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EXHIBIT 10.16
DATED 16 MAY - 2001
REUTERS GROUP PLC
AND
INSTINET GROUP, INC.
AND
INSTINET HOLDINGS LIMITED
_______________________________________________
TAX SHARING AND INDEMNITY AGREEMENT
_______________________________________________
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THIS AGREEMENT IS MADE THIS 16TH DAY OF
MAY 2001
BETWEEN:-
(1) REUTERS GROUP PLC ("Reuters"), a company incorporated in England and Wales
(registered number 3296375) whose registered office is at 85 Fleet Street,
London and its lawful successors or assigns;
(2) INSTINET GROUP, INC., (formerly Instinet Group LLC) ("Instinet") a limited
liability company whose registered office is at 3 Times Square, New York,
NY 10036, USA and its lawful successors or assigns; and
(3) INSTINET HOLDINGS LIMITED ("Holdings"), a company incorporated in England
and Wales (registered number 1416500) whose registered office is at 85
Fleet Street, London and its lawful successors and assigns.
WHEREAS:-
(A) Reuters directly and indirectly contributed the entire share capital of
Holdings to LLC on 29th September, 2000; (B) On 9th May, 2001 LLC became
Instinet and Instinet assumed all of LLC's liabilities; and
(C) The parties hereto have agreed to enter into this Agreement to provide for
the basis on which past and future Tax Liabilities other than Tax
Liabilities covered by the terms of the US Agreement (as defined in clause
2 below) will be allocated between Holdings and its Subsidiaries on the one
hand and Reuters and its Subsidiaries (other than LLC and all its
Subsidiaries) on the other hand.
NOW THIS AGREEMENT WITNESSES as follows:-
1.1 DEFINITIONS.
In this Agreement, the following words and expressions have the
meanings set opposite them:-
"arm's length basis" means such arrangements or provisions which
would be expected to be made between
independent enterprises;
"Annual Accounts" means the annual accounts of any Instinet
International Company
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prepared in respect of an accounting period
of that company commencing on or before 31st
December, 2000. If any such annual accounts
are audited or prepared for any statutory
purpose the audited or statutory version
shall constitute the annual accounts for
such Company for the period in question;
"Company" or means any company to which this Agreement
"Companies" applies;
"ICTA" means the Income and Corporation Taxes Act
1988;
"Instinet International means any business carried on by any
Business" Instinet International Company;
"Instinet International means Holdings and all its Subsidiaries as
Companies" or "Instinet at 30th September, 2000, together with any
International Company" Subsidiaries acquired or established after
that date and Instinet Schweiz, AG, Instinet
Bermuda Limited and Instinet Investments
(Bermuda) Limited;
"a continuing Reuters means Reuters and any and all direct and
company" and "continuing indirect Subsidiaries (whether or not
Reuters companies" resident in the UK for tax purposes) of
Reuters except LLC and all its Subsidiaries
as at 30th September, 2000 and any
Subsidiaries of LLC acquired after that
date;
"Instinet Tax Liabilities" means all Tax Liabilities in respect of
profits, deemed profits, activities,
turnover, supplies or transactions arising
in any way in the course of any business
conducted by an Instinet International
Company at any time before, on or after 31st
December, 2000 including any Tax Liability
arising in respect of any disposal or deemed
disposal of
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shares of any company conducting any such
business subject to the provisions of
sub-clauses 1.2 to 1.4 (inclusive) below,
but excluding any Tax Liability to the
extent that:-
(a) the Tax Liability was paid or
otherwise discharged before the
date of this Agreement; or
(b) the Tax Liability would not have
arisen but for the making of a
claim, election, surrender or
disclaimer, the giving of a notice
or consent, or the doing of any
other thing under the provisions of
any enactment or regulation
relating to Tax, in each case after
the date of this Agreement and by a
continuing Reuters company; or
(c) the Tax Liability would not have
arisen but for a voluntary
transaction, action or omission
carried out or effected by any
continuing Reuters company at any
time after the date of this
Agreement, other than any such
transaction, action or omission
carried out or effected by any
continuing Reuters company:-
(i) under a legally binding
commitment created on or
before the date of this
Agreement; or
(ii) with the prior consent of
LLC or any Instinet
International Company;
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"LLC" means Instinet Group LLC, a Delaware limited
liability company and (save where the
context otherwise requires) its lawful
successors and assigns;
"non-Instinet Tax means all Tax Liabilities other than
Liabilities" Instinet Tax Liabilities;
"Restructuring" means the series of transactions carried out
under:-
(a) the Contribution Agreement entered
into between Reuters C Corp and LLC
dated 29th September, 2000;
(b) the Contribution Agreement entered
into between Reuters Holdings
Switzerland SA and LLC dated 29th
September, 2000;
(c) the Asset Contribution Agreement
entered into between Instinet
Corporation and LLC dated 31st
July, 2000; and
(d) the Contribution Agreement entered
into between Instinet Corporation
and LLC dated 25th July, 2000;
"Subsidiaries" means:-
(a) in relation to Holdings any company
in which Holdings owns directly or
indirectly more than 50 per cent.
of its ordinary share capital; and
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(b) in relation to Reuters any company
in which Reuters owns directly or
indirectly more than 50 per cent.
of its ordinary share capital but
excluding LLC (including the
Subsidiaries of LLC) and Holdings
(including the Subsidiaries of
Holdings);
and "Subsidiary" shall be construed
accordingly;
"Tax" or "Taxation" means:-
(a) all forms of taxation, including
any charge, tax, duty, levy, impost
withholdings in the nature of
taxation, including (without
limitation) any excise, property,
sales, use, occupation, transfer,
franchise, value added and payroll
taxes, and any national insurance
or social security contributions or
liability whether chargeable
imposed for the support of
national, state, federal, municipal
or local government or any other
person and whether of the United
Kingdom or any other jurisdiction;
and
(b) any penalty, fine, surcharge,
interest, charges or costs payable
in connection with any tax within
the meaning of paragraph (a) above;
"Tax Authority" means any taxing or other authority (whether
within or outside the United Kingdom)
competent to impose any Tax Liability;
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"Tax Item" means any item of income, gain, loss,
deduction or credit, or other asset that may
have the effect of increasing or decreasing
any liability to Tax;
"Tax Liabilities" means any liability of a Company to make a
or "Tax Liability" payment of or in respect of Taxation whether
or not the same is primarily payable by that
Company and whether or not that Company has
or may have any right of reimbursement
against any other person or persons;
"Loss" means any reduction, modification, loss,
counteraction, nullification, utilisation,
disallowance, withdrawal or clawback for
whatever reason; and
"Relief" means any loss, relief, allowance, credit,
exemption or set-off in respect of Taxation
or any deduction in computing income,
profits or gains for the purposes of
Taxation.
1.2 ALLOCATION OF TAX LIABILITY COMPUTED ON A CONSOLIDATED BASIS.
In any case where in a jurisdiction Tax is charged or collected or
computed on any consolidated basis so that Tax in respect of an
Instinet International Business may be charged, collected or recovered
from a continuing Reuters company or vice versa, then the nature of the
Tax Liability shall be determined according to the business to which
the liability is referable and not by reference to the Company on which
it may be chargeable and the amount of the relevant Tax shall be
determined by making all reasonable apportionments of overall
liabilities and by treating companies as if they had dealt with each
other on an arm's length basis so as to ascertain the liability that
would have been an Instinet Tax Liability and a non-Instinet Tax
Liability had those respective liabilities been calculated on a stand
alone, rather than any form of consolidated, basis.
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1.3 DEEMED NON-INSTINET TAX LIABILITY.
Subject to sub-clause 1.4 below, any Tax Liability of a continuing
Reuters company referable to its disposal of shares in an Instinet
International Company or to any receipt of a dividend from such a
company or to the Restructuring or which is referable to any other
transaction which a continuing Reuters company has entered into with an
Instinet International Company shall be treated as a non-Instinet Tax
Liability.
1.4 DEEMED INSTINET TAX LIABILITY.
(i) Any liability of any Company to stamp duty, any equivalent
transaction Tax or capital duty occasioned in any way by way
of the transactions necessitated by the reorganisation of
Instinet International Companies within Holdings, and the
direct and indirect contribution of Holdings to LLC, and any
such liability occasioned by the transfer and contribution of
Instinet Schweiz, AG, Instinet Bermuda Limited and Instinet
International (Bermuda) Limited to LLC shall be an Instinet
Tax Liability.
(ii) Any future liability to stamp duty, capital duty and any
transaction Tax equivalent to stamp duty occasioned by the
withdrawal or other forfeiture of any Relief shall also
constitute an Instinet Tax Liability if the duty would
initially have been paid on or in respect of one of the
transactions referred to above but for the initial
availability of the Relief or exemption which has been
forfeited or has been the subject of withdrawal.
2. PRIORITY OF US AGREEMENT.
This Agreement shall not apply to any Tax Liability to the extent that
it is covered by the terms of the Tax Sharing Agreement dated the same
date as this Agreement and made between Reuters America Holdings, Inc.,
Instinet Group, LLC and Instinet Global Holdings, Inc. (the "US
Agreement").
3. TAX LIABILITIES COVERED BY EXISTING PROVISIONS.
Insofar as provision or reserve for Tax Liabilities has been made or
provided for in the Annual Accounts of any Instinet International
Company or the equivalent accounts of any continuing Reuters company
for any period ending on or prior to 31st December, 2000, no adjustment
shall be made to such Tax
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Liabilities from the treatment provided for or reserved in the relevant
accounts.
4. PAST UNPROVIDED FOR TAX LIABILITIES.
Insofar as any unprovided for Tax Liability arises in respect of any
period ending on or prior to 31st December, 2000, that Tax will be
borne by an Instinet International Company if and to the extent that
the Tax Liability in question is an Instinet Tax Liability and it shall
be borne by a continuing Reuters company if and to the extent that the
Tax Liability is a non-Instinet Tax Liability. Reuters and LLC shall
respectively procure that appropriate Instinet International Companies
and continuing Reuters companies make the required payments, on a
timely basis, to achieve the above objective and failing any such
procurement Reuters and LLC will themselves make payments, on a timely
basis, to achieve the relevant objective.
5. FUTURE TAX LIABILITIES.
For all periods ending after 31st December, 2000 Instinet International
Companies shall bear and indemnify continuing Reuters companies against
all Instinet Tax Liabilities and continuing Reuters companies shall
bear and indemnify Instinet International Companies against all
non-Instinet Tax Liabilities, Reuters and LLC themselves making
payments, on a timely basis, to achieve the objective of this clause in
the event of either of them failing to procure that other Companies
make the required payments on a timely basis.
6. FUTURE GROUP RELIEF ARRANGEMENTS ETC.
Where the system of Taxation operating in any jurisdiction computes and
charges Tax Liabilities on companies on a company by company basis but
permits companies within any given relationship with others to
surrender Tax losses of any description (whether income or capital in
nature) to other companies, then for all periods on and after 31st
December, 2000 any such surrenders involving both an Instinet
International Company and a continuing Reuters company shall be dealt
with on an arm's length basis and the respective parties to the
surrender and claim shall agree the payment that is to be made for any
Tax losses and all appropriate subsequent adjustments (including
payment of interest where necessary) and refunds should the initial
expected surrender of Tax losses be challenged by the Tax Authorities
or prove ineffective in any way.
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7. FUTURE POOLING OF CAPITAL GAINS AND LOSSES BETWEEN DIFFERENT COMPANIES.
In the case of any system of Tax where assets can be transferred by one
company to another on a basis whereunder the acquiring company assumes
the latent Tax gains or losses of the transferring company referable to
the asset or where companies can elect that the capital gains or losses
of one company shall be treated as being realised or incurred by
another company, then where such transfers or surrenders of gains or
losses are made between an Instinet International Company and a
continuing Reuters company the terms on which all such transfers and
surrenders are made shall be agreed on an arm's length basis, with all
appropriate provision being made for adjustment should the initial
expectations need adjustment in any changed circumstances.
8. UNCHALLENGED PAST SURRENDERS OF GROUP RELIEF ETC.
8.1 Subject to sub-clause 8.2 below, where such a system of Tax as is
mentioned in clause 6 above was in operation for accounting periods
ending on or before 31st December, 2000 and an Instinet International
Company, prior to the date of this Agreement, has either surrendered
Tax losses to a continuing Reuters company or vice versa, and the
relevant surrender proves to be effective, then no adjustment shall be
made to the existing accounts treatment of the surrender and to any
payment that may have been made by any Company in respect of that
surrender which has been taken into account in the relevant accounts.
8.2 If any Instinet International Company amends any provision relating to
Tax losses in respect of an accounting period to which this clause 8
applies as a result of which such Tax losses are increased and the
relevant Tax Authorities accept such amendment then, if payment was
initially made by the claimant Company for the Tax losses, an
additional payment shall be made to the surrendering Company on such
terms as would have been agreed between the parties had they been
acting on an arm's length basis and the Tax rate to be applied to the
increase in the Tax losses shall be negotiated by the parties.
9. CHALLENGED PAST SURRENDERS OF GROUP RELIEF ETC.
Where clause 8 would have applied but for the fact that the Tax
Authorities have either challenged the surrender of losses or because
the losses have not been used as initially contemplated
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(either because of insufficiency of profits or losses), then, if
payment was initially made by the claimant Company for the Tax losses:-
(i) if the agreement between the Companies originally
provided for appropriate adjustments and refunds to
be made in the event of a claim being disputed those
provisions shall take effect;
(ii) subject to sub-paragraph (iii) below, where any
agreement for surrender was silent as to such matters
but payment was still made, such refund will be made
as would have been agreed between the parties had
they been acting on an arm's length basis, taking
into account the Tax Liability that the claimant
Company may have to bear and any revived value of
losses to the Company that originally sought to
surrender those losses in the light of the changed
circumstances; and
(iii) any refund referred to in sub-paragraph (ii) above in
respect of a past provision shall be made at the rate
of corporation tax in force at the date the relevant
surrender of Tax losses was made.
10. CHALLENGED SURRENDER OF TAX LOSSES.
Where clause 8 would have applied but for the fact that no payment was
initially made to the surrendering Company for the surrender of its Tax
losses then in the event that the surrender is challenged in either of
the ways contemplated in clause 9, no adjustment payments will be made
unless it was expressly agreed that a payment would be made in such a
situation.
11. PAST POOLING OF CAPITAL GAINS AND LOSSES BETWEEN DIFFERENT COMPANIES.
Where a system of Tax contains such provisions as are referred to in
clause 7 above, and assets have been transferred or Taxable profits or
losses have effectively been transferred between an Instinet
International Company and a continuing Reuters company for an
accounting period ending on or prior to 31st December, 2000, then the
general principles contained in clauses 7 to 10 shall be applied to the
transfer of the assets or the surrender of the losses according to
whether the latent liabilities passed to the transferee Company as
initially expected, or whether any revisions have to be made on account
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either a challenge of the transfer or election by the Tax Authorities
or the assumed latent gains or losses being of a different amount than
initially contemplated.
12. CONTROLLED FOREIGN COMPANIES PROVISION.
12.1 In the event that a continuing Reuters company is charged to Tax under
the United Kingdom controlled foreign companies provisions as contained
in Part XVII, Chapter IV ICTA (as amended from time to time) (the "CFC
provisions") in respect of the distributed or undistributed profits of
an Instinet International Company that ranks as a controlled foreign
company for the purposes of those provisions, then that Tax Liability
will be treated for the purposes of this Agreement as an Instinet Tax
Liability. LLC shall procure that appropriate Instinet International
Companies make the required payments, on a timely basis, to achieve the
above objective.
12.2 In the event that profits that are the subject of an apportionment
under the CFC provisions are distributed directly or indirectly by way
of dividend to a continuing Reuters company, then the Tax that would
have been chargeable in the United Kingdom on that dividend, had there
been no credit or offset for UK Tax charged under the CFC provisions in
respect of the underlying profits which were apportioned to the
continuing Reuters company, shall be treated as a non-Instinet Tax
Liability and the amount initially treated as an Instinet Tax Liability
in respect of the initial apportionment shall retrospectively be
adjusted and shall only be treated as an Instinet Tax Liability to the
extent that the UK Tax Liability in respect of the controlled foreign
companies apportionment exceeded the Tax Liability that would have
arisen on the actual dividend received had there been no credit or
offset, in calculating the Tax on the dividend for any UK Tax charged
under the CFC provisions in respect of the apportionment, and the
balance of the Tax charged in respect of the apportionment shall be
treated as a non-Instinet Tax Liability. Reuters and LLC shall procure
that appropriate continuing Reuters companies and Instinet
International Companies (as applicable) make the required payments, on
a timely basis, to achieve the above objective.
13. EXCHANGE OF INFORMATION.
Reuters and LLC shall provide such information to each other, and shall
procure that continuing Reuters companies and Instinet
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International Companies respectively provide such information as may be
reasonably required:-
(i) for the proper calculation of all liabilities under this
Agreement;
(ii) to enable all companies to compute and record their proper
Tax Liabilities; and
(iii) to enable continuing Reuters companies to seek and obtain
consents under section 765 ICTA, whenever required.
14. SECTION 765 ICTA.
LLC shall not and shall procure that no Instinet International Company
shall enter into any transaction or transactions to which Section 765
ICTA applies without first obtaining the consent of H.M. Treasury as
required by that section.
15. TAX RETURNS.
15.1 Subject to the last sentence of this sub-clause 15.1, LLC shall have
the exclusive right to determine with respect to any Tax return of
either LLC or any Instinet International Company:
(i) the manner in which such Tax return or Tax Items shall be
prepared and filed, including the elections, methods of
accounting, positions, conventions and principles of
Taxation to be used and the manner in which any Tax Item
shall be reported;
(ii) whether any extensions may be requested;
(iii) the elections that will be made by LLC or any Instinet
International Company on such Tax return or with respect to
such Tax Items;
(iv) whether any amended Tax returns shall be filed;
(v) whether any claims for refund shall be made;
(vi) whether any refunds shall be paid by way or refund or
credited against any liability for the related Tax; and
(vii) whether to retain external firms to prepare or review such
Tax returns or Tax Items
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PROVIDED THAT if Reuters and any continuing Reuters company together
own directly or indirectly 50 per cent. or more of the outstanding
stock (by reference to votes or value) of LLC:
(a) Reuters shall, by the end of the relevant accounting period,
designate and notify LLC of the Tax returns that it wishes
to review and approve and LLC shall submit such Tax returns
to Reuters no later than fifteen business days prior to the
due date for the filing of such Tax returns (taking into
account applicable extensions) for Reuters' review and
approval (such approval shall not be unreasonably withheld);
and
(b) Reuters shall have the right to re-determine the manner in
which any Tax Item of LLC or any Instinet International
Company included in such Tax returns including any other
matters listed in sub-paragraphs (i) to (vii) (inclusive) of
this sub-clause 15.1 is reported if the proposed reporting
of such Tax Item would adversely affect the Tax treatment of
Reuters or any continuing Reuters company to a meaningful
extent,
PROVIDED FURTHER THAT the revised treatment of such Tax Item could not
result in the imposition of penalties on LLC or any Instinet
International Company. To the extent that any Tax Items of any
continuing Reuters company are included on any Tax return of either LLC
or any Instinet International Company, Reuters shall have the right to
determine the manner in which such Tax Items are reported.
15.2 In the event that a Tax Item in a Tax return of any continuing Reuters
company corresponds to a Tax Item in a Tax return of either LLC or any
Instinet International Company that is filed after the date of this
Agreement, then LLC shall or shall procure that the relevant Instinet
International Company preparing, or causing the preparation of, such
Tax return shall conform the treatment of the relevant Tax Item in such
Tax return to the treatment of such Tax Item in the relevant Tax return
of the continuing Reuters company PROVIDED THAT the revised treatment
of such Tax Item could not result in the imposition of penalties on LLC
or any Instinet International Company AND PROVIDED FURTHER THAT Reuters
and any other continuing Reuters company together own directly or
indirectly 50 per cent. or more of the outstanding stock (by reference
to votes or value) of LLC.
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15.3 LLC shall and shall procure that each Instinet International Company
shall provide all reasonable and necessary information to Reuters or
its agents in order to facilitate the preparation of any Tax return
filed after the date of this Agreement by any continuing Reuters
company (including the making of any related elections) to the extent
that such Tax return relates exclusively to LLC or to any Instinet
International Company or to any of the assets, businesses and/or
entities transferred to any Instinet International Company as part of
the Restructuring. LLC shall procure that this information is submitted
to Reuters at least 45 business days (or such shorter period as is
agreed to by Reuters) prior to the due date for the filing of such Tax
return (taking into account any applicable extensions). LLC or the
relevant Instinet International Company shall bear its pro rata share
of the costs associated with the preparation of such Tax return.
16. REMEDIES AND WAIVERS.
16.1 No delay or omission by any party to this Agreement in exercising any
right, power or remedy provided by law or under this Agreement or any
other documents referred to in it shall:-
(i) affect that right, power or remedy; or
(ii) operate as a waiver thereof.
16.2 The single or partial exercise of any right, power or remedy provided
by law or under this Agreement shall not preclude any other or further
exercise of it or the exercise of any other right, power or remedy.
16.3 The rights, powers and remedies provided in this Agreement are
cumulative and not exclusive of any rights, powers and remedies
provided by law.
17. ASSIGNMENT.
17.1 The rights, interests and obligations under this Agreement are personal
to the parties and shall not be assigned, delegated, transferred or
otherwise disposed of without the prior written consent of the other
parties.
17.2 This Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the parties and their respective successors
and permitted assigns.
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18. ENTIRE AGREEMENT.
18.1 This Agreement shall constitute the entire agreement between the
parties relating to the past and future allocation of Tax Liabilities
between them.
18.2 Except in the case of fraud, no party shall have any right of action
against any other party to this Agreement arising out of or in
connection with any draft agreement, undertaking, representation,
warranty, promise, assurance or arrangement of any nature whatsoever,
whether or not in writing, relating to the subject matter of the
Agreement made or given by any person at any time prior to the date of
this Agreement except to the extent that it is repeated in this
Agreement.
18.3 This Agreement may only be varied in writing signed by each party.
19. NOTICES.
19.1 All notices, requests, demands and other communications under this
Agreement shall only be effective if in writing.
19.2 Notices under this Agreement shall be sent to a party at its address or
number and for the attention of the individual set out below:-
PARTY AND TITLE OF ADDRESS
INDIVIDUALS
Director of Group Tax Reuters Group PLC
85 Fleet Street
London
Robert Beynon Instinet Group, Inc.
3 Times Square
New York
NY 10036, USA
Mark Higgins Instinet Holdings Limited
85 Fleet Street
London
PROVIDED THAT a party may change its notice details on giving notice to
the other parties of the change in accordance with this clause. That
notice shall only be effective on the day
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falling five clear days after the notification has been received or
such later date as may be specified in the notice.
19.3 Any notice given under this Agreement shall, in the absence of earlier
receipt, be deemed to have been duly given as follows:-
(i) if delivered personally, on delivery;
(ii) if sent by first class post, three clear days after the date
of posting;
(iii) if sent by air mail, six clear days after the date of
posting; and
(iv) if sent by facsimile, provided telephonic confirmation of
receipt is obtained promptly, after completion of
transmission.
19.4 Any notice given under this Agreement outside normal business hours in
the place to which it is addressed shall be deemed not to have been
given until the start of the next period of normal business hours in
such place.
20. CONFIDENTIALITY.
20.1 Each party shall treat as confidential all information obtained as a
result of entering into or performing this Agreement which relates to:-
(i) the provisions of this Agreement;
(ii) the negotiations relating to this Agreement;
(iii) the subject matter of this Agreement; and
(iv) any other party.
20.2 Notwithstanding the other provisions of this clause, any party may
disclose confidential information:-
(i) if and to the extent required by law;
(ii) if and to the extent required by existing contractual
obligations;
(iii) if and to the extent required by any securities exchange or
regulatory or governmental body to which
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that party is subject, wherever situated, including (amongst
other bodies) the UK Listing Authority, the London Stock
Exchange or the Panel, whether or not the requirement for
information has the force of law;
(iv) if and to the extent required for the purposes of any
arbitration pursuant to clause 27.4;
(v) if and to the extent required to vest the full benefit of
this Agreement in that party;
(vi) to its professional advisers, auditors and bankers PROVIDED
THAT any such party is made subject to the same obligation
as to confidentiality in respect of the information which is
the subject of this Agreement;
(vii) if and to the extent the information has come into the
public domain through no fault of that party; or
(viii) if and to the extent the other parties have given prior
written consent to the disclosure, such consent not to be
unreasonably withheld or delayed.
Any information to be disclosed pursuant to sub-clauses 20.2(ii),
(iii), (v), (vi) or (vii) shall be disclosed only after prior written
approval of the other parties.
20.3 The restrictions contained in this clause shall apply without limit in
time.
21. COUNTERPARTS.
21.1 This Agreement may be executed in two or more counterparts, and by the
parties on separate counterparts, but shall not be effective until each
party has executed at least one counterpart.
21.2 Each counterpart shall constitute an original of this Agreement, but
all the counterparts shall together constitute but one and the same
instrument.
22. INVALIDITY.
22.1 If at any time any provision of this Agreement is or becomes illegal,
invalid or unenforceable in any respect under the law of any
jurisdiction, that shall not affect or impair:-
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(i) the legality, validity or enforceability in that
jurisdiction of any other provision of this Agreement;
(ii) the legality, validity or enforceability under the law of
any other jurisdiction of that or any other provision of
this Agreement.
22.2 In the event that any provision of this Agreement shall be void or
unenforceable by reason of any provision or applicable law, it shall be
deleted and the remaining provisions hereof shall continue in full
force and effect and, if necessary, be so amended as shall be necessary
to give effect to the spirit of this Agreement so far as possible.
23. LANGUAGE.
23.1 Each notice, demand, request, statement, instrument, certificate or
other communication under or in connection with this Agreement shall
be:-
(i) in English; or
(ii) if not in English, accompanied by an English translation
made by a translator, and certified by an officer of the
party giving the notice to be accurate.
23.2 The receiving party shall be entitled to assume the accuracy of and
rely upon any English translation of any document provided.
24. HEADINGS ETC.
The headings and table of contents in this Agreement are for ease of
reference only and shall not affect the construction hereof.
25. THIRD PARTY RIGHTS.
Pursuant to section 1(2) of the Contracts (Rights of Third Parties) Act
1999 (the "Contracts Act") the parties intend that a person who is not
a party to this Agreement has no right under the Contracts Act to
enforce any term of this Agreement but this does not affect any right
or remedy of a third party which exists or is available apart from the
Contracts Act.
26. CHOICE OF GOVERNING LAW AND JURISDICTION.
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26.1 This Agreement shall be construed in accordance with, and governed in
all respects by, English law.
26.2 The Courts of England shall have exclusive jurisdiction to entertain
all disputes arising under or in relation to this Agreement.
27. DISPUTE RESOLUTION.
27.1 If a dispute or difference arises out of this Agreement, the parties
will attempt to settle it first by negotiation between themselves and
then by mediation in accordance with the Centre for Dispute Resolution
(CEDR) Model Mediation Procedure (the "Model Procedure"). To initiate a
mediation, a party (the "Disputing Party") shall give notice in writing
("ADR Notice") to the other party (the "Non-Disputing Party"),
requesting mediation in accordance with the provisions of the Model
Procedure. A copy of the ADR Notice should also be sent to CEDR.
27.2 If such dispute or difference is not resolved within 42 days (or such
longer period as the parties may agree) of the giving of the ADR
Notice, or if one of the parties refuses to participate in mediation,
the dispute shall be referred to arbitration in accordance with the
provisions of clause 27.4.
27.3 Any unresolved dispute or difference arising out of or in connection
with this Agreement, including any question regarding its existence,
validity or termination, shall be referred to and finally resolved by
arbitration.
27.4 Any dispute arising out of or in connection with this Agreement which
remains unresolved after mediation, including any question regarding
its existence, validity or termination, shall be referred to and
finally resolved by arbitration under the rules of the London Court of
International Arbitration ("LCIA"), which rules are deemed to be
incorporated by reference into this clause.
27.5 If an ADR Notice is not given prior to the commencement of arbitration,
the Disputing Party commencing the arbitration must serve an ADR Notice
on the Non-Disputing Party to the arbitration within 21 days.
28. AGENT FOR SERVICE.
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28.1 LLC irrevocably appoints the European Tax Manager at Instinet Holdings
Limited of 85 Fleet Street, London to be its agent for the receipt of
Service Documents. LLC agrees that any Service Document may be
effectively served on it in connection with proceedings in England and
Wales by service on its agent effected in any manner permitted by the
Civil Procedure Rules.
28.2 If the agent at any time ceases for any reason to act as such, LLC
shall appoint a replacement agent having an address for service in
England and shall notify Reuters of the name and address of the
replacement agent. Failing such appointment and notification, Reuters
shall be entitled by notice to LLC to appoint a replacement agent to
act on behalf of LLC. The provisions of this clause applying to service
on an agent apply equally to service on a replacement agent.
28.3 A copy of any Service Document served on an agent shall be sent by post
to LLC. Failure or delay in so doing shall not prejudice the
effectiveness of service of the Service Document.
28.4 "Service Document" means a claim form, application notice, order or
judgment or other document relating to any proceedings.
29. EXCLUSION.
This Agreement shall not confer any benefit on a continuing Reuters
company (other than Reuters) if it ceases to be controlled by Reuters.
For the purposes of this clause a company shall cease to be controlled
by Reuters if less than 51 per cent. of its ordinary share capital is
owned (whether directly or indirectly) by Reuters.
30. DURATION.
This Agreement shall terminate and cease to confer any benefit on a
continuing Reuters company if Reuters' holding (whether directly or
indirectly) in the ordinary share capital of LLC (or any other
successor entity which shall own Holdings, or any Instinet
International Companies) falls either below (i) 40 per cent. for the
purposes of the CFC provisions; or (ii) 50 per cent. in any other case.
IN WITNESS whereof the parties have executed this Agreement on the date and year
first above written.
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Signed by REUTERS GROUP PLC acting
by its director /s/ David Grigson
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Signature of Director
David Grigson
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Name of Director
Signed by INSTINET GROUP, INC (as
successor to INSTINET GROUP LLC)
acting by its officer /s/ Paul A. Merolla
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Signature of Officer
Paul A. Merolla
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Name of Officer
Signed by INSTINET HOLDINGS
LIMITED acting by its officer. /s/ Leslie J. Brady
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Signature of Officer
Leslie J. Brady
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Name of Officer