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Delaware
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000-50404
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36-4215970
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(State or other jurisdiction of
incorporation or organization)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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500 West Madison Street, Suite 2800
Chicago, IL
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60661
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(Address of principal executive offices)
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(Zip Code)
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o
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 8.01
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Other Events.
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Item 9.01
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Financial Statements and Exhibits.
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Exhibit
Number
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Description of Exhibit
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Service Agreement between Euro Car Parts Limited and Sukhpal Singh Ahluwalia dated as of September 7, 2017.
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Investment and Shareholders Agreement between Euro Car Parts Limited, an affiliate of Sukhpal Singh Ahluwalia and other parties dated as of September 7, 2017.
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LKQ CORPORATION
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By:
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/s/ Victor M. Casini
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Victor M. Casini
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Senior Vice President and General Counsel
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Euro Car Parts Limited
Sukhpal Singh Ahluwalia
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1
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MEANING OF WORDS USED............................................................................................................................... 3
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2
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PREVIOUS AGREEMENTS AND WARRANTIES............................................................................................... 4
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3
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APPOINTMENT, TERM AND NOTICE................................................................................................................. 4
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4
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DUTIES..................................................................................................................................................................... 5
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5
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PLACE OF WORK................................................................................................................................................... 5
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6
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HOURS OF WORK.................................................................................................................................................. 5
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7
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REMUNERATION................................................................................................................................................... 6
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8
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EXPENSES............................................................................................................................................................... 6
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9
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BONUS AND OTHER BENEFITS.......................................................................................................................... 6
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10
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HOLIDAYS............................................................................................................................................................... 7
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11
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CONFLICTS OF INTERESTS................................................................................................................................. 7
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12
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DATA PROTECTION............................................................................................................................................... 8
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13
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CONFIDENTIALITY................................................................................................................................................ 9
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14
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INTELLECTUAL PROPERTY RIGHTS................................................................................................................ 10
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15
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INCAPACITY........................................................................................................................................................... 11
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16
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TERMINATION....................................................................................................................................................... 11
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17
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RESTRICTIVE COVENANTS............................................................................................................................... 12
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18
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DEDUCTION........................................................................................................................................................... 14
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19
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SALE OR RECONSTRUCTION OF THE COMPANY.......................................................................................... 14
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20
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DELIVERY OF DOCUMENTS AND PROPERTY................................................................................................ 14
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21
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RESIGNATION AS DIRECTOR............................................................................................................................. 14
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22
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RIGHTS FOLLOWING TERMINATION............................................................................................................... 15
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23
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DISCIPLINARY AND GRIEVANCE PROCEDURES........................................................................................... 15
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24
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LITIGATION ASSISTANCE................................................................................................................................... 15
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25
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DIRECTOR'S AND OFFICER'S LIABILITY INSURANCE................................................................................. 16
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26
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NOTICES................................................................................................................................................................. 16
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27
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MISCELLANEOUS................................................................................................................................................. 16
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1
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The Executive Chairman’s Duties and Areas of Responsibility............................................................................... 17
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(1)
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EURO CAR PARTS LIMITED
(company registration no. 02680212) whose registered office is at Euro House, Fulton Road, Wembley Industrial Estate, Wembley, Middlesex HA9 OTF (the "
Company
");
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(2)
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SUKHPAL SINGH AHLUWALIA
of [Home address redacted] (the "
Executive
");
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1.
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Meaning of words used
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1.1
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In this Agreement the following expressions have the following meanings:
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1.2
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References herein to "
Clauses
", "
sub-clauses
" are to clauses and sub-clauses of this Agreement unless otherwise specified.
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1.3
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Unless otherwise required words denoting the singular include the plural and vice versa.
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1.4
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References in this Agreement to statutory provisions include all modifications and re-enactments of them and all subordinate legislation made under them.
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1.5
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Clauses headings are included in this Agreement for convenience only and do not affect its construction.
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2.
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Previous Agreements and Warranties
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2.1
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This Agreement constitutes the entire and only agreement that governs the employment relationship between the Company and the Executive from the Commencement Date in substitution for all previous agreements and arrangements whether written, oral or implied between the Company or any Group Company and the Executive relating to the services of the Executive all of which will be deemed to have terminated by mutual consent with effect from the Commencement Date. The Executive and the Company acknowledge that in entering into this Agreement neither has relied on any representation or undertaking by the other whether oral or in writing except as expressly incorporated In this Agreement or set out in the Sale and Purchase Agreement entered into by the Executive, LKQ Corporation and others on 7 November 2014.
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2.2
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The Executive warrants and represents to the Company that he will not be in breach of any existing or any former terms of employment applicable to him whether express or implied or of any other obligation binding on him by reason of him entering into this Agreement or performing all or any of his duties and obligations under it.
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2.3
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The Executive warrants that at the time of entering into this Agreement he has the right to work in the United Kingdom and he agrees to provide to the Company copies of all relevant documents in this respect at the request of the Company. If at any time during the course of this Agreement the Executive ceases to have the right to work In the United Kingdom the Company may terminate the Executive's employment without payment of compensation.
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3.
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Appointment, Term and Notice
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3.1
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The Company will employ the Executive and the Executive will serve the Company as Executive Chairman of the Company upon the terms and conditions set out in this Agreement.
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3.2
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The Appointment will commence on the Commencement Date and, subject to Clause 16, will continue until 7 September 2020 (the "
Initial Period
"). Should the Company and the Executive agree to extend the Agreement beyond the Initial Period, it will continue thereafter on a rolling basis until it is terminated by either party (subject to any other terms set out in this Agreement) giving to the other not less than 90 days’ prior notice in writing, to expire on or at any time following the end of the Initial Period.
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3.3
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The Executive's continuous employment with the Company for the purposes of this Agreement commenced on 23 January 1992 and is agreed to be continuous and unbroken from that date for the purposes of contractual rights.
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3.4
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The Executive agrees that at its absolute discretion at any time the Company may terminate the Appointment with immediate effect by paying to the Executive salary and benefits (less PAYE deductions):
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3.4.1
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if during the Initial Period, in lieu of the remainder of the Initial Period; or
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3.4.2
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if after the Initial Period, in lieu of the notice period or remainder of the notice period (if at the Company's request the Executive has worked during part of the notice period).
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3.5
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The Company may at its discretion make any payment under Clause 3.4 as a lump sum or in equal Instalments on the nominated day of the month when the Executive would normally have received his basic salary if he had worked through his notice period or the remainder of the Initial Period (as applicable). If the Company decides to make such payments in instalments such payments will be reduced by any remuneration earned by the Executive from new alternative employment during what would have been the notice period, or the remainder of the Initial Period (as applicable). Where this Agreement is terminated in accordance with Clause 3.4 the Executive is required to mitigate any loss by attempting to secure new alternative employment and the Executive agrees to notify the Company without delay if he accepts an offer of employment, consultancy or any directorship and if so requested by the Company to provide
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4.
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Duties
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4.1
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During his normal hours of work (as set out in Clause 6), the Executive will carry out the duties and have the responsibilities and authority set out in Schedule 1. Nothing in this Agreement including Schedule 1 shall prohibit (a) the participation of the CEO of LKQ Europe (or his designee) in the Company’s management meetings, financial and business reviews, budget and planning meetings, and such other events, conferences and meetings as would reasonably be of interest to the CEO of LKQ Europe or (b) the CEO of LKQ Europe to implement systems and/or business practices which are for the benefit of the LKQ European operations as a whole, provided that if such systems and/or business practices materially impact the UK and ROI Group business, their implementation shall be agreed with the Executive in advance or Clause 4.5 shall apply.
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4.2
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The Executive will (if and so long as he is so reasonably required by the Company) act as director of the Company or any Group Company. The Executive will (if and so long as he is so reasonably required by LKQ Corporation) act as director of LKQ Corporation or any Group Company.
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4.3
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The Executive will at all times promptly give to the Board (in writing if requested) all information and explanations that the Board may reasonably require in connection with the business or affairs of the Company and any relevant Group Company and his Appointment.
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4.4
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The Executive will upon becoming aware of the same promptly disclose to the Board in writing full details of any wrongdoing by any other employee or director of the Company or any Group Company where that wrongdoing is in the Executive's reasonable opinion material to that employee or director's employment by the relevant company or to the interests or reputation of the Company or any Group Company.
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4.5
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In the event of a disagreement between the Executive Chairman of the Company and the CEO of LKQ Europe regarding any material matter involving the Company, the CEO of LKQ Corporation will resolve the matter in dispute.
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5.
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Place of Work
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5.1
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The Executive may perform his duties from his home or any other location in the United Kingdom and will not be required to be based at the head office of the Company.
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5.2
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The Company will maintain a desk and office for the Executive at its head office.
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6.
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Hours of work
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6.1
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The Company's normal office hours are from 9.00 am to 5.30 pm Monday to Friday (with one hour for lunch). The Executive will work the equivalent of on average three days per month over the course of each calendar year (subject to Clause 10), on such days or part days and at such times as the Executive may reasonably determine.
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6.2
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The Executive agrees that the weekly limit on average working time of 48 hours including overtime for each seven day period as set out in Regulation 4 of the Working Time Regulations 1998 (the "Regulations'') shall not apply to the Executive. The Executive may withdraw his agreement under this Clause by giving three months' written notice of his intention to be bound by the limit on working hours to the Company.
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7.
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Remuneration
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7.1
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The Company will pay the Executive a salary at the rate of £330,000 per annum (or at such higher rate as may from time to time be notified to him by the Board) and director’s fees as a director of Keystone Automotive Operations (India) Pvt. Ltd. (“LKQ Keystone (Bangalore)”) at the rate of £20,000 per annum
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7.2
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The Executive's salary will be subject to annual reviews by the Board in each year during the Executive's employment under this Agreement. The Executive acknowledges that there is no obligation on the Board to increase the Executive's salary in any particular year.
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7.3
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The salary referred to in this Clause will be inclusive of any director's fees and benefits to which the Executive may be entitled as a director of LKQ Corporation, the Company and any other Group Company excluding LKQ Keystone (Bangalore).
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8.
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Expenses
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8.1
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The Executive will be reimbursed all out of pocket expenses (including any expenses relating to his use of his private vehicle on Group business) reasonably and properly incurred by him in the performance of his duties under this Agreement or as a director of LKQ Corporation on hotel, travelling, entertainment and other similar items provided that he complies with the Company's or LKQ Corporation's then current guidelines relating to expenses and produces to the Company or LKQ Corporation all relevant vouchers in respect of such expenses.
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8.2
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The Company shall continue to provide the Executive with a Company credit card for payment of out of pocket expenses.
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9.
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Bonus and other benefits
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9.1
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The Executive is eligible to join the Company's Group Personal Pension Scheme, subject to its trust deed and rules from time to time in force. Details of the Scheme can be obtained from the People Director. The Scheme may be terminated or amended at any time in accordance with the trust deed and rules that govern it. There is no contracting out certificate in force in respect of the Appointment.
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9.2
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The Executive will be eligible to participate in the LKQ Corporation Bonus Plan (the "
Bonus Scheme
") pursuant to which the Executive will be eligible to receive an annual bonus of up to £150,000 based on the achievement of mutually agreed targets for each calendar year during the continuance of the Executive’s employment. The Company reserves the right to amend, suspend or withdraw the Bonus Scheme at any time. It is agreed that the payment of any bonus is entirely discretionary and shall be determined by the CEO of LKQ Corporation. No bonus will be payable to the Executive if, on the date on which a bonus would be paid, the Executive is no longer employed by the Company or, as at that date, the Executive is under notice or has given notice to terminate this Agreement. For the avoidance of doubt, any bonus, if awarded, does not become due and payable until the date of payment of any bonus.
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9.3
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The Executive will not be eligible to participate in LKQ's Long Term Incentive Plan.
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9.4
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Subject to Clause 9.5, the Executive shall be entitled to participate at the Company's expense in the Company's private medical scheme, providing cover for the Executive, his spouse and dependent children. The Company reserves the right to reasonably amend or replace this scheme at any time without compensation.
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9.5
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All insured benefits are subject to the policy terms and conditions upon which they are incepted or renewed, the Executive (and if relevant any spouse and/or dependent children nominated by the Executive for the purposes of such insured benefits and all dependent children) meeting eligibility for cover and meeting underwriting criteria reasonably acceptable to the Company.
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10.
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Holidays
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10.1
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In addition to all other normal public holidays, the Executive will be entitled to six working days' paid holiday in each holiday year, such holiday to be taken at such time or times as may be approval by the Board. The holiday shall accrue pro rata in each calendar year.
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10.2
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For the purposes of this Clause "holiday year” means the period from 1 January to 31 December in each year. The Executive may not carry untaken holiday forward to the following holiday year without the prior written consent of the Company, save as permitted by law and any carry over, if untaken, will lapse 15 months after the end of the holiday year.
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10.3
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Where the Executive has taken more or less than his holiday entitlement in the year his employment terminates, a proportionate adjustment will be made by way of addition to or deduction from (as appropriate) his final gross pay calculated on a pro rata basis. Any payment in lieu of accrued but untaken holiday shall be in respect of holiday accrued solely in the holiday year in which the employment terminates. The Executive shall not be entitled to any accrued but unused holiday at the termination date beyond his statutory entitlement if his employment is terminated for gross misconduct.
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10.4
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In the event that notice of termination of this Agreement is served by either party, the Company may require the Executive to take any outstanding holiday during his notice period following the expiry of the Initial Period.
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10.5
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During any continuous period of absence due to incapacity of three months or more the Executive shall only accrue statutory holiday under the Working Time Regulations and not contractual holiday (as set out in Clause 10.1).
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11.
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Conflicts of interests
|
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11.1
|
Except with the written consent of the Board (such consent not to be unreasonably withheld) the Executive will not during his employment under this Agreement be directly or indirectly engaged, concerned or Interested whether as principal, servant or agent (on his own behalf or on behalf of or in association with any other person) in any other trade, business or occupation competing in any material respect with the business for the time being of the Company or any Group Company in the EEA provided that the Executive will not be precluded from being interested for investment purposes only as a member, debenture holder or beneficial owner of any stock, shares or debentures which are listed or dealt in on a recognised investment exchange and which do not represent more than five per cent of the total share or loan capital from time to time in issue in such company. The Company hereby gives its express consent to the Executive's interest in the property at Euro House, Fulton Road, Wembley, Middlesex, HA9 OTS and to the Executive’s interest in the JV Company by virtue of his shareholding in Commercial Parts Jersey Limited.
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11.2
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Provided that doing so shall not interfere with the performance of his duties under this Agreement to the Company or any Group Company, the Executive shall have the right to establish and/or acquire a business or businesses for the sale of aftermarket parts to the heavy duty truck industry in the United Kingdom through the JV Company or any business or businesses outside the EEA and the restrictions referred to in this Clause shall not apply in respect of any such business.
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11.3
|
The Executive will not, during his employment, introduce to any other person, firm, company or organisation business or opportunities of any kind with which the Company or any other Group Company for which he has performed services under this Agreement is involved in and he will not have any financial interest in, or derive any financial or other benefit from contracts or transactions entered into by the Company or any other Group Company in respect of services performed under this Agreement for any third party without first disclosing such interest or benefit to the Board and obtaining its written approval.
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11.4
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Notwithstanding the consents granted by the Company at Clause 11.1 in respect of the JV Company, where the Company and the JV Company are or it is anticipated that they may be competition with each
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11.5
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Notwithstanding the provisions of Clause 11.1 in respect of the JV Company, during the Executive’s employment with the Company (whether during the Initial Period or afterwards) the Executive will not without the prior written consent of the Company whether directly or indirectly (through any connected person or otherwise) and whether alone or in conjunction with or on behalf of any other person and in his capacity as a principal, shareholder, director, employee, agent, consultant, partner or otherwise:
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11.5.1
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solicit, induce or entice away any employee, agent, director, consultant or independent contractor employed, appointed or engaged by the Company or any member of the Group;
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11.5.2
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canvass, solicit or approach or cause to be canvassed, solicited or approached any customer of the Company or any member of the Group in order to divert business from the Company or any member of the Group; or
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11.5.3
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interfere or interrupt or cause a material reduction or cessation in the supply to the Company or member of the Group of the current products and services carried on by the business of the Company or any member of the Group at any time.
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12.
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Data Protection
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12.1
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The Company will hold computer records and personnel files containing personal data relating to the Executive. This personal data includes, without limitation, the Executive's employment application, references, bank details, performance appraisals, holiday and sickness records, salary reviews and remuneration details and other records which may include sensitive personal data relating to the Executive's health, ethnic origin arid trade union membership. The Company processes such personal data for personnel, administration and management purposes and to comply with its obligations regarding the processing of Executive/worker records. The Executive's right of access to this data is as prescribed by law.
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12.2
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The Executive hereby agrees that the Company may process personal data relating to him including, without limitation, sensitive personal data relating to the Executive's health, ethnic origin and trade union membership, for personnel, administration and management purposes (including the processing of sensitive personal data for ethnic origin monitoring purposes) and may, when necessary for these purposes or as required by law, make such data available to the following entities:
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12.2.1
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the Group;
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12.2.2
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the Company's advisers;
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12.2.3
|
parties providing products and/or services to the Company (including, without limitation IT systems suppliers, and pension, benefits and payroll administrators);
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12.2.4
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regulatory authorities (including HMRC and the police); and
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12.2.5
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any potential purchasers of the Company or its business (on a confidential basis),
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13.
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Confidentiality
|
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13.1
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The Executive acknowledges that in the ordinary course of his employment he will be exposed to "
Confidential Information
" which means, and which shall include without limitation, information which relates to any and all information (whether or not recorded in documentary form or on computer disk or tape) which may be imparted in confidence or which is of a confidential nature or which the Executive may reasonably regard as being confidential or a trade secret concerning the business, business performance or prospective business, financial information or arrangements, plans or internal affairs of the Company, any Group Company or any of their respective customers or suppliers including without prejudice to the generality of the foregoing all client or customer lists, price sensitive information, technical information, reports, interpretations, forecasts, records, corporate and business plans and accounts, business methods, financial details, projections and targets, remuneration and personnel details, planned products, planned services, marketing surveys, research reports, market share and pricing statistics, budgets, fee levels, computer passwords, the contents of any databases, tables, know how documents or materials, commissions, commission charges, pricing policies and all information about research and development, the Company's or any Group Company's suppliers', customers' and clients' names, addresses (including email), telephone, facsimile or other contact numbers and contact names, the nature of their business operations, their requirements for services supplied by the Company or any Group Company and all confidential aspects of their relationship with the Company or any Group Company. The Executive acknowledges that this Confidential Information is confidential or is commercially sensitive and may not be readily available to others engaged in a similar business to that of the Company or any of the Group Companies or to the general public and which if disclosed will be liable to cause significant harm to the Company or such Group Companies. The Executive has therefore agreed to accept the restrictions in this Clause 13.
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13.2
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Without prejudice to Clause 13.3 or 13.4 and subject to Clause 13.3 the Executive will not during the period of his employment with the Company save in the performance of his duties:
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13.2.1
|
sell or seek to sell to anyone or disclose in any way any Confidential Information acquired or created by him in the course of his employment with the Company;
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13.2.2
|
obtain or seek to obtain any financial advantage (direct or indirect) from disclosure of Confidential Information;
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13.2.3
|
copy or reproduce in any form or by or on any media or device or allow others access to copy or reproduce any documents (including without limitation letters, facsimiles and memoranda), disks, memory devices, notebooks, tapes or other medium whether or not eye-readable and copies thereof on which Confidential Information may from time to time be recorded or referred to ("Documents"): or
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13.2.4
|
remove or transmit from the Company or any Group Company's premises any Documents.
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13.3
|
The Executive will not after the termination of his employment without limit In time for his own purposes or for any purposes other than those of the Company or any Group Company (for any reason and in any manner) use or divulge or communicate to any person, firm, company or organisation except to those officials of any Group Company whose province it is to know the same any Confidential Information. The Executive shall use all reasonable endeavours to prevent any disclosure or communication of Confidential Information which is made otherwise than for the purposes of the Company or the Group.
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13.4
|
During the Appointment, the Executive shall immediately inform the Company if he becomes aware at any time of the possession, use or knowledge of any Confidential Information by any person not authorised to possess, use or have knowledge of the Confidential Information and shall at the Company's request provide such reasonable assistance as is required to deal with such event.
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13.5
|
The restrictions contained in this Clause do not apply to:
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13.5.1
|
any disclosure authorised by the Board or required in the ordinary and proper course of the Executive's employment or as required by the order of a court of competent jurisdiction or any appropriate regulatory authority or otherwise required by law; or
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13.5.2
|
any information which the Executive can demonstrate was known to the Executive prior to the commencement of the Executive's employment by the Company or a Group Company or is in the public domain otherwise than as a result of a breach by him of this Clause; or
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13.5.3
|
any information disclosed to the Executive by a third party who is not bound by any duty of confidence to the Company or any Group Company.
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13.6
|
The provisions of this Clause are without prejudice to the duties and obligations of the Executive to be implied into this Agreement at common law and any other duties or obligations to which the Executive is subject pursuant to any other agreement with the Company or any third parties. In addition to the restrictions in this Clause the Executive hereby agrees that at the request and expense of the Company he will enter into a direct agreement or undertaking with any other Group Company whereby he will accept restrictions and provisions corresponding to the restrictions and provisions in this Clause (or such of them as may be appropriate in the circumstances) in relation to such information as such Group Company may reasonably require for the protection of its legitimate interests.
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14.
|
Intellectual Property Rights
|
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14.1
|
For the purpose of this Clause 14:
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14.1.1
|
"
Employment IPRs
" means any Intellectual Property Rights created wholly or partially by the Executive in the course of his employment with the Company (whether or not during working hours or using Company premises or resources); and
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14.1.2
|
''
Intellectual Property Rights
" means all present and future rights in patents, rights to inventions, trademarks, rights in designs, trade or business names, domain names, rights in get-up, rights in goodwill or to sue for passing off, unfair competition rights, copyright and related rights, rights in computer software, database rights, topography rights, rights in know-how, trade secrets, rights of confidence and any other intellectual property right or right of a similar nature anywhere in the world, in each case whether registered or unregistered, whether now known or hereafter invented and including all applications (or rights to apply) for such rights and all extensions, renewals and reversions of such rights and all similar or equivalent rights or forms of protection which subsist or will subsist now or in the future in any part of the world; and
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14.1.3
|
"
Invention
" means any invention, discovery or improvement made or discovered wholly or partially by the Executive in the course of his employment with the Company (whether or not during working hours or using Company premises or resources), including without limitation any know-how, design, process, drawing, formula, model, prototype, computer program or specification or other material which relates or may relate or are actually or potentially useful to any product, service, process, equipment, system or activity of the Company or Group from time to time, whether or not now or at any future time capable of being the subject of a UK or any other patent or registered right and whether or not recorded in any medium or material form.
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14.2
|
The Executive shall give the Company full written details of all Inventions and of all Employment IPRs on request. The Executive acknowledges and agrees that all Employment IPRs and Inventions shall automatically and immediately, on creation, vest in the Company absolutely to the fullest extent permitted by law. To the extent that such rights do not vest automatically, the Executive holds them on trust for the Company. The Executive agrees promptly to execute all documents and do all acts as may, in the reasonable opinion of the Company, be necessary to give effect to this Clause 14.2.
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14.3
|
The Executive hereby irrevocably waives all moral rights under the Copyright, Designs and Patents Act 1988 (and all similar rights in other jurisdictions) which he has or will have in any existing or future work created by him in the course of his employment by the Company.
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14.4
|
The Executive hereby irrevocably authorises the Company to appoint a person to execute any documents and to do everything reasonably necessary and generally reasonably to use his name for the purpose of giving full effect to the obligations of the Executive under this Clause 14 on the Executive's behalf.
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15.
|
Incapacity
|
|
15.1
|
If the Executive is absent from his duties as a result of illness or injury he will notify Human Resources as soon as possible and complete any self-certification forms which are reasonably required by the Company. If the incapacity continues for a period of seven days or more he will produce to the Company a medical certificate to cover the duration of such absence.
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15.2
|
Subject to the rest of this Clause and subject to the receipt of the appropriate certificates in accordance with Clause 15.1, if the Executive Is absent from his duties as a result of illness or injury he will be entitled to payment of his salary at the full rate in respect of such illness or injury for a period (in total) of no more than 13 weeks in any period of 12 months (whether the absence is intermittent or continuous) and thereafter at half rate for a further 13 weeks in the same period of 12 months. Thereafter the Executive will not be entitled to any further payment from the Company or any other Group Company (other than Statutory Sick Pay) until the resumption of his duties.
|
|
15.3
|
The remuneration paid under Clause 15.2 will include any Statutory Sick Pay payable and when this is exhausted will be reduced by the amount of any Social Security Sickness Benefit or other benefits recoverable by the Executive (whether or not recovered).
|
|
15.4
|
When the Executive is absent by reason of sickness, injury or other incapacity for a continuous period of 4 weeks for more, the Executive will, at the reasonable request of the Board, agree to have a medical examination performed by a doctor appointed and paid for by the Company and the Executive hereby authorises the Board to have unconditional access to any report or reports (including copies) produced as a result of any such examination as the Board may from time to time require.
|
|
16.
|
Termination
|
|
16.1
|
The Company may terminate the Executive's employment immediately by summary notice in writing (notwithstanding that the Company may have allowed any time to elapse or on a former occasion may have waived its rights under this Clause) at any time if he:
|
|
16.1.1
|
in the performance of his duties under this Agreement or otherwise commits an act of gross misconduct;
|
|
16.1.2
|
commits, repeats or continues any other material breach of this Agreement provided that, in the case of this sub-clause 16.1.2 only, the Executive has been given reasonable and specific written notice of such a failure and a reasonable opportunity to cure and no cure has been effected or initiated within a reasonable time, but not less than 30 days, after such notice;
|
|
16.1.3
|
is convicted of any criminal offence other than an offence which does not in the reasonable opinion of the Board affect his position under this Agreement;
|
|
16.1.4
|
becomes bankrupt or enters into or makes any arrangement or composition with or for the benefit of his creditors generally;
|
|
16.1.5
|
becomes prohibited by law from being a director of a company; or
|
|
16.1.6
|
resigns from office as a director of the Company, LKQ Corporation or any other Group Company in breach of Clause 21.3.
|
|
16.2
|
The Company agrees that it shall only exercise the right in Clause 16.1 in good faith.
|
|
16.3
|
The Executive agrees that at the expense and request of the Company and in any event on termination of his employment he will transfer or procure the transfer of all shares held by him in trust or as a nominee by virtue of his employment with the Company to such person or persons as the Company may direct. If the Executive falls to do so within seven days of any such request or the termination of his employment (as the case may be) the Company is irrevocably authorised to appoint a person or persons to execute all necessary transfer forms and other relevant documentation on his behalf.
|
|
17.
|
Restrictive Covenants
|
|
17.1
|
In this Clause 17 the following expressions have the following meanings:
|
|
17.1.1
|
negotiating with the Company or a Relevant Group Company for the sale or supply of Relevant Products or Services; or
|
|
17.1.2
|
a client or customer of the Company or any Relevant Group Company for the sale or supply of Relevant Products or Services; or
|
|
17.1.3
|
in the habit of dealing with the company or any Relevant Group Company for the sale or supply of Relevant Products or Services;
|
|
17.1.4
|
the United Kingdom; and
|
|
17.1.5
|
any other country in the EEA where, on the Termination Date, the Company or any Group Company carries on business (whether through physical locations in, sales in or purchases from such countries);
|
|
17.2
|
The Executive will not without the prior written consent of the Company (such consent not to be unreasonably withheld) directly or indirectly (through any connected person, affiliate or otherwise) and whether alone or in conjunction with or on behalf of any other person and whether as a principal, shareholder, director, employee, agent, consultant, partner or otherwise:
|
|
17.2.1
|
within the Restricted Territory for a period of 12 months from the Termination Date carry on, be employed, engaged, concerned or interested in, or provide technical, commercial or professional advice to, any other business which:-
|
|
17.2.1.1
|
supplies or is about to be engaged in supplying the Relevant Products or Services in competition with the Company or any Group Company; or
|
|
17.2.1.2
|
is or was at any time during the Relevant Period a Relevant Customer of the Company or any Group Company;
|
|
17.2.2
|
for a period of 12 months from the Termination Date so as to compete with the Company or any Group Company canvass, solicit or approach or cause to be canvassed, solicited or approached any Relevant Customer for the sale or supply of Relevant Products or Services or endeavour to do so; or
|
|
17.2.3
|
for a period of 12 months from the Termination Date:
|
|
17.2.3.1
|
solicit, induce or entice away from the Company or any Group Company; or
|
|
17.2.3.2
|
in connection with any business in or proposing to be in competition with the Company or any Group Company employ, engage or appoint or in any way case to be employed, engaged or appointed;
|
|
17.2.4
|
represent himself as being interested in or employed by or in any way connected with the Company or any Group Company (other than as a former employee and/or founder of the Company) or use in such connection with any business any name which includes the name of the Company or any Group Company or any colourable imitation of it.
|
|
17.3
|
Clause 17.2.1 above shall not apply in respect of the sale of aftermarket parts to the heavy duty truck industry in the United Kingdom conducted through the JV Company under the control of the Executive.
|
|
17.4
|
Nothing in Clause 17.2 shall preclude the Executive from holding (directly or through nominees) investments listed on the Official List of the London Stock Exchange plc or in respect of which dealing takes place on the Alternative Investment Market or any recognised stock exchange as long as the
|
|
17.5
|
Whilst the restrictions in this Clause 17 are regarded by the parties as fair and reasonable in the circumstances and necessary for the protection of the Company or of any Group Company and do not bear harshly on the Executive, it is hereby declared that each of the restrictions in this Clause 17 is intended to be separate and severable. If any restriction if held to be unreasonably wide but would be valid if part of the wording (including in particular but without limitation the defined expressions referred to in Clause 17.1) were deleted, such restriction will apply with so much of the wording deleted as may be necessary to make it valid.
|
|
17.6
|
If the Executive applies for or is offered a new employment, appointment or engagement during the period of the restrictions set out above, before entering into any related contract, the Executive will bring the terms of this Clause 17 and Clause 14 to the attention of a third party proposing directly or indirectly to employ, appoint or engage him.
|
|
18.
|
Deduction
|
|
19.
|
Sale or reconstruction of the company
|
|
20.
|
Delivery of documents and property
|
|
21.
|
Resignation as director
|
|
21.1
|
The Executive will on termination of his employment in accordance with the terms of this Agreement at the request of the Board giving notice resign immediately without claim for compensation (but without prejudice to any claim he may have for damages for breach of this Agreement):
|
|
21.1.1
|
as a director of the Company and all such Group Companies of which he is a director; and
|
|
21.1.2
|
all trusteeships held by him of any pension scheme or other trusts established by the Company or any Group Company or any other company with which the Executive has had dealings as a consequence of his employment with the Company.
|
|
21.2
|
If notice pursuant to this Clause is not received by the relevant company within seven days of a request by the Company, the Company is irrevocably authorised to appoint a person to execute any documents and to do everything reasonably necessary to effect such resignation or resignations on the Executive's behalf.
|
|
21.3
|
Except with the prior written agreement of the Board, as required by law or where to remain as a director may result in the Executive breaching his duties as a director under the Companies Act 2006, the Executive will not during this employment under this Agreement resign his office as a director of the Company, any other relevant Group Company or LKQ Corporation and if he does so without the consent or concurrence of the Company (or other relevant Group Company), the Company will be entitled to terminate his employment pursuant to Clause 16 or at the Company's absolute discretion, to treat such resignation as notice of termination given by the Executive to the Company pursuant to Clause 3.2.
|
|
22.
|
Rights following termination
|
|
23.
|
Disciplinary and grievance procedures
|
|
23.1
|
The Company does not have a formal disciplinary procedure which is applicable to the Executive but will comply with any statutory requirements from time to time in force.
|
|
23.2
|
If the Executive has a grievance in relation to his employment or is dissatisfied with a disciplinary decision against him he may apply in writing to a member of the Board who will decide the matter in question. If the Executive is dissatisfied with such decision he may refer the matter to the Chairman of the Board whose decision will be final.
|
|
24.
|
Litigation assistance
|
|
25.
|
Director's and Officer's liability insurance
|
|
26.
|
Notices
|
|
27.
|
Miscellaneous
|
|
27.1
|
This Agreement shall be governed by and interpreted in accordance with the law of England and Wales.
|
|
27.2
|
The parties to this Agreement submit to the exclusive jurisdiction of the English Courts in relation to any claim, dispute or matter arising out of or relating to this Agreement.
|
|
27.3
|
Any delay by the Company in exercising any of its rights under this Agreement will not constitute a waiver of such rights.
|
|
1.
|
Lead the United Kingdom (UK) and Republic of Ireland (ROI) executive directors in the day-to-day running of the UK and ROI Group business, including communicating its decisions and recommendations to the CEO of LKQ Corporation and the board of directors of LKQ Corporation, and mentoring the management team and having the CEO of the UK and ROI Group business directly report to the Executive;
|
|
2.
|
Oversee the formulation of strategy for the UK and ROI Group business;
|
|
3.
|
Regularly review the UK and ROI operational performance and strategic direction;
|
|
4.
|
Regularly review the UK and ROI Group business’s organisational structure and implement changes as appropriate, establishing the compensation of senior executives, including benefits, and defining their job responsibilities (subject to the approval of the CEO of LKQ Corporation);
|
|
5.
|
Take all reasonable steps to ensure that all LKQ group policies and procedures are followed by the UK and ROI Group business and that it conforms to the highest standards;
|
|
6.
|
Lead the UK and ROI Group business in its relationship and communication with the CEO of LKQ Corporation, the board of directors of LKQ Corporation, the media and commentators;
|
|
7.
|
Chair all Board meetings of the Company;
|
|
8.
|
Continue his involvement in and personal oversight of the UK and ROI Group business's key relationships with buying groups, key suppliers and certain major national customers;
|
|
9.
|
Provide strategic high level M&A advice for the UK, ROI, Europe and India (for the avoidance of doubt, excluding the day to day execution of mergers and acquisitions);
|
|
10.
|
Directly support LKQ's European expansion and take all reasonable steps to ensure that the UK and ROI Group business cooperates with and works effectively and proactively with other Group Companies to maximise the overall results of LKQ Europe on all cross border initiatives, including, without limitation, purchasing and supply chain optimisation (including ATR), cataloguing, cross trading, concept development, private label strategies, pricing, big data projects, consolidation of back office functions, distribution and warehousing of inventory, and other initiatives as pursued by LKQ Europe;
|
|
11.
|
Lead the efforts of the UK and ROI Group business to expand and develop its salvage parts business; and
|
|
12.
|
Provide input regarding the operating capital and budgets and capital funding for acquisitions of the UK and ROI Group business.
|
|
13.
|
Make frequent and extended visits to India in order to:
|
|
13.1
|
Assess the size and nature of opportunities within the Indian automotive parts aftermarket and related market sectors, their geographical distribution and development possibilities;
|
|
13.2
|
Recommend how, when and where LKQ Corporation can successfully enter this market, either alone or in partnership with existing operators;
|
|
13.3
|
Identify appropriate recruitment candidates who are assessed to have appropriate skills and connections to form part of LKQ Corporation’s management team in India; and
|
|
13.4
|
Provide the output of these investigations directly to the Chief Executive Officer of LKQ Corporation;
|
|
14.
|
In respect of LKQ (Keystone) Bangalore:
|
|
14.1
|
Assess the management team and existing facilities;
|
|
14.2
|
Assess the opportunities for expansion and diversification, noting any likely limitations especially relating to personnel and real estate;
|
|
14.3
|
Recommend the range of business administration activities currently conducted by LKQ Companies in the United Kingdom and The Netherlands that might profitably be transferred to LKQ India;
|
|
14.4
|
Assist with the initiation, development and execution of a project plan to successfully achieve such transfers; and
|
|
14.5
|
Provide the output of these activities and investigations directly to the Chief Executive Officer of LKQ Corporation and shared with the Chief Executive Officer of LKQ Europe Ltd.
|
|
|
||
|
|
|
|
|
|
|
/s/ Todd Cunningham
|
|
|
|
Signature of director
|
|
|
|
|
|
Signature of witness
|
/s/ Catherine Harrison
|
|
|
Print Name
|
Catherine Harrison
|
|
|
Address
|
Euro Car Parts LTD
|
|
|
|
Danny Morson Way
|
|
|
|
Tamworth
|
|
|
|
B78 1SE
|
|
|
Occupation
|
Commercial Assistant
|
|
|
|
||
|
|
|
|
|
|
|
/s/ Sukhpal Singh Ahluwalia
|
|
|
|
Signature of Sukhpal Singh Ahluwalia
|
|
|
|
|
|
Signature of witness
|
/s/ Vanita Mendonca
|
|
|
Print Name
|
Vanita Mendonca
|
|
|
Address
|
171 Wembley Hill Road
|
|
|
|
Wembley
|
|
|
|
HA9 8EL
|
|
|
|
|
|
|
|
|
|
|
Occupation
|
Personal Assistant
|
|
|
|
|
|
Commercial Parts Jersey Limited
as Investor 1
Euro Car Parts Limited
as ECP
James Rawson
as Mr Rawson
Neil Brown
as Mr Brown
Commercial Parts UK Holdco Limited
as Company
|
|
No
|
Heading Pages
|
|
1.
|
Definitions 1
|
|
2.
|
Interpretation 6
|
|
3.
|
Subscriptions for Shares 7
|
|
4.
|
Completion 8
|
|
5.
|
Ongoing Operation of the Company 9
|
|
6.
|
Ongoing Funding of the Company 9
|
|
7.
|
Warranties 11
|
|
8.
|
Shareholder Consent 11
|
|
9.
|
Further issue and transfer of shares 12
|
|
10.
|
Rights to Information 13
|
|
11.
|
Put and Call Option 13
|
|
12.
|
Restrictive Covenants 13
|
|
13.
|
Confidentiality 15
|
|
14.
|
Announcements 15
|
|
15.
|
Costs and expenses 16
|
|
16.
|
Automatic termination and consequences of termination 16
|
|
17.
|
Cumulative remedies 16
|
|
18.
|
Waiver 17
|
|
19.
|
Entire agreement 17
|
|
20.
|
Variation 17
|
|
21.
|
No partnership 17
|
|
22.
|
Assignment and transfer 17
|
|
23.
|
Rights of third parties 18
|
|
24.
|
Conflict between this Agreement and the Articles 18
|
|
25.
|
Counterparts 18
|
|
26.
|
Notices 18
|
|
27.
|
Severance 19
|
|
28.
|
Governing law 19
|
|
29.
|
Jurisdiction 19
|
|
Schedule 1
|
20
|
|
Part 1
|
20
|
|
The Investors
|
20
|
|
Schedule 2
|
21
|
|
Particulars of the Company
|
21
|
|
Schedule 3
|
22
|
|
Part 1
|
22
|
|
Members of the Company - pre-Completion
|
22
|
|
Part 2
|
22
|
|
Members of the Company - post-Completion
|
22
|
|
Schedule 4
|
23
|
|
Matters requiring Shareholder Majority Consent:
|
23
|
|
Schedule 5
|
25
|
|
Deed of Adherence
|
25
|
|
Schedule 6
|
26
|
|
Terms on Which Shareholders May Satisfy a Funding Requirement
|
26
|
|
Schedule 7
|
27
|
|
Terms on Which ECP may be required to provide funding under Clause 6.4
|
27
|
|
Schedule 8
|
29
|
|
Determination of EBITDA
|
29
|
|
The following principles shall apply in the determination of EBITDA:
|
29
|
|
Schedule 9
|
31
|
|
Put and Call Options
|
31
|
|
Schedule 10
|
36
|
|
Terms of Working Capital Advance
|
36
|
|
(1)
|
The persons whose names and addresses are set out in Schedule 1 (the "
Investors
" and each an "
Investor
"); and
|
|
(2)
|
COMMERCIAL PARTS UK HOLDCO LIMITED
a company registered in England (company registration no. 10832591) whose registered in office is at 88 Baker Street, London, United Kingdom, W1U 6TQ (the "
Company
").
|
|
(A)
|
The Company is a private company limited by shares, brief particulars of which are set out in Schedule 2.
|
|
(B)
|
Details of the legal and beneficial ownership of the share capital of the Company as it is now and as it will be immediately following Completion are set out in parts 1 and 2 of Schedule 3.
|
|
(C)
|
The Investors wish to subscribe for shares in the capital of the Company and to then provide for certain matters relating to the ongoing management and operation of the Company.
|
|
1.
|
Definitions
|
|
(a)
|
moneys borrowed which shall include but shall not be limited to any overdraft;
|
|
(b)
|
any amount raised by acceptance under any acceptance credit facility;
|
|
(c)
|
any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
|
|
(d)
|
the amount of any liability in respect of a hire purchase, credit sale, or conditional sale agreement including but not limited to vehicle finance leases;
|
|
(e)
|
any amount which is treated as deferred consideration for the purposes of any acquisition (and which will become due with the passage of time or where any conditions as to it becoming due are reasonably likely to be satisfied);
|
|
(f)
|
any liabilities in respect of corporation tax to the extent that the Company has not paid its estimated annual taxes (as determined by the Company in good faith) in full and on time on a monthly basis;
|
|
(g)
|
any redemption fee, penalty, termination fee, premium, expenses or otherwise which the lender/creditor is entitled to charge in connection with the repayment or termination at the end of the relevant Reference Period of any relevant facility/transaction (provided that the same has actually been charged); and
|
|
(h)
|
any dividends payable by the Company;
|
|
(a)
|
£20,000,000; and
|
|
(b)
|
an amount equal to:
|
|
(i)
|
the amount of six times the EBITDA (determined for the purposes of Clause 6.4); less
|
|
(ii)
|
the aggregate of the principal amount outstanding at the relevant time in respect of any funding provided by Shareholders under Clause 6.2 ;less
|
|
(iii)
|
the aggregate of the principal amount of Debt outstanding at the relevant time (excluding for these purposes Debt provided under Clauses 4.2(j), 4.3 and/or 6.4); less
|
|
(iv)
|
the aggregate liability (if any) of ECP in respect of which any guarantee(s) that (with the approval of the Board) have been given by ECP (or which are due to be provided by ECP as at the date on which the Company exercises its rights under Clause 6.4) in favour of a third party in respect of obligations of the Company not taken into account in sub paragraphs (ii) or (iii) of this paragraph (b) together with any Guarantee Fee in respect of such guarantee(s);
|
|
(a)
|
the Company becoming insolvent within the meaning of Section 123(1) Insolvency Act 1986;
|
|
(b)
|
the Company stopping or suspending payment of any its debts generally, or becoming unable to or admitting its inability to pay its debts as they fall due;
|
|
(c)
|
the Company commencing negotiations or entering into any composition or arrangement with its creditors generally with a view to rescheduling its indebtedness or liabilities (by reason of actual or anticipated financial difficulties);
|
|
(d)
|
a moratorium being declared in respect of any indebtedness or liabilities of the Company; and
|
|
(e)
|
any action, proceedings, procedure or step being taken in relation to the suspension of payments, winding up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of the Company or the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of the Company or any of its assets;
|
|
(a)
|
the occurrence of any of:
|
|
(i)
|
the liquidation or winding up of the Company (except for the purposes of a solvent reorganisation, reconstruction or amalgamation where no cash or cash equivalent is distributed to shareholders in the Company and which is approved in accordance with clause 8);
|
|
(ii)
|
completion of:
|
|
(A)
|
the disposal by members of the Company's Group of all or substantially all of its business, undertaking and assets; or
|
|
(B)
|
the sale of (or the grant (other than pursuant to Schedule 9) of a right to acquire or to dispose of) any shares in the Company (in one transaction
|
|
(C)
|
the admission of any Shares to trading on the London Stock Exchange’s markets for listed securities becoming effective; and
|
|
(D)
|
the grant of permission for the dealing in any shares in the Company on any other public securities market (including the AIM Market operated by London Stock Exchange plc or any successor market) becoming effective.
|
|
(a)
|
in respect of any person (other than Investor 1 and the Company), that person and each undertaking which is from time to time its parent undertaking or its subsidiary undertaking or any subsidiary undertaking of any such parent undertaking;
|
|
(b)
|
in the case of Investor 1, that person and each undertaking which is from time to time its parent undertaking or its subsidiary undertaking or any subsidiary undertaking of any such parent undertaking plus any other body corporate which is ultimately controlled by Sukhpal Singh Ahluwalia, Parvinder Ahluwalia, Husnel Ahluwalia, Pritpal Ahluwalia, Jay Ahluwalia or any of their respective family trusts; or
|
|
(c)
|
in respect of the Company, the Company and any subsidiary undertaking from time to time of the Company;
|
|
(a)
|
where the EBITDA needs to be determined for the purposes of Clause 6.4, the 12 month period to the end of the calendar month last ending before the service of the Company's notice under Clause 6.4; and
|
|
(b)
|
where the EBITDA needs to be determined for the purposes of Schedule 9, the 12 month period to the end of the calendar month last ending before the service of the relevant Exercise Notice.
|
|
2.
|
Interpretation
|
|
2.1
|
The Clause and Paragraph headings and the table of contents used in this Agreement are inserted for ease of reference only and shall not affect construction.
|
|
2.2
|
Unless the context otherwise requires, Clauses, Sub-Clauses and Schedules refer to clauses and sub-clauses of, and schedules to, this Agreement and to Paragraphs refer to paragraphs of the Schedule in which they appear.
|
|
2.3
|
References to persons shall include bodies corporate, unincorporated associations and partnerships, in each case whether or not having a separate legal personality.
|
|
2.4
|
Reference to a party or parties is to a party or parties of this Agreement (including for the avoidance of doubt the Shareholders).
|
|
2.5
|
References to any English statute or other legislation or legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of any jurisdiction other than England, be deemed to include a reference to that which most nearly approximates to the English legal term in that jurisdiction.
|
|
2.6
|
References to those of the parties that are individuals include their respective legal personal representatives.
|
|
2.7
|
References to "
writing
" or "
written
" includes any non-transitory form of visible reproduction of words including email.
|
|
2.8
|
References to the word "
include
" or "
including
" (or any similar term) are not to be construed as implying any limitation and general words introduced by the word "
other
" (or any similar term) shall not be given a restrictive meaning by reason of the fact that they are preceded or followed by words indicating a particular class of acts, matters or things.
|
|
2.9
|
The expressions "
undertaking
", "
subsidiary undertaking
" and "
parent undertaking
" have the meanings given to them respectively in sections 1161 and 1162 of the Companies Act 2006 (save that for the purposes of subsection (2) of section 1162 an undertaking shall be treated as a member of another undertaking if any shares in that other undertaking are held by a person (or that person's nominee) by way of security or in connection with the taking of security granted by the first undertaking).
|
|
2.10
|
References to any document in the "
approved form
" means a document in a form approved by (and for the purpose of identification signed or initialled by or on behalf of) the parties to this Agreement.
|
|
2.11
|
Except where the context specifically requires otherwise, words importing one gender shall be treated as importing any gender, words importing individuals shall be treated as importing corporations and vice versa, words importing the singular shall be treated as importing the plural and vice versa, and words importing the whole shall be treated as including a reference to any part thereof.
|
|
2.12
|
References to statutory provisions, enactments or EC Directives shall include references to any amendment, modification, extension, consolidation, replacement or re-enactment of any such provision, enactment or EC Directive (whether before or after the date of this Agreement), to any previous enactment which has been replaced or amended and to any regulation, instrument or order or other subordinate legislation made under such provision, enactment or EC Directive unless any such change imposes upon any party any liabilities or obligations which are more onerous than as at the date of this Agreement.
|
|
2.13
|
Where any Shareholder (or its nominee) votes in favour of a particular matter at a Board and/or shareholders meeting (in person by proxy) of the Company or any member of its Group, then that Shareholder shall be deemed to have given his written consent in respect of such matter for the purposes of the definition of Shareholder Majority Consent.
|
|
3.
|
Subscriptions for Shares
|
|
3.1
|
Subject to the provisions of Clause 4.1, the Investors detailed below apply for the allotment and issue to them at Completion of the following Shares as set out in the table below and the Company accepts such applications:
|
|
3.2
|
The subscriptions for Shares under Clause 3.1 are in addition to the issue of shares to Mr Rawson which is to be made pursuant to the Sale Agreement.
|
|
4.
|
Completion
|
|
4.1
|
Completion shall take place on the Completion Date provided that the Condition has been satisfied (Shareholder Majority Consent being deemed to have been given in respect of the matters required to satisfy the Condition). If the Condition is not satisfied on the date of this Agreement then this Agreement shall automatically terminate and be of no effect.
|
|
4.2
|
At Completion the following events shall occur (Shareholder Majority Consent being deemed to have been given in respect of such events):
|
|
(a)
|
each Investor shall pay the sum set out against its name in column 3 of the table in Clause 3.1 (by electronic funds transfer to the following client account of the Company's Solicitors):
|
|
(b)
|
Investor 1 shall pay the £1 due on the subscriber shares in the Company;
|
|
(c)
|
Investor 1 shall pass a special resolution of the Company so as to adopt the Articles as the Articles of Association of the Company;
|
|
(d)
|
a meeting of the Board shall be held at which the Company shall:
|
|
(i)
|
issue the New Shares credited as fully paid to the Investors and enter their names in the register of members in respect thereof;
|
|
(ii)
|
execute and deliver to the Investors certificates for the New Shares;
|
|
(e)
|
Investor 1 shall exercise its powers of appointment under Article 21 to appoint Anthony Simler as a director (it being agreed that Sukhpal Singh Ahluwalia shall be deemed to have been appointed by Investor 1 under Article 21)
|
|
(f)
|
Andrew Ludlow shall be appointed as an additional director of the Company and he and the Company shall enter into the NED Appointment Letter relating to him;
|
|
(g)
|
ECP shall exercise its powers of appointment under Article 21 of the Articles to appoint Joseph Holsten and John Quinn as additional directors of the Company;
|
|
(h)
|
Mr Rawson shall exercise his powers of appointment under Article 21 of the Articles to appoint himself as an additional director of the Company;
|
|
(i)
|
Mr Brown shall exercise his powers of appointment under Article 21 of the Articles to appoint himself as an additional director of the Company and he and the Company shall enter into the NED Appointment Letter relating to him; and
|
|
(j)
|
each of the Investors shall advance to the Company the amounts detailed opposite their respective names below, such amounts to be advanced by way of loan on the terms and conditions set out in Schedule 10:
|
|
4.3
|
Following Completion if any amount shall become payable by the Company under Schedule 7 (Deferred Consideration) of the Sale Agreement, then if so required by the Company a notice shall be delivered to each Investor setting out the total amount of Deferred Consideration payable and
|
|
5.
|
Ongoing Operation of the Company
|
|
5.1
|
Each Shareholder shall exercise all voting rights and powers of control which it may have in relation to the Company so as to procure (insofar as he is reasonably able to do so) that:
|
|
(a)
|
at all times during the term of this Agreement the Company is managed in accordance with the provisions of this Agreement; and
|
|
(b)
|
the Company performs and complies with all obligations on its part under this Agreement and the Articles.
|
|
5.2
|
Each party undertakes to the other parties that:
|
|
(a)
|
it will not and will procure that the Company or any member of the Company’s Group will not in the course of operation of the Business engage in any activity, practice or conduct which would constitute an offence under sections 1, 2 or 6 of the Bribery Act 2010; and
|
|
(b)
|
the Company will establish and maintain in place adequate procedures (as defined in section 7(2) of the Bribery Act 2010 and any guidance issued by the Secretary of State under section 9 of the Bribery Act 2010) which are designed to prevent any employee, officer, agent or similar from undertaking any conduct that would give rise to an offence under section 7 of the Bribery Act 2010.
|
|
6.
|
Ongoing Funding of the Company
|
|
6.1
|
Following Completion, the Company will seek a third party finance facility or facilities (the "
Third Party Facilities
") to fund the expansion strategy of the Company's Group.
|
|
6.2
|
Where the Company's Group proposes to undertake an acquisition or open a new branch which (after making a reasonable allowance for any ongoing working capital requirements of the Company's Group) the Company's Group is unable to finance from its then existing surplus working capital and/or any then existing Third Party Facilities which have been fully drawn down, or it is unable to obtain new or additional funding from a Third Party Facility for this purpose and on terms acceptable to the Board, then the Company may:
|
|
(a)
|
give notice (a "
Funding Notice
") to the Shareholders of the amount of the shortfall (the "
Funding Requirement
"); and
|
|
(b)
|
give each of the Shareholders an opportunity to provide all or part of such Funding Requirement on the terms set out in Schedule 6.
|
|
6.3
|
To the extent that at the end of the Offer Period:
|
|
(a)
|
Shareholders
have not
in aggregate offered to provide the full amount of the Funding Requirement (the shortfall being the "
Unallocated Requirement
") then:
|
|
(i)
|
those Shareholders (if any) who have offered to provide any part of the Funding Requirement shall be required to provide the amount which they offered to provide on the terms set out in Schedule 6; and
|
|
(ii)
|
the Company shall be entitled to exercise its rights under Clauses 6.4 and 6.5;
|
|
(b)
|
Shareholders
have
in aggregate offered to provide the full amount of the Funding Requirement then such offers shall be accepted on the basis that:
|
|
(i)
|
each Shareholder is first allocated a proportion of the Funding Requirement which equals the lesser of the amount which that Shareholder offered to provide and a proportion of the Funding Requirement equivalent to his percentage holding of Shares;
|
|
(ii)
|
the balance of the Funding Requirement shall be allocated pro rata to their respective holdings of Shares to those Shareholders who offered to provide more than their pro rata proportion of the Funding Requirement (but so that no Shareholder can be allocated in aggregate more than the amount which that Shareholder offered to provide) and this process shall be repeated until the full amount of the Funding Requirement has been allocated.
|
|
6.4
|
Where the Company is entitled in accordance with Clause 6.3(a)(ii) to exercise its rights under this Clause, then
Provided That
:
|
|
(a)
|
the relevant acquisition or branch opening has been approved by both an ECP Director and an Investor 1 Director;
|
|
(b)
|
the date for draw down of the relevant advance is before the fifth anniversary of the date of this Agreement; and
|
|
(c)
|
the maximum aggregate principal amount (excluding all accrued interest) then outstanding from the Company to ECP in respect of funds advanced under this Clause 6.4 is less than the ECP Funding Cap,
|
|
(i)
|
the Unallocated Requirement; and
|
|
(ii)
|
the amount which, when added to the aggregate principal amount (excluding all accrued interest) then outstanding from the Company to ECP in respect of all funds advanced to the Company for the purpose of funding the expansion strategy of the Company's Group will equal the ECP Funding Cap.
|
|
6.5
|
To the extent that ECP is not required to provide the full amount of the Unallocated Requirement under Clause 6.4 or does not satisfy its obligations to provide funding under Clause 6.4 when due,
|
|
7.
|
Warranties
|
|
7.1
|
The Company warrants to the Investors that as at the date of this Agreement:
|
|
(a)
|
the information in respect of the Company set out in Schedule 2 is true and accurate;
|
|
(b)
|
the shareholders in the Company as they are now and will be following Completion and completion of the Sale Agreement are as set out in Schedule 3;
|
|
(c)
|
save for the incurring of costs and expenses in connection with the discussions and negotiations in connection with this Agreement, and the investigations, discussions and negotiations undertaken in connect with the Sale Agreement, the Company has not traded and has no assets or liabilities.
|
|
7.2
|
Each of the Investors warrants to the other Investors and the Company that:
|
|
(a)
|
the relevant Investor has all requisite power and authority to enter into and perform this Agreement in accordance with its terms, without requiring the consent, approval or authority of any other person; and
|
|
(b)
|
this Agreement constitutes valid, legal and binding obligations of the relevant Investor in accordance with its terms.
|
|
8.
|
Shareholder Consent
|
|
8.1
|
Each of the Shareholders shall exercise all voting rights and powers of control available to him in relation to the Company or any member of the Group to procure (in so far as he is reasonably able) that:
|
|
(a)
|
save with Shareholder Majority Consent, no member of the Company's Group shall undertake any of the matters referred to in Schedule 4; and
|
|
(b)
|
save with the consent of all Shareholders, no member of the Company's Group shall undertake any of the matters set out in paragraph 1, 4, 5, 6, 7, 9, 10, 11 or 20 of Schedule 4.
|
|
8.2
|
Subject to Clause 8.3, the Company (which for the avoidance of doubt includes the Board) agrees that:
|
|
(a)
|
save with Shareholder Majority Consent, it shall not and it shall procure that no member of the Company's Group shall undertake any of the matters referred to in Schedule 4 but this Clause shall not impose any obligation or restriction on the Company (or any member of the Company's Group) which may not be imposed by law; and
|
|
(b)
|
save with the consent of all Shareholders, no member of the Company's Group shall undertake any of the matters set out in paragraph 1, 4, 5, 6, 7, 9, 10, 11 or 20 of Schedule 4.
|
|
8.3
|
The restriction in Clause 8.2 shall not apply to the extent that it cannot lawfully be applied to the Company or any member of the Group.
|
|
9.
|
Further issue and transfer of shares
|
|
9.1
|
Subject to Clause 9.2, each Shareholder undertakes that he shall not, and shall not agree to, transfer, mortgage, charge or otherwise dispose of the whole or any part of his interest in, or grant any option or other rights over, any shares in the capital of the Company to any person except where permitted or required so to do pursuant to the Articles or this Agreement.
|
|
9.2
|
In the event that:
|
|
(a)
|
any Shareholder (other than ECP) proposes to sell, transfer or dispose of any Shares during the four year period from the date of this Agreement and it is not a Permitted Transfer under the Articles or required under Articles 13 or 14 of the Articles, the consent of both ECP and Investor 1 will be required before any such sale, transfer or disposition of Shares can be effected;
|
|
(b)
|
ECP proposes to sell, transfer or dispose of any Shares during the five year period from the date of this Agreement and it is not a Permitted Transfer under the Articles or required under Article 13, the consent of Investor 1 will be required before any such sale, transfer or other disposition of Shares can be effected and regardless of the reason for or nature of the same and it is agreed that if ECP are authorised to make a sale, transfer or disposition of their Shares pursuant to this Clause 9.2(b) with the consent of Investor 1, and such sale, transfer or other disposition of Shares occurs such that ECP no longer has any interest in any Shares, then the obligation to provide further funding under Clause 6.4 shall cease; or
|
|
(c)
|
ECP sells, transfers or disposes of any Shares during the four year period from the date of this Agreement in breach of the terms of this Agreement or the Articles or it is a Permitted Transfer under the Articles or required under Article 13, the obligation on ECP to provide funding to the Company under Clause 6.4 shall continue in accordance with the provisions of such Clause until the fifth anniversary of the date of this Agreement.
|
|
9.3
|
Without prejudice to Clause 9.1 and Clause 9.2, no Shareholder shall effect any transfer, mortgage, charge or other disposal of any interest in Shares described in Clause 9.1 nor shall the Company issue any shares or equity securities (as defined in section 560 of the Companies Act 2006) or sell or transfer any Shares held as treasury shares, to any person who is not a party to this Agreement without first obtaining from the transferee or subscriber a Deed of Adherence.
|
|
9.4
|
The Deed of Adherence shall be in favour of the Company, the Shareholders and any other parties to this Agreement and shall be delivered to the Company at its registered office. Subject to Clause 9.3, no share transfer or issue of shares shall be registered unless such Deed of Adherence has been delivered by the relevant transferee or allottee (as applicable).
|
|
10.
|
Rights to Information
|
|
10.1
|
The Company shall provide to the Shareholders:
|
|
(a)
|
by not later than 15 Business Days following the end of each calendar month, monthly management accounts for the Company and its Group containing an income statement, balance sheet and statement of cash flows;
|
|
(b)
|
by not later than 45 days following the end of each calendar quarter, quarterly management accounts for the Company and its Group containing a quarterly income statement, balance sheet and statement of cash flows, each prepared in accordance with International Financial
|
|
(c)
|
draft annual accounts for the Company, each member of its Group and consolidated annual accounts for the Company's Group as soon as is reasonably practicable and, in any event, within 45 days, from the end of each financial year of the Company; and
|
|
(d)
|
annual accounts for the Company, each member of its Group and consolidated annual accounts for the Company's Group (audited in each case where applicable) in a form substantially approved by the then auditors of the Company, as soon as is reasonably practicable after they have been so approved,
|
|
11.
|
Put and Call Option
|
|
11.1
|
The provisions of Schedule 9 shall apply.
|
|
11.2
|
For the purposes of Article 10.1 the Shareholders approve any transfer of Shares under the provisions of Schedule 9 as a "Permitted Transfer".
|
|
12.
|
Restrictive Covenants
|
|
12.1
|
For the purpose of assuring the value of the Business and the full benefit of the goodwill of the business of the Company, each Shareholder hereby undertakes and covenants with the other Shareholders and the Company that (save for any interest in the shares or other securities of a company traded on a securities market so long as such interest does not extend to more than 3 per cent of the issued share capital of the company or the class of securities concerned or save with Majority Shareholder Consent) and whether alone or on behalf of or jointly with another person he/it shall not:
|
|
(a)
|
prior to the Termination Date:
|
|
(i)
|
within the United Kingdom carry on or be concerned, engaged or interested directly or indirectly (in any capacity whatsoever) in any Competing Business (and for these purposes the term "
Competing Business
" means a business which competes with the Business and the business of the Company's Group at the relevant time); or
|
|
(ii)
|
on his own account or on behalf of any other person, firm or company solicit contracts or orders in connection with any Competing Business from any person firm or company who has been a customer of any member of the Company's Group during the period of 12 months ending on the date of such solicitation and with whom he/she had frequent contact within such period; or
|
|
(iii)
|
endeavour to entice away on his own account or on behalf of any other person, firm or company any consultant, executive or employee from the Company's Group (whether or not such person would commit a breach of contract by reason of leaving the service of the Company's Group); and
|
|
(b)
|
during the period of 12 months commencing on the Termination Date:
|
|
(i)
|
within the United Kingdom carry on or be concerned, engaged or interested directly or indirectly (in any capacity whatsoever) in any Post Termination Competing Business (and for these purposes the term "
Post Termination
Competing Business
" means a business which competes with the Business or business of the Company's Group as carried on at the Termination Date);
|
|
(ii)
|
on his own account or on behalf of any other person, firm or company solicit contracts or orders in connection with any Post Termination Competing Business from any person firm or company who has been a customer of any member of the Company's Group during the period of 12 months ending on the Termination Date and with whom he/she had frequent contact within such period; or
|
|
(iii)
|
endeavour to entice away on his own account or on behalf of any other person, firm or company any consultant, executive or employee from the Company's Group on the Termination Date (whether or not such person would commit a breach of contract by reason of leaving the service of the Company's Group).
|
|
12.2
|
Nothing in this Clause 12 shall operate to prohibit:
|
|
(a)
|
ECP or any member of its Group from carrying on the business in the manner and scope in which it is carried on by ECP or any member of its Group at the date of this Agreement in respect of Clause 12.1(a) or the manner and scope in which it is carried on by ECP or any member of its Group as at the Termination Date for the purposes of clause 12.1(b); or
|
|
(b)
|
Sukhpal Singh Ahluwalia from performing his duties under the terms of any service agreement with ECP or any member of its Group.
|
|
12.3
|
Each of the restrictions contained in each paragraph of Clause 12.1 is separate and distinct and is to be construed separately from the other such restrictions.
|
|
12.4
|
Each Shareholder hereby acknowledges that he considers such restrictions to be reasonable both individually and in the aggregate and that the duration extent and application of each of such restrictions are no greater than is necessary for the protection of the goodwill of the Business and any other businesses of the Company's Group and that the consideration paid by the Investors for the New Shares applied for in this Agreement takes into account and adequately compensates him for any restriction or restraint imposed thereby. However, if any such restriction shall be found to be void or unenforceable but would be valid or enforceable if some part or parts thereof were deleted or the period or area of application reduced, each Shareholder hereby agrees that such restriction shall apply with such modification as may be necessary to make it valid.
|
|
12.5
|
Each Shareholder acknowledges and agrees that damages alone may not be an adequate remedy for the breach of any of the undertakings or obligations as set out in this Clause. Accordingly, without prejudice to any other rights and remedies the parties may have, the parties shall be entitled to seek the remedies of injunction, specific performance or other equitable relief for any threatened or actual breach of the terms of this Clause.
|
|
13.
|
Confidentiality
|
|
13.1
|
Notwithstanding the duties owed by each of the directors of the Company or any member of its Group, any such director shall be entitled to disclose any information and provide relevant documents and materials about the Company and its Group and discuss its and their affairs, finances and accounts with appropriate officers, senior employees or advisers of any Shareholder (and any member of such Shareholder's Group).
|
|
13.2
|
Subject to Clauses 13.3 and 13.4, and save as required by law, regulation, the rules of any stock exchange or by any relevant national or supranational regulatory authority, each of the parties shall not and shall procure that each member of its Group shall not disclose to any person, shall safeguard and treat as confidential and (save as contemplated by this Agreement) not use for the purposes of its own business any information, documents and materials (together "
Confidential Information
") which it acquires in connection with this Agreement and which relates to the business of the Group or to any of the other parties.
|
|
13.3
|
The obligations of confidentiality in this Clause 13 shall survive the termination of this Agreement and shall continue unless and until any of the relevant Confidential Information enters the public domain through no fault of any party or of any other person owing a duty of confidentiality to the relevant party.
|
|
13.4
|
Each party (the "
Disclosing Party
") shall be entitled to disclose any information and provide relevant documents and materials about the Business of the Company and its affairs to any member of its Group and its and their officers, employees, agents and professional and financial advisers who are required to know the same to carry out their duties provided that the Disclosing Party shall then procure that the recipients of such information, documents and materials shall then comply with the provisions of this Clause 13 as if they were parties to it.
|
|
14.
|
Announcements
|
|
14.1
|
Except in accordance with Clauses 13.2 or 14.2, the parties shall not make any public announcement or issue a press release or respond to any enquiry from the press or other media concerning or relating to this Agreement or its subject matter (including but not limited to the Investors' investment in the Company) or any ancillary matter.
|
|
14.2
|
Notwithstanding Clauses 13.1 and 14.1, any party may:
|
|
(a)
|
make any press release to the effect that it has made an investment in the Company and/or that it is a Shareholder in the Company without obtaining the prior approval of any other parties;
|
|
(b)
|
make or permit to be made an announcement concerning or relating to this Agreement or its subject matter or any ancillary matter with the prior written approval of the Board or if and to the extent required by:
|
|
(i)
|
law;
|
|
(ii)
|
any securities exchange on which such party’s securities are listed or traded;
|
|
(iii)
|
any regulatory or governmental or other authority with relevant powers to which such party is subject or submits, whether or not the requirement has the force of law; or
|
|
(iv)
|
any court order.
|
|
15.
|
Costs and expenses
|
|
16.
|
Automatic termination and consequences of termination
|
|
16.1
|
This Agreement shall terminate automatically:
|
|
(a)
|
when all of the Shareholders so agree in writing;
|
|
(b)
|
where all of the issued Shares are beneficially owned by the same person; or
|
|
(c)
|
when a resolution is passed by the Shareholders or an order made by a court or other competent body or person instituting a process that shall lead to the Company being wound up and its assets being distributed.
|
|
16.2
|
Without prejudice to Clause 16.1 and subject to Clause 16.3, this Agreement shall cease to have effect as regards any Shareholder which ceases to hold any Shares in the Company as a result of a transfer in accordance with this Agreement and the Articles (and for these purposes the fact that a transfer of Shares has not been registered by the Company shall not prevent the Shareholder from having ceased to hold such shares provided that the transfer is in accordance with this Agreement and the Articles).
|
|
16.3
|
Termination of all or part of this Agreement (irrespective of the reason and whether in whole or in respect of particular Shareholders) shall not release any party from any liability which at the time of termination has already accrued or which may accrue after termination of this Agreement in respect of any act or omission prior to such termination, and further the provisions of Clauses 1, 2, 4.3, 6 and 11 to 29 and Schedules 6, 7, 8, 9 and 10 (inclusive)) shall continue to apply notwithstanding such termination. Notwithstanding any other provision of this Agreement, if ECP transfers its Shares in accordance with the terms of this Agreement, then the terms of Schedule 7 and Schedule 10 shall continue to apply and shall be enforceable by ECP until such monies owed by the Company to ECP have been repaid in full.
|
|
17.
|
Cumulative remedies
|
|
18.
|
Waiver
|
|
19.
|
Entire agreement
|
|
19.1
|
This Agreement and the documents referred to or incorporated in it constitute the entire agreement between the parties relating to the subject matter of this Agreement and supersede and extinguish any prior drafts, agreements, undertakings, representations, warranties and arrangements of any nature whatsoever, whether or not in writing, between the parties in relation to the subject matter of this Agreement.
|
|
19.2
|
Each of the parties acknowledges and agrees that it has not entered into this Agreement in reliance on any statement or representation of any person (whether a party to this Agreement or not) other than as expressly incorporated in this Agreement and the documents referred to or incorporated in this Agreement.
|
|
19.3
|
Without limiting the generality of the foregoing, each of the parties irrevocably and unconditionally waives any right or remedy it may have to claim damages and/or to rescind this Agreement by reason of any misrepresentation (other than a fraudulent misrepresentation) having been made to it by any person (whether party to this Agreement or not) and upon which it has relied in entering into this Agreement.
|
|
19.4
|
Nothing contained in this Agreement or in any other document referred to or incorporated in it shall be read or construed as excluding any liability or remedy as a result of fraud.
|
|
20.
|
Variation
|
|
21.
|
No partnership
|
|
22.
|
Assignment and transfer
|
|
22.1
|
This Agreement is personal to the parties and no party shall:
|
|
(a)
|
assign any of its rights under this Agreement;
|
|
(b)
|
transfer any of its obligations under this Agreement;
|
|
(c)
|
sub-contract or delegate any of its obligations under this Agreement; or
|
|
(d)
|
charge or deal in any other manner with this Agreement or any of its rights or obligations.
|
|
22.2
|
Any purported assignment, transfer, sub-contracting, delegation, charging or dealing in contravention of Clause 22.1 shall be ineffective.
|
|
23.
|
Rights of third parties
|
|
23.1
|
Save for a Shareholder who has duly executed a Deed of Adherence and any person referred to in Clause 19.3, a person who is not a party has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement. Notwithstanding the forgoing the rights of a person who is entitled to enforce rights under this Agreement by virtue of such act may be amended in accordance with Clause 20.
|
|
24.
|
Conflict between this Agreement and the Articles
|
|
24.1
|
Subject to any applicable law, in the event of any ambiguity or conflict between this Agreement and the Articles of Association, the terms of this Agreement shall prevail as between the Shareholders and in such event the Shareholders shall procure such modification to the Articles as shall be necessary.
|
|
24.2
|
Subject to Clause 24.1, the provisions of the Articles shall apply as if set out in this Agreement.
|
|
25.
|
Counterparts
|
|
26.
|
Notices
|
|
26.1
|
Any communication and/or information to be given in connection with this Agreement shall be in writing in English and shall either be delivered by hand or sent by first class post or email:
|
|
(a)
|
to the Company at its registered office;
|
|
(b)
|
to any Shareholder at its address stated in this agreement or relevant Deed of Adherence
|
|
26.2
|
A communication sent according to Clause 26.1 shall be deemed to have been received:
|
|
(a)
|
if delivered by hand, at the time of delivery;
|
|
(b)
|
if sent by pre-paid first class post, on the second day after posting; or
|
|
(c)
|
if sent by email, at the time of completion of transmission by the sender;
|
|
27.
|
Severance
|
|
27.1
|
If any provision of this Agreement is held to be invalid or unenforceable by any judicial or other competent authority, all other provisions of this Agreement will remain in full force and effect and will not in any way be impaired.
|
|
27.2
|
If any provision of this Agreement is held to be invalid or unenforceable but would be valid or enforceable if some part of the provision were deleted, the provision in question will apply with the minimum modifications necessary to make it valid and enforceable.
|
|
28.
|
Governing law
|
|
29.
|
Jurisdiction
|
|
29.1
|
This Agreement and any non-contractual obligation arising out of or in connection with it are governed by the law of England and Wales.
|
|
29.2
|
Each party irrevocably agrees that the courts of England and Wales have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including any dispute relating to its existence, validity, interpretation, enforceability or termination).
.
|
|
Name
|
Address/email address
|
|
Commercial Parts Jersey Limited (a company incorporated in Jersey with number …..)
Contact name: Sukhpal Singh Ahluwalia
|
43/45 La Motte Street, St Helier, Jersey JE4 8SD
Email: [Email address redacted]
|
|
Euro Car Parts Limited (a company incorporated in England with number 02680212)
Contact name: Samar Khagram
|
Euro House Fulton Road, Wembley Industrial Estate, Wembley, Middlesex, HA9 0TF
Email: [Email address redacted]
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James Rawson
|
[Home address redacted]
Email
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Neil Brown
|
[Home address redacted]
Email: [Email address redacted]
Email: [Email address redacted]
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Registered number:
|
10832591
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Registered office:
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88 Baker Street, London, United Kingdom, W1U 6TQ
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Directors:
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Sukhpal Singh Ahluwalia
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Secretary:
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None
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Accounting reference date:
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Charges:
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None
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Auditors:
|
None
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Issued share capital immediately before Completion:
|
1 Ordinary Share of £1
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Member
|
Number of Shares held
|
|
Investor 1
|
1
|
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ECP
|
0
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Mr Rawson
|
0
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|
Neil Brown
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0
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Member
|
Number of Shares held
|
|
Investor 1
|
55,000
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|
ECP
|
25,000
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Mr Rawson
|
15,000
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Neil Brown
|
5,000
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1.
|
Any alteration of its articles of association or any other constitutional documents required under the Companies Act 2006;
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2.
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The passing of any resolution for its winding or liquidation on a solvent basis;
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3.
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Any change in the nature of its business which will result in a material change in the nature of the Business undertaken by the Company's Group as a whole including (but not limited to) any change of name;
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4.
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Entering into any agreement which will entitle any person to call for an allotment of any shares or other securities (other than to a member of the Company's Group) in circumstances where such shares or securities are not issued and allotted at the time that the relevant agreement is entered into;
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5.
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Other than in accordance with Article 6 of the Articles or to a member of the Company's Group, issuing any shares or other securities or granting any option or other interest (in the form of convertible securities or in any other form) over any of the share capital of the Company or any member of the Company’s Group;
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6.
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Issuing any shares or other securities or declaring any dividend or other distribution in the period between the service of an Option Notice and Option Completion in respect of the relevant Option;
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7.
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Allotting or issuing any shares in the capital of the Company which are not Shares;
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8.
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Entering into any contract or varying any contract with a director of the Company or with a Shareholder or with a Connected Party of either including but not limited to the giving of any guarantees or shareholder loans other than envisaged in Clauses 4.2(j), 4.3 and 6 or the payment of any management related charges, or similar between the Company, any member of the Company’s Group and any Shareholder or their connected persons;
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9.
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Any reduction, sub-division, redenomination, conversion or purchase of own shares of all or part of the Company’s share capital or effecting any other type of share for share exchange transaction or associated redemption/capitalisation and re-issue of shares involving the Company or any member of the Company’s Group;
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10.
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Any issue of shares by the Company by way of capitalisation of profits or reserves;
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11.
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Any variation to the rights attached to any Shares;
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12.
|
The disposal or the entering into of any agreement for the disposal of all or a material part of the business or undertaking of the Company's Group taken as a whole including for the avoidance of doubt any form of merger, amalgamation, joint venture cooperation agreement or similar arrangement used to effect or implement any such disposal;
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13.
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The entering into of any transaction or agreement or arrangement other than on arm's length terms;
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14.
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The formation of any board committee to which the Board delegates certain of its powers;
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15.
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The formation or implementation of any dividend policy (which shall include for the avoidance of doubt the making of any distributions) and the approval of any subsequent alteration of any such dividend policy;
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16.
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The formation or dissolution of any subsidiaries or any new holding company (save where this arises as a result of an acquisition of a company by a member of the Company's Group provided such acquisition has been approved by the Board;
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17.
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The alteration of any accounting policies, change of accounting reference date or change of auditors;
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18.
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The application for the listing or trading of any shares in the capital of the Company or any debt securities on any stock exchange;
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19.
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The establishment or amendment of any profit sharing, bonus or other incentive scheme of any nature for directors, officers and (to the extent outside of the ordinary course of business and inconsistent with normal employee remuneration arrangements) employees;
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20.
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The establishment or amendment of any share option scheme;
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21.
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The approval of any annual budget;
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22.
|
The appointment of additional members to the Board (which shall include any observers) whether under Article 17(1) of the Model Articles or otherwise (but Majority Shareholder Consent shall not be required in respect of an appointment by the persons referred to in Article 21.2 in exercise of their powers of appointment under Article 21.1); and
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23.
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Approval of the terms of appointment of any members of the Board (save for those terms imposed by law or under the Articles).
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(A)
|
This Deed is supplemental to an investment and shareholders’ agreement (the “
Agreement
”) dated [ ] 20[ ] made between [
insert details of the original parties and details of any subsequent deeds of variation and/or Deeds of Adherence
].
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(B)
|
The New Shareholder wishes to acquire by [
number
] Shares in the capital of the Company.
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(C)
|
Clause 9 of the Agreement provides that no person shall be registered as the holder of any Shares unless it is a party to the Agreement or enters into a deed of adherence in substantially the form of this Deed.
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1.
|
The New Shareholder confirms that it has been given a copy of the Agreement [(together with the other documents referred to in paragraph (A) above)] and agrees to become a party to the Agreement with effect from [the date on which it is registered as the holder of any shares in the Company] and covenants with the Continuing Parties to observe, perform and be bound by every provision of the Agreement (other than any which no longer remain to be observed and performed at the date of this Deed) as if the New Shareholder had been an original party to it in the capacity of a Shareholder.
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2.
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For the purposes of Clause
…………….,
the contact details for the New Shareholder shall be as follows:
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4.
|
Unless the context otherwise requires, words and expressions defined in the Agreement shall have the same meanings when used in this Deed.
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5.
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The provisions of Clauses 17 to 29 (inclusive) of the Agreement shall apply to this Deed as if those provisions had been set out expressly in this Deed (with reference to this Deed).
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1.
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Amount to be provided by each Shareholder
: To be determined in accordance with Clause 6.3.
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2.
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Date for Drawdown
: The date specified by the Company by notice to relevant Shareholders which shall not be less than 10 Business Days after the date on which the relevant Shareholder has been notified of the amount to be provided by the relevant Shareholder under Clause 6.3
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3.
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Condition to Draw Down
: The Company has commitments from Shareholders to satisfy the full amount of the relevant Funding Requirement through the operation of Clauses 6.3 and/or 6.4 and any issue of shares provided for in Clause 6.5.
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4.
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Interest
: Amounts provided under Clause 6.3 shall for so long as they remain outstanding carry interest at the Interest Rate (both before and after judgement). Such interest to accrue daily based on a 365 day year and to be compounded annually. Interest shall only be payable on the occurrence of an Exit or the relevant advance becoming repayable in accordance with Paragraph 5.
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5.
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Repayment
: Any amount advanced under Clause 6.3 shall be repaid by the Company on the first to occur of:
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(a)
|
the fifth anniversary of Completion;
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(b)
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an Exit; or
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(c)
|
the relevant advance becoming repayable in accordance with Paragraph 9 below as a result of an Event of Default occurring.
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6.
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Early Repayment
: The Company shall be entitled to repay any advance under Clause 6.3 in advance of the relevant advance otherwise becoming repayable. At the same time the Company shall pay any interest accrued on the amount repaid.
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7.
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Pro Rata Repayment
: When repaying any funds advanced under Clauses 6.3 or 6.4, the Company shall repay an equal proportion of the aggregate amount of outstanding funds advanced by each Shareholder (including any person who has ceased to be a Shareholder) under such Clauses (regardless of the Funding Requirement in respect of which the relevant advance has been made).
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8.
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Subordination
: The advance shall be fully subordinated to any amount payable under any Third Party Facility. For these purposes all Shareholders shall enter into subordination arrangements (in such form as may be agreed by the Company, Investor 1 and ECP acting reasonably) for the purposes of giving effect to the provisions of this Paragraph 8.
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9.
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Event of Default
: If an Event of Default shall occur, then, subject to the subordination arrangements referred to in Paragraph 8, the relevant Shareholder shall be entitled by notice to the Company to require the Company to immediately repay the full amount advanced including any interest thereon under Clause 6.3. Any such repayment obligation shall be subject to the Company complying with its obligations under Paragraph 7.
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10.
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Withholdings
: All amounts to be paid to in respect of any advance (including both principal and interest) shall be paid subject to any deduction or withholding required by law.
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1.
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Amount to be provided
: To be determined in accordance with Clause 6.4.
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2.
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Date for Drawdown
: The date specified by the Company by notice to ECP which shall not be less than 10 Business Days after the date on which the ECP has been notified of the amount to be provided by ECP under Clause 6.4 and shall not be after the fifth anniversary of the first Third Party Facility being entered into by the Company.
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3.
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Condition to Draw Down
: The Company has commitments from Shareholders to satisfy the full amount of the relevant Funding Requirement through the operation of Clauses 6.3 and/or 6.4 and any issue of shares provided for in Clause 6.5.
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4.
|
Interest
: Amounts provided under Clause 6.4 shall for so long as they remain outstanding carry interest at the Interest Rate (both before and after judgement). Such interest to accrue daily based on a 365 day year and to be compounded annually. Interest shall only be payable on the occurrence of an Exit or the relevant advance becoming repayable in accordance with Paragraph 5 below.
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5.
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Repayment
: Any amount advanced under Clause 6.4 shall be repaid by the Company on the first to occur of:
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(a)
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the fifth anniversary of Completion;
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(b)
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an Exit; or
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(c)
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the relevant advance becoming repayable in accordance with Paragraph 9 below as a result of an Event of Default occurring.
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6.
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Early Repayment
: The Company shall be entitled to repay any advance under Clause 6.4 in advance of the relevant advance otherwise becoming repayable. At the same time the Company shall pay any interest accrued on the amount repaid.
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7.
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Pro Rata Repayment
: When repaying any funds advanced under Clauses 6.3 or 6.4, the Company shall repay an equal proportion of the aggregate amount of outstanding funds advanced by each Shareholder (including any person who has ceased to be a Shareholder) under such Clauses (regardless of the Funding Requirement in respect of which the relevant advance has been made).
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8.
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Security
:
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(a)
|
shall be fully subordinated (both as to security and payment) to any amount payable under any existing Third Party Facility save in circumstances where the existing lender of such Third Party Facility provides consent to ECP’s security and payment taking priority;
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(b)
|
to the extent that any borrowings are made by the Company under a new Third Party Facility entered into after the date on which monies have been advanced to the Company by ECP pursuant to Clause 6.4 and this Schedule, any security interest to be granted and right to repayment in respect of the new Third Party Facility shall, if so required by the new lender, rank in priority to ECP but only provided that and to the extent that the amount of funds advanced by ECP is within or equal to the ECP Funding Cap (calculated at the time of entry into the new Third Party Facility). If the amount of funds available to the Company under the new Third Party Facility will exceed the amount of the unused element of the ECP
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(c)
|
in respect of the loans provided to the Company under Clause 4.2(j), unless those amounts are repaid to the Shareholders within 3 months from the date on which those loans are advanced, then they shall be deemed to be subordinated (both as to security and payment) to the loans made by ECP to the Company pursuant to the terms of Clause 6 and this Schedule 7;
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9.
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Event of Default
: If an Event of Default shall occur, then, subject to the subordination arrangements referred to in Paragraph 8, ECP shall be entitled by notice to the Company to require the Company to immediately repay the full amount advanced including any interest thereon under Clause 6.4. Any such repayment obligation shall be subject to the Company complying with its obligations under Paragraph 7.
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10.
|
Withholdings
: All amounts to be paid to in respect of any advance (including both principal and interest) shall be paid subject to any deduction or withholding required by law.
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1.
|
EBITDA shall be determined on a consolidated basis for the Company's Group applying the statements of standard accounting practice issued or adopted by the Financial Reporting Council, including Financial Reporting Standards, Statements of Standard Accounting Practice and Abstracts (save to the extent inconsistent with the following provisions of this Schedule) (collectively to be referred to as “Applicable Accounting Standards”) and on the basis that such policies and practices used shall not be changed or altered unless required by law, by the Financial Reporting Counsel or with consent of all parties to this Agreement;
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2.
|
To the extent otherwise included in EBITDA, the following shall be excluded:
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(a)
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all Exceptional Items (as defined in Financial Reporting Standard 102 and which are items of an exceptional nature or which occur infrequently and which are not related to the normal course of business and would not be expected to be repeated or cause further costs to the Company or any member of the Group in the future) including:
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(i)
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gains/losses from disposals of fixed assets or investments to the extent not in the ordinary course of business;
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(ii)
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discontinued operations;
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(iii)
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litigation settlements to the extent not in the ordinary course of business;
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(iv)
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reversal of general provisions from any period prior to the Reference Period which are not released in the ordinary course of business but which are in accordance with Applicable Accounting Standards and on a consistent basis with prior accounting periods; and
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(v)
|
reversal of specific provisions from any period prior to the Reference Period but which is in accordance with Applicable Accounting Standards and on a consistent basis with prior accounting periods and where the creation and release of such provision has not been approved by the auditors of the Company;
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(b)
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corporation tax and its equivalents in any relevant jurisdiction;
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(c)
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amortisation of any goodwill and intangibles;
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(d)
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interest income or expense accrued, whether paid or not paid, deferred or capitalised;
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(e)
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any bank facility fee or costs, any guarantee fees and any redemption fees, penalties, termination fees, premiums, expenses or otherwise payable to any lender/creditor;
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(f)
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depreciation;
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(g)
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any distribution declared or paid after the date of this Agreement;
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(h)
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any acquisition costs (including those relating to professional advisors fees, due diligence fees, tax structuring and advisory fees, corporate finance fees, search fees, success fees and finance arrangement fees) relating to acquiring any Acquisition Target, potential acquisition, or new branches which in each case are to form part of the Business or Group; and
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(i)
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gains/losses arising on revaluation of any asset.
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3.
|
In respect of the reversal of provisions referred to in paragraph 3(a) (iv) and (v), in the event of any disagreement between the parties regarding whether this reversal shall be excluded, the Investors shall refer such matter in dispute for determination by an independent firm of chartered accountants which shall be mutually agreed by the Investors in good faith and which shall be a partner in one of KPMG, EY, PwC or Deloitte (“Expert”). The parties agree to co-operate in doing everything which is necessary to procure the appointment of the Expert (including agreeing terms of engagement) and in providing information and representations which the Expert will require for the purposes of his determination. The Expert will act as expert and not arbitrator and the decision of the Expert will, in the absence of fraud or manifest error, be final and binding on the parties. The Expert’s fees will be borne in such proportions as the Expert shall determine.
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4.
|
To the extent that any company or business (an "
Acquisition Target
") may have joined the Company's Group during the Reference Period then EBITDA shall first be determined in accordance with the forgoing provisions in respect of the Reference Period but then (to arrive at the final EBITDA for the Reference Period) there shall be added to such EBITDA in respect of each Acquisition Target an amount equal to £X where X is:
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1.
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Definitions
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1.1
|
In this Schedule the following definitions shall apply (unless the context otherwise requires):
|
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(a)
|
"
Call Option
" means in respect of each Grantee the option granted by it in Paragraph 2.1
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(b)
|
"
Cash
" means cash within the Company's Group determined in accordance with International Financial Reporting Standards on a consolidated basis as at the end of the Reference Period and comprising cash in hand, cash credited to any bank account of the Company's Group (and any interest accrued thereon), cash in transit and the sums receivable under cheques, other bills of exchange or methods of payment received on or before the end of the relevant Reference Period by a member of the Company's Group (not being post-dated but being settled on first presentation) and not at that stage cleared;
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(c)
|
"
Debt
" has the meaning set out in Clause 1;
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(d)
|
"
Exercise Notice
" means in respect of each Option a notice served to exercise such option as referred to in Paragraph 4;
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(e)
|
"
Grantee
" means a Shareholder other than ECP;
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(f)
|
"
Option
" means a Put Option or Call Option as applicable;
|
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(a)
|
"
Option Completion
" means in respect of any Option which has been exercised, the compliance by the relevant Shareholders and ECP with their respective obligations set out in Paragraph 6;
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(g)
|
"
Option Period
" means the period commencing at 00.01 on the 4
th
anniversary of Completion and expiring at midnight on the 7
th
anniversary of Completion;
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(h)
|
"
Option Price
" means a price per Option Share being £x where:
|
|
(i)
|
"
Option Shares
" means in respect of each Grantee all of the Shares held by the relevant Grantee at the date on which the relevant Option is exercised; and
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(j)
|
"
Put Option
" means in respect of each Grantee the option granted to it in Paragraph 2.2.
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2.
|
Grant of Options
|
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2.1
|
Each Grantee hereby grants to ECP an option (the "
Call Option
") to require the Grantee to transfer all (and not some only) of the Option Shares to ECP on the terms set out in this Schedule. ECP shall only be entitled to exercise a Call Option if at the same time it exercises all Call Options.
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2.2
|
ECP hereby grants to each Grantee an option (the "
Put Option
") to require ECP to acquire all (and not some only) of the Option Shares from the Grantee on the terms set out in this Schedule.
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2.3
|
In respect of each Option, the relevant Option Shares shall be sold by the relevant Grantee with full title guarantee free from all encumbrances and with all rights attached to them at the date of Option Completion.
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2.4
|
All dividends and other distributions relating to the Option Shares which have been declared on or before the date of Option Completion but which are yet to be paid at Option Completion shall belong to, and be payable to, the relevant Grantee.
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2.5
|
The parties acknowledge and agree that ECP shall not acquire any interest (whether equitable, beneficial or otherwise) in or in respect of the Option Shares until Option Completion has occurred in respect of the relevant Option.
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3.
|
Option Period
|
|
3.1
|
An Option may only be exercised during the Option Period, and if the Option is not exercised by the end of such period, it shall lapse.
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3.2
|
The date of exercise of an Option is the date on which the Grantee is deemed to receive the Exercise Notice in accordance with Clause 26.
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4.
|
Exercise of Option
|
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4.1
|
Notice to exercise an Option (an "
Exercise Notice
") may be given by a Grantee or ECP as applicable at any time during the Option Period, in respect of all (but not some only) of the relevant Option Shares.
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4.2
|
An Exercise Notice must:
|
|
(a)
|
be given in writing, signed by the relevant Grantee or ECP as applicable and otherwise comply with the requirements of Clause 26;
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|
(b)
|
state clearly that it is intended to constitute an Exercise Notice for the purposes of this Schedule; and
|
|
(c)
|
specify a date on which (subject to determination of the Option Price) the transfer of the relevant Option Shares shall be completed, which date shall be not more than 20 Business Days nor less than 15 Business Days after the date of the Exercise Notice.
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4.3
|
Once given, an Exercise Notice may not be revoked by the giver of it without the written consent of the recipient.
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5.
|
Option Price
|
|
5.1
|
Where a Call Option is being exercised the consideration (subject to adjustment in accordance with Paragraph 8) to be received by the relevant Grantee for the sale of the relevant Option Shares shall be the Option Price times the number of Option Shares, and ECP's obligation to pay the consideration shall be satisfied by payment in accordance with Paragraph 6.
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5.2
|
Where a Put Option is being exercised the consideration (subject to adjustment in accordance with Paragraph 8) to be received by the relevant Grantee for the sale of the relevant Option Shares shall be the Option Price times the number of Option Shares plus £1, and ECP's obligation to pay the consideration shall be satisfied by payment in accordance with Paragraph 6.
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6.
|
Option Completion
|
|
6.1
|
Option Completion will take place at the registered office of the Company on the date specified in the relevant Exercise Notice or (if later) the date 5 Business Days after the date on which the relevant Option Price shall have been finally agreed or determined in accordance with this Schedule, when each of the events set out in paragraph 6.2 below must occur.
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|
6.2
|
Subject to paragraph 6.3, at Option Completion:
|
|
(a)
|
the relevant Grantee shall deliver to ECP:
|
|
(i)
|
duly completed and executed transfers of the relevant Option Shares in favour of ECP;
|
|
(ii)
|
the original certificates in respect of the relevant Option Shares (or an indemnity for lost share certificates in a form reasonably acceptable to the Company); and
|
|
(iii)
|
any other document reasonably necessary to vest in ECP full legal and beneficial ownership of the Relevant Option Shares (save to the extent it relates to the payment of stamp duty on the transfer to ECP);
|
|
(b)
|
the Grantee shall procure that any director of the Company which has been appointed by the Grantee pursuant to rights under the Articles duly resigns from his/her position with the Company without any further liability for the Company (save for any right to be paid any accrued but unpaid fees, salary and expenses);
|
|
(c)
|
ECP shall:
|
|
(i)
|
pay in cash an amount equal to the consideration payable for the relevant Option Shares (determined in accordance with Paragraph 5 (but ignoring any adjustment under Paragraph 8)) to the relevant Grantee by telegraphic transfer in cleared funds; and
|
|
(ii)
|
(notwithstanding the other provisions of this Agreement (including the provisions of paragraphs 5 and 6 of Schedule 6 and paragraphs 4 and 6 of Schedule 10 which shall cease to apply for this purpose) procure that the Company pays in cash to the relevant Grantee by telegraphic transfer in cleared funds an amount equal to the Debt then outstanding to the relevant Grantee (including in respect of accrued but unpaid interest);
|
|
(d)
|
each Shareholder shall exercise all voting rights and powers of control which he may have in relation to the Company to procure (to the extent that he is reasonably able) that the relevant transfer is registered by the Company subject only to it being duly stamped (it being acknowledged that ECP will be responsible for the payment of any such stamp duty).
|
|
6.3
|
Neither party shall be required to complete the sale and purchase of any Option Shares unless the other party complies with the obligations under this Paragraph 6 and unless the sale and purchase of all of the Option Shares in respect of which an Option has then been exercised is completed simultaneously. ECP agree that it shall only exercise a Call Option where it exercises all Call Options simultaneously.
|
|
6.4
|
ECP agrees that it shall be responsible for all stamp duty which becomes payable as a result of a transfer of any Shares as a result of the exercise of any Option.
|
|
7.
|
Determination of the Consideration prior to Option Completion
|
|
7.1
|
Following the exercise of an Option in accordance with this Schedule, the Company shall be instructed to calculate the Option Price in respect of the relevant Option Shares. It shall do so as quickly as reasonably practicable and in any event within 30 Business Days of the relevant exercise. Once calculated it shall provide both ECP and the relevant Grantee(s) with details of the Option Price and the basis on which it has been calculated and shall respond as soon as reasonably practicable to any queries as to the calculation.
|
|
7.2
|
If the relevant Grantee(s) and ECP agree the Company's calculation of the Option Price they shall record this in writing then it shall be the Option Price for the purposes of the relevant Option exercise.
|
|
7.3
|
If the relevant Grantee(s) and ECP do not all agree the Company's calculation within 20 Business Days of it being notified to them, then any of them shall be entitled to refer the matter to an independent accountant agreed by all of them or, in the absence of agreement, by the President of the Institute of Chartered Accountants in England and Wales. Such accountant shall act as expert and not as arbitrator, shall be appointed on his standard terms and shall be entitled to determine his own procedures. The Company, the relevant Grantee(s) and ECP shall provide the accountant with such information as is within their respective possession or control and shall otherwise provide reasonable answers to any questions which this accountant may raise. His costs shall be borne as he shall direct or otherwise as to one half by the relevant Grantee(s) and one half by ECP.
|
|
7.4
|
Option Price as agreed by the relevant Grantee(s) and ECP or (as applicable) determined by the relevant accountant shall be final and binding on the relevant parties (save in the event of manifest error) in respect of the relevant Option exercise.
|
|
8.
|
Post Option Completion adjustment to the Consideration
|
|
8.1
|
Following Option Completion the consideration payable on the exercise of each Option shall be adjusted as follows:
|
|
(a)
|
Where Option Completion occurs within 3 months of the date on which the relevant Option is exercised, then the consideration shall be:
|
|
(i)
|
increased by an amount equal to such proportion of the after tax profit generated by the Company's Group on a consolidated basis between the end of the relevant Reference Period and the date of Option Completion as the number of relevant Option Shares bears to the number of Shares in issue at the date of Option Completion;
|
|
(ii)
|
decreased by an amount equal to such proportion of any after tax loss generated by the Company's Group on a consolidated basis between the end of the relevant Reference Period and the date of Option Completion as the number of relevant Option Shares bears to the number of Shares in issue at the date of Option Completion;
|
|
(iii)
|
increased by an amount equivalent to interest on the relevant consideration paid on Option Completion and calculated at the rate equal to the aggregate of LIBOR and 2 per cent for the period from the end of the relevant Reference Period to the date of Option Completion; and
|
|
(b)
|
where Option Completion occurs more than 3 months after the date on which the relevant Option is exercised, then the consideration shall be adjusted on the basis that:
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(i)
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the Option Price is recalculated on the basis that the relevant Reference Period was the 12 month period to the end of the calendar month last ending before the date on which Option Completion actually occurs; and
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(ii)
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the provisions of Paragraph 8.1(a) is then applied in respect of the period from the end of the adjusted Reference Period to the date on which Option Completion occurs.
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8.2
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In determining the after tax profits or losses of the Company's Group the parties shall adopt the same accounting policies as were used by the Company in preparing its last statutory accounts approved by its auditors before the relevant Option Completion.
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8.3
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The relevant Grantee(s) and ECP shall endeavour to agree any adjustment to the relevant consideration under Paragraph 8.1 as soon as reasonably practicable following Option Completion but if it is not agreed within 30 Business Days of Option Completion then it shall be determined in accordance with the provisions of Paragraph 7 which shall mutatis mutandis apply.
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9.
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Transfer of Shares
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10.
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Further assurance
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1.
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Amount to be provided by each Investor
: To be as set out in Clause 4.2(j).
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2.
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Date for Drawdown
: On Completion.
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3.
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Interest
: No interest shall accrue or be payable.
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4.
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Repayment
: Any amount advanced under Clause 4.2(j) shall be repaid by the Company on the first to occur of:
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(a)
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the fifth anniversary of Completion;
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(b)
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the Board concluding that the Company has surplus working capital so as to enable the Company to repay the relevant advances;
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(c)
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an Exit; or
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(d)
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the relevant advance becoming repayable in accordance with Paragraph 9 below as a result of an Event of Default occurring.
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5.
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Early Repayment
: The Company shall be entitled to repay any advance under Clause 4.2(j) in advance of the relevant advance otherwise becoming repayable. At the same time the Company shall pay any interest accrued on the amount repaid.
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6.
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Pro Rata Repayment
: When repaying any funds advanced under Clauses 4.2(j), the Company shall repay an equal proportion of the aggregate amount of outstanding funds advanced by each Investor under such Clauses.
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7.
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Subordination
: The advance shall be fully subordinated to any amount payable under any Third Party Facility. For these purposes all Investors shall enter into subordination arrangements (in such form as may be agreed by the Company, Investor 1 and ECP acting reasonably) for the purposes of giving effect to the provisions of this Paragraph 7.
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8.
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Event of Default
: If an Event of Default shall occur, then, subject to the subordination arrangements referred to in Paragraph 7, the relevant Investor shall be entitled by notice to the Company to require the Company to immediately repay the full amount advanced including any interest thereon under Clause 4.2(j). Any such repayment obligation shall be subject to the Company complying with its obligations under Paragraph 6.
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9.
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Withholdings
: All amounts to be paid to in respect of any advance under Clause 4.2(j) (including both principal and interest) shall be paid subject to any deduction or withholding required by law.
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