EXHIBIT 4
TRANSACTION AGREEMENT
DATED
OCTOBER 30, 2002
AMONG
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
ROTHSCHILD TRUST GUERNSEY LIMITED,
AS TRUSTEES OF THE ▇▇▇ TRUST,
▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
AND
CODAN TRUST COMPANY LIMITED,
AS TRUSTEES OF THE JACTMAC MEDIA TRUST
TABLE OF CONTENTS
ARTICLE I -- DEFINITIONS........................................................................................2
1.01. DEFINITIONS..........................................................................................2
ARTICLE II -- TRANSACTIONS.....................................................................................12
2.01. TRANSACTIONS........................................................................................12
2.02. JHM OPTION TO PURCHASE LTBM OPTION SHARES...........................................................13
2.03. CLOSING.............................................................................................16
2.04. LTBM OPTION TO PURCHASE JHM OPTION SHARES...........................................................17
2.05. VOTING RESTRICTIONS AND AGREEMENTS..................................................................18
2.06. DISPOSITION MATTERS.................................................................................21
2.07. PERMITTED LOAN ARRANGEMENTS.........................................................................26
2.09. WAIVER OF RIGHT OF FIRST REFUSAL UNDER THE SETTLEMENT AGREEMENT.....................................28
2.10. FIRST CONTINGENT ADDITIONAL PAYMENT.................................................................28
2.11. SECOND CONTINGENT ADDITIONAL PAYMENT................................................................31
2.12. PAYMENTS............................................................................................32
ARTICLE III -- REPRESENTATIONS AND WARRANTIES OF LTBM AND THE LTBM TRUSTEES....................................33
3.01. AUTHORIZATION.......................................................................................33
3.02. CORPORATE EXISTENCE AND POWER.......................................................................33
3.03. NON-CONTRAVENTION...................................................................................33
3.04. CAPITALIZATION......................................................................................34
3.06. GOVERNMENTAL AUTHORIZATION..........................................................................34
3.07. EXPERIENCE AND FINANCIAL SOPHISTICATION.............................................................35
3.08. FINDERS' FEES.......................................................................................35
3.09. TITLE AND VALIDITY OF LTBM EMMET SHARES.............................................................35
ARTICLE IV -- REPRESENTATIONS AND WARRANTIES OF JHM AND THE JHM TRUSTEES.......................................35
4.01. AUTHORIZATION.......................................................................................35
4.02. CORPORATE EXISTENCE AND POWER.......................................................................36
4.03. GOVERNMENTAL AUTHORIZATION..........................................................................36
4.04. NON-CONTRAVENTION...................................................................................36
4.05. FINDERS' FEES.......................................................................................37
4.06. CAPITALIZATION......................................................................................37
4.08. TITLE AND VALIDITY OF SHARES........................................................................37
ARTICLE V -- COVENANTS OF LTBM AND THE LTBM TRUSTEES...........................................................38
5.01. BEST EFFORTS; FURTHER ASSURANCES....................................................................38
5.02. PUBLIC ANNOUNCEMENTS................................................................................38
5.03. NON-COMPETITION.....................................................................................38
5.04. RELEASE.............................................................................................39
5.05. CONVERSION OF CLASS B SHARES TO CLASS A SHARES......................................................41
5.06. LTBM SEPARATION TRANSACTIONS RESERVE................................................................41
ARTICLE VI -- COVENANTS OF JHM AND THE JHM TRUSTEES............................................................41
6.01. BEST EFFORTS; FURTHER ASSURANCES....................................................................41
6.02. PUBLIC ANNOUNCEMENTS................................................................................41
6.03. RELEASE.............................................................................................42
6.04. ORDERLY SALE OF LTBM RELEASED SHARES................................................................43
6.05. ISSUANCE OF LTBM STOCK OPTION SHARES................................................................43
6.06. ACCESS TO MANAGEMENT................................................................................43
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6.07. SHAREHOLDERS' AGREEMENT WITH NEW THIRD PARTY HOLDER; SHAREHOLDERS' AGREEMENT STILL IN EFFECT........44
6.08. SHAREHOLDERS' AGREEMENT WITH NEW THIRD PARTY HOLDER; SHAREHOLDERS' AGREEMENT NO LONGER IN EFFECT....45
6.09. ROAD SHOW FOR SALE OF LTBM SHARES...................................................................46
6.10. LTBM CONSENT TO GOING PRIVATE TRANSACTION; CONSIDERATION PAYABLE....................................46
6.11. JHM SEPARATION TRANSACTIONS RESERVE.................................................................46
ARTICLE VIA -- COVENANTS OF ALL PARTIES........................................................................46
6.01A. CERTAIN MATTERS RELATING TO THE SEPARATION TRANSACTIONS.............................................46
6.02A. ESCROW AGREEMENT....................................................................................48
ARTICLE VII -- SURVIVAL; INDEMNIFICATION.......................................................................48
7.01. SURVIVAL............................................................................................48
7.02. INDEMNIFICATION.....................................................................................48
7.03. PROCEDURES; EXCLUSIVITY.............................................................................49
ARTICLE VIII -- CONDITIONS TO CLOSING..........................................................................50
8.01. CONDITIONS TO THE OBLIGATIONS OF EACH PARTY.........................................................50
8.02. CONDITIONS TO OBLIGATION OF JHM AND THE JHM TRUSTEES................................................50
8.03. CONDITIONS TO OBLIGATION OF LTBM AND THE LTBM TRUSTEES..............................................50
ARTICLE IX -- TERMINATION......................................................................................51
9.01. GROUNDS FOR TERMINATION.............................................................................51
9.02. EFFECT OF TERMINATION...............................................................................51
ARTICLE X -- MISCELLANEOUS.....................................................................................52
10.01. NOTICES.............................................................................................52
10.02. AMENDMENTS; NO WAIVERS..............................................................................54
10.03. ADJUSTMENTS FOR CHANGES IN CAPITALIZATION...........................................................55
10.04. EXPENSES............................................................................................55
10.05. SUCCESSORS AND ASSIGNS..............................................................................55
10.06. GOVERNING LAW, JURISDICTION, ETC....................................................................55
10.07. COUNTERPARTS; EFFECTIVENESS.........................................................................56
10.08. ENTIRE AGREEMENT....................................................................................56
10.09. CAPTIONS............................................................................................56
10.10. RESCISSION..........................................................................................56
10.11. OBLIGATIONS.........................................................................................57
10.12. REMEDIES FOR BREACH: SPECIFIC PERFORMANCES..........................................................57
EXHIBITS
Exhibit A Outline of Separation Transactions
SCHEDULES
Schedule 2.11 Sale Event Amount
Schedule 3.02 Capital Structure of the Companies
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TRANSACTION AGREEMENT
AGREEMENT dated October 30, 2002 by and among ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
("LTBM"), Rothschild Trust Guernsey Limited (the "LTBM TRUSTEES"), as trustees
of the ▇▇▇ Trust (the "LTBM TRUST"), ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("JHM") and Codan Trust
Company Limited (the "JHM TRUSTEES"), as trustees of The JACTMAC Media Trust
(the "JHM TRUST").
W I T N E S S E T H :
WHEREAS, LTBM, the LTBM Trustees, JHM and the JHM Trustees have executed
the Legally Binding Letter Agreement (as defined below);
WHEREAS, the LTBM Trustees and the JHM Trustees are currently the sole
shareholders of Emmet (as defined below);
WHEREAS, Emmet indirectly owns 97% of the outstanding shares of capital
stock of Floscule (as defined below);
WHEREAS, Floscule owns, among other things, the LTBM Company Shares and
the JHM Company Shares (each as defined below);
WHEREAS, LTBM, the LTBM Trustees, JHM and the JHM Trustees desire (a) to
enter into the Separation Transactions (as defined below) and (b) to re-confirm
the grant of the JHM Option (as defined below);
WHEREAS, because the LTBM Trustees are entering into this Agreement
solely in their capacity as trustees of the LTBM Trust, all references herein to
the "LTBM TRUSTEES" shall be understood to refer to the LTBM Trustees, acting
solely in their capacity as trustees on behalf of the LTBM Trust, and not in any
other capacity; and
WHEREAS, because the JHM Trustees are entering into this Agreement
solely in their capacity as trustees of the JHM Trust, all references herein to
the "JHM TRUSTEES" shall be understood to refer to the JHM Trustees, acting
solely in their capacity as trustees on behalf of the JHM Trust, and not in any
other capacity.
NOW, THEREFORE, for good and valuable consideration (including the
mutual covenants made herein), the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS
1.01. DEFINITIONS. The following terms, as used herein, have the
following meanings:
"AFFILIATE" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by, or under common control with such Person;
PROVIDED that none of the JHM Trustees, the LTBM Trustees or the Company shall
be deemed to be Affiliates of one another by reason of their ownership of any
interests in Emmet or the Company, as the case may be, and neither JHM nor the
JHM Trustees shall be deemed to be Affiliates of LTBM or the LTBM Trustees or
vice versa.
"APPRAISER" has the meaning set forth in Section 2.10.
"AUTHORIZATIONS" means any actions required to be taken by LTBM, the
LTBM Trustees, JHM or the JHM Trustees in any of their capacity as a
shareholder, officer, director or trustee of any Person in order to consummate
the Transactions, including any instructions that are required to be given to
any nominee director, shareholder, officer or trustee or to any management
company, and it is understood that any Authorizations provided to Floscule prior
to the Separation Date shall be equally binding on its applicable successor
entities.
"BEACHCAVE" means Beachcave Corporation N.V., a Netherlands Antilles
corporation.
"BEACHCAVE RECEIVABLES" means the intercompany receivables which at the
date of this agreement are owed by Floscule, ▇▇▇▇▇▇ S.A., ▇▇▇▇▇▇▇ ▇.▇. and
Niveole S.A. to Beachcave in the amounts of approximately EURO 163 million, EURO
147 million, EURO 22 million and EURO 3 million, respectively, as of September
30, 2002.
"BLACKOUT PERIODS" has the meaning set forth in Section 2.06(c).
"BLOCK TRADES" has the meaning set forth in Section 2.11 hereof.
"BLOCK TRADE AMOUNT" has the meaning set forth in Section 2.11 hereof.
"BLOCK TRADE CONDITIONS" has the meaning set forth in Section 2.11
hereof.
"BLOCK TRADE PERIOD" has the meaning set forth in Section 2.11 hereof.
"BUSINESS" means the publication, printing and distribution, via print
and electronic media, of branded classified and related display advertising
information, in a publication or electronic presentation in which such
advertising is its primary purpose, featuring cars, trucks, vehicles, boats,
equipment, computer hardware and software and related equipment and services,
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real estate sales and rentals, employment opportunities and services, whether in
a print or electronic format.
"BUSINESS DAY" means a day, other than Saturday or Sunday, on which the
principal commercial banks located in the British Virgin Islands, Luxembourg,
the Netherlands Antilles, the Netherlands and the United Kingdom are open for
business.
"CLASS A SHARES" means Class A common shares, EURO 0.16 nominal value
per share, of the Company, which shares are entitled to one vote per share.
"CLASS B SHARES" means Class B common shares, EURO 1.92 nominal value
per share, of the Company, which shares are entitled to twelve votes per share.
"CLOSING" has the meaning set forth in Section 2.03.
"CLOSING DATE" means the date of the Closing.
"COMPANY" means
Trader Classified Media NV (formerly ▇▇▇▇▇▇.▇▇▇ NV), a
Netherlands corporation.
"DAMAGES" has the meaning set forth in Section 7.02.
"DESIGNEE" means any Person that is an Affiliate of JHM or the JHM
Trustees that is designated by the JHM Trustees to exercise the JHM Option.
"DISAPPEARING COMPANIES" means Floscule, Beachcave, ▇▇▇▇▇, ▇▇▇▇▇▇ S.A.,
▇▇▇▇▇▇▇ ▇.▇., Niveole S.A. and Phildar National Ltd.
"Disappearing Companies Liabilities" means any liabilities of the
Disappearing Companies other than liabilities in respect of the Beachcave
Receivables and liabilities created in connection with the Transactions.
"EMMET" means Emmet Worldwide Holdings Ltd., a British Virgin Islands
corporation.
"EMMET SHARES" means collectively, the JHM Emmet Shares and the LTBM
Emmet Shares.
"ESCROW AGENT" means the escrow agent identified in the escrow agreement
that the parties shall enter into on or prior to November 29, 2002 pursuant to
Section 6A.02.
"EXCESS EQUITY VALUE" has the meaning set forth in Section 2.10.
"EXTENSION CONDITIONS" means (a) the agreement in respect of outstanding
personal issues concluded between Messrs. Bonnant and ▇▇▇▇▇▇▇ in Geneva shall
have been signed by and/or on
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behalf of LTBM and JHM on or prior to the Closing Date (and LTBM, the LTBM
Trustees, JHM and the JHM Trustees each acknowledge that this Extension
Condition was satisfied as of October 13, 2002); (b) the Fulfillment of the LTBM
Released Shares Sale Condition; (c) the LTBM Pre-closing Payments shall have
been paid to the LTBM Trustees on or prior to the Closing Date (and LTBM, the
LTBM Trustees, JHM and the JHM Trustees each acknowledge that this Extension
Condition was satisfied as of October 24, 2002); and (d) the Fulfillment of the
Sales Condition. Each of LTBM, the LTBM Trustees, JHM and the JHM Trustees agree
to use commercially reasonable best efforts in good faith to cause each of the
foregoing Extension Conditions that have not yet been fulfilled to be fulfilled.
"FAIR MARKET VALUE" has the meaning set forth in Section 2.10.
"FINAL AMOUNT" has the meaning set forth in Section 2.11.
"FIRST ANNIVERSARY" means the date that is the first year anniversary of
the Closing Date.
"FIRST BINDING AMENDMENT" means the Amendment to Legally Binding Letter
Agreement dated as of October 13, 2002 among LTBM, the LTBM Trustees, JHM and
the JHM Trustees.
"FLOSCULE" means Floscule BV, a Netherlands corporation.
"FLOSCULE GROUP" has the meaning set forth in the Shareholders'
Agreement.
"FULFILLMENT OF THE LTBM RELEASED SHARES SALE CONDITION" means that one
of the following events shall have occurred: (a) all of the LTBM Released Shares
shall have been sold on or prior to the Closing Date in accordance with Section
1(b) of the First Binding Amendment, or (b) all of the LTBM Released Shares
shall have been sold after the Closing Date and on or prior to November 29, 2002
in accordance with Section 2.03(e)(i), or (c) on or before November 29, 2002,
the JHM Trustees shall have caused the Price Shortfall Protection Shares to be
transferred to the Escrow Agent to be held solely for the purposes set forth in
Section 2.06(b)(ii), if applicable, and to be returned to the JHM Trustees as
provided in Section 2.06(b)(iii), if applicable.
"FULFILLMENT OF THE SALES CONDITION" means that each of the following
sales transactions has occurred in accordance with the terms of this paragraph.
Beginning on September 15, 2004 (except as agreed otherwise between JHM and
LTBM) and on or prior to each of the subsequent dates set forth below, the
number of Class A Shares included in the LTBM Option Shares set forth opposite
the applicable date shall have been sold by the LTBM Trustees to JHM or his
Designee for cash at a price per share of EURO 8.10, PLUS an amount per share
equal to the sum of (i) 4.9% per annum, compounded annually, on the amount of
EURO 8.10, calculated based on a 365-day year for the actual number of days
elapsed from the First Anniversary to the earlier of the date of sale or October
15, 2004 PLUS (ii) 6.9% per annum, compounded annually, on the amount of EURO
8.10, calculated based on a 365-day year for the actual number of days elapsed
from October 16, 2004 to the date of sale:
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October 15, 2004 214,286
November 15, 2004 214,286
December 15, 2004 214,286
January 14, 2005 214,286
February 15, 2005 214,286
March 15, 2005 214,285
April 15, 2005 214,285
If any of the sales set forth above are not completed by the specified
date, the Option Term shall be deemed to have expired as of such date in
accordance with the provisions of Section 2.02(d), and LTBM, the LTBM Trustees,
JHM and the JHM Trustees shall have no further obligation in respect of such
sales.
"GOING PRIVATE TRANSACTION" means the closing of a transaction in which
each of the following conditions are satisfied:
(a) upon the closing of the transaction, JHM and the JHM
Trustees (or any Affiliate of JHM and/or the JHM Trustees) either alone or
together with ▇▇▇▇▇▇ (or any Affiliate of ▇▇▇▇▇▇) have voting control of the
Company; and
(b) upon closing of the transaction, the Shares of the
Company are no longer publicly traded on any securities exchange and are not
otherwise available for quotation on any inter-dealer quotation system.
"HOLDING COMPANY" has the meaning set forth in Section 3.02.
"HOLDING COMPANY SECURITIES" has the meaning set forth in Section 3.04.
"INDEMNIFIED PARTY" has the meaning set forth in Section 7.03.
"INDEMNIFYING PARTY" has the meaning set forth in Section 7.03.
"INSTITUTIONAL NOTES" means promissory notes, in the principal amount
necessary to satisfy that portion of the exercise price of the JHM Option as may
be required by Section 2.02(c), issued by any Person or guaranteed by any Person
so long as the following conditions are met:
(a) the obligor or guarantor of the promissory notes has a
credit rating equivalent to or better than ▇▇▇▇▇▇ on September 26, 2002, which
for clarity and avoidance of doubt was BBB+, an investment grade rating;
(b) the obligor or guarantor of the promissory notes is not
resident in the United Kingdom;
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(c) the interest rate payable under the promissory notes is
not less than 4.9% per annum, compounded annually; and
(d) the timing of the principal payments under the
promissory notes are no less favorable to the payee than the following schedule:
(i) if the promissory notes are delivered to the
payee on or before August 31, 2003, then the cumulative principal amounts
payable to the payee shall be as follows:
(A) 38.80% on the date of the delivery of the
promissory notes;
(B) 64.66% on August 31, 2003;
(C) 73.97% on August 31, 2004;
(D) 83.28% on August 31, 2005;
(E) 92.59% on August 31, 2006; and
(F) 100% on August 31, 2007.
(ii) if the promissory notes are delivered to the
payee after August 31, 2003 but on or before August 31, 2004, then the
cumulative principal amounts payable to the payee shall be as follows:
(A) 64.66% on the date of the delivery of the
promissory notes;
(B) 73.97% on August 31, 2004;
(C) 83.28% on August 31, 2005;
(D) 92.59% on August 31, 2006; and
(E) 100% on August 31, 2007.
(iii) if the promissory notes are delivered to the
payee after August 31, 2004, then the cumulative principal amounts payable to
the payee shall be as follows:
(A) 73.97% on the date of the delivery of the
promissory notes;
(B) 83.28% on August 31, 2005;
(C) 92.59% on August 31, 2006; and
(D) 100% on August 31, 2007.
"JHM ADDITIONAL RESTRICTED VOTING SHARES" means that number of Shares of
the Company owned by JHM or the JHM Trustees as is equal to the lesser of (a)
1,500,000 and (b) the total of (i) the number of Shares of the Company sold from
time to time by LTBM or the LTBM Trustees after expiration of the Option Term
MINUS (ii) the number of Shares of the Company sold from time to time by JHM or
the JHM Trustees after expiration of the Option Term.
"JHM BORROWED FUNDS" has the meaning set forth in Section 2.07(b).
6
"JHM COMPANY SHARES" means the 6,432,679 Class A Shares and 17,732,628
Class B Shares of the Company indirectly owned by the JHM Trustees through the
ownership by the JHM Trustees of the JHM Emmet Shares.
"JHM COUNTERPART SHARES" means 3,500,000 Class A Shares of the JHM
Company Shares.
"JHM DEED OF TRUST" means the Settlement dated August 30, 2002 between
JHM and the JHM Trustees concerning the settlement of the JHM Trust.
"JHM EMMET SHARES" means all shares of Emmet, including any common or
ordinary shares and any preferred shares, including any preferred shares that
may have been issued to or are owned exclusively by JHM or the JHM Trustees.
"JHM ESTATE PLAN" means the estate plan of JHM containing the provisions
outlined in Section 19 of the Legally Binding Letter Agreement.
"JHM LENDER" has the meaning set forth in Section 2.07(b).
"JHM LOAN AGREEMENT" has the meaning set forth in Section 2.07(b).
"JHM OPTION" has the meaning set forth in Section 2.02.
"JHM OPTION SHARES" means the number of Class A Shares and Class B
Shares held by the JHM Trustees that is equal in number to the LTBM Option
Shares.
"JHM RELEASED MATTERS" has the meaning set forth in Section 6.03.
"JHM RELEASORS" has the meaning set forth in Section 6.03.
"JHM RESTRICTED VOTING SHARES" means that number of Shares of the
Company owned by JHM or the JHM Trustees as is equal to the total of (a) the JHM
Counterpart Shares LESS (b) any of the JHM Company Shares sold from time to time
by the JHM Trustees pursuant to Section 2.06(c) of this Agreement PLUS (c) any
Shares of the Company acquired by JHM or the JHM Trustees (or any Affiliate of
JHM and/or the JHM Trustees) at any time after the date of the Legally Binding
Letter Agreement including the JHM Stock Option Shares, but not including for
this purpose Shares of the Company acquired by JHM or the JHM Trustees pursuant
to the terms of this Agreement.
"JHM SEPARATION TRANSACTIONS RESERVE" means EURO 212,370 to be paid by
JHM to Floscule to pay JHM's portion of the expenses incurred after the Closing
Date associated with the Separation Transactions pursuant to Section 6.11.
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"JHM STOCK OPTION" means the option to subscribe for 258,492 Class A
Shares of the Company held by JHM or his Affiliate.
"JHM STOCK OPTION SHARES" means the Shares of the Company underlying the
JHM Stock Option.
"LEGALLY BINDING LETTER AGREEMENT" means the Legally Binding Letter
Agreement dated as of September 26, 2002, as amended by the First Binding
Amendment and the Second Binding Amendment, among LTBM, the LTBM Trustees, JHM
and the JHM Trustees.
"LTBM BEACHCAVE RECEIVABLES" means 44.609% of the Beachcave Receivables
as of the Separation Date.
"LTBM BORROWED FUNDS" has the meaning set forth in Section 2.07(a).
"LTBM CLASS A TRUST" has the meaning set forth in Section 2.06(a).
"LTBM CLASS A TRUSTEE" has the meaning set forth in Section 2.06(a).
"LTBM CLOSING DATE PAYMENT" means an amount equal to the LTBM Released
Proceeds.
"LTBM COMPANY SHARES" means the 6,432,679 Class A Shares, MINUS the LTBM
Disposed Shares, and 17,732,628 Class B Shares of the Company indirectly owned
by the LTBM Trustees through the ownership by the LTBM Trustees of the LTBM
Emmet Shares.
"LTBM DEED OF TRUST" means the settlement between LTBM and the LTBM
Trustees concerning the settlement of the LTBM Trust, and any settlement between
LTBM and the LTBM Class A Trustees concerning the settlement of any LTBM Class A
Trust as permitted in Section 2.06(a).
"LTBM DISPOSED SHARES" means the 1,033,598 Class A Shares of the LTBM
Company Shares sold by Floscule on or prior to the Closing Date on behalf of
LTBM and the LTBM Trustees.
"LTBM EMMET SHARES" means all shares of Emmet, including any common or
ordinary shares and any preferred shares, including any preferred shares that
may have been issued to or are owned exclusively by LTBM or the LTBM Trustees.
"LTBM FIRST TIER NOMINEES" has the meaning set forth in Section 2.05(d).
"LTBM LENDER" has the meaning set forth in Section 2.07(a).
"LTBM LOAN AGREEMENT" has the meaning set forth in Section 2.07(a).
8
"LTBM OPTION" has the meaning set forth in Section 2.04.
"LTBM OPTION SHARES" means 2,932,679 Class A Shares and 17,732,628
Class B Shares of the LTBM Company Shares, MINUS the number of LTBM Option
Shares that may have been sold pursuant to Section 6A.01(a).
"LTBM PAYMENTS" means an aggregate amount equal to the LTBM Pre-closing
Payments, PLUS the LTBM Closing Date Payment.
"LTBM PRE-CLOSING PAYMENTS" means the EURO 2 million paid to LTBM or the
LTBM Trustees by an Affiliate of Floscule on or about October 16, 2002 and the
EURO 2 million paid to LTBM or the LTBM Trustees by an Affiliate of Floscule on
or about October 24, 2002, collectively.
"LTBM RELEASED PROCEEDS" means (a) prior to and at the Closing, the net
proceeds realized upon the sale of the LTBM Disposed Shares MINUS the LTBM
Pre-closing Payments and (b) after the Closing, the net proceeds realized upon
the sale of the LTBM Disposed Shares MINUS the LTBM Payments.
"LTBM RELEASED SHARES" means (a) prior to and at the Closing, the number
of Class A Shares from the LTBM Company Shares equal to 3,500,000 MINUS the LTBM
Disposed Shares and (b) after the Closing, the number of the LTBM Released
Shares determined at the Closing MINUS the number of any LTBM Released Shares
sold in accordance with the instructions delivered pursuant to Section 2.03(e).
"LTBM RELEASEES" has the meaning set forth in Section 6.03.
"LTBM RELEASORS" has the meaning set forth in Section 5.04.
"LTBM RESTRICTED VOTING SHARES" means that number of Shares of the
Company owned by LTBM or the LTBM Trustees as is equal to the total of (a) the
LTBM Released Shares MINUS (b) any of the LTBM Released Shares sold from time to
time pursuant to Section 2.03(e) or 2.06(b) of this Agreement PLUS (c) any
Shares of the Company acquired by LTBM or the LTBM Trustees (or any Affiliate of
LTBM and/or the LTBM Trustees) at any time after the date of the Legally Binding
Letter Agreement including the LTBM Stock Option Shares, but not including for
this purpose any Shares acquired by LTBM or the LTBM Trustees pursuant to the
terms of this Agreement.
"LTBM SECOND TIER NOMINEE" has the meaning set forth in Section 2.05(d).
"LTBM SEPARATION TRANSACTIONS RESERVE" means EURO 200,000 to be paid to
Floscule to pay LTBM's portion of the expenses incurred after the Closing Date
associated with the Separation Transactions pursuant to Section 5.06.
9
"LTBM STOCK OPTION" means Spark Profit's option to subscribe for 258,492
Class A Shares.
"LTBM STOCK OPTION SHARES" means the Shares of the Company underlying
the LTBM Stock Option.
"MAJORITY HOLDER" has the meaning set forth in the Shareholders'
Agreement.
"MARCH SALE DATE" means March 10, 2003, or such later date as the window
opens under the Company's blackout policy following the announcement by the
Company of its audited results for the fiscal year ending December 31, 2002.
"OFFER" has the meaning set forth in Section 2.06(f).
"OFFEREE" has the meaning set forth in Section 2.06(f).
"OFFEROR" has the meaning set forth in Section 2.06(f).
"OPTION TERM" means the period commencing on September 26, 2002 and
ending on the date determined in accordance with the provisions of Section
2.02(d).
"PER SHARE EXCESS EQUITY VALUE" has the meaning set forth in Section
2.10.
"PER SHARE SALE EVENT PROCEEDS" has the meaning set forth in Section
2.10.
"PERSON" means an individual, corporation, partnership, association,
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"PRICE SHORTFALL" has the meaning set forth in Section 2.06(b).
"PRICE SHORTFALL PROTECTION SHARES" means 1,000,000 Class A Shares of
the JHM Company Shares.
"RELEASEES" has the meaning set forth in Section 5.04.
"RELEASED MATTERS" has the meaning set forth in Section 5.04.
"SALE EVENT" has the meaning set forth in Section 2.10.
"SALE EVENT AMOUNT" has the meaning set forth in Section 2.11.
"SALE EVENT PERIOD" has the meaning set forth in Section 2.11.
10
"SALE EVENT PROCEEDS" has the meaning set forth in Section 2.10.
"SECOND BINDING AMENDMENT" means Amendment No. 2 to Legally Binding
Letter Agreement dated as of October 21, 2002 among LTBM, the LTBM Trustees, JHM
and the JHM Trustees.
"SEPARATION DATE" means the date on which all of the Separation
Transactions have been finally consumated.
"SEPARATION TRANSACTIONS" means the transactions, outlined in more
detail in EXHIBIT A, pursuant to which: (a) the LTBM Option Shares, the LTBM
Released Shares, the LTBM Released Proceeds and the LTBM Beachcave Receivables
are transferred such that (i) the LTBM Trustees own directly, or indirectly, the
LTBM Option Shares, the LTBM Released Shares, the LTBM Released Proceeds and the
LTBM Beachcave Receivables, and (ii) Floscule ceases to exist and consequently
ceases to own, directly or indirectly, the LTBM Option Shares, the LTBM Released
Shares, the LTBM Released Proceeds and the LTBM Beachcave Receivables (b) Emmet
is liquidated and consequently the LTBM Trustees cease to own, directly or
indirectly, the LTBM Emmet Shares, (c) all other liabilities of the Disappearing
Companies other than the Beachcave Receivables are paid in full and (d) the JHM
Trustees, together with ▇▇▇▇ Teyssonniere de Gramont, own, directly or
indirectly, all other assets of the Disappearing Companies.
"SETTLEMENT AGREEMENT" has the meaning set forth in Section 5.04.
"SHAREHOLDERS' AGREEMENT" means the Shareholders' Agreement executed on
March 16, 2000 between the Company, Floscule, ▇▇▇▇▇▇, ▇▇▇▇▇ Corporation S.A.,
Figema S.A., JHM, LTBM and ▇▇▇▇ Teyssonniere de Gramont.
"SHARES" means Class A Shares and Class B Shares.
"SPARK PROFIT" means Spark Profit Ltd., a British Virgin Islands
corporation, wholly-owned by LTBM.
"SUPERVISORY BOARD" means the Supervisory Board of the Company.
"TERRITORY" has the meaning set forth in Section 5.03.
"THIRD PARTY" means a prospective purchaser of Shares in an arm's length
negotiated transaction where such purchaser is not an Affiliate of the seller or
sellers.
"THIRD PARTY TRANSFEREE" has the meaning set forth in Section 6.07.
"TMF" means TMF Management B.V.
11
"TRANSACTIONS" has the meaning set forth in 2.01(e).
"UNREIMBURSED AMOUNT" has the meaning set forth in Section 2.12.
"▇▇▇▇▇▇" means ▇▇▇▇▇▇ Investissements, a French corporation (as
successor to Compagnie Generale d'Industrie et de Participations).
ARTICLE II
TRANSACTIONS
2.01. TRANSACTIONS. (a) Upon the terms and subject to the conditions
of this Agreement, at the Closing, LTBM, the LTBM Trustees, JHM and the JHM
Trustees hereby irrevocably commit to cause the Separation Transactions to occur
such that:
(i) the LTBM Trustees (or a special purpose company
or companies wholly owned by the LTBM Trustees) will own, directly or
indirectly, the LTBM Option Shares, the LTBM Released Shares, the LTBM Released
Proceeds, the LTBM Beachcave Receivables and the shares of the other companies
identified on Exhibit A as being owned, directly or indirectly by the LTBM
Trustees after the Separation Date;
(ii) Floscule and certain of its Affiliates will
cease to exist and will consequently cease to own, directly or indirectly, the
LTBM Option Shares, the LTBM Released Shares, the LTBM Released Proceeds, the
Disappearing Companies (except Emmet), and the LTBM Beachcave Receivables;
(iii) Emmet will be liquidated and consequently the
LTBM Trustees will cease to own, directly or indirectly, the LTBM Emmet Shares;
and
(iv) the JHM Trustees and ▇▇▇▇ Teyssonniere de
Gramont (or an Affiliate or special purpose company or companies wholly owned by
them) will own, directly or indirectly, all of the assets of the Disappearing
Companies other than those listed at clause (i) above.
The parties hereto acknowledge and agree that (x) the Separation
Transactions cannot occur at the Closing as a result of statutory notice and
other requirements in certain of the jurisdictions in which the Separation
Transactions must occur and (y) on and after the Closing, (I) none of them will
take any action that could reasonably be construed as intended to hinder, delay
or otherwise adversely affect the prompt completion of the Separation
Transactions or to cause them to have consequences other than as set forth on
EXHIBIT A; (II) each of them will use best efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things necessary, proper
or advisable under applicable law to cause the Separation Transactions to occur
12
as soon as is possible, consistent with the objectives of the Separation
Transactions, which shall include completion of those objectives in as
tax-efficient a manner for LTBM, the LTBM Trustees, JHM and the JHM Trustees as
possible; and (III) each of them will consult with, circulate drafts of
documents related to the Separation Transactions to, and take into account the
reasonable comments of, the other parties.
(b) Upon the terms and subject to the conditions of this
Agreement, at the Closing, the JHM Option shall continue in effect pursuant to
the provisions of Section 2.02 hereof.
(c) Upon the terms and subject to the conditions of this
Agreement, at the Closing, the parties hereto shall cause Floscule to make, or
cause an Affiliate of Floscule to make, a payment to the LTBM Trustees in an
amount equal to the LTBM Closing Date Payment.
(d) Upon the terms and subject to the conditions of this
Agreement, effective at the Closing, the parties hereto shall cause Floscule to
sell, at any time and from time to time until the date of completion of the
Separation Transactions, in accordance with the provisions of Section 2.03(e),
all or any portion of the LTBM Released Shares and to pay the net proceeds of
such sales to the LTBM Trustees; PROVIDED that each such sale is subject to
applicable Company black-out periods, any contractual lock-up arrangement
previously granted in connection with the sale of LTBM Disposed Shares and
applicable law.
(e) The transactions contemplated by this Section 2.01 are
hereinafter called the "TRANSACTIONS" and each a "TRANSACTION".
2.02. JHM OPTION TO PURCHASE LTBM OPTION SHARES.
(a) CONFIRMATION OF GRANT OF JHM OPTION. Effective at the
Closing, LTBM and the LTBM Trustees hereby irrevocably re-confirm the
irrevocable grant pursuant to the terms of the Legally Binding Letter Agreement
to the Designee of the JHM Trustees of the option (hereinafter, the "JHM
OPTION") to purchase the LTBM Option Shares on the terms and conditions of this
Section 2.02.
Except as provided below, for purposes of exercising the JHM Option, the
JHM Trustees or their Designee may elect, in lieu of acquiring LTBM Option
Shares, to acquire all of the issued and outstanding capital stock of any
holding company owned directly or indirectly by LTBM or the LTBM Trustees that
holds, directly or indirectly, the LTBM Option Shares. In such event, the
provisions hereof relating to delivery of the LTBM Option Shares, including that
such shares shall be free and clear of any lien, charge or other encumbrance,
shall apply to the shares of such holding company. To the extent that any such
holding company has at such time, any direct or indirect liabilities or direct
or indirect assets other than its direct or indirect interest in the LTBM Option
Shares, then, in connection with the exercise of the JHM Option, all of such
additional direct or indirect assets shall be removed or transferred to or to
the order of the LTBM Trustees and all of such liabilities shall be satisfied by
deducting the appropriate amount from the
13
exercise price. If any liabilities are not deducted from the exercise price, the
LTBM Trustees shall promptly reimburse the applicable holding company for the
full amount of any such liabilities. The JHM Trustees or their Designee shall
not be entitled to elect to acquire all of the issued and outstanding capital
stock of any holding company owned directly or indirectly by LTBM or the LTBM
Trustees that holds, directly or indirectly, the LTBM Option Shares if such
election would result in an increased tax liability for LTBM or the LTBM
Trustees over any tax liability that would apply as of the date of this
Agreement.
(b) EXERCISE PRICE. The exercise price for each of the LTBM
Option Shares underlying the JHM Option shall be calculated as follows:
(i) During the period commencing on the Closing Date
and ending on the First Anniversary, the exercise price for each of the LTBM
Option Shares underlying the JHM Option shall be equal to EURO 7.50 plus
interest thereon calculated at the rate of 4.9% per annum, compounded annually,
calculated based on a 365-day year for the actual number of days elapsed from
the Closing Date until the date of exercise; or
(ii) During the period commencing on the day after
the First Anniversary and continuing until the end of the Option Term, the
exercise price for each of the LTBM Option Shares underlying the JHM Option
shall be equal to EURO 8.10 plus interest thereon calculated at the rate of 4.9%
per annum, compounded annually, calculated based on a 365-day year for the
actual number of days elapsed from the day after the First Anniversary until the
date of exercise.
(c) FORM OF EXERCISE AND PAYMENT. The JHM Option may be
exercised at any time during the Option Term in whole, but not in part,
immediately upon giving a written notice of exercise to the LTBM Trustees. Such
notice shall be accompanied by payment in full of the exercise price for the
LTBM Option Shares underlying the JHM Option, which payment shall be in any of
the following forms:
(i) in cash;
(ii) in Institutional Notes; or
(iii) any combination of (i) and (ii) above.
In addition, if (A) LTBM or the LTBM Trustees have pledged the
LTBM Option Shares in order to borrow the LTBM Borrowed Funds (as permitted in
Section 2.07(a) below), and (B) upon the exercise of the JHM Option by the
Designee of the JHM Trustees, the LTBM Lender requires the LTBM Borrowed Funds
to be repaid prior to releasing the LTBM Option Shares, then (C) the JHM
Trustees or their Designee may deliver to the LTBM Lender that portion of the
exercise price for the LTBM Option Shares underlying the JHM Option as may be
necessary (as certified by the LTBM Lender) in order to repay the LTBM Borrowed
Funds and the delivery of such funds to the LTBM Lender shall satisfy the
obligation of the JHM Trustees
14
or their Designee to deliver such amount to the LTBM Trustees as payment for
that portion of the exercise price for the LTBM Option Shares underlying the JHM
Option.
Upon exercise of the JHM Option in accordance with Section
2.02(c), and payment of the exercise price in accordance with Section 2.02(b),
LTBM or the LTBM Trustees shall immediately deliver (or, if applicable, cause
the LTBM Lender to deliver) the LTBM Option Shares to the JHM Trustees or their
Designee, free and clear of any lien, charge or other encumbrance (it being
understood that, if the JHM Option is exercised prior to the Separation Date,
the parties will provide any Authorizations necessary to cause the LTBM Option
Shares to be delivered to the Designee of the JHM Trustees).
It is understood and agreed that upon the exercise of the JHM
Option by the Designee of the JHM Trustees, JHM and the JHM Trustees may sell
their entire interest in the Company, directly or indirectly, at any time
subject only to the obligations of JHM and the JHM Trustees under Section 2.10
and Section 2.11 hereof (if applicable) and the provision of the JHM Estate Plan
set forth in Section 19b of the Legally Binding Letter Agreement.
JHM and the JHM Trustees shall have the option, but not the
obligation, to give LTBM and the LTBM Trustees non-binding advance notice of
their intent to exercise the JHM Option. Any such notice, if given, shall not
obligate JHM or the JHM Trustees to exercise the JHM Option. Upon the receipt of
any such advance notice, in order to facilitate the immediate delivery of the
LTBM Option Shares against payment of the exercise price, LTBM and the LTBM
Trustees shall take all reasonably necessary steps to deliver the LTBM Option
Shares at the time and place and on the date specified in such notice
(including, if requested by JHM or the JHM Trustees, depositing the LTBM Option
Shares with an independent escrow agent with instructions to release the LTBM
Option Shares against payment of the exercise price specified in Section
2.02(b)). The costs associated with any such escrow arrangement shall be paid by
(i) JHM or the JHM Trustees, if the JHM Option is not exercised on or about the
date set forth in the notice and (ii) LTBM or the LTBM Trustees, on the one
hand, and JHM or the JHM Trustees, on the other hand, in equal proportions, if
the JHM Option is exercised on or about the date set forth in the notice.
(d) TERM OF JHM OPTION. The JHM Option shall terminate
immediately upon the earliest to occur of: (i) the exercise of the JHM Option
and (ii) ▇ ▇.▇. (▇▇▇▇▇▇, ▇▇▇▇▇▇▇, local time) on October 15, 2004; provided
however, that if the Extension Conditions have been satisfied, the term of the
JHM Option shall be automatically extended until May 16, 2005 unless fulfillment
of the Fulfillment of the Sales Condition is no longer possible because any of
the sales described in the definition of "Fulfillment of the Sales Condition"
are not consummated as described therein, in which case the term of the JHM
Option shall expire on the date on which the particular sale which has not been
consummated should have been made.
If the JHM Option has expired unexercised, the LTBM Trustees
will hold the LTBM Option Shares free and clear of the JHM Option but shall
otherwise be bound by the terms and conditions of this Agreement (or any other
applicable agreement) concerning such
15
Shares. For clarity and avoidance of doubt, it is understood that Section 2.09
of this Agreement is operative whether the JHM Option is exercised or expires
unexercised.
(e) DESIGNEE. During the Option Term, the JHM Option shall
be exercisable by either the JHM Trustees or any Designee.
(f) CONTINUING RIGHT TO EXERCISE UPON LTBM'S DEATH. The JHM
Option shall remain in full force and effect and the JHM Trustees or any
Designee shall continue to have the right to exercise the JHM Option during the
Option Term notwithstanding LTBM's death.
2.03. CLOSING. The closing (the "CLOSING") of the Transactions shall
take place at the offices of Linklaters, at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ at 1:00 p.m. (London, England, local time) on October 30, 2002, or as
soon as possible thereafter, with time being of the essence, or at such other
time and place as LTBM and JHM may agree. At the Closing:
(a) The LTBM Trustees and the JHM Trustees shall deliver
irrevocable instructions, in form and substance satisfactory to counsel for each
of LTBM, JHM, the LTBM Trustees and the JHM Trustees, evidencing their
irrevocable instructions and commitments to cause the Separation Transactions to
occur (including by depositing the JHM Emmet Shares and the LTBM Emmet Shares
with Linklaters Brussels pursuant to a mutually satisfactory escrow arrangement
by which Linklaters Brussels will hold the JHM Emmet Shares and the LTBM Emmet
Shares and deliver them to the appropriate party in connection with the
Separation Transactions).
(b) LTBM and the LTBM Trustee shall irrevocably instruct the
Person holding the LTBM Emmet Shares to deliver such Shares to Linklaters
Brussels.
(c) JHM and the JHM Trustees shall irrevocably instruct the
Person holding the JHM Emmet Shares to deliver such Shares to Linklaters
Brussels.
(d) The LTBM Trustees and the JHM Trustees (i) shall deliver
irrevocable instructions to Floscule to cause Floscule to make, or cause an
Affiliate of Floscule to make, a payment to the LTBM Trustees in an amount equal
to the LTBM Closing Date Payment and (ii) shall have received reasonably
satisfactory evidence from Floscule that such payment will be made promptly, for
value on the Closing Date within 48 hours after the Closing Date, to such bank
account or accounts as the LTBM Trustees may have specified in writing prior to
the Closing Date. For clarity and avoidance of doubt it is understood that the
LTBM Closing Date Payment shall be made without deduction or off-set.
(e) The LTBM Trustees and the JHM Trustees shall deliver
irrevocable instructions to Floscule to:
(i) sell, at any time and from time to time until
November 29, 2002, all or any portion of the LTBM Released Shares, if such sales
can be accomplished at a gross
16
price (before commissions) of EURO 7.80 or above, and to pay the net proceeds of
each such sale to the LTBM Trustees within three Business Days following the
receipt of the proceeds of the relevant sale;
(ii) sell, at any time and from time to time
beginning on November 30, 2002 and ending on the March Sale Date, upon the
request of JHM or the JHM Trustees, all or any portion of the LTBM Released
Shares as he or they shall specify, if such sales can be accomplished at a gross
price (before commissions) of EURO 7.80 or above, plus an amount per share equal
to 6.9% per annum, compounded annually, calculated based on a 365-day year for
the actual number of days elapsed from November 30, 2002 to the date of
completion of each sale, and to pay the net proceeds of each such sale to the
LTBM Trustees within three Business Days following the receipt of the proceeds
of each such sale; PROVIDED that (1) the LTBM Trustees may, by notice to JHM and
the JHM Trustees, elect to reduce the EURO 7.80 price set forth herein for any
or all of such sales, and (2) if the Separation Transactions are completed prior
to the March Sale Date, LTBM and the LTBM Trustees will sell the LTBM Released
Shares at the request of JHM or the JHM Trustees in accordance with the
foregoing provisions of this clause (ii);
(iii) sell, at any time and from time to time
beginning on the March Sale Date and ending on the date of completion of the
Separation Transactions, upon the request of the LTBM Trustees, all or any
portion of the LTBM Released Shares and to pay the net proceeds of such sales to
the LTBM Trustees; PROVIDED that for clarity and avoidance of doubt, the LTBM
Trustees' ability to sell shares after the completion of the Separation
Transactions is set forth in Section 2.06(b); and
(iv) undertake all sales under this Section 2.03(e)
in accordance with applicable securities law, in accordance with the Company's
blackout policy then in effect and pursuant to the terms of any applicable
unreleased lock-up agreement and, for clarity and avoidance of doubt, Section
2.06(f) and Section 2.06(g) shall not apply to sales permitted under this
Section 2.03(e).
To the extent that the LTBM Separation Transactions
Reserve has not been paid to Floscule in accordance with Section 5.06, there
shall be deducted from the net proceeds of the sale of LTBM Released Shares an
amount equal to the LTBM Separation Transactions Reserve, and such amount shall
be paid to Floscule.
To the extent that LTBM or the LTBM Trustees have not
paid their 48.5% share of any Disappearing Company Liability due to any creditor
pursuant to Section 6A.01(a), there shall be deducted from the net proceeds of
the sale of LTBM Released Shares an amount equal to such 48.5% share of such
Disappearing Company Liability and such amount shall be paid to the creditor
thereof.
2.04. LTBM OPTION TO PURCHASE JHM OPTION SHARES. If JHM dies during
the Option Term, LTBM or the LTBM Trustees shall have the option (the "LTBM
OPTION") to
17
purchase the JHM Option Shares upon the same terms and conditions and subject to
the same restrictions contained in this Agreement as may apply to JHM or the JHM
Trustees.
2.05. VOTING RESTRICTIONS AND AGREEMENTS.
(a) VOTING OF LTBM OPTION SHARES. At each meeting of
shareholders of the Company properly called, the LTBM Trustees shall be entitled
to vote or cause to be voted that number of the LTBM Option Shares then owned
directly or indirectly by the LTBM Trustees without restriction. No such vote by
the LTBM Trustees shall adversely affect the JHM Option or LTBM's or the LTBM
Trustees' obligations under this Agreement. JHM shall have no right to direct
the voting of the LTBM Option Shares.
(b) VOTING RESTRICTIONS DURING THE OPTION TERM. During the
Option Term, to the fullest extent permitted by applicable law:
(i) LTBM and the LTBM Trustees shall not vote or
cause to be voted, grant any proxy or power of attorney over, deposit into a
voting trust or enter into a voting agreement with respect to any of the LTBM
Restricted Voting Shares; and
(ii) Except as permitted in Section 2.05(d), JHM and
the JHM Trustees shall not vote or cause to be voted, grant any proxy or power
of attorney over, deposit into a voting trust or enter into a voting agreement
with respect to any of the JHM Restricted Voting Shares.
(c) VOTING RESTRICTIONS IF JHM OPTION HAS EXPIRED
UNEXERCISED. If the JHM Option has expired unexercised, then from and after the
expiration of the Option Term, to the fullest extent permitted by applicable
law:
(i) LTBM and the LTBM Trustees shall not vote or
cause to be voted, grant any proxy or power of attorney over, deposit into a
voting trust or enter into a voting agreement with respect to any of the LTBM
Restricted Voting Shares. The restrictions contained in this paragraph will
cease to apply when JHM and the JHM Trustees own less than 10,000,000 Shares of
the Company.
(ii) JHM and the JHM Trustees shall not vote or cause
to be voted, grant any proxy or power of attorney over, deposit into a voting
trust or enter into a voting agreement with respect to any of the JHM Restricted
Voting Shares or the JHM Additional Restricted Voting Shares. The restrictions
contained in this paragraph will cease to apply when LTBM and the LTBM Trustees
own less than 10,000,000 Shares of the Company.
To the extent that any of the voting restrictions
contained in Sections 2.05(b) or (c) are unenforceable under Dutch law, the JHM
Trustees and the LTBM Trustees hereby agree to cause the Shares which are
subject to the relevant restriction to be voted
18
at each shareholders meeting of the Company in the same proportions as all other
Shares are voted at such meeting.
(d) SUPERVISORY BOARD NOMINEES AND ELECTIONS.
(i) During the Option Term, the LTBM Trustees shall
be entitled to designate one individual as a nominee of the Floscule Group for
election as a member of the Supervisory Board, which nominee shall be ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇. During the Option Term, at each general meeting of
shareholders of the Company properly called involving the election of members of
the Supervisory Board, JHM and the JHM Trustees agree to: (A) cause ▇▇▇▇▇ ▇▇▇▇▇▇
Nightingale to be nominated for election as a member of the Supervisory Board,
(B) vote or cause to be voted the JHM Company Shares in favor of the election of
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ to the Supervisory Board and, if necessary, (C)
exercise, together with LTBM and the LTBM Trustees, their rights under the
Shareholders' Agreement (including Section 2.1 thereof) to cause ▇▇▇▇▇▇ to (I)
take any necessary action to cause ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ to be nominated for
election as a member of the Supervisory Board and (II) vote, or cause to be
voted, the Shares owned by ▇▇▇▇▇▇ in favor of ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇. After
the Closing Date, at all meetings of the Supervisory Board prior to the meeting
of shareholders at which ▇▇. ▇▇▇▇▇▇▇▇▇▇▇ will be elected, JHM shall use
reasonable best efforts to cause the Supervisory Board to invite ▇▇. ▇▇▇▇▇▇▇▇▇▇▇
to attend such meetings as an observer.
(ii) If the Option Term has been extended beyond
October 15, 2004 pursuant to the provisions of Section 2.02(d), then beginning
on October 15, 2004 and continuing until the end of the Option Term, the LTBM
Trustees shall be entitled to designate one additional individual as a nominee
of the Floscule Group for election as a member of the Supervisory Board, which
may be LTBM. Such nominee, if not LTBM, shall be reasonably satisfactory to JHM
(it being understood that such nominee may not be (1) an investment banker under
engagement with or previously under engagement with LTBM or (2) a lawyer who has
performed or expects to perform non-business legal services for LTBM). Beginning
on October 15, 2004 and continuing until the end of the Option Term, at each
general meeting of shareholders of the Company properly called involving the
election of members of the Supervisory Board, JHM and the JHM Trustees agree to:
(A) cause such nominee to be nominated for election as a member of the
Supervisory Board, (B) vote or cause to be voted the JHM Company Shares in favor
of such nominee and, if necessary, (C) exercise, together with LTBM and the LTBM
Trustees, their rights under the Shareholders' Agreement (including Section 2.1
thereof) to cause ▇▇▇▇▇▇ to (I) take any necessary action to cause such nominee
to be nominated for election as a member of the Supervisory Board and (II) vote,
or cause to be voted, the Shares owned by ▇▇▇▇▇▇ in favor of such nominee. The
provisions of this paragraph will cease to apply when LTBM and the LTBM Trustees
own less than 19,165,307 Shares of the Company. After October 15, 2004, at all
meetings of the Supervisory Board prior to the meeting of shareholders at which
such nominee will be elected, JHM shall use reasonable best efforts to cause the
Supervisory Board to invite such nominee to attend such meetings as an observer.
19
(iii) If the JHM Option has expired unexercised, then
from and after the expiration of the Option Term:
(A) (I) the LTBM Trustees shall be entitled
to designate two individuals as nominees of the Floscule Group, one of whom may
be LTBM, for election as members of the Supervisory Board (the "LTBM FIRST TIER
NOMINEES"), such LTBM First Tier Nominees, if not LTBM, to be reasonably
satisfactory to JHM (it being understood that none of such LTBM First Tier
Nominees may be (1) investment bankers under engagement with or previously under
engagement with LTBM or (2) lawyers who have performed or expect to perform
non-business legal services for LTBM), and (II) at each general meeting of
shareholders of the Company properly called involving the election of members of
the Supervisory Board, JHM and the JHM Trustees agree to: (V) cause the LTBM
First Tier Nominees to be nominated for election as members of the Supervisory
Board, (W) vote or cause to be voted the JHM Company Shares in favor of the LTBM
First Tier Nominees and, if necessary, (X) exercise, together with LTBM and the
LTBM Trustees, their rights under the Shareholders' Agreement (including Section
2.1 thereof) to cause ▇▇▇▇▇▇ to (Y) take any necessary action to cause the LTBM
First Tier Nominees to be nominated for election as members of the Supervisory
Board and (Z) vote, or cause to be voted, the Shares owned by ▇▇▇▇▇▇ in favor of
the LTBM First Tier Nominees. The provisions of this paragraph will cease to
apply when LTBM and the LTBM Trustees own less than 19,165,307 Shares of the
Company.
(B) (I) the LTBM Trustees shall be entitled
to designate one individual as a nominee of the Floscule Group, which may be
LTBM, for election as a member of the Supervisory Board (the "LTBM SECOND TIER
NOMINEE"), such LTBM Second Tier Nominee, if not LTBM, to be reasonably
satisfactory to JHM (it being understood that such LTBM Second Tier Nominee may
not be (1) an investment banker under engagement with or previously under
engagement with LTBM or (2) a lawyer who has performed or expects to perform
non-business legal services for LTBM), and (II) at each general meeting of
shareholders of the Company properly called involving the election of members of
the Supervisory Board, JHM and the JHM Trustees agree to: (V) cause the LTBM
Second Tier Nominee to be nominated for election as a member of the Supervisory
Board, (W) vote or cause to be voted the JHM Company Shares in favor of the LTBM
Second Tier Nominee and, if necessary, (X) exercise, together with LTBM and the
LTBM Trustees, their rights under the Shareholders' Agreement (including Section
2.1 thereof) to cause ▇▇▇▇▇▇ to (Y) take any necessary action to cause the LTBM
Second Tier Nominee to be nominated for election as a member of the Supervisory
Board and (Z) vote, or cause to be voted, the Shares owned by ▇▇▇▇▇▇ in favor of
the LTBM Second Tier Nominee. The provisions of this paragraph shall not be
additive to the provisions of Section 2.05(d)(iii)(A) above, and shall cease to
apply when LTBM and the LTBM Trustees own less than 10,000,000 Shares of the
Company.
(iv) For clarity and avoidance of doubt, the LTBM
Trustees shall not be able to designate more than two nominees to the
Supervisory Board (including observers pending any general meeting involving
election of members of the Supervisory Board), but shall be entitled to replace
the LTBM First Tier Nominees and the LTBM Second Tier Nominee (as
20
applicable) from time to time, provided that (A) such replacement LTBM First
Tier Nominees and LTBM Second Tier Nominee (as applicable), if not LTBM, are
reasonably satisfactory to JHM (it being understood that such LTBM First Tier
Nominees and LTBM Second Tier Nominee (as applicable) may not be (1) an
investment banker under engagement with or previously under engagement with LTBM
or (2) a lawyer who has performed or expects to perform non-business legal
services for LTBM) and (B) no replacement shall be appointed until the
predecessor has resigned and the replacement has been duly elected as a member
of the Supervisory Board.
2.06. DISPOSITION MATTERS.
(a) RESTRICTIONS ON LTBM OPTION SHARES. During the Option
Term, except as permitted under Section 2.07(a) hereof or as otherwise
contemplated by this Agreement, neither LTBM nor the LTBM Trustees will, without
the express written consent of the JHM Trustees, directly or indirectly, offer
for sale, sell, transfer, pledge, encumber, assign or otherwise dispose of, or
enter into any contract, option or other arrangement or understanding with
respect to or consent to the offer for sale, sale, transfer, tender, pledge,
encumbrance, assignment or other disposition of, any or all of the LTBM Option
Shares or any interest therein, including adding any beneficiaries of the LTBM
Trust other than LTBM and/or her children. Notwithstanding the foregoing
restriction, LTBM and the LTBM Trustees may transfer Class A Shares included in
the LTBM Option Shares and the LTBM Released Shares to a second trustee, or to a
special purpose company wholly owned by such trustee (the "LTBM CLASS A
TRUSTEE"), to hold such Class A Shares on trust for the benefit of LTBM and/or
any other person LTBM may designate (the "LTBM CLASS A TRUST"), provided that
the LTBM Class A Trustee executes a counterpart signature page to this Agreement
agreeing to be bound by the terms and conditions of this Agreement applicable to
the LTBM Trustees in respect of any Class A Shares so transferred. In such
event, all references herein to the LTBM Trust shall be deemed to be references
to both the LTBM Trust and the LTBM Class A Trust and all references herein to
the LTBM Trustees shall be deemed to be references to both the LTBM Trustees and
the LTBM Class A Trustee.
(b) PERMITTED SALES OF LTBM RELEASED SHARES; PRICE
PROTECTION.
(i) Beginning on the later of (i) the March Sale
Date and (ii) the date of completion of the Separation Transactions, the LTBM
Trustees may freely sell, transfer, pledge, encumber, assign or otherwise
dispose of the LTBM Released Shares provided such sale, transfer, pledge,
encumbrance, assignment or disposition is undertaken in accordance with
applicable securities law, in accordance with the Company's blackout policy then
in effect, insofar as it applies to LTBM and the LTBM Trustees, and pursuant to
the terms of any applicable unreleased lock-up agreement. For clarity and
avoidance of doubt, Section 2.06(f) and Section 2.06(g) shall not apply to sales
permitted under this clause.
(ii) If (A) the average gross price per share (before
commissions) received pursuant to Section 2.03(e)(iii) or pursuant to clause
(b)(i) above on the sale of the LTBM Released Shares pursuant to such Section
2.03(e)(iii) or clause (b)(i) above is less than
21
EURO 7.80, PLUS an amount per share equal to 6.9% per annum, compounded
annually, calculated based on a 365-day year for the actual number of days
elapsed from November 30, 2002 to the date of completion of each sale (such
shortfall, the "PRICE SHORTFALL"), and (B) the Price Shortfall Protection Shares
shall have been transferred to the Escrow Agent by the JHM Trustees (which, for
clarity and avoidance of doubt, will not have taken place if all of the LTBM
Released Shares are sold on or prior to November 29, 2002 or JHM has declined to
extend the Option Term until May 16, 2005), then the LTBM Trustees may, once all
of the LTBM Released Shares are sold, cause the Escrow Agent to sell, after the
March Sale Date and prior to June 30, 2003, such number of the Price Shortfall
Protection Shares as are necessary to obtain gross proceeds (before commission)
equal to the Price Shortfall, and the proceeds from the sale of such number of
Price Shortfall Protection Shares shall be paid to the LTBM Trustees. All sales
pursuant to this clause (ii) shall be undertaken in accordance with applicable
securities laws, in accordance with the Company's blackout policy then in
effect, insofar as it applies to LTBM and the LTBM Trustees, and pursuant to the
terms of any unreleased applicable lock-up agreement. For clarity and avoidance
of doubt, Section 2.06(f) and Section 2.06(g) shall not apply to sales of Price
Shortfall Protection Shares permitted under this clause. Notwithstanding the
foregoing in this Section 2.06(b)(ii), (A) to the extent that the LTBM
Separation Transactions Reserve has not been paid to Floscule in accordance with
Section 5.06, there shall be deducted from the Price Shortfall paid to the LTBM
Trustees an amount equal to the LTBM Separation Transactions Reserve and such
amount shall be paid to TMF for disbursement pursuant to Section 10.04 and (B)
to the extent that LTBM or the LTBM Trustees have not paid their 48.5% share of
any Disappearing Company Liability due to any creditor pursuant to Section
6A.01(a), there shall be deducted from the Price Shortfall paid to the LTBM
Trustees an amount equal to such 48.5% share of such Disappearing Company
Liability and such amount shall be paid to the creditor thereof.
(iii) Delivery of the Price Shortfall Protection
Shares in accordance with clause (ii) above shall act as a complete and total
accord and satisfaction of any and all responsibility or liability JHM or the
JHM Trustees may have with respect to the Price Shortfall. Neither JHM nor the
JHM Trustees shall have any liability whatsoever if the total proceeds from the
sale of Price Shortfall Protection Shares in accordance with clause (ii) above
is less than the Price Shortfall. Any Price Shortfall Protection Shares not sold
pursuant to clause (ii) above shall be returned or released to the JHM Trustees
promptly after the earliest of (A) the date on which it is determined that there
will be no Price Shortfall, (B) the date on which the Price Shortfall shall have
been met and (C) June 30, 2003.
(c) PERMITTED SALES OF JHM COMPANY SHARES. After the Closing
Date, subject to applicable securities law and the Company's blackout policy
then in effect, the JHM Trustees, subject to the provisions of the JHM Deed of
Trust, may freely sell, transfer, pledge, encumber, assign or otherwise dispose
of up to 3,500,000 of the JHM Company Shares during the Option Term, except
during the Blackout Periods (if applicable). For purposes of this paragraph,
"BLACKOUT PERIODS" means each of the following: (a) the period commencing on the
Closing Date and ending on the earlier of (i) the date when all of the LTBM
Released Shares have been sold (it being understood that off-market sales by JHM
may take place on the same
22
date, in the same transaction, as sales of the LTBM Released Shares) and (ii)
the date when the Price Shortfall Protection Shares are delivered to the Escrow
Agent, and (b) the period commencing on July 15, 2004 and ending on October 15,
2004. Upon exercise of the JHM Option, the Blackout Periods shall cease to
apply. For clarity and avoidance of doubt, Section 2.06(f) and Section 2.06(g)
shall not apply to sales permitted under this paragraph. If the Separation
Transactions have not been completed at the time JHM or the JHM Trustees are
permitted to sell Shares, each of LTBM, the LTBM Trustees, JHM and the JHM
Trustees acknowledge and agree that the Authorizations shall be construed to
include instructions to Floscule or its applicable successor companies to sell
such Shares at the request of JHM or the JHM Trustees and to pay the proceeds
thereof to the JHM Trustees pending completion of the Separation Transactions.
(d) PERMITTED SALES OF LTBM STOCK OPTION SHARES AND SHARES
ACQUIRED AFTER THE CLOSING DATE. After the Closing Date, LTBM and the LTBM
Trustees may freely sell, transfer, pledge, encumber, assign or otherwise
dispose of both (i) the LTBM Stock Option Shares (if outstanding) and (ii) any
Shares acquired by LTBM or the LTBM Trustees after the Closing Date. For clarity
and avoidance of doubt, Section 2.06(f) and Section 2.06(g) shall not apply to
sales permitted under this paragraph.
(e) PERMITTED SALES OF JHM STOCK OPTION SHARES AND SHARES
ACQUIRED AFTER THE CLOSING DATE. After the Closing Date, JHM and the JHM
Trustees may freely sell, transfer, pledge, encumber, assign or otherwise
dispose of both (i) the JHM Stock Option Shares (if outstanding) and (ii) any
Shares acquired by JHM or the JHM Trustees after the Closing Date, including
without limitation, the LTBM Option Shares acquired upon exercise of the JHM
Option. For clarity and avoidance of doubt, Section 2.06(f) and Section 2.06(g)
shall not apply to sales permitted under this paragraph.
(f) RIGHTS OF FIRST REFUSAL ON SALES OF CLASS B SHARES. From
and after the Closing Date and until the end of the Option Term, or, if the JHM
Option has expired unexercised, from and after such expiration date, LTBM, the
LTBM Trustees, JHM and the JHM Trustees may not consummate any sale of Class B
Shares of the Company without giving the other party in writing the right (the
"OFFER"), for a period of 60 days (30 days in the event of any proposed sale of
less than 1,000,000 Class B Shares) from the date of delivery of the Offer, to
(A) purchase from the seller, on terms and conditions no less favorable
(including, without limitation, price) to the seller as contained in the Offer,
all of the Class B Shares of the Company proposed to be sold by the seller or
(B) deliver to the seller that number of Class A Shares of the Company owned by
the non-selling party as is equal to the number of Class B Shares proposed to be
sold by the seller in exchange for the seller delivering an equal number of
Class B Shares of the Company to such non-selling party. To exercise their
rights under (A) or (B) above, the non-selling party shall deliver to the seller
within the 60 or 30 day period contemplated above, written notice of their
intent to exercise their rights under (A) or (B) and specifying the Class B
Shares they intend to purchase under (A) or the number of Class A Shares they
intend to exchange under (B). Such communication, when delivered, shall be
deemed to constitute a valid, binding and enforceable agreement for the sale or
exchange of the Class B Shares specified in
23
such communication. The sale or exchange under (A) or (B) shall take place no
more than ten days after the delivery of such communication by the non-selling
party. If the non-selling party does not exercise its rights under the Offer
within the time period specified, or, in the case of an exchange, exercises its
rights for less than the maximum number of Class B Shares subject to the Offer,
the seller shall thereafter be free to sell the Class B Shares proposed to be
sold that have not been sold or exchanged with the non-selling party. Any sale
hereunder must be upon the terms and conditions no more favorable than those in
the Offer. For purposes of this paragraph, references to "party" shall mean
either (X) JHM or the JHM Trustees, collectively as a group, or (Y) LTBM or the
LTBM Trustees, collectively as a group. The obligation of JHM or the JHM
Trustees to comply with the notice and offer provisions of this paragraph and
the right of LTBM or the LTBM Trustees to purchase or exchange Class B Shares
hereunder shall cease to apply when LTBM and the LTBM Trustees own less than
10,000,000 Shares of the Company. The obligation of LTBM or the LTBM Trustees to
comply with the notice and offer provisions of this paragraph and the right of
JHM or the JHM Trustees to purchase or exchange Class B Shares hereunder shall
cease to apply when JHM and the JHM Trustees own less than 10,000,000 Shares of
the Company. It is understood and agreed that (1) if the JHM Trustees or their
Designee exercise the JHM Option, the provisions of this Section 2.06(f) shall
not apply no matter when the sale of Class B Shares may thereafter occur and (2)
the provisions of this Section 2.06(f) shall not apply to any actual or proposed
sale of Class B Shares by JHM or the JHM Trustees that will be consummated after
the exercise of the JHM Option.
(g) TAG-ALONG RIGHTS. (i) From and after the Closing Date
and until the end of the Option Term, or, if the JHM Option has expired
unexercised, from and after such expiration date, if JHM and the JHM Trustees
wish to sell any Shares (whether Class A Shares or Class B Shares or both) of
the Company then JHM and the JHM Trustees shall, subject to their obligations
under Section 2.06(f) hereof for Class B Shares, notify LTBM and the LTBM
Trustees in writing of the terms and conditions of such sale. LTBM and the LTBM
Trustees shall thereafter have the right to sell to the purchaser, at the same
price per share and on the same terms and conditions as involved in such sale by
JHM and the JHM Trustees, that number of Shares as is equal to the number of
Shares proposed to be sold by JHM or the JHM Trustees multiplied by a fraction,
the numerator of which is the aggregate number of Shares then owned by LTBM and
the LTBM Trustees (calculated on a fully diluted basis) and the denominator of
which is the sum of all Shares of the Company owned by JHM, the JHM Trustees,
LTBM and the LTBM Trustees (calculated on a fully diluted basis). If LTBM or the
LTBM Trustees desire to sell Shares to the purchaser hereunder, they shall
notify JHM and the JHM Trustees of their intention within ten days of receipt of
the terms and conditions of the sale. Thereafter, JHM, the JHM Trustees, LTBM
and the LTBM Trustees shall sell to the purchaser the Shares entitled to be sold
by them hereunder upon the same terms and conditions. In the event that the
purchaser purchases less than the full number of Shares originally proposed to
be sold by JHM or the JHM Trustees, such purchases shall be made from each of
JHM, the JHM Trustees, LTBM and the LTBM Trustees pro rata based upon the
relative amount of Shares that each are entitled to sell pursuant to this
paragraph. The provisions of this paragraph shall cease to apply when LTBM and
the LTBM Trustees own less than 10,000,000 Shares of the Company. It is
understood and agreed that (1) if the JHM Trustees or their Designee exercise
the JHM Option, the provisions of
24
this Section 2.06(g) shall not apply no matter when the sale of Shares may
thereafter occur and (2) the provisions of this Section 2.06(g)(i) shall not
apply to any actual or proposed sale of Shares by JHM or the JHM Trustees that
will be consummated after the exercise of the JHM Option.
(ii) If the JHM Option has expired unexercised, from
and after the expiration of the Option Term, if LTBM and the LTBM Trustees wish
to sell any Shares (whether Class A Shares or Class B Shares or both) of the
Company in a transaction in which Section 3.5(a) of the Shareholders' Agreement
applies, then LTBM and the LTBM Trustees shall, subject to their obligations
under Section 2.06(f) hereof for Class B Shares, notify JHM and the JHM Trustees
in writing of the terms and conditions of such sale. JHM and the JHM Trustees
shall thereafter have the right to sell to the purchaser, at the same price per
share and on the same terms and conditions as involved in such sale by LTBM and
the LTBM Trustees, that number of Shares as is equal to the number of Shares
proposed to be sold by LTBM or the LTBM Trustees multiplied by a fraction, the
numerator of which is the aggregate number of Shares then owned by JHM and the
JHM Trustees (calculated on a fully diluted basis) and the denominator of which
is the sum of all Shares of the Company owned by LTBM, the LTBM Trustees, JHM
and the JHM Trustees (calculated on a fully diluted basis). If JHM or the JHM
Trustees desire to sell Shares to the purchaser hereunder, they shall notify
LTBM and the LTBM Trustees of their intention within ten days of receipt of the
terms and conditions of the sale. Thereafter, LTBM, the LTBM Trustees, JHM and
the JHM Trustees shall sell to the purchaser the Shares entitled to be sold by
them hereunder upon the same terms and conditions. In the event that the
purchaser purchases less than the full number of Shares originally proposed to
be sold by LTBM or the LTBM Trustees, such purchases shall be made from each of
LTBM, the LTBM Trustees, JHM and the JHM Trustees pro rata based upon the
relative amount of Shares that each are entitled to sell pursuant to this
paragraph. The provisions of this paragraph shall cease to apply when JHM and
the JHM Trustees own less than 10,000,000 Shares of the Company.
(h) NOTICE OF SALES. In addition to the requirements of
Section 2.06(f) and Section 2.06(g) hereof, if the JHM Option has expired
unexercised, from and after the expiration of the Option Term: (A) JHM or the
JHM Trustees shall use commercially reasonable efforts to notify LTBM and the
LTBM Trustees at any time prior to the sale or proposed sale by JHM or the JHM
Trustees of more than 100,000 Shares of the Company, and (B) LTBM or the LTBM
Trustees shall use commercially reasonable efforts to notify JHM and the JHM
Trustees at any time prior to the sale or proposed sale by LTBM or the LTBM
Trustees of more than 100,000 Shares of the Company.
(i) ACKNOWLEDGMENT BY LTBM AND THE LTBM TRUSTEES. LTBM and
the LTBM Trustees acknowledge and agree that securities law in the United
States, the Netherlands and other countries prohibit the sale of securities
while in possession of material non-public information. LTBM and the LTBM
Trustees covenant and agree that they will not sell any of their Shares while in
the possession of material non-public information of the Company.
25
(j) NON-DISCLOSURE OBLIGATION OF LTBM AND THE LTBM TRUSTEES.
LTBM and the LTBM Trustees acknowledge and agree that they may acquire
confidential or non-public information concerning the Company as a result of the
exercise of certain of their rights under this Agreement. As a result, LTBM and
the LTBM Trustees agree to keep such information confidential and agree not to,
directly or indirectly, disclose it to any other Person; PROVIDED that LTBM or
the LTBM Trustees may disclose such information to their advisors so long as
such advisors agree to keep such information confidential.
2.07. PERMITTED LOAN ARRANGEMENTS.
(a) BORROWINGS SECURED BY LTBM OPTION SHARES.
Notwithstanding Section 2.06(a) hereof, the LTBM Trustees may (i) pledge the
LTBM Option Shares to secure the borrowing of funds (the "LTBM BORROWED FUNDS")
from a lender (the "LTBM LENDER") that is not an Affiliate of LTBM or the LTBM
Trustees and (ii) distribute the LTBM Borrowed Funds to LTBM provided that the
Loan Agreement entered into with the LTBM Lender that governs the terms and
conditions of the LTBM Borrowed Funds and the terms and conditions of the pledge
of the LTBM Option Shares (the "LTBM LOAN AGREEMENT") contains all of the
following provisions:
(i) a provision requiring the LTBM Lender to provide
notice to JHM and to the JHM Trustees upon the
occurrence of an event of default under the LTBM
Loan Agreement;
(ii) a provision requiring the LTBM Lender to allow
JHM and the JHM Trustees to deliver to the LTBM
Lender within 15 Business Days of receiving the
notice in Section 2.07(a)(i) above, Class A
Shares comprising the JHM Company Shares in
exchange for the LTBM Lender or the LTBM
Trustees, as applicable, delivering to JHM or
the JHM Trustees an equivalent number of Class B
Shares comprising the LTBM Option Shares pledged
to secure the LTBM Borrowed Funds;
(iii) a provision prohibiting the LTBM Lender, any
collateral agent of the LTBM Lender or any other
third party, from taking possession of,
ownership of, or taking title to, or selling or
causing to sell any Class B Shares comprising
the LTBM Option Shares pledged to secure the
LTBM Borrowed Funds without first providing
notice to JHM and to the JHM Trustees and
allowing, within 15 Business Days, JHM and the
JHM Trustees to deliver Class A Shares
comprising the JHM Company Shares to the LTBM
Lender in exchange for the LTBM Lender or the
LTBM Trustees, as applicable, delivering to JHM
or the JHM Trustees an equivalent number of
Class B Shares comprising the LTBM Option Shares
pledged to secure the LTBM Borrowed Funds; and
26
(iv) a provision requiring the LTBM Lender to deliver
any LTBM Option Shares held by it as directed by
JHM and the JHM Trustees in the event that the
JHM Trustees or their Designee exercise the JHM
Option, provided that if required by the LTBM
Lender, the JHM Trustees or their Designee
deliver all or a portion of the exercise price
for the LTBM Option Shares underlying the JHM
Option to the LTBM Lender in order to pay off
the LTBM Borrowed Funds.
(b) BORROWINGS SECURED BY JHM OPTION SHARES. Notwithstanding
anything to the contrary in this Agreement, the JHM Trustees may (i) pledge the
JHM Option Shares to secure the borrowing of funds (the "JHM BORROWED FUNDS")
from a lender (the "JHM LENDER") that is not an Affiliate of JHM or the JHM
Trustees and (ii) distribute the JHM Borrowed Funds to JHM provided that the
Loan Agreement entered into with the JHM Lender that governs the terms and
conditions of the JHM Borrowed Funds and the terms and conditions of the pledge
of the JHM Option Shares (the "JHM LOAN AGREEMENT") contains all of the
following provisions:
(i) a provision requiring the JHM Lenders to provide
notice to LTBM and to the LTBM Trustees upon the
occurrence of an event of default under the JHM
Loan Agreement;
(ii) a provision requiring the JHM Lender to allow
LTBM and the LTBM Trustees to deliver to the JHM
Lender within 15 Business Days of receiving the
notice in Section 2.07(b)(i) above, Class A
Shares comprising the LTBM Company Shares in
exchange for the JHM Lender or the JHM Trustees,
as applicable, delivering to LTBM or the LTBM
Trustees an equivalent number of Class B Shares
comprising the JHM Option Shares pledged to
secure the JHM Borrowed Funds;
(iii) a provision prohibiting the JHM Lender, any
collateral agent of the JHM Lender or any other
third party, from taking possession of,
ownership of, or taking title to, or selling or
causing to sell any Class B Shares comprising
the JHM Option Shares pledged to secure the JHM
Borrowed Funds without first providing notice to
LTBM and to the LTBM Trustees and allowing,
within 15 Business Days, LTBM and the LTBM
Trustees to deliver Class A Shares comprising
the LTBM Company Shares to the JHM Lender in
exchange for the JHM Lender or the JHM Trustees,
as applicable, delivering to the LTBM or the
LTBM Trustees an equivalent number of Class B
Shares comprising the JHM Option Shares pledged
to secure the JHM Borrowed Funds; and
27
(iv) a provision requiring the JHM Lender to deliver
any JHM Option Shares held by it as directed by
LTBM and the LTBM Trustees in the event that
LTBM or the LTBM Trustees or their Designee
exercise the LTBM Option, provided that if
required by the JHM Lender, the LTBM Trustees or
their Designee deliver all or a portion of the
exercise price for the JHM Option Shares
underlying the LTBM Option to the JHM Lender in
order to pay off the JHM Borrowed Funds.
Notwithstanding the foregoing in this Section 2.07(b), nothing herein shall
prohibit or otherwise restrict JHM or the JHM Trustees from borrowing against a
pledge of the JHM Counterpart Shares, and none of the terms and conditions set
forth in clauses (i) - (iv) in this Section 2.07(b) shall apply to any such
borrowing or pledge. If the Separation Transactions have not been completed at
the time JHM or the JHM Trustees desires to borrow pursuant to the immediately
preceding sentence, each of LTBM, the LTBM Trustees, JHM and the JHM Trustees
acknowledge and agree that the Authorizations shall be construed to include
instructions to Floscule to pledge the applicable number of JHM Counterpart
Shares at the request of JHM or the JHM Trustees in connection with such
borrowing pending completion of the Separation Transactions.
2.08. RESERVED.
2.09. WAIVER OF RIGHT OF FIRST REFUSAL UNDER THE SETTLEMENT AGREEMENT.
Effective at the Closing but not at any time prior to the Closing, each of JHM
and LTBM hereby waives his or her right of first refusal (as set forth in
Section 19 of the Settlement Agreement) with respect to the LTBM Company Shares
and the JHM Company Shares, in consideration of the rights of first refusal
contained in Section 2.06(f). LTBM acknowledges that, effective at the Closing,
Section 5.04 releases JHM from any further obligation under such right of first
refusal. JHM acknowledges that, effective at the Closing, Section 6.03 releases
LTBM from any further obligation under such right of first refusal. This Section
2.09 shall not be construed as a waiver of any of the provisions of Section
2.06(f).
2.10. FIRST CONTINGENT ADDITIONAL PAYMENT.
(a) As used in this Section 2.10, the following terms have
the following meanings:
"EXCESS EQUITY VALUE" means, if positive, Per Share Excess Equity Value
multiplied by the number of LTBM Option Shares. Excess Equity Value shall be
payable in the same portion of cash and non-cash as are the Sale Event Proceeds.
To the extent that the non-cash proportion of the Sale Event Proceeds is
composed of securities of companies not listed on a regulated market, the LTBM
Trustees will receive the cash equivalent of that non-cash proportion of the
Sale Event Proceeds as valued under the definition of "Sale Event Proceeds".
28
"PER SHARE EXCESS EQUITY VALUE" means (a) Per Share Sale Event Proceeds
minus (b) EURO 8.00.
"PER SHARE SALE EVENT PROCEEDS" means the Sale Event Proceeds divided
by the number of Shares of the Company sold on the date of consummation of the
Sale Event.
"SALE EVENT" means the sale to a Third Party by JHM, the JHM Trustees
and/or their Affiliates, directly or indirectly, of Shares conferring control of
the Company on such Third Party.
"SALE EVENT PROCEEDS" means the net proceeds, after transaction
expenses, actually received by the controlling shareholders of the Company in
connection with a Sale Event. Any non-cash consideration shall be valued at its
Fair Market Value. The "FAIR MARKET VALUE" of any non-cash consideration shall
be (i) in respect of non-cash consideration consisting of publicly-traded
securities, the average closing price of such securities on the principal
securities exchange on which such securities are traded for the five trading
days preceding the date of consummation of the Sale Event transaction, and (ii)
in respect of other non-cash consideration, Fair Market Value shall be as
reasonably determined by the Supervisory Board of the Company; PROVIDED that if
the LTBM Trustees disagree with the valuation determined by the Supervisory
Board of the Company, the LTBM Trustees may upon notice to the Supervisory Board
of the Company within 10 days of receiving notice of its valuation of the
non-cash consideration retain an internationally recognized investment bank,
public accounting firm or appraisal firm (an "APPRAISER") to value the non-cash
consideration. The Appraiser shall be required to complete its valuation work
within 30 days of the LTBM Trustees' notice to the Supervisory Board of the
Company referred to above. The Appraiser shall independently determine the value
of the non-cash consideration as of a recent date selected by the Appraiser
using valuation methodologies customary in the valuation of such non-cash
consideration. The Appraiser shall be instructed to express its valuation
opinion in the form of a single value that in the opinion of such Appraiser most
closely approximates the value of the non-cash consideration. If the Appraiser
shall fail to express its assessment of the value of the non-cash consideration
as a single value, that Appraiser shall be deemed to have expressed as its
single value the midpoint of the highest and lowest values of all ranges
expressed. The Fair Market Value of the non-cash consideration shall be the
average of the two values arrived at by the Supervisory Board of the Company and
the Appraiser, provided that if the value determined by the Appraiser is more
than 10% greater than the value determined by the Supervisory Board of the
Company, the following procedure shall apply: the Supervisory Board of the
Company and the first Appraiser shall select a second Appraiser. If the
Supervisory Board of the Company and the Appraiser cannot agree on a second
Appraiser within 10 days, the second Appraiser shall be PricewaterhouseCoopers
(Amsterdam) or its successor. The second Appraiser shall independently determine
the value of the non-cash consideration as of the date selected by the first
Appraiser using valuation methodologies customary in the valuation of the
non-cash consideration. The second Appraiser shall then decide which of the two
values arrived at by the Supervisory Board of the Company and the Appraiser is
closer to the value that the second Appraiser would have arrived at
independently, which value shall be the "FAIR MARKET VALUE" of the non-cash
consideration. The value of the non-cash consideration
29
determined by the foregoing procedure shall be final and binding upon both LTBM,
the LTBM Trustees and the Supervisory Board of the Company. The fees and
expenses of the Appraiser selected by the LTBM Trustees shall be paid by them
and the fees and expenses of the second Appraiser, if applicable, shall be paid
by the party whose value was not chosen by the second Appraiser.
(b) At any time on or before July 31, 2003, if the Company's
controlling shareholders enter into a definitive agreement in writing with a
Third Party to effect a Sale Event, then, upon consummation of the Sale Event
pursuant to such definitive agreement (even if such consummation occurs after
July 31, 2003), JHM or the JHM Trustees shall pay or cause to be paid to the
LTBM Trustees an amount equal to the Excess Equity Value payable in accordance
with Section 2.10(c) below. It is expressly understood that, if a definitive
agreement in writing with a Third Party in respect of any Sale Event is not
entered into by July 31, 2003, then this Section 2.10 shall expire and be null
and void and of no force or effect.
(c) Subject to any delay to allow for the determination of
the valuation of the non-cash consideration of securities other than
publicly-traded securities, no later than 30 days after closing of any Sale
Event, JHM or the JHM Trustees will cause to be prepared a calculation of any
amount owed to the LTBM Trustees pursuant to this Section 2.10. JHM or the JHM
Trustees will pay the Excess Equity Value to the LTBM Trustees in a single lump
sum payment within 60 days of the later of (i) the closing of the Sale Event and
(ii) the determination of the value of any non-cash consideration.
(d) LTBM and the LTBM Trustees expressly acknowledge that
the Company and its controlling shareholders have evaluated, and are expected to
continue to evaluate, from time to time, a variety of extraordinary transactions
including, without limitation, mergers and acquisitions (including business
combinations that may involve a change of control of the Company, purchases of
businesses and sales of businesses, irrespective of the form of such purchases
or sales), restructurings, recapitalizations, joint ventures (whether
contractual or involving the formation of one or more new Persons), Going
Private Transactions (whether effected by way of statutory procedure or offer to
shareholders), self-tenders and stock repurchase programs, extraordinary
dividends (including dividends funded with financing), financings (including the
sale of debt, equity, hybrid instruments, bank and other commercial loan
borrowings, irrespective of the amount of capital raised, the price thereof, the
number of securities sold or the use of proceeds thereof) and other
extraordinary transactions involving the debt and equity capital, business and
operations of the Company. LTBM and the LTBM Trustees expressly acknowledge that
the only extraordinary transaction which will constitute a Sale Event is one
which expressly falls within the definition of Sale Event. LTBM and the LTBM
Trustees also acknowledge that, even if such extraordinary transaction falls
within the definition of Sale Event, they will not be entitled to any Excess
Equity Value unless the definitive agreement in writing to effect such Sale
Event is executed and delivered prior to July 31, 2003.
30
2.11. SECOND CONTINGENT ADDITIONAL PAYMENT.
(a) APPLICABILITY. This Section 2.11 shall not be applicable
and shall be null and void if: (a) a payment of the Excess Equity Value is made
or is required to made by JHM or the JHM Trustees to the LTBM Trustees pursuant
to Section 2.10 above or (b) the JHM Trustees or their Designee exercise the JHM
Option on a date that is after the First Anniversary or (c) the JHM Option
expires unexercised.
(b) SCHEDULE OF ADDITIONAL PAYMENTS. In the event that the
JHM Trustees or their Designee exercise the JHM Option on or prior to the First
Anniversary, then the JHM Trustees agree to pay or cause to be paid to the LTBM
Trustees subject to the conditions (including the timing of payment) outlined in
Sections 2.11(c) through 2.11(e) below, one (but only one) of the following
amounts:
(i) the Sale Event Amount (as defined below);
(ii) the Block Trade Amount (as defined below); or
(iii) the Final Amount (as defined below).
(c) CONDITIONS TO AND TIMING OF PAYMENT OF THE SALE EVENT
AMOUNT. From the period commencing on the date that is the nine month
anniversary of the Closing Date and continuing until the date that is the six
year anniversary of the Closing Date (such period, the "SALE EVENT PERIOD"), if
the Company's controlling shareholders enter into a definitive agreement in
writing with a Third Party to effect a Sale Event, then, upon consummation of
the Sale Event pursuant to such definitive agreement (even if such consummation
occurs after the Sale Event Period), JHM or the JHM Trustees shall pay or cause
to be paid to the LTBM Trustees the amount as may be calculated on SCHEDULE 2.11
hereof (it being understood that the amounts set forth on Schedule 2.11 shall
not be additive and only one amount shall be payable based on the Per Share Sale
Event Proceeds, such amount, the "SALE EVENT AMOUNT"). It is expressly
understood that, if a definitive agreement in writing with a Third Party in
respect of any Sale Event is not entered into by the expiration of the Sale
Event Period, then this Section 2.11(c) shall expire and be null and void and of
no force or effect.
No later than 30 days after closing of any Sale Event to which
the foregoing paragraph is applicable, JHM or the JHM Trustees will cause to be
prepared a calculation of the Sale Event Amount as of the date of closing of the
Sale Event. JHM or the JHM Trustees will thereafter pay the Sale Event Amount to
the LTBM Trustees in a single lump sum payment within 60 days of the closing of
the Sale Event.
If during the Sale Event Period a Going Private Transaction
occurs followed by a Sale Event, then the provisions of this Section 2.11(c)
shall apply to such Sale Event.
31
(d) CONDITIONS TO AND TIMING OF PAYMENT OF THE BLOCK TRADE
AMOUNT. During the period commencing on the date that is the day after the six
year anniversary of the Closing Date and ending on the date that is the day
before the ten year anniversary of the Closing Date (such period, the "BLOCK
TRADE PERIOD"), if: (i) the Company's Shares are then still traded on a public
securities exchange or are available for quotation on an inter-dealer quotation
system, (ii) the average per Share closing price of the Company's Shares on any
such securities exchange or inter-dealer quotation system over any thirty day
period during the Block Trade Period is in excess of EURO 12 per Share, net
present value as of the Closing Date (using a 4.9% discount rate) and (iii) LTBM
or the LTBM Trustees deliver written notice to JHM and the JHM Trustees that (i)
and (ii) have been satisfied (all of (i), (ii) and (iii), the "BLOCK TRADE
CONDITIONS"), then JHM or the JHM Trustees shall pay or cause to paid to LTBM or
the LTBM Trustees an amount equal to EURO 14 million (the "BLOCK TRADE AMOUNT").
JHM or the JHM Trustees shall be entitled, upon receipt of the
notice from LTBM or the LTBM Trustees that the Block Trade Conditions have been
satisfied, to enter into a transaction or series of transactions in order to
effect a sale of that number of the JHM Company Shares (the "BLOCK TRADES") as
may be necessary in order to pay to LTBM or the LTBM Trustees the Block Trade
Amount. Within 30 days of the date of the notice given by LTBM or the LTBM
Trustees, JHM or the JHM Trustees shall pay to LTBM or the LTBM Trustees the
Block Trade Amount.
It is understood that if the Block Trade Conditions are not
satisfied during the Block Trade Period, then this Section 2.11(d) shall expire
and be null and void and of no further force or effect. For clarity and
avoidance of doubt, the obligations of JHM and/or the JHM Trustees to pay the
Block Trade Amount shall not be contingent on JHM or the JHM Trustees completing
any Block Trades.
(e) CONDITIONS TO AND TIMING OF PAYMENT OF THE FINAL AMOUNT.
If, on the date that is the tenth anniversary of the Closing Date, JHM or the
JHM Trustees have not paid or been required to pay to the LTBM Trustees either
the Sale Event Amount or the Block Trade Amount, then JHM or the JHM Trustees
shall pay or cause to be paid to the LTBM Trustees an amount equal to EURO 7
million (the "FINAL AMOUNT"). JHM or the JHM Trustees will pay the Final Amount
to the LTBM Trustees in a single lump sum payment on the date that is the tenth
anniversary of the Closing Date.
2.12. PAYMENTS. LTBM and JHM acknowledge that, as of the date hereof,
the Company has claimed that LTBM owes the Company or one or more of its
Affiliates a net amount equal to EURO 277,986.25 (the "UNREIMBURSED AMOUNT") in
respect of amounts paid by the Company on LTBM's behalf. LTBM and JHM also
acknowledge that the Unreimbursed Amount represents the Company's total net
claim as of the date hereof against LTBM in respect of amounts paid or claimed
to have been paid by the Company or any subsidiary on LTBM's behalf. To the
extent that the Company or any subsidiary determines after the Closing that the
Unreimbursed Amount or any part of it remains due and payable, JHM will pay such
amount to the Company or the applicable subsidiary in full satisfaction of the
claim against LTBM.
32
ARTICLE III
REPRESENTATIONS
AND WARRANTIES OF LTBM AND THE LTBM TRUSTEES
LTBM, jointly and severally with the LTBM Trustees, and the LTBM
Trustees, severally but not jointly with LTBM, represent and warrant to each of
JHM and the JHM Trustees that:
3.01. AUTHORIZATION. This Agreement has been duly executed and
delivered by LTBM and constitutes the valid and binding agreement of LTBM. The
execution, delivery and performance by the LTBM Trustees of this Agreement and
the LTBM Deed of Trust and the consummation by the LTBM Trustees of the
Transactions are within the power, authority and capacity of the LTBM Trustees
and have been duly authorized by all necessary action on the part of LTBM and
the LTBM Trustees. This Agreement has been duly executed and delivered by the
LTBM Trustees and constitutes the valid and binding agreement of the LTBM
Trustees. No other proceedings on the part of the LTBM Trustees are necessary to
authorize the execution or performance of this Agreement.
3.02. (a) CORPORATE EXISTENCE AND POWER. Each of the entities
listed in SCHEDULE 3.02 (individually a "HOLDING COMPANY" and collectively, the
"HOLDING COMPANIES") is a corporation duly incorporated, validly existing and in
good standing under the laws of the jurisdiction of its incorporation specified
opposite its name in SCHEDULE 3.02 (to the extent such jurisdiction has a
concept of good standing), and has all corporate powers and all governmental
licenses, material authorizations, material consents and material approvals
required to carry on its business as now conducted. This representation and
warranty is only given to the extent that LTBM and the LTBM Trustees represent
and warrant that they have not taken any intentional action which results in it
being untrue.
(b) TRUST EXISTENCE AND TRUSTEE POWER. The LTBM Trusts are
duly and validly existing under the laws of the Island of Guernsey established
pursuant to the LTBM Deed of Trust. The sole beneficiaries of the LTBM Trust are
LTBM and/or the children of LTBM.
3.03. NON-CONTRAVENTION. The execution, delivery and performance by
LTBM and the LTBM Trustees of this Agreement and the consummation of the
Transactions do not and will not (i) contravene or conflict with the corporate
charter, bylaws, deed of trust, articles of association or other governing
document of any Holding Company or of any of the LTBM Trusts; (ii) result in any
violation or breach of, or constitute (with or without notice or lapse of time,
or both), a default under or give rise to any right of termination, cancellation
or acceleration of any material right or material obligation of LTBM or the LTBM
Trustees or to a loss of any material benefit to which LTBM or the LTBM Trustees
is entitled under any provision of any material agreement, deed of trust,
material contract or other material instrument binding upon LTBM or the LTBM
Trustees; (iii) result in any material violation or material breach of, or
constitute (with or without notice or lapse of time, or both), a material
default under or give rise to any right of
33
termination, cancellation or acceleration of any material right or material
obligation of any Holding Company or to a loss of any material benefit to which
any Holding Company is entitled under any provision of any material agreement,
material contract or other material instrument binding upon any Holding Company;
or (iv) assuming compliance with the matters referred to in Section 3.06,
contravene or conflict with any provision of any law, regulation, judgement,
injunction, order or decree binding upon or applicable to LTBM or the LTBM
Trustees. This representation and warranty is only given to the extent that LTBM
and the LTBM Trustees represent and warrant that they have not taken any
intentional action which results in it being untrue.
3.04. CAPITALIZATION. SCHEDULE 3.02 represents a full and accurate
statement of (i) the designation of each class of capital stock of each Holding
Company, (ii) the number of authorized shares of each class of capital stock of
each Holding Company, (iii) the number of outstanding shares of each class of
capital stock of each Holding Company and (iv) all relevant information
regarding any outstanding convertible securities and any other outstanding
options, warrants or other rights to acquire capital stock of, or other equity
interests in, each Holding Company. All outstanding shares of capital stock of
each Holding Company have been duly authorized and validly issued and are fully
paid and are owned by the persons specified in SCHEDULE 3.02. Except as set
forth in SCHEDULE 3.02, with respect to each Holding Company, there are no
outstanding (i) shares of capital stock, other securities or phantom or other
equity interests of such Holding Company, (ii) securities of such Holding
Company convertible into or exchangeable for shares of capital stock or other
securities of such Holding Company or (iii) options or other rights to acquire
from such Holding Company any capital stock, other securities or phantom or
other equity interests of such Holding Company (the items in clauses (i), (ii)
and (iii), as they relate to each Holding Company, being referred to
collectively as the "HOLDING COMPANY SECURITIES"). There are no outstanding
obligations of any Holding Company, actual or contingent, to issue or deliver or
to repurchase, redeem or otherwise acquire any Holding Company Securities. This
representation and warranty is only given to the extent that LTBM and the LTBM
Trustees represent and warrant that they have not taken any intentional action
which results in it being untrue.
3.05. RESERVED.
3.06. GOVERNMENTAL AUTHORIZATION. Except for (i) filings under Article
46b of the Wet toezicht effectenverkeer 1995, (ii) filings under the Wet melding
zeggenschap in ter beurze genoteerde vennootschappen, (iii) filings with the
Trade Register of Amsterdam in connection with the Separation Transactions, and
(iv) any other filings required in Luxembourg, the Netherlands Antilles, the
British Virgin Islands or the United States with respect to the Transactions, no
material consent, approval, or authorization of, or declaration, filing or
registration with, any governmental or regulatory authority is required to be
made or obtained by LTBM or the LTBM Trustees in connection with the execution,
delivery, and performance of this Agreement or any of the other instruments
referred to herein or the consummation of the Transactions. This representation
and warranty is only given to the extent that LTBM and the
34
LTBM Trustees represent and warrant that they have not taken any intentional
action which results in it being untrue.
3.07. EXPERIENCE AND FINANCIAL SOPHISTICATION. LTBM and the LTBM
Trustees have sufficient knowledge, sophistication and experience in financial
and business matters generally and with respect to the business, financial
condition and operations of the Company specifically so as to be able to value
the Shares and to evaluate the risks and merits of the Transactions. In
connection therewith, LTBM and the LTBM Trustees, have consulted their own
legal, tax and financial advisors and accountants with respect to the
Transactions and, in executing and delivering this Agreement and consummating
the Transactions, are not relying on any representation, warranty or agreement
of any party hereto except as may be specifically set forth herein; PROVIDED
that the parties are relying on the same tax advisors (in all jurisdictions
other than the United Kingdom) for advice regarding the Separation Transactions.
3.08. FINDERS' FEES. LTBM and the LTBM Trustees have received
financial advice from ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ of SP Mergers Ltd. and will pay all fees
and expenses owed to ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and SP Mergers Ltd. Other than the
foregoing, there is no investment banker, broker, finder or other intermediary
which has been retained by or is authorized to act on behalf of LTBM or the LTBM
Trustees who might be entitled to any fee, commission or other amount from the
Company or any other party to this Agreement or its Affiliates.
3.09. TITLE AND VALIDITY OF SHARES. Subject to a right of first
refusal in favor of JHM pursuant to the Settlement Agreement (which is being
waived pursuant to Section 2.09) or, after the Closing, pursuant to this
Agreement and the terms of the LTBM Trust, the LTBM Trustees now have, and on
the Closing Date and immediately prior to the consummation of the Separation
Transactions will have, good and marketable title to and unrestricted power to
vote the LTBM Emmet Shares and to transfer, sell or otherwise dispose of the
LTBM Emmet Shares free and clear of any mortgage, lien, pledge, charge, security
interest, restriction or encumbrance of any kind. Subject to the provisions of
this Agreement and the terms of the LTBM Trust, the LTBM Trustees now have, and
on the Closing Date and on each date through the date of exercise of the JHM
Option, will have, good and marketable title to and unrestricted power to vote
the LTBM Option Shares and to transfer, sell or otherwise dispose of the LTBM
Option Share free and clear of any mortgage, lien, pledge, charge, security
interest, restriction or encumbrance of any kind.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF JHM AND THE JHM TRUSTEES
JHM, jointly and severally with the JHM Trustees, and the JHM Trustees,
severally but not jointly with JHM, represent and warrant to each of LTBM and
the LTBM Trustees that:
4.01. AUTHORIZATION. This Agreement has been duly executed and
delivered by JHM and constitutes the valid and binding agreement of JHM. The
execution, delivery and performance by the JHM Trustees of this Agreement and
the JHM Deed of Trust and the
35
consummation by the JHM Trustees of the Transactions are within the power,
authority and capacity of the JHM Trustees and have been duly authorized by all
necessary action on the part of JHM and the JHM Trustees. This Agreement has
been duly executed and delivered by the JHM Trustees and constitutes the valid
and binding agreement of the JHM Trustees. No other proceedings on the part of
the JHM Trustees are necessary to authorize the execution or performance of this
Agreement.
4.02. (a) CORPORATE EXISTENCE AND POWER. Each of the Holding
Companies is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation specified
opposite its name in SCHEDULE 3.02 (to the extent such jurisdiction has a
concept of good standing), and has all corporate powers and all governmental
licenses, material authorizations, material consents and material approvals
required to carry on its business as now conducted. This representation and
warranty is only given to the extent that JHM and the JHM Trustees represent and
warrant that they have not taken any intentional action which results in it
being untrue.
(b) TRUST EXISTENCE AND TRUSTEE POWER. The JHM Trust is duly
and validly existing under the laws of Bermuda established pursuant to the JHM
Deed of Trust. The sole beneficiaries of the JHM Trust are JHM and/or the
children of JHM.
4.03. GOVERNMENTAL AUTHORIZATION. Except for (i) filings under Article
46b of the Wet toezicht effectenverkeer 1995, (ii) filings under the Wet melding
zeggenschap in ter beurze genoteerde vennootschappen, (iii) filings with the
Trade Register of Amsterdam in connection with the Separation Transactions, and
(iv) any other filings required in Luxembourg, the Netherlands Antilles, the
British Virgin Islands or the United States with respect to the Transactions, no
material consent, approval, or authorization of, or declaration, filing or
registration with, any governmental or regulatory authority is required to be
made or obtained by JHM or the JHM Trustees in connection with the execution,
delivery, and performance of this Agreement or any of the other instruments
referred to herein or the consummation of the Transactions. This representation
and warranty is only given to the extent that JHM and the JHM Trustees represent
and warrant that they have not taken any intentional action which results in it
being untrue.
4.04. NON-CONTRAVENTION. The execution, delivery and performance by
JHM and the JHM Trustees of this Agreement and the consummation of the
Transactions do not and will not (i) contravene or conflict with the corporate
charter, bylaws, deed of trust, articles of association or other governing
document of any Holding Company or of the JHM Trust; (ii) result in any
violation or breach of, or constitute (with or without notice or lapse of time,
or both), a default under or give rise to any right of termination, cancellation
or acceleration of any material right or material obligation of JHM or the JHM
Trustees or to a loss of any material benefit to which JHM or the JHM Trustees
is entitled under any provision of any material agreement, deed of trust,
material contract or other material instrument binding upon JHM or the JHM
Trustees; (iii) result in any material violation or material breach of, or
constitute (with or without notice or lapse of time, or both), a material
default under or give rise to any right of termination,
36
cancellation or acceleration of any material right or material obligation of any
Holding Company or to a loss of any material benefit to which any Holding
Company is entitled under any provision of any material agreement, material
contract or other material instrument binding upon any Holding Company; or (iv)
assuming compliance with the matters referred to in Section 4.04, contravene or
conflict with any provision of any law, regulation, judgement, injunction, order
or decree binding upon or applicable to JHM or the JHM Trustees. This
representation and warranty is only given to the extent that JHM and the JHM
Trustees represent and warrant that they have not taken any intentional action
which results in it being untrue.
4.05. FINDERS' FEES. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of JHM or the JHM Trustees who might be entitled to any fee, commission or other
amount from the Company or any other party to this Agreement or its Affiliates.
4.06. CAPITALIZATION. SCHEDULE 3.02 represents a full and accurate
statement of (i) the designation of each class of capital stock of each Holding
Company, (ii) the number of authorized shares of each class of capital stock of
each Holding Company, (iii) the number of outstanding shares of each class of
capital stock of each Holding Company and (iv) all relevant information
regarding any outstanding convertible securities and any other outstanding
options, warrants or other rights to acquire capital stock of, or other equity
interests in, each Holding Company. All outstanding shares of capital stock of
each Holding Company have been duly authorized and validly issued and are fully
paid and are owned by the persons specified in SCHEDULE 3.02. Except as set
forth in SCHEDULE 3.02, with respect to each Holding Company, there are no
outstanding Holding Company Securities. There are no outstanding obligations of
any Holding Company, actual or contingent, to issue or deliver or to repurchase,
redeem or otherwise acquire any Holding Company Securities. This representation
and warranty is only given to the extent that JHM and the JHM Trustees represent
and warrant that they have not taken any intentional action which results in it
being untrue.
4.07. RESERVED.
4.08. TITLE AND VALIDITY OF SHARES. Subject to a right of first
refusal in favor of LTBM pursuant to the Settlement Agreement (which is being
waived pursuant to Section 2.09) or, after the Closing, pursuant to this
Agreement and the terms of the JHM Trust, the JHM Trustees now have, and on the
Closing Date and immediately prior to the consummation of the Separation
Transactions will have, good and marketable title to and unrestricted power to
vote the JHM Emmet Shares and to transfer, sell or otherwise dispose of the JHM
Emmet Shares free and clear of any mortgage, lien, pledge, charge, security
interest, restriction or encumbrance of any kind. Subject to the provisions of
this Agreement and the terms of the JHM Trust, the JHM Trustees now have, and on
the Closing Date and on each date through the date of exercise of the LTBM
Option, will have, good and marketable title to and unrestricted power to vote
the JHM Option Shares and to transfer, sell or otherwise dispose of the JHM
Option Shares free and clear of any mortgage, lien pledge, charge, security
interest, restriction or encumbrance of any kind.
37
ARTICLE V
COVENANTS OF LTBM AND THE LTBM TRUSTEES
LTBM, jointly and severally with the LTBM Trustees, and the LTBM
Trustees, severally but not jointly with LTBM, covenant and agree with JHM and
the JHM Trustees that:
5.01. BEST EFFORTS; FURTHER ASSURANCES. Subject to the terms and
conditions of this Agreement, LTBM and the LTBM Trustees will use their best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary or desirable under applicable laws and regulations to
consummate the Transactions. Prior to and after the Closing, LTBM and the LTBM
Trustees agree to execute and deliver such other documents, certificates,
agreements and other writings, to execute and deliver all necessary
Authorizations and to take such other actions as may be necessary or desirable,
including without limitation, granting any necessary waivers or consents under
the Shareholders' Agreement or exercising or refraining from exercising, as the
case may be, of any rights or powers they may have under the Shareholders'
Agreement, in order (i) to consummate or implement expeditiously the
Transactions, (ii) to cause the Closing Date to occur on or before October 31,
2002 and (iii) otherwise to give effect to the Transactions (including, whether
before or after the Closing, executing and delivering such documents and taking
such actions as may be necessary or desirable to complete the Separation
Transactions). If the Separation Transactions cannot be completed in accordance
with the terms attached hereto as EXHIBIT A, LTBM and the LTBM Trustees agree
that the irrevocable instructions given pursuant to Section 2.03(a) and the
Authorizations shall be deemed to provide all applicable parties with the
authority to give effect to the Separation Transactions with such modifications
as may be necessary or desirable to achieve the intent of the parties as
expressed herein in as tax efficient a manner for the parties as possible.
5.02. PUBLIC ANNOUNCEMENTS. Except to the extent required by
applicable law or the rules and regulations of any applicable securities
exchange or regulatory body including NASDAQ or the Paris Stock Exchange, LTBM
shall not issue any press release or make any public announcement (including the
filing of any public document) concerning the Transactions or the subject matter
of this Agreement. If such a release or announcement is so required, LTBM shall
consult with JHM on the terms of such release or announcement (including, if
applicable, providing to JHM a copy of any document intended to be publicly
filed).
5.03. NON-COMPETITION. (a) Until the third anniversary of the Closing
Date LTBM agrees that she will not, without the prior written consent of the
Company: (i) whether alone or as a sole proprietor, partner, joint venturer,
officer, director, employee, consultant, trustee, beneficiary, agent,
independent contractor or stockholder of any company or business, engage,
directly or indirectly, in any business activity which competes directly with
the Business carried on at the Closing Date by the Company and its Affiliates
anywhere in the Territory (it being understood that, by virtue of its existing
options to acquire Businesses in the People's Republic
38
of China, the Company shall be deemed to carry on Business on the Closing Date
in such jurisdictions with respect only to the Businesses under option); or (ii)
whether alone or as a sole proprietor, partner, officer, director, consultant,
employee, trustee, beneficiary, joint venturer, agent, representative or
independent contractor, whether for LTBM's own interest or for the interest of
any other person or entity, solicit the employment of, or employ, or hire as a
consultant, partner, officer, director, employee, trustee, agent, representative
or independent contractor, any employee of the Company or any Affiliate of the
Company who is employed by the Company or such Affiliate in the Territory at the
Closing. As used herein, "TERRITORY" means Argentina, Australia, Brazil, Canada,
China, Colombia, France, Germany, Hungary, Italy, Netherlands, Poland, Russia
and Russian Republics, Spain, Sweden, Switzerland, Taiwan and the states of
Indiana, Illinois, Kentucky and Tennessee in the United States.
(b) If any provision contained in this Section shall for any
reason be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Section, but this Section shall be construed as if such invalid, illegal
or unenforceable provision had never been contained herein. It is the intention
of the parties that if any of the restrictions or covenants contained herein is
held to cover a geographic area or to be for a length of time which is not
permitted by applicable law, or in any way construed to be too broad or to any
extent invalid, such provision shall not construed to be null, void and of no
effect, but to the extent such provision would be valid or enforceable under
applicable law, a court of competent jurisdiction shall construe and interpret
or reform this Section to provide for a covenant having the maximum enforceable
geographic area, time period and other provisions (not greater than those
contained herein) as shall be valid and enforceable under such applicable law.
LTBM and the LTBM Trustees acknowledge that the Company would be irreparably
harmed by any breach of this Section and that there would be no adequate remedy
at law or in damages to compensate the Company for any such breach. LTBM and the
LTBM Trustees agree that the Company shall be entitled to injunctive relief
requiring specific performance by LTBM and the LTBM Trustees of this Section,
and LTBM and the LTBM Trustees consent to the entry thereof.
(c) The passive ownership by LTBM and the LTBM Trustees of
less than 5% of (i) the shares of stock of any corporation, or (ii) the
interests in any blind pool, investment fund or other pass-through investment
vehicle managed by a third party without investment-making decisions on the part
of LTBM or the LTBM Trustees shall not be deemed to violate the prohibitions of
this Section 5.03.
(d) The provisions of this Article 5.03 are being entered
into for the benefit of the Company, JHM and the JHM Trustees, and may not be
modified or waived without the prior written consent of the Company and the JHM
Trustees.
5.04. RELEASE. EFFECTIVE AS OF THE CLOSING (BUT NOT AT ANY TIME PRIOR
TO THE CLOSING), LTBM DOES FOR HERSELF, AND HER AFFILIATES, PARTNERS, HEIRS,
SUCCESSORS AND ASSIGNS INCLUDING THE LTBM TRUSTEES (COLLECTIVELY, THE "LTBM
RELEASORS") RELEASE AND ABSOLUTELY
39
FOREVER DISCHARGE JHM, THE JHM TRUSTEES, EMMET, FLOSCULE, THE COMPANY AND THEIR
RESPECTIVE SUBSIDIARIES AND AFFILIATES AND EACH OF THEIR RESPECTIVE OFFICERS,
DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS, REPRESENTATIVES, MANAGEMENT
COMPANIES, PARTNERS, TRUSTEES, HEIRS, PREDECESSORS, SUCCESSORS AND ASSIGNS,
INCLUDING, WITHOUT LIMITATION, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇-▇▇▇▇ JANODET, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ SELLIERE, ▇▇▇▇ TEYSSONNIERE ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
ANTONIUS VAN DER ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇-▇▇▇ VAN OMMEREN, ▇▇▇▇▇
▇. VAN DER SLUIJS-▇▇▇▇▇▇, ▇.▇. RIJNTJES, C. VAN DEN ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ANDRIESSE
AND RUUD WAALS PERSONALLY AND IN THEIR CAPACITY AS OFFICERS, DIRECTORS, MEMBERS
OF THE MANAGEMENT OR SUPERVISORY BOARD OR SHAREHOLDERS (COLLECTIVELY, INCLUDING
ALL SUCH ENTITIES AND INDIVIDUALS, THE "RELEASEES") FROM AND AGAINST ALL
RELEASED MATTERS. "RELEASED MATTERS" MEANS ANY AND ALL AGREEMENTS, CLAIMS,
DEMANDS, DAMAGES, DEBTS, LIABILITIES, OBLIGATIONS, PROMISES, COSTS, EXPENSES
(INCLUDING ATTORNEYS' AND ACCOUNTANTS' FEES AND EXPENSES), ACTIONS AND CAUSES OF
ACTION OF ANY NATURE WHATSOEVER, WHETHER NOW KNOWN OR UNKNOWN, SUSPECTED OR
UNSUSPECTED, ARISING OUT OF OR BASED UPON ANY FACT, MATTER, CAUSE, EVENT OR
CIRCUMSTANCE OCCURRING OR EXISTING ON OR AT ANY TIME PRIOR TO THE CLOSING DATE
RELATING TO OR ARISING OUT OF LTBM's INDIRECT OWNERSHIP OF SHARES OF THE COMPANY
OR LTBM's INVOLVEMENT AS AN OFFICER, DIRECTOR, EMPLOYEE OR MEMBER OF THE
MANAGEMENT BOARD OR SUPERVISORY BOARD OF THE COMPANY OR ANY OF ITS SUBSIDIARIES;
PROVIDED, HOWEVER, THAT RELEASED MATTERS SHALL NOT INCLUDE ANY RIGHTS OR
OBLIGATIONS OF LTBM RELEASORS UNDER (I) THIS AGREEMENT, OR (II) THE SETTLEMENT
AGREEMENT IN RESPECT TO DIVISION OF MARITAL ASSETS (THE "SETTLEMENT AGREEMENT")
DATED AS OF FEBRUARY 26, 2001 BETWEEN JHM AND LTBM, EXCEPT FOR SECTION 19 WITH
RESPECT TO SHARES OF THE COMPANY AND SHARES AND OTHER OWNERSHIP INTERESTS IN
EMMET AND ITS DIRECT AND INDIRECT SUBSIDIARIES (IT BEING UNDERSTOOD THAT (A)
SUCH SECTION 19 IS HEREBY TERMINATED AND NO LONGER OF ANY FORCE OR EFFECT WITH
RESPECT TO SHARES OF THE COMPANY AND TO SHARES AND OTHER OWNERSHIP INTERESTS IN
EMMET AND ITS DIRECT AND INDIRECT SUBSIDIARIES AND (B) SUCH SECTION 19 REMAINS
APPLICABLE TO OTHER PROPERTY WHICH IS NOW OR HAS BEEN JOINTLY OWNED AS SET FORTH
IN SUCH SECTION 19). IT IS THE INTENTION OF THE PARTIES IN EXECUTING THIS
AGREEMENT THAT THE RELEASE CONTAINED IN THIS SECTION SHALL BE EFFECTIVE, AT
CLOSING DATE, AS A FULL AND FINAL ACCORD AND SATISFACTION AND GENERAL RELEASE OF
AND FROM ALL RELEASED MATTERS AND THE FINAL RESOLUTION BY THE PARTIES HERETO OF
ALL RELEASED MATTERS.
40
5.05. CONVERSION OF CLASS B SHARES TO CLASS A SHARES. During the
Option Term, neither LTBM nor the LTBM Trustees will take any action, consent to
any action, agree to undertake any action or do anything that may cause the
Class B Shares comprising the LTBM Option Shares to be converted into Class A
Shares.
5.06. LTBM SEPARATION TRANSACTIONS RESERVE. LTBM shall cause an amount
equal to the LTBM Separation Transactions Reserve to be paid to Floscule on the
earlier of (a) the settlement date for the first sale of LTBM Released Shares
after the Closing and (b) November 29, 2002.
ARTICLE VI
COVENANTS OF JHM AND THE JHM TRUSTEES
JHM, jointly and severally with the JHM Trustees, and the JHM Trustees,
severally and not jointly with JHM, covenant and agree with LTBM and the LTBM
Trustees that:
6.01. BEST EFFORTS; FURTHER ASSURANCES. Subject to the terms and
conditions of this Agreement, JHM and the JHM Trustees will use their best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary or desirable under applicable laws and regulations to
consummate the Transactions. Prior to and after the Closing, JHM and the JHM
Trustees agree to execute and deliver such other documents, certificates,
agreements and other writings, to execute and deliver all necessary
Authorizations and to take such other actions as may be necessary or desirable,
including without limitation, granting any necessary waivers or consents under
the Shareholders' Agreement or exercising or refraining from exercising, as the
case may be, of any rights or powers they may have under the Shareholders'
Agreement, in order (i) to consummate or implement expeditiously the
Transactions, (ii) to cause the Closing Date to occur on or before October 31,
2002 and (iii) otherwise to give effect to the Transactions (including, whether
before or after the Closing, executing and delivering such documents and taking
such actions as may be necessary or desirable to complete the Separation
Transactions). If the Separation Transactions cannot be completed in accordance
with the terms attached hereto as EXHIBIT A, JHM and the JHM Trustees agree that
the irrevocable instructions given pursuant to Section 2.03(a) and the
Authorizations shall be deemed to provide all applicable parties with the
authority to give effect to the Separation Transactions with such modifications
as may be necessary or desirable to achieve the intent of the parties as
expressed herein in as tax efficient a manner for the parties as possible.
6.02. PUBLIC ANNOUNCEMENTS. Except to the extent required by
applicable law or the rules and regulations of any applicable securities
exchange or regulatory body including NASDAQ or the Paris Stock Exchange, JHM
shall not issue any press release or make any public announcement (including the
filing of any public document) concerning the Transactions or the subject matter
of this Agreement. If such a release or announcement is so required, JHM shall
consult with LTBM on the terms of such release or announcement (including, if
applicable, providing to LTBM a copy of any document intended to be publicly
filed). To the extent that the
41
Company is required by applicable law or the rules and regulations of any
applicable securities exchange or regulatory body, including NASDAQ, to issue
any press release or make any public announcement (including the filing of any
public document) concerning the Transactions or the subject matter of this
Agreement, JHM shall use his best efforts to cause the Company to consult with
LTBM on the terms of such release or announcement (including, if applicable,
providing to LTBM a copy of any document intended to be publicly filed). In
addition, JHM agrees not to issue a press release personally, and agrees to use
his best efforts to cause the Company not to issue a press release, without
LTBM's consent that (a) comments on or otherwise characterizes LTBM's reasons
for the Transactions or (b) makes reference to LTBM other than for the purpose
of describing the Transactions in a strictly factual way.
6.03. RELEASE. EFFECTIVE AS OF THE CLOSING (BUT NOT AT ANY TIME PRIOR
TO THE CLOSING), JHM DOES FOR HIMSELF, AND HIS AFFILIATES, PARTNERS, HEIRS,
SUCCESSORS AND ASSIGNS INCLUDING THE JHM TRUSTEES (COLLECTIVELY, THE "JHM
RELEASORS") RELEASE AND ABSOLUTELY FOREVER DISCHARGE LTBM AND HER AFFILIATES,
PARTNERS, HEIRS, SUCCESSORS AND ASSIGNS INCLUDING THE LTBM TRUSTEES
(COLLECTIVELY, THE "LTBM RELEASEES") FROM AND AGAINST ALL JHM RELEASED MATTERS.
"JHM RELEASED MATTERS" MEANS ANY AND ALL AGREEMENTS, CLAIMS, DEMANDS, DAMAGES,
DEBTS, LIABILITIES, OBLIGATIONS, PROMISES, COSTS, EXPENSES (INCLUDING ATTORNEYS'
AND ACCOUNTANTS' FEES AND EXPENSES), ACTIONS AND CAUSES OF ACTION OF ANY NATURE
WHATSOEVER, WHETHER NOW KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, ARISING OUT
OF OR BASED UPON ANY FACT, MATTER, CAUSE, EVENT OR CIRCUMSTANCE OCCURRING OR
EXISTING ON OR AT ANY TIME PRIOR TO THE CLOSING DATE RELATING TO OR ARISING OUT
OF LTBM'S INDIRECT OWNERSHIP OF SHARES OF THE COMPANY OR LTBM's INVOLVEMENT AS
AN OFFICER, DIRECTOR, EMPLOYEE OR MEMBER OF THE MANAGEMENT BOARD OR SUPERVISORY
BOARD OF THE COMPANY OR ANY OF ITS SUBSIDIARIES; PROVIDED, HOWEVER, THAT JHM
RELEASED MATTERS SHALL NOT INCLUDE ANY RIGHTS OR OBLIGATIONS OF JHM RELEASORS
UNDER (I) THIS AGREEMENT OR (II) THE SETTLEMENT AGREEMENT, EXCEPT FOR SECTION 19
WITH RESPECT TO SHARES OF THE COMPANY AND SHARES AND OTHER OWNERSHIP INTERESTS
IN EMMET AND ITS DIRECT AND INDIRECT SUBSIDIARIES (IT BEING UNDERSTOOD THAT (A)
SUCH SECTION 19 IS, BY VIRTUE OF THE ABOVE RELEASE, TERMINATED AND NO LONGER OF
ANY FORCE OR EFFECT WITH RESPECT TO SHARES OF THE COMPANY AND TO SHARES AND
OTHER OWNERSHIP INTERESTS IN EMMET AND ITS DIRECT AND INDIRECT SUBSIDIARIES AND
(B) SUCH SECTION 19 REMAINS APPLICABLE TO OTHER PROPERTY WHICH IS NOW OR HAS
BEEN JOINTLY OWNED AS SET FORTH IN SUCH SECTION 19). IT IS THE INTENTION OF JHM
AND LTBM IN EXECUTING THIS AGREEMENT THAT THE RELEASE CONTAINED IN THIS SECTION
SHALL BE EFFECTIVE, AT CLOSING DATE, AS A FULL AND FINAL ACCORD AND SATISFACTION
AND GENERAL RELEASE OF AND FROM ALL JHM
42
RELEASED MATTERS AND THE FINAL RESOLUTION BY THE PARTIES HERETO OF ALL JHM
RELEASED MATTERS.
6.04. ORDERLY SALE OF LTBM RELEASED SHARES. Subject to the terms and
conditions of this Agreement, applicable securities law, any applicable lock-up
agreement and any applicable Company policy, when reasonably requested by LTBM
or the LTBM Trustees to do so, JHM will, solely in order to effect an orderly
sale of the LTBM Released Shares, use commercially reasonable efforts to cause
members of management of the Company designated by LTBM to (i) assist stock
brokers hired by LTBM or the LTBM Trustees to effect such orderly sale and (ii)
meet with potential buyers of the LTBM Released Shares upon reasonable notice
and at reasonable times.
6.05. ISSUANCE OF LTBM STOCK OPTION SHARES. Subject to the terms and
conditions of this Agreement, applicable securities law and any applicable
Company policy including the Company's blackout policy, when reasonably
requested by LTBM or the LTBM Trustees to do so, JHM will use his best efforts
to cause the Company to issue the LTBM Stock Option Shares upon the exercise of
the LTBM Stock Option by Spark Profit.
6.06. ACCESS TO MANAGEMENT. Subject to the terms and conditions of
this Agreement, applicable securities law and any applicable Company policy
including the Company's blackout policy, LTBM (on behalf of the LTBM Trustees)
shall during the Option Term only, be entitled to require the following once per
fiscal quarter:
(a) a meeting at a mutually convenient time and place
between LTBM (on behalf of the LTBM Trustees) and
operating and financial management of the Company during
the sixth or seventh week after the end of each fiscal
quarter of the Company, PROVIDED THAT: (i) LTBM shall
have provided notice to the Company of her requested
date for such meeting at least fourteen (14) days prior
to the date of such meeting, (ii) LTBM shall have
identified in such notice the members of management of
the Company with whom she would like to meet (including
JHM, if desired) and (iii) such members of management
have not committed to be away on business or vacation on
the proposed meeting date prior to the receipt of the
notice referred to in clause (i);
(b) JHM shall use his best efforts to cause the Company's
operating and financial management to attend such
meeting; and
(c) JHM shall attend the meeting referenced in (a)
personally if requested by LTBM to do so in the notice
referenced in (a) above, but shall otherwise not attend
such meeting.
If LTBM requests non-public information at any such meeting, LTBM shall
sign a confidentiality agreement in customary form. LTBM acknowledges that
securities laws in the
43
United States and other countries prohibit the Company securities while in
possession of material non-public information.
6.07. SHAREHOLDERS' AGREEMENT WITH NEW THIRD PARTY HOLDER;
SHAREHOLDERS' AGREEMENT STILL IN EFFECT. If the JHM Option has expired
unexercised, from and after expiration of the Option Term until LTBM and the
LTBM Trustees own less than 10,000,000 Shares of the Company, if (a) LTBM and
the LTBM Trustees desire to sell all of the remaining Shares of the Company that
they own, directly or indirectly, to a single Third Party buyer (such Third
Party buyer, a "THIRD PARTY TRANSFEREE"), (b) JHM or the JHM Trustees do not
exercise their rights of first refusal under Section 2.06(f) or exercise their
tag-along rights under Section 2.06(g), and (c) the Shareholders' Agreement
remains in full force and effect in substantially the form it was in on the
Closing Date, then JHM and the JHM Trustees will agree to enter into a
shareholders agreement with the Third Party Transferee which shall contain the
following terms and conditions:
(i) the Third Party Transferee will have the rights and
obligations that ▇▇▇▇▇▇ has under Article 4 of the
Shareholders' Agreement; and
(ii) JHM and the JHM Trustees will have the rights that the
Floscule Group has under the Shareholders' Agreement
including all of the rights of the Majority Holder
thereunder (which shall include the right to appoint a
majority of the members of the Supervisory Board).
In addition, if the Third Party Transferee acquires more than 10,000,000
Shares of the Company from LTBM or the LTBM Trustees then JHM agrees to use his
best efforts to cause the Company and ▇▇▇▇▇▇ (by amendment to the Shareholders
Agreement or otherwise) to allow the Third Party Transferee to:
(i) attend quarterly meetings with management of the Company
provided that if the Third Party Transferee requests
non-public information concerning the Company, the Third
Party Transferee must agree to sign a confidentiality
agreement in form and substance reasonably satisfactory
to the Company;
(ii) attend meetings of the Supervisory Board as an observer
with no voting rights, or allow a nominee to attend
meetings of the Supervisory Board as an observer with no
voting rights, provided that the Third Party Transferee
or his or her nominee, signs a confidentiality agreement
in form and substance reasonably satisfactory to the
Company and agrees that the Third Party Transferee, or
his or her nominee, may be excluded from any meeting of
the Supervisory Board if the Supervisory Board believes
after consultation with independent counsel that such
exclusion is necessary to preserve attorney client
privilege or protect sensitive information of the
Company; and
44
(iii) nominate for election one of the two independent members
of the Supervisory Board, provided that the nominee of
the Third Party Transferee satisfies all applicable
legal and regulatory requirements for independence,
including the rules of any stock exchange or quotation
system applicable to the Company.
In addition, if the Third Party Transferee acquires more than 15,000,000
Shares of the Company from LTBM or the LTBM Trustees then JHM agrees to use his
best efforts to cause the Company and ▇▇▇▇▇▇ (by amendment to the Shareholders
Agreement or otherwise) to allow the Third Party Transferee to, in addition to
all of the rights set forth above, to have an additional nominee attend the
meetings of the Supervisory Board as an observer with no voting rights, provided
that the nominee signs a confidentiality agreement in form and substance
reasonably satisfactory to the Company and agrees that the nominee may be
excluded from any meeting of the Supervisory Board if the Supervisory Board
believes after consultation with independent counsel that such exclusion is
necessary to preserve attorney client privilege or protect sensitive information
of the Company.
It is understood and agreed that no Third Party Transferee shall be
entitled, by contract, as a matter of law or otherwise, to any multiple vote
shares of the Company.
6.08. SHAREHOLDERS' AGREEMENT WITH NEW THIRD PARTY HOLDER;
SHAREHOLDERS' AGREEMENT NO LONGER IN EFFECT. If the JHM Option has expired, from
and after expiration of the Option Term until LTBM and the LTBM Trustees own
less than 10,000,000 Shares of the Company, if (a) LTBM and the LTBM Trustees
desire to sell all of the remaining Shares of the Company that they own,
directly or indirectly, to a Third Party Transferee, (b) JHM or the JHM Trustees
do not exercise their rights of first refusal under Section 2.06(f) or exercise
their tag-along rights under Section 2.06(g) and (c) the Shareholders' Agreement
is no longer in effect in substantially the form it was in on the Closing Date,
then JHM and the JHM Trustees will agree to enter into a shareholders agreement
with the Third Party Transferee which shall contain the following terms and
conditions:
(i) the Third Party Transferee will have substantially all
of the rights and obligations that ▇▇▇▇▇▇ has under the
Shareholders' Agreement; and
(ii) JHM and the JHM Trustees will have the rights that the
Floscule Group has under the Shareholders' Agreement
including all of the rights of the Majority Holder
thereunder (which shall include the right to appoint a
majority of the members of the Supervisory Board).
It is understood and agreed that no Third Party Transferee shall be
entitled, by contract, as a matter of law or otherwise, to any multiple vote
shares of the Company.
45
6.09. ROAD SHOW FOR SALE OF LTBM SHARES. Subject to the terms and
conditions of this Agreement, applicable securities law and any applicable
Company policy including the Company's blackout policy, if the JHM Option has
expired unexercised, when reasonably requested by LTBM or the LTBM Trustees to
do so, because it is in the Company's best interests to have any such sale be
conducted in an organized manner, JHM will use his best efforts to cause the
Company to prepare and conduct a roadshow for the purpose of soliciting interest
in connection with any sale by LTBM or the LTBM Trustees of not less than
5,000,000 Shares of the Company.
6.10. LTBM CONSENT TO GOING PRIVATE TRANSACTION; CONSIDERATION
PAYABLE. During the Option Term, if JHM and the JHM Trustees, either alone or
together with ▇▇▇▇▇▇, desire to enter into a Going Private Transaction, then,
prior to the closing of any such Going Private Transaction, JHM and the JHM
Trustees shall be required to obtain the consent of LTBM to such Going Private
Transaction. If LTBM consents and such Going Private Transaction closes during
the Option Term, unless the LTBM Trustees otherwise consent, the LTBM Trustees
shall be entitled to receive the same consideration as may be payable to holders
of Shares that are not Affiliates of JHM, ▇▇▇▇▇▇ or the Company.
6.11. JHM SEPARATION TRANSACTIONS RESERVE. JHM shall cause an amount
equal to the JHM Separation Transactions Reserve to be paid to Floscule on the
date the LTBM Separation Transactions Reserve is paid to Floscule.
ARTICLE VIA
COVENANTS OF ALL PARTIES
6A.01. CERTAIN MATTERS RELATING TO THE SEPARATION TRANSACTIONS.
(a) If after the Closing Date any Disappearing Companies
Liabilities remain unpaid and the creditor thereof demands payment prior to the
Separation Date, LTBM and the LTBM Trustees will promptly pay to the relevant
Disappearing Company an amount equal to 48.5% of such liabilities and JHM and
the JHM Trustees will (i) promptly pay to such Disappearing Company an amount
equal to 48.5% of such liabilities and (ii) procure that ▇▇▇▇ Teyssonniere de
Gramont promptly pays to such Disappearing Company an amount equal to 3% of such
liabilities. If after the Closing Date, any Disappearing Companies Liabilities
remain unpaid and the creditor thereof does not demand payment prior to the
Separation Date, such Disappearing Companies Liabilities will be extinguished to
the extent possible in connection with the Separation Transactions. If,
notwithstanding such extinguishment, any creditor of a Disappearing Company
Liability demands payment after the Separation Date, LTBM or the LTBM Trustee
will promptly pay such creditor 48.5% of such liability and JHM or the JHM
Trustee will (i) promptly pay such creditor 48.5% of such liability and (ii)
procure that ▇▇▇▇ Teyssonniere de Gramont promptly pay such creditor 3% of such
liability. Each party (the "Defaulting Party") agrees to reimburse any other
party (the "Payor") for such Defaulting Party's
46
portion of any Disappearing Companies Liabilities paid by the Payor if (i) the
creditor thereof demanded such payment and (ii) as a matter of applicable law,
the Payor was liable to such creditor notwithstanding this Agreement allocating
Disappearing Companies Liabilities between the Defaulting Party and the Payor.
Notwithstanding the foregoing in this Section 6A.01(a), neither LTBM nor the
LTBM Trustees shall be liable in aggregate in excess of EURO 50,000 for
Disappearing Companies Liabilities representing the fees and expenses of TMF
(and JHM or the JHM Trustees shall be liable for any excess).
Notwithstanding anything herein to the contrary, to the extent
that LTBM or the LTBM Trustees have not paid by January 31, 2003 their 48.5%
share of any Disappearing Company Liability due and payable pursuant to this
Section 6A.01(a), and JHM or the JHM Trustees (together with Mr Teyssonniere)
have paid or caused to be paid their 51.5% share of such liability, then
Floscule shall promptly deposit with the Escrow Agent the number of LTBM
Released Shares (or, if all such shares have been sold, the number of LTBM
Option Shares) which, when valued at EURO 7.80 per share, would be sufficient to
pay such 48.5% share of such Disappearing Company Liability and the applicable
sales commission, and the Escrow Agent shall promptly sell such shares and pay
the net proceeds thereof to the creditor to which such Disappearing Company
Liability is due and payable.
(b) The JHM Trustees and the LTBM Trustees will procure that
Beachcave will in connection with the demerger of Floscule waive the
applicability of Article ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ 1, of the Dutch Civil Code insofar as
the Beachcave Receivables are concerned.
(c) JHM, the JHM Trustees, LTBM and the LTBM Trustees will
procure that none of the Disappearing Companies, or any Affiliate of JHM or
LTBM, brings any action in the Dutch courts relating to the demerger of Floscule
on the basis of Article 3341 of Book 2 of the Dutch Civil Code.
(d) LTBM and the LTBM Trustees on behalf of themselves and
their Affiliates hereby waive applicability of Article 334c, paragraph 2, of
Book 2 of the Dutch Civil Code insofar as the assets of Floscule are concerned
and agree that all of the assets of Floscule other than those specifically
listed in Section 2.01(a)(i) will be allocated to the JHM Trustees and ▇▇▇▇
Teyssonniere de Gramont (or a special purpose company controlled by them) in
such proportions as the JHM Trustees and ▇▇▇▇ Teyssonniere de Gramont shall
agree.
(e) LTBM and the LTBM Trustees will procure that the holder
of the LTBM Beachcave Receivables will not at any time assert any claim against
the company identified as "Floscule I" on Exhibit A on the basis of Article 334t
of Book 2 of the Dutch Civil Code.
(f) LTBM, the LTBM Trustees, JHM and the JHM Trustees
covenant and agree that they will procure such actions, waivers or consents as
may be necessary or desirable in the British Virgin Islands, Luxembourg or the
Netherlands Antilles in order to give effect to the Separation Transactions.
47
6A.02. ESCROW AGREEMENT. On or prior to November 29, 2002, the parties
agree to enter into a mutually satisfactory escrow agreement with ▇▇ ▇▇▇▇▇▇ or
another mutually acceptable escrow agent of comparable stature for the purpose
of depositing the Price Shortfall Protection Shares to be held by the escrow
agent for the purposes described in Section 2.06(b)(ii).
ARTICLE VII
SURVIVAL; INDEMNIFICATION
7.01. SURVIVAL. The covenants and agreements of the parties hereto
contained in this Agreement or in any certificate or other writing delivered
pursuant hereto or in connection herewith shall survive the Closing until the
expiration of the applicable statutory period of limitations, except for Section
5.03, which will survive for three years. The representations and warranties of
the parties contained in this Agreement or in any certificate or other writing
delivered pursuant hereto or in connection herewith shall survive the Closing
until October 31, 2003, provided that the representations and warranties
contained in Sections 3.09 and 3.10 shall survive until the expiration of the
applicable statutory period of limitations. Notwithstanding the preceding
sentence, any covenant, agreement, representation or warranty in respect of
which indemnity may be sought under Section 7.02 shall survive the time at which
it would otherwise terminate pursuant to the preceding sentence, if notice of
the inaccuracy or breach thereof giving rise to such right to indemnity shall
have been given to the party against whom such indemnity may be sought prior to
such time.
7.02. INDEMNIFICATION. (a) LTBM, jointly and severally with the LTBM
Trustees, and the LTBM Trustees, severally but not jointly with LTBM, indemnify
JHM and the JHM Trustees against and agree to hold each of them harmless from
any and all damage, claims, demands, loss, liability and expense (including
without limitation reasonable attorneys' fees and expenses in connection with
any action, suit or proceeding) ("DAMAGES") incurred or suffered by either of
them arising out of any misrepresentation or breach of warranty, covenant or
agreement made or to be performed by LTBM or the LTBM Trustees pursuant to this
Agreement.
(b) JHM, jointly and severally with the JHM Trustees, and
the JHM Trustees, severally but not jointly with JHM, indemnify LTBM and the
LTBM Trustees against and agree to hold each of them harmless from any and all
Damages incurred or suffered by either of them arising out of any
misrepresentation or breach of warranty, covenant or agreement made or to be
performed by JHM or the JHM Trustees pursuant to this Agreement.
(c) The term "DAMAGES" as used in Section 7.02 is not
limited to matters asserted by third parties, but includes Damages incurred or
sustained by a party in the absence of third party claims.
48
(d) Except as set forth below, the maximum amount of Damages
for which any party hereto shall have any liability to the other parties
hereunder shall not exceed EURO 8,000,000 for misrepresentation or breach of any
representation and warranty (except Sections 3.01, 3.09, 4.01 and 4.08). Except
as set forth below, the maximum amount of Damages for which any party hereto
shall have liability to the other parties hereunder shall not exceed the
aggregate fair market value of the LTBM Option Shares or the JHM Option Shares,
as the case may be, on the date of breach for breach of any covenant or
agreement or for misrepresentation or breach of warranty of Sections 3.01, 3.09,
4.01 and 4.08. Notwithstanding the foregoing, the maximum amount of Damages for
which the JHM Trustees shall be liable to LTBM and the LTBM Trustees hereunder
and the maximum amount of Damages for which the LTBM Trustees shall be liable to
JHM and the JHM Trustees hereunder shall in each case be limited to the lesser
of (a) the limits set forth above and (b) the amount of funds or other property
from time to time the subject of the JHM Trust or the LTBM Trust, as applicable.
Accordingly, it is understood and agreed that for Damages incurred hereunder, no
recourse shall be had and no judgment shall be issued, or execution or other
process levied against any other property of either the JHM Trustees or the LTBM
Trustees held in their respective capacity as trustee under trust instruments
for other Persons or held in their respective personal capacity.
(e) The parties agree to first seek equitable remedies
"reele nakoming", including an injunction or specific performance, pursuant to
Section 10.12 for a breach or threatened breach of the provisions of Section
2.02 or Section 2.04, if applicable, before seeking money damages under this
Section 7.02.
7.03. PROCEDURES; EXCLUSIVITY. (a) The party seeking indemnification
under Section 7.02 (the "INDEMNIFIED PARTY") agrees to give prompt notice to the
party against whom indemnity is sought (the "INDEMNIFYING PARTY") of the
assertion of any claim, or the commencement of any suit, action or proceeding in
respect of which indemnity may be sought under such Section. The Indemnifying
Party may, and at the request of the Indemnified Party shall, participate in and
control the defense of any third party suit, action or proceeding at its own
expense. If the Indemnifying Party assumes the defense of any third party suit,
action or proceeding, the Indemnifying Party shall not be liable for any fees or
expenses of separate attorneys for the Indemnified Party from and after the date
of such assumption. The Indemnifying Party shall not be liable under Section
7.02 for any settlement effected without its consent of any claim, litigation or
proceeding in respect of which indemnity may be sought hereunder.
(b) After the Closing, except as provided in Section 5.03
hereof, Section 7.02 will provide the exclusive remedy for any
misrepresentation, breach of warranty, covenant or other agreement or other
claim arising out of this Agreement or the Transactions.
49
ARTICLE VIII
CONDITIONS TO CLOSING
8.01. CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The obligations of
JHM, the JHM Trustees LTBM and the LTBM Trustees to consummate the Closing are
subject to the satisfaction of the condition that no proceeding challenging this
Agreement or the transactions contemplated hereby or seeking to prohibit, alter,
prevent or materially delay the Closing shall have been instituted by any Person
before any court, arbitrator or governmental body, agency or official and be
pending.
8.02. CONDITIONS TO OBLIGATION OF JHM AND THE JHM TRUSTEES. The
obligation of JHM and the JHM Trustees to consummate the Closing is subject to
the satisfaction of the following further conditions:
(a) LTBM and the LTBM Trustees shall have performed in all
material respects all of their obligations hereunder required to be performed on
or prior to the Closing Date; (ii) the representations and warranties of LTBM
and the LTBM Trustees contained in this Agreement shall be true and correct in
all material respects at and as of the Closing Date; and (iii) JHM and the JHM
Trustees shall have received a certificate signed by LTBM and by the LTBM
Trustees to the foregoing effect.
(b) LTBM and the LTBM Trustees shall have provided all
Authorizations and received all consents or approvals from any person from whom
such is required, in each case in form and substance reasonably satisfactory to
JHM and the JHM Trustees and no such Authorization, consent or approval shall
have been revoked.
8.03. CONDITIONS TO OBLIGATION OF LTBM AND THE LTBM TRUSTEES. The
obligation of LTBM and the LTBM Trustees to consummate the Closing are subject
to the satisfaction of the following further conditions:
(a) JHM and the JHM Trustees shall have performed in all
material respects all of its obligations hereunder required to be performed by
it at or prior to the Closing Date, (ii) the representations and warranties of
JHM and the JHM Trustees contained in this Agreement shall be true and correct
in all material respects at and as of the Closing Date and (iii) LTBM and the
LTBM Trustees shall have received a certificate signed by JHM and the JHM
Trustees to the foregoing effect.
(b) JHM and the JHM Trustees shall have provided all
Authorizations and received all consents or approvals from any person from whom
such is required, in each case in form and substance reasonably satisfactory to
LTBM and the LTBM Trustees and no such Authorization, consent or approval shall
have been revoked.
50
(c) LTBM shall have received a letter from a reputable third
party advisor to JHM confirming that the JHM Estate Plan has been put in place.
ARTICLE IX
TERMINATION
9.01. GROUNDS FOR TERMINATION. This Agreement may be terminated at
any time prior to the Closing:
(a) by written agreement of JHM, the JHM Trustees, LTBM and
the LTBM Trustees;
(b) by either JHM and the JHM Trustees or by LTBM and the
LTBM Trustees if the Closing shall not have been consummated on or before
December 31, 2002; or
(c) by either JHM and the JHM Trustees or by LTBM and the
LTBM Trustees if consummation of the transactions contemplated hereby would
violate any nonappealable final order, decree or judgment of any court or
governmental body having competent jurisdiction.
The parties desiring to terminate this Agreement pursuant to clauses (b)
or (c) shall give notice of such termination to the other parties. This
Agreement may not be terminated after the Closing.
9.02. EFFECT OF TERMINATION. If this Agreement is terminated as
permitted by Section 9.01, such termination shall be without liability of any
party (or any shareholder, director, officer, trustee, employee, agent,
consultant or representative of such party) to any other party to this
Agreement; PROVIDED that if such termination shall result from the willful
failure of any party to fulfill a condition to the performance of the
obligations of another party or to perform a covenant of this Agreement or from
a willful breach by any party to this Agreement, such party shall be fully
liable for any and all Damages incurred or suffered by the other parties as a
result of such failure or breach. Upon termination of this Agreement pursuant to
Section 9.01, the provisions of Section 10.04 shall survive any termination
hereof.
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ARTICLE X
MISCELLANEOUS
10.01. NOTICES. All notices, requests and other communications to
either party hereunder shall be in writing (including telecopy or similar
writing) and shall be given,
if to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇:
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇-▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
with a copy to:
Linklaters
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇) ▇▇ ▇▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
if to the ▇▇▇ Trust:
The Trustees of ▇▇▇ Trust
Rothschild Trust Guernsey Ltd.
PO Box 472
St. ▇▇▇▇▇'▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Telecopy: (▇▇) ▇▇ ▇▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
with copies to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇:
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇-▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
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Linklaters
One ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇) ▇▇ ▇▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
if to ▇▇▇▇ ▇. ▇▇▇▇▇▇▇:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇) ▇▇ ▇▇▇ ▇▇▇▇
with a copy to:
▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: F. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
and
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇) ▇▇ ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
if to The JACTMAC Media Trust
Codan Trust Company Limited, Trustee
Richmond House
12 Par La Ville Road
▇▇▇▇▇▇▇▇ ▇▇ CX
Bermuda
Telecopy: (▇▇) ▇ ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
53
with copies to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇
Richmond House
12 Par La Ville Road
▇▇▇▇▇▇▇▇ ▇▇ CX
Bermuda
Telecopy: (▇▇▇) ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: F. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇) ▇▇ ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇) ▇▇ ▇▇▇ ▇▇▇▇
10.02. AMENDMENTS; NO WAIVERS. (a) Any provision of this Agreement may
be amended if, and only if, such amendment is in writing and signed by the
parties hereto.
(b) Any provision of this Agreement may be waived if, and
only if, such waiver is in writing and signed by the party or parties against
whom the waiver is sought to be enforced.
(c) No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
54
10.03. ADJUSTMENTS FOR CHANGES IN CAPITALIZATION. All references to a
number of Shares and per Share prices hereunder, shall be appropriately adjusted
in the event of any change in the outstanding capitalization of the Company
through a merger, consolidation, reorganization, recapitalization, stock
dividend, stock split or other similar transaction.
10.04. EXPENSES. Except as set forth in Section 3 of the Second Binding
Amendment, all costs and expenses (including, but not limited to all financial,
legal and advisory fees) and all applicable taxes or similar levies incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such cost, expense, tax or similar levy, except
that, in connection with the Separation Transactions, the statutory fees, levies
and other charges and the fees and expenses of the non-UK tax and legal advisors
(i.e. tax and legal advisors in the British Virgin Islands, France, Luxembourg,
The Netherlands, The Netherlands Antilles and Switzerland), for which the
parties have agreed to rely upon only one advisor in each jurisdiction, shall be
borne 48.5% by LTBM, 48.5% by JHM and 3% by ▇▇▇▇ Teyssonniere de Gramont, all
such fees, levies, charges and expenses to be paid, first, out of the LTBM
Separation Transactions Reserve and the JHM Separation Transactions Reserve and,
second, by such parties. Any amounts remaining in the LTBM Separation
Transactions Reserve on the Separation Date shall be transferred to the
companies directly or indirectly owned by the LTBM Trustees after the Separation
Transactions are completed, and any amounts remaining in the JHM Separation
Transactions Reserve on the Separation Date shall be transferred to the
companies directly or indirectly owned by the JHM Trustees after the Separation
Transactions are completed. Notwithstanding the foregoing in this section 10.04,
JHM shall pay or cause to be paid the fees and expenses of KPMG Meijburg and of
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ (Amsterdam) in connection with the Separation Transactions from
August 1, 2002 through the Closing Date.
10.05. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; PROVIDED that, except as expressly set forth
in this Agreement, no party may assign, delegate or otherwise transfer any of
its rights or obligations under this Agreement without the written consent of
the other parties hereto.
10.06. GOVERNING LAW, JURISDICTION, ETC.
(a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE NETHERLANDS.
(b) EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY AND ASSETS, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, TO THE EXCLUSIVE JURISDICTION OF THE
COMPETENT COURT IN AMSTERDAM, THE NETHERLANDS IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT
OF ANY JUDGMENT IN RESPECT THEREOF, AND EACH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
55
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. EACH PARTY
HEREBY AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY APPLICABLE LAW. EACH PARTY HEREBY SUBMITS TO THE
EXCLUSIVE PERSONAL JURISDICTION AND VENUE OF SUCH COURT. EACH PARTY AGREES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THAT PROCESS MAY BE SERVED ON
EACH PARTY IN THE SAME MANNER THAT NOTICES MAY BE GIVEN PURSUANT TO SECTION
10.01 HEREOF, EXCEPT THAT PROCESS MAY NOT BE SERVED ON THOSE PARTIES WHO ARE
ONLY TO RECEIVE COPIES PURSUANT TO SECTION 10.01.
(C) EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO
SO, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN THE
COMPETENT COURT IN AMSTERDAM, THE NETHERLANDS. EACH PARTY HEREBY IRREVOCABLY
WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT.
10.07. COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in any
number of counterparts, with the same effect as if the signatures thereto were
upon the same instrument.
10.08. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, understandings and negotiations, both written
and oral, between the parties with respect to the subject matter hereof
including without limitation, the Legally Binding Letter Agreement. No
representation, inducement, promise, understanding, condition or warranty not
set forth herein has been made or relied upon by any party hereto. Neither this
Agreement nor any provision hereof is intended to confer upon any Person other
than the parties hereto any rights or remedies hereunder; PROVIDED that the
Company shall be a third party beneficiary of the provisions of Section 5.03,
the Releasees shall be a third party beneficiary of the provisions of Section
5.04 and the LTBM Releasees shall be a third party beneficiary of the provisions
of Section 6.03.
10.09. CAPTIONS. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
10.10. RESCISSION. Each party hereby waives any and all rights to
claims of rescission (UITSLUITING VAN HET RECHT ONTBINDING TE VORDEREN) with
respect to this Agreement or the Transactions.
56
10.11. OBLIGATIONS. The parties hereto understand and agree that all of
the obligations of JHM herein are obligations undertaken by him as an indirect
shareholder of the Company, and shall in no way be construed as obligations of
JHM in his capacity as an officer of the Company or as a member of the Company's
Management Board. In addition, the parties understand and agree that each of the
LTBM Trustees and the JHM Trustees has entered into this Agreement solely in its
capacity as trustee of the respective trusts of which they are trustees and the
obligations of the trustees hereunder are subject to the provisions of such
trusts. Notwithstanding any other provision of this Agreement or the Legally
Binding Letter Agreement, any and all liabilities of the trustees created by
this Agreement or the Legally Binding Letter Agreement shall be limited to the
extent such liability can be met from and out of the funds or other property
from time to time subject to the trusts of the respective trusts and,
accordingly, the obligations of, and rights against, the Trustees under this
Agreement or the Legally Binding Letter Agreement and any and all liability of
the Trustees that may otherwise arise in connection with this Agreement or the
Legally Binding Letter Agreement and the matters contained in this Agreement or
the Legally Binding Letter Agreement shall be performed, satisfied and paid only
out of, and enforced only against and recourse under this Agreement or the
Legally Binding Letter Agreement shall be had only against, the funds and or
other property from time to time subject to the trusts contained in the
respective trust deeds.
10.12. REMEDIES FOR BREACH: SPECIFIC PERFORMANCE. Each of LTBM, the
LTBM Trustees, JHM and the JHM Trustees understands and agrees that money
damages would not be a sufficient remedy for any breach of this Agreement by any
of them (including without limitation, Section 2.02 and 2.04 hereof) and that
each of them shall be entitled to equitable relief, including injunction and
specific performance, as a remedy for any such breach. Such remedies shall not
be deemed to be the exclusive remedies for a breach of this Agreement but shall
be in addition to all other remedies available at law or equity.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
57
[SIGNATURE PAGE TO
TRANSACTION AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written in four originals.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ TRUST
By: Rothschild Trust Guernsey Limited, Trustee
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Authorized Signatory
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
THE JACTMAC MEDIA TRUST
By: Codan Trust Company Limited, Trustee
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Director
58