Common use of COMPENSATORY PAYMENT Clause in Contracts

COMPENSATORY PAYMENT. 13.1 In the event that this Agreement is terminated: 13.1.1 by the Company pursuant to Clause 12.1.2; 13.1.2 by Bidder pursuant to Clauses 12.1.4(a), (b) or (e); or 13.1.3 by Bidder or the Company pursuant to Clause 12.1.6 or by Bidder pursuant to Clauses 12.1.3(c), 12.1.4(d) or 12.1.4(f) and (i) any person shall have publicly disclosed a bona fide Acquisition Proposal after the date hereof and prior to such termination, which Acquisition Proposal has not been publicly withdrawn prior to such termination and (ii) within twelve months of such termination, an Acquisition Proposal (which, for the avoidance of doubt, may be a different Acquisition Proposal than the one outstanding as of the termination date) is announced and becomes or is declared wholly unconditional or otherwise becomes effective or is completed anytime thereafter; 13.2 then, in any such event under Clause 13.1, the Company (or the successor to, or acquirer of, the Company) will pay to Bidder, an amount equal to USD 8,773,855 (inclusive of any applicable VAT) (the “Compensatory Payment”) (x) in the case of Clause 13.1.1, substantially concurrently with such termination, (y) in the case of Clause 13.1.2, within two Business Days following such termination and (z) in the case of Clause 13.1.3, within two Business Days after the Acquisition Proposal becomes or is declared wholly unconditional or otherwise becomes effective or is completed. The parties acknowledge and agree that: (i) at the date of this Agreement it is not possible to ascertain the amount of the overall loss that the Bidder may incur in the circumstances in which the Compensatory Payment is payable; and (ii) the Compensatory Payment represents a genuine estimate by the parties of the amount of the overall loss that the Bidder would incur in such circumstances and is proportionate to the legitimate interests of Acquirers in the enforcement of the obligations pursuant to Clause 13. All sums payable under this Clause 13 shall be paid in the form of an electronic funds transfer for same day value to such bank as may be notified to the Company by Bidder and shall be paid in full free from any deduction or withholding whatsoever and without regard to any Lien, right of set-off, counter-claim or otherwise. The parties acknowledge and agree that in no event shall the Company be required to pay the Compensatory Payment on more than one occasion to the Bidder, whether or not the Compensatory Payment may be payable under more than one provision of this Agreement at the same or at different times and the occurrence of different events. 13.3 The parties agree that the provisions of Clause 13.1 shall apply mutatis mutandis following an Agreed Switch. 13.4 The parties intend and shall use reasonable endeavours to secure that the fee payable pursuant to Clause 13.1 is not treated for VAT purposes as consideration for a taxable supply.

COMPENSATORY PAYMENT. 13.1 In the event that this Agreement is terminated: 13.1.1 by the Company pursuant to Clause 12.1.2; 13.1.2 by Bidder pursuant to Clauses 12.1.4(a), (b) or (ec); or 13.1.3 by Bidder pursuant to Clause 12.1.4(d) or by Bidder or the Company pursuant to Clause 12.1.6 or by Bidder pursuant to Clauses 12.1.3(c), 12.1.4(d) or 12.1.4(f) and 12.1.7 where (i) any person shall have informed the Company Board of or shall have publicly disclosed a bona fide Acquisition Proposal after the date hereof and prior to such termination, which Acquisition Proposal has not been irrevocably withdrawn (and, in the case of a publicly withdrawn disclosed Acquisition Proposal, publicly withdrawn) prior to such termination and (ii) within twelve (12) months of such termination, an Acquisition Proposal (which, for the avoidance of doubt, may be a different Acquisition Proposal than the one outstanding as of the termination date) is announced and becomes or is declared wholly unconditional or otherwise becomes effective or is completed anytime thereafter;completed. 13.2 then, in any such event under Clause 13.1, the Company (or the successor to, or acquirer of, the Company) will pay to Bidder, Bidder (or its designated Affiliate) an amount equal to USD 8,773,855 (inclusive of $5,900,000 plus any applicable VAT) VAT due in accordance with Clause 13.5.2 (the “Compensatory Payment”) (xa) in the case of Clause 13.1.1, substantially prior to or concurrently with such terminationtermination or the execution of a definitive agreement in respect of a Superior Proposal, (yb) in the case of Clause 13.1.2, within two (2) Business Days following such termination and (zc) in the case of Clause 13.1.3, within two (2) Business Days after the Acquisition Proposal becomes or is declared wholly unconditional or otherwise becomes effective or is completed. The parties acknowledge and agree that: (i) at the date of this Agreement it is not possible to ascertain the amount of the overall loss that the Bidder may incur in the circumstances in which the Compensatory Payment is payable; and (ii) the Compensatory Payment represents a genuine estimate by the parties of the amount of the overall loss that the Bidder would incur in such circumstances and circumstances, is proportionate to the legitimate interests of Acquirers in the enforcement of the obligations pursuant to Clause 1313 and is not paid in compensation for any other payment which would have been due under this Agreement but for its termination. All sums payable under this Clause 13 shall be paid in the form of an electronic funds transfer for same day value to such bank as may be notified to the Company by Bidder and shall be paid in full free from any deduction or withholding whatsoever (save as required by law) and without regard to any Lien, right of set-off, counter-claim or otherwise. Notwithstanding anything in this Agreement to the contrary, the parties acknowledge and agree that in the event that the Compensatory Payment becomes payable by, and is paid in full by, the Company, in no event shall Bidder’s right to receive monetary damages in connection with this Agreement be greater than the Compensatory Payment, and the Compensatory Payment shall be the sole and exclusive remedy for damages by Bidder, its Affiliates and any Representatives of any of the foregoing against the Company and its former, current or future shareholders, directors, officers, Affiliates, agents or other Representatives for any loss suffered as a result of any breach of any representation, warranty, covenant or agreement set forth in this Agreement or the failure of the Acquisition to be consummated, and under circumstances where such Compensatory Payment is due, upon payment of such amount, none of the Company or any of its former, current or future shareholders, directors, officers, Affiliates, agents or other Representatives shall have any further liability or obligation relating to or arising out of this Agreement, the Acquisition or the transactions contemplated hereby; provided, that, nothing in this Clause 13.2 shall relieve any party from Liability for fraud. The parties acknowledge and agree that in no event shall the Company be required to pay the Compensatory Payment on more than one occasion to the Bidder, whether or not the Compensatory Payment may be payable under more than one provision of this Agreement at the same or at different times and the occurrence of different events. 13.3 The parties agree that the provisions of Clause 13.1 shall apply mutatis mutandis following an Agreed a Takeover Switch. 13.4 The parties intend and shall use reasonable endeavours agree to secure that the fee treat any Compensatory Payment payable pursuant to Clause 13.1 is as not treated for VAT purposes as consideration for a taxable supplysupply for VAT purposes on the basis that the payment is to compensate Bidder for the time and effort that it has incurred and is not directly linked to a supply made to the Company by Bidder or any Affiliate, and the parties agree to use all reasonable endeavors to secure such treatment. If the published guidance of HMRC on the date that the Compensatory Payment is due to be made indicates that the Compensatory Payment may be subject to VAT, the parties will jointly apply in writing to HMRC for confirmation that the treatment set out in this Clause 13.4 applies. 13.5 If, however, the Compensatory Payment is determined by HMRC in whole or part consideration for a taxable supply then: 13.5.1 if and to the extent that such VAT is not recoverable by the Company by repayment or credit, no additional amount shall be paid in respect of VAT and the Compensatory Payment shall be VAT inclusive; and/or 13.5.2 if and to the extent that such VAT is recoverable by the Company by repayment or credit, the amount of the Compensatory Payment shall be increased to take account of such recoverable VAT, such that the total amount of the Compensatory Payment paid to the Acquirer (including the amount in respect of VAT), less the amount of such repayment or credit, is equal to the amount that the Compensatory Payment would have been in the absence of such VAT. 13.6 Such adjusting payment as may be required by the Company to give effect to Clause 13.4 above shall be made five (5) Business Days after the date on which the determination by HMRC has been communicated by the Acquirer to the Company (together with the provision by the Acquirer of a valid VAT invoice).