<PAGE>
Exhibit 2.1
EXECUTION COPY
SECURITIES ACQUISITION AGREEMENT
Dated as of
April 26, 2005
Between
AVNET, INC.,
the Buyer,
THE SELLERS,
as named herein
and
MEMEC GROUP HOLDINGS LIMITED
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TABLE OF CONTENTS
(This Table of Contents is for convenience
of reference only and is not intended
to define, limit or describe the scope or
intent of any provision of this
Agreement.)
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ARTICLE ONE
DEFINITIONS................................................
2
SECTION
1.1
Definitions......................................
2
SECTION
1.2.
Required Sellers................................. 11
SECTION
1.3.
Accession to this Agreement...................... 11
ARTICLE TWO TERMS OF THE
TRANSACTION................................... 12
SECTION
2.1.
Exchange of Securities........................... 12
SECTION
2.2.
Closing.......................................... 13
SECTION
2.3.
No Liens......................................... 16
SECTION
2.4.
Issuance of Buyer Shares......................... 16
SECTION
2.5.
Waiver and Release............................... 16
ARTICLE THREE REPRESENTATIONS AND WARRANTIES OF
THE SELLERS............ 17
SECTION
3.1.
Power and Authority.............................. 17
SECTION
3.2.
The Securities................................... 17
SECTION
3.3.
Securities Laws.................................. 17
SECTION
3.4.
Articles......................................... 18
ARTICLE FOUR REPRESENTATIONS AND WARRANTIES OF
THE COMPANY............. 18
SECTION
4.1.
Power and Capacity............................... 18
SECTION
4.2.
Organization and Qualification................... 19
SECTION
4.3.
Conflicting Instruments; Consents................ 19
SECTION
4.4.
Transfer of the Securities....................... 20
SECTION
4.5.
Capitalization................................... 20
SECTION
4.6.
Subsidiaries..................................... 20
SECTION
4.7.
Financial Statements............................. 21
SECTION 4.8. Real
Property.................................... 22
SECTION
4.9.
Personal Property................................ 22
SECTION
4.10.
Accounts Receivable and Inventory................ 23
SECTION
4.11.
Personnel........................................ 23
SECTION
4.12.
Labor Matters.................................... 23
SECTION
4.13.
Environmental Matters............................ 24
SECTION
4.14.
Non-ERISA Plans.................................. 25
SECTION
4.15.
ERISA Plans...................................... 27
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SECTION
4.16.
Compliance with Law; Export Control
Laws............................................. 29
SECTION
4.17.
Litigation....................................... 30
SECTION
4.18.
Material Contracts............................... 30
SECTION
4.19.
Absence of Certain Changes....................... 31
SECTION
4.20. Tax
Matters...................................... 33
SECTION 4.21.
Insurance........................................ 35
SECTION
4.22.
Intellectual Property............................ 35
SECTION
4.23.
Permits.......................................... 38
SECTION
4.24.
Customers and Suppliers.......................... 38
SECTION
4.25.
Fees............................................. 39
SECTION
4.26.
Controls and Procedures.......................... 39
ARTICLE FIVE REPRESENTATIONS AND WARRANTIES OF
THE BUYER............... 39
SECTION
5.1.
Organization and Qualification................... 39
SECTION
5.2.
Conflicting Instruments; Consents................ 40
SECTION
5.3.
SEC Filings...................................... 40
SECTION
5.4.
Capitalization................................... 40
SECTION
5.5.
Litigation....................................... 41
SECTION
5.6.
Absence of Certain Changes....................... 41
SECTION
5.7.
Brokers and Finders Fees......................... 41
SECTION
5.8.
No Stockholder Vote Required..................... 41
SECTION
5.9.
Buyer Environmental Matters...................... 41
SECTION
5.10.
Controls and Procedures.......................... 43
SECTION
5.11. Tax
Matters...................................... 43
ARTICLE SIX
COVENANTS..................................................
44
SECTION
6.1.
Access........................................... 44
SECTION
6.2.
Transfer of the Securities....................... 45
SECTION
6.3.
Conduct of the Business of the Company........... 45
SECTION
6.4.
Conduct of the Business of the Buyer............. 47
SECTION
6.5.
Further Assurances; Approvals; Consents.......... 47
SECTION
6.6.
Notice of Default................................ 48
SECTION
6.7.
Non-Solicitation................................. 48
SECTION
6.8.
Employees........................................ 49
SECTION
6.9.
Restrictions on Transfer of Buyer
Shares........................................... 50
SECTION
6.10.
Confidentiality.................................. 50
SECTION
6.11.
Shareholder Approval............................. 51
SECTION
6.12. Tax
Clearance.................................... 52
ARTICLE SEVEN CONDITIONS TO THE BUYER'S
OBLIGATIONS.................... 52
SECTION
7.1.
Representations and Warranties................... 52
SECTION
7.2.
Legal Matters.................................... 52
SECTION
7.3.
Related Party Transactions....................... 53
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SECTION
7.4.
Tax Matters...................................... 53
SECTION
7.5.
Other Conditions................................. 54
ARTICLE EIGHT CONDITIONS TO THE COMPANY AND THE
SELLERS'
OBLIGATIONS........................................... 54
SECTION
8.1.
Representations and Warranties................... 54
SECTION 8.2.
Legal Matters.................................... 55
SECTION
8.3.
Other Conditions................................. 55
ARTICLE NINE
TERMINATION...............................................
55
SECTION
9.1.
Termination...................................... 55
SECTION
9.2.
Effect of Termination............................ 56
ARTICLE TEN
MISCELLANEOUS..............................................
56
SECTION
10.1.
Expenses......................................... 56
SECTION
10.2.
Governing Law.................................... 57
SECTION
10.3.
Notices.......................................... 57
SECTION
10.4.
Jurisdiction..................................... 58
SECTION
10.5.
Entire Agreement................................. 58
SECTION
10.6.
Binding Effect................................... 59
SECTION
10.7.
Amendments; Waivers.............................. 59
SECTION
10.8.
Counterparts..................................... 59
SECTION
10.9
Severability..................................... 59
SECTION
10.10. Specific
Performance............................. 59
SECTION
10.11.
Attorneys' Fees.................................. 60
SECTION
10.12. Survival
of the Representations and
Warranties....................................... 60
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CROSS REFERENCES
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Agreement...............................................................Preamble
Bond
Sellers............................................................Recitals
Bonds...................................................................Recitals
Buyer...................................................................Preamble
Closing...................................................................2.2(a)
Closing
Date..............................................................2.2(a)
Common
Shares................................................................5.4
Company.................................................................Preamble
Company
Marks............................................................4.22(b)
Company Registered
Marks.................................................4.22(a)
Confidential
Information.................................................6.10(a)
Drop Dead
Date............................................................9.1(b)
ERISA....................................................................4.15(a)
ERISA
Plans..............................................................4.15(a)
Fees......................................................................7.3(b)
Financial
Statements......................................................4.7(a)
Funded
Plan..............................................................4.14(e)
GAAP......................................................................4.7(b)
Inbound License Agreements
..............................................4.22(e)
Key
Employee.............................................................4.11(a)
Leased Real
Property......................................................4.8(a)
Material
Contracts.......................................................4.18(a)
Multiemployer
Plan.......................................................4.15(d)
MUSH.....................................................................4.20(b)
Nondisclosure
Agreement...................................................6.1(d)
Non-ERISA
Plans..........................................................4.14(a)
Organizational
Documents..................................................4.3(a)
Outbound License Agreements
.............................................4.22(e)
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Owned Real
Property.......................................................4.8(a)
Payments....................................................................6.11
PBGC.................................................................4.15(b)(vi)
Pension
Plans............................................................4.15(a)
Permit......................................................................4.23
SEC Filing
Date..............................................................5.3
SEC
Filings..................................................................5.3
Section
280G................................................................6.11
Sellers.................................................................Preamble
Shares..................................................................Recitals
Subsidiaries..............................................................4.6(a)
USRPHC...................................................................4.20(d)
WARN......................................................................6.8(e)
Welfare
Plans............................................................4.15(a)
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SCHEDULES
Schedule A
Sellers and Bond Sellers
Schedule 3.2
Options
Schedule 4
Knowledge - Company
Schedule 4.3(a)
Conflicting Instruments
Schedule 4.3(b)
Filings
Schedule 4.5(a)
Capitalization
Schedule 4.5(b)
Options
Schedule 4.6
Subsidiaries
Schedule 4.8(a)
Real Property
Schedule 4.8(b)
Possession of Leased Property
Schedule 4.9
Personal Property
Schedule 4.11(a)
Key Employees
Schedule 4.11(b)
Powers of Attorney
Schedule 4.11(c)
Directors and Officers of the Company
Schedule 4.11(d)
Redundancy Payments
Schedule 4.12(a)
Labor Matters
Schedule 4.12(b)
Labor
Disputes
Schedule 4.13
Environmental Matters
Schedule 4.14(a)
Non-ERISA Plans
Schedule 4.14(b)
Non-ERISA Plan Documents
Schedule 4.14(f)
Additional Benefits
Schedule 4.15(a)
ERISA Plans
Schedule 4.15(k)
Change in Control Benefits
Schedule 4.16(b)
Compliance with Export Laws
Schedule 4.17
Litigation
Schedule 4.18(a)
Material Contracts
Schedule 4.18(c)
Obligations under Financing Arrangements
Schedule 4.19
Absence of Certain Changes
Schedule 4.20
Tax Matters
Schedule 4.21
Insurance
Schedule 4.22(a)(1)
Company Registered Marks
Schedule 4.22(a)(2)
IP Noncompliance
Schedule 4.22(d)
IP Ownership
Schedule 4.22(e)(1)
Inbound License Agreements
Schedule 4.22(e)(2)
Outbound License Agreements
Schedule 4.23
Permits
Schedule 4.24(a)
Customers
Schedule 4.24(b)
Suppliers
Schedule 4.25(a)
Brokers and Finders - Company
Schedule 4.25(b)
Fees and Expenses
Schedule 4.26
Controls and Procedures
Schedule 5
Knowledge - Buyer
Schedule 5.4
Options - Buyer
Schedule 5.6
Certain Changes
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Schedule 5.7
Brokers and Finders Fees - Buyer
Schedule 5.9
Buyer Environmental Matters
Schedule 6.3(b)
Conduct of Business Between Signing and Closing
Schedule 6.8(a)
Employment Agreements
Schedule 7.2
Antitrust Jurisdictions
Schedule 7.3
Related Party Transactions
EXHIBITS
Exhibit A
Form of Board Nominee Agreement
Exhibit B
Form of Registration Rights Agreement
Exhibit 2.2(b)(v)
Form of FIRPTA Certificate
Exhibit 2.2(d)(ii)
Form of Indemnity For Lost Certificate
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SECURITIES ACQUISITION AGREEMENT
THIS
SECURITIES ACQUISITION AGREEMENT (this "Agreement") is dated as
of
April 26, 2005 between Avnet, Inc., a New
York corporation (the "Buyer"), on the
one hand, and the Share Sellers and the
Bond Sellers (together, the "Sellers")
and Memec Group Holdings Limited, a company
incorporated in England and Wales
(the "Company"), on the other hand.
R E C I T A L S
A. The
Persons listed on Schedule A as holding shares either (i) own
directly, beneficially and as the
registered shareholders or (ii) are the
registered shareholders and have the legal
capacity to transfer the beneficial
title to, the issued shares of the Company
as set forth opposite their name on
Schedule A (the "Shares").
B. The
Buyer has made the Offer to acquire 100% of the share capital
of
the Company. The Offer is made on the terms
and conditions of this Agreement,
the Offer Document and the Form of
Acceptance.
C. As the
original parties to this Agreement are the Buyer, the Committed
Sellers and the Company, the provisions of
Section 1.3 provide for the accession
to this Agreement of the other persons
listed on Schedule A upon the execution
and delivery by any such person of the Form
of Acceptance to the Buyer whereupon
such Person will become a party, as a Share
Seller, to this Agreement.
D. The
Buyer desires to acquire the Shares of the Share Sellers, and
the
Share Sellers desire to sell their Shares
to the Buyer, all upon the terms and
subject to the conditions set forth in the
documents referred to in Recital B.
E.
Manchester Holdings Limited, a subsidiary of the Company,
issued
$403,414,000 face amount of Deep Discount
Bonds and $452,212,000 face amount of
Deep Discount Mezzanine Bonds
(collectively, the "Bonds") to the Sellers listed
on Schedule A (the "Bond Sellers").
F. The
Bond Sellers either: (i) own directly, beneficially and of
record;
or (ii) are the holders of record and have
the legal capacity to transfer the
beneficial title to, 100% of the Bonds.
G. The
Buyer desires to acquire the Bonds from the Bond Sellers, and
the
Bond Sellers desire to sell the Bonds to
the Buyer, all upon the terms and
subject to the conditions set forth in this
Agreement.
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A G R E E M E N T
NOW,
THEREFORE, in consideration of the foregoing and the mutual
covenants
contained in this Agreement and for other
valuable consideration the Buyer, the
Company and the Sellers agree as
follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1 DEFINITIONS.
"Acquisition Proposal" means any proposal for a merger or other
business
combination involving the Company or any of
the Subsidiaries or business units
or any proposal or offer to acquire in any
manner, directly or indirectly, more
than twenty percent (20%) of the
outstanding equity interests in the Company or
any of the Subsidiaries, more than twenty
percent (20%) of the outstanding
voting securities of the Company or any of
the Subsidiaries or more than twenty
percent (20%) of the assets of the Company
or the Subsidiaries (other than sales
of the Company's or the Subsidiaries'
products in the ordinary course of
business consistent with past practice or
transactions contemplated by this
Agreement).
"Agreement" has the meaning set forth in the preamble.
"Ancillary
Agreements" means the Registration Rights Agreement, the Board
Nominee Agreement, the Offer Document, the
Framework Agreement and the Form of
Acceptance.
"B
Director Consent" has the meaning set forth in the Framework
Agreement.
"B
Directors" has the meaning set forth in the Framework
Agreement.
"B Shares"
means the B Redeemable Shares of the Company, par value $0.01
per share.
"Balance
Sheet" means the audited consolidated balance sheet of the
Company as at December 31, 2004, including
the notes thereto.
"Balance
Sheet Date" means December 31, 2004.
"Board Nominee Agreement"
means the Board Nominee Agreement substantially
in the form of Exhibit A hereto.
"Bond Cash
Consideration" means (i) the Outstanding Bond Obligation Amount
times the Pro Rata Cash Portion minus (ii)
the Management Bonus; provided, that
in no event shall the Bond Cash
Consideration exceed $53,957,003.18.
"Bond
Resolutions" has the meaning set forth in the Framework
Agreement.
"Bonds"
has the meaning set forth in the Recitals.
"Bond
Sellers" has the meaning set forth in the Recitals.
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"Bond
Share Consideration" means the number of Buyer Shares calculated
by
dividing (i) the Outstanding Bond
Obligation Amount times the Pro Rata Share
Portion by (ii) the price of one Common
Share based on the five day average
closing price of the Common Shares on the
NYSE, as reported by The Wall Street
Journal, Eastern Edition, as of the end of
the Business Day prior to the Closing
Date; provided, that in no event shall the
Bond Share Consideration exceed the
Total Share Consideration.
"Business
Day" means any day, not being a Saturday or Sunday, on which
banks are generally open for business in
London and New York.
"Buyer"
has the meaning set forth in the preamble.
"Buyer
Environmental Losses" shall mean all Claims, losses, judgments,
damages (including damages for personal
injury, or injury to property),
penalties, fines, liabilities (including
strict liability), encumbrances, liens,
costs and expenses of investigation and
defense of any claim, whether or not
such claim is ultimately defeated, and of
any good faith settlement or judgment,
of whatever kind or nature, contingent or
otherwise, matured or unmatured,
foreseeable or unforeseeable (including
without limitation reasonable attorneys'
fees and disbursements and consultants'
fees), any of which are incurred at any
time as a result of: (A) the existence
prior to the Closing Date of Hazardous
Materials upon, about, or beneath the owned
or leased real property of the Buyer
or the Buyer Former Real Property or
migrating or threatening to migrate to or
from the owned or leased real property of
the Buyer or the Buyer Former Real
Property; or (B) a breach of Environmental
Requirements or any liability under
any Environmental Requirement relating to
the Buyer or any of its subsidiaries,
the owned or leased real property of the
Buyer, the Buyer Former Real Property,
or any real property or facility to which
Hazardous Materials generated by the
Buyer have been sent, regardless of whether
the existence of such Hazardous
Materials, liability or violation of
Environmental Requirements arose prior to
the ownership or operation of the owned or
leased real property of the Buyer or
the Buyer Former Real Property by the
Buyer.
"Buyer
Former Real Property" means real property owned by the Buyer
within
the last five years.
"Buyer
Material Adverse Effect" means any circumstance, change in or
effect on the Buyer and its subsidiaries
that, individually or in the aggregate
with all other circumstances, changes in or
effects on the Buyer and its
subsidiaries, is, or would reasonably be
expected to be, materially adverse to
the business or the assets, liabilities,
results of operations or financial
condition of the Buyer and its
subsidiaries, taken as a whole; provided,
however, that none of the following, either
alone or in combination, shall be
considered in determining whether there has
been a Buyer Material Adverse Effect
or a breach of a representation, warranty,
covenant or agreement that is
qualified by the term "Buyer Material
Adverse Effect": (a) events,
circumstances, changes or effects that
generally affect the industries in which
the Buyer and its subsidiaries operate, but
that do not have a disproportionate
impact on the Buyer and its subsidiaries;
(b) general economic or political
conditions or events, circumstances,
changes or effects affecting the industries
in which the Buyer and its subsidiaries
operate, but that do not have a
disproportionate impact on the Buyer and
its subsidiaries; (c) changes arising
from the consummation of the transactions
contemplated by, or the announcement
of the execution of, this
3
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Agreement; (d) any change in accounting
requirements or principles or change in
applicable Law; and (e) the taking of any
action approved or consented to in
writing by the Company and the Required
Sellers.
"Buyer
Shares" means the Common Shares to be issued to the Sellers in
accordance with this Agreement and to
Shareholders whose shares in the Company
are acquired by exercise of the compulsory
acquisition provisions in article 6
of the articles of association of the
Company (as amended from time to time)
including the application of those
provisions under the Option Plan.
"Cash
Escrow" means the Share Cash Consideration, any Option Exercise
Proceeds and any other funds in the escrow
account maintained by the Escrow
Agent for the benefit of the Share Sellers
and the Shareholders (or the Person
designated in writing by such Share Seller
or Shareholder, as the case may be,
at least three Business Days prior to
Closing).
"Claim"
means any writ, action, injunction, decree, order, demand,
judgment, lawsuit, claim, complaint,
proceeding, citation, directive, summons,
notice letter, request for information or
investigation undertaken or issued
under any Environmental Requirement.
"Closing"
has the meaning set forth in SECTION 2.2(a).
"Closing
Date" has the meaning set forth in SECTION 2.2(a).
"Code"
means the Internal Revenue Code of 1986, as amended.
"Committed
Sellers" means the Sellers who have executed the Framework
Agreement.
"Common
Shares" has the meaning set forth in SECTION 5.4.
"Company"
has the meaning set forth in the preamble.
"Company
Marks" has the meaning set forth in SECTION 4.22(b).
"Company
Registered Marks" has the meaning set forth in SECTION 4.22(a).
"Confidential Information" has the meaning set forth in SECTION
6.10(a).
"Copyrights" means copyrights (whether registered or unregistered)
and
registrations and applications
therefor.
"Data
Room" means the data rooms located in the offices of Simpson
Thacher
& Bartlett LLP located in Los Angeles,
California, New York, New York and
London, England and all documents therein
as reflected in the data room index or
delivered to the offices of Gibson, Dunn
& Crutcher LLP.
"Disclosure Schedule" means the schedules delivered by the Company
to the
Buyer concurrently herewith and identified
as the "Schedules". The Disclosure
Schedules have been
4
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delivered by the Company to the Buyer on
the date hereof and the Disclosure
Schedules have been reviewed and accepted
by the Buyer.
"Dragged
Shareholder" means those persons listed in Schedule A other
than
the Share Sellers.
"Drop Dead
Date" has the meaning set forth in SECTION 9.1(b).
"Environment" means all or any of the following media: air
(including air
within buildings or other natural or
man-made structures whether above or below
ground), water (including surface waters,
underground waters, groundwater,
coastal and inland waters and water within
any natural or man-made structures),
and land (including soil and river beds
under any waters, surface land and
sub-surfaced land).
"Environmental Losses" shall mean all Claims, losses, judgments,
damages
(including damages for personal injury, or
injury to property), penalties,
fines, liabilities (including strict
liability), encumbrances, liens, costs and
expenses of investigation and defense of
any claim, whether or not such claim is
ultimately defeated, and of any good faith
settlement or judgment, of whatever
kind or nature, contingent or otherwise,
matured or unmatured, foreseeable or
unforeseeable (including without limitation
reasonable attorneys' fees and
disbursements and consultants' fees), any
of which are incurred at any time as a
result of: (A) the existence prior to the
Closing Date of Hazardous Materials
upon, about, or beneath the Real Property
or Former Real Property or migrating
or threatening to migrate to or from the
Real Property or Former Real Property;
or (B) a breach of Environmental
Requirements or any liability under any
Environmental Requirement relating to the
Company or any of the Subsidiaries,
the Real Property, the Former Real
Property, or any real property or facility to
which Hazardous Materials generated by the
Company have been sent, regardless of
whether the existence of such Hazardous
Materials, liability or violation of
Environmental Requirements arose prior to
the ownership or operation of the Real
Property or the Former Real Property by the
Company or any of the Subsidiaries.
"Environmental Requirements" shall mean all and any Laws relating
to: (A)
the protection of human health or the
Environment; (B) the treatment, storage,
disposal, handling, release, investigation
or Remediation of Hazardous
Materials; or (C) exposure of persons to
Hazardous Materials.
"ERISA"
has the meaning set forth in SECTION 4.15(a).
"ERISA
Affiliate" means a corporation which is a member of a
controlled
group of corporations with the Company or
any Subsidiary within the meaning of
Section 414(b) of the Code, a trade or
business (including a sole
proprietorship, partnership, trust, estate
or corporation) which is under common
control with the Company or any Subsidiary
within the meaning of Section 414(c)
of the Code, or a member of an affiliated
service group with the Company or any
Subsidiary within the meaning of Section
414(m) or Section 414(o) of the Code.
"ERISA
Plans" has the meaning set forth in SECTION 4.15(a).
5
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"Escrow"
means the Cash Escrow and the Share Escrow.
"Escrow
Agent" means the escrow agent selected by the Buyer subject to
the
approval of the Required Sellers, which may
not be unreasonably withheld or
delayed.
"Escrow
Agreement" means the agreement dated as of the Closing Date
between the Required Sellers, the Buyer and
the Escrow Agent in a form
reasonably acceptable to the Buyer and the
Required Sellers.
"Exchange
Act" means the Securities and Exchange Act of 1934, as amended,
and the rules and regulations promulgated
thereunder.
"Fees" has
the meaning set forth in SECTION 7.3(b).
"Financial
Statements" has the meaning set forth in SECTION 4.7(a).
"Financing
Agreement" means any loan made by any shareholder of the
Company to the Company or any of the
Subsidiaries or any other agreement,
contract or arrangement under which the
Company or any of the Subsidiaries have
borrowed $5,000,000 or more (other than
intercompany loans).
"Form of
Acceptance" has the meaning set forth in the Offer Document.
"Former
Real Property" shall mean any real property or facility
formerly
owned, leased, occupied or operated by the
Company or any of its Subsidiaries.
"Framework
Agreement" means the agreement dated the same date as this
agreement relating to the Offer between the
Committed Sellers, the Buyer and the
Company.
"Funded
Plan" has the meaning set forth in SECTION 4.14(e).
"GAAP" has
the meaning set forth in SECTION 4.7(b).
"Governmental Authority" means any authorities, agencies,
departments,
commissions, boards, bureaus,
instrumentalities, courts or tribunals of any
federal, state, local or foreign
governments or governmental agencies,
departments, regulators or bodies.
"Hazardous
Materials" means any substance: (A) the presence of which
requires investigation or Remediation under
any Environmental Requirement; (B)
that is defined as a "solid waste,"
"hazardous waste," "hazardous substance,"
"hazardous material," "pollutant" or
"contaminant" under any Environmental
Requirement; (C) that is toxic, explosive,
corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic or
otherwise hazardous and is regulated by
any Governmental Authority; (D) the
presence of which causes or threatens to
cause a nuisance, trespass or other
tortious condition; (E) that contains
gasoline, diesel fuel, fuel oil, petroleum
hydrocarbons, PCBs, toxic molds,
asbestos, or urea formaldehyde foam
insulation; or (F) is otherwise regulated by
any Environmental Requirement.
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"HSR Act"
means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and the rules and regulations
promulgated thereunder.
"Impairments" has the meaning set forth in SECTION 4.8(c).
"Inbound License
Agreements" has the meaning set forth in SECTION 4.22(e).
"Intellectual Property" means all intellectual property rights
arising
from or associated with the following,
whether protected, created or arising
under the laws of the United States of
America or any other jurisdiction: (A)
Marks; (B) Patents; (C) Copyrights; (D)
Trade Secrets and (E) moral rights,
publicity rights and any other proprietary,
intellectual or industrial property
rights of any kind or nature that do not
comprise or are not protected by Marks,
Patents, Copyrights or Trade Secrets.
"Investment Agreement" means the investment agreement relating to
the
Company dated August 4, 2000 between the
Company, Manchester Holdings Limited,
the Managers (as defined therein), the
Investors (as defined therein) and
Schroder Venture Advisers.
"IRS"
means the Internal Revenue Service.
"Law"
means any federal, state, provincial, local or foreign statute,
subordinate legislation, law (including
common law), ordinance, regulation,
directive, rule, policy, code, practice,
circular, guidance and the like, or
order.
"Leased
Property" has the meaning set forth SECTION 4.8(a).
"Liens"
means any security interest, pledge, hypothecation, mortgage,
lien, restriction, encroachment, easement,
defect of title, adverse claim,
option, lease or other claim, charge or
encumbrance of any nature whatsoever.
"Majority
Share Sellers" means Permira Europe II Nominees Limited,
Permira
UK Ventures IV Nominees Limited, Schroder
Ventures US Fund LP1, Schroder
Ventures US Fund LP2 and DB Industrial
Holdings GmbH.
"Management Bonus" means the bonuses payable to employees of the
Company
pursuant to Section 6.8(a).
"Marks"
means trade names, trademarks and service marks (registered and
unregistered), domain names and other
Internet addresses or identifiers, trade
dress and similar rights, and applications
(including intent to use
applications) to register any of the
foregoing.
"Material
Adverse Effect" means any circumstance, change in or effect on
the Company and the Subsidiaries that,
individually or in the aggregate with all
other circumstances, changes in or effects
on the Company and the Subsidiaries,
is, or would reasonably be expected to be,
materially adverse to the business or
the assets, liabilities, results of
operations or financial condition of the
Company and the Subsidiaries, taken as a
whole; provided, however, that none of
the following, either alone or in
combination, shall be considered in
determining whether there has been a
Material Adverse Effect or a breach of a
representation, warranty, covenant or
7
<PAGE>
agreement that is qualified by the term
"Material Adverse Effect": (a) events,
circumstances, changes or effects that
generally affect the industries in which
the Company and the Subsidiaries operate
but that do not have a disproportionate
impact on the Company and the Subsidiaries;
(b) general economic or political
conditions or events, circumstances,
changes or effects affecting the industries
in which the Company and the Subsidiaries
operate, but that do not have a
disproportionate impact on the Company and
the Subsidiaries; (c) changes arising
from the consummation of the transactions
contemplated by, or the announcement
of the execution of, this Agreement; (d)
any change in accounting requirements
or principles or change in applicable Law;
and (e) the taking of any action
approved or consented to in writing by the
Buyer.
"Material
Contracts" has the meaning set forth in SECTION 4.18(a).
"Multiemployer Plan" has the meaning set forth in SECTION
4.15(d).
"MUSH" has
the meaning set forth in SECTION 4.20(b).
"Nondisclosure Agreement" has the meaning set forth in SECTION
6.1(d).
"Non-ERISA
Plans" has the meaning set forth in SECTION 4.14(a).
"NYSE"
means the New York Stock Exchange.
"Offer"
has the meaning set forth in the Offer Document.
"Offer
Document" has the meaning set forth in the Framework Agreement.
"Option"
shall mean any Option (as such term is defined in the Option
Plan) other than a Phantom Option (as such
term is defined in any Schedule to
the Option Plan).
"Option
Exercise Proceeds" means an amount equal to the aggregate
exercise
price paid to the Company by holders of
Options upon the exercise of Options
following the Closing Date.
"Option
Plan" means the Memec Group Holdings Limited Global Share
Option
Plan 2001.
"Organizational Documents" has the meaning set forth in SECTION
4.3(a).
"Outbound
License Agreements" has the meaning set forth in SECTION
4.22(e).
"Outstanding Bond Obligation Amount" means $473,314,143 plus
unpaid
interest and other amounts that accrue on
the Bonds between the date hereof and
the Closing Date.
"Owned
Real Property" has the meaning set forth in SECTION 4.8(a).
"Patents"
means patents and patent applications (including continuation,
divisional, continuation-in-part,
reexamination and reissue patent applications,
and any patents issuing therefrom), and
rights in respect of utility models or
industrial designs.
"PBCG" has
the meaning set forth in SECTION 4.15(b)(vi).
8
<PAGE>
"Pension
Plans" has the meaning set forth in SECTION 4.15(a).
"Permit"
has the meaning set forth in SECTION 4.23.
"Permitted
Lien" means (i) any Lien reflected on the Balance Sheet, (ii)
Liens reflected on Schedule 4.8, (iii)
Liens for Taxes and other governmental
charges and assessments that are not yet
due and payable, (iv) Liens for
carriers, warehousemen, mechanics and
materialmen and other like Liens arising
in the ordinary course of business, (v)
Liens incurred in the ordinary course of
business that are insignificant,
individually or in the aggregate, to the
operation of the Company's business and
(vi) easements, rights of way, title
imperfections and restrictions, zoning
ordinances and other Liens affecting any
real property that do not materially
interfere with the current use of the
properties affected thereby.
"Person"
means any individual, partnership, firm, corporation, limited
liability company, association, trust,
unincorporated organization or other
entity.
"Pro Rata
Cash Portion" means the quotient of (i) the Total Cash
Consideration divided by (ii) the Total
Consideration.
"Pro Rata
Share Portion" means 1.00 minus the Pro Rata Cash Portion.
"Property
Lease" means any agreement, including any amendments or
modifications thereto, pursuant to which
the Company or the Subsidiaries is the
tenant, subtenant, or occupant and which
has (i) an annual base rent of $250,000
or more or (ii) a remaining term of three
years or more (excluding any extension
options) and aggregate base rental
obligations of not less than $1,000,000 for
such remaining term.
"Real
Property" means the Owned Real Property and the Leased
Property.
"Registration Rights Agreement" means the Registration Rights
Agreement
substantially in the form of Exhibit B
hereto.
"Release"
means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping,
dumping or disposing into the
Environment (including the abandonment or
discharging of barrels, containers and
other closed receptacles containing
Hazardous Materials).
"Remediation" shall mean any works or action: (A) limiting,
mitigating,
remediating, preventing, removing or
containing the presence or effect of any
Hazardous Substance in or on the
Environment; and/or (B) any investigations,
sampling, testing or monitoring in
connection with (A).
"Required
Sellers" means the Share Sellers holding at least 50% in
nominal
value of the Shares and the Bond Sellers
holding at least 50% of the face amount
of the Bonds.
"Resolution" means Resolution numbered 1 in the Framework
Agreement.
"SEC"
means the Securities and Exchange Commission.
9
<PAGE>
"SEC
Filing Date" has the meaning set forth in SECTION 5.3.
"SEC
Filings" has the meaning set forth in SECTION 5.3.
"Securities" means the Shares and the Bonds.
"Securities Act" means the Securities Act of 1933, as amended, and
the
rules and regulations promulgated
thereunder.
"Sellers"
has the meaning set forth in the preamble.
"Share
Cash Consideration" means the amount, if any, equal to the
Total
Cash Consideration minus: (i) the Bond Cash
Consideration; and (ii) the
Management Bonus.
"Share
Consideration" means the number of Buyer Shares, if any, equal
to
the Total Share Consideration minus the
Bond Share Consideration.
"Share
Escrow" means the Buyer Shares in the escrow account maintained
by
the Escrow Agent for the benefit of the
Share Sellers and the Shareholders (or
the Person designated in writing by such
Share Seller or Shareholder, as the
case may be, at least three Business Days
prior to Closing).
"Shareholder" means any Person (other than the Buyer) who holds
Shares,
but is not a Share Seller, including any
Person who holds any shares in the
Company as a result of the exercise of any
Option under rule 5.2 of the Option
Plan.
"Shares"
has the meaning set forth in the recitals.
"Share
Sellers" means (i) the Committed Sellers and (ii) those persons
who
execute and deliver to the Buyer the Form
of Acceptance.
"Significant Subsidiaries" means Manchester U.S. Holdings Inc.
and
Manchester LLC.
"Subsidiaries" has the meaning set forth in SECTION 4.6(a).
"Tax
Return" includes any material report, statement, form, return
or
other document or information required to
be supplied to a taxing authority in
connection with Taxes.
"Taxes"
means any federal, state, local or foreign income or gross
receipts tax, alternative or add-on minimum
tax, sales or use tax, customs duty
or any other tax, charge, fee, levy or
other assessment including without
limitation property, transfer, occupation,
service, license, payroll, value
added, franchise, excise, withholding, ad
valorem, severance, stamp, premium,
windfall profit, employment, rent or other
tax, governmental fee or like
assessment or charge of any kind
whatsoever, together with any interest, fine or
penalty thereon, addition to tax,
additional amount, deficiency, assessment or
governmental charge imposed by any federal,
state, local or foreign taxing
authority.
10
<PAGE>
"Title
Documents" all deeds, title insurance policies, surveys,
mortgages,
certificates of occupancy, building permits
and inspection certificates,
agreements and other documents granting to
the Company or any of the
Subsidiaries title to or an interest in or
otherwise affecting any Real
Property, together with all amendments,
modifications and supplements thereto.
"Total
Cash Consideration" means $63,957,003.18.
"Total
Consideration" means the Total Cash Consideration plus the
dollar
value of the Total Share Consideration
based on the five day average closing
price of the Common Shares on the NYSE, as
reported by The Wall Street Journal,
Eastern Edition, as of the end of the
Business Day prior to the Closing Date.
"Total
Share Consideration" means 24,011,171 Common Shares.
"Trade
Secrets" means know-how, inventions, discoveries, methods,
processes, techniques, methodologies,
formulae, algorithms, technical data,
specifications, research and development
information, technology, data bases and
other proprietary or confidential
information, including customer lists, in each
case that derives economic value (actual or
potential) from not being generally
known to other persons who can obtain
economic value from its disclosure, but
excluding any Copyrights or Patents that
cover or protect any of the foregoing.
"USRPHC"
has the meaning set forth in SECTION 4.20(d).
"WARN" has
the meaning set forth in SECTION 6.8(e).
"Welfare
Plans" has the meaning set forth in SECTION 4.15(a).
SECTION 1.2. REQUIRED
SELLERS.
Where this
Agreement provides or requires the waiver or consent of, or
notice or information to be given to, the
Sellers, each Seller agrees that such
provision or requirement shall be satisfied
by the waiver or consent of, or
notice or information being given to, or
the right being exercised by, the
Required Sellers.
SECTION 1.3. ACCESSION
TO THIS AGREEMENT.
The rights
and obligations expressed in this Agreement in respect of any
Share Seller (whether such rights and
obligations are of an original party to
this Agreement or any Share Seller who
accedes to it) will arise:
(a)
in respect of a
Share Seller who is a Committed Seller, on the
execution and delivery to the Buyer of this
Agreement; and
(b)
in respect of
any other Share Seller, on the execution and delivery
to the Buyer of the Form of Acceptance,
which will constitute the accession of
that Share Seller to this Agreement as if
named in it as a Share Seller.
11
<PAGE>
ARTICLE TWO
TERMS OF
THE TRANSACTION
SECTION 2.1. EXCHANGE
OF SECURITIES.
(a) On the
Closing Date (as defined in Section 2.2 below), (i) subject to
the satisfaction of the conditions set
forth in Articles 7 and 8 of this
Agreement:
(i) Each of the Bond Sellers, severally and not jointly, shall
sell
and agrees
to transfer to the Buyer the number of Bonds set forth opposite
its name
on Schedule A, and the Buyer shall pay to each Bond Seller an
amount of
cash equal to such Bond Seller's pro rata portion of the Bond
Cash
Consideration and shall deliver to each Bond Seller (or the
Person
designated
in writing by such Bond Seller at least three Business Days
prior to
Closing) the number of Buyer Shares equal to such Bond Seller's
pro rata
portion of the Bond Share Consideration.
(ii) Each of the Share Sellers, severally and not jointly,
shall
sell and
agrees to transfer to the Buyer the number of Shares set forth
opposite
its name on Schedule A and the Buyer shall deposit in the Cash
Escrow the
Share Cash Consideration and in the Share Escrow, the Share
Consideration.
(b) The
Buyer shall deposit in the Cash Escrow an amount equal to any
Option Exercise Proceeds in respect of any
exercise of the Options after the
Closing promptly following any such
exercise.
(c) On the
Business Day following the day which is 14 days after the
Closing Date, the Escrow Agent shall
release to each Share Seller and
Shareholder (or the Person designated in
writing by such Share Seller or
Shareholder, as the case may be, at least
three Business Days prior to Closing)
the amount of cash, equal to its, his or
her respective pro rata portion of the
Cash Escrow and shall deliver to each Share
Seller and Shareholder (or the
Person designated in writing by such Share
Seller or Shareholder, as the case
may be, at least three Business Days prior
to Closing) the number of Buyer
Shares, if any, equal to its, his or her
respective pro rata portion of the
Share Consideration in each case in respect
of all the Shares set out opposite
their respective names on Schedule A and
any shares in the Company issued as a
result of the exercise of any Options under
rule 5.2 of the Option Plan. THE
BUYER EXPRESSLY AGREES THAT IT AND THE
ESCROW AGENT SHALL HAVE NO RIGHT TO
OFFSET, SET OFF OR WITHHOLD ANY AMOUNT FROM
THE CASH CONSIDERATION, THE SHARE
CONSIDERATION OR THE ESCROW AS A RESULT OF
ANY BREACH OR ALLEGED BREACH BY ANY
SELLER OR THE COMPANY OF ANY
REPRESENTATION, WARRANTY OR COVENANT SET FORTH IN
THIS AGREEMENT OR ANY ANCILLARY
AGREEMENT.
(d)
Notwithstanding anything to the contrary contained herein, in
the
event the Share Cash Consideration would
otherwise equal $0, then an amount
equal to $.001 times the number of Shares
and shares in the Company the subject
of Options outstanding on the Closing Date
shall be deducted from the Bond Cash
Consideration and deposited in the Cash
Escrow.
(e) No
certificates representing fractional shares of Buyer Shares
shall
be issued to any Seller or Shareholder
pursuant to this Agreement. In lieu of
receiving any such fractional share (after
taking into account all of the Buyer
Shares delivered to any such Person), any
such Seller or Shareholder shall
12
<PAGE>
receive from the Buyer cash (without
interest) in an amount rounded to the
nearest whole cent, determined by
multiplying (i) the five day average closing
price of the Common Shares on the NYSE, as
reported by the Wall Street Journal,
Eastern Edition ending on Business Day
prior to the Closing Date by (ii) the
fractional share to which such holder would
otherwise be entitled. The Buyer
shall make available to the Escrow Agent
the cash necessary to pay any amounts
payable to the Share Sellers and
Shareholders pursuant to this Section 2.1(e).
(f) All
fees and expenses arising under the Escrow Agreement, including
the fees and expenses of the Escrow Agent,
will be paid by the Buyer in cash and
shall not be deducted from the Escrow.
SECTION 2.2.
CLOSING.
(a) Unless
this Agreement shall have been terminated pursuant to the
provisions of Article Nine, the closing of
the purchase and sale of the
Securities (the "Closing") shall be held at
the offices of Gibson, Dunn &
Crutcher LLP located at 200 Park Avenue,
New York, New York 10166, or at such
other place as the parties may agree upon,
at 10:00 A.M., local time, on the
date that is three Business Days after all
of the conditions set forth in
Article Seven and Article Eight have been
met or at such other place, time or
date as the Buyer, the Company and the
Required Sellers may agree (the "Closing
Date").
(b)
At or prior to
the Closing, the Company shall have furnished or made
available to the Buyer the following:
(i) the Organizational Documents of the Company and the
Subsidiaries
and all
amendments thereto, duly certified by the proper officials of
the
jurisdiction in which such company is organized and duly certified
by the
Secretary
of such company as being in full force and effect on the
Closing
Date;
(ii) resignations, effective on the Closing Date, of those
directors
and
company secretaries of the Company as the Buyer may designate
in
writing to the
Company no later than 3 Business Days prior to the Closing
Date and
the Company shall use reasonable efforts to provide the
resignations of those directors and company secretaries of the
Subsidiaries as the Buyer may direct in writing no later than 3
Business
Days prior
to the Closing Date; provided, that in each case such
resignations shall acknowledge in a legally enforceable document
that,
other than
any unpaid director's or secretary's fees and expenses properly
incurred
up to and including the Closing Date in the exercise of their
duties as
a director or company secretary (as the case may be), such
directors
and company secretaries have no claim against the Company or
any
Subsidiary
whether for loss of office or otherwise in connection with the
resignation of such directorship or secretaryship;
(iii) the complete and correct corporate minute books, and to
the
extent
available, stock ledgers, stock transfer records, statutory
registers,
share certificate books and corporate seals of the Company and
the
Significant Subsidiaries;
13
<PAGE>
(iv) the complete and correct (in all material respects)
corporate
minute
books and stock ledgers, stock transfer records, statutory
registers,
share certificate books and corporate seals (if any) of the
Subsidiaries;
(v) a statement meeting the requirements of Treasury Regulation
Section
1.1445-2(c)(3) that MUSH is not a USRPHC within the meaning of
Section
897 of the Code and was not a USRPHC on any determination date
(as
defined)
in Treasury Regulation Section 1.897-2(c) that occurred in the
five-year
period preceding the Closing Date in the form of Exhibit
2.2(b)(v)
hereto;
(vi) duly executed transfers of each share in a Subsidiary which
is
not
registered in the name of the Company or another Subsidiary in
favor
of the
Buyer or as it may direct, together with the relevant share
certificate(s);
(vii) the (x) resignation of the auditors of the Company and
each
Subsidiary
effective on the Closing Date in each case confirming that
there are
no circumstances connected with their resignation which should
be brought
to the attention of the members or creditors of the Company or
a
Subsidiary or (y) the removal of the auditors of the Company and
each
Subsidiary, in accordance with Law, effective on the Closing
Date;
(viii) the Registration Rights Agreement, duly executed by the
parties
thereto other than the Buyer;
(ix) the Board Nominee Agreement, duly executed by the parties
thereto
other than the Buyer;
(x) the Escrow Agreement, duly executed by the parties thereto
other
than the
Buyer;
(xi) certified copies of minutes of the Company authorizing the
execution
and entry into of this Agreement and the Ancillary Agreements
to
which it
is a party; and
(xii) such other documents relating to the Company or the
Subsidiaries as the Buyer may reasonably request.
(c)
At or prior to
the Closing, the Buyer shall have furnished or made
available to the Required Sellers, for the
benefit of the Sellers:
(i) the charter documents of the Buyer and all amendments
thereto,
duly
certified by the appropriate officials of the jurisdiction in
which
the Buyer
was organized;
(ii) the by-laws (or equivalent thereof) of the Buyer, duly
certified
by the Secretary of the Buyer as being in full force and effect
on the
Closing Date;
(iii) the Registration Rights Agreement duly executed by the
Buyer;
(iv) the Board Nominee Agreement duly executed by the Buyer;
14
<PAGE>
(v) the Escrow Agreement, duly executed by the Buyer; and
(vi) such other documents relating to the Buyer as the Company
may
reasonably
request.
(d)
At the
Closing:
(i) each Bond Seller shall deliver to the Buyer a duly executed
instrument
of transfer in favor of the Buyer in writing as approved by the
Bond
issuer's board of directors, together with the relevant bond
certificate (or an indemnity in a form reasonably acceptable to the
Buyer
in respect
of lost bond certificates) for all of the Bonds listed opposite
such Bond
Seller's name on Schedule A and the Buyer shall deliver to or
for the
benefit of such Bond Seller his, her or its pro rata portion of
the
Aggregate Bond Consideration in accordance with Section 2.1;
(ii) each Share Seller shall deliver or procure the delivery to
the
Buyer of a
stock transfer form (duly executed by such Share Seller or by a
duly
appointed attorney on behalf of such Share Seller) in favor of
the
Buyer,
together with the relevant share certificates (or an indemnity
for
lost
certificate in the form of Exhibit 2.2(d)(ii) hereto in respect
of
lost share
certificates) for all of the Shares listed opposite such Share
Seller's
name on Schedule A and the Buyer shall deposit the Aggregate
Share
Consideration in the Escrow in accordance with Section 2.1.
Notwithstanding any other terms of this Agreement, in accordance
with the
Offer
Document, the Buyer shall not be obligated to deliver any
consideration to any Share Seller unless and until that Share
Seller shall
have
delivered to the Buyer such share certificates or such an
indemnity
in respect
of lost share certificates); and
(iii) the Buyer is not obligated to close or purchase any
Securities
if less
than all of the Securities outstanding at Closing are tendered
at
the
Closing in accordance with the terms hereof.
(e)
The Sellers
shall procure that a board meeting of the Company (and
Memec Holdings Limited, but only in the
case of (iii) below) is held at or prior
to the Closing at which it is resolved
that, effective as of the Closing Date:
(i) such persons as the Buyer nominates (no later than 3
Business
Days prior
to the Closing Date) are appointed as additional directors and
the
secretary of that company effective as of the Closing Date;
(ii) its registered office is changed to such address as the
Buyer
may
indicate no later than 3 Business Days prior to the Closing
Date;
(iii) the transfers referred to in Sections 2.2(d)(i) and
2.2(d)(ii)
(subject
only to their being, in the case of the Shares, duly stamped)
are
approved
for registration by the Company (in the case of the Shares) and
Memec
Holdings Limited (in the case of the Bonds); and
15
<PAGE>
(iv) such auditors as the Buyer may indicate no later than 3
days
prior to
Closing are appointed as auditors with effect from the Closing
Date.
SECTION 2.3. NO
LIENS.
The
Securities shall be sold free from all Liens and together with
all
rights attaching to them at the date of
this Agreement and, in the case of the
Shares, fully paid.
SECTION 2.4. ISSUANCE
OF BUYER SHARES.
The Buyer
Shares to be issued as the Total Stock Consideration have been
duly authorized and, when issued and
delivered in accordance with the terms of
this Agreement, will be validly issued,
fully paid and non-assessable and the
issuance thereof is not subject to any
Liens or preemptive or similar right.
SECTION 2.5. WAIVER AND
RELEASE.
Each
Seller, severally and not jointly with any other Seller:
(a)
covenants with
the Buyer that he, she or it has the right to sell
and transfer to the Buyer the full legal
and beneficial interest in those
Securities to be sold by him, her or it on
the terms set out in this Agreement;
(b)
waives (and
shall procure the waiver by his, her or its nominee(s)
of) all rights of pre-emption and other
restrictions on transfer rights which
he, she or it (or such nominee(s)) may have
(whether under the Company's
articles of association or otherwise) in
respect of the transfer to the Buyer or
its nominee(s) of any of the Shares;
(c)
agrees and
acknowledges that it has no claims against any other
Seller or any of their affiliates,
advisors, agents, directors, employees or
representatives in respect of the entry
into or performance of this Agreement;
and
(d)
effective as of
the Closing Date, upon issuance of the Buyer Shares
in accordance with the terms of this
Agreement, for valuable consideration
receipt of which is hereby acknowledged, on
behalf of himself, herself or itself
and such Seller's successors, heirs,
executors, administrators and assigns, does
hereby remise, release and forever
discharge the Company and the Subsidiaries,
and their successors, assigns, officers,
directors, agents, employees and
counsel, from all manner of actions, causes
of action, suits, debts, sums of
money, bonds, bills, contracts,
controversies, agreements, promises, damages,
judgments, claims and demands whatsoever,
which such Seller ever had, now has or
hereafter can, shall or may have, for, upon
or by reason of its ownership of the
Securities arising prior to or
contemporaneously with the Closing; provided,
however, that nothing in this clause (d)
shall operate to release any
obligations of the Buyer arising under this
Agreement or the Ancillary
Agreements.
16
<PAGE>
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of
the Sellers, severally and not jointly with any other Seller,
represents and warrants to the Buyer, as of
the date hereof and as of the
Closing Date, as follows:
SECTION 3.1. POWER AND
AUTHORITY.
Such
Seller has all requisite power and authority or if an
individual,
legal capacity, to execute and deliver this
Agreement and the Ancillary
Agreements to which it is a party, to
perform the obligations of such Seller
hereunder and thereunder and to consummate
the transactions contemplated hereby
and thereby. This Agreement and the
Ancillary Agreements to which such Seller is
a party have been duly authorized, executed
and delivered by such Seller,
constitute the valid and binding agreements
of such Seller and are enforceable
against such Seller in accordance with
their terms.
SECTION 3.2. THE
SECURITIES.
Such
Seller is either (i) the beneficial and registered owner of the
Securities set forth opposite such Seller's
name on Schedule A or (ii) is the
registered owner of such Securities and has
the legal capacity to transfer the
beneficial title to such Securities. Such
Securities are held by such Seller as
the registered owner thereof, free and
clear of all Liens (other than Liens
created by this Agreement) and are not
subject to any restriction with respect
to their transferability (other than
restrictions on transfer under applicable
federal, state and foreign securities
laws). Except for this Agreement, the
Framework Agreement and as set forth on
Schedule 3.2, such Seller (i) is not
party to and has not granted to any other
Person, any options, warrants,
subscription rights, rights of first
refusal or any other rights providing for
the acquisition or disposition of the
Securities or any other equity interest in
the Company or the Subsidiaries and (ii) is
not a party to any voting agreement,
voting trust, proxy or other agreement or
understanding with respect to the
voting of any of the Shares.
SECTION 3.3. SECURITIES
LAWS.
(a)
Such Seller that
is a U.S. person is an "accredited investor" as
such term is defined in Rule 501(a)
promulgated under the Securities Act, and is
financially able to hold the Buyer Shares
for long term investment and to suffer
a complete loss of its investment in the
Buyer Shares. The Buyer Shares are
being acquired by such Seller for its own
account for investment purposes, and
not with a view to any distribution thereof
within the meaning of the Securities
Act. Such Seller has had the opportunity to
ask questions of the Buyer and its
subsidiaries and their officers and
employees and to receive to its satisfaction
such information about the business and
financial condition of the Buyer and its
subsidiaries as it considers necessary or
appropriate for deciding whether to
consummate the transactions contemplated
hereby, and such Seller is fully
capable of understanding and evaluating the
risks associated with the ownership
of the Buyer Shares.
(b)
Such Seller has
conducted its own diligence investigation with
respect to the merits and risks associated
with its ownership of the Buyer
Shares as it deems appropriate. No
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Seller is relying on nor has relied on (i)
any representation by the Buyer or
any affiliate or representative of the
Buyer, other than the representations and
warranties of the Buyer hereunder or (ii)
any due diligence or other
investigation conducted by any other
Seller.
(c)
Such Seller
acknowledges (i) except as contemplated by the
Registration Rights Agreement, that the
Buyer Shares will not be registered
under the Securities Act or under the
securities laws of any state and must be
held by such Seller indefinitely unless the
resale of the Buyer Shares is
subsequently registered under the
Securities Act and any applicable state
securities law or an exemption from such
registration becomes or is available
and (ii) in addition to any legend required
by law or any other agreement by
which such Seller is bound, the Buyer shall
place the following legend on any
certificate representing the Buyer
Shares:
"THE TRANSFERABILITY OF THESE SECURITIES IS SUBJECT TO
RESTRICTION.
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933 OR THE SECURITIES LAWS OF ANY STATE AND MAY BE REOFFERED
AND
SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH
REGISTRATION
IS AVAILABLE."
SECTION 3.4.
ARTICLES.
Each of
the Majority Share Sellers hereby represents and warrants that
the
provisions set forth in Section 16 of the
Articles of Association of the Company
has not been and will not be triggered as a
result of the transactions
contemplated by this Agreement and the
Ancillary Agreements.
ARTICLE FOUR
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The
Company represents and warrants to the Buyer, as of the date
hereof
and as of the Closing Date, as set forth in
this Article Four.
Any
reference to a party's "knowledge" means with respect to the
Company,
the actual knowledge of the persons set
forth on Schedule 4; provided, that if
such persons shall have actual knowledge of
facts and circumstances that would
lead a reasonably prudent person to inquire
and gain actual knowledge of a
particular matter, such person shall be
deemed to have actual knowledge of such
matter unless they make such further
inquiry.
SECTION 4.1. POWER AND
CAPACITY.
The Company has all requisite
corporate power and authority to execute and
deliver this Agreement and the other
Ancillary Agreements to which it is a
party, to perform the obligations of the
Company hereunder and thereunder and to
consummate the transactions contemplated
hereby and thereby. This Agreement and
the Ancillary Agreements to which the
Company is a party have been duly
authorized, and when executed and delivered
by the Company, shall constitute the
valid and binding agreement of the Company
and will be enforceable against the
Company in accordance with their terms.
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<PAGE>
SECTION 4.2. ORGANIZATION AND
QUALIFICATION.
(a) The Company
is a limited company duly incorporated under English law
and has been in continuous existence since
incorporation. The Company is
qualified to do business as a foreign
corporation in each jurisdiction where the
nature of its business or the character or
location of its properties makes such
qualification necessary, except to the
extent that the failure to so qualify has
not had a Material Adverse Effect. The
Company has all requisite corporate power
and authority to own or lease and operate
its material properties and assets and
to carry on its business as now
conducted.
(b) Accurate and
complete copies of the Organizational Documents and the
minute books of the Company have been made
available to the Buyer and accurate
and complete copies of the stock ledgers
and stock transfer records of the
Company and the Subsidiaries have been, or
prior to Closing will be, furnished
to the Buyer. Such minute books contain the
minutes of all meetings of the
shareholders and the board of directors,
and all committees thereof, of the
Company. All such meetings of the Company
were duly called and held, and a
quorum was present and acting throughout
each such meeting. Such stock ledgers
and stock transfer records reflect all
issuances and registrations of transfer
of all shares of capital stock of the
Company and the certificates representing
all canceled shares of capital stock have
been returned to the stock ledger.
(c) The
Committed Sellers either: (i) own directly, beneficially and as
the
registered shareholders; or (ii) are the
registered shareholders and have the
legal capacity to transfer the beneficial
title to, at least 94.6% (by number)
of the Shares and the Bond Sellers either:
(x) own directly, beneficially and of
record; or (y) are the holders of record
and have the legal capacity to transfer
the beneficial title to, 100% of the
Bonds.
SECTION 4.3. CONFLICTING INSTRUMENTS;
CONSENTS.
(a) Except as
set forth on Schedule 4.3(a), the execution and delivery by
the Company of this Agreement and the
Ancillary Agreements to which it is a
party does not, and the consummation of the
transactions contemplated hereby and
thereby will not, (i) violate any provision
of the articles of incorporation or
the by-laws (or the equivalent thereof), as
amended from time to time
(collectively, the "Organizational
Documents") of the Company or any of the
Subsidiaries, or (ii) result in the
creation of any Lien upon the Securities or,
other than any Permitted Lien or Liens
created by or resulting from the
activities of the Buyer and its affiliates,
any of the material properties or
assets of the Company or any of the
Subsidiaries, or (iii) conflict with or
result in a material breach of, create an
event of default (or event that, with
the giving of notice or lapse of time or
both, would constitute an event of
default) under, or give any third party the
right to accelerate any material
obligation under, any Material
Contract.
(b) Except for
the filings under the HSR Act and the other filings set
forth on Schedule 4.3(b), the execution and
delivery by the Company of this
Agreement and the Ancillary Agreements to
which it is a party do not, and the
consummation of the transactions
contemplated hereby and thereby will not,
result in a violation of, or require any
authorization, approval, consent or
other action by, or registration,
declaration or filing with or notice to, any
court or administrative or governmental
body pursuant to, any statute, law,
rule, regulation or ordinance
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<PAGE>
applicable to any Seller, the Company or
any of the Subsidiaries, except where
the failure to obtain such consent would
not, individually or in the aggregate,
have a Material Adverse Effect. There is no
pending or threatened action, suit,
proceeding or investigation before or by
any court or governmental body or
agency, (i) to restrain or prevent the
consummation of the transactions
contemplated by this Agreement or the
Ancillary Agreements, (ii) that could
reasonably be expected to prohibit the
Buyer from owning or voting the Shares or
owning the Bonds or (iii) that could
reasonably be expected to restrict the
right of the Buyer to operate the business
of the Company or any of the
Subsidiaries.
SECTION 4.4. TRANSFER OF THE
SECURITIES.
Upon the
delivery of the relevant instruments of transfer for the
Securities by the Sellers and payment for
the Securities as provided for in this
Agreement, the Buyer will acquire good and
valid title to all of the outstanding
Securities, free and clear of all
Liens.
SECTION 4.5. CAPITALIZATION.
(a) The Company
has an authorized share capital consisting of (i) 2,264,680
Founder Shares, par value $0.20 per share,
of which 2,264,680 shares are issued;
(ii) 9,054,987 A Ordinary Shares, par value
$0.20 per share, of which 7,735,320
shares are issued; (iii) 90,000,000 B
Redeemable Shares, par value $0.01 per
share, of which 90,000,000 shares are
issued; and (iv) 9,288,108 C Ordinary
Shares, par value $0.20 per share, of which
180,000 shares are issued. Except as
set forth on Schedule 4.5(a), there are no
outstanding or authorized options,
subscriptions, warrants, calls, rights,
commitments or other agreements of any
character obligating the Company or any
Subsidiary to issue, sell or transfer,
pledge or otherwise encumber any shares of
its capital stock or any other
securities convertible into or exercisable
for or evidencing the right to
subscribe for any shares of its capital
stock. All of the outstanding equity
securities of the Company have been, and
all shares of the Company that may be
issued upon exercise or conversion of
options, warrants and other securities
convertible into or exercisable for shares
of the Company will be, when issued,
duly authorized, validly issued, fully paid
and non-assessable. To the knowledge
of the Company, all of the outstanding
equity securities of the Company,
including options, warrants, and other
securities convertible into or
exercisable for shares of the Company, were
issued by the Company in compliance
with all applicable Laws; provided,
however, that the Company does not make any
representations hereunder with respect to
the "blue sky" laws of the states of
the United States or the local securities
laws of any non-United States
jurisdiction.
(b) Schedule
4.5(b) sets out in relation to each option to acquire shares
of the Company (i) the name of the option
holder, (ii) the number and class of
the Company's shares subject to the option,
(iii) the strike price per share at
which the option may be exercised, (iv) the
date on which the option was granted
and (v) the name of the share option plan
or arrangement under which the option
was granted.
SECTION 4.6. SUBSIDIARIES.
(a) Set forth on
Schedule 4.6 is a complete list of the corporations or
other entities (the "Subsidiaries") with
respect to which the Company
beneficially owns, directly or
indirectly,
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<PAGE>
any of the outstanding stock or other
equity interests. Except for the
Subsidiaries, the Company does not have any
equity interest or investment in any
Person, whether incorporated or
unincorporated, direct or indirect. Set forth on
Schedule 4.6 is a complete list of each
partnership or joint venture agreement
or arrangement to which the Company or any
of the Subsidiaries is party and the
interest of the Company or such Subsidiary
therein.
(b) Each
Subsidiary is duly organized, validly existing and in good
standing under the laws of its jurisdiction
of incorporation, which
jurisdictions are set forth on Schedule
4.6. Each Subsidiary is qualified to do
business as a foreign corporation in each
jurisdiction where the nature of its
business or the characters or location of
its properties makes such
qualification necessary, except to the
extent that the failure to so qualify has
not had a Material Adverse Effect. Each
Subsidiary has the corporate power and
authority to own or lease and operate its
properties and assets and to carry on
its business as it is now being
conducted.
(c) Except as
set forth on Schedule 4.6, the Company owns, directly or
indirectly, 100% of the outstanding shares
of capital stock or other ownership
interests of each of the Subsidiaries, free
and clear of any Liens, other than
Liens specified in clauses (i), (iii) or
(iv) of the definition of Permitted
Liens. The shares of capital stock or other
ownership interests so issued by the
Subsidiaries have been duly authorized and
validly issued, are fully paid and
non-assessable. There is no outstanding or
authorized option, subscription,
warrant, call, right, commitment or other
agreement of any character obligating
the Company or any of the Subsidiaries to
issue, sell, transfer, pledge or
otherwise encumber any share of capital
stock or other ownership interest of any
of the Subsidiaries or any security or
other instrument convertible into or
exercisable for or evidencing the right to
subscribe for any such share of
capital stock or other ownership
interest.
(d) To the
Company's knowledge, the minute books, stock ledgers and stock
transfer records of the Subsidiaries
furnished to the Buyer for review are
accurate and complete in all material
respects.
SECTION 4.7. FINANCIAL STATEMENTS.
(a) The Company
has furnished the Buyer with copies of the following
(collectively, the "Financial Statements"):
(i) the audited consolidated
financial statements (including related
notes) of the Company for the fiscal
years ended December 31, 2004 (in draft
form as provided to the Buyer), 2003 and
2002, including balance sheets as at
December 31, 2004, 2003 and 2002; and (ii)
the related statements of income and cash
flows for the fiscal year then ended.
(b) The
Financial Statements complied, as of the date thereof, as to
form
in all material respects with applicable
accounting requirements and the
published rules and regulations of the SEC
with respect thereto, were prepared
in accordance with generally accepted
accounting principles in the United States
of America ("GAAP") consistently applied
throughout the periods covered (except
as may be indicated in the notes thereto)
and fairly presented in all material
respects the consolidated financial
position of the Company and its consolidated
Subsidiaries as of the dates thereof and
their consolidated results of
operations and cash flows for the periods
then ended (subject, in the case of
unaudited statements, to normal and
recurring year-end adjustments and the
absence of notes).
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<PAGE>
(c) Except as
and to the extent reflected or reserved against in the
Financial Statements, as of the Balance
Sheet Date, neither the Company nor any
of the Subsidiaries had any material
liabilities or obligations (absolute or
contingent), of a nature required by GAAP
to be reflected in a consolidated
balance sheet as of such date.
SECTION 4.8. REAL PROPERTY.
(a) Set forth on
Schedule 4.8(a) is true and complete list of all real
property owned by the Company or its
Subsidiaries (the "Owned Real Property") .
Also set forth on Schedule 4.8(a) is a true
and complete list of all real
property leased, subleased, licensed or
otherwise occupied by the Company or its
Subsidiaries pursuant to a Property Lease
(collectively, including any
improvements located thereon, the "Leased
Real Property"). True and complete
copies of each Property Lease have been
made available to the Buyer in the Data
Room.
(b) With respect to
the Property Leases, to the knowledge of the Company,
there is no material default or event of
default or event that has occurred and
is continuing and, which with the giving of
notice or lapse of time or both,
would constitute a material default or
event of default on the part of the
Company or any of its Subsidiaries under
the Property Leases, or on the part of
any other Person party to any of the
Property Leases. To the knowledge of the
Company, all of the Property Leases are in
full force and effect, and are valid
and enforceable against the parties thereto
in accordance with their terms, and,
except as set forth in Schedule 4.8(b), the
Company or its Subsidiary is in
possession, and is the only Person in
possession, of the Leased Real Property.
(c) The Company
and the Subsidiaries have good title to the Owned Real
Property and to all buildings, fixtures and
improvements located thereon, free
and clear of all Liens other than Permitted
Liens. The Company and the
Subsidiaries have good and valid leasehold
estates or interests, as applicable,
in all Leased Real Property, free and clear
of all Liens other than Permitted
Liens.
(d) To the
knowledge of the Company, the Real Property, and the use,
operation or maintenance thereof as
currently used, operated and maintained by
the Company or its Subsidiary, do not
violate any applicable Law in any material
respect.
(e) (i) There is
no pending or, to the knowledge of the Company, threatened
condemnation or eminent domain proceeding
with respect to, or materially and
adversely affecting, any Owned Real
Property and (ii) to the knowledge of the
Company, there is no pending or threatened
condemnation or eminent domain
proceeding with respect to, or materially
and adversely affecting any Leased
Real Property.
SECTION 4.9. PERSONAL PROPERTY.
Except as
described in Schedule 4.9, the Company and the Subsidiaries
have
good and marketable title to all material
personal property reflected on the
Balance Sheet and all material personal
property acquired by the Company or any
of the Subsidiaries since the date of the
Balance Sheet (except such personal
property as has been disposed of in the
ordinary course of business), free and
clear of any Impairments, except for
Permitted Liens. All material items of
22
<PAGE>
personal property are in good condition and
in a reasonable state of repair,
reasonable wear and tear excepted.
SECTION 4.10. ACCOUNTS RECEIVABLE AND
INVENTORY.
(a) All accounts
receivable reflected in the Balance Sheet, and, to the
knowledge of the Company, all accounts
receivable arising since the Balance
Sheet Date, arose from bona fide sales
transactions in the ordinary course of
business consistent with past practice and
do not represent obligations for
goods sold on consignment or approval or on
a sale-or-return basis or subject to
any other repurchase or return arrangement,
other than in the ordinary course of
business, consistent with past
practice.
(b) The
inventories set forth in the Balance Sheet net of reserves
consisted, and all inventory acquired since
the Balance Sheet Date consists, of
a quality and quantity usable and saleable
in the ordinary course of business.
SECTION 4.11. PERSONNEL.
Set forth on
Schedule 4.11 is a true and complete list of:
(a) the name of each person employed by the Company or any
Subsidiary
whose total
compensation for services rendered, including without
limitation
bonuses and deferred compensation, for the fiscal year ended
December 31,
2004 (and if determined, for December 31, 2005) was (or will
be, as
applicable) in excess of the rate of $250,000 per year or who has
an
employment
agreement with the Company or any Subsidiary that provides for
severance
benefits for, or notice of termination for a term of more than
one year (any
such person, a "Key Employee"), the title or job
classification
of each such person and the current compensation including
bonuses and
deferred compensation of each such person;
(b) the name of each person, if any, holding tax or other powers
of
attorney from
the Company or any Subsidiary and a summary of the terms
thereof;
(c) the name and title or job description of each director and
officer
of the Company
and each of the Subsidiaries; and
(d) details of any arrangement or practice regarding redundancy
payments,
whether contractual, customary, discretionary or otherwise,
applicable to
any employee of the Company or any of the Subsidiaries other
than those
required to be provided to such employee by applicable Law.
SECTION 4.12. LABOR MATTERS.
(a) Except as
set forth on Schedule 4.12(a), neither the Company nor any
Subsidiary is a party to any contract or
collective bargaining agreement with
any labor organization, union, group, works
council or other employee
representative body. Other than as set
forth on Schedule 4.12(a), to the
knowledge of the Company, there are no
activities or proceedings by any labor
organization, union, group or association
or representative thereof to organize
any
23
<PAGE>
employees of the Company or any of the
Subsidiaries, and there have been no such
activities or proceedings within the
preceding three years. There are no
lockouts, strikes, slowdowns, work
stoppages pending or, to the knowledge of the
Company, threatened by or with respect to
any employees of the Company or any of
the Subsidiaries that could reasonably be
expected to result in material
liability to the Company or any Subsidiary,
nor have there been any such
lockouts, strikes, slowdowns or work
stoppages in the preceding three years.
(b) To the
knowledge of the Company, there is no material claim pending
between the Company or any Subsidiary and
any of their respective employees.
Except as set forth in Schedule 4.12(b),
there is not, and during the three
fiscal years prior to the date of this
Agreement there has not occurred, any
material claim, grievance, arbitration,
negotiation, suit, action or charge of
or by any employee of the Company or any
Subsidiary submitted to, and no
complaint is pending against the Company or
any Subsidiary before, the National
Labor Relations Board or any state or local
agency or court or tribunal in any
jurisdiction. To the knowledge of the
Company, the Company and the Subsidiaries
have complied in all material respects with
all applicable statutes, regulations
and executive orders of the United States
of America, all states and other
subdivisions thereof, all foreign
jurisdictions and all agencies and
instrumentalities of the foregoing
respecting employment, termination of
employment, employment practices, terms and
conditions of employment and wages
and hours.
(c) To the extent permitted by
applicable law, the Sellers have made
available to the Buyer copies of all
material claims, complaints, reports and
other documents that have been filed with
an administrative agency or court of
law against or by the Company or any
Subsidiary during the past three years
pursuant to workers' compensation laws,
Title VII of the Civil Rights Act of
1964, the Occupational Safety and Health
Act of 1970, the National Labor
Relations Act of 1935 or any other federal
or state laws (or laws of any foreign
jurisdiction) relating to employment of
labor.
SECTION 4.13. ENVIRONMENTAL MATTERS.
(a) Except as
has not had a Material Adverse Effect, none of the Company,
the Subsidiaries nor, to the knowledge of
the Company, any previous owner,
tenant, occupant, operator or user of any
Real Property or Former Real Property
or any other person has engaged in or
permitted any operation or activity at or
upon, or any use or occupancy of, any Real
Property or Former Real Property, or
any portion thereof, for the purpose of or
in any way involving the handling,
manufacture, treatment, storage,
transporting, use, generation, release,
discharge, refining, dumping, emission or
disposal of any Hazardous Materials
(whether legal or illegal, accidental or
intentional) on, under, in or abo
