POSITION PENDING COMPLETION. 6.1 Save as provided for in this Agreement and subject always to Clause 6.2, the provisions of Schedule 10 shall apply. 6.2 The provisions of paragraph 1 of Schedule 10 do not apply in respect of and shall not operate to restrict or prevent: 6.2.1 any matter reasonably undertaken in an emergency or disaster situation with the intention of and only to the extent of those matters required with a view to minimising any adverse effect of such situation (and, subject to any restrictions to which THG reasonably considers it or any Group Company is subject, of which the Buyer will be promptly notified (and, in any event within two Business Days thereof)) and which THG or the relevant Group Company considers to be reasonably necessary in the context of the emergency or disaster situation; 6.2.2 providing information to any government entity, Tax Authority or Authority in the normal course of business (and, subject to any restrictions to which THG reasonably considers it or any Group Company is subject, of which the Buyer will be promptly notified (and, in any event within two Business Days thereof)); 6.2.3 any matter expressly provided for or permitted by this Agreement (including for the avoidance of doubt any matters set out in the definition of Permitted Leakage) or any Transaction Document; 6.2.4 any matters undertaken solely between Group Companies pursuant to a written contract, agreement or arrangement entered into prior to the date of this Agreement and which has been fairly disclosed in the Data Room; 6.2.5 completing or performing any obligations with a third party undertaken pursuant to any written contract, agreement or arrangement entered into prior to the date of this Agreement and which has been fairly disclosed in the Data Room; 6.2.6 any matter to the extent required by Law (and, subject to any restrictions to which THG reasonably considers it or any Group Company is subject, of which the Buyer will be promptly notified (and, in any event within two Business Days thereof)); or 6.2.7 subject to Clause 6.3, any matter contemplated by the Pre-Completion Reorganisation Steps Paper. 6.3 During the period commencing on the date of this Agreement and ending on the Completion Date, THG may implement (and may procure that the THG Group implements) the Pre-Completion Reorganisation, subject to and only in accordance with the following provisions in this Clause 6.3: 6.3.1 the Pre-Completion Reorganisation shall not be implemented, unless: (a) the Pre-Completion Reorganisation has been agreed upon unanimously by the directors of each of HIIH and CSL (and the resolutions recording such approval shall also include the directors’ approval on the matters referred to in Clauses 6.3.2(c)(ii)(A) – (D) (inclusive) in regard to HIIH and CSL and their respective subsidiary undertakings and having regard to their duties and obligations as directors of HIIH and CSL respectively); (b) it is agreed upon in writing by the Buyer and THG, following the process set out in this Clause 6.3. The Buyer may not unreasonably withhold its agreement to the Pre-Completion Reorganisation. THG acknowledges and agrees that it bears the onus of seeking to convince and persuade the Buyer to agree to the implementation of the Pre-Completion Reorganisation. Notwithstanding anything to the contrary in this Clause 6.3, in the event that any Authority (including any PRC Authority) notifies either party that the Pre-Completion Reorganisation will, or would likely, jeopardize the approval process for any applicable Condition, the parties acknowledge and agree that the Pre-Completion Reorganisation shall immediately cease (no matter where it is in the implementation process) and shall not be implemented; and (c) Completion occurs on or before the Initial Longstop Date. If the Buyer and THG agree in writing upon the implementation of the Pre-Completion Reorganisation but: (i) Completion does not occur until after the Initial Longstop Date; or (ii) the Pre-Completion Reorganisation is not implemented for whatever reason on or before the Initial Longstop Date, the Tax aspects of the Pre-Completion Reorganisation shall be unwound (and THG shall procure that the same is unwound) (the “Unwinding”); 6.3.2 the process referred to in Clause 6.3.1 (a) is as follows: (a) first, on or before the 40th day following the date of this Agreement, THG shall use all reasonable endeavours to procure that a memorandum of opinion regarding the effects of the Pre-Completion Reorganisation is prepared by PricewaterhouseCoopers and delivered on a non-reliance basis to the Buyer (the “Memorandum”). If any of the actions or steps proposed to be implemented by THG differ from those set out in the Pre-Completion Reorganisation Steps Paper, THG shall consult with the Buyer regarding the same (and have regard for any reasonable comments of the Buyer and its advisers) and shall use reasonable endeavours to procure that the Memorandum either reflects and explains the consequences of any such changes at the outset or is promptly amended afterwards to do so; (b) second, if requested by the Buyer, THG shall, as soon as reasonably practicable following the delivery of the Memorandum, give the Buyer and its advisers (and shall use all reasonable endeavours to procure that the Buyer is, and its advisers are, given) reasonable access (whether in person or remotely) to: (i) THG and PricewaterhouseCoopers to explore any questions it may have in relation to the Memorandum; (ii) the directors of each of HIIH and CSL to discuss their views on the Pre-Completion Reorganisation; and (iii) the board pack sent to the directors of each of HIIH and CSL in advance of their board meeting to consider (or the written resolution of the directors of each of HIIH and CSL circulated to the directors for their consideration) of the Pre-Completion Reorganisation and to a copy of the minutes of the meeting (or copy of the written resolution passed by the directors), and THG shall procure that copies of the same are provided promptly to the Buyer; (c) third, the Buyer (and its advisers) shall be afforded a reasonable time (and, in any event, before the cut-off time referred to in Clause 6.3.2(d)) to consider and, if thought fit, approve the Pre-Completion Reorganisation. During this period, the Buyer and THG shall, acting reasonably and in good faith, cooperate with one another to help further the understanding of the Buyer on the Pre-Completion Reorganisation and its effects. The Buyer and THG acknowledge and agree that the following constitute reasonable grounds on which the Buyer may legitimately reject the Pre-Completion Reorganisation: (i) it is advised by one of the Buyer’s advisers that the Memorandum is materially deficient or wrong, or that the impact or effect of the Pre-Completion Reorganisation is likely to be materially prejudicial to the matters referred to in Clause 6.3.2(c)(ii)(B), or that no reasonable judgment can be made by one of the Buyer’s advisers on the effects of the Pre-Completion Reorganisation; and/or (ii) the Buyer reasonably believes that the Pre-Completion Reorganisation would, in respect of any one or more of the following matters, likely: (A) violate Law; (B) have a materially prejudicial impact on: (1) the commercial interests (including reputation); (2) the Tax affairs; and/or (3) the capital adequacy ratio, of the Buyer, the Group or the Buyer’s Group; (C) cause a material change in the structure of the Group (otherwise than in accordance with the Pre-Completion Reorganisation); and/or (D) cause any Condition to be unsatisfied; (d) fourth, following steps one to three (inclusive) above, the Buyer and THG must agree in writing to the implementation of the Pre-Completion Reorganisation on or before the cut-off date for proceeding with the implementation of the Pre-Completion Reorganisation, such date being 1 December 2018 (or such other date prior to the Initial Longstop Date as the Buyer and THG may agree in writing). Following such agreement, THG shall implement (and shall procure that the THG Group implements) the Pre-Completion Reorganisation, and THG shall deliver copies of executed documents for the Pre-Completion Reorganisation promptly following implementation. If, however, the Buyer and THG do not agree to the Pre-Completion Reorganisation, it shall not be implemented (and, if and to the extent required, Unwound) and such event shall not give rise to any right of termination for either party; and 6.3.3 without prejudice to paragraph 2.1.5 of Schedule 9, THG shall bear, and THG hereby undertakes to the Buyer to irrevocably and unconditionally indemnify and hold harmless the Buyer (or any member of the Buyer’s Group or the Group on its behalf) from, all Losses which may arise against the Buyer or any member of the Buyer’s Group or the Group from, in connection with or by reference to the Pre-Completion Reorganisation or its Unwinding (including Losses arising from or in connection with any regulatory disapproval outside the PRC because of the Pre-Completion
Appears in 1 contract
Sources: Share Purchase Agreement (Hanover Insurance Group, Inc.)
POSITION PENDING COMPLETION. 6.1 Save as provided for 5.1 The Vendors separately and severally undertake to the Purchaser to procure that pending Completion neither they nor the Company shall allow or procure any act or omission which would (or would be likely to) cause, constitute or result in this Agreement a breach of any of the representations, warranties set out or referred to in Clause 8 and subject always Schedule 4 which would make any of such representations, warranties and undertakings untrue or incorrect or misleading.
5.2 Without prejudice to Clause 6.25.1 the Vendors separately and severally undertake to the Purchaser that they will immediately notify the Purchaser in writing of any matter or thing which arises or becomes known to them after the date of this Deed and prior to Completion which constitutes (or would with the passage of time constitute) a material breach of any representation or warranty set out or referred to in Clause 8 and Schedule 4 or a material breach of any of the covenants or undertakings or obligations of the Vendors under this Deed.
5.3 The Vendors hereby separately and severally undertake to the Purchaser to procure that pending Completion, the provisions of Schedule 10 Company shall apply.
6.2 The provisions of paragraph 1 of Schedule 10 do not apply in respect of and shall not operate to restrict or prevent:
6.2.1 any matter reasonably undertaken in an emergency or disaster situation with the intention of and only to the extent of those matters required with a view to minimising any adverse effect of such situation (and, subject to any restrictions to which THG reasonably considers it or any Group Company is subject, of which the Buyer will be promptly notified (and, in any event within two Business Days thereof)) and which THG or the relevant Group Company considers to be reasonably necessary carry on business in the context of the emergency or disaster situation;
6.2.2 providing information to any government entity, Tax Authority or Authority in the normal ordinary course of business (and, subject to any restrictions to which THG reasonably considers it or any Group Company is subject, of which the Buyer will be promptly notified (and, in any event within two Business Days thereof));
6.2.3 any matter expressly provided for or permitted by this Agreement (including for the avoidance of doubt any matters set out in the definition of Permitted Leakage) or any Transaction Document;
6.2.4 any matters undertaken solely between Group Companies pursuant to a written contract, agreement or arrangement entered into as carried on prior to the date of this Agreement Deed and shall not do anything which has been fairly disclosed is not of a routine nature or which is material in the Data Room;context of the business of the Company.
6.2.5 completing 5.4 Without prejudice to the generality of the undertaking contained in Clause 5.3, the Vendors separately and severally further undertake to the Purchaser to procure that pending Completion the Company shall not, except with the prior written consent of the Purchaser or performing any obligations with a third party undertaken as required pursuant to the terms of this Agreement:
5.4.1 make any written contract, agreement or arrangement entered into prior to change in its business as carried on as at the date of this Agreement and Deed which has been fairly disclosed materially adversely affects its business;
5.4.2 make any change to its trade or trade connections which materially adversely affects its business;
5.4.3 acquire or dispose of (or agree to acquire or dispose of) any asset exceeding (pound)1,000 in value or assets aggregating more than (pound)5,000 in value;
5.4.4 dispose of or agree to dispose of or grant any option in respect of any material asset or assets or any interests therein except in the Data Roomordinary course of business;
6.2.6 5.4.5 remove any matter asset from the Property save in the ordinary course of normal day to day business;
5.4.6 dispose of or agree to dispose of or grant any option in respect of its business or any part of its business or discontinue or cease to operate, or propose to discontinue or cease to operate any part or all of its business;
5.4.7 conduct transactions other than on an arm's length basis;
5.4.8 enter into any contract or commitment other than in the ordinary course of its business, or enter into any contract or commitment of a long-term or unusual nature or which involves or could involve an obligation which is material;
5.4.9 enter into, modify or agree to terminate any material contract or incur any capital expenditure on any individual item for an amount in excess of (pound)1,000, or in respect of all such capital expenditure incurred between the date of this Deed and Completion which, in aggregate, exceeds the sum of (pound)5,000;
5.4.10 acquire (whether by subscription or purchase) any shares, debentures, loan stock, convertible securities or similar securities or enter into any agreement for the acquisition (whether by subscription or purchase) of any shares, debentures, loan stock, convertible securities or similar securities;
5.4.11 permit or suffer any of its insurance to lapse or do anything which would make any policy of insurance void or voidable;
5.4.12 grant or agree to grant any lease or third party right in respect of the Property or assign or agree to assign or otherwise dispose or deal with the same;
5.4.13 enter into any leasing, hire purchase or other agreement or arrangements for payment on deferred terms;
5.4.14 borrow any money over and above existing facilities from its bank;
5.4.15 grant or issue or agree to grant or issue any mortgage, charge, debenture or security for money or redeem or agree to redeem any such mortgage, charge, debenture or security or give or agree to give any guarantee or indemnity;
5.4.16 make any loan or advance;
5.4.17 declare or pay any dividend or make any other distribution of its assets or profits to any shareholder or other person or repay loans to it made by any shareholder or any other person or assign or otherwise dispose of any of its book debts or do or suffer anything whereby its financial position shall be rendered less favourable than at the date hereof;
5.4.18 amend or alter its Memorandum or Articles of Association;
5.4.19 increase or reduce (including by way of redemption or repurchase of existing securities) its authorised or issued share capital;
5.4.20 convert, sub-divide or consolidate any of its shares;
5.4.21 allot or issue (or agree to allot or issue) any shares, rights or options to subscribe for or acquire shares, or grant (or agree to grant) any option in respect of any shares, or allot or issue (or agree to allot or issue) any securities which are convertible into shares of any class;
5.4.22 change its accounting reference date or make any changes to the extent required accounting policies or procedures by Law (and, subject to any restrictions reference to which THG reasonably considers it the Accounts were prepared;
5.4.23 change its residence for taxation purposes;
5.4.24 institute or propose any insolvency proceedings including the appointment of an administrator or the filing of a petition for voluntary winding up, or any Group Company is subjectreconstruction or amalgamation;
5.4.25 appoint or employ any new managerial or senior skilled employee or consultant or amend the terms of employment (including terms as to pension) of any of its present employees or consultants;
5.4.26 institute, settle or agree to settle any legal proceedings relating to its business (save for debt collection in the ordinary course of which the Buyer will be promptly notified (and, in any event within two Business Days thereof)its business); or
6.2.7 subject to Clause 6.3, 5.4.27 incur any matter contemplated by liabilities between itself and any of the Pre-Completion Reorganisation Steps PaperVendors or any person connected with any of the Vendors save for remuneration in the ordinary course of business at current rates.
6.3 During 5.5 Each of the period commencing on Vendors undertakes to the date Purchaser that:
5.5.1 he shall not at any time prior to Completion dispose or attempt to dispose of any interest in the Shares or grant any option over, or mortgage, charge or otherwise encumber or dispose of the Shares or exercise or vary any of the rights attaching to the Shares; or
5.5.2 except with the prior written consent of the Purchaser, he shall not vote in favour of any resolution at any general meeting of the Company.
5.6 Pending Completion the Vendors shall procure that the Purchaser and its agents and representatives are given, upon reasonable notice and during normal business hours, full access to the employees and the Vendors shall upon request furnish such information regarding the businesses and affairs of the Company as the Purchaser may reasonably require and the Purchaser may make such copies of such information as it may reasonably require PROVIDED that in the event that Completion of this Agreement and ending on the Completion Date, THG may implement (and may procure that the THG Group implements) the Pre-Completion Reorganisation, subject to and only shall not occur in accordance with the following provisions in this of Clause 6.3:6 then the Purchaser shall at the election of the Vendors either return all such copies to the Company or destroy all such copies.
6.3.1 5.7 If any material breach of any of the Pre-Completion Reorganisation shall not be implemented, unless:
(a) the Pre-Completion Reorganisation has been agreed upon unanimously by the directors of each of HIIH representations and CSL (and the resolutions recording such approval shall also include the directors’ approval on the matters referred to in Clauses 6.3.2(c)(ii)(A) – (D) (inclusive) in regard to HIIH and CSL and their respective subsidiary undertakings and having regard to their duties and obligations as directors of HIIH and CSL respectively);
(b) it is agreed upon in writing by the Buyer and THG, following the process warranties set out in this Clause 6.3. The Buyer may not unreasonably withhold its agreement to the Pre-Completion Reorganisation. THG acknowledges and agrees that it bears the onus of seeking to convince and persuade the Buyer to agree to the implementation of the Pre-Completion Reorganisation. Notwithstanding anything to the contrary in this Clause 6.3, in the event that any Authority (including any PRC Authority) notifies either party that the Pre-Completion Reorganisation will, or would likely, jeopardize the approval process for any applicable Condition, the parties acknowledge and agree that the Pre-Completion Reorganisation shall immediately cease (no matter where it is in the implementation process) and shall not be implemented; and
(c) Completion occurs on or before the Initial Longstop Date. If the Buyer and THG agree in writing upon the implementation of the Pre-Completion Reorganisation but: (i) Completion does not occur until after the Initial Longstop Date; or (ii) the Pre-Completion Reorganisation is not implemented for whatever reason on or before the Initial Longstop Date, the Tax aspects of the Pre-Completion Reorganisation shall be unwound (and THG shall procure that the same is unwound) (the “Unwinding”);
6.3.2 the process referred to in Clause 6.3.1
(a) is as follows:
(a) first, on or before 8 and Schedule 4 shall come to the 40th day following the date of this Agreement, THG shall use all reasonable endeavours to procure that a memorandum of opinion regarding the effects notice of the Pre-Purchaser before Completion Reorganisation or if there is prepared by PricewaterhouseCoopers and delivered on a any material breach or non-reliance basis to the Buyer (the “Memorandum”). If fulfilment before Completion of any of the actions agreements or steps proposed to be implemented by THG differ from those set out in obligations on the Pre-Completion Reorganisation Steps Paper, THG shall consult with the Buyer regarding the same (and have regard for any reasonable comments part of the Buyer and its advisersVendors (or any of them) and shall use contained in this Deed which (being capable of remedy) is not remedied to the reasonable endeavours to procure that the Memorandum either reflects and explains the consequences of any such changes at the outset or is promptly amended afterwards to do so;
(b) second, if requested by the Buyer, THG shall, as soon as reasonably practicable following the delivery satisfaction of the Memorandum, give the Buyer and its advisers (and shall use all reasonable endeavours to procure that the Buyer is, and its advisers are, given) reasonable access (whether in person or remotely) to:
(i) THG and PricewaterhouseCoopers to explore any questions it may have in relation to the Memorandum;
(ii) the directors of each of HIIH and CSL to discuss their views on the Pre-Completion Reorganisation; and
(iii) the board pack sent to the directors of each of HIIH and CSL in advance of their board meeting to consider (or the written resolution of the directors of each of HIIH and CSL circulated to the directors for their consideration) of the Pre-Completion Reorganisation and to a copy of the minutes of the meeting (or copy of the written resolution passed by the directors), and THG shall procure that copies of the same are provided promptly to the Buyer;
(c) third, the Buyer (and its advisers) shall be afforded a reasonable time (and, in any event, before the cut-off time referred to in Clause 6.3.2(d)) to consider and, if thought fit, approve the Pre-Completion Reorganisation. During this period, the Buyer and THG shall, acting reasonably and in good faith, cooperate with one another to help further the understanding of the Buyer on the Pre-Completion Reorganisation and its effects. The Buyer and THG acknowledge and agree that the following constitute reasonable grounds on which the Buyer may legitimately reject the Pre-Completion Reorganisation:
(i) it is advised by one of the Buyer’s advisers that the Memorandum is materially deficient or wrong, or that the impact or effect of the Pre-Completion Reorganisation is likely to be materially prejudicial to the matters referred to in Clause 6.3.2(c)(ii)(B), or that no reasonable judgment can be made by one of the Buyer’s advisers on the effects of the Pre-Completion Reorganisation; and/or
(ii) the Buyer reasonably believes that the Pre-Completion Reorganisation would, in respect of any one or more of the following matters, likely:
(A) violate Law;
(B) have a materially prejudicial impact on:
(1) the commercial interests (including reputation);
(2) the Tax affairs; and/or
(3) the capital adequacy ratio, of the Buyer, the Group or the Buyer’s Group;
(C) cause a material change in the structure of the Group (otherwise than in accordance with the Pre-Completion Reorganisation); and/or
(D) cause any Condition to be unsatisfied;
(d) fourth, following steps one to three (inclusive) above, the Buyer and THG must agree in writing to the implementation of the Pre-Completion Reorganisation on or before the cut-off date for proceeding with the implementation of the Pre-Completion Reorganisation, such date being 1 December 2018 (or such other date Purchaser prior to the Initial Longstop Date as the Buyer and THG may agree in writing). Following such agreement, THG shall implement (and shall procure that the THG Group implements) the Pre-Completion Reorganisation, and THG shall deliver copies of executed documents for the Pre-Completion Reorganisation promptly following implementation. If, however, the Buyer and THG do not agree to the Pre-Completion Reorganisation, it shall not be implemented (and, if and to the extent required, Unwound) and such event shall not breach would give rise to any right of termination for either party; and
6.3.3 a proper claim then (without prejudice to paragraph 2.1.5 of Schedule 9, THG shall bear, and THG hereby undertakes any other right or remedy which may be available to the Buyer Purchaser in respect thereof) the Purchaser may in its sole discretion and without any liability whatsoever to irrevocably and unconditionally indemnify and hold harmless the Buyer (or any member Vendors elect not to complete the purchase of the Buyer’s Group or the Group on its behalf) from, all Losses which may arise against the Buyer or any member of the Buyer’s Group or the Group from, in connection with or by reference to the Pre-Completion Reorganisation or its Unwinding (including Losses arising from or in connection with any regulatory disapproval outside the PRC because of the Pre-CompletionShares.
Appears in 1 contract