compensatory in nature, shall not be treated (in whole or in part) as consideration for a supply for the purposes of VAT and, accordingly, Parent shall:
(i) file its relevant VAT return on the basis that the payment of any such Parent Termination Payment falls outside the scope of VAT; and
(ii) pay the full amount of any such Parent Termination Payment free and clear of any deduction or adjustment on account of VAT, it being understood and agreed that if it is finally determined that the Parent Termination Payment is (in whole or in part) consideration for a supply for the purposes of VAT then:
(A) Parent shall (1) subject to having received the relevant amount from the Company as provided in sub-clause (C) below, promptly account for and pay to HMRC such VAT together with any associated interest and penalties; and (2) use its reasonable best efforts to recover (by refund, credit or otherwise) any such VAT at the residual recovery rate generally applied by Parent in respect of input VAT incurred on its overheads from time to time;
(B) the amount of the Parent Termination Payment payable by Parent shall be reduced so that the sum of (1) the Parent Termination Payment (as so reduced) and (2) any VAT reverse charge thereon that Parent certifies acting in good faith that it is not entitled to recover (by way of credit or repayment) as input tax (together with any related interest or penalties in respect of such VAT reverse charge but excluding any interest or penalties arising as a result of the unreasonable delay or default of Parent), is equal to the amount of the Parent Termination Payment that would be payable but for this subclause (B) (the amount of such reduction being the “Adjustment Amount”); and
(C) the Company covenants to pay to Parent on written demand and on an after-Tax basis an amount equal to the Adjustment Amount save to the extent that such Adjustment Amount has previously been adjusted by way of refund of such part of the Parent Termination Payment, the due date for payment of which shall be five Business Days after the date such written demand is received by the Company. This section 10.03(i) is subject to the provisions of Section 10.03(i) of the Company Disclosure Schedule.
(j) Any reference in Section 10.03(i) or Section 10.03(i) of the Company Disclosure Schedule to Parent shall where applicable be regarded as referring to the representative member of any VAT group of which Parent is a member, and “finally determined” shall mean determined by HMRC or, if such determination is appealed, a court or tribunal in a decision or judgment in respect of which no right of appeal exists (or in relation to which any periods for appeal have expired) or, whether or not such determination is appealed, as provided in a binding agreement made with HMRC.
(k) The parties anticipate that any Company Payment shall be outside the scope of UK VAT and not otherwise subject to VAT.
(l) For the purposes of Section 10.03(i)(ii)(C), and Section 10.03(i) of the Company Disclosure Schedule, a covenant or indemnity being given on an “after-Tax basis” means that the amount payable (the “Payment”) pursuant to such covenant or indemnity (as applicable) shall be calculated in such a manner as will ensure that, after taking into account: (A) any Tax required to be deducted or withheld from the Payment (save to the extent that Parent has not provided a W-8BEN-E when it was entitled to do so, and provision of a W-8BEN-E would have prevented such deduction or withholding being required) and any additional amounts required to be paid by the payer of the Payment in consequence of such withholding; (B) the amount and timing of any additional Tax which becomes (or would become, but for the use of any credit or other relief which would otherwise have been available to reduce the Tax liabilities of any member of the recipient’s Group) payable by the recipient of the Payment as a result of the Payment’s being chargeable to Tax in the hands of that person; and (C) the amount and timing of any Tax benefit which is obtained by the recipient of the Payment (or any member of the recipient’s Group) to the extent that such Tax benefit is attributable to the matter giving rise to the obligation to make the Payment or the receipt of the Payment, the recipient of the Payment is in the same position as that in which it would have been if the matter giving rise to the obligation to make a Payment under this Section 10.03(l) had not occurred, provided that if any party to this Agreement shall have assigned or novated the benefit of this Agreement in whole or in part or shall, after the date of this Agreement, have changed its Tax residence or the permanent establishment to which the rights under this Agreement are allocated then no Payment to that party shall be increased by reason of the operation of clauses (A) through (C) (inclusive) to any greater extent than would have been the case had no such assignment, novation or change taken place. In this Section 10.03(l), references to “Tax” shall exclude “VAT” and references to a “W-8BEN-E” shall mean a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such Payment.
(m) None of the Financing Sources shall have any liability to the Company, any of its Subsidiaries or any Person that is an Affiliate of the Company prior to giving effect to the Mergers relating to or arising out of this Agreement or the Debt Financing, whether at law, or equity, in contract, in tort or otherwise, and neither the Company nor any Person that is an Affiliate of the Company prior to giving effect to the Mergers shall have any rights or claims directly against any of the Financing Sources hereunder or thereunder. The foregoing shall not impair, supplement, or otherwise modify any of the commitments and other o
Appears in 2 contracts
Sources: Executive Severance Agreement (Saia Inc), Executive Severance Agreement (Saia Inc)
Termination Payment. Notwithstanding any provision in this Agreement to the contrary,
(a) If if this Agreement is terminated: automatically terminated because the Effective Time has not occurred prior to or on the Termination Date (i) and no breach by Parent of its obligations under this Agreement resulted in a failure of a condition precedent set forth in Article VI), or terminated by Parent pursuant to Section 10.01(c)(i7.1(g) due to a willful breach by the Company, and prior to the time of either such termination a Company Alternative Proposal shall have been made and is not (x) withdrawn at least twenty (20) days prior to such termination or (iiy) rejected affirmatively in writing by the Company pursuant (accompanied by a written request to Section 10.01(d)(iii)withdraw such Company Alternative Proposal) prior to such termination, and if concurrently with or within eighteen (18) months after such termination of this Agreement, the Company enters into a definitive agreement reflecting a Qualifying Transaction with any Person other than Parent or any of its Subsidiaries or a Qualifying Transaction shall have been consummated, then the Company shall pay to Parent (or its designee), in cash and by way of compensation, a payment in an amount equal to $1,180,000,000 (the “Company Termination Payment”) at or prior to, and as a condition to the effectiveness of, the termination of this Agreement in the case of a termination pursuant to Section 10.01(d)(iii) or as promptly as practicable (and, in any event, within two Business Days following (2) business days after such termination) in the case entry or consummation by wire transfer of a termination pursuant immediately-available funds to Section 10.01(c)(i).
(b) If (i) this Agreement is terminated an account previously specified by Parent or Company pursuant to Section 10.01(b)(iii), (ii) prior to such termination and after the date of this Agreement, a Company Acquisition Proposal shall have been publicly announced or publicly made known and shall not have been publicly withdrawn at least four Business Days prior to the Company Stockholder Meeting and (iii) on or prior to the twelve-month anniversary of such termination of this Agreement: (A) a transaction constituting a Company Acquisition Proposal is consummated; or (B) a definitive agreement relating to a Company Acquisition Proposal is entered into by the Company or any of its Affiliates (in each case, whether or not such Company Acquisition Proposal is the same as the original Company Acquisition Proposal publicly made known or publicly announced), then, the Company shall pay to Parent (or its designee) by way of compensation the Company Termination Payment no later than the consummation of such Company Acquisition Proposal; provided, that if the Company shall have actually paid the Company No Vote Payment pursuant to Section 10.03(e), then only the incremental amount between the Company No Vote Payment and the Company Termination Payment shall be payable. “Company Acquisition Proposal” for purposes of this Section 10.03(b) shall have the meaning assigned thereto in the definition thereof set forth in Section 1.01, except that references in the definition to “20%” shall be replaced by “50%”.
(c) If this Agreement is terminated by the Company pursuant to Section 10.01(d)(i), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to $1,415,000,000 (the “Parent Termination Payment”), subject to any adjustment in accordance with Section 10.03(i).
(d) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iv), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to the Parent Termination Payment (for purposes of this Agreement the term “Termination Payment; provided, that such amount ” shall be payable only if either (i) the Company Stockholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iii) has not been satisfied at the time of such termination, (B) the Company has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iv).
(e) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iii), the Company shall pay to Parent (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement, a payment in mean an amount equal to a termination fee in the amount of $270,000,000 (the “Company No Vote Payment”); provided5,000,000, provided that such amount shall be payable only if either (i) the Parent Shareholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iv) has not been satisfied at the time of such termination, (B) Parent has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iii).
(f) Any payment of the Company Termination Payment or the Company No Vote Payment (each, a “Company Payment”) or the Parent Termination Payment shall be made by wire transfer of immediately available funds to an account designated in writing by Parent or the Company, as applicable. Any Company Payment or Parent Termination Payment shall be made free and clear of and without deduction or withholding of any Taxes; provided:
(i) in the case of the Company Payment, Parent has supplied the Company with a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding underpreceding clause (y), the income tax treaty between the United States and the United Kingdom Termination Payment shall be payable despite such written rejection in writing if, prior to the payment date that is twenty (20) days following the date of such termination, the Company Payment;
(iitakes any action that would violate Section 5.3(a) in the case of the with respect to such Company Payment, in the event Alternative Proposal or any other proposal that deductions or withholdings on account of U.S. federal income Taxes should would have been made under applicable law, then Parent shall bear the cost of such Taxes;
(iii) in the case of the Parent Termination Payment, in the event that deductions or withholdings on account of UK income Tax should have been made under applicable law, then the Company shall bear the cost of such Taxes; and
(iv) in the case of the Parent Termination Payment, Parent may deduct or withhold any amounts in respect of VAT required or permitted to be withheld in accordance with the following provisions of this Section 10.03.
(g) The parties agree and understand that (x) in no event shall the Company be required to pay the Company Termination Payment on more than one occasion or the Company No Vote Payment on more than one occasion, in each case under any circumstances, and the Company No Vote Payment shall be credited toward any subsequent payment of the Company Termination Payment, and in no event shall Parent be required to pay the Parent Termination Payment on more than one occasion under any circumstances, and (y) except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, in no event shall Parent be entitled, pursuant to this Section 10.03, to receive an amount greater than the Company Termination Payment and Company No Vote Payment, as applicable (subject to the understanding that the Company No Vote Payment is set off against the Company Termination Payment when the payment of the Company Termination Payment follows the payment of the Company No Vote Payment under Section 10.03(e)), and any applicable additional amounts pursuant to the last two sentences of this Section 10.03(g) (such additional amounts, collectively, the “Parent Additional Amounts”), and in no event shall the Company be entitled, pursuant to this Section 10.03, to receive an amount greater than the Parent Termination Payment and any applicable additional amounts pursuant to Section 6.03(c) and/or the last two sentences of this Section 10.3(g) (such additional amounts, collectively, the “Company Additional Amounts”). Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, (i) if Parent receives constituted a Company Payment and any applicable Parent Additional Amounts Alternative Proposal is received from the Company pursuant to this Section 10.03, or if the Company receives the Parent Termination Payment and any applicable Company Additional Amounts from Parent pursuant to this Section 10.03, such payment shall be the sole and exclusive remedy of the receiving party against the paying party and its Subsidiaries and their respective former, current or future partners, equityholders, managers, members, Affiliates and Representatives, and none of the paying party, any of its Subsidiaries or any of their respective former, current or future partners, equityholders, managers, members, Affiliates or Representatives shall have any further liability or obligation, in each case relating to or arising out of this Agreement or the transactions contemplated hereby and (ii) if (A) Parent, Bidco or either Merger Sub receives any payments from the party making the original Company in respect of any breach of this Agreement and thereafter Parent receives a Company Payment pursuant to this Section 10.03 Alternative Proposal or (B) the Company receives any payments from Parent, Bidco or either Merger Sub in respect of any breach of this Agreement and thereafter the Company receives the Parent Termination Payment, the amount of such Company Termination Payment party’s Affiliates, directors, officers, employees, agents or such Parent Termination Payment, as applicable, shall be reduced by the aggregate amount of such payments made by the party paying the Company Payment or the Parent Termination Payment, as applicable, in respect of any such breaches (in each case, after taking into account any Parent Additional Amounts or Company Additional Amounts, as applicable). The parties acknowledge that the agreements contained in this Section 10.03 are an integral part of the transactions contemplated hereby, that, without these agreements, the parties would not enter into this Agreement and that any amounts payable pursuant to this Section 10.03 do not constitute a penalty. Accordingly, if any party fails to promptly pay any Company Payment or the Parent Termination Payment due pursuant to this Section 10.03, such party shall also pay any out-of-pocket costs and expenses (together with any irrecoverable VAT incurred thereon, and including reasonable legal fees and expenses) incurred by the party entitled to such payment in connection with a legal action to enforce this Agreement that results in a judgment for such amount against the party failing to promptly pay such amount. Any Company Payment or Parent Termination Payment not paid when due pursuant to this Section 10.03 shall bear interest from the date such amount is due until the date paid at a rate equal to the prime rate as published in The Wall Street Journal, Eastern Edition in effect on the date of such paymentrepresentatives.
(h) The Parent Termination Payment and the Company Termination Payment (in each case if any) shall be VAT inclusive.
(i) The parties hereto intend that any payment of a Parent Termination Payment, being compensatory in nature, shall not be treated (in whole or in part) as consideration for a supply for the purposes of VAT and, accordingly, Parent shall:
(i) file its relevant VAT return on the basis that the payment of any such Parent Termination Payment falls outside the scope of VAT; and
(ii) pay the full amount of any such Parent Termination Payment free and clear of any deduction or adjustment on account of VAT, it being understood and agreed that if it is finally determined that the Parent Termination Payment is (in whole or in part) consideration for a supply for the purposes of VAT then:
(A) Parent shall (1) subject to having received the relevant amount from the Company as provided in sub-clause (C) below, promptly account for and pay to HMRC such VAT together with any associated interest and penalties; and (2) use its reasonable best efforts to recover (by refund, credit or otherwise) any such VAT at the residual recovery rate generally applied by Parent in respect of input VAT incurred on its overheads from time to time;
(B) the amount of the Parent Termination Payment payable by Parent shall be reduced so that the sum of (1) the Parent Termination Payment (as so reduced) and (2) any VAT reverse charge thereon that Parent certifies acting in good faith that it is not entitled to recover (by way of credit or repayment) as input tax (together with any related interest or penalties in respect of such VAT reverse charge but excluding any interest or penalties arising as a result of the unreasonable delay or default of Parent), is equal to the amount of the Parent Termination Payment that would be payable but for this subclause (B) (the amount of such reduction being the “Adjustment Amount”); and
(C) the Company covenants to pay to Parent on written demand and on an after-Tax basis an amount equal to the Adjustment Amount save to the extent that such Adjustment Amount has previously been adjusted by way of refund of such part of the Parent Termination Payment, the due date for payment of which shall be five Business Days after the date such written demand is received by the Company. This section 10.03(i) is subject to the provisions of Section 10.03(i) of the Company Disclosure Schedule.
(j) Any reference in Section 10.03(i) or Section 10.03(i) of the Company Disclosure Schedule to Parent shall where applicable be regarded as referring to the representative member of any VAT group of which Parent is a member, and “finally determined” shall mean determined by HMRC or, if such determination is appealed, a court or tribunal in a decision or judgment in respect of which no right of appeal exists (or in relation to which any periods for appeal have expired) or, whether or not such determination is appealed, as provided in a binding agreement made with HMRC.
(k) The parties anticipate that any Company Payment shall be outside the scope of UK VAT and not otherwise subject to VAT.
(l) For the purposes of Section 10.03(i)(ii)(C), and Section 10.03(i) of the Company Disclosure Schedule, a covenant or indemnity being given on an “after-Tax basis” means that the amount payable (the “Payment”) pursuant to such covenant or indemnity (as applicable) shall be calculated in such a manner as will ensure that, after taking into account: (A) any Tax required to be deducted or withheld from the Payment (save to the extent that Parent has not provided a W-8BEN-E when it was entitled to do so, and provision of a W-8BEN-E would have prevented such deduction or withholding being required) and any additional amounts required to be paid by the payer of the Payment in consequence of such withholding; (B) the amount and timing of any additional Tax which becomes (or would become, but for the use of any credit or other relief which would otherwise have been available to reduce the Tax liabilities of any member of the recipient’s Group) payable by the recipient of the Payment as a result of the Payment’s being chargeable to Tax in the hands of that person; and (C) the amount and timing of any Tax benefit which is obtained by the recipient of the Payment (or any member of the recipient’s Group) to the extent that such Tax benefit is attributable to the matter giving rise to the obligation to make the Payment or the receipt of the Payment, the recipient of the Payment is in the same position as that in which it would have been if the matter giving rise to the obligation to make a Payment under this Section 10.03(l) had not occurred, provided that if any party to this Agreement shall have assigned or novated the benefit of this Agreement in whole or in part or shall, after the date of this Agreement, have changed its Tax residence or the permanent establishment to which the rights under this Agreement are allocated then no Payment to that party shall be increased by reason of the operation of clauses (A) through (C) (inclusive) to any greater extent than would have been the case had no such assignment, novation or change taken place. In this Section 10.03(l), references to “Tax” shall exclude “VAT” and references to a “W-8BEN-E” shall mean a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such Payment.
(m) None of the Financing Sources shall have any liability to the Company, any of its Subsidiaries or any Person that is an Affiliate of the Company prior to giving effect to the Mergers relating to or arising out of this Agreement or the Debt Financing, whether at law, or equity, in contract, in tort or otherwise, and neither the Company nor any Person that is an Affiliate of the Company prior to giving effect to the Mergers shall have any rights or claims directly against any of the Financing Sources hereunder or thereunder. The foregoing shall not impair, supplement, or otherwise modify any of the commitments and other o
Appears in 1 contract
Termination Payment. (a) If this Agreement is terminated: If
(i) by Parent this Agreement shall be terminated at a time at which the Purchaser is entitled to terminate this Agreement pursuant to Section 10.01(c)(i10.1(a)(ii)(A) and either (x) within twelve (12) months of such termination the Company or any of its Subsidiaries enters into any agreement with respect to, or consummates, any Acquisition Proposal that was received prior to such termination or (y) within (3) months of such termination the Company or any of its Subsidiaries enters into any agreement with respect to, or consummates, any Acquisition Proposal, or
(ii) by this Agreement shall be terminated at a time at which the Company Purchaser is entitled to terminate this Agreement pursuant to Section 10.01(d)(iii10.1(a)(ii)(B) and the approval of the Company's stockholders, as set forth in Section 6.1(b), then shall not have been obtained by reason of the failure to obtain the Required Vote at a duly held meeting of stockholders or any adjournment thereof, or
(iii) this Agreement shall be terminated at a time at which the Purchaser is entitled to terminate this Agreement pursuant to Section 10.1(a)(ii)(C), then, in each such case, the Company shall pay to Parent promptly, but in no event later than the date of such termination (or its designeein the case of clause (i), in cash and if later, the date the Company or its Subsidiary enters into such agreement with respect to or consummates (whichever is earlier) such Acquisition Proposal), pay the Purchaser (to the account or accounts designated by way of compensation, the Purchaser) a termination payment in an amount equal to $1,180,000,000 2,000,000 (the “Company "Termination Payment”) at or prior to, and as a condition to the effectiveness of, the termination of this Agreement in the case of a termination pursuant to Section 10.01(d)(iii) or as promptly as practicable (and, in any event, within two Business Days following such termination) in the case of a termination pursuant to Section 10.01(c)(i).
(b) If (i) this Agreement is terminated by Parent or Company pursuant to Section 10.01(b)(iii"), (ii) prior to such termination and after the date of this Agreement, a Company Acquisition Proposal shall have been publicly announced or publicly made known and shall not have been publicly withdrawn at least four Business Days prior to the Company Stockholder Meeting and (iii) on or prior to the twelve-month anniversary of such termination of this Agreement: (A) a transaction constituting a Company Acquisition Proposal is consummated; or (B) a definitive agreement relating to a Company Acquisition Proposal is entered into by the Company or any of its Affiliates (in each case, whether or not such Company Acquisition Proposal is the same as the original Company Acquisition Proposal publicly made known or publicly announced), then, the Company shall pay to Parent (or its designee) by way of compensation the Company Termination Payment no later than the consummation of such Company Acquisition Proposal; provided, that if the Company shall have actually paid the Company No Vote Payment pursuant to Section 10.03(e), then only the incremental amount between the Company No Vote Payment and the Company Termination Payment shall be payable. “Company Acquisition Proposal” for purposes of this Section 10.03(b) shall have the meaning assigned thereto in the definition thereof set forth in Section 1.01, except that references in the definition to “20%” shall be replaced by “50%”.
(c) If this Agreement is terminated by the Company pursuant to Section 10.01(d)(i), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to $1,415,000,000 (the “Parent Termination Payment”), subject to any adjustment in accordance with Section 10.03(i).
(d) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iv), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to the Parent Termination Payment; provided, that such amount shall be payable only if either (i) the Company Stockholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iii) has not been satisfied at the time of such termination, (B) the Company has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iv).
(e) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iii), the Company shall pay to Parent (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement, a payment in an amount equal to $270,000,000 (the “Company No Vote Payment”); provided, that such amount shall be payable only if either (i) the Parent Shareholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iv) has not been satisfied at the time of such termination, (B) Parent has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iii).
(f) Any payment of the Company Termination Payment or the Company No Vote Payment (each, a “Company Payment”) or the Parent Termination Payment shall be made by wire transfer of immediately available funds funds, in addition to an account designated in writing by Parent or any amount to which Purchaser is then entitled pursuant to Section 12.2(b). If the Company elects to terminate this Agreement pursuant to Section 10(a)(v), the Company, as applicable. Any Company Payment or Parent Termination Payment shall be made free and clear of and without deduction or withholding of any Taxes; provided:
(i) in the case of the Company Payment, Parent has supplied the Company with a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such termination, shall pay to the payment of Purchaser (to the Company Payment;
(iiaccount or accounts designated by the Purchaser) in the case of the Company Payment, in the event that deductions or withholdings on account of U.S. federal income Taxes should have been made under applicable law, then Parent shall bear the cost of such Taxes;
(iii) in the case of the Parent Termination Payment, in the event that deductions or withholdings on account by wire transfer of UK income Tax should have been made under applicable law, then the Company shall bear the cost of such Taxes; and
(iv) in the case of the Parent Termination Payment, Parent may deduct or withhold any amounts in respect of VAT required or permitted to be withheld in accordance with the following provisions of this Section 10.03.
(g) The parties agree and understand that (x) in no event shall the Company be required to pay the Company Termination Payment on more than one occasion or the Company No Vote Payment on more than one occasionimmediately available funds, in each case under addition to any circumstances, and the Company No Vote Payment shall be credited toward any subsequent payment of the Company Termination Payment, and in no event shall Parent be required amount to pay the Parent Termination Payment on more than one occasion under any circumstances, and (y) except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, in no event shall Parent be entitled, pursuant to this Section 10.03, to receive an amount greater than the Company Termination Payment and Company No Vote Payment, as applicable (subject to the understanding that the Company No Vote Payment which Purchaser is set off against the Company Termination Payment when the payment of the Company Termination Payment follows the payment of the Company No Vote Payment under Section 10.03(e)), and any applicable additional amounts pursuant to the last two sentences of this Section 10.03(g) (such additional amounts, collectively, the “Parent Additional Amounts”), and in no event shall the Company be entitled, pursuant to this Section 10.03, to receive an amount greater than the Parent Termination Payment and any applicable additional amounts then entitled pursuant to Section 6.03(c) and/or the last two sentences of this Section 10.3(g) (such additional amounts, collectively, the “Company Additional Amounts”12.2(b). Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, (i) if Parent receives a Company Payment and any applicable Parent Additional Amounts from the Company pursuant to this Section 10.03, or if the Company receives the Parent Termination Payment and any applicable Company Additional Amounts from Parent pursuant to this Section 10.03, such payment shall be the sole and exclusive remedy of the receiving party against the paying party and its Subsidiaries and their respective former, current or future partners, equityholders, managers, members, Affiliates and Representatives, and none of the paying party, any of its Subsidiaries or any of their respective former, current or future partners, equityholders, managers, members, Affiliates or Representatives shall have any further liability or obligation, in each case relating to or arising out of this Agreement or the transactions contemplated hereby and (ii) if (A) Parent, Bidco or either Merger Sub receives any payments from the Company in respect of any breach of this Agreement and thereafter Parent receives a Company Payment pursuant to this Section 10.03 or (B) the Company receives any payments from Parent, Bidco or either Merger Sub in respect of any breach of this Agreement and thereafter the Company receives the Parent Termination Payment, the amount of such Company Termination Payment or such Parent Termination Payment, as applicable, shall be reduced by the aggregate amount of such payments made by the party paying the Company Payment or the Parent Termination Payment, as applicable, in respect of any such breaches (in each case, after taking into account any Parent Additional Amounts or Company Additional Amounts, as applicable). The parties acknowledge that the agreements contained in this Section 10.03 are an integral part of the transactions contemplated hereby, that, without these agreements, the parties would not enter into this Agreement and that any amounts payable pursuant to this Section 10.03 do not constitute a penalty. Accordingly, if any party fails to promptly pay any Company Payment or the Parent Termination Payment due pursuant to this Section 10.03, such party shall also pay any out-of-pocket costs and expenses (together with any irrecoverable VAT incurred thereon, and including reasonable legal fees and expenses) incurred by the party entitled to such payment in connection with a legal action to enforce this Agreement that results in a judgment for such amount against the party failing to promptly pay such amount. Any Company Payment or Parent Termination Payment not paid when due pursuant to this Section 10.03 shall bear interest from the date such amount is due until the date paid at a rate equal to the prime rate as published in The Wall Street Journal, Eastern Edition in effect on the date of such payment.
(h) The Parent Termination Payment and the Company Termination Payment (in each case if any) shall be VAT inclusive.
(i) The parties hereto intend that any payment of a Parent Termination Payment, being compensatory in nature, shall not be treated (in whole or in part) as consideration for a supply for the purposes of VAT and, accordingly, Parent shall:
(i) file its relevant VAT return on the basis that the payment of any such Parent Termination Payment falls outside the scope of VAT; and
(ii) pay the full amount of any such Parent Termination Payment free and clear of any deduction or adjustment on account of VAT, it being understood and agreed that if it is finally determined that the Parent Termination Payment is (in whole or in part) consideration for a supply for the purposes of VAT then:
(A) Parent shall (1) subject to having received the relevant amount from the Company as provided in sub-clause (C) below, promptly account for and pay to HMRC such VAT together with any associated interest and penalties; and (2) use its reasonable best efforts to recover (by refund, credit or otherwise) any such VAT at the residual recovery rate generally applied by Parent in respect of input VAT incurred on its overheads from time to time;
(B) the amount of the Parent Termination Payment payable by Parent shall be reduced so that the sum of (1) the Parent Termination Payment (as so reduced) and (2) any VAT reverse charge thereon that Parent certifies acting in good faith that it is not entitled to recover (by way of credit or repayment) as input tax (together with any related interest or penalties in respect of such VAT reverse charge but excluding any interest or penalties arising as a result of the unreasonable delay or default of Parent), is equal to the amount of the Parent Termination Payment that would be payable but for this subclause (B) (the amount of such reduction being the “Adjustment Amount”); and
(C) the Company covenants to pay to Parent on written demand and on an after-Tax basis an amount equal to the Adjustment Amount save to the extent that such Adjustment Amount has previously been adjusted by way of refund of such part of the Parent Termination Payment, the due date for payment of which shall be five Business Days after the date such written demand is received by the Company. This section 10.03(i) is subject to the provisions of Section 10.03(i) of the Company Disclosure Schedule.
(j) Any reference in Section 10.03(i) or Section 10.03(i) of the Company Disclosure Schedule to Parent shall where applicable be regarded as referring to the representative member of any VAT group of which Parent is a member, and “finally determined” shall mean determined by HMRC or, if such determination is appealed, a court or tribunal in a decision or judgment in respect of which no right of appeal exists (or in relation to which any periods for appeal have expired) or, whether or not such determination is appealed, as provided in a binding agreement made with HMRC.
(k) The parties anticipate that any Company Payment shall be outside the scope of UK VAT and not otherwise subject to VAT.
(l) For the purposes of Section 10.03(i)(ii)(C), and Section 10.03(i) of the Company Disclosure Schedule, a covenant or indemnity being given on an “after-Tax basis” means that the amount payable (the “Payment”) pursuant to such covenant or indemnity (as applicable) shall be calculated in such a manner as will ensure that, after taking into account: (A) any Tax required to be deducted or withheld from the Payment (save to the extent that Parent has not provided a W-8BEN-E when it was entitled to do so, and provision of a W-8BEN-E would have prevented such deduction or withholding being required) and any additional amounts required to be paid by the payer of the Payment in consequence of such withholding; (B) the amount and timing of any additional Tax which becomes (or would become, but for the use of any credit or other relief which would otherwise have been available to reduce the Tax liabilities of any member of the recipient’s Group) payable by the recipient of the Payment as a result of the Payment’s being chargeable to Tax in the hands of that person; and (C) the amount and timing of any Tax benefit which is obtained by the recipient of the Payment (or any member of the recipient’s Group) to the extent that such Tax benefit is attributable to the matter giving rise to the obligation to make the Payment or the receipt of the Payment, the recipient of the Payment is in the same position as that in which it would have been if the matter giving rise to the obligation to make a Payment under this Section 10.03(l) had not occurred, provided that if any party to this Agreement shall have assigned or novated the benefit of this Agreement in whole or in part or shall, after the date of this Agreement, have changed its Tax residence or the permanent establishment to which the rights under this Agreement are allocated then no Payment to that party shall be increased by reason of the operation of clauses (A) through (C) (inclusive) to any greater extent than would have been the case had no such assignment, novation or change taken place. In this Section 10.03(l), references to “Tax” shall exclude “VAT” and references to a “W-8BEN-E” shall mean a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such Payment.
(m) None of the Financing Sources shall have any liability to the Company, any of its Subsidiaries or any Person that is an Affiliate of the Company prior to giving effect to the Mergers relating to or arising out of this Agreement or the Debt Financing, whether at law, or equity, in contract, in tort or otherwise, and neither the Company nor any Person that is an Affiliate of the Company prior to giving effect to the Mergers shall have any rights or claims directly against any of the Financing Sources hereunder or thereunder. The foregoing shall not impair, supplement, or otherwise modify any of the commitments and other o
Appears in 1 contract
Sources: Preferred Stock Purchase Agreement (New Mountain Partners Lp)
Termination Payment. (a) If this Agreement is terminated: (i) by Parent pursuant to Section 10.01(c)(i) or (ii) by the Company pursuant to Section 10.01(d)(iii), then the Company shall pay to Parent (or its designee), in cash and by way of compensation, a payment in an amount equal to $1,180,000,000 (the “Company Termination Payment”) at or prior to, and as a condition to the effectiveness of, the termination of this Agreement in the case of a termination pursuant to Section 10.01(d)(iii) or as promptly as practicable (and, in any event, within two Business Days following such termination) in the case of a termination pursuant to Section 10.01(c)(i).
(b) If (i) this Agreement is terminated by Parent or Company pursuant to Section 10.01(b)(iii), (ii) prior to such termination and after the date For purposes of this Agreement, a Company Acquisition Proposal shall have been publicly announced or publicly made known and shall not have been publicly withdrawn at least four Business Days prior to the Company Stockholder Meeting and (iii) on or prior to the twelve-month anniversary of such termination of this Agreement: (A) a transaction constituting a Company Acquisition Proposal is consummated; or (B) a definitive agreement relating to a Company Acquisition Proposal is entered into by the Company or any of its Affiliates (in each case, whether or not such Company Acquisition Proposal is the same as the original Company Acquisition Proposal publicly made known or publicly announced), then, the Company shall pay to Parent (or its designee) by way of compensation the Company “Termination Payment no later than the consummation of such Company Acquisition Proposal; provided, that if the Company shall have actually paid the Company No Vote Payment pursuant to Section 10.03(e), then only the incremental amount between the Company No Vote Payment and the Company Termination Payment shall be payable. “Company Acquisition Proposal” for purposes of this Section 10.03(b) shall have the meaning assigned thereto in the definition thereof set forth in Section 1.01, except that references in the definition to “20%Payment” shall be replaced by “50%”.
(c) If this Agreement is terminated by the Company pursuant to Section 10.01(d)(i), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to $1,415,000,000 (the “Parent Termination Payment”), subject to any adjustment in accordance with Section 10.03(i).
(d) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iv), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to the Parent Annual Cash Compensation. The Executive shall not be required to mitigate the amount of the Termination Payment; providedPayment by securing other employment or otherwise, that nor will such amount Termination Payment be reduced by reason of the Executive securing other employment or for any other reason. The Termination Payment shall be payable only if either (i) in lieu of any other severance payments to which the Executive is entitled under the severance policies and practices of the Company Stockholder Approval shall have previously been obtained or and/or any subsidiary of the Company.
(ii) (A) the condition to termination under Section 10.01(b)(iii) has not been satisfied at the time of such termination, (B) the Company has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iv).
(e) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iii), the Company shall pay to Parent (or its designee), in cash and by way of compensation within three Business Days after the date of termination Notwithstanding any other provision of this Agreement, a if any portion of the Termination Payment or any other payment in an amount equal to $270,000,000 under this Agreement, or under any other agreement with or plan of the Company or the Employer, including, without limitation, the Oshkosh Truck Corporation 1990 Incentive Stock Plan (the “Company No Vote Payment1990 Plan”); provided, that such amount shall be payable only if either the Oshkosh Truck Corporation 2004 Incentive Stock and Awards Plan (i) together with the Parent Shareholder Approval shall have previously been obtained or (ii) (A) 1990 Plan, the condition to termination under Section 10.01(b)(iv) has not been satisfied at the time of such termination, (B) Parent has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iii).
(f) Any payment of the Company Termination Payment or the Company No Vote Payment (each, a “Company PaymentIncentive Stock Plans”) or any stock option agreement (the Parent Termination Payment “Stock Option Agreements”) between the Company and the Executive entered into pursuant to an Incentive Stock Plan (in the aggregate “Total Payments”), would constitute an “excess parachute payment,” then the Total Payments to be made to the Executive shall be made by wire transfer of immediately available funds to an account designated in writing by Parent or reduced such that the Company, as applicable. Any Company Payment or Parent Termination Payment shall be made free and clear of and without deduction or withholding of any Taxes; provided:
(i) in the case value of the Company Payment, Parent has supplied aggregate Total Payments that the Company with a properly completed IRS Form W-8BEN-E, on which the Company Executive is entitled to rely, claiming receive shall be One Dollar ($1) less than the benefits of, and establishing an exemption to withholding under, maximum amount that the income tax treaty between the United States and the United Kingdom prior Executive may receive without becoming subject to the payment tax imposed by Section 4999 of the Code (or any successor provision) or that the Company Payment;
(iimay pay without loss of deduction under Section 280G(a) in the case of the Company Payment, in Code (or any successor provision). If the event that deductions provisions of Sections 280G and 4999 of the Code (or withholdings on account of U.S. federal income Taxes should have been made under applicable lawany successor provisions) are repealed without succession, then Parent this Section 8(a)(ii) shall bear the cost be of such Taxes;no further force or effect.
(iii) For purposes of this Agreement, the terms “excess parachute payment” and “parachute payments” shall have the meanings assigned to them in the case Section 280G of the Parent Termination PaymentCode (or any successor provision), in the event that deductions or withholdings on account and such “parachute payments” shall be valued as provided therein. Present value for purposes of UK income Tax should have been made under applicable law, then the Company this Agreement shall bear the cost of such Taxes; and
(iv) in the case of the Parent Termination Payment, Parent may deduct or withhold any amounts in respect of VAT required or permitted to be withheld calculated in accordance with Section 1274(b)(2) of the Code (or any successor provision). Within forty (40) days following provisions a Covered Termination or notice by one party to the other of this Section 10.03.
(g) The parties agree and understand its belief that (x) there is a payment or benefit due the Executive that will result in no event shall an excess parachute payment, the Company be required to pay the Company Termination Payment on more than one occasion or the Company No Vote Payment on more than one occasion, in each case under any circumstances, Executive and the Company No Vote Payment Company, at the Company’s expense, shall obtain the opinion (which need not be credited toward any subsequent payment unqualified) of nationally recognized tax counsel (the Company Termination Payment, “National Tax Counsel”) selected by the Company’s independent auditors and in no event shall Parent be required acceptable to pay the Parent Termination Payment on more than one occasion under any circumstances, and (y) except Executive in the case of fraud or Willful Breach by the other party of any covenant or agreement set Executive’s sole discretion, which opinion sets forth in this Agreement, in no event shall Parent be entitled, pursuant to this Section 10.03, to receive an amount greater than the Company Termination Payment and Company No Vote Payment, as applicable (subject to the understanding that the Company No Vote Payment is set off against the Company Termination Payment when the payment of the Company Termination Payment follows the payment of the Company No Vote Payment under Section 10.03(e)), and any applicable additional amounts pursuant to the last two sentences of this Section 10.03(g) (such additional amounts, collectively, the “Parent Additional Amounts”), and in no event shall the Company be entitled, pursuant to this Section 10.03, to receive an amount greater than the Parent Termination Payment and any applicable additional amounts pursuant to Section 6.03(c) and/or the last two sentences of this Section 10.3(g) (such additional amounts, collectively, the “Company Additional Amounts”). Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, (i) if Parent receives a Company Payment and any applicable Parent Additional Amounts from the Company pursuant to this Section 10.03, or if the Company receives the Parent Termination Payment and any applicable Company Additional Amounts from Parent pursuant to this Section 10.03, such payment shall be the sole and exclusive remedy of the receiving party against the paying party and its Subsidiaries and their respective former, current or future partners, equityholders, managers, members, Affiliates and Representatives, and none of the paying party, any of its Subsidiaries or any of their respective former, current or future partners, equityholders, managers, members, Affiliates or Representatives shall have any further liability or obligation, in each case relating to or arising out of this Agreement or the transactions contemplated hereby and (ii) if (A) Parent, Bidco or either Merger Sub receives any payments from the Company in respect of any breach of this Agreement and thereafter Parent receives a Company Payment pursuant to this Section 10.03 or (B) the Company receives any payments from Parent, Bidco or either Merger Sub in respect of any breach of this Agreement and thereafter the Company receives the Parent Termination Payment, the amount of such Company Termination Payment or such Parent Termination Payment, as applicable, shall be reduced by the aggregate amount of such payments made by the party paying the Company Payment or the Parent Termination Payment, as applicable, in respect of any such breaches (in each case, after taking into account any Parent Additional Amounts or Company Additional Amounts, as applicable). The parties acknowledge that the agreements contained in this Section 10.03 are an integral part of the transactions contemplated hereby, that, without these agreements, the parties would not enter into this Agreement and that any amounts payable pursuant to this Section 10.03 do not constitute a penalty. Accordingly, if any party fails to promptly pay any Company Payment or the Parent Termination Payment due pursuant to this Section 10.03, such party shall also pay any out-of-pocket costs and expenses (together with any irrecoverable VAT incurred thereon, and including reasonable legal fees and expenses) incurred by the party entitled to such payment in connection with a legal action to enforce this Agreement that results in a judgment for such amount against the party failing to promptly pay such amount. Any Company Payment or Parent Termination Payment not paid when due pursuant to this Section 10.03 shall bear interest from the date such amount is due until the date paid at a rate equal to the prime rate as published in The Wall Street Journal, Eastern Edition in effect on the date of such payment.
(h) The Parent Termination Payment and the Company Termination Payment (in each case if any) shall be VAT inclusive.
(i) The parties hereto intend that any payment of a Parent Termination Payment, being compensatory in nature, shall not be treated (in whole or in part) as consideration for a supply for the purposes of VAT and, accordingly, Parent shall:
(i) file its relevant VAT return on the basis that the payment of any such Parent Termination Payment falls outside the scope of VAT; and
(ii) pay the full amount of any such Parent Termination Payment free and clear of any deduction or adjustment on account of VAT, it being understood and agreed that if it is finally determined that the Parent Termination Payment is (in whole or in part) consideration for a supply for the purposes of VAT then:
(A) Parent shall (1) subject to having received the relevant amount from the Company as provided in sub-clause (C) below, promptly account for and pay to HMRC such VAT together with any associated interest and penalties; and (2) use its reasonable best efforts to recover (by refund, credit or otherwise) any such VAT at the residual recovery rate generally applied by Parent in respect of input VAT incurred on its overheads from time to time;
(B) the amount of the Parent Termination Payment payable by Parent shall be reduced so that the sum of (1) the Parent Termination Payment (as so reduced) and (2) any VAT reverse charge thereon that Parent certifies acting in good faith that it is not entitled to recover (by way of credit or repayment) as input tax (together with any related interest or penalties in respect of such VAT reverse charge but excluding any interest or penalties arising as a result of the unreasonable delay or default of Parent)Base Period Income, is equal to the amount of the Parent Termination Payment that would be payable but for this subclause (B) (the amount of such reduction being the “Adjustment Amount”); and
(C) the Company covenants to pay to Parent on written demand and on an after-Tax basis an amount equal to the Adjustment Amount save to the extent that such Adjustment Amount has previously been adjusted by way of refund of such part of the Parent Termination Payment, the due date for payment of which shall be five Business Days after the date such written demand is received by the Company. This section 10.03(i) is subject to the provisions of Section 10.03(i) of the Company Disclosure Schedule.
(j) Any reference in Section 10.03(i) or Section 10.03(i) of the Company Disclosure Schedule to Parent shall where applicable be regarded as referring to the representative member of any VAT group of which Parent is a member, and “finally determined” shall mean determined by HMRC or, if such determination is appealed, a court or tribunal in a decision or judgment in respect of which no right of appeal exists (or in relation to which any periods for appeal have expired) or, whether or not such determination is appealed, as provided in a binding agreement made with HMRC.
(k) The parties anticipate that any Company Payment shall be outside the scope of UK VAT and not otherwise subject to VAT.
(l) For the purposes of Section 10.03(i)(ii)(C), and Section 10.03(i) of the Company Disclosure Schedule, a covenant or indemnity being given on an “after-Tax basis” means that the amount payable (the “Payment”) pursuant to such covenant or indemnity (as applicable) shall be calculated in such a manner as will ensure that, after taking into account: (A) any Tax required to be deducted or withheld from the Payment (save to the extent that Parent has not provided a W-8BEN-E when it was entitled to do so, and provision of a W-8BEN-E would have prevented such deduction or withholding being required) and any additional amounts required to be paid by the payer of the Payment in consequence of such withholding; (B) the amount and timing present value of any additional Tax which becomes (or would become, but for the use of any credit or other relief which would otherwise have been available to reduce the Tax liabilities of any member of the recipient’s Group) payable by the recipient of the Payment as a result of the Payment’s being chargeable to Tax in the hands of that person; Total Payments and (C) the amount and timing present value of any Tax benefit which is obtained by excess parachute payments determined without regard to the recipient limitations of Section 8(a)(ii). As used in this Section 8(a)(iii), the term “Base Period Income” means an amount equal to the Executive’s “annualized includible compensation for the base period” as defined in Section 280G(d)(1) of the Payment Code (or any member successor provision). For purposes of such opinion, the value of any noncash benefits or any deferred payment or benefit shall be determined by the Company’s independent auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the recipientCode (or any successor provisions), which determination shall be evidenced in a certificate of such auditors addressed to the Company and the Executive. The opinion of the National Tax Counsel shall be dated as of the Termination Date and addressed to the Company and the Executive and shall be binding upon the Company and the Executive. If such opinion determines that there would be an excess parachute payment, then the Termination Payment hereunder or any other payment or benefit determined by such counsel to be includible in Total Payments shall be reduced or eliminated as specified by the Executive in writing delivered to the Company within thirty days of the Executive’s Groupreceipt of such opinion or, if the Executive fails to so notify the Company, then as the Company shall reasonably determine, so that under the bases of calculations set forth in such opinion there will be no excess parachute payment. If the National Tax Counsel so requests in connection with the opinion required by this Section, the Executive and the Company shall obtain, at the Company’s expense, and the National Tax Counsel may rely on in providing the opinion, the advice of a firm of recognized executive compensation consultants as to the reasonableness of any item of compensation to be received by the Executive solely with respect to its status under Section 280G of the Code and the regulations thereunder. Within five days after the National Tax Counsel’s opinion is received by the Company and the Executive (but not earlier than the date provided for in Section 8(a)(vi)), the Company shall pay (or cause to be paid) or distribute (or cause to be distributed) to the extent that such Tax benefit is attributable to the matter giving rise to the obligation to make the Payment or the receipt of the Payment, the recipient of the Payment is in the same position as that in which it would have been if the matter giving rise to the obligation to make a Payment under this Section 10.03(l) had not occurred, provided that if any party to this Agreement shall have assigned or novated for the benefit of this Agreement in whole or in part or shall, after the date of Executive such amounts as are then due to Executive under this Agreement, have changed its Tax residence or the permanent establishment to which the rights under this Agreement are allocated then no Payment to that party shall be increased by reason of the operation of clauses (A) through (C) (inclusive) to any greater extent than would have been the case had no such assignment, novation or change taken place. In this Section 10.03(l), references to “Tax” shall exclude “VAT” and references to a “W-8BEN-E” shall mean a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such Payment.
(m) None of the Financing Sources shall have any liability to the Company, any of its Subsidiaries or any Person that is an Affiliate of the Company prior to giving effect to the Mergers relating to or arising out of this Agreement or the Debt Financing, whether at law, or equity, in contract, in tort or otherwise, and neither the Company nor any Person that is an Affiliate of the Company prior to giving effect to the Mergers shall have any rights or claims directly against any of the Financing Sources hereunder or thereunder. The foregoing shall not impair, supplement, or otherwise modify any of the commitments and other o
Appears in 1 contract
Sources: Executive Employment and Severance Agreement (Oshkosh Truck Corp)
Termination Payment. 17.1.1 The Company shall pay to the Buyer by wire transfer of immediately available funds a termination payment of $367,000,000 in cash (a) If "Termination Payment"), exclusive of VAT, if any, if this Agreement is terminated: terminated on the basis of any of the following circumstances:
(i) by Parent the Buyer terminates this Agreement pursuant to Section 10.01(c)(iclause 16.1(c) or clause 16.1(f) (Adverse Recommendation Change) in which case payment shall be made within five (5) calendar days following such termination;
(ii) the Company terminates this Agreement pursuant to clause 16.1(c) or clause 16.1(g) (Competing Offer) in which case payment shall be made concurrently with such termination; or
(iii) if (A) an Alternative Proposal shall have been publicly made or otherwise becomes generally known to the public or any of the Boards following the date hereof, (B) this Agreement is thereafter validly terminated by (i) the Company or the Buyer pursuant to clause 16.1(b) and, at the time of such termination the Acceptance Threshold has not been satisfied (or shall have ceased to be satisfied) (but in the case of a termination by the Company, only if at such time Buyer would not be prohibited from terminating this Agreement pursuant to clause 16.1(b)(ii)) or (ii) by the Company Buyer pursuant to Section 10.01(d)(iiiclause 16.1(e), then the Company shall pay to Parent (or its designee), in cash and by way of compensation, a payment in an amount equal to $1,180,000,000 (the “Company Termination Payment”) at or prior to, and as a condition to the effectiveness of, the termination of this Agreement in the case of a termination pursuant to Section 10.01(d)(iii) or as promptly as practicable (and, in any event, within two Business Days following such termination) in the case of a termination pursuant to Section 10.01(c)(i).
(b) If (i) this Agreement is terminated by Parent or Company pursuant to Section 10.01(b)(iii), (ii) prior to such termination and after the date of this Agreement, a Company Acquisition Proposal shall have been publicly announced or publicly made known and shall not have been publicly withdrawn at least four Business Days prior to the Company Stockholder Meeting and (iii) on or prior to the twelve-month anniversary of such termination of this Agreement: (A) a transaction constituting a Company Acquisition Proposal is consummated; or (B) a definitive agreement relating to a Company Acquisition Proposal is entered into by the Company or any of its Affiliates (in each case, whether or not such Company Acquisition Proposal is the same as the original Company Acquisition Proposal publicly made known or publicly announced), then, the Company shall pay to Parent (or its designee) by way of compensation the Company Termination Payment no later than the consummation of such Company Acquisition Proposal; provided, that if the Company shall have actually paid the Company No Vote Payment pursuant to Section 10.03(e), then only the incremental amount between the Company No Vote Payment and the Company Termination Payment shall be payable. “Company Acquisition Proposal” for purposes of this Section 10.03(b) shall have the meaning assigned thereto in the definition thereof set forth in Section 1.01, except that references in the definition to “20%” shall be replaced by “50%”.
(c) If this Agreement is terminated by the Company pursuant to Section 10.01(d)(i), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to $1,415,000,000 (the “Parent Termination Payment”), subject to any adjustment in accordance with Section 10.03(i).
(d) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iv), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to the Parent Termination Payment; provided, that such amount shall be payable only if either (i) the Company Stockholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iii) has not been satisfied at the time of such termination, (B) the Company has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition prior to termination under Section 10.01(b)(iv).
(e) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iii), the Company shall pay to Parent (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement, a payment in an amount equal to $270,000,000 that is twelve (12) months following the “Company No Vote Payment”); provided, that such amount shall be payable only if either (i) the Parent Shareholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iv) has not been satisfied at the time date of such termination, (B) Parent has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iii).
(f) Any payment of the Company Termination Payment or enters into a definitive contract with respect to any transaction specified in the Company No Vote Payment (eachdefinition of "Alternative Proposal", a “Company Payment”) or the Parent Termination Payment in which case payment shall be made by wire transfer of immediately available funds to an account designated in writing by Parent or the Company, as applicable. Any Company Payment or Parent Termination Payment shall be made free and clear of and without deduction or withholding of any Taxes; provided:
(i) in Buyer concurrently with the case earlier of the Company Payment, Parent has supplied the Company with a properly completed IRS Form W-8BEN-E, date on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States enters into such contract and the United Kingdom prior date on which such Alternative Proposal is consummated. For purposes of the foregoing clause (iii), references in the definition of the term "Alternative Proposal" to the payment of the Company Payment;
figure "twenty percent (ii) in the case of the Company Payment, in the event that deductions or withholdings on account of U.S. federal income Taxes should have been made under applicable law, then Parent 20%)" shall bear the cost of such Taxes;
(iii) in the case of the Parent Termination Payment, in the event that deductions or withholdings on account of UK income Tax should have been made under applicable law, then the Company shall bear the cost of such Taxes; and
(iv) in the case of the Parent Termination Payment, Parent may deduct or withhold any amounts in respect of VAT required or permitted be deemed to be withheld replaced by "fifty percent (50%)." Notwithstanding anything to the contrary contained in accordance with the following provisions of this Section 10.03.
(g) The parties agree and understand that (x) Agreement, in no event shall the Company be required to pay make the Company Termination Payment on more than one occasion or the Company No Vote Payment payment set forth in this clause 17.1.1 on more than one occasion, in each case under any circumstances, and the Company No Vote Payment shall be credited toward any subsequent payment of the Company Termination Payment, and in no event shall Parent be required to pay the Parent Termination Payment on more than one occasion under any circumstances, and (y) except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, in no event shall Parent be entitled, pursuant to this Section 10.03, to receive an amount greater than the Company Termination Payment and Company No Vote Payment, as applicable (subject to the understanding that the Company No Vote Payment is set off against the Company Termination Payment when the payment of the Company Termination Payment follows the payment of the Company No Vote Payment under Section 10.03(e)), and any applicable additional amounts pursuant to the last two sentences of this Section 10.03(g) (such additional amounts, collectively, the “Parent Additional Amounts”), and in no event shall the Company be entitled, pursuant to this Section 10.03, to receive an amount greater than the Parent Termination Payment and any applicable additional amounts pursuant to Section 6.03(c) and/or the last two sentences of this Section 10.3(g) (such additional amounts, collectively, the “Company Additional Amounts”). .
17.1.2 Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth contained in this Agreement, (ia) if Parent receives a Company Payment and any applicable Parent Additional Amounts from in the Company event that the Buyer shall receive full payment of the termination payment pursuant to this Section 10.03clause 17.1, the receipt of such payment shall substitute for payment of any and all losses or if damages suffered or incurred by the Buyer or its Affiliates in connection with this Agreement (and the termination hereof), the Transactions (or the abandonment thereof) or any matter forming the basis for such termination of this Agreement, the failure of the Offer or the Merger to be consummated or for any breach or failure to perform hereunder or in connection with this Agreement or otherwise, and none of the Buyer or its Affiliates shall be entitled to bring or maintain any claim, action or proceeding against the Company receives or any of the Parent Termination Payment Company Related Parties (as defined below), as a result of, arising out of or in connection with this Agreement or any of the Transactions (or the abandonment thereof) or any matters forming the basis for such termination and any applicable Company Additional Amounts from Parent (b) the Buyer's right to receive the termination payment pursuant to this Section 10.03, such payment clause 17.1 shall be the sole and exclusive remedy claim for damages of the receiving party Buyer or its Affiliates against the paying party and Company, each of its Subsidiaries and their respective former, current or future partners, equityholders, managers, members, Affiliates and Representatives, and none of the paying party, any of its Subsidiaries or any of their respective former, current or future officers, directors, partners, equityholdersstockholders, optionholders, managers, employees, members, Affiliates Affiliates, agents or Representatives advisors (collectively, "Company Related Parties") for any losses or damages suffered or incurred as a result of, arising out of or in connection with the termination of this Agreement, the failure of the Offer or the Merger to be consummated or for any breach or failure to perform hereunder or in connection with this Agreement or otherwise, and upon payment of the termination payment, none of the Company Related Parties shall have any further liability or obligation, in each case actual or contingent or otherwise relating to or arising out of or in connection with this Agreement or the transactions contemplated hereby and (ii) if (A) ParentTransactions; provided, Bidco or either Merger Sub receives that nothing herein shall release any payments Party from the Company in respect liability arising out of any breach of this Agreement and thereafter Parent receives a Company Payment pursuant to this Section 10.03 Fraud or (B) the Company receives any payments from Parent, Bidco or either Merger Sub in respect Willful Breach by such Party of any breach of this Agreement and thereafter the Company receives the Parent Termination Payment, the amount of such Company Termination Payment or such Parent Termination Payment, as applicable, shall be reduced by the aggregate amount of such payments made by the party paying the Company Payment or the Parent Termination Payment, as applicable, in respect of any such breaches (in each case, after taking into account any Parent Additional Amounts or Company Additional Amounts, as applicable). The parties acknowledge that the agreements contained in this Section 10.03 are an integral part of the transactions contemplated hereby, that, without these agreements, the parties would not enter into this Agreement and that any amounts payable pursuant to this Section 10.03 do not constitute a penalty. Accordingly, if any party fails to promptly pay any Company Payment or the Parent Termination Payment due pursuant to this Section 10.03, such party shall also pay any out-of-pocket costs and expenses (together with any irrecoverable VAT incurred thereon, and including reasonable legal fees and expenses) incurred by the party entitled to such payment in connection with a legal action to enforce this Agreement that results in a judgment for such amount against the party failing to promptly pay such amount. Any Company Payment or Parent Termination Payment not paid when due pursuant to this Section 10.03 shall bear interest from the date such amount is due until the date paid at a rate equal to the prime rate as published in The Wall Street Journal, Eastern Edition in effect on the date of such payment.
(h) The Parent Termination Payment and the Company Termination Payment (in each case if any) shall be VAT inclusive.
(i) The parties hereto intend that any payment of a Parent Termination Payment, being compensatory in nature, shall not be treated (in whole or in part) as consideration for a supply for the purposes of VAT and, accordingly, Parent shall:
(i) file its relevant VAT return on the basis that the payment of any such Parent Termination Payment falls outside the scope of VAT; and
(ii) pay the full amount of any such Parent Termination Payment free and clear of any deduction or adjustment on account of VAT, it being understood and agreed that if it is finally determined that the Parent Termination Payment is (in whole or in part) consideration for a supply for the purposes of VAT then:
(A) Parent shall (1) subject to having received the relevant amount from the Company as provided in sub-clause (C) below, promptly account for and pay to HMRC such VAT together with any associated interest and penalties; and (2) use its reasonable best efforts to recover (by refund, credit or otherwise) any such VAT at the residual recovery rate generally applied by Parent in respect of input VAT incurred on its overheads from time to time;
(B) the amount of the Parent Termination Payment payable by Parent shall be reduced so that the sum of (1) the Parent Termination Payment (as so reduced) and (2) any VAT reverse charge thereon that Parent certifies acting in good faith that it is not entitled to recover (by way of credit or repayment) as input tax (together with any related interest or penalties in respect of such VAT reverse charge but excluding any interest or penalties arising as a result of the unreasonable delay or default of Parent), is equal to the amount of the Parent Termination Payment that would be payable but for this subclause (B) (the amount of such reduction being the “Adjustment Amount”); and
(C) the Company covenants to pay to Parent on written demand and on an after-Tax basis an amount equal to the Adjustment Amount save to the extent that such Adjustment Amount has previously been adjusted by way of refund of such part of the Parent Termination Payment, the due date for payment of which shall be five Business Days after the date such written demand is received by the Company. This section 10.03(i) is subject to the provisions of Section 10.03(i) of the Company Disclosure Schedule.
(j) Any reference in Section 10.03(i) or Section 10.03(i) of the Company Disclosure Schedule to Parent shall where applicable be regarded as referring to the representative member of any VAT group of which Parent is a member, and “finally determined” shall mean determined by HMRC or, if such determination is appealed, a court or tribunal in a decision or judgment in respect of which no right of appeal exists (or in relation to which any periods for appeal have expired) or, whether or not such determination is appealed, as provided in a binding agreement made with HMRC.
(k) The parties anticipate that any Company Payment shall be outside the scope of UK VAT and not otherwise subject to VAT.
(l) For the purposes of Section 10.03(i)(ii)(C), and Section 10.03(i) of the Company Disclosure Schedule, a covenant or indemnity being given on an “after-Tax basis” means that the amount payable (the “Payment”) pursuant to such covenant or indemnity (as applicable) shall be calculated in such a manner as will ensure that, after taking into account: (A) any Tax required to be deducted or withheld from the Payment (save to the extent that Parent has not provided a W-8BEN-E when it was entitled to do so, and provision of a W-8BEN-E would have prevented such deduction or withholding being required) and any additional amounts required to be paid by the payer of the Payment in consequence of such withholding; (B) the amount and timing of any additional Tax which becomes (or would become, but for the use of any credit or other relief which would otherwise have been available to reduce the Tax liabilities of any member of the recipient’s Group) payable by the recipient of the Payment as a result of the Payment’s being chargeable to Tax in the hands of that person; and (C) the amount and timing of any Tax benefit which is obtained by the recipient of the Payment (or any member of the recipient’s Group) to the extent that such Tax benefit is attributable to the matter giving rise to the obligation to make the Payment or the receipt of the Payment, the recipient of the Payment is in the same position as that in which it would have been if the matter giving rise to the obligation to make a Payment under this Section 10.03(l) had not occurred, provided that if any party to this Agreement shall have assigned or novated the benefit of this Agreement in whole or in part or shall, after the date of this Agreement, have changed its Tax residence or the permanent establishment to which the rights under this Agreement are allocated then no Payment to that party shall be increased by reason of the operation of clauses (A) through (C) (inclusive) to any greater extent than would have been the case had no such assignment, novation or change taken place. In this Section 10.03(l), references to “Tax” shall exclude “VAT” and references to a “W-8BEN-E” shall mean a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such Payment.
(m) None of the Financing Sources shall have any liability to the Company, any of its Subsidiaries or any Person that is an Affiliate of the Company prior to giving effect to the Mergers relating to or arising out of this Agreement or the Debt Financing, whether at law, or equity, in contract, in tort or otherwise, and neither the Company nor any Person that is an Affiliate of the Company prior to giving effect to the Mergers shall have any rights or claims directly against any of the Financing Sources hereunder or thereunder. The foregoing shall not impair, supplement, or otherwise modify any of the commitments and other o
Appears in 1 contract
Sources: Business Combination Agreement (Thermo Fisher Scientific Inc.)
Termination Payment. 17.1.1 The Company shall pay to the Buyer by wire transfer of immediately available funds a termination payment of $367,000,000 in cash (a) If "Termination Payment"), exclusive of VAT, if any, if this Agreement is terminated: terminated on the basis of any of the following circumstances:
(i) by Parent the Buyer terminates this Agreement pursuant to Section 10.01(c)(iclause 16.1(c) or clause 16.1(f) (Adverse Recommendation Change) in which case payment shall be made within five (5) calendar days following such termination;
(ii) the Company terminates this Agreement pursuant to clause 16.1(c) or clause 16.1(g) (Competing Offer) in which case payment shall be made concurrently with such termination; or
(iii) if (A) an Alternative Proposal shall have been publicly made or otherwise becomes generally known to the public or any of the Boards following the date hereof, (B) this Agreement is thereafter validly terminated by (i) the Company or the Buyer pursuant to clause 16.1(b) and, at the time of such termination the Acceptance Threshold has not been satisfied (or shall have ceased to be satisfied) (but in the case of a termination by the Company, only if at such time Buyer would not be prohibited from terminating this Agreement pursuant to clause 16.1(b)(ii)) or (ii) by the Company Buyer pursuant to Section 10.01(d)(iiiclause 16.1(e), then the Company shall pay to Parent (or its designee), in cash and by way of compensation, a payment in an amount equal to $1,180,000,000 (the “Company Termination Payment”) at or prior to, and as a condition to the effectiveness of, the termination of this Agreement in the case of a termination pursuant to Section 10.01(d)(iii) or as promptly as practicable (and, in any event, within two Business Days following such termination) in the case of a termination pursuant to Section 10.01(c)(i).
(b) If (i) this Agreement is terminated by Parent or Company pursuant to Section 10.01(b)(iii), (ii) prior to such termination and after the date of this Agreement, a Company Acquisition Proposal shall have been publicly announced or publicly made known and shall not have been publicly withdrawn at least four Business Days prior to the Company Stockholder Meeting and (iii) on or prior to the twelve-month anniversary of such termination of this Agreement: (A) a transaction constituting a Company Acquisition Proposal is consummated; or (B) a definitive agreement relating to a Company Acquisition Proposal is entered into by the Company or any of its Affiliates (in each case, whether or not such Company Acquisition Proposal is the same as the original Company Acquisition Proposal publicly made known or publicly announced), then, the Company shall pay to Parent (or its designee) by way of compensation the Company Termination Payment no later than the consummation of such Company Acquisition Proposal; provided, that if the Company shall have actually paid the Company No Vote Payment pursuant to Section 10.03(e), then only the incremental amount between the Company No Vote Payment and the Company Termination Payment shall be payable. “Company Acquisition Proposal” for purposes of this Section 10.03(b) shall have the meaning assigned thereto in the definition thereof set forth in Section 1.01, except that references in the definition to “20%” shall be replaced by “50%”.
(c) If this Agreement is terminated by the Company pursuant to Section 10.01(d)(i), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to $1,415,000,000 (the “Parent Termination Payment”), subject to any adjustment in accordance with Section 10.03(i).
(d) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iv), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to the Parent Termination Payment; provided, that such amount shall be payable only if either (i) the Company Stockholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iii) has not been satisfied at the time of such termination, (B) the Company has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition prior to termination under Section 10.01(b)(iv).
(e) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iii), the Company shall pay to Parent (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement, a payment in an amount equal to $270,000,000 that is twelve (12) months following the “Company No Vote Payment”); provided, that such amount shall be payable only if either (i) the Parent Shareholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iv) has not been satisfied at the time date of such termination, (B) Parent has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iii).
(f) Any payment of the Company Termination Payment or enters into a definitive contract with respect to any transaction specified in the Company No Vote Payment (eachdefinition of "Alternative Proposal", a “Company Payment”) or the Parent Termination Payment in which case payment shall be made by wire transfer of immediately available funds to an account designated in writing by Parent or the Company, as applicable. Any Company Payment or Parent Termination Payment shall be made free and clear of and without deduction or withholding of any Taxes; provided:
(i) in Buyer concurrently with the case earlier of the Company Payment, Parent has supplied the Company with a properly completed IRS Form W-8BEN-E, date on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States enters into such contract and the United Kingdom prior date on which such Alternative Proposal is consummated. For purposes of the foregoing clause (ii), references in the definition of the term "Alternative Proposal" to the payment of the Company Payment;
figure "twenty percent (ii) in the case of the Company Payment, in the event that deductions or withholdings on account of U.S. federal income Taxes should have been made under applicable law, then Parent 20%)" shall bear the cost of such Taxes;
(iii) in the case of the Parent Termination Payment, in the event that deductions or withholdings on account of UK income Tax should have been made under applicable law, then the Company shall bear the cost of such Taxes; and
(iv) in the case of the Parent Termination Payment, Parent may deduct or withhold any amounts in respect of VAT required or permitted be deemed to be withheld replaced by "fifty percent (50%)." Notwithstanding anything to the contrary contained in accordance with the following provisions of this Section 10.03.
(g) The parties agree and understand that (x) Agreement, in no event shall the Company be required to pay make the Company Termination Payment on more than one occasion or the Company No Vote Payment payment set forth in this clause 17.1.1 on more than one occasion, in each case under any circumstances, and the Company No Vote Payment shall be credited toward any subsequent payment of the Company Termination Payment, and in no event shall Parent be required to pay the Parent Termination Payment on more than one occasion under any circumstances, and (y) except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, in no event shall Parent be entitled, pursuant to this Section 10.03, to receive an amount greater than the Company Termination Payment and Company No Vote Payment, as applicable (subject to the understanding that the Company No Vote Payment is set off against the Company Termination Payment when the payment of the Company Termination Payment follows the payment of the Company No Vote Payment under Section 10.03(e)), and any applicable additional amounts pursuant to the last two sentences of this Section 10.03(g) (such additional amounts, collectively, the “Parent Additional Amounts”), and in no event shall the Company be entitled, pursuant to this Section 10.03, to receive an amount greater than the Parent Termination Payment and any applicable additional amounts pursuant to Section 6.03(c) and/or the last two sentences of this Section 10.3(g) (such additional amounts, collectively, the “Company Additional Amounts”). .
17.1.2 Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth contained in this Agreement, (ia) if Parent receives a Company Payment and any applicable Parent Additional Amounts from in the Company event that the Buyer shall receive full payment of the termination payment pursuant to this Section 10.03clause 17.1, the receipt of such payment shall substitute for payment of any and all losses or if damages suffered or incurred by the Buyer or its Affiliates in connection with this Agreement (and the termination hereof), the Transactions (or the abandonment thereof) or any matter forming the basis for such termination of this Agreement, the failure of the Offer or the Merger to be consummated or for any breach or failure to perform hereunder or in connection with this Agreement or otherwise, and none of the Buyer or its Affiliates shall be entitled to bring or maintain any claim, action or proceeding against the Company receives or any of the Parent Termination Payment Company Related Parties (as defined below), as a result of, arising out of or in connection with this Agreement or any of the Transactions (or the abandonment thereof) or any matters forming the basis for such termination and any applicable Company Additional Amounts from Parent (b) the Buyer's right to receive the termination payment pursuant to this Section 10.03, such payment clause 17.1 shall be the sole and exclusive remedy claim for damages of the receiving party Buyer or its Affiliates against the paying party and Company, each of its Subsidiaries and their respective former, current or future partners, equityholders, managers, members, Affiliates and Representatives, and none of the paying party, any of its Subsidiaries or any of their respective former, current or future officers, directors, partners, equityholdersstockholders, optionholders, managers, employees, members, Affiliates Affiliates, agents or Representatives advisors (collectively, "Company Related Parties") for any losses or damages suffered or incurred as a result of, arising out of or in connection with the termination of this Agreement, the failure of the Offer or the Merger to be consummated or for any breach or failure to perform hereunder or in connection with this Agreement or otherwise, and upon payment of the termination payment, none of the Company Related Parties shall have any further liability or obligation, in each case actual or contingent or otherwise relating to or arising out of or in connection with this Agreement or the transactions contemplated hereby and (ii) if (A) ParentTransactions; provided, Bidco or either Merger Sub receives that nothing herein shall release any payments Party from the Company in respect liability arising out of any breach of this Agreement and thereafter Parent receives a Company Payment pursuant to this Section 10.03 Fraud or (B) the Company receives any payments from Parent, Bidco or either Merger Sub in respect Willful Breach by such Party of any breach of this Agreement and thereafter the Company receives the Parent Termination Payment, the amount of such Company Termination Payment or such Parent Termination Payment, as applicable, shall be reduced by the aggregate amount of such payments made by the party paying the Company Payment or the Parent Termination Payment, as applicable, in respect of any such breaches (in each case, after taking into account any Parent Additional Amounts or Company Additional Amounts, as applicable). The parties acknowledge that the agreements contained in this Section 10.03 are an integral part of the transactions contemplated hereby, that, without these agreements, the parties would not enter into this Agreement and that any amounts payable pursuant to this Section 10.03 do not constitute a penalty. Accordingly, if any party fails to promptly pay any Company Payment or the Parent Termination Payment due pursuant to this Section 10.03, such party shall also pay any out-of-pocket costs and expenses (together with any irrecoverable VAT incurred thereon, and including reasonable legal fees and expenses) incurred by the party entitled to such payment in connection with a legal action to enforce this Agreement that results in a judgment for such amount against the party failing to promptly pay such amount. Any Company Payment or Parent Termination Payment not paid when due pursuant to this Section 10.03 shall bear interest from the date such amount is due until the date paid at a rate equal to the prime rate as published in The Wall Street Journal, Eastern Edition in effect on the date of such payment.
(h) The Parent Termination Payment and the Company Termination Payment (in each case if any) shall be VAT inclusive.
(i) The parties hereto intend that any payment of a Parent Termination Payment, being compensatory in nature, shall not be treated (in whole or in part) as consideration for a supply for the purposes of VAT and, accordingly, Parent shall:
(i) file its relevant VAT return on the basis that the payment of any such Parent Termination Payment falls outside the scope of VAT; and
(ii) pay the full amount of any such Parent Termination Payment free and clear of any deduction or adjustment on account of VAT, it being understood and agreed that if it is finally determined that the Parent Termination Payment is (in whole or in part) consideration for a supply for the purposes of VAT then:
(A) Parent shall (1) subject to having received the relevant amount from the Company as provided in sub-clause (C) below, promptly account for and pay to HMRC such VAT together with any associated interest and penalties; and (2) use its reasonable best efforts to recover (by refund, credit or otherwise) any such VAT at the residual recovery rate generally applied by Parent in respect of input VAT incurred on its overheads from time to time;
(B) the amount of the Parent Termination Payment payable by Parent shall be reduced so that the sum of (1) the Parent Termination Payment (as so reduced) and (2) any VAT reverse charge thereon that Parent certifies acting in good faith that it is not entitled to recover (by way of credit or repayment) as input tax (together with any related interest or penalties in respect of such VAT reverse charge but excluding any interest or penalties arising as a result of the unreasonable delay or default of Parent), is equal to the amount of the Parent Termination Payment that would be payable but for this subclause (B) (the amount of such reduction being the “Adjustment Amount”); and
(C) the Company covenants to pay to Parent on written demand and on an after-Tax basis an amount equal to the Adjustment Amount save to the extent that such Adjustment Amount has previously been adjusted by way of refund of such part of the Parent Termination Payment, the due date for payment of which shall be five Business Days after the date such written demand is received by the Company. This section 10.03(i) is subject to the provisions of Section 10.03(i) of the Company Disclosure Schedule.
(j) Any reference in Section 10.03(i) or Section 10.03(i) of the Company Disclosure Schedule to Parent shall where applicable be regarded as referring to the representative member of any VAT group of which Parent is a member, and “finally determined” shall mean determined by HMRC or, if such determination is appealed, a court or tribunal in a decision or judgment in respect of which no right of appeal exists (or in relation to which any periods for appeal have expired) or, whether or not such determination is appealed, as provided in a binding agreement made with HMRC.
(k) The parties anticipate that any Company Payment shall be outside the scope of UK VAT and not otherwise subject to VAT.
(l) For the purposes of Section 10.03(i)(ii)(C), and Section 10.03(i) of the Company Disclosure Schedule, a covenant or indemnity being given on an “after-Tax basis” means that the amount payable (the “Payment”) pursuant to such covenant or indemnity (as applicable) shall be calculated in such a manner as will ensure that, after taking into account: (A) any Tax required to be deducted or withheld from the Payment (save to the extent that Parent has not provided a W-8BEN-E when it was entitled to do so, and provision of a W-8BEN-E would have prevented such deduction or withholding being required) and any additional amounts required to be paid by the payer of the Payment in consequence of such withholding; (B) the amount and timing of any additional Tax which becomes (or would become, but for the use of any credit or other relief which would otherwise have been available to reduce the Tax liabilities of any member of the recipient’s Group) payable by the recipient of the Payment as a result of the Payment’s being chargeable to Tax in the hands of that person; and (C) the amount and timing of any Tax benefit which is obtained by the recipient of the Payment (or any member of the recipient’s Group) to the extent that such Tax benefit is attributable to the matter giving rise to the obligation to make the Payment or the receipt of the Payment, the recipient of the Payment is in the same position as that in which it would have been if the matter giving rise to the obligation to make a Payment under this Section 10.03(l) had not occurred, provided that if any party to this Agreement shall have assigned or novated the benefit of this Agreement in whole or in part or shall, after the date of this Agreement, have changed its Tax residence or the permanent establishment to which the rights under this Agreement are allocated then no Payment to that party shall be increased by reason of the operation of clauses (A) through (C) (inclusive) to any greater extent than would have been the case had no such assignment, novation or change taken place. In this Section 10.03(l), references to “Tax” shall exclude “VAT” and references to a “W-8BEN-E” shall mean a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such Payment.
(m) None of the Financing Sources shall have any liability to the Company, any of its Subsidiaries or any Person that is an Affiliate of the Company prior to giving effect to the Mergers relating to or arising out of this Agreement or the Debt Financing, whether at law, or equity, in contract, in tort or otherwise, and neither the Company nor any Person that is an Affiliate of the Company prior to giving effect to the Mergers shall have any rights or claims directly against any of the Financing Sources hereunder or thereunder. The foregoing shall not impair, supplement, or otherwise modify any of the commitments and other o
Appears in 1 contract
Sources: Business Combination Agreement (Thermo Fisher Scientific Inc.)
Termination Payment. (a) If this Agreement is terminated: (i) terminated pursuant to its terms, other than by Parent both parties pursuant to Section 10.01(c)(i9.2(a)(i) hereof, by the Company or Mahaska pursuant to Section 9.2(a)(ii) hereof, by failure of Mahaska's shareholders' to approve the Merger for any reason or by the failure of the shareholders of the Company to adopt this Agreement where prior to the vote by the Company shareholders the Board of Directors of the Company maintains its favorable recommendation for shareholders to adopt this Agreement and there was no intervening public announced third party offer to acquire the Company or the Bank, by Mahaska pursuant to clause (B) or (iiD) of Section 9.2(a)(iii), by the Company pursuant to Section 10.01(d)(iii), then the Company shall pay to Parent (9.2(a)(iv) or its designee), in cash and by way of compensation, a payment in an amount equal to $1,180,000,000 (the “Company Termination Payment”) at or prior to, and as a condition to the effectiveness of, the termination of this Agreement in the case of a termination either party pursuant to Section 10.01(d)(iii9.2(a)(v) or as promptly as practicable (andhereof, in any event, and an Acquisition Event shall occur within two Business Days following such termination) in the case of a termination pursuant to Section 10.01(c)(i).
(b) If (i) this Agreement is terminated by Parent or Company pursuant to Section 10.01(b)(iii), (ii) prior to such termination and 18 months after the date of this Agreement, a Company Acquisition Proposal shall have been publicly announced or publicly made known and shall not have been publicly withdrawn at least four Business Days prior to the Company Stockholder Meeting and (iii) on or prior to the twelve-month anniversary of such termination of this Agreement: (A) a transaction constituting a Company Acquisition Proposal is consummated; or (B) a definitive agreement relating to a Company Acquisition Proposal is entered into by the Company or any of its Affiliates (in each case, whether or not such Company Acquisition Proposal is the same as the original Company Acquisition Proposal publicly made known or publicly announced), thentermination, the Company shall pay to Parent (or its designee) by way of compensation Mahaska within two business days after the Company Termination Payment no later than the consummation occurrence of such Company Acquisition Proposal; providedEvent, that if the Company shall have actually paid the Company No Vote Payment pursuant to Section 10.03(e), then only the incremental amount between the Company No Vote Payment and the Company Termination Payment shall be payable. “Company Acquisition Proposal” for purposes of this Section 10.03(b) shall have the meaning assigned thereto in the definition thereof set forth in Section 1.01, except that references in the definition to “20%” shall be replaced by “50%”.
(c) If this Agreement is terminated by the Company pursuant to Section 10.01(d)(i), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to $1,415,000,000 (the “Parent Termination Payment”), subject to any adjustment in accordance with Section 10.03(i).
(d) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iv), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to the Parent Termination Payment; provided, that such amount shall be payable only if either (i) the Company Stockholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iii) has not been satisfied at the time of such termination, (B) the Company has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iv).
(e) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iii), the Company shall pay to Parent (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement, a payment in an amount equal to $270,000,000 (the “Company No Vote Payment”); provided, that such amount shall be payable only if either (i) the Parent Shareholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iv) has not been satisfied at the time of such termination, (B) Parent has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iii).
(f) Any payment of the Company Termination Payment or the Company No Vote Payment (each, a “Company Payment”) or the Parent Termination Payment shall be made by wire transfer of immediately available Federal funds to an such account designated in writing by Parent or as Mahaska shall designate, the Company, as applicable. Any Company Payment or Parent Termination Payment shall be made free and clear greater of and without deduction or withholding of any Taxes; provided:
(i) in the case of the Company Payment, Parent has supplied the Company with a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, $500,000.00 and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to the payment of the Company Payment;
(ii) in an amount equal to the case sum of (A) out-of-pocket expenses (and the Company Payment, in the event that deductions or withholdings on account of U.S. federal income Taxes should have been made under applicable law, then Parent shall bear the allocated cost of such Taxes;
(iiiits in-house legal and accounting departments) incurred by Mahaska in the case of the Parent Termination Payment, in the event that deductions or withholdings on account of UK income Tax should have been made under applicable law, then the Company shall bear the cost of such Taxes; and
(iv) in the case of the Parent Termination Payment, Parent may deduct or withhold any amounts in respect of VAT required or permitted to be withheld in accordance connection with the following provisions of this Section 10.03.
(g) The parties agree and understand that (x) in no event shall the Company be required to pay the Company Termination Payment on more than one occasion or the Company No Vote Payment on more than one occasion, in each case under any circumstances, and the Company No Vote Payment shall be credited toward any subsequent payment of the Company Termination Payment, and in no event shall Parent be required to pay the Parent Termination Payment on more than one occasion under any circumstances, and (y) except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, in no event shall Parent be entitled, pursuant to this Section 10.03, to receive an amount greater than the Company Termination Payment and Company No Vote Payment, as applicable (subject to the understanding that the Company No Vote Payment is set off against the Company Termination Payment when the payment of the Company Termination Payment follows the payment of the Company No Vote Payment under Section 10.03(e)), and any applicable additional amounts pursuant to the last two sentences of this Section 10.03(g) (such additional amounts, collectively, the “Parent Additional Amounts”), and in no event shall the Company be entitled, pursuant to this Section 10.03, to receive an amount greater than the Parent Termination Payment and any applicable additional amounts pursuant to Section 6.03(c) and/or the last two sentences of this Section 10.3(g) (such additional amounts, collectively, the “Company Additional Amounts”). Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, (i) if Parent receives a Company Payment and any applicable Parent Additional Amounts from the Company pursuant to this Section 10.03, or if the Company receives the Parent Termination Payment and any applicable Company Additional Amounts from Parent pursuant to this Section 10.03, such payment shall be the sole and exclusive remedy of the receiving party against the paying party and its Subsidiaries and their respective former, current or future partners, equityholders, managers, members, Affiliates and Representatives, and none of the paying party, any of its Subsidiaries or any of their respective former, current or future partners, equityholders, managers, members, Affiliates or Representatives shall have any further liability or obligation, in each case relating to or arising out of this Agreement or the transactions contemplated hereby and (iiB) if 2.5% of the Aggregate Value of the Acquisition Event.
(b) For purposes of this Section 4.12, the "Aggregate Value" of any Acquisition Event shall be the sum of (i) the product of (A) Parent, Bidco the average consideration paid or either Merger Sub receives any payments from the payable per share of Company Common Stock in respect of any breach of this Agreement connection with such Acquisition Event and thereafter Parent receives a Company Payment pursuant to this Section 10.03 or (B) the number of such shares of Company receives any payments from Parent, Bidco or either Merger Sub in respect Common Stock outstanding immediately prior to such Acquisition Event plus (ii) the value of any breach of this Agreement and thereafter consideration received or receivable by the Company receives the Parent Termination Payment, the amount in exchange for any shares of such Company Termination Payment its capital stock or such Parent Termination Payment, as applicable, shall be reduced by the aggregate amount of such payments made by the party paying the Company Payment or the Parent Termination Payment, as applicable, in respect of any such breaches (in each case, after taking into account any Parent Additional Amounts or Company Additional Amounts, as applicable). The parties acknowledge that the agreements contained in this Section 10.03 are an integral part of the transactions contemplated hereby, that, without these agreements, the parties would not enter into this Agreement and that any amounts payable pursuant to this Section 10.03 do not constitute a penalty. Accordingly, if any party fails to promptly pay any Company Payment or the Parent Termination Payment due pursuant to this Section 10.03, such party shall also pay any out-of-pocket costs and expenses (together with any irrecoverable VAT incurred thereon, and including reasonable legal fees and expenses) incurred by the party entitled to such payment other securities in connection with a legal action to enforce this Agreement that results in a judgment for such amount against the party failing to promptly pay such amount. Any Company Payment or Parent Termination Payment not paid when due pursuant to this Section 10.03 shall bear interest from the date such amount is due until the date paid at a rate equal to the prime rate as published in The Wall Street Journal, Eastern Edition in effect on the date of such paymentAcquisition Event.
(hc) The Parent Termination Payment For purposes of this Section 4.12, the term "Acquisition Event" shall mean any of the following: (i) any person or entity (other than Mahaska or a parent corporation or subsidiary thereof) shall have acquired pursuant to a tender offer or otherwise beneficial ownership of shares of the Company Common Stock representing 25% or more of the outstanding shares of the Company Common Stock; or (ii) the Company shall have entered into an agreement with any person or entity (other than Mahaska or a parent corporation or subsidiary thereof) to (A) effect a merger, consolidation or similar transaction in which the Company or the Bank is the non-surviving entity, (B) sell, lease or otherwise dispose of assets of the Company or any Company Subsidiary representing 15% or more of the consolidated assets of the Company and the Company Termination Payment (in each case if any) shall be VAT inclusive.
(i) The parties hereto intend that any payment of a Parent Termination PaymentSubsidiaries, being compensatory in nature, shall not be treated (in whole or in part) as consideration for a supply for the purposes of VAT and, accordingly, Parent shall:
(i) file its relevant VAT return on the basis that the payment of any such Parent Termination Payment falls outside the scope of VAT; and
(ii) pay the full amount of any such Parent Termination Payment free and clear of any deduction or adjustment on account of VAT, it being understood and agreed that if it is finally determined that the Parent Termination Payment is (in whole or in part) consideration for a supply for the purposes of VAT then:
(A) Parent shall (1) subject to having received the relevant amount from the Company as provided in sub-clause (C) belowissue, promptly account for and pay to HMRC such VAT together with any associated interest and penalties; and (2) use its reasonable best efforts to recover (by refund, credit sell or otherwise) any such VAT at the residual recovery rate generally applied by Parent in respect of input VAT incurred on its overheads from time to time;
(B) the amount of the Parent Termination Payment payable by Parent shall be reduced so that the sum otherwise dispose of (1) the Parent Termination Payment (as so reduced) and (2) any VAT reverse charge thereon that Parent certifies acting in good faith that it is not entitled to recover (including by way of credit merger, consolidation, share exchange or repaymentany similar transaction) as input tax (together with any related interest securities representing 10% or penalties in respect of such VAT reverse charge but excluding any interest or penalties arising as a result more of the unreasonable delay or default of Parent), is equal to the amount of the Parent Termination Payment that would be payable but for this subclause (B) (the amount of such reduction being the “Adjustment Amount”); and
(C) the Company covenants to pay to Parent on written demand and on an after-Tax basis an amount equal to the Adjustment Amount save to the extent that such Adjustment Amount has previously been adjusted by way of refund of such part of the Parent Termination Payment, the due date for payment of which shall be five Business Days after the date such written demand is received by the Company. This section 10.03(i) is subject to the provisions of Section 10.03(i) voting power of the Company Disclosure Schedule.
(j) Any reference in Section 10.03(i) or Section 10.03(i) of the Company Disclosure Schedule to Parent shall where applicable be regarded as referring to the representative member of any VAT group of which Parent is a member, and “finally determined” shall mean determined by HMRC or, if such determination is appealed, a court or tribunal in a decision or judgment in respect of which no right of appeal exists (or in relation to which any periods for appeal have expired) or, whether or not such determination is appealed, as provided in a binding agreement made with HMRC.
(k) The parties anticipate that any Company Payment shall be outside the scope of UK VAT and not otherwise subject to VAT.
(l) For the purposes of Section 10.03(i)(ii)(C), and Section 10.03(i) of the Company Disclosure Schedule, a covenant or indemnity being given on an “after-Tax basis” means that the amount payable (the “Payment”) pursuant to such covenant or indemnity (as applicable) shall be calculated in such a manner as will ensure that, after taking into account: (A) any Tax required to be deducted or withheld from the Payment (save to the extent that Parent has not provided a W-8BEN-E when it was entitled to do so, and provision of a W-8BEN-E would have prevented such deduction or withholding being required) and any additional amounts required to be paid by the payer of the Payment in consequence of such withholding; (B) the amount and timing of any additional Tax which becomes (or would become, but for the use of any credit or other relief which would otherwise have been available to reduce the Tax liabilities of any member of the recipient’s Group) payable by the recipient of the Payment as a result of the Payment’s being chargeable to Tax in the hands of that person; and (C) the amount and timing of any Tax benefit which is obtained by the recipient of the Payment (or any member of the recipient’s Group) to the extent that such Tax benefit is attributable to the matter giving rise to the obligation to make the Payment or the receipt of the Payment, the recipient of the Payment is in the same position as that in which it would have been if the matter giving rise to the obligation to make a Payment under this Section 10.03(l) had not occurred, provided that if any party to this Agreement shall have assigned or novated the benefit of this Agreement in whole or in part or shall, after the date of this Agreement, have changed its Tax residence or the permanent establishment to which the rights under this Agreement are allocated then no Payment to that party shall be increased by reason of the operation of clauses (A) through (C) (inclusive) to any greater extent than would have been the case had no such assignment, novation or change taken place. In this Section 10.03(l), references to “Tax” shall exclude “VAT” and references to a “W-8BEN-E” shall mean a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such PaymentBank.
(m) None of the Financing Sources shall have any liability to the Company, any of its Subsidiaries or any Person that is an Affiliate of the Company prior to giving effect to the Mergers relating to or arising out of this Agreement or the Debt Financing, whether at law, or equity, in contract, in tort or otherwise, and neither the Company nor any Person that is an Affiliate of the Company prior to giving effect to the Mergers shall have any rights or claims directly against any of the Financing Sources hereunder or thereunder. The foregoing shall not impair, supplement, or otherwise modify any of the commitments and other o
Appears in 1 contract
Termination Payment. (a) If this Agreement is terminated: The Offeror shall be entitled to a cash payment (ithe "Termination Payment") by Parent pursuant to Section 10.01(c)(i) or (ii) by the Company pursuant to Section 10.01(d)(iii), then the Company shall pay to Parent (or its designee), in cash and by way of compensation, a payment in an amount equal to $1,180,000,000 20,000,000 upon the occurrence of any of the following events (each, a "Termination Payment Event"), which shall be paid by the “Company within the time specified in respect of each such Termination Payment”) at or prior to, and as a condition to the effectiveness of, the termination of this Agreement in the case of a termination pursuant to Section 10.01(d)(iii) or as promptly as practicable (and, in any event, within two Business Days following such termination) in the case of a termination pursuant to Section 10.01(c)(i).Payment Event:
(b) If (i) this Agreement is terminated by Parent or Company pursuant to Section 10.01(b)(iiiSections 9.1(c)(iii), (iivi), (vii), (viii) prior to such termination and after the date of this Agreement, a Company Acquisition Proposal shall have been publicly announced or publicly made known and shall not have been publicly withdrawn at least four Business Days prior to the Company Stockholder Meeting and (iii) on or prior to the twelve-month anniversary of such termination of this Agreement: (A) a transaction constituting a Company Acquisition Proposal is consummated; or (B) a definitive agreement relating to a Company Acquisition Proposal is entered into by the Company or any of its Affiliates (in each case, whether or not such Company Acquisition Proposal is the same as the original Company Acquisition Proposal publicly made known or publicly announcedix), then, in which case the Company shall pay to Parent (or its designee) by way of compensation the Company Termination Payment no later than the consummation of such Company Acquisition Proposal; provided, that if the Company shall have actually paid the Company No Vote Payment pursuant to Section 10.03(e), then only the incremental amount between the Company No Vote Payment and the Company Termination Payment shall be payable. “Company Acquisition Proposal” for purposes of this Section 10.03(b) shall have paid to the meaning assigned thereto in Offeror on the definition thereof set forth in Section 1.01, except that references in first Business Day following such termination by the definition to “20%” shall be replaced by “50%”.Offeror;
(cii) If this Agreement is terminated by the Company pursuant to Section 10.01(d)(i), Parent shall pay to the Company (or its designee9.1(b)(iv), in cash and by way of compensation within three Business Days after which case the date of termination of this Agreement (or such other later date as Termination Payment shall be paid to the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to $1,415,000,000 (the “Parent Termination Payment”), subject to any adjustment Offeror in accordance with Section 10.03(i6.3(b).; or
(diii) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iv), Parent shall pay prior to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to the Parent Termination Payment; provided, that such amount shall be payable only if either (i) the Company Stockholder Approval shall have previously been obtained or (ii) Expiry Time (A) the condition an Acquisition Proposal is publicly announced or otherwise made or any person has publicly announced an intention to termination under Section 10.01(b)(iii) has not been satisfied at the time of such terminationmake an Acquisition Proposal, (B) the Company has complied with Section 8.04(c) Offer is not completed as a result of the Minimum Tender Condition not having been met, and (C) more than 24 hours has passed since on or before the satisfaction of date that is six months after the condition to termination under Section 10.01(b)(iv).
(e) If date on which this Agreement is terminated by terminated, (I) the Board of Directors accepts, approves or recommends an Acquisition Proposal, (II) the Company enters into a definitive agreement with respect to an Acquisition Proposal, or Parent pursuant to Section 10.01(b)(iii)(III) any person acquires, directly or indirectly, more than 50% of the Company shall pay to Parent (outstanding Shares or its designee)more than 50% of the consolidated assets of the Company, in cash and by way of compensation within three Business Days after which case the date of termination of this Agreement, a payment in an amount equal to $270,000,000 (the “Company No Vote Payment”); provided, that such amount shall be payable only if either (i) the Parent Shareholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iv) has not been satisfied at the time of such termination, (B) Parent has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iii).
(f) Any payment of the Company Termination Payment or the Company No Vote Payment (each, a “Company Payment”) or the Parent Termination Payment shall be made paid to the Offeror on the earlier of the date that an Acquisition Proposal is accepted, approved or recommended by the Board of Directors or concurrently with the entering into of such a definitive agreement or such acquisition of Shares or assets.
(b) The Termination Payment shall be paid by the Company to the Offeror, or a designee of the Offeror identified in writing to the Company, by wire transfer of in immediately available funds to an account designated specified by the Offeror. The Company shall not be obligated to make more than one payment under this Section 9.2 if one or more of the events specified in writing by Parent or the Company, as applicable. Any Company Payment or Parent Termination Payment shall be made free and clear of and without deduction or withholding of any Taxes; provided:Section 9.2(a) occurs.
(ic) in the case The obligations of the Company Payment, Parent has supplied the Company with a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to the payment of the Company Payment;
(ii) in the case of the Company Payment, in the event that deductions or withholdings on account of U.S. federal income Taxes should have been made under applicable law, then Parent shall bear the cost of such Taxes;
(iii) in the case of the Parent Termination Payment, in the event that deductions or withholdings on account of UK income Tax should have been made under applicable law, then the Company shall bear the cost of such Taxes; and
(iv) in the case of the Parent Termination Payment, Parent may deduct or withhold any amounts in respect of VAT required or permitted to be withheld in accordance with the following provisions of this Section 10.03.
(g) The parties agree and understand that (x) in no event shall the Company be required to pay the Company Termination Payment on more than one occasion or the Company No Vote Payment on more than one occasion, in each case under any circumstances, and the Company No Vote Payment shall be credited toward any subsequent payment of the Company Termination Payment, and in no event shall Parent be required to pay the Parent Termination Payment on more than one occasion under any circumstances, and (y) except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, in no event shall Parent be entitled, pursuant to this Section 10.03, to receive an amount greater than the Company Termination Payment and Company No Vote Payment, as applicable (subject to the understanding that the Company No Vote Payment is set off against the Company Termination Payment when the payment of the Company Termination Payment follows the payment of the Company No Vote Payment under Section 10.03(e)), and any applicable additional amounts pursuant to the last two sentences of this Section 10.03(g) (such additional amounts, collectively, the “Parent Additional Amounts”), and in no event shall the Company be entitled, pursuant to this Section 10.03, to receive an amount greater than the Parent Termination Payment and any applicable additional amounts pursuant to Section 6.03(c) and/or the last two sentences of this Section 10.3(g) (such additional amounts, collectively, the “Company Additional Amounts”). Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, (i) if Parent receives a Company Payment and any applicable Parent Additional Amounts from the Company pursuant to this Section 10.03, or if the Company receives the Parent Termination Payment and any applicable Company Additional Amounts from Parent pursuant to this Section 10.03, such payment shall be the sole and exclusive remedy of the receiving party against the paying party and its Subsidiaries and their respective former, current or future partners, equityholders, managers, members, Affiliates and Representatives, and none of the paying party, any of its Subsidiaries or any of their respective former, current or future partners, equityholders, managers, members, Affiliates or Representatives shall have any further liability or obligation, in each case relating to or arising out of this Agreement or the transactions contemplated hereby and (ii) if (A) Parent, Bidco or either Merger Sub receives any payments from the Company in respect of any breach of this Agreement and thereafter Parent receives a Company Payment pursuant to this Section 10.03 or (B) the Company receives any payments from Parent, Bidco or either Merger Sub in respect of any breach of this Agreement and thereafter the Company receives the Parent Termination Payment, the amount of such Company Termination Payment or such Parent Termination Payment, as applicable, shall be reduced by the aggregate amount of such payments made by the party paying the Company Payment or the Parent Termination Payment, as applicable, in respect of any such breaches (in each case, after taking into account any Parent Additional Amounts or Company Additional Amounts, as applicable). The parties acknowledge that the agreements contained in this Section 10.03 are an integral part of the transactions contemplated hereby, that, without these agreements, the parties would not enter into this Agreement and that any amounts payable pursuant to this Section 10.03 do not constitute a penalty. Accordingly, if any party fails to promptly pay any Company Payment or the Parent Termination Payment due pursuant to this Section 10.03, such party shall also pay any out-of-pocket costs and expenses (together with any irrecoverable VAT incurred thereon, and including reasonable legal fees and expenses) incurred by the party entitled to such payment in connection with a legal action to enforce this Agreement that results in a judgment for such amount against the party failing to promptly pay such amount. Any Company Payment or Parent Termination Payment not paid when due pursuant to this Section 10.03 shall bear interest from the date such amount is due until the date paid at a rate equal to the prime rate as published in The Wall Street Journal, Eastern Edition in effect on the date of such payment.
(h) The Parent Termination Payment and the Company Termination Payment (in each case if any) shall be VAT inclusive.
(i) The parties hereto intend that any payment of a Parent Termination Payment, being compensatory in nature, shall not be treated (in whole or in part) as consideration for a supply for the purposes of VAT and, accordingly, Parent shall:
(i) file its relevant VAT return on the basis that the payment of any such Parent Termination Payment falls outside the scope of VAT; and
(ii) pay the full amount of any such Parent Termination Payment free and clear of any deduction or adjustment on account of VAT, it being understood and agreed that if it is finally determined that the Parent Termination Payment is (in whole or in part) consideration for a supply for the purposes of VAT then:
(A) Parent shall (1) subject to having received the relevant amount from the Company as provided in sub-clause (C) below, promptly account for and pay to HMRC such VAT together with any associated interest and penalties; and (2) use its reasonable best efforts to recover (by refund, credit or otherwise) any such VAT at the residual recovery rate generally applied by Parent in respect of input VAT incurred on its overheads from time to time;
(B) the amount of the Parent Termination Payment payable by Parent shall be reduced so that the sum of (1) the Parent Termination Payment (as so reduced) and (2) any VAT reverse charge thereon that Parent certifies acting in good faith that it is not entitled to recover (by way of credit or repayment) as input tax (together with any related interest or penalties in respect of such VAT reverse charge but excluding any interest or penalties arising as a result of the unreasonable delay or default of Parent), is equal to the amount of the Parent Termination Payment that would be payable but for this subclause (B) (the amount of such reduction being the “Adjustment Amount”); and
(C) the Company covenants to pay to Parent on written demand and on an after-Tax basis an amount equal to the Adjustment Amount save to the extent that such Adjustment Amount has previously been adjusted by way of refund of such part of the Parent Termination Payment, the due date for payment of which shall be five Business Days after the date such written demand is received by the Company. This section 10.03(i) is subject to the provisions of Section 10.03(i) of the Company Disclosure Schedule.
(j) Any reference in Section 10.03(i) or Section 10.03(i) of the Company Disclosure Schedule to Parent shall where applicable be regarded as referring to the representative member of any VAT group of which Parent is a member, and “finally determined” shall mean determined by HMRC or, if such determination is appealed, a court or tribunal in a decision or judgment in respect of which no right of appeal exists (or in relation to which any periods for appeal have expired) or, whether or not such determination is appealed, as provided in a binding agreement made with HMRC.
(k) The parties anticipate that any Company Payment shall be outside the scope of UK VAT and not otherwise subject to VAT.
(l) For the purposes of Section 10.03(i)(ii)(C), and Section 10.03(i) of the Company Disclosure Schedule, a covenant or indemnity being given on an “after-Tax basis” means that the amount payable (the “Payment”) pursuant to such covenant or indemnity (as applicable) shall be calculated in such a manner as will ensure that, after taking into account: (A) any Tax required to be deducted or withheld from the Payment (save to the extent that Parent has not provided a W-8BEN-E when it was entitled to do so, and provision of a W-8BEN-E would have prevented such deduction or withholding being required) and any additional amounts required to be paid by the payer of the Payment in consequence of such withholding; (B) the amount and timing of any additional Tax which becomes (or would become, but for the use of any credit or other relief which would otherwise have been available to reduce the Tax liabilities of any member of the recipient’s Group) payable by the recipient of the Payment as a result of the Payment’s being chargeable to Tax in the hands of that person; and (C) the amount and timing of any Tax benefit which is obtained by the recipient of the Payment (or any member of the recipient’s Group) to the extent that such Tax benefit is attributable to the matter giving rise to the obligation to make the Payment or the receipt of the Payment, the recipient of the Payment is in the same position as that in which it would have been if the matter giving rise to the obligation to make a Payment under this Section 10.03(l) had not occurred, provided that if any party to this Agreement 9.2 shall have assigned or novated survive the benefit of this Agreement in whole or in part or shall, after the date termination of this Agreement, have changed its Tax residence or the permanent establishment to which the rights under this Agreement are allocated then no Payment to that party shall be increased by reason regardless of the operation of clauses (A) through (C) (inclusive) to any greater extent than would have been the case had no such assignment, novation or change taken place. In this Section 10.03(l), references to “Tax” shall exclude “VAT” and references to a “W-8BEN-E” shall mean a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such Paymentcircumstances thereof.
(m) None of the Financing Sources shall have any liability to the Company, any of its Subsidiaries or any Person that is an Affiliate of the Company prior to giving effect to the Mergers relating to or arising out of this Agreement or the Debt Financing, whether at law, or equity, in contract, in tort or otherwise, and neither the Company nor any Person that is an Affiliate of the Company prior to giving effect to the Mergers shall have any rights or claims directly against any of the Financing Sources hereunder or thereunder. The foregoing shall not impair, supplement, or otherwise modify any of the commitments and other o
Appears in 1 contract
Sources: Acquisition Support Agreement (Corriente Resources Inc.)
Termination Payment. (a) If this Agreement is terminated: (i) by Parent pursuant to Section 10.01(c)(i) or (ii) by the Company pursuant to Section 10.01(d)(iii), then the Company shall pay to Parent (or its designee), in cash and by way of compensation, a payment in an amount equal to $1,180,000,000 (the “Company Termination Payment”) at or prior to, and as a condition to the effectiveness of, the termination of this Agreement in the case of a termination pursuant to Section 10.01(d)(iii) or as promptly as practicable (and, in any event, within two Business Days following such termination) in the case of a termination pursuant to Section 10.01(c)(i).
(b) If (i) this Agreement is terminated by Parent or Company pursuant to Section 10.01(b)(iii), (ii) prior to such termination and after the date of this Agreement, a Company Acquisition Proposal shall have been publicly announced or publicly made known and shall not have been publicly withdrawn at least four Business Days prior to the Company Stockholder Meeting and (iii) on or prior to the twelve-month anniversary of such termination of this Agreement: (A) a transaction constituting a Company Acquisition Proposal is consummated; or (B) a definitive agreement relating to a Company Acquisition Proposal is entered into by the Company or any of its Affiliates (in each case, whether or not such Company Acquisition Proposal is the same as the original Company Acquisition Proposal publicly made known or publicly announced), then, the Company shall pay to Parent (or its designee) by way of compensation the Company Termination Payment no later than the consummation of such Company Acquisition Proposal; provided, that if the Company shall have actually paid the Company No Vote Payment pursuant to Section 10.03(e), then only the incremental amount between the Company No Vote Payment and the Company Termination Payment shall be payable. “Company Acquisition Proposal” for purposes of this Section 10.03(b) shall have the meaning assigned thereto in the definition thereof set forth in Section 1.01, except that references in the definition to “20%” shall be replaced by “50%”.
(c) If this Agreement is terminated pursuant to its terms (other than termination by mutual agreement of the Company parties pursuant to Section 10.01(d)(i6.1(a), Parent shall pay termination by either party pursuant to Section 6.1(b)(i) if there was no Acquisition Proposal and the stockholders signatory to the Company Shareholder Agreements referred to in the Recitals hereto have voted for approval of the Merger, termination solely by TW Holding pursuant to Section 6.1(b)(ii) because of a material breach of this Agreement by the Acquiror, or termination by either party pursuant to Section 6.1(c) in the event the governmental or regulatory approvals referred to therein are not given or received for reasons not relating to an Acquisition Event (or its designeeas defined below), in cash ) and by way of compensation an Acquisition Event shall occur within three Business Days 12 months after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to $1,415,000,000 (the “Parent Termination Payment”), subject to any adjustment in accordance with Section 10.03(i).
(d) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iv), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to the Parent Termination Payment; provided, that such amount shall be payable only if either (i) the Company Stockholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iii) has not been satisfied at the time of such termination, (B) the Company has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iv).
(e) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iii), the Company TW Holding shall pay the sum of $1,900,000 to Parent (or its designee)the Acquiror promptly, but in cash and by way of compensation within three Business Days no event later than two business days after the date of termination of this Agreement, a payment in an amount equal to $270,000,000 (the “Company No Vote Payment”); provided, that such amount shall be payable only if either (i) the Parent Shareholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iv) has not been satisfied at the time occurrence of such terminationAcquisition Event, (B) Parent has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iii).
(f) Any payment of the Company Termination Payment or the Company No Vote Payment (each, a “Company Payment”) or the Parent Termination Payment shall be made by wire transfer of immediately available funds Federal Funds to an such account designated in writing by Parent or as the CompanyAcquiror shall designate. For purposes of this Section 6.3, as applicable. Any Company Payment or Parent Termination Payment the term Acquisition Event shall be made free and clear mean any of and without deduction or withholding of any Taxes; provided:
the following: (i) in any person or entity (other than the case Acquiror) shall have acquired, whether pursuant to a tender offer or otherwise, beneficial ownership of 20% or more of the Company Payment, Parent has supplied the Company with a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to the payment outstanding shares of the Company Payment;
Holding Common Stock; (ii) in the case Board of Directors of TW Holding shall fail to recommend, or shall have withdrawn its recommendation, to the Company Payment, in TW stockholders that they vote to approve this Agreement and the event that deductions Merger; or withholdings on account of U.S. federal income Taxes should have been made under applicable law, then Parent shall bear the cost of such Taxes;
(iii) in the case either of the Parent Termination PaymentTW Entities shall have recommended or proposed, in or shall have publicly announced an intention to recommend or propose, or shall have entered into or approved through action of its Board of Directors, an agreement with any person or entity (other than the event that deductions Acquiror) to (A) effect a merger, consolidation or withholdings on account of UK income Tax should have been made under applicable law, then the Company shall bear the cost of such Taxes; and
(iv) in the case similar transaction involving either of the Parent Termination PaymentTW Entities, Parent may deduct (B) sell, lease or withhold any amounts in respect otherwise dispose of VAT required or permitted to be withheld in accordance with the following provisions assets of this Section 10.03.
(g) The parties agree and understand that (x) in no event shall the Company be required to pay the Company Termination Payment on more than one occasion or the Company No Vote Payment on more than one occasion, in each case under any circumstances, and the Company No Vote Payment shall be credited toward any subsequent payment either of the Company Termination PaymentTW Entities representing 15% or more of the consolidated assets of either of the TW Entities, and in no event shall Parent be required to pay or (C) issue, sell or otherwise dispose of (including by way of merger, consolidation, share exchange or any similar transaction) securities representing 20% or more of the Parent Termination Payment on more than one occasion under any circumstances, and (y) except in voting power of either of the case TW Entities. For purposes of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, in no event shall Parent be entitled, pursuant to this Section 10.03, to receive an amount greater than the Company Termination Payment and Company No Vote Payment, as applicable (subject to the understanding that the Company No Vote Payment is set off against the Company Termination Payment when the payment of the Company Termination Payment follows the payment of the Company No Vote Payment under Section 10.03(e)), and any applicable additional amounts pursuant to the last two sentences of this Section 10.03(g) (such additional amounts, collectively, the “Parent Additional Amounts”), and in no event shall the Company be entitled, pursuant to this Section 10.03, to receive an amount greater than the Parent Termination Payment and any applicable additional amounts pursuant to Section 6.03(c) and/or the last two sentences of this Section 10.3(g) (such additional amounts, collectively, the “Company Additional Amounts”). Notwithstanding anything to the contrary in this Agreement, except mere inclusion in the case Proxy Statement referred to in Section 4.8 of fraud or Willful Breach by the other party a description of any covenant or agreement set forth in this Agreement, (i) if Parent receives a Company Payment and any applicable Parent Additional Amounts from the Company pursuant to this Section 10.03, or if the Company receives the Parent Termination Payment and any applicable Company Additional Amounts from Parent pursuant to this Section 10.03, such payment shall be the sole and exclusive remedy of the receiving party against the paying party and its Subsidiaries and their respective former, current or future partners, equityholders, managers, members, Affiliates and Representatives, and none of the paying party, any of its Subsidiaries or any of their respective former, current or future partners, equityholders, managers, members, Affiliates or Representatives shall have any further liability or obligation, in each case relating to or arising out of this Agreement or the transactions contemplated hereby and (ii) if (A) Parent, Bidco or either Merger Sub receives any payments from the Company in respect of any breach of this Agreement and thereafter Parent receives a Company Payment pursuant to this Section 10.03 or (B) the Company receives any payments from Parent, Bidco or either Merger Sub in respect of any breach of this Agreement and thereafter the Company receives the Parent Termination Payment, the amount of such Company Termination Payment or such Parent Termination Payment, as applicable, shall be reduced by the aggregate amount of such payments made by the party paying the Company Payment or the Parent Termination Payment, as applicable, in respect of any such breaches (in each case, after taking into account any Parent Additional Amounts or Company Additional Amounts, as applicable). The parties acknowledge that the agreements contained in this Section 10.03 are an integral part of the transactions contemplated hereby, thatAcquisition Proposal, without these agreements, the parties would not enter into this Agreement and that any amounts payable pursuant to this Section 10.03 do not constitute a penalty. Accordingly, if any party fails to promptly pay any Company Payment endorsement or the Parent Termination Payment due pursuant to this Section 10.03, such party shall also pay any out-of-pocket costs and expenses (together with any irrecoverable VAT incurred thereon, and including reasonable legal fees and expenses) incurred recommendation thereof by the party entitled to such payment in connection with a legal action to enforce this Agreement that results in a judgment for such amount against the party failing to promptly pay such amount. Any Company Payment or Parent Termination Payment not paid when due pursuant to this Section 10.03 shall bear interest from the date such amount is due until the date paid at a rate equal to the prime rate as published in The Wall Street Journal, Eastern Edition in effect on the date of such payment.
(h) The Parent Termination Payment and the Company Termination Payment (in each case if any) shall be VAT inclusive.
(i) The parties hereto intend that any payment of a Parent Termination Payment, being compensatory in natureTW Holding, shall not be treated (in whole deemed a recommendation or in part) as consideration for a supply for proposal thereof within the purposes meaning of VAT and, accordingly, Parent shall:
(i) file its relevant VAT return on the basis that the payment of any such Parent Termination Payment falls outside the scope of VAT; and
(ii) pay the full amount of any such Parent Termination Payment free and clear of any deduction or adjustment on account of VAT, it being understood and agreed that if it is finally determined that the Parent Termination Payment is (in whole or in part) consideration for a supply for the purposes of VAT then:
(A) Parent shall (1) subject to having received the relevant amount from the Company as provided in sub-clause (C) below, promptly account for and pay to HMRC such VAT together with any associated interest and penalties; and (2) use its reasonable best efforts to recover (by refund, credit or otherwise) any such VAT at the residual recovery rate generally applied by Parent in respect of input VAT incurred on its overheads from time to time;
(B) the amount of the Parent Termination Payment payable by Parent shall be reduced so that the sum of (1) the Parent Termination Payment (as so reduced) and (2) any VAT reverse charge thereon that Parent certifies acting in good faith that it is not entitled to recover (by way of credit or repayment) as input tax (together with any related interest or penalties in respect of such VAT reverse charge but excluding any interest or penalties arising as a result of the unreasonable delay or default of Parent), is equal to the amount of the Parent Termination Payment that would be payable but for this subclause (B) (the amount of such reduction being the “Adjustment Amount”); and
(C) the Company covenants to pay to Parent on written demand and on an after-Tax basis an amount equal to the Adjustment Amount save to the extent that such Adjustment Amount has previously been adjusted by way of refund of such part of the Parent Termination Payment, the due date for payment of which shall be five Business Days after the date such written demand is received by the Company. This section 10.03(i) is subject to the provisions of Section 10.03(iiii) of the Company Disclosure Schedulepreceding sentence.
(j) Any reference in Section 10.03(i) or Section 10.03(i) of the Company Disclosure Schedule to Parent shall where applicable be regarded as referring to the representative member of any VAT group of which Parent is a member, and “finally determined” shall mean determined by HMRC or, if such determination is appealed, a court or tribunal in a decision or judgment in respect of which no right of appeal exists (or in relation to which any periods for appeal have expired) or, whether or not such determination is appealed, as provided in a binding agreement made with HMRC.
(k) The parties anticipate that any Company Payment shall be outside the scope of UK VAT and not otherwise subject to VAT.
(l) For the purposes of Section 10.03(i)(ii)(C), and Section 10.03(i) of the Company Disclosure Schedule, a covenant or indemnity being given on an “after-Tax basis” means that the amount payable (the “Payment”) pursuant to such covenant or indemnity (as applicable) shall be calculated in such a manner as will ensure that, after taking into account: (A) any Tax required to be deducted or withheld from the Payment (save to the extent that Parent has not provided a W-8BEN-E when it was entitled to do so, and provision of a W-8BEN-E would have prevented such deduction or withholding being required) and any additional amounts required to be paid by the payer of the Payment in consequence of such withholding; (B) the amount and timing of any additional Tax which becomes (or would become, but for the use of any credit or other relief which would otherwise have been available to reduce the Tax liabilities of any member of the recipient’s Group) payable by the recipient of the Payment as a result of the Payment’s being chargeable to Tax in the hands of that person; and (C) the amount and timing of any Tax benefit which is obtained by the recipient of the Payment (or any member of the recipient’s Group) to the extent that such Tax benefit is attributable to the matter giving rise to the obligation to make the Payment or the receipt of the Payment, the recipient of the Payment is in the same position as that in which it would have been if the matter giving rise to the obligation to make a Payment under this Section 10.03(l) had not occurred, provided that if any party to this Agreement shall have assigned or novated the benefit of this Agreement in whole or in part or shall, after the date of this Agreement, have changed its Tax residence or the permanent establishment to which the rights under this Agreement are allocated then no Payment to that party shall be increased by reason of the operation of clauses (A) through (C) (inclusive) to any greater extent than would have been the case had no such assignment, novation or change taken place. In this Section 10.03(l), references to “Tax” shall exclude “VAT” and references to a “W-8BEN-E” shall mean a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such Payment.
(m) None of the Financing Sources shall have any liability to the Company, any of its Subsidiaries or any Person that is an Affiliate of the Company prior to giving effect to the Mergers relating to or arising out of this Agreement or the Debt Financing, whether at law, or equity, in contract, in tort or otherwise, and neither the Company nor any Person that is an Affiliate of the Company prior to giving effect to the Mergers shall have any rights or claims directly against any of the Financing Sources hereunder or thereunder. The foregoing shall not impair, supplement, or otherwise modify any of the commitments and other o
Appears in 1 contract
Termination Payment. (a) If this Agreement is terminated: The Offeror shall be entitled to a cash payment (ithe “Termination Payment”) by Parent pursuant to Section 10.01(c)(i) or (ii) by the Company pursuant to Section 10.01(d)(iii), then the Company shall pay to Parent (or its designee), in cash and by way of compensation, a payment in an amount equal to $1,180,000,000 20,000,000 upon the occurrence of any of the following events (each, a “Termination Payment Event”), which shall be paid by the “Company within the time specified in respect of each such Termination Payment”) at or prior to, and as a condition to the effectiveness of, the termination of this Agreement in the case of a termination pursuant to Section 10.01(d)(iii) or as promptly as practicable (and, in any event, within two Business Days following such termination) in the case of a termination pursuant to Section 10.01(c)(i).Payment Event:
(b) If (i) this Agreement is terminated by Parent or Company pursuant to Section 10.01(b)(iiiSections 9.1(c)(iii), (iivi), (vii), (viii) prior to such termination and after the date of this Agreement, a Company Acquisition Proposal shall have been publicly announced or publicly made known and shall not have been publicly withdrawn at least four Business Days prior to the Company Stockholder Meeting and (iii) on or prior to the twelve-month anniversary of such termination of this Agreement: (A) a transaction constituting a Company Acquisition Proposal is consummated; or (B) a definitive agreement relating to a Company Acquisition Proposal is entered into by the Company or any of its Affiliates (in each case, whether or not such Company Acquisition Proposal is the same as the original Company Acquisition Proposal publicly made known or publicly announcedix), then, in which case the Company shall pay to Parent (or its designee) by way of compensation the Company Termination Payment no later than the consummation of such Company Acquisition Proposal; provided, that if the Company shall have actually paid the Company No Vote Payment pursuant to Section 10.03(e), then only the incremental amount between the Company No Vote Payment and the Company Termination Payment shall be payable. “Company Acquisition Proposal” for purposes of this Section 10.03(b) shall have paid to the meaning assigned thereto in Offeror on the definition thereof set forth in Section 1.01, except that references in first Business Day following such termination by the definition to “20%” shall be replaced by “50%”.Offeror;
(cii) If this Agreement is terminated by the Company pursuant to Section 10.01(d)(i), Parent shall pay to the Company (or its designee9.1(b)(iv), in cash and by way of compensation within three Business Days after which case the date of termination of this Agreement (or such other later date as Termination Payment shall be paid to the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to $1,415,000,000 (the “Parent Termination Payment”), subject to any adjustment Offeror in accordance with Section 10.03(i6.3(b).; or
(diii) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iv), Parent shall pay prior to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to the Parent Termination Payment; provided, that such amount shall be payable only if either (i) the Company Stockholder Approval shall have previously been obtained or (ii) Expiry Time (A) the condition an Acquisition Proposal is publicly announced or otherwise made or any person has publicly announced an intention to termination under Section 10.01(b)(iii) has not been satisfied at the time of such terminationmake an Acquisition Proposal, (B) the Company has complied with Section 8.04(c) Offer is not completed as a result of the Minimum Tender Condition not having been met, and (C) more than 24 hours has passed since on or before the satisfaction of date that is six months after the condition to termination under Section 10.01(b)(iv).
(e) If date on which this Agreement is terminated by terminated, (I) the Board of Directors accepts, approves or recommends an Acquisition Proposal, (II) the Company enters into a definitive agreement with respect to an Acquisition Proposal, or Parent pursuant to Section 10.01(b)(iii)(III) any person acquires, directly or indirectly, more than 50% of the Company shall pay to Parent (outstanding Shares or its designee)more than 50% of the consolidated assets of the Company, in cash and by way of compensation within three Business Days after which case the date of termination of this Agreement, a payment in an amount equal to $270,000,000 (the “Company No Vote Payment”); provided, that such amount shall be payable only if either (i) the Parent Shareholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iv) has not been satisfied at the time of such termination, (B) Parent has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iii).
(f) Any payment of the Company Termination Payment or the Company No Vote Payment (each, a “Company Payment”) or the Parent Termination Payment shall be made paid to the Offeror on the earlier of the date that an Acquisition Proposal is accepted, approved or recommended by the Board of Directors or concurrently with the entering into of such a definitive agreement or such acquisition of Shares or assets.
(b) The Termination Payment shall be paid by the Company to the Offeror, or a designee of the Offeror identified in writing to the Company, by wire transfer of in immediately available funds to an account designated specified by the Offeror. The Company shall not be obligated to make more than one payment under this Section 9.2 if one or more of the events specified in writing by Parent or the Company, as applicable. Any Company Payment or Parent Termination Payment shall be made free and clear of and without deduction or withholding of any Taxes; provided:Section 9.2(a) occurs.
(ic) in the case The obligations of the Company Payment, Parent has supplied the Company with a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to the payment of the Company Payment;
(ii) in the case of the Company Payment, in the event that deductions or withholdings on account of U.S. federal income Taxes should have been made under applicable law, then Parent shall bear the cost of such Taxes;
(iii) in the case of the Parent Termination Payment, in the event that deductions or withholdings on account of UK income Tax should have been made under applicable law, then the Company shall bear the cost of such Taxes; and
(iv) in the case of the Parent Termination Payment, Parent may deduct or withhold any amounts in respect of VAT required or permitted to be withheld in accordance with the following provisions of this Section 10.03.
(g) The parties agree and understand that (x) in no event shall the Company be required to pay the Company Termination Payment on more than one occasion or the Company No Vote Payment on more than one occasion, in each case under any circumstances, and the Company No Vote Payment shall be credited toward any subsequent payment of the Company Termination Payment, and in no event shall Parent be required to pay the Parent Termination Payment on more than one occasion under any circumstances, and (y) except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, in no event shall Parent be entitled, pursuant to this Section 10.03, to receive an amount greater than the Company Termination Payment and Company No Vote Payment, as applicable (subject to the understanding that the Company No Vote Payment is set off against the Company Termination Payment when the payment of the Company Termination Payment follows the payment of the Company No Vote Payment under Section 10.03(e)), and any applicable additional amounts pursuant to the last two sentences of this Section 10.03(g) (such additional amounts, collectively, the “Parent Additional Amounts”), and in no event shall the Company be entitled, pursuant to this Section 10.03, to receive an amount greater than the Parent Termination Payment and any applicable additional amounts pursuant to Section 6.03(c) and/or the last two sentences of this Section 10.3(g) (such additional amounts, collectively, the “Company Additional Amounts”). Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, (i) if Parent receives a Company Payment and any applicable Parent Additional Amounts from the Company pursuant to this Section 10.03, or if the Company receives the Parent Termination Payment and any applicable Company Additional Amounts from Parent pursuant to this Section 10.03, such payment shall be the sole and exclusive remedy of the receiving party against the paying party and its Subsidiaries and their respective former, current or future partners, equityholders, managers, members, Affiliates and Representatives, and none of the paying party, any of its Subsidiaries or any of their respective former, current or future partners, equityholders, managers, members, Affiliates or Representatives shall have any further liability or obligation, in each case relating to or arising out of this Agreement or the transactions contemplated hereby and (ii) if (A) Parent, Bidco or either Merger Sub receives any payments from the Company in respect of any breach of this Agreement and thereafter Parent receives a Company Payment pursuant to this Section 10.03 or (B) the Company receives any payments from Parent, Bidco or either Merger Sub in respect of any breach of this Agreement and thereafter the Company receives the Parent Termination Payment, the amount of such Company Termination Payment or such Parent Termination Payment, as applicable, shall be reduced by the aggregate amount of such payments made by the party paying the Company Payment or the Parent Termination Payment, as applicable, in respect of any such breaches (in each case, after taking into account any Parent Additional Amounts or Company Additional Amounts, as applicable). The parties acknowledge that the agreements contained in this Section 10.03 are an integral part of the transactions contemplated hereby, that, without these agreements, the parties would not enter into this Agreement and that any amounts payable pursuant to this Section 10.03 do not constitute a penalty. Accordingly, if any party fails to promptly pay any Company Payment or the Parent Termination Payment due pursuant to this Section 10.03, such party shall also pay any out-of-pocket costs and expenses (together with any irrecoverable VAT incurred thereon, and including reasonable legal fees and expenses) incurred by the party entitled to such payment in connection with a legal action to enforce this Agreement that results in a judgment for such amount against the party failing to promptly pay such amount. Any Company Payment or Parent Termination Payment not paid when due pursuant to this Section 10.03 shall bear interest from the date such amount is due until the date paid at a rate equal to the prime rate as published in The Wall Street Journal, Eastern Edition in effect on the date of such payment.
(h) The Parent Termination Payment and the Company Termination Payment (in each case if any) shall be VAT inclusive.
(i) The parties hereto intend that any payment of a Parent Termination Payment, being compensatory in nature, shall not be treated (in whole or in part) as consideration for a supply for the purposes of VAT and, accordingly, Parent shall:
(i) file its relevant VAT return on the basis that the payment of any such Parent Termination Payment falls outside the scope of VAT; and
(ii) pay the full amount of any such Parent Termination Payment free and clear of any deduction or adjustment on account of VAT, it being understood and agreed that if it is finally determined that the Parent Termination Payment is (in whole or in part) consideration for a supply for the purposes of VAT then:
(A) Parent shall (1) subject to having received the relevant amount from the Company as provided in sub-clause (C) below, promptly account for and pay to HMRC such VAT together with any associated interest and penalties; and (2) use its reasonable best efforts to recover (by refund, credit or otherwise) any such VAT at the residual recovery rate generally applied by Parent in respect of input VAT incurred on its overheads from time to time;
(B) the amount of the Parent Termination Payment payable by Parent shall be reduced so that the sum of (1) the Parent Termination Payment (as so reduced) and (2) any VAT reverse charge thereon that Parent certifies acting in good faith that it is not entitled to recover (by way of credit or repayment) as input tax (together with any related interest or penalties in respect of such VAT reverse charge but excluding any interest or penalties arising as a result of the unreasonable delay or default of Parent), is equal to the amount of the Parent Termination Payment that would be payable but for this subclause (B) (the amount of such reduction being the “Adjustment Amount”); and
(C) the Company covenants to pay to Parent on written demand and on an after-Tax basis an amount equal to the Adjustment Amount save to the extent that such Adjustment Amount has previously been adjusted by way of refund of such part of the Parent Termination Payment, the due date for payment of which shall be five Business Days after the date such written demand is received by the Company. This section 10.03(i) is subject to the provisions of Section 10.03(i) of the Company Disclosure Schedule.
(j) Any reference in Section 10.03(i) or Section 10.03(i) of the Company Disclosure Schedule to Parent shall where applicable be regarded as referring to the representative member of any VAT group of which Parent is a member, and “finally determined” shall mean determined by HMRC or, if such determination is appealed, a court or tribunal in a decision or judgment in respect of which no right of appeal exists (or in relation to which any periods for appeal have expired) or, whether or not such determination is appealed, as provided in a binding agreement made with HMRC.
(k) The parties anticipate that any Company Payment shall be outside the scope of UK VAT and not otherwise subject to VAT.
(l) For the purposes of Section 10.03(i)(ii)(C), and Section 10.03(i) of the Company Disclosure Schedule, a covenant or indemnity being given on an “after-Tax basis” means that the amount payable (the “Payment”) pursuant to such covenant or indemnity (as applicable) shall be calculated in such a manner as will ensure that, after taking into account: (A) any Tax required to be deducted or withheld from the Payment (save to the extent that Parent has not provided a W-8BEN-E when it was entitled to do so, and provision of a W-8BEN-E would have prevented such deduction or withholding being required) and any additional amounts required to be paid by the payer of the Payment in consequence of such withholding; (B) the amount and timing of any additional Tax which becomes (or would become, but for the use of any credit or other relief which would otherwise have been available to reduce the Tax liabilities of any member of the recipient’s Group) payable by the recipient of the Payment as a result of the Payment’s being chargeable to Tax in the hands of that person; and (C) the amount and timing of any Tax benefit which is obtained by the recipient of the Payment (or any member of the recipient’s Group) to the extent that such Tax benefit is attributable to the matter giving rise to the obligation to make the Payment or the receipt of the Payment, the recipient of the Payment is in the same position as that in which it would have been if the matter giving rise to the obligation to make a Payment under this Section 10.03(l) had not occurred, provided that if any party to this Agreement 9.2 shall have assigned or novated survive the benefit of this Agreement in whole or in part or shall, after the date termination of this Agreement, have changed its Tax residence or the permanent establishment to which the rights under this Agreement are allocated then no Payment to that party shall be increased by reason regardless of the operation of clauses (A) through (C) (inclusive) to any greater extent than would have been the case had no such assignment, novation or change taken place. In this Section 10.03(l), references to “Tax” shall exclude “VAT” and references to a “W-8BEN-E” shall mean a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such Paymentcircumstances thereof.
(m) None of the Financing Sources shall have any liability to the Company, any of its Subsidiaries or any Person that is an Affiliate of the Company prior to giving effect to the Mergers relating to or arising out of this Agreement or the Debt Financing, whether at law, or equity, in contract, in tort or otherwise, and neither the Company nor any Person that is an Affiliate of the Company prior to giving effect to the Mergers shall have any rights or claims directly against any of the Financing Sources hereunder or thereunder. The foregoing shall not impair, supplement, or otherwise modify any of the commitments and other o
Appears in 1 contract
Sources: Acquisition Support Agreement (CRCC-Tongguan Investment Co., Ltd.)
Termination Payment. (a) If this If, but only if, the Agreement is terminated: :
(i) by either the Company or Parent pursuant to Section 10.01(c)(iSection 8.1(b)(i) or (ii) by the Company Parent pursuant to Section 10.01(d)(iii), then the Company shall pay to Parent Section 8.1(d)(i) and (or its designee), in cash and by way of compensation, a payment in an amount equal to $1,180,000,000 (the “Company Termination Payment”) at or prior to, and as a condition to the effectiveness of, the termination of this Agreement in the case of a termination pursuant to Section 10.01(d)(iii) or as promptly as practicable (and, in any event, within two Business Days following such terminationA) in the case of a termination pursuant to Section 10.01(c)(i).
(b) If (i) this Agreement is terminated by Parent or Company pursuant to Section 10.01(b)(iiiSection 8.1(b)(i), (ii) the Parent Stockholder Approval shall have been obtained and the Company Stockholder Approval shall not have been obtained prior to such termination termination, and (B) in any such case (x) after the date of this Agreement, a Company an Acquisition Proposal shall have been made to any of the Company Parties or any Person shall have publicly announced an intention (whether or not conditional) to make an Acquisition Proposal with respect to any of the Company Parties (and such Acquisition Proposal or publicly made known and announced intention shall not have been publicly withdrawn at least four Business Days prior to the Company Stockholder Meeting without qualification before such termination), and (iiiy) on or prior to the twelve-month anniversary Company, within twelve (12) months of such the termination of this Agreement: (A) , consummates a transaction constituting a Company Acquisition Proposal is consummated; regarding, or (B) executes a definitive agreement relating to a Company which is later consummated with respect to, an Acquisition Proposal is entered into by the Company or any of its Affiliates (in each caseProposal, whether or not such Company Acquisition Proposal is the same as the original Company Acquisition Proposal publicly made known or publicly announced), then, then the Company shall pay pay, or cause to Parent (or its designee) be paid, to Parent, the Termination Payment, by way wire transfer of compensation the Company Termination Payment no same day funds to an account designated by Parent, not later than the consummation of such Company transaction arising from such Acquisition Proposal; provided, however, that if the Company shall have actually paid the Company No Vote Payment pursuant to Section 10.03(e), then only the incremental amount between the Company No Vote Payment and the Company Termination Payment shall be payable. “Company Acquisition Proposal” for purposes of this Section 10.03(b) shall have Section 8.3(a)(i), the meaning assigned thereto references to “ten percent (10%)” in the definition thereof set forth in Section 1.01, except that of Acquisition Proposal shall be deemed to be references in the definition to “20%” shall be replaced by “fifty percent (50%)”.; or
(cii) If this Agreement is terminated by the Company pursuant to Section 10.01(d)(i), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to $1,415,000,000 (the “Parent Termination Payment”), subject to any adjustment in accordance with Section 10.03(i).
(d) If this Agreement is terminated by either the Company or Parent pursuant to Section 10.01(b)(ivSection 8.1(b)(iii), Parent shall pay to the Company shall pay, or cause to be paid, to Parent the Parent Expense Amount (or its designee), in cash and by way of compensation wire transfer to an account designated by Parent) within three two (2) Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to the Parent Termination Payment; provided, that such amount shall be payable only if either (i) the Company Stockholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iii) has not been satisfied at the time of such termination, (B) the Company has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iv).; or
(eiii) If this Agreement is terminated by either the Company or Parent pursuant to Section 10.01(b)(iiiSection 8.1(b)(iii), the Company shall pay to Parent and (or its designee), in cash and by way of compensation within three Business Days x) after the date of this Agreement, an Acquisition Proposal shall have been made to any of the Company Parties or any Person shall have publicly announced an intention (whether or not conditional) to make an Acquisition Proposal with respect to any of the Company Parties (and such Acquisition Proposal or publicly announced intention shall not have been publicly withdrawn without qualification before such termination), and (y) the Company, within twelve (12) months of the termination of this Agreement, consummates a payment in transaction regarding, or executes a definitive agreement which is later consummated with respect to, an amount equal Acquisition Proposal, then the Company shall pay or cause to $270,000,000 (be paid, to Parent the “Company No Vote Payment”); providedTermination Fee plus, that such amount shall be payable only if either (inot previously paid pursuant to Section 8.3(a)(ii) above, the Parent Shareholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iv) has not been satisfied at the time of such terminationExpense Amount, (B) Parent has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iii).
(f) Any payment of the Company Termination Payment or the Company No Vote Payment (each, a “Company Payment”) or the Parent Termination Payment shall be made by wire transfer of immediately available same day funds to an account designated by Parent, not later than the consummation of such transaction arising from such Acquisition Proposal; provided, however, that for purposes of this Section 8.3(a)(iv), the references to “ten percent (10%)” in writing the definition of Acquisition Proposal shall be deemed to be references to “fifty percent (50%)”; or
(iv) by the Company pursuant to Section 8.1(c)(ii), then the Company shall pay, or cause to be paid, to Parent the Termination Payment, by wire transfer of same day funds to an account designated by Parent as a condition to the effectiveness of such termination; or
(v) by Parent pursuant to Section 8.1(d)(ii), then the Company shall pay, or cause to be paid, to Parent the Termination Payment, by wire transfer of same day funds to an account designated by Parent, within two (2) Business Days of such termination; or
(vi) by either the Company or Parent pursuant to Section 8.1(b)(iv), then Parent shall pay, or cause to be paid, to the Company the Company Expense Amount (by wire transfer to an account designated by the Company) within two (2) Business Days of such termination.
(b) Notwithstanding anything to the contrary set forth in this Agreement, as applicable. Any Company Payment or Parent Termination Payment shall be made free and clear of and without deduction or withholding of any Taxes; providedthe parties agree that:
(i) in the case of the Company Payment, Parent has supplied the Company with a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to the payment of the Company Payment;
(ii) in the case of the Company Payment, in the event that deductions or withholdings on account of U.S. federal income Taxes should have been made under applicable law, then Parent shall bear the cost of such Taxes;
(iii) in the case of the Parent Termination Payment, in the event that deductions or withholdings on account of UK income Tax should have been made under applicable law, then the Company shall bear the cost of such Taxes; and
(iv) in the case of the Parent Termination Payment, Parent may deduct or withhold any amounts in respect of VAT required or permitted to be withheld in accordance with the following provisions of this Section 10.03.
(g) The parties agree and understand that (x) in no event circumstances shall the Company be required to pay the Company Termination Payment on more than one occasion or the Company No Vote Payment on more than one occasion, in each case under any circumstances, and the Company No Vote Payment shall be credited toward any subsequent payment of the Company Termination Payment, and in no event shall Parent be required to pay the Parent Termination Payment or the Company Expense Amount earlier than one (1) full Business Day after receipt of appropriate wire transfer instructions from the party entitled to payment; and
(ii) under no circumstances shall the Company or Parent be required to pay the Termination Payment or the Company Expense Amount on more than one occasion under any circumstances, and occasion.
(yc) except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, in no event shall Parent be entitled, pursuant to this Section 10.03, to receive an amount greater than the Company Termination Payment and Company No Vote Payment, as applicable (subject to the understanding that the Company No Vote Payment is set off against the Company Termination Payment when the payment Each of the Company Termination Payment follows the payment of the Company No Vote Payment under Section 10.03(e)), and any applicable additional amounts pursuant to the last two sentences of this Section 10.03(g) (such additional amounts, collectively, the “Parent Additional Amounts”), and in no event shall the Company be entitled, pursuant to this Section 10.03, to receive an amount greater than the Parent Termination Payment and any applicable additional amounts pursuant to Section 6.03(c) and/or the last two sentences of this Section 10.3(g) (such additional amounts, collectively, the “Company Additional Amounts”). Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, parties hereto acknowledges that (i) if Parent receives a Company Payment and any applicable Parent Additional Amounts from the Company pursuant to this Section 10.03, or if the Company receives the Parent Termination Payment and any applicable Company Additional Amounts from Parent pursuant to this Section 10.03, such payment shall be the sole and exclusive remedy of the receiving party against the paying party and its Subsidiaries and their respective former, current or future partners, equityholders, managers, members, Affiliates and Representatives, and none of the paying party, any of its Subsidiaries or any of their respective former, current or future partners, equityholders, managers, members, Affiliates or Representatives shall have any further liability or obligation, in each case relating to or arising out of this Agreement or the transactions contemplated hereby and (ii) if (A) Parent, Bidco or either Merger Sub receives any payments from the Company in respect of any breach of this Agreement and thereafter Parent receives a Company Payment pursuant to this Section 10.03 or (B) the Company receives any payments from Parent, Bidco or either Merger Sub in respect of any breach of this Agreement and thereafter the Company receives the Parent Termination Payment, the amount of such Company Termination Payment or such Parent Termination Payment, as applicable, shall be reduced by the aggregate amount of such payments made by the party paying the Company Payment or the Parent Termination Payment, as applicable, in respect of any such breaches (in each case, after taking into account any Parent Additional Amounts or Company Additional Amounts, as applicable). The parties acknowledge that the agreements contained in this Section 10.03 Section 8.3 are an integral part of the transactions contemplated by this Agreement, (ii) neither the Termination Payment nor the Company Expense Amount is a penalty, but is liquidated damages, in a reasonable amount that will compensate the Company or Parent, as the case may be, in the circumstances in which such fee is payable for the efforts and resources expended and opportunities foregone while negotiating this Agreement and in reliance on this Agreement and on the expectation of the consummation of the transactions contemplated hereby, thatwhich amount would otherwise be impossible to calculate with precision, and (iii) without these agreements, the parties would not enter into this Agreement and that any amounts payable pursuant to this Section 10.03 do not constitute a penalty. AccordinglyAgreement; accordingly, if any party the Company or Parent, as the case may be, fails to promptly timely pay any Company Payment or the Parent Termination Payment amount due pursuant to this Section 10.03Section 8.3 and, in order to obtain such party shall also pay any out-of-pocket costs and expenses (together with any irrecoverable VAT incurred thereonpayment, and including reasonable legal fees and expenses) incurred by either the party entitled to such payment in connection with Company or Parent, as the case may be, commences a legal action to enforce this Agreement suit that results in a judgment against the other party for the payment of any amount set forth in this Section 8.3, such paying party shall pay the other party its costs and Expenses in connection with such suit, together with interest on such amount against at the party failing to promptly pay such amount. Any Company Payment or Parent Termination Payment not paid when due pursuant to this Section 10.03 shall bear interest annual rate of five percent (5%) for the period from the date such amount is due until payment was required to be made through the date paid at a rate equal to the prime such payment was actually received, or such lesser rate as published in The Wall Street Journal, Eastern Edition in effect on is the date of such payment.
(h) The Parent Termination Payment and the Company Termination Payment (in each case if any) shall be VAT inclusivemaximum permitted by applicable Law.
(i) The parties hereto intend that any payment of a Parent If one party to this Agreement (the “Termination PaymentPayor”) is required to pay another party to this Agreement (the “Termination Payee”) the Termination Payment or Company Expense Amount, being compensatory in natureas the case may be, such Termination Payment or Company Expense Amount, as the case may be, shall not be treated (in whole or in part) as consideration for a supply for the purposes of VAT and, accordingly, Parent shall:
(i) file its relevant VAT return paid into escrow on the basis that the payment of any such Parent Termination Payment falls outside the scope of VAT; and
(ii) pay the full amount of any such Parent Termination Payment free and clear of any deduction or adjustment on account of VAT, it being understood and agreed that if it is finally determined that the Parent Termination Payment is (in whole or in part) consideration for a supply for the purposes of VAT then:
(A) Parent shall (1) subject to having received the relevant amount from the Company as provided in sub-clause (C) below, promptly account for and pay to HMRC such VAT together with any associated interest and penalties; and (2) use its reasonable best efforts to recover (by refund, credit or otherwise) any such VAT at the residual recovery rate generally applied by Parent in respect of input VAT incurred on its overheads from time to time;
(B) the amount of the Parent Termination Payment payable by Parent shall be reduced so that the sum of (1) the Parent Termination Payment (as so reduced) and (2) any VAT reverse charge thereon that Parent certifies acting in good faith that it is not entitled to recover (by way of credit or repayment) as input tax (together with any related interest or penalties in respect of such VAT reverse charge but excluding any interest or penalties arising as a result of the unreasonable delay or default of Parent), is equal to the amount of the Parent Termination Payment that would be payable but for this subclause (B) (the amount of such reduction being the “Adjustment Amount”); and
(C) the Company covenants to pay to Parent on written demand and on an after-Tax basis an amount equal to the Adjustment Amount save to the extent that such Adjustment Amount has previously been adjusted by way of refund of such part of the Parent Termination Payment, the due date for payment of which shall be five Business Days after the date such written demand payment is received by the Company. This section 10.03(i) is subject to the provisions of Section 10.03(i) of the Company Disclosure Schedule.
(j) Any reference in Section 10.03(i) or Section 10.03(i) of the Company Disclosure Schedule to Parent shall where applicable be regarded as referring to the representative member of any VAT group of which Parent is a member, and “finally determined” shall mean determined by HMRC or, if such determination is appealed, a court or tribunal in a decision or judgment in respect of which no right of appeal exists (or in relation to which any periods for appeal have expired) or, whether or not such determination is appealed, as provided in a binding agreement made with HMRC.
(k) The parties anticipate that any Company Payment shall be outside the scope of UK VAT and not otherwise subject to VAT.
(l) For the purposes of Section 10.03(i)(ii)(C), and Section 10.03(i) of the Company Disclosure Schedule, a covenant or indemnity being given on an “after-Tax basis” means that the amount payable (the “Payment”) pursuant to such covenant or indemnity (as applicable) shall be calculated in such a manner as will ensure that, after taking into account: (A) any Tax required to be deducted or withheld from the Payment (save to the extent that Parent has not provided a W-8BEN-E when it was entitled to do so, and provision of a W-8BEN-E would have prevented such deduction or withholding being required) and any additional amounts required to be paid by the payer Termination Payor pursuant to this Agreement by wire transfer of immediately available funds to an escrow account designated in accordance with this Section 8.3(d). In the event that the Termination Payor is obligated to pay the Termination Payee the Termination Payment or Company Expense Amount, as the case may be, the amount payable to the Termination Payee in any tax year of the Termination Payee shall not exceed the lesser of (i) the Termination Payment in consequence or Company Expense Amount, as the case may be, of the Termination Payee, and (ii) the sum of (A) the maximum amount that can be paid to the Termination Payee without causing the Termination Payee to fail to meet the requirements of Section 856(c)(2) and (3) of the Code for the relevant tax year, determined as if the payment of such withholding; amount did not constitute income described in Sections 856(c)(2) or 856(c)(3) of the Code (“Qualifying Income”) and the Termination Payee has $1,000,000 of income from unknown sources during such year which is not Qualifying Income (in addition to any known or anticipated income which is not Qualifying Income), in each case, as determined by the Termination Payee’s independent accountants, plus (B) in the event the Termination Payee receives either (x) a letter from the Termination Payee’s counsel indicating that the Termination Payee has received a ruling from the IRS as described below in this Section 8.3(d) or (y) an opinion from the Termination Payee’s outside counsel as described below in this Section 8.3(d), an amount equal to the excess of the Termination Payment or Company Expense Amount, as the case may be, less the amount payable under clause (A) above.
(ii) To secure the Termination Payor’s obligation to pay these amounts, the Termination Payor shall deposit into escrow an amount in cash equal to the Termination Payment or Company Expense Amount, as the case may be, with an escrow agent selected by the Termination Payor on such terms (subject to this Section 8.3(d)) as shall be mutually agreed upon by the Termination Payor, the Termination Payee and the escrow agent. The payment or deposit into escrow of the Termination Payment or Company Expense Amount, as the case may be, pursuant to this Section 8.3(d) shall be made at the time the Termination Payor is obligated to pay the Termination Payee such amount pursuant to Section 8.3 by wire transfer. The escrow agreement shall provide that the Termination Payment or Company Expense Amount, as the case may be, in escrow or any portion thereof shall not be released to the Termination Payee unless the escrow agent receives any one or combination of the following: (i) a letter from the Termination Payee’s independent accountants indicating the maximum amount that can be paid by the escrow agent to the Termination Payee without causing the Termination Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute Qualifying Income and the Termination Payee has $1,000,000 of income from unknown sources during such year which is not Qualifying Income (in addition to any known or anticipated income which is not Qualifying Income), in which case the escrow agent shall release such amount to the Termination Payee, or (ii) a letter from the Termination Payee’s counsel indicating that (A) the Termination Payee received a ruling from the IRS holding that the receipt by the Termination Payee of the Termination Payment or Company Expense Amount, as the case may be, would either constitute Qualifying Income or would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code or (B) the amount and timing of any additional Tax which becomes (or would become, but for Termination Payee’s outside counsel has rendered a legal opinion to the use of any credit or other relief which would otherwise have been available to reduce effect that the Tax liabilities of any member receipt by the Termination Payee of the recipient’s GroupTermination Payment or Company Expense Amount, as the case may be, should either constitute Qualifying Income or should be excluded from gross income within the meaning of Sections 856(c)(2) payable by the recipient and (3) of the Payment as a result Code, in which case the escrow agent shall release the remainder of the Payment’s being chargeable Termination Payment or Company Expense Amount, as the case may be, to Tax the Termination Payee. The Termination Payor agrees to amend this Section 8.3(d) at the reasonable request of the Termination Payee in order to (i) maximize the hands portion of the Termination Payment or Company Expense Amount, as the case may be, that person; may be distributed to the Termination Payee hereunder without causing the Termination Payee to fail to meet the requirements of Sections 856(c)(2) and (C3) the amount and timing of any Tax benefit which is obtained by the recipient of the Payment Code, (ii) improve the Termination Payee’s chances of securing a favorable ruling described in this Section 8.3(d) or any member (iii) assist the Termination Payee in obtaining a favorable legal opinion from its outside counsel as described in this Section 8.3(d). Any amount of the recipient’s Group) Termination Payment or Company Expense Amount, as the case may be, that remains unpaid as of the end of a taxable year shall be paid as soon as possible during the following taxable year, subject to the extent that such Tax benefit is attributable to the matter giving rise to the obligation to make the Payment or the receipt foregoing limitations of the Payment, the recipient of the Payment is in the same position as that in which it would have been if the matter giving rise to the obligation to make a Payment under this Section 10.03(l) had not occurredSection 8.3(d), provided that if any party the obligation of the Termination Payor to this Agreement pay the unpaid portion of the Termination Payment or Company Expense Amount, as the case may be, shall have assigned or novated terminate on the benefit of this Agreement in whole or in part or shall, after December 31 following the date which is five (5) years from the date of this Agreement, have changed its Tax residence or the permanent establishment to which the rights under this Agreement are allocated then no Payment to that party shall be increased by reason of the operation of clauses (A) through (C) (inclusive) to any greater extent than would have been the case had no such assignment, novation or change taken place. In this Section 10.03(l), references to “Tax” shall exclude “VAT” and references to a “W-8BEN-E” shall mean a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such Payment.
(m) None of the Financing Sources shall have any liability to the Company, any of its Subsidiaries or any Person that is an Affiliate of the Company prior to giving effect to the Mergers relating to or arising out of this Agreement or the Debt Financing, whether at law, or equity, in contract, in tort or otherwise, and neither the Company nor any Person that is an Affiliate of the Company prior to giving effect to the Mergers shall have any rights or claims directly against any of the Financing Sources hereunder or thereunder. The foregoing shall not impair, supplement, or otherwise modify any of the commitments and other o
Appears in 1 contract
Sources: Merger Agreement (American Realty Capital Trust IV, Inc.)
Termination Payment. (a) If this Agreement is terminated: :
(i) (A) by Parent pursuant to Section 10.01(c)(i8.1(b)(i) or (ii) by Parent Outside Date), the Company pursuant to Section 10.01(d)(iii)8.1(b)(ii) (Company Outside Date) or by Parent pursuant to Section 8.1(c) (Representations, then Warranties and Covenants of the Company shall pay to Parent Company) and (or its designee), in cash and by way of compensation, a payment in an amount equal to $1,180,000,000 (the “Company Termination Payment”x) at or prior toto such termination an Acquisition Proposal shall have been made and shall not have been withdrawn prior to such termination, and as a condition to the effectiveness of, (y) within twelve months following the termination of this Agreement in the case of a termination pursuant to Section 10.01(d)(iii8.1(b)(i) (Parent Outside Date), Section 8.l(b)(ii) (Company Outside Date) or as promptly as practicable Section 8.1(c) (andRepresentations, in any event, within two Business Days following such termination) in Warranties and Covenants of the case of a termination pursuant to Section 10.01(c)(i).
(b) If (i) this Agreement is terminated by Parent or Company pursuant to Section 10.01(b)(iiiCompany), (ii) prior the Company consummates a Company Acquisition, enters into a definitive agreement to such termination and after effect a Company Acquisition, or the date of this Agreement, Company Board or any committee thereof recommends a Company Acquisition Proposal shall have been publicly announced or publicly made known and shall not have been publicly withdrawn at least four Business Days prior to the Company Stockholder Meeting Company’s stockholders, and (iii) on or prior to the twelve-month anniversary of such termination of this Agreement: (A) a transaction constituting a Company Acquisition Proposal is consummated; subsequently consummated (whether or not it is consummated within such 12 month period) or (B) a definitive agreement relating by Parent pursuant to a Company Acquisition Proposal is entered into by the Company or any Section 8.1(e) (Change in Recommendation; Breach of its Affiliates (in each case, whether or not such Company Acquisition Proposal is the same as the original Company Acquisition Proposal publicly made known or publicly announcedAgreement), thenthen in any case, the Company shall pay to Parent (or its designeewithin two (2) by way of compensation Business Days after the Company Termination Payment no later than the consummation of date that such Company Acquisition Proposal; provided, that if the Company shall have actually paid the Company No Vote Payment pursuant is consummated (with respect to Section 10.03(ea termination described in clause (A), then only the incremental amount between the Company No Vote Payment and the Company Termination Payment shall be payable. “Company Acquisition Proposal” for purposes of this Section 10.03(b) shall have the meaning assigned thereto in the definition thereof set forth in Section 1.01, except that references in the definition to “20%” shall be replaced by “50%”.
or within two (c2) If this Agreement is terminated by the Company pursuant to Section 10.01(d)(i), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of such termination of this Agreement (or such other later date as with respect to a termination described in clause (B)), the Company has notified in writing to Parent on the date of termination)Termination Fee, a payment in an amount equal to $1,415,000,000 (the “Parent Termination Payment”), subject to any adjustment in accordance with Section 10.03(i).
(d) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iv), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to the Parent Termination Payment; provided, that such which amount shall be payable only if either (i) the Company Stockholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iii) has not been satisfied at the time of such termination, (B) the Company has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iv).
(e) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iii), the Company shall pay to Parent (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement, a payment in an amount equal to $270,000,000 (the “Company No Vote Payment”); provided, that such amount shall be payable only if either (i) the Parent Shareholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iv) has not been satisfied at the time of such termination, (B) Parent has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iii).
(f) Any payment of the Company Termination Payment or the Company No Vote Payment (each, a “Company Payment”) or the Parent Termination Payment shall be made by wire transfer of immediately available funds to an account designated in writing by Parent; or
(ii) Reserved; or
(iii) by Parent or the CompanyCompany pursuant to Section 8.1(f) (Alternative Acquisition Agreement), then the Company shall, prior to and as applicable. Any a condition of, such termination pay to Parent the Company Payment or Parent Termination Payment shall be made free and clear Fee, in cash by wire transfer of and without deduction or withholding of any Taxesimmediately available funds to an account designated by Parent; provided:or
(iiv) in the case of by the Company Paymentpursuant to Section 8.1(h) (Failure to Close), or by Parent has supplied pursuant to Section 8.1(b)(i) (Parent Outside Date) at a time when the Company with a properly completed IRS Form W-8BEN-E, on which the Company is entitled could have terminated this Agreement pursuant to rely, claiming the benefits of, and establishing an exemption Section 8.1(h) (Failure to withholding under, the income tax treaty between the United States and the United Kingdom prior to the payment of the Company Payment;
(ii) in the case of the Company Payment, in the event that deductions or withholdings on account of U.S. federal income Taxes should have been made under applicable lawClose), then Parent shall bear pay to the cost Company the Financing Termination Fee promptly (but in any event within two Business Days) following such termination, which amount shall be payable in cash by wire transfer of immediately available funds to an account designated by the Company. Notwithstanding the terms of Section 8.3(a)(i) (Termination Payment), if (a) this Agreement is terminated by Parent pursuant to Section 8.1(b)(i) (Parent Outside Date) and as a result of such Taxes;
termination Parent would be entitled to receive a Company Termination Fee pursuant to Section 8.3(a)(i) (iiiTermination Payment), (b) in the case as of the date of such termination all of the conditions set forth in Section 7.1 (Conditions to the Obligations of Each Party) and Section 7.2 (Conditions to the Obligations of Parent Termination Payment, in the event that deductions or withholdings on account of UK income Tax should and Merger Sub) have been made under applicable lawsatisfied (other than (A) the condition set forth in Section 7.2(f) (Required Governmental Approvals) and (B) those conditions that both (i) by their terms can only be satisfied at the Closing and (ii) would be satisfied if the Closing were to occur on the date of such termination by Parent), and (c) as of the date of such termination by Parent the Financing Commitments are no longer in effect on their original terms (as may be modified by the Company’s written consent) for the maximum amount of the Financing thereunder, then the Company shall bear not be required to make the cost of such Taxes; and
payments to Parent otherwise contemplated in Section 8.3(a)(i) (iv) in the case of the Parent Termination Payment). For the avoidance of doubt, Parent may deduct or withhold any amounts in respect of VAT required or permitted to be withheld in accordance with the following provisions of this Section 10.03.
(g) The parties agree and understand that (x) in no event shall the Company shall not be required to pay the Company Termination Payment on more than one occasion or the Company No Vote Payment on more than one occasion, in each case under any circumstances, and the Company No Vote Payment shall be credited toward any subsequent payment of the Company Termination Payment, Fee and in no event Parent shall Parent not be required to pay the Parent Termination Payment on more than one occasion under any circumstancesFinancing Termination Fee, and (y) except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, in no event shall Parent even if there is more than one basis upon which such fee would be entitled, pursuant to this Section 10.03, to receive an amount greater than the Company Termination Payment and Company No Vote Payment, as applicable (subject to the understanding that the Company No Vote Payment is set off against the Company Termination Payment when the payment of the Company Termination Payment follows the payment of the Company No Vote Payment under Section 10.03(e)), and any applicable additional amounts pursuant to the last two sentences of this Section 10.03(g) (such additional amounts, collectively, the “Parent Additional Amounts”), and in no event shall the Company be entitled, pursuant to this Section 10.03, to receive an amount greater than the Parent Termination Payment and any applicable additional amounts pursuant to Section 6.03(c) and/or the last two sentences of this Section 10.3(g) (such additional amounts, collectively, the “Company Additional Amounts”). Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, (i) if Parent receives a Company Payment and any applicable Parent Additional Amounts from the Company pursuant to this Section 10.03, or if the Company receives the Parent Termination Payment and any applicable Company Additional Amounts from Parent pursuant to this Section 10.03, such payment shall be the sole and exclusive remedy of the receiving party against the paying party and its Subsidiaries and their respective former, current or future partners, equityholders, managers, members, Affiliates and Representatives, and none of the paying party, any of its Subsidiaries or any of their respective former, current or future partners, equityholders, managers, members, Affiliates or Representatives shall have any further liability or obligation, in each case relating to or arising out of this Agreement or the transactions contemplated hereby and (ii) if (A) Parent, Bidco or either Merger Sub receives any payments from the Company in respect of any breach of this Agreement and thereafter Parent receives a Company Payment pursuant to this Section 10.03 or (B) the Company receives any payments from Parent, Bidco or either Merger Sub in respect of any breach of this Agreement and thereafter the Company receives the Parent Termination Payment, the amount of such Company Termination Payment or such Parent Termination Payment, as applicable, shall be reduced by the aggregate amount of such payments made by the party paying the Company Payment or the Parent Termination Payment, as applicable, in respect of any such breaches (in each case, after taking into account any Parent Additional Amounts or Company Additional Amounts, as applicable). The parties acknowledge that the agreements contained in this Section 10.03 are an integral part of the transactions contemplated hereby, that, without these agreements, the parties would not enter into this Agreement and that any amounts payable pursuant to this Section 10.03 do not constitute a penalty. Accordingly, if any party fails to promptly pay any Company Payment or the Parent Termination Payment due pursuant to this Section 10.03, such party shall also pay any out-of-pocket costs and expenses 8.3 (together with any irrecoverable VAT incurred thereon, and including reasonable legal fees and expenses) incurred by the party entitled to such payment in connection with a legal action to enforce this Agreement that results in a judgment for such amount against the party failing to promptly pay such amount. Any Company Payment or Parent Termination Payment not paid when due pursuant to this Section 10.03 shall bear interest from the date such amount is due until the date paid at a rate equal to the prime rate as published in The Wall Street Journal, Eastern Edition in effect on the date of such payment.
(h) The Parent Termination Payment and the Company Termination Payment (in each case if any) shall be VAT inclusive.
(i) The parties hereto intend that any payment of a Parent Termination Payment, being compensatory in nature, shall not be treated (in whole or in part) as consideration for a supply for the purposes of VAT and, accordingly, Parent shall:
(i) file its relevant VAT return on the basis that the payment of any such Parent Termination Payment falls outside the scope of VAT; and
(ii) pay the full amount of any such Parent Termination Payment free and clear of any deduction or adjustment on account of VAT, it being understood and agreed that if it is finally determined that the Parent Termination Payment is (in whole or in part) consideration for a supply for the purposes of VAT then:
(A) Parent shall (1) subject to having received the relevant amount from the Company as provided in sub-clause (C) below, promptly account for and pay to HMRC such VAT together with any associated interest and penalties; and (2) use its reasonable best efforts to recover (by refund, credit or otherwise) any such VAT at the residual recovery rate generally applied by Parent in respect of input VAT incurred on its overheads from time to time;
(B) the amount of the Parent Termination Payment payable by Parent shall be reduced so that the sum of (1) the Parent Termination Payment (as so reduced) and (2) any VAT reverse charge thereon that Parent certifies acting in good faith that it is not entitled to recover (by way of credit or repayment) as input tax (together with any related interest or penalties in respect of such VAT reverse charge but excluding any interest or penalties arising as a result of the unreasonable delay or default of Parent), is equal to the amount of the Parent Termination Payment that would be payable but for this subclause (B) (the amount of such reduction being the “Adjustment Amount”); and
(C) the Company covenants to pay to Parent on written demand and on an after-Tax basis an amount equal to the Adjustment Amount save to the extent that such Adjustment Amount has previously been adjusted by way of refund of such part of the Parent Termination Payment, the due date for payment of which shall be five Business Days after the date such written demand is received by the Company. This section 10.03(i) is subject to the provisions of Section 10.03(i) of the Company Disclosure Schedule.
(j) Any reference in Section 10.03(i) or Section 10.03(i) of the Company Disclosure Schedule to Parent shall where applicable be regarded as referring to the representative member of any VAT group of which Parent is a member, and “finally determined” shall mean determined by HMRC or, if such determination is appealed, a court or tribunal in a decision or judgment in respect of which no right of appeal exists (or in relation to which any periods for appeal have expired) or, whether or not such determination is appealed, as provided in a binding agreement made with HMRC.
(k) The parties anticipate that any Company Payment shall be outside the scope of UK VAT and not otherwise subject to VAT.
(l) For the purposes of Section 10.03(i)(ii)(C), and Section 10.03(i) of the Company Disclosure Schedule, a covenant or indemnity being given on an “after-Tax basis” means that the amount payable (the “Payment”) pursuant to such covenant or indemnity (as applicable) shall be calculated in such a manner as will ensure that, after taking into account: (A) any Tax required to be deducted or withheld from the Payment (save to the extent that Parent has not provided a W-8BEN-E when it was entitled to do so, and provision of a W-8BEN-E would have prevented such deduction or withholding being required) and any additional amounts required to be paid by the payer of the Payment in consequence of such withholding; (B) the amount and timing of any additional Tax which becomes (or would become, but for the use of any credit or other relief which would otherwise have been available to reduce the Tax liabilities of any member of the recipient’s Group) payable by the recipient of the Payment as a result of the Payment’s being chargeable to Tax in the hands of that person; and (C) the amount and timing of any Tax benefit which is obtained by the recipient of the Payment (or any member of the recipient’s Group) to the extent that such Tax benefit is attributable to the matter giving rise to the obligation to make the Payment or the receipt of the Payment, the recipient of the Payment is in the same position as that in which it would have been if the matter giving rise to the obligation to make a Payment under this Section 10.03(l) had not occurred, provided that if any party to this Agreement shall have assigned or novated the benefit of this Agreement in whole or in part or shall, after the date of this Agreement, have changed its Tax residence or the permanent establishment to which the rights under this Agreement are allocated then no Payment to that party shall be increased by reason of the operation of clauses (A) through (C) (inclusive) to any greater extent than would have been the case had no such assignment, novation or change taken place. In this Section 10.03(l), references to “Tax” shall exclude “VAT” and references to a “W-8BEN-E” shall mean a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such Payment.
(m) None of the Financing Sources shall have any liability to the Company, any of its Subsidiaries or any Person that is an Affiliate of the Company prior to giving effect to the Mergers relating to or arising out of this Agreement or the Debt Financing, whether at law, or equity, in contract, in tort or otherwise, and neither the Company nor any Person that is an Affiliate of the Company prior to giving effect to the Mergers shall have any rights or claims directly against any of the Financing Sources hereunder or thereunder. The foregoing shall not impair, supplement, or otherwise modify any of the commitments and other o
Appears in 1 contract
Sources: Merger Agreement (Telanetix,Inc)
Termination Payment. (a) Termination Payment by the Company
(i) If this Agreement is terminated: (i) by Parent terminated pursuant to (x) Section 10.01(b)(iv) (if the Company shall have communicated to the Court at the hearing to sanction the Scheme of Arrangement that the Company Board no longer supports the consummation of the Transaction or no longer wishes the Court to sanction the Scheme of Arrangement, or that the Company Board favors or approves of any Acquisition Proposal, or shall have made any other statement or communication to the Court to the effect of any of the foregoing), (y) Section 10.01(c)(i) or (z) Section 10.01(d)(iii) (or is terminated pursuant to another provision at a time that it is terminable pursuant to any such provision in the foregoing clauses (x)-(z)), or
(ii) if this Agreement is terminated by Parent or the Company pursuant to Section 10.01(d)(iii10.01(b)(iii) or Section 10.01(b)(iv); provided, in the case of this clause (ii), then that (A) an Acquisition Proposal shall have been publicly announced or made publicly known after the date of this Agreement and shall not have been publicly withdrawn without qualification at least four Business Days prior to the Company GM and the Scheme Meeting, in the case of a termination pursuant to Section 10.01(b)(iii), or prior to such termination, in the case of a termination pursuant to Section 10.01(b)(iv), and (B) within 12 months of the date this Agreement is so terminated, (x) the Company enters into a definitive agreement providing for an Acquisition Proposal and the transaction contemplated thereby is subsequently consummated (regardless of whether such consummation occurs within such 12-month period), or (y) an Acquisition Proposal is consummated; provided, that for purposes of this Section 10.03(a)(ii), all references to “20%” in the definition of Acquisition Proposal shall be deemed to be references to “50%”, then, in either the case of clause (i) or clause (ii) of this Section 10.03(a), the Company shall pay to Parent (or its designee), in cash and by way of compensationcash, a payment in an amount equal to $1,180,000,000 6,880,000 (the “Company Termination Payment”) subject to adjustment under clause (f) below, (x) in the case of Section 10.03(a)(i), at or prior to, and as a condition to the effectiveness of, the termination of this Agreement in the case of a termination pursuant to Section 10.01(d)(iii) by the Company, or as promptly as practicable (and, in any event, within two Business Days following such termination) in the case of a termination pursuant by P▇▇▇▇▇ and, (y) in the case of Section 10.03(a)(ii), at or prior to Section 10.01(c)(i)the first to occur of (1) the entry into a definitive agreement providing for an Acquisition Proposal referred to therein and (y) the consummation of an Acquisition Proposal referred to therein.
(b) If Termination Payment by P▇▇▇▇▇
(i) If this Agreement is terminated pursuant to (x) Section 10.01(c)(iii) or (y) Section 10.01(d)(i) (or is terminated pursuant to another provision at a time that it is terminable pursuant to any such provision in the foregoing clauses (x) or(y)), or
(ii) if this Agreement is terminated by Parent or the Company pursuant to Section 10.01(b)(iii10.01(b)(v); provided, in the case of this clause (ii), that (iiA) prior to such termination and after the date of this Agreement, a Company Parent Acquisition Proposal shall have been publicly announced or made publicly made known after the date of this Agreement and shall not have been publicly withdrawn without qualification at least four Business Days prior to the Company Parent Stockholder Meeting and (iiiB) on or prior to within 12 months of the twelvedate this Agreement is so terminated, (x) Parent enters into a definitive agreement providing for a Parent Acquisition Proposal and the transaction contemplated thereby is subsequently consummated (regardless of whether such consummation occurs within such 12-month anniversary of such termination of this Agreement: period), or (Ay) a transaction constituting a Company Parent Acquisition Proposal is consummated; or (B) a definitive agreement relating to a Company Acquisition Proposal is entered into by the Company or any of its Affiliates (in each case, whether or not such Company Acquisition Proposal is the same as the original Company Acquisition Proposal publicly made known or publicly announced), then, the Company shall pay to Parent (or its designee) by way of compensation the Company Termination Payment no later than the consummation of such Company Acquisition Proposal; provided, that if the Company shall have actually paid the Company No Vote Payment pursuant to Section 10.03(e), then only the incremental amount between the Company No Vote Payment and the Company Termination Payment shall be payable. “Company Acquisition Proposal” for purposes of this Section 10.03(b) shall have the meaning assigned thereto in the definition thereof set forth in Section 1.0110.03(a)(ii), except that all references in the definition to “20%” in the definition of Parent Acquisition Proposal shall be replaced by deemed to be references to “50%”.
, then, in either the case of clause (ci) If or clause (ii) of this Agreement is terminated by the Company pursuant to Section 10.01(d)(i10.03(b), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination)cash, a payment in an amount equal to $1,415,000,000 58,770,000 (the “Parent Termination Payment”) subject to adjustment under clause (f) below, (x) in the case of Section 10.03(b)(i), subject to any adjustment in accordance with Section 10.03(i).
(d) If this Agreement is terminated by the Company at or Parent pursuant to Section 10.01(b)(iv)prior to, Parent shall pay and as a condition to the Company (or its designee)effectiveness of, in cash and by way of compensation within three Business Days after the date of termination of this Agreement in the case of a termination by the Company, or as promptly as practicable (or and, in any event, within two Business Days following such other later date as termination) in the Company has notified case of a termination by Parent and (y) in writing to Parent on the date case of terminationSection 10.03(b)(ii), a payment in an amount equal at or prior to the Parent Termination Payment; provided, that such amount shall be payable only if either first to occur of (i1) the Company Stockholder Approval shall have previously been obtained or entry into a definitive agreement providing for a Parent Acquisition Proposal referred to therein and (ii) (Ay) the condition consummation of a Parent Acquisition Proposal referred to termination under Section 10.01(b)(iii) has not been satisfied at the time of such termination, (B) the Company has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iv)therein.
(e) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iii), the Company shall pay to Parent (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement, a payment in an amount equal to $270,000,000 (the “Company No Vote Payment”); provided, that such amount shall be payable only if either (i) the Parent Shareholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iv) has not been satisfied at the time of such termination, (B) Parent has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iii).
(fc) Any payment of the Company Termination Payment or the Company No Vote Payment (each, a “Company Payment”) or the Parent Termination Payment Payment, as applicable, shall be made by wire transfer of immediately available funds (in U.S. dollars) to an account designated in writing by Parent or the Company, as applicable. Any Company Payment or Parent Termination Payment shall be made free and clear of and without deduction or withholding of any Taxes; provided:
(i) in the case of the Company Payment, Parent has supplied the Company with a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to the payment of the Company Payment;
(ii) in the case of the Company Payment, in the event that deductions or withholdings on account of U.S. federal income Taxes should have been made under applicable law, then Parent shall bear the cost of such Taxes;
(iii) in the case of the Parent Termination Payment, in the event that deductions or withholdings on account of UK income Tax should have been made under applicable law, then the Company shall bear the cost of such Taxes; and
(iv) in the case of the Parent Termination Payment, Parent may deduct or withhold any amounts in respect of VAT required or permitted to be withheld in accordance with the following provisions of this Section 10.03receiving Party.
(gd) The parties agree and understand that (x) in no event shall the Company or Parent, as applicable, be required to pay the Company Termination Payment on more than one occasion or the Company No Vote Payment on more than one occasion, in each case under any circumstances, and the Company No Vote Payment shall be credited toward any subsequent payment of the Company Termination Payment, and in no event shall Parent be required to pay the Parent Termination Payment on more than one occasion under any circumstances, and (y) except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, in no event shall Parent be entitled, pursuant to this Section 10.03, to receive an amount greater than the Company Termination Payment and Company No Vote Payment, as applicable (subject to the understanding that the Company No Vote Payment is set off against the Company Termination Payment when the payment of the Company Termination Payment follows the payment of the Company No Vote Payment under Section 10.03(e)), and any applicable additional amounts pursuant to the last two sentences of this Section 10.03(g) (such additional amounts, collectively, the “Parent Additional Amounts”), and in no event shall the Company be entitled, pursuant to this Section 10.03, to receive an amount greater than the Parent Termination Payment and any applicable additional amounts pursuant to Section 6.03(c) and/or the last two sentences of this Section 10.3(g) (such additional amounts, collectively, the “Company Additional Amounts”). Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, (i) if Parent receives a Company Payment and any applicable Parent Additional Amounts from the Company pursuant to this Section 10.03, or if the Company receives the Parent Termination Payment and any applicable Company Additional Amounts from Parent pursuant to this Section 10.03, such payment shall be the sole and exclusive remedy of the receiving party against the paying party and its Subsidiaries and their respective former, current or future partners, equityholders, managers, members, Affiliates and Representatives, and none of the paying party, any of its Subsidiaries or any of their respective former, current or future partners, equityholders, managers, members, Affiliates or Representatives shall have any further liability or obligation, in each case relating to or arising out of this Agreement or the transactions contemplated hereby and (ii) if (A) Parent, Bidco or either Merger Sub receives any payments from the Company in respect of any breach of this Agreement and thereafter Parent receives a Company Payment pursuant to this Section 10.03 or (B) the Company receives any payments from Parent, Bidco or either Merger Sub in respect of any breach of this Agreement and thereafter the Company receives the Parent Termination Payment, the amount of such Company Termination Payment or such Parent Termination Payment, as applicable, shall be reduced by the aggregate amount of such payments made by the party paying the Company Payment or the Parent Termination Payment, as applicable, in respect of any such breaches (in each case, after taking into account any Parent Additional Amounts or Company Additional Amounts, as applicable)on more than one occasion. The parties acknowledge that the agreements contained in this Section 10.03 are an integral part of the transactions contemplated hereby, that, without these agreements, the parties would not enter into this Agreement and that any amounts payable pursuant to this Section 10.03 do not constitute a penaltypenalty and that the Company or Parent, as applicable, will not be entitled to argue that the Company Termination Payment or the Parent Termination Payment, as applicable, is unenforceable or should be reduced in any manner. Accordingly, if any party the Company or Parent, as applicable, fails to promptly pay any Company Termination Payment or the Parent Termination Payment Payment, as applicable, due pursuant to this Section 10.03, such party the Company or Parent, as applicable, shall also pay any reasonable and documented out-of-pocket costs and expenses (together with any irrecoverable VAT incurred thereon, and including reasonable and documented legal fees and expenses) incurred by Parent or the party entitled to such payment Company, as applicable, in connection with a legal action to enforce this Agreement that results in a judgment for such amount against the party failing to promptly pay such amountCompany or Parent, as applicable. Any Company Termination Payment or the Parent Termination Payment not paid when due pursuant to this Section 10.03 shall bear interest from the date such amount is due until the date paid at a rate equal to the prime rate as published in The Wall Street Journal, Eastern Edition in effect on the date of such payment.
(h) The . Other than in the case of fraud with respect to the representations and warranties set forth in this Agreement or Willful Breach, the amounts payable by the Company or Parent, as applicable, pursuant to Section 10.03(a), together with any amounts payable pursuant to this Section 10.03(d), shall be the sole and exclusive monetary remedy of the Company and its Affiliates and Representatives or, as applicable, Parent and their Affiliates and Representatives, in the event of a termination of this Agreement in connection with which the Company Termination Payment or the Parent Termination Payment is payable by the Company or Parent, as applicable, pursuant to Section 10.03(a) and the Company Termination Payment (in each case if any) shall be VAT inclusive.
(i) The parties hereto intend that any payment of a or the Parent Termination Payment, being compensatory in natureas applicable, shall not be treated (in whole or in part) as consideration for a supply for the purposes of VAT and, accordingly, Parent shall:
(i) file its relevant VAT return on the basis that the payment of and any such Parent Termination Payment falls outside the scope of VAT; and
(iiadditional amounts payable pursuant to this Section 10.03(d) pay the full amount of any such Parent Termination Payment free and clear of any deduction or adjustment on account of VAT, it being understood and agreed that if it is finally determined that the Parent Termination Payment is (in whole or in part) consideration for a supply for the purposes of VAT then:
(A) Parent shall (1) subject are actually paid to having received the relevant amount from the Company or Parent, as provided in sub-clause (C) belowapplicable, promptly account for any and pay to HMRC such VAT together with any associated interest all losses and penalties; and (2) use its reasonable best efforts to recover (by refund, credit or otherwise) any such VAT at the residual recovery rate generally applied by Parent in respect of input VAT incurred on its overheads from time to time;
(B) the amount of the Parent Termination Payment payable by Parent shall be reduced so that the sum of (1) the Parent Termination Payment (as so reduced) and (2) any VAT reverse charge thereon that Parent certifies acting in good faith that it is not entitled to recover (by way of credit or repayment) as input tax (together with any related interest or penalties in respect of such VAT reverse charge but excluding any interest or penalties arising damages suffered as a result of the unreasonable delay or default of Parent), is equal to the amount failure of the Parent Termination Payment that would transactions contemplated hereby to be payable but consummated or for this subclause (B) (the amount of such reduction being the “Adjustment Amount”); and
(C) a breach or failure to perform by the Company covenants to pay to Parent on written demand and on an after-Tax basis an amount equal to the Adjustment Amount save to the extent that such Adjustment Amount has previously been adjusted by way of refund of such part of the Parent Termination Payment, the due date for payment of which shall be five Business Days after the date such written demand is received by the Company. This section 10.03(i) is subject to the provisions of Section 10.03(i) of the Company Disclosure Schedule.
(j) Any reference in Section 10.03(i) or Section 10.03(i) of the Company Disclosure Schedule to Parent shall where applicable be regarded as referring to the representative member of any VAT group of which Parent is a member, and “finally determined” shall mean determined by HMRC or, if such determination is appealed, a court or tribunal in a decision or judgment in respect of which no right of appeal exists (or in relation to which any periods for appeal have expired) or, whether or not such determination is appealed, as provided in a binding agreement made with HMRC.
(k) The parties anticipate that any Company Payment shall be outside the scope of UK VAT and not otherwise subject to VAT.
(l) For the purposes of Section 10.03(i)(ii)(C), and Section 10.03(i) of the Company Disclosure Schedule, a covenant or indemnity being given on an “after-Tax basis” means that the amount payable (the “Payment”) pursuant to such covenant or indemnity (as applicable) shall be calculated in such a manner as will ensure that, after taking into account: (A) any Tax required to be deducted or withheld from the Payment (save to the extent that Parent has not provided a W-8BEN-E when it was entitled to do so, and provision of a W-8BEN-E would have prevented such deduction or withholding being required) and any additional amounts required to be paid by the payer of the Payment in consequence of such withholding; (B) the amount and timing of any additional Tax which becomes (or would become, but for the use of any credit or other relief which would otherwise have been available to reduce the Tax liabilities of any member of the recipient’s Group) payable by the recipient of the Payment as a result of the Payment’s being chargeable to Tax in the hands of that person; and (C) the amount and timing of any Tax benefit which is obtained by the recipient of the Payment (or any member of the recipient’s Group) to the extent that such Tax benefit is attributable to the matter giving rise to the obligation to make the Payment or the receipt of the Payment, the recipient of the Payment is in the same position as that in which it would have been if the matter giving rise to the obligation to make a Payment under this Section 10.03(l) had not occurred, provided that if any party to this Agreement shall have assigned or novated the benefit of this Agreement in whole or in part or shall, after the date of this Agreement, have changed its Tax residence or the permanent establishment to which the rights under this Agreement are allocated then no Payment to that party shall be increased by reason of the operation of clauses (A) through (C) (inclusive) to any greater extent than would have been the case had no such assignment, novation or change taken place. In this Section 10.03(l), references to “Tax” shall exclude “VAT” and references to a “W-8BEN-E” shall mean a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such Payment.
(m) None of the Financing Sources shall have any liability to the Company, any of its Subsidiaries or any Person that is an Affiliate of the Company prior to giving effect to the Mergers relating to or arising out of this Agreement or the Debt Financing, whether at law, or equity, in contract, in tort or otherwise, covenants and neither the Company nor any Person that is an Affiliate of the Company prior to giving effect to the Mergers shall have any rights or claims directly against any of the Financing Sources hereunder or thereunder. The foregoing shall not impair, supplement, or otherwise modify any of the commitments and other oagreements hereunder.
Appears in 1 contract
Termination Payment. (a) If this Agreement is terminated: ▇▇▇▇▇▇ shall be entitled to a cash termination payment (ithe "Termination Payment") by Parent pursuant to Section 10.01(c)(i) or (ii) by the Company pursuant to Section 10.01(d)(iii), then the Company shall pay to Parent (or its designee), in cash and by way of compensation, a payment in an amount equal to $1,180,000,000 25,000,000, upon the occurrence of any of the following events (each a "Termination Payment Event"), which shall be paid by the “Company within the time specified in respect of each such Termination Payment”) at or prior to, and as a condition to the effectiveness of, the termination of this Agreement in the case of a termination pursuant to Section 10.01(d)(iii) or as promptly as practicable (and, in any event, within two Business Days following such termination) in the case of a termination pursuant to Section 10.01(c)(i).Payment Event:
(b) If (i) this Agreement is terminated by Parent pursuant to Sections 7.2(f)(i) and 7.2(h), in which case the Termination Payment shall be paid to ▇▇▇▇▇▇ or Company the ▇▇▇▇▇▇ Assignee no later than 1:00 p.m. (Toronto time) on the fifth Business Day after the day on which this Agreement is so terminated;
(ii) this Agreement is terminated pursuant to Section 10.01(b)(iii7.2(i), in which case the Termination Payment shall be paid to ▇▇▇▇▇▇ or the ▇▇▇▇▇▇ Assignee prior to or concurrently with the entering into of the definitive agreement referred to therein;
(iiA) prior to such the termination of this Agreement a Competing Proposal is publicly announced or otherwise made; and after (B) a Competing Proposal is consummated during the period commencing on the date hereof and ending 12 months following the termination of this Agreement, or the Board of Directors approves or recommends a Company Acquisition Competing Proposal shall have been publicly announced during such 12 month period and such Competing Proposal is subsequently consummated at any time thereafter, or publicly made known and shall not have been publicly withdrawn at least four Business Days prior to the Company Stockholder Meeting enters into a definitive agreement with respect to a Competing Proposal during such 12 month period and such Competing Proposal is subsequently consummated at any time thereafter, in which case the Termination Payment shall be paid to ▇▇▇▇▇▇ or the ▇▇▇▇▇▇ Assignee no later than 1:00 p.m. (iiiToronto time) on or prior to the twelve-month anniversary of such termination of this Agreement: (A) a transaction constituting a Company Acquisition fifth Business Day after the day on which Competing Proposal is consummated; or (B) a definitive agreement relating to a Company Acquisition Proposal is entered into by the Company or any of its Affiliates (provided, in each case, whether or that ▇▇▇▇▇▇ and Offeror are not such Company Acquisition Proposal is in default in the same as performance of their obligations under this Agreement in any material respect.
(b) Upon written notice to the original Company Acquisition Proposal publicly made known or publicly announced)Company, then, ▇▇▇▇▇▇ may assign its right to receive the Company shall pay to Parent (or its designee) by way of compensation the Company Termination Payment no later than to any ▇▇▇▇▇▇ Subsidiary (the consummation of such Company Acquisition Proposal; provided, that if the Company shall have actually paid the Company No Vote Payment pursuant to Section 10.03(e"▇▇▇▇▇▇ Assignee"), then only the incremental amount between the Company No Vote Payment and the Company Termination Payment shall be payable. “Company Acquisition Proposal” for purposes of this Section 10.03(b) shall have the meaning assigned thereto in the definition thereof set forth in Section 1.01, except that references in the definition to “20%” shall be replaced by “50%”.
(c) If this Agreement is terminated by the Company pursuant to Section 10.01(d)(i), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to $1,415,000,000 (the “Parent Termination Payment”), subject to any adjustment in accordance with Section 10.03(i).
(d) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iv), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to the Parent Termination Payment; provided, that such amount shall be payable only if either (i) the Company Stockholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iii) has not been satisfied at the time of such termination, (B) the Company has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iv).
(e) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iii), the Company shall pay to Parent (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement, a payment in an amount equal to $270,000,000 (the “Company No Vote Payment”); provided, that such amount shall be payable only if either (i) the Parent Shareholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iv) has not been satisfied at the time of such termination, (B) Parent has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iii).
(f) Any payment of the Company Termination Payment or the Company No Vote Payment (each, a “Company Payment”) or the Parent The Termination Payment shall be made paid by the Company to ▇▇▇▇▇▇ or the ▇▇▇▇▇▇ Assignee by wire transfer of in immediately available funds to an account designated in writing specified by Parent or Offeror. For greater certainty, the Company, as applicable. Any Company Payment or Parent Termination Payment shall be made free and clear of and without deduction or withholding of any Taxes; provided:
(i) in the case obligations of the Company Paymentunder this Section 7.3 shall survive the termination of this Agreement, Parent has supplied the Company with a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to the payment regardless of the Company Payment;circumstances thereof.
(iid) The Company acknowledges that the amount set out in the case of the Company Payment, in the event that deductions or withholdings on account of U.S. federal income Taxes should have been made under applicable law, then Parent shall bear the cost of such Taxes;
(iii) in the case of the Parent Termination Payment, in the event that deductions or withholdings on account of UK income Tax should have been made under applicable law, then the Company shall bear the cost of such Taxes; and
(iv) in the case of the Parent Termination Payment, Parent may deduct or withhold any amounts Section 7.3 in respect of VAT required or permitted to be withheld in accordance with the following provisions of this Section 10.03.
(g) The parties agree and understand that (x) in no event shall the Company be required to pay the Company Termination Payment on more than one occasion or the Company No Vote Payment on more than one occasion, in each case under any circumstances, and the Company No Vote Payment shall be credited toward any subsequent payment represents liquidated damages which are a genuine pre-estimate of the Company Termination Paymentdamages, including opportunity costs, which ▇▇▇▇▇▇ and in no event shall Parent be required to pay the Parent Termination Payment on more than one occasion under any circumstances, and (y) except in the case of fraud Offeror will suffer or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, in no event shall Parent be entitled, pursuant to this Section 10.03, to receive an amount greater than the Company Termination Payment and Company No Vote Payment, as applicable (subject to the understanding that the Company No Vote Payment is set off against the Company Termination Payment when the payment of the Company Termination Payment follows the payment of the Company No Vote Payment under Section 10.03(e)), and any applicable additional amounts pursuant to the last two sentences of this Section 10.03(g) (such additional amounts, collectively, the “Parent Additional Amounts”), and in no event shall the Company be entitled, pursuant to this Section 10.03, to receive an amount greater than the Parent Termination Payment and any applicable additional amounts pursuant to Section 6.03(c) and/or the last two sentences of this Section 10.3(g) (such additional amounts, collectively, the “Company Additional Amounts”). Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, (i) if Parent receives a Company Payment and any applicable Parent Additional Amounts from the Company pursuant to this Section 10.03, or if the Company receives the Parent Termination Payment and any applicable Company Additional Amounts from Parent pursuant to this Section 10.03, such payment shall be the sole and exclusive remedy of the receiving party against the paying party and its Subsidiaries and their respective former, current or future partners, equityholders, managers, members, Affiliates and Representatives, and none of the paying party, any of its Subsidiaries or any of their respective former, current or future partners, equityholders, managers, members, Affiliates or Representatives shall have any further liability or obligation, in each case relating to or arising out of this Agreement or the transactions contemplated hereby and (ii) if (A) Parent, Bidco or either Merger Sub receives any payments from the Company in respect of any breach of this Agreement and thereafter Parent receives a Company Payment pursuant to this Section 10.03 or (B) the Company receives any payments from Parent, Bidco or either Merger Sub in respect of any breach of this Agreement and thereafter the Company receives the Parent Termination Payment, the amount of such Company Termination Payment or such Parent Termination Payment, as applicable, shall be reduced by the aggregate amount of such payments made by the party paying the Company Payment or the Parent Termination Payment, as applicable, in respect of any such breaches (in each case, after taking into account any Parent Additional Amounts or Company Additional Amounts, as applicable). The parties acknowledge that the agreements contained in this Section 10.03 are an integral part of the transactions contemplated hereby, that, without these agreements, the parties would not enter into this Agreement and that any amounts payable pursuant to this Section 10.03 do not constitute a penalty. Accordingly, if any party fails to promptly pay any Company Payment or the Parent Termination Payment due pursuant to this Section 10.03, such party shall also pay any out-of-pocket costs and expenses (together with any irrecoverable VAT incurred thereon, and including reasonable legal fees and expenses) incurred by the party entitled to such payment in connection with a legal action to enforce this Agreement that results in a judgment for such amount against the party failing to promptly pay such amount. Any Company Payment or Parent Termination Payment not paid when due pursuant to this Section 10.03 shall bear interest from the date such amount is due until the date paid at a rate equal to the prime rate as published in The Wall Street Journal, Eastern Edition in effect on the date of such payment.
(h) The Parent Termination Payment and the Company Termination Payment (in each case if any) shall be VAT inclusive.
(i) The parties hereto intend that any payment of a Parent Termination Payment, being compensatory in nature, shall not be treated (in whole or in part) as consideration for a supply for the purposes of VAT and, accordingly, Parent shall:
(i) file its relevant VAT return on the basis that the payment of any such Parent Termination Payment falls outside the scope of VAT; and
(ii) pay the full amount of any such Parent Termination Payment free and clear of any deduction or adjustment on account of VAT, it being understood and agreed that if it is finally determined that the Parent Termination Payment is (in whole or in part) consideration for a supply for the purposes of VAT then:
(A) Parent shall (1) subject to having received the relevant amount from the Company as provided in sub-clause (C) below, promptly account for and pay to HMRC such VAT together with any associated interest and penalties; and (2) use its reasonable best efforts to recover (by refund, credit or otherwise) any such VAT at the residual recovery rate generally applied by Parent in respect of input VAT incurred on its overheads from time to time;
(B) the amount of the Parent Termination Payment payable by Parent shall be reduced so that the sum of (1) the Parent Termination Payment (as so reduced) and (2) any VAT reverse charge thereon that Parent certifies acting in good faith that it is not entitled to recover (by way of credit or repayment) as input tax (together with any related interest or penalties in respect of such VAT reverse charge but excluding any interest or penalties arising incur as a result of the unreasonable delay or default of Parent), is equal to the amount of the Parent Termination Payment that would be payable but for this subclause (B) (the amount of such reduction being the “Adjustment Amount”); and
(C) the Company covenants to pay to Parent on written demand and on an after-Tax basis an amount equal to the Adjustment Amount save to the extent that such Adjustment Amount has previously been adjusted by way of refund of such part of the Parent Termination Payment, the due date for payment of which shall be five Business Days after the date such written demand is received by the Company. This section 10.03(i) is subject to the provisions of Section 10.03(i) of the Company Disclosure Schedule.
(j) Any reference in Section 10.03(i) or Section 10.03(i) of the Company Disclosure Schedule to Parent shall where applicable be regarded as referring to the representative member of any VAT group of which Parent is a member, and “finally determined” shall mean determined by HMRC or, if such determination is appealed, a court or tribunal in a decision or judgment in respect of which no right of appeal exists (or in relation to which any periods for appeal have expired) or, whether or not such determination is appealed, as provided in a binding agreement made with HMRC.
(k) The parties anticipate that any Company Payment shall be outside the scope of UK VAT and not otherwise subject to VAT.
(l) For the purposes of Section 10.03(i)(ii)(C), and Section 10.03(i) of the Company Disclosure Schedule, a covenant or indemnity being given on an “after-Tax basis” means that the amount payable (the “Payment”) pursuant to such covenant or indemnity (as applicable) shall be calculated in such a manner as will ensure that, after taking into account: (A) any Tax required to be deducted or withheld from the Payment (save to the extent that Parent has not provided a W-8BEN-E when it was entitled to do so, and provision of a W-8BEN-E would have prevented such deduction or withholding being required) and any additional amounts required to be paid by the payer of the Payment in consequence of such withholding; (B) the amount and timing of any additional Tax which becomes (or would become, but for the use of any credit or other relief which would otherwise have been available to reduce the Tax liabilities of any member of the recipient’s Group) payable by the recipient of the Payment as a result of the Payment’s being chargeable to Tax in the hands of that person; and (C) the amount and timing of any Tax benefit which is obtained by the recipient of the Payment (or any member of the recipient’s Group) to the extent that such Tax benefit is attributable to the matter event giving rise to the obligation to make the Payment or the receipt of the Payment, the recipient of the Payment is in the same position as that in which it would have been if the matter giving rise to the obligation to make a Payment under this Section 10.03(l) had not occurred, provided that if any party to this Agreement shall have assigned or novated the benefit of this Agreement in whole or in part or shall, after the date such damages and resultant termination of this Agreement, and is not a penalty. The Company irrevocably waives any right it may have changed its Tax residence to raise as a defence that any such liquidated damages are excessive or the permanent establishment to which the rights under this Agreement are allocated then no Payment to that party shall be increased by reason of the operation of clauses (A) through (C) (inclusive) to any greater extent than would have been the case had no such assignment, novation or change taken place. In this Section 10.03(l), references to “Tax” shall exclude “VAT” and references to a “W-8BEN-E” shall mean a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such Paymentpunitive.
(me) None For greater certainty, the Company shall not be obligated to make more than one payment under Section 7.3 if one or more of the Financing Sources shall have any liability to the Company, any of its Subsidiaries or any Person that is an Affiliate of the Company prior to giving effect to the Mergers relating to or arising out of this Agreement or the Debt Financing, whether at law, or equity, in contract, in tort or otherwise, and neither the Company nor any Person that is an Affiliate of the Company prior to giving effect to the Mergers shall have any rights or claims directly against any of the Financing Sources hereunder or thereunder. The foregoing shall not impair, supplement, or otherwise modify any of the commitments and other oevents specified therein occurs.
Appears in 1 contract
Termination Payment. (a) If this Agreement is terminated: (i) terminated pursuant to its terms, other than by Parent both parties pursuant to Section 10.01(c)(i9.2(a)(i) hereof, by the Company or Mahaska pursuant to Section 9.2(a)(ii) hereof, by failure of Mahaska's shareholders' to approve the Merger for any reason or by the failure of the shareholders of the Company to adopt this Agreement where prior to the vote by the Company shareholders the Board of Directors of the Company maintains its favorable recommendation for shareholders to adopt this Agreement and there was no intervening public announced third party offer to acquire the Company or the Bank, by Mahaska pursuant to clause (B) or (iiD) of Section 9.2(a)(iii), by the Company pursuant to Section 10.01(d)(iii), then the Company shall pay to Parent (9.2(a)(iv) or its designee), in cash and by way of compensation, a payment in an amount equal to $1,180,000,000 (the “Company Termination Payment”) at or prior to, and as a condition to the effectiveness of, the termination of this Agreement in the case of a termination either party pursuant to Section 10.01(d)(iii9.2(a)(v) or as promptly as practicable (andhereof, in any event, and an Acquisition Event shall occur within two Business Days following such termination) in the case of a termination pursuant to Section 10.01(c)(i).
(b) If (i) this Agreement is terminated by Parent or Company pursuant to Section 10.01(b)(iii), (ii) prior to such termination and 18 months after the date of this Agreement, a Company Acquisition Proposal shall have been publicly announced or publicly made known and shall not have been publicly withdrawn at least four Business Days prior to the Company Stockholder Meeting and (iii) on or prior to the twelve-month anniversary of such termination of this Agreement: (A) a transaction constituting a Company Acquisition Proposal is consummated; or (B) a definitive agreement relating to a Company Acquisition Proposal is entered into by the Company or any of its Affiliates (in each case, whether or not such Company Acquisition Proposal is the same as the original Company Acquisition Proposal publicly made known or publicly announced), thentermination, the Company shall pay to Parent (or its designee) by way of compensation Mahaska within two business days after the Company Termination Payment no later than the consummation occurrence of such Company Acquisition Proposal; providedEvent, that if the Company shall have actually paid the Company No Vote Payment pursuant to Section 10.03(e), then only the incremental amount between the Company No Vote Payment and the Company Termination Payment shall be payable. “Company Acquisition Proposal” for purposes of this Section 10.03(b) shall have the meaning assigned thereto in the definition thereof set forth in Section 1.01, except that references in the definition to “20%” shall be replaced by “50%”.
(c) If this Agreement is terminated by the Company pursuant to Section 10.01(d)(i), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to $1,415,000,000 (the “Parent Termination Payment”), subject to any adjustment in accordance with Section 10.03(i).
(d) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iv), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to the Parent Termination Payment; provided, that such amount shall be payable only if either (i) the Company Stockholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iii) has not been satisfied at the time of such termination, (B) the Company has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iv).
(e) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iii), the Company shall pay to Parent (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement, a payment in an amount equal to $270,000,000 (the “Company No Vote Payment”); provided, that such amount shall be payable only if either (i) the Parent Shareholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iv) has not been satisfied at the time of such termination, (B) Parent has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iii).
(f) Any payment of the Company Termination Payment or the Company No Vote Payment (each, a “Company Payment”) or the Parent Termination Payment shall be made by wire transfer of immediately available Federal funds to an such account designated in writing by Parent or as Mahaska shall designate, the Company, as applicable. Any Company Payment or Parent Termination Payment shall be made free and clear greater of and without deduction or withholding of any Taxes; provided:
(i) in the case of the Company Payment, Parent has supplied the Company with a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, $500,000.00 and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to the payment of the Company Payment;
(ii) in an amount equal to the case sum of (A) out-of-pocket expenses (and the Company Payment, in the event that deductions or withholdings on account of U.S. federal income Taxes should have been made under applicable law, then Parent shall bear the allocated cost of such Taxes;
(iiiits in-house legal and accounting departments) incurred by Mahaska in the case of the Parent Termination Payment, in the event that deductions or withholdings on account of UK income Tax should have been made under applicable law, then the Company shall bear the cost of such Taxes; and
(iv) in the case of the Parent Termination Payment, Parent may deduct or withhold any amounts in respect of VAT required or permitted to be withheld in accordance connection with the following provisions of this Section 10.03.
(g) The parties agree and understand that (x) in no event shall the Company be required to pay the Company Termination Payment on more than one occasion or the Company No Vote Payment on more than one occasion, in each case under any circumstances, and the Company No Vote Payment shall be credited toward any subsequent payment of the Company Termination Payment, and in no event shall Parent be required to pay the Parent Termination Payment on more than one occasion under any circumstances, and (y) except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, in no event shall Parent be entitled, pursuant to this Section 10.03, to receive an amount greater than the Company Termination Payment and Company No Vote Payment, as applicable (subject to the understanding that the Company No Vote Payment is set off against the Company Termination Payment when the payment of the Company Termination Payment follows the payment of the Company No Vote Payment under Section 10.03(e)), and any applicable additional amounts pursuant to the last two sentences of this Section 10.03(g) (such additional amounts, collectively, the “Parent Additional Amounts”), and in no event shall the Company be entitled, pursuant to this Section 10.03, to receive an amount greater than the Parent Termination Payment and any applicable additional amounts pursuant to Section 6.03(c) and/or the last two sentences of this Section 10.3(g) (such additional amounts, collectively, the “Company Additional Amounts”). Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, (i) if Parent receives a Company Payment and any applicable Parent Additional Amounts from the Company pursuant to this Section 10.03, or if the Company receives the Parent Termination Payment and any applicable Company Additional Amounts from Parent pursuant to this Section 10.03, such payment shall be the sole and exclusive remedy of the receiving party against the paying party and its Subsidiaries and their respective former, current or future partners, equityholders, managers, members, Affiliates and Representatives, and none of the paying party, any of its Subsidiaries or any of their respective former, current or future partners, equityholders, managers, members, Affiliates or Representatives shall have any further liability or obligation, in each case relating to or arising out of this Agreement or the transactions contemplated hereby and (iiB) if 2.5% of the Aggregate Value of the Acquisition Event.
(b) For purposes of this Section 4.12, the "Aggregate Value" of any Acquisition Event shall be the sum of (i) the product of (A) Parent, Bidco the average consideration paid or either Merger Sub receives any payments from the payable per share of Company Common Stock in respect of any breach of this Agreement connection with such Acquisition Event and thereafter Parent receives a Company Payment pursuant to this Section 10.03 or (B) the number of such shares of Company receives any payments from Parent, Bidco or either Merger Sub in respect Common Stock outstanding immediately prior to such Acquisition Event plus (ii) the value of any breach of this Agreement and thereafter consideration received or receivable by the Company receives the Parent Termination Payment, the amount in exchange for any shares of such Company Termination Payment its capital stock or such Parent Termination Payment, as applicable, shall be reduced by the aggregate amount of such payments made by the party paying the Company Payment or the Parent Termination Payment, as applicable, in respect of any such breaches (in each case, after taking into account any Parent Additional Amounts or Company Additional Amounts, as applicable). The parties acknowledge that the agreements contained in this Section 10.03 are an integral part of the transactions contemplated hereby, that, without these agreements, the parties would not enter into this Agreement and that any amounts payable pursuant to this Section 10.03 do not constitute a penalty. Accordingly, if any party fails to promptly pay any Company Payment or the Parent Termination Payment due pursuant to this Section 10.03, such party shall also pay any out-of-pocket costs and expenses (together with any irrecoverable VAT incurred thereon, and including reasonable legal fees and expenses) incurred by the party entitled to such payment other securities in connection with a legal action to enforce this Agreement that results in a judgment for such amount against the party failing to promptly pay such amount. Any Company Payment or Parent Termination Payment not paid when due pursuant to this Section 10.03 shall bear interest from the date such amount is due until the date paid at a rate equal to the prime rate as published in The Wall Street Journal, Eastern Edition in effect on the date of such paymentAcquisition Event.
(hc) The Parent Termination Payment For purposes of this Section 4.12, the term "Acquisition Event" shall mean any of the following: (i) any person or entity (other than Mahaska or a parent corporation or subsidiary thereof) shall have acquired pursuant to a tender offer or otherwise beneficial ownership of shares of the Company Common Stock representing 25% or more of the outstanding shares of the Company Common Stock; or (ii) the Company shall have entered into an agreement with any person or entity (other than Mahaska or a parent corporation or subsidiary thereof) to (A) effect a merger, consolidation or similar transaction in which the Company or the Bank is the non-surviving entity, (B) sell, lease or otherwise dispose of assets of the Company or any Company Subsidiary representing 15% or more of the consolidated assets of the Company and the Company Termination Payment (in each case if any) shall be VAT inclusive.
(i) The parties hereto intend that any payment of a Parent Termination PaymentSubsidiaries, being compensatory in nature, shall not be treated (in whole or in part) as consideration for a supply for the purposes of VAT and, accordingly, Parent shall:
(i) file its relevant VAT return on the basis that the payment of any such Parent Termination Payment falls outside the scope of VAT; and
(ii) pay the full amount of any such Parent Termination Payment free and clear of any deduction or adjustment on account of VAT, it being understood and agreed that if it is finally determined that the Parent Termination Payment is (in whole or in part) consideration for a supply for the purposes of VAT then:
(A) Parent shall (1) subject to having received the relevant amount from the Company as provided in sub-clause (C) belowissue, promptly account for and pay to HMRC such VAT together with any associated interest and penalties; and (2) use its reasonable best efforts to recover (by refund, credit sell or otherwise) any such VAT at the residual recovery rate generally applied by Parent in respect of input VAT incurred on its overheads from time to time;
(B) the amount of the Parent Termination Payment payable by Parent shall be reduced so that the sum otherwise dispose of (1) the Parent Termination Payment (as so reduced) and (2) any VAT reverse charge thereon that Parent certifies acting in good faith that it is not entitled to recover (including by way of credit merger, consolidation, share exchange or repaymentany similar transaction) as input tax (together with any related interest securities representing 10% or penalties in respect of such VAT reverse charge but excluding any interest or penalties arising as a result more of the unreasonable delay or default of Parent), is equal to the amount of the Parent Termination Payment that would be payable but for this subclause (B) (the amount of such reduction being the “Adjustment Amount”); and
(C) the Company covenants to pay to Parent on written demand and on an after-Tax basis an amount equal to the Adjustment Amount save to the extent that such Adjustment Amount has previously been adjusted by way of refund of such part of the Parent Termination Payment, the due date for payment of which shall be five Business Days after the date such written demand is received by the Company. This section 10.03(i) is subject to the provisions of Section 10.03(i) voting power of the Company Disclosure Schedule.
(j) Any reference in Section 10.03(i) or Section 10.03(i) of the Company Disclosure Schedule to Parent shall where applicable be regarded as referring to the representative member of any VAT group of which Parent is a member, and “finally determined” shall mean determined by HMRC or, if such determination is appealed, a court or tribunal in a decision or judgment in respect of which no right of appeal exists (or in relation to which any periods for appeal have expired) or, whether or not such determination is appealed, as provided in a binding agreement made with HMRC.
(k) The parties anticipate that any Company Payment shall be outside the scope of UK VAT and not otherwise subject to VAT.
(l) For the purposes of Section 10.03(i)(ii)(C), and Section 10.03(i) of the Company Disclosure Schedule, a covenant or indemnity being given on an “after-Tax basis” means that the amount payable (the “Payment”) pursuant to such covenant or indemnity (as applicable) shall be calculated in such a manner as will ensure that, after taking into account: (A) any Tax required to be deducted or withheld from the Payment (save to the extent that Parent has not provided a W-8BEN-E when it was entitled to do so, and provision of a W-8BEN-E would have prevented such deduction or withholding being required) and any additional amounts required to be paid by the payer of the Payment in consequence of such withholding; (B) the amount and timing of any additional Tax which becomes (or would become, but for the use of any credit or other relief which would otherwise have been available to reduce the Tax liabilities of any member of the recipient’s Group) payable by the recipient of the Payment as a result of the Payment’s being chargeable to Tax in the hands of that person; and (C) the amount and timing of any Tax benefit which is obtained by the recipient of the Payment (or any member of the recipient’s Group) to the extent that such Tax benefit is attributable to the matter giving rise to the obligation to make the Payment or the receipt of the Payment, the recipient of the Payment is in the same position as that in which it would have been if the matter giving rise to the obligation to make a Payment under this Section 10.03(l) had not occurred, provided that if any party to this Agreement shall have assigned or novated the benefit of this Agreement in whole or in part or shall, after the date of this Agreement, have changed its Tax residence or the permanent establishment to which the rights under this Agreement are allocated then no Payment to that party shall be increased by reason of the operation of clauses (A) through (C) (inclusive) to any greater extent than would have been the case had no such assignment, novation or change taken placeBank. In this Section 10.03(l), references to “Tax” shall exclude “VAT” and references to a “W-8BEN-E” shall mean a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such Payment.
(m) None of the Financing Sources shall have any liability to the Company, any of its Subsidiaries or any Person that is an Affiliate of the Company prior to giving effect to the Mergers relating to or arising out of this Agreement or the Debt Financing, whether at law, or equity, in contract, in tort or otherwise, and neither the Company nor any Person that is an Affiliate of the Company prior to giving effect to the Mergers shall have any rights or claims directly against any of the Financing Sources hereunder or thereunder. The foregoing shall not impair, supplement, or otherwise modify any of the commitments and other o-38-
Appears in 1 contract
Termination Payment. (a) If The Offeror shall be entitled to a payment of $1,500,000 (the “Termination Payment”) upon the occurrence of any of the following events (each a “Termination Payment Event”) which shall be paid by the Company within the time specified in respect of each such Termination Payment Event:
(i) the Agreement is terminated by the Offeror pursuant to Section 9.1(g), 9.1(h)(i), 9.1(h)(ii) (where such representation or warranty is or has become untrue due to an intentional or wilful misrepresentation or act on the part of the Company) or 9.1(i), in which case the Termination Payment shall be paid to the Offeror by 11:00 p.m. (Toronto time) on the first Business Day following termination;
(ii) this Agreement is terminated: (i) by Parent pursuant to Section 10.01(c)(i) or (ii) terminated by the Company pursuant to Section 10.01(d)(iii), then the Company shall pay to Parent (or its designee9.1(j), in cash and by way of compensation, a payment in an amount equal which case the Termination Payment shall be paid prior to $1,180,000,000 (the “Company Termination Payment”) at or prior to, and as a condition to the effectiveness of, the termination of this Agreement in the case of a termination pursuant to Section 10.01(d)(iii) or as promptly as practicable (and, in any event, within two Business Days following concurrently with such termination) in the case of a termination pursuant to Section 10.01(c)(i).; and
(b) If (iiii) this Agreement is terminated by Parent or Company the Offeror pursuant to Section 10.01(b)(iii9.1 (d) as a result of the Minimum Tender Condition not being satisfied or Section 9.1(e), (ii) prior to such termination and in each case if on or after the date of this Agreement, a Company Acquisition Proposal shall have been publicly announced or publicly made known hereof and shall not have been publicly withdrawn at least four Business Days prior to the Company Stockholder Meeting and (iii) on or Expiry Time, an Acquisition Proposal is publicly announced prior to the twelve-month anniversary of such Expiry Time, and within 365 days following the termination of this Agreement: (A) a transaction constituting a Company Agreement any Acquisition Proposal is consummated; consummated or (B) a definitive agreement relating to a Company the Board approves or recommends any Acquisition Proposal is entered into by in which case the Company or any of its Affiliates (in each case, whether or not such Company Acquisition Proposal is the same as the original Company Acquisition Proposal publicly made known or publicly announced), then, the Company shall pay to Parent (or its designee) by way of compensation the Company Termination Payment no later than the consummation of such Company Acquisition Proposal; provided, that if the Company shall have actually paid the Company No Vote Payment pursuant to Section 10.03(e), then only the incremental amount between the Company No Vote Payment and the Company Termination Payment shall be payablepaid on the earliest date such Acquisition Proposal is consummated or such approval or recommendation is granted.
(b) The Termination Payment shall be paid by the Company to the Offeror by wire transfer in immediately available funds to an account specified by the Offeror. “The Company Acquisition Proposal” for purposes of shall not be obligated to make more than one Termination Payment pursuant to this Section 10.03(b) shall have the meaning assigned thereto in the definition thereof set forth in Section 1.01, except that references in the definition to “20%” shall be replaced by “50%”9.2.
(c) If this Agreement is terminated by the Company Offeror pursuant to Section 10.01(d)(i9.1 (h)(ii) (other than where such representation or warranty is or has become untrue due to an intentional or wilful misrepresentation or act on the part of the Company), Parent shall pay to the Company (or its designee), shall reimburse the Offeror $750,000 for the fees and expenses incurred in cash and by way of compensation within three Business Days after connection with the date of termination entering of this Agreement (or such other later date as and the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to $1,415,000,000 transactions contemplated herein (the “Parent Termination Reimbursement Payment”), subject to any adjustment in accordance with Section 10.03(i). The Reimbursement Payment shall be paid on the first Business Day following such termination by the Offeror.
(d) If this Agreement is terminated The Reimbursement Payment shall be paid by the Company or Parent pursuant to Section 10.01(b)(iv), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to the Parent Termination Payment; provided, that such amount shall be payable only if either (i) the Company Stockholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iii) has not been satisfied at the time of such termination, (B) the Company has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iv).
(e) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iii), the Company shall pay to Parent (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement, a payment in an amount equal to $270,000,000 (the “Company No Vote Payment”); provided, that such amount shall be payable only if either (i) the Parent Shareholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iv) has not been satisfied at the time of such termination, (B) Parent has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iii).
(f) Any payment of the Company Termination Payment or the Company No Vote Payment (each, a “Company Payment”) or the Parent Termination Payment shall be made Offeror by wire transfer of in immediately available funds to an account designated in writing by Parent or the Company, as applicable. Any Company Payment or Parent Termination Payment shall be made free and clear of and without deduction or withholding of any Taxes; provided:
(i) in the case of the Company Payment, Parent has supplied the Company with a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to the payment of the Company Payment;
(ii) in the case of the Company Payment, in the event that deductions or withholdings on account of U.S. federal income Taxes should have been made under applicable law, then Parent shall bear the cost of such Taxes;
(iii) in the case of the Parent Termination Payment, in the event that deductions or withholdings on account of UK income Tax should have been made under applicable law, then the Company shall bear the cost of such Taxes; and
(iv) in the case of the Parent Termination Payment, Parent may deduct or withhold any amounts in respect of VAT required or permitted to be withheld in accordance with the following provisions of this Section 10.03.
(g) The parties agree and understand that (x) in no event shall the Company be required to pay the Company Termination Payment on more than one occasion or the Company No Vote Payment on more than one occasion, in each case under any circumstances, and the Company No Vote Payment shall be credited toward any subsequent payment of the Company Termination Payment, and in no event shall Parent be required to pay the Parent Termination Payment on more than one occasion under any circumstances, and (y) except in the case of fraud or Willful Breach specified by the other party of any covenant or agreement set forth in this Agreement, in no event shall Parent be entitled, pursuant to this Section 10.03, to receive an amount greater than the Company Termination Payment and Company No Vote Payment, as applicable (subject to the understanding that the Company No Vote Payment is set off against the Company Termination Payment when the payment of the Company Termination Payment follows the payment of the Company No Vote Payment under Section 10.03(e)), and any applicable additional amounts pursuant to the last two sentences of this Section 10.03(g) (such additional amounts, collectively, the “Parent Additional Amounts”), and in no event shall the Company be entitled, pursuant to this Section 10.03, to receive an amount greater than the Parent Termination Payment and any applicable additional amounts pursuant to Section 6.03(c) and/or the last two sentences of this Section 10.3(g) (such additional amounts, collectively, the “Company Additional Amounts”). Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, (i) if Parent receives a Company Payment and any applicable Parent Additional Amounts from the Company pursuant to this Section 10.03, or if the Company receives the Parent Termination Payment and any applicable Company Additional Amounts from Parent pursuant to this Section 10.03, such payment shall be the sole and exclusive remedy of the receiving party against the paying party and its Subsidiaries and their respective former, current or future partners, equityholders, managers, members, Affiliates and Representatives, and none of the paying party, any of its Subsidiaries or any of their respective former, current or future partners, equityholders, managers, members, Affiliates or Representatives shall have any further liability or obligation, in each case relating to or arising out of this Agreement or the transactions contemplated hereby and (ii) if (A) Parent, Bidco or either Merger Sub receives any payments from the Company in respect of any breach of this Agreement and thereafter Parent receives a Company Payment pursuant to this Section 10.03 or (B) the Company receives any payments from Parent, Bidco or either Merger Sub in respect of any breach of this Agreement and thereafter the Company receives the Parent Termination Payment, the amount of such Company Termination Payment or such Parent Termination Payment, as applicable, shall be reduced by the aggregate amount of such payments made by the party paying the Company Payment or the Parent Termination Payment, as applicable, in respect of any such breaches (in each case, after taking into account any Parent Additional Amounts or Company Additional Amounts, as applicable). The parties acknowledge that the agreements contained in this Section 10.03 are an integral part of the transactions contemplated hereby, that, without these agreements, the parties would not enter into this Agreement and that any amounts payable pursuant to this Section 10.03 do not constitute a penalty. Accordingly, if any party fails to promptly pay any Company Payment or the Parent Termination Payment due pursuant to this Section 10.03, such party shall also pay any out-of-pocket costs and expenses (together with any irrecoverable VAT incurred thereon, and including reasonable legal fees and expenses) incurred by the party entitled to such payment in connection with a legal action to enforce this Agreement that results in a judgment for such amount against the party failing to promptly pay such amount. Any Company Payment or Parent Termination Payment not paid when due pursuant to this Section 10.03 shall bear interest from the date such amount is due until the date paid at a rate equal to the prime rate as published in The Wall Street Journal, Eastern Edition in effect on the date of such paymentOfferor.
(h) The Parent Termination Payment and the Company Termination Payment (in each case if any) shall be VAT inclusive.
(i) The parties hereto intend that any payment of a Parent Termination Payment, being compensatory in nature, shall not be treated (in whole or in part) as consideration for a supply for the purposes of VAT and, accordingly, Parent shall:
(i) file its relevant VAT return on the basis that the payment of any such Parent Termination Payment falls outside the scope of VAT; and
(ii) pay the full amount of any such Parent Termination Payment free and clear of any deduction or adjustment on account of VAT, it being understood and agreed that if it is finally determined that the Parent Termination Payment is (in whole or in part) consideration for a supply for the purposes of VAT then:
(A) Parent shall (1) subject to having received the relevant amount from the Company as provided in sub-clause (C) below, promptly account for and pay to HMRC such VAT together with any associated interest and penalties; and (2) use its reasonable best efforts to recover (by refund, credit or otherwise) any such VAT at the residual recovery rate generally applied by Parent in respect of input VAT incurred on its overheads from time to time;
(B) the amount of the Parent Termination Payment payable by Parent shall be reduced so that the sum of (1) the Parent Termination Payment (as so reduced) and (2) any VAT reverse charge thereon that Parent certifies acting in good faith that it is not entitled to recover (by way of credit or repayment) as input tax (together with any related interest or penalties in respect of such VAT reverse charge but excluding any interest or penalties arising as a result of the unreasonable delay or default of Parent), is equal to the amount of the Parent Termination Payment that would be payable but for this subclause (B) (the amount of such reduction being the “Adjustment Amount”); and
(C) the Company covenants to pay to Parent on written demand and on an after-Tax basis an amount equal to the Adjustment Amount save to the extent that such Adjustment Amount has previously been adjusted by way of refund of such part of the Parent Termination Payment, the due date for payment of which shall be five Business Days after the date such written demand is received by the Company. This section 10.03(i) is subject to the provisions of Section 10.03(i) of the Company Disclosure Schedule.
(j) Any reference in Section 10.03(i) or Section 10.03(i) of the Company Disclosure Schedule to Parent shall where applicable be regarded as referring to the representative member of any VAT group of which Parent is a member, and “finally determined” shall mean determined by HMRC or, if such determination is appealed, a court or tribunal in a decision or judgment in respect of which no right of appeal exists (or in relation to which any periods for appeal have expired) or, whether or not such determination is appealed, as provided in a binding agreement made with HMRC.
(k) The parties anticipate that any Company Payment shall be outside the scope of UK VAT and not otherwise subject to VAT.
(l) For the purposes of Section 10.03(i)(ii)(C), and Section 10.03(i) of the Company Disclosure Schedule, a covenant or indemnity being given on an “after-Tax basis” means that the amount payable (the “Payment”) pursuant to such covenant or indemnity (as applicable) shall be calculated in such a manner as will ensure that, after taking into account: (A) any Tax required to be deducted or withheld from the Payment (save to the extent that Parent has not provided a W-8BEN-E when it was entitled to do so, and provision of a W-8BEN-E would have prevented such deduction or withholding being required) and any additional amounts required to be paid by the payer of the Payment in consequence of such withholding; (B) the amount and timing of any additional Tax which becomes (or would become, but for the use of any credit or other relief which would otherwise have been available to reduce the Tax liabilities of any member of the recipient’s Group) payable by the recipient of the Payment as a result of the Payment’s being chargeable to Tax in the hands of that person; and (C) the amount and timing of any Tax benefit which is obtained by the recipient of the Payment (or any member of the recipient’s Group) to the extent that such Tax benefit is attributable to the matter giving rise to the obligation to make the Payment or the receipt of the Payment, the recipient of the Payment is in the same position as that in which it would have been if the matter giving rise to the obligation to make a Payment under this Section 10.03(l) had not occurred, provided that if any party to this Agreement shall have assigned or novated the benefit of this Agreement in whole or in part or shall, after the date of this Agreement, have changed its Tax residence or the permanent establishment to which the rights under this Agreement are allocated then no Payment to that party shall be increased by reason of the operation of clauses (A) through (C) (inclusive) to any greater extent than would have been the case had no such assignment, novation or change taken place. In this Section 10.03(l), references to “Tax” shall exclude “VAT” and references to a “W-8BEN-E” shall mean a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such Payment.
(m) None of the Financing Sources shall have any liability to the Company, any of its Subsidiaries or any Person that is an Affiliate of the Company prior to giving effect to the Mergers relating to or arising out of this Agreement or the Debt Financing, whether at law, or equity, in contract, in tort or otherwise, and neither the Company nor any Person that is an Affiliate of the Company prior to giving effect to the Mergers shall have any rights or claims directly against any of the Financing Sources hereunder or thereunder. The foregoing shall not impair, supplement, or otherwise modify any of the commitments and other o
Appears in 1 contract
Sources: Acquisition Agreement (Actuate Corp)
Termination Payment. In the event this Agreement and Executive’s employment is terminated (a) If prior to the end of the Initial Term by the Company for reasons other than Cause (as defined below) or by Executive for Good Reason (as defined below), or (b) at the end of the Initial Term due to notice of non-renewal by the Company for reasons other than Cause provided that at the time that the Company provided written notice to Executive of its intent to terminate this Agreement pursuant to Section 3 of this Agreement the definitive documentation for a Sale of ▇▇▇▇▇ Corporation (as defined below) has been executed, and such termination occurs within three (3) months prior to a Sale of ▇▇▇▇▇ Corporation or within twelve (12) months following such Sale of ▇▇▇▇▇ Corporation, Executive will be entitled to receive a lump sum cash payment equal to $1,300,000 (the “Severance Payment”). The Severance Payment will be paid within 60 days following Executive’s “separation from service” (as such term is terminateddefined in Treasury Regulation §1.409A-1(h)) provided that Executive executes (and does not revoke) a general release of employment related claims in favor of the Company, its affiliates and their respective officers and directors, in a form reasonably acceptable to the Company, that will be delivered to Executive no later than five (5) business days following the date that such “separation from service” occurs.
(a) For purposes of this Agreement, “Cause” means any of the following: (i) by Parent pursuant Executive's repeated failure to Section 10.01(c)(ifulfill substantially his material obligations with respect to his service hereunder (which failure, if able to be cured, remains uncured or continues or recurs thirty (30) or days after written notice from the Board); (ii) by the Company pursuant Executive's conviction of or plea of guilty or nolo contendere to Section 10.01(d)(iii), then the Company shall pay a felony or to Parent (a crime involving moral turpitude resulting in material financial or its designee), in cash and by way of compensation, a payment in an amount equal to $1,180,000,000 (the “Company Termination Payment”) at or prior to, and as a condition reputational harm to the effectiveness ofCompany, the termination of this Agreement in the case of a termination pursuant to Section 10.01(d)(iii) or as promptly as practicable ▇▇▇▇▇ Corporation (and, in any event, within two Business Days following such termination) in the case of a termination pursuant to Section 10.01(c)(i).
(b) If (i) this Agreement is terminated by Parent or Company pursuant to Section 10.01(b)(iii), (ii) prior to such termination and after the date of this Agreement, a Company Acquisition Proposal shall have been publicly announced or publicly made known and shall not have been publicly withdrawn at least four Business Days prior to the Company Stockholder Meeting and (iii) on or prior to the twelve-month anniversary of such termination of this Agreement: (A) a transaction constituting a Company Acquisition Proposal is consummated; or (B) a definitive agreement relating to a Company Acquisition Proposal is entered into by the Company or any of its Affiliates (in each case, whether or not such Company Acquisition Proposal is the same as the original Company Acquisition Proposal publicly made known or publicly announced), then, the Company shall pay to Parent (or its designee) by way of compensation the Company Termination Payment no later than the consummation of such Company Acquisition Proposal; provided, that if the Company shall have actually paid the Company No Vote Payment pursuant to Section 10.03(e), then only the incremental amount between the Company No Vote Payment and the Company Termination Payment shall be payable. “Company Acquisition Proposal” for purposes of this Section 10.03(b) shall have the meaning assigned thereto in the definition thereof set forth in Section 1.01, except that references in the definition to “20%” shall be replaced by “50%”.
(c) If this Agreement is terminated by the Company pursuant to Section 10.01(d)(i), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of terminationbry), a payment in an amount equal to $1,415,000,000 (the “Parent Termination Payment”), subject to any adjustment in accordance with Section 10.03(i).
(d) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iv), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to the Parent Termination Payment; provided, that such amount shall be payable only if either (i) the Company Stockholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iii) has not been satisfied at the time of such terminationDelaware corporation, (B) the Company has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iv).
(e) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iii), the Company shall pay to Parent (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement, a payment in an amount equal to $270,000,000 (the “Company No Vote Payment”); provided, that such amount shall be payable only if either (i) the Parent Shareholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iv) has not been satisfied at the time of such termination, (B) Parent has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iii).
(f) Any payment of the Company Termination Payment or the Company No Vote Payment (each, a “Company Payment▇▇▇▇▇ Corporation”) or the Parent Termination Payment shall be made by wire transfer of immediately available funds to an account designated in writing by Parent or the Company, as applicable. Any Company Payment or Parent Termination Payment shall be made free and clear of and without deduction or withholding of any Taxes; provided:
(i) in the case of the Company Payment, Parent has supplied the Company with a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to the payment of the Company Payment;
(ii) in the case of the Company Payment, in the event that deductions or withholdings on account of U.S. federal income Taxes should have been made under applicable law, then Parent shall bear the cost of such Taxes;
(iii) in the case of the Parent Termination Payment, in the event that deductions or withholdings on account of UK income Tax should have been made under applicable law, then the Company shall bear the cost of such Taxes; and
(iv) in the case of the Parent Termination Payment, Parent may deduct or withhold any amounts in respect of VAT required or permitted to be withheld in accordance with the following provisions of this Section 10.03.
(g) The parties agree and understand that (x) in no event shall the Company be required to pay the Company Termination Payment on more than one occasion or the Company No Vote Payment on more than one occasion, in each case under any circumstances, and the Company No Vote Payment shall be credited toward any subsequent payment of the Company Termination Payment, and in no event shall Parent be required to pay the Parent Termination Payment on more than one occasion under any circumstances, and (y) except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, in no event shall Parent be entitled, pursuant to this Section 10.03, to receive an amount greater than the Company Termination Payment and Company No Vote Payment, as applicable (subject to the understanding that the Company No Vote Payment is set off against the Company Termination Payment when the payment of the Company Termination Payment follows the payment of the Company No Vote Payment under Section 10.03(e)), and any applicable additional amounts pursuant to the last two sentences of this Section 10.03(g) (such additional amounts, collectively, the “Parent Additional Amounts”), and in no event shall the Company be entitled, pursuant to this Section 10.03, to receive an amount greater than the Parent Termination Payment and any applicable additional amounts pursuant to Section 6.03(c) and/or the last two sentences of this Section 10.3(g) (such additional amounts, collectively, the “Company Additional Amounts”). Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, (i) if Parent receives a Company Payment and any applicable Parent Additional Amounts from the Company pursuant to this Section 10.03, or if the Company receives the Parent Termination Payment and any applicable Company Additional Amounts from Parent pursuant to this Section 10.03, such payment shall be the sole and exclusive remedy of the receiving party against the paying party and its Subsidiaries and their respective former, current or future partners, equityholders, managers, members, Affiliates and Representatives, and none of the paying party, any of its Subsidiaries or any of their respective formersubsidiaries or affiliates; (iii) Executive's engaging in conduct that constitutes gross negligence or gross misconduct in carrying out his duties with respect to his service hereunder; (iv) a material violation by Executive of any non-competition or non-solicitation provision, current or future partnersof any confidentiality provision, equityholders, managers, members, Affiliates or Representatives shall have any further liability or obligation, contained in each case relating to or arising out of this Agreement or the transactions contemplated hereby any agreement between Executive and (ii) if (A) Parent, Bidco or either Merger Sub receives any payments from the Company in respect of any breach of this Agreement and thereafter Parent receives a Company Payment pursuant to this Section 10.03 or (B) the Company receives any payments from Parent, Bidco or either Merger Sub in respect of any breach of this Agreement and thereafter the Company receives the Parent Termination Payment, the amount of such Company Termination Payment or such Parent Termination Payment, as applicable, shall be reduced by the aggregate amount of such payments made by the party paying the Company Payment or the Parent Termination Payment, as applicable, in respect of any such breaches (in each case, after taking into account any Parent Additional Amounts or Company Additional Amounts, as applicable). The parties acknowledge that the agreements contained in this Section 10.03 are an integral part of the transactions contemplated hereby, that, without these agreements, the parties would not enter into this Agreement and that any amounts payable pursuant to this Section 10.03 do not constitute a penalty. Accordingly, if any party fails to promptly pay any Company Payment or the Parent Termination Payment due pursuant to this Section 10.03, such party shall also pay any out-of-pocket costs and expenses (together with any irrecoverable VAT incurred thereon, and including reasonable legal fees and expenses) incurred by the party entitled to such payment in connection with a legal action to enforce this Agreement that results in a judgment for such amount against the party failing to promptly pay such amount. Any Company Payment or Parent Termination Payment not paid when due pursuant to this Section 10.03 shall bear interest from the date such amount is due until the date paid at a rate equal to the prime rate as published in The Wall Street Journal, Eastern Edition in effect on the date of such payment.
(h) The Parent Termination Payment and the Company Termination Payment (in each case if any) shall be VAT inclusive.
(i) The parties hereto intend that any payment of a Parent Termination Payment, being compensatory in nature, shall not be treated (in whole or in part) as consideration for a supply for the purposes of VAT and, accordingly, Parent shall:
(i) file its relevant VAT return on the basis that the payment of any such Parent Termination Payment falls outside the scope of VAT; and
(ii) pay the full amount of any such Parent Termination Payment free and clear of any deduction or adjustment on account of VAT, it being understood and agreed that if it is finally determined that the Parent Termination Payment is (in whole or in part) consideration for a supply for the purposes of VAT then:
(A) Parent shall (1) subject to having received the relevant amount from the Company as provided in sub-clause (C) below, promptly account for and pay to HMRC such VAT together with any associated interest and penalties; and (2) use its reasonable best efforts to recover (by refund, credit or otherwise) any such VAT at the residual recovery rate generally applied by Parent in respect of input VAT incurred on its overheads from time to time;
(B) the amount of the Parent Termination Payment payable by Parent shall be reduced so that the sum of (1) the Parent Termination Payment (as so reduced) and (2) any VAT reverse charge thereon that Parent certifies acting in good faith that it is not entitled to recover (by way of credit or repayment) as input tax (together with any related interest or penalties in respect of such VAT reverse charge but excluding any interest or penalties arising as a result of the unreasonable delay or default of Parent), is equal to the amount of the Parent Termination Payment that would be payable but for this subclause (B) (the amount of such reduction being the “Adjustment Amount”); and
(C) the Company covenants to pay to Parent on written demand and on an after-Tax basis an amount equal to the Adjustment Amount save to the extent that such Adjustment Amount has previously been adjusted by way of refund of such part of the Parent Termination Payment, the due date for payment of which shall be five Business Days after the date such written demand is received by the Company. This section 10.03(i) is subject to the provisions of Section 10.03(i) of the Company Disclosure Schedule.
(j) Any reference in Section 10.03(i) or Section 10.03(i) of the Company Disclosure Schedule to Parent shall where applicable be regarded as referring to the representative member of any VAT group of which Parent is a member, and “finally determined” shall mean determined by HMRC or, if such determination is appealed, a court or tribunal in a decision or judgment in respect of which no right of appeal exists (or in relation to which any periods for appeal have expired) or, whether or not such determination is appealed, as provided in a binding agreement made with HMRC.
(k) The parties anticipate that any Company Payment shall be outside the scope of UK VAT and not otherwise subject to VAT.
(l) For the purposes of Section 10.03(i)(ii)(C), and Section 10.03(i) of the Company Disclosure Schedule, a covenant or indemnity being given on an “after-Tax basis” means that the amount payable (the “Payment”) pursuant to such covenant or indemnity (as applicable) shall be calculated in such a manner as will ensure that, after taking into account: (A) any Tax required to be deducted or withheld from the Payment (save to the extent that Parent has not provided a W-8BEN-E when it was entitled to do so, and provision of a W-8BEN-E would have prevented such deduction or withholding being required) and any additional amounts required to be paid by the payer of the Payment in consequence of such withholding; (B) the amount and timing of any additional Tax which becomes (or would become, but for the use of any credit or other relief which would otherwise have been available to reduce the Tax liabilities of any member of the recipient’s Group) payable by the recipient of the Payment as a result of the Payment’s being chargeable to Tax in the hands of that person; and (C) the amount and timing of any Tax benefit which is obtained by the recipient of the Payment (or any member of the recipient’s Group) to the extent that such Tax benefit is attributable to the matter giving rise to the obligation to make the Payment or the receipt of the Payment, the recipient of the Payment is in the same position as that in which it would have been if the matter giving rise to the obligation to make a Payment under this Section 10.03(l) had not occurred, provided that if any party to this Agreement shall have assigned or novated the benefit of this Agreement in whole or in part or shall, after the date of this Agreement, have changed its Tax residence or the permanent establishment to which the rights under this Agreement are allocated then no Payment to that party shall be increased by reason of the operation of clauses (A) through (C) (inclusive) to any greater extent than would have been the case had no such assignment, novation or change taken place. In this Section 10.03(l), references to “Tax” shall exclude “VAT” and references to a “W-8BEN-E” shall mean a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such Payment.
(m) None of the Financing Sources shall have any liability to the Company, ▇▇▇▇▇ Corporation, or any of its Subsidiaries their subsidiaries or affiliates; (v) any act by Executive involving dishonesty relating to the business of the Company, ▇▇▇▇▇ Corporation, or any Person of their subsidiaries or affiliates that is an Affiliate adversely and materially affects the business of the Company prior to giving effect to the Mergers relating to or arising out of this Agreement or the Debt FinancingCompany, whether at law▇▇▇▇▇ Corporation, or equity, in contract, in tort any of their subsidiaries or otherwise, and neither the Company nor any Person that is an Affiliate affiliates; or (vi) a material breach by Executive of the Company prior to giving effect to Company's written code of ethics or any other material written policy or regulation of the Mergers shall have any rights Company, ▇▇▇▇▇ Corporation, or claims directly against any of their subsidiaries or affiliates governing the Financing Sources hereunder conduct of its employees or thereunder. The foregoing shall not impaircontractors (which breach, supplementif able to be cured, remains uncured or otherwise modify any of continues or recurs 30 days after written notice from the commitments and other oBoard).
Appears in 1 contract
Termination Payment. (a) If this Agreement is terminated: terminated (ix) by Parent pursuant to Section 10.01(c)(i) or (iiy) by the Company pursuant to Section 10.01(d)(iii), then the Company shall pay to Parent (or its designee), in cash and by way of compensation, a payment in an amount equal to $1,180,000,000 200,000,000 (the “Company Termination Payment”) at or prior to, and as a condition to the effectiveness of, the termination of this Agreement in the case of a termination pursuant to Section 10.01(d)(iii) or as promptly as practicable (and, in any event, within two three Business Days following such termination) in the case of a termination pursuant to Section 10.01(c)(i).
(b) If (i) this Agreement is terminated by Parent or the Company pursuant to Section 10.01(b)(i) (without the Company Stockholder Approval having been obtained) or Section 10.01(b)(iii) or by Parent pursuant to Section 10.01(c)(ii) (without the Company Stockholder Approval having been obtained), (ii) prior to such termination and after the date of this Agreement, a Company Acquisition Proposal shall have been publicly announced or publicly made known and shall not have been publicly withdrawn at least four Business Days prior to the Company Stockholder Meeting and (iii) on or prior to the twelve-twelve (12) month anniversary of such termination of this Agreement: Agreement (A) a transaction constituting a Company Acquisition Proposal is consummated; consummated or (B) a definitive agreement relating to providing for a Company Acquisition Proposal is entered into by the Company or any of its Affiliates Subsidiaries (in each case, whether or not such Company Acquisition Proposal is the same as the original Company Acquisition Proposal publicly made known or publicly announced)announced prior to termination) that is subsequently consummated, then, the Company shall pay to Parent (or its designee) by way of compensation the Company Termination Payment no later than the consummation of such Company Acquisition Proposal; provided, that if the Company shall have actually paid the Company No Vote Payment Reimbursement pursuant to Section 10.03(e10.03(f), then only the incremental amount between the Company No Vote Payment Reimbursement and the Company Termination Payment shall be payable. “Company Acquisition Proposal” for purposes of this Section 10.03(b) shall have the meaning assigned thereto in the definition thereof set forth in Section 1.01, except that references in the definition to “20%” shall be replaced by “50%”.
(c) If this Agreement is terminated by the Company pursuant to Section 10.01(d)(i), then Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to $1,415,000,000 (the “Parent Termination Payment”), subject to any adjustment in accordance with Section 10.03(i).
(d3) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iv), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to the Parent Termination Payment; provided, that such amount shall be payable only if either (i) the Company Stockholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iii) has not been satisfied at the time of such termination, (B) the Company has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iv).
(e) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iii), the Company shall pay to Parent (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement, a payment in an amount equal to $270,000,000 150,000,000 (the “Company No Vote Parent Termination Payment”); provided, that such amount shall be payable only if either (i) the Parent Shareholder Approval shall have previously been obtained or (ii) (A) the condition subject to termination under Section 10.01(b)(iv) has not been satisfied at the time of such termination, (B) Parent has complied any adjustment in accordance with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iii10.03(k).
(fd) Any payment of the Company Termination Payment or the Company No Vote Payment If (each, a “Company Payment”i) or the Parent Termination Payment shall be made by wire transfer of immediately available funds to an account designated in writing this Agreement is terminated by Parent or the Company, as applicable. Any Company Payment or Parent Termination Payment shall be made free and clear of and without deduction or withholding of any Taxes; provided:
(i) in the case of the Company Payment, Parent has supplied the Company with a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to the payment of the Company Payment;
(ii) in the case of the Company Payment, in the event that deductions or withholdings on account of U.S. federal income Taxes should have been made under applicable law, then Parent shall bear the cost of such Taxes;
(iii) in the case of the Parent Termination Payment, in the event that deductions or withholdings on account of UK income Tax should have been made under applicable law, then the Company shall bear the cost of such Taxes; and
(iv) in the case of the Parent Termination Payment, Parent may deduct or withhold any amounts in respect of VAT required or permitted to be withheld in accordance with the following provisions of this Section 10.03.
(g) The parties agree and understand that (x) in no event shall the Company be required to pay the Company Termination Payment on more than one occasion or the Company No Vote Payment on more than one occasion, in each case under any circumstances, and the Company No Vote Payment shall be credited toward any subsequent payment of the Company Termination Payment, and in no event shall Parent be required to pay the Parent Termination Payment on more than one occasion under any circumstances, and (y) except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, in no event shall Parent be entitled, pursuant to this Section 10.03, to receive an amount greater than the Company Termination Payment and Company No Vote Payment, as applicable (subject to the understanding that the Company No Vote Payment is set off against the Company Termination Payment when the payment of the Company Termination Payment follows the payment of the Company No Vote Payment under Section 10.03(e)), and any applicable additional amounts pursuant to the last two sentences of this Section 10.03(g) (such additional amounts, collectively, the “Parent Additional Amounts”), and in no event shall the Company be entitled, pursuant to this Section 10.03, to receive an amount greater than the Parent Termination Payment and any applicable additional amounts pursuant to Section 6.03(c) and/or the last two sentences of this Section 10.3(g10.01(b)(i) (such additional amounts, collectively, without the “Company Additional Amounts”). Notwithstanding anything to the contrary in this Agreement, except in the case of fraud Parent Stockholder Approval having been obtained) or Willful Breach Section 10.01(b)(iv) or by the other party of any covenant or agreement set forth in this Agreement, (i) if Parent receives a Company Payment and any applicable Parent Additional Amounts from the Company pursuant to this Section 10.03, or if the Company receives 10.01(d)(ii) (without the Parent Termination Payment and any applicable Company Additional Amounts from Parent pursuant to this Section 10.03Stockholder Approval having been obtained), such payment shall be the sole and exclusive remedy of the receiving party against the paying party and its Subsidiaries and their respective former, current or future partners, equityholders, managers, members, Affiliates and Representatives, and none of the paying party, any of its Subsidiaries or any of their respective former, current or future partners, equityholders, managers, members, Affiliates or Representatives shall have any further liability or obligation, in each case relating to or arising out of this Agreement or the transactions contemplated hereby and (ii) if (A) Parent, Bidco or either Merger Sub receives any payments from the Company in respect of any breach of this Agreement and thereafter Parent receives a Company Payment pursuant to this Section 10.03 or (B) the Company receives any payments from Parent, Bidco or either Merger Sub in respect of any breach of this Agreement and thereafter the Company receives the Parent Termination Payment, the amount of such Company Termination Payment or such Parent Termination Payment, as applicable, shall be reduced by the aggregate amount of such payments made by the party paying the Company Payment or the Parent Termination Payment, as applicable, in respect of any such breaches (in each case, after taking into account any Parent Additional Amounts or Company Additional Amounts, as applicable). The parties acknowledge that the agreements contained in this Section 10.03 are an integral part of the transactions contemplated hereby, that, without these agreements, the parties would not enter into this Agreement and that any amounts payable pursuant to this Section 10.03 do not constitute a penalty. Accordingly, if any party fails to promptly pay any Company Payment or the Parent Termination Payment due pursuant to this Section 10.03, such party shall also pay any out-of-pocket costs and expenses (together with any irrecoverable VAT incurred thereon, and including reasonable legal fees and expenses) incurred by the party entitled prior to such payment in connection with a legal action to enforce this Agreement that results in a judgment for such amount against the party failing to promptly pay such amount. Any Company Payment or Parent Termination Payment not paid when due pursuant to this Section 10.03 shall bear interest from the date such amount is due until the date paid at a rate equal to the prime rate as published in The Wall Street Journal, Eastern Edition in effect on the date of such payment.
(h) The Parent Termination Payment termination and the Company Termination Payment (in each case if any) shall be VAT inclusive.
(i) The parties hereto intend that any payment of a Parent Termination Payment, being compensatory in nature, shall not be treated (in whole or in part) as consideration for a supply for the purposes of VAT and, accordingly, Parent shall:
(i) file its relevant VAT return on the basis that the payment of any such Parent Termination Payment falls outside the scope of VAT; and
(ii) pay the full amount of any such Parent Termination Payment free and clear of any deduction or adjustment on account of VAT, it being understood and agreed that if it is finally determined that the Parent Termination Payment is (in whole or in part) consideration for a supply for the purposes of VAT then:
(A) Parent shall (1) subject to having received the relevant amount from the Company as provided in sub-clause (C) below, promptly account for and pay to HMRC such VAT together with any associated interest and penalties; and (2) use its reasonable best efforts to recover (by refund, credit or otherwise) any such VAT at the residual recovery rate generally applied by Parent in respect of input VAT incurred on its overheads from time to time;
(B) the amount of the Parent Termination Payment payable by Parent shall be reduced so that the sum of (1) the Parent Termination Payment (as so reduced) and (2) any VAT reverse charge thereon that Parent certifies acting in good faith that it is not entitled to recover (by way of credit or repayment) as input tax (together with any related interest or penalties in respect of such VAT reverse charge but excluding any interest or penalties arising as a result of the unreasonable delay or default of Parent), is equal to the amount of the Parent Termination Payment that would be payable but for this subclause (B) (the amount of such reduction being the “Adjustment Amount”); and
(C) the Company covenants to pay to Parent on written demand and on an after-Tax basis an amount equal to the Adjustment Amount save to the extent that such Adjustment Amount has previously been adjusted by way of refund of such part of the Parent Termination Payment, the due date for payment of which shall be five Business Days after the date such written demand is received by the Company. This section 10.03(i) is subject to the provisions of Section 10.03(i) of the Company Disclosure Schedule.
(j) Any reference in Section 10.03(i) or Section 10.03(i) of the Company Disclosure Schedule to Parent shall where applicable be regarded as referring to the representative member of any VAT group of which Parent is a member, and “finally determined” shall mean determined by HMRC or, if such determination is appealed, a court or tribunal in a decision or judgment in respect of which no right of appeal exists (or in relation to which any periods for appeal have expired) or, whether or not such determination is appealed, as provided in a binding agreement made with HMRC.
(k) The parties anticipate that any Company Payment shall be outside the scope of UK VAT and not otherwise subject to VAT.
(l) For the purposes of Section 10.03(i)(ii)(C), and Section 10.03(i) of the Company Disclosure Schedule, a covenant or indemnity being given on an “after-Tax basis” means that the amount payable (the “Payment”) pursuant to such covenant or indemnity (as applicable) shall be calculated in such a manner as will ensure that, after taking into account: (A) any Tax required to be deducted or withheld from the Payment (save to the extent that Parent has not provided a W-8BEN-E when it was entitled to do so, and provision of a W-8BEN-E would have prevented such deduction or withholding being required) and any additional amounts required to be paid by the payer of the Payment in consequence of such withholding; (B) the amount and timing of any additional Tax which becomes (or would become, but for the use of any credit or other relief which would otherwise have been available to reduce the Tax liabilities of any member of the recipient’s Group) payable by the recipient of the Payment as a result of the Payment’s being chargeable to Tax in the hands of that person; and (C) the amount and timing of any Tax benefit which is obtained by the recipient of the Payment (or any member of the recipient’s Group) to the extent that such Tax benefit is attributable to the matter giving rise to the obligation to make the Payment or the receipt of the Payment, the recipient of the Payment is in the same position as that in which it would have been if the matter giving rise to the obligation to make a Payment under this Section 10.03(l) had not occurred, provided that if any party to this Agreement shall have assigned or novated the benefit of this Agreement in whole or in part or shall, after the date of this Agreement, a Parent Acquisition Proposal shall have changed its Tax residence been publicly announced or publicly made known and shall not have been publicly withdrawn and (iii) on or prior to the permanent establishment to which the rights under twelve (12) month anniversary of such termination of this Agreement are allocated then no Payment to that party shall be increased by reason of the operation of clauses (A) through a transaction constituting a Parent Acquisition Proposal is consummated or (CB) (inclusive) to any greater extent than would have been the case had no such assignment, novation a definitive agreement providing for a Parent Acquisition Proposal is entered into by Parent or change taken place. In this Section 10.03(l), references to “Tax” shall exclude “VAT” and references to a “W-8BEN-E” shall mean a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such Payment.
(m) None of the Financing Sources shall have any liability to the Company, any of its Subsidiaries (in each case, whether or any Person not such Parent Acquisition Proposal is the same as the original Parent Acquisition Proposal publicly made known or publicly announced prior to termination) that is an Affiliate of subsequently consummated, then, Parent shall pay to the Company prior (or its designee) by way of compensation the Parent Termination Payment no later than the consummation of such Parent Acquisition Proposal, subject to giving effect to the Mergers relating to or arising out of this Agreement or the Debt Financingany adjustment in accordance with Section 10.03(k); provided, whether at law, or equity, in contract, in tort or otherwise, and neither the Company nor any Person that is an Affiliate of the Company prior to giving effect to the Mergers if Parent shall have any rights or claims directly against any of actually paid the Financing Sources hereunder or thereunder. The foregoing Parent No Vote Reimbursement pursuant to Section 10.03(e), then only the incremental amount between the Parent No Vote Reimbursement and the Parent Termination Payment shall not impair, supplement, or otherwise modify any of the commitments and other obe payable.
Appears in 1 contract
Termination Payment. (a) If As compensation for entering into this Agreement, taking action to consummate the transactions hereunder and incurring the costs and expenses related thereto and other losses and damages, including the foregoing of other opportunities, the Company and Parent agree as follows: in the event that this Agreement is terminated: (i) by Parent terminated pursuant to Section 10.01(c)(i7.1(f), 7.1(g) or (ii) by the Company pursuant to Section 10.01(d)(iii7.1(h), then the Company shall pay Parent a fee as liquidated damages and not as a penalty to reimburse Parent (or for its designee)time, in cash expense and by way lost opportunity costs of compensation, a payment in an amount pursuing the Merger equal to $1,180,000,000 8.0 million (the “Company Termination PaymentFee”), payable by wire transfer of immediately available funds, concurrently with such termination pursuant to Section 7.1(g), and within two Business Days of the date of any such other termination.
(b) In the event of termination of this Agreement under Section 7.1(b) (but only as a result of the failure to satisfy the condition set forth in Section 6.2(c)), and at or prior to the time of such termination a Takeover Proposal shall have been made known to the Company or publicly announced, and within one year following the termination, the Company shall enter into any Company Acquisition Agreement in respect of or consummate a Takeover Proposal with the Person who made the original Takeover Proposal or an Affiliate of such Person (except that references in the definition of Takeover Proposal to “15%” shall be deemed to be “50%” for purposes hereof), then immediately prior to, and as a condition to the effectiveness of, entering into of such agreement or the termination consummation of this Agreement in such transaction, as the case of a termination pursuant to Section 10.01(d)(iii) or as promptly as practicable (and, in any event, within two Business Days following such termination) in the case of a termination pursuant to Section 10.01(c)(i).
(b) If (i) this Agreement is terminated by Parent or Company pursuant to Section 10.01(b)(iii), (ii) prior to such termination and after the date of this Agreement, a Company Acquisition Proposal shall have been publicly announced or publicly made known and shall not have been publicly withdrawn at least four Business Days prior to the Company Stockholder Meeting and (iii) on or prior to the twelve-month anniversary of such termination of this Agreement: (A) a transaction constituting a Company Acquisition Proposal is consummated; or (B) a definitive agreement relating to a Company Acquisition Proposal is entered into by the Company or any of its Affiliates (in each case, whether or not such Company Acquisition Proposal is the same as the original Company Acquisition Proposal publicly made known or publicly announced), thenmay be, the Company shall pay to Parent, upon demand, the Termination Fee, payable in cash by wire transfer in immediately available funds, as liquidated damages and not as a penalty, to reimburse Parent (or for its designee) by way time, expense and lost opportunity costs of compensation pursuing the Company Termination Payment Merger; provided that no later than the consummation of such Company Acquisition Proposal; provided, that amount shall be payable if the Company Termination Fee shall have actually become payable or have been paid the Company No Vote Payment pursuant to in accordance with Section 10.03(e), then only the incremental amount between the Company No Vote Payment and the Company Termination Payment shall be payable. “Company Acquisition Proposal” for purposes 7.3(a) of this Section 10.03(b) shall have the meaning assigned thereto in the definition thereof set forth in Section 1.01, except that references in the definition to “20%” shall be replaced by “50%”Agreement.
(c) If this Agreement is terminated by the Company pursuant to Section 10.01(d)(i), Parent shall pay Notwithstanding anything to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to $1,415,000,000 (the “Parent Termination Payment”), subject to any adjustment in accordance with Section 10.03(i).
(d) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iv), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to the Parent Termination Payment; provided, that such amount shall be payable only if either (i) the Company Stockholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iii) has not been satisfied at the time of such termination, (B) the Company has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iv).
(e) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iii), the Company shall pay to Parent (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement, a payment in an amount equal to $270,000,000 (the “Company No Vote Payment”); provided, that such amount shall be payable only if either (i) the Parent Shareholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iv) has not been satisfied at the time of such termination, (B) Parent has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iii).
(f) Any payment of the Company Termination Payment or the Company No Vote Payment (each, a “Company Payment”) or the Parent Termination Payment shall be made by wire transfer of immediately available funds to an account designated in writing by Parent or the Company, as applicable. Any Company Payment or Parent Termination Payment shall be made free and clear of and without deduction or withholding of any Taxes; provided:
(i) in the case of the Company Payment, Parent has supplied the Company with a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to the payment of the Company Payment;
(ii) in the case of the Company Payment, in the event that deductions or withholdings on account of U.S. federal income Taxes should have been made under applicable law, then Parent shall bear the cost of such Taxes;
(iii) in the case of the Parent Termination Payment, in the event that deductions or withholdings on account of UK income Tax should have been made under applicable law, then the Company shall bear the cost of such Taxes; and
(iv) in the case of the Parent Termination Payment, Parent may deduct or withhold any amounts in respect of VAT required or permitted to be withheld in accordance with the following provisions of this Section 10.03.
(g) The parties agree and understand that (x) in no event shall the Company be required to pay the Company Termination Payment on more than one occasion or the Company No Vote Payment on more than one occasion, in each case under any circumstances, and the Company No Vote Payment shall be credited toward any subsequent payment of the Company Termination Payment, and in no event shall Parent be required to pay the Parent Termination Payment on more than one occasion under any circumstances, and (y) except in the case of fraud or Willful Breach by the other party of any covenant or agreement contrary set forth in this Agreement, in no event shall Parent be entitled, pursuant to this Section 10.03, to receive an amount greater than the Company Termination Payment and Company No Vote Payment, as applicable (subject to the understanding that the Company No Vote Payment is set off against the Company Termination Payment when the payment of the Company Termination Payment follows the payment of the Company No Vote Payment under Section 10.03(e)), and any applicable additional amounts pursuant to the last two sentences of this Section 10.03(g) (such additional amounts, collectively, the “Parent Additional Amounts”), and in no event shall the Company be entitled, pursuant to this Section 10.03, to receive an amount greater than the Parent Termination Payment and any applicable additional amounts pursuant to Section 6.03(c) and/or the last two sentences of this Section 10.3(g) (such additional amounts, collectively, the “Company Additional Amounts”). Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, (i) if Parent receives a Company Payment and any applicable Parent Additional Amounts from the Company pursuant to this Section 10.03, or if the Company receives the fails to pay to Parent Termination Payment and any applicable Company Additional Amounts from Parent pursuant to amounts due under this Section 10.03, such payment shall be the sole and exclusive remedy 7.3 within 5 Business Days of the receiving party against the paying party and its Subsidiaries and their respective formerdate such amount was required to be paid, current or future partners, equityholders, managers, members, Affiliates and Representatives, and none of the paying party, any of its Subsidiaries or any of their respective former, current or future partners, equityholders, managers, members, Affiliates or Representatives shall have any further liability or obligation, in each case relating to or arising out of this Agreement or the transactions contemplated hereby and (ii) if (A) Parent, Bidco or either Merger Sub receives any payments from the Company in respect of any breach of this Agreement and thereafter Parent receives a Company Payment pursuant to this Section 10.03 or (B) shall pay the Company receives any payments from Parent, Bidco or either Merger Sub in respect of any breach of this Agreement and thereafter the Company receives the Parent Termination Payment, the amount of such Company Termination Payment or such Parent Termination Payment, as applicable, shall be reduced by the aggregate amount of such payments made by the party paying the Company Payment or the Parent Termination Payment, as applicable, in respect of any such breaches (in each case, after taking into account any Parent Additional Amounts or Company Additional Amounts, as applicable). The parties acknowledge that the agreements contained in this Section 10.03 are an integral part of the transactions contemplated hereby, that, without these agreements, the parties would not enter into this Agreement and that any amounts payable pursuant to this Section 10.03 do not constitute a penalty. Accordingly, if any party fails to promptly pay any Company Payment or the Parent Termination Payment due pursuant to this Section 10.03, such party shall also pay any out-of-pocket costs and expenses (together with any irrecoverable VAT incurred thereon, and including reasonable legal fees and expenses) incurred by the party entitled to such payment in connection with a any action, including the filing of any lawsuit or other legal action action, taken to enforce this Agreement that results collect payment, together with interest on the amount of any unpaid fee or obligation at the publicly announced prime rate of Citibank, N.A. in a judgment for such amount against the party failing effect from time to promptly pay such amount. Any Company Payment or Parent Termination Payment not paid when due pursuant to this Section 10.03 shall bear interest time from the date such amount is due until the date paid at a rate equal to the prime rate as published in The Wall Street Journal, Eastern Edition in effect on the date of such payment.
(h) The Parent Termination Payment and the Company Termination Payment (in each case if any) shall be VAT inclusive.
(i) The parties hereto intend that any payment of a Parent Termination Payment, being compensatory in nature, shall not be treated (in whole fee or in part) as consideration for a supply for the purposes of VAT and, accordingly, Parent shall:
(i) file its relevant VAT return on the basis that the payment of any such Parent Termination Payment falls outside the scope of VAT; and
(ii) pay the full amount of any such Parent Termination Payment free and clear of any deduction or adjustment on account of VAT, it being understood and agreed that if it is finally determined that the Parent Termination Payment is (in whole or in part) consideration for a supply for the purposes of VAT then:
(A) Parent shall (1) subject to having received the relevant amount from the Company as provided in sub-clause (C) below, promptly account for and pay to HMRC such VAT together with any associated interest and penalties; and (2) use its reasonable best efforts to recover (by refund, credit or otherwise) any such VAT at the residual recovery rate generally applied by Parent in respect of input VAT incurred on its overheads from time to time;
(B) the amount of the Parent Termination Payment payable by Parent shall be reduced so that the sum of (1) the Parent Termination Payment (as so reduced) and (2) any VAT reverse charge thereon that Parent certifies acting in good faith that it is not entitled to recover (by way of credit or repayment) as input tax (together with any related interest or penalties in respect of such VAT reverse charge but excluding any interest or penalties arising as a result of the unreasonable delay or default of Parent), is equal to the amount of the Parent Termination Payment that would be payable but for this subclause (B) (the amount of such reduction being the “Adjustment Amount”); and
(C) the Company covenants to pay to Parent on written demand and on an after-Tax basis an amount equal to the Adjustment Amount save to the extent that such Adjustment Amount has previously been adjusted by way of refund of such part of the Parent Termination Payment, the due date for payment of which shall be five Business Days after the date such written demand is received by the Company. This section 10.03(i) is subject to the provisions of Section 10.03(i) of the Company Disclosure Schedule.
(j) Any reference in Section 10.03(i) or Section 10.03(i) of the Company Disclosure Schedule to Parent shall where applicable be regarded as referring to the representative member of any VAT group of which Parent is a member, and “finally determined” shall mean determined by HMRC or, if such determination is appealed, a court or tribunal in a decision or judgment in respect of which no right of appeal exists (or in relation to which any periods for appeal have expired) or, whether or not such determination is appealed, as provided in a binding agreement made with HMRC.
(k) The parties anticipate that any Company Payment shall be outside the scope of UK VAT and not otherwise subject to VAT.
(l) For the purposes of Section 10.03(i)(ii)(C), and Section 10.03(i) of the Company Disclosure Schedule, a covenant or indemnity being given on an “after-Tax basis” means that the amount payable (the “Payment”) pursuant to such covenant or indemnity (as applicable) shall be calculated in such a manner as will ensure that, after taking into account: (A) any Tax obligation was required to be deducted or withheld from paid. The Company acknowledges that the Payment (save to fee and the extent that Parent has not provided a W-8BEN-E when it was entitled to do so, and provision other provisions of a W-8BEN-E would have prevented such deduction or withholding being required) and any additional amounts required to be paid by the payer of the Payment in consequence of such withholding; (B) the amount and timing of any additional Tax which becomes (or would become, but for the use of any credit or other relief which would otherwise have been available to reduce the Tax liabilities of any member of the recipient’s Group) payable by the recipient of the Payment as a result of the Payment’s being chargeable to Tax in the hands of that person; and (C) the amount and timing of any Tax benefit which is obtained by the recipient of the Payment (or any member of the recipient’s Group) to the extent that such Tax benefit is attributable to the matter giving rise to the obligation to make the Payment or the receipt of the Payment, the recipient of the Payment is in the same position as that in which it would have been if the matter giving rise to the obligation to make a Payment under this Section 10.03(l) had not occurred, provided that if any party to this Agreement shall have assigned or novated the benefit 7.3 are an integral part of this Agreement in whole or in part or shalland that without these agreements, after the date of Parent would not enter into this Agreement, have changed its Tax residence or the permanent establishment to which the rights under this Agreement are allocated then no Payment to that party shall be increased by reason of the operation of clauses (A) through (C) (inclusive) to any greater extent than would have been the case had no such assignment, novation or change taken place. In this Section 10.03(l), references to “Tax” shall exclude “VAT” and references to a “W-8BEN-E” shall mean a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such Payment.
(m) None of the Financing Sources shall have any liability to the Company, any of its Subsidiaries or any Person that is an Affiliate of the Company prior to giving effect to the Mergers relating to or arising out of this Agreement or the Debt Financing, whether at law, or equity, in contract, in tort or otherwise, and neither the Company nor any Person that is an Affiliate of the Company prior to giving effect to the Mergers shall have any rights or claims directly against any of the Financing Sources hereunder or thereunder. The foregoing shall not impair, supplement, or otherwise modify any of the commitments and other o
Appears in 1 contract
Termination Payment. (a) If As compensation for entering into this Agreement, taking action to consummate the transactions hereunder and incurring the costs and expenses related thereto and other losses and damages, including the foregoing of other opportunities, the Company and Parent agree as follows: in the event that this Agreement is terminated: (i) by Parent terminated pursuant to Section 10.01(c)(i7.1(f), 7.1(g) or (ii) by the Company pursuant to Section 10.01(d)(iii7.1(h), then the Company shall pay Parent a fee as liquidated damages and not as a penalty to reimburse Parent (or for its designee)time, in cash expense and by way lost opportunity costs of compensation, a payment in an amount pursuing the Merger equal to $1,180,000,000 8.0 million (the “Company "Termination Payment”Fee"), payable by wire transfer of immediately available funds, concurrently with such termination pursuant to Section 7.1(g), and within two Business Days of the date of any such other termination.
(b) In the event of termination of this Agreement under Section 7.1(b) (but only as a result of the failure to satisfy the condition set forth in Section 6.2(c)), and at or prior to the time of such termination a Takeover Proposal shall have been made known to the Company or publicly announced, and within one year following the termination, the Company shall enter into any Company Acquisition Agreement in respect of or consummate a Takeover Proposal with the Person who made the original Takeover Proposal or an Affiliate of such Person (except that references in the definition of Takeover Proposal to "15%" shall be deemed to be "50%" for purposes hereof), then immediately prior to, and as a condition to the effectiveness of, entering into of such agreement or the termination consummation of this Agreement in such transaction, as the case of a termination pursuant to Section 10.01(d)(iii) or as promptly as practicable (and, in any event, within two Business Days following such termination) in the case of a termination pursuant to Section 10.01(c)(i).
(b) If (i) this Agreement is terminated by Parent or Company pursuant to Section 10.01(b)(iii), (ii) prior to such termination and after the date of this Agreement, a Company Acquisition Proposal shall have been publicly announced or publicly made known and shall not have been publicly withdrawn at least four Business Days prior to the Company Stockholder Meeting and (iii) on or prior to the twelve-month anniversary of such termination of this Agreement: (A) a transaction constituting a Company Acquisition Proposal is consummated; or (B) a definitive agreement relating to a Company Acquisition Proposal is entered into by the Company or any of its Affiliates (in each case, whether or not such Company Acquisition Proposal is the same as the original Company Acquisition Proposal publicly made known or publicly announced), thenmay be, the Company shall pay to Parent, upon demand, the Termination Fee, payable in cash by wire transfer in immediately available funds, as liquidated damages and not as a penalty, to reimburse Parent (or for its designee) by way time, expense and lost opportunity costs of compensation pursuing the Company Termination Payment Merger; provided that no later than the consummation of such Company Acquisition Proposal; provided, that amount shall be payable if the Company Termination Fee shall have actually become payable or have been paid the Company No Vote Payment pursuant to in accordance with Section 10.03(e), then only the incremental amount between the Company No Vote Payment and the Company Termination Payment shall be payable. “Company Acquisition Proposal” for purposes 7.3(a) of this Section 10.03(b) shall have the meaning assigned thereto in the definition thereof set forth in Section 1.01, except that references in the definition to “20%” shall be replaced by “50%”Agreement.
(c) If this Agreement is terminated by the Company pursuant to Section 10.01(d)(i), Parent shall pay Notwithstanding anything to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to $1,415,000,000 (the “Parent Termination Payment”), subject to any adjustment in accordance with Section 10.03(i).
(d) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iv), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to the Parent Termination Payment; provided, that such amount shall be payable only if either (i) the Company Stockholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iii) has not been satisfied at the time of such termination, (B) the Company has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iv).
(e) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iii), the Company shall pay to Parent (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement, a payment in an amount equal to $270,000,000 (the “Company No Vote Payment”); provided, that such amount shall be payable only if either (i) the Parent Shareholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iv) has not been satisfied at the time of such termination, (B) Parent has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iii).
(f) Any payment of the Company Termination Payment or the Company No Vote Payment (each, a “Company Payment”) or the Parent Termination Payment shall be made by wire transfer of immediately available funds to an account designated in writing by Parent or the Company, as applicable. Any Company Payment or Parent Termination Payment shall be made free and clear of and without deduction or withholding of any Taxes; provided:
(i) in the case of the Company Payment, Parent has supplied the Company with a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to the payment of the Company Payment;
(ii) in the case of the Company Payment, in the event that deductions or withholdings on account of U.S. federal income Taxes should have been made under applicable law, then Parent shall bear the cost of such Taxes;
(iii) in the case of the Parent Termination Payment, in the event that deductions or withholdings on account of UK income Tax should have been made under applicable law, then the Company shall bear the cost of such Taxes; and
(iv) in the case of the Parent Termination Payment, Parent may deduct or withhold any amounts in respect of VAT required or permitted to be withheld in accordance with the following provisions of this Section 10.03.
(g) The parties agree and understand that (x) in no event shall the Company be required to pay the Company Termination Payment on more than one occasion or the Company No Vote Payment on more than one occasion, in each case under any circumstances, and the Company No Vote Payment shall be credited toward any subsequent payment of the Company Termination Payment, and in no event shall Parent be required to pay the Parent Termination Payment on more than one occasion under any circumstances, and (y) except in the case of fraud or Willful Breach by the other party of any covenant or agreement contrary set forth in this Agreement, in no event shall Parent be entitled, pursuant to this Section 10.03, to receive an amount greater than the Company Termination Payment and Company No Vote Payment, as applicable (subject to the understanding that the Company No Vote Payment is set off against the Company Termination Payment when the payment of the Company Termination Payment follows the payment of the Company No Vote Payment under Section 10.03(e)), and any applicable additional amounts pursuant to the last two sentences of this Section 10.03(g) (such additional amounts, collectively, the “Parent Additional Amounts”), and in no event shall the Company be entitled, pursuant to this Section 10.03, to receive an amount greater than the Parent Termination Payment and any applicable additional amounts pursuant to Section 6.03(c) and/or the last two sentences of this Section 10.3(g) (such additional amounts, collectively, the “Company Additional Amounts”). Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, (i) if Parent receives a Company Payment and any applicable Parent Additional Amounts from the Company pursuant to this Section 10.03, or if the Company receives the fails to pay to Parent Termination Payment and any applicable Company Additional Amounts from Parent pursuant to amounts due under this Section 10.03, such payment shall be the sole and exclusive remedy 7.3 within 5 Business Days of the receiving party against the paying party and its Subsidiaries and their respective formerdate such amount was required to be paid, current or future partners, equityholders, managers, members, Affiliates and Representatives, and none of the paying party, any of its Subsidiaries or any of their respective former, current or future partners, equityholders, managers, members, Affiliates or Representatives shall have any further liability or obligation, in each case relating to or arising out of this Agreement or the transactions contemplated hereby and (ii) if (A) Parent, Bidco or either Merger Sub receives any payments from the Company in respect of any breach of this Agreement and thereafter Parent receives a Company Payment pursuant to this Section 10.03 or (B) shall pay the Company receives any payments from Parent, Bidco or either Merger Sub in respect of any breach of this Agreement and thereafter the Company receives the Parent Termination Payment, the amount of such Company Termination Payment or such Parent Termination Payment, as applicable, shall be reduced by the aggregate amount of such payments made by the party paying the Company Payment or the Parent Termination Payment, as applicable, in respect of any such breaches (in each case, after taking into account any Parent Additional Amounts or Company Additional Amounts, as applicable). The parties acknowledge that the agreements contained in this Section 10.03 are an integral part of the transactions contemplated hereby, that, without these agreements, the parties would not enter into this Agreement and that any amounts payable pursuant to this Section 10.03 do not constitute a penalty. Accordingly, if any party fails to promptly pay any Company Payment or the Parent Termination Payment due pursuant to this Section 10.03, such party shall also pay any out-of-pocket costs and expenses (together with any irrecoverable VAT incurred thereon, and including reasonable legal fees and expenses) incurred by the party entitled to such payment in connection with a any action, including the filing of any lawsuit or other legal action action, taken to enforce this Agreement that results collect payment, together with interest on the amount of any unpaid fee or obligation at the publicly announced prime rate of Citibank, N.A. in a judgment for such amount against the party failing effect from time to promptly pay such amount. Any Company Payment or Parent Termination Payment not paid when due pursuant to this Section 10.03 shall bear interest time from the date such amount is due until the date paid at a rate equal to the prime rate as published in The Wall Street Journal, Eastern Edition in effect on the date of such payment.
(h) The Parent Termination Payment and the Company Termination Payment (in each case if any) shall be VAT inclusive.
(i) The parties hereto intend that any payment of a Parent Termination Payment, being compensatory in nature, shall not be treated (in whole fee or in part) as consideration for a supply for the purposes of VAT and, accordingly, Parent shall:
(i) file its relevant VAT return on the basis that the payment of any such Parent Termination Payment falls outside the scope of VAT; and
(ii) pay the full amount of any such Parent Termination Payment free and clear of any deduction or adjustment on account of VAT, it being understood and agreed that if it is finally determined that the Parent Termination Payment is (in whole or in part) consideration for a supply for the purposes of VAT then:
(A) Parent shall (1) subject to having received the relevant amount from the Company as provided in sub-clause (C) below, promptly account for and pay to HMRC such VAT together with any associated interest and penalties; and (2) use its reasonable best efforts to recover (by refund, credit or otherwise) any such VAT at the residual recovery rate generally applied by Parent in respect of input VAT incurred on its overheads from time to time;
(B) the amount of the Parent Termination Payment payable by Parent shall be reduced so that the sum of (1) the Parent Termination Payment (as so reduced) and (2) any VAT reverse charge thereon that Parent certifies acting in good faith that it is not entitled to recover (by way of credit or repayment) as input tax (together with any related interest or penalties in respect of such VAT reverse charge but excluding any interest or penalties arising as a result of the unreasonable delay or default of Parent), is equal to the amount of the Parent Termination Payment that would be payable but for this subclause (B) (the amount of such reduction being the “Adjustment Amount”); and
(C) the Company covenants to pay to Parent on written demand and on an after-Tax basis an amount equal to the Adjustment Amount save to the extent that such Adjustment Amount has previously been adjusted by way of refund of such part of the Parent Termination Payment, the due date for payment of which shall be five Business Days after the date such written demand is received by the Company. This section 10.03(i) is subject to the provisions of Section 10.03(i) of the Company Disclosure Schedule.
(j) Any reference in Section 10.03(i) or Section 10.03(i) of the Company Disclosure Schedule to Parent shall where applicable be regarded as referring to the representative member of any VAT group of which Parent is a member, and “finally determined” shall mean determined by HMRC or, if such determination is appealed, a court or tribunal in a decision or judgment in respect of which no right of appeal exists (or in relation to which any periods for appeal have expired) or, whether or not such determination is appealed, as provided in a binding agreement made with HMRC.
(k) The parties anticipate that any Company Payment shall be outside the scope of UK VAT and not otherwise subject to VAT.
(l) For the purposes of Section 10.03(i)(ii)(C), and Section 10.03(i) of the Company Disclosure Schedule, a covenant or indemnity being given on an “after-Tax basis” means that the amount payable (the “Payment”) pursuant to such covenant or indemnity (as applicable) shall be calculated in such a manner as will ensure that, after taking into account: (A) any Tax obligation was required to be deducted or withheld from paid. The Company acknowledges that the Payment (save to fee and the extent that Parent has not provided a W-8BEN-E when it was entitled to do so, and provision other provisions of a W-8BEN-E would have prevented such deduction or withholding being required) and any additional amounts required to be paid by the payer of the Payment in consequence of such withholding; (B) the amount and timing of any additional Tax which becomes (or would become, but for the use of any credit or other relief which would otherwise have been available to reduce the Tax liabilities of any member of the recipient’s Group) payable by the recipient of the Payment as a result of the Payment’s being chargeable to Tax in the hands of that person; and (C) the amount and timing of any Tax benefit which is obtained by the recipient of the Payment (or any member of the recipient’s Group) to the extent that such Tax benefit is attributable to the matter giving rise to the obligation to make the Payment or the receipt of the Payment, the recipient of the Payment is in the same position as that in which it would have been if the matter giving rise to the obligation to make a Payment under this Section 10.03(l) had not occurred, provided that if any party to this Agreement shall have assigned or novated the benefit 7.3 are an integral part of this Agreement in whole or in part or shalland that without these agreements, after the date of Parent would not enter into this Agreement, have changed its Tax residence or the permanent establishment to which the rights under this Agreement are allocated then no Payment to that party shall be increased by reason of the operation of clauses (A) through (C) (inclusive) to any greater extent than would have been the case had no such assignment, novation or change taken place. In this Section 10.03(l), references to “Tax” shall exclude “VAT” and references to a “W-8BEN-E” shall mean a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such Payment.
(m) None of the Financing Sources shall have any liability to the Company, any of its Subsidiaries or any Person that is an Affiliate of the Company prior to giving effect to the Mergers relating to or arising out of this Agreement or the Debt Financing, whether at law, or equity, in contract, in tort or otherwise, and neither the Company nor any Person that is an Affiliate of the Company prior to giving effect to the Mergers shall have any rights or claims directly against any of the Financing Sources hereunder or thereunder. The foregoing shall not impair, supplement, or otherwise modify any of the commitments and other o
Appears in 1 contract
Sources: Merger Agreement (Bha Group Inc)