EX-2.1 3 dex21.htm SALE AND PURCHASE AGREEMENT OF THE ENTIRE SHARE CAPITAL OF SKYPE LUX HOLDINGS

Clause

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SCHEDULE 1 INFORMATION ABOUT THE GROUP COMPANIES

SCHEDULE 2 CONDITIONS TO COMPLETION

SCHEDULE 3 COMPLETION REQUIREMENTS

SCHEDULE 4 SELLERS’ WARRANTIES

SCHEDULE 5 LIMITATIONS ON THE SELLERS’ LIABILITY

SCHEDULE 6 BUYER’S WARRANTIES

SCHEDULE 7 ACTION PENDING COMPLETION

SCHEDULE 8 LEASEHOLD PROPERTIES

SCHEDULE 9 TAX COVENANT

SCHEDULE 10 BUYER’S PRE-COMPLETION SHAREHOLDERS

SCHEDULE 11 CERTAIN DEFINITIONS

The Sellers shall use all reasonable endeavours to procure that the conditions set out in paragraphs 2, 3, 4, 7, 8, 11 and 12 of Schedule 2 be fulfilled as soon as possible after the date of this Agreement; the Buyer shall use all reasonable endeavours to procure that the conditions set out in paragraphs 9, 10 and 13 of Schedule 2 be fulfilled as soon as possible after the date of this Agreement; and the Buyer and the Sellers shall use all reasonable endeavours to procure that the conditions set out in paragraphs 1, 5 and 6 of Schedule 2 be fulfilled as soon as possible after the date of this Agreement. Without limiting the generality of the foregoing, with respect to the condition set out in paragraph 1 of Schedule 2, where required, the Sellers shall make any necessary filings required to be made by the Sellers with any Governmental Entity, and the Buyer shall procure that the Buyer’s Group Undertakings: (a) make all necessary registrations and filings with Governmental Entities as soon as practicable following the date of this Agreement and take all steps as may be necessary to obtain an approval or waiver from (including by requesting early termination of any applicable waiting period, if available), or to avoid an

action or proceeding by, any Governmental Entity; (b) defend any Legal Proceedings, whether judicial or administrative, challenging this Agreement or the completion of any of the Transactions and seek to have any stay or temporary restraining order issued or entered by any Governmental Entity vacated or reversed; and (c) promptly, if required by any Governmental Entity in order to complete any of the Transactions, take all steps and make all undertakings to secure clearance under applicable antitrust laws (including steps to offer behavioural undertakings and, if such undertakings are considered insufficient by the relevant Governmental Entity, effect the sale or other disposition of particular properties of the Buyer, its Affiliates and/or the Group Companies and to hold separate such properties pending such sale or other disposition). In addition, the Sellers shall procure that the Seller’s Group Undertakings, and the Buyer shall procure that the Buyer’s Group Undertakings: (i) keep the Buyer or the Sellers, as the case may be, informed in all material respects of any material communication received by any Seller’s Group Undertaking (in the case of the Sellers’ obligations under this clause) or by any Buyer’s Group Undertaking (in the case of the Buyer’s obligations under this clause) from, or given by any Seller’s Group Undertaking (in the case of the Sellers’ obligations under this clause) or by any Buyer’s Group Undertaking (in the case of the Buyer’s obligations under this clause) to, any Governmental Entity, in each case regarding any of the Transactions; and (ii) permit the Buyer or the Sellers, as the case may be, to review any material communication delivered to, and consult with the Buyer or the Sellers, as the case may be, in advance of any meeting or conference with, any Governmental Entity relating to the Transactions, and give the Buyer or the Sellers, as the case may be, the opportunity to attend and participate in such meetings and conferences (to the extent permitted by such Governmental Entity).

If: (a) the Sellers terminate this Agreement pursuant to clause 3.5.5 and the Buyer thereby becomes obligated to pay the Termination Fee to the Sellers pursuant to clause 3.7; or (b) the Buyer terminates this Agreement pursuant to clause 3.5.6 and thereby becomes obligated to pay the Termination Fee to the Sellers pursuant to clause 3.7, then, in each case: (i) the Sellers’ right to receive the Termination Fee (as liquidated damages) shall be the Sellers’ sole and exclusive remedy in respect of all matters arising under, or relating to, the Transactions and the Transaction Agreements; and (ii) none of the Sellers or any Sellers’ Group Undertaking shall have any liability or obligation of any kind arising out of or in any way relating to, any Transaction or any Transaction Agreement to the Buyer, any Buyer’s Group Undertaking or any other person and, for the avoidance of doubt,

none of the Buyer, any Buyer’s Group Undertaking or any other person shall be entitled to pursue any other remedy at law or in equity (including those remedies referred to in clause 16.3), and including for tort damages of any kind, against the Sellers or any Seller’s Group Undertaking arising out of, or relating to, the Transactions or any of the Transaction Agreements. Upon payment of the Termination Fee to the Sellers, for the avoidance of doubt, none of the Buyer, any Buyer’s Pre-Completion Shareholder or any Buyer’s Group Undertaking shall have any liability or obligation of any kind arising out of or in any way relating to, any Transaction, any Transaction Agreement, the Financing Letters and/or any transactions contemplated thereby to the Sellers, any Seller’s Group Undertaking or any other person and, for the avoidance of doubt, none of the Sellers, any Seller’s Group Undertaking or any other person shall be entitled to pursue any other remedy at law (including recovery of damages for any Loss that they may have suffered in excess of the amount of the Termination Fee) or in equity (including those remedies referred to in clause 16.3), and including for tort damages of any kind, against the Buyer, any Buyer’s Pre-Completion Shareholder or any Buyer’s Group Undertaking arising out of, or relating to, the Transactions or any of the Transaction Agreements. For the avoidance of doubt, this clause 3.8 shall not apply to, and shall not have the effect of waiving or otherwise limiting a person’s liability or any remedy of the Sellers for, a breach following the termination of this Agreement of such person’s obligations under a Confidentiality Agreement or clause 12.

The Buyer shall provide all reasonable cooperation to the Sellers prior to Completion to procure that the Parent Performance Guarantees are terminated as of Completion, including if requested by the relevant beneficiary of such Parent Performance Guarantee following discussions between such beneficiary and the Buyer, by procuring one or more Group Companies to offer guarantees, support or other security arrangements reasonably acceptable to the relevant beneficiary of such Parent Performance Guarantee (including bank or other third-party guarantees, letters of credit or insurance) or taking such other actions as the Buyer and such beneficiary may mutually agree on. The Buyer shall

procure that no Parent Performance Guarantees (and, so long as any Parent Performance Guarantee remains in effect, no obligations thereunder) are renewed, extended, expanded or amended after Completion. If any Parent Performance Guarantees are not terminated as of Completion (the “Continuing Parent Performance Guarantees”), the Buyer shall: (a) use its best endeavours (which shall not extend to the expenditure of money) to procure that the Continuing Parent Performance Guarantees be terminated as promptly as practicable after Completion; (b) defend, indemnify and hold harmless Parent against and from, and reimburse Parent for, any Losses incurred by Parent to the extent directly or indirectly relating to or arising under the Continuing Parent Performance Guarantees; and (c) procure that such documents, as are reasonably requested by the Sellers, be executed by the Buyer’s Group Undertakings in connection with the obligations set forth in clauses “(a)” and “(b)” of this sentence.

The Buyer undertakes not to incur any liabilities, contingent or otherwise, prior to Completion, other than: (a) under the Transaction Agreements and the Definitive

Financing Documents; and (b) in respect of any other matter necessary for the completion of the Transactions or the operations of the Business immediately following Completion.

the Sellers shall negotiate in good faith with the Buyer’s Pre-Completion Shareholders and the Buyer to reach agreement prior to Completion on the terms

of the Shareholders Agreement, which Shareholders Agreement shall reflect the terms set forth in Annex B;

During the period commencing on the Completion Date and ending on the first anniversary of the Completion Date, neither the Sellers nor any Seller’s Group Undertaking will solicit the employment of any employee of any Group Company who has an annual base salary in excess of €100,000 (a “Restricted Employee”). Notwithstanding the foregoing, it shall not be a breach of this clause 6.2 for any Seller or Seller’s Group Undertaking to: (a) solicit Restricted Employees through general advertisements in newspapers and/or other media of general circulation (including advertisements posted on the Internet), job fairs or other similar general solicitations; (b) engage any recruiting firm or similar organization to identify or solicit persons for employment, or solicit the employment of any Restricted Employee who is identified by any such recruiting firm or organization, as long as such recruiting firm or organization is not instructed to target any Restricted Employee; (c) solicit any Restricted Employee who

initiates discussions regarding employment with any Seller or any Seller’s Group Undertaking, provided that neither the Sellers nor any Seller’s Group Undertaking had solicited such Restricted Employee prior to such initiation of discussions in violation of this clause 6.2; or (d) solicit any Restricted Employee whose employment with any Group Company has terminated prior to the date of such solicitation, provided that neither the Sellers nor any Seller’s Group Undertaking had solicited such Restricted Employee prior to such termination in violation of this clause 6.2.

Subject to the last proviso in clause 7.1, the Buyer shall use its best endeavors to procure that no amendment or modification is made to, and no waiver of any provision is made under or with respect to, the Financing Letters or any Definitive Financing Document, if such amendment, modification or waiver: (a) amends or expands (in a manner adverse to any Seller or the Buyer) the conditions to the Financing in any respect, including any such amendment or expansion that could make such conditions less likely to be satisfied by the Completion Date; (b) could reasonably be expected to prevent the Financing from being obtained or reduce the likelihood that the Financing would be obtained, or delay the date on which the Financing would be obtained; or (c) adversely impacts the ability of any Buyer’s Group Undertaking or any Seller to enforce its rights against other parties to the Financing Letters or any Definitive Financing Document. For purposes of this

Agreement, references to “Financing” shall include the financing contemplated by the Financing Letters and, if applicable, Definitive Financing Documents, and the Substitute Financing, all as permitted to be amended or replaced by this clause 7.2 or clause 7.5 and references to “Financing Letters,” “Debt Commitment Letters” and “Equity Funding Letters” shall include such documents as are permitted to be amended or replaced by clause 7.1, this clause 7.2 or clause 7.5.

The Sellers shall provide (and shall procure the Group Companies to provide and use their best endeavours to procure their respective Representatives to provide) to the Buyer and any Buyer’s Group Undertaking, at the Buyer’s sole expense, cooperation reasonably requested by the Buyer and that is customary in connection with financing comparable to

the Financing, including: (i) furnishing the Buyer and its financing sources as promptly as practicable with available financial and other pertinent available information regarding the Group Companies and other cooperation and assistance as may be reasonably requested in writing by the Buyer; (ii) participating, and using reasonable endeavours to procure that senior management and other Representatives of Parent and the Group Companies participate, in a reasonable number of meetings, presentations, road shows, due diligence sessions, drafting sessions and sessions with prospective lenders, investors and rating agencies in connection with the Financing; (iii) assisting, and using reasonable endeavours to procure that senior management and other Representatives of Parent and the Group Companies assist, with the preparation of materials for rating agency presentations, bank information memoranda and similar documents required in connection with the Financing (including requesting any consents of accountants for use of their reports in any materials relating to the Financing); (iv) facilitating the pledging of collateral in connection with the Financing and using best endeavors to obtain customary legal opinions, other certificates and documents required of the Group Companies and their counsel in connection with the Financing; (v) facilitating the taking of corporate action by the Group Companies (subject to occurrence of Completion) required to permit the completion of the Financing; and (vi) facilitating the execution and delivery (at the time of Completion) of Definitive Financing Documents by the Group Companies and all other customary documents in connection therewith, including pledge and security agreements, guarantees and certificates, as required in connection with the Financing; provided, however that: (a) nothing in this clause 7.6 shall require any cooperation to the extent that it would unreasonably interfere in any material respect with the business or operations of any Seller or any of the Group Companies; and (b) none of the Group Companies shall be required to pay any commitment or other similar fee or incur any other liability or obligation in connection with the Financing prior to Completion. The Buyer shall promptly, upon request by the Sellers, reimburse the Sellers and the Group Companies for all reasonable out of pocket costs and expenses (including reasonable attorneys’ fees approved by the Buyer) incurred by the Sellers or the Group Companies in connection with the cooperation contemplated by this clause 7.6 and shall defend, indemnify and hold harmless the Sellers, the Group Companies and their respective Representatives against and from any and all losses, damages, claims, costs or expenses suffered or incurred by any of them in connection with the arrangement of the Financing and any information used in connection therewith, except with respect to any information provided by the Sellers or any of the Group Companies. All information regarding the Sellers or the Group Companies obtained by the Buyer, any Buyer’s Group Undertaking or any Representative of any Buyer’s Group Undertaking pursuant to this clause 7.6 shall be subject to the terms of Section 12 and the Confidentiality Agreements.

After Completion, the Company shall have exclusive control of the Pursuit (including Settlement) of all Joltid Litigation on behalf of any Group Company, except that: (a) chief litigation counsel to the Company in such Joltid Litigation will be the law firm that was chief litigation counsel to the Sellers and the Company in such Joltid Litigation immediately before Completion, or such other counsel as the Company may appoint with the Sellers’ prior written consent (it being understood that the Sellers shall not unreasonably withhold such consent); (b) the Company will not be permitted to enter into any Settlement of any Joltid Litigation unless: (i) the Sellers consent to such Settlement (it being understood that the Sellers shall not unreasonably withhold such consent); or (ii) both: (A) the Settlement does not impose any monetary or other material obligation or liability on any of the Sellers or any of the other Seller’s Group Undertakings; and (B) the Settlement includes an irrevocable and unconditional full, final and complete release of the Sellers and the other Seller’s Group Undertakings and their customers, distributors, suppliers and vendors with respect to all matters related directly or indirectly to such Joltid Litigation; and (c) the Buyer shall procure that the Company will consult with (and

consider in good faith the views of) Shadow Counsel for the Sellers (if appointed) and internal counsel for the Sellers with respect to material developments in all Joltid Litigation. Notwithstanding the foregoing, the Company shall not be required to consult with Shadow Counsel (or internal counsel) for the Sellers if such consultation could result in the waiver of the attorney-client, work product or any other applicable privilege.

Following the Completion Date, the Buyer shall procure that the Company complies with the terms of Parent’s Retention Bonus Plan for Skype Employees (the “Retention Plan”) and administer the payments to be made thereunder. The Retention Plan shall not be amended in a manner adverse to the Buyer without the Buyer’s prior written consent (which consent may not be unreasonably withheld or delayed). Parent shall promptly reimburse the Company for any payments made by the Company pursuant to and in compliance with the terms of the Retention Plan; provided, however, that Parent’s obligation to reimburse the Company shall be made on an After-Tax Basis. For this

purpose, reimbursement on an After-Tax Basis shall mean that the reimbursement otherwise payable shall be (i) reduced by all reductions in Taxes payable by the Company or any Affiliate thereof as a result of the Company making payments pursuant to the terms of the Retention Plan, (ii) increased by all increases in Taxes payable by the Company or any Affiliate thereof as a result of the Company making payments pursuant to the terms of the Retention Plan, and (iii) increased by any increase in Taxes payable by the Company as a result of the reimbursement by Parent to the Company for payments made by the Company pursuant to this Section 11.3.

“Confidential Information” of a particular person, means any information concerning such person or any subsidiary undertaking of such person that has

been or is furnished (prior to or after the date of this Agreement) by or on behalf of such person, any subsidiary undertaking of such person or any of their respective Representatives to a Recipient or any of such Recipient’s Representatives in connection with the Transactions (or, with regard to Parent only, in connection with Parent’s role as a shareholder of the Buyer), including all notes, analyses, summaries, compilations, studies, derivations, interpretations or other documents (whether in oral or written form, electronically stored or otherwise), whether prepared by such person, such Recipient or any of their respective Representatives, which contain, reflect or are based upon, in whole or in part, the information furnished to such Recipient or its Representatives by or on behalf of such person or any of it Representatives; provided, however, that term “Confidential Information” of a person does not include information that:

Parent may disclose the existence and terms of this Agreement and any other agreements entered into in connection with the Transactions, and may file this Agreement and any

such other agreements, on a Current Report on Form 8-K and in other filings made by Parent with the U.S. Securities and Exchange Commission after the date of this Agreement, provided that the Buyer and its Representatives are afforded a reasonable opportunity to review and comment on any such filings in advance and Parent considers any comments made by the Buyer and its Representatives in good faith.

If Completion occurs, Parent shall procure the assignment to the Buyer of the benefit of all confidentiality agreements and confidentiality undertakings given since October 14, 2005 in favour of any Seller’s Group Undertaking (other than any Group Company) by

any other potential buyer of any Group Company or substantially all of its assets but only to the extent that:

Name of party

Marked for

the attention of

eBay Inc.

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eBay International AG

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The Sellers’

agent for

service of

process

eBay (UK) Limited

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with a copy

(which shall not

constitute

notice) to:

Sidley Austin LLP

Woolgate Exchange

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Springboard Group S.à.▇.▇.

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with a copy

(which shall not

constitute

notice) to:

Silver Lake

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with a copy

(which shall not

constitute

notice) to:

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▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇

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The Buyer’s

agent for

service of

process

Silver Lake Europe LLP ▇▇▇▇▇▇▇▇▇ House

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The Company shall not have entered into a final, binding and complete Settlement of the Pending Joltid Legal Proceeding without the consent of the Buyer; provided that this condition shall be deemed to have been fully satisfied if the Company shall have entered

into such a Settlement and such Settlement imposes no material obligation on the Group Companies other than the obligation to make a lump-sum cash payment.

Between 14 October 2005 and the date of this Agreement, no claim, nor, to the best of the knowledge of the Sellers, no claim styled as an invitation to license, has been made in writing to any Group Company by any third party which remains outstanding and which alleges or threatens that the conduct of the Business or any Owned Intellectual Property infringes, misappropriates or otherwise violates any third party Intellectual Property. As of the date of this Agreement, there is no litigation, opposition, cancellation, proceeding or objection, asserted in writing or, to the knowledge of the Sellers, pending or threatened in writing, against any Group Company concerning the ownership, validity,

registerability, enforceability, infringement or use of, or licensed right to use, any Owned Intellectual Property.

Clause 9.1 of Schedule 1.2 of Schedule A of the Disclosure Letter contains a complete and correct list of each insurance and indemnity policy in effect as of the date of this Agreement which provides coverage with respect to any Group Company or any of their

respective assets, businesses, operations, or, to the extent maintained by Sellers or any Group Company, any employees, officers and directors (together the “Policies”).

None of the Group Companies has assigned or sublet its interest under any Lease. None of the Group Companies has, with respect to any premises leased pursuant to a Lease,

received notice of violation of any material zoning, subdivision or building law applicable thereto from any agency or regulatory body with jurisdiction over such matters.

No Group Company is in material breach of, material violation of or material default under any material agreement that is currently in full force and effect and, to the knowledge of the Sellers, no other party to any such material agreement is in material breach of, material violation of or material default under or require any consent under such agreement. To the knowledge of the Sellers, no event has occurred which would result in a material breach of, material violation of or material default under, or give rise to right of termination, cancellation or acceleration of any right or obligation of any Group Company or to a loss of any material benefit to which any Group Company is

entitled under (in each case with or without notice or lapse of time or both), any material agreement to which such Group Company is a party.

Clause 13.2 of Schedule 1.2 of Schedule A of the Disclosure Letter contains, at the date of this Agreement, a list of each share incentive, share option, profit sharing, redundancy, severance, bonus, incentive, savings, pension, retirement or other material employee benefit plan, policy, program or arrangement sponsored, maintained, contributed to or required to be contributed to by Sellers or any Group Company in which directors, officers, employees or individual independent contractors of any Group Company participate, other than those required by law (the “Plans”). The Plans sponsored by any

Group Company (“Group Company Plans”) are separately identified on the Disclosure Letter. The Sellers have made available as part of the Data Room Information accurate copies of all Plans and any amendments thereto, or, in either case, summaries thereof.

a Tax Claim unless the Buyer has notified the Sellers of the Tax Claim stating in reasonable detail the nature of the Tax Claim and, if reasonably practicable, the amount claimed on or before the 30th day following the expiration of the applicable statute of limitations governing the Tax in respect of which the Tax Claim is being made;

The Buyer has delivered to the Sellers true, correct and complete copies, as of the date of this Agreement, of: (a) executed commitment letters (the “Equity Funding Letters”) from Silver Lake Partners III Cayman (AIV III), L.P., CPP Investment Board Private Holdings Inc., Index Ventures Growth I (Jersey), L.P, Index Ventures Growth I Parallel Entrepreneur Fund (Jersey), L.P., Yucca Partners LP Jersey Branch, and Andreessen ▇▇▇▇▇▇▇▇ Fund I, L.P. (each, an “Equity Provider,” and collectively the “Equity Provider Group”) to provide, subject solely to the terms and conditions therein, equity financing in the aggregate amount set forth therein (being collectively referred to as the “Equity Financing”); and (b) executed commitment letters and redacted forms of fee letters, dated as of the date of this Agreement, from JPMorgan Chase Bank, N.A., Barclays Bank PLC and Royal Bank of Canada (the “Debt Commitment Letters” and, together with the Equity Funding Letters, the “Financing Letters”) to provide, subject solely to the terms and conditions therein, debt financing in an aggregate amount set forth therein (being collectively referred to as the “Debt Financing,” and together with the Equity Financing collectively referred to as the “Financing”). The Financing Letters contain all of the conditions precedent to the obligations of the parties thereunder to make Financing available to the Buyer on the terms therein, and there are no side letters or other agreements, arrangements or understandings, whether written or oral, with any

person relating to the availability of the Financing at Completion, other than as expressly identified in the Financing Letters.

The Buyer is not entering into the Transactions with the intent to hinder, delay or defraud either present or future creditors. Immediately after giving effect to all of the Transactions, including the Financing, and the payment of the aggregate Purchase Price and any other repayment or refinancing of debt that may be contemplated in the Financing Letters, assuming: (a) satisfaction of the conditions to the Buyer’s obligation to complete the Transactions as set forth herein, or the waiver of such conditions; (b) the accuracy of the warranties of the Sellers set forth in Schedule 4; and (c) any estimates, projections or forecasts of the Group Companies have been prepared in good faith based upon reasonable assumptions, and payment of all related fees and expenses, the Company will be Solvent. For purposes of this paragraph 4.5, the term “Solvent” with respect to the Company means that, as of any date of determination: (i) the amount of the fair saleable value of the assets of the Group Companies, taken as a whole, exceeds, as of such date, the sum of: (A) the value of all liabilities of the Group Companies, taken as a whole, including contingent and other liabilities, as of such date, as such quoted terms are

generally determined in accordance with the applicable federal laws governing determinations of the solvency of debtors; and (B) without duplication of liabilities in clause “(A)” of this sentence, the amount that will be required to pay the probable liabilities of the Group Companies, taken as a whole on its existing debts (including contingent liabilities) as such debts become absolute and matured; (ii) the Company will not have, as of such date, an unreasonably small amount of capital for the operation of the business in which it is engaged or proposed to be engaged by the Buyer following such date; and (iii) the Company will be able to pay its liabilities, including contingent and other liabilities, as they mature.

not: (a) establish a new Plan for or in respect of any director, officer, employee or consultant employed or engaged by any Group Company; (b) amend, or exercise a discretion, which materially increases pension scheme liabilities or employer costs in relation to, or discontinue (wholly or partly), any pension scheme applying to any director, officer, employee or individual independent contractor employed or engaged by any Group Company; (c) approve, direct or authorize any material increase or decrease in the compensation, bonus, severance or fringe benefits of any director, officer, employee or individual independent contractor employed or engaged by any Group Company; (d) exercise any discretion to accelerate the vesting or payment of any compensation or benefit under any Plan payable to any director, officer, employee or individual

independent contractor employed or engaged by any Group Company; (e) pay any bonus, or grant any severance or termination pay, to any director, officer, employee or individual independent contractor employed or engaged by any Group Company, except in each case under clauses “(a)” to “(e)” of this paragraph 9: (i) as required by plans or agreements in existence as of the date of this Agreement; (ii) to the extent applicable to Parent’s employees generally provided that the obligations or liabilities of Buyer’s Group Undertakings following the Completion Date under this Agreement are not expanded or increased; or (iii) in the usual course of business consistent with past practice;

with respect to Tax Returns and Other Tax Returns (collectively, “Returns”) filed by or on behalf of any Group Company, and with respect to Taxes payable by or on behalf of any Group Company, in each case during the period commencing upon (and including) the execution of this Agreement and ending on (and including) the Completion Date (the “Interim Period”), the Sellers jointly and severally covenant that they shall, and shall procure that the Seller’s Group Undertakings, save as required by law, prepare and file such Returns, and calculate and pay such Taxes, in accordance with past practice, including, without limitation, past practice as to: (a) positions taken, methods of accounting used, and principles of taxation followed, (b) elections made, (c) the processes and systems used in the preparation of Returns, and the timing and manner for filing Returns, (d) the accounting periods used, (e) the claiming of refunds of Tax, (f) the conduct of administrative or court proceeding relating to Taxes, (g) the carryback or other

utilization of Relief, (h) the time of payment, and (i) all other material practices for the preparation and filing of Returns and the payment of Taxes. For the avoidance of doubt past practice shall not be taken to include late payment other than pursuant to an arrangement with the relevant Tax Authority. During the Interim Period, the Sellers shall not, and shall procure that the Seller’s Group Undertakings shall not, enter into any settlement or compromise of any material dispute in respect of a claim, audit, or assessment by any Tax Authority with respect to such Returns or such Taxes without the prior approval of the Buyer (such approval not to be unreasonably withheld or delayed); and

any Event occurring or which existed at the time of or on or before or after a particular date or time shall include the case where such Event is deemed or

treated for the purposes of any Tax as having occurred or as existing on or before or after that date or time;

any Tax or any amount on account of Tax directly or primarily chargeable on, or in respect of the income, profits, gains or Events of, but not paid by (i) a Seller’s Group Undertaking (other than a Group Company) or (ii) any other company (other than a Group Company) with which a Group Company (in this paragraph 2.2, a “Relevant Group Company”) has at any time on or before Completion been a member of the same group of companies for the purposes of the relevant Tax (in this paragraph 2.2, such Seller’s Group Undertaking and such other company being a “Relevant Seller’s Group Undertaking”) for which such Tax or any amount on account of such Tax the Relevant Group Company is made liable (or would have been made liable but for the use of any Post Completion Relief) as a result of such Relevant Group Company and such Relevant Seller’s Group Undertaking being or having been at any time on or before Completion members of the same group of companies for the purposes of the relevant Tax (including

any such liability under Section 1.502-6 of the US Treasury Regulations (or any similar provision under U.S. state or local law)) PROVIDED THAT this paragraph 2.2 shall not extend to any Tax for which a Group Company is made so liable which arises in respect of any income, profits or gains earned, accrued or received by any Group Company or which arises as a result of any Event of or entered into by any Group Company; and

the matter or any Event giving rise to such Tax Liability or such Tax Liability would not have arisen but for the winding up of, or the cessation of trade or business by, or a change in the nature or conduct of the trade or business of, a Group Company after Completion in each case other than pursuant to a legally

binding agreement entered into by a Group Company on or before Completion and which is legally binding on the relevant Group Company;

Subject to paragraph 4.10, the Buyer shall procure that (i) to the extent that (a) the Sellers could be required to make a payment under this Schedule or any of the Tax Warranties in respect of any Tax Liability that is the subject of the Tax Dispute, or (b) a Relevant Amount as referred to in paragraph 7 could be reduced, the Tax Dispute is not settled or otherwise compromised without the prior written consent of the Sellers (such consent not to be unreasonably withheld or delayed) and (ii) each Group Company and any of its respective advisors shall, so far as it is reasonable to do so, not submit any document or give notice of any matter to a Tax Authority which could (a) give rise to or increase any claim under this Schedule or any of the Tax Warranties, or (b) reduce a Relevant Amount

as referred to in paragraph 7 without first allowing the Sellers’ reasonable opportunity to review such document, and the Buyer shall, or will procure that the relevant Group Company shall, make such reasonable amendments to such document as the Sellers, on a timely basis, may request.

Neither the Buyer nor any Buyer’s Group Undertaking shall be obliged to take action pursuant to this paragraph 4 (i) which would be likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority; or (ii) which involves contesting an Assessment beyond the first appellate body (excluding the Tax Authority which has made the Assessment) in the jurisdiction concerned unless leading counsel specialising in Tax (with at least 10 years’ call) or reasonable equivalent outside the United Kingdom appointed by the Sellers and the Buyer, or failing agreement on such appointment, appointed by the Chair (or equivalent) of the local Bar Association, opines that such a course of action having regard to the merits of the case, the size of the Tax Liability and any other relevant factors is reasonable PROVIDED THAT such course of action shall not for this purpose be

reasonable unless such leading counsel opines that, on the merits, there is a reasonable basis for success.

Sellers, or their duly appointed agents, shall prepare, file and submit all returns and similar statements required to be filed with respect to any Tax (other than an Indemnified Tax) of each Group Company (“Other Tax Returns”) that are required to be filed on or

prior to the Completion Date. Save as otherwise required by law, all such Other Tax Returns shall be prepared, filed and submitted in a manner consistent with past practice and, on such Other Tax Returns, save as otherwise required by law, no position shall be taken, election made or method adopted that is inconsistent with positions taken, elections made or methods used in preparing and filing similar Other Tax Returns in prior periods. Without limiting the foregoing, to the extent reasonably requested by the Buyer, the Sellers shall procure that the Buyer receives for review and comment such Other Tax Returns filed or to be filed after the date hereof and prior to Completion and, with respect to such Other Tax Returns to be filed (and with due regard to applicable filing deadlines) and provided that any such comments are provided by the Buyer to the Sellers on a timely basis, shall take account of the reasonable comments of the Buyer and, save as required by law, shall not take any position, make any election or adopt any method inconsistent with those in preparing and filing similar Other Tax Returns in prior periods without the prior consent of the Buyer (such consent not to be unreasonably withheld or delayed).

The Buyer shall deliver to the Sellers any Straddle Period Return, Straddle Period Documents and documents or correspondence relating thereto (the “Relevant Straddle Period Information”) which are intended to be filed with the relevant Tax Authority before filing with such Tax Authority, and in the case of any Straddle Period Return relating to a corporate income tax, no later than 20 Business Days before the applicable filing date, and in all other cases, on a timely basis (and with due regard to applicable filing deadlines), and the Sellers shall have the right to review any Relevant Straddle Period Information prior to the filing thereof and the Buyer shall make such reasonable changes to such portion of the Relevant Straddle Period Information as is material to the amount of Indemnified Tax payable by any Group Company in respect of that portion of the Straddle Period ending on and including the Completion Date or any other period ending on or before Completion prior to the applicable filing date as the Sellers may request provided that such changes are so requested by the Sellers on a timely basis, and in the case of any Straddle Period Return relating to a corporate income tax, in any event no later than 5 Business Days before the applicable filing date and the Buyer shall not submit any Straddle Period Document which is material to the amount of Indemnified Tax payable by any Group Company in respect of that portion of the Straddle Period

ending on and including the Completion Date or any other period ending on or before Completion without the prior written consent of the Sellers (such consent not to be unreasonably withheld or delayed).

if a Group Company actually receives any amount by way of repayment of any Indemnified Tax (whether by way of a refund or credit of such Indemnified Tax (including any interest thereon)) in respect of or attributable to any period (or part-period) falling on or before Completion (other than any repayment which has been taken into account ((i) as an asset in the Last Balance Sheet or (ii) in computing and so reducing or eliminating any allowance, accrual, reserve or provision for Tax in the Last Balance Sheet and save to the extent that the loss of the right to such repayment (judged at the time of the receipt of such repayment) would not cause such allowance, accrual, reserve or provision to become an underprovision in respect of the Tax Liability the subject of such allowance, accrual, reserve or provision) and such right to or repayment of such Indemnified Tax does not arise from the use of a Post Completion Relief, an amount equal to the amount by way of repayment which such Group Company receives (less any (i) Tax chargeable on such Group Company in respect of such repayment and (ii) reasonable out-of-pocket costs and expenses (including reasonable fees and disbursements of outside legal counsel and other external advisers but other than management costs and expenses) properly incurred by the Buyer or the relevant Group Company in recovering such repayment) shall be a Relevant Amount, provided, however, that to the extent that such Group Company is subsequently found not to be entitled to retain any amount of such repayment, the amount

which such Group Company is found not to be entitled to retain shall not be a Relevant Amount.

to the extent that the excess referred to in paragraph 7.6.2 above is not exhausted under that paragraph, the remainder of that excess shall be carried forward and

set-off against any future payment or payments which become due from the Sellers under this Agreement.

Where the same right to repayment of a Tax gives rise to an entitlement of the Sellers under two or more of paragraph 3.1.8(ii) (as an exclusion to the liability of the Sellers under this Schedule or for breach of any of the Tax Warranties), paragraph 7.5 (by way of set-off or repayment of a Relevant Amount and this paragraph 8 (by way of third party

recovery), the Sellers shall not be entitled to recovery of or credit for the same amount in respect of such right to repayment more than once.

For the purposes of paragraph 3 it shall not be a voluntary act to pay stamp duty where that is necessary to prove title or produce a document in evidence as anticipated by the warranty given in paragraph 12.1 above and it shall not be a delay or default to defer paying stamp duty until such time provided that (i) if a document which is outside the relevant territory is subsequently brought into the relevant territory, the Buyer will pay any stamp duty payable on such document promptly once such document has been brought into the relevant territory, and (ii) if a Buyer’s Group Undertaking discovers that a document to the production of which a Group Company is entitled and which may be necessary for such Group Company in proving title of such Group Company to any asset or to produce in evidence for the purposes of any litigation has not been properly stamped, then the Buyer shall promptly notify the Sellers and allow the Sellers the

opportunity to pay any such stamp duty in order to mitigate any interest and penalties which might arise in relation thereto.

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