UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: March 5, 1999
(Date of earliest event reported)
Commission File Number 1-14373
INSIGNIA FINANCIAL GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 56-2084290
(State of Incorporation) (I.R.S.Employer Identification No.)
375 Park Avenue
New York, New York 10152
(Address of Principal Executive Offices)
(212) 750-6070
(Registrant's telephone number, including area code)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On March 5, 1999, Insignia Financial Group, Inc. (the "Company" or
"Insignia") acquired all of the outstanding share capital of St. Quintin
Holdings Limited ("St. Quintin"), a real estate services firm located in the
United Kingdom, from their existing shareholders. St. Quintin, which has offices
in London, Manchester and Leeds, will be merged with Insignia's existing U.K.
subsidiary, Richard Ellis Group Limited, to form Richard Ellis St. Quintin.
The total purchase price paid for St. Quintin was approximately $32
million. Additional purchase consideration of approximately $12 million is
contingent on the future performance of St. Quintin. The purchase was funded
with borrowings of $24.3 million on the Company's revolving credit facility
(arranged by First Union National Bank and Lehman Brothers and involving a
syndicate of nine national and international financial institutions), the
issuance of approximately 306,000 shares of Common Stock of the Company and
options to purchase approximately 612,000 shares of the Company's Common Stock.
The acquisition will be accounted for as a purchase and substantially comprised
of goodwill.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits - The following are furnished as exhibits to this report:
Exhibit No.
10.1 Agreement for the Sale and Purchase of Shares in the Capital of
St. Quintin Holdings Limited, dated March 5, 1999, by and among
the Vendors listed therein and Insignia Financial Group, Inc.
99.1 Press Release dated March 5, 1999.
The financial statements of St. Quintin and pro forma information required
to be filed as exhibits to this report are not included and will be filed as
soon as practicable but no later than May 19, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to the signed on its behalf by the
undersigned hereunto duly authorized.
INSIGNIA FINANCIAL GROUP, INC.
By: /s/ Adam B. Gilbert
-----------------------------
Adam B. Gilbert
Executive Vice President
Date: March 18, 1999
<PAGE>
For Immediate Release Contact: Steve Iaco
212-984-6535
- - -------------------------------------------------------------------------------
INSIGNIA FINANCIAL GROUP ACQUIRES
U.K. REAL ESTATE SERVICES FIRM ST. QUINTIN
Insignia Merges St. Quintin with Richard Ellis Group Limited,
Creating One of the United Kingdom's Top Three Real Estate Firms
NEW YORK, March 5, 1999 - Insignia Financial Group, Inc. (NYSE: IFS) announced
today that it has acquired British real estate services firm St. Quintin and
merged the company with Insignia's existing U.K. subsidiary, Richard Ellis Group
Limited, to form Richard Ellis St. Quintin.
The acquisition is valued at approximately $32 million, excluding a
potential earnout of up to an additional $12 million over three years. The full
value of the earnout will be based on the ability of the merged operation to
achieve certain performance levels both through cost reductions and
cross-selling initiatives with other Insignia business units.
The merger is expected to produce various economies of scale for Richard
Ellis St. Quintin. Once the two businesses have been integrated and combined
into common offices, which is expected to occur around July 1, Insignia expects
the transaction to be accretive to Net EBITDA per share on an annual basis by
approximately $0.27; accretive to after-tax cash flow per share by approximately
$0.21; and accretive to net income per share by approximately $0.03. As part of
the consolidation, Insignia will report a one-time expense of approximately $6
million in the first quarter, primarily for relocation costs and disposing of
excess office space. This expense is not included in the annual Net EBITDA
projections discussed above.
Richard Ellis St. Quintin becomes one of the three largest real estate
services firms in the United Kingdom, with more than 800 employees and annual
revenues of approximately $100 million. The addition of St. Quintin enhances
Richard Ellis Group's market share in the Central London markets and
significantly expands its capabilities in property management, valuation and
planning services. It also enhances Richard Ellis Group's regional presence in
Manchester and Leeds, and complements the firm's existing strong positions in
Glasgow, Birmingham, Liverpool and Belfast.
"The combination of St. Quintin and Richard Ellis Group Limited creates one
of the largest, most influential property services firms in the United Kingdom
and ensures Insignia's ability to offer superior leasing, sales and financial
services to our international corporate and institutional clients in the United
Kingdom and elsewhere in Europe," said Andrew L. Farkas, chairman and chief
executive officer of Insignia Financial Group. "Through this merger, Insignia's
creation of a commanding market presence in the United Kingdom mirrors our
pre-eminent positions in major U.S. markets, including New York, Washington,
D.C. and Chicago. Richard Ellis St. Quintin will act as the springboard for
Insignia's planned expansion both within the United Kingdom and continental
Europe, building on our existing operations in Germany and Italy."
Added Alan Froggatt, chief executive of Richard Ellis St. Quintin: "With
the substantial resources available to us as part of Insignia and our agreed
strategy to become a pre-eminent global real estate advisor, this expansion of
our U.K. operations allows us to provide an enhanced range and standard of
service for our clients. Just as important, it provides Insignia with the
resources to build a pan-European business, which is the next step in our
strategy."
Said Robert Evans, chairman of the former St. Quintin and now deputy
chairman of Richard Ellis St. Quintin: "In an increasingly global market, the
chance to become part of an international business of this scale and ambition
was an opportunity not to be missed. Working with our new colleagues at Richard
Ellis Group Limited and Insignia during the due-diligence process has only
affirmed our belief that the two companies dovetail perfectly, leaving us in an
excellent position to challenge for market leadership in the future."
St. Quintin is the latest in a number of leading commercial real estate
services firms that Insignia has acquired over the past several years, giving
the company significant market share in global business centers such as New
York, London, Boston, Washington, D.C. and Chicago. In the United States, the
company's commercial services unit, Insignia/ESG, has the pre-eminent position
in the New York marketplace and operates in 48 other markets nationwide. In
Europe, Insignia also has operations in Germany and Italy.
Insignia plans aggressive expansion in other tier-one global markets to
enhance its worldwide real estate services capabilities. Such global
representation also will extend Insignia's reach to source potential investment
opportunities for its institutional clients, such as the Praedium Group.
Insignia was retained by Praedium, an affiliate of Credit Suisse First Boston,
in September 1998 to source more than $500 million worth of real estate
investments throughout western Europe.
Insignia also plans to execute in Europe its U.S. strategy of taking
minority equity positions in investment properties purchased by its key
institutional-investor clients. This strategy has enabled Insignia to obtain
contracts to provide services for these properties and to participate in their
long-term appreciation potential. Insignia currently has co-investments in U.S.
properties totaling more than 6 million square feet of commercial real estate
and 3,300 multifamily units.
"By virtue of Richard Ellis St. Quintin's formidable position in the key
financial market of London, Insignia has strengthened its ability to source
European investments either for or together with our institutional clients,"
said Mr. Farkas. "Richard Ellis St. Quintin's strong recognition by the European
investment community also will serve Insignia well in developing and
implementing an international delivery system for real estate-related financial
services."
Insignia has made a concerted effort to build its European operations over
the past year and a half. In February 1998, Insignia acquired 225-year-old
Richard Ellis Group Limited, one of the United Kingdom's leading property
services firms. Later that year, Insignia acquired hotel brokerage firm Hotel
Partners Inc., which in addition to its U.S. operations is active in
international markets. Also in 1998, the company formed a German real estate
services operation, Insignia RE GmbH. Insignia also maintains a commercial
property management operation in Italy. Insignia Financial Group, Inc., based in
New York, is among the leading providers of commercial and residential real
estate services in the United States, with a growing presence in Europe. Its
major operating units are: Insignia/ESG, Inc., one of the largest providers of
commercial real estate services in the United States and the pre-eminent
commercial real estate service provider in the New York metropolitan area;
Richard Ellis St. Quintin, a leading real estate services firm in the United
Kingdom; Realty One, the ninth-largest residential real estate brokerage firm in
the United States; and Insignia Residential Group, the largest manager of
cooperative and condominium housing in the New York metropolitan area.
Certain items discussed in this press release may constitute
forward-looking statements within the meaning of the Private Litigation Reform
Act of 1995 (the "Reform Act) and as such may involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance,
or achievements of the Company to be materially different from any future
results, performance, or achievements expressed or implied by such
forward-looking statements, including a change in the climate for acquisitions
the Company has been making, the ability to recognize expense reductions and
increased cash flow and net income, or downturn in the projected business of
recently acquired operations (including Richard Ellis Group Limited and St.
Quintin). Such forward-looking statements speak only as of the date of this
press release. The Company expressly disclaims any obligation or undertaking to
release publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in the Company's expectations with regard
thereto or any change in events, conditions or circumstances on which any such
statement is based.
DATED MARCH 5, 1999
(1) THE VENDORS as herein defined
(2) INSIGNIA FINANCIAL GROUP, INC.
AGREEMENT
for sale and purchase of shares
in the capital of
St. Quintin Holdings Limited
GPE(807.3)/758725 04.03.99
CONTENTS
PARTIES
RECITALS
OPERATIVE PROVISIONS
1. Interpretation
2. Agreement to Sell and Purchase
3. Consideration
4. Completion
5. Your Watch Indemnity
6. Warranties
7. Limitations on Liability
8. Earn-Out Protections
9. Partners= Guarantees Indemnity
10. Purchaser=s Warranties
11. Set Off
12. Covenants to protect Goodwill
13. Disposal of Consideration Shares, Loan Notes and Earn-Out Loan Notes
14. Tax Affairs
15. Pensions
16. Book Debts
17. Enforceability and Severability
18. Further Assurance
19. Survival of Agreement
20. Costs
21. Successors and Assigns
22. Announcements
23. Vendors' Representative
24. Notices
25. General
SCHEDULES
1. Particulars of Vendors
2. The Company
3. The Subsidiaries
4. The Properties
5. Calculation of Net Current Assets
6. Calculation of Enlarged Group Modified Pre-Tax Profit
and Earn-Out Base Profit
7. Escrow Arrangements
8. Tax Deed
9. Warranties
<PAGE>
AGREED FORM/ANCILLARY DOCUMENTS
Accounts
Disclosure Letter
Earn-Out Loan Note Instrument
Loan Note Instrument
Confirmation of No Claim
Confirmation of Insurance
Computer Schedule
Directors/Secretary Resignations
Completion Bank Statements/Mandate Letters
Completion Board Minutes
Service Agreements
Escrow Mandate
Option Schedule
GPE(807.3)/758725 04.03.99
AGREEMENT
DATED MARCH 5, 1999
PARTIES
(1) "the Vendors" THE PERSONS whose respective names and addresses are set out
in Schedule 1
(2) "the Purchaser" INSIGNIA FINANCIAL GROUP, INC. incorporated in the state of
Delaware, USA, whose principal office is at 200 Park Avenue, New York, NY
10166, USA~
RECITALS
(A) St. Quintin Holdings Limited ("the Company") is a private company limited
by shares incorporated in England brief particulars of which are set out in
Schedule 2.
(B) The Vendors are between them able to sell to the Purchaser the entire
issued share capital of the Company and the Purchaser is willing to
purchase such shares subject to and on the terms and conditions of this
Agreement.
OPERATIVE PROVISIONS
1. Interpretation
1.1 In this Agreement and the Schedules hereto the following words and
expressions shall where the context so admits bear the following meanings:-
"the Accounts" the Partnership Accounts, the audited consolidated accounts
of St Quintin (Management Services) Limited and the individual audited
accounts of each of the Included Subsidiaries for the financial year
ended on the Accounts Date and the notes thereto and directors' and
auditors' reports thereon
"the Accounts Date" 31 August 1998
"the A Shares" the existing A ordinary shares of 1 penny each in the
Company held by the Vendors in the proportions set out in Schedule 1
"the B Shares" the existing B ordinary shares of 1 penny each in the
Company held by the Vendors in the proportions set out in Schedule 1
"Book Debts" shall have the meaning ascribed thereto in clause 16.1
"business day" a day (not being a Saturday or Sunday) on which banks
generally are open for business in London
"Completion" completion of this Agreement as provided in clause 4 below
"Completion Accounts" consolidated statement of Net Current Assets prepared
in accordance with Schedule 5
"Completion Consideration" that part of the Consideration to be satisfied
on Completion as provided in clause 3.1(A)
"Completion Date" the date hereof or such other date as shall be agreed
between the parties for Completion
"the Consideration" the consideration payable for the Shares pursuant to
the terms of this Agreement
"Consideration Shares" the common stock of, par value $0.01 per share of
the Purchaser to be allotted to the Vendors on Completion in part
satisfaction of the Completion Consideration as provided herein
"the C Shares" the existing C ordinary shares of 1 penny each in the
Company held by the Vendors in the proportions set out in Schedule 1
"the Disclosure Letter" the letter of even date from the Vendors=
Representative to the Purchaser disclosing exceptions to the
Warranties
"Earn-Out Base Profit" shall have the meaning ascribed to such expression
in Schedule 6
"Earn-Out Consideration" that part of the Consideration to be satisfied
following Completion as provided in clause 3.1(B)
"Earn-Out Consideration Shares the common stock of par value $0.01 per
share of the Purchaser to be issued to the Vendors in part
satisfaction of the Earn-Out Consideration
"Earn-Out Loan Notes" up to ,7,500,000 3% Guaranteed Unsecured Loan Notes
of the Purchaser to be constituted by the Earn-Out Loan Note
Instrument and to be issued to the Vendors in satisfaction or part
satisfaction of the Earn-Out Consideration as provided herein
"Earn-Out Loan Note Instrument" the instrument in the Agreed Form
constituting the Earn-Out Loan Notes
"Earn-Out Period" the period commencing on 1 January 1999 and ending on 31
December 2001
"Enlarged Group Modified Pre-Tax Profit"shall have the meaning ascribed to
such expression in Schedule 6
"Escrow Agent" means the agent appointed by the Purchaser and the Vendors=
Representative in accordance with the terms of the Escrow Mandate for
the purpose of administering the Escrow Fund
"Escrow Arrangements" the provisions relating to the creation and operation
of the Escrow Fund as set out in Schedule 7
"Escrow Fund" means the fund operated pursuant to the Escrow Mandate
"Escrow Mandate" means the escrow mandate in the Agreed Form entered into
by the Purchaser, the Vendors= Representative and The Royal Bank of
Scotland plc (or such other financial institution as shall be
reasonably acceptable to the Vendors= Representative), as Escrow Agent
"Escrow Security" means the Completion Escrow Security and the Earn-Out
Escrow Security (each as defined in Schedule 7)
"Excluded Subsidiaries" the companies brief particulars of which are set
out in Part 2 of Schedule 3
"Finally Determined" shall have the meaning ascribed to such expression in
Schedule 7
"the Group" the Company and the Subsidiaries (except, for the purposes of
Schedule 9 only or where otherwise specifically provided, the Excluded
Subsidiaries) and (where the context so permits) each of them
including (where the context so permits) the Partnerships prior to
their acquisition by the Company
"the Indemnity" the indemnity set out in clause 5 of this Agreement
"the Independent Accountant" the accountant appointed in the manner
described in paragraph (10) of Schedule 5
"Included Subsidiaries" the Subsidiaries except the Excluded Subsidiaries
"the Loan Notes" the ,5,210,000~3% Guaranteed Unsecured Loan Notes of the
Purchaser to be constituted by the Loan Note Instrument and to be
issued to the relevant Vendors on Completion in satisfaction or part
satisfaction of the Completion Consideration
"LoanNote Instrument" the instrument in the Agreed Form constituting the
Loan Notes
"Management Accounts" means:-
(i) the unaudited accounts of each Partnership for the period from
the Accounts Date to 30 November 1998;
(ii) the monthly fee reports of the Group (other than the Excluded
Subsidiaries) for the period from 1 December 1998 to 31 January;
and
"Net Current Assets" the amount by which the aggregate of the current
assets of the Group exceeds the aggregate of the liabilities of the
Group as at the Completion Date as shown in the Completion Accounts to
be determined as stated in Schedule 5
"the Option Letters" the letters to be signed by the Company and delivered
to each person referred to in the Agreed Form Option Schedule shortly
after Completion confirming the terms on which each such person's
option to acquire A Shares is to be satisfied, upon exercise, by the
allotment and issue of common stock, par value, $0.01 per share, of
the Purchaser
"the Partnership Accounts" the audited accounts of each of the Partnerships
for the financial year ended on the Accounts Date, including the notes
thereto and the auditors= reports thereon
"the Partnerships" those partnerships known as St Quintin Manchester, St
Quintin London, and St Quintin Leeds, the business and assets of which
were acquired by the Company on 29 January 1999
"Pension Scheme(s)" shall have the meaning ascribed to such expression in
Warranty F.1 in Schedule 9
"the Pre-Sale Dividends" the cash dividend aggregating ,1,033,104 (net of
any associated tax credits) paid on 3 March 1999 by the Company in
respect of the A and B Shares and ,1,012,404 (net of any associated
tax credits) paid on 2 March 1999 by St. Quintin Management Services
Limited and ,69,324 (net of any associated tax credits) paid on 2
March 1999 by St. Quintin Property Finance Limited
"the Properties" the properties referred to in Schedule 4 and references to
a "Property" shall be construed accordingly
"the Purchaser's Group" the Purchaser and its subsidiaries for the time
being other than the Group
"the Purchaser's Solicitors" Gouldens, 22 Tudor Street, London, EC4Y~0JJ
"REGLDeed of Warranty the deed of warranty and indemnity dated 25 and
Indemnity" February 1998 between (1) the Purchaser and (2) the
shareholders of Richard Ellis Group Limited therein mentioned
"Relevant Claims" shall have the meaning ascribed to such expression in
clause 7.1
"Relevant Period" shall, in relation to the Earn-Out Period, have the
meaning ascribed to such expression in Schedule 6
"the Service Agreements" service agreements in the Agreed Form to be
entered into between the Company and each of those Vendors selling A
Shares on Completion
"the Shares" the A Shares, the B Shares and the C Shares, being together
the entire issued share capital of the Company as detailed in Schedule
2
"Subsidiary" a company brief particulars of which are set out in Schedule 3
and references to "the Subsidiaries" shall be construed accordingly
"the Tax Deed" a deed in the form set out in Schedule 8
"taxation" or "tax" tax as defined in the Tax Deed
"the Vendors' Representative" John Ardley or such other person with an
address in the United Kingdom as the Vendors or, in default thereof,
the Purchaser shall appoint in accordance with clause 22
"the Vendors' Solicitors" S J Berwin & Co of 222 Grays Inn Road, London
WC1X 8HB
"the Warranties" the warranties set out in clause 6 and Schedule 9
1.2 References in this Agreement to "the Companies" are references to the
Company and the Subsidiaries (except the Excluded Subsidiaries unless
otherwise specifically provided) and (where the context permits) each
Partnership and the expression "the Company" shall (save where expressly
otherwise provided) also include each Subsidiary (except the Excluded
Subsidiaries unless otherwise specifically provided) and (where the context
permits) each Partnership so that (save where expressly otherwise provided)
each of the Warranties in Schedule 9 shall be deemed separately given in
respect of and in relation to each of the Companies and each Partnership.
1.3 References in this Agreement to "the Taxes Act", "the TCGA" and "the
Companies Act" are references to the Income and Corporation Taxes Act 1988,
the Taxation of Chargeable Gains Act 1992 and the Companies Act 1985
respectively and words and expressions defined in the Companies Act shall
(unless the context clearly does not so permit) bear the same meanings
where used in this Agreement.
1.4 References in this Agreement to the "appropriate proportion" in relation to
each Vendor means that proportion set out in column 7 of Schedule 1.
1.5 The ejusdem generis rule of construction shall not apply to this Agreement
and accordingly general words shall not be given a restrictive meaning by
reason of their being preceded or followed by words indicating a particular
class or examples of acts matters or things. Words importing the singular
shall include the plural and vice versa and words importing any gender
shall include all other genders and references to persons shall include
corporations and unincorporated associations.
1.6 References in this Agreement to any "Agreed Draft" document or any document
in Agreed Form are references to the document described in the form of the
draft agreed between the parties and initialled by them or by the Vendors'
Solicitors and Purchaser's Solicitors on their behalf for identification
purposes.
1.7 References in this Agreement to statutory provisions shall be construed as
references to those provisions as respectively amended, consolidated,
extended or re-enacted from time to time and shall include the
corresponding provisions of any earlier legislation (whether repealed or
not) and any orders regulations instruments or other subordinate
legislation made from time to time under the statute concerned.
1.8 References to this Agreement shall include the Schedules hereto which shall
form part hereof and shall have the same force and effect as if expressly
set out in the body of this Agreement.
1.9 References in this Agreement to an "associate" or a "connected person" in
relation to another, are references to a person who is an associate of or
connected with the other within the meaning of Section 417 or Section 839
of the Taxes Act, as appropriate, and references to "participator" shall
bear the same meaning as in Section 417 of the Taxes Act.
1.10 The clause headings in this Agreement are for convenience only and shall
not affect the interpretation hereof.
1.11 In this Agreement references to , or Sterling are references to the lawful
currency for the time being of the United Kingdom and references to $ or
Dollars are references to the lawful currency for the time being of the
United States of America.
1.12 In this Agreement references to any time of day are to the time in London,
England.
2. Agreement to Sell and Purchase
2.1 The Vendors hereby agree to sell the Shares to the Purchaser (a) free from
all liens, charges, encumbrances and other equities of any description
(whether known about or not), (b) together with the benefit of all rights
and profits attaching thereto and (c) otherwise with full title guarantee
for the purposes of the Law of Property (Miscellaneous Provisions) Act 1994
and the Purchaser hereby agrees to purchase the same on and subject to the
terms and conditions of this Agreement.
2.2 Each of the Vendors hereby waives and undertakes to procure the waiver of
all pre-emption and similar rights over the Shares or any of them to which
he or any other person may be entitled under the Articles of Association of
the Company or otherwise in relation to the sale and purchase of the same
hereunder.
2.3 Nothing in this Agreement shall oblige the Purchaser to buy any of the
Shares or otherwise complete this Agreement unless the sale and purchase of
all (100%) of the Shares is completed simultaneously.
2.4 Notwithstanding that in accordance with the terms hereof the Consideration
may not be paid or satisfied in full on Completion the full right and title
of the Vendors to the Shares and the rights therein shall on Completion
pass to the Purchaser absolutely free from any lien.
3. Consideration
3.1 The Consideration for the purchase of the Shares shall be:
(A) ,16,460,000 (being the Completion Consideration) which shall be
adjusted upon preparation and finalisation of the Completion Accounts
such that:-
(a) the Completion Consideration shall be increased by the amount by
which the Net Current Assets (as determined in accordance with
Schedule 5) exceeds ,817,000 ("the Additional Consideration"); or
(b) the Completion Consideration shall be reduced by the amount by
which the Net Current Assets (as determined in accordance with
Schedule 5) is less than ,817,000 ("the Shortfall"); plus
(B) in respect of each Relevant Period during the Earn-Out Period a
further ,3 for every ,1 by which the Enlarged Group Modified Pre-Tax
Profit exceeds the Earn-Out Base Profit in such Relevant Period (being
the Earn-Out Consideration) PROVIDED THAT the aggregate Earn-Out
Consideration payable under this Agreement shall not exceed
,7,500,000.
3.2 The Completion Consideration shall be paid or satisfied at Completion:
(A) as to ,8,750,000 by the payment in cash to each Vendor of the amount
set opposite his name in column (3) of Schedule 1; and
(B) subject to the Escrow Arrangements and any adjustment required under
clauses 3.3 or 3.4 below, as to ,7,710,000, by the allotment and issue
to each such Vendor of the amount of Loan Notes and Consideration
Shares, in each case credited as fully paid, set out opposite his name
in columns (4) and (5) of Schedule 1 respectively.
3.3 Any Additional Consideration shall be paid or satisfied on or before the
tenth business day following determination of the Net Current Assets in
accordance with Schedule 5 by the payment in cash to each Vendor in the
proportion that the number of each Vendor=s shares shown in column (2) of
Schedule 1 bears to the total number of Shares, such payment to be made by
telegraphic transfer to the Vendors= Solicitors on behalf of the Vendors,
receipt of which shall be an absolute discharge of the Purchaser for
payment of such Additional Consideration to the Vendors.
3.4 Any Shortfall shall be satisfied by the Vendors in the proportion that the
number of each Vendor's shares shown in column (2) of Schedule 1 bears to
the total number of Shares and shall be deducted from the Loan Notes to be
issued in satisfaction or part satisfaction of the Completion Consideration
deposited with the Escrow Agent under the Escrow Arrangements.
3.5 Subject to clause 3.6, the Earn-Out Consideration shall be satisfied in
respect of each Relevant Period during the Earn-Out Period, and subject to
the Escrow Arrangements, by the allotment of Earn-Out Loan Notes and/or
Earn-Out Consideration Shares (at the Purchaser=s reasonable discretion
following consultation with the Vendors= Representative) to each Vendor in
the proportions shown in column (6) of Schedule 1 within 10 business days
of the agreement or determination (as the case may be) of the Enlarged
Group Modified Pre-Tax Profit and Earn-Out Base Profit for each such
Relevant Period in accordance with Schedule 6. For the purposes of this
clause 3.5, the value of each Earn-Out Consideration Share shall be the
average of the closing price over the five business days ending on the date
preceding the date on which the Earn-Out Consideration (if any) in respect
of any such Relevant Period is satisfied and deposited with the Escrow
Agent.
3.6 The Purchaser shall use all reasonable endeavours to ensure that the
Earn-Out Consideration shall be satisfied solely or in so far as possible
by the allotment and issue of Earn-Out Loan Notes.
3.7 The Consideration Shares and the Earn-Out Consideration Shares shall on
allotment rank pari passu with the shares of the Purchaser of the same
class then in issue.
4. Completion
4.1 Unless otherwise agreed Completion shall take place at the offices of the
Purchaser's Solicitors on or before 2.00 p.m. on the Completion Date.
4.2 On Completion the Vendors shall:-
(A) deliver to the Purchaser:-
(a) duly executed transfers of the Shares in favour of the Purchaser
together with the share certificates therefor or an indemnity in
a form required by the Purchaser in the case of any missing share
certificates;
(b) to the extent not given in this Agreement, irrevocable powers of
attorney in the Agreed Form executed by each of the registered
holders of the Shares authorising the Purchaser or its nominees
to exercise all voting and other rights attaching to the Shares
until registration of the Purchaser or such nominees as the
holder(s) thereof;
(c) save as otherwise agreed, share certificates in respect of all
the issued shares in the Subsidiaries and duly executed transfers
in blank in respect of all of such shares not registered in the
name of the Company (or any Subsidiary) or in the case of the
Excluded Subsidiaries such of the share certificates as are in
the Vendors= control;
(d) save as otherwise agreed, the Certificate(s) of Incorporation,
the Common Seal, Minute Book, Register of Members (duly written
up to date), Share Certificate book and all other statutory
records of each of the Companies (other than the Excluded
Subsidiaries in respect of which the Vendors shall deliver such
of the statutory records as are in their control);
(e) the Tax Deed duly executed as a deed by each of the Covenantors
therein mentioned;
(f) a confirmation in Agreed Form executed as a deed by each of the
Vendors to the effect that (except as expressly therein
mentioned) he has no claim whether as officer, employee or
otherwise against any of the Companies and that none of the
Companies is in any way indebted to him;
(g) save as otherwise agreed, the written resignations of each of the
Directors and the Secretary of each of the Companies to the
extent required by the Purchaser, each such resignation to be
executed as a deed and to confirm that the person resigning has
no claims against such Company for compensation for loss of
office or otherwise;
(h) save as otherwise agreed, a statement showing the balances on all
bank accounts of each Company (other than the Excluded
Subsidiaries), at 28 February 1999 together with a list of all
sums received and cheques drawn in excess of ,250 for any one
item since the date of the relevant statement;
(i) save in respect of the Excluded Subsidiaries and as otherwise
agreed, all cheque books and credit cards of the Group and a
letter to each of the bankers of the Group, signed by sufficient
duly authorised signatories, cancelling the existing mandates of
the Group and authorising the bankers to deal with such
authorised representatives as the Purchaser shall nominate in
relation to the terms of any replacement mandates therefor;
(j) the title deeds to the Properties;
(k) the Service Agreements duly executed by each of those Vendors
selling A Shares pursuant to this Agreement;
(l) a certified copy of the minutes of a meeting of the remuneration
committee of the Company approving and authorising signature of
and delivery of the Option Letters, conditional only upon
Completion, to the Vendors.
(B) repay or procure the repayment in full (even if not due for repayment)
within 20 business days of Completion:
(a) of all amounts owing by the Group to third parties (other than
such debts which are or are to be provided for in the
determination of the Net Current Assets in accordance with
Schedule 5); and
(b) of ,49,666 owed to the Group by Reith Lambert Limited, and of all
amounts owing by any of the Vendors or any connected persons or
associates or directors of them or any of them or any company in
which any of the Vendors is a participator (other than any such
amounts which are or will be provided for in the determination of
the Net Current Assets, in accordance with Schedule 5);
(C) procure that all guarantees or indemnities given by or binding on any
of the Companies in respect of any liabilities or obligations (actual
or contingent) of any of the Vendors or any of such connected persons
or associates or directors or companies in which any of the Vendors is
a participator are fully and effectively released without cost to any
of the Companies (other than any such guarantees, liabilities or
obligations which are or will be provided for in the determination of
the Net Current Assets, in accordance with Schedule 5;
(D) procure that a meeting of the board of directors of each of the
Companies (including the Excluded Subsidiaries) shall be held at
which, save as otherwise agreed:-
(a) the transfers of the Shares and, as the case may be, the
transfers in blank referred to in clause 4.2(A), if completed by
the Purchaser, shall be approved for registration subject only to
them being duly stamped;
(b) the said resignations shall be accepted with effect from the
conclusion of the meeting and such persons as the Purchaser shall
nominate shall be appointed directors, the secretary and
auditors;
(c) all existing bank mandates shall be cancelled and fresh
instructions shall be issued to bankers as the Purchaser shall
require;
(d) such other business shall be attended to as the Purchaser shall
reasonably require.
4.3 Subject to conclusion of the matters referred to in clause 4.2 above the
Purchaser shall on Completion:-~
(A) deliver to the Vendors= Solicitors by telegraphic transfer ,8,750,000
pursuant to clause 3.2(A);
(B) issue and allot such number of Loan Notes and Consideration Shares (in
the case of the Consideration Shares, within seven business days of
Completion) to each Vendor as determined in accordance with clause
3.2(B) and shall deliver the certificates in respect of the Loan Notes
and the Consideration Shares to the Escrow Agent (in the case of the
Consideration Shares, within such seven business days of Completion)
in accordance with the Escrow Arrangements and shall promptly send
copies thereof to the Vendors= Solicitors certifying that the same
have been deposited with the Escrow Agent but that such copies are not
valid for making a demand under the guarantee contained in the Loan
Note Instrument;
(D) deliver to the Vendors' Solicitors counterparts of the Tax Deed and
the Service Agreements;
(E) deliver to the Vendors= Solicitors a secretary=s certificate in Agreed
Form confirming the passing of the resolutions of the board of
directors of the Purchaser authorising, inter alia, execution of this
Agreement and the issue of the Consideration Shares;
(F) deliver to the Vendors= Representative a copy of the guarantee in the
form set out in Schedule 5 of the Loan Note Instrument to each of the
Vendors duly signed by the Royal Bank of Scotland plc as guarantor;
and
(G) deliver to the Vendors= Representative confirmation in the Agreed Form
that the insurance cover referred to in clause 7.9(d) is in place.
4.4 The Purchaser shall procure the delivery of the Option Letters to the
Vendors= Representative on Completion.
4.5 The parties shall procure that their respective solicitors or other agents
shall duly retain and deal with all deeds, documents, agreements and
payments delivered to them in accordance with the provisions of this clause
4.
5. Your Watch Indemnity
5.1 Subject to clause 5.2 and subject as specifically provided in clause 7
(Limitations on Liability), and Schedule 7 (Escrow Arrangements) (but, for
the avoidance of doubt, notwithstanding any information provided pursuant
to the Disclosure Letter) each Vendor covenants severally with the
Purchaser that he will pay, as the Purchaser may direct, to the Purchaser
the Company or relevant Subsidiary as the case may be, his appropriate
proportion of an amount or amounts (on a pound for pound basis) equal to:
(A) the amount or amounts of any payments made by or on behalf of the
Purchaser, Company or any Subsidiary (or any successor to any of the
foregoing) to third parties (including, for the avoidance of doubt,
the pension schemes and death benefit schemes described in paragraph
F1 of Schedule 9) pursuant to a legal obligation as a result of any
dispute with or claim made by a third party (not being the Purchaser
or any member of the Purchaser=s Group) in relation to the Company or
the Subsidiaries arising out of or in respect of any event, act or
omission occurring on or prior to the date of Completion, and
excluding, for the avoidance of doubt, any dispute or claim arising
solely out of the management or operation of the business of the Group
after Completion; and
(B) the amount or amounts of any and all third party costs and expenses
reasonably incurred or payable by or on behalf of the Purchaser, the
Company or any Subsidiary in connection with investigating, assessing,
contesting or in settlement of any dispute or claim referred to in
clause 5.1(A) above or in connection with all proceedings in relation
thereto or steps taken to avoid or mitigate the same.
5.2 Any claim relating to tax shall be dealt with under the terms of the Tax
Deed and not under this clause 5.
6. Warranties
6.1 The Vendors hereby severally warrant to the Purchaser (for the benefit of
the Purchaser and its successors and assignees permitted in accordance with
and subject to clause 21 and separately as trustee for each Company) in the
terms of the Warranties.
6.2 Except as provided below, the Warranties are given subject only to those
matters fairly disclosed in the Disclosure Letter and the Disclosure
Documents. The contents of the Disclosure Documents or any of them shall
only be deemed to be fairly disclosed if the relevant Disclosure Document
is expressly referred to in a specific disclosure against a particular
Warranty, but not further or otherwise. For the avoidance of doubt, the
inclusion in the schedule of Disclosure Documents of documents which are
not expressly referred to in the Disclosure Letter by reference to a
specific Warranty shall not be deemed to constitute a disclosure of the
contents of such documents for any purpose whatsoever.
6.3 Each of the Warranties is given independently from and (save as provided in
clause 6.2 as regards the Disclosure Letter) shall not be limited by
reference to any of the others of them.
6.4 In the event of the Purchaser making a claim for any breach of the
Warranties, and if such claim has been Finally Determined or agreed by the
Purchaser and the Vendors= Representative, there shall be added to the
amount of the claim all reasonable third party costs of making,
investigating, pursuing and enforcing that claim against the Vendors.
6.5 The Purchaser may take action for any breach or non-fulfilment of the
Warranties before or after Completion notwithstanding that such breach or
non-fulfilment was (save for matters fairly disclosed in the Disclosure
Letter pursuant to clause 6.2) known to or discoverable by the Purchaser
before Completion and notwithstanding that the Purchaser shall delay or
otherwise fail to exercise its rights hereunder or generally in such
regard.
6.6 Each of the Vendors hereby irrevocably waives all rights and claims which
he may have against each Company in respect of any misrepresentation,
inaccuracy or omission in or from any information or advice given by it or
any of its officers or employees to such Vendor to enable him to give any
of the Warranties or to prepare the Disclosure Letter or to assume any of
the obligations assumed or to be assumed by him under or pursuant to this
Agreement.
7. Limitations on Liability
7.1 No claim under the Indemnity, the Warranties or the Tax Deed (other than a
claim under clause 2.1(H) of the Tax Deed, in which case the terms of
clause 7.1(C) shall apply) (in each case "a Relevant Claim") may be made
unless written notice of the claim concerned has been given by the
Purchaser to the Vendors= Representative before:
(A) 20 February 2003 in the case of a claim under the Tax Deed and the
Warranties relating to taxation ("the Tax Warranties") or under the
Indemnity;
(B) the date falling 18 months after the Completion Date in the case of a
claim under the Warranties (other than the Tax Warranties); and
(C) six years from the Completion Date in the case of a claim under clause
2.1(H) of the Tax Deed
and any Relevant Claim which is validly made under this clause 7.1(A) or (B)
within the required period shall (unless settled or withdrawn) be deemed to have
been waived or withdrawn in the event that legal proceedings in respect thereof
are not issued and served on the Vendors= Representative within nine months of
written notice of the Relevant Claim first being given. Time shall be of the
essence for the purpose of the foregoing.
7.2 No Relevant Claim may be made unless:-
(A) the amount of the liability actually payable by the Vendors under any
individual claim or series of related claims exceeds ,5,000; and
(B) the amount of the liability actually payable under such claim and
under all Relevant Claims (each being in excess of ,5,000) exceeds
,100,000 in aggregate.
7.3 In the event that the aggregate Relevant Claims (each in excess of
,5,000):-
(A) exceed ,100,000 but are not more than ,200,000, the Purchaser shall
not make a Relevant Claim against the Vendors as the Enlarged Group
Modified Pre-Tax Profit shall have been decreased in the year the
aggregate Relevant Claims exceed ,100,000 by the amount that such
aggregate Relevant Claims exceed that threshold; and
(B) exceed ,200,000, the Purchaser shall be entitled to bring a Relevant
Claim in respect of ,100,000 plus the total amount of the aggregate
Relevant Claims in excess of ,200,000 from and only from the Escrow
Fund.
7.4 Subject to clause 7.5, if the Purchaser successfully brings a Relevant
Claim against the Vendors their liability shall be limited to the Escrow
Security for so long as it forms part of the Escrow Fund and the Purchaser
shall not be entitled to have recourse to the personal assets of any Vendor
other than the Escrow Security and the proceeds thereof held or to be held
in the Escrow Fund pursuant to the Escrow Arrangements.
7.5 Notwithstanding anything to the contrary in this Agreement, any and all
limitations imposed on the Purchaser in this Agreement in relation to a
claim against a Vendor pursuant to the Warranties, the Indemnity and Tax
Deed (including, without limitation, clause 7.4), shall cease to apply to
the extent there has been a fraudulent misrepresentation by a Vendor but
only to the extent that any Relevant Claim arising from such fraudulent
misrepresentation exceeds the amount of the Escrow Fund for the time being.
7.6 Subject to clause 7.5 but notwithstanding any other provision of this
Agreement the liability of each of the Vendors in respect of any Relevant
Claim shall not exceed his appropriate proportion (as defined in Schedule 7
(Escrow Arrangements)) of such claim as agreed or determined in accordance
with Schedule 7.
7.7 The amount paid by the Vendors to the Purchaser in satisfaction of any
Relevant Claim shall be treated as a reduction by that amount in the
Consideration for the Shares.
7.8 Nothing contained in the Disclosure Letter shall limit and none of the
limitations contained in this clause and/or in clauses 3 to 6 (inclusive)
of the Tax Deed shall apply to any breach of any of the Warranties given in
paragraphs A.5 to A.9 (inclusive), C.7, D.7, L.3, L.11 and M.1 of Schedule~
9.
7.9 No Relevant Claim may be made and none of the Vendors shall be liable :-
(a) if it would not have arisen but for some act, omission, transaction or
arrangement carried out after Completion (otherwise than involuntarily
or in the ordinary course of business or pursuant to a legal
obligation of the Purchaser or any of its subsidiaries (including the
Group) in force on Completion) and which the Purchaser was or should
reasonably have been aware would give rise to the claim in question by
or on behalf of all or any of the Purchaser, the Company any
Subsidiary or any holding company from time to time of any of them or
any subsidiary from time to time thereof and their respective
successors in title;
(b) in relation to the Warranties only, if the fact, event or circumstance
giving rise to the breach or claim or otherwise relevant thereto is
expressly disclosed in this Agreement (including the Schedules and any
Appendices thereto) or in any document in Agreed Terms or the
Disclosure Letter;
(c) to the extent that provision or allowance is made in the calculation
or determination of the Net Current Assets in the Completion Accounts
in respect of the matter to which the liability relates or that
payment or discharge thereof is or has been taken into account
therein; and
(d) to the extent of any insurance recovered by the claimant in respect of
the claim being brought. The Purchaser shall procure that for so long
as a Relevant Claim is capable of being made the Company and the
Subsidiaries (or any other member of the Purchaser=s Group on behalf
of the Company and the Subsidiaries) shall maintain Professional
Indemnity insurance cover on the following basis:-
(i) coverage for prior acts and omissions up until Completion will be
not less than the coverage in place under the existing policy of
the Group in force immediately prior to the date of Completion
(particulars of which are set out in the Disclosure Letter) and
shall adopt the same or equivalent levels of excess as under such
existing policies;
(ii) coverage for acts and omissions from and following Completion
will be not less than the coverage in place under the existing
policy of the Group in force immediately prior to the date of
Completion (particulars of which are set out in the Disclosure
Letter) but shall adopt the same or equivalent levels of excess
as under the existing Professional Indemnity insurance policies
of REGL in force immediately prior to Completion
provided always that the Purchaser shall not be obliged to procure
such insurance at a cost of more than 125% of the cost for the
financial year commencing 1 September 1998 and provided further that
such insurance cover is commercially available with equivalent scope
and breadth and provided further that if the business and assets of
the Group are transferred to another member of the Purchaser's Group
following Completion, the obligation of the Purchaser hereunder shall
be to ensure equivalent insurance with coverage for prior act and
omissions up until Completion is maintained notwithstanding such
transfer; No later than 14 days before each renewal date for such
insurance, the Purchaser shall deliver to the Vendors= Representative
satisfactory evidence that the insurance cover required pursuant to
this clause 7.9(d) has been renewed for a further period of 12 months.
Subject to the conditions of this clause 7.9(d), if the Purchaser
fails to deliver such evidence of renewal at least 14 days prior to
such renewal date, and/or if the Company or any of the Subsidiaries
fails to maintain such cover at any time during which a Relevant Claim
is capable of being made, the Vendors= Representative shall be
entitled to procure that the insurance cover is put in place provided
that in the case of a renewal he shall first give to the Purchaser
seven days notice of his intention to do so and the Company shall bear
the costs of such cover provided that such costs do not exceed 125% of
the cost of such insurance for the preceding financial year;
(e) to the extent that any taxation would not have arisen but for, or has
been increased by:-
(i) a disclaimer, claim or election made or notice or consent given
after Completion by the Purchaser or the Company (other than any
disclaimer, election, claim, notice or consent the making or
giving of which was taken into account or assumed in computing
the provision for tax (including the provision for deferred
taxation) in the Completion Accounts or was one which the
Purchaser or the Company was obliged to make; or
(ii) a failure or omission by the Company to make any claim, election,
surrender or disclaimer or give any notice or consent or do any
other thing after Completion the making, giving, or doing of
which was taken into account or assumed in computing the
provision for tax (including the provision for deferred taxation)
in the Completion Accounts;
(f) to the extent that any taxation arises from any change in accounting
or tax policy or practice of or affecting the Company, including the
method of submission of tax returns, introduced or having effect on or
after Completion;
(g) to the extent that such taxation would not have arisen or been
increased but for:-
(i) any change in rates of taxation or statutorily imposed variation
imposed in the method of applying or calculating rates of
taxation; or
(ii) any imposition of any new tax legislation; or
(iii)any change in the published practice of any tax authority after
Completion but with retrospective effect.
7.10 If in respect of a Relevant Claim under the Indemnity or the Warranties the
liability of the Purchaser or the Company or any Subsidiary is contingent
then the Vendors shall not be liable in respect thereof unless and until
such time as the contingent liability ceases to be contingent and becomes
actual and no liability under a successful Relevant Claim in respect of the
payment of monies shall become due to be satisfied unless and until the
relevant monies become legally due and payable.
7.11 Nothing herein or otherwise shall be deemed to relieve the Purchaser or the
Company or any Subsidiary from any common law duty to mitigate any loss or
damage incurred by it or them in consequence of any matter giving rise to a
Relevant Claim under the Warranties or the Indemnity and in any event the
Purchaser undertakes that it will procure that following Completion insofar
as relevant to the Indemnity or the Warranties or other obligations of the
Vendors under the Indemnity or the Warranties:-
(a) the Company and each Subsidiary shall take all commercially reasonable
steps to perform its obligations owing to and enforce its rights
against third parties including (without limitation) promptly to
collect all debts the payment of which or any part of which is
warranted hereunder; and
(b) the Company and each Subsidiary shall duly and properly perform its
obligations set out in or contemplated by this clause 7.11.
7.12 No person shall be entitled to recover any sum in respect of any Relevant
Claim or otherwise obtain reimbursement or restitution more than once from
each Vendor in respect of any one breach of the Warranties or claim under
the Indemnity or under the Tax Deed or the subject matter thereof so that
for this purpose recovery by one shall be deemed to be recovery by all
other persons so entitled.
7.13 If any Relevant Claim (other than a claim under the Tax Deed to which
clause 6 of the Tax Deed shall apply) is made or any matter comes to the
notice of the Purchaser or the Company or any Subsidiary for which or as a
result of which the Vendors may be liable under the Indemnity or the
Warranties, the Purchaser or the Company or Subsidiary or claimant shall,
as appropriate, within 28 days after the matter first comes to its notice
give written notice thereof to the Vendors= Representative, provided that
any failure to give the requisite notice during that period shall not
prejudice the ability of the Purchaser or the Company or any Subsidiary or
other possible claimant to make a claim and:-
(a) none of the Purchaser=s Group or the Company or any Subsidiary or
shall make any admission of liability, agreement, settlement or
compromise or otherwise take any action in relation thereto without
the prior written consent of the Vendors= Representative and shall at
all times promptly give the Vendors= Representative and their
professional advisers all information and documents in its or the
Company=s or Subsidiary=s control as reasonably requested from time to
time;
(b) save as provided in clause 7.13(c), each of the Purchaser=s Group, the
Company or the Subsidiaries will at all times permit the Vendors=
Representative, as appropriate, to take such action on their/its
behalf to avoid, resist, appeal, compromise, defend, mitigate or
otherwise deal with the claim or the liability the subject thereof or
pursue any rights of the Company or any Subsidiary in respect thereof;
(c) clauses 7.13(a) and (b) will not apply to any Relevant Claim (after
deducting the amount which is or which the Purchaser and the Vendors=
Representative conclude for the purposes of paragraph 5 of Schedule 7,
should be, indemnified by insurance cover for such Relevant Claim)
which exceeds the maximum liability of the Vendors or to any Relevant
Claim (other than purely monetary disputes or claims) which could
reasonably be expected to have a material adverse effect on the
operation of the business or the goodwill or reputation of the
business. In respect of any such Relevant Claims to which this clause
7.13(c) applies, the Purchaser, the Company or any Subsidiary will
consult with the Vendors= Representative and take account of all
reasonable representations and views in order to avoid, dispute,
resist, appeal, compromise or defend any such Relevant Claim.
7.14 Where the Purchaser or the Company or any Subsidiary is entitled (whether
by right of indemnity, reimbursement or any other means) to recover from
some other person (not being the Purchaser or the Company or any Subsidiary
but including, without limitation, any Taxation authority) any sum or
benefit in respect of any matter the subject of a Relevant Claim under the
Warranties or Indemnity, the Purchaser or the Company or Subsidiary so
entitled shall (subject to being indemnified by the Vendors to its or their
reasonable satisfaction against all costs and expenses which it or they may
reasonably incur thereby) take all appropriate steps to enforce such
recovery or at the option of the Vendors it shall assign (for no
consideration) to them or such of them as they may nominate in writing all
of its and their rights of recovery aforesaid and the full benefit thereof
and (to the extent they have previously made payments in respect of the
relevant claim) account to them (or those other as shall have made payments
in respect of the relevant claim in the proportions in which such payments
were made) for any amounts they recover, in accordance with paragraph 7.15
below.
7.15 In the event that payment is made by the Vendors or any of them in respect
of a Relevant Claim under the Warranties or Indemnity and the Purchaser or
the Company or any Subsidiary or any agent on its or their behalf or any of
them subsequently recovers from the third party a sum or benefit which is
referable to the subject matter of such claim, the Purchaser and the
Company and the relevant Subsidiary shall be jointly and severally liable
forthwith after the receipt of such sum or benefit to reimburse to the
Vendors the net amount received (after deducting any costs and expenses
reasonably incurred by the recipient(s) in recovering such sum or benefit
from the third party) but not in any event exceeding the amount originally
paid in respect of the Relevant Claim. For these purposes:-
(a) a sum or benefit shall also be deemed to have been received if
received by way of credit set-off or other deduction or if received in
kind;
(b) a reduction in liability to Taxation arising as a direct result of any
payment made in respect of the Relevant Claim shall be deemed to be a
sum or benefit received aforesaid;
(c) the recipient shall be deemed to receive a credit refund or repayment
for Taxation purposes when and if it should have received the same but
for a liability to any Taxation not covered by the Tax Deed;
(d) any repayment supplement for Taxation purposes or interest (less tax)
paid or received or attributable to the sum or benefit recovered shall
also be accounted for to the Vendors to the extent referable to the
period after the Relevant Claim was satisfied.
7.16 Save in respect of fraudulent misrepresentation none of the Vendors shall
be liable in respect of any representations, warranties, covenants,
agreements, undertakings or other obligations express or implied which are
made or assumed or deemed to have been made or assumed by them or any of
them in relation to or connection with the subject matter hereof which are
not contained and expressly given or assumed by them in this Agreement or
any document in Agreed Form to be entered into pursuant hereto and the
Purchaser hereby confirms that it has not entered into this Agreement in
reliance on any such representation, warranty, covenant, agreement,
undertaking or other obligation.
7.17 When any Warranty or any provision of this Agreement or the Tax Deed is
qualified or phrased by reference to materiality, such reference shall be
construed as a reference to materiality in the context of the business
carried on by the Group or its value as a whole, and where any Warranty
contains a reference to a material adverse change or effect, such reference
shall be construed as being a reference to a change or effect which is
material in the context of the business carried on by the Group or its
value taken as a whole.
7.18 The Purchaser shall be entitled (at its absolute discretion) to claim both
under the Warranties and/or the Indemnity by reference to the same subject
matter, but any payment in respect of a breach of Warranty shall to such
extent satisfy and discharge any claim made by the Purchaser under the
Indemnity in respect of the same subject mater and vice versa and, for the
avoidance of doubt, the Purchaser shall be entitled to make a claim under
the Indemnity notwithstanding that such a claim would be time barred as a
Relevant Claim for breach of Warranty under clause 7.1(C).
8. Earn Out Protections
8.1 In recognition of the Vendors= interest in achieving the maximum Earn-Out
Consideration, the Purchaser hereby undertakes to the Vendors that
following Completion and until the earlier of 31 December 2001 and the date
on which no further Earn-Out Consideration may be payable, save with the
prior written consent of the Vendors= Representative (which may only be
withheld to the extent legitimate to protect the interests of the Vendors
achieving the maximum Earn-Out Consideration) or as provided in clauses 8.2
to 8.4 inclusive below:-
<PAGE>
(a) it will not deliberately and knowingly do any act or thing or procure
the Company or any member of the Group to do any act or thing not
properly done for the purpose of the Purchaser=s Group=s business the
effect of which distorts unfairly the financial results of the Company
so as to reduce the amount of Earn-Out Consideration;
(b) it will not require or permit the payment of management charges to the
Purchaser=s Group (other than REGL) by the Company or any member of
the Group save:-
(i) with respect to services requested by the Company, with any such
charges subject to the consent of the Vendors= Representative, such
consent not to be unreasonably withheld; or
(ii) corporate allocations for travel expenses, accounting services and
similar items actually incurred, not to exceed ,100,000 per year;
(c) it will not cause the Company or any member of the Group conducting a
business operation to cease carrying on its business in whole or in
part except to the extent that (without prejudice to clause 8.1(a)
above), it is considered by the Purchaser (acting reasonably) to be
necessary to effect an acquisition, disposal, reorganisation or
similar restructuring of assets or shares provided that the financial
results of the business of the Group after completion of such a
restructuring or acquisition are sufficiently separately identifiable
for the purpose of calculating the Earn-Out Consideration;
(d) it will not solicit or endeavour to entice away, offer employment to
or offer to conclude any contract for services with any of the
employees of the Group except with the consent of the Vendors=
Representative;
(e) it will not knowingly interfere with or do anything the sole or main
purpose of which is to impair or adversely affect the relationship of
the Company or any member of the Group with any of its or their
customers and clients;
(f) it will not require the Company or any member of the Group to give any
guarantee or indemnity for the obligations of any third party save to
the extent that the Purchaser considers (acting reasonably) it
necessary for the Company and/or any of the Subsidiaries to provide
collateral guarantees in respect of:-
(i) the financing facilities available to the Purchaser=s Group; or
(ii) liabilities relating to acquisitions of REGL and/or the Group
completed after Completion;
(g) it will not pass any resolution for the winding up, dissolution or
reconstruction of the Company or any member of the Group except to the
extent that (without prejudice to clause 8.1(a) above), it is
considered by the Purchaser (acting reasonably) to be necessary to
effect an acquisition of business assets or shares provided that the
financial results of the business after such acquisition is completed
are sufficiently separately identifiable for the purpose of
determining the Earn-Out Consideration;
(h) it will not take steps designed to prevent the Company or any member
of the Group from carrying on its business in the ordinary course,
substantially as presently carried on, and (without prejudice to the
generality of the foregoing) it will not in any way to the detriment
of the Company or any member of the Group compel the Company or any
member of the Group to trade or deal with any particular person, firm
or company whether for goods or services except in relation to the
selection of a financial institution for commercial lending or
investing or in respect of appointing auditors, barristers,
solicitors, accountants, investment bankers, insurers, actuaries and
other professional advisors provided that the Company or any member of
the Group shall only be required to meet appropriate fees, charges or
costs to the extent reasonable in the circumstances including where
such costs are incurred on a Purchaser=s Group-wide basis the due
proportion of such costs and it is acknowledged that such
circumstances shall include the standing and reputation of the
professional advisers appointed;
(i) it will use its reasonable endeavours to procure that no member of the
Purchaser=s Group knowingly and deliberately diverts away from the
Group any business opportunities that first become available to the
Company or any of the Subsidiaries;
(j) it will comply with its obligations set out in clause 8 (Earn Out
Protections) of the REGL Deed of Warranty and Indemnity save as such
obligations may be varied or waived in accordance with the terms of
such deed.
8.2 Nothing in clause 8.1 save for sub-clauses (a), (g) or (i) above shall
prevent the Purchaser=s Group from carrying on any business presently
carried on by it nor from acquiring any other company or business whether
of a similar nature or otherwise.
8.3 Nothing in clause 8.1 shall prevent the Purchaser or any other member of
the Purchaser=s Group or the Company from performing its other obligations
or enjoying or enforcing its rights under this Agreement or any other
agreement entered into pursuant hereto.
8.4 Nothing in clause 8.1 shall prevent the Purchaser from changing the
auditors appointed for the Company or any members of the Group at any time
in the future or from restructuring the Group and REGL so as to continue
their respective businesses within the ownership of a single corporate
entity provided that the protections afforded under this clause 8 continue
to apply to the conduct of the business of the restructured group.
8.5 In recognition of the Purchaser=s interest in acquiring a business that is
operated on the basis of maximising the net present value of profits over
time each of the Vendors hereby undertakes to the Purchaser that in his
capacity as officer, manager or employee of any member of the Group (if he
is such) he shall procure as far as reasonably practicable that following
Completion and until the earlier of 31 December 2001 and the date on which
no further Earn-Out Consideration may be payable:-
(a) he will not deliberately and knowingly do any act or thing or procure
the Company or any member of the Group to do any act or thing the
object of which is to distort unfairly the financial results of the
Company so as to increase the amount of Earn-Out Consideration that is
to be payable;
(b) that investment capital will not be committed or guarantees undertaken
or other liabilities assumed outside the ordinary course of business
without the written approval of the Purchaser; and
(c) to the extent that any rights, interests or obligations are assigned
under this Agreement the Vendors agree to meet their obligations under
this clause 8.5.
9. Partners= Guarantees Indemnity
9.1 The Purchaser shall, and shall procure that the Company shall, indemnify
and keep indemnified each of the Vendors from and against all and any
liability suffered or incurred, directly or indirectly, by any of the
Vendors, including without limitation reasonable fees and expenses and
costs (including legal costs), under, pursuant to or arising out of the
leases, deeds of surety and guarantees (collectively and individually
"Personal Guarantees") given by any of the Vendors in relation to any of
the Properties set out in Schedule 4 which are specifically identified as
being the subject of Personal Guarantees, but only if and to the extent
that any such liability relates to any period or periods arising after the
date of Completion. The Purchaser=s obligations pursuant to this clause 9.1
are without prejudice to any common law or other rights of contribution or
otherwise which the Partners may have to indemnification or reimbursement
from the Company or any Subsidiary.
9.2 Without limitation to clause 9.1, the Purchaser agrees that, in relation to
any of the Personal Guarantees it will endeavour to obtain a release from
the lessors or other beneficiaries of each of the Personal Guarantees
(whether by way of deeds of novation, release, substitution or otherwise)
and will, in order to give effect to this obligation, procure that REGL
offer such lessors or beneficiaries appropriate replacement covenants in
substitution for the Personal Guarantees given by the Vendors but if and
only to the extent that such replacement covenants are no more onerous than
the Personal Guarantees and will provide all necessary financial
information to such lessors and beneficiaries to enable them to assess the
strength of the new covenant being offered.
9.3 If any claim is made or any matter comes to the notice of the Vendors=
Representative for which or as a result of which the Purchaser may be
liable under clause 9.1, the Vendors= Representative shall, within 14 days
after the matter first comes to his notice give written notice thereof to
the Purchaser, provided that any failure to give the requisite notice
during that period shall not prejudice the ability of the Vendors to make a
claim pursuant to clause 9.1 and:
(a) none of the Vendors shall make any admission of liability, agreement,
settlement or compromise or otherwise take any action in relation
thereto without the prior written consent of the Purchaser and shall
at all times promptly give the Purchaser and its professional advisers
all information and documents in the Vendors= control as reasonably
requested from time to time; and
(b) the Vendors will at all times permit the Purchaser to take such action
on their behalf to avoid, resist, appeal, compromise, defend, mitigate
or otherwise deal with the claim or the liability the subject thereof
or pursue any rights of the Vendors in respect thereof.
9.4 The obligations of the Purchaser pursuant to this clause 9 shall not be
affected by any variation, waiver, breach or alleged breach by or on the
part of any of the Vendors, other than an express deed of variation or
waiver with regard to this clause 9.
10. Purchaser=s Warranties and Undertakings
10.1 The Purchaser warrants to, and agrees with, the Vendors as of the date of
Completion as follows:
(a) the Purchaser is a corporation duly organised, validly existing and in
good standing under the laws of the jurisdiction of organisation and
has all requisite power and authority to own, lease and operate its
properties and to carry on its businesses as now being conducted and
is duly qualified to do business and is in good standing in each
jurisdiction where the failure to be so qualified would have a
material adverse effect on the Purchaser . The Purchaser has delivered
to the Vendors= Representative complete and correct copies of its
certificate of incorporation and bylaws as amended to the date hereof.
(b) as of the date hereof the authorised capital stock of the Purchaser
consists of 80,000,000 shares of common stock, par value $.01 per
share ("Common Stock"), and 20,000,000 shares of preferred stock, par
value $0.01 per share ("Preferred Stock"). At the close of business on
2 March 1999 21,643,210 shares of Common Stock (including 139,200
shares of Common Stock held in treasury) and no shares of Preferred
Stock were outstanding.
(c) the Purchaser has all requisite corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement, and the
consummation of the transactions contemplated hereby (including the
issuance of the Consideration Shares), have been duly authorised by
all necessary corporate action on the part of the Purchaser. This
Agreement has been duly executed and delivered by the Purchaser and
constitutes a valid and binding obligation of the Purchaser
enforceable against the Purchaser in accordance with its terms except
as enforcement may be limited by bankruptcy, insolvency, or other
similar laws affecting the enforcement of creditors= rights generally
and except that the availability of equitable remedies, including
specific performance, is subject to the discretion of the court before
which any proceeding therefor may be brought.
(d) the Purchaser has filed all required forms, reports and documents with
the Securities and Exchange Commission (the "SEC") since inception,
each of which has complied in all material respects with all
applicable requirements of the Securities Act of 1933, as amended, and
the Securities Exchange Act of 1934, as amended, each as in effect on
the dates such forms, reports and documents were filed.
(e) No filing, recording or registration with any court, governmental
authority or regulatory agency is required to be obtained or made and
no authorization, consent, approval, license, order, registration,
qualification or decree is required from any court, governmental
authority or regulatory agency in connection with (i) the execution
and delivery by the Purchaser of this Agreement or the performance of
its obligations hereunder, (ii) the offer, sale, and delivery of the
Consideration Shares, the Loan Notes, the Earn-Out Loan Notes or the
Earn-Out Consideration Shares in accordance with the terms of this
Agreement or (iii) to ensure the legality, validity, enforceability or
admissibility of this Agreement, except such as have been made or
obtained and are in full force and effect, and except for such as
would not reasonably be expected to have a material adverse effect on
the ability of the Purchaser to perform its obligations hereunder or
to consummate the transaction contemplated hereby.
(f) Neither the execution and delivery of this Agreement by the Purchaser
nor the performance by the Purchaser of its obligations hereunder has
resulted in or will result in (i) any violation of any charter
document of the Purchaser or conflict with or result in breach of any
of the terms or provisions of, or constitute a default or event of
default (however described) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Purchaser under, any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which the
Purchaser is a party or by which the Purchaser may be bound or to
which any of its properties may be subject or (ii) any violation of
any existing applicable law, rule, regulation, judgment, order or
decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Purchaser or any of
its properties, except, in either case, such as would not reasonably
be expected to cause any material adverse change in the condition,
financial or otherwise, or in the assets or operations of the
Purchaser.
(g) The Consideration Shares and any Earn-Out Consideration Shares, when
issued and delivered in accordance with the terms of this Agreement,
will be duly authorised, legally and validly issued, fully paid and
non-assessable and title to such shares will be transferred free of
any liens or encumbrances other than those created or contemplated by
this Agreement (and the holders thereof will not be subject to any
personal liability in respect of the debts and obligations of the
Purchaser solely by reason only of being a holder thereof).
(h) The Loan Notes and the Earn-Out Loan Notes, when executed by or on
behalf of the Purchaser and delivered in accordance with the terms of
this Agreement, will constitute legal, valid and binding obligations
of the Purchaser, enforceable against the Purchaser in accordance with
their terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganisation, fraudulent conveyance,
moratorium and similar laws affecting creditors= right in general and
by general principles of equity.
(i) Assuming the accuracy of the representations made by the Vendors in
clause~13.3, no registration under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), is required for the offer, sale and
delivery of the Consideration Shares, the Loan Notes, the Earn-Out
Loan Notes or Earn-Out Consideration Shares by the Purchaser to the
Vendors in accordance with the terms of this Agreement.
(j) Neither the Purchaser nor any of its "affiliates" (as such term is
defined in Rule 405 under the Securities Act) or any person acting on
behalf of any of them has engaged in any "directed selling efforts"
(as such term is defined in Regulation S under the Securities Act)
with respect to the offer, sale and delivery of the Consideration
Shares, the Loan Notes and the Earn-Out Loan Notes or Earn-Out
Consideration Shares to the Vendors in accordance with the terms of
the Agreement.
(k) The Purchaser has delivered to the Vendors copies of its Form 10 (as
amended), as filed with the U.S. Securities and Exchange Commission
("SEC") on or about August 7, 1998 its Forms 10-Q, as filed with the
SEC on or about September 18, 1998 and November 17, 1998 and a copy of
its Earnings Release for the fiscal year ended December 31, 1998, as
announced on February 24, 1999 (such Form 10 (as amended), Form 10-Q
and Earnings Release referred to in this Clause 10 as the "Disclosure
Documents"). Except insofar as the transactions contemplated hereby
are not reflected therein, (i) the Disclosure Documents (other than
the Earnings Release) comply in all material respects with the
applicable requirements of the U.S. Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder, and (ii) the
financial statements of the Purchaser contained in the Disclosure
Documents (a) were prepared in accordance with generally accepted
accounting principles in the United States, (b) fairly present the
Purchaser=s consolidated financial condition and consolidated results
of operations as of their respective dates and for the periods then
ended (in the case of the Earnings Release, subject to there being no
notes to such financial statements) and (c) except for the Earnings
Release, contain and reflect all adjustments and accruals necessary
for a fair presentation of the Purchaser=s consolidated financial
condition as of their respective dates, subject to normal year-end
audit adjustments. The Disclosure Documents, as of their respective
dates, do not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in
order to make the statements made therein in the light of the
circumstances under which they were made, not misleading.
10.2 The Purchaser undertakes to each Vendor to use all reasonable
endeavours to amend the banking covenants to which it is subject
within six months of Completion so that it will not be prohibited from
issuing Earn-Out Loan Notes in full satisfaction of the Earn-Out
Consideration and the Purchaser agrees not to issue or agree to issue
any loan notes or other equivalent securities pursuant to any
subsequent acquisition of any business, assets or company to the
extent that the ability to issue Earn-Out Loan Notes in full
satisfaction of the Earn-Out Consideration would be impaired.
11. Set Off
Each of the Vendors and the Purchaser agree that any Relevant Claim shall
be treated in accordance with the provisions of the Escrow Arrangements.
12. Covenants to protect Goodwill
12.1 For the purposes of protecting the goodwill of the Companies and the value
of the Shares each of the Vendors hereby severally undertakes to and
covenants with the Purchaser (separately for itself and as trustee for each
of the Companies and for each purchaser, assignee and shareholder from time
to time below mentioned) that (except as a shareholder in the Purchaser or
in the proper performance of his duties as an employee or officer of any
Company or any member of the Purchaser's Group) he will not, whether for
his own account or jointly with or as manager agent officer employee
consultant shareholder or otherwise on behalf of any other person, firm or
corporation, and whether directly or indirectly during the Period:-~
(A) be engaged, concerned or interested in or associated within the
Relevant Territory with any business which is the same as or similar
to or in direct or indirect competition with any Relevant Business;
and/or
(B) within the Relevant Territory carry on or be engaged concerned or
interested in the sale of goods or provision of services, of a kind
supplied by any Company in connection with its Relevant Business, to
any person firm or company which has at any time within the period of
twelve months preceding the Relevant Date been a customer of or in the
habit of dealing with any Company for such goods or services; and/or
(C) endeavour to procure the supply of goods or services from any person
firm or company which during the twelve months preceding the Relevant
Date has been a supplier of goods or services in connection with any
Relevant Business to any Company where such supply may have an adverse
effect on or cause loss to such Company; and/or
(D) solicit, interfere with or endeavour to entice away from any Company
any person, firm or company who to his knowledge is now or has during
the twelve months preceding the Relevant Date been a client, customer,
correspondent, agent of or in the habit of dealing with such Company
nor enter into a partnership or any association whether directly or
indirectly with any such person; and/or
(E) solicit, interfere with or endeavour to entice away from any Company
or offer to employ or engage under a contract for services or enter
into partnership with any person who on or during the twelve months
preceding the Relevant Date is or was an officer or employee of or
full time consultant to any Company; and/or
(F) knowingly do or say anything which is or is calculated to be
prejudicial to the interests of any Company or its business or which
results or may result in the discontinuance of any contract or
arrangement of benefit to any Company;
PROVIDED THAT nothing in this clause 12.1 shall prohibit the Vendors from
holding between them directly or indirectly (for investment purposes only)
not more than 5% of the shares of a public company listed or dealt in on a
recognised investment exchange.
12.2 Each Vendor hereby undertakes to and covenants with the Purchaser (for
itself and separately as trustee as provided in clause 12.1) that
(save in the proper performance of his duties as an employee or
officer of any Company or any member of the Purchaser's Group) he will
not, whether for his own account or jointly with or as manager, agent,
officer, employee, consultant, shareholder or otherwise on behalf of
any other person firm or corporation, and whether directly or
indirectly:-
(A) take away, make use of or disclose to any person firm or
corporation (save insofar as necessary to comply with any
statutory obligation or order of any Court or statutory tribunal
of competent jurisdiction) any confidential information or trade
secrets in his possession and which in any way relate to the
business or other affairs of any Company or to any manufacturers
suppliers customers clients agents or any other person who has or
who has had any dealings with any Company; and/or
(B) make use of the name "St Quintin" or any corporate or business
name which is identical or similar to or is likely to be confused
with the corporate name or any trade or business name of any of
the Companies or which might suggest a connection with the same.
12.3 Each Vendor undertakes to execute and deliver and do such documents deeds
and things as the Purchaser may reasonably require after Completion to vest
in the Group, or such other member of the Purchaser's Group as the
Purchaser shall direct, for no additional consideration, ownership and
title and all rights of such Vendor in respect of all inventions and
intellectual property owned by or vested in him and which relate to
products of the Group or any manufacturing process used or intended at
Completion to be used by the Group in its business.
12.4 For the purposes of this clause:-~
(A) the expression "Relevant Business" shall mean any business carried on
by any Company on or at any time during the period of twelve months
ending on the Completion Date;
(B) the expression "the Period" shall mean the period commencing on
Completion and expiring:-
(a) in the case of John Ardley, Michael Brodtman and Robert Evans on
the earlier of (i) the date four years from Completion, or (ii)
one year after the termination by the Purchaser of such Vendor=s
employment (other than any such termination where any member of
the Purchaser=s Group is entitled to summarily dismiss the
relevant Vendor);
(b) in the case of those other Vendors selling A Shares, the earlier
of (i) the date three years from Completion, or (ii) six months
after the termination of such Vendor=s employment by any member
of the Purchaser=s Group; and
(c) in the case of the Vendor selling B Shares and those Vendors
selling C Shares, on the date six months after Completion;
(C) the expression "the Relevant Territory" means the United Kingdom.
12.5 Each of the undertakings and covenants contained in the separate
paragraphs of clauses 12.1 and 12.2 is and shall be a separate
undertaking and covenant by each Vendor.
12.6 It is hereby agreed and declared that the benefit of the
covenants and undertakings given in this clause shall be
assignable by the Purchaser to and become enforceable by any
purchaser or assignee or other holder for the time being of any
of the Shares or of any shares of any of the Subsidiaries or any
purchaser or assignee of all or any part of any Relevant
Business.
13. Disposal of Consideration Shares, Loan Notes and Earn-Out Loan Notes
13.1 Subject to clause 10 of Schedule 7, each Vendor undertakes to the Purchaser
that he will not without the prior consent in writing of the Purchaser
dispose of any of the Consideration Shares, Loan Notes or Earn-Out Loan
Notes to be issued to him pursuant to this Agreement or any interest
therein or any shares allotted by way of capitalisation or rights in
respect thereof or otherwise representing the same, through conversion,
sub-division, consolidation or otherwise to the extent that such shares or
loan notes are subject to the Escrow Arrangements. For the avoidance of
doubt, subject to clause 13.3, when such Consideration Shares, Loan Notes
or Earn-Out Loan Notes cease to be subject to the Escrow Arrangements they
shall be freely transferable without the prior consent of the Purchaser.
13.2 Each Vendor undertakes to the Purchaser that for so long as the Loan Notes
or Earn-Out Loan Notes are subject to the Escrow Arrangements, and
notwithstanding any provision of the Loan Note Instrument or Earn-Out Loan
Note Instrument, he will not demand repayment of the Loan Notes or Earn-Out
Loan Notes (as the case may be), other than in circumstances where an event
of default (as defined in the Loan Note Instrument or Earn-Out Loan Note
Instrument, as applicable) has occurred. If there is any conflict between
the terms of this Agreement and either the Loan Note Instrument or Earn-Out
Loan Note Instrument, the terms of this Agreement shall prevail.
13.3 Without prejudice to clause 13.1, each of the Vendors represents,
acknowledges and agrees that:
(a) none of the Consideration Shares, the Loan Notes, the Earn-Out Loan
Notes or the Earn-Out Consideration Shares have been or will be
registered under the United States Securities Act of 1933, as amended
(the "Securities Act"), and such securities, to the extent offered,
are being offered to him outside the United States in reliance on
Regulation S under the Securities Act ("Regulation S");
(b) he is not a U.S. person (as defined in Regulation S) and is not
acquiring the Consideration Shares, the Loan Notes, the Earn-Out Loan
Notes or the Earn-Out Consideration Shares for the account or benefit
of any such U.S. person;
(c) for a period of one year following Completion, he will resell the
Consideration Shares only: (i) pursuant to registration of the
Consideration Shares under the Securities Act, (ii) in offshore
transactions outside the United States in accordance with Rule 903 or
904 of Regulation S, or (iii) pursuant to another available exemption
from the registration requirements of the Securities Act; and he will
not engage in hedging transactions with regard to the Consideration
Shares unless in compliance with the Securities Act;
(d) for a period of 40 days following Completion, he will resell the Loan
Notes only: (i) pursuant to registration of the Loan Notes under the
Securities Act, (ii) in offshore transactions outside the United
States in accordance with Rule 903 or 904 of Regulation S, or (iii)
pursuant to another available exemption from the registration
requirements of the Securities Act;
(e) for a period of 40 days following the receipt of any Earn-Out Loan
Notes in respect of any Relevant Period, he will resell such Earn-Out
Loan Notes only: (i) pursuant to registration of the Earn-Out Loan
Notes under the Securities Act, (ii) in offshore transactions outside
the United States in accordance with Rule 903 or 904 of Regulation S,
or (iii) pursuant to another available exemption from the registration
requirements of the Securities Act;
(f) for a period of one year following the receipt of any Earn-Out
Consideration Shares in respect of any Relevant Period, he will resell
the Earn-Out Consideration Shares only: (i) pursuant to registration
of the Earn-Out Consideration Shares under the Securities Act, (ii) in
offshore transactions outside the United States in accordance with
Rule 903 or 904 of Regulation S, or (iii) pursuant to another
available exemption from the registration requirements of the
Securities Act; and he will not engage in hedging transactions with
regard to the Earn-Out Consideration Shares unless in compliance with
the Securities Act; and
(g) the Purchaser is required pursuant to Regulation S to refuse to
register the transfer of any Consideration Shares or Earn-Out
Consideration Shares in violation of the restrictions stated in clause
13.3(c) or (f) above, as the case may be, and any certificate
representing the Consideration Shares or Earn-Out Consideration Shares
may bear a legend containing the restrictions stated in such clause
13.3(c) or (f) above, respectively.
14. Tax Affairs
14.1 If so requested by the Purchaser, the Vendors shall at their own expense,
in consultation with the Purchaser's accountants (whose costs shall be
borne by the Purchaser) and otherwise in accordance with this clause,
prepare all documentation and deal with all matters (including
correspondence) relating to the tax returns and affairs of Group for all
accounting and fiscal periods ending on or prior to Completion ("Relevant
Accounting Periods") to the extent that the same have not been prepared and
agreed with the Inland Revenue or other Tax Authority prior to Completion.
14.2 Insofar as within its power, the Purchaser shall procure that each Company
shall following Completion:-
(A) afford the Vendors and their duly authorised agents access to its
books, accounts and records and personnel and such otherassistance as
may from time to time be reasonably required to prepare and submit the
said returns and/or in connection with their dealings in relation
thereto contemplated by this clause; and
(B) complete and execute such documentation and render such assistance to
the Vendors and their duly authorised agents as may from time to time
be reasonably required in connection with or for the purposes of the
foregoing.
14.3 For the purposes of and in connection with the foregoing:-
(A) the Vendors and their agents shall keep the Purchaser fully and
promptly informed of all matters arising out of their dealings with
the tax returns and affairs of the Group under this clause and in any
event they shall provide for approval by the Purchaser (or its agents)
(such approval not to be unreasonably withheld or delayed) prior to
submission to any Tax Authority, drafts of correspondence with any Tax
Authority (including tax computations) in relation to the Group for
all of the Relevant Accounting Periods, and shall promptly provide the
Purchaser with any correspondence received from any Tax Authority and
any other written information relevant to the tax affairs of the Group
for the periods in question, including advice from professional
advisers, and notes of meetings or discussions with the Tax Authority
in question;
(B) the Vendors shall procure that no agreement, settlement or compromise
of any tax returns or affairs of any Company in respect of any
Relevant Accounting Periods or otherwise is agreed with the relevant
Tax Authority without the prior written consent of the Purchaser,
which shall not be unreasonably withheld or delayed except that it
shall be regarded as reasonable for the Purchaser to withhold its
consent to an agreement, settlement or compromise which in its
reasonable opinion could materially adversely affect any future tax
liability of the Purchaser or the Group or any of its or their
subsidiaries or in respect of a tax liability for which the Purchaser
has no effective indemnity under the Indemnity or the Tax Deed
provided that the Vendors= liability shall be no greater by reason of
the Purchaser=s unreasonable withholding or delaying of such consent.;
PROVIDED ALWAYS THAT nothing done or permitted by any Company or the
Purchaser pursuant to this clause shall in any way restrict or reduce any
rights any of them may have under the Indemnity, the Warranties and/or Tax
Deed.
14.4 The parties shall use reasonable endeavours to obtain the agreement of the
United Kingdom's Contribution Agency and/or Inland Revenue (by concession
or otherwise) that the issue of the Option Letters does not give rise to
the Company being liable to employer national insurance (or any interest or
penalties). However, if the Company is liable to any such taxation
liabilities, the Vendors undertake to pay to the Purchaser an amount equal
to 66.66 per cent. of such liabilities. Such payment shall be satisfied by
the Vendors in the proportions shown in column (7) of Schedule 1 and shall
be deducted from the Loan Notes deposited with the Escrow Agent under the
Escrow Arrangements not later than 10 business days after receipt of
notification of such liability.
15. Pensions
15.1 The Purchaser undertakes that, so long as any United Kingdom employer
within the Purchaser=s Group from time to time operates or otherwise
participates in a pension scheme which provides benefits on a defined
benefits basis, it will procure that the pension scheme is maintained as an
ongoing pension scheme and that the members of the pension scheme will not
be transferred into any other pension scheme without their prior written
consents. However it is hereby agreed that this undertaking may be waived
with the prior written consent of the Vendors= Representative.
5.2 The Purchaser undertakes that, so long as any employers within the Group or
the Purchaser=s Group participates in the Pension Scheme, it shall procure
that participating employers within the Pension Scheme shall make such
contributions to the Pension Scheme as are deemed necessary from time to
time by the Pension Scheme=s actuary ("the Actuary") to ensure that the
scheme=s funding level remains in surplus on an ongoing basis (determined
on the basis of actuarial assumptions chosen by the Actuary and determined
using the attained age method).
15.3 The Vendors and the Purchaser shall procure that an actuarial valuation
("the 2000 Valuation") of the Pension Scheme is carried out as at 1 March
2000 ("the 2000 Valuation Date") by an actuary appointed by the Vendors=
Representative (the "Vendors= Actuary") no later than 1 May 2000 using
reasonable actuarial methods and assumptions determined by the Vendors=
Actuary and agreed by an actuary appointed by the Purchaser (the
"Purchaser=s Actuary") or in default of agreement within 30 days of receipt
by the Purchaser=s Actuary of the Vendors= Actuary=s proposed assumptions,
by the Independent Actuary (the "Assumptions") and on the further
assumptions that:
(a) the Group has continued to pay contributions to the Pension Scheme to
the 2000 Valuation Date at the rate recommended in the valuation
report of the Pension Scheme as at 1 March 1997;
(b) benefits have not been improved from those applying at the date of
Completion;
(c) the Pension Scheme continues to remain closed to new entrants,
provided it is legal and proper to do so
The Vendors= Actuary shall propose full assumptions in accordance with this
clause within 30 days of the Completion Date.
15.4 In the event that the 2000 Valuation reveals that the actuarial value of
the assets of the Pension Scheme does not exceed the value of the accrued
benefits of the Pension Scheme in respect of pensionable service to 1 March
2000 (such shortfall being referred to herein as "the 2000 Deficit") the
Vendors shall be entitled to procure that a further actuarial valuation of
the Pension Scheme is carried out as at 1 March 1999 (the "CV Date") by the
Vendors= Actuary using the Assumptions ("the Completion Valuation") no
later than 1 July 2000.
15.5 The calculations of the Vendors= Actuary whether in regard to the 2000
Valuation or the Completion Valuation may be checked by the Purchaser=s
Actuary and in the event of disagreement the 2000 Valuation or the
Completion Valuation as the case may be will be determined by the
Independent Actuary.
5.6 In the event that the Completion Valuation reveals that the actuarial value
of the assets of the Pension Scheme does not exceed the value of the
accrued benefits of the Pension Scheme in respect of pensionable service to
the CV Date (such shortfall being referred to herein as "the Completion
Deficit") each Vendor covenants severally with the Purchaser that an amount
equal to the lower of the Completion Deficit and the 2000 Deficit ("the
Pension Shortfall") shall be satisfied out of the Escrow Fund by the
Vendors in the proportion that the number of each Vendor=s shares shown in
column (2) of Schedule 1 bears to the total number of Shares. For the
avoidance of doubt, if the Completion Valuation as agreed pursuant to
clauses 15.4 and 15.5 does not show a deficit, no money shall be payable
pursuant to this sub-clause 15.6.
15.7 The Purchaser shall procure that the Company and/or the relevant Subsidiary
shall forthwith upon receipt of the Pension Shortfall pay a sum equal to
the amount paid under clause 15.6 to the Pension Scheme subject to Inland
Revenue approval of the Pension Scheme not being prejudiced.
15.8 In the event that any liability of the Company and/or the relevant
Subsidiary to corporation tax is reduced as a result of any contribution(by
the Company and/or the relevant Subsidiary to the Pension Scheme as
envisaged in clause 15.7 derived from payment made under clause 15.6), the
Purchaser shall procure that the Company and/or the relevant Subsidiary
shall repay to the Vendors an amount equal to the corporation tax saving
thereby arising to the Company and/or the relevant Subsidiary (as
appropriate) in the proportion that the number of each Vendor=s shares
shown in column (2) of Schedule 1 bears to the total number of Shares and
such repayment shall be made on the day or days on which the corporation
tax thereby saved would otherwise have been due and payable. The Purchaser
undertakes to use all reasonable endeavours to procure that a tax credit is
obtained in relation to such payment to the Pension Scheme under clause
15.7.
15.9 Any dispute between the Vendors= Actuary and the Purchaser's Actuary
concerning the determination or agreement of the Assumptions or of any
other matters to be determined or agreed by them for the purposes of this
Clause 15 shall, in the absence of agreement between them, be referred to
an independent Actuary (the "Independent Actuary").
The Independent Actuary shall be nominated jointly by the Vendors=
Representative and the Purchaser or, failing such nomination, shall be
nominated by the President for the time being of The Institute of Actuaries
at the instance of the party first applying to him.
The Independent Actuary so appointed shall act as an expert and not as an
arbitrator. His decision shall be final and binding in the absence of
manifest error. His costs shall be borne between the Vendor of the one part
and the Purchaser of the other part as the independent Actuary may direct.
16. Book Debts
16.1 The Vendors undertake to pay to the Purchaser an amount (the "Book Debts
Shortfall") equal to the full amount of the book debts owed to each Company
and each Partnership at Completion (the "Book Debts") which are not
collected within 6 months of Completion (the "Collection Period") other
than the amount of such Book Debts not exceeding, in aggregate, ,60,000
(including, for the avoidance of doubt, the provision of ,30,000 in respect
of Book Debts to be made in the Completion Accounts). Such payment shall be
satisfied by the Vendors in the proportions shown in column (7) of Schedule
1 and shall be deducted from the Loan Notes deposited with the Escrow Agent
under the Escrow Arrangements not later than 10 business days after the
expiry of the Collection Period.
16.2 If any payment is made by the Vendors in accordance with clause 16.1 and
any member of the Purchaser=s Group or the Group subsequently receives
payment in respect of a previously uncollected Book Debt, the Purchaser
shall pay to the Vendors, in the proportions shown in column (7) of
Schedule 1, the amount received in respect of such subsequently collected
Book Debt within 7 business days of receipt of such amount. Such payment by
the Purchaser shall be made by telegraphic transfer to the Vendors=
Solicitors on behalf of the Vendors, receipt of which shall be an absolute
discharge of the Purchaser for payment of such amount.
16.3 The Purchaser undertakes to the Vendors that during the Collection Period
it will use all reasonable endeavours to collect the Book Debts (but so
that it will not be obliged to take any step which is not at present part
of the normal routine of the Company to take in the collection of debts or
which would be materially detrimental to the Business or to threaten to
take any legal proceedings with a view to such collection) and shall
consult with the Vendors= Representative in connection with such
collection.
17. Enforceability and Severability
17.1 Each of the agreements, undertakings, covenants, warranties, indemnities
and other obligations of the parties entered into pursuant hereto
(including without limitation under clause 12) is considered reasonable by
the parties, but in the event that any provision or part thereof shall be
held void or unenforceable or in conflict with the law of any relevant
state or jurisdiction any provision or part so held void or unenforceable
or in conflict as aforesaid shall be severed from this Agreement or other
document in which it is contained or otherwise modified to become valid and
enforceable insofar as it relates to that state or jurisdiction only and
the enforceability and validity of any other parts or provisions of this
Agreement and such document shall not be affected by such severance or
modification.
17.2 Where any agreement, undertaking, covenant, warranty or indemnity given
pursuant to this Agreement is stated to be for the benefit of a Company the
same shall be directly enforceable by the Company concerned or by the
Purchaser on its behalf as if it were named as a party hereto and had duly
executed this Agreement.
18. Further Assurance
18.1 Each of the Vendors hereby agrees for no additional consideration or
payment to do, execute and deliver any such further acts, documents and
things as the Purchaser may reasonably require to vest in the Purchaser (or
as it shall direct) the beneficial ownership of the Shares free from all
charges liens and other adverse interests and to vest the benefit of this
Agreement in the Purchaser.
18.2 Each Vendor hereby irrevocably and unconditionally appoints the Purchaser
with effect on and from Completion (but subject to Completion taking place)
as his attorney with full powers of substitution in his name and for him
and on his behalf (and to the complete exclusion of any rights he may have
in such regard) lawfully to exercise all voting and other rights and
receive all the benefits and entitlements which may now or at any time
hereafter attach to his Shares or any of the Shares registered in his name
(whether alone or jointly with any other person) and to transfer and deal
with such shares, rights, benefits and entitlements and execute such
documents under hand or as a deed and do such acts and things in connection
with the foregoing as the Purchaser shall from time to time think fit in
all respects as if the Purchaser were the absolute legal and beneficial
owner thereof.
18.3 The Purchaser shall consult with the Vendors= Representative in relation to
any action of the Vendors required by the Purchaser under clause 12.3 and
/or 18.1 and subject only to such consultation having taken place, each
Vendor hereby irrevocably appoints the Purchaser with effect on and from
Completion as his attorney with full power of substitution aforesaid to
execute, deliver and do all such documents, deeds, acts and things as may
be required by the Purchaser under clause 12.3 and/or 18.1 above.
18.4 The powers of attorney granted in this clause are given by way of security
for the due performance by each Vendor of his obligations thereby
contemplated.
19. Survival of Agreement
This Agreement (and in particular the Warranties, representations,
covenants, agreements and undertakings of the Vendors hereunder) shall
remain in full force and effect after and notwithstanding Completion.
20. Costs
Save as expressly otherwise provided herein each party shall pay his own
costs and expenses in connection with the preparation and carrying into
effect of this Agreement.
<PAGE>
21. Successors and Assigns
This Agreement shall be binding upon and enure for the benefit of the
successors of the parties by operation of law but shall not be otherwise
assignable, save that the Purchaser may at any time assign all or any part
of its rights and benefits under this Agreement and any agreement referred
to herein, including, without limitation, any of the Warranties, the
Indemnity, the Tax Deed and any other indemnities, undertakings and
obligations given or undertaken by any other party and any cause of action
arising under or in respect of any of them, to any transferee of the share
capital of the Company or of any of the Subsidiaries (or any successors to
any of the foregoing), or to any Affiliate of the Purchaser (on the basis
that if that Affiliate ceases to be an Affiliate of the Purchaser, it shall
re-assign to the Purchaser the rights and benefits so assigned to it) or by
way of security provided that the Vendors= liability under this Agreement
shall continue to be subject to the same limitations, exclusions and
exceptions hereunder and such liability including, without limitation,
under any of the Indemnity, the Warranties and the Tax Deed and shall be no
greater by reason of such assignment. Any such assignee may enforce any
right or benefit assigned to it as if it had been named in this Agreement
as the Purchaser and may recover thereunder as if it had acquired the
Shares for the consideration and upon the other terms of this Agreement and
had thereby sustained all diminutions of value, losses and expenses in
consequence of such acquisition as have been sustained by the Purchaser and
any subsequent holder of such share capital, including itself, as if they
were all one entity which had retained the ownership of such issued share
capital throughout.
For the purposes of this clause 21, "Affiliate" shall mean any member of
the Purchaser=s Group including any subsidiary undertaking.
22. Announcements
Save in respect of statutory returns or matters required to be disclosed by
law or to any governmental or regulatory authority (including the United
States Securities and Exchange Commission and the New York Stock Exchange),
none of the parties hereto shall make any press statement or other public
announcement in connection with this Agreement without the prior written
approval of the text of such statement or announcement (in the case of any
Vendor) by the Purchaser or (in the case of the Purchaser) by the Vendors'
Solicitors or the Vendors' Representative.
23. The Vendors' Representative
23.1 Each of the Vendors hereby appoints John Ardley as the Vendors=
Representative and authorises and empowers such Vendors= Representative as
such Vendor=s true and lawful agent and attorney to act in the name, place
and stead of such Vendor with respect to the provisions of this Agreement
and with respect to the transfer of the Consideration Shares, cash, Loan
Notes and Earn-Out Loan Notes to the Purchaser pursuant thereto and to do
or refrain from doing all such acts and things as such Vendors=
Representative shall deem necessary or appropriate in order to give effect
to the terms of this Agreement and the transactions contemplated hereby,
including, without limitation, the power:-
(a) to agree the Completion Accounts and the determination of the Net
Current Assets in accordance with Schedule 5 on behalf of each Vendor;
(b) to act for such Vendor with regard to all warranty and indemnification
matters referred to in this Agreement including, without limitation,
the power to acknowledge responsibility for any claim and the power to
compromise or settle any claim on behalf of such Vendor including
meeting his appropriate proportion of costs incurred in investigating,
assessing, contesting, litigating or settling such claims out of the
Escrow Fund;
(c) to receive all demands, notices and other communications directed to
Vendors and to do or refrain from doing any further acts or deeds on
behalf of such Vendors which the Vendors= Representative deems
necessary or appropriate;
(d) to vary, waive or agree to any changes to the method of calculating
and to agree on behalf of such Vendors the calculations of the
Enlarged Group Modified Pre-Tax Profit, Earn-Out Base Profit and the
amount of cash and/or principal amount of Earn-Out Loan Notes to be
issued including, without limitation, in order to address any issues
that may arise from the acquisition or merger of a company by or with
any member of the Group.
23.2 The appointment of the Vendors= Representative shall be irrevocable until
the later of 20 February 2003 and the date when all Relevant Claims made by
the Purchaser prior 20 February 2003 shall have been resolved, settled,
withdrawn or deemed to have been withdrawn, at which date such appointment
shall automatically terminate, and the Purchaser and any other person may
conclusively and absolutely rely, without enquiry, upon any action of the
Vendors= Representative in accordance with this provision as an act of all
of the Vendors in all matters referred to in this Agreement. Each Vendor
hereby authorises, approves, ratifies and confirms all and any acts which
the Vendors= Representative shall do or cause to be done in his capacity as
Vendors= Representative. The Vendors= Representative shall act for all
Vendors on all of the matters set out in this Agreement in the manner such
Vendors= Representative believes to be in the best interests of such
Vendors and consistent with their obligations under this Agreement but the
Vendors= Representative shall not be responsible to any Vendor for any loss
or damage any Vendor may suffer by reason of the performance by the
Vendors= Representative of his duties in accordance with this provision
except for loss or damage arising from wilful violation of law or gross
negligence in the performance of his duties. Each of the Vendors
acknowledges that he has not relied on any representation by the Vendors=
Representative in deciding to enter into this agreement and waives all
rights to claim against the Vendors= Representative in connection with the
negotiation of the terms of this Agreement and all matters relating
thereto, except for any loss arising from his wilful default or gross
negligence.
23.3 In the event of the death, incapacity or resignation of the Vendors=
Representative, the Vendors shall agree upon a successor within the 30 day
period immediately following the date of notification of the death,
incapacity or resignation of the Vendors= Representative and such successor
shall either be a Vendor or any other person acceptable to the Purchaser
who shall agree in writing to accept such appointment in accordance with
this provision. In the event that the Vendors fail to agree on such a
successor within such time, the Vendors confirm and agree that the
Purchaser shall be entitled to appoint with immediate effect by written
notice any other Vendor as the Vendors= Representative and each such Vendor
hereby irrevocably agrees to act in such capacity if so appointed. This
appointment of a successor Vendors= Representative pursuant to this
provision shall promptly be notified in writing to the Purchaser.
24. Notices
24.1 Without prejudice to any other method available for the giving of notice or
to any acknowledgement by any party that it has received the same, any
notice or other communication required or desired to be given or made
hereunder may be given or made by personally delivering the same or by
sending the same by first class prepaid post (airmail if sent to or from
abroad) or registered overnight delivery in the case of the Purchaser to
Insignia Financial Group, Inc., 200 Park Avenue, NY, NY, USA 10166 (Attn:
the Corporate Secretary) and simultaneously to Richard Ellis Group Limited,
Berkeley Square House, London W1 (Attn. Company Secretary) and in the case
of any other party to his address shown herein and if sent by post as
aforesaid shall be deemed to have been received on the second business day
after the posting of the same (or on the third business day if sent to or
from abroad) and if sent by registered overnight delivery on the first
business day after dispatch and if personally delivered shall be deemed to
have been received on delivery or despatch if sent on a business day or (if
not so delivered or sent) on the first business day thereafter.
24.2 For the purposes of this Agreement and/or the Tax Deed and/or any
proceedings arising in connection therewith, service by the Purchaser of
notice on the Vendors= Representative shall be deemed to be sufficient and
proper notice to all of the Vendors as appropriate.
25. General
25.1 Except otherwise expressly provided herein the obligations and liabilities
of the Vendors assumed or undertaken under or pursuant to this Agreement
and Tax Deed shall be joint and several.
25.2 The obligations and liabilities of any party hereto shall not be
prejudiced, released or affected by any time or forbearance or indulgence,
release or compromise given or granted by any person to whom such
obligations and liabilities are owed or by any other person to such party
or any other party so obliged or liable nor by any other matter or
circumstance which (but for this provision) would operate to prejudice,
release or affect any such obligations except an express written release by
or on behalf of all the parties to whom the relevant obligations and
liabilities are owed or due.
25.3 The parties hereby acknowledge that the Completion Consideration has been
determined by reference to a multiple of the adjusted profit of the Group
for the year ended 31 August 1998. This Agreement together with all
documents in Agreed Form represents the entire agreement between the
parties and except as otherwise expressly provided it may only be varied by
written document signed by or on behalf of all the parties.
25.4 Except to the extent otherwise expressly provided herein, if any party
fails to pay by the due time any sum due hereunder or under any agreement
or deed entered into pursuant hereto, such sum shall for so long as it
remains outstanding bear interest calculated on a daily basis from the date
it was due until the date it is paid (both dates inclusive) at a rate (as
well after as before judgment or demand) equal to the base rate for the
time being of Barclays Bank PLC and such interest shall be payable on
demand.
25.5 Any party may take action for any breach or nonfulfillment of any
warranties, undertakings, agreements and representations on behalf of any
other party or parties before or after Completion notwithstanding that such
breach or nonfulfillment was (save in the case of breach of the Warranties
only for matters fairly disclosed in the Disclosure Letter pursuant to
Clause 6.2) known to or discoverable by such party before Completion and
notwithstanding that such party shall delay or otherwise fail to exercise
its rights hereunder or generally in such regard.
25.6 Except where expressly provided to the contrary, the rights and remedies
reserved to the parties or any of them under any provision of this
Agreement or in any document to be executed pursuant hereto shall be in
addition and without prejudice to any other rights or remedies available to
such parties whether under this Agreement or any such document by statute
common law or otherwise.
25.7 This Agreement shall be governed by and construed in accordance with
English Law and the parties hereby submit themselves to the non-exclusive
jurisdiction of the English Courts.
IN WITNESS whereof this Agreement has been executed as a deed of each of
the parties the day and year first before written.
<PAGE>
EXECUTED and DELIVERED as a Deed ) /s/ Philip Charles Molyneux
by or for the said PHILIP CHARLES ) By: John R. Ardley, as Attorney
MOLYNEUX BEARDWOOD )
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Mark Andrew Mikulin
by or for the said MARK ANDREW ) By: John R. Ardley, as Attorney
MIKULIN in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ John Richard Ardley
by or for the said JOHN RICHARD )
ARDLEY in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Peter Benjamin
by or for the said PETER BENJAMIN ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Robert William Greenham Evans
by or for the said ROBERT WILLIAM ) By: John R. Ardley, as Attorney
GREENHAM EVANS in the presence of:-~ )
/s/ Susan J. O'Reilly
<PAGE>
EXECUTED and DELIVERED as a Deed ) /s/ Crispin John Ralph Toast
by or for the said CRISPIN JOHN ) By: John R. Ardley, as Attorney
RALPH TOLAST in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Kevin Bramley
by or for the said KEVIN BRAMLEY ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ John Mervyn Henry Bezant Kent
by or for the said JOHN MERVYN HENRY ) By: John R. Ardley, as Attorney
BEZANT KENT in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Michael Harris Brodtman
by or for the said MICHAEL HARRIS ) By: John R. Ardley, as Attorney
BRODTMAN in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Patrick Edwards Grant
by or for the said PATRICK EDWARDS ) By: John R. Ardley, as Attorney
GRANT in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Gary Halman
by or for the said GARY HALMAN ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Martin David Samworth
by or for the said MARTIN DAVID ) By: John R. Ardley, as Attorney
SAMWORTH in the presence of:- ~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Christopher Phillip Lacey
by or for the said CHRISTOPHER PHILLIP ) By: John R. Ardley, as Attorney
LACEY in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Peter John Dameswick
by or for the said PETER JOHN ) By: John R. Ardley, as Attorney
DAMESWICK in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Nigel Baly
by or for the said NIGEL BALY ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Andrew Bevins
by or for the said ANDREW BELVINS ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Adrian Bunis
by or for the said ADRIAN BUNIS ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Nicholas Callaghan
by or for the said NICHOLAS ) By: John R. Ardley, as Attorney
CALLAGHAN in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Jonathan Carter
by or for the said JONATHAN CARTER ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Graham Cooke
by or for the said GRAHAM COOKE ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Timothy Davis
by or for the said TIMOTHY DAVIS ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Michael Edwards
by or for the said MICHAEL EDWARDS ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Andrew Farquhar
by or for the said ANDREW FARQUHAR ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Jerome Fieldhouse
by or for the said JEROME FIELDHOUSE ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Roger Fulford
by or for the said ROGER FULFORD ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Nanette Gibb
by or for the said NANETTE GIBB ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Robert Neil Grey
by or for the said ROBERT NEIL GREY ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Mark Holliday
by or for the said MARK HOLLIDAY ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Nicholas Maclean
by or for the said NICHOLAS MACLEAN ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Torquill McDougall
by or for the said TORQUILL ) By: John R. Ardley, as Attorney
McDOUGALL in the presence of:- )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ David Offen
by or for the said DAVID OFFEN ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Ian Jeffrey Pearey
by or for the said IAN JEFFREY ) By: John R. Ardley, as Attorney
PEAREY in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Mark Penson
by or for the said MARK PENSON ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ John Smith
by or for the said JOHN SMITH ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Michael Stones
by or for the said MICHAEL STONES ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Robin Sutton
by or for the said ROBIN SUTTON ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ Peter Trinder
by or for the said PETER TRINDER ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ David Tudor
by or for the said DAVID TUDOR ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
EXECUTED and DELIVERED as a Deed ) /s/ James Voss
by or for the said JAMES VOSS ) By: John R. Ardley, as Attorney
in the presence of:-~ )
/s/ Susan J. O'Reilly
SIGNED BY
for and on behalf of
INSIGNIA FINANCIAL GROUP, INC.
/s/Hugh V.A. Ellingham
