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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 (Date of earliest event reported): September 3, 1996
SITEL CORPORATION
(Exact name of registrant as specified in its charter)
MINNESOTA 0-26152 47-0684333
(State or jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification No.)
13215 BIRCH STREET
OMAHA, NEBRASKA 68164
(402) 498-6810
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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This 8-K consists of 113 pages. The Exhibit Index is on page 5.
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ITEM 2. ACQUISITION OF ASSETS.
On September 3, 1996, the Company completed the acquisition of 100% of the
outstanding capital stock of Mitre plc, an English public limited company
("Mitre"). Mitre is a leader in providing outsourced telephone-based customer
service and sales programs on behalf of large corporations in Europe. Mitre is
the parent company for a number of teleservicing businesses, including the
predecessor company, Merit Direct Limited, which was founded in 1985, and The
Decisions Group Limited, Merit Communications NV and The Call Centre Limited.
Mitre operates three call centers in the United Kingdom and a fourth call center
in Belgium that have the capability to handle calls and respond to electronic
mail via the Internet in over 20 languages and dialects. In May, 1996, Mitre
opened a fifth call center in Tokyo, Japan. Mitre has approximately 1,430
operational workstations in its five call centers and employs approximately
3,400 people. For the fiscal year ended December 31, 1995, Mitre had revenues
of approximately $58.4 million.
SITEL issued 9,170,553 new shares of Common Stock in exchange for all of
Mitre's ordinary shares, which were privately held by members of Mitre's
management. The underlying assets of Mitre over which the Company acquired
control through the acquisition consisted primarily of cash, accounts
receivable, fixed assets, leasehold improvements and contract rights. The
Company expects to account for the transaction as a pooling-of-interests.
The Company expects Mitre to continue the same business activities under
the Company's ownership as prior to the acquisition. The Company based the
purchase price for Mitre principally upon a multiple of the past and forecasted
operating income of Mitre.
The terms of the acquisition are described in more detail in the Amended
and Restated Share Purchase Agreement dated June 6, 1996, a conformed copy of
which (including all amendments through the closing) is attached as an exhibit
to this Form 8-K. The Company granted the Mitre selling stockholders certain
registration rights in connection with the Common Stock they received in the
transaction. Such registration rights are described in more detail in the
Registration Rights Agreement dated September 3, 1996, a conformed copy of which
is attached as an exhibit to this Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired.
The Company hereby incorporates by reference in this Form 8-K the
audited financial statements of Mitre plc as of December 31, 1993, 1994 and
1995 and for the fiscal years then ended contained in pages F-27 through F-
49 of the Company's Proxy Statement filed on July 29, 1996.
It is impracticable for the Company to provide the required unaudited
financial statements for Mitre plc at this time. The Company will file the
required unaudited financial statements for Mitre plc as an amendment to
this Form 8-K as soon as practicable, and no later than 60 days after the
due date of this Form 8-K.
(b) Pro forma financial information.
It is impracticable for the Company to provide the required pro forma
financial information at this time. The Company will file the required pro
forma financial information as an amendment to this Form 8-K as soon as
practicable, and no later than 60 days after the due date of this Form 8-K.
2
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(c) Exhibits.
The exhibits filed as a part of this Form 8-K are:
Exhibit
No.
-------
2.4(a) Amended and Restated Share Purchase Agreement dated
June 6, 1996, regarding acquisition of Mitre plc
(conformed copy including all amendments through
closing)
2.4(b) Registration Rights Agreement dated September 3, 1996
between SITEL Corporation and certain stockholders of
SITEL (conformed copy)
2.4(c) Escrow Agreement dated September 3, 1996 between SITEL
Corporation, the Mitre selling stockholders, and
Firstar Trust Company, as Escrow Agent (conformed copy)
2.4(d) Form of Investor Letter (conformed copy)
2.4(e) Deed of Covenant dated September 3, 1996 between SITEL
Corporation and the Mitre selling stockholders
(conformed copy)
3
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: September 18, 1996 SITEL Corporation
By: /s/ Michael P. May
--------------------------------
Michael P. May
President
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SITEL CORPORATION
EXHIBIT INDEX
Page Number
In Sequential
Numbering
Exhibit System
No. -------------
- -------
2.4(a) Amended and Restated Share Purchase Agreement dated
June 6, 1996, regarding acquisition of Mitre plc
(conformed copy including all amendments through
closing). 6
2.4(b) Registration Rights Agreement dated September 3, 1996
between SITEL Corporation and certain stockholders of
SITEL (conformed copy). 64
2.4(c) Escrow Agreement dated September 3, 1996 between SITEL
Corporation, the Mitre selling stockholders, and
Firstar Trust Company, as Escrow Agent (conformed
copy). 82
2.4(d) Form of Investor Letter (conformed copy). 95
2.4(e) Deed of Covenant dated September 3, 1996 between SITEL
Corporation and the Mitre selling stockholders
(conformed copy). 99
5
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EXHIBIT 2.4(a)
Amended and Restated Share Purchase Agreement dated June 6, 1996,
regarding acquisition of Mitre plc
(conformed copy including all amendments through closing)
The exhibits and schedules to the Stock Purchase Agreement,
which are identified therein, have been omitted from this Exhibit 2.4(a)
pursuant to Item 601 of Regulation S-K. Exhibits 2.4(b) through (e) to this
Form 8-K, however, contain conformed copies of the omitted exhibits.
The registrant undertakes to furnish supplementally
a copy of any of such omitted exhibits or schedules to the
Securities and Exchange Commission upon request.
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CONFORMED COPY
(including all
amendments through
September 3, 1996)
AMENDED AND RESTATED
SHARE PURCHASE AGREEMENT
dated
June 6, 1996
among
SITEL CORPORATION
and
THE SHAREHOLDERS OF MITRE PLC
Relating to the Purchase and Sale
of
100% of the Ordinary Shares of
MITRE PLC
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Page
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TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2
PURCHASE AND SALE
2.1 Purchase and Sale . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Completion. . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.3 Legending of Securities . . . . . . . . . . . . . . . . . . . 8
2.4 Escrow Account. . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE 3
WARRANTIES OF THE SELLERS
3.1 Corporate Existence and Power . . . . . . . . . . . . . . . . 9
3.2 Authorization . . . . . . . . . . . . . . . . . . . . . . . . 9
3.3 Governmental Authorization. . . . . . . . . . . . . . . . . . 9
3.4 Non-Contravention . . . . . . . . . . . . . . . . . . . . . . 9
3.5 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . 10
3.6 Ownership of Shares . . . . . . . . . . . . . . . . . . . . . 10
3.7 Subsidiaries and Joint Ventures . . . . . . . . . . . . . . . 10
3.8 Financial Statements. . . . . . . . . . . . . . . . . . . . . 11
3.9 Absence of Certain Changes. . . . . . . . . . . . . . . . . . 11
3.10 No Undisclosed Material Liabilities . . . . . . . . . . . . . 13
3.11 Related Party Transactions. . . . . . . . . . . . . . . . . . 13
3.12 Contracts with Clients. . . . . . . . . . . . . . . . . . . . 13
3.13 Other Material Contracts. . . . . . . . . . . . . . . . . . . 14
3.14 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.15 Compliance with Laws and Court Orders; No Defaults. . . . . . 15
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3.16 Properties. . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.17 Intellectual Property . . . . . . . . . . . . . . . . . . . . 19
3.18 Insurance Coverage. . . . . . . . . . . . . . . . . . . . . . 19
3.19 Licenses and Permits. . . . . . . . . . . . . . . . . . . . . 20
3.20 Finders' Fees . . . . . . . . . . . . . . . . . . . . . . . . 20
3.21 Environmental Matters . . . . . . . . . . . . . . . . . . . . 20
3.22 Compliance with Environmental Permits and Environmental
Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.23 Environmental Audit . . . . . . . . . . . . . . . . . . . . . 22
3.24 Sellers' Investment Purposes. . . . . . . . . . . . . . . . . 22
3.25 Competition and Fair Trading Laws . . . . . . . . . . . . . . 22
3.26 Records and Software. . . . . . . . . . . . . . . . . . . . . 23
3.27 Business Contracts. . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 4
WARRANTIES OF BUYER
4.1 Corporate Existence and Power . . . . . . . . . . . . . . . . 23
4.2 Corporate Authorization . . . . . . . . . . . . . . . . . . . 23
4.3 Governmental Authorization. . . . . . . . . . . . . . . . . . 24
4.4 Non-Contravention . . . . . . . . . . . . . . . . . . . . . . 24
4.5 Buyer Stock . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.6 Buyer's SEC Reports . . . . . . . . . . . . . . . . . . . . . 24
4.7 Finders' Fees . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 5
COVENANTS OF SELLERS
5.1 Conduct of the Company. . . . . . . . . . . . . . . . . . . . 25
5.2 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.3 Access to Information . . . . . . . . . . . . . . . . . . . . 27
5.4 Notices of Certain Events . . . . . . . . . . . . . . . . . . 28
5.5 Certain Actions . . . . . . . . . . . . . . . . . . . . . . . 29
5.6 Cooperation in Preparing Buyer Proxy Statement. . . . . . . . 29
5.7 Preferred Shares. . . . . . . . . . . . . . . . . . . . . . . 29
5.8 Reconciliation of Financial Statements. . . . . . . . . . . . 29
5.9 Required Consents of Accountants. . . . . . . . . . . . . . . 29
5.10 Termination of Shareholder Agreements . . . . . . . . . . . . 30
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5.11 Stay Bonus Arrangements . . . . . . . . . . . . . . . . . . . 30
5.12 Restrictions on Sale. . . . . . . . . . . . . . . . . . . . . 30
5.13 Assignment of Lease . . . . . . . . . . . . . . . . . . . . . 30
5.14 Translation of Documents. . . . . . . . . . . . . . . . . . . 30
ARTICLE 6
COVENANTS OF BUYER
6.1 Stockholder Meeting; Proxy Material . . . . . . . . . . . . . 30
6.2 Access To Records . . . . . . . . . . . . . . . . . . . . . . 31
6.3 Designation of Director . . . . . . . . . . . . . . . . . . . 31
6.4 Auditors of the Group . . . . . . . . . . . . . . . . . . . . 31
ARTICLE 7
COVENANTS OF BUYER AND SELLERS
7.1 Best Efforts. . . . . . . . . . . . . . . . . . . . . . . . . 32
7.2 Certain Filings . . . . . . . . . . . . . . . . . . . . . . . 32
7.3 Public Announcements. . . . . . . . . . . . . . . . . . . . . 32
7.4 Restrictions on Sellers . . . . . . . . . . . . . . . . . . . 32
7.5 HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE 8
DIRECTORS, EMPLOYEES AND PENSIONS
8.1 Directors, Employees and Pensions . . . . . . . . . . . . . . 33
ARTICLE 9
CONDITIONS TO COMPLETION
9.1 Conditions to Obligations of Buyer and Sellers. . . . . . . . 36
9.2 Conditions to Obligation of Buyer . . . . . . . . . . . . . . 37
9.3 Conditions to Obligation of Sellers . . . . . . . . . . . . . 38
9.4 Reasonable Efforts to Fulfill Conditions to Completion. . . . 39
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ARTICLE 10
SURVIVAL; INDEMNIFICATION
10.1 Limitations . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.2 Sellers' Liability. . . . . . . . . . . . . . . . . . . . . . 43
10.3 Procedures; Remedies Cumulative . . . . . . . . . . . . . . . 43
ARTICLE 11
TERMINATION
11.1 Grounds for Termination . . . . . . . . . . . . . . . . . . . 44
11.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . 45
ARTICLE 12
MISCELLANEOUS
12.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
12.2 Amendments and Waivers. . . . . . . . . . . . . . . . . . . . 47
12.3 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 47
12.4 Successors and Assigns. . . . . . . . . . . . . . . . . . . . 48
12.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 48
12.6 Counterparts; Third Party Beneficiaries . . . . . . . . . . . 48
12.7 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . 48
12.8 Restrictive Trade Practices Act . . . . . . . . . . . . . . . 48
12.9 Seller Representative . . . . . . . . . . . . . . . . . . . . 49
12.10 Interpretation.. . . . . . . . . . . . . . . . . . . . . . . 49
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EXHIBITS
Exhibit A Form of Registration Rights Agreement
Exhibit B Form of Escrow Agreement
Exhibit C Form of Investor Letter
Exhibit D Form of Tax Covenant
SCHEDULES
Schedule 2.1 Sellers
Schedule 3.7 Subsidiaries
Schedule 3.16 Properties
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AMENDED AND RESTATED
SHARE PURCHASE AGREEMENT
Amended and Restated Share Purchase Agreement (the "Agreement")
dated June 6, 1996 among Sitel Corporation, a Minnesota corporation ("Buyer"),
and the shareholders of Mitre plc, an English public limited company (the
"Company") whose names and addresses are set out in Schedule 2.1 hereto (the
"Sellers").
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. (a) The following terms, as used herein, have the
following meanings:
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly Controlling, Controlled by, or under common Control with
such Person.
"BALANCE SHEET" means the audited balance sheet of the Company and the
Subsidiaries as of December 31, 1995.
"BALANCE SHEET DATE" means December 31, 1995.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other
day on which commercial banks in London are authorized by law to close.
"BUYER PROXY STATEMENT" means the proxy or information statement
required to be filed by Buyer with the SEC in connection with the purchase of
the Shares and the issuance of Buyer Stock.
"BUYER STOCK" means the common stock, par value $.001 per share, of
Buyer.
"COMPANY PREFERRED SHARES" means the 350,000 redeemable preference
shares of L1 each in the capital of the Company.
"COMPLETION DATE" means the date of the Completion.
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"COMPANIES ACT" means the Companies Act 1985 as amended by the
Companies Act 1989.
"COMPANY SHARES" means the ordinary shares of the Company.
"CONTROL" shall have the same meaning as in Section 840 Taxes Act.
"DISCLOSURE LETTER" means the letter of today's date from the Seller
Representative on behalf of the Sellers to the Buyer.
"ENVIRONMENTAL LAWS" means the following:
(a) all European Union, national, state or local statutes, codes,
guidelines or other laws or legislation concerning health, safety
or Environmental Matters which are applicable to the business of
any Group Company or to the Properties and all rules,
regulations, ordinances, orders, notices and directives made
thereunder having the force of law;
(b) judicial interpretation and administrative interpretation having
the force of law of each of the foregoing.
"ENVIRONMENTAL MATTERS" means in relation to the business of any Group
Company and the Properties all matters related to pollution or protection of the
environment including though not limited to noise, emissions, discharges and
releases of any substances or energy into air, water (including underground
water and the sea), sewage systems and land (or a combination of these); the
environmental aspects of the manufacture, processing, distribution, use,
treatment, storage, disposal, transport and handling of any substances or form
of energy; and matters related to the health and safety of the employees of the
Group Company or any other person.
"ENVIRONMENTAL PERMITS" means the permits, consents, licenses,
certificates and other authorizations and approvals required under the
Environmental Laws to be obtained in connection with the use of the Properties
or the conduct of the business of each Group Company.
"ESCROW AGENT" shall have the meaning given to it in the Escrow
Agreement.
"ESCROW AGREEMENT" means the Escrow Agreement to be executed by the
Buyer and the Sellers, in substantially the form attached as Exhibit B hereto.
2
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"EXPIRATION DATE" shall have the meaning given to it in the Escrow
Agreement.
"FINANCIAL STATEMENTS" means the consolidated audited accounts of the
Company and the Subsidiaries for the financial year ended on the Balance Sheet
Date including the auditors' and directors' reports, the consolidated balance
sheet, the consolidated profit and loss account and the notes to them.
"GROUP" means the Company and the Subsidiaries.
"GROUP COMPANY" means the Company or any other member of the Group.
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"INTELLECTUAL PROPERTY RIGHT" means any trademark, service mark, trade
name, invention, patent, trade secret, copyright, know-how (including any
registrations or applications for registration of any of the foregoing) or any
other similar type of proprietary intellectual property right.
"INVESTOR LETTER" means the Investor Letter to be executed by each
Seller and delivered to Buyer, in substantially the form attached as Exhibit C
hereto.
"LIEN" means, with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest, encumbrance or other adverse claim of
any kind in respect of such property or asset. For the purposes of this
Agreement, a Person shall be deemed to own subject to a Lien any property or
asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such property or asset.
"MANAGEMENT ACCOUNTS" means the unaudited management accounts of the
Company and its principal trading Subsidiaries for the period from January 1,
1996 to April 30, 1996.
"MATERIAL ADVERSE EFFECT" means, with respect to any Person, a
material adverse effect on the condition (financial or otherwise), business,
assets, results of operations or prospects of such Person and its subsidiaries,
if any, taken as a whole.
"MERIT PREFERENCE SHARES" means the 700,000 Cumulative
3
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Redeemable 8% Preference Shares of L1 each in the capital of Merit Direct
Limited and any and all preference shares in the capital of Merit Communications
NV.
"1933 ACT" means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.
"1934 ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"PERMITTED TRANSFEREE" has the meaning given to it in the Registration
Rights Agreement.
"PERSON" means an individual, corporation, limited liability company,
partnership, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"PROPERTIES" means the real property and all interests therein held by
any Group Company brief details of which are set out at Schedule 3.16 and any
part thereof.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement to be dated as of the Completion Date between Buyer and Sellers, in
substantially the form attached as Exhibit A hereto.
"SEC" means the Securities and Exchange Commission.
"SELLER REPRESENTATIVE" means Henk Kruithof, or any other Seller (i)
who is designated by Sellers holding a majority in value of the Buyer Stock as
of the date of such designation and (ii) who is identified to Buyer in a written
notice signed by all Sellers as being the new Seller Representative.
"SHARES" means ordinary 10p shares in the capital of the Company.
"SUBSIDIARIES" means the companies details of which are set out in
Part a of Schedule 3.7.
"SUBSIDIARY" and "SUBSIDIARIES" shall be construed in accordance with
sections 736 and 736A of the Companies Act.
"SUBSIDIARY UNDERTAKING" shall be construed in accordance with section
258 of the Companies Act.
4
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"TAX" and "TAX AUTHORITY" have the meanings given to them in the Tax
Covenant.
"TAX COVENANT" means the Tax Covenant to be executed by the
Covenantors (as defined therein) and the Buyer, in substantially the form
attached as Exhibit D hereto.
"TAXES ACT" means the Income and Corporation Taxes Act 1988.
"WARRANTIES" means the representations and warranties on the part of
Sellers set out in Articles 3 and 8.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
---- -------
Act 12.8
Actual Knowledge 9.2
Agreement Preamble
Buyer Preamble
Buyer's SEC Documents 4.6
Buyer Stockholder Approvals 6.1
Buyer Stockholder Meeting 6.1
Client Contract 3.12
Company Preamble
Company Intellectual Property Rights 3.17(b)
Company Securities 3.5(b)
Competing Business 7.4
Completion 2.2
ERISA 8.1(h)
Escrow Agent 2.2(d)
Escrow Agreement 2.2(d)
Indemnified Party 10.3
Indemnifying Party 10.3
Pension Scheme 8.1(h)
Planning Legislation 3.16(l)
Permits 3.19
RTPA Agreement 12.8
Sellers Preamble
Subsidiary Securities 3.7(b)
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(c) Any reference to a document "in the agreed form" is to the form
of the relevant document agreed between the parties and for the purposes of
identification initialled by each of them or on their behalf (in each case with
such amendments as may be agreed by or on behalf of the parties.)
ARTICLE 2
PURCHASE AND SALE
2.1 PURCHASE AND SALE. Upon the terms and subject to the conditions
of this Agreement, (a) each Seller agrees to sell to Buyer with full title
guarantee and Buyer agrees to purchase from such Seller, the number of Shares
set forth opposite such Seller's name on Schedule 2.1 under the heading "Number
of Company Shares" in exchange for the number of shares of Buyer Stock set forth
opposite such Seller's name on Schedule 2.1 under the heading "Purchase
Consideration".
2.2 COMPLETION. (a) The completion (the "Completion") of the purchase
and sale shall take place at the offices of Davis Polk & Wardwell, 1 Frederick's
Place, London, England as soon as possible, but in no event later than 10
Business Days, after satisfaction of the conditions set forth in Article 9
hereof, or at such other time or place as Buyer and the Seller Representative
may agree. The events contained in the following provisions of this Article 2
shall take place at the Completion:
(b) The Sellers shall deliver (or cause to be delivered) to the
Buyer:
(i) in respect of each of the Sellers, a duly executed
transfer into the name of the Buyer or its nominee in respect of the number
of Shares set out opposite that Seller's name in Schedule 2.1, together
with the relative share certificates therefor;
(ii) share certificates in respect of all the issued shares in
the capital of each of the Subsidiaries, together with duly executed
transfers into the name of the Buyer or its nominee in respect of any
shares in such Subsidiaries not held in the name of a Group Company;
(iii) an original of the Tax Covenant duly executed by the
Sellers;
(iv) the Certificates of Incorporation, Common Seal, Share
Register and Share Certificate Book (with any unissued share certificates)
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and all minute books and other statutory books (which shall be written-up
to but not including Completion) of the Company and of each Group Company;
and
(v) all such other documents (including any necessary waivers
of pre-emption rights or other consents) as may be required to enable the
Buyer and/or its nominees to be registered as the holder(s) of the Shares.
(c) The Sellers shall procure that resolutions of the boards of
directors of each Group Company are passed by which the following business is
transacted:
(i) the registration (subject to their being duly stamped) of
the transfers in respect of the Shares referred to in clause (b) of this
Section 2.2 is approved; and
(ii) such persons as are nominated by the Buyer are appointed
as directors and/or secretary of each Group Company.
(d) The Buyer shall:
(i) deliver to each Seller one or more certificates for the
shares of Buyer Stock to be issued to such Seller subject to clause (ii) of
this Section 2.2(d) in accordance with Article 2.1, registered in the name
of such Seller;
(ii) deliver to the Escrow Agent one or more certificates for
such number of shares of Buyer Stock, with respect to each Seller, as
represents 10% of the number of shares of Buyer Stock set forth opposite
such Seller's name on Schedule 2.1, for deposit pursuant to an Escrow
Agreement in substantially the form attached as Exhibit B hereto (the
"Escrow Agreement").
(iii) deliver to the Sellers an original of the Tax Covenant
duly executed as a deed by the Buyer;
(e) If the Sellers or any of them fail or are unable to perform any
material obligation required to be performed by the Sellers or any of them
pursuant to Article 2.2 by November 30, 1996, the Buyer shall not be obliged to
complete the sale and purchase of the Shares and may, in its absolute
discretion, by written notice to the Sellers:
7
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(i) rescind this Agreement without liability on the part of
the Buyer; or
(ii) elect to proceed with the Completion on that date, to the
extent that the Sellers are ready, able and willing to do so, and specify a
later date on which the Sellers shall be obliged to complete the
outstanding obligations of the Sellers PROVIDED THAT in such event the
Sellers shall not incur any liability to the Buyer if Sellers shall perform
their obligations by the said later date; or
(iii) elect to defer the Completion by not more than thirty (30)
Business Days to such other date as it may specify in such notice, in which
event the provisions of this Section 2.2 shall apply, mutatis mutandis, if
the Sellers fail or are unable to perform any such obligations on such
other date, but the Sellers shall not incur any further liability to the
Buyer as a result thereof.
2.3 LEGENDING OF SECURITIES. Each certificate representing shares of
Buyer Stock to be issued pursuant to this Agreement shall bear the legend set
forth in paragraph (5) of Exhibit C.
2.4 ESCROW ACCOUNT. Sellers agree that, notwithstanding any
investigation of the business of the Company made by or on behalf of Buyer, at
the Completion 10% of the shares of Buyer Stock shall be delivered by Buyer to
the Escrow Agent for deposit in accordance with the terms of the Escrow
Agreement. All shares of Buyer Stock deposited with the Escrow Agent shall be
applied by the Escrow Agent in accordance with the terms of the Escrow Agreement
to pay to Buyer any amounts owing to Buyer under this Agreement. Any shares of
Buyer Stock remaining on deposit with the Escrow Agent on the Expiration Date
shall be distributed by the Escrow Agent to Sellers, except as otherwise
provided in the Escrow Agreement.
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ARTICLE 3
WARRANTIES OF THE SELLERS
Subject to the provisions of Article 10 of this Agreement, each Seller
warrants to Buyer as to itself and as to the Company, as of the date hereof and
as at the Completion Date that:
3.1 CORPORATE EXISTENCE AND POWER. The Company is a public limited
company validly existing under the laws of England and Wales and has all
corporate powers and all governmental licenses, authorizations, permits,
consents and approvals required to carry on its business as now conducted. The
Company is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where such qualification is necessary, except
where the failure to be so qualified has not had, and would not reasonably be
expected to have, a Material Adverse Effect on the Company. There are attached
to the Disclosure Letter true and complete copies of the memorandum and articles
of association of the Company as currently in effect.
3.2 AUTHORIZATION. As to each Seller, (i) the execution, delivery
and performance by such Seller of this Agreement are within such Seller's power,
authority and legal right and (ii) this Agreement constitutes a valid and
binding agreement of such Seller enforceable in accordance with its terms,
except as (A) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (B) the availability of equitable remedies may
be limited by equitable principles of general applicability.
3.3 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by the Company and Sellers of this Agreement require no action by or
in respect of, or filing with, any governmental body, agency or official other
than compliance with any applicable requirements of the HSR Act and the waiver
by the Panel on Takeovers and Mergers of the City Code on Takeovers and Mergers.
3.4 NON-CONTRAVENTION. The execution, delivery and performance of
this Agreement by the Company and Sellers do not and will not (A) violate the
memorandum and articles of association of the Company,(B) assuming compliance
with the matters referred to in Section 3.3, violate any applicable law, rule,
regulation, judgment, injunction, order or decree,(C) require any consent or
other action by any Person under, constitute a default under, or give rise to
any right of termination, cancellation or acceleration of any right or
obligation of the Company or any Seller or to a loss of any benefit to which the
Company or any Seller is entitled under, any agreement or other instrument
binding upon the Company or
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any Seller or any license, franchise, permit or other similar authorization held
by the Company or any Seller or (D) result in the creation or imposition of any
Lien on any asset of the Company or any Seller.
3.5 CAPITALIZATION. (a) The authorized capital of the Company
consists of 15,000,000 Shares, of which 13,595,140 Shares are issued and 350,000
Company Preferred Shares, of which 350,000 Company Preferred Shares are issued
and 444,000 Redeemable Preference Shares of L1 each all of which have been
redeemed. The name of each Seller and the number of Shares owned by such Seller
are set forth on Schedule 2.1.
(b) All issued shares of the Company have been duly issued and are
fully paid. Except as disclosed in Schedule 2.1, there are no issued (A) shares
or other voting securities of the Company, (B) securities of the Company
convertible into or exchangeable for shares or voting securities of the Company
or (C) options or other rights to acquire from the Company or other obligation
of the Company to issue, any shares, voting securities or securities convertible
into or exchangeable for shares or voting securities of the Company (the items
in clauses (A), (B) and (C) being referred to collectively as the "Company
Securities"). There are no outstanding obligations of the Company to issue,
repurchase, redeem or otherwise acquire, or make any payment in respect of, any
Company Securities.
3.6 OWNERSHIP OF SHARES. Each Seller is the sole legal and
beneficial owner of the number of Shares set forth opposite such Seller's name
on Schedule 2.1, free and clear of any Lien and any other limitation or
restriction (including any restriction on the right to vote, sell or otherwise
dispose of such Shares), and will transfer and deliver to Buyer at the
Completion valid title to such Shares free and clear of any Lien and any such
limitation or restriction.
3.7 SUBSIDIARIES AND JOINT VENTURES. (a) All subsidiaries of the
Company are listed on Schedule 3.7. Each Subsidiary is duly incorporated under
the laws of its jurisdiction of incorporation, has all corporate or other powers
and all governmental licenses, authorizations, permits, consents and approvals
required to carry on its business as now conducted, is duly qualified to do
business as a foreign corporation or other entity in each jurisdiction where
such qualification is necessary.
(b) All of the issued shares of, or other voting securities in, each
Subsidiary, are owned by the Company, directly or indirectly, free and clear of
any Lien and free of any other limitation or restriction (including any
restriction on the right to vote, sell or otherwise dispose of such shares or
other voting securities). There are no issued (i) securities of the Company or
any Subsidiary convertible into
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or exchangeable for shares or other voting securities in any Subsidiary or (ii)
options or other rights to acquire from the Company or any Subsidiary, or other
obligation of the Company or any Subsidiary to issue, any shares or other voting
securities in, or any securities convertible into or exchangeable for any shares
or other voting securities in, any Subsidiary (the items in clauses (i) and (ii)
being referred to collectively as the "Subsidiary Securities"). Save in respect
of the Merit Preference Shares, there are no outstanding obligations of the
Company or any Subsidiary to repurchase, redeem or otherwise acquire any shares
in any Subsidiary.
3.8 FINANCIAL STATEMENTS. (a) The Financial Statements present
fairly, in all material respects, the consolidated financial position of the
Company and the Subsidiaries as of the Balance Sheet Date thereof and their
consolidated results of operations and changes in consolidated financial
position for the periods then ended in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis.
(b) MANAGEMENT ACCOUNTS. The Management Accounts are unaudited but
have been prepared in good faith, and are not materially inaccurate in the
context of the Group as a whole.
3.9 ABSENCE OF CERTAIN CHANGES. Except as set forth in the
Disclosure Letter and except as contemplated by this Agreement, since the
Balance Sheet Date, the business of the Company and its Subsidiaries has been
conducted in the ordinary course consistent with past practices and since that
date there has not been:
(i) as far as the Sellers are aware, any event,
occurrence, development or state of circumstances or facts which has
had or could reasonably be expected to have a Material Adverse Effect
on the Company;
(ii) any declaration, setting aside or payment of any
dividend or other distribution with respect to any shares of capital
stock of the Company, or any repurchase, redemption or other
acquisition by the Company or any Subsidiary of any outstanding shares
or other securities of, the Company or any Subsidiary;
(iii) any amendment of any term of any outstanding security
of the Company or any Subsidiary;
(iv) any incurrence, assumption or guarantee by the
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Company or any Subsidiary of any indebtedness for borrowed money other than
in the ordinary course of business consistent with past practices;
(v) any creation or assumption by the Company or any
Subsidiary of any Lien on any material asset other than in the
ordinary course of business consistent with past practices;
(vi) any making of any loan, advance or capital
contributions to or investment in any Person, other than loans,
advances or capital contributions to or investments in wholly-owned
Subsidiaries made in the ordinary course of business consistent with
past practices;
(vii) any damage, destruction or other casualty loss
(whether or not covered by insurance) affecting the business or assets
of the Company which, individually or in the aggregate, has had or
could reasonably be expected to have a Material Adverse Effect on the
Company;
(viii) any transaction or commitment made, or any contract
or agreement entered into, by the Company or any Subsidiary relating
to its assets or business or any relinquishment by the Company or any
Subsidiary of any contract or other right, in either case, material to
the Company and the Subsidiaries, taken as a whole, other than
transactions and commitments in the ordinary course of business
consistent with past practices and those contemplated by this
Agreement;
(ix) any change in any method of accounting or accounting
practice by the Company or any Subsidiary;
(x) any (A) employment, deferred compensation, severance,
retirement or other similar agreement entered into with any director,
officer or employee of the Company or any Subsidiary (or any amendment
to any such existing agreement),(B) grant of any severance or
termination pay to any director, officer or employee of the Company or
any Subsidiary or (C)change in compensation or other benefits payable
to any director, officer or employee of the Company or any Subsidiary
pursuant to any severance or retirement plans or policies thereof, in
any case having a value in excess of L30,000; or
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(xi) any labor dispute, other than routine individual
grievances and disputes not affecting a material number or category of
employees, or any activity or proceeding by a trade union or
representative thereof to organize any employees of the Company or any
Subsidiary, which employees were not subject to a collective
bargaining agreement at the Balance Sheet Date, or any lockouts,
strikes, slowdowns, work stoppages or threats thereof by or with
respect to any employees of the Company or any Subsidiary.
3.10 NO UNDISCLOSED MATERIAL LIABILITIES. There are no liabilities
of the Company or any Subsidiary of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, and there is no
existing condition, situation or set of circumstances which could reasonably be
expected to result in such a liability, other than:
(i) liabilities provided for in the Balance Sheet or
disclosed in the notes thereto;
(ii) liabilities provided for or disclosed in the Management
Accounts;
(iii) liabilities disclosed in the Disclosure Letter; and
(iv) other undisclosed liabilities which, individually or
in the aggregate, are not material to the Company and the
Subsidiaries, taken as a whole.
3.11 RELATED PARTY TRANSACTIONS. The Disclosure Letter contains a
complete list of all amounts greater than L20,000 owed by or to the Company on
the Balance Sheet Date in respect of any contract, arrangement or transaction
between (a) a Seller and the Company or (b) any Affiliate of such Seller, any
relative of such Seller or any known Affiliate of any relative of such Seller
and the Company. Since the Balance Sheet Date, there has not been any accrual
of liability in an amount greater than L20,000 by the Company to such Seller,
any of its Affiliates, any relative of such Seller or any Affiliate of any
relative of such Seller or other transaction between the Company and such Seller
and any of such Seller's Affiliates, any relative of such Seller or any
Affiliate of any relative of such Seller.
3.12 CONTRACTS WITH CLIENTS. The Company has previously delivered to
the Chief Financial Officer of Buyer a schedule setting forth each contract or
agreement, and all amendments thereto, and the fee arrangements thereunder
(whether payable on a retainer basis, based on performance or otherwise), in
effect
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on the date hereof relating to the Company's rendering of services to its
clients or customers in respect of which the Sellers believe (but do not
warrant) that the total amount invoiced to the client or customer by the Company
and/or the Subsidiaries in the calendar year 1996 will be in excess of L1
million exclusive of Value Added Tax (the "Client Contracts"). The Company and
the Subsidiaries are in material compliance with the terms of each Client
Contract, and each Client Contract is in full force and effect with respect to
the applicable client or customer. Neither the Company nor any Subsidiary nor
any Seller has received any notice (whether formal or informal) that any client
or customer desires to terminate or not renew any Client Contract, and neither
the Company nor any Subsidiary nor any Seller has any reason to believe that any
client or customer will seek to terminate any Client Contract. There are no
other terms, oral or otherwise, that modify the terms of any Client Contract in
any way that could materially and adversely affect the value to Buyer of such
Client Contract. No Client Contract requires consent, notification or other
action to remain in full force and effect following completion.
3.13 OTHER MATERIAL CONTRACTS. (a) Except as set forth in the
Disclosure Letter or Schedule 3.16 and except for the contracts and agreements
referred to in Section 3.12, neither the Company nor any Subsidiary, nor, in the
case of clause (vii) of this Section 3.13(a), any Seller is a party to or bound
by:
(i) any lease of real or personal property providing for
annual rentals of L50,000 or more;
(ii) any agreement for the purchase of materials,
supplies, goods, services, equipment or other assets that provides for
either (A) annual payments by the Company and the Subsidiaries of
L50,000 or more or (B) aggregate payments by the Company and the
Subsidiaries of L100,000 or more;
(iii) any partnership, joint venture or other similar
agreement or arrangement;
(iv) any agreement in respect of which any obligation of
the Company or any Subsidiary remains outstanding relating to the
acquisition or disposition of any business (whether by merger, sale of
stock, sale of assets or otherwise);
(v) any agreement relating to indebtedness for borrowed
money or the deferred purchase price of property (in either case,
whether incurred, assumed, guaranteed or secured by any asset), except
any such agreement (A) with an aggregate outstanding
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principal amount not exceeding L100,000 and which may be prepaid on not more
than 30 days notice without the payment of any penalty and (B) entered into
subsequent to the date of this Agreement as permitted by Section 3.9(iv);
(vi) any license, franchise or similar agreement other
than software licences entered into in the ordinary course of
business;
(vii) any agreement that limits the freedom of the Company,
any Subsidiary or any Seller to compete in any line of business or
with any Person or in any area or which would so limit the freedom of
the Company, any Subsidiary or any Seller after the Completion Date;
or
(viii) any other agreement, commitment, arrangement or plan not
made in the ordinary course of business that is material to the Company and
the Subsidiaries, taken as a whole.
(b) Each agreement, commitment, arrangement or plan disclosed in any
Schedule to this Agreement or required to be disclosed pursuant to this Section
3.13 is a valid and binding agreement of the Company, a Subsidiary or a Seller,
as the case may be, and is in full force and effect, and neither the Company nor
any Subsidiary, nor so far as the Sellers are aware any other party thereto, is
in default or breach in any material respect under the terms of any such
agreement, contract, plan, lease, arrangement or commitments as to have a
Material Adverse Effect on the Company or the Group, taken as a whole.
3.14 LITIGATION. (a) There is no action, suit, investigation or
proceeding pending against, or to the knowledge of any Seller threatened against
or affecting, such Seller or any of such Seller's property before any court or
arbitrator or any governmental body, agency or official which, if determined or
resolved adversely to any Seller in accordance with the plaintiffs' demands,
would reasonably be expected to have a Material Adverse Effect on Buyer, the
Company or any Subsidiary, or which in any manner challenges or seeks to
prevent, enjoin, alter or materially delay the transactions contemplated hereby.
(b) There is no action, suit, investigation or proceeding pending
against, or to the knowledge of any Seller threatened against or affecting, the
Company or any Subsidiary or any of the Properties before any court or
arbitrator or any governmental body, agency or official.
3.15 COMPLIANCE WITH LAWS AND COURT ORDERS; NO DEFAULTS. (a)
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Neither the Company nor any Subsidiary is in material violation of, and has not
since December 31, 1992 violated in any manner, any applicable law, rule,
regulation, judgment, injunction, order or decree such as would have a Material
Adverse Effect on the Company or the Group, taken as a whole.
(b) Neither the Company nor any Subsidiary is in default under, and
no condition exists that with notice or lapse of time or both would constitute a
default under, any agreement or other instrument binding upon the Company or any
Subsidiary or any Permit, other than a default that would not reasonably be
expected to have a Material Adverse Effect on the Company or the Group taken as
a whole.
3.16 PROPERTIES. (a) The Properties comprise all the land and
buildings owned, occupied or used by the Company and any of its Subsidiaries or
in which the Company and any of its Subsidiaries has any right, interest or
liability whether actual or contingent and whether as an owner or original
contracting party or as a guarantor of any party or by other contractual
relationship.
(b) The information in respect of the Properties set out in Schedule
3.16 is true, complete and accurate and not misleading in any respect.
(c) The Company or one of its Subsidiaries is in possession of the
whole of each of the Properties, none of which is vacant, and no other person is
in or entitled to occupation of any of the Properties.
(d) The Company or a wholly-owned subsidiary of it has good and
marketable title to each of the Properties, which has, where necessary, been
registered with the relevant authorities, and all relevant deeds and documents
are in its possession or under its control.
(e) No person has or claims a Lien over any of the Properties or any
relevant deeds or documents.
(f) The Company or one of its Subsidiaries is the sole legal and
beneficial owner of and otherwise absolutely entitled to each of the Properties
and such of the fixtures, plant and equipment at the Properties which are owned
by the tenants of the Properties are owned absolutely by the Company or one of
its Subsidiaries free from any encumbrance.
(g) Except as specified in Schedule 3.16, the Company's or relevant
Subsidiary's title to each of the Properties is not subject (or likely to become
subject) to any matter which might adversely affect:
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(i) the Company's or relevant Subsidiary's ability to continue
to carry on its existing business from the relevant Property at the same
cost; or
(ii) the value of the relevant Property
and neither the Company nor any of its Subsidiaries is, or is alleged to be in
breach of any covenant, restriction or other obligation (whether statutory or
otherwise) affecting any of the Properties or the conduct of the existing
business at or from the Properties.
(h) Each Property benefits from all rights, easements and other
facilities (if any) necessary or desirable, and on reasonable terms, for the
continued use, enjoyment and maintenance of the relevant Property by the Company
for the purpose of its existing business carried on at or from the relevant
Property and for the compliance with any obligations relating to the relevant
Property (whether statutory or otherwise).
(i) The Properties are not subject to the payment of any outgoings,
nor is the Company or any of its Subsidiaries actually or contingently liable to
pay any sums in relation to a Property other than the usual rates and taxes and,
in the case of leaseholds, the rent and other outgoings (if any) specified in
Schedule 3.16.
(j) There is no outstanding liability for any rent, rates or taxes in
respect of any of the Properties.
(k) So far as the Sellers are aware, there are no current, contingent
or anticipated notices, actions, disputes, complaints, liabilities, claims or
demands relating to or in respect of the Properties or their use, nor are there
any circumstances rendering any of the foregoing likely.
(l) So far as the Sellers are aware, the Properties and all uses of
and developments on the Properties comply with all planning legislation and any
legislation intended to control or regulate the construction, demolition,
alteration or use of land or buildings or to preserve or protect the national
heritage and any orders, regulations, consents or permissions made or granted
under any of the same ("Planning Legislation").
(m) So far as the Sellers are aware, no planning permission or land
use authorization in respect of any of the Properties is for a limited period or
personal, and there are no other unusual or onerous planning conditions.
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(n) So far as the Sellers are aware, all Planning Legislation and
planning conditions in respect of any of the Properties have been complied with
to date, and there is no reason why the same should not continue to be complied
with.
(o) Neither the Company nor any of its Subsidiaries is for any reason
anticipating the expenditure of any material sum of money in respect of any of
the Properties.
(p) So far as the Sellers are aware, there is no resolution or
proposal for the compulsory acquisition of the Properties or any means of access
thereto or egress therefrom.
(q) The buildings and other structures on the Properties, none of
which has been erected or materially altered within the last six (6) years, are
in good and substantial repair and fit for the purposes for which they are
presently used.
(r) In relation to such of the Properties as are leasehold:
(i) all covenants, conditions and agreements contained in the
relevant leases, on the part of the landlord and the tenant, have been
complied with;
(ii) there has been no complaint alleging any breach or any
refusal to accept rent;
(iii) no rent is or should be currently under review;
(iv) there are no current notices given by the landlord or the
tenant or proceedings pursuant to the Landlord and Tenant Act 1954 or
otherwise;
(v) the security of tenure provisions of Part II of the
Landlord and Tenant Act 1954 are not excluded;
(vi) none of the leases, other than leases at a full rack rent,
contains any provisions for forfeiture on insolvency or liquidation or any
prohibition against or requirement to obtain landlord's consent for
charging or assignment;
(vii) none of the leases requires the tenant to offer to
surrender
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the same before or as a pre-condition of an assignment or under-letting or
contains requirements to be satisfied on a change of ownership of the share
capital or control of the tenant;
(viii) So far as Sellers are aware any consents required for the
granting of any of the leases were duly obtained.
3.17 INTELLECTUAL PROPERTY. (a) The Company and the Subsidiaries are
the owners or licensees of all the Intellectual Property Rights reasonably
required by them for the purposes of their respective businesses.
(b)(i) Since December 31, 1992, neither the Company nor any Subsidiary
has been a defendant in any action, suit, investigation or proceeding relating
to, or otherwise has been notified of, any alleged claim or infringement of any
Intellectual Property Rights, and Sellers have no knowledge of any such
infringement by the Company, and (ii) Sellers have no knowledge of any
continuing infringement by any other Person of any Intellectual Property Rights
held for use by the Company or any Subsidiary ("Company Intellectual Property
Rights"). No Company Intellectual Property Right is subject to any outstanding
judgment, injunction, order, decree or agreement restricting the use thereof by
the Company or restricting the licensing thereof by the Company to any Person.
The Company has not entered into any agreement to indemnify any other Person
against any charge of infringement of any Intellectual Property Right.
3.18 INSURANCE COVERAGE. The Company has furnished to Buyer a list of
all insurance relating to the assets, Properties, business, operations,
employees, officers or directors of the Company or any Subsidiary. There is no
claim by the Company or any Subsidiary pending under any of such policies or
bonds relating to such insurance as to which coverage has been questioned,
denied or disputed by the underwriters of such policies or bonds or in respect
of which such underwriters have reserved their rights. All premiums payable
under all such policies and bonds have been paid timely and the Company and its
Subsidiaries and any other person having an interest in such policies and bonds
have otherwise complied fully with the terms and conditions of all such policies
and bonds. Such policies of insurance and bonds (or other policies and bonds
providing substantially similar insurance coverage) remain in full force and
effect. Such policies and bonds are of the type and in amounts customarily
carried by Persons conducting businesses similar to those of the Company or any
Subsidiary. The Company does not know of any threatened termination of, premium
increase with respect to, or material alteration of coverage under, any of such
policies or bonds. After the Completion, the Company and its Subsidiaries and
Affiliates shall continue to have coverage under such policies and bonds with
respect to events occurring prior to the Completion.
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3.19 LICENSES AND PERMITS. Each material license (excluding software
licences entered into in the ordinary course of business), franchise, permit or
other similar authorization of the Company affecting, or relating in any way to,
the assets, the Properties or business of the Company and its Subsidiaries (the
"Permits") is valid and in full force and effect and none of the Permits will be
terminated or impaired or become terminable, in whole or in part, as a result of
the transactions contemplated hereby.
3.20 FINDERS' FEES. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of the Company, any Subsidiary or any Seller and which might be entitled to any
fee or commission in connection with the transactions contemplated by this
Agreement.
3.21 ENVIRONMENTAL MATTERS. Other than such as would not have a
Material Adverse Effect on the Company or any Subsidiary:
(a) Each Group Company has all Environmental Permits required.
(b) Each such Environmental Permit is in full force and effect.
(c) No proceeding or other action of whatever nature is pending, or
so far as the Sellers are aware is either threatened or under consideration
seeking the suspension, revocation, variation, limitation of or otherwise
relating to any Environmental Permit or seeking to impose any penalty under any
Environmental Permit or Environmental Laws.
(d) There are no facts or circumstances which will or are likely to
result in any Environmental Permit being suspended, revoked, varied or limited
or which may prejudice its renewal.
(e) No appeals are pending or being contemplated in respect of the
refusal of or conditions contained in any Environmental Permit or any action
taken in respect of any Environmental Permit.
(f) No Environmental Permit requires consent, notification or other
action to remain in full force and effect following Completion.
(g) The Sellers do not have reason to believe that those
Environmental Permits which have not yet been granted and are pending will not
be granted within a reasonable period of time.
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3.22 COMPLIANCE WITH ENVIRONMENTAL PERMITS AND ENVIRONMENTAL LAWS. (a)
Each Group Company is and, so far as the Sellers are aware, always has been in
full compliance with the Environmental Permits and Environmental Laws and, so
far as the Sellers are aware, the existence and use of all the Properties and
the machinery and other property employed in the conduct of the business of the
Group Company is and, so far as the Sellers are aware, has been in accordance
with the Environmental Permits and Environmental Laws.
(b) No notice, notification, demand, request for information,
citation, summons, complaint or order has been issued, no complaint has been
made, no penalty has been assessed and, so far as the Sellers are aware, no
investigation or review is either pending or threatened, by any governmental
entity or other person with respect to:
(i) any alleged violation by any Group Company of any
Environmental Law including the failure by any Group Company to report to
the proper governmental entity the occurrence of any event which is
required to be so reported by any Environmental Law; or
(ii) any alleged failure by any Group Company to have or to
operate in compliance with any Environmental Permit; or
(iii) any of the Properties.
(c) There are in relation to the business of any Group Company and
the Properties no past or present events, conditions, circumstances, activities,
practices, incidents, actions or proposals which or which may interfere with or
prevent compliance with any Environmental Law or Environmental Permit, or which
or which may give rise to any common law or legal liability or otherwise form
the basis of any claim, action, suit, proceeding, hearing or investigation
related to Environmental Matters.
(d) There is not currently and there has not been on, into or from
any of the Properties any spill, leakage, discharge, release, emission,
injection, escape or deposit of any kind (whether to air, water (including
underground water and the sea), sewage systems and land or a combination of
these) of any substance, fluid, gas, vapor or form of energy which may cause
harm to humans, flora or fauna or which may give rise to any third party
liability or which may inhibit or restrict or make materially more costly any
redevelopment of any of the Properties or any part thereof by reason of
contamination or otherwise.
(e) So far as the Sellers are aware none of the Properties have been
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used at any time by any person for any of the potentially contaminative use.
(f) There are no underground storage tanks or vessels (whether used
or disused) located on any of the Properties.
(g) At Completion, no Group Company will have any indebtedness,
obligation or liability, absolute or contingent with respect to the storage,
treatment, clean-up, disposal, containment or other remediation of any land or
substance (including, without limitation, any such indebtedness, obligation or
liability in respect of any Environmental Law regarding such storage, treatment,
clean-up, disposal, containment or other remediation or any changes in such
Environmental Law adopted but not yet effective).
3.23 ENVIRONMENTAL AUDIT. Neither the business of any Group Company
nor, so far as the Sellers are aware, any of the Properties has been the subject
of any environmental audit or review.
3.24 SELLERS' INVESTMENT PURPOSES. Each Seller agrees to deliver by
Completion a letter to Buyer in the form of Exhibit C hereto with regard to each
Seller's investment purposes.
3.25 COMPETITION AND FAIR TRADING LAWS. (a) No Group Company is a
party to (or is concerned in) any agreement, arrangement, concerted practice or
course of conduct which (i) is registrable under the provisions of the
Restrictive Trade Practices Act 1976 (as amended); or (ii) contravenes the
provisions of the Resale Prices Act 1976; or (iii) falls within Article 85
and/or Article 86 of the Treaty of Rome; or (iv) falls within Article 53 and/or
Article 54 of the Agreement on the European Economic Area; or (v) otherwise
infringes the competition legislation or practice of any other jurisdiction.
(b) No Group Company has received any process, notice or other
communication (formal or informal) by or on behalf of the Office of Fair Trading
(whether under the Fair Trading Act 1973, the Competition Act 1980 or
otherwise), the Monopolies and Mergers Commission, the Secretary of State for
Trade and Industry or the Commission of the European Communities, the EFTA
Surveillance Authority or any other authority having jurisdiction in competition
matters in relation to any aspect of the business of any Group Company or any
agreement, arrangement, concerted practice or course of conduct to which any
Group Company is, or is alleged to be, a party.
(c) No Group Company is involved in any practice or agreement as a
result of which it is likely to receive any such process, notice or
communication
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as is referred to in paragraph (b).
(d) No Group Company is subject to any order or judgment given by any
court or governmental or regulatory authority, or party to any undertaking or
assurance given to any such court or authority, in relation to competition
matter which is still in force.
3.26 RECORDS AND SOFTWARE. (a) All the accounting records and systems
(including but not limited to computerized accounting systems) of the Group are
recorded, stored, maintained or operated or otherwise held by a Group Company
and are not wholly or partly dependent on any facilities or systems which are
not under the exclusive ownership or control of a Group Company.
(b) Each Group Company is licensed to use all software necessary to
enable it to continue to use its computerized records for the foreseeable future
in the same manner in which they have been used prior to the date of this
Agreement and does not, so far as the Sellers are aware, share any user rights
in respect of such software with any other person.
3.27 BUSINESS CONTRACTS. The matters and information contained in
Item K (Business Files Volume II) and Item O paragraphs 1, 2, 5, 7, 9, 10, 11
and 13 (Material Contracts) of Appendix A of the Disclosure Letter consist of
contracts entered into by the relevant Group Company and do not contain any
unusual or materially restrictive provisions, were entered into by the relevant
Group Company in the ordinary and usual course of business consistent with past
practices and all liabilities thereunder have been fully and properly disclosed
in the Financial Statements and the Management Accounts as the case may be.
ARTICLE 4
WARRANTIES OF BUYER
Buyer warrants to Sellers as of the date hereof that:
4.1 CORPORATE EXISTENCE AND POWER. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Minnesota and has all corporate powers and all material governmental
licenses, authorizations, permits, consents and approvals required to carry on
its business as now conducted.
4.2 CORPORATE AUTHORIZATION. The execution, delivery and performance
by Buyer of this Agreement are within the corporate powers of Buyer
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and have been duly authorized by all necessary corporate action on the part of
Buyer. This Agreement constitutes a valid and binding agreement of Buyer
enforceable in accordance with its terms, except as (i) the enforceability
hereof may be limited by bankruptcy, insolvency, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and (ii) the
availability of equitable remedies may be limited by equitable principles of
general applicability.
4.3 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by Buyer of this Agreement require no action by or in respect of, or
filing with, any governmental body, agency or official other than compliance
with any applicable requirements of the HSR Act.
4.4 NON-CONTRAVENTION. The execution, delivery and performance by
Buyer of this Agreement do not and will not (i) violate the certificate and
articles of incorporation or bylaws of Buyer or (ii) assuming compliance with
the matters referred to in Sections 4.2 and 4.3, violate any applicable material
law, rule, regulation, judgment, injunction, order or decree requiring any
consent or other action by any Person.
4.5 BUYER STOCK. At the time of the Completion, the Buyer Stock to
be issued to each Seller hereunder will have been duly authorized and, when
issued and delivered to such Seller pursuant to the Agreement, will have been
validly issued, will be fully paid and nonassessable, and will be free from and
clear of any Lien and any other limitation or restriction (including any
restriction on the right to vote, sell or otherwise dispose of such Buyer Stock)
other than restrictions imposed by the United States securities laws. The
issuance of such Buyer Stock will not give rise to any preemptive or similar
rights.
4.6 BUYER'S SEC REPORTS. Buyer has heretofore delivered to Sellers
true and complete copies of (i) its annual report on Form 10-K for its fiscal
year ended May 31, 1995, (ii) its quarterly report on Form 10-Q for its fiscal
quarter ended February 29, 1996 and (iii) its proxy statements or information
statements relating to meetings of, or actions taken without a meeting by,
Buyer's stockholders held since June 6, 1995 (collectively, "Buyer's SEC
Documents"). As of its filing date, each of Buyer's SEC Documents complied in
all material respects with the requirements of the 1933 Act or the 1934 Act, as
the case may be, and the applicable rules and regulations of the SEC promulgated
thereunder, and did not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading, except that information as of a later date shall be deemed to modify
information as of an earlier date.
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4.7 FINDERS' FEES. Except for Alex. Brown & Sons, whose fees will be
paid by Buyer, there is no investment bank, broker, finder or other intermediary
which has been retained by or is authorized to act on behalf of Buyer who might
be entitled to any fee or commission in connection with the transactions
contemplated by this Agreement.
ARTICLE 5
COVENANTS OF SELLERS
The Sellers agree that they will procure that:
5.1 CONDUCT OF THE COMPANY. (a) From the date hereof until the
Completion Date, that each Group Company shall conduct its business in the
ordinary and usual course consistent with past practices and use its reasonable
efforts to preserve intact the Group Company's business organizations and
relationships with third parties and to keep available the services of the Group
Company's present officers and senior management. Without limiting the
generality of the foregoing, from the date hereof until the Completion Date
without the written consent of Buyer, the Sellers shall procure that:
(i) no Group Company will save as required by this
Agreement adopt or propose any change in its memorandum and articles
of association or bylaws;
(ii) no Group Company will merge or consolidate with any
other Person or acquire a material amount of assets of any other
Person;
(iii) no Group Company will sell, lease, license or
otherwise dispose of any material assets or property except (A)
pursuant to existing contracts or commitments or (B) in the ordinary
course of business consistent with past practices;
(iv) no Group Company will exercise any option to determine
contained in any of the leases of the Properties;
(v) all transactions between any Group Company and any Seller,
any Affiliate of such Seller, any relative of such Seller or any Affiliate
of any relative of such Seller shall be on arm's length terms;
(vi) save in respect of the Company Preferred Shares and the
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Merit Preference Shares no dividend or other distribution (within the
meaning of Section 209 of the Taxes Act), shall be declared, paid or made
by any Group Company;
(vii) no Group Company will set aside or pay any amount to any
Seller, any Affiliate of such Seller, any relative of such Seller or any
Affiliate of any relative of such Seller, other than any amount paid to
such Persons in the ordinary course in their capacity as directors or
employees, or paid in connection with the redemption of the Company
Preferred Shares and the Merit Preference Shares pursuant to Section 5.7;
(viii) no shares or loan capital shall be allotted or
issued, or agreed to be allotted or issued, by any Group Company;
(ix) no Group Company will split, consolidate or
reclassify, or take any other similar action with respect to, any of
its capital shares;
(x) no change shall be made in terms of employment,
including pension fund commitments, by any Group Company (other than
those required by law) which could increase the total staff costs of
the Group by more than an aggregate of 10% per annum or the
remuneration of any one director or employee by more than 10% per
annum;
(xi) save in the ordinary course of business and consistent
with past practices, the amount of indebtedness owed by any Group Company
to any Person as at the date hereof shall not be increased and save as
aforesaid no new indebtedness owed by any Group Company to another Person
shall be entered into by any Group Company;
(xii) save in the ordinary course of business and
consistent with past practices, the amount of any indebtedness owed by
any Group Company to any other Group Company as at the date hereof
shall not be increased and save as aforesaid no new indebtedness owed
by any Group Company to another Group Company shall be entered into by
any Group Company;
(xiii) save in the ordinary course of business and
consistent with past practices, the liability of any Group Company
under any guarantees given by itself on behalf of another Group
Company existing at the date hereof shall not be increased or
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extended and save as aforesaid no new guarantees given by any Group Company on
behalf of another Group Company shall be entered into by any Group Company;
(xiv) no action shall be taken by any member of the Group
which is inconsistent with the provisions of this Agreement or the
consummation of the transactions contemplated by this Agreement; and
(xv) the Company and Sellers will not agree or commit to do
any of the foregoing.
(b) Prior to or as of the Completion Date, the memorandum and
articles of association of the Company shall be amended so as to eliminate any
special rights in favor of current shareholders of the Company.
The Company and Sellers will not do, allow or procure any action or omission
which would constitute or give rise to a breach of Warranty if the Warranties
were to be repeated on or at any time before the Completion Date by reference to
the facts and circumstances then existing.
5.2 CONTRACTS. From the date hereof until the Completion Date, the
Sellers shall ensure that the Company consults fully with the Buyer in relation
to any matters which may have a material effect upon the Group and that, without
the prior consent of the Buyer, no Group Company shall:
(a) enter into any contract or commitment (or make a bid or offer
which may lead to a contract or commitment) other than in the ordinary course of
business and consistent with past practices, or enter into any contract or
commitment which is of a long term or unusual nature or which could involve an
obligation of a material nature or which may result in any material change in
the nature or scope of the operations of the Group;
(b) agree to any variation of any existing contract to which that
Group Company is a party and which may have a material effect upon the nature or
scope of the operations of the Group; or
(c) (whether in the ordinary and usual course of business or
otherwise) acquire or dispose of, or agree to acquire or dispose of, any
business or any asset having a value in excess of L100,000.
5.3 ACCESS TO INFORMATION. From the date hereof until the
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Completion Date, the Company and Sellers will (i) give Buyer, its counsel,
financial advisors, auditors and other authorized representatives full access to
the offices, properties, personnel, books and records of the Company and its
Subsidiaries and to the books and records of any Seller relating to the business
or operations of the Company and its Subsidiaries (including, without
limitation, all statutory books, leases, contracts, supplier lists and customer
lists) together with the right to take copies,(ii) furnish to Buyer, its
counsel, financial advisors, auditors and other authorized representatives such
financial and operating data and other information relating to the Company and
its Subsidiaries as such Persons may reasonably request and (iii) instruct the
employees, counsel and financial advisors of the Company and its Subsidiaries or
any Seller to cooperate with Buyer, at Buyer's cost, in its investigation of the
business of the Company or any Subsidiary. No investigation by Buyer or other
information received by Buyer shall operate as a waiver or otherwise affect any
representation, warranty or agreement given or made by the Company or any Seller
hereunder.
5.4 NOTICES OF CERTAIN EVENTS. The Sellers shall promptly notify
Buyer of:
(i) all relevant information which comes to the notice of
the Company and the Sellers in relation to any fact or matter (whether
existing on or before the date hereof or arising afterwards) which may
constitute a material breach of any Warranty if the Warranties were to
be repeated on or at any time before the Completion Date by reference
to the facts and circumstances then existing;
(ii) any notice or other communication from any Person
alleging that the consent of such Person is or may be required in
connection with the transactions contemplated by this Agreement;
(iii)any notice or other communications from any client or
customer seeking to terminate any contract or agreement with the Company
relating to the rendering of services to such client or customer;
(iv) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement; and
(v) any actions, suits, claims, investigations or
proceedings commenced or, to the knowledge of the Company or any
Seller threatened against, relating to or involving or otherwise
affecting the Company or any Seller that, if pending on the date of
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this Agreement, would have been required to have been disclosed pursuant to
Section 3.14 or that relate to the consummation of the transactions
contemplated by this Agreement.
5.5 CERTAIN ACTIONS. From the date hereof to the earlier of the
termination of this Agreement and the Completion Date, neither the Company nor
any Seller shall, and each of them shall cause their respective representatives
not to, directly or indirectly:
(i) grant any proxies with respect to any Shares to any Person or
enter into any other arrangement or agreement with respect to the voting
thereof;
(ii) in the case of each Seller, sell, transfer or otherwise
dispose of any of such Seller's shares, or permit any Lien to exist on such
Shares; PROVIDED HOWEVER THAT Merit Group NV may transfer the Shares held
by Merit Group NV at the date of this Agreement to the current shareholders
of Merit Group NV, subject to the said shareholders each agreeing to be
bound by the terms of this Agreement in relation to the Shares transferred
to them and their assuming an appropriate proportion of the liability of
Merit Group NV having regard to the proportion of Shares transferred to
them.
5.6 COOPERATION IN PREPARING BUYER PROXY STATEMENT. From the date
hereof until the Completion Date, the Company and Sellers will, at Buyer's cost,
use their best efforts to (i) assist Buyer in the preparation of pro forma
financial statements (ii) prepare and deliver as promptly as practicable an
audited reconciliation from UK GAAP to US GAAP relating to any financial
statements of the Company provided to Buyer; and (iii) furnish to Buyer, its
counsel, financial advisors, auditors and other authorized representatives such
financial statements, financial and operating data and other information, all as
reasonably requested by Buyer in connection with the preparation of the Buyer
Proxy Statement.
5.7 PREFERRED SHARES. Prior to or as of the Completion Date, the
Company will redeem all outstanding Company Preferred Shares and all Merit
Preference Shares.
5.8 RECONCILIATION OF FINANCIAL STATEMENTS. Sellers shall prepare
and deliver, or cause to be prepared and delivered, as promptly as practicable
an audited reconciliation of the Financial Statements from U.K. GAAP to U.S.
GAAP.
5.9 REQUIRED CONSENTS OF ACCOUNTANTS. Sellers shall use their best
efforts to cause KPMG Peat Marwick, independent public accountants, to provide
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to Buyer any consents that may be necessary in connection with the inclusion of
audited financial statements and reconciliations prepared by KPMG Peat Marwick
in the Buyer Proxy Statement.
5.10 TERMINATION OF SHAREHOLDER AGREEMENTS. Prior to the Completion
Date, the Sellers shall cause to be terminated any and all agreements among all
or any of the shareholders of the Company or any Subsidiary (including all
outstanding rights and obligations thereunder) relating to the Shares, the
Company or any Subsidiary other than employment and consultancy arrangements in
the ordinary course of business, and shall provide all waivers and approvals
that may be required in connection therewith in order to consummate the
transactions contemplated by this Agreement.
5.11 STAY BONUS ARRANGEMENTS. Prior to Completion, the Company shall
offer employment agreements to the individuals listed on Schedule A in a form
satisfactory to Buyer and Seller Representative, which employment agreements
will contain stay bonuses in the amounts set forth on Schedule C.
5.12 RESTRICTIONS ON SALE. No Seller who is an Affiliate of Buyer
shall sell any shares of Buyer Stock prior to public release of the results of
the first 30 days of combined operations of Buyer and the Company.
5.13 ASSIGNMENT OF LEASE. Sellers shall procure the assignment by
Merit Training Limited to Merit Direct Limited of the lease of Suite 4 Conrad
House Birmingham Road Stratford upon Avon dated 2 January 1985 and made between
Conrad Construction Limited (1) and Merit Consultants Limited (2) together with
obtaining all necessary consents to such assignment pursuant to the said lease;
5.14 TRANSLATION OF DOCUMENTS. At Buyer's requests and expense
Sellers shall procure the translation into English of the documents contained in
item K (Business Files Volumes II) and item O paragraphs 1, 2, 5, 7, 9, 10, 11
and 13 (Material Contracts) of Appendix A of the Disclosure Letter and shall
provide any further information in relation to such documents or the matters and
information contained therein as the Buyer shall reasonably require.
ARTICLE 6
COVENANTS OF BUYER
Buyer agrees that:
6.1 STOCKHOLDER MEETING; PROXY MATERIAL. Buyer shall cause a
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meeting of its stockholders (the "Buyer Stockholder Meeting") to be duly called
and held as soon as reasonably practicable for the purpose of approving the
purchase of the Shares and the issuance of Buyer Stock in connection therewith
(the "Buyer Stockholder Approvals"). The Directors of Buyer shall, subject to
their fiduciary duties as advised by counsel, recommend such approvals. In
connection with the Buyer Stockholder Meeting, Buyer (a) will as promptly as
reasonably practicable prepare and file with the SEC, will use its reasonable
best efforts to have cleared by the SEC and will thereafter mail to its
stockholders as promptly as practicable the Buyer Proxy Statement and all other
proxy materials for such meeting, (b) will use its reasonable efforts to obtain
the Buyer Stockholder Approvals and (c) will otherwise comply with all legal
requirements applicable to such meeting.
6.2 ACCESS TO RECORDS. Following the Completion, Buyer shall permit
any Seller reasonable access to such records of the Company or any Subsidiary
relating to the operations of the Company or such Subsidiary prior to the
Completion as any Seller may reasonably request for purposes of responding to
tax audits, litigation, or similar situations where such Seller has a reasonable
need for access to such records. Such Seller will use his or her best efforts
to protect the confidentiality of records of the Company or any Subsidiary made
available to him or her.
6.3 DESIGNATION OF DIRECTOR. (a) Buyer shall procure Mr. Henk P.
Kruithof to be nominated at the next annual meeting of Buyer following
Completion as a member of the Board of Directors of Buyer, and shall use all
reasonable efforts to solicit proxies for the election of Mr. Henk P. Kruithof
to the Board of Directors, or in the event of Mr. Kruithof's incapacity, such
other person as Seller Representative shall designate, subject to approval of
such designee by the Board of Directors of Buyer, which approval shall not be
unreasonably withheld.
(b) Buyer's obligations set forth in Section 6.3(a) shall terminate
at such time as Mr. Henk Kruithof shall beneficially own, in the aggregate, less
than 2.5 million shares of the outstanding shares of Buyer Stock, subject to
adjustment for any stock splits or other reclassifications.
6.4 AUDITORS OF THE GROUP. Buyer shall procure that the current
auditors of the Group shall prepare the audited accounts of the Group for the
financial years ending December 31, 1996 and December 31, 1997, unless the
Seller Representative otherwise consents in writing.
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ARTICLE 7
COVENANTS OF BUYER AND SELLERS
Buyer and Sellers agree that:
7.1 BEST EFFORTS. Subject to the terms and conditions of this
Agreement, Buyer and Sellers will take, or cause to be taken, all actions and to
do, or cause to be done, all things reasonably requested by any other party to
consummate as promptly as practicable the transactions contemplated by this
Agreement. Sellers and Buyer agree, and Sellers, prior to the Completion, and
Buyer, after the Completion, agree to cause the Company and each Subsidiary, to
execute and deliver such other documents, certificates, agreements and other
writings and to take such other actions as may be necessary or desirable in
order to consummate or implement expeditiously the transactions contemplated by
this Agreement.
7.2 CERTAIN FILINGS. Buyer and Sellers shall cooperate with one
another (i) in determining whether any action by or in respect of, or filing
with, any governmental body, agency, official or authority is required, or any
actions, consents, approvals or waivers are required to be obtained from parties
to any material contracts or agreements, in connection with the consummation of
the transactions contemplated by this Agreement and (ii) in taking such actions
or making any such filings, furnishing information required in connection
therewith and seeking timely to obtain any such actions, consents, approvals or
waivers.
7.3 PUBLIC ANNOUNCEMENTS. Each party hereto agrees not to issue any
press release or make any public statement with respect to this Agreement or the
transactions contemplated hereby without the prior written consent of (i) Buyer,
in the case of any release issued or public statement by any Seller or, prior to
the Completion, the Company, or (ii) the Seller Representative, in the case of
any release issued or public statement by Buyer or, from and after the
Completion, the Company, in each case, which consent shall not be unreasonably
withheld, except as may be required by applicable law or any listing rules of
any securities exchange.
7.4 RESTRICTIONS ON SELLERS. (a) None of the Sellers shall, and each
of the Sellers shall procure that none of its Affiliates shall, (whether alone
or jointly with another and whether directly or indirectly) carry on or be
engaged or (except as the owner for investment of securities dealt in on a stock
exchange and not exceed 5 per cent in nominal value of the securities of that
class) interested in any Competing Business during a period of three years after
Completion. For this purpose, "Competing Business" means:
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(i) any business carried on by any Group Company as at Completion;
and
(ii) which is carried on within the area in which any Group Company
carries on business as at Completion.
(b) None of the Sellers shall (and each of the Sellers shall procure
that none of its Affiliates shall) within a period of 3 years after Completion,
directly or indirectly, solicit or endeavor to entice away from any Group
Company, offer employment to or employ, or offer or conclude any contract for
services with, any person who was employed by any Group Company in skilled or
managerial work at any time during the 1 year prior to Closing.
(c) Except so far as may be required by law and in the circumstances
only after prior consultation with the Buyer, none of the Sellers shall (and
each of the Sellers shall procure that none of its Affiliates shall) at any time
disclose to any person or use to the detriment of any Group Company any trade
secret or other confidential information of a technical character which it holds
in relation to any Group Company or its affairs.
(d) Each Seller acknowledges and agrees that each of Sections 7.4(a),
(b), (c) and (d) constitutes an entirely separate and independent restriction
and that the duration, extent and application of each restriction are no greater
than is reasonable and necessary for the protection of the interests of the
Buyer but that, if any such restriction shall be adjudged by any court or
authority of competent jurisdiction to be void or unenforceable but would be
valid if part of the wording thereof were to be deleted and/or the period
thereof were to be reduced and/or the area dealt with thereby were to be
reduced, the said restriction shall apply within the jurisdiction of that court
or competent authority with such modifications as are necessary to make it valid
and effective.
7.5 HSR ACT. Buyer and Sellers will make any required filing under
the HSR Act as promptly as practicable.
ARTICLE 8
DIRECTORS, EMPLOYEES AND PENSIONS
Each Seller warrants to Buyer as to itself and as to the Company, as
of the date hereof and as of the Completion Date that:
8.1 DIRECTORS, EMPLOYEES AND PENSIONS. (a) The Disclosure Letter
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discloses] a true and complete list of (i) the names, titles, ages, length of
service, notice period, annual salaries and other compensation and benefits of
all directors and officers of the Company and its Subsidiaries and all other
employees of the Company and its Subsidiaries whose 1995 annual compensation
exceeded L30,000 and (ii) the payroll printout for all other employees of the
Company and its Subsidiaries as at May 1, 1996.
(b) The Disclosure Letter also discloses the existence of all share
incentive schemes, share option schemes or profit sharing, bonus or other
incentive schemes applicable to any of the directors or employees of the Company
or its Subsidiaries.
(c) There are no current recognition, procedural or other agreements
between the Company or any Subsidiary and any trade union or other body
representing its employees or any of them.
(d) None of the persons described in clause (a)(i) has indicated to
any Seller or the Company that he or she intends to resign or retire as a result
of the transactions contemplated by this Agreement or otherwise within one year
after the Closing Date and there is no provision in any contract of employment
or otherwise giving a right or an increased right to any employee of any Company
and its Subsidiaries which may arise on the acquisition of the Shares by the
Buyer under this Agreement or which is contingent on a change of control or
ownership of any Company and its Subsidiaries.
(e) The Company and its Subsidiaries are in compliance with all
currently applicable laws respecting employment and employment practices, terms
and conditions of employment and wages and hours and health and safety at work,
and is not engaged in any unfair working practice, failure to comply with which
or engagement in which, as the case may be, would reasonably be expected to have
a Material Adverse Effect on the Company. There is no complaint, enquiry,
investigation or other preceding pending or, to the knowledge of the Company or
any Seller, threatened against the Company or any Subsidiary by or before the
Industrial Tribunal, the Equal Opportunities Commission, the Commission for
Racial Equality, the Health and Safety Executive or any other court or authority
in relation to any employees of the Company or its Subsidiaries and there are no
matters which could give rise to any such complaint, enquiry, investigation or
proceeding.
(f) All contracts of employment (written or unwritten) with any
director or employee of the Company and its Subsidiaries can be terminated by
three months' notice or less without giving rise to any claim for damages,
severance pay, or compensation (other than a statutory payment or statutory
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compensation for unfair dismissal).
(g) Save as disclosed in the Disclosure Letter neither the Company
nor any Subsidiary has established or become a party to, or has or may have any
liability (actual or contingent, present or future), under or in connection with
any occupational scheme (as defined in section 1 of the Pension Schemes Act
1993) or other scheme, agreement, arrangement or understanding (whether
contractual or otherwise) for the provision or funding of any relevant benefits
(as defined in section 612 (1) of the Income and Corporation Taxes Act 1988 but
as if the exception contained in that section were omitted) for any past or
present officer or employee, or for any dependant of any such person, or any
other person, or has any obligation or liability (actual or contingent, present
or future) to contribute to any personal pension scheme (as defined in section
630 of the Taxes Act) in respect of any person.
(h) Neither the Company nor any Subsidiary sponsors or contributes to
or has at any time sponsored or contributed to, or is obligated or has at any
time been obligated to contribute to, any "employee benefit plan" (within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) other than an employee benefit plan described in Section
4(b)(4) of ERISA.
(i) The Scottish Widows group personal pension scheme in which Merit
Direct Limited participates (the "Pension Scheme") is an approved scheme within
the meaning of Chapter IV of Part XIV of the Income and Corporation Taxes Act
1988; so far as the Sellers are aware, it has at all times complied with and
been duly administered in accordance with all applicable legislation,
regulations and requirements (including, without limitation, the requirements of
the Pension Schemes Office of the Inland Revenue and the Occupational Pensions
Board); and Merit Direct Limited does not and is not required to hold a
contracting-out certificate (within the meaning of section 7 of the Pension
Schemes Act 1993) in respect of the Pension Scheme and nothing has been done or
omitted to be done which will or may result in the Pension Scheme ceasing to be
an approved scheme.
(j) Merit Direct Limited has duly complied with all of its
obligations and duties (including statutory obligations) under and in respect of
the Pension Scheme; all amounts due from Merit Direct Limited to the trustees of
the Pension Scheme and to any insurance company in connection with the Pension
Scheme have been paid; and there are no material actions, suits or claims
pending or threatened in respect of the Pension Scheme (other than routine
claims for benefits).
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(k) All lump sum benefits (other than a refund of contributions with
interest where appropriate) payable under the Pension Scheme on the death of a
member are fully insured.
(l) Merit Direct Limited is liable to contribute to the Pension
Scheme only to the extent set out in the Disclosure Letter and the Pension
Scheme does not provide any benefits other than money purchase benefits (as
defined in section 181 of the Pension Schemes Act 1993) and the lump sum life
assurance benefits described in the Disclosure Letter.
ARTICLE 9
CONDITIONS TO COMPLETION
9.1 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLERS. The obligations
of Buyer and Sellers to consummate the Completion are subject to the
satisfaction of the following conditions at or as of the Completion Date:
(i) No provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation
of the Completion;
(ii) the Buyer Stockholder Approvals shall have been
obtained;
(iii) the Registration Rights Agreement shall have been
executed by Buyer and Sellers;
(iv) the Tax Covenant shall have been executed by Buyer and
the Sellers;
(v) Buyer and Seller Representative shall have received letters
from each of Coopers & Lybrand, LLP, certified public accountants, and KPMG
Peat Marwick, independent public accountants, stating that the purchase of
the Shares will qualify as a pooling of interests transaction for financial
accounting purposes;
(vi) any applicable waiting period under the HSR Act relating to
the issuance of Buyer Stock to any Seller shall have expired;
(vii) Sellers shall have received unconditional clearance
from the Board of the Inland Revenue in respect of the application
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pursuant to Section 138 Taxation of Chargeable Gains Act 1992, which has
been submitted to the Board of Inland Revenue prior to the date hereof; and
(viii) the Buyer shall have received an unconditional waiver by
the Panel on Take-overs and Mergers of the application of the City Code on
Take-overs and Mergers to the transactions contemplated by this Agreement,
which waiver shall not have been withdrawn and shall be in full force and
effect at the time of Completion. This condition precedent shall not be
waivable by either party.
9.2 CONDITIONS TO OBLIGATION OF BUYER. The obligation of Buyer to
consummate the Completion is subject to the satisfaction of the following
further conditions:
(i) Sellers shall have performed in all material respects
all of their respective obligations required to be performed by them
at or prior to the Completion Date;
(ii) Subject as provided in this Agreement, the Warranties
of Sellers contained in this Agreement shall have been true when made
and (except for Warranties which specifically speak as of an earlier
date) shall be true at and as the Completion Date, as if made at and
as of the Completion Date;
(iii) There shall have been no event occurrence, development
or state of circumstances or facts which has had, or will have, a
Material Adverse Effect on the Company;
(iv) the Investor Letter shall have been executed by each
Seller and delivered to Buyer;
(v) Buyer shall have received or be reasonably satisfied
that it will receive all consents and approvals necessary in order
that all Client Contracts remain in full force and effect following
Completion.
(vi) No proceeding challenging this Agreement or the transactions
contemplated hereby or seeking to prohibit, alter, prevent or materially
delay the Completion shall have been instituted by any Person before any
court, arbitrator or governmental body, agency or official and be pending;
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(vii) Buyer shall have received all documents it may reasonably
request relating to the existence of the Company and the authority of
Sellers for this Agreement, all in form and substance reasonably
satisfactory to Buyer;
(viii) Sellers shall have complied with Section 5.10 hereof, and
Sellers shall have provided all required waivers and approvals in
connection therewith;
(ix) Buyer shall have received or be satisfied that it will
receive all necessary consents of KPMG Peat Marwick, independent public
accountants, with respect to the audited financial statements and
reconciliations to be used in the Buyer Proxy Statement; and
(x) Sellers shall have procured the written consent of GMAC to
the transaction contemplated by this Agreement, to the extent that such
consent is required.
PROVIDED that Buyer shall be entitled in its absolute discretion, by written
notice to Sellers, to waive any or all of the conditions set forth in this
Section 9.2, BUT PROVIDED FURTHER that, if following the date hereof, and prior
to the Completion Date, Sellers notify Buyer in writing of the existence of a
breach of Warranty (a "Notified Breach") such as would give rise to Buyer's
right pursuant to Sections 2.2(e)(i) and 9.2(ii) herein to rescind the
Agreement, and following receipt of such notice, Buyer waives such right of
rescission, Sellers shall have no liability to the Buyers in respect of such
Notified Breach, unless the Sellers were in willful breach of such Warranty in
which case Section 11 shall apply.
9.3 CONDITIONS TO OBLIGATION OF SELLERS. The obligation of Sellers
to consummate the Completion is subject to the satisfaction of the following
further conditions:
(i) (A) Buyer shall have performed in all material respects
all of its obligations hereunder required to be performed by it at or
prior to the Completion Date, and (B) the warranties of Buyer
contained in this Agreement shall have been true when made and (except
to the extent such warranties speak as of an earlier date) shall be
true at and as of the Completion Date, as if made at and as of the
Completion Date;
(ii) The Seller Representative shall have received all
documents he or she may reasonably request relating to the existence
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of Buyer and the authority of Buyer for this Agreement, all in form and
substance reasonably satisfactory to the Seller Representative; and
(iii) There shall have been no event occurrence, development
or state of circumstances or facts which has had, or could reasonably
be expected to have, a Material Adverse Effect on Buyer.
9.4 REASONABLE EFFORTS TO FULFILL CONDITIONS TO COMPLETION. Each of
the Sellers and Buyer undertakes to use all reasonable efforts to ensure that
the conditions to Completion are fulfilled to the satisfaction of Buyer as soon
as reasonably practicable. Buyer shall notify the Seller Representative in
writing within two (2) Business Days after all such conditions have been
fulfilled to the satisfaction of Buyer.
ARTICLE 10
SURVIVAL; INDEMNIFICATION
10.1 LIMITATIONS. (a) BUYER RELIANCE. Buyer acknowledges that save
for the Warranties and the other covenants and representations contained in this
Agreement and the Tax Covenant the Buyer has not relied in relation to the
purchase of the Shares, and was not induced to purchase the Shares, on or by any
warranties, representations, undertakings, indemnities or covenants of any
description, howsoever or whatsoever and whether express or implied.
In addition, the Buyer irrevocably and unconditionally waives any
right which it may have or might have had to claim damages and/or to rescind
this Agreement for any misrepresentation not contained in this Agreement (or any
of the other documents referred to in this Agreement) or for breach of any
express or implied warranties not specifically set out in this Agreement unless
such misrepresentation or warranty was made fraudulently.
(b) SELLERS' RELIANCE. Sellers acknowledge that save for the
warranties and the covenants contained in this Agreement the Sellers have not
relied in relation to the sale of the Shares in exchange for Buyer Stock, and
were not induced to sell the Shares in exchange for Buyer Stock, on or by any
warranties, representations, undertakings, indemnities or covenants of any
description on the part of Buyer, howsoever or whatsoever and whether express or
implied.
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In addition, Sellers irrevocably and unconditionally waive any right
which they may have or might have had to claim damages and/or to rescind this
Agreement for any misrepresentation on the part of Buyer not contained in this
Agreement (or any of the other documents referred to in this Agreement) or for
breach of any express or implied warranties on the part of Buyer not
specifically set out in this Agreement unless such misrepresentation or warranty
was made fraudulently.
(c) TIME LIMITS. (i) The rights of the Buyer in respect of any
breach or non-fulfillment of any of the Warranties shall only be enforceable if
notice in writing (giving in so far as may then be practicable the amount and
details of the claim) shall be given to the Sellers on or before the expiry of a
period of two years from Completion and where the relevant claim has not been
settled, withdrawn or agreed, if proceedings shall have been commenced (or the
claim made in existing proceedings) and served upon the Sellers and not
discontinued in respect of the claim on or before the expiry of a period of
twenty-four calendar months from Completion.
(ii) The rights of the Buyer in respect of any breach or non-
fulfillment of any of the terms of the Tax Covenant shall only be enforceable if
notice in writing (giving in so far as may then be practicable the amount and
details of the claim) shall be given to the Sellers on or before the expiry of a
period of six years from Completion, and where the relevant claim has not been
settled, withdrawn or agreed, if proceedings shall have been commenced (or the
claim made in existing proceedings) and served upon the Sellers and not
discontinued in respect of the claim on or before the expiry of a period of six
years and six calendar months from the Completion.
(d) DE MINIMIS CLAIMS. (i) The Buyer shall not be entitled to make
any claim or claims (however many in number) under the Warranties or the Tax
Covenant where the sum claimed is less than L1,000, and any such claim or claims
of less than L1,000 shall be disregarded in computing the figure of L1 million
referred to in sub-clause 10.1(d)(ii).
(ii) The Sellers shall not be liable in respect of any claim under the
Warranties or under the Tax Covenant unless and to the extent that the
aggregate cumulative liability of the Vendors in respect of all such claims
exceeds L1 million, and in such event the Sellers shall only be liable in
respect of the excess of such claims over L1 million.
(e) MAXIMUM CLAIMS. The Buyer shall not be entitled to recover under
the Warranties and the Tax Covenant any sum in excess of $25 million in the
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aggregate; PROVIDED, FURTHER, however that Buyer shall not be entitled to
recover pursuant to any claim made under the Tax Covenant during the period
commencing 3 years following the Completion Date and ending 6 years after the
Completion Date any sum in excess of $2 million in the aggregate. Any payment
made in respect of a claim under the Warranties may be made in cash or Buyer
Stock, at the election of the Seller making the payment. If such payment is
made in Buyer Stock, the value of the Buyer Stock shall be calculated as the
average of the closing prices on the NASDAQ during the 10 trading days prior to
the date on which such payment is made. Each Seller shall only be liable for
his Appropriate Proportion of any claim made by the Buyer in respect of any
breach of the Warranties or under the Tax Covenant and, in this Article, the
expression "Appropriate Proportion" means the proportion which the Shares to be
sold by the Seller hereunder bear to the total Shares to be sold under this
Agreement.
(f) RECOVERIES. (i) The liability of the Sellers for breach of any
Warranty or for a claim under the Tax Covenant shall be reduced by the value of
any recoveries which have been, or subsequently are, actually received or
obtained by the Buyer or the Company or any Subsidiary:
(A) from any third party responsible for the act, manner or
circumstances giving rise to such breach or claim; or
(B) from any related insurance monies received and in respect
thereof.
(ii) If the Sellers pay at any time to the Buyer or to the Company or
to any Subsidiary a sum pursuant to a claim in respect of the Warranties or
under the Tax Covenant and the Buyer or the Company or any Subsidiary
subsequently becomes entitled to recover from some other person any sum in
respect of any matter giving rise to such claim, the Buyer shall, and shall
procure that the Company and/or any relevant Subsidiary shall, at the
entire cost of the Sellers, take all necessary steps to enforce such
recovery, and, once such recovery has been made, shall immediately repay to
the Sellers (without interest) so much of the sum paid by the Sellers to
the Buyer or the Company and/or any relevant Subsidiary as does not exceed
the sum recovered from such other person (less any costs, charges and
expenses, incurred by the Buyer and/or the Company and/or any relevant
Subsidiary in recovering that sum from such other person, which have not
previously been reimbursed by the Sellers.
(g) DOUBLE CLAIMS. If the Sellers are liable both in respect of a
breach of Warranty or under the Tax Covenant, the Buyer shall be entitled to
claim in
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respect of either or both. The Buyer (which shall for this purpose include the
Company and each Subsidiary) shall not however be entitled to recover from the
Sellers under the Warranties or the Tax Covenant more than once in respect of
the same damage suffered, and accordingly the Sellers shall not be liable in
respect of any breach of the Warranties if and to the extent that the loss is or
has been included in a claim under the Tax Covenant which has been satisfied,
nor shall the Sellers be liable in respect of a claim under the Tax Covenant if
and to the extent that the loss is or has been included in a claim for breach of
the Warranties which has been satisfied.
(h) CONTINGENT LIABILITIES. The Sellers shall not be liable for
breach of any Warranty or under the Tax Covenant in respect of any claim based
upon a liability which is contingent unless and until such contingent liability
becomes an actual liability and is due and payable; provided that this sub-
clause shall not operate to avoid a claim in respect of a contingent liability
made before the expiry of the periods specified in sub-clause 10.1(c) if
reasonable details of such claim have been delivered before the expiry of such
period even if such liability shall not become an actual liability until after
the expiry of the relevant period.
(i) CHANGES IN LEGISLATION. The Sellers' liability in respect of any
breach of any of the Warranties or under the Tax Covenant:
(i) shall be reduced by the extent that such liability arises or is
increased as a result of any legislation not in force at today's date or of
any change or changes in legislation or the withdrawal after today's date
of any extra-statutory concession previously made by the Inland Revenue or
any other fiscal authority whether or not such change or changes or
withdrawal purport to be effective retrospectively in whole or in part;
(ii) shall be reduced by the extent that such liability arises or is
increased as a result of any change in the basis or method of calculation
of, or of any increase in the rates of taxation in either case made or
imposed by legislation after Completion with retrospective effect to any
period ending before Completion.
(iii) shall be reduced if and to the extent that such liability is
attributable to any act, omission, transaction or arrangement of the Buyer
or the Company or any Subsidiary after Completion voluntarily effected
otherwise than in the ordinary course of business or pursuant to a legally
binding obligation entered into before Completion.
(j) TAX REDUCTIONS. If the Sellers shall have made payment to the
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Buyer in respect of any claim for breach of Warranties or a claim under the Tax
Covenant in circumstances where the subject matter of the claim results in a
reduction in the taxation actually paid by the Company or Subsidiary (and in
circumstances where such reduction in taxation does not give rise to a
consequential or resulting increase in taxation liability of the Company or
Subsidiary) then the Buyer shall refund to the Sellers an amount equal to the
lesser of the amounts originally paid by the Sellers and the amount of the
reduction in taxation so obtained.
(k) REMEDIABLE BREACHES. A breach of the Warranties which is
remediable shall not entitle the Buyer to compensation in accordance with the
provisions of this agreement unless the Vendors are given written notice of any
alleged breach and the breach is not remedied in a reasonable fashion by the
Vendors without cost to or obligation upon the Purchaser, the Company or any
Subsidiary within 60 days after the date of receipt of such notice.
(l) DISCLOSURE LETTER. Sellers shall be under no liability under the
Warranties in respect of any matter disclosed in the Disclosure Letter save that
this provision shall not apply to any document referred to in or attached to,
but expressly excluded from disclosure in, the Disclosure Letter.
10.2 SELLERS' LIABILITY. Subject to the provisions in Section 10.1
herein, Sellers shall be jointly and severally liable for any damages incurred
or suffered by Buyer arising out of, or in connection with, (i) any breach of
Warranties of Sellers (except in the event that a Seller breaches the Warranty
set forth in Section 3.6 hereof, in which case such Seller shall be fully and
severally liable for any and all damages suffered or incurred by the Buyer as a
result of such breach or (ii) any breach of covenant or agreement, including the
Tax Covenant, made or to be performed by Sellers, in each case, pursuant to this
Agreement.
10.3 PROCEDURES; REMEDIES CUMULATIVE. (a) The party seeking
indemnification in respect of the Warranties and for the Tax Covenant (the
"Indemnified Party") agrees to give prompt notice (and in any event within 14
days of the date on which the Indemnified Party becomes aware of the matter in
respect of which it seeks to be indemnified) to the party against whom indemnity
is sought (the "Indemnifying Party") of the assertion of any claim, or the
commencement of any suit, action or proceeding in respect of which indemnity may
be sought under such Section 10.2. The Indemnifying Party may, and at the
request of the Indemnified Party shall, participate in the defense of any such
suit, action or proceeding at its own expense, provided that, in the case of any
claim, suit, action or proceeding under the Tax Covenant, the Indemnified Party
shall not be required by the Indemnifying Party to take any action if, in the
Indemnified Party's
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reasonable opinion the action is likely to affect adversely and materially the
future liability to tax of the Indemnified Party or would otherwise affect
adversely and materially the business or financial interests of the Indemnified
Party or any person connected with the Indemnified Party. The Indemnifying
Party shall not be liable under this Agreement or the Tax Covenant for any
settlement effected without its consent of any claim, litigation or proceeding
in respect of which indemnity may be sought hereunder, such consent not to be
unreasonably withheld or delayed, and provided that if, in the case of any
claim, suit, action or proceeding under the Tax Covenant, the Indemnifying Party
does not confirm to the Indemnified Party that it wishes to take any appropriate
action within twenty-one days of being requested to do so by service of notice
in writing by the Indemnified Party to the Indemnifying Party, the Indemnified
Party concerned shall be free to satisfy or settle the relevant tax liability on
such terms as it may in its reasonable discretion think fit.
(b) The parties agree that the rights and remedies provided for in
this Article 10 shall be in addition to, and not exclusive of, any rights and
remedies available to any party at law or in equity. Without limiting the
foregoing, each party agrees that, in the event of any breach by such party of
the provisions of this Agreement, the non-breaching parties shall be entitled to
equitable relief, including injunctions and orders for specific performance in
addition to all other remedies available to such non-breaching parties at law or
in equity.
ARTICLE 11
TERMINATION
11.1 GROUNDS FOR TERMINATION. This Agreement may be terminated at any
time prior to the Completion:
(i) by mutual written agreement of Buyer and the Seller
Representative;
(ii) by either Buyer or the Seller Representative if the
Completion shall not have been consummated on or before December 31,
1996;
(iii) by either Buyer or the Seller Representative if there
shall be any law or regulation that makes consummation of the
transactions contemplated hereby illegal or otherwise prohibited or if
consummation of the transactions contemplated hereby would violate any
nonappealable final order, decree or judgment of any court or
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governmental body having competent jurisdiction; or
(iv) by either Buyer or the Seller Representative if the Buyer
shall not have received an unconditional waiver by the Panel on Take-overs
and Mergers of the application of the City Code on Take-overs and Mergers
to the transaction contemplated by this Agreement.
The party desiring to terminate this Agreement shall give notice of
such termination to the other parties.
11.2 EFFECT OF TERMINATION. If this Agreement is terminated as
permitted by Section 11.1, termination shall be without liability of any party
(or any stockholder, director, officer, employee, agent, consultant or
representative of such party) to any other party to this Agreement; PROVIDED
that (i) if such termination shall result from any Seller's willful failure to
fulfill a condition to the performance of the obligations of Buyer, failure to
perform a covenant of this Agreement or breach of any Warranty or agreement
contained herein, the Sellers shall be jointly and severally liable (in the
appropriate proportions) for any and all damages incurred or suffered by Buyer
as a result of such failure or breach (except to the extent that such
termination results from such Seller's willful breach of the Warranties set
forth in Section 3.6, in which case such Seller shall be fully and severally
liable for any and all damages incurred or suffered by the Buyer as a result of
such breach); and (ii) if such termination shall result from the willful failure
of Buyer to fulfill a condition to the performance of the obligations of
Sellers, failure to perform a covenant to this agreement or breach of any
warranty or agreement herein, Buyer shall be fully liable for any and all
damages incurred or suffered by Sellers as a result of such failure or breach.
The provisions of Sections 12.3 and 12.5 shall survive any termination hereof
pursuant to Section 11.1.
ARTICLE 12
MISCELLANEOUS
12.1 NOTICES. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile transmission) and shall
be given,
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if to Buyer to:
Sitel Corporation
13215 Birch Street
Suite 100
Omaha, NE 68164
Attention: Barry Majors, Chief Financial Officer
Fax: (402) 498-2699
with a copy (provided that failure to give or receive any
such copy shall not affect the validity of the principal
notice) to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: William L. Rosoff
Fax: (212) 450-4800
and
Freshfields
Whitefriars
65 Fleet Street
London EC4Y 1HS
England
Attention: Lois Moore
Fax: 44-171-832-7001
if to the Company or any Seller, to:
Mr. Henk Kruithof
Vivier Hanquet 10
1390 Grez Doiceau
Belgium
Fax: 32-10-84-10-00
with copies (provided that failure to give or receive any
such copy shall not affect the validity of the principal
notice) to:
The Call Centre Limited
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Mitre House
Wolsey Business Estate
Moor Park
Rickmansworth
Herts
Attention: Ray F. Pipe
Fax: 44-1923-835475
and
Taylor Joynson Garrett
Carmelite
50 Victoria Embankment
Blackfriars
London EC4Y 0DX
Attention: Gordon Jackson
Fax: 44-171-936-2666
All such notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof if received prior to 5 p.m. in the
place of receipt and such day is a business day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding business day in the place of receipt.
12.2 AMENDMENTS AND WAIVERS. (a) Subject to the provisions of Section
9.1(viii)] any provision of this Agreement may be amended or waived prior to the
Completion Date if, but only if, such amendment or waiver is in writing and is
signed, in the case of an amendment, by each party to this Agreement, or in the
case of a waiver, by the party against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
12.3 EXPENSES. Except as otherwise provided herein, all costs and
expenses incurred in connection with this Agreement, including, without
limitation, legal and accountancy costs and the cost of filing pursuant to the
HSR Act, shall be paid by Buyer; PROVIDED, HOWEVER, that if this Agreement is
terminated for any reason prior to Completion, such costs and expenses shall be
paid by the party
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incurring such cost or expense, subject to the provisions of Section 11.2.
12.4 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, successors, legal representatives and permitted assigns; PROVIDED that
save as provided in Section 5.5, no party may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the
consent of each other party hereto except that Buyer, at the Completion, may
transfer or assign, in whole or in part, to one or more of its Affiliates, any
of its rights or obligations hereunder, but no such transfer or assignment will
relieve Buyer of its obligations hereunder, and in the event that such Affiliate
ceases to be an Affiliate of Buyer, all obligations and liabilities of each of
the Sellers shall cease.
12.5 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of England and Wales and each of the parties hereto
submits to the exclusive jurisdiction of the English Courts.
12.6 COUNTERPARTS; THIRD PARTY BENEFICIARIES. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. No provision of this Agreement is intended to confer upon any
Person other than the parties hereto and their respective heirs, successors,
legal representatives and permitted assigns any rights or remedies hereunder.
12.7 ENTIRE AGREEMENT. This Agreement, the Registration Rights
Agreement, the Escrow Agreement and the Tax Indemnity together constitute the
entire agreement and understanding between the parties in connection with the
sale and purchase of the Shares. This Agreement supersedes any confidentiality
undertaking executed in anticipation of the transactions contemplated by this
Agreement which shall cease to have any further force or effect and] no party
has entered into this Agreement in reliance upon any representation, warranty or
undertaking which is not set out or referred to in this Agreement.
12.8 RESTRICTIVE TRADE PRACTICES ACT. Notwithstanding any other
provisions of this Agreement (or any other agreement which, together with this
Agreement, may form part of an agreement for the purposes of the Restrictive
Trade Practices Act 1976 (the "Act") (together the "RTPA Agreement")) each party
hereto declares that it will not give effect, and will procure that none of its
subsidiaries shall give effect, to any restriction or restrictions contained in
the RTPA Agreement which cause the RTPA Agreement to be registrable under the
Act until one day after particulars of the RTPA Agreement shall have been
furnished to the Director General of Fair Trading.
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12.9 SELLER REPRESENTATIVE. Each Seller agrees that (i) all
determinations made, or actions taken, by the Seller Representative in the
manner contemplated hereunder shall be conclusive and binding on such Seller,
(ii) the conclusive and binding nature of any determination made, or action
taken, by a Seller Representative will not be affected by any determination
made, or action taken, by any subsequent Seller Representative and (iii) there
may be only one Seller Representative at any given time.
12.10 INTERPRETATION. In this Agreement any statement qualified by
the expression "to the best of the Sellers' knowledge" or "so far as the Sellers
are aware" or any similar expression shall be deemed to include an additional
statement that it has been made after due and careful inquiry of the officers of
the Company and the Subsidiaries.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
SITEL CORPORATION
By: /s/ Michael P. May
------------------------------------
Name: Michael P. May
Title: Executive Vice President
MERIT GROUP NV
By: /s/ Henk P. Kruithof
------------------------------------
Name: Henk P. Kruithof
Title:
BURMEL HOLDINGS NV
By: /s/ Henk P. Kruithof
------------------------------------
Name: Henk P. Kruithof
Title:
/s/ Ray F. Pipe
----------------------------------------
Ray F. Pipe
/s/ P.L.R. Godfrey
----------------------------------------
Peter L.R. Godfrey
/s/ AJ Tillard, by his attorney, PLR Godfrey
---------------------------------------------
Andrew J. Tillard
/s/ MJ Shields, by his attorney, PLR Godfrey
---------------------------------------------
Martin J. Shields
<PAGE>
/s/ MEO Bilton, by her attorney, PLR Godfrey
---------------------------------------------
M.E.O. Bilton
/s/ KM Mather, by her attorney, PLR Godfrey
----------------------------------------------
K.M. Mather
/s/ JC White, by his attorney, PLR Godfrey
----------------------------------------------
J.C. White
/s/ G. Hurley, by his attorney, PLR Godfrey
---------------------------------------------
G. Hurley
/s/ T.A. Fitzherbert, by his attorney, PLR Godfrey
--------------------------------------------------
The Hon. T.A. Fitzherbert
<PAGE>
EXHIBIT 2.4(b)
REGISTRATION RIGHTS AGREEMENT DATED SEPTEMBER 3, 1996
BETWEEN SITEL CORPORATION AND CERTAIN STOCKHOLDERS OF SITEL (CONFORMED COPY)
<PAGE>
CONFORMED COPY
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of September 3, 1996 among
SITEL Corporation, a Minnesota corporation ("SITEL") and certain stockholders of
SITEL listed on the signature pages hereto (each, a "SELLER").
W I T N E S S E T H:
WHEREAS, SITEL and Sellers have entered into a Share Purchase
Agreement dated June 6, 1996 (as amended, the "SHARE PURCHASE AGREEMENT"),
pursuant to which SITEL has agreed to purchase, and Sellers have agreed to sell,
100% of the ordinary shares of Mitre plc (the "SALE"); and
WHEREAS, the consideration to be paid to Sellers in the Sale consists
of 9,170,553 shares of SITEL's common stock, $0.001 par value (the "COMMON
STOCK").
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1. DEFINITIONS. (a) Capitalized terms used but not separately
defined herein shall have the meanings assigned to such terms in the Share
Purchase Agreement.
(b) The following terms, as used herein, have the following meanings:
"DEMAND REGISTRATION" means a Demand Registration as defined in
Section 2.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
or any similar federal statute then in effect, and a reference to a particular
section thereof shall be deemed to include a reference to the comparable
section, if any, of any such similar federal statute.
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"INDEMNIFIED PARTY" has the meaning set forth in Section 4.3.
"INDEMNIFYING PARTY" has the meaning set forth in Section 4.3.
"PERMITTED TRANSFEREE" means with respect to any Shareholder (A) any
general or limited partner or shareholder of such Shareholder, and any
corporation, partnership or other entity that is an Affiliate of such
Shareholder (collectively, "SHAREHOLDER AFFILIATES"), (B) any spouse, lineal
descendant, sibling, parent, heir, executor, administrator, testamentary
trustee, legatee or beneficiary of any of any Shareholder and (C) any trust, the
beneficiaries of which, or any corporation, limited liability company or
partnership, stockholders, members or general or limited partners of which
include only such Shareholder or Shareholder Associates, or (E) any institution
qualified as tax-exempt under Section 501(c)(3) of the Internal Revenue Code of
1986, as amended; PROVIDED that no Person shall be a Permitted Transferee unless
(i) such Person shall have agreed in writing to be bound by the terms of this
Agreement, (ii) the transferor shall have transferred to such Person Registrable
Securities and (iii) the transfer to such Permitted Transferee of Registrable
Securities is not in violation of applicable federal or state securities laws.
"PIGGYBACK REGISTRATION" means a Piggyback Registration as defined in
Section 2.2.
"REGISTRABLE SECURITIES" means, with respect to any Shareholder, the
shares of the Common Stock acquired by such Shareholder or its Affiliates
pursuant to the Share Purchase Agreement, and any securities into which such
securities may be subdivided, split, combined, consolidated, merged or
reclassified until (i) such securities shall have been sold pursuant to a
registration statement with respect to the sale by such Shareholder of such
securities which shall have become effective under the Securities Act, (ii) such
securities shall be eligible for distribution to the public under Rule 144 (or
any successor provision) under the Securities Act without regard to volume
limitations, (iii) such securities shall have been otherwise transferred, new
certificates for such securities not bearing a legend restricting further
transfer shall have been delivered by SITEL and, in the written opinion of
counsel to SITEL, subsequent disposition of such securities shall not require
registration or qualification of them under the Securities Act or (iv) such
securities shall cease to be outstanding.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or
any similar federal statute then in effect, and a reference to a particular
section thereof shall be deemed to include a reference to the comparable
section, if any, of any such similar federal statute.
"SHAREHOLDER" means any Seller or any Permitted Transferee.
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"UNDERWRITER" means a securities dealer who purchases any Registrable
Securities as principal and not as part of such dealer's market-making
activities.
ARTICLE II
REGISTRATION RIGHTS
2.1. DEMAND REGISTRATION. (a) If SITEL shall receive a written
request by one or more of the Shareholders (each, a "REQUESTING SHAREHOLDER")
that SITEL effect the registration under the Securities Act of all or part of
such Shareholder's Registrable Securities and specifying the intended method of
disposition thereof, at any time following the date six months after the
Completion Date, then SITEL shall promptly give written notice of such requested
registration (a "DEMAND REGISTRATION") at least 30 days prior to the anticipated
filing date of the registration statement relating to such Demand Registration
to the other Shareholders and thereupon will use its best efforts to effect, as
expeditiously as possible, the registration, subject to the limitations set
forth in Section 2.4 hereof, under the Securities Act of the Registrable
Securities which SITEL has been so requested to register by the Requesting
Shareholders, then held by the Requesting Shareholders, and all other
Registrable Securities which any other Shareholder (all such Shareholders,
together with the Requesting Shareholders, the "SELLING SHAREHOLDERS") has
requested SITEL to register by written request received by SITEL within 15 days
after the receipt by Selling Shareholders of such written notice given by SITEL,
all to the extent necessary to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities so to be
registered; PROVIDED that SITEL shall not be obligated to effect more than one
such Demand Registration, and PROVIDED FURTHER that SITEL shall not be obligated
to effect a Demand Registration unless the aggregate number of Registrable
Securities requested to be included in such Demand Registration shall equal at
least the Minimum Number of Shares, as defined in the succeeding sentence. For
purposes of a Demand Registration, the "Minimum Number of Shares" means (i)
until the date 12 months after the Completion Date, 1,000,000 shares of Common
Stock; and (ii) from the date 12 months after the Completion Date until the date
24 months after the Completion Date, 1,000,000 shares of Common Stock, EXCEPT
that the Minimum Number of Shares shall be 500,000 shares of Common Stock in the
event that, in the first 12 months following the Completion Date, no opportunity
for a Piggyback Registration has occurred in which at least 500,000 shares of
Common Stock of Sellers are sold, UNLESS the failure to sell at least 500,000
shares of Common Stock results from the failure of the Shareholders to request
that shares be included in such offering. SITEL shall not be obligated to
effect a Demand Registration within 180 days after the effective date of any
Piggyback Registration.
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Promptly after the expiration of the 15-day period referred to in
Section 2.1(a) hereof, SITEL will notify all the Selling Shareholders to be
included in the Demand Registration of the other Selling Shareholders and the
number of shares of Registrable Securities requested to be included therein.
The Selling Shareholders requesting a registration under this Section 2.1(a)
may, at any time prior to the effective date of the registration statement
relating to such registration, revoke such request, without liability to any of
the other Selling Shareholders, by providing a written notice to SITEL revoking
such request, in which case, if as a result of such revocation, the offering
does not proceed, such request, so revoked, shall be considered a Demand
Registration unless (i) such revocation arose out of the fault of SITEL, or (ii)
unless the participating Shareholders reimburse SITEL for all costs incurred by
SITEL in connection with such registration, in either of which cases such
request shall not be considered a Demand Registration.
(b) The offering of such Registrable Securities pursuant to such
Demand Registration shall be in the form of an underwritten offering. SITEL
shall select the managing Underwriter(s) and any additional underwriters,
syndicate members and firms to be used in connection with such an underwritten
offering; PROVIDED that such managing Underwriter(s) shall be reasonably
satisfactory to the holders of a majority of the Registrable Securities
requested to be included in such offering.
(c) Upon written notice to each Selling Shareholder, SITEL may
postpone effecting a registration pursuant to this Section 2.1 on one occasion
during any period of six consecutive months for a reasonable time specified in
the notice but not exceeding 90 days (which period may not be extended or
renewed), if (1) an investment banking firm of recognized national standing
shall advise SITEL and the Selling Shareholders in writing that effecting the
registration would materially and adversely affect an offering of securities of
SITEL the preparation of which had then been commenced or (2) SITEL is in
possession of material non-public information the disclosure of which during the
period specified in such notice SITEL believes would not be in the best
interests of SITEL.
(d) SITEL shall not sell in a public offering Common Stock for a 90-
day period following the effective date of the Demand Registration.
(e) In the event that an offering of Registrable Securities pursuant
to a request for Demand Registration results in the sale of 250,000 or fewer
shares of Common Stock, such request shall not be considered a Demand
Registration, and the Shareholders shall retain the right to request a Demand
Registration subject to the Minimum Number of Shares requirement set forth in
Section 2.1(a) hereof, EXCEPT that SITEL shall not be obligated to effect such
Demand Registration within 6 months of the effective date of the offering of
Registrable Securities pursuant to the initial request for Demand Registration.
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2.2. PIGGYBACK REGISTRATION. If SITEL proposes to file a
registration statement under the Securities Act with respect to an offering of
Common Stock (i) for SITEL's own account (other than a registration (x) on Form
S-4 or S-8 (or any substitute form that may be adopted by the SEC) or (y)
relating to securities issuable upon exercise of employee stock options or in
connection with any employee benefit or similar plan of SITEL) or (ii) for the
account of any stockholder of SITEL, then SITEL shall give written notice of
such proposed filing, to each of the Shareholders as soon as practicable (but in
no event less than 10 days before the anticipated filing date of such
registration statement), and such notice shall offer each Shareholder the
opportunity to include in such registration statement such number of shares of
Registrable Securities as such Shareholder may request (a "PIGGYBACK
REGISTRATION"). Upon the written request made within 10 days after the receipt
of notice from SITEL (which request shall specify the number of Registrable
Securities intended to be disposed of by Shareholders), SITEL will use its
reasonable efforts to effect the registration under the Securities Act of all
such Registrable Securities (subject to the limitations set forth in Section 2.4
hereof); PROVIDED that, (i) if such registration involves an underwritten public
offering, all such Shareholders requesting to be included in SITEL's
registration must sell their Registrable Securities to the underwriters on the
same terms and conditions as apply to SITEL or the stockholder, as applicable,
and (ii) at any time after giving written notice of its intention to register
any securities pursuant to this Section 2.2 and prior to the effective date of
the registration statement filed in connection with such registration, SITEL
shall determine for any reason not to register such stock, SITEL shall give
written notice to Shareholders and, thereupon, shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration. No registration effected under this Section 2.2 shall relieve
SITEL of its obligations to effect a Demand Registration to the extent required
by Section 2.1.
2.3. REDUCTION OF OFFERING. Notwithstanding anything contained
herein, if the managing Underwriter of an offering described in Section 2.1 or
2.2 delivers a written opinion to SITEL that the size of the offering that
Shareholders, SITEL and any other Persons intend to make are such as to be
likely to have a material adverse effect on the success of the offering, then
the amount of Registrable Securities to be offered for the account of the
Shareholders shall be reduced to the extent necessary to reduce the total amount
of securities to be included in such offering to the amount recommended by such
managing Underwriter (allocated, if necessary, pro rata among the Shareholders
on the basis of the relative number of Registrable Securities requested by the
Shareholders to be included in such registration); PROVIDED that (x) in the case
of a Demand Registration, the amount of Registrable Securities to be offered for
the account of the Shareholders shall be reduced only after the amount of
securities to be offered for the account of SITEL has been reduced to zero and
(y) in the case of a Piggyback Registration, the amount of such Registrable
Securities intended to be offered for the account of the Shareholders shall be
reduced (allocated, if necessary, pro rata among the Shareholders and such
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<PAGE>
other Persons participating in such registration on the basis of the relative
number of Registrable Securities and common stock requested by the Shareholders
and such other Persons, respectively, to be included in such registration) to
zero, if necessary, before the amount of securities offered for the account of
SITEL is reduced, PROVIDED that the amount of securities to be offered for the
account of any other Person in such offering shall have been reduced, to zero,
if necessary, prior to any reduction in the amount of Registrable Securities to
be offered for the account of the Shareholders.
2.4. MAXIMUM NUMBER OF SHARES REGISTERED. Notwithstanding any other
provision of this Agreement, but subject to Section 2.5, SITEL shall not be
required to effect a registration, on behalf of any Shareholder, for a number
shares of Registrable Securities in excess of 30% of Registrable Securities
beneficially owned by such Shareholder as of the Completion Date (the "CAP").
For the purpose of calculating the Cap with respect to any Shareholder, the
number of shares of Registrable Securities sold by such Shareholder in all
Demand Registration and Piggyback Registrations shall be aggregated.
2.5. FURTHER REGISTRATIONS. If, following the date on which the
Registrable Securities cease to be "Registrable Securities" but prior to the
fifth anniversary of the Completion Date, SITEL shall offer any of its executive
officers the opportunity to include any of the shares of Common Stock owned by
such executive officers in any registration statement proposed to be filed by
SITEL (other than registrations of the types described in clauses (x) and (z) of
the first parenthetical clause of Section 2.2), then SITEL shall also offer each
of the Shareholders the opportunity to include any shares of Common Stock then
beneficially owned by such Shareholder in any such registration statement on the
same terms and conditions offered by SITEL to any such executive officers.
ARTICLE III
REGISTRATION PROCEDURES
3.1. FILINGS; INFORMATION. Whenever any Shareholder requests that
any Registrable Securities be registered pursuant to Section 2.1 or 2.2 hereof,
SITEL will, subject to the provisions of Article II, use its reasonable best
efforts to effect the registration and sale of such Registrable Securities as
promptly as is practicable, and in connection with any such request:
(a) SITEL will as expeditiously as possible prepare and file with the
SEC a registration statement on any form for which SITEL then qualifies and
which counsel for SITEL shall deem appropriate and available for the sale
of the Registrable Securities to be registered thereunder in accordance
with the intended method of distribution thereof, and use its reasonable
efforts to cause such filed registration statement to become and remain
effective for a period of
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not less than 120 days (or such shorter period in which all of the
Registrable Securities of the Shareholders included in such registration
statement shall have actually been sold thereunder).
(b) SITEL will, if requested, prior to filing such registration
statement or any amendment or supplement thereto, furnish to each
Shareholder and each managing Underwriter, if any, copies thereof, and
thereafter furnish to each Shareholder and each such Underwriter, if any,
such number of copies of such registration statement, each amendment and
supplement thereto (in each case including all exhibits thereto and
documents incorporated by reference therein) and the prospectus included in
such registration statement (including each preliminary prospectus) as such
Shareholder or each such Underwriter may reasonably request in order to
facilitate the sale of the Registrable Securities owned by such
Shareholder.
(c) After the filing of the registration statement, SITEL will
promptly notify each Shareholder of any stop order issued or, to SITEL's
knowledge, threatened to be issued by the SEC and take all reasonable
actions required to prevent the entry of such stop order or to remove it if
entered.
(d) SITEL will endeavor to register or qualify the Registrable
Securities for offer and sale under such other securities or blue sky laws
of such jurisdictions in the United States as any Shareholder reasonably
requests; PROVIDED that SITEL will not be required to (i) qualify generally
to do business in any jurisdiction where it would not otherwise be required
to qualify but for this paragraph (d), (ii) subject itself to taxation in
any such jurisdiction or (iii) consent to general service of process in any
such jurisdiction.
(e) SITEL will as promptly as is practicable notify each Shareholder,
at any time when a prospectus relating to the sale of the Registrable
Securities is required by law to be delivered in connection with sales by
an Underwriter or dealer, of the occurrence of any event requiring the
preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, and promptly make available to each
Shareholder and to the Underwriters any and file with the SEC such
supplement or amendment. Each Shareholder agrees that, upon receipt of any
notice from SITEL of the occurrence of any event of the kind described in
the preceding sentence, such Shareholder will forthwith discontinue the
offer and sale of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until receipt by such
Shareholder and the Underwriters of the copies of such supplemented or
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amended prospectus and, if so directed by SITEL, each Shareholder will
deliver to SITEL all copies, other than permanent file copies then in such
Shareholder's possession, of the most recent prospectus covering such
Registrable Securities at the time of receipt of such notice. In the event
SITEL shall give such notice, SITEL shall extend the period during which
such registration statement shall be maintained effective as provided in
Section 3.1(a) hereof by the number of days during the period from and
including the date of the giving of such notice to the date when SITEL
shall make available to each Shareholder such supplemented or amended
prospectus.
(f) SITEL will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as
are reasonably required in order to expedite or facilitate the sale of such
Registrable Securities.
(g) SITEL will furnish to each Shareholder and to each Underwriter a
signed counterpart, addressed to such Shareholder or such Underwriter, of
(i) an opinion or opinions of counsel to SITEL and (ii) a comfort letter or
comfort letters from SITEL's independent public accountants, each in
customary form and covering such matters of the type customarily covered by
opinions or comfort letters, as the case may be, as the majority of such
Shareholders or the managing Underwriter reasonably requests.
(h) SITEL will make generally available to its security holders, as
soon as reasonably practicable, an earnings statement covering a period of
12 months, beginning within three months after the effective date of the
registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the SEC thereunder.
(i) SITEL will use its reasonable efforts to cause all such
Registrable Securities to be listed on each securities exchange on which
similar securities issued by SITEL are then listed.
SITEL may require any Shareholder promptly to furnish in writing to
SITEL such information regarding such Shareholder, the plan of distribution of
the Registrable Securities and other information as SITEL may from time to time
reasonably request or as may be legally required in connection with such
registration.
3.2. REGISTRATION EXPENSES. In connection with any Demand
Registration or any Piggyback Registration, SITEL shall pay, the following
expenses incurred in connection with such registration: (i) registration and
filing fees, (ii) fees and expenses of compliance with securities or blue sky
laws (including reasonable fees and disbursements of counsel in connection with
blue sky qualifications of the
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Registrable Securities), (iii) printing expenses, (iv) fees and expenses
incurred in connection with the listing of the Registrable Securities, (v)
reasonable fees and expenses of counsel and customary fees and expenses for
independent certified public accountants for SITEL (including the expenses of
any comfort letters pursuant to Section 3.1(g)), (vi) the reasonable fees and
expenses of any additional experts retained by SITEL in connection with such
registration. Each of the Shareholders shall pay, in connection with any Demand
Registration or Piggyback Registration, any underwriting fees, discounts or
commissions attributable to the sale of Registrable Securities and any
out-of-pocket expenses of such Shareholder, including each such Shareholder's
counsel's fees and expenses, and in connection with any Demand Registration,
fees and expenses of underwriters' counsel to the extent not paid for by
underwriters.
3.3. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Person may
participate in any underwritten registered offering contemplated hereunder
unless such Person (a) agrees to sell its securities on the basis provided in
any underwriting arrangements approved by the Persons entitled hereunder to
approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements and this
Agreement.
3.4. HOLDBACK AGREEMENTS. Each Shareholder agrees not to offer,
sell, contract to sell or otherwise dispose of any Registrable Securities, or
any securities convertible into or exchangeable or exercisable for such
securities, during the 14 days prior to, and during the 180-day period beginning
on, the effective date of such registration statement, other than the
Registrable Securities to be sold pursuant to such registration statement.
3.5. ADDITIONAL RESTRICTIONS ON SALE. Each Shareholder agrees not to
offer, sell, contract to sell or otherwise dispose of any Registrable
Securities, or any securities convertible into or exchangeable or exercisable
for such securities, prior to the public release of the results of the first 30
days of combined operations of SITEL and Mitre plc.
3.6. RULE 144. SITEL covenants that it will file any reports
required to be filed by it under the Securities Act and the Exchange Act and
that it will take such further action as any Shareholder may reasonably request
to the extent required from time to time to enable such Shareholder to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 under the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC. Upon the request of any Shareholder, SITEL will
deliver to such Shareholder a written statement as to whether it has complied
with such requirements.
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ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
4.1. INDEMNIFICATION BY SITEL. SITEL agrees to indemnify and hold
harmless each Shareholder and each Person, if any, who controls such Shareholder
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act from and against any and all losses, claims, damages and
liabilities caused by any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or prospectus relating to
the Registrable Securities (as amended or supplemented if SITEL shall have
furnished any amendments or supplements thereto) or any preliminary prospectus,
or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission made in strict conformity with information furnished in writing to
SITEL by or on behalf of such Shareholder expressly for use therein; PROVIDED
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of Shareholders if a copy of the most
current prospectus or amendment or supplement to the prospectus at the time of
the delivery of the Registrable Securities was not provided by the Shareholder
to the Person asserting such loss, claim, damage, liability or expense and such
current prospectus or amendment or supplement to the prospectus would have cured
the defect giving rise to such loss, claim, damage or liability. SITEL also
agrees to indemnify any Underwriters of the Registrable Securities, their
officers and directors and each person who controls such Underwriters on
substantially the same basis as that of the indemnification of Shareholders
provided in this Section 4.1.
4.2. INDEMNIFICATION BY SHAREHOLDERS. Each Shareholder agrees,
severally and not jointly, to indemnify and hold harmless SITEL, its officers,
directors and agents, and each Person, if any, who controls SITEL within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act to the same extent as the foregoing indemnity from SITEL to such
Shareholder, but only with respect to information furnished in writing by such
Shareholder or on such Shareholder's behalf expressly for use in any
registration statement or prospectus relating to the Registrable Securities, or
any amendment or supplement thereto, or any preliminary prospectus, or to the
extent that any loss, claim, damage, liability or expense described in Section
4.1 results from the fact that a current copy of the prospectus (or, in the case
of a prospectus, the prospectus as amended or supplemented) was not sent or
given to the Person asserting any such loss, claim, damage, liability or expense
at or prior to the written confirmation of the sale of the Registrable
Securities concerned to such Person if it is determined that it was the
responsibility of such Shareholder to provide such Person with a current copy of
the prospectus (or such amended or supplemented prospectus, as the case may be)
and such current copy of the prospectus (or such amended or supplemented
prospectus, as
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the case may be) would have cured the defect giving rise to such loss, claim,
damage, liability or expense. Shareholders also agree to indemnify and hold
harmless any Underwriters of the Registrable Securities, their officers and
directors and each person who controls such Underwriters on substantially the
same basis as that of the indemnification of SITEL provided in this Section 4.2.
As a condition to including Registrable Securities in any registration statement
filed in accordance with Article II hereof, SITEL may require that it shall have
received an undertaking reasonably satisfactory to it from any underwriter to
indemnify and hold it harmless to the extent customarily provided by
underwriters with respect to similar securities.
4.3. CONDUCT OF INDEMNIFICATION PROCEEDINGS. In case any proceeding
(including any governmental investigation) shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to Section 4.1 or
4.2, such Person (the "INDEMNIFIED PARTY") shall promptly notify the Person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing
and the Indemnifying Party, upon the request of the Indemnified Party, shall
retain counsel reasonably satisfactory to such Indemnified Party to represent
such Indemnified Party and any others the Indemnifying Party may designate in
such proceeding and shall pay the fees and disbursements of such counsel related
to such proceeding. In any such proceeding, any Indemnified Party shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless (i) the Indemnifying
Party and the Indemnified Party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the Indemnified Party and the Indemnifying Party
and representation of both parties by the same counsel would, in the reasonable
judgment of such Indemnified Party, be inappropriate due to actual or potential
differing interests between them. It is understood that the Indemnifying Party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
of attorneys (in addition to any local counsel) at any time for all such
Indemnified Parties, and that all such fees and expenses shall be reimbursed as
they are incurred. In the case of any such separate firm for the Indemnified
Parties, such firm shall be designated in writing by Indemnified Parties. The
Indemnifying Party shall not be liable for any settlement of any proceeding
effected without its written consent, but, if settled with such consent, or if
there be a final judgment for the plaintiff, the Indemnifying Party shall
indemnify and hold harmless such Indemnified Parties from and against any loss
or liability (to the extent stated above) by reason of such settlement or
judgment. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending or threatened proceeding
in respect of which any Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability arising out of such proceeding.
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4.4. CONTRIBUTION. If the indemnification provided for in this
Article IV is unavailable to an Indemnified Party in respect of any losses,
claims, damages or liabilities referred to herein, then each such Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such losses,
claims, damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by SITEL, Shareholders and the
Underwriters from the offering of the securities, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of SITEL, the Shareholders
and the Underwriters in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by SITEL, the
Shareholders and the Underwriters shall be deemed to be in the same respective
proportions as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by each of
SITEL and the Shareholders and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the prospectus, bear to the aggregate public offering price of the
securities. The relative fault of SITEL, the Shareholders and the Underwriters
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by such party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
SITEL and the Shareholders agree that it would not be just and
equitable if contribution pursuant to this Section 4.4 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Article IV, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no Shareholder
shall be required to contribute any amount in excess of the amount by which the
net proceeds of the offering (before deducting expenses) received by such
Shareholder exceeds the amount of any damages which such Shareholder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement
12
<PAGE>
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. Each Shareholder's obligation to contribute
pursuant to this Section 4.4 is several in the proportion that the proceeds of
the offering received by such Shareholder bears to the total proceeds of the
offering received by all such Shareholders and not joint.
ARTICLE V
MISCELLANEOUS
5.1. NOTICES. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile transmission) and shall
be given,
if to any Shareholder, to:
Mitre plc
Merit House
Timothy's Bridge
Stratford-upon-Avon
Warwickshire CV37 9HY
Attention: Peter L.R. Godfrey
Fax: 44-1789-200238
with a copy to:
Taylor Joynson Garrett
Carmelite
50 Victoria Embankment
Blackfriars
London EC4Y 0DX
Attention: Gordon Jackson
Fax: 44-171-936-2666
if to SITEL, to:
SITEL Corporation
13215 Birch Street
Suite 100
Omaha, NE 68164
Attention: Chief Financial Officer
13
<PAGE>
Fax: (402) 498-2699
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: William L. Rosoff, Esq.
Fax: (212) 450-4800
All such notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof if received prior to 5 p.m. in the
place of receipt and such day is a business day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding business day in the place of receipt.
Failure of copies of notices to be received by the parties to whom such copies
are required to be sent shall not affect the deemed receipt of the notice.
5.2. AMENDMENTS AND WAIVERS. (a) Any provision of this Agreement
may be amended or waived, but only if such amendment or waiver is in writing and
is signed, in the case of an amendment, by each party to this Agreement, or in
the case of a waiver, by the party against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
5.3. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective heirs, successors, legal representatives and permitted assigns;
PROVIDED that no Shareholder may assign, delegate or otherwise transfer any of
its rights or obligations under this Agreement other than to a Permitted
Transferee.
5.4. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the law of New York, without reference to its
conflicts of laws rules.
5.5. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
14
<PAGE>
5.6. CONSENT TO JURISDICTION; EXPENSES. (a) Any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
hereby shall be brought in any Federal Court sitting in New York, New York, or
any New York State Court sitting in New York, New York, and each of the parties
hereby consents to the exclusive jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient form. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Each of the Shareholders hereby appoints CT Corporation as
its authorized agent upon whom process may be served in any suit, action or
proceeding referred to herein. Without limiting the foregoing, each party
agrees that service of process on such party by any method provided in Section
5.1 shall be deemed effective service of process on such party and consents to
the personal jurisdiction of any Federal Court sitting in New York, New York, or
any New York State Court sitting in New York, New York.
(b) In any dispute arising under this Agreement among any of the
parties hereto, the costs and expenses (including, without limitation, the
reasonable fees and expenses of counsel) incurred by the prevailing party shall
be paid by the party that does not prevail.
5.7. SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable to any extent under applicable law, such provision
shall be interpreted as if it were written so as to be enforceable to the
maximum possible extent so as to effectuate the parties' intent to the maximum
possible extent, and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms to the maximum extent permitted by law.
5.8. COUNTERPARTS; THIRD PARTY BENEFICIARIES. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. No provision of this Agreement is intended to confer upon any
Person other than the parties hereto any rights or remedies hereunder.
5.9. ENTIRE AGREEMENT. This Agreement, the Share Purchase
Agreement,the Escrow Agreement, the Investor Letter and the Tax Covenant
constitute the entire agreement between the parties with respect to the subject
matter of this Agreement and supersede all prior agreements and understandings,
both oral and written, between the parties with respect to the subject matter of
this Agreement.
15
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
SITEL CORPORATION
By: /s/ Barry S. Major
------------------------------
Name: Barry S. Major
Title: Chief Financial Officer
BURMEL HOLDING NV
By: /s/ Henk P. Kruithof
------------------------------
Name: H. Kruithof
Title: Attorney
MERIT GROUP NV
By: /s/ Henk P. Kruithof
------------------------------
Name: H. Kruithof
Title: Director
/s/ Raymond F. Pipe
------------------------------
Raymond F. Pipe
/s/ Peter L.R. Godfrey
------------------------------
Peter L.R. Godfrey
<PAGE>
/s/ Andrew J. Tillard
------------------------------
Andrew J. Tillard
/s/ Martin J. Shields
------------------------------
Martin J. Shields
/s/ MEO Bilton, by her attorney, PLR Godfrey
--------------------------------------------
Margot E.O. Bilton
/s/ K.M. Mather, by her attorney, PLR Godfrey
--------------------------------------------
Katharine M. Mather
/s/ J.C. White, by his attorney, PLR Godfrey
--------------------------------------------
James C. White
/s/ Glenn Hurley
---------------------------------------
Glenn Hurley
/s/ TA Fitzherbert, by his attorney, PLR Godfrey
------------------------------------------------
Thomas A. Fitzherbert
17
<PAGE>
EXHIBIT 2.4(c)
Escrow Agreement dated September 3, 1996,
regarding acquisition of Mitre Plc (conformed copy)
<PAGE>
CONFORMED COPY
ESCROW AGREEMENT
AGREEMENT dated as of September 3, 1996 among SITEL Corporation, a
Minnesota corporation ("Buyer"), Merit Group NV, Burmel Holding NV, Raymond F.
Pipe, Peter L.R. Godfrey, Andrew J. Tillard, Martin J. Shields, Margot E.O.
Bilton, Katharine M. Mather, James C. White, Glenn Hurley, Thomas A. Fitzherbert
("Sellers"), and Firstar Trust Company, as Escrow Agent ("Escrow Agent").
W I T N E S S E T H:
WHEREAS, Buyer and Sellers have entered into a Share Purchase
Agreement dated June 6, 1996 (as amended, the "Share Purchase Agreement")
pursuant to which Buyer has agreed to purchase from Sellers and Sellers have
agreed to sell to Buyer 100% of the ordinary shares of Mitre, plc, an English
public limited company (the "Company Shares").
WHEREAS, pursuant to Section 10.2 of the Share Purchase Agreement,
Sellers may be obligated to make certain payments to Buyer;
WHEREAS, Buyer and Sellers have agreed that Buyer shall deposit the
Escrow Shares (as defined herein) with the Escrow Agent to be held and applied
by the Escrow Agent as provided in this Agreement,
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. (a) Capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to them in the Share Purchase
Agreement.
(b) As used in this Agreement, the following terms shall have the
following meanings:
"Buyer Stock" means the common stock, par value $.001 per share, of
Buyer.
"Escrow Shares" means the aggregate of the Seller Escrow Shares of all
the Sellers.
<PAGE>
"Expiration Date" shall have the meaning set forth in Section 4(d)
hereof.
"Seller Escrow Shares" means, with respect to each Seller, that number
of shares of Buyer Stock representing 10% of the number of shares of Buyer Stock
set forth opposite such Seller's name on Schedule 2.1 to the Share Purchase
Agreement under the heading "Purchase Consideration".
SECTION 2. APPOINTMENT OF ESCROW AGENT. Buyer and Sellers hereby
appoint the Escrow Agent to act as escrow agent on the terms and conditions set
forth herein and in the Share Purchase Agreement, and the Escrow Agent hereby
accepts such appointment on such terms and conditions.
SECTION 3. DEPOSIT OF ESCROW SHARES. In accordance with Section
2.2(d) of the Share Purchase Agreement, on the Completion Date, Buyer shall
deliver to the Escrow Agent the Escrow Shares in the form of one or more
certificates for 917,055 shares of Buyer Stock to be held and disbursed by the
Escrow Agent as provided herein. All certificates representing Escrow Shares
shall be delivered to the Escrow Agent endorsed to the order of the Escrow Agent
and shall be in suitable form for transfer by delivery, or shall be accompanied
by duly executed instruments of transfer or assignment in blank, with signatures
appropriately guaranteed, all in form and substance satisfactory to the Escrow
Agent. The Escrow Agent shall deposit, upon receipt, the Escrow Shares into a
separate account (the "Escrow Account") established for such purpose.
SECTION 4. RELEASE OF ESCROW SHARES. (a) If the Escrow Agent
receives a certificate (or any number of counterparts thereof) signed by Sellers
(or their Permitted Transferees) and an officer of Buyer and directing the
Escrow Agent as to distribution of all or any part of the Escrow Shares, the
Escrow Agent shall immediately distribute such shares from the Escrow Account as
directed in such certificate.
(b) In the event that Buyer has a claim against Sellers for payment
pursuant to Section 10.2 of the Share Purchase Agreement, Buyer may deliver to
Sellers and to the Escrow Agent a certificate signed by an officer of Buyer (an
"Escrow Account Payment Claim") (i) stating that Sellers are obligated to make a
payment to Buyer (a "Sellers' Payment") and (ii) specifying the amount of such
Sellers' Payment. Any Escrow Account Payment Claim must be received by the
2
<PAGE>
Escrow Agent no later than 40 days before the Expiration Date (as defined
herein).
(c) On the twentieth business day after receipt by the Escrow Agent
of an Escrow Account Payment Claim or, if sooner, the Expiration Date (as
defined herein), the Escrow Agent shall, subject to the provisions of Section 7
hereof, distribute to Buyer from the shares then held in the Escrow Account
shares having a value (determined pursuant to Section 5 hereof) equal to the
amount of the Sellers' Payment as stated in such Escrow Account Payment Claim.
(d) Subject to Sections 4(c) and 7(c) hereof, if any shares remain on
deposit with the Escrow Agent hereunder on the earlier of (i) the first
anniversary of the Completion Date, and (ii) completion of the first combined
audit of Buyer and Mitre, plc (the "Expiration Date"), the Escrow Agent shall on
that date deliver such shares to the Sellers with each Seller receiving the
portion of such shares that is equal to the Seller Escrow Shares of such Seller
divided by the Escrow Shares.
(e) Each Seller shall have the option, in respect of any Sellers'
Payment which is the subject of any Escrow Account Payment Claim, to pay such
amounts in cash.
SECTION 5. VALUATION OF ESCROW SHARES. For purposes of any delivery
of Escrow Shares pursuant to this Agreement, the Escrow Shares shall be valued
at the average of the closing prices of the Buyer Stock on the NASDAQ on the
Completion Date.
SECTION 6. CASH PAYMENTS. As soon as practicable after such time as
any Seller makes a cash payment pursuant to Section 4(e) or 7(c) hereof (a "Cash
Payment"), the Escrow Agent shall release to such Seller that number of Escrow
Shares having a value (determined pursuant to Section 5 hereof) equal to the
amount of such Cash Payment.
SECTION 7. DISPUTES. (a) Buyer shall deliver to Sellers a copy of
each Escrow Account Payment Claim simultaneously with its delivery to the Escrow
Agent. If Sellers object to Buyer's claim for any Sellers' Payment in any
Escrow Account Payment Claim, they shall notify (a "Notice of Dispute") Buyer
and the Escrow Agent before the sooner of (i) the twentieth business day after
receipt of such Escrow Account Payment Claim and (ii) 30 days before the
Expiration Date. If Sellers fail to deliver a Notice of Dispute to Buyer and
the Escrow Agent before such twentieth business day or 30 days before the
Expiration Date, the
3
<PAGE>
number of shares included in such Escrow Account Payment Claim shall be
conclusive and binding on all of the parties hereto whereupon the Escrow Agent
shall distribute to the Buyer from the Escrow Account the number of shares
stated in such Escrow Account Payment Claim. Any Notice of Dispute shall set
forth Sellers' calculation of such Sellers' Payment and the Escrow Agent shall
be entitled to rely thereon.
(b) If Buyer and the Escrow Agent receive a Notice of Dispute before
the earlier of such twentieth business day and 30 days before the Expiration
Date, Buyer and Sellers shall negotiate in good faith and use all reasonable
efforts to agree upon the rights of the respective parties with respect to such
Sellers' Payment. If Buyer and Sellers shall so agree, a certificate setting
forth such agreement shall be furnished to the Escrow Agent. The Escrow Agent
shall be entitled to rely upon any such certificate and shall make distribution
to Buyer or Sellers, as the case may be, from the Escrow Account in accordance
with the terms thereof as provided in Section 4(a).
(c) If after 10 days following receipt by Buyer and the Escrow Agent
of any Notice of Dispute, no final agreement has been reached between Buyer and
Sellers, Buyer shall appoint one arbitrator, Sellers OR Seller Representative
shall appoint one arbitrator, and the two arbitrators so appointed shall select
a third arbitrator. In the event such arbitrators cannot agree upon a third
arbitrator, a third arbitrator shall be selected in accordance with the rules as
then in effect of the American Arbitration Association. The decision of two of
the three arbitrators so appointed (the "Decision") shall be conclusive and
binding upon the parties to this Agreement and, notwithstanding anything to the
contrary contained herein, the Escrow Agent shall be entitled to rely on such
Decision and shall act in accordance with such Decision and make distribution
out of the Escrow Account in accordance therewith on the sooner of (i) the 11th
day after such Decision (or as soon thereafter as practicable) and (ii) the
Expiration Date, PROVIDED that if within 10 days after such Decision and prior
to the Expiration Date, any Seller makes a Cash Payment with respect to his
portion of the claim, the provisions of Section 6 shall apply to such Seller.
If the arbitrators fail to reach a Decision with respect to any Escrow Account
Payment Claim before the Expiration Date, the Escrow Agent shall (i) distribute
to the Buyer from the Escrow Account shares having a value (determined pursuant
to Section 5 hereof) equal to 50% of the amount of the Sellers' Payment as
stated in such Escrow Account Payment Claim, and (ii) distribute to Seller
Representative from the Escrow
4
<PAGE>
Account shares having a value (determined pursuant to Section 5 hereof) equal to
50% of the amount of the Sellers' Payment as stated in such Escrow Account
Payment Claim. Any such arbitration shall be held in New York, New York under
the rules to be mutually agreed upon by the arbitrator selected by Buyer and the
arbitrator selected by Sellers OR Seller Representative or, if no such agreement
can be reached, under the rules as then in effect of the American Arbitration
Association. Each party to any such arbitration shall pay its own expenses;
however, the fees, costs and expenses of the third arbitrator shall be borne by
Sellers if the difference between the amount as calculated by the Buyer and the
amount as finally determined is less than or equal to the difference between the
amount as calculated by the Sellers and the amount as finally determined;
otherwise, such fees, costs and expenses shall be borne by Buyer.
SECTION 8. RIGHT TO VOTE ESCROW SHARES. Sellers shall have the
right, from time to time, to vote and to give consents, ratifications and
waivers with respect to the Escrow Shares, and the Escrow Agent shall, upon
receiving a written request from Sellers, deliver to Sellers or as specified in
such request such proxies, powers of attorney, consents, ratifications and
waivers in respect of any Escrow Shares registered in the name of the Escrow
Agent or its nominee as shall be specified in such request and be in form and
substance satisfactory to the Escrow Agent.
SECTION 9. INTERNAL REVENUE SERVICE FORMS; TAX OWNERSHIP. (a) Within
90 days after receipt of a request therefor from the Escrow Agent, each Seller
shall provide the Escrow Agent with the appropriate form prescribed by the
Internal Revenue Service certifying that such Seller is entitled to benefits
under an income tax treaty to which the United States is a party that exempts
such Seller from United States withholding tax or reduces the rate of
withholding tax on payments of dividends on the Escrow Shares or certifying that
dividends on the Escrow Shares are effectively connected with the conduct of a
trade or business in the United States.
(b) Buyer and each Seller agree (i) that the Sellers are the owners
of the Escrow Shares for tax purposes and (ii) any and all dividends paid with
respect to the Escrow Shares shall be beneficially owned by Sellers and
distributed currently to Sellers.
SECTION 10. TERMINATION OF ESCROW ACCOUNT. This Agreement shall
terminate when the Escrow Agent shall have released from the Escrow Account all
shares pursuant to Section 4 hereof.
5
<PAGE>
SECTION 11. ESCROW AGENT. The Escrow Agent shall have no duty or
obligation hereunder other than to take such specific actions as are required of
it from time to time under the provisions hereof, and it shall incur no
liability hereunder or in connection herewith for anything whatsoever other than
as a result of its own gross negligence or willful misconduct. The Escrow Agent
shall be entitled to retain counsel to represent such Escrow Agent in any
dispute or proceeding arising under or in connection with this Agreement.
Sellers (jointly and severally) and Buyer each agree to indemnify, hold harmless
and defend the Escrow Agent as to 50% each from and against any and all losses,
claims, liabilities and reasonable expenses, including the reasonable fees of
its counsel, which it may suffer or incur hereunder, or in connection herewith,
except such as shall result solely and directly from its own gross negligence or
willful misconduct. The Escrow Agent shall not be bound in any way by any
agreement or contract between Buyer and Sellers (whether or not the Escrow Agent
has knowledge thereof) and the only duties and responsibilities of the Escrow
Agent shall be to hold the Escrow Shares received hereunder and to release such
Escrow Shares in accordance with the terms of this Escrow Agreement and the
Share Purchase Agreement. The Escrow Agent's fees and expenses for acting as
Escrow Agent hereunder are set forth in Schedule I hereto. Buyer on the one
hand, and Sellers on the other hand, shall each pay 50% of such fees and
expenses.
SECTION 12. MISCELLANEOUS
(a) NOTICES. All notices or other communications to either party
hereunder shall be in writing (including telex, telecopy or similar writing) and
shall be given,
if to any Seller, to:
Mitre plc
Merit House
Timothy's Bridge
Stratford-upon-Avon
Warwickshire, CV37 9HY
Attention: Peter L.R. Godfrey
Fax: 44-1789-200238
with a copy to:
6
<PAGE>
Taylor Joynson Garrett
Carmelite
50 Victoria Embankment
Blackfriars
London EC4Y ODX
Attention: Gordon Jackson
Fax: 44-171-936-2666
if to Buyer, to:
SITEL Corporation
13215 Birch Street
Suite 100
Omaha, NE 68164
Attention: Barry Majors, Chief Financial Officer
Fax: (402) 498-2699
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: William L. Rosoff, Esq.
Fax: (212) 450-4800
if to the Escrow Agent, to:
Firstar Trust Company
101 East 5th Street
St. Paul, MN 55101
Attention: Corporate Trust Department,
Frank Leslie
Fax: (612) 229-6415
(b) SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties and their respective
heirs, legal representatives, successors and assigns.
(c) GOVERNING LAW. This Agreement shall be construed in accordance
with and governed by the law of the State of New York, without regard to the
conflicts of law rules of such state.
(d) AMENDMENTS. Any provision of this Agreement may be amended or
waived if, and only if, such amendment or waiver is in writing and is signed, in
the case of an amendment, by each party hereto, or in the case of a waiver, by
the party against whom the waiver is to be effective.
7
<PAGE>
(e) COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement shall become effective when each party hereto shall have received a
counterpart hereof signed by the other party hereto.
(f) CAPTIONS. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
SITEL CORPORATION
By: /s/ Barry S. Major
-------------------------------
Title: Chief Financial Officer
MERIT GROUP NV
By: /s/ Henk P. Kruithof
-------------------------------
Title: Director
BURMEL HOLDING NV
By: /s/ Henk P. Kruithof
-------------------------------
Title: Attorney
RAYMOND F. PIPE
/s/ Raymond F. Pipe
------------------------------------
PETER L.R. GODFREY
/s/ Peter L.R. Godfrey
------------------------------------
ANDREW J. TILLARD
/s/ Andrew J. Tillard
------------------------------------
<PAGE>
MARTIN J. SHIELDS
/s/ Martin J. Shields
-----------------------------------
MARGOT E.O. BILTON
/s/ MEO Bilton, by her attorney,
PLR Godfrey
------------------------------------
KATHARINE M. MATHER
/s/ Katharine Mather, by her
attorney, PLR Godfrey
------------------------------------
JAMES C. WHITE
/s/ J.C. White, by his attorney,
PLR Godfrey
------------------------------------
GLENN HURLEY
/s/ Glenn Hurley
------------------------------------
THOMAS A. FITZHERBERT
/s/ T.A. Fitzherbert, by his
attorney, PLR Godfrey
------------------------------------
<PAGE>
FIRSTAR TRUST COMPANY
as Escrow Agent
By: /s/ William Caruso
-------------------------------
Name: William Caruso
Title: Assistant Vice President
By: /s/ Yvonne Siira
-------------------------------
Name: Yvonne Siira
Title: Assistant Secretary
<PAGE>
Schedule I
ESCROW AGENT'S FEES AND EXPENSES
A one-time fee of $2,000.00 due at the Completion Date and payable as soon
as practicable thereafter. Additional charges may be incurred for
extraordinary or special services and out-of-pocket expenses, including but
not limited to, reasonable fees and expenses of outside counsel.
<PAGE>
EXHIBIT 2.4(d)
Form of Investor Letter (conformed copy)
<PAGE>
CONFORMED COPY
INVESTOR LETTER
September 3, 1996
SITEL Corporation
13215 Birch Street
Suite 100
Omaha, NE 68164
Re: Shares of SITEL Corporation
(the "Issuer")
-----------------------------
Dear Sirs,
In connection with my acquisition of
shares of common stock of the Issuer (the "Shares") on the date hereof, I
confirm that:
(1) I have received such information as I deem necessary in order to
make my investment decision with respect to the Shares.
(2) As a purchaser of the Shares in a private placement not
registered under the U.S. Securities Act of 1933 (the "Securities Act"), I
represent that I am purchasing such Shares for my own account, for investment
and not with a view to, or for sale in connection with, any distribution or
resale, directly or indirectly, in the United States or otherwise in violation
of the securities laws of the United States.
(3) I have such knowledge and experience in financial and business
matters that I am capable of evaluating the merits and risks of an investment in
the Shares and I further represent that I am an "accredited investor" within the
meaning of Regulation D under the Securities Act and I am able to bear the
economic risks of investment in the Shares.
<PAGE>
2
(4) I agree that if, prior to three years after the acquisition of
the Shares referred to above, I should decide to transfer any Shares acquired by
me, such Shares will not be offered, sold or delivered, directly or indirectly,
unless the transaction complies with the Registration Rights Agreement or, if
not registered under the Securities Act and applicable U.S. state laws and
regulations, the transaction (i) does not require registration of the Shares
under the Securities Act or any applicable U.S. state laws and regulations
governing the offer and sale of securities, and (ii) I therefore have furnished
to you an opinion of counsel (of recognized standing satisfactory to you and
experienced in giving opinions with respect to questions relating to the
securities laws of the United States) to such effect.
(5) I agree that the Shares shall bear the following legend:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933 AND ACCORDINGLY MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS SUCH OFFER OR SALE IS REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OF THE UNITED STATES AND THE SECURITIES REGULATORY
AUTHORITIES OF APPLICABLE STATES OR UNLESS AN EXEMPTION FROM REGISTRATION
IS AVAILABLE. THE TRANSFER OF THIS SECURITY IS SUBJECT TO CERTAIN
RESTRICTIONS SET FORTH IN AN INVESTMENT LETTER FROM THE HOLDER TO THE
ISSUER."
(6) Upon the earlier of the registration of the Shares under the
Securities Act and the first transfer of Shares pursuant to paragraph 4, the
legend referred to above will be removed in respect of those Shares, provided
that, in the case of Shares transferred pursuant to paragraph 4, the opinion of
counsel is to the further effect that neither such legend nor the restrictions
on transfer are required in order to ensure compliance with or exemption from
the provisions of the Securities Act.
(7) I request that the Shares that I have acquired as aforesaid be
registered in my name and that such Shares be delivered to
by registered
mail, which delivery shall be for my sole risk and expense.
<PAGE>
3
(8) I acknowledge that the Issuer will rely on the accuracy and truth
of the foregoing representations and my compliance with the foregoing agreement,
and I agree that any action or proceeding arising out of these representations
or agreements, which shall be construed in accordance with the internal laws of
the State of New York, may be brought against any of the parties in the courts
of the State of New York, or, if it has or can acquire jurisdiction, in the
United States District Court for the Southern District of New York, and each of
the parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts) in any such action or proceeding and waives any
objection to the laying of venue of any such action or proceeding therein.
Process in any such action or proceeding may be served on any party anywhere in
the world, whether within or without the State of New York.
Very truly yours,
-------------------------
<PAGE>
EXHIBIT 2.4(e)
Deed of Covenant dated September 3, 1996
between SITEL Corporation and the Mitre selling stockholders (conformed copy)
<PAGE>
CONFORMED COPY
3 SEPTEMBER 1996
THE COVENANTORS
SITEL CORPORATION
------------------------------
TAX COVENANT
------------------------------
<PAGE>
DEED OF COVENANT
A DEED made on 3 September 1996
BETWEEN:
THE PERSONS whose names are listed in Schedule 1 of this Deed (each a COVENANTOR
and together THE COVENANTORS); and
SITEL CORPORATION whose registered office is at 13215 Birch Street, Suite 100,
Omaha, NE 68164 (THE PURCHASER);
WHEREAS:
(A) By an agreement dated 6 June 1996 made between the Covenantors and the
Purchaser, as amended by an Amendment Agreement dated 26 July 1996, (THE SHARE
PURCHASE AGREEMENT), the Purchaser agreed to purchase the Shares (as therein
defined).
(B) Article 2 of the Share Purchase Agreement provides that the Covenantors
will deliver at Completion (as therein defined) a duly executed deed of covenant
in the form of this Deed.
THIS DEED WITNESSES as follows:
INTERPRETATION
1.1 Words and expressions defined in or for the purposes of the Share
Purchase Agreement and the Schedules thereto shall, except where expressly
defined in this Clause 1 or otherwise herein or where the context otherwise
requires, have the same meanings in this Deed.
1.2 The following definitions shall have the following meanings:
EVENT includes (without limitation) the death or the winding up or dissolution
of any person, and any act, transaction or omission whatsoever, and any
reference to an event occurring on or before a particular date shall include
events which for tax purposes are deemed to have, or are treated or regarded as
having, occurred on or before that date;
RELIEF includes, unless the context otherwise requires, any allowance, credit,
deduction, exemption or set-off in respect of any tax or relevant to the
computation of any income, profits or gains for the purposes of any tax, or any
other saving of tax, and:
(a) any reference to the USE or SET OFF of relief shall be construed
accordingly and shall include use or set off in part; and
<PAGE>
(b) any reference to the LOSS of a relief shall include the absence or
non-existence of any such relief, or to such relief being available
only in a reduced amount;
REPAYMENT OF TAX includes any repayment supplement or interest in respect of
tax, and any reference to LOSS of a right to repayment of tax includes its
non-existence, reduction or cancellation and to SET OFF shall include a set off
in part;
TAX includes (without limitation) corporation tax, advance corporation tax,
income tax (including income tax or amounts on account of income tax required to
be deducted or withheld from or accounted for in respect of any payment),
capital gains tax, inheritance tax, value added tax, national insurance
contributions, stamp duty, stamp duty reserve tax, duties of customs and excise,
petroleum revenue tax, rates, all taxes, duties or charges replaced by or
replacing any of them, and all other taxes on gross or net income, profits or
gains, distributions, receipts, sales, franchise, value added, and personal
property, and all levies, imposts, duties, charges or withholdings of any nature
whatsoever chargeable by any tax authority, and any payment whatsoever which the
Company or any Subsidiary may be or become bound to make to any person as a
result of the discharge by that person of any tax which the Company or any
Subsidiary has failed to discharge, together with all penalties, charges and
interest relating to any of the foregoing or to any late or incorrect return in
respect of any of them, and regardless of whether any such taxes, levies,
duties, imposts, charges, withholdings, penalties and interest are chargeable
directly or primarily against or attributable directly or primarily to the
Company, any Subsidiary or any other person and of whether any amount in respect
of any of them is recoverable from any other person;
TAX AUTHORITY means any taxing or other authority (whether within or outside the
United Kingdom) competent to impose any tax liability;
TAX CLAIM means the issue of any notice, demand, assessment, letter or other
document by or on behalf of any tax authority or the imposition (or any document
referring to the possible imposition) of any withholding of or on account of
tax, from which it appears that a tax liability will be imposed on the Company
or any Subsidiary;
TAX LIABILITY means both a liability of the Company or any Subsidiary to make or
suffer an actual payment of tax (or an amount in respect of tax) and also:
(a) the loss, or the use or set off against income, profits or gains
earned, accrued or received on or before Completion Date, of any
relief which arises or would but for such loss have arisen in respect
of an event occurring or period ending on or before Completion which
would (were it not for the said loss, use or set off) have been
available to the Company or any Subsidiary following Completion and
which was taken into
<PAGE>
account in computing the provision for deferred tax in the Financial
Statements or in eliminating such provision, or was taken into account
as an asset in the Financial Statements;
(b) the use or set off of any relief which arises in respect of an event
occurring after Completion Date in circumstances where, but for such
use or set off, the Company or any Subsidiary would have had an actual
tax liability in respect of which it would have been able to make a
claim against the Covenantors under this Deed; and
(c) the loss by the Company or any Subsidiary of a right to repayment of
tax which right was taken into account as an asset in preparing the
Financial Statements, or the set off of any right to repayment of tax
against any actual tax liability in respect of which the Company or
any Subsidiary would, but for that set off, have been able to make a
claim against the Covenantors under this Deed;
and, in any case falling within any of paragraphs (a), (b) and (c) above, the
amount that is to be treated for the purposes of this Deed as a tax liability of
the Company or the Subsidiary shall be determined as follows:
(i) in a case which falls within paragraph (a) or (b) above and where the
relief that is the subject of the loss or which is used or set off as
mentioned in those paragraphs is a deduction from or offset against
tax, the tax liability shall be the amount of that relief so lost,
used or set off;
(ii) in a case which falls within paragraph (a) or (b) above and where the
relief that is the subject of the loss or which is used or set off as
mentioned in those paragraphs is a deduction from or offset against
income, profits or gains, the tax liability shall be, in the case of a
relief which is used or set off, the amount of tax saved thereby and,
in the case of a relief which is lost, the amount of tax which but for
such loss would have been saved by virtue of the relief so lost,
ignoring for this purpose the effect of reliefs (other than deductions
in computing profits for the purpose of tax) arising in respect of an
event occurring or period ending after Completion; and
(iii) in a case which falls within paragraph (c) above, the tax liability
shall be the amount of the repayment that would have been obtained but
for the loss or setting off mentioned in that sub-paragraph;
1.3 Any reference to income, profits or gains EARNED, ACCRUED OR RECEIVED
on or before a particular date or in respect of a particular period shall
include income, profits or gains which for tax purposes are deemed to have been
or are treated or regarded as earned, accrued or received on or before that date
or in respect of that period.
<PAGE>
1.4 Any reference to something occurring (including a tax liability
arising) in THE ORDINARY COURSE OF BUSINESS shall, without prejudice to the
generality thereof, be deemed not to include:
(a) anything which involves, or leads directly or indirectly to, the
receipt by the Company or any Subsidiary of a tax claim in respect of
any liability to tax of, or properly attributable to, another person,
firm or company (other than the Company or any Subsidiary);
(b) anything which relates to or involves the acquisition or disposal of
an asset or the supply of services (including the lending of money, or
the hiring or licensing of tangible or intangible property) in a
transaction which is not entered into on arm's length terms; or
(c) anything which relates to or involves the making of a distribution for
tax purposes, the creation, cancellation or re-organisation of share
or loan capital, the creation, cancellation or repayment of any
intra-group debt or any company becoming or ceasing or being treated
as ceasing to be a member of a group of companies or as becoming or
ceasing to be associated or connected with any other company for any
tax purposes.
1.5 Any reference to an EVENT OCCURRING ON OR BEFORE THE COMPLETION DATE
shall be deemed to include a series or combination of events provided the first
event shall have occurred on or before Completion and any other events shall
arise directly from the first event and would not otherwise have so arisen.
1.6 Persons shall be treated as CONNECTED for the purposes of this Deed if
they are connected within the meaning of section 839 of the Taxes Act.
1.7 The rule known as the ejusdem generis rule shall not apply and
accordingly:
(a) general words shall not be given a restrictive meaning by reason of
the fact that they are preceded by words indicating a particular class
of acts, matters or things; and
(b) general words shall not be given a restrictive meaning by reason of
the fact that they are followed by particular examples intended to be
embraced by the general words.
1.8 The headings in this Deed shall not affect its interpretation.
COVENANT
2. Subject to clause 3 below, the Covenantors hereby jointly and
severally covenant with the Purchaser (for itself and as trustee for its
successors in title) to pay to the Purchaser an amount equivalent to):
<PAGE>
2.1 any tax liability arising in respect of, by reference to or in
consequence of:
(a) any income, profits or gains earned, accrued or received on or before
Completion;
(b) any event which occurs or occurred on or before Completion; and
2.3 any tax liability which the Company or any Subsidiary is or becomes
required to discharge by virtue of its relationship at any time before
Completion with any person (other than the Company or any Subsidiary) and for
which that other person is primarily liable.
EXCLUSIONS
3.1 The covenant contained in clause 2 shall not cover any tax liability
to the extent that:
(a) provision or reserve in respect of that tax liability has been made in
the Financial Statements (or the tax liability has been noted therein)
or in the Management Accounts; or
(b) the tax liability arises in respect of or by reference to any income,
profits or gains earned in respect of the period, or any event
occurring, between the Balance Sheet Date and Completion and which
arises in the ordinary course of business of the Company or the
Subsidiary to which the tax liability relates.
3.2 The provisions of Article 10 of the Share Purchase Agreement shall
apply to limit the liability of the Covenantors to the Purchaser under this Deed
and shall be deemed incorporated herein.
COSTS AND EXPENSES
4. The covenant contained in this Deed shall extend to all costs and
expenses incurred by the Purchaser in connection with a claim under this Deed or
in connection with the subject matter of any such claim.
WITHHOLDINGS
5. All sums payable by the Covenantors under this Deed shall be paid free
and clear of all deductions or withholdings unless the deduction or withholding
is required by law, in which event the Covenantors shall pay such additional
amount as shall be required to ensure that the net amount received by the
Purchaser, the Company or the Subsidiary concerned under this Deed will equal
the full amount which would have been received by it had no such deduction or
withholding been required to be made.
<PAGE>
TAX ON COVENANT PAYMENTS
6. If any tax authority brings into charge to tax any sum paid to the
Purchaser under this Deed (including in circumstances where any relief is
available in respect of such charge to tax), then the Covenantors shall pay such
additional amount as shall be required to ensure that the total amount paid,
less the tax chargeable on such amount (or that would be so chargeable but for
such relief), is equal to the amount that would otherwise be payable under this
Deed.
DUE DATE OF PAYMENT AND INTEREST
7.1 Where a claim under this Deed relates to a liability to make or suffer
an actual payment or increased payment of tax or an amount in respect thereof
(including, without limitation, any case where a payment under this Deed itself
results in further tax becoming due), the Covenantors shall pay to the Purchaser
the amount claimed under this Deed in respect of that tax claim on or before the
date which is the later of the date ten Business Days after demand is made
therefor by or on behalf of the claimant and the fifth Business Day prior to the
first date on which the tax in question becomes recoverable by the tax authority
or person demanding the same. Provided that, if the date on which the tax can be
recovered is deferred following application to the appropriate authority and the
Covenantors indemnify and secure the Purchaser to its reasonable satisfaction in
respect of the tax that is so deferred, the date for payment by the Covenantors
shall be the earlier of the date on which the tax becomes recoverable by the
relevant tax authority (notwithstanding any initial deferral) and such date when
the amount of tax is finally and conclusively determined. For this purpose, an
amount of tax shall be deemed to be finally determined when, in respect of such
amount, an agreement under section 54 of the Taxes Management Act 1970 or any
legislative provision corresponding to that section is made or a decision of a
court or tribunal is given from which either no appeal lies or in respect of
which no appeal is made within the prescribed time limit.
7.2 Where a claim under this Deed relates to the loss or set off of a
right to a repayment of tax, the Covenantors shall pay to the Purchaser the
amount claimed under this Deed in respect of that tax claim on or before the
date which is the later of the date ten Business Days after demand is made
therefor by or on behalf of the claimant and the date when such repayment would
have been due were it not for such loss or setting off.
7.3 Where a claim under this Deed relates to the loss, use or set off of
any relief, the Covenantors shall pay to the Purchaser the amount claimed under
this Deed in respect of that tax claim on or before the date which is the later
of the date ten Business Days after demand is made therefor by or on behalf of
the claimant, and (a) in the case of a relief which is used or set off, the date
on which the tax saved thereby would otherwise have become recoverable by the
relevant tax authority, or (b) in the case of a relief which is lost, the date
on which the tax which but for such loss would have been saved by virtue of such
<PAGE>
relief becomes recoverable by the relevant tax authority, or would have become
so recoverable if the effect of reliefs (other than deductions in computing
profits for the purposes of tax) arising in respect of an event occurring or
period ending after Completion were ignored.
7.4 Any sum not paid by the Covenantors or to the Covenantors on the due
date for payment specified under this Deed shall bear interest (which shall
accrue from day to day after as well as before any judgment for the same) at the
rate of 2 per cent. per annum over the base rate of Barclays Bank plc (or in the
absence of such rate at such similar rate as the Purchaser, or the Covenantors
(as the case may be) shall select) from the due date to and including the day of
actual payment of such sum, compounded quarterly. Such interest shall be paid
on the demand of the Purchaser or the Covenantors (as the case may be).
ILLEGALITY
8. If at any time any provision of this Deed is or becomes illegal,
invalid or unenforceable in any respect under the law of any jurisdiction,
neither the legality, validity or enforceability of the remaining provisions
hereof nor the legality, validity or enforceability of such provision under the
law of any other jurisdiction shall in any way be affected or impaired thereby.
WAIVER
9. No delay or omission of the Purchaser in exercising any right or power
hereunder shall impair such right or power or be construed as a waiver thereof
and any single or partial exercise of any such right or power shall not preclude
the further exercise of any right or power. The rights and remedies of the
Purchaser provided in this Deed are cumulative and not exclusive of any rights
and remedies provided by law.
ASSIGNMENT
10. The whole or any part of the benefit of this Deed may be assigned by
the Purchaser to the intent that the covenant given under this Deed shall enure
for the benefit of their successors and assigns.
NOTICES
11.1 Any notice under this Deed shall be in writing and signed by or on
behalf of the party giving it and may be served by leaving it or sending it by
telex, facsimile, prepaid recorded delivery or registered post to the address
and attention of the relevant party set out in clause 11.2 (or as otherwise
notified from time to time hereunder or pursuant to the Share Purchase
Agreement). Any notice so served shall be deemed to have been received:
(a) in the case of telex or facsimile, twelve (12) hours after the time of
dispatch;
<PAGE>
(b) in the case of recorded delivery or registered post, forty eight (48)
hours from the date of posting.
11.2 The addresses of the parties for the purposes of clause 11.1 are as
follows:
THE COVENANTORS:
Address Vivier Hanquet 10
1390 Grez Doiceau
Belgium
For the attention of: Mr Henk Kruithof
Facsimile: 32 10 84 10 00
THE PURCHASER: SITEL Corporation
Address 13215 Birch Street
Suite 100
Omaha, NE 68164
For the attention of: Barry Majors, Chief Financial Officer
Facsimile: (402) 498 2699
GOVERNING LAW
12.1 This Deed shall be governed by and construed in accordance with the
laws of England.
12.2 Each of the parties hereto irrevocably submits, for the benefit of the
others, to the non-exclusive jurisdiction of the courts of England.
COUNTERPARTS
13. This Deed may be executed in any number of counterparts and by the
parties to it on separate counterparts, each of which, when executed and
delivered, shall be an original, but all the counterparts shall together
constitute one and the same instrument.
IN WITNESS whereof this Deed has been executed the day and year first before
written.
<PAGE>
SCHEDULE 1
(THE COVENANTORS)
Merit Group NV
Burmel Holding NV
Ray F Pipe
Peter L R Godfrey
Andrew J Tillard
Martin J Shields
M E O Bilton
K M Mather
J C White
G Hurley
The Hon T A Fitzherbert
<PAGE>
EXECUTED and DELIVERED as a )
DEED by SITEL CORPORATION ) BARRY S. MAJOR
acting by its President and Chief )
Financial Officer: ) MICHAEL P. MAY
EXECUTED and DELIVERED )
as a DEED by MERIT GROUP NV ) HENDRICUS KRUITHOF
acting by two managing directors: )
EXECUTED and DELIVERED )
as a DEED by )
BURMEL HOLDING NV ) HENDRICUS KRUITHOF
acting by two managing directors: )
SIGNED AS A DEED AND )
DELIVERED BY RAY F PIPE ) RAYMOND FRANCIS
IN THE PRESENCE OF: ) PIPE
Witness - Name: ALISON E BYRNE
Address: 65 Fleet Street
London EC4Y 1HS
SIGNED AS A DEED AND )
DELIVERED BY ) PETER LEA RACE
PETER L R GODFREY ) GODFREY
IN THE PRESENCE OF: )
Witness - Name: ALISON E BYRNE
Address: 65 Fleet Street
London EC4Y 1HS
<PAGE>
SIGNED AS A DEED AND )
DELIVERED BY ) ANDREW JOHN TILLARD
ANDREW J TILLARD )
IN THE PRESENCE OF: )
Witness - Name: ALISON E BYRNE
Address: 65 Fleet Street
London EC4Y 1HS
SIGNED AS A DEED AND )
DELIVERED BY ) MARTIN JAMES SHIELDS
MARTIN J SHIELDS )
IN THE PRESENCE OF: )
Witness - Name: ALISON E BYRNE
Address: 65 Fleet Street
London EC4Y 1HS
SIGNED AS A DEED AND ) PETER LEA RACE
DELIVERED BY ) GODFREY under his
M E O BILTON ) power of attorney on
IN THE PRESENCE OF: ) behalf of MARGOT
ELIZABETH OLIVE
BILTON
Witness - Name: ALISON E BYRNE
Address: 65 Fleet Street
London EC4Y 1HS
<PAGE>
SIGNED AS A DEED AND ) PETER LEA RACE
DELIVERED BY K M MATHER ) GODFREY under his
IN THE PRESENCE OF: ) power of attorney on
behalf of KATHERINE
MARY MATHER
Witness - Name: ALISON E BYRNE
Address: 65 Fleet Street
London EC4Y 1HS
SIGNED AS A DEED AND ) PETER LEA RACE
DELIVERED BY J C WHITE ) GODFREY under his
IN THE PRESENCE OF: ) power of attorney on
behalf of JAMES
CHRISTOPHER WHITE
Witness - Name: ALISON E BYRNE
Address: 65 Fleet Street
London EC4Y 1HS
SIGNED AS A DEED AND )
DELIVERED BY G HURLEY ) GLENN HURLEY
IN THE PRESENCE OF: )
Witness - Name: ALISON E BYRNE
Address: 65 Fleet Street
London EC4Y 1HS
<PAGE>
SIGNED AS A DEED AND ) PETER LEA RACE
DELIVERED BY ) GODFREY under his
THE HON T A FITZHERBERT ) power of attorney on
IN THE PRESENCE OF: ) behalf of
THOMAS ALISTAIR
FITZHERBERT
Witness - Name: ALISON E BYRNE
Address: 65 Fleet Street
London EC4Y 1HS
